XCSE:NSIS-B ESEF Annual Report
NOVOZYMES A/S (XCSE:NSIS-B)
ESEF Annual Report
2023-08-22
For: 2023-06-30
View Original
Added on
September 23, 2026
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
Ester Baiget, President & CEO:
“Our diverse portfolio of solutions and broad end-market exposure creates stability
in a volatile environment and drives the delivery of our profitability targets. This is possible thanks to our unique
capabilities with similar earnings across business areas, and a robust production setup. Full-year organic sales
growth is narrowed slightly to 4-6%, and consistent with our initial guidance, we continue to expect a stronger
second half supported by pipeline innovation, increased market penetration, and a softer comparator. We are
moving firmly towards the implementation of our strategy and with 2025 targets well within reach, we continue to
invest accordingly. We’re working hard to drive even stronger performance as we continue to progress on closing
the combination with Chr. Hansen in Q4 2023 or in Q1 2024.”
Sales and financial performance (1H comments unless otherwise indicated)
• Sales growth in DKK at 2% (3% organic, -1% currency, 0% M&A). (Q2 at 2% organic, -4% currency, 0% M&A).
• Organic growth was supported by solid and broad-based pricing of ~6% (Q2 ~6%); volumes down ~3% in 1H
(Q2 down ~3%).
o Household Care 1% (Q2 flat): Growth in developed markets from increased penetration and despite
declining in-market detergent volumes. Emerging markets grew slightly despite the impact of the war in
Ukraine.
o Food, Beverages & Human Health -6% (Q2 -3%): Negatively impacted by destocking and lower consumer
demand, as well as Human Health being impacted by supply-chain constraints and a soft North American
probiotics market. Adjusted for the large comparator one-off in the first quarter, performance in the
business area declined by roughly 2% in the first half.
o Bioenergy 27% (Q2 26%): Continued strong demand across geographies and a broad, differentiated
portfolio of solutions for multiple end-markets.
o Grain & Tech Processing -11% (Q2 -14%): Grain performance offset by expected softness in tech from
reduced sales of solutions for Covid-19 test kits and, additionally, declining demand in textile.
o Agriculture, Animal Health & Nutrition 7% (Q2 -7%): Growth driven by performance in Animal Health &
Nutrition with strong demand for sustainable yield and health solutions. Performance in Agriculture
muted following destocking in the value chain.
• Organic sales growth in developed markets 5% (Q2 3%); emerging markets flat (Q2 -1%).
• EBIT margin before special items (b.s.i.) at 25.0% (Q2 24.0%). Sequential gross margin improvement since Q3
2022, leading to a 1H 2023 gross margin of 54.7% (Q2 55.4%).
• ROIC incl. goodwill, b.s.i. at 17.0% (ROIC incl. goodwill at 15.9%) and FCF bef. acq. at DKK 0.5 billion.
• Net profit at DKK 1.4 billion including special items and ETR (effective tax rate) at 23%.
• Solid balance sheet at 1.2x NIBD/EBITDA.
Key events
• Collaboration between Novozymes, the Novo Nordisk Foundation, the Bill & Melinda Gates Foundation, and
other relevant players to explore the production of food proteins through fermentation of captured CO
2
.
• Early-stage partnership with Arla Foods Ingredients to explore the area of advanced protein solutions made
with precision fermentation. Initial focus is protein ingredients for medical nutrition.
• Three products launched in Q2, of which one was public, and a total of six products in the first half year.
• Interim dividend pay-out of ~50% of adjusted net profit for the period January 1 to August 31, 2023, expected
to be approved by the Board of Directors to honor existing shareholders ahead of combination with Chr.
Hansen. Pay-out date set for October 17, 2023.
2023 outlook
• Full-year organic sales growth outlook narrowed to 4-6% (previously 4-7%). Pricing is expected to be the main
driver of the organic growth. Sales mix is expected to be different from earlier indication with stronger
performance now expected in Bioenergy. Softer indication for Food, Beverages & Human Health and Grain &
Tech Processing mainly following destocking and lower consumer demand, both business areas still with
stronger growth acceleration in the 2
nd
half of the year.
• Outlook for EBIT margin b.s.i. and ROIC incl. goodwill b.s.i. maintained at 25-26% and 16-17% respectively.
1H 2023
1H 2022
Q2 2023
Q2 2022
2023 outlook
August 9
2023 outlook
April 26
Sales performance, organic
%
3
10
2
10
4 to 6
4 to 7
EBIT margin, before special items*
%
25.0
26.0
24.0
25.9
25 to 26
25 to 26
ROIC incl. goodwill, before special items*
%
17.0
17.5
16 to 17
16 to 17
*Special items include costs related to proposed combination with Chr. Hansen
1H 2023
3%
Organic sales
growth
25.0%
EBIT margin,
before special items
17.0%
ROIC, incl. goodwill,
before special items
Conference call
August 9, 2023
9.00 CEST
Please pre-register
for the call here
Webcast
Diversified portfolio creates overall stability in a volatile environment
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
2/26
Selected key data
1H 2023
1H 2022
Q2 2023
Q2 2022
Sales performance, organic
%
3
10
2
10
Household Care
%
1
0
0
4
Food, Beverages & Human Health
%
-6
10
-3
3
Bioenergy
%
27
23
26
19
Grain & Tech Processing
%
-11
13
-14
19
Agriculture, Animal Health & Nutrition
%
7
14
-7
17
Sales
DKKm
8,840
8,657
4,217
4,286
Sales performance, DKK
%
2
18
-2
20
Gross margin
%
54.7
55.5
55.4
55.5
EBITDA
DKKm
2,691
2,990
1,200
1,487
EBIT before special items*
DKKm
2,211
2,252
1,011
1,110
EBIT margin before special items*
%
25.0
26.0
24.0
25.9
EBIT
DKKm
1,999
2,252
865
1,110
EBIT margin
%
22.6
26.0
20.5
25.9
Net profit
DKKm
1,415
1,656
614
817
Net investments excl. acquisitions
DKKm
974
1,233
547
844
Free cash flow before acquisitions
DKKm
470
969
583
583
NIBD/EBITDA
x
1.2
1.1
ROIC, incl. goodwill, before special items*
%
17.0
17.5
ROIC, incl. goodwill
%
15.9
17.5
Special items*
DKKm
-212
0
-146
0
EPS
5.02
5.92
2.19
2.92
EPS (diluted)
5.00
5.87
2.18
2.90
Avg. USD/DKK
689
680
684
699
*Special items include costs related to the proposed combination with Chr. Hansen
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
3/26
Sales by business area
Distribution of sales by business area, 1H 2023
Household Care
Household Care grew 1% organically in the first half of 2023 with sales flat in reported DKK.
Performance was as expected in developed markets, driven by the sale of solutions for laundry
detergents and achieved despite industry volume softness. Emerging markets continued to see growth
driven by increased penetration of enzyme solutions, more than offsetting the negative impact on the
first quarter results of the war in Ukraine. The Freshness platform performed in line with expectations
and pricing had a positive impact on growth, more than offsetting the slightly reduced volumes.
