Novozymes has reported its first-quarter results with an overall sales growth of 2 percent, in line with company expectations. And the global biotechnology company is on track to deliver its full-year sales outlook of 4-6 percent. However, President and CEO Peder Holk Nielsen points to uncertainty in the agriculture-related business, citing “geopolitical tensions.”
Food & Beverages was up 5 percent, Bioenergy increased 9 percent, Household Care was also up 1 percent. While Agriculture & Feed was down 5 percent and Technical & Pharma declined 10 percent.
Meanwhile, the EBIT margin at 28.9 percent and FCF before acquisitions DKK 403 million (US$65,975,250). Organic sales growth of 2 percent and -6 percent in DKK. USD/DKK decline of 13 percent in Q1.
“We’re well in line to deliver on our full-year sales growth outlook of 4-6 percent, and margins are strong despite a significant currency headwind,” said Nielsen.
“We continue to see good progress on our key priorities, including increasing presence with new and existing customers to cater to their individual needs.”
“There is still some uncertainty in the agriculture-related business, including from recent geopolitical tensions. However, with current insight, we remain firm about accelerating sales growth throughout 2018 and beyond.”
Baking delivers positive results in Q1
Executive Vice President, Food & Beverages, Andrew Fordyce, adds how the Food & Beverages division continued to drive positive results in Q1 across regions and industries, led by increased baking and nutrition sales in Asia Pacific and Latin America.
“We continue to invest in and develop our innovative solutions to help our customers improve the quality of their food and beverage products, and are pleased to see the positive and profitable momentum continue, specifically with our growth platforms and emerging markets,” he said.
“One of Food & Beverages’ core businesses, baking, continued to deliver positive results in the first quarter of 2018, driven by increased uptake of our solutions for specific bread types consumed in Asia Pacific and Latin America.”
The company recently opened a state-of-the-art baking lab in Turkey, enabling Novozymes to further partner with customers to add performance and benefits to their region-specific baking products.
“Within the EU we continue to see an increased focus on our acrylamide-reducing solution, Acrylaway, due to legislation coming into effect in the recent month,” adds Fordyce.
Earlier this month Vice President, Food & Beverages Business Operations, Europe and Americas, Arnaud Melin, spoke about how the company has been operating in this space for several years, pioneering award-winning acrylamide reduction technology.
Novozymes also says that trends continue towards healthy, clean label foods with fewer additives as consumers are more aware than ever of the health impacts of the foods they consume.
“Saphera, our on-trend sugar- and low-lactose solution, continues to perform well across regions into the beginning of 2018, especially through increased sales in Latin America,” adds Fordyce.
“We continue to see an increase in demand for our food & beverage solutions in emerging markets as producers look to improve quality, reduce cost, and increase variety for their consumers. One of our long-term focus areas is bringing our innovative solutions closer to our emerging markets customers.”
“We are manning up across regions where we have identified opportunities. A great example of this is our newly opened Innovation & Technology Center in Istanbul. This state-of-the-art baking lab will enable us to further partner with customers to develop region-specific baking solutions.”
The company also announced a dividend payout of DKK 4.50/share.
