Group financial statement for the first quarter of 2011

Solid first-quarter sales, earnings, and cash flow

Sales, earnings, and cash flow had a solid development in the first quarter. Sales grew by 16% in Danish kroner (DKK) and by 14% in local currencies (LCY). Acquisitions contributed positively at approximately 5 %-points. EBIT grew by a strong 19%, taking the EBIT margin to 23.6%. Following recent movements in the US dollar, full-year sales growth in DKK is now expected at 8–11%, whereas the expectations for LCY and organic sales growth are unchanged. Despite the negative development in currencies compared to previous guidance, stronger operational performance allows an unchanged EBIT growth expectation of 8–11% and an EBIT margin now at around 22%. With a maintained EBIT growth expectation, and main currencies hedged, net profit is now expected to grow by 10–13%. Investments are still expected at around DKK 1,400 million and the expectation for free cash flow before acquisitions is now DKK 1,000–1,100 million.
  • In Q1:
  • Sales grew by 16% in DKK and by 14% in LCY vs. Q1 2010, with ~ 5 %-points from acquisitions
  • The gross margin was 55.5% (57.0% excluding acquisitions), compared to 56.3% in Q1 2010
  • EBIT was DKK 635 million, an increase of 19% compared to Q1 2010
  • The EBIT margin was 23.6%, against 23.0% in Q1 2010
  • Net profit was DKK 492 million, an increase of 21% compared to Q1 2010
  • Net investments excluding acquisitions totaled DKK 206 million, vs. DKK 213 million in Q1 2010
  • Free cash flow before acquisitions was DKK 477 million, against DKK 270 million in Q1 2010
  • EMD/Merck Crop BioScience was acquired at a total purchase price of DKK 1.55 billion
  • ROIC was 22.8%, against 24.6% in Q1 2010, including goodwill
I’m very pleased to see that we're off to a solid start in 2011. We saw good underlying demand across most industries and all geographies, and the integration of our recent BioAg acquisition is well under way," says Steen Riisgaard, President & CEO. “Despite the recent depreciation of the US dollar, it’s very satisfying to see that our strong operational performance allows us to maintain the EBIT growth expectation for the full year. Last but not least, around two weeks ago, construction of the world’s first commercial-scale cellulosic biofuel plant was initiated by a collaboration partner in Italy, expected to be ready in 2012. This sends a strong signal that technology for commercial cellulosic biofuel production is ready for deployment.” 
Contact persons:
Press and media:
Investor Relations:
René Tronborg (Europe)
Tel. (mobile): +45 3077 2274
Paige Donnelly (USA)
Tel. (mobile): +1 919 218 4501
Tobias Bjorklund (DK)
Tel. (mobile): +45 3077 8682
Martin Riise (DK)
Tel. (mobile): +45 3077 0738
Thomas Bomhoff (USA)
Tel. (US mobile): +1 919 649 2565