Danisco: earnings meet forecast in Q3 2007/2008

Copenhagen / DK. (das) Danisco A/S announced its financial results for Q3 2007/2008 (01 November to 31 January). The third quarter witnessed a welcome acceleration of topline growth in the Ingredients business, the company said in a statement. Organic growth averaged six percent, driven by double-digit growth in both Cultures and Genencor, a rebound for Texturants but weakness in Sweeteners.

Ingredients margins remain under severe pressure particularly from rising input costs. Sugar performed ahead of our expectations, and the process of demerging Sugar is now well on track. Danisco is upgrading its outlook for profit for the year to at least 1,6 billion DKK (previously around 1,5 billion DKK) driven by Sugar.

CEO Tom Knutzen comments: «The rebound in revenue growth in Ingredients has been largely broad-based, and we remain optimistic regarding our revenue outlook. However, soaring Ingredients costs show no signs of abating. It will therefore remain a challenge for us to defend our profits in Ingredients, but we will continue to do so through cost containment efforts, insistence on further price increases, and other value enhancing measures. We will be adjusting our Ingredients organisation as per 1 May 2008, thus aligning our platform with the ongoing strategy process». Highlights:

  • Ingredients recorded organic growth of six percent for Q3, up from three percent in H1 2007/2008. Most major business segments contributed well to this performance, with Sweeteners being the notable exception due to xylitol challenges. Bio Ingredients grew organically by twelve percent driven by double-digit advances in both Cultures and Genencor.
  • The pressure on Danisco´s Ingredients margins is accelerating. Its reported Ebit margin came in at 11,2 percent in Q3 2007/2008 against 11,4 percent last year (12,8 percent adjusted for a negative one-off item).
  • Sugar delivered ahead of our expectations in Q3 driven by stronger volumes.
  • The recent European Commission announcement has facilitated greater clarity regarding the EU sugar market. As a result, Danisco has lifted its long-term targets for Sugar and formally commenced the process of demerging Sugar by the end of calendar-year 2008.

Further details are available in a PDF file (28 pages | 789 KB). The full report is to download at

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