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Hansen A/S for the financial year 1 September 2022 – 31 December 2023. The Annual Report has been prepared in accordance with the Danish Financial Statements Act. In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the Group's and the Parent Company's assets, liabilities and financial position at 31 December 2023 and of the results of the Group's and the Parent Company's operations and consolidated cash flows for the financial year 1 September 2022 – 31 December 2023. Further, in our opinion, the Management's review gives a fair review of the development in the Group's and the Parent Company's activities and financial matters, of the results for the year and of the Group's and the Parent Company's financial position. We recommend that the Annual Report be approved at the Annual General Meeting. Hørsholm Winnie Højvang Bügel CEO Rainer Chapour Lehmann Chairman Morten Enggaard Rasmussen Winnie Højvang Bügel Anders Lund Anisha Goel Bent Knudsen Employee representative Employee representative To the Shareholder of Chr. Hansen A/S Opinion In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the financial position of the Group and the Parent Company at 31 December 2023, and of the results of the Group’s and the Parent Company’s operations as well as the consolidated cash flows for the financial year 1 September 2022 - 31 December 2023 in accordance with the Danish Financial Statements Act. We have audited the Consolidated Financial Statements and the Parent Company Financial Statements of Chr. Hansen A/S for the financial year 1 September 2022 - 31 December 2023, which comprise income statement, balance sheet, statement of changes in equity and notes, including a summary of significant accounting policies, for both the Group and the Parent Company, as well as consolidated statement of cash flows (“financial statements”). Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Statement on Management's Review Management is responsible for Management’s Review. Our opinion on the financial statements does not cover Management’s Review, and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read Management’s Review and, in doing so, consider whether Management’s Review is materially inconsistent with the financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated. Moreover, it is our responsibility to consider whether Management’s Review provides the information required under the Danish Financial Statements Act. Based on the work we have performed, in our view, Management’s Review is in accordance with the Consolidated Financial Statements and the Parent Company Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement in Management’s Review. Management's Responsibilities for the Financial Statements Management is responsible for the preparation of Consolidated Financial Statements and Parent Company Financial Statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, Management is responsible for assessing the Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the financial statements unless Management either intends to liquidate the Group or the Parent Company or to cease operations, or has no realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Parent Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. • Conclude on the appropriateness of Management’s use of the going concern basis of accounting in preparing the financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Parent Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and the Parent Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and contents of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Hellerup PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Allan Knudsen Elife Savas State Authorised Public Accountant State Authorised Public Accountant Chr. Hansen A/S Bøge Allé 10-12 2970 Hørsholm +45 45 74 74 74 Strandvejen 44 2900 Hellerup Financial years 2022/23 and 2021/22 constitute consolidated figures. Financial years 2020/21, 2019/20 and 2018/19 constitute parent company figures. 1) The financial year covers 16 months from 1 September 2022 to 31 December 2023. 2) Ratios for 2022/23 and 2021/22 are calculated on consolidated numbers. Ratios for 2020/21, 2019/20 and 2018/19 are calculated on parent company numbers. 3) Revenue growth in percent for 2022/23 is calculated on consolidated numbers (based on a 12-month period assuming even monthly revenue). Revenue growth for 2021/22, 2020/21, 2019/20, 2018/19 are calculated on parent company numbers. 4) IFRS 16 Leases was implemented using the modified retrospective approach and figures for 2018/19 have not been restated. Financial highlights The financial ratios have been calculated as follows: Gross profit/loss x 100 Gross margin Revenue Operating profit x 100 Operating margin Revenue Operating profit before financial income and expenses x 100 Return on invested capital Total assets end of year Net profit x 100Return on equity Equity end of year Equity x 100Equity ratio Total assets end of year 9775927000 6849540000 5411421000 5351199000 5219517000 5799200000 4197796000 3272590000 3332977000 3278005000 1802801000 1451805000 1024291000 1759407000 1857543000 -736687000 -94340000 -34226000 -162913000 -3504000 959792000 1298179000 1001076000 1525675000 1860416000 574471000 1010045000 812722000 1153070000 1462142000 Inventory Inventory Inventory Inventory Inventory 997053000 766725000 478889000 493627000 488972000 Trade receivables Trade receivables Trade receivables Trade receivables Trade receivables 497254000 470447000 215714000 135058000 170607000 8549216000 8974756000 7145746000 6583771000 3757039000 15098248000 14584977000 11690276000 12705487000 6981798000 1425337000 830252000 769674000 704142000 870337000 0.59 0.61 0.60 0.62 0.63 0.18 0.21 0.19 0.33 0.36 0.12 0.10 0.09 0.14 0.27 0.07 0.11 0.11 0.18 0.39 0.57 0.62 0.61 0.52 0.54 Revenue growth in percent Revenue growth in percent Revenue growth in percent Revenue growth in percent Revenue growth in percent 0.07 0.09 0.01 0.03 -0.01 Management's review Financial review Unusual events For the financial year ending 31 December 2023, Chr. Hansen A/S was a company within the Chr. Hansen Holding A/S Group and was 100% owned by Chr. Hansen Holding A/S. On 12 December 2022, Chr. Hansen Holding A/S and Novozymes A/S announced that the two companies had entered into an agreement to create a leading global biosolutions partner through a statutory merger with Novozymes A/S as the continuing entity. On 30 March 2023, the extraordinary general meetings of Chr. Hansen Holding A/S and Novozymes A/S both approved the proposed combination with a significant majority. On 29 January 2024, all necessary approvals had been obtained, and the final registration of the statutory merger with the Danish Business Authority was successfully completed. Consequently, subsequent to year-end, Chr. Hansen A/S is a fully owned subsidiary of Novozymes A/S. The Company has changed the financial reporting period from 1 September – 31 August to 1 January - 31 December. The transition period covers 1 September 2022 – 31 December 2023. Consequently, the current financial year covers a 16 months period while the comparative financial year covers a 12 months period. The financial reporting period has been changed to reflect the financial reporting period of Novozymes A/S. As the merger was approved subsequent to year-end, Chr. Hansen A/S cannot apply the exemption rules in the Danish Financial Statements Act applied in previous years and therefore has to prepare consolidated financial statements for the financial year ending 31 December 2023 with corresponding comparative figures. The exemption rules are expected to be applied for the financial year 2024. Please refer to note 9 Investments for an overview of subsidiaries included in the Consolidated Financial Statements for Chr. Hansen A/S. This Management’s review covers the environment that Chr. Hansen A/S operated under prior to the merger being approved on 29 January 2024. Principal activities Chr. Hansen is a global, differentiated bioscience company that develops natural ingredient solutions for the food, nutritional, pharmaceutical, and agricultural industries. The Chr. Hansen A/S Group is organized into two business units. The business units are Food Cultures & Enzymes and Health & Nutrition. Food Cultures & enzymes Chr. Hansen is the market leader on the cultures and enzymes market. Our goal is to deliver innovative solutions of the highest quality on the culture and enzymes market. It is an important part of Chr. Hansen’s strategy to continuously enable our customers to improve their business with new concepts which create value in dairy products and processes and at the same time optimize food safety. Health & Nutrition Besides the animal and feed industry, the division is developing new products for the food supplement industry and the pharmaceutical industry, first and foremost based on probiotic cultures. Chr. Hansen is one of the global leaders within the areas. The business area within microbiome has continued its development in the financial year 2022/23. Management's review Development in activities and financial position Due to the change of the financial reporting period, the financial year 2022/23 comprise 16 months and the comparison period comprises 12 months (financial year 2021/22). The financial year 2022/23 was a year with good progress on our strategic ambition and a solid financial performance. With a sustainable business model combined with an adaptable organization, Chr. Hansen A/S Group has demonstrated the attractiveness of the markets we serve. The Chr. Hansen A/S Group reached revenue in 2022/23 of DKK 9,776 million, equal to an increase in revenue of 7% (based on a 12-months period for 2022/23 assuming even monthly revenue for the 16 months of the financial year). In total, DKK 1,142 million was spent on research and development expenditure, corresponding to 12% of total revenue. DKK 160 million was capitalized in 2022/23 (DKK 101 million in 2021/22). Thereby, capitalized research and development spending has increased compared to the previous financial year. Operating profit (EBIT) amounted to DKK 1,803 million compared to DKK 1,452 million in 