Total sales increased by 2% in local currency (LCY). Exchange rate levels, especially in the first half of 2009, impacted sales in DKK positively by 2 percentage points, with the USD in particular being a contributing factor. In 2009, sales in DKK amounted to DKK 8,448 million, an increase of 4% compared to 2008.
Total costs excluding net financials and tax were DKK 6,824 million in 2009, an increase of 2%, mainly attributable to higher sales costs, distribution costs, and R&D costs, but somewhat offset by lower cost of goods sold. Cost of goods sold was 1% lower, positively affected by productivity improvements and negatively impacted by currency effects. Overall, Novozymes’ input prices in 2009 were slightly lower than in 2008. This had a small positive impact on the cost of goods sold. In 2008, cost of goods sold was negatively affected by acquired inventories; hence the underlying decrease in cost of goods sold in 2009 was slightly lower than 1%.
For 2009, the gross margin was 55.6% compared to 53.5% in 2008. Exchange rate developments, productivity improvements, and an improved gross margin in BioBusiness were the reasons behind the strong development.
The gross profit margin for Enzyme Business was 57.4%, an improvement of slightly more than 1 percentage point on 2008. The gross margin was positively affected by favorable exchange rates and productivity improvements, partly offset by higher depreciation.
BioBusiness’ gross profit margin was 34.5% in 2009, an improvement of 14 percentage points on 2008. The gross margin was favorably affected by higher BioAg sales and pruning of lower-margin products. In 2008, the gross profit margin for BioBusiness was unfavorably affected by one-offs related to IFRS adjustments of acquired activities and closure of activities, which had a combined effect of approximately 7 percentage points on the gross margin. As a consequence, the gross profit margin improvement in 2009 was approximately 7 percentage points.
Other operating costs increased by 6% to DKK 3,076 million in 2009 due to the increased activity level initiated in 2008 and exchange rate levels. Flexibility and cost cautiousness from the organization helped to reduce the growth in other operating costs in 2009.
Other operating income increased by DKK 17 million to DKK 64 million in 2009. The development was mainly related to the US Department of Energy-funded cellulosic biofuel enzyme project DECREASE.
Depreciation and amortization rose to DKK 564 million in 2009, an increase of 1%, mainly explained by a higher level of invested capital compared to 2008.
Operating profit increased by 12% to DKK 1,688 million in 2009 compared to DKK 1,504 million in 2008. The operating profit margin was 20.0% for 2009 compared to 18.5% in 2008. Exchange rate levels in combination with the improved gross margin and low growth in operating costs had a positive impact on the operating profit margin.
Net financial costs for 2009 decreased by DKK 18 million to DKK 67 million compared to DKK 85 million in 2008. This decrease was primarily due to a significantly higher net currency hedging/revaluation gain. The decrease was somewhat offset by the reduced gain of DKK 40 million relating to employee stock option schemes compared to 2008. Net interest expenses increased by DKK 34 million to DKK 140 million in 2009, which also impacted net financials negatively.
In 2009, Novozymes hedged the majority of its exposure to the USD at USD/DKK 548. The volatile development in the USD during 2009 resulted in a currency hedging loss for the beginning of the year, but a currency hedging gain in the latter part of the year. In 2009, Novozymes realized a currency gain of DKK 56 million, which was DKK 90 million higher than in 2008.
Net interest-bearing debt was DKK 949 million at December 31, 2009, against DKK 1,380 million at year-end 2008.
Profit before tax increased by 14% to DKK 1,621 million from DKK 1,419 million in 2008. In 2009, the effective tax rate was 26.3% compared to 25.2% in 2008. Net profit increased by 12% to DKK 1,194 million against DKK 1,062 million in 2008.