Novonesis A/s Class B · OMXCOP:NSIS_B
Novonesis A/s Class B — Novozymes — 9M 2023 Earnings Presentation
67 slides from Novonesis A/s Class B's earnings presentation, Oct 26, 2023
Slide 1: Roadshow presentation 9M 2023
Roadshow presentation 9M 2023 Released on October 26, 2023 Further investor relations information is available from the company’s website at investors.novozymes.com
Slide 2: Table of content and 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: Q3 organic sales growth of 8% and 26.6% EBIT margin b.s.i. solidifies 2023 outlook
Q3 organic sales growth of 8% and 26.6% EBIT margin b.s.i. solidifies 2023 outlook Sales and financial performance Key events • 5% organic sales growth supported by pricing of ~6% and volumes down by ~1%. • Interim dividend pay-out of DKK 4.20 per share on Oct. 17, to honor • 2nd half growth acceler
Slide 4: Household Care
Household Care 29% of sales Solid performance supported by price, innovation and penetration • Organic 9M sales growth y/y: 3% (Q3 y/y: 6%). • Pricing had a positive impact on growth. • Growth in developed markets driven by innovation, more than offsetting the negative impact from industry volume so
Slide 5: Food, Beverages & Human Health
Food, Beverages & Human Health 22% of sales Underlying growth despite destocking and lower consumer demand • Organic 9M sales growth y/y: -2% (Q3 y/y: 7%). • Negative YTD impact of roughly 3 percentage points from Q1 comparator effect. Organic sales performance (y/y) 16% • Underlying growth driven b
Slide 6: Bioenergy
Bioenergy 24% of sales Strong performance driven by innovation and penetration • Organic 9M sales growth y/y: 25% (Q3 y/y: 21%). Organic sales performance (y/y) • Growth mainly driven by innovation and penetration in North America despite flat U.S. ethanol production, as well as capacity expansion o
Slide 7: Grain & Tech Processing
Grain & Tech Processing 13% of sales Negative development driven by Tech • Organic 9M sales growth y/y: -9% (Q3 y/y: -3%). Organic sales performance (y/y) • Tech declined due to significantly lower sales of enzymes for Covid-19 test kits and a much softer-than-expected textile market. • Grain impact
Slide 8: Agriculture, Animal Health & Nutrition
Agriculture, Animal Health & Nutrition 12% of sales Performance driven by Animal Health & Nutrition • Organic 9M sales growth y/y: 7% (Q3 y/y: 6%). Organic sales performance (y/y) • Performance driven by Animal Health & Nutrition. • Agriculture was soft, impacted by destocking and a volatile end-mar
Slide 9: Financial results 9M 2023
Financial results 9M 2023 • Organic sales growth 9M y/y: 5% (Q3 8%). Reported DKK sales growth: 2% (Q3 2%) • Gross margin at 54.4%; 0.5pp lower y/y due to higher input and logistics costs, partly off-set by the positive impact from prices and productivity improvements. Q3 Gross margin flat y/y as ex
Slide 10: Financial outlook 2023
Financial outlook 2023 • Organic sales growth of 4-6% with sales in reported DKK roughly 3 percentage points lower. • EBIT margin b.s.i.* at 25-26%. • ROIC** b.s.i.* expected at 16-17%. 2023 Outlook 2023 Outlook October 26*** August 9*** Organic sales growth % 4-6 4-6 EBIT margin b.s.i.* % 25-26 25-
Slide 11: Update on key milestones for the combination with Chr. Hansen
Update on key milestones for the combination with Chr. Hansen Announcement Novozymes Financial Outlook The U.S. antitrust Regulatory Interim Expected of combination Annual Report confirmed and regulation waiting approval in dividend completion approved by the announcement of period expired, China, B
Slide 12: Summary
Summary • Anticipated acceleration in second half of the year now with 8% organic sales growth in Q3 and 26.6% EBIT margin b.s.i. • 2023 outlook maintained • Getting closer to deal closure with Chr. Hansen, continuously expected in Q4 2023 or Q1 2024. 12
Slide 13: Equity story
Equity story Welcome to the world´s leading biotech powerhouse
Slide 14: It starts with a purpose
It starts with What if… a purpose 10% detergents 3% 10% of the world’s 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 300 million 250 milli
Slide 15: 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 16: The ability to adjust is what shapes our future
The ability to adjust is what shapes our future DKKm 30% 18,000 Sales (right axis) 28% Organic sales performance 26% 16,000 EBIT margin* 24% R&D/Sales ROIC* 14,000 22% 20% 12,000 18% 16% 10,000 14% 12% 8,000 10% 6,000 8% 6% 6% organic sales CAGR 4,000 4% 2% 2,000 0% -2% 0 2000 2001 2002 2003 2004 20
Slide 17: Uniquely diversified group creating synergies and opportunities
Uniquely diversified group creating synergies and opportunities Food, Beverages & Agriculture, Animal Household Care Bioenergy Grain & Tech Processing Human Health Health & Nutrition 28% of 2022 sales 24% of 2022 sales 21% of 2022 sales 15% of 2022 sales 12% of 2022 sales Sales split Sales split Sal
Slide 18: 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 19: 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 20: …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 21: Unique technology sets Novozymes apart
Unique technology sets Novozymes apart We re-invest ~ 11% 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 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: Strategy progress: 2022 highlights
Strategy progress: 2022 highlights “Unlocking growth – powered by biotech” Our unique production competencies In addition, we strengthened our Due to overall input cost increases, our has guided our efforts, priorities and and ability to scale make us stand out. commercial leadership and our commer-
Slide 24: A 'better together' gamechanger
A ‘better together’ gamechanger – with increased value creation opportunity Complementary strengths of each business leveraged to create a leading global biosolutions partner with a diversified biological toolbox Global megatrends and industry tailwinds support ‘stronger together’ rationale Strong i
Slide 25: Cost and revenue synergies drive significant near-term value creation
Cost and revenue synergies drive significant near-term value creation Overview of synergies Run-rate EBIT contribution % Share (cost) • Production optimisation • Repair and maintenance and consumables efficiencies COGS ~40 - 50% COGS (of total) • Procurement savings from contract bundling and logist
Slide 26: 2030 ambition: Doubling sales sustainably
2030 ambition x2030 Doubling sales … sustainably Accelerate Transform Enable towards a climate- food systems healthier lives neutral society
