STPP replacement in laundry detergents Freedom to formulate with multi-enzyme solutions

1. STPP replacement in laundry detergents Freedom to formulate with multi-enzyme solutions

2. NOVOZYMES PRESENTATION AGENDA Market drivers The concept Improve performance Get cost stability Formulate more sustainable detergents Summary: Freedom to formulate!

3. NOVOZYMES PRESENTATION AGENDA Market drivers The concept Improve performance Get cost stability Formulate more sustainable detergents Summary: Freedom to formulate!

4. NOVOZYMES PRESENTATION Raw materials prices are volatile and increasing - while enzymes are price stable Raw materials price development Jan 2006=Index 100 320 300 280 260 240 220 200 AEO 180 LAS 160 MPG Palm Oil 140 Rock Phosphate 120 Zeolite 100 Enzymes 80 0 Jan 2006 2007 2008 2009 2010 Sources: Agglomerations, purchasing.com, Colin A. Houston & Associates, ICISpricing.com, Reuters, World Bank, Novozymes

5. NOVOZYMES PRESENTATION Legislative pressure on the use of phosphates in detergents • USA, 2010 • Ban on use in laundry and dish wash detergents • EU, 2013 • Ban on use in laundry detergents (proposal) • Dish wash detergents to be reviewed 2014 • Baltic Sea, 2015 • Sweden: ban on use in detergents, 2011 • Baltic Sea Action Plan: Restrictions on use in detergents, 2015 Legislation is restricting use of phosphates in detergents Concern over the negative impact of phosphate from household detergents on water quality

6. NOVOZYMES PRESENTATION The industry is moving away from phosphate-based detergents The share of phosphate containing detergents has decreased year-on-year by 16% in Central Western Europe Phosphate-based detergents, % of automatic powder and tablet detergents launched Source: Mintel GNPD, search for automatic detergents in powder or tablet format, listed with ‘phosphate’ or ’phosphates’ in ingredient list. Liquid products were not included as the phosphate content is <5%

7. NOVOZYMES PRESENTATION AGENDA Market drivers The concept Improve performance Get cost stability Formulate more sustainable detergents Summary: Freedom to formulate!

8. NOVOZYMES PRESENTATION Optimizing detergent formulations with multienzyme solutions • Formulation optimization with enzymes can give • Same cost and better performance or • Lower cost and same performance • The right multi-enzyme solution help to optimize performance, keep cost stable and reduce environmental impact by • Replacing a significant part of surfactants • Replacing Sodium Tripolyphosphate (STPP) in an alternative builder system Surfactants Builders Others Surfactants Surfactants Yesterday Today Builders Builders Others Others

9. NOVOZYMES PRESENTATION AGENDA Market drivers The concept Improve performance Get cost stability Formulate more sustainable detergents Summary: Freedom to formulate!

10. NOVOZYMES PRESENTATION Get better stain removal and whiteness performance – efficient enzymes compensate for STPP replacement Overall wash performance is increased with multienzyme solutions in alternative builder systems Novozymes’ Celluclean in a multienzyme solution offers superior whiteness 1,345 1,350 1,324 1,316 1,295 1,300 1,286 1,272 Wash performance, nm R460 Wash performance, nm R460 1,250 1,200 Reference detergent (STPP) STPP+C2 Zeolite +C1 Zeolite +C2 Carbonate +C1 Carbonate +C2 Reference detergent (STPP) Zeolite +C1 Zeolite +C2 Carbonate +C1 Carbonate +C2 Anti-redeposition method: Soil ballast of 1 new WfK sock for each wash cycle. Number of repetitive cycles: 5 Overall wash performance on 13 technical and 8 natural stains C1: 0,66 wt% multienzyme solution,, C2: 1,32 wt% Multienzyme solution Benchmark

