SALES AND MARKETS

2010wasaverystrongyearfromasales perspective.Highdemandintheenzyme businessresultedindouble-digitorganic salesgrowthforNovozymes.

Totalsalesin2010wereDKK9,724million,anincreaseof 15%comparedto2009.Exchangeratesimpactedsales positively,andsalesinlocalcurrency(LCY)increasedby 10%.Organically,salesgrewby11%comparedto2009. formulations.

Technicalenzymes

ENZYMEBUSINESS

Technicalenzymesalesincreasedby18%inDKKandby 12%inLCYcomparedto2009.Mostindustriesinthe technicalenzymegroupcontributedtothegrowth,with manyofthesmallerindustriesshowinggrowth.Enzyme salestothetextileindustrybouncedbackafterachallenging 2009,whilethestronggrowthinenzymesalestothestarch industrywasdrivenbygreaterdemandfromemerging markets. Enzymesalestotheethanolindustry,representing19%of Novozymestotalsales,wereupby25%inDKKandby19% inLCYcomparedto2009.Favorableblendingeconomics andexportskeptUSethanoldemandandproductionata highlevelduringmostof2010.IntheEuropeanmarket, ethanolenzymesalescontinuedtoshowgoodgrowth, althoughthemarketissmallcomparedtoNorthAmerica.

EnzymeBusinesssaleswereDKK9,109million,upby17% comparedto2009.SalesinLCYwereupby12%,with divestmentsofnoncoreactivitiesinIndiain2009havinga smallnegativeimpactonsalesgrowth.Detergent,technical, andfoodenzymeswerethestrongestgrowthcontributors intheperiod. Theglobalenzymemarketgrewin2010toatotalmarket valueofapproximatelyDKK19billion,upfromDKK16 billionin2009.Allsegmentsofthemarketgrewin2010, butthedetergentandbiofuelenzymesegmentswerethe maindriversbehindthemarketgrowth.Theindustrydidnot seeanymajornewentrantstothemarketin2010,and therewasnochangeintheoverallcompetitiveposition betweentheexistingplayers.Novozymesglobalmarket shareof47%wasunchanged.

Foodenzymes

Detergentenzymes
Detergentenzymesalesincreasedby18%inDKKandby 15%inLCYcomparedto2009.Thestronggrowthwas drivenbyincreasedenzymepenetrationacrossdetergent tierstoenhancewashperformance,enablelow-temperature washing,andreplacetraditionalchemicalsindetergent

Foodenzymesalesincreasedby18%inDKKandby13%in LCYcomparedto2009.Thedivestmentofnoncore ingredientactivitiesinIndiain2009reducedfoodenzyme salesgrowthbyaround1%-point.Higherdemand, particularlyforbakingandbrewingenzymesforenhanced quality,performance,andyields,wasthemaindriverbehind thegrowth.Forthebrewingindustryinparticular,itshould berememberedthat2009wasarelativelyeasycomparison. Newlyintroducedproductsinthefoodindustrycontinued tocontributepositivelytogrowth.

Feedenzymes

Feedenzymesaleswereupby6%inDKKandflatinLCY comparedto2009.Althoughphytaseenzymesales

2010SALESBYINDUSTRY

2010MARKETSHAREINENZYMESFOR INDUSTRIALUSE

Detergentenzymes(32%) Foodenzymes(22%) Microorganisms(4%)

Technicalenzymes(32%) Feedenzymes(8%) Biopharmaceuticalingredients(2%)

Novozymes(47%) DSM(6%)

Danisco(21%) Others(26%)

REPORT Sales and markets

stabilizedinthelatterpartof2010,acompetitiveEuropean phytaseenzymemarketputpressureonsalesduringthe year.RONOZYMEProAct,afeedenzymeincreasingprotein uptakeinpoultry,performedverywellduringitsfirstyearon theEuropeanmarketandcontinuedtodeliverstrong growthinemergingmarkets.

