Announcement of Results for Q3 2007/08

Notice no.: 2/2008

Accelerating growth in a challenging market

Q3 2007/08 witnessed a welcome acceleration of topline growth in our Ingredients business. Organic growth averaged 6%, driven by double-digit growth in both Cultures and Genencor, a rebound for Texturants but weakness in Sweeteners.

Ingredients margins remain under severe pressure particularly from rising input costs. Sugar performed ahead of our expectations, and the process of demerging Sugar is now well on track. We are upgrading our outlook for profit for the year to at least DKK 1.6 billion (previously around DKK 1.5 billion) driven by Sugar.

CEO Tom Knutzen comments: “The rebound in revenue growth in Ingredients has been largely broad-based, and we remain optimistic regarding our revenue outlook.  However, soaring Ingredients costs show no signs of abating. It will therefore remain a challenge for us to defend our profits in Ingredients, but we will continue to do so through cost containment efforts, insistence on further price increases, and other value enhancing measures.

We will be adjusting our Ingredients organisation as per 1 May 2008, thus aligning our platform with the ongoing strategy process.” See page 10 for further details.

Highlights

• Ingredients recorded organic growth of 6% for Q3, up from 3% in H1 2007/08. Most major business segments contributed well to this performance, with Sweeteners being the notable exception due to xylitol challenges. Bio Ingredients grew organically by 12% driven by double-digit advances in both Cultures and Genencor.
• The pressure on our Ingredients margins is accelerating. Our reported EBIT margin came in at 11.2% in Q3 2007/08 against 11.4% last year (12.8% adjusted for a negative one-off item).
• Sugar delivered ahead of our expectations in Q3 driven by stronger volumes.
• The recent European Commission announcement has facilitated greater clarity regarding the EU sugar market. As a result, we have lifted our long-term targets for Sugar and formally commenced the process of demerging Sugar by the end of calendar-year 2008.

Outlook for 2007/08

For the Group, we now expect an EBIT of above DKK 2.0 billion (previously at least DKK 1.95 billion).

We adjust our EBIT outlook for Ingredients to around DKK 1,575 million (previously around DKK 1.6 billion).

For Sugar, we upgrade our EBIT by DKK 100 million, to around DKK 600 million, after satisfactory operating performance as well as one-offs of around DKK 60 million.

For the Group, we now expect to report profit for the year before share-based payments of above DKK 1.6 billion (previously DKK 1.5 billion).

For the full results, download the PDF reports below:

Download the full Q3 results report in English

Download the full Q3 results report in Danish

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