Novonesis (NSIS) Q4 2024 earnings summary

Executive summary

• Achieved 8% organic sales growth in 2024, driven by strong performance across all segments and regions, with emerging markets up 12% and 45 new product launches supporting innovation.

• Integration of Novozymes and Chr. Hansen completed, forming Novonesis, with high employee engagement and 80% run rate on cost synergy program in the first year.

• Positioned as a leading biosolutions company, maintaining innovation leadership and sustainability focus, with 83% of revenue aligned with UN SDGs and 93% renewable electricity usage.

• Announced acquisition of DSM-Firmenich Feed Enzyme Alliance, expected to close in 2025, enhancing animal solutions portfolio.

• Dividend payout maintained at prior year level, with a EUR 100 million share buyback program approved for 2025.

Financial highlights

• Pro forma net sales reached EUR 3,945.5 million, up 8% organically and 5% in reported euro, with currency headwinds and divestments impacting growth.

• Pro forma adjusted EBITDA margin was 36.1% (up 2.3 percentage points year-over-year), and adjusted EBIT margin was 22%.

• Diluted adjusted EPS was EUR 1.28; adjusted for merger-related amortization, EPS was EUR 1.73 (up 15% year-over-year).

• Operating cash flow was EUR 1,032.5 million; free cash flow before acquisitions was EUR 667.5 million, up 45% year-over-year.

• Dividend proposed at DKK 4.20 (EUR 0.56) per share, maintaining a 65.1% payout ratio.

Outlook and guidance

• 2025 organic sales growth expected at 5%-8%, or 6%-9% excluding the impact of exiting Russia and Belarus.

• Adjusted EBITDA margin outlook for 2025 is 37%-38%, supported by cost and sales synergies.

• Sales synergies expected to contribute around 1 percentage point to growth, mainly in Food & Beverage, Human Health, and Agriculture, Energy & Tech.

• CapEx-to-sales ratio expected at 10%-12% to support long-term growth; net debt/EBITDA targeted at ~1.0x pre-acquisition.

• EUR 100 million share buyback program planned for 2025.