EDITING SLIDES IN THE NOVOZYMES TEMPLATE€¦ · PRESENTATION 1H 2014 August 14, 2014 . Table of Contents 2 Table of Contents ... Sugar cane ethanol 7 Corn ethanol 14 2.70 gal/bu

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ROADSHOW PRESENTATION 1H 2014

August 14, 2014

Table of Contents

2

Table of Contents

1. 1H 2014 presentation

2. Novozymes Overview

3. Strategy

4. Segmental Overview

Household Care

Food & Beverages

Bioenergy

Agriculture & Feed

Technical & Pharma

5. Sustainability

6. Financial Review

2

3-9

10-16

17-25

26

27-29

30-31

32-35

36-40

41-43

44-49

50-56

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QUARTERLY RESULTS • OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW

6 1

QUARTERLY RESULTS


QUARTERLY RESULTS • NOVOZYMES OVERVIEW • STRATEGY • SEGMENTAL OVERVIEW • SUSTAINABILITY • FINANCIAL REVIEW

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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, market-driven price decreases for Novozymes’ products, and the launch of competing products in Novozymes’ core areas.


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1H 2014 Summary

1,354 1,443

1,710

24.2% 24.6%

28.1%

12%

14%

16%

18%

20%

22%

24%

26%

28%

30%

32%

34%

1H'2012 1H'2013 1H'2014

900

1,200

1,500

1,800

EBIT and EBIT margin 1H 2012 - 1H 2014

5,585

5,870

6,094

3%

6%

8%

0%

2%

4%

6%

8%

10%

12%

1H'2012 1H'2013 1H'2014

5,000

5,400

5,800

6,200

Sales and organic growth 1H 2012 - 1H 2014

Satisfactory sales growth

• 8% organic sales growth driven by Household Care and Bioenergy

• 4 %-points negative impact from currencies

• Sales growth slowed down during the period as expected following strong Q1 and higher comparable level in Q2

Strong financial performance

• EBIT: +19% supported by one-time effect from The BioAg Alliance, favorable product mix changes and productivity improvements

• EBIT margin up by 3.5 %-points ~2% from the BioAg Alliance ~1.5% underlying improvement

• DKK 3,417 million in free cash flow bef. acquisitions

FY-2014 Profit outlook increased

• Increased EBIT and Net Profit growth: +9-11%

• Sales growth outlook maintained

• +500 million free cash flow bef. acq: 3.8-3.9 bn

+7%

+19%

DKKm

DKKm


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Sales & Markets

1H 2014 sales: DKK +4%, LCY +8%, organic +8%

Q2 2014 sales: DKK +1%, LCY +5%, organic +5%

399

949

873

1,571

2,078

402

919

1,050

1,599

2,124

Technical &

Pharma

Agriculture &

Feed

Bioenergy

Food &

Beverages

Household

Care

Sales by industry, DKKm

1H 2014 1H 2013

• Household Care: Emerging markets doing well despite weakness in China. Consumer down-trading in developed markets hampered growth a bit. New innovation to come in 2H’14

+20%/+26%

+2%/+5%

+2%/+5%

DKK growth/LCY growth

+1%/+3%

(3)%/+2%

• Food & Beverages: Growth across all main segments except starch conversion. Healthy concepts and baking performed well

• Bioenergy: New innovation continued good performance and increased penetration in a strong U.S. ethanol market

• Agriculture & Feed: Good sales development in feed, especially in the Americas. Negative timing impact in BioAg

• Technical & Pharma: Sales of pharma enzymes were the main growth driver. Other technical applications roughly flat


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80

90

100

110

120

130

140

Q1'1

2

Q2'1

2

Q3'1

2

Q4'1

2

Q1'1

3

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3

Q3'1

3

Q4'1

3

Q1'1

4

Q2'1

4

Q3'1

4

Q4'1

4

Sales performance & US production, 2012-2014

US eth. prod. index NZ Bioenergy org. sales index

Bioenergy; power of innovation Household Care; growth fluctuates

7

Business Operations in Detail

-10%

0%

10%

20%

30%

Q1'0

8

Q2'0

8

Q3'0

8

Q4'0

8

Q1'0

9

Q2'0

9

Q3'0

9

Q4'0

9

Q1'1

0

Q2'1

0

Q3'1

0

Q4'1

0

Q1'1

1

Q2'1

1

Q3'1

1

Q4'1

1

Q1'1

2

Q2'1

2

Q3'1

2

Q4'1

2

Q1'1

3

Q2'1

3

Q3'1

3

Q4'1

3

Q1'1

4

Q2'1

4

Quarterly organic growth rates, 2008-2014

Quarterly growth rates Annual growth rates

Avantec® launched

Spirizyme® Achieve & Olexa® launched

• Quarterly growth rates vary between -1% to +19%

• Annual growth rates between +4% to +13%

• Long-term growth trajectory has been +9%

• Long-term growth trend and volatility expected to continue

• 1/3 of U.S. ethanol produced with 1+ of novel solutions

• Still opportunities to penetrate beyond early adopters

• New growth wave expected to come from increased value capture of new innovation over next 1-2 years


