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Interim report, 1st half 2010
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We saw strong growth from new products and a significant improvement of earnings in Q2 2010. This has been achieved in spite of difficult market conditions and moreover a prevailing lower revenue and earnings for glyphosate. Now, we begin to reap the reward of our work to broaden and improve the product portfolio which is crucial for fulfillment of the long-term objectives set out in our Business Plan “Five-in-Fifteen”.
– Kurt Pedersen Kaalund,
President & CEO
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Strong Q2 2010 after significant growth from new products
The continued growth in sales of new products has compensated for significantly lower sales of the herbicide glyphosate as well as a generally declining market. In Q2 2010, Auriga saw considerable growth from new products as well as significantly improved earnings. Auriga maintains the outlook for the year.
- Revenue up 3% in Q2 2010. Auriga's revenue declined by 6% in 1H 2010 to DKK 2,798 million (DKK 2,978 million) after a 3% increase in revenue in Q2 relative to the same period last year. An operating profit before amortisation and depreciation (EBITDA) of DKK 238 million (DKK 296 million) was posted, corresponding to an EBITDA margin of 9% (10%). Operating profit (EBIT) was DKK 146 million (DKK 196 million) corresponding to an EBIT margin of 5%.
- Difficult competitive situation. A late start to the season together with unfavourable weather conditions and a difficult market for glyphosate characterised the competitive situation in 1H 2010.
- 17% growth from new products. Cheminova's new products account for an increasing share of revenue and earnings, and sales showed strong growth of 17% in 1H 2010 relative to the same period last year. The importance of glyphosate has been significantly diminished with this product accounting for well below 20% of revenue for 1H 2010.
- Positive cash flow. Working capital remains high, but Q2 saw positive cash flows from operating activities of DKK 225 million (DKK 323 million).
- Mission. Village projects launched in India targetting better living conditions for local citizens through improved agricultural practices and safe use of crop protection products.
Outlook 2010
Based on the positive trends seen in Q2 2010 and assuming a good season in Latin America, Auriga is maintaining the originally announced outlook of revenue of approx. DKK 5,600 million, an operating profit (EBIT) of DKK 300-400 million and improved cash flows from operating activities relative to 2009 of not less than DKK 300 million.
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