Novozymes, the world's largest producer of industrial enzymes, today announced its results for the first half of 2014. Organically, sales grew by 8% (4% DKK, 8% LCY). Sales growth slowed down during the period as expected after a strong first quarter and due to a higher comparable level in the second quarter.

EBIT grew by 19%, and the EBIT margin increased by 3.5 percentage points to 28.1%. The higher EBIT margin was driven by a one-time positive impact of roughly 2 percentage points from The BioAg Alliance and a significant improvement in underlying earnings. Free cash flow came in strongly at DKK 3,417 million due to the positive one-time impact from The BioAg Alliance and a relatively low level of CAPEX in the period.

The full-year sales growth outlook is maintained. Full-year expectations for EBIT and net profit growth are increased to 9-11%, up from 8-10%. Expectations for ROIC, including goodwill, are adjusted to ~22%, up from 21-22%. Lastly, expectations for free cash flow are revised upward by DKK 500 million, mainly as a result of lower expectations for net investments in 2014 and a higher positive impact from The BioAg Alliance.

"It's been a good first half for Novozymes", says Novozymes CEO Peder Holk Nielsen. "Sales growth was in line with expectations and earnings were strong. For the full year, we maintain our outlook for sales growth, and profit is now expected to come in a little better than what we thought back in April. Looking beyond the financial performance, we've seen good progress in our innovation pipeline and portfolio of growth platforms in the first half of the year. In the second half, we'll continue to concentrate our efforts on advancing both to further strengthen our ability to deliver double-digit sales growth."