CVR-nr.: 1000 7 127
Novozymes Annual Report 2023
The Novozymes
Contents
The big picture
Five-year summary
Novonesis: a new beginning
Strategy & commitments
Targets & progress
Governance
Corporate governance
statements
Notes
Statements
Glossary
About the Report
Reader’s guide
This annual report has been released subse-
quent to the approval of the combination of
Novozymes and Chr. Hansen on January 29,
2024. The new combined group is called
Novonesis.
As an annual report is required to cover the
activities of a group during a financial year,
this report only discloses Novozymes’ finan-
cial and non-financial performance in 2023.
Non-financial elements concerning the com-
bined group, Novonesis, are provided in sep-
arate and clearly labeled sections. Read more
about Novonesis in the section The next step
on our strategic journey.
This report does not include any
realised,
combined, proforma or stand-alone financials
of Chr. Hansen or the combined entity
Novonesis.
Our corporate policies are available at
www.novonesis.com.
Visit
“Two years aer launching our strategy
“Unlocking growth – powered by biotech,” we are
delivering solid growth and earnings in a volatile
market environment, clearly demonstrating
Novozymes’ return to higher growth rates.”
Remuneration
GovernanceThe big picture
2
ContentsNovozymes A/S
The Novozymes Report 2023
Contents
%
%
%
1.5 1.5
* Frequency of occupational injuries with absence per million working hours.
Targets
Financial
67%
Absolute greenhouse gas
operations
%
renewable sources
1.5
Three-year rolling average
5%
%
2.1
acquisitions
16.5%
36%
Women in senior
management
%
Women across
4Novozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
Sales by business area
2022: 28%
22%
2022: 24%
Bioenergy
25%
2022: 21%
Grain & Tech Processing
13%
2022: 15%
12%
2022: 12%
* Organic sales growth
-
-
-
growth.
• Medley Unido L
-
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Visit
% of
total sales
28%
of sales
5Novozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
-
-
-
-
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tions in North America.
• MenaquinGold™-
• Vertera
®
Probite – an innovative solution to the
-
-
• ProSilience™ HU -
• Lumista
®
Gold – is a solution that helps brewers
-
the brewery.
consumers to live healthier lives.
Visit
Bioenergy
-
-
-
-
-
-
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growth.
-
-
-
Visit
25%
of sales
22%
of sales
6Novozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
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• Protide
®
L – a natural protease that helps cus-
improving plants’ access to nutrients in the soil
-
-
-
Visit
Grain & Tech
Processing
-
subareas.
• Quara
®
LowP
-
-
Visit
12%
of sales
13%
of sales
7Novozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
-
Sales by geography
13
%
%
35%
%
* Organic sales growth
8Novozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
Revenue
Special items* - - - ()
()
Operating profit (EBIT) , , , ,
,
Total assets
No.
%
Women in senior management
%
Renewable electricity share
%
Five-year summary
%
%
%
Gross margin
%
%
EBIT margin before special items*
% . . . .
.
%
%
%
Return on equity
%
% . . . .
%
9Five-year summaryNovozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
Five-year summary
Unleashing the
biosolutions
Ester Baiget,
Cees de Jong,
Chair
GovernanceThe big picture
The Novozymes Report 2023
10
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return to higher growth rates.
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ments.
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that our biosolutions bring.
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global partnership with Carbios to enable biological
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alternative protein solutions.
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Novonesis builds on more than one hundred
years of innovation, unparalleled biotech
capabilities, and the ability to deliver
high quality biosolutions at scale to meet
customer needs across the world.
11Novozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
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over the long term enable us to accelerate custom-
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ner to our customers.
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sectors.
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en our engagement in this space.
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Cees de Jong
Ester Baiget,
12Novozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
Novonesis:
a new beginning
Novonesis: a new beginning
2023 financials and non-financials of Novozymes
are disclosed in this annual report. Forward-looking
elements represent Novonesis.
12.12.2022
Announcement
of proposed
combination of
Novozymes &
Chr. Hansen
30.03.2023
EGMs of
Novozymes &
Chr. Hansen
vote in favor of
the combination
10.10.2023
Executive
leadership of the
combined entity
announced,
effective as
of Day 1
20.11.2023
Required EU
remedy for anti-
trust approval is
announced. See
also Note 4.5.
13.12.2023
New name of
combined group
introduced;
Novonesis
26.01.2024
Combination
approved by
last anti-trust
authority
Financials and non-financials of Chr. Hansen up until
September 2023 can be found at ChrHansen.com.
Selected proforma financials will include calendar
year financials released during 2024.
Novonesis financial reporting will include Chr. Hansen
financials and non-financials from 29 January, 2024.
Completion of the combination between
Novozymes and Chr. Hansen
Novozymes and Chr. Hansen proposed on Dec. 12, 2022, to combine
by way of a statutory merger, and the final registration with the Danish
Business Authority* was successfully completed on 29 January, 2024.
The name, Novonesis**, reflects a new era of biosolutions where
innovation in biological sciences and technology will offer solutions to
solve some of the biggest challenges facing humanity. The combined
entity will create a leading global biosolutions partner with a broad
biological toolbox and a diversified portfolio in attractive markets.
Chr. Hansen’s shares were exchanged for a total of 187,298,646
Novozymes shares at the exchange ratio of 1.5326 for Chr. Hansen
Shareholders, excluding stock held by Novo Holdings A/S, and at the
exchange ratio of 1.0227 for Novo Holdings’ shares resulting in a total
value of DKK 67.7 billion being paid out to former Chr. Hansen
Shareholders.
Novo Holding will remain the main shareholder of Novonesis, like for
Novozymes and Chr. Hansen, and their long-term interest in
Novonesis is reflected by their full support of the merger and the
acceptance of a lower exchange ratio.
* By Chr. Hansen Holding A/S being merged into the continuing legal entity of
Novozymes A/S.
** The Novonesis and Novozymes A/S names will co-exist for an extended time
to govern the regulation name change process. The combined group has
been called and operated as Novonesis since January 29, 2024.
29.01.24
Day 1: Combined
group is formed by
merging Chr Han-
sen group into
Novozymes A/S
legal entity and
shares of
Chr. Hansen are
exchanged into
Novozymes shares.
08.02.2024
Release of
Novozymes
annual report
13Novozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
Novonesis: a new beginning
Novozymes’
business
-
use our resources.
Visit
Technical services
Our technical service teams help our
customers adopt innovations smoothly to
ensure the expected value and effects.
Distribution
Our biosolutions are delivered to
customers in various ways
depending on the industry, e.g.
directly from the company to
customers or via industry partners.
Commercial execution
In-depth understanding of customer
needs and markets enable us to
deliver relevant biosolutions.
Innovation
Using our biotech toolbox of enzymes,
specialized proteins and microorganisms,
we innovate and patent biosolutions to meet
the needs of our customers and of the world.
Quality
Our quality culture, capabilities,
and systems ensure that we deliver
the high-quality biosolutions our
customers expect of us.
Production
With a global production setup,
we produce high-quality
biosolutions at large scale. We
continuously optimize and
innovate our production
processes to get the most out of
our capacity while reducing our
environmental footprint.
Suppliers
Our trusted suppliers must ensure
reliability, quality, integrity, and eciency
with a passion for sustainability and
innovation. We work together to build
transparency and explore joint
decarbonization opportunities.
Customers
Using our biosolutions, customers
and consumers can produce more
efficiently, make better use of raw
materials and reduce greenhouse
gas emissions, as well as create
healthier, tastier and more
nutritious foods and beverages.
Together we find biological
answers for better lives
in a growing world
– Let’s rethink tomorrow
Novozymes
We derive our revenue from the sale of biosolutions.
Our business is driven by innovation, and in 2023, we
invested 11% of our revenue in research and development.
Partners
To form partnerships and collaborations
to enter new business areas faster and
to drive market transformation towards
a healthier planet.
15Novozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
Novozymes
External
Strategy &
commitments
save on vital resources while enabling them to
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that enable a healthy planet:
gas emissions by helping
-
-
als.
We enable our customers
-
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biosolutions that enhance
-
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sugar.
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32% 7%
16Strategy & commitments Novozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
Strategy & commitments
Explore
New options
for growth
Expand
BioHealth
and Human
Nutrition
Evolve
Our core
business
Transform
food system
Enable
healthier lives
Accelerate towards a
climate-neutral society
Commitments to a
healthy planet
2023 strategy highlights
The three growth pillars Evolve, Expand
and Explore in our strategy, “Unlocking
growth – powered by biotech” have
guided our investments and priorities
to grow Novozymes and direct the
company’s next chapter.
-
-
-
-
biosolutions.
17Strategy & commitments Novozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
Evolve
Our core
business
Expand
BioHealth
and Human
Nutrition
Strengthening our
engagement with customers
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strate to customers the impact biosolutions can
-
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corporate climate action across the private
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our biosolutions
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cleaning.
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18Strategy & commitments Novozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
Explore
New options
for growth
Combining with Chr. Hansen is a significant step
forward in the implementation of our strategy.
The new company is a leading global biosolu-
tions partner that is uniquely positioned to
enable the transition to a more sustainable
world. Novonesis will leverage its technology
platform to bring biological innovations to scale
and to market, addressing some of the world’s
most pressing challenges.
We are committed to delivering what the market
demands, whether it be enzymes, microbes,
proteins, or combinations of these different solu-
tions. Our approach involves close collaboration
with customers to tailor solutions that precisely
meet their requirements.
By leveraging the complementary skills of both
companies, Novonesis will be even better posi-
tioned to deliver solutions for healthier people
and a healthier planet. Half of Novonesis’ portfo-
lio focuses on enabling healthier lives and pro-
ducing better foods. The other half addresses
reducing chemical use and targeting climate
neutral practices to create a healthier planet.
Novonesis has a very diverse portfolio, a strong
innovation muscle, world class fermentation
capabilities and a global reach. This enables
Novonesis to innovate, scale and meet evolving
customer needs.
Beyond our solutions, we will continue to hold
ourselves accountable by having clear non-
financial targets for our operations, supply chain
and our employees.
Building on the strong legacy of both compa-
nies, Novonesis will continue on the path of sus-
tainability leadership. As part of the combination
announcement, we have already defined two
specific commitments on climate action and
diversity.
The company marks the beginning of a new era
of biosolutions. Based on our purpose of making
the world better with biology, Novonesis will
serve as a growth partner to customers, a value
creator for shareholders, and a company that
has a significant, positive impact on society and
the planet.
Learn more about Novonesis here
Visit
The next step on our strategic journey
Accelerating a
climate-neutral society
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19Strategy & commitments Novozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
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as a responsible corporate citizen.
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Science
.
Targets & progress
CO
Business travel
climate neutral society.
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20Targets & progressNovozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
Targets & progress
-
-
change.
Learn more in the Notes on
Climate change
1
electricity
Targets 2023 performance 2025 target
2030 validated targetStatus 2050 validated target
Climate is a key material issue for Novonesis, and we remain committed to our climate leadership
position. Novonesis will retain the target of reaching net-zero GHG emissions by 2050 as verified by
the Science Based Targets initiative. By 2030, we aim to achieve a 75% reduction in scopes 1 and 2
GHG emissions from Novonesis’ own operations, and a 35% reduction in scope 3 emissions from the
full supply chain, all from a 2018 baseline*.
* As per guidelines from the Science Based Targets initiative (SBTi), we have combined the existing emissions data
across scopes 1, 2 and 3 from Novozymes and Chr. Hansen. The combined emissions do not represent a significant
change in the percentage contribution from scopes 1, 2, 3 and within scope 3 categories. Therefore, Novonesis’
target will have 2018 as the baseline year, and the targets will remain SBTi validated. Moving forward, Novonesis will
merge the methodologies, improve emissions data, and consistently monitor progress following guidance from
SBTi and GHG Protocol.
21Targets & progressNovozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
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people.
Learn more in the Note on Water
global sites.
Targets 2023 performance 2025 target 2030 long-term commitment Status 2035 long-term commitment
22Targets & progressNovozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
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Learn more in the Note on Waste
Targets 2023 performance 2025 targetStatus 2030 long-term commitment
23Targets & progressNovozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
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-
unconscious bias.
-
teams about inclusion.
-
Learn more in the Note on
Targets 2023 performance Status 2025 target 2030 long-term commitment
Novonesis remains committed
to diversity and inclusion. With a target of
45% women and 45% men across all pro-
fessionals and in senior management by
2030, Novonesis aims to achieve gender
balance across the organization.
24Targets & progressNovozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
maintenance.
-
-
opinion.
Learn more in the Note on
Targets 2023 performance Status 2025 target 2030 long-term commitment
25Targets & progressNovozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
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live more sustainably.
-
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organizations.
Learn more in the Note on
Community engagement
Qualitative reporting only
Targets 2023 performance Status 2030 long-term commitment
26Targets & progressNovozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
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time.
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27Novozymes A/S
GovernanceThe big picture
The Novozymes Report 2023
Corporate
governance
Shareholder authority
Shareholders hold the ultimate authority over the
company and can at the Annual Shareholders’ Meet-
ings exercise their right to make decisions, including
through the appointment of the Board of Directors.
The Board of Directors is accountable to the share-
holders for the management of the company.
to adopt the implementation of the statutory
merger of Novozymes A/S and Chr. Hansen Hold-
Board composition and responsibilities 2023
-
of the Board of Directors and the Executive Man-
We have a proactive and transparent corporate governance
structure in place to ensure responsible business conduct
and long-term value creation.
diversity, independence and performance. In
-
tors also had four employee-elected members,
The composition of the Board of Directors ensured
that the combined competencies of the Board
enabled it to inspire, guide and oversee Novo-
zymes’ development, and diligently addressed and
resolved the issues and challenges facing Novo-
zymes at any given time.
Board of Directors and the Executive Management
is clearly outlined and described in the Rules of
Procedure for the Board of Directors and the
Rules of Procedure for the Executive Management.
Visit
Novozymes’ Articles of Association require the
Board of Directors to consist of from four to ten
increase the number of members from eight to
-
holder-elected members, each elected for a term
-
ation of various factors such as competencies,
of the Danish Financial Statements Act is available on our
Visit
Governance structure
the Rules of Procedure for the Board of Directors,
the Board of Directors had a Chairmanship con-
Chair. They assist in matters concerning the Execu-
2023 with Novozymes’ Board of Directors
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Ordinary board meetings
Monthly reports
Annual Shareholders’ Meeting
Extraordinary General Meeting
Organizational
performance review and
succession planning
Next year's budget
Strategy work
Review of financial and
non-financial performance
Evaluation of collaboration
between the Board of
Directors and the Executive
Leadership Team
29Corporate governanceNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
tive Leadership Team’s operational management
and report back to the Board of Directors. The
Chairmanship is also responsible for planning and
preparing board meetings.
Sustainability governance
-
ery of biosolutions to customers, and our engage-
Sustainability has been governed from the highest
level by the Board of Directors and the Executive
-
-
porate performance on key environmental, social,
-
Please see our Renumeration Report for more details.
Visit
The Board of Directors is responsible for
as part of the Executive Leadership Team’s day-
responsible corporate conduct and a long-term
perspective.
Read more about our sustainability governance on the
Visit
The statutory reports required by the
Danish Financial Statements Act are
published on our website:
• Corporate Governance (§107b)
• Diversity (§107d)
• Data ethics (§99d)
• Corporate social responsibility (§99a)
Visit
Gender diversity
We are committed to nurture a culture of diversity,
equity and inclusion, and have a policy for diversi-
purpose of increasing diversity, including the share
of the underrepresented gender, at all manage-
ment levels.
For more information about our policy on diversity, please
see “Position on diversity and equal opportunities” and our
of the Danish Financial Statements Act.
Visit
-
strategic direction. Novozymes’ purpose and val-
Board of Directors to ensure that they remain
sound and relevant in steering the company for-
responsible corporate citizen. The Board of Direc-
tors has also focused on ensuring that purpose,
values, and culture play a key role in future busi-
ness operations, including in relation to the combi-
nation of Novozymes and Chr. Hansen.
30Corporate governanceNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Visit
Statutory reporting of gender
diversity for Novozymes A/S 2023
Board of Directors
Number of members
Minority gender in %
Target in %* Not required
Other management levels
Number of members
Minority gender in %
Target in %
Year of target 2030
* Novozymes has set voluntary targets, despite not being
legally required to.
31Corporate governanceNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
The Innovation Committee
Morten Sommer, and Preben Nielsen.
tasks, etc. can be found in the Charter of the Innovation Committee.
Visit
-
Product and Process Development including key pipeline
-
The Audit Committee
The Audit Committee assists the Board of Directors in over-
seeing aspects relating to accounting, auditing, risks, internal
and governance data. The Audit Committee meets as neces-
-
tasks, etc. can be found in the Charter of the Audit Committee.
Visit
-
See more in the Note on Business ethics.
companies.
The Nomination and Remuneration Committee
The Nomination and Remuneration Committee assists the
Board of Directors in nominating candidates for the Board of
Directors, board committees and the Executive Management,
Executive Management, the board members and board com-
mittee members. The Nomination and Remuneration Com-
year.
More information can be found in the Charter of the Nomination and
Remuneration Committee.
Visit
-
ment remuneration and various topics related to the pro-
Board committees
32Corporate governanceNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Charters and recommendations
Recommendations on Corporate Governance that
form part of the disclosure requirements applica-
ble to companies listed on Nasdaq Copenhagen.
A detailed review of the corporate position on each of the
recommendations, and a description of the internal control
and risk management system relating to financial reporting,
can be found in the report on corporate governance prepared
pursuant to section 107b of the Danish Financial Statements
Act.
Visit
These recommendations require companies to
• Due to the limitations imposed by the Novo
Nordisk Foundation’s Articles of Association
Board of Directors reserves the right in certain
-
on corporate social responsibility. The Notes on
Environmental data and Social and governance in
in the Danish Financial Statements Act. The man-
datory reporting is placed in the Notes as the con-
auditors.
Furthermore, the statutory report is available on our website.
Visit
Reporting according to the EU Taxonomy can be
overall principles for the ethical management of
data by the company and supplements our com-
mitment to integrity and compliance.
The statutory report on Novozymes’ policy for, and work with,
data ethics pursuant to section 99d of the Danish Financial
Statements Act can be found on our website.
Visit
Novozymes is also committed to the ten principles
Our UNGC CoP reports can be found on the UNGC website.
Visit
Other governance-related information
Any amendments to the Articles of Association
require that shareholders representing at least
-
pany are represented at the Annual Shareholders’
-
sented at the meeting, are cast in favor of the pro-
posal to amend the Articles of Association.
The Board of Directors has been authorized by the
treasury stock on an ongoing basis, provided the
nominal value of the company’s total holding of
Companies Act. The purchase price must not devi-
Nasdaq Copenhagen at the date of acquisition.
addition, the Board of Directors is authorized to
increase the share capital.
Further, the Extraordinary General Meeting in
-
tion of the statutory merger of Novozymes and
-
merger.
33Corporate governanceNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Each year, one of the responsibilities of the Board
the Board of Directors assessed that the share
the company’s shareholders and other stakehold-
ers. Regarding its capital structure, the company
favored a rather modestly leveraged balance
-
Novozymes is party to several partnership con-
tracts that can be terminated by the other party in
contain provisions that restrict Novozymes’ licens-
-
ations.
Board member
Audit Committee
member
Nomination and Remuneration
Committee member
Innovation
Committee member
Board meetings
attended % Board tenure
End of
Board tenure
Share trading
in 2023
Number of shares
end of 2023
1,4
- -
1,2
1,2
- -
Heine Dalsgaard
1
-
1,2
- -
1
Morten Sommer
1,2
Anne Breum
3
3
- -
Preben Nielsen
3
-
3
-
1. Elected at the General Meeting. 2. Independent. 3. Employee representative. 4. Resigned from the Board on March 2, 2023.
