Novonesis A/s Class B · OMXCOP:NSIS_B
Novonesis A/s Class B — Novozymes — 9M 2022 Earnings Presentation
68 slides from Novonesis A/s Class B's earnings presentation, Nov 3, 2022
Slide 1: Roadshow presentation 9M 2022
Roadshow presentation 9M 2022 Released on November 3, 2022 Further investor relations information is available from the company’s website at investors.novozymes.com
Slide 2: Table of content / Disclaimer
Roadshow presentation Table of content Disclaimer This presentation and its related comments contain forward-looking statements, including 3 Latest results statements about future events, future financial performance, plans, strategies and expectations. Forward-looking statements are associated with
Slide 3: Full-year upgrade from October 7 confirmed by a strong start to Q4
Full-year upgrade from October 7 confirmed by a strong start to Q4 Sales and financial performance • Organic 9M sales growth y/y: 9% (Q3 y/y: 6%). Reported DKK sales growth: 17% (Q3 y/y: 2022 2022 16%). outlook outlook • Broad-based and strong performance across the business. Slightly positive prici
Slide 4: Household Care
Household Care Performance in line with expectations 2022 expectations • Organic 9M sales growth y/y: 0% (Q3 y/y: -1%). • Growth will be driven by penetration in emerging markets, primarily within the laundry category. • Growth driven by emerging markets, from both Latin America and Asia Pacific and
Slide 5: Food, Beverages & Human Health
Food, Beverages & Human Health 2022 expectations Solid performance with broad-based growth • Organic sales growth outlook is maintained in the ‘low • Organic 9M sales growth y/y: 8% (Q3 y/y: 2%). teens’ and expected to be driven by all segments with strong growth in the fourth quarter. • Growth in F
Slide 6: Bioenergy
Bioenergy Strong performance across applications and regions 2022 expectations • Organic 9M sales growth y/y: 26% (Q3 y/y: 32%). • Full-year organic sales growth indication raised from ‘mid-teens’ to ‘high-teens’. • Growth mainly driven by innovation in North America, supported by recovering U.S. et
Slide 7: Grain & Tech Processing
Grain & Tech Processing Strong performance led by Grain 2022 expectations • Organic 9M sales growth y/y: 11% (Q3 y/y: 7%). • Growth in Grain led mainly by strong underlying end-market demand, market penetration in • Double-digit growth in Grain driven strong underlying end- vegetable oil processing
Slide 8: Agriculture, Animal Health & Nutrition
Agriculture, Animal Health & Nutrition Solid 9M performance driven by Animal Health & Nutrition 2022 expectations • Organic 9M sales growth y/y: 7% (Q3 y/y: -7%). • Growth in Animal Health & Nutrition will primarily be driven by innovation and solid end-market • Performance was solid and driven by s
Slide 9: Financial results 9M
Financial results 9M • Organic sales growth 9M y/y: 9%; DKK sales 17% y/y. • Gross margin at 54.9%; 3.3pp lower than last year due to higher input, energy and logistics costs as well as less favorable Q3 product mix due to timing, partly mitigated by productivity improvements, operational leverage a
Slide 10: Financial outlook 2022
Financial outlook 2022 • Strong start to Q4 confirms full-year outlook of 8-9% organic sales growth with an additional 9% in Danish kroner. Pricing and better mix becoming a stronger component in the fourth quarter. • EBIT margin outlook maintained at 26% to 27%, including the non-cash accounting ga
Slide 11: Summary
Summary Strong start to Q4 confirms full-year outlook. Capitalizing on additional growth opportunities • Strong and broad-based growth with performance upgrades throughout the year, capitalizing on additional growth opportunities when they arise. • Pricing to become a stronger contributor in Q4 and
Slide 12: Equity story
Equity story Welcome to the world´s leading biotech powerhouse
Slide 13: It starts with a purpose
It starts with What if… a purpose 10% 3% 10% of the world’s detergents were of all liquid of chemical animal protein was replaced biobased transportation pesticides were fuels were replaced with with alternative biobased biologicals protein then… 700 million tons 5 million tons 300 million tons 250
Slide 14: A world of opportunities
A world of opportunities Global market for chemicals, food and DKK ~100 bn health ingredients, Current feed additives, etc. addressable market for biotech DKK ~100 billion ~90% ~10% Alternative of sales of sales proteins Enzymes are… Microbes are… Novozymes … proteins that catalyze chemical … living
