Slide 1: Roadshow Presentation Q3 2013
ROADSHOW PRESENTATION Q3 2013 October 25, 2013
Slide 2: Table of Contents
TABLE OF CONTENTS Index 2 1. Q1 2013 presentation 3-9 2. Novozymes Overview 10-16 3. Strategy 17-22 4. Segmental Overview 23 Household Care 24-26 Food & Beverages 27-28 Bioenergy 29-31 Agriculture & Feed 32-34 Technical & Pharma 35-37 5. Sustainability 38-42 6. Financial Review 43-49 2
Slide 3: Quarterly Results
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW QUARTERLY RESULTS QUARTERLY RESULTS • OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Slide 4: Safe Harbor Statement
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Safe Harbor Statement This presentation and its related comments contain forward-looking statements, including financial expectations. Forward-looking statements are by their very nature associ
Slide 5: 9M 2013 Summary
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW 9M 2013 Summary 9M performance in line with expectations Accumulated organic sales growth and guidance, 2012 & 2013 • 6% organic sales growth after 9M (7% in Q3) 8% driven by all industries, sp
Slide 6: Sales & Markets
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Sales & Markets First 9M sales in line with expectations Sales by industry, DKKm 9M 2013 sales: DKK +5%, LCY +7%, org: +6% 9M 2013 9M 2012 Q3 2013 sales: DKK +3%, LCY +8%, org: +7% Househol
Slide 7: In Detail: Corn Ethanol Customers Adopt New Enzyme Technology
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW In Detail: Corn Ethanol Customers Adopt New Enzyme Technology New technology has been well received by Quarterly growth rates, 2012-2013 customers and we are outperforming the 30% market: US et
Slide 8: Innovation - New Evity Platform for Household Care
Innovation - New Evity® Platform for Household Care The Evity® Platform: Improved Granulate Illustration • New stability technology for High-strength Household Care aiming at taking enzyme-containing core with stabilizing stability to next level technology • Relevant for both granulate and liquid fo
Slide 9: 9M 2013 Financial Performance & FY 2013 Outlook
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW 9M 2013 Financial Performance & FY 2013 Outlook Satisfactory earnings development in dynamic Realized Outlook Outlook currency environment Key financials 9M 2013 October 25 August 9 • Increase
Slide 10: Overview
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW INVESTOR PRESENTATION OVERVIEW QUARTERLY RESULTS • OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Slide 11: Novozymes – The World Leader in Bioinnovation
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Novozymes – The World Leader in Bioinnovation Who are we? Founded 1925 Listed 2000 Global: +6,000 employees, 700 products in 140 countries Ticker NZYM B Exchange Copenhagen Market Cap (MDKK)* ~
Slide 12: Experienced Leadership Team Exploring Growth & Value Creation Opportunities
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Experienced Leadership Team Exploring Growth & Value Creation Opportunities Peder Holk Nielsen Thomas Videbæk Per Falholt Benny Loft Thomas Nagy Andrew Fordyce Per Falholt Peder Holk Nielsen An
Slide 13: Delivering Tomorrow's Solutions Today
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Delivering Tomorrow’s Solutions Today Delivering solutions from Helping companies This unique approach nature: become more efficient: leads to: food applications, detergents, energy efficiency,
Slide 14: Uniquely Diversified Group
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Uniquely Diversified Group - Creates Synergies and New Opportunities • Unique biotech-focused business with a strong legacy of delivering growth, earnings, and cash flow • ~ 14% of annual sales
Slide 15: Diversification in Revenue Streams Underpins Strong Financial Position
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Diversification in Revenue Streams Underpins the Company’s Strong Financial Position • Enzymes account for ~90% of turnover • Sales FY 2012 of DKK 11,234 billion (USD ~ 2 billion) • Strong prof
Slide 16: Global Production and R&D Setup
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Global Production and R&D Setup Nottingham, England Bagsværd, Denmark Biopharma production Headquarters Saskatoon, Canada (Albumin) R&D BioAg production R&D Pilot plant R&D Kalund
Slide 17: Strategy
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW INVESTOR PRESENTATION STRATEGY QUARTERLY RESULTS • OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Slide 18: Undisputed Market Leader Expanding Enzyme Application
