Novozymes books another growth guidance downgrade

Q3 hasn't given a sufficient boost to Novozymes' underwhelming 2019, leading the company to book another growth guidance downgrade.
Photo: Thomas Lekfeldt/Ritzau Scanpix
Photo: Thomas Lekfeldt/Ritzau Scanpix

Volatile markets in US ethanol, global agriculture as well as the food-and-drink starch business are still negatively impacting Novozymes' revenue.

The company thereby no longer expects to achieve prior projections for 1-3 percent organic growth for the full year.

Novozymes thus writes a downward adjustment for full-year 2019, now at -2-0 percent for the period.

As a consequence of the revenue downgrade, Novozymes now forecasts a profit martin of 27-28 percent and a -5-0 percent development on its annual result, the company informs in a stock market notice Wednesday evening.

"Our revenue development for the year's first nine months is weaker than expected, as we see a worsened negative development for ethanol in the US as well as the parts of our business related to agriculture," Novozymes Chief Executive Peder Holk writes in the statement and continues:

"Despite a cautious approach to the underlying market development, conditions are more serious than previously anticipated,"

Holk adds that the company's new product launches within, for instance, its freshness technology for washing detergent are performing well.

Novozymes' organic revenue growth increased by 1 percent during Q3 and declined 2 percent in the year's first three quarters.

This marks the third time this year that Novozymes downgrades its growth outlook.

In late April and in connection with the firm's Q1 report, Novozymes lowered its organic growth guidance and further reduced its projection in June. Most recently, the prognosis for organic sales growth was slashed from 3-5 percent to 1-3 percent.

At the same time, the company decreased its expectation for profit ratio from 29-30 percent to 28-29 percent.

The growth outlook for the group's full-year result was reduced to 3-8 percent against the 5-10 percent spread from late April.

English Edit: Daniel Frank Christensen

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