Novonesis (NSIS) Q2 2024 earnings summary

Executive summary

• Organic sales grew 7% in H1 2024, with Q2 organic growth at 10%, driven by volume and price increases; emerging markets up 15% and developed markets up 3%.

• Adjusted EBITDA margin reached 35.3% in H1, up from 33.8% year-over-year; IFRS margin at 35.5%.

• Integration of merged businesses, including Chr. Hansen, is progressing well, with cost synergies at 80% run rate and sales synergies expected from 2025.

• 21 new products launched in H1, including 13 in Q2; strong innovation pipeline.

• Interim dividend of DKK 2.00 (EUR 0.27) per share approved for September 2024.

Financial highlights

• Pro forma H1 2024 sales: EUR 1,943.7m (+7% organic, +5% EUR); IFRS sales: EUR 1,831.7m (+8% organic, +54% EUR).

• Adjusted EBITDA: EUR 685.8m (35.3% margin, pro forma); EUR 649.4m (35.5% margin, IFRS).

• Adjusted net profit: EUR 297.1m (pro forma); IFRS net profit: EUR 63.9m.

• Free cash flow before acquisitions: EUR 387m, up from EUR 182.6m year-over-year.

• CAPEX-to-sales ratio decreased to 7.9% (pro forma); guidance for 2024 at 9-11%.

Outlook and guidance

• Full-year 2024 organic sales growth outlook raised to 7-8%, with adjusted EBITDA margin expected at 35.5-36.5%.

• Gross margin to improve in H2 due to lower input and energy costs.

• Both main segments expected to grow in line with group outlook.

• Effective tax rate for 2024 expected at 30% due to non-deductible transaction costs.

• Interim dividend to be distributed in September; last trading day August 29.