Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
Ester Baiget, President & CEO:
"The year started strong, and we delivered very satisfactory organic
sales growth of 10% with double-digit growth in three of our five business areas. Our well-diversified
portfolio is showing its strength, enabling solid margins and returns, and we are driving our strategy
forward while balancing short-term execution with a clear long-term focus. We raise our full-year
organic sales growth outlook to 4-8% despite the negative effects of the tragic war in Ukraine, and we
maintain our expectations for the other three financial outlook metrics.”
Sales and financial performance:
• Growth in Danish kroner at 16% (10% organic, 5% currency, 1% M&A).
• Double-digit organic sales growth in three of five business areas:
• Bioenergy (27% organic growth): Strong growth across geographies driven by innovation and
yield focus as well as a strong Q1 year-on-year increase in US ethanol production.
• Food, Beverages & Human Health (18% organic growth): Strong growth across most
subareas, especially in food, and partly due to a positive timing effect.
• Agriculture, Animal Health & Nutrition (12% organic growth): Very satisfactory growth in
Animal Health & Nutrition and positive developments in Agriculture.
• Grain & Tech Processing (8% organic growth): Solid performance in Grain; decline in Tech.
• Household Care (-4% organic performance): Much in line with expectations following
continued European softness and a demanding comparator; war in Ukraine impacting
numbers towards the end of the quarter and expected to impact the full-year performance.
• Emerging markets grew organically by 8%; developed markets grew 10% organically.
• Good momentum on pricing initiatives with an overall neutral impact in Q1.
• EBIT margin solid and as expected at 26.1% with lower year-on-year gross margin due to higher
input and logistics costs, and lower other operating income. Operating leverage, productivity
improvements and currencies were all supportive. Provision for uncertain receivables in Russia,
Belarus and Ukraine with close to 1pp negative effect on the EBIT margin.
• ROIC incl. goodwill at 18.1%, lower year-on-year and mainly affected by higher invested capital.
• Free cash flow before acquisitions at DKK 0.4 billion including higher CAPEX for the investment
in the Advanced Protein Solutions production line at Blair, Nebraska, as well as higher net
working capital.
• Solid balance sheet and debt leverage of 1.1x net debt/EBITDA.
Key events:
• Two product launches in the first quarter including HiPhorious™ - a phytase solution for improved
phosphate uptake – in animal nutrition.
• Improving our score on climate leadership in the Carbon Disclosure Project from B to A.
• Construction of production line for Advanced Protein Solutions in Blair, Nebraska, progressing
according to plan.
• Integration of Synergia progressing well after closing of the transaction.
• DKK 500 million share buyback program initiated on February 21, 2022.
2022 outlook:
• Good momentum and strong start to the year leading to increased organic sales growth outlook
from previously 3-7% to now 4-8%, despite the negative impact from the war in Ukraine of slightly
more than 1p.p.. Sales reported in Danish kroner are now expected to be around 6 percentage
points higher than the organic growth rate.
• Impact from pricing initiatives expected to become increasingly visible as the year progresses.
• Expectations for the other three financial outlook metrics maintained.
Q1 2022
Q1 2021
2022
outlook
April 26
2022
outlook
February 1
Sales performance, organic
%
10
3
4-8
3-7
EBIT margin
%
26.1
29.6
25-26
25-26
ROIC, incl. goodwill
%
18.1
18.8
16-17
16-17
Free cash flow before acquisitions
DKKbn
0.4
0.7
1.7-2.1
1.7-2.1
Q1 2022
10%
Organic sales
growth
26.1%
EBIT margin
18.1%
ROIC, incl.
goodwill
0.4
FCF before
acq. DKKbn
Strong 10% organic sales growth; increased full-year outlook
_________________________________________________________________________________________________________________________________
Conference call
April 27, 2022
09.00 CEST
+45 3544 5577
+44 (0) 33 3300 0804
+1 631 913 1422
PIN 68437435#
Webcast
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
2/24
Selected key data
Q1 2022
Q1 2021
Sales performance, organic
%
10
3
Household Care
%
-4
2
Food, Beverages & Human Health
%
18
11
Bioenergy
%
27
-9
Grain & Tech Processing
%
8
16
Agriculture, Animal Health & Nutrition
%
12
0
Sales
DKKm
4,371
3,776
Sales performance, DKK
%
16
0
Gross margin
%
55.5
58.2
EBITDA
DKKm
1,503
1,457
EBIT
DKKm
1,142
1,117
EBIT margin
%
26.1
29.6
Net profit
DKKm
839
885
Net profit performance
%
-4
9
Net investments excl. Acquisitions
DKKm
389
194
Free cash flow before acquisitions
DKKm
386
704
NIBD/EBITDA
x
1.1
1.1
ROIC, incl. Goodwill
%
18.1
18.8
EPS
DKK
3.00
3.17
EPS (diluted)
DKK
2.98
3.15
Avg. USD/DKK
DKK
664
617
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
3/24
Sales by business area
Distribution of sales by business area, Q1 2022
Household Care
Household Care sales declined 4% organically and 1% in reported DKK in the first quarter. This was a
soft performance but much in line with expectations, coming on top of a high two-year stack
comparison. The development is mainly explained by the expected reduction in European market
volumes as well as the war in Ukraine both having a negative impact on the sales performance towards
the end of the quarter. Emerging markets grew slightly on top of a tough comparator driven by solid
performance in Latin America and despite the negative impact of the war in Ukraine. The Freshness
technology performed in line with expectations.
Food, Beverages & Human Health
Sales in Food, Beverages & Human Health grew 18% organically and 27% in reported DKK in the first
quarter. The performance was strong and above expectations, driven by Food and Beverages, and
included a positive timing effect of roughly 5 percentage points of the organic sales growth in the
business area. Growth in Food was broad-based across sub-areas such as baking, dairy and plant
protein, with solid momentum for ingredient substitution and raw material optimization. Beverages
performed well, especially in the low-calorie brewing segment, and the performance was further
supported by favourable market conditions. Both Food and Beverages also benefitted from favourable
market conditions and from increased consumer demand. Human Health performed in line with
expectations and continued to benefit from solid underlying market demand. The quarter also
included positive developments in the integration of Synergia Life Sciences.
Bioenergy
First-quarter sales in Bioenergy grew 27% organically and 36% in reported DKK. U.S. ethanol
production in the first quarter of last year was subdued both by lower demand due to COVID-19
restrictions and by the short-term disruption caused by the industry’s supply challenges due to the
‘Texas freeze’. The U.S. ethanol production in the first quarter of 2022 was further boosted by
favourable market conditions with supportive crush margins. In addition, capacity expansion of corn-
based ethanol production in Latin America as well as innovations in yeast and fiber also contributed
to the good performance. Sales to the biodiesel industry grew strongly, although from a small base,
driven by continued market penetration in emerging markets.
Grain & Tech Processing
First-quarter sales in Grain & Tech Processing grew 8% organically and 13% in reported DKK despite
a relatively demanding comparator from the first quarter of last year. The good performance was
fuelled by strong growth in Grain, which continued to benefit from favourable market conditions
supporting higher demand for solutions that optimize yield and throughput. The primary growth
drivers in Grain were market penetration in vegetable oil processing, innovation in starch, particularly
28%
25%
18%
16%
13%
Household Care
Food, Beverages & Human Health
Bioenergy
Grain & Tech Processing
Agriculture, Animal Health & Nutrition
Organic performance / Performance in DKK
12% / 17%
-4% / -1%
8% / 13%
18% / 27%
27% / 36%
Total sales Q1 y/y
Organic: 10%
DKK: 16%
Household Care Q1 y/y
Organic: -4%
DKK: -1%
Food, Beverages & Human
Health Q1 y/y
Organic: 18%
DKK: 27%
Bioenergy Q1 y/y
Organic: 27%
DKK: 36%
Grain & Tech Process. Q1 y/y
Organic: 8%
DKK: 13%
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
4/24
in grain milling, as well as higher end-market demand for starch-derived products. Sales in Tech
declined against a high comparator and due to lower sales of diagnostics enzymes.
Agriculture, Animal Health & Nutrition
Agriculture, Animal Health & Nutrition grew 12% organically and 17% in reported DKK in the first
quarter. Growth was led by Animal Health & Nutrition with Agriculture also contributing positively.
Innovation and favourable market conditions, especially linked to high soft commodity prices, boosted
demand for yield-enhancing solutions across subareas. The strong growth in Animal Health & Nutrition
was driven by innovation and end-market-driven volume growth resulting in broad-based growth
across major categories in nutrition. The positive development in Agriculture came against a high year-
on-year comparator.
Agriculture, Animal Health &
Nutrition Q1 y/y
Organic: 12%
DKK: 17%
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
5/24
Sales by geography
Distribution of sales by geography, Q1 2022
Novozymes' sales grew 10% organically year on year in the first quarter of 2022. Both developed and
emerging markets did well, growing by 10% and 8%, respectively. The performance in developed
markets was led by strong growth in Bioenergy, with sales in North America being particularly strong.
In emerging markets, the performance was broad-based, led by Food, Beverages & Human Health,
despite a high comparator from last year.
Europe, the Middle East & Africa
First-quarter sales grew 11% organically, with all business areas contributing apart from Household
Care. Growth was led by a strong performance in Food, Beverages & Human Health as well as
Agriculture, Animal Health & Nutrition. There was a small negative impact towards the end of the first
quarter, due to the war in Ukraine.
North America
North America grew 10% organically in the first quarter. Growth was mainly driven by Bioenergy,
whereas performance in Household Care was soft.
Asia Pacific
Organic sales grew 5% in the first quarter. Growth was broad based, with all business areas
contributing apart from Agriculture, Animal Health & Nutrition. Excluding China, which performed very
well last year and provided a tough comparator, the region grew double digits.
Latin America
Sales in Latin America grew 16% organically in the first quarter of 2022. The business areas of Food,
Beverages & Human Health, Bioenergy and Household Care all performed very well, producing double
digit growth.
37%
32%
20%
11%
Europe, the Middle East & Africa
North America
Asia Pacific
Latin America
5% / 14%
Europe, the Middle East &
Africa Q1 y/y
Organic: 11%
DKK: 12%
North America Q1 y/y
Organic: 10%
DKK: 19%
Asia Pacific Q1 y/y
Organic: 5%
DKK: 14%
Latin America Q1 y/y
Organic: 16%
DKK: 25%
16% / 25%
Organic performance / Performance in DKK
11% / 12%
10% / 19%
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
6/24
Income statement
Total costs excluding net other operating income, net financials, share of losses in associates and taxes
amounted to DKK 3,241 million in the first quarter of 2022. This was DKK 461 million (+17%) higher
than in the first quarter of 2021 and mainly due to higher costs of goods sold, which increased as a
function of higher sales as well as higher input and logistics costs.
The gross margin was 55.5% in the first quarter, which was 2.7 percentage points lower than the prior-
year first quarter. The decrease between the two periods was mainly a result of higher input and
logistics costs. Productivity improvements and operating leverage had a positive effect on the change
in gross margin, whereas the net effects of changes in sales prices, product mix and currencies were
roughly neutral.
Operating costs amounted to DKK 1,297 million in the first quarter, which was DKK 97 million (+8%)
higher than in the same period of last year. The increase in operating costs was negatively impacted
by currencies and the development was mainly due to higher sales and distribution costs and to a
lesser extent higher administrative costs, while research and development costs decreased.
Recognition of operating costs and other M&A-related effects from the recent acquisition of Synergia
Life Sciences impacted all three operating cost lines slightly. The increase in sales and distribution
costs was additionally impacted by higher logistics costs, the continued investments in commercial
activities, and a provision related to uncertain receivables mainly relating to customers in Russia..
Research and development costs in the first quarter of last year included a one-off cost following the
consolidation of R&D activities. This comparator effect was the main cause of the decrease in research
and development costs between the first quarters of this year and last year.
The OPEX-to-sales ratio in the first quarter of 2022 was 29.7% compared to 31.8% in the same period
last year.For the first quarter of 2022:
• Sales and distribution costs increased by 33% and made up around 13% of sales.
• Research and development costs decreased by 12% and made up around 11% of sales.
• Administrative costs increased by 11% and made up around 5% of sales.
Other operating income totalled DKK 12 million in the first quarter, which was DKK 109 million less
than last year. The decrease is explained by higher other operating income in the first quarter of last
year that included contingent income from a divested pharma-related royalty, and proceeds from the
sale of a non-core administrative building.
Depreciation and amortization amounted to DKK 361 million in the first quarter. This was DKK 21
million (+6%) higher than in the same period of last year. The increase was partly due to M&A-related
effects from the acquisition of Synergia Life Sciences.
EBIT was DKK 1,142 million for the first quarter. This was DKK 25 million (+2%) higher than in the
prior-year first quarter as higher operating costs were more than offset by higher gross profit. The first-
quarter EBIT margin was 26.1%, which was 3.5 percentage points lower than last year. The decrease
was mainly the result of a lower gross margin and lower other operating income. The aforementioned
provision for uncertain receivables, included in the operating costs, had a negative effect of close to 1
percentage point on the EBIT margin. M&A-related effects had a roughly neutral effect, while
currencies had a positive effect. Adjusting for the extraordinary provision, the underlying EBIT margin
was ~27% in the first quarter of 2022. This was around 1 percentage point lower than the underlying
EBIT margin in the first quarter of last year, when adjusted for the aforementioned two one-offs
included in other operating income and the one-off charge under research and development costs. The
decrease in the underlying EBIT margin was primarily due to higher input and logistics costs.
Net financial costs and the share of losses in associates amounted to DKK 66 million in the first
quarter. This was an increase of DKK 55 million compared to the prior-year period due to losses on
currency hedges on the USD/DKK exchange rate.
Gross margin
55.5%
Operating costs
8% higher
Depreciation and amortization
DKK 361 million
EBIT
DKK 1.142 million
EBIT margin
26.1%
Net financial costs and share
of losses in associates
DKK 66 million
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
7/24
Profit before tax was DKK 1,076 million in the first quarter, which was DKK 30 million (-3%) less than
in the same quarter of last year as the increase in EBIT was more than offset by higher net financial
costs.
The effective tax rate for the first quarter was 22.0%, which is on par with the corporate tax rate in
Denmark and two percentage points higher than in the prior-year first quarter. The difference is
explained by the transfer of intellectual property from Switzerland to Denmark during 2017-2021
which benefitted the effective tax-rate for that period.
Net profit for the first quarter was DKK 839 million. This was a decrease of DKK 46 million (-5%)
compared to the first quarter of last year due to both lower profit before tax and a higher effective tax
rate.
Cash flows and balance sheet
Cash flow from operating activities amounted to DKK 775 million in the first quarter. This was a
decrease of DKK 123 million mainly due to changes in working capital and an increase in corporate
tax paid.
Net investments excluding acquisitions amounted to DKK 389 million, which was DKK 195 million
higher than in the same quarter of last year. The increase was mainly due to higher CAPEX investments
in the new production line for Advanced Protein Solutions in Blair, Nebraska, U.S.
Free cash flow before acquisitions was DKK 386 million in the first quarter. This was a decrease of
DKK 318 million year on year that is mainly explained by higher net investments and a reduced
cashflow from operating activities due to the increased working capital.
Total equity including minority interests was DKK 11,683 million on March 31, 2022, corresponding to
an equity ratio of 46.2%. This was DKK 901 million higher and 3.5 percentage points lower than the
respective figures at March 31, 2021.
Net interest-bearing debt (NIBD) was DKK 6,260 million at March 31, 2022. This was an increase of
DKK 879 million compared to the same date last year as the positive cash flow from operating activities
was more than offset by cash outflows from dividend payments, stock buybacks, capital expenditures
and the acquisition of Synergia Life Sciences. The NIBD-to-EBITDA ratio was 1.1 at March 31, 2022,
which was on par with the same period last year.
Return on invested capital (ROIC) including goodwill was 18.1% in the first quarter. This was 0.7
percentage point lower than for the same period of last year and mainly related to the higher invested
capital, including acquisitions.
As of January 1, 2022, the calculation of ROIC, ROE and NIBD/EBITDA was changed as the former
calculation for interim periods was subject to one-offs due to quarterly annualization of earnings and
EBITDA. Full-year figures are unaffected by the change. Please refer to appendix 5.3 for further details
and historical figures.
The holding of treasury stock at March 31, 2022 was 5,038,269 B shares, which was equivalent to 1.8%
of the common stock.
Effective tax rate
22.0%
Net profit
DKK 839 million
Operating cash flow
DKK 775 million
Net investments excluding
acquisitions
DKK 389 million
Free cash flow before
acquisitions
DKK 386 million
Equity ratio
46.2%
NIBD/EBITDA
1.1x
ROIC
18.1%
Treasury stock
1.8%
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
8/24
Sales Outlook
Novozymes has a well-diversified product portfolio and broad industry exposure. Despite a negative
impact from the war in Ukraine of slightly more than 1 percentage point, the good momentum
combined with supportive market conditions allow for an increase in the full-year organic sales growth
outlook from 3-7% previously to 4-8%. Sales in DKK is expected to be around 6% higher than the
organic sales growth outlook. Business areas where yield and throughput are more relevant are
benefitting relatively more from the current market conditions. While sales prices were roughly neutral
in the first quarter, Novozymes is experiencing good traction on the ongoing price initiatives and
dialogues in collaboration with customers across business areas. The price initiatives are expected to
have stronger impact as the year progresses, leading to a slightly positive impact for the full-year.
Uncertainties associated with volatile market conditions, the pandemic, the war in Ukraine, and global
supply chain constraints are the main reasons for the overall still relatively broad sales growth range.
Household Care (organic -4% in Q1 2022) As a direct consequence of the war in Ukraine, the full-year
organic sales growth indication for Household Care is now adjusted to 0-2% from previously 2-4%.
Sales is expected to benefit from enzymatic penetration in emerging markets, and includes flat
expectations for developments in European detergent volumes. Areas outside of laundry, such as
dishwash and professional & medical cleaning, are expected to grow and the Freshness technology is
also expected to contribute positively to the performance.
Food, Beverages & Human Health (organic 18% in Q1 2022) organic sales growth is expected to be
broad based, with Food and Human Health as the main drivers. Growth in Food is expected to be
driven primarily by our health-focused solutions, including strong performance in baking, dairy and
plant protein, benefitting from raw material optimization and ingredient substitutions. Beverages is
expected to grow, driven by market penetration and supported by commodity price tailwinds. Human
Health is expected to grow organically in the solid double-digits, driven by cross-selling in regions and
channels. Organic sales in Food, Beverages & Human Health is now indicated to grow in the ‘low teens’,
an increase from previously ‘high-single digit’.
Bioenergy (organic 27% in Q1 2022) organic sales growth is expected to be driven by the continued
recovery of U.S. ethanol production, market penetration enabled by innovation, capacity expansion of
corn-based ethanol production in Latin America, and market penetration with enzymatic solutions for
biodiesel production. The full-year organic sales growth indication is raised from ‘low-to-mid-single-
digit growth’ to ‘high-single-digit growth’ due to the good start to the year and more favourable market
conditions.
Grain & Tech Processing (organic 8% in Q1 2022) organic sales growth is expected to be broad based
with growth across most subareas of both Grain and Tech. Performance in Grain is expected to be led
by market penetration in vegetable oil processing and innovation in starch. Continued volume recovery
in the global textile industry is expected to be the primary growth driver in Tech. As a result of a strong
start to the year and more favourable market conditions, the full-year organic sales growth indication
for Grain & Tech Processing is raised from ‘flat to low-single-digit growth’ to ‘low-single to mid-single-
digit growth’.
Agriculture, Animal Health & Nutrition (organic 12% in Q1 2022) organic sales growth will be led by
double-digit growth in Agriculture complemented by solid growth in Animal Health & Nutrition.
Innovation and a more diversified commercial model will be key enablers for increased market
penetration for both bio-yield and bio-control solutions in Agriculture. Growth in Animal Health &
Nutrition will primarily be driven by innovation as well as end-market-driven volume growth. The full-
year organic sales growth indication for Agriculture, Animal Health & Nutrition is maintained at a rate
of ‘high-single-digits to low-teens’.
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
9/24
Financial outlook
For 2022, Novozymes expects a solid EBIT margin of 25-26% (2021: 26.8%). Operating leverage,
productivity improvements, slightly positive pricing, and currencies are all expected to have a positive
effect on the EBIT margin. This is however expected to be outweighed by the negative effects from
higher input and logistics costs, continued investments in the business, and lower other operating
income. Input and logistics costs have increased significantly, and the gross margin is expected to be
around 2 percentage points lower in 2022 compared to 2021.
Return on invested capital (ROIC), including goodwill, is expected at 16-17% (2021: 19.3%). The
decrease compared to 2021 is due to higher invested capital including the acquisition of Synergia Life
Sciences in December 2021.
Free cash flow (FCF) before acquisitions is expected in the DKK 1.7-2.1 billion range (2021: DKK 2.9
billion), mainly impacted by higher net investments to support long-term growth ambitions.
The following is provided for modelling purposes:
The effective tax rate is expected at around 22% for 2022 (2021: 20%).
Net financial costs are now expected to be around DKK 350 million (2021: DKK 83 million) mainly
driven by higher hedging costs, primarily related to USD forward contracts, and somewhat higher
interest expenses.
Net investments in 2022 are expected in the DKK 2.6-2.9 billion range (2021: DKK 1.1 billion). This
reflects maintenance, optimization and expansion investments, also in new food and health-related
customer co-creation centres, 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 500 million was initiated effective February 21, 2022.
EBIT margin
25-26%
ROIC, incl. goodwill
16-17%
FCF before acquisitions
DKK 1.7-2.1 billion
Effective tax rate
~22%
Net financial costs
DKK ~350 million
Net investments
DKK 2.6-2.9 billion
Stock buyback program
up to DKK 500 million
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
10/24
Sustainability outlook
With our refreshed strategy, ‘Unlocking growth – powered by biotech’, we introduced a new set of long-
term commitments to creating and maintaining a healthy planet. The commitments will help accelerate
the move towards a climate-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 also
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 scopes 1, 2 and 3 by 2030. This is in line
with the climate guidance from the Science Based Targets Initiative defined in 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 new non-financial targets and milestones
to further guide our journey towards our long-term commitments.
In 2022, we will continue to work towards our long-term commitments by investing in the development
of solutions that will contribute to a healthy planet and improve our climate, water and waste
footprints, whilst also promoting 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 sustainability 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.
Milestones
2022 Targets
Status
Zymers &
Society
Nurture diversity
1
86
On track
Occupational injury
2
≤1.5
On track
Zymer spirit index score
3
81
On track
Enable learning
3
80
On track
Pledge our time to local outreach activities
1% of time
4
On track
Operations
Reduce absolute CO
2
emissions from
operations
5
40%
On track
Develop context-based water management
programs
100% of sites
6
On track
Manage biomass in circular systems
100%
On track
Develop circular management plans for key
packaging materials
100%
On track
Develop programs to reach zero waste by
2030
100% of sites
6
On track
World
Save CO
2
emissions by enabling low-carbon
fuels in the transport sector
60 million
tonnes of CO
2
On track
Reach people by providing laundry solutions
that replace chemicals
>4 billion
people
On track
Gain food by improving efficiency from farm
to table
500,000 tonnes
of food
More to do
1
Index calculated based on gender and national representation at various professional levels.
2
Defined as three-year rolling average of lost-time injuries per million working hours.
3
Measured by score to relevant questions in annual survey.
4
Qualitative reporting only.
5
From a 2018 baseline.
6
The targets do not include sites with activities not considered to have a significant environmental impact, e.g. sales offices, R&D labs, etc.
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
11/24
Currency exposure
Sales by currency, Q1 2022
A 5% movement in USD/DKK is expected to have an annual positive/negative impact on EBIT of
around DKK 130-160 million, and a 5% movement in EUR/DKK is expected to have an annual
positive/negative impact on EBIT of DKK ~200 million.
Hedging of net currency exposure and currency exchange rates
The currency exposure was hedged at 88% at an average of USD/DKK 6.41 in 2021. For 2022, the
exposure is 88% hedged at an average of USD/DKK 6.26.
The 2022 outlook is based on exchange rates for the company’s key currencies remaining at the closing
rates on April 25 for the full year.
DKK
EUR
USD
BRL
CNY
Average exchange rate Q1 2022
744
664
127
105
Average exchange rate Q1 2021
744
617
113
95
Average exchange rate Q1 2022 compared to Q1
2021
0%
7%
13%
10%
Estimated average exchange rate 2022*
744
684
139
105
Estimated average exchange rate 2022
compared to 2021
0%
9%
19%
8%
*Weighted with spotrate as of April 25, 2022.
Stock buyback program in 2022
Novozymes targets a 50% dividend payout ratio over the coming years with excess cash 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 0.5 billion has been decided for 2022. The program was initiated on February
21, 2022, as per announcement no. 2.
The shares acquired in the program will be used to meet obligations arising from employee stock-
based incentive programs and/or to reduce the common stock. The cancellation of stock will take place
after the program is finished and will be subject to approval at the Annual Shareholders’ Meeting.
The maximum number of shares to be purchased by the company per daily market session will be
equivalent to a maximum of 25% of the average volume of shares in the company traded on NASDAQ
OMX Copenhagen during the preceding 20 business days. The program will run in accordance with
commission regulation (EU) 596/2014 of 16 April 2014, also known as the "Market Abuse Regulation",
and commission regulation (EU) 1052/2016 of 8 March 2016.
