Novozymes Conference Call1H 2017

August 11, 2017

27.2%

28.1%

28.5%

1H'15 1H'16 1H'17

2

1H 2017Highlights

Good first half and momentum in the business• Organic sales growth +3% (Q2: 2%)

• Large segments growing organically:

‒ Household Care +1% (Q2: +1%)‒ Food & Beverages +8% (Q2: +10%)‒ Bioenergy +7% (Q2: +8%)

• Timing main negative:

‒ Agriculture & Feed -6% (Q2: -16%)‒ Technical & Pharma -4% (Q2: -7%)

• Europe and Asia Pacific performing well; Latin America challenged

• 1H EBIT margin excl. one-offs 28.5% (27.1% reported); Q2: excl. one-offs 28.2% (27.2% reported)

• Solid cash flow generation

• Exciting pipeline development including 4 launches in Q2

• 2H y/y growth expected to be stronger, cautiousness applied to volatile agriculture- related markets

• Underlying outlook maintained, DKK adjustment to reflect weaker currency environment

1H EBIT margin excl. one-offs

1H y/y organic sales growth per segment

1%

8% 7%

-6%-4%

HouseholdCare

Food & Bev. Bioenergy Ag &Feed

Tech &Pharma

Focus on Growth

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• Innovation drives revenue and earnings growth

• Solid pipeline, and strong launch environment with increased commercial activity

• Innovation across enzyme classes and applications supported by significant IP positions

• Cross-fertilization yields unique advantages –> size matters

• Focus on emerging and developed markets –> different needs

• Tailored solutions with support from application centers

Return to historical growth levels

Support reaching our goal:

First half in line with expectations

• Good development in Asia Pacific as liquid formulations continue good growth supported by enzyme innovation

• Latin America down for the quarter

• Developed detergent markets only post slight growth due to cost focus at certain large customers. Innovation and performance still high on the agenda

• Good development in dishwash segment

Quarterly y/y organic sales growth

Household Care

Innovation for both established and emerging markets in focus; hygiene and freshness on track for year-end launch

• Innovation in emerging enzyme markets meet demand for regional conditions and low-temperature wash cycles

• Focus on performance and new innovation in the developed markets

• Freshness and hygiene platform development continues, with first product launch expected toward the end of the year

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1H y/y organic sales growth

7%

5%

0%

4%

1%

1H'13 1H´14 1H'15 1H'16 1H'17

4%

-5%

5%

1% 1%

Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

33%of sales

Continued focus on both emerging and developed markets through increased reach and new innovation and partnerships

• New product launches support growth ambitions

• Emerging markets step up activity level through additional investments in commercial resources

Food & Beverages Strong performance through first half

• Solid growth in baking outside the US freshkeeping market. Good growth in Europe, Middle East and Africa region in Q2 offsets the effects of reduced pricing in North America

• Nutrition strong also in Q2, driven by lactose reduction in dairy and a recovery in infant nutrition. Developed markets performing well

• Starch performed well in the first half, driven by China and North America. Q2 growth was solid but more modest than the high rate in Q1

• Good growth in beverages, driven by distilling and juice & wine; brewing flat

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Quarterly y/y organic sales growth

1H y/y organic sales growth

3%

5% 5%

3%

8%

1H'13 1H´14 1H'15 1H'16 1H'17

4%

-2%

4%

6%

10%

Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

28%of sales

US ethanol production supports solid growth in enzymes for conventional biofuels

• US ethanol production estimated to be up by 4% in both Q2 and 1H. US ethanol inventories remain elevated, and ethanol margins thin

• Rest of World conventional biofuels post good growth in both Q2 and 1H making up a smaller part of overall sales

• Biomass conversion contributes to growth. Five facilities supplied

Bioenergy

Bioenergy priorities continue to focus on innovation and technical services helping our customers to improve plant efficiency

• New innovation making inroads; trialing yeast for conventional biofuels

• Technical services key in customer relationships

• US ethanol regulation: discussion ongoing on removal of RVP restriction that currently limits E15 sales during the summer

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Quarterly y/y organic sales growth

