Net sales 2024 (2023)
EUR million
Denmark30.1(31.3)
Rest of Europe, Middle East & Africa1,336.7(805.6)
North America 1,261.8(813.4)
Latin America 480.8(308.2)
Asia Pacific724.1(443.7)
3,833.5
(2,402.2)
1.2 Basis of reporting
This section provides an overview of Novonesis\u2019 principal accounting policies, the critical account-ing estimates and judgments applied, and the impact of new or amended IFRS standards and interpretations.
The accounting policies described below apply to the consolidated financial statements as a whole. Accounting policies and critical accounting esti-mates and judgments are described in the notes to which they relate, in order to enhance under-standing. The descriptions of accounting policies in the notes form part of the overall description of accounting policies.
Basis of reporting
The consolidated financial statements of the Group have been prepared in accordance with IFRS Accounting Standards, as adopted by the EU, and additional requirements of the Danish Financial Statements Act. The financial year for the Group is January 1 \u2013 December 31.
The consolidated financial statements have been prepared on a going concern basis and under the historical cost convention, with the exception of derivatives, securities, contingent consideration
and share purchase liability, which are measured at fair value.
In 2024, the presentation currency for the consoli-dated financial statements was changed from Danish Kroner (DKK) to Euro (EUR). The compara-tive figures have been restated accordingly.
With the exception of the change in presentation currency, the accounting policies are unchanged from last year.
ACCOUNTING POLICIES
Combination with Chr. Hansen
On January 29, 2024, the statutory merger between Novozymes A/S and Chr. Hansen Holding A/S was completed.
The legal name of the combined company is Novozymes A/S, and the Group is referred to as Novonesis.
The merger has been accounted for as a business combination using the acquisition method under IFRS 3, where Novozymes A/S was identified as the acquirer and Chr. Hansen Holding A/S was
identified as the acquiree. Following the acquisi-tion method under IFRS 3, the Chr. Hansen results are included in the consolidated financial state-ments as of the merger date January 29, 2024.
The comparative figures reflect the historical financial information as reported by Novozymes A/S in the past, substantially impacting compara-bility between 2024 and prior years.
Consolidation
The consolidated financial statements comprise the financial statements of Novozymes A/S (the Parent Company) and subsidiaries controlled by Novozymes A/S, prepared in accordance with Group accounting policies. The consolidated financial statements are prepared by combining items of a uniform nature and subsequently elimi-nating intercompany transactions, internal share-holdings and balances, and unrealized intercom-pany profits and losses.
Non-controlling interests\u2019 share of subsidiaries\u2019 net profit for the year and equity are included in the Group\u2019s net profit and total equity, but are dis-closed separately.
Translation of foreign currencies
The functional currency of the parent company remains Danish Kroner (DKK).
Exchange rate differences arising between the transaction date and the reporting date are rec-ognized as Financial income or Financial costs.
Foreign currency transactions are translated into the functional currency defined for each company using the exchange rates prevailing at the trans-action date. Monetary items denominated in for-eign currencies are translated into the functional currency at the exchange rates prevailing at the reporting date.
Financial statements of foreign subsidiaries are translated into EUR at the exchange rates prevail-ing at the reporting date for assets and liabilities, and at average exchange rates for income state-ment items.
The following exchange rate differences, arising from translation using the exchange rate prevail-ing at the reporting date, are recognized in Other comprehensive income:
\u2022\tTranslation of foreign subsidiaries\u2019 net assets at the beginning of the year
\u2022\tTranslation of foreign subsidiaries\u2019 income statements from average exchange rates
iXBRL reporting
Novozymes A/S is required to file its annual report in the European Single Electronic Format (\u2018ESEF\u2019), and the Annual Report is therefore prepared in the XHTML format, which can be displayed in a standard browser. The primary statements, the notes in the consolidated financial statements, and the sustainability statements are tagged using inline eXtensible Business Reporting Language (iXBRL). The iXBRL tags comply with the ESEF tax-onomy, which is included in the ESEF Regulation and developed based on the IFRS taxonomy pub-lished by the IFRS Foundation. Where a financial statement line item is not defined in the ESEF tax-onomy, an extension to the taxonomy has been created. Extensions are anchored to elements in the ESEF taxonomy, except for extensions that are subtotals.
The Annual Report submitted to the Danish Financial Supervisory Authority consists of the XHTML document together with certain technical files, all included in a file named NOVOZYMES-2024-12-31-en.zip.
Impact of new accounting standards
Novonesis has adopted the following new or amended standards and interpretations from January 1, 2024:
\u2022\tAmendments to IAS 1 \u2013 Presentation of Financial Statements: Classification of Liabilities as Current or Non-Current clarify that the clas-sification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period.
\u2022\tAmendment to IAS 1 \u2013 Presentation of Financial Statements: Non-current liabilities with Covenants specifies that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability and explains that rights are in existence if covenants are complied with at the end of the reporting period.
\u2022\tAmendment to IAS 7 \u2013 Statement of Cash Flows and IFRS 7 \u2013 Financial Instruments: Supplier Finance Agreements requires an entity to dis-close qualitative and quantitative information about its supplier finance arrangements.
\u2022\tAmendments to IFRS 16 \u2013 Leases: Lease Liability in a Sale and Leaseback clarify how a seller-lessee subsequently measures sale and leaseback transactions.
The adoption of the new and amended standards and interpretations has not had a significant impact on recognition, measurement or disclo-sures in the consolidated financial statements for 2024, and is not anticipated to have a significant impact on future periods.
The operating segments are consistent with the internal reporting to the Executive Management and the Board of Directors. The Executive Management is considered the chief operating decision-maker.
The operating segments are managed on the basis of adjusted EBITDA as a profitability measure. Management does not receive reporting on assets and liabilities by reporting segments.
Segment income and segment costs are those items that, in the internal management reporting, are directly attributable to individ-ual segments or can be indirectly allocated to individual segments on a reliable basis.
Novonesis produces a wide range of industrial enzymes, functional proteins and microorgan-isms. Net sales include the sale of goods and related services and royalties, and these are rec-ognized at an amount that reflects the consider-ation to which Novonesis expects to be entitled. Net sales from the straightforward sale of goods to customers are recognized when control of the goods is transferred to the customer, i.e., when goods are delivered. Variable considera-tions are included in net sales to the extent that they are not subject to significant uncertainty.
The performance obligations in the contracts are to deliver products to customers, and each batch delivered is considered a separate per-formance obligation, as each batch is distinct.
Rebates
Products are sometimes sold with a rebate. A rebate agreement can be set up in various ways, but common to all agreements is that net sales are recognized based on the price specified in
the contract, net of the estimated rebate. Rebates are estimated based on experience, as well as information related to expected orders 3\u201312 months in advance. The estimated rebates are reassessed at the end of each reporting period.
Returns
A right if return is granted in a few of Novonesis\u2019 markets. No net sales are recognized for the goods expected to be returned, as a refund lia-bility is recognized. Estimates of the expected level of returns are based on analysis of histori-cal returns and knowledge of the relevant mar-kets/products. These estimates are updated at the end of each reporting period. As the goods returned are usually scrapped, no inventory asset is recognized.
Profit split
Novonesis has entered into partnerships where Novonesis manufactures and sells products to a partner, who undertakes the sale to end cus-tomers. The profit on products sold to end cus-tomers is shared between the partner and Novonesis, based on predetermined profit-shar-ing mechanisms.
Net sales from these arrangements consist of the sale of products to the partner and the shared profit, and are recognized in full when the goods are delivered to the partner. This is done by calculating the expected profit based on insights, experience and other input factors. The calculated profit is recognized as a con-tract asset or contract liability until an invoice is issued. The profit realized is settled periodically.
Sales via agents
Novonesis has entered into commission agree-ments where agents undertake sales to third parties in return for a commission on realized sales. Net sales from such agreements are rec-ognized when the goods are delivered to the end customer, as the nature of the performance obligation is to provide the specified goods.
Other
Net sales collected on behalf of third parties are not recognized as net sales.
Novonesis\u2019 obligation to provide a refund for products that are not of the agreed quality or according to agreed specifications under the standard warranty terms is recognized as con-tract liabilities.
A trade receivable is recognized when the cus-tomer obtains control of the goods and an invoice is issued, as this is the point in time when the consideration becomes unconditional and only the passage of time is required before payment is due. Typical payment terms are around 60 days.
Contract liabilities consist of advance pay-ments, deferred sales and liabilities for refund goods. Contract liabilities are recognized as net sales, as the performance obligations under the contracts are fulfilled.
Almost all performance obligations in Novonesis have an expected term of one year or less.
Special items are used in the presenta-tion of the income statement and include significant individual items, income and cost, of a special nature. These items are classified separately in the income state-ment to provide transparency regarding the operating performance of Novonesis.
Special items include significant integra-tion and transaction costs, restructuring expenses and related impairment losses, and will include all significant non-recur-ring income or costs not related to Novonesis\u2019 recurring operating profit.
Corporation tax, comprising the current tax liability, the change in deferred tax for the year, and possible adjustments relating to prior years, is recognized in the income statement, unless it relates to items recognized either in Other comprehensive income or directly in equity. Uncertain tax positions are assessed individually and recognized if it is probable that an amount will be paid or received. Deferred tax is measured using the balance sheet liability method, and comprises all tem-porary differences between the carrying amount and the tax base of assets and liabili-ties. No deferred tax is recognized for good-will, unless amortization of goodwill for tax pur-poses is allowed. The tax value of tax loss carryforwards is included in the calculation of deferred tax, to the extent that the tax losses can be expected to be utilized in the future.
Deferred tax is measured according to cur-rent tax rules and at the tax rate expected to be in force on reversal of temporary differ-ences. Changes in deferred tax due to tax rate changes are recognized in the income statement, unless they relate to items recog-nized either in Other comprehensive income or directly in equity.
Novonesis is applying the temporary relief from accounting for deferred taxes, arising from the implementation of the Pillar Two rules issued by the OECD.
Intangible assets are initially measured at cost and are subsequently measured at cost less accumulated amortization and impairment losses.
Intangible assets acquired in a business combi-nation are recognized at fair value at the acqui-sition date. Goodwill is only arising from busi-ness combinations and is measured in the purchase price allocation.
Research costs are recognized in the income statement in the period in which they are incurred. Development costs are recognized in the income statement when incurred, unless the criteria for capitalization are met.
Costs associated with the development of sub-stantial software projects are capitalized if the costs are related to the development of new and improved systems.
Amortization is based on the straight-line method over the estimated useful lives when the assets are available for use.
\u2022\tTechnology and strain library are amortized over a period of 7-25 years. The useful lives of patents and trademarks are normally identical to the patent period. Licenses are amortized over the contractual period
\u2022\tCustomer relationships are amortized over a period of 7-25 years
\u2022\tSoftware and other IT projects are amor-tized over a period of 3-10 years
\u2022\tProduct brands are amortized over a period of 15-20 years
\u2022\tOther intangible assets are amortized over a period of 3-20 years
Estimated useful lives and amortization meth-ods are reassessed annually.Goodwill and intangible assets not available for use are not amortized but are subject to an annual impairment test, or when indicators of impairment are identified.
Goodwill is allocated to the cash-generating units as identified by Management, representing the smallest group of assets which together generate incoming cash flow from the continued use of the assets, and which are independent of cash flow from other assets or groups of assets.
The Group regularly reviews the carrying amounts of the intangible assets, subject to amortization, to determine whether there is an indication of impairment. An impairment loss is measured based on discounted projected cash flows and is recognized to the extent that the asset\u2019s carrying amount exceeds its estimated recoverable amount. Impairments on intangible assets, other than goodwill, are reviewed at each reporting date for possible reversal.
Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses. Borrowing costs in respect of construction of major assets are capitalized.
Assets under construction include prepay-ments for property, plant and equipment, and assets under construction.
Depreciation is based on the straight-line method over the expected useful lives of the assets, as follows:
\u2022\tBuildings: 12\u201350 years
\u2022\tPlant and machinery: 5\u201325 years
\u2022\tOther equipment: 3\u201318 years
The residual values and useful lives of the assets are reviewed on an annual basis and adjusted if necessary at each reporting date. Climate-related matters, including the com-mitment to reach net-zero emissions, were considered to the extent possible when reviewing the useful lives of property, plant and equipment.
The Group regularly reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is esti-mated in order to determine the extent of any impairment loss. If the recoverable amount of an asset is estimated to be lower than its car-rying amount, the carrying amount is reduced to the recoverable amount. Impairment losses are reversed only to the extent of changes in the assumptions and estimates underlying the impairment calculation.
Lease assets
Lease assets are \u2018right-of-use assets\u2019 from lease agreements. If, at inception, it is assessed that a contract contains a lease, a lease asset is rec-ognized. Lease assets are initially measured at the present value of future lease payments, plus the cost of obligations to refurbish the asset. Payments include fixed payments, varia-ble lease payments depending on an index or a rate, and the exercise price of purchase options that are reasonably certain to be exercised.
Lease assets are depreciated using the straight-line method over the shorter of the expected lease term and the useful life of the underlying asset. Lease assets are tested for impairment whenever there is an indication that the assets may be impaired.
Lease assets are depreciated as follows:
\u2022\tBuildings: 1\u201325 years
\u2022\tLand: 10\u201390 years
\u2022\tPlant and machinery: 1\u201310 years
\u2022\tOther equipment: 1\u201310 years
Short-term leases and leases of low value are recognized as expenses in the income state-ment on a straight-line basis over the lease term.
Novonesis\u2019 portfolio of leases covers leases of land, buildings, plant and machinery, and other equipment such as cars and transportation containers.
Lease liabilities
Lease liabilities are initially recognized at the present value of future lease payments, includ-ing payments from extension or purchase options that are considered reasonably certain to be exercised.
The lease liability is measured using the implicit borrowing rate in the contracts or, where this is not available, the marginal borrowing rate in the countries in which Novonesis operates. Novonesis applies a single discount rate to portfolios of leases in the countries in which Novonesis operates, based on contract cur-rency and loan periods.
If a lease contract is modified, the lease liability is remeasured. For building leases, lease terms are estimated, taking the size of the building and its strategic importance into consideration. Novonesis has entered into several open-ended building leases and building leases with extension options. Lease terms of such agree-ments are estimated based on the strategic importance of the buildings and the estimated time frame necessary to vacate the premises. The estimated lease term is reassessed at each reporting date. The estimated lease terms for such contracts do not exceed 25 years.
Business combinations are accounted for using the acquisition method. The purchase price includes the consideration transferred, shares issued and fair value at the acquisition date of any contingent consideration arrangement.
The purchase price is allocated to the identifi-able assets and liabilities, non-controlling interests in the acquiree and contingent liabili-ties assumed, which are measured at fair value at the date of acquisition by applying relevant valuation methods.
Goodwill is initially measured at cost, being the excess of the consideration transferred over the net identifiable assets acquired and liabilities assumed.
If, on the acquisition date, there are any uncer-tainties with respect to identifying or measur-ing the acquired net assets, the initial recogni-tion will be made on the basis of estimated fair values. The estimated fair values may be adjusted or additional assets or liabilities may be recognized during the measurement period of up to 12 months to reflect new infor-mation that becomes available about condi-tions prevailing on the acquisition date. Such adjustments are made to the initial purchase price allocation as a restatement of prior infor-mation, including to the amount of goodwill.
Acquisition-related costs are expensed as incurred, except if related to the issue of equity securities.
Inventories are measured at the lower of cost determined on a first-in first-out basis and net realizable value.
The cost of work in progress and finished goods comprises direct production costs such as raw materials and consumables; energy and labor directly attributable to pro-duction; and indirect production costs such as employee costs, maintenance, and depre-ciation of plants, etc.
If the expected selling price, less any comple-tion costs and costs to execute the sale (net realizable value) of inventories, is lower than the carrying amount, inventories are written down to net realizable value.
Novonesis has entered into a few agreements where Novonesis supplies goods to a cus-tomer\u2019s premises but retains title to the inventory until the goods are consumed in the customer\u2019s production. As long as Novonesis retains title to the goods, they are recognized as inventory.
Trade receivables are measured at amor-tized cost less allowance for lifetime expected credit losses.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteris-tics and days past due. Furthermore, an allowance for lifetime expected credit losses for trade receivables is recog-nized on initial recognition.
Trade receivables are written off when all possible options have been exhausted and there is no reasonable expectation of recovery.
The cost of allowances for expected credit losses and write-offs for trade receivables is recognized in Sales and distribution costs.
Non-current assets are classified as assets held for sale, when their carrying amounts are to be recovered principally through a sale transaction and a sale is considered highly probable.
Such assets are stated at the lower of the carrying amount and fair value less costs to sell.
Financial income and Financial costs comprise interest income and interest costs; realized and unrealized foreign exchange gains and losses; gains and losses on other financial assets; and fair value adjustments of cash-settled share-based incentive programs and contin-gent consideration, which are offset against Other liabilities and fair value adjustments of Other financial assets.
Interest income and Interest costs are measured at amortized cost for financial assets and liabilities.
Financial income and Financial costs also include fair value adjustments of deriva-tives used to hedge assets and liabilities, and income and costs relating to cash flow hedges that are transferred from Other comprehensive income on realiza-tion of the hedged item.
Hedge accounting consists of positive and negative fair values of derivatives, which are recognized in the balance sheet under Other financial assets and Borrowings, respectively. Derivatives are recognized at the transaction date.
Derivatives used for fair value hedges are measured at fair value at the reporting date, and value adjustments are recognized as Financial income or Financial costs. Derivatives used for cash flow hedges and
hedges of net investments in subsidiaries are measured at fair value at the reporting date, and value adjustments are recognized in Other comprehensive income.
Income and costs relating to cash flow hedges and hedges of net investments in subsidiaries are transferred from Other com-prehensive income when the hedged trans-action occurs. On realization, foreign exchange contracts and interest rate swaps are recognized as Financial income or Financial costs, and electricity price agree-ments covering production-related electricity are recognized as part of Cost of goods sold.
The Group has established share-based incentive programs, comprising equity-set-tled and cash-settled programs.
The fair value of the employee services received in exchange for the grant of share options and performance shares is measured with reference to the fair value of the share options and performance shares granted. The fair value is measured using the Black\u2013Scholes option-pricing model.
The fair value of share-based payment at the grant date is recognized as an employee cost over the period in which the share options and performance shares vest. In measuring the
fair value of the employee services, account is taken of the number of employees expected to gain entitlement to the options and perfor-mance shares, as well as the number of options and performance shares the employ-ees are expected to gain. This estimate is adjusted at the end of each reporting period, such that only the number of options and per-formance shares to which employees are enti-tled or expected to be entitled is recognized.
The value of equity-settled programs is recog-nized in equity. The value of cash-settled pro-grams, which are recognized as Other liabili-ties, is adjusted to fair value at the end of each reporting period, and the subsequent adjust-ment is recognized in the income statement under Financial income or Financial costs.
Share purchase liability is Novonesis\u2019 obligation to purchase non-controlling interests in subsidiaries, and is remeas-ured at fair value at each reporting date. The fair value of the most likely redemp-tion amount is initially recognized within liabilities, with a corresponding charge directly to Equity. Interest and fair value adjustments resulting from events after the initial recognition are recognized in Equity under Retained earnings.The consolidated statement of cash flows, which is compiled using the indirect method, shows cash flows from operating, investing and financing activities, and the Group\u2019s cash and cash equivalents at the beginning and end of the year.
Cash flows from operating activities comprise net profit adjusted for non-cash items, paid financial items, corporate income tax paid and change in working capital.
Cash flows from investing activities comprise payments relating to the acquisition and sale
of companies and non-controlling interests, intangible assets, and property, plant and equipment.
Cashs flow from financing activities comprise proceeds from borrowings, repayment of principal on interest-bearing debt, repayment of lease liabilities, payment of dividends, pro-ceeds from share issues, and the sale of treasury shares and other securities.
Cash and cash equivalents comprise cash at bank and in hand, less current bank loans due on demand.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__48": { "value": "Basis of reporting
The consolidated financial statements of the Group have been prepared in accordance with IFRS Accounting Standards, as adopted by the EU, and additional requirements of the Danish Financial Statements Act. The financial year for the Group is January 1 \u2013 December 31.
The consolidated financial statements have been prepared on a going concern basis and under the historical cost convention, with the exception of derivatives, securities, contingent consideration
and share purchase liability, which are measured at fair value.
In 2024, the presentation currency for the consoli-dated financial statements was changed from Danish Kroner (DKK) to Euro (EUR). The compara-tive figures have been restated accordingly.
With the exception of the change in presentation currency, the accounting policies are unchanged from last year.
ACCOUNTING POLICIES
Combination with Chr. Hansen
On January 29, 2024, the statutory merger between Novozymes A/S and Chr. Hansen Holding A/S was completed.
The legal name of the combined company is Novozymes A/S, and the Group is referred to as Novonesis.
The merger has been accounted for as a business combination using the acquisition method under IFRS 3, where Novozymes A/S was identified as the acquirer and Chr. Hansen Holding A/S was
identified as the acquiree. Following the acquisi-tion method under IFRS 3, the Chr. Hansen results are included in the consolidated financial state-ments as of the merger date January 29, 2024.
The comparative figures reflect the historical financial information as reported by Novozymes A/S in the past, substantially impacting compara-bility between 2024 and prior years.
Consolidation
The consolidated financial statements comprise the financial statements of Novozymes A/S (the Parent Company) and subsidiaries controlled by Novozymes A/S, prepared in accordance with Group accounting policies. The consolidated financial statements are prepared by combining items of a uniform nature and subsequently elimi-nating intercompany transactions, internal share-holdings and balances, and unrealized intercom-pany profits and losses.
Non-controlling interests\u2019 share of subsidiaries\u2019 net profit for the year and equity are included in the Group\u2019s net profit and total equity, but are dis-closed separately.
Translation of foreign currencies
The functional currency of the parent company remains Danish Kroner (DKK).
Exchange rate differences arising between the transaction date and the reporting date are rec-ognized as Financial income or Financial costs.
Foreign currency transactions are translated into the functional currency defined for each company using the exchange rates prevailing at the trans-action date. Monetary items denominated in for-eign currencies are translated into the functional currency at the exchange rates prevailing at the reporting date.
Financial statements of foreign subsidiaries are translated into EUR at the exchange rates prevail-ing at the reporting date for assets and liabilities, and at average exchange rates for income state-ment items.
The following exchange rate differences, arising from translation using the exchange rate prevail-ing at the reporting date, are recognized in Other comprehensive income:
\u2022\tTranslation of foreign subsidiaries\u2019 net assets at the beginning of the year
\u2022\tTranslation of foreign subsidiaries\u2019 income statements from average exchange rates
iXBRL reporting
Novozymes A/S is required to file its annual report in the European Single Electronic Format (\u2018ESEF\u2019), and the Annual Report is therefore prepared in the XHTML format, which can be displayed in a standard browser. The primary statements, the notes in the consolidated financial statements, and the sustainability statements are tagged using inline eXtensible Business Reporting Language (iXBRL). The iXBRL tags comply with the ESEF tax-onomy, which is included in the ESEF Regulation and developed based on the IFRS taxonomy pub-lished by the IFRS Foundation. Where a financial statement line item is not defined in the ESEF tax-onomy, an extension to the taxonomy has been created. Extensions are anchored to elements in the ESEF taxonomy, except for extensions that are subtotals.
The Annual Report submitted to the Danish Financial Supervisory Authority consists of the XHTML document together with certain technical files, all included in a file named NOVOZYMES-2024-12-31-en.zip.
Critical accounting estimates and judgments
The preparation of the consolidated financial statements requires Management to make esti-mates and assumptions that can have a significant effect on the application of policies and reported amounts of assets, liabilities, income, expenses and related disclosures. When determining esti-mates and assumptions, Management has assessed the qualitative and quantitative impact of climate-related matters, which is not currently assessed to have a significant impact on esti-mates and assumptions. The estimates and underlying assumptions are based on historical experience and various other factors. Actual results may differ from these estimates.
The application of the Group\u2019s accounting policies may require Management to make judgments that can have a significant effect on the amounts rec-ognized in the consolidated financial statements. Management judgment is required in particular
when assessing the substance of transactions that have a complicated structure or legal form.
These critical accounting estimates and judg-ments could potentially have a significant impact on the consolidated financial statements.
The estimates and underlying assumptions are reviewed on an ongoing basis. Changes in
estimates may be necessary if there are changes in the circumstances on which the estimate was based, or if more detailed information becomes available. Such changes are recognized in the period in which the estimate in question is revised.
The table shows critical accounting estimates and judgments, and their level of potential impact on the consolidated financial statements:
Note
Critical accounting estimates and judgments
Estimate/ judgment
Potential impact from estimates and judgments
2.2 Net sales
Revenue recognition
Estimate
2.4 Special items
Classification of special items
Judgment
3.1 Goodwill and other intangible assets
Valuation of goodwill and intangible assets
Estimate
3.4 Business acquisitions
Fair value measurement
Estimate
4.1 Inventories
Cost of work in progress and finished goods
Estimate
6.5 Non-controlling interests
Fair value measurement
Estimate
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__49": { "value": "The consolidated financial statements of the Group have been prepared in accordance with IFRS Accounting Standards, as adopted by the EU, and additional requirements of the Danish Financial Statements Act. The financial year for the Group is January 1 \u2013 December 31. ", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__50": { "value": "The consolidated financial statements have been prepared on a going concern basis and under the historical cost convention, with the exception of derivatives, securities, contingent consideration
and share purchase liability, which are measured at fair value.
In 2024, the presentation currency for the consoli-dated financial statements was changed from Danish Kroner (DKK) to Euro (EUR). The compara-tive figures have been restated accordingly.
With the exception of the change in presentation currency, the accounting policies are unchanged from last year.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__43": { "value": "Consolidation
The consolidated financial statements comprise the financial statements of Novozymes A/S (the Parent Company) and subsidiaries controlled by Novozymes A/S, prepared in accordance with Group accounting policies. The consolidated financial statements are prepared by combining items of a uniform nature and subsequently elimi-nating intercompany transactions, internal share-holdings and balances, and unrealized intercom-pany profits and losses.
Non-controlling interests\u2019 share of subsidiaries\u2019 net profit for the year and equity are included in the Group\u2019s net profit and total equity, but are dis-closed separately.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__44": { "value": "Translation of foreign currencies
The functional currency of the parent company remains Danish Kroner (DKK).
Exchange rate differences arising between the transaction date and the reporting date are rec-ognized as Financial income or Financial costs.
Foreign currency transactions are translated into the functional currency defined for each company using the exchange rates prevailing at the trans-action date. Monetary items denominated in for-eign currencies are translated into the functional currency at the exchange rates prevailing at the reporting date.
Financial statements of foreign subsidiaries are translated into EUR at the exchange rates prevail-ing at the reporting date for assets and liabilities, and at average exchange rates for income state-ment items.
The following exchange rate differences, arising from translation using the exchange rate prevail-ing at the reporting date, are recognized in Other comprehensive income:
\u2022\tTranslation of foreign subsidiaries\u2019 net assets at the beginning of the year
\u2022\tTranslation of foreign subsidiaries\u2019 income statements from average exchange rates
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__45": { "value": "Translation of foreign currencies
The functional currency of the parent company remains Danish Kroner (DKK).
Exchange rate differences arising between the transaction date and the reporting date are rec-ognized as Financial income or Financial costs.
Foreign currency transactions are translated into the functional currency defined for each company using the exchange rates prevailing at the trans-action date. Monetary items denominated in for-eign currencies are translated into the functional currency at the exchange rates prevailing at the reporting date.
Financial statements of foreign subsidiaries are translated into EUR at the exchange rates prevail-ing at the reporting date for assets and liabilities, and at average exchange rates for income state-ment items.
The following exchange rate differences, arising from translation using the exchange rate prevail-ing at the reporting date, are recognized in Other comprehensive income:
\u2022\tTranslation of foreign subsidiaries\u2019 net assets at the beginning of the year
\u2022\tTranslation of foreign subsidiaries\u2019 income statements from average exchange rates
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__46-1": { "value": "Critical accounting estimates and judgments
The preparation of the consolidated financial statements requires Management to make esti-mates and assumptions that can have a significant effect on the application of policies and reported amounts of assets, liabilities, income, expenses and related disclosures. When determining esti-mates and assumptions, Management has assessed the qualitative and quantitative impact of climate-related matters, which is not currently assessed to have a significant impact on esti-mates and assumptions. The estimates and underlying assumptions are based on historical experience and various other factors. Actual results may differ from these estimates.
The application of the Group\u2019s accounting policies may require Management to make judgments that can have a significant effect on the amounts rec-ognized in the consolidated financial statements. Management judgment is required in particular
when assessing the substance of transactions that have a complicated structure or legal form.
These critical accounting estimates and judg-ments could potentially have a significant impact on the consolidated financial statements.
The estimates and underlying assumptions are reviewed on an ongoing basis. Changes in
estimates may be necessary if there are changes in the circumstances on which the estimate was based, or if more detailed information becomes available. Such changes are recognized in the period in which the estimate in question is revised.
The table shows critical accounting estimates and judgments, and their level of potential impact on the consolidated financial statements:
Note
Critical accounting estimates and judgments
Estimate/ judgment
Potential impact from estimates and judgments
2.2 Net sales
Revenue recognition
Estimate
2.4 Special items
Classification of special items
Judgment
3.1 Goodwill and other intangible assets
Valuation of goodwill and intangible assets
Estimate
3.4 Business acquisitions
Fair value measurement
Estimate
4.1 Inventories
Cost of work in progress and finished goods
Estimate
6.5 Non-controlling interests
Fair value measurement
Estimate
Novonesis has entered into various sales agreements, including agreements where Novonesis manufactures and sells products to a partner, who undertakes the sales to end customers, and where the profit on products
sold to end customers is shared between the partner and Novonesis, based on predeter-mined profit-sharing mechanisms.
Recognition of net sales requires estimates by Management, in connection with deter-mining the appropriate revenue recognition and the timing of recognition.
The use of special items entails manage-ment judgment in the separation from other items in the income statement.
Management considers individual items in order to ensure that special items include significant non-recurring income or costs not related to Novonesis\u2019 recur-ring operating profit.
Management assesses the risk of impairment of the Group\u2019s goodwill and intangible assets. This requires judgment in relation to the iden-tification of impairment indicators as well as cash-generating units (CGUs) and the underly-ing assumptions applied in impairment testing.
Goodwill is allocated to our operating seg-ments Food & Health Biosolutions and Planetary Health Biosolutions based on expected future cash flow from the assets acquired, as well as synergies identified.
Goodwill and intangibles not available for use are tested annually.
Impairment tests are based on Management\u2019s projections and anticipated net present value of estimated future cash flows (value-in-use).
The calculation of value-in-use is based on the discounted cash flow method, using esti-mates of future cash flows from the continu-ing use. The key parameters used in deter-mining value-in-use are the sales growth, adjusted EBITDA margins, discount rate and growth expectations for the terminal period.
Key accounting estimates are used in determin-ing the fair value of assets acquired in business combinations and requires Management judg-ments of whether intangible assets acquired in a business combination are separately identifia-ble. This involves assessing if the identified technology-related assets, customer relation-ships and brands meet the separability criterion, which means they can be separated from the acquiree and sold, transferred, licensed, rented, or exchanged independently.
The application of the acquisition method of accounting involves the use of significant esti-mates, because the identifiable net assets of the acquiree are recognized at their fair value, for which observable market prices are typically not available. This is particularly relevant for assets which require the use of valuation techniques
typically based on estimates of present value of future uncertain cash flows.
The fair value is based on assumptions made by market participants, which in the business com-bination is assessed to be a company with simi-lar needs and capacity to acquire assets of the same nature and size as those of the acquired business.
The following valuation techniques have been applied in the fair value assessment of the sig-nificant assets acquired:
\u2022\tProduct technology, and research and devel-opment projects: the Multi-period Excess Earnings Method (MEEM)
\u2022\tProcess technology and strain library: the Relief from Royalty (RfR) method
\u2022\tCustomer relationships: the Allowed Margin Method
\u2022\tBrands: the Relief from Royalty (RfR) method
Inputs used in these valuation methods for assessing net present value of intangible assets include revenue and cash flow projections, valuation period, discount factor, as well as churn and royalty rates.
The valuation of property, plant and equipment identified in the acquisition is mainly based on the depreciated replacement cost method of the significant production facilities located in Denmark, France, Germany and the U.S. The depreciated replacement cost method reflects adjustments for physical deterioration, as well as functional and economic obsolescence. Land has been valued using the market approach based on comparable transactions.
Fair value of inventories is based on expected selling price less costs to complete and a rea-sonable margin.
Management has engaged external experts to support the purchase price allocation and fair value assessment.
Work in progress and finished goods are meas-ured at cost, including indirect production costs. Indirect production costs are assessed on an ongoing basis to ensure reliable
measurement of employee costs, capacity utili-zation, cost drivers and other relevant factors. Changes in these parameters may have an impact on the gross margin and the overall val-uation of work in progress and finished goods.
Fair value of the share purchase liability is based on non-observable data (level 3 input) that requires Management to make estimates and use assumptions.
Estimates are based on updated informa-tion after the initial recognition of the lia-bility, such as budgets, sales forecasts, discount rates, etc. The fair value of the share purchase liability is calculated as the present value of the most probable redemption amount using the discounted cash flow method. The determined fair value is associated with uncertainty and may be subject to subsequent adjustments.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__51": { "value": "Impact of new accounting standards
Novonesis has adopted the following new or amended standards and interpretations from January 1, 2024:
\u2022\tAmendments to IAS 1 \u2013 Presentation of Financial Statements: Classification of Liabilities as Current or Non-Current clarify that the clas-sification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period.
\u2022\tAmendment to IAS 1 \u2013 Presentation of Financial Statements: Non-current liabilities with Covenants specifies that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability and explains that rights are in existence if covenants are complied with at the end of the reporting period.
\u2022\tAmendment to IAS 7 \u2013 Statement of Cash Flows and IFRS 7 \u2013 Financial Instruments: Supplier Finance Agreements requires an entity to dis-close qualitative and quantitative information about its supplier finance arrangements.
\u2022\tAmendments to IFRS 16 \u2013 Leases: Lease Liability in a Sale and Leaseback clarify how a seller-lessee subsequently measures sale and leaseback transactions.
The adoption of the new and amended standards and interpretations has not had a significant impact on recognition, measurement or disclo-sures in the consolidated financial statements for 2024, and is not anticipated to have a significant impact on future periods.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__52": { "value": "Impact of new accounting standards
Novonesis has adopted the following new or amended standards and interpretations from January 1, 2024:
\u2022\tAmendments to IAS 1 \u2013 Presentation of Financial Statements: Classification of Liabilities as Current or Non-Current clarify that the clas-sification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period.
\u2022\tAmendment to IAS 1 \u2013 Presentation of Financial Statements: Non-current liabilities with Covenants specifies that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability and explains that rights are in existence if covenants are complied with at the end of the reporting period.
\u2022\tAmendment to IAS 7 \u2013 Statement of Cash Flows and IFRS 7 \u2013 Financial Instruments: Supplier Finance Agreements requires an entity to dis-close qualitative and quantitative information about its supplier finance arrangements.