BIOBUSINESS
BioBusinesssaleswere5%lowerinDKKand12%lowerin LCYcomparedto2009.Divestmentofnoncoreactivitiesin themicroorganismbusinessin2009andlowersalesof biopharmaceuticalingredients(BPI)werethemainreasons forthedecrease.Organically,BioBusinesssaleswere10% lowercomparedto2009.

ANOTHERSTEPTOWARDABIO-BASED SOCIETY
In2010,NovozymesandDachengGroup,amajor starch-processingcompanybasedinChina,signedan agreementtodeveloptechnologiestoproduceglycol fromagriculturalwaste.Glycolsarebiochemicalsusedin householdcleaningproductsandcosmetics,andas buildingblocksintheproductionofpolyestersand plastics.TheagreementtiesinwellwithNovozymes visionofdevelopingabio-basedsocietywhere agriculturalwastereplacesoilasanewrawmaterial. Undertheagreement,NovozymeswillprovideDacheng Groupwithknow-howandenzymesforconverting biomasssuchascornstoverandwheatandricestraw intosugar.Dachengwillthenconvertthesugarinto glycolsusingatechnologyinvolvinginorganiccatalysts. Dachengalreadyproducesglycolfromcornstarchona commercialscaleandisalsoplanningtoproduceglycol fromagriculturalwastewithinafewyears. TheagreementisagoodexampleofhowNovozymesis workingtogetherwithglobalpartnerstodevelopnew solutionsbasedonrenewablesourcesinsteadof petroleum.Alongthesamelines,Novozymesisworking togetherwithpartnerssuchasCargill,ADM,and Braskemtodevelopmicroorganisms(organiccatalysts) fortheproductionofrenewablechemicalsfromsugar.

Microorganisms

Microorganismsaleswereupby3%inDKKanddownby 4%inLCYcomparedto2009.Thetotalconsolidatedsales growthimpactin2010fromthedivestmentoftheturfand landscapebusinessinJuly2009andtheacquisitionof BrazilianbioagriculturecompanyTurfalinAugust2010was approximatelyminus4%-points.Salestothebioagriculture (BioAg)andwastewatertreatmentindustriesincreased, whereasmicroorganismsalestotheinstitutional& householdcleaningindustrywerelowercomparedto2009, partlyexplainedbyongoingproductpruning.

Biopharmaceuticalingredients

Biopharmaceuticalingredientsalesweredownby21%in DKKandby28%inLCYcomparedto2009.Thedecrease wascausedbylowersalesofRecombuminandcellculture ingredientsthroughouttheyearandalsobytheabsenceof plectasinsalesinthefourthquarterof2010comparedto thesamequarterof2009.TheBPIindustryissubjectto substantialquarterlyvariationsinsalespatterns,assales compriseasmallnumberoftransactionsofrelativelylarge value.

FIVEYEARSALESDEVELOPMENTINENZYME BUSINESS
DKKmillion

FIVEYEARSALESDEVELOPMENTINBIOBUSINESS
DKKmillion

Detergentenzymes Foodenzymes

Technicalenzymes Feedenzymes

Microorganisms

Biopharmaceuticalingredients

REPORT Sales and markets

APLATFORMFORGROWTHIN AGRICULTURE
Withoneacquisitionfinalizedandanotherpending customaryregulatoryapproval,2010wastheyearwhen Novozymesacceleratedbuildingaplatformforstrong growthintheagriculturalmarket.Novozymesentered thisfast-growingmarket,currentlyestimatedtobe worthUSD1billion,withtheacquisitionofPhilomBios inCanadain2007.InAugust2010,Novozymes announcedtheacquisitionofBraziliancompanyTurfal, andinDecember2010,wesignedanagreementto acquireoneoftheleadingglobalplayers,EMD/Merck CropBioScience,fromMerckKGaA.

