Roadshow presentation 9M 2020...Roadshow presentation 9M 2020 ... • Cutting-edge protein...

Roadshow presentation 9M 2020

Released on October 21 2020

Further investor relations information is available from the company’s website at investors.novozymes.com

2

Table of Content

Roadshow presentation

• Latest results 4

• Equity story 14

• Business overview 26

• ESG overview 51

• Financial overview 58

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-lookingstatements are associated with words such as, but not limited to, "believe," "anticipate," "expect," "estimate," "intend," "plan," "project," "could," "may," "might" and other words of similar meaning.

Forward-looking statements are by their very nature associated with risks and uncertainties that may cause actual results to differ materially from expectations, both positively and negatively. The risks anduncertainties may, among other things, include unexpected developments in i) the ability to develop and market new products; ii) the demand for Novozymes’ products, market-driven price decreases, industryconsolidation, and launches of competing products or disruptive technologies in Novozymes’ core areas; iii) the ability to protect and enforce the company’s intellectual property rights; iv) significant litigation orbreaches of contract; v) the materialization of the company’s growth platforms, notably the opportunity for marketing biomass conversion technologies or the development of microbial solutions for broad-acrecrops; vi) the political conditions, such as acceptance of enzymes produced by genetically modified organisms; vii) the global economic and capital market conditions, including, but not limited to, currencyexchange rates (USD/DKK and EUR/DKK in particular, but not exclusively), interest rates and inflation; viii) significant price decreases on input and materials that compete with Novozymes’ biological solutions. Thecompany undertakes no obligation to update any forward-looking statements as a result of future developments or new information.

3

44

Latest results

Highlights

Satisfactory first nine months despite COVID-19 implications. Full-year EBIT margin and FCF outlook raised; sales outlook maintained with midpoint of range as most likely outcome

• More customer-centric organization announced on September 1

• Organic sales; 9M y/y: +1% (Q3 y/y: -3%). Segment performances impacted differently by COVID-19 during the year

• Household Care and Food & Beverages negatively impacted by destocking in Q3, as expected

• Agriculture & Feed negatively affected by inventory adjustments in Q3

• Bioenergy and Technical & Pharma negatively impacted by COVID-19 effects, also in Q3

• EBIT margin at 27.0% (Q3: 26.1%) and free cash flow before acquisitions at DKK 2.7 billion

• Full-year organic sales outlook maintained at -2% to +2; midpoint of range as most likely scenario

• EBIT margin and free cash flow outlook raised to between 26 to 27% and DKK 2.6 to 3.0 billion respectively

5

9M 2020 Realized

Q3 2020Realized

Sales performance, organic % +1 -3

EBIT margin % 27.0 26.1

ROIC incl. goodwill % 19 19

Free cash flow before acquisitions DKKbn 2.7 0.7

Latest results

-1%

1%

-5%

-19%

2%

-3%

7%5%

-11%

4%

-15%

1%

Household Care

NovozymesFood & Beverages

Bioenergy Technical & Pharma

Agriculture & Feed

Organic sales performance by segment

Q3’20 9M’20

• Latestresults

• Equity story • Business overview

• ESG overview

• Financial overview

Organic sales performance by geography

6

⚫Main sites with production and R&D ⚪ Satellite production site ⚫ Satellite R&D site

Emerging 34 %9M y/y: 3%Q3 y/y: -6%

⚫

⚫

⚫⚪

⚪

⚪⚫

⚫ ⚫

⚫

Developed 66%9M y/y: 0%Q3 y/y: -2%

9M y/y: -4%Q3 y/y: -4%

9M y/y: 9 %Q3 y/y: -3 %

9M y/y: 5%Q3 y/y: -1 %

9M y/y: -1 %Q3 y/y: -7%

Latest results

North America

32% of sales

Europe, Middle East& Africa

40%of sales

Latin America

9% of sales

Asia Pacific

19% of sales

• Latestresults


• ESG overview


7

Household Care

Latest results

Strong sales performance; Q3 impacted by destocking

• Organic sales; 9M y/y: +7% (Q3 y/y: -1%)

• Strong sales performance driven by rollout of the freshness

technology and increased enzymatic penetration

• Sales amplified by COVID-19 related effects; Q3 affected by

expected destocking

• Q3 2019 comparator more difficult than those from 1H

• Launch of Microvia™ for hard surface cleaning

2020 perspectives

• Freshness technology performing according to plan;

increased enzyme penetration for detergents in emerging

markets

• Consumer behaviors affected by COVID-19

Quarterly organic sales performance (y/y)

YTD organic sales performance (y/y)

35% of sales

Q4’19Q3’19 Q3’20Q1’20 Q2’20

5% 5%

11% 11%

-1%

9M’16 9M’189M’17

7%

9M’19 9M’20

0%1% 2%0%

• Latestresults


• ESG overview


8

Food & Beverages

Latest results

Solid first nine months led by baking

• Organic sales; 9M y/y: +5% (Q3 y/y: +1%)

• Growth led by baking, beverages declined from lower

demand in brewing

• Q3 impacted by destocking as expected, especially in baking

• Q3 2019 comparator more difficult than those from 1H

2020 perspectives

• Consumer behaviors affected by COVID-19



31% of sales

Q2’20

11%

Q3’20Q3’19 Q4’19 Q1’20

1% 2% 3%1%

-1%

1%

9M’209M’16 9M’17

4%

9M’18 9M’19

9%

5%

• Latestresults


• ESG overview


9

Bioenergy

Latest results

Improvement in Q3, though still below last year

• Organic sales; 9M y/y: -11% (Q3 y/y: -5%)

• U.S. ethanol production impacted by COVID-19 restrictions;

less decline in Q3

• Sales outside the U.S. growing, also in Q3

• Introduction of the Fiberex technology

2020 perspectives

• Supporting customers with more tailored solutions, also

considering the difficult market conditions

• Volatile year impacted by COVID-19Quarterly organic sales performance (y/y)


17% of sales

11%

2%

Q3’19 Q1’20Q4’19 Q3’20Q2’20

-5%

-37%

-5%

9M’18 9M’209M’16 9M’17 9M’19

14%

-7%-11%

10%

-4%

• Latestresults


• ESG overview


10

Agriculture & Feed

Latest results

Growth driven by Agriculture; Q3 significantly impacted by

inventory adjustments in Feed

• Organic sales; 9M y/y: +4% (Q3 y/y: -19%)

• Agriculture performed well in upstream corn inoculants but

weaker in downstream solutions; Q3 negatively impacted by

timing

• Feed declined slightly; significant Q3 inventory adjustments

due to lower market demand

2020 perspectives

• Global farm economics and COVID-19 related uncertainty

13% of sales


Q3’19 Q4’19 Q1’20

3%

Q2’20 Q3’20

-9%

8%

27%

-19%


-2%

9M’209M’16 9M’17 9M’18

5%

0%

9M’19

-3%

4%

• Latestresults


• ESG overview


11

Financials – Performance 9M

Solid financial performance despite challenging conditions

• Organic sales; 9M y/y: +1%; DKK sales -1%

• Gross margin at 56.2% — benefiting from productivity improvements, lower input costs and one-offs

