Interim report for the first 9 months of 2014

Increased expectations for full-year profit. 2014 sales growth on track

Sales growth in the first nine months was in line with expectations. Organically, sales grew by 8% (5% DKK, 8% LCY) compared with the first nine months of 2013. In the third quarter alone, sales grew by 9% organically compared with Q3 2013. EBIT grew by 16%, and the EBIT margin was 27.4%, up 2.4 percentage points compared with the first nine months of 2013. Around half of the EBIT margin increase was a result of the one-time positive impact from The BioAg Alliance and the other half due to improved underlying profitability. Free cash flow came in strongly at DKK 4,319 million due to the positive one-time impact from The BioAg Alliance, higher profit, a low level of CAPEX and a lower net working capital ratio.

The full-year organic sales growth outlook is narrowed in at the middle of the previous range to 7-8% from 6-9%. This is expected to translate into ~6% sales growth in DKK. Full-year expectations for EBIT growth are increased to 14-15% and for net profit growth to 13-14%, both up from 9-11%. The EBIT margin is now expected at 26-27%, up from around 26%. Expectations for ROIC, including goodwill, are increased to 22-23%, up from ~22%. Lastly, expectations for free cash flow are revised upward by DKK 400-500 million to DKK ~4,300 million, due to expectations of higher profit, lower CAPEX and a lower net working capital ratio.