Novozymes Welcome! 11/18/2010
2 12/21/2010 Natures efficient technology
12/21/2010 3 Rethinking Tomorrow Unique technology platform gene technology microbial techniques fermentation technology
4 21/12/2010 We reduce CO 2 emissions together with our customers 28 Million Tons CO2 reduction in 2009 CO 2 COSTS PRODUCING 1KG ENZYME: PLUS : 1-10 KG CO 2 SAVINGS USING 1 KG ENZYME IN THE MANUFACTURING OF CONSUMER PRODUCTS : UP TO 1,300 KG 3,800 KG 3,400 KG CEREAL FOOD 30 KG 40 KG 100 KG 150 KG 150 KG 200 KG 600 KG BIOCATALYSIS OILS & FATS PAPER ANIMAL FEED LEATHER TEXTILES BIOETHANOL DETERGENT FOOD
5 24/11/2008 World leader in bioinnovation ENZYMES BIOBUSINESS Business area Main markets Detergent Starch, textile, fuel ethanol Baking, brewing, food specialities Animal feed Microorganisms within cleaning, plants, waste Biopharmaceutical ingredients Market share 55-60% 50-55% 30-35% ~40% 30-40% Not disclosed % of total NZ sales (2007) 30% 30% 23% 10% 4% 3%
6 Novozymes vision We imagine a future where our biological solutions create the necessary balance between better business, cleaner environment and better lives.
7 Novozymes in brief World leader in Industrial Enzymes & Microorganisms and Market leader in all main industries More than 700 products used in 130 countries in >40 different industries More than 5,000 employees world-wide Sales USD ~1.7bn (FY2009) Enzymes account for >90% of turnover Main production in USA, China and Denmark Enzymes for industrial use - market size approx.* ~USD 2.9 billion DSM 6% Others 26% Danisco 21% Novozymes 47% Feed 9% Novozymes business composition Sales 2008 ~ USD 1.5bn Microorg. 5% BPI 3% Detergent 31% Food 22% Technical 30% Source: Novozymes 2008 estimates
8 2010 Financial Outlook Key financials 28.10.10 Outlook 12.08.10 Outlook 2009 Realized Sales, DKKm - - 8,448 Sales growth, DKK 12 13% 10 12% 4% Sales growth, LCY 9 10% 7 9% 2% Sales growth, organic 9 10% 7 9% - EBIT, DKKm - - 1,688 EBIT growth 24 25% 20 22% 12% EBIT margin ~ 22% 21 22% 20.0% Net profit - - 1,194 Net profit growth 28 29% 22 24% 12% Net investments, DKKm ~ 1,250 1,150 1,250 978 Free cash flow, DKKm ~ 1,000 800 900 839 ROIC ~ 22% 21 22% 20.3%
9 Continuing to Innovate Novozymes Research & Development Total of 1,130 employees working in R&D, more than 40% outside Denmark. During 2008 we expanded our research staff by around 100 people. Major R&D sites in Denmark, the US (Davis CA and Franklinton NC) as well as in China, Japan and India Aggressive pursuit of new biotechnology: ~ 14 % of turn over spent on R&D 6-8 new products launched every year Very comprehensive technology platform: More than 6,000 granted or pending patents 40-year commitment to innovation
Global Presence Sales Offices Production Research 21/12/2010 NOVOZYMES PRESENTATION 10
11 Novozymes in the US * Saskatoon, Canada *Blair, NE (under construction) * Ames, IA * Boston, MA * New York, NY * Davis, CA * Salem, VA * Franklinton, NC Franklinton, North Carolina Salem, Virginia Davis, California New York, New York Ames, Iowa Boston, Massachusetts Saskatoon, Canada
NC & Novozymes: A great partnership
1977 We started in a soybean field 15 MUSD 45 Employees Raleigh 150,000
1982 15 MUSD Expansion 1993 100 MUSD Expansion 175 Employees Raleigh 214,410
1995 Relocate Sales, Marketing, Technical Service. R&D Unit established >200 Employees Raleigh 214,410
2008 R&D Expansion >450 Employees Raleigh 405,000
Site Franklinton Regional Headquarters
18 12/21/2010 Change the world together with our customers through insight and solutions World Industry Customer How to measure success: Make it great to be a Zymer >75 in employee score for satisfaction and motivation by 2010 Deliver radical innovation to our customers and their industries >10% in organic sales growth p.a., excluding sales of enzymes for conversion of biomass and excluding acquisitions Drive the world toward sustainability >75 million tons reduction in CO2 emissions enabled by customers use of our solutions by 2015
