Novonesis A/s Class B · OMXCOP:NSIS_B
Novonesis A/s Class B — Novozymes — Q1 2022 Earnings Presentation
68 slides from Novonesis A/s Class B's earnings presentation, 2022
Slide 1: Roadshow presentation Q1 2022
Roadshow presentation Qi 2022 j Releasedig on pen Eh 12022) he company’s website at investors.novozymes.com _ my
Slide 2: Table of content and Disclaimer
Roadshow presentation Table of content Latest results Equity story Financials & ESG Consumer Biosolutions Agriculture & Industrial Biosolutions Exploring new areas Disclaimer re) This presentation and its related comments contain forward-looking statements, including statements about future events,
Slide 3: Q1 2022 sales growth by business area
• • • • • • • 27% 18% • 12% slightly more than 1 percentage points for the full year, especially in HHC. 10% 8% • • • -4% • •
Slide 4: Household Care 28% of sales
Household Care First-quarter performance much in line with expectations 2022 expectations • Organic Q1 sales performance y/y: -4%. • Sales driven by increased enzymatic penetration in emerging markets and a softer performance in developed • Much in line with expectations and impacted by lower Europe
Slide 5: Food, Beverages & Human Health 25% of sales
Food, Beverages & Human Health Strong growth across most subareas, especially in food and partly 2022 expectations explained by timing • Growth in Food and in Beverages will be driven by market • Organic Q1 sales growth y/y: 18%. penetration, health-focused solutions as well as raw material optimiza
Slide 6: Bioenergy 18% of sales
Bioenergy Strong growth on the back of continued strong year-on-year 2022 expectations development in U.S. ethanol production • Growth driven by continued recovery of U.S. ethanol • Organic Q1 sales growth y/y: 27%. production, innovation, capacity expansion in Latin America, and biodiesel. • Strong
Slide 7: Grain & Tech Processing 16% of sales
Grain & Tech Processing Growth driven by strong performance in Grain 2022 expectations • Organic Q1 sales growth y/y: 8%. • Growth in Grain mainly led by market penetration in vegetable oil processing and innovation in starch. • Growth across all Grain application areas. Innovation and favorable mar
Slide 8: Agriculture, Animal Health & Nutrition 13% of sales
Agriculture, Animal Health & Nutrition Growth led by strong performance in Animal Health & Nutrition 2022 expectations • Organic Q1 sales growth y/y: 12%. • Innovation and new more diversified commercial model are key enablers of double-digit growth in Agriculture. • Strong growth in Animal Health &
Slide 9: Financial results - Q1
Financial results - Q1 Solid financial performance despite significant headwinds from higher input and logistics costs * Organic sales growth y/y: 10%; DKK sales 16% y/y. * Gross margin at 55.5%; 2.7pp lower than last year due to higher input and logistics costs. + EBIT margin at 26.1%; 3.5pp below
Slide 10: Financial outlook 2022
Financial outlook 2022 2022 outlook • Organic sales growth increased from 3-7% to 4-8% despite negative impact from the war in Ukraine. Sales in Danish kroner around 6 percentage points higher than the organic sales growth outlook. • EBIT margin of 25-26%. • ROIC incl. goodwill of 16-17%. • Free cas
Slide 11: Summary
Summary Strong start to the year. Increased full-year outlook for organic sales growth. • Very satisfactory 10% organic growth with three out of five business areas growing double-digits. • Solid financials despite headwinds from higher input and logistics costs. • Increased full-year outlook for or
Slide 12: Equity story
Equity story Welcome to the world´s leading biotech powerhouse
Slide 13: It starts with a purpose
It starts with a purpose B 10% of the world’s animal protein was replaced with alternative protein v 700 million tons of CO, avoided and 900,000 km? of agricultural land saved equivalent to 50% of EU’s agricultural area OE What if... 3% detergents were of all liquid biobased transportation fuels wer
Slide 14: A world of opportunities
A world of opportunities Current addressable market for biotech DKK ~100 billion ~90% Alternative of sales proteins of sales f Enzymes are... .» proteins that catalyze chemical reactions and thus often replace chemicals in products and industrial productions Specific Fast Catalytic Novozymes today M