Slide 15: The ability to adjust is what shapes our future
The ability to adjust is what shapes our future DKKm 30% 16,000 Sales (right axis) Household Agriculture, 28% Animal Health & Care Organic sales performance 32% Nutrition 26% EBIT margin 14,000 12% 24% R&D/Sales ROIC Grain & Tech 22% 12,000 Processing 2021 sales 20% 15% 18% 10,000 16% Bioenergy Food
Slide 16: Uniquely diversified group creating synergies and opportunities
Uniquely diversified group creating synergies and opportunities We launch technologies in five main business areas Household Care Food, Beverages & Bioenergy Grain & Tech Processing Agriculture, Animal Human Health Health & Nutrition 32% of 2021 sales 23% of 2021 sales 18% of 2021 sales 15% of 2021
Slide 17: World leader in industrial enzymes and microbes across the value chain
World leader in industrial enzymes and microbes across the value chain We are uniquely positioned to drive innovation opportunities Innovation leadership Best-in-class production Diversified global presence • Strong R&D organization and broad technology • Cutting-edge protein engineering improves •
Slide 18: Turning amazing science into sustainable biological solutions
Novozymes is about turning amazing science into sustainable biological solutions… R&D is a cornerstone of Novozymes Sustainability and Superior performance Balanced customer-approach to chemical replacement and customer value new product launches • Novozymes has always been and continues to be at th
Slide 19: …and we are still learning to be even better
…and we are still learning to be even better Reshaping of R&D to focus on topline growth Putting customer centricity at the heart of our innovation Higher More resources for efficiency product development Learn Design ~50 Test Build ~80 ~100 % Customer interaction Active R&D resource pipeline projec
Slide 20: Unique technology sets Novozymes apart
Unique technology sets Novozymes apart We re-invest ~ 13% of sales into R&D projects for product innovation and productivity improvement Product innovation Process innovation Technology development Raw materials Micro-organisms Industrial-scale fermentation Consumer needs 1. Improve production Produ
Slide 21: Delivering sustainability impact through our products
Delivering sustainability impact through our products We are reducing CO2 emissions together with our customers Enabling a low carbon future In 2021, we saved 60 million tonnes of CO2 Detergent Animal feed Textile by enabling low carbon fuels in the 100 kg CO2 130 kg CO2 350 kg CO2 transport sector.
Slide 22: Unlocking growth - powered by biotechnology
Unlocking growth - powered by biotechnology Guiding the way to 2025 and act as the foundation for our 2030 ambition 22
Slide 23: x2030 Doubling sales … sustainably
2030 ambition x2030 Doubling sales … sustainably Accelerate Transform Enable towards a climate- food systems healthier lives neutral society 23
Slide 24: Financials & ESG
Financials & ESG x2030 Doubling sales … sustainably
Slide 25: Performance highlights 2021 Nonfinancial
Performance highlights 2021 Nonfinancial 68% Renewable Electricity sources 32% Non-renewable 98% Recovered Waste destination 2% Not recovered 34% Recovered Gender diversity in senior management 66% Not recovered 25
Slide 26: Historical performance demonstrates delivery track record
Historical performance demonstrates delivery track record Organic sales EBIT NWC DKKbn Sales performance performance DKKbn EBIT margin margin DKKbn Net working capital /Sales 20 20% 7 EBIT margin EBIT 40% 7 30% Organic sales performance NWC/Sales NWC Sales 6 6 24% 24% 25% 23% 15 5 27% 28% 28% 28% 28
Slide 27: Sales by geography
Sales by geography Europe, the North Asia Latin % Middle America Pacific America East & Africa 36 Emerging markets Developed markets 38% 31% 20% 11% of 2021 sales of 2021 sales of 2021 sales of 2021 sales 64 27
Slide 28: ESG – Environment: Ambitious actions
Environment: Ambitious actions ESG We are committed to improve our footprint 60% Sales In waste 50% 99% Gross Profit 40% Water In climate change Energy 30% CO2 emissions of our biomass 42% Change since 2010 20% volume was 10% handled in a reduction of CO2 circular set-up emissions compared 0% (recyc
Slide 29: ESG – Social: Zymers and society