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Undisputed Market Leader Expanding Enzyme Application Global enzyme market value: 2000: 2012: Global enzyme market value DKK ~ 12bn DKK ~ 21bn 2012: DKK ~ 21bn Novozymes Rest of Novozymes Rest
Slide 19: Multiple Drivers Create a Sustainable Business with Significant Growth Potential
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Multiple Drivers Create a Sustainable Business with Significant Growth Potential Drivers Ambition • Energy efficiency Long-term financial targets: • Cost/performance > 10% sales growth • Waste
Slide 20: 1. Drive Innovation – Because Innovation Drives Top-Line Growth
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW 1. Drive Innovation – Because Innovation Drives Top-Line Growth • Achieving growth through R&D investment remains a fundamental priority • > 50 new product in the last 5 years, ~ 100 active pro
Slide 21: 2. Expand Opportunities; Developing new technology and business platforms
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW 2. Expand Opportunities; Developing new technology and business platforms Continued development in …creates opportunities to develop our technology base… new business platform Biomass Strain de
Slide 22: 3. Enzyme Technology Improves Profitability
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW 3. Enzyme Technology Improves Profitability • Focused on improving margins through sophisticated technological solutions • Achieved sales CAGR of 7% since 2000 with improving margins • Roughly
Slide 23: Segmental Overview
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW INVESTOR PRESENTATION SEGMENTAL OVERVIEW QUARTERLY RESULTS • OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Slide 24: Household Care Overview
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Household Care Overview Household Care (35% of 2012 sales) Household Care Sales Sales DKK LCY growth 4.5 00 40% 4.2 50 3.973 4.0 00 35% 3.514 3.7 50 Laundry & dishwasher detergents Application
Slide 25: Enzymes are Gaining Traction in Detergents
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Enzymes are Gaining Traction in Detergents The advantages of ..drive new product ..increasing the enzymes.. launches.. overall penetration of enzymes # of detergents Share of detergents contain
Slide 26: Replacing Chemicals in Detergents
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Replacing Chemicals in Detergents Raw mat. cost distribution in Raw mat. cost distribution top-tier powder detergent Benefits: in top-tier liquid detergent Surfactan • Reduce oil price sensitiv
Slide 27: Food & Beverages Overview
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Food & Beverages Overview Food & Beverages (28% of 2012 sales) Food & Beverages Sales Sales DKK LCY growth 4.0 00 40% 3.7 50 Baking / Starch conversion / Brewing / 35% Application 3.5 00 Bevera
Slide 28: Fill and Manage the Pipeline - Enzyme Innovation to the Food Industry
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Fill and Manage the Pipeline - Enzyme Innovation to the Food Industry Informed New economies Health & Wellbeing Convenience consumption and urbanization Reinforce customers’ Reduce costs Apply
Slide 29: Bioenergy Overview
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Bioenergy Overview Bioenergy (16% of 2012 sales) Bioenergy Sales Sales DKK LCY growth 2.5 00 70% 2.2 50 60% Application Corn ethanol / Biomass conversion 2.0 00 1.846 47% 1.782 1.748 50% 1.7 50
Slide 30: Production of Biofuels and Beyond
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW PRODUCTION OF BIOFUELS AND BEYOND Raw material Production process End product Sugarcane Extraction Ethanol Co-products Bagasse; Energy Fermentable sugar Classical Butanol Milling Cooking Enzyme
Slide 31: Renewable Fuel Standard (RFS2) in the US Mandates Strong Growth of Biofuels
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW The Renewable Fuel Standard (RFS2) in the US Mandates Strong Growth of Biofuels Usage RFS2 = mandated blending of biofuels in the US 40 Current RFS targets 35 2012 2013 2014 30 16 Starch 13.2bn
Slide 32: Agriculture & Feed Overview
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Agriculture & Feed Overview Agriculture & Feed (15% of 2012 sales) Agriculture & Feed Sales Sales DKK LCY growth 2.0 00 88% 78% 1.7 50 FEED: Monogastric animals / Substituting 1.617 phosphate /
Slide 33: Attractive Value Proposition in Animal Feed
