Novozymes: high sales growth for 1H 2008

Novozymes: high sales growth for 1H 2008

F O C US COMPANY RESULTS Sasol financial results for year ended Jun 2008 Sasol Ltd has announced financial results for its fiscal year ended 30 Jun 2...

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COMPANY RESULTS Sasol financial results for year ended Jun 2008 Sasol Ltd has announced financial results for its fiscal year ended 30 Jun 2008. Turnover was R 129.9 bn, up 32% from R 98.1 bn the previous year. Operating profit increased by 32% to reach a record of R 34 bn during 20072008. Operating profit was boosted by higher crude oil prices (average dated Brent was $95.51/bbl in 2008 compared to $63.95/bbl in 2007). Net profit for the year was R 23.5 bn, up 34% from R 17.5 bn a year earlier. Earnings attributable to shareholders for 2007-2008 increased by 32% to R 22.4 bn (R 17 bn in 2006-2007), while earnings/share increased by 36% to R 37.3 and headline earnings/share by 50% to R 38.09. During 2007-2008: Sasol Gas operating profit decreased by 8% to R 1785 M; Sasol Synfuels operating profit increased by 19% to R 19,416 M; and Sasol Oil operating profit increased by 128% to R 5507 M. In the chemical cluster, Sasol Olefins and Surfactants delivered a 33% increase in operating profit to R 1512 M, mainly as a result of some improvement in margins and initial benefits from the restructuring process, which included the shutdown of the Baltimore and Porto Torres linear alkylbenzene plants as well as cost reductions in all remaining units. Turnover for the business rose 27% from R 22.6 bn in 2007-2007 to R 28.8 bn. A 50% oleochemical-based alcohols joint venture plant with a capacity of 60,000 tonnes/y was successfully commissioned in Lianyangang, China [Focus on Surfactants, Jul 2008]. Of the other chemicals businesses, Sasol Polymers reported a 39% increase in operating profit and Sasol Solvents a 115% increase. Sasol 2007-2008 results, 8 Sep 2008, (Sasol Ltd, 1, Sturdee avenue, Rosebank, Johannesburg 2196, South Africa. Tel: +27 11 441 3218. Fax: +27 11 441 3189. Website:

Cognis half-year results 2008 For the six months ended 30 Jun 2008, Cognis reported net sales up 6



7.0% to €1.533 bn (up 12.0% on an organic basis), with higher sales across all three core business areas – Care Chemicals, Nutrition & Health and Functional Products. The operating result (adjusted EBITDA) decreased by 5.1% to €176 M; rises in raw material, energy and transportation costs as well as unfavourable exchange rates were partly compensated by optimized cost structures and sale price increases. The company’s net profit for the period was €11 M. The Care Chemicals division reported strong net sales growth of 10.2% to €860 M for 1H 2008 (€731 M for its 1H FY 2007). This growth was primarily driven by higher sales of speciality and innovative products in the Performance Ingredients business as well as the good performance of the Care Surfactants and Alcohols business segment, reflecting mainly higher selling prices due to increased costs of raw materials. The division reported EBIT of €65 M (€68 M), and EBITDA of €101 M (€104 M) for the six-month period. For its 2Q 2008, this division has reported net sales of €431 M (€362 M for its 2Q FY 2007), EBIT of €32 M (€31 M) and EBITDA of €50 M (€49 M). Press release from: Cognis GmbH, Postfach 130164, D-40551, Düsseldorf, Germany. Website: (27 Aug 2008)

Novozymes: high sales growth for 1H 2008 Novozymes’ sales for 1H 2008 reached DKR 4.06 bn, up 9% from DKR 3.37 bn for 1H 2007, with enzyme sales reaching DKR 3.7 bn. Operating profit was DKR 749 M (DKR 788 M for 1H 2007), whilst net profit was DKR 549 M (DKR 570 M for 1H 2007). Overall results in DKR were challenged by unfavourable exchange rate movements, in particular the US dollar. By industry, detergent enzymes accounted for 31% of sales (DKR 1263 M); technical enzymes 29% (DKR 1151 M); food enzymes 23% (DKR 911 M); feed enzymes 9% (DKR 377 M); microorganisms 6% (DKR 258 M); and biopharmaceutical ingredients 2% (DKR 99 M). By geographical area, 38% of sales (DKR 1537 M) were made in Europe, the Middle

East and Africa (MEA); 36% of sales in North America (DKR 1477 M); 19% of sales in the Asia Pacific region (DKR 763 M); and 7% in Latin America (DKR 282 M). Sales in Europe/MEA rose by 1% in local currencies in 1H 2008 due to lower sales within biopharmaceutical ingredients (BPI). Growth for the region was otherwise healthy, particularly within food and detergent enzymes. North American sales were up by 36% in local currencies and 20% in DKR in the first six months of 2008. Growth continued to be primarily related to enzymes for bioethanol production and detergents, although good growth was seen across most areas. Latin American sales rose by 16% in local currencies and 13% in DKR in 1H 2008. Especially detergent, feed and food enzymes sold well. Asian Pacific sales increased by 13% in local currencies and 6% in DKR in 1H 2008. Growth was particularly high in food, feed and detergent enzyme sales, whereas the textile industry contributed negatively. For its 2Q 2008 (period ends 30 Jun 2008), Novozymes reported sales of DKR 2033 M (DKR 1803 M for its 2Q 2007), of which: Europe/ MEA accounted for DKR 762 M (DKR 734 M), North America DKR 737 M (DKR 592 M), Asia Pacific DKR 390 M (DKR 355 M), and Latin America DKR 144 M (DKR 122 M). In 2Q 2008, enzyme sales totalled DKR 1861 M, with detergent enzyme sales showing a 13% increase to DKR 627 M (DKR 555 M for its 2Q 2007) compared to analysts’ predictions of DKR 589 M. Growth was seen in all geographical areas and within both new and old products. Detergent producers continue to increase enzyme dosages for both improved washing performance and additional functionalities in their detergents. Sales of detergent enzymes are also positively affected by ongoing marginal substitution of enzymes for other detergent ingredients as a result of the higher oil prices. Seen in isolation, sales in 2Q 2008 increased by 16% in local currencies and 13% in DKR compared to 2007. Novozymes has increased its sales growth forecast for the whole of 2008 from 6-9% to 8-10% and raised its forecast for growth in results from NOVEMBER 2008

F O C US normal operations from 1-4% to 46%. Novozymes Financial Statement 1H 2008, 14 Aug 2008, & The Zymes (Novozymes’ Shareholder Magazine), Sep 2008, (2), 4-5 (Novozymes A/S, Krogshojvej 36, 2880 Bagsvaerd, Denmark. Tel: +45 8824 9999. Fax: +45 8824 9998. E-mail: [email protected] Website: & Dagbladet Borsen, 14 Aug 2008, (Website: (in Danish)

Danisco 1Q 2008-2009: Genencor For its 1Q FY 2008-2009 (period ends 31 Jul 2008), the Genencor division of Danisco A/S has reported revenue of DKR 966 M (DKR 901 for its 1Q FY 2008-2008), EBITDA of DKR 166 M (DKR 208 M) and EBIT of DKR 112 M (DKR 155 M). The division posted strong top-line growth in the quarter, driven especially by good volumes. Organic growth came in at 13%, thereby exceeding the company’s long-term growth target for the segment, and was fairly broad-based in terms of geography, albeit with particularly good demand in the developed markets. Feed enzymes and enzymes for bioethanol performed particularly strongly. However, the Fabric & Household Care (F&HC) segment recorded a decline in organic top-line growth. There was an acceleration of the shift among several key accounts towards the less-specialized, value segments of the protease market, with healthy volume increases due to increased enzyme usage failing to fully compensate for lower average prices. The mix trend had a negative effect on Genencor’s margins within this business area, and the company does not expect this trend to revert in the immediate future. Meanwhile, the company says it is further scaling up efforts to strengthen the F&HC portfolio. In absolute terms, Genencor’s EBIT was slightly below expectations. Increased R&D spend made a negative contribution to the margin. Meanwhile, the sharp revenue increase in feed versus the lack of progress in F&HC also had a negative product mix impact on Genencor’s EBIT margin, which came in at 12.2% against 17.2% last year. Danisco Announcement of Results 1Q 2008-2009 (1 May 2008-31 Jul 2008), 18 Sep 2008, 11-12 (Danisco A/S, Langebrogade 1, PO Box 17, DK-1001 Copenhagen K, Denmark. Tel: +45 3266 2000. Fax: +45 3266 2175. Website:




