At December 31, 2017, shareholders’ equity was DKK 11,267 million, down 4% from DKK 11,745 million at December 31, 2016, as dividend payments and stock buyback in 2017 more than offset comprehensive income.
Shareholders’ equity represented 61% of the balance sheet total, down from 63% at December 31, 2016.
Return on equity
Return on equityA profitability ratio that measures a company’s ability to generate profits from its shareholders’ investments in the company. was 27.1%, up 1.0 percentage point from 26.1% in 2016. The increase was a result of higher net profit and a decrease in equity.
At December 31, 2017, the holding of treasury stock was 12.1 million B shares, equivalent to 4.0% of the common stock.
The Board of Directors proposes that the Annual Shareholders' Meeting approve a dividend of DKK 4.50 per share for the 2017 financial year, an increase of 13% compared with 2016. This will result in an expected total dividend payment of approximately DKK 1,318 million, corresponding to a payout ratio of 42.3%.
Stock buyback program
In 2017, Novozymes bought back 6.8 million B shares with a transaction value of DKK 2,000 million under the stock buyback program initiated on January 25, 2017, and completed on November 9, 2017. The shares acquired within the program will be used to reduce the common stock and to meet obligations arising from employee share-based incentive programs.