arrow down

Q2 2022

Full-year organic sales growth outlook narrowed upwards to 6-8% after 10% growth in both 1H and in Q2

Ester Baiget, President & CEO: "After a strong first half with 10% organic sales growth, and despite the volatile market environment, we narrow our full-year organic sales growth outlook upwards to 6-8%. Our well-diversified portfolio, end-market exposure, and operational excellence are key enablers to deliver value generating biotech-solutions to customers. We continue to invest in the business in line with our strategic direction, and we expect solid margins and returns despite the significant pressure from input and logistic costs."

Sales and financial performance:

  • Sales growth in DKK at 18% (10% organic, 7% currency, 1% M&A). Q2 DKK sales growth at 20% (10% organic, 9% currency, 1% M&A).
  • Double-digit organic sales growth in four out of five business areas:
    • Bioenergy 23% (Q2: 19%): Strong growth across regions led by North & South America with high demand for innovation and value-enhancing solutions as well as for biodiesel production.
    • Agriculture, Animal Health & Nutrition 14% (Q2: 17%): Strong performance with double-digit growth in both Animal Health & Nutrition and Agriculture. 
    • Grain & Tech Processing 13% (Q2: 19%): Strong performance from innovation and yield solutions.
    • Food, Beverages & Human Health 10% (Q2: 3%): Performance led by double-digit growth in Food and Beverages.
    • Household Care 0% (Q2: 4%): Performance in line with expectations, including a negative impact from the war in Ukraine. 
  • Developed markets organic sales growth 10% (Q2: 9%); Emerging markets 10% (Q2:12%).
  • EBIT margin at 26.0%, with Q2 roughly on par with Q1. Adjusted for provisions, the EBIT margin was closer to 27% both for the first half-year and for Q2. Lower year-on-year gross margin in line with expectations from higher input and logistics costs. Slight positive impact from price increases in 1H expected to become more visible in the second half of the year.
  • ROIC incl. goodwill at 17.5%, lower year-on-year and mainly due to acquisitions and growth-investments. 
  • FCF before acquisitions at DKK 1.0 billion including higher CAPEX for the investment in the Advanced Protein Solutions production line in Blair, Nebraska, as well as higher working capital.
  • Solid balance sheet with a net-debt/EBITDA ratio of 1.1x


Key events:

  • Six product launches in the first half of 2022, including four in the second quarter. 
  • New partnerships in Agriculture focusing on biocontrol and the exploration of post-harvest solutions.
  • Participation in World Economic Forum annual meeting to discuss the potential of bio-solutions as an enabler for a more sustainable world. 
  • Stock buyback program of DKK 500 million completed on June 27, 2022. 
  • As events after the interim period – an agreement was signed to invest intellectual property in 21st.BIO, expected to be completed in the third quarter of 2022. The transaction is expected to generate a non-recurring accounting gain under other operating income of DKK ~200 million and is a non-cash transaction. Additionally, Novozymes’ minority ownership in Albumedix will be divested leading to a financial gain of DKK ~250m, and the transaction is expected to close during the second half of the year.

2022 outlook:

  • A strong first half and good momentum across the business leading to a narrowed organic sales growth outlook from 4-8% to now 6-8%. Sales reported in Danish kroner expected to be around 8 percentage points higher than the organic sales growth rate.
  • EBIT margin outlook raised to 26-27% following the completion of the non-recurring accounting gain from investing intellectual property in 21st.BIO expected in the third quarter (no cash impact).
  • Outlook for ROIC incl. goodwill increased following the accounting gain, while free cash flow before acquisitions is maintained.