Novozymes delivers historically strong full-year results
Novozymes is delivering strong growth and earnings in a volatile market environment with 9% organic sales growth in 2022. This marks the highest organic sales growth in more than a decade, and Novozymes is confident about the 2023 outlook of 4-7%.
COPENHAGEN, Denmark – January 26, 2023. In the 2022 financial year, Novozymes delivers 9% organic sales growth – 11% organic sales growth in the fourth quarter alone – an EBIT-margin before special items of 26.4%, and ROIC including goodwill before special items* of 17.9%. Novozymes presents a solid organic growth outlook of 4-7% for 2023.
“Novozymes delivers historically strong growth in a volatile market environment by leveraging the strength of our well-diversified portfolio, unique production capabilities, and broad market presence. We know that biotech holds the key to addressing some of the world’s biggest challenges and our growth in 2022 confirms that our biosolutions are more relevant than ever. We will continue the strong momentum from 2022 in 2023, says Ester Baiget, President & CEO, and continues:
“We expect to unlock additional growth opportunities and accelerate our strategic ambition by the proposed combination of Novozymes and Chr. Hansen to create a leading global biosolutions partner. I am very excited about the potential of bringing together these two high performing, complementary companies to unleash the full potential of biosolutions and generate significant value for our customers, employees, shareholders, and society at large.”
In the 2022 financial year, Novozymes invested ~11% of total revenue in research and development and launched 26 biosolutions to meet customer needs.
Biotech for a healthier planet
This year, Novozymes concludes on a range of non-financial milestones and targets along with setting new targets for 2025. Novozymes reduced the CO2 emissions from own operations by 63%, from a 2018 baseline, and as one of the first companies in the world, Novozymes had its net-zero target validated by the Science Based Targets initiative.
“As a global leader, we are committed to help build a net-zero future. We have already reduced our emissions by 63% and we are extremely proud to be among the first companies in the world to have our net-zero target across scopes 1, 2 and 3 validated by the Science Based Targets initiative showing that the path to net-zero is possible,” says Ester Baiget, President & CEO, and continues:
“Sustainability is in our DNA, and Novozymes succeeds by combining our financial and non-financial performance. In 2022, more than 90% of our revenue contributed to a healthier planet by accelerating towards a climate-neutral society, transforming food systems, and enabling healthier lives, and we will continue to expand the reach of our biosolutions to enable a better world.”
Double-digit growth in three out of five business areas
Novozymes performed within guidance in all five business areas as well as delivered double-digit growth across three out of five business areas.
For the full year, organic performance by business area were 1% in Household Care, 10% in Food, Beverages & Human Health, 25% in Bioenergy, 10% in Grain & Tech Processing, 8% in Agriculture, Animal Health & Nutrition.
Strong growth across both developed and emerging markets
Novozymes sales in 2022 grew 9% organically compared to the previous year and both developed and emerging markets grew at 9%.
For 2022, organic growth rates by geography were 6% in Europe, Middle East & Africa, 11% in North America, 10% in Asia Pacific, and 16% in Latin America.
Financial outlook for 2023
Novozymes expects a solid organic sales growth at 4-7% driven by pricing as well as volume growth. Pricing is expected to contribute more than half of the organic sales growth. Modest growth expected in Q1 as the comparator was positively impacted by the timing of sales, particularly in Food, Beverages & Human Health.
EBIT margin before special items* is expected at 25-26%. ROIC incl. goodwill before special items* at 16-17%.
12M 2022 at a glance
Novozymes at a glance
Novozymes is the world leader in biosolutions. We use the power of biotech to help our customers grow their businesses while preserving the planet’s resources and enabling better lives.
Our commitments to a healthy planet
Our biosolutions are already having a positive impact on the world, and below we disclose revenue share of each of our commitments to a healthy planet:
There is a biosolution for (almost) everything
We live in a dynamic and rapidly changing world. There are many challenges to solve – feeding growing populations,
mitigating climate change and getting more out of our shared resources. Biotechnology can provide powerful biosolutions
to address these issues.
