Novozymes reports that sales in the first quarter of 2015 grew by 8 percent organically and by 18 percent in Danish krone (DKK) compared with first quarter 2014. Earnings before interest and tax (EBIT) grew by 6 percent, and the EBIT margin was 27.4 percent.
Adjusting for the one-time impact from The BioAg Alliance in first quarter 2014, EBIT grew by 20 percent, and the EBIT margin expanded by 1 percentage point compared with first quarter 2014. According to company leadership, the EBIT margin expansion was mainly due to currencies. Net profit grew by 2 percent, and free cash flow before acquisitions came in at DKK 610 million.
“First-quarter sales and earnings were good and, overall, in line with our expectations at 8 percent organic sales growth and an EBIT margin above 27 percent”, says Peder Holk Nielsen, Novozymes CEO. “We see good developments within the agriculture and food markets but also detect a growing uncertainty in household care and bioenergy, as customers navigate volatile currency, grain and energy markets. We’re positive about the year as a whole and, due to the appreciation of the U.S. dollar, we increase our outlook.”
The 2015 outlook is adjusted for currencies only. Organic sales growth is expected at 7 percent to 9 percent. Currencies are expected to provide further tailwind, and sales in DKK are now expected to increase 16 percent to 18 percent, compared with 13 percent to 15 percent at previous guidance. The expectation for EBIT growth is increased by 3 percentage points to 15 percent to 17 percent, and the EBIT margin is adjusted to 27 percent. The expectation for net profit growth is increased to 11 percent to 13 percent, up from 10 percent to 12 percent. Expectations for net investments, cash flow and return on invest capital are unchanged.
