Biotech-based world leader Biotech-based world leader in enzymes - - PowerPoint PPT Presentation

▶
biotech based world leader biotech based world leader in
SMART_READER_LITE
LIVE PREVIEW

Biotech-based world leader Biotech-based world leader in enzymes - - PowerPoint PPT Presentation

Nov 22, 2023 417 likes •640 views

Biotech-based world leader Biotech-based world leader in enzymes & microorganisms Novozymes Novozymes Financial results 1H 2006 Conference call, August 8 4:30 pm DK time Unlocking the magic of nature Conference call August 8, 2006

slide-1
SLIDE 1

in enzymes & microorganisms Biotech-based world leader Biotech-based world leader

Unlocking the magic of nature

Novozymes Novozymes

Financial results 1H 2006 Conference call, August 8 4:30 pm DK time

slide-2
SLIDE 2

2

Unlocking the magic of nature

Conference call August 8, 2006 Conference call August 8, 2006

Today’s call is also being broadcasted live via the Internet at www.novozymes.com/investors, tab Conference call. Members of Executive Management will present the financial results, which will be followed by a Q&A session. In total, today’s call is expected to last up to an hour. Following the call, a replay will be available at the Internet site above.

Access code “ Novozymes”

+45 7026 5040 +44 20 7769 6432 +1 877 204 0753 Dial-in numbers DK UK US 4:30 pm 3:30 pm 10:30 am DK time UK time US east coast time

slide-3
SLIDE 3

3

Unlocking the magic of nature

Key messages in 1H 2006 Key messages in 1H 2006

  • Healthy development in sales in line

with expectations

  • EBIT growth from continuous

productivity gains and solid free cash flow continued

  • Four products launched in 2Q 2006

10 % EBIT growth 5 % S ales growth, local currency 8 % S ales growth, DKK YTD 1H 2006 Key financials

  • Joint development agreement with China Resources Alcohol Corporation

(CRAC) within biomass-to-fuel ethanol

  • Acquisition of UK-based Delta Biotechnology Ltd supports the platform of

ingredients for the biopharmaceutical industry

  • Execution of share capital reduction of 6.6% or DKK 46 million (nominal)
  • Overall strategy retained - business development activities initiated within

certain areas

  • Free cash flow 2006 expectations up DKK 100 million
slide-4
SLIDE 4

4

Unlocking the magic of nature

1H 2006 sales development 1H 2006 sales development

990 799 752 340 156 997 996 791 344 184 200 400 600 800 1,000

Technical - detergent Technical -

  • thers

Food Feed Microorganisms

1H 2005 1H 2006

S ales in DKK million

slide-5
SLIDE 5

5

Unlocking the magic of nature

2,404 2,140 2,050 2,052 2,038 2,014 1,000 2,000 2000 2001 2002 2003 2004 2005

Detergent enzymes - business update Detergent enzymes - business update

  • 1H 2006 sales up 1% in DKK and on

par in local currency

  • S

hort-term impact from higher ingredient costs has stabilised

  • Continued growth in sales in

emerging markets

  • FY 2006 sales expectations retained

at slightly positive, both in DKK and local currency

990 997

1H 2005 1H 2006 S ales in DKK million S ALES CAGR ’00–’05 of -3%

slide-6
SLIDE 6

6

Unlocking the magic of nature

1,144 1,237 1,350 1,441 1,515 1,720 900 1,800 2000 2001 2002 2003 2004 2005

Other technical enzymes - business update Other technical enzymes - business update

  • S

ales up 21% in DKK and 17% in local currency

  • Fuel ethanol enzymes remain the

main growth contributor

  • Continued good growth in enzymes

for starch conversion due to increased demand for sweeteners

  • Increased penetration of enzymes

for textile mills in Asia

  • FY 2006 sales growth expected to

be 15-20% in both DKK and local currency

799 966

1H 2005 1H 2006 S ales in DKK million S ALES CAGR ’00–’05 of 9%

slide-7
SLIDE 7

7

Unlocking the magic of nature

1,187 1,387 1,482 1,413 1,439 1,491 500 1,000 1,500 2000 2001 2002 2003 2004 2005

