Total sales in 2010 were DKK 9,724 million, an increase of 15% compared to 2009. Exchange rates impacted sales positively, and sales in LCY increased by 10%. Organically, sales grew by 11% compared to 2009.
Total costs excluding net financials and tax increased by 12% to DKK 7,676 million. Cost of goods sold and other operating costs increased, mainly as a result of higher volumes sold and higher activity levels, especially in R&D. Depreciation was also higher, partly due to one-off write-downs.
Gross profit increased by 15% compared to 2009, resulting in a gross profit margin of 55.7%, which is 0.1 %-point higher than the gross margin in 2009. Increased sales, productivity improvements, and higher capacity utilization in the enzyme plants all contributed positively to the increase in the gross margin, whereas a rise in depreciation and amortization impacted negatively compared to 2009. The higher level was mainly due to one-off write-downs of know-how and other assets of approximately DKK 65 million, of which approximately DKK 50 million was related to BioBusiness and mainly expensed in the fourth quarter of 2010.
The gross profit margin for Enzyme Business was 58.6%, an improvement of 1.2 %-points compared to 2009. The gross profit margin for BioBusiness was 12.0%, against 34.5% in 2009. Lower sales (including the absence of plectasin sales), and one-off write-downs in the biopharmaceutical ingredient business were the main reasons for the decrease.
Other operating costs increased by 9% to DKK 3,364 million in 2010. The ratio of other operating costs to sales was 35%, against 36% in 2009. Costs associated with the agreement to acquire EMD/Merck Crop BioScience were roughly DKK 30 million and were expensed in the fourth quarter of 2010 under Sales and distribution costs.
Other operating income increased by DKK 5 million to DKK 69 million in 2010. Most of this income was related to the grant from the US Department of Energy regarding Novozymes’ cellulosic biofuel enzyme project DECREASE.
Depreciation and amortization rose to DKK 679 million, an increase of DKK 115 million, or 20%, compared to 2009. The higher level of depreciation and amortization was primarily the result of one-off write-downs of know-how in BioBusiness.
EBIT increased by 25% to DKK 2,117 million, against DKK 1,688 million in 2009, and the EBIT margin was 21.8%, against 20.0% in 2009. Strong underlying sales growth in the enzyme business and the development in other operating costs impacted the EBIT margin positively, whereas one-off write-downs, mainly in BioBusiness, as well as costs related to the acquisition process for EMD/Merck Crop BioScience impacted EBIT and the EBIT margin negatively by approximately DKK 95 million and 1%-point respectively.
Net financial income was DKK 6 million in 2010, compared to net financial costs of DKK 67 million in 2009. Net currency hedging/revaluation gains were DKK 12 million higher compared to 2009, whereas other financials developed negatively by DKK 56 million, partly explained by the fair value adjustment of employee stock option schemes. Net interest expenses were DKK 23 million, a decrease of DKK 117 million compared to 2009.
At the end of 2010, net interest-bearing debt was DKK 346 million, against DKK 949 million at year-end 2009.
Profit before tax increased by 31% to DKK 2,123 million from DKK 1,621 million in 2009.
In 2010, the effective tax rate was 24.0%, against 26.3% in 2009. The lower tax rate was mainly the result of negotiated advance pricing agreements (APA).
Net profit increased by 35% to DKK 1,614 million from DKK 1,194 million in 2009. The strong growth in net profit was the result of stronger EBIT, a positive development in net financials, and a lower effective tax rate compared to 2009.