Rethink Tomorrow
Organic sales growth
(2017: 4%)
Total sales in 2018 were DKK 14,390 million, an increase of 4% organically and a decrease of 1% in DKK. Bioenergy and Food & Beverages were the main contributors to organic sales growth.
EBIT margin
(2017: 27.9%)
The EBIT margin was 28.3%, 0.4 percentage point higher than 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 profit growth
(2017: 2%)
Net profit grew by 3% to DKK 3,227 million in 2018, up from DKK 3,120 million in 2017. This was driven by both a lower tax rate and lower net financial costs.
ROIC
(2017: 25.6%)
Return on invested capital (ROIC) including goodwill was 24.2%, compared with 25.6% at year-end 2017. The lower ROIC was mainly due to higher net invested capital.
tons of CO2 emissions saved
In 2018, our customers saved an estimated 88 million tons of CO2 emissions by applying Novozymes’ products. The savings achieved are equivalent to taking approximately 37 million cars off the road.
Renewable energy
(2017: 24%)
Energy from renewable sources accounted for 23% of our total energy consumption in 2018. In Denmark and Brazil, we purchase our electricity from renewable sources.
Employee development
(New in 2018)
In 2018, we implemented TunedIn, a new employee survey and dialogue tool. The survey is used in conjunction with team talks throughout the company about how we work and grow together. The survey shows an employee development score of 78, which meets our target of 75 or above.
Women in senior management
(2017: 26%)
In 2018, we exceeded our target of 27% for women in senior management (directors or higher). This is a result of our continued focus on improving diversity.
North America was solid overall with 5% organic sales growth in 2018 compared with 2017. Bioenergy and Agriculture & Feed were the main growth drivers.
Organic sales growth
34%
of sales
Organic sales growth in 2018 compared with 2017 was soft across most industries. Partly due to weak markets in the Middle East, Household Care was particularly soft, and Food & Beverages posted low growth.
Organic sales growth
36%
of sales
Organic sales growth in Latin America was 6% in 2018 compared with 2017, driven by Bioenergy and Food & Beverages, whereas Household Care was lower.
Organic sales growth
10%
of sales
Food & Beverages and Household Care were the main drivers of the 5% organic sales growth in 2018 compared with 2017.
Organic sales growth
20%
of sales
Three out of five of Novozymes’ industries grew in 2018. Bioenergy delivered strong growth, and Food & Beverages and Agriculture & Feed also delivered growth. Household Care was flat, and sales declined in Technical & Pharma. Novozymes holds an estimated 48% share of the global enzyme market.
| DKK million | 2018 | 2017 | 2016 | 2015 | 2014 |
| Income statement | |||||
| Revenue | 14,390 | 14,531 | 14,142 | 14,002 | 12,459 |
| Gross profit | 8,255 | 8,413 | 8,126 | 8,129 | 7,149 |
| EBITDA | 5,158 | 5,114 | 4,960 | 5,011 | 4,400 |
| Operating profit / EBIT | 4,070 | 4,047 | 3,946 | 3,884 | 3,384 |
| Financial items, net | (117) | (157) | (34) | (257) | (84) |
| Net profit | 3,227 | 3,120 | 3,050 | 2,825 | 2,525 |
| Balance sheet | |||||
| Total assets | 19,697 | 18,373 | 18,659 | 17,791 | 18,426 |
| Shareholders' equity | 11,438 | 11,267 | 11,745 | 11,593 | 11,280 |
| Invested capital | 13,953 | 12,880 | 12,584 | 11,891 | 10,535 |
| Net interest-bearing debt | 2,535 | 1,642 | 990 | 437 | (716) |
| Investments and cash flows | |||||
| Cash flow from operating activities | 3,679 | 4,063 | 3,840 | 3,339 | 4,525 |
| Purchases of property, plant and equipment | 1,332 | 1,593 | 1,076 | 968 | 703 |
| Net investments excluding acquisitions* | 1,388 | 1,665 | 1,188 | 1,015 | 715 |
| Free cash flow before net acquisitions and securities | 2,291 | 2,398 | 2,652 | 2,324 | 4,229 |
| Business acquisitions, divestments and purchase of financial assets | 4 | 3 | 161 | 242 | 14 |
| Free cash flow | 2,287 | 2,395 | 2,491 | 2,082 | 4,215 |
| * Excluding The BioAg Alliance impact in 2014. |
| 2018 | 2017 | 2016 | 2015 | 2014 | ||
| Key ratios | ||||||
| Revenue growth, DKK | % | (1) | 3 | 1 | 12 | 6 |
| Revenue growth, organic | % | 4 | 4 | 2 | 4 | 7 |
| R&D costs (% of revenue) | % | 13.0 | 13.2 | 13.2 | 13.5 | 14.8 |
| Gross margin | % | 57.4 | 57.9 | 57.5 | 58.1 | 57.4 |
| EBITDA margin | % | 35.8 | 35.2 | 35.1 | 35.8 | 35.3 |
