Chr Hansen A/S : Sustainability roadshow presentation (January 2021)

Sustainability

Roadshow presentation 2020/21

January 2021

1	© 2020 Chr. Hansen. All rights reserved.

Safe harbor statement

This presentation contains forward-looking statements that reflect management's current views with respect to certain future events and potential financial performance. Forward-looking statements are other than statements of historical facts. The words "believe," "expect," "anticipate," "intend," "estimate," "outlook," "will," "may," "continue," "should" and similar expressions identify forward-looking statements.

Forward-looking statements include statements regarding: objectives, goals, strategies, outlook and growth prospects; future plans, events or performance and potential for future growth; liquidity, capital resources and capital expenditures; economic outlook and industry trends; developments of the Company's markets; the impact of regulatory initiatives; and the strength of competitors. The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in records and other data available from third parties.

Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and may be beyond our control. Such risks, uncertainties, contingencies and other important factors could cause the actual results of the Company or the industry to differ materially from those results expressed or implied in this presentation by such forward-looking statements.

The information, opinions and forward-looking statements contained in this presentation speak only as at the date of this presentation, and are subject to change without notice. The Company and its respective agents, employees or advisors do not intend to, and expressly disclaim any duty, undertaking or obligation to, make or disseminate any supplement, amendment, update or revision to any of the information, opinions or forward- looking statements contained in this presentation to reflect any change in events, conditions or circumstances beyond what is required by applicable law or applicable stock exchange rules and regulations.

By viewing this presentation, you acknowledge and agree to be bound by the foregoing limitations and restrictions.

2	© 2020 Chr. Hansen. All rights reserved.

Chr. Hansen is a microbial powerhouse

with leading market positions across different end-markets in food, health and agriculture

FOOD CULTURES & ENZYMES	HEALTH & NUTRITION
68%	32%
of continuing operations
in Q1 2020/21

CHEESE AND	WINE AND	PROBIOTICS
FERMENTED MILK	MEAT

2025 Strategy

HUMAN ANIMAL

HEALTH HEALTH

FERMENTED	BIOPROTECTION	PLANT	LIVE	HMOS
PLANT BASES		HEALTH	BIOTHERAPEUTICS1

	1 Does not contribute to organic growth (50-50 JV with Lonza).
3	© 2020 Chr. Hansen. All rights reserved.

We address global challenges

with the Power of Good Bacteria™

Food production	1/3 of all food is wasted	Aging population, rise	70% agricultural
accounts for nearly 1/3	equal to 8% of global	in non-communicable	efficiency increase is
of global greenhouse	greenhouse gas	diseases and antibiotic	needed to feed the
gas emissions	emissions	resistance	future population

FOOD CULTURES & ENZYMES

Our Good Bacteria can:

HEALTH & NUTRITION

Increase productivity	Extend shelf life of	Create great	Support gut &	Potentially cure	Reduce use of	Replace chemical
in yogurt and cheese	foods and protect	healthy and	immune health in	diseases as 'bugs	AGPs in livestock	pesticides in crop
manufacturing	against pathogens	tasty foods	adults and infants	as drugs'	production	farming

4	© 2020 Chr. Hansen. All rights reserved.

We drive industry-leading profitable growth to grow a better world. Naturally.

Financial and non-financial ambitions until 2024/25

FINANCIALS

Creating value for shareholders.

Industry-leading growth

• Mid-tohigh single-digit organic growth CAGR

Improving profitability

• Underlying expansion in EBIT margin b.s.i. before portfolio changes and FX

Strong cash flow generation

• Free cash flow b.a.s.i. to grow faster than absolute EBIT b.s.i.

PRODUCTS

More than 80% of revenue from sustainable products.

• 25m hectares covered with natural solutions
• 200m people consuming our probiotics
• 2m tons of yogurt waste reduced

PLANET

Limit global temperature rise to 1.5oC.

• 100% Renewable energy
• 100% Circular management of biowaste
• 100% Key packaging materials recyclable

PEOPLE

A diverse, engaged and safe workforce.

• 1:1 Female employees and women in management
• Top 25 Score in engagement matters survey
• < 1.5 Lost-Time Incident Frequency

5	© 2020 Chr. Hansen. All rights reserved.

