March 21, 2007

 

Danisco posts US$2.721 billion sales in Q1-Q3 2006/07
 

Press release
 

 

Denmark-based Danisco announced Mar 20 its recorded revenue of DKK15.22 billion (about US$2.721 billion) for the first three quarters of 2006/07 (May 1, 2006 to Jan 31, 2007).

 

During the same period, EBIT before special items and consolidated profit after tax registered DKK1.62 billion and DKK806 million respectively.

 

At group and segment level, profit and cash flows were as anticipated, with free cash flow posting DKK1.439 billion.

 

In Q3, an additional DKK40 million provision was expensed to cover damages in the Spezyme ethyl patent infringement case, as well as DKK105 million in the sugar division to cover the quota reduction restructuring levy for 2006/07 to the EU.

 

EBIT margin in Ingredients was up 0.7 percentage points year-to-date to 12.9 percent.

 

All ingredients divisions recorded an EBIT margin improvement in Q3 on last year, excluding the patent case provision, while several efficiencies were launched in the production structure and technology platform.

 

Danisco will gradually expand its Xylitol capacity during 2007, and sees the sugar division to be on track with earnings expectations for 2006/07.

 

The European Commission has cut sugar quotas by 12 percent for 2007/08, and as a result, the sugar division expects EBIT of about DKK300 million in 2007/08. Long-term earnings expectations for the sugar division remain unchanged.

 

Revenue is expected at about DKK20.75 billion for 2006/07, with Ingredients now forecast to record sales slightly under DKK13.75 billion as the increased focus on the profit margin has resulted in slightly lower organic growth.

 

The sugar division's revenue is expected at slightly over DKK7.0 billion due to lower export sales. EBITDA before special items and share-based payments are maintained at about DKK3.3 billion.

 

In Ingredients, EBITDA is reduced by DKK25 million to about DKK2.525 billion due to a DKK40 million provision relating to the Spezyme ethyl patent dispute, while EBITDA in the sugar division is adjusted from about DKK900 million to about DKK 950 million.

 

The outlook for consolidated profit before share-based payments and after special items is changed from about DKK1.0 billion to slightly over DKK1.0 billion.