Novonesis A/s Class B · OMXCOP:NSIS_B
Novonesis A/s Class B — Novozymes — Non-Deal Roadshow (February 2022)
69 slides from Novonesis A/s Class B's roadshow presentation, Feb 1, 2022
Slide 1: Roadshow presentation FY 2021
Roadshow presentation FY 2021 Released on February 1, 2022 Further investor relations information is available from the company’s website at investors.novozymes.com
Slide 2: Table of content
Roadshow presentation Table of content 4 Latest results 14 Equity story 26 Financials & ESG 36 Consumer Biosolutions 48 Agriculture & Industrial Biosolutions 64 Exploring new areas 2
Slide 3: Forward Looking Statement
Disclaimer Forward Looking Statement This presentation and its related comments contain forward-looking statements, including statements about future events, future financial performance, plans, strategies and expectations. Forward-looking statements are associated with words such as, but not limite
Slide 4: Highlights
Highlights Strong overall performance in 2021 Initial 2021 Latest 2021 Realized 2022 • Organic 12M sales growth y/y: 6% (Q4 y/y: 7%). outlook outlook 12M 2021 outlook • Double-digit growth in three out of five business areas demonstrates the strength of a Sales performance, organic % 2 to 6 5 to 6 6
Slide 5: Household Care
Household Care Solid performance in Emerging Markets and with Freshness; slight 2022 perspectives decline overall against tough COVID-19 impacted comparator • Growth driven by increased penetration in emerging • Organic 12M sales growth y/y: -1% (Q4 y/y: -3%). markets, Freshness, professional & medi
Slide 6: Food, Beverages & Human Health
Food, Beverages & Human Health Strong performance with all subareas growing double digits 2022 perspectives • Organic 12M sales growth y/y: 14% (Q4 y/y: 13%). • Growth in Food driven by market penetration, health- • Food; mainly driven by market penetration and strong demand focused solutions as wel
Slide 7: Bioenergy
Bioenergy Strong growth on the back of U.S. recovery 2022 perspectives • Organic 12M sales growth y/y: 11% (Q4 y/y: 10%). • Growth driven by continued recovery of U.S. ethanol • Strong 12M performance driven by recovery of U.S. ethanol production, innovation, capacity expansion in Latin production,
Slide 8: Grain & Tech Processing
Grain & Tech Processing Strong performance based on growth across subareas 2022 perspectives • Organic 12M sales growth y/y: 13% (Q4 y/y: 15%). • Growth mainly from market penetration in vegetable • Strong 12M performance primarily driven by innovation and oil processing and innovation. higher end-m
Slide 9: Agriculture, Animal Health & Nutrition
Agriculture, Animal Health & Nutrition Flat despite negative base effect from BioAg one-off 2022 perspectives • Organic 12M sales growth y/y: 0% (Q4 y/y: 7%). • Innovation, new go-to-market model, and good • Flat 12M sales development – good underlying performance market conditions are key enablers
Slide 10: Sustainability and non-financial targets
Sustainability and non-financial targets 10
Slide 11: Financial results
Financial results Strong overall performance in 2021, including 7% organic sales growth in Q4 • 12M organic sales growth y/y: 6%; DKK sales 7% y/y. • Gross margin strong at 57.7%; 170bps higher than last year driven by productivity improvements & efficiencies, sales leverage and to some extent M&A.
