DENMARK: Danisco preliminary results 2000-01
With the refocusing of Danisco being nearly completed, the Group is ready for further expansion in the ingredients segment. Cultor has been integrated faster than anticipated, and the financial benefits have been realised.
Danisco is now ready for the next step under its clearly identified refocusing strategy: Further development and new acquisitions in the ingredients segment to consolidate the market position further and enhance efficiency. Danisco´s expansion is enabled primarily by a strong and stable cash flow.
Financial results for 2000/01
Danisco posted net sales of DKK 23,541 million, reflecting a planned reduction of 15 per cent on the previous year as a result of divestments. Danisco´s earnings (EBITA) came to DKK 2,306 million, down 11 per cent on last year.
Danisco's main business areas posted net sales of DKK 15,875 million, up 6 per cent on last year. In the segment of Ingredients and Sweeteners, net sales advanced 9 per cent, more than double the general market growth of less than 4 per cent. Net sales in the Sugar segment rose 4 per cent on last year. The Group´s other business areas posted net sales of DKK 7,694 million, down DKK 5,244 million as a result of divestments.
Earnings (EBITA) in the main business areas were DKK 2,195 million, thereby advancing 24 per cent, while the Group´s other business areas delivered a contribution of DKK 111 million.
Part of the earnings growth was attributable to the successful integration of Cultor with additional cost synergies of around DKK 175 million realised during the year ended. In the Group´s other business areas, performance in Danisco Flexible and Danisco Pack UK was disappointing, while the activities of Danisco Foods under divestment performed to expectations.
The 2000/01 financial year was characterised by considerable writedowns of the values of businesses under divestment. Hence, the book value of Danisco Flexible was written down by DKK 766 million, in line with Danisco´s announcement in conjunction with the notice on the sale in April 2001. In addition to this, a writedown of DKK 325 million was made on businesses under divestment (Danisco Pack UK), triggered by the ongoing divestment process. Combined, these writedowns amount to DKK 1,091 million after tax. The flotation of Genencor yielded a DKK 297 million gain.
Earnings (EBITA) in the main business areas were in line with the forecast made at the beginning of the year.
In Q4 2000/01, net sales rose to DKK 4,103 million in the main business areas, up 5 per cent on the same period of last year. Earnings (EBITA) in the main business areas grew 10 per cent to DKK 581 million in the fourth quarter. Profit on ordinary activities came to DKK 264 million, which is higher than expected due to end-of-financial-year adjustments, e.g. excessive tax provisions made in previous quarters. To this should be added writedowns of DKK 794 million on businesses under divestment.
Outlook for 2001/02
The financial year of 2001/02 should see earnings (EBITA) of DKK 1.3-1.4 billion in the Ingredients and Sweeteners segment, and earnings (EBITA) of around DKK 1.1 billion in the Sugar segment. Earnings (EBITA) in the Group´s other business areas are expected to be around DKK 0.1 billion.
Our earnings forecast is exposed to the economic development in the geographic areas of key importance to Danisco as well as the consequences of the abolition of the compensation system for storage costs of sugar. Further, the earnings forecast will be affected by the outcome of the ongoing divestments.
The consolidated profit is expected to be DKK 0.9-1.0 billion.
The consolidated profit for the first quarter of 2001/02 is expected to be DKK 225-275 million.
The above expectations for the future are associated with uncertainty and risks, which may imply that actual results will deviate from forecasts.
Danisco´s Annual Report and Accounts 2000/01 will be available on www.danisco.comfrom early July 2001. The printed report and accounts are expected to be available in August. 20 June 2001 Hugo Schrøder, Chairman of the Board of Directors Alf Duch-Pedersen, CEO
The Board of Directors´ decisions and resolutions at the AGM
Danisco´s Annual General Meeting will be held on Thursday 6 September 2001 at 4:30pm at the Bella Center, Center Boulevard 5, Copenhagen S. The agenda for the meeting will be included in the convening notice, which will be sent to shareholders in mid-August.
The Board of Directors proposes that a dividend of DKK 6.00 be paid per share (unchanged).
The Board of Directors further proposes to the Annual General Meeting:
- Cancellation of a number of secondary names as a result of the divestment of Danisco Flexible
- Renewal of the authorisation in the period until next year´s Annual General Meeting to purchase Danisco´s own shares up to the amount of 10 per cent of the share capital at market price at the time of purchase with a deviation of up to 10 per cent.
Danisco's Annual Report and Accounts 2000/01 will be available on www.danisco.com from early July 2001.
The printed report and accounts are expected to be available in August.
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