The recently completed acquisition of EMD/Merck Crop BioScience strengthens the company's capabilities in the domain and has already impacted sales in the microorganism sales area in this first quarter.
Sales of microorganisms were up by 95% in Danish kroner, mainly due to the contribution from the acquisitions of EMD/Merck Crop BioScience and Turfal completed this year and last year respectively.
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.
Q1 in snaphots
- 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
To comment, login here
Or register to be able to comment.