~36%
~35%
~9%
~6%
~14%
EUR
USD
CNY
DKK
Others
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
12/24
Accounting policies
The interim report for the first three months of 2022 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 2022 follows the same accounting policies as the annual
report for 2021.
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 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
13/24
Statement of the Board of Directors and the Executive
Management
Bagsværd, April 26, 2022
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
Morten Sommer
Kim Stratton
Jens Øbro
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
14/24
Appendices
Appendix 1 Main items and key figures 15
Key figures 15
Income statement 16
Statement of comprehensive income 17
Appendix 2 Distribution of sales 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 equity 20
Balance sheet, Assets 20
Balance sheet, Liabilities 21
Statement of equity 22
Appendix 5 Miscellaneous 23
Publicly announced product launches in 2022 23
Company announcements made in the 2022 financial year 23
Change to quarterly and year-to-date calculation method for
ROIC, Return on equity (ROE), and NIBD/EBITDA 24
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
15/24
Appendix 1 Main items and key figures
Key figures
DKK million Q1 2022 Q1 2021 % change
Revenue 4,371 3,776 16%
Gross profit 2,427 2,196 11%
Gross margin 55.5% 58.2%
EBITDA 1,503 1,457 3%
EBITDA margin 34.4% 38.6%
Operating profit / EBIT 1,142 1,117 2%
EBIT margin 26.1% 29.6%
Share of result in associates (1) (1)
Net financials (65) (10)
Profit before tax 1,076 1,106 (3)%
Tax (237) (221) 7%
Net profit 839 885 (5)%
Earnings per DKK 2 share 3.00 3.17 (5)%
Earnings per DKK 2 share (diluted) 2.98 3.15 (6)%
Net investments excl. acq. 389 194 101%
Free cash flow before net acq. and
purchase of financial assets
386 704 (45)%
Return on invested capital (ROIC)
incl. goodwill
18.1% 18.8%
Net interest-bearing debt 6,260 5,381
Equity ratio 46.2% 49.7%
Return on equity 28.0% 26.9%
Debt-to-equity 53.6% 49.9%
NIBD / EBITDA 1.1 1.1
Number of employees 6,641 6,274
Novozymes' stock
Mar. 31,
2022
Mar. 31,
2021
Common stock (million)
282.0 285.0
Net worth per share (DKK)
40.06 37.79
Denomination of share (DKK)
2.00 2.00
Nominal value of common stock
(DKK million)
564.0 570.0
Treasury stock (million)
5.0 6.1
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
16/24
Income statement
DKK million Q1 2022 Q1 2021
Revenue 4,371 3,776
Cost of goods sold (1,944 ) (1,580 )
Gross profit 2,427 2,196
Sales and distribution costs (585 ) (439 )
Research and development costs (493 ) (563 )
Administrative costs (219 ) (198 )
Other operating income, net 12 121
Operating profit / EBIT 1,142 1,117
Share of result in associates (1 ) (1 )
Net financials (65 ) (10 )
Profit before tax 1,076 1,106
Tax (237 ) (221 )
Net profit 839 885
Attributable to
Shareholders in Novozymes A/S 832 885
Non-controlling interests 7 -
Specification of net financials
Foreign exchange gain/(loss), net (46 ) 27
Interest income/(costs) (10 ) (10 )
Other financial items (9 ) (27 )
Net financials (65 ) (10 )
Earnings per DKK 2 share 3.00 3.17
Average no. of A/B shares outstanding (million) 277.1 279.2
Earnings per DKK 2 share (diluted) 2.98 3.15
Average no. of A/B shares, diluted (million) 279.5 280.9
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
17/24
Statement of comprehensive income
DKK million Q1 2022 Q1 2021
Net profit
Currency translation of subsidiaries and non-controlling interests
Currency translation adjustments
Fair value adjustments
(23 ) (102 )
Tax on fair value adjustments
Cash flow hedges reclassified to financial costs 48 (42 )
Tax on reclassified fair value adjustments
(11 ) 9
Cash flow hedges
Other comprehensive income
Comprehensive income
Attributable to
Shareholders in Novozymes A/S 1,122 1,110
Non-controlling interests 7 1
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
18/24
Appendix 2 Distribution of sales
Business areas
Geography
2022
2021 % change % currency % M&A % organic
DKK million Q1 Q1 impact impact growth
Consumer Biosolutions
Household Care 1,230 1,241 (1) 3 0 (4)
Food, Beverages & Human Health 1,099 865 27 4 5 18
Agriculture & Industrial Biosolutions
Bioenergy
797 588 36 9 0 27
Grain & Tech Processing
668 589 13 5 0 8
Agriculture, Animal Health & Nutrition
577 493 17 5 0 12
Sales 4,371 3,776 16 5 1 10
% change
DKK million Q1 Q4 Q3 Q2 Q1 Q1/Q1
Consumer Biosolutions
Household Care
1,230 1,150 1,247 1,125 1,241 (1)
Food, Beverages & Human Health
1,099 851 870 878 865 27
Agriculture & Industrial Biosolutions
Bioenergy
797 788 675 651 588 36
Grain & Tech Processing
668 579 539 529 589 13
Agriculture, Animal Health & Nutrition
577 466 430 397 493 17
Sales 4,371 3,834 3,761 3,580 3,776 16
2021
2022
2022
2021
% change % currency % M&A % organic
DKK million Q1 Q1 impact impact growth
Europe, Middle E ast & Africa 1,633 1,457 12 0 1 11
North America 1,386 1,166 19 7 2 10
Asia Pacific 894 786 14 7 2 5
Latin America 458 367 25 8 1 16
Sales 4,371 3,776 16 5 1 10
Developed markets 2,794 2,417 16 5 1 10
Emerging markets 1,577 1,359 16 7 1 8
Sales 4,371 3,776 16 5 1 10
% change
DKK million Q1 Q4 Q3 Q2 Q1 Q1/Q1
Europe, Middle E ast & Africa 1,633 1,372 1,443 1,409 1,457 12
North America 1,386 1,310 1,131 1,076 1,166 19
Asia Pacific 894 762 728 733 786 14
Latin America 458 390 459 362 367 25
Sales 4,371 3,834 3,761 3,580 3,776 16
Developed markets 2,794 2,486 2,311 2,289 2,417 16
Emerging markets 1,577 1,348 1,450 1,291 1,359 16
Sales 4,371 3,834 3,761 3,580 3,776 16
2021
2022
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
19/24
Appendix 3 Statement of cash flows
Statement of cash flows
DKK million Q1 2022 Q1 2021
Net profit
Reversals of non-cash items
Tax paid
(285 ) (195 )
Interest received
Interest paid
(15 ) (13 )
Cash flow before change in working capital
Change in working capital
(Increase)/decrease in receivables and contract assets
(276 ) (342 )
(Increase)/decrease in inventories
(59 ) (41 )
Increase/(decrease) in payables, deferred income and
contract liabilities
(159 ) 39
Currency translation adjustments
Cash flow from operating activities
Investments
Purchase of intangible assets
(10 ) (45 )
Sale of property, plant and equipment
Purchase of property, plant and equipment
(380 ) (150 )
(389 ) (194 )
Business acquisitions, divestments and purchase of financial
assets
(55 ) (753 )
Free cash flow
Financing
Borrowings
Repayment of borrowings
(120 ) (66 )
Overdraft facilities, net
Repayment of lease liabilities
(28 ) (23 )
Shareholders:
Purchase of treasury stock
(140 ) (284 )
Sale of treasury stock
Dividend paid
(1,524 ) (1,465 )
Withheld dividend tax
Cash flow from financing activities
(192 ) (74 )
Net cash flow
Unrealized gain/(loss) on currencies and financial assets,
included in cash and cash equivalents
(5 ) 5
Change in cash and cash equivalents, net
Cash and cash equivalents - Beginning of period
Cash and cash equivalents at March 31
Undrawn committed credit facilities at March 31, 2022 were DKK 3,760 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 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
20/24
Appendix 4 Balance sheet and Statement of equity
Balance sheet, Assets
DKK million
Mar. 31,
2022
Mar. 31,
2021
Dec. 31,
2021
Completed IT development projects 201 189 200
Acquired patents, licenses and know-how
Goodwill
IT development projects in progress
Intangible assets 4,972 3,709 5,024
Land and buildings
Plant and machinery
Other equipment 1,041 936 1,039
Assets under construction and prepayments
Property, plant and equipment 10,436 9,736 10,185
Deferred tax assets 1,459 1,143 1,637
Other financial assets (non-interest-bearing) 32 21 30
Investment in associate 28 32 29
Other receivables
Non-current assets 16,956 14,672 16,944
Raw materials and consumables 491 357 433
Goods in progress 941 773 979
Finished goods
Inventories 3,082 2,443 2,992
Trade receivables 3,365 2,934 2,948
Contract assets 45 14 40
Tax receivables 210 269 286
Other receivables
Receivables 4,045 3,470 3,793
Other financial assets (non-interest-bearing) 97 25 75
Cash and cash equivalents 1,097 1,063 963
Assets held for sale
Current assets 8,321 7,012 7,823
Assets 25,277 21,684 24,767
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
21/24
Balance sheet, Liabilities
DKK million
Mar. 31,
2022
Mar. 31,
2021
Dec. 31,
2021
Common stock 564 570 564
Currency translation adjustments 263 (389 ) (8 )
Cash flow hedges (13 ) 14 (32 )
Retained earnings
Equity attributable to shareholders in Novozymes A/S
Non-controlling interests
Total equity 11,683 10,782 12,206
Share purchase liability 750 - 717
Deferred tax liabilities 1,200 889 1,337
Provisions 148 116 153
Contingent consideration 214 560 543
Deferred income 101 - 98
Other financial liabilities (interest-bearing) 3,900 3,901 3,676
Other financial liabilities (non-interest-bearing) - 14 4
Non-current lease liabilities
Non-current liabilities 6,657 5,852 6,888
Other financial liabilities (interest-bearing) 2,989 2,036 2,030
Other financial liabilities (non-interest-bearing) 131 70 109
Lease liabilities 124 135 122
Provisions 26 23 21
Contingent consideration 346 - -
Trade payables 1,440 1,163 1,490
Contract liabilities 145 124 129
Deferred income 33 31 34
Tax payables 328 154 486
Other payables
Current liabilities 6,937 5,050 5,673
Liabilities 13,594 10,902 12,561
Liabilities and equity 25,277 21,684 24,767
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
22/24
Statement of equity
DKK million
Common
stock
Currency
translation
adjustments
Cash flow
hedges
Retained
earnings
Total
Non-
controlling
interests
Total
Equity at January 1, 2022
Net profit for the period
Other comprehensive income for the period
Total comprehensive income for the period
Purchase of treasury stock
(140 ) (140 ) (140 )
Sale of treasury stock
Write-down of common stock
Dividend
(1,524 ) (1,524 ) - (1,524 )
Stock-based payment
Non-controlling interests and share purchase liability
(34 ) (34 ) - (34 )
Tax related to equity items
(30 ) (30 ) (30 )
Changes in equity
Equity at March 31, 2022
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
Dividend
(1,465 ) (1,465 ) - (1,465 )
Stock-based payment
Tax related to equity items
Changes in equity
Equity at March 31, 2021
Attributable to shareholders in Novozymes A/S
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
23/24
Appendix 5 Miscellaneous
Publicly announced product launches in 2022
In 2022, we have launched the 2 products described below.
Product
Description
Sustainability benefit*
HiPhorius™
HiPhorius
TM
is a fourth generation phytase
resulting from the Feed Alliance with
DSM.
Phosphorus is essential for animal
metabolism but is often inaccessible to
swine and poultry in the most common
animal feedstocks. Farmers often add
inorganic phosphates, but this increases
feed costs and leads to environmental
pollution through phosphorous emissions.
A phytase is an enzyme that releases
natural-bound phosphorus from raw
materials in feed. This reduces the need
for inorganic phosphorus
supplementation. The primary benefit is
the saving of rare phosphorus resources
and lower phosphorous emissions to water
bodies and reduced algae growth.
Valena Pulse G
Valena Pulse G enables better inclusion
of pulse ingredients in bread and reduces
reliance on emulsifiers. Inclusion of pulses
in bread increase the protein and fiber
content of breads while reducing
carbohydrates and retaining texture and
appearance.
Inclusion of pulses in bread addresses
the plant-based food segment and may
potentially lead consumers to replace
animal-based proteins, potentially
resulting in a significant reduction of
greenhouse gas emissions. Pulses
improve the soil’s ability to absorb
natural CO
2
emissions. Because pulses
can fix nitrogen, they also need less
fertilizer. Fixing nitrogen makes the soil
more fertile, which helps other plants
flourish. Furthermore, when pulses are
sourced locally, transportation of crops is
also reduced.
* 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 made in the 2022 financial year
(Excluding Management's trading in the Novozymes stock, major shareholder announcements and stock buyback status)
February 1, 2022
Group financial statement for 2021
February 21, 2022
Initiation of stock buyback
March 16, 2022
Resolutions from Novozymes A/S’ Annual Shareholders' Meeting 2022
Interim report for Q1 2022
Company Announcement no. 14 April 26, 2022 Novozymes A/S CVR number: 10 00 71 27 Krogshoejvej 36 2880 Bagsvaerd Phone +45 4446 0000
24/24
Change to quarterly and year-to-date calculation method for ROIC, Return on equity
(ROE), and NIBD/EBITDA
Effective from January 1, 2022, Novozymes has changed the calculation of ROIC, ROE, and NIBD/EBITDA as the
former calculation method for interim periods was subject to one-offs due to quarterly annualization of earnings.
Full-year figures are unaffected by the change.
Going forward, ROIC is calculated as adjusted operating profit after tax (NOPAT) for the last four quarters as a
percentage of average invested capital. Similarly, ROE is calculated as net profit attributable to shareholders' of
Novozymes A/S for the last four quarters as a percentage of average equity attributable to shareholders' of
Novozymes A/S. NIBD/EBITDA is calculated as net interest-bearing debt as a percentage of the last four quarters’
accumulated EBITDA.
12M 9M 1H Q1 12M 9M 1H Q1
ROIC (new calculation) 19,3% 20,6% 19,7% 18,8% 18,9% 20,4% 19,6% 21,0%
ROIC, YTD (former calculation) 19,3% 22,1% 22,2% 23,4% 18,9% 19,2% 19,3% 21,3%
ROIC, quarter (former calculation) 14,1% 21,4% 20,3% 23,4% 17,6% 18,9% 17,2% 21,3%
ROE (new calculation) 27,3% 28,4% 28,0% 26,9% 24,9% 28,1% 27,7% 30,2%
ROE (former calculation) 27,3% 29,5% 30,3% 32,1% 24,9% 26,0% 26,2% 29,3%
NIBD/EBITDA (new calculation) 1,0 0,9 1,0 1,1 0,8 0,9 0,9 0,9
NIBD/EBITDA, YTD (former calculation) 1,0 0,8 0,9 0,9 0,8 0,9 0,9 0,9
NIBD/EBITDA, quarter (former calculation) 1,1 0,8 1,0 0,9 0,8 1,0 1,0 0,9
2020
2021