Danish food ingredients group Danisco today (8 October) raised its long-term target for EBIT margin but the forecast disappointed the market, sending the company’s shares sliding.
Danisco set a series of new targets for growth from the business and said it would aim for an EBIT margin of 15% after beating its previous goal of 13.5% over the last 12 months.
However, the move hit the company’s shares, which were down 5.1% to DKK469.40 at 15:32 CET this afternoon.
According to Reuters, analysts were expecting a higher target. Five analysts polled by Reuters earlier this week had predicted a target of on average 15.4%.
Danisco’s new targets also included group organic growth of 5-7% “over an economic cycle”.
The company sees its fastest growth coming from its cultures and Genencor business units. It set a target for the divisions of 7-9%. Danisco’s highest EBIT margin target is in cultures, at over 18%.
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CEO Tom Knutzen said: “We will not disclose any exact timeframe for reaching these ambitions externally. Experience has taught us that external factors such as fluctuations in exchange rates, costs for soft commodities and energy, combined with developments in the global economic cycle, may accelerate or decelerate our progression. It is in that light that our focus on continuous progression towards our goals should be seen.”