Food Ingredients sales climb 9% for Danisco

by Jeff Gelski
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COPENHAGEN, DENMARK — Danisco’s Food Ingredients segment recorded revenues of DKK2,274 million ($446 million) for the first quarter ended July 31, which compared with DKK2,235 million ($439 million) for the previous year’s first quarter. Food Ingredients thus saw 7% organic growth despite a disappointing performance from sweeteners.

First-quarter EBITDA for Food Ingredients was DKK446 million, up from DKK424 million in the previous year’s first quarter.

Within Food Ingredients, the Enablers cluster posted first-quarter revenues of DKK1,390 million, up from DKK1,301 million, and first-quarter earnings before income and taxes of DKK192 million, up from DKK153 million.

"Emulsifiers performed particularly well over the quarter with solid double-digit organic growth rates in all major markets driven by a more favorable pricing environment," Copenhagen-based Danisco said when giving first-quarter results Sept. 18. "We are satisfied with the progress we have had in our efforts to pursue compensation for higher raw material costs. However, we still face the challenge of securing further price increases in the coming months in order to defend our profits going forward."

Gums and Systems grew organically at mid-single-digit rates in the first quarter thanks to decent volumes and price increases, particularly in North America and Eastern Europe.

The Bio Actives cluster within Food Ingredients posted revenues of DKK884 million, down from DKK934 million in the previous year’s first quarter. Danisco said its Litesse polydextrose line had good momentum.

"Fructose sales declined due to increased competition, but the sizable decline in sweeteners’ top line was primarily due to the xylitol situation," Danisco said.

The company said revenue for xylitol, a polyol or sugar alcohol, declined 17% in the first quarter. The company has set up an internal task force to identify new areas of application for xylitol.

Companywide, Danisco had first-quarter revenues of DKK3,235 million, up from DKK3,127 million in the previous year’s first quarter. Organic growth of 9% was ahead of the company’s long-term target. In North America, Danisco reported first-quarter revenues of DKK852 million, up from DKK827 million.

Danisco raised its 2008-09 fiscal year revenue estimate to DKK13 billion, up from the previous estimate of DKK12.6 billion.

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