We aim for more than 80% of our revenue to contribute directly to the United Nation's Global Goals

CONTRIBUTION TO GLOBAL GOALS

in % of gross revenue1

FARMLAND TREATED WITH NATURAL SOLUTIONS2 in m ha

YOGURT WASTE SAVED	PROBIOTICS CONSUMED
in m tons	in m people3

81%

82%

79%

81%

>80%

2.2

25

13.6

10.4

6.7

3.5

2.0

200

163

0.8

0.6

0.4

0.2

0.1

16/17

18/19

24/25

15/16

17/18

19/20

24/25

1. Continuing operations.
2. Plant Health or silage inoculants.
3. New KPI, no previous data available. Excl. acquisitions.

15/16

17/18

19/20

24/25

15/16

17/18

19/20

24/25

6

Direct impact

Strong opportunity

Impact

Opportunity

Indirect impact

Limited opportunity

We focus on the three SDGs where we can make the strongest impact

Impact category

Improving food and the environment

Increase productivity and yield		
Reduce waste		
Substitute artificial ingredients		
Increase food safety		
Improving animal and human health
Enhance animal welfare	
Promote health and well-being	
Reduce salt, sugar, fat and lactose	
Ensure access to nutrition		

7

Our 2025 Strategy embeds our commitment to sustainability across all pillars

Strategic ambition until 2024/25

Creating a

differentiated bioscience company with focus on microbial and fermentation technology platforms

2012/13 - 2018/19

NATURE'S NO. 1

2020/21 - 2024/25

2025 STRATEGY

LEVERAGE

microbial platform to grow lighthouses and expand into new areas

REINVEST

in core platforms FC&E, Human and Animal Health

REVIEW

strategic options for non-microbial assets

• Natural Colors division sold to EQT (closing spring 2021)

EXTEND microbial platform through M&A and partnerships

© 2020 Chr. Hansen. All rights reserved.

We REINVEST in our core platforms

to defend and further strengthen our market positions in dairy and meat, Human and Animal Health

FOOD CULTURES		HEALTH
& ENZYMES		& NUTRITION
NEW:				NEW:
Probiotics				Pet food
in food

Dairy	Probiotics	Human Health	Animal Health
and meat	for fermented milk	Dietary supplements	Cattle, swine
		and infant formula	and poultry

9	© 2020 Chr. Hansen. All rights reserved.

We bring new innovations to dairy farmers

to help them produce more efficiently and sustainable

We have product solutions for both driving efficiencies and creating healthier, tasty, clean-label products.

CHY-MAX® SUPREME		SWEETY® AND NOLA® FIT		FRESHQ®
FOR HIGHER CHEESE YIELDS		FOR LESS SUGAR		FOR LESS FOOD WASTE
Cost saving		Cost saving		Cost saving
2,000 tons less milk1		~0.5% of cost of goods sold		5,000 tons saved milk1
CO2 savings		Health benefit		CO2 savings
3,000 tons		Up to 20%		7,500 tons
	reduction in added sugar

	1 Illustrative example for average dairy producing 20,000 tons cheese and 100,000 tons yogurt and sourcing 300,000 tons of milk.
10	© 2020 Chr. Hansen. All rights reserved.

Antimicrobial resistance

is one of the top 10 treat to global health

EU to reduce the sale of antimicrobials for farmed animals and in aquaculture

by 50% until 2030.

Global deaths

linked to antibiotic

resistant bacteria could

rise from 700,000 today to 10 million by 2050.

53% of antibiotics

used by Chinese farmers

were used as growth promoters in 2018.

75% of antibiotics used globally are given to animals

raised for food.

Antimicrobial

resistance is one of

the top 10 treat to global health.

	Sources: Nature (2020), WHO (2020), Foodnavigator (2020).
11	© 2020 Chr. Hansen. All rights reserved.

Consumers and regulators are calling for less antibiotic usage

in livestock productions - our Animal Health probiotics can be part of the solution

BOVAMINE®

FOR DAIRY AND BEEF CATTLE

• Increase milk yield
• Reduction in pathogens
• Decrease in antibiotic drug cost

BIOPLUS®

FOR SWINE

• Reduction in piglet mortality rate
• Decrease in feed used per kg weight gain
• Better defense against viral challenges

GALLIPRO®

FOR POULTRY

• Feed cost savings
• Decrease in pathogens
• Same performance without AGPs

12	© 2020 Chr. Hansen. All rights reserved.

