1. BIOLOGICAL
SOLUTIONS IN A
CHEMICAL
WORLD
Thomas Schäfer
Senior Director, R&D
Cologne, March 2012

2. Safe Harbor Statement
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.
2

3. Novozymes –
The World Leader in Bioinnovation
• Largest market share of all players in Global enzyme market
Industrial Enzymes (47%) 2009 value: DKK ~ 16bn
• More than 60 years legacy in the Novozymes Danisco DSM Others Captive
business
• 2011 sales of DKK 10,510m 47% 21% 6% 16% 10%
(+8% in DKK, +10% in LCY, +7%
organic)
0% 20% 40% 60% 80% 100%
• 20 years sales growth CAGR of 8%
• EBIT: DKK 2340m (+11 %)
• ~ 14% of sales spent on R&D
• + 6,300 granted and pending patents
• + 5,500 employees Enzyme Business BioBusiness
• Global Organisation
Household Food & Feed & Micro- Biopharmaceutical
Bioenergy
• More than 700 products used in 130 Care Beverages other Tech. organisms ingredients
countries in over 30 different industries *A+B shares April, 2011
3

4. Delivering Tomorrow’s Solutions Today
Delivering solutions from Helping companies This unique approach
nature: become more efficient: leads to:
Enzymes energy efficiency “more with less” combined with…
Active microbial products saving raw materials higher quality
Proteins & peptides reducing waste lower costs
Polymers replacing petro-chemicals better yields and a better
Fermentation is central environment
4

5. Reducing CO2 Emissions Together with Our Customers
• In 2009, Novozymes helped customers save 27 million tons of CO2
– equal to half of Denmark’s annual CO2 emission
• Goal: 75 Mio tons saved in 2018
Net CO2 saving using 1kg enzyme in different
production processes
3800 kg
3400 kg
1300 kg
Up to
600 kg CEREAL FOOD
150 kg 150 kg 200 kg BIOCATALYSIS
40 kg 100 kg
30 kg
OILS & FATS
PAPER
FOOD
BIOETHANOL DETERGENT
LEATHER TEXTILES
ANIMAL FEED
5

6. Using Nature’s own Resources Enable Sustainable
Solutions and Acknowledgement
Top 1% of Environmental Investment Organization carbon
reporting
Best in Class Storebrand SRI
Member of Global100 by Innovest
Member of FTSE4 Good Global and Europe
Member of SB20 by SustainableBusiness.com
Member of Cleantech Index
Member of OMX GES Sustainability Index
Dow Jones Sustainbility index
Biotechnology sector leader
6

7. Novozymes’ Vision
• Less need for energy, water and chemicals
• Better utilization of raw materials
• Less CO2 emissions
• Ability to convert agricultural feedstocks
• Ability to produce food, feed, fibres, fuels & materials
7

8. 8 NOVOZYMES PRESENTATION
Biorefinery as central element

9. 9
Summary: Novozymes key technologies
deliver key enablers for the biobased society
1 2 3
Systems biology and Enzymes for key reactions in
molecular biotechnology the chemical industry
to create highly efficient
”superbugs”
Enzyme systems for 1st and
2nd generation biomass
conversion:
The Sugar Platform
4 Strong partnerships

10. Central Working Hypothesis: Sugar is the New Oil
Fuel
Chemicals
Energy
…
10

11. Why Renewable Chemicals?
• The market is of significant size
• Volatile crude oil prices Commodity Chemical Market Size (2005):
~ USD 360 billion
Rest of
Source: World
Technology Review, Japan 9%
MIT, Oct 2010 Western
11%
Europe
35%
• Strong growth in BRIC-countries keeps
demand for petro-derived products high
Asia
• 9 billion people in 2050, with huge middle 22%
classes arising in China and India
USA
• Energy supply and growing environmental 23%
concerns
• Technology developments to enable the
transition
* Excluding pharmaceutical and consumer products
• “Going Green”, green mission statements Source: modified from Value Creation, chapter 1
and environmental/sustainability goals Ed. Budde, Felcht, Frankemölle, 2006
defined by many companies:
“from tech push to market pull”
11

12. 8/6/2012 NOVOZYMES PRESENTATION
Renewable Chemicals: from tech push to market pull !
Illustrative examples
12

13. Traditional Chemicals Come from an Optimized Industry
Petroleum-based
chemistry
Optimization:
• Scale
• Energy efficiency
Level of optimization
• Fixed cost reduction
• Improved maintenance
• Sourcing/supply chains
• Value engineering
• Plant reliability
• On-stream time
• …
Foundation Development Expansion Diversification Maturity
Time
13