2021/22. This translates into an EBIT margin of 18% compared to 21% in the previous financial year. Financial expenses are impacted by the impairment of receivables from joint ventures in the amount of DKK 527 million. Further the investment in joint ventures is recognized at DKK 0. Profit before tax amounted to DKK 960 million compared to DKK 1,298 million in the previous financial year. Profit for the financial year amounted to DKK 574 million in the financial year 2022/23, compared to DKK 1,010 million in 2021/22. Total assets amounted to 15,098 million at 31 December 2023 compared to 14,585 million at 31 August 2022. Total equity amounted to 8,549 million at 31 December 2023 equivalent to an equity ratio of 57%. This compared to total equity of 8,975 million and an equity ratio of 62% at 31 August 2022. Dividend in the amount of DKK 1,000 million was approved at the Annual General Meeting held 13 January 2023 and was paid to the sole shareholder Chr. Hansen Holding A/S. Cash flow from operating activities amounted to DKK 2,729 million for the financial year compared to DKK 2,287 in 2021/22. Cash flow from investing activities amounted to an outflow of DKK 1,488 million and was impacted by investments in intangible assets of DKK 309 million and in property, plant and equipment (excl. lease assets) of DKK 786 million. The average number of employees was 2,462 at 31 December 2023 compared to 2,476 at 31 August 2022. The results for the financial year 2022/23 are in line with expectations. Uncertainty regarding recognition and measurement Management acknowledges that certain areas with significant estimates and judgments may be linked with uncertainty regarding recognition and measurement due to the nature or complexity of the assessments that are performed. Certain complex construction projects entail significant judgement as to which costs are eligible for capitalization. Based on current information, Management has assessed which costs are eligible for capitalization. This is considered a judgment, as new information may change Management's assessment and could have a significant impact on the capitalized costs. Other than this, no uncertainty regarding recognition and measurement has been identified by Management. Management's review Outlook for 2024 The 2024 financial year will consist of a 12-month period. Revenue is expected to be at the same level compared to a comparable 12-month period of the preceding year. Profit for the year is expected to be at the same level compared to a comparable 12-months period of the preceding year when disregarding the impairment of receivables from joint ventures. The Chr. Hansen Group is a sub-group within Novonesis. Refer to Novonesis to see outlook for the full Novonesis Group. Intellectual capital (Creative and committed employees) As a knowledge-based company Chr. Hansen is highly dependent on having committed and motivated employees, as well as skilled managers. Chr. Hansen therefore invests in the development of competences through ambitious development programs for employees and managers. Besides this competence-based platform, we are ready to further develop our activities within our existing business areas. Environmental matters In Chr. Hansen, we take our responsibility to do business in a sustainable way very seriously. We have constant focus on creating value while keeping our impact on the surrounding society to a minimum and securing a good working environment for all our employees. A Sustainability Board ensures that sustainability is effectively anchored in the organization. The Sustainability Board ensures ownership, involvement and commitment from the entire business in defining, prioritizing and executing on sustainability objectives. Enabling climate action The world is facing widespread and intensifying climate change, which calls for climate action. Our continuous commitment to UN Global Compact underlines our climate ambition as a part of the United Nation’s 10 principles on social and environmental aspects of sustainability. We are on a focused decarbonization journey towards 2030 having two Science Based Targets that will form the basis of our strategy to reduce our carbon footprint. In Logistics, we are i.e. minimizing air freight by moving to more sea transport while exploring low-carbon fuels in dialogue with freight forwarders. Furthermore Chr. Hansen focuses on renewable electricity and the sites in Denmark are covered by renewable electricity. With the ambition of making the key packaging solutions recyclable at the customer end, Chr. Hansen supports a circular economy for packaging materials. Management's review Building an inclusive culture for a diverse workforce As a company driven by science and innovation, our future relies on our ability to generate ideas, create solutions, and approach problems in new ways. To achieve this, we need a workforce of employees with diverse socio-economic backgrounds, experiences and points of view. We strive to develop a diverse workforce and an engaged, innovative and open-minded culture, where each employee’s unique differences are not only acknowledged and encouraged, but where they add value and make our organization stronger. While we are proud of the diversity of our workforce today, we acknowledge that we still have more work to do, primarily in terms of improving our gender diversity and developing more varied skillsets among teams of employees. Recognizing that diversity challenges are unique to teams and locations, Chr. Hansen works on a range of parameters to help raise the bar, for example by focusing on unconscious bias and developing engaging and inspiring leaders. We work with diversity broadly yet believe that gender is an important parameter to pay attention to. This year, the percentage of female managers was 41% compared to 46% of female employees and we will continue to work with this in order to meet the target of having equal ratio between female employees and female managers. Diversity metrics are also included in the corporate leadership team’s remuneration, reflecting the degree to which it represents a strategic objective. Research and development activities For Chr. Hansen A/S, innovation is an important contributor to business growth. More than 30% of the total number of employees in Chr. Hansen A/S, are working with research and development. Chr. Hansen A/S generally patents all new products of commercial value. The patents protect our investments in research and development and increase the value of our business. In addition, we make sure that our product technology and application methods are protected by a wide patent portfolio. Risk Management In Chr. Hansen A/S, we view risk management as an integrated part of managing the business. We strive to make sure that we do business in a prudent way where we assess and manage both financial and non- financial risks to protect our employees, assets and reputation. At least once a year, the Board of Directors reviews the risk exposure associated with the activities of Chr. Hansen A/S. Guidelines are adopted for areas of risk, and the development is monitored to secure that identified risks are accounted for, including strategic, operational and financial risks. Risk Risks relate to future events or developments that may have an influence on the company achieving its targets. Relevant risks are identified, monitored and reported to the Executive Board and the Board of Directors through an Enterprise Risk Management process following an annual cycle. Furthermore, the identified risks are presented to and discussed by Management on a quarterly basis. The purpose of this process is to identify risks as early as possible and enable Management to proactively adapt business processes and controls to meet, manage or mitigate these risks. Management's review Identified risks are evaluated based on their possible safety, business or financial impact and the likelihood of the risk materializing. Clear roles and responsibilities are assigned for major risks, and mitigation initiatives are identified, prioritized and launched. The most significant risks identified and reported to the Board of Directors are described below, including measures taken to mitigate these. Chr. Hansen A/S continues to work on identifying and evaluating relevant risks, and the list does not include all risks that could ultimately affect the Company. Production risk Chr. Hansen A/S Group has three production sites in Denmark and production sites in Germany and France, and each site carefully monitors product safety and delivery performance to manage all potential risks. This consolidation of production allows capacity to be optimized to reduce production costs. To minimize the risk of production breakdowns or failures, Chr. Hansen has implemented a risk prevention program where regular audits are conducted, which ensures preventive maintenance and replacements. The company also maintains idle capacity for key processes. As production processes are optimized and automated, dependence on robust IT systems and infrastructure increases. Chr. Hansen continues to reduce complexity in IT systems and conduct regular restore tests. With this concentrated production setup, there is a risk of a production breakdown interrupting the company’s operations and leading to a loss of income in both the short term and the longer term due to long lead times on the replacement of key equipment. The causes might be contamination of production equipment, key equipment breakdown, fire, terrorism and natural disasters. The risk and effect of a production breakdown are mitigated through maintenance, insurance, fire safety measures, behaviour-based training, continuous improvements to operational pro-cesses and business continuity plans including alternative production possibilities. Product safety The majority of Chr. Hansen's products are sold to the food & beverage, human health, animal health and plant protection industries. Most products are components in customers’ end products that are consumed as food, beverages or dietary supplements. To ensure the highest product safety, Chr. Hansen has an extensive quality assurance and food safety program covering the entire value chain, from the sourcing of raw