\u2022\tAmendments to IFRS 16 \u2013 Leases: Lease Liability in a Sale and Leaseback clarify how a seller-lessee subsequently measures sale and leaseback transactions.
The adoption of the new and amended standards and interpretations has not had a significant impact on recognition, measurement or disclo-sures in the consolidated financial statements for 2024, and is not anticipated to have a significant impact on future periods.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__53": { "value": "New standards and interpretations not yet adoptedIASB has issued new or amended accounting standards and interpretations that have not yet become effective and have consequently not been implemented in the consolidated financial statements for 2024. Novonesis expects to adopt these accounting standards and interpretations as they become mandatory. Except for IFRS 18 - Presentation and Disclosure in Financial Statements, none of these are expected to have a significant impact on the consolidated financial statements.IFRS 18 - Presentation and Disclosure in Financial Statements, with effective date on or after 1 January 2027, sets out requirements for presenta-tion and disclosure of financial statements to give investors more transparent and comparable infor-mation about financial performance. IFRS 18 is not expected to impact recognition or measurement, but is expected to change the presentation of certain items, including definitions of certain required subtotals.", "dimensions": { "concept": "ifrs-full:ExplanationOfNotAppliedNewStandardsOrInterpretations", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__54": { "value": "2.1 Segments\t
Operating segments
Following the combination of Novozymes and Chr. Hansen in 2024, the segment disclosures have been changed to reflect the internal reporting and steering in Novonesis for the combined busi-nesses. Novonesis has two operating segments: Food & Health Biosolutions and Planetary Health Biosolutions.
The activities in the two segments include manu-factoring, sales, distribution, research and develop-ment. There are no internal sales between the two segments. Segment costs consist of costs directly attributable to the individual segments and costs allocated through the use of allocation keys. Segment profitability is measured on the basis of adjusted EBITDA.
Comparative figures have been restated to reflect the new segmentation. However, the comparative figures reflect the historical financial information as reported by Novozymes A/S in the past, sub-stantially impacting the comparability between 2023 and 2024.
Sales areas
Food & Health Biosolutions consists of two sales areas: Food & Beverages and Human Health. Planetary Health Biosolutions consists of two sales areas: Household Care and Agriculture, Energy & Tech.
Food & Health Biosolutions
\u2022 Food & Beverages combines Novozymes\u2019 Food & Beverage and Chr. Hansen\u2019s Food Cultures & Enzymes.
\u2022 Human Health combines Novozymes\u2019 Human Health and Advanced Specialty Proteins busi-nesses, and Chr. Hansen\u2019s Human Health busi-nesses including HMO.
Planetary Health Biosolutions
\u2022 Household Care includes Novozymes\u2019 Household Care.
\u2022 Agriculture, Energy & Tech combines Novozymes\u2019 Bioenergy, Agriculture & Animal Health/Nutrition, Grain & Tech Processing and Chr. Hansen\u2019s Animal & Plant Health.
2024 | 2023 | |||||
EUR million | Food & Health Biosolutions | Planetary Health Biosolutions | Total | Food & Health Biosolutions | Planetary Health Biosolutions | Total |
Net sales | 1,668.1 | 2,165.4 | 3,833.5 | 530.1 | 1,872.1 | 2,402.2 |
Organic sales growth, % | 8% | 9% | 8% | (2)% | 8% | 5% |
Gross profit | 659.2 | 1,150.3 | 1,809.5 | 317.5 | 987.3 | 1,304.8 |
Gross margin, % | 39.5% | 53.1% | 47.2% | 59.9% | 52.7% | 54.3% |
Adjusted EBITDA | 586.7 | 800.3 | 1,387.0 | 150.1 | 647.2 | 797.3 |
Adjusted EBITDA margin, % | 35.2% | 37.0% | 36.2% | 28.3% | 34.6% | 33.2% |
Depreciation, amortization and impairment losses | ||||||
(597.4) | (186.4) | |||||
Special items, excluding depreciation, amortization and impairment losses | ||||||
(104.7) | (77.3) | |||||
PPA inventory step-up | (183.9) | - | ||||
Operating profit (EBIT) | 501.0 | 533.6 | ||||
Share of result in associates | ||||||
(3.5) | (2.4) | |||||
Financial items, net | (80.4) | (6.5) | ||||
Profit before tax | 417.1 | 524.7 |
Worldwide operations
The Group operates in four geographical regions: Europe, Middle East & Africa, North America, Asia Pacific and Latin America. From a net sales perspec-tive, the U.S. is the largest single country, contribut-ing ~30% of the Group\u2019s net sales (2023: ~32%).
The geographical distribution of net sales is based on the country in which the goods are delivered. For a number of customers, central deliveries are made to specified locations, and the final destina-tion is unknown. The stated geographical distribu-tion of net sales may therefore vary from one year to the next if delivery destinations for these cus-tomers change.
The geographical distribution of intangible assets and property, plant and equipment is based on the country in which the individual entities are based, and to which assets are allocated.
Most of the Group\u2019s intangible assets and prop-erty, plant and equipment are located in Denmark and the U.S.
Intangible assets and property, plant and equipment, largest single countries: | 2024 | 2023 |
Denmark | 50% | 41% |
U.S. | 25% | 36% |
Net sales 2024 (2023)
EUR million
Denmark30.1(31.3)
Rest of Europe, Middle East & Africa1,336.7(805.6)
North America 1,261.8(813.4)
Latin America 480.8(308.2)
Asia Pacific724.1(443.7)
3,833.5
(2,402.2)
Intangible assets and property,
plant and equipment 2024 (2023)
EUR million
Denmark 6,435.0(933.4)
Rest of Europe, Middle East & Africa2,104.2 (100.0)
North America 3,296.5 (837.0)
Latin America 332.3 (17.6)
Asia Pacific824.5(373.8)
12,992.5
(2,261.8)
Net investments 2024 (2023)
EUR million
Denmark 163.5 (117.7)
Rest of Europe, Middle East & Africa25.6 (1.5)
North America 125.8(133.3)
Latin America 6.2(3.1)
Asia Pacific37.9(19.7)
359.0
(275.3)
Accounting policies
The operating segments are consistent with the internal reporting to the Executive Management and the Board of Directors. The Executive Management is considered the chief operating decision-maker.
The operating segments are managed on the basis of adjusted EBITDA as a profitability measure. Management does not receive reporting on assets and liabilities by reporting segments.
Segment income and segment costs are those items that, in the internal management reporting, are directly attributable to individ-ual segments or can be indirectly allocated to individual segments on a reliable basis.
Net sales 2024 (2023)
EUR million
Denmark30.1(31.3)
Rest of Europe, Middle East & Africa1,336.7(805.6)
North America 1,261.8(813.4)
Latin America 480.8(308.2)
Asia Pacific724.1(443.7)
3,833.5
(2,402.2)
2.2 Net sales\t
EUR million | 2024 | 2023 | |
Food & Health Biosolutions | |||
Food & Beverages | 1,238.2 | 444.2 | |
Human Health | 429.9 | 85.9 | |
1,668.1 | 530.1 | ||
Planetary Health Biosolutions | |||
Household Care | 767.7 | 685.2 | |
Agriculture, Energy & Tech | 1,397.7 | 1,186.9 | |
2,165.4 | 1,872.1 | ||
Net sales | 3,833.5 | 2,402.2 | |
Developed markets* | 2,484.4 | 1,550.2 | |
Emerging markets | 1,349.1 | 852.0 | |
Net sales | 3,833.5 | 2,402.2 | |
Net sales to the five largest customers as a percentage of net sales | 16% | 24% |
* Developed markets comprise North America, Central Western Europe, Australia, New Zealand, Japan and South Korea. The rest of the world is classified as emerging markets.
Almost all of Novonesis\u2019 net sales are derived from the sale of goods to customers, with net sales being recognized when the goods are delivered.
At January 1, 2024, contract liabilities amounted to EUR 29.1 million (2023: EUR 29.9 million), of which EUR 8.9 million was recognized as net sales in 2024 (2023: EUR 8.1 million). In 2024, contract liabilities were impacted by a large prepayment from a cus-tomer, increasing contract liabilities to EUR 128.1 million at December 31, 2024. The remaining pre-payment will be recognized as sales in 2025-2033.
Sales growth 2024
EUR million
2023
Organic
growth
Acquisi-tions
Exchange
rates
2024
2,402.2
8%
49%
3,833.5
3%
Critical accounting estimates
Novonesis has entered into various sales agreements, including agreements where Novonesis manufactures and sells products to a partner, who undertakes the sales to end customers, and where the profit on products
sold to end customers is shared between the partner and Novonesis, based on predeter-mined profit-sharing mechanisms.
Recognition of net sales requires estimates by Management, in connection with deter-mining the appropriate revenue recognition and the timing of recognition.
Accounting policies
Novonesis produces a wide range of industrial enzymes, functional proteins and microorgan-isms. Net sales include the sale of goods and related services and royalties, and these are rec-ognized at an amount that reflects the consider-ation to which Novonesis expects to be entitled. Net sales from the straightforward sale of goods to customers are recognized when control of the goods is transferred to the customer, i.e., when goods are delivered. Variable considera-tions are included in net sales to the extent that they are not subject to significant uncertainty.
The performance obligations in the contracts are to deliver products to customers, and each batch delivered is considered a separate per-formance obligation, as each batch is distinct.
Rebates
Products are sometimes sold with a rebate. A rebate agreement can be set up in various ways, but common to all agreements is that net sales are recognized based on the price specified in
the contract, net of the estimated rebate. Rebates are estimated based on experience, as well as information related to expected orders 3\u201312 months in advance. The estimated rebates are reassessed at the end of each reporting period.
Returns
A right if return is granted in a few of Novonesis\u2019 markets. No net sales are recognized for the goods expected to be returned, as a refund lia-bility is recognized. Estimates of the expected level of returns are based on analysis of histori-cal returns and knowledge of the relevant mar-kets/products. These estimates are updated at the end of each reporting period. As the goods returned are usually scrapped, no inventory asset is recognized.
Profit split
Novonesis has entered into partnerships where Novonesis manufactures and sells products to a partner, who undertakes the sale to end cus-tomers. The profit on products sold to end cus-tomers is shared between the partner and Novonesis, based on predetermined profit-shar-ing mechanisms.
Net sales from these arrangements consist of the sale of products to the partner and the shared profit, and are recognized in full when the goods are delivered to the partner. This is done by calculating the expected profit based on insights, experience and other input factors. The calculated profit is recognized as a con-tract asset or contract liability until an invoice is issued. The profit realized is settled periodically.
Sales via agents
Novonesis has entered into commission agree-ments where agents undertake sales to third parties in return for a commission on realized sales. Net sales from such agreements are rec-ognized when the goods are delivered to the end customer, as the nature of the performance obligation is to provide the specified goods.
Other
Net sales collected on behalf of third parties are not recognized as net sales.
Novonesis\u2019 obligation to provide a refund for products that are not of the agreed quality or according to agreed specifications under the standard warranty terms is recognized as con-tract liabilities.
A trade receivable is recognized when the cus-tomer obtains control of the goods and an invoice is issued, as this is the point in time when the consideration becomes unconditional and only the passage of time is required before payment is due. Typical payment terms are around 60 days.
Contract liabilities consist of advance pay-ments, deferred sales and liabilities for refund goods. Contract liabilities are recognized as net sales, as the performance obligations under the contracts are fulfilled.
Almost all performance obligations in Novonesis have an expected term of one year or less.
2.2 Net sales\t
EUR million | 2024 | 2023 | |
Food & Health Biosolutions | |||
Food & Beverages | 1,238.2 | 444.2 | |
Human Health | 429.9 | 85.9 | |
1,668.1 | 530.1 | ||
Planetary Health Biosolutions | |||
Household Care | 767.7 | 685.2 | |
Agriculture, Energy & Tech | 1,397.7 | 1,186.9 | |
2,165.4 | 1,872.1 | ||
Net sales | 3,833.5 | 2,402.2 | |
Developed markets* | 2,484.4 | 1,550.2 | |
Emerging markets | 1,349.1 | 852.0 | |
Net sales | 3,833.5 | 2,402.2 | |
Net sales to the five largest customers as a percentage of net sales | 16% | 24% |
* Developed markets comprise North America, Central Western Europe, Australia, New Zealand, Japan and South Korea. The rest of the world is classified as emerging markets.
Almost all of Novonesis\u2019 net sales are derived from the sale of goods to customers, with net sales being recognized when the goods are delivered.
At January 1, 2024, contract liabilities amounted to EUR 29.1 million (2023: EUR 29.9 million), of which EUR 8.9 million was recognized as net sales in 2024 (2023: EUR 8.1 million). In 2024, contract liabilities were impacted by a large prepayment from a cus-tomer, increasing contract liabilities to EUR 128.1 million at December 31, 2024. The remaining pre-payment will be recognized as sales in 2025-2033.
Sales growth 2024
EUR million
2023
Organic
growth
Acquisi-tions
Exchange
rates
2024
2,402.2
8%
49%
3,833.5
3%
Critical accounting estimates
Novonesis has entered into various sales agreements, including agreements where Novonesis manufactures and sells products to a partner, who undertakes the sales to end customers, and where the profit on products
sold to end customers is shared between the partner and Novonesis, based on predeter-mined profit-sharing mechanisms.
Recognition of net sales requires estimates by Management, in connection with deter-mining the appropriate revenue recognition and the timing of recognition.
Accounting policies
Novonesis produces a wide range of industrial enzymes, functional proteins and microorgan-isms. Net sales include the sale of goods and related services and royalties, and these are rec-ognized at an amount that reflects the consider-ation to which Novonesis expects to be entitled. Net sales from the straightforward sale of goods to customers are recognized when control of the goods is transferred to the customer, i.e., when goods are delivered. Variable considera-tions are included in net sales to the extent that they are not subject to significant uncertainty.
The performance obligations in the contracts are to deliver products to customers, and each batch delivered is considered a separate per-formance obligation, as each batch is distinct.
Rebates
Products are sometimes sold with a rebate. A rebate agreement can be set up in various ways, but common to all agreements is that net sales are recognized based on the price specified in
the contract, net of the estimated rebate. Rebates are estimated based on experience, as well as information related to expected orders 3\u201312 months in advance. The estimated rebates are reassessed at the end of each reporting period.
Returns
A right if return is granted in a few of Novonesis\u2019 markets. No net sales are recognized for the goods expected to be returned, as a refund lia-bility is recognized. Estimates of the expected level of returns are based on analysis of histori-cal returns and knowledge of the relevant mar-kets/products. These estimates are updated at the end of each reporting period. As the goods returned are usually scrapped, no inventory asset is recognized.
Profit split
Novonesis has entered into partnerships where Novonesis manufactures and sells products to a partner, who undertakes the sale to end cus-tomers. The profit on products sold to end cus-tomers is shared between the partner and Novonesis, based on predetermined profit-shar-ing mechanisms.
Net sales from these arrangements consist of the sale of products to the partner and the shared profit, and are recognized in full when the goods are delivered to the partner. This is done by calculating the expected profit based on insights, experience and other input factors. The calculated profit is recognized as a con-tract asset or contract liability until an invoice is issued. The profit realized is settled periodically.
Sales via agents
Novonesis has entered into commission agree-ments where agents undertake sales to third parties in return for a commission on realized sales. Net sales from such agreements are rec-ognized when the goods are delivered to the end customer, as the nature of the performance obligation is to provide the specified goods.
Other
Net sales collected on behalf of third parties are not recognized as net sales.
Novonesis\u2019 obligation to provide a refund for products that are not of the agreed quality or according to agreed specifications under the standard warranty terms is recognized as con-tract liabilities.
A trade receivable is recognized when the cus-tomer obtains control of the goods and an invoice is issued, as this is the point in time when the consideration becomes unconditional and only the passage of time is required before payment is due. Typical payment terms are around 60 days.
Contract liabilities consist of advance pay-ments, deferred sales and liabilities for refund goods. Contract liabilities are recognized as net sales, as the performance obligations under the contracts are fulfilled.
Almost all performance obligations in Novonesis have an expected term of one year or less.
Novonesis produces a wide range of industrial enzymes, functional proteins and microorgan-isms. Net sales include the sale of goods and related services and royalties, and these are rec-ognized at an amount that reflects the consider-ation to which Novonesis expects to be entitled. Net sales from the straightforward sale of goods to customers are recognized when control of the goods is transferred to the customer, i.e., when goods are delivered. Variable considera-tions are included in net sales to the extent that they are not subject to significant uncertainty.
The performance obligations in the contracts are to deliver products to customers, and each batch delivered is considered a separate per-formance obligation, as each batch is distinct.
Rebates
Products are sometimes sold with a rebate. A rebate agreement can be set up in various ways, but common to all agreements is that net sales are recognized based on the price specified in
the contract, net of the estimated rebate. Rebates are estimated based on experience, as well as information related to expected orders 3\u201312 months in advance. The estimated rebates are reassessed at the end of each reporting period.
Returns
A right if return is granted in a few of Novonesis\u2019 markets. No net sales are recognized for the goods expected to be returned, as a refund lia-bility is recognized. Estimates of the expected level of returns are based on analysis of histori-cal returns and knowledge of the relevant mar-kets/products. These estimates are updated at the end of each reporting period. As the goods returned are usually scrapped, no inventory asset is recognized.
Profit split
Novonesis has entered into partnerships where Novonesis manufactures and sells products to a partner, who undertakes the sale to end cus-tomers. The profit on products sold to end cus-tomers is shared between the partner and Novonesis, based on predetermined profit-shar-ing mechanisms.
Net sales from these arrangements consist of the sale of products to the partner and the shared profit, and are recognized in full when the goods are delivered to the partner. This is done by calculating the expected profit based on insights, experience and other input factors. The calculated profit is recognized as a con-tract asset or contract liability until an invoice is issued. The profit realized is settled periodically.
Sales via agents
Novonesis has entered into commission agree-ments where agents undertake sales to third parties in return for a commission on realized sales. Net sales from such agreements are rec-ognized when the goods are delivered to the end customer, as the nature of the performance obligation is to provide the specified goods.
Other
Net sales collected on behalf of third parties are not recognized as net sales.
Novonesis\u2019 obligation to provide a refund for products that are not of the agreed quality or according to agreed specifications under the standard warranty terms is recognized as con-tract liabilities.
A trade receivable is recognized when the cus-tomer obtains control of the goods and an invoice is issued, as this is the point in time when the consideration becomes unconditional and only the passage of time is required before payment is due. Typical payment terms are around 60 days.
Contract liabilities consist of advance pay-ments, deferred sales and liabilities for refund goods. Contract liabilities are recognized as net sales, as the performance obligations under the contracts are fulfilled.
Almost all performance obligations in Novonesis have an expected term of one year or less.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__59": { "value": "Rebates
Products are sometimes sold with a rebate. A rebate agreement can be set up in various ways, but common to all agreements is that net sales are recognized based on the price specified in
the contract, net of the estimated rebate. Rebates are estimated based on experience, as well as information related to expected orders 3\u201312 months in advance. The estimated rebates are reassessed at the end of each reporting period.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscountsAndRebatesExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__60": { "value": "Sales via agents
Novonesis has entered into commission agree-ments where agents undertake sales to third parties in return for a commission on realized sales. Net sales from such agreements are rec-ognized when the goods are delivered to the end customer, as the nature of the performance obligation is to provide the specified goods.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFeeAndCommissionIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__62-1": { "value": "2.3 Employee costs
EUR million | 2024 | 2023 |
Wages and salaries | 851.1 | 522.9 |
Pensions \u2013 defined contribution plans | 74.0 | 48.9 |
Other social security costs | 58.2 | 40.4 |
Other employee costs | 41.8 | 19.2 |
Share-based payment | 28.8 | 20.3 |
Employee costs | 1,053.9 | 651.7 |
Recognized in the income statement under the following items: | ||
Cost of goods sold | 408.3 | 237.9 |
Sales and distribution costs | 264.1 | 160.0 |
Research and development costs | 221.6 | 153.4 |
Administrative costs | 130.3 | 82.0 |
Special items | 35.1 | 10.2 |
1,059.4 | 643.5 | |
Change in employee costs recognized in Inventories | (5.5) | 8.2 |
Employee costs | 1,053.9 | 651.7 |
Average number of employees in the Group | 10,208 | 6,805 |
Average number of employees working with research and development | ||
1,689 | 1,208 |
Employee costs in 2024 included severance pay, retention bonuses and other employee costs of EUR 35.1 million (2023: EUR 10.2 million) related to the combination between Novozymes and Chr. Hansen, recognized in Special items. Reference is made to Note 2.4 for further details.
Number of employees at year-end 2024 (2023)
No. of employees
Denmark 4,645(2,910)
Rest of Europe, Middle East & Africa 1,236(243)
North America 1,991 (1,307)
Asia Pacific 2,141 (1,972)
Latin America 569 (324)
10,582
(6,756)
Employee costs 2024 (2023)
EUR million
Denmark 546.3(346.5)
Rest of Europe, Middle East & Africa 113.3(29.0)
North America 263.3 (174.5)
Asia Pacific 100.7 (84.4)
Latin America 30.3 (17.3)
1,053.9
(651.7)
6.1 Management remuneration
2024 | 2023 | |||||
EUR million | Board of Directors | Executive Management | Total | Board of Directors | Executive Management | Total |
Salaries and other short-term benefits | 1.8 | 2.6 | 4.4 | 1.3 | 2.3 | 3.6 |
Defined contribution plans | 0.3 | 0.3 | 0.2 | 0.2 | ||
Cash bonus | 4.5 | 4.5 | 1.6 | 1.6 | ||
Expensed share-based incentive programs | 2.3 | 2.3 | 2.3 | 2.3 | ||
Remuneration | 1.8 | 9.7 | 11.5 | 1.3 | 6.4 | 7.7 |
Compensation for lost incentives/Sign-on bonus | 0.4 | 0.4 | 1.1 | 1.1 | ||
Remuneration including additional payments | 1.8 | 10.1 | 11.9 | 1.3 | 7.5 | 8.8 |
Number of members at December 31 | 13 | 2 | 10 | 2 |
Novonesis\u2019 Remuneration Policy sets the general guidelines for the remuneration of the Board of Directors and the Executive Management. The Remuneration Policy is set by the Board of Directors, based on recommendations from the Nomination and Remuneration Committee, and is approved at the Annual General meeting.
A summary of the Management remuneration can be found in the Governance section of The Annual Report.
Executive Management
Members of the Executive Management receive fixed remuneration comprising a base salary, pen-sion and benefits. Furthermore, significant pro-portions of their remuneration packages are varia-ble and based on performance-related pay, through short- and long-term incentives. The incentive programs are balanced to ensure focus on both short-term and long-term value creation. They are designed to incentivize performance against selected financial, environmental, social and operational key performance indicators and individual objectives, which are directly linked to
Novonesis\u2019 strategy, and to incentivize long-term value creation and alignment with the long-term interests of shareholders, customers and other stakeholders.
The annual cash bonus has a target payout
and maximum payout equal to 100% and 150% of the annual base salary for the CEO, respectively,
and 65% and 97.5% of the annual base salary for the CFO, respectively. In 2024, the cash bonus includes a one-off bonus to Ester Baiget related to the combination of Novozymes and Chr. Hansen.
Members of the Executive Management have con-tracts of employment containing standard condi-tions for executives of Danish listed companies, including the periods of notice that both parties are required to give, and non-competition clauses. If an executive officer\u2019s contract of employment is terminated by the company without any miscon-duct on the part of the executive officer, the exec-utive officer has a notice period of 12 months. In addition to the notice period, the executive officer has a right to termination compensation of 12 months\u2019 base salary and pension contributions.
Board of Directors
The remuneration of the Board of Directors com-prises a fixed fee and is not incentive-based.
2.3 Employee costs
EUR million | 2024 | 2023 |
Wages and salaries | 851.1 | 522.9 |
Pensions \u2013 defined contribution plans | 74.0 | 48.9 |
Other social security costs | 58.2 | 40.4 |
Other employee costs | 41.8 | 19.2 |
Share-based payment | 28.8 | 20.3 |
Employee costs | 1,053.9 | 651.7 |
Recognized in the income statement under the following items: | ||
Cost of goods sold | 408.3 | 237.9 |
Sales and distribution costs | 264.1 | 160.0 |
Research and development costs | 221.6 | 153.4 |
Administrative costs | 130.3 | 82.0 |
Special items | 35.1 | 10.2 |
1,059.4 | 643.5 | |
Change in employee costs recognized in Inventories | (5.5) | 8.2 |
Employee costs | 1,053.9 | 651.7 |
Average number of employees in the Group | 10,208 | 6,805 |
Average number of employees working with research and development | ||
1,689 | 1,208 |
Employee costs in 2024 included severance pay, retention bonuses and other employee costs of EUR 35.1 million (2023: EUR 10.2 million) related to the combination between Novozymes and Chr. Hansen, recognized in Special items. Reference is made to Note 2.4 for further details.
Number of employees at year-end 2024 (2023)
No. of employees
Denmark 4,645(2,910)
Rest of Europe, Middle East & Africa 1,236(243)
North America 1,991 (1,307)
Asia Pacific 2,141 (1,972)
Latin America 569 (324)
10,582
(6,756)
Employee costs 2024 (2023)
EUR million
Denmark 546.3(346.5)
Rest of Europe, Middle East & Africa 113.3(29.0)
North America 263.3 (174.5)
Asia Pacific 100.7 (84.4)
Latin America 30.3 (17.3)
1,053.9
(651.7)
Recognition of amortization and impairment losses by function 2024 (2023)
EUR million
Cost of goods sold 181.7 (9.4)
Sales and distribution68.4 (9.9)
Research and development 49.5 (16.6)
Administration5.2 (4.4)
Special items53.3(-)
358.1
(40.3)
Recognition of depreciation by function 2024 (2023)
EUR million
Cost of goods sold 176.6 (110.5)
Sales and distribution11.5 (5.1)
Research and development 30.3 (21.2)
Administration20.9 (9.3)
239.3
(146.1)
2.3 Employee costs
EUR million | 2024 | 2023 |
Wages and salaries | 851.1 | 522.9 |
Pensions \u2013 defined contribution plans | 74.0 | 48.9 |
Other social security costs | 58.2 | 40.4 |
Other employee costs | 41.8 | 19.2 |
Share-based payment | 28.8 | 20.3 |
Employee costs | 1,053.9 | 651.7 |
Recognized in the income statement under the following items: | ||
Cost of goods sold | 408.3 | 237.9 |
Sales and distribution costs | 264.1 | 160.0 |
Research and development costs | 221.6 | 153.4 |
Administrative costs | 130.3 | 82.0 |
Special items | 35.1 | 10.2 |
1,059.4 | 643.5 | |
Change in employee costs recognized in Inventories | (5.5) | 8.2 |
Employee costs | 1,053.9 | 651.7 |
Average number of employees in the Group | 10,208 | 6,805 |
Average number of employees working with research and development | ||
1,689 | 1,208 |
Employee costs in 2024 included severance pay, retention bonuses and other employee costs of EUR 35.1 million (2023: EUR 10.2 million) related to the combination between Novozymes and Chr. Hansen, recognized in Special items. Reference is made to Note 2.4 for further details.
Number of employees at year-end 2024 (2023)
No. of employees
Denmark 4,645(2,910)
Rest of Europe, Middle East & Africa 1,236(243)
North America 1,991 (1,307)
Asia Pacific 2,141 (1,972)
Latin America 569 (324)
10,582
(6,756)
Employee costs 2024 (2023)
EUR million
Denmark 546.3(346.5)
Rest of Europe, Middle East & Africa 113.3(29.0)
North America 263.3 (174.5)
Asia Pacific 100.7 (84.4)
Latin America 30.3 (17.3)
1,053.9
(651.7)
2.3 Employee costs
EUR million | 2024 | 2023 |
Wages and salaries | 851.1 | 522.9 |
Pensions \u2013 defined contribution plans | 74.0 | 48.9 |
Other social security costs | 58.2 | 40.4 |
Other employee costs | 41.8 | 19.2 |
Share-based payment | 28.8 | 20.3 |
Employee costs | 1,053.9 | 651.7 |
Recognized in the income statement under the following items: | ||
Cost of goods sold | 408.3 | 237.9 |
Sales and distribution costs | 264.1 | 160.0 |
Research and development costs | 221.6 | 153.4 |
Administrative costs | 130.3 | 82.0 |
Special items | 35.1 | 10.2 |
1,059.4 | 643.5 | |
Change in employee costs recognized in Inventories | (5.5) | 8.2 |
Employee costs | 1,053.9 | 651.7 |
Average number of employees in the Group | 10,208 | 6,805 |
Average number of employees working with research and development | ||
1,689 | 1,208 |
Employee costs in 2024 included severance pay, retention bonuses and other employee costs of EUR 35.1 million (2023: EUR 10.2 million) related to the combination between Novozymes and Chr. Hansen, recognized in Special items. Reference is made to Note 2.4 for further details.
2.3 Employee costs
EUR million | 2024 | 2023 |
Wages and salaries | 851.1 | 522.9 |
Pensions \u2013 defined contribution plans | 74.0 | 48.9 |
Other social security costs | 58.2 | 40.4 |
Other employee costs | 41.8 | 19.2 |
Share-based payment | 28.8 | 20.3 |
Employee costs | 1,053.9 | 651.7 |
Recognized in the income statement under the following items: | ||
Cost of goods sold | 408.3 | 237.9 |
Sales and distribution costs | 264.1 | 160.0 |
Research and development costs | 221.6 | 153.4 |
Administrative costs | 130.3 | 82.0 |
Special items | 35.1 | 10.2 |
1,059.4 | 643.5 | |
Change in employee costs recognized in Inventories | (5.5) | 8.2 |
Employee costs | 1,053.9 | 651.7 |
Average number of employees in the Group | 10,208 | 6,805 |
Average number of employees working with research and development | ||
1,689 | 1,208 |
Recognition of amortization and impairment losses by function 2024 (2023)
EUR million
Cost of goods sold 181.7 (9.4)
Sales and distribution68.4 (9.9)
Research and development 49.5 (16.6)
Administration5.2 (4.4)
Special items53.3(-)
358.1
(40.3)
Recognition of depreciation by function 2024 (2023)
EUR million
Cost of goods sold 176.6 (110.5)
Sales and distribution11.5 (5.1)
Research and development 30.3 (21.2)
Administration20.9 (9.3)
239.3
(146.1)
4.1 Inventories
EUR million | 2024 | 2023 |
Raw materials and consumables | 108.4 | 59.8 |
Work in progress | 255.2 | 176.0 |
Finished goods | 357.0 | 250.9 |
Inventories at December 31 | 720.6 | 486.7 |
Cost of materials, included in Cost of goods sold | 1,083.8 | 643.0 |
Indirect production costs capitalized in inventories at December 31 | 266.0 | 149.5 |
Write-downs expensed during the year | 17.6 | 24.4 |
Reversal of write-downs during the year* | 16.6 | 7.8 |
* Part of the reversal of write-downs is attributable to written-down inventory being reused in production.
Critical accounting estimates
Work in progress and finished goods are meas-ured at cost, including indirect production costs. Indirect production costs are assessed on an ongoing basis to ensure reliable
measurement of employee costs, capacity utili-zation, cost drivers and other relevant factors. Changes in these parameters may have an impact on the gross margin and the overall val-uation of work in progress and finished goods.
Accounting policies
Inventories are measured at the lower of cost determined on a first-in first-out basis and net realizable value.
The cost of work in progress and finished goods comprises direct production costs such as raw materials and consumables; energy and labor directly attributable to pro-duction; and indirect production costs such as employee costs, maintenance, and depre-ciation of plants, etc.
If the expected selling price, less any comple-tion costs and costs to execute the sale (net realizable value) of inventories, is lower than the carrying amount, inventories are written down to net realizable value.
Novonesis has entered into a few agreements where Novonesis supplies goods to a cus-tomer\u2019s premises but retains title to the inventory until the goods are consumed in the customer\u2019s production. As long as Novonesis retains title to the goods, they are recognized as inventory.
Number of employees at year-end 2024 (2023)
No. of employees
Denmark 4,645(2,910)
Rest of Europe, Middle East & Africa 1,236(243)
North America 1,991 (1,307)
Asia Pacific 2,141 (1,972)
Latin America 569 (324)
10,582
(6,756)
Employee costs 2024 (2023)
EUR million
Denmark 546.3(346.5)
Rest of Europe, Middle East & Africa 113.3(29.0)
North America 263.3 (174.5)
Asia Pacific 100.7 (84.4)
Latin America 30.3 (17.3)
1,053.9
(651.7)
2.4 Special items\t
EUR million | Note | 2024 | 2023 |
Transaction costs related to the combination with Chr. Hansen | (36.0) | (29.5) | |
Integration costs related to the combination with Chr. Hansen | (77.9) | (43.8) | |
Gain on divestment of the lactase enzyme business, net | 3.5 | 12.7 | (4.0) |
Impairment of intangible asset and other costs due to discontinuation of the activities in Russia | |||
(34.5) | - | ||
Impairment of discontinued research and development projects | (22.3) | - | |
Special items | (158.0) | (77.3) |
Special items reconcile to the income statement as specified below:
2024 | 2023 | |||||
EUR million | Reported income statement | Special items | Adjusted income statement | Reported income statement | Special items | Adjusted income statement |
Net sales | 3,833.5 | - | 3,833.5 | 2,402.2 | - | 2,402.2 |
Cost of goods sold | (2,024.0) | (9.5) | (2,033.5) | (1,097.4) | (7.5) | (1,104.9) |
Gross profit | 1,809.5 | (9.5) | 1,800.0 | 1,304.8 | (7.5) | 1,297.3 |
Sales and distribution costs | (550.9) | (83.0) | (633.9) | (317.4) | (51.2) | (368.6) |
Research and development costs | (413.2) | (55.6) | (468.8) | (270.7) | (1.3) | (272.0) |
Administrative costs | (214.6) | (22.6) | (237.2) | (128.7) | (17.3) | (146.0) |
Other operating income | 28.2 | 12.7 | 40.9 | 22.9 | - | 22.9 |
Operating profit (EBIT) before special items | 659.0 | (158.0) | 501.0 | 610.9 | (77.3) | 533.6 |
Special items | (158.0) | 158.0 | - | (77.3) | 77.3 | - |
Operating profit (EBIT)\t | 501.0 | - | 501.0 | 533.6 | - | 533.6 |
Critical accounting judgments
The use of special items entails manage-ment judgment in the separation from other items in the income statement.
Management considers individual items in order to ensure that special items include significant non-recurring income or costs not related to Novonesis\u2019 recur-ring operating profit.
Accounting policies
Special items are used in the presenta-tion of the income statement and include significant individual items, income and cost, of a special nature. These items are classified separately in the income state-ment to provide transparency regarding the operating performance of Novonesis.
Special items include significant integra-tion and transaction costs, restructuring expenses and related impairment losses, and will include all significant non-recur-ring income or costs not related to Novonesis\u2019 recurring operating profit.
Special items are used in the presenta-tion of the income statement and include significant individual items, income and cost, of a special nature. These items are classified separately in the income state-ment to provide transparency regarding the operating performance of Novonesis.