• EBIT margin at 27.0% — roughly 1 %-point improvement y/y adjusted for one-offs

• ROIC incl. goodwill at 19.2% — impacted by increased invested capital and lower NOPAT

• Free cash flow before acquisitions at 2.7 billion DKK – mainly driven by better earnings quality

Latest results

Key financials 9M 2020 9M 2019 Q3 2020 Q3 2019

Sales performance, organic % +1 -2 -3 +1

Gross margin % 56.2 55.2 56.1 55.5

EBIT margin % 27.0 27.6 26.1 23.0

ROIC incl. goodwill % 19.2 20.5 18.9 17.7

Net investments excl. acquisitions DKKbn 0.6 0.6 0.2 0.2

Free cash flow before acquisitions DKKbn 2.7 2.1 0.7 0.8

• Latestresults


• ESG overview


12

Financials – Outlook 2020

2020 outlook;

• Organic sales performance of -2% to +2%, midpoint of range as most likely outcome

• Household Care and Food & Beverages maintained at mid-single digit growth

• Bioenergy and Technical & Pharma expected to decline double-digit

• Agriculture & Feed now expected at low-single digit growth

• EBIT margin and FCF expectations increased

• ROIC incl. goodwill maintained at 18% to 19%

• Stock buyback program totaling DKK1.5 billion for 2020 completed on August 24

Latest results

2020 outlook October 21* August 11April 7/

April 29 /July 8 January 24

Sales performance, organic % -2 to +2 -2 to +2 Suspended 1 to 5

EBIT margin % 26 to 27 ~26 Suspended ~27

ROIC (including goodwill) % 18 to 19 18 to 19 Suspended 20 to 21

Free cash flow before acquisitions

DKKbn 2.6 to 3.0 2.4 to 2.8 Suspended 2.5 to 2.9

For modelling purposes:

Effective tax rate % 19 to 21 19 to 21 Suspended 19 to 21

Net financials DKKm ~ -150 ~ -150 Suspended ~ -200

Net investments DKKbn 0.8 to 1.0 0.8 to 1.0 Suspended 0.8 to 1.0

Stock buyback program DKKbn 1.5 (finalized) up to 1.5 up to 1.5 up to 1.5

* Assumes that the exchange rates for the company’s key currencies remain at the rates prevailing on October 20 for the rest of 2020

• Latestresults


• ESG overview


13

Summary

Satisfactory performance considering COVID-19 implications

• 2020 outlook for sales at -2% to +2%; increasingly gaining confidence that the midpoint of the range is the

most likely outcome

• Increased outlook for EBIT margin and FCF before acquisitions

• New more customer-centric organization

Latest results

Better businesswith biology

• Latestresults


• ESG overview


1414

Equity story

Our products are used in +30 industriesWe launch 15-20 new products annually

15

Equity story

Catalytic FastSpecific Natural

Enzymes are…

… proteins that catalyze chemical reactions and thus often replace chemicals in products and industrial productions

Microbes are…

… living microscopic organisms, such as bacteria and fungi. They are essential for nourishment, immunity and replication in e.g. plants and animals

~90%of sales

~10%of sales

Baking

Animal nutrition & health

Textiles

Laundry

Wastewater

Food & nutrition

Beverages

Leather

Pulp & Paper

Bioenergy

• Latest results


• ESG overview


The world leader in industrial enzymes and microbes across the value chainWe are uniquely positioned to drive innovation opportunities

16

• Strong R&D organization and broad technology platform supports continued product development

• Forefront of technology to secure our leading position through innovation allowing for massive parallel screening: bigger libraries, better answers

Best-in-class productionInnovation leadership Diversified global presence

• Cutting-edge protein engineering improves enzyme efficacy

• Genetic engineering of host organisms and production process optimization is driving higher throughput

• Highly skilled technical sales and service teams enables long-standing customer relationships

• Highly diversified selling to +2,000 customers covering +30 industries in ~140 countries

Equity story

Increased pipeline selectivity to accelerate time to market from ~5 years to ~3 years

The world’s largest producer of fermented proteins. Efficiency gain have doubled the available capacity

Market and technology leader and key driver of market expansion in the industry

~48%market share1

2X

1. Novozymes market share within industrial enzymes

• Latest results


• ESG overview


Novozymes is about turning amazing science into sustainable biological solutionsSince 2013, we have more than doubled our average number of launches relative to the average number from 2000-2012

• Capitalize on critical mass and expertise to develop new cutting-edge technology and innovation

• Enable cross-fertilization to leverage innovation and synergies across industries

• Secure technology leadership through continued investments and technology scouting

17

21

2014 20162013 2015 2017 2018 2019

1718

20

17

13

20

Non-public Public

Balanced customer-approach to new product launches

We continue to find new uses for our technology within existing industries

Household Care case

Protease

Amylase

Lipase

Cellulase

Mannanase

Pectatelyase

Freshness

BuildInternally generated ideas

BuyUniversities, incubators and

start ups

Borrow (collaborate)

Customers and partners, Hello Science

Novozymes’ stage-gate model secures an efficient and standardized evaluation of new pipeline candidates

Equity story

CommercialLaunchDevelopmentDiscoveryFeasibility

• Latest results


• ESG overview


Enzyme technology improves Novozymes’ gross margin and profitabilityWe re-invest ~13% of sales into R&D projects for product innovation and productivity improvement

18

Equity story

Process innovation

1. Improve production strain

Micro-organismsRaw materials

Fermentation

FormulationPurification

2. Optimize industrial production

3. Improve enzyme efficacy

Technology development

Molecular biologyStrain development using protein engineering, genetic modification, DNA sequencing, etc.

Bio-informatics & Systems biologyApplication of computer algorithms in the computational discovery of enzymes in DNA databases

Screening systemsApplication of high-throughput robotics to find the best enzyme candidates

Industrial-scale fermentationProduction of enzymes and proteins whilst continuously optimizing and improving yields

1/3

Product innovation

2/3

Customer needs• Fight for profitability• Global race for consumer preferences• More regulation and standards

Planet needs• Global climate change• Societies stuck on oil• Biodiversity under threat

Consumer needs• Nine billion people by 2050• Increasing urbanization• Growing demand for food, water and health

• Latest results


• ESG overview


Solid global presenceDecentralized R&D meets local needs faster and better

19

⚫Main sites with production and R&D ⚪ Satellite production site ⚫ Satellite R&D site

North America

Sites: Multi-purpose production and R&DFTE’s: ~1,200

⚫

⚫

⚫⚪

⚪

⚪⚫

⚫ ⚫

⚫

Latin America

Sites: Regional productionFTE’s: ~300

Europe, Middle East& Africa

Sites: HQ, Multi-purpose production and R&D FTE’s: ~2,800

Asia Pacific

Sites: Multi-purpose production and R&D FTE’s: ~1,800

Equity story

33% of ’19 sales

5Y avg. organic sales growth

+1%

37%of ’19 sales


+3%

10% of ’19 sales

20% of ’19 sales


+4%


+4%

Emerging markets 34% of ’19 sales

Developed markets 66% of ’19 sales

• Latest results


• ESG overview


Uniquely diversified group creating synergies and opportunitiesWe launch technologies in five main business segments

