Presentation - Novozymes

NOVOZYMES
May 22, 2012, Cheuvreux Pan-European Forum
Thomas Videbæk, EVP, Biobusiness

Safe Harbor Statement
This presentation and its related comments
contain forward-looking statements, including
financial expectations.
Forward-looking statements are by their very
nature associated with risks and uncertainties
that may cause actual results to differ
materially from expectations.
The uncertainties may include unexpected
developments in the international currency
exchange and securities markets, marketdriven
price decreases for Novozymes’
products, and the introduction of competing
products in Novozymes’ core areas.
2

Novozymes –
The World Leader in Bioinnovation
• Business consists of two segments:
Enzyme Business and BioBusiness
• 2011 sales: DKK 10,510 million
Founded 1941
Listed 2000
• 2011 EBIT margin: 22.3%
Ticker
NZYM B
• More than 700 products used in 130
countries in over 40 different industries
Exchange
Copenhagen
Market Cap (MDKK)* ~ 52,000
• ~ 7,000 granted and pending patents
• + 5,800 employees
• Two share classes; A and B shares
• A share capital and 11% of B shares
(25.5% of O/S; 70.1% of votes) held by
Novo A/S, the management company of
the Novo Nordisk Foundation
Enzyme Business
BioBusiness
Household
Care
Food &
Beverages
Bioenergy
Feed &
other Tech.
Microorganisms
Biopharma
*A+B shares March, 2012
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Delivering Tomorrow’s Solutions Today
Delivering solutions from
nature:
food applications, detergents,
pharmaceutical products, the
energy sector and countless other
applications
Helping companies
become more efficient:
energy efficiency, saving raw
materials, reducing waste and
replacing chemicals
This unique approach
leads to:
“more with less”
higher quality, lower costs, better
yields and a better environment
4

Multiple Drivers Create a Sustainable
Business with Significant Growth Potential
Drivers
Ambition
• Energy efficiency
• Cost/performance
• Waste reduction
• Sustainability
• Scarce raw materials
Long-term financial
ambition:
> 10% sales growth
> 20% EBIT margin
> 22% ROIC
• Replacing chemicals
5

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 invested in R&D
• Global provider of enzymes to all market segments creates global market leader position
• Leveraging competencies across segments accelerates pace of innovation, reduces competition and creates
high barriers to entry
31% 29% 17%
13% 7%
3%
Household
Care
Food &
Beverages
enzymes
Bioenergy
Feed & other
Technical
Microorganisms
Biopharma
• Laundry &
Dishwasher
detergents
• Baking
• Brewing
• Starch to
syrups
• Wine & juice
• Corn ethanol
• Cellulosic
biofuels
• Animal feed
• Textile
• Leather
• Pulp & Paper
• BioAgriculture
• Wastewater
• Cleaning
• Drug delivery &
formulation
• Medical devices
Enzyme Business
BioBusiness
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Undisputed Market Leader
Expanding Enzyme Application
Global enzyme market value:
2000:
DKK ~ 12bn
2011:
DKK ~ 20bn
Global enzyme market value
2011: DKK ~ 20bn
Rest of
market
58%
Novozymes
42%
Rest of
market
53%
Novozymes
47%
Others and
captive
26%
Market potential*
Current enzyme market
DKK ~ 20bn
DSM
6%
Genencor
(DuPont)
21%
Novozymes
47%
Untapped market
Multi-billion (US$)
Rules of competition
dictated by innovation
*Global markets for chemicals, food ingredients, feed additives, etc.
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Novozymes Growth Strategy – Rethink Tomorrow
Products &
Opportunities
Customers,
Consumers &
Stakeholders
Innovation
8

2000
2002
2004
2006
2008
2010
2000
2010
Enzymes are Gaining Traction in Detergents
The advantages of
enzymes..
..drive new product
launches..
..increasing the
overall penetration
of enzymes
Wash performance
1000
# of detergents
containing enzymes
launched globally
100%
Share of detergents
with enzymes
Surfactants
Builders
Chemicals
replacement
900
800
700
600
90%
80%
70%
60%
Europe
LATAM
NA
90%
75%
70%
60%
500
50%
AP
Cost stability
400
300
40%
30%
MEA
200
20%
100
10%
Compaction
0
0%
Source: Novozymes estimates and Mintel
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Significant Opportunities in Animal Feed
Increasing feed costs
and lower animal
production margins..
..and global increase in
meat demand..
..increases the value
proposition of using
more enzymes
Feed grain cost Meat sales prices
250
200
150
100
50
2001 2010
Indexed price of phosphate
1.000
750
500
250
0
2006 2011
Indexed price of soybean meal
250
200
150
100
50
2006 2011
1%
Global
human
population
growth p.a. for the next 20
years
2%
Global
growth
p.a. in pig
meat consumption from
2006-2020
3%
Global
growth
p.a. in
chicken meat consumption
from 2006-2020
Increased
phosphorous
uptake
Reductions
in phosphate
excretion
Increased
protein
utilization
Improved
nutritional
value
Sources: OECD, IMF, FAOSTAT, World Bank Commodity Markets and Reuters
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To Supply the Future With Biofuels,
a Cellulosic Ethanol Industry is Emerging – Now
Sources:
International Energy Agency, Bloomberg New Energy Finance
World Map: Public info on large scale plants under planned construction; biochemical conversion (capacity in million US gallons per year) 11

Ethanol is Just Pioneering Bio-based Molecules; the
Sugar Platform Will be the Basis of a Range of Molecules
• Biochemicals can be made using different pathways.
Some exist today, others are developing
• The vast majority of conversion technologies use sugar as intermediate platform
Yeast
fermentation
Bioethanol
Biochemicals
Example:
Polyethylene
Heterogeneous
catalysis
Biochemicals
Example:
Glycol
Novel engineered
pathway
--
Novel bioprocess
Biochemicals
Novozymes’ research partners:
Acryllic acid Polypropylene N/A
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