Novozymes A/S CVR number: 10 00 71 27 LEI: 529900T6WNZXD2R3JW38
Q1 2021
Stronger-than-expected start to the year; 3% organic sales growth and strong earnings.
2021 outlook maintained.
Organic sales growth of 3% in Q1 2021: Household Care 2%, Food, Beverages & Human Health 11%, Bioenergy
-9%, Grain & Tech Processing 16%, Agriculture, Animal Health & Nutrition 0%. EBIT margin at 29.6%. ROIC incl.
goodwill at 23.4%. FCF bef. acq. at DKK 0.7 billion.
Ester Baiget, President & CEO: "I am very pleased with the strong start we’ve had in a year where the COVID-19
pandemic continues to create an uncertain environment. Customers have been building stock from supply-chain
concerns and the recovery seem faster in emerging markets, but we also recognize a better momentum in the
underlying performance of some businesses. While we are off to a good start, we maintain our full-year outlook
due to timing factors, supply-chain volatility and continued COVID-19 uncertainty. I am sincerely impressed by
the organization’s ability to rapidly adapt to changing conditions and being there to serve our customers.”
In summary:
• Organic sales grew 3% while sales in reported DKK ended flat from positive M&A impact in line with
expectations, and negative currency effects. Organic sales in emerging markets grew 17% and declined 3%
in developed markets
• Household Care benefitted from customer stock building, especially in emerging markets, as well as a
recovery in China
• Performance in Food, Beverages & Human Health and Grain & Tech Processing benefitted from customer
stock building, a faster recovery in emerging markets as well as a better underlying momentum
• Bioenergy remained negatively affected by weak U.S. ethanol demand due to COVID-19 restrictions.
Agriculture, Animal Health & Nutrition performed better than expected due to timing of orders with
growth in Agriculture offsetting a decline in Animal Health & Nutrition
• Three product launches including ProAct 360™ in animal nutrition, making poultry production more cost-
efficient and sustainable
• EBIT margin of 29.6%, mainly due to gross margin expansion and despite higher R&D costs, currency
headwinds and negative M&A-related effects. One-offs had a net positive effect of roughly 1.5 pp. Free
cash flow before acquisitions was solid at DKK 0.7 billion and ROIC including goodwill was strong at 23.4%
• Strong balance sheet with low gearing (0.9x NIBD/EBITDA). The Microbiome Labs acquisition was closed
and the Biota technology asset was purchased. DKK 1.5 billion stock buy back program is ongoing
• Amy Byrick and Morten Enggaard Rasmussen joined the executive leadership team on April 1 as new EVPs
of Strategy & Business Transformation and People, Sustainability & Brand, respectively
2021 outlook: The improved underlying momentum seen for some businesses in the first quarter does not
change the full-year sales outlook due to timing factors, supply-chain volatility and continued COVID-19-related
uncertainty. Organic sales are expected to grow by 2% to 6%, with sales in reported DKK ~1 pp lower. One-offs,
net, benefit the EBIT margin outlook slightly, supporting the maintained 25% to 26% range. The margin outlook
also includes negative y/y impacts from currency, as well as M&A-related effects of around 1 pp each. ROIC incl.
goodwill at ~19%. FCF bef. acq. at DKK 2.7-3.1 billion.
Q1 2021
Q1 2020
2021 outlook
Sales performance, organic
%
3
10
2 to 6
EBIT margin
%
29.6
28.9
25 to 26
ROIC, incl. goodwill
%
23.4
21.3
~19
Free cash flow before acquisitions
DKKbn
0.7
0.8
2.7 to 3.1
April 27, 2021
Interim report for Q1 2021.
Company announcement
no. 21
Novozymes A/S
Krogshoejvej 36
2880 Bagsvaerd
Denmark
Phone: +45 4446 0000
Interim report for Q1 2021. Company announcement No. 21
2/25
Selected key data
Q1 2021
Q1 2020
Sales performance, organic
%
3
10
Household Care
%
2
11
Food, Beverages & Human Health
%
11
11
Bioenergy
%
-9
12
Grain & Tech Processing
%
16
2
Agriculture, Animal Health & Nutrition
%
0
8
Sales
DKKm
3,776
3,786
Sales performance, DKK
%
0
9
Gross margin
%
58.2
57.1
EBITDA
DKKm
1,457
1,394
EBIT
DKKm
1,117
1,095
EBIT margin
%
29.6
28.9
Net profit
DKKm
885
815
Net profit performance
%
9
17
Net investments excl. acquisitions
DKKm
194
138
Free cash flow before acquisitions
DKKm
704
825
NIBD/EBITDA (x)
0.9
0.9
ROIC, incl. goodwill
%
23.4
21.3
EPS
DKK
3.17
2.89
EPS (diluted)
DKK
3.15
2.88
Avg. USD/DKK
617
678
Interim report for Q1 2021. Company announcement No. 21
3/25
Sales by business area
Distribution of sales by business area, Q1 2021
Household Care
Performance in Household Care exceeded expectations. Sales grew 2% organically and declined 2% in reported
DKK in the first quarter of 2021. While penetration in emerging markets and the continued rollout of the
Freshness technology in Europe contributed to growth as expected, an element of customer stock building,
especially in emerging markets, and a faster recovery in China also benefitted sales. Sales in developed markets
declined roughly as expected compared to the double-digit organic sales growth recorded in the first quarter
of last year.
