The Novozymes
Report 2021
Novozymes A/S
CVR-nr.: 10007127
Krogshøjvej 36, DK-2880 Bagsværd
Novozymes Annual Report 2021
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Explore the highlights of The
Novozymes Report 2021
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“Throughout 2021, we made
important moves to better
position Novozymes, and our
employees showed an
impressive ability to bring
new innovations to market
and keep our production run-
ning and delivering on time.”
15
Contents
4 Novozymes – The world’s
leading biotech powerhouse
5 2021 in brief
13 Economic contribution
14 Five-year summary
15 Message from the Chair
and the CEO
19 Strategy
27 Targets & outlook for 2022
35 Corporate governance
40 Board of Directors
43 Executive Leadership Team
45 Risk Management
51 Summary of the
Remuneration report
55 The Novozymes stock
58 
66 Performance and consolidated environmental data
68 Performance and consolidated social and governance data
70 Notes
143 Statements
148 Financial statements for Novozymes A/S
162 Glossary
163 About the report
The big picture Our business Governance Accounts and performance
Message from the
Chair and the CEO
Strategy
Our strategy, Unlocking
growth – powered
by biotech, will
guide the way
towards
2025
Accounts and performance
Governance
Our business
The big picture
Contents
2Novozymes A/S
The world needs a
future built on biotech
– and we intend to
catalyze the change
The big
picture
4 Novozymes – The world’s
l eading biotech powerhouse
5 2021 in brief
13 Economic contribution
14 Five-year summary
15 Message from the Chair
and the CEO
Accounts and performance
Governance
Our business
Accounts and performance
Governance
Our business
The big picture
Novozymes A/S
Welcome to the world's
leading biotech powerhouse
...we use the
power of biotech...
...to solve global
needs
Grounded in our
strong purpose...
O
ur growing world is faced with pressing needs, emphasizing the necessity for solutions that can
ensure the health of the planet and its population. At Novozymes, we believe biotech is at the
core of connecting those societal needs with the challenges and opportunities our customers face.
Novozymes is the global market leader in biological solutions, producing a wide range of enzymes,
microorganisms, technical and digital solutions which help our customers, amongst other things,
add new features to their products and produce more from less.
What if
Then
World-class
bioengineering
toolbox
High-quality
scale-up and
manufacturing
Mastery of
real-world
applications
10% of the
world’s animal
protein was
replaced with
alternative
protein...
...900,000 km
of agricultural
land would be
saved
Detergents
were
biobased...
...5 million tonnes
of fossil-based
chemicals would be
avoided
3% of all liquid
transportation
fuels were
biobased...
...300 million
tonnes of
CO would be
avoided
10% of chemical
pesticides were
replaced with
biologicals...
...250 million
tonnes of chemicals
would be avoided
from
entering our
ecosystems
The world’s leading biotech powerhouse
To read more about our business model,
go to Novozymes.com
The big picture
The world’s leading biotech powerhouse 4Novozymes A/S
Accounts and performance
Governance
Our business
100
In brief
Performance highlights
Financial 
6%
Organic sales
growth
19.3%
ROIC incl. goodwill
26.8%
EBIT margin
2.9 DKKbn

before acquisitions
Electricity
sources
Gender diversity in
senior management
Renewable
Female
Non-renewable
Male
68%
34%
32%
100
Waste
destination
Recovered Not recovered
98% 2%
66%
Outlook

outlook

outlook
Realized

Sales performance, organic %  
EBIT margin %   
ROIC (including goodwill) %  19 to 20 

acquisitions DKKbn   
Outlook
2022
See more details on performance
in Accounts and performance
The big picture
In brief 5Novozymes A/S
Accounts and performance
Governance
Our business
3% 31%2% 10%
Sales by geography
Full-year organic sales grew 2%
compared to the previous year with a
strong performance in Food, Beverages
& Human Health while Household Care,
Agriculture and Animal Health &

Full-year organic sales in North
America increased by 3% organically in
2021 compared to 2020. Bioenergy
and Grain & Tech Processing were the
main growth drivers while particularly
Agriculture, Animal Health & Nutrition
declined.
Full-year organic sales increased by
10% in 2021 compared to 2020 with all
-
tively. Growth was especially strong in
Food, Beverages & Human Health and
Grain & Tech Processing.
Sales in Latin America increased by
31% organically in 2021 with broad-
based growth across all business areas.
Performance was especially strong for
Agriculture, Animal Health & Nutrition,
Bioenergy, and Grain & Tech
Processing.
Of sales Of salesOf sales Of sales
Organic sales growth Organic sales growthOrganic sales growth Organic sales growth
31% 11%38% 20%
North
America
Europe, the Middle East
& Africa
Latin
America
Asia

The big picture
In brief 6Novozymes A/S
Accounts and performance
Governance
Our business
* Organic sales growth
T

business areas grew in
2021. Food, Beverages &
Human health, Agriculture,
Grain & Tech Processing and
Bioenergy all contributed with
double-digit growth while
Household Care and Agriculture,
Animal Health & Nutrition
performed much as expected.
Sales by business area
Performance
Household Care
32%
of total sales
2020: 35%
Bioenergy
18%
of total sales
2020: 18%
Agriculture, Animal
Health & Nutrition
12%
of total sales
2020: 13%
Food, Beverages
& Human Health
23%
of total sales
2020: 19%
Grain & Tech
Processing
15%
of total sales
2020: 14%
-1%*
0%*
14%*
11%*
13%*
The big picture
In brief 7Novozymes A/S
Accounts and performance
Governance
Our business
SDG impact
Key trends
• Consumers increasingly demand
solutions that enable deeper,
hygienic cleaning of laundry and
hard surfaces.
• Transition away from bulkier pow-
der and liquids to compact unit
doses supported by growing con-
sumer focus on convenience,
reduction of plastic use and
increased online sales.
• Industry focus on bio-based and
green detergents is strong, with
renewable and biodegradable
enzymes supporting environmen-
tally friendly formulations.
Did you know?
Household Care
Most ingredients in laundry
detergents are fossil-based. Less
than 15% of detergent raw materials
are the renewable and biodegradable
solutions that Novozymes develops.
We want to change that and move
the industry towards fully
biodegradable solutions.
I
-
cant opportunity to drive greener,

better cleaning performance for clean-
ing clothes, dishes, and surfaces. Our
solutions are used by more than half
of the world’s population, and our
powerful portfolio of enzymes and
microbes ensure a strong cleaning per-
formance while reducing the consump-
tion of water, energy, and use of
chemicals.
2021 performance
In 2021, Household Care sales
declined 1% organically and 2% in
reported DKK compared to last year.

against a strong 2020 performance
that grew at 5% organically. Emerging
markets performed well, supported by
investments to increase our commer-
cial footprint and tailored solutions.
The performance in developed mar-
kets was subdued and sales declined,
mainly due to reduced European con-
sumer demand and certain
private-label customers experiencing

performed well and in line with expec-
tations. It was made available across
several countries in Europe, with the
broad market solution successfully
launched in the third quarter.
Product launches in 2021
•  — a phosphodiesterase
enzyme (PDE) that breaks down
the sources of malodor and discol-
oration in fabrics. It can be applied
to all detergent formats and is fully
biodegradable, which makes it
perfect for formulating natural
detergents.
Consumers increasingly
demand solutions that enable
deeper, hygienic cleaning of
laundry and hard surfaces.
The big picture
In brief 8Novozymes A/S
Accounts and performance
Governance
Our business
SDG impact
Did you know?
Food, Beverages &
Human Health
Plant-based food and beverages is one of
the fastest growing retail categories in the
U.S. We support the adoption of plant-
based products in global diets to ensure
better use of the available arable land, and
we do this with solutions that reduce the
need for sugar and salt, improve the taste
and the texture of protein and eliminate
additives. This does good for our planet
while ensuring the health of consumers.
I
n Food, Beverages & Human Health,

environmental footprint of food con-
sumption and enable consumers to
live healthier lives. Our solutions
improve the quality, taste, texture and
freshness of foods and beverages,
thereby reducing food waste and the
need for additives and unwanted com-
pounds and making plant-based meat
and dairy alternatives more palatable.
Our solutions in Human Health con-

enzymes, and we continue to innovate
for the one-in-a-trillion biology-based
solutions that can be proven to solve
profound consumer health challenges.
2021 performance
Sales in Food, Beverages & Human
Health grew 14% organically and 25%
in reported DKK compared to last
year. Sales growth was supported by
the two Human Health-related acquisi-
tions, PrecisionBiotics Group and
-
cantly impacted by the Synergia trans-
action that closed mid-December.
Full-year growth was broad-based,
with all subareas growing organically
in the double digits. Growth in Food
was mainly driven by market penetra-
tion and was particularly strong for
health-focused solutions such as acryl-
amide reduction in baking, sugar
reduction in dairy and solutions for
plant-based protein extraction.
Additionally, in baking in particular,

raw material optimization and ingredi-

from a recovery in global brewing vol-
umes following last year’s COVID-19
lockdown measures whereas growth in
Human Health was strong and driven
by cross-selling of in-house and
acquired solutions as well as geo-
graphical expansion.
Product launches in 2021
•  — a probiotic
supplement that supports the
human immune system.
Key trends
• Growing consumer focus on pre-
ventative solutions in health and
nutrition.
• Concerns around environmental
issues and a desire for healthier
lifestyles is driving interest in
plant-based alternatives.
• Consumers and food producers
increasingly commit to reducing
food waste.
• Requirements for quality, taste,
texture and freshkeeping in foods
and beverages continue to push
the need for innovative biological
solutions.
The big picture
In brief 9Novozymes A/S
Accounts and performance
Governance
Our business
SDG impact
Did you know?
Bioenergy
Today’s transport sector is a key area for
reducing carbon emissions, as it
accounts for about 25% of global energy-
related CO emissions. Our solutions for

technologies play an important role in
the pursuit of a carbon-neutral world.
The ethanol production enabled by
Novozymes’ biosolutions results in the
displacement of 8 billion gallons of
gasoline. This corresponds to taking 25

I

ways to respond to the increasing
global demand for green energy solu-
tions and other corn-derived materi-
als. Our solutions support the
production of biofuels by helping our
customers get the most value out of
corn, for example. Enzymatic and
microbial solutions play an important
role in the production of bioethanol,
corn oil, feed protein, as well as bio-
diesel, by turning oil seeds and corn
into valuable fuel for transportation.
2021 performance
Sales in Bioenergy grew 11% organi-
cally and 7% in reported DKK in 2021.
U.S ethanol production gradually
recovered following last year’s severe
disruption of gasoline and, subse-
quently, ethanol demand caused by
COVID-19 restrictions. Yet, U.S. etha-
nol production in 2021 still ended
below the 2019-level. The main fac-
tors behind the strong performance in
Bioenergy were the recovery of the
U.S. ethanol industry in combination
with growth from innovation, capacity
expansion of corn-based ethanol pro-
duction in Latin America, and market
penetration with enzymatic solutions
for biodiesel production.
Product launches in 2021
•  — a yeast for
ethanol plants seeking the highest
level of starch and glucose conver-
sion for their fermentation pro-
cess.
•  — an enzymatic

extract and convert the cellulose
found in corn kernels.
Key trends
• Increasing global demand for
cleaner fuels opening the door for
alternatives such as renewable die-
sel, biodiesel, and carbon capture.
• Growing demand for biofuel in
emerging markets.
• Producers are diversifying into
value streams beyond ethanol,
such as feed protein, corn oil,
renewable diesel, and biogas.
The big picture
In brief 10Novozymes A/S
Accounts and performance
Governance
Our business
SDG impact
Did you know?
Grain & Tech
Processing

milling can help reduce greenhouse
gas (GHG) emissions, energy, water,

helps customers cut 9 kilograms of
CO equivalents per metric tonne of
corn, while still generating higher
yields. Together with our customers,
we continue to push for a world where
good business and a better
environment go hand in hand.
I
n Grain & Tech Processing, we sup-
port a range of industries such as
grain processing, wastewater treat-
ment, pulp & paper, leather, textile
production, and ingredients for the
production of bio-pharmaceuticals.
These industries focus on process
optimization, reducing environmental
footprints and increasing yields, which
makes the world’s resources go fur-
ther. Our portfolio of solutions
improve yields and save energy as well
as reducing chemicals, water usage,
steam, and electricity.
2021 performance
Full-year sales in Grain & Tech
Processing grew 13% organically and
11% in reported DKK. Sales in both
Grain and Tech grew by double digits
with strong performances across sub-
areas. Growth in Grain was mainly
driven by increased market penetra-
tion with solutions for vegetable oil
processing, innovation in starch and
particularly in grain milling, as well as
increased end-market demand for
starch-derived products, especially in
emerging markets. Growth in Tech was
primarily the result of a recovering
global textile industry following last
year´s severe COVID-19-related dis-
ruption complemented by good per-
formance in areas such as pulp &
paper, diagnostics, and leather.
Key trends
• Producers focus on cost reduc-
tions, process optimization and
yield enhancement.
 
solutions to address waste han-
dling, water pollution, emissions,
and excessive chemical use.
• The textile industry is slowly
responding to changing consumer
demand for clothes and fabrics
with a lower environmental foot-
print, with renewed interest in bio-
logical alternatives to the
chemicals currently being used in
the textile industry.
Sales in both Grain and Tech
grew by double-digits with strong
performances across subareas.
The big picture
In brief 11Novozymes A/S
Accounts and performance
Governance
Our business
SDG impact
Did you know?
Synthetic fertilizers that are currently used in
agriculture can be replaced by biological
alternatives that are non-pollutant to water
quality and marine wildlife. We are developing
biological solutions that boost natural
nitrogen absorption, allowing replacement of
50-60lbs of fertilizer per corn-acre per year. If
all corn in the U.S. were produced this way, we
could potentially save more than 2 million
tonnes of chemical fertilizer annually. We
engage deeply in sustainable agriculture to
transform food systems and help feed and
nourish a growing world.
T
he world is growing and, to feed it,
we need to ensure we get the best
yield out of crops and farm animals
— while maintaining the health of
both. Our solutions improve yields in
agriculture by improving plants’
absorption of nutrients in the soil,
while reducing the need for chemical
insecticides and pesticides. They also
improve animals’ intake of energy, pro-
teins, and minerals in their feed. The
result is better use of arable land for
food and feed production, reduced
use of chemicals, and reduced emis-
sions to the environment from manure
in livestock production.
2021 performance
Sales in Agriculture, Animal Health &
Nutrition declined 3% in reported
-
cally compared to 2020. This was


the former BioAg setup that positively
impacted the second quarter of 2020.
Sales performance in Animal Health &
Nutrition was primarily driven by inno-

360™, while sales in Agriculture
declined due to the aforementioned


led by strong growth in Latin America.
Product launches in 2021
• ProAct 360™ — protease solution
helping poultry producers to

production by improving animals’
intake of nutrients.
•  — liquid inoculant
-
sibility to soil nutrients and water
absorption in soybean plants,
thereby reducing the need for
fertilizer.
•  — a family of inoculants
that enhance nitrate, phosphate,
and potassium availability for corn,
sorghum, canola, all cereal crops,
mustard, barley, and pulse crops,
also reducing fertilizer-usage.
•  — broad-spectrum,
foliar fungicide for fruit and vege-
table crops that works as a pesti-
cide replacement and protects
against powdery mildew and
botrytis, among other things, to
maximize yields.
Key trends
•
Farmers increasingly need to
enhance crop performance and sup-
port healthier animals through more
efficient production.
• Tightened regulations for use of pes-
ticides, insecticides, and antibiotics,
combined with an increased focus on
chemical replacement and organic
farming, create opportunities for bio-
logical solutions.
• As the world population grows and
demand for protein increases, so
does the need for higher performing
animals and better animal welfare to
ensure responsible and profitable
production.
Agriculture, Animal
Health & Nutrition
The big picture
In brief 12Novozymes A/S
Accounts and performance
Governance
Our business
15,313
million DKK
We returned 89%
of the economic
value generated
to society
Economic contribution
Economic
contribution
I
n 2021, Novozymes returned 11% of the value gen-
erated to our capital providers. This consisted
mainly of our dividend payment of DKK 1,466 million.
In addition to the 11%, Novozymes bought back
stock worth 1,500 million in 2021.
At the end of 2021, the Novo Nordisk Foundation
owned — through Novo Holdings A/S — 25.5% of
the share in Novozymes (see The Novozymes Stock).
-

and the Foundation contributes to communities in
large scale through donations and impact invest-
ments, to which we indirectly contribute through our
dividend payments.
In 2021, Novozymes generated
economic value of DKK 15,313 million,
and we returned 89% of it to society.
The remaining 11% was reinvested in
Novozymes to develop the company,
build competitive strength and ensure
future value generation for
distribution among key stakeholders.
Suppliers 44%
used to purchase
goods and services
from our suppliers
Community 8%
returned to the
community by paying
corporation tax, other
taxes and duties
Employees 26%
used for employee
wages, pensions, etc.
Reinvested in
Novozymes 11%
reinvested in
Novozymes for future
value generation
DKK
Capital
providers 11%
in dividends and

capital providers
Sales 98%
Financial
& other income 2%
A responsible approach to tax
Novozymes’ tax policy supports a responsible and
positive tax contribution to society. We continuously
-
ate. In 2021, Novozymes incurred corporate income
taxes and other taxes and duties of approximately
DKK 1,200 million.
Tax is a key component of corporate responsibility
and governance in Novozymes. We are committed to
being open and transparent about our tax policy and

Novozymes.com as well as other information on tax.
The big picture
Economic contribution 13Novozymes A/S
Accounts and performance
Governance
Our business
Five-year summary
DKK million     
Income statement
Revenue     
     
EBITDA     
     
Financial items, net     
     
Balance sheet
Total assets     
Equity     
Invested capital     
Net interest-bearing debt     

     
Purchases of property, plant and
equipment     
Net investments excluding
acquisitions     
     
Business acquisitions, divestments
     
     
Key ratios
Revenue growth, DKK
%  
Revenue growth, organic
% 
R&D costs (% of revenue)
%     
Gross margin
%     
EBITDA margin
%     
    
Key ratios (continued)
EBIT margin
%     

%     
Equity ratio
%     
NIBD/EBITDA
x     
Return on equity
%     
ROIC including goodwill
%     
Earnings per share (EPS), diluted
DKK     
Dividend per share
(2021 proposed)
DKK     
Key ratios have been prepared in accordance with The Danish Finance Society’s “Recommendations &

as described in the Glossary.

2018 have not been restated.
    
Total number of employees
No.     
Rate of employee turnover
%     
Frequency of occupational

million working hours     
Women in senior management
%     
CO emissions from operations
(scope 1+2)
Tonnes     
Renewable Electricity share
%     

m     
Biomass recovered
%     
Environmental, social and governance data
The big picture
Five-year summary 14Novozymes A/S
Accounts and performance
Governance
Our business
Message from the Chair and the CEO
A brighter
future with
biotech
2021 was a year of many things – overcoming,
inspiring, investing, delivering, and learning.
Despite continuing uncertainties throughout
the year, our employees showed resilience,
commitment, and adaptability, helping
Novozymes to achieve even greater impact
and strong results for the year.
The big picture
Novozymes A/S
Accounts and performance
Governance
Our business
Message from the Chair and the CEO 15
Message from the Chair and the CEO
W

lessened in 2021, changes in consumer behav-


Beverages & Human Health delivered strong dou-
ble-digit growth supported by good market condi-
tions. Bioenergy's double-digit sales growth was
supported by recovering U.S. ethanol production and
expansion of starch-based ethanol production in
Latin America, while double-digit sales growth in
Grain & Tech Processing came from strong demand
for ag-processing solutions and a recovery in textile.
Household Care and Agriculture, Animal Health &
Nutrition performed much as expected.
Our organic sales growth came in at 6% for the year,
and the reported EBIT margin was at a solid 26.8%.

before acquisitions and excellent returns to our
shareholders. These strong results have enabled us
to make important strategic moves, such as growing
our capabilities in BioHealth, and we have much to
be proud of when we look back on 2021.
A strong foundation for future growth

Now is the time for businesses with a sustainability
platform to be focused and agile, while staying true
to their purpose. At Novozymes, we live through our

better lives in a growing world. And it’s the power of
that purpose that gives us the right to dream — to
imagine a better world with the help of biotechnol-
ogy. But for those dreams to become reality and have
the biggest possible impact, we must be bold in our
ambitions and continue to invest to unleash our
growth potential. In an everchanging world, we need
to combine a clear direction with a level of agility
that can keep pace with change. That’s how we
generate value for our shareholders, but it’s also how
we best contribute to the world.
In September, we launched Unlocking growth – pow-
ered by biotech, to meet our growth ambitions and
unleash Novozymes’ full potential. With this
refreshed strategy, we now have a roadmap to
ensure our solutions will have maximum impact, by
guiding us in how we invest, how we innovate and
how we interact with our customers and partners.
But a world of opportunity requires attentive prioriti-

of and where we intend to invest less to ensure our
resources are spent where they matter most.
Ultimately, our expertise reaches far beyond
enzymes. We have a world-class biotech toolbox,
from enzymes to proteins and microorganisms, one-
of-a-kind scale-up ability, and a global presence in
more than 130 countries. We are a biotech power-
house, and it is on this solid foundation that we are
now building our future.
Delivering despite uncertainty
Throughout 2021, we made important moves to bet-
ter position Novozymes, and our employees showed
an impressive ability to bring new innovations to mar-
ket and keep our production running and delivering
on time.
Novozymes is a growth company, and we made signif-
icant investments and progress during the year to
ensure future growth.
We strengthened our commitment to alternative pro-
teins with the announcement of a DKK 2 billion
investment in a new state-of-the-art production line
for advanced protein solutions in Blair, Nebraska.
With this investment, we tap into the growing market
need for alternative sources of protein. Meanwhile, in
BioHealth, we accelerated our capabilities by acquir-


and vitamin K2-7. This followed our acquisition ear-
lier in the year of Microbiome Labs and our purchase
of the Biota technology asset, which further added to
our microbe innovation capability. In emerging mar-
kets, we increased our reach and achieved strong
growth, for example with our yeast platform in Latin
America. Our new Global Powder Center based in
India will also help us to support our customers in
-
gent formulation.
We made numerous exciting product launches, such

odor in fabrics, answering consumer calls for clothes
that smell and feel fresh for longer. For poultry pro-
ducers, our new protease solution ProAct 360™,
launched through the DSM – Novozymes Alliance,
-
duction by improving animals’ intake of nutrients and
ensuring greater retention of nitrogen in the metabo-
lism of the animals, lowering nitrogen emissions to
the environment. And for our customers in bioenergy,
we not only expanded our yeast platform with

also enabled them to make the most of new revenue

use of the cellulose found in corn kernels, so it can
be used not only for animal feed but also for extract-
ing corn oil and cellulosic ethanol.
Over the next few years, we will continue to
strengthen our understanding of our customers’
needs, for example by making key investments in cus-
tomer co-creation centers in food and health. These
centers will allow us to immerse ourselves in the
world of our nutrition customers and better under-
stand their needs. We will also further develop our
The big picture
Message from the Chair and the CEO 16Novozymes A/S
Accounts and performance
Governance
Our business
Throughout 2021, we
made important moves
to better position
Novozymes, and our
employees showed an
impressive ability to
bring new innovations
to market and keep our
production running and
delivering on time.


-
-
ers with their fresh-keeping dosage trials by
providing quick and easy access to the right enzymes

digital program which provides ethanol producers
with live data and real-time analytics to help dose
corn and enzymes in their production processes,
ensuring they can achieve higher production yields
with the right support throughout the process.
Working together for change
As a global leader and a responsible corporate citizen,
we encourage and drive change across our entire value
chain, including the societies in which we operate. Our
solutions play an important role in helping our custom-
ers contribute to a healthier planet, but we can’t stop
there; we must look beyond our solutions. We do this
by setting ambitious targets, and by working together
with others to drive a sustainability agenda.
In shaping our strategy, we took an honest look at
our operational targets and asked ourselves how we
could best embrace our leadership position in sus-
tainability. We are proud of what we have accom-
plished, with a 42% reduction in CO emissions
(scope 1 and 2), relative to our 2018 baseline, and we
know we can do more to set the tone in the markets
in which we operate. The result is that we now aim to
reduce absolute greenhouse gas (GHG) emissions by

Scope 3, taking stock of our entire supply chain when
measuring our impact. In addition, we commit to
maximize the percentage of our sales that enables a
better world, and we will report the percentage of
our sales that contributes to accelerating a car-
bon-neutral world, transforming food systems, and
enabling healthier lives respectively.
This year also marked 20 years of our collaboration
with the U.N. Global Compact, the world's largest
corporate sustainability initiative. We were again
chosen by the U.N. Global Compact as one of the few
global companies to achieve LEAD status, thanks to
our commitment to sustainability and our leadership

support the U.N. Global Compact in its work on cli-
mate change, such as by working with the Science
Based Targets initiative, and Business Ambition for
1.5 Degrees. At COP26, Novozymes was awarded the
Terra Carta Seal by His Royal Highness the Prince of
Wales, thus being recognized along with other inter-
national corporations that have made serious and
action-oriented commitments towards a better
future. To ensure we can all live within the boundar-
ies of a healthy planet, we must work together, as the

will continue to actively advocate for change by

working with organizations like the UN Global
Compact, the World Economic Forum, the
International Chamber of Commerce, The B Team,
the UN Foundation, Business Fights Poverty, and
many other wonderful organizations.
Solving some of the world’s most pressing challenges
also means we need to attract the brightest minds
and retain the most talented people. As an innova-
tion company seeking to catalyze change for the
planet and people, we can only achieve our aim if dif-
ferent perspectives have a seat at the table and if
their voice is heard. Therefore, we have set ourselves
clear targets to drive an inclusive and diverse work-
force where employees stay safe, thrive and grow,
while also having the opportunity to pledge 1% of
their time to community outreach.
Moving forward
The uncertainties experienced in 2021, whether it be
from supply chain issues, rising price of raw materials
or COVID-19, is something our employees have han-
dled with an incredible spirit and determination. It’s
thanks to their diligence, planning and care for each
other that we can look back on a year in which
Novozymes delivered such strong results and kept
the trust of our customers. We speak on behalf of the
whole Board and Executive Leadership Team when
we say that this makes us extremely proud and
thankful.
In 2022, we have set an organic sales growth expec-
-
tinued uncertainty related to the pandemic situation
and volatile market conditions.
Going forward, we will continue to build on a founda-
tion for growth and we will continue to invest in inno-
vation and new ventures, our people, our
partnerships, and our communities to ensure we live
up to our purpose every day.
We thank our employees, customers and partners for
the progress we made together in 2021 and we look
forward to taking the next steps on our strategic

Jørgen Buhl Rasmussen
Chair
Ester Baiget
CEO
The uncertainties
experienced this year,
whether it be from
supply chain issues,
rising price of raw
materials or COVID-19,
is something our
employees have
handled with an
incredible spirit and
determination.
The big picture
Message from the Chair and the CEO 17Novozymes A/S
Accounts and performance
Governance
Our business
Unlocking growth
– powered by biotech
We accelerate towards a
climate-neutral society, we
transform food systems
and enable healthier lives
Our
business
19 Strategy
27 Targets & outlook for 2022
Accounts and performance
Governance
Our business
The big picture
Novozymes A/S
* The total adds up to more than 100% as many of our solutions contribute to more than one commitment
Strategy
At Novozymes, we have made important
strategic moves in recent years to better
reach our full potential. In 2021, we


T
he purpose of our strategy has always been to
steer the organization in a direction that better
enables us to live up to our purpose “Together we

world – Let’s rethink tomorrow”, while staying true to
our values. In recent years, we have focused our
pipeline and resources on growth areas, built new
strategic opportunity areas and formed a more cus-
tomer-centric organizational structure with a strong
emerging markets presence. And we have remained
as committed as ever to society, the environment,
and our employees; Zymers.
Based on the resulting solid foundation for growth
along with valuable learnings gained over the years,
we announced a refreshed strategy in 2021. We call
this strategy Unlocking growth – powered by biotech.
Our strategy, Unlocking growth – powered
by biotech, will guide the way towards
2025 and will also act as a foundation for
our 2030 ambition
Accelerate towards a
climate-neutral society
Transform
food systems
Enable
healthier lives
Revenue share of 2030 commitments*
of our revenue came from products
enabling our food production systems
to produce more from less and improve
nutrition and quality
of our revenue came from
products that enable better
health in people's
daily lives
77% 35% 5%
of our revenue came from products
that contribute to reduction in
CO
fossil-based energy and chemicals
Accounts and performance
Governance
Our business
The big picture
Strategy
19Novozymes A/S
Strategy
At Novozymes, we believe that by focusing on where
we have the greatest impact on the world, we will
also achieve our growth potential. The process of
refreshing our strategy therefore began by looking at
the challenges and opportunities in a world where
climate change, technology, and wellbeing are top of
mind for customers, consumers and in societies in
general.
Our strategy, Unlocking growth – powered by bio-
tech, will guide the way towards 2025 and will also
act as a foundation for our 2030 ambition of dou-
bling our sales while accelerating towards a cli-
mate-neutral society, transforming food systems, and
enabling healthier lives. From 2022 onwards, we will
continue to evaluate our progress towards these
commitments through a set of milestones for our
workforce, our impact on the societies we operate in,
the impact of our operations on the world and our

-
orities that give us greater and better access to the
market potential for biotech. We have unparalleled
capabilities within enzymes, microbes, and advanced
proteins, and we leverage our position as a leader in
biotech to excite customers, consumers, and societ-
ies through biological solutions for a better climate
and improved health and nutrition. By succeeding
with our strategy, we will provide our shareholders
with short-term growth and unparalleled strategic
platforms for future value creation.
Ensuring our impact
in the future
Business OperationsZymers & society
Organic sales*
CAGR 5% or higher until 2025
EBIT margin*
26% or higher by 2025
ROIC incl. goodwill*
20% or higher by 2025
Include
An inclusive and diverse workforce
Achieve gender balance across all
professionals and in senior
leadership by 2030
Thrive
A workplace where Zymers stay
safe, thrive and grow
Take action and monitor progress
to ensure organizational wellbeing
Inspire
A culture of change makers
Pledge 1% of our time to
community outreach
Climate
50% reduction** in absolute CO
2
emissions from operations and
supply chain by 2030 and net
zero by 2050
100% renewable electricity by
2030
Water
100% of sites*** to manage water
in balance with local conditions
by 2030
Circular
Zero waste from operations***
by 2030
Targets for Unlocking growth – powered by biotech
* All targets assume constant currencies, no additional acquisitions, no divestments, no special items, a gradual
normalization of the global economy and supply chain post-COVID, and no new severe disruptions of the global economy
** From a 2018 baseline
 
R&D labs, etc.
Accounts and performance
Governance
Our business
The big picture
Strategy
20Novozymes A/S
Explore
new options
for growth
Evolve
Our core
business
Expand
BioHealth &
Human
Nutrition
At the center of Unlocking growth
– powered by biotech, we find the
growth pillars that will take us to
where we aim to be. They are:
Evolve our
core business
-
rently see most of our sales, such as detergents and

opportunities which we will tap into via innovation,
commercial excellence, digitalization, and production
optimization.
Expand BioHealth &
Human Nutrition
In the areas of BioHealth and Human Nutrition, we
have solutions that provide natural answers to a
growing focus in society on healthy people, healthy
animals, and a healthy planet. We expect strong
growth here and we intend to invest in these areas to
ensure we can be close to our customers and have
the capabilities to meet demand and capture attrac-
tive growth opportunities.
Explore new options
for growth
In our Explore pillar, we aim to be bold and ambitious
in our pursuit of new opportunities. Through a ven-
ture mindset, we will explore opportunities, such as
carbon capture, fertilizer replacement and plastic
degradation, which come with very high potential but
also increased risk. An agile approach will ensure
that we can quickly test out the viability of any
opportunity and only move ahead with the ones that
have the strongest potential.