Second-quarter organic sales were flat and declined 2% in reported DKK. Industry volume softness
and consumer downtrading, particularly in the developed markets, was offset by pricing and
penetration of enzyme solutions across both developed and emerging markets. The general
performance was roughly similar in the first and second quarters.
Food, Beverages & Human Health
Sales in Food, Beverages & Human Health declined 6% organically and 6% in reported DKK in the first
half of the year. Organic sales were negatively impacted by roughly 4 percentage points as the first-
quarter comparator included sales of a specific enzyme solution, which is not sold this year. Underlying
growth trends across subareas with the focus on health, clean label and efficiencies remained intact
with good progress on recent launches as well as a solid innovation pipeline in collaboration with
customers. The underlying slightly negative sales growth came in below expectations, which is
explained by destocking across the value chain in Food and Beverage, as well as lower consumer
demand. The decline in volumes was partly offset by positive pricing, as expected. Food delivered the
strongest underlying performance while Beverages and Human Health were soft. Human Health was
impacted by supply chain constraints affecting the ability to accommodate demand in the robust
healthcare practitioner channel and, additionally, general softness in demand for probiotic solutions
in North America.
In the second quarter, Food, Beverages & Human Health sales declined 3% organically and 5% in
reported DKK compared to the same period of last year. Lower volumes were only partly offset by
positive pricing. The soft performance was driven by destocking across the value chain, and lower
consumer demand, across subareas. Additionally, Human Health declined due supply chain
constraints that restricted supply as well as general softness in demand for probiotic solutions in North
America. However, demand started to improve in the North American market and short-term supply
chain constraints were being resolved towards the end of the quarter.
28%
22%
24%
13%
13%
Household Care
Food, Beverages & Human Health
Bioenergy
Grain & Tech Processing
Agriculture, Animal Health & Nutrition
Organic performance / Performance in DKK
7% / 8%
1% / 0%
-11% / -15%
-6% / -6%
27% / 26%
Total sales 1H y/y
Organic: 3%
DKK: 2%
Household Care 1H y/y
Organic: 1%
DKK: 0%
Food, Beverages & Human
Health 1H y/y
Organic: -6%
DKK: -6%
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
4/26
Bioenergy
Sales in Bioenergy grew 27% organically and 26% in reported DKK in the first half of the year. The
strong performance was driven by the continued penetration of the broad and innovative solution
toolbox allowing for higher yields, throughput, and byproduct value-capture for producers in a
favorable market environment. In particular, the North American market experienced strong
developments despite a roughly 1% decrease in U.S. ethanol production in the first half of 2023, as
reported by the EIA. Performance was also strong outside of North America, driven by innovation,
capacity expansion of corn-based ethanol production in Latin America and supported by growth in
solutions for biodiesel production. In addition, sales of enzymes used in second-generation biofuels,
commonly referred to as biomass conversion, contributed to growth. Overall, growth was positively
impacted by pricing.
Second-quarter sales in Bioenergy continued to grow strongly, by 26% organically and by 21% in
reported DKK year on year. The broad solution toolbox and innovations were the main drivers of the
strong performance that was supported by a favorable market environment despite flat volume growth
in the U.S. ethanol industry, according to the EIA. Sales outside the U.S. also contributed positively,
led by strong growth in Latin America, as well as positive pricing across subareas. Additionally,
solutions for biodiesel production and very strong growth in second-generation biofuels, although
from a small base, supported growth.
Grain & Tech Processing
In the first half of 2023, Grain & Tech Processing sales declined 11% organically and 15% in reported
DKK. The decline was mainly due to negative developments in Tech with sales of enzymes used for
Covid-19 test kits significantly lower, as expected, and a much softer-than-expected textile market.
Strong growth in vegetable oil processing driven by increased penetration of biological solutions was
offset by somewhat softer sales in the grain processing subarea that was somewhat impacted by
destocking in the food-related part of this exposure. Pricing had a positive impact across subareas.
In the second quarter, Grain & Tech Processing sales declined 14% organically and 20% in reported
DKK compared to the same period last year. Positive pricing and strong growth in vegetable oil
processing was offset by the somewhat softer development in the food-related grain exposure and a
significant decline in Tech driven by lower sales of enzymes for Covid-19 test kits and a much softer-
than-expected textile market.
Agriculture, Animal Health & Nutrition
Sales in Agriculture, Animal Health & Nutrition grew 7% organically and 8% in reported DKK in the
first half. Pricing had a positive impact and growth was led by Animal Health & Nutrition driven by
innovation and healthy demand for yield-enhancing solutions. Performance in Agriculture was soft,
impacted by destocking and volatile end-market demand.
Second-quarter sales declined 7% organically and 8% in reported DKK. Negative performance in
Agriculture was only partly offset by growth in Animal Health & Nutrition. The soft performance in
Agriculture was driven by destocking and a difficult comparator. Animal Health & Nutrition showed
better than expected performance driven by recent product launches, more than offsetting the
negative impact from the expected timing as assumed in the Q1 report. Pricing had a positive impact
across subareas.
Bioenergy 1H y/y
Organic: 27%
DKK: 26%
Grain & Tech Processing
1H y/y
Organic: -11%
DKK: -15%
Agriculture, Animal Health &
Nutrition 1H y/y
Organic: 7%
DKK: 8%
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
5/26
Sales by geography
Distribution of sales by geography, 1H 2023
Novozymes grew sales 3% in the first half of 2023, driven by 5% growth in developed markets and flat
performance in emerging markets. Bioenergy was the main driver of growth in developed markets
while Agriculture, Animal Health & Nutrition delivered solid growth. Household Care also contributed
to growth despite declining industry volumes in developed markets. Food, Beverages & Human Health
as well as Grain & Tech Processing declined. In emerging markets, growth was driven by Bioenergy,
while Agriculture, Animal Health & Nutrition and Household Care also contributed positively. This was
offset by negative growth in Food, Beverages & Human Health and Grain & Tech Processing.
In the second quarter, developed markets grew 3%, driven by Bioenergy and partly offset by softness
in Grain & Tech Processing. Emerging markets declined 1% as softness in Food, Beverages & Human
Health, Grain & Tech Processing and Agriculture, Animal Health & Nutrition was only partly offset by
growth in Bioenergy and Household Care.
Europe, the Middle East & Africa
Sales grew 1% organically in the first half, driven by Agriculture, Animal Health & Nutrition while Food,
Beverages & Human Health impacted negatively. Second quarter sales grew 1% and were positively
impacted by developments in Agriculture, Animal Health & Nutrition, partly offset by softness in Grain
& Tech Processing.
North America
In North America, organic sales grew 6% in the first half, driven by Bioenergy and supported by Food,
Beverages & Human Health while Agriculture, Animal Health & Nutrition and Grain & Tech Processing
declined. In the second quarter, organic sales in North America grew 5%, impacted by the same factors
as those in the first half.
