The Danish company, which also supplies ingredients into sectors such as household care, booked an 8% organic growth rate at its food and beverage unit. Including currency exchange, sales were up 10% in the division, Novozymes revealed.
The company revealed that its food and beverage growth was broad-based, with nutrition, starch and beverages contributing “the most” in the first half. Baking performed “very well" in the second quarter, Novozymes added.
For the remainder of the year, Novozymes said food and beverage organic sales growth is expected to be driven by new products launched in the grain-processing industry.
“Baking is still expected to be impacted by price reductions in the North American fresh keeping market, while sales are expected to perform well in other markets,” the company said in a regulatory filing. “We are encouraged by the strong first-half performance and are optimistic about the year, while still acknowledging that it may be difficult to maintain the high growth level for the rest of the year.”
Food and beverage growing ahead of group
Food and beverage sales are growing ahead of the rest of the company.
In the six-month period, total sales increased 3% to €978.9m (DKK7.28bn). Operating profit was also up 3% to €264.9m (DKK1.97bn). Net earnings remained relatively flat at €201.7m (DKK1.5bn) compared to €200.3m (DKK1.49bn) in the comparable period of 2016 due to higher financial costs, which were partially offset by lower tax expenses.
Peder Holk Nielsen, president and CEO, commented: “Overall, the first half was good and better than expected. We had growth in the large segments and delivered 3% organic sales growth with a strong EBIT margin, excluding one-offs. We made important advances in our innovation pipeline within grain milling, vegetable oil and household care opening up new market segments. We should see growth pick up in the second half of the year, but also acknowledge the risk of agriculture-related markets changing swiftly. Consequently, we maintain our full-year expectation for organic growth, while DKK expectations have been adjusted to reflect weaker currencies.”