In Human Health we want to be the voice of science

and bring best-documented probiotics to supplements and food consumers

OUR STRAINS ARE THE BEST DOCUMENTED IN THE WORLD AND WE CONTINUE TO INVEST IN SCIENCE AND DOCUMENTATION

Number of hits by strain name1

0

100

200

300

400

500

600

700

800

LGG®

BB-12®

THE PROBIOTIC INSTITUTE2 LAUNCHED TO EDUCATE HEALTH CARE PROFESSIONALS AND CONSUMERS ON THE BENEFITS OF PROBIOTICS

LA-5®

GR-1®

RC-14®

	1 Source: PubMed.
	2 Disclaimer: The Probiotic Institute is an online platform from Chr. Hansen's US subsidary Chr. Hansen Inc. And is is intended for U.S. audiences only.
13	© 2020 Chr. Hansen. All rights reserved.

We LEVERAGE our Microbial Platform to develop lighthouses

that bring microbial solutions to new applications in food, health, farming and pharma

FOOD CULTURES	HEALTH
& ENZYMES	& NUTRITION

Bioprotection	Fermented Plant Bases	Plant Health	Live Biotherapeutics	HMOs
Reduce food spoilage	'Fermented milk' alternatives	Microbial crop protection	Contract manufacturing for	Prebiotics for infant
and increase food safety	and fermented beverages	for more sustainable farming	live biotherapeutics (Lonza JV)	formula (Jennewein)
Estimated addressable markets1
EUR 200m	EUR 1bn	EUR <100m	EUR >100m	EUR 400m	EUR >1bn	EUR 150-200m	EUR >1bn	EUR >400m	EUR >1bn
2025	Long-term	2025	Long-term	2025	Long-term	2025	Long-term	2025	Long-term

1 Management estimates.

LIGHTHOUSE: New business area of strategic importance with minimum revenue potential of EUR 100m per year and above Group growth rates.

14	© 2020 Chr. Hansen. All rights reserved.

We develop bioprotective cultures

that can extend shelf life and increase food safety across a number of applications

APPLICATION	FERMENTED	CHEESE	FERMENTED	OTHER	DAIRY & MEAT	FRUITS
	MILK		MEATS	MEATS & FISH	ALTERNATIVES	& VEGETABLES
Extend shelf life & reduce food waste					
Value
proposition						
Clean labelling & food safety
Product offering
Capabilities
Commercial/ market access
Opportunity Penetration today	~10%	<5%	~10%		<1%

15	© 2020 Chr. Hansen. All rights reserved.

Fermented Plant Bases: New emerging lighthouse

captures trend towards alternative protein sources and healthier beverages

GROWTH DRIVERS

Changing consumer preferences

with focus on health and more sustainable consumption

Government and NGO support

driven by global climate agenda and increasing protein demand

Improving product quality, availability and pricing

NEW LIGHTHOUSE:

Fermented Plant Bases

'FERMENTED MILK' ALTERNATIVES

Solutions for spoonable and drinkable formats

ACCELERATE

FERMENTED BEVERAGES

Solutions for non-/low-alcohol beer & fermented tea

'MEAT' ALTERNATIVES

EXPLORE

'CHEESE' ALTERNATIVES

16	© 2020 Chr. Hansen. All rights reserved.

We use fermentation to transform proteins into great foods

• no matter which base

	NUTRITIONAL VALUE	ENVIRONMENTAL IMPACT
		Per 100g			Per 1kg
					Water	Carbon	Land
	Calories	Protein	Calcium	Vitamin	footprint	footprint	use
	(kcal)	(g)	(mg)	B12 (μg)	in l	in kg CO2 eq.	in m2
Cow's milk	65.1	3.33	120	0.24	1,020	23-52	33-158
Nuts Coconut milk	31	0.21	18	-	9,063	1.5	4.3
Soy milk	37.1	3.31	12	-
Cereals					1,644l	0.54	1.4
Oat milk	42.6	<0.46	1	-

MICROBIAL SOLUTIONS

FERMENTATION for texture, taste, less sugar/salt		BIOPROTECTION for shelf life extension, clean labelling, food safety		PROBIOITCS gut health, immunity, novel indication areas		ENZYMES coagulation, lactose reduction, productivity
				for		for

	Sources: Euromonitor (2020), CIQUAL, USDA National Nutrient Database 2019, Nijdam D et al. Food Policy. 2012 (37) 6,p760-770; Treu et al. Journal of Cleaner Production161 (2017): 127-142,
	waterfootprint.org/en/waterfootprint/product water footprint.
17	© 2020 Chr. Hansen. All rights reserved.

