United in opportunity

GROWING TOGETHER

Novozymes connects with diverse stakeholders in the global community to innovate and invest in tomorrow’s biobased, renewable society. The more we learn from each other, the faster we get there.

As our technological capabilities have grown, so have the social and financial benefits of our biological solutions, opening new markets and bringing a greater need for partners.

We are targeting an EBIT margin of more than 24% and a return on invested capital of more than 22%.

Novozymes’ business model proved its worth in 2012, as setbacks in some areas were overcome through a diversified business mix and operational excellence. We also founded new and promising partnerships, demonstrating the versatility of our strategic opportunities as we continue our quest to provide sustainable biological solutions addressing some of the world’s most pressing challenges.

Global population growth and economic development continue to pile pressure on an industrialized world built on finite resources. While talk of climate change and clean technology has subsided in the face of recessionary concerns and budgetary constraints, there is still an urgent need to rethink tomorrow.

Together we are stronger

2012 was a strategically important year for Novozymes, as the company entered into a record number of partnerships with leading global companies, including Syngenta, Beta Renewables and BASF.

Partnerships are not new to Novozymes. An ability to foster close customer relationships has long been regarded as a competitive advantage, enabling us to reduce business complexity, share knowledge and align interests. As our technological capabilities have grown, so have the social and financial benefits of our biological solutions, opening new markets and bringing a greater need for partners.

Chemical substitution, advanced biofuels, biopesticides, etc. all offer compelling opportunities to rethink tomorrow. By joining forces with partners across the value chain, all working toward a common goal, Novozymes can push the boundaries of each market and potentially offer customers better biological solutions faster.

Change in leadership

Internal partnerships are just as important, promoting trust, collaboration, innovation and leadership. The partnership between senior management, headed by the CEO, and the Board of Directors is a crucial internal partnership. 2013 will be a year of change for Novozymes, as Steen Riisgaard steps down on March 31 after heading the company since its establishment as an independent company in 2000.

Steen has been instrumental in Novozymes’ success over the past 12 years and leaves an important legacy. As the spearhead of the company and in close collaboration with the rest of the organization, Steen has skillfully doubled Novozymes' revenue and workforce, tripled earnings and increased market value five-fold. These numbers speak for themselves, but they do not tell the whole story. Under Steen’s stewardship, the Novozymes culture has flourished, and leadership has been clear and consistent. The company today is as strong as ever and competitively positioned for further growth.

With the appointment of Peder Holk Nielsen, formerly Head of Enzyme Business, as the new CEO, the Board of Directors believes it has chosen the best candidate to lead Novozymes’ continued development, further strengthen the partnership with the Board and take the company to the next level. The long-term growth drivers of the business remain intact, and the existing strategic platform will allow Peder Holk Nielsen, Executive Management and the Board of Directors to continue to explore and develop long-term value for the company and its stakeholders.

Updated long-term targets

Executive Management and the Board of Directors have updated Novozymes’ long-term targets for the next five years. The company continues to aim at strong organic sales growth with high profitability and efficient use of capital, but the time is right for an update now that visibility in parts of the business has improved, most notably in BioAgriculture (BioAg), Biopharma and enzymes for biomass conversion. It is also time to raise the bar for the EBIT margin given the continued outperformance over the last couple of years and a strong outlook.

Novozymes is targeting long-term average organic sales growth of more than 10%, a target we expect to reach in 2015 and onward. The target is based on the assumption that the global economy stabilizes and the potential of the above mentioned businesses materializes. We are also targeting an EBIT margin of more than 24% and a return on invested capital of more than 22%. The sustainability targets have also been updated to reflect our sustainability ambitions and activities across the value chain, and to ensure the long-term development of Novozymes as an international, inclusive and successful company.

2013 and beyond

With Peder Holk Nielsen at the helm and updated long-term targets in place, Novozymes’ focus in 2013 will be on ensuring effective execution in a fluctuating macroeconomic environment, while the company continues its long-term commitment to innovation, partnerships and sustainability.


January 2013


The Board of Directors
Novozymes A/S

GROWING TOGETHER

Novozymes connects with diverse stakeholders in the global community to innovate and invest in tomorrow’s biobased, renewable society. The more we learn from each other, the faster we get there.

As our technological capabilities have grown, so have the social and financial benefits of our biological solutions, opening new markets and bringing a greater need for partners.

We are targeting an EBIT margin of more than 24% and a return on invested capital of more than 22%.

Partnerships for growth

Novozymes’ Executive Vice Presidents explain the growing role of partnerships, and the benefits and opportunities these offer the company.

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