Special items include significant integra-tion and transaction costs, restructuring expenses and related impairment losses, and will include all significant non-recur-ring income or costs not related to Novonesis\u2019 recurring operating profit.
", "dimensions": { "concept": "NOV:DescriptionOfAccountingPolicyForSpecialItems", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__70-1": { "value": "2.5 Tax
Tax risks
In many markets, Novonesis operates through sales companies and distributors, whereas production is located in fewer countries. This leads to transactions between group companies. Novonesis follows the OECD principles in setting internal transfer prices for these transactions. This entails a tax risk, because the transactions are subject to judgment in each country. The tax controversy risk for Novonesis is significantly reduced through the use of bilateral advance pricing agreements (APAs).
Bilateral APAs
As stated in our tax policy, Novonesis proactively engages in bilateral APAs negotiated at competent authority level to increase predictability and to miti-gate transfer pricing risks. Most of the intercom-pany transaction value within the Novonesis Group is covered by bilateral APAs.
An APA is an agreement between a taxpayer and the tax authorities determining the transfer pric-ing methodology for pricing the taxpayer\u2019s inter-nal transactions for future years.
The methodology is applied for a certain period based on the fulfilment of certain terms and condi-tions (called critical assumptions). An APA can be
unilateral or bilateral. Novonesis only enters into bilateral APAs, meaning that they are negotiated between the competent tax authorities of the two countries involved in the transaction. An APA pro-vides assurance with respect to the tax outcome of our internal transactions, by determining in advance arm\u2019s length pricing and the pricing meth-odology to be applied to the internal transactions.
Novonesis has entered into bilateral APAs with the tax authorities in the countries where internal transactions are most significant. Included in APA-covered transactions are group internal transac-tions between Denmark and the U.S., China and India.
Joint taxation
Novozymes A/S and its Danish subsidiaries are jointly taxed with the Danish companies of the Novo Holdings A/S Group. Joint taxation also covers withholding taxes in the form of dividend tax, roy-alty tax and interest tax. The Danish companies are jointly and individually liable for the joint taxation lia-bility. Any subsequent adjustments to income taxes and withholding taxes may increase the liability. Tax for the individual companies is allocated in full on the basis of the expected taxable income.
Tax in the income statement
In 2023 and 2024, the effective tax rate was nega-tively impacted by transaction and integration costs related to the combination with Chr. Hansen, which are not fully deductible for tax purposes. In 2023, there was a positive impact from the settle-ment of a long-standing tax case.
Global minimum tax
Novonesis is subject to the OECD Pillar Two legis-lation (global minimum tax), effective from January 1, 2024. There was no material impact from Pillar Two taxes in 2024.
Other matters
As the Group operates across many different countries, the calculation of the Group\u2019s tax expense in the income statement inherently involves estimation. Tax and transfer-pricing dis-putes with authorities in various countries may occur, and Management\u2019s assessment is applied to assess the possible outcome of such disputes.
The Group recognizes deferred tax assets, includ-ing the expected tax value of tax loss carryfor-wards, if Management assesses they can be offset against positive taxable income in the foreseeable future. This is based on budgets and business plans for the coming years, including planned commercial initiatives.
Payments in respect of tax liabilities for an account-ing period result from payments on account and on the final resolution of open items. As a result, there may be substantial differences between the tax expense recognized in the consolidated income statement and the actual tax payments.
Tax in the income statement | ||
EUR million | 2024 | 2023 |
Tax payable on net profit | (252.8) | (101.0) |
Change in deferred tax | 137.9 | (11.7) |
Prior-year adjustments - current tax | 3.6 | (3.4) |
Prior-year adjustments - deferred tax | - | (0.7) |
Tax in the income statement | (111.3) | (116.8) |
Calculation of effective tax rate: | ||
Corporate tax rate in Denmark | (22.0)% | (22.0)% |
Non-taxable income less non-deductible expenses | (4.8)% | (1.1)% |
Difference in foreign tax rates | 0.6% | (1.2)% |
Other adjustments | (0.5)% | 2.0% |
Effective tax rate | (26.7)% | (22.3)% |
Corporation tax, comprising the current tax liability, the change in deferred tax for the year, and possible adjustments relating to prior years, is recognized in the income statement, unless it relates to items recognized either in Other comprehensive income or directly in equity. Uncertain tax positions are assessed individually and recognized if it is probable that an amount will be paid or received. Deferred tax is measured using the balance sheet liability method, and comprises all tem-porary differences between the carrying amount and the tax base of assets and liabili-ties. No deferred tax is recognized for good-will, unless amortization of goodwill for tax pur-poses is allowed. The tax value of tax loss carryforwards is included in the calculation of deferred tax, to the extent that the tax losses can be expected to be utilized in the future.
Deferred tax is measured according to cur-rent tax rules and at the tax rate expected to be in force on reversal of temporary differ-ences. Changes in deferred tax due to tax rate changes are recognized in the income statement, unless they relate to items recog-nized either in Other comprehensive income or directly in equity.
Novonesis is applying the temporary relief from accounting for deferred taxes, arising from the implementation of the Pillar Two rules issued by the OECD.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__73": { "value": "Deferred tax | Deferred tax assets | Deferred tax liabilities | ||
EUR million | 2024 | 2023 | 2024 | 2023 |
Intangible assets | 82.5 | 65.4 | (1,003.5) | (84.5) |
Property, plant and equipment | 11.7 | 14.6 | (185.3) | (102.8) |
Inventories | 54.1 | 30.3 | (17.6) | (9.0) |
Tax loss carryforwards | 1.6 | 2.1 | - | - |
Share-based payment | 21.0 | 10.1 | - | - |
Other | 75.5 | 54.7 | (20.9) | (8.1) |
246.4 | 177.2 | (1,227.3) | (204.4) | |
Offsetting items | 28.6 | 59.2 | (28.6) | (59.2) |
Deferred tax at December 31 | 275.0 | 236.4 | (1,255.9) | (263.6) |
The increase in the deferred tax liability from business acquisitions in 2024 mainly relates to intangible assets acquired in connection with the combination with Chr. Hansen. Reference is made to Note 3.4 for further details.
The Other category mainly comprises temporary differences regarding accruals and provisions.
The tax value of the unrecognized share of tax loss carryforwards, tax credits, etc., that do not expire amounted to EUR 4.9 million (2023: EUR 7.4 million).
In 2024, tax payables of EUR 1.8 million (2023: EUR 12.0 million) are due after more than 12 months.
EUR million | 2024 | 2023 |
Deferred tax at January 1 | (27.2) | (4.0) |
Currency translation adjustments | (4.0) | (1.7) |
Effect of business acquisitions | (1,088.3) | - |
Tax related to the income statement | 137.9 | (12.4) |
Tax on equity items | 0.7 | - |
Transfer to/(from) other items | - | (9.1) |
Deferred tax at December 31 | (980.9) | (27.2) |
Deferred tax assets | 275.0 | 236.4 |
Deferred tax liabilities | (1,255.9) | (263.6) |
Deferred tax at December 31 | (980.9) | (27.2) |
Accounting policies
Corporation tax, comprising the current tax liability, the change in deferred tax for the year, and possible adjustments relating to prior years, is recognized in the income statement, unless it relates to items recognized either in Other comprehensive income or directly in equity. Uncertain tax positions are assessed individually and recognized if it is probable that an amount will be paid or received. Deferred tax is measured using the balance sheet liability method, and comprises all tem-porary differences between the carrying amount and the tax base of assets and liabili-ties. No deferred tax is recognized for good-will, unless amortization of goodwill for tax pur-poses is allowed. The tax value of tax loss carryforwards is included in the calculation of deferred tax, to the extent that the tax losses can be expected to be utilized in the future.
Deferred tax is measured according to cur-rent tax rules and at the tax rate expected to be in force on reversal of temporary differ-ences. Changes in deferred tax due to tax rate changes are recognized in the income statement, unless they relate to items recog-nized either in Other comprehensive income or directly in equity.
Novonesis is applying the temporary relief from accounting for deferred taxes, arising from the implementation of the Pillar Two rules issued by the OECD.
Corporation tax, comprising the current tax liability, the change in deferred tax for the year, and possible adjustments relating to prior years, is recognized in the income statement, unless it relates to items recognized either in Other comprehensive income or directly in equity. Uncertain tax positions are assessed individually and recognized if it is probable that an amount will be paid or received. Deferred tax is measured using the balance sheet liability method, and comprises all tem-porary differences between the carrying amount and the tax base of assets and liabili-ties. No deferred tax is recognized for good-will, unless amortization of goodwill for tax pur-poses is allowed. The tax value of tax loss carryforwards is included in the calculation of deferred tax, to the extent that the tax losses can be expected to be utilized in the future.
Deferred tax is measured according to cur-rent tax rules and at the tax rate expected to be in force on reversal of temporary differ-ences. Changes in deferred tax due to tax rate changes are recognized in the income statement, unless they relate to items recog-nized either in Other comprehensive income or directly in equity.
Novonesis is applying the temporary relief from accounting for deferred taxes, arising from the implementation of the Pillar Two rules issued by the OECD.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__74": { "value": "Corporation tax, comprising the current tax liability, the change in deferred tax for the year, and possible adjustments relating to prior years, is recognized in the income statement, unless it relates to items recognized either in Other comprehensive income or directly in equity. Uncertain tax positions are assessed individually and recognized if it is probable that an amount will be paid or received. Deferred tax is measured using the balance sheet liability method, and comprises all tem-porary differences between the carrying amount and the tax base of assets and liabili-ties. No deferred tax is recognized for good-will, unless amortization of goodwill for tax pur-poses is allowed. The tax value of tax loss carryforwards is included in the calculation of deferred tax, to the extent that the tax losses can be expected to be utilized in the future.
Deferred tax is measured according to cur-rent tax rules and at the tax rate expected to be in force on reversal of temporary differ-ences. Changes in deferred tax due to tax rate changes are recognized in the income statement, unless they relate to items recog-nized either in Other comprehensive income or directly in equity.
Novonesis is applying the temporary relief from accounting for deferred taxes, arising from the implementation of the Pillar Two rules issued by the OECD.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__75": { "value": "2.6 Earnings per share
EUR million | 2024 | 2023 |
Net profit for the year | 305.8 | 407.9 |
Less net profit attributable to non-controlling interests | - | (2.0) |
Net profit attributable to the shareholders of Novozymes A/S | 305.8 | 405.9 |
Average number of shares | ||
Weighted average number of shares in circulation | 457,624,227 | 277,035,068 |
Average dilutive effect of outstanding share options and share awards | 1,980,726 | 839,903 |
Average number of diluted shares | 459,604,953 | 277,874,971 |
Earnings per share, EUR | 0.67 | 1.47 |
Earnings per share, diluted, EUR | 0.67 | 1.46 |
3.1 Goodwill and other intangible assets
EUR million | Goodwill | Technology and strain library | Customer relationships | Software and other intangibles | Total |
Cost at January 1, 2024 | 265.0 | 548.3 | 92.2 | 175.4 | 1,080.9 |
Currency translation adjustments | 30.8 | 1.9 | 8.0 | 1.1 | 41.8 |
Additions from business acquisitions | 5,309.2 | 3,061.0 | 984.8 | 358.3 | 9,713.3 |
Additions during the year | - | 0.2 | - | 21.3 | 21.5 |
Cost at December 31, 2024 | 5,605.0 | 3,611.4 | 1,085.0 | 556.1 | 10,857.5 |
Amortization and impairment losses at January 1, 2024 | |||||
(342.3) | (19.1) | (111.5) | (472.9) | ||
Currency translation adjustments | (1.7) | (0.4) | (0.2) | (2.3) | |
Amortization during the year | (199.8) | (63.9) | (41.1) | (304.8) | |
Impairment losses | (22.3) | (31.0) | - | (53.3) | |
Amortization and impairment losses at December 31, 2024 | |||||
(566.1) | (114.4) | (152.8) | (833.3) | ||
Carrying amount at December 31, 2024\t | 5,605.0 | 3,045.3 | 970.6 | 403.3 | 10,024.2 |
Recognition of amortization and impairment losses by function 2024 (2023)
EUR million
Cost of goods sold 181.7 (9.4)
Sales and distribution68.4 (9.9)
Research and development 49.5 (16.6)
Administration5.2 (4.4)
Special items53.3(-)
358.1
(40.3)
Additions from business acquisitions in 2024
On January 29, 2024, the statutory merger between Novozymes A/S (\u201cNovozymes\u201d) and Chr. Hansen Holding A/S (\u201cChr. Hansen\u201d) was success-fully completed. Additions from business acquisi-tions include goodwill of EUR 5,309.2 million and other intangible assets of EUR 4,404.1 million identified in connection with the Chr. Hansen
purchase price allocation. Reference is made to Note 3.4 for further details.
Changes to the presentation
Intangible asset categories were changed in 2024 in order to provide a better presentation of the material intangible assets identified in connection with the Chr. Hansen purchase price allocation.
The comparative figures for 2023 have been restated accordingly. The categories presented are:
\u2022\tGoodwill
\u2022\tTechnology and strain library, which include process and product technology, patents, licenses, trademarks, and acquired research and development projects
\u2022\tCustomer relationships
\u2022\tSoftware and other intangible assets, which mainly include software, other IT projects and product brands.
EUR million | Goodwill | Technology and strain library | Customer relationships | Software and other intangibles | Total |
Cost at January 1, 2023 | 269.9 | 574.7 | 93.5 | 150.7 | 1,088.8 |
Currency translation adjustments | (4.9) | (6.3) | (1.3) | (0.3) | (12.8) |
Additions during the year | - | 0.6 | - | 26.1 | 26.7 |
Disposals during the year | - | (20.7) | - | (1.1) | (21.8) |
Cost at December 31, 2023 | 265.0 | 548.3 | 92.2 | 175.4 | 1,080.9 |
Amortization and impairment losses at January 1, 2023 | |||||
(343.4) | (14.6) | (99.1) | (457.1) | ||
Currency translation adjustments | 2.5 | - | 0.2 | 2.7 | |
Amortization during the year | (22.1) | (4.5) | (13.7) | (40.3) | |
Disposals during the year | 20.7 | - | 1.1 | 21.8 | |
Amortization and impairment losses at December 31, 2023 | |||||
(342.3) | (19.1) | (111.5) | (472.9) | ||
Carrying amount at December 31, 2023\t | 265.0 | 206.0 | 73.1 | 63.9 | 608.0 |
Research and development projects
Novonesis\u2019 research and development activities are related to the development of new products and to the ongoing optimization of production processes for existing products. Research and development projects with a fair value of EUR 425.7 million were identified in the connection with the Chr. Hansen purchase price allocation.
On December 31, 2024, research and develop-ment projects with a carrying amount of EUR 210.1 million are not yet available for use.
Due to the significant uncertainty associated with the development of new products, no significant research and development projects met the crite-ria for capitalization in 2024 and 2023.
Other intangible asset disclosures
Material assets were identified in connection with the Chr. Hansen purchase price allocation as set out in Note 3.4. Carrying amount and remaining useful life of the individual material assets are:
\u2022\tStrain library, which comprises the acquired collection of around 50,000 microbial strains related to cultures and probiotics.
\u2022\tProduct technologies, which are technologies related to the specialized distinct recipes and formulations for the large portfolio of commer-cialized cultures, enzymes and probiotics products.
\u2022\tProcess technologies, which comprise the microbial and fermentation technology related to the production of the portfolio of cultures, enzymes, probiotics and HMOs.
\u2022\tMaterial customer relationships, which are related to the strong and long-term partner-ships with customers within the dairy industry globally.
Additional intangible assets (customer relation-ships, research and development projects, prod-uct brands, etc.) were identified in connection with the Chr. Hansen purchase price allocation but are not individually considered material assets.
On December 31, 2024, other intangible assets include software and other IT projects of EUR 44.3 million not yet available for use (2023: EUR 35.5 million).
EUR million | Carrying amount | Remaining useful life (years) |
Technology and strain library | ||
Strain library | 662.0 | 19 |
Product technology | 1,567.1 | 14 |
Process technology | 239.3 | 14 |
Customer relationships | ||
Customer relationships | 655.7 | 24 |
Impairment test
Other intangible assets
In 2024, impairment losses of EUR 53.3 million were recognized in Special items. No impairment losses were recognized in 2023.
Customer relationships in Russia were written down to zero, and an impairment loss of EUR 31.0 million was recognized in connection with the dis-continuation of the acquired activities in Russia. The impairment loss was related to the Food & Health Biosolutions segment.
In 2024, a group of small, acquired research and development projects were discontinued. The discontinuation and disposal led to an impairment loss of EUR 22.3 million, of which EUR 12.6 million was related to the Food & Health Biosolutions segment and EUR 9.7 million to the Planetary Health Biosolutions segment.
Goodwill
Goodwill is monitored for impairment at the oper-ating segment level, which is the lowest level of cash-generating units (CGU) to which consoli-dated goodwill is allocated and monitored by Management.
Following the combination of Novozymes and Chr. Hansen in 2024, Novonesis\u2019 operating segments are Food & Health Biosolutions and Planetary Health Biosolutions. In 2023, goodwill was moni-tored and tested for the entire Group. On December 31, 2024, goodwill of EUR 4,142.0 million was allocated to Food & Health Biosolutions, and EUR 1,463.0 million was allocated to Planetary Health Biosolutions. On December 31, 2023, good-will was EUR 265.0 million.
Neither in 2024 nor in 2023 did the annual impair-ment test reveal an impairment need. Management believes that no reasonable changes in the key assumptions are likely to lead to an impairment in any of the cash-generating units. Food & Health Biosolutions includes the largest share of goodwill and other intangible assets identified in connection with the Chr. Hansen purchase price allocation. This segment is more sensitive to changes in the key assumptions.
Key assumptions
The recoverable amount determined in the impairment test is based on a value-in-use calcu-lation. To determine the value-in-use,
Management is required to estimate the present value of future cash flows. Cash flow projections are based on budgets and long-term forecasts approved by Management. The forecast period is based on Management\u2019s budget for 2025 and five-year projections in line with the planning period used internally by Management for the develop-ment of the combined business towards 2030.
Significant parameters in the present value esti-mate are sales growth, adjusted EBITDA margin, discount rate and growth expectations for the ter-minal period. The applied post-tax discount rate for Food & Health Biosolutions and Planetary Health Biosolutions is 7.2% (Pre-tax discount rate is 8.8%). The discount rate applied is the weighted average cost of capital (WACC) and reflects the latest market assumptions for the cost of equity and the cost of debt. The weighting of the cost of debt and the cost of equity is based on the capital structure for relevant peer groups.
The long-term growth rate for the terminal period
is based on the expected growth in the world econ-omy, and 2% is applied for both segments. The
expected sales growth rate and the adjusted EBITDA margins in the forecast period are based on historical experience and Management\u2019s assump-tions about expected market developments.
Food & Health Biosolutions
Sales growth (CAGR) of mid-to-high single digit percentage was assumed for the forecast period, which was supported by organic sales growth of 8% in 2024. Both Food & Beverages and Human Health are expected to contribute to sales growth from continued focus on growing the core busi-ness in close collaboration with our customers, new product developments, and expansion into new markets. Adjusted EBITDA margin is expected to improve gradually from 35.2% in 2024 towards the termi-nal period, from both production optimization, through economies of scale and strain optimiza-tions and through anticipated improved commer-cial cost ratios.
Planetary Health Biosolutions
Sales growth (CAGR) of mid-single digit percent-age was assumed for the forecast period, which was supported by the historical organic sales
growth within the sales areas in Planetary Health Biosolutions. Both Household Care and Agriculture, Energy & Tech are expected to con-tribute to sales growth, with a continued focus on growing the core business in close collaboration with our customers, new product developments, and expansion into new markets. Adjusted EBITDA margin is expected to improve gradually from 37.0% in 2024 towards the terminal period, from production and strain optimizations, and through economies of scale.Other assumptions include investments, which reflect both maintenance and expectations for organic growth, as well as our climate commitments. Sensitivity analysis
Sensitivity analysis covering key assumptions has been performed in connection with the impair-ment testing.
Food & Health Biosolutions includes the largest share of goodwill and other intangible assets acquired in connection with the combination with Chr. Hansen. The segment is more sensitive to changes in the key assumptions. However, based on the sensitivity analysis on the key assumptions there is no impairment, and the key assumptions are not sensitive to reasonable changes to an extent that will result in an impairment loss neither individually nor in combination. For example, a lowering of the terminal growth rate to zero or increasing the discount rate by one percentage point, will not lead to impairment. Similarly, a decrease in sales growth of four percentage points during the forecast period or a decrease in the adjusted EBITDA margin of five percentage points will not lead to impairment.
The discounted cash flow from the budget and forecast period for Planetary Health Biosolutions significantly exceeds the carrying amount of goodwill and other intangible assets.
Critical accounting estimates
Management assesses the risk of impairment of the Group\u2019s goodwill and intangible assets. This requires judgment in relation to the iden-tification of impairment indicators as well as cash-generating units (CGUs) and the underly-ing assumptions applied in impairment testing.
Goodwill is allocated to our operating seg-ments Food & Health Biosolutions and Planetary Health Biosolutions based on expected future cash flow from the assets acquired, as well as synergies identified.
Goodwill and intangibles not available for use are tested annually.
Impairment tests are based on Management\u2019s projections and anticipated net present value of estimated future cash flows (value-in-use).
The calculation of value-in-use is based on the discounted cash flow method, using esti-mates of future cash flows from the continu-ing use. The key parameters used in deter-mining value-in-use are the sales growth, adjusted EBITDA margins, discount rate and growth expectations for the terminal period.
Accounting policies
Intangible assets are initially measured at cost and are subsequently measured at cost less accumulated amortization and impairment losses.
Intangible assets acquired in a business combi-nation are recognized at fair value at the acqui-sition date. Goodwill is only arising from busi-ness combinations and is measured in the purchase price allocation.
Research costs are recognized in the income statement in the period in which they are incurred. Development costs are recognized in the income statement when incurred, unless the criteria for capitalization are met.
Costs associated with the development of sub-stantial software projects are capitalized if the costs are related to the development of new and improved systems.
Amortization is based on the straight-line method over the estimated useful lives when the assets are available for use.
\u2022\tTechnology and strain library are amortized over a period of 7-25 years. The useful lives of patents and trademarks are normally identical to the patent period. Licenses are amortized over the contractual period
\u2022\tCustomer relationships are amortized over a period of 7-25 years
\u2022\tSoftware and other IT projects are amor-tized over a period of 3-10 years
\u2022\tProduct brands are amortized over a period of 15-20 years
\u2022\tOther intangible assets are amortized over a period of 3-20 years
Estimated useful lives and amortization meth-ods are reassessed annually.Goodwill and intangible assets not available for use are not amortized but are subject to an annual impairment test, or when indicators of impairment are identified.
Goodwill is allocated to the cash-generating units as identified by Management, representing the smallest group of assets which together generate incoming cash flow from the continued use of the assets, and which are independent of cash flow from other assets or groups of assets.
The Group regularly reviews the carrying amounts of the intangible assets, subject to amortization, to determine whether there is an indication of impairment. An impairment loss is measured based on discounted projected cash flows and is recognized to the extent that the asset\u2019s carrying amount exceeds its estimated recoverable amount. Impairments on intangible assets, other than goodwill, are reviewed at each reporting date for possible reversal.
3.1 Goodwill and other intangible assets
EUR million | Goodwill | Technology and strain library | Customer relationships | Software and other intangibles | Total |
Cost at January 1, 2024 | 265.0 | 548.3 | 92.2 | 175.4 | 1,080.9 |
Currency translation adjustments | 30.8 | 1.9 | 8.0 | 1.1 | 41.8 |
Additions from business acquisitions | 5,309.2 | 3,061.0 | 984.8 | 358.3 | 9,713.3 |
Additions during the year | - | 0.2 | - | 21.3 | 21.5 |
Cost at December 31, 2024 | 5,605.0 | 3,611.4 | 1,085.0 | 556.1 | 10,857.5 |
Amortization and impairment losses at January 1, 2024 | |||||
(342.3) | (19.1) | (111.5) | (472.9) | ||
Currency translation adjustments | (1.7) | (0.4) | (0.2) | (2.3) | |
Amortization during the year | (199.8) | (63.9) | (41.1) | (304.8) | |
Impairment losses | (22.3) | (31.0) | - | (53.3) | |
Amortization and impairment losses at December 31, 2024 | |||||
(566.1) | (114.4) | (152.8) | (833.3) | ||
Carrying amount at December 31, 2024\t | 5,605.0 | 3,045.3 | 970.6 | 403.3 | 10,024.2 |
Recognition of amortization and impairment losses by function 2024 (2023)
EUR million
Cost of goods sold 181.7 (9.4)
Sales and distribution68.4 (9.9)
Research and development 49.5 (16.6)
Administration5.2 (4.4)
Special items53.3(-)
358.1
(40.3)
Additions from business acquisitions in 2024
On January 29, 2024, the statutory merger between Novozymes A/S (\u201cNovozymes\u201d) and Chr. Hansen Holding A/S (\u201cChr. Hansen\u201d) was success-fully completed. Additions from business acquisi-tions include goodwill of EUR 5,309.2 million and other intangible assets of EUR 4,404.1 million identified in connection with the Chr. Hansen
purchase price allocation. Reference is made to Note 3.4 for further details.
Changes to the presentation
Intangible asset categories were changed in 2024 in order to provide a better presentation of the material intangible assets identified in connection with the Chr. Hansen purchase price allocation.
The comparative figures for 2023 have been restated accordingly. The categories presented are:
\u2022\tGoodwill
\u2022\tTechnology and strain library, which include process and product technology, patents, licenses, trademarks, and acquired research and development projects
\u2022\tCustomer relationships
\u2022\tSoftware and other intangible assets, which mainly include software, other IT projects and product brands.
EUR million | Goodwill | Technology and strain library | Customer relationships | Software and other intangibles | Total |
Cost at January 1, 2023 | 269.9 | 574.7 | 93.5 | 150.7 | 1,088.8 |
Currency translation adjustments | (4.9) | (6.3) | (1.3) | (0.3) | (12.8) |
Additions during the year | - | 0.6 | - | 26.1 | 26.7 |
Disposals during the year | - | (20.7) | - | (1.1) | (21.8) |
Cost at December 31, 2023 | 265.0 | 548.3 | 92.2 | 175.4 | 1,080.9 |
Amortization and impairment losses at January 1, 2023 | |||||
(343.4) | (14.6) | (99.1) | (457.1) | ||
Currency translation adjustments | 2.5 | - | 0.2 | 2.7 | |
Amortization during the year | (22.1) | (4.5) | (13.7) | (40.3) | |
Disposals during the year | 20.7 | - | 1.1 | 21.8 | |
Amortization and impairment losses at December 31, 2023 | |||||
(342.3) | (19.1) | (111.5) | (472.9) | ||
Carrying amount at December 31, 2023\t | 265.0 | 206.0 | 73.1 | 63.9 | 608.0 |
Research and development projects
Novonesis\u2019 research and development activities are related to the development of new products and to the ongoing optimization of production processes for existing products. Research and development projects with a fair value of EUR 425.7 million were identified in the connection with the Chr. Hansen purchase price allocation.
On December 31, 2024, research and develop-ment projects with a carrying amount of EUR 210.1 million are not yet available for use.
Due to the significant uncertainty associated with the development of new products, no significant research and development projects met the crite-ria for capitalization in 2024 and 2023.
Other intangible asset disclosures
Material assets were identified in connection with the Chr. Hansen purchase price allocation as set out in Note 3.4. Carrying amount and remaining useful life of the individual material assets are:
\u2022\tStrain library, which comprises the acquired collection of around 50,000 microbial strains related to cultures and probiotics.
\u2022\tProduct technologies, which are technologies related to the specialized distinct recipes and formulations for the large portfolio of commer-cialized cultures, enzymes and probiotics products.
\u2022\tProcess technologies, which comprise the microbial and fermentation technology related to the production of the portfolio of cultures, enzymes, probiotics and HMOs.
\u2022\tMaterial customer relationships, which are related to the strong and long-term partner-ships with customers within the dairy industry globally.
Additional intangible assets (customer relation-ships, research and development projects, prod-uct brands, etc.) were identified in connection with the Chr. Hansen purchase price allocation but are not individually considered material assets.
On December 31, 2024, other intangible assets include software and other IT projects of EUR 44.3 million not yet available for use (2023: EUR 35.5 million).
EUR million | Carrying amount | Remaining useful life (years) |
Technology and strain library | ||
Strain library | 662.0 | 19 |
Product technology | 1,567.1 | 14 |
Process technology | 239.3 | 14 |
Customer relationships | ||
Customer relationships | 655.7 | 24 |
Impairment test
Other intangible assets
In 2024, impairment losses of EUR 53.3 million were recognized in Special items. No impairment losses were recognized in 2023.
Customer relationships in Russia were written down to zero, and an impairment loss of EUR 31.0 million was recognized in connection with the dis-continuation of the acquired activities in Russia. The impairment loss was related to the Food & Health Biosolutions segment.
In 2024, a group of small, acquired research and development projects were discontinued. The discontinuation and disposal led to an impairment loss of EUR 22.3 million, of which EUR 12.6 million was related to the Food & Health Biosolutions segment and EUR 9.7 million to the Planetary Health Biosolutions segment.
Goodwill
Goodwill is monitored for impairment at the oper-ating segment level, which is the lowest level of cash-generating units (CGU) to which consoli-dated goodwill is allocated and monitored by Management.
Following the combination of Novozymes and Chr. Hansen in 2024, Novonesis\u2019 operating segments are Food & Health Biosolutions and Planetary Health Biosolutions. In 2023, goodwill was moni-tored and tested for the entire Group. On December 31, 2024, goodwill of EUR 4,142.0 million was allocated to Food & Health Biosolutions, and EUR 1,463.0 million was allocated to Planetary Health Biosolutions. On December 31, 2023, good-will was EUR 265.0 million.
Neither in 2024 nor in 2023 did the annual impair-ment test reveal an impairment need. Management believes that no reasonable changes in the key assumptions are likely to lead to an impairment in any of the cash-generating units. Food & Health Biosolutions includes the largest share of goodwill and other intangible assets identified in connection with the Chr. Hansen purchase price allocation. This segment is more sensitive to changes in the key assumptions.
Key assumptions
The recoverable amount determined in the impairment test is based on a value-in-use calcu-lation. To determine the value-in-use,
Management is required to estimate the present value of future cash flows. Cash flow projections are based on budgets and long-term forecasts approved by Management. The forecast period is based on Management\u2019s budget for 2025 and five-year projections in line with the planning period used internally by Management for the develop-ment of the combined business towards 2030.
Significant parameters in the present value esti-mate are sales growth, adjusted EBITDA margin, discount rate and growth expectations for the ter-minal period. The applied post-tax discount rate for Food & Health Biosolutions and Planetary Health Biosolutions is 7.2% (Pre-tax discount rate is 8.8%). The discount rate applied is the weighted average cost of capital (WACC) and reflects the latest market assumptions for the cost of equity and the cost of debt. The weighting of the cost of debt and the cost of equity is based on the capital structure for relevant peer groups.
The long-term growth rate for the terminal period
is based on the expected growth in the world econ-omy, and 2% is applied for both segments. The
expected sales growth rate and the adjusted EBITDA margins in the forecast period are based on historical experience and Management\u2019s assump-tions about expected market developments.
Food & Health Biosolutions
Sales growth (CAGR) of mid-to-high single digit percentage was assumed for the forecast period, which was supported by organic sales growth of 8% in 2024. Both Food & Beverages and Human Health are expected to contribute to sales growth from continued focus on growing the core busi-ness in close collaboration with our customers, new product developments, and expansion into new markets. Adjusted EBITDA margin is expected to improve gradually from 35.2% in 2024 towards the termi-nal period, from both production optimization, through economies of scale and strain optimiza-tions and through anticipated improved commer-cial cost ratios.
Planetary Health Biosolutions
Sales growth (CAGR) of mid-single digit percent-age was assumed for the forecast period, which was supported by the historical organic sales
growth within the sales areas in Planetary Health Biosolutions. Both Household Care and Agriculture, Energy & Tech are expected to con-tribute to sales growth, with a continued focus on growing the core business in close collaboration with our customers, new product developments, and expansion into new markets. Adjusted EBITDA margin is expected to improve gradually from 37.0% in 2024 towards the terminal period, from production and strain optimizations, and through economies of scale.Other assumptions include investments, which reflect both maintenance and expectations for organic growth, as well as our climate commitments. Sensitivity analysis
Sensitivity analysis covering key assumptions has been performed in connection with the impair-ment testing.
Food & Health Biosolutions includes the largest share of goodwill and other intangible assets acquired in connection with the combination with Chr. Hansen. The segment is more sensitive to changes in the key assumptions. However, based on the sensitivity analysis on the key assumptions there is no impairment, and the key assumptions are not sensitive to reasonable changes to an extent that will result in an impairment loss neither individually nor in combination. For example, a lowering of the terminal growth rate to zero or increasing the discount rate by one percentage point, will not lead to impairment. Similarly, a decrease in sales growth of four percentage points during the forecast period or a decrease in the adjusted EBITDA margin of five percentage points will not lead to impairment.
The discounted cash flow from the budget and forecast period for Planetary Health Biosolutions significantly exceeds the carrying amount of goodwill and other intangible assets.
Critical accounting estimates
Management assesses the risk of impairment of the Group\u2019s goodwill and intangible assets. This requires judgment in relation to the iden-tification of impairment indicators as well as cash-generating units (CGUs) and the underly-ing assumptions applied in impairment testing.
Goodwill is allocated to our operating seg-ments Food & Health Biosolutions and Planetary Health Biosolutions based on expected future cash flow from the assets acquired, as well as synergies identified.
Goodwill and intangibles not available for use are tested annually.
Impairment tests are based on Management\u2019s projections and anticipated net present value of estimated future cash flows (value-in-use).
The calculation of value-in-use is based on the discounted cash flow method, using esti-mates of future cash flows from the continu-ing use. The key parameters used in deter-mining value-in-use are the sales growth, adjusted EBITDA margins, discount rate and growth expectations for the terminal period.
Accounting policies
Intangible assets are initially measured at cost and are subsequently measured at cost less accumulated amortization and impairment losses.
Intangible assets acquired in a business combi-nation are recognized at fair value at the acqui-sition date. Goodwill is only arising from busi-ness combinations and is measured in the purchase price allocation.
Research costs are recognized in the income statement in the period in which they are incurred. Development costs are recognized in the income statement when incurred, unless the criteria for capitalization are met.
Costs associated with the development of sub-stantial software projects are capitalized if the costs are related to the development of new and improved systems.
Amortization is based on the straight-line method over the estimated useful lives when the assets are available for use.
\u2022\tTechnology and strain library are amortized over a period of 7-25 years. The useful lives of patents and trademarks are normally identical to the patent period. Licenses are amortized over the contractual period
\u2022\tCustomer relationships are amortized over a period of 7-25 years
\u2022\tSoftware and other IT projects are amor-tized over a period of 3-10 years
\u2022\tProduct brands are amortized over a period of 15-20 years
\u2022\tOther intangible assets are amortized over a period of 3-20 years
Estimated useful lives and amortization meth-ods are reassessed annually.Goodwill and intangible assets not available for use are not amortized but are subject to an annual impairment test, or when indicators of impairment are identified.
