Novozymes reports Q1 financial results

By Erin Voegele | April 29, 2013

Novozymes has released its interim financial report for the first quarter of 2013, announcing that the company’s financial performance during the first three months of the year was in line with expectations.

Overall, sales grew by 4 percent in Danish krones (4 percent in local currency) compared to the same period of 2012. According to Novozymes, EBIT grew by 4 percent and the EBIT margin was 24.9 percent, which is on par with the first quarter of 2012.

 “Overall, the first quarter was as expected. We're off to a satisfactory start in 2013, and we maintain the full-year outlook,” says Peder Holk Nielsen, president and CEO of Novozymes. “Organic sales growth came in at the lower end of our full-year guidance, and we remain confident that it will pick up during the course of the year.”

Novozymes’ bioenergy enzymes business accounted for 14 percent of sales during the quarter. Bioenergy enzymes sales were down by 8 percent in Danish krones (7 percent in local currency) compared to the same period of 2012.

During a call to discuss the quarterly results, Andy Fordyce, executive vice president of business operations, discussed the impact reduced U.S. ethanol production has had on bioenergy enzyme sales. “The first quarter was tough on many producers as overcapacity persisted and corn was expensive,” he said. “The resulting unsatisfactory margins promoted a significant drop in ethanol production compared to the same period last year. While declining sales are dissatisfying, we have fared far better than the market in relative terms, as our bioenergy enzyme sales declined less than the ethanol production.”

Fordyce attributed the positive news to the recent launch of Novozymes’ Avantec product, which provides better ethanol yields. “Launched late last year, we are getting good traction in the market with the first customers coming onboard and a healthy pipeline of trials with interested customers,” he said. “The Avantec launch shows that innovation and delivering additional value to our customers remains critical to growing our bioenergy business, as it remains a competitive industry with difficult market dynamics for our ethanol customers.”

Regarding the recent purchase of Iogen Bio-Products, Novozymes said the acquisition is expected to contribute approximately 0.5 percent sales growth in 2013. The company announced the acquisition in late January. The agreement provided Novozymes with all commercial rights to Iogen Bio-Products’ existing product portfolio, pipeline, facilities and know-how. In the quarterly release, Novozymes noted the acquisition is expected to have a slightly negative impact on EBIT in 2013, offset by slightly favorable developments in currencies since previous guidance was issued.