20

-10

-5

0

5

10

15

20

3

5

4

0

1

2

4.7

20162015

1% 2% 1%

2017

0%

2018

1%

2019

4.74.6 4.6 4.8

2018

5%

2015

9%

2%

2016

5%

2017

-1%

2019

4.23.7 3.7

4.0 4.1

20182016

19%

2015

3%

2017

5%

-3%-5%

2019

2.1 2.2 2.1 2.0 1.9

2019

-6%0.8

6%

20172015 2016

13%

2%

2018

-3%1.0 1.1 1.0

0.7

2016 20182017

12%

-5%

2015

11%

-3% -3%

2019

2.5 2.42.6 2.8 2.8

Household Care

33% of ’19 sales

Food & Beverages

29% of ’19 sales

Bioenergy

20% of ’19 sales

Agriculture & Feed

13% of ’19 sales

>60%market share

LaundryAutomatic dishwash

Hand dishwashProfessional cleaning

30-40%market share

BakingGrain milling & starch processing

Food & nutritionBeverages

>50%market share

Conventional biofuelsBiomass conversion

20-30%market share1

Animal nutritionAnimal healthBioAgriculture

~50% market share2

Textile & leather Pulp & paperWastewater Biocatalysis

Equity story

Learn more Learn more Learn more Learn more Learn more

Technical & Pharma

5% of ’19 sales

Sales in DKKbn and organic sales growth Sales in DKKbn and organic sales growth Sales in DKKbn and organic sales growth Sales in DKKbn and organic sales growth Sales in DKKbn and organic sales growth

1. Novozymes market share of feed enzymes 2. Novozymes market share of enzymes only

• Latest results


• ESG overview


https://www.novozymes.com/en/advance-your-business/household-care

https://www.novozymes.com/en/advance-your-business/food-and-beverage

https://www.novozymes.com/en/advance-your-business/bioenergy

https://www.novozymes.com/en/advance-your-business/agriculture

https://www.novozymes.com/en/advance-your-business

In 2019, Novozymes helped customers save 87 million tons of CO2

through the application of Novozymes’ products

Equivalent to taking ~36 million cars off the road

Enzymes and microbes allow for the production of more with lessWe are reducing CO2 emissions together with our customers

21

Our innovations are paving the way for a better tomorrow

Higher production output

Raw material, water and energy savings

New differentiating products

Cleaner, smarter, safer production

Sustainable growth

Improve crop yield and health

15 kg CO2per ton of corn

Save time, water, energy and chemicals in textile production

350 kg CO2per ton of fabric

Produce sustainable energy from crops or waste

2200 kg CO2per 1000 liters of ethanol

Remove tough stains and enable low-temperature washing

100 kg CO2per ton of laundry

Improve animal health, growth and feed utilization

130 kg CO2per 1000 chickens

Improve filtration and flavor of beer and ensure raw material

optimization

25 kg CO2per 1000 liters of beer

Equity story

• Latest results


• ESG overview


Historical performance demonstrates delivery track record

22

Sales performance Net working capitalEBIT margin

0%

10%

20%

30%

40%

0

1

2

3

6

5

4

7

21.8%

27.7%

2011

DKKbn

2019

24.4%

EBITmargin

2010

22.3%

2012 2014

24.7%

28.3%

2013

27.2%

2015

27.9%

2016

27.9%

2017 2018

28.1%

EBIT margin EBIT

-10%

0%

10%

20%

0

5

20

10

15

4%

DKKbn

11%

7%

2018

Organic sales growth

2010 2011 2012

4%

2014

7%

2013

7%

2015

2%

20172016

4% 4%

-1%

2019

Organic sales growth Sales

5%

10%

15%

20%

25%

30%

4

0

1

2

3

7

5

6

9%

2010 2014

DKKbnNWC/Sales

16%

19%

2011

19%20%

2012

23%

2013

12%

2015

15%

20172016

14%

2018

24%

2019

NWC/Sales NWC

Net interest-bearing debt

0

4

0.2

-1

0.4

2

1

6

0.6

3

5 0.8

1.0

-0.4

-0.2

0.0

20192015

0.1

0.4

0.3

DKKbnNIBD

/EBITDA

2010

0.3

2011 20162012

0.2

2013

-0.2

2014

0.1

2017

0.8

0.5

2018

0.2

NIBD/EBITDA Net interest-bearing debt

31% 33% 34% 36% 37% 38% 39%42%

45%47%

4

3

0

2

1

5

6

7

50%

0%

60%

10%

20%

30%

40%

DKKbn

1.5

Payout ratio

2010 2011

0.8

20192012

2.9

2013

3.1

2014 2015 2016 2017

3.5

2018

3.4

0.5

1.0

3.2 3.3

Payout ratio (right axis)Buyback Dividend

Shareholder payoutFree cash flow before acquisitions

0%

10%

20%

30%

40%

5

1

6

2

3

0

7

419%

1.0

2.4

2010

10%

DKKbn

2011

FCF before acq./Sales

13% 14%

2012

1.4

2013

34%

2014*

17%

2015

2.7

2016

17%

2017

15%16%

1.6

2018 2019

2.3

1.8

4.2

2.3 2.2

15%

FCF before acq./Sales FCF before acq.

Equity story

* BioAg Alliance initiation

• Latest results


• ESG overview


Commercial investments

• Broader commercial footprint and customer innovation hubs in India, China and Turkey driving penetration in emerging markets

• Digitalization of basic sales and technical service tasks will allow more time to raise the bar for each customer

Innovation platform roll-outs

• The Freshness platform is the most revolutionary Household Care innovation in the past +20 years

• Improving animal health by way of biological solutions is good for business and good for animal wellbeing

• Responsible production of vegetable oils is key to cleaner and more sustainable foods

Strategic opportunity areas

• Increasing health and wellbeing with clinically proven products for human oral and gut health

• Feeding the world by providing alternative specialty protein for food ingredients via fermentation

Spearhead new business– and change the world

Invest in impactShowing up for our customers

Differentiate to succeedFocusing the R&D pipeline

Finding sustainable answers to the world’s problems is core to NovozymesWe are gearing the business for sustainable growth with ‘Better business with biology’

23

Sustainable agriculture

Water scarcity

Shifting demographics

Energytransition

Digitalizationand automatization

Equity story

• Latest results


• ESG overview


Measuring our future success by ‘Better business with biology’Mid-term targets 2020-2022

24

BusinessWorld Zymers

CLIMATE

Save 60 million tons CO2

by enabling low-carbon fuels in the transport sector in 2022

WATER

Reach > 4 billion peopleby providing laundry solutions that replace chemicals in 2022

PRODUCTION & CONSUMPTION

Gain 500,000 tons of food

by improving efficiency from farm to table in 2022

Organic sales growth

5+% per year1

EBIT margin

28% or higher by 2022

ROIC incl. goodwill

23% or higher by 2022

Model assumptionsNet working capital/Sales (improving as % of sales)Net investments/Sales (8% or below)Effective tax rate (21-22%)NIBD/EBITDA (~1x)Dividend payout ratio over the coming years (~50%)

