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Novozymes, one of the world’s largest suppliers of enzyme and microbial technologies headquartered in Denmark, has entrusted GEA with the turnkey fitting of a major new plant to produce plant-based proteins for the plant-based food industry. The volume of this order is well into the high double-digit million-euro range.

GEA is further expanding its market position in the dynamically growing new food market with one of the biggest orders in the company’s history. Novozymes, the world’s largest supplier of enzyme and microbial technologies headquartered in Denmark, has entrusted GEA with the turnkey fitting of a major new plant to produce plant-based proteins for the plant-based food industry. The volume of this order is well into the high double-digit million-euro range. Building the new factory in Nebraska, USA, will start later this year and is expected to be completed towards the end of 2023.

“The demand for foods that have a demonstrably lower environmental footprint than conventionally produced products is growing enormously,” says GEA CEO Stefan Klebert. “With our technologies and experience in scaling industrial applications, GEA is ideally positioned to serve the new food market and thus contribute to our corporate purpose of ‘engineering for a better world’,” says Klebert. “We are pleased to partner with Novozymes in this strategic project.”

For decades, Novozymes has been developing fermented catalytic (i.e. industrially produced) proteins – enzymes – that are the basis for many industrial applications. Only recently, the company announced its intention to invest DKK 2 billion in the growth market for functional proteins (advanced protein solutions) for the food industry. “This investment in a new, state-of-the-art production line in Blair, Nebraska, underscores our commitment to feeding the world sustainably and demonstrating the true strength of biotechnology,” says COO & Executive Vice President Graziela Chaluppe dos Santos Malucelli, Novozymes.

The new plant covers the manufacturing steps from harvesting to separation of proteins. According to Heinz-Jürgen Kroner, Senior Vice President Liquid Technologies at GEA and responsible for the company’s alternative foods business, both partners are united by their ability to build scalable, reliable, and highly efficient plant systems. “This project is exceptional in many respects. The intensive bidding phase saw us planning the production lines for the ingredients less than a year later. We now aim to implement the project at the same pace. The partnership is a very rewarding experience.”

GEA will now construct the process systems, which include membrane filters, mixers, homogenizers, heat exchangers, pasteurizers and UHT units, cleaning and filling systems as well as the pump and valve technology. Installation will start mid-2022. The production capacity initially built can easily be expanded to multiply the capacity in the future as demand grows.

Leveraging combined capabilities to shape new sustainable innovations for customers

Givaudan and Novozymes, the world leaders in their respective industries, are excited to announce the formation of a strategic research partnership for the development of synergistic innovative ingredients and technologies for customers. The two companies will jointly work on the research and development of innovative sustainable solutions in the areas of food and cleaning.

This new partnership is fully in line with Novozymes’ updated strategy Better Business with Biology and with Givaudan’s 2025 strategic goals to expand its offering to consumers’ brands through innovative and sustainable solutions.

Givaudan brings the highest investment in research and development in the industry, has an in- depth understanding of consumers around the world and creates the emotional signatures and food experiences for consumer brands.

Novozymes brings innovation with extensive know-how in enzymes and microorganisms with substantial investments in technology and R&D. On the commercial side, Novozymes is in strong commercial partnerships with some of the largest companies in the industries of Household Care and Food & Beverages. Being the world leader within biological solutions, Novozymes drives sustainable solutions that enable differentiated product performance for consumers.

Together the two companies will work on specific projects with the aim to bring to their respective customers a differentiating solution offering. With a significant overlap of end use markets, there is a fundamental belief that the partnership can generate customer value by combining the two companies’ capabilities and solutions.

Gilles Andrier, Chief Executive Officer at Givaudan said: “We are very excited to initiate this strategic partnership with Novozymes, a much respected company that has an impressive heritage and research platform in biological solutions. Our purpose of ‘creating for healthier, happier lives with love for nature’ fully aligns with the aspiration of Novozymes for a world with 100 % biological products. Together we have the potential to grow with our respective customers while increasing our positive impact on the world with products consumers feel good about, and that preserve our planet.

The acquisition of PrecisionBiotics Group will advance Novozymes’ activities in the area of biological solutions for human oral and gut health – one of the growth pillars in the strategy Better business with biology.

