Novozymes delivered 9% organic sales growth in the first nine months of 2022 and 6% organic sales growth in the third quarter. As announced on October 7, the full-year organic sales growth outlook was raised from 6-8 % to now 8-9 % following a strong performance in the first nine months of the year, and expectedly, continued strong Q4 momentum.
COPENHAGEN, Denmark – November 3, 2022. In the first nine months of the 2022 financial year, Novozymes delivers 9% organic sales growth, an EBIT-margin of 27.2%, and ROIC including goodwill of 17.8%. A strong start to Q4 confirms the upgraded guidance from October 7.
“Nine months into the year and with a strong start to Q4, we are well on track towards delivering historically strong results. This is a clear testament to our positioning and the strength and stability of our broad-based portfolio and diversified end market exposure to more than 30 different industries. Our continued focus is driving our strategy “Unlocking Growth – Powered by Biotech” and we are on track to deliver up to 9% organic sales growth for the full year and to deliver on our ambition to double revenue by 2030,” says Ester Baiget, President & CEO and continues:
“We continue to deliver strong performance and we experience increased demand for our solutions making it possible to produce more with less. Biotechnology holds one of the most promising keys – it’s changing the proteins we eat, it’s replacing fossil-based ingredients in the detergents we use, it’s improving the transportation fuels we rely on, and it’s optimizing the way we capture carbon – just to name a few. Together with our customers we will continue to create significant results and drive the world forward towards a healthier planet.”
In the third quarter, Novozymes launched seven new products and in the first nine months of 2022, a total of thirteen products was launched. The company’s product launches in 2022 have been broad-based across business areas.
Business area results
For the first nine months of the year, organic performance by business area were 0% (-1% in Q3) in Household Care, 8% (2% in Q3) in Food, Beverages & Human Health, 26% (32% in Q3) in Bioenergy, 11% (7% in Q3) in Grain & Tech Processing, 7% (-7% in Q3) in Agriculture, Animal Health & Nutrition.
Sales growth in the third quarter was particularly strong and exceeded expectations in Bioenergy and Grain & Tech Processing. While the third quarter organic sales growth was relatively soft in both Food, Beverages & Human Health and in Agriculture, Animal Health & Nutrition, it was mainly due to the timing of sales between the third and the fourth quarters. In Household Care, third-quarter sales declined 1% organically which was in line with expectations, as developed markets grew, driven by North America, while emerging markets were soft primarily due to the negative impact from the war in Ukraine.
For the first nine months of the year, organic growth rates by geography were 5% (1% in Q3) in Europe, Middle East & Africa, 12% (12% in Q3) in North America, 8% (5% in Q3) in Asia Pacific, and 15% (8% in Q3) in Latin America.
Sales in developed markets grew 10% (9% in Q3) organically and emerging markets grew 7% (1% in Q3). Growth in developed markets was mainly driven by strong performance in Bioenergy, supported by double-digit growth in Agriculture, Animal Health & Nutrition and Grain & Tech Processing. Growth in emerging markets was broad-based and primarily driven by Bioenergy, Food, Beverages & Human Health, and Grain & Tech Processing, all growing at or close to double digits.
Financial outlook for 2022
Based on the strong nine-month performance and strong start to the fourth quarter, Novozymes confirms the full-year organic sales growth outlook of 8-9%. This includes a negative full-year impact of around 1 percentage point from the war in Ukraine, mainly impacting Household Care.
For 2022, Novozymes expects a solid EBIT margin of 26% to 27% (2021: 26.8%), including the non-cash accounting gain related to the 21st.BIO recognized in the third quarter. Compared to 2021, the EBIT margin will benefit from sales growth and productivity improvements, targeted price increases, as well as a net positive currency effect. Higher input, energy and logistics costs and continued investments in the business are expected to have a negative year-on-year impact. The impact on the cost of goods sold is partially offset by productivity improvements, operational leverage, and a growing impact from price increases, increasingly so in the fourth quarter, which also includes the expectation of an improved product mix.
CASE ON BIOENERGY
Novozymes is the world leader in biological solutions. Together with customers, partners, and the global community, we improve industrial performance while preserving the planet's resources and helping build better lives. As the world's largest provider of enzyme and microbial technologies, our bioinnovation enables higher agricultural yields, low-temperature washing, energy-efficient production, renewable fuel, and many other benefits that we rely on today and in the future. We call it Rethink Tomorrow. www.novozymes.com
NASDAQ OMX: NZYM-B • 6,500 employees • DKK 15 billion turnover • 30+ industries • 700+ products
Tobias Cornelius Björklund