Road Show presentation 9M 2015 · 2017-03-21 · 3.000 3.250 3.500 EBIT and EBIT margin 1H 2013 –...
Transcript of Road Show presentation 9M 2015 · 2017-03-21 · 3.000 3.250 3.500 EBIT and EBIT margin 1H 2013 –...
Road Show presentation 9M 2015
October 22nd 2015
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.
Forward-Looking Statements
2
Table of contents
1. Latest results
2. Novozymes Overview
3. Strategy
4. Segmental Overview
- Household Care
- Food & Beverages
- Bioenergy
- Agriculture & Feed
- Technical & Pharma
5. Sustainability
6. Financial Review
4
11
18
30
31
33
36
40
46
49
54
3
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
9M 2015 Summary
9M sales in line with expectations
• 4% organic sales growth driven by Agriculture & Feed and Food &
Beverages. 14% growth in DKK. 3% organic sales growth in Q3
• Challenging market conditions in Household Care and Bioenergy
persisted
• Business conditions relatively stable in Q3
Strong earnings
• ~20% EBIT growth and EBIT margin expansion of ~1.5 %-point,
adjusted for net positive one time impact from The BioAg Alliance
agreement in Q1 2014
• Higher gross margin, currencies and operational efficiencies driving
EBIT growth
2015 organic sales and profit outlook on track
• Organic sales growth: 4-5%
• DKK sales growth: 12-13%
• EBIT growth adjusted to ~15%
• EBIT margin maintained at 27-28%
• Net profit growth adjusted to ~12%
2.198
2.541
2.922
25,0% 27,4% 27,7%
10%
15%
20%
25%
30%
9M 2013 9M 2014 9M 20151.5001.7502.0002.2502.5002.7503.0003.2503.500
EBIT and EBIT margin 1H 2013 – 1H 2015
8.806 9.278
10.550 6%
8%
4%
0%
2%
4%
6%
8%
10%
9M 2013 9M 2014 9M 20157.000
8.000
9.000
10.000
11.000
Sales and organic growth 9M 2013 – 9M 2015
5
DKKm
DKKm
A changing environment for ethanol producers:
Things changed in Q4 2014…
• Overall profit declined, led by fall in
oil/ethanol price
• DDGS (feed residue) increased in
relevance
… and have not improved in 2015
• Still a low-margin environment with
strong focus on costs
• Producers maximize profits differently
The main things to watch remain
ethanol and corn prices
Assumptions:
• 100m gal/yr dry-grind ethanol plant
• Equal production through quarters (25m gal)
• Avg. quarterly pricing used
• 0.50 $/gal avg. in total additional costs
4.53 $/bu
3.67 $/bu
3.86 $/bu
3.75 $/bu
3.59 $/bu
4.80 $/bu
3.85 $/bu
2.20 $/gal
2.24 $/gal
2.01 $/gal
1.79 $/gal
1.45 $/gal
1.58 $/gal
1.51 $/gal
Yields:
• Ethanol: 2.8 gal/bushel
• DDGS: 16 lb/bushel
• Corn oil: 0.5 lb/bushel
Source: CME, ICE & USDA
-50
-40
-30
-20
-10
0
10
20
30
40
50
60
70
80
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015
Mil
lio
n U
SD
Ethanol plant economics per quarter – revenue, corn and EBITDA
Corn Oil
DDGS
Ethanol
Corn
EBITDA
Assumptions:
• 100m gal/yr dry-grind ethanol plant
• Equal production through quarters (25m gal)
• Avg. quarterly pricing used
• 0.50 $/gal avg. in total additional cost (Includes energy, water, labor, enzymes, yeast, denaturants, chemicals,
maintenance, and other costs)
1.62 $/gal
1.31 $/gal
1.38 $/gal
1.34 $/gal
1.28 $/gal
1.71 $/gal
1.38 $/gal
0.61 $/gal
0.62 $/gal
0.36 $/gal 0.35
$/gal 0.53 $/gal
0.50 $/gal 0.44
$/gal
Yields:
• Ethanol: 2.8 gal/bushel
• DDGS: 16 lb/bushel
• Corn oil: 0.5 lb/bushel
2.20 $/gal
2.24 $/gal
2.01 $/gal
1.79 $/gal
1.45 $/gal
1.58 $/gal
1.51 $/gal
Prices from CME, ICE & USDA 6
Bioenergy Sales
9M sales down 1% organically due to mix and share pressure – negative 6% in Q3 alone
Sales stabilized from Q2 to Q3, both in DKK and USD
Innovation needed for growth:
• Q3: Launch of Novozymes Liquozyme® LpH targeting subset of customers running at low pH
• Q4: New product launch
• Success depends on ability to show value to customers in tough operating environment
-20%
-10%
0%
10%
20%
30%
40%
US quarterly ethanol volume growth rates and NZ organic growth
U.S. ethanol volume growth Novozymes org. Bioenergy growth
7
Sales & Markets
9M 2015 sales: DKK +14%, organic +4%
Q3 2015 sales: DKK +11%, organic +3% Household Care: Strong growth from a number of important customers across markets offset challenging LATAM, a dynamic U.S. market and lower sales to one customer.
