Cash flow from operating activities increased by 7% to DKK 1,817 million for 2009, up from DKK 1,697 million in 2008. The positive development was primarily the result of higher net profit and higher non-cash costs such as depreciation and unrealized foreign exchange losses. Development in working capital affected operating cash flow negatively. Increased receivables were to some extent offset by reduced inventories and higher payables.
Net investments excluding acquisitions were DKK 978 million in 2009, compared to DKK 942 million in 2008. The continued relatively high investment level was the result of the commencement of two new production facilities: the enzyme facility in Nebraska, USA, and the cGMP hyaluronic acid facility built on existing premises in Tianjin, China. The 2009 investment level was lower than expected at the beginning of the year, primarily due to the restaging of the Nebraska facility; with an expected total investment of USD 160–200 million, this facility will be built over three years instead of two as first anticipated. The slower development in demand during 2009 and stronger productivity improvements freed up capacity in existing facilities, enabling the restaging. Novozymes expects the plant in Nebraska to be finalized by the end of 2011 and fully operational in the middle of 2012. The cGMP hyaluronic acid plant in Tianjin is expected to be finalized late 2010, and production is expected to start in 2011.
Free cash flow before acquisitions reached DKK 839 million against DKK 755 million in 2008. The increase in free cash flow was primarily a result of the higher operating cash flow.
Shareholders’ equity was DKK 5,841 million on December 31, 2009, compared to DKK 4,476 million at year-end 2008. Shareholders’ equity was increased by comprehensive income and decreased by dividend payments of DKK 326 million. Shareholders’ equity represented 54% of the balance sheet total compared to 45% at year-end 2008. Net debt-to-equity was 16% at year-end 2009 compared to 31% at year-end 2008. This reduction is the result of both lower net debt of DKK 431 million and increased equity.
For 2009, the return on invested capital was 20.3% compared to 19.5% for 2008, primarily explained by the higher operating profit. On December 31, 2009, the holding of treasury stock was 2.8 million B shares, equivalent to 4.3% of the total number of shares outstanding.