* Sees EBIT margin above 24 pct over next five years
* Names Peder Holk Nielsen CEO from April 1
* Q4 EBIT 671 million crowns vs f'cast 577 million
* Proposes 2.20 crown dividend per share vs fcast 2.10
* Shares rise 7.5 pct, hit 11-month high
(Adds quotes, details)
By Ole Mikkelsen and Mia Shanley
COPENHAGEN, Jan 21 Danish industrial enzymes
maker Novozymes said it aims to keep margins at the
current high level over the next five years through production
efficiency measures, helping send its shares to an 11-month
Posting higher-than-expected quarterly earnings, the company
whose enzymes are used in making consumer goods from detergents
to biofuels said it aimed for profit margins of above 24 percent
in each of the next five years, in line with last year and above
"We have invested heavily in research and development and
have built platforms which make it difficult for others to come
in and push our margins down," Peder Holk Nielsen, named as the
company's new president and chief executive from April 1, told
Nielsen, previously head of the group's enzymes business,
said the firm would keep investing 20 percent of research &
development to optimise production.
"We have been able to optimise first, to get more out of our
factories and constantly make more effective enzymes," he said.
Shares in Novozymes were up 7.5 percent at 1252 GMT,
outpacing a 0.7 percent rise in the benchmark Copenhagen top 20
index. The stock rose as high as 174.5 crowns, its
highest since February 2012.
"The outlook for 2013 earnings is really strong ... This is
also reflected in the fact that they dare to lift the long-term
expectations for a profit margin of over 24 percent, where they
have previously guided for 20 percent" said Morten Imsgard, an
analyst at Sydbank.
Novozymes, which sells to consumer goods giants like Procter
& Gamble and Unilever, has enjoyed strong demand
for enzymes used in detergents which allow for low-temperature
It said its main growth driver this year will come from its
household care enzymes, the biggest part of its business at 30
percent of revenue, thanks especially to higher sales to
Germany's Henkel AG & Co, maker of the Persil
washing powder brand in parts of continental Europe.
Novozymes's positive comments on margins outweighed a
slowdown in sales growth which the company blamed on the
"We are still confident that we can reach the long-term
average sales growth target of more than 10 percent, although
not until 2015," outgoing Chief Executive Steen Riisgaard said.
Novozymes, which shares the biofuel enzymes market with U.S.
chemicals group DuPont, has been hit by low ethanol
production in the United States.
Data from the Energy Informational Administration last week
showed U.S. ethanol production plunged to the lowest in 2-1/2
years, with supplies tight due to low corn production in the
drought-stricken U.S. plains and western midwest.
Corn is the main feedstock used to produce ethanol in the
United States and enzymes are used to break down that raw
material into sugars that can be fermented into ethanol.
Bioenergy enzymes accounted for 16 percent of Novozymes's
turnover last year and Novozymes said new product launches could
help lift earnings this year.
It recently launched a new product which enables producers
of corn-based ethanol to increase their ethanol yield by up to
2.5 percent. That product was already selling well, it said.
Earnings before interest and tax rose to 671 million crowns
($120 million) in the fourth quarter from a year-earlier 496
million, against an average forecast of 577 million in a Reuters
poll of analysts.
Novozymes forecast operating profit growth of 4 to 7 percent
this year, sharply lower than the 17 percent result in 2012. It
also said it would pay a 2.20 crown dividend per share against a
forecast 2.10 crowns.
($1 = 5.5907 Danish crowns)
(Additional reporting by Kristian Mortensen; Editing by Erica
Billingham and David Holmes)