Goodwill is allocated to the cash-generating units as identified by Management, representing the smallest group of assets which together generate incoming cash flow from the continued use of the assets, and which are independent of cash flow from other assets or groups of assets.
The Group regularly reviews the carrying amounts of the intangible assets, subject to amortization, to determine whether there is an indication of impairment. An impairment loss is measured based on discounted projected cash flows and is recognized to the extent that the asset\u2019s carrying amount exceeds its estimated recoverable amount. Impairments on intangible assets, other than goodwill, are reviewed at each reporting date for possible reversal.
3.1 Goodwill and other intangible assets
EUR million | Goodwill | Technology and strain library | Customer relationships | Software and other intangibles | Total |
Cost at January 1, 2024 | 265.0 | 548.3 | 92.2 | 175.4 | 1,080.9 |
Currency translation adjustments | 30.8 | 1.9 | 8.0 | 1.1 | 41.8 |
Additions from business acquisitions | 5,309.2 | 3,061.0 | 984.8 | 358.3 | 9,713.3 |
Additions during the year | - | 0.2 | - | 21.3 | 21.5 |
Cost at December 31, 2024 | 5,605.0 | 3,611.4 | 1,085.0 | 556.1 | 10,857.5 |
Amortization and impairment losses at January 1, 2024 | |||||
(342.3) | (19.1) | (111.5) | (472.9) | ||
Currency translation adjustments | (1.7) | (0.4) | (0.2) | (2.3) | |
Amortization during the year | (199.8) | (63.9) | (41.1) | (304.8) | |
Impairment losses | (22.3) | (31.0) | - | (53.3) | |
Amortization and impairment losses at December 31, 2024 | |||||
(566.1) | (114.4) | (152.8) | (833.3) | ||
Carrying amount at December 31, 2024\t | 5,605.0 | 3,045.3 | 970.6 | 403.3 | 10,024.2 |
Recognition of amortization and impairment losses by function 2024 (2023)
EUR million
Cost of goods sold 181.7 (9.4)
Sales and distribution68.4 (9.9)
Research and development 49.5 (16.6)
Administration5.2 (4.4)
Special items53.3(-)
358.1
(40.3)
Additions from business acquisitions in 2024
On January 29, 2024, the statutory merger between Novozymes A/S (\u201cNovozymes\u201d) and Chr. Hansen Holding A/S (\u201cChr. Hansen\u201d) was success-fully completed. Additions from business acquisi-tions include goodwill of EUR 5,309.2 million and other intangible assets of EUR 4,404.1 million identified in connection with the Chr. Hansen
purchase price allocation. Reference is made to Note 3.4 for further details.
Changes to the presentation
Intangible asset categories were changed in 2024 in order to provide a better presentation of the material intangible assets identified in connection with the Chr. Hansen purchase price allocation.
The comparative figures for 2023 have been restated accordingly. The categories presented are:
\u2022\tGoodwill
\u2022\tTechnology and strain library, which include process and product technology, patents, licenses, trademarks, and acquired research and development projects
\u2022\tCustomer relationships
\u2022\tSoftware and other intangible assets, which mainly include software, other IT projects and product brands.
EUR million | Goodwill | Technology and strain library | Customer relationships | Software and other intangibles | Total |
Cost at January 1, 2023 | 269.9 | 574.7 | 93.5 | 150.7 | 1,088.8 |
Currency translation adjustments | (4.9) | (6.3) | (1.3) | (0.3) | (12.8) |
Additions during the year | - | 0.6 | - | 26.1 | 26.7 |
Disposals during the year | - | (20.7) | - | (1.1) | (21.8) |
Cost at December 31, 2023 | 265.0 | 548.3 | 92.2 | 175.4 | 1,080.9 |
Amortization and impairment losses at January 1, 2023 | |||||
(343.4) | (14.6) | (99.1) | (457.1) | ||
Currency translation adjustments | 2.5 | - | 0.2 | 2.7 | |
Amortization during the year | (22.1) | (4.5) | (13.7) | (40.3) | |
Disposals during the year | 20.7 | - | 1.1 | 21.8 | |
Amortization and impairment losses at December 31, 2023 | |||||
(342.3) | (19.1) | (111.5) | (472.9) | ||
Carrying amount at December 31, 2023\t | 265.0 | 206.0 | 73.1 | 63.9 | 608.0 |
Research and development projects
Novonesis\u2019 research and development activities are related to the development of new products and to the ongoing optimization of production processes for existing products. Research and development projects with a fair value of EUR 425.7 million were identified in the connection with the Chr. Hansen purchase price allocation.
On December 31, 2024, research and develop-ment projects with a carrying amount of EUR 210.1 million are not yet available for use.
Due to the significant uncertainty associated with the development of new products, no significant research and development projects met the crite-ria for capitalization in 2024 and 2023.
Other intangible asset disclosures
Material assets were identified in connection with the Chr. Hansen purchase price allocation as set out in Note 3.4. Carrying amount and remaining useful life of the individual material assets are:
\u2022\tStrain library, which comprises the acquired collection of around 50,000 microbial strains related to cultures and probiotics.
\u2022\tProduct technologies, which are technologies related to the specialized distinct recipes and formulations for the large portfolio of commer-cialized cultures, enzymes and probiotics products.
\u2022\tProcess technologies, which comprise the microbial and fermentation technology related to the production of the portfolio of cultures, enzymes, probiotics and HMOs.
\u2022\tMaterial customer relationships, which are related to the strong and long-term partner-ships with customers within the dairy industry globally.
Additional intangible assets (customer relation-ships, research and development projects, prod-uct brands, etc.) were identified in connection with the Chr. Hansen purchase price allocation but are not individually considered material assets.
On December 31, 2024, other intangible assets include software and other IT projects of EUR 44.3 million not yet available for use (2023: EUR 35.5 million).
EUR million | Carrying amount | Remaining useful life (years) |
Technology and strain library | ||
Strain library | 662.0 | 19 |
Product technology | 1,567.1 | 14 |
Process technology | 239.3 | 14 |
Customer relationships | ||
Customer relationships | 655.7 | 24 |
Impairment test
Other intangible assets
In 2024, impairment losses of EUR 53.3 million were recognized in Special items. No impairment losses were recognized in 2023.
Customer relationships in Russia were written down to zero, and an impairment loss of EUR 31.0 million was recognized in connection with the dis-continuation of the acquired activities in Russia. The impairment loss was related to the Food & Health Biosolutions segment.
In 2024, a group of small, acquired research and development projects were discontinued. The discontinuation and disposal led to an impairment loss of EUR 22.3 million, of which EUR 12.6 million was related to the Food & Health Biosolutions segment and EUR 9.7 million to the Planetary Health Biosolutions segment.
Goodwill
Goodwill is monitored for impairment at the oper-ating segment level, which is the lowest level of cash-generating units (CGU) to which consoli-dated goodwill is allocated and monitored by Management.
Following the combination of Novozymes and Chr. Hansen in 2024, Novonesis\u2019 operating segments are Food & Health Biosolutions and Planetary Health Biosolutions. In 2023, goodwill was moni-tored and tested for the entire Group. On December 31, 2024, goodwill of EUR 4,142.0 million was allocated to Food & Health Biosolutions, and EUR 1,463.0 million was allocated to Planetary Health Biosolutions. On December 31, 2023, good-will was EUR 265.0 million.
Neither in 2024 nor in 2023 did the annual impair-ment test reveal an impairment need. Management believes that no reasonable changes in the key assumptions are likely to lead to an impairment in any of the cash-generating units. Food & Health Biosolutions includes the largest share of goodwill and other intangible assets identified in connection with the Chr. Hansen purchase price allocation. This segment is more sensitive to changes in the key assumptions.
Key assumptions
The recoverable amount determined in the impairment test is based on a value-in-use calcu-lation. To determine the value-in-use,
Management is required to estimate the present value of future cash flows. Cash flow projections are based on budgets and long-term forecasts approved by Management. The forecast period is based on Management\u2019s budget for 2025 and five-year projections in line with the planning period used internally by Management for the develop-ment of the combined business towards 2030.
Significant parameters in the present value esti-mate are sales growth, adjusted EBITDA margin, discount rate and growth expectations for the ter-minal period. The applied post-tax discount rate for Food & Health Biosolutions and Planetary Health Biosolutions is 7.2% (Pre-tax discount rate is 8.8%). The discount rate applied is the weighted average cost of capital (WACC) and reflects the latest market assumptions for the cost of equity and the cost of debt. The weighting of the cost of debt and the cost of equity is based on the capital structure for relevant peer groups.
The long-term growth rate for the terminal period
is based on the expected growth in the world econ-omy, and 2% is applied for both segments. The
expected sales growth rate and the adjusted EBITDA margins in the forecast period are based on historical experience and Management\u2019s assump-tions about expected market developments.
Food & Health Biosolutions
Sales growth (CAGR) of mid-to-high single digit percentage was assumed for the forecast period, which was supported by organic sales growth of 8% in 2024. Both Food & Beverages and Human Health are expected to contribute to sales growth from continued focus on growing the core busi-ness in close collaboration with our customers, new product developments, and expansion into new markets. Adjusted EBITDA margin is expected to improve gradually from 35.2% in 2024 towards the termi-nal period, from both production optimization, through economies of scale and strain optimiza-tions and through anticipated improved commer-cial cost ratios.
Planetary Health Biosolutions
Sales growth (CAGR) of mid-single digit percent-age was assumed for the forecast period, which was supported by the historical organic sales
growth within the sales areas in Planetary Health Biosolutions. Both Household Care and Agriculture, Energy & Tech are expected to con-tribute to sales growth, with a continued focus on growing the core business in close collaboration with our customers, new product developments, and expansion into new markets. Adjusted EBITDA margin is expected to improve gradually from 37.0% in 2024 towards the terminal period, from production and strain optimizations, and through economies of scale.Other assumptions include investments, which reflect both maintenance and expectations for organic growth, as well as our climate commitments. Sensitivity analysis
Sensitivity analysis covering key assumptions has been performed in connection with the impair-ment testing.
Food & Health Biosolutions includes the largest share of goodwill and other intangible assets acquired in connection with the combination with Chr. Hansen. The segment is more sensitive to changes in the key assumptions. However, based on the sensitivity analysis on the key assumptions there is no impairment, and the key assumptions are not sensitive to reasonable changes to an extent that will result in an impairment loss neither individually nor in combination. For example, a lowering of the terminal growth rate to zero or increasing the discount rate by one percentage point, will not lead to impairment. Similarly, a decrease in sales growth of four percentage points during the forecast period or a decrease in the adjusted EBITDA margin of five percentage points will not lead to impairment.
The discounted cash flow from the budget and forecast period for Planetary Health Biosolutions significantly exceeds the carrying amount of goodwill and other intangible assets.
Critical accounting estimates
Management assesses the risk of impairment of the Group\u2019s goodwill and intangible assets. This requires judgment in relation to the iden-tification of impairment indicators as well as cash-generating units (CGUs) and the underly-ing assumptions applied in impairment testing.
Goodwill is allocated to our operating seg-ments Food & Health Biosolutions and Planetary Health Biosolutions based on expected future cash flow from the assets acquired, as well as synergies identified.
Goodwill and intangibles not available for use are tested annually.
Impairment tests are based on Management\u2019s projections and anticipated net present value of estimated future cash flows (value-in-use).
The calculation of value-in-use is based on the discounted cash flow method, using esti-mates of future cash flows from the continu-ing use. The key parameters used in deter-mining value-in-use are the sales growth, adjusted EBITDA margins, discount rate and growth expectations for the terminal period.
Accounting policies
Intangible assets are initially measured at cost and are subsequently measured at cost less accumulated amortization and impairment losses.
Intangible assets acquired in a business combi-nation are recognized at fair value at the acqui-sition date. Goodwill is only arising from busi-ness combinations and is measured in the purchase price allocation.
Research costs are recognized in the income statement in the period in which they are incurred. Development costs are recognized in the income statement when incurred, unless the criteria for capitalization are met.
Costs associated with the development of sub-stantial software projects are capitalized if the costs are related to the development of new and improved systems.
Amortization is based on the straight-line method over the estimated useful lives when the assets are available for use.
\u2022\tTechnology and strain library are amortized over a period of 7-25 years. The useful lives of patents and trademarks are normally identical to the patent period. Licenses are amortized over the contractual period
\u2022\tCustomer relationships are amortized over a period of 7-25 years
\u2022\tSoftware and other IT projects are amor-tized over a period of 3-10 years
\u2022\tProduct brands are amortized over a period of 15-20 years
\u2022\tOther intangible assets are amortized over a period of 3-20 years
Estimated useful lives and amortization meth-ods are reassessed annually.Goodwill and intangible assets not available for use are not amortized but are subject to an annual impairment test, or when indicators of impairment are identified.
Goodwill is allocated to the cash-generating units as identified by Management, representing the smallest group of assets which together generate incoming cash flow from the continued use of the assets, and which are independent of cash flow from other assets or groups of assets.
The Group regularly reviews the carrying amounts of the intangible assets, subject to amortization, to determine whether there is an indication of impairment. An impairment loss is measured based on discounted projected cash flows and is recognized to the extent that the asset\u2019s carrying amount exceeds its estimated recoverable amount. Impairments on intangible assets, other than goodwill, are reviewed at each reporting date for possible reversal.
3.1 Goodwill and other intangible assets
EUR million | Goodwill | Technology and strain library | Customer relationships | Software and other intangibles | Total |
Cost at January 1, 2024 | 265.0 | 548.3 | 92.2 | 175.4 | 1,080.9 |
Currency translation adjustments | 30.8 | 1.9 | 8.0 | 1.1 | 41.8 |
Additions from business acquisitions | 5,309.2 | 3,061.0 | 984.8 | 358.3 | 9,713.3 |
Additions during the year | - | 0.2 | - | 21.3 | 21.5 |
Cost at December 31, 2024 | 5,605.0 | 3,611.4 | 1,085.0 | 556.1 | 10,857.5 |
Amortization and impairment losses at January 1, 2024 | |||||
(342.3) | (19.1) | (111.5) | (472.9) | ||
Currency translation adjustments | (1.7) | (0.4) | (0.2) | (2.3) | |
Amortization during the year | (199.8) | (63.9) | (41.1) | (304.8) | |
Impairment losses | (22.3) | (31.0) | - | (53.3) | |
Amortization and impairment losses at December 31, 2024 | |||||
(566.1) | (114.4) | (152.8) | (833.3) | ||
Carrying amount at December 31, 2024\t | 5,605.0 | 3,045.3 | 970.6 | 403.3 | 10,024.2 |
Recognition of amortization and impairment losses by function 2024 (2023)
EUR million
Cost of goods sold 181.7 (9.4)
Sales and distribution68.4 (9.9)
Research and development 49.5 (16.6)
Administration5.2 (4.4)
Special items53.3(-)
358.1
(40.3)
Additions from business acquisitions in 2024
On January 29, 2024, the statutory merger between Novozymes A/S (\u201cNovozymes\u201d) and Chr. Hansen Holding A/S (\u201cChr. Hansen\u201d) was success-fully completed. Additions from business acquisi-tions include goodwill of EUR 5,309.2 million and other intangible assets of EUR 4,404.1 million identified in connection with the Chr. Hansen
purchase price allocation. Reference is made to Note 3.4 for further details.
Changes to the presentation
Intangible asset categories were changed in 2024 in order to provide a better presentation of the material intangible assets identified in connection with the Chr. Hansen purchase price allocation.
The comparative figures for 2023 have been restated accordingly. The categories presented are:
\u2022\tGoodwill
\u2022\tTechnology and strain library, which include process and product technology, patents, licenses, trademarks, and acquired research and development projects
\u2022\tCustomer relationships
\u2022\tSoftware and other intangible assets, which mainly include software, other IT projects and product brands.
EUR million | Goodwill | Technology and strain library | Customer relationships | Software and other intangibles | Total |
Cost at January 1, 2023 | 269.9 | 574.7 | 93.5 | 150.7 | 1,088.8 |
Currency translation adjustments | (4.9) | (6.3) | (1.3) | (0.3) | (12.8) |
Additions during the year | - | 0.6 | - | 26.1 | 26.7 |
Disposals during the year | - | (20.7) | - | (1.1) | (21.8) |
Cost at December 31, 2023 | 265.0 | 548.3 | 92.2 | 175.4 | 1,080.9 |
Amortization and impairment losses at January 1, 2023 | |||||
(343.4) | (14.6) | (99.1) | (457.1) | ||
Currency translation adjustments | 2.5 | - | 0.2 | 2.7 | |
Amortization during the year | (22.1) | (4.5) | (13.7) | (40.3) | |
Disposals during the year | 20.7 | - | 1.1 | 21.8 | |
Amortization and impairment losses at December 31, 2023 | |||||
(342.3) | (19.1) | (111.5) | (472.9) | ||
Carrying amount at December 31, 2023\t | 265.0 | 206.0 | 73.1 | 63.9 | 608.0 |
Research and development projects
Novonesis\u2019 research and development activities are related to the development of new products and to the ongoing optimization of production processes for existing products. Research and development projects with a fair value of EUR 425.7 million were identified in the connection with the Chr. Hansen purchase price allocation.
On December 31, 2024, research and develop-ment projects with a carrying amount of EUR 210.1 million are not yet available for use.
Due to the significant uncertainty associated with the development of new products, no significant research and development projects met the crite-ria for capitalization in 2024 and 2023.
Other intangible asset disclosures
Material assets were identified in connection with the Chr. Hansen purchase price allocation as set out in Note 3.4. Carrying amount and remaining useful life of the individual material assets are:
\u2022\tStrain library, which comprises the acquired collection of around 50,000 microbial strains related to cultures and probiotics.
\u2022\tProduct technologies, which are technologies related to the specialized distinct recipes and formulations for the large portfolio of commer-cialized cultures, enzymes and probiotics products.
\u2022\tProcess technologies, which comprise the microbial and fermentation technology related to the production of the portfolio of cultures, enzymes, probiotics and HMOs.
\u2022\tMaterial customer relationships, which are related to the strong and long-term partner-ships with customers within the dairy industry globally.
Additional intangible assets (customer relation-ships, research and development projects, prod-uct brands, etc.) were identified in connection with the Chr. Hansen purchase price allocation but are not individually considered material assets.
On December 31, 2024, other intangible assets include software and other IT projects of EUR 44.3 million not yet available for use (2023: EUR 35.5 million).
EUR million | Carrying amount | Remaining useful life (years) |
Technology and strain library | ||
Strain library | 662.0 | 19 |
Product technology | 1,567.1 | 14 |
Process technology | 239.3 | 14 |
Customer relationships | ||
Customer relationships | 655.7 | 24 |
Impairment test
Other intangible assets
In 2024, impairment losses of EUR 53.3 million were recognized in Special items. No impairment losses were recognized in 2023.
Customer relationships in Russia were written down to zero, and an impairment loss of EUR 31.0 million was recognized in connection with the dis-continuation of the acquired activities in Russia. The impairment loss was related to the Food & Health Biosolutions segment.
In 2024, a group of small, acquired research and development projects were discontinued. The discontinuation and disposal led to an impairment loss of EUR 22.3 million, of which EUR 12.6 million was related to the Food & Health Biosolutions segment and EUR 9.7 million to the Planetary Health Biosolutions segment.
Goodwill
Goodwill is monitored for impairment at the oper-ating segment level, which is the lowest level of cash-generating units (CGU) to which consoli-dated goodwill is allocated and monitored by Management.
Following the combination of Novozymes and Chr. Hansen in 2024, Novonesis\u2019 operating segments are Food & Health Biosolutions and Planetary Health Biosolutions. In 2023, goodwill was moni-tored and tested for the entire Group. On December 31, 2024, goodwill of EUR 4,142.0 million was allocated to Food & Health Biosolutions, and EUR 1,463.0 million was allocated to Planetary Health Biosolutions. On December 31, 2023, good-will was EUR 265.0 million.
Neither in 2024 nor in 2023 did the annual impair-ment test reveal an impairment need. Management believes that no reasonable changes in the key assumptions are likely to lead to an impairment in any of the cash-generating units. Food & Health Biosolutions includes the largest share of goodwill and other intangible assets identified in connection with the Chr. Hansen purchase price allocation. This segment is more sensitive to changes in the key assumptions.
Key assumptions
The recoverable amount determined in the impairment test is based on a value-in-use calcu-lation. To determine the value-in-use,
Management is required to estimate the present value of future cash flows. Cash flow projections are based on budgets and long-term forecasts approved by Management. The forecast period is based on Management\u2019s budget for 2025 and five-year projections in line with the planning period used internally by Management for the develop-ment of the combined business towards 2030.
Significant parameters in the present value esti-mate are sales growth, adjusted EBITDA margin, discount rate and growth expectations for the ter-minal period. The applied post-tax discount rate for Food & Health Biosolutions and Planetary Health Biosolutions is 7.2% (Pre-tax discount rate is 8.8%). The discount rate applied is the weighted average cost of capital (WACC) and reflects the latest market assumptions for the cost of equity and the cost of debt. The weighting of the cost of debt and the cost of equity is based on the capital structure for relevant peer groups.
The long-term growth rate for the terminal period
is based on the expected growth in the world econ-omy, and 2% is applied for both segments. The
expected sales growth rate and the adjusted EBITDA margins in the forecast period are based on historical experience and Management\u2019s assump-tions about expected market developments.
Food & Health Biosolutions
Sales growth (CAGR) of mid-to-high single digit percentage was assumed for the forecast period, which was supported by organic sales growth of 8% in 2024. Both Food & Beverages and Human Health are expected to contribute to sales growth from continued focus on growing the core busi-ness in close collaboration with our customers, new product developments, and expansion into new markets. Adjusted EBITDA margin is expected to improve gradually from 35.2% in 2024 towards the termi-nal period, from both production optimization, through economies of scale and strain optimiza-tions and through anticipated improved commer-cial cost ratios.
Planetary Health Biosolutions
Sales growth (CAGR) of mid-single digit percent-age was assumed for the forecast period, which was supported by the historical organic sales
growth within the sales areas in Planetary Health Biosolutions. Both Household Care and Agriculture, Energy & Tech are expected to con-tribute to sales growth, with a continued focus on growing the core business in close collaboration with our customers, new product developments, and expansion into new markets. Adjusted EBITDA margin is expected to improve gradually from 37.0% in 2024 towards the terminal period, from production and strain optimizations, and through economies of scale.Other assumptions include investments, which reflect both maintenance and expectations for organic growth, as well as our climate commitments. Sensitivity analysis
Sensitivity analysis covering key assumptions has been performed in connection with the impair-ment testing.
Food & Health Biosolutions includes the largest share of goodwill and other intangible assets acquired in connection with the combination with Chr. Hansen. The segment is more sensitive to changes in the key assumptions. However, based on the sensitivity analysis on the key assumptions there is no impairment, and the key assumptions are not sensitive to reasonable changes to an extent that will result in an impairment loss neither individually nor in combination. For example, a lowering of the terminal growth rate to zero or increasing the discount rate by one percentage point, will not lead to impairment. Similarly, a decrease in sales growth of four percentage points during the forecast period or a decrease in the adjusted EBITDA margin of five percentage points will not lead to impairment.
The discounted cash flow from the budget and forecast period for Planetary Health Biosolutions significantly exceeds the carrying amount of goodwill and other intangible assets.
Critical accounting estimates
Management assesses the risk of impairment of the Group\u2019s goodwill and intangible assets. This requires judgment in relation to the iden-tification of impairment indicators as well as cash-generating units (CGUs) and the underly-ing assumptions applied in impairment testing.
Goodwill is allocated to our operating seg-ments Food & Health Biosolutions and Planetary Health Biosolutions based on expected future cash flow from the assets acquired, as well as synergies identified.
Goodwill and intangibles not available for use are tested annually.
Impairment tests are based on Management\u2019s projections and anticipated net present value of estimated future cash flows (value-in-use).
The calculation of value-in-use is based on the discounted cash flow method, using esti-mates of future cash flows from the continu-ing use. The key parameters used in deter-mining value-in-use are the sales growth, adjusted EBITDA margins, discount rate and growth expectations for the terminal period.
Accounting policies
Intangible assets are initially measured at cost and are subsequently measured at cost less accumulated amortization and impairment losses.
Intangible assets acquired in a business combi-nation are recognized at fair value at the acqui-sition date. Goodwill is only arising from busi-ness combinations and is measured in the purchase price allocation.
Research costs are recognized in the income statement in the period in which they are incurred. Development costs are recognized in the income statement when incurred, unless the criteria for capitalization are met.
Costs associated with the development of sub-stantial software projects are capitalized if the costs are related to the development of new and improved systems.
Amortization is based on the straight-line method over the estimated useful lives when the assets are available for use.
\u2022\tTechnology and strain library are amortized over a period of 7-25 years. The useful lives of patents and trademarks are normally identical to the patent period. Licenses are amortized over the contractual period
\u2022\tCustomer relationships are amortized over a period of 7-25 years
\u2022\tSoftware and other IT projects are amor-tized over a period of 3-10 years
\u2022\tProduct brands are amortized over a period of 15-20 years
\u2022\tOther intangible assets are amortized over a period of 3-20 years
Estimated useful lives and amortization meth-ods are reassessed annually.Goodwill and intangible assets not available for use are not amortized but are subject to an annual impairment test, or when indicators of impairment are identified.
Goodwill is allocated to the cash-generating units as identified by Management, representing the smallest group of assets which together generate incoming cash flow from the continued use of the assets, and which are independent of cash flow from other assets or groups of assets.
The Group regularly reviews the carrying amounts of the intangible assets, subject to amortization, to determine whether there is an indication of impairment. An impairment loss is measured based on discounted projected cash flows and is recognized to the extent that the asset\u2019s carrying amount exceeds its estimated recoverable amount. Impairments on intangible assets, other than goodwill, are reviewed at each reporting date for possible reversal.
Impairment
No impairment loss was recognized in 2023 or 2024.
Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses. Borrowing costs in respect of construction of major assets are capitalized.
Assets under construction include prepay-ments for property, plant and equipment, and assets under construction.
Depreciation is based on the straight-line method over the expected useful lives of the assets, as follows:
\u2022\tBuildings: 12\u201350 years
\u2022\tPlant and machinery: 5\u201325 years
\u2022\tOther equipment: 3\u201318 years
The residual values and useful lives of the assets are reviewed on an annual basis and adjusted if necessary at each reporting date. Climate-related matters, including the com-mitment to reach net-zero emissions, were considered to the extent possible when reviewing the useful lives of property, plant and equipment.
The Group regularly reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is esti-mated in order to determine the extent of any impairment loss. If the recoverable amount of an asset is estimated to be lower than its car-rying amount, the carrying amount is reduced to the recoverable amount. Impairment losses are reversed only to the extent of changes in the assumptions and estimates underlying the impairment calculation.
", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__80-1": { "value": "Recognition of amortization and impairment losses by function 2024 (2023)
EUR million
Cost of goods sold 181.7 (9.4)
Sales and distribution68.4 (9.9)
Research and development 49.5 (16.6)
Administration5.2 (4.4)
Special items53.3(-)
358.1
(40.3)
Recognition of depreciation by function 2024 (2023)
EUR million
Cost of goods sold 176.6 (110.5)
Sales and distribution11.5 (5.1)
Research and development 30.3 (21.2)
Administration20.9 (9.3)
239.3
(146.1)
Intangible assets are initially measured at cost and are subsequently measured at cost less accumulated amortization and impairment losses.
Intangible assets acquired in a business combi-nation are recognized at fair value at the acqui-sition date. Goodwill is only arising from busi-ness combinations and is measured in the purchase price allocation.
Research costs are recognized in the income statement in the period in which they are incurred. Development costs are recognized in the income statement when incurred, unless the criteria for capitalization are met.
Costs associated with the development of sub-stantial software projects are capitalized if the costs are related to the development of new and improved systems.
Amortization is based on the straight-line method over the estimated useful lives when the assets are available for use.
\u2022\tTechnology and strain library are amortized over a period of 7-25 years. The useful lives of patents and trademarks are normally identical to the patent period. Licenses are amortized over the contractual period
\u2022\tCustomer relationships are amortized over a period of 7-25 years
\u2022\tSoftware and other IT projects are amor-tized over a period of 3-10 years
\u2022\tProduct brands are amortized over a period of 15-20 years
\u2022\tOther intangible assets are amortized over a period of 3-20 years
Estimated useful lives and amortization meth-ods are reassessed annually.Goodwill and intangible assets not available for use are not amortized but are subject to an annual impairment test, or when indicators of impairment are identified.
Goodwill is allocated to the cash-generating units as identified by Management, representing the smallest group of assets which together generate incoming cash flow from the continued use of the assets, and which are independent of cash flow from other assets or groups of assets.
The Group regularly reviews the carrying amounts of the intangible assets, subject to amortization, to determine whether there is an indication of impairment. An impairment loss is measured based on discounted projected cash flows and is recognized to the extent that the asset\u2019s carrying amount exceeds its estimated recoverable amount. Impairments on intangible assets, other than goodwill, are reviewed at each reporting date for possible reversal.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__84": { "value": "Intangible assets are initially measured at cost and are subsequently measured at cost less accumulated amortization and impairment losses.
Intangible assets acquired in a business combi-nation are recognized at fair value at the acqui-sition date. Goodwill is only arising from busi-ness combinations and is measured in the purchase price allocation.
Research costs are recognized in the income statement in the period in which they are incurred. Development costs are recognized in the income statement when incurred, unless the criteria for capitalization are met.
Costs associated with the development of sub-stantial software projects are capitalized if the costs are related to the development of new and improved systems.
Amortization is based on the straight-line method over the estimated useful lives when the assets are available for use.
\u2022\tTechnology and strain library are amortized over a period of 7-25 years. The useful lives of patents and trademarks are normally identical to the patent period. Licenses are amortized over the contractual period
\u2022\tCustomer relationships are amortized over a period of 7-25 years
\u2022\tSoftware and other IT projects are amor-tized over a period of 3-10 years
\u2022\tProduct brands are amortized over a period of 15-20 years
\u2022\tOther intangible assets are amortized over a period of 3-20 years
Estimated useful lives and amortization meth-ods are reassessed annually.Goodwill and intangible assets not available for use are not amortized but are subject to an annual impairment test, or when indicators of impairment are identified.
Goodwill is allocated to the cash-generating units as identified by Management, representing the smallest group of assets which together generate incoming cash flow from the continued use of the assets, and which are independent of cash flow from other assets or groups of assets.
The Group regularly reviews the carrying amounts of the intangible assets, subject to amortization, to determine whether there is an indication of impairment. An impairment loss is measured based on discounted projected cash flows and is recognized to the extent that the asset\u2019s carrying amount exceeds its estimated recoverable amount. Impairments on intangible assets, other than goodwill, are reviewed at each reporting date for possible reversal.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__85": { "value": "Intangible assets are initially measured at cost and are subsequently measured at cost less accumulated amortization and impairment losses.
Intangible assets acquired in a business combi-nation are recognized at fair value at the acqui-sition date. Goodwill is only arising from busi-ness combinations and is measured in the purchase price allocation.
Research costs are recognized in the income statement in the period in which they are incurred. Development costs are recognized in the income statement when incurred, unless the criteria for capitalization are met.
Costs associated with the development of sub-stantial software projects are capitalized if the costs are related to the development of new and improved systems.
Amortization is based on the straight-line method over the estimated useful lives when the assets are available for use.
\u2022\tTechnology and strain library are amortized over a period of 7-25 years. The useful lives of patents and trademarks are normally identical to the patent period. Licenses are amortized over the contractual period
\u2022\tCustomer relationships are amortized over a period of 7-25 years
\u2022\tSoftware and other IT projects are amor-tized over a period of 3-10 years
\u2022\tProduct brands are amortized over a period of 15-20 years
\u2022\tOther intangible assets are amortized over a period of 3-20 years
Estimated useful lives and amortization meth-ods are reassessed annually.Goodwill and intangible assets not available for use are not amortized but are subject to an annual impairment test, or when indicators of impairment are identified.
Goodwill is allocated to the cash-generating units as identified by Management, representing the smallest group of assets which together generate incoming cash flow from the continued use of the assets, and which are independent of cash flow from other assets or groups of assets.
The Group regularly reviews the carrying amounts of the intangible assets, subject to amortization, to determine whether there is an indication of impairment. An impairment loss is measured based on discounted projected cash flows and is recognized to the extent that the asset\u2019s carrying amount exceeds its estimated recoverable amount. Impairments on intangible assets, other than goodwill, are reviewed at each reporting date for possible reversal.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__86-1": { "value": "Intangible assets are initially measured at cost and are subsequently measured at cost less accumulated amortization and impairment losses.
Intangible assets acquired in a business combi-nation are recognized at fair value at the acqui-sition date. Goodwill is only arising from busi-ness combinations and is measured in the purchase price allocation.
Research costs are recognized in the income statement in the period in which they are incurred. Development costs are recognized in the income statement when incurred, unless the criteria for capitalization are met.
Costs associated with the development of sub-stantial software projects are capitalized if the costs are related to the development of new and improved systems.
Amortization is based on the straight-line method over the estimated useful lives when the assets are available for use.
\u2022\tTechnology and strain library are amortized over a period of 7-25 years. The useful lives of patents and trademarks are normally identical to the patent period. Licenses are amortized over the contractual period
\u2022\tCustomer relationships are amortized over a period of 7-25 years
\u2022\tSoftware and other IT projects are amor-tized over a period of 3-10 years
\u2022\tProduct brands are amortized over a period of 15-20 years
\u2022\tOther intangible assets are amortized over a period of 3-20 years
Estimated useful lives and amortization meth-ods are reassessed annually.Goodwill and intangible assets not available for use are not amortized but are subject to an annual impairment test, or when indicators of impairment are identified.
Goodwill is allocated to the cash-generating units as identified by Management, representing the smallest group of assets which together generate incoming cash flow from the continued use of the assets, and which are independent of cash flow from other assets or groups of assets.
The Group regularly reviews the carrying amounts of the intangible assets, subject to amortization, to determine whether there is an indication of impairment. An impairment loss is measured based on discounted projected cash flows and is recognized to the extent that the asset\u2019s carrying amount exceeds its estimated recoverable amount. Impairments on intangible assets, other than goodwill, are reviewed at each reporting date for possible reversal.
Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses. Borrowing costs in respect of construction of major assets are capitalized.
Assets under construction include prepay-ments for property, plant and equipment, and assets under construction.
Depreciation is based on the straight-line method over the expected useful lives of the assets, as follows:
\u2022\tBuildings: 12\u201350 years
\u2022\tPlant and machinery: 5\u201325 years
\u2022\tOther equipment: 3\u201318 years
The residual values and useful lives of the assets are reviewed on an annual basis and adjusted if necessary at each reporting date. Climate-related matters, including the com-mitment to reach net-zero emissions, were considered to the extent possible when reviewing the useful lives of property, plant and equipment.