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R&D Activity Update: Bioenergy Strategy Overview

Grain Ethanol (1G) - Drive more yield

Biomass Conversion (2G) - Enable commercialization

New Opportunities - Explore biodiesel and sugar cane

• Recent introductions delivered significant yield and value capture

• More innovation to unlock higher yields expected over the coming period

• Strong focus on delivering CTec4you solutions for different pre-treatment processes

• Partnering to optimize total value chain and drive down total production costs

• Enzymatic Biodiesel – Exploring cleaner and cheaper concept to be launched within 12 months

• Exploring solutions for sugar cane – commercial viability tested within 12 months

40

60

80

100

120

140

160

2005 2010 2015 2020

Enzyme Developments

Enzyme Developments

Enzyme and ProcessDevelopments

Total production cost development 2013 Global biofuels production, ~30 bn gallons*

* Sources: RFA, F.O.Licht, & Oilworld.de

Other ethanol 2

Biodiesel 7

Sugar cane ethanol 7

Corn ethanol 14

2.70 gal/bu

2.85 gal/bu

Eth

anol yie

ld p

er

bushel of

corn

3.00 gal/bu

Avantec®, Spirizyme Achieve® &

Olexa®

New Innovation

2012-2014 2014-2016


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1H 2014 Financial Performance

Strong financial performance in 1H’14

• Continued productivity improvements and favorable product mix more than off-set negative impact on gross margin from The BioAg Alliance and currencies

• +1.5 %-points underlying EBIT margin improvement despite currency headwinds

• Strong cash flow generation

• CAPEX relatively low, as we have been successful in postponing some investments

2014 profit outlook increased

• Higher EBIT and Net Profit growth due to better operational performance

• Sales outlook maintained

• Net investment outlook lowered by DKK 200 million

• Free cash flow increased by DKK 500 million

• ROIC outlook adjusted

• Close to halfway through the buyback program – on track for DKK 2 bn program in total for the full year

Key financials Realized 1H 2014

2014 Outlook

August 14

2014 Outlook Apr. 24

Sales growth, DKK +4% 4-6% 4-6%

Sales growth, LCY +8% 6-9% 6-9%

Sales growth, org. +8% 6-9% 6-9%

EBIT growth +19% 9-11% 8-10%

EBIT margin 28.1% ~26% ~26%

Net profit growth 20% 9-11% 8-10%

Net investments excl. acq. and impact from The BioAg Alliance, DKKm

206 700-800 900-1,000

Free cash flow before acq., DKKm

3,417 3,800-3,900

3,300-3,400

ROIC incl. goodwill 24.6% ~22% 21-22%


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6

INVESTOR PRESENTATION OVERVIEW


2


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Novozymes – The World Leader in Bioinnovation

Household Care

Food & Beverages

Bioenergy Agriculture

& Feed Technical &

Pharma

Who are we?

*A+B shares August, 2014

Founded 1925

Listed 2000

Ticker NZYM B

Exchange Copenhagen

Market Cap* US$ 15bn

Long-term targets: > 10% organic sales growth from 2015 > 24% EBIT margin > 22% ROIC

Global: +6,000 employees, 700 products in 140 countries

R&D intensive: ~7,000 patents, 13-14% of sales spent on R&D

Profitable: $2.1bn/€1.5bn in sales and 24.7% EBIT margin in 2013

Majority owner Novo A/S controls 25.9% of the capital and 70.5% of the votes


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Experienced Leadership Team Exploring Growth & Value Creation Opportunities

12

Per Falholt Andrew Fordyce Thomas Nagy

Peder Holk Nielsen Benny Loft

Thomas Videbæk

Peder Holk Nielsen President and CEO Novozymes since 1984 Background: Chemical Engineering

Benny D. Loft Executive Vice President, CFO and Corporate Functions Novozymes since 1998 Background: State-authorized public accountant

Per Falholt Executive Vice President, Research and Development Novozymes since 1984 Background: Chemical engineering

Andrew Fordyce Executive Vice President, Business Operations Novozymes since 1993 Background: Chemical Engineering

Thomas Nagy Executive Vice President, Supply Operations Novozymes since 1986 Background: Chemical Engineering

Thomas Videbæk Executive Vice President, Business Development Novozymes since 1988 Background: Chemical Engineering


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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

13

Delivering Tomorrow’s Solutions Today


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Bioenergy

• Corn ethanol • Cellulosic biofuels

• Unique biotech-focused business with a strong legacy of delivering growth, earnings, and cash flow

