CONFERENCE CALL Q1 2015 April 23, 2015 Forward-Looking Statements - - PowerPoint PPT Presentation

CONFERENCE CALL

Q1 2015 April 23, 2015

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Forward-Looking Statements

This presentation and its related comments contain forward-looking statements, including statements about future events, future financial performance, plans, strategies and expectations. Forward-looking statements are associated with words such as, but not limited to, "believe," "anticipate," "expect," "estimate," "intend," "plan," "project," "could," "may," "might" and other words of similar meaning. Forward-looking statements are by their very nature associated with risks and uncertainties that may cause actual results to differ materially from expectations, both positively and negatively. The risks and uncertainties may, among other things, include unexpected developments in i) the ability to develop and market new products; ii) the demand for Novozymes’ products, market-driven price decreases, industry consolidation, and launches of competing products or disruptive technologies in Novozymes’ core areas; iii) the ability to protect and enforce the company’s intellectual property rights; iv) significant litigation or breaches of contract; v) the materialization of the company’s growth platforms, notably the opportunity for marketing biomass conversion technologies or the development of microbial solutions for broad-acre crops; vi) the political conditions, such as acceptance of enzymes produced by genetically modified organisms; vii) the global economic and capital market conditions, including, but not limited to, currency exchange rates (USD/DKK and EUR/DKK in particular, but not exclusively), interest rates and inflation; viii) significant price decreases on input and materials that compete with Novozymes’ biological solutions. The company undertakes no obligation to update any forward-looking statements as a result of future developments or new information.

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Q1 2015 Summary

709 923 979 24.9% 30.4% 27.4%

10% 15% 20% 25% 30% 35%

Q1 2013 Q1 2014 Q1 2015

500 1,000 1,500

EBIT and EBIT margin

Q1 2013 – Q1 2015

2,845 3,033 3,579 5% 11% 8% 0% 2% 4% 6% 8% 10% 12% Q1 2013 Q1 2014 Q1 2015 1,000 2,000 3,000 4,000

Sales and organic growth

Q1 2013 – Q1 2015

+6% DKKm DKKm

Q1 2015 – overall in line with expectations

• 8% organic sales growth, in line with expectations.

Sales up 18% in DKK compared with Q1 2014

• Strong growth in Agriculture & Feed – driven both

by performance and positive timing impact. Good contribution from Food & Beverages

• Uncertainty and challenging market environment in

Household Care and Bioenergy

• Currency-driven EBIT margin expansion of ~1 %-

point adjusted for The BioAg Alliance in Q1 2014

FY 2015 outlook adjusted for currencies only

• Organic sales growth: 7-9%
• DKK sales growth: 16-18%, up from 13-15%
• EBIT margin: ~27%, adjusted from 26-27%
• Net profit growth: 11-13%, up from 10-12%
• ROIC: 25-26%

Capital Markets Days coming up May 5-6

+30%

Household Care: growth fluctuates

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Volatility in Household Care

• 10%

0% 10% 20% 30%

Quarterly organic growth rates, 2008-2015

Quarterly growth rates Annual growth rates

• Quarterly growth rates vary between -2% and

+19%

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

Current trading environment 1. Dynamic North American market with trading-down and strong competition among detergent producers creates challenging market and focus on cost reduction of formulations 2. Certain emerging markets softer too 3. Continued strong interest in other parts

• f the business for improving wash

performance and optimizing formulations using more enzymes 4. Organic sales growth in 2015 expected

• n level with 2014 or slightly below

Sales & Markets

• Q1 2015 sales: DKK +18%, organic +8%

187 455 514 797 1,080 222 649 660 921 1,127

Technical & Pharma Agriculture & Feed Bioenergy Food & Beverages Household Care

Sales by industry, DKKm

Q1 2015 Q1 2014

• Household Care: Strong comparison in Q1 2014. Soft

Latin America sales. Dynamic consumer market tempers growth in North America

+28%/+8% +16%/+5% +4%/-2% DKK growth/org. growth +19%/+4% +43%/+40%

• Food & Beverages: Good performance across
• markets. Baking and healthy concepts the most

significant contributors to growth as starch stabilizes

• Bioenergy: Continued solid growth supported by

~5% growth in U.S ethanol production. Low ethanol margins make market more challenging

• Agriculture & Feed: Strong performance in both

BioAg and animal feed. Positive timing impact supports quarterly growth figure

• Technical & Pharma: Sales of albumin and pharma

enzymes were the main growth drivers along with wastewater treatment

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Q1 2015 Financial Performance & Outlook

Satisfactory financial performance

• Gross margin on par with Q1 2014
• Disregarding the net one-time impact from The BioAg

Alliance, EBIT grew by ~20%, driven by underlying performance and currencies

• Net financial costs increased – impacted by currency

hedging

• Net investments & cash flow generation on track

2015 outlook adjusted for currencies only Returns to shareholders

• Dividend of DKK 3.00 per share paid out
• Stock buyback program of up to DKK 2 billion in

2015 on track. About 20% concluded

• 6.7 million treasury shares cancelled on March 27;

New total share count = 313 million shares

Capital Markets Days coming up May 5-6

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Key financials Realized Q1 2015 2015 Outlook

• Apr. 23

2015 Outlook

• Jan. 20

Sales growth, org. +8% 7-9% 7-9% Sales growth, DKK +18% 16-18% 13-15% EBIT growth +6% 15-17% 12-14% EBIT margin 27.4% ~27% 26-27% Net profit growth 2% 11-13% 10-12% Net investments excl. acq., DKKm 152 ~1,000 ~1,000 Free cash flow before acq., DKKm 610 2,500- 2,700 2,500- 2,700 ROIC incl. goodwill 26.6% 25-26% 25-26% NIBD/EBITDA 0.0 N/A N/A