Satisfactory progress on targets and focus areas
Results are in line with expectations, and Auriga maintains its outlook for the year. Revenue for Q2 2011 was on the same high level as in Q2 last year, resulting in total growth of 6% for the first half-year. The new products continued to generate double-digit growth rates, while glyphosate’s share of revenue was reduced as planned. Earnings (EBITDA) were up 1 percentage point at 9.5% (8.5%), while operating profit was up DKK 50 million at DKK 196 million. Average working capital improved, and the NIBD/EBITDA ratio was reduced to 5.4 (18.1).
(Figures in brackets are figures for H1 2010)
Auriga’s revenue was up 6% in H1 2011 at DKK 2,968 million (DKK 2,798 million) despite unfavourable climatic conditions in Europe and North America in Q2 2011. Excluding glyphosate, an underlying growth of 11% was achieved in H1 2011, while glyphosate accounted for a declining 11% (15%) share of revenue. Despite competition and high raw material and energy prices, the new products continue to contribute margins well above the average for the business as a whole.
- At DKK 604 million (DKK 602 million), capacity costs were on a par with the prior-year period despite increasing levels of activity and non-recurring costs in the form of severance payments.
- Operating profit before amortisation and depreciation (EBITDA) was up 19% at DKK 283 million (DKK 238 million), corresponding to an EBITDA margin of 9.5% (8.5%). Operating profit (EBIT) totalled DKK 196 million (DKK 146 million), while a profit before tax of DKK 120 million (DKK 81 million) was posted, up 48%.
- The average working capital relative to revenue was improved, but growth has resulted in a negative cash flow from operating activities of DKK -294 million (DKK -278 million). The net interest-bearing debt was reduced to DKK 2,466 million (DKK 2,513 million).
- Growth was achieved despite unsatisfactory results in Stähler in Germany. Full ownership of the company was acquired in July this year at a price based on these results. Under a new local management, initiatives have subsequently been launched which are aimed at strengthening the company and improving earnings in future.
OUTLOOK 2011
Auriga maintains the outlook announced earlier of revenue of approx. DKK 5,800 million, an EBITDA margin of 8-10% and an EBIT in the range of DKK 300-400 million as well as an improved cash flow from operating activities relative to 2010. The outlook is based on current foreign exchange rates and continued growth from new products as well as favourable market conditions during the coming season in Latin America. The group’s results are dependent on developments in the agricultural sector, and on climatic, economic and market conditions, including the possibilities for registrations and reregistrations.
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