Solid growth in the quarter
In Q3 2009/10, Danisco reported group revenue of DKK 3.3 billion, reflecting
11% organic growth (Enablers 5%, Cultures 12%, Genencor 21% and Sweeteners 6%).
Our group EBIT* (before Bio Chemicals Projects - BCP) came in at DKK 371
million. That reflects a margin of 11.3%, a 4.2 percentage point expansion Y/Y,
driven by all divisions aside from Sweeteners. Due to the previously announced
non-cash impairment charge of DKK 700 million related to Sweeteners, profit for
the Group came in at a negative DKK 354 million.
CEO Tom Knutzen comments: ‘We continued to see a positive earnings momentum
during the quarter and are encouraged by the results that we have achieved this
financial year, including our ability to lift our earnings outlook once more.
We now expect to achieve our 12.5% EBIT margin (before BCP) milestone already
in FY 2010/11 - i.e. one year ahead of plan.'
Highlights
•Volumes and pricing in Enablers are holding up well. On the back of a
challenging Q3 2008/09, the division's EBIT margin doubled Y/Y due to good
plant performance, efficiency measures and stable input costs.
•Within BioActives, Cultures continued to deliver solid growth and margin
enhancement Y/Y. Sweeteners is meeting its cash flow targets and has seen
revenues stabilising Y/Y. We will implement new restructuring initiatives in Q4
2009/10.
•Genencor secured 21% organic growth as well as continued margin improvement
Y/Y, driven by all major product categories and geographies. The division
launched Accellerase DUET, delivering a market leading cost performance in
enzymes for cellulosic (second-generation) bioethanol production.
•Bio Chemicals Projects: DDCE, our cellulosic ethanol joint venture with
DuPont, opened its Tennessee demonstration plant as planned. Goodyear's concept
tyre based on our innovative BioIsoprene™ product received the prestigious auto
industry award ‘Environmental Achievement of the Year'.
•Strong free cash flow of DKK 345 million for the quarter. Net interest-bearing
debt down to DKK 3.2 billion at the end of the period.
Outlook for 2009/10
Our revenue outlook is now around DKK 13.4 billion (previously DKK 13.25
billion). We lift our EBIT outlook to around DKK 1,600 million after BCP costs
(previously DKK 1,450-1,500 million), and we now expect a profit for the year
of around DKK 300 million (previously above DKK 200 million). For further
details, please refer to page 12.
*Henceforth in this report, EBIT will refer to EBIT before share-based payments
and special items unless otherwise stated.