Enable learningScore survey in 2022

Nurture diversity

Score 86 in our diversity index by 2022

Ensure wellbeingImprove safety by reducing the number of accidents by 2022

Inspire the worldPledge 1% of our time to local outreach activities by 2022

Equity story

1. 2020 will likely be impacted by portfolio changes

• Latest results


• ESG overview


World leader in BioinnovationGlobal leadership in enzyme and microbe development arise through a combination of competitive advantages

25

Equity story

Novozymes’ unique position to drive innovation opportunities

We are mastering the full value chain

Innovation leadership

Best-in-class production Diversified globalpresence

Unique sustainability profile

• ~87 million tons of CO2 emissions reduced (2019)• ~700 products sold in 140 countries• >1,500 people employed in R&D

• Close to 600bps in gross margin expansion• 15-20 product launches annually

Company background

• DKK 14.4 bn in sales (2019) • ~28% EBIT margin (2019)• ~21% ROIC (2019)

• Listed on Nasdaq Cph. in 2000 (NZYM B)• Majority owner: Novo Holdings

• ~25.5% of the capital and ~70% of the votes• 2 seats on the Board of Directors 7

8

9

10

11

12

13

14

15

16

20%

24%

10%

18%

12%

14%

16%

22%

26%

28%

30%

DK

Kb

n

2016 201720112010 2012 2013 2014 2015 2018 2019

Sales (left axis) EBIT margin R&D/Sales ROIC

+10 years of innovation-driven growth

• Latest results


• ESG overview


2626

Business overview

Household Care

Where we make a difference Our enzymes enable manufacturers to produce laundry and cleaning products that offer better

performance with reduced environmental impact

SDG impact

Our solutions contribute to reducing marine pollution and improving wastewater treatment

27

Laundry

Automaticdishwash

Hand dishwash

Professional cleaning

Learn more about the value propositions

The value we create

Innovative brands help grow your market share. We work with you to ensure our biological solutions make your products stand out

Deal with complex hygiene issues

Eliminateharsh chemicals

Save energy, water, time

Decrease dose, increase performance

Preserve fabrictexture, color

Remove stains,boost whiteness

• Latest results


• ESG overview




28

Household Care overview

Key segment trends

• Strong interest in freshness solutions for removal of malodor and grime, including in synthetics

• Compaction of laundry detergents remains a strong trend, driven by increased sales through online retailers and the desire to reduce the use of plastics

• Consumers are willing to pay more for natural products

• Growing interest in microbial cleaning and bio-based solutions for softeners and dishwashing by hand

Main growth drivers

• Higher enzyme inclusion and innovation to improve wash performance at low temperatures, improve sustainability and optimize formulations

• Demand for better-performing products in emerging markets

• GDP and population growth in emerging markets

Main growth barriers

• Traditional consumer washing habits, e.g. high temperatures

• Middle-class consumers’ ability to differentiate brand performance

• Regulations favoring surfactants over enzymes in emerging market product standards

• Sustained low petrochemical input costs reducing the adoption rate of high-performance enzymes

5Y average organic sales growth

+1%

0%

1%

2%

3%

3.5

4.0

4.5

5.0

DKKbn

1%

2015

Organic salesgrowth

2%

2016

1%

2017

0%

2018

1%

2019

4.64.7 4.7

4.6

4.8

5Y sales overview

33% of ’19 sales

Business overview

• Latest results


• ESG overview


29

Growth driver Freshness platform Lifestyle changes are spurring demand for freshness, and we are on track to deliver DKK 1bn

Consumers’ lifestyle changes are the drivers of growing hygiene needs…

Colder and shorter wash cycles

Shift in detergent format preferences

Increase in synthetic fabrics

Urbanization increasing density

(Reoccurring) malodor formation

Yellowing & greying/ color dullness

Layers of build up human body grime

Sources: Novozymes consumer study; Euromonitor, Jan 2018; Mintel GNPD, April 2018; UNFPA, April 2018; Grand View Research; April 2018

…which center around issues of odor and grime left on clothes even after wash…

…are key consumer concerns identified by Novozymes

Business overview

• Latest results


• ESG overview


30

Growth driver Enzyme inclusionWe see large potential for future enzyme inclusion, especially in emerging markets

Significant up-dosing and penetration potential in emerging markets in general and in Asia Pacific in particular

0

20

40

60

80

100

0

8

2

4

10

6

12

14

Do

sin

g (i

nd

exed

)

Asia Pacific

Bill

ion

to

ns

Western Europe North America Middle East and Africa

Latin America Eastern Europe

5x volume opportunity

7x enzyme up-dosing opportunity

Detergent volume (left axis) Enzyme dosing index

Sources: Euromonitor, May 2019; Novozymes analysis

• Innovation hubs in China, India and Brazil

• Sales offices in Brazil, China, India, Mexico, Pakistan, Malaysia, South Africa and Turkey

• New sales offices opened in Kenya and Thailand

• Sales presence in Colombia, Egypt, Indonesia, Philippines, Nigeria and Venezuela

• Emerging market-specific products and blends

Presence and emerging market solutions to unlock potential

⚫⚫

⚫⚫

⚫

⚫ Innovation hub ⚫ Sales office

⚫

⚫⚫

⚫

⚫⚫

⚫⚫⚫ ⚫ ⚫

⚫

Business overview

• Latest results


• ESG overview


31

Growth driver Detergent compactionWe believe enzymes can contribute even more to a detergent and to compaction

Surfactants

Enzymes

Polymers

Builders

Perfume

Other

Sources: IHS chemical 2014; Euromonitor, 2019; expert interviews, 2019 *EU representative example, value as percentage.

Surfactants

Multienzymes

Polymers

Builders

Perfume

Other

• New and more stable enzymes to replace surfactants

• Using enzymes to compensate for performance loss when reducing pH level and the need for builders

• Freshness solutions to reduce the need for perfume

• Enzymes to replace polymer functions, such as fabric care and whiteness

Business overview

• Latest results


• ESG overview


Food & Beverages

Where we make a difference Enzymes enable producers to diversify their product ranges and develop products that stay fresh longer

SDG impact

Our solutions contribute to making food production systems more sustainable

32

Baking

Grain milling & starch processing

Food & nutrition

Beverages


The value we create

It's hard to keep up with ever-changing food and beverage trends. Stay one step ahead and get more out of your raw materials with leading enzyme innovations

Freshnessand taste

Health, safety and sustainability

Productivityand yield

New substratestreams

• Latest results


• ESG overview




33

Food & Beverages overview

Key segment trends

• Growing informed consumption for high-quality, healthy and sustainable foods i.e.

