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Research Tree provides access to ongoing research coverage, media content and regulatory news on NOVOZYMES A S-B SHARES. We currently have 6 research reports from 1 professional analysts.
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NOVOZYMES A S-B SHARES
NOVOZYMES A S-B SHARES
Weak Q3 triggers another guidance downgrade
14 Nov 16
Yet another disappointing quarter for Novozymes – in fact, it witnessed a decline at both the organic and reported level for the first time in a long period. Both sales and net income were below (all ~ 6%) our, as well as consensus, expectations as all the segments turned negative organically, except for the smaller Technical & Pharma (+16%). The reported sales decline of 4% at the group level was a function of 3% organic contraction and 1% negative currency impact, to DKK3.4bn. Segment-wise, Household Care and Food & Beverages fell by 5% and 2% (all sales growth rates in organic terms, unless otherwise specified), respectively, after 4% growth in Q2 16. Moreover, as expected, the Bioenergy segment contracted at an accelerated pace (-8% vs. -6% in both Q2 16 and Q1 16) while the Agriculture & Feed segment again turned negative (-3% vs. 13% (including the impact of deferred income) in Q2 16 and -8% in Q1 16). Lower sales translated into an adjusted operating profit decline of c.4% to DKK973m. Lower net financial expenses (DKK14m compared to DKK53m in Q3 15) and the tax burden (DKK205m vs. DKK216min 3Q 15) rendered some support to net income, which was up by c.1% to DKK750m). In effect, management has materially (for the fourth time in the year) downgraded its guidance. Organic sales are now expected to expand by c.2% from the previous 2-4% while in DKK terms it is 0-1% from the previous 1-3%, EBIT to grow by 1-2% from the previous 1-3%, net profit to increase by 8-9% from the previous 8-10%). However, the EBIT margin expectations remain unchanged at c.28%.
BioAg weakens, Household Care and Food & Beverages continue their growth momentum
06 Oct 16
Novozymes reported unsatisfactory Q2 16 results, below both consensus as well as our expectations, primarily on lower than expected sales from the Agriculture & Feed segment. After successive growth in multiple quarters, sales contracted 1% in reported figures to DKK3.4bn following a negative currency impact of 5% (pervasive across all the segments) that more than eclipsed the 4% organic sales expansion. On the positive side, both Household Care and Food & Beverages segments grew moderately at 4%. Technical & Pharma also expanded robustly, albeit at a slower pace qoq (+9% vs. +37% in Q1 16) while Bioenergy continued its deceleration (-6%). However, the major disappointment stemmed from Agriculture & Feed which, although it grew ~5% organically (excluding the impact of deferred income), reflected a substantial slowdown from last year (+19% in FY 15) and dented the expectations of solid growth for the year (now moderate growth expected). On the profitability metrics, adjusted operating profit declined c.2% to DKK961m (margin down by 40bp to 28%) while a lower net financial expense of DKK6m compared to DKK48m in Q2 15 augmented attributable net profit by 10.0% to DKK750m (margin up by 2.1ppt to 21.9%). Factoring in the Q2 sales performance and the unexpected weakness in BioAg resulting from uncertainties in the end-markets, management has downgraded its guidance for the third time this year (organic sales growth range decreased to 2-4% from the previous 3-5%). However, the sales growth range in DKK (1-3%) and other profitability forecasts (EBIT margin: ~28%, EBIT growth in DKK: 1-3% and net profit growth: 8-10%) remain unchanged.
Household Care recovering but no respite for Bioenergy
13 May 16
Novozymes’ Q1 16 top-line number came in slightly below our expectation (although largely in line with consensus estimates), while profitability remained strong. Sales grew 2% yoy (sales growth rates in organic terms, unless otherwise specified) and 1% in DKK (following waning currency tailwinds) to DKK3.6bn, driven by the Household Care and Technical & Pharma segments, offset partially by weakness in the Bioenergy and Agriculture & Feed segments. The adjusted EBIT margin (excluding the reorganisation costs of c.DKK70m) was up c.90bp to c.28.3% (including the DKK70m reorganisation costs, it declined c.100bp to 26.3%) led by productivity improvements and a slightly favourable product mix. Hedging gains and a lower effective tax rate allowed net profit to improve 5% to DKK745m. Following the unfavourable movement in exchange rates, the company has downgraded its FY 16 reported sales and EBIT growth guidance to 1-3% (down from the earlier 3-5%). However, organic sales growth, EBIT margin and net profit growth expectations remain unchanged at 3-5%, 28% and 8-10%, respectively. Management expects Q2 16 organic growth to be higher than in Q1 16, mainly on account of easier comps. Amid the challenges being faced by the company, it has announced major organisational and leadership changes (in February 2016), in an effort to streamline operations and become more customer centric. It has consolidated its earlier structure of five divisions into three (Household Care & Technical Industries, Agriculture & Bioenergy and Food & Beverages), appointing new heads for the three new divisions. In addition, it has formed a central Research, Innovation & Supply centre, with COO Thomas Videbæk as its head. While Thomas Nagy, Head of Supply Operations, has left the company, Per Falholt stepped down as head of R&D but is continuing to serve the company in a consulting role.
