Novozymes AS (NZYM.CO), the world leader in “green chemicals,” which include enzymes used in cellulosic ethanol, reported significantly higher result for the first quarter of 2007.
Sales grew by 18% (DKK 1,931 million from DKK 1,633 million in Q106), operating profit by 15% (DKK 359 million from DKK 313 million), and net profit by 30% to DKK 254 million.
Earnings per diluted share were DKK 3.99 for the period, an increase of 34% compared with the first quarter of 2006.
Free cash flow before acquisitions was DKK 308 million, on a par with the first quarter of 2006 Return on invested capital (ROIC) rose to 22.4% from 18.4% in the same period of 2006.
Novozymes is adjusting its outlook for 2007 upwards, assuming exchange rates for the company’s key currencies remain the same for the rest of 2007. The updated outlook for 2007 includes the effect of the settlement in connection with the patent infringement suit against Danisco.
Expected growth in sales in local currencies is being increased to 11-13% (from 8-10%), while growth in sales in DKK is expected to be 8-10% (previously 7-9%). Operating profit is now expected to increase by 11-13% (previously 5-7%). The outlook for growth in net profit is also being increased to 11-13% (previously 5-7%), and the outlook for free cash flow to DKK 850-950 million (from DKK 800-900 million).
“Novozymes has made a really good start to 2007,” says Steen Riisgaard, President and CEO. “Sales in the first quarter of 2007 have been exceptionally good, generating healthy growth in earnings. The marked increase in sales has been driven both by higher growth than expected and by timing shifts over the year. Despite the negative impact of lower exchange rates, the trend justifies upward adjustment of the outlook for sales and earnings for 2007”.
Novozymes also announced the creation of a new Biopharmaceutical Ingredients business, headquartered in Nottingham UK, which will develop and manufacture animal free recombinant ingredients to support biopharmaceutical production.
The initial focus of the new business area will be the launch of a range of animal free recombinant ingredients developed specifically for industrial scale mammalian cell culture. The range will deliver productivity, compliance and consistency whilst avoiding the regulatory, quality and performance issues often associated with animal and human-derived raw materials.
Commented Peter Rosholm, Vice President for the division, “We have combined Novozymes expertise in large scale protein production and supply with a strong science base to provide a range of products specifically developed for biopharmaceutical production. In addition to addressing the need to produce ever-safer biopharmaceuticals, our cell culture range has a secure supply network to deliver ingredients which allow for process optimisation whilst reducing customers regulatory and lot testing burdens. Our solution package exceeds what current animal derived and serum free supplements can provide industrial cell culture today.”
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