Novozymes reports 5% decline in Q3 bioenergy sales

By Erin Voegele | October 21, 2020

Novozymes released third quarter financial results on Oct. 21, reporting overall sales declined 3 percent organically. The company’s bioenergy segment reported a 5 percent decline in organic sales for the quarter.

 “Our performance in the first nine months was satisfactory, especially considering the COVID-19 implications,” said Ester Baiget, president and CEO of Novozymes. “Results are driven by our versatile portfolio and the organization’s ability to rapidly adapt to a changing environment. Combining this with an increased customer focus, also in the innovation cycle, I’m confident that we’re setting the scene for a stronger future performance. Looking at 2020 we continue to see considerable COVID-19 related uncertainty and consequently we maintain the range for organic sales growth at -2 percent to +2 percent. However, we are increasingly gaining confidence that the midpoint of the range is the most likely outcome. We raise the EBIT margin outlook to 26-27 percent and FCF before acquisitions to DKK 2.6- 3.0 billion.”

Novozymes’ bioenergy sales declined by 11 percent during the first nine months of 2020 when compared to the same period of last year. Growth outside the U.S. was more than offset by the significant ethanol production decline in the U.S. market. In the U.S., the company said the decline was roughly in line with the year-on-year development in U.S. ethanol production rates. In its Q3 report, Novozymes explained that COVID-19 related restrictions led to a sharp decline in U.S. gasoline demand, which resulted in reduced demand and production of ethanol. Following a severe decline during the second quarter, ethanol production began to recover during the third quarter.

Third quarter bioenergy sales were down 5 percent organically when compared to the same period of 2019. Novozymes said both U.S. ethanol production and the company’s bioenergy sales declined less in the third quarter than in the second quarter. The company also noted sales outside the U.S. grew during the third quarter of 2020.

Bioenergy accounted for 17 percent of Novozymes sales during the third quarter. Household care, food and beverage, agriculture and feed and technical and pharma accounted for 35 percent, 31 percent, 13 percent and 4 percent, respectively.

Household care sales fell by 1 percent during the quarter, while food and beverage sales increased by 1 percent, agriculture and feed sales fell by 19 percent and technical and pharma sales grew by 2 percent.