Novozymes Earnings: 2023 Guidance Maintained Despite Volatility in Segment Growth

Wide-moat Novozymes reported first-quarter results that were consistent with the year's outlook. EBIT reached DKK 1.1 billion, with an organic sales growth of 5%. This growth was supported by favorable timing of orders, solid pricing, and underlying volume growth, particularly in agriculture, animal health and nutrition, and bioenergy. Novozymes exceeded the company-compiled consensus, with their EBIT 5% higher and organic growth 1.7% percentage points higher. The company maintained its 2023 organic growth guidance of 4%-7%, with an EBIT margin of 25%-26%. Our forecast aligns with the results, so we anticipate no significant changes to our DKK 395 fair value estimate. At present, the shares are trading in 3-star territory.