Novonesis A S

Ladies and gentlemen, welcome to the NovoNazis Q1 2025 conference call. I am Healy, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Tobias Cornelius Björklund, head of investor relations. Please go ahead.

Thank you very much, operator, and welcome everyone to the NovoNesis conference call for the first quarter of 2025. My name is Tobias Björklund, and as I said, I'm heading up our investor relation activities here at NovoNesis. In this call, our CEO, Esther Baggett, and our CFO, Rainer Lehmann, will review our performance for the year, as well as the outlook for 2025. Also attending today's calls are Amy Byrick, EVP of Human Health BioSolutions, Tina Feiner, EVP of Planetary Health Biosolutions, and Klaus-Krone Fuglsang, Chief Scientific Officer. The conference call will take about 45 minutes, including Q&A. Please change to the next slide. And this is, as usual, a slide where I would like to remind you that the information presented during the call is unaudited, and that management may make forward-looking statements. These statements are based on current expectations and beliefs, and they involve risks and uncertainties that could cause actual results to differ materially from those described in any forward-looking statement. With that, I will now hand you over to our CEO, Esther Baggett. Esther, please.

Thank you. Thank you, Tobias. And welcome, everyone. Thank you for joining us in this morning. If you could please turn to slide number three. Thank you. We continue to build on the strong 2024 performance. And here in the first quarter of 2025, we delivered a strong 11% organic sales growth. We execute swiftly across our well-diversified business, both geographically and industry-wise. The performance was very much in line with expectations and all our four sales areas delivered double-digit organic sales growth. We delivered around 10% volume growth and pricing contributed around 1%. Sales synergies are well on track and contributed close to one percentage point. Emerging markets were particularly strong at 15% growth and developed markets were also up 9%. We launched six new biosolutions in the quarter, predominantly in household care and in food, and we expect further acceleration of launches during the coming quarters. Over the last month, the geopolitical environment has been dynamic. Our regional presence and diversified end-market exposure, including our ability to pass on incremental costs driven by tariffs, enables us to effectively deal with changes in the markets. As such, net, we expect no or only marginal impact from current trade tariff levels. The strong sales growth coupled with cost synergies and operational excellence led to 38.3% adjusted EBITDA margin for the quarter, an increase of 3.1 percentage points compared to last year. In February, we announced the acquisition of DSM-Furmanix part of the Feed Enzyme Alliance, unlocking further value in a core business. We now expect to close this deal in the second quarter of 2025, allowing us to drive the full value chain in animal biosolutions, delivering a stronger revenue growth and earnings accretion for NovoNesis. We recently announced Andrew Taylor as the new executive vice president for our food and beverages business. He brings deep industry knowledge, a strong commercial expertise, and a proven history of driving growth. Andrew will join us no later than September 1st, and we're excited to welcome him to the team. All in all, we have a very strong start to 2025. While we recognize the increased level of market uncertainty, we remain well positioned for growth and strong margin expansion. We are confident, confident in the full year outlook with 528 organic sales growth, which includes around one percentage point negative effect from the exit of Russia and Belarus for the legacy Christian Hansen business. The adjusted EBITDA margin is still expected to be between 37% to 38%, despite recent currency headwinds. Our performance for the year continues to be supported by a resilient and well-diversified portfolio of buyer solutions across more than 30 end markets, combined with a strong focus on customer centricity, state-of-the-art innovation capabilities, and a unique scalable production setup. Let us now dive into the solutions performance in more detail, into the regional performance in more detail, starting with food and health biosolutions. Could you please turn to slide number four? Thank you. The Food and Health Biosolutions Division delivered 12% organic sales growth in the first quarter of 2025. The adjusted EBITDA margin was 37%, an increase of 3.8 percentage points. For 2025, we continue to expect this division to deliver organic sales growth within the same range as for the group, with relatively stronger growth in human health. Please, turn to slide number five for food and beverages. Thank you. Food and beverages delivered 11% organic sales growth in the first quarter of 2025. This was mainly driven by volume, while pricing contributed positively in line with group level. Growth was strong and broad-based across geographies and industries. Growth in dairy was driven by both, fresh dairy and cheese, supported by a healthy underlying market, upselling, and a strong customer adoption of innovation. Dairy growth was anchored across all regions. In fresh dairy, we see an increasing demand for our tailored solutions in the high protein space, as well as in bioprotection. Cheese is benefiting from good momentum in conversions and adoption of solutions for productivity improvements. Baking delivered a strong performance and benefited from increased