Slide 12: Financial outlook 2022
Financial outlook 2022 2022 outlook • Organic sales growth of 3% to 7% with sales in reported DKK around 3 percentage points higher. • EBIT margin of 25% to 26%. • ROIC incl. goodwill of 16% to 17%. • Free cash flow before acquisitions of DKK 1.7 to 2.1 billion. 2021 realized 2022 outlook Sales perf
Slide 13: Summary
Summary Strong overall performance in 2021; solid outlook for 2022; executing on strategic framework • Strong sales performance with double-digit growth in three out of five business areas. • Delivering on all key progress areas: - Partnerships - Innovations - Digital journey - Sustainability agenda
Slide 14: Equity story
Equity story Welcome to the world´s leading biotech powerhouse
Slide 15: It starts with a purpose
It starts with a What if… purpose 10% 3% 10% of the world’s detergents of all liquid of chemical animal protein were transportation pesticides were was replaced with alternative biobased fuels were replaced with biobased biologicals protein then… 700 million tons 5 million tons of 300 million tons 2
Slide 16: A world of opportunities
A world of opportunities Global market for chemicals, food and DKK ~100 bn health ingredients, Current addressable feed additives, etc. market for biotech DKK ~100 billion Alternative Enzymes are… ~90% ~10% Microbes are… of sales proteins of sales … living microscopic organisms, such as … proteins t
Slide 17: The ability to adjust is what shapes our future
The ability to adjust is what shapes our future Agriculture, Animal Household Care Health & Nutrition 32% DKKm 12% 30% 16,000 Sales (right axis) Grain & Tech 28% Processing Organic sales performance 2021 sales split 15% 26% EBIT margin 14,000 24% R&D/Sales ROIC 22% 12,000 20% Bioenergy Food, Beverag
Slide 18: 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 19: 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 platform • Cutting-edge protein engineering im
Slide 20: 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 and Balanced customer-approach to new chemical replacement customer value product launches • Novozymes has always been and continues to be at th
Slide 21: …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 project
Slide 22: 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 23: 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 by Detergent Animal feed Textile enabling low carbon fuels in the transport 100 kg CO2 130 kg CO2 350 kg CO2 sector.
Slide 24: Unlocking growth - powered by biotechnology
Unlocking growth - powered by biotechnology Guiding the way to 2025 and act as the foundation for our 2030 ambition 24
Slide 25: x2030 Doubling sales … sustainably
2030 ambition x2030 Doubling sales … sustainably Accelerate Transform Enable towards a climate- food systems healthier lives neutral society 25
Slide 26: Financials & ESG
Financials & ESG x2030 Doubling sales … sustainably
Slide 27: Performance highlights 2021
Performance highlights 2021 27
Slide 28: 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 28% 28% 28% 28% 28%
Slide 29: Sales by geography
Sales by geography Europe, the North Asia Latin % Middle East America Pacific America & Africa 36 Emerging markets Developed markets 38% 31% 20% 11% of 2021 sales of 2021 sales of 2021 sales of 2021 sales 64 29
Slide 30: ESG Environment: Ambitious actions
ESG Environment: Ambitious actions We are committed to improve our footprint 60% Sales 50% Gross Profit In waste 99% Water 40% In climate change Energy 30% CO2 emissions of our biomass 42% Change since 2010 20% volume was handled 10% reduction of CO2 in a circular set-up emissions compared 0% (recyc
Slide 31: ESG Social: Zymers and society
ESG Social: Zymers and society We are investing in a workplace where Zymers can stay safe, thrive and grow 7.5 3% Employee absence (right axis) 7.0 Injuries per million working hours In Zymer spirit 6.5 6.0 5.5 5.0 2% 82 In senior management 4.5 4.0 3.5 points was achieved in employee satisfaction s
Slide 32: ESG Governance: Proactive and transparent
ESG Governance: Proactive and transparent We ensure responsible business conduct and long-term value creation Strong oversight of sustainability Non-financial targets are integrated into our Our strong ESG performance is endorsed by performance across Novozymes long-term incentive programs rating ag
Slide 33: 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 34: 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 18,166,400 B • Novo Holdings held 25.5% of the share capital and controlled 72.6% of votes (all A
Slide 35: 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 chain by 2030 EBIT margin Achieve gender balance across
Slide 36: Consumer Biosolutions
Consumer Biosolutions Helping customers meet consumer demand through biological solutions
Slide 37: 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 38: Overview Household Care