We have a strong product pipeline in Plant Health

to bring biological crop protection solutions to market

TARGET CROPS

In-furrow applications:

Sugarcane

Coffee

Fruits & vegetables

Seed coating:

Soy

Corn

Beans

Cotton

PRODUCT PIPELINE

QUARTZO®	Drive penetration in sugarcane in Brazil and expand in LATAM
ACCUDO®	Biostimulant launched in South Korea; awaiting EU registration (FY21)
First biofungicide	First biofungicide to be launched (FY21)
	Further products in
	development and
	registration

PRESENCE®	Drive penetration in soy in Brazil and expand in LATAM
AVODIGEN®	Drive adoption in North America and register for other geographies
	Further products in
	development and
	registration

50% reduction

in chemical pesticides targeted by EU until 20301

27

Chemicals may be banned in India which is the fifth largest market for crop protection2

	1 See European Commission EU Green Deal, Farm to Fork strategy.
	2 Indian Government published draft proposal to ban 27 chemical pesticides that present 40% of total crop protection sales in May 2020.
18	© 2020 Chr. Hansen. All rights reserved.

Our joint venture Bacthera

is a crucial enabler for the emerging live biotherapeutics or 'bugs as drugs' industry

RAPIDLY EMERGING MARKET FOR LIVE BIOTHERAPEUTICS

FULL SUPPLY CHAIN OFFERING WITH TRULY DISTINT CAPABILITIES

+100 THERAPIES TARGETING MICROBIOME IN DEVELOPMENT

Depression, Alzheimer's, Parkinson's

Psoriasis, acne, atopic dermatitis

Crohn's disease, IBD, C. diff. infection

Urinary infection, fertility issues

Cancer (with immunotherapy), diabetes, obesity, allergy

EUR >1bn

long-term market potential

EUR 150-200m in 2025 (only (clinical trial)

PRE-CLINICAL

DEVELOPMENT

STRAIN INTAKE

(DK)substanceDrug	(CH)product Drug
FERMENTATION &
FREEZE DRYING

FORMULATION & DRUG

DELIVERYCOMMERCIAL PRODUCTION

• Organization established (+50 FTEs) and first customer contracts signed; strong pipeline
• Supply chain build-out progressing well with first phase of investments to be completed by end of Q1 FY21 (EUR 90m in total FY20-22 split between CHR/Lonza)
• Largely self-funding after FY22

19	© 2020 Chr. Hansen. All rights reserved.

We EXTEND our Microbial Platform through M&A and partnerships

to further enhance our microbial and fermentation capabilities

EXTEND

COMPLEMENTED WITH

BOLT-ON ACQUISITIONS

2015	2016	2016	2018	2020	2020	2020
DIAL	NPC	LGG	Hundsbichler	HSO	UAS Labs	Jennewein

Microbial

Platform

STRONG NETWORK

OF GLOBAL PARTNERS

20	© 2020 Chr. Hansen. All rights reserved.

High growth in global HMO market

driven by consumer demand for 'close-to-nature' infant formula and increasing scientific evidence

HMOS ARE THE THIRD LARGEST COMPONENT IN HUMAN MILK

Nutrient composition in human milk

Proteins

DEMAND FOR HMOS IS EXPECTED TO INCREASE MEANINGFULLY

Addressable market in EUR1

HMOs

2'-FL

>1bn	Chr. Hansen's
5th lighthouse

Fat

+150

HMO types

known today

Lactose

Other HMOs

Selected health benefits:

• Support neuronal & brain development of infants
• Reduce risk of NEC in pre-terms infants
• Improve digestive health & strengthen immune system
• Immunomodulatory effect
• Act against bacterial/viral pathogens and toxins

1 Management estimates.

>400m

>100m

Today 2025 Long-term

Growth drivers:

• Premiumization trend in infant formula to drive penetration
• Regulatory approval in NA, Europe and parts of LATAM and Asia; further countries to come
• Increasing scientific evidence around health benefits

• Combination products and new applications

21	© 2020 Chr. Hansen. All rights reserved.