• Plant protein, acrylamide removal, less sugar added, low lactose, low transfats and enzymatic interesterification

• Food producer focus on cost optimization, processing aids and brand building

• Consumers focus on brands using local and clean label ingredients catering to local tastes, tradition and cultures

• Strong interest from emerging markets in production optimization solutions and in processed foods

+4%

5Y sales overview

29%of ’19 sales

3.0

3.5

-2%

4.0

4%

4.5

0%

2%

6%

8%

10%

DKKbn

4.1

Organic salesgrowth

2018

2%

2016

9%

3.7

5%

2017

5%

-1%

2019

3.7

4.0

4.2

2015

Business overview

Main growth drivers

• Demand for better and more convenient food with awareness about food safety and “naturally healthy” products

• Growth in market for “food intolerance” products, such as lactose-free

• Demand for substitutes for animal protein and growth in grain and VOP

• Demand for optimization of raw materials and production processes

• Optimization to help manage commodity input cost volatility


• Conservative industries with consumer preference for traditional foods

• Consumer and industry skepticism about technology in food and beverages production

• Fragmented local markets and dietary habits as well as regulation


• Latest results


• ESG overview


34

Growth driver The grain value chain

Grain milling Starch processing

Corn

Liquefaction

LpHera®

Isomerization

Sweetzyme®

Saccharification

Extenda®

Secura®

Starch slurryfrom wet mill

Gluten

Fiber

Starch

Milling

Frontia®

Purification

Maltose syrups

Mixed syrups

Glucose syrups

Refining

Fructose syrups

Starch

Wet

mill

Ref

iner

y

Novozymes offers multiple solutions across the value chain

• Significant presence in starch. Industry leaders in enzymatic starch conversion for sweeteners

• Portfolio that includes LpHera®, Extenda®, Secura® and Sweetzyme®

• Frontia® opens a new segment with our starch customers in wet milling, enhancing the yield of key value streams in protein and starch

Business overview

• Latest results


• ESG overview


35

Growth driver Vegetable oil processing Enzymatic applications for vegetable oil processing show huge potential

Oilseed

• Cooking oil• Margarine & shortenings• CBE• OPO, etc.• Low transfat & 3-MCPD

• Fatty acids• Fatty alcohols• Food & non-food additives• MCT

End products

Business overview

RefineryRefining

MillExtraction

Specialty fats producerSpecialty oils & fats

Oleo playerOleochemicals

New agro-processing applications

• Novozymes offers multiple solutions across the value chain

• Improving efficiency in vegetable oil production is a >DKK 1bn opportunity

• Replacing chemical catalysts for specialties is a DKK 400m opportunity

• Latest results


• ESG overview


Bioenergy

Where we make a difference Our enzymes and yeasts maximize the efficiency of

ethanol plants

SDG impact

Novozymes promotes the development and deployment of low carbon transportation fuels

36

Conventionalbiofuels

Biomassconversion


The value we create

You work hard to create the most value at the lowest cost and to stay flexible enough to adapt to changing markets. We work hard to deliver solutions and services that will help you succeed

Eliminate operation stress

Superior viscosity reduction

Release bound starch

Ethanol yield improvement

• Latest results


• ESG overview




37

Bioenergy overview

Key segment trends

• Growing demand for clean energy as climate change and sustainability are high on public agendas

• Increase in global biofuel mandates continues, driven by key emerging markets

• Strong pressure on US ethanol industry due to low producer margins and high inventories +2%

5Y sales overview

20%of ’19 sales

-10%

-5%

0%

5%

10%

15%

2.8

2.3

3.0

2.6

2.5

2.4

2.7

2.9

12%

2.8

2.4

DKKbnOrganic sales

growth

-3%

-5%

2015 2017

-3%

2016

11%

2018 2019

2.5

2.6

2.8

Business overview

Main growth drivers

• Stable and coherent political mandate to drive adoption of biofuels

• Industry consolidation and focus on process economics driving demand for enzymatic solutions that enhance yield

• Innovation for yield enhancement and chemical cost reduction

• Demand for reducing CO2 emissions in transport sector


• Lack of political commitment to set and enforce blending mandates

• An energy industry with a vested interest in traditional fuels

• Competition with other transport technologies for “best way” to reduce CO2 emissions

• Competition with other industries and technologies for feedstock conversion


• Latest results


• ESG overview


38

Market BioenergySizeable market with local political support

⁓1.5bn

⁓16bn

⁓9bn

⁓0.9bn

⁓0.5bn

ChinaAmbition to achieve E10 by 2022

European UnionKey legislation: Renewable Energy Directive

IndiaStrong governmental push for public

investment in 1G and 2G

Latin AmericaKey legislation: RenovaBio

North AmericaKey legislation:

Renewable Fuel Standard

Business overview

⚫ = Production in bn gal per year

• Latest results


• ESG overview


39

Case Ethanol production

0.5

-0.1

-0.2

0.2

0.0

0.1

0.3

0.4

0.6

0.7

Co

ntr

ibu

tio

n m

argi

n (

USD

per

gal

)

20162015 2017 2018 2019 2020

20

14

16

18

22

24

26

28

Bar

rels

in m

illio

ns

2015 2016 2017 2018 2019 2020

0

5

30

25

10

15

35

20

40

Bill

ion

gal

lon

s

7.2

14.8

2015

6.8

15.4

2016

6.9

15.9

2017

7.9

16.1

2018

8.6

15.8

2019

25.8 26.2 26.828.6 29.1

USChinaRest of World BrazilEU

US ethanol inventoriesPrice developments for ethanol and corn

0.0

3.0

0.5

2.5

4.0

1.5

1.0

2.0

3.5

4.5

5.0

2015 2017

USD

per

gal

/bu

2016 2018 2019 2020

Ethanol Corn

Global ethanol production US ethanol producer margin

Business overview

Sources: Renewable Fuels Association (RFA), Center for Agricultural and Rural Development (CARD), Iowa State University, and U.S. Energy Information Administration (EIA)

• Latest results


• ESG overview


40

Growth driver Addressing complexity in bioethanol productionDesigning enzymes for individual plants

Business overview

The ethanol process

• Enzymes are applied in multiple stages, along with yeast in fermentation

• Using our diagnostic program to deliver custom fermentation solutions, tailored to a plant’s unique operating conditions

1. PastBasic products for liquefaction and saccharification

2. PresentMultiple offerings across liquefaction, saccharification and now also yeast

3. FutureIncreasingly customized solutions for liquefaction and saccharification, novel solutions for other process steps

Convert feedstock into fermentable sugars Ferment sugars to EtOH

Slurry Jet cooker Liquefaction Fermentation Distillation Ethanol

YeastSaccharificationLiquefaction

From standard to more customized solutions

• Latest results


• ESG overview


Agriculture & Feed

Where we make a difference Our solutions improve yields in farming and enhance the digestibility and nutritional value of animal feed

SDG impact

Our solutions support sustainable food production and resilient agricultural practices

41

Animal nutrition

Animal health

BioAgriculture


The value we create

Enzymes and microbes are nature's own perfect tools. We put them to work in agricultural solutions that increase the efficiency of crop and livestock production

Improve feed and gut functionality

Improve animal gut health

Bioyield enhancement

Powerful protection

• Latest results


• ESG overview




42

Agriculture & Feed overview

Key segment trends

• Agriculture affected by more frequent incidents of extreme weather

• Sustainable yield enhancement still in high demand as world population grows, putting pressure on agricultural sector to produce more and better products while minimizing negative environmental impact