The Group regularly reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is esti-mated in order to determine the extent of any impairment loss. If the recoverable amount of an asset is estimated to be lower than its car-rying amount, the carrying amount is reduced to the recoverable amount. Impairment losses are reversed only to the extent of changes in the assumptions and estimates underlying the impairment calculation.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__87": { "value": "3.2 Property, plant and equipment
EUR million | Land and buildings | Plant and machinery | Other equipment | Assets under construction | Total |
Cost at January 1, 2024 | 1,120.2 | 1,772.2 | 388.6 | 237.0 | 3,518.0 |
Currency translation adjustments | 28.5 | 46.1 | 5.1 | 6.1 | 85.8 |
Additions from business acquisitions | 476.5 | 344.3 | 64.2 | 277.7 | 1,162.7 |
Additions during the year | 30.7 | 40.9 | 35.0 | 252.3 | 358.9 |
Disposals during the year | (9.3) | (81.7) | (27.8) | - | (118.8) |
Transfers to/(from) other items | 45.2 | 91.7 | 16.4 | (153.3) | - |
Cost at December 31, 2024 | 1,691.8 | 2,213.5 | 481.5 | 619.8 | 5,006.6 |
Depreciation and impairment losses at January 1, 2024 | |||||
(501.1) | (1,107.6) | (255.5) | (1,864.2) | ||
Currency translation adjustments | (11.9) | (24.6) | (4.6) | (41.1) | |
Depreciation during the year | (70.0) | (124.0) | (45.3) | (239.3) | |
Disposals during the year | 5.9 | 79.2 | 21.2 | 106.3 | |
Depreciation and impairment losses at December 31, 2024 | |||||
(577.1) | (1,177.0) | (284.2) | (2,038.3) | ||
Carrying amount at December 31, 2024 | 1,114.7 | 1,036.5 | 197.3 | 619.8 | 2,968.3 |
Recognition of depreciation by function 2024 (2023)
EUR million
Cost of goods sold 176.6 (110.5)
Sales and distribution11.5 (5.1)
Research and development 30.3 (21.2)
Administration20.9 (9.3)
239.3
(146.1)
Capitalized interest and pledges
Interest of EUR 4.4 million (2023: EUR 6.0 million) was capitalized under Additions during the year and recognized as Investing activities in the state-ment of cash flows. Capitalization rate: 1.85% (2023: 2.28%).
Land and buildings with a carrying amount of EUR 236.9 million (2023: EUR 173.9 million) was pledged as security to credit institutions in respect of mort-gage loans expiring in 2029 and 2039.
Impairment
No impairment loss was recognized in 2023 or 2024.
Contractual obligations
Contractual obligations to third parties relating to investments in property, plant and equipment amounted to EUR 133.3 million (2023: EUR 33.8 million).
EUR million | Land and buildings | Plant and machinery | Other equipment | Assets under construction | Total |
Cost at January 1, 2023 | 1,036.9 | 1,662.5 | 387.3 | 389.4 | 3,476.1 |
Currency translation adjustments | (24.8) | (41.2) | (9.2) | (11.1) | (86.3) |
Additions during the year | 31.0 | 48.0 | 20.7 | 166.6 | 266.3 |
Disposals during the year | (7.1) | (10.4) | (20.9) | - | (38.4) |
Transfers to assets held for sale | (43.3) | (55.7) | (0.7) | - | (99.7) |
Transfers to/(from) other items | 127.5 | 169.0 | 11.4 | (307.9) | - |
Cost at December 31, 2023 | 1,120.2 | 1,772.2 | 388.6 | 237.0 | 3,518.0 |
Depreciation and impairment losses at January 1, 2023 | |||||
(499.2) | (1,104.3) | (249.0) | (1,852.5) | ||
Currency translation adjustments | 13.6 | 27.3 | 6.1 | 47.0 | |
Depreciation during the year | (40.0) | (74.4) | (31.7) | (146.1) | |
Disposals during the year | 5.0 | 8.9 | 18.4 | 32.3 | |
Transfers to assets held for sale | 20.0 | 34.4 | 0.7 | 55.1 | |
Transfers to/(from) other items | (0.5) | 0.5 | - | - | |
Depreciation and impairment losses at December 31, 2023 | |||||
(501.1) | (1,107.6) | (255.5) | (1,864.2) | ||
Carrying amount at December 31, 2023\t | 619.1 | 664.6 | 133.1 | 237.0 | 1,653.8 |
Accounting policies
Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses. Borrowing costs in respect of construction of major assets are capitalized.
Assets under construction include prepay-ments for property, plant and equipment, and assets under construction.
Depreciation is based on the straight-line method over the expected useful lives of the assets, as follows:
\u2022\tBuildings: 12\u201350 years
\u2022\tPlant and machinery: 5\u201325 years
\u2022\tOther equipment: 3\u201318 years
The residual values and useful lives of the assets are reviewed on an annual basis and adjusted if necessary at each reporting date. Climate-related matters, including the com-mitment to reach net-zero emissions, were considered to the extent possible when reviewing the useful lives of property, plant and equipment.
The Group regularly reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is esti-mated in order to determine the extent of any impairment loss. If the recoverable amount of an asset is estimated to be lower than its car-rying amount, the carrying amount is reduced to the recoverable amount. Impairment losses are reversed only to the extent of changes in the assumptions and estimates underlying the impairment calculation.
Capitalized interest and pledges
Interest of EUR 4.4 million (2023: EUR 6.0 million) was capitalized under Additions during the year and recognized as Investing activities in the state-ment of cash flows. Capitalization rate: 1.85% (2023: 2.28%).
Land and buildings with a carrying amount of EUR 236.9 million (2023: EUR 173.9 million) was pledged as security to credit institutions in respect of mort-gage loans expiring in 2029 and 2039.
Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses. Borrowing costs in respect of construction of major assets are capitalized.
Assets under construction include prepay-ments for property, plant and equipment, and assets under construction.
Depreciation is based on the straight-line method over the expected useful lives of the assets, as follows:
\u2022\tBuildings: 12\u201350 years
\u2022\tPlant and machinery: 5\u201325 years
\u2022\tOther equipment: 3\u201318 years
The residual values and useful lives of the assets are reviewed on an annual basis and adjusted if necessary at each reporting date. Climate-related matters, including the com-mitment to reach net-zero emissions, were considered to the extent possible when reviewing the useful lives of property, plant and equipment.
The Group regularly reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is esti-mated in order to determine the extent of any impairment loss. If the recoverable amount of an asset is estimated to be lower than its car-rying amount, the carrying amount is reduced to the recoverable amount. Impairment losses are reversed only to the extent of changes in the assumptions and estimates underlying the impairment calculation.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingCostsExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__90": { "value": "Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses. Borrowing costs in respect of construction of major assets are capitalized.
Assets under construction include prepay-ments for property, plant and equipment, and assets under construction.
Depreciation is based on the straight-line method over the expected useful lives of the assets, as follows:
\u2022\tBuildings: 12\u201350 years
\u2022\tPlant and machinery: 5\u201325 years
\u2022\tOther equipment: 3\u201318 years
The residual values and useful lives of the assets are reviewed on an annual basis and adjusted if necessary at each reporting date. Climate-related matters, including the com-mitment to reach net-zero emissions, were considered to the extent possible when reviewing the useful lives of property, plant and equipment.
The Group regularly reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is esti-mated in order to determine the extent of any impairment loss. If the recoverable amount of an asset is estimated to be lower than its car-rying amount, the carrying amount is reduced to the recoverable amount. Impairment losses are reversed only to the extent of changes in the assumptions and estimates underlying the impairment calculation.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingCostsExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__97": { "value": "Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses. Borrowing costs in respect of construction of major assets are capitalized.
Assets under construction include prepay-ments for property, plant and equipment, and assets under construction.
Depreciation is based on the straight-line method over the expected useful lives of the assets, as follows:
\u2022\tBuildings: 12\u201350 years
\u2022\tPlant and machinery: 5\u201325 years
\u2022\tOther equipment: 3\u201318 years
The residual values and useful lives of the assets are reviewed on an annual basis and adjusted if necessary at each reporting date. Climate-related matters, including the com-mitment to reach net-zero emissions, were considered to the extent possible when reviewing the useful lives of property, plant and equipment.
The Group regularly reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is esti-mated in order to determine the extent of any impairment loss. If the recoverable amount of an asset is estimated to be lower than its car-rying amount, the carrying amount is reduced to the recoverable amount. Impairment losses are reversed only to the extent of changes in the assumptions and estimates underlying the impairment calculation.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__98": { "value": "Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses. Borrowing costs in respect of construction of major assets are capitalized.
Assets under construction include prepay-ments for property, plant and equipment, and assets under construction.
Depreciation is based on the straight-line method over the expected useful lives of the assets, as follows:
\u2022\tBuildings: 12\u201350 years
\u2022\tPlant and machinery: 5\u201325 years
\u2022\tOther equipment: 3\u201318 years
The residual values and useful lives of the assets are reviewed on an annual basis and adjusted if necessary at each reporting date. Climate-related matters, including the com-mitment to reach net-zero emissions, were considered to the extent possible when reviewing the useful lives of property, plant and equipment.
The Group regularly reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is esti-mated in order to determine the extent of any impairment loss. If the recoverable amount of an asset is estimated to be lower than its car-rying amount, the carrying amount is reduced to the recoverable amount. Impairment losses are reversed only to the extent of changes in the assumptions and estimates underlying the impairment calculation.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__99-1": { "value": "3.3 Leases
EUR million | 2024 | 2023 |
Land and buildings | 177.4 | 32.1 |
Plant and machinery | 11.3 | 11.0 |
Other equipment | 13.6 | 9.1 |
Carrying amount of lease assets | 202.3 | 52.2 |
Lease liabilities | ||
Less than 1 year | 29.5 | 18.8 |
Between 1 and 5 years | 62.6 | 25.2 |
More than 5 years | 103.7 | 11.8 |
Undiscounted lease liabilities at December 31 | 195.8 | 55.8 |
Amounts recognized in the income statement: | ||
Interest on lease liabilities | 6.8 | 2.1 |
Depreciation of lease assets per asset class | ||
Land and buildings | 20.8 | 9.1 |
Plant and machinery | 1.0 | 0.7 |
Other equipment | 7.8 | 6.0 |
Depreciation of lease assets | 29.6 | 15.8 |
Amounts recognized in the statement of cash flows: | ||
Total cash outflow for leases | 34.6 | 18.6 |
As part of the combination with Chr. Hansen in 2024, lease of land and buildings has increased sig-nificantly, in part due to a lease relating to company offices in Hoersholm, Denmark. Management has assessed that the lease term for this lease, includ-ing a five-year extension option, is 25 years.
Additions to the lease assets during 2024 amounted to EUR 187.6 million (2023: EUR 17.2 mil-lion), of which EUR 160.0 million is from business acquisitions.
Accounting policies
Lease assets
Lease assets are \u2018right-of-use assets\u2019 from lease agreements. If, at inception, it is assessed that a contract contains a lease, a lease asset is rec-ognized. Lease assets are initially measured at the present value of future lease payments, plus the cost of obligations to refurbish the asset. Payments include fixed payments, varia-ble lease payments depending on an index or a rate, and the exercise price of purchase options that are reasonably certain to be exercised.
Lease assets are depreciated using the straight-line method over the shorter of the expected lease term and the useful life of the underlying asset. Lease assets are tested for impairment whenever there is an indication that the assets may be impaired.
Lease assets are depreciated as follows:
\u2022\tBuildings: 1\u201325 years
\u2022\tLand: 10\u201390 years
\u2022\tPlant and machinery: 1\u201310 years
\u2022\tOther equipment: 1\u201310 years
Short-term leases and leases of low value are recognized as expenses in the income state-ment on a straight-line basis over the lease term.
Novonesis\u2019 portfolio of leases covers leases of land, buildings, plant and machinery, and other equipment such as cars and transportation containers.
Lease liabilities
Lease liabilities are initially recognized at the present value of future lease payments, includ-ing payments from extension or purchase options that are considered reasonably certain to be exercised.
The lease liability is measured using the implicit borrowing rate in the contracts or, where this is not available, the marginal borrowing rate in the countries in which Novonesis operates. Novonesis applies a single discount rate to portfolios of leases in the countries in which Novonesis operates, based on contract cur-rency and loan periods.
If a lease contract is modified, the lease liability is remeasured. For building leases, lease terms are estimated, taking the size of the building and its strategic importance into consideration. Novonesis has entered into several open-ended building leases and building leases with extension options. Lease terms of such agree-ments are estimated based on the strategic importance of the buildings and the estimated time frame necessary to vacate the premises. The estimated lease term is reassessed at each reporting date. The estimated lease terms for such contracts do not exceed 25 years.
5.3 Borrowings
EUR million | 2024 | 2023 |
Credit institutions | 1,576.1 | 988.2 |
Lease liabilities | 193.9 | 49.4 |
Derivatives | 26.8 | 6.4 |
Borrowings at December 31 | 1,796.8 | 1,044.0 |
Recognized in the balance sheet as follows: | ||
Non-current\t | 1,530.4 | 612.0 |
Current\t | 266.4 | 432.0 |
Borrowings at December 31 | 1,796.8 | 1,044.0 |
EUR million | 2024 | 2023 |
Contractual maturities incl. interest for credit institutions* | ||
Less than 1 year | 245.2 | 430.5 |
Between 1 and 5 years | 1,169.3 | 372.2 |
More than 5 years | 276.8 | 263.5 |
Undiscounted credit institutions at December 31 | 1,691.3 | 1,066.2 |
Reference is made to Note 3.3 for similar information regarding lease liabilities.
* Includes effect from interest rate swaps.
Credit institutions - currency 2024 (2023)
EUR million
EUR 999.0(312.5)
DKK577.1(675.7)
1,576.1
(988.2)
Credit institutions (incl. hedging) \u2013 fixed or floating interest rate 2024 (2023)
EUR million
Fixed interest rate1,007.0(521.3)
Floating interest rate569.1(466.9)
1,576.1
(988.2)
2024 | 2023 | |||||
EUR million | Credit institutions | Lease liabilities | Total | Credit institutions | Lease liabilities | Total |
Liabilities from financing activities at January 1 | ||||||
988.2 | 49.4 | 1,037.6 | 865.6 | 55.3 | 920.9 | |
Additions from business acquisitions | ||||||
963.5 | 160.0 | 1,123.5 | - | - | - | |
Financing cash flows | (377.5) | (27.8) | (405.3) | 123.8 | (16.5) | 107.3 |
Currency translation adjustments | 1.9 | (0.3) | 1.6 | (1.2) | (1.5) | (2.7) |
Other changes* | - | 12.6 | 12.6 | - | 12.1 | 12.1 |
Total liabilities from financing activities at December 31 | ||||||
1,576.1 | 193.9 | 1,770.0 | 988.2 | 49.4 | 1,037.6 |
* Other changes include changes in lease liabilities from new or terminated leases and accrued interest expenses, which will be presented as operating cash flows in the statement of cash flows when paid.
Lease assets
Lease assets are \u2018right-of-use assets\u2019 from lease agreements. If, at inception, it is assessed that a contract contains a lease, a lease asset is rec-ognized. Lease assets are initially measured at the present value of future lease payments, plus the cost of obligations to refurbish the asset. Payments include fixed payments, varia-ble lease payments depending on an index or a rate, and the exercise price of purchase options that are reasonably certain to be exercised.
Lease assets are depreciated using the straight-line method over the shorter of the expected lease term and the useful life of the underlying asset. Lease assets are tested for impairment whenever there is an indication that the assets may be impaired.
Lease assets are depreciated as follows:
\u2022\tBuildings: 1\u201325 years
\u2022\tLand: 10\u201390 years
\u2022\tPlant and machinery: 1\u201310 years
\u2022\tOther equipment: 1\u201310 years
Short-term leases and leases of low value are recognized as expenses in the income state-ment on a straight-line basis over the lease term.
Novonesis\u2019 portfolio of leases covers leases of land, buildings, plant and machinery, and other equipment such as cars and transportation containers.
Lease liabilities
Lease liabilities are initially recognized at the present value of future lease payments, includ-ing payments from extension or purchase options that are considered reasonably certain to be exercised.
The lease liability is measured using the implicit borrowing rate in the contracts or, where this is not available, the marginal borrowing rate in the countries in which Novonesis operates. Novonesis applies a single discount rate to portfolios of leases in the countries in which Novonesis operates, based on contract cur-rency and loan periods.
If a lease contract is modified, the lease liability is remeasured. For building leases, lease terms are estimated, taking the size of the building and its strategic importance into consideration. Novonesis has entered into several open-ended building leases and building leases with extension options. Lease terms of such agree-ments are estimated based on the strategic importance of the buildings and the estimated time frame necessary to vacate the premises. The estimated lease term is reassessed at each reporting date. The estimated lease terms for such contracts do not exceed 25 years.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__101-1": { "value": "3.4 Business acquisitions
Acquisitions in 2024
On January 29, 2024, the final regulatory approv-als were obtained and the final registration of the statutory merger between Novozymes A/S (\u201cNovozymes\u201d) and Chr. Hansen Holding A/S (\u201cChr. Hansen\u201d) was successfully completed with the Danish Business Authority.
The statutory merger was effected through an exchange of all shares of Chr. Hansen (\u201cChr. Hansen Shares\u201d) with a total of 187,298,646 newly issued shares in Novozymes A/S (the Merger Consideration Shares). The total consideration for Chr. Hansen Holding A/S amounts to EUR 9.1 billion based on a price per share of EUR 48.5 (DKK 361.4) equal to the closing share price of Novozymes A/S on Nasdaq Copenhagen on the date of the regis-tration of the merger.
Chr. Hansen is a global, differentiated bioscience company that develops natural ingredient solutions for the food, nutritional, pharmaceutical and agricul-tural industries. Chr. Hansen\u2019s microbial and fermen-tation technology platforms, including a broad and relevant collection of around 50,000 microbial strains, have game-changing potential. As the world\u2019s most sustainable food ingredients company, Chr. Hansen touch the lives of more than 1 billion people every day.
The merger is accounted for as a business combi-nation using the acquisition method under IFRS 3, where Novozymes A/S is identified as the acquirer and Chr. Hansen Holding A/S is identified as the acquiree. The fair value and purchase price allocation to identifiable assets and liabilities of Chr. Hansen were finalized on December 31, 2024.
The purchase price allocation resulted in recog-nition of a goodwill amount of EUR 5,309.2 mil-lion, technology-related assets of EUR 3,061.0 million, customer relationships of EUR 984.8 mil-lion, and brands and other intangible assets of EUR 358.3 million.
The goodwill arising from the merger primarily relates to synergies from complementary product offerings. The combination of Novozymes and Chr. Hansen will create a leading global biosolutions partner with a broad biological toolbox and a diver-sified portfolio in attractive markets. The combina-tion is an important step towards unlocking addi-tional growth opportunities, as the combined scale, know-how, commercial strengths, and innovation excellence will drive value for the shareholders and customers. In addition, the goodwill relates to the Chr. Hansen assembled workforce, which cannot be recognized separately from goodwill. The good-will is not tax-deductible.
Fair value recognized at the acquisition date January 29, 2024: | |
EUR million | Chr. Hansen |
Assets | |
Other intangible assets | 4,404.1 |
Property, plant and equipment | 1,162.7 |
Financial assets | 20.9 |
Inventories | 393.4 |
Trade and other receivables | 207.3 |
Cash and cash equivalents | 38.1 |
Assets held for sale | 84.1 |
Assets | 6,310.6 |
Liabilities | |
Deferred tax liabilities, net | (1,088.3) |
Borrowings | (1,123.5) |
Tax payables, net | (83.3) |
Other liabilities | (244.9) |
Liabilities | (2,540.0) |
Acquired net assets | 3,770.6 |
Purchase price | |
Consideration in equity issuance | 9,079.8 |
Purchase price | 9,079.8 |
Goodwill | 5,309.2 |
Assets held for sale of EUR 84.1 million are related to the divested lactase enzyme business at the agreed sales price. The combined lactase enzyme business divestment was completed on November 26, 2024. Please refer to note 3.5 for further details.
Deferred tax liabilities include the deferred tax related to the fair value step-ups on measuring the acquired net assets and liabilities (excluding goodwill) based on the tax rates applicable.Fair value of receivables and liabilities has been measured at the contractual amount expected to be received or paid. In addition, collectability has been taken into consideration on trade receivables.
The merger contributed EUR 1,257 million to net sales, approximately EUR 430 million to adjusted EBITDA and approximately EUR -130 million to net profit during the period from January 29 to December 31, 2024.
If the merger had occurred on January 1, 2024, the contribution to net sales would have been approxi-mately EUR 1,369 million, approximately EUR 465 million to adjusted EBITDA and approximately EUR -160 million to net profit. The negative net profit contribution is impacted by special items, the
inventory step-up of EUR 183.9 million and addi-tional depreciation and amortization of EUR 272.7 million related to the fair value step-ups on the identified assets of Chr. Hansen.
Transaction costs of EUR 36.0 million (2023: EUR 29.5 million) are recognized within Special items in the income statement, and transaction costs
related to the issuance of shares of EUR 5.0 million are recognized within equity in 2024.
Critical accounting estimates
Key accounting estimates are used in determin-ing the fair value of assets acquired in business combinations and requires Management judg-ments of whether intangible assets acquired in a business combination are separately identifia-ble. This involves assessing if the identified technology-related assets, customer relation-ships and brands meet the separability criterion, which means they can be separated from the acquiree and sold, transferred, licensed, rented, or exchanged independently.
The application of the acquisition method of accounting involves the use of significant esti-mates, because the identifiable net assets of the acquiree are recognized at their fair value, for which observable market prices are typically not available. This is particularly relevant for assets which require the use of valuation techniques
typically based on estimates of present value of future uncertain cash flows.
The fair value is based on assumptions made by market participants, which in the business com-bination is assessed to be a company with simi-lar needs and capacity to acquire assets of the same nature and size as those of the acquired business.
The following valuation techniques have been applied in the fair value assessment of the sig-nificant assets acquired:
\u2022\tProduct technology, and research and devel-opment projects: the Multi-period Excess Earnings Method (MEEM)
\u2022\tProcess technology and strain library: the Relief from Royalty (RfR) method
\u2022\tCustomer relationships: the Allowed Margin Method
\u2022\tBrands: the Relief from Royalty (RfR) method
Inputs used in these valuation methods for assessing net present value of intangible assets include revenue and cash flow projections, valuation period, discount factor, as well as churn and royalty rates.
The valuation of property, plant and equipment identified in the acquisition is mainly based on the depreciated replacement cost method of the significant production facilities located in Denmark, France, Germany and the U.S. The depreciated replacement cost method reflects adjustments for physical deterioration, as well as functional and economic obsolescence. Land has been valued using the market approach based on comparable transactions.
Fair value of inventories is based on expected selling price less costs to complete and a rea-sonable margin.
Management has engaged external experts to support the purchase price allocation and fair value assessment.
Accounting policies
Business combinations are accounted for using the acquisition method. The purchase price includes the consideration transferred, shares issued and fair value at the acquisition date of any contingent consideration arrangement.
The purchase price is allocated to the identifi-able assets and liabilities, non-controlling interests in the acquiree and contingent liabili-ties assumed, which are measured at fair value at the date of acquisition by applying relevant valuation methods.
Goodwill is initially measured at cost, being the excess of the consideration transferred over the net identifiable assets acquired and liabilities assumed.
If, on the acquisition date, there are any uncer-tainties with respect to identifying or measur-ing the acquired net assets, the initial recogni-tion will be made on the basis of estimated fair values. The estimated fair values may be adjusted or additional assets or liabilities may be recognized during the measurement period of up to 12 months to reflect new infor-mation that becomes available about condi-tions prevailing on the acquisition date. Such adjustments are made to the initial purchase price allocation as a restatement of prior infor-mation, including to the amount of goodwill.
Acquisition-related costs are expensed as incurred, except if related to the issue of equity securities.
3.5 Divestment of the lactase enzyme business
Details on the divestment of the lactase enzyme business are as follows:
EUR million | 2024 |
Consideration | |
Cash received | 145.4 |
Total consideration | 145.4 |
Carrying amount of net assets divested | (125.0) |
Transaction costs | (7.7) |
Gain on divestment before income tax | 12.7 |
Tax on gain | (4.6) |
Gain on divestment after income tax | 8.1 |
The combination of Novozymes and Chr. Hansen was approved by the European Commission under the condition of divesting a part of Novonesis\u2019 combined global lactase enzyme business. In 2023, a definitive agreement to sell the combined lactase enzyme business was entered into with Kerry Group plc (\u201cKerry\u201d) and approved by the European Commission on January 26, 2024.
On November 26, 2024, the agreed carve-out activities were completed and approved by the
European Commission. The lactase enzyme busi-ness was transferred to Kerry and the total consid-eration of EUR 145.4 million was received.
The divested lactase enzyme business was related to the Food & Health Biosolutions seg-ment. The gain on sale before tax of EUR 12.7 mil-lion is recognized within special items. Tax on divestment of EUR 4.6 million is recognized within tax in the income statement.
The carrying amount of the net assets divested on November 26, 2024 were:
EUR million | 2024 |
Intangible assets | 84.1 |
Property, plant and equipment | 38.0 |
Inventories | 4.3 |
Trade and other receivables | 0.7 |
Cash and cash equivalents | 0.9 |
Total assets | 128.0 |
Trade and other payables | (3.0) |
Total liabilities | (3.0) |
Net assets divested | 125.0 |
Intangible assets of EUR 84.1 million was identified in connection with the Chr. Hansen purchase price allocation and was recognized as assets held for sale at the acquisition date. Please refer to Note 3.4 for further details.
The divestment includes 100% of the shares in Nuocheng Trillion Food (Tianjin) Co., Ltd., China.
There were no significant exchange gains or losses recognized in Other comprehensive income with respect to the divestment.
Business combinations are accounted for using the acquisition method. The purchase price includes the consideration transferred, shares issued and fair value at the acquisition date of any contingent consideration arrangement.
The purchase price is allocated to the identifi-able assets and liabilities, non-controlling interests in the acquiree and contingent liabili-ties assumed, which are measured at fair value at the date of acquisition by applying relevant valuation methods.
Goodwill is initially measured at cost, being the excess of the consideration transferred over the net identifiable assets acquired and liabilities assumed.
If, on the acquisition date, there are any uncer-tainties with respect to identifying or measur-ing the acquired net assets, the initial recogni-tion will be made on the basis of estimated fair values. The estimated fair values may be adjusted or additional assets or liabilities may be recognized during the measurement period of up to 12 months to reflect new infor-mation that becomes available about condi-tions prevailing on the acquisition date. Such adjustments are made to the initial purchase price allocation as a restatement of prior infor-mation, including to the amount of goodwill.
Acquisition-related costs are expensed as incurred, except if related to the issue of equity securities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__103": { "value": "Business combinations are accounted for using the acquisition method. The purchase price includes the consideration transferred, shares issued and fair value at the acquisition date of any contingent consideration arrangement.
The purchase price is allocated to the identifi-able assets and liabilities, non-controlling interests in the acquiree and contingent liabili-ties assumed, which are measured at fair value at the date of acquisition by applying relevant valuation methods.
Goodwill is initially measured at cost, being the excess of the consideration transferred over the net identifiable assets acquired and liabilities assumed.
If, on the acquisition date, there are any uncer-tainties with respect to identifying or measur-ing the acquired net assets, the initial recogni-tion will be made on the basis of estimated fair values. The estimated fair values may be adjusted or additional assets or liabilities may be recognized during the measurement period of up to 12 months to reflect new infor-mation that becomes available about condi-tions prevailing on the acquisition date. Such adjustments are made to the initial purchase price allocation as a restatement of prior infor-mation, including to the amount of goodwill.
Acquisition-related costs are expensed as incurred, except if related to the issue of equity securities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__105": { "value": "4.1 Inventories
EUR million | 2024 | 2023 |
Raw materials and consumables | 108.4 | 59.8 |
Work in progress | 255.2 | 176.0 |
Finished goods | 357.0 | 250.9 |
Inventories at December 31 | 720.6 | 486.7 |
Cost of materials, included in Cost of goods sold | 1,083.8 | 643.0 |
Indirect production costs capitalized in inventories at December 31 | 266.0 | 149.5 |
Write-downs expensed during the year | 17.6 | 24.4 |
Reversal of write-downs during the year* | 16.6 | 7.8 |
* Part of the reversal of write-downs is attributable to written-down inventory being reused in production.
Critical accounting estimates
Work in progress and finished goods are meas-ured at cost, including indirect production costs. Indirect production costs are assessed on an ongoing basis to ensure reliable
measurement of employee costs, capacity utili-zation, cost drivers and other relevant factors. Changes in these parameters may have an impact on the gross margin and the overall val-uation of work in progress and finished goods.
Accounting policies
Inventories are measured at the lower of cost determined on a first-in first-out basis and net realizable value.
The cost of work in progress and finished goods comprises direct production costs such as raw materials and consumables; energy and labor directly attributable to pro-duction; and indirect production costs such as employee costs, maintenance, and depre-ciation of plants, etc.
If the expected selling price, less any comple-tion costs and costs to execute the sale (net realizable value) of inventories, is lower than the carrying amount, inventories are written down to net realizable value.
Novonesis has entered into a few agreements where Novonesis supplies goods to a cus-tomer\u2019s premises but retains title to the inventory until the goods are consumed in the customer\u2019s production. As long as Novonesis retains title to the goods, they are recognized as inventory.
Inventories are measured at the lower of cost determined on a first-in first-out basis and net realizable value.
The cost of work in progress and finished goods comprises direct production costs such as raw materials and consumables; energy and labor directly attributable to pro-duction; and indirect production costs such as employee costs, maintenance, and depre-ciation of plants, etc.
If the expected selling price, less any comple-tion costs and costs to execute the sale (net realizable value) of inventories, is lower than the carrying amount, inventories are written down to net realizable value.
Novonesis has entered into a few agreements where Novonesis supplies goods to a cus-tomer\u2019s premises but retains title to the inventory until the goods are consumed in the customer\u2019s production. As long as Novonesis retains title to the goods, they are recognized as inventory.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__108": { "value": "4.2 Trade receivables
EUR million | 2024 | 2023 |
Trade receivables, gross | 686.7 | 516.5 |
Allowances | (21.1) | (19.8) |
Trade receivables at December 31 | 665.6 | 496.7 |
Aging of trade receivables, gross: | ||
Up to 30 days | 646.6 | 482.8 |
Between 30 and 90 days | 18.6 | 9.8 |
More than 90 days | 21.5 | 23.9 |
Trade receivables, gross, at December 31 | 686.7 | 516.5 |
Changes in allowances for trade receivables: | ||
At January 1 | 19.8 | 18.3 |
Additions from business acquisitions | 3.1 | - |
Allowances during the year | 3.5 | 5.7 |
Write-offs during the year | (1.4) | (3.0) |
Reversed allowances | (3.9) | (1.2) |
Allowances at December 31 | 21.1 | 19.8 |
Allowance for credit loss on trade receivables
The allowance for expected credit losses on trade receivables is based on historical credit loss expe-rience, combined with forward-looking informa-tion on macroeconomic factors affecting the credit risk. The expected loss rates are updated at each reporting date.
Accounting policies
Trade receivables are measured at amor-tized cost less allowance for lifetime expected credit losses.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteris-tics and days past due. Furthermore, an allowance for lifetime expected credit losses for trade receivables is recog-nized on initial recognition.
Trade receivables are written off when all possible options have been exhausted and there is no reasonable expectation of recovery.
The cost of allowances for expected credit losses and write-offs for trade receivables is recognized in Sales and distribution costs.
4.2 Trade receivables
EUR million | 2024 | 2023 |
Trade receivables, gross | 686.7 | 516.5 |
Allowances | (21.1) | (19.8) |
Trade receivables at December 31 | 665.6 | 496.7 |
Aging of trade receivables, gross: | ||
Up to 30 days | 646.6 | 482.8 |
Between 30 and 90 days | 18.6 | 9.8 |
More than 90 days | 21.5 | 23.9 |
Trade receivables, gross, at December 31 | 686.7 | 516.5 |
Changes in allowances for trade receivables: | ||
At January 1 | 19.8 | 18.3 |
Additions from business acquisitions | 3.1 | - |
Allowances during the year | 3.5 | 5.7 |
Write-offs during the year | (1.4) | (3.0) |
Reversed allowances | (3.9) | (1.2) |
Allowances at December 31 | 21.1 | 19.8 |
Allowance for credit loss on trade receivables
The allowance for expected credit losses on trade receivables is based on historical credit loss expe-rience, combined with forward-looking informa-tion on macroeconomic factors affecting the credit risk. The expected loss rates are updated at each reporting date.
Accounting policies
Trade receivables are measured at amor-tized cost less allowance for lifetime expected credit losses.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteris-tics and days past due. Furthermore, an allowance for lifetime expected credit losses for trade receivables is recog-nized on initial recognition.
Trade receivables are written off when all possible options have been exhausted and there is no reasonable expectation of recovery.
The cost of allowances for expected credit losses and write-offs for trade receivables is recognized in Sales and distribution costs.
Trade receivables are measured at amor-tized cost less allowance for lifetime expected credit losses.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteris-tics and days past due. Furthermore, an allowance for lifetime expected credit losses for trade receivables is recog-nized on initial recognition.
Trade receivables are written off when all possible options have been exhausted and there is no reasonable expectation of recovery.
The cost of allowances for expected credit losses and write-offs for trade receivables is recognized in Sales and distribution costs.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__111": { "value": "4.3 Assets held for sale
EUR million | 2024 | 2023 |
Carrying amount of non-current assets held for sale: | ||
Land and buildings | 11.6 | 23.3 |
Plant and machinery | - | 21.2 |
Total | 11.6 | 44.5 |
At December 31, 2024, assets held for sale include land and buildings in Bagsvaerd, Denmark, sold in connection with the relocation of the headquarters.
The assets were sold with effect from January 1, 2025, to Novo Nordisk A/S for EUR 16.8 million. A minor gain will be recognized in Special items in 2025.
In 2023, a definitive agreement to sell the lactase enzyme business was entered into with Kerry Group plc (\u201cKerry\u201d). The divestment was com-pleted and approved by the European Commission in 2024. Reference is made to Note 3.5 for further details.
Accounting policies
Non-current assets are classified as assets held for sale, when their carrying amounts are to be recovered principally through a sale transaction and a sale is considered highly probable.
Such assets are stated at the lower of the carrying amount and fair value less costs to sell.
4.3 Assets held for sale
EUR million | 2024 | 2023 |
Carrying amount of non-current assets held for sale: | ||
Land and buildings | 11.6 | 23.3 |
Plant and machinery | - | 21.2 |
Total | 11.6 | 44.5 |
At December 31, 2024, assets held for sale include land and buildings in Bagsvaerd, Denmark, sold in connection with the relocation of the headquarters.
The assets were sold with effect from January 1, 2025, to Novo Nordisk A/S for EUR 16.8 million. A minor gain will be recognized in Special items in 2025.
In 2023, a definitive agreement to sell the lactase enzyme business was entered into with Kerry Group plc (\u201cKerry\u201d). The divestment was com-pleted and approved by the European Commission in 2024. Reference is made to Note 3.5 for further details.
Accounting policies
Non-current assets are classified as assets held for sale, when their carrying amounts are to be recovered principally through a sale transaction and a sale is considered highly probable.
Such assets are stated at the lower of the carrying amount and fair value less costs to sell.