Food & Beverages: Good performance in most markets, with baking, healthy concepts and starch the most significant contributors to growth
Bioenergy: Sales under pressure, mainly due to negative mix effects and lower market share, as customers focus on costs in period of low ethanol margins. U.S ethanol production estimated up by ~4% Q3 YTD
Agriculture & Feed: A good North American season drives strong performance in BioAg. Active start to Latin American season. Moderate growth in animal feed enzymes driven by proteases
Technical & Pharma: Performance driven by Pharma sales. Negative timing impact in Q3; expected reversed in Q4
629
1.306
1.630
2.451
3.262
718
1.606
1.927
2.815
3.484
Technical &Pharma
Agriculture &Feed
Bioenergy
Food &Beverages
HouseholdCare
Sales by industry, DKKm
9M 2015 9M 2014
+18%/-1%
+15%/+5%
+7%/1%
DKK growth /org. growth
+14%/+1%
+23%/+19%
8
Business Development and R&D Update
Hyaluronic acid activities closed
• Commercial outlook no longer warranted ongoing investment
• Manufacturing facility in China to be converted into enzyme-manufacturing plant. IP and know-how remain the property of Novozymes
• Albumin, Veltis® and pharma enzyme activities to continue
Acquisition of probiotic capabilities
• Arkansas, U.S.-based company specialized in probiotics for poultry
• Application know-how and interesting pipeline add perspectives for Novozymes – to develop new products and add more value for partners
• Small commercial footprint adds revenue and experience
Two new products launched:
Bioenergy: Novozymes Liquozyme® LpH
• Effective low-pH alpha-amylase
• Broadening product portfolio
Starch: Novozymes Extenda®
• Provides raw material and energy savings
• Increases seasonal saccharification capacity by up to 17%
9
9M 2015 Financial Performance & Outlook
Strong earnings performance after 9M 2015
• Gross margin up due to productivity improvements
• Disregarding the net one-time impact from The BioAg Alliance,
EBIT grew by ~20% mainly due to currencies, higher sales,
productivity improvements and operational efficiencies
• Higher net financial costs due mainly to currency hedging
• Net investments and cash flow generation on track
2015 outlook adjusted within range and for currencies
• Organic sales growth narrowed at low end of range: 4-5%
• EBIT growth adjusted to ~15%
• EBIT margin maintained at 27-28%
• ~12% net profit growth
Key
financials Realized
9M 2015 2015 Outlook
Oct. 22
2015 Outlook
Aug. 6
Sales growth, org. +4% 4-5% 4-7%
Sales growth, DKK +14% 12-13% 13-16%
EBIT growth +15% ~15% 15-17%
EBIT margin 27.7% 27-28% 27-28%
Net profit growth 11% ~12% 11-13%
Net investments
excl. acq., DKKm 653 900-1,000 900-1,000
Free cash flow
before acq., DKKm 2,022 ~2,500 2,500-2,700
ROIC incl. goodwill 26.6% ~26% 25-26%
10
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Novozymes – the world leader in bioinnovation
Who are we?
12
Founded 1925
Listed 2000
Ticker NZYM B
Exchange Copenhagen
Market Cap US$ ~15bn
Long-term targets
2015-2020:
8-10% organic sales
≥ 26% EBIT margin
≥ 25% ROIC
Household Care
Food & Beverages
Bioenergy Agriculture
& Feed Technical &
Pharma
Global R&D intensive Profitable Majority owner
Novo A/S
~6,500 employees,
700 products in
140 countries
~7,000 patents,
~14% of sales
spent on R&D
$2bn in sales and
27.2% EBIT margin
in 2014
controls 25.5% of
the capital and
70.4% of the votes
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Foundation ownership advocates long-term focus
13
0
50
100
150
200
250
300
A-shares B-shares
No
of
sh
are
s –
mil
lio
ns
Free-float
Treasury
Foundation100% 10%
(Holding company)
Large investments: Sonion
Chr. Hansen
Xellia
Financial investments Venture capital
Seed capital
Novo Group companies:
Novo A/S
controls
25.5% of
Novozymes’
capital and
70.7% of the
votes
Purpose of the Foundation: 1. provide a stable basis for the commercial
and research activities of the companies in Novo A/S
2. support physiological, endocrinological, metabolic and other medical research
3. contribute to the preservation and operation of Novo Nordisk A/S' research hospital activities
4. support other scientific as well as humanitarian and social purposes
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Experienced Leadership Team
Peder Holk Nielsen
President and CEO
Novozymes since 1984
Benny D. Loft
Executive Vice President,
CFO and Corporate Functions
Novozymes since 1998
Per Falholt
Executive Vice President,
Research and Development
Novozymes since 1984
Andrew Fordyce
Executive Vice President,
Business Operations
Novozymes since 1993
Thomas Nagy
Executive Vice President,
Supply Operations
Novozymes since 1986
Thomas Videbæk
Executive Vice President,
Business Development
Novozymes since 1988
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW 14
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
Household Care Food & Beverages Bioenergy Agriculture & Feed Technical & Pharma
Laundry & Dishwasher detergents,
Cleaning products
Baking, Starch to syrups, Brewing &
Alcohol, Healthy concepts
Corn ethanol
Cellulosic biofuels
Animal feed
BioAgriculture
Textile & Leather, Pulp & Paper,
Wastewater, Pharma ingredients
35% 26% 18% 14% 7%
15 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Industry growth profiles and 5-yr org. CAGRs Region growth profiles and 5-yr LCY CAGRs
35%
26%
18%
14%
7%
HHC
F&B
BioE
A&F
T&P
38%
34%
17%
11%
Europe, Middle East and Africa
North America
Asia Pacific
Latin America
Diversification in Revenue Streams Underpins the Company’s Strong Financial Position
0
1
2
3
4
5
2010 2011 2012 2013 2014
Bn
DK
K
HHC 9%
F&B 6%
BioE 8%
A&F 8%
T&P 3%
0
1
2
3
4
5
2010 2011 2012 2013 2014
Bn
DK
K
EMEA 8%
NA 6%
AP 5%
LA 18%
16
Industry Region
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
17
Satellite production site
