Rising growth in Europe offsets sugar pressures at Danisco

By staff reporter

- Last updated on GMT

Related tags: Cent, Marketing

Danisco ingredients business wins market share in the first
quarter, offsetting a hit at the Danish firm's sugar unit, reports
the Danish firm.

Danisco said sales for the group in the first quarter rose to DKK5.16 billion (€0.69bn) from DKK4.21 billion a year ago.

Pretax profit for the three months to July fell to DKK380 million, from DKK546 million.

But the ingredients unit, that supplies a broad range of products to food markets, from enzymes and cultures, to emulsifiers and flavours, has seen growth rates rising in Europe. This, despite sluggish growth for the saturated food maket in Western Europe, and due to strong gains made in Eastern Europe.

"The market in Europe is showing positive signs,"​ Danisco said yesterday.

Texturants, that contribute 38 per cent to overall sales, recorded strong growth (10 per cent), driven in part by relatively favourable weather and solid demand for products for the bread and dairy industries, said the firm.

EBIT for the unit rose 17 per cent year-on-year to DKK455 million, boosted by the bolt-on acquisitions of US enzyme firm Genencor, and Rhodia Food Ingredients.

Genencor lifted sales by about DKK600 million, or 24 per cent, and Rhodia Food Ingredients added about DKK100 million to sales.

Ingredients' operating margin was 13.6 per cent, compared with 15.7 per cent a year ago.

In the original ingredients segment the operating margin was 15.3 per cent, and 5.7 per cent at Genencor, where the integration process is still at an early stage.

Without Genencor, the operating margin exceeded the long-term target of 15 per cent, Danisco said.

"The margin has been achieved against low earnings in the flavour division,"​ the firm adds.

The sugar unit, which has about 36 per cent of group sales, saw operating profit fall by around 16 per cent to DKK198 million crowns, marked by excess production of sugar and growing competition.

Related topics: Market Trends

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