In 2009, we have witnessed a slowdown in the overall level of market activity
across most of our ingredient segments and geographies, especially for Enablers
and Sweeteners. We believe this has been caused by a combination of destocking
and caution in the value chain combined with sluggish end user demand due to
the general economic downturn, i.e. lower volumes. So far, we are seeing no
indication that this trend is abating. On the other hand, we are encouraged by
our current application pipeline addressing customer needs, and we welcome the
prospects of lower input costs on the back of lower raw material prices. The
short-term earnings outlook has also been influenced by around DKK 20 million
relating to unfavourable currency movements.
On that basis, we now expect group revenue of around DKK 13 billion (previously
DKK 13.3 billion), corresponding to expected organic growth for the full year
of approximately 4%. We expect group EBIT (before share-based payments but
including corporate costs and central R&D) of around DKK 1,150 million compared
to the estimate of around DKK 1,300 million that we published in connection
with our Q2 2008/09 results in December 2008.
As a result of these developments, management is today announcing wide-ranging
internal measures targeting existing projects and procedures and launching cost
savings initiatives including a salary freeze for 2009 and hiring restrictions
across the organisation. These measures should be seen in context with ongoing
restructuring initiatives already being implemented. The initiatives are
planned to lead to a reduction of around 200 positions in Western Europe and
North America.
With reference to today's other stock exchange notices (05/2009 and 06/2009)
Danisco is lowering its FY 2008/09 Group profit outlook from around DKK 950
million to a break-even result.
In summary, the reduction in profit is caused by three main factors:
•Ordinary earnings outlook impacted by lower business activity in 2009 - (DKK
150 million)
•Non-cash writedown on goodwill and fixed assets in Sweeteners - (DKK 560
million)
•Impact from closing the sale of Danisco Sugar A/S - (DKK 200 million)
Our expected revised outlook for 2008/09 is as follows:
Please see the enclosed file.
Further details on our performance and outlook will be available on 18 March
2009 when we publish our Q3 2008/09 results.
Conference call
This Trading Statement is also available at www.danisco.com. The conference
call for institutional investors, equity analysts and the press to be held on 3
March 2009 at 09:30 am CET can be followed on the above website.
Yours faithfully
Tom Knutzen
CEO
