Interim report for the first half of 2018

Satisfactory first half with 4% organic sales growth

Organic sales growth of +4% in the first half (Q2: +5%): Household Care -1%, Food & Beverages +4%, Bioenergy +14%, Agriculture & Feed +3%, Technical & Pharma -6%. EBIT margin at 28.1%. FCF before acq. DKK 890 million. Net profit growth +5%. Full-year 2018 outlook maintained.

Peder Holk Nielsen, President & CEO of Novozymes: “Overall, I’m satisfied with our performance in the first half year. Bioenergy performed very well, whereas Household Care was softer than expected. Our innovation pipeline is solid, and a stronger commercial and emerging market focus is paying off. We’re launching a new, exciting product for animal health, and both our freshness & hygiene platform for laundry and the new corn inoculant are making good progress. And while uncertainty around global trade and agricultural markets persists, we remain committed to our 2018 guidance.”

Highlights 1H 2018:

• Organic sales growth of +4% (Q2: +5%) and -4% in DKK. USD/DKK decline of 10% in 1H y/y
• Organic sales growth of +4% (Q2: +5%) and -4% in DKK. USD/DKK decline of 10% in 1H y/y
  
• Growth in Food & Beverages and Agriculture & Feed; Bioenergy particularly strong
• Household Care softer than expected, as Q2 was impacted by customers’ region-specific challenges in Brazil and North America
• +7% organic sales growth in emerging markets; developed markets +2%
• Good ramp-up of recent product launches. Freshness & hygiene platform in Household Care developing according to plan with first commercial product available in stores in the Philippines. Preparation of BioAg’s B-360 corn inoculant in Q2 after regulatory approval in Q1
• EBIT margin of 28.1% (1H 2017: 27.1%; 28.5% excluding reorganization costs) impacted by currency headwind, increasing input costs and lower deferred income
• Net profit growth of +5% from lower financial costs and lower effective tax rate
• Free cash flow before acquisitions at DKK 890 million; CAPEX at DKK 635 million

Full-year 2018 outlook maintained on all parameters: Organic sales growth of 4-6% with continuing high uncertainty around global trade and agricultural markets. Household Care still expected to grow organically for the full year, supported by the freshness & hygiene platform.

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