Non-current assets are classified as assets held for sale, when their carrying amounts are to be recovered principally through a sale transaction and a sale is considered highly probable.
Such assets are stated at the lower of the carrying amount and fair value less costs to sell.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__114": { "value": "5.1 Financial risk factors and risk management
Due to the international nature of Novonesis\u2019 oper-ations, the Group\u2019s earnings and financial position are exposed to a number of financial risk factors. Financial risks are managed centrally for the entire Group. The Novonesis Treasury Policy is approved by the Board of Directors and sets the limits for the various financial risks and the derivatives used to hedge risk. The Treasury Policy is adjusted on an ongoing basis and adapted to the market situa-tion. It contains rules for which derivatives can be used for hedging, which counterparties can be used, and the risk profile that is to be applied.
Currency risk
Currency risk arises due to imbalances between cash flows.
Novonesis hedges expected net exposure (cash flow exposure) if it is determined that a movement in a foreign exchange rate will have a material impact on expected earnings/cash flow.
Hedging of currency risk is carried out in the cur-rencies in which Novonesis has the largest expo-sures. Hedging is managed by entering into deriv-atives such as forward contracts, currency options and swaps. Loans and deposits in foreign currencies are also utilized for hedging purposes.
Hedge effectiveness is assessed on a regular basis by comparing changes in the timing and value of the expected exposure in the relevant currencies with the timing and value changes for the designated cash flow hedging transaction.
Where deemed appropriate, currency risk related to net investments in foreign subsidiaries is hedged by taking out loans and entering into swaps. Currently, there are no open transactions used to hedge equity investments.
Foreign exchange sensitivity \u2013 2024
The sensitivity analysis shows the impact on net profit and other comprehensive income of a 5% change in EUR versus the key currencies to which Novonesis was exposed to on December 31, 2024. The sensitivity analysis comprises effects from the Group\u2019s cash, trade receivables, trade payables, loans, current and non-current financial invest-ments, lease liabilities and derivatives. Anticipated currency transactions, investments in foreign sub-sidiaries and non-current assets are not included.
The sensitivity analysis assumes that exchange rates change on December 31, 2024, while all other variables remain constant. The table shows the effect of an increase in exchange rates. A decrease in exchange rates would have the opposite effect.
Foreign exchange sensitivity \u2013 2025 estimate
Adjusted EBITDA is exposed to exchange rate developments, as the effect of hedges is included in financial income/costs. Adjusted EBITDA is mainly exposed to USD. A movement of 5% in the EUR/USD exchange rate would result in a change in the expected adjusted EBITDA for 2025 of around EUR 45-50 million.
Of the expected USD cash flows for 2025, 77% has been hedged by forward contracts at an average rate of 1.10. As a result, the impact on net profit
from changes in the EUR/USD exchange rate has been reduced significantly compared with the impact on adjusted EBITDA.
Interest rate risk
Interest rate risk arises in relation to interest-bear-ing assets and liabilities. In accordance with the Novonesis Treasury Policy, a minimum of 50% of loans must be at fixed interest rates. Hedging of
the interest rate risk is managed by entering into fixed-rate loans and interest rate swaps. At
Foreign exchange sensitivity analysis
2024 | 2023 | ||||
EUR million | Increase in exchange rates | Change in net profit | |||
Change in other comprehensive income | Change in net profit | ||||
Change in other comprehensive income | |||||
INR | 5.0% | 0.2 | - | (0.1) | - |
CNY | 5.0% | 0.1 | - | (0.3) | - |
USD | 5.0% | 0.5 | (28.7) | 0.1 | (15.2) |
Other | 5.0% | 1.4 | - | (0.4) | - |
Total | 2.2 | (28.7) | (0.7) | (15.2) |
December 31, 2024, 64% (2023: 53%) of the loan portfolio carried fixed interest rates.
With the current hedging of interest rate risk, an increase of 1 percentage point in the average inter-est rate on Novonesis\u2019 net interest-bearing debt would have a negative effect on net profit of EUR 2.9 million (2023: negative effect of EUR 3.1 million).
Part of the Group\u2019s loan portfolio is subject to a customary financial covenant that is common for a company with the credit profile of Novonesis. The Group regularly monitors covenant compli-ance, which currently shows ample headroom.
Credit risk
Credit risk arises especially on cash and cash equivalents, derivatives, trade receivables and contract assets. The credit risk on trade receiva-bles is countered by thorough, regular analysis based on customer type, country and specific conditions. The credit risk on cash and cash equivalents and derivatives is mitigated by the Treasury Policy, which limits exposure solely to counterparties that have an investment-grade
credit rating. The credit risk is calculated on the basis of net market value and is governed by the Treasury Policy. Novonesis has entered into net-ting agreements with all the banks used for trading in financial instruments, which means that Novonesis\u2019 credit risk is limited to net assets. At December 31, 2024, the Group considered its maximum credit risk to be EUR 1,073.6 million (2023: EUR 691.6 million), which is the total of the Group\u2019s financial assets. At December 31, 2024, the maximum credit risk related to one counter-party was EUR 70.6 million (2023: EUR 59.0 million).
Liquidity risk
In connection with the Group\u2019s ongoing financing of operations, including refinancing, efforts are made to ensure adequate and flexible liquidity. This is guaranteed by using committed credit facilities and by placing free funds in deposits, government bonds or ultra-liquid mortgage bonds in accordance with the Treasury Policy.
At December 31, 2024, Novonesis\u2019 financial resources amounted to EUR 1,075 million (2023: EUR 855 million), consisting of cash, cash
equivalents, and undrawn committed credit facili-ties of EUR 795 million, which expire in 2025\u20132029.
With the exception of debt to credit institutions, the maturity dates are primarily within one year.
Novonesis has not arranged any supply-chain financing arrangements for the Group\u2019s suppliers.
Commodity price risk
Novonesis is exposed to price risk for electricity in the Group\u2019s main production sites. In Denmark, the exposure is hedged for up to 18 months using forward contracts or by entering into fixed price agreements with the suppliers. Of the expected electricity exposure in Denmark for 2025, 62% has been hedged.
Capital structure
Novonesis favors having a conservative balance sheet, which is reflected by a target for net inter-est-bearing debt in the range of 1.3x-1.7x EBITDA. At December 31, 2024, the ratio was 1.4, and thus the target is considered as met in 2024. The capital structure is mainly managed using two instruments:
1) Dividend payments, through which Novonesis aims for a payout ratio in the range of 40%-60% of the adjusted net profit. In September 2024, an interim dividend of DKK 2.00 (EUR 0.27) per share was paid out (October 2023: DKK 4.20 (EUR 0.56) per share), amounting to EUR 124.9 million (2023: EUR 160 million). The Board of Directors proposes that the Annual General Meeting approve an ordi-nary dividend of DKK 4.20 (EUR 0.56) per share, for a total payout of approximately EUR 387 million for the 2024 financial year. For 2023, the Board proposed a dividend of DKK 2.00 (EUR 0.27) per share at the Annual General Meeting in 2024, which was approved and paid out with EUR 124.9 million in 2024. For 2024, the payout ratio is expected to be 65.1%.
2) Share buybacks. No program was executed in 2024. A new share buyback program of up to EUR 100 million is planned for 2025.
Currency risk
Currency risk arises due to imbalances between cash flows.
Novonesis hedges expected net exposure (cash flow exposure) if it is determined that a movement in a foreign exchange rate will have a material impact on expected earnings/cash flow.
Hedging of currency risk is carried out in the cur-rencies in which Novonesis has the largest expo-sures. Hedging is managed by entering into deriv-atives such as forward contracts, currency options and swaps. Loans and deposits in foreign currencies are also utilized for hedging purposes.
Hedge effectiveness is assessed on a regular basis by comparing changes in the timing and value of the expected exposure in the relevant currencies with the timing and value changes for the designated cash flow hedging transaction.
Where deemed appropriate, currency risk related to net investments in foreign subsidiaries is hedged by taking out loans and entering into swaps. Currently, there are no open transactions used to hedge equity investments.
Foreign exchange sensitivity \u2013 2024
The sensitivity analysis shows the impact on net profit and other comprehensive income of a 5% change in EUR versus the key currencies to which Novonesis was exposed to on December 31, 2024. The sensitivity analysis comprises effects from the Group\u2019s cash, trade receivables, trade payables, loans, current and non-current financial invest-ments, lease liabilities and derivatives. Anticipated currency transactions, investments in foreign sub-sidiaries and non-current assets are not included.
The sensitivity analysis assumes that exchange rates change on December 31, 2024, while all other variables remain constant. The table shows the effect of an increase in exchange rates. A decrease in exchange rates would have the opposite effect.
Foreign exchange sensitivity \u2013 2025 estimate
Adjusted EBITDA is exposed to exchange rate developments, as the effect of hedges is included in financial income/costs. Adjusted EBITDA is mainly exposed to USD. A movement of 5% in the EUR/USD exchange rate would result in a change in the expected adjusted EBITDA for 2025 of around EUR 45-50 million.
Of the expected USD cash flows for 2025, 77% has been hedged by forward contracts at an average rate of 1.10. As a result, the impact on net profit
from changes in the EUR/USD exchange rate has been reduced significantly compared with the impact on adjusted EBITDA.
Interest rate risk
Interest rate risk arises in relation to interest-bear-ing assets and liabilities. In accordance with the Novonesis Treasury Policy, a minimum of 50% of loans must be at fixed interest rates. Hedging of
Foreign exchange sensitivity analysis
2024 | 2023 | ||||
EUR million | Increase in exchange rates | Change in net profit | |||
Change in other comprehensive income | Change in net profit | ||||
Change in other comprehensive income | |||||
INR | 5.0% | 0.2 | - | (0.1) | - |
CNY | 5.0% | 0.1 | - | (0.3) | - |
USD | 5.0% | 0.5 | (28.7) | 0.1 | (15.2) |
Other | 5.0% | 1.4 | - | (0.4) | - |
Total | 2.2 | (28.7) | (0.7) | (15.2) |
Currency risk
Currency risk arises due to imbalances between cash flows.
Novonesis hedges expected net exposure (cash flow exposure) if it is determined that a movement in a foreign exchange rate will have a material impact on expected earnings/cash flow.
Hedging of currency risk is carried out in the cur-rencies in which Novonesis has the largest expo-sures. Hedging is managed by entering into deriv-atives such as forward contracts, currency options and swaps. Loans and deposits in foreign currencies are also utilized for hedging purposes.
Hedge effectiveness is assessed on a regular basis by comparing changes in the timing and value of the expected exposure in the relevant currencies with the timing and value changes for the designated cash flow hedging transaction.
Where deemed appropriate, currency risk related to net investments in foreign subsidiaries is hedged by taking out loans and entering into swaps. Currently, there are no open transactions used to hedge equity investments.
Foreign exchange sensitivity \u2013 2024
The sensitivity analysis shows the impact on net profit and other comprehensive income of a 5% change in EUR versus the key currencies to which Novonesis was exposed to on December 31, 2024. The sensitivity analysis comprises effects from the Group\u2019s cash, trade receivables, trade payables, loans, current and non-current financial invest-ments, lease liabilities and derivatives. Anticipated currency transactions, investments in foreign sub-sidiaries and non-current assets are not included.
The sensitivity analysis assumes that exchange rates change on December 31, 2024, while all other variables remain constant. The table shows the effect of an increase in exchange rates. A decrease in exchange rates would have the opposite effect.
Foreign exchange sensitivity \u2013 2025 estimate
Adjusted EBITDA is exposed to exchange rate developments, as the effect of hedges is included in financial income/costs. Adjusted EBITDA is mainly exposed to USD. A movement of 5% in the EUR/USD exchange rate would result in a change in the expected adjusted EBITDA for 2025 of around EUR 45-50 million.
Of the expected USD cash flows for 2025, 77% has been hedged by forward contracts at an average rate of 1.10. As a result, the impact on net profit
from changes in the EUR/USD exchange rate has been reduced significantly compared with the impact on adjusted EBITDA.
Interest rate risk
Interest rate risk arises in relation to interest-bear-ing assets and liabilities. In accordance with the Novonesis Treasury Policy, a minimum of 50% of loans must be at fixed interest rates. Hedging of
the interest rate risk is managed by entering into fixed-rate loans and interest rate swaps. At
Foreign exchange sensitivity analysis
2024 | 2023 | ||||
EUR million | Increase in exchange rates | Change in net profit | |||
Change in other comprehensive income | Change in net profit | ||||
Change in other comprehensive income | |||||
INR | 5.0% | 0.2 | - | (0.1) | - |
CNY | 5.0% | 0.1 | - | (0.3) | - |
USD | 5.0% | 0.5 | (28.7) | 0.1 | (15.2) |
Other | 5.0% | 1.4 | - | (0.4) | - |
Total | 2.2 | (28.7) | (0.7) | (15.2) |
December 31, 2024, 64% (2023: 53%) of the loan portfolio carried fixed interest rates.
With the current hedging of interest rate risk, an increase of 1 percentage point in the average inter-est rate on Novonesis\u2019 net interest-bearing debt would have a negative effect on net profit of EUR 2.9 million (2023: negative effect of EUR 3.1 million).
Part of the Group\u2019s loan portfolio is subject to a customary financial covenant that is common for a company with the credit profile of Novonesis. The Group regularly monitors covenant compli-ance, which currently shows ample headroom.
Commodity price risk
Novonesis is exposed to price risk for electricity in the Group\u2019s main production sites. In Denmark, the exposure is hedged for up to 18 months using forward contracts or by entering into fixed price agreements with the suppliers. Of the expected electricity exposure in Denmark for 2025, 62% has been hedged.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__118": { "value": "Credit risk
Credit risk arises especially on cash and cash equivalents, derivatives, trade receivables and contract assets. The credit risk on trade receiva-bles is countered by thorough, regular analysis based on customer type, country and specific conditions. The credit risk on cash and cash equivalents and derivatives is mitigated by the Treasury Policy, which limits exposure solely to counterparties that have an investment-grade
credit rating. The credit risk is calculated on the basis of net market value and is governed by the Treasury Policy. Novonesis has entered into net-ting agreements with all the banks used for trading in financial instruments, which means that Novonesis\u2019 credit risk is limited to net assets. At December 31, 2024, the Group considered its maximum credit risk to be EUR 1,073.6 million (2023: EUR 691.6 million), which is the total of the Group\u2019s financial assets. At December 31, 2024, the maximum credit risk related to one counter-party was EUR 70.6 million (2023: EUR 59.0 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__119": { "value": "Liquidity risk
In connection with the Group\u2019s ongoing financing of operations, including refinancing, efforts are made to ensure adequate and flexible liquidity. This is guaranteed by using committed credit facilities and by placing free funds in deposits, government bonds or ultra-liquid mortgage bonds in accordance with the Treasury Policy.
At December 31, 2024, Novonesis\u2019 financial resources amounted to EUR 1,075 million (2023: EUR 855 million), consisting of cash, cash
equivalents, and undrawn committed credit facili-ties of EUR 795 million, which expire in 2025\u20132029.
With the exception of debt to credit institutions, the maturity dates are primarily within one year.
Novonesis has not arranged any supply-chain financing arrangements for the Group\u2019s suppliers.
", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__121": { "value": "Capital structure
Novonesis favors having a conservative balance sheet, which is reflected by a target for net inter-est-bearing debt in the range of 1.3x-1.7x EBITDA. At December 31, 2024, the ratio was 1.4, and thus the target is considered as met in 2024. The capital structure is mainly managed using two instruments:
1) Dividend payments, through which Novonesis aims for a payout ratio in the range of 40%-60% of the adjusted net profit. In September 2024, an interim dividend of DKK 2.00 (EUR 0.27) per share was paid out (October 2023: DKK 4.20 (EUR 0.56) per share), amounting to EUR 124.9 million (2023: EUR 160 million). The Board of Directors proposes that the Annual General Meeting approve an ordi-nary dividend of DKK 4.20 (EUR 0.56) per share, for a total payout of approximately EUR 387 million for the 2024 financial year. For 2023, the Board proposed a dividend of DKK 2.00 (EUR 0.27) per share at the Annual General Meeting in 2024, which was approved and paid out with EUR 124.9 million in 2024. For 2024, the payout ratio is expected to be 65.1%.
2) Share buybacks. No program was executed in 2024. A new share buyback program of up to EUR 100 million is planned for 2025.
5.2 Financial income and Financial costs
EUR million | 2024 | 2023 |
Interest income | 26.9 | 12.0 |
Fair value adjustments of contingent consideration | - | 22.1 |
Gains on cash flow hedges | - | 3.4 |
Gains on minority ownership investments | - | 0.3 |
Financial income | 26.9 | 37.8 |
Interest costs | (69.3) | (18.9) |
Interest on lease liabilities | (6.8) | (2.1) |
Interest on contingent consideration | (0.3) | (2.1) |
Losses on cash flow hedges | (7.5) | - |
Losses on fair value hedges | (0.6) | (8.1) |
Losses on joint venture and minority ownership investments | (5.1) | (2.0) |
Other financial costs | (11.5) | (8.9) |
Other foreign exchange losses, net | (5.7) | (2.1) |
Fair value adjustments of cash-settled share options | (0.5) | (0.1) |
Financial costs | (107.3) | (44.3) |
Financial income/(costs), net | (80.4) | (6.5) |
Accounting policies
Financial income and Financial costs comprise interest income and interest costs; realized and unrealized foreign exchange gains and losses; gains and losses on other financial assets; and fair value adjustments of cash-settled share-based incentive programs and contin-gent consideration, which are offset against Other liabilities and fair value adjustments of Other financial assets.
Interest income and Interest costs are measured at amortized cost for financial assets and liabilities.
Financial income and Financial costs also include fair value adjustments of deriva-tives used to hedge assets and liabilities, and income and costs relating to cash flow hedges that are transferred from Other comprehensive income on realiza-tion of the hedged item.
5.2 Financial income and Financial costs
EUR million | 2024 | 2023 |
Interest income | 26.9 | 12.0 |
Fair value adjustments of contingent consideration | - | 22.1 |
Gains on cash flow hedges | - | 3.4 |
Gains on minority ownership investments | - | 0.3 |
Financial income | 26.9 | 37.8 |
Interest costs | (69.3) | (18.9) |
Interest on lease liabilities | (6.8) | (2.1) |
Interest on contingent consideration | (0.3) | (2.1) |
Losses on cash flow hedges | (7.5) | - |
Losses on fair value hedges | (0.6) | (8.1) |
Losses on joint venture and minority ownership investments | (5.1) | (2.0) |
Other financial costs | (11.5) | (8.9) |
Other foreign exchange losses, net | (5.7) | (2.1) |
Fair value adjustments of cash-settled share options | (0.5) | (0.1) |
Financial costs | (107.3) | (44.3) |
Financial income/(costs), net | (80.4) | (6.5) |
Accounting policies
Financial income and Financial costs comprise interest income and interest costs; realized and unrealized foreign exchange gains and losses; gains and losses on other financial assets; and fair value adjustments of cash-settled share-based incentive programs and contin-gent consideration, which are offset against Other liabilities and fair value adjustments of Other financial assets.
Interest income and Interest costs are measured at amortized cost for financial assets and liabilities.
Financial income and Financial costs also include fair value adjustments of deriva-tives used to hedge assets and liabilities, and income and costs relating to cash flow hedges that are transferred from Other comprehensive income on realiza-tion of the hedged item.
5.2 Financial income and Financial costs
EUR million | 2024 | 2023 |
Interest income | 26.9 | 12.0 |
Fair value adjustments of contingent consideration | - | 22.1 |
Gains on cash flow hedges | - | 3.4 |
Gains on minority ownership investments | - | 0.3 |
Financial income | 26.9 | 37.8 |
Interest costs | (69.3) | (18.9) |
Interest on lease liabilities | (6.8) | (2.1) |
Interest on contingent consideration | (0.3) | (2.1) |
Losses on cash flow hedges | (7.5) | - |
Losses on fair value hedges | (0.6) | (8.1) |
Losses on joint venture and minority ownership investments | (5.1) | (2.0) |
Other financial costs | (11.5) | (8.9) |
Other foreign exchange losses, net | (5.7) | (2.1) |
Fair value adjustments of cash-settled share options | (0.5) | (0.1) |
Financial costs | (107.3) | (44.3) |
Financial income/(costs), net | (80.4) | (6.5) |
Accounting policies
Financial income and Financial costs comprise interest income and interest costs; realized and unrealized foreign exchange gains and losses; gains and losses on other financial assets; and fair value adjustments of cash-settled share-based incentive programs and contin-gent consideration, which are offset against Other liabilities and fair value adjustments of Other financial assets.
Interest income and Interest costs are measured at amortized cost for financial assets and liabilities.
Financial income and Financial costs also include fair value adjustments of deriva-tives used to hedge assets and liabilities, and income and costs relating to cash flow hedges that are transferred from Other comprehensive income on realiza-tion of the hedged item.
5.2 Financial income and Financial costs
EUR million | 2024 | 2023 |
Interest income | 26.9 | 12.0 |
Fair value adjustments of contingent consideration | - | 22.1 |
Gains on cash flow hedges | - | 3.4 |
Gains on minority ownership investments | - | 0.3 |
Financial income | 26.9 | 37.8 |
Interest costs | (69.3) | (18.9) |
Interest on lease liabilities | (6.8) | (2.1) |
Interest on contingent consideration | (0.3) | (2.1) |
Losses on cash flow hedges | (7.5) | - |
Losses on fair value hedges | (0.6) | (8.1) |
Losses on joint venture and minority ownership investments | (5.1) | (2.0) |
Other financial costs | (11.5) | (8.9) |
Other foreign exchange losses, net | (5.7) | (2.1) |
Fair value adjustments of cash-settled share options | (0.5) | (0.1) |
Financial costs | (107.3) | (44.3) |
Financial income/(costs), net | (80.4) | (6.5) |
Accounting policies
Financial income and Financial costs comprise interest income and interest costs; realized and unrealized foreign exchange gains and losses; gains and losses on other financial assets; and fair value adjustments of cash-settled share-based incentive programs and contin-gent consideration, which are offset against Other liabilities and fair value adjustments of Other financial assets.
Interest income and Interest costs are measured at amortized cost for financial assets and liabilities.
Financial income and Financial costs also include fair value adjustments of deriva-tives used to hedge assets and liabilities, and income and costs relating to cash flow hedges that are transferred from Other comprehensive income on realiza-tion of the hedged item.
5.2 Financial income and Financial costs
EUR million | 2024 | 2023 |
Interest income | 26.9 | 12.0 |
Fair value adjustments of contingent consideration | - | 22.1 |
Gains on cash flow hedges | - | 3.4 |
Gains on minority ownership investments | - | 0.3 |
Financial income | 26.9 | 37.8 |
Interest costs | (69.3) | (18.9) |
Interest on lease liabilities | (6.8) | (2.1) |
Interest on contingent consideration | (0.3) | (2.1) |
Losses on cash flow hedges | (7.5) | - |
Losses on fair value hedges | (0.6) | (8.1) |
Losses on joint venture and minority ownership investments | (5.1) | (2.0) |
Other financial costs | (11.5) | (8.9) |
Other foreign exchange losses, net | (5.7) | (2.1) |
Fair value adjustments of cash-settled share options | (0.5) | (0.1) |
Financial costs | (107.3) | (44.3) |
Financial income/(costs), net | (80.4) | (6.5) |
Accounting policies
Financial income and Financial costs comprise interest income and interest costs; realized and unrealized foreign exchange gains and losses; gains and losses on other financial assets; and fair value adjustments of cash-settled share-based incentive programs and contin-gent consideration, which are offset against Other liabilities and fair value adjustments of Other financial assets.
Interest income and Interest costs are measured at amortized cost for financial assets and liabilities.
Financial income and Financial costs also include fair value adjustments of deriva-tives used to hedge assets and liabilities, and income and costs relating to cash flow hedges that are transferred from Other comprehensive income on realiza-tion of the hedged item.
5.2 Financial income and Financial costs
EUR million | 2024 | 2023 |
Interest income | 26.9 | 12.0 |
Fair value adjustments of contingent consideration | - | 22.1 |
Gains on cash flow hedges | - | 3.4 |
Gains on minority ownership investments | - | 0.3 |
Financial income | 26.9 | 37.8 |
Interest costs | (69.3) | (18.9) |
Interest on lease liabilities | (6.8) | (2.1) |
Interest on contingent consideration | (0.3) | (2.1) |
Losses on cash flow hedges | (7.5) | - |
Losses on fair value hedges | (0.6) | (8.1) |
Losses on joint venture and minority ownership investments | (5.1) | (2.0) |
Other financial costs | (11.5) | (8.9) |
Other foreign exchange losses, net | (5.7) | (2.1) |
Fair value adjustments of cash-settled share options | (0.5) | (0.1) |
Financial costs | (107.3) | (44.3) |
Financial income/(costs), net | (80.4) | (6.5) |
Accounting policies
Financial income and Financial costs comprise interest income and interest costs; realized and unrealized foreign exchange gains and losses; gains and losses on other financial assets; and fair value adjustments of cash-settled share-based incentive programs and contin-gent consideration, which are offset against Other liabilities and fair value adjustments of Other financial assets.
Interest income and Interest costs are measured at amortized cost for financial assets and liabilities.
Financial income and Financial costs also include fair value adjustments of deriva-tives used to hedge assets and liabilities, and income and costs relating to cash flow hedges that are transferred from Other comprehensive income on realiza-tion of the hedged item.
Financial income and Financial costs comprise interest income and interest costs; realized and unrealized foreign exchange gains and losses; gains and losses on other financial assets; and fair value adjustments of cash-settled share-based incentive programs and contin-gent consideration, which are offset against Other liabilities and fair value adjustments of Other financial assets.
Interest income and Interest costs are measured at amortized cost for financial assets and liabilities.
Financial income and Financial costs also include fair value adjustments of deriva-tives used to hedge assets and liabilities, and income and costs relating to cash flow hedges that are transferred from Other comprehensive income on realiza-tion of the hedged item.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__126": { "value": "Financial income and Financial costs comprise interest income and interest costs; realized and unrealized foreign exchange gains and losses; gains and losses on other financial assets; and fair value adjustments of cash-settled share-based incentive programs and contin-gent consideration, which are offset against Other liabilities and fair value adjustments of Other financial assets.
Interest income and Interest costs are measured at amortized cost for financial assets and liabilities.
Financial income and Financial costs also include fair value adjustments of deriva-tives used to hedge assets and liabilities, and income and costs relating to cash flow hedges that are transferred from Other comprehensive income on realiza-tion of the hedged item.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceCostsExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__130": { "value": "Financial income and Financial costs comprise interest income and interest costs; realized and unrealized foreign exchange gains and losses; gains and losses on other financial assets; and fair value adjustments of cash-settled share-based incentive programs and contin-gent consideration, which are offset against Other liabilities and fair value adjustments of Other financial assets.
Interest income and Interest costs are measured at amortized cost for financial assets and liabilities.
Financial income and Financial costs also include fair value adjustments of deriva-tives used to hedge assets and liabilities, and income and costs relating to cash flow hedges that are transferred from Other comprehensive income on realiza-tion of the hedged item.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__131": { "value": "5.3 Borrowings
EUR million | 2024 | 2023 |
Credit institutions | 1,576.1 | 988.2 |
Lease liabilities | 193.9 | 49.4 |
Derivatives | 26.8 | 6.4 |
Borrowings at December 31 | 1,796.8 | 1,044.0 |
Recognized in the balance sheet as follows: | ||
Non-current\t | 1,530.4 | 612.0 |
Current\t | 266.4 | 432.0 |
Borrowings at December 31 | 1,796.8 | 1,044.0 |
EUR million | 2024 | 2023 |
Contractual maturities incl. interest for credit institutions* | ||
Less than 1 year | 245.2 | 430.5 |
Between 1 and 5 years | 1,169.3 | 372.2 |
More than 5 years | 276.8 | 263.5 |
Undiscounted credit institutions at December 31 | 1,691.3 | 1,066.2 |
Reference is made to Note 3.3 for similar information regarding lease liabilities.
* Includes effect from interest rate swaps.
Credit institutions - currency 2024 (2023)
EUR million
EUR 999.0(312.5)
DKK577.1(675.7)
1,576.1
(988.2)
Credit institutions (incl. hedging) \u2013 fixed or floating interest rate 2024 (2023)
EUR million
Fixed interest rate1,007.0(521.3)
Floating interest rate569.1(466.9)
1,576.1
(988.2)
2024 | 2023 | |||||
EUR million | Credit institutions | Lease liabilities | Total | Credit institutions | Lease liabilities | Total |
Liabilities from financing activities at January 1 | ||||||
988.2 | 49.4 | 1,037.6 | 865.6 | 55.3 | 920.9 | |
Additions from business acquisitions | ||||||
963.5 | 160.0 | 1,123.5 | - | - | - | |
Financing cash flows | (377.5) | (27.8) | (405.3) | 123.8 | (16.5) | 107.3 |
Currency translation adjustments | 1.9 | (0.3) | 1.6 | (1.2) | (1.5) | (2.7) |
Other changes* | - | 12.6 | 12.6 | - | 12.1 | 12.1 |
Total liabilities from financing activities at December 31 | ||||||
1,576.1 | 193.9 | 1,770.0 | 988.2 | 49.4 | 1,037.6 |
* Other changes include changes in lease liabilities from new or terminated leases and accrued interest expenses, which will be presented as operating cash flows in the statement of cash flows when paid.
5.3 Borrowings
EUR million | 2024 | 2023 |
Credit institutions | 1,576.1 | 988.2 |
Lease liabilities | 193.9 | 49.4 |
Derivatives | 26.8 | 6.4 |
Borrowings at December 31 | 1,796.8 | 1,044.0 |
Recognized in the balance sheet as follows: | ||
Non-current\t | 1,530.4 | 612.0 |
Current\t | 266.4 | 432.0 |
Borrowings at December 31 | 1,796.8 | 1,044.0 |
EUR million | 2024 | 2023 |
Contractual maturities incl. interest for credit institutions* | ||
Less than 1 year | 245.2 | 430.5 |
Between 1 and 5 years | 1,169.3 | 372.2 |
More than 5 years | 276.8 | 263.5 |
Undiscounted credit institutions at December 31 | 1,691.3 | 1,066.2 |
Reference is made to Note 3.3 for similar information regarding lease liabilities.
* Includes effect from interest rate swaps.
Credit institutions - currency 2024 (2023)
EUR million
EUR 999.0(312.5)
DKK577.1(675.7)
1,576.1
(988.2)
Credit institutions (incl. hedging) \u2013 fixed or floating interest rate 2024 (2023)
EUR million
Fixed interest rate1,007.0(521.3)
Floating interest rate569.1(466.9)
1,576.1
(988.2)
2024 | 2023 | |||||
EUR million | Credit institutions | Lease liabilities | Total | Credit institutions | Lease liabilities | Total |
Liabilities from financing activities at January 1 | ||||||
988.2 | 49.4 | 1,037.6 | 865.6 | 55.3 | 920.9 | |
Additions from business acquisitions | ||||||
963.5 | 160.0 | 1,123.5 | - | - | - | |
Financing cash flows | (377.5) | (27.8) | (405.3) | 123.8 | (16.5) | 107.3 |
Currency translation adjustments | 1.9 | (0.3) | 1.6 | (1.2) | (1.5) | (2.7) |
Other changes* | - | 12.6 | 12.6 | - | 12.1 | 12.1 |
Total liabilities from financing activities at December 31 | ||||||
1,576.1 | 193.9 | 1,770.0 | 988.2 | 49.4 | 1,037.6 |
* Other changes include changes in lease liabilities from new or terminated leases and accrued interest expenses, which will be presented as operating cash flows in the statement of cash flows when paid.
5.4 Derivatives \u2013 hedge accounting
2024 | 2023 | |||
EUR million | Contract amount based on agreed rates* | Fair value | Contract amount based on agreed rates* | Fair value |
Forward exchange contracts | ||||
CNH | (68.8) | 1.1 | (88.0) | (1.4) |
GBP | (13.2) | - | - | - |
USD | 28.5 | (0.3) | 95.3 | 0.7 |
INR | 29.3 | (0.5) | 37.3 | 0.7 |
Other (purchase) | (7.8) | - | (6.3) | 0.1 |
Other (sale) | 22.2 | 0.6 | 19.5 | - |
Fair value hedges at December 31 | (9.8) | 0.9 | 57.8 | 0.1 |
* Positive contract amounts represent a sale of the respective currency, and negative amounts represent a purchase.
Fair value hedges
The table above shows the derivatives the Group has contracted in order to hedge currency expo-sure on financial assets and liabilities that give rise to currency adjustments in the income statement.
The forward exchange contracts mature in the period January 2025 to November 2025 (2023: January 2024 to July 2024).
The fair value hedges were 100% effective, as the loss on forward exchange contracts was EUR 0.6 million (2023: loss of EUR 8.1 million), compared with a gain on hedged items of EUR 0.6 million (2023: gain of EUR 8.1 million).
2024 | 2023 | |||
EUR million | Contract amount based on agreed rates | Fair value | Contract amount based on agreed rates | Fair value |
Forward exchange contracts* | ||||
USD | 545.9 | (22.9) | 304.3 | 2.7 |
545.9 | (22.9) | 304.3 | 2.7 | |
Interest rate swaps | ||||
DKK/DKK \u2013 floating to fixed rate | 194.9 | 1.3 | 77.0 | 5.1 |
EUR/EUR \u2013 floating to fixed rate | 496.1 | 10.0 | - | - |
691.0 | 11.3 | 77.0 | 5.1 | |
Forwards | ||||
Electricity price agreements | 3.6 | (0.3) | 9.7 | (4.0) |
3.6 | (0.3) | 9.7 | (4.0) | |
Cash flow hedges at December 31 | 1,240.5 | (11.9) | 391.0 | 3.8 |
* Positive contract amounts represent a sale of the respective currency, and negative amounts represent a purchase.
Cash flow hedges
The table above shows the derivatives the Group has contracted to hedge currency, interest rate and electricity price exposure in future cash flows.
The forward exchange contracts mature in the period January 2025 to December 2025 (2023: January 2024 to December 2024); the swaps mature in the period June 2025 to September
2034 (2023: May 2026 and December 2026); and the electricity price agreements mature in the period March 2025 to December 2025 (2023: January 2024 to December 2024).
At the end of 2024, the Group had hedged 77% of expected future cash flows in USD for 2025, at an average rate of EUR 1.10 (2023: 88% of expected future cash flows in USD for 2024, at an average rate of EUR 1.10).
The electricity price agreements have an average payment of EUR 77.8/MWh for 2025 (2023: aver-age payment of EUR 137.0/MWh for 2024).
Accounting policies
Hedge accounting consists of positive and negative fair values of derivatives, which are recognized in the balance sheet under Other financial assets and Borrowings, respectively. Derivatives are recognized at the transaction date.
Derivatives used for fair value hedges are measured at fair value at the reporting date, and value adjustments are recognized as Financial income or Financial costs. Derivatives used for cash flow hedges and
hedges of net investments in subsidiaries are measured at fair value at the reporting date, and value adjustments are recognized in Other comprehensive income.