We implement our 2025 Strategy across five dimensions

How to win

1. CUSTOMERS
2. INNOVATION
3. OPERATIONS
4. PEOPLE
5. PURPOSE

Further expand customer base and global reach

Accelerate new product development and commercialization

Realize scalability benefits and operational efficiencies

Safeguard culture and invest in talent management

Drive sustainability agenda to Grow a better world. Naturally.

• and excel in customer centricity by expanding route-to-market, adding resources in application, sales and marketing and advancing our digital agenda.
• with dedicated project management and a new governance set-up, as well as through the expansion of R&D partner network and digitalization.
• through future capacity expansions, process innovations, robotics and automation.
• with a commitment to diversity, creating a safe workplace, driving a mindset

of best and attracting millennials.

… and committing to limit global temperature rise to 1.5 degrees.

22	© 2020 Chr. Hansen. All rights reserved.

We aim to further expand our global presence

and strengthenour position in emerging markets

CUSTOMERS

OUR R&D AND PRODUCTION FOOTPRINT	Denmark1
	Germany1
United States1			Russia
		Japan
	France	Czech
	Republic
		China
		Middle East1
Mexico			India
			Singapore1

Brazil

R&D centers

Australia

Application centers

Argentina

Production

	1 New application center or further expansion/investments during strategy period.
23	© 2020 Chr. Hansen. All rights reserved.

We have a strong and well-balanced R&D pipeline

INNOVATION

across core businesses and lighthouses to drive growth during 2025 Strategy period and beyond

FOOD CULTURES & ENZYMES

HEALTH &

NUTRITION

				Short-term		Mid- to long-term
		DAIRY & MEAT		Maintain lead in core range e.g. next generation dairy enzymes, sugar reduction
		PROBIOTICS			Probiotic solutions for new food applications (beyond traditional yogurt)
					3rd gen fermented milk
		BIOPROTECTION		Fermented plant bases	Cheese and non-fermented meat
		FERMENTED		Yogurt alternatives	Non-alcoholic beer	Cheese and meat alternatives
		PLANT BASES

		HUMAN HEALTH	New strains for infant and dietary supplements
		ANIMAL HEALTH	Pet health	Next generation probiotic strains for swine and cattle
		PLANT HEALTH	New biostimulant/biofungicide	Next generation bionematicides

24	© 2020 Chr. Hansen. All rights reserved.

We will expand our production capacity

while realizing optimization initiatives and synergies from UAS Labs integration

OPERATIONS

MOST OF OUR CAPEX PROJECTS ARE CENTERED AROUND BUILDING CAPACITY

Illustrative based on capex spend in the last 5 fiscal years

Replacements/

Maintenance

Efficiency/	Capacity/
Sustainability/	New Business
Safety

WE CONTINUE TO DRIVE OPERATIONAL EFFICIENCIES THROUGH AMBITIOUS EFFICIENCY PROGRAMS ACROSS LEAN, PROCESS INNOVATIONS & DIGITALIZATION

Fermentation	Downstream	Robots and
yields	optimization	automation
Increasing	Optimizing separation	Reduce repetitive
fermentation yield of	techniques to reduce	workload and manning
Animal and Plant	energy consumption	e.g. via intelligent
Health production	and increase yields	internal transportation
strains via fed-batch		system
process

25	© 2020 Chr. Hansen. All rights reserved.

We commit to further reducing our environmental footprint

through targeted initiatives in the areas of renewables, circular management of waste and recycling OPERATIONS

INITIATIVES

RENEWABLE

ENERGY

CIRCULAR

MANAGEMENT

OF BIO WASTE

AMBITION FOR GLOBAL OPERATIONS UNTIL 2024/25

compared to 2018/19

40% 2018/19

Use electricity from renewable

sources for all global operations

100% 2024/25

69%

Recycle or reuse biowaste generated from our operations

100%

KEY PACKAGING

MATERIALS RECYCLABLE

Deliver all products with recyclable packaging materials

67%

100%

SBT-INITIATIVE JOINED IN JULY 2020 COMMITTING TO LIMIT GLOBAL TEMPERATURE RISE TO 1.5 oC

ACTIVITIES TO BE INITIATED DURING 2021/2022 TO START REPORTING IN LINE WITH TCFD RECOMMENDATIONS

26	© 2020 Chr. Hansen. All rights reserved.

