4 March 2008 - 11:00
Danisco increases outlook for Sugar and commences Sugar separation
Notice no. 1/2008
Danisco Sugar upgrades its long-term financial targets on the back of an improved outlook for the EU sugar market. Due to a combination of one-offs and better-than-expected performance, Danisco Sugar also lifts its full-year outlook for 2007/08. Furthermore, we provide Danisco Sugar’s preliminary outlook for 2008/09.
Formal preparations have begun for a spin-off of Danisco Sugar by the end of calendar year 2008. At the same time we are commencing a sales process for the sugar business.
CEO Tom Knutzen states: ‘Today's announcement underscores our sustained and determined commitment to create long-term shareholder value. We remain confident that Danisco Sugar has a compelling future as an independent entity due to its strong cash flow generating characteristics that result from it having one of the most efficient sugar production platforms in Europe. We continue our preparations for the independence of Danisco Sugar, in line with what we stated at our AGM in August 2007.’
Highlights
- As announced by the EU in February, a total of 2.5 million tonnes of sugar were renounced in the latest
round of quota reductions, with a further cut expected to be renounced by 31 March 2008. We now
anticipate greater clarity for the EU sugar market, and an improved balance between demand and supply
- As a result of the improved sugar industry outlook, we raise our long-term financial target for Danisco
Sugar to revenue of at least DKK 6.0 billion and an EBIT margin (before special items and share-based
payments) of at least 10%, to be achieved after the full implementation of the EU sugar reform
- In 2008/09, we preliminarily expect Danisco Sugar to report revenue of around DKK 7.0 billion and EBIT
(before special items and share-based payments) of between DKK 400 million and DKK 450 million
- Due to better operating performance as well as certain one-off items, we now expect Danisco Sugar to
report revenue of at least DKK 6.75 billion and EBIT (before special items and share-based payments) of
around DKK 600 million in 2007/08
- The full-year 2007/08 outlook for Danisco A/S will be updated in connection with the release of our Q3
2007/08 results on 26 March 2008, in accordance with previously announced plans
- Also as a result of the improved sugar industry outlook, Danisco will now formally initiate preparations for
the spin-off of Danisco Sugar to its shareholders before the end of calendar year 2008. Our primary
objective remains an independent listing for Danisco Sugar, unless an outright sale of the business proves
to be more value enhancing
- Regardless of the outcome of this process, we will ask our shareholders to approve either the spin-off or
sale at a general meeting
- We will today host and webcast an analyst and press meeting at 2:00 p.m. CET at our Copenhagen
The full six page release is contained in the the attached PDFs.
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