Evaluation of the Board of Directors
The Board of Directors conducts an annual evalu-
ation, and every three years, the evaluation is con-
and the Executive Leadership Team. The evalua-
tion revealed an overall good performance by the
and the Executive Leadership Team. The recom-
-
-
zymes and Chr. Hansen, maintaining the right
Board and ensuring a strong focus by the Board
on innovation strategy.
34Corporate governanceNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Board of Directors
Cees de Jong Heine
Dalsgaard*
CEO of Chr. Hansen. Chair of the Nomination and Remu-
neration Committee and member of the Audit Commit-
of one year.
Board positions
Chair: Oterra A/S, Oterra Operations ApS, Oterra Holding
-
able B.V.
Special competencies
Extensive international business and management expe-
rience from a range of industries, such as the food, food
sustainability into strategy, operating model and report-
ing, ensuring a meaningful, positive corporate societal
impact.
and Remuneration Committee and the Innovation Com-
term of one year.
Board positions
Member: Recordati S.p.A.
Special competencies
Broad global biopharmaceutical commercial experience,
including emerging markets, innovation pipeline manage-
Chair of the Audit Committee. Member of the Board
Board positions
None.
Special competencies
Extensive international business and management expe-
-
ence and accounting expertise. Experience in sustainabil-
ity reporting, including assurance requirements.
* This board member is not regarded as independent in the
Corporate Governance that apply to Danish listed
companies.
four employee-elected members. The Board represents many years of international management experience,
and the members’ competencies combined ensures expert management of the company.
Board of Directors
Kim Stratton
35Board of DirectorsNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Board of Directors
Board of Directors
Kasim Kutay* Morten Otto
Alexander
Sommer
one year.
Board positions
Member: Mölnlycke Health Care.
Special competencies
Broad international experience in commercial research
and innovation pipeline management in the consumer
goods and consumer products sector. Experience in sus-
tainability integration into innovation processes.
of the Nomination and Remuneration Committee. Mem-
year.
Board positions
Member: Novo Nordisk A/S.
Special competencies
-
-
cial and accounting expertise.
* This board member is not regarded as independent in the
Corporate Governance that apply to Danish listed compa-
nies.
-
and Manjin Holding ApS. Member of the Audit Commit-
tee and the Innovation Committee. Member of the Board
Board positions
Member: Clinical-Microbiomics A/S, SNIPR Holdings
ApS, SNIPR Biome ApS, UNION therapeutics A/S, UTILI-
TY therapeutics Ltd.
Special competencies
Extensive experience in biotechnology research and
entrepreneurship.
Sharon James
36Board of DirectorsNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Board of Directors
Board of Directors
Anne Breum* Anders Hentze
Knudsen*
Preben Nielsen* Jens Øbro*
Employee representative.
Elected for a term of four years.
Employee representative.
Elected for a term of four years.
Employee representative.
four years. Member of the Innovation Committee.
Employee representative.
Elected for a term of four years.
37Board of DirectorsNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Executive Management
Executive Management
Our Executive Leadership Team comprises broad and international management experience, comprehensive
Ester Baiget Rainer
Lehmann
Education
Holds a chemical engineering degree and an MBA from
the Rovira i Virgili University, Spain.
Board positions
Member of the AkzoNobel Supervisory Board.
Special competencies
strong business and technical background. With more
and commercial business leader, Ester has driven trans-
range of industries. Through her leadership, she develops
and nurtures a culture of inclusion, engagement, and
commitment to delivering strong results.
Ester anchors sustainability across the company, ensur-
ing it is integrated in the company’s commitments and
strategy. She is also the company’s ambassador on the
global stage and an advocate of biotech as an instrumen-
tal enabler of a healthier planet. Among other positions
held, Ester is a member of the Board of Trustees of the
Education
Holds a Master of Business Administration from the
Private University of Applied Sciences in Goettingen,
Germany.
Special competencies
Rainer Lehmann is responsible for Finance, Investor
Relations, IT and Legal.
-
biotechnology industry. He has a successful track record
in scaling businesses and building high-performing
teams. In recent years, Rainer has gained valuable expe-
-
-
ness acumen to drive value creation and ensures
transparent disclosure of sustainability performance and
adherence to company policies and standards.
38Executive ManagementNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Risk management
Risk management
identify, assess, and mitigate potential business risks that may impact our
risks across categories such as sustainability and
technology. Our approach is to consider both
and holistic manner, treating all risks on similar
terms.
2023 risk overview
The key business risks described in this section
are based on Novozymes’ Risk Management
risks are based on Novozymes’ business.
-
-
bination itself in Novozymes’ Risk Management
-
nation-related risks and mitigation actions under
the period from pre-closing and up to three years
Aside from this additional risk, the four key busi-
-
lating global political and economic instability and
uncertainty. Novozymes’ key business risk and
pages.
the risks to our business. We address them in a
in the same manner as other business risks. As
per our commitment to the Taskforce on Cli-
-
nance, strategy, targets and risk management
related to climate change. Read more about our
reporting to the TCFD here
-
agement and capture ESG perspectives.
Risk management framework
The Novozymes Board of Directors has the overall
responsibility for overseeing risks and for main-
taining a robust risk management and internal
control system. The company operates an Enter-
-
Leadership Team and a Risk Responsible.
responsible for ensuring that senior management
-
ship across the organization. Risks are assessed
-
tem that estimates the potential impact of a given
-
-
Executive Leadership Team and the Board of
Directors.
See -
tors and risk management.
Risk assessment heat map
Volatility of agriculture-related business
Data protection and cyber threats
Global political and economic uncertainty
Supply chain challenges and dynamic input prices
Integration of Novozymes and Chr. Hansen
Climate related risk
Potential impact
Probability
39Risk managementNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Description of risk
Several of our businesses may poten-
-
modity prices, changes in the agricul-
tural market cycle, and regulations for
impact the agricultural value chain.
-
sure commodity prices and lead to
commodity-related business areas
and oil processing and bioethanol pro-
duction. For example, reduced econom-
ic activity in North America or Europe
could lead to reduced demand for
bioethanol blending and starch pro-
commodity prices due to shortages
could also impact our customers’ abili-
ty to source and process commodities
such as grains. This could put our sales
of biosolutions under pressure.
Mitigating actions
Flexibility is key to adapting to changing markets. Our bio-
solutions help producers achieve higher yields from the
same inputs and to generate valuable co-products, such
-
proof their operations. We also continued to explore
opportunities to use bioenergy feedstocks for other prod-
Volatility of agriculture-related business
Description of risk
The threat of cyberattacks is considered
to be high due to the increasing global
demand for fast adaptation of digitaliza-
-
thermore, the use of cyberattacks as a
increased that threat.
-
resents an additional exposure to cyber
company name, domain, email address,
and governance structures, there is an
increased risk that cyber criminals may
exploit any resulting confusion.
We are a technology-driven and fully
IT-supported business, and our supply
chain, logistics and production capabili-
ties are highly digitalized. Cyberattacks
could have a negative impact on our pro-
ductivity if systems are not accessible for
an extended period.
-
ed if information about our unique technol-
ogies or production strains is disclosed. It
safeguard sensitive business data and criti-
cal assets against this global threat.
Mitigating actions
It is essential to increase our ability to identify, protect, detect,
numerous organizational and technical security controls to
protect digital assets, including enhanced protection of PCs
response to cyber and information security incidents. Further-
-
-
Since the announcement of the combination, actions have
-
the combination.
To protect our business opportunities from the threat of global
-
-
ing patents.
and monitoring platforms are continuously upgraded in order
the detection and prevention of advanced cyberattacks. We
-
integrating Novozymes’ and Chr. Hansen’s systems and data in
a safe manner.
Data protection and cyber threats
Climate related risk
40Risk managementNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Description of risk
Novozymes’ global presence exposes
our business to the consequences of
global political and economic instabili-
trade conditions and increasing volatili-
During the year, other geopolitical
events arose that could potentially
have a similar impact. These conditions
may impact our business and make it
the short term.
Mitigating actions
countries.
and a shared commitment to sustainability on the global
We closely monitor political and economic developments
-
ed. We also deploy global versus local scenarios and con-
siderations in short- and long-term capacity planning.
scenarios and potential preparatory measures for our
business, assets and people.
Description of risk
The geopolitical environment is dynamic
and continues to be impacted by vola-
Such factors could impact global sup-
ply chains and, by extension, compa-
nies. If prices remain volatile and at a
our gross margin level, among other
things.
Mitigating actions
-
ture a fair share of value from our biosolutions. These
increased input costs.
We also continued to monitor our key material levels, con-
Finally, productivity improvements during the year also
-
-
als and energy.
Global political and economic uncertainty
Supply chain challenges and dynamic input prices
41Risk managementNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Long-term risks
-
itor strategic and fundamental risks that may
potentially impact the business in the long term
time.
including sustainability and technology. Through
our integrated sustainability trendspotting exer-
the risks being also assessed through our Enter-
prise Risk Management process.
are prepared to take adequate action and respond
Novozymes and Chr. Hansen.
Description of risk
While the combination of Novozymes
and Chr. Hansen provides opportuni-
ties, the complexity during the integra-
tion period exposes the business to
several risks.
A strong emphasis on integration plan-
ning and execution may lead to a risk
of the company losing focus on ongo-
emphasis could hinder synergy realiza-
-
tiatives. Uncertainty regarding job
impact employee retention and talent
attraction. Furthermore, the integration
-
ny to increased attempts of cyber-at-
tacks.
Mitigating actions
-
pany, focus has been on business continuity from day one.
This involved establishing and maintaining the necessary
-
ed.
-
dedicated integration committee to oversee the integra-
tion of Novozymes and Chr. Hansen and their respective
businesses. In addition, the Novonesis Executive Leader-
to ensure delivery on synergies and integration progress in
Enterprise Management reporting already includes risk
reporting related to the combination.
Integration of Novozymes and Chr. Hansen
42Risk managementNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Description of risk
Climate change is becoming increas-
ingly visible through more extreme
top concern.
Our technology relies on the availabil-
to produce. Increased long-term pres-
-
en by climate change. A severe
meet customer demand by directly
supply chain.
Mitigating actions
We continue addressing this long-term risk through our
-
informed by science and context, and enables collective
-
quality and quantity challenges at our priority sites. We also
.
and local authorities. This project is expected to improve
We disclose more details annually in CDP’s Climate Change and
Water Security questionnaires.
Visit
Water scarcity due to climate change
Description of risk
Industrial biotech is a key enabling
-
bon and biobased solutions. The com-
pany’s research and business are based
on innovation and delivering biosolu-
tions that can tackle some of today’s
biggest challenges.
innovative uses of current technolo-
-
ture, sustainable food systems or
solutions.
could pose a risk to our technology
base.
Mitigating actions
biotech. We are committed to continuously learn and
its safe use.
Economic Forum to advocate for science-based and inno-
-
-
other companies to drive a transformative research agen-
-
-
verting carbon dioxide into protein, bypassing the use of
to mitigate any potential impacts.
Learn more in our position statement on Industrial biotechnology.
Visit
Emerging technologies
Climate related risk
43Risk managementNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Taskforce on Climate-related Financial Disclosures
society. We actively invest in reducing the carbon
footprint of our operations and supply chain as
currently facing.
step in addressing and taking action on current
climate change.
Change A List for our commitment to environmen-
tal transparency and action on climate change.
Novozymes strongly supports the recommenda-
tions of the Taskforce on Climate-related Financial
-
cating climate-related impacts not only helps us
understand and manage climate-related issues
better, but that it also provides important insights
for our stakeholders. The relevant sections for
TCFD reporting are integrated in our annual report
and outlined in the table and our CDP Climate
Change response.
Governance
The organization’s governance
around climate-related risks and
opportunities.
Sustainability is governed at the highest level by the Board of Directors and the Executive Leadership
-
formance as part of the Executive Leadership Team’s day-to-day running of the company.
guided by climate-related impacts in terms of both opportunities and risks. They are also responsible for
Corporate governance
Visit
Strategy
The actual and potential impacts
of climate-related risks and oppor-
tunities on the organization’s
is material.
Climate-related risks and opportunities guide our strategic direction.
to explore, invest in, and drive innovations in business areas critical for climate change mitigation, such
as advanced protein solutions and carbon capture.
-
Targets and progress
Visit
Our climate journey.
Visit
Risk Management
assesses, and manages
climate-related risks.
-
-
ferent levels of the organization.
-
Risk management
Visit
Metrics and Targets
The metrics and targets used to
assess and manage relevant cli-
mate-related risks and opportunities
We are also committed to the Science Based Targets initiative and to driving action on our decarboniza-
-
Targets and progress
Our climate journey
Visit
Visit
TCFD Recommended disclosures Learn moreSummary of our approach
44Risk managementNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
EU Taxonomy Regulation reporting
EU Taxonomy Regulation reporting
2023 Revenue CAPEX OPEX
Taxonomy-aligned
activities
Taxonomy-eligible
activities but not
Taxonomy-aligned
Total Taxonomy-
eligible activities 0% 3.4% 0.4%
Taxonomy-non-
eligible activities
of the Regulation is to help the EU in guiding sus-
tainable investments by requiring companies to
report on the parts of revenue*, capital expendi-
-
-
mate change mitigation, climate change adaptation,
resources, transition to a circular economy, pollution
prevention and control, and protection and resto-
-
ing eligibility as the technical annexes for the last
by the European Commission. This means that com-
activities that qualify as eligible under the Regula-
-
ble activities. For economic activities included in
-
tion and climate change adaptation, companies
must further assess the alignment of the eligible
activities to the Regulation. Alignment is deter-
mined by the technical screening criteria through
“substantially contributing” to at least one of the
objectives and ensuring to “do no substantial harm
meeting the “minimum social safeguards”.
Despite the positive environmental impact of
Novozymes’ biosolutions and our focus on mini-
mizing our environmental footprint, Novozymes’
the six environmental objectives to identify the
proportion of any eligible and potentially aligned
activities.
We screened the activities listed in the technical
annexes under the Delegated Regulations
-
identify eligible and aligned activities.
Revenue
-
-
the Note on Revenue.
* The EU Taxonomy Regulation applies the term turnover.
Capital expenditures (CAPEX)
contribution to the objective for climate change
tangible and intangible assets as included in the
Property, plant, and
equipment and Note on Intangible assets.
Operational expenditures (OPEX)
contribution to the objective for climate change
related to “close to market research, development
-
-
-
-
opment, building renovations, short-term leases,
and the repair and maintenance of property, plant,
and equipment.
Full reporting tables
our EU Taxonomy reporting disclosure on Novo-
zymes.com.
Visit
45EU Taxonomy Regulation reportingNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Summary of the Remuneration Report
Summary of the
Remuneration Report
Each year Novozymes issues the Novozymes
Remuneration Report as a separate report. The
content of the Remuneration Report has been pre-
the Danish Companies Act and holds information
and details on the remuneration of the Board of
Directors and the Executive Management. The
presented for an advisory vote at the Annual
approved at the Annual Shareholders’ Meeting in
All remuneration of the Board of Directors and the
scope of the approved remuneration policy.
General remuneration policy
Novozymes’ remuneration policy for managers and
other employees is designed both to encourage
strong individual performance and to support
Novozymes’ overall value creation. Remuneration
consists of a base salary, pension contributions, a
cash bonus and stock-based incentive programs.
These components are linked to employees’ indi-
vidual performance and to the level of achieve-
-
mental targets. The remuneration policy aims to
regularly against external benchmarks.
except for an addition to our articles of associa-
and Executive Management as approved at the
Remuneration of the Board of Directors
The remuneration of the Board of Directors com-
ensures that the Board of Directors safeguards the
value of incentive-based remuneration. The Board
of Directors’ fee is set at a market-conformant level
Board of Directors and committee memberships
Board member
Audit
Committee
Nomination and
Remuneration
Committee
Innovation
Committee
Board
meetings
attended %
1,2
Heine Dalsgaard
1
1,2
1
1,2
Morten Sommer
1,2
3
Anne Breum
3
Preben Nielsen
3
3
1. Elected at the Annual Shareholders’ Meeting 2. Independent 3. Employee representative
46Summary of the Remuneration ReportNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
of the role, given the complexity of the Novozymes
Board meetings held.
increase. The Chair receives a fee that is three
times the base fee, and the Vice Chair receives a
-
er committee members receive a further base fee
and the Vice Chair of the Board do not receive such
additional fee if appointed to the Nomination and
employee-elected. The total remuneration paid to
The decrease is a consequence of the reduced num-
-
any additional pay or fee to the Board of Directors.
-
-
Chair, Vice Chair, and Board members, respectively.
The individual Board members’ fees and their shareholdings
Visit
Remuneration of the Executive Management
-
•
•
Rainer Lehmann replaced Lars Green as CFO of
Green for ten months and of Rainer Lehmann for
The total remuneration of members of the Execu-
• A base salary plus pension, company car and
• A short-term incentive program
• A long-term incentive program
-
salary.
In addition to their regular remuneration, Ester
Baiget and Lars Green received compensation for
lost incentives from their previous employers.
compensation for lost incentives from her previous
-
nary sign-on compensation for lost incentives from
The targets for the short-term incentive program
achieved for delivering an extraordinary perfor-
-
mance targets are set for each executive and
The EBIT margin before special items achieved in
-
The level of achievement of individual performance
targets, and thus the size of remuneration payment
to the individual executive, is determined by the
Board of Directors based on recommendations from
the Nomination and Remuneration Committee.
Based on its assessment, the Board determined
that the pay-out based on individual targets are
47Summary of the Remuneration ReportNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
In addition to the STIP, Ester Baiget has been
merger of Novozymes and Chr. Hansen being com-
-
the combined company. As the conditions for the
bonus is not included in the reported remuneration
Remuneration to the individual members of the Executive Management
Fixed Variable
2023
2022
DKK million Salary
Contribution
based pension Other benets
T o t a l x e d
(% of total remuneration)
Cash bonus
(STIP)
Incentive pro-
grams (LTIP)
Total variable
(% of total remuneration)
Total
remuneration
Compensation for
lost incentives/sign-
on fee
Total
remuneration
Ester Baiget
27.7
23.7
(40%) (60%)
Rainer Lehmann
(42%)
(58%)
3.3 -
Former executives
Lars Green
(36%
(64%)
16.6 17.9
Remuneration 16.2 1.8 0.6 18.6 11.6 17.4 29.0
47.6
8.3 41.6
the long-term incentive programs are expensed over the four-year vesting period. The long-term incentive included in the above table is the cost of the 2023 program measured at market value at the grant date.
Short-term incentive program – Target achievement
Target Weight Actual performance
Ester Baiget Rainer Lehmann Lars Green
EBIT margin before special items
Contribution to strategy
Individual targets
Total, % of max 86% 81% 82%
Total, DKK million 6.7 0.7 4.2
48Summary of the Remuneration ReportNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
-
gets for each annual grant cycle to ensure the tar-
-
parameters covering environmental and social
-
place and Diversity.
salary. Further, the program includes a maxi-
to limit the total allocation of stock options and
-
al conditional grant.
The LTIP program covering the performance peri-
on sustainability targets. Average organic sales
-
Further information on the incentive programs for
these employee groups can be found in the Note
on Stock-based payment to the consolidated
-
Remuneration of senior leadership
The remuneration of Novozymes’ senior leader-
-
-
tive programs for vice presidents and directors
program for the Executive Management. The real-
ized target achievement for the LTIP program cov-
For the current and former members of the Execu-
-
ized target achievement.