Novozymes announced that it has acquired PrecisionBiotics Group Limited. Based in Cork, Ireland, PrecisionBiotics Group holds a leading position within probiotics for human gut health and is well positioned with several clinically backed products already in the market.

“This acquisition fits well with our strategy, Better business with biology, where we have focus on human health as one of our opportunities for growth. With this investment, we take another important step in implementing the strategy and setting a foundation of growth for our business,” says Ester Baiget, President and CEO of Novozymes.

Combining the power of probiotics and enzymes

PrecisionBiotics Group has strong expertise within clinical development, upscaling and commercialization and is well situated in Cork, Ireland, home to a leading academic society within human gut health.

“We welcome employees in PrecisionBiotics Group to Novozymes. PrecisionBiotics Group brings in complementary technologies, a similar science-based approach and a matching culture. With our unique expertise within discovery and enzymes and PrecisionBiotics’ strong capabilities and network within probiotics for human health, we will be in a unique position. It’s a position where we can expand market opportunities and develop new and highly efficient products,” says Ester Baiget.

“By becoming a part of Novozymes, we will get a global presence across businesses and new capabilities within science and discovery of new strains. This will help us to grow by developing new products where we can combine enzymes and probiotics,” says Barry Kiely, CEO and co-founder of PrecisionBiotics Group.

When combined, enzymes and probiotics synergistically work hand-in-hand to address health benefits from different angles in more powerful ways.

“Novozymes is a strong company based on science with a global market presence and a purpose to find biological solutions for better lives in a growing world. We look forward to speeding up the development of our pipeline and to a global roll-out of products to accelerate growth,” Barry Kiely says.

Novozymes has established OneHealth to market solutions within human health under one umbrella. The aim is to help people live healthier and better lives by use of probiotics and enzymes.

As the market for oat drinks grows, Novozymes has developed a new toolbox to guide producers to expand their businesses into oat drinks.

Half a billion people worldwide are either vegan or vegetarian, 26 % of millennials have already embraced this lifestyle and 73 % among them are willing to pay more for sustainable food and drinks1. The combination of these trends is giving the sale of oat drinks a boost, with an expected growth of 30 % a year2.

“A new market is opening up and booming. To help dairies and beverage producers expand their portfolio and create new types of oat drinks, we have developed a toolbox that can help them expand their business into this new territory,” says Alessandro Palumbo, Market Development Manager at Novozymes.

Oat drinks is the fastest growing category in the plant based beverage segment. This is mainly due to the fact that oat drinks have one of the best nutritional profiles among dairy alternatives. Oat drinks is also known for its benefits when it comes to sustainability.

In spite of huge interest and a growing market, a study finds only 2 in 10 consumers think that plant protein is extremely good tasting2.

“The fast-growing demand gives producers the opportunity to develop and market new types of oat drinks. But at the same time, it’s also a challenge to come up with products that match the consumer’s taste and preference,” Alessandro Palumbo says.

Speed up development and help match consumer’s taste and preference

The new enzymatic toolbox is developed by Novozymes and is the first of its kind. It provides insights into how to use and combine enzymes, raw material and production parameters to adjust sweetness, mouthfeel and nutritional profile in oat drinks. It also provides insights for producers into how to optimize the production process and save costs.

“The toolbox gives dairy and beverage producers the opportunity to develop the oat drinks consumers want. By teaming up with Novozymes, they will be able to select the flavor and nutritional profile of their drink, starting from a prototype and quickly scale it up using the perfect combination of enzymes, raw materials and equipment,” says Alessandro Palumbo.

“This will help them to speed up the go-to-market process while reducing their risks related to new product development”.

By working with Novozymes, producers will also have access to a team of experts, who can provide 360° technical support from raw material to finished product. The toolbox can be accessed from here.

1Vegans, millennials and willingness to pay a premium
2Findings from Quid platform on healthy eating and a Novozymes’ plant protein consumer research conducted in the USA in December 2018 with an online panel of 1,000 respondents, carried out by Natural Marketing Institute (NMI).

Aligned with the updated strategy, the changes will make resources available to investment in new growth opportunities, industries and markets.

Novozymes announced organizational changes to drive stronger growth and deliver on its updated corporate strategy, Better business with biology. The strategy, as announced on June 16, will drive higher sales and earnings growth over the three-year period 2020-2022, and beyond.

