Strong quarter triggers earnings upgrade
In Q3 2010/11, Danisco recorded revenue of DKK 3.9 billion, an 18% increase Y/Y made up of 9% organic growth, 1% acquisitive growth and 8% positive currency impact. Our group EBIT* (before Bio Chemicals Projects – BCP) came in at DKK 575 million, reflecting a margin expansion of 3.5 percentage points Y/Y driven by all four divisions. Profit for the Group came in at DKK 310 million against a negative DKK 354 million in Q3 2009/10.
CEO Tom Knutzen comments: “Q3 was a strong quarter for Danisco, with Sweeteners back on track, new earnings levels reached in Genencor and Cultures and an exceptional peak cycle performance in Enablers, where we are now entering a new and more challenging phase due to substantial raw material price inflation. Based on our preliminary planning for 2011/12 and using the prevailing exchange rates, we see revenue growth for the Group of around 6-7% in 2011/12 and a stable EBIT margin (after share-based payments) of around 15% (corresponding to around DKK 2.5 billion), reflecting a margin decline in Enablers and margin improvements for the remaining divisions.”
Please refer to pages 3-4 for disclaimer and status regarding the Offer submitted by DuPont.
Highlights
- Revenue and EBIT came in well ahead of last year, reflecting a stronger performance in all four divisions driven by a broad-based, improved product offering and production efficiencies. We are now running at very high capacity utilisation rates which will require new capacity to be built.
- Organic growth for Q3 came in at 9% for the Group driven by all four divisions (Enablers 10%, Cultures 8%, Sweeteners 13% and Genencor 7%). Year-to-date, group organic growth stands at 8%.
- EBIT (before BCP) of DKK 575 million reflected a margin of 14.8% for the quarter (Enablers 15.8%, Cultures 19.6%, Sweeteners 9.2% and Genencor 16.6%). Our YTD EBIT margin before BCP is 16.2%.
- Group RONOA reached 24.7%, up from 16.8% in Q3 last year, driven by improvements in all four divisions.
- We upgrade our EBIT outlook for the full year as a result of a faster than expected recovery in Sweeteners and the exceptional peak cycle performance in Enablers.
Outlook for 2010/11
For FY 2010/11, we now expect to realise revenue of over DKK 15.5 billion (previously around DKK 15.3 billion) and EBIT (before BCP) of over DKK 2.4 billion (previously DKK 2.2-2.3 billion), resulting in an EBIT margin (before BCP) of around 15.5% (previously around 14.5%), corresponding to around 15.0% after share-based payments, which is consistent with the long-term plan communicated on 8 October 2010 in connection with our Capital Markets Day. We expect profit for the year of over DKK 1.35 billion (previously around DKK 1.3 billion). For further details, please refer to page 15.
*In this report, EBIT will refer to EBIT before share-based payments and special items unless otherwise stated.