The members of the Executive Management have
contracts of employment containing standard con-
-
panies, including the periods of notice that both
parties are required to give and noncompetition
-
-
months’ base salary and pension contributions.
Further details on the Executive Management’s
remuneration and their shareholdings etc. can be
found in the Novozymes Remuneration Report
49Summary of the Remuneration ReportNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
The Novozymes stock
The Novozymes stock
Stock performance
Dividends
dividend in respect of its earnings for the period
-
er agreement. Proposed dividend for the period
announced by the Board of Directors of Novonesis
-
holders’ Meeting.
Share price development 2023
Novozymes OMX C25 CAP
Dec DecNovJan Feb Mar Apr May Jun July Aug Sep Oct
70
80
90
100
110
120
Total shareholder return including dividends %
202120202019 2022
2023
14%
9% 9%
55%
-34%
50The Novozymes stockNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Share and ownership structure
December 31, 2023
-
investors, including Novo Holdings A/S, held
-
the Novo Nordisk Foundation, an independent
objective of the Novo Nordisk Foundation is to
provide a stable basis for the commercial and
research activities of the companies of the Novo
A stock B stock Total
Number of shares
Number of votes
shares, increasing the common stock to
further described in .
Ownership structure
Novo Nordisk
Foundation
Institutional and
private investors
Novo Holdings A/S
29.2% of total shares
74.0% of votes
70.8% of total shares
26.0% of votes
Novozymes
51The Novozymes stockNovozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S
Accounts and
performance
53 Performance and consolidated financial statements
61 Performance and consolidated environmental data
63 Performance and consolidated social and governance data
65 Notes
149 Statements
155 Financial statements for Novozymes A/S
170 Glossary
172 About the Report
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
EBIT before special items
DKK million
EBIT before special items
EBIT magin before special items (%)
2020
2019
2021 2022
4,039
3,652
4,007
4,629
2023
4,552
28.1
26.1
26.8
26.4
25.4
Sales and sales growth
DKK million
2020
2019
2021 2022
14,374
14,012
14,951
17,553
2023
17,899
Sales Sales growth, organic (%)
(1)
0
6
9
5
Novozymes A/S 53Sales and earnings
Sales and earnings
Sales
Total sales in 2023 were DKK 17,899 million, cor-
responding to an increase of 5% organically and
of 2% reported in DKK compared with 2022.
Organic sales growth in 2023 was led by strong
double-digit growth in Bioenergy driven by inno-
vation and supported by expansion of corn-
based ethanol production in Latin America and
growth in solutions for biodiesel production and
biomass conversion. Growth was further sup-
ported by a solid development in Household
Care driven by innovation and penetration of
enzymatic solutions in emerging markets. The
macroeconomic situation in 2023 with higher
inflation and rising interest rates impacted con-
sumer demand and led to inventory adjustments
in many food-related industries, having a nega-
tive impact on the food-related parts of Food,
Beverages & Human Health, Grain & Tech
Processing and Agriculture, Animal Health &
Nutrition.
Gross profit and gross margin
Gross profit increased by 2% to DKK 9,722 mil-
lion from DKK 9,577 million in 2022. The gross
margin was 54.3%, down from 54.6% in 2022.
The decrease in the gross margin compared to
last year was driven by higher input and logistics
costs, partly offset by a positive pricing impact.
Operating costs
Operating costs increased by 2% to DKK 5,341
million. Operating costs as a percentage of sales
were 30%.
• Sales and distribution costs increased by 4%,
accounting for 13% of sales.
• Research and development costs increased
by 1%, accounting for 11% of sales.
• Administrative costs increased by 1%,
accounting for 5% of sales.
The increase in operating costs in 2023 was
mainly due to higher sales and distribution costs
and strategic investments to support long-term
growth.
Other operating income
Other operating income was DKK 171 million,
compared with DKK 276 million in 2022. Other
operating income in 2023 was positively
impacted by DKK 88 million from the divestment
of selected waste-water treatment solutions. In
2022, other operating income was positively
impacted by DKK 201 million from the non-cash
accounting gain related to the 21st.BIO transac-
tion.
EBIT before special items
EBIT before special items was DKK 4,552 million,
down from DKK 4,629 million in 2022. The EBIT
margin before special items ended at 25.4%,
down from 26.4%. The EBIT margin before spe-
cial items was adversely impacted by a lower
gross margin resulting from higher input prices,
somewhat mitigated by higher selling prices.
Additionally, currencies had a negative impact.
EBIT
EBIT decreased by 13% to DKK 3,976 million,
down from DKK 4,561 million in 2022. The
decline was driven by special items related to the
combination with Chr. Hansen. The EBIT margin
ended at 22.2%, down from 26.0% in 2022.
Net finance
Net financial costs were DKK 49 million in 2023,
compared to net financial income of DKK 2 mil-
lion in 2022. In 2023, a net loss of DKK 51 million
on currency hedging/revaluation and other for-
eign exchange losses was realized.
Tax
The effective tax rate was 22.3%, up from 19.1%
in 2022. In 2023, the effective tax rate was nega-
tively impacted by merger-related costs not
deductible for tax purposes, while being posi-
tively impacted by the settlement of a
long-standing tax case. The effective tax rate for
2022 was positively impacted by various tax-
exempt accounting gains that were one-offs.
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 54Sales and earnings
Income statement
DKK million Note 2023 2022
Revenue 2.1, 2.2 17,899 17,553
Cost of goods sold 2.3, 3.1, 3.2, 4.1 (8,177 ) (7,976 )
Gross profit 9,722 9,577
Sales and distribution costs 2.3, 3.1, 3.2 (2,365 ) (2,271 )
Research and development costs 2.3, 2.4, 3.1, 3.2 (2,017 ) (2,001 )
Administrative costs 2.3, 3.1, 3.2 (959 ) (952 )
Other operating income, net 2.5 171 276
Operating profit (EBIT) before special items 4,552 4,629
Special items 2.6 (576 ) (68 )
Operating profit (EBIT) 3,976 4,561
Share of result in associates (18 ) (7 )
Financial income 5.2 282 533
Financial costs 5.2 (331 ) (531 )
Profit before tax 3,909 4,556
Tax 2.7 (870 ) (870 )
Net profit 3,039 3,686
Attributable to
Shareholders of Novozymes A/S 3,024 3,676
Non-controlling interests 15 10
Proposed dividend per share, DKK 6.00
Earnings per share, DKK 2.8 10.92 13.29
Earnings per share, diluted, DKK 2.8 10.88 13.19
Statement of comprehensive income
DKK million Note 2023 2022
Net profit 3,039 3,686
Items that may subsequently be reclassified to the
income statement:
Currency translation adjustments
Subsidiaries and non-controlling interests (550 ) 155
Tax on currency translation adjustments 12 (15 )
Currency translation adjustments (538 ) 140
Cash flow hedges
Fair value adjustments (81 ) (150 )
Tax on fair value adjustments 17 33
Cash flow hedges reclassified to costs of goods sold 86 -
Cash flow hedges reclassified to financial costs (25 ) 295
Tax on reclassified fair value adjustments (13 ) (65 )
Cash flow hedges (16 ) 113
Other comprehensive income (554 ) 253
Comprehensive income 2,485 3,939
Attributable to
Shareholders of Novozymes A/S 2,472 3,929
Non-controlling interests 13 10
Consolidated statements of income
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Cash flow from operating activities
DKK million
2020
2019
2021 2022
3,196
4,355
4,062
4,006
2023
4,152
Free cash flow before acquisitions
DKK million
2,205
3,419
2,946
1,144
2020
2019
2021
2,100
20232022
Net investments
DKK million
Net investments Net investments (% of sales)
6.9
6.7
7.5
16.3
991
936
1,116
2,862
2020
2019
2021 2022
11.5
2,052
2023
Novozymes A/S 55Cash Flow
Cash Flow
Cash flow from operating activities
The cash flow from operating activities was DKK
4,152 million, up from DKK 4,006 million in
2022. The higher cash flow from operating activi-
ties was mainly driven by less negative develop-
ments in working capital, compared with 2022,
and less tax paid.
Net investments
Net investments excluding acquisitions were DKK
2,052 million, down from DKK 2,862 million in
2022. Net investments in property, plant and
equipment amounted to DKK 1,854 million, com-
pared with DKK 2,732 million in 2022, as the
majority of the investments related to the invest-
ment in the new production line in Blair,
Nebraska, U.S. were made in 2022.
Free cash flow before
acquisitions and divestments
The free cash flow before acquisitions and
divestments amounted to DKK 2,100 million,
compared with DKK 1,144 million in 2022. The
increase was mainly driven by lower net invest-
ments.
Free cash flow
The free cash flow was DKK 2,019 million in
2023, compared with DKK 1,334 million in 2022.
Financing activities
The cash flow from financing activities was nega-
tive at DKK 1,889 million, compared with a nega-
tive cash flow of DKK 1,250 million in 2022. The
negative cash flow from financing activities was
mainly due to increased dividend payments due
to interim dividend payments, which was partly
offset by the fact that no stock buyback programs
were executed in 2023 due to the combination
with Chr. Hansen.
Cash position
Cash and cash equivalents at December 31,
2023, amounted to DKK 1,116 million, up from
DKK 1,041 million at December 31, 2022.
Undrawn committed credit facilities were DKK
5,256 million at December 31, 2023.
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 56Cash Flow
DKK million Note 2023 2022
Net profit 3,039 3,686
Reversal of non-cash items 6.7 2,155 1,935
Income tax paid 2.7 (790 ) (910 )
Interest received 77 18
Interest etc. paid (157 ) (131 )
Cash flow before change in working capital 4,324 4,598
Change in working capital
(Increase)/decrease in receivables (177 ) (330 )
(Increase)/decrease in inventories 138 (787 )
Increase/(decrease) in payables, deferred income and
contract liabilities (127 ) 534
Currency translation adjustments (6 ) (9 )
Cash flow from operating activities 4,152 4,006
Investments
Purchase of intangible assets 6.7 (199 ) (130 )
Purchase of property, plant and equipment 6.7 (1,857 ) (2,760 )
Sale of intangible assets 1 -
Sale of property, plant and equipment 3 28
Business acquisitions, divestments, purchase and sale
of financial assets 6.7 (81 ) 190
Cash flow from investing activities (2,133 ) (2,672 )
Free cash flow 2,019 1,334
DKK million Note 2023 2022
Financing
Borrowings 3,295 2,140
Repayment of borrowings (2,307 ) (1,602 )
Overdraft facilities, net (65 ) 193
Repayment of lease liabilities (123 ) (120 )
Shareholders:
Purchase of treasury stock - (500 )
Sale of treasury stock 167 164
Dividend paid (2,856 ) (1,525 )
Cash flow from financing activities (1,889 ) (1,250 )
Net cash flow 130 84
Unrealized gain/(loss) on currencies and financial assets included
in cash and cash equivalents (55 ) (6 )
Net change in cash and cash equivalents 75 78
Cash and cash equivalents at January 1 1,041 963
Cash and cash equivalents at December 31 1,116 1,041
Consolidated statement of cash flows
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
ROIC before special items and
average invested capital
DKK million
Average invested capital ROIC before special items (%)
2020
2019
2021 2022
15,038
15,301
16,606
19,411
21.1
18.9
19.3 17.9
2023
21,097
16.5
Net interest-bearing debt (NIBD) and
net interest-bearing debt-to-EBITDA
DKK million
NIBD NIBD/EBITDA
2020
2019
2021 2022
2023
0.8
0.8
1.0
1.0
4,049
3,871
5,225
5,807
1.2
6,617
Net working capital
% of sales
Inventories Net working capital
Receivables Payables and deferred income
2021
2020
2019
2022 2023
-30
-20
-10
0
10
20
30
Novozymes A/S 57Balance sheet and financial position
Balance sheet and financial position
Total assets
Total assets increased from DKK 27,983 million
at December 31, 2022, to DKK 28,391 million at
December 31, 2023. The increase was mainly
driven by net investments, partly offset by amor-
tization and depreciation.
Invested capital
Invested capital increased from DKK 20,703 mil-
lion in 2022 to DKK 21,490 million in 2023. This
was mainly a result of net investments and a
slight increase in net working capital.
ROIC before special items
Return on invested capital (ROIC) before special
items was 16.5%, down 1.4 percentage points
from 17.9% in 2022. The decrease in ROIC
before special items was mainly due to an
increase in invested capital, and an increase in
the effective tax rate.
Net working capital
Novozymes’ net working capital increased to
DKK 4,710 million, up from DKK 4,244 million in
2022, due to an increase in trade receivables,
assets held for sale and lower trade payables
due to lower investments, partly offset by lower
inventories.
Net interest-bearing debt
Novozymes had net interest-bearing debt of DKK
6,617 million at December 31, 2023, compared
with DKK 5,807 million at December 31, 2022.
Net interest-bearing debt was impacted by cash
outflows from dividend payments of DKK 2,856
million, partly offset by the fact that no stock
buyback programs were executed in 2023.
Net interest-bearing debt-to-EBITDA
Net interest-bearing debt-to-EBITDA was 1.2x at
December 31, 2023, up from 1.0x at December
31, 2022.
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The Novozymes Report 2023
Novozymes A/S 58Balance sheet and financial position
Assets
DKK million Note Dec. 31, 2023 Dec. 31, 2022
Intangible assets 3.1 4,532 4,698
Land and buildings 3.2 4,614 3,999
Plant and machinery 3.2 4,953 4,151
Other equipment 3.2 992 1,028
Assets under construction 3.2 1,766 2,896
Deferred tax assets 2.7 1,762 1,623
Other financial assets 62 92
Investments in associates 205 223
Other receivables 4.3 43 32
Non-current assets 18,929 18,742
Inventories 4.1 3,627 3,803
Trade receivables 4.2 3,702 3,454
Contract assets 4.2 70 151
Tax receivables 2.7 296 352
Other receivables 4.3 279 360
Other financial assets 40 80
Cash and cash equivalents 1,116 1,041
Assets held for sale 4.5 332 -
Current assets 9,462 9,241
Assets 28,391 27,983
Liabilities and equity
DKK million Note Dec. 31, 2023 Dec. 31, 2022
Common stock 5.5 562 562
Reserves and retained earnings 13,416 13,275
Equity attributable to shareholders of Novozymes A/S 13,978 13,837
Non-controlling interests 6.5 373 391
Total equity 14,351 14,228
Share purchase liability 6.5 - 760
Deferred tax liabilities 2.7 1,965 1,653
Provisions 3.4 100 119
Contingent consideration 3.6 - 224
Lease liabilities 5.3 232 288
Contract liabilities 152 129
Borrowings 5.3 4,329 3,619
Non-current liabilities 6,778 6,792
Share purchase liability 6.5 584 -
Lease liabilities 5.3 137 123
Provisions 3.4 12 10
Contingent consideration 3.6 72 158
Borrowings 5.3 3,083 2,919
Trade payables 1,616 1,869
Contract liabilities 65 94
Deferred income 54 44
Tax payables 2.7 183 326
Other liabilities 4.4 1,456 1,420
Current liabilities 7,262 6,963
Liabilities 14,040 13,755
Liabilities and equity 28,391 27,983
Consolidated balance sheet
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Changes in equity 2023
DKK million
Compre-
hensive
income
Equity
Jan. 1,
2023
Dividend Other Equity
Dec. 31,
2023
14,228
2,485
(2,856)
494
14,351
Novozymes A/S 59Equity and shareholder return
Equity and shareholder return
Equity
At December 31, 2023, equity was DKK 14,351
million, up from DKK 14,228 million at December
31, 2022.
Equity ratio
Equity accounted for 50.5% of total assets at
December 31, 2023, down from 50.8% at
December 31, 2022.
Return on equity
Return on equity was 21.7%, down 6.9 percent-
age points from 28.6% in 2022. The decrease
was a result of the reduced net profit.
Treasury stock
At December 31, 2023, the holding of treasury
stock was 3.7 million B shares, equivalent to
1.3% of the common stock, compared to 4.4 mil-
lon B shares, equivalent to 1.6% of the common
stock in 2022.
Dividend
In October 2023, interim dividends of DKK 4.20
per share were paid out for the period January 1
- August 31, 2023. A proposed dividend for the
period September 1 - December 31, 2023 will be
announced by the Board of Directors of
Novonesis in connection with the notice of the
Annual Shareholders’ Meeting.
Read more about the Novozymes stock in
The Novozymes stock
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 60Equity and shareholder return
Attributable to shareholders of Novozymes A/S
DKK million Common stock
Currency translation
adjustments Cash flow hedges Retained earnings Total
Non-controlling
interests Total equity
Equity at January 1, 2023 562 132 81 13,062 13,837 391 14,228
3,024 3,024 15 3,039
Other comprehensive income for the year (536 ) (16 ) (552 ) (2 ) (554 )
Total comprehensive income for the year (536 ) (16 ) 3,024 2,472 13 2,485
Sale of treasury stock 167 167 167
Dividends (2,825 ) (2,825 ) (31 ) (2,856 )
Stock-based payment 147 147 147
Non-controlling interests and share purchase liability 176 176 176
Tax related to equity items 4 4 4
Changes in equity - (536 ) (16 ) 693 141 (18 ) 123
Equity at December 31, 2023 562 (404 ) 65 13,755 13,978 373 14,351
Equity at January 1, 2022 564 (8 ) (32 ) 11,303 11,827 379 12,206
3,676 3,676 10 3,686
Other comprehensive income for the year 140 113 253 - 253
Total comprehensive income for the year 140 113 3,676 3,929 10 3,939
Purchase of treasury stock (500 ) (500 ) (500 )
Sale of treasury stock 164 164 164
Write-down of common stock (2 ) 2 - -
Dividend (1,524 ) (1,524 ) (1 ) (1,525 )
Stock-based payment 123 123 123
Non-controlling interests and share purchase liability (43 ) (43 ) 3 (40 )
Tax related to equity items (139 ) (139 ) (139 )
Changes in equity (2 ) 140 113 1,759 2,010 12 2,022
Equity at December 31, 2022 562 132 81 13,062 13,837 391 14,228
Proposed dividend for the period September 1 - December 31, 2023 will be announced by the Board of Directors of Novonesis in connection with the notice of the Annual Shareholders’ Meeting.
Consolidated statement of equity
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Five-year operational emissions (CO
2-eqv.)
1,000 tonnes
Scope 1 Scope 2
2020
2019
2021 2022
161
330
234
218
2023
143
Steam
22% (22%)
Energy by source 2023
(2022)
%
Electricity
9% (10%)
conventional
Electricity
47% (47%)
renewable
Fuel
17% (17%)
conventional
Heat
1% (1%)
conventional
Heat
4% (3%)
renewable
Novozymes A/S 61Environmental performance
Environmental performance
Operational ecoefficiency
In 2023, sales increased organically by 5% driven
by price increases, whereas production volumes
decreased slightly. The consumption of energy
and water decreased by 9% and 11% respectively
compared to 2022. The decrease was driven by
changes in product mix towards less resource
consuming products, lower production volumes
and implementation of efficiency-enhancing pro-
jects.
Novozymes strives to decouple environmental
impact from business growth, and we define tar-
gets and metrics that measure and drive our sus-
tainability performance.
Climate change
Novozymes’ total scopes 1 and 2 GHG emissions
were 143,000 tonnes in 2023, an 11% decrease
from 161,000 tonnes in 2022. The major contribu-
tor was Novozymes’ site in Blair, US, for which we
procured green electricity during 2023.
Energy
In 2023, Novozymes’ energy consumption was
4,396,000 GJ, a decrease of 9% compared with
2022.
