Danisco: reports solid growth in third quarter

Copenhagen / DK. (das) In the third quarter 2009/2010, Danisco A/S reported group revenue of 3,3 billion Danish Crowns (DKK), reflecting eleven percent organic growth (Enablers five percent, Cultures twelve percent, Genencor 21 percent and Sweeteners six percent). The group Ebit (before Bio Chemicals Projects – BCP) came in at 371 million DKK. That reflects a margin of 11,3 percent; a 4,2 percentage point expansion year to year, driven by all divisions aside from Sweeteners. Due to non-cash impairment charge of 700 million DKK related to Sweeteners, profit for the Group came in at a negative 354 million DKK.

CEO Tom Knutzen: «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 percent Ebit margin (before BCP) milestone already in 2010/2011 – in example one year ahead of plan». Highlights:

• Volumes and pricing in Enablers are holding up well. On the back of a challenging Q3 2008/2009, the division´s Ebit margin doubled year to year due to good plant performance, efficiency measures and stable input costs.
• Within BioActives, Cultures continued to deliver solid growth and margin enhancement year to year. Sweeteners is meeting its cash flow targets and has seen revenues stabilising year to year. The company will implement new restructuring initiatives in Q4 2009/10.
• Genencor secured 21 percent organic growth as well as continued margin improvement year to year, driven by all major product categories and geographies. The division launched AccelleraseÒ Duet, delivering a market leading cost performance in enzymes for cellulosic second-generation bioethanol production.
• Bio Chemicals Projects: DDCE, Danisco´s 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 345 million DKK for the quarter. Net interest-bearing debt down to 3,2 billion DKK at the end of the period.

Outlook for 2009/2010

Danisco´s revenue outlook is now around 13,4 billion DKK (previously 13,25 billion DKK). The company lifts its Ebit outlook to around 1’600 million DKK after BCP costs (previously 1’450 to 1’500 million DKK), and it now expects a profit for the year of around 300 million DKK (previously above 200 million DKK).

Info: «Announcement of results for Q3 2009/2010 – 01 November 2009 to 31 January 2010» (complete press release, PDF, 28 pages, 521 KB).