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Q2 2021

Strong Q2 with 9% organic sales growth. Full-year outlook for organic sales and EBIT margin narrowed to high ends of ranges; ROIC incl. goodwill raised. 

Organic sales growth of 6% (Q2: 9%) in 1H 2021: Household Care -2% (Q2: -6%); Food, Beverages & Human Health 14% (Q2: 18%); Bioenergy 16% (Q2: 54%); Grain & Tech Processing 17% (Q2: 18%); Agriculture, Animal Health & Nutrition -9% (Q2: -19%). EBIT margin at 28.6% (Q2: 27.7%). ROIC incl. goodwill at 22.2% (Q2: 20.3%). FCF bef. acq. at DKK 1.8 billion (Q2: DKK 1.1 billion).

Ester Baiget, President & CEO: "We delivered a very satisfactory set of results for the first half of 2021. Although uncertainty related to the pandemic remains and some destocking is still expected in the second half, we narrow the outlook range for organic sales growth upwards to 4% to 6% and for the EBIT margin to ~26%. We continue to execute on our strategic direction and today, we reached yet another significant milestone by advancing the strategic opportunity area of Advanced Protein Solutions. We look forward to the upcoming capital markets day in September where we will follow up on our progress and outline strategic priorities to continue driving profitable and sustainable growth.”

In summary:

  • Strong growth in Food, Beverages & Human Health across all subareas. Household Care declined as expected against a high comparator. The Freshness platform and emerging markets contributed positively
  • Strong growth in Bioenergy mainly due to the recovery of the U.S. ethanol production and capacity expansion in Latin America. Strong growth in Grain & Tech Processing led by strong demand for solutions in grain and gradual recovery in textile. Decline in Agriculture, Animal Health & Nutrition mainly due to difficult comparator, BioAg one-off and an expected decline in animal nutrition
  • Strong organic sales growth of 17% in emerging markets; developed markets flat
  • Six products launched in the first half, including second quarter launches of yeast and fiber solutions in biofuels and a probiotic solution with immune benefits in human health
  • Strong EBIT margin at 28.6% despite higher operating costs, currency headwinds and effects of the two recent acquisitions. Strong performance mainly driven by gross margin expansion from operational leverage, supported by timing and one-offs. Free cash flow before acquisitions solid at DKK 1.8 billion and ROIC incl. goodwill was strong at 22.2%
  • Solid balance sheet with NIBD/EBITDA leverage of 0.9x
  • Novozymes reach a significant milestone by advancing the strategic opportunity area of Advanced Protein Solutions (ann. no. 40, Aug. 12, 2021) with no financial implications for 2021 other than DKK ~300m capex
  • Capital markets day to be held virtually on September 28, 2021

 

2021 outlook: Organic sales growth of 4% to 6%, with sales in reported DKK slightly less than 1p.p. lower. EBIT margin at ~26%, net supported by one-offs but including negative y/y impacts from currency, as well as M&A-related effects of around 1p.p. each. ROIC incl. goodwill between 19% to 20%. FCF bef. acq. at DKK 2.5 to 2.9bn now including DKK ~300m investment in the new production line in Blair, Nebraska.