Danisco: Announcement of results for Q2 2009/2010

Copenhagen / DK. (das) In the second quarter 2009/2010, Danisco A/S reported group revenue of 3,2 billion DKK, down two percent in organic growth terms (Enablers minus four percent, Cultures +7 percent, Genencor plus two percent and Sweeteners minus 16 percent). The group EBIT before BCP came in at 407 million DKK, up 25 percent compared to Q2 2008/2009 (Y/Y). That reflects a margin of 12,6 percent; a 2,9 percentage point expansion Y/Y, driven by all divisions aside from Sweeteners. Profit for the Group came in at 233 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 so far in this financial year, including our ability to lift our EBIT outlook once more. Meanwhile, overall market growth remains modest, and on that basis we remain cautious regarding the earnings momentum for the second half of the year. In Sweeteners, the situation warrants a writedown of goodwill to be booked in Q3 2009/2010. Our longer-term ambitions and priorities for the Group remain unchanged». Highlights:

• Continued EBIT improvements in Enablers, with volumes holding up well. Revenue was impacted by overall lower sales prices reflecting lower input costs.
• Within BioActives, Cultures continues to perform well, and our health + nutrition pipeline is developing in line with expectations. Sweeteners is meeting its cash flow targets. Danisco is addressing its cost structure, capacity and market approach for this area and expects to book a writedown on the remaining goodwill of 700 million DKK (in example non-cash).
• Genencor secured continued margin improvement Y/Y and saw a recovery in its detergents business. The company maintained its solid double-digit growth momentum for enzymes for bioethanol.
• Bio Chemicals Projects (BCP): Strong momentum in deploying second-generation bioethanol – on track to open Tennessee demo plant within the coming weeks. Continued solid technological momentum for BioIsoprene.
• Strong free cash flow of 679 million DKK for the quarter. Net interest-bearing debt down to 3,5 billion DKK at the end of the period.

Outlook for 2009/2010

The revenue outlook is now around 13,25 billion DKK (previously 13,5 billion DKK) due to adverse currencies and continued modest revenue growth. Danisco lifts it EBIT outlook to 1’450 to 1’500 million DKK after BCP costs (previously slightly under 1’400 million DKK). Goodwill writedown in Sweeteners and adjustment of deferred taxes will lower the expected profit for the year to above 200 million DKK (previously 700 million DKK).

Info: «Announcement of results for Q2 2009/2010 (01 August 2009 to 31 October 2009)» (PDF, 28 pages, 522 KB).