Novonesis AS

Earnings Release • Jan 21, 2011

January 21, 2011

Strong full-year 2010 performance and exciting outlook for 2011

Sales and earnings grew strongly in 2010. Overall demand was high in the enzyme business, and costs were kept under control. For 2011, sales are expected to grow by 7–10% in DKK, local currency (LCY) and organically. We expect EBIT to grow by 8–11%, and we expect an EBIT margin of 21–22%, including an investment of DKK 150 million in additional initiatives in R&D and business-building activities. Net profit is expected to grow by 8–11%, with investments of around DKK 1,400 million and free cash flow before acquisitions of DKK 900–1,000 million. The outlook for 2011 excludes any potential impact from the EMD/Merck Crop BioScience acquisition.

In 2010:

• Sales grew by 15% in DKK, 10% in LCY, and 11% organically compared to 2009
• The gross margin was 55.7%, compared to 55.6% in 2009
• EBIT came to DKK 2,117 million, an increase of 25% compared to 2009
• The EBIT margin was 21.8%, against 20.0% in 2009
• Net profit came to DKK 1,614 million, an increase of 35% compared to 2009
• Net investments excl. acquisitions totaled DKK 1,326 million, against DKK 978 million in 2009
• Free cash flow before acquisitions was DKK 998 million, against DKK 839 million in 2009
• ROIC was 22.2%, against 20.3% in 2009, incl. goodwill

"It has been a very good year for Novozymes, and I can't be anything but very pleased that already in 2010 we were able to live up to the long-term financial targets set at the beginning of 2009. We performed very well in terms of sales, earnings, cash flow, and sustainability," says Steen Riisgaard, President & CEO. "I'm also delighted that, in late December, we signed an agreement with the intention to acquire EMD/Merck Crop BioScience in the exciting and promising field of agricultural biologicals. We expect continued positive sales growth in 2011, and although we will be stepping up our activity levels, we still envisage a very healthy profit margin in 2011 above our long-term target."

	Realized		2011 outlook
	2010	2009	J anuary 21*
Sales , DKKm	9,724	8,448
Sales growth, DKK	15%	4%	7–10%
Sales growth, LCY	10%	2%	7–10%
Sales growth, organic	11%		7–10%
EBIT, DKKm	2,117	1,688
EBIT growth	25%	12%	8–11%
EBIT margin	21.8%	20.0%	21–22%
Net profit, DKKm	1,614	1,194
Net profit growth	35%	12%	8–11%
Net inves tments , excl.
acquis itions , DKKm	1,326	978	~ 1,400
Free cas h flow before
acquis itions , DKKm	998	839	900–1,000
ROIC, including goodwill	22.2%	20.3%	21–22%
Avg. USD/DKK	562	536	553
EPS (diluted), DKK	25.25	18.93

* Assumes exchange rates for the company's key currencies remain at the closing rates on January 20 for the rest of 2011.

Company announcement no. 2, 2011 Page 1 of 23 Novozymes A/S Investor Relations 2011-00618-01

Krogshoejvej 36 2880 Bagsvaerd Denmark

Telephone: +45 4446 0000 Fax: +45 4446 9999 Internet: www.novozymes.com CVR number: 10 00 71 27

Sales by industry

Total sales up 15% in DKK, 10% in LCY

Total sales in 2010 were DKK 9,724 million, an increase of 15% compared to 2009. Exchange rates impacted sales positively, and sales in LCY increased by 10%. Organically, sales grew by 11% compared to 2009.

Enzyme sales up 17% in DKK, 12% in LCY

BioBusiness sales down 5% in DKK, 12% in LCY

Enzyme Business sales were DKK 9,109 million, up by 17% compared to 2009. Sales in LCY were up by 12%, with divestments of noncore activities in India in 2009 having a small negative impact on sales growth. Detergent, technical, and food enzymes were the strongest growth contributors in the period.

BioBusiness sales were 5% lower in DKK and 12% lower in LCY compared to 2009. Divestment of noncore activities in the microorganism business in 2009 and lower sales of biopharmaceutical ingredients (BPI) were the main reasons for the decrease. Organically, BioBusiness sales were 10% lower compared to 2009.