We safeguard our culture and invest

in talent management and diversity

PEOPLE

SAFEGUARD CULTURE & SUCCESSFUL ONBOARDING OF NEW EMPLOYEES

• Top 25% score in employee engagement survey
• 100% of new employees introduced to culture model
• 2019/20 performance: 100 % introduced

COMMITMENT TO TALENT MANAGEMENT AND DIVERSITY

• 1:1 ratio between female employees and managers
• 2019/20 performance: 43:37 ratio between female employees and managers

SAFE PLACE TO WORK

• <1.5 lost-time incident frequency
• 2019/20 performance: LTIF: 1.3

ATTRACTIVE COMPENSATION FOR MANAGEMENT

• Performance metrics aligned with shareholder interests
• In line with industry benchmarks

27

We strive everyday to grow a better world. Naturally.

PURPOSE

SUSTAINABLE	BETTER FOOD	IMPROVED
AGRICULTURE	PRODUCTION	HEALTH

Natural plant	Better quality	Animal	Quality and	Efficient	Less waste	Healthier	Supporting	Next
protection	silage	nutrition	safety	production		food	health	generation
								health

28

Executive compensation linked to sustainability

and closely aligned with shareholder interests; strong incentive component

SHORT TERM: ANNUAL INCENTIVE PROGRAM FOR CEO AND CFO

• Based on group financial and non-financial targets
• • Non-financialKPIs related to customer service, quality, diversity, safety and environment
• Bonus is paid as a minimum 1/3 in Restricted Stock Units and 2/3 in cash; normally accounts for 25-30% of total remuneration package

Organic growth	EBIT	FCF	Non-financial
40%	30%	10%	20%

In % of fixed pay1	Target	Max
CEO	70%	100%
CFO/EVP	50%	70%

LONG TERM: PROGRESSIVE THREE-YEAR INCENTIVE PROGRAM

• Requires personal investment in Chr. Hansen shares to participate
• Grant value estimated (based on Black-Scholes) at 20-25% of the remuneration package
• Vest in full after three years

TSR relative to	Accumulated	Organic growth Retention
peers 1.5x	EBIT 1.5x	CAGR 1.5x	0.5x

Target matching shares per investment of one share

In % of fixed pay1	Target	Max
CEO	80%	120%
CFO/EVP	60%	90%

	1 Base plus pension.
29	© 2020 Chr. Hansen. All rights reserved.

Strong governance

with diverse competencies and dual management system

DIVERSITY OF BOARD OF DIRECTORS (shareholder electives)

50%

Female

Gender

50%

Male

37%

Danish

Nationality

63%

Non-Danish

87%

Independent

Independence

13%

Not independent

GOVERNANCE

Shareholders

Board of Directors

Audit

Nomination

Remuneration

Scientific

Committee

Committee

Committee

Committee

Executive Board

Corporate

Leadership Team

Organization

30	© 2020 Chr. Hansen. All rights reserved.

Sustainability Board

is responsible for ensuring ownership, involvement and commitment from the entire business in defining, prioritizing and executing Chr. Hansen's sustainability objectives and activities

31	© 2020 Chr. Hansen. All rights reserved.

Sustainability ratings & rankings

Chr. Hansen regularly submit information about our performance to customers and investors via global reporting platforms, such as MSCI, Oekom, Eco-Vadis, Sustainalytics, the Carbon Disclosure Project, FTSE4Good and Sedex.

RATING	RANK	DESCRIPTION
	B	Above sector average (D)
	AA	Robust product safety strategy, strong governance structures
	4th of 121	Ranked 4th in subindustry, Specialty Chemicals
	94th percentile	Awarded silver rating
	✓	Chr. Hansen listed as a constituent
	No. 24	Ranked the 24th most Sustainable Company in the World

32	© 2020 Chr. Hansen. All rights reserved.

A Decade of Action: Climate commitment to Business Ambition for 1.5oC and the Science Based Targets initiative

ROADMAP FOR SCIENCE-BASED TARGETS

Mapping CO2e emissions	Action roadmaps for	Submitting targets for	Target year for reaching
across our value chain	reaching targets	validation to SBTi	Science Based Targets
Q1 FY21	Q2 - Q3 FY21	Q4 FY21	FY30

ACTIVITIES IN SCOPE FOR MAPPING CO2e

33	© 2020 Chr. Hansen. All rights reserved.