Core production plant
Main R&D center
Satellite R&D site
Global Production and R&D Setup - 5 Core production plants and 3 satellites - 3 Main R&D centers and 4 satellites
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
15 years of innovation-driven returns
Strong absolute returns since 2000
• 2.5x sales
• 4x EBIT
• 5x net profit
• DKK ~30bn In operating cash flows
Driven by topline and leverage
• ~7% organic sales CAGR
• +5.4 %-points gross margin
• +10.5 %-points EBIT margin
• +12.9 %-points ROIC
Innovation is the recipe
• DKK 16bn invested in R&D
• +100 new solutions marketed
19
10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000Sales DKKm
EBIT margin
R&D/Sales
ROIC
Historical performance
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Our set of competitive advantages across the value chain has led to a unique market-leading position
20
Scale Quality Sustainability High barriers
• Production: 5 core
plants in 3 regions
• Research &
Development: 2/3
of total investment
of industry
• Technical
services: half of
commercial
organization “on
site”
• Market &
technology
coverage
• Superior logistical
agility due to full
control of value
chain
• Right quality for
customers and
regulatory
requirements
• Triple bottom line
• Trusted long-term
partner
• Pioneering life
cycle assessment
documentation
• More than 7,000
patents
• Diverse biotech
know how and
investments
needed to
compete
• Customer
partnerships
• Manufacturing
expertise
48%
20%
6%
26%
Source: Novozymes estimate
Novozymes
DSM
Others and captive
Genencor (DuPont)
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
DKK ~5bn spent on acquisitions
Investing for long-term growth; People, CAPEX and M&A
0
1000
2000
3000
4000
5000
6000
7000
2000 2014
2x employees – from 3,208 FTE to 6,454 FTE
Latin America
Asia Pacific
North America
Denmark (incl. EMEA)
>1.5bn DKK
> 500m DKK
>100m DKK
<100m DKK
BioAg
Enzymes
Biopharma
Biologicals
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Earth Bioscience
Philom Bios Turfal
EMD
CropBioscience
Natural
Industries
TJ
Technologies
BioAg Alliance with
Monsanto
Biocon Enzymes
BioGaia Delta GroPep Divestment Biopharma (Lund)
Iogen
Enzymes
Divestment Roots Octen Gamlen
BETA
Renewables
Sybron Jefferies Semco Roots
21
DKK ~11bn in CAPEX 2000-2014
2000-04
2005-09
2010-14
NA
LATAM APAC
EMEA
Pacific Vet
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Growth until 2020 expected to be driven by established industries with additional growth from platforms
Novozymes’ organic growth average, 2010-2014
Growth platforms’ organic growth average, 2010-2014
Established industries’ organic growth average, 2010-2014
2010 2011 2012 2013 2014
Growth platforms
- BioAg
- Biomass Conversion
- Animal Health & Nutrition
Established industries
- Household Care
- Grain-based ethanol
- Food & Beverages
- Technical Long-term
organic growth target
8-10%
Established industries are the basis
for growth
Growth platforms expected to enable
8-10% growth
Diversification in revenue streams
important for solidity
2015 2016 2017 2018 2019 2020
1
2
3
22 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
23 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Our new strategy puts partnerships front and center for success in creating impact
24 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
We expect the relative spend on R&D to fluctuate around
of sales
12%
13%
14%
15%
16%
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2.000
R&D costs DKKmR&D/Sales
This will allow us to continue the trend of being the investment leader in microbial technologies and industrial enzyme innovation
Own estimates indicate that Novozymes spends 2/3 of the entire enzyme industry’s R&D spend on its 48% market share
R&D spend
25 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
R&D investments drive growth today and enhance technology leadership for long-term impact
Established business areas
Basic technologies Advance understanding, application support, development and formulation of biological systems
R&D investments in production systems and productivity
Growth platforms
Household
Care
Food &
Beverages
Grain-based
ethanol
BioAg
Biomass
Conversion
Animal
Health &
Nutrition
Emerging
industries
Technical
industries
26 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Developing new technology and business platforms
Continued development in our technology base…
…creates opportunities to develop new business platform
Biomass
conversion
Bio-
Agriculture
Animal
Health &
Nutrition
Emerging
platforms
Molecular
biology
Bio-informatics
& Systems
biology
Screening
systems
Industrial-scale
fermentation
Strain development
using protein
engineering,
genetic
modification, DNA
sequencing, etc
Application of
computer
algorithms in the
computational
discovery of
enzymes in DNA
databases
Application of high-
throughput robotics
to find the best
enzyme candidates
Production of
enzymes and
proteins whilst
continuously
optimizing and
improving yields
27 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Raw materials
Micro-organisms
Enzymes
Fermentation
Purification
Formulation
Fermentation technology – 3 levers to improves profitability
• All of Novozymes’ solutions are produced via fermentation
• Dedicated R&D investment (10-15% of R&D investment) goes to improving production systems
• Achieved sales CAGR of 7% since 2000 with improving margins
Improve
production strain
Ability to produce more
enzymes per m3
fermentation tank through
genetic engineering of
host organism
Optimize
industrial production
Process optimization
Equipment optimization
Input optimization
Improve
enzyme efficacy
Protein engineering of
enzymes improves
efficacy. Customers
buy efficacy, not
volume
28 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
