Novonesis AS

Earnings Release • Aug 11, 2017

Good first half and momentum in the business

Good first half with 3% organic revenue growth which was better than expected.
Household Care +1%, Food & Beverages +8%, Bioenergy +7%, Agriculture & Feed
-6%, Technical & Pharma -4%. Excluding reorganization costs, the EBIT margin
was 28.5% (1H 2016: ~28%). Maintained 2017 outlook of 2-5% organic sales
growth, around 28% reported EBIT margin, DKK 2.0-2.2bn FCF bef. acq. and net
profit growth of 2-5%.

Peder Holk Nielsen, President & CEO of Novozymes:“Overall, the first half was
good, and better than expected. We had growth in the large segments and
delivered 3% organic sales growth with a strong EBIT margin, excluding
one-offs. We made important advances in our innovation pipeline within grain
milling, vegetable oil and household care opening up new market segments. We
should see growth pick up in the second half of the year, but also acknowledge
the risk of agriculture-related markets changing swiftly. Consequently, we
maintain our full-year expectation for organic growth, while DKK expectations
have been adjusted to reflect weaker currencies.”

Highlights:

-- Organic revenue growth in 1H of 3% (Q2: 2%) and 3% in DKK (Q2: 3%)
-- 3 out of 5 segments grew, with Food & Beverages and Bioenergy performing
very well
-- Agriculture & Feed down due to changed BioAg-sales cycle moving sales from
1H to 2H
-- 1H EBIT growth of 3% with a reported EBIT margin of 27.1% (1H 2016: 27.2%)
-- 1H EBIT margin at 28.5%, excluding reorganization costs (1H 2016: ~28%)
-- Q2 EBIT margin at 28.2%, excluding reorganization costs (Q2 2016: 28.0%)
-- Solid free cash flow generation with higher investments as expected
-- Exciting pipeline development including 4 product launches in Q2 across
segments
-- Increasing emerging markets presence, including new application centers
-- 2-5% organic growth outlook and ~28% EBIT margin for 2017 maintained.
Pick-up in 2H growth still expected, although cautiousness applied for
agriculture-related markets
-- DKK expectations adjusted following weaker currencies, especially the US
dollar

Read the full announcement in PDF