Income and costs relating to cash flow hedges and hedges of net investments in subsidiaries are transferred from Other com-prehensive income when the hedged trans-action occurs. On realization, foreign exchange contracts and interest rate swaps are recognized as Financial income or Financial costs, and electricity price agree-ments covering production-related electricity are recognized as part of Cost of goods sold.
5.6 Financial assets and liabilities by category
EUR million | Note | 2024 | 2023 |
Other financial assets | 3.4 | - | |
Trade receivables | 4.2 | 665.6 | 496.7 |
Contract assets | 23.6 | 9.4 | |
Other receivables, excl. prepaid expenses | 81.7 | 22.1 | |
Cash and cash equivalents | 280.0 | 149.7 | |
Financial assets at amortized cost | 1,054.3 | 677.9 | |
Derivatives | 2.8 | 1.8 | |
Other financial assets | 3.5 | 3.4 | |
Fair value through profit and loss | 6.3 | 5.2 | |
Derivatives | 13.0 | 8.5 | |
Fair value through other comprehensive income | 13.0 | 8.5 | |
Financial assets | 1,073.6 | 691.6 |
EUR million | Note | 2024 | 2023 |
Lease liabilities | 5.3 | 193.9 | 49.4 |
Credit institutions | 5.3 | 1,576.1 | 988.2 |
Trade payables | 423.1 | 216.9 | |
Other payables | 126.6 | 85.3 | |
Financial liabilities at amortized cost | 2,319.7 | 1,339.8 | |
Derivatives | 5.3 | 1.9 | 1.7 |
Contingent consideration | - | 9.7 | |
Fair value through profit and loss | 1.9 | 11.4 | |
Derivatives | 5.3 | 24.9 | 4.7 |
Fair value through other comprehensive income | 24.9 | 4.7 | |
Share purchase liability | 6.5 | - | 78.4 |
Fair value through equity | - | 78.4 | |
Financial liabilities | 2,346.5 | 1,434.3 |
Fair value hierarchy
Novonesis has no financial instruments measured at fair value on the basis of quoted prices (level 1 input).
For financial assets and financial liabilities meas-ured at amortized cost (level 2 input), the carrying
amounts approximate fair value. Derivatives are measured at fair value based on observable data (level 2 input). The derivatives are not traded in an active market based on quoted prices, but on individual contracts. The fair value of these assets is determined using valuation techniques that utilize market-based data such as exchange
rates, interest rates, credit risk, electricity prices and volatilities.
Other financial assets, contingent consideration and share purchase liability are measured at fair value based on non-observable data (level 3 input). Reference is made to 6.5 for a description of the
fair value measurement of the share purchase lia-bility. The contingent consideration was contin-gent on the achievement of PrecisionBiotics Group sales targets for 2023, and was recognized at the anticipated fair value of EUR 9.7 million in 2023. In 2024, EUR 10 million was paid out.
5.3 Borrowings
EUR million | 2024 | 2023 |
Credit institutions | 1,576.1 | 988.2 |
Lease liabilities | 193.9 | 49.4 |
Derivatives | 26.8 | 6.4 |
Borrowings at December 31 | 1,796.8 | 1,044.0 |
Recognized in the balance sheet as follows: | ||
Non-current\t | 1,530.4 | 612.0 |
Current\t | 266.4 | 432.0 |
Borrowings at December 31 | 1,796.8 | 1,044.0 |
EUR million | 2024 | 2023 |
Contractual maturities incl. interest for credit institutions* | ||
Less than 1 year | 245.2 | 430.5 |
Between 1 and 5 years | 1,169.3 | 372.2 |
More than 5 years | 276.8 | 263.5 |
Undiscounted credit institutions at December 31 | 1,691.3 | 1,066.2 |
Reference is made to Note 3.3 for similar information regarding lease liabilities.
* Includes effect from interest rate swaps.
Credit institutions - currency 2024 (2023)
EUR million
EUR 999.0(312.5)
DKK577.1(675.7)
1,576.1
(988.2)
Credit institutions (incl. hedging) \u2013 fixed or floating interest rate 2024 (2023)
EUR million
Fixed interest rate1,007.0(521.3)
Floating interest rate569.1(466.9)
1,576.1
(988.2)
2024 | 2023 | |||||
EUR million | Credit institutions | Lease liabilities | Total | Credit institutions | Lease liabilities | Total |
Liabilities from financing activities at January 1 | ||||||
988.2 | 49.4 | 1,037.6 | 865.6 | 55.3 | 920.9 | |
Additions from business acquisitions | ||||||
963.5 | 160.0 | 1,123.5 | - | - | - | |
Financing cash flows | (377.5) | (27.8) | (405.3) | 123.8 | (16.5) | 107.3 |
Currency translation adjustments | 1.9 | (0.3) | 1.6 | (1.2) | (1.5) | (2.7) |
Other changes* | - | 12.6 | 12.6 | - | 12.1 | 12.1 |
Total liabilities from financing activities at December 31 | ||||||
1,576.1 | 193.9 | 1,770.0 | 988.2 | 49.4 | 1,037.6 |
* Other changes include changes in lease liabilities from new or terminated leases and accrued interest expenses, which will be presented as operating cash flows in the statement of cash flows when paid.
6.7 Cash flow
EUR million | Note | 2024 | 2023 |
Accrued interest income and interest costs | 49.5 | 11.1 | |
(Gain)/loss on financial assets, etc., net | 5.7 | (20.4) | |
Depreciation, amortization and impairment losses | 3.1, 3.2 | 597.4 | 186.4 |
Realized loss and allowances for doubtful trade receivables | (0.5) | 4.8 | |
(Gain)/loss on sale and disposal of assets | 0.4 | 0.3 | |
Unrealized foreign exchange (gain)/loss | 7.9 | (18.8) | |
Tax | 2.5 | 111.3 | 116.8 |
Share-based payment | 6.2 | 28.8 | 20.3 |
Change in provisions | 10.6 | (2.0) | |
Gain from divestment of selected wastewater treatment solutions | - | (11.8) | |
Profit/loss in associates | 3.5 | 2.4 | |
Gain on divestment of the lactase enzyme business | (20.4) | - | |
Non-cash items | 794.2 | 289.1 | |
(Increase)/decrease in receivables | (41.6) | (23.7) | |
(Increase)/decrease in inventories | 153.8 | 18.5 | |
Increase/(decrease) in payables, deferred income and contract liabilities | 158.8 | (17.1) | |
Currency translation adjustments | - | (0.8) | |
Change in working capital | 271.0 | (23.1) |
Change in net working capital includes the PPA inventory step-up of EUR 183.9 million.
EUR million | Note | 2024 | 2023 |
Loan to joint ventures | (12.9) | - | |
Cash from the combination with Chr. Hansen | 3.4 | 38.1 | - |
Contingent consideration paid | (10.0) | (21.2) | |
Purchase of other financial assets | (0.4) | (1.5) | |
Business acquisitions, etc. | 14.8 | (22.7) | |
Divestment of the lactase enzyme business, net of cash | 3.5 | 144.5 | - |
Divestment of selected wastewater treatment solutions | - | 11.8 | |
Divestments | 144.5 | 11.8 | |
Additions of intangible assets | 3.1 | 21.5 | 26.7 |
Purchase of intangible assets | 21.5 | 26.7 | |
Additions of property, plant and equipment | 3.2 | 358.9 | 266.3 |
Less additions to lease assets | (20.6) | (17.2) | |
Purchase of property, plant and equipment | 338.3 | 249.1 |
Undrawn committed credit facilities amounted to EUR 795.0 million at December 31, 2024 (2023: EUR 705.3 million), all of which expire in 2025\u20132029.
Cash flow from business acquisitions is positively impacted by EUR 38.1 million from cash obtained from the merger with Chr. Hansen.
Accounting policies
The consolidated statement of cash flows, which is compiled using the indirect method, shows cash flows from operating, investing and financing activities, and the Group\u2019s cash and cash equivalents at the beginning and end of the year.
Cash flows from operating activities comprise net profit adjusted for non-cash items, paid financial items, corporate income tax paid and change in working capital.
Cash flows from investing activities comprise payments relating to the acquisition and sale
of companies and non-controlling interests, intangible assets, and property, plant and equipment.
Cashs flow from financing activities comprise proceeds from borrowings, repayment of principal on interest-bearing debt, repayment of lease liabilities, payment of dividends, pro-ceeds from share issues, and the sale of treasury shares and other securities.
Cash and cash equivalents comprise cash at bank and in hand, less current bank loans due on demand.
5.4 Derivatives \u2013 hedge accounting
2024 | 2023 | |||
EUR million | Contract amount based on agreed rates* | Fair value | Contract amount based on agreed rates* | Fair value |
Forward exchange contracts | ||||
CNH | (68.8) | 1.1 | (88.0) | (1.4) |
GBP | (13.2) | - | - | - |
USD | 28.5 | (0.3) | 95.3 | 0.7 |
INR | 29.3 | (0.5) | 37.3 | 0.7 |
Other (purchase) | (7.8) | - | (6.3) | 0.1 |
Other (sale) | 22.2 | 0.6 | 19.5 | - |
Fair value hedges at December 31 | (9.8) | 0.9 | 57.8 | 0.1 |
* Positive contract amounts represent a sale of the respective currency, and negative amounts represent a purchase.
Fair value hedges
The table above shows the derivatives the Group has contracted in order to hedge currency expo-sure on financial assets and liabilities that give rise to currency adjustments in the income statement.
The forward exchange contracts mature in the period January 2025 to November 2025 (2023: January 2024 to July 2024).
The fair value hedges were 100% effective, as the loss on forward exchange contracts was EUR 0.6 million (2023: loss of EUR 8.1 million), compared with a gain on hedged items of EUR 0.6 million (2023: gain of EUR 8.1 million).
2024 | 2023 | |||
EUR million | Contract amount based on agreed rates | Fair value | Contract amount based on agreed rates | Fair value |
Forward exchange contracts* | ||||
USD | 545.9 | (22.9) | 304.3 | 2.7 |
545.9 | (22.9) | 304.3 | 2.7 | |
Interest rate swaps | ||||
DKK/DKK \u2013 floating to fixed rate | 194.9 | 1.3 | 77.0 | 5.1 |
EUR/EUR \u2013 floating to fixed rate | 496.1 | 10.0 | - | - |
691.0 | 11.3 | 77.0 | 5.1 | |
Forwards | ||||
Electricity price agreements | 3.6 | (0.3) | 9.7 | (4.0) |
3.6 | (0.3) | 9.7 | (4.0) | |
Cash flow hedges at December 31 | 1,240.5 | (11.9) | 391.0 | 3.8 |
* Positive contract amounts represent a sale of the respective currency, and negative amounts represent a purchase.
Cash flow hedges
The table above shows the derivatives the Group has contracted to hedge currency, interest rate and electricity price exposure in future cash flows.
The forward exchange contracts mature in the period January 2025 to December 2025 (2023: January 2024 to December 2024); the swaps mature in the period June 2025 to September
2034 (2023: May 2026 and December 2026); and the electricity price agreements mature in the period March 2025 to December 2025 (2023: January 2024 to December 2024).
At the end of 2024, the Group had hedged 77% of expected future cash flows in USD for 2025, at an average rate of EUR 1.10 (2023: 88% of expected future cash flows in USD for 2024, at an average rate of EUR 1.10).
The electricity price agreements have an average payment of EUR 77.8/MWh for 2025 (2023: aver-age payment of EUR 137.0/MWh for 2024).
Accounting policies
Hedge accounting consists of positive and negative fair values of derivatives, which are recognized in the balance sheet under Other financial assets and Borrowings, respectively. Derivatives are recognized at the transaction date.
Derivatives used for fair value hedges are measured at fair value at the reporting date, and value adjustments are recognized as Financial income or Financial costs. Derivatives used for cash flow hedges and
hedges of net investments in subsidiaries are measured at fair value at the reporting date, and value adjustments are recognized in Other comprehensive income.
Income and costs relating to cash flow hedges and hedges of net investments in subsidiaries are transferred from Other com-prehensive income when the hedged trans-action occurs. On realization, foreign exchange contracts and interest rate swaps are recognized as Financial income or Financial costs, and electricity price agree-ments covering production-related electricity are recognized as part of Cost of goods sold.
5.6 Financial assets and liabilities by category
EUR million | Note | 2024 | 2023 |
Other financial assets | 3.4 | - | |
Trade receivables | 4.2 | 665.6 | 496.7 |
Contract assets | 23.6 | 9.4 | |
Other receivables, excl. prepaid expenses | 81.7 | 22.1 | |
Cash and cash equivalents | 280.0 | 149.7 | |
Financial assets at amortized cost | 1,054.3 | 677.9 | |
Derivatives | 2.8 | 1.8 | |
Other financial assets | 3.5 | 3.4 | |
Fair value through profit and loss | 6.3 | 5.2 | |
Derivatives | 13.0 | 8.5 | |
Fair value through other comprehensive income | 13.0 | 8.5 | |
Financial assets | 1,073.6 | 691.6 |
EUR million | Note | 2024 | 2023 |
Lease liabilities | 5.3 | 193.9 | 49.4 |
Credit institutions | 5.3 | 1,576.1 | 988.2 |
Trade payables | 423.1 | 216.9 | |
Other payables | 126.6 | 85.3 | |
Financial liabilities at amortized cost | 2,319.7 | 1,339.8 | |
Derivatives | 5.3 | 1.9 | 1.7 |
Contingent consideration | - | 9.7 | |
Fair value through profit and loss | 1.9 | 11.4 | |
Derivatives | 5.3 | 24.9 | 4.7 |
Fair value through other comprehensive income | 24.9 | 4.7 | |
Share purchase liability | 6.5 | - | 78.4 |
Fair value through equity | - | 78.4 | |
Financial liabilities | 2,346.5 | 1,434.3 |
Fair value hierarchy
Novonesis has no financial instruments measured at fair value on the basis of quoted prices (level 1 input).
For financial assets and financial liabilities meas-ured at amortized cost (level 2 input), the carrying
amounts approximate fair value. Derivatives are measured at fair value based on observable data (level 2 input). The derivatives are not traded in an active market based on quoted prices, but on individual contracts. The fair value of these assets is determined using valuation techniques that utilize market-based data such as exchange
rates, interest rates, credit risk, electricity prices and volatilities.
Other financial assets, contingent consideration and share purchase liability are measured at fair value based on non-observable data (level 3 input). Reference is made to 6.5 for a description of the
fair value measurement of the share purchase lia-bility. The contingent consideration was contin-gent on the achievement of PrecisionBiotics Group sales targets for 2023, and was recognized at the anticipated fair value of EUR 9.7 million in 2023. In 2024, EUR 10 million was paid out.
5.4 Derivatives \u2013 hedge accounting
2024 | 2023 | |||
EUR million | Contract amount based on agreed rates* | Fair value | Contract amount based on agreed rates* | Fair value |
Forward exchange contracts | ||||
CNH | (68.8) | 1.1 | (88.0) | (1.4) |
GBP | (13.2) | - | - | - |
USD | 28.5 | (0.3) | 95.3 | 0.7 |
INR | 29.3 | (0.5) | 37.3 | 0.7 |
Other (purchase) | (7.8) | - | (6.3) | 0.1 |
Other (sale) | 22.2 | 0.6 | 19.5 | - |
Fair value hedges at December 31 | (9.8) | 0.9 | 57.8 | 0.1 |
* Positive contract amounts represent a sale of the respective currency, and negative amounts represent a purchase.
Fair value hedges
The table above shows the derivatives the Group has contracted in order to hedge currency expo-sure on financial assets and liabilities that give rise to currency adjustments in the income statement.
The forward exchange contracts mature in the period January 2025 to November 2025 (2023: January 2024 to July 2024).
The fair value hedges were 100% effective, as the loss on forward exchange contracts was EUR 0.6 million (2023: loss of EUR 8.1 million), compared with a gain on hedged items of EUR 0.6 million (2023: gain of EUR 8.1 million).
2024 | 2023 | |||
EUR million | Contract amount based on agreed rates | Fair value | Contract amount based on agreed rates | Fair value |
Forward exchange contracts* | ||||
USD | 545.9 | (22.9) | 304.3 | 2.7 |
545.9 | (22.9) | 304.3 | 2.7 | |
Interest rate swaps | ||||
DKK/DKK \u2013 floating to fixed rate | 194.9 | 1.3 | 77.0 | 5.1 |
EUR/EUR \u2013 floating to fixed rate | 496.1 | 10.0 | - | - |
691.0 | 11.3 | 77.0 | 5.1 | |
Forwards | ||||
Electricity price agreements | 3.6 | (0.3) | 9.7 | (4.0) |
3.6 | (0.3) | 9.7 | (4.0) | |
Cash flow hedges at December 31 | 1,240.5 | (11.9) | 391.0 | 3.8 |
* Positive contract amounts represent a sale of the respective currency, and negative amounts represent a purchase.
Cash flow hedges
The table above shows the derivatives the Group has contracted to hedge currency, interest rate and electricity price exposure in future cash flows.
The forward exchange contracts mature in the period January 2025 to December 2025 (2023: January 2024 to December 2024); the swaps mature in the period June 2025 to September
2034 (2023: May 2026 and December 2026); and the electricity price agreements mature in the period March 2025 to December 2025 (2023: January 2024 to December 2024).
At the end of 2024, the Group had hedged 77% of expected future cash flows in USD for 2025, at an average rate of EUR 1.10 (2023: 88% of expected future cash flows in USD for 2024, at an average rate of EUR 1.10).
The electricity price agreements have an average payment of EUR 77.8/MWh for 2025 (2023: aver-age payment of EUR 137.0/MWh for 2024).
Accounting policies
Hedge accounting consists of positive and negative fair values of derivatives, which are recognized in the balance sheet under Other financial assets and Borrowings, respectively. Derivatives are recognized at the transaction date.
Derivatives used for fair value hedges are measured at fair value at the reporting date, and value adjustments are recognized as Financial income or Financial costs. Derivatives used for cash flow hedges and
hedges of net investments in subsidiaries are measured at fair value at the reporting date, and value adjustments are recognized in Other comprehensive income.
Income and costs relating to cash flow hedges and hedges of net investments in subsidiaries are transferred from Other com-prehensive income when the hedged trans-action occurs. On realization, foreign exchange contracts and interest rate swaps are recognized as Financial income or Financial costs, and electricity price agree-ments covering production-related electricity are recognized as part of Cost of goods sold.
5.6 Financial assets and liabilities by category
EUR million | Note | 2024 | 2023 |
Other financial assets | 3.4 | - | |
Trade receivables | 4.2 | 665.6 | 496.7 |
Contract assets | 23.6 | 9.4 | |
Other receivables, excl. prepaid expenses | 81.7 | 22.1 | |
Cash and cash equivalents | 280.0 | 149.7 | |
Financial assets at amortized cost | 1,054.3 | 677.9 | |
Derivatives | 2.8 | 1.8 | |
Other financial assets | 3.5 | 3.4 | |
Fair value through profit and loss | 6.3 | 5.2 | |
Derivatives | 13.0 | 8.5 | |
Fair value through other comprehensive income | 13.0 | 8.5 | |
Financial assets | 1,073.6 | 691.6 |
EUR million | Note | 2024 | 2023 |
Lease liabilities | 5.3 | 193.9 | 49.4 |
Credit institutions | 5.3 | 1,576.1 | 988.2 |
Trade payables | 423.1 | 216.9 | |
Other payables | 126.6 | 85.3 | |
Financial liabilities at amortized cost | 2,319.7 | 1,339.8 | |
Derivatives | 5.3 | 1.9 | 1.7 |
Contingent consideration | - | 9.7 | |
Fair value through profit and loss | 1.9 | 11.4 | |
Derivatives | 5.3 | 24.9 | 4.7 |
Fair value through other comprehensive income | 24.9 | 4.7 | |
Share purchase liability | 6.5 | - | 78.4 |
Fair value through equity | - | 78.4 | |
Financial liabilities | 2,346.5 | 1,434.3 |
Fair value hierarchy
Novonesis has no financial instruments measured at fair value on the basis of quoted prices (level 1 input).
For financial assets and financial liabilities meas-ured at amortized cost (level 2 input), the carrying
amounts approximate fair value. Derivatives are measured at fair value based on observable data (level 2 input). The derivatives are not traded in an active market based on quoted prices, but on individual contracts. The fair value of these assets is determined using valuation techniques that utilize market-based data such as exchange
rates, interest rates, credit risk, electricity prices and volatilities.
Other financial assets, contingent consideration and share purchase liability are measured at fair value based on non-observable data (level 3 input). Reference is made to 6.5 for a description of the
fair value measurement of the share purchase lia-bility. The contingent consideration was contin-gent on the achievement of PrecisionBiotics Group sales targets for 2023, and was recognized at the anticipated fair value of EUR 9.7 million in 2023. In 2024, EUR 10 million was paid out.
5.4 Derivatives \u2013 hedge accounting
2024 | 2023 | |||
EUR million | Contract amount based on agreed rates* | Fair value | Contract amount based on agreed rates* | Fair value |
Forward exchange contracts | ||||
CNH | (68.8) | 1.1 | (88.0) | (1.4) |
GBP | (13.2) | - | - | - |
USD | 28.5 | (0.3) | 95.3 | 0.7 |
INR | 29.3 | (0.5) | 37.3 | 0.7 |
Other (purchase) | (7.8) | - | (6.3) | 0.1 |
Other (sale) | 22.2 | 0.6 | 19.5 | - |
Fair value hedges at December 31 | (9.8) | 0.9 | 57.8 | 0.1 |
* Positive contract amounts represent a sale of the respective currency, and negative amounts represent a purchase.
Fair value hedges
The table above shows the derivatives the Group has contracted in order to hedge currency expo-sure on financial assets and liabilities that give rise to currency adjustments in the income statement.
The forward exchange contracts mature in the period January 2025 to November 2025 (2023: January 2024 to July 2024).
The fair value hedges were 100% effective, as the loss on forward exchange contracts was EUR 0.6 million (2023: loss of EUR 8.1 million), compared with a gain on hedged items of EUR 0.6 million (2023: gain of EUR 8.1 million).
2024 | 2023 | |||
EUR million | Contract amount based on agreed rates | Fair value | Contract amount based on agreed rates | Fair value |
Forward exchange contracts* | ||||
USD | 545.9 | (22.9) | 304.3 | 2.7 |
545.9 | (22.9) | 304.3 | 2.7 | |
Interest rate swaps | ||||
DKK/DKK \u2013 floating to fixed rate | 194.9 | 1.3 | 77.0 | 5.1 |
EUR/EUR \u2013 floating to fixed rate | 496.1 | 10.0 | - | - |
691.0 | 11.3 | 77.0 | 5.1 | |
Forwards | ||||
Electricity price agreements | 3.6 | (0.3) | 9.7 | (4.0) |
3.6 | (0.3) | 9.7 | (4.0) | |
Cash flow hedges at December 31 | 1,240.5 | (11.9) | 391.0 | 3.8 |
* Positive contract amounts represent a sale of the respective currency, and negative amounts represent a purchase.
Cash flow hedges
The table above shows the derivatives the Group has contracted to hedge currency, interest rate and electricity price exposure in future cash flows.
The forward exchange contracts mature in the period January 2025 to December 2025 (2023: January 2024 to December 2024); the swaps mature in the period June 2025 to September
2034 (2023: May 2026 and December 2026); and the electricity price agreements mature in the period March 2025 to December 2025 (2023: January 2024 to December 2024).
At the end of 2024, the Group had hedged 77% of expected future cash flows in USD for 2025, at an average rate of EUR 1.10 (2023: 88% of expected future cash flows in USD for 2024, at an average rate of EUR 1.10).
The electricity price agreements have an average payment of EUR 77.8/MWh for 2025 (2023: aver-age payment of EUR 137.0/MWh for 2024).
Accounting policies
Hedge accounting consists of positive and negative fair values of derivatives, which are recognized in the balance sheet under Other financial assets and Borrowings, respectively. Derivatives are recognized at the transaction date.
Derivatives used for fair value hedges are measured at fair value at the reporting date, and value adjustments are recognized as Financial income or Financial costs. Derivatives used for cash flow hedges and
hedges of net investments in subsidiaries are measured at fair value at the reporting date, and value adjustments are recognized in Other comprehensive income.
Income and costs relating to cash flow hedges and hedges of net investments in subsidiaries are transferred from Other com-prehensive income when the hedged trans-action occurs. On realization, foreign exchange contracts and interest rate swaps are recognized as Financial income or Financial costs, and electricity price agree-ments covering production-related electricity are recognized as part of Cost of goods sold.
Hedge accounting consists of positive and negative fair values of derivatives, which are recognized in the balance sheet under Other financial assets and Borrowings, respectively. Derivatives are recognized at the transaction date.
Derivatives used for fair value hedges are measured at fair value at the reporting date, and value adjustments are recognized as Financial income or Financial costs. Derivatives used for cash flow hedges and
hedges of net investments in subsidiaries are measured at fair value at the reporting date, and value adjustments are recognized in Other comprehensive income.
Income and costs relating to cash flow hedges and hedges of net investments in subsidiaries are transferred from Other com-prehensive income when the hedged trans-action occurs. On realization, foreign exchange contracts and interest rate swaps are recognized as Financial income or Financial costs, and electricity price agree-ments covering production-related electricity are recognized as part of Cost of goods sold.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__140": { "value": "Hedge accounting consists of positive and negative fair values of derivatives, which are recognized in the balance sheet under Other financial assets and Borrowings, respectively. Derivatives are recognized at the transaction date.
Derivatives used for fair value hedges are measured at fair value at the reporting date, and value adjustments are recognized as Financial income or Financial costs. Derivatives used for cash flow hedges and
hedges of net investments in subsidiaries are measured at fair value at the reporting date, and value adjustments are recognized in Other comprehensive income.
Income and costs relating to cash flow hedges and hedges of net investments in subsidiaries are transferred from Other com-prehensive income when the hedged trans-action occurs. On realization, foreign exchange contracts and interest rate swaps are recognized as Financial income or Financial costs, and electricity price agree-ments covering production-related electricity are recognized as part of Cost of goods sold.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__141": { "value": "Hedge accounting consists of positive and negative fair values of derivatives, which are recognized in the balance sheet under Other financial assets and Borrowings, respectively. Derivatives are recognized at the transaction date.
Derivatives used for fair value hedges are measured at fair value at the reporting date, and value adjustments are recognized as Financial income or Financial costs. Derivatives used for cash flow hedges and
hedges of net investments in subsidiaries are measured at fair value at the reporting date, and value adjustments are recognized in Other comprehensive income.
Income and costs relating to cash flow hedges and hedges of net investments in subsidiaries are transferred from Other com-prehensive income when the hedged trans-action occurs. On realization, foreign exchange contracts and interest rate swaps are recognized as Financial income or Financial costs, and electricity price agree-ments covering production-related electricity are recognized as part of Cost of goods sold.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__142": { "value": "5.5 Common shares and treasury shares
2024 | 2023 | |||
Number of shares | Nominal value DKK million | Number of shares | Nominal value DKK million | |
Common shares | ||||
A common shares (nominally DKK 2) | 53,743,600 | 107.5 | 53,743,600 | 107.5 |
B common shares (nominally DKK 2) | 414,555,046 | 829.1 | 227,256,400 | 454.5 |
Common shares at December 31 | 468,298,646 | 936.6 | 281,000,000 | 562.0 |
Treasury shares - B shares | ||||
Treasury shares at January 1 | 3,682,554 | 7.4 | 4,401,011 | 8.8 |
Disposals during the year | (1,519,697) | (3.1) | (718,457) | (1.4) |
Treasury shares at December 31 | 2,162,857 | 4.3 | 3,682,554 | 7.4 |
Number of shares | 2024 | 2023 | ||
Common shares in circulation | ||||
Shares at January 1 | 277,317,446 | 276,598,989 | ||
Share issue | 187,298,646 | - | ||
Sale of treasury shares | 1,519,697 | 718,457 | ||
Common shares in circulation at December 31 | ||||
466,135,789 | 277,317,446 |
Each A share entitles the holder to 20 votes, while each B share entitles the holder to two votes.
Each year, the Board of Directors assesses whether the ownership structure with A and B common shares is optimal. The Board of Directors continues to believe that this is the best way to safeguard Novonesis\u2019 long-term development to the benefit of the company\u2019s shareholders and other stakeholders.
Treasury shares are used to reduce the common shares and to hedge employees\u2019 exercise of granted share awards and share options.
Share issue
As a result of the statutory merger with Chr. Hansen Holding A/S in 2024, the share capital of Novozymes A/S has been increased by nominally DKK 374,597,292 from DKK 562,000,000 to DKK 936,597,292, through the issuance of a total of 187,298,646 new B common shares in the denom-ination of DKK 2 per share. The share issue is fur-ther described in note 3.4.
Treasury shares 2024
% of common shares
1.3
(0.5)
(0.3)
0.5
Treasury shares at Jan. 1, 2024
Dilution due to share issue
Disposals
during
the year
Treasury shares at
Dec. 31,
2024
Treasury shares 2023
% of common shares
1.6
(0.3)
1.3
Treasury shares at Jan. 1,
2023
Disposals
during
the year
Treasury shares at
Dec. 31,
2023
5.5 Common shares and treasury shares
2024 | 2023 | |||
Number of shares | Nominal value DKK million | Number of shares | Nominal value DKK million | |
Common shares | ||||
A common shares (nominally DKK 2) | 53,743,600 | 107.5 | 53,743,600 | 107.5 |
B common shares (nominally DKK 2) | 414,555,046 | 829.1 | 227,256,400 | 454.5 |
Common shares at December 31 | 468,298,646 | 936.6 | 281,000,000 | 562.0 |
Treasury shares - B shares | ||||
Treasury shares at January 1 | 3,682,554 | 7.4 | 4,401,011 | 8.8 |
Disposals during the year | (1,519,697) | (3.1) | (718,457) | (1.4) |
Treasury shares at December 31 | 2,162,857 | 4.3 | 3,682,554 | 7.4 |
Number of shares | 2024 | 2023 | ||
Common shares in circulation | ||||
Shares at January 1 | 277,317,446 | 276,598,989 | ||
Share issue | 187,298,646 | - | ||
Sale of treasury shares | 1,519,697 | 718,457 | ||
Common shares in circulation at December 31 | ||||
466,135,789 | 277,317,446 |
Each A share entitles the holder to 20 votes, while each B share entitles the holder to two votes.
Each year, the Board of Directors assesses whether the ownership structure with A and B common shares is optimal. The Board of Directors continues to believe that this is the best way to safeguard Novonesis\u2019 long-term development to the benefit of the company\u2019s shareholders and other stakeholders.
Treasury shares are used to reduce the common shares and to hedge employees\u2019 exercise of granted share awards and share options.
Share issue
As a result of the statutory merger with Chr. Hansen Holding A/S in 2024, the share capital of Novozymes A/S has been increased by nominally DKK 374,597,292 from DKK 562,000,000 to DKK 936,597,292, through the issuance of a total of 187,298,646 new B common shares in the denom-ination of DKK 2 per share. The share issue is fur-ther described in note 3.4.
Treasury shares 2024
% of common shares
1.3
(0.5)
(0.3)
0.5
Treasury shares at Jan. 1, 2024
Dilution due to share issue
Disposals
during
the year
Treasury shares at
Dec. 31,
2024
Treasury shares 2023
% of common shares
1.6
(0.3)
1.3
Treasury shares at Jan. 1,
2023
Disposals
during
the year
Treasury shares at
Dec. 31,
2023
5.6 Financial assets and liabilities by category
EUR million | Note | 2024 | 2023 |
Other financial assets | 3.4 | - | |
Trade receivables | 4.2 | 665.6 | 496.7 |
Contract assets | 23.6 | 9.4 | |
Other receivables, excl. prepaid expenses | 81.7 | 22.1 | |
Cash and cash equivalents | 280.0 | 149.7 | |
Financial assets at amortized cost | 1,054.3 | 677.9 | |
Derivatives | 2.8 | 1.8 | |
Other financial assets | 3.5 | 3.4 | |
Fair value through profit and loss | 6.3 | 5.2 | |
Derivatives | 13.0 | 8.5 | |
Fair value through other comprehensive income | 13.0 | 8.5 | |
Financial assets | 1,073.6 | 691.6 |
EUR million | Note | 2024 | 2023 |
Lease liabilities | 5.3 | 193.9 | 49.4 |
Credit institutions | 5.3 | 1,576.1 | 988.2 |
Trade payables | 423.1 | 216.9 | |
Other payables | 126.6 | 85.3 | |
Financial liabilities at amortized cost | 2,319.7 | 1,339.8 | |
Derivatives | 5.3 | 1.9 | 1.7 |
Contingent consideration | - | 9.7 | |
Fair value through profit and loss | 1.9 | 11.4 | |
Derivatives | 5.3 | 24.9 | 4.7 |
Fair value through other comprehensive income | 24.9 | 4.7 | |
Share purchase liability | 6.5 | - | 78.4 |
Fair value through equity | - | 78.4 | |
Financial liabilities | 2,346.5 | 1,434.3 |
Fair value hierarchy
Novonesis has no financial instruments measured at fair value on the basis of quoted prices (level 1 input).
For financial assets and financial liabilities meas-ured at amortized cost (level 2 input), the carrying
amounts approximate fair value. Derivatives are measured at fair value based on observable data (level 2 input). The derivatives are not traded in an active market based on quoted prices, but on individual contracts. The fair value of these assets is determined using valuation techniques that utilize market-based data such as exchange
rates, interest rates, credit risk, electricity prices and volatilities.
Other financial assets, contingent consideration and share purchase liability are measured at fair value based on non-observable data (level 3 input). Reference is made to 6.5 for a description of the
fair value measurement of the share purchase lia-bility. The contingent consideration was contin-gent on the achievement of PrecisionBiotics Group sales targets for 2023, and was recognized at the anticipated fair value of EUR 9.7 million in 2023. In 2024, EUR 10 million was paid out.
6.1 Management remuneration
2024 | 2023 | |||||
EUR million | Board of Directors | Executive Management | Total | Board of Directors | Executive Management | Total |
Salaries and other short-term benefits | 1.8 | 2.6 | 4.4 | 1.3 | 2.3 | 3.6 |
Defined contribution plans | 0.3 | 0.3 | 0.2 | 0.2 | ||
Cash bonus | 4.5 | 4.5 | 1.6 | 1.6 | ||
Expensed share-based incentive programs | 2.3 | 2.3 | 2.3 | 2.3 | ||
Remuneration | 1.8 | 9.7 | 11.5 | 1.3 | 6.4 | 7.7 |
Compensation for lost incentives/Sign-on bonus | 0.4 | 0.4 | 1.1 | 1.1 | ||
Remuneration including additional payments | 1.8 | 10.1 | 11.9 | 1.3 | 7.5 | 8.8 |
Number of members at December 31 | 13 | 2 | 10 | 2 |
Novonesis\u2019 Remuneration Policy sets the general guidelines for the remuneration of the Board of Directors and the Executive Management. The Remuneration Policy is set by the Board of Directors, based on recommendations from the Nomination and Remuneration Committee, and is approved at the Annual General meeting.
A summary of the Management remuneration can be found in the Governance section of The Annual Report.