– powered by biotech, please go to our online strategy tool
Accounts and performance
Governance
Our business
The big picture
Strategy
21Novozymes A/S
Consumers are embracing plant-based
products, including plant-based meat. In
order to address how we meet the increas-
ing demand for proteins with lower environ-
mental footprint, we are investing in a new
state-of-the-art production line at our site
in Blair, Nebraska, strengthening our com-
mitment to the strategic opportunity area
of Advanced Protein Solutions.
This DKK 2 billion investment follows an
agreement to enter into a long-term con-
tract with an anchor customer and key
player in the plant-based industry. The new
plant at Blair will enable Novozymes to cap-
italize on decades of experience with fer-
mented catalytic proteins while also taking
us closer to realizing our commitments for
2030.

in Synergia Life Sciences Pvt. Ltd., a leading

vitamin K2-7, thereby accelerating our posi-
tion in human health and functional foods.
Since mid-2020, we have made two other

with PrecisionBiotics Group, then
Microbiome Labs and, in March of 2021, we
strengthened our data science approach to
our Novozymes OneHealth business with
the purchase of the Biota technology asset.
These additions are helping to leverage our

combine microbes – pre- and probiotics –
with enzymes and other biological solutions
-
cally-proven solutions that improve human
health in a growing world.
There is increasing pressure on the agricul-
tural industry to replace chemical pesti-
cides with biological solutions. In 2021, we
entered a strategic collaboration with FMC,
a leading global agricultural sciences com-
pany, to research, co-develop, and commer-
cialize novel enzyme-based crop protection
solutions for farmers around the world. The
new collaboration with FMC, alongside our
existing toolbox of bioyield and biocontrol
solutions, cements our position as a pio-
neer and enabler of a biological transforma-
tion in agriculture.
The feed industry is also experiencing an
accelerated customer focus on sustainability
and we have solutions that respond to these
needs. Together with DSM, we launched
ProAct 360™ which helps feed producers be


of protein, ensuring greater retention of
nitrogen in the metabolism and therefore
lower nitrogen emissions to the environ-
ment. In China, Novozymes’ key feed
enzymes were approved, enabling access to
a key strategic market.
Our enzymes, yeast, and technical service
platforms allow ethanol producers to gener-
ate the highest levels of ethanol, diversify,


better use of the planet’s resources.
In 2021, we added a new solution to our

-

components, such as cellulosic ethanol and

solution, providing ethanol producers with
live data and real-time analytics to help
dose corn and enzymes correctly, every
time.
Strengthening and
accelerating
our
BioHealth business
Setting
new standards

production
Advancing
biological
solutions for agriculture
and livestock
2021 strategic highlights
Investing
in Advanced
Protein Solutions
Accounts and performance
Governance
Our business
The big picture
Strategy
22Novozymes A/S
Novozymes has long been at the forefront

removal. With the launch of our new laun-



to more customers.

body grime and releases dirt and odor that
might be trapped in fabrics, tackling the
root cause of consumer challenges with
hygiene, malodors, and color dullness in

become hygienically clean and are less
prone to yellowing and decolorization, they
last longer and need not be discarded as
fast, which helps to tackle the challenges of
overconsumption and waste in a growing
world.
We recently announced our collaboration
with Saipem, an advanced technological
and engineering platform for complex infra-
structure and plants, for the development
of innovative solutions for enzymatic car-
bon capture.
Enzymatic carbon capture is a cleaner and
-
ture compared to traditional CO capture
processes, as enzymes enable lower tem-
perature input and more moderate use of
chemicals.
As part of the agreement, Saipem - which
owns an enzyme-based CO capture tech-
nology - will be responsible for providing
process, mechanical and equipment design,
while Novozymes will provide enzymes in
addition to further optimizing the process
through enzymes innovation.
Enzymatic carbon
capture is a
cleaner and more
cost-eective
method of carbon
capture compared
to traditional CO
capture processes
Addressing
consumer
laundry challenges

Smarter solutions for
lowering
GHG
emissions
In 2021, Novozymes was also present at
COP26, to engage and help turn talk into
action, so the global community can move

action on limiting the global temperature
increase. We support plans that ensure a

economy. At COP26, we were also one of
the international corporations awarded the
Terra Carta Seal by His Royal Highness the
Prince of Wales for our commitment to a
sustainable future.
Our presence at COP26 ties in with the
work we already do every day with various

policy frameworks. We have close partner-
ships and collaborations with the World
Economic Forum, the International
Chamber of Commerce, The B Team, the UN
Foundation, Business Fights Poverty and
many more.
Our position as a leader in safer and more
environmentally friendly solutions was also
reinforced when we were chosen as a 2021
Safer Choice Partner of the Year by the U.S.
Environmental Protection Agency (EPA).
Working
together
for
a better world
Accounts and performance
Governance
Our business
The big picture
Strategy
23Novozymes A/S
We encourage
and drive change
across our entire
value chain
We help our
customers
contribute to a
healthier planet
We actively seek
to reduce the
environmental
footprint
Working with
the SDGs
As a leader in biotech solutions, Novozymes holds many answers to overcoming some of the
world’s biggest challenges. Our solutions contribute to several of the United Nations Sustainable
Development Goals (SDGs), directly or indirectly. The SDGs represent both responsibilities and
opportunities for Novozymes. They have been an integral part of how we drive our business,
innovate, run our operations, and work with our employees and the communities we are part of.

to have a fully integrated triple bottom line report. In 2012, when the SDGs creation process
started, we were actively engaged in developing the set of goals for the global community as it


-

answers for better lives in a growing world – Let’s rethink tomorrow, and we have contributed

With our refreshed strategy Unlocking growth – powered by biotech, we will strengthen our
contributions to making the SDGs a reality by delivering on three new commitments to a healthy
planet. We are committing to accelerate towards a climate-neutral society, transform food
systems, and enable healthier lives.
Through strong collaborations, we encourage and drive change across our entire value chain,
including our employees and the societies in which we operate. Our solutions help our customers

emissions and the use of water, energy, or chemicals. Our solutions also address modern human
health challenges and food system sustainability. We actively seek to reduce the environmental
footprint of our operations and supply chain, and we continue to invest in our employees as part
of building an inclusive, thriving, and inspiring workforce.
For an overview of our contributions to
the SDGs, read more on Novozymes.com
Our solutions contribute to
several of the Sustainable
Development Goals (SDGs),
directly or indirectly.
Our business
Strategy 24Novozymes A/S
Accounts and performance
Governance
The big picture
Spotlight story
Today Future
CO2
CO2
Atmospheric
air with 80%
nitrogen, N2
Natural
gas
N2
N2
NH3
Synthetic nitrogen fertilizer (e.g. NO3) spread on the soil surface
Nitrogen fertilizer (ammonia, NH3) released by microorganisms in the soil, next to the crops’ roots
Innovating for a
climate-neutral
society
T
he report from the Intergovernmental Panel on
Climate Change (IPCC) published in 2021 is a
clear call to the world to accelerate the decarboniza-

shown — that our biological solutions can contribute
-
tions reduce the carbon intensity of the processes
where they are applied.
We can already see that the low-carbon transition is
creating demand for new goods and services across
all sectors. This demand is driven by favorable policy
developments and changing consumer needs alike.
For example, in 2020, the EU Commission proposed
a plan which includes a target of reducing the use of
pesticides by 50% over the next decade. Likewise,
consumers are increasingly making conscious choices
when purchasing products. For example, consumers
are seeking better and healthier protein solutions,
and are ready to pay for it.
Novozymes fully recognizes the potential to grow our
business while innovating transformative solutions
for the climate. We have therefore decided to invest
in strategic opportunity areas, including biological
alternatives to synthetic fertilizers, carbon capture
and advanced protein solutions.
Biological solutions supporting
climate smart agriculture
Decarbonizing the industrial agriculture production

CO savings from higher yields, resulting from the
application of biological solutions for agriculture. For
example, if Novozymes’ inoculants were to be used
on all corn grown in the U.S., it could potentially
reduce greenhouse gas (GHG) emissions by 3.9 mil-
lion tonnes of CO.*
There is also a great opportunity to reduce environ-
mental impact by using biological alternatives to the
synthetic fertilizers that are currently used in
agriculture to ensure plant growth. We are develop-
ing biological solutions that boost natural nitrogen
absorption and enable the replacement of 50-60lbs
of fertilizer per corn-acre per year. If all corn in the
U.S. were produced this way, we could potentially
save more than 2 million tonnes of chemical fertilizer
annually. At the same time, our solutions are non-pol-
lutant to water quality and marine wildlife.
Assessing life cycle impacts from
changes in agricultural practices of crop production -
Methodological description and case study of microbial

Accounts and performance
Governance
Our business
The big picture
Innovating for a climate-neutral society
25Novozymes A/S
Innovating for a climate-neutral society
Industrial gas
emissions
Other
gasses
Captured
CO2
CO2 utilization
• Fuels (2px)
• Chemicals
• Crops
• Algae
• Fertilizer
• Beverages
• Building materials
• Enhanced oil recovery
CO2 storage
Recycling
Solvent
CO2 absorbed
CO2 desorbed
Enzymatic carbon capture
To limit global warming to 1.5°C, the world needs to
capture carbon from the generating source directly.
In the energy sector, current technologies and capac-


widely adopted. The International Energy Agency
(IEA) states that carbon capture and storage technol-
ogies can cover 12% of the reductions in GHG emis-
sions needed by 2050 for the sector to achieve net
zero emissions by 2070. And we believe enzymes can
help make this process less energy intensive and
more environmentally friendly.
Traditional carbon capture methods that extract CO

capital-intensive assets, creating products that can
harm people and the environment. By using enzymes
(carbonic anhydrase) instead of conventional chemi-
cals, we can enable a more reliable carbon capture
process that requires less energy and produces no
toxic waste, aerosols, or contaminants. In addition,
carbon captured this way can then be used as feed-
stock or sent to storage. Novozymes is investing in
developing such solutions for enzymatic carbon cap-
ture, for example through our collaboration agree-
ment with Saipem, an advanced technology and
engineering company.
Advanced protein solutions
The climate crisis, along with population and income

healthier food alternatives, all leave our society with

within the boundaries of what our planet can pro-
vide. Advances in biotechnology for precision fer-
mentation, for example, are enabling tailor-made
enzymes which maximize the extraction of protein,
enhancing taste and texture, as well as advanced
proteins ultimately resulting in desirable, cost-com-
petitive, plant-based and animal-free nutrients.
Novozymes can play a key role in enabling a transi-
-
tive proteins. This includes enzymes that enable the
next generation of plant-based alternatives, as well
as high-value fermentation-based proteins.
Novozymes will invest in technologies focused on
improving the nutritional, functional and sensorial
attributes of advanced protein solutions to drive and

Accounts and performance
Governance
Our business
The big picture
Innovating for a climate-neutral society
26Novozymes A/S
Targets &
2022 outlook
To live our purpose and drive our business, we

business and employees and for society and our
operations. We evaluate and report transparently
on our performance against those targets.
N
ovozymes’ purpose is rooted in sustainability and we
are committed to creating a healthier planet. We hold
-

Development Goals (SDGs). These targets seek to maximize
the positive impact of our solutions and to minimize the
environmental impact of our operations while being a com-
passionate employer and responsible corporate citizen.
In 2019, we set targets for 2022 focusing on our business,
our employees, our operations, and the world. We reported
in detail on our progress against those targets in our 2019
and 2020 annual reports.
With our 2021 refreshed strategy, Unlocking growth – pow-
ered by biotech, we made new long-term commitments. Our
-

-



Learn more: Sales outlook & Financial outlook
We need to ensure a healthy and growing business, as the very nature of our solutions

Business
Sales: In the period to 2025, we strive to grow our sales organically by a compounded annual growth rate (CAGR) of
5% or higher*
In 2021, we saw organic sales growth of 6%. Food, Beverages & Human health, Agriculture, Grain & Tech Processing
and Bioenergy all contributed with double-digit growth while Household Care and Agriculture, Animal Health &
Nutrition performed much as expected.
Outlook 2022: On track
 By 2025, we aim to have an EBIT margin of 26% or higher, and not below 25% in any individual year.
For ROIC including goodwill we aim to reach 20% or higher by 2025*

higher gross margin and increased other operating income. Return on invested capital (ROIC) including goodwill
was 19.3% for the full year. The improvement in ROIC including goodwill was due to the higher net operating

Group, Microbiome Labs and Synergia Life Sciences acquisitions.
Outlook 2022: On track
Long-term commitment
-
ness – in people, innovation, and capacity – to protect and generate value from our core. We also continue to look at M&A


sales by 2030 vs 2020*.
Milestones
* All targets assume constant currencies, no additional acquisitions, no divestments, no special items, a gradual normalization of the global
economy and supply chain post-COVID, and no new severe disruptions of the global economy
Accounts and performance
Governance
Our business
The big picture
Targets & 2022 outlook
27Novozymes A/S
Targets & 2022 outlook
Zymers & Society
Nurture diversity: Achieve a score of at least 86 on our diversity index by 2022
We achieved 85 on our diversity index and our senior management was 34% female and
66% male.
Outlook 2022: On track
Include
Long-term commitment
We strive for an inclusive and diverse organization. We aim to achieve that by nurturing a
culture of inclusion and belonging, where Zymers can be themselves, and by fostering
equity in all aspects of employment. We seek to achieve gender balance* and mirror the
societies in which we operate.
We are committed to continue to help our employees,
also called Zymers, develop in a thriving, diverse and
inclusive community.
Milestone

Ensure safety and wellbeing: 

Our 2019-2021 average was 1.2 compared with 1.5 in 2020. We launched a mandatory
safety e-learning module for all employees, focused on current safety challenges across
Novozymes. The COVID-19 pandemic continued to pose challenges to Novozymes
around the world, but teams have handled changes related to COVID-19 well, achieving
a score of 91 out of 100 on our employee survey.
Outlook 2022: On track
Excite employees: Achieve a score of at least 81 on our Zymer Spirit index by 2022
We achieved a score of 82 points on our Zymer spirit index, showing our employees to be
engaged and committed to our purpose and strategy. Throughout the year, we regularly
host virtual and physical townhalls to explore strategic topics and allow employees to
gain a better understanding of their role in Novozymes’ success today and in the future.
Outlook 2022: On track
Thrive
Long-term commitment
We take pride in a workplace where Zymers can stay safe, thrive, and grow. We achieve that
by ensuring Zymers’ safety, promoting mental and physical wellbeing, supporting our Zymers

skills development.
Milestones
Learn more: Inclusion & Diversity note
* Gender balance means that, at a minimum, we will have 45% women and 45% men across all
professionals and in senior management
Accounts and performance
Governance
Our business
The big picture
Targets & 2022 outlook
28Novozymes A/S
Inspire the world: Pledge 1% of our time to local outreach activities by 2022
We supported those of our communities that were disrupted by the COVID-19 pandemic,
for example by funding two community oxygen centers in India and donating 500 oxime-
ters in Brazil. In Denmark, about 50 school girls spent a day with our inspiring female
scientists as part of ‘Girls Day in Science’, promoting STEM education amongst women.

deliver COVID-19 vaccines to low- and middle-income countries. The campaign was con-
ducted with the Novo family, and together we raised DKK 23 million — enough to fully
vaccinate 800,000 people.
Outlook 2022: On track
Inspire
Long-term commitment
We pride ourselves on having a culture of changemakers. We do that by continuing to pledge
1% of our time to community outreach, helping educate the next generation and enabling
Zymers to live more sustainably.
Milestone
Enable learning: Achieve a score of at least 80 on learning in our annual employee
survey by 2022
We achieved a score of 79 points on Enable learning. We launched an online learning
platform to help employees build skills and competencies needed for success in existing
-
tent from a wide range of internal and external sources like LinkedIn Learning.
Outlook 2022: On track
Learn more: Climate change & Energy notes
Operations
Emissions in Operations: By 2022, reduce absolute CO emissions* from Novozymes’
operations by 40% (scope 1+2)

compressor installed at our Hongda site in China, which will produce energy savings of
approximately 31,000 GJ per year. During 2021 we engaged with key suppliers to better
understand our supply chain emissions and our suppliers' climate maturity.
Outlook 2022: On track
Climate
Long-term commitment
We continue our commitment to Science Based Targets (SBT) and to achieving Net Zero by
2050. With the new SBT guidance in 2021, we raised our ambition to 50% reduction* in
absolute emissions from operations & supply chain (Scopes 1+2+3) by 2030, previously 50%
from operations and 15% from purchased goods and services*. We continue our commitment
to purchase 100% renewable electricity by 2030.
We are committed to high standards and ambitious
actions to improve our footprint on climate, water, and
circular waste management.
Milestone
* From a 2018 baseline
Learn more: Employee safety & wellbeing note
Learn more: Community engagement note
Accounts and performance
Governance
Our business
The big picture
Targets & 2022 outlook
29Novozymes A/S
Learn more: Climate Change & Energy notes
Water programs: By 2022, develop context-based water management programs at
100% of Novozymes’ sites*
At the end of the year, 11 out of our 15 production sites had programs with actions to
help us address local water challenges. We continued our partnership with the World
Wide Fund for Nature (WWF) for developing our contextual water programs. We have

Outlook 2022: On track
Water
Long-term commitment
We remain committed to having 100% of our sites* manage water in balance with local
conditions by 2030. We are also working to pioneer a science-based approach to water
stewardship. We will focus on what matters locally and help our communities.
Milestone
Learn more: Waste note
Biomass: By 2022, achieve 100% circular management of our biomass
99% of our biomass was managed in a circular manner and utilized as raw material in
fertilizer production for agriculture with or without prior biogas production.
Outlook 2022: On track
Packaging: Develop plans for circular management of 100% of key packaging materials
We are progressing as planned in the development of circular plans to make our key
packaging recyclable, reusable or compostable.
Outlook 2022: On track
Zero Waste programs: Develop programs to reach zero waste by 2030 at 100% of our
sites*
10 of our 15 production sites had developed Zero waste plans. In 2021, the recycling
rate of non-biomass waste was 62% compared with 48% in 2020.
Outlook 2022: On track
Circular
Long-term commitment
We are committed to ensuring that zero waste from our operations* is sent

Milestones


Accounts and performance
Governance
Our business
The big picture
Targets & 2022 outlook
30Novozymes A/S
World targets
Climate: Save 60 million tonnes of CO by enabling low-carbon fuels in the transport
sector in 2022
Novozymes solutions in bioenergy helped the transport sector save 60 million tonnes of
CO in 2021 by enabling the production of low carbon fuels.
Outlook 2022: On track
Water: Reach >4 billion people by providing laundry solutions in 2022 that replace
chemicals
We reached 4.1 billion people with our laundry solutions. This was mainly driven by the
increased enzymatic detergent penetration in emerging markets.
Outlook 2022: On track
Production & consumption: 
farm to table in 2022

solutions in grain and vegetable oil processing, by unlocking additional starch, protein
and oils from feedstocks.
Outlook 2022: More to do
Long-term commitment
Our strategy, Unlocking growth – powered by biotech, starts with our long-term 2030 commit-
ments to a healthy planet. We seek to deliver solutions that help accelerate towards a cli-
mate-neutral society, transform food systems, and enable healthier lives. Our 2022 World
-
ments. In the Strategy section, we disclose our contribution by revenue to each of them.

lives in a growing world, we grow our business.
Milestones
Accounts and performance
Governance
Our business
The big picture
Targets & 2022 outlook
31Novozymes A/S
N
ovozymes expects to grow sales organi-
cally by 3% to 7% in 2022 and the year is

supported by innovation and increased mar-
ket penetration, especially in emerging mar-
kets.
The full-year indications per business area are
well aligned with the mid-term 2025 outlook
presented at the Capital Markets Day in
September 2021. Food, Beverages & Human
Health and Agriculture, Animal Health &
Nutrition are expected to be the main growth
drivers, while Household Care, Bioenergy and
Grain & Tech Processing are expected to grow
at or below the group average. The indicated
ranges per business area are broader for the
agriculturally-exposed areas due in part to
higher end-market volatility. Sales in reported

are forecasted to be roughly 3 percentage
points higher relative to the 3% to 7% organic
sales growth range.
Household Care
Organic sales growth is expected to be
driven by increased penetration in
emerging markets and the continued roll-
out of the Freshness technology. Areas
outside of laundry, such as enzymes and
microbes used in professional & medical
cleaning as well as dishwash are also
expected to contribute to growth. The

was successfully launched in 2021, mark-
-
tribute more to growth as the year
progresses and in the years to come. The
full-year indication for organic sales in
Household Care is to grow by 2% to 4%.
Food, Beverages &
Human Health
Organic sales growth is expected to be
driven by continued strong performance
in Food and Human Health while
Beverages is expected to grow slightly.
Growth in Food is expected to be broad
based and driven primarily by our
health-focused solutions, including
strong performance in baking and food &

material optimization and other ingredi-
ent substitutions. Human Health is esti-
mated to grow organically in the solid
double-digits and the Synergia
acquisition that closed on December 10,
2021, is expected to contribute to
growth. Organic sales in Food, Beverages
& Human Health is expected to grow by a
high-single digit rate.
Bioenergy
Organic sales growth is expected to be
driven by the continued recovery of U.S.
ethanol production, market penetration
enabled by innovation, capacity expan-
sion of corn-based ethanol production in
Latin America, and market penetration
with enzymatic solutions for biodiesel

grow in the low-to-mid-single-digits.
Uncertainties related to the pandemic
and volatile market conditions are the
main reasons for the relatively broad
range. The mid-point of the range
assumes moderate growth in U.S. etha-
nol production with full-year volumes still
slightly below 2019 production levels.
Grain & Tech Processing
Organic sales are expected to develop
more moderately following a very strong
performance in 2021. Performance is
expected to be driven by growth in Grain
mainly led by market penetration in vege-
table oil processing and innovation in
starch, such as solutions for grain milling.
The sales development in Grain & Tech

to low-single-digit growth. Uncertainties
related to the pandemic and volatile mar-
ket conditions are the main reasons for
the sales growth range.
Agriculture, Animal
Health & Nutrition
Organic sales growth will be led by dou-
ble-digit growth in Agriculture. Good
-
tainability pull are expected to drive
higher usage of inoculants supporting
increased market penetration of both
bioyield and biocontrol solutions that will
also be enabled through innovation and
a more direct go-to-market model.
Growth in Animal Health & Nutrition will
primarily be driven by innovation as well
as end-market-driven volume growth.
The indication for Agriculture, Animal
Health & Nutrition is to grow at a rate in
the high-single-digits to low-teens.
Uncertainty related to the pandemic and
volatile market conditions are the main
reasons for the relatively broad range.
Sales outlook
Accounts and performance
Governance
Our business
The big picture
Targets & 2022 outlook
32Novozymes A/S
We will develop our roadmap
further towards net zero emissions
by 2050 and implement employee
programs focused on inclusion
F
or 2022, Novozymes expects a solid EBIT

26.8%). Compared to 2021, the EBIT margin
-
ity improvements, targeted price increases, as


investments in the business and lower other
operating income are expected to have a neg-
ative impact. Due to the aforementioned
increase in input costs, the gross margin is
expected to decline by 1.5 to 2 percentage
points.
Return on invested capital (ROIC), including
goodwill, is expected at from 16% to 17%

higher invested capital, mainly from acquisi-
tions.

expected to be between DKK 1.7 and 2.1 bil-

by higher net investments to support long-
term growth ambitions.
For modeling purposes, the following is
provided:




mainly driven by higher hedging costs, primar-
ily related to USD forward contracts, and
somewhat higher interest expenses.
Net investments in 2022 are expected to be

-
zation and expansion investments, also in
new food and health-related customer co-cre-
ation centers, as well as roughly DKK 1 billion
related to the investment in a new state of the
art production line for Advanced Protein
Solutions in Blair, Nebraska.
A stock buyback program of up to DKK 0.5
billion is approved for 2022.
Financial outlook Sustainability outlook
W
ith our refreshed 2021 strategy,
‘Unlocking growth – powered by bio-
tech’, we introduced a new set of long-term
commitments to a healthy planet. The com-
mitments will help accelerate towards a cli-
mate-neutral society, transform food systems,
and enable healthier lives. We also recognize
the urgent need for action and are raising our
commitment on climate change to include all
emissions from our supply chain as well, and
we will now strive for a 50% reduction in
absolute emissions from operations & supply
chain across Scope 1, 2 and 3 by 2030. This is
in line with the climate guidance from the

2021. We are also committed to continue to
ensuring that our employees develop in a
thriving, diverse and inclusive community. For
the post-2022 period, we will communicate


term commitments.
In 2022, we will continue to work towards our
long-term commitments by investing in the
development of solutions that contribute to a
healthy planet, that improve our climate,
water and waste footprints as well as promot-
ing an inclusive and diverse workplace where
employees can stay safe, thrive and grow. We
will develop our roadmap further towards net
zero emissions by 2050 and implement
employee programs focused on inclusion.
Furthermore, we will continue to work
together with partners to drive the global sus-
tainability agenda, such as the U.N. Global
Compact, World Wide Fund for Nature, World
Economic Forum, The B-team and the
Science-Based Targets Initiative.

outlook*
Sales performance,
organic % 
EBIT margin % 25 to 26
ROIC (including goodwill) % 16 to 17

acquisitions DKKbn 
For modeling purposes:
 % ~22
 DKKm ~250
Net investments DKKbn 2.5 to 2.8
Stock buyback program DKKbn 0.5
* Assumes constant currencies from the time of this
announcement and for the remainder of the year.
Accounts and performance
Governance
Our business
The big picture
Targets & 2022 outlook
33Novozymes A/S
Corporate Citizenship
We promote responsible
business behavior and
long-term value creation.
Governance
35 Corporate governance
40 Board of Directors
43 Executive Leadership Team
45 Risk Management
51 Summary of the Remuneration
report
55 The Novozymes stock
Targets & 2022 outlook 34Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
Corporate governance
We drive a proactive and transparent corporate governance structure to ensure
responsible business conduct and long-term value creation. In 2021, several initia-
tives, such as adopting a data ethics policy and new competency targets for the
Board of Directors, further strengthened our commitment to responsible governance.
B
oard composition and responsibilities
In accordance with Danish legislation,
Novozymes has a two-tier management system com-
prising the Board of Directors and the Executive
Leadership Team, with no individual being a member
of both. The division of responsibilities between the
Board of Directors and the Executive Leadership
Team is clearly outlined and described in the Rules of
Procedure for the Board of Directors and the Rules of
Procedure for the Executive Leadership Team. Both
of these rule sets are available at Novozymes.com
Novozymes’ Articles of Association require the
Board of Directors to have from four to eight
members, who are elected at the Annual
Shareholders’ Meeting. The Board of Directors
currently has seven shareholder-elected members,
elected for terms of one year. Nominations are
based on an evaluation of factors such as competen-
cies, diversity, independence, and performance. In
accordance with Danish law, the Board of Directors
also has a number of employee-elected members,
corresponding to half of the number of directors
elected by the shareholders, who serve four-year
terms. In 2021, the number of employee-elected
members increased from three to four.
The Board of Directors is accountable to the
company’s shareholders for the management of the
company. The composition of the Board of Directors
must therefore ensure that the combined competen-
cies of the Board enable it to inspire, guide and over-
see Novozymes’ development, and diligently address
and resolve the issues and challenges facing
Novozymes at any given time.
The individual competencies of the members of the
Board of Directors are shown in the presentation of
the Board. Novozymes' statutory report on diversity
pursuant to section 107d of the Danish Financial
Statements Act is available on our website.
Governance structure
In accordance with the Articles of Association and
the Rules of Procedure for the Board of Directors,
the Board has a Chairmanship consisting of two
members – the Chair and the Vice Chair – who are
responsible for assisting the Board in matters con-
cerning the Executive Leadership Team’s operational
management and for reporting back to the Board.
The Chairmanship is also responsible for planning
and preparing the meetings of the Board.
The Board of Directors' main responsibilities are to:
• Ensure the right management and organizational
structure.
 
governance performance, and the Executive
Leadership Team’s operational management of
Novozymes.
• Supervise the overall management and strategic
development of Novozymes.
• Ensure succession planning at Board and
management level.
2021 with the Board of Directors
Governance
Corporate governance 35Novozymes A/S
Accounts and performance
The big picture
Our business
Extraordinary board meetings
Board meetings
Monthly reports
Annual Shareholders' Meeting
Strategy work
Review of financial performance
Evaluation of collaboration
between the Board of Directors
and the Executive Leadership Team
Organizational performance
review and succession planning
Next year's budget
January
February
March
April
May
JuneJuly
August
September
October
November
December
Corporate governance
The Nomination and Remuneration Committee assists the
Board of Directors in nominating candidates for the Board of
Directors, board committees and the Executive Management,
as well as proposing the remuneration of members of the
Executive Management, the board members and board com-
mittee members. The Nomination and Remuneration
Committee meets when necessary, but always at least twice a
year. The committee held 5 meetings in 2021 with an overall
attendance rate of 100%. Members of the committee in 2021
were Jørgen Buhl Rasmussen (Chair), Cees de Jong, Kim
Stratton and Kasim Kutay.

are reviewed regularly according to the committee’s annual

More information can be found in the Charter of the
Nomination and Remuneration Committee.