Social: Zymers and society ESG We are investing in a workplace where Zymers can stay safe, thrive and grow 7.5 3% 7.0 Employee absence (right axis) In Zymer spirit 82 Injuries per million working hours 6.5 6.0 In senior 5.5 management 5.0 2% points was achieved in 34% 4.5 4.0 employee 3.5 satisfacti
Slide 30: ESG – Governance: Proactive and transparent
Governance: Proactive and transparent ESG We ensure responsible business conduct and long-term value creation Strong oversight of sustainability Non-financial targets are integrated into Our strong ESG performance is endorsed performance across Novozymes our long-term incentive programs by rating ag
Slide 31: Foundation ownership advocates long-term focus
Foundation ownership advocates long-term focus Purpose of the Novo Nordisk Foundation Structure and ownership The Novo Nordisk Foundation is an independent Danish foundation with corporate interests. The objective of the Novo Nordisk Foundation is twofold: • Provide a stable base for the companies w
Slide 32: Shareholder distribution and dividend payouts
Shareholder distribution and dividend payouts DKK ~27.7bn returned to shareholders since 2012 As of December 2021 All B shares listed in Copenhagen under the symbol ‘NZYM B’ and all A share capital and • Novo Holdings held 25.5% of the share capital and controlled 72.6% of votes (all 18,166,400 B sh
Slide 33: Unlocking growth - to drive shareholder value
Unlocking growth - to drive shareholder value Business Zymers & society Operations Organic sales CAGR Include Climate 5% or higher until 2025 An inclusive and diverse workforce 50% reduction in absolute CO2 emissions from operations and supply EBIT margin Achieve gender balance across all chain by 2
Slide 34: Consumer Biosolutions
Consumer Biosolutions Helping customers meet consumer demand through biological solutions
Slide 35: Household Care
Household Care Sales split The value we create 32% of 2021 sales Home Care & Professional ~20% ~80% Laundry Eliminate Save energy, harsh chemicals water, time Sales composition Automatic Laundry dishwash Remove stains, Preserve fabric SDG impact boost whiteness texture, color Hand Professional dishw
Slide 36: Overview Household Care
Overview Household Care Key trends Growth drivers • Higher enzyme inclusion and innovation addressing key consumer concerns e.g. improved wash Increasing demand for 32% performance also at low temperatures, improve sustainability profile and enabling optimized formulations solutions that enable of 2
Slide 37: Growth driver Enzyme inclusion
Growth driver Enzyme inclusion We see large potential for future enzyme inclusion, especially in emerging markets Big potential in emerging markets Sales Detergent Enzyme representation volume* penetration** ~4x ~1/6 DM EM DM EM +50% commercial FTEs recruited in emerging markets since 2019 * Total g
Slide 38: Growth driver Freshness platform
Growth driver Freshness platform Lifestyle changes are spurring demand for freshness, and we are on track to deliver around 1bn DKK New dimension of “clean” Consumers ask for new solutions Novozymes Freshness Washed without Novozymes’ technology Experience issues with re- 65% occurring odor from swe
Slide 39: Growth driver Detergent compaction and sustainability
Growth driver Detergent compaction and sustainability Most ingredients in We believe enzymes can contribute even more to detergents and to compaction laundry detergents are fossil-based. Actually, only less than Raw material costs* Plastic 15%** Plastics used for the of detergent raw detergent packa
Slide 40: Food, Beverages & Human Health
Food, Beverages & Human Health Sales split The value we create 23% of 2021 sales Human Health ~15% ~65% Food ~20% Beverages Health, safety Optimize raw material and sustainability use Sales composition Baking Food & protein Freshness Meet demand for new SDG impact and taste product claims Beverages
Slide 41: Overview Food, Beverages & Human Health
Overview Food, Beverages & Human Health Key trends Growth drivers • Demand for better and more convenient food with awareness about food safety and “naturally Increasing demand for plant-based 23% healthy” products • Increasing demand for vegetable proteins foods & beverages due to health of 2021 sa
Slide 42: Growth driver Taste, texture and nutrition
Capital Markets Day 2021 │ Food, Beverages & Human Health Growth driver Taste, texture and nutrition Taste, texture and nutrition of plant-based alternatives need to improve Barriers for consumer adoption of Improving plant-based plant-based meat and dairy alternatives products with biology Taste an
