2015 was in many ways a significant year for Novozymes and for the world economy. We saw changes no one would have considered likely just a year ago. Volatility and unforeseen events are not new phenomena, but it seems that 2015 brought an unexpected number of events that we as a Board had to address and that will influence years to come. Who would have foreseen that Europe would see the largest influx of refugees since the Second World War, that the U.S. dollar would appreciate more than 10% against the Danish krone from the end of 2014 to the end of 2015, or that the oil price would fall further to as low as USD 35 per barrel and is now expected to remain low for some time? And the list goes on.
The Board of Directors has discussed all these events and their potential impact on Novozymes. One of the Board’s most important tasks is to ensure continuous evaluation of our strategic foundation in order to strengthen Novozymes’ position for the future. Although these are extraordinary events, there is nothing extraordinary about the procedure of looking into the company’s context and its strategy. We do that every year.Delivering world-leading innovations faster###FACT:BOARD###
Novozymes stands on a strong foundation. This is underlined by the 2015 results. Yes, there were challenges in 2015, but they would have been greater had we not had such a strong foundation. Both the Executive Leadership Team and the Board of Directors undoubtedly learned a lot in 2015. We have incorporated our learnings into the continuous efforts to strengthen the company’s strategic foundation, and we will continue to do so going forward.
"The Board believes that Novozymes has the right strategy, innovation capabilities and business model, and our focus right now is therefore to make sure we strengthen these while increasing our agility in this volatile period."
2015 only reinforced the importance of vigilance, flexibility and diversity. Vigilance – for responsiveness and speed in gathering information and insights from the market, internalizing them and using them to identify future opportunities – enables us to make the right decisions faster. Flexibility is important: to embrace changes in market dynamics and customer demands, set priorities and reprioritize as conditions change. Last but not least, diversity in our product, customer and market mix is essential for Novozymes. It always has been, and this was also evident in the 2015 results.
The challenges we saw in Bioenergy and Household Care were significant. Combined, these two industries make up approximately half of Novozymes’ sales, and they did not grow in 2015. Without the strong growth in the other half of the business – Agriculture & Feed and Food & Beverages – we would not have been able to deliver the results we did. Novozymes will keep a strong focus on further expanding and diversifying its growth pillars on the basis of world-leading innovation. Wider use of biological solutions generates value for customers and the environment, as well as long-term sustainable earnings growth to the benefit of customers, employees and shareholders alike.
In November 2015, Novozymes celebrated its 15th birthday. It has been an incredible growth journey based on a strong set of values and a culture built on trust and passion. Our purpose of finding biological answers for better lives in a growing world is a strong guide in our continued journey to create strong value based on a triple bottom line approach. It is regrettable that Novozymes has had to revise its organic sales growth target toward 2020, but in light of the events of 2015, the Board remains very optimistic about the future for both the company and its technology base. The Board believes that Novozymes has the right strategy, innovation capabilities and business model, and our focus right now is therefore to make sure we strengthen these while increasing our agility in this volatile period.
Novozymes will always face fluctuations. Markets go up and down. But despite these fluctuations, the Board still expects the triple bottom line, trust and passion to remain our guiding stars for the next 15 years. The Board is excited to be part of this journey and to contribute our own passion. We look forward to another year where we can help strengthen the company’s strategic foundation and platform for long-term sustainable top- and bottom-line growth.
|The Board of Directors|