-
sity targets and new competency requirements aligned with
the refreshed strategy Unlocking growth – powered by biotech,
nomination of a new board member, Morten Sommer, to
replace Mathias Uhlén in 2022, adoption of a company diver-
sity policy, and an improved process for succession manage-
ment.
The Audit Committee assists the Board in overseeing aspects
relating to accounting, auditing, risks, internal controls and

Audit Committee meets as necessary, but always at least four
times a year. The committee held four meetings in 2021, all
with a 100% attendance rate. Members of the Audit
Committee in 2021 were Heine Dalsgaard (Chair), Jørgen Buhl
Rasmussen and Cees de Jong. information on members, quali-

found in the Charter of the Audit Committee.

review of the impact of COVID-19, accounting for acquisitions
and follow up on M&A learnings over the years, review of the
revised Danish Corporate Governance recommendations, the
new EU whistleblower directive, new EU taxonomy reporting,

reporting, review of tax and of treasury, climate risk manage-
ment and the selection process for the appointment of new
independent auditors in due time.
Novozymes' Audit Committee reviews all reports from a global
corporate whistleblower system for reporting of suspected ille-
gal or unethical misconduct within the Novozymes Group. See
Note 8.4 for more.
The Innovation Committee assists the Board with the review of
Novozymes’ overall capabilities and strategic direction when it
comes to technology, science and innovation. The Innovation
Committee meets as necessary, but always at least twice a
year. The committee held four meetings in 2021, all with a
100% attendance rate. Members of the Innovation Committee
in 2021 were Sharon James (Chair), Kim Stratton and Mathias

-
ment, and recurring tasks, etc. can be found in the Charter of
the Innovation Committee.
In 2021, the Innovation Committee covered, amongst other
topics, R&D implications of the refreshed strategy Unlocking
growth – powered by biotech, R&D Pipeline Strategy and
Progression, Operating / Innovation models for R&D and
Regulatory and Technology Strategy.
The Nomination and
Remuneration Committee
The Audit
Committee
The Innovation
Committee
The Board of Directors has three committees:
The Nomination and Remuneration Committee, the Audit
Committee, and the Innovation Committee.
Governance
Corporate governance 36Novozymes A/S
Accounts and performance
The big picture
Our business
Adoption of new diversity targets in the

Diversity is important to Novozymes, including in
respect of the Board of Directors’ composition in
order to ensure the right mix of skills and competen-
cies to address the challenges of a large global com-

been updated with new and additional targets, and

required on the Board.
First, there is a new target for board tenure to strike
a balance between renewal and continuity.
Consequently, a person should not be nominated for
election or re-election if such board member has
served on the Novozymes board for 12 years.
Another new target is that the Board of Directors
must consist of at least one member that has lived
and worked outside the Nordic countries for a sub-
stantial period of time. Thirdly, it is now a target that
the Board of Directors consists of at least two share-
holder-elected Board members of Nordic nationality
and at least two shareholder-elected Board members
of a nationality other than Nordic. Lastly, the target
for board gender diversity has been revised to the

board members must be female and 40% or more
must be male no later than by the annual sharehold-
ers meeting to be held in 2023.
All targets were met or on track by the end of 2021,
except for the target to have no board members with
a tenure of more than 12 years. With Mathias Uhlén
not seeking re-election in 2022, the Board will again
The composition of the Board of
Directors meets the gender diversity requirements
set out in Danish legislation. Reporting on gender
diversity at other management levels can be found in
Note 8.2 Inclusion & Diversity in the Social and gov-
ernance data section. The competencies and targets
Diversity targets for board members
elected by shareholders
* 40% or more of the shareholder-elected board members must be female and 40% or more must be male no later than by the
annual shareholders meeting to be held in 2023

Governance
Corporate governance 37Novozymes A/S
Accounts and performance
The big picture
Our business
Nationality
Non-nordic
Nordic
4
3
2
Target achieved:
Number of mandates in
listed companies incl. NZ
Target achieved:
100%
≤ 5 mandates
Gender
Men
Women
71%
40%*
Target on track
29%
Has substantial
international experience
Target achieved:
Board members
86%
40%
Board governance structure
57%
43%
Non-independent
Independent
50%
Target achieved:
Lived and worked outside
the Nordic countries
Target achieved:
No
Yes
6
1
1
Tenure
< 12 years
Target achieved:
100%
86%
Executive
position**
Target achieved:
No
Yes
29%
71%
33%
Achieved Not achieved Actual Target

the requirements for personal characteristics, skills,
and experience.
Charters and recommendations
When laying down the management principles for
Novozymes, the Board of Directors followed the
Recommendations on Corporate Governance that
form part of the disclosure requirements applicable
to companies listed on Nasdaq Copenhagen. A
detailed review of Novozymes’ position on each of
the recommendations, and a description of the inter-
nal control and risk management system relating to
statutory
report on corporate governance prepared pursuant
to section 107b of the Danish Financial Statements
Act. These recommendations require companies to
comply or explain any deviations. The recommenda-

2021. The changes have been implemented and
Novozymes continues to follow 39 of the 40 recom-

• Due to the limitations imposed by the Novo
Nordisk Foundation’s Articles of Association and
Novozymes’ ownership structure, the Board of
Directors reserves the right in certain circum-

shareholders. (Recommendation 1.3.1).
In addition, under the Danish Financial Statements
Act (sections 99a and 99b), it is mandatory for large
companies to report on corporate social responsibil-

Novozymes is committed to the ten principles of the
UN Global Compact (UNGC) and as a continuing
member of the UNGC we prepare an annual
Communication on Progress (CoP). The Novozymes
Report together with 'Novozymes & the UNGC 2021'
serves as our CoP and meets the requirements of
sections 99a and 99b of the Danish Financial
Statements Act.
In 2021, Novozymes adopted a data ethics policy.
This policy sets the overall principles for the ethical
management of data by Novozymes and supplements
our commitment to integrity and compliance. The
-
ment to ethical data management are universal prin-
ciples relevant for all categories of data processed in
and by Novozymes. 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.
Other Board-related information
The Board of Directors held 12 meetings in 2021,
with an overall attendance rate of 97%.
Any amendments to the Articles of Association
require that shareholders representing at least two
thirds of the total number of votes in the company
are represented at a shareholders’ meeting, and that
at least two thirds of the votes, as well as two thirds
of the voting capital represented at the meeting, are
cast in favor of the proposal to amend the Articles of
Association.
The Board of Directors has been authorized by the
shareholders to allow the company to acquire trea-
sury stock on an ongoing basis, provided the nominal
value of the company’s total holding of treasury
stock does not exceed 10% of its share capital at any
time, cf. section 198 of the Danish Companies Act.
The purchase price must not deviate by more than
10% from the price quoted on Nasdaq Copenhagen
at the date of acquisition. This authorization applies
until April 1, 2022. In addition, the Board of
Directors is authorized to reduce the share capital.
Each year, one of the responsibilities of the Board of
Directors is to assess whether the capital and share
structure of Novozymes is optimal. The Board of
Directors believes that the share structure with A
and B common stock continues to be the best way in
2021 to safeguard Novozymes’ long-term strategy

shareholders and other stakeholders. Regarding its
capital structure, Novozymes will continue to favor a
rather modestly leveraged balance sheet, as

around 1x EBITDA. Thus, the capital structure is in
line with the target.
Novozymes is party to several partnership contracts
that can be terminated by the other party in the
-
trol of Novozymes. A few of these contracts contain
provisions that restrict Novozymes’ licenses to use

Evaluation of the Board of Directors
For 2021, the Board of Directors commissioned an
external third party to conduct the evaluation, con-
sistent with the recommendations of the Danish
Committee on Corporate Governance that compa-

every third year. The evaluation was based on the
input of eleven board members and eight executives
and relied on in-depth personal interviews, online
questionnaires, analysis of how time was spent
during board meetings, board composition mapping
and board composition benchmarking. As part of the
evaluation, the board members and the executives
were provided with feedback on their individual per-
formance regarding how they add value to the Board
of Directors. The result of the general board evalua-

The Board of Directors
held 12 meetings in
2021, with an overall
attendance rate of
97%.
Governance
Corporate governance 38Novozymes A/S
Accounts and performance
The big picture
Our business
97%
Board member
Audit Committee
member
Nomination and Remuneration
Committee member
Innovation
Committee member Nationality Board meetings attended
Board
tenure
Election
period
Share trading
in 2021
Number of
shares end of 2021
Jørgen Buhl Rasmussen
1,2
Yes Yes (chair) Danish   - 
Cees de Jong
1,2
Yes Yes Dutch   - 
Heine Dalsgaard
1
Yes (chair) Danish   - 
Sharon James
1,2
Yes (chair) British   - -
Kasim Kutay
1
Yes British    
Kim Stratton
1,2
Yes Yes Australian   - -
Mathias Uhlén
1
Yes Swedish   - 
Anders Hentze Knudsen
3
Danish   - -
Lena Bech
3,4
Danish  
Lars Bo Køppler
3,4
Danish  
Anne Breum
3,5
Danish    
Preben Nielsen
3,5
Yes Danish   - 
Jens Øbro
3,5
Danish    
The Board of Directors was deemed to be a
well-functioning board that had worked exceptionally
well together. The operational board processes were
in place and the overall tone of the Board of
Directors was positive, encouraging, and construc-
tive. The Board of Directors and Management per-
ceived themselves as a team with shared goals and
the executives perceived the Board to be knowledge-
able and highly engaged. The conclusion was that the
Board of Directors was well composed compared to
other relevant boards and had become more diverse

While the Board of Directors was perceived to be

focus areas to improve their performance during
2022, including strategy discussions and implemen-
tation, the balance between full board meetings and
committee work and the balance between virtual and
physical meetings.
Statutory report on corporate governance
https://investors.novozymes.com/investors/corporate-governance/articles-of-association-and-reports-on-corporate-governance/
Statutory report on diversity
https://investors.novozymes.com/investors/corporate-governance/articles-of-association-and-reports-on-corporate-governance/
Statutory report on data ethics
https://investors.novozymes.com/investors/corporate-governance/articles-of-association-and-reports-on-corporate-governance/
Novozymes & the UNGC 2021
https://www.novozymes.com/en/about-us/sustainability/transparency-accountability
1. Elected at the Shareholders' Meeting 2. Independent 3. Employee representative 4. Resigned from the Board on March 11, 2021 5. New member of the Board from March 11, 2021 Attended Not attended
Governance
Corporate governance 39Novozymes A/S
Accounts and performance
The big picture
Our business
Jørgen Buhl Rasmussen
Born 1955. Danish. Chair of the Board since 2017.

Copenhagen Business School. Member of the Audit
Committee and Chair of the Nomination and
Remuneration Committee. Member of the Board
since 2011. Elected for a term of one year.
Board positions
Chair: F. Uhrenholt Holding A/S and advisory board
of Blazar Capital
Member: 
Special competencies
Extensive international business and management

-
ing expertise across many businesses, sectors, and
geographies.
Cees de Jong
Born 1961. Dutch. Vice Chair of the Board since
2020. Former CEO of Chr. Hansen. Member of the
Audit Committee and the Nomination and
Remuneration Committee. Member of the Board
since 2020. Elected for a term of one year.
Board positions
Chair: Oterra A/S, Mediq B.V., Meatable B.V. and
A-Mansia Biotech S.A.
Special competencies
Extensive international business and management
experience from a range of industries, such as the
food, food ingredient, and industrial biotech indus-

Heine Dalsgaard*
Born 1971. Danish. CFO of Carlsberg A/S. Chair of
the Audit Committee. Member of the Board since
2020. Elected for a term of one year.
Board positions
Chair: 
Carlsberg Global Business Services A/S
Member: Pandora A/S, Carlsberg Breweries A/S,
Carlsberg Byen Komplementar ApS and Carlsberg
Byen P/S
Special competencies

accounting expertise, as well as extensive experi-
ence in driving strategic results for international

* This board member is not regarded as independent

Recommendations on Corporate Governance that
apply to Danish listed companies.
Sharon James
Born 1961. British. Former Senior Vice President,
Global R&D, Bayer Consumer Health. Chair of the
Innovation Committee. Member of the Board since
2020. Elected for a term of 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.
Novozymes’ Board of Directors has seven members, who are elected at the Annual Shareholders’ Meeting and
four employee-elected members. The Board represents many years of international management experience,
and the members’ competencies combine to ensure expert management of the company.
Board of Directors
Governance
Board of Directors 40Novozymes A/S
Accounts and performance
The big picture
Our business
Board of Directors
Kasim Kutay*
Born 1965. British. CEO of Novo Holdings A/S.
Member of the Nomination and Remuneration
Committee. Member of the Board since 2017.
Elected for a term of one year.
Board positions
Member: Novo Nordisk A/S and Evotec AB
Special competencies
Broad experience within biotechnology, strategy,
business development, mergers and acquisitions,

* This board member is not regarded as independent

Recommendations on Corporate Governance that
apply to Danish listed companies.
Kim Stratton
Born 1962. Australian. Interim CEO of Centogene

ApS. Member of the Nomination and Remuneration
Committee and the Innovation Committee. Member
of the Board since 2017. Elected for a term of one
year.
Board positions
Member: Vifor Pharma AG, Recordati S.p.A.
Special competencies
Broad global commercial experience, including
emerging markets, innovation pipeline management

Mathias Uhlén*
Born 1954. Swedish. Professor at the Royal
Institute of Technology (Sweden), Karolinska
Institutet (Sweden) and the Technical University of
Denmark (DTU). Member of the Innovation
Committee. Member of the Board since 2007.
Elected for a term of one year.
Board positions
Chair: Antibodypedia AB, ScandiBio Therapeutics
AB and ScandiEdge Therapeutics
Vice Chair: 
Member: Atlas Antibodies AB
Special competencies
Broad experience in research and biotechnology.
His research interests cover antibody engineering,
proteomics and precision medicine.
* This board member is not regarded as independent

Recommendations on Corporate Governance that
apply to Danish listed companies.
Mathias Uhlén
will not seek
re-election in
2022 and the
Board of Directors
has proposed the
election of Morten
Sommer as a new
member of the
Board
Governance
Board of Directors 41Novozymes A/S
Accounts and performance
The big picture
Our business
Board of Directors
Anne Breum*
Born 1961. Danish. Laboratory technician.
Employee representative.
Member of the Board since 2021. Elected for a term
of four years.
Anders Hentze Knudsen*
Born 1959. Danish. Senior Operator. Employee

Member of the Board since 2013. Elected for a term
of four years.
Preben Nielsen*
Born 1966. Danish. Science manager. Employee
representative.
Member of the Board since 2021. Elected for a term
of four years. Member of the Innovation Committee.
Jens Øbro*
Born 1977. Danish. Senior Professional. Employee
representative.
Member of the Board since 2021. Elected for a term
of four years.
* In accordance with Danish law, the Board of Directors includes four employee-elected members, who serve four-year terms.
Governance
Board of Directors 42Novozymes A/S
Accounts and performance
The big picture
Our business
Board of Directors
Our eight-member Executive Leadership Team comprises broad and
international management experience, comprehensive biotechnology
expertise and in-depth knowledge of Novozymes’ business.
Executive Leadership Team
Ester Baiget

Education
Holds a chemical engineering degree and an MBA
from the Rovira i Virgili University, Spain.
Special competencies
Ester Baiget is an experienced international leader
with a strong business and technical background.
With more than 25 years of international experi-
ence as a technical and commercial business leader,
Ester has driven transformational change and

businesses. Through her leadership, she develops a
culture of inclusion, engagement, commitment to

results.
Lars Green
Born 1967. Danish. CFO and Executive Vice

Education
Holds an M.Sc. in Business Administration from

Board positions
Member
of trustees of the LEO Foundation and LEO Holding
Special competencies
Lars Green is responsible for the Finance, IT & legal
functions.
Lars has in-depth knowledge of the Novo Group’s
business, international experience from managing
global biotechnology and biopharma companies,

creation across the company.
Amy Byrick
Born 1974. Canadian. Executive Vice President,
Strategy & Business Transformation
Education
BScE in Chemical Engineering from Queen’s
University, Canada, and an MBA from INSEAD,
France.
Special competencies
Amy Byrick is responsible for strategy, commercial
excellence, digital transformation, and for building
new businesses in Strategic Opportunity Areas and
ventures.

Nutrition & Biosciences, where she led the Global
Food & Beverage business. She brings years of
international experience driving strategic transfor-
mation with a focus on post-merger integration,
commercial excellence, and on building an inclusive,
high energy, growth- and results-oriented organiza-
tional culture.
Tina Sejersgård Fanø
Born 1969. Danish. Executive Vice President,
Agriculture & Industrial Biosolutions
Education
Holds an M.Sc. in Chemical Engineering from the
Technical University of Denmark (DTU) and a
diploma degree in Innovation, Strategy and
Marketing in the Food & Beverage industry from

Board positions
Chair (until March 1, 2022): Danish Innovation Fund
Member: 
Special competencies

research, technical service, sales and marketing in
Agriculture & Industrial Biosolutions.

managing global partnerships and has been instru-

for Novozymes over the years. She has strong bio-
tech insights spanning R&D, marketing, and sales.
Governance
Executive Leadership Team 43Novozymes A/S
Accounts and performance
The big picture
Our business
Executive Leadership Team
Claus Crone Fuglsang
Born 1968. Danish. CSO and Executive Vice

Education
Holds an M.Sc. in Biochemistry from the University
of Copenhagen and an MBA from Heriot-Watt
University, Edinburgh Business School, Scotland,
supplemented with courses at MIT, Boston and
IMD, Lausanne.
Board positions
Member: Microbiogen Ltd., Biobased Industries
Consortium, Erhvervspræsidiet for TekTanken and
the Danish governmental panel on bio-economy
Special competencies
Claus Crone Fuglsang is responsible for Enzyme
and Microbe Research, Product & Process

Safety, Intellectual Property & Licensing and R&D

Claus has strong leadership experience within R&D
functions along with driving and leading partner-

international research and business experience.
Anders Lund
Born 1973. Danish. Executive Vice President,
Consumer Biosolutions
Education
Holds an M.Sc. in Economics from Aarhus

Special competencies
Anders Lund is responsible for application
research, technical service, sales and marketing in
Consumer Biosolutions including Household Care
and Food & Beverages.
Anders has a strong commercial and strategic back-

and executing Novozymes’ strategies over the last
two decades. He also has extensive experience in
building customer relationships in several of
Novozymes’ business areas.
Graziela Chaluppe dos Santos Malucelli
Born 1973. Brazilian. COO and Executive Vice

Education

Catholic University of Paraná, Brazil.
Special competencies
Graziela Chaluppe dos Santos Malucelli is globally
responsible for Production, Supply Chain, Planning
& Product coordination, Engineering, Facility
Services, Sourcing, Quality, Environment & Safety.
She is also responsible for managing environemntal
-
tions and supply chain.
Graziela has extensive experience from leadership
roles in Brazil, the U.S., China, India, Denmark and
has been developing key operational functions
across the company. For more than 20 years, she
has been driving continuous productivity and sup-
ply of solutions with a strong customer focus.
Morten Enggaard Rasmussen
Born 1976. Danish. Executive Vice President,
People, Sustainability & Brand
Education
Master of Science degree from the Aarhus School
of Business.
Special competencies
Morten Enggaard Rasmussen is responsible for
Novozymes’ people agenda, sustainability leader-
ship and brand. He is also responsible for managing

Society.

where he was Vice President of People & Culture, in

track record of building and developing high perfor-
mance teams across the globe with a particular
focus on responsible business. He has managed

has operated as a trusted business partner across
various functions and geographies.
Executive Leadership Team
Governance
Executive Leadership Team 44Novozymes A/S
Accounts and performance
The big picture
Our business
Potential impact
Probability
Volatility of
agriculture-
related
business
Competition
and market
consolidation
Cyberattacks
Global political
and economic
instability
Risk assessment heat map
Climate change related risk

global and diverse nature of the industries we operate
in. Within an evolving risk management framework,
we identify and mitigate key risks to secure our
business and our impact now and in the future.
Risk management O
ur risk management process ensures that we
identify, assess and mitigate key business risks
that may impact our ability to grow our business, be

our customers and the communities we operate in.
In addition to addressing key enterprise risks which
could potentially materialize in the short term i.e.
within the next three years, we also monitor lon-
ger-term threats and trends, like climate change and
technology development. We seek to have an inte-
grated and holistic approach of assessing and priori-

terms.
To manage businesses responsibly and have an
impact, climate-related risks, such as supply disrup-
tions owing to extreme weather events, should be
addressed in a structured way. Hence, in 2021, we
focused on further integrating and developing cli-
mate change risk management as part of our risk
management framework, which was presented to
and discussed by the Board of Directors and the
Audit Committee, in alignment with our commitment
to TCFD (Taskforce on Climate-related Financial
Disclosures). In 2022, we will continue to work on
how to further strengthen our management of ESG
risks to our business, including climate-related risks,
and explore how best to address such risks in a lon-
ger-term perspective.
In shaping our refreshed strategy Unlocking growth

part of our assessment of climate-related risks pro-
vided the foundation for our 2030 commitments. Our
solutions could be key in addressing many of the cli-
mate-related risks facing the world today.
The COVID-19 pandemic continues to impact supply
chains and societies around the globe, leading to
uncertainties in 2022 and beyond. To safeguard our
people, operations, and communities, the Executive
Leadership Team monitors and addresses potential
business risks arising from the pandemic, e.g.,
changed consumer behaviors and declining GDP
growth.
Risk management framework
The Board of Directors has the overall responsibility
for overseeing risks and for maintaining a robust risk
management and internal control system. Novozymes
operates an Enterprise Risk Management (ERM) pro-
-


organization. Each key risk is assigned to a risk owner
from the Executive Leadership Team and a Risk
Responsible, usually a Vice President, in charge of
mitigating all risks relevant to their respective areas.
The Risk Management & Controls department is
responsible for ensuring that senior management
promotes risk awareness, engagement, and owner-
ship across the organization. Risks are assessed
based on a two-dimensional heat map rating system
that estimates the potential impact of a given risk on

risk materializing.

assessed by the Executive Leadership Team and the
Board of Directors.

risk factors and risk management
Governance
Risk management 45Novozymes A/S
Accounts and performance
The big picture
Our business
Risk management
Competition and market consolidation
Description of risk
Novozymes is the market leader
in the global enzymes market,
which remains highly competi-
tive. We could face increased
competition from other enzyme
-
tions or from new players with
technology platforms that are
broader than ours. The recent
instability of global supply chains
has the potential to favor local
suppliers and we continue to see
a risk of competitors operating
under less regulated market con-
ditions.
Although consolidation can make
the market more stable, it could
also increase a competitor’s

power.
Mitigating actions
In 2021, we enhanced our go-to-market strate-
gies, accelerating regionally relevant innova-
tions and upgrades, and strengthening
customer relationships. We also acquired new
businesses, entered into strategic partnerships
and launched new innovations. Despite pres-
sure on supply chains, we managed to deliver
our orders to customers throughout 2021, with-
out compromising on our fast response and
dedicated service, thereby further improving
the customer experience. As part of our
refreshed strategy, we will form regional cus-
tomer co-creation centers to work with local
customers and cater to their needs.
In 2022, we will continue to improve our go-to
market strategies, invest in consumer insights,
accelerate regional innovations to strengthen
our position in selected markets, and build on
our strong relationships with key customers and
partners. We will also further strengthen our
ability to deliver the broader biotech solutions
that set us apart from the competition.
Volatility of agriculture-related business
Description of risk
Our agriculture-related business
-
ous elements, such as weather
conditions, commodity prices,
political mandates for ethanol
blends, etc. However, many of our
businesses may potentially be

issues, as can be seen from the
supply issues in the agriculture
value chain.
In the U.S., the new infrastructure
bill currently in progress may end
up challenging our ability to grow
in the bioenergy market if the bill
favors electric vehicles over other
alternatives to gasoline.
With the growing impact of —

towards — climate-related

over the coming years.
Mitigating actions
In 2021, we continued to work with ethanol cus-
tomers to explore alternative value streams
-

biobased derivatives) with the help of our


We continue to nurture and invest in our valu-
able partnerships in the agriculture industry. In
2021, the DSM - Novozymes Alliance launched
-
tease technology to reduce even further the
environmental footprint of poultry production
and deliver greater cost savings to customers.
We also announced a strategic partnership with
FMC, a leading global agricultural sciences com-
pany, to research, co-develop, and commercial-
ize enzyme-based crop protection solutions.
In 2022, we remain focused on leveraging our
-
tions to agricultural challenges and diversify
their revenue streams, as well as optimizing our
internal commercial competences, including
technical sales support and digital tools for pro-
duction optimization.
Key enterprise risks for 2022
Climate change related risk
Governance
Risk management 46Novozymes A/S
Accounts and performance
The big picture
Our business
Cyberattacks
Description of risk
The threat of cyberattacks to our
business operations continues to
be a material risk. Preserving
business continuity and safe-
guarding sensitive business data
and critical assets against this
global threat is extremely import-
ant. Accelerating digitalization
continuously exposes Novozymes
to such threats and cybercrime
could have a negative impact on
our productivity if systems are
inaccessible for an extended
period of time. Our business
could also be adversely impacted
if information about our unique
technologies or production
strains is disclosed.
Mitigating actions
This threat continues to intensify but so has our
ability to identify, protect, detect, and respond
to cyberattacks. In 2021, we implemented and
tested initiatives on IT emergency response and
will continue to improve on these regularly. We
have also increased our focus on measuring our
actual security level and obtaining better trans-
parency in infrastructure and system manage-
ment.
To protect our business opportunities from the


our more than 7,000 granted or pending pat-
ents.
In 2022, we will continue to improve and
develop our many IT security initiatives, includ-
ing our OT (Operational Technology i.e. produc-
tion systems) Cyber Security Strategy. A
thorough understanding of OT risks is the foun-
dation for making the right decisions on how to
protect our production facilities to ensure they
stay operational at all times.
Global political and economic instability
Description of risk
Novozymes’ global footprint
exposes our business to the con-
sequences of global political and

instability persists in the global
economy and trade conditions
but as the risk of a hostile trade
environment has not ramped up,
we have assessed the short-term
likelihood of this risk to have
reduced relative to 2020. Still,
political uncertainty and low
growth remain in many regions,
compounded by the uncertainties
of the COVID-19 pandemic.
Mitigating actions
In 2021, Novozymes closely monitored political
and economic developments with an agile mind-
set to ensure fast action could be taken when
needed. We also employed global versus local
considerations in short- and long-term capacity
planning, to ensure we could continue to deliver
orders to customers even in challenging condi-
tions.
-
ization and a shared commitment to sustainabil-
ity on the global stage, such as at COP26 in
Glasgow. And we work collaboratively with
many valuable partners to drive a responsible
business agenda, such as the World Economic
Forum, the International Chamber of
Commerce, The B Team, the UN Foundation and
Business Fights Poverty.

settled to ensure political stability and free
trade. With the help of improved data analysis,
general monitoring and the commitment and
drive of our employees, we will improve the
monitoring of these events as well as our speed
of response.
Governance
Risk management 47Novozymes A/S
Accounts and performance
The big picture
Our business
Emerging risks
Concerns regarding new and emerging technologies
Description of risk
Industrial biotechnology is a key
enabling technology for the deliv-
ery of natural, low-carbon and bio-
based solutions. Over the coming
years, we expect to see further sig-
-
ing the use of gene editing, which
could be met with increasing gov-
ernment and NGO scrutiny. This
can limit or slow the application of
biotechnology. Novozymes’
research and business are based
on bio-innovation and through

and innovative answers to some of
the planet’s most pressing chal-
lenges, such as carbon capture,
sustainable food systems or replac-
ing chemicals with biodegradable
solutions.
Mitigating actions
We apply and promote safe and responsible use of biotech-
nology. We are committed to sharing our knowledge about
the potential of biology and industrial biotechnology with
external stakeholders. Through proactive engagement with

of the potential of technology, paving the way for future solu-
tions to pressing challenges.
Through our growing cooperation with the Novo Nordisk
Foundation, we are exploring ways to provide new documen-
tation and insights into biotechnology. Together, we engage
with the World Economic Forum’s community to promote bio-
solutions, while advocating for science-based and innova-
tion-friendly policy frameworks for the introduction of
solutions based on new gene technologies. We also drive the
innovation agenda through business and industry organiza-
tions.
Learn more in Note 7.6 and our position
statement on industrial biotechnology.
Water-constrained future
Description of risk
Increased long-term
pressure on our water
resources is a key
chronic risk driven by
climate change. We rely
on water to maintain
our production capacity.
Many of our raw materi-
als are agricultural and
water intensive to pro-
duce. A severe drought
or reduced water supply
could impact our pro-
duction and limit our
ability to meet customer
demand by directly
impacting our own oper-
ations or our supply
chain.
Mitigating actions
To continue addressing this long-term risk,
we are developing context-based water pro-
grams for our production sites and piloting
-
ology for water. We support our water stew-
ardship agenda further with external
engagements including the UN Global
Compact, the CEO Water Mandate, the
World Wide Fund for Nature (WWF) and
the Science Based Targets Network (SBTN).
Our solutions in laundry, technical indus-
tries and agriculture also enable reduced
aquatic pollution by reducing the load on
wastewater treatment in these industries.
We disclose more details annually in CDP's
Climate Change and Water Security ques-
tionnaires. Learn more in Notes 7.1 and 7.3.
In addition to the key enterprise risks, Novozymes
also closely monitors emerging risks that have the
potential to impact our business in the long-term (3+



