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Q3 2018

Satisfactory first nine months; 5% organic sales growth in Q3

Organic sales growth of +4% (Q3: +5%) in the first nine months: Bioenergy +14%, Agriculture & Feed +5%, Food & Beverages +4%, Household Care 0%, Technical & Pharma -7%. EBIT margin 28.2%. Net profit growth +3%. FCF before acq. DKK 1,980 million. Full-year 2018 outlook; Net profit growth increased to 1-3%; Organic sales growth more likely to end toward the lower part of the 4-6% range, despite challenging markets in the Middle East.

“We delivered solid earnings and organic revenue growth of 5% in the third quarter and 4% after the first nine months. This is overall satisfactory, and we increase the outlook for net profit growth. Despite recent challenging markets in the Middle-East, we maintain our 4-6% organic revenue growth guidance, albeit with the likelihood that we will close the year toward the lower part of the range. On our innovation efforts, we further demonstrate our strong pipeline and ability to commercialize game-changing solutions with the third-quarter launch of Balancius™ for animal feed.”

- Peder Holk Nielsen, President & CEO of Novozymes

Highlights 9M 2018:

  • Organic sales growth of +4% (Q3: +5%) and -2% in DKK. USD/DKK -7% in 9M 2018 y/y
  • Growth in Food & Beverages and Agriculture & Feed; Bioenergy particularly strong and Household Care flat
  • +5% organic sales growth in emerging markets; developed markets +4%
  • Good traction for recent product launches. Freshness & hygiene platform in Household Care well received and developing according to plan. Launch of Balancius™ for improved chicken gut health and Acceleron® B-360 ST for higher corn yield and more sustainable agriculture
  • EBIT margin of 28.2% (Q3: 28.5%) including productivity improvements, currency headwind, increasing input costs and lower deferred income. 9M 2017: 27.9% (Q3: 29.6%)
  • Net profit growth of +3% (Q3: -1%) from lower net financial cost and lower effective tax rate
  • Free cash flow before acquisitions DKK 1,980 million; net investments DKK 887 million

Full-year 2018 outlook: Organic sales growth of 4-6% maintained. Toward lower part of the range more likely, despite challenging markets in the Middle East. Net profit growth outlook increased to 1-3% (~0%).