Other risks

Energy consumption and Prices
The manufacture of industrial enzymes requires high amounts of energy, and the trend in energy prices will therefore impact cost of goods sold. The risk of a negative impact from rising energy and CO₂ prices is managed through optimizing the production process, for example, by using gene technology, and by partially hedging energy prices for a future period.

Raw materials consumption and prices
A significant proportion of Novozymes’ raw materials are derived agricultural products, and the movement in food prices will therefore affect production costs. Novozymes makes efforts to reduce the risk of a negative impact by optimizing the production process, for example, by using gene technology and by ensuring the greatest possible flexibility in the use of raw materials.

Global organization
Novozymes operates in many markets via sales companies and distributors, while production is restricted to a small number of countries. This entails a number of internal transactions, etc., which are covered by internal settlement prices. Novozymes follows the OECD principles in setting internal settlement prices, but this is a complicated area and always entails a tax risk as the area is subject to political judgment in each individual country. Novozymes regularly enters into dialogue with the tax authorities in the countries involved to reduce this risk.

Insurance
The risk of personal injury, material damage and other events beyond the company’s control, and any losses that Novozymes may cause, are covered by an extensive insurance program. Cover in different areas is subject to a deductible based on Novozymes’ claims history. However, the current price of the policies and the cover provided may be affected by external circumstances, such as natural disasters and similar.