Our long-term targets have been set to measure whether we are moving in the right direction. The targets are guided by the UN Sustainable Development Goals, which were adopted by more than 190 UN member states in September 2015. The targets will tell us if we are succeeding in helping the world become more sustainable, while ensuring Novozymes’ continued growth.
Novozymes’ long-term financial targets reflect an ambition to deliver economic value through high organic sales growth at an attractive earnings level, while investing prudently to drive long-term profitable sales growth.
From a financial perspective, the results for 2015 were good, but from a sales growth perspective, 2015 was challenging with 4% organic sales growth for the year. Given the outlook for 2016 and the uncertainty beyond 2016 related to depressed commodity prices and the potential impact of these – particularly on Bioenergy and growth in emerging markets – Novozymes no longer expects to reach its organic sales growth target of 8-10% on average in the six-year period from 2015 through 2020.
Organic sales growth remains the top priority for Novozymes, and the company maintains its ambition to accelerate organic sales growth to a level of 8-10%. However, with the current visibility, annual organic sales growth from 2017 and through to the end of this decade is expected to be in line with the historical performance of 6-7%.
From the perspective of profitability and return on capital, Novozymes maintains its long-term targets of an EBIT margin of 26% or above and ROIC including goodwill of 25% or above. If investment opportunities are identified to strengthen the company’s sales growth outlook further, management will retain the option to make such investments, provided the EBIT margin remains at 26% or above and ROIC including goodwill at 25% or above.Long-term sustainability targets
All our long-term sustainability targets remain intact. Across markets, Novozymes’ solutions help make industrial processes and the production of a variety of consumer goods and agricultural products more efficient. Other things being equal, the higher the cost of raw materials,waste and energy, or the more our innovations can contribute to the marketing of the end product, ###FACT:FOCUS###the greater the value for our customers and Novozymes.
Novozymes is experiencing growing interest from customers in being more efficient and using biotechnology to create competitive advantages. Innovation and cost/performance lie at the heart of why customers choose Novozymes. However, sustainability is increasingly a competitive parameter for Novozymes and on the minds of our customers as they build brands and competitive advantages.
Below, we elaborate on our long-term sustainability targets after their first year in place.