Food, Beverages & Human Health
Sales in Food, Beverages & Human Health grew 11% organically and 17% in reported DKK in the first quarter of
2021. The performance was strong and significantly exceeded expectations, mainly due to customer stock
building and a faster recovery, particularly in emerging markets. The first quarter performance also benefitted
from a better underlying momentum.
All subareas grew, apart from an expected decline in baking. Outside of baking, food performed very well led
by especially dairy and protein ingredients. Beverages grew slightly, whereas sales in human health posted
strong growth driven by innovation, cross-selling and customer stock building.
Bioenergy
First-quarter sales in Bioenergy declined 9% organically and 18% in reported DKK year on year. The performance
in the quarter was due to the negative effects of COVID-19 restrictions leading to reduced demand for gasoline
and thereby for ethanol in the U.S. Although U.S. ethanol production remains depressed, it has gradually
improved since the major disruption caused by the first round of COVID-19 restrictions in the final weeks of
March last year. Performance in Novozymes’ U.S Bioenergy business was lower than external first-quarter
estimates for the industry’s production decline due to a more difficult comparator. Sales outside of the U.S
grew, mainly driven by Latin America, from the continued capacity expansion of corn-based ethanol production
and market penetration with the Innova® yeast solutions.
Grain & Tech Processing
Grain & Tech Processing sales grew 16% organically and 9% in reported DKK in the first quarter compared to
the same quarter last year. This was significantly above expectations and across most subareas driven by growth
from customer stock building, a faster recovery, especially in emerging markets, as well as a better momentum
in underlying performance. Strong growth in grain was driven by grain milling, vegetable oil and starch
processing. Tech grew from positive timing factors in the sales of diagnostic enzymes for COVID-19 test kits and
growth in textile, which benefitted from the continued recovery of the global textile industry following the
COVID-19-induced disruption in 2020.
33%
23%
15%
16%
13%
Household Care
Food, Beverages & Human Health
Bioenergy
Grain & Tech Processing
Agriculture, Animal Health & Nutrition
Organic performance / Performance in DKK
0% / -5%
2% / -2%
16% / 9%
11% / 17%
-9% / -18%
Total sales Q1 y/y
Organic: 3%
DKK: 0%
Household Care Q1 y/y
Organic: 2%
DKK: -2%
Food, Beverages & Human Health
Q1 y/y
Organic: 11%
DKK: 17%
Bioenergy Q1 y/y
Organic: -9%
DKK: -18%
Grain & Tech Processing Q1 y/y
Organic: 16%
DKK: 9%
Interim report for Q1 2021. Company announcement No. 21
4/25
Agriculture, Animal Health & Nutrition
Sales in Agriculture, Animal Health & Nutrition were flat organically and declined 5% in reported DKK in the first
quarter of the year compared to the same period last year. Performance was stronger than expected due to
timing of orders in the value-chain. Growth in agriculture was led by stronger demand for both corn and soy
solutions, whereas animal health & nutrition declined, although by less than expected. Balancius™, the
enzymatic solution for improved gut health, grew, as expected.
Sales by geography
Distribution of sales by geography, Q1 2021
Novozymes' organic sales grew 3% in the first quarter of 2021 compared to 2020. Sales in emerging markets
grew 17% organically while developed markets declined 3%. The strong performance in emerging markets with
broad growth across business areas exceeded expectations mainly due to customer stock building, a faster
recovery and an better underlying momentum in some businesses. Sales in developed markets declined mainly
due to Bioenergy and Animal Nutrition.
Europe, the Middle East & Africa
First quarter sales were flat organically year on year. Growth in Food, Beverages & Human Health, Bioenergy
and Household Care was offset by a decline in Agriculture, Animal Health & Nutrition and Grain & Tech
Processing. Growth in Food, Beverages & Human Health was impacted by customer stock building, a faster
recovery, and a better momentum in underlying performance. Agriculture, Animal Health & Nutrition declined
as expected.
North America
North America declined 4% in the first quarter of 2021. The decline was due to the severe effects of COVID-19
restrictions on U.S. ethanol production. The decline was partly mitigated by growth in Grain & Tech Processing
which was supported by positive timing in the sales of diagnostic enzymes for COVID-19 test kits. Agriculture,
Animal Health & Nutrition and Food, Beverages & Human Health also grew.
Asia Pacific
Organic sales grew 16% in the first quarter of 2021 compared to the same period last year. Customer stock
building, a faster recovery particularly in China, and better momentum in underlying performance were the
primary drivers. Also, the textile business performed well, driven by a gradual recovery in textile production.
Latin America
Sales in Latin America grew 21% organically in the first quarter of 2021 compared to the same period last year.
Growth was broad across business areas and benefitted from customer stock building and a faster recovery,
especially in Grain & Tech Processing. The continued capacity expansion of corn-based ethanol production,
primarily in Brazil, was a solid growth driver in the quarter.
38%
31%
21%
10%
Europe, the Middle East & Africa
North America
Asia Pacific
Latin America
Agriculture, Animal Health &
Nutrition Q1 y/y
Organic: 0%
DKK: -5%
Europe, the Middle East & Africa
Q1 y/y
Organic: 0%
DKK: 0%
North America Q1 y/y
Organic: -4%
DKK: -8%
Asia Pacific Q1 y/y
Organic: 16%
DKK: 11%
Latin America Q1 y/y
Organic: 21%
DKK: 2%
21% / 2%
Organic performance / Performance in DKK
0% / 0%
16% / 11%
-4% / -8%
Interim report for Q1 2021. Company announcement No. 21
5/25
Income statement
Total costs excluding net other operating income, net financials, share of losses in associates and taxes
amounted to DKK 2,780 million in the first quarter of 2021. This was DKK 66 million (+2%) more than in the
corresponding period of 2020.
