Interim report for the first 3 months of 2014

Strong Q1 performance; full-year profit outlook increased

The first quarter of 2014 was strong from a sales growth, earnings and cash flow perspective. As expected, sales came in strong in the first quarter and, organically, sales increased by 11% compared with Q1 2013 (7% DKK, 10% LCY). EBIT grew by 30%, and the EBIT margin was 30.4%, driven by a one-time positive impact from The BioAg Alliance of net  around 4 percentage point and a better than expected development in underlying earnings. As a result, expectations for full-year EBIT growth, EBIT margin, net profit growth, ROIC and free cash flow are increased, despite the unfavorable currency development. Expectations for full-year organic and LCY sales growth are maintained, and expectations for sales growth in DKK are adjusted for currency within previous range.
Peder Holk Nielsen, President and CEO of Novozymes, comments:

“We’ve delivered a strong first quarter, and we’re increasing the outlook for full-year EBIT growth. Double-digit organic sales growth, good underlying earnings performance and completion of The BioAg Alliance agreement mark a good start to 2014. We had expected sales to come in strongly in the first quarter, especially in Bioenergy and Household Care, and I’m pleased to see that we continue to add more value for our customers and grow our business in these two important markets. Reported earnings are extraordinarily high due to the impact from The BioAg Alliance agreement. Underlying productivity has improved compared with last year, and this drives our increased expectations for EBIT growth and margin for the full year. Regarding The BioAg Alliance, it feels great to have kicked off one of Novozymes' most significant projects for the years ahead. We’re excited to get started and are focusing resources and efforts on ensuring success in BioAg."

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