• ~13-14% 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

Uniquely Diversified Group - Creates Synergies and New Opportunities

Household Care

• Laundry & Dishwasher detergents

• Cleaning products

Food & Beverages

• Baking • Starch to syrups • Brewing & Alcohol • Healthy concepts

Agriculture & Feed

• Animal feed • BioAgriculture

Technical & Pharma

• Textile & Leather • Pulp & Paper • Wastewater • Pharma ingredients

14

16% 36% 27% 14% 7%


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• Sales FY 2013 of DKK 11.7 bn (USD ~ 2.1 bn)

• Strong profitability, 24.7% in EBIT margin FY 2013

• ROIC of 20% FY 2013

Diversification in Revenue Streams Underpins the Company’s Strong Financial Position

2013 Sales by geography

2013 Sales by industry

Europe,

Middle

East and

Africa 38%

North

America

33%

Asia

Pacific

19%

Latin

America

10%

15

+6%/+7%

+4%/+7%

+2%/+6%

+8%/+17%

DKK growth/LCY growth

4,222

3,190

1,909

1,668

757

Household

Care

Food &

Beverages

Bioenergy

Agriculture &

Feed

Technical &

Pharma

36%

27%

16%

14%

7%

Percentage of sales:

+7%/+10%

DKK growth/ LCY growth DKKm

+3%/+8%

+9%/+13%

0%/+3%

+6%/+9%


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Global Production and R&D Setup

Curitiba, Brazil Enzyme production BioAg production R&D

Bangalore, India Enzyme production R&D

Tokyo, Japan R&D

Bagsværd, Denmark Headquarters R&D Pilot plant Kalundborg, Denmark Enzyme production

Nottingham, England Biopharma production

(Albumin) R&D

Raleigh, North Carolina Enzyme production R&D Salem, Virginia • Microorganisms production

Pilar, Argentina BioAg production

Davis, California

R&D

Saskatoon, Canada BioAg production R&D

Beijing, China R&D Tianjin, China Enzyme production Biopharma production

(hyaluronic acid) Shanghai, China Enzyme production Shandong, China Innovation centre

16

Blair, Nebraska

Enzyme production

Ottawa, Canada Enzyme production

Milwaukee, Wisconsin BioAg production

Houston, Texas

BioAg production

Shenyang, China Microorganisms

production


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INVESTOR PRESENTATION STRATEGY



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Novozymes

48%

Genencor

(DuPont) 20%

DSM

6%

Others and

captive 26%

Undisputed Market Leader Expanding Enzyme Application

Market potential*

Global enzyme market value 2013: DKK ~ 22bn

Current enzyme market DKK ~ 22bn

Untapped market Multi-billion (US$)

2000: DKK ~ 12bn

2013: DKK ~ 22bn

Novozymes 42%

Novozymes 48% Rest of

market

58%

Rest of market

52%

Rules of competition dictated by innovation

*Global markets for chemicals, food ingredients, feed additives, etc. 18

Global enzyme market value:


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Multiple Drivers Create a Sustainable Business with Significant Growth Potential

19

Drivers

• Energy efficiency

• Cost/performance

• Waste reduction

• Sustainability

• Scarce raw materials

• Replacing chemicals

Ambition

Long-term financial targets: > 10% sales growth

from 2015

> 24% EBIT margin

> 22% ROIC


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• History shows potential to grow 10% from a diversified set of industries, but not consistently

• Consistent performance in existing business will lay foundation for +10%

• Growth platforms will add layers of growth to enable +10%

• All 5 sales areas have the potential to deliver +10% growth within the 5-year period

How Do We Get To +10% from 2015?

Historic performance & size of areas, 2013 DKKm Future growth to come from

757

1,668

1,909

3,190

4,222

Technical &

Pharma

Agriculture &

Feed

Bioenergy

Food &

Beverages

Household Care

Established businesses • Household Care • 1G bioenergy • Food & Beverages + Technical

+

1%

6%

5%

5%

9%

2008-2013 Organic CAGR:

Gro

wth

pla

tform

s

Transformational opportunities

Biomass Conversion

BioAg

Growth contributors

Animal Health & Nutrition

Biopharma


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• Achieving growth through R&D investment remains a fundamental priority

• >50 new product in the last 5 years, ~100 active projects in current portfolio

• R&D investment-reaping rewards with increasing diverse revenue streams

1. Drive Innovation – Because Innovation Drives Top-Line Growth

R&D Expenditure 2009−2013 (DKK million)

2000−2013 Sales CAGR of ~7%

1,207 1,360

1,464 1,527 1,528

2009 2010 2011 2012 2013

10%

12%

14%

16%

18%

20%

22%

24%

26%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Sales DKKm EBIT margin R&D/Sales ROIC

21


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2. Expand Opportunities; Developing new technology and business platforms

Continued development in our technology base…

…creates opportunities to develop new business platform

Molecular

biology

Strain development using

protein engineering, genetic

modification, DNA sequencing,

etc.

