18 March 2009
Strategic transition completed
In Q3 2008/09, Danisco recorded a 4% increase in group revenue and EBIT before share-based payments of DKK 209 million. We maintain the full-year group outlook for 2008/09 that we published in our recent trading statement early March.
CEO Tom Knutzen comments: ‘On 2 March 2009, we published three important stock exchange notices. The completion of the Sugar transaction marks an important strategic step for Danisco and was executed at a satisfactory price. As part of our efforts to restore profitability in Sweeteners we have announced structural initiatives allowing us to take concrete action for the division. And despite Danisco’s relatively defensive nature, we have felt the impact of the current economic downturn and are suffering from lower short-term earnings visibility. This has led to initiatives, including staff reductions, a salary freeze for 2009 and hiring restrictions across the organisation, as we act swiftly to defend our short-term profitability. However, this does not alter our strategic priorities nor challenge the fundamental strength of Danisco.’
Highlights
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Sugar divestment now completed – important step in delivering on our strategic commitments.
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Taking action to restore the level of profitability in Sweeteners: Mothballing China production; changing management.
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Q3 2008/09 revenue came in at DKK 3.1 billion, up 4% Y/Y. This reflected negative organic growth of 2%, a 3% increase from currencies and 3% positive impact from acquisitions. Year-to-date, we have achieved an organic growth rate of 6%.
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Global economic downturn slows food ingredient volumes particularly in Enablers and Sweeteners. Satisfactory growth rates in Cultures.
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Genencor continuing solid growth in bioethanol, food and feed enzymes; detergents remain under pressure. Innovative partnership launch for textiles further strengthening our sustainability platform.
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DuPont partnership on cellulosic ethanol making strong technological and engineering progress.
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In Q3 2008/09, EBIT before Bio Chemicals Projects, share-based payments and special items came in at DKK 219 million (last year DKK 336 million).
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Due to the previously announced impairment charges, asset writedowns and loss on discontinued business, the result for the quarter was a loss of DKK 698 million.
Outlook for 2008/09
Our outlook is unchanged since our latest trading statement (04/2009, 2 March 2009). Thus, we expect profit for the Group to reach breakeven.