Changes will free up resources which will be made available for reinvestments where they have higher impact. This also means that 280 – 330 employees will be laid off globally, of which 123 are in Denmark. Layoffs will happen across divisions, functions and regions and in accordance with local processes and requirements. In addition, a number of employees will be transferred to new roles inside the company.

“Better business with biology allows us to drive more value from the existing business and free up additional resources to invest in new strategic opportunities. We will also invest more in commercial activities and innovation, especially in the emerging markets,” says Peder Holk Nielsen, CEO at Novozymes. “To achieve this, it regrettably means that we need to lay off employees across the organization.”

Focus and investments

Novozymes is the world leader in biological solutions and its financial performance is solid, but the business has faced headwinds.

Better business with biology sets the future strategic direction of the company. The outcome of the strategy has shown that DKK 200-300 million can be freed up from existing portfolios, from simplification and from efficiency improvements. This allows for significant reinvestments in the company and it supports Novozymes’ long-term growth potential.

“We will focus our R&D efforts on fewer projects with higher impact. At the same time, we explore new strategic opportunities where we continue to meet increasing customer needs and solve global challenges, such as clean water, human health and food availability,” says Peder Holk Nielsen.

“The changes we announce today are not easy and we will do our best to support colleagues who have been laid off,” Peder Holk Nielsen concludes.

As announced on June 16 in the strategy update, the restructuring and related charges are included in the full year financial outlook.

Novozymes: Full-year earnings outlook maintained after early-April upgrade. Narrowed sales growth guidance following weakness in US bioethanol.

Novozymes announced its results for the first three months of 2019. All businesses developed roughly as expected except for a weaker US bioethanol industry. Organic sales growth of -4 %: Household Care -3 %, Food & Beverages -2 %, Bioenergy -8 %, Agriculture & Feed -6 %, Technical & Pharma +5 %. EBIT margin 25.7 %. Net profit 14 % lower year on-year (y/y). Free cash flow before acquisitions DKK 0.4 billion.

Peder Holk Nielsen, President & CEO: “The first – quarter decline in sales was no surprise – we communicated this back in January. We also expected US bioethanol to be down, but the decline was larger than we ha d foreseen. The flood s in the Midwest have made it tougher for our customers. With the problems continuing in to April, it will be difficult to reach the top end of the guided organic sales growth range , and we adjust our outlook to 3 – 5 %. We’ re confident sales growth will increase during the year as innovations, the freshness platform, BioAg seasonality and Bioenergy all step up, and the Middle East comparison gets easier.”

Highlights Q1 2019:

  • All businesses roughly as expected except for Bioenergy. A declining US bioethanol market has been further impacted by the Midwest flooding since mid-March
  • As expected, negative impact from the Middle East, feed enzymes and the planned price reductions in US baking enzymes
  • Developed markets flat; 10 % organic sales decline in emerging markets, with the Middle East as the main drag
  • EBIT margin soft but as expected at 25.7 %, mainly due to lower gross margin from lower sales and a planned increase in sales and distribution costs
  • Net profit down 14 % y/y due to lower EBIT and hedging losses
  • Free cash flow before acquisitions DKK 0.4 billion; net investments DKK 0.1 billion

2019 outlook: Organic sales growth 3 – 5 %; an expected 1 %-point added to growth in DKK. US bioethanol production in Q1 was more negative than expected, especially in the wake of flooding in the Midwest in March, continuing into April. The 3 – 5 % range reflects both strong new product performance and geopolitical uncertainty. Stronger growth in 2H vs. 1H y/y for multiple reasons. EBIT margin at 29 – 30 % supported by solid productivity gains and release of full deferred income as communicated on April 4 following the new BioAg setup. Net profit growth of 5 – 10 %. CAPEX at DKK 1.0-1.3 billion. FCF bef. acq. at DKK 2.0-2.4 billion. ROIC expected at ~24 % (~25 % excl. IFRS 16 Leases). Stock buyback program of up to DKK 2bn to be initiated April 25, 2019.

The entire earnings report can be downloaded at novozymes.com.

Novozymes announced its results for the first quarter of 2018. Q1 organic sales growth of 2 % in line with our expectations: Household Care +1 %, Food & Beverages +5 %, Bioenergy +9 %, Agriculture & Feed -5 %, Technical & Pharma -10 %. EBIT margin at 28.9 %. FCF before acquisitions DKK 403 million. 2018 outlook maintained on all parameters.