Renewable sources accounted for 51% of the
energy consumption in 2023 compared with 50%
in 2022. Renewables made up 84% of the total
electricity in 2023, up from 82% in 2022. The
main contributor to this increase was our site in
Blair, US which started to procure renewable
energy certificates.
Water
Novozymes’ water withdrawal decreased by 11%,
from 8,720,000 m in 2022 to 7,793,000 m in
2023.
The total volume of wastewater generated in
2023 decreased by 7% compared to 2022.
Waste
Similar to 2022, 100% of our biomass was re-cir-
culated as compost, fertilizer, feedstock for bio-
gas or the like in 2023.
For non-biomass waste, the rate of recycling
across our global production sites increased to
74%, from 63% in 2022.
Environmental compliance
The number of breaches of regulatory limits
recorded worldwide in the Novozymes organiza-
tion increased to 23 in 2023 from 21 in 2022.
Most of them were related to wastewater dis-
charge and biomass processing, handling and
distribution.
Novozymes is addressing these incidents.
Novozymes received 14 neighbor complaints in
2023, compared to 23 received in 2022. Most of
them pertained to noise and light related to con-
struction activities.
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Novozymes A/S 62Environmental performance
Note 2023 2022
Climate change
7.1 1,000 tonnes CO 143 161
Energy
7.2 4,396 4,840
7.2 51 50
Water
7.3 1,000 m3 7,793 8,720
7.3 1,000 m3 6,295 6,766
Waste
7.4 544 559
7.4 74 63
7.4 529 539
7.4 100 100
Environmental compliance, etc.
7.5 23 21
7.5 14 23
References to notes without data
7.6 n/a n/a
7.7 n/a n/a
Consolidated environmental data
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Number of employees
No. of employees
6,125
6,185
6,527 6,781
2020
2019
2021 2022
6,756
2023
Frequency of injuries
Per million working hours
0.9
1.3
1.5
1.7
2020
2019
2021 2022
1.3
2023
Novozymes A/S 63Social and governance performance
Social and governance performance
Labor practices & human rights
At December 31, 2023, the total number of
employees was 6,756, compared with 6,781 in
2022.
Innovation
Novozymes is committed to delivering bioinnova-
tion and launched 18 new products in 2023.
In 2023, Novozymes had 917 active patent fami-
lies, compared with 892 in 2022, which comprise
the number of inventions that have active patent
applications or active patents.
Business ethics
In 2023, Novozymes reinforced our commitment
to business integrity. During the year, 98% of
Novozymes’ employees in scope completed busi-
ness integrity training. In 2022, that number was
97%.
As in 2022, there were no breaches of competi-
tion law in 2023.
Customer engagement
Novozymes conducts an annual customer satis-
faction survey and tracks progress on its Net
Promoter Score (NPS), which is assessed on a
-
firms that we continue to have a solid relation-
ship with our customers.
In 2023, the employee absence rate was in line
with 2022 at 2.6%.
Novozymes promotes equal opportunities and
strengthens diversity in the global workplace. At
December 31, 2023, 36% of senior management
(directors and higher) were women compared to
33% in 2022.
Occupational health & safety
The frequency of occupational injuries with
absence decreased to 1.3 per million working
hours in 2023, compared with 1.7 per million
working hours in 2022, corresponding to a
decline from 20 injures in 2022 to 16 injuries in
2023. Our three-year rolling average frequency
of occupational injuries with absence per million
working hours was 1.5 similar to 1.5 in 2022.
Novozymes will continue to drive a safety culture
to ensure that safety behaviors are a part of the
daily routines in our organization.
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 64Social and governance performance
Note 2023 2022
Labor practices & human rights
2.3 6,756 6,781
2.3 39.5 39.2
8.1 2.6 2.6
Inclusion & Diversity
8.2 36 33
Employee safety and well-being
No. - -
8.3 1.3 1.7
8.3 0.3 0.1
8.3 1.5 1.5
Innovation
New products 2.4 18 26
Active patent families 2.4 917 892
Business ethics
Completion of business integrity training for employees in scope 8.4 98 97
Breaches of competition law 8.4 - -
Customer engagement
Customer satisfaction, Net Promoter Score (NPS) 8.5 71 69
Reference to notes without data
Community engagement 8.6 n/a n/a
Responsible sourcing 8.7 n/a n/a
Consolidated social and governance data
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S
Notes
1 Basis of reporting
1.1 Significant changes and events
1.2 Basis of reporting
2 Net operating profit after tax
2.1 Segment
2.2 Revenue
2.3 Employees
2.4 Research and development costs
2.5 Other operating income, net
2.6 Special items
2.7 Tax
2.8 Earnings per share
3 Invested capital
3.1 Intangible assets and impairment test of
goodwill
3.2 Property, plant and equipment
3.3 Leases
3.4 Provisions
3.5 Business acquisitions
3.6 Contingent consideration
4 Net working capital
4.1 Inventories
4.2 Trade receivables and
contract assets
4.3 Other receivables
4.4 Other liabilities
4.5 Assets held for sale
5 Capital structure and financing
5.1 Financial risk factors and risk
management
5.2 Financial income and Financial costs
5.3 Borrowings
5.4 Derivatives – hedge accounting
5.5 Common stock and treasury stock
5.6 Financial assets and liabilities by category
6 Other financial notes
6.1 Management remuneration
6.2 Stock-based payment
6.3 Contingent liabilities and pending
litigation
6.4 Related party transactions
6.5 Non-controlling interests
6.6 Fees to statutory auditors
6.7 Cash flow
6.8 Events after the reporting date
6.9 Group companies
7 Environmental data
7.1 Climate change
7.2 Energy
7.3 Water
7.4 Waste
7.5 Environmental compliance
7.6 Bioethics & biodiversity
7.7 Product stewardship
8 Social and governance data
8.1 Labor practices & human rights
8.2 Inclusion & diversity
8.3 Employee safety & well-being
8.4 Business ethics
8.5 Customer engagement
8.6 Community engagement
8.7 Responsible sourcing
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The Novozymes Report 2023
Novozymes A/S 67Notes
1.1 Significant changes and events
Basis of reporting
The following significant events impacted Accounts and
performance in 2023.
Completion of the combination of
Novozymes and Chr. Hansen
On January 29, 2024, the final regulatory approvals were
obtained and the final registration of the statutory merger
with the Danish Business Authority successfully com-
pleted.
The combination of Novozymes and Chr. Hansen will cre-
ate a leading global biosolutions partner with a broad bio-
logical toolbox and a diversified portfolio in attractive
markets.
Reference is made to Note 2.6, Note 3.5, Note 6.3 and
Note 6.8.
Divestment of part of the global
lactase enzymes business
The European Commission approval of the Combination is
conditional upon the divestment of a part of the combined
company’s global lactase enzyme business.
In 2023, a definitive agreement to sell the lactase enzyme
business was entered into with Kerry Group plc (“Kerry”).
The sale was subject to the European Commission’s
approval of Kerry as the purchaser, which was obtained on
January 26, 2024.
Reference is made to Note 4.5.
Significant
transactions
In 2023, Novozymes divested selected waste-water treat-
ment solutions, which had a positive effect of DKK 88 mil-
lion on other operating income.
Reference is made to Note 2.5 for further details.
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Novozymes A/S 68Notes
1.2 Basis of reporting
Basis of reporting
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Novozymes A/S 69Notes
1.2 Basis of reporting (continued)
Basis of reporting
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Novozymes A/S 70Notes
1.2 Basis of reporting (continued)
Basis of reporting
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Novozymes A/S 71Notes
1.2 Basis of reporting (continued)
Basis of reporting
Accounts and performanceGovernanceOur businessThe big picture
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Novozymes A/S 72Notes
1.2 Basis of reporting (continued)
Basis of reporting
Visit
Accounts and performanceGovernanceOur businessThe big picture
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Novozymes A/S
Note 2
Gross margin down
from 54.6% in 2022 to
Organic sales
growth down from 9% in 2022
to
EBIT margin before spe-
cial items down from
26.4% in 2022 to
Net operating
profit after tax
2.1 Segment
2.2 Revenue
2.3 Employees
2.4 Research and development costs
2.5 Other operating income, net
2.6 Special items
2.7 Tax
2.8 Earnings per share
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Novozymes A/S 74Notes
Net operating profit after tax
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Novozymes A/S 75Notes
Net operating profit after tax
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Novozymes A/S 76Notes
2.2 Revenue (continued)
Net operating profit after tax
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Novozymes A/S 77Notes
Net operating profit after tax
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Novozymes A/S 78Notes
2.3 Employees (continued)
Net operating profit after tax
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Novozymes A/S 79Notes
Net operating profit after tax
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Novozymes A/S 80Notes
Net operating profit after tax
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Novozymes A/S 81Notes
Net operating profit after tax
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Novozymes A/S 82Notes
2.6 Special items (continued)
Net operating profit after tax
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Novozymes A/S 83
2.7 Tax (continued)
Net operating profit after tax
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Novozymes A/S 84Notes
2.7 Tax (continued)
Net operating profit after tax
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Novozymes A/S 85Notes
Accounting policies
2.7 Tax (continued)
Net operating profit after tax
Accounts and performanceGovernanceOur businessThe big picture
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Novozymes A/S
Note 3
Increase in average
invested capital
of DKK million
ROIC before special
items down from 17.9%
in 2022 to
Net investments excl. acquisitions
down from DKK 2,862 million in
2022 to DKK million
Invested
capital
3.1 Intangible assets and impairment test of goodwill
3.2 Property, plant and equipment
3.3 Leases
3.4 Provisions
3.5 Business acquisitions
3.6 Contingent consideration
The Novozymes Report 2023
Accounts and performanceGovernanceOur businessThe big picture
Novozymes A/S 87Notes
Invested capital
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Novozymes A/S 88Notes
3.1 Intangible assets and impairment test of goodwill (continued)
Invested capital
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Novozymes A/S 89Notes
3.1 Intangible assets and impairment test of goodwill (continued)
Invested capital
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Novozymes A/S 90Notes
Invested capital
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Novozymes A/S 91Notes
3.2 Property, plant and equipment (continued)
Invested capital
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Novozymes A/S 92Notes
3.2 Property, plant and equipment
(continued)
Invested capital
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Novozymes A/S 93Notes
3.3 Leases (continued)
Invested capital
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Novozymes A/S 94Notes
Invested capital
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Novozymes A/S 95Notes
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Invested capital
Novozymes A/S 96Notes
Invested capital
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Novozymes A/S 97Notes
3.6 Contingent consideration (continued)
Invested capital
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Novozymes A/S
Note 4
Net working capital
as % of sales up from 24%
in 2022 to
Average net working capital
up from 3,890 DKK million in
2022 to DKK million
Inventories decreased
from DKK 3,803 million
in 2022 to DKK million
Net working
capital
4.1 Inventories
4.2 Trade receivables and contract assets
4.3 Other receivables
4.4 Other liabilities
4.5 Assets held for sale
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Novozymes A/S 99Notes
Net working capital
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Novozymes A/S 100Notes
Net working capital
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Net working capital
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Note 5
Capital structure
and financing
5.1 Financial risk factors and risk management
5.2 Financial income and Financial costs
5.3 Borrowings
5.4 Derivatives – hedge accounting
5.5 Common stock and treasury stock
5.6 Financial assets and liabilities by category
NIBD/EBITDA increased from
1.0x in 2022 to
Return on equity down
from 28.6% in 2022 to
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Capital structure and financing
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5.1 Financial risk factors and risk management (continued)
Capital structure and financing
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Capital structure and financing
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Capital structure and financing
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5.4 Derivatives – hedge accounting (continued)
Capital structure and financing
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Capital structure and financing
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Note 6
6.1 Management remuneration
6.2 Stock-based payment
6.3 Contingent liabilities and pending litigation
6.4 Related party transactions
6.5 Non-controlling interests
6.6 Fees to statutory auditors
6.7 Cash flow
6.8 Events after the reporting date
6.9 Group companies
Grant date fair value of
options granted in 2023
in DKK million
Realized Group audit fee
ratio during 2023
No. of Danish and
foreign subsidiaries
in the Group
Other
financial notes
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Other financial notes
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Other financial notes
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6.2 Stock-based payment (continued)
Other financial notes
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6.2 Stock-based payment (continued)
Other financial notes
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6.2 Stock-based payment (continued)
Other financial notes
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Other financial notes
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Other financial notes
6.4 Related party transactions (continued)
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Other financial notes
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6.7 Cash flow (continued)
Other financial notes
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Other financial notes
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6.9 Group companies (continued)
Other financial notes
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Note 7
7.1 Climate change
7.2 Energy
7.3 Water
7.4 Waste
7.5 Environmental compliance
7.6 Bioethics & biodiversity
7.7 Product stewardship
Water withdrawal decreased
relative to 2022 by
Renewable electricity share
Biomass recovered:
on par with 2022
Environmental
data
Mandatory statement on Corporate Social Responsibility
The Notes on Environmental data and Social and Governance data
form the reporting required under section 99a of the Danish Financial
Statements Act.
Topic Reference Pages
Business model Our business p. 15
Content of commitments, management approach, targets, data,
initiatives, and related progress on corporate social responsibility issues:
Climate and environment Notes on Environmental data pp. 124-135
Social matters
Notes on Social and Governance data pp. 136-148
Human rights
Note on Labor practices and Human rights pp. 137-138
Anti-corruption and bribery
Note on Business Ethics pp. 143-144
The Novozymes Report 2023
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Novozymes A/S 125Notes
Environmental data
At Novozymes, we are fully committed to accele-
rate towards a climate-neutral society. We
actively invest to lower the carbon footprint of
our operations and deliver low-carbon solutions
to our customers. Our solutions play a key role in
addressing many of the climate-related chal-
lenges facing the world.
Our approach
Novozymes is committed to decarbonizing in line
with a science-based pathway and to reaching
net-zero greenhouse gas (GHG) emissions across
our operations and value chain by 2050.
-
sions from our operations (scopes 1+2) and a
by 2030 from a 2018 baseline. In addition, to
deliver on our long-term ambition, we work with
milestone targets. Thus, by 2025, we aim to
from a 2018 baseline.
In 2022, the Science Based Targets initiative
(SBTi) re-validated our 2030 emissions reduction
targets and our 2025 renewable electricity tar-
gets. Novozymes was among the first companies
in the world to receive validation of our net-zero
targets by SBTi.
Further information on our science-based targets
is available in the Targets section of this report.
We are committed to improve our climate data
quality and transparency. We conduct peer-
reviewed cradle-to-grave life cycle assessment
(LCA) studies to document the environmental
impact of our solutions. These studies are used
to keep our stakeholders informed and to
demonstrate to our customers ways to reduce
their GHG emissions and leverage the positive
impact on climate change that Novozymes’ bio-
solutions can enable. Our published LCAs are
available on our website. We also use this data to
help our customers’ improve their climate trans-
parency by providing product carbon footprint
data on request.
We disclose our climate change impacts through
CDP every year. In 2023, Novozymes was recog-
nized in CDP’s Climate Change A List (leadership
ranking) for our commitment to environmental
transparency and climate action.
2023 summary
In 2023, the GHG emissions from our operations
tonnes from 161,000 tonnes in 2022. This reduc-
tion was mainly driven by changes in product mix
towards less resource consuming products,
slightly lower production volumes, and imple-
mentation of efficiency-enhancing projects.
We have reduced our absolute emissions from
baseline and are thus on track to achieving our
2025 target.
7.1 Climate change
CO-equivalent emissions
1,000 tonnes 2023 2022
Natural gas 35 40
Gas oil, light fuel oil, and diesel oil 4 4
HCFCs 1 2
Scope 1 40 46
District heat 1 1
Electricity 42 50
Steam 60 64
Scope 2 (market-based) 103 115
Scopes 1 and 2, total
ESG
143 161
Market-based vs. location-based scope 2 emissions
1,000 tonnes 2023 2022
Scope 2 GHG emissions (market-based) 103 115
Scope 2 GHG emissions (location-based) 291 332
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Five-yearoperational emissions (CO
2-eqv.)
1,000 tonnes
Scope 1 Scope 2
2021
2020
2019
2022 2023
161
330
234
218
143
Novozymes A/S 126Notes
Reported GHG (greenhouse gas) emissions
comprise scope 1 and scope 2.
GHG from internally generated energy (scope
1) is calculated based on the amount of fuel
consumed using local emission factors.
GHG from externally generated energy (scope
2) is reported in accordance with both the
market-based and the location-based meth-
ods, as defined by the Greenhouse Gas
Protocol. The marked-based method assumes
zero GHG emissions from the sourced
renewable energy and uses CO
2
-eqv. factors
from the International Energy Agency (IEA)
for non-renewable energy. The location-based
method uses third party validated CO
2
-eqv.
factors or CO
2
-eqv. factors from IEA.
The environmental impact potentials for
global warming and ozone layer depletion are
calculated on the basis of data published by
the U.S. Environmental Protection Agency
(EPA) and the Montreal Protocol published by
the United Nations Environment Programme
(UNEP).
Accounting policies
Environmental data
7.1 Climate change (continued)
In 2023, we joined a new innovative consortium
together with the Novo Nordisk Foundation, the
Bill & Melinda Gates Foundation, and other rele-
vant players to convert carbon dioxide into protein
for human consumption. This is a long-term initia-
tive which aims to address the rising global chal-
lenges with food security and GHG emissions from
agriculture. The aim is convert carbon dioxide into
acetate, which will replace sugar in the fermenta-
tion process used to produce proteins for food.
We have also partnered with ALGIECEL, a com-
pany focused on implementing microalgae-based
carbon capture and utilization. Our Kalundborg
site is suitable for demonstrating carbon capture
by algae processes with nutrient and carbon
dioxide streams available. During the demonstra-
tion, we will explore whether ALGIECEL’s tech-
nology can be combined with the carbon capture
technology co-developed by Novozymes and
Saipem.
Moving forward, we will continue to execute on
our transition plan to accelerate towards a
climate neutral society. We will invest in renewa-
ble energy, production efficiency and energy
recovery opportunities. Additionally, we will
expand our collaboration with suppliers and
work towards meaningful and actionable engage-
ments to decarbonize our common value chain.
Our leaders will continue taking the global stage
and advocating for change, and collaborating
with our customers, policymakers, and partners
to drive market transformation.
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Novozymes A/S 127Notes
Novozymes is committed to a net-zero future,
and energy is an integral part of achieving this
commitment. For its operations, Novozymes
relies on electricity, heat, and steam. Many of our
biosolutions enable downstream users to save
energy in certain applications compared with
conventional methods, such as in detergents and
textile applications.
Our approach
We manage energy in our operations through a
two-pronged approach: increasing the sourcing of
renewable energy and reducing energy consump-
tion in production by implementing optimization
or energy-saving projects. Relevant targets drive
our performance in these areas.
All energy efficiency and renewable energy sourc-
ing efforts are managed and monitored by our
Operations, Supply and Quality function. In addi-
tion to internal energy savings, Novozymes
focuses on recovering energy from waste to use in
operations and to distribute to our local commu-
nities.
able electricity by 2025. This target was re-
validated by the Science Based Targets initiative
(SBTi) in 2022 and is in accordance with the best
practice guidance defined by the RE100 initiative.
We take a holistic approach in our end-to-end
sourcing process, ensuring high quality and
impactful projects for local communities, and we
strive to purchase from the best electricity pro-
jects available.
Further information on our science-based targets
is available in the Targets section of this report.
2023 summary
In 2023, our organic sales growth was recorded at
compared to 2022 due to slightly lower produc-
tion volumes, changes in product mix towards
less resource consuming products, and the imple-
mentation of energy saving projects.