14. …while Renewable Chemicals are in their Infancy…
Petroleum-based
chemistry
Level of optimization
Challenge
• Renewable chemicals have
to compete on price and
performance
• No subsidies
• New infrastructure
• New value chains
Renewable chemicals industry
Time
14

15. Novozymes’ Entry Technology: The Sugar Platform
• Cellulosic bioethanol drives our technology development
Starch Enzyme
process
Fermentable
sugars
Yeast Bio-
Fermentation ethanol
Waste Pre- Enzyme
treatment Cellulose
biomass process
process
15

16. Feb 2010: Novozymes Launches Cellic® CTec2
Allows production of
fuel ethanol from
biomass @ USD 2.00
to USD 2.50 per
gallon, depending on
process
16

17. Feb 2012: Next generation
Cellic CTec3
®
We can secure your plant’s
lowest total cost
17

18. Feb 2012: Next generation
Cellic CTec3
®
18

19. M&G Breaks Ground for First Commercial Plant
• Novozymes’ partner M&G begins
construction of the world’s first
commercial-scale cellulosic ethanol plant
• The plant will produce 13 million
gallons of ethanol per year from
biomass, and is competitive with 60-
70 USD/barrel oil
• The biofuels plant will be ready in 2012,
and is located in Crescentino, Northern
Italy
Pictures courtesy of M&G
19

20. Novozymes’ Entry Technology: The Sugar Platform
• Cellulosic bioethanol drives our technology development
Starch Enzyme
process
Fermentable
sugars
Yeast Bio-
Fermentation ethanol
Waste Pre- Enzyme
treatment Cellulose
biomass process
process
Platform Technology:
enables production of a broad spectrum
of products
20

21. Production of Renewable Chemicals
– a Good Fit to our Technology and our Vision
Yeast Bio-
Fermentation ethanol
Fermentable
sugars
21

22. Production of Renewable Chemicals
– a Good Fit to our Technology and our Vision
Yeast Bio- Renewable
Fermentation ethanol chemicals
Fermentable
sugars
22

23. Production of Renewable Chemicals
– a Good Fit to our Technology and our Vision
Yeast Bio- Renewable
Fermentation ethanol chemicals
Fermentable
sugars
Heterogenous Renewable
catalysis chemicals
23

24. Partnering is essential for us
Yeast Bio- Renewable
Fermentation ethanol chemicals
Fermentable
sugars
Chemical Renewable
Catalysis chemicals
Novel
engineered
pathway Renewable
-- chemicals
Novel
Bioprocess/
Enzymes
24

25. NOVOZYMES PRESENTATION – May 2010 EMEA Chemicals Forum
The renewable chemicals pipeline in more details
3-HP Bio-Acrylic acid
Propanol Bio-Polypropylene
Renewable
Chemicals sugars Glycols
Platform
Not disclosed Not disclosed
Fructose HMF/FDCA Non-exclusive
New Leads
25

26. HMF
HMF
- a new biochemical building block
BioBusiness, Novozymes

27. 27 6 August 2012 Novozymes - Biochemicals Presentation
HMF/FDCA have strong potentials to be future
building blocks in the chemical industry
 Unique molecules with many new Extract from “DOE Top 12 Report”
application opportunities
 HMF/FDCA can replace aromatic
compounds that are challenging to
produce from renewable feedstock
 Favourable production costs,
no “CO2 lost” in production process
HMF FDCA
5-hydroxymethyl Furan-2,5-dicarboxylic
furfural acid

28. 28 6 August 2012 Novozymes - Biochemicals Presentation
HMF could serve multiple markets: from
speciality chemicals to fuel
Market volume
Fuels
Polyesters
Speciality
chemicals
Plasticizers FDCA as partial PIA/PTA replacer in PET
… etc. etc. (see Appendix B)
Bisphenol A replacement in polycarbonate and epoxy resins
FDCA as phthalate replacer in plasticizers
… etc. etc. (see Appendix A)
Time

29. 29 6 August 2012 Novozymes - Biochemicals Presentation
The “Novozymes HMF Technology” focuses on
utilising glucose as feedstock for HMF
H O
CH2OH
H OH O HO O O O
HO H GI HO H H+ O Ox O
H OH H OH HO OH
H OH H OH
Step 1 Step 3 FDCA
CH2OH CH2OH Step 2 HMF FDA
Glucose Fructose 5-hydroxymethyl furfural furan-2,5-dicarboxylic acid
Chemical and Chemical
Saccharification
enzymatic catalysis oxidation
Enzymatic sacchari- Enzymatic production Chemical oxidation of
fication: from starch of HMF via conversion HMF to FDCA tested in
to glucose of glucose to fructose lab/pilot scale
NEW: Enzymatic
oxidation