The gross margin was 58.2% in the first quarter of 2021, corresponding to an increase of 1.1 percentage point
compared to the same period of 2020. Production efficiencies and productivity improvements were the main
drivers of the margin improvement between the two periods. Currencies had a negative effect, whereas recent
acquisitions benefitted the gross margin in the first quarter of 2021.
Operating costs totaled DKK 1,200 million in the first three months of 2021. This was an increase of DKK 112
million (+10%) compared to the same period of 2020. The increase in operating costs was mainly due a one-off
charge following a consolidation of R&D activities to fewer and larger sites, and the inclusion of acquisitions.
Sales and distribution costs increased slightly and administrative costs were flat compared to the same period
last year.
For the first quarter of 2021:
• Sales and distribution costs increased by 2% and made up 12% of sales
• Research and development costs increased by 22% mainly due to the aforementioned one-off, and
made up 15% of sales
• Administrative costs were flat and made up 5% of sales
Other operating income amounted to DKK 121 million in the first quarter of 2021, which was DKK 98 million
higher than in the first quarter of 2020. The increase in other operating income was partly due to a realized gain
from the sale of an non-core administration building and partly due to contingent income from the divested
pharma-related royalty.
Depreciation and amortization amounted to DKK 340 million in the first three months of 2021. This was 14%
higher than in the corresponding period of 2020 and mainly due to amortizations from the PrecisionBiotics
Group and the Microbiome Labs acquisitions.
EBIT was DKK 1,117 million in the first three months of 2021, which corresponded to an EBIT margin of 29.6%.
This was an increase of DKK 22 million, or 0.7 percentage point, compared to the EBIT and EBIT margin for the
same period of 2020. While sales in reported DKK were roughly flat, higher operating costs mainly due to the
aforementioned R&D one-off, and the inclusion of acquisitions, were more than offset by higher gross profit
and higher other operating income. Currencies provided headwinds, mainly from a weakening of the average
USD/DKK exchange rate. Adjusting for the quarterly one-off benefits, net, of roughly 1.5 percentage point, as
well as first quarter year-on-year currency developments and M&A-related effects, the EBIT margin in the first
quarter of 2021 was ~29%.
Net financial costs and share of losses in associates totaled DKK 11 million in the first quarter of 2021. This was
DKK 65 million less than in the first quarter of 2020 and mainly due to gains on USD cash flow hedges.
Profit before tax amounted to DKK 1,106 million in the first quarter of 2021. This was DKK 87 million or 9%
higher than in the first quarter of 2020.
The effective tax rate was 20.0% in the first quarter of 2021 and on par with the first quarter of 2020.
Net profit grew by DKK 70 million, or 9%, to DKK 885 million in the first quarter of 2021 compared to the same
period last year, due to a higher EBIT and lower net financial costs.
Total costs
+2%
Gross margin
58.2%
Operating costs
+10%
Depreciation and amortization
DKK 340 million
EBIT
DKK 1,117 million
EBIT margin
29.6%
Net financial costs and share of
losses in associates
DKK 11 million
Effective tax rate
20.0%
Net profit
DKK 885 million
Interim report for Q1 2021. Company announcement No. 21
6/25
Cash flows and balance sheet
Cash flow from operating activities amounted to DKK 898 million in the first quarter of 2021. This was a decrease
of DKK 65 million from DKK 963 million in the first quarter of 2020. The decrease between the two periods was
mainly due to change in net working capital, partly offset by higher net profit.
Net investments excluding acquisitions totaled DKK 194 million in the first quarter of 2021, which was DKK 56
million more than in the same period of 2020.
Free cash flow before acquisitions amounted to DKK 704 million in the first quarter of 2021. This was a decrease
of DKK 121 million compared to the DKK 825 million in the same period of 2020. The decrease was driven by
lower cash flows from operating activities and the change in net working capital.
Shareholders’ equity including minority interests was DKK 10,782 million at March 31, 2021, corresponding to
an equity ratio of 49.7%. This was an increase of DKK 18 million and a decrease of 3.0 percentage points
respectively compared to the shareholders’ equity of DKK 10,764 million and the 52.7% equity ratio reported
at March 31, 2020.
Net interest-bearing debt (NIBD) and the NIBD-to-EBITDA ratio were DKK 5,381 million and 0.9 respectively at
March 31, 2021. This was an increase of DKK 583 million compared to the net interest-bearing debt at March
31, 2020, while the NIBD-to-EBITDA ratio was unchanged. The increase in net interest-bearing debt was mainly
due to dividend payments and stock buybacks.
Return on invested capital (ROIC) including goodwill was 23.4% in the first quarter of 2021, which was 2.1
percentage points higher than in the same period of 2020. The improvement in ROIC between the two periods
was due to the higher net operating profit after tax which more than offset an increase in average invested
capital following the PrecisionBiotics Group and Microbiome Labs acquisitions.
The holding of treasury stock was 6,100,345 B shares at March 31, 2021, equivalent to 2.1% of the common
stock.
Operating cash flow
DKK 898 million
Net investments excl. acq.
