Total sales in 2018 were DKK 14,390 million, an increase of 4% organically and a decrease of 1% in DKK.
Gross profit and marginGross profit decreased by 2% to DKK 8,255 million from DKK 8,413 million in 2017. The gross margin was 57.4%, down from 57.9% in 2017. Productivity improvements and mix had a positive impact on the gross margin, whereas higher input costs and lower deferred income had a negative effect.
Operating costs decreased by 3% to DKK 4,228 million. Operating costs as a percentage of sales were 29%.
- Sales and distribution costs decreased by 3%, representing 10.9% of sales
- Research and development costs decreased by 3%, representing 13.0% of sales
- Administrative costs decreased by 5%, representing 5.5% of sales
Other operating income
Other operating income was a net income of DKK 43 million, compared with a net loss of DKK 3 million in 2017, which included the divestment of Albumedix.
EBITDAEarnings before interest, tax, depreciation and amortization. increased by 1% to DKK 5,158 million, up from DKK 5,114 million in 2017. Depreciation, amortization and impairment losses were DKK 1,088 million in 2018, up 2% from DKK 1,067 million in 2017.
EBIT and EBIT margin
EBITEarnings before interest and tax. See Operating profit. increased by 1% to DKK 4,070 million, up from DKK 4,047 million in 2017. The EBIT marginEarnings before interest and tax as a percentage of revenue. ended at 28.3%, up from 27.9% in 2017. Excluding the one-time costs incurred in 2017 relating to organizational changes and the divestment of Albumedix, the EBIT margin in 2018 was 0.7 percentage point lower than in 2017.
Net financial costs were DKK 117 million in 2018, compared with DKK 157 million in 2017. Net financial costs in 2017 were impacted by a write-down of DKK 120 million on a financial asset related to a guarantee provided by M&G. In 2018, Novozymes realized a DKK 89 million currency hedging/revaluation net loss, compared with a net gain of DKK 27 million in 2017.
The effective tax rateIncome tax expense as a percentage of profit before tax. was 18.0%, compared with 19.5% in 2017. In 2017 and 2018, Novozymes transferred intellectual property from Switzerland to Denmark. This had a positive impact on the effective tax rate of 2.5 and 3.1 percentage points respectively.
Net profit grew by 3% to DKK 3,227 million in 2018, up from DKK 3,120 million in 2017, driven by a lower tax rate and lower net financial costs.
Earnings per share (diluted)
Earnings per share (diluted)Net profit (attributable to shareholders in Novozymes A/S) divided by the weighted average number of shares outstanding (diluted). increased by 5% to DKK 11.03, compared with DKK 10.49 in 2017, due to higher net profit and cancellation of shares.