reports
- Rune Majlund Dahl
Novonesis (Buy, TP: DKK500.00) - Strategic acquisition
We view the proposed acquisition of dsm-firmenich’s stake of the Feed Enzyme Alliance as a good strategic fit, expanding Novonesis’ presence across the animal biosolutions value chain. In our view, the EUR1.5bn acquisition price is slightly too high (21.4x EV/EBITDA), but it could be justified, as the business is expected to add c50bp of adj. EBITDA margin accretion in the first full year, with further accretion in the following years. We reiterate our BUY and DKK500 target price.
- Rune Majlund Dahl
Novonesis (Buy, TP: DKK500.00) - Solid underlying momentum
We expect 2024 to reach the top of the guidance, with Q4e organic sales growth of 7.3% YOY and an H2e adj. EBITDA margin of 37.2%. We expect guidance for 2025 of 6–8% organic sales growth (we forecast 7.2%) and an adj. EBITDA margin of 37–38% (we estimate 37.7%), driven by volume/pricing and the realisation of cost synergies. We reiterate our BUY and DKK500 target price.
- Rune Majlund Dahl
Novonesis (Buy, TP: DKK500.00) - Top end of guidance looks reachable
Top end of guidance looks reachable Still-strong momentum in Q3 took organic growth to c11% YOY (above our estimate and consensus). As a result, management now expects 2024 organic growth in the top half of 7–8%, while it is still targeting a 35.5–36.5% adj. EBITDA margin. The guidance implies Q4 organic growth of c3% at the mid-point and c5% at the top end, supporting our view that YTD growth is unlikely to be repeated in 2025. We reiterate our BUY and DKK500 target price.
- Rune Majlund Dahl
Novonesis (Buy, TP: DKK500.00) - Adding company consensus
We have added company-compiled consensus to our preview. We forecast strong organic revenue growth of 9.0% YOY (8.9%), led by Planetary Health Biosolutions. We expect management to reiterate its 2024 guidance for organic revenue growth of 7–8% (we forecast 7.7%, consensus 7.7%) and an adj. EBITDA margin of 35.5–36.5% (we forecast 36.3%, consensus 36.2%). We reiterate our BUY and DKK500 target price.
- Rune Majlund Dahl
Novonesis (Buy, TP: DKK500.00) - 2024 guidance likely unchanged
We forecast strong organic revenue growth of 9.0% YOY in Q3 (in line with Visible Alpha consensus), led by Planetary Health Biosolutions (we forecast 9.1%, versus consensus of 8.8%). We expect management to reiterate its 2024 guidance for 7–8% organic revenue growth YOY and a 35.5–36.5% adj. EBITDA margin. We reiterate our BUY and DKK500 target price.
- Rune Majlund Dahl
Novonesis (Buy, TP: DKK500.00) - Strong momentum raises guidance
The company reported continued strong momentum, taking organic revenue growth to c10% YOY in Q2 and the H1 adj. EBITDA margin to 35.3%, while net profit was hurt by inventory value adjustments and special items. The 2024 guidance was increased to organic growth of 7–8% and a 35.5–36.5% adj. EBITDA margin. We still expect Novonesis to reach its target of 100% run-rate EUR80m–90m cost synergies by end-2024e. We reiterate our BUY and DKK500 target price.
- Rune Majlund Dahl
Novonesis (Buy, TP: DKK500.00) - Strong momentum raises guidance
The company reported continued strong momentum, taking organic revenue growth to c10% YOY in Q2 and the H1 adj. EBITDA margin to 35.3%, while net profit was hurt by inventory value adjustments and special items. The 2024 guidance was increased to organic growth of 7–8% and a 35.5–36.5% adj. EBITDA margin. We still expect Novonesis to reach its target of 100% run-rate EUR80m–90m cost synergies by end-2024e. We reiterate our BUY and DKK500 target price.
- Rune Majlund Dahl
Novonesis (Buy, TP: DKK500.00) - Expecting strong momentum
Driven by strong momentum across most business areas, we forecast Q2 organic sales growth of 9.2% YOY (in line with consensus), and an adj. EBITDA margin of 35.6% (consensus 35.1%) for H1. We expect the 2024 guidance to be maintained including organic sales growth at the upper end of 5–7% (we forecast 7.2%, consensus 7.0%) and an adj. EBITDA margin of 35–36% (we forecast 35.8%, consensus 35.6%). We reiterate our BUY and DKK500 target price.
- Rune Majlund Dahl
Novonesis (Buy, TP: DKK500.00) - Strong execution on cost synergies
Ahead of the CMD, Novonesis raised its 2024 guidance to organic revenue growth at the ‘upper end of 5–7%’ and an adj. EBITDA margin of 35–36% (c35%), supported by scale and cost synergies. Its 2025 financial targets were unchanged (in line with our expectations), but we now assume cost synergies to reach EUR110m by end-2026e, boosting our adj. EBITDA margin to 39.5% (previously 39.0%) by 2030e. We reiterate our BUY and have raised our target price to DKK500 (480).
- Rune Majlund Dahl
Novonesis (Buy, TP: DKK480.00) - 2025 targets likely kept at CMD
We expect Novonesis’ first CMD (18 June) to be an educational event, focusing on building the bridge from the legacy companies to Novonesis. We expect management to maintain its 2025 financial targets for an organic revenue CAGR of 6–8% for 2023–2025e and an adj. EBITDA margin of c37% by 2025e. Looking beyond the CMD, we forecast strong Q2 results to prompt management to raise its 2024 guidance. We reiterate our BUY and have raised our target price to DKK480 (470).
- Rune Majlund Dahl
Novonesis (Buy, TP: DKK470.00) - CMD and Q2 guidance increase
We view the soft Q1 trading update (c4% organic revenue growth) positively, as the weak points are Q1-related while in our view the stronger trends seem more sustainable. The 2024 guidance for organic growth of 5–7% YOY and a c35% adj. EBITDA margin was unchanged, which we believe now looks conservative. At the CMD, we expect focus on synergies and a potential increase in the long-term EBITDA margin target as likely share price catalysts. We reiterate our BUY and have raised our target price to ...
- Rune Majlund Dahl
Novonesis (Buy, TP: DKK440.00) - Bridge-building to higher targets
We look past a well-flagged weak Q1e trading update to the upcoming CMD, where we expect focus on synergies and a potential increase in the long-term EBITDA margin target. We have taken a deep dive into the organic revenue bridge from the legacy divisional forecasts to the new, and the increased focus on Energy, as it is key for Planetary Health Biosolutions’ performance. We have upgraded to BUY (HOLD), but reiterate our DKK440 target price.
- Rune Majlund Dahl
Novonesis - Initiation of coverage - All eyes on execution
We initiate coverage of the merged entity (Novozymes and Chr Hansen) with a HOLD and DKK440 target price. We view the 2024 guidance as conservative (5–7% organic growth, c35% adj. EBITDA margin), with the organic growth guidance midpoint below the targeted 6–8% CAGR for 2023–2025 and the adj. EBITDA margin guidance c2% below the 2025 target. We note the 2025 guidance is unchanged, and find the low end of the organic growth target more realistic. We expect investor focus ahead of the CMD on 18 Ju...
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