Bio-informatics

& Systems biology

Application of computer

algorithms in the

computational discovery of

enzymes in DNA databases

Screening systems

Application of high-throughput

robotics to find the best

enzyme candidates

Industrial-scale

fermentation

Production of enzymes and

proteins whilst continuously

optimizing and improving

yields

22

Biomass conversion

Bio-Agriculture

Biopharma

Animal Health & Nutrition

Emerging platforms


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Innovation clusters

• Customers

• Academia

• Radical ideas

• Internal ideas

Emerging platforms

• Undisclosed projects

Growth platforms

• Biomass conversion

• BioAg

• Animal Health & Nutrition

• Biopharma

• Responsible for new business areas and Novozymes’ entire pipeline prioritization • Close coordination on pipeline, resource allocation and customers • Business development organization to cater for alternative business models and new business areas • Innovation & business development crucial in all industries Novozymes serves

Business Development Nurtures Tomorrow’s Business for Novozymes

Established businesses: • HHC • F&B • 1G fuel • Technical

Business Development

Business Operations

M&A + partnerships


23

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RAW MATERIALS

FERMENTATION

MICRO- ORGANISMS

PURIFICATION

FORMULATION

ENZYMES

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

• Focused on improving margins through sophisticated technological solutions

• Achieved sales CAGR of 7% since 2000 with improving margins

• Roughly 20% of the R&D spend goes into productivity improvements

3. Enzyme Technology Improves Profitability

3 ways to gain productivity improvements

24

1

3

2


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0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Cash for growth and shareholders

Dividends Capex Acquisitions Buybacks

25

Cash Generation, Use, Capex and Future Priorities – DKK billion

CAPEX 2002-2013 DK & new facilities

2014-2018; DKK +15bn* in operational cash flow to be invested in:

1. Innovation

2. Business development

3. Acquisitions

4. CAPEX as needed

5. Return to shareholders

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Cash generation has tracked EBIT

EBIT Operational cash flow1 2

3 4

* Estimated as a simple progression of current operational cash flow with 10% growth p.a.


2002-04

2005-07

2011-13

2008-10

LATAM

EMEA

NA

APAC

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INVESTOR PRESENTATION SEGMENTAL OVERVIEW



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Household Care (36% of 2013 sales)

Household Care Overview

Household Care Sales

Application Laundry & dishwasher detergents Microbials for cleaning solutions

Competitors Genencor (Dupont)

Growth Drivers

Performance claims / GDP & Population / Sustainability / Replacement of

traditional chemicals / Oil price volatility

Growth Barriers

Sustained low oil price / Economical slowdown / Consumer preferences &

behavior / Competition

Recent Launches

Evity plaform for laundry, Blaze Evity for ADW, Cellusoft@LT, Lipoclean, Xpect

2,853

3,324 3,514

3,973

4,222

4%

13% 7% 11%

9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

-

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2,750

3,000

3,250

3,500

3,750

4,000

4,250

4,500

2009 2010 2011 2012 2013

Sales DKK LCY growth


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Enzymes are Gaining Traction in Detergents

The advantages of enzymes..

..drive new product launches..

..increasing the overall penetration

of enzymes

Chemicals

replacement

Surfactants

Builders

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000

2005

2010

2015

Share of detergents

with enzymes

0

100

200

300

400

500

600

700

800

900

1000

2000

2002

2004

2006

2008

2010

2012

# of detergents containing

enzymes launched globally

Compaction

Cost stability

Wash performance

Europe

LATAM

NA

AP MEA

Source: Novozymes estimates and Mintel


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Future

Enzymes 0-20% of raw material costs

Enzymes >10% of raw materials globally

Today

Enzymes 0-12% of raw material costs

Enzymes 3-5% of raw materials globally

29

Replacing Chemicals in Detergents

Source: Agglomerations and Novozymes estimates Enzyme classes in toolbox: Proteases, amylases, mannanases, lipases, pectinases, cellulases

Surfactants 37%

Builders 34%

Enzymes 6%

Perfume 4%

Others 7%

Bleach 8%

Polymers 4%

Raw mat. cost distribution in top-tier powder detergent

Surfactants 68%

Builders 8%

Enzymes 12%

Perfume 7%

Others 4% Polymers 1%

Raw mat. cost distribution in top-tier liquid detergent Benefits:

• Reduce oil price sensitivity • Improve wash performance - e.g. cold-water wash • Compaction • Sustainability

Surfactan

ts

Builders

Novozymes’ unique enzyme toolbox can replace a part of the

chemical surfactants & builders


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Food & Beverages (27% of 2013 sales)