COMPANY NEWS Unilever poaches new chief from Nestlé in break with tradition The soaps-to-detergents giant Unilever has broken with tradition and hired an outsider as chief executive for the first time in its 78-year history. The surprise appointment of the 52-year-old Dutchman Paul Polman, who has spent most of his working life at Unilever’s arch-rival Procter & Gamble, was welcomed by the stock market on 4 Sep 2008. But the decision to replace the retiring chief executive Patrick Cescau, 59, with someone not steeped in the Unilever culture could produce shockwaves of unease inside the organization. Four internal executives tipped for the top job will be forced to consider their own future. Polman, who for the past two years has been finance chief at Nestlé, will earn a basic £920,000/y, but this could rise to £3.5 M if he meets performance targets. Inevitably his arrival at Unilever in Oct 2008 to work alongside Cescau until he takes over in Jan 2009 will place a question-mark over the prospects of other executives who threw their hats into the ring when it was known that Cescau was planning to quit. Analysts say four names were fancied: the finance director, Jim Lawrence; Mike Polk, who runs the US operations; Harish Manwani, who runs operations in Asia, Africa and eastern Europe; and Vindi Banga, president for foods, home and personal care. But for now, rivalries may be put aside as Unilever grapples with a number of issues facing the business as it endeavours to drive growth in developing and emerging countries. The group was forced to raise prices sharply in the second quarter to counter rising commodity prices. But the controversial move depressed sales and sent the shares tumbling. One analyst said the group is facing “extraordinarily challenging conditions”. There has also been concern that Unilever has been cutting back on the amount it spends on promotions and marketing while rivals such as Danone, Cadbury and Reckitt Benckiser were either maintaining current levels of spending or increasing them. One major issue to

confront Polman is whether Unilever would gain by being split in two with food – embracing brands such as Hellmann’s, Walls and Flora – hived off from personal care products such as Dove soap. The Independent, 5 Sep 2008, (Website:

Warwick is sold to management team Warwick International, a chemical manufacturer and niche chemical distributor based in Mostyn, UK, has been acquired from Sequa Corp in a management buyout in a deal worth approximately $230 M (£129 M). The British firm Close Brothers Private Equity partly financed the deal. A banking consortium, led by the Royal Bank of Scotland, provided senior debt, mezzanine and working capital facilities for the transaction. Warwick manufactures tetraacetylethylenediamine (TAED), used in making dishwashing and laundry detergents, as well as peroxygen bleach activators. Warwick generates sales of more than $320 M/y. Sequa was itself acquired last year by US private equity firm The Carlyle Group [Focus on Surfactants, Sep 2007]. Chemical and Engineering News, 8 Sep 2008, 86 (36), 21 (Website: & Chemical Week, 8 Sep 2008, (Website:

Bochemie buys nearly 100% of EVM Chemical company Bochemie (Bohumin, Czech Republic) bought nearly 100% of the Hungarian detergents firm EVM from Eurovalue in mid 2008. The acquisition is the first step within the expansion planned by Bochemie’s current owner, the investment company Benson Oak Capital. EVM has a stock capital of about CEK 84 M. In 2006, the last year for which data is available, the company saw a turnover of nearly CEK 500 M. Apart from Hungary, Bochemie plans to expand throughout the whole of the region, spreading from Germany to Bulgaria. The firm saw sales of CEK 634 M for 1H 2008, on the same level as for 1H 2007. Exports represent more than 65% of the firm’s turnover worth CEK 1.3 bn/y. The firm, one of the largest detergent producers in the Czech Republic and Slovakia, owns the trade mark Savo. Hospodarske Noviny, 3 Sep 2008, 52 (173), 18 & 16 Jul 2008, 52 (138), 14 (in Czech)