Asia Pacific
Sales in Asia Pacific declined by 5% organically in the first half, driven by negative developments in
Grain & Tech Processing and Food, Beverages & Human Health that were partly offset by strong growth
in Agriculture, Animal Health & Nutrition. Organic sales in the second quarter declined by 7%. As for
the first half, the negative developments were due to declines in Grain & Tech Processing and in Food,
Beverages & Human Health.
Latin America
Organic sales in Latin America grew 16% in the first half with growth across all business areas led by
Bioenergy while Food, Beverages & Human Health declined. In the second quarter, organic sales grew
12% and, as for the half year, growth was driven by Bioenergy.
35%
34%
19%
12%
Europe, the Middle East & Africa
North America
Asia Pacific
Latin America
Europe, the Middle East &
Africa 1H y/y
Organic: 1%
DKK: 1%
North America 1H y/y
Organic: 6%
DKK: 7%
Asia Pacific 1H y/y
Organic: -5%
DKK: -9%
Latin America 1H y/y
Organic: 16%
DKK: 14%
16% / 14%
Organic performance / Performance in DKK
1% / 1%
6% / 7%
-5% / -9%
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
6/26
Income statement
Total costs excluding net other operating income, special items, net financials, share of losses in
associates, and taxes amounted to DKK 6,748 million in the first half and DKK 3,221 million in the
second quarter. This was DKK 312 million (5%) and DKK 26 million (1%) higher than in the
corresponding periods of 2022. The year-on-year increases in the first half were mainly due to higher
cost of goods sold and the minor increase in total costs in the second quarter was driven by higher
operating costs compared to the same period last year.
The gross margin was 54.7% for the first half of the year and 55.4% for the second quarter,
corresponding to a decline of 0.8 of a percentage point compared to the first half of 2022 and a 0.1
percentage point decline compared to the second quarter of last year. The decrease in the gross
margin between the two periods was driven by higher input and logistics costs, with prices having a
positive impact, visible in the sequential improvement of the gross margin from the previous three
quarters. Currencies had a slight positive impact on the gross margin in the first half of the year and a
neutral effect in the second quarter.
Operating costs totaled DKK 2,747 million for the first half of the year and DKK 1,340 million for the
second quarter. This was an increase of DKK 162 million (6%) compared to the first half of last year
and a DKK 52 million (4%) increase compared to the second quarter of 2022. The increase in operating
costs was primarily driven by higher sales and distribution costs and strategic investments to support
the long-term growth.
From a ratio perspective, total operating costs for the first half of the year made up 31.1% of sales,
compared to 29.9% for the same period of last year. In the second quarter, total operating costs
amounted to 31.8% of sales compared to 30.1% of sales in the same period last year.
• Sales and distribution costs increased by 8% both in the first half and in the second quarter
to make up 14% of sales in both periods.
• Research and development costs increased by 4% in the first half of the year and 3% in the
second quarter to amount to a ratio of 12% of sales in both periods
• Administrative costs increased 5% in the first half of the year and decreased 3% in the second
quarter, making up 5% of sales in both periods.
Other operating income amounted to DKK 119 million for the first half of the year, representing an
increase of DKK 88 million compared to the corresponding period of 2022. The increase was
predominantly driven by the gain from the divestment of selected waste-water treatment solutions
announced in the first quarter of the year. In the second quarter, other operating income was DKK 15
million, DKK 4 million less than for the same quarter of last year.
Depreciation and amortization amounted to DKK 692 million in the first half of the year and DKK 335
million in the second quarter, corresponding to decreases of DKK 46 million and DKK 42 million
respectively compared to the corresponding periods of 2022. The decreases were mainly driven by
fully depreciated intellectual property from prior-year acquisitions.
EBIT before special items was DKK 2,211 million for the first half of 2023 and DKK 1,011 million for
the second quarter, representing an EBIT margin before special items of 25.0% for the first half and
24.0% for the second quarter. This was a decrease of DKK 41 million (-2%) in the first half of the year
and a decrease of DKK 99 million (-9%) in the second quarter compared to the corresponding periods
of 2022. In the first half of the year, the EBIT margin b.s.i. was negatively impacted by a lower gross
margin driven by higher input prices as well as a higher operating costs-to-sales ratio. Currencies had
a slightly positive impact on the EBIT margin during the first six months of 2023. In the first half of the
year, the two one-off effects affecting the EBIT margin were the gain related to the divestment of
selected waste-water treatment solutions and a negative impact related to resource realignment in the
Total costs
DKK 6,748 million
Gross margin
54.7%
Operating costs
DKK 2,747 million
Depreciation and amortization
DKK 692 million
EBIT
before special items
DKK 2,211 million
EBIT margin
before special items
25.0%
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
7/26
commercial organization, both occurring in the first quarter of this year. Adjusted for these effects, the
underlying EBIT margin b.s.i. for the first half of the year was approximately 2.5 percentage points
lower than the underlying EBIT margin for the first half of 2022, primarily due to a lower gross margin
and reduced leverage from the higher operating cost base.
The underlying EBIT margin b.s.i. in the second quarter was roughly on par with the reported margin
b.s.i. at 24.0%. Currencies had a minor negative effect on the margin for the quarter. Thus, the
underlying margin was approximately 3.0 percentage points below the underlying EBIT margin for the
second quarter of last year, impacted by the same explanations as those for the first half, including
reduced leverage from the higher fixed cost base.
Reported EBIT was DKK 1,999 million for the first half of the year and DKK 865 million for the second
quarter, corresponding to a reported EBIT margin of 22.6% for the first half of the year and 20.5% for
the second quarter. This corresponds to year-on-year decreases of DKK 253 million (-11.2%) for the
first half and of DKK 245 million (-22.1%) for the second quarter. Special items amounted to DKK 212
million in the first half of the year and DKK 146 million in the second quarter and only included costs
related to the proposed combination with Chr. Hansen.
Net financials including the share of losses in associates was a loss of DKK 161 million in the first half
of the year and a loss of DKK 67 million in the second quarter. This represents an increase of DKK 32
million in the first half and an increase of DKK 4 million in the second quarter compared to the
corresponding periods of the previous year, driven primarily by increased interest expenses and
currency hedging costs.
Profit before tax amounted to DKK 1,838 million in the first half and DKK 798 million in the second
quarter, which was DKK 285 million (-13%) lower than in the first half of 2022 and DKK 249 million
(-24%) lower than in the second quarter of last year and primarily driven by the lower EBIT for the
period.
The effective tax rate was 23.0% for the first half of the year and 23.1% for the second quarter. This
was an increase of 1 percentage point and 1.1 percentage points respectively compared to the
corresponding periods of last year and largely driven by merger-related transaction costs, which are
not deductible for tax purposes.
Net profit totaled DKK 1,415 million for the first half of the year and 614 million for the second quarter.
This was DKK 241 million (-15%) less than for the first half of 2022 and DKK 203 million (-25%) less
than for the second quarter of the year, due to the reduced profit before tax, an increase in special
items in the second quarter and a higher effective tax rate compared to the same periods of last year.
