Novonesis: 2024 Guidance Raised at Capital Markets Day; Long-Term Biosolutions Growth Reaffirmed

We are increasing our fair value estimate for wide-moat Novonesis by 2.5% to DKK 420 following the firm's capital markets day, primarily given the update to 2024 guidance. Organic sales growth for 2024 is now expected to land at the upper end of the 5%-7% target range and the pro forma adjusted EBITDA margin guidance has been increased to between 35% and 36% from about 35% previously. The stronger margin can be mainly attributed to the implementation of cost synergies ahead of target, with a run rate of 80% as of June, only about five months since the merger of Novozymes and Chr. Hansen was completed. This is primarily the result of early measures in procurement, production, and logistics to leverage the greater scale of the combined firms.