Food & Beverages Overview

Food & Beverages Sales

Application Baking / Starch conversion / Brewing / Beverage alcohol / Healthy concepts

Competitors DSM, Genencor (Dupont), AB Enzymes

Growth drivers

BAKING: GDP / Convenience / Whole grain breads / Healthy foods / Raw

material replacement BREWING: Alternative raw materials /

Process Streamlining / Branding / Emerging markets / Sustainability

OTHERS: Healthy foods & concepts / Yield improvement / High sugar price

Growth barriers

BAKING: Competition BREWING: Enduring low malt prices / Changing legislations about min. malt content & alcohol taxation / Brewing

traditions – OTHERS: Lack of regulations

Recent Launches

Sensea Attenuzyme Novamyl Pro Panazea Opticake Fresh

2,466

2,850 3,033

3,186 3,190

0%

11%

8%

1%

3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

-

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2,750

3,000

3,250

3,500

3,750

4,000

2009 2010 2011 2012 2013



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Fill and Manage the Pipeline - Enzyme Innovation to the Food Industry

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New economies and urbanization

Health & Wellbeing Convenience Informed

consumption

Reinforce customers’ brand

• Claims

• Safety

• Sustainability

Reduce costs

• Process streamlining

• Improve Raw mat utilization

Apply regionally

• Enzyme applications vary with geography


31

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Bioenergy (16% of 2013 sales)

Bioenergy Overview

Bioenergy Sales

Application Corn ethanol / Biomass conversion

Competitors Genencor (Dupont), Captive producers

Growth drivers

Sustainability & CO2 / High oil price / Raw material prices / Political mandate /

Energy security / Rural development

Growth barriers

Sustained low oil price / Competing technologies / Lack of infrastructure /

Blend wall & ILUC Public debate / Loss of political support

Recent launches

Avantec , Olexa Spirizyme Achieve

1,480

1,846 1,782 1,748

1,909

3%

19%

1%

-9%

13%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

-

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2009 2010 2011 2012 2013



Raw material Production process

Enzymes

Enzymes

Enzymes

Sugarcane

Classical corn

Raw corn starch hydrolysis

Biomass

Other crops

Ethanol

Butanol

Biogas

Polypropylene

Acrylic acid

Etc.

Co-products DDGS; Feed,

Corn oil

Co-products Bagasse; Energy

Co-products DDGS; Feed

Co-products * Lignin; Energy,

biochemical

End product

Extraction

Milling

Milling

Collection

Cooking

Cooking Cooking

Pretreatment

Ferm

enta

ble

sugar

*In the US Department of Energy Biomass-model the lignin residue is burned to power the production plant

Milling Enzymes

Co-products DDGS; Feed,

Corn oil


Production of Biofuels and Beyond

33

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• The number of projects choosing enzymatic hydrolysis conversion has increased from 7 in 2008 to 26 in 2013

• In addition to projects publicly announced, there is a significantly larger pipeline of projects in the making

• The market has shifted from a U.S. play to a global opportunity

• Important to note that not all facilities on the drawing board will make it commercially

Many More Potential Customers Are Interested in Biomass Conversion Today Than 5 Years Ago

Commercial projects by region, 2013

2 - Crescentino - Maabjerg

2 - MYBiomass - Sabah

9 - Cofco/Sinopec - SQ - Datang - Dacheng - HNTG - Longlive - ZTE - Stategrid - Jilin Fuel

7 - POET-DSM - DuPont - Project Alpha - Fiberight - Abengoa - Canergy - Greenfield

6 - GranBio - Raizen - OAI - Rhodia - TMO - Colbiocel

Commercial projects: Projects either completed, under construction or publicly announced using enzymatic hydrolysis


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• A transformational opportunity for Novozymes • Turning renewable low-value carbon into high-value product is revolutionary • Enzymes poised to be a leading conversion technology • Entire field to be the focus of significant innovation once commercialization has caught on

Biomass Conversion; Food, Feed, Fuel, Chemicals and Materials Made from Biomass and Waste

Potential offered by biorefining by 2030:

• ~8.2 million man-years employment

• 475 million tons CO2 reductions/year

• $3,000 billion in accrued revenue for a $500 billion investment

Source: ”Moving Towards a Next-Generation Ethanol Economy,” Bloomberg New Energy Finance, 2012


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Agriculture & Feed (14% of 2013 sales)

Agriculture & Feed Overview

Agriculture & Feed Sales

Application

FEED: Monogastric animals / Substituting phosphate / Enhancing protein uptake

AGRICULTURE: Agricultural Biologicals, innoculants etc./ Aquaculture

Competitors FEED: Genencor (Dupont)

AGRICULTURE: BASF, Bayer CropScience and smaller regional players

Growth drivers

FEED: Feed to meat conversion / Phosphate prices / Grain prices / Growing

meat consumption / Regulatory requirements AGRICULTURE: Yield enhancement / High fertilizer prices /

