Novonesis A/S Earnings Call Highlights Growth and Challenges

Novonesis A/S – Adr ((NVZMY)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call of Novonesis A/S – Adr painted a largely positive picture for the company, showcasing strong organic growth and a promising pipeline of innovative products. The discussion highlighted significant achievements in emerging markets and product development, though it also acknowledged challenges such as currency headwinds and a decline in the Beverage segment.

Strong Organic Sales Growth

Novonesis reported an impressive organic sales growth of 8% for the first nine months of 2025, with a 6% increase in the third quarter alone. This growth was primarily volume-driven and broad-based, reflecting the company’s strategic focus on expanding its market reach and enhancing product offerings.

Emerging Markets Performance

Emerging markets were a standout performer, achieving a remarkable 12% growth. This surge was attributed to Novonesis’s increased local presence and tailored solutions, allowing these markets to significantly outpace developed regions.

Adjusted EBITDA Margin Improvement

Despite facing substantial currency headwinds, Novonesis improved its adjusted EBITDA margin to 37.3% for the first nine months, marking a 1.3 percentage point increase from the previous year. This improvement underscores the company’s operational efficiency and cost management strategies.

Innovative Product Launches

The launch of 19 new Biosolutions in 2025 was a key highlight, with these high-performance solutions driving substantial growth across various industries. This innovation pipeline is a testament to Novonesis’s commitment to research and development.

Cash Flow and Earnings Growth

Novonesis’s financial health was further bolstered by a 16% increase in free cash flow before acquisitions, reaching EUR 668 million. Additionally, diluted adjusted earnings per share rose by 20%, reflecting the company’s strong profitability.

Negative Impact from Country Exits

The decision to exit certain countries had a negative impact on organic sales growth, reducing it by approximately 1 percentage point over the first nine months and by 2 percentage points in the third quarter. This strategic move, while challenging, is part of Novonesis’s broader realignment efforts.

Currency Headwinds

Currency fluctuations posed a significant challenge, creating a 3 percentage point headwind in sales and affecting the adjusted EBITDA margin by about 1 percentage point. This highlights the ongoing volatility in global markets and its impact on financial performance.

Beverage Segment Decline

The Beverage segment faced a decline, primarily due to lower end market volumes. Despite efforts to enhance penetration and introduce next-generation solutions, this segment struggled to maintain its growth trajectory.

Forward-Looking Guidance

Looking ahead, Novonesis has revised its organic sales growth expectation for the year to 7% to 8%, with anticipated mid-single-digit growth in the fourth quarter. The adjusted EBITDA margin is projected to be at the lower end of the 37% to 38% range. Strategic investments in emerging markets and the recent acquisition of the Feed Enzyme Alliance are expected to drive future growth.

In summary, Novonesis A/S – Adr’s earnings call conveyed a positive outlook, underpinned by robust growth in emerging markets and a strong product pipeline. While challenges such as currency headwinds and segment declines were acknowledged, the company’s strategic initiatives and financial performance provide a solid foundation for continued success.