EBIT
DKK 1,999 million
EBIT margin
22.6%
Net financial and share of
losses in associates
DKK 161 million
Effective tax rate
23%
Net profit
DKK 1,415 million
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
8/26
Cash flows and balance sheet
Cash flow from operating activities amounted to DKK 1,444 million in the first half of the year and DKK
1,130 million in the second quarter. This was a decrease of DKK 758 million and a decrease of DKK
297 million respectively compared to the corresponding periods of 2022. For the first half year,
developments were mainly driven by changes in working capital due to the timing of payments related
to CAPEX investments, higher trade receivables and slightly lower net profit. In the second quarter,
the lower net profit was the main explanation for the change in operating cash flow.
Net investments excluding acquisitions totaled DKK 974 million for the first half of the year and DKK
547 million for the second quarter. This was DKK 259 million lower in the first half and DKK 297 million
lower in the second quarter respectively than in the corresponding periods of 2022. The decrease
follows the lower investment level expected for 2023 compared to the year before.
Free cash flow before acquisitions was DKK 470 million in the first half of the year and DKK 583 million
in the second quarter, corresponding to a decrease of DKK 499 million compared to the first half of
last year and flat relative to the second quarter of 2022. The decrease in the first half of the year was
predominantly due to the reduced cash flow from operating activities in the first quarter.
Total equity was DKK 13,799 million at June 30, 2023, corresponding to an equity ratio of 48.9%. This
was an increase of DKK 1,306 million and 1.7 percentage points respectively compared to the total
equity of DKK 12,493 million and the 47.2% equity ratio reported at June 30, 2022.
Net interest-bearing debt (NIBD) and the NIBD-to-EBITDA ratio were DKK 7,077 million and 1.2x
respectively at June 30, 2023, corresponding to an increase of DKK 779 million in NIBD and a slight
increase in the NIBD-to-EBITDA ratio from 1.1x at June 30, 2022.
Return on invested capital (ROIC) b.s.i. and including goodwill, was 17.0%. This was 0.5 of a percentage
point lower than for the corresponding period of 2022. The decrease is in line with our expectations
for the year and was mainly driven by the lower operating profit and the increase in capital invested
in the first half of 2023.
The holding of treasury stock at June 30, 2023 was 3,968,916 B shares, which was equivalent to
1.4% of the common stock.
Operating cash flow
DKK 1,444 million
Net investments excluding
acquisitions
DKK 974 million
Free cash flow before
acquisitions
DKK 470 million
Equity ratio
48.9%
NIBD/EBITDA
1.2x
ROIC incl. goodwill,
before special items
17.0%
Treasury stock
1.4%
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
9/26
Sales Outlook
The organic sales growth outlook is narrowed to the range of 4-6% (previous outlook at 4-7%) following
a higher level of destocking and lower consumer demand than previously anticipated, mainly in food-
related areas. Full-year growth is expected to be driven mainly by pricing. Positive pricing is expected
across all business areas, also in the second half, whereas innovation and increased market
penetration are expected to be volume supportive. As expected, growth in the first half of the year was
lower, with a stronger performance expected in the second half. The outlook assumes no major
changes to the current state of the global economic situation and reflects an anticipated levelling-off
of destocking in the second half, mainly in the food-related areas. Sales in reported DKK are forecasted
to be roughly 3 percentage points lower than the organic sales growth range expected for 2023.
Household Care (organic 1% in 1H 2023) organic sales growth is expected to be supported by a
combination of pricing and increased penetration in emerging markets. The outlook includes
expectations that consumer down-trading will stabilize and that developed market volumes also will
be stable in the second half of the year. Emerging markets are expected to continue to grow, while
market penetration with solutions from the Freshness platform will continue. The full-year indication
for organic sales in Household Care remains for growth in the low single digits.
Food, Beverages & Human Health (organic -6% in 1H 2023) organic sales growth is expected to be
driven by Food and Human Health. Pricing, recent innovations, solutions focused on health and
increased demand for quality and clean label solutions, will continue to be the main drivers. Following
higher destocking and lower consumer demand, as well as Human Health being impacted by a softer
North America probiotics market and supply-chain-related constraints in the first half of the year, we
lower the full year indication for growth in the business area. Human Health is now expect to deliver
single-digit (previously double-digit) growth for the full year. The second-half growth acceleration of
the business area is based on an expected levelling off of destocking across Food and Beverages and
supported by the improving North American probiotics market as well as the supply constraints
impacting the first half of the year being resolved. Growth in Human Health remains driven by
innovation, cross-selling, and segment expansion. The organic sales growth for the business area is
now indicated at low single digit (previously high single digit).
Bioenergy (organic 27% in 1H 2023) organic sales growth is expected to be supported by pricing,
market penetration enabled by innovation, capacity expansion of corn-based ethanol production in
Latin America, and market penetration with enzymatic solutions for biodiesel production. Organic
growth will also be supported to a degree by growing sales of solutions for 2G ethanol production.
Bioenergy is now indicated to grow at a mid-teens digit rate (previously high single digit). The mid-point
of the range assumes flat to slightly declining U.S. ethanol production.
Grain & Tech Processing (organic -11% in 1H 2023) organic sales growth is expected to be supported
by pricing, and growth in Grain will be led by market penetration in vegetable oil processing. Tech is
expected to decline, driven by significantly lower sales of enzymes for Covid-19 test kits and a soft
textile market. Sales in Grain & Tech Processing are now indicated to decline by a low single-digit rate
(previously low-to-mid single digit growth) especially following a slower recovery in textile than
previously expected, as well as destocking effects impacting the food-related grain exposure.
Agriculture, Animal Health & Nutrition (organic 7% in 1H 2023) organic sales growth is expected to be
driven by Animal Health & Nutrition, with growth supported by pricing, innovation, and higher end-
market demand. For Agriculture, pricing will support growth but is not expected to fully offset the
negative impact from destocking and volatile end-markets. Innovation and a more diversified
commercial model continue to be enablers of increased market penetration of sustainable BioAg
solutions. The indication for Agriculture, Animal Health & Nutrition is for growth at a rate in the mid-
to-high single digits.
Organic sales performance
4% to 6%
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
10/26
Financial outlook
For 2023, Novozymes maintains expectations of a solid EBIT margin b.s.i. of 25% to 26% (2022: 26.4%,
and roughly 1 percentage point below 26.4% when excluding one-offs). Compared to 2022, the EBIT
margin will benefit from price increases, sales growth, and productivity improvements. Significantly
higher input costs, especially those that are energy-related, currency headwinds, and continued
investments in the business as well as lower other operating income are expected to have a negative
year-on-year impact. The gross margin is expected to be at a level similar to that of 2022, with the
negative impact of higher energy and other input costs to be offset by price increases and productivity
improvements during the year.
Return on invested capital (ROIC), including goodwill, b.s.i. is maintained at 16% to 17% (2022: 17.9%).
Lower NOPAT and higher invested capital, mainly from acquisitions, are the main drivers of the
expected year-on-year developments.