materials until the finished products are delivered to customers. The risk assessment performed in the food safety program includes an evaluation of the use of our products in customers’ end products. Chr. Hansen’s food safety program is certified according to internationally recognized food safety standards. The Danish production sites are FSSC 22000 certified. Financial risks As an international business, Chr. Hansen A/S Group is exposed to a number of financial risks relating to currency fluctuations, funding, liquidity, credit and counterparty risks. Chr. Hansen A/S Group trades primarily in EUR and USD, however trading may also take place in other currencies. The currency exposure is limited to the extent possible by having revenue and costs in the same currency. Further to limit the impact the corporate Treasury department performs hedging in accordance with the approved Treasury Procedure. The credit risk of Chr. Hansen A/S Group is considered limited as the customer base is diverse and represents multiple industries and businesses having large and medium-sized partners. The credit risk is monitored closely, and a risk assessment is made of new customers. To limit the counterparty risk, Chr. Hansen A/S Group deals only with financial institutions that have a satisfactory long-term credit rating. Management's review Legal risks Chr. Hansen A/S is from time-to-time party to legal proceedings arising in the ordinary course of business. The legal department is focused on analysing possible risks in a timely manner and mitigating them in an appropriate way using both internal and, if necessary, external capabilities. Despite the focus from Chr. Hansen on these matters, the outcome of legal proceedings cannot be predicted with certainty. Health, safety & security Chr. Hansen is committed to continuously improving both the physical and psychological working environment for its employees. The company has implemented several initiatives to underline the importance of a safe working environment. Monitoring and follow-up of incidents have been strengthened from departmental level to the Executive Board. There is also focus on behaviour in relation to IT security due to the increased risk of cybercrime. Subsequent Events On 12 December 2022, it was announced that the Company’s immediate parent company, Chr. Hansen Holding A/S, had entered into an agreement with Novozymes A/S to create a new leading global biosolutions partner through a statutory merger of the two Companies with Novozymes A/S as the continuing company and Chr. Hansen Holding A/S being dissolved. The merger was approved by the European Commission 29 January 2024 whereby Chr. Hansen Holding A/S ceased to exist and hence subsequent to year-end, the Chr. Hansen Group is owned by Novozymes A/S. The approval by the European Commission was conditional upon divestment of part of the global Lactase enzyme business. The divestment was completed by the end of April 2024. Other than this, no subsequent events materially affecting the financial statements have occurred. Statutory report in accordance with section 99a of the Danish Financial Statements Act Description of business model Chr. Hansen A/S’ business model is centered around our unique fermentation and microbial technology platforms backed by more than 145 years of experience, a scalable production set-up as well as long- standing relationships with customers. We consider our most critical business activities to be: • Research & Development: Discovery, clinical trials and proof of concept, process innovation, and emerging technologies • Global Operations: fermentation, blending, product safety and quality, packaging and logistics • Sales & Application: sales excellence, application, and technical support, distributors and commercial partners, marketing, and digital services Our outputs and outcomes include: The outputs of our value chain are microbial products such as cultures, probiotics, enzymes, and HMOs that are being used in the food, nutritional, and agricultural sectors and which on many occasions enable more sustainable business practices. The positive impact of our products is partly offset by the negative impact our manufacturing processes have on the environment. Our organizational backbone consists of: • Human capital (engaged employees) • Intellectual capital (cutting-edge science) • Natural capital (emissions and waste) • Manufacturing capital (products with impact) • Social capital (strong reputation), financial capital (interest, dividends, and buybacks). Environment & climate We are continuously working on our environmental footprint. Through our Position on Sustainability & ESG, Chr. Hansen A/S ensures continuous improvement of environmental topics. Our management systems support the integration of sustainability practices in the organization, and we ensure strong governance by organizational anchoring and oversight of Sustainability & ESG at both the Board of Directors and the senior management level. We monitor progress, continuously improve performance, and communicate it externally. For further information, please visit our webpage and our position on Sustainability & ESG. We have identified the following material risks: • Climate change • Resource efficiency and circularity • Environmental impacts from the supply chain To implement our policy and manage risks, we have continued the 'Think Climate. Naturally.' Program to future-proof the business for a low-carbon economy. This program serves as our decarbonization roadmap and encompasses initiatives such as the conversion to renewable electricity, resource efficiency projects, and a supplier engagement program. In addition to this, Chr. Hansen A/S implements its environmental and climate efforts through the adoption of three distinct policies/positions. These focus on sustainability, biodiversity, and setting sustainability standards for our value chain (suppliers). They align with our commitment to shaping a more sustainable future by developing pioneering microbial solutions and actively engaging with stakeholders to create shared value and regenerate society. Management's review Chr. Hansen A/S has upheld its commitment to sustainability by supporting regenerative agricultural practices through our biological health solutions, reducing food waste through our fermentation solutions, and contributing to global health with the sales of our well-documented probiotics. We have continued to improve reducing our environmental footprint through the 'Think Climate. Naturally.' Program, which includes initiatives such as improving our supplier engagement, sustainable sourcing, and operational efforts to reduce energy consumption, improve waste management, reduce water use, and introduce more recyclable key packaging. Overall, Chr. Hansen A/S deems the results of its environmental and climate efforts throughout 2022/23 as satisfactory. In early 2024, Chr. Hansen and Novozymes combined to establish Novonesis. Moving forward, Chr. Hansen A/S expects to further integrate its environmental and climate initiatives into the newly formed Novonesis Group, including aligning to overall group ambitions and priorities. Due to the merger with Novozymes, Chr. Hansen A/S is no longer part of the previous Chr. Hansen Group. For 2022/23, Chr. Hansen A/S management has therefore not utilized the previous group-level Key Performance Indicators (KPIs) related to environmental and climate concerns as part of decision-making. Social matters Our policy for social matters is to create and sustain a culture of inclusivity and high engagement. We strive to create an engaging workplace where employees can apply themselves fully to work. This is fundamental to our long-term success, as it improves productivity, increases employee satisfaction, reduces employee turnover, and ultimately renders better business results. Our existing workforce is a broad and diverse group representing different educational backgrounds, nationalities, genders, ages, and ethnicities – ensuring a variety of perspectives are brought to the table, which is particularly important for an innovation-driven company. We are reinforcing our focus on supporting an environment where all employees feel safe and accepted. By creating and sustaining an inclusive and equitable environment, where everyone feels they can be themselves, we enable employees to perform at their best and full potential. We have identified the following material risks concerning social matters: • Employees’ health and well-being • Work safety • Talent management We are committed to maintaining and continuously improving employees’ health, safety, and well-being at work. To implement our policy and manage material risks for social matters, we use Chr. Hansen's culture model to provide a common language for employees and leaders and support leadership development through LEAD and CONNECT programs. We focus on inclusive and non-biased talent acquisition and onboarding, addressing unconscious biases and striving for a more objective view of candidates. To further support a diverse workforce reinforcing our ambition of creating an inclusive and equitable environment for all employees, we focus on gender pay equality. Our flexible work guidelines address employee well-being and promoting health initiatives under the Hansen Health program. We strive to maintain an engaging workplace by utilizing dynamic engagement tools to improve productivity, reduce turnover, and achieve better business results. During 2022/23, our ongoing social efforts and initiatives have persisted. We have continued refining an inclusive and non-biased recruitment process, addressing unconscious biases and fostering a more objective candidate evaluation. We have continued to improve employee engagement, nurture our leadership culture, and advance our existing diversity, inclusion, and equity endeavors. We have made good progress in our social efforts so far and we remain committed to further development and action. Management's review In early 2024, Chr. Hansen and Novozymes combined to establish Novonesis. Moving forward, Chr. Hansen A/S expects to further integrate its social initiatives into the newly formed Novonesis Group, including aligning to overall group ambitions and