Slide 1: Roadshow Presentation Q1 2014
ROADSHOW PRESENTATION Q1 2014 April 24, 2014
Slide 2: Table of Contents
Table of Contents Table of Contents 2 1. Q1 2014 presentation 3-9 2. Novozymes Overview 10-16 3. Strategy 17-25 4. Segmental Overview 26 Household Care 27-29 Food & Beverages 30-31 Bioenergy 32-35 Agriculture & Feed 36-41 Technical & Pharma 42-44 5. Sustainability 45-49 6. Financial Review
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 assoc
Slide 5: Q1 2014 Summary
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Q1 2014 Summary Strong first quarter performance Sales and organic growth • 11% organic sales growth (DKK=7%). Strong as Q1 2012- Q1 2014 DKKm expected, driven by Household Care, Bioenergy and
Slide 6: Sales & Markets
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Sales & Markets Q1 2014 sales: Sales by industry, DKKm DKK +7%, LCY +10%, organic +11% Q1 2014 Q1 2013 • Household Care: Sales continued on growth track, as customer interest in optimizing fo
Slide 7: Business Development Activity Update
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Business Development Activity Update The BioAg Alliance Biomass Conversion industry Biopharma technology initiated under establishment gets stamp of approval • The BioAg Alliance approved 5 new
Slide 8: R&D Activity Update
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW R&D Activity Update BioChemicals: R&D gears up for The BioAg Alliance Termination of Bio- polypropylene project • BioAg R&D focus on building new organization. First line of • Termination of R&
Slide 9: Q1 2014 Financial Performance
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Q1 2014 Financial Performance Strong results for Q1 2014 2014 2014 Realized Outlook Outlook • Double digit organic sales growth Key financials Q1 2014 April 24 Jan. 21 • The BioAg Alliance gave
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* US$ 15bn
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 - Creates Synergies and New Opportunities
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 • ~13-14% of annual sal
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 • Sales FY 2013 of DKK 11.7 bn (USD ~ 2.1 bn) • Strong profitability, 24.7% in EBIT margin FY 2013 • ROIC of
Slide 16: Global Production and R&D Setup
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Global Production and R&D Setup Milwaukee, Wisconsin BioAg production Nottingham, England Bagsværd, Denmark Saskatoon, Canada Biopharma production Headquarters BioAg production (Albumin
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: 2013: Global enzyme market value DKK ~ 12bn DKK ~ 22bn 2013: DKK ~ 22bn 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: How Do We Get To +10% from 2015?
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW How Do We Get To +10% from 2015? • History shows potential to grow 10% from a diversified set of industries, but not consistently • Consistent performance in existing business will lay foundati
Slide 21: 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 proje
Slide 22: 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 23: Business Development Nurtures Tomorrow's Business for Novozymes
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Business Development Nurtures Tomorrow’s Business for Novozymes • Responsible for new business areas and Novozymes’ entire pipeline prioritization • Close coordination on pipeline, resource all
Slide 24: 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 25: Cash Generation, Use, Capex and Future Priorities
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Cash Generation, Use, Capex and Future Priorities – DKK billion Cash generation has tracked EBIT Cash for growth and shareholders 3.5 4.0 3.0 3.5 3.0 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0.0
Slide 26: 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 27: Household Care Overview
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Household Care Overview Household Care (36% of 2013 sales) Household Care Sales Sales DKK LCY growth 4,5 00 40% 4,222 4,2 50 3,973 4,0 00 35% 3,514 3,7 50 Laundry & dishwasher detergents Applic
Slide 28: 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 containing Share of deterge
Slide 29: 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 30: Food & Beverages Overview
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Food & Beverages Overview Food & Beverages (27% of 2013 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 31: 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 32: Bioenergy Overview
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Bioenergy Overview Bioenergy (16% of 2013 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 1,909 1,782 1,748 50% 1,7
Slide 33: 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 34: Many More Potential Customers Are Interested in Biomass Conversion
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Many More Potential Customers Are Interested in Biomass Conversion Today than 5 Years Ago • The number of projects choosing enzymatic hydrolysis conversion has increased from 7 in 2008 to 26 in