• Farmer sensitivity to fluctuations in commodity prices

• Increasing focus on feed efficiency and animal health with less use of antibiotics

+4%

5Y sales overview

13%of ’19 sales

-10%

-5%

0%

5%

10%

15%

20%

1.9

2.2

1.7

1.6

2.3

1.8

2.0

2.1

2.4

DKKbn

5%

Organic salesgrowth

19%

2015 2016

-3%

2017

3%

2.1

2018

-5%

2019

2.1

2.2

2.0

1.9

Business overview

Main growth drivers

• Governments in emerging economies focusing on agriculture productivity

• High input costs for farmers with increased chemical and fertilizer scarcity

• Regulatory requirements for more sustainable farming practices and focus on animal welfare

• Growing calls for reduced use of antibiotics in farm animals

• Increased demand for food and protein due to changes in dietary habits


• Low pricing for traditional fertilizers, pesticides and crops

• Incomplete scientific understanding of plant and animal microbiome

• Fragmented and complicated regulation in local markets


• Latest results


• ESG overview


43

Case Our new BioAg setup allows for broader outreach

More flexible setup in the future will enable Novozymes to bring biological solutions to more partners and additional crops – and to continue the journey towards the targeted 250-500m acres by 2025

Partnershipcontinuation

New partnership

Bayer and Novozymes continue close commercial and innovation partnership

in CORN

In bioyield outside of corn, Bayer continues to be the main

commercialization partner in the key SOY markets of the

US, Argentina, and Brazil

A commercial partnership with Univar Solutions in the Canadian market with distribution rights to our main downstream BIOYIELD products

In BIOCONTROL, Novozymes will continue its present activities and collaborations independently. This includes the collaboration with Syngenta

New strategic opportunities with UPL for development within BIOCONTROL as well as in certain focused crops, e.g. peanuts

CORE PARTNERSHIPS

FUTURE PARTNERSHIPS

Business overview

• Latest results


• ESG overview


44

Case We are committed to our core technologies and partner with industry leaders to win

Feed and animal gut health enzymes

Bacillus for monogastrics

Hatchery probiotics

Natural solutions for cattle

We develop and commercialize these technologies together with our partners, who are leading players in their respective industry

Enzymes

• Full portfolio of feed enzymes

• Recently launched game-changing innovation

• Improve the sustainability of livestock production

Probiotics

• Growing area for Novozymes with pipeline of products

• Alterion® tracking well

• Support the trend of reducing antibiotic use in animal farming

Business overview

• Latest results


• ESG overview


45

Case Scientific evidence supports enzyme penetration We enable livestock farmers to reduce feed costs

Market is sensitive to feed and meat price changes

Low margins leave the producers with different options

Scientific education of customers to increase penetration

70% of the total cost of poultry production is feed including additives which accounts for around 5%

Poultry producer margins are low when:

• Feed prices are high• Meat prices are low

Feed formulation is an art and the nutritionist is often the decision maker. The scientific and nutritional philosophies combined with commodity prices determine enzyme inclusion levels

During tough conditions, producers see two options:

• Cost out = reduce enzyme inclusion • Increase efficiencies = increase enzyme inclusion

The degree of enzymatic and nutritional understanding determines the decision:

• Advanced/’modern’ customers increase enzyme inclusion

• Simple/traditional customers reduce enzyme inclusion

• Enzyme inclusion increases the efficiency of poultry producers

• Lack of scientific understanding drives uneconomical customer decisions

Business overview

• Latest results


• ESG overview


46

Growth driver Attractive value propositions in feed enzymes

10-15%

ProteasePhytase Carbohydrase

80-90%

35-45%

Estimated penetration across species

ProAct - Protein• Maximizing protein utilization and improving nutritional

value• Improves protein digestibility by >20%, increasing feed

conversion• Reduces need for additional protein feed, such as

soybean meal

Phytase - Phosphate• Only 3-30% of phosphate in feed is available to the

animal• Ronozyme NP® releases half of the phosphate bound –

Ronozyme HiPhos® releases nearly all of it• Significant reduction in phosphorous excretion from

animals as farmers can save 25-100% of added phosphate

Others - Energy• Xylanase & glucanase increase non-starch polysaccharide

digestion• Amylase improves starch digestibility, releasing more

energy• Cellulase improves fiber digestion• Grain feed savings of ~2.5% and less pollution (ammonia,

nitrate, nitrous oxide and CO2)

Business overview

• Latest results


• ESG overview


Technical & Pharma

Where we make a difference Our solutions improve processes across industries such

as textiles & leather, wastewater, pulp & paper and pharma

SDG impact

Our solutions contribute to reducing marine pollution and improving wastewater treatment.

47

Textile & leather

Pulp & paper

Wastewater

Biocatalysis


The value we create

Our enzymatic and microbial solutions target your customers’ unmet needs across global markets. The result is a strong pipeline of customer-relevant innovations that will help you grow your business

Degrade wastewater compounds

Improve the strength of your fabric

Prevent wastewater odors

Longer-lasting and more sustainable

textiles

Support growth in biomass

Bleach clean-up

• Latest results


• ESG overview




48

Technical & Pharma overview

Key segment trends

• Water scarcity and water pollution driving legislation and demand for solutions that reduce water consumption and improve water quality

• Major apparel companies are rethinking their supply chains to accommodate an increased public interest for sustainability in fashion

• Regulatory changes might follow leading to renewed interest for biological alternatives to the harsh chemicals currently being used

• Focus on cost reductions and process optimization continues

+2%

5Y sales overview

5%of ’19 sales

-10%

-5%

0%

5%

10%

15%

1.2

0.8

0.7

0.9

1.0

1.3

1.1

1.4

20192017 2018

1.0

2%

DKKbnOrganic sales

growth

1.0

6%

2015

-6%

13%

2016

-3%

1.1

0.8

0.7

Business overview

Main growth drivers

• Sustainability in technical industries such as textiles

• Consumer demand for improved textile quality and longevity

• Demand for wastewater solutions due to increasing water scarcity and pollution cleanup regulations

• Enzymatic solutions potentially optimizing processes and lowering costs


• Fragmented and chemically-driven technical industries

• Water prices potentially so low that there is no incentive to invest in water-saving solutions

• Price-driven acceptance of low quality textiles and raw materials in emerging markets

• Preference for lower-cost, chemical solutions to enable market growth


• Latest results


• ESG overview


Strategic opportunity areas

49

Ret

urn

on

inve

stm

ent

(IR

R)

Launch probability

*IllustrationSize illustrates project resource

allocation and color illustrates active projects

Anchor businessCreating stable growth and revenue

Value creatorCreating strong base for profitability to fund growth

Growth starFueling short-term growth with sharp focus on execution

Development seedFueling mid-term growth but still evolving

Strategic opportunity areasContributing to long-term growth

Human oral and gut health

Specialty alternative proteins

How it fits with ‘Better business with biology’Catalysts to solve global needs

New opportunity areas at the intersection of sustainable challenges and customer needs which contributes to our long-term growth

