"In 2000 Novozymes set some financial targets that we were to achieve in the first five years - they have all been achieved," said chairman of the board of directors Henrik Gurtler."In future we will maintain the long-term financial targets, but we will focus even more on top line growth and market-expanding activities."
Speaking after the enzyme giant's annual shareholder meeting yesterday, which also saw the adoption of the report on the company's activities over the last financial year, Gurtler said that another aim was to increase social responsibility in the decision making process.
The meeting also resulted in the re-election of the current six members of the board of directors as elected by the shareholders was confirmed.
It was also agreed that the company's share capital should be reduced by withdrawing part of the company's holding of own B shares, with a total nominal value of DKK 46,000,000. Following the reduction, the nominal value of the share capital will be DKK 650,000,000, DKK 107,487,200 of which is A shares and DKK 542,512,800 B shares.
The board of directors, was also authorised, in the period up to the next annual meeting of shareholders, to allow the company to purchase own shares to a value of up to 10 per cent of the share capital at the share price prevailing on the purchase date, with a deviation of up to 10 per cent.
The meeting came on the back of solid results for 2005. Operating profit last year rose to DKK 1,206 million, while net profit rose to DKK 861 million. Free cash flow was very satisfactory at DKK 991 million.
"2005 was a year of continued growth in profitability and strong cash flow," said Gurtler. "We are proud of these results, which were achieved in spite of sales growth that was lower than the long-term growth expectations.
"We also achieved good results in 2005 in the environmental and social areas. Most of the targets that we set for sustainability have been achieved, and we are working systematically to integrate social responsibility into the business."
Novozymes has been quick to develop viable alternatives for food makers, and the establishment of new market segments has ensured that the enzymes market, despite modest general growth, remains lucrative.
While the volumes of pure enzyme protein produced are very small, their value reached over $2 billion (1.53bn) in 2004. A recent report from Business Communications Company estimates that by 2009 the market will reach 1.83 billion.
The market for bakery enzymes came in at 32.1 million in 2003, expected to climb to 52.3 million by 2010.
As for 2006, Novozymes' sales are expected to rise by between seven to nine per cent in 2006, equivalent to an increase of six to eight per cent measured in local currency. Operating profit is also expected to rise by seven to nine per cent, while net profit is expected to increase by five to seven per cent.