Detergent enzyme sales up 18% in DKK, 15% in LCY	Detergent enzyme sales increased by 18% in DKK and by 15% in LCY compared to 2009. The strong growth was driven by increased enzyme penetration across detergent tiers to enhance wash performance, enable low-temperature washing, and replace traditional chemicals in detergent formulations.
Technical enzyme sales up 18% in DKK, 12% in LCY	Technical enzyme sales increased by 18% in DKK and by 12% in LCY compared to 2009. Most industries in the technical enzyme group contributed to the growth, with many of the smaller industries showing growth. Enzyme sales to the textile industry bounced back after a challenging 2009, while the growth in enzyme sales to the starch industry was driven by greater demand from emerging markets.
19% LCY growth in ethanol enzyme sales	Enzyme sales to the ethanol industry, representing 19% of Novozymes' total sales, were up by 25% in DKK and by 19% in LCY compared to 2009. Favorable blending economics and exports kept US ethanol demand and production at a high level during most of 2010. In the European market, ethanol enzyme sales continued to show good growth, although the market is small compared to North America.
Food enzyme sales up 18% in DKK, 13% in LCY	Food enzyme sales increased by 18% in DKK and by 13% in LCY compared to 2009. The divestment of noncore ingredient activities in India in 2009 reduced food enzyme sales growth by around 1 %-point. Higher demand, particularly for baking and brewing enzymes for enhanced quality, performance, and yields, was the main driver behind the growth. For the brewing industry in particular, it should be remembered that 2009 was a relatively easy comparison. Newly introduced products in the food industry continued to contribute positively to growth.
Feed enzyme sales up 6% in DKK, flat in LCY	Feed enzyme sales were up by 6% in DKK and flat in LCY compared to 2009. Although phytase enzyme sales stabilized in the latter part of 2010, a competitive European phytase enzyme market put pressure on sales during the year. RONOZYME® ProAct, a feed enzyme increasing protein uptake in poultry, performed very well during its first year on the European market and continued to deliver strong growth in emerging markets.
Global enzyme market value approximately DKK 19 billion	According to Novozymes' own estimates, the global enzyme market grew in 2010 to a total market value of approximately DKK 19 billion, up from DKK 16 billion in 2009. All segments of the market grew in 2010, but the detergent and biofuel enzyme segments were the main drivers behind the market growth. The industry did not see any major new entrants to the market in 2010, and there was no change in the overall competitive position between the existing players. Novozymes' global market share of 47% was unchanged.
Microorganism sales affected by divestment in 2009	Microorganism sales were up by 3% in DKK and down by 4% in LCY compared to 2009. The total consolidated sales growth impact in 2010 from the divestment of the turf and landscape business in July 2009 and the acquisition of Brazilian bioagriculture company Turfal in August 2010 was approximately minus 4 %-points. Sales to the bioagriculture (BioAg) and wastewater treatment industries increased, whereas microorganism sales to the institutional & household cleaning industry were lower compared to 2009, partly explained by ongoing product pruning.
BPI sales lower mainly as a result of Recombumin® and cell culture ingredients	Biopharmaceutical ingredient sales were down by 21% in DKK and by 28% in LCY compared to 2009. The decrease was caused by lower sales of Recombumin® and cell culture ingredients throughout the year and also by the absence of plectasin sales in the fourth quarter of 2010 compared to the same quarter of 2009. The BPI industry is subject to substantial quarterly variations in sales patterns, as sales comprise a small number of transactions of relatively large value.

Sales by geographical area

compared to 2009.

The gross profit margin for BioBusiness was 12.0%, against 34.5% in 2009. Lower sales (including the absence of plectasin sales) and one-off write-downs in the biopharmaceutical ingredient business were the main reasons for the decrease.

Other operating costs increased by 9% to DKK 3,364 million in 2010. The ratio of other operating costs to sales was 35%, against 36% in 2009. Costs associated with the agreement to acquire EMD/Merck Crop BioScience were roughly DKK 30 million and were expensed in the fourth quarter of 2010 under Sales and distribution costs.

• Sales and distribution costs, including business development, increased by 11%, representing 13% of sales
• R&D costs increased by 13%, representing 14% of sales
• Administrative costs were up by 1%, representing 8% of sales

Other operating income increased by DKK 5 million to DKK 69 million in 2010. Most of this income was related to the grant from the US Department of Energy regarding Novozymes' cellulosic biofuel enzyme project DECREASE.

Depreciation and amortization rose to DKK 679 million, an increase of DKK 115 million, or 20%, compared to 2009. The higher level of depreciation and amortization was primarily the result of one-off write-downs of know-how in BioBusiness.

EBIT increased by 25% to DKK 2,117 million, against DKK 1,688 million in 2009, and the EBIT margin was 21.8%, against 20.0% in 2009. Strong underlying sales growth in the enzyme business and the development in other operating costs impacted the EBIT margin positively, whereas one-off write-downs, mainly in BioBusiness, as well as costs related to the acquisition process for EMD/Merck Crop BioScience impacted EBIT and the EBIT margin negatively by approximately DKK 95 million and 1 %-point respectively. EBIT up by 25%, EBIT margin 21.8%

Net financials and Net profit

At the end of 2010, net interest-bearing debt was DKK 346 million, against DKK 949 million at year-end 2009.

Profit before tax increased by 31% to DKK 2,123 million from DKK 1,621 million in 2009.

In 2010, the effective tax rate was 24.0%, against 26.3% in 2009. The lower tax rate was mainly the result of negotiated advanced pricing agreements (APA). Effective tax rate 24.0%

Net profit increased by 35% to DKK 1,614 million from DKK 1,194 million in 2009. The strong growth in net profit was the result of stronger EBIT, a positive development in net financials, and a lower effective tax rate compared to 2009. 35% net profit growth

R&D represents 14% of sales

Cash flow and Balance sheet

Cash flow from operating activities increased by 28% to DKK 2,324 million compared to 2009. The rise was primarily due to higher net profit and a relative improvement in net working capital compared to 2009. Net working capital benefited from a relative improvement in payables compared to 2009. Operating cash flow DKK 2,324 million

Net investments excluding acquisitions totaled DKK 1,326 million, against DKK 978 million in 2009. The relatively high investment level was related to the new enzyme plant in Nebraska, USA, the construction of the cGMP hyaluronic acid facility in Tianjin, China, and the expansion of enzyme granulation capacity in China and Denmark. Net investments excl. acq. DKK 1,326 million

Free cash flow before acquisitions came to DKK 998 million in 2010, against DKK 839 million in 2009. The increase was the result of higher operating cash flow, which benefited from higher net profit and a relative improvement in net working capital, but was reduced by higher net investments. Free cash flow before acq. DKK 998 million

Acquisitions amounted to DKK 23 million in 2010 and related to the acquisition of the Brazilian company Turfal in August.

Shareholders' equity was DKK 7,836 million at December 31, 2010, up from DKK 5,841 million at year-end 2009. Shareholders' equity was increased by comprehensive income and decreased by dividend payments of DKK 359 million. Shareholders' equity represented 62% of the balance sheet total, against 54% at year-end 2009. Equity ratio 62%

Net debt-to-equity was 4% at December 31, 2010, against 16% at year-end 2009.

Return on invested capital (ROIC), including goodwill, was 22.2%, against 20.3% in 2009. ROIC 22.2%

At December 31, 2010, the holding of treasury stock was 2.1 million B shares, equivalent to 3.2% of the total number of shares outstanding.

Corporate social responsibility

In 2010, Novozymes set new targets for water, energy, and CO2 efficiency, replacing previous years' water and energy consumption targets. The targets measure percentage improvements on 2005 efficiency levels. A revised method for calculating the realized numbers was implemented in the second half of 2010. This method adjusts production volumes so that each product is comparable (in concentration strength) to the originally developed version of the product. Also, an updated real-time calculation of CO2 savings per kilo enzyme produced affected CO2 emission reductions from customers' application of our products positively.

Compared to 2009, water, energy, and CO2 efficiency all improved in 2010. The frequency of occupational accidents per million working hours fell from 5.1 in 2009 to 4.1 in 2010.

		2010	2009
Improved water, energy, and CO2	Water efficiency (compared to 2005 index) Energy efficiency (compared to 2005 index) CO2 efficiency (compared to 2005 index)	29% 30% 38%	27% 27% 24%
efficiency	CO2 emission reductions (million tons) from customers' application of our products	40	27
	Significant spills	-	-
Lower level of	Fatalities	-	-
occupational accidents	Frequency of occupational accidents per million working hours	4.1	5.1
5,432 employees	Number of employees on December 31	5,432	5,275
	Rate of employee turnover	7.5%	6.7%
	Rate of absence	2.1%	2.3%

Accounting policies

The Group financial statement for 2010 has been prepared in accordance with IAS 34 and the additional Danish regulations for the presentation of quarterly financial statements by listed companies. The Group financial statement for 2010 follows the same accounting policies as the Group financial statement for 2009. IAS 34

2011 outlook

Please note that the 2011 outlook excludes any potential impact from the EMD/Merck Crop BioScience acquisition. Total full-year sales are expected to grow by 7–10% in LCY and also organically. Based on exchange rates at January 20, 2010, sales growth in DKK is also expected at 7–10%. Within Enzyme Business, detergent and feed enzyme sales are expected to be the strongest contributors to full-year sales growth. One assumption included in the full-year sales growth expectation is that the US biofuel industry will produce roughly 13.8 billion gallons of ethanol during the year, corresponding to growth close to 5% over the 13.2 billion gallons of ethanol expected to have been produced in the US in 2010. BioBusiness' sales are expected to undergo double-digit growth, supported in particular by strong sales of microorganisms. EBIT is expected to grow by 8–11%, supported by sales growth, productivity improvements, and continued cost control. The expectation includes the investment of DKK 150 million in additional R&D and business-building activities (read more about some of the new activities in the strategic update below). The EBIT growth expectation also takes into consideration the negative 2010 one-offs of approximately DKK 95 million. The leverage on EBIT from higher expected sales is expected to be neutralized by increased raw material prices. The EBIT margin is expected to be 21–22%, taking into consideration the items explained under EBIT growth above. Net profit is expected to grow by 8–11% in 2011 as a result of EBIT growth. Expected USD exposure for 2011 has been hedged at 5.85 DKK/USD. Roughly half of the expected USD 7–10%, DKK, LCY & organic growth EBIT growth 8–11% EBIT margin 21–22% Net profit growth 8–11%

Free cash flow before acquisitions is expected to be DKK 900–1,000 million. The return on invested capital is expected to be 21–22%. A new incentive program for vice presidents and directors and part of the old stock option scheme for Executive Management and other employees are not covered by treasury stock. Hence, Novozymes expects to buy back shares worth roughly DKK 400 million during the year. The 2011 outlook is based on exchange rates for the company's key currencies remaining at the closing rates on January 20, 2011, for the full year. (DKK) EUR USD JPY CNY Average exchange rate 2009 745 536 5.73 78.47 Average exchange rate 2010 745 562 6.42 83.08 Closing rate January 20, 2011 745 553 6.72 83.99 Change in estimated exchange rate for 2011 compared to average exchange rate in 2010 0% -2% 5% 1% Note: Other things being equal, a 5% movement in the USD is expected to have an annual impact on EBIT of DKK 60–80 million. The following sustainability expectations are also included in the outlook for 2011: • Enable a 45 million ton reduction in CO2 emissions in 2011 through our customers' application of our products • Improve energy efficiency by 32% in 2011 compared to 2005 • Improve CO2 efficiency by 41% in 2011 compared to 2005 • Improve water efficiency by 31% in 2011 compared to 2005 Six to eight new products are expected to be launched in 2011. Strategic update DKK 900–1,000 million ROIC 21–22% Share buy-backs for remuneration programs 6–8 new products

Unchanged long-term targets

For a decade, Novozymes has focused on delivering strong growth in sales, earnings, and cash flow. In 2009 we launched a new ambition – "Changing the world together with our customers" – with new and more demanding targets for both financial and sustainability performance. Novozymes' strong financial performance in 2010 surpassed the new financial targets, but it is our average performance over a longer time period that matters most, so the targets are unchanged. When it comes to sustainability, 2010 showed that we are well on track to meet the targets for 2015.

Investments are expected to be around DKK 1,400 million. The relatively high level is mainly related to the Nebraska enzyme facility, expected to begin production in early 2012.

Financial targets:

• Organic sales growth of more than 10% p.a.
• (sales of enzymes for cellulosic ethanol are not included in the target) • EBIT margin of more than 20%
• Return on invested capital of more than 22%

exposure for 2012 has been hedged at 5.98 DKK/USD.

Investments ~ DKK 1.4bn FCF before acq. of

Sustainability targets:

• Enable a 75 million ton reduction in CO2 emissions in 2015 through our customers' application of our products
• Improve energy efficiency by 50% in 2015 compared to 2005
• Improve our own CO2 efficiency by 50% in 2015 compared to 2005
• Increase energy supply from renewable and CO2-neutral sources to 50% in 2020
• Improve water efficiency by 40% in 2015 compared to 2005
• Be recognized as a global leader in sustainability
• Be a preferred employer globally

Broad and diversified growth platform

Enzyme Business, which accounted for 94% of sales in 2010, is expected to be the strongest absolute growth contributor, with the detergent, technical, food, and feed enzyme segments all having the potential to support the long-term target of double-digit yearly sales growth. Sales of enzymes for cellulosic ethanol are not included in this target as it is too early to estimate these sales.

BioBusiness accounted for 6% of sales in 2010. Our ambition is to grow BioBusiness into a DKK 6 billion business by 2018. This requires the successful development and commercialization of products in our pipeline, as well as success for our customers' biopharmaceutical products currently in different phases of development. To reach this goal, we also need to pursue further acquisitions in areas where we see a good match.

The agreement to acquire EMD/Merck Crop BioScience signed in December 2010 is an example of such an acquisition. As a consequence, BioBusiness will become more sizable, and the acquisition will support the ambition for BioBusiness.

The project portfolio in BioBusiness is constantly under review to ensure that we allocate and optimize available resources in the best way possible. As a result, after unsuccessfully exploring the market for a potential new partner within plectasin, Novozymes is pursuing a divestment or spin-off of the AMP (antimicrobial peptide) activities, as these are not deemed optimally developed within Novozymes.

Sustainability leader

Our long-term resource efficiency targets for energy and water are linked directly to minimizing environmental impact, increasing cost efficiency, and long-term risk management. In addition, we are striving to use renewable energy in our production, and we have a target for absolute reductions in CO2 emissions through our customers' use of our products.

We believe that sustainability will increasingly become an important growth driver and define markets, and it is our long-term ambition to be recognized as a company that demonstrates leadership and sets the standards when it comes to sustainability. Our annual rating by Dow Jones Sustainability Indexes is based on an assessment of our broad sustainability management performance and is therefore a useful indicator of how we are performing in this area.

To fulfill our growth ambition, we need highly skilled, motivated, and engaged employees. Every year Novozymes measures satisfaction, motivation, and opportunities for professional and personal development among our employees, and the company often participates in international rankings of preferred employers. We need to stay among the best to attract committed people who share our vision, passion, and ambition.

Investing in growth

Historically, annual organic sales growth of 8–9% has been achieved with an investment level of around 6–7% of sales, as productivity improvements have enabled us to continuously increase throughput in existing production facilities. However, the higher annual sales target of organic growth of more than 10% has required a period of time when our investment level relative to sales has been high, which is also the case for 2011. Once the new production capacity is established, we estimate an investment level of less than 8% of sales to be sufficient to achieve long-term sales growth of around 10%.

With additional funds allocated to new growth initiatives (read more about some of these initiatives in the section below), for the next couple of years the R&D-to-sales ratio is expected to be somewhat higher than the figure of approximately 14% of sales we have spent on R&D historically. This reflects the strategic decision to explore the many growth opportunities in our various business segments that have the potential not only to add growth in the short term but particularly to support annual organic growth of more than 10% on a 5–10 year horizon.

Investing in additional and supportive growth opportunities

Novozymes' current R&D pipeline and business activities are well positioned to achieve our long-term target of more than 10% annual organic growth. However, to explore additional and supportive growth opportunities, Novozymes has decided to allocate additional funds to selected R&D and business-building activities.

The main purpose of the additional investments is to deliver organic growth of more than 10% 5–10 years ahead. In absolute terms, we want to invest up to DKK 150 million in 2011, and the full amount has been included in our guidance for the year.

One area where there is potential for a more immediate sales impact is accelerating our enzyme presence in selected geographical markets. This will include building new and stronger relations with local players and understanding local requirements, priorities, and processes better than we do today. Another area with potential in the short term is stepping up our efforts to replace chemicals in detergents with enzymatic technology and further investigating the possibilities for washing at lower temperatures.

The main part of the additional funds will be allocated to R&D and business-building activities that will support our long-term target of annual sales growth of more than 10% on a 5–10 year horizon. Investments will be made to develop new technologies and initiate new projects, ensuring that Novozymes continues to deliver results supportive of the current long-term sales target.

Enzymes for conversion of cellulose to sugars

Early in 2010, we took a major leap with the launch of the highly efficient Cellic CTec2 product. Cellic CTec2 enables the cost of producing cellulosic ethanol to be brought down to USD 2 per gallon using best available technology. Although it is currently not the enzyme cost that is holding the technology back from commercialization, we are continuing to work on further improvements in enzyme efficiency.

Currently, the main hurdles to commercialization lie in constructing plants, building an efficient infrastructure, and securing demand for the alternative fuel. With higher oil prices, loan guarantees made available, and further technology advancements, we are confident that the commercialization of cellulosic ethanol will become a reality. It currently seems as if the first large-scale commercial cellulosic ethanol plants will be up and running in 2012/2013, providing the proof of concept that would accelerate the building of further plants. We see interesting developments for cellulosic ethanol together with our partners across geographical markets such as North America, Europe, Asia, and Latin America, all of which need to meet increasing demand for liquid fuels.

Novozymes' cellulosic enzymes enable cost-efficient conversion of cellulose to sugars. These sugars can be used not only for the production of ethanol, but also for the production of bio-based chemical compounds such as glycol, where Novozymes already

has collaborations in place.

Agreement signed to acquire EMD/Merck Crop BioScience

On December 20, 2010, Novozymes signed an agreement to acquire EMD/Merck Crop BioScience. The deal is expected to be closed between February and May, following the customary regulatory approvals. EMD/Merck Crop BioScience has a strong strategic fit with Novozymes' existing BioAg activities and would significantly increase Novozymes' presence in the interesting and fast-growing agricultural biologicals industry.

The expected acquisition price is USD 275 million. EMD/Merck Crop BioScience had sales in 2010 of roughly USD 60 million and an EBIT margin that supports Novozymes' long-term expectations of an EBIT margin of more than 20%. The company has been growing by roughly 15% per year over the last seven years and is a major player in the agricultural biologicals industry. Once the deal has been closed, the activities will be integrated into Novozymes' microorganism (BioAg) business, resulting in a net debt position of close to DKK 2 billion for Novozymes. Read more about the potential acquisition in the related stock exchange announcement under www.novozymes.com/investor.

Dividend

At the Annual Shareholders' Meeting on March 2, 2011, the Board of Directors will propose a dividend payment of DKK 8.00 per share for the 2010 financial year, an increase of 39% compared to 2009. In accordance with the established dividend policy of repaying approximately 30% of net profit for the year, the payout ratio for 2010 is 31.2%, compared to 30.0% for 2009.

Incentive program for Executive Management

Executive Management's stock option program for the period 2007–2010 has come to an end. Stock options under this program were granted in three out of the four years; the expectation of not reaching DKK 10 billion in sales in 2010 did not allow for the granting of options in 2010. The Board of Directors will propose new guidelines for incentive-based remuneration for Executive Management, which will be announced together with the notice convening the Annual Shareholders' Meeting, where approval for the guidelines will be sought. Subject to the approval of the new guidelines, after the Annual Shareholders' Meeting Novozymes will announce a new incentive program for Executive Management based on the principles contained in the guidelines.

Incentive program for vice presidents and directors

Novozymes has established a three-year restricted stock-based incentive program for vice presidents and directors covering the period 2011–2013, with restricted stock offered each year. Management shall approve the allocations made each year.

The restricted stock-based program is based on fulfillment of specified financial and nonfinancial targets. The total allocation of restricted shares is calculated on the basis of fulfillment of the following targets:

EBIT target:	0–20% of the total restricted stock-based program
Economic profit target:	0–60% of the total restricted stock-based program
Sustainability targets:	0–20% of the total restricted stock-based program

The release of the restricted stock is subject to continued employment at the end of the binding period. The restricted stock is free of charge to employees.

The number of restricted shares in the program is determined each year. The restricted shares have a qualifying period of one year and a binding period of three years.

The value of the program for 2011 could total up to approximately DKK 30 million. The stock-based program will be accrued and expensed over four years, and the amount recognized for 2011 is approximately DKK 8 million.

Forward-looking statements

This company announcement contains forward-looking statements, including the financial outlook for 2011. 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 launch of competing products in Novozymes' core areas.

Contact persons: Press and media: Investor Relations:

René Tronborg (Europe) Tel. (mobile): +45 3077 2274

Paige Donnelly (USA) Tel. (mobile): +1 919 218 4501

Tobias Bjorklund (DK) Tel. (mobile): +45 3077 8682

Martin Riise (DK) Tel. (mobile): +45 3077 0738

Thomas Bomhoff (USA) Tel. (US mobile): +1 919 649 2565 Tel. (DK mobile): +45 3077 1226

Statement of the Board of Directors and Executive Management

The Board of Directors and Executive Management have considered and approved the Group financial statement for Novozymes A/S for 2010.

The Group financial statement has been prepared in accordance with International Financial Reporting Standards (as adopted by the EU) and additional Danish regulations for the presentation of Group financial statements by listed companies.

In our opinion the accounting policies used are appropriate, the Group's internal controls relevant to preparation and presentation of a Group financial statement are adequate, and the Group financial statement gives a true and fair view of the Group's assets, liabilities, net profit, and financial position at December 31, 2010, and of the results of the Group's operations and cash flow for 2010.

We further consider that the Management review in the preceding pages gives a true and fair view of the development in the Group's activities and business, the profit for the period, and the Group's financial position as a whole, and a description of the most significant risks and uncertainties to which the Group is subject.

Bagsvaerd, January 21, 2011

Executive Management:

Steen Riisgaard President and CEO	Benny D. Loft	Per Falholt
Peder Holk Nielsen	Thomas Nagy	Thomas Videbæk
Board of Directors:
Henrik Gürtler Chairman	Kurt Anker Nielsen Vice-Chairman	Paul Petter Aas
Jerker Hartwall	Søren Jepsen	Lars Bo Køppler
Ulla Morin	Walther Thygesen	Mathias Uhlén

Appendices

Appendix 1	Main items and key figures
	1.1 Full year 2010
	1.2 Five-year overview 2006–2010
	1.3 Income statement
	1.4 Statement of comprehensive income
	1.5 Segment information
Appendix 2	Distribution of revenue
	2.1 By industry
	2.2 By geographical area
	2.3 Quarterly sales by industry
	2.4 Quarterly sales by geographical area
Appendix 3	Statement of cash flows and financial resources
Appendix 4	Balance sheet and Statement of shareholders' equity
	4.1 Balance sheet
	4.2 Statement of shareholders' equity
Appendix 5	Product launches in 2010
Appendix 6	Company announcements for 2010 (excluding management's trading)
Appendix 7	Financial calendar 2011–2012

Appendix 1: Main items and key figures

1.1 Full year 2010

(DKK million)	2010	2009	% change	2010 Q4	2009 Q4	% change
Revenue	9,724	8,448	15%	2,404	2,167	11%
Gross profit	5,412	4,700	15%	1,315	1,242	6%
Gross margin	55.7%	55.6%		54.7%	57.3%
EBITDA	2,796	2,252	24%	609	574	6%
EBITDA margin	28.8%	26.7%		25.3%	26.5%
EBIT (Operating profit)	2,117	1,688	25%	417	431	(3)%
EBIT margin	21.8%	20.0%		17.3%	19.9%
Net financials	6	(67)		36	(21)
Profit before tax	2,123	1,621	31%	453	410	10%
Corporation tax	(509)	(427)	19%	(103)	(109)	(6)%
Net profit	1,614	1,194	35%	350	301	16%
Attributable to:
Shareholders in the parent company	1,613	1,194	35%	350	301	16%
Equity minority interests	1	-		-	-
Foreign exchange gain/(loss), net, etc.	68	56		38	45
Interest income/(costs)	(23)	(140)		12	(59)
Other financial items	(39)	17		(14)	(7)
Total financial income/(costs)	6	(67)	(109)%	36	(21)	271%
Earnings per DKK 10 share	25.75	19.24	34%	5.57	4.85	15%
Average no. of A-/B- shares, outstanding (mill)	62.6	62.1		62.9	62.1
Earnings per DKK 10 share (diluted)	25.25	18.93	33%	5.46	4.76	15%
Average no. of A-/B- shares, diluted (m)	63.9	63.1		64.1	63.3
Free cash flow before acquisitions	998	839	19%
Return on invested capital (ROIC), incl.
after tax (ROIC), incl. goodwill	22.2%	20.3%
Net interest-bearing debt	346	949	(64)%
Equity ratio	62.2%	53.6%
Return on equity	23.6%	23.1%
Debt-to-equity ratio	4.4%	16.2%

1.2 Five-year overview 2006–2010

			Full year
(DKK million)	2010	2009	2008	2007	2006
Revenue	9,724	8,448	8,146	7,438	6,802
- Enzymes	9,109	7,798	7,533	6,893	6,320
- BioBusiness	615	650	613	545	482
Gross profit	5,412	4,700	4,359	3,949	3,655
Gross margin	55.7%	55.6%	53.5%	53.1%	53.7%
- Enzyme Business gross profit	5,338	4,476	4,233	3,818
- Enzyme Business gross margin	58.6%	57.4%	56.2%	55.4%
- BioBusiness gross profit	74	224	126	131
- BioBusiness gross margin	12.0%	34.5%	20.6%	24.0%
Operating profit (EBIT)	2,117	1,688	1,504	1,481	1,340
Operating profit margin	21.8%	20.0%	18.5%	19.9%	19.7%
Net financials	6	(67)	(85)	(96)	(122)
Profit before tax	2,123	1,621	1,419	1,385	1,218
Corporation tax	(509)	(427)	(357)	(343)	(307)
Net profit	1,614	1,194	1,062	1,042	911
Minority interests	1	-	-	6	(2)
Net profit including	1,613	1,194	1,062	1,048	909
minority interests
Foreign exchange gain/(loss), net	68	56	(34)	5	(50)
Interest income/(costs)	(23)	(140)	(106)	(78)	(26)
Other financial items	(39)	17	55	(23)	(46)
Total financial income/(costs)	6	(67)	(85)	(96)	(122)
Return on invested capital	22.2%	20.3%	19.5%	21.7%	20.2%
after tax (ROIC)
Earnings per DKK 10 share	25.75	19.24	17.17	16.93	14.46
Average no. of A/B shares, (million)	62.6	62.1	61.9	61.9	62.9
Earnings per DKK 10 share	25.25	18.93	16.86	16.47	14.09
(diluted)
Average no. of A/B shares, diluted (million)	63.9	63.1	63.0	63.6	64.5
Net interest-bearing debt	346	949	1,380	1,769	1,455
Equity ratio	62.2%	53.6%	45.1%	41.3%	42.6%
Return on equity	23.6%	23.1%	26.1%	29.5%	25.4%

1.3 Income statement

			% change
(DKK million)	2010	2009	Y/Y
Revenue	9,724	8,448	15
Cost of goods sold	(4,312)	(3,748)	15
Gross profit	5,412	4,700	15
Sales and distribution costs	(1,242)	(1,118)	11
Research and development costs	(1,360)	(1,207)	13
Administrative costs	(762)	(751)	1
Other operating income, net	69	64	8
Operating profit (EBIT)	2,117	1,688	25
Financial income	113	153	(26)
Financial costs	(107)	(220)	(51)
Profit before tax	2,123	1,621	31
Corporation tax	(509)	(427)	19
Net profit	1,614	1,194	35
Attributable to:
Shareholders in the parent company	1,613	1,194
Minority interests	1	-

1.4 Statement of comprehensive income

	2010	2009
(DKK million)
Net profit	1,614	1,194
Other comprehensive income
Fair value adjustment of Novo Nordisk stock	-	-
- transferred to Financial income/costs	-	(29)
Currency translation of subsidiaries and minority interests	465	84
Tax related to hedges of net investments in foreign subsidiaries	(23)	5
Cash flow hedges	(39)	195
- transferred to Financial income/costs	(28)	(75)
Tax related to cash flow hedges	13	5
Other comprehensive income, net of tax	388	185
Comprehensive income, total	2,002	1,379
Attributable to:
Shareholders in the parent company	2,000	1,380
Minority interests	2	(1)

1.5 Segment information

		2010				2009
(DKK million)	Enzyme	Business BioBusiness	Corporate	Total	Enzyme Business	BioBusiness	Corporate	Total	% change
Revenue	9,109	615		9,724	7,798	650		8,448	15%
Cost of goods sold	3,771	541		4,312	3,322	426		3,748	15%
Gross profit	5,338	74		5,412	4,476	224		4,700	15%
Gross margin	58.6%	12.0%		55.7%	57.4%	34.5%		55.6%
Sales and distribution costs			1,242	1,242			1,118	1,118	11%
Research and development costs			1,360	1,360			1,207	1,207	13%
Administrative costs			762	762			751	751	1%
Other operating income, net			69	69			64	64	8%
Operating profit				2,117				1,688	25%
Capital expenditure
Property, plant and equipment	950	264	126	1,340	731	171	107	1,009
Capital expenditure, total	950	264	126	1,340	731	171	107	1,009

Novozymes' operating segments reflect the way the activities are organized and controlled. Most of the production facilities are common to Enzyme Business as a whole, which is why the activities are considered to be integrated. Therefore, Enzyme Business cannot be subdivided into further activities. Gross profit is the primary parameter used when management evaluates the performance of the segments.

Cost of goods sold is allocated directly. The functions for Sales and distribution, Research and development, and Administrative are considered as working for both segments and their costs are therefore allocated to the Corporate function. Revenue between the individual segments is deducted from the revenue of the selling company and amounts to DKK 16 million in 2010 (DKK 24 million in 2009).

Appendix 2: Distribution of sales

2.1 By industry

	2010	2009	% change	% currency	% change in
(DKK million)				impact	local currency
Enzymes	9,109	7,798	17	5	12
- detergent enzymes	3,151	2,672	18	3	15
- technical enzymes	3,065	2,600	18	6	12
- food enzymes	2,128	1,801	18	5	13
- feed enzymes	765	725	6	6	0
BioBusiness	615	650	(5)	7	(12)
- microorganisms	429	415	3	7	(4)
- BPI	186	235	(21)	7	(28)
Sales	9,724	8,448	15	5	10

2.2 By geographical area

	2010	2009	% change	% currency	% change in
(DKK million)				impact	local currency
Europe, Middle Eas t & Africa	3,564	3,212	11	1	10
North America	3,580	3,046	18	6	12
As ia P acific	1,827	1,595	15	8	7
Latin America	753	595	27	11	16
Sales	9,724	8,448	15	5	10

2.3 Quarterly sales by industry

		2010				2009			% change
(DKK million)	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1	Q4/Q4
Enzymes	2,263	2,421	2,271	2,154	2,022	1,988	1,877	1,911	12
- detergent enzymes	780	872	765	734	680	685	650	657	15
- technical enzymes	777	775	784	729	724	651	624	601	7
- food enzymes	506	583	545	494	433	463	449	456	17
- feed enzymes	200	191	177	197	185	189	154	197	8
BioBusiness	141	105	198	171	145	130	160	215	(3)
- microorganisms	62	80	145	142	53	85	117	160	17
- BPI	79	25	53	29	92	45	43	55	(14)
Sales	2,404	2,526	2,469	2,325	2,167	2,118	2,037	2,126	11

2.4 Quarterly sales by geographical area

		2010				2009			% change
(DKK million)	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1	Q4/Q4
E urope, Middle Eas t & Africa	887	928	882	867	881	823	770	738	1
North America	878	916	936	850	719	750	740	837	22
As ia Pacific	446	468	474	439	403	396	394	402	11
Latin America	193	214	177	169	164	149	133	149	18
S ales	2,404	2,526	2,469	2,325	2,167	2,118	2,037	2,126	11

Appendix 3: Statement of cash flows and financial resources

	2010	2009
(DKK million)
Net profit	1,614	1,194
Reversals of non-cash items	1,340	1,539
Corporation tax paid	(609)	(594)
Interest received	24	61
Interest paid	(87)	(210)
Cash flow before change in working capital	2,282	1,990
Change in working capital
(Increase)/decrease in receivables	(239)	(264)
(Increase)/decrease in inventories	(13)	43
Increase/(decrease) in trade payables and other liabilities	267	46
Increase/(decrease) in exchange gain/loss	27	2
Cash flow from operating activities	2,324	1,817
Investments
Purchase of intangible assets	(3)	(11)
Sale of intangible assets	-	5
Sale of property, plant and equipment	3	37
Purchase of property, plant and equipment	(1,326)	(1,009)
Cash flow from investing activities before acquisitions	(1,326)	(978)
Free cash flow before acquisitions	998	839
Acquisition of activities and companies	(23)	-
Free cash flow after acquisitions	975	839