Slide 43: Growth driver Human health
Growth driver Human health Innovative solutions that can be proven to solve profound consumer health challenges Metabolic & Cardio Health Cognitive Health Innovate in Geographical Oral & Skin Health consumer expansion healthcare Gastro-Intestinal Health Protective & Immune Health Multichannel strate
Slide 44: Growth driver Advanced protein solutions
Growth driver Advanced protein solutions Consumers are actively looking to replace animal-based proteins due to both health and sustainability Global plant-based retail market size 15-20% CAGR, 2020-2030 162 Scale-up & 26 commercialization of Other fermentation Plant-based meat Plant-based dairy Pro
Slide 45: Growth driver Customer Co-Creation Platform
Capital Markets Day 2021 │ Food, Beverages & Human Health Growth driver Customer Co-Creation Platform Using our Customer Co-Creation Platform as a growth accelerator to strengthen capabilities for Food & Health Customer Co-Creation Platform Novozymes Customers & partners Consumer Biosolutions Applic
Slide 46: Agriculture & Industrial Biosolutions
Capital Markets Day 2021 │ Agriculture & Industrial Biosolutions Agriculture & Industrial Biosolutions Helping customers boost performance and differentiate through biological solutions
Slide 47: Bioenergy
Bioenergy Sales split The value we create 18% of group sales North America ~75% Europe & Asia Pacific ~15% ~10% Latin America Yield improvement Reduced chemical spend Sales composition Biomass Biodiesel conversion Eliminate operation Superior viscosity SDG impact stress reduction Conventional biofue
Slide 48: Overview Bioenergy
Overview Bioenergy Key trends Growth drivers • Increased use of alternative fuels 18% • Innovation for yield enhancement and chemical cost reduction remains a strong differentiator • Demand for reducing CO2 emissions in transport of 2021 sales sector Increasing push for clean energy solutions +2% Gr
Slide 49: Growth driver Sustainable transportation
Growth driver Sustainable transportation Global demand for more sustainable transportation is increasing Regional starch-based ethanol volume estimates Global starch-based ethanol volume estimates 1.8 BGY EU BGY Estimate to 30 2025 low-single Low growth CAGR digit decline 25 20 15.9 BGY 15 North Ame
Slide 50: Growth driver Diversifying industry
Growth driver Diversifying industry Additional opportunities as the industry continues to diversify Today Tomorrow Future More to go for in optimizing Diversification into new value Adjacent opportunities for plant performance streams beginning to emerge sustainable energy (beyond 2025) 50
Slide 51: Growth driver Sustainable diesel production
Growth driver Sustainable diesel production Sustainable diesel production has significant potential with increased adaptation of biotechnology Feedstocks Fuel types End markets Global volume estimates BGY 30 Renewable diesel (HVO) Renewable diesel Drop in alternative to Biodiesel 22 Vegetable oils d
Slide 52: Grain & Tech Processing
Grain & Tech Processing Sales split The value we create 15% of group sales Tech ~30% ~70% Grain Productivity New substrate and yield streams Sales composition Improve the strength of Longer-lasting and more your fabric sustainable textiles Grain milling & Water Distilling starch processing SDG impac
Slide 53: Overview Grain & Tech Processing
Overview Grain & Tech Processing Key trends Growth drivers • Demand for optimization of grain processes. Consumers pushing 15% • Consumer demand for improved textile quality and longevity drives focus on sustainability in textiles. • Demand for wastewater solutions due to increasing increased sustai
Slide 54: Growth driver The grain value chain
Growth driver The grain value chain Novozymes offers multiple solutions across the value chain • Optimization is key in the grain value chain, and Process Yield this is what enzymes contribute with. optimization • Enzymes can be added across the value chain and Sustainability help increase the outpu
Slide 55: Growth driver Vegetable oil processing
Growth driver Vegetable oil processing Enzymatic applications for vegetable oil processing has vast potential New agro-processing applications • Novozymes offers multiple solutions across the value chain (i.e., from higher yields in oil extraction & refining to transformation of oils & fats into spe