Via our integrated sustainability trendspotting
exercise, we identify long-term risks and

through our enterprise risk management process.
We engage with relevant stakeholders in a timely
manner to develop strategies and ensure that we are
prepared to take adequate action and respond to
those key emerging risks. The following continue to

Climate change related risk
Governance
Risk management 48Novozymes A/S
Accounts and performance
The big picture
Our business
Novozymes’ climate-related

At Novozymes, we are fully committed to doing our part to help
society in the net-zero transition. We actively invest in lowering
our own carbon footprint and delivering low-carbon solutions.
In alignment with the recommendations of the
Taskforce on Climate-related Financial Disclosures
(TCFD), we include climate-related disclosures
throughout this report. For ease of reference, these
are summarized below around the four themes from
TCFD recommendations. In the coming years, we aim
to integrate more detailed climate-related disclo-
sures.
Governance

Directors and Executive Management take into con-
sideration in managing the company. Novozymes has
Board-level oversight of its management of cli-
mate-related issues, as a part of its responsibility to
-
ernance (ESG) performance. The Board of Directors

our climate strategy and targets and has overall
responsibility for overseeing risk management and
control, including climate-related risks.
To ensure the integration of sustainability into
Novozymes’ business strategies and innovation pipe-
line and, consequently, our ability to deliver solutions
that meet the needs of society and drive sales
growth, we have established a Corporate
Sustainability Committee, comprising of various
executive and senior leaders. The committee is also
responsible for setting Novozymes’ strategic direc-
tion, ambitious sustainability targets, and securing a
strong internal foundation of responsible business
practices.
Strategy

support the transition to a low-carbon economy, and
climate change action forms an integral part of our
business strategy. In 2021, as part of our refreshed
strategy, we invested to develop solutions for cli-
mate-related opportunities in Advanced proteins and
Carbon Capture.
Spotlight story:
Innovating for a climate-neutral society
Governance
Novozymes’ TCFD disclosures 49Novozymes A/S
Accounts and performance
The big picture
Our business
Novozymes’ CDP Climate Change and
Water Security response at
www.cdp.net.
‘Risk Management’,
‘Targets’, ‘Strategy’,
Note 7.1 'Climate change’
and Note 7.2 'Energy’
Novozymes’
position paper on
Climate Change at
Novozymes.com
For more information,
go to:
Novozymes’ TCFD disclosures
Alongside these opportunities, issues associated
with climate change (regulatory action, physical or
reputational damage, etc.) also pose multiple risks to
our supply chain and operations.
We recognize the value of using climate scenario
analysis to understand the implications of climate
change on our business, in guiding our overall strat-
egy and in preparing for the future. Currently, we are

risks in our agricultural value chain and the potential

and operations. While we presently use scenario
analysis for qualitative assessments, we also expect
to conduct quantitative assessments using relevant
numerical models in the coming years.
Risk management
Climate change is an important factor when we look
at the risks to our business. Our production pro-
cesses are water-intensive and many of the raw mate-
rials sourced are agriculture-based and

more frequent extreme weather conditions and other
climate-related impacts. A severe drought could
impact our production and limit our ability to meet
customer demand by directly impacting our own
operations or our supply chain.
As part of our risk management process, climate-re-



a systematic risk mapping process that includes risks

and regulatory changes. We also conduct periodic
-
cant production sites, with third parties being
engaged to conduct periodic risk assessments and
reviews.
We will continue to work on how to further
strengthen our management of ESG risks in our busi-
ness, including climate-related risks.
Metrics and targets
Novozymes is committed to the Science-Based
Targets Initiative and to our long-term goal of achiev-
ing net zero across operations and value chain by
2050, a goal we set in 2019.

Intergovernmental Panel on Climate Change (IPCC)



• a 50% reduction* in absolute CO emissions from
our operations (Scopes 1 & 2) and supply chain
(Scope 3) by 2030.
• source 100% renewable electricity by 2030.
* From a 2018 baseline
Reporting on the EU Sustainable Finance Taxonomy
The EU Taxonomy Regulation requires listed compa-
nies to disclose the share of their turnover, capital
and operational expenditure associated with environ-
mentally sustainable economic activities. Despite the
positive environmental impact from our biological
solutions and our focus on minimizing our environ-
mental footprint, Novozymes’ activities do not fall
within the scope of the EU Taxonomy Regulation and
we have no activities eligible for this reporting
requirement.
Governance
Novozymes’ TCFD disclosures 50Novozymes A/S
Accounts and performance
The big picture
Our business
Summary of the
remuneration
report
In 2021, Novozymes delivered a highly
satisfactory performance and solid set

Each year Novozymes issues the Novozymes
Remuneration Report as a separate report. The con-
tent of the remuneration report has been prepared
to meet the requirements of section 139b of the
Danish Companies Act and holds information and
details on the remuneration of the Board of Directors
and the Executive Management. The Novozymes
Remuneration Report 2021 will be presented for an
advisory vote at the Annual General Meeting to be
held in 2022. The Novozymes Remuneration Report
2020 was approved at the Annual General Meeting
held in March 2021 without any comments.
All remuneration of the Board of Directors and the
Executive Management in 2021 has been in line with
the scope of the approved remuneration policy.
The following is a summary of the Novozymes
Remuneration Report 2021.
General remuneration policy
Novozymes’ remuneration policy for managers and
other employees is designed to both encourage
strong individual performance and 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' individ-
ual performance and to the level of achievement of
-
gets. The remuneration policy aims to provide man-
agers and other employees with a competitive

external benchmarks.
The Novozymes
Remuneration Report
2020 was approved at the
Annual General Meeting
held in March 2021 without
any comments.
Governance
Summary of the remuneration report 51Novozymes A/S
Accounts and performance
The big picture
Our business
Summary of the remuneration report
The individual board
members' fees and their
shareholdings can be
found in the Novozymes
Remuneration Report
2021.
Remuneration of the Board of Directors
The remuneration of the Board of Directors comprises

that the Board of Directors safeguards the company’s
long-term interests without taking into consideration
what this may mean in terms of the value of incen-
tive-based remuneration. The Board of Directors’ fee


the complexity of the Novozymes Group, the scope of
the work, and the number of Board meetings held.


since 2015. The Chair receives a fee that is three times
the base fee and the Vice Chair a fee that is two times
the base fee.
For committee work, the committee Chair and other
committee members receive a further base fee and
half a base fee respectively. However, the Chair and
the Vice Chair of the Board of Directors do not
receive such additional fee if appointed to the
Nomination and Remuneration Committee.
The size of the Board of Directors increased from 10
to 11 members in 2021, now consisting of seven
shareholder-elected members and four employ-
ee-elected members. The total remuneration paid to
the Board of Directors in 2021 amounted to DKK 9.8
million compared to DKK 8.2 million in 2020. The
increase is a result of the full-year impact of the
Innovation Committee that was established in
August 2020, the increase in the number of
employee representatives from three to four and the

The individual board members' fees and their share-
holdings can be found in the Novozymes
Remuneration Report 2021.
Remuneration of the Executive Management
As per December 31, 2021, the Executive

 
(CEO)
• Lars Green, Executive Vice President & Chief

Thomas Videbæk, former Executive Vice President &

The total remuneration to members of the Executive

• A base salary plus pension, a company car and

• A short-term incentive program
(cash bonus) - STIP
• A long-term incentive program
(stock-based program) - LTIP
In 2021, the members of the Executive Management
received a 2.3% increase in their base salary.
Ester Baiget and Lars Green will in addition to their
regular remuneration receive compensation for lost
incentives from their previous employers. The com-

period 2020-2023, Ester Baiget may receive up to a
total of DKK 9.6 million in extraordinary sign-on com-
pensation for lost incentives from her previous
employer, of which DKK 4.2 million was paid out in
2020 and DKK 1.4 million was paid out in 2021. Over
the period 2020-2023, Lars Green may receive up to
a total of DKK 14.5 million in extraordinary sign-on
compensation for lost incentives from his previous
employer, of which DKK 0.7 million was paid out in
2020 and DKK 4.3 million was paid out in 2021.

2021. His severance package, totaling DKK 35 mil-
lion, was fully expensed in 2020. Severance pay of
DKK 9 million was paid out in 2020, while the remain-
ing DKK 26 million was paid out in 2021.
The targets for the short-term incentive program
(STIP) are typically set by the Board of Directors in
connection with the review of the business plan for
the year. Good performance will result in target pay-
out (65%) while the maximum payout is only achieved
for delivering extraordinary performance. Maximum
payout equals 9.5 months’ salary.
In 2021 the targets for the STIP were split on the

-
gets for the individual executives at 40% weight.


target beeing exceeded. The payout related to these
targets was 100% and 77%, respectively.
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 would be
95% for Ester Baiget and 85% for Lars Green.
Governance
Summary of the remuneration report 52Novozymes A/S
Accounts and performance
The big picture
Our business
Remuneration to individual members of the Executive Management
Fixed Variable
 
DKK million Salary
Contribution
based
pension
Other


(% of total
remuneration)
Cash bonus
(STIP)
Incentive
programs
(LTIP)
Total variable
(% of total
remuneration)
Total
remuneration
Compensation
for lost
incentives
Total
remuneration
Severance
package*
Ester Baiget, CEO (from 1/2-2020)           -
 
Lars Green, CFO           -
 
Former executives
Thomas Videbæk (to 30/04-2021)      -   -  
Peder Holk Nielsen (to 31/01-2020) 
Remuneration           

incentive programs are expensed over the four-year vesting period. The long-term incentive included in the above table is the cost of the 2021 program measured at market value at the grant date.
* Thomas Videbæk’s severance package was fully expensed in 2020. The severance package consisted of salary, pension and bonuses during the notice period as well as termination compensation and compensation for not being part of the stock-based incentive
program in 2021.
Short-term incentive program – Target achivement
Weight Target % / (index) Ester Baiget, CEO Lars Green, CFO
45% EBIT % of maximum /
(index compared to target
performance)
100   
15%  77   
40% Individual targets 95   
Total, % of max 95  91 
Total, DKK million  
Governance
Summary of the remuneration report 53Novozymes A/S
Accounts and performance
The big picture
Our business
Since 2020, the Board of Directors has issued annual
long-term incentive program (LTIP) grants with over-
lapping three-year performance periods. This allows
the Board of Directors to re-assess targets for each
-
ciently demanding, incentivizing and aligned with the
strategy.
The new LTIP for the Executive Management cover-

2021. The LTIP consists of 50% shares and 50%
share options. Like the previous LTIP, the targets of

organic sales growth, 40% weight on the target on
-

refreshed strategy and the measures of business suc-
cess for the period 2021-2023.
The annual LTIP cannot exceed 19 months’ base sal-
ary. Further, the program includes a maximum-value
clause allowing the Board of Directors to choose to
limit the total allocation of stock options and stock if
the intrinsic value exceeds twice the full annual con-
ditional grant.
The members of the Executive Management have
contracts of employment containing standard
-
panies, including the periods of notice that both par-
ties are required to give and noncompetition clauses.

terminated by the company without any misconduct
-
cer has a notice period of 12 months. In addition to

termination compensation of 12 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 2021.
Remuneration of senior leadership
The remuneration of Novozymes’ senior leadership
(185 vice presidents and directors) is consistent with
the general remuneration policy. Incentive programs
for vice presidents and directors have been estab-
lished for the 2021-2023 period. The programs follow
the same mechanisms as the program for the
Executive Management. Further information on the
incentive programs for these employee groups can

statements, which also includes an overview of out-
standing stock options.
Governance
Summary of the remuneration report 54Novozymes A/S
Accounts and performance
The big picture
Our business
The Novozymes stock
The total shareholder return was 55% in 2021, including share price appreciation of
54% and DKK 1.5 billion dividend payments made during the year. Novozymes
repurchased shares worth DKK 1.5 billion thereby completing the 2021 stock buyback
program. A dividend of DKK 5.50 per share has been proposed and a new stock
buyback program of up to DKK 500 million will be initiated in 2022.
S
tock performance
Novozymes total market cap reached DKK 151.5

B) increased by 54% from the closing price of DKK
349.5 at the end of 2020 to DKK 537.2 at the end of
2021.
The strong share price performance together with
the dividend payment of DKK 1.5 billion made during
the year resulted in a total shareholder return of 55%
for the year. This was the highest shareholder return

average annual return (compounded) to shareholders

The average daily trading volume of the stock was
410,337 shares or DKK 180 million, making it the
13th most actively traded company on Nasdaq
Copenhagen, which was unchanged from 2020.
Share and ownership structure
The common stock consists of 282,000,000 shares
all with a nominal value of DKK 2 per share. The com-
mon stock is divided into 53,743,600 A shares that
carry 20 votes each and 228,256,400 B shares that
carry 2 votes each.
Novozymes had more than 57,000 shareholders at
the end of 2021, and roughly 74% of the B shares
were held outside Denmark, mainly by institutional

Holdings A/S, held approximately 62% of the B
shares. Novo Holdings A/S held 25.5% of the total
common stock in Novozymes and controlled 72.6%
of the votes. Novo Holdings A/S is wholly owned by
the Novo Nordisk Foundation, an independent

stable base for the companies within the Novo Group

A stock B stock Total
Share capital (DKK)   
Number of shares   
Held by Novo Holdings A/S (%)   
Number of votes   
Voting rights (%)   
Held by Novo Holdings A/S (%)   
Share price development 2021
Dec DecNovJan Feb Mar Apr May Jun July Aug Sep Oct
80
90
100
110
120
130
140
150
160
Novozymes
OMX C25 CAP
Governance
The Novozymes stock 55Novozymes A/S
Accounts and performance
The big picture
Our business
The Novozymes stock
Ownership structure
Institutional and
private investors
74.5% of total shares
27.4% of votes
Novo Nordisk
Foundation
Novo Nordisk
Holding A/S
25.5% of total shares
72.6% of votes
Stock buyback programs
Novozymes repurchased 3,401,975 shares during the
period from February 8 to August 30, as part of the
DKK 1.5 billion stock buyback program for 2021. The
repurchased shares were added to the treasury
stock. Novozymes held 4,894,362 treasury shares, or
1.7% of the total stock capital, at the end of 2021.
A new stock buyback program worth up to a total of
DKK 500 million or a maximum of 5 million shares
will be initiated in 2022.
Dividends
The Board of Directors proposes that the Annual
Shareholders’ Meeting approve a dividend of DKK
5.50 per share for a total payout of DKK 1,524 mil-

The Novo Nordisk Foundation is an independent
Danish foundation with corporate interests. The

to provide a stable base for the commercial and
research activities conducted by the companies

social and humanitarian purposes.
Investor Relations
Novozymes’ Investor Relations maintains an ongoing
dialogue with sell-side equity analysts as well as

dividend corresponds to a payout ratio of 48.5%,
which would be a decrease from 51.9% in 2020. The
proposal is in line with the previously stated plan to
have a payout ratio of ~50%.
If approved, the 2021 dividend will be disbursed on
March 21, 2022, with March 16, 2022, as the last
trading day with dividend for 2021.
Novozymes repurchased 3,401,975 shares
from February 8 to August 27, as part of the
DKK 1.5 billion stock buyback program for 2021
A list of the current analysts covering Novozymes
can be found at Investors.novozymes.com.
Total shareholder return including dividends %
201920182017 2020
2021
47%
-16%
14%
9%
55%
Ownership by geography (B shares)
Denmark 26%
UK & Ireland 32%
Rest of Europe 17%
North America 21%
Rest of world 4%
Governance
The Novozymes stock 56Novozymes A/S
Accounts and performance
The big picture
Our business
Accounts and performance
Governance
Our business
The big picture
57Novozymes A/S
Accounts and
performance
58 Performance and consolidated

66 Performance and consolidated
environmental data
68 Performance and consolidated
social and governance data
70 Notes
143 Statements
148 Financial statements for
Novozymes A/S
162 Glossary
163 About the report
EBIT and EBIT margin
DKK million
2019
2018
2017
2020 2021
4,047
4,070
4,039
3,652
4,007
EBIT EBIT margin (%)
28.3
28.1
26.1
27.9
26.8
2019
2018
2017
2020 2021
14,531
14,390
14,374
14,012
14,951
Sales Sales growth, organic (%)
4
4
(1)
0
6
Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
Sales and earnings
58
Sales
Total sales in 2021 were DKK 14,951 million,
corresponding to an increase of 6% organically
and of 7% reported in DKK compared with 2020.

lessened in 2021, changes in consumer behavior


Beverages & Human Health delivered strong


was supported by recovering U.S. ethanol

ethanol production in Latin America, while

Processing came from strong demand for


Nutrition performed much as expected.
Other operating income
Other operating income was DKK 188 million,
compared with DKK 56 million in 2020. Other
operating income in 2021 was positively
impacted by DKK 62 million from the contingent

related royalty, and DKK 60 million from the sale

EBITDA

up from DKK 4,918 million in 2020. Depreciation,
amortization and impairment losses were DKK
1,416 million in 2021, up 12% from DKK 1,266
million in 2020. The increase was mainly due to
amortization related to the PrecisionBiotics
Group and the Microbiome Labs acquisitions.
EBIT and EBIT margin


ended at 26.8%, up from 26.1% in 2020.


in 2021 was around 27%.



margin was 57.7%, up from 56.0% in 2020. The
increase was mainly due to improved production


currency developments.
Operating costs

million. Operating costs as a percentage of sales

• Sales and distribution costs increased by 22%,

• Research and development costs increased by

• Administrative costs increased by 16%,
accounting for 6% of sales.
The increase in operating costs in 2021 was
mainly due to increased commercial activities, the

reorganization within research and development.


compared with DKK 127 million in 2020.
Novozymes realized a DKK 4 million currency
hedging/revaluation net loss for 2021, compared

Tax

in 2020.
Earnings per share (diluted)

compared with DKK 10.02 in 2020.
Sales and earnings
Sales and earnings
Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
Sales and earnings
59
Consolidated statements of income
Income statement
DKK million Note  
Revenue  14,951 14,012
  (6,328) (6,159)
 8,623 7,853
Sales and distribution costs  (1,936) (1,581)
Research and development costs  (2,009) (1,937)
Administrative costs  (859) (739)
Other operating income, net  188 56
 4,007 3,652
Share of result in associates (4) (4)
Financial income  174 26
Financial costs  (253) (153)
 3,924 3,521
Tax  (779) (695)
 3,145 2,826

Shareholders of Novozymes A/S 3,146 2,825
 (1) 1
3,145 2,826
Proposed dividend per share, DKK 5.50 5.25
Earnings per share, DKK  11.32 10.07
Earnings per share, diluted, DKK  11.23 10.02
Statement of comprehensive income
DKK million Note  
 3,145 2,826

income statement:
Currency translation adjustments
 723 (786)
Tax on currency translation adjustments (2) 1
Currency translation adjustments 721 (785)

Fair value adjustments (173) 154
Tax on fair value adjustments 38 (34)
  (31) (15)
 7 3
 (159) 108
Other comprehensive income 562 (677)
Comprehensive income 3,707 2,149

Shareholders of Novozymes A/S 3,706 2,149
 1 -
3,707 2,149
2019
2018
2017
2020 2021
4,063
3,679
3,196
4,355
4,062
* The comparatives for 2017-2018
have not been restated for IFRS 16
Net investments
DKK million
2019
2018
2017
2020 2021
1,665
1,388
991
936
11.5
9.6
6.9
6.7
7.5
1,116
Net investments Net investments (% of sales)
2019
2018
2017
2020 2021
2,398
2,291
2,205
3,419
2,946
Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

60








improved earnings quality. The change in net


Net investments
Net investments excluding acquisitions were DKK

Net investments in property, plant and equipment
amounted to DKK 1,071 million, compared with
DKK 794 million in 2020, partly due to the
investment in the new production line in Blair,

Financing activities

negative at DKK 1,586 million, compared with a



program of DKK 1,500 million and dividend

net borrowings.
Cash position



Undrawn committed credit facilities were DKK


acquisitions and divestments

divestments amounted to DKK 2,946 million,

decrease of 14% was mainly driven by the

activities and an increase in net investments.




acquisition of Microbiome Labs and Synergia Life
Sciences.

Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

61

DKK million Note  
 3,145 2,826
  2,198 2,220
  (627) (951)
 18 10
 (52) (62)
 4,682 4,043

 (574) 395
 (556) 181

contract liabilities 518 (265)
 (8) 1
 4,062 4,355
Investments
Purchase of intangible assets  (169) (146)
Purchase of property, plant and equipment  (1,071) (794)
Sale of property, plant and equipment 124 4
Business acquisitions, divestments and purchase of
  (1,631) (588)
 (2,747) (1,524)
 1,315 2,831
DKK million Note  
Financing
Borrowings 2,144 999
Repayment of borrowings (1,283) (434)
 313 (293)
Repayment of lease liabilities (103) (111)
Shareholders:
 (1,500) (1,500)
 309 508
Dividend paid (1,466) (1,483)
 (1,586) (2,314)
 (271) 517

included in cash and cash equivalents 53 (47)
Net change in cash and cash equivalents (218) 470
 1,181 711
 963 1,181
Net working capital
% of sales
2019
2018
2017
2020 2021
Inventories
Receivables
Net working capital
Payables and deferred income
-30
-20
-10
0
10
20
30
2019
2018
2017
2020 2021
12,732
25.6
13,417
15,038
15,301
16,606
24.2
21.1
18.9
19.3
Average invested capital ROIC (%)
Net interest-bearing debt (NIBD) and
net interest-bearing debt-to-EBITDA
DKK million
2019
2018
2017
2020 2021
1,642
2,535
4,049
3,871
0.3
0.5
0.8
0.8
1.0
5,225
NIBD NIBD/EBITDA
Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
Balance sheet and financial position
62

Total assets
Total assets increased from DKK 20,510 million at


driven by net investments, an increase in net

Microbiome Labs and Synergia Life Sciences,

Invested capital

million in 2020 to DKK 18,118 million in 2021.
This was mainly a result of an increase in
intangible assets from the acquisitions of
Microbiome Labs and Synergia Life Sciences.






million, dividend payments of DKK 1,466 million
and the acquisitions of Microbiome Labs and
Synergia Life Sciences as well as the investment

ROIC


from 18.9% in 2020. The increase was mainly


following the PrecisionBiotics Group, Microbiome
Labs and Synergia Life Sciences acquisitions.



due to an increase in inventories and trade

payables.





Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
Balance sheet and financial position
63

Assets
DKK million Note  
  5,024 2,554
Land and buildings  3,980 3,853
Plant and machinery  4,290 4,136
Other equipment  1,039 941
Assets under construction  876 682
Deferred tax assets  1,637 1,339
 30 21
 29 33
Other receivables  39 40
Non-current assets 16,944 13,599
  2,992 2,361
Trade receivables  2,948 2,549
  40 6
Tax receivables  286 460
Other receivables  519 212
 75 119
 963 1,181
7,823 6,888
Assets held for sale  - 23
Current assets 7,823 6,911
Assets 24,767 20,510

DKK million Note  
  564 570
Reserves and retained earnings 11,263 10,663

 11,827 11,233
  379 11
Total equity 12,206 11,244
Share purchase liability  717 -
Deferred tax liabilities  1,337 1,204
Provisions  153 115
  543 146
Lease liabilities 360 386
Deferred income 98 -
  3,680 3,254
 6,888 5,105
Lease liabilities 122 136
Provisions  21 90
  2,139 1,309
Trade payables 1,490 1,100
 129 67
Deferred income 34 22
Tax payables  486 336
Other liabilities  1,252 1,101
 5,673 4,161
 12,561 9,266
 24,767 20,510
Stock
buyback
Compre-
hensive
income
Equity
Jan. 1,
2021
Dividend Other Equity
Dec. 31,
2021
11,244
3,707
(1,466)
221 12,206
(1,500)
Payout ratio and dividend per share
%
2019
2018
2017
2020 2021
42.3
44.6
4.50
5.00
5.25
5.25
46.8
51.9
5.50
48.5
Payout ratio Dividend per share
Shareholder return
DKK million
2019
2018
2017
2020 2021
3,317
3,439
3,483
2,966
3,024
Stock buyback program Dividend
* Dividend for 2021 is
the proposed dividend.
Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
Equity and shareholder return
64
Equity and shareholder return
Equity

million, up from DKK 11,244 million at December


in 2021.
Equity ratio



Return on equity

points from 24.9% in 2020. The increase was a





Dividend
The Board of Directors proposes that the Annual
Shareholders’ Meeting approve a dividend of DKK

corresponding to an increase of 5% compared
with 2020. This will result in an expected total
dividend payment of approximately DKK 1,524
million, corresponding to a payout ratio of 48.5%.


shares at an aggregate transaction value of DKK

initiated on February 8, 2021, and completed on


and to meet obligations arising from employee



Equity and shareholder return
Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
Equity and shareholder return
65
Consolidated statement of equity
Attributable to shareholders of Novozymes A/S
DKK million 
Currency translation
adjustments

hedges
Retained
earnings Total
Non-controlling
interests
Total equity
 570 (727) 127 11,263 11,233 11 11,244
 3,146 3,146 (1) 3,145
Other comprehensive income for the year 719 (159) 560 2 562
Total comprehensive income for the year 719 (159) 3,146 3,706 1 3,707
 (1,500) (1,500) (1,500)
 309 309 309
 (6) 6 - -
Dividend (1,465) (1,465) (1) (1,466)
 75 75 75
 (717) (717) 368 (349)
Tax related to equity items 186 186 186
Changes in equity (6) 719 (159) 40 594 368 962
 564 (8) (32) 11,303 11,827 379 12,206
 582 57 19 10,810 11,468 12 11,480
 2,825 2,825 1 2,826
Other comprehensive income for the year (784) 108 (676) (1) (677)
Total comprehensive income for the year (784) 108 2,825 2,149 - 2,149
 (1,500) (1,500) (1,500)
 508 508 508
 (12) 12 - -
Dividend (1,482) (1,482) (1) (1,483)
 53 53 53
Tax related to equity items 37 37 37
Changes in equity (12) (784) 108 453 (235) (1) (236)
 570 (727) 127 11,263 11,233 11 11,244
The proposed dividend of approximately DKK million for 2021 is included in Retained earnings. 1,524
2
-eqv.)
2019
2018
2017
2020 2021
447
472
365
268
288
Scope 2 Scope 3
Scope 1
Energy by source 2021 (2020)
Electricity
conventional
18% (18%)
Electricity
renewable
38% (39%)
Steam
22% (22%)
Fuels
conventional
16% (15%)
Heat
conventional
2% (2%)
Heat
renewable
3% (3%)
Fuel and heat
renewable
1% (1 %)
Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
Environmental performance
66
Environmental performance


led to increases in production, and in the
consumption of energy and water compared to
2020.
Novozymes strives to decouple environmental

targets and metrics that measure and drive our
sustainability performance.
Climate change

2
emissions were 288,000
tons in 2021, a 7% increase from 268,000 tons in
2020.
Energy


2020.


Renewable sources accounted for 42% of the

in 2020. Of the total electricity the renewable
part accounted for 68% in 2021.
Water
Novozymes’ water consumption increased by 7%,
from 7,998,000 m in
2021.
The total volume of wastewater generated in
2021 increased by 2%.
Waste




across our global production sites increased to
62%, from 48% in 2020. The improved recycling
rate was the result of a large number of

waste initiative launched in 2020.
Environmental compliance
The number of breaches of regulatory limits
recorded worldwide in the Novozymes

2020. Most of these breaches were related to
wastewater treatment. Novozymes is addressing

neighbor complaints in 2021, compared with ten
in 2020, mostly related to minor temporary odor
and noise issues.
Environmental performance
Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
Environmental performance
67
Consolidated environmental data
Note  

    

    
    

  
 
  
 

    
    
    
    

    
   

  n.a. 
  n.a. 
2019
2018
2017
2020 2021
6,245
6,427
6,125
6,185
6,527
No. of employees
Frequency of injuries
(per million working hours)
2019
2018
2017
2020 2021
1.6
2.4
0.9
1.3
1.5
Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
Social and governance performance
68
Social and governance performance


employees was 6,527, compared with 6,185 in
2020. The increase was partly related to the
acquisitions of Microbiome Labs and Synergia
Life Sciences.

compared to 1.9% in 2020.

The frequency of occupational injuries increased


2020.

families, which comprise the number of
inventions that have active patent applications or
active patents. The number of active patent

high number of expired and abandoned patents.
Business ethics

to business integrity. During the year, 99% of
Novozymes’ employees in scope completed
business integrity training, on par with 2020.
As in 2020, there were no breaches of
competition law in 2021.
Customer engagement
Novozymes conducts an annual customer

Promoter Score (NPS), which is assessed on a


relationships with our customers.
Business Ethics

Novozymes´ employees
in scope completed

training.
Novozymes promotes equal opportunities and


(directors and higher) were women compared to

Innovation
Novozymes is committed to delivering
bioinnovation and launched 14 new products in
2021.
Social and governance performance
Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
Social and governance performance
69
Consolidated social and governance data
Note  

    
    
    

    

 No.
    