We aim for industry-leading organic growth

across our two segments

FOOD CULTURES & ENZYMES	HEALTH & NUTRITION	CONTINUING OPERATIONS
Organic growth		EBIT margin

						31.0%	31.5%	32.2%
								33.5%	33.6%	33.7%
34.3%	34.5%	34.3%	34.3%	34.3%	28.3%	29.2%		32.8%	33.1%

12%	9%	12%	8%	5%	2%	14%	8%	9%	9%	10%	11%	11%	8%	6%
15/16	16/17	17/18	18/19	19/20	15/16	16/17	17/18	18/19	19/20	15/16	16/17	17/18	18/19	19/20

34	© 2020 Chr. Hansen. All rights reserved.

We remain committed to driving gross margin expansion

while investing in sales & marketing and R&D to support future growth

COST OF SALE % of revenue		Increase due to higher COVID-	SALES & MARKETING EXPENSES % of revenue
				19 related freight costs
						13.2%	13.2%	14.1%	13.9%
40.3%	39.5%	39.2%	38.5%	39.8%	12.1%

15/16	16/17	17/18	18/19	19/20	24/25	15/16	16/17	17/18	18/19	19/20	24/25
ADMINISTRATIVE EXPENSES % of revenue			R&D EXPENSES INCL. CAPITALIZATIONS % of revenue
7.6%	7.2%	6.8%
	6.5%			8.0%		8.1%	8.1%	8.0%
				7.8%
			5.5%

15/16

16/17

17/18

18/19

19/20

24/25

15/16

16/17

17/18

18/19

19/20

24/25

	Note: Restated figures for continuing operations.
35	© 2020 Chr. Hansen. All rights reserved.

Growth in free cash flow to exceed growth in absolute EBIT

supported by reduced investment needs until 2024/25

CAPEX SPENDING FOR CONTINUING OPERATIONS

in EUR million and % of revenue

~150 -175

12.6% 12.2%

118 119

Ex. HMO

18/19

19/20

20/21E

24/25E

UAS LABS ACQUISITION AND PRODUCTION OPTIMIZATION ALLOW FOR PHASING OF CAPEX PROJECTS TO BEYOND THE STRATEGY PERIOD

Selection of large capex projects	Expected completion
Capacity upgrade, Roskilde	2021/22
Freeze dried & powder packaging, Copenhagen	2022/23
Additional fermentation capacity upgrades, US	2022/23
NEW: HMO production, Kalundborg (phase I)	2022/23-23/24
Additional fermentation capacity upgrades, Germany			2024/25
Innovation campus incl. application center & new pilot plant, Denmark	2022/23
Next large-scale dairy expansion	After 2024/25

Postponements of capex due to UAS Labs acquisition:

Expansion of Human Health facility, Roskilde

Dairy alternatives production

36	© 2020 Chr. Hansen. All rights reserved.

Creating shareholder value

with very clear capital allocation priorities

CAPITAL ALLOCATION PRIORITIES

Organic growth	1	Investments into capacity, innovation and people

Bolt-on acquisitions	2	To strengthen technology platform
and/or expand market access

Ordinary dividend1	3	40-60% of net income

		Distribution of excess cash	4	Extraordinary dividend or share buy-back
	1 The dividend proposed will depend on the Board of Directors' assessment of factors such as business development, growth strategy, current leverage and financing needs,
	and there is no guarantee that an ordinary dividend will be proposed or declared in any given year.
37	© 2020 Chr. Hansen. All rights reserved.

WHAT WE WILL NOT DO

• Pursue acquisitions in unrelated areas
• Expand outside microbial and fermentation platform
• Expand enzyme business outside food enzymes
• Become an integrated solutions provider
• Become a full value-chain pharma company

Financial calendar	Contacts
April 15, 2021	Martin Riise
Interim Report Q2 2020/21	Head of Investor Relations
	[phone]
July 8, 2021	[e-mail]
Interim Report Q3 2020/21
	Annika Stern
October 14, 2021	Investor Relations Officer
Annual Report 2020/21	[phone]
	[e-mail]
November 24, 2021
Annual General Meeting 2021

Annemarie Meisling

Head of Sustainability [phone] [e-mail]

Louise Rosenmeier

Sustainability Officer [phone] [e-mail]

38	© 2020 Chr. Hansen. All rights reserved.