DKK 194 million
Free cash flow before acquisitions
DKK 704 million
Equity ratio
49.7%
NIBD/EBITDA
0.9
ROIC
23.4%
Treasury stock
2.1%
Interim report for Q1 2021. Company announcement No. 21
7/25
2021 outlook
2021 outlook
April 27*
2021 outlook
February 2
Sales performance, organic
%
2 to 6
2 to 6
EBIT margin
%
25 to 26
25 to 26
ROIC (including goodwill)
%
~19
~19
Free cash flow before acquisitions
DKKbn
2.7 to 3.1
2.7 to 3.1
For modeling purposes:
Effective tax rate
%
~20
~20
Net financial costs
DKKm
~75
~50
Net investments
DKKbn
1.0 to 1.2
1.0 to 1.2
Stock buyback program
DKKbn
up to 1.5
up to 1.5
*Assumes constant currencies from the time of this announcement and for the remainder of the year
Sales outlook
The first-quarter sales performance benefitted from customer stock building from general supply-chain
concerns, as well as a faster recovery in emerging markets. While we also recognized a better momentum in
the underlying performance of some businesses in the first quarter, we maintain our full-year outlook for 2% to
6% organic sales growth due to timing factors, supply-chain volatility, and continued COVID-19 uncertainty.
The outlook continues to be based on a gradual recovery from the pandemic impact in 2020. An incremental
pickup or a further slowdown of the expected gradual recovery, especially in the areas most impacted by the
pandemic in 2020, would imply a performance in the high- respectively the low-end of the outlook range.
However, the outlook range does not cover another extended global lockdown situation. Sales in reported DKK
are expected to be ~1 pp less, net of currency and M&A-related effects, compared to the 2% to 6% organic sales
growth outlook.
Food, Beverages & Human Health and Grain & Tech Processing are expected to grow organically by mid-single-
digits while Bioenergy is expected to grow by mid-to-high single digits in 2021. In Household Care, the organic
sales growth outlook is low-single-digits. Agriculture, Animal Health & Nutrition is expected to see flat-to-low-
single-digit organic sales growth.
Household Care (organic 2% in Q1 2021) organic sales growth will be driven by market penetration, particularly
in emerging markets, and the continued rollout of the Freshness technology in Europe, with a broad-market
powder launch expected in the second half of the year. The broad-market launch is an important milestone that
is expected to become a significant growth contributor in future years.
Food, Beverages & Human Health (organic 11% in Q1 2021) 2021 organic sales growth is expected to be broad
across subareas. Innovation and emerging market penetration, supported by increasing consumer dietary-
health-awareness, are the main drivers of growth in the food business. Beverages is expected to gradually
recover following a year in 2020 that was severely affected by COVID-19 restrictions. Human Health, including
the PrecisionBiotics Group and Microbiome Labs acquisitions, will contribute to growth in reported DKK and is
estimated to grow organically in the solid double-digits.
Interim report for Q1 2021. Company announcement No. 21
8/25
Bioenergy (organic -9% in Q1 2021) organic sales growth is expected to be driven by a gradual recovery of U.S.
ethanol production as COVID-19 restrictions are lifted, continued capacity expansion of corn-based ethanol
production in Latin America, and market penetration supported by innovations such as the advanced yeast
solutions. The mid-point of the Bioenergy organic sales growth range roughly corresponds to mid-single-digit
growth in US ethanol production.
Grain & Tech Processing (organic +16 % in Q1 2021) organic sales growth is expected across subareas in both
grain and tech. Growth in the grain business will be driven by innovation and increased local presence, while a
gradual recovery of the global textile industry will contribute to growth in tech.
Agriculture, Animal Health & Nutrition (organic 0% in Q1 2021) organic sales performance is expected to be
led by the agriculture business with continued expansion across crops and regions. Agriculture is expected to
deliver solid underlying double-digit organic sales growth in 2021 when adjusted for the DKK ~60 million one-
off in the second quarter of 2020.
Profit outlook
For 2021, Novozymes expects a solid reported EBIT margin of 25% to 26% (2020: 26.1%). The net positive
contribution from the first-quarter one-offs adds to the full-year EBIT margin, which is maintained within the
25% to 26% range. The EBIT margin outlook includes a negative year-on-year impact from currencies of ~1
percentage point as well as a ~1 percentage point negative impact from M&A. The M&A effect is attributable
to amortization and integration costs. Supportive margin contributions from sales growth and productivity
improvements are expected to be partly offset by slightly higher input costs and continued re-investments.
Return on invested capital (ROIC), including goodwill, is expected at ~19% (2020: 18.9%; underlying ~20%) and
includes a ~2 percentage points negative effect from year-on-year currencies and M&A.
Free cash flow (FCF) before acquisitions is expected to be DKK 2.7-3.1 billion (2020: DKK 3.4 billion), supported
by higher sales and an improved operating cash flow. Cash flow is expected to be somewhat lower than in 2020
as higher net investments and the timing of working capital will lower the 2021 cash generation following a
stronger-than-expected performance in 2020, including the Q2 2020 positive cash effect from the settlement
related to the former BioAg setup.
For modeling purposes, the following is provided:
The effective tax rate is expected at ~20% for 2021 (2020: 19.7%).
Net financial costs are expected to be DKK ~75 million (2020: DKK 127 million), with DKK ~150 million relating
to interest expenses, banking fees, lease and financial costs related to acquisition earnouts. The DKK ~150
million is partly offset by a positive effect from USD/DKK currency hedging.
Net investments during 2021 will amount to DKK 1.0-1.2 billion (2020: DKK 0.9 billion), reflecting maintenance,
optimization and expansion investments.