TurfalgivesaccesstothegrowingBrazilian market
TurfalisoneofthekeyplayersintheBrazilian biofertilizermarketwitharoundUSD3millioninannual salesandmorethan40yearsexperienceinthemarket. Convenientlylocatedonly25milesfromNovozymes LatinAmericanheadquartersinAraucriajustoutside CuritibainsouthernBrazil,Turfalistobethehubforall ofNovozymesagriculturebusinessinBrazil.Itwill provideNovozymeswithaplatformforfastertesting andregistration,anddeliverdirectaccesstothegrowing Brazilianmarketforagriculturalproducts.

Interestingnicheinaglobalmarket
Agriculturalbiologicalsareasmallbutinterestingniche intheUSD150billionglobalmarketforfertilizersand pesticides.Themarketisdividedintothreesegments: biofertility,biocontrol,andbioyieldenhancement. Biofertilityproductshelpplantstakeupmorenutrients, whilebiocontrolproductshelpplantsfightoffpests anddiseases,andbioyieldenhancementproducts supportthehealthofplants. Theseproductsenablefarmerstooptimizetheuseof fertilizers,increaseyields,andsavemoneywhilealso benefitingtheenvironment.Becomingamajorplayerin thisareaisanopportunityforNovozymestohelpmeet theglobalchallengeoffeedingtheworldsgrowing populationinasustainablemanner.

SALESBYREGION

SalesinEurope,theMiddleEast,andAfrica(Europe/MEA) increasedby11%inDKKandby10%inLCYcomparedto 2009.Detergentandfoodenzymesaleswerethemain growthcontributors,whilesalesofbiopharmaceutical ingredientsdecreased. SalesinNorthAmericawereupby18%inDKKandby12% inLCYcomparedto2009.Detergent,food,andtechnical enzymesales,inparticularenzymesalestotheUSethanol industry,werethemaingrowthdrivers. SalesinAsiaPacificincreasedby15%inDKKandby7%in LCYcomparedto2009.Detergentandtechnicalenzyme saleswerethestrongestgrowthdriversinabsoluteterms, whilesalesoffeedenzymesdecreased.Salesof microorganismsalsoperformedwellduringtheyear, whereasthedivestmentofnoncoreingredientactivitiesin Indiain2009impactedgrowthnegatively. SalesinLatinAmericawereupby27%inDKKandby16% inLCYcomparedto2009.Allenzymeareasdevelopedwell duringtheyear,especiallyfoodanddetergentenzymesales. Microorganismsalesalsoperformedverywellduringthe year,partlyexplainedbytheacquisitionofBrazilian companyTurfalinAugust2010.

Expectedacquisition
TheacquisitionofEMD/MerckCropBioScienceis expectedtobecompletedbetweenFebruaryandMay 2011providedNovozymesreceivesregulatoryapproval. ThetotalconsiderationtobepaidtoMerckKGaAisUSD 275million,subjecttocustomarypost-closing adjustments. Withapproximately165employeesandsalesofaround USD60millionin2010,EMD/MerckCropBioScienceis oneoftheleadingplayersintheglobalmarketfor agriculturalbiologicalsandhasdeliveredaverageannual growthofaround15%overthepastsevenyears. HeadquarteredinMilwaukee,Wisconsin,andwitha divisionofequalsizeinPilar,Argentina,EMD/Merck CropBioSciencehasawell-establishedpresenceinthe USandArgentinaandcomplementsNovozymes existingoperationsinCanadaandBrazil.EMD/Merck CropBioSciencesproductsandtechnologiesarewell definedandestablished,withdocumentedandproven efficacygainsonnumeroussoilsandcrops.Its biofertilityandbioyieldenhancementproductsare primarilyusedingrowingsoyandpulsecrops,andjoin Novozymesexistingbiologicalproductrangeconsisting mainlyofbiofertilityandbiocontrolproductsappliedto canola,pulses,andsoy.

2010SALESBYREGION

Europe/MEA(36%) LatinAmerica(8%)

NorthAmerica(37%) AsiaPacific(19%)