The following is provided for modeling purposes:
Special items are still expected to be in the DKK 0.3-0.7 billion range and to include costs related to
the proposed combination with Chr. Hansen.
Net financial costs are expected to be around DKK 200 million (2022: DKK 2 million income) mainly
driven by hedging costs and primarily related to USD forward contracts, as well as somewhat higher
interest expenses.
The effective tax rate is expected at around 23% for 2023 (2022: 19%).
Net investments are expected at DKK 2.1 to 2.4 billion (2022: DKK 2.9 billion). This reflects
maintenance, optimization and expansion investments, including in new food and health-related
customer co-creation centers, as well as roughly DKK 0.4 billion related to the investment in the
production line for Advanced Protein Solutions in Blair, Nebraska, U.S.
Free cash flow (FCF) before acquisitions is expected at DKK 1.8 to 2.4 billion (2022: DKK 1.1 billion),
mainly impacted by lower net investments.
2023 Outlook ***
August 9
2023 Outlook ***
April 26
Sales performance, organic
%
4-6
4-7
EBIT margin before special items*
%
25-26
25-26
ROIC** before special items*
%
16-17
16-17
For modeling purposes:
Special items*
DKKbn
0.3-0.7
0.3-0.7
Net financial costs
DKKm
~200
~200
Effective tax rate
%
~23
~23
Free cash flow before acquisitions
DKKbn
1.8-2.4
1.8-2.4
Net investments
DKKbn
2.1-2.4
2.1-2.4
*Special items include costs related to the proposed combination with Chr. Hansen.
**Including goodwill.
***Assumes constant currencies from the date of this announcement and for the remainder of the year.
EBIT margin,
before special items
25% to 26%
ROIC, incl. goodwill,
before special items
16% to 17%
Special items
DKK 0.3 to 0.7 billion
Net financial costs
DKK ~200 million
Effective tax rate
~23%
Net investments
DKK 2.1 to 2.4 billion
FCF before acquisitions
DKK 1.8 to 2.4 billion
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
11/26
Long-term financial targets
Novozymes is fully committed to its long-term targets to 2025 as they were introduced in 2021. These
are: Organic sales CAGR of 5% or higher, an EBIT margin of 26% or higher, and ROIC including goodwill
of 20% or higher. Following the announcement of the proposed combination with Chr. Hansen,
Novozymes has recognized costs related to the combination as special items to enable transparent
reporting of Novozymes’ recurring activities. As such, the financial targets will exclude these costs,
which will be specified separately.
2021
2022
2023 outlook
2025 target*
Organic sales growth
6%
9%
4-6%
Grow our sales organically by a
compounded annual growth rate
(CAGR) of 5% or higher.
EBIT margin, before special
items**
26.8%
26.4%
25-26%
26% or higher, and not below 25% in
any individual year.
ROIC***, before special items**
19.3%
17.9%
16-17%
20% or higher by 2025.
* All targets assume constant currencies, no additional acquisitions or divestments beyond what has already been communicated/proposed, no major
unusual items, a gradual normalization of the global economy and supply chain, and no new severe disruptions of the global economy or
geopolitical environment.
** Special items include costs related to the proposed combination with Chr. Hansen
*** Including goodwill
Nonfinancial milestones, commitments, and targets
As a guide to Novozymes’ journey towards achieving its long-term commitments, new nonfinancial
milestones and targets have been set for 2025 on Operations and on Employees & society. Novozymes
is committed to high standards and ambitious actions to improve its climate, water and waste
footprint.
The nonfinancial aspect of the company combines integrated shorter-term milestones and
commitments leading towards clearly defined long-term targets until 2030 as well as 2050. The net-
zero target covers scopes 1, 2 and 3 emissions and has been validated by the Science Based Targets
initiative
1
.
Additionally, focus will be on the continued promotion of an inclusive and diverse workplace where
employees can stay safe, thrive and grow.
Targets & commitments
2025 Milestones
Long-term
Operations
Climate
Reduce absolute CO
2
emissions
1
65% from operations
75% from operations by 2030
35% from supply chain by 2030
Net-zero by 2050
Purchase renewable electricity
100%
Water
Restore water in basins close to our production
sites where WASH is a challenge
2
10 billion liters
30 billion liters by 2030
Improve freshwater withdrawal by recycling
more water
2
10%
15% by 2030
20% by 2035
Circular
Zero waste to landfill from operations
3
Two key circular projects
in pilots with
demonstrated benefits
Achieve by 2030
Key circular projects
Three key circular projects
successfully implemented by
2030
Employees
& society
Include
Women and men in senior management
4
> 35% women
> 45% women and 45% men by
2030
Women and men across all professionals
5
> 45% women
> 45% women and 45% men by
2030
Thrive &
Inspire
Three-year rolling average of occupational
injuries with absence
6
≤ 1.5
A workplace where employees
stay safe, thrive and grow
Pledge 1% of our time to
community outreach
Thrive index
7
Achieve same score as
benchmark
1
Novozymes commits to reach net-zero GHG emissions across the value chain by 2050. Near-Term Targets: Novozymes commits to reduce absolute scopes
1 and 2 GHG emissions by 75% by 2030 from a 2018 base year. Novozymes also commits to increase annual sourcing of renewable electricity from 37%
in 2018 to 100% by 2025. Novozymes further commits to reduce absolute scope 3 GHG emissions from purchased goods and services, fuel and energy-
related activities, upstream transportation and distribution, waste generated in operations and business travel by 35% by 2030 from a 2018 base year.
Long-Term Targets: Novozymes commits to reduce absolute scopes 1 and 2 GHG emissions by 90% by 2050 from a 2018 base year. Novozymes also
commits to reduce absolute scope 3 GHG emissions from purchased goods and services, fuel and energy related activities, upstream transportation and
distribution, waste generated in operations and business travel by 90% within the same timeframe. The target boundary includes biogenic emissions and
removals associated with the use of bioenergy.
2
From a 2021 baseline.
3
The targets do not include sites with activities not considered to have a significant environmental impact, e.g. sales offices, R&D labs, etc.
4
Percentage of women and men in director positions or higher (i.e. director, vice president or executive vice president).
5
Percentage of women and men across professional, manager and senior leadership levels.
6
Lost-time injuries per million working hours.
7
Developed from specific questions in our annual employee survey.
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
12/26
Currency exposure
Sales by currency, 1H 2023
Other things being equal, a 5% movement in USD/DKK is expected to have an annual positive/negative
impact on EBIT of around DKK 130-160 million, and a 5% movement in EUR/DKK is expected to have
an annual positive/negative impact on EBIT of DKK ~200 million.
Hedging of net currency exposure and currency exchange rates
In 2022, the full currency exposure was hedged at an average rate of USD/DKK 6.29. For 2023, the
exposure is fully hedged at an average rate of USD/DKK 6.96.
The 2023 outlook is based on exchange rates for the company’s key currencies remaining at the closing
rates on August 8 for the full year.
