Company update: Novozymes, strong ending of 2009
Fourth-quarter sales and earnings of enzyme specialist Novozymes had a strong development compared to the same quarter in 2008, resulting in 2009 ending at the upper end of expectations.
Novozymes, the world's leading industrial enzymes maker, posted on Thursday a bigger rise than expected in fourth-quarter operating profits and forecast higher sales and earnings for 2010 than in 2009.
Operating profit rose to 431 million Danish crowns from 370 million a year earlier and exceeded a mean forecast in a Reuters poll of analysts of 409 million.
Positive outlook for 2010
2010 expectations for sales and earnings are both higher compared to 2009. Although the fourth quarter of 2009 had a strong development, there is still uncertainty as to the development of the global economy in 2010.
Steen Riisgaard, President and CEO, says: "After a shaky start to 2009, I'm very pleased with the way we managed our business throughout the year.
“We were able to deliver on our earnings guidance communicated at the beginning of the year by responding rapidly to the challenging market conditions.
“Looking at 2010, we expect a positive development but with continued low visibility. And even with the current market conditions, we see very favourable long-term trends for Novozymes and remain confident of our ability to deliver on our long-term targets."
- Sales in 2009 increased by 2% in local currency (LCY) and by 4% in Danish Crowns (DKK)
- Sales in Q4 2009 improved by 13% in LCY and by 7% in DKK compared to Q4 2008
- Gross margin reached 55.6% for 2009 compared to 53.5% for 2008
- Operating profit for 2009 increased by 12% to DKK 1,688 million
- Operating profit margin was 20.0% for 2009 compared to 18.5% for 2008
- Net profit for the year was DKK 1,194 million, an increase of 12% compared to 2008
- Net investments for 2009 were DKK 978 million compared to DKK 942 million in 2008
- Free cash flow before acquisitions was DKK 839 million in 2009 against DKK 755 million in 2008
- ROIC for 2009 was 20.3% compared to 19.5% for 2008
1€ = 7.44 DKK,
1$ = 5.23 DKK
Assuming that 2010 exchange rates for the most important currencies remain at the spot rates on January 20 for the rest of the year, expectations are:
- Sales growth of 2 - 6% in LCY and 1 - 5% in DKK
- Operating profit growth of 3-7% in DKK
- Operating profit margin of ~20%
- Net profit growth of 9-13% in DKK
- Free cash flow before acquisitions of DKK 700-800 million
- Investments of DKK 1,000-1,100 million
- Return on invested capital (ROIC) of ~ 20%
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