1H y/y organic sales growth

-1%

26%

2%

-6%

7%

1H'13 1H´14 1H'15 1H'16 1H'17

-6%-8%

7% 6%8%

Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

18%of sales

Timing affects half year and quarterly sales growth

• Feed enzymes sales lower in Q2 as expected, due to inventory building in Q1. In-market sales growing in 1H y/y

• Probiotics growing from a small base. Trials progressing as planned

• BioAg sales down in Q2 due to changed sales cycle moving sales to second half of the year. Farmers continue to face economic challenges. Good in-market uptake of our upstream corn inoculant Acceleron® B-300 SAT

Agriculture & Feed

Long-term plan and priorities remain intact with focus on innovation and market expansion

• Feed enzymes see continued good in-market demand. More innovation expected in 2H

• BioAg sales set to ramp up in 2H in preparation for the 2018 planting season.

• New products and expansion into new regions will support and drive long-term growth in BioAg

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Quarterly y/y organic sales growth

1H y/y organic sales growth

13%

4%

19%

1%

-6%

1H'13 1H´14 1H'15 1H'16 1H'17

13%

-3%

22%

2%

-16%

Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

14%of sales

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Medley® 2.0 – Emerging market innovation which combine enzyme solutions

Enzyme solutions enabling better wash performance to small and medium-sized producers in emerging markets

Progress® excel – new protease for liquid detergents

Premium protease allowing formulation flexibility with premium wash performance at all temperatures and under tough conditions

Palmora® – increasing plant performance in the palm oil industry

Improves yield and plant performance for palm oil producers

Frontia® – improves yield and provides process improvements in grain milling

Enables grain-milling processors to obtain significantly more starch and gluten while consuming less water and energy in the corn fiber-milling process

Innovation top of the agenda with four new launches in Q2

Area Innovation Feasibility Discovery Development Launch Commercial

Household Care Hygiene solutions

Household CareTailored emerging markets

solutions

Food & Beverages Vegetable oil processing

Food & Beverages Grain milling

Agriculture & Feed Natural growth promotion

Agriculture & Feed Enhanced corn inoculant

Agriculture & FeedNew transformative

BioAg solutions

Bioenergy Biomass conversion

Progress in pipelineDuring Q2 2017 both the grain-milling and vegetable oil-processing program moved from the “Development” to the “Launch” stage

Total pipeline has:

8 programs with significant market-expanding potential

Significant potential to boost organic growth

> 100 projects

• Projects that improve productivity

• Technology projects to expand the “toolbox”

9 Arrows denote progress to next phase over the past three months

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1H performance and2017 outlook 1H 2017: Good half-year performance

• Growth in the large segments: Household Care, Food & Beverages, Bioenergy

• Agriculture & Feed impacted by timing

• EBIT-margin excl. one-offs 28.5% (27.1% reported).

• Solid free cash flow generation

• DKK1.1 billion worth of shares bought back within in the DKK2.0 billion frame for 2017

2017 outlook

• Underlying outlook maintained

• Emerging market investments to support growth

• Weaker currency environment lowers guidance in Danish kroner

Key financials

(DKKm)

Realized

1H 2017

2017 outlook

August 11

Organic sales growth +3% 2-5%

DKK sales growth +3% 1-4%

EBIT growth +3% 1-4%

EBIT margin 27.1% ~28%

Net profit growth +1% 2-5%

Net investmentsexcl. M&A

614 1,700-1,900

Free cash flow excl. M&A

1,325 2,000-2,200

ROIC incl. goodwill

24.5% 24-25%

Forward-looking statements

This presentation and its related comments contain forward-looking statements, including statements about future events, future financial performance, plans, strategies and expectations. Forward-looking statements 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 and uncertainties 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, industry consolidation, 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 or breaches 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-acre crops; 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, currency exchange 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. The company undertakes no obligation to update any forward-looking statements as a result of future developments or new information.

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• Good first half and momentum in the business

• Underlying outlook maintained

• Exciting pipeline development, strong launch environment and increased commercial activity

• Our business is about turning amazing science into sustainable biological answers in a growing world, and our focus is on creating long-term value

Q&A

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