-0,2
0,0
0,2
0,4
0,6
0,8
1,0
-500
05001.0001.500
2.0002.500
Net-Interest-Bearing-Debt/EBITDA NIBD DKKm
NIBD/EBITDA
Financial priorities; - Innovation, growth & shareholders
ROIC expected at ≥ 25%:
• Growth in net profit
• Deferred income from
The BioAg Alliance decreasing
• Less growth in invested capital
NIBD/EBITDA target: 0‒1
29
2015 to 2020:
Organic sales
growth
R&D
8-10% ~14% ~8% 40% 2bn + CAPEX Dividend
payout ratio
2015 buyback
Initiatives & returns
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Household Care Overview
of sales in 2014
Applications Laundry & dishwasher detergents Novozymes market share
>60%
Competition Dupont
31
Current Trends Growth Drivers Growth Barriers
• Better-performing laundry
detergents –also at low
temperature
• Optimization of detergent
formulations to decrease cost
and cost volatility
• More sustainable operations
and products
• Changing consumer
preferences toward liquids
and compacted products
• Innovation to raise detergent
performance at low
temperatures, to increase
sustainability and optimize
formulations
• Demand for better-performing
products in emerging markets
• GDP and population growth in
emerging markets
• Sustained low input costs that
compete with enzymes for
share of COGS
• Traditional consumer wash
habits
• Regulation favoring
surfactants over enzymes in
emerging market product
standards
• Technology development
needed to enable enzyme
performance in all liquid
detergent formats
3.324 3.514 3.973 4.222 4.353
13%
7% 11% 9%
4%
2010 2011 2012 2013 2014
Sales Sales DKKm ORG growth
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
A strong portfolio of innovation with global relevance – built over the last 50 years
300+ brands
~100 countries
Albania, Algeria, Argentina, Australia, Austria, Bangladesh, Belarus, Belgium, Bolivia, Bosnia-Herz., Brazil, Bulgaria, Cameroon, Canada, Chile, Colombia, Costa Rica, Croatia, Cyprus, Czech. Republic,
Denmark, Dominican Rep., Ecuador, Egypt, El Salvador, Estonia, Ethiopia, Finland, France, Germany, Great Britain, Greece, Guatemala, Honduras, Hong Kong, Hungary, India, Indonesia, Iran, Ireland, Israel,
Italy, Ivory Coast, Japan, Jordan, Kenya, Lebanon, Lithuania, Luxembourg, Malaysia, Mauritius, Mexico, Morocco, Myanmar, Netherlands, New Zealand, Nigeria, Norway, Oman, P.R. China, Pakistan,
Panama, Peru, Philippines, Poland, Portugal, Puerto Rico, Qatar, Romania, Russian Fed., Saudi Arabia, Serbia, Singapore, Slovakia, South Africa, South Korea, Spain, Sri Lanka, Sudan, Sweden,
Switzerland, Syria, Taiwan, Tanzania, Thailand, Trinidad &Tobago, Tunisia, Turkey, Uganda, Ukraine, United Arab Emirates, USA, Uzbekistan, Venezuela, Vietnam, Yemen
10 best-in-class
product families
Coronase®, Liquanase®, Savinase®, Stainzyme®, Amplify®, Lipex®, Carezyme®, Celluclean®, Mannaway®, xPect®,
Intensa Evity®, Blaze Evity®
New stabilization
technology Novozymes Evity® is a range of highly robust and stable enzymes
6 enzyme
classes
1 platform of enzyme and microbial technology
Protease Amylase Lipase Cellulase Mannase Pectate Lyase
32 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
In emerging as well as developed markets, we see large opportunities for increasing enzyme inclusion in every wash load
Enzyme spend index per wash load
European high-
performance detergent
European average-
performance detergent
U.S. average-performance
detergent
Emerging markets average-
performance detergent
European high-
performance detergent
2008 2014
60
100
50 50
10
Average-performance detergents offer dual opportunities; to
penetrate more brands and to increase performance with enzyme-
including brands (in the EU, 70-75% contain enzymes today; in the
US, 65-70%)
Emerging markets offer vast
opportunities for increasing
penetration (~40% today) and
performance
All European high-performance detergents contain enzymes. Over
time, enzyme inclusion can increase with innovation
33 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Food & Beverages Overview
of sales in 2014
Applications Baking / Starch conversion / Brewing / Beverage alcohol / Healthy concepts Novozymes market share 30-40% Competition Dupont, DSM, regional
34
2.850 3.033 3.186 3.190 3.278
12% 8%
1% 3% 4%
2010 2011 2012 2013 2014
Sales Sales DKKm ORG growth
Current Trends Growth Drivers Growth Barriers
• Growth in processed foods in
emerging markets
• Food safety and informed
consumption
• Consumer demand for health
and wellness via food
• More convenience in food
preparation
• Food producer focus on cost
optimization and brand
building
• Consolidation of food &
beverage producers
• Sustainability in production
processes, packaging, etc
• High raw material prices
leading to production process
optimizations
• Focus on safe, healthy and
nutritional foods
• Clean labels
• Growth in grain and oil seed
processing
• GDP and population growth in
emerging markets
• Consumer preferences for
traditional foods and
skepticism about technology
in food & beverage production
• Conservative industries
• Fragmented and local markets
and dietary habits
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
We cover a broad set of end markets and applications – We operate in different parts of the value chain. Revenue-wise, the two parts are comparable
Processing of Ag inputs
A global business with global
solutions
Characteristics:
• Starch processing main
business
• Fewer product categories
• DuPont main competitor
• Fragmented global customer
base
• ~60% direct sales
• ~60% emerging markets
Food products
Product-driven for developed
markets
Characteristics:
• Baking main market
• Many products to many end
customers
• Competition more dispersed
and local
• ~80% direct sales
• ~30% emerging markets
Brewing
Starch processing
Beverage
alcohol
