Biological solutions giant Novozymes has published its “solid” results for the nine months of 2017, which also shows strong growth for Q3. The growth is greater than expected, according to company CEO Peder Holk Nielsen, who also said that the company is adjusting the outlook for the full-year upwards. The third quarter saw organic revenue growth of 8 percent and 4 percent over the nine months, bolstered by a strong Food & Beverages category which was up 9 percent.
“We grew revenue by 8 percent organically in the third quarter and by a satisfying 4 percent in the first nine months. This was better than expected,” says Peder Holk Nielsen, President & CEO of Novozymes.
“The EBIT margin was solid, as was free cash flow. And although there is still some uncertainty regarding the fourth quarter, especially within agriculture-related industries, we are adjusting the full-year outlook.”
“With stronger innovation and a well-diversified business showing good, solid momentum, we are positive looking ahead.”
Executive Vice President, Food & Beverages, Andrew Fordyce says: “We are seeing strong results within Food & Beverages showing our strategy to provide innovation that helps customers improve the quality and sustainability of their products is delivering results.”
“Baking, one of our core F&B businesses, delivered impressive results in Q3. Fresh-keeping, dough strengthening, and flour improving enzyme solutions continue to drive a positive trend with our baking customers – increasingly so in emerging markets like the middle east and China. Also, in the EU, there is increased interest in our acrylamide-reducing solution, Acrylaway, due to impending legislation across a wide variety of baked goods.”
“More than ever, consumers are aware of the health aspects to the foods they consume. As a result we are seeing strong growth in areas like reduced lactose dairy products and reduced added sugar solutions. Tailwind from these underlying market dynamics reiterates the positive development for the launch of Saphera – our highly innovative lactase for reducing lactose,” notes Fordyce.
“Billions of people around the world are lactose-intolerant, and our lactase solution platform also offers them a wider choice of dairy products.”
Highlights
Organic revenue growth in first nine months of 4 percent with three out of five areas growing. Food & Beverages and Bioenergy continue to perform well and Agriculture & Feed also improved.
9M EBIT growth of five percent with a reported EBIT margin of 27.9 percent (compared to 9M 2016: 27.7 percent). Q3 EBIT margin at 29.6 percent (Q3 2016: 28.7 percent).
Free cash flow before acquisitions was solid at DKK 2.1 billion (US$332 million).
There is still some uncertainty regarding agriculture-related markets in Q4, while the full-year outlook is being adjusted: organic revenue growth 3-5 percent (2-5 percent), DKK revenue growth 2-4 percent (1-4 percent), EBIT growth 2-4 percent (1-4 percent). EBIT margin maintained at ~28 percent. FCF before acquisitions at DKK 2.1-2.3 billion (DKK 2.0-2.2 billion). Net profit growth 2-5 percent (2-5 percent), incl. a DKK 60 million (US$9.4 million) write-down on net financials (DKK 47 million post-tax) in Q3.
Earlier this month, the enzymes market leader identified four areas for innovation it hopes will bring about lasting change in the future – yield, raw material flexibility, health and naturalness and the sensory attributes of its food and beverage produce – during an interview with our sister publication NutritionInsight.
