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Q1 2020

Strong first quarter results across key financial parameters; agile organization enables Novozymes to meet customer demand despite COVID-19 disruptions. 2020 outlook remains suspended.

Organic sales growth of 10% in Q1 2020. Household Care +11%, Food & Beverages +11%, Bioenergy +11%, Agriculture & Feed +8%, Tech. & Pharma -10%. EBIT margin 28.9%. Free cash flow before acquisitions DKK 0.8 billion.

Ester Baiget, President & CEO: “Starting the year at 10% organic sales growth with solid contribution from new innovation and with strong financials, we are showcasing our strengths and ability to deliver to our customers. It’s rewarding to see that we can capture growth opportunities as they arise, even in these difficult times when supply chains are under stress and consum er access is difficult. Uncertainty continues to prevail, especially around the U . S . ethanol production as gasoline demand declines. The 2020 outlook remains suspended but despite the uncertain times we’re making solid progress in the implementation of our strategy, Better business with biology. I am very impressed by the hard and diligent work across the organization allowing us to drive sustainable and profitable growth, even during these difficult times”.

Highlights Q1 2020:

  • Organic sales growth of 10% and 9% in reported DKK. New innovation performing very well
  • Solid growth in Agriculture & Feed and Bioenergy; Household Care and Food & Beverages particularly strong and above expectations; Technical & Pharma declined
  • Growth in Household Care and Food & Beverages supported by stockpiling in developed markets
  • Solid Bioenergy growth across key geographies
  • Emerging markets grew organically by a strong 13% and developed markets by a solid 8%
  • Two new product launches, including the recent launch of Taegro® in BioAg for biocontrol
  • EBIT margin solid at 28.9% driven by stronger gross margin and operational cost leverage
  • Free cash flow before acquisitions strong at DKK 0.8 billion; net investments at DKK 0.1 billion
  • Strong balance sheet allows for share buyback and dividend policy commitment

  • Q4 2019 table

2020 outlook: As communicated on April 7, the Novozymes 2020 outlook has been suspended. Based on current insight and the assumption that Novozymes’ and its customers’ logistics will continue to function relatively normally, full-year sales growth indications for Household Care and Food & Beverages remain largely intact, but with higher volatility. Social distancing and ‘stay-at-home’ orders following efforts to contain the COVID-19 virus lowers gasoline and ethanol demand, especially in the US, and creates uncertainty about full-year developments, mainly in our Bioenergy business. While actively managing costs, Novozymes remains committed to investing for long-term growth opportunities, including headcount investments that were part of the January 23 outlook, but which have been postponed due to the COVID-19 situation. The stock buyback program totaling up to DKK 1.5 billion will continue as planned and the company’s dividend policy and its capital structure policy are unchanged.