• Nurtured and funded in a dynamic structure separate from the core business

• Governed by an Innovation Council using a differentiated Investment approach

• Pressure-tested and refined using rapid learning cycles

Spearhead new business– and change the world

Invest in impactShowing up for our customers

Differentiate to succeedFocusing the R&D pipeline

Investing more than an additional

DKK 150 millionin new strategic opportunities

over three years

• Latest results


• ESG overview


50

Connecting our discovery engine with consumer insights enables innovative biological solutions for oral and digestive health

Human oral and gut healthDeliver clinically-proven products for human oral and gut health

Specialty alternative proteinsProviding alternative specialty protein for food ingredients via fermentation

Strong R&D and fermentation capabilities uniquely position us to deliver specialty protein ingredients

1.5

2.0

0.0

0.5

1.0

2027

Mio. tons

2020 2021 2022 2023 2024 2025 2026 2028 2029 20300

20

40

60

80

2018

DKKbn

2023

Market for probiotics and enzymes within consumer health

Fermented proteins demand forecast

Sources: Lux Research Inc, Plant Based Foods Association, Euromonitor, TechNavio, Nicholas Hall, Nutrition Business Journal, Industry Analysts, Acute Markets, Nature Biotechnology, Novozymes analysis

Business overview

• Latest results


• ESG overview


5151

ESG overview

Committed to making a better worldAt Novozymes, sustainability is a key component of our business strategies and management processes

52

ESG overview

We manage our performance on material ESG issues through relevant targets and KPIsIn 2015, we made the UN Sustainable Development Goals (SDGs) our

own. The SDGs inspired our purpose and strategy and we began our

journey to contribute to the goals

Stepping up our ambition with ‘Better business with biology’

addressing three global challenges – climate, water and sustainable

production and consumption

Novozymes is among the first few companies globally to set up

science-based targets validated and accepted by the Science Based

Targets initiative (SBTi)

• Latest results


• ESG overview


53

ESG overview

The worldMeasuring our success

Our operationsMeasuring our success

Novozymes is committed to help solving three global challenges: Climate, Water and sustainable Production & Consumption

We hold ourselves accountable for reducing the negative impact from our operations in these areas

Save 60 million tons CO2

by enabling low-carbon fuels in the transport sector in 2022

Reach > 4 billion people by providing laundry solutions that replace chemicals in 2022

Gain 500,000 tons of food by improving efficiency from farm to table in 2022

Reduce absolute CO2 emissions from operations by 40% by 20222

Develop context-based water management programs at 100% of sites by 2022

Achieve 100% circular management of our biomass by 2022

Climate

Limit global warming increase to 1.5 degrees

Climate

50% reduction in absolute CO2 emissions from operations on

our way to becoming carbon neutral in 20501

Water

Ensure clean and efficient water use

Water

100% of sites manage water in

balance with local conditions

Production & consumption

Produce more and better products with less impact

Production & consumption

100% of key materials and waste

managed in circular systems

1. Compared to a 2018 baseline and is being verified by SBTi 2. Compared to a 2018 baseline

• Latest results


• ESG overview


Produce more with lessWe are reducing CO2 emissions together with our customers

54

In 2019, our customers saved an estimated 87 million tons of CO2 emissions by applying Novozymes’ products. The savings achieved are equivalent to taking approximately 36 million cars off the road

87,000,000tons of CO2 emissions saved

Paper making

150 kg CO2per ton of pulp

Beverage

25 kg CO2per 1000 liters of beer

Animal feed

130 kg CO2per 1000 chicken

Leather

50 kg CO2per ton of hide

Textile

350 kg CO2per ton of fabric

Biomass based biofuel

2200 kg CO2per 1000 liters of ethanol

Agriculture

15 kg CO2per ton of corn

Detergent

100 kg CO2per ton of laundry

Vegetable oil

44 kg CO2per ton of oil

ESG overview

60

69

76

8887

2015 2016 2017 2018 2019

+45%

Estimated annual CO2 emissions saved (millions tons of CO2)

• Latest results


• ESG overview


We plan to continue our journey of operational excellenceSince 2010, we have grown our revenue by 48%, while absolute emissions from Novozymes’ operations have risen by only 6%

55

Steady improvement in employee metrics

0%

1%

2%

3%

0

1

2

3

4

5

6

7

8

2005 2007 2009 20172011 20192013 2015

Employee absence (right axis) Accidents per million working hours

-20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

20132005 2011 20152007 2009 2017 2019

Ch

ange

sin

ce 2

00

5

CO2 emissionsWaterSales Gross Profit Energy

Decoupling resource consumption from economic growth

1. Defined as a three-year rolling average of occupational injuries with absence per million working hours

31%Women in senior managementTarget of 29% or higher - 2018: 30%

77Employee satisfactionTarget of 75 or higher - 2018: 78

0.9 per million working hours

Lost time injuriesTarget of 1.51 or less - 2018: 2.4

1.9%Employee absenceTarget of 2.0% or less - 2018: 2.1%

(4)%Growth in absolute water consumptionTarget of organic sales growth or less - 2018: 1%

30%Renewable energyTarget of 28% or higher - 2018: 23%

(5)%Growth in absolute energy consumptionTarget of organic sales growth or less - 2018: 1%

(24)%Growth in absolute CO2 emissions Target of organic sales growth or less - 2018: 7%

ESG overview

• Latest results


• ESG overview


Keeping the organization accountableSustainability governance, activities and targets are anchored and executed across functions and operations

In 2018, Novozymes established the SDG Governance Board to build a shared understanding of the opportunities and risks associated with the UN Sustainable Development Goals (SDGs) and to translate this knowledge into corporate priorities and targets

56

The Impact Board sets Novozymes’ strategic global direction and ambition in respect of the SDG

The Foundation Board ensures the internal foundation for Novozymes’ sustainability performance across operations

Sustainability Awards and Recognition

Sustainability is governed at the highest level by the Board of Directors and Executive Leadership Team

ESG overview

Achieving sustainability recognition gives credibility to Novozymes' work and inspires other companies to drive and improve sustainability performance

Broad remuneration policy and sustainability governance

40%

40%

20%

Organicsales growth

Economic Profit

SustainabilityThe new incentive program covers the Executive Leadership Team, the Senior Leadership Team and directors, and other employees

Sustainability targets, in line with ‘Better business with biology’, will be allocated if performance targets achieved on four sustainability parameters; climate, water & circular, workplace, and Zymers by the end of 2022

The sustainability component will only be unlocked if Novozymes performs above the floor levels across all four parameters

FTSE4Good Index Series

CDP Climate Change

Ethibel

CDP Water Security &CDP Supply Chain

Euronext VigeoIndices

Dow Jones Sustainability

Weighting in remuneration

policy

• Latest results


• ESG overview


Novozymes combating the world’s pressing problemsSustainability drives the way we do business and we have always taken the triple bottom line approach

57

Broad commitment across the organization as part of new remuneration policy

Focus on a balanced approach to the remuneration policy with the sustainability component only being unlocked if we perform above the floor levels across all parameters; climate, water & circular, workplace, and Zymers by the end of 2022