Site Franklinton North American Headquarters Production (Pilot Plant, Fermentation, Recovery, Granulation) Sales Largest multi-purpose enzyme manufacturing plant in the United States representing all business areas: Marketing Technical Services R&D Quality Control Finance Purchasing Regulatory Information Technology Maintenance/Engineering Human Resources
21 12/21/2010 Change the world together with our customers through insight and solutions World Industry Customer Make it great to be a Zymer Develop great leaders Deepen our relationshipbased culture Be a company people want to work for Simplify how we work together Be smart and efficient as we grow Deliver radical innovation to customers Build relations and partnerships for growth Develop new enzyme growth engines Build BioBusiness Win in biomass Drive the world toward sustainability Become a voice on the world stage Sustainable solutions drive new business Build sustainability capabilities
22 12/21/2010 Sustainability Not just a drop in the ocean NZ recognized as a company that goes above and beyond legal compliance in our financial, social and environmental activities. We conduct our business in a responsible and transparent manner. We engage in innovation partnerships and open dialogue with customers, NGOs, governments and our surrounding society to find solutions to some of the world s biggest problems like climate change, energy deficiency and human rights violations
23 12/21/2010 Product launches in 2008 and 2009 2008 Celluclean, a detergent enzyme that provides strong whiteness and anti-graying effect, thus enhancing the effect from bleach. Attenuzyme Flex, an enzyme for shortened process time and better control in the production of light and low-carb beers. CellPrime rtransferrin AF, a recombinant animal-free cell culture supplement, enhancing the growth and productivity of cells during the manufacture of biopharmaceutical products through improved iron transport. RONOZYME ProAct, a feed enzyme optimizing protein utilization, improving nutritional value, and enhancing animal performance, leading to cost savings. Lactose Oxidase, a food enzyme allowing the dairy industry to add value to the whey stream. Whey is a by-product of cheesemaking. Pectinex Ultra Mash, an enzyme applied to improve the yields in apple juice production during mashing, offering increased yield and smoother processing in comparison to existing enzyme solutions. Novozym 12001, a food enzyme that allows the use of soya protein in a broad range of food applications, making them healthier and improving taste. FiberCare D, an enzyme for use in the pulp and paper industry. The enzyme improves drainage performance in paper mills producing paper and cardboard from recycled paper and cardboard. Benefits include improved process time. Cellic CTec, a unique cellulase complex for cost-effective hydrolysis for production of bioethanol from cellulosic feedstock Cellic HTec, a hemicellulase complex that provides a hydrolysis boost option over Cellic CTec, i.e., improves C5 sugar yields 2009 Cellic CTec, a unique cellulase complex for cost-effective hydrolysis for production of bioethanol from cellulosic feedstock. High conversion efficiency on acid and neutral pretreated feedstocks. CellPrime ralbumin AF-G, a recombinant animal-free cell culture supplement replacing human- or bovine-derived serum albumin in industrial-scale mammalian cell culture applications. This is the third product in the CellPrime range offered through the alliance with Millipore and designed for large-scale industrial bioprocessing applications.