priorities. Due to the merger with Novozymes, Chr. Hansen A/S is no longer part of the previous Chr. Hansen Group. For the 2022/23, Chr. Hansen A/S management has therefore not utilized the previous group-level Key Performance Indicators (KPIs) related to social concerns as part of decision-making. Human rights Chr. Hansen A/S is committed to safeguarding human and labor rights, which is reflected in our Sustainability & ESG position. We respect human rights as defined in the International Bill of Human Rights and we expect our suppliers, business partners, and other parties directly linked to our operations and products to do the same. We support the UN Guiding Principles on Business and Human Rights and respect the Ethical Trading Initiative Base Code and the core conventions of the International Labor Organization (ILO), in the countries where we operate. Our work with human rights, anti-corruption, and bribery are integral parts of our continuous support to the UN Global Compact. We continue the work with human rights due diligence assessment, supplier requirements, and internal audits enforcing our commitment to protect human rights. Annually, we update our human rights due diligence assessment evaluating generic sector risks against the mitigating measures that Chr. Hansen A/S has in place. The result of this period’s assessment is that health & well-being, work safety, and Diversity, Equity & Inclusion continue to be the material risks and key focus areas for Chr. Hansen in our operations and supply chain. We perform third-party audits on social and environmental matters at our production sites once every three years. The audits are managed through SEDEX, which is one of the world’s largest collaborative platforms for sharing social and environmental data with customers. To do business with Chr. Hansen, suppliers need to sign and comply with a set of social and environmental requirements, including respect for human rights and zero tolerance policy for bribery and corruption. The requirements are developed based on international guidelines such as the UN Guiding Principles on Business and Human Rights and the Ethical Trading Initiative Base Code. The requirements are enforced through Chr. Hansen’s vendor approval system. As a result, all Chr. Hansen’s direct suppliers are obliged to respect human rights including no forced or child labor. During 2022/23, no non-compliances related to human rights were identified. In early 2024, Chr. Hansen and Novozymes combined to establish Novonesis. Moving forward, Chr. Hansen A/S expects to further integrate its human rights initiatives into the newly formed Novonesis Group, including aligning to overall group ambitions and priorities. Due to the merger with Novozymes, Chr. Hansen A/S is no longer part of the previous Chr. Hansen Group. For 2022/23, Chr. Hansen A/S management has therefore not utilized the previous group-level Key Performance Indicators (KPIs) related to human rights concerns as part of decision-making. Anti-corruption Ethically conducting business is part of our DNA. We promote an ethical business environment in accordance with relevant laws and regulations and we do not tolerate violation of competition, anticorruption, or bribery laws. Annual training in business ethics is mandatory for all employees. We have identified the following material risks concerning anti-corruption matters: • Anti-corruption • Competition law • Sanctions regulation Chr. Hansen has robust compliance programs for anti-corruption, competition law, and sanctions compliance designed to fulfill the group requirements. Chr. Hansen A/S’ Code of Conduct and Whistle Blower Portal and policies related to Anti-corruption, Business Integrity, Competition Law, and Sanctions Compliance are available to employees and third parties via our website. A due diligence process including screening to ensure compliance with Chr. Hansen’s ethical and compliance standards is performed before onboarding any third parties acting on behalf of Chr. Hansen, such as distributors and agents. There is a steadily growing demand for screening and hence a cross- functional project has been initiated to establish common ground for third-party screening in Chr. Hansen A/S. Chr. Hansen’s whistleblower hotline is available to all employees and external parties to report any illegal or unethical misconduct or serious or sensitive concerns. During the 2022/23, 27 cases were reported through the whistleblower hotline (Chr. Hansen group). After thorough investigation 20 of these were found unjustified. All justified cases were acted upon and have been resolved or are ongoing. In early 2024, Chr. Hansen and Novozymes combined to establish Novonesis. Moving forward, Chr. Hansen A/S expects to further integrate its anti-corruption initiatives into the newly formed Novonesis Group, including aligning to overall group ambitions and priorities. Due to the merger with Novozymes, Chr. Hansen A/S is no longer part of the previous Chr. Hansen Group. For 2022/23, Chr. Hansen A/S management has therefore not utilized the previous group-level Key Performance Indicators (KPIs) related to anti-corruption concerns as part of decision-making. Statutory report in accordance with section 99b of the Danish Financial Statements Act At 31 December 2023, the Board of Directors of Chr. Hansen A/S consisted of 4 members, with one male and three female members. At the time of publication of these financial statements, the Board of Directors consists of 4 members, with one female and three males. Therefore, Chr. Hansen A/S has achieved equal gender representation, and we are exempt from setting a target for underrepresented gender. At other management levels, only one female member is included. For that reason, Chr. Hansen A/S is exempted from regulation requiring a policy for underrepresented gender at other management levels. Statutory report in accordance with section 99d of the Danish Financial Statement Act During this 2022/23, we have continued applying the enhanced data ethics principles developed in 2021 as part of Chr. Hansen A/S’ overall privacy compliance and data protection program. The data ethics principles are implemented in a position on privacy, data protection, and data ethics and include principles on lawfulness, fairness, transparency, data minimization, security, integrity, and confidentiality. The guiding principles set the ethical standard for how data is used at Chr. Hansen and support ethical decision-making when using data. Data Ethics thus supplements Chr. Hansen’s privacy compliance program. Policies, procedures, and e-learning are regularly reviewed and updated, and supportive governance has been implemented. 8300634000 5902769000 3976727000 2651744000 3376508000 2274079000 4924126000 3628690000 1141858000 790948000 1024736000 717204000 1719425000 1285715000 1262270000 967706000 1104383000 683976000 942575000 552696000 39696000 44657000 35406000 30268000 70429000 30009000 36237000 21228000 1693714000 1400124000 -106322000 -59286000 0 0 0 0 39514000 49465000 403120000 328752000 331502000 257498000 0 0 244304000 0 1139807000 423092000 1027228000 257066000 793198000 1450021000 385321000 288134000 292780000 239255000 500418000 1210766000 4095357000 4845799000 2695110000 3287778000 1180599000 1530651000 725749000 1011336000 347203000 285781000 347203000 285781000 171783000 127346000 163739000 117234000 476256000 415432000 476256000 415264000 6271198000 7205009000 4408057000 5117393000 2297738000 1730658000 1958459000 1366609000 1315921000 1199704000 945726000 840422000 291700000 243043000 242218000 199235000 2034316000 1806694000 1718198000 1645420000 5939675000 4980099000 4864601000 4051686000 0 0 1041033000 431202000 0 12917000 0 150899000 0 192249000 0 192249000 0 205166000 1041033000 774350000 12210873000 12390274000 10313691000 9943429000 997053000 766725000 760895000 606780000 497254000 470447000 182393000 143146000 8232000 21842000 0 0 1098864000 772920000 1160671000 896904000 162958000 77621000 91906000 54481000 78008000 67017000 62808000 52642000 1845316000 1409847000 1497778000 1147173000 45006000 18131000 44915000 17953000 2887375000 2194703000 2303588000 1771906000 12617279000 11715335000 194101000 194101000 194101000 194101000 0 0 450407000 283800000 8187173000 8636532000 6209143000 6872284000 8381274000 8830633000 6853651000 7350185000 167942000 144123000 0 0 6853651000 7350185000 1046736000 1119659000 1033066000 1070201000 49042000 59320000 483000 6828000 1095778000 1178979000 1033549000 1077029000 986254000 553691000 950953000 525123000 489600000 506230000 489600000 506230000 424650000 1079505000 0 0 1900504000 2139426000 1440553000 1031353000 94502000 54631000 81315000 43788000 15206000 2839000 15206000 2839000 16463000 38584000 16463000 38584000 601020000 718025000 472939000 552493000 1933830000 697091000 2186823000 1118246000 485908000 386143000 308947000 279009000 405821000 394503000 207833000 221809000 3552750000 2291816000 3289526000 2256768000 5453254000 4431242000 4730079000 3288121000 15098248000 14584977000 12617279000 11715335000 194101000 8636532000 8830633000 144123000 0 535885000 535885000 38586000 0 1000000000 1000000000 0 1000000000 0 -1852000 -1852000 6152000 4300000 0 -16608000 -16608000 20919000 4311000 194101000 8187173000 8381274000 167942000 194101000 283800000 5872284000 1000000000 0 0 500418000 0 0 0 0 1000000000 1000000000 0 0 300000000 -300000000 0 0 0 3048000 0 3048000 0 166607000 -166607000 0 0 194101000 450407000 5909143000 300000000 2592783000 1506822000 Other adjustments of non-cash operating items Other adjustments of non-cash operating items 158404000 -5878000 -459150000 -157219000 Interest income Interest income 15433000 19600000 Interest expense Interest expense -85707000 -56004000 Corporation tax paid Corporation tax paid -67030000 -30105000 2729204000 2287261000 309236000 165131000 Investments in property, plant and equipment Investments in property, plant and equipment -786021000 -685401000 Loan to joint ventures Loan to joint ventures -299381000 -80436000 Investments in joint ventures Investments in joint ventures -93405000 0 -1488043000 -930968000 Repayment of Borrowings Repayment of Borrowings -25505000 -22814000 Repayment of lease liabilities Repayment of lease liabilities -166882000 -54778000 Increase in arrangement of payables to group enterprises Increase in arrangement of payables to group enterprises -21899000 -260744000 1000000000 1000000000 -1214286000 -1338336000 26875000 17957000 174000 Accounting policies The consolidated financial statements of Chr. Hansen A/S Group for 2022/23 has been prepared in accordance with the provisions applying to reporting class C large entities under the Danish Financial Statements Act. The financial reporting period has been changed from 1 September – 31 August to 1 January – 31 December. The transition period covers 1 September 2022 – 31 December 2023 (16 months). The financial reporting period has been changed to reflect the financial reporting period of Novozymes A/S, with which, the former parent company of Chr. Hansen A/S, Chr. Hansen Holding A/S, has merged on 29 January 2024 with Novozymes A/S as the continuing entity. Consolidated financial statements The consolidated financial statements comprise the Parent Company and subsidiaries in which the Parent Company directly or indirectly holds more than 50% of the votes or in some other way exercises control over. On consolidation, intra-group income and expenses, shareholdings, intra-group balances and dividends are eliminated. Equity investments in subsidiaries are set off against the proportionate share of subsidiaries' fair value of net assets and liabilities at the date of acquisition. Non-controlling interests Items of subsidiaries are fully recognised in the consolidated financial statements. The non-controlling interests' proportionate share of the subsidiaries' profit and of equity is included as part of the Group's profit and equity, respectively, but is presented separately. Foreign currency translation On initial recognition, foreign currency transactions are translated applying the exchange rate at the transaction date. Receivables, payables and other monetary items denominated in foreign currencies that have not been settled at the balance sheet date are translated using the exchange rate at the balance sheet date. Exchange rate differences that arise between the rate at the transaction date and the rate in effect at the payment date or the rate of the balance sheet date are recognized in the income statement as financial income or financial expenses; however, see the section on accounting-based hedging. Changes in the fair value of derivative financial instruments that are classified as they comply with the requirements for hedging of the fair value of a recognized asset or a recognized liability are recorded in the income statement together with changes in the value of the hedged asset or the hedged liability for that part of the asset or liability that has been hedged. For derivative financial instruments that do not comply with the requirements for being treated as hedging instruments, changes in fair value are recognized in the income statement as financial income or financial expenses. Accounting policies (continued) Derivative financial instruments Derivative financial instruments are initially recognized at fair value at the ate the derivative contract is entered into and are subsequently remeasured at fair value. The fair values of derivative financial instruments are included in other receivables and other payables, respectively, and positive and negative values are offset only when the Group has the right and the intention to settle financial instruments net. Fair values of derivative financial instruments are computed on the basis of current market data and generally accepted valuation methods. Changes in the fair value of derivative financial instruments designated as and qualifying for recognition as a fair value hedge of recognized assets and liabilities are recognized in the income statement together with changes in the value of the hedged asset or liability with respect to the hedge portion. Realized gains and losses on derivative financial instruments are recognized in the income statement as financial income or financial expenses. Income statement The income statement is classified by function. Revenue The Group is relying on IFRS 15 Revenue from contracts with customers as the interpretation when recognising revenue. The Chr. Hansen A/S Group produces a wide range of cultures and enzymes. Revenue from sale of goods and related services and royalties is recognized at an amount that reflects the consideration to which Chr. Hansen A/S Group expects to be entitled. Revenue from sale of goods to customers is recognized when control of the goods is transferred to the customer, i.e. when the goods are delivered to the end-customer. The performance obligations in the contracts are to deliver produced cultures and enzymes to the customers, and each batch delivered is considered a separate performance obligation, as each batch is distinct. Products are often sold at a discount. Such agreements can be set up in various ways, but common to all discount agreements is that revenue is recognized based on the price specified in the contract, net of the estimated discount. Discounts are estimated based on historical data as well as forecasts. Estimated discounts are reassessed at the end of each reporting period. A relatively small part of revenue originates from commission agreements where agents undertake sales to third parties in return for commission on realized sales. Revenue from such agreements is recognized, when the goods are delivered, as the nature of the performance obligation is to provide the specified goods. A trade receivable is recognized when the customer obtains control of the goods and an invoice is issued, as this is the point in time when the consideration is unconditional and only the passage of time is required before the payment is due. The obligation to provide a refund for products that are not of the agreed quality or according to agreed specifications under standard warranty terms is recognized as a provision. Accounting policies (continued) Production costs Production costs cover the cost of goods sold. The cost includes the acquisition price for raw materials, consumables, trading goods, direct labour costs and a portion of indirect production costs comprising costs related to the operation and depreciation of production facilities, as well as operation, administration and management of production plants. Furthermore, production costs include cost and depreciation related to the net realized value of defective goods and goods with a long turnover rate. Research and development expenses Research and development expenses include labour cost, amortization and other costs directly or indirectly associated with the Group’s research and development activities. Development projects related to new products and processes that are clearly defined and identifiable, while having a high degree of technical utilization, sufficient resources and where a potential future market or development potential within the Group can be proved, and where it is the intention to manufacture, market and utilize the project, are recognized as intangible assets if there is sufficient certainty that the capital value of future earnings will cover the production costs, sales and administrative expenses, as well as the development expenses. Development projects that do not comply with the requirements for recognition in the balance sheet are recognized in the income statement as costs are incurred. Sales and marketing expenses Sales and marketing expenses include expenses for salaries to sales personnel, advertising and conference expenses, depreciation, etc. Administrative expenses Administrative expenses include expenses for administrative personnel, IT and management, including office expenses, salaries, depreciation, etc. Share-based payments Two types of share-based programs exists in Chr. Hansen A/S; matching share (MS) programs and restricted stock unit (RSU) programs. Under the long-term matching share programs, participants are required to acquire a number of existing shares in Chr. Hansen Holding A/S (investment shares) and retain ownership of such shares for a predefined holding period of three years. Upon expiration of the holding period and subject to the fulfilment of certain predefined performance targets and continued employment at the vesting date, participants will be entitled to receive up to 7.5 additional shares in Chr. Hansen Holding A/S per investment share. The matching share is recognized in the income statement of Chr. Hansen A/S at the fair value at grant taking into consideration the achievements of the performance targets. The programs are expensed over the period in which the employees of Chr. Hansen A/S achieve the right to redeem the matching shares. Accounting policies (continued) Share-based payments (continued) The short-term RSU are granted based on the fulfilment of individual key performance indicators for the earning year. The RSUs are granted as shares and vest after two years subject to the person still being employed with Chr. Hansen. The RSU is recognized in the income statement of Chr. Hansen A/S and is expensed fully in Chr. Hansen A/S to target value in the earning year. The phasing of the programs is managed in Chr. Hansen Holding A/S at the fair value at grant over the period in which the employees of Chr. Hansen A/S achieve the right to redeem the RSU. Other operating income and expenses Other operating income and expenses include income and expenses of a secondary nature in relation to the Group's main activities, comprising income from administrative or service agreements. Other operating income also includes net gains from the sale of activities. Financial income and expenses Financial income and expenses include interest income and expenses, amortization income and expenses, and value adjustments of financial assets and transactions in foreign currencies. Income taxes Tax for the year, which consists of current tax for the year and changes in deferred tax, is recognized in the income statement by the portion attributable to the profit for the year and recognized directly in equity by the portion attributable to entries directly in equity. Chr. Hansen A/S is jointly taxed with Chr. Hansen Holding A/S (administration company in the