A year of transition, 2013 saw Novozymes reorganize the company, reprioritize its research efforts, secure important partnerships and deliver strong earnings. While poised for further growth, we must also stay on top of industry innovation, competition and ever-evolving customer needs.
We made an extra effort to put our customers at the center of everything we do in 2013, challenging ourselves to gain an even better understanding of what they want and need. In spite of many internal changes, Novozymes was able to deliver a number of significant biosolutions in close collaboration with customers worldwide.
The innovation pipeline was refocused to deliver more innovation enabling our customers to produce more with less. The package of yield discovery solutions for biofuels launched in June – Novozymes Avantec®, Spirizyme® Achieve and Olexa® – reached customers at a time when productivity increases made the difference between profit and loss. The package enables customers to increase the ethanol yield from corn by up to 5% and corn oil extraction by up to 13%, while also saving up to 8% energy.
Within Household Care, we delivered innovation to support better laundry detergent performance at low temperatures and reduce costs through the replacement of petrochemicals with highly efficient enzymes.
“Partnerships offer us a way of really getting to know and understand customers and using our combined resources to deliver more significant innovation.”
Fortunately, our customers appreciate the value we bring to their products. For example, Henkel presented us with its Best Innovation Contributor Award, and P&G named us External Business Partner of the Year for the sixth consecutive year. These awards are testament to the standards of innovation, product quality and service we aim to give all our customers.
Overall, it is estimated that customers saved 52 million tons of CO2 through the application of our products in 2013. We generated sales growth of 5%, EBIT growth of 6% and an EBIT margin of 24.7%, but were unable to realize five of our sustainability targets.
In April 2013, the new Executive Leadership Team restructured the organization, sharpening our focus on the customer. In order to change the world together with our customers and reach our long-term targets, it is absolutely crucial that we understand our customers and their world and make decisions based on what matters to them.
At the onset of these organizational changes, the Executive Leadership Team introduced three strategic focus areas to help Novozymes meet its promise of double-digit growth by 2015: deliver more significant innovation to the market, ensure success in new platforms, and cultivate great leaders and develop employees. We will continue to work on these areas in 2014.
“Sustainability will remain a priority in the coming year as we seek to overcome challenges.”
As part of our strategy of expanding opportunity and increasing innovation, partnerships offer us a way of really getting to know and understand customers and using our combined resources to deliver more significant innovation.
In the fall, our biomass conversion business reached major milestones both in its existing partnership with Beta Renewables and in new deals with Raízen and M&G Chemicals. Developments such as these bring the world closer to renewable energy for all. In December, Monsanto and Novozymes formed The BioAg Alliance to revolutionize the research, development and commercialization of biosolutions for agriculture, eventually bringing more choices and changes to farming globally.
Novozymes connects with diverse stakeholders in the global community to innovate and invest in tomorrow’s biobased, renewable society. The more we learn from each other, the faster we get there.
Over the past few years, we have seen increased interest in the biotechnology industry from large chemical companies, a reflection of its immense promise. We do not see this interest waning in 2014. Although it may increase competition, it also helps draw more resources and attention to the biotechnology sector, helping the sector gain momentum.
In 2014, we aim to unlock more of our potential in emerging markets, which present valuable opportunities in areas such as Household Care where enzyme penetration is relatively low. We will also work for wider adoption of newly launched biosolutions such as Avantec®, Spirizyme® Achieve and Olexa®. It is equally important for us to understand and meet real customer needs in industries that are not growing as much as we would like, for example Food & Beverages.
At the same time, we cannot lose sight of the sustainability of our own operation – a critical part of our business. We did not reach some of our efficiency and diversity targets for 2013, and action has been taken to address this. Sustainability will remain a priority in the coming year as we seek to overcome these challenges.
Our employees play a vital role in our ability to deliver on our expectations and achieve our long-term targets. Therefore, 2014 will see a continuation of our sharpened focus on leadership and employee development.
At Novozymes, we believe our biosolutions have the capacity to change the world together with our customers. Only by knowing our customers will we be able to maintain our long-term commitment to innovation and sustainability. And so our journey continues, as we work together to deliver relevant and significant innovation and reach our target of double-digit growth in 2015.
|Peder Holk Nielsen|
|President & CEO|