24 24/11/2008 What are enzymes? Naturally occurring proteins which are found in every living organism: man, animals, plants, or microorganisms such as bacteria and fungi Nature s tools - enzymes cut and paste substances and speed up all vital biological processes The enzymes in the stomach, for instance, ensure that food is cut into tiny pieces that can be digested by the body Enzymes make better use of raw materials and create more from less Novozymes enzymes help make industry more efficient and less polluting
25 24/11/2008 Do our laundry Novozymes first enzyme was a protease used in hospitals to remove blood stains from linen Today, enzymes enable laundry to be washed at much lower temperatures by cutting up stains and grease. Enzymes are effective down to 15 C Lowering washing temperature from 40 to 30 C reduces electricity consumption by 30% - while keeping clothes clean Enzymes replace oil-based chemicals previously used in detergents
26 24/11/2008 Improve animal feed Pigs and poultry stomachs not capable of breaking down plant cell walls. Nutrients, especially phosphates, pass right through the animals without being utilized Phosphates in animal dung pollute rivers and lakes and cause algae growth Farmers have to add expensive inorganic phosphates to animal feed By adding enzymes to the feed, almost all the nutrients are released This saves costs for the farmers and reduces pollution
27 24/11/2008 Food production Enzymes can replace artificial colorings, flavorings and preservatives Cheese, beer and wine cannot be made without enzymes Creates low-carb or light beer Makes sugar sweeter: glucose to fructose Removes harmful trans-fats from cooking oil Keeps bread fresher for longer less waste Produces more beer from less malt
28 12/21/2010 Appendix
Our sustainability approach We imagine a future where our biological solutions create the necessary balance between better business, cleaner environment, and better lives. Novozymes in Denmark will be CO 2 neutral for electricity by 2012 Sustainability is how we do business Integrated reporting Sustainability Values Sustainability is fully integrated in our business processes bonus scheme + Stock option program Policies, standards- Strategies
30 Recognized as a leader in sustainability Novozymes has been recognized on several occasions for its efforts in corporate responsibility: Novozymes has a sector leader position in the Dow Jones Sustainability Group Index in the biotech sector for 7 consecutive years Novozymes is member of the FTSE4Good Global and Europe indexes SustainableBusiness.com recognized Novozymes among the top 20 companies on their 2007 SB20 list - The World's Top Sustainable Business Stocks Novozymes qualified to be considered best in class by Storebrand Investments SRI Selected on the Global 100 list by Innovest Strategic Value Advisors and Corporate Knights Ranked as No 8 (Pharmaceuticals & Biotechnology) in the Carbon Disclosure Project, Nordic Report 2007, for Carbon- Intensive Sector Companies
Our workplace 12/21/2010
32 12/21/2010 How we work together At Novoyzmes, we believe strong players need strong teams. From the word "Go," we ll trust and support each other to tackle big challenges. We are a team of sparky and dedicated colleagues who challenge each other to perform our best and care for each other along the way. Novozymes hires the best, so from the first day newcomers should expect to be given a lot of responsibility and to make a positive contribution.
33 12/21/2010 Our mindset Every day you work for Novozymes you get a golden opportunity to achieve something extraordinary. On a daily basis we find inspiration by challenging conventions. This leads to exhilarating ideas that echo around the world. At Novozymes, we make a big difference because we do things differently.
34 12/21/2010 What motivates us At Novozymes we turn the challenges of today into opportunities to create a better future. Always focused on what s next, we network with our partners to develop the bioinnovations of tomorrow. If you dream of shaping a brighter future, there s no better place to do it than at Novozymes. We expect employees to be aware of what s going on in the world, who s shaping public opinion, and to engage in the dialog.
35 12/21/2010 Leadership is for everyone Dedicated to reinforcing our position as the market leader, we are passionate about encouraging initiative and thought leadership. As a result, everyone at Novozymes is expected to create their own opportunities and develop their own path. Ultimately, we ll help and support them realize their full potential.
