Novonesis Earnings: Solid Performance Leads to Another Guidance Increase
Wide-moat Novonesis delivered solid first-half results with organic pro forma sales growth of 7% and adjusted EBITDA margin of 35.3%, 150 basis points ahead of last year. Management once again raised its full-year guidance; it now expects organic sales growth of 7%-8% (from the upper end of 5%-7% previously) and adjusted EBITDA margin of 35.5%-36.5% (from 35%-36% previously). This update comes less than three months after the prior guidance increase at the capital markets day on June 17. Second-half gross margin is expected to be stronger than the first half, supported by lower input costs and energy prices, cost synergies, and pricing actions. Our full-year forecast already assumes adjusted EBITDA margin of 36%, the midpoint of the new guidance. Therefore, we don’t expect to make a material change to our forecast, and we confirm our DKK 420 fair value estimate. We believe the shares are currently fairly valued.
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