Company announcement no. 8/2009
May 5, 2009
SUMMARY
SLOW START TO THE YEAR, BUT OUTLOOK MAINTAINED
Despite the difficult global economic situation, Auriga achieved growth of 3% in
Q1 2009 at constant exchanges rates. In Danish kroner, revenue was up 1% at DKK
1,440 million, while operating profit was DKK 103 million, corresponding to an
EBIT margin of 7%. Auriga maintains its outlook for the year and confirms the
ambitious targets set out in Cheminova's business plan “Five-in-Fifteen”.
The global economic crisis is impacting the agricultural sector with farmers in
some regions having difficulties obtaining financing for their purchases of
seeds, fertilisers and crop protection products. This has - in conjunction with
a late spring in North America and the CIS countries (Russia, Ukraine etc.) and
drought in Argentina and southern Brazil - led to a slower start to the year
than expected for Cheminova.
As expected, glyphosate prices are falling in several markets, but remain
higher than for the same period last year. The most important currency, USD, has
been settled at an exchange rate which is 10% higher than in 2008, but other
currencies have fallen, so that the combined effect of changes in exchange rates
on revenue was negative.
Region Europe achieved an increase in revenue, both overall and organically. The
acquisition of an additional 25% ownership share in Stähler, which means that
Cheminova now owns 75%, has contributed revenue of DKK 57 million as Stähler is
fully consolidated from March 1. Sales declined in Cheminova's other sales
regions.
Auriga generated revenue of DKK 1,440 million (DKK 1,430 million) and an
operating profit before depreciation and amortisation for the period of DKK 153
million (DKK 170 million), corresponding to an EBITDA margin of 11% (12%).
Operating profit was DKK 103 million (DKK 122 million), and after financial
expenses of DKK 24 million, profit before tax was DKK 81 million (DKK 109
million).
OUTLOOK 2009
Considerable uncertainty still surrounds market developments, but market
analysts expect to see growth of 3-5% in the market. Cheminova still
expects to see a strong demand for the remainder of the year and increasing
market share. Introduction of several new products during the season, growth
from previously launched products and the full consolidation of Stähler for ten
months of the year and a higher USD settlement rate are all in all expected to
ensure a growth in revenue of approx. 10%. For 2009 as a whole, Auriga and
Cheminova thus maintain an outlook of revenue of approx. DKK 6,250 million and
an EBIT margin of approx. 9%. Increasing sales will lead to a reduction in
inventories, primarily in Q3, which will result in an expected positive cash
flow from operating activities.
BUSINESS PLAN "FIVE-IN-FIFTEEN"
Cheminova is pursuing an ambitious target of a doubling of its market share to
5% in 2015 through organic growth and acquisitions. At the same time, earnings
shall be improved through economies of scale and continued improvements
throughout the organisation to ensure that results match the best among peers in
the industry. The fulfilment of the ambitious targets is based on a number of
important assumptions, but the current global economic crisis is not expected to
impact the long-term market prospects, and the targets set out in the plan are
therefore maintained.
AURIGA INDUSTRIES A/S
Erik Højsholt
Chairman of the Board of Directors
Kurt Pedersen Kaalund
President & CEO
Audio webcast and teleconference in English will be held at 3 pm CET today, May
5, 2009.
Enquiries concerning the interim report should be addressed to President and
CEO Kurt Pedersen Kaalund on tel. +45 7010 7030.