Slide 15: The ability to adjust is what shapes our future
The ability to adjust is what shapes our future DKKm 30% 16,000 28% WS Sales (right axis) Agriculture, Household —= Organic sales performance Animal Heath & Sox 26% | — EBIT margin 14,000 sition 24% |— R&D/Sales 22% 4 ROIC 42,000 Grain & Tech Processing 20% 15% 18% 10,000 16% . Food, 14% 8,000 Bioen
Slide 16: Business areas overview
Grain & Tech Processing Agriculture, Animal Health & Nutrition Laundry Baking Conventional biofuels Grain milling & starch processing BioAgriculture Automatic dishwash Food & protein Biomass conversion Distilling Animal health Hand dishwash Beverages Biodiesel Vegetable oil processing Animal nutriti
Slide 17: The world's largest producer of fermented proteins
• • • • • • Increased pipeline selectivity to accelerate time to The world’s largest producer of fermented proteins. market from ~5 years to ~3 years Efficiency gain have doubled the available capacity 17
Slide 18: Non-public Public
• 20 20 • 18 18 17 • 14 13 2015 2016 2017 2018 2019 2020 2021 Non-public Public 18
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 AD Gp Gre Customer interaction Higher More resources for efficiency product development Active R&D resource pipeline projects allocation + (OD = (4 ion
Slide 20: Raw materials, micro-organisms, fermentation
Raw materials Micro-organisms • • • • Fermentation • • Purification Formulation • • • 20
Slide 21: Delivering sustainability impact through our products
Delivering sustainability impact through our products We are reducing CO, emissions together with our customers ra) Detergent 100 kg CO, per ton of laundry Oly Agriculture 15 kg CO, per ton of corn ©) Vegetable oil 44 kg CO, per ton of oil 3° oe Animal feed 130 kg CO, per 1000 chicken iG Beverage 25
Slide 22: Unlocking growth - powered by biotechnology
2 Unlocking growth - powered by biotechnology Guiding the way to 2025 and act as the foundation for our 2030 ambition Explore new options for growth Expand BioHealth & Human Nutrition Evolve our core business In this growth pillar, we find the areas where we cur- rently see most of our sales, such a
Slide 23: Accelerate
Accelerate towards a climate- e- neutral society @ A LEE, ine, - ambition y jubling sales +. sustainably Transform Enable food systems healthier lives * novozymes’
Slide 24: Financials & ESG
Financials & ESG x2 Doubling sales ... suStainably x Rethink Tomorrow nhovozymes"
Slide 25: Nonfinancial
Nonfinancial Electricity sources Renewable Non-renewable Waste destination Recovered Not recovered Gender diversity in senior management Recovered Not recovered 25
Slide 26: Historical performance demonstrates delivery track record
26 Historical performance demonstrates delivery track record Organic sales O&Kon Sales performance performance 20 — organic sales pertormance 20% Im Soles 45 7% 7% 10% 40 Le 0% 5 0 10% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2024 FCF be kon vs 7 Free cash flow before acquisitions — FCF before g
Slide 27: Sales by geography
27 Sales by geography Europe, the Middle East & Africa 38% of 2021 sales Full year organic sales grew 2% com pared to the previous year with a ‘trong performance in Food, Beverages ‘& Human Health while Household Care, Agriculture and Animal Health & Nutrition was soft 31% of 2021 sales Full-year or
Slide 28: ESG
ESG 60% Sales 50% Gross Profit Water 40% Energy 30% CO2 emissions Change since 2010 20% 10% CO2 0% -10% -20% -30% -40% -50% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 ✓ ✓ ✓ ✓ 28
Slide 29: ESG
ESG 7.5 3% Employee absence (right axis) 7.0 Injuries per million working hours 6.5 6.0 5.5 5.0 2% 4.5 4.0 3.5 3.0 2.5 1% 2.0 1.5 1.0 0.5 0.0 0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 ✓ ✓ ✓ ✓ 29
Slide 30: ESG
ESG Non-financial 20% AAA rating (2021) ESG rating: Low Risk (2021) A- (Climate Change 2021) Organic B (Water Security 2021) 40% sales growth 20% ROIC Constituent of FTSE4Good and Recognized among the top 1% for our Ethibel Sustainability Indices sustainability performance on Ecovadis 20% EBIT margi
Slide 31: Share structure
• • 240 220 200 180 millions 160 140 Foundation Treasury 120 Free-float 100 80 60 40 20 0 A shares B shares 31
Slide 32: Buyback Dividend Payout ratio
