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Novonesis AS Class B NSIS B

Morningstar Rating
DKK 428.70 −6.70 (1.54%)
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Company Report

Novonesis: Quarter Has In-Line Organic Sales Growth Delivery, Stellar Performance in Household Care

Wide-moat Novonesis reported first-quarter 2024 organic revenue growth of 4%, in line with company-compiled consensus. The composition of growth from a segment perspective was slightly different, however, with stronger-than-expected 15% like-for-like growth for the householdcare business area, offset by a weaker-than-expected 5% decline for the human health business area. The strong growth in household care sales was attributed to the increasing penetration of enzyme solutions in emerging markets and to innovation. The decline in human health sales was mainly attributed to demand weakness for dietary supplements and early-life nutrition solutions, similar to dynamics reported by wide-moat DSM-Firmenich. Still, management indicated that momentum is improving going into the second quarter and confirmed a full-year outlook for organic revenue growth between 5% and 7% and adjusted EBITDA margin of around 35%. We increased our fair value estimate by 4% to DKK 410 after rolling and updating our model with the recently released pro forma numbers. Our 2024 forecast calls for organic sales growth of 5.5% and an adjusted EBITDA margin of 35%. Our long-term forecast is broadly unchanged, assuming around 6% organic revenue growth on average for the next decade and a midcycle adjusted EBIT margin of 31%/adjusted EBITDA margin of 39%.

Price vs Fair Value

NSIS B is trading at a 844% premium.
Price
DKK 435.40
Fair Value
DKK 752.00
Uncertainty
Medium
1-Star Price
DKK 151.90
5-Star Price
DKK 991.00
Economic Moat
Yjgy
Capital Allocation
Qlbdjfjw

Bulls Say, Bears Say

Bulls

Novonesis holds a dominant market position in enzymes and cultures, with a near-50% market share in both, supported by an enviable portfolio of patents and unmatched library of strains and enzyme classes.

Bears

Novonesis' core markets offer relatively low growth prospects, which means the company is now relying more on new markets and inorganic growth initiatives.

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Trading Information

Previous Close Price
DKK 435.40
Day Range
DKK 426.40434.70
52-Week Range
DKK 274.60438.00
Bid/Ask
DKK 428.70 / DKK 429.20
Market Cap
DKK 199.07 Bil
Volume/Avg
608,146 / 655,159

Key Statistics

Price/Earnings (Normalized)
34.82
Price/Sales
6.76
Dividend Yield (Trailing)
1.42%
Dividend Yield (Forward)
1.42%
Total Yield
1.42%

Company Profile

Novonesis was formed in 2024 through the merger of Novozymes and Chr. Hansen. Following the merger, the company is the world leader in industrial enzymes and microbial solutions, with a near-50% market share in both. The firm supplies a wide range of industry groups: household care, food and beverages, bioenergy, agriculture and feed, technical and pharmaceuticals. Its biological solutions create value for its customers by improving yield efficiency and performance, while saving energy and generating less waste. The company is headquartered in Denmark, employs around 10,000 people, working across more than 30 research and development and application centers and 23 manufacturing sites.
Sector
Basic Materials
Industry
Specialty Chemicals
Stock Style Box
Large Growth
Total Number of Employees
6,756

Competitors

Valuation

Metric
NSIS B
IFF
DSFIR
Price/Earnings (Normalized)
34.8238.1666.43
Price/Book Value
8.641.771.25
Price/Sales
6.762.222.38
Price/Cash Flow
28.0224.2824.18
Price/Earnings
NSIS B
IFF
DSFIR

Financial Strength

Metric
NSIS B
IFF
DSFIR
Quick Ratio
0.760.751.20
Current Ratio
1.301.681.96
Interest Coverage
23.08−5.87−3.42
Quick Ratio
NSIS B
IFF
DSFIR

Profitability

Metric
NSIS B
IFF
DSFIR
Return on Assets (Normalized)
11.42%1.21%1.31%
Return on Equity (Normalized)
23.56%2.46%2.01%
Return on Invested Capital (Normalized)
19.08%2.46%1.93%
Return on Assets
NSIS B
IFF
DSFIR
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