Growth driven by different industries

Audited by PwC

We are striving to achieve more than 10% average organic growth per year.

Just as today, Enzyme Business is expected to be the strongest absolute growth contributor in a longer-term perspective. Different industries will contribute differently to growth in a specific year. This has always been the case for Novozymes’ business and is expected to continue to be the case in the years ahead. There are numerous growth drivers impacting each industry differently, and current long-term trends should enable many of our industries to deliver organic growth. Sales of enzymes for advanced biofuels are not included in the target as it is too early to discern a reliable growth trend for this application. When a more reliable growth outlook for these advanced biofuels is identified, the long-term growth target will be adjusted to reflect this opportunity.

BioBusiness activities are also expected to contribute positively to the organic growth rate, but due to its current size – representing roughly 8% of total sales in 2009 – the overall impact is smaller from an absolute growth perspective. However, we want to grow BioBusiness into a multibillion DKK business by 2018. From a relative growth perspective, BioBusiness should grow at a faster pace than Enzyme Business. This requires the successful development and commercialization of products in our pipeline, as well as success for our customers’ biopharmaceutical products currently in different phases of development. This will be a challenge and is to some extent outside our control, but we are making progress toward our ambitious target. We are also pursuing ways of supporting the target through acquisitions within areas where we see a technological and a competency fit.

Earnings development supported by productivity improvements

A unique cornerstone of Novozymes’ business model is productivity improvements within Enzyme Business. We expect to be able to continue to increase throughput in our production facilities and reduce the relative enzyme cost by at least the same rate as we have achieved in the past. Increasing productivity, combined with making the enzymes more potent, is important to our ambition of maintaining an operating profit margin of more than 20%.

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