Oils & fats
processing
Juice & wine
Baking
Infant food
Acrylamide
reduction
Low lactose
Flavor
enhancement
35 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Bioenergy Overview
of sales in 2014
Applications Corn ethanol / Biomass conversion Novozymes market share ~55% Competition Dupont + regional niche
36
1.846 1.782 1.748 1.909
2.270
19%
1%
-9%
12% 19%
2010 2011 2012 2013 2014
Sales DKKm ORG growthSales
Current Trends Growth Drivers Growth Barriers
• Sustainable energy for
transportation as an alternative
to liquid fossil fuels
• Energy security
• Limited volume growth of grain-
based biofuels
• Advanced biofuels on the cusp
of commercialization
• Political mandates to drive
adoption of biofuels
• CO2 reduction from
transportation sector being
delivered today
• Focus on domestic job,
economy and energy creation
• An energy industry with vested
interest in traditional fossil fuels
• Lack of political commitment to
set mandates
• Competition with other
industries and technologies for
feedstock conversion
• Competition with other
transportation technologies for
“best way” to reduce CO2
emissions
• Lack of infrastructure for biofuel
adoption
• Industry conservatism
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Ethanol production and outlook in the U.S. – Production has stabilized at 10% of U.S. gasoline consumption + exports
Sources: US Energy Information Agency; annual energy outlook, April 2015, US Department of Agriculture, F.O Licht, Renewable Fuel Association and Houston Biofuel Consultants LLC
0
20
40
60
80
100
120
2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039
Ind
ex
Gasoline volumes are stable today. 2040 outlook is for lower volumes driven by mileage standards
0
5
10
15
20
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Billio
n G
allo
ns
U.S. ethanol production volumes have stabilized
0
200
400
600
800
1.000
1.200
1.400
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Millio
n G
allo
ns
U.S. ethanol exports have increased since 2009
0%
2%
4%
6%
8%
10%
12%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
U.S. Ethanol blend:
~10% of gasoline consumption
CAGR +0.3%
37 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
New Opportunities – Explore biodiesel and sugar cane • Enzymatic Biodiesel
– Exploring cleaner and cheaper concept • Exploring solutions for sugar cane
14 7
7 2
Bioenergy strategy overview
Grain Ethanol (1G) – Drive plant profitability • Introductions in 2012-2014 delivered
significant yield and value capture • More innovation to increase plant
profitability expected over the coming period – reducing other costs and capturing more yield
Biomass Conversion (2G) – Enable commercialization • Strong focus on delivering CTec4you
solutions for different pre-treatment processes
• Partnering to optimize total value chain and drive down total production costs
40
60
80
100
120
140
160
2005 2010 2015 2020
Total production cost development
Enzyme Developments
Enzyme Developments
Enzyme and Process Developments
Other
ethanol Biodiesel
Sugar
cane
ethanol Corn
ethanol 2.70
gal/bu
2.85
gal/bu
3.00
gal/bu
Avantec®,
Spirizyme
Achieve®
& Olexa®
New Innovation
2012-2014 2015-2017
Eth
an
ol yie
ld
per
bu
sh
el o
f co
rn
2013 Global
biofuels production, ~30 bn gallons*
38 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Project pipeline Biomass conversion
Novozymes serves 5 out of 7 commercial facilities
While several biomass conversion ethanol plants are already operating, more than 20 solid biomass conversion projects are under development globally (not all publicly announced) Different business models: • Co-marketing with Beta
Renewables • Project development • Large strategic partners e.g. Raízen
39
Publicly announced, commercial biomass conversion projects under development by region (Q1/2015)*
Brazil 4. Raízen
5. GranBio
− Rhodia
− CTC
− Odebrecht
− Abengoa
United States 1. POET/DSM
2. Dupont
3. Abengoa
− Beta Renewables
− Canergy
− Fiberight
Europe 6. Beta Renewables
− Maabjerg Bioenergy
− ST1
− Ethanol Europe
− Energo Chemica
India − Beta Renewables
− Hock Lee Group of
Companies
− Teck Guan
− MyBiomass
China 7. Longlive
− Beta Renewables
− Petro China
− Cofco
− Tianguan Group
− M&G Chemicals
*Non-exhaustive
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Agriculture & Feed Overview
of sales in 2014
40
Feed alliance The BioAg Alliance
Applications Enzymes for
nutritive
enhancement of
feed for pigs and
chicken
Microbes for crop yield
enhancement and to
fend off pests and
diseases
Market
share
25-30%
(enzymes only)
Leading producer of
inoculants. Small
presence in biopesticides
Competition Dupont, AB
Vista, regional
BASF, Bayer, regional
956
1.371 1.617 1.668 1.728
2%
11% 13%
5% 7%
2010 2011 2012 2013 2014
Sales DKKm ORG growthSales
Current Trends Growth Drivers Growth Barriers
• Rising demand for food as
population grows
• Pressure on available land to
farm
• Sustainability in farming
• Focus on yield maximization
• Global surge in protein
consumption due to change in
dietary habits
• Increasing consumer
awareness of food supply
origins and integrity
• High input costs for farmers
• Emerging markets’ GDP and
population growth
• Increased demand for food
and protein
• Regulatory requirements for
more sustainable farming
practices
• Consumers demanding better
and more sustainable foods
• Biological solutions at
relatively early stage of
development
• Low pricing for traditional input
and crops
• Technology robustness
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
There are approximately
in 1 tablespoon of soil1
Microbial solutions for agriculture
Microbials, notably bacteria and fungi, are types of agricultural biologicals that protect crops from pests and diseases and enhance plant productivity and fertility.