A stock buyback program of up to DKK 1.5 billion was initiated effective February 8, 2021.
EBIT margin
25 to 26%
ROIC, incl. goodwill
~19%
FCF before acquisitions
DKK 2.7 to 3.1 billion
Effective tax rate
~20%
Net financial costs
DKK ~75 million
Net investments
DKK 1.0 to 1.2 billion
Stock buyback program
up to DKK 1.5 billion
Interim report for Q1 2021. Company announcement No. 21
9/25
Sustainability outlook
In 2021, we will continue to invest in developing solutions that support better lives in a growing world as well
as progress on our 2022 targets on climate, water, production and consumption. We will expand the reach and
benefits of our solutions and expect to deliver an even greater impact by replacing chemicals and enabling CO
2
reductions. We will further develop our employee programs focused on learning, well-being and improving their
engagement towards our sustainability commitment.
2022 targets
World
Save CO
2
emissions by enabling low carbon fuels in the transport sector
60 million tons of CO
2
Reach people by providing laundry solutions that replace chemicals
>4 billion people
Gain food by improving efficiency from farm to table
500,000 tons of food
Operations
Reduce absolute CO
2
emissions from operations
1
40%
Develop context-based water management programs
100% of sites
2
Develop zero waste programs
100% of sites
2
Manage biomass in circular systems
100%
Develop circular management plans for key packaging materials
100%
Employees
Enable learning
3
80
Nurture diversity
4
86
Occupational injuries
5
≤ 1.5
Pledge employee time to local outreach
6
~ 1% of time
Excite employees
3
81
1
Compared to 2018 baseline
2
The target does not include sites with activities considered not to have a significant environmental impact, e.g sales offices, R&D labs, etc
3
Measured by score to relevant questions in annual survey
4
Index calculated based on gender and national representation at various professional levels
5
Defined as the three-year rolling average of lost time injuries per million working hours
6
Qualitative reporting only
Interim report for Q1 2021. Company announcement No. 21
10/25
Currency exposure
Sales by currency, Q1 2021
Other things being equal, a 5% movement in USD/DKK is expected to have an annual positive/negative impact
on EBIT of around DKK 130-160 million, and a 5% movement in EUR/DKK is expected to have an annual
positive/negative impact on EBIT of DKK ~200 million.
Hedging of net currency exposure
2021
2022
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
USD
100% hedged via forward contracts
at average USD/DKK 6.38
13% hedged via forward contracts
at average USD/DKK 6.13
The expected USD currency exposure for 2021 is 100% hedged at an average of USD/DKK 6.38. The 2021 outlook
is based on expected exchange rates for the company's key currencies remaining at the closing rates on April
26 for the full year.
DKK
EUR
USD
BRL
CNY
Average exchange rate Q1 2021
744
617
113
95
Average exchange rate Q1 2020
747
678
153
97
Average exchange rate Q1 2021 compared to Q1 2020
0%
-9%
-26%
-2%
Rate on April 26, 2021
744
615
113
95
Estimated average exchange rate 2021
*
744
616
113
95
Estimated average exchange rate 2021 compared to 2020
0%
-6%
-12%
0%
* Estimated average exchange rate on April 26, 2021
~37%
~32%
~9%
~7%
~15%
EUR
USD
CNY
DKK
Others
Interim report for Q1 2021. Company announcement No. 21
11/25
Stock buyback program in 2021
Novozymes targets a 50% dividend payout ratio over the coming years with excess cash, after investments and
M&A, to be returned to shareholders via stock buybacks at a NIBD-to-EBITDA ratio of ~1x. Consequently, a stock
buyback program of up to DKK 1.5 billion has been decided for 2021. The program was initiated on February 8,
2021 as per company announcement no. 5.
Novo Holding A/S intends to participate in Novozymes' stock
buyback program in 2021
Novozymes' majority shareholder, Novo Holdings A/S, a holding company wholly owned by the Novo Nordisk
Foundation, considers its participation in Novozymes' stock buyback program on a year-by-year basis and plans
to participate in the 2021 program. Novo Holdings A/S intends to reduce its holding of B shares so that it will
continue to hold around 25.5% of the total shares.
Accounting policies
The interim report for the first three months of 2021 has been prepared in accordance with IAS 34 and
additional Danish regulations for the presentation of quarterly interim reports by listed companies. The interim
report for the first three months of 2021 follows the same accounting policies as the annual report for 2020,
except for all new, amended or revised accounting standards and interpretations (IFRSs) endorsed by the EU
effective for the accounting period beginning on January 1, 2021. These IFRSs have not had any impact on the
Group’s interim report.
Interim report for Q1 2021. Company announcement No. 21
12/25
Forward-looking statements
This company announcement and its related comments contain forward-looking statements, including
statements about future events, future financial performance, plans, strategies and expectations. Forward-
looking statements are associated with words such as, but not limited to, "believe," "anticipate," "expect,"
"estimate," "intend," "plan," "project," "could," "may," "might" and other words of similar meaning. Forward-
looking statements are by their very nature associated with risks and uncertainties that may cause actual results
to differ materially from expectations, both positively and negatively. The risks and uncertainties may, among
other things, include unexpected developments in i) the ability to develop and market new products; ii) the
demand for Novozymes' products, market-driven price decreases, industry consolidation, and launches of
competing products or disruptive technologies in Novozymes' core business areas; iii) the ability to protect and
enforce the company's intellectual property rights; iv) significant litigation or breaches of contract; v) the
materialization of the company's market-expanding growth platforms, notably the development of microbial
solutions for broad-acre crops; vi) political conditions, such as acceptance of enzymes produced by genetically
modified organisms; vii) global economic and capital market conditions, including, but not limited to, currency
exchange rates (USD/DKK and EUR/DKK in particular, but not exclusively), interest rates and inflation; viii)
significant price decreases for inputs and materials that compete with Novozymes' biological solutions. The
company undertakes no obligation to update any forward-looking statements as a result of future
developments or new information.
