Novozymes Reports Solid Growth for Enzymes for Healthy Foods

Food & Beverages Enzymes sales increased by 5% in DKK and were flat in LCY compared with the first 9 months of 2011. Enzyme sales for the production of healthy foods continued to deliver solid growth 9 months into the year.

25 Oct 2012 --- Novozymes has reported that sales growth in DKK was 6% (2% LCY, 3% organic) compared with the first 9 months of 2011. EBIT grew by 12%, and the EBIT margin increased to 24.6%. The expectations for full-year 2012 EBIT growth, EBIT margin and net profit growth are maintained, as is the expectation for free cash flow. The expectation for organic sales growth is adjusted within the previously announced range to 4%. Sales growth is now expected at 3% in LCY and 7% in DKK.

In the first 9 months of 2012, sales increased by 6% in DKK, 2% in LCY and 3% organically vs. 9M 2011 Gross margin was 57.2%, an increase of 0.8 percentage point compared with 9M 2011 (an increase of 0.4 percentage point adjusting for the acquisition impact in 9M 2011) EBIT was DKK 2,074 million, up 12% on 9M 2011 EBIT margin was 24.6%, an improvement of 1.3 percentage points on 9M 2011 Net profit was DKK 1,523 million, an increase of 4% compared with 9M 2011 Net investments excluding acquisitions were DKK 816 million vs. DKK 796 million in 9M 2011 Free cash flow before acquisitions totaled DKK 1,188 million, against DKK 1,527 million in 9M 2011 ROIC including goodwill was 20.6%, against 22.9% in 9M 2011.

“While sales performed below our full-year expectations, it's good to see the strong earnings development in the first 9 months of 2012,” says Steen Riisgaard, President & CEO. “Enzyme sales to the Household Care and animal feed industries performed well as anticipated, but sales growth in the bioenergy area remains challenged. As a consequence, expectations for full-year sales growth have been adjusted, whereas the outlook for earnings and cash flow is unchanged.”

Total sales in the first 9 months of 2012 were DKK 8,423 million, an increase of 6% compared with the same period of 2011. Exchange rates impacted sales positively, and sales in LCY were up by 2%. Acquisitions and divestments had a minor negative net impact on sales growth, and sales were up by 3% organically.

Enzyme Business sales were DKK 7,617 million, up by 8% compared with the first 9 months of 2011. In LCY, sales were up by 3% compared with the first 9 months of 2011. Sales of Household Care and animal feed enzymes were the strongest growth contributors in the period.

BioBusiness sales were DKK 806 million, a decrease of 4% in DKK. Sales in LCY were down by 9% compared with the first 9 months of 2011. BioBusiness sales were down by 2% organically, adjusting for the acquisition impact of EMD/Merck Crop BioScience and the divestment impact of Novozymes’ Biopharma operations in Sweden.

Household Care Enzymes sales increased by 14% in DKK and by 12% in LCY compared with the first 9 months of 2011. The strong sales growth was driven by a continued increase in penetration of enzymes across detergent tiers to enhance wash performance, enable low-temperature washing and replace traditional chemicals in detergent formulations. Sales of Household Care Enzymes to the emerging markets continued to be a strong contributor to global sales growth.

Food & Beverages Enzymes sales increased by 5% in DKK and were flat in LCY compared with the first 9 months of 2011. Enzyme sales for the production of healthy foods continued to deliver solid growth 9 months into the year. Enzyme sales to the starch and beverage alcohol industries were slightly lower compared with the same period last year. Enzyme sales to the baking industry were roughly flat through the first 9 months of 2012.

Feed & Other Technical Enzymes sales were up by 8% in DKK and by 3% in LCY compared with the first 9 months of 2011. Enzyme sales to the animal feed industry saw strong growth in the period as a result of improved phytase enzyme sales and a continued positive development for RONOZYME ProAct on the Latin American, Asian and European markets. Enzyme sales to the other technical industries including the textile industries were lower for the period.