At December 31, 2016, shareholders’ equity was DKK 11,745 million, up 1% from DKK 11,593 million at year-end 2015, as comprehensive income more than offset dividend payments and stock buyback in 2016.
Shareholders’ equity represented 63% of the balance sheet total, down from 65% at year-end 2015.
Return on equity
Return on equityThe return on equity ratio or ROE is a profitability ratio that measures firm’s ability to generate profits from its shareholders’ investments in the company. was 26.1%, up 1.4 percentage points from 24.7% in 2015. The increase was a result of higher net profit partly offset by an increase in equity.
The Board of Directors proposes that the Annual Shareholders' Meeting approve a dividend of DKK 4.00 per share for the 2016 financial year, an increase of 14% compared with 2015. This will result in an expected total dividend payment of approximately DKK 1,190 million, corresponding to a payout ratio of 39.0%.
At December 31, 2016, the holding of treasury stock was 12.4 million B shares, equivalent to 4.0% of the common stock.
Stock buyback program
In 2016, Novozymes bought back 6.8 million B shares with a transaction value of DKK 2,000 million under the stock buyback program initiated on February 15, 2016, and completed on November 15, 2016. The shares acquired within the program will be used to reduce the common stock and to meet obligations arising from employee share-based incentive programs.