Contact information
Investor Relations
Tobias Bjorklund
+45 3077 8682
tobb@novozymes.com
Ulrik Wu Svare
+45 3077 3187
ulms@novozymes.com
Carl Ahlgren (U.S.)
+1 919 702 6144
cxal@novozymes.com
Media Relations
Lina Danstrup
+45 3077 0552
lind@novozymes.com
Interim report for Q1 2021. Company announcement No. 21
13/25
Statement of the Board of Directors and the Executive
Management
Bagsværd, April 27, 2021
EXECUTIVE MANAGEMENT
Ester Baiget
President & CEO
Lars Green
CFO
BOARD OF DIRECTORS
Jørgen Buhl Rasmussen
Chair
Cornelis (Cees) de Jong
Vice Chair
Anne Breum
Heine Dalsgaard
Sharon James
Anders Hentze Knudsen
Kasim Kutay
Preben Nielsen
Kim Stratton
Mathias Uhlén
Jens Øbro
Interim report for Q1 2021. Company announcement No. 21
14/25
Appendices
Appendix 1 Main items and key figures 15
Key figures 15
Income statement 16
Statement of comprehensive income 17
Appendix 2 Distribution of revenue 18
Business areas 18
Geography 18
Appendix 3 Statement of cash flows 19
Statement of cash flows 19
Appendix 4 Balance sheet and Statement of shareholders' equity 20
Balance sheet, Assets 20
Balance sheet, Liabilities 21
Statement of shareholders' equity 22
Final opening balance, PrecisionBiotics Group Limited 23
Provisional opening balance, Microbiome Labs 24
Appendix 5 Miscellaneous 25
Product launches in 2021 25
Company announcements and news in the 2021 financial year 25
Interim report for Q1 2021. Company announcement No. 21
15/25
Appendix 1 Main items and key figures
Key figures
DKK million Q1 2021 Q1 2020 % change
Revenue 3,776 3,786 (0)%
Gross profit 2,196 2,160 2%
Gross margin 58.2% 57.1%
EBITDA 1,457 1,394 5%
EBITDA margin 38.6% 36.8%
Operating profit / EBIT 1,117 1,095 2%
EBIT margin 29.6% 28.9%
Share of result in associates (1) -
Net financials (10) (76)
Profit before tax 1,106 1,019 9%
Tax (221) (204) 8%
Net profit 885 815 9%
Earnings per DKK 2 share 3.17 2.89 10%
Earnings per DKK 2 share (diluted) 3.15 2.88 10%
Net investments excl. acq. 194 138
Free cash flow before net acq. and purchase of
financial assets
704 825
Return on invested capital (ROIC) incl. goodwill 23.4% 21.3%
Net interest-bearing debt 5,381 4,798
Equity ratio 49.7% 52.7%
Return on equity 32.1% 29.3%
Debt-to-equity 49.9% 44.6%
NIBD / EBITDA 0.9 0.9
Number of employees 6,274 6,066
Novozymes' stock
Mar. 31,
2021
Mar. 31,
2020
Common stock (million)
285.0 285.0
Net worth per share (DKK)
37.79 37.73
Denomination of share (DKK)
2.00 2.00
Nominal value of common stock (DKK million)
570.0 570.0
Treasury stock (million)
6.1 3.3
Interim report for Q1 2021. Company announcement No. 21
16/25
Income statement
DKK million Q1 2021 Q1 2020
Revenue 3,776 3,786
Cost of goods sold (1,580 ) (1,626 )
Gross profit 2,196 2,160
Sales and distribution costs (439 ) (430 )
Research and development costs (563 ) (460 )
Administrative costs (198 ) (198 )
Other operating income, net 121 23
Operating profit / EBIT 1,117 1,095
Share of result in associates (1 ) -
Net financials (10 ) (76 )
Profit before tax 1,106 1,019
Tax (221 ) (204 )
Net profit 885 815
Attributable to
Shareholders in Novozymes A/S 885 815
Non-controlling interests - -
Specification of net financials
Foreign exchange gain/(loss), net 27 (59 )
Interest income/(costs) (10 ) (13 )
Other financial items (27 ) (4 )
Net financials (10 ) (76 )
Earnings per DKK 2 share 3.17 2.89
Average no. of A/B shares outstanding (million) 279.2 282.0
Earnings per DKK 2 share (diluted) 3.15 2.88
Average no. of A/B shares, diluted (million) 280.9 283.4
Interim report for Q1 2021. Company announcement No. 21
17/25
Statement of comprehensive income
DKK million Q1 2021 Q1 2020
Net profit
