Danish Novozymes 2014 net profit rises 15% on higher sales

LONDON (ICIS)–Novozymes reported an annual increase in net profit of 15% to Danish kroner (DKr) 2.53bn ($341m) in 2014 on higher sales of DKr12.5bn, up 6% year on year, the Danish enzyme producer said on Tuesday.

Earnings before interest and taxes (EBIT) grew 17% to DKr3.38bn, resulting in an EBIT margin of 27.2% (up from 24.7% in 2013).

Novozymes said EBIT growth had driven net profit, although an increase in tax of around DKr200m did have a negative impact . The group’s effective tax rate in 2014 was 23.0%, against 20.2% in 2013 due to a lower benefit from a US Advanced Energy Manufacturing tax credit relating to its plant in Nebraska.

Peder Holk Nielsen, president and CEO of Novozymes, said: “2014 was a good year for Novozymes with 7% organic sales growth and a record EBIT margin. Bioenergy was the strongest growth driver, making up for slower growth in Food & Beverages and Household Care.”

“Long-term organic sales growth is expected to be slightly lower than the previous target, whereas we increase the long-term targets for EBIT margin and return on invested capital. In the midst of a slow recovery and volatile markets, we expect 2015 to be another good year for Novozymes,” he added.

In 2015, on the sales side, Novozymes expects organic sales growth of 7-9% and based on exchange rates on 19 January 2015, sales growth in DKr is expected to be 13-15%.

EBIT growth, meanwhile, this year is expected to be 12-14%, while net profit is expected to grow by 10-12%.

On Tuesday, Novozymes also outlined a strategy focused on partnerships to improve its innovation and updated long-term targets.

Through 2020, Novozymes targets annual organic sales growth of 8-10% in local currency on average (replacing a previous target of 10%) and an EBIT margin of 26% or more (replacing a previous target of 24% or more).

The company also published long-term operational targets for sustainability by 2020. This includes a 30% improvement in energy efficiency over 2014, a 25% improvement in water efficiency, a 25% reduction in CO2 intensity and 30% of its energy to come from renewable sources.

In addition, a new stock buyback program worth up to DKr2bn is set to run in 2015, it added.

Novozymes corporate headquarters

($1 = DKr7.43)