High Ag commodity prices /

Growth barriers

FEED: Low feed ingredient prices / Competitive pressure / Lower meat

consumption AGRICULTURE: Low raw material prices / Small but emerging field

Recent launches

Ronozyme HiPhos , Ronozyme ProAct MET52, Taegro

872 956

1,371

1,617 1,668

1% 3%

48%

14%

8%

-2%

8%

18%

28%

38%

48%

58%

68%

78%

88%

-

250

500

750

1,000

1,250

1,500

1,750

2,000

2009 2010 2011 2012 2013



BASIC LAYOUT


guide

AG BIOLOGICALS MARKET1

MARKET SEGMENTED BY PRODUCT CLASS

2/3rd Microbials

Microbial Pesticides

Microbial Inoculants

Beneficial Insects

Biochemical

Other

AG MICROBIALS OPPORTUNITY

EXAMPLE: TRADITIONAL CHEMICALS & PESTICIDES2

VS. AG MICROBIALS MARKET1

Industry growth driven by increasing demand for new sustainable options

AG MICROBIALS MARKET1

MARKET SEGMENTED BY CROP

Fruits and Vegetables

Soybeans

Cotton

Corn

Rice

Other Crops

Annual Growth Mid-Teens CAGR

2013 Estimated Sales $2.6B

SALES (

USD

) There’s significant opportunity for ag Microbial market expansion:

Pesticides ($54 billion)

Nitrogen

Phosphate

Potassium

Biopesticides

Inoculants

~$1.8 billion

~$240 billion

Ferti

lizers

($

18

3 b

illio

n)

• Microbials can be a range of products that can be complementary to, or replace, traditional chemistry options

• Today the ag microbial market is approximately $1.8 billion in sales, while traditional chemicals and pesticides total approximately $240 billion

Today, majority of ag microbials are used in the fruits and vegetables market, we see significant opportunity in broad acre field crops like corn, soy, cotton and canola

Opportunity: Core Crops

1. Monsanto estimates of Ag Biologicals industry based on a combination of research data from DunhamTrimmer, Agrow, MarketsandMarkets, Frost & Sullivan, Boston Consulting Group, BCC Research, Philips McDougall, Global Industry Analysts 2. MarketLine and Phillips McDougal market data

TRADITIONAL CHEMICALS & PESTICIDES AG MICROBIALS


37

Agricultural Biologicals is a Niche Market with Significant Opportunities

BASIC LAYOUT


guide

Combination of Novozymes and Monsanto Capabilities Establishes Industry's Most Advanced Microbial Platform

ESTABLISHED MICROBIAL LEADERSHIP

• World leader in microbial technology; discovery, development and production

• Existing microbial business including stand-alone pipeline, extensive microbial libraries and intellectual property

• Current commercial portfolio including products and infrastructure

INDUSTRY-LEADING R&D CAPABILITY AND COMMERCIAL FOOTPRINT

• Industry-leading R&D network that allows for scaled testing and development

• Complementary microbial assets including extensive microbial libraries and intellectual property

• Global commercial reach across crops, brands and geographies to drive commercial opportunity

+


38

The BioAg Alliance

BASIC LAYOUT


guide 39

Power of Microbial Technology: Novozymes’ Proven Microbial Portfolio

Nutrient efficiency

Inoculants

Biofungicides Bioinsecticides Nitrogen fixation

Enhances nutrient efficiency of key nutrients and plant health incl. phosphate

Nitrogen-fixating inoculants

Provides disease control for fruits and vegetables

Provides insect control for fruits and vegetables as well as turf and ornamentals

Actinovate® MET52® JumpStart® Torque®, QuickRoots® Ratchet®

TagTeam®, Cell-Tech®, Optimize®

1

CURRENT PRODUCT PORTFOLIO


Biocontrol products

2

Microorganism applied to the seed before planting

The active ingredient, a soil fungus, grows on the roots and solubilizes the residual soil phosphate, unavailable for plant use

Yield increases due to superior nutrient uptake in plant’s early life stage

CASE: JUMPSTART® CASE: MET52® - mites on strawberry

TREATED UNTREATED

BASIC LAYOUT


guide 40

Attractive Value Propositions in Animal Feed

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

• Farmers can save 25-100%* of added mineral phosphate

• Significant reduction in phosphorous excretion from animals

ProAct® – protein • 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

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%*

• Less pollution (ammonia, nitrate, nitrous oxide and CO2)

* dependent on multiple factors – animal species, age, feed composition and other additives


BASIC LAYOUT


guide 41

Technical & Pharma (14% of 2013 sales)

Technical & Pharma Overview

Feed & Other Tech. Enzymes Sales

Application TECH: Textiles / Leather / Pulp & Paper PHARMA: Albumin / Hyaluronic acid /

