In Denmark, Novozymes announced that sales grew by 5% organically and by 15% in DKK compared with 1H 2014. EBIT grew by 12%, and the EBIT margin was 27.2%. Adjusting for the one-time impact from The BioAg Alliance in Q1 2014, EBIT grew by ~20%, and the EBIT margin expanded by ~1 percentage point compared with 1H 2014. The EBIT margin improvement was mainly due to currencies and operational efficiencies.
Net profit grew by 8%, and free cash flow before acquisitions came in at DKK 1,616 million. The 2015 outlook for organic sales growth is revised to 4-7% (7-9% at previous guidance). Sales in DKK are now expected to increase by 13-16% (16-18% at previous guidance). The expectation for EBIT margin is increased to 27-28% (~27% at previous guidance). The expectations for EBIT growth, net profit growth, cash flow and ROIC are unchanged.
Peder Holk Nielsen, President and CEO of Novozymes, comments:
“First-half earnings have been very satisfactory, but we need to increase growth. Some customers in Household Care and Bioenergy are challenged by volatile markets, creating short-term headwinds for us until we have fully adapted. Good developments in other areas such as Agriculture & Feed and Food & Beverages balance things out but don’t make up for the headwinds. We therefore reduce our sales growth expectations for the full year. We maintain our full-year profit outlook, as we see improved productivity and operational efficiencies leading to a higher EBIT margin.”