Novonesis Raises Guidance and Launches First-Ever EUR 1 Billion Buyback as Food & Beverage Growth Broadens Beyond Dairy
H1 2026 results call, August 20, 2026
Novonesis delivered 8% organic sales growth in the first half of 2026 and used the print to raise full-year guidance to 7% to 8%, while simultaneously announcing its first-ever share buyback program, a EUR 1 billion commitment to be executed through 2029. The combination marks a notable inflection in capital allocation for the enzymes and biosolutions group, formed from the 2023 merger of Novozymes and Chr. Hansen, as management signals confidence that its multi-year CapEx surge is now paying off and that leverage has come down enough to return cash to shareholders.
Capital allocation shift: buyback signals CapEx payoff is real
CFO Rainer Lehmann was explicit that the buyback should be read as confirmation that the company's elevated investment cycle is temporary and generating returns. "We pointed out several times that the elevated CapEx is temporary, right? That's really the next two years. By 2030, we're going to go into high single digit," he said, adding that the buyback "will still leave room to deleverage" and fund continued bolt-on M&A in the EUR 100 million to EUR 200 million range. Net debt-to-EBITDA is expected to end the year around 1.8 times, trending toward 1.7 times, still above the roughly 1.5 times target corridor, giving the company room to keep buying back stock while deleveraging. Lehmann noted the buyback will be "more loaded towards the second half" of the multi-year window given continued heavy CapEx in the near term. CapEx is expected to run 12% to 14% of sales in both 2026 and 2027 before normalizing to a high single-digit level by 2030, as the company builds out U.S. culture capacity, a new large-scale multipurpose enzyme facility in emerging markets, Thailand HMO capacity, and a new ERP system.
Food & Beverage strength is no longer just a dairy story
Perhaps the most important operational signal from the quarter is that Food & Beverage's 11% growth in both the first half and the second quarter is now broad-based across baking, beverages, meat and plant-based solutions, not concentrated in dairy as it had been in prior periods. CEO Ester Baiget attributed this to the payoff from combining enzymes and cultures under one commercial roof following the merger. "There is an underlying drive... two underlying drivers of why that pull is very strong. Our biosolutions enable lower cost, higher productivity, savings, higher yields and differentiated claims, cleaner label, healthier foods, higher protein. The demand and the pull for those ones has never been that strong, and we are the company who is best positioned to make it happen," she said. Dairy momentum itself remains solid, aided by GLP-1-linked demand for high-protein and probiotic products and continued conversion to the company's DVS format in cheese.
Household Care posts 12% growth but flags softer comparables
Household Care grew 8% in the first half and 12% in the second quarter, though management was careful to attribute a meaningful part of the acceleration to a softer year-ago comparable rather than a step-change in underlying demand. Growth is being driven by penetration gains in both emerging and developed markets, supported by the roughly 400 commercial hires added last year, two-thirds of them in emerging geographies. Management said it is too early to see any pull-through from higher oil prices or raw material availability dynamics into detergent enzyme demand, despite active dialogue with customers on that front.
Human Health is the soft spot, dragged by North American supplements
Human Health grew just 4% in the first half, and management guided to only slight growth for the full year, with dietary supplements in North America the clear drag amid what Baiget called a "temporarily cautious" consumer. HMO (human milk oligosaccharide) sales continue to grow strongly, including cross-border trade into China, and now represent roughly 10% of the Human Health division, though the business remains dilutive to group margin until it scales further. Advanced Protein Solutions grew alongside its anchor customer. On whether growth in probiotic-fortified dairy is cannibalizing dietary supplement demand, Baiget said the two are not meaningfully connected, calling the North American supplements softness "an isolated case" rather than a structural shift, and pointed to a new joint project with Novo Nordisk evaluating synbiotic effects in GLP-1 patients as evidence of a strong future pipeline in the category.
MicroBioGen buyout deepens yeast and biofuel vertical integration
Novonesis is acquiring the remaining 77% of MicroBioGen, a yeast technology company in which it has held a minority stake since 2013. Lehmann described the deal as "a vertical integration at the end of the day" within biofuels, one that will be "slightly accretive to the margin" and adds proprietary yeast capabilities the company did not previously fully control. It is the kind of bolt-on technology deal management says will continue alongside the buyback and organic reinvestment as the three pillars of capital deployment.
Energy and agriculture: E15 optionality not baked into guidance
Agriculture, Energy and Tech grew 6% in the first half, led by double-digit energy growth in Latin America, Asia Pacific and North America on rising corn ethanol production and export demand, while the agriculture sub-segment was hit by weak U.S. farm economics. On the prospect of year-round E15 ethanol approval in the U.S., which has passed the House and faces a Senate hearing this fall, Baiget was clear that the company is not underwriting any potential upside in its plan. "It's not part of what we have in our growth projections. It's not included in the long-term financial plan," she said, pointing instead to broader global biofuel blending momentum in Brazil (moving to E30 and trialing E32), India, and Southeast Asia as more durable growth drivers tied to energy security rather than single-country regulatory catalysts.
Management pushes back on "too good to be true" growth skepticism
Asked directly by JPMorgan's Chetan Udeshi how the company would address investor concern that its growth run is unsustainable, Baiget offered a direct defense rooted in reinvestment intensity: "Biosolutions are the building block of how the world will produce and consume in the future... The best thing I can do [is] continue to deliver, continue to show you it's true, continue to make that trend and make it obvious for everybody." The company continues to invest roughly 10% of revenue in R&D and has added significant commercial headcount, arguing that sustained investment, not one-off tailwinds, underpins the growth. Investors will note that operating expenses grew high-single-digit organically in the half, roughly in line with the sales acceleration, lending some support to the argument that growth is being purchased through deliberate reinvestment rather than pure operating leverage.
Guidance mechanics: tariffs and comps temper second-half growth
Despite the raised full-year range, management flagged several factors that will mechanically soften second-half growth relative to the first half's 8% pace, including a roughly 40 basis point drag from reimbursing U.S. tariffs to customers in the second half, tough year-on-year comparables in the third quarter, and the unwind of a one-time inventory buildup at a key animal feed customer that boosted the first quarter. Lehmann confirmed the tariff reimbursement is neutral to absolute EBITDA despite weighing on organic sales growth optics, since it flows through as a credit against revenue rather than an expense line.
Feed Enzyme Alliance integration on track after one year
One year after closing the Feed Enzyme Alliance acquisition, Lehmann confirmed the deal is delivering on its original targets of roughly 3 percentage points of revenue contribution and EUR 70 million of EBITDA. "We are actually there. That is I would still consider it as in line," he said, with the animal health business performing well and margin accretion visible within the Planetary Health division.