bioagriculture market priorities external market research (e.g. , ) ~$1.500m ~$100m ~$225m...

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  • Trevor Thiessen, Vice President, BioAg

    Novozymes Capital Markets Day, October 31, 2013

    BioAgriculture Market & Priorities

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    guide

    This presentation and its related comments contain forward-looking statements, including financial expectations. Forward-looking statements are by their very nature associated with risks and uncertainties that may cause actual results to differ materially from expectations. The uncertainties may include unexpected developments in the international currency exchange and securities markets, market-driven price decreases for Novozymes products and the introduction of competing products in Novozymes core areas.

    Safe Harbor Statement

    2

    9M 2013 PERFORMANCE STRATEGIC UPDATE BUSINESS DEVELOPMENT BIOAG BIOMASS CONVERSION BETA RENEWABLES

  • BASIC LAYOUT

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    guide 3

    Setting the scene

    Over the last 7 years Novozymes has built a leading position within Agricultural Biologicals (BioAg) This presentation aims at explaining Novozymes' view of the market and its priorities with a view to driving the business forward

    Agenda

    Outline

    Executive summary

    Novozymes BioAg business history and present

    The BioAg market technologies and opportunities

    Strategic priorities

    Recap

    Q&A

    9M 2013 PERFORMANCE STRATEGIC UPDATE BUSINESS DEVELOPMENT BIOAG BIOMASS CONVERSION BETA RENEWABLES

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    guide 4

    Executive Summary

    What are Ag Biologicals?

    Ag Biologicals are microbial-based solutions that work to

    naturally produce healthier crops and improve yields

    Provide farmers with effective and more sustainable, low-chem alternatives for their agricultural practice

    A cost-efficient tool for the farmer to safeguard the high investment of seeds and other Ag chemicals

    Novozymes strategic priorities Increase penetration in existing markets

    Grow global markets

    Develop science and R&D pipeline

    9M 2013 PERFORMANCE STRATEGIC UPDATE BUSINESS DEVELOPMENT BIOAG BIOMASS CONVERSION BETA RENEWABLES

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    guide 5

    Why Are Ag Biologicals Interesting to Novozymes?

    Higher demand for agricultural produce from growing population

    Regulatory and consumer focus on sustainable agriculture

    Increasing chemical and fertilizer input scarcity and price volatility

    Technology advancements that provide path for developing science and new products

    9M 2013 PERFORMANCE STRATEGIC UPDATE BUSINESS DEVELOPMENT BIOAG BIOMASS CONVERSION BETA RENEWABLES

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    Use: This is the basic slide with no extra Novozymes graphics added. Edit Layout: Click Layout in the top menu Home. And choose between +30 different layouts. Edit Header and footer: In the top left corner you find Slide no., Date and Header. Change settings in the menu: > Insert > Header and Footer

    guide

    Biotech R&D

    Molecular biology, bioinformatics & systems biology, and screening systems

    Industrial- scale

    fermentation

    Large-scale production of microorganisms; continuous optimization

    Experience from

    partnering & joint

    developments

    Why acquisitions & what have they given us?

    Window of opportunity to consolidate the BioAg space and become a major player

    Size and footprint to make a difference Product leverage across crops and geography

    Leverage Novozymes' core competencies

    Scale advantage by applying competencies within R&D, fermentation and relationships across business areas

    Novozymes BioAg

    +

    6

    Our BioAg Platform Was Built through Acquisitions and Application of Novozymes' Core Competencies

    2013 TJ Technologies

    2012 Natural Industries

    2011 EMD Crop BioScience

    2010 Turfal

    2009

    2008

    2007 Philom Bios

    2006 Earth BioScience

    Relative size

    = Transformational = Bolt-on = Tech

    9M 2013 PERFORMANCE STRATEGIC UPDATE BUSINESS DEVELOPMENT BIOAG BIOMASS CONVERSION BETA RENEWABLES

    http://www.google.dk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=1KHfXkoIBzlHzM&tbnid=N_8pwSquyAX9lM:&ved=0CAUQjRw&url=http://www.forbes.com/companies/syngenta/&ei=SGxIUomQOcuQ4ATAnYCYCA&bvm=bv.53217764,d.bGE&psig=AFQjCNGie5lH6pn-e0ESLWROgOGX-35sAA&ust=1380564397464919http://www.google.dk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=hIq6qAspUudm7M&tbnid=qzU-j3Kf3h04OM:&ved=0CAUQjRw&url=http://www.machinesitalia.org/en/itcnews/full/italy_invests_in_us_italys_mg_group_to_construct_its_pet_pta_plants_in_corp&ei=52dJUtnNMcboswbjs4HYCQ&bvm=bv.53217764,d.Yms&psig=AFQjCNEw9uEtHRkhv5fDrtZSFAaZxb1dog&ust=1380628835709644

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    Use: This is the basic slide with no extra Novozymes graphics added. Edit Layout: Click Layout in the top menu Home. And choose between +30 different layouts. Edit Header and footer: In the top left corner you find Slide no., Date and Header. Change settings in the menu: > Insert > Header and Footer

    guide 7

    Novozymes BioAg Is Early Part of Value Chain

    Technology provider

    BioAg manufacturer

    Distributor

    (wholesalers, seed

    companies, etc.)

    Retailer Farmer

    Retailer: Plays the most important role in determining if a farmer will use seed treatment inoculants and what brand

    Distributor: Most distributors have only a small amount of influence on farmers' decision process

    Tech provider/BioAg manufacturer: Will in most cases be the same company within the BioAg space Buying criteria for farmer: *

    1. Past experience 2. Retailer advice 3. Agronomist input 4. Peer recommendation 5. Brand

    Majority of sales go through distributor channels some through seed companies

    Distributors (e.g. Cargill, Winfield, Agrium/Loveland)

    Seed companies (e.g. Bayer)

    Products sold through regional seed and crop input retailers

    * Novozymes & markets 2010

    9M 2013 PERFORMANCE STRATEGIC UPDATE BUSINESS DEVELOPMENT BIOAG BIOMASS CONVERSION BETA RENEWABLES

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    guide

    0

    50

    100

    150

    200

    250

    300

    350

    400

    450

    2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

    Index

    8

    Annual revenue around USD 120 million (2012) North America accounts for roughly 2/3 of sales Inoculants for nitrogen fixation for soy and other pulse crops the single biggest application

    Historical Results Build Confidence in Our Future

    Source: Internal analysis. Combined sales development from the combined business of EMD/Merck Crop Bioscience, Philom Bios, EBS and Turfal. Natural Industries and TJ Technology not included as they were acquired just recently

    Novozymes BioAg's combined sales development, 2003 = 100

    9M 2013 PERFORMANCE STRATEGIC UPDATE BUSINESS DEVELOPMENT BIOAG BIOMASS CONVERSION BETA RENEWABLES

  • BASIC LAYOUT

    Use: This is the basic slide with no extra Novozymes graphics added. Edit Layout: Click Layout in the top menu Home. And choose between +30 different layouts. Edit Header and footer: In the top left corner you find Slide no., Date and Header. Change settings in the menu: > Insert > Header and Footer

    guide 9

    Novozymes Competitive Advantages Are Three-Pronged

    Largest producer and marketer of inoculants with vast experience in

    large-scale production of microorganisms

    Global leader in innovation/ microbial R&D with a strong IP base and commitment to

    sound scientific principles

    First to market position in phosphate solubilization & signal molecules and market-leading brands and partnerships within soybean and canola

    9M 2013 PERFORMANC