Company announcement no. 10/2009
August 27, 2009
DEVELOPMENTS FOR GLYPHOSATE DISAPPOINTING, BUT GROWTH FROM NEW PRODUCTS
The deteriorating market conditions for the herbicide glyphosate meant that
Auriga's revenue declined by 1% at unchanged exchange rates in 1H 2009.
Calculated in DKK, revenue declined by 3% to DKK 2,978 million, while an
operating profit of DKK 196 million was returned, corresponding to an EBIT
margin of 7%. Other products, including the many new products introduced in
recent years, are developing satisfactorily. Apart from developments for
glyphosate, Cheminova is thus expecting to increase its market share in 2009
through revenue growth of more than 10% coming from other products. The
ambitious targets set out in the Business Plan “Five-in-Fifteen” are
maintained.
•Auriga realised revenue of DKK 2,978 million for 1H 2009 (DKK 3,076 million)
and an operating profit before depreciation and amortisation of DKK 296 million
(DKK 462 million) corresponding to an EBITDA margin of 10% (15%). Profit before
tax was DKK 145 million (DKK 319 million).
•After very strong market growth in 2008 of about 20%, there is a risk of zero
growth in 2009 or even a slightly declining market. The reason is primarily the
deteriorating market conditions for glyphosate, the world's largest crop
protection product.
•Region Europe saw growth in revenue both totally and organically despite lower
sales of glyphosate. Stähler is fully consolidated from March 1, 2009,
contributing revenue growth of DKK 160 million. Cheminova's other sales regions
all saw declining revenues in 1H 2009.
•The market situation for glyphosate is impacted by increasing supplies from
China and lower demand due to climatic conditions and inventory reductions by
distributors. Especially in the USA, and especially towards the end of the
period, this led to significant price falls for glyphosate, which is reducing
Cheminova's revenue and earnings.
•The renewal of Cheminova's product portfolio, which is a central part of the
Business Plan "Five-in-Fifteen", has continued to show satisfactory growth from
products introduced in recent years. The traditional product portfolio now
accounts for half of the total revenue.
•In 1H 2009, the group's main currency, USD, was settled at an exchange rate
which is approx. 10% higher than for the same period last year, but other
currencies have depreciated, which means that the overall effect of changes in
exchange rates was negative.
OUTLOOK 2009
Market conditions for Cheminova's largest product, glyphosate, are not expected
to improve in 2H, but Cheminova's other products, including the many new
products introduced in recent years, are expected to see continued growth.
Auriga therefore maintains the outlook announced on August 6, 2009, of revenue
of approx. DKK 5,800 million and an EBIT margin in the range of 6-7%. Cash flow
from operating activities is expected to be positive as inventories will be
reduced in 2H 2009.
AURIGA INDUSTRIES A/S
Erik Højsholt
Chairman of the Board of Directors
Kurt Pedersen Kaalund
President & CEO
Enquiries concerning the interim report should be addressed to President & CEO
Kurt Pedersen Kaalund on tel. +45 7010 7030.
At 3 pm CET today, August 27, 2009, an audio webcast followed by a
teleconference will be held in English. Further information, phone numbers and
link on Auriga's website. The presentation is available as replay afterwards.
