Novozymes cuts outlook on weakness in U.S. ethanol, agriculture parts
Novozymes announced that its organic sales increased by 1% in Q3 and declined by 2% in the first nine months of the year. "Volatile markets in US ethanol, global agriculture and the starch processing business in Food & Beverages continue to impact sales negatively," the company said in a statement. Consequently, Novozymes no longer expects to achieve the full-year guidance of 1%-3% organic sales growth and the company revises its guidance to down 2% to flat. Because of the reduced sales outlook, the EBIT margin is now expected at 27%-28% and the development in net profit is expected at negative 5% to flat. CEO Peder Holk Nielsen said, "Our sales performance for the first nine months of 2019 is weaker than expected as we see worsening, negative developments in US ethanol and agriculture-related parts of our business. Despite a careful approach to the underlying market developments, conditions are more severe than previously assumed. At the same time, however, recent innovations such as the freshness technology in Household Care, Balancius for animal health and the BioRise inoculant for corn, are all performing well and as expected."