June 21, 2007

Danisco posts better than expected profit for 2006/07

Press release
 

For fiscal year 2006/07 running from May 1, 2006 to Apr 30, 2007, Danisco recorded revenue of DKK20.362 billion (US$3.665 billion), operating profit before special items of DKK2.239 billion (US$403.009 million), profit for the year of DKK1.079 billion (US$194.214 million) and free cash flow of DKK1.160 billion (US$208.794 million). Net interest-bearing debt was DKK12.222 billion (US$2.200 billion) at year-end 2006/07.

Profit for 2006/07 proved better than expected at the beginning of the financial year. A proposal will be made at the company's annual general meeting to pay a dividend per share of DKK7.50 (US$1.35).

Highlights

• Ingredients recorded 5 percent organic growth with all divisions contributing to this performance, which is in accordance with the financial targets.
   
• EBIT margin in Ingredients up 0.8 percentage points to 13.2 percent.
   
• Operating profit before special items in Sugar exceeded expectations.
   
• EU sugar reform proved a bigger-than-expected challenge for the sugar industry. Sugar maintains its strategy to maximise cash flows based on a high degree of efficiency.
   
• 'Unfolding the potential' priorities maintained, however, with increasing focus on accelerating growth initiatives in Bio Ingredients and Texturants & Sweeteners. Several structural efficiencies were carried out in production and R&D in 2006/07.
   
• Danisco entered into an agreement on the divestment of Flavours to Firmenich and a strategic partnership concerning the sale of flavours to the food industry. Share buybacks at the level of DKK0.5 billion (US$89.992 million) are expected to be launched once the divestment of Flavours is concluded in the first six months of 2007/08.
   
• Financial targets for Ingredients and Sugar maintained.

For 2007/08, revenue is expected at the level of DKK19 billion (US$3.420 billion) adjusted for the divestment of Flavours, corresponding to organic growth at the level of 4 percent in Ingredients and a decline in revenue in Sugar as a result of the EU sugar reform.

EBIT before special items and share-based payments is expected slightly under DKK 1,800 million adjusted for the divestment of Flavours (DKK 2,014 million) with Ingredients contributing at the level of DKK1,650 million (US$297.030 million) and Sugar contributing at the level of DKK300 million (US$54.007 million).

Profit from continuing operations before share-based payments is expected at the level of DKK900 million (US$162.023 million). Profit from discontinued operations is expected at over DKK400 million (US$72.015 million) after tax related to the divestment of the Flavours activities. Profit for the year before share-based payments is subsequently expected at over DKK1,300 million (US$234.047 million).