Novozymes A/S – ADR ((NVZMY)) has held its Q4 earnings call. Read on for the main highlights of the call.
Novozymes A/S Reports Strong Growth Amidst Challenges in Earnings Call
The recent earnings call for Novozymes A/S – ADR painted a picture of robust organic growth, improved profitability, and significant sustainability achievements. Despite facing challenges in the Human Health segment, particularly in the U.S. and China, and the impact of exiting certain markets, the overall sentiment was positive, with an optimistic outlook for 2025.
Strong Organic Sales Growth
Novozymes reported a strong organic sales growth of 8% for 2024, driven by a 6% increase in volume and a 2% contribution from pricing strategies. The emerging markets stood out with a remarkable 12% growth, showcasing the company’s successful expansion efforts.
Improved Profitability
The company achieved a pro forma adjusted EBITDA margin of 36.1% for the year, marking an increase of 2.3 percentage points from 2023. This improvement was attributed to strong sales growth, cost synergies, and operational excellence.
Successful Integration and Cost Synergy Achievement
Novozymes has successfully achieved an 80% run rate of its three-year cost synergy program within the first year. The company remains on track to realize a €200 million run rate in its revenue synergy program.
Sustainability Achievements
A significant portion of Novozymes’ revenue, between 80% and 83%, is aligned with six of the United Nations Sustainable Development Goals. The company has also reduced its Scope 1 and 2 CO2 emissions by 63% since 2018, highlighting its commitment to sustainability.
New Product Launches
In 2024, Novozymes launched 45 new products across various industries and geographies, reinforcing its position as a leader in biosolutions innovation.
Limited Growth in Human Health
The Human Health segment experienced limited growth, with dietary supplements remaining flat due to muted growth in the U.S. market. Additionally, the HMO segment faced a high comparable, leading to an expected decline.
Challenges in China
The Chinese market, particularly in the Dairy segment, experienced a slight negative development due to a decline in the dairy market, despite ongoing innovation efforts.
Impact of Exit from Russia and Belarus
Novozymes’ decision to exit the Russian and Belarusian markets is anticipated to negatively impact the full-year organic sales growth by approximately one percentage point.
Positive Outlook for 2025
Looking forward, Novozymes anticipates continued strong growth, projecting a 5% to 8% increase in organic sales for 2025. The company also expects an adjusted EBITDA margin between 37% and 38%, reflecting its confidence in maintaining its growth trajectory.
In conclusion, Novozymes A/S – ADR’s earnings call highlighted a successful year marked by strong growth and profitability, despite certain challenges. The company’s commitment to sustainability and innovation, coupled with a positive outlook for 2025, underscores its strategic direction and resilience in the face of market challenges.