Executive Management
Members of the Executive Management receive fixed remuneration comprising a base salary, pen-sion and benefits. Furthermore, significant pro-portions of their remuneration packages are varia-ble and based on performance-related pay, through short- and long-term incentives. The incentive programs are balanced to ensure focus on both short-term and long-term value creation. They are designed to incentivize performance against selected financial, environmental, social and operational key performance indicators and individual objectives, which are directly linked to
Novonesis\u2019 strategy, and to incentivize long-term value creation and alignment with the long-term interests of shareholders, customers and other stakeholders.
The annual cash bonus has a target payout
and maximum payout equal to 100% and 150% of the annual base salary for the CEO, respectively,
and 65% and 97.5% of the annual base salary for the CFO, respectively. In 2024, the cash bonus includes a one-off bonus to Ester Baiget related to the combination of Novozymes and Chr. Hansen.
Members of the Executive Management have con-tracts of employment containing standard condi-tions for executives of Danish listed companies, including the periods of notice that both parties are required to give, and non-competition clauses. If an executive officer\u2019s contract of employment is terminated by the company without any miscon-duct on the part of the executive officer, the exec-utive officer has a notice period of 12 months. In addition to the notice period, the executive officer has a right to termination compensation of 12 months\u2019 base salary and pension contributions.
Board of Directors
The remuneration of the Board of Directors com-prises a fixed fee and is not incentive-based.
6.1 Management remuneration
2024 | 2023 | |||||
EUR million | Board of Directors | Executive Management | Total | Board of Directors | Executive Management | Total |
Salaries and other short-term benefits | 1.8 | 2.6 | 4.4 | 1.3 | 2.3 | 3.6 |
Defined contribution plans | 0.3 | 0.3 | 0.2 | 0.2 | ||
Cash bonus | 4.5 | 4.5 | 1.6 | 1.6 | ||
Expensed share-based incentive programs | 2.3 | 2.3 | 2.3 | 2.3 | ||
Remuneration | 1.8 | 9.7 | 11.5 | 1.3 | 6.4 | 7.7 |
Compensation for lost incentives/Sign-on bonus | 0.4 | 0.4 | 1.1 | 1.1 | ||
Remuneration including additional payments | 1.8 | 10.1 | 11.9 | 1.3 | 7.5 | 8.8 |
Number of members at December 31 | 13 | 2 | 10 | 2 |
Novonesis\u2019 Remuneration Policy sets the general guidelines for the remuneration of the Board of Directors and the Executive Management. The Remuneration Policy is set by the Board of Directors, based on recommendations from the Nomination and Remuneration Committee, and is approved at the Annual General meeting.
A summary of the Management remuneration can be found in the Governance section of The Annual Report.
Executive Management
Members of the Executive Management receive fixed remuneration comprising a base salary, pen-sion and benefits. Furthermore, significant pro-portions of their remuneration packages are varia-ble and based on performance-related pay, through short- and long-term incentives. The incentive programs are balanced to ensure focus on both short-term and long-term value creation. They are designed to incentivize performance against selected financial, environmental, social and operational key performance indicators and individual objectives, which are directly linked to
Novonesis\u2019 strategy, and to incentivize long-term value creation and alignment with the long-term interests of shareholders, customers and other stakeholders.
The annual cash bonus has a target payout
and maximum payout equal to 100% and 150% of the annual base salary for the CEO, respectively,
and 65% and 97.5% of the annual base salary for the CFO, respectively. In 2024, the cash bonus includes a one-off bonus to Ester Baiget related to the combination of Novozymes and Chr. Hansen.
Members of the Executive Management have con-tracts of employment containing standard condi-tions for executives of Danish listed companies, including the periods of notice that both parties are required to give, and non-competition clauses. If an executive officer\u2019s contract of employment is terminated by the company without any miscon-duct on the part of the executive officer, the exec-utive officer has a notice period of 12 months. In addition to the notice period, the executive officer has a right to termination compensation of 12 months\u2019 base salary and pension contributions.
Board of Directors
The remuneration of the Board of Directors com-prises a fixed fee and is not incentive-based.
6.4 Related party transactions
Transactions
EUR million | 2024 | 2023 |
Novo Holdings A/S | ||
Dividend payment to Novo Holdings A/S | 62.0 | 107.8 |
The Novo Nordisk Group | ||
Sale of services | 15.4 | 15.0 |
Purchase of goods and materials | (1.9) | (1.9) |
Purchase of services | (4.4) | (4.7) |
The NNIT Group | ||
Purchase of services | (0.7) | (1.9) |
Microbiogen Pty. Ltd.* | ||
Purchase of services | (9.0) | (9.5) |
21st.BIO A/S* | ||
Sale of services | - | 0.9 |
* Associate of Novozymes A/S
Outstanding balances
EUR million | 2024 | 2023 |
The Novo Nordisk Group | ||
Receivables | 4.0 | 3.0 |
Payables | (10.2) | (9.8) |
The NNIT Group | ||
Payables | (0.1) | (0.1) |
Microbiogen Pty. Ltd.* | ||
Payables | (2.3) | (4.2) |
* Associate of Novozymes A/S
Novozymes A/S is controlled by Novo Holdings A/S, domiciled in Hellerup, Denmark, which holds 63.4% of the votes in Novozymes A/S. The remaining shares are widely held. The ultimate parent of the Group is the Novo Nordisk Foundation (incorporated in Denmark).
Related parties are considered to be Novo Holdings A/S and the Novo Nordisk Foundation, as well as the Board of Directors and the Executive Management of these entities, together with their immediate families. Other related par-ties are considered to be the Novo Nordisk Foundation\u2019s subsidiaries and associates, such as the Novo Nordisk Group, and the NNIT Group, associates of Novonesis, as well as the Board of
Directors and the Executive Management of Novozymes A/S, together with their immediate families. Related parties also include companies in which the above persons have control or joint control.
The majority of the agreements with related par-ties are renegotiated regularly.
In 2024, there have been very limited transactions with the Chr. Hansen Group until the time of the combination in January 2024. In 2023, there were sales of EUR 21.2 million to the Chr. Hansen Group, with an outstanding receivable of EUR 4.6 million at year end 2023.
Novonesis is expanding the wastewater and bio-mass treatment facility in Kalundborg, which is a joint operation with the Novo Nordisk Group. The expansion is fully financed by Novo Nordisk, and in 2024 Novonesis has received EUR 60.7 million (2023: EUR 13.0 million) from Novo Nordisk to fund the investment. The expansion is expected to be completed in 2027.
In connection with the relocation of the headquar-ters, Novonesis has sold land and buildings in Bagsvaerd, Denmark, with effect from January 1, 2025, to Novo Nordisk A/S for EUR 16.8 million. The sales price is based on external valuations.
As part of the combination with Chr. Hansen, Novo Holdings received Merger Consideration Shares at a ratio of 1.0227 for each Chr. Hansen Share held by Novo Holdings, with respect to Novo Holdings\u2019 holding of 28,983,112 Chr. Hansen Shares.
There were no transactions with related parties other than the transactions described and the normal remuneration of the Board of Directors and the Executive Management, which is pre-sented in Note 6.1.
Guarantees, rental and other purchase commit-ments to related parties at December 31, 2024, amounted to EUR 2.8 million, compared with EUR 3.6 million at December 31, 2023.
6.2 Share-based payment
New programs
Novonesis has established share-based incentive programs for the Executive Management, execu-tive vice presidents, vice presidents and directors. The purpose of these programs is to ensure an alignment of interests of the Management, employ-ees and shareholders. Allocation of programs has been, and remains, dependent on profit, value cre-ation and sustainability targets being achieved, and is made based on individual base salary. In order to receive the shares, the employees must still be employed at the vesting date. This does not apply to persons who have retired, taken voluntary early retirement or been given notice.
The 2024 program for the Executive Management consists of 100% performance shares. The total number of shares achievable is divided into two categories: \u2018target shares\u2019 and \u2018extra shares\u2019. The maximum allocation is 150% of the number of tar-get shares.
The targets have 40% weight on organic sales growth, 20% weight on adjusted EBITDA margin, 20% weight on adjusted ROIC, and 20% weight on sustainability targets. The sustainability targets are measured in relation to climate, workspace and diversity. The performance targets are as
protocolled in the minutes of the board meeting approving the annual group financial statement for the year prior to the performance period.
\u2022\tIf Novonesis reaches the targets for 2024\u2013 2026, then the target shares will be granted.
\u2022\tIf Novonesis manages to overperform on one or more of the targets, up to 50% more shares may be granted.
\u2022\tIf Novonesis does not meet the targets, or if Novonesis is significantly below the targets, then none or only part of the target shares will be granted.
The total target-level fair value of the program at the date of grant was approximately EUR 2.4 mil-lion. The value of the shares will be expensed over the three-year qualifying period (2024\u20132026) and will be awarded in 2027.
A new program has also been established in 2024 for executive vice presidents, vice presidents and directors covering the performance period 2024\u20132026 (264 executive vice presidents, vice presi-dents and directors). The total target-level fair value at the grant date was approximately EUR 11.9 mil-lion and is based on the same requirements and tar-gets as for the Executive Management.
The program is 100% performance shares with a three-year vesting period.
Both programs contain a maximum-value clause, allowing the Board of Directors the option to reduce the number of shares if the value at the end of the program exceeds twice the maximum value at the date of the conditional grant.
In addition to replacement awards issued to cer-tain legacy Chr. Hansen key employees, which were not fully vested at the combination date, a new short-term incentive program has been established for 121 legacy Chr. Hansen key employees below the executive vice president level. The targets include both personal targets and financial performance indicators, such as sales, adjusted EBITDA margin and net working capital in % of sales. The program is 100% perfor-mance shares with a three-year vesting period. The value at grant is up to EUR 6.7 million.
As in previous years, a new share-based program was established for selected employees. The aim of the program is for the Executive Management to be able to award shares to employees as a per-sonal bonus for outstanding efforts or for reten-tion purposes. Members of the Executive
Management cannot be awarded incentives under this program. The program has a three-year vesting period.
Finally awarded programs
Awards in the programs covering the perfor-mance period 2022\u20132024 were finalized in 2024.
As a consequence of the combination, the targets for 2024 in the program have been updated to reflect the performance ambitions for Novonesis, while the original targets have been settled based on the performance of Novozymes in 2022-2023.
The targets covered organic sales growth, EBIT margin/adjusted EBITDA margin, ROIC and sus-tainability. The actual performance over the period exceeded targets, and in total the perfor-mance against the set targets resulted in 83% of the maximum allocation now being awarded.
For the Executive Management, this means that a total of 12,120 shares will be released in February 2025. The number of share options granted over the three-year period is 61,228, reflecting the realized target achievement. The program con-tains a maximum-value clause, allowing the Board of Directors to choose to limit the total allocation of shares and share options if the intrinsic value at
the end of the program exceeds twice the maxi-mum value, at the date of the conditional grant. There will be no limitation on the total allocation, as the intrinsic value is EUR 0.7 million.
The program for executive vice presidents, vice presidents and directors follows the same require-ments and targets as the program for the Executive Management. The final number of shares allocated under this program to be released in February 2025 is 119,261. The number of share options granted over the three-year period is 602,002, reflecting the realized target achievement of 83%.
Awards in the program for other employees cov-ering the performance period 2022\u20132024 were also finalized in 2024. The number of share options granted over the three-year period is 557,830, reflecting the realized target achieve-ment of 83%.
The legacy Chr. Hansen board approved an accel-eration of outstanding share-based programs for employees with severance agreements due to the merger. In total, 233,461 shares from the acceler-ated programs were released in 2024.
Furthermore, the Chr. Hansen 2021/22 program vested, with 153,958 shares released in 2024.
Accounting policies
The Group has established share-based incentive programs, comprising equity-set-tled and cash-settled programs.
The fair value of the employee services received in exchange for the grant of share options and performance shares is measured with reference to the fair value of the share options and performance shares granted. The fair value is measured using the Black\u2013Scholes option-pricing model.
The fair value of share-based payment at the grant date is recognized as an employee cost over the period in which the share options and performance shares vest. In measuring the
fair value of the employee services, account is taken of the number of employees expected to gain entitlement to the options and perfor-mance shares, as well as the number of options and performance shares the employ-ees are expected to gain. This estimate is adjusted at the end of each reporting period, such that only the number of options and per-formance shares to which employees are enti-tled or expected to be entitled is recognized.
The value of equity-settled programs is recog-nized in equity. The value of cash-settled pro-grams, which are recognized as Other liabili-ties, is adjusted to fair value at the end of each reporting period, and the subsequent adjust-ment is recognized in the income statement under Financial income or Financial costs.
Share options The number of outstanding options (excl. performance shares) has developed as follows: | Number of options | DKK1 | EUR | EUR million | |||
Executive Management | |||||||
Executive vice presidents, vice presidents and directors | Other employees | Total | Average exercise price per option | Grant date fair value per option | Grant date fair value total | ||
Outstanding at January 1, 2024 | 266,807 | 4,799,858 | 2,416,165 | 7,482,830 | 341 | ||
Allocation adjustment2 | 13,279 | 130,609 | 120,192 | 264,080 | 416 | 11.0 | 3.0 |
Exercised3 | - | (653,391) | (360,161) | (1,013,552) | 292 | ||
Forfeited | - | (58,693) | (60,759) | (119,452) | 376 | ||
Expired | - | (4,034) | (56,258) | (60,292) | 307 | ||
Outstanding at December 31, 2024 | 280,086 | 4,214,349 | 2,059,179 | 6,553,614 | 351 | ||
Outstanding at January 1, 2023 | 183,558 | 4,547,808 | 2,544,891 | 7,276,257 | 331 | ||
Granted4 | 55,811 | 451,451 | - | 507,262 | 355 | 13.1 | 6.7 |
Allocation adjustment | 27,438 | 248,529 | 252,676 | 528,643 | 382 | 9.0 | 4.7 |
Exercised | - | (419,051) | (230,309) | (649,360) | 271 | ||
Forfeited | - | (26,553) | (113,148) | (139,701) | 383 | ||
Expired | - | (2,326) | (37,945) | (40,271) | 244 | ||
Outstanding at December 31, 2023 | 266,807 | 4,799,858 | 2,416,165 | 7,482,830 | 341 | ||
Number of exercisable options at December 31, 2024 | 3,234,629 | 310 | |||||
Number of exercisable options at December 31, 2023 | 2,775,168 | 279 |
1. The shares are listed on NASDAQ OMX Copenhagen in DKK.\t
2. The allocation of share options for 2022\u20132024 has been adjusted based on the realized level of target achievement for the period (83%).
3. The weighted average share price for share options exercised during 2024 was DKK 407 (2023: DKK 352).\t
4. The allocation of share options for 2023\u20132025 will be adjusted in January 2026, based on the cumulative level of target achievement for the period.
For share options outstanding at December 31, 2024, the range of exercise prices is DKK 249-486 per option (2023: DKK 249-486 per option), and the weighted average remaining term to maturity is four years (2023: five years).
During 2024, EUR 28.8 million arising from share-based payment was recognized in the income statement (2023: EUR 20.3 million), EUR 28.4 mil-lion was from equity-settled programs (2023: EUR 19.7 million) and EUR 0.4 million was from cash-set-tled programs (2023: EUR 0.6 million).
Most programs are equity-settled, and no liability is recognized for these. If allocations under the
programs are made in countries where ownership of foreign shares is not permitted, the value of share options is settled in cash instead, and a lia-bility of EUR 3.3 million was recognized for this in 2024 (2023: EUR 3.1 million). The intrinsic value of exercisable cash-settled programs in 2024 was EUR 1.6 million (2023: EUR 1.3 million).
The fair value of employee services received is measured with reference to the fair value of the equity instruments granted. Fair value at grant date is measured in accordance with the Black\u2013Scholes model, using the average exercise price, the option term and the following significant assumptions:
2024 | 2023 | ||
Expected future dividends per share | DKK | N/A | 39.6 |
Volatility | % | N/A | 32.0 |
Annual risk-free interest rate | % | N/A | 2.3 |
Weighted average share price at grant date | DKK | N/A | 355 |
Furthermore, the options are assumed to be exer-cised two years after expiry of the vesting period, on average, or at the option\u2019s expiry date if within one year. Volatility is estimated using the historical
volatility over the last three years. The risk-free interest rate is based on Danish government bonds with a maturity equivalent to the option\u2019s term to maturity.
Performance shares
The shares allocated under the programs are for performance shares. In 2024, 351,306 perfor-mance shares with an aggregate grant date fair value of EUR 17.5 million were granted (2023: EUR 6.6 million), which will be expensed over a three-year period (2024\u20132026).
Fair value at grant date for performance shares is measured using the weighted average share price at grant date, which was DKK 372 for 2024.
The fair value of outstanding performance shares at December 31, 2024, was EUR 48.2 million (2023: EUR 19.5 million).
Performance shares | |||
The number of outstanding performance shares has developed as follows:\t | Executive Management | Executive vice presidents, vice presidents and directors | Total |
Outstanding at January 1, 2024 | 39,807 | 349,783 | 389,590 |
Outstanding shares from Chr. Hansen | - | 559,101 | 559,101 |
Allocated | 50,283 | 301,023 | 351,306 |
Allocation adjustment | 2,629 | 25,946 | 28,575 |
Exercised | (14,923) | (414,427) | (429,350) |
Forfeited | - | (17,306) | (17,306) |
Outstanding at December 31, 2024 | 77,796 | 804,120 | 881,916 |
Outstanding at January 1, 2023 | 30,302 | 283,727 | 314,029 |
Allocated | 15,393 | 121,912 | 137,305 |
Allocation adjustment | 4,819 | 43,734 | 48,553 |
Exercised | (10,707) | (95,146) | (105,853) |
Forfeited | - | (4,444) | (4,444) |
Outstanding at December 31, 2023 | 39,807 | 349,783 | 389,590 |
The Group has established share-based incentive programs, comprising equity-set-tled and cash-settled programs.
The fair value of the employee services received in exchange for the grant of share options and performance shares is measured with reference to the fair value of the share options and performance shares granted. The fair value is measured using the Black\u2013Scholes option-pricing model.
The fair value of share-based payment at the grant date is recognized as an employee cost over the period in which the share options and performance shares vest. In measuring the
fair value of the employee services, account is taken of the number of employees expected to gain entitlement to the options and perfor-mance shares, as well as the number of options and performance shares the employ-ees are expected to gain. This estimate is adjusted at the end of each reporting period, such that only the number of options and per-formance shares to which employees are enti-tled or expected to be entitled is recognized.
The value of equity-settled programs is recog-nized in equity. The value of cash-settled pro-grams, which are recognized as Other liabili-ties, is adjusted to fair value at the end of each reporting period, and the subsequent adjust-ment is recognized in the income statement under Financial income or Financial costs.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__156": { "value": "6.3 Contingent liabilities and pending litigation
Novonesis is engaged in certain legal cases, e.g., in relation to patent disputes, which from time to time involve significant amounts of dispute. The Board of Directors and Management believe that settlement or continuation of these cases will not have a significant effect on the Group\u2019s financial position. A liability is recognized under Provisions when the risk of a loss on a legal case is consid-ered more likely than not, but it is inherent that there is uncertainty in the outcome of legal cases.
In Management\u2019s opinion, the outcomes of these cases are not expected to give rise to any signifi-cant losses beyond the amounts provided for at December 31, 2024.
At December 31, 2023, Novozymes A/S had a contingent liability in the form of a break-up fee of up to EUR 315 million in the unlikely event that the combination of Novozymes and Chr. Hansen would not obtain regulatory approval. As the com-bination was completed on January 29, 2024, the liability did not materialize.
At December 31, 2023, Novozymes A/S had entered into consultancy agreements with fees contingent on the completion of the combination with Chr. Hansen. The expected fees amounted to approximately EUR 33.5 million and have been paid in 2024.
6.3 Contingent liabilities and pending litigation
Novonesis is engaged in certain legal cases, e.g., in relation to patent disputes, which from time to time involve significant amounts of dispute. The Board of Directors and Management believe that settlement or continuation of these cases will not have a significant effect on the Group\u2019s financial position. A liability is recognized under Provisions when the risk of a loss on a legal case is consid-ered more likely than not, but it is inherent that there is uncertainty in the outcome of legal cases.
In Management\u2019s opinion, the outcomes of these cases are not expected to give rise to any signifi-cant losses beyond the amounts provided for at December 31, 2024.
At December 31, 2023, Novozymes A/S had a contingent liability in the form of a break-up fee of up to EUR 315 million in the unlikely event that the combination of Novozymes and Chr. Hansen would not obtain regulatory approval. As the com-bination was completed on January 29, 2024, the liability did not materialize.
At December 31, 2023, Novozymes A/S had entered into consultancy agreements with fees contingent on the completion of the combination with Chr. Hansen. The expected fees amounted to approximately EUR 33.5 million and have been paid in 2024.
6.3 Contingent liabilities and pending litigation
Novonesis is engaged in certain legal cases, e.g., in relation to patent disputes, which from time to time involve significant amounts of dispute. The Board of Directors and Management believe that settlement or continuation of these cases will not have a significant effect on the Group\u2019s financial position. A liability is recognized under Provisions when the risk of a loss on a legal case is consid-ered more likely than not, but it is inherent that there is uncertainty in the outcome of legal cases.
In Management\u2019s opinion, the outcomes of these cases are not expected to give rise to any signifi-cant losses beyond the amounts provided for at December 31, 2024.
At December 31, 2023, Novozymes A/S had a contingent liability in the form of a break-up fee of up to EUR 315 million in the unlikely event that the combination of Novozymes and Chr. Hansen would not obtain regulatory approval. As the com-bination was completed on January 29, 2024, the liability did not materialize.
At December 31, 2023, Novozymes A/S had entered into consultancy agreements with fees contingent on the completion of the combination with Chr. Hansen. The expected fees amounted to approximately EUR 33.5 million and have been paid in 2024.
6.5 Non-controlling interests
EUR million | 2024 | 2023 |
Share purchase liability at January 1 | 78.4 | 102.2 |
Currency translation adjustments | 3.4 | (4.1) |
Interest | 1.3 | 10.7 |
Fair value adjustment | - | (26.4) |
Paid as dividend | - | (4.0) |
Purchase of shares | (83.1) | - |
Share purchase liability at December 31 | - | 78.4 |
Transactions with non-controlling interests
In 2024 Novonesis acquired the remaining 40% of the shares in Synergia Life Science, at a price of EUR 83.1 million, and the remaining 4% of the shares in Suzhou Hongda Enzyme Co. Ltd., at a price of EUR 2.8 million.
In 2024 no dividend (2023: EUR 4.0 million) was paid to the non-controlling interests in Synergia Life Sciences.
Share purchase liability
On December 10, 2021, Novonesis acquired 60% of the shares in Synergia Life Science and recog-nized a share purchase liability related to the acquisition of the remaining 40% of the shares.
Fair value of the share purchase liability has been assessed by using the most probable redemption amount, discounted at a rate of 11% (2023: 11%).
Currency translation adjustments and interest of EUR 4.7 million (2023: net EUR 6.6 million) have been recognized in Equity. The share purchase liability was denominated in INR.
In 2023, Management reassessed the value of the redemption amount due to lower-than-expected realized sales, and reduced the liability by EUR 26.4 million.
Critical accounting estimates
Fair value of the share purchase liability is based on non-observable data (level 3 input) that requires Management to make estimates and use assumptions.
Estimates are based on updated informa-tion after the initial recognition of the lia-bility, such as budgets, sales forecasts, discount rates, etc. The fair value of the share purchase liability is calculated as the present value of the most probable redemption amount using the discounted cash flow method. The determined fair value is associated with uncertainty and may be subject to subsequent adjustments.
Accounting policies
Share purchase liability is Novonesis\u2019 obligation to purchase non-controlling interests in subsidiaries, and is remeas-ured at fair value at each reporting date. The fair value of the most likely redemp-tion amount is initially recognized within liabilities, with a corresponding charge directly to Equity. Interest and fair value adjustments resulting from events after the initial recognition are recognized in Equity under Retained earnings.
6.6 Fees to statutory auditors
EUR million | 2024 | 2023 |
Statutory audit | 1.9 | 1.5 |
Other assurance engagements | 0.3 | 0.3 |
Tax assurance services | 0.5 | 0.1 |
Other services | 0.0 | 0.8 |
Fees to statutory auditors | 2.7 | 2.7 |
Audit fee policy
In 2024, Novonesis has updated the audit fee pol-icy, so the annual fee for non-audit services pro-vided by the statutory auditor should not exceed 70% of the annual fee for statutory audit services measured at Group level. The 70% may only be exceeded with the approval of the Audit Committee.
No such approval was given in 2024.
In 2024, EY Godkendt Revisionspartnerselskab was elected as auditors at the Annual General Meeting replacing previous years auditors, PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab. Certain restrictions apply regarding the non-audit services that the auditors may perform. This normally includes a 70% cap;
however, as this is the first year of the audit, the 70% cap does not yet apply. Had the 70% cap applied, it would not have been exceeded.
Tax and other assurance services
Tax services comprise allowed tax compliance and transfer pricing as well as tax advisory services.
Other assurance services comprise mainly assur-ance over the sustainability statement and other assurance statements.
The consolidated statement of cash flows, which is compiled using the indirect method, shows cash flows from operating, investing and financing activities, and the Group\u2019s cash and cash equivalents at the beginning and end of the year.
Cash flows from operating activities comprise net profit adjusted for non-cash items, paid financial items, corporate income tax paid and change in working capital.
Cash flows from investing activities comprise payments relating to the acquisition and sale
of companies and non-controlling interests, intangible assets, and property, plant and equipment.
Cashs flow from financing activities comprise proceeds from borrowings, repayment of principal on interest-bearing debt, repayment of lease liabilities, payment of dividends, pro-ceeds from share issues, and the sale of treasury shares and other securities.
Cash and cash equivalents comprise cash at bank and in hand, less current bank loans due on demand.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__165": { "value": "6.8 Events after the reporting date
On February 11, 2025, it was announced that Novonesis had reached an agreement with dsm-firmenich to dissolve the Feed Enzyme Alliance and take over its sales and distribution activities, in exchange for a total cash considera-tion of EUR 1.5 billion. The acquisition is aligned with Novonesis\u2019 growth strategy and expands its presence across the animal biosolutions value chain. The acquisition will be included within our Planetary Health Biosolutions segment.
Subject to regulatory approvals, the transaction is expected to close in the course of 2025.
No other events of importance to the consoli-dated financial statements have occurred after the reporting date.
6.9 Group companies
Production
Sales and marketing
Research and development
Holding and other entities with limited or no activity
Activity | Percentage of shares owned |
Parent Company | |
Novozymes A/S, Denmark |
Activity | Percentage of shares owned | ||||||||
Subsidiaries | |||||||||
Chr. Hansen Argentina S.A.I.C., Argentina | 100 | ||||||||
Novozymes BioAg S.A., Argentina | 100 | ||||||||
Paprika S.A., Argentina | 70 | ||||||||
Chr. Hansen Pty. Ltd.1, Australia | 100 | ||||||||
Hale-Bopp Australia Pty. Ltd.1, Australia | 100 | ||||||||
Novozymes Australia Pty. Ltd.1, Australia | 100 | ||||||||
Novozymes Belgium BV1, Belgium | 100 | ||||||||
Chr. Hansen Ind. e Com. Ltda.1, Brazil | 100 | ||||||||
Novozymes BioAg Productos Para Agricultura Ltda., Brazil | 100 | ||||||||
Novozymes Latin America Ltda.1, Brazil | 100 | ||||||||
Chr. Hansen Limited, Canada | 100 | ||||||||
Novozymes BioAg Limited, Canada | 100 | ||||||||
Novozymes Canada Limited, Canada | 100 | ||||||||
Chr. Hansen Chile SpA.1, Chile | 100 | ||||||||
Chr. Hansen (Beijing) Trading Co., Ltd.1, China | 100 | ||||||||
Novozymes (China) Biotechnology Co. Ltd., China | 100 | ||||||||
Novozymes (China) Investment Co. Ltd., China | 100 | ||||||||
Novozymes OneHealth Biotechnology (Shanghai) Co. Ltd., China | 100 | ||||||||
Novozymes (Shenyang) Biologicals Co. Ltd., China | 100 | ||||||||
Suzhou Hongda Enzyme Co. Ltd.1, China | 100 | ||||||||
Chr. Hansen Colombia S.A.S., Colombia | 100 |
Activity | Percentage of shares owned |
Chr. Hansen Czech Republic S.r.o.1, Czech Republic | 100 |
Chr. Hansen A/S1, Denmark | 100 |
Novonesis Plant Biosolutions A/S 1, Denmark | 100 |
Novozymes Bioindustrial A/S1, Denmark | 100 |
Novozymes Bioindustrial China A/S1, Denmark | 100 |
Novozymes Biopharma DK A/S1, Denmark | 100 |
Novonesis EG SSC1, Egypt | 100 |
Chr. Hansen Finland Oy1, Finland | 100 |
Chr. Hansen France S.A.S., France | 100 |
Novozymes France S.A.S.1, France | 100 |
Chr. Hansen GmbH, Germany | 100 |
Chr. Hansen HMO GmbH, Germany | 100 |
Halley GmbH, Germany | 100 |
Jupiter Beteiligungsgesellschaft mbH, Germany | 100 |
Novozymes Berlin GmbH, Germany | 100 |
Novozymes Deutschland GmbH1, Germany | 100 |
Hansen Hellas ABEE, Greece | 100 |
Novozymes Greece Single Member SA1, Greece | 100 |
Novozymes Hong Kong Ltd., Hong Kong | 100 |
Chr. Hansen India Pvt. Ltd., India | 99.6 |
Novozymes South Asia Pvt. Ltd., India | 100 |
Riata Life Sciences Pvt. Ltd., India | 100 |
Activity | Percentage of shares owned | ||
Synergia Life Sciences Pvt. Ltd.1, India | 100 | ||
UAS Life Sciences India Private Ltd., India | 100 | ||
PT Novozymes Indonesia Biotechnology1, Indonesia | 100 | ||
Chr. Hansen Pars Co. LLC2, Iran | 100 | ||
Chr. Hansen Ireland Ltd.1, Ireland | 100 | ||
PrecisionBiotics Group Ltd.1, Ireland | 100 | ||
Chr. Hansen Italia S.p.A., Italy | 100 | ||
Novozymes Italia S.r.l.1, Italy | 100 | ||
Chr. Hansen Japan Co., Ltd.1, Japan | 100 | ||
Novozymes Japan Ltd.1, Japan | 100 | ||
Novozymes Kenya Ltd.1, Kenya | 100 | ||
Chr. Hansen Malaysia SDN. Bhd., Malaysia | 100 | ||
Novozymes Malaysia SDN. Bhd.1, Malaysia | 100 | ||
Chr. Hansen de Mexico S.A. de C.V., Mexico | 100 | ||
Novozymes Mexicana, S.A. de C.V.1, Mexico | 100 | ||
Novozymes Mexico, S.A. de C.V., Mexico | 100 | ||
Novozymes Nederland B.V.1, Netherlands | 100 | ||
Chr. Hansen S.A., Peru | 100 | ||
Chr. Hansen Poland Sp. z o.o.1, Poland | 100 | ||
Chr. Hansen SRL, Romania | 100 | ||
Chr. Hansen LCC3, Russia | 100 | ||
Novozymes RUS LLC1 ,2, Russia | 100 |
Activity | Percentage of shares owned |
Chr. Hansen Singapore Pte Ltd.1, Singapore | 100 |
Novozymes Singapore Pte. Ltd.1, Singapore | 100 |
Chr. Hansen South Africa (Pty) Ltd.1, South Africa | 100 |
Novozymes South Africa (Pty) Ltd.1, South Africa | 100 |
Novozymes Korea Limited1, South Korea | 100 |
Chr. Hansen, S.L.1, Spain | 100 |
Novozymes Spain S.A.1, Spain | 100 |
Novozymes Switzerland AG1, Switzerland | 100 |
Novozymes (Thailand) Ltd.1, Thailand | 100 |
Chr. Hansen Gida Sanayi ve Ticaret A.S., Republic of T\u00fcrkiye | 100 |
Novozymes Enzim\u00a0Dis Ticaret Ltd. Sirketi1, Republic of T\u00fcrkiye | 100 |
Chr. Hansen Middle East & Africa FZ-LLC, UAE | 100 |
Chr. Hansen (UK) Limited1, U.K. | 100 |
Novozymes UK Ltd.1, U.K. | 100 |
Chr. Hansen Ukraine LLC, Ukraine | 100 |
Chr. Hansen Inc.1, U.S. | 100 |
Novozymes, Inc., U.S. | 100 |
Novozymes BioAg, Inc., U.S. | 100 |
Novozymes Biologicals, Inc., U.S. | 100 |
Novozymes Blair, Inc., U.S. | 100 |
Novozymes North America, Inc., U.S. | 100 |
Novozymes US, Inc.1, U.S. | 100 |
Activity | Percentage of shares owned |
Physicians Exclusive LLC (d.b.a) Microbiome Labs, U.S. | 100 |
UAS Laboratories LLC, U.S. | 100 |
Joint operations/associates | |
Bacthera AG2, Switzerland | 50 |
Bacthera Denmark A/S2, Denmark | 50 |
Grundejerforeningen Hallas Park4, Denmark | |
Grundejerforeningen Sm\u00f8rmosen4, Denmark | |
MagnaBioAnalytics LLC, U.S. | 19.35 |
Microbiogen PTY Ltd.1, Australia | 23.10 |
Tecnol s.r.l. in liqudiazione (formerly Beta Renewables S.p.A.)1, Italy | 9.95 |
21st.BIO A/S1, Denmark | 40.60 |
1 Owned directly by Novozymes A/S.
2 Under liquidation.
3 Sales will be discontinued in 2025.
4Joint operation.
Joint operations/associates
Bacthera AG2, Switzerland
50
Bacthera Denmark A/S2, Denmark
50
Grundejerforeningen Hallas Park4, Denmark
Grundejerforeningen Sm\u00f8rmosen4, Denmark
MagnaBioAnalytics LLC, U.S.
19.35
Microbiogen PTY Ltd.1, Australia
23.10
Tecnol s.r.l. in liqudiazione (formerly Beta Renewables S.p.A.)1, Italy
9.95
21st.BIO A/S1, Denmark
40.60
1 Owned directly by Novozymes A/S.
2 Under liquidation.
3 Sales will be discontinued in 2025.
4Joint operation.
", "dimensions": { "concept": "ifrs-full:DisclosureOfJointVenturesExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s9__7__168": { "value": "Joint operations/associates
Bacthera AG2, Switzerland
50
Bacthera Denmark A/S2, Denmark
50
Grundejerforeningen Hallas Park4, Denmark
Grundejerforeningen Sm\u00f8rmosen4, Denmark
MagnaBioAnalytics LLC, U.S.
19.35
Microbiogen PTY Ltd.1, Australia
23.10
Tecnol s.r.l. in liqudiazione (formerly Beta Renewables S.p.A.)1, Italy
9.95
21st.BIO A/S1, Denmark
40.60
1 Owned directly by Novozymes A/S.
2 Under liquidation.
3 Sales will be discontinued in 2025.
4Joint operation.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:529900T6WNZXD2R3JW38", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } } } }