Novozymes Reports Strong 2008 Performance and Increased Long-Term Targets

2008 was a strong year for Novozymes. I'm very pleased with our performance," says Steen Riisgaard, President and CEO. "Lower growth in the fourth quarter may point to a slowdown going into 2009. But further ahead there are favorable trends and opportunities for our business, so we have upped our level of ambition and increased our long-term targets."

22/01/09 Novozymes has reported that 2008 sales growth was strong at 13% in local currencies. Earnings were also very satisfactory. Lower growth in the fourth quarter. Expected sales growth in 2009 of 8–13% in DKK in an uncertain market. Favorable long-term trends lead to new, increased long-term targets. Higher future growth supported by higher investments.

2008 sales were up by 13% in LCY and 10% in DKK to DKK 8,146m. There was sales growth of 5% in LCY and 10% in DKK in the fourth quarter, with 53.5% gross margin compared to 53.1% in 2007. Operating profit of DKK 1,504m was reported, a 7% increase, excluding one-off item in 2007 with operating profit margin of 18.5% compared to 18.9% in 2007, excluding one-off item. There was a net profit increase of 8% to DKK 1,062m, excluding one-off item in 2007, with free cash flow before acquisitions of DKK 755m against DKK 963m in 2007. Net interest-bearing debt of DKK 1,380m compared to DKK 1,769m at year-end 2007 with an equity ratio of 45% at year-end 2008.

"2008 was a strong year for Novozymes. I'm very pleased with our performance," says Steen Riisgaard, President and CEO. "Lower growth in the fourth quarter may point to a slowdown going into 2009. But further ahead there are favorable trends and opportunities for our business, so we have upped our level of ambition and increased our long-term targets."

In view of the economic environment, Novozymes considers its current 2009 growth outlook satisfactory. The severity of the global economic slowdown remains very uncertain, and efforts have been made to reflect this in the outlook. Assuming that exchange rates for the company's key currencies remain at the spot rates on January 21, 2009, the outlook is:

* 2009 sales growth of 8-13% in DKK and 3-8% in LCY
* Growth in operating profit of 10-15% in DKK and in net profit of 5-10% in DKK
* Free cash flow of around DKK 100-300m, reduced by a high level of investments

New long-term targets
In the light of last year's performance and the expected long-term trends, Novozymes has increased its long-term targets to:

* Organic sales growth of more than 10% p.a. (plus enzymes for conversion of biomass)
* Operating profit margin of more than 20%
* Return on invested capital of more than 22%