In This Article:
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Organic Sales Growth: 11% in Q1 2025.
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Volume Growth: 10% in Q1 2025.
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Adjusted EBITDA Margin: 38.3%, an increase of 3.1 percentage points year-on-year.
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Adjusted Gross Margin: 58.9%, an improvement of 330 basis points year-on-year.
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Diluted Adjusted Earnings Per Share: EUR 0.42, a 27% increase year-on-year.
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Free Cash Flow Before Acquisitions: EUR 68.1 million in Q1 2025.
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Food & Health Biosolutions Organic Sales Growth: 12% in Q1 2025.
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Food & Beverages Organic Sales Growth: 11% in Q1 2025.
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Human Health Organic Sales Growth: 13% in Q1 2025.
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Planetary Health Biosolutions Organic Sales Growth: 11% in Q1 2025.
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Household Care Organic Sales Growth: 12% in Q1 2025.
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Agriculture, Energy & Tech Organic Sales Growth: 10% in Q1 2025.
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Operating Cash Flow: EUR 106.4 million in Q1 2025.
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2025 Full Year Organic Sales Growth Outlook: 5% to 8%.
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2025 Full Year Adjusted EBITDA Margin Outlook: 37% to 38%.
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Novonesis (Novozymes) B (NVZMF) reported a strong 11% organic sales growth in Q1 2025, driven by a 10% volume increase and 1% pricing contribution.
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The company achieved a 38.3% adjusted EBITDA margin, an increase of 3.1 percentage points compared to the previous year.
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Emerging markets showed robust performance with a 15% growth, while developed markets grew by 9%.
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Six new biosolutions were launched in Q1, with further acceleration of launches expected in the coming quarters.
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The acquisition of dsm-firmenich is expected to unlock further value in the core business, particularly in animal biosolutions, contributing to revenue growth and earnings accretion.
Negative Points
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The exit from Russia and Belarus is expected to negatively impact full-year organic sales growth by around 1 percentage point.
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Currency headwinds are anticipated to affect the adjusted EBITDA margin, although the company maintains its guidance of 37% to 38%.
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The US market for Household Care is sensitive to down trading, and there is a cautious outlook for the full year due to potential changes in consumer order patterns.
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The EIA has lowered its forecast for US ethanol production from 1% growth to flat, which could impact the Agriculture, Energy & Tech division.
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Operating cash flow was affected by increased net working capital, mainly from lower trade payables and higher receivables, resulting in a lower free cash flow compared to the previous year.
Q & A Highlights
Q: Can you elaborate on the strong performance in Household Care and the impact of emerging market penetration? A: Ester Baiget, CEO, explained that the strong start to the year was anticipated, with no changes in customer order patterns. Emerging markets have shown strong growth, and penetration is expected to be sustainable throughout the year. Tina Sejersgard Fano, EVP of Planetary Health Biosolutions, added that the main growth driver is penetration, particularly in emerging markets, and the outlook includes some expected softness in the second half of the year.