Novozymes Reports 10% Growth in Net Profit, Names Nielsen as New President & CEO

For 2013, the EBIT margin is expected to remain at its current high level, while organic sales growth is expected to increase to 5-8%. Long-term financial targets adjusted to reflect high profitability and timing of sales growth.

 

In 2012: 

• Sales grew by 7% in DKK, 3% in LCY and 4% organically vs. 2011 

• The gross margin was 57.2%, 1 %-point up on 2011 

• EBIT was DKK 2,745 million, an increase of 17% compared with 2011 

• The EBIT margin was 24.4%, 2.1 %-points up on 2011 

• Net profit was DKK 2,016 million, an increase of 10% compared with 2011 

• Free cash flow before acquisitions was DKK 1,581 million, vs. DKK 1,393 million for 2011 

• ROIC (including goodwill) was 19.9%, against 21.3% for 2011 

 

“We delivered strong earnings growth and record profitability in a year when organic sales growth was challenged and came in at 4% – below our ambition,” says Steen Riisgaard, President & CEO. “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%. The ROIC target is confirmed as more than 22%. The company’s strategy is unchanged and, under the leadership of the new President & CEO Peder Holk Nielsen, Novozymes will continue to focus on innovation, partnerships and sustainability.”

 

Food & Beverages Enzymes sales increased by 5% in DKK and by 1% in LCY compared with 2011. Sales of enzymes for the production of healthy foods were the strongest contributor to sales growth in 2012. Sales to the starch and baking industries were roughly flat, while sales to the beverage alcohol industry were lower than in 2011. 

 

Feed & Other Technical Enzymes sales were up by 7% in DKK and by 3% in LCY compared with 2011. Enzyme sales to the animal feed industry were the main growth driver as a result of a continued increase in sales of RONOZYME ProAct on the Latin American, Asian and European markets as well as improved phytase enzyme sales. Enzyme sales to the other technical industries, including the textile industries, were lower than in 2011.  

 

It was also announced that the Board of Directors of Novozymes has appointed Peder Holk Nielsen as President and Chief Executive Officer with effect from April 1, 2013.

 

“I am pleased to announce that Peder Holk Nielsen will succeed Steen Riisgaard as President and Chief Executive Officer,” says Henrik Gürtler, Chairman of the Board at Novozymes. “Peder Holk Nielsen’s ability to couple market insight and research capabilities is key to deliver innovation and to continue our growth strategy. He was a clear first choice in our international search process. I thank Steen Riisgaard for his 12 years of successful leadership in building the company, and I am sure that Peder Holk Nielsen will ensure the continued expansion of our position as world leader in bioinnovation.” 

 

Peder Holk Nielsen, 56, has played a central role in the development of Novozymes in its current form. He is currently serving as Executive Vice President and head of Enzyme Business, a position he has held since 2007. Prior to this, Peder Holk Nielsen’s career spans management positions in Novozymes and Novo Industri/Novo Nordisk across business development, R&D, quality management and sales & marketing.

 

Peder Holk Nielsen holds a M.Sc. and Ph.D. in Chemical Engineering from Technical University of Denmark and a B.Com. in International Business Management from Copenhagen Business School. Peder Holk Nielsen is also member of the Board of Directors of Hempel A/S and of LEO Pharma A/S. 

 

“I look forward to leading Novozymes and our 6,000 fantastic colleagues,” says CEO-elect Peder Holk Nielsen. “With our sustainable solutions and close customer relationships, we have a very strong position for expanding our business, and I am convinced we will deliver on our long-term growth targets in the coming years. I am happy that all EVPs in the current executive management will continue in the new leadership team”.

 

Steen Riisgaard steps down after 12 years at the company’s top post and 33 years in Novozymes and Novo Industri/Novo Nordisk. 

 

“It has been 12 fantastic years and a privilege to lead Novozymes in becoming the leading global provider of enzymes, and now it is time to pass the baton,” says Steen Riisgaard, President and CEO of Novozymes. “The Board’s appointment of Peder Holk Nielsen is a testimony to our success and strategic direction, and I sincerely congratulate him.”

 

Since 2000, the company has delivered average annual growth rates of 7-8% and increased returns of invested capital from 10% to 20%. Novozymes today holds 47% of the global market for industrial enzymes and spearheads the increasing use of microorganisms and industrial biotechnology products across a range of industries.

 

Novozymes executive management will organize into a functional structure with all current Executive Vice Presidents and joined by Andrew Fordyce. Today VP of Sales and Customer Solutions, Andrew Fordyce, 49, has been with the company since 1993, holding positions in commercial operations, R&D and production in Denmark, Switzerland and the US. 

 

? President & CEO: Peder Holk Nielsen

? Business Development: EVP Thomas Videbæk

? Business Operations: EVP Andrew Fordyce

? Supply Operations: EVP Thomas Nagy 

? Research & Development: EVP and CSO Per Falholt 

? Corporate Functions: EVP and CFO Benny D. Loft