Biocatalysis

Competitors Genencor (Dupont), Alternative technologies and products

Growth drivers

TEXTILE: Lighter textile shades / Sustainability PHARMA: Animal free

materials / Consistent quality / Reliable sustained supply / Collaborative

partnerships

Growth barriers

TEXTILE: Fashion cycles / Fragmented industry PHARMA: Long sales cycle times / Competing and emerging

technologies

Recent launches

Peltec X-Zyme Terminox Supreme

Hyasis Albuflex

777

748

810

710

757

-2%

-9%

11%

-17%

10%

-25%

-15%

-5%

5%

15%

25%

35%

45%

500

750

1,000

2009 2010 2011 2012 2013



BASIC LAYOUT


guide 42

Pharma Overview

Bacillus-derived hyaluronic acid offering superior safety, consistency and performance offers cost savings and minimized risk

• Used as an ingredient in medical devices and pharmaceutical products

• Next generation albumin-based technology to create longer-lasting drugs through albumin fusion or chemical conjugation

• Improved dosing regimes for increased patient compliance

• High quality and animal-free recombinant albumins developed to provide customers with a safe and consistent, regulatory compliant product

• Used as an ingredient to stabilise drug and vaccine products and in medical devices

• Comprehensive biocatalysis enzyme portfolios including lipases, proteases, esterases, oxido-reductases and amylolytic enzymes

• Improved yields, simplified processes and fewer byproducts in API manufacturing


Hyaluronic Acid Recombinant Albumin

VELTIS® Enzymes for Biocatalysis

Novozymes

Drug Discovery Drug

Development Manufacturing Distribution

Sales and Marketing

The classic pharma value chain

BASIC LAYOUT


guide

Company Deal Drug Target Pre-clin

PI PII PIII MAA stage

Fusion + expression

Several molecules (G-CSF, BNP, …)

Bio- betters

X X X

Fusion Blood coagulation factors

FIX, FVIIa, + others

X X X

Fusion + expression

Kunitz Domain proteins and antibody fragment

Several X

Publicly available information on companies using Novozymes’ VELTIS® technology:

A Number of VELTIS® Candidates are in Clinical Development

43

Albiglutide® (GLP-1 albumin fusion) for diabetes type II, approved in both the EU and the US in 1H 2014


http://www.gsk.com/index.htm

http://www.cslbehring.com/s1/cs/enco/1151443990667/content/1151443991017/home.htm

1 2 3 4 5




guide


6 5

INVESTOR PRESENTATION SUSTAINABILITY & CORP. GOVERNANCE



BASIC LAYOUT


guide 45

Best in Class Storebrand SRI

Member of FTSE4Good Global and Europe

Member of SB20 by SustainableBusiness.com

PRIME status by oekom research

# 3 in Carbon Disclosure Project Annual Nordic Leadership Index

Novozymes in the Dow Jones Sustainability Indexes (DJSI): • Included in DJSI Biotechnology sector since

2000, and sector leader 2000-2007 and 2009-2013

• ‘Gold Class’ rating in 2010-2014 in Sustainable Asset Management (SAM) Sustainability Yearbook

Founding member of the Sustainability Consortium

Recognized as a Sustainability-Driven Organization


BASIC LAYOUT


guide 46

Scientific approach

Governance structure

Green technology

Three-pronged Core of Novozymes’ Sustainability

Green means business

Our innovative green solutions embed sustainability and drive new business opportunities

Sustainability is in our DNA

- Corp. Governance structure - Sustainability department - Mission, Vision, Values - Compensation

It’s all in the numbers

- All products are life-cycle assessed (LCA) - LCA integrated in value chain from R&D to S&M - Carbon footprint and emissions abatement

Use of natural resources

Economic growth

Bioinnovation

TIME

Risk mitigation

Cost reduction

Business dev.


BASIC LAYOUT


guide 47

• 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 2013, Executive leadership team of 6 received DKK 43 million in remuneration (incl. pension) + DKK 35 million in expensed stock/based incentive programs

Remuneration Principles for Executive Leadership

Annual remuneration scheme Long term incentive program (2014-2016)

0

2

4

6

8

10

12

14

16

18

Month

s o

f sala

ry p

er

year

Max 2 months of base

salary cash bonus linked

to fulfilment of EBIT and

sustainability targets

Max 3 months of base

salary cash bonus linked

to fulfilment of personal

targets

Base salary

0

20

40

60

80

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 &

options

aw

ard

ed

Bn DKK of accumulated economic profit

• Economic profit as measurement

• 50% stock options, 50% stocks

• Opportunity to double annual remuneration

• Maximum clause caps upside (100% = DKK 134m

at establishment, maximum cap 2x intrinsic value)

• Stock options awarded annually (3-year vesting

period), stocks in 2017 (no vesting period)


