Novozymes (Sell, TP: DKK280.00) - Household Care disappoints
Q2 organic sales growth of 5% was above our forecast of c3.8% and consensus of c4.0%, mainly due to strength in Bioenergy and Agriculture & Feed. The 27.4% EBIT margin was lower than expected (we forecast 27.7%, consensus 28.0%). The 2018 guidance of 4–6% organic revenue growth, an EBIT margin of c28% and net profit growth of 0% were unchanged. We expect limited changes to consensus EPS on the back of unchanged guidance, but expect the shares to trade down 1–3% based on weak Household Care and margins.Novozymes is a biotechnology company based in Denmark. Co.'s business operations are centered on the development of industrial enzymes, microorganisms, and biopharmaceutical ingredients. Co. provides business-to-business biological solutions used in the production of numerous products such as biofuel, detergents, feed, and crops. Co.'s business operations are organized along two segments: the Enzyme Business which is divided into four areas, providing industrial enzymes for household care, food & beverages, bioenergy, and feed & other technical; and the BioBusiness which is home to Co.'s microorganisms and biopharmaceutical ingredients.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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