Food enzymes - business update Food enzymes - business update

  • S

ales up 5% in DKK and 2% in local currency

  • Good growth within baking from

newly implemented US

  • distribution

set up

  • Increasing demand for enzymes to

beverage alcohol and processed foods

  • Wine and juice below expectations
  • S

lower penetration in the dairy industry

  • FY 2006 sales growth expected to

be mid single-digit both in DKK and in local currency

752 791

1H 2005 1H 2006

S ales in DKK million S ales CAGR ’99-’05 of 5%

slide-8
SLIDE 8

8

Unlocking the magic of nature

Feed enzymes - business update Feed enzymes - business update

  • S

ales up 1% in DKK and down by 2% in local currency

  • Fluctuations in alliance partner’s

inventory continue to affect quarterly growth figures

  • Increased sales in all markets except

from Europe

  • FY 2006 sales growth is expected to be

mid single-digit in DKK and low single- digit in local currency

344 340

1H 2005 1H 2006

S ales in DKK million

298 418 545 608 698 748 250 500 750 2000 2001 2002 2003 2004 2005

S ales CAGR ’99-’05 of 21%

slide-9
SLIDE 9

9

Unlocking the magic of nature

Microorganisms - business update Microorganisms - business update

  • S

ales up 18% in DKK and 14% in local currency

  • Main growth driver continues to be

the institutional & household cleaning industry

  • Continued expansion outside main

US

  • market supporting geographical

diversification

  • FY 2006 sales expected to grow

above long-term expectations in both DKK and local currency

184 156

1H 2005 1H 2006

70 205 261 298 308 100 200 300 400 2001 2002 2003 2004 2005 S ales in DKK million

Growth through acquisitions ’01-’03

slide-10
SLIDE 10

10

Unlocking the magic of nature

S ales development - geographical split S ales development - geographical split

1,372 41% 681 21% 217 7% 1,012 31%

Latin America North America Asia Pacific Europe, MEA

  • 1%
  • 1%

+7% +2% +13% +9% +19% +13% +8% +5% Total

DKK LCY DKK LCY LCY = Local Currency DKK LCY DKK LCY DKK LCY

slide-11
SLIDE 11

11

Unlocking the magic of nature

R&D news R&D news

  • Confident outlook for the project pipeline;
  • 6 - 8 new product launches expected during 2006
  • Product launches in Q2:
  • Liquanase, enzyme for the detergent industry
  • Cerezyme, enzyme for the brewing industry
  • BPX-1, enzyme for the fuel ethanol industry
  • Novo BioClean, microorganism for the institutional & household cleaning

industry

slide-12
SLIDE 12

12

Unlocking the magic of nature

S trong pipeline to support sales growth S trong pipeline to support sales growth

Biopolymer and Pharma proteins Hyaluronic acid and potentially other biopolymers. Antimicrobial peptides. New technology for antibody production. Cell cultures substrates. Microorganisms Institutional & Household cleaning: Odour reduction, oil & grease degradation. Plant care: Biofungicides, growth enhancement, expand application of existing products. Waste treatment: Ammonia and nitrite control, colour removal, hydrocarbon degradation. Feed enzymes Improved phosphorus release, vegetable protein, aquaculture. Food enzymes Improved dough products, non-bread products. New concepts for brewing. Food specialties – dairy products, oils & fats. Technical enzymes Detergent: New, improved cleaning and fabric care properties, new concepts, improved dish washing products. Other technical: New technologies and improved processes for starch and fuel ethanol, Bioprocesses. New industries: Digestion disorders.

  • Approx. 85% of R&D resources
  • Approx. 5%
  • f R&D resources

Up to 10% of R&D resources

~13% of sales invested in R&D, ~800 people

slide-13
SLIDE 13

13

Unlocking the magic of nature

Income statement and cash flow Income statement and cash flow

  • 441

443 Net profit 30 605 784 Cash Flow from operations (47) (125) (184) Investments before acquisitions 25

  • 480
  • 600

(66) Free cash flow before acquisitions Acquisitions

  • (148)