joint taxation) at 31 December 2023. The current Danish income tax is allocated among the jointly taxed entities proportionally to their taxable income (full allocation with a refund concerning tax losses). Accounting policies (continued) Balance sheet Intangible assets Intangible assets are measured at cost with deduction of accumulated amortization and impairments. Goodwill is amortized over its estimated useful life determined based on management's experience within the individual business areas. The amortization period is set at 10-15 years, due to the acquired Group's strategic position in a strong market and long-term earnings profile. Goodwill is written down to the recoverable amount if this is lower than the carrying value. Intellectual property rights acquired are measured at cost less accumulated amortization. Patents are amortized over their remaining duration, and licenses are amortized over the term of the agreement, but over not more than 20 years. Intellectual property rights etc. are written down to the lower of the recoverable amount and the carrying amount. Development projects on clearly defined and identifiable products and processes for which the technical rate of utilization, adequate resources and a potential future market or development opportunity in the Group can be established, and where the intention is to manufacture, market or apply the product or process in question, are recognized as intangible assets. Other development costs are recognized as costs in the income statement as incurred. The cost of development projects comprises costs such as salaries and amortization that are directly and indirectly attributable to the development projects. Indirect production costs in the form of indirect attributable staff expenses and amortization of intangible assets and depreciation on property, plant and equipment used in the development process are recognized in cost based on time spent on each project. Completed development projects are amortized on a straight-line basis using the estimated useful lives of the assets. The amortization period for development projects is up to 15 years, defined based on individual assessment of the product life expectancy. Development projects are written down to the lower of recoverable amount and carrying amount. Capitalized development costs are measured at cost less accumulated amortization and impairment losses or recoverable amount, whichever is lower. Finished development projects are reviewed at the time of completion and on an annual basis to determine whether there is any indication of impairment. If so, an impairment test is carried out for the individual development projects. For development projects in progress, however, an annual impairment test is always performed. The impairment test is performed based on various factors, including future use of the project, the fair value of the estimated future earnings or savings, interest rates and risks. For development projects in progress, Management estimates on an ongoing basis whether each project is likely to generate future economic benefits to qualify for recognition. The development projects are evaluated based on technical as well as commercial criteria. Expenses for project work, comprising direct labour costs and a share of indirect costs, are included in the cost of software. The amortization period for software is up to 10 years, defined based on an individual assessment of the software life expectancy. Gains or losses associated with disposal of intangible assets are recognized in the income statement. Borrowing costs in respect to construction of assets are capitalized when it takes more than a year for them to be ready for use. Accounting policies (continued) Intangible assets (continued) The book values of intangible assets are reviewed yearly to determine if there are any indications of value reductions other than that expressed by amortization. An impairment test is performed if this is the case to assess whether the recoverable value is lower than the book value, and if so, the value is written down to the recoverable value. Property, plant and equipment Property, plant and equipment are measured at cost with deduction of accumulated depreciation and impairment losses. Property, plant and equipment under construction are measured at acquisition value and cost respectively. Cost comprises expenses for materials, direct labour costs and a share of indirect costs. The basis for depreciation of property, plant and equipment is cost less estimated residual value after the end of the useful life. Straight-line depreciation is made based on the following estimated useful lives of the assets: Buildings 25-50 years Plant and machinery 5-20 years Other fixtures and equipment 3-10 years Assets with a short useful life or with a value below DKK 50,000 are expensed in the year of acquisition. The book values of property, plant and equipment are reviewed yearly to determine if there are any indications of value reductions other than that expressed by depreciation. An impairment test is performed if this is the case to assess whether the recoverable value is lower than the book value, and if so the value is written down to the recoverable value. Leases The Group is relying on IFRS 16 Leases as the basis of interpretation for recognition and measurement of leases to which the Group is the lessee. Lease assets are "right-of-use-assets", which is a contract or part of a contract that conveys the lessee's right to use an asset for a period. The lease asset is initially measured at the present value of future fixed lease payments plus upfront payments and/or other initial direct costs incurred, less any lease incentives received. If, at the inception of the lease, it is reasonably certain that an extension or purchase option will be exercised, future lease payments will be included. The lease liability is measured using the Group's average incremental borrowing rate. Lease assets are classified alongside owned assets of similar type under property, plant and equipment. The lease assets are depreciated using the straight-line method over the lease term. Lease assets are tested for impairment in case of indication hereof. Short-term leases and leases of low value are recognized as expenses in the income statement on a straight- line basis over the lease term. The Group's portfolio of leases covers land, buildings, cars and equipment. Accounting policies (continued) Investments in joint ventures Investments in joint ventures are recognized and measured under the equity method. The item “investment in joint ventures" in the balance sheet includes the proportionate ownership share of the net asset value of the enterprises calculated based on the fair values of identifiable net assets at the time of acquisition with the deduction or addition of unrealized intercompany profits or losses and with the addition of the remaining value of any increases in value and goodwill. Joint ventures with a negative net asset value are recognized at zero. If the Group has a legal or constructive obligation to cover a deficit in the joint venture, the deficit is recognized under other debt. Inventories Inventories are measured at the lower of cost using the FIFO method, and net realizable value. Comprised in the cost are raw materials, consumables, direct labour costs and a share of indirect production costs, including expenses for operation and depreciation of production facilities, as well as operation, administration and management of production plants. Obsolete and defective inventories are written down to net realizable value. Receivables Receivables are measured at amortized cost, usually equalling nominal value, less provisions for bad and doubtful debts. The provisions are based on a specific assessment of the individual receivable. Prepayments Prepayments, recognized as assets, comprises among other things, insurance payments, subscriptions and licenses. Prepayments is measured at amortized cost. Receivables from group companies/payables to group companies Receivables from group companies and payables to group companies comprises receivables and payables to parent company, subsidiaries and sister companies. Receivables and payables to and from entities within the Chr. Hansen Group are eliminated on consolidation. Other provisions Other provisions are recognized in the balance sheet when it is probable, because of prior events that a contractual or actual liability has arisen which will probably draw on the economic resources of the Group. Other provisions are measured at net realizable value. The Group has for certain groups of employees, in Germany and France, entered into agreements on the payments of certain benefits, including pensions. The obligation for defined benefits plans is recognized under other provisions and actuarial gains and losses are adjusted in equity. Financial liabilities Fixed-rate loans, comprising mortgage loans and bank loans, are measured at cost which corresponds to the proceeds received less transaction costs incurred. In subsequent periods, the loan is measured at Accounting policies (continued) amortized cost. The difference between the proceeds at the time of the borrowing and the nominal repayable amount of the loan is recognized in the income statement as financial expenses over the term of the loan. Other liabilities are measured at amortized cost, which usually corresponds to nominal value. Deferred tax Deferred tax is recognized on all temporary differences between the carrying amount and the tax base of assets and liabilities. Deferred tax is measured based on current tax legislation and rates applying at the balance date. Where the measurement of the tax base can be conducted in accordance with alternative tax legislation, deferred tax is measured based on the planned life of the asset or liability. Deferred tax assets, including the tax base of losses that may be carried forward, are measured at the value at which the asset is expected to be realized, either by settlement as tax or deducted in deferred tax liabilities. Cash flow statement The cash flow statement provides information on the Group's cash flows from operating, investing and financing activities for the year, the year's