41
1. North Carolina State
University Cooperative
Extension
How are microbials applied?
Seed treatment
Foliar
In-furrow
BioControl
• Complements or potentially replaces
chemical pesticides
• Provides additional modes of action
BioYield
• Utilizes nutrients in the soil
• Creates stronger, healthier plants
• Provides new options for sustainable
agriculture
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Inoculants hold significant opportunity for market expansion across crops and geographies
Soybean Pulses Alfafa Canola Corn Wheat Cotton Rice Factors driving inoculant growth:
Global Planted Acres1
(5 year avg. 2009–2013) ~ 260m ~190m ~15m ~85m ~425m ~549m ~80m ~400m Market expansion
• Significant opportunity across crops and geographies Inoculants Treated
Acres2 ~55-60% ~ 15% ~50% ~ 5% ~ 5% <1% <1% <1%
BioAg Existing Product Portfolio
Immediate commercial portfolio
• Working from strong starting position with existing commercial products NA
LATAM
RoW
Current Inoculants Treatment Regime
Advantageous commercial footprint
• Monsanto’s broad global footprint enabling upstream distribution and leveraging relationships with distributor and retail channels
Upstream (Seed Company)
Midstream (Distributor/Retailer)
Downstream (Grower)
1. Source: FAO stats and Internal estimates 2. Internal Estimates Strong product position Moderate product position Minor product position No current product position
1
2
3
42 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
A unique opportunity…to combine Novozymes’ and Monsanto’s capabilities and establish industry's most advanced microbial platform
A premier vehicle for bringing microbes to market and a sustainable Agriculture platform for farmers to produce more with less
A joint focus to transition this small niche into mainstream Ag practice
The power of The BioAg Alliance
43
ESTABLISHED MICROBIAL LEADERSHIP INDUSTRY-LEADING R&D CAPABILITY AND COMMERCIAL FOOTPRINT
REGULATORY
REGISTRATIONS
PROCESS
OPTIMIZATION
Extensive microbial library
Strain optimization & formulation
World-class fermentation
Existing microbial products
Unique microbial library
Leading field testing network
Global commercial footprint
Ability to unlock placement with precision
agriculture
The BioAg Alliance
+
DIS
CO
VE
RY
COMMERCIALIZATION
MANUFACTURING SELECTED
MICROBES CUSTOMERS
FIELD
TESTING
SMALL-SCALE
FERMENTATION
DISCOVERY
COLLABORATIONS
IN-LICENSING PRODUCTS &
COMPLEMENTARY TECHNOLOGIES
OUT-LICENSING
OPPORTUNITIES
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Building a stronger offering within animal farming
“To help feed a growing world, we work with partners to develop and drive adoption of proven biological innovations that improve feed efficiency and animal health”
44
Partner model
Novozymes
• Screening & in vitro
• Upscaling & production
• A shared vision • Aligned strategic interests in the project and the product • Willingness to invest • Complementary capabilities
Business development
Adjacency:
enabling
new feed
ingredients
Adjacency:
animal health
additives
(e.g..probiotic
with Adisseo)
Enzymes for
nutritional
enhancement of feed
– a strong core built
over 20 years
• Upgrading of co-and by-products to higher value products, enabling category shifts
• Leveraging existing market access, customer relationships and our strong technical capabilities within raw material processing from adjacent industries
• Enzymatic and microbial solutions for natural growth promotion
• Leveraging large collection of microbial diversity and strong technical capabilities in microbe ecology, analytics and production
Partner
• In vivo & application
• Sales & marketing
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Attractive Value Propositions in Animal Feed enzymes
• 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
• Farmers can save 25-100%* of added mineral phosphate
• Significant reduction in phosphorous excretion from animals
• Maximizing protein utilization and improving nutritional value
• Targets nearly all protein sources in feed • Improves protein digestibility by > 20%*,
increasing feed conversion • Reduces need for additional protein feed,
such as soybean meal
• Xylanase & glucanase increase non-starch polysaccharide digestion
• Amylase improves starch digestibility, releasing more energy
• Cellulase improves fiber digestion • Grain feed savings of ~ 2.5%* • Less pollution (ammonia, nitrate, nitrous
oxide and CO2)
* Dependent on multiple factors – animal species, age, feed composition and other additives
Phytase – phosphate ProAct® – protein Others – energy
45 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Sales Technical & Pharma Overview
of sales in 2014
Applications Textiles / Leather / Pulp & Paper Albumin / Biocatalysis Novozymes market share ~50% (enzymes only) Competition Dupont + regional
46
Current Trends Growth Drivers Growth Barriers
• Better and more sustainable
drug delivery and formulation
• Technical industries drive for
low cost
• Sustainability in technical
industries
• Non-animal-derived,
recombinant input sources in
pharma
• Better drug delivery dosing
regimes
• Fragmented and chemically
driven technical industries
• Conservatism in pharma
production
• Long and resource-intensive
development cycles in pharma
748 810 710 757
830
-6%
11%
-5%
6% 9%
2010 2011 2012 2013 2014
Sales DKKm ORG growth
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Pharma overview Three technology offerings targeting pharmaceuticals
Existing business
Emerging business
VELTIS®
Albumin-based technology for half-life extension through albumin fusion or
chemical conjugation.
