Expectations for 2008

Novozymes has the following expectations for its financial, social and environmental performance in 2008:

Financial expectations:

• Growth in sales of 11-14% in local currencies and 8-11% in DKK at current exchange rates
• Growth in operating profit of 2-5% after adjustments for non-recurring items in 2007
• Operating profit margin, measured in relation to sales, of approximately 18%
• Growth in net profit after tax of 4-7%, after adjustments for 2007 non-recurring items
• Return on invested capital after tax of about 20%
• Free cash flow before acquisitions of DKK 750-900 million
• Investments in property, plant and equipment before acquisitions of DKK 800–950 million

By far, most of Novozymes’ sales are generated outside Denmark. Therefore, fluctuations in the exchange rates of the sales currencies will have a significant impact on the financial results. The company’s financial expectations are based on the spot rates on January 23, 2008 for its most important currencies, including the US dollar.

Social and environmental targets:

• Limit the increase in water and energy consumption to a maximum of 1% less than realized sales growth in local currencies
• Limit the increase in solid waste to a maximum of 1% less than realized sales growth in local currencies
• Recycle more than 40% of waste
• Limit emissions of ozone-depleting HCFCs to below 2,000 kg
• Avoid significant spills or emissions
• Keep employee turnover below 12% (equivalent to 9% excluding the effect of the closing of sHA production – see Events occurring after the end of the year)
• Keep employee absence below 3%
• Avoid fatal occupational accidents
• Keep the frequency of occupational accidents below 4.5 per million working hours
• Reach at least index 71 for "Satisfaction & Motivation"
• Reach at least index 69 for "Employee opportunities for professional and personal development"

The targets for "Satisfaction & Motivation" and "Opportunities for professional and personal development" are based on the results of the annual employee survey, People’s Opinion, and on an index developed by the analysis and consulting company Ennova.

For Novozymes, contributing to sustainable development for society, especially to solve global climate problems, has high priority. By replacing conventional technologies, enzyme technology often reduces CO₂ emissions considerably, and has the potential to become part of a lasting solution. In 2008, Novozymes will intensify its work in this area through the following objectives:

• New Life Cycle Assessment (LCA) procedures will be introduced to ensure that potential CO₂ reductions are part of the decision-making process when developing new products. This is the first step towards setting targets for the total CO₂ reduction potential of our 2009 pipeline, and pursuing the related business opportunities.
• To investigate how increasing LCA coverage of our product portfolio can gradually increase the accuracy of the estimate for the total CO₂ reduction that can be achieved if customers use Novozymes’ enzymes. The ambition is to set specific targets for 2009.
• In 2008, Novozymes’ energy and climate strategy will be revised, including specific plans and improvement targets for the years ahead.
• In 2007, Novozymes developed a new method for further collaboration with suppliers on sustainability issues. As part of this, the target for 2008 is to conduct a pilot test of this method of responsible purchasing with the aim to implement the method in 2009.