Copenhagen, Denmark
April 24, 2014
Novozymes, the world’s largest producer of industrial enzymes, today announced its 2014 first quarter results. Organic 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 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.
“We’ve delivered a strong first quarter, and we’re increasing the outlook for full-year EBIT growth”, says Novozymes CEO Peder Holk Nielsen. “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."
The entire earnings report can be downloaded at news.novozymes.com
Sales of enzymes to the bioenergy industry increase by 34% as Strong Q1 sales for Novozymes Bioenergyembrace new technology.
Sales of enzymes to the bioenergy industry increase by 34% as customers embrace new technology.
Three enzymes that promise to improve profits for producers of corn ethanol are behind the strong growth in Novozymes’ first quarter bioenergy sales. Avantec®, Spirizyme® Achieve and Olexa® enable producers to squeeze up to 5% more ethanol out of corn while saving on energy and chemicals.
Proven technology
“The enzymes give our customers a choice,” says Niels Miles Frandsen, Marketing Director for Bioenergy at Novozymes, “They can look at corn and ethanol prices, and then decide to buy less corn, but still maintain the same ethanol output, or they can increase throughput without increasing input costs. They are achieving the yield benefits we promised.”
Avantec was introduced to the market in October 2012, while Spirizyme Achieve was launched in June 2013 along with Olexa, a solution that works by freeing up oil bound in the corn germ. In addition to increasing ethanol yield, the three enzymes can improve corn oil extraction by 13%, while saving 8% energy. This helps ethanol producers to improve profit margins and efficiency, and reduce their environmental footprint.
Making solutions work
Novozymes’ tech service team has played a big part in getting the new products quickly introduced in the ethanol industry. Using data analysis and advanced statistics, the team works with customers at their plants to implement the technology and adjust their processes to ensure the enzyme benefits are fully realized.
“Our tech service team act as trusted advisors to our customers, and share the best practises they have developed for these products,” says Niels Miles Frandsen, “They help our customers see through the noise and track their yield increase. Our success in bioenergy is not just a result of the innovative enzymes we’re offering, but also due to this talented team who ensure our customers get an entire solution that meets their needs.”
Innovation to replace fossil fuels
The U.S. Energy Information Administration estimates that U.S. fuel ethanol production grew by 11% in the first quarter of 2014 compared with the same period last year. The U.S. remains the world’s biggest biofuels producer, and with ethanol accounting for approximately 10% of gasoline consumption in the U.S. today, the continuous development of such a renewable fuel aids the battle against climate change.
“The biofuel industry is continuing to develop and our journey to increase yields is not yet done,” says Niels Miles Frandsen, “We will continue to provide our customers with new technology that improves their business.”
About Novozymes
Novozymes is the world leader in bioinnovation. Together with customers across a broad array of industries we create tomorrow’s industrial biosolutions, improving our customers' business and the use of our planet's resources. With over 700 products used in 130 countries, Novozymes’ bioinnovations improve industrial performance and safeguard the world’s resources by offering superior and sustainable solutions for tomorrow’s ever-changing marketplace.
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