30. Partnering is essential for us
Yeast Bio- Renewable
Fermentation ethanol chemicals
Fermentable
sugars
Chemical Renewable
Catalysis chemicals
Novel
engineered
pathway Renewable
-- chemicals
Novel
Bioprocess/
Enzymes
30

31. 31 NOVOZYMES PRESENTATION
Enzymatic modifications relevant for the chemical
industry: > het/homogenous catalysis!
Esterification and ester • Application of lipases & cutinases in aqueous or non-
aqueous environment. Can be enantioselective. Also used for
hydrolysis polyester synthesis.
Nitrile hydrolysis • Hydrolysis to amide or carboxylic acid under mild conditions.
Can be enantioselective.
• Polymerization of aromatic structures by hydrogen
Free-radical polymerization abstraction using oxidoreductases
• Oxidation of aromatic side chains
Side chain oxidation using oxidoreductases
• Hydroxylation of aromatic or aliphatic carbon using
Hydroxylation oxidoreductases. Can be enantioselective
• Epoxidation of double bonds using lipases
Epoxidation or oxidoreductases
8/6/
201
2

32. 32 8/6/2012 NOVOZYMES PRESENTATION
Novozymes’ enzymes in Biocatalysis
 Proteases
 Esterases/cutinases
 Oxido-reductases; laccases, peroxidases,
chloroperoxidase
 Amylolytic enzymes
 …
Lipases
 Commercial lipases with varying specificity
 A large number of non-commercial lipases including
variant lipases

33. 33 8/6/2012 NOVOZYMES PRESENTATION
From a universe of Lipases
- Three model types of lipases with different specificity
CalA type of CalB type of TLL type of
enzymes enzymes enzymes
• Candida Antarctica • Candida Antarctica • Thermomyces
lipase A lipase B lanuginosus lipase
• Allows branching on • Allows larger groups • Allows larger groups
C-alpha and bulky on acid part and high on both alcohol and
side chains on the specificity on alcohol acid parts
alcohol part part

34. 34 8/6/2012 NOVOZYMES PRESENTATION
Novozymes’ discovery and development of
enzymes for Biocatalysis
Resolution (Tetrahedron: Asymmetry 2002, 13, 1315-1320)
NH2 Novozym 435 NHAc NH2
+
EtOAc
R R R
rac (R) (S)
Transesterification Desymmetrization
R' OH OAc
Lipase OAc
O + CH3OH
R Org. solvent L M Novozym 435 L M
O Ru-catalyst
R' R'
O O NH2 NHAc
R + OAc
R
O L M Novozym 435 L M
O
Ru-catalyst
Or polymerization and carbohydrate ester synthesis reactions

35. 35 8/6/2012 NOVOZYMES PRESENTATION
Polymerization synthesis reactions
Direct polycondensation of malic acid and
1,8-octane diol
Li 2008
O O
O Lipase
*
* O n
CH3 CH3
Ring opening R,S-MPL
polymerisation with O
Lipase O
O O Lipase
*
O O n *
Poly(TMC)
TMC

36. 36 06/08/2012 NOVOZYMES PRESENTATION
Screening and engineering tools provide the
basis for new developments
 Specific on alcohol
part and allows some
branching on acid part
Stereo selectivity on the acid side – also with
Large and small pocket
e.g. Ibuprofen.
Alcohol
Acid
Acid
Alcohol
References:
• Uppenberg,J.et al (1994) The sequence, Crystal structure determination and refinement of two crystal forms of
lipase B from Candida antarctica. Structure 2, pp.293-308.
• Henke, E. et al (2000 ) Monatshefte für chemie 131 p. 633

37. 37 Novozymes - Biochemicals Presentation/TSJA
External R&D and expertise
Rich Gross
”Enzymes catalyse reactions which classical catalysis is not able to perform”
Martin Hofrichter,
University of Zittau,
Germany
Oxidreductases, lignin degradation

38. Novozymes key technologies deliver key enablers
for the biobased society
1 2 3
Systems biology and Enzymes for key reactions in
molecular biotechnology to the chemical industry
create highly efficient
”superbugs”
Enzyme systems for 1st and
2nd generation biomass
conversion
4 Strong partnerships
38

39. Conclusions:
• The sugar platform is ready for implementation
• Market pull for renewable chemicals
• Untraditional partnerships - combine biology & chemistry
• new growth markets for grain processors, biotech companies and
consumer goods companies
• In tune with the environment
39

40. 40
Thank you!
tsch@novozymes.com