• • Buyback Dividend Payout ratio (right axis) DKKbn 7 60% 4% 52% 55% 6 49% 26% 47% 50% 21% 45% 42% 45% 5 39% 37% 38% 40% 36% 34% 4 35% 3.4 3.5 3.2 3.3 30% 2.9 3.1 3.0 3.0 3 25% 17% 2.0 2.0 2.0 2.0 1.5 1.5 20% 2 2.0 2.0 32% 1.5 15% 0.8 0.8 10% 1 1.2 1.3 1.4 1.5 1.5 1.5* Denmark Rest of Europe Rest o
Slide 33: Unlocking growth - to drive shareholder value
33 Unlocking growth - to drive shareholder value Business Zymers & society Operations Organic sales CAGR 5% or higher until 2025 EBIT margin 26% or higher by 2025 ROIC incl. goodwill 20% or higher by 2025 Model assumptions Net working capital/sales: improving as % of sales Net investments/sales: ~10
Slide 34: Consumer Biosolutions
Consumer Biosolutions Helping customers meet consumer demand through biological solutions sgrethink ics
Slide 35: Household Care
Household Care Sales split Home Care & Professional Laundry Sales composition Laundey Hand Professional dishwash cleaning Automatic dishwash 35 The value we create Eliminate Save energy, harsh chemicals water, time Remove stains, Preserve fabric boost whiteness texture, color EMOTE Main o AND aNTATO
Slide 36: 5Y average organic sales performance
• • +1% • 5Y average organic sales performance Organic sales DKKbn performance 5.0 10% 4.9 4.8 4.8 9% • 4.7 4.6 8% 7% 4.5 6% • 5% 5% 4% 3% • 4.0 2% 1% 1% 1% 0% 0% • -1% 3.5 -1% 2017 2018 2019 2020 2021 36
Slide 37: Growth driver Enzyme inclusion
37 Growth driver Enzyme inclusion We see large potential for future enzyme inclusion, especially in emerging markets Big potential in emerging markets Detergent Enzyme volume* penetration** DM EM DM EM * Total global detergent volume, The figures include both enzymatic and nomenzymatic detergent * N
Slide 38: Growth driver Freshness platform
38 Wash performance Growth Criver Freshness platform Lifestyle changes are spurring demand for freshness, and we are on track to deliver around 1bn DKK New dimension of “clean” a Freshness fe? Fabric {sb Stain removal 1960's Today Consumers ask for new solutions Experience issues with re- occurring
Slide 39: Growth driver Detergent compaction and sustainability
Growth driver Detergent compaction and sustainability We believe enzymes can contribute even more to detergents and to compaction Most ingredients in laundry detergents are fossil-based. Actually, only less than Raw material costs" 15%" Plastic Plastics used for the jetergent packaging of detergent
Slide 40: Food, Beverages & Human Health
Food, Beverages & Human Health 40
Slide 41: 5Y average organic sales performance
• • • +6% • 5Y average organic sales performance • Organic sales DKKbn performance 14% 4 14% 12% 3.5 10% • 8% 8% 3 6% • 4% 2.7 2.8 2.6 3% 4% 2.6 2% 1% • 0% 2 -2% 2017 2018 2019 2020 2021 • 41
Slide 42: Capital Markets Day 2021 Food, Beverages & Human Health
Capital Markets Day 2021 │ Food, Beverages & Human Health 42
Slide 43: Growth driver Human health
Growth driver Human health 43
Slide 44: Growth driver Advanced protein solutions
Growth driver Advanced protein solutions 44
Slide 45: Capital Markets Day 2021 Food, Beverages & Human Health
Capital Markets Day 2021 │ Food, Beverages & Human Health 45
Slide 46: Capital Markets Day 2021 Agriculture & Industrial Biosolutions
Capital Markets Day 2021 │ Agriculture & Industrial Biosolutions
Slide 47: Bioenergy
Bioenergy | lit Sales sp fea group Xe 75% North America Europe & Asia Pacific Latin America Sales composition Biomass Biodiesel A conversion iE Conventional biofuels a7 The value we create (Re Yield improvement rim Eliminate operation stress Reduced chemical spend fons) [Cate fo) Superior viscosity
Slide 48: Overview Bioenergy
Overview Bioenergy Key trends • • • +2% 5Y average organic • sales performance Organic sales DKKbn performance • 3.0 15% 2.9 2.9 11% 11% • 10% 2.8 2.8 2.7 2.7 5% • 2.7 0% 2.6 0% -3% 2.5 2.5 -5% 2.4 -9% 2.3 -10% 2017 2018 2019 2020 2021
Slide 49: Growth driver Sustainable transportation
Growth driver Sustainable transportation Global demand for more sustainable transportation is increasing Global starch-based ethanol volume estimates Regional starch-based ethanol volume estimates 1.8 BGY EU ao. Estimate to 2025 low-single Low growth CAGR digit decline . 25 15.9 BGY North America Es
Slide 50: Growth driver Diversifying industry
