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Healthy food enzymes help Novozymes report 2012 growth

By Nathan Gray+

21-Jan-2013

Increasing demand for industry to produce healthier foods helped Novozymes to a strong 2012 performance in its food and drink business, however the Danish enzyme specialist says growth was ‘below expectation’.

In its 2012 report, Novozymes revealed organic sales growth of 4% for the year, with overall revenue up to 11.2 billion DKK (€1,505bn) from 10,510bn DKK (€1,408bn). The Danish firm saw a 5% local currency growth in its food and drinks enzyme business, with sales of enzymes for the production of healthy foods the strongest contributor overall through the year.

Sales to the starch and baking industries were roughly flat, while sales to the beverage alcohol industry were lower than in 2011, the firm said.

“We delivered strong earnings growth and record profitability in a year when organic sales growth was challenged and came in at 4% – below our ambition,” said CEO Steen Riisgaard. “With 2012 behind us, we have reviewed our long-term growth scenarios and decided to adjust our long-term financial targets.”

“We are still confident that we can reach the long-term average sales growth target of more than 10%, although not until 2015,” warned Riisgaard, who also announced that he would step down from his long-term role as CEO and President in April this year.

“Although enzymes are used widely across product categories, producers and countries, they remain a niche technology, making the development of processed foods one of Novozymes’ key long-term growth drivers,” the firm said in its report.

Financial breakdown

Novozymes said EBIT had increased by 17%, raising EBIT margin to 24.4%. Net profit grew by 10%, from 1.8bn DKK (€244m) in 2011 to 2bn DKK (€270m) in 2012.

“For 2013, the EBIT margin is expected to remain at its current high level, while organic sales growth is expected to increase to 5-8%,” said the firm, who said they have now adjusted long-term financial targets to reflect high profitability and timing of sales growth. 

Outside of its food and beverage business, Novozymes saw a 14% growth in its household care division and 7% growth in feed and other technical enzymes.

“Enzyme sales to the animal feed industry were the main growth driver as a result of a continued increase in sales of Ronozyme ProAct on the Latin American, Asian and European markets as well as improved phytase enzyme sales,” said Novozymes.

Changes at the top

The firm announced that Peder Holk Nielsen will take over as CEO when current boss Riisgaard steps down on April 1st this year.

“I am pleased to announce that Peder Holk Nielsen will succeed Steen Riisgaard as President and Chief Executive Officer,” commented Henrik Gürtler, chairman of the board at Novozymes. “I thank Steen Riisgaard for his 12 years of successful leadership in building the company, and I am sure that Peder Holk Nielsen will ensure the continued expansion of our position as world leader in bioinnovation.” 

Riisgaard steps down after 12 years at the company’s top post and 33 years in Novozymes and Novo Industri/Novo Nordisk. 

“It has been 12 fantastic years and a privilege to lead Novozymes in becoming the leading global provider of enzymes, and now it is time to pass the baton,” he said. 

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