DKK
EUR
USD
BRL
CNY
Average exchange rate, 1H 2023
745
689
136
100
Average exchange rate, 1H 2022
744
680
134
105
Estimated average exchange rate 2023*
745
682
135
98
Estimated average exchange rate 2023
compared to 2022
0%
-4%
-1%
-6%
*At August 8, 2023.
~34%
~38%
~7%
~6%
~15%
EUR
USD
CNY
DKK
Others
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
13/26
Accounting policies
The interim report for the first half of 2023 has been prepared in accordance with IAS 34 and
additional Danish regulations for the presentation of quarterly interim reports by listed companies.
The interim report for the first half of 2023 follows the same accounting policies as the annual report
for 2022 except for all new, amended or revised accounting standards and interpretations (IFRSs)
endorsed by the EU effective for the accounting period beginning on January 1, 2023. These IFRSs
have not had any impact on the Group’s interim report.
Interim dividend
In connection with the merger agreement, Novozymes and Chr. Hansen agreed on certain specific
restrictions in respect of distributions to their shareholders until completion of the proposed
combination. The parties have agreed that Novozymes can make a dividend payout in respect of its
earnings for the period January 1, 2023 to August 31, 2023, up to an amount corresponding to a
dividend pay-out ratio of around 50% of adjusted net profit. The Board of Directors intends to approve
such a dividend with October 17, 2023 as the pay-out date (October 12, 2023 as the last day of trading
cum dividend), and the pay-out is subject to closing of the proposed combination not taking place prior
to the pay-out date.
Forward-looking statements
This company announcement and its related comments contain forward-looking statements, including
statements about future events, future financial performance, plans, strategies and expectations.
Forward-looking statements are associated with words such as, but not limited to, “believe”,
“anticipate”, “expect”, “estimate”, “intend”, “plan”, “project”, “could”, “may”, “might” and other words
of a similar meaning. Forward-looking statements are by their very nature associated with risks and
uncertainties that may cause actual results to differ materially from expectations, both positively and
negatively. Such risks and uncertainties may include unexpected developments in i) the ability to
develop and market new products; ii) the demand for Novozymes’ products, market-driven price
decreases, industry consolidation, and launches of competing products or disruptive technologies in
Novozymes’ core areas; iii) the ability to protect and enforce the company’s intellectual property rights;
iv) significant litigation or breaches of contract; v) the materialization of the company’s growth
platforms, notably the opportunity to market biomass conversion technologies or the development of
microbial solutions for broad-acre crops; vi) political conditions, such as acceptance of enzymes
produced by genetically modified organisms; vii) global economic and capital market conditions,
including, but not limited to, currency exchange rates (USD/DKK and EUR/DKK in particular, but not
exclusively), interest rates and inflation; and viii) significant price decreases for inputs and materials
that compete with Novozymes’ biological solutions. The company undertakes no duty to update any
forward-looking statements as a result of future developments or new information.
Contact information
Investor Relations
Tobias Bjorklund (U.S.)
+45 3077 8682
Ludmila Cebanov
+45 3077 0554
Anders Enevoldsen
+45 5350 1453
Media Relations
Lina Danstrup
+45 3077 0552
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
14/26
Statement of the Board of Directors and the Executive
Management
Bagsvaerd, August 9, 2023
EXECUTIVE MANAGEMENT
Ester Baiget
President & CEO
Lars Green
CFO
BOARD OF DIRECTORS
Cornelis (Cees) de Jong
Chair
Kim Stratton
Vice Chair
Anne Breum
Heine Dalsgaard
Sharon James
Anders Hentze Knudsen
Kasim Kutay
Preben Nielsen
Morten Alexander Sommer
Jens Øbro
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
15/26
Appendices
Appendix 1 Main items and key figures 16
Key figures 16
Income statement 17
Statement of comprehensive income 18
Appendix 2 Distribution of sales 19
Business areas 19
Geography 20
Appendix 3 Statement of cash flows 21
Statement of cash flows 21
Appendix 4 Balance sheet and Statement of equity 22
Balance sheet, Assets 22
Balance sheet, Liabilities 23
Statement of shareholders’ equity 24
Appendix 5 Miscellaneous 25
Publicly announced product launches in 2023 25
Company announcements made in the 2023 financial year 26
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
16/26
Appendix 1 Main items and key figures
Key figures
DKK million 1H 2023 1H 2022 % change Q2 2023 Q2 2022 % change
Revenue 8,840 8,657 2% 4,217 4,286 (2)%
Gross profit 4,839 4,806 1% 2,336 2,379 (2)%
Gross margin 54.7% 55.5% 55.4% 55.5%
EBITDA 2,691 2,990 (10)% 1,200 1,487 (19)%
EBITDA margin 30.4% 34.5% 28.5% 34.7%
Operating profit (EBIT) before special items* 2,211 2,252 (2)% 1,011 1,110 (9)%
EBIT margin before special items* 25.0% 26.0% 24.0% 25.9%
Operating profit (EBIT) 1,999 2,252 (11)% 865 1,110 (22)%
EBIT margin 22.6% 26.0% 20.5% 25.9%
Share of result in associates (4) (3) 1 (2)
Net financials (157) (126) (68) (61)
Profit before tax 1,838 2,123 (13)% 798 1,047 (24)%
Tax (423) (467) (9)% (184) (230) (20)%
Net profit 1,415 1,656 (15)% 614 817 (25)%
Earnings per DKK 2 share 5.02 5.92 (15)% 2.19 2.92 (25)%
Earnings per DKK 2 share (diluted) 5.00 5.87 (15)% 2.18 2.90 (25)%
Net investments excl. acq. 974 1,233 (21)% 547 844 (35)%
Free cash flow before net acq. and purchase of
financial assets
470 969 (51)% 583 583 0%
ROIC** before special items* 17.0% 17.5%
ROIC** 15.9% 17.5%
Net interest-bearing debt 7,077 6,298
Equity ratio 48.9% 47.2%
Return on equity 26.9% 27.0%
Debt-to-equity 51.3% 50.4%
NIBD / EBITDA 1.2 1.1
Number of employees 6,852 6,657
* Special items include costs related to the proposed combination of Novozymes and Chr. Hansen.
