Danish Novozymes adjusts long-term financial targets

21 January 2013 14:05  [Source: ICIS news]

LONDON (ICIS)--Novozymes has adjusted its long-term financial targets to reflect an improved visibility regarding future sales growth drivers and earnings capacity, the Danish industrial enzyme producer said on Monday.

The company said it previously excluded future sales of enzymes for biomass conversion from its long-term sales targets, adding that there is now better visibility regarding growth opportunities in this emerging field.

For the next five years, the group’s annual earnings before interest and tax (EBIT) margin is expected to remain over 24%, up from the 23-24% growth previously estimated. The group also expects an annual return on invested capital of more than 22% over the period.

Novozymes' organic sales growth is expected to increase to 5-8% annually until 2015, up from a previous outlook of 4% growth announced on 25 October 2012. Novozymes said that it is targeting average yearly organic sales growth of more than 10% from 2015 onwards, following a ramp-up from current levels.

In 2013, the group also expects net profit to grow by 6-9%, up from a previously estimated 5-7%; however sales growth in Danish Kroner (DKr) is expected to be 4-7%, down from 7% previously estimated.

Steen Riisgaard, president & CEO, said: “With 2012 behind us, we have reviewed our long-term growth scenarios and decided to adjust our long-term financial targets.

“We are still confident that we can reach the long-term average sales growth target of more than 10%, although not until 2015. Meanwhile, profitability will remain at current levels, and we are raising our target for EBIT margin to more than 24%,” he added.

The long-term targets are based on the assumptions that the global economy stabilises, the biofuel market in the US moves toward E15 (15%-ethanol blended gasoline), and that Novozymes will sell enzymes to at least 15 biomass conversion plants by 2017, with a ramp-up in 2015-2016. The targets are also contingent upon no major acquisitions being made, the company said.

Novozymes’ net profit in 2012 totalled DKr2.02bn ($360m, €271m) an increase of 10% compared with 2011 as a lower tax rate had a positive impact. The groups’ total sales in 2012 were DKr11.2bn, an increase of 7% compared with 2011, with exchange rates having a positive impact.

In related news, Novozymes’ board of directors has appointed Peder Holk Nielsen as its new president and CEO with effect from 1 April 2013. Nielsen will succeed Steen Riisgaard, who steps down after 12 years at the company’s top post.

($1 = €0.75, $1 = DKr5.61, €1=DKr7.46)

By: Franco Capaldo
+44 (0)20 8652 3214

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