Slide 27: Financials & ESG
Financials & ESG x2030 Doubling sales … sustainably
Slide 28: Commitments to a healthy planet
Commitments to a healthy planet Business Employees & society Operations Organic sales Include Climate An inclusive and diverse workforce By 2025, reduce absolute CO2 emissions from operations by CAGR 65% from a 2018 baseline and purchase 100% renewable 5% or higher until 2025 By 2025, >35% women in
Slide 29: Performance highlights 2022
Performance Nonfinancial highlights 2022 63% 100% Absolute CO2 emissions Circular management reduction from operations of biomass 83 86 Employee engagement Gender and international representation - Zymer Spirit Index - Nurture Diversity Index Financial 2022 Target Realized Reduce absolute CO2 emissi
Slide 30: 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% 24% 25% 23% 15 9% 5 27% 28% 28%
Slide 31: Nonfinancial milestones and targets
Nonfinancial milestones and targets Targets & commitments 2025 Milestones Long-term Reduce absolute CO2 emissions 65% from operations 75% from operations by 2030 Climate 35% from supply chain by 2030 Purchase renewable electricity 100% Net-zero by 2050 Restore water in basins close to our production
Slide 32: Operations targets and commitments
Operations targets and commitments 2030 validated 2030 validated 2050 validated 2022 target 2025 2050 targetvalidated target target target target Climate Scope 1+2 Reduce absolute CO2 emissions** from Reduce absolute CO2 emissions** our operations by 65% from operations by 75% We are committed to hi
Slide 33: Progressing towards our long-term commitments
Progressing towards our long-term commitments 80% Sales 60% Gross Profit 2022 figures Water 40% Change since 2010 Energy 82% 63% 100% 20% Renewable reduction in of our biomass waste 0% 0 electricity absolute CO2 used as raw material in purchased emissions in fertilizer production -20% operations sin
Slide 34: Employees & society targets and commitments
Employees & society targets and commitments 2030 validated 2030 long-term 2022 target 2025 2050 targetvalidated target commitment target Include Diversity & ≥ 35% women in senior management and ≥ 45% women and ≥ 45% men inclusion ≥ 45% women across all professionals across all professionals and in W
Slide 35: Proactive and transparent governance
Proactive and transparent governance We ensure responsible business conduct and long-term value creation across all levels Strong oversight of sustainability Non-financial targets are integrated into Our strong ESG performance … and we continue to support performance across Novozymes our long-term i
Slide 36: Foundation ownership advocates long-term focus
Foundation ownership advocates long-term focus Supports our social, humanitarian and innovation purpose Stock and ownership Structure and purpose Novo Holdings A/S is wholly owned by the Novo Nordisk Foundation, an The common stock consists of 281,000,000 shares each with a nominal value of DKK 2 pe
Slide 37: Shareholder distribution and dividend payouts
Shareholder distribution and dividend payouts As of December 2022… …and DKK ~28.3bn have been returned to shareholders since 2013 • Novozymes had more than 60,000 shareholders, and 76% of the B shares were held outside Denmark, mainly by institutional investors • Fifty institutional investors, inclu
Slide 38: Consumer Biosolutions
Consumer Biosolutions Helping customers meet consumer demand through biological solutions
Slide 39: 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 28% performance also at low temperatures, improve sustainability profile and enabling optimized formulations solutions that enable of
Slide 40: 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 41: Growth driver Freshness platform
Growth driver Freshness platform Lifestyle changes are spurring demand for freshness and we continue our efforts to unlock North America New dimension of “clean” Consumers ask for new solutions Novozymes Freshness Washed without Novozymes’ technology Experience issues with re- 65% occurring odor fro
Slide 42: 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 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 Increasing demand for plant-based 24% healthy” products • Increasing demand for vegetable proteins and growing demand for probiotics and othe
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 Customer Co-Creation Platform Novozymes Customers & partners Consumer Biosolutions Applic
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: Overview Bioenergy
Overview Bioenergy Key trends Growth drivers • Increased use of renewable and alternative fuels 21% • Innovation for yield enhancement, chemical cost reduction and increased demand from producers for diversification into new value streams such as feed protein and corn oil of 2022 sales Increasing pu
Slide 50: 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 51: 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) 51
Slide 52: 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 53: Overview Grain & Tech Processing
Overview Grain & Tech Processing Key trends Growth drivers • Growing demand for optimization and yield enhancement in grain processes to support the Consumers pushing 15% solid demand of food production with a reduced environmental footprint • Consumer demand for improved textile quality and increas
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: 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 12% • Increased demand for alternatives to chemical pesticides and fertilizers enhance crop yields and support of 2022 sales
Slide 57: 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 58: 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 59: 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 60: 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 61: Exploring new areas
Exploring new areas Bold and ambitious in the pursuit of new opportunities
Slide 62: 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 towards a Transform Material sales potential in
Slide 63: 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 64: 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 65: Step-change in plastic recyclability with 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 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: 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 Anders Enevoldsen Naja Wivel Head of Investor relations Ludmila Cebanov IR officer Coordinator +45 3077 8682 IR officer +45 5350 1453 +45 307