Novozymes Says BioAg Alliance with Monsanto Off to Strong Start

Posted by Jackie Pucci|20 January 2015

Danish biologicals company Novozymes on Tuesday highlighted strong performance by the BioAg Alliance, its collaboration with Monsanto to improve soil health and harvest through naturally-occurring microorganisms, in its fourth-quarter and full-year earnings report.

CEO Peder Holk Nielsen said, “Our growth platforms showed good progress, and in particular I’m excited about how well The BioAg Alliance has gotten off the ground. Novozymes is in a strong position today. Our technologies and solutions are in high demand. Going forward, we believe partnering will become more important for bringing innovation to customers.”

Novozymes’ overall sales growth in 2014 was in line with expectations. Organically, sales grew by 7%, with a 4% increase in the fourth quarter.

The 2015 outlook is positive, Novozymes said. Organic sales growth is expected to be 7% to 9%. Currencies provide a positive tailwind, and sales in Danish kroner are expected to increase by 13-15%. Looking ahead through 2020, Novozymes targets annual organic sales growth of 8% to 10% on average, an EBIT margin of ≥ 26% and ROIC including goodwill of ≥ 25%.

Monsanto, which began expanding its microbial portfolio last year with its acquisition of biotech company Agradis Inc. and Novozymes entered into the strategic alliance in December 2013. Microbial solutions form a significant part of the $2.3 billion agricultural biologicals industry, which has posted mid-teens sales growth each of the last several years, according to Monsanto. Microbial-based solutions are derived from various naturally-occurring microorganisms such as bacteria and fungi. They can protect crops from pests and diseases and enhance plant productivity and fertility, and have faster development cycles compared with other agricultural innovations, as well as broad geographic and crop applicability.