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Attractive Value Proposition in Animal Feed Phytase – phosphate • Only 3-30%* of phosphate in feed is available to the animal • Ronozyme NP® releases half of the phosphate bound – Ronozyme HiPh
Slide 34: BioAgriculture – Leading Player in Biofertility
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW BioAgriculture – Novozymes is a Leading Player in Biofertility. Built via acquisitions 2007: Philom 2011: 2012: Natural 2013: TJ 2010: Turfal Bios EMD/Merck Industries Technologies BioAg: Inter
Slide 35: Technical & Pharma Overview
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Technical & Pharma Overview Technical & Pharma (13% of 2012 sales) Feed & Other Tech. Enzymes Sales Sales DKK LCY growth 1.0 00 45% TECH: Textiles / Leather / Pulp & Paper Application PHARMA: A
Slide 36: Biopharma Overview
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Biopharma Overview The classic pharma value chain Drug Drug Sales and Manufacturing Distribution Discovery Development Marketing Novozymes Hyaluronic Acid: Albumin: • Applications for medical d
Slide 37: New cGMP Hyaluronic Acid Facility Is Commercial
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW New cGMP Hyaluronic Acid Facility Is Commercial - Setting a New Product Standard Bacillus Subtilis fermentation • No animal-derived raw materials Safety • No organic solvents (aqueous recovery)
Slide 38: Sustainability
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW INVESTOR PRESENTATION SUSTAINABILITY QUARTERLY RESULTS • OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Slide 39: Recognized as a Sustainability-Driven Organization
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Recognized as a Sustainability-Driven Organization Novozymes in the Dow Jones Sustainability Indexes (DJSI): Top 1% of Environmental Investment Organization carbon reporting • Included in DJSI
Slide 40: Three-pronged Core of Novozymes' Sustainability
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Three-pronged Core of Novozymes’ Sustainability Economic growth Use of natural resources It’s all in the numbers Scientific - All products are life-cycle assessed (LCA) Bioinnovation approach -
Slide 41: Reducing CO2 Emissions Together with our Customers
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Reducing CO2 Emissions Together with our Customers • In 2012, Novozymes helped customers save 48 million tons of CO2 – roughly equal to 3/4 of Denmark’s annual CO2 emission • Novozymes’ vision:
Slide 42: Ambitious, Long-term Sustainability Targets
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Ambitious, Long-term Sustainability Targets Long-term targets added Targets 2012 2012 2013 2015 (index 2005) targets realized target target • Be recognized as a global leader within sustainabil
Slide 43: Financial Review
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW INVESTOR PRESENTATION FINANCIAL REVIEW QUARTERLY RESULTS • OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Slide 44: Historical Performance Demonstrates Track Record of Delivery
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Historical Performance Demonstrates Track Record of Delivery 2000-2012 sales CAGR of ~7% 58% Gross margin 20% 12.000 56,2% Sales DKKm Growth 55,6% 16% 56% 57,2% 9.000 12% 53,3% 53,1% 55,7% 54%
Slide 45: Low Exposure to Raw Material Fluctuations
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Low Exposure to Raw Material Fluctuations Split of COGS • Factors impacting COGS development: • Productivity improvements, input prices, currency 35% • Note: accounting practice implies that 45
Slide 46: Dividend and Stock Buyback History
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Dividend and Stock Buyback History • 2012 dividend per share DKK 2.20, up 16%, payout ratio 34.1% Dividend / Buybacks DKK million Dividend per • Accumulated buybacks end of share, DKK Dividend
Slide 47: Shareholder Distribution
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Shareholder Distribution B shares listed in Copenhagen Shareholder distribution of under the symbol “NZYM B” B common stock* • Two share classes; A and B shares Rest of • B shares listed in Cop
Slide 48: Investor Relations Contacts
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Investor Relations Contacts Thomas Steenbech Bomhoff Martin Riise Mobile (USA): +1 919 649 2565 Tel.: +45 4446 0738 Mobile (DK):+45 3077 1226 Mobile: +45 3077 0738 E-mail: tsbm@novozymes.com E-
Slide 49: Novozymes – Rethink Tomorrow
novozymes’ Rethink Tomorrow