11. NOVOZYMES PRESENTATION Bye-bye phosphate, hello cost savings and compactionCase story: European powder detergent Case objective Replace STPP to save on formulation cost, reduce detergent dosage to get a compact detergent, while maintaining performance at both high and low temperatures Solution Introduce a multienzyme solution and change the composition of builder system to replace STPP Result A phosphate-free formulation with performance improvements and a 30% reduction of detergent dosage. Ingredient costs were reduced at the same time as was the environmental impact Wash performance, nm R460 Current formulation Current formulation with with enzymes New formulation, 30% dose reduction New formulation with enzymes, 30% dose reduction Wash conditions: Full scale, EU washing powder, 40ºC, 3 g detergent/L, sum of wash performance on 7 stain groups Benchmark

12. NOVOZYMES PRESENTATION STPP performance can be matched in a 50% reduced Zeolite system with enzymes Overall wash performance is maintained, while Zeolite content is reduced by 50% Novozymes’ Celluclean in a multienzyme solution offers superior whiteness 1,279 1,280 1,272 1,260 1,240 1,220 1,200 1,180 Wash performance, nm R460 Wash performance, nm R460 1,160 1,140 1,131 1,120 1,100 1,077 1,080 1,060 Reference detergent (STPP) Zeolite 50% Zeolite 50% Zeolite +C2 Reference detergent (STPP) 50% Zeolite +C2 Anti-redeposition method: Soil ballast of 1 new WfK sock for each wash cycle. Number of repetitive cycles: 5 Overall wash performance on 13 technical and 8 natural stains C1: 0,66 wt% multienzyme solution,, C2: 1,32 wt% Multienzyme solution Benchmark

13. NOVOZYMES PRESENTATION Improving performance with multienzyme solutions in other alternative builder systems Case objective Identify options to maintain or improve performance in Eastern European detergent, by replacing STPP with an enzyme solution in an alternative builder system Benchmark 700 600 500 400 nm R460 (sum of 12 individual stains) 300 200 100 0 STPP SKS-6 SC/SS STPP+SC/SS SKS-6+SQ No enzyme 0,5% Multienzyme solution • SKS-6 - Layered sodium disilicate δ crystalinne • SQ - Sodium sesquicarbonate (Na2CO3 ·NaHCO3· 2H2O) • SC/SS – blend of sodium carbonate/sodium silicate (AMCOL propietary)

14. NOVOZYMES PRESENTATION Multienzyme solutions can bring your detergent to phosphate-free market benchmark Case objective Match market leading phosphate-free brand by introducing a multi-enzyme solution with cost-neutral impact Case detergent is bleach-free Result Marketleadingphosphate-free brand wasmatchedon performance, whilecostwaskept neutral and the environmentalprofile of the detergent improved 700 600 500 400 Wash performance, nm R460 300 200 100 0 Market leading P-free brand Low tier, non-enzymatic P-free brand Same brand, formulation optimized with 0,3% multienzyme s Washing conditions: LOM, 40ºC, 40 minute wash, 15ºdH, detergent: 5 g/L, 0.3% multienzyme (5 blend) solution Benchmark

15. NOVOZYMES PRESENTATION AGENDA Market drivers The concept Improve performance Get cost stability Formulate more sustainable detergents Summary: Freedom to formulate!

16. NOVOZYMES PRESENTATION Find stability in volatile times with enzymes VOLATILITY The global business environment is affected by many events, leading to high volatility in the markets STABILITY The stable enzyme prices can be used to counter uncertainty –by replacing ingredients with volatile prices, you can stabilize your formulation costs Raw materials price development Jan 2006=Index 100 320 AEO 300 LAS 280 MPG 260 Palm Oil 240 Rock Phosphate 220 Zeolite 200 Enzymes 180 160 140 120 100 80 0 Jan 2006 2007 2008 2009 2010 Sources: Agglomerations, purchasing.com, Colin A. Houston & Associates, ICISpricing.com, Reuters, World Bank, Novozymes

17. NOVOZYMES PRESENTATION Our estimates show a solid case for cost stability and -improvements through STPP replacement Formulation-specific cost profile will vary. Novozymes can assist with cost impact assessment Overall wash performance is increased with multienzyme solutions in alternative builder systems (R460) Cost profile example Cost of one wash, STPP=index 100 1.272 STPP Zeolite + C1 Carbonate + C1 Reference detergent (STPP) Zeolite +C1 Carbonate +C1 Zeolite compact + C1 C1: 0,66 wt% multienzyme solution,, C2: 1,32 wt% Multienzyme solution Source: Detergent component prices Jan11, Novozymes estimate. Cost profile is subject to change according to development in ingredient cost and compositions

