Our long-term targets tell us if we are succeeding in helping the world become more sustainable, at the same time as ensuring Novozymes’ continued growth.
Long-term financial targets
Novozymes is investing to strengthen its leadership position within industrial biotechnology and unleash the potential of our innovation pipeline (see Business model). Once we successfully commercialize the programs in the pipeline, we are confident that we will grow the business in line with the historical performance. Since most of the programs will not have a commercial impact with significant revenueThe amount of money a company earns through the sale of goods and services. contribution for the next one to two years, Novozymes does not currently expect organic sales growthSales growth from existing business, excluding sales from acquiring new businesses, measured in local currency. rates in line with the historical performance to be achievable in 2017. Once the programs have been commercialized, these will be achievable again.
Novozymes’ other two long-term financial targets – EBIT marginEarnings before interest and tax as a percentage of revenue.at 26% or above and ROICEBIT after tax as a percentage of average invested capital. EBIT is adjusted for net foreign exchange gains/losses. including goodwill of 25% or above – are unchanged. The ROIC includes goodwill, but does not include impacts from acquisitions.
The company continues to find both targets challenging in light of the desire to invest in innovation, business development and further capacity expansions over the coming years within enzymeImprovement in water and energy efficiency (and reduction of CO2 intensity) is measured by the reduction in an index that comprises resource use divided by gross profit, compared with the same index for 2014 efficiency levels. Consequently, these indexes measure Novozymes’ ability to create value while reducing its environmental footprint. and microbeThe materiality assessment process identifies topics that pose both risks and opportunities for Novozymes’ business strategy, based on a systematic analysis of internal and external stakeholder perspectives. Relevant topics are those that may reasonably be considered important for reflecting the organization’s economic, environmental and social impacts, or for influencing the decisions of stakeholders, and therefore potentially merit inclusion in the report. production, as well as the new innovation campus in Denmark. As a result, the ROIC is expected to be below the long-term target for the next 2-3 years.
Long-term sustainability targets
We will keep our six long-term sustainability targets, to drive our actions toward supporting the UN Sustainable Development GoalsThe UN Sustainable Development Goals (SDGs), officially known as “Transforming our world: the 2030 Agenda for Sustainable Development,” are an intergovernmental set of 17 aspirational goals with 169 targets. The goals were officially implemented on September 25, 2015, at the United Nations Headquarters in New York. (SDGs). The 17 SDGs were adopted by more than 190 UN member states in September 2015. The SDGs represent the global community’s ambitions to end hunger, eradicate poverty, stop climate change and more. We believe the goals are not only necessary and important, but also point companies in the right direction to deliver solutions that contribute to sustainable growth.
On the following pages, we elaborate on our long-term sustainability targets.