(148) Tax 4 6.49 6.72 EPS (diluted) NM (8) (66) Net financials

  • 19.7

20.0 EBIT margin % 10 597 657 EBIT (11) (240) (214) Depreciation 4 837 871 EBITDA 9 1,641 1,795 Gross profit 8 3,037 3,282 Sales % change 1H 2005 1H 2006 DKK million

slide-14
SLIDE 14

14

Unlocking the magic of nature

Currency risk management Currency risk management

  • Favourable currency rates support

growth in sales and EBIT, while net financials are affected negatively, depending on hedging activities

  • Novozymes' policy is to hedge

existing net assets in foreign currency, and expected future net exposure from the company's

  • perations
  • 2006 net cash flow in US

D and JPY is hedged and included in financial

  • utlook:
  • approx. DKK 5.86/US

D

  • approx. DKK 5.57/JPY ‘00

74,30 5.15 5.95

  • Est. average for 2006*
  • 5%

5.05 5.25 5.45 J PY ’00 1%

  • 1%
  • Est. average 2006

compared with avg.

  • exch. rate 2005

74,91 6.00 S pot April 25, 2006 72,86 5.81 Spot August 7, 2006 73,25 6.00 Average 2005 CNY USD (DKK) Impact to operating profit from a 5% change in the value of (annualised): DKK 5-15 million JPY DKK 30-40 million US D

* Estimated average calculated as an average of YTD + Spot August 7th 2006

slide-15
SLIDE 15

15

Unlocking the magic of nature

Expectations for 2006 Expectations for 2006

18-19% Return on invested capital after tax DKK 850-950 million Cash flow before acquisitions 5-7% Net profit growth DKK minus ~100 million Net financials Around 19% Operating margin 7-9% Operating profit growth 7-9% S ales growth Provided that current exchange rates remain unchanged for the rest of the year, the expectations for 2006 are:

slide-16
SLIDE 16

16

Unlocking the magic of nature

Business development update Business development update

  • Overall strategy retained - including new initiatives to enhance

business opportunities

  • Increasing investments in enzymes for the fuel ethanol

industry

  • S

trategic initiative for long-term growth, launched in 2005, progresses as planned

  • Platform of ingredients for the pharmaceutical industry
slide-17
SLIDE 17

17

Unlocking the magic of nature

Base of proven biotech competencies and technologies Solutions for the bio- pharmaceutical industry

New innovative products, technologies and ingredients for the biopharmaceutical industry

Microorganisms for industrial use

  • New products
  • New applications and markets
  • New business in new industries

Enzymes for industrial use

  • New products
  • New applications and markets
  • New business in new industries
  • Broad white biotech

Novozymes strategy Novozymes strategy

Examples of potential projects under New Business Development

* Paper/pulp * Waste reduction&handling * Chemical synthesis * Biomass-to-plastic/fibre * Mineral oil * S ustainable agriculture & animal husbandry

  • enhanced extraction
  • refining

Explore technology potential in * Antimicrobial peptides * Expression of monoclonal antibodies * Media for cell cultures * Biopolymers

– Hyaluronic acid

* Manufacturing of Biophamaceuticals

slide-18
SLIDE 18

18

Unlocking the magic of nature

Novozymes’ Capital Markets Day Novozymes’ Capital Markets Day

NOVEMBER 28, 2006 in Denmark

Part of the agenda:

  • Tour at the R&D facilities, Bagsværd
  • Presentation of long-term activities within solutions for the

biopharmaceutical industry and the 2005 strategic initiative

  • Presentation of evolution in R&D
slide-19
SLIDE 19

19

Unlocking the magic of nature

Key messages in 1H 2006 Key messages in 1H 2006

  • 1H 2006 in line with expectations
  • Healthy development in sales
  • EBIT growth from continuous productivity gains and solid free cash flow

continued

  • Four products launched in 2Q 2006
  • Joint development agreement with CRAC within biomass-to-fuel ethanol
  • Acquisition of UK-based Delta Biotechnology Ltd supports the platform of

ingredients for the biopharmaceutical industry

  • Overall strategy retained - development activities initiated within certain

areas

  • Execution of share capital reduction of 6.6% or DKK 46 million (nominal)
  • Free cash flow 2006 expectations up DKK 100 million
  • time to take questions
slide-20
SLIDE 20

20

Unlocking the magic of nature

Forward-looking statements Forward-looking statements

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 introduction of competing products within Novozymes’ core areas.