Group financial statement for first half of 2006

Novozymes maintains the high earnings level. Growth in sales and operating profit of 8% and 10% respectively for the first half of 2006 is in line with the company’s outlook.

The full-year outlook for earnings remains unchanged, while the outlook for free caash flow is increased to DKK 850-950 million. 

  • Sales rose by 8% to DKK 3,282 million from DKK 3,037 million in the first half of 2005. Measured in local currencies, sales rose by just over 5%
  • Operating profit rose by 10% to DKK 657 million from DKK 597 million in 2005
  • The operating profit margin for the first half of 2006 was 20.0%, compared with 19.7% in the same period of 2005
  • Net financial costs were DKK 66 million against DKK 8 million in 2005
  • Profit before tax was DKK 591 million, largely on a par with the first half of 2005
  • Net profit for the period was DKK 443 million, marginally higher than the figure of DKK 441 million in 2005. Earnings per share for the period (diluted) were DKK 6.72, an increase of approximately 4%
  • Free cash flow before acquisitions rose by 25% to DKK 600 million, compared with DKK 480 million in 2005
  • Return on invested capital (ROIC) was 19.7%, the same as last year

Outlook for 2006

Novozymes maintains its previous outlook for 2006 as published in January 2006. However, the outlook for free cash flow is being adjusted upwards from DKK 750-850 million to DKK 850-950 million, mainly as a result of tax-related one-off items. Growth in sales is expected to remain at 7-9% in DKK and 6-8% in local currencies. Operating profit is expected to grow at 7-9%, while growth in net profit is expected to be 5-7%.

“We are satisfied,” says Steen Riisgaard, President and CEO. “With sales growth of 8% in DKK and just above 5% in local currencies, we are in line with our outlook for the period. We have also managed to achieve good productivity improvements in the first half, which will underpin our earnings level and enable us to maintain our high operating profit margin at the same time as investing more in long-term growth. In the light of the results for the first half, we are standing by our outlook for the year within the parameters presented to the market in January 2006.

The recently completed acquisition of the UK company, Delta Biotechnology Ltd (now Novozymes Delta Ltd), is part of the company’s strategy of developing a platform for ingredients for the biopharmaceutical industry. The existing product portfolio and pipeline from Novozymes Delta Ltd complements our existing projects within this area very well, and further it supports our continued expansion within media for cell cultures.”

Download the full stock exchange announcement