Benefits:
• Improved dosing regimes
• Increased patient compliance
• Natural alternative to existing technologies
Enzymes for Biocatalysis Recombinant Albumin
Enzyme portfolio used as catalysts
for the production of
pharmaceuticals.
Recombinant albumins used as
ingredients to stabilize drug and
vaccine products and in medical
devices.
Benefits:
• Improved yields
• Simplified processes
• Fewer byproducts in API
manufacturing
Benefits:
• High consistent quality
• Safe and animal-free
47 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Partner Drug PI PII PIII MA Market
Tanzeum/Eperzan (Albiglutide) - GLP1 for Diabetes
rIX-FP - Once weekly for Hemophilia B
Albutropin - Growth hormone deficiency
rVIIa-FP - Novel drug for Hemophilia A+B
Multiple opportunities and potential revenue streams in Pharma from Albumin
Partner Drug PI PII PIII MA Market
MMR Vaccine
IVF media
Surgical sealent
N/A Cardiovascular surgey device coating
N/A Artificial lung/ lung damage
N/A Stem cell media
N/A Anemia
N/A Urology
Recombumin® – Drugs manufactured or formulated using Novozymes’ recombinant albumin providing running revenue
48
+7 projects in pre-clinical to phase 2 with partners such as R-tech Ueno, etc.
+8 projects in feasibility & preclinical with partners such as CSL, Teva, Epivax, Top-10 pharma company etc.
Veltis® – Drug candidates using Novozymes’ albumin technologies for half-life extension
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
New long-term targets focus on world impact
New IMPACT targets
Company performance – the traditional view on sustainbaility
World needs – areas where we can make an impact
Social Environmental
• 10 transformative innovations • 5 partnerships for change • Educate 1 million people • Enable Zymers to develop
• Save 100 million tons of CO2 • Reach 6 billion people with our
biological solutions
Sustainable
raw materials
Resource
efficiency
Product
stewardship
Health &
Safety
Human &
labor rights
Employee
satisfaction
Sustainable
growth Education
Health and
livelihoods
Climate
change
Novozymes’ unique contribution:
Updated operational targets Environment • Energy efficiency • Water efficiency • Reduction in CO2 intensity • Renewable energy • Supplier program • Gold Class RobecoSAM rating • Carbon Disclosure Project A List
People • Occupational accidents • Employee absence • Employee “satisfaction and
motivation” • Employee “opportunities for
development” • Women in senior management
Governance (economic)
Corporate
governance
Business
integrity &
antitrust
Economic
growth
Job
creation
Supplychain
management
50 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Steady improvement in employee metrics
0
2
4
6
8
10
12
We plan to continue our journey of operational excellence
Decoupling resource consumption from economic growth
0%
20%
40%
60%
80%
100%
120%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
% c
han
ge
fro
m 2
00
5 b
as
eli
ne
Sales
Gross profit
Water
Energy
CO2 emissions
2000 2014 2010 2005
1,0%
3,5%
0,5%
2,5%
2,0%
3,0%
1,5%
0,0%
Employee
absence (%)
Occupational accidents
per million working hours
51 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Remuneration Principles for Executive Leadership
• Novozymes’ principles for Executive Leadership remuneration ensure close alignment with long-term shareholder interests, links remuneration to shareholder gains and losses, and ensures management retention
• In 2014, Executive leadership team of 6 received DKK 48 million in remuneration (incl. pension) + DKK 28 million in expensed stock/based incentive programs
Annual remuneration scheme
Long term incentive program (2014-2016)
• Economic profit as measurement • 50% stock options, 50% stocks • Opportunity to double annual remuneration • Maximum clause caps upside (max. cap = 2x
intrinsic value at establishment ex. inflation) • Stock options awarded annually (3-year vesting
period), stocks in 2017 (no vesting period)
0
2
4
6
8
10
12
14
16
18
Mo
nth
s o
f sala
ry p
er
year
Max 2 months ofbase salary cashbonus linked tofulfilment of EBITand sustainabilitytargets
Max 3 months ofbase salary cashbonus linked tofulfilment ofpersonal targets
Base salary
0
10
20
30
40
50
60
70
80
90
100
0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0 5,5 6,0
% s
tock &
op
tio
ns a
ward
ed
Bn DKK of accumulated economic profit
52 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Cereals:
110 kg CO2 per ton of bread
Detergent:
50-150 kg CO2 per ton of laundry
Beverage:
25 kg CO2 per 1000 litre of beer
Vegetable oil:
44 kg CO2 per ton of oil