| EBIT margin | % | 28.3 | 27.9 | 27.9 | 27.7 | 27.2 |
| Effective tax rate | % | 18.0 | 19.5 | 21.4 | 22.0 | 23.0 |
| Equity ratio | % | 58.1 | 61.3 | 62.9 | 65.2 | 61.2 |
| NIBD/EBITDA | x | 0.5 | 0.3 | 0.2 | 0.1 | (0.2) |
| Return on equity | % | 28.4 | 27.1 | 26.1 | 24.7 | 22.6 |
| ROIC including goodwill | % | 24.2 | 25.6 | 25.1 | 25.9 | 23.1 |
| WACC after tax | % | 6.6 | 6.5 | 6.5 | 5.3 | 3.7 |
| Earnings per share (EPS), diluted | DKK | 11.03 | 10.49 | 10.06 | 9.12 | 8.02 |
| Dividend per share (2018 proposed) | DKK | 5.00 | 4.50 | 4.00 | 3.50 | 3.00 |
| Key ratios have been prepared in accordance with The Danish Finance Society's "Recommendations & Financial Ratios 2015 Nordic Edition" while certain key figures for the Novozymes Group has been prepared as described in the Glossary. | ||||||
| Environmental and social data | ||||||
| Total number of employees | No. | 6,427 | 6,245 | 6,441 | 6,485 | 6,454 |
| Rate of employee turnover | % | 8.8 | 11.9 | 10.4 | 9.1 | 8.1 |
| Frequency of accidents with absence per million working hours | 2.4 | 1.6 | 2.2 | 2.5 | 1.7 | |
| Women in senior management | % | 30 | 26 | 25 | 24 | 23 |
| Estimated CO2 reductions from customers' application of Novozymes' products | Mill. tons | 88 | 76 | 69 | 60 | 60 |
• Henkel recognizes Novozymes with its Best Supply Performance Award for 2017
• Age of Biology opens an art installation at Berlin Hauptbahnhof, Germany, using fungi provided by Novozymes
• Novozymes launches Innova® Drive, the first product from our yeast platform. Innova® Drive is aimed at ethanol plants with short fermentation times
• Novozymes opens the Innovation & Technology Center in Istanbul, Turkey. The center will cater to customers in the Middle East and Africa
• Alterion® is approved for use in Europe. The probiotic for poultry codeveloped with Adisseo is now available globally
• Kalundborg Symbiosis receives the WIN WIN Gothenburg Sustainability Award for sustainable production. The Symbiosis is a partnership between Novozymes and seven other manufacturers in Kalundborg, Denmark
• DSM and Novozymes launch Balancius™, a transformative innovation to improve nutritional uptake in poultry. Balancius™ enables farmers to use less feed to raise an animal
• Novozymes launches Innova® Lift, the second product from our yeast platform. Innova® Lift is aimed at ethanol plants with long fermentation times
• The Prime Minister of Denmark, Lars Løkke Rasmussen, visits Novozymes' headquarters in the lead-up to the Partnering for Green Growth and the Global Goals 2030 (P4G) environmental summit in Copenhagen
• For the third year in a row, Science Magazine ranks Novozymes among the top 3 science employers in the world
• A new partnership is formed with Elanco Animal Health Inc. to develop nutritional health products for beef and dairy cattle
• Balancius™ receives DSM’s Innovation Award 2018
• Novozymes launches our first product for sludge dewatering, BioSec®, aimed at municipal wastewater treatment facilities
In 2018, Novozymes generated value of
DKK 14,480 million. 87% of this amount
was returned to society. The remaining 13%
was reinvested in Novozymes to develop the
company, and ensure competitiveness and
future value generation for distribution among
key stakeholders.
In addition to the 10% returned to capital providers, Novozymes bought back shares worth DKK 2 billion in 2018.
A positive tax contribution
Novozymes’ overall tax strategy and
transfer-pricing policy support a positive tax
contribution to society and governments in
the countries in which Novozymes operates.
Novozymes continuously works to fulfill
its tax obligations in the countries where it
operates. We seek to obtain a competitive tax
level in a fair and responsible way, and with
full regard to national and international laws
and regulations. Besides taxes, our economic
contributions include duties, VAT, employee
taxes, employee pension and benefit programs,
procurement from local vendors and job
creation.
In 2018, Novozymes incurred corporate income
taxes and other taxes and duties that came to
approximately DKK 1,250 million. In addition,
Novozymes collected and withheld tax
contributions on dividends and wages totaling
approximately DKK 1,250 million. Novozymes’
total tax contribution therefore amounted to
approximately DKK 2,500 million, compared
with approximately DKK 2,750 million in 2017.