The regions 12/21/2010
37 12/21/2010 Novozymes in Europe Market presence: Europe (EMEA Europe, Middle East & Africa) is the largest regional market for Novozymes EMEA sales were 38% of total 2008 revenue Main markets are: feed, cereal food, detergents, starch, BPI Industries in focus: Bioethanol, Detergents Employees: Number of employees: 2,791 in EMEA (year-end 2008 About 54% of Novozymes total employee cost is in EMEA
38 12/21/2010 Novozymes in Europe Locations: Bagsvaerd (Head office) Kalundborg (Enzyme production since 1969) Fuglebakken in Copenhagen (Enzyme production since 1941) Lund, Sweden (Biopharmaceutical products) Nottingham, UK (Biopharmaceutical production and Biopharmaceutical headquarters) Switzerland (Marketing) Paris (Regional headquarters, EEMEA) Vienna (Regional headquarters, CWE) About 60% of Novozymes total assets are in Europe Key partners: Unilever, Proctor & Gamble, Chr. Hansen
39 12/21/2010 Novozymes in North America Market presence: The US is the largest national market for Novozymes North American sales were 27% of total 2008 revenue; Canada contributed only a minor part Main markets are: bioethanol, detergents, baking, starch, microorganisms, BPI Industry in focus: Bioethanol Market share in bioethanol: ~60%; other market shares are not quantified for the US
40 12/21/2010 Novozymes in North America Employees: Number of employees: 750 in North America About 19% of Novozymes total employee cost is in North America Locations: NYC (Patent office) Franklinton, NC (Production and Administration; both since 1979) Davis, CA (R&D) Boston, MA (BPI marketing and sales) Salem, VA Saskatoon, Canada Blair, Nebraska (Production, construction began in 2009) About 17% of Novozymes total assets are in North America Key partners: POET, ICM
41 12/21/2010 Novozymes in Latin America Market presence: Brazil is a major producer of sugarcane and provides potential as a locally grown source for producing second-generation bioethanol Latin American sales were 7% of total 2008 revenue Main markets are: detergents, feed enzymes Industry in focus: Biofuel Brazil is the major producer and user of flex-fuel cars, which can use ethanol not only as an effective fuel extender to make gasoline supplies last longer, but also as an octane booster
42 12/21/2010 Novozymes in Latin America Employees: Number of employees: 180 in Brazil and 13 in Mexico ~3% of Novozymes total employee cost is in Latin America Locations: Brazil, NZBR (Production, Administration, Sales, and Customer Solutions since 1989; R&D since 2008) Mexico, NZMX (Sales office and Re-filling) Key partners: CTC (Centro de Tecnologia Canavieira), Petrobras, and UFPR (Federal University of Paraná)
43 12/21/2010 Novozymes in China Market presence: Novozymes is one of the largest Danish businesses in China China is the second largest national market for Novozymes, after the US Asia Pacific sales were 18% of total 2008 revenue Main markets are: textiles, starch, detergents, brewing Industries in focus: Detergents, Textiles, Bioethanol Competitors: Danisco/Genencor and local enzyme producers
44 12/21/2010 Novozymes in China Employees: Number of employees: 1,300 in Asia Pacific About 26% of Novozymes total employee cost is in Asia Pacific Locations: Beijing (Main site, R&D, Finance and Sales; all since 1991) Tianjin (MPP, HA) Suzhou Hongda (largest enzyme fermentation facility in the world) Shenyang (Biologicals) Key partners: COFCO, Sinopec
Business areas 12/21/2010
46 12/21/2010 Enzymes Business World leader in industrial enzymes Enzymes are the tools of nature. They cut and paste all kinds of biological materials and kick-start all biological processes.
47 21/12/2010 Enzymes create more from less Enzyme technology is green technology Enzymes save energy Enzymes save chemicals Enzymes save raw materials Enzymes save limited resources and reduce water pollution
48 21/12/2010 Enzyme Business (EB) operates in four main areas Detergent enzymes Technical enzymes Food enzymes Feed enzymes
49 12/21/2010 Detergent enzymes Detergent enzymes are used in household and industrial laundry and dishwashing detergents. For example in the process of washing clothes, certain enzymes break down water-insoluable stains into water-soluble molecules that can be rinsed away by the wash water.
50 12/21/2010 Technical enzymes Technical enzymes are used, among other things, in the transformation of starch into different kinds of sugars. This functionality is used in the starch and fuel industries. However, technical enzymes are also used for many other applications in, for example, the leather, textile, and forest product industries.
51 12/21/2010 Food enzymes Food enzymes for the food industry enhance quality and/or efficiency in the manufacture of food products such as bread, wine, juice, beer, noodles, pasta, and alcohol.
52 12/21/2010 Feed enzymes Feed enzymes when added to animal feed increases the nutritional value of the feed. This leads to faster growth of the animals and better utilization of the feed, and improves the environment as less phosphorus is released via manure.
53 12/21/2010 BioBusiness We use fermentation technology to produce proteins other than industrial enzymes that are then, for example, used in the pharmaceutical and cosmetic industries and within agriculture.
54 21/12/2010 BioBusiness operatess in two main areas Microorganisms Biopharmaceutical ingredients
55 12/21/2010 Microorganisms Microorganisms are a diverse group of microscopic organisms such as bacteria and fungi. Our microorganisms are used in industrial and household applications (such as odor control and cleaning of drain lines); for reduction of harmful compounds in industrial and municipal wastewater; to improve yields and crop health in aquaculture; and to improve yield in agriculture while minimizing the environmental footprint.
