Group financial statement for first half of 2008

High sales growth in the first half

Halfway into 2008, sales growth has remained high within both enzymes and microorganisms, totaling 16% in local currencies (LCY). Earnings for the period are satisfactory, despite low realized exchange rates and high raw material prices. Full-year sales growth and earnings in LCY are now expected to be at the upper end of the previously published range. In addition, expectations in DKK are being increased on the basis of the current exchange rate level.
  • Sales were up by 16% in LCY and by 9% in DKK to DKK 4,059m in the first half of 2008
    • 16% organic growth in the second quarter, 12% organic growth for the half
    • Double-digit growth within all enzyme areas in the first half
    • High growth within acquired activities
  • The gross margin was 52.7% compared to 52.8% for the same period last year
  • Operating profit rose by 5% to DKK 749m compared to 2007, excluding one-off item
    (DKK 788m in 2007 including one-off item)
  • The operating profit margin was 18.5% compared to 19.1% in 2007, excluding one-off item
  • Net profit increased by 7% to DKK 549m compared to the same period of 2007, excluding one-off item (DKK 570m in 2007 including one-off item)
  • Free cash flow before acquisitions was DKK 289m in the period against DKK 519m in 2007

“There is really good momentum in our business, so good in fact that we now believe that we will end the year at the upper end of our expectations," says Steen Riisgaard, President and CEO. "And despite challenging exchange rate movements in the first half and high raw material prices, earnings are keeping pace with growth. We can’t be anything but satisfied with results like these.” 

Outlook for 2008
Novozymes is adjusting its expectations for 2008, assuming that exchange rates for the company’s key currencies remain at their current levels for the remainder of 2008. The range for expected growth in sales is being narrowed to 13–15% (from 12–15%) in LCY. Expectations in DKK are also positively affected by the current exchange rate levels, with the outlook for sales growth now increased to 8-10% (from 6-9%) in DKK. Expected growth in operating profit is being increased to 4-6% (from 1-4%) and growth in net profit to 6-8% (from 4-7% previously). Note that growth in financial results is calculated on the basis of the figures for 2007, excluding one-off item.

Read the whole company announcement here