In 2023, projects driving process optimization and
energy efficiency undertaken at our sites resulted
in energy savings of approximately 56,000 GJ.
The biggest drivers of this include heat recovery
and installation of a heat pump at our site in
China as well as energy savings from the reverse
osmosis project in Kalundborg.
Energy consumption by primary source
2023 2022
Natural gas 678 762
Biogas 30 30
Gas oil, light fuel oil and diesel oil 49 39
Internally generated energy, total 757 831
Electricity – conventional 392 506
Electricity – renewable 2,070 2,264
District heat - conventional 57 56
District heat - renewable 134 141
Steam 986 1,042
Externally purchased energy, total 3,639 4,009
Energy consumption, total
ESG
4,396 4,840
Energy production from waste 15 66
Environmental data
7.2 Energy
We also conducted smaller initiatives. For
example, in Denmark, we initiated the ‘Freezer
Challenge’ in collaboration with the NGO
MyGreenLabs where lab teams were invited to
come up with ideas to reduce the environmental
footprint of cold storage units while maintaining
the integrity of the samples stored in them.
Five-year energy consumption
4,574
4,475
4,699 4,840
1,000 GJ
2021
2020
2019
2022 2023
4,396
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Renewable electricity sources 2023
(2022)
Wind power
62% (42%)
Solar
19% (20%)
Hydro
0% (3%)
Biomass
19% (35%)
Novozymes A/S 128Notes
Energy consumption includes quantities con-
sumed both in the production process and in
other areas.
Internally generated energy is measured as
fuel consumption converted to energy based
on the lower of combustion value and weight
by volume, except in the U.S., where legal
requirements for reporting carbon dioxide
state that the higher of combustion value and
weight by volume is to be applied. Fuel con-
sumption comprises all types of fuel used to
produce electricity, heat and steam on site
and is converted to energy using factors sup-
plied by utility providers or local authorities.
Fuel for transportation purposes is not
included.
Externally generated energy is the input to
Novozymes of externally generated elec-
tricity, heat and steam.
Energy produced from waste or wastewater is
renewable and corresponds to the total
energy (heat, electricity or steam) produced
by an internal or external utility provider. An
example is energy produced from biomass
waste or biogas.
Reported quantities are based on meter read-
ings, with the exception of steam, which may
be subject to calculation.
The renewable energy percentage is calcu-
lated by dividing renewable energy consumed
by total energy consumption. Renewable
energy used at Novozymes sites comprises
energy generated from natural processes and
continuously replenished. Sources include
solar, wind and hydropower-based electricity
and energy from biogas and biomass.
District heat - renewable is primarily gene-
rated from biomass.
Accounting policies
Environmental data
7.2 Energy (continued)
Improvements included adjusting temperatures,
storing only relevant samples and turning off
empty freezers.
In 2023, the share of renewables in our total
in 2022. Electricity accounts for more than half of
-
tricity came from renewable sources, compared to
improvement was our site in Blair, U.S., which
began to procure green electricity in 2023, con-
verting approximately 145,000 GJ from conven-
tional to renewable electricity.
In some of our sites we are still dependent on
fossil-based steam and natural gas as a fuel
source. We are exploring greener alternatives
such as flex burners, electric boilers, and heat
pumps to replace them. At our site Hongda,
China, we now produce steam from a new high
temperature heat pump technology which
reduces the consumption of fossil-based heat at
the site. We have also identified additional
steam-saving projects in China that will be imple-
mented in the coming years.
Moving forward, we will seek to implement our
strong portfolio of projects to further invest in
renewable electricity, to find cleaner alternatives
for natural gas and coal-based steam and to save
and recover energy.
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Five-year water withdrawal by primary source
1,000 m
³
Drinking water Industrial waterSteam
2021
2020
2019
2022 2023
7,845
7,998
8,538
8,720
7,793
Novozymes A/S 129Notes
Water stewardship is essential for Novozymes.
The production, development, and processing of
our solutions depends on the availability of
water. We use water as a coolant, solvent, clean-
ing agent and as a component of our final prod-
ucts. Additionally, many of the raw materials
required in our operations are agriculture-based
and depend on water for production. Many of our
biosolutions in textile, brewing, household care,
and grain processing enable customers to reduce
their water consumption compared with conven-
tional methods or prevent water pollution by
reducing dependence on hazardous chemicals.
Our approach
Our approach towards water stewardship is driven
by science and our ambition to manage water in
balance with local conditions at all our sites. We
are committed to achieving overall water security
by preserving water as a resource, addressing
water challenges through biosolutions, and driving
collective action with communities.
For our operations, we seek to reduce depen-
dence on freshwater by implementing recycling
and water efficiency projects, while ensuring
compliance with local regulations. All our pro-
duction sites have context-based water manage-
ment plans drawn up based on site-specific risks
and opportunities. These plans were developed
in partnership with water experts and contain
actions to improve the health of the water basins
near our production sites and address site-
specific challenges including scarcity, quality and
changing regulations. Our wastewater is biologi-
cally treated internally or externally before being
discharged or before being recycled after sec-
ondary filtration. We aim to improve freshwater
2035 from a 2021 baseline.
At community level, we drive collective action with
communities and organizations within our produc-
tion basins. Our actions address shared water
challenges such as flooding, impaired ecosystem
services, water quality and scarcity, through col-
lective action on Water, Sanitization and Hygiene
(WASH), nature restoration, and watershed resto-
ration. In addition, in basins close to our produc-
tion sites where WASH is a challenge, we aim to
restore 10 billion liters of water by 2025 and 30
billion liters by 2030 from a 2021 baseline.
Water withdrawal by primary source
1,000 m 2023 2022
Drinking water 5,177 5,788
Industrial water 2,267 2,554
Steam 349 378
Water withdrawal, total
ESG
7,793 8,720
Environmental data
7.3 Water
2023 summary
compared with 2022 and wastewater discharge
drivers of the decrease were changes in product
mix towards less resource consuming products,
slightly lower production volumes, and imple-
mentation of efficiency projects.
Our water withdrawal and discharge were also
impacted by multiple water efficiency projects
across sites. In 2023, we implemented three
water recycling and efficiency projects which
delivered water savings of approximately 86,000
mnanofiltration and reverse
osmosis project in Kalundborg for water recycling
and two water efficiency projects in Franklinton,
U.S., and Tianjin, China. The reverse osmosis
equipment installed in Kalundborg has a saving
potential estimated at 370,000 m-
ally and will also save energy and improve yields.
In Franklinton, we announced a reverse osmosis
project which seeks to upgrade our wastewater
discharge process while addressing evolving re-
gulatory requirements.
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Five-year wastewater by treatment method
1,000 m
³
2021
2020
2019
2022 2023
Novozymes-treated to external water recipient
Novozymes-treated to external treatment
Novozymes-treated to irrigation
Untreated to external treatment
6,766
6,295
6,147
6,471
6,610
Novozymes A/S 130
Notes
Water withdrawal refers to the sum of all
water drawn into the boundaries of
Novozymes from all sources. Water/freshwa-
ter includes drinking water, industrial water,
and externally supplied steam.
Drinking water is water of drinking water
quality. Industrial water is not of drinking
water quality, but is suitable for certain
industrial processes, for example for use in
cooling towers. Industrial water may come
from lakes or wells.
The reported quantities are stated based on
the metered intake of water to Novozymes
and include quantities withdrawn both in the
production process and in other areas. The
reported quantities of steam are converted to
volumes of running water and are therefore
subject to calculation.
Wastewater is measured as the volume dis-
charged by Novozymes or calculated based
on water withdrawal.
Accounting policies
Wastewater discharged
1,000 2023 2022
Wastewater to irrigation 634 825
Wastewater to surface water or treatment 5,661 5,941
Wastewater discharged, total
ESG
6,295 6,766
Environmental data
7.3 Water (continued)
With projects like these, we have moved closer to
meeting our target of improving freshwater with-
In the vicinity of our site in Patalganga, India,
where WASH is a challenge, we have been work-
ing with the Novozymes Water Opulence project
since 2020 to improve water availability and
address local water basin risks. Among the acti-
vities, we build together loose boulder struc-
tures, gabion bunds, check dams, and recharge
trenches. Since its start, the project has bene-
fited approximately 3,100 people across five vil-
lages. In 2023, we continued restoring ground
water in the region, and we are on track to meet
our target of restoring 10 billion liters of water by
2025 in areas where WASH is a challenge.
In light of our ambition to manage water in balance
with local conditions at all our sites, we carried out
a pilot internally of the science-based targets for
water methodology at our Hongda site. This
included having a dialogue with our key Chinese
suppliers on water management.
Here, we have integrated the actual situation of
water resource management in the Taihu basin
and have set site level targets for water with-
drawal which are in alignment with local basin
conditions.
Moving forward, we will continue to have site
specific initiatives and aim for active engagement
to identify hotspots, develop water efficiency
projects, and reduce our dependence on fresh-
water.
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Novozymes A/S 131Notes
Novozymes is committed to managing resources
and waste in a circular manner. In our opera-
tions, we take a holistic approach towards circu-
larity, by improving the recyclability of our pack-
aging and by implementing site-specific
initiatives to reduce and recover waste. In addi-
tion, our biosolutions enable our customers to
adopt practices that help minimize waste from
their operations. For example, our grain and ve-
getable oil processing biosolutions enable cus-
tomers to optimize resource utilization by unlock-
ing additional starch, protein, and oils from
feedstock.
Our approach
Responsible packaging and waste management
at Novozymes is a key element in reducing the
environmental impact of our operations. We
remain committed to ensuring zero waste to
landfill from our operations by 2030. In addi-
tion, we are committed to having three key circu-
lar projects successfully implemented by 2030.
To deliver on these long-term ambitions, we
work with milestone targets. By 2025, we aim to
have two key circular projects in pilot stage with
demonstrated benefit.
Guided by our aim to achieve zero waste to land-
fill, we have a site-specific approach to waste
management with clearly outlined risks, opportu-
nities, and prioritized actions. Regulations on
waste management are complex and vary by
region. To ensure compliance, we actively work
with local experts and service providers to
explore localized opportunities to manage waste.
We are also committed to minimizing the impact of
the waste generated by our packaging materials.
We strive to use less virgin plastic wherever possi-
ble. We have clear processes to assess new materi-
als on specific recyclability and reusability criteria
before they are approved for enzyme packaging.
2023 summary
In 2023, we continued to work towards our target
to have zero waste to landfill from our operations
by 2030. The total recycling and composting rate
was sent to landfill or incineration without
energy recovery. The total waste decreased to
544,000 tonnes in 2023 from 559,300 tonnes in
2022. The main driver for this change was the
slightly reduced production volumes.
Our waste is composed of biomass waste and
non-biomass waste, and a small fraction of this
non-biomass waste is treated as hazardous
waste.
Environmental data
7.4 Waste
Biomass waste
Most of the waste generated during the produc-
tion of our biosolutions is biomass. It has essen-
tial nutrients such as nitrogen and phosphorus,
making it ideal for supporting agricultural activi-
in a circular manner, just as in 2022.
Our biomass waste is utilized as a raw material in
fertilizer production for agriculture with or with-
out prior biogas production. In Blair, U.S., we
launched a disposal solution that will enable us to
maintain our performance by disposing it towards
land applications in spite of projected higher
waste volumes due to ongoing plant expansion.
The weight of the biomass upon exit from our
facilities varies depending on the site and the
biosolutions produced there. To facilitate trans-
portation and application of biomass waste, we
adjust its water content in accordance with local
the total dry matter content for biomass used in
agriculture was 61,000 tonnes.
Moving forward, we will continue to focus on cir-
cular management of all of our biomass.
Biomass wet (actual) Biomass dry matter (excl. water)
Biomass
1,000 tonnes 2023 2022 2023 2022
Used in agriculture 529 539 61 53
Landfill - - - -
Biomass, total
ESG
529 539 61 53
Total waste by disposal method 2023
(2022)
Used in agriculture
97.3% (96.4%)
Recycling
2.0% (2.3%)
Incineration with
energy recovery
0.4% (0.5%)
Landfill and incineration
without energy recovery
0.3% (0.8%)
Accounts and performanceGovernanceOur businessThe big picture
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Novozymes A/S 132Notes
Biomass is measured or calculated based on
volume or weight produced. At each site, bio-
mass is produced with a different dry matter to
water ratio. The quantity of biomass dry matter
is calculated based on spot checks of the dry
matter content present in the wet biomass.
Non-biomass waste is the registered volume of
waste broken down into hazardous and non-
hazardous waste, and by disposal method. The
amount recycled is the quantity recycled inter-
nally or sent to an external service provider for
recycling.
Accounting policies
Environmental data
7.4 Waste (continued)
Across regions, we implemented various initia-
tives in waste management. At one of our North
American sites, cross-functional collaboration
has led to increased recycling and eliminated the
majority of the waste generated locally, which
previously was sent to landfills.
At our sites in Denmark, in response to regula-
tory requirements, household-like waste (from
canteens, coffee stations and workspaces) is now
sorted in up to 10 fractions.
At our site in TEDA, China, we have reduced
waste by quickly connecting departments digi-
tally to enable them to exchange furniture, IT
accessories, printers, etc. Moving forward, this
initiative will be rolled out to other sites in China.
Circular Packaging
In 2023, we took action drawing from our previously
developed circular packaging plans to make our key
packaging recyclable, reusable or compostable. We
have identified and started working on two strategic
circular projects, and are on track to have both pro-
jects in pilots with demonstrated benefit by 2025.
Waste
1,000 tonnes 2023 2022
Biomass waste, total 529.0 538.8
Nonhazardous waste
Incineration 1.9 2.2
Landfill 1.5 3.6
Recycling 9.5 11.4
Nonhazardous waste, total 12.9 17.2
Hazardous waste
Incineration 0.5 1.4
Landfill - 0.2
Recycling 1.6 1.7
Hazardous waste, total 2.1 3.3
Waste, total
ESG
544.0 559.3
Non-biomass waste
Novozymes’ total waste and is further classified
into hazardous and nonhazardous waste. In
2023, the recycling rate of non-biomass waste
or incineration.
To further reduce, recycle, reuse, and recover the
waste generated in 2023, we have undertaken
various initiatives such as process improvements,
resource optimization, process planning and
waste sorting in order to optimize waste manage-
ment. For example, at our site in Saskatoon,
Canada, we use sterilized peat as a substrate to
grow our microbes used in production processes.
However, bags that are damaged are no longer
considered sterile and were previously discarded.
In 2023, we started segregating damaged peat
bags and re-sterilizing them, which has enabled
us to recover waste and turn it back into raw
material.
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Novozymes A/S 133
Notes
Compliance with environmental norms and regula-
tions is a high priority for Novozymes to maintain
business continuity and day-to-day running of
operations. Novozymes is committed to complying
with all environmental regulations and maintain-
ing high standards of environmental management
across its operations, including pollution preven-
tion, resource conservation and waste reduction.
We take the well-being of the communities we
operate in seriously. We do our best to implement
meaningful solutions effectively so as to address
any complaints we may receive from our neigh-
bors.
Our approach
Our commitment to environmental compliance is
outlined in our Sustainability Policy. All activi-
ties to ensure environmental compliance are
anchored in the Quality, Environment & Safety
function. Novozymes’ main production sites are
certified to the ISO14001 Environmental
Management System standard. Our management
system is based on this standard and is applied
to most of our operations.
Further details on ISO-certified companies can
be found in Note 6.9 Group Companies.
Environmental incidents and neighbor com-
plaints are recorded in CAPTURE, our global inci-
dent management system. This system enables
us to implement suitable remedial action to cor-
rect and prevent re-occurrence in the future. We
strive to minimize the number of non-compliance
and neighbor complaints.
A total of 23 environmental breaches of regula-
tory limits were registered across our facilities in
2023, compared with 21 in 2022. Most of them
were related to wastewater discharge and bio-
mass processing, handling and distribution. None
resulted in environmental fines. Plans for preven-
tive action for these incidents have been agreed
with the relevant authorities.
Novozymes received 14 neighbor complaints in
2023, compared to 23 received in 2022. Most of
them pertained to noise and light related to con-
struction activities. The odor issues reported in
2022 have been resolved.
To support the growth of our human health busi-
ness, we purchased two small production facili-
ties in India at the end of 2021. Some of their
environmental permits and consents were incom-
plete. We have begun the lengthy process of
Breaches of environmental regulatory limits
are measured as the number of incidents in
the reporting year considered not to be in
conformity with environmental permits or
requirements under environmental law.
Breaches related to annual control measure-
ments of spills reported in previous years are
not included, as they are not indicative of
performance during the reporting year.
Neighbor complaints refer to the number of
registered environmental complaints, prima-
rily odor and noise related.
Accounting policies
Environmental data
7.5 Environmental compliance
amending these permits to align with production
expectations, and implementing the actions
needed to fulfil current and future environmental
conditions. For example, in 2023, we broke
ground on a new wastewater treatment facility,
which is expected to be operational in 2024.
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 134Notes
Novozymes is on a mission to find biological solu-
tions that enable better lives in a growing world.
The foundation of our business is based on ana-
lyzing bacteria and fungi at molecular level to
create biosolutions that can help solve some of
the world’s biggest challenges, focusing on cli-
mate, food systems, and health. We have inter-
faces with nature and biodiversity across our
business from research and development to
operations and product use.
Our approach
Novozymes’ approach to biodiversity and nature
is guided by the principles of the United Nations’
Convention on Biological Diversity. We have
defined systems and processes, housed by an
internal committee, that ensure compliance with
local and global regulations, guidelines, and pro-
tocols.
Together with our stakeholders, we work to ensure
that guidance and requirements from regulatory
authorities on biotech innovation is duly followed.
We adhere to the globally recognized principles on
the utilization of genetic resources. Our scientists
are committed to using scientifically sound tools
and developing solutions that are safe for
humans, animals, and the environment.
As the world’s leading biotech powerhouse, we
are fully aware of our responsibility to see
beyond the possibilities of our solutions and
understand the broader impact we may have on
nature and biodiversity as a company. This is why
we support a science-based approach and follow
developments in this area to take action on
nature and biodiversity. We regularly assess how
to incorporate best practices into our solutions,
operations, and reporting through constant dia-
logue with relevant business groups and UN
organizations.
2023 summary
In 2023, we continued to closely monitor and par-
ticipate in ongoing discussions and dialogues on
nature and biodiversity loss across the globe. This
includes discussions around the post-2020 Global
Biodiversity Framework, a global vision and
roadmap to halt and reverse biodiversity loss and
live in harmony with nature. This framework was
adopted by global leaders at the 2022 United
Nations Biodiversity Conference
As an active member of multilateral organiza-
tions, we follow developments of new methodolo-
gies for companies to monitor and establish tar-
gets to prevent and reverse nature and
biodiversity loss. For example, we continued to
Environmental data
7.6 Bioethics & biodiversity
be a part of the technical dialogues on the chang-
ing reporting landscape through industry and
business groups such as the International
Chamber of Commerce.
We established a cross functional working group
to understand how these developments could
impact the way we develop, produce, and market
our biosolutions. The group includes representa-
tives from Operations, Public Affairs, Research &
Development, and Sustainability, and it reports
to the Corporate Sustainability Committee when
relevant.
As a responsible producer, we take action in our
efforts to restore water and biodiversity. In the
TEDA industrial park, we are making an innova-
tive attempt to improve overall water steward-
ship by fostering collaboration across companies
to increase the use of recycled water within the
park.
Moving forward, we will explore additional ways
to support the implementation of the post-2020
Global Biodiversity Framework.
