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Q4 2019

Improvements in second half and Q4 with the year challenged mainly by difficult agricultural markets. Stronger performance expected in 2020

Organic sales performance of -1% (Q4 +1%) in 2019. Household Care +1% (Q4 +5%), Food & Beverages -1% (Q4 +2%), Bioenergy -3% (Q4 +2%), Agriculture & Feed -5% (Q4 -9%), Tech. & Pharma -3% (Q4 -4%). EBIT margin 28.1% (~26% underlying). Net profit decline of 2%. Free cash flow before acquisitions DKK 2.2 billion.

Peder Holk Nielsen, President & CEO: “Despite sales improving in the second half of the year, our 2019 performance was not satisfactory. Our ag-exposed businesses were volatile and did poorly, whereas Household Care showed healthy signs of recovery in the third and fourth quarters. 2019 was also a year of change, with the launch of our strategy ‘Better business with biology’. Driven by innovation, broader commercial presence and a stronger focus on execution and follow-up, we expect to do better in 2020. Nevertheless, we are cautious about the volatile ag-exposed businesses”.

Highlights 12M 2019:

  • Organic sales performance -1% (Q4 +1%) and 0% in DKK (Q4 0%)
  • Household Care delivered according to expectations set out at the beginning of the year
  • Bioenergy, BioAg, and Food & Beverages negatively impacted by weak agricultural markets
  • Organic sales in both developed and emerging markets declined by 1%
  • Nine new broad market launches and an additional eleven customer specific launches
  • EBIT margin of 28.1% (~26% underlying) and net profit decline of 2%
  • Free cash flow before acquisitions: DKK 2.2 billion; net investments excl. acq.: DKK 1.0 billion
  • Proposed dividend of 5.25 DKK/share. 5% growth in dividend and 46.8% payout ratio
  • Proposal to elect Mr. Heine Dalsgaard, CFO of Carlsberg, to the Board of Directors at the Annual Shareholders’ Meeting to be held on February 26

2020 outlook: Organic sales growth of 1-5% reflecting solid new product performance but uncertainty remains about agricultural markets. EBIT margin at ~27% and ROIC incl. goodwill expected at 20-21%. FCF before acquisitions is expected at DKK 2.5-2.9 billion and decision made to initiate a stock buyback program for up to a total of DKK 1.5 billion.