Enzyme Business – Strategy and activities - Novozymes


Enzyme Business – Strategy and activities - Novozymes

4 8/9/2009NOVOZYMES' CAPITAL MARKETS DAYWhat is underlying the new long-term targets?The world haschanged• Our customersexperience limitationsin inputs and•Increasedenvironmental focusacross consumers,regulators …• Bringing innovation infocusBoundaries oftechnology areexpanding• Acceleratinginnovation time and• Reducing cost ofinnovationiOrganizationaldrive• We believe the timehas come to grow toour full potential• Ambitious goal settinghelps release the”inner” potential


6 8/9/2009NOVOZYMES' CAPITAL MARKETS DAYGlobal enzyme market developmentNovozymes hasconsistentlygrown its marketshare, primarilyby drivingmarketexpansion.DKK billionRest ofmarketDevelopment in total global enzyme market18,016,014,09,0%7,0%Novozymes’growthrepresented~2/3 of themarket valueincrease 2003–2008NZ enzymesalesNZ enzymegrowth DKKRest ofmarketgrowth12,010,008,06,04,02,05,0%3,0%1,0%-1,0%-3,0%0,02003 2004 2005 2006 2007 2008-5,0%

7 8/9/2009NOVOZYMES' CAPITAL MARKETS DAYMarket position is driven by innovation• Novozymes seeks to be themarket leader in every marketwhere we are present• Leadership is achieved throughinnovation, by offering customerscompetitive advantages, throughcost/performance and positioning• Not only our dedication to R&D(our spend is the double of thatof No. 2), but more so our abilityto continuously deliver innovationis the foundation of our marketposition• ... and works as a growth driver

8 8/9/2009NOVOZYMES' CAPITAL MARKETS DAYGrowth is about innovation; this requires …INSIGHTS• Understand customers’business• Know customers’ world• See the big pictureSOLUTIONS• Deliver great andinsightful products• Offer unique serviceand support

9 8/9/2009NOVOZYMES' CAPITAL MARKETS DAY63 new enzymes launched since the IPODetergentTechnicalFoodFeedenzymes enzymes enzymes enzymes2009Cellic ® Ctec (F)Cellic HTec (F)2008 Celluclean ® FiberCare ® D (FP)2007Mannaway ®Stainzyme ® PlusSpirizyme ® Ultra (F)2006 Liquanase ® BPX2 (F)BPX1 (F)NovoBate ® (L)Lactose Oxidase (D)Pectinex ® Ultra Mash(J)Novozym ® 12001 (SF)Attenuzyme ® Flex (B)Acrylaway ® (Ba)Viscoferm ® (B)Ultraflo ® Max (B)Saczyme ® (B)Cerezyme ® (B)Lipopan ® Xtra (Ba)RONOZYME ®ProActRONOZYME NP2005Polarzyme ®Pectawash ®Viscozyme ® (F)YieldMax ® (D)Novozym 27115 (SF)Le DeLin2000–200434 productsB=Brewing; Ba=Baking; D=Dairy; F=Fuel; FP=Forest Products; J=Juice; SF=Special Foods; L=Leather

10 8/9/2009NOVOZYMES' CAPITAL MARKETS DAYSales development per industry may appearconstant over time…SOURCE:NOVOZYMESENZYME SALESDevelopment in enzyme sales8,016%7,014%Feed6,012%FoodTechnicalillionDKK bi50 5,04,010%8%DetergentSales growthDKKSales growthLCY3,02,01,06%4%2%0,02003 2004 2005 2006 2007 20080%

11 8/9/2009NOVOZYMES' CAPITAL MARKETS DAYHowever, when looking at the details, not allsubindustries grow annually...Breakdown of nominal LCY growth200%150%100%50%Subindustries w.negative growthcontributionSubindustries w.positive growthcontribution0%2003 2004 2005 2006 2007 2008-50%-100%THE GRAPH SHOWS SELECTEDSUBINDUSTRIES’ NOM. GROWTH AS% OF TOTAL NOM. GROWTH. SUM OFCONTRIBUTIONS IS INDEXED AT 1FOR EACH YEAR.SOURCE: NOVOZYMES’ OWN DATA FOR ANNUALLCY ENZYME SALES

