News
Novozymes forecasts slowing growth
10 Aug 2015Novozymes has announced that sales in the first half of 2015 grew by 5% organically and by 15% in DKK from DKK6,084 million to DKK7,028 million. Food and beverage sales grew 15% from DKK1,599 million to DKK1,846 million and accounted for 26% of total sales. Sales to the baking industry and for the production of […]
Novozymes has announced that sales in the first half of 2015 grew by 5% organically and by 15% in DKK from DKK6,084 million to DKK7,028 million.
Food and beverage sales grew 15% from DKK1,599 million to DKK1,846 million and accounted for 26% of total sales. Sales to the baking industry and for the production of healthy foods were the main contributors to sales growth, the company said, with sales to the baking industry benefiting from increased enzyme demand across product categories and regions. Sales to the starch industry increased moderately due to customer appreciation of recently launched innovations and continued stabilisation of the Chinese starch market.
EBIT grew by 12%, and the EBIT margin was 27.2%. Adjusting for the one-time impact from The BioAg Alliance in Q1 2014, EBIT grew by ~20%, and the EBIT margin expanded by ~1 percentage point compared with 1H 2014. The EBIT margin improvement was mainly due to currencies and operational efficiencies. Net profit grew by 8%, and free cash flow before acquisitions came in at DKK 1,616 million.
Looking forward, Novozymes said that the first half of 2015 has provided a more challenging operating environment than expected, with customers, especially in Household Care and Bioenergy, changing course to address volatile currency, grain and energy markets, as well as uncertainty in emerging markets.
The volatility and macroeconomic uncertainty seem to be persisting, the company said, which has increased the uncertainty concerning sales growth for rest of year. Novozymes noted that it is actively implementing innovation and commercial measures to address developments and accelerate growth, but expects the impact to be felt throughout the year, and believes that its well-diversified business means that a positive development in agriculture and food markets will offset some of the weakness in Household Care and Bioenergy, but not fully. In 2015, it now expects organic sales growth of 4-7%, compared with 7-9% at previous guidance. Based on exchange rates at August 5, 2015, sales growth in DKK is now expected to be 13-16%, compared with 16-18% at previous guidance.
Novozymes expects a positive contribution to sales growth from all five sales areas. In relative terms, Agriculture & Feed is expected to be the most significant growth contributor. Food & Beverages sales growth is expected to be driven by a continuation of the positive trends and developments seen in baking and a stabilisation of the Chinese starch conversion market. Healthy concepts are also expected to contribute to sales growth.