Biosolutions at a glance
Biosolutions are part of the answer
to some of the world’s biggest challenges
Biosolutions help industries and societies reach a net-zero world, in which industries and communities make the most of raw materials and resources, while making green products more accessible and affordable for consumers. Biosolutions can reduce the use of fossil-based resources and waste, enable food systems to produce more food with less, or enable better health around the world. Towards 2030, a full utilization of selected biosolutions can enable a reduction of 8% of global CO2e-emissions equivalent to 4.3 billion tons CO2e2.
Examples of how biosolutions can make a difference:
- In 2050, the world will have approx. 3 billion cars on the roads. Less than 20% of them will be electric. To reduce emissions in the transport sector, we need sustainable fuel sources. Bioethanol leads to 40% lower CO2 emissions compared with fossil-based petrol. Second-generation biodiesel gives new life to waste oils and emits 60% less GHG than traditional diesel.
- Carbon capture can seize more than 90% of CO2 emissions from power plants and industrial facilities and is required to reach the Paris Agreement. Enzymes enable a more clean and cost-efficient process for capturing carbon.
- Fermented proteins require 90% less land and water and result in 90% less CO2 emissions compared to animal proteins. If we replaced 10% of global animal protein with alternative protein, we would save 50% of the EU’s arable land.
- Biological inoculants (biofertilizers) can replace chemical fertilizers and make plants more resilient to climate change while reducing the carbon footprint of crops by 15%3.
- In plastics recycling, enzymes can help break down PET to its original building blocks to create infinite loops of plastics recycling. With the world currently producing 400 million tons of plastic each year, the potential for recycling is significant.
We estimate the current addressable market for biosolutions to be around EUR 15 billion and growing4. According to the World Economic Forum, the economic impact from biosolutions is expected to grow by a factor of three by 2040, driven by growing needs and demands from growing populations around the world5.
- Study conducted by WiFor on behalf of EuropaBio, December 2020.
- Copenhagen Economics: "The potentials of biosolutions", 2022.
- JumpStart LCA: Biostimulants reduce the carbon footprint of one ton of corn by as much as 15%. Applied to all cornfields in America, that could add up to CO2e savings of almost four million metric tons.
- Novozymes internal estimates (CMD 2021 market analysis adjusted).
- WEF 2018; WEF 2022; Novozymes internal estimates.
Novozymes is the market leader in biosolutions
At Novozymes, we use the power of biotech to create biosolutions to help our customers grow their businesses while enabling a healthier planet. In 2022, 90% of our revenue contributed to accelerating a climate-neutral society, transforming food systems and/or enabling healthier lives, and we continue to expand the reach of our biosolutions.
What is a biosolution?
Biosolutions are composed of biological products that are anchored in biotech, i.e. they utilize living organisms, including enzymes, microorganisms, bacteria cultures, pheromones, etc. for concrete applications and products that are used in other industries’ manufacturing processes and as end products to enable sustainable transformations such as emission reductions6.
Biosolutions can be used to increase the yield of agriculture, reduce land use, provide alternative sources of protein for food, lower demand for plastic and pesticides, prevent food waste, and improve biodiversity, food supply, and food security.
Figure 1: Biosolutions usages in different economic sectors
|Bio plastics||Bio controls, incl. bio fertilizers||Bio fuels|
|Fermentation-based solutions, food cultures, ingredients in the food industry||Fermentation of feedback||Fermentation-based jet and marine fuels|
|Alternative proteins for food||Biological plant protections|
|Probiotics for human consumption||Anaerobic digestion of slurry|
|Enzymes||Probiotics for animals|
|Bio fuels||Alternative proteins for fodder|
|Enzyme-based CCS and CCU||Microbial milk proteins|
Figure 1 - Note: Examples of biosolutions marked in grey are solutions that are currently being developed and may be fully matured and scaled after 2030. Biofuels for transport consist of different product generations. Source: Copenhagen Economics
6. Copenhagen Economics: "The potentials of biosolutions", 2022
Novozymes is the world leader in biological solutions. Together with customers, partners, and the global community, we improve industrial performance while preserving the planet's resources and helping build better lives. As the world's largest provider of enzyme and microbial technologies, our bioinnovation enables higher agricultural yields, low-temperature washing, energy-efficient production, renewable fuel, and many other benefits that we rely on today and in the future. We call it Rethink Tomorrow. www.novozymes.com
NASDAQ OMX: NZYM-B • 6,500 employees • DKK 15 billion turnover • 30+ industries • 700+ products