Biopharma sales affected by variations in sales patterns
Novozymes, the Danish specialist in biotech-based enzymes and micro-organisms, has reported 9% sales and operating profit growth in the first six months of 2011.
Total sales were DKK5.3bn (US$1.01bn; €711m; £625m) compared with the same period last year, with acquisitions contributing approximately 5 percentage points to growth. EBIT was DKK1.2bn. Net profit was DKK946m, an increase of 15%.
Biopharma sales were down by 38% compared with the first half of 2010, mainly as the result of substantial quarterly variations in sales patterns. The firm said a broad customer and application base is needed to secure a more stable and increasing revenue stream. The potential spin-off or sale of the firm’s antimicrobial peptide (AMP) Pharma projects is ongoing.
Sales of micro-organisms were up by 80% compared with the first six months of 2010, positively impacted by the acquisitions of EMD/Merck Crop BioScience and Turfal of Brazil. Sales to wastewater and cleaning solution industries performed well.
‘l'm satisfied with the half-year results, and although we're seeing increasing general uncertainty concerning the global economic situation and increased volatility in our end markets, we’re able to maintain our sales and earnings growth guidance for the full year,’ said Novozymes’ chief executive Steen Riisgaard.
With the expectation of a stable cash flow improvement over the next couple of years, Novozymes has decided to initiate a stock buyback programme and to gradually increase the dividend payout ratio, both starting in 2012.
To secure liquidity and to make Novozymes’ stock more accessible to retail shareholders, it has been decided to make a 1:5 stock split, expected to be effective as of 1 December.
For the full year, sales growth is expected to be between 7–10%, the EBIT margin expectation is maintained at around 22% and net profit at 10–13%.