Group financial statement for the first nine months of 2006

The results for the first nine months of 2006 are highly satisfactory. Growth in operating profit and sales of 11% and 8% respectively is wholly in line with the company’s outlook. The financial outlook for 2006 is being adjusted upwards.

  • Sales in the first nine months of 2006 rose by just over 8% to DKK 5,038 million from DKK 4,657 million in the same period of 2005. Measured in local currencies, sales rose by just over 7%
  • Operating profit rose by 11% to DKK 1,006 million, compared with DKK 909 million in 2005
  • The operating profit margin was 20.0%, compared with 19.5% in the equivalent period of 2005
  • Net financial costs were DKK 110 million against DKK 24 million in the first nine months of 2005
  • Net profit for the period rose by 1% to DKK 671 million from DKK 664 million. Adjusted for a negative effect relating to employee share options, net profit for the period was just over 4% higher than for the same period of last year
  • Earnings per share (diluted) were DKK 13.68, an increase of 4% compared with the corresponding period of 2005
  • Free cash flow before acquisitions rose by 8% to DKK 960 million from DKK 888 million. Free cash flow after acquisitions was DKK 885 million for the first nine months of 2006
  • Return on invested capital (ROIC) rose to 20.6% from 19.8% in the same period of 2005
Outlook for 2006
Novozymes is adjusting its outlook for earnings and free cash flow upwards for 2006, assuming exchange rates remain the same. Growth in sales is expected to be approximately 8% (previously 7-9%), equivalent to approximately 8% (previously 6-8%) measured in local currencies. Operating profit is now expected to grow by approximately 10% (previously 7-9%), while growth in net profit is expected to be 5-6% (previously 5-7%). The outlook for free cash flow before acquisition is being increased to DKK 950-1,000 million (previously DKK 850-950 million). It has further been decided to increase the frame for share buy-backs for 2006 by DKK 350 million to DKK 1,350 million (previously DKK 1 billion).

“We are very pleased with the results,” says Steen Riisgaard, President and CEO of Novozymes. “We have had a really good third quarter with underlying growth in sales of 11%, and are standing by our outlook for sales for the year within the range originally indicated to the market. At the same time we have seen pleasing productivity improvements, enabling us to adjust the outlook for earnings upwards."

"In August 2006 Novozymes provided a bid for the Australian biotech company GroPep Ltd. as part of the strategy to leverage the company’s biotech expertise and technology platform in order to build a new business area in recombinant ingredients for the biopharmaceutical industry. I am pleased to say, that based on the satisfactory result of the independent expert’s assessment of the takeover scheme, GroPep’s Board of Directors now confirms its unanimous recommendation that shareholders vote in favour of the Share Scheme. We thereby expect the transaction to be completed by year-end.”

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