After the first half of 2023, Novozymes sees overall stability in a volatile
environment and delivers 3% organic sales growth. Following destocking and lower
consumer demand, the organic full-year sales growth outlook is slightly narrowed
from 4-7% to 4-6%. Growth is expected to be driven mainly by pricing.
COPENHAGEN, Denmark - August 9, 2023.?Novozymes delivers 3% organic sales
growth, an EBIT-margin of 25% before special items, and ROIC including goodwill
of 17% before special items in the first half of the 2023 financial year.
Novozymes benefits from a diverse portfolio of solutions and broad end-market
exposure in a volatile market. Following a higher level of destocking and lower
consumer demand, the company's full year organic sales growth outlook is
narrowed from of 4-7% to 4-6%.
"We have succeeded in building a diverse and unique portfolio of solutions as
well as a broad end-market exposure, which creates stability and profitability
even in a volatile market. Novozymes is delivering results for the first half of
2023 within expectations. However, following a higher level of destocking than
previously anticipated as well as lower consumer demand, mainly in food-related
areas, we are narrowing our guidance from 4-7% to 4-6%," says Ester Baiget,
President & CEO, and continues:
"We continue to expect a stronger second half of the year supported by pipeline
innovation and increased market penetration, as well as a softer comparator and
a levelling-off in customer destocking. Across Novozymes, we experience an
ongoing high demand for our biosolutions, enabling our customers to grow their
businesses, safeguarding the planet's resources, and making better lives in a
growing world." ?
In December 2022, Novozymes and Chr. Hansen agreed to combine and create a
leading, global biosolutions partner with a broad biological toolbox, strong
innovation and application expertise, and world-class production capabilities.
As previously communicated, the closing of the combination is expected to be
completed in the fourth quarter of 2023 or the first quarter of 2024.
"The combination with Chr. Hansen is progressing as planned, and we have
currently filed for approval with main jurisdictions. I am extremely excited
about the potential of the combination and the opportunities it will bring to
our customers, our employees, and the world. We want to unleash the full
potential of biosolutions while accelerating our operational and financial
performance," says Ester Baiget, President & CEO.
During the first half of the 2023 financial year, Novozymes has launched six new
products, two of which were public. Novozymes also entered into a new consortium
with the purpose of developing a climate-neutral way of converting CO(2 )into
protein for human consumption bypassing the use of agricultural land, water, and
fertilizer. Novozymes' research and participation in the consortium are funded
by the Bill & Melinda Gates Foundation.
Business area results
For the first half of the 2023 financial year, organic performance by business
area were 1% in Household Care, -6% in Food, Beverages & Human Health, 27% in
Bioenergy, -11% in Grain & Tech Processing and 7% in Agriculture, Animal Health
& Nutrition.
Sales growth in the first half of 2023 was within expectations, benefitting from
a diverse portfolio of solutions and broad end-market exposure. While the sales
mix has changed relative to initial expectations, Novozymes also delivers on its
first half profitability targets as a result of a unique portfolio with similar
earnings profiles across business areas and robust production setup.
Organic sales growth continues to be strong in Bioenergy delivering double-digit
growth. In Agriculture, Animal Health & Nutrition, the sales growth is driven by
performance in Animal Health & Nutrition with strong demand for sustainable
yield and health solutions. In Household Care, the growth is driven by developed
markets from increased penetration and despite declining in-market detergent
volumes. Sales growth declined in Food, Beverages, and Human Health impacted by
destocking and lower consumer demand, as well as supply-chain constraints and a
soft North American probiotics market in Human Health. Sales growth also
declined in Grain & Tech Processing despite a stable grain performance and was
due to expected softness in tech from reduced sales of solutions for COVID-19
test kits and declining demand in textile.
Regional results
For the first half of the 2023 financial year, organic growth rates by geography
were 1% in Europe, Middle East & Africa, 6% in North America, -5% in Asia
Pacific, and 16% in Latin America.
Sales in developed markets grew 5% growth organically and the performance in
emerging markets was flat. Bioenergy was the main driver of growth in developed
markets while Agriculture, Animal Health & Nutrition delivered solid growth.
Household Care also contributed to growth despite declining industry volumes in
developed markets. Food, Beverages & Human Health as well as Grain & Tech
Processing declined.
In emerging markets, growth was driven by Bioenergy, while Agriculture, Animal
Health & Nutrition and Household Care also contributed positively. This was
offset by negative growth in Food, Beverages & Human Health, and Grain & Tech
Processing.
Financial outlook for 2023?
The organic sales growth outlook is narrowed from 4-7% to 4-6% following a
higher level of destocking than previously anticipated and lower consumer
demand, mainly in food-related areas. Full-year growth is expected to be driven
mainly by pricing. Positive pricing is expected across all business areas, also
in the second half, whereas innovation and increased market penetration will be
volume supportive.
As expected, growth in the first half of the year was lower, with a stronger
performance expected in the second half. The outlook assumes no major changes to
the current state of the global economic situation and reflects an anticipated
levelling-off of destocking in the second half, mainly in the food-related
areas.
EBIT margin before special items is maintained at 25-26%. ROIC incl. goodwill
before special items is maintained at 16-17%.??
About Novozymes
Novozymes is the world leader in biological solutions. Together with customers,
partners, and the global community, we improve industrial performance while
preserving the planet's resources and helping build better lives. As the world's
largest provider of enzyme and microbial technologies, our bioinnovation enables
higher agricultural yields, low-temperature washing, energy-efficient
production, renewable fuel, and many other benefits that we rely on today and in
the future. We call it Rethink Tomorrow. www.novozymes.com
(http://www.novozymes.com/)
NASDAQ OMX: NZYM-B ? 6,500 employees ? DKK 15 billion turnover ? 30+ industries
? 700+ products

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