Novonesis (NSIS) Q1 2025 earnings summary

Executive summary

• Achieved 11% organic sales growth in Q1 2025, with all sales areas and geographies delivering double-digit growth, driven by volume, pricing, innovation, and synergies.

• Strong performance in both emerging (15% growth) and developed markets (9% growth), with six new biosolutions launched, especially in Household Care and Food.

• Adjusted EBITDA margin rose to 38.3%, up 3.1 percentage points year-over-year, reflecting operational excellence and cost synergies.

• Acquisition of DSM-Firmenich's share in the Feed Enzyme Alliance for EUR 1.5bn expected to close in Q2 2025, anticipated to drive further revenue and earnings growth.

• Maintains confidence in full-year outlook despite increased market uncertainty and currency headwinds.

Financial highlights

• Q1 2025 sales grew 11% organically and 12% in reported euro, with a 1% currency tailwind; net sales reached EUR 1,077.6m.

• Adjusted gross margin improved to 58.9%, up 330 basis points year-over-year, driven by lower input costs and economies of scale.

• Adjusted EBITDA was EUR 412.8m (margin 38.3%), up from EUR 339.7m (margin 35.2%) pro forma Q1 2024.

• Diluted adjusted EPS was EUR 0.42, up 27% year-over-year; adjusted EPS (excl. PPA) was EUR 0.53, up 36%.

• Operating cash flow was EUR 106.4 million, with free cash flow before acquisitions at EUR 68.1 million, down from EUR 132.4 million in Q1 2024 due to higher net working capital.

Outlook and guidance

• Full-year 2025 organic sales growth expected at 5%-8%, including a 1 percentage point negative effect from exiting Russia and Belarus; excluding exits, growth would be 6%-9%.

• Adjusted EBITDA margin guidance maintained at 37%-38%, absorbing recent currency headwinds.

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

• NIBD/EBITDA expected around 1.0x at year-end, with the dsm-firmenich acquisition to add ~1x post-closing.

• Net financial cost for 2025 now expected at EUR 50 million, improved from previous EUR 80 million guidance due to better currency hedging.