25/ 1/ 2008 Financial results FY 2007 Conference call
2007 highlights � Very satisfactory sales growth Key financials 4 Q 2 0 0 7 2 0 0 7 exceeded expectations Sales growth, LCY 15% 14% � EBIT growth, despite high raw Sales growth, DKK 9% 9% material and energy prices and unfavorable currency development EBIT growth (1)% 11% � Continued focus on growth in 2007 with acquisitions, new collaborations and EBIT growth, excl. (1)% 5% increasing R&D expenses one-off items � Dividend proposed at DKK 5.00 per share, + 11% compared to 2006 � Solid organic sales growth and expected unfavorable currency included in financial guidance for 2008 � Increased long-term growth expectations to 8-10% and decision to build enzyme production facility in the USA 2
2007 sales overview • Sales up 14% LCY and 9% DKK • 12% LCY growth excl. acquisition effect • Detergent and fuel enzymes main 2,263 growth drivers 2,239 2,040 1,977 • 2008 sales expectation 11-14% LCY and 8-11% 1,699 1,603 DKK • Long-term sales growth expectation increased to 8-10% per year 700 705 134 348 308 224 Detergent Technical Food Feed Microorganisms BPI 2006 2007 3
Detergent enzymes – business update � 2007 sales up 12% in LCY and 10% in DKK � Higher enzyme dosage and market share gain main growth drivers in Europe supported by product introductions � Emerging markets remain solid growth factor from higher penetration � 2008 sales growth expected at ~ 5% LCY and ~ 4% DKK � Long-term growth expectation increased to 3-5% p.a. Sales CAGR 2003-2007 at 2% in DKK and 3% in LCY 2,239 2,052 2,040 2,038 2,014 5 7 2 5 7 3 5 5 5 5 3 9 1Q07 2Q07 3Q07 4Q07 2003 2004 2005 2006 2007 4
Technical enzymes – business update � 2007 sales up 22% in LCY and 14% in DKK � Very satisfactory enzyme sales to ethanol production, reaching DKK 1bn � Sales of enzymes to the starch industry remained solid during 2007 � Textile enzyme sales challenged by adverse fashion trends � 2008 sales growth expected at 25-30% LCY and 20-25% DKK � Long-term growth expectation increased to 15-18% p.a. Sales CAGR 2003-2007 at 13% in DKK and 16% in LCY 2,263 1,977 1,645 603 1,461 581 1,411 542 537 1Q07 2Q07 3Q07 4Q07 2003 2004 2005 2006 2007 5
Food enzymes – business update � 2007 sales up 9% in LCY and 6% in DKK � Growth within sales of enzymes to the baking industry from continued European and Asian penetration � Strong growth within brewing enzymes for quality and yield improvement � Declining sales of enzymes for beverage alcohol during 2007 � 2008 sales growth expected at 5-10% LCY and 2-7% DKK � Long-term growth expectation now at ~ 10% p.a. Sales CAGR 2003-2007 at 5% in DKK and 6% in LCY 1,699 1,603 1,491 1,439 1,413 434 435 428 402 1Q07 2Q07 3Q07 4Q07 2003 2004 2005 2006 2007 6
Feed enzymes – business update � 2007 sales up 5% in LCY and up 1% in DKK � Low volume growth and price pressure reduced growth of phytase products � Good growth within sale of non-phytase products during 2007 � 2008 sales growth expected to be flat in DKK and LCY � Long-term growth expectation maintained at 5-10% p.a. Sales CAGR 2003-2007 at 4% in DKK and 6% in LCY 748 698 700 705 608 189 179 170 167 1Q07 2Q07 3Q07 4Q07 2003 2004 2005 2006 2007 7
Healthy status and outlook for industrial enzymes • Increased global market share for industrial enzymes in 2007 • Increased long-term sales growth expectation to the detergent and technical enzymes areas Enzymes for industrial use. • Strong position in enzymes for Market size: DKK ~ 15bn (USD 2.6bn) fuel ethanol in the USA • Decision to build enzyme Danisco production facility in the USA 21% Others 24% Turnover by region 2007 Europe, Latin DSM Middle America Asia Pacific 5% East and 7% 20% Africa 41% BASF Novozymes 3% 47% North America 32% 8 Source: Novozymes 2007 estimates