changes in cash and cash equivalents as well as the Group's cash and cash equivalents at the beginning and end of the year. The cash flow effect of acquisitions and divestment of entities is shown separately in cash flows from investing activities. Cash flows relating to acquired entities are recognised in the cash flow statement from the date of acquisition, and cash flows relating to divested entities are recognised up to the date of divestment. Cash flows from operating activities Cash flows from operating activities are calculated as the profit/loss for the year adjusted for non-cash operating items, changes in working capital and corporation tax paid. Cash flows from investing activities Cash flows from investing activities comprise payments in connection with acquisitions and disposals of entities and activities, intangible assets, property, plant and equipment and investments. Cash flows from financing activities Cash flows from financing activities comprise changes in size or composition of the Group's contributed capital and costs in this respect as well as raising of loans, instalments on interest-bearing debt and distribution of dividends to owners. Cash and cash equivalents Cash and cash equivalents comprise cash. Accounting policies (continued) Accounting policies – Parent Company The financial statements of Chr. Hansen A/S as Parent Company has been prepared in accordance with the provisions applying to reporting class C large entities under the Danish Financial Statements Act. The accounting policies used in the preparation of the Parent Company financial statements are the same as for the Chr. Hansen A/S Group, with the following exceptions: Dividends from group companies Dividends from group companies are recognized in the income statement when the investors' right to receive dividend has been approved. Potential write-downs of shares are deducted. Reserve for development costs An amount corresponding to the recognized development costs is reserved in the item "Reserve for development costs" under equity. The reserve includes only development costs that are recognized in financial years beginning on or after 1 January 2016. The reserve is continuously reduced with depreciation and write-downs on the development projects. Investments in subsidiaries Investments in subsidiaries are measured at cost. The investments are written down to the recoverable amount if this is lower than the carrying value. Investments in joint ventures Investments in Joint ventures are measured at cost. The investments are written down to the recoverable amount if this is lower than the carrying value. true 2 Revenue Group Parent Company 2022/23 2021/22 2022/23 2021/22 DKK'000 16 mths 12 mths 16 mths 12 mths Revenue split geographically Denmark 114,891 71,191 114,891 71,191 Europe (excl. Denmark) 4,451,919 3,059,170 3,731,764 2,624,159 North America 1,942,186 1,513,174 1,802,681 1,411,895 Other markets 3,266,931 2,206,005 2,651,298 1,795,524 Total 9,775,927 6,849,540 8,300,634 5,902,769 The geographical split is based on customer location. Staff expenses Production costs, research and development, sales and marketing, administrative expenses and other operating income and expenses include wages and salaries etc, which are distributed as follows: Group Parent Company 2022/23 2021/22 2022/23 2021/22 DKK'000 16 mths 12 mths 16 mths 12 mths Wages and salaries etc 1,983,587 1,393,560 1,450,570 1,024,106 Transferred capitalization -198,221 -207,738 -144,770 -159,048 Pension 163,775 116,546 138,561 100,111 Social security 126,823 79,532 18,867 14,288 2,075,964 1,381,900 1,463,228 979,457 Remuneration to the Management* 3,876 5,489 3,876 5,489 Total 2,079,840 1,387,389 1,467,104 984,946 * Salary to members of the Executive Board and the Board of Directors is presented as the full salary paid by Chr. Hansen Holding A/S related to the board members employment in Chr. Hansen A/S. With reference to section 98b of the Danish Financial Statements Act, the Group has disclosed remuneration of the Executive Board and the Board of Directors as one amount. 2462 2476 1576 1567 Incentive program The short-term restricted stock unit (RSU) programs are granted to members of the Executive Board and other key employees based on the fulfilment of individual key performance indicators. The RSUs are granted as shares and vest after two years subject to the person still being employed with Chr. Hansen. Long-term matching share programs are granted to members of the Executive Board and certain key employees. Under the program, the participants are required to acquire a number of existing shares in Chr. Hansen Holding A/S and retain ownership of such shares for a predefined holding period of three years. Upon expiration of the holding period and subject to the fulfilment of certain predefined performance targets and continued employment at the vesting date, the participants will be entitled to receive up to 7.5 additional shares in Chr. Hansen Holding A/S (matching shares) per investment share for no consideration. Other operating income and expenses Other operating income and expenses primarily consist of management fee to the parent company and income from sale of services in connection with the divestment of Chr. Hansen's color division. Depreciation, amortization and impairment/write-downs Depreciation, amortization and impairments/write-downs are included in production costs, research and development expenses, sales, marketing and administrative expenses and are distributed as follows: Group Parent Company 2022/23 2021/22 2022/23 2021/22 DKK'000 16 mths 12 mths 16 mths 12 mths Production costs 292,277 229,782 201,669 161,947 Research and development expenses 225,140 167,735 164,138 125,235 Sales and marketing expenses 867,734 678,231 669,937 531,335 Administrative expenses 85,624 48,600 69,604 36,501 Total 1,470,775 1,124,348 1,105,348 855,018 Fees to auditors appointed at the general meeting Group DKK'000 2022/23 2021/22 16 mths 12 mths Total fees to PWC 3,963 3,223 Statutory audit services 2,807 Tax services 241 Other assurance services 72 Other services 843 Total 3,963 Group Parent Company 2022/23 2021/22 2022/23 2021/22 DKK'000 16 mths 12 mths 16 mths 12 mths 4 Financial income Interest income from group companies 29,726 3,690 24,541 3,435 Interest income and other financial gains 373,394 325,062 306,961 254,063 Total 403,120 328,752 331,502 257,498 5 Financial expenses Interest expense to group companies 112,878 60,248 77,028 1,692 Impairment of receivables from joint ventures 527,475 0 527,475 0 Interest expense and other financial expenses 499,454 362,844 422,725 255,374 Total 1,139,807 423,092 1,027,228 257,066 0 300000000 0 166607000 574471000 33811000 7 Intangible assets Group Patents, trade- marks, intellect- tual Develop- Intangible property, ment assets in DKK'000 Goodwill etc. projects Software progress Total Cost at 1 September 2022 7,146,239 2,116,472 698,584 471,424 415,432 10,848,151 Transferred 0 0 150,749 95,795 -222,895 23,649 Additions 0 9,827 9,408 6,207 283,794 309,236 Disposals -70,892 -209,510 -90,686 -14,195 0 -385,283 Exchange rate adjustments 0 0 0 -1,018 -75 -1,093 Cost at 31 December 2023 7,075,347 1,916,789 768,055 558,213 476,256 10,794,660 Amortization and impairment losses at 1 September 2022 2,300,440 585,821 412,803 344,078 0 3,643,142 Amortization 694,325 194,229 86,672 50,262 0 1,025,488 Impairment 0 0 12,063 6,803 0 18,866 Reversed amortization and impairment losses -14,775 -43,860 -90,686 -14,195 0 -163,516 Exchange rate adjustments 0 0 0 -518 0 -518 Amortization and impairment losses at 31 December 2023 2,979,990 736,190 420,852 386,430 0 4,523,462 Carrying amount at 31 December 2023 4,095,357 1,180,599 347,203 171,783 476,256 6,271,198 Interest included in the above assets 0 0 0 0 2,988 2,988 7 Intangible assets (continued) Parent Company Patents, trade- marks, intellect- tual Develop- Intangible property, ment assets in DKK'000 Goodwill etc. projects Software progress Total Cost at 1 September 2022 4,482,418 1,489,711 698,584 431,684 415,264 7,517,661 Transferred 0 0 150,749 94,233 -222,802 22,180 Additions 0 0 9,408 5,573 283,794 298,775 Disposals -70,892 -209,510 -90,686 -14,195 0 -385,283 Cost at 31 December 2023 4,411,526 1,280,201 768,055 517,295 476,256 7,453,333 Amortization and impairment losses at 1 September 2022 1,194,640 478,375 412,803 314,450 0 2,400,268 Amortization 536,551 119,937 86,672 46,498 0 789,658 Impairment 0 0 12,063 6,803 0 18,866 Reversed amortization and impairment losses -14,775 -43,860 -90,686 -14,195 0 -163,516 Amortization and impairment losses at 31 December 2023 1,716,416 554,452 420,852 353,556 0 3,045,276 Carrying amount at 31 December 2023 2,695,110 725,749 347,203 163,739 476,256 4,408,057 Interest included in the above assets 0 0 0 0 2,988 2,988 Completed development projects Development projects relates to design, construction and testing of existing production within new strains for cultures and enzymes, and health & nutrition. The projects are being carried out based on demand from existing customers and varies in time for finalization. The projects are performed based on the resources; management has allocated hereto. It is expected that the products have a technical and commercial likelihood at the present marked and to existing customers. 8 Property, plant and equipment Group Assets Other under Land and Plant and fixtures and construc- DKK'000 buildings machinery equipment tion Total Cost at 1 September 2022 2,478,455 3,003,135 554,217 1,806,694 7,842,501 Transferred 70,521 301,860 87,541 -483,571 -23,649 Additions 625,522 25,255 63,315 711,245 1,425,337 Disposals -3,710 -24,823 -22,174 -52 -50,759 Exchange rate adjustments -1,073 -461 -1,745 0 -3,279 Cost at 31 December 2023 3,169,715 3,304,966 681,154 2,034,316 9,190,151 Depreciation and impairment losses at 1 September 2022 747,797 1,803,431 311,174 0 2,862,402 Transferred 0 -427 427 0 0 Depreciation 125,607 204,917 95,510 0 426,034 Impairment 0 310 77 0 387 Depreciation on disposals 0 -18,724 -15,538 0 -34,262 Exchange rate adjustments -1,427 -462 -2,196 0 -4,085 Depreciation and impairment losses at 31 December 2023 871,977 1,989,045 389,454 0 3,250,476 Carrying amount at 31 December 2023 2,297,738 1,315,921 291,700 2,034,316 5,939,675 Hereof leased assets 1,119,027 839 19,680 0 1,139,546 Interest included the above assets 0 0 0 18,532 18,532 The carrying amount of building and machinery, DKK 1,791 million have been pledged as security for mortgage loans of DKK 505 million. Certain complex construction projects entail significant judgement as to which costs are eligible for capitalization. Based on current information, Management has assessed which costs are eligible for capitalization. This is considered a judgment, as new information may change Management's assessment and could have a significant impact on the capitalized costs. 8 Property, plant and equipment (continued) P arent Compan y Assets Other under Land and Plant and fixtures and construc- DKK'000 buildings machinery equip-ment tion Total Cost at 1 September 2022 1,792,887 1,978,612 451,456 1,645,420 5,868,375 Transferred 70,521 246,026 76,560 -415,287 -22,180 Additions 602,634 6,457 43,789 488,065 1,140,945 Disposals -442 -16,818 -13,029 0 -30,289 Cost at 31 December 2023 2,465,600 2,214,277 558,776 1,718,198 6,956,851 Depreciation and impairment losses at 1 September 2022 426,278 1,138,190 252,221 0 1,816,689 Transferred 0 -427 427 0 0 Depreciation 80,863 142,175 73,399 0 296,437 Impairment 0 310 77 0 387 Depreciation on disposals 0 -11,697 -9,566 0 -21,263 Depreciation and impairment losses at 31 December 2023 507,141 1,268,551 316,558 0 2,092,250 Carrying amount at 31 December 2023 1,958,459 945,726 242,218 1,718,198 4,864,601 Hereof leased assets 1,081,847 422 7,103 0 1,089,372 Interest included the above assets 0 0 0 18,532 18,532 The carrying amount of building and machinery, DKK 1,791 million have been pledged as security for mortgage loans of DKK 505 million. Certain complex construction projects entail significant judgement as to which costs are eligible for capitalization. Based on current information, Management has assessed which costs are eligible for capitalization. This is considered a judgment, as new information may change Management's assessment and could have a significant impact on the capitalized costs. 9 Investments Equity investments in subsidiaries Parent Company DKK'000 2022/23 Cost at 1 September 2022 431,202 Additions 609,831 Cost at 31 December 2023 1,041,033 Equity investments in joint venture Group DKK'000 2022/23 Cost at 1 September 2022 150,899 Additions 93,405 Cost at 31 December 2023 244,304 Value adjustments 1 September 2022 -137,982 Share of loss for the year -106,322 Value adjustments 31 December 2023 -244,304 Carrying amount at 31 December 2023 0 Parent Company DKK'000 2022/23 Cost at 1 September 2022 150,899 Additions 93,405 Impairment -244,304 Cost at 31 December 2023 0 9 Investments (continued) Registered Equity Name/legal form office interest Subsidiaries: Chr. Hansen France SAS France 100% Chr. Hansen India Pvt. Ltd India 100% Chr. Hansen SRL Romania 100% Halley GmbH Germany 99% Chr. Hansen Gida Sanayi ve Ticaret A.S. Turkey 50% Chr. Hansen Malaysia SDN. BHD. Malaysia 50% Chr. Hansen Colombia S.A.S. Colombia 46% United Arab Chr. Hansen Middle East and Africa FZ-LLC Emirates 20% Registered Equity Name/legal form office interest Equity Profit DKK’000 DKK’000 Joint Ventures: Bacthera AG Switzerland 50% -37,794 -250,438 10 Inventories Parent Group Company DKK'000 31/12 2023 31/12 2023 Inventories Raw materials and consumables 222,437 174,260 Work in progress 370,399 269,871 Finished goods and goods for resale 404,217 316,764 Total 997,053 760,895 11 Deferred tax Parent Group Company DKK'000 31/12 2023 31/12 2023 Deferred tax at 1 September 2022 1,119,659 1,070,201 Deferred tax adjustment for the year in the income statement 58,453 -2,154 Deferred tax adjustment previous years -129,076 -34,981 Currency translation -2,300 0 Total 1,046,736 1,033,066 Provisions for deferred tax relate to: Intangible assets 705,584 795,511 Current assets 46,847 55,013 Other assets, deferred commitments and liabilities 294,305 182,542 Total 1,046,736 1,033,066 12 Non-current liabilities other than provisions Liabilities other than provisions can be specified as follows: Parent Group Company DKK'000 31/12 2023 31/12 2023 Bank debt: 0-1 year 16,463 16,463 1-5 years 0 0 >5 years 0 0 Total 16,463 16,463 Mortgage debt: 0-1 year 15,206 15,206 1-5 years 107,872 107,872 >5 years 381,728 381,728 Total 504,806 504,806 Taxes payable: 0-1 year 485,908 308,947 1-5 years 0 0 >5 years 0 0 Total 485,908 308,947 Lease obligations: 0-1 year 94,502 81,315 1-5 years 267,802 238,981 >5 years 718,452 711,972 Total 1,080,756 1,032,268 Total liabilities other than provisions 2,087,933 1,862,484 The average interest rate on mortgage debt is 3.7% p.a. (0.57% p.a. in 2022). Notes Group DKK'000 2022/23 13 Other adjustments Net financials 736,687 Tax on profit/loss for the year 385,321 Depreciation and amortization 1,470,775 Total 2,592,783 14 Other adjustments of non-cash operating items Equity adjustments 4,300 Share of loss in joint ventures 106,322 Exchange rate adjustments -34,645 Other adjustments 82,427 Total 158,404 15 Changes in working capital Change in inventories -230,328 Change in receivables -123,135 Change in trade and other payables -105,687 Total -459,150 16 Currency and interest rate risks and the use of derivative financial instruments The Group is exposed to market risk, primarily risks relating to currency and interest rates, and uses financial instruments to hedge recognized risks. The Group only enters into hedging agreements that relate to the underlying business. Financial instruments used by Chr. Hansen are cash instruments, foreign exchange spot trades, foreign exchange forwards, forward exchange swaps, and current and non-current loans. Foreign exchange rate sensitivity analysis The foreign exchange rate sensitivity analysis did not show any material impact on net profit from a 5% increase/decrease in exchange rates. Forecast future transactions The overall purpose of managing currency risk is to minimize the effect of short-term currency movements on earnings and cash flows. Chr Hansen A/S’ main currency is EUR. Exposure is limited by assets, debt and expenses to a certain degree matching the geographic segmentation of sales. 2022/23 Gains and losses recognised in the Max. income month to Notional statement DKK'000 maturity amount (fair value) Forward exchange contracts SGD 2 15 0 CHF 2 -500 -20 DKK 2 485 0 Total 0 -20 17 Related parties Chr Hansen A/S' related parties comprise the following: Control Novozymes A/S (part of Novonesis), Krogshøjvej 36, 2880 Bagsvaerd, Denmark. At 31 December 2023, Chr. Hansen Holding A/S held 100% of the share of ownership in Chr. Hansen A/S. At the time of publication of these financial statements, Chr. Hansen Holding A/S had ceased to exist following the merger with Novozymes A/S. Consequently, Novozymes A/S holds 100% of the share of ownership in the Chr. Hansen A/S. As the merger was approved subsequent to year-end, Chr. Hansen A/S cannot apply exemption rules in the Danish Financial Statements Act and therefore has to prepare consolidated financial statements for the financial year ending 31 December 2023 with corresponding comparative figures. Transactions Pursuant to section 98c(7) of the Danish Financial Statements Act, the Group and the Parent Company have not disclosed related party transactions as they have been carried out on an arm's length basis. 18 Contingent liabilities The carrying amount of buildings and machinery, DKK 1,791 million (DKK 1,630 million at 31 August 2022) have been pledged as security for mortgage loans in the amount of DKK 505 million (DKK 509 million at 31 August 2022). In 2018/19, Chr. Hansen A/S entered into lease agreements relating to renovation of Group headquarters in Hoersholm. The project was finalized in 2023. At of 31 August 2022, the contracts, amounting to EUR 77.4 million (undiscounted), had not commenced as the renovation was not finalized and were consequently not recognized as leased assets or lease liabilities. Tax Chr. Hansen A/S is jointly taxed with other Danish companies in the Chr. Hansen Group, Chr. Hansen Holding A/S. Chr. Hansen A/S is jointly and unlimited liable for the Danish income taxes together with the other jointly taxed companies, and for withholding taxes on dividends, interest and royalties related to the jointly taxed companies. Chr. Hansen A/S was part of a VAT group until 1 December 2023 with other companies in the Chr. Hansen Group, Chr. Hansen Holding A/S. Chr. Hansen A/S was until 1 December 2023 jointly and severally liable together with the other companies in the VAT group for any Danish VAT. Pending court and arbitration cases Certain claims have been made against Chr. Hansen A/S Group. Management believes the outcome of these disputes will not have a significant impact on the financial position. Guarantees Chr. Hansen A/S has provided security for associated companies in the Chr. Hansen Group. The security is limited to USD 5 million at 31 December 2023 (USD 5 million at 31 August 2022). 19 Events after the balance sheet date On 12 December 2022, it was announced that the Company’s immediate Parent Company, Chr. Hansen Holding A/S, had entered into an agreement with Novozymes A/S to create a new leading global biosolutions partner through a statutory merger of the two Companies with Novozymes A/S as the continuing company and Chr. Hansen Holding A/S being dissolved. The merger was approved by the European Commission 29 January 2024 whereby Chr. Hansen Holding A/S ceased to exist and hence subsequent to year-end, the Chr. Hansen Group is owned by Novozymes A/S. The approval by the European Commission was conditional upon divestment of part of the global Lactase enzyme business. The divestment was completed by the end of April 2024. Other than this, no subsequent events materially affecting the financial statements have occurred. Annual report Auditor's report on audited financial statements ParsePort XBRL Converter 2022-09-01 2023-12-31 2021-09-01 2022-08-31 2024-06-25 Rainer Chapour Lehmann Reporting class C, large enterprise 12516479 2024-06-12 5493000W4VDBER5YIZ12 12516479 Chr. Hansen A/S Bøge Allé 10-12 2970 Hørsholm Opinion Basis for Opinion 2024-06-12 mne29465 33771231 mne34453 33771231 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab