Novozymes suspends 2020 outlook because of COVID-19, reports Q1 sales growth of 10%

In Denmark, Novozymes is suspending its 2020 outlook following the COVID-19 outbreak, says social distancing is negative for bioenergy as demand for gasoline and ethanol drops in the U.S. and other main business areas likely to remain largely intact but with higher volatility.

Since Novozymes’ most recent full-year outlook, issued on January 23, uncertainty about global economic developments following the COVID-19 outbreak has increased significantly. Consequently, Novozymes has decided to suspend its 2020 outlook.

Novozymes reported a strong Q1 with organic sales growth of 10% and preliminary EBIT margin of ~29% and says they are closely monitoring the impact of the COVID-19 outbreak and taking all necessary, precautionary measures to protect our business, keep employees safe and ensure supply, while also complying with or exceeding guidelines from local, national and global healthcare authorities. Their largest manufacturing sites across the world are operating as normal and, in terms of production and supply chain, they are able to meet demand.

Sales in the first quarter grew organically by 10% (9% in DKK). Household Care grew organically by 11%, Food & Beverages by 11%, Bioenergy by 11% and Agriculture & Feed by 8%, whereas Technical & Pharma declined by 10%. At this stage, it is not clear to what extent the demand increase is due to a combination of additional end-user consumption and/or short-term customer/consumer stockpiling.