Novozymes Earnings: Few Surprises in the Last Standalone Reporting, With Novonesis Now a Reality

Wide-moat Novozymes reported fourth-quarter organic revenue growth of 6%, in line with the company-compiled consensus, and an EBIT margin before special items of 25.1%, 50 basis points below consensus. The weaker margin was mainly the result of sales mix, with a relatively weak performance from human health and agriculture solutions. Price increases contributed 4% to organic growth, offsetting the effects of higher input costs, while volumes continued to be resilient, up 2% in the quarter and flat for the year. Our fair value estimate is unchanged. This is the last quarterly report for Novozymes as a standalone entity since the combination with Chr. Hansen was completed this week and Novozymes becomes Novonesis. We will cover Novonesis going forward, and we will reflect this change in our analysis shortly. Pro forma numbers for 2023 and the 2024 outlook for Novonesis are expected no later than March 31.