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 135Notes
At Novozymes, we ensure our biosolutions are
produced responsibly and that they are safe for
humans, animals, and the environment. Product
stewardship is a priority for our business given
that many of our biosolutions serve as ingredi-
ents in consumer products such as detergents or
are used to manufacture consumer products
such as food, textiles, paper, dietary supple-
ments, and cosmetics.
Our approach
Product stewardship is an integral part of
Novozymes’ Quality Management System, and our
approach is outlined in our Quality and Product
Safety Policy.
Procedures ensuring product stewardship for cus-
tomers and end-users are enforced globally and
audited by an independent external body. We col-
laborate with our customers, suppliers, and vari-
ous trade associations to drive product safety and
stewardship.
Novozymes has internal targets on product ste-
wardship that guide our progress. We evaluate
performance in the areas of product safety and
hazardous substance management and constantly
strive to reduce risks for humans, animals, and the
environment.
For example, we seek to improve our products to
ensure enzymes release a minimum amount of
dust and prevent allergies. We also educate our
employees and customers on the safe handling of
our products using multiple communication chan-
nels, such as safety data sheets, videos, posters,
brochures, and safety catalogues.
Wherever feasible, we substitute hazardous sub-
stances in our operations with safer alternatives.
Through a rigorous and comprehensive cross-
functional process, new and existing chemicals
are screened annually for human health and envi-
ronmental safety aspects, followed by risk and
feasibility assessments to determine candidates
for potential phase-out from our products.
To make it easier for our customers to ensure com-
pliance of their products, we have a structured
approach to key topics such as product informa-
tion, labeling, and traceability. Novozymes’ pro-
ducts comply with regulatory requirements such
as REACH (Registration, Evaluation, Authorization
and Restriction of Chemicals), one of the most
advanced chemical legislations in the world, and
food legislations such as FIAP (Food Improvement
Agents Package).
2023 summary
In 2023, we completed the implementation of our
new Regulatory Information Management System,
allowing us to retire legacy tools for product ste-
wardship activities across Regulatory Affairs. It
means that documents, communication, and regis-
tration activities are now digitally linked, enabling
more transparency and smoother communication
on regulatory compliance internally.
To address increasing societal concerns about
Endocrine Disruptors (EDs), we decided to phase
out both EDs and potential EDs from our pro-
ducts and have begun to screen relevant materials.
We continued to expand the list of our OEKO-
TEX® certified products, which is key for our tex-
tile and leather customers to bring certified
greener products to the market. It requires prov-
ing the absence of unwanted chemicals such as
carcinogens, volatile organic compounds, heavy
metals, organotins, and flame retardants.
Chemical legislations similar to REACH are being
implemented in other countries. In 2023,
Novozymes successfully registered under such
new legislation in Türkiye. In response to new
regulations in South Korea, Novozymes estab-
lished a new process with Only Representatives
(OR) that simplifies the regulatory obligations for
customers. Novozymes is also a leading member
of the South Korean Enzyme REACH Council,
contributing to the discussion with authorities
based on our own experience.
Novozymes continued to lead discussions on
enzyme safety implementation across the
enzyme industry and customers’ industries
through various trade associations globally. As
an outcome of these discussions, the association
of enzyme producers, AMFEP (Association of
Manufacturers Fermentation Enzyme Products),
launched an updated guideline on safe handling
of industrial enzyme preparations as well as a
specific guideline for the safe handling of
enzymes within the feed industry. AMFEP also
launched a state-of-the-art module for support-
ing and managing the development of product
claims and hazardous substance management.
In addition, Novozymes was part of the develop-
ment of a new guideline on how to conduct risk
assessments of enzyme-containing products for
professional cleaning. It is being developed col-
laboratively by AMFEP, AISE (European deter-
gent industry), ACI (American Cleaning Institute),
and HCPA (Household & Commercial Product
Association).
Environmental data
7.7 Product stewardship
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S
The Novozymes Report 2023
Accounts and performanceGovernanceOur businessThe big picture
Note 8
8.1 Labor practices & human rights
8.2 Inclusion & diversity
8.3 Employee safety & well-being
8.4 Business ethics
8.5 Customer engagement
8.6 Community engagement
8.7 Responsible sourcing
Completion rate of business
integrity training for employees
Decrease from 1.7 in 2022 in frequency
of occupational injuries with absence
(per million working hours) to
Women in senior management up
Social and
governance data
Mandatory statement on Corporate Social Responsibility
The Notes on Environmental data and Social and Governance data
form the reporting required under section 99a of the Danish Financial
Statements Act.
Topic Reference Pages
Business model Our business p. 15
Content of commitments, management approach, targets, data,
initiatives, and related progress on corporate social responsibility issues:
Climate and environment
Notes on Environmental data pp. 124-135
Social matters Notes on Social and Governance data pp. 136-148
Human rights
Note on Labor practices and Human rights pp. 137-138
Anti-corruption and bribery
Note on Business Ethics pp. 143-144
Novozymes A/S 137Notes
At Novozymes, we take responsibility to ensure
we follow proper labor practices and that human
rights are respected both within our organization
and throughout our value chain.
Our approach
We have adopted a common management
approach and reporting structure for labor prac-
tices and human rights. Our People and
Organization (P&O) function, together with lead-
ers across Novozymes, are responsible for ensur-
ing equal rights for all employees.
We are committed to ensuring equal opportuni-
ties and avoiding discrimination in our global
organization based on age, sex, gender identity,
race, national origin, ethnicity, disability, educa-
tion, sexual orientation, and religious beliefs. We
recognize and respect our workers’ rights to form
and join unions and associations and to bargain
collectively.
Novozymes respects human rights as defined by
the U.N. Guiding Principles on Business and
Human Rights and has implemented them in our
operational policies and procedures.
We respect the International Bill of Human
Rights, the International Labor Organization’s
Declaration on Fundamental Principles and
Rights at Work, and, since 2001, we have been a
signatory to the United Nations Global Compact.
Novozymes is also a signatory to the U.N.
Women’s Empowerment Principles. We publish
an annual statement under the U.K. Modern
Slavery Act.
We conduct focused human rights impact assess-
ments to identify and assess human rights risks
and impacts in our business and supplier base.
2023 summary
Labor practices
In 2023, the rate of employee turnover was
It continues to be higher than pre-pandemic
levels, likely due to new leave regulations and
behavioral change. The rate of absence has been
broken down in the table below into grouped job
categories.
8.1 Labor practices & human rights
Social and governance data
Employee statistics 2023 2022
Rate of employee turnover - retirement 0.8 1.0
Rate of employee turnover - dismissal 2.7 2.1
Rate of employee turnover - voluntary 7.1 8.3
Rate of employee turnover, total 10.6 11.4
Rate of absence
Senior management, management, professional and
administrative 1.7 1.7
Skilled workers, laboratory technicians, other technicians, and
process operators 4.0 4.1
All employees
ESG
2.6 2.6
Other employee statistics
Average age years 42.4 41.9
Average seniority years 9.5 9.2
Number of expatriates no. 24 18
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 138Notes
Absence is defined as time lost due to an
employee’s illness, including leave, and occu-
pational injuries and diseases.
The rate of absence is calculated as the num-
ber of registered days of absence as a per-
centage of the total number of normal work-
ing days in one year, less vacation and public
holidays.
The rate of employee turnover is calculated
as employee turnover divided by the average
number of permanent employees. Employee
turnover is measured as the number of
permanent employees leaving the Group dur-
ing the preceding year excluding employees
at divested entities transferred to the acquir-
ing company.
Average age and seniority are calculated as
the sum of the employees’ aggregate age/
seniority in whole years at the reporting date
divided by the number of employees.
Expatriation refers to Novozymes employees
temporarily reassigned within Novozymes
from the country of original employment for
periods of more than six months.
Accounting policies
8.1 Labor practices & human rights (continued)
Social and governance data
Human rights
As a responsible corporate citizen, we recognize
our role in seeking to prevent or mitigate adverse
human rights impacts, not just in operations but
also through our business relationships.
In 2023, we launched a new code of conduct for
our business partners in the supply chain, which
enables us to communicate our expectations on
different aspects of sustainability, human rights,
and inclusion to a wider audience than in the
past. It will be further rolled out in 2024.
In 2023, we conducted a Human Rights Impact
Assessments focused on global policies and
governance. We identified no systematic human
rights violations within our global operations. We
also followed up on recommendations from pre-
vious years, and those have either been
addressed or are no longer relevant.
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 139Notes
At Novozymes, we foster a collaborative atmos-
phere, bringing together individuals with varied
and complementary skills. Our employees
embrace shared values to form a vibrant culture.
Nurturing an inclusive and diverse organization
where employees thrive is the foundation from
which we continue to bring the power of biosolu-
tions to the world.
8.2 Inclusion & diversity
Social and governance data
Gender diversity 2023
2022
Women Men Women Men
In senior management
ESG
% 36 64 33 67
In management % 41 59 40 60
At professional levels % 46 54 45 55
Across all professionals % 43 57 43 57
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 140Notes
Gender diversity in senior management
measures the percentage of women and men
in director positions or higher (i.e. director,
vice president or executive vice president).
Gender diversity in management measures the
percentage of women and men in middle man-
agement and specialist manager positions.
Gender diversity at professional levels meas-
ures the percentage of women and men in
positions typically requiring an academic
background or team lead positions.
Gender diversity across all professional levels
measures the percentage of women and men
across professional, manager, and senior
leadership levels.
All of the above classifications are based on
internal job categories.
Accounting policies
8.2 Inclusion & diversity (continued)
Social and governance data
In 2023, Novozymes signed up to the United
Nations Foundation’s “Five for 5 initiative”, a
five-year program to implement specific policies
that advance gender equality in workplaces.
We conducted different regional initiatives to
promote a diverse and inclusive workforce,
covering hiring, parental leave, parent care leave,
and diversity trainings. For example, across Asia
Pacific, we initiated local cultural festivals to cre-
ate opportunities for employees to learn from,
respect, and appreciate each other’s countries in
nurturing an inclusive regional workforce. The
festivals included trainings on cultural awareness
and unconscious bias along with hosting Country
Cultural Shows.
In the Middle East and India, the focus on gender
equity included a mentoring program focusing on
leadership development for female employees.
We hosted educational events, especially during
Pride Month and International Women’s Month,
to enable greater understanding. In these coun-
tries, we also made changes to our benefits
policy with regards to medical, bereavement, and
parental leave.
In North America, managers were trained in
inclusive leadership and asked to host inclu-
sion-related team talks across the region. In
Latin America, employee resource group leaders
received training on effective sponsorship of
DE&I, and all employees were encouraged to join
a training session on the importance of promot-
ing minority groups. In addition, an entire week
in September was dedicated to workshops and
engagements on DE&I.
In Denmark, we discontinued the nine-month
seniority requirements for full pay during paren-
tal leave (birth and adoption) to provide equal
access to all employees to this benefit. Our
employees volunteered during Copenhagen Pride
week, which raised awareness of human rights,
equity, diversity, and inclusion through a series
of workshops and seminars with external speak-
ers. We also facilitated a “girl takeover” initiative
in cooperation with Plan Børnefonden where a
young woman gets to be leader for a day.
Moving forward, we will continue our region spe-
cific approach and focus on being an inclusive
and diverse organization.
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 141Notes
Novozymes is steadfast in helping employees
thrive across various stages of their professional
pathway, whether it is staying safe, healthy, hav-
ing meaningful work contributions, or learning
new skills to advance their careers. We want
them to have a positive work-life synergy and
bring out their best at work and beyond. This is
crucial to our success as a business and for sus-
taining our reputation as a great place to work.
Our approach
Our ambition is to have a workplace where
employees stay safe, thrive, and grow. To deliver
on this long-term ambition, we have a health &
safety strategy toward 2030 that includes initia-
tives on leadership, culture, behaviors, work-
place, tools, and training.
To support our culture, our People and Health &
Safety Policies set the guidelines, and our
employee survey serves as an important tool to
track the organization’s disposition and support
better team conversations that focus on how we
work together at Novozymes.
Our Health & Safety management system aims to
ensure that robust safety processes, equipment,
standards, tools, and training are fully integrated
into the way we work. Our global incident
handling system, CAPTURE, enables us to moni-
tor incidents and anchor improvements, correc-
tive actions, and inspections. The data helps us
develop targeted, theme-based safety initiatives,
relevant to a specific site. Injury prevention is a
focal point for Novozymes, and our preventive
programs for enzyme and biological safety aim to
protect both employees and customers.
Our global and regional health and well-being
groups address local challenges, using our
Wellbeing Portal to roll out relevant initiatives.
Learning and development is a key managerial
responsibility with support from the People &
Organization function.
2023 summary
Our Thrive Index showed a score of 84, which is
three points higher than the industry benchmark,
indicating that our employees are learning, devel-
oping and feel connected to Novozymes’ purpose
and strategy.
Safety
Our three-year rolling average frequency of occu-
pational injuries with absence per million working
hours was 1.5, equal to 1.5 in 2022. We are also on
In 2023, we conducted an analysis of incidents
from previous years to develop a new strategy
for health and safety with strengthened targets
and several defined initiatives. For example, we
had a global mandatory safety e-learning for all
employees. We launched three new tools focused
on safety during maintenance as well as perform-
ing and documenting risk assessments. These
aim to ensure we have a 360-degree view of
safety conditions and can take appropriate
action, specific to each location and jobs being
performed.
Consequences of occupational injuries
No. 2023 2022
Return to original job 11 17
Return to a different job in the same department - 1
Out of work or early retirement - 2
Case pending 5 -
Occupational injuries with absence, total 16 20
Occupational injuries 2023 2022
Days of absence due to occupational injuries No. 500 745
Frequency of occupational injuries with absence
ESG
Per million
working hours 1.3 1.7
The results of our employee survey on safety
were very positive, indicating that our employees
feel physically safe and secure in their work envi-
ronment. Moving forward, we will continue to
drive a safety culture, to ensure that safety
behaviors are part of our organization and to
proactively prevent injuries.
Well-being
In 2023, we continued to roll out our research-
based e-learning program called Mindstrain. It has
shown positive results in improving mental well-
being and reducing stress.
8.3 Employee safety & well-being
Social and governance data
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 142Notes
8.3 Employee safety & well-being (continued)
Social and governance data
Consequences of occupational diseases
No. 2023 2022
Return to original job - -
Return to a different job 3 1
Out of work or early retirement - -
Case pending - -
Occupational diseases, total 3 1
Occupational diseases 2023 2022
Days of absence due to occupational diseases No. - -
Frequency of occupational diseases
ESG
Per million
working hours 0.3 0.1
Training costs 2023 2022
Average training cost spent per employee DKK 3,586 4,441
Percentage of total employee costs 0.5 0.7
In addition, as part of the Psychological Safety
Team Program, we added a combination of videos,
workbooks, and team exercises to help us commu-
nicate better within a team while improving inclu-
sion and well-being.
2023 was also a year of change at Novozymes in
light of the combination with Chr. Hansen. For this
reason, we focused on ensuring consistent and clear
communication to our employees to help them
navigate the changing landscape and minimize
uncertainty as much as possible. At the same time,
we equipped our leaders with the necessary know-
ledge and tools to lead during a period of change
and uncertainty.
Growth
Our strategic leadership development tools
ensure that Novozymes has leaders that under-
stand the behaviors needed to deliver results in
accordance with our strategy. Throughout 2022
them anchored the development areas into
“Individual Development Plans”.
We continue to encourage employees to discover
and to learn while building skills and competen-
cies needed for success in existing job roles and
career growth.
Occupational injuries are defined as the
reported number of incidents that occur in
the performance of job duties at or between
Novozymes locations that prevents the indi-
vidual from assuming working activities on
the next day of their scheduled shift.
Occupational diseases are defined as the
number of diseases contracted as a result of
an exposure to risk factors arising from work
activity and acknowledged as work related in
accordance with national legislation.
The consequences of occupational injuries
with absence and occupational diseases are
measured by recording the work situation
once the situation resulting from an incident
has stabilized, for example whether the
employees have returned to their original
jobs, and the total number of calendar days
of absence.
Frequencies of occupational injuries with
absence and frequencies of occupational dis-
eases are stated per million working hours.
The Thrive Index is derived from specific
questions in the annual employee question-
naire. The resulting score is a value of
between 0 and 100.
Training costs express the costs of external
training courses and seminars, translated
into Danish kroner at average exchange rates.
Training spend is also shown as a percentage
of total employee costs.
Accounting policies
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 143Notes
We are committed to conducting business in a
responsible, ethical, and transparent manner,
and meeting stakeholders’ expectations of high
business integrity standards across our opera-
tions.
Our approach
We live and act as a responsible corporate citi-
zen. Business ethics is integrated into everything
we do and plan for the future. It is reflected in
our purpose, values, policies, and position state-
ments. We promote a strong compliance culture
and take relevant measures to ensure compliance
to the highest standards across all material envi-
ronmental, social, governance, and financial-
related issues.
Our purpose, values, and business integrity prin-
ciples act as our code of conduct in business
integrity matters. Our code of conduct forms the
basis of our efforts to ensure a compliant busi-
ness and eliminate all forms of corruption. It
applies to all employees across the world and
lays the ground rules for conducting business
with honesty and fairness in compliance with
laws and recognized standards for responsible
and ethical business practices.
8.4 Business ethics
Social and governance data
It contains principles, which among other things
underline our zero tolerance position towards bri-
bery and define clear rules for gifts and hospitality.
All employees have access to relevant guidance
on business integrity and are encouraged to raise
any concerns through the relevant grievance
channels. In addition, annual compliance training
in business integrity and competition law is con-
ducted, which is mandatory for employees in
scope. It focuses on anti-corruption, and it is
based on questions raised during the year,
including real-life case studies, to ensure rele-
vance and applicability. We also provide targeted
training on an ad-hoc basis, depending on needs
or risks detected or foreseen.
We have a Committee responsible for the over-
sight of business integrity matters across the
company. Members include executive and senior
management representatives from both business
and compliance functions. They meet on a regu-
lar basis to make strategic decisions and to fol-
low up on the state of business integrity compli-
ance and relevant initiatives.
The committee also engages with external advi-
sors, when relevant, for a thorough and qualified
decision-making process.
We work proactively to prevent, detect, and
respond to fraud, corruption, and other business
integrity violations. We have a global corporate
whistleblower hotline which allows employees
and external partners to report any concerns on
illegal or unethical misconduct or other business
integrity violations. The whistleblower hotline is
supplemented by various internal reporting chan-
nels and screening activities. All allegations of
fraud, corruption, and other business integrity
cases are thoroughly investigated. Substantiated
violations lead to proportionate disciplinary
sanctions for the parties involved and an internal
review on compliance gaps or potential improve-
ments of policies and procedures.
Our responsibility for ensuring ethical business
practices also extends to our business partners.
Our third-party due diligence processes seek to
ensure that our commercial partners conduct
business with integrity and share our values
regarding legal compliance.
2023 summary
This year, Novozymes’ business integrity training
a general reminder of the principles we abide by
to mitigate the risk of bribery and corruption,
with a particular focus on conflicts of interest.
The competition law compliance training in 2023
served as a general reminder of do’s and don’ts
and had a focus on competition law aspects asso-
ciated with interactions with customers, which
may also be competitors.
As in previous years, Novozymes had no reported
violations of competition law in 2023.
Advanced data analytics remains the main chan-
nel for revealing potential fraud, and we have
greatly enhanced our ability to rapidly detect and
respond to cyberattacks. Read more in our Risk
Management section. In 2023, investigations
based on whistleblower reports and tip-offs
increased compared to 2022. The increase is
impacted by an increase in non-fraud related
whistleblower reports. None of the substantiated
cases had material business or financial impact
for Novozymes. The increased threat from cyber-
crime led to an increase in the number of
detected cybercrime cases in 2023 to 29 from 23
in 2022.