Peder Holk Nielsen, President & CEO of Novozymes: “We’re well in line to deliver on our full-year sales growth outlook of 4-6 %, and margins are strong despite a significant currency headwind. We continue to see good progress on our key priorities, including increasing presence with new and existing customers to cater for their individual needs. There is still some uncertainty in the agriculture-related business, including from recent geopolitical tensions. However, with current insight, we remain firm about accelerating sales growth throughout 2018 and beyond.”

Highlights Q1:

  • Organic sales growth of 2 % and -6 % in DKK. USD/DKK decline of 13 % in Q1 y/y
  • Growth in Household Care, Food & Beverages and Bioenergy
  • Agriculture & Feed and Technical & Pharma lower, mainly due to continued pressure from certain agriculture markets, as well as timing in Pharma
  • 6 % organic growth in emerging markets; developed markets on par with last year
  • Strong product development: launch of first yeast solution – Innova® Drive – for conventional biofuels, EU approval of probiotic solution Alterion® for poultry, approval of microbial corn bioyield product Acceleron® B-360 ST for the US and the EU, and launch of a new enzyme class for automatic dishwash enabling easy removal of dried-in cereals
  • Strong EBIT margin of 28.9 %, up due to timing of emerging markets’ ramp-up costs and despite currency headwind. Q1 2017 at 27.0 % (~29 % excluding reorganization costs)
    Free cash flow before acquisitions at DKK 403 million
  • Dividend payout of DKK 4.50/share. 42 % payout ratio
  • Full-year 2018 outlook maintained: Organic sales growth 4-6 % (growth relatively stronger in 2H y/y), EBIT margin ~28 %, FCF before acquisitions DKK 2.3-2.6 billion, ROIC 24-25 %

Novozymes announced its results for 2017. Solid year with 4 % organic sales growth (Q4: + 4 %): Household Care + 1 %, Food & Beverages + 9 %, Bioenergy + 11 %, Agriculture & Feed – 3 %, Technical & Pharma + 2 %. EBIT margin at 27.9 % (around 29 % excl. one-time costs). FCF before acquisitions DKK 2.4 billion.

Regarding the 2018 outlook, with good momentum in the business and a strong pipeline of products and opportunities, we see organic sales growth of 4 – 6 % and an EBIT margin of ~28 %.

Peder Holk Nielsen, President & CEO of Novozymes:
“2017 was satisfactory with solid growth and margins. Similar to other years, 2017 saw differences in divisional growth rates, but serving more than 40 industries with enzymes and microbes provides robustness. Our key priorities for 2018 are to increase our presence with new and existing customers, especially in emerging markets, and ensure we cater for individual customer needs with impactful innovation. And although uncertainties exist, with good momentum, a strong product pipeline and increased commercial activities, we see a promising outlook with accelerating growth for 2018 and beyond.”

Highlights:

  • Organic sales growth of 4 % (Q4: + 4 %) and 3 % in DKK (Q4: – 1 %)
  • 4 out of 5 areas grew; Food & Beverages and Bioenergy performed very well
  • Agriculture & Feed lower, mainly due to poor agriculture markets
  • 4 transformative innovations launched of the targeted 10 by 2020
  • Reported EBIT margin of 27.9 % (2016: 27.9 %). Q4 2017: 27.6 % (Q4 2016: 28.6 %)
  • Albumedix (non-core pharma) divested late 2017. DKK 66m negative Q4 EBIT charge
  • M&G financial asset write-down of remaining DKK 60m (DKK 47m post-tax) in Q4
  • Lower year-on-year tax rate despite one-off US tax charge of DKK ~30m in Q4
  • Free cash flow before acquisitions solid at DKK 2.4 billion; higher investments as expected
  • Proposed dividend payout of DKK 4.50/share. Dividend growth of 13 %. 42 % payout ratio
  • Full-year 2018 outlook: Organic sales growth 4 – 6 % (growth relatively stronger in 2H y/y), EBIT margin ~28 %, FCF before acquisitions DKK 2.3-2.6 billion, ROIC 24 – 25 %. Stock buyback program of up to DKK 2 billion. Long-term dividend payout ratio upped from ~40 % to ~50 % of net profit