Interim report for the first 9 months of 2016
Net profit growth of 5%; 2016 organic sales guidance around 2%; earnings outlook adjusted within range
In the first nine months of 2016, sales grew by 1% organically and declined by 1% in DKK compared with the first nine months of 2015. Sales outside North America increased by 5% organically, while sales in North America declined by 6% organically due to Bioenergy, Food & Beverages, and BioAg. As communicated in the half-year report, Novozymes expected growth in the second half to be skewed toward the end of the year. Sales in Q3 were lower than expected, declining by 3% organically, but Novozymes still expects moderate organic growth in the final quarter of the year.
The EBIT margin was on par, and EBIT declined by 1% compared with the first nine months of 2015. Adjusting for the restructuring costs in Q1, the EBIT margin would have expanded to above 28% and EBIT growth to above 1% compared with the first nine months of 2015.
The outlook for full-year organic sales growth is adjusted to around 2%, from previously 2-4%. The adjustment reflects the sales performance in the first nine months, and continued challenges in Household Care, Food & Beverages and agricultural markets. The outlook for sales growth in DKK is reduced to 0-1%, from previously 1-3%, due to the adjusted organic sales guidance. The outlooks for EBIT growth and net profit growth are also adjusted within the previously guided range.
Peder Holk Nielsen, President & CEO of Novozymes, comments: