Microorganisms

This segment includes the sales of microorganisms for institutional and household cleaning, wastewater treatment, aquaculture and plant care.

At the beginning of 2007, Novozymes decided to discontinue a product line to improve profitability. Low growth in the market in general could not compensate for the lower sales resulting from the discontinuation. As a result of this decision Novozymes lost market share. The total sales ended 11% lower than in 2006. Calculated in local currencies, sales were 5% lower than in 2006.

The market for microorganisms has a low degree of transparency and is characterized by a number of minor, local players with relatively short-term focus. In addition, it is generally more difficult to obtain patent protection in this market than, for example, in the enzyme market. A review of the market share analysis has lead to an upward adjustment of the global market size and a corresponding downward adjustment of Novozymes’ market share.

Organic growth in 2008 is expected to fall short of our long-term expectations, as we will make further adjustments to streamline the product portfolio and improve profitability. The December 2007 acquisition of Philom Bios Inc. will increase sales in 2008 by about 20% compared to 2007.

The long-term growth outlook is maintained, supported by existing research and market-expanding projects. The aquisition of Philom Bios Inc., which provides access to the sustainable agriculture market, is an example of an initiative that supports long-term growth.

• Novozymes’ market share: 30-40%
• Expected sales growth for 2008: 20-30%
• Expected long-term annual sales growth: 10%