Currency translation of subsidiaries and non-controlling
interests
Currency translation adjustments
Fair value adjustments
(102 ) (56 )
Tax on fair value adjustments
Cash flow hedges reclassified to financial costs (42 ) 26
Tax on reclassified fair value adjustments
Cash flow hedges
(113 ) (23 )
Other comprehensive income
Comprehensive income
Attributable to
Shareholders in Novozymes A/S 1,110 805
Non-controlling interests 1 -
Interim report for Q1 2021. Company announcement No. 21
18/25
Appendix 2 Distribution of revenue
Business areas
Geography
2021 2020 % change % currency % M&A % organic
DKK million Q1 Q1 impact impact growth
Consumer Biosolutions
Household Care
1.241 1.271 (2) (4) 0 2
Food, Beverages & Human Health
865 737 17 (5) 11 11
Agriculture & Industrial Biosolutions
Bioenergy
588 719 (18) (9) 0 (9)
Grain & Tech Processing
589 538 9 (7) 0 16
Agriculture, Animal Health & Nutrition
493 521 (5) (5) 0 0
Sales 3.776 3.786 0 (6) 3 3
2021 % change
DKK million Q1 Q4 Q3 Q2 Q1 Q1/Q1
Consumer Biosolutions
Household Care
1.241 1.173 1.211 1.227 1.271 (2)
Food, Beverages & Human Health
865 666 684 680 737 17
Agriculture & Industrial Biosolutions
Bioenergy
588 693 647 463 719 (18)
Grain & Tech Processing
589 487 515 467 538 9
Agriculture, Animal Health & Nutrition
493 427 374 512 521 (5)
Sales 3.776 3.446 3.431 3.349 3.786 0
2020
2021 2020
% change % currency % M&A % organic
DKK million Q1 Q1 impact impact growth
Europe, Middle East & Africa 1.457 1.454 0 (1) 1 0
North America 1.166 1.264 (8) (7) 3 (4)
Asia Pacific 786 708 11 (5) 0 16
Latin America 367 360 2 (19) 0 21
Sales 3.776 3.786 0 (6) 3 3
Developed markets 2.417 2.537 (5) (5) 3 (3)
Emerging markets 1.359 1.249 9 (8) 0 17
Sales 3.776 3.786 0 (6) 3 3
2021 % change
DKK million Q1 Q4 Q3 Q2 Q1 Q1/Q1
Europe, Middle East & Africa 1.457 1.332 1.403 1.347 1.454 0
North America 1.166 1.106 1.060 1.011 1.264 (8)
Asia Pacific 786 708 642 697 708 11
Latin America 367 300 326 294 360 2
Sales 3.776 3.446 3.431 3.349 3.786 0
Developed markets 2.417 2.280 2.283 2.201 2.537 (5)
Emerging markets 1.359 1.166 1.148 1.148 1.249 9
Sales 3.776 3.446 3.431 3.349 3.786 0
2020
Interim report for Q1 2021. Company announcement No. 21
19/25
Appendix 3 Statement of cash flows
Statement of cash flows
DKK million Q1 2021 Q1 2020
Net profit
Reversals of non-cash items
Tax paid
(195 ) (290 )
Interest received
Interest paid
(13 ) (16 )
Cash flow before change in working capital
Change in working capital
(Increase)/decrease in receivables and contract assets
(342 ) (49 )
(Increase)/decrease in inventories
(41 ) 40
Increase/(decrease) in payables, deferred income and contract liabilities
Currency translation adjustments
(9 ) (23 )
Cash flow from operating activities
Investments
Purchase of intangible assets
(45 ) (30 )
Sale of property, plant and equipment
Purchase of property, plant and equipment
(150 ) (108 )
(194 ) (138 )
Business acquisitions, divestments and purchase of financial assets
(753 ) -
Free cash flow
(49 ) 825
Financing
Borrowings
Repayment of borrowings
(66 ) (28 )
Overdraft facilities, net
Repayment of lease liabilities
(23 ) (30 )
Shareholders:
Purchase of treasury stock
(284 ) (281 )
Sale of treasury stock
Dividend paid
(1,465 ) (1,482 )
Withheld dividend tax
Cash flow from financing activities
(74 ) (607 )
Net cash flow
(123 ) 218
Unrealized gain/(loss) on currencies and financial assets,
included in cash and cash equivalents
Change in cash and cash equivalents, net
(118 ) 215
Cash and cash equivalents at January 1
Cash and cash equivalents at March 31
Undrawn committed credit facilities at March 31, 2021 were DKK 3,907 million.
Cash flow from investing activities before acquisitions, divestments
and purchase of financial assets
Free cash flow before acquisitions, divestments and purchase of
financial assets
Interim report for Q1 2021. Company announcement No. 21
20/25
Appendix 4 Balance sheet and Statement of shareholders' equity
Balance sheet, Assets
DKK million
Mar. 31,
2021
Mar. 31,
2020
Dec. 31,
2020
Completed IT development projects 189 193 205
Acquired patents, licenses and know-how
Goodwill
IT development projects in progress
Intangible assets 3,709 1,900 2,554
Land and buildings
Plant and machinery
Other equipment 936 965 941
Assets under construction and prepayments
Property, plant and equipment 9,736 10,103 9,612
Deferred tax assets 1,143 1,151 1,339
Other financial assets (non-interest-bearing) 21 22 21
Investment in associate 32 37 33
Other receivables
Non-current assets 14,672 13,243 13,599
Raw materials and consumables 357 384 353
Goods in progress 773 788 720
Finished goods
Inventories 2,443 2,560 2,361
Trade receivables 2,934 2,861 2,549
Contract assets 14 228 6
Tax receivables 269 261 460
Other receivables
Receivables 3,470 3,648 3,227
Other financial assets (non-interest-bearing) 25 23 119
Cash and cash equivalents 1,063 926 1,181
Assets held for sale
Current assets 7,012 7,180 6,911
Assets 21,684 20,423 20,510
Interim report for Q1 2021. Company announcement No. 21
21/25
Balance sheet, Liabilities
DKK million
Mar. 31,
2021
Mar. 31,
2020
Dec. 31,
2020
Common stock 570 570 570
Currency translation adjustments (389 ) 70 (727 )
Cash flow hedges 14 (4 ) 127
Retained earnings
Equity attributable to shareholders in Novozymes A/S
Non-controlling interests
Shareholders' equity 10,782 10,764 11,244
Deferred tax liabilities 889 907 1,204
Provisions 116 90 115
Contingent consideration 560 - 146
Other financial liabilities (interest-bearing) 3,901 3,515 3,245
Other financial liabilities (non-interest-bearing) 14 12 9
Non-current lease liabilities
Non-current liabilities 5,852 4,963 5,105
Other financial liabilities (interest-bearing) 2,036 1,616 1,285
Other financial liabilities (non-interest-bearing) 70 55 24
Lease liabilities 135 154 136
Provisions 23 147 90
Trade payables 1,163 1,078 1,100
Contract liabilities 124 54 67
Deferred income 31 29 22
Tax payables 154 328 336
Other payables
Current liabilities 5,050 4,696 4,161
Liabilities 10,902 9,659 9,266
Liabilities and shareholders' equity 21,684 20,423 20,510
Interim report for Q1 2021. Company announcement No. 21
22/25
Statement of shareholders' equity
DKK million
Common
stock
Currency
translation
adjustments
Cash flow hedges
Retained
earnings
Total
Non-
controlling
interests
Total
Shareholders' equity at January 1, 2021
Net profit for the period
Other comprehensive income for the period
Total comprehensive income for the period
Purchase of treasury stock
(284 ) (284 ) (284 )
Sale of treasury stock
Write-down of common stock
Dividend
(1,465 ) (1,465 ) - (1,465 )
Stock-based payment
Tax related to equity items
Changes in shareholders' equity
Shareholders' equity at March 31, 2021
Shareholders' equity at January 1, 2020
Net profit for the period
Other comprehensive income for the period
Total comprehensive income for the period
Purchase of treasury stock
(281 ) (281 ) (281 )
Sale of treasury stock
Write-down of common stock
(12 ) 12 - -
Dividend
(1,482 ) (1,482 ) - (1,482 )
Stock-based payment
Tax related to equity items
(16 ) (16 ) (16 )
Changes in shareholders' equity
(12 ) 13 (23 ) (694 ) (716 ) - (716 )
Shareholders' equity at March 31, 2020
Attributable to shareholders in Novozymes A/S
Interim report for Q1 2021. Company announcement No. 21
23/25
Final opening balance, PrecisionBiotics Group Limited
(DKK million)
Assumed fair value of aquired assets and liabilities are as follows:
Intangible assets excluding goodwill 639
Property, plant and equipment 1
Inventories 5
Trade and other receivables 37
Cash 64
Deferred tax liabilities (80)
Financial and other liabilities (26)
Acquired net assets 640
Purchase price:
Cash 652
Contingent consideration 190
Total purchase price 842
Goodwill 202
The purchase agreement includes a contingent consideration of up to DKK 298 million.
The consideration is contingent on the achievement of sales and EBITDA targets for 2023,
and is recognized at the anticipated fair value at acquisition date. Fair value is assessed by using the earn-out
from the most probable sales and EBITDA target in 2023 discounted using a 7% discount rate.
The most probale sales and EBITDA target have been reassessed in Q1 2021. The reassessement
has led to an increase of the purchase price and goodwill of DKK 44 million.
opening balance as presented in the Annual Report 2020 in Note 3.5.
Other than the reassessment of the contingent consideration no changes has been made to the
Interim report for Q1 2021. Company announcement No. 21
24/25
Provisional opening balance, Microbiome Labs
(DKK million)
Assumed fair value of aquired assets and liabilities are as follows:
Intangible assets excluding goodwill 718
Property, plant and equipment 8
Inventories 19
Trade and other receivables 23
Cash 13
Financial and other liabilities (46)
Acquired net assets 735
Purchase price:
Cash 766
Contingent consideration 338
Total purchase price 1.104
Goodwill 369
as presented in the Annual Report 2020 in Note 3.5.
The opening balance is provisional and no material changes has been made to the opening balance
Interim report for Q1 2021. Company announcement No. 21
25/25
Appendix 5 Miscellaneous
Product launches in 2021
Product
Description
Sustainability benefit*
ProAct 360™
ProAct 360™ is a protease solution helping
poultry producers to achieve sustainable and
profitable production by improving amino
acid digestibility.
ProAct 360™ reduces nitrogen emissions into
the environment via manure by improving the
digestibility of proteins in animal feed.
* The sustainability benefits are based on quantitative and/or qualitative evaluations. Novozymes does not have quantifiable data or documentation to
verify the benefits of all product launches.
Company announcements and news in the 2021 financial year
(Excluding Management's trading in the Novozymes stock, major shareholder announcements and stock buyback status)
February 2, 2021
Group financial statement for 2020
February 2, 2021
Election of employee representatives to the Board of Directors of Novozymes A/S
February 8, 2021
Initiation of stock buyback
March 11, 2021
Novozymes A/S Annual Shareholders' Meeting 2021
April 12, 2021
Reduction of share capital