Group financial statement for first quarter of 2006
Novozymes made a good start to 2006, with growth of 14% in operating profit and 11% in sales. Outlook for 2006 is maintained.
Sales in the first quarter of 2006 rose by 11% to DKK 1,633 million from DKK 1,476 million in the same period of 2005. Measured in local currency, sales rose by just above 5%
Operating profit rose by 14% to DKK 313 million, compared with DKK 275 million in the first quarter of 2005. The operating profit margin was 19.2%, compared with 18.6% in 2005
Profit before tax was DKK 265 million, on a par with DKK 267 million in the first quarter of 2005
Net financial costs were DKK 48 million against DKK 8 million in the first quarter of 2005
Net profit for the period rose by 2% to DKK 196 million from DKK 193 million. Adjusted for the negative effect relating to employee share options, net profit for the period rose by 7%
Earnings per share (diluted) were DKK 2.97, equivalent to an increase of 5% compared with the first quarter of 2005
Free cash flow before acquisitions rose by 14% to DKK 304 million, compared with DKK 267 million in the first quarter of 2005. Free cash flow after acquisitions was DKK 238 million in the first quarter
Return on invested capital (ROIC) rose to 18.4% from 17.7% in the same period of 2005
Outlook for 2006
Assuming no change in exchange rates, Novozymes' outlook for 2006 is maintained. Growth in sales is expected at 7-9%, equivalent to 6-8% measured in local currency. Growth in operating profit is expected at 7-9%, while the outlook for net profit is expected at 5-7%. Outlook for free cash flow also remains unchanged at DKK 750-850 million.
"Novozymes has made a good start to 2006," says Steen Riisgaard, President and CEO. "We achieved pleasing top -line growth of 11%, positively affected by exchange rates. And underlying sales are also showing a higher rate of growth than in 2005. In addition, the first quarter has once again demonstrated the company's ability continuously to optimise production and therefore increase profitability, despite rising energy and raw material prices. Sales are developing as expected, and the outlook for growth in both sales and in earnings remains unchanged.
In January 2006 Novozymes acquired a small company in China within the biopolymers area. Novozymes continuously assesses potential candidates for acquisition, primarily outside the enzyme business area, which could strengthen the company's position within the area in question."