Slide 35: Biomass Conversion; Food, Feed, Fuel, Chemicals and Materials Made from Biomass and Waste
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Biomass Conversion; Food, Feed, Fuel, Chemicals and Materials Made from Biomass and Waste • A transformational opportunity for Novozymes • Turning renewable low-value carbon into high-value pro
Slide 36: Agriculture & Feed Overview
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Agriculture & Feed Overview Agriculture & Feed (14% of 2013 sales) Agriculture & Feed Sales Sales DKK LCY growth 2,0 00 88% FEED: Monogastric animals / Substituting 1,7 50 1,668 78% phosphate /
Slide 37: The BioAg Alliance with Monsanto
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW The BioAg Alliance with Monsanto - Aiming to Build Next Important Yield Platform for Farmers INTEGRATED SYSTEM EMERGING TRENDS • Multiple components converging to • Replacing agricultural input
Slide 38: Combined Leadership: Novozymes and Monsanto Microbials Platform
Combined Leadership: QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Combination of Novozymes and Monsanto Establishes Industry's Most Advanced Microbials Platform ESTABLISHED MICROBIAL LEADERSHIP • World leader in microbial technology; disc
Slide 39: Power of Microbial Technology: Novozymes' Proven Microbials Portfolio
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Power of Microbial Technology: Novozymes’ Proven Microbials portfolio CURRENT PRODUCT PORTFOLIO CASE: JUMPSTART ® 1. Microorganism Microorganism applied applied toto the theseed seed before bef
Slide 40: Ag Biologicals Market: Significant Business in Fast Growth Market
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Ag Biologicals Market: Novozymes Has Developed a Significant Business in Fast Growth Market AG BIOLOGICALS MARKET1 NOVOZYMES BIOAG’s SALES DEVELOPMENT2 Market Segmented by Product Class 200
Slide 41: Attractive Value Propositions in Animal Feed
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Attractive Value Propositions 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 HiP
Slide 42: Technical & Pharma Overview
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Technical & Pharma Overview Technical & Pharma (14% of 2013 sales) Feed & Other Tech. Enzymes Sales Sales DKK LCY growth 1,0 00 45% TECH: Textiles / Leather / Pulp & Paper Application PHARMA: A
Slide 43: Pharma Overview
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Pharma Overview The classic pharma value chain Drug Sales and Drug Discovery Manufacturing Distribution Development Marketing Novozymes Recombinant Enzymes for Hyaluronic Acid VELTIS® Albumin B
Slide 44: A number of VELTIS candidates are in clinical development
A number of VELTIS® candidates are in clinical development Albiglutide® (GLP-1 albumin fusion) for diabetes type II, approved in both the EU and the US in 1H 2014 Publicly available information on companies using Novozymes’ VELTIS® technology: Pre- MAA Company Deal Drug Target PI PII PIII clin stage
Slide 45: Sustainability
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW INVESTOR PRESENTATION SUSTAINABILITY QUARTERLY RESULTS • OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Slide 46: 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): Best in Class Storebrand SRI • Included in DJSI Biotechnology sector since 2000, and
Slide 47: 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 48: 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 2013, Novozymes helped customers save 52 million tons of CO2 through the application of Novozymes’ products, equivalent to taking 20 mill
Slide 49: Sustainability Performance and Targets
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Sustainability Performance and Targets - Good progress om 2013, but not all targets met 2013 2013 2014 Targets targets realized target Long-term sustainability targets Water efficiency (index 2
Slide 50: 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 51: Historical Performance Demonstrates Track Record of Delivery
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Historical Performance Demonstrates Track Record of Delivery 2000-2013 sales CAGR of ~7% 58% Gross margin 57.2% 20% 15,000 56.2% Sales DKKm Growth 55.6% 16% 12,000 56% 57.2% 12% 9,000 53.3% 53.
Slide 52: 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 53: Dividend and Stock Buyback History
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Dividend and Stock Buyback History • 2013 dividend per share DKK 2.50, up 13%, payout ratio DKK million Dividend / Buybacks Dividend per 35.7% share, DKK Dividend Buyback DPS • Expected buyback
Slide 54: 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 55: Investor Relations Contacts
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW Investor Relations Contacts Thomas Steenbech Bomhoff Martin Riise Klaus Sindahl Mobile (DK):+45 3077 1226 Mobile (USA): +1 919 649 2565 Mobile (DK): +45 5363 0134 E-mail: tsbm@novozymes.com Mob
Slide 56: Novozymes – Rethink Tomorrow
novozymes’ Rethink Tomorrow