Company Announcement No. 13/2012 - 19 April 2012
"The solid sales and earnings growth continued during Q2 2011/12 and we delivered 11% organic growth for the first half of 2011/12 (excluding carmine price effect) and a 19% increase in EBIT.
All our divisions contributed positively and especially the Cultures & Enzymes Division proved resilient with strong growth despite the continued uncertainty around probiotic health claims in EU.
Based on the solid performance in the first half we have narrowed our organic growth target from 7-10% to 8-10% (excluding carmine price effect). The organic growth target including carmine price effect has been adjusted from 5-8% to 5-7% to reflect lower raw material prices for carmine. The profitability is still expected to improve compared to last year, and we reiterate our expectation of an EBIT margin above 26%.
As a result of the Group's strong cash generation the Board of Directors has decided to initiate a share buy-back program of up to EUR 80 million with the purpose to adjust our capital structure by distributing excess capital to the shareholders," says CEO Lars Frederiksen.
Highlights 1H 2011/12:
-- Revenue EUR 333 million, up 9% compared to first half 2010/11. Organic growth 9% (11% adjusted for change in sales prices to reflect changes in raw material prices for carmine) -- EBIT EUR 83 million, up 19% compared to first half 2010/11. EBIT margin before special items 25% compared to 23% in first half last year -- Net profit for the period EUR 57 million compared to EUR 48 million in first half 2010/11 -- Total Research & Development spend EUR 24 million corresponding to 7% of revenue compared to EUR 19 million or 6% in first half 2010/11 -- Free cash flow EUR 11 million compared to a negative EUR 6 million in first half 2010/11 -- Net interest bearing debt EUR 410 million corresponding to 1.9 times EBITDA before special items compared to 2.5 times EBITDA before special items at 28 February 2011 -- Q2 2011/12 revenue EUR 165 million up 7% compared to Q2 last year. Organic growth 6% (9% adjusted for change in sales prices to changes in raw material prices for carmine). Operating profit (EBIT) margin reached 25% compared to 23% in Q2 last year. Free cash flow amounted to EUR 34 million compared to EUR 18 million in Q2 2010/11.
-- As a result of the solid performance in first half the organic growth, excluding effect on sales prices from change in raw material prices for carmine, is now expected to be in the range of 8-10% compared to 7-10% in the announcement of 11 January 2012. Raw material prices for carmine have decreased more than expected and organic growth, including the effect from change in carmine prices, is now expected in the range of 5-7% compared to 5-8% in the announcement of 11 January 2012. EBIT margin b.s.i. is still expected to be above 26%.