The Audit Committee reviews quarterly informa-
tion on all whistleblower reporting and other tip-
offs on potential fraud and corruption.
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Reporting channels for
potential fraud 2023
(2022)
Whistleblower
64% (25%)
Internal tip-off
31% (55%)
External tip-off
5% (20%)
45
(40)
Investigation outcome for whistleblows and
in-/external tip-offs 2023
(2022)
Substantiated
27% (38%)
Not substantiated
44% (45%)
Other*
29% (17%)
*
Not fraud investigations.
45
(40)
Novozymes A/S 144Notes
Completion of business integrity training
refers to the percentage of employees in
scope who completed business integrity
training in the last training period. New enti-
ties are included within six months of acquisi-
tion. Business integrity training is conducted
for employees who could potentially influ-
ence third-party interactions or decisions as
part of their job role. This comprises employ-
ees in professional, managerial or administra-
tive positions.
The reporting criteria for a competition law
violation is whether it has been established
by an authority, which is a member of the
International Competition Network, or by a
competent court anywhere in the world that a
company in the Novozymes Group has vio-
lated applicable anti-trust regulations.
Novozymes defines fraud including
corruption, as deliberate misconduct with the
intent to gain a direct or indirect personal
advantage.
Accounting policies
8.4 Business ethics (continued)
Social and governance data
The charts provide further details of the report-
ing channels and consequences for fraud and
corruption cases.
In 2023, Novozymes’ Corporate Business
Integrity Committee had a particular focus on
compliance policies and programs within the
areas of anti-corruption and data privacy.
Selected cases concerning matters of principle
were reviewed by the committee for the purpose
of providing additional and targeted guidance to
the organization, e.g., conflicts of interest and
acceptable hospitality.
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 145Notes
Together with customers, partners, and the global
community, we use our biosolutions to help cus-
tomers grow their businesses while preserving the
planet’s resources and enabling better lives.
Therefore, customer engagements and partner-
ships are material to us. We seek to continue
being a trusted business partner that delivers reli-
able products and innovative solutions.
Our approach
To meet increasing customer needs, Novozymes
proactively engages with customers in various
ways. Customer co-creation and commercial
leadership are some of the main drivers behind
our strategy.
Our technical services and customer co-creation
teams have in-depth understanding of our cus-
tomers’ needs, and they help optimize product
use by making necessary adjustments tailored to
the needs of individual customers such as finding
novel solutions and applications to help improve
their processes and final products.
We also bring value through our online services
and digital tools that are designed to be easy to
use, inspirational, and available whenever our cus-
tomers need them. We aim to increase our digital
offerings to customers by providing more
8.5 Customer engagement
Social and governance data
transparency on our product offerings, easy
access to purchasing, as well as digital collabora-
tion with technical services.
We believe that getting feedback from our cus-
tomers is crucial to determining our performance.
It assists us in assessing customer expectations
and driving improvements to our products and
service offerings. Over the year, we gather feed-
back and rapidly respond to customer concerns
and suggestions as they arise.
Throughout the year, we respond to several infor-
mation requests from customers in areas such as
governance, strategy, sourcing practices, safety,
quality, and sustainability. We provide them with
information on our products, services, corporate
policies, commitments, targets, and initiatives in a
transparent manner.
2023 summary
The Customer Satisfaction Survey resulted in a Net
Promotor Score (NPS) of +71 in 2023, an increase
from the score of +69 in 2022. The NPS score
shows that our customers still strongly value the
continuous support provided by Novozymes, the
high quality of our products, long-term relation-
ship, and close collaboration, despite the challeng-
ing business environment experienced in 2023.
In 2023, we expanded our customer co-creation
(CCC) offering by strengthening capabilities such
as formulation and prototyping, sensory, design
thinking, and nutritional science.
A key milestone this year has been the launch of
two new Food & Health co-creation centers in
Franklinton, U.S. and Copenhagen, Denmark. We
also have plans for a customer co-creation center
in China. Additionally, we already had a Baking
Innovation Technology Center in Türkiye and a
Detergent Design Center in India.
Our new centers offer the ideal environment to
collaborate with customers from ideation to
product launch. CCC is integrated with our com-
mercial team and works hand in hand with them.
The centers have the space and tools to make
high-quality prototypes in-house and help us col-
laborate faster with our customers. A key highlight
was the Nutrition Claims tool that we developed to
give customers a quick and simple overview of the
regulatory scenario for potential nutritional claims
on food labels in each EU member state, based on
nutritional data from customer or pilot products.
Learn more about customer co-creation in the
Strategy & commitments section of this report.
This year, we also invested in seamless digital
solutions and advanced analytical tools to enable
commercial teams to deliver on targets. Further,
we started a program to refresh our go-to-market
strategy to increase growth, improve customer
satisfaction, and build a stronger commercial
model.
We continued to invest in artificial intelligence
and machine learning capabilities to secure
insights, create efficiency, and develop better
digital solutions and self-service options for our
employees and customers.
When it comes to sustainability disclosures, we
received more requests in 2023 than previous
years for sustainability data and information from
our customers. It represents a clear signal of the
growing importance of sustainability to companies
today. In addition to these requests, Novozymes
also worked closely with a few strategic partners
on innovating together for sustainability.
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S Financial statements for Novozymes A/S 146
8.5 Customer engagement (continued)
Social and governance data
As an example, LIBY, one of our leading partners
for household care in China for over 30 years, is
focused on creating a localized environmental cal-
culator and shaping national green standards to
guide China’s detergent industry. Novozymes sup-
ports LIBY’s initiatives with advisory and data,
where possible. In 2023, the collaboration
between both companies were among the Top 100
Cases in the “2023 Chinese Enterprises Report on
Low Carbon Transition and High-Quality
Development”.
In 2023, Novozymes was one of the first compa-
nies to sign Unilever’s Climate Promise, signaling
our commitment to support their net-zero journey.
We have championed their supplier engagement
program at two separate Unilever supplier events.
We conducted a joint decarbonization workshop
to share knowledge and identify additional oppor-
tunities for Unilever to leverage biosolutions to
deliver on their net-zero journey.
Together with our partners, we are shaping the
future of energy. Raízen is a leader in the produc-
tion of low-carbon fuels and power from sugar
cane, biomass, biogas, and biomethane. In 2023,
Raízen launched its second biomass ethanol plant
with a capacity of producing 75 million liters of
cellulosic ethanol per year with a minimal carbon
footprint, powered by Novozymes’ biosolutions.
This is the first of many new plants they plan to
build and operate by 2031.
FS, one of our biofuels partners in Brazil, aims to
be the largest producer of negative carbon biofuel
in the world by building ethanol refineries with
carbon capture and storage. These plants produce
bioenergy, while removing carbon dioxide perma-
nently from the atmosphere, by capturing the
emissions released during the fermentation pro-
cess and storing them underground. We provided
vital carbon footprint data and supported their
certification process because we strive to help our
customers achieve their sustainability goals.
The Net Promoter Score (NPS) is derived
from an annual questionnaire measuring on a
scale from 1-10 how likely the customer is to
recommend Novozymes to others. The NPS is
calculated as the share of promoters (rating
us 9 or 10) less the share of detractors (rating
us 1-6). The resulting score is a value
between -100 and +100.
Accounting policies
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 147Notes
At Novozymes, we pride ourselves on having a cul-
ture of changemakers with employees who want
to leave a positive mark on the world. We believe
we have a responsibility for the well-being of the
communities we operate in and to invest strategi-
cally in programs that create value to society. We
inspire each other to make change happen and
deliver on our promise of better lives in a growing
world, both inside and outside the workplace.
Our approach
As part of our strategy, we aim to nurture a work-
ing environment that empowers employees to give
back to society and nature. We encourage this by
-
ties that support community needs, help educate
the next generation, and enable our employees to
live more sustainably.
Novozymes’ global community outreach initiative
“Inspire” is driven by passionate employees, who
are encouraged to contribute to better lives via
initiatives which they are enthusiastic about. All
regions have groups coordinating the local agenda
with the regional leadership team.
Further philanthropic contributions are done indi-
rectly through our dividend payments to the Novo
Nordisk Foundation, through Novo Holdings A/S,
Novozymes (see The Novozymes Stock). The
Foundation’s objective is to support scientific,
social, and humanitarian purposes, and it contrib-
utes to communities in large scale through dona-
tions and impact investments.
In addition, all employee-elected candidates serv-
ing on the Board of Directors donate the majority
of their board remuneration to a foundation in the
Novo Group called “Medarbejdernes
Honorarfond”. The excess capital of the founda-
tion is granted for urgent humanitarian purposes
or to humanitarian relief organizations.
2023 summary
Engaging with our local communities
To support the people affected by the earth-
quake in February in Türkiye and Syria, employ-
ees in Türkiye purchased and packed supplies
and in Germany, they raised funds for relief
organizations. Novozymes also donated mone-
tary support to Türkiye Red Crescent and the
Turkish NGO, Ahbap Platformu Resmi Sitesi.
As part of the welcome package, Novozymes
Kenya introduced an initiative where every new
employee plants 10 trees at a local high school to
help the school become self-reliant in food for
students. In North America, employees contin-
ued to facilitate numerous donations as well as
volunteering at a food bank and a nursery.
Helping to educate the next generation
Novozymes engaged with students all over the
world to share the story about biosolutions,
spread knowledge about study and career oppor-
tunities within STEM and by being passionate role
models breaking prejudices and other barriers.
In Denmark, South Korea, Japan, South Africa
and other countries, employees engaged with
students from high school to university level,
showcasing and teaching them the captivating
aspects of our work with biosolutions, as well as
engaging in career talks. In China, employees
developed courses for the public to raise aware-
ness on biology and sustainable development.
In North America, employees hosted demos at
local libraries or schools, staffed a mobile innova-
tion lab, and we also hosted over 100 elementary
school children participating in STEM activities in
our labs in Davis, U.S. In Brazil, we joined the
“Impulsione um Jovem” initiative, which provides
support and mentorship to students in vulnerable
situations to ensure continuity of their studies
and reinforce their professional development.
Empowering employees to live more sustainably
Sustainable living is a common theme for team
building activities. In China, employees organized
a street survey to raise awareness about food
security and build an understanding of the com-
munity’s needs. In Denmark, employees went
sailing in kayaks to collect trash across the har-
bor in Copenhagen, while others joined an initia-
tive that promoted carpooling to and from our
site to reduce traffic and personal carbon foot-
print. Across our Asia Pacific region, more than
800 employees joined an internal physical exer-
cise campaign to raise awareness about environ-
mental issues such as Earth Overshoot Day, as
well as promoting healthy and sustainable living.
8.6 Community engagement
Social and governance data
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 148Notes
Novozymes’ responsible sourcing practices are
focused on environmental, social, and gover-
nance issues across our value chain. Agricultural
raw materials are a major component of our pro-
duction processes and having a responsible and
secure supply of them is crucial for production at
Novozymes.
Our approach
Novozymes’ sourcing department drives our sup-
plier management and responsible sourcing pro-
gram, anchored within Novozymes’ Operations,
Supply and Quality function. Our approach to
responsible sourcing is defined by our
Responsible Purchasing Standards (RPS) and
managed through our Supplier Performance
Management (SPM) process and the Supplier
Ethical Data Exchange (SEDEX) platform. Through
the SPM process, Novozymes monitors suppliers
and classifies their risk based on spend, country,
and category. Novozymes uses the SEDEX colla-
boration platform to engage with suppliers and
manage sustainability risks in our supply chain.
In addition, our suppliers of directly sourced agri-
cultural raw materials are required to adhere to
our requirements on zero net deforestation and
zero tolerance for land grabbing. In case a sup-
plier does not meet our assessment criteria,
either an action plan is established, or an alter-
nate supplier is identified.
Responsible sourcing is a key driver of
Novozymes’ journey towards becoming net-zero
-
tricity by 2025. We are committed to reducing
our supply chain (scope 3) greenhouse gas emis-
Furthermore, we recognize that the climate matu-
rity of suppliers is critical for Novozymes’ efforts
to reduce emissions, and therefore engage with
them on their own decarbonization efforts.
Further information on our efforts can be found
in Note 7.1 Climate change.
2023 summary
We are continuing to focus on progressing the
existing opportunities to purchase renewable
energy and identifying further long-term solu-
tions. These initiatives require years of prepara-
-
sumption came from renewable sources, and we
are well on track to meet our target for 2025.
As a member of the Roundtable on Sustainable
ducts we sourced in 2023 were RSPO’s mass
balance (MB) or Segregated (SG) certified. In
2023, Novozymes received its first RSPO supply
chain (MB) certification in Denmark. We have
now started working towards getting our
Franklinton site certified in 2024. This certifica-
tion further enables our customers to sell RSPO
certified products themselves.
As part of our Human Rights commitments, our
sourcing teams are given sustainability training
on an annual basis, with a focus on human rights
and modern slavery issues that may exist in our
supply chain. In 2023, through this interactive
training, the teams engaged with various online
tools to improve our understanding of reporting
violations, work with suppliers to resolve issues,
and find common sustainability themes for
engagement.
Throughout 2023, our sourcing teams have initi-
ated various activities to promote sustainability
across our sites. For example, in India, we imple-
mented new initiatives to reduce the amount of
paper used, lower the carbon footprint of
employee commuting, and by partnering with a
warehouse partner to convert over half of their
electricity consumption to renewable sources.
Our suppliers of conference venues in Denmark
are required to comply with high sustainability
standards, such as acquiring a Green Key certifi-
this requirement, and the rest have concrete
action plans to fulfill it.
At the end of 2023, we introduced a code of con-
duct for our external business partners. The
document covers broader themes such as busi-
ness ethics, human and labor rights, occupa-
tional health and safety and environmental
stewardship, including climate action. Going for-
ward, it will replace our Responsible Purchasing
Standard (RPS), and we will require all our exter-
nal business partners, not just suppliers, to com-
ply with this code of conduct.
This year, we adopted a new platform, ARAVO,
which has now taken over the SPM process,
which will enable better responsible sourcing
data integration in the years to come. In 2024,
we will work to deliver on our responsible sourc-
ing strategy while ensuring compliance with
emerging supply chain regulations.
8.7 Responsible sourcing
Social and governance data
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Novozymes A/S 149Statements
Statement of the Board of Directors
and Executive Management
Executive Management
Board of Directors
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 150Statements
Independent Auditor’s Reports
Report on the audit of the
Financial Statements and
the Environmental, Social
and Governance Data
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 151Statements
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 152Statements
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 153Statements
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 154Statements
CVR No 3 37 7 1 23 1
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S
Financial statements
Income statement
Balance sheet
Statement of equity
1.1 Accounting policies
2.1 Revenue
2.2 Employee costs
2.3 Other operating income, net
2.4 Income from investments in subsidiaries
2.5 Special items
3.1 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments in subsidiaries
3.5 Investments in associates
3.6 Other receivables
3.7 Deferred tax
3.8 Other provisions
3.9 Payables to Group enterprises
4.1 Financial income and costs
4.2 Credit institutions
4.3 Derivatives
4.4 Proposed appropriation of net profit
5.1 Related party transactions
5.2 Fees to statutory auditors
5.3 Common stock and treasury stock
5.4 Contingent liabilities and
pending litigation
5.5 Events after the reporting date
Financial statements for
Novozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S Financial statements for Novozymes A/S 156
Income statement
DKK million Note 2023 2022
Revenue 2.1 10,115 10,806
Cost of goods sold 2.5 (5,065) (4,963)
Gross profit 5,050 5,843
Sales and distribution costs 2.5 (2,462) (1,906)
Research and development costs 2.5 (1,852) (1,773)
Administrative costs 2.5 (733) (663)
Other operating income, net 2.3 1,893 1,352
1,896 2,853
Income from investments in subsidiaries 2.4 842 1,529
Share of result in associates 3.5 (18) (7)
Financial income 4.1 214 260
Financial costs 4.1 (366) (533)
2,568 4,102
Tax (416) (557)
Net profit 2,152 3,545
Dividend to shareholders 1,686
Retained earnings 2,152 1,859
4.4 2,152 3,545
Proposed dividend per share, DKK 6.00
Proposed dividend for the period September 1 - December 31, 2023 will be announced by the Board of Directors of Novonesis in connection
with the notice of the Annual Shareholders’ Meeting.
Income statement, Novozymes A/S
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S Financial statements for Novozymes A/S 157
Assets
DKK million Note Dec. 31, 2023 Dec. 31, 2022
Intangible assets 3.1 3,432 4,061
Property, plant and equipment 3.2 4,811 4,501
Investments in subsidiaries 3.4 10,298 10,342
Investments in associates 3.5 205 223
Other financial assets 14 2
Other long-term receivables 3.6 38 13
Receivables from Group enterprises 302 302
10,857 10,882
19,100 19,444
Raw materials and consumables 202 293
Work in progress 645 620
Finished goods 939 931
1,786 1,844
Trade receivables 1,392 1,344
Receivables from Group enterprises 400 88
Tax receivables 208 66
Other receivables 3.6 193 415
2,193 1,913
Cash at bank and in hand 253 213
Current assets 4,232 3,970
Assets 23,332 23,414
DKK million Note Dec. 31, 2023 Dec. 31, 2022
Common stock 562 562
Treasury stock (3,181) (3,348)
Reserve for development costs 282 260
Cash flow hedges 65 81
Retained earnings 14,515 13,374
Proposed dividend 1,686
12,243 12,615
Provisions for deferred tax 3.7 609 650
Other provisions 3.8 83 264
692 914
Lease liabilities 116 130
Borrowings 4,329 3,619
4,445 3,749
Lease liabilities 63 47
Borrowings 3,081 2,909
Trade payables 734 830
Payables to Group enterprises 3.9 1,238 1,751
Other liabilities 836 599
5,952 6,136
11,089 10,799
23,332 23,414
Balance sheet, Novozymes A/S
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Novozymes A/S Financial statements for Novozymes A/S 158
Statement of equity, Novozymes A/S
DKK million
Common
stock
stock
costs
Retained
562 260 81 13,374 1,686 12,615
Net profit for the year 2,152 2,152
Capitalized development costs 22 (22) -
Dividend paid (1,661) (1,661)
Dividend paid relating to treasury stock 25 (25) -
Interim dividend paid (1,164) (1,164)
Sale of treasury stock 167 167
Fair value adjustments (16) (16)
Other adjustments 150 150
B/S
562 282 65 14,515 - 12,243
Proposed dividend for the period September 1 - December 31, 2023 will be announced by the Board of Directors of Novonesis in connection with the notice of the Annual Shareholders’ Meeting.
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S Financial statements for Novozymes A/S 159
1.1 Accounting policies
Note section 1
The financial statements of Novozymes A/S have
been prepared in accordance with the Danish
Financial Statements Act (accounting class D).
The accounting policies are consistent with those
applied for the consolidated financial statements
except as described below. For a description of
the Group’s accounting policies, please refer to
the consolidated financial statements.
The accounting policies are unchanged from
2022.
No separate statement of cash flows has been
prepared for Novozymes A/S; please refer to the
consolidated statement of cash flows.
Income is recognized in the income statement as
earned.
All costs incurred in generating the year’s reve-
nue are also recognized in the income statement,
including depreciation, amortization and impair-
ment losses.
Value adjustments of financial assets and liabili-
ties measured at fair value or amortized cost are
also recognized in the income statement.