56 12/21/2010 Biopharmaceutical ingredients Biopharma produces proteins and other biological substances used in the pharmaceutical industry. Our products are produced recombinantly from nonanimal sources, eliminating any contamination risk.
57 12/21/2010 Developing BioBusiness We see many opportunities to use our existing technologies to cultivate BioBusiness across a broader range of applications. Conversion of Renewable sources to chemicals (CoRe) is one of our business development platforms. Within CoRe we have an agreement with Cargill to develop technology for production of acrylic acid from renewable raw materials. Specifically, fermentation of sugar into 3- hydroxypropionic acid (3HPA) using an engineered microorganism. 3HPA can subsequently be transformed into a range of valuable chemical derivatives, including acrylic acid.
21/12/2010 58 Bioethanol
Novozymes and biofuel Leader in enzymes for first- and second-generation biofuels Current first-generation enzyme business (starch-to-ethanol) mainly a US affair ~17% of Novozymes total revenue in 2008 Largest supplier of enzymes to the fuel ethanol industry Three out of four new starch-based fuel ethanol plants have started using enzymes from Novozymes 150 people working on cellulosic ethanol Novozymes will be the first company to supply commercial quantities of enzymes to make second generation of bioethanol by 2010
Stabilizing climate change: a 42 Gt reduction of CO2 emissions is needed compared to 2005 levels Gt CO 2 reduction Total reduction = 42 Gt Emission peak in 2012 at 30 Gt 2010: Novozymes ready with enzymes for commercial-scale production of 2G Transport, 30% Buildings, 20% Industry, 14% Power, 36% 2022: Biofuel will make up 25% of US transportation fuel use about half will be 2G (cellulosic ethanol) Today: 1 2% share of global transport fuel delivering GHG emission reductions up to 67% for US-produced and up to 90% for Brazilian bioethanol Energy efficiency Electric and plug-in vehicles Hydrogen fuel cell vehicles Biofuels The biofuel industry is ahead of the curve and delivers significant CO 2 reductions already today Sources: IEA, OECD, Argonne National Laboratory, US Energy Security and Independence Act, Liska
Bioenthanol addresses a number of issues on the global agenda Improved energy security Diversify energy/fuel supply Reduce exposure to oil price Roll-out sugar-base technology Establish supply-chains Step towards a biobased society Bioethanol GHG reductions in transport Transport: 2 nd largest and fastest growing source of CO 2 emissions Bioethanol: Today s only option for large scale replacement of gasoline Economic development Stimulate growth in agriculture and industry Improve trade balance Sustainability Sustainability criteria and certification schemes will promote sustainable biofuels Biofuel has evoked an attention to sustainability that will have positive spill-over effects on agriculture in general
Biofuel - key to reducing global oil dependency Many countries are highly dependent on imported oil: US (2008): +60% China (2006): 47% EU (2005): 82% Half the world s poorest countries import all their oil: and a $10/barrel oil price increase cuts their GDP by 1.6% Oil resources are running dry price volatility In nine out of 12 scenarios conventional oil production peaks before 2050 Shell expects a supply gap by 2015 Sandia/GM study: Capital needed for replacing 30% of gasoline in the US with 2G - same as for equivalent amount of oil. 2007: biofuel production replaced 1 million barrels of crude oil every day Enough biomass availability exists in the US and EU to meet at least 25% of their needs for transport fuel in 2030 without significant increase in acreage used for biofuel feedstocks Sources: US DofE, University of Nebraska, IEA, EU Commission (Refuel project), EUROSTAT
Green economy and green collar jobs: Impact of the RFS towards 2022 2008 2012-2022 State economy: Net benefit $7 billion Return on investment $1 = $2.5 GDP $66 billion Reduced oil import: 13 BnG (5% of US oil import) worth $32 billion Jobs: 500.000 supported State economy: Impact 2022: $150 billion GDP $1.23 trillion Green collar job creation 2012: 100.000 jobs 2022: 800.000 jobs
Developing countries economic boost Biofuel production can help drive rural economies in developing countries: New markets for agricultural products enable adoption of better and more efficient farming Direct and indirect job-creation in farming and biofuel production Reduced dependency on imported energy Corn yield (kg/ha) 10000 7500 5000 2500 0 06 world average '61 '66 '71 '76 '81 '86 '91 '96 '01 '06 US W Europe China E Europe Brazil Africa