We are committed to doing our part and to helping the world reach the goals of the Paris Agreement

We have identified six SDGs to which we believe Novozymes’ technologies and actions can contribute significantly

ESG overview

Absolute, not relative measures of CO2 emissions and consumption of water and energy

Since 2010, we have been successful in decoupling resource consumption from economic growth across all parameters

External auditing of our non-financial targets by PwC secures validity and transparency of our progress

Our CO2 emission targets has been validated by the ScienceBased Targets initiative (SBTi) as being in line with a 1.5°C pathway

DKK

• Latest results


• ESG overview


5858

Financial overview

Multiple tools to optimize cost base

59

Financial overview

Factors impacting our input pricesFactors impacting COGS Split of Cost of Goods Sold

~20%

~35%

~45%

RawMaterials

Energy/Utilities & others

Indirectproduction

costs

Raw materials consist primarily of different chemicals and carbohydrates e.g. sucrose, maltose, glucose and starchGeographical location, i.e., differences

in input

Note: accounting practice implies that there is a time lag between current price levels and COGS

Contractual agreements, i.e., timing and duration

Substitution possibilities, i.e., flexibility in use of different inputs, not dependent upon one source

Price developments for other products produced by our suppliers from the same input

Currency

Productivity improvements

Input prices

USD

Approximately split of COGS

• Latest results


• ESG overview


Historical performance demonstrates delivery track recordMid-term targets 2020-2022

60

22%21%

20% 20%

23%

26% 25% 26%24%

0%

10%

20%

30%

10

0

20

5

15 21%

ROIC

2011 2016

DKKbn

2010 2012 2013 2014 2015 2017 2018 2019

Invested capitalROIC

Sales performance

ROIC incl. goodwillEBIT margin

Financial overview

DKKEBIT margin at or higher than 28% by 2022

ROIC incl. goodwill at or higher than 23% by 2022

Sales performance Organic revenue growth of +5% per year1

11%

7%

4%

7% 7%

4%2%

4% 4%

-1%

-10%

0%

10%

20%

20

0

5

10

15

25

14.4

Organic sales growthDKKbn

2010 2011

9.7

20152012 2013 2014 2016 2017 2018 2019

10.511.2 11.7

14.5

12.514.0 14.1 14.4

Organic sales growth Sales

0%

10%

20%

30%

40%7

2

1

0

3

4

5

6

2018

24.7%

2010

DKKbnEBIT

margin

2015

21.8% 22.3%

2011

24.4%

2012 2013

27.2% 27.9%

2014

27.9%27.7%

2016 2017

28.3% 28.1%

2019

EBITEBIT margin

1. 2020 will likely be impacted by portfolio changes

• Latest results


• ESG overview


Historical performance demonstrates delivery track recordModel assumptions 2020-2022

Net investments CAPEX to sales at or less than 8%

61

Net working capital

Net investments

16%

19%20%

23%

15%

24%

5%

10%

15%

20%

25%

30%

0.0

2.5

1.0

0.5

1.5

3.0

2.0

3.5

4.0

4.5

5.0

12%

2010 2012

DKKbn NWC/Sales

2011 2013

9%

2014 2015 2016

14%

2017

19%

2018 2019

NWC/Sales NWC

14%13%

11%

7%6%

7%8%

12%

10%

7%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

0.0

2.0

0.5

1.0

2.5

1.5

3.0

DKKbn CAPEX/Sales

20122010 2011 2013 2014 2015 20192016 2017 2018

CAPEX/Sales CAPEX

Net interest-bearing debt

4.0

-0.5

0.0-0.2

0.2

-1.0

0.4

0.6

1.0

2.0

0.5

1.0

1.5

0.8

2.5

3.0

3.5

4.5

0.0

-0.42015

-0.2

0.3

2010

DKKbn

0.1

0.3

0.4

NIBD/EBITDA

2011

0.1

0.2

2012 2013 2014

0.2

20192017

0.5

2018

0.8

2016

NIBD/EBITDA Net interest-bearing debt

Financial overview

DKK Net interest-bearing debt ~1x NIBD/EBITDA

Net working capital Improving as a percentage of sales

• Latest results


• ESG overview


Shareholder distribution and dividend payouts

62

Financial overview

As of December 2019• Novo Holdings held 25.5% of the share capital and controlled 72.0% of votes (all A shares and 8.6% of B shares)

• Novozymes had more than 52,000 shareholders of whom 95% were private shareholders in Denmark

• ~50 institutional investors incl. Novo Holdings held ~58% of the B shares

30%

27%

18%

22%

3%

Denmark UK Rest of Europe North America Rest of World

Shareholder distribution of B shares1

Novo Holdings was the only major shareholder holding more than 5% of Novozymes’ common stock

31%33%

34%36% 37% 38%

39%

42%45%

47%

4

7

5

10%

0

1

2

0%

3

30%

6

60%

50%

20%

40%

0.6

2.0

DKKbn

0.5

0.8

1.2 1.4

3.5

Payout ratio

2010

0.4

2011

0.8

0.7 0.8

2012 2013

2.0

3.1

0.91.5

2014

2.0

1.1

2015

1.0

2.0

2016

2.0

1.3

2018

2.0

2017

0.5

1.5

2.93.2 3.3 3.4

2019

Buyback Dividend Payout ratio (right axis)

DKK ~23.2bn returned to shareholders since 2010All B shares listed in Copenhagen under the symbol ‘NZYM B’ and all A share capital and 18,931,400 B shares held by Novo Holdings, who is wholly owned by the Novo Nordisk Foundation

1. Distribution equals where shares are managed, Dec 2019

• Latest results


• ESG overview


Foundation ownership advocates long-term focus

63

Structure and ownership

Novo Nordisk Foundation

Institutional and private investors

Novo Holdings A/S

25.5% of total shares72.0% of votes

74.5% of total shares28.0% of votes

Purpose of the Foundation

The Novo Nordisk Foundation is an independent Danish foundation with corporate interests. The objective of the Novo Nordisk Foundation is twofold:

• To provide a stable basis for the commercial and research activities conducted by the companies of the Novo Group

• To support scientific and humanitarian purposes

120

0

60

20

240

40

140

80

100

160

180

200

220

Bshares

Nu

mb

er o

f sh

ares

(m

illio

ns)

A shares

Foundation

Treasury

Free-float

Financial overview

• Latest results


• ESG overview


Our investor relations teamFurther investor relations information is available from the company’s website at investors.novozymes.com

64

Tobias BjörklundHead of Investor relations+45 3077 [email protected]

Naja WivelCoordinator+45 3077 [email protected]

Carl AhlgrenIR officer (US)+1 919 702 [email protected]

Ulrik Wu SvareIR officer+45 3077 [email protected]

Financial overview

• Latest results


• ESG overview


Date post:	25-Feb-2021
Category:	Documents
Upload:	others
View:	1 times
Download:	0 times

Roadshow presentation 9M 2020...Roadshow presentation 9M 2020 ... • Cutting-edge protein...

Documents