Novozymes, the world’s largest industrial biotechnology company announced its results for the nine months of 2017. Solid results with 4% organic revenue growth (Q3: +8%): Household Care +2%, Food & Beverages +9%, Bioenergy +10%, Agriculture & Feed -2%, Technical & Pharma -3%. Reported EBIT margin at 27.9%. FCF bef. acq. DKK 2.1 billion.
Peder Holk Nielsen, President & CEO of Novozymes mentioned, “We grew revenue by 8% organically in the third quarter and by a satisfying 4% in the first nine months. This was better than expected. 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.”
Highlights:
- Organic revenue growth in first 9M y/y of 4% (Q3: 8%) and 4% in DKK (Q3: 6%)
- 3 out of 5 areas grew; Food & Beverages and Bioenergy continue to perform well
- Agriculture & Feed improved as BioAg sales cycle moves from 1H to 2H
- Emerging markets 4%, developed markets 4% (9M y/y organically)
- 9M EBIT growth of 5% with a reported EBIT margin of 27.9% (9M 2016: 27.7%)
- Q3 EBIT margin at 29.6% (Q3 2016: 28.7%)
- Free cash flow bef. acquisitions solid at DKK 2.1 billion; higher investments as expected
- Named the “World’s 2nd best science employer” in Science Magazine
- Still some uncertainty regarding agriculture-related markets in Q4
- Full-year outlook adjusted: organic revenue growth 3-5% (2-5%), DKK revenue growth 2-4% (1-4%), EBIT growth 2-4% (1-4%). EBIT margin maintained at ~28%. FCF bef. acq. at DKK 2.1-2.3 billion (DKK 2.0-2.2 billion). Net profit growth 2-5% (2-5%), incl. a DKK 60 million write-down on net financials (DKK 47 million post-tax) in Q3
The entire earnings report can be downloaded at novozymes.com.