Dairy:
230 kg CO2 per ton of mozzarella
Margarine:
23 kg CO2 per ton of hardstock
Animal feed:
80 kg CO2 per ton of feed
Textile:
1100 kg CO2 per ton of fabric
Agriculture:
15 kg CO2 per ton of corn
Leather:
100 kg CO2 per ton of hide
Paper making:
150 kg CO2 per ton of pulp
Cosmetics:
190 kg CO2 per ton of fatty acid ester
Reducing CO2 Emissions Together with our Customers
In 2014, Novozymes helped customers save
tons of CO2 through the application of
Novozymes’ products, equivalent to taking 25 million cars off the road
Novozymes’ vision: working towards a future where biological solutions create
the necessary balance between a better business, a cleaner environment and better lives
53 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Historical Performance Demonstrates Track Record of Delivery – I/II
0%
4%
8%
12%
16%
20%
0
3.000
6.000
9.000
12.000
15.000
2000-2014 sales Sales DKKm Growth
16%
18%
20%
22%
24%
26%
28%
0
1.000
2.000
3.000
4.000
EBIT EBIT DKKm EBIT margin
52,0%
52,4%
51,8%
51,8%
52,6%
53,3%
53,7%
53,1%
53,5%
55,6%
55,7%
56,2%
57,2%
57,2%
57,4%
50%
52%
54%
56%
58%
60%
Gross margin
4%6%8%
10%12%14%16%18%
Cost ratios S&D ratio R&D ratio Adm ratio
55 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Historical Performance Demonstrates Track Record of Delivery – II/II
0
750
1.500
2.250
3.000
3.750
4.500
8%12%16%20%24%28%32%36%
Free Cash Flow FCF bef. acq. DKKm FCF bef. acq./sales
0%
4%
8%
12%
16%
20%
0
300
600
900
1.200
1.500
CAPEX Capex DKKm CAPEX/sales
0
3.000
6.000
9.000
12.000
15.000
8%
12%
16%
20%
24%
28%
ROIC Inv.Cap. DKKm ROIC, incl. goodwill
-0,2
0,0
0,2
0,4
0,6
0,8
1,0
-500
0
500
1.000
1.500
2.000
2.500
NIBD NIBD DKKm NIBD/EBITDA
56 QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Low Exposure to Raw Material Fluctuations
Factors impacting COGS development: • Productivity improvements, input prices, currency • Note: accounting practice implies that there is a
time lag between current price levels and COGS Factors impacting Novozymes’ input prices: • Geographical location, e.g., differences in input • Contractual agreements, e.g., timing, duration • Substitution possibilities, i.e., flexibility in use of
different inputs, not dependent upon one source • Price development on other products produced by
our suppliers from the same input
Raw materials consist primarily of different carbohydrates. Approximately 50% of raw material input are e.g., sucrose, maltose, glucose, starch.
35%
20%
45%
Split of COGs
57
Raw materials
Energy, utilities & others
Indirect production costs
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Dividend and Stock Buyback History
• DKK 3.00 dividend per share paid out for 2014 up 20%, payout ratio 36.6%
• Dividend pay-out ratio to increase to ~40% over next couple of years
• Expected buyback program in 2015 of up to DKK 2 billion
• Accumulated buybacks end of 2014 since IPO were DKK 7.7 billion
• Accumulated dividend and stock buybacks of ~ DKK 13.7 billion since 2000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Buyback 8 424 185 392 847 1.053 1.107 500 0 0 0 400 832 0 2.000
Dividend 124 146 162 217 231 255 278 309 326 358 504 600 687 786 925
DPS 0,33 0,40 0,45 0,63 0,70 0,80 0,90 1,00 1,05 1,15 1,60 1,90 2,20 2,50 3,00
0,00
0,50
1,00
1,50
2,00
2,50
3,00
3,50
0
500
1.000
1.500
2.000
2.500
3.000
3.500
Div
iden
d p
er
sh
are
, D
KK
DK
K m
illio
n
Dividend / Buybacks
Dividend Buyback DPS
58
Buyback
Dividend
DPS
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Shareholder Distribution
B shares listed in Copenhagen under the symbol “NZYM B” • Two share classes; A and B shares
• B shares listed in Copenhagen under the symbol “NZYM B”
• “A” share capital and 26,071,400 B shares held by Novo A/S, the management company of the Novo Nordisk Foundation
• As of May 2015, Novo A/S owns 25.5% of the share capital and controls 70.7% of votes (All A shares & ~10% of B shares)
21%
32% 4%
11%
18%
10% 4%
Shareholder distribution
of B common stock*
*Distribution equals where shares are managed, May 2015
59
Denmark
Rest of world
Novo A/S
North America
Rest of Europe
Own shares
UK
QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW
Thomas Steenbech Bomhoff
Mobile (DK):+45 3077 1226
E-mail: [email protected]
Martin Riise
Mobile (USA): +1 919 649 2565
Mobile (DK): +45 3077 0738
E-mail: [email protected]
Klaus Sindahl
Mobile (DK): +45 5363 0134
E-mail: [email protected]
Investor Relations Contacts
Further investor relations information is available from the company homepage at www.novozymes.com/investor
60
61