Microorganisms – business update � 2007 sales down 5% in LCY and 11% in DKK � Discontinued product line and low market growth within institutional and household cleaning impacted sales negatively during 2007 � Growth in sales of microorganisms for plant care and wastewater treatment � 2008 sales growth expected at 20-30% LCY and 10-20% DKK � Excluding the acquisition effect from Philom Bios, moderate organic growth in LCY expected � Long-term growth expectation maintained at ~ 10% p.a. Sales CAGR 2003-2007 at 4% in DKK and 9% in LCY 348 308 308 298 261 9 1 8 4 7 1 6 2 1Q07 2Q07 3Q07 4Q07 2003 2004 2005 2006 2007 9
Biopharmaceutical ingredients – business update � 2007 sales DKK 224m compared with DKK 134m in 2006 � Strong impact from acquired activities in 2006 � High variation in sales pattern across periods � Lower contract volumes in 4Q07 as expected � 2008 sales expected to be reduced by ~ 15% LCY and ~ 20% DKK � Long-term growth expectation maintained at 10-15% p.a. Sales in DKKm 224 134 120 75 54 51 30 30 23 1Q07 2Q07 3Q07 4Q07 2003 2004 2005 2006 2007 10
R&D update � Record number of product introductions in 2007, 10 in total � One product launched in 4Q07; � Sucrozyme, for the production of low-calorie sweeteners � New product sales around 25% of total sales in 2007 � Increase in R&D expenses, as a percentage of total sales from 12.9% -> 13.4% , in line with expectations � Several collaboration agreements initiated in 2007 � Project pipeline; � 6-8 product launches expected in 2008 11
Profit & Loss key figures � Gross margin at 53.1% , affected negatively by currencies, raw material costs and lower margin on acquired inventory � EBIT up 11% , supported by high level of productivity gains. Excluding damage payment, growth was 5% � Adjusted for impact from acquisitions, damage payment and currency, EBIT-margin was on par with 2006 � Net profit up 14% 16.5 1,400 22.0 1,000 21.5 16.0 900 1,200 21.0 800 14.0 14.1 12.8 20.5 1,000 700 20.0 10.9 19.7 12.0 10.4 19.5 800 600 19.9 9.0 19.2 1.042 10.0 19.0 500 911 861 1,481 600 1,206 1,340 18.5 775 18.2 400 8.0 998 746 1,089 964 656 18.0 300 400 17.3 6.0 17.5 200 17.1 17.0 200 4.0 100 16.5 0 2.0 0 16.0 2002 2003 2004 2005 2006 2007 2002 2003 2004 2005 2006 2007 Net profit EPS (diluted) EBIT Ebit M argin 12
Cash flow and CAPEX � Operating cash flow up 12% from increased earnings and improved inventory levels � CAPEX at DKK 735m from increased activity � Free cash flow before acquisitions 13% of sales � DKK 500m worth of shares bought back over the year � ROIC increased to 21.7% Capex (DKKm) / capex to sales (% ) 10 7 1,080 1,058 7 991 982 963 5 716 5 735 477 476 392 333 335 182 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 FCF bef. acq. Acquisitions 13
Outlook FY 2008 Local DKK Currency January 2 5 excl. non-recurring item s Sales grow th % 8-11 11-14 Grow th in EBI T % 2-5 9-12 ~ 18 EBI T m argin % 4-7 Grow th in net profit % Free cash flow before acquisitions, DKK 750-900 m illion CAPEX, DKK m illion 800-950 ~ 20 ROI C % 6-8 Num ber of products, # Note: Non-recurring items in 2007 amounted to DKK 75m of EBIT and DKK 56m of net profit. Non- recurring items comprise damages for a 2007 patent settlement in favor of NZ. 14
Focus on growth and earnings • Ambition of DKK 10 billion in sales by 2010 could almost be reached organically 12,000 DKK 10 bn � Long-term expected organic growth of 8-10% in 2010 � Additional growth from acquisitions acquisitions 10,000 • Increased long-term growth � Retained long-term financial targets 8-10 growth expectation to 8-10% 8,000 DKK million 6,000 • Decision to build new enzyme production facility in the USA 4,000 mainly to support growth in ethanol industry 2,000 • Acquisitions and collaborations 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 continuously on the agenda Year Novozymes’ � Growth in operating profit of at least 10% per year long-term financial � Operating profit margin of around 17% � Return on average of invested capital after tax (ROI C) targets 15 of at least 15% per year
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. 16
WORLD LEADER UNDISPUTED IN ENZYMES 17
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