** Including goodwill.
Novozymes' stock
Jun. 30,
2023
Jun. 30,
2022
Common stock (million)
281.0 281.0
Net worth per share (DKK)
47.64 43.06
Denomination of share (DKK)
2.00 2.00
Nominal value of common stock (DKK million) 562.0 562.0
Treasury stock (million) 4.0 4.7
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
17/26
Income statement
DKK million 1H 2023 1H 2022 Q2 2023 Q2 2022
Revenue 8,840 8,657 4,217 4,286
Cost of goods sold (4,001 ) (3,851 ) (1,881 ) (1,907 )
Gross profit 4,839 4,806 2,336 2,379
Sales and distribution costs (1,233 ) (1,137 ) (594 ) (552 )
Research and development costs (1,032 ) (991 ) (515 ) (498 )
Administrative costs (482 ) (457 ) (231 ) (238 )
Other operating income, net 119 31 15 19
Operating profit (EBIT) before special items 2,211 2,252 1,011 1,110
Special items (212 ) - (146 ) -
Operating profit (EBIT) 1,999 2,252 865 1,110
Share of result in associates (4 ) (3 ) 1 (2 )
Net financials (157 ) (126 ) (68 ) (61 )
Profit before tax 1,838 2,123 798 1,047
Tax (423 ) (467 ) (184 ) (230 )
Net profit 1,415 1,656 614 817
Attributable to
Shareholders in Novozymes A/S 1,390 1,641 606 809
Non-controlling interests 25 15 8 8
Specification of net financials
Foreign exchange gain/(loss), net (53 ) (128 ) (17 ) (82 )
Interest income/(costs) (64 ) (21 ) (38 ) (11 )
Other financial items (40 ) 23 (13 ) 32
Net financials (157 ) (126 ) (68 ) (61 )
Earnings per DKK 2 share 5.02 5.92 2.19 2.92
Average no. of A/B shares outstanding (million) 277.0 277.1 277.0 277.0
Earnings per DKK 2 share (diluted) 5.00 5.87 2.18 2.90
Average no. of A/B shares, diluted (million) 277.9 279.4 277.9 279.4
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
18/26
Statement of comprehensive income
DKK million 1H 2023 1H 2022 Q2 2023 Q2 2022
Net profit
Currency translation of subsidiaries and non-controlling
interests
(325 ) 704 (124 ) 433
Currency translation adjustments (325 ) 704 (124 ) 433
Fair value adjustments
(25 ) (157 ) (4 ) (134 )
Tax on fair value adjustments
Cash flow hedges reclassified to cost of good sold
Cash flow hedges reclassified to financial costs 12 109 (15 ) 61
Tax on reclassified fair value adjustments
(16 ) (24 ) (5 ) (13 )
Cash flow hedges
Other comprehensive income
(291 ) 667 (112 ) 377
Comprehensive income
Attributable to
Shareholders in Novozymes A/S 1,101 2,307 495 1,185
Non-controlling interests 23 16 7 9
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
19/26
Appendix 2 Distribution of sales
Business areas
2023
2022 % change % currency % M&A % organic
DKK million 1H 1H impact impact growth
Consumer Biosolutions
Household Care 2,457 2,458 0 (1) 0 1
Food, Beverages & Human Health 1,967 2,103 (6) 0 0 (6)
Agriculture & Industrial Biosolutions
Bioenergy
2,108 1,671 26 (1) 0 27
Grain & Tech Processing
1,145 1,347 (15) (3) (1) (11)
Agriculture, Animal Health & Nutrition
1,163 1,078 8 1 0 7
Sales 8,840 8,657 2 (1) 0 3
2023
2022 % change % currency % M&A % organic
DKK million Q2 Q2 impact impact growth
Consumer Biosolutions
Household Care
1,200 1,228 (2) (2) 0 0
Food, Beverages & Human Health
951 1,004 (5) (2) 0 (3)
Agriculture & Industrial Biosolutions
Bioenergy
1,060 874 21 (5) 0 26
Grain & Tech Processing
546 679 (20) (4) (2) (14)
Agriculture, Animal Health & Nutrition
460 501 (8) (1) 0 (7)
Sales 4,217 4,286 (2) (4) 0 2
% change
DKK million Q2 Q1 Q4 Q3 Q2 Q1 Q2/Q2
Consumer Biosolutions
Household Care
1,200 1,257 1,230 1,300 1,228 1,230 (2)
Food, Beverages & Human Health
951 1,016 1,051 980 1,004 1,099 (5)
Agriculture & Industrial Biosolutions
Bioenergy
1,060 1,048 1,060 1,017 874 797 21
Grain & Tech Processing
546 599 634 626 679 668 (20)
Agriculture, Animal Health & Nutrition
460 703 554 444 501 577 (8)
Sales 4,217 4,623 4,529 4,367 4,286 4,371 (2)
2022
2023
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
20/26
Geography
2023
2022
% change % currency % M&A % organic
DKK million 1H 1H impact impact growth
Europe, Middle East & Africa 3,127 3,102 1 0 0 1
North America 2,964 2,781 7 1 0 6
Asia Pacific 1,650 1,807 (9) (4) 0 (5)
Latin America 1,099 967 14 (2) 0 16
Sales 8,840 8,657 2 (1) 0 3
Developed markets 5,760 5,482 5 0 0 5
Emerging markets 3,080 3,175 (3) (3) 0 0
Sales 8,840 8,657 2 (1) 0 3
2023
2022 % change % currency % M&A % organic
DKK million Q2 Q2 impact impact growth
Europe, Middle East & Africa 1,462 1,469 0 (1) 0 1
North America 1,422 1,395 2 (3) 0 5
Asia Pacific 791 913 (13) (6) 0 (7)
Latin America 542 509 6 (6) 0 12
Sales 4,217 4,286 (2) (4) 0 2
Developed markets 2,718 2,688 1 (2) 0 3
Emerging markets 1,499 1,598 (6) (5) 0 (1)
Sales 4,217 4,286 (2) (4) 0 2
% change
DKK million Q2 Q1 Q4 Q3 Q2 Q1 Q2/Q2
Europe, Middle East & Africa 1,462 1,665 1,504 1,489 1,469 1,633 0
North America 1,422 1,542 1,583 1,465 1,395 1,386 2
Asia Pacific 791 859 916 843 913 894 (13)
Latin America 542 557 526 570 509 458 6
Sales 4,217 4,623 4,529 4,367 4,286 4,371 (2)
Developed markets 2,718 3,042 2,882 2,748 2,688 2,794 1
Emerging markets 1,499 1,581 1,647 1,619 1,598 1,577 (6)
Sales 4,217 4,623 4,529 4,367 4,286 4,371 (2)
2022
2023
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
21/26
Appendix 3 Statement of cash flows
Statement of cash flows
DKK million 1H 2023 1H 2022 Q2 2023 Q2 2022
Net profit
Reversals of non-cash items
Tax paid
(235 ) (345 ) (75 ) (60 )
Interest received
Interest etc. paid
(55 ) (25 ) (32 ) (10 )
Cash flow before change in working capital
Change in working capital
(Increase)/decrease in receivables and contract assets
(94 ) (121 ) 168 155
(Increase)/decrease in inventories
(181 ) (416 ) (119 ) (357 )
Increase/(decrease) in payables, deferred income and
contract liabilities
(537 ) 35 21 194
Currency translation adjustments
Cash flow from operating activities
Investments
Purchase of intangible assets
(45 ) (41 ) (32 ) (31 )
Sale of intangible assets
Sale of property, plant and equipment
Purchase of property, plant and equipment
(932 ) (1,193 ) (517 ) (813 )
(974 ) (1,233 ) (547 ) (844 )
Business acquisitions, divestments and purchase and sale of
financial assets
(70 ) (77 ) (158 ) (22 )
Free cash flow
Financing
Borrowings
Repayment of borrowings
(1,162 ) (846 ) (285 ) (726 )
Overdraft facilities, net
Repayment of lease liabilities
(64 ) (58 ) (31 ) (30 )
Shareholders:
Purchase of treasury stock
Sale of treasury stock
Dividend paid
(1,663 ) (1,525 ) (1 ) (1 )
Withheld dividend tax
Cash flow from financing activities
(357 ) (859 ) (456 ) (667 )
Net cash flow
Unrealized gain/(loss) on currencies and financial assets,
included in cash and cash equivalents
(36 ) 17 (21 ) 22
Change in cash and cash equivalents, net
Cash and cash equivalents - Beginning of period
Cash and cash equivalents at June 30
Undrawn committed credit facilities at June 30, 2023 were DKK 5,130 million.