12 8/9/2009NOVOZYMES' CAPITAL MARKETS DAY... and subindustries rarely show constantgrowth paths and levelsComposition of nominal LCY growth150%125%100%75%50%25%0%-25%-50%2003 2004 2005 2006 2007 2008OtherTextileBakingBioethanolFeedDetergentTHE GRAPH SHOWS SELECTEDSUBINDUSTRIES’ NOM. GROWTH AS% OF TOTAL NOM. GROWTH. SUM OFINDUSTRIES IS INDEXED AT 1 FOREACH YEAR.SOURCE: NOVOZYMES’ OWN DATA FOR ANNUALLCY ENZYME SALES

13 8/9/2009NOVOZYMES' CAPITAL MARKETS DAYThree likely growth drivers have beenidentified for the near futureEnzymes for starch-based bioethanol (1G)• The US RSF for starch-based bioethanoloutlines growth of ~50% in 2010–2015DREAM concept for substitution ofpetrochemicals in detergents• Expanding application of detergent enzymesRONOZYME ® ProAct for enhanced protein uptakein poultry• Exclusive technology, to be launched in themajor US and European markets in 2010–2011

14 8/9/2009NOVOZYMES' CAPITAL MARKETS DAYBut other industries will also have to contribute- but it is not certain which and whenFeed enzymes for ruminants• Expanding today’s feed enzyme solutionsto ruminants• Expected launch: 2009–20100Easyzyme ® is the world’s first solution forenzymatic laundry bars• Enabling time savings of up to 40%, eliminatingat least one rinse per wash, and targetingemerging markets• Launch: 2009Acrylaway ® reduces the level of acrylamide infood products• Launched: 2007


17 8/9/2009NOVOZYMES' CAPITAL MARKETS DAYToday’s global recession did have an impact• The global economic downturn took us and ourcustomers by surprise• As this recession is different from previous experience:• Consumers have reacted more swiftly and stronger =>immediate changes in consumption patterns (e.g., feedvolumes)• But producers have also reacted differently (e.g.,detergent)• And there has been a transition in Novozymes’ businessdistribution over the last years

18 8/9/2009NOVOZYMES' CAPITAL MARKETS DAYTransition in Novozymes’ distribution of sales– Not just a question of sales to the bioethanol industryUnique &necessaryenzymesEnzymesfor productspecificclaimsEnzymesforsubstitution• Limitedit • Competing• Competingcompetitiontechnologies• Low degree ofreversibilityTimetechnologies• Correlation withinput prices• Some degree ofreversibility

19 8/9/2009NOVOZYMES' CAPITAL MARKETS DAYSales have been impacted, but earningsremain strong15%10%5%0%-5%-10%-15%-20%Enzyme Business sales H1 2009Enzyme Business gross marginH1 2009DKK growthLCY growthgross margin currency58%56%54%52%50%48%46%44%42%40%H1 2008 H1 2009SOURCE:NOVOZYMES SALES

20 8/9/2009NOVOZYMES' CAPITAL MARKETS DAYLong-term fundamentals are unchanged• Current global economicactivity is affected by therecession• But long-term fundamentalsseem unchanged:• There is still a strong focus onCO 2 emission reductions and onreducing technologies• There is a general expectation ti ofcommodity prices becomingmore volatile• And that at price levels higherthan the historic levels

21 8/9/2009NOVOZYMES' CAPITAL MARKETS DAYROIC of morethan 22%It is feasibleOpportunity:BioBusinesstaking off ina significantwayOpportunity:Enzymes forcellulosicbioethanolOrganic salesgrowth of morethan 10% p.a.That EnzymeBusinessremains agrowthengineOperatingmargin ofmore than20%That webecome avoice on theworld stageThat weachievecontinuedproductivityimprovementsThat we buildBioBusinessinto a DKKmultibillionbusinessThat weinvest ingrowthopportunitiesbeyond today

Forward-looking statementsThis presentation and its related comments contain forwardlookingstatements, including financial expectations.Forward-looking statements are by their very nature associatedwith risks and uncertainties that may cause actual results to differmaterially from expectations.The uncertainties may include unexpected developments in theinternational currency exchange and securities markets, market-driven price decreases for Novozymes’ products, and theintroduction of competing products within Novozymes’ core areas.

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