Assets are recognized in the balance sheet when
it is considered probable that future economic
benefits will flow to the company and the value of
the asset can be reliably measured. Liabilities are
recognized in the balance sheet when they are con-
sidered probable and can be reliably measured. On
initial recognition, assets and liabilities are meas-
ured at cost. Assets and liabilities are subsequently
measured as described below for each item.
The accounting policies for intangible fixed
assets follow those of the Group with the excep-
tion of goodwill, which is amortized over a period
of 10 years using the straight-line method.
An amount equal to the total capitalized develop-
ment costs after tax is recognized under Equity
in Reserve for development costs.
Financial assets
Investments in subsidiaries are recognized ini-
tially at cost and subsequently measured using
the cost method. Dividends from investments in
subsidiaries are recognized in the income
statement of the Parent Company in the financial
year in which the dividend is declared. If the car-
rying amount of an investment in a subsidiary
exceeds the carrying amount of the net assets in
the subsidiary’s financial statements, or the divi-
dend exceeds the total comprehensive income of
the subsidiary in the period in which the dividend
is declared, the carrying amount of the subsidi-
ary is tested for impairment.
Share-based payments granted to employees of
the Company’s subsidiaries are recognized as
contributions to the investment in the respective
subsidiaries.
Investments in associates are initially recognized
at cost and subsequently measured using the
equity method. If the equity of associates is neg-
ative and Novozymes A/S has a legal or construc-
tive obligation to cover their negative equity, a
provision is recognized.
Share purchase liabilities are obligations to
invest in subsidiaries and are disclosed as a con-
tractual obligation. The derivative embedded in
the share purchase obligation is measured at fair
value through the income statement.
The dividend proposed for the financial year is
shown as a separate item under Equity.
Treasury stock is used to reduce the common
stock and to hedge employees’ exercise of
granted stock awards and stock options.
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The Novozymes Report 2023
Novozymes A/S Financial statements for Novozymes A/S 160
2.1 Revenue 2.2 Employee costs
Note section 2
DKK million 2023 2022
Geographical distribution:
Denmark 233 211
Rest of Europe, Middle East & Africa 5,812 5,662
North America 1,489 1,878
Latin America 1,082 1,109
Asia Pacific 1,499 1,946
I/S
10,115 10,806
Reference is made to Note 2.1 to the consolidated financial statements segment information.
DKK million 2023 2022
Wages and salaries 2,182 1,965
Pensions - defined contribution plans 209 196
Other social security costs 23 23
Other employee costs 206 181
2,620 2,365
Average number of employees in Novozymes A/S 2,931 2,849
Employee costs in 2023 included severance pay,
retention bonuses and other employee costs of
DKK 71 million related to the combination of
Novozymes and Chr. Hansen.
Reference is made to Note 6.1 to the consoli-
dated financial statements concerning remunera-
tion of the Board of Directors and the Executive
Management.
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Novozymes A/S Financial statements for Novozymes A/S 161
2.3 Other operating income, net
2.4 Income from investments in
subsidiaries
DKK million 2023 2022
Royalty income relating to subsidiaries 1,757 1,310
Net gain from divestment of selected waste-water treatment
solutions 88 -
Other operating income 48 42
I/S
1,893 1,352
DKK million 2023 2022
Dividends from subsidiaries 1,037 1,262
Impairment of subsidiaries (322) -
Reversal of impairment of subsidiaries 127 267
I/S
842 1,529
Note section 2
2.5 Special items
In 2023, costs included DKK 543 million related
to the combination of Novozymes and Chr.
Hansen, of which DKK 34 million were recog-
nized in Cost of goods sold, DKK 373 million in
Sales and distribution costs, DKK 8 million in
Research and development costs and DKK 128
million in Administrative costs (2022: DKK 68
million in Sales and distribution costs).
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Novozymes A/S Financial statements for Novozymes A/S 162
3.1 Intangible assets
Note section 3
Impairment
No impairment loss was recognized in 2023 and
2022.
2023 2022
DKK million
patents,
licenses and
Completed
projects
projects in
Cost at January 1 4,375 3,023 919 136 8,453 8,330
Additions during the year - 4 13 113 130 123
Disposals during the year - (117) (8) - (125) -
Transfers to/(from) other items - - 47 (47) - -
4,375 2,910 971 202 8,458 8,453
Amortization and impairment losses at January 1 (2,002) (1,670) (720) (4,392) (3,572)
Amortization for the year (469) (192) (98) (759) (820)
Disposals during the year - 117 8 125 -
B/S
1,904 1,165 161 202 3,432 4,061
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Novozymes A/S Financial statements for Novozymes A/S 163
Capitalized interest
Interest of DKK 5 million was capitalized under
Additions during the year (2022: DKK 0 million).
Capitalization rate: 2.3% (2022: 0.8%).
Land and buildings with an aggregate carrying
amount of DKK 1,296 million (2022: DKK 1,366
million) were pledged as security to credit institu-
tions in respect of mortgage loans expiring in
2029 and 2039.
Contractual obligations to third parties relating
to property, plant and equipment amount to DKK
138 million (2022: DKK 259 million).
Impairment
No impairment loss was recognized in 2023 and
2022.
2023 2022
DKK million
Land and
under
construction
Cost at January 1 3,526 5,459 1,485 608 11,078 10,646
Additions during the year 52 34 79 568 733 627
Disposals during the year (2) (34) (24) - (60) (195)
Transfers to/(from) other items 51 108 54 (213) - -
3,627 5,567 1,594 963 11,751 11,078
Depreciation and impairment losses at January 1 (1,602) (4,004) (971) (6,577) (6,373)
Depreciation for the year (108) (194) (117) (419) (388)
Disposals during the year 2 32 22 56 184
B/S
1,919 1,401 528 963 4,811 4,501
3.2 Property, plant and equipment
Note section 3
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Novozymes A/S Financial statements for Novozymes A/S 164
DKK million 2023 2022
Land and buildings 33 38
Plant and machinery 82 87
Other equipment 56 43
171 168
Additions to lease assets during 2023 amounted to DKK 47 million (2022: DKK 9 million).
DKK million 2023 2022
Less than 1 year 63 47
Between 1 and 5 years 53 61
More than 5 years 63 71
179 179
DKK million 2023 2022
Interest on lease liabilities 3 4
Depreciation of lease assets per asset class
Land and buildings 8 9
Plant and machinery 5 6
Other equipment 29 30
Depreciation of lease assets 42 45
3.3 Leases
Note section 3
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S Financial statements for Novozymes A/S 165
DKK million 2023
Cost at January 1, 2023 12,086
Additions during the year 151
Disposals during the year (32)
12,205
Impairment losses at January 1, 2023 (1,744)
Impairment losses (322)
Reversal of impairment losses 127
Disposals during the year 32
B/S
10,298
DKK million 2023
Cost at January 1, 2023 329
329
Revaluation reserve at January 1, 2023 (106)
Share of result in associates (18)
B/S
205
Reference is made to Note 6.9 to the consolidated
financial statements concerning investments in
subsidiaries, joint operations and associates.
3.4 Investments in subsidiaries
Note section 3
DKK million 2023 2022
Prepaid expenses 112 206
Derivatives 77 142
Other receivables 42 82
231 430
Recognized in the balance sheet as follows:
Non-current
B/S
38 15
Current
B/S
193 415
231 430
3.6 Other receivables
3.5 Investments in associates
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The Novozymes Report 2023
Novozymes A/S Financial statements for Novozymes A/S 166
3.7 Deferred tax
DKK million 2023 2022 2023 2022
Intangible assets - - (296) (295)
Property, plant and equipment - - (269) (312)
Inventories - - (30) (30)
Stock options 59 51 - -
Other - - (73) (64)
59 51
Offsetting items (59) (51) 59 51
B/S
- -
DKK million 2023 2022
Deferred tax at January 1 (650) (483)
Prior-year adjustments 31 21
Tax related to the income statement 2 (26)
Tax on equity items 8 (162)
B/S
Note section 3
3.9 Payables to Group enterprises
Other provisions include contingent considera-
tion related to the acquisition of PrecisionBiotics
Group.
Current payables for Group enterprises included
an internal transfer of assets from Microbiome
Labs.
The payable of DKK 158 million was paid in 2023
and contingent on the final purchase price for
Microbiome Labs.
In 2022, Management reassessed the value of
the earn-out due to lower-than-expected sales
and reduced the contingent consideration by
DKK 223 million.The fair value adjustment was
recognized as Financial income.
Reference is made to Note 3.6 to the consoli-
dated financial statements concerning contin-
gent consideration, as the figures and informa-
tion related to PrecisionBiotics Group applying
to Novozymes A/S are identical to the informa-
tion provided there.
Reference is made to Note 3.6 to the consoli-
dated financial statements concerning contin-
gent consideration, as the figures and informa-
tion related to Microbiome Labs applying to
Novozymes A/S are identical to the information
provided there.
3.8 Other provisions
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S Financial statements for Novozymes A/S 167
Note section 4
4.2 Credit institutions
DKK million 2023 2022
Interest income relating to subsidiaries 30 23
Fair value adjustment of payables relating to subsidiaries 165 223
Other financial income 19 14
Financial income
I/S
214 260
Interest costs relating to subsidiaries (59) (32)
Other financial costs (307) (501)
Financial costs
I/S
DKK million 2023 2022
Long-term debt to credit institutions falling due after 5 years 1,832 1,318
4.1 Financial income
and costs
4.3 Derivatives
Reference is made to Note 5.4 to the consoli-
dated financial statements concerning deriva-
tives, as the figures and information applying to
Novozymes A/S is identical to the information
provided there.
4.4 Proposed appropriation
of net profit
DKK million 2023 2022
Dividend to shareholders 1,686
Retained earnings 2,152 1,859
Net profit 2,152 3,545
Proposed dividend for the period September 1 - December 31, 2023 will be announced by the Board of Directors of Novonesis in
connection with the notice of the Annual Shareholders’ Meeting.
Undrawn committed credit facilities amounted to
DKK 5,256 million at December 31, 2023 (2022:
DKK 17,502 million), all of which expire in 2024–
2027. Reference is made to Note 5.1 to the
consolidated financial statements concerning
undrawn committed credit facilities, as the infor-
mation applying to Novozymes A/S is identical to
the information provided there.
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S Financial statements for Novozymes A/S 168
Note section 5
DKK million 2023 2022
Dividend payment to Novo Holdings A/S 803 396
Sales 112 113
Purchases (49) (78)
Purchases (14) (34)
Sales 128 114
Purchases (80) (36)
Royalty income 8 6
Royalty expenses (12) (10)
Purchases (71) (38)
DKK million 2023 2022
Receivables 22 10
Payables (73) (79)
Payables (1) (7)
Receivables 28 20
Receivables 1 6
Payables (2) (13)
Payables (31) (12)
* Novozymes A/S holds a 60% ownership interest in Synergia Life Sciences Pvt. Ltd.
** Associate of Novozymes A/S
There were no transactions with related parties
other than the transactions described herein and
the ordinary remuneration of the Board of
Directors and Executive Management, which is
presented in Note 6.1 to the consolidated finan-
cial statements.
Reference is made to Note 6.4 to the consoli-
dated financial statements concerning transac-
tions with related parties.
Novozymes A/S is included in the consolidated
financial statements of Novo Nordisk
Foundation.
Novozymes A/S has commitments and guaran-
tees to related parties in the amount of DKK 341
million (2022: DKK 343 million), that primarily
relate to guarantees issued for subsidiaries.
5.1 Related party transactions
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S Financial statements for Novozymes A/S 169
5.3 Common stock and treasury stock
5.5 Events after the reporting date
DKK million 2023 2022
Statutory audit 7 6
Other assurance engagements 2 -
Tax advisory services - 2
Other services 6 10
15 18
Reference is made to Note 6.6 to the consoli-
dated financial statements concerning fees to
statutory auditors.
Reference is made to Note 5.5 to the consoli-
dated financial statements concerning common
stock and treasury stock.
Reference is made to Note 6.8 to the consoli-
dated financial statements concerning events
after the reporting date.
Note section 5
5.2 Fees to statutory auditors 5.4 Contingent liabilities
and pending litigation
Reference is made to Note 6.3 to the consoli-
dated financial statements concerning pending
litigation and arbitration.
Novozymes A/S has a contingent liability to pur-
chase the remaining 40% of the shares in
Synergia Life Sciences in 2025, but the purchase
is expected to be effected in 2024. Reference is
made to Note 6.5 to the consolidated financial
statements concerning non-controlling interests.
At December 31, 2023, Novozymes A/S had a
contingent liability in the form of a break-up fee
of up to DKK 2,348 million (EUR 315 million) in
the unlikely event that the combination of
Novozymes and Chr. Hansen did not obtain regu-
latory approval. As the combination was com-
pleted on January 29, 2024, the liability did not
materialize.
At December 31, 2023, Novozymes A/S had
entered into consultancy agreements with fees
contingent on the completion of the combination
with Chr. Hansen. The expected fees amount to
approximately DKK 250 million.
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 170Management Review
Glossary (Part of the Management Review)
Net profit (attributable to shareholders of
Novozymes A/S) divided by the weighted average
number of shares outstanding (diluted).
Profit before interest and tax.
Profit before interest and tax as a percentage of
revenue.
Profit before special items, interest and tax.
Profit before special items, interest and tax as a
percentage of revenue.
Profit before interest, tax, depreciation and
amortization.
Profit before interest, tax, depreciation and
amortization as a percentage of revenue.
Economic profit is defined as adjusted operating
profit (NOPAT) less (average invested capital *
WACC).
Income tax expense as a percentage of profit
before tax.
Total equity as a percentage of total assets at
year end.
The Executive Leadership Team consists of the
Executive Management and Executive Vice
Presidents.
Executive Management consists of the regis-
trered executives.
Cash flow from operating activities less cash flow
from investing activities.
Cash flow from operating activities less cash flow
from investing activities, business acquisitions,
divestments, purchase and sale of financial
assets.
Total assets excluding interest-bearing assets
and minority investments less non-interest-bear-
ing liabilities.
iXBRL tags is hidden meta-information embed-
ded in the source code of an XHTML document in
accordance with the Inline XBRL specification,
which enables the conversion of XHTML-
formatted information into a machine- readable
XBRL data record by appropriate software.
Taxonomy is an electronic dictionary of business
reporting elements used to report business data.
A taxonomy element is an element defined in a
taxonomy that is used for the machine-readable
labeling of information in an XBRL data record.
The market value of interest-bearing liabilities
(financial liabilities) less the market value of cash
at bank and in hand and other readily convertible
interest-bearing current assets.
Net interest-bearing debt as a percentage of last
12 months’ EBITDA.
Current assets less current liabilities used in, or
necessary for, the company’s operations. The
main components are inventories, trade receiva-
bles and trade payables.
Operating profit adjusted for exchange gains/
losses, share of profit in associates less tax on
adjusted operating profit using the effective tax
rate.
EBIT before special items adjusted for exchange
gains/losses, share of profit in associates less
tax on adjusted EBIT before special items using
the effective tax rate.
Operating costs consist of Sales and distribution
costs, Research and development costs and
Administrative costs.
Sales growth from existing business, excluding
divestments, measured in local currency. For
acquisitions, pro forma sales for the prior year
are included in the calculation.
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 171Management Review
Glossary (Part of the Management Review)
Net profit attributable to shareholders of
Novozymes A/S as a percentage of average
Equity attributable to shareholders of
Novozymes A/S.
Adjusted operating profit (NOPAT) after tax for
the last 12 months as a percentage of average
invested capital.
special items
NOPAT before special items after tax for the last
12 months as a percentage of average invested
capital.
Special items include income and costs related to
the combination of Novozymes and Chr. Hansen.
XHTML (eXtensible HyperText Markup Language)
is a text-based markup language used to struc-
ture and mark up content such as text, images,
and hyperlinks in documents that are displayed
as Web pages in an updated standard Web
browser like Chrome and Internet Explorer.
2
CO
2
-equivalent expresses the total effect that
various greenhouse gases (GHG) emitted to the
atmosphere (e.g. CO
2
, CH4, N2O) have on the cli-
mate, in a quantity of carbon dioxide (CO
2
) that
has the same effect on the climate.
Climate neutral or net-zero
Climate neutral or net-zero emissions are
achieved when anthropogenic emissions of
greenhouse gases to the atmosphere are bal-
anced by anthropogenic removals over a speci-
fied period. For Novozymes, the state of net-zero
emissions covers both our operations and our
supply chain, as defined by our science-based
targets.
The International Panel on Climate Change
(IPCC) defines climate neutrality as a state in
which human activities result in no net effect on
the climate system.
Gender balance means that, as a minimum, we
will have 45% women and 45% men across all
professionals and in senior management.
The Greenhouse Gas Protocol defines Scope 3
emissions as all indirect emissions (not included
in scope 2) that occur in the value chain of the
reporting company, including both upstream and
downstream emissions. For Novozymes, our
Scope 3 target boundary is composed of pur-
chased goods and services (Category 1), fuel-
and energy-related activities, not included in
scopes 1 or 2 (Category 3), upstream transporta-
tion and distribution (Category 4), waste gener-
ated in operations (Category 5) and business
travel (Category 6).
Defined as (1) ≥ 99% (by weight) of the biomass
being re-circulated as compost, fertilizer, feed-
stock for biogas or the like; and (2) ≥ 90% (by
weight) of hazardous and nonhazardous waste
being either composted, reused, recycled or
incinerated with energy recovery.
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
Novozymes A/S 172About the Report
About the Report
Editor in chief
Nanna Christine Worsaae
Nacw@novozymes.com
Tel. +45 3077 2259
Anders Enevoldsen
Adev@novozymes.com
Tel. +45 5350 1453
The website contains links to a PDF version of
The Novozymes Report 2023 as well as the
XHTML version submitted to the Danish
Financial Supervisory Authority.
PwC has not audited the Management’s Review,
nor the sections of the report under the head-
ings: The big picture, Our business and
Governance.
The audit covers financial, environmental, social
and governance data. See also the Independent
Auditor’s Reports in the statements section of
The Novozymes Report.
The report has been prepared in accordance with
the International Financial Reporting Standards
(IFRS) as adopted by the EU, additional require-
ments of the Danish Financial Statements Act
and additional requirements of Nasdaq
Copenhagen A/S for the presentation of finan-
cial statements by listed companies. It is also
inspired by the Task Force on Climate Related
Financial Disclosures (TCFD) and GRI
Framework. See Basis of reporting in the report
for more details.
The Novozymes Report contains forward-looking
statements, including statements about future
events, future financial performance, plans,
strategies and expectations. Forward-looking
statements are associated with, but not limited
to, words such as “believe”, “anticipate”,
“expect”, “estimate”, “intend”, “plan”, “project”,
“could”, “may”, “might” and other words of simi-
lar 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 nega-
tively. Such risks and uncertainties may, among
other things, include unexpected developments
in i) the ability to develop and market new prod-
ucts; ii) the demand for Novozymes’ products,
market-driven price decreases, industry
consolidation, and launches of competing prod-
ucts or disruptive technologies in Novozymes’
core business 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; vi) political conditions, such as
acceptance of enzymes produced by genetically
modified organisms; vii) global economic and
capital market conditions, including, but not lim-
ited to, currency exchange rates (USD/DKK and
EUR/DKK in particular, but not exclusively),
interest rates and inflation; viii) significant price
decreases for input and other materials that com-
pete with Novozymes’ biological solutions. The
company undertakes no obligation to update any
forward-looking statements as a result of future
developments or new information.
Novozymes’ reporting ambition is to provide a single integrated report
connecting our business model, strategy, targets and performance
through integrated financial and non-financial data.
Accounts and performanceGovernanceOur businessThe big picture
The Novozymes Report 2023