Crude reality check triggers FY 17-20 downgrade
25 Jan 16
Novozymes ended a turbulent FY 15 on an expectedly soft note with Q4 15 results coming in boardly in line with the muted market and our expectations. Q4 sales were up 2% yoy (organic growth rates, unless otherwise specified) to DKK3.5bn (Q3: +3%), as continued momentum in Agriculture & Feed (+18%; Q3: +20%) and Food & Beverages (+4%; Q3: +6%) as well as recovery in Technical & Pharma (+21%; Q3: -8%) partially offset the weak performance of Bioenergy (-15%; Q3: -6%). Forex benefits contributed 7ppts to the top-line (Q3: 8ppts), catapulting reported growth to 9%. Profitability, on the other hand, remained resilient, with reported EBIT witnessing growth of 14% (in DKK) to DKK962m, driven by productivity improvements, lower raw material costs as well as tight cost control in the R&D and Administrative divisions. A DKK50m write-down reversal in the quarter was fully offset by the DKK54m net write-down in intangible assets related to the Beta Renewables partnership. For the full year, while sales grew by 4% to DKK14bn (+12% in DKK), EBIT and net profit increased by 15% and 12% (in DKK) to DKK3.9bn and DKK2.8bn, respectively (lower end of the revised FY 15 guidance announced in Q3 15). The chief dampener, however, came from the conservative FY 16 guidance along with the lowering of the sales outlook for FY 17-20. For FY 16, management expects (all in DKK) both sales and EBIT growth of 3-5%, and net profit growth of 8-10%. Furthermore, it revised down its FY 17-20 organic sales growth outlook to 6-7% from the earlier 8-10%, citing low commodity prices and weaker emerging market growth. It is worth noting that the company slashed its long-term organic sales growth rate target from above 10% to 8-10% at the time of the FY 14 results. On the positive side, it continued to reward shareholders by proposing a FY 15 dividend of DKK3.5 per share (vs. DKK3.0 in FY 14) and announcing a new DKK2bn share buyback program (to be completed in FY 16).
Margin benefits temper underlying weakness
23 Nov 15
Novozymes, not surprisingly, reported another weak quarter, although slightly better than market expectations, which were tepid at best, thanks to a disappointing Q2 15. In Q3, organic sales were up 3% yoy to DKK3.5bn (better than the 1% seen in Q2, but lower than the 9% recorded in Q3 14) primarily driven by the recovery in Agriculture & Feed (+20% vs. -3% in Q2) and sustained momentum in Food & Beverages (+6%; +4% in Q2), offsetting further sluggishness in Bioenergy (-6% vs. -4% in Q2) and an unexpected decline in Technical & Pharma (-8% vs. +7% in Q2). Household Care continued to face a challenging environment, but showed a slight sequential improvement (+3% vs +2% in Q2). Currency gyrations continue to play a significant role, adding 8% to topline growth, but the impact seems to be moderating (+12% in Q2 and +11% in Q1). Profitability, on the other hand, remained resilient, driven by productivity improvements, slightly lower raw material costs, excellent cost control in R&D and Administrative divisions, as well as positive forex. While EBIT jumped 22% to DKK1.0bn (the margin improved 266bp), hedging losses limited growth at the net profit level to 17% to DKK743m (margin improved 109bp). Considering the worsening environment in Bioenergy and the slight depreciation of the US$, management has narrowed its FY 15 guidance downwards – organic sales growth is now expected to be 4-5% (vs. previously 4-7%), 12-13% reported (vs. 13-16% earlier). The company maintains EBIT margin guidance at 27-28%, but sees EBIT growth at c.15% (vs. previously 15-17%) and net profit growth at c.12% (vs. earlier 11-13%).
Weak underlying growth drives guidance downgrade
28 Sep 15
Novozymes reported a disappointing Q2 15, although currency tailwinds continued to cushion the lacklustre underlying performance. Organic sales growth came down significantly from 8% in Q1 to 1% in Q2 (to DKK3.4bn; +13% in DKK) due to the sluggish show of the Q1 star performers (all in organic terms) - Bioenergy (-4% vs. +8% in Q1) and Agriculture & Feed (-3% vs. +40% in Q1). The bigger segment, Household Care showed a sequential improvement (+2% vs. -2% in Q1), partly due to easier comparables, but continued to face a challenging environment. On the flip side, Food & Beverages, and Technical & Pharma, maintained their momentum with organic growth of 4% (+5% in Q1) and 7% (+4% in Q1), respectively. On the profitability front, margins remained resilient thanks to a positive currency impact, and tight cost control, particularly in the Administrative division. This resulted in an 18% yoy growth in EBIT to DKK930m (margin improved 125bps), but higher finance costs due to hedging losses limited growth at net profit level to 15% to DKK682m (margin improved 47bp). Following the soft results, management has downgraded its FY15 organic sales growth guidance to 4-7% from the earlier 7-9% (reported growth of 13-16% vs. an earlier expectation of 16-18%), citing issues with its Bioenergy and Household Care segments, but nudged up EBIT margin guidance to 27-28% from the earlier 27%.
30 Nov 16
Abzena (ABZA): Interim results indicate happy customers (BUY) | Horizonte Minerals* (HZM): Fund raise completed (CORP) | SacOil* (SAC): Half-year trading statement (CORP) | Revolution Bars (RBG): New openings (BUY) | Amino Technologies* (AMO): Multi operator FUSION roll out (CORP)
N+1 Singer - Morning Song 30-11-2016
30 Nov 16
Sanderson has delivered full year results in line with expectations and the 19 October trading update after a strong finish to the year compensated for a slower start. A healthy level of pre-contracted recurring revenue (50%), incremental sales to existing customers and new customer wins at higher average order values helped deliver solid revenue growth in both the Digital Retail (+9%) and Enterprise (+12%) divisions. A decent order book and good sales momentum suggest that the company is on track to deliver on unchanged profit expectations for the current year. We continue to view the valuation (FY17 EV/EBITDA 8.6x) as undemanding given an attractive combination of accelerating growth potential, strong cash generation and growing dividends.
N+1 Singer - Morning Song 29-11-2016
29 Nov 16
Vp has reported another impressive set of interims, confirming strong growth in most markets and a positive outlook. Recent acquisitions are bedding in well and the full year outturn is set to exceed previous expectations (5%/6% EPS upgrades in FY17/FY18). The recent Capital Markets Day provided a reminder of Vp’s qualities (specialist focus, high returns, strong cash generation) and its growth potential, which in our view are not reflected in a modest <11x P/E rating. We firmly believe the shares are due a re-rating and see intrinsic value in excess of 800p.
Panmure Morning Note 02-12-16
02 Dec 16
We expect CareTech to report FY results to September on 8th December. A positive trading update in October indicated that performance for the year was in line with market expectations therefore we are focusing on the outlook. We expect a confident statement since the end of 2016 showed positive trends across fee rates, expansion in places and occupancy. We believe CareTech is well positioned for further expansion, and remains at an attractive valuation. We retain our BUY and 380p price target.
Food intolerance driving growth
29 Nov 16
Omega Diagnostics Group has an established core business providing high quality in vitro diagnostic tests within three core areas of competence – Food Intolerance, Allergy & Autoimmune, Infectious Disease – that are sold in over 100 countries. The group offers steady low single-digit growth which is profitable and cash generative. Investment in new products has seen the launch of a new panel of automated allergy tests and progress on Visitect CD4 for monitoring of HIV positive patients. Interim results highlighted the opportunities to accelerate growth of the business, particularly Allersys, which has drawn attention from its partner.
Small Cap Breakfast
29 Nov 16
Asia Pacific Investment Partner - the research-driven emerging and frontier markets real estate development business intends to float on AIM and conduct a placing in December RM Secured Direct Lending - The secured direct lending fund intends to float on the Main Market on 15 December raising up to £100m Diversified Oil & Gas— Schedule One now out. $60m to be raised. Expected admission 6 December. Creo Medical Group —UK based medical device company focused on surgical endoscopy, a recent development in minimally invasive surgery. Admission due 7 December. Fundraising details TBA.