Novonesis: Conference takeaways

Research evidence excerpt

Novonesis: Conference takeaways

Care is the major area likely

to grow below the group range because the underlying market is relatively flat. At the same

time, they offered a more constructive message on substitution potential versus recent Q1 call

message in our view: higher oil prices and volatility can accelerate customer interest in

switching part of the surfactant value chain towards enzymatic solutions, particularly where

customers value predictability and want to reduce exposure to petrochem-derived input

volatility. They also indicated that, in some cases, volatility can act as the “tipping point” that

pushes long-running projects into execution, with project timelines potentially compressing to

months where customers are highly motivated and process changes are manageable.

4) Capex remains elevated but is positioned as growth-led; flexibility is the key mitigant

on returns: Management framed elevated capex primarily as an offensive choice to avoid

becoming capacity-constrained in a high-margin, high-stickiness model. They reiterated that

they are “building for the upper end” of growth outcomes, arguing the greater risk is not being

able to fulfil demand (and therefore missing high-margin growth) rather than temporarily

overbuilding capacity. They also stressed that much of the asset base is inherently flexible:

within enzymes, upstream fermentation is largely agnostic to the end-market served, and

switching can be done relatively quickly because production is batch-based (weeks, not

quarters). The constraint tends to be more in downstream processing requirements (e.g., food-

grade vs industrial purification). This flexibility, alongside a broad global manufacturing

network, is positioned as a structural mitigant to utilisation risk and a reason management is