    
    
Innovation
New products    
Active patent families    
Business ethics
    
Breaches of competition law  
Customer engagement
    

  n.a. 
Responsible sourcing  n.a. 

Accounts and performance
Governance
Our business
The big picture
Notes
70Novozymes A/S
Notes
1
Basis of reporting

1.2 Basis of reporting
2

2.1 Segment
2.2 Revenue

2.4 Research and development costs
2.5 Other operating income, net
2.6 Tax
2.7 Earnings per share
3
Invested capital

test of goodwill





4


4.2 Trade receivables and
contract assets

4.4 Other liabilities
4.5 Assets held for sale
5


management
5.2 Financial income and
Financial costs

5.4 Derivatives – hedge accounting

5.6 Financial assets and liabilities by
category
6

6.1 Management remuneration


6.4 Related party transactions

6.6 Fees to statutory auditors


6.9 Group companies
7
Environmental data

7.2 Energy

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


8.4 Business ethics


8.7 Responsible sourcing
Notes
Accounts and performance
Governance
Our business
The big picture
Notes
71Novozymes A/S
1
Basis of
reporting
1.1 
1.2 Basis of reporting
Notes 72Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

Basis of reporting


impacted Accounts and performance in 2021.





for alternative and healthier sources of protein.
The capital investment of roughly DKK 2 billion will span over the


Reference is made to Note 3.2.

a broad range of proprietary microbiome solutions securing an




Both acquisitions are related to the BioHealth business, which
also comprises the 2016 acquisition of Organobalance GmbH, the
2020 acquisition of PrecisionBiotics Group along with research and
development activities based on Novozymes’ existing technology.




world.
Reference is made to Notes 3.5, 3.6 and 6.5 for a description of

statements.
Strengthening and
accelerating
our

Investing
in Advanced
Protein Solutions
Basis of reporting
Notes 73Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
1.2 Basis of reporting
This section provides an overview of Novozymes’
principal accounting policies, the critical
accounting estimates and judgments applied, a


interpretations.
The symbols
I/S
,
B/S
and
ESG
show which
amounts in the notes can be found in the income
statement, the balance sheet, and in
environmental data and social and governance
data respectively.
The accounting policies described below apply to

Accounting policies and critical accounting
estimates and judgments are described in the
notes to which they relate to enhance
understanding. The descriptions of accounting
policies in the notes form part of the overall
description of accounting policies.
ACCOUNTING POLICIES
Consolidation



Novozymes A/S, prepared in accordance with
Group accounting policies. The consolidated

Financial statements of foreign subsidiaries are
translated into DKK at the exchange rates
prevailing at the reporting date for assets and
liabilities, and at average exchange rates for
income statement items.

from translation using the exchange rate
prevailing at the reporting date, are recognized in
Other comprehensive income:
• Translation of foreign subsidiaries’ net assets
at the beginning of the year
• Translation of foreign subsidiaries’ income
statements from average exchange rates
iXBRL reporting

the European Single Electronic Format (‘ESEF’)
and The Novozymes Report is therefore prepared
in the XHTML format that can be displayed in a
standard browser. The primary statements in the

using inline eXtensible Business Reporting
Language (iXBRL). The iXBRL tags comply with the
ESEF taxonomy, which is included in the ESEF




items of a uniform nature and subsequently
eliminating intercompany transactions, internal





disclosed separately.

governance data follows the same principles as

Translation of foreign currencies



exchange rates at the transaction date and the
reporting date are recognized as Financial income
or Financial costs.
Foreign currency transactions are translated into

using the exchange rates prevailing at the
transaction date. Monetary items denominated in
foreign currencies are translated into the
functional currency at the exchange rates
prevailing at the reporting date.
taxonomy has been created. Extensions are
anchored to elements in the ESEF taxonomy,
except for extensions which are subtotals.
The Novozymes Report submitted to the Danish
Financial Supervisory Authority consists of the
XHTML document together with certain technical








from similar measures in other companies, and
may thus not be comparable.

The Novozymes Report are:
• Organic sales growth
• Operating costs
 
 
 

provided in the Glossary.
Basis of reporting
Notes 74Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
1.2 Basis of reporting (continued)
Basis of reporting
Critical accounting estimates and judgments

statements and the environmental, social and

estimates and assumptions that can have a

and reported amounts of assets, liabilities,
income, expenses and related disclosures. The
estimates and underlying assumptions are based
DKK million Note  
  
Exchange gains/(losses)  
  
Share of loss in associates  
  
DKK million Note  
   
Property, plant and equipment   
  
  
  
Provisions   
   
Derivatives  
Tax, net  
Invested capital  
Average invested capital  
ROIC  




percentage of average invested capital.
on historical experience and various other factors.

The estimates and underlying assumptions are

estimates may be necessary if there are changes in
the circumstances on which the estimate was
based, or if more detailed information becomes
available. Such changes are recognized in the
period in which the estimate in question is revised.



Critical accounting estimates



Potential impact from

  
  



 

Fair value measurement Estimate




 
4.2 Trade receivables and

Allowances for doubtful trade
 Estimate
The application of the Group’s accounting


the amounts recognized in the consolidated

required in particular when assessing the
substance of transactions that have a
complicated structure or legal form.
The critical accounting estimates and judgments


ROIC
Notes 75Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
1.2 Basis of reporting (continued)
Basis of reporting

Group have been prepared in accordance with

as adopted by the EU and further requirements in



prepared on a going concern basis and under the
historical cost convention, with the exception of
derivatives, securities, contingent consideration
and share purchase liability, which are measured
at fair value. The accounting policies are
unchanged from last year.
The consolidated environmental, social and
governance data have been prepared in accordance
with principles that adhere to internationally
recognized voluntary reporting standards and


policy initiative for businesses that are committed
to aligning their operations and strategies with ten
universally accepted principles in the areas of
human rights, labor, the environment and



disclosures.
Our reporting and materiality assessments were

The principles are unchanged from last year.

The Novozymes Report is based on the concept of
materiality, to ensure that the content is material
and relevant.

aggregated with other items of a similar nature in
the statements or in the notes. Novozymes

unless the information is considered immaterial to

The Novozymes Report.
As for environmental, social and governance (ESG)
matters, we disclose information on issues that

disclosures in the notes include information on
our management approach, targets, initiatives,
and related progress.
Novozymes’ materiality assessment is a
systematic and rigorous process that has been

allows us both to evaluate whether Novozymes
has an impact on environment and society and to
Basis of reporting



engagement with relevant departments including

Quality, Sustainability and our commercial
divisions. This process results in a materiality
matrix of economic and ESG issues. The matrix


and it is used to guide our strategy and reporting.
As a result of the materiality assessment
performed in 2021, two new issues were added:

Further information on diversity and inclusion are

this report (see Note 8.2).


to an increased focus on how companies manage

practices. As a responsible corporate citizen,
Novozymes continuously strive to strengthen our
governance and management of these material
issues.

highlight some of the material issues, for which,

more information, refer to www.novozymes.com/

Limited reporting scope
The environmental data cover those activities that

Sites with activities considered not to have a


sites with limited blending and storage of products.

97% of the total Novozymes quantity of the
measured environmental parameter is included in
the reported numbers.

governance data, companies acquired in 2021 are
only included in number of employees, as
appropriate procedures for recording data on other
measures have not yet been established.
Notes 76Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
1.2 Basis of reporting (continued)

interpretations not yet adopted

standards and interpretations that have not yet


statements for 2021. Novozymes expects to adopt
the accounting standards and interpretations as
they become mandatory. None of the new or
amended standards or interpretations are expected



Novozymes has adopted the following new or
amended standards and interpretations from

 


related rent concessions as if they where not

 



rates to alternative interest rates without giving
rise to accounting impacts that would not
provide useful information to users of the

The adoption of the new and amended standards

on recognition, measurement or disclosures in the


future periods.
Basis of reporting
Material issues for Novozymes
Issue category Corporate focus area
Innovation Compliance
Partnerships
& customer
engagement
Profitable
growth
Solid capital
structure
Supply chain
security
(new)
Climate change
& Energy
Water Waste
Labor practices
and human rights
Diversity
& inclusion
(new)
Employee
safety &
wellbeing
Coperate
governance
Business
ethics
Target/Flagship initiatives
All
Economic
Environmental
Governance
Social
Accounts and performance
Governance
Our business
The big picture
Notes
77Novozymes A/S
2
Net operating

2.1 Segment
2.2 Revenue
2.3 Employees
2.4 Research and development costs
2.5 Other operating income, net
2.6 Tax
2.7 Earnings per share
Gross margin up from

EBIT margin up from

Organic sales




(2020)
Denmark
207 (175)
Rest of Europe,
Middle East & Africa
5,474 (5,361)
North America
4,683 (4,441)
Latin America
1,578 (1,280)
Asia Pacific
3,009 (2,755)
DKK million
14,951
(14,012)
Intangible assets and property,
plant and equipment 2021
(2020)
Denmark
6,647 (5,790)
Rest of Europe,
Middle East & Africa
828 (833)
North America
4,019 (3,498)
Latin America
108 (101)
Asia Pacific
3,607 (1,944)
DKK million
15,209
(12,166)
Denmark
431 (452)
Rest of Europe,
Middle East & Africa
-32 (6)
North America
517 (312)
Latin America
22 (12)
Asia Pacific
178 (154)
DKK million
(2020)
1,116
(936)
Notes 78Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
2.1 Segment

  
  
U.S.  
  
  


Segment reporting

reporting on revenue and expenses to the
Executive Leadership Team and the Board of

report on the global functional responsibility
setup at Novozymes. This setup consolidates
functions by type, and Management reviews the
results of the Group as a whole to assess
performance. Thus, there is only one operating
segment.

The Group operates in four geographical regions:
Europe, Middle East & Africa, North America,

perspective, U.S. is the largest single country,
contributing ~29% of the Group’s revenue (2020:
~29%).
The geographical distribution of revenue is based
on the country in which the goods are delivered.
For a number of customers, central deliveries are


distribution of revenue may therefore vary from
year to year if delivery destinations for these
customers change.
Most of the Group’s intangible assets and
property, plant and equipment are located in



Net operating profit after tax
DKK 7% (8%)
EUR 36% (37%)
USD 35% (35%)
CNY 9% (8%)
Other 13% (12%)
(2020) Sales growth 2021
M&A
impact
Organic
growth
2020
Exchange
rates
2021
DKK million
(1)%
2%
6%
14,951
14,012
Notes 79Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
2.2 Revenue
DKK million  
Consumer Biosolutions
  
Food, Beverages & Human Health  

Bioenergy  
Grain & Tech Processing  
Agriculture & Animal Health  
Revenue
I/S
 
  
  
Revenue
I/S
 
  


Most of Novozymes’ revenue is derived from the
sale of goods to customers, with revenue being
recognized when the goods are delivered.
Critical accounting estimates and judgments

to DKK 129 million (2020: DKK 74 million), of

in 2021 (2020: DKK 5 million).
Novozymes has entered into various sales
agreements, including agreements where
Novozymes manufactures and sells products


sold to end customers is shared between the
partner and Novozymes based on

Recognition of revenue requires judgment
and estimates by Management in connection
with determining the appropriate revenue
recognition as well as the timing of
recognition.
Net operating profit after tax
Notes 80Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
2.2 Revenue (continued)
Novozymes produces a wide range of industrial
enzymes, microorganisms and probiotics.
Revenue includes the sale of goods and related
services and royalties, and is recognized at an

Novozymes expects to be entitled. Revenue from
the straightforward sale of goods to customers is
recognized when control of the goods is
transferred to the customer, i.e. when goods are

revenue to the extent that they are not subject to

The performance obligations in the contracts are
to deliver enzymes, microorganisms and
probiotics to customers, and each batch delivered
is considered a separate performance obligation,
as each batch is distinct.

Enzymes, microorganisms and probiotics are
sometimes sold at a rebate. A rebate agreement
can be set up in various ways, but common to all
agreements is that revenue is recognized based

estimated rebate. The rebates are estimated
based on experience, as well as information

advance. The estimated rebates are reassessed at
the end of each reporting period.
Returns

of return. No revenue is recognized for the goods
expected to be returned, as a refund liability is
recognized. Estimates of the expected level of
returns are based on analysis of historical returns

products. These estimates are updated at the end
of each reporting period. As the goods returned
are usually scrapped, no inventory asset is
recognized.

Novozymes has entered into partnerships where
Novozymes manufactures and sells products to a


customers is shared between the partner and

sharing mechanisms.
Accounting policies
Revenue from these arrangements consists of
sales of products to the partner and the shared

are delivered to the other contracting party. This

on insights, experience and other input factors.

asset or contract liability until an invoice is

Commission
Novozymes has entered into commission

third parties in return for a commission on
realized sales. Revenue from such agreements is
recognized when the goods are delivered, as the
nature of the performance obligation is to

Other
Revenue collected on behalf of third parties is
not recognized as revenue.
Novozymes’ obligation to provide a refund for
products that are not of the agreed quality or

standard warranty terms is recognized as contract
liabilities.
A trade receivable is recognized when the
customer obtains control of the goods and an
invoice is issued, as this is the point in time when
the consideration becomes unconditional and
only the passage of time is required before
payment is due. Typical payment terms are
around 60 days.

deferred revenue and liabilities for refund goods.
The contract liabilities are recognized as revenue
as the performance obligations under the

Net operating profit after tax
Notes 81Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
2.3 Employees
DKK million  
Wages and salaries  
  
Other social security costs  
Other employee costs  
  
Employee costs  
Recognized in the income statement under the following items:
  
Sales and distribution costs  
Research and development costs  
Administrative costs  
 
  
Employee costs  
Employee costs in 2021 included severance costs
related to the consolidation of research and
development activities of DKK 41 million.
Employee costs in 2020 included severance costs
of DKK 87 million related to organizational
changes, of which DKK 65 million was related to
changes to the Executive Leadership Team.
Net operating profit after tax
Denmark
Rest of Europe,
Middle East
& Africa
Number of employees end of year & employee costs 2021
(2020)
Employees: 214 (203)
Cost: 157 (149) DKK million
Employees:
2,787 (2,646)
Cost:
2,276 (2,058) DKK million
North America
Employees: 1,238 (1,185)
Cost: 1,054 (964) DKK million
Latin America
Employees: 321 (318)
Cost: 93 (88) DKK million
Asia Pacific
Employees: 1,967 (1,833)
Cost: 533 (472) DKK million
Number of employees
6,527 (6,185)
Total costs
4,113 (3,731)
Notes 82Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
2.3 Employees (continued)
No.  
Average number of employees in the Group 6,240 6,099
  

number of employees  
  
  

ESG
 
Senior management  
Management  
Professional  
Administrative  
  
Process operators  

ESG
 
The number of employees is derived from
contractual obligations, but does not include
employees on unpaid leave, temporary
replacements, student interns, agency employees,




The average number of employees is calculated
as the average of the number of permanent
employees at the end of each month.


presidents, vice presidents and directors.
Management comprises middle managers and
specialists. Professional comprises employees

Accounting policies
leaders. Process operators comprises operators

Net operating profit after tax
(2020)
Women
39% (38%)
Men
61% (62%)
Senior management
gender distribution 2021
(2020)
Women
34% (33%)
Men
66% (67%)
Notes 83Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
2.4 Research and
development costs
DKK million  
  
Employee costs   
Amortization and impairment losses, intangible assets   
Depreciation and impairment losses, property, plant and
equipment   
Total research and development costs  
As a percentage of revenue  

development of new products, none of the
development projects met the critieria for
capitalization in 2021 and 2020.

(2020: 12 new products). New products comprise
products with new or improved characteristics.


comprise the number of inventions for which
Novozymes had one or more active patent

Research and development costs primarily
comprise employee costs, internal and external
costs related to the development of new products
and to the ongoing optimization of production
processes for existing products, and amortization,
depreciation and impairment losses related to
intangible assets and property, plant and
equipment used in research and development
activities.
Research costs are expensed as incurred, while
development costs are expensed as incurred
unless the criteria for capitalization are deemed
to have been met.

agreements is recognized in Other operating
income.
Accounting policies
Net operating profit after tax

DKK million  

collaborations 
Other secondary income, net 
  
Net gain from sale of buildings held for sale 
  

by DKK 60 million due to a realized gain from the
sale of an administration building and by DKK 62
million from the contingent consideration relating


where entitlement has been obtained due to
completion of patent registrations.
Other operating income comprises income that is

research and collaboration agreements,
government grants, sale of licenses, patents, etc.,
and other income of a secondary nature in
Accounting policies

by DKK 42 million from the contingent
consideration relating to the divestment of a

relation to the main activities of the Group. This

respect of damages, outlicensing, etc., and gains
and losses on divestments.
I/S I/S
Notes 84Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
Tax in the income statement
DKK million  
  
  
  
  
Tax in the income statement
I/S
 

  
  
  
Other adjustments  
  
2.6 Tax


companies and distributors, while production is
located in a few countries. This leads to
transactions between group companies.

internal transfer prices for these transactions. This

because the transactions are subject to judgment


of bilateral advance pricing agreements (APAs).
Bilateral APAs
As stated in our tax policy, Novozymes proactively
engages in bilateral APAs negotiated at competent
authority level to increase predictability and to

intercompany transaction value within the
Novozymes Group is covered by bilateral APAs.
An APA is an agreement between a taxpayer and
a tax authority determining the transfer pricing
methodology for pricing the taxpayer’s
international transactions for future years.
The methodology is applied for a certain period

conditions (called critical assumptions). An APA
can be unilateral or bilateral. Novozymes only
enters into bilateral APAs, meaning that they are
negotiated between the competent tax
authorities of the two countries involved in the
transaction. An APA provides assurance with
respect to the tax outcome of our international
transactions, by determining in advance arm’s
length pricing and the pricing methodology to be
applied to the international transactions.
Novozymes has entered into bilateral APAs with
the tax authorities in the countries where internal




Joint taxation
Novozymes A/S and its Danish subsidiaries are
jointly taxed with the Danish companies of the

covers withholding taxes in the form of dividend
tax, royalty tax and interest tax. The Danish
companies are jointly and individually liable for
the joint taxation liability. Any subsequent
adjustments to income taxes and withholding
taxes may increase the liability. Tax for the
individual companies is allocated in full on the
basis of the expected taxable income.
Tax in the income statement
Transfer of intellectual property from Switzerland

tax rate of 2.7% in 2021 (2020: 2.9%). This is

Net operating profit after tax
Critical accounting estimates and judgments

countries, the calculation of the Group’s total
tax charge in the income statement inherently

disputes with authorities in various countries
may occur, and Management’s assessment is
applied to assess the possible outcome of
such disputes.
Payments in respect of tax liabilities for an
accounting period result from payments on

items. As a result, there may be substantial

recognized in the consolidated income
statement and actual tax payments.
Notes 85Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
2.6 Tax (continued)

DKK million  
  
  
Tax related to business acquisitions 
Tax related to the income statement  
Tax on equity items  
Tax paid for the current year, net  
  
Tax receivables
B/S
 
Tax payables
B/S
 
  
Of which due within 12 months  
  
  

  
  
Total income taxes paid  
DKK million  
  
 
  
Tax related to the income statement  
Tax on equity items  
  
Deferred tax assets
B/S
 
Deferred tax liabilities
B/S
 
  
The tax value of the unrecognized share of tax

expire amounted to DKK 22 million (2020: DKK
25 million).
Net operating profit after tax
Deferred tax
Deferred tax assets 
DKK million    

property, plant and
equipment    
    

forwards  
  
Other    
   
    
Deferred tax at

B/S
   
Notes 86Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
2.7 Earnings per share
DKK million  
  
 
  

Weighted average number of shares in circulation  

  
  
Earnings per share, DKK  
Earnings per share, diluted, DKK  

attributable to shareholders of Novozymes A/S
divided by the average number of shares in
circulation.
Diluted earnings per share is calculated as net

A/S divided by the average number of shares in

options “in the money”.
Accounting policies
Net operating profit after tax

liability, change in deferred tax for the year and
possible adjustments relating to prior years, is
recognized in the income statement, unless it
relates to items recognized either in Other
comprehensive income or directly in equity.
Uncertain tax positions are assessed individually
and recognized if it is probable that an amount
will be paid or received. Deferred tax is measured
using the balance sheet liability method and

carrying amount and the tax base of assets and
liabilities. No deferred tax is recognized for
goodwill, unless amortization of goodwill for tax
purposes is allowed. The tax value of tax loss

deferred tax to the extent that the tax losses can
be expected to be utilized in the future.
Deferred tax is measured according to current tax
rules and at the tax rate expected to be in force

in deferred tax due to tax rate changes are
recognized in the income statement, unless they
relate to items recognized either in Other
comprehensive income or directly in equity.
Accounting policies
2.6 Tax (continued)
Accounts and performance
Governance
Our business
The big picture
Notes
87Novozymes A/S
3
Invested
capital
3.1 
3.2 Property, plant and equipment
3.3 Leases
3.4 Provisions
3.5 Business acquisitions
3.6 
Increase in average
invested capital of
DKK million
Net investments excl.
acquisitions up from
DKK 936 million in
2020 to DKK million
ROIC up from




Notes 88Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

DKK million 


licenses and

Completed IT
development
projects
IT development
projects in
progress Total
     
   
Additions from business acquisitions   
Additions during the year    
Disposals during the year  
Transfers to/(from) other items
 
     
Amortization and impairment losses at
   
   
Amortization during the year   



Amortization and impairment losses at

 


B/S

  


Critical accounting estimates
and judgments

impairment of the Group’s intangible
assets. This requires judgment in relation


assumptions in the Group’s impairment
model.

value in use is estimated and compared
with the carrying amount. The calculation of
value in use is based on the discounted


parameters are the expected revenue
streams and the rate used to discount the



of intangible assets through business acquisitions
(2020: DKK 797 million), of which DKK 1,709

(technology), customer relationships and brands

Impairment



loss has been recognized in Research and
development costs.

patents was recognized and included in Research
and development cost. The impaired asset was
part of a project that was terminated, and the


An impairment test of goodwill of Novozymes'

entire Group, as cost bases of the




are used to determine whether impairment of
goodwill exists (2020: no impairment).
Recognition of amortization and
impairment losses by function 2021
(2020)
DKK million
Cost of goods sold
92 (82)
Sales and distribution
50 (14)
Research and
development
184 (154)
Administration
39 (34)
365
(284)
Notes 89Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
(continued)

DKK million 


licenses and

Completed IT
development
projects
IT development
projects in
progress Total
     
    
Additions from business acquisitions   
Additions during the year    
Disposals during the year   
Transfers to/(from) other items  
     
Amortization and impairment losses at
   
   
Amortization during the year   
  
Disposals during the year   
Amortization and impairment losses at
   

B/S
    
Notes 90Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
(continued)

measured at cost less accumulated amortization

development projects in progress are not subject
to amortization.


capitalized if incurred with a view to developing
new and improved systems.


assets, as follows:
 

development assets are amortized over a

 

are amortized over their useful lives. The

normally identical to the patent period.
Licenses are amortized over the agreement



years.
Expected useful lives are reassessed regularly.
The Group regularly reviews the carrying amounts

whether there is an indication of an impairment
loss. An impairment loss is recognized to the
extent that the asset’s carrying amount exceeds

losses are reversed only to the extent of changes
in the assumptions and estimates underlying the
impairment calculation.
Goodwill is tested for impairment annually or
whenever there is an indication that it may be
impaired.

Accounting policies
Recognition of depreciation and
impairment losses by function 2021
(2020)
DKK million
Cost of goods sold
762 (712)
Sales and distribution
32 (30)
Research and
development
163 (161)
Administration
94 (79)
1,051
(982)
Notes 91Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

DKK million
Land and

Plant and
machinery
Other
equipment
Assets under
construction Total
     
     
Additions from business acquisitions   
Additions during the year     
Disposals during the year    
Transfers to/(from) other items    
     
Depreciation and impairment losses at
    
    
Depreciation for the year    
  
Disposals during the year    
Transfers to/(from) other items 
Depreciation and impairment losses at
    

B/S
    
Capitalized interest and pledges

was capitalized under Additions during the year



Land and buildings with a carrying amount of

pledged as security to credit institutions in
respect of mortgage loans expiring in 2029 and

Impairment


goods sold (2020: no impairment losses).



property, plant and equipment amount to DKK

Novozymes is committed to establishing the new

The capital investment of roughly DKK 2 billion

the second half of 2021 and with expected

investment activities are planned for 2022 and

incurred in 2021.
The contractual obligations to third parties
relating to property, plant and equipment related
to the above production line amounted to DKK

Notes 92Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
(continued)
Property, plant and equipment is measured at
cost less accumulated depreciation and
impairment losses. Borrowing costs in respect of
construction of major assets are capitalized.

over the expected useful lives of the assets, as
follows:
 
 
 
The residual values and useful lives of the assets
are reviewed on an annual basis and adjusted if
necessary at each reporting date.
The Group regularly reviews the carrying amounts
of its property, plant and equipment to determine
whether there is any indication of impairment in

recoverable amount of the asset is estimated in
order to determine the extent of any impairment

estimated to be lower than its carrying amount,
the carrying amount is reduced to the recoverable

the extent of changes in the assumptions and
estimates underlying the impairment calculation.

Accounting policies
DKK million
Land and

Plant and
machinery
Other
equipment
Assets under
construction Total
     
     
Additions from business acquisitions  
Additions during the year     
Disposals during the year    
Transfers to/(from) other items    
     
Depreciation and impairment losses at
    
    
Depreciation for the year    
Disposals during the year    
Transfers to/(from) other items  
Depreciation and impairment losses at
    

B/S
    
Notes 93Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
3.3 Leases
DKK million  
Land and buildings  
Plant and machinery  
Other equipment  
Carrying amount of lease assets  
DKK million  

Less than 1 year  
Between 1 and 5 years  
More than 5 years  
  
DKK million  
Amounts recognized in the income statement
  
Depreciation of lease assets per asset class
Land and buildings  
Plant and machinery
Other equipment  
Depreciation of lease assets  

  
Additions to the lease assets during 2021 amounted to DKK 102 million (2020: DKK 58 million).
Lease assets


contract contains a lease, a lease asset is
recognized. Lease assets are initially measured at
the present value of future lease payments, plus
the cost of obligations to refurbish the asset.

payments depending on an index or a rate and
the exercise price of purchase options that are
reasonably certain to be excercised.

line method over the shorter of the expected
lease term and the useful life of the underlying
asset. Lease assets are tested for impairment
whenever there is an indication that the assets
may be impaired.
Lease assets are depreciated as follows:
 
 
 
 

recognized as expenses in the income statement

Novozymes’ portfolio of leases covers leases of
land, buildings and other equipment such as cars
and transportation containers.

Lease liabilities are initially recognized at the
present value of future lease payments including
payments from extension or purchase options that
are considered reasonably certain to be exercised.
The lease liability is measured using the implicit
borrowing rate in the contracts or, where this is
not available, the marginal borrowing rate in the
countries in which Novozymes operates.
Novozymes applies a single discount rate to
portfolios of leases in the countries in which
Novozymes operates based on contract currency
and loan periods.

remeasured. For building leases, lease terms are

strategic importance into consideration.

building leases and building leases with extension
options. Lease terms of such agreements are
estimated based on the strategic importance of
the buildings and the estimated time frame
necessary to vacate the premises. The estimated
lease term is reassessed at each reporting date.
The estimated lease terms for such contracts do
not exceed 12 years.

Accounting policies
Notes 94Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
3.4 Provisions
 
DKK million
Dismantling
-
ration
Legal and
other
 Total

and resto-
ration
Legal and
other
 Total
      
   
Additions from business acquisitions  
Additions during the year  
Reversals during the year      
Utilization during the year    
      
Recognized in the balance sheet as follows:

B/S
     

B/S
    
      
Dismantling and restoration
Dismantling and restoration relates to estimated
future costs of environmental restoration.
Novozymes aims for its production sites not to
have a negative environmental impact. These
liabilities relate to established circumstances, and
the costs are expected to be incurred either when
concrete measures are implemented or when a
site is vacated. The expected costs and timing are
inherently uncertain.

Novozymes is involved in a number of ongoing
legal disputes, and provisions are made for the
estimated costs based on a current evaluation of


Management’s opinion, the outcomes of these
cases are not expected to give rise to any




obligations.
Additions from business acquisitions of DKK 50
million is related to the acquisition of Synergia
Life Sciences.


related royalty was recognized in Other operating
income. The remaining consideration was
reversed because certain patent registrations
were not obtained in 2021.

only a minor amount, as most of Novozymes’

covering approximately 99% of employees. These
obligations are mainly expected to be incurred
over a relatively long period of time.
Provisions are recognized where a legal or
constructive obligation has been incurred as a
result of past events and it is probable that it will

Provisions are measured at the present value of
the expected expenditure required to settle the
obligation.

