Novozymes Q2 Profit Meets Forecasts, Boosted by Healthy Foods Enzymes
09 Aug 2013 --- Novozymes has reported that first-half performance as expected, with full-year organic sales growth and EBIT margin outlook maintained. Organic sales growth was 6% (5% DKK, 6% LCY) compared with the first half of 2012. The gross margin improved by 0.7 percentage point. EBIT grew by 7%, and the EBIT margin increased by 0.4 percentage point to 24.6% compared with 1H 2012.
The full-year 2013 outlook is adjusted for the unfavorable development in exchange rates since previous guidance and a positive effect from a lower effective tax rate. Sales growth in DKK is now expected at 5-7%, EBIT growth at 4-6% and net profit growth at 7-9%. Furthermore, net investments excl. acquisitions are expected to be lower at DKK 900-1,000 million and free cash flow before acquisitions is adjusted upwards to around DKK 1,700 million.
Peder Holk Nielsen, President and CEO of Novozymes, comments: “The first six months developed as expected. Sales and earnings picked up during the period, and we're on track to meet our full-year organic sales growth and margin guidance. We're working hard on our priorities of driving innovation in the business and building our growth platforms, and I'm pleased with the progress. In the first half of 2013 we’ve launched new and exciting technology to Bioenergy and Household Care customers, we’ve made a bolt-on acquisition within BioAg and, within biomass conversion, Beta Renewables’ – and the world's – first commercial-scale biomass conversion plant started shipping commercial volumes of ethanol.”
Total sales in the first half of 2013 were DKK 5,870 million, an increase of 5% compared with the first half of 2012. Exchange rates impacted sales negatively, and sales in LCY were up by 6%. Acquisitions made a minor positive contribution to sales growth and, organically, sales grew by 6% – mainly due to a positive development of sales to the Household Care and Agriculture & Feed industries.
Sales to the Household Care industry increased by 6% in DKK and by 7% in LCY compared with the first half of 2012. The sales growth was driven by higher enzyme penetration in laundry detergents as a result of continued high demand to improve wash performance, enable low-temperature washing and replace chemicals. Sales to the emerging markets continued to be a significant growth contributor.
Sales to the Food & Beverages industry increased by 2% in DKK and by 3% in LCY compared with the first half of 2012. Sales for the production of healthy foods and starch conversion were the main growth contributors. Sales to the baking industry improved toward the end of the period, but were still lower compared with the first half of 2012.
Sales to the Agriculture & Feed industries increased by 14% in DKK and by 15% in LCY compared with the same period last year. Organically, sales grew by 13% in the period. Sales to the BioAg industry grew strongly and were the most significant growth driver of the sales area. BioAg sales have developed well across all main regions in the Northern Hemisphere in this year’s season. Sales to the animal feed industry experienced a positive development due to the continued strong performance of the enzyme solution RONOZYME ProAct.