penetration and innovation. For the remaining industries in food and beverages, the strong development was led by meat as well as plant-based solutions. synergies contributed to growth in line with expectations, supported by increased commercial scale across food and beverages. In Dairy, I would like to highlight the solid traction we see on bringing further productivity and performance improvements to customers through a broad set of enzymatic solutions. For instance, our Spice IT and yield max solutions allow customers to drive higher efficiency and yield. And the pipeline of new solutions continue to look very solid. Growth in 2025 in food and beverages is expected to be driven by all industries, including a positive impact from synergies. Momentum is expected to continue to be strong and only partially impacted by the exit from certain countries during the second quarter for the legacy Christian Hansen business. The exit of those countries is expected to impact full year organic sales growth in food and beverages by around three percentage points. Please, turn to slide number six. Thank you. Human health delivered 13% organic sales growth in the first quarter of 2025. Growth was mainly volume driven. The release of deferred revenue contributed around one percentage point to the growth. The development was driven by strong performance in dietary supplements in both North America and in Europe. Performance in advanced health and nutrition was driven by advanced protein solutions as we continue to scale the supply to our Anchor customers. solutions for early life nutrition were softer, impacted by timing. Synergies contributed positively to growth, as we begin to see the impact of cross-selling strains and solutions into new channels. For 2025, growth in human health will be driven by a continued positive momentum in dietary supplements, supported by a positive impact of cross-selling synergies, and by advanced health and nutrition, including the ramp-up in sales, of advanced protein solutions to our ANCOR customer. The full revenue is going to continue to contribute around one percentage point to the growth for the sales area. The exit of Russia and Belarus is expected to impact fully organic sales growth in human health by around one percentage point. Could you please turn to slide number seven? Thank you. Planetary Health BioSolutions delivered 11% organic sales growth in the first quarter of 2025, and the adjusted EBITDA margin was 39.4%, an increase of 2.7 percentage points. For 2025, we expect this division to deliver organic sales growth in the same range as for the group, with relatively stronger growth in agricultural, energy, and tech. Please turn to slide number 8. Household care delivered 12% organic sales growth in the first quarter of 2025. Growth was mainly volume-driven, with a positive contribution from price, on par with the group level. The strong development was anchored across both developed and emerging markets through increased penetration and innovation. Emerging markets saw a relatively stronger development where our increased local presence enables us to drive faster penetration as we are offering more value to our customers through innovation tailored for their specific needs. Additionally, growth in the first quarter was supported by timing. During the quarter, we launched two new protease solutions enabling superior strain removal at low temperatures, coupled with increased formulation and format flexibility for our customers. After a very strong 2024 and start to 2025, we expect growth in household care to normalise. Key goal drivers continue to be innovation, increased penetration in both developed and especially emerging markets, as well as continued support from pricing and industry volume growth. at a more normalized level. Especially for the US market, where the detergent category is more sensitive to down trading, we're currently not seeing changes to consumer order patterns. However, our expectations, we have included a more careful view for the full year development. Please turn to slide number nine. Thank you. Agricultural energy and tech deliver organic sales growth of 10% in the first quarter of 2025. This was driven by double digit growth in energy and tech and supported by agricultural. Growth was driven mainly by volume and pricing contributed positively in line with the group. Growth in energy was led by Latin America and India, driven by capacity expansion of corn-based ethanol production and supported by the ramp up of volumes for second generation ethanol. Performance in North America was driven by increased penetration of innovation, supported by growth in ethanol production. Additionally, biodiesel contributed positively. The strong performance in tech was driven by bioprocessing, led by increased demand for solutions for biopharma production. as well for oils and fats. Growth in agricultural was driven by plant, while animal was negatively impacted by timing. Overall, for the sales area, synergies contributing to growth in line with expectations. For 2025, growth in agricultural, energy, and tech is expected across all industries, supported by a positive impact from synergies mainly in agricultural. Growth is expected to be led by energy driven by continued capacity expansion in emerging markets and penetration of innovation in North America. Our expectations include the recently updated external forecast for US ethanol production in 2025, which has been lowered from around 1% growth to now flat. Now, let me hand over to Rainer for a review of the financials and the outlook for 2025. Rainer, please.