Accounting policies
Notes 95Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
3.5 Business acquisitions

Acquisitions in 2021
DKK million


Synergia Life
Sciences
Assumed fair values of acquired assets and liabilities are
as follows:
  
Property, plant and equipment  
  
Trade and other receivables  
  
Deferred tax liabilities, net 

Financial and other liabilities  
 
Acquired net assets  
Purchase price:
  
 
Deferred consideration  
Total purchase price  
Goodwill  

  
Less cash and cash equivalents in acquired business  
  
1. There are only minor changes to the opening balance as presented in The Novozymes Report 2020.
2.


Excess Earnings Method (MEEM)

method

The purchase agreement includes a contingent
consideration of up to DKK 825 million at the
acquisition date. The consideration is contingent
on the achievement of sales targets for 2022 and
is recognized at the anticipated fair value of DKK


probable sales estimates in 2022 discounted at a
rate of 8%.
The contribution from Microbiome Labs would



Novozymes Report 2020.
The transaction costs incurred in 2020 amounted
to DKK 29 million and are included in Sales and
distribution costs.
Critical accounting estimates and judgments
Fair value measurement of the acquired
assets and liabilities as well as contingent

estimates and use assumptions, as

The determined fair values are associated
with uncertainty and may be subject to
subsequent adjustments.


shares in Microbiome Labs. Microbiome Labs

probiotic and microbiome solutions targeting
gastrointestinal, immune, metabolic and cognitive

the company’s own supplement brands and in
private label products. The branded products are
sold exclusively through the company’s access to

predominately consisting of medical doctors,
nutritionists and naturopaths.
By acquiring Microbiome Labs, Novozymes added
a broad range of proprietary microbiome
solutions to its human health activities. The
acquisition also created an attractive entry point



million is attributable to expected synergies with
Novozymes’ existing business operations and
technologies within probiotics and enzymes for
human health. The goodwill is tax deductible.
The following valuation techniques have been

assets acquired:
Notes 96Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
3.5 Business acquisitions (continued)


assets acquired and the liabilities and contingent
liabilities assumed are recognized at their fair
values at the acquisition date. The consideration
transferred includes the fair value at the
acquisition date of any contingent consideration
arrangement.

is recognized either at fair value or at the



acquisition basis.
Goodwill may subsequently be adjusted for
changes in the fair value of the consideration
transferred and/or changes in the fair value of the


changes relate to facts and circumstances present
at the acquisition date. Acquired companies are
consolidated from the date of acquisition.

Accounting policies
Synergia Life Sciences
On December 10, 2021, Novozymes acquired
60% of the shares in Synergia Life Sciences.
Synergia Life Sciences is a leading player within

Sciences has a global footprint and adds strong
developing and manufacturing capabilities in


the producer and supplier to Microbiome Labs,
which was acquired by Novozymes early in 2021.

complementary enabler to support growth in
Novozymes’ BioHealth platform. The acquisition

that strengthens Novozymes’ human health business

Goodwill of DKK 507 million is attributable to
expected synergies with Novozymes’ existing
business operations and technologies within
spore probiotics for human health and is highly
synergistic to the previous acquisition of
Microbiome Labs within the human health
business. The goodwill is not tax deductible.
The fair value and allocation of acquired assets,


valuations. The following valuation techniques
have been applied in the fair value assessment of


method

Excess Earnings Method (MEEM)

The remaining 40% of the shares in Synergia Life


proportionate share of the acquired net

million. The remaining 40% is to be acquired in
2025. Reference is made to Note 6.5 to the


The purchase price includes a deferred
consideration of DKK 77 million, which is
expected to be paid in 2022.

Life Sciences to the consolidated income
statement are immaterial for the reporting
period. On a pro forma basis, if the acquisition

Synergia Life Sciences would have contributed



The transaction costs incurred in 2021 amounted
to DKK 46 million and are included in Sales and
distribution costs.
Acquisition in 2020

in PrecisionBiotics Group at a purchase price of
DKK 798 million. PrecisionBiotics Group holds a
leading position within probiotics for human gut
health and is well positioned with several


expertise within clinical development, upscaling
and commercialization and is well situated in

within human gut health.
The purchase price allocation led to recognition
of goodwill of DKK 158 million, intangible assets


expected synergies with Novozymes’ existing
business operations and technologies within
probiotics and enzymes for human health. The
goodwill is not tax deductible.
The purchase agreement includes a contingent
consideration of up to DKK 298 million at the
acquisition date. The consideration is contingent

and is recognized at the anticipated fair value of
DKK 146 million at the acquisition date. Fair





PrecisionBiotics Group have been reassessed in
2021, which led to an increase of the fair value at
the acquisition date of DKK 44 million in
contingent consideration and goodwill.
Notes 97Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
3.6 Contingent consideration

DKK million  
 
Additions from business acquisitions  
Foreign exchange adjustments 
 
Fair value adjustment of contingent consideration 
  
Recognized in the balance sheet as follows:
  
  

Financial costs (2020: DKK 0 million). The
contingent liability related to PrecisionBiotics
Group is denominated in EUR.

The purchase agreement of Microbiome Labs
includes a contingent consideration of up to DKK
886 million.
The consideration is contingent on the
achievement of sales targets for 2022 and is
recognized at the anticipated fair value of DKK


from the most probable sales in 2022 discounted
at a rate of 8%.
PrecisionBiotics Group
The purchase agreement for PrecisionBiotics
Group includes a contingent consideration of up
to DKK 298 million.
The consideration is contingent on the


of DKK 211 million (2020: DKK 146 million). Fair


discounted at a rate of 7%.

reassessed in 2021 which led to an increase of
the fair value at the acquisition date of DKK 44
million in contingent consideration and goodwill.
The sales target for 2022 has been reassessed

of the contingent consideration of DKK 62
million. The fair value adjustment has been
recognized in Financial income.
Accounting policies

value at each reporting date.

Financial costs (2020: DKK 0 million).
The contingent liability related to Microbiome
Labs is denominated in USD and increased by
DKK 28 million due to foreign exchange
adjustments.
Critical accounting estimates and judgments
Fair value of contingent consideration is


and use assumptions. Estimates are based on
updated information since the initial
recognition of the liability such as budgets,
sales forecasts, discount rates etc. The fair
value of the contingent consideration is
calculated as the present value of the most
probable redemption amount using the

determined fair value is associated with
uncertainty and may be subject to
subsequent adjustments.


in Financial income or Financial costs.
B/S
Accounts and performance
Governance
Our business
The big picture
Notes
98Novozymes A/S


in 2020 to
Inventories increased

in 2020 to DKK million
Average net

DKK million in 2021



4

capital
4.1 
4.2 Trade receivables and contract assets
4.3 Other receivables
4.4 Other liabilities
4.5 Assets held for sale
Notes 99Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
4.1 Inventories
DKK million  
Raw materials and consumables  
  
Finished goods  

B/S
 
  
  
  



realizable value.

comprises direct production costs such as raw
materials and consumables, energy and labor
directly attributable to production as well as
indirect production costs such as employee costs,
maintenance and depreciation of plants, etc.

costs and costs to execute the sale (net realizable
value) of inventories is lower than the carrying
amount, inventories are written down to net
realizable value.
Novozymes has entered into a few agreements
where Novozymes supplies goods to a customer’s
premises but retains title to the inventory until
the goods are consumed in the customer’s
production. Such goods are derecognized from
inventories in the period when they are
consumed in the customer’s production.

Critical accounting estimates and judgments

measured at cost, including indirect

capitalized under inventories amounted to


costs are assessed on an ongoing basis to
ensure reliable measurement of employee
costs, capacity utilization, cost drivers and

parameters may have an impact on the gross

progress and Finished goods.
Accounting policies
Notes 100Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

DKK million  
Trade receivables, gross  
  

B/S
 
Aging of trade receivables, gross:
  
  
More than 90 days  
  

  
Allowances during the year  
  
Reversed allowances  
  


DKK 5 million) held as security for trade
receivables in selected countries.
Contract assets


mainly related to goods delivered but not invoiced.
The contract assets are initially recognized as
revenue when goods are delivered to the other
contracting party. When invoiced, the contract

No allowance for expected credit losses had been

(2020: no allowance).
Trade receivables and contract assets are
measured at amortized cost less allowance for
lifetime expected credit losses.
To measure the expected credit losses, trade
receivables have been grouped based on shared

Furthermore, an allowance for lifetime expected
credit losses for trade receivables is recognized
on initial recognition.

individual assessment.
Trade receivables and contract assets are written

exhausted and there is no reasonable expectation
of recovery.
The cost of allowances for expected credit losses

assets are recognized in Sales and distribution
costs.

Critical accounting estimates and judgments
The allowance for expected credit losses for
trade receivables and contract assets is
based on historical credit loss experience



updated at each reporting date.
Accounting policies
Notes 101Novozymes A/S
Accounts and performance
Governance
Our business
The big picture


DKK million  
Deposits  
Prepaid expenses  
Other  
  
Recognized in the balance sheet as follows:

B/S
 

B/S
 
  
DKK million  
Employee costs payable  
  
Deferred consideration  
Other payables  
  
Recognized in the balance sheet as follows:

B/S
 
  
4.5 Assets held for sale
DKK million  

Land and buildings 
Total
B/S
- 
Assets held for sale comprised buildings that are
expected to be sold within the next 12 months.
Buildings held for sale were sold in 2021,
resulting in a gain of DKK 82 million, of which
DKK 60 million was recognized as Other
operating income and DKK 22 million was
recognized in Sales and distribution.

for sale when their carrying amounts are to be
recovered principally through a sale transaction
and a sale is considered highly probable.
Such assets are stated at the lower of the
carrying amount and fair value less costs to sell.

Accounting policies
The increase in prepaid expenses mainly relates
to establishing the new production line in Blair,

Accounts and performance
Governance
Our business
The big picture
Notes
102Novozymes A/S
Return on equity up


3.4 million B shares under

at a value of DKK million

increased from
0.8x in 2020 to


1.0x
5
Capital structure

5.1 
5.2 Financial income and Financial costs
5.3 
5.4 Derivatives – hedge accounting
5.5 
5.6 Financial assets and liabilities by category
Notes 103Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

Due to the international nature of Novozymes’



entire Group. The Treasury Policy is approved by
the Board of Directors and sets the limits for the



and contains rules on which derivatives can be
used for hedging, which counterparties can be



income and costs in each individual currency and
because Novozymes has more assets than
liabilities in foreign currencies in connection with
its global operations.

currencies in which Novozymes has the largest
exposure. Hedging is managed by entering into
derivatives such as forward contracts, currency
options and swaps. Loans and deposits in foreign
currencies are also utilized for hedging purposes.

basis by comparing changes in the timing and
value of the expected exposure in the relevant
currencies with the timing and value changes for


to net investments in foreign subsidiaries is


used to hedge equity investments.
Foreign exchange sensitivity – 2021
The sensitivity analysis shows the impact on net



For other comprehensive income, the analysis
shows the impact on currency translation of net
investments and does not include the impact of

commercial transactions.



other variables remain constant. The table shows

decrease in the exchange rates would have the

Foreign exchange sensitivity – 2022 estimate



to USD and EUR. A movement of 5% in the USD/
DKK exchange rate would result in a change in the


movement in the EUR/DKK exchange rate would

around DKK 200 million (2021: DKK 200 million).
Foreign exchange sensitivity analysis
 
DKK million
Increase in
exchange
rates
Change

Change in
other com-
prehensive
income
Change

Change in
other com-
prehensive
income
   
     
USD    
Other    
Total    


has been hedged by forward contracts at an
average rate of DKK 6.26. As a result, the impact











increase of one percentage point in the average






instruments held by Novozymes are impacted by



equivalents, derivatives, trade receivables and

receivables and contract assets is countered by
thorough, regular analysis based on customer


derivatives is mitigated by the Treasury Policy,
which limits exposure solely to counterparties



Notes 104Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

management (continued)

Policy. Novozymes has entered into netting





4,219 million (2020: DKK 4,021 million), which is









facilities and placing free funds in deposits,

in accordance with the Treasury Policy.

resources amounted to DKK 4,748 million (2020:
DKK 6,522 million), consisting of net cash, cash
equivalents, and undrawn committed credit


With the exception of debt to credit institutions,
the maturity dates are primarily within one year.
Capital structure
Novozymes favors a modestly leveraged balance



the target is considered as met in 2021. The
capital structure is mainly managed using two
instruments: 1) Dividend payments where
Novozymes aims for a payout ratio of around
50%. For 2021, the payout ratio is expected to be
48.5% which is in line with the communicated

1,500 million was executed in 2021. A new
program of up DKK 500 million is planned for
2022.
5.2 Financial income
and Financial costs
DKK million  
  
Fair value adjustments of contingent consideration 
  
Gains on fair value hedges 
Financial income
I/S
 
  
  
 
  
Other foreign exchange losses, net  
  
Financial costs
I/S
 
  
Financial income and Financial costs comprise
interest income and interest costs, realized and
unrealized foreign exchange gains and losses, as



liabilities and fair value adjustments of Other



Financial income and Financial costs also include
fair value adjustments of derivatives used to
hedge assets and liabilities, and income and

transferred from Other comprehensive income on
realization of the hedged item.
Accounting policies
Credit institutions - currency 2021
(2020)
DKK million
EUR
2,273 (1,658)
Other
3,433 (2,692)
5,706
(4,350)
Less than 1 year
2,029 (1,106)
Between 1 and 5 years
2,424 (1,912)
More than 5 years
1,253 (1,332)
Credit institutions - time to maturity 2021 (2020)
DKK million
5,706
(4,350)
Fixed interest rate
3,540 (2,995)
Between 1 and 5 years
2,166 (1,355)
Loan portfolio - fixed or floating
interest rate 2021
(2020)
DKK million
5,706
(4,350)
Notes 105Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

DKK million  
  
Derivatives  
 
  
Recognized in the balance sheet as follows:

B/S
 

B/S
 
  

 
DKK million
Credit
institutions
Lease
 Total
Credit
institutions
Lease
 Total
      
      
Foreign exchange adjustments     
     

      



Notes 106Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
5.4 Derivatives – hedge accounting
Fair value hedges
The table above shows the derivatives the Group
has contracted in order to hedge currency

give rise to currency adjustments in the income
statement.
The forward exchange contracts fall due in the


2021 
DKK million
Contract

on agreed
rates*


Contract

on agreed
rates*



    
    
USD   
    
Other   
Fair value hedges at Dec. 31    

Hedge accounting consists of positive and
negative fair values of derivatives, which are
recognized in the balance sheet under Other

respectively.
Derivatives used for fair value hedges are
measured at fair value on the reporting date, and
value adjustments are recognized as Financial
income or Financial costs.

of net investments in subsidiaries are measured
at fair value at the reporting date, and value
adjustments are recognized in Other
comprehensive income.

and hedges of net investments in subsidiaries are
transferred from Other comprehensive income on
realization of the hedged item and are recognized
as Financial income or Financial costs.
Derivatives are recognized at the transaction date.

Accounting policies


million (2020: gain of DKK 1 million), compared

(2020: loss of DKK 1 million).
Notes 107Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
5.4 Derivatives – hedge accounting (continued)

The table above shows the derivatives that the
Group has contracted to hedge currency and

2021 
DKK million
Contract

on agreed
rates*


Contract

on agreed
rates*



USD    
   


(2020: (0.22%))   

    
  
    


The forward exchange contracts fall due in the


fall due in May 2026 and December 2026 (2020:
May 2026 and December 2026).
At the end of 2021, the Group had hedged 88%

an average rate of DKK 6.26 (2020: 88% of

average rate of DKK 6.41).
% of common stock
Disposals
during
the year
Additions
during
the year
Treasury
stock at
Jan. 1,
2021
Cancellation
of common
stock
Treasury
stock at
Dec. 31,
2021
2.0
1.2
(0.4)
(1.1)
1.7
Treasury stock 2021
% of common stock
3.3
1.5
(0.8)
(2.0)
2.0
Treasury stock 2020
Disposals
during
the year
Additions
during
the year
Treasury
stock at
Jan. 1,
2021
Cancellation
of common
stock
Treasury
stock at
Dec. 31,
2021
Notes 108Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

Each A share entitles the holder to 20 votes, while
each B share entitles the holder to two votes.
Each year, the Board of Directors assesses whether
the ownership structure with A and B common

to believe that this is the best way to safeguard

of the company’s shareholders and other

2021 
No.
Nominal value
DKK million No.
Nominal value
DKK million

    
    

B/S
   

    
Additions during the year   
Disposals during the year    
    
    
No.  

  
  
  
  






shares.
Notes 109Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

DKK million Note  
Trade receivables   
   
Other receivables, excl. prepaid expenses   
  
Financial assets at amortized cost  
  
  
Derivatives  
Fair value through other comprehensive income  
Financial assets  
DKK million Note  
Lease liabilities   
   
Trade payables  
Transitional holiday accrual  
Other payables, incl. deferred consideration   
  
   
  
Derivatives   
Fair value through other comprehensive income  
Share purchase liability  
Fair value through equity  -
  
Fair value hierarchy

measured at fair value on the basis of quoted
prices (level 1 input).

measured at amortized cost (level 2 input), the
carrying amount approximate fair value.

Derivatives are measured at fair value based on
observable data (level 2 input). The derivatives are

prices but on individual contracts. The fair value
of these assets is determined using valuation


volatilities.

and share purchase liability are measured at fair


a description of fair value measurement.
Accounts and performance
Governance
Our business
The big picture
Notes
110Novozymes A/S
Realized Group audit fee
ratio during 2021
No. of Danish and

in the Group
Grant date fair value of
options granted in 2021
in DKK million
0.4
49
85
6
Other

6.1 Management remuneration
6.2 
6.3 
6.4 Related party transactions
6.5 
6.6 Fees to statutory auditors
6.7 
6.8 
6.9 Group companies
Notes 111Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
6.1 Management remuneration
 
Executive Leadership Team Executive Leadership Team
DKK million
Board of
Directors
Registered
executives
Non-
registered
executives Total
Board of
Directors
Registered
executives
Non-
registered
executives Total
       

     
   
Remuneration       

   
Remuneration including additional payments       
  
General guidelines for the remuneration of the
Board of Directors and the Executive Leadership
Team of Novozymes A/S, as assessed by the
Board of Directors in accordance with the
recommendations of the Nomination and

Annual Shareholders’ Meeting.
A summary of the Management remuneration can
be found in the Governance section of The
Novozymes Report.
Executive Leadership Team
Members of the Executive Leadership Team






in line with Novozymes’ strategic focus and

investments in the business.

designed to incentivize performance against





interests of shareholders, customers and other


Other financial notes
65% is expected to be payable at target

are described in Note 6.2.
Members of the Executive Leadership Team have
contracts of employment containing standard
conditions for executives of Danish listed
companies, including the periods of notice that
both parties are required to give and

contract of employment is terminated by the
company without any misconduct on the part of



termination compensation of 12 months’ base
salary and pension contributions.
Board of Directors
The remuneration of the Board of Directors

incentives.
Changes to the Executive Leadership Team

Strategy & Business Transformation and Morten




accordance with an agreement made in 2020.
Notes 112Novozymes A/S
Accounts and performance
Governance
Our business
The big picture


programs for the Executive Leadership Team, vice
presidents, directors, and other employees. The
purpose of these programs is to ensure an
alignment of interests of the Management,
employees and shareholders. Allocation of
programs has been, and remains, dependent on

sustainability targets being achieved, and are
made based on individual base salary. The


to exercise the options, the employee must still
be employed at the exercise date. This does not

voluntary early retirement or been given notice.



new incentive program for the Executive
Leadership Team was established, covering the











the intrinsic value of the program exceeds twice
the full annual conditional grant.

the date of grant was approximately DKK 40



have a vesting period of four years, followed by



A new program was also established in 2021 for
vice presidents and directors covering the

presidents and directors). The total target level
fair value at grant date was DKK 55 million and
based on the same requirements and targets as
for the Executive Leadership Team. The program






allowing the Board of Directors to choose to limit

the intrinsic value of the program exceeds twice
the full annual conditional grant.


40%), organic sales growth (weight 40%) and
sustainability targets (weight 20%). Sustainability


sustainability targets carry a weight of 5%. The
performance targets are as protocolled in the
minutes of the board meeting approving the

prior to the performance period.
 


aspiration and on all four measures for the


 



granted.
 


of the four sustainability targets, then none or



allowing the Board of Directors to choose to limit


incentive program was also established in 2021

employee program follows the same requirements
and targets as the program for the Executive
Leadership Team and the program for vice
presidents and directors.
The Executive Leadership Team, vice presidents
and directors, who are already included in an
existing incentive program, are excluded from the



target level value of the program is approximately
DKK 40 million.

2022 follow the same principles as those
described for the 2021 programs, and the fair
value at grant date of the programs was
approximately the same.
Other financial notes



Notes 113Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
(continued)


 DKK DKK million
Executive
Leadership
Team
Vice
presidents
and directors
Other
employees Total
Avg. exercise
price per
option
Grant date
fair value per
option
Grant date fair
value total
     
  
Granted       
Exercised     
Forfeited    
Expired   
     
     
  
Granted       
Exercised     
Forfeited    
Expired   
     
  
  



Other financial notes
Notes 114Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
(continued)



the weighted average remaining term to maturity

During 2021, DKK 78 million arising from

income statement (2020: DKK 54 million), DKK 75



Most programs are equity settled, and no liability

Furthermore, the options are assumed to be

period, on average, or at the option’s expiry date

historical volatility over the last three years. The

government bonds with a maturity equivalent to
the option’s term to maturity.
Assumptions  
Expected future dividends per share DKK  
 %  
 %  
Weighted average share price at grant date DKK  
Other financial notes
programs are made in countries where ownership


liability of DKK 44 million was recognized for this
in 2021 (2020: DKK 15 million). The intrinsic value


The fair value of employee services received is
measured with reference to the fair value of the
equity instruments granted. Fair value at grant
date is measured in accordance with the

price, the option term and the following




with a fair value of DKK 41 million were granted









The fair value of the employee services received



granted. The fair value is measured using the


grant date is recognized as an employee cost over


number of employees expected to gain
entitlement to the options as well as the number
of options the employees are expected to gain.
This estimate is adjusted at the end of each
reporting period such that only the number of
options to which employees are entitled or
expected to be entitled is recognized.


programs, which are recognized as Other
liabilities, is adjusted to fair value at the end of
each reporting period, and the subsequent
adjustment is recognized in the income statement
under Financial income or Financial costs.
Accounting policies
Notes 115Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
Other financial notes
6.3 Commitments and
contingencies

Novozymes is engaged in certain legal cases. The
Board of Directors and Management believe that
settlement or continuation of these cases will not

position. A liability is recognized under Provisions




Property, plant and equipment are described in

Contract conditions
Several of the partnership contracts to which
Novozymes is a party may be terminated by the

ownership or control of Novozymes. Furthermore,
a few contracts contain provisions that restrict

technology in such situations.
DKK million  
Other guarantees
Other guarantees and commitments to related companies  
Other guarantees and commitments  
Notes 116Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
6.4 Related party transactions
Other financial notes
Novozymes A/S is controlled by Novo Holdings
A/S
72.6% of the votes in Novozymes A/S. The

parent of the Group is the Novo Nordisk
Foundation
Related parties are considered to be Novo Holdings

Board of Directors and Executive Management of
these entities together with their immediate
families. Other related parties are considered to be



DKK million  

Sale of services
Dividend payment to Novo Holdings A/S  

Sale of services  
Sale of assets
Purchase of goods and materials  
Purchase of services  
The NNIT Group
Purchase of services  
The Chr. Hansen Group
Sale of goods and materials  
Purchase of goods and materials 
Purchase of services 

Purchase of services  

DKK million  

Receivables 
Payables  
The NNIT Group
Payables  
The Chr. Hansen Group
Receivables

Purchase of services  

of Novozymes A/S, as well as the Board of
Directors and Executive Leadership Team of
Novozymes A/S together with their immediate
families. Related parties also include companies in
which the above persons have control or joint
control.
All agreements relating to these transactions are

majority of the agreements are renegotiated
regularly.

Holdings A/S 765,000 of its own B shares with
the approval of the Board of Directors, at a price



There were no transactions with related parties
other than the transactions described and normal
remuneration of the Board of Directors and
Executive Leadership Team, which is presented in
Note 6.1.
Rental commitments to related parties at December


Transactions 
Notes 117Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

On December 10, 2021, Novozymes acquired
60% of the shares in Synergia Life Sciences,

The remaining 40% of the shares in Synergia Life

and are recognized at the proportionate share of



The remaining 40% of the shares in Synergia Life
Sciences is to be acquired in 2025 and a liability
of DKK 717 million is recognized in 2021.
The redemption amount is contingent on the
achievement of sales targets for Synergia Life

2025.
The consideration will be within the range of DKK
652 million to DKK 1,174 million and includes


acquisition date of Synergia Life Sciences.
Fair value of the Share purchase liability is
assessed by using the most probable redemption
amount, discounted at a rate of 11%. The share

6.5 Non-controlling interests
Accounting policies
Share purchase liability is Novozymes’s obligation

subsidiaries and is remeasured at fair value at
each reporting date. The fair value of the most

within liabilities with a corresponding charge


recognition are recognized in Retained earnings
within Equity.
Audit fee policy

nonaudit services provided by the statutory
auditors should not exceed the annual fee for
statutory audit services measured at Group level.
The Group audit fee ratio may only exceed 1 with

No such approvals were given in 2021 or 2020.

restrictions on the nonaudit services that the
auditors elected at the Annual Shareholders’

fee for nonaudit services performed for




advisory services concerning transfer pricing,

reporting and tax consultancy.
DKK million  
Statutory audit 
Other assurance engagements
Tax assurance services 
Other services 
Fees to statutory auditors  
Group audit fee ratio  
6.6 Fees to statutory auditors
Other financial notes
Critical accounting estimates
and judgments
Fair value of the share purchase liability


estimates and use assumptions.
Estimates are based on updated
information since the initial recognition
of the liability such as budgets, sales
forecasts, discount rates etc. The fair
value of the share purchase liability is
calculated as the present value of the
most probable redemption amount using

determined fair value is associated with
uncertainty and may be subject to
subsequent adjustments.
Notes 118Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
DKK million Note  
Non-cash items
Accrued interest income and interest costs  
 
Depreciation, amortization and impairment losses   
Realized loss and allowances for doubtful trade
receivables  
(Gain)/loss on sale and disposal of assets 
Unrealized foreign exchange (gain)/loss  
Tax   
   
  
  
 
 
Non-cash items  
DKK million Note  


Acquisition of PrecisionBiotics Group  
Acquisition of Microbiome Labs  
Acquisition of Synergia Life Sciences  
  
Additions of intangible assets   
  
Additions of property, plant and equipment   
 
Less additions to lease assets   
  

Other financial notes



is compiled using the indirect method, shows cash

activities, and the Group’s cash and cash
equivalents at the beginning and end of the year.


items, corporate income tax paid and change in


payments relating to the acquisition and sale of
Accounting policies

assets, and property, plant and equipment.

proceeds from borrowings, repayment of principal

liabilities, payment of dividends, proceeds from

other securities.


demand.
Notes 119Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

No events of importance to the consolidated

reporting date.
Other financial notes
6.9 Group companies

Production

Research and development
Holding companies, etc.
Activity
Percentage of

Parent Company
A/SDenmark

Novozymes BioAg S.A., Argentina







Novozymes BioAg Productos Para Agricultura Ltda., Brazil









Activity
Percentage of



















Novozymes Berlin GmbH, Germany

Novozymes Hong Kong Ltd., Hong Kong



































Novozymes Switzerland AG, Switzerland

6.9 Group companies (continued)
Notes 120Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
6.9 Group companies (continued)
Other financial notes
Activity
Percentage of


























 

 
 




Notes 121Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
7
Environmental
data
7.1 
7.2 Energy
7.3 Water
7.4 Waste
7.5 Environmental compliance
7.6 Bioethics & biodiversity
7.7 Product stewardship
m
3


Biomass
recovered

electricity



Notes
Notes 122Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
7.1 Climate change

strategy and we are committed to a net zero

climate impacts across our operations and value
chain. Through the application of our solutions,
we enable our customers and end users to reduce

2
emissions.
Our approach
Our ambitious climate commitment, Accelerate

under our refreshed strategy as part of our
commitments to a healthy planet, and it guides
our approach to addressing climate change
issues.


achieving net zero across operations and value



are now accelerating our net zero journey and

change. We have committed to a 50% reduction

2
emissions from our operations

compared to a 2018 baseline, and to source

implementation, we have set internal annual
targets.

2
emissions from our operations by 40% by 2022
(relative to 2018). This reduction is driven by our
We are also implementing the recommendations



opportunities please refer to the ‘Governance’
section of this report.


environmental impact of our solutions. These

informed and to demonstrate to our customers

2
emissions and leverage
the positive impact on climate change that
Novozymes’ solutions can enable. Our published

We disclose our climate change impacts through



disclosures).
2021 highlights

2
emissions from our operations


higher sales, thus higher production activity.
Despite this increase, we reduced our absolute


Environmental data
CO-equivalent emissions
  
Natural gas  
Gas oil, light fuel oil and diesel oil
 -
Scope 1  
District heat
Electricity  
Steam  
  
  
Ship
  
Air freight 
Scope 3  
  

  
  
 * 


455.

emission factors, and changes to our production
processes.

1,000 tonnes
Scope 1 Scope 2
2019
2018
2017
2020 2021
408
437
330
234

Notes 123Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
7.1 Climate change (continued)
Environmental data

2
emissions comprise scope 1, scope
2 and emissions from outbound transport of
products.
 from internally generated energy (scope 1) is
calculated based on the amount of fuel
consumed using local emission factors.

2
from externally generated energy (scope 2) is




2
emissions from the sourced renewable energy

2



2
factors from


2

calculated based on principles described in the

2
emissions related to transport from all primary
enzyme production sites to customers where
Novozymes pays for the freight. Transport
between production sites is also included.
Transport of raw materials to a production site is

2
emissions generated at
external warehouses are not included. Emissions
data are calculated based on distance and
emission factors from the GHG Protocol.
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 policiesNovozymes' bioenergy solutions helped the

2
in
2021 by enabling the production of low carbon
fuels.

better understand our supply chain emissions
and our suppliers’ climate maturity, in support of


provide carbon footprint or best available data
for the products they deliver to Novozymes. Some

greenhouse gas emissions (GHG) data, and many
had targets to save energy and/or reduce GHG
emissions in the coming decade.

supply chain emission reductions. We will
continue to focus on executing our renewed
climate commitment by exploring renewable
energy opportunities for all our sites, by investing

opportunities, and by engaging with our
suppliers.
Five-year energy consumption
1,000 GJ
2019
2018
2017
2020 2021
4,760
4,831
4,574
4,475
4,699
Wind power
52% (51%)
Solar
25% (26%)
Hydro
4% (4%)
Biomass
19% (19%)
Notes 124Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
7.2 Energy
Novozymes' operations depend on fuel, steam
and electricity. Many of our biosolutions enable
downstream users to save energy in certain
applications compared with conventional
methods, such as in laundry and dishwashing
detergents and textile applications.
Our approach
We manage energy in our operations through a

renewable energy and reducing energy use in
production by implementing optimization or

performance in these areas.
Novozymes’ Operations, Supply and Quality
function manages and monitors all energy

Through the RE100 initiative, we have committed


Novozymes pursues a strategy to recover energy
that would otherwise go to waste and distribute it
to local communities.

