Novozymes, the world's biggest industrial enzymes producer, posted earnings at the low end of expectations and warned of uncertainties in the global economic outlook.
The Danish company said its profits were held back by higher raw material costs, currency conversion effects and slack sales of bioenergy enzymes.
Earnings before interest and tax (EBIT) in the fourth quarter rose 19% to DKK496 million (€66.7 million) in October-December from 417 million (€56.1 million) a year earlier.
Growth in local currencies was 10% (8% DKK, 7% organic) compared to 2010. EBIT increased by 11% and took the EBIT margin to 22.3% despite a negative impact from higher raw material prices, acquisitions, and unfavorable currency rates.
Net profit grew by 13%, and free cash flow before acquisitions and divestments came in high, supported especially by the increased net profit.
The full-year 2012 expectations reflect uncertainty about the global economy, expressed by relatively wide intervals for sales and earnings growth guidance.
- Sales grew by 8% in DKK and by 10% in LCY vs. 2010, with 3 %-points from acquisition
- The gross margin was 56.2% (~ 56.5% excl. acquisitions), 0.5 %-points up on 2010
- EBIT was DKK 2,340 million (€314.6m), an increase of 11% compared to 2010
- The EBIT margin was 22.3% (~ 23.3% excl. acquisitions), 0.5 %-points up on 2010
- Net profit was DKK 1,828 million (€245.8m), an increase of 13% compared to 2010
“I’m delighted to report that we delivered on our full-year growth expectations despite the uncertainty about the global economic situation,” says Steen Riisgaard, President & CEO.
“The uncertainty is expected to continue in 2012 and, although the characteristics of our products, the many different industries we serve, and the way the business operates have made Novozymes’ sales and earnings fairly resilient in previous economic downturns, we currently see scenarios at both the high and low end of the guidance.
"On the development side, I’m particularly excited that one of our partners in cellulosic ethanol is scheduled to open the world’s first commercial-scale production facility in 2012 in Italy. More plants will follow in the years to come, and Novozymes is ready and well positioned to supply the producers with the right enzymatic solutions, regardless of substrate and production technology.
"To sum up, although 2012 looks to be another uncertain year with respect to the global economy, it's also set to bring some very exciting developments with the focus remaining on innovation, market presence, and operational excellence,” Riisgaard said in a press release.