Slide 56: Agriculture, Animal Health & Nutrition
The value we create??? Agriculture, Animal Health & Nutrition Sales split 13% of The value we create group sales Agriculture ~35% ~65% Animal Health & Nutrition Powerful Bioyield protection enhancement Sales composition Animal Improve feed and Improve animal BioAgriculture gut functionality gut heal
Slide 57: Overview Agriculture, Animal Health & Nutrition
Overview Agriculture, Animal Health & Nutrition Key trends Growth drivers • Governments in emerging economies focusing on agriculture productivity Farmers increasingly need to 13% • Increased demand for alternatives to chemical pesticides and fertilizers enhance crop yields and support of 2021 sales
Slide 58: Growth driver Potential in Ag biologicals
Capital Markets Day 2021 │ Agriculture, Animal Health & Nutrition Growth driver Potential in Ag biologicals Capturing high growth potential in Ag biologicals High value crops Agriculture inputs* USD ~300 billion, 1-2% CAGR Organic farming Fertilizers 190 Crop protection 61 6 67 Seed & traits 37 Chem
Slide 59: Growth driver Strong partnering model
Capital Markets Day 2021 │ Agriculture, Animal Health & Nutrition Growth driver Strong partnering model Strong partnering model combined with a new direct go-to-market model R&D partnerships Commercial partnerships Commercial and innovation partnership, including in upstream corn BioYield Commercial
Slide 60: Growth driver Animal health
Capital Markets Day 2021 │ Agriculture, Animal Health & Nutrition Growth driver Animal health Leveraging strong position in Nutrition into the higher growth area of Animal Health Partnerships Animal Nutrition & Health Market* Technology USD ~50 billion, CAGR 3-4% Estimated CAGR ’20-’25E synergies Pa
Slide 61: Growth driver Strong feed enzymes alliance with DSM
Capital Markets Day 2021 │ Agriculture, Animal Health & Nutrition Growth driver Strong feed enzymes alliance with DSM Increasing focus on animal health solutions complementing strong feed enzymes alliance with DSM R&D partnerships Commercial partnerships Microbes Health Enzymes Á Nutrition Enzymes 6
Slide 62: Exploring new areas
Exploring new areas Bold and ambitious in the pursuit of new opportunities
Slide 63: Exploring new ventures to identify growth platforms of the future
Exploring new ventures to identify the most viable and significant growth platforms of the future Enable healthier lives Focus on opportunities addressing our core sustainability commitments Sales potential of at least DKK 500-1,000 million Accelerate towards a Transform Material sales potential in
Slide 64: More sustainable carbon capture with enzymes
More sustainable carbon capture with enzymes Together with Saipem, Novozymes offers a more sustainable carbon capture solution The biggest issue of global warming is the Carbon capture is filtering CO2 out of Novozymes has teamed up with emissions of greenhouse gasses. Saipem to offer a game-changin
Slide 65: Technical process of enzymatic carbon capture
Technical process of enzymatic carbon capture Technical process and comparison to the conventional amine solution Solvent including Solvent and enzyme Waste solvent enzyme No special wastewater treatment is required Non-toxic salt solvent Captured CO2 and enzymes replacing Flue gas without CO2 for s
Slide 66: Step-change in plastic recyclability by applying enzymes and microbial science
Opportunity to drive a step-change in plastic recyclability by applying enzymes and microbial science Market Polymer Use enzymes to increase recyclability of modification 53 million tons of PET bottles and fibers currently sent to incineration or landfill Polymer Technology recycling Opportunity for
Slide 67: Biological alternatives to synthetic fertilizers
Opportunity to reduce environmental impact using biological alternatives to synthetic fertilizers Market Replace a fraction of the >100 bn USD nitrogen fertilizer market used to feed over half the world’s population Biological solution that is non-pollutant to water quality and marine wildlife Techn
Slide 68: Contact Our investor relations team
Contact Our investor relations team Further investor relations information is available from the company’s website at investors.novozymes.com Tobias Björklund Ludmila Cebanov Naja Wivel Head of Investor relations IR officer Coordinator +45 3077 8682 +45 3077 2076 tobb@novozymes.com ldnv@novozymes.co