  
Natural gas  
Biogas  
Gas oil, light fuel oil and diesel oil  
  
Electricity – conventional  
Electricity – renewable , ,
  
  
Steam , 
 , ,

ESG
, ,
Energy production from waste  
Environmental data
2021 highlights

5% compared to 2020. This was driven by higher
production volumes as sales grew organically by
6%.


throughout the year resulted in energy savings of





investments but only interventions in the way a
compressor is run, resulted in energy savings of

baseline year for this project).
The share of renewables in our total energy


Electricity is more than half of the total energy
consumed, and 68% of the electricity came from
renewable sources.
We have developed a new renewable electricity
strategy with elevated focus on accelerating



ensuring high quality and impactful projects for our
local communities. Moreover, new projects have
been matured for several sites across Novozymes’
global footprint, with a new agreement securing

from 2022 onwards.
Going forward, in addition to further investing in
renewable energy, we will continue to explore
energy saving opportunities at all sites as well as

Notes 125Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
7.2 Energy (continued)
Energy consumption includes quantities
consumed both in the production process and in
other areas.

consumption converted to energy based on the
lower combustion value and weight by volume,
except in the U.S., where legal requirements for

2
state that the higher combustion
value is to be applied. Fuel consumption
comprises all types of fuel used to produce
electricity, heat and steam on site and converted
to energy using factors supplied by utility
providers or local authorities. Fuel for
transportation is not included.
Externally generated energy is the input to
Novozymes of externally generated electricity,
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 readings,
with the exception of steam, which may be
subject to calculation.
The renewable energy percentage is calculated 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

biogas and biomass.

from biomass.
Environmental data
Accounting policies
Water consumption by primary source
1,000 m
3
2019
2018
2017
2020 2021
8,106
8,205
7,845
7,998
8,538
Drinking water
Industrial water Steam
Notes 126Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
7.3 Water
Water is an essential part of Novozymes’
production and value chain. We rely on

freshwater for production and processing. Our
product quality and safety is directly dependent
on the quality of the freshwater we receive at our
facilities. Additionally, the production of our
solutions results in generation of wastewater.
Our solutions enable our customers to reduce

wastewater quality by replacing chemicals. They
also have the capabilities to provide
improvements in the wastewater treatment
industry by replacing hazardous chemicals.
Our approach
As part of our commitments to a healthy planet,

commitment to responsible water management
and our ambitious target to manage water in


consumed.
We are committed to ensure water is respected as

water security. Therefore, we are developing
contextual water management programs for all
production sites by 2022 to help us further focus

impact.

wastewater compliance and improving our



treated internally or externally in biological
wastewater treatment systems before being
discharged.
Externally, we collaborate with organizations and
communities for collective action to address
water challenges in our surrounding communities
such as depleting water quality, WASH (water,
sanitization and hygiene) and watershed
restoration.

  
 , ,
 , ,
Steam  

ESG
, ,
Environmental data
We disclose our water security impacts through

to be recognized for our good water management
practices).
Notes 127Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
7.3 Water (continued)
2021 Highlights

compared with 2020, mainly driven by the
increased production.
Through our major projects in operations, we
achieved water savings of 87,000 m for the year.
This year, we operationalized a project at our

40,000 m of treated wastewater for cooling
towers, irrigation and other internal processes.

.

and external engagements to drive results in

Amongst our external engagements, we initiated


restoration of local wetland ecosystems. We
continued our partnership with the World Wide
Fund for Nature for developing our contextual
water programs.
At the end of the year, 11 out of our 15
production sites had programs with actions to
help us address local water challenges.

based target methodology for water, to help us
better understand the methodology and move

science.
Going forward, we will focus on completing the
development of contextual water management
programs for our remaining production sites,
optimize water use and further expand our


wastewater generated in 2021.
Environmental data


3
 
Wastewater to irrigation  
Wastewater to surface water or treatment , ,
 , ,
Water consumption refers to the withdrawal of

water and externally supplied steam.


but is suitable for certain industrial processes, for


Accounting policies
The reported quantities are stated based on the

include quantities consumed 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
discharged by Novozymes or calculated based on
water withdrawal.
ESG
Wastewater by treatment method
1,000 m3
Novozymes-treated to
external water recipient
Novozymes-treated
to irrigation
Novozymes-treated
to external treatment
Untreated to
external treatment
2019
2018
2017
2020 2021
6,182
6,306
6,147
6,471
6,610
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Total waste by disposal method 2021 (2020)
Used in agriculture
96.5% (93.5%)
Recycling
1.9% (1.5%)
Incineration with
energy recovery
0.6% (0.0%)
Landfill and incineration
without energy recovery
1.0% (5.0%)
Notes 128Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
7.4 Waste

in favor of managing waste and resources in a
responsible manner. Our biological solutions
enable our customers to adopt more responsible
use of resources. We are committed to minimizing
waste from our operations, while utilizing
precious resources in a circular manner.
Our approach
As part of our commitments to a healthy planet,

commitment to responsible waste management.

operations. To pave the way, by 2022 all
production sites should have programs to reach

Guided by our aim to achieve zero waste, we have

The localized approach allows us to manage the
complex issue in alignment with local regulations
and external service providers.
2021 Highlights
Despite increased business activities, the
generated waste was on par with 2020.
The total recycling and composting rate of the

or incineration without energy recovery.


Environmental data
local farming communities to distribute biomass

transportation and application, we adjust water
content in biomass in accordance with local
requirements. The biomass upon exit from our
Biomass
Most of the waste generated from the production
of our solutions is biomass. The biomass
generated from our operations has essential
nutrients such as nitrogen and phosphorus,

activities. We have set a target of achieving 100%
circular management of our biomass by 2022.

circular manner, with utilization as a raw material
in fertilizer production for agriculture with or

facilities has a water content in the range of 5%

biomass used in agriculture was 51 tonnes (2020:

1 tonnes (2020: 10 tonnes).
Waste
  
Biomass
Used in agriculture . .
 . .
 . .

 . .
 . .
Recycling (external) . .
 . .

 . .
 . .
Recycling (external) . .
Recycling (internal) . .
 . .

ESG
. .
Notes 129Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
7.4 Waste (continued)
Environmental data







incineration.



2021, 10 of our 15 production sites had


a reduction of our waste as well as an increase in
recycling. These initiatives include process
improvements, optimal utilization of resources
and process planning, waste sorting to allow
more recycling, etc.

We are committed to minimizing the impact of


compostable. Therefore by 2022, we aim to have

materials. We are progressing as planned for the


Biomass is measured or calculated based on
volume or weight produced. At each site, biomass

ratio. The quantity of dry biomass is calculated
based on the water ratio in the biomass.


nonhazardous waste, and by disposal method.
The amount recycled is the quantity recycled
internally or sent to an external service provider
for recycling.
Accounting policies
Notes 130Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
7.5 Environmental compliance 



running of operations. Novozymes is committed
to complying with all environmental regulations
and maintaining high standards of environmental
management in various aspects, including
pollution prevention, resource conservation and

Our approach
Our commitment to environmental compliance is
outlined in our Sustainability Policy. All activities
to ensure environmental compliance are
anchored in the Quality, Environment & Safety
function. Novozymes’ production sites are

Management Systems standard. Our
Management System is based on this standard
and applies to all our operations.
Novozymes’ products are based on technologies
found in nature and our business is based on
biotechnology. As a biotechnology leader
developing solutions and applications for
customers, we explore the available biodiversity

from nature via a process called bioprospecting.

optimized using biotechnological research and
used to develop new biological solutions that
help our customers improve their products and
reduce their environmental footprint.
Our approach
Novozymes’ position paper on Biodiversity and
Gene Editing captures the method in which we
interact with biodiversity and how we contribute
towards sustainable development. We are

potential of biology and industrial biotechnology

Novozymes.


operating in compliance with legislation and
following any guidance and requirements from
regulatory authorities on biotech innovation
Environmental incidents and neighbor complaints

management system. This system enables us to
implement suitable remedial actions to correct
and prevent their occurrence in the future. We

compliances and neighbor complaints.


registered across our facilities, compared with 20
in 2020. Most of these were related to
wastewater treatment. None of them have

preventive action to avoid such incidents have
been agreed with the relevant authorities.
Novozymes received seven neighbor complaints
in 2021, compared to 10 received in 2020.


humans, animals and the environment.

samples in nature, we ensure that local laws are
followed, and safeguard the globally recognized
principles on the utilization of genetic resources.
We continuously discover new microbes that are

friendly industrial processes. Novozymes’ position
paper on biodiversity articulates how we endorse,


Diversity and the complementary Nagoya

have established systems and processes that
ensure we comply with the relevant regulations,
guidelines and international protocols.
2021 Highlights
We continue to closely monitor the ongoing

we became a member of the Science Based

and are closely following the developments
related to new methodologies for companies to
manage their impacts and dependencies on
nature.
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.
Environmental data
Accounting policies
Breaches related to annual control measurements
of spills reported in previous years are not
included, as they are not indicative of
performance during the reporting year.
Neighbor complaints refers to the number of
registered environmental complaints, primarily
odor and noise related.
Notes 131Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

Novozymes is committed to ensuring product
safety and stewardship in our operations and
across our value chain. Many of our biological
solutions serve as ingredients in consumer goods
(e.g. in laundry detergents) or are used for
manufacturing consumer products such as food,

material issue for us.

products safer for humans, animals and the

substances in our operations with safer
alternatives wherever feasible and constantly


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

are enforced globally and audited by an

collaborate with our customers, suppliers, and
various trade associations to drive product safety
and stewardship.
Novozymes has set internal targets on product
stewardship that guide our progress. We measure
performance particularly in the areas of product
safety and hazardous substance management.

functional process, new and existing chemicals
are screened annually for environmental, health

feasibility assessments to determine candidates

Novozymes has a clear position and a structured
approach to related topics such as product
information and labeling, traceability, industrial






safety and provide transparency.
2021 highlights


registration dossiers must be submitted in

countries, in 2021, Novozymes arranged a

customers, which will ensure customer
compliance with these regulations and a



of hazardous substances and materials, we

which was phased out and a new, safer

process, we also reinforced the relevance of our

hazardous preservatives from our enzyme

enzymes are readily biodegradable and hence

society’s concern and wish for “preservative free”
products.
Novozymes North America was recognized as an

Environmental Protection Agency (EPA) in 2021,
recognizing our commitment to produce safe
solution.
Novozymes is also accelerating the

products for laundry detergents and collaborating

Going forward, we will continue to prioritize
product stewardship practices at Novozymes. We


system, which will provide a strong foundation for
our product stewardship commitment. This


processes, such as dossier compilation and
submissions.
Environmental data
Notes 132Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
8
Social and
governance
data
8.1 Labor practices & human rights
8.2 
8.3 Employee safety & wellbeing
8.4 Business ethics
8.5 
8.6 
8.7 Responsible sourcing
Women in senior
management

integrity training for
employees
Lost-Time Injury
frequency (per million



1.5
Notes 133Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

Employees are vital for Novozymes’ growth and
the successful execution of our strategy.
Novozymes is responsible for ensuring that
human rights are respected both within the
organization and throughout its value chain.
Our approach
We have adopted a common management
approach and reporting structure for labor
practices and human rights. Our People and
Organization (P&O) function, together with
leaders across Novozymes are responsible for
ensuring equal rights for all employees. We are
committed to ensuring equal opportunities and
avoiding discrimination based on age, sex, gender
identity, race, national origin, ethnicity, disability,
education, sexual orientation and religious beliefs
in our global organization.


together comfortably and productively, free of

Novozymes recognizes and respects the right to
form and join associations and to bargain


of these fundamental rights in countries with
limited labor legislation.

the UN Guiding Principles on Business and
Human Rights and has implemented them in our
operational policies and procedures. We respect



since 2001, we have been a signatory to the

also a signatory to the Women’s Empowerment
Principles. We publish an annual statement
under the UK Modern Slavery Act.
The employee survey is an important tool that



This is critical for ensuring our success as a
business and for sustaining our reputation as a

Social and governance data
Notes 134Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
Social and governance data
Accounting policies

employee´s illness, including leave, and
occupational injuries and diseases. The rate af
absence is calculated as the number of registered
days of absence as a percentage of the total

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 during
the preceding year (excluding employees at
divested entities transferred to the acquiring
company.
Average age and seniority are calculated as the
sum of employees´ total age/seniority in whole
years at the reporting date, divided by the
number of employees.
Expatriation refers to Novozymes employees
temporary reassigned within Novozymes from the
country of original employment for periods of
more than six months.
2021 highlights
Labor practices
The rate of employee turnover increased to
11.8% from 8.7% in 2020. The increase was a
consequence of the low turnover in 2020 due to

economic recovery 2021.
We recorded a 2.2% rate of absence compared to
1.9% in 2020. The rate of absence has been



Human rights
We conduct regionally focused human rights
impact assessments to identify and assess human


Employee statistics  
 % . .
 % . .
 % . .
 % . .

Senior management, management, professional and
administrative % . .

technicians and process operators % . .
All employees % . .
Other employee statistics
Average age years . .
Average seniority years . .
Number of expatriates No.  
ESG
(continued)
region to region, this approach enables us to gain
a more comprehensive understanding of human


conducted the human rights impact assessment

completed assessments for the Americas, Europe,






Novozymes believes that respectful, professional
conduct furthers Novozymes’ mission and is



harassment.
Notes 135Novozymes A/S
Accounts and performance
Governance
Our business
The big picture



and shared values to form a vibrant culture.
Nurturing an inclusive and diverse organization

we can continue to bring the power of biotech to
the world.
Our approach
We are committed to nurture a culture of

themselves. We recognize that focusing on
diversity of representation alone is not enough.
For diverse teams to succeed, people need to feel
that they are valued and have a sense of shared
purpose, and therefore we focus on inclusion.
At Novozymes, we have a policy for diversity and
equal opportunities, which covers the entire

implement measures across all layers of
management. Our People and Organization
function, together with leaders across
Novozymes, is responsible for ensuring equal



we set ambitious targets to nurture a diverse,

environment. Specifically, we aim to achieve
gender balance across all professionals and in
senior leadership by 2030. This means that, as a
minimum, we will have 45% women and 45% men
across all professionals and in senior leadership.


based on local demographics, to address diversity
dimensions beyond gender. We have a target to
achieve a score of 86 on our Nurture Diversity

2021 highlights

diversity. The number of women in senior
management, management and professional
levels increased compared to 2020.
Furthermore, we achieved 85 on our Nurture

our 2022 target.



participated in the sixth UN Women Gender
Diversity Roundtable on the theme of driving
diversity and inclusion. During the United
Nations' General Assembly Summit, Novozymes

was hosted by Business Fights Poverty. This panel

regional employee representatives. They shared

corporations can bring out the best in their



Novozymes. We provided unconscious bias training
material in recruitment to hiring managers with
Social and governance data
information on how to strengthen diversity in
recruitment with a focus on bias, and addressing
screening, interviewing, and evaluating candidates.

To show our support for the cause and symbolize
our commitment to human rights, equity, diversity,


events.






for professional and personal development.





To monitor compliance to our diversity and equal

impact of our initiatives, e.g. gender diversity of
new hires and internal transfers.
Women in senior management measures the
percentage of women in director positions or
higher (i.e. director, vice president or executive
vice president).
Women in management measures the percentage
of women in middle management and specialist
positions.
Women in professional levels measures the
percentage of women in positions typically

leaders.
Nurture Diversity index measures the ratio of
women and international employees at both Senior

international employees were represented at the
same ratio in all management layers as in the
academic population ("professionals") in
Novozymes as such, the index would be 100.
Accounting policies
Gender diversity  
Women in senior management %  
Women in management %  
Women at professional levels %  
Notes 136Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

Being a company where people thrive always has
and always will be a core ambition for
Novozymes. Our strong safety culture provides


to bring out their best, at home with their loved

Our approach
We are committed to helping our employees

whether it is staying safe, healthy and stress free




support our safety and wellbeing culture, we have
our global People Policy and global Health and
Safety Policy, along with internal standards and
procedures.
Our Health & Safety strategy aims to ensure that
robust safety processes, equipment, standards,
tools, and training form an integral part of the




indicators. Novozymes’ Quality, Environment and
Safety function is responsible for supporting the
organization in ensuring a safe and healthy





initiatives. Our preventive program for enzyme

enable us to further improve the enzyme safety




wellbeing groups to bring solutions that address

responsibility of each manager to focus on

supported by our People & Organization function.
Our employee survey is an important tool that



This is critical for ensuring our success as a
business and for sustaining our reputation as a

2021 highlights

challenges to Novozymes around the world. We


running. Teams have handled changes related to

in our employee survey.
Social and governance data



2022.
Safety


focused on safety challenges across Novozymes.
We implemented a medical application in

Protection Regulation) compliant management of
all medical cases.




2022.
Wellbeing

employees can access a variety of materials,
tools, training, and information addressing
general wellbeing, including a stress prevention

we have continued to focus on mental wellbeing
activities such as BrainSpace, which aim to help
and inspire our leaders and employees.
Consequences of occupational injuries
No.  
Return to original job  
 - -
 - -

  
Occupational injuries  
Days of absence due to occupational injuries No.  
Frequency of occupational injuries
Per million
 . .
Notes 137Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
(continued)
Consequences of occupational diseases
No.  
Return to original job -
 -
 - -
 -

Occupational diseases  
Days of absence due to occupational diseases No.
Frequency of occupational diseases
Per million
 . .
Training costs  
Average training cost spent per employee DKK  
Percentage of total employee costs % 0.6 0.7
Social and governance data
Growth

development, we launched an online learning
platform called ‘Degreed’. This platform is

competencies needed for success in existing job
roles and career growth by allowing discovering,



The enrollment of leaders in our leadership
development program ‘Lead the Way’ was 52%.




score of 79 points on Enable learning (78 in 2020),


number of incidents that occur in the performce
of job duties at or between Novozymes locations
that prevents the individual from assuming



of diseases contracted as a result of an exposure


national legislation.
The consequences of occupational injuries with
absence and occupational diseases are measured

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 diseases are



questions in the annual employee questionnaire.
The resulting score is a value between 0 and 100.
The 'Lead the Way' program indicates the number
of leaders globally who have been registered for
the leadership development program 'Lead the

number of current leaders at Novozymes.
Training cost expresses the cost of external
training courses and seminars, translated into

spend is also shown as a percentage of total
employee costs.
Moving forward, we will focus on implementing
our refreshed strategy, aiming to improve safety

assure the continued wellbeing and development
of all our employees.
Accounting policies
Notes 138Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
8.4 Business ethics
Novozymes is committed to conducting business
in a responsible, ethical, and transparent manner,

high business integrity standards across our
operations.
Our approach
At Novozymes, we live and act as a responsible
corporate citizen, and business ethics are
integrated into everything we do or plan. We

relevant measures to ensure compliance to the
highest standards across all material

related issues.


business integrity matters across Novozymes.
Members of the committee include executive and
senior management representatives from both
business and compliance functions. They meet on

prioritizations and to follow up on the state of
business integrity compliance and relevant
initiatives.

and respond to fraud, corruption and other
violations of the business integrity principles.
Novozymes has seven business integrity
principles, which lay the ground rules for engaging
with third parties and apply to all employees
across the world. The business integrity principles
underline Novozymes’ zero tolerance approach to

hospitality. They act as Novozymes’ code of
conduct in business integrity matters and form

corruption. All employees have access to relevant
guidance on business integrity and are
encouraged to raise any concerns through the
relevant grievance channels.
Novozymes provides annual compliance training
in business integrity and competition law, which

on questions raised during the year and includes

applicability.
Novozymes has a global corporate whistleblower
system which allows employees and external
partners to report any concerns on illegal or
unethical misconduct or other violations of
Novozymes’ business integrity principles. The
whistleblower system is supplemented by various
internal reporting channels and screening
activities. All allegations of fraud, corruption and
other business integrity violations are thoroughly
investigated. Substantiated violations lead to
proportionate disciplinary sanctions for the
parties involved.
Novozymes has an ethical and responsible
approach to the data we handle. We respect data

of personal data and ensure ethical management
of data in the Novozymes Group as a supplement
to our general commitment to integrity and
compliance.
Novozymes’ responsibility for ensuring ethical
business practices also extends to our business


conduct business with integrity and share our
values regarding legal compliance.
Social and governance data
Dismissal
21% (29%)
Other disciplinary
sanctions
26% (25%)
Unknown perpetrator
53% (46%)
Consequences of substantiated fraud and
corruption cases 2021
(2020)
34
(24)
Whistleblower/tip-off
12% (13%)
Internal controls and
proactive detection
88% (87%)
Reporting channels for potential
fraud and corruption 2
021 (2020)
422
(286)
Notes 139Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
8.4 Business ethics (continued)
Social and governance data
2021 highlights
Again this year, our business integrity training
was completed by 99% of our employees in
scope. The training provided a general reminder
of our business integrity principles which serve to

by Novozymes. The competition law compliance
training in 2021 served as a general reminder of
do’s and don’ts and had a focus on competition
law aspects associated with the application of

As in previous years, Novozymes had no
violations of competition law in 2021. The
number of potential fraud and corruption cases
investigated increased in 2021 due to the
continued development of digital tools for

number of substantiated cases increased
compared to 2020, due to an increased exposure
to cyber crime. There was no material business or


covering personal data and other categories of
data, and implemented a governance supportive
hereof, as a supplement to the policies and
procedures already in place to ensure compliance
with rules regarding data protection and privacy.
The number of reports in Novozymes’
whistleblower system remains fairly low,

internal grievance channels. Promotional
initatives are planned for 2022 to ensure general
awareness of the whistleblower system.

information on all whistleblower reportings and

The charts provide further details of the reporting
channels and consequences for fraud and
corruption cases.

the percentage of employees in scope who have
undergone business integrity training in the last
training period. New entities are included within
six months of acquisition. Business integrity
training is conducted for employees who can

decisions as part of their job role. This comprises
employees in professional, managerial or
administrative positions.
The reporting criteria for a competition law
violation is whether it has been established by an


anywhere in the world that a company in the
Novozymes Group has violated applicable


deliberate misconduct with the intent to gain a
direct or indirect personal advantage.
Accounting policies
Notes 140Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
Social and governance data
8.5 Customer engagement
Together with customers, partners, and the global
community, we improve industrial performance
and consumer products while preserving the
planet’s resources and helping to build better
lives. Therefore, customer engagement and

to continue being a trusted business partner that
delivers reliable products and innovative
solutions.
Our approach

are some of the main drivers behind our strategy




solutions and applications to help improve their
products and processes. Our Technical Service

understanding of our customers´ needs. They

adjustments, tailored to the needs of individual
customers. Lastly, we engage strategically with
customers across various industries to jointly
develop sustainable biological solutions.

customers. We aim to bring value in a more

designed to be easy to use, inspirational and
available whenever our customers need them.
Throughout the year, we respond to several
information requests from customers in areas
such as governance, strategy, sourcing practices,
safety, quality and sustainability. We provide
information on products, services and corporate
policies, commitments, targets, and initiatives in
a transparent manner.

customers is crucial in determining our

expectations and driving improvements to our

2021 Highlights
We are on a journey to accelerate our digital


sample and buy products, and digital

of our sales opportunities were generated
digitally, and we launched a new portal for
technical collaboration to meet customer needs
for trials collaboration, product documentation,
and trouble shooting. We will expand the
collaboration portal to the majority of customers
in 2022.

solution for our bioenergy customers which


reducing variability, maximizing conversion, and
resulting in more consistent liquefaction for every
batch.
We continue to partner with our customers to
jointly develop and deliver better biological
solutions. As one example, in 2021, Novozymes
expanded its partnership in homecare & industrial



and ingredient distributor. Together we will deliver
biological solutions to address demand for

resources while optimizing performance in
homecare & industrial cleaning, and growing
health consciousness and reducing chemical raw
materials in food & beverages.

Net Promotor Score (“NPS”) of 69 in 2021. The
score shows that our customers value our


demonstrates how Novozymes’ teams responded
incredibly well despite operating in a challenging

As part of our refreshed strategy, Novozymes will



customers to better understand their world and
help create products that will delight consumers.
Particular focus will be on the food and health
space.
Accounting policy







The criteria for selection of customers to include

changed in 2021. Therefore result is not
comparable to the surveys performed in previous
years.
Notes 141Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
8.6 Community engagement
We believe that businesses have an obligation to
engage with the communities in which they
operate and to invest strategically in programs
that create value to society. We inspire each other

promise of better lives in a growing world, both

Our approach
As part of our refreshed strategy, we set
ambitious targets to nurture an inclusive and


to drive outreach initiatives they are passionate

groups coordinating the local agenda in
alignment with the regional leadership teams.

time to community outreach, help educate the


2021 highlights

We continued supporting our communities


donated 500 oximeters to the Health Department

to schools and hospitals in North America.



countries. The campaign was conducted together
with the Novo group companies, including Novo


enough to fully vaccinate 800,000 people.
Since 2020, the Novozymes Water Opulence

towards strengthening the water supply and
systems in villages situated around our




Foundation and a Bronze award in the ‘Water



mobilized employees to clean up trash and
beautify our local neighborhoods while also
supporting charities. We cleaned the beach of


also organized activities supporting local
biodiversity.

All over the world, our employees continued to
engage with local university students to share our

lives via webinars, lectures and case
competitions. For example, 81 people joined a
webinar with Novozymes experts on industrial
enzymes, organized for students at Taylor’s
University in Malaysia.

Sustainability Professionals by mentoring social

solutions to sustainable development challenges
and create tangible impact to local communities

Opportunity Explorer 2.0.

‘Girls’ Day in Science’ and invited 50 girls from
the 8th and 9th grades to interact with our

two public school teachers through the Kenan






world made personal pledges to change some of
their habits to reduce their environmental
footprint, such as eating less meat.

learn about the implementation of SDGs at the

as part of the ‘Waste Not, Want Not’ campaign,
our employees participated in activities to

their communities.
Social and governance data
COVID-19
Our Zymers joined forces
and helped raise funds


COVID-19 vaccines to

countries.
Notes 142Novozymes A/S
Accounts and performance
Governance
Our business
The big picture

Novozymes' responsible sourcing practices are
focused on environmental, social, and
governance issues across our value chain.
Agricultural raw materials are a major component
of our production processes and a responsible
and secure supply of them is crucial to
Novozymes' production.
Our approach
Novozymes’ sourcing department drives our
supplier management and responsible sourcing
program, anchored within Novozymes Operations,
Supply and Quality function. Our approach to

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 screens


meet our assessment criteria, either an action
plan is established, or an alternate supplier is

collaboration platform to engage with suppliers

chain.
Novozymes requires all contracted suppliers to
comply with our RPS, as well as, when requested,
to complete questionnaires and to accept visits

compliance with the standards. These standards
cover various ESG criteria including respect for
human and labor rights, business ethics,
employee health and safety and environmental
stewardship. All our suppliers of directly sourced
agricultural raw materials are required to adhere
to our deforestation requirements by not
contributing to further deforestation and to have
zero tolerance for land grabbing.