18. NOVOZYMES PRESENTATION Reducing dependency on volatile raw materials improves the bottom line in the long term Indexed price development of powder detergents either STPP, Zeolite or Carbone based builder systems, multi-enzyme solution in Zeolite and Carbonate STPP Zeolite Carbonate VOLATILITY STPP prices are highly volatile and have increased over time STABILITY Replacing STPP with a multi-enzyme solution in an alternative builder system increases cost stability Sources: Agglomerations, purchasing.com, Colin A. Houston & Associates, ICISpricing.com, Reuters, World Bank, Novozymes

19. NOVOZYMES PRESENTATION Our estimates show a solid case for significant performance increase at cost stability through STPP replacement Formulation-specific cost profile will vary. Novozymes can assist with cost impact assessment Improving performance with multi-enzyme solutions in other alternative builder systems (R460) Cost profile example Cost of one wash, STPP=index 100 480 STPP SKS-6 STPP/SC/SS SC/SS SKS-6/ SQ SKS-6 STPP/SC/SS SC/SS SKS-6/SQ 0,5% Multienzyme solution Source: Detergent component prices Jan11, Novozymes estimate. Cost profile is subject to change according to development in ingredient cost and compositions

20. NOVOZYMES PRESENTATION AGENDA Market drivers The concept Improve performance Get cost stability Formulate more sustainable detergents Summary: Freedom to formulate!

21. NOVOZYMES PRESENTATION Green wins with enzymes Surfactants Builders • Reduce eutrophication and aquatic toxicity • Increase use of bio-based, renewable ingredients • Safeguard water resources Serving consumer needs: Products that perform better, have a competitive cost profile and are more sustainable • Save energy and time Surfactants Builders • Enable compaction, saving energy and material resources Others

22. NOVOZYMES PRESENTATION Focus: Eutrophication caused by STPP in detergents can be eliminated Zeolite based detergent Gr. PO43- eq. saved/wash Where STPP is used as builder in household detergents it contributes to up to 50% of soluble (bioavailable) phosphorus in municipal wastewater, therefore a reduction in the use of phosphate based detergents should have a positive impact on the eutrophication of surface water bodies* -99% Added Saved (no waste water treatment) Saved (if waste water treatment) Carbonate based detergent Gr. PO43- eq. saved/wash -100% Added Saved (no waste water treatment) Saved (if waste water treatment) *European Commision, http://ec.europa.eu/environment/water/pollution/phosphates/index_en.htm Source: Glennie et al., 2002, Novozymes peer-reviewed LCA and estimate of impact

23. NOVOZYMES PRESENTATION Focus: Reduce eutrophication with enzymes to improve the quality of water • In areas without wastewater treatment systems the waterways are experiencing the direct impact of untreated water both in terms of toxicity and eutrophication • In areas with fully developed wastewater treatment plants, washwater is treated, eco-toxicity and eutrophication reduced, though overflow in capacity constrained situations (eg. floods)  can lead to a significant amount of non-treated water being lead directly into waterways Contribution to eutrophication and aquatic toxicity Detergent Washing machine Wastewater treatment plant River Overflow

24. NOVOZYMES PRESENTATION AGENDA Market drivers The concept Improve performance Get cost stability Formulate more sustainable detergents Summary: Freedom to formulate!

25. NOVOZYMES PRESENTATION Summary • With a multienzyme solution you get freedom and flexibility to formulate • A similar wash performance can be achieved in alternative builder systems compared to STPP with Novozymes’ solutions • Neutral or even reduced cost: Phosphate-free detergents meeting market standards can be formulated ‘for free’ • New consumer claims can be offered • Phosphate-free detergent • Tougher on stains • Cleaner clothes, cleaner conscience • Safeguards water resources • Made with efficient bio-based enzymes

26. STPP replacement in laundry detergents Freedom to formulate with multienzyme solutions