Cash flow from investing activities before acquisitions,
divestments and purchase of financial assets
Free cash flow before acquisitions, divestments, purchase
and sale of financial assets
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
22/26
Appendix 4 Balance sheet and Statement of equity
Balance sheet, Assets
DKK million
Jun. 30,
2023
Jun. 30,
2022
Dec. 31,
2022
Goodwill
Acquired patents, licenses and know-how
Completed IT development projects 176 223 204
IT development projects in progress
Intangible assets 4,564 4,967 4,698
Land and buildings
Plant and machinery
Other equipment 969 1,045 1,028
Assets under construction and prepayments
Property, plant and equipment 12,335 11,254 12,074
Deferred tax assets 1,617 1,565 1,623
Other financial assets (non-interest-bearing) 89 86 92
Investment in associates 219 26 223
Other receivables
Non-current assets 18,854 17,935 18,742
Raw materials and consumables 544 518 603
Goods in progress 1,417 1,187 1,333
Finished goods
Inventories 3,962 3,466 3,803
Trade receivables 3,645 3,395 3,454
Contract assets 121 67 151
Tax receivables 268 263 352
Other receivables
Receivables 4,301 4,017 4,317
Other financial assets (non-interest-bearing) 63 64 80
Cash and cash equivalents 1,048 1,013 1,041
Current assets 9,374 8,560 9,241
Assets 28,228 26,495 27,983
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
23/26
Balance sheet, Liabilities
DKK million
Jun. 30,
2023
Jun. 30,
2022
Dec. 31,
2022
Common stock 562 562 562
Currency translation adjustments (191 ) 695 132
Cash flow hedges 115 (69 ) 81
Retained earnings
Equity attributable to shareholders in Novozymes A/S
Non-controlling interests
Total equity 13,799 12,493 14,228
Share purchase liability 792 775 760
Deferred tax liabilities 1,737 1,381 1,653
Provisions 116 152 119
Contingent consideration - 218 224
Deferred income 103 107 129
Other financial liabilities (interest-bearing) 4,573 3,864 3,619
Non-current lease liabilities
Non-current liabilities 7,593 6,840 6,792
Other financial liabilities (interest-bearing) 3,158 2,976 2,818
Other financial liabilities (non-interest-bearing) 61 197 101
Lease liabilities 122 128 123
Provisions 12 26 10
Contingent consideration 232 377 158
Trade payables 1,321 1,597 1,869
Contract liabilities 84 114 94
Deferred income 60 25 44
Tax payables 377 510 326
Other payables
Current liabilities 6,836 7,162 6,963
Liabilities 14,429 14,002 13,755
Liabilities and equity 28,228 26,495 27,983
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
24/26
Statement of shareholders’ equity
DKK million
Common
stock
Currency
translation
adjustments
Cash flow
hedges
Retained
earnings
Total
Non-
controlling
interests
Total
Equity at January 1, 2023
Net profit for the period
Other comprehensive income for the period
(323 ) 34 (289 ) (2 ) (291 )
Total comprehensive income for the period
(323 ) 34 1,390 1,101 23 1,124
Sale of treasury stock
Dividend
(1,662 ) (1,662 ) (1 ) (1,663 )
Stock-based payment
Non-controlling interests and share purchase liability
(32 ) (32 ) - (32 )
Tax related to equity items
(18 ) (18 ) (18 )
Changes in equity
Equity at June 30, 2023
Equity at January 1, 2022
Net profit for the period
Other comprehensive income for the period
Total comprehensive income for the period
Purchase of treasury stock
(500 ) (500 ) (500 )
Sale of treasury stock
Write-down of common stock
(2 ) 2 - -
Dividend
(1,524 ) (1,524 ) (1 ) (1,525 )
Stock-based payment
Non-controlling interests and share purchase liability
(58 ) (58 ) - (58 )
Tax related to equity items
(93 ) (93 ) (93 )
Changes in equity
(2 ) 703 (37 ) (392 ) 272 15 287
Equity at June 30, 2022
Attributable to shareholders in Novozymes A/S
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
25/26
Appendix 5 Miscellaneous
Publicly announced product launches in 2023
In the first half, six new products were launched of which three were in Q2. Of the six products, two were public.
Product
Description
Sustainability benefit*
MenaquinGold ™
MenaquinGold™ is a natural, fermentation-
based vitamin K2-7 that helps our
customers elevate their product health
potential. Vitamin K2-7 plays a unique role
in transporting calcium from the blood to
bones and is for these reasons, recognized
as supporting bone and cardiovascular
health, amongst other health benefits.
MenaquinGold™ can help customers
leverage these benefits in various formats,
including supplements, food, and
beverage products.
In addition to providing several key health
benefits, Novozymes’ unique plant-based
fermentation process uses fewer raw
materials, less energy, less water, and fewer
solvents than alternative production
processes.
Protide® L
Protide® L is a natural protease that helps
customers elevate the nutritional value of
their feed ingredients as well as save cost
during production. With this innovation, it
will now be possible to improve protein
absorption and therefore increase
nutritional value, as well as broaden the
choice of feed ingredients through
enzymatic hydrolysis.
Protide® L contributes to sustainable
development by turning agricultural by
products into feed resources and increasing
the nutritional value of feed.
Additionally, the enzymatic hydrolysis
process allows our customers to use less
harsh chemicals in their production
process.
* The sustainability benefits are based on quantitative and/or qualitative evaluations. Novozymes does not have
quantifiable data or documentation to verify the benefits of all product launches.
Interim report for 1H 2023
Company Announcement no. 54 August 9, 2023 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
26/26
Company announcements made in the 2023 financial year
(Excluding Management's trading in the Novozymes stock, major shareholder announcements and stock buyback status)
January 25, 2023
Proposal of candidates to the Board of Directors
January 26, 2023
Group financial statement for 2022
March 2, 2023
Resolutions from Novozymes A/S’ Annual Shareholders' Meeting 2023
March 8, 2023
Publication of exemption document in relation to the proposed combination of
Novozymes and Chr. Hansen, confirmation of outlook for 2023 and proposed candidates
to the Board of Directors of the combined company
March 30, 2023
Combination between Novozymes and Chr. Hansen approved by the Novozymes
shareholders
March 30, 2023
Resolutions from Novozymes A/S’ Extraordinary Shareholders' Meeting 2023
April 26, 2023
Interim report for Q1 2023
May 4, 2023
Change to the Executive Leadership Team