Novozymes’ journey towards becoming carbon
neutral, and we continue to focus on our
commitment of securing 100% renewable


2
emissions together with suppliers.
2021 highlights
Novozymes continued to expand the use of the
SEDEX platform to enhance the transparency of



conducted the previous year, for all categories of

regions. This year, we conducted a similar hotspot
analysis with a regional focus on all categories of
indirect sourcing. The results will serve as input to
future responsible sourcing strategies.
During 2021, to advance towards sourcing 100%

progressing on the existing renewable
opportunities and on identifying further


electricity consumption came from renewable



suppliers regarding supply chain emission
reductions.
As a member of the Roundtable on Sustainable
Palm Oil (RSPO), 100% of the palm oil we sourced



having a centrally managed return process for all
plastic bottles used for cleaning and using
doormats made from recycled materials such as


replacing diesel vans with electric vans and
bicycles.
Furthermore, we also completed a Human Rights


assessments in Note 8.1 Labor Practices &
Human Rights.
Social and governance data
Statement of the Board of Directors and
Executive Management
The Board of Directors and the Executive
Management have today considered and
approved the Annual Report of Novozymes A/S
for the financial year January 1 – December 31,
2021.
The Consolidated Financial Statements have
been prepared in accordance with International
Financial Reporting Standards as adopted by the
EU and further requirements in the Danish
Financial Statements Act, and the Parent
Company Financial Statements have been
prepared in accordance with the Danish Financial
Statements Act. Management’s Review has been
prepared in accordance with the Danish Financial
Statements Act.
In our opinion, the accounting policies used are
appropriate, and the Group’s internal controls
relevant to preparation and presentation of the
Annual Report are adequate. The Consolidated
Financial Statements and the Parent Company
Financial Statements give a true and fair view of
the financial position at December 31, 2021 of
the Group and the Parent Company and of the
results of the Group and the Parent Company
operations and consolidated cash flows for the
financial year January 1 – December 31, 2021.
In our opinion, Management’s Review includes a
true and fair account of the development in the
operations and financial circumstances of the
Bagsvaerd, February 1, 2022
Executive Management
Ester Baiget

Lars Green

Board of Directors
Jørgen Buhl Rasmussen

Cornelis (Cees) de Jong

Anne Breum
Heine Dalsgaard Sharon James Anders Hentze Knudsen
Kasim Kutay  Kim Stratton
Mathias Uhlén 
Group and the Parent Company, of the results for
the year, and of the financial position of the
Group and the Parent Company as well as a
description of the most significant risks and
elements of uncertainty facing the Group and the
Parent Company.
Novozymes’ Consolidated environmental data
and the Consolidated social and governance data
and the related notes have been prepared in
accordance with the reporting principles of
materiality, inclusivity, responsiveness and the
accounting policies. In our opinion, they give a
true and fair view of the organisation’s
environmental, social and governance
performance in accordance with these principles.
In our opinion, the Annual Report of Novozymes
A/S for the financial year January 1 - December
31, 2021 identified as NOVOZYMES-2021-12-31.
zip has in all material respects been prepared in
compliance with the ESEF Regulation.
We recommend that the Annual Report be
adopted at the Annual Shareholders’ Meeting.
Accounts and performance
Governance
Our business
The big picture
Statements
143Novozymes A/S
Statements
Independent Auditor’s Reports
To the shareholders of Novozymes A/S
Report on the audit of the
Financial Statements
Opinion
In our opinion, the Consolidated Financial
Statements give a true and fair view of the
Group’s financial position at December 31, 2021
and of the results of the Group’s operations and
cash flows for the financial year January 1 to
December 31, 2021 in accordance with
International Financial Reporting Standards as
adopted by the EU and further requirements in
the Danish Financial Statements Act.
Moreover, in our opinion, the Parent Company
Financial Statements give a true and fair view of
the Parent Company’s financial position at
December 31, 2021 and of the results of the
Parent Company’s operations for the financial
year January 1 to December 31, 2021 in
accordance with the Danish Financial Statements
Act.
In our opinion, the Consolidated environmental
data and the Consolidated social and governance
data for the financial year January 1 to December
31, 2021 are prepared in accordance with the
accounting policies for the Consolidated
environmental data and the Consolidated social
and governance data.
Our opinions are consistent with our Auditor’s
Long-form Report to the Audit Committee and
the Board of Directors.
What we have audited
The Consolidated Financial Statements of
Novozymes A/S, pages 57-65 and 70-120 for the
financial year 1 January to 31 December 2021
comprise the consolidated income statement and
statement of comprehensive income, the
consolidated balance sheet, the consolidated
statement of equity, the consolidated cash flow
statement and the notes, including significant
accounting policies.
The Parent Company Financial Statements of
Novozymes A/S, pages 148-161 for the financial
year January 1 to December 31, 2021 comprise
the income statement, the balance sheet, the
statement of equity and the notes, including
significant accounting policies.
Collectively referred to as the “Financial
Statements”.
The Consolidated environmental data and the
Consolidated social and governance data of
Novozymes A/S, pages 66-69 and 121-142, for
the financial year January 1 to December 31,
2021 comprise the environmental performance
and consolidated data, the social and governance
performance and consolidated data and the
related notes, including significant accounting
policies.
These are collectively referred to as the
“Environmental, Social and Governance Data.”
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (ISAs) and
the additional requirements applicable in
Denmark. Our responsibilities under those
standards and requirements are further
described in the Auditor’s responsibilities for the
audit of the Financial Statements and the
Environmental, Social and Governance Data
section of our report.
We believe that the audit evidence we have
obtained is sucient and appropriate to provide
a basis for our opinion.
Independence
We are independent of the Group in accordance
with the International Ethics Standards Board for
Accountants’ International Code of Ethics for
Professional Accountants (IESBA Code) and the
additional ethical requirements applicable in
Denmark. We have also fulfilled our other ethical
responsibilities in accordance with these
requirements and the IESBA Code.
To the best of our knowledge and belief,
prohibited non-audit services referred to in
Article 5(1) of Regulation (EU) No 537/2014 were
not provided.
Appointment
We were appointed auditors of Novozymes A/S
for the first time aer the initial public oering on
21 March 2001. We have been reappointed
annually by shareholder resolution for a total
period of uninterrupted engagement of 21 years
including the financial year 2021.
Accounts and performance
Governance
Our business
The big picture
Statements
144Novozymes A/S
Key audit matters
Key audit matters are those matters that, in our
professional judgment, were of most significance
in our audit of the Financial Statements for 2021.
These matters were addressed in the context of
our audit of the Financial Statements as a whole,
and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Revenue recognition
Novozymes has entered into various sales agreements that are subject to interpretation, which
increases the inherent complexity of revenue recognition. Additionally, the volume of transactions and
geographical spread of the Group’s operations increase complexity, including in respect of occurrence
and timing of revenue.
We focus on this area because of the significance to the Consolidated Financial Statements, as well as
the inherent complexity in both application of revenue recognition and individual sales agreements.
Refer to Note 2.2 the Consolidated Financial Statements.
We considered the appropriateness of the Group’s accounting policies for revenue recognition and
assessed compliance with applicable accounting standards.
We assessed applicable information systems and tested relevant controls and monitoring controls
implemented to ensure the occurrence and timing of revenue recognised.
We discussed the judgements related to the recognition and classification of revenue with
Management.
We performed substantive procedures regarding returns, delivery terms and rebates in order to assess
the principles applied for occurrence and timing of revenue.
We applied data analysis in our testing of revenue transactions in order to identify and test
transactions outside the ordinary transaction flow.
Finally, we assessed the adequacy of disclosures relating to the revenue recognition.
Acquisitions and Purchase price allocation
In 2021, Novozymes entered into agreements to acquire Microbiome Labs and Synergia Life Sciences
Pvt. Ltd. Acquisitions are non-standard and complex transactions, which are subject to significant
estimates, including valuation of assets, liabilities, contingent consideration and share purchase
liability.
We focus on this area because of the significant impact on the Consolidated Financial Statement
including the fair value assessment of assets and liabilities in the purchase price allocation, which are
subject to Management's judgment and assumptions.
Refer to Note 3.5 and 3.6 to the Consolidated Financial Statements.
Our audit procedures included assessing whether the acquisitions met the criteria of a business
combination.
We assessed and challenged the purchase price in relation to the assumptions applied for the
valuation, including the share purchase liability.
We verified the assets and liabilities recognised in the opening balance sheet by performing audit
procedures in relation to the opening balance.
We tested the Purchase Price Allocation of the acquisitions prepared by Management.
We discussed the Purchase Price Allocation including identification of assets and liabilities with
Management and challenged the key assumptions used to determine the fair value of the acquired
assets and liabilities in the business combinations.
We involved our valuation specialists in assessing the valuation methodologies used by Management
and the fair value of the acquired assets and liabilities.
Finally, we assessed the adequacy of disclosures relating to the business combination.
Accounts and performance
Governance
Our business
The big picture
Statements
145Novozymes A/S
Statement on Management’s Review
Management is responsible for Management’s
Review, pages 3-56 and 162.
Our opinion on the Financial Statements and on
the Environmental, Social and Governance Data
does not cover Management’s Review, and we do
not express any form of assurance conclusion
thereon.
In connection with our audit of the Financial
Statements, our responsibility is to read
Management’s Review and, in doing so, consider
whether Management’s Review is materially
inconsistent with the Financial Statements or our
knowledge obtained in the audit, or otherwise
appears to be materially misstated.
Moreover, we considered whether Management’s
Review includes the disclosures required by the
Danish Financial Statements Act.
Based on the work we have performed, in our
view, Management’s Review is in accordance with
the Consolidated Financial Statements, the
Parent Company Financial Statements and the
Environmental, Social and Governance Data and
has been prepared in accordance with the
requirements of the Danish Financial Statements
Act. We did not identify any material
misstatement in Management’s Review.
Management’s responsibilities for the Financial
Statements and the Environmental, Social and
Governance Data
Management is responsible for the preparation of
consolidated financial statements that give a true
and fair view in accordance with International
Financial Reporting Standards as adopted by the
EU and further requirements in the Danish
Financial Statements Act and for the preparation
of parent company financial statements that give
a true and fair view in accordance with the Danish
Financial Statements Act, and for such internal
control as Management determines is necessary
to enable the preparation of financial statements
that are free from material misstatement, whether
due to fraud or error.
Furthermore, Management is responsible for
preparing the Environmental, Social and
Governance Data in accordance with the
accounting policies for the Environmental, Social
and Governance Data, and for such internal
control as Management determines is necessary
to enable the preparation of Environmental,
Social and Governance Data that are free from
material misstatement, whether due to fraud or
error.
In preparing the Financial Statements,
Management is responsible for assessing the
Group’s and the Parent Company’s ability to
continue as a going concern, disclosing, as
applicable, matters related to going concern and
using the going concern basis of accounting
unless Management either intends to liquidate
the Group or the Parent Company or to cease
operations, or has no realistic alternative but to
do so.
Auditor’s responsibilities for the audit of the
Financial Statements and the Environmental,
Social and Governance Data
Our objectives are to obtain reasonable assurance
about whether the Financial Statements and the
Environmental, Social and Governance Data as a
whole are free from material misstatement,
whether due to fraud or error, and to issue an
auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in
accordance with ISAs and the additional
requirements applicable in Denmark will always
detect a material misstatement when it exists.
Misstatements can arise from fraud or error and
are considered material if, individually or in the
aggregate, they could reasonably be expected to
influence the economic decisions of users taken
on the basis of these Financial Statements and
the Environmental, Social and Governance Data.
As part of an audit in accordance with ISAs and
the additional requirements applicable in
Denmark, we exercise professional judgment and
maintain professional scepticism throughout the
audit. We also:
• Identify and assess the risks of material
misstatement of the Financial Statements and
the Environmental, Social and Governance
Data, whether due to fraud or error, design
and perform audit procedures responsive to
those risks, and obtain audit evidence that is
sucient and appropriate to provide a basis
for our opinion. The risk of not detecting a
material misstatement resulting from fraud is
higher than for one resulting from error, as
fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or
the override of internal control.
• Obtain an understanding of internal control
relevant to the audit in order to design audit
procedures that are appropriate in the
circumstances, but not for the purpose of
expressing an opinion on the eectiveness of
the Group’s and the Parent Company’s internal
control.
• Evaluate the appropriateness of accounting
policies used and the reasonableness of
accounting estimates and related disclosures
made by Management.
• Conclude on the appropriateness of
Management’s use of the going concern basis
of accounting and based on the audit evidence
obtained, whether a material uncertainty
exists related to events or conditions that may
cast significant doubt on the Group’s and the
Parent Company’s ability to continue as a
going concern. If we conclude that a material
uncertainty exists, we are required to draw
attention in our auditor’s report to the related
disclosures in the Financial Statements or, if
such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the
audit evidence obtained up to the date of our
auditor’s report. However, future events or
conditions may cause the Group or the Parent
Company to cease to continue as a going
concern.
Accounts and performance
Governance
Our business
The big picture
Statements
146Novozymes A/S
• Evaluate the overall presentation, structure
and content of the Financial Statements,
including the disclosures, and whether the
Financial Statements represent the underlying
transactions and events in a manner that gives
a true and fair view.
• Obtain sucient appropriate audit evidence
regarding the financial information,
environmental, social and governance of the
entities or business activities within the Group
to express an opinion on the Consolidated
Financial Statements and the Environmental,
Social and Governance Data. We are
responsible for the direction, supervision and
performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with
governance regarding, among other matters, the
planned scope and timing of the audit and
significant audit findings, including any
significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance
with a statement that we have complied with
relevant ethical requirements regarding
independence, and to communicate with them all
relationships and other matters that may
reasonably be thought to bear on our
independence and, where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with those
charged with governance, we determine those
matters that were of most significance in the
audit of the Financial Statements of the current
period and are therefore the key audit matters.
We describe these matters in our auditor’s report
unless law or regulation precludes public
disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter
should not be communicated in our report
because the adverse consequences of doing so
would reasonably be expected to outweigh the
public interest benefits of such communication.
Report on compliance
with the ESEF Regulation
As part of our audit of the Financial Statements
we performed procedures to express an opinion
on whether the annual report of Novozymes A/S
for the financial year January 1 to December 31,
2021 with the filename NOVOZYMES-2021-12-31.
zip is prepared, in all material respects, in
compliance with the Commission Delegated
Regulation (EU) 2019/815 on the European Single
Electronic Format (ESEF Regulation) which
includes requirements related to the preparation
of the annual report in XHTML format and iXBRL
tagging of the Consolidated Financial Statements.
Management is responsible for preparing an
annual report that complies with the ESEF
Regulation. This responsibility includes:
• The preparing of the annual report in XHTML
format;
• The selection and application of appropriate
iXBRL tags, including extensions to the ESEF
taxonomy and the anchoring thereof to
elements in the taxonomy, for all financial
information required to be tagged using
judgment where necessary;
• Ensuring consistency between iXBRL tagged
data and the Consolidated Financial Statements
presented in human-readable format; and
• For such internal control as Management
determines necessary to enable the
preparation of an annual report that is
compliant with the ESEF Regulation.
Our responsibility is to obtain reasonable
assurance on whether the annual report is
prepared, in all material respects, in compliance
with the ESEF Regulation based on the evidence
we have obtained, and to issue a report that
includes our opinion. The nature, timing and extent
of procedures selected depend on the auditor’s
judgment, including the assessment of the risks of
material departures from the requirements set out
in the ESEF Regulation, whether due to fraud or
error. The procedures include:
• Testing whether the annual report is prepared
in XHTML format;
• Obtaining an understanding of the company’s
iXBRL tagging process and of internal control
over the tagging process;
• Evaluating the completeness of the iXBRL
tagging of the Consolidated Financial
Statements;
• Evaluating the appropriateness of the
company’s use of iXBRL elements selected
from the ESEF taxonomy and the creation of
extension elements where no suitable element
in the ESEF taxonomy has been identified;
• Evaluating the use of anchoring of extension
elements to elements in the ESEF taxonomy;
and
• Reconciling the iXBRL tagged data with the
audited Consolidated Financial Statements.
In our opinion, the annual report of Novozymes
A/S for the financial year January 1 to December
31, 2021 with the file name
NOVOZYMES-2021-12-31.zip is prepared, in all
material respects, in compliance with the ESEF
Regulation.
Hellerup, February 1, 2022



Lars Baungaard
State Authorized Public Accountant

Michael Groth Hansen
State Authorized Public Accountant

Accounts and performance
Governance
Our business
The big picture
Statements
147Novozymes A/S

1
Basis of reporting
1.1 Accounting policies
2
Primary operations
2.1 Revenue
2.2 Employee costs

3









4
Financial activities
4.1 Financial income and costs



5
Other notes

pending litigation
5.2 Related party transactions


5.5 Derivatives

Financial statements
Income statement
Balance sheet
Statement of equity
Financial statements for Novozymes A/S 148Novozymes A/S
Accounts and performance
Governance
Our business
The big picture
Financial statements for Novozymes A/S
Income statement
DKK million Note  
Revenue . , ,
 (,) (,)
 , ,
Sales and distribution costs (,) (,)
Research and development costs (,) (,)
Administrative costs () ()
Other operating income, net . , ,
 , ,
 .  
Share of result in associates . () ()
Financial income .  
Financial costs . () ()
 , ,
Tax () ()
 , ,

Dividend to shareholders , ,
Revaluation reserve according to the equity method , ,
Retained earnings () ()
. , ,
Proposed dividend per share, DKK . .

Accounts and performance
Governance
Our business
The big picture
Financial statements for Novozymes A/S
149Novozymes A/S

Assets
DKK million Note Dec. ,  Dec. , 
 . , ,
Property, plant and equipment . , ,
 . , ,
 .  
 .
Receivables from Group enterprises .  
 , ,
Fixed assets , ,
Raw materials and consumables  
  
Finished goods  
Inventories , ,
Trade receivables , ,
Receivables from Group enterprises  -
Tax receivables  
Other receivables .  
 , ,
  
Current assets , ,
Assets , ,

DKK million Note Dec. ,  Dec. , 
  
 (,) (,)
Revaluation reserve according to the equity method , 
Reserve for development costs  
 () 
Retained earnings , ,
Proposed dividend , ,
Total equity , ,
Provisions for deferred tax .  
Other provisions .  
Provisions  
Lease liabilities  
 , ,
Payables for Group enterprises .  -
 , ,
Lease liabilities  
 , ,
Transitional holiday accrual - 
Trade payables  
Payables for Group enterprises , ,
Other liabilities  
 , ,
 , ,
 , ,
Accounts and performance
Governance
Our business
The big picture
Financial statements for Novozymes A/S
150Novozymes A/S

DKK million
Common
stock
Treasury
stock
Revaluation
reserve accord-
ing to the equity
method
Reserve for
development
costs
Cash flow
hedges
Retained
earnings
Proposed
dividend
Total
  (,)    , , ,
 , , ,
  () -
Dividend received (,) , -
Dividend paid (,) (,)
  () -
Proposed dividend (,) , -
 (,) (,)
  
 () , (,) -
  - 
Fair value adjustments () ()
Other adjustments  

B/S
 (,) ,  () , , ,
Accounts and performance
Governance
Our business
The big picture
Financial statements for Novozymes A/S
151Novozymes A/S

been prepared in accordance with the Danish
Financial Statements Act (accounting class D).
The accounting policies are unchanged from 2020.
The accounting policies are consistent with those

except as described below. For a description of
the Group’s accounting policies, please refer to




Recognition and measurement in general

earned.
All costs incurred in generating the year’s revenue
are also recognized in the income statement,
including depreciation, amortization and
impairment losses.

liabilities 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

the asset can be measured reliably. Liabilities are
recognized in the balance sheet when they are
considered probable and can be measured
reliably. At initial recognition, assets and
liabilities are measured at cost. Assets and
liabilities are subsequently measured as
described below for each item.




prevailing at the reporting date.


follow those of the Group with the exception of
goodwill, which is amortized over a period of 10

An amount equal to the total capitalized

Equity in Reserve for development costs.
Financial assets

associates are recognized initially at cost and
subsequently measured using the equity method.
The company’s share of the equity of subsidiaries,

assets at the acquisition date, less or plus

the addition of any residual value of goodwill, is



associates is negative and Novozymes A/S has a
legal or constructive obligation to cover the
company’s negative equity, a provision is
recognized.
Net revaluation of investments in subsidiaries
and associates is recognized under Equity in the
Revaluation reserve according to the equity
method. The reserve is reduced by payments of
dividends to the parent company and adjusted to

subsidiaries.

subsidiaries less goodwill amortization is

subsidiaries in the income statement. Goodwill in
subsidiaries is amortized over a period of 10

Share purchase liabilities are obligations to invest
in subsidiaries and are disclosed as a contractual
obligation. The derivative embedded in the share
purchase obligation is measured at fair value
through the income statement.
Dividend

shown as a separate item under Equity.




1.1 Accounting policies
Note section 1
Accounts and performance
Governance
Our business
The big picture
Financial statements for Novozymes A/S
152Novozymes A/S
2.1 Revenue
2.2 Employee costs
DKK million  
Geographical distribution:
  
Rest of Europe, Middle East & Africa , ,
North America , ,
Latin America  
 , ,
Revenue
I/S
, ,
DKK million  
Wages and salaries , ,
  
Other social security costs  
Other employee costs  
Employee costs , ,
Average number of employees in Novozymes A/S , ,

DKK million  
Royalty income relating to subsidiaries , ,
Sale of intellectual property license  -
Net gain from divestment of building held for sale  -
Other operating income 
Other operating income
I/S
, ,
Note section 2

Employee costs in 2020 included severance costs
of DKK 80 million related to organizational
changes, of which DKK 65 million was related to
changes to the Executive Leadership Team.
Reference is made to Note 6.1 to the

remuneration of the Board of Directors and the
Executive Leadership Team.
2.2 Employee costs (continued)
Accounts and performance
Governance
Our business
The big picture
Financial statements for Novozymes A/S
153Novozymes A/S

 
DKK million Goodwill
Acquired patents,
licenses and
know-how, etc.
Completed
IT development
projects
IT development
projects in
progress Total Total
 , ,   , ,
Additions during the year ,    , ,
Disposals during the year - - - - - ()
Transfers to/(from) other items - -  () - -
 , ,   , ,
 () (,) () (,) (,)
Amortization for the year () () () () ()
 - () - () -
Disposals during the year - - - -
 (,) (,) () (,) (,)

B/S
, ,   , ,

Impairment



loss has been recognized in Research and
development costs.
Accounts and performance
Governance
Our business
The big picture
Financial statements for Novozymes A/S
154Novozymes A/S

 
DKK million
Land and
buildings
Production
equipment and
machinery
Other
equipment
Property,
plant and
equipment under
construction Total Total
 , , ,  , ,
Additions during the year      
Disposals during the year () () () - () ()
Transfers to/(from) other items    () - -
 , , ,  , ,
 (,) (,) () (,) (,)
Depreciation for the year () () () () ()
 () - - () -
Disposals during the year    
 (,) (,) () (,) (,)

B/S
, ,   , ,
Capitalized interest

Additions during the year (2020: no interest

Land and buildings with an aggregate carrying

million) had been pledged as security to credit
institutions in respect of mortgage loans expiring




property, plant and equipment amounted to DKK
84 million (2020: DKK 129 million).
Impairment


goods sold (2020: no impairment).
Accounts and performance
Governance
Our business
The big picture
Financial statements for Novozymes A/S
155Novozymes A/S
3.3 Leases
DKK million  
Land and buildings  
Plant and machinery  
Other equipment  
Carrying amount of lease assets  

DKK million  

Less than 1 year  
Between 1 and 5 years  
More than 5 years  
  
DKK million  


Depreciation of lease assets per asset class
Land and buildings  
Plant and machinery
Other equipment  
Depreciation of lease assets  
  
Additions to the lease assets during 2021 amounted to DKK 76 million (2020: DKK 9 million).

Accounts and performance
Governance
Our business
The big picture
Financial statements for Novozymes A/S
156Novozymes A/S

DKK million
Investments
in
subsidiaries
Investments
in
associates
Receivables
from Group
companies Total
 ,   ,
Additions during the year , -  ,
Disposals during the year - - () ()
 ,   ,
 (,) () (,)
 , () ,
 () - ()
Dividends received (,) - (,)
  - 
Other adjustments -
 (,) () (,)

B/S
,   ,



transfers.
The carrying amount on investments in


Reference is made to Note 6.9 to the

investments in subsidiaries, joint operations and
associates.
Novozymes A/S has a contingent liability to
purchase the remaining 40% of the shares in
Synergia Life Sciences in 2025. Reference is made



DKK million  
Prepaid expenses  
Derivatives  
Other receivables  
  
Recognized in the balance sheet as follows:

B/S

B/S
 
  

Accounts and performance
Governance
Our business
The big picture
Financial statements for Novozymes A/S
157Novozymes A/S
3.6 Deferred tax
DKK million  
 () ()
  ()
Tax related to the income statement () ()
Tax on equity items  ()

B/S
() ()
Deferred tax assets
Deferred tax liabilities
DKK million    
 - - () ()
Property, plant and equipment - - () ()
 - - () ()
   - -
Other  - - ()
  () ()
 () ()  

B/S
- - () ()
3.7 Other provisions
Other provisions include contingent consideration
related to the acquisition of PrecisionBiotics
Group.



information related to PrecisionBiotics Group
applying to Novozymes A/S are identical to the
information provided there.



relates to an internal transfer of assets from
Microbiome Labs.



the most probable sales in 2022 discounted at a
rate of 8%. Fair value adjustment of DKK 62
million is recognized as Financial income.
Accounts and performance
Governance
Our business
The big picture
Financial statements for Novozymes A/S
158Novozymes A/S
4.1 Financial income
and costs

and pending litigation4.2 Credit institutions
4.3 Proposed appropriation

DKK million  

Dividend to shareholders , ,
Revaluation reserve according to the equity method , ,
Retained earnings () ()
 , ,
DKK million  
Other guarantees
Other guarantees and commitments to related
companies  
Other guarantees and commitments  
DKK million  
 , ,



pending litigation and arbitration.
Note section 4
Note section 5


property, plant and equipment is described in

DKK million  
  
Fair value adjustment of payables relating to subsidiaries  -
  
Financial income  
 () ()
 () ()
Financial costs () ()
I/S
I/S
Accounts and performance
Governance
Our business
The big picture
Financial statements for Novozymes A/S
159Novozymes A/S
5.2 Related party transactions
Transactions
DKK million  

Sales
Dividend payment to Novo Holdings A/S  

Sales  
Purchases () ()
The NNIT Group
Purchases () ()
The Chr. Hansen Group
Sales  
Purchases - ()

Purchases () ()

DKK million  

Receivables 
Payables () ()
The NNIT Group
Payables () ()
The Chr. Hansen Group
Receivables -

Payables () ()

Holdings A/S 765,000 of its own B shares with
the approval of the Board of Directors, at a price



There were no transactions with the related
parties other than the transactions described and
normal remuneration of the Board of Directors
and Executive Leadership Team, which is
presented in Note 6.1 in the consolidated

Reference is made to Note 6.4 to the

transactions with related parties.
Novozymes A/S is included in the consolidated

Note section 5
Accounts and performance
Governance
Our business
The big picture
Financial statements for Novozymes A/S
160Novozymes A/S
5.3 Fees to statutory auditors


5.5 Derivatives

DKK million  
Statutory audit
Other assurance engagements - -
Tax advisory services
Other services -
Fees to statutory auditors
Reference is made to Note 6.6 to the consolidated

auditors.
Reference is made to Note 5.5 to the consolidated


Reference is made to Note 5.4 to the consolidated


Novozymes A/S are identical to the information
provided there.
Reference is made to Note 6.8 to the consolidated

reporting date.
Note section 5
Accounts and performance
Governance
Our business
The big picture
Financial statements for Novozymes A/S
161Novozymes A/S
Financial terms
Earnings per share (diluted)

shareholders of Novozymes A/S)
divided by the weighted average
number of shares outstanding
(diluted).


EBIT margin

percentage of revenue.
EBITDA

depreciation and amortization.
EBITDA margin

depreciation and amortization as a
percentage of revenue.








Equity ratio
Total equity as a percentage of total
assets at year end.




capital, business acquisitions,
divestments and purchase of

Invested capital

bearing assets and minority

liabilities.
iXBRL tags

information embedded in the
source code of an XHTML document




readable XBRL data record by





and in hand and other readily

assets.



percentage of last 12 months’



used in, or necessary for, the
company’s operations. The main
components are inventories, trade
receivables and trade payables.
Adjusted operating


exchange gains/ losses, share of



Operating costs
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 is
included in the calculation.
Return on equity

shareholders' of Novozymes A/S as
a percentage of average Equity
attributable to shareholders' of
Novozymes A/S.
Return on invested capital (ROIC)


a percentage of average invested
capital
iXBRL Taxonomy
Taxonomy is an electronic dictionary
of business reporting elements used
to report business data. A
taxonomy element is an element


of information in an XBRL data
record.
XHTML
XHTML (eXtensible HyperText




documents that are displayed as
Web pages in an updated standard


Other terms
CO
2

2
” is used to represent

2

4
,
N
2
O etc.) on an equivalency basis in
this report.
Climate neutral and Net Zero
Emissions


neutrality as a state in which human

the climate system. Net zero
emissions are achieved when
anthropogenic emissions of
greenhouse gases to the
atmosphere are balanced by
anthropogenic removals over a

the state of net zero emissions
covers both our operations and
value chain.
Scope 3
The Greenhouse Gas Protocol

indirect emissions (not included in
scope 2) that occur in the value
chain of the reporting company,
including both upstream and
downstream emissions. For


(Purchased goods and services),

related activities (not included in

transportation and distribution) and






weight) of hazardous and
nonhazardous waste is either
composted, reused, recycled or
incinerated with energy recovery.
Accounts and performance
Governance
Our business
The big picture
Management Review
162Novozymes A/S
Glossary Management Review
Editorial team
Editor in chief
Ann Lauritzen Steel

Ulla Matthiesen
[email protected]

Finance

[email protected]

Investor Relations

[email protected]


Taís Pinheiro
[email protected]

Neha Ganesh
[email protected]

Text
The editorial team from Novozymes,

& Brand
Photography

Ty Stange and Mads Armgaard

BystedFFW A/S


Project management

Reporting and audits

version of The Novozymes Report
2021 as well as the XHTML version
submitted to the Danish Financial
Supervisory Authority.

Management's Review, including
the sections of the report under the
headings: The big picture, Our
business and Governance.

environmental, social and
governance data. See also the
statement in the report.
The report has been prepared in

Financial Reporting Standards

requirements in the Danish
Financial Statements Act and
additional requirements of Nasdaq







in the report for more details.

The Novozymes Report contains

including statements about future

performance, plans, strategies and

statements are associated with
words such as, but not limited to,
“believe,” “anticipate,” “expect,”
“estimate,” “intend,” “plan,”
“project,” “could,” “may,” “might”
and other words with a similar
meaning

their very nature associated with


materially from expectations, both
positively and negatively. These

unexpected developments in i) the



driven price decreases, industry
consolidation, and launches of
competing products or disruptive
technologies in Novozymes’ core

enforce the company’s intellectual


the materialization of the
company’s growth platforms,
notably the opportunity for

technologies or the development of


as acceptance of enzymes produced

vii) global economic and capital

not limited to, currency exchange
rates (USD/DKK and EUR/DKK in
particular, but not exclusively),


inputs and materials that compete
with Novozymes’ biological



future developments or new
information.
Novozymes’ reporting ambition is to provide a
single integrated report connecting our business
model, strategy, targets and performance through

Accounts and performance
Governance
Our business
The big picture
About the report
163Novozymes A/S
About the report
Explore interactive
highlights from the report at
report2021.novozymes.com
© Novozymes A/S, Krogshoejvej 36
2880 Bagsvaerd, Denmark
CVR 10007127
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