Overview Household Care Key trends Growth drivers • Higher enzyme inclusion and innovation addressing key consumer concerns e.g. improved wash performance Increasing demand for 32% also at low temperatures, improve sustainability profile and enabling optimized formulations • Demand for better-perfor
Slide 39: 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 representation Detergent Enzyme volume* penetration** ~4x ~1/6 DM EM DM EM +50% commercial FTEs recruited in emerging markets since 2019 * Total g
Slide 40: Growth driver Freshness platform
Growth driver Freshness platform Lifestyle changes are spurring demand for freshness, and we are on track to deliver DKK 1bn New dimension of “clean” Consumers ask for new solutions Novozymes Freshness Washed without Novozymes’ Experience issues with re- 65% occurring odor from sweat Freshness techn
Slide 41: 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 of detergent raw materials Plastics used for the are r
Slide 42: 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 use and sustainability Sales composition Baking Food & protein Freshness Meet demand for new SDG impact and taste product claims Beverages
Slide 43: 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 healthy” Increasing demand for plant-based 23% products • Increasing demand for vegetable proteins foods & beverages due to health and of 202
Slide 44: 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 45: 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 46: 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 47: 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 Novozymes Customers & partners Strengthening Food & Health co-creation capabilities Consu
Slide 48: Agriculture & Industrial Biosolutions
Capital Markets Day 2021 │ Agriculture & Industrial Biosolutions Agriculture & Industrial Biosolutions Helping customers boost performance and differentiate through biological solutions
Slide 49: 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 Biodiesel Biomass conversion Eliminate operation Superior viscosity SDG impact stress reduction Conventional biofue
Slide 50: 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 sector of 2021 sales Increasing push for clean energy solutions +2% Gr
Slide 51: 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 EU 1.8 BGY* BGY Estimate to 2025 30 low-single digit Low growth CAGR decline** 25 20 North America 15 1
Slide 52: 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) 52
Slide 53: 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 diesel 22 Vegetable
Slide 54: 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 55: Overview Grain & Tech Processing
Overview Grain & Tech Processing Key trends Growth drivers • Demand for optimization of grain processes. Consumers pushing increased 15% • Consumer demand for improved textile quality and longevity drives focus on sustainability in textiles. • Demand for wastewater solutions due to increasing sustai
Slide 56: Growth driver The grain value chain
Growth driver The grain value chain Novozymes offers multiple solutions across the value chain Process Yield optimization Sustainability Grain milling Starch processing Refining Starch slurry Starch from wet mill Liquefaction Saccharification Purification Isomerization Fructose Refinery Wet mill Fib
Slide 57: 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 58: 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 59: 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 enhance 13% • Increased demand for alternatives to chemical pesticides and fertilizers crop yields and support healthier of
Slide 60: 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 61: 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 62: 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 63: 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 64: Exploring new areas
Exploring new areas Bold and ambitious in the pursuit of new opportunities
Slide 65: Exploring new ventures to identify future growth platforms
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 Material sales potential in next 5-10 towards a
Slide 66: 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 67: Step-change in plastic recyclability using enzymes
Opportunity to drive a step-change in plastic recyclability by applying enzymes and microbial science Market Polymer Use enzymes to increase recyclability of 53 modification million tons of PET bottles and fibers currently sent to incineration or landfill Polymer Technology recycling Opportunity for
Slide 68: Enzymatic carbon capture to reduce greenhouse gas emissions
Opportunity to reduce greenhouse gas emissions through enzymatic carbon capture Market Total Remove a fraction of the 37 greenhouse billion tons of CO2 emitted annually into the atmosphere gas emissions Representing 75% of all Billion tonnes CO2 CO2 utilization greenhouse gases causing equivalent Ca
Slide 69: 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 Carl Ahlgren Naja Wivel Ulrik Wu Svare Head of Investor relations IR officer (US) Coordinator IR officer +45 3077 8682 +1 919 702 6144 +45 30