Novonesis (NSIS) Q1 2025 earnings summary

Executive summary

• Achieved 11% organic sales growth in Q1 2025, with all segments and geographies delivering double-digit growth, mainly volume-driven and supported by pricing, synergies, and innovation.

• Adjusted EBITDA margin reached 38.3%, up 3.1 percentage points year-over-year, reflecting operational excellence, cost synergies, and merger benefits.

• Six new biosolutions launched in Q1, with further acceleration of launches expected in coming quarters.

• Announced EUR 1.5bn acquisition of DSM-Firmenich's share in the Feed Enzyme Alliance, expected to close in Q2 2025, expanding animal biosolutions capabilities.

• Maintains confidence in full-year outlook despite increased market uncertainty and currency headwinds.

Financial highlights

• Organic sales growth of 11% year-over-year; reported sales up 12% with 1% currency tailwind.

• Adjusted EBITDA was EUR 412.8m (margin 38.3%), up from EUR 339.7m (margin 35.2%) pro forma Q1 2024.

• Adjusted gross margin improved to 58.9%, up 330 basis points year-over-year, driven by lower input costs and economies of scale.

• Diluted adjusted EPS was EUR 0.42, up 27%; adjusted EPS (excl. PPA) was EUR 0.53, up 36%.

• Operating cash flow was EUR 106.4 million; free cash flow before acquisitions was EUR 68.1 million, down from EUR 132.4 million in Q1 2024 due to higher net working capital.

Outlook and guidance

• Full-year 2025 organic sales growth expected at 5%-8%, including a 1 percentage point negative effect from exiting Russia and Belarus; excluding country exits, growth would be 6%-9%.

• Adjusted EBITDA margin guidance maintained at 37%-38%, absorbing recent currency headwinds.

• Volume growth forecasted at 4%-7%, price ~1%, sales synergies ~1%, and ~-1% impact from country exits.

• Net financial cost for 2025 now expected at EUR 50 million, improved from previous EUR 80 million due to better currency hedging.

• NIBD/EBITDA expected around 1.0x at year-end, with the dsm-firmenich acquisition to add ~1x post-closing.