BASIC LAYOUT


guide

• In 2013, Novozymes helped customers save 52 million tons of CO2 through the application of Novozymes’

products, equivalent to taking 20 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

Reducing CO2 Emissions Together with our Customers

Net CO2 saving using 1kg enzyme in different production processes

30 kg

ANIMAL FEED

40 kg

LEATHER

100 kg

TEXTILES

150 kg

BIOETHANOL

150 kg

DETERGENT

200 kg

FOOD

Up to 600 kg

PAPER

1300 kg

OILS & FATS

3400 kg

BIOCATALYSIS

3800 kg

CEREAL FOOD

48


BASIC LAYOUT


guide 49

Sustainability Performance and Targets

Targets 2013

targets 2013

realized 2014 target

Water efficiency (index 2005) 35% 33% 34%

Energy efficiency (index 2005) 42% 40% 42%

CO2 efficiency (index 2005) 50% 54% >50%

Million tons CO2 emission reduced 50 52 56

Occupational accidents per mio. working hours

<3.0 2.4 <3.0

Rate of absence <3% 1.8% <3%

Employee turnover 4-9% 7.5% 4-9%

Supplier adherence to our supplier

program 95% 97% 97.5%

“Satisfaction and motivation” score in

employee survey 75 77 75

“Opportunities for professional and

personal development” score in employee

survey

75 74 75

New leaders appointed who are women 30% 26% 30%

New leaders appointed of a nationality

other than Danish 55% 44% 55%

Rating from SAM in the Sustainability

Yearbook 2014 Gold Gold

Medal class rating

Long-term sustainability targets • Be recognized as a global leader within

sustainability

• Be a globally preferred employer, attracting global talent as a diverse and inclusive workplace

• Ensure 100% supplier adherence to Novozymes’ supplier program for commercial, quality and sustainability performance in 2015

• Champion the inclusion of biofuels as a

high-impact opportunity area in the U.N.’s Sustainable Energy for All initiative in 2015


1 2 3 4 5




guide


6

INVESTOR PRESENTATION FINANCIAL REVIEW

6



BASIC LAYOUT


guide 51

Historical Performance Demonstrates Track Record of Delivery

0%

4%

8%

12%

16%

20%

0

3,000

6,000

9,000

12,000

15,000

2000-2013 sales CAGR of ~7%

Sales DKKm Growth

16%

18%

20%

22%

24%

26%

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%

50%

52%

54%

56%

58%Gross margin

0

500

1,000

1,500

2,000

8%

12%

16%

20%

24%

Free Cash Flow

FCF bef. acq. DKKm FCF bef. acq./sales

4%

8%

12%

16%

0

300

600

900

1,200

1,500

CAPEX

Capex DKKm CAPEX/sales

0

3,000

6,000

9,000

12,000

8%

12%

16%

20%

24%

28%

ROIC

Inv.Cap. DKKm ROIC, incl. goodwill


BASIC LAYOUT


guide 52

Low Exposure to Raw Material Fluctuations

35%

20%

45%

Raw materials

Energy/utilities & others

Indirect production cost

• 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

Split of COGS

Raw materials consist primarily of different carbohydrates. Approximately 50% of raw material input are e.g., sucrose, maltose,

glucose, starch.


BASIC LAYOUT


guide 53

Dividend and Stock Buyback History

• 2013 dividend per share DKK 2.50, up 13%, payout ratio 35.7%

• Expected buyback program in 2014 of up to DKK 2 billion

• Accumulated buybacks end of 2013 since IPO were DKK 5.7 billion

• Accumulated dividend and stock buybacks of ~ DKK 10.7 billion since 2000

Dividend / Buybacks

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Buyback 8 424 185 392 847 1,05 1,10 500 0 0 0 400 832 0

Dividend 124 146 162 217 231 255 278 309 326 358 504 600 687 786

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

0.00

0.50

1.00

1.50

2.00

2.50

3.00

0

200

400

600

800

1,000

1,200

1,400

1,600

Dividend per share, DKK

DKK million

Dividend Buyback DPS


BASIC LAYOUT


guide 54

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 27,779,900 B shares held by Novo A/S, the management company of the Novo Nordisk Foundation

• Novo A/S owns 25.5% of the share capital and controls 70.4% of votes (All A shares & ~11% of B shares)

Shareholder Distribution

Shareholder distribution of B common stock*

Denmark

20%

UK

35% Own

shares 3%

Rest of

Europe 10%

North

America

16%

Novo A/S

11%

Rest of

World 5%

*Distribution equals where shares are managed, June 2014


BASIC LAYOUT


guide

Klaus Sindahl

Mobile (DK): +45 5363 0134 E-mail: [email protected]

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]

Investor Relations Contacts

Further investor relations information is available from the company homepage at

www.novozymes.com/investor

55


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