2G will significantly increase CO 2 reduction compared to 1G technologies g CO 2 equiv. per MJ 80 70 60 50 40 30 20 Gasoline 1G (corn) 2G (corn cobs) 30% saving 50% saving 70% saving 90% saving Reduction in GHG emission from substituting gasoline 10 0 <2004 old plants CHP (fossil) CHP (biomass) Cellulosic. Technological maturity
CO2 CO2 savings savings from from the the RFS RFS 2009-2022 bioethanol will displace the equivalent of 500 BnG of oil and in 2022 make up >20% of US gasoline for road transportation
21/12/2010 67 The opportunities of biofuel Bioethanol: Making more with less Bioethanol has an increasingly better energy balance than gasoline Fossil energy units used pr. energy unit of fuel produced Oil 1G Bioethanol Now 1 energy unit fuel 2G Bioethanol Time It takes <1,2 MJ to produce 1 MJ of gasoline but >0,8 MJ to produce 1 MJ of bioethanol and only 0,14 unit crude oil Gasoline s energy balance worsen as less accessible petroleum sources gets exploited Bioethanol s energy balance improve e.g. as enzymes enable lower temperature processes and the production of cellulosic bioethanol Bioethanol continues to produce more with less
USD/EUR exchange rate from xe.com (25 th march) Total production costs for 2G ethanol is approaching 1G rapidly Novozymes estimate that by 2015, 2G could work without subsidies in the US with an oil price of USD $80-120/gallon Total production costs for 2G ethanol will be comparable to 1G already by 2010 The costs have been halved over the last 3 years This means that commercializati on of 2G is just around the corner
NZ strongly supports that biofuels should be produced environmentally sustainably Novozymes position is clear: All agricultural products, including biofuels, must be produced in a sustainable way Policy-makers, the agricultural sector, and the biofuel industry have a shared and global responsibility to ensure: Incentives to adopt the most sustainable and most GHGreducing biofuels Adoption of good agricultural practices leading to increased and sustainable food and fuel production Certification of sustainable biofuels could pave the way for increased sustainability of the entire agricultural sector Novozymes participates actively in the development of sustainability criteria and certification schemes for biofuel* * For example by participating in the Roundtable for Sustainable Biofuels and the Global Bioenergy Partnership
Rethink tomorrow and help create a more secure, sustainable biobased society A more sustainable and less oil-dependent energy system is needed For the transport sector biofuel is the only pathway currently available Enzyme technology is constantly developing making bioethanol even more sustainable and climate friendly Industrial biotechnology enables not only bioethanol but sustainable solutions across a range of industries
Key facts 12/21/2010
72 12/21/2010 Research & Development About14% of our revenue is spent on research and development. More than 6,000 patents in place. Total of 1,130 employees working in R&D, more than 40% outside Denmark. During 2008 we expanded our research staff by around 100 people. Our R&D projects are carried out in partnerships or by us alone.
73 21/12/2010 Employees Sales, Marketing and Corporate staff 35% More than 5,000 employees worldwide Around 50% working in Denmark Research and Developement 15% Production 50%
74 21/12/2010 Global presence Sales Offices Production Research
75 21/12/2010 Enzyme Business Development, production, and distribution of enzymes are a major part of our business Enzymes are readily biodegradable proteins that are found in all living organisms and catalyse biochemical reactions Enzyme technology can typically replace conventional chemicals, improving resource efficiency and generally reducing environmental impact Enzymes Business accounts for more than 90% of sales Enzymes Business is divided into four areas: Detergent enzymes (31%), Technical enzymes (30%), Food enzymes (22%) and Feed enzymes (9%)
76 21/12/2010 BioBusiness We use fermentation technology to produce proteins other than enzymes that are then, for example, used in the pharmaceutical and cosmetic industries and within agriculture We also sell microorganisms for various applications in a range of industries. We see a lot of opportunities to use our existing technologies to cultivate BioBusiness across a broader range of applications Bio Business is divided into two areas: Microorganisms (5%) and Biopharmaceutical ingredients (3%)
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