Appendix 4: Balance sheet and Statement of shareholders' equity

4.1 Balance sheet

Assets	2010	2009
(DKK million, end of period)	Q4	Q4
Completed IT development projects	33	7
Acquired patents, licenses, and know-how	513	629
Goodwill	513	443
IT development projects in progress	11	45
Intangible assets	1,070	1,124
Land and buildings	2,053	2,023
Plant and machinery	1,729	1,549
Other equipment	384	326
Property, plant and equipment under construction	1,700	906
Property, plant and equipment	5,866	4,804
Deferred tax assets	71	62
Other financial assets (non-interest-bearing)	50	1
Total non-current assets	7,057	5,991
Raw materials and consumables	216	237
Goods in progress	402	411
Finished goods	1,022	887
Inventories	1,640	1,535
Trade receivables	1,772	1,468
Tax receivables	232	210
Other receivables	249	215
Receivables	2,253	1,893
Other financial assets (interest-bearing)	-	-
Other financial assets (non-interest-bearing)	178	187
Total other financial assets	178	187
Cash at bank and in hand	1,465	1,284
Total current assets	5,536	4,899
Total assets	12,593	10,890

Liabilities and shareholders' equity	2010	2009
(DKK million, end of period)	Q4	Q4
Common stock	650	650
Treasury stock	(1,479)	(1,624)
Other comprehensive income	540	154
Retained earnings	8,113	6,651
Minority interests	12	10
Total shareholders' equity	7,836	5,841
Deferred tax liabilities	493	694
Long-term employee benefits	13	13
Non-current provisions	169	125
Non-current financial liabilities (interest-bearing)	1,542	1,674
Non-current financial liabilities (non-interest-bearing)	32	22
Total non-current liabilities	2,249	2,528
Financial liabilities (interest-bearing)	269	559
Financial liabilities (non-interest-bearing)	22	73
Provisions	50	30
Trade payables	764	531
Tax payables	86	97
Other current liabilities	1,317	1,231
Total current liabilities	2,508	2,521
Total liabilities	4,757	5,049
Total liabilities and shareholders' equity	12,593	10,890
4.2 Statement of shareholders' equity
	2010	2009
(DKK million)	Q4	Q4

Total equity – end of period	7,836	5,841
Minority interests – end of period	12	10
Comprehensive income	2	(1)
Minority interests – beginning of period	10	11
Shareholders' equity excl. minority interests	7,824	5,831
Comprehensive income	2,000	1,380
Tax of equity items	147	215
Stock-based payment	60	61
Sale of treasury stock	145	36
Dividend paid	(359)	(326)
beginning of period	5,831	4,465
Shareholders' equity excl. minority interests –

Appendix 5: Product launches in 2010

Q1 2010	Cellic ® CTec2 – a unique and improved cellulas e complex for cos t-effective hydrolys is for commercial production of bioethanol from cellulos ic feeds tock. High convers ion efficiency on acid and neutral pretreated feeds tocks .
Q1 2010	Cellic ® HTec2 – an improved hemicellulas e complex for commercial production of ethanol from cellulos ic feeds tock that provides a hydrolys is boos t option over Cellic CTec2, i.e., improves C5 s ugar yields .
Q1 2010	Novamyl® S team – an enzyme for the Chines e s teamed bread market allowing longer las ting fres hnes s .
Q1 2010	BG MaxTM – a combination of microorganis ms and enzymes des igned to maximize biogas potential and improve the efficiency of anaerobic was tewater s ys tems .
Q2 2010	S pirizyme® Excel – a s accharification enzyme for the ethanol indus try enabling higher convers ion of s tarch into s ugars and hence improving productivity for ethanol producers .
Q2 2010	Pectinex® Ultra AFP – a new generation of pectinas es developed for s econdary mas h treatment to break down the cell wall of fruits , thus providing improved performance in fruit proces s ing.
Q4 2010	XPect® – a new detergent enzyme targeting fruit, juice, and other pectin-bas ed s tains .
Q4 2010	Vinoflow® Max – a new concept for the wine indus try, enabling the large wine producers to optimize filtration proces s es , thereby minimizing production los s es .

Appendix 6: Company announcements for 2010

Excluding management's trading in Novozymes s hares
January 21, 2010	Group financial s tatement for 2009
March 4, 2010	Annual S hareholders ' Meeting 2010
April 29, 2010	Group financial s tatement for the firs t quarter of 2010
Augus t 12, 2010	Group financial s tatement for firs t half of 2010
October 28, 2010	Group financial s tatement for firs t nine months of 2010
December 8, 2010	Change in Novozymes ' Board of Directors
December 20, 2010	Acquis ition of EMD/Merck Crop BioS cience

Appendix 7: Financial calendar 2011–2012

January 21, 2011	Group financial statement for 2010
March 2, 2011	Annual Shareholders' Meeting
April 29, 2011	Group financial statement Q1 2011
August 11, 2011	Group financial statement 1H 2011
October 28, 2011	Group financial statement 9M 2011
January 19, 2012	Group financial statement for 2011