In Danisco's announcement of results for Q1 2010/11 published on 21 September
2010, we stated that our financial ambitions had now been met, and that new
financial ambitions would be published on 8 October 2010 in connection with
Danisco's Capital Markets Day.
Our new financial ambitions should be seen as a natural next step as we
continue to execute on our existing strategy - Becoming first choice - that
aims to help our customers increase their competitiveness through innovative,
sustainable and bio-based ingredient solutions.
Danisco's new financial ambitions are based on the exchange rates that formed
the basis for our full-year guidance for 2010/11 as of 21 September 2010. They
have been defined after costs for share-based payments (SBP) where the previous
ambitions were before SBP. The financial ambitions do not include any impact
from Bio Chemicals Projects.
•Group organic growth 5-7% over an economic cycle
- Enablers 3-5%
- Cultures 7-9%
- Sweeteners 3-5%
- Genencor 7-9%
•Group EBIT* margin 15.0%
- Enablers >14.0%
- Cultures >18.0%
- Sweeteners >10.0%
- Genencor >17.0%
- Unallocated costs: Below 1.5% of Group revenue
•Group RONOA >20%
•Group gearing 1.5-2.5 times EBITDA
Several drivers are already in motion aimed at enhancing our financial
performance over the coming years. Increased R&D investments should strengthen
our offering further, thus lifting the profitability level of our sales mix. We
expect volume growth and modular capacity expansion within our existing
footprint to further enhance our cost competitiveness and returns. And more
efficient internal processes within the entire organisation will lower our
relative cost level. In other words, we plan to reach our targets through
better products, higher volume and more efficient plants, combined with a
streamlined and focused organisation. The capabilities from technology to
people and processes that are necessary to achieve these ambitions are already
in place, and many projects are ongoing.
As mentioned above, the new financial ambitions exclude any impact from our
BioIsopreneTM collaboration with Goodyear, which has the potential to replace an
oil derivative chemical with one based on renewable resources.
As before, our second-generation bioethanol joint venture with DuPont is
accounted for under Share of profit from joint ventures. This unique
partnership is our key entry into the second-generation bioethanol market with
its very high market potential.
When these two Bio Chemicals Projects enter their commercialisation phase, we
will define and disclose our financial ambitions associated with these
collaborations.
CEO Tom Knutzen comments: “We are confident that we can achieve these new
financial ambitions, and we look forward to bringing Danisco to the next level
of profitable growth. 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.“
All material from today's Capital Markets Day will be available this morning
via www.danisco.com/cmd.
Yours faithfully
Tom Knutzen
CEO
*EBIT definition: Before Bio Chemicals Projects (BCP).
It should be noted that costs to share-based payments will no longer be shown
separately in Danisco's income statement as of 1 May 2011.