Growth driver Diversifying industry Additional opportunities as the industry continues to diversify a) Today Tomorrow Future e e ————- e More to go for in optimizing ww) Diversification into new value eo) Adjacent opportunities for plant performance sustainable energy (beyond 2025) streams beginning
Slide 51: Source: LMC Global Biodiesel Outlook report, 2020
Source: LMC Global Biodiesel Outlook report, 2020 51
Slide 52: Grain & Tech Processing
Grain & Tech Processing Sales split Sales composition Grain milling & Wieser starch processing Distilling Textile, Leather Vegetable oil processing and Forrest 52 The value we create 2 Productivity New substrate and yield streams Improve the strength of Longerlasting and more your fabric sustainable
Slide 53: Overview Grain & Tech Processing
Overview Grain & Tech Processing Key trends • • • +2% 5Y average organic • sales performance Organic sales DKKbn performance • 2.5 2.5 13% 15% 2.4 • 2.3 2.3 10% 7% 2.2 2.2 2.1 5% 2.1 2% 2.0 2.0 -1% 0% 1.9 1.8 -5% 1.7 -9% 1.6 -10% 2017 2018 2019 2020 2021
Slide 54: Optimization is key in the grain value chain
• Optimization is key in the grain value chain, and this is what enzymes contribute with. • Enzymes can be added across the value chain and help increase the output. • This is both more cost efficient and sustainable, as we can help our customers create more with less
Slide 55: New agro-processing applications
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 specialty products for Food, HPC and industrial applications). • Improving efficiency (process optimization and y
Slide 56: Agriculture, Animal Health & Nutrition
The value we create??? Agriculture, Animal Health & Nutrition 56
Slide 57: 5Y average organic sales performance
• • • 0% • 5Y average organic sales performance Organic sales DKKbn performance 3% 2.4 3% • 2.3 2% 1% 2.2 1% 2.1 0% • 2.1 2.0 0% 2.0 -1% 1.9 1.9 -2% • 1.8 -3% 1.8 1.8 -3% 1.7 -4% -5% 1.6 -5% 2017 2018 2019 2020 2021
Slide 58: Capital Markets Day 2021 Agriculture, Animal Health & Nutrition
Capital Markets Day 2021 │ Agriculture, Animal Health & Nutrition 58
Slide 59: Capital Markets Day 2021 Agriculture, Animal Health & Nutrition
Capital Markets Day 2021 │ Agriculture, Animal Health & Nutrition 59
Slide 60: Capital Markets Day 2021 Agriculture, Animal Health & Nutrition
Capital Markets Day 2021 │ Agriculture, Animal Health & Nutrition 60
Slide 61: Capital Markets Day 2021 Agriculture, Animal Health & Nutrition
Capital Markets Day 2021 │ Agriculture, Animal Health & Nutrition 61
Slide 62: Exploring new areas
Exploring new areas Bold and ambitious in the pursuit of new opportunities } _ x novozymes: Rethink Tomorrow
Slide 63: Explore venture projects not expected to contribute to sales
*Explore venture projects are not expected to contribute to sales in the five year strategy period 63
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 emissions of greenhouse gasses. The ambition of the Paris Climate ed Agreement is to limit global warming to * 1.5 °C by reaching
Slide 65: Solvent including enzyme
Solvent including Solvent and enzyme Waste solvent enzyme Captured CO2 Flue gas without CO2 for storage or further usage Heat strips the CO2 is absorbed and solvent from the CO2 bound to solvent e 80 ºC ℃ ℃ , solvent and enzyme
Slide 66: Opportunity to drive a step-change in plastic recyclability
66 Opportunity to drive a step-change in plastic recyclability by applying enzymes and microbial science Market v_ Use enzymes to increase recyclability of 53 million tons of PET bottles and fibers currently sent to incineration or landfill Technology Vv Opportunity for Novozymes to explore sustaina
Slide 67: Opportunity to reduce environmental impact using biological alternatives to synthetic fertilizers
Opportunity to reduce environmental impact using biological alternatives to synthetic fertilizers Market v_ Replace a fraction of the >100 bn USD nitrogen fertilizer market used to feed Today over half the world’s population Future V_ Biological solution that is non-pollutant to water quality and ma
Slide 68: Our investor relations team
68 Our investor relations team Further investor relations information is available from the company’s website at investors.novozymes.com ‘Cart Ahigren Naja Wivel IR officer (US) Coordinator +1919 702 6144 +45 3077 2076 ox mes.com nwv@novozymes.com novozymes" *&