Good first half with 3% organic revenue growth which was better than expected. Household Care +1%, Food & Beverages +8%, Bioenergy +7%, Agriculture & Feed -6%, Technical & Pharma -4%. Excluding reorganization costs, the EBIT margin was 28.5% (1H 2016: ~28%). Maintained 2017 outlook of 2-5% organic sales growth, around 28% reported EBIT margin, DKK 2.0-2.2bn FCF bef. acq. and net profit growth of 2-5%.
Peder Holk Nielsen, President & CEO of Novozymes: “Overall, the first half was good, and better than expected. We had growth in the large segments and delivered 3% organic sales growth with a strong EBIT margin, excluding one-offs. We made important advances in our innovation pipeline within grain milling, vegetable oil and household care opening up new market segments. We should see growth pick up in the second half of the year, but also acknowledge the risk of agriculture-related markets changing swiftly. Consequently, we maintain our full-year expectation for organic growth, while DKK expectations have been adjusted to reflect weaker currencies.”
Highlights:
- Organic revenue growth in 1H of 3% (Q2: 2%) and 3% in DKK (Q2: 3%)
- 3 out of 5 segments grew, with Food & Beverages and Bioenergy performing very well
- Agriculture & Feed down due to changed BioAg-sales cycle moving sales from 1H to 2H
- 1H EBIT growth of 3% with a reported EBIT margin of 27.1% (1H 2016: 27.2%)
- 1H EBIT margin at 28.5%, excluding reorganization costs (1H 2016: ~28%)
- Q2 EBIT margin at 28.2%, excluding reorganization costs (Q2 2016: 28.0%)
- Solid free cash flow generation with higher investments as expected
- Exciting pipeline development including 4 product launches in Q2 across segments
- Increasing emerging markets presence, including new application centers
- 2-5% organic growth outlook and ~28% EBIT margin for 2017 maintained. Pick-up in 2H growth still expected, although cautiousness applied for agriculture-related markets
- DKK expectations adjusted following weaker currencies, especially the US dollar
Read the full announcement in PDF
