Welcome to the Novonesis conference call regarding the results for the first nine months of 2022. Throughout, all participants will be in listen only mode, and afterwards there will be a question and answer session. Today, I am pleased to announce Tobias Cornelius Bjorklund. Thank you, operator, and good morning, everyone, and welcome to our first nine months results of 2022. My name is Tobias Bjorklund, and I'm the Head of Investor Relations here at Novozymes. At this call, our CEO, Ester Baiget, and our CFO, Lars Green. We'll review our performance and key events for the first nine months of 2022 and as well as the outlook for the year. Also attending today's call are Tina Sejersgård Fanø, EVP Agriculture and Industrial Biosolutions, Amy Byrick, EVP Strategy and Business Transformation, Anders Lund, EVP Consumer Biosolutions, and Claus Crone Fuglsang, CSO and EVP of Research and Development. The entire call will take about 45 minutes, including time for questions at the end. As always, I would like to remind you that the information presented during the call is unaudited and that management may make forward-looking statements. These statements are based on current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in any forward-looking statements. With that, I'll now hand you over to our CEO, Ester Baiget. Ester, please. Thank you. Thank you, Tobias, and welcome everyone. Please turn to slide number two. Our results for the first nine months were very satisfactory. We delivered a strong organic sales growth of 9%, including a solid 6% in the third quarter. Timing impacted a few of the segments here in Q3, especially in food and agricultural, and we're confident about their performance for the full year, solidifying our upgraded 8%-9% organic sales growth outlook. Also, based on the strong start to the fourth quarter. On another strong note, the performance in both Bioenergy and Grain and Tech Processing exceeded our own expectations and did very well after the nine months as well as in the third quarter. Both emerging and developed markets delivered solid growth of 10% and 7% respectively, driven by broad-based growth across the areas. Turning to our financials, we delivered a solid EBIT margin, ROIC including goodwill and free cash flow. The effects of higher input, energy and logistics costs are visible, and in Q3 we saw further pressure on the gross margin. That said, pricing is increasingly turning more positive and with the strongest contribution expected for Q4. We see an overall positive pricing effect for the full year and increasingly so for 2023. When it comes to our innovation agenda, we introduced 13 new products in the first nine months of the year, including seven in the third quarter, of which three are available to the broad market. We launched solutions to enter the companion animal segment in China with biological cat litter odor control. We launched a solution to drive a stronger penetration in the laundry softener market segment, and we launched a solution for polishing textiles to improve and extend their lifetime. We also have additional engagement around the freshness concept for the laundry detergent with an exclusive partner solution launched in the third quarter. Through the year, we have been able to capitalize on the strength of our well-diversified portfolio and end market exposure, capturing additional growth opportunities as they arise and constantly raising our outlook for the year. With a strong start to Q4, we feel very comfortable about confirming the upgraded outlook as well as the sales indications provided for each of the five business areas. We have increased organic sales growth indication for Bioenergy and Grain and Tech Processing while maintaining the indications for all the other business areas. On the financial metrics, we maintain the outlook for the EBIT margin and ROIC, including goodwill. The free cash flow before acquisitions is reduced by DKK 400 million due to higher CapEx. This is related to phasing between 2022 and 2023 of the advanced protein solution production line in Blair, which is progressing very well within the timeline and investment level of DKK 2 billion. In the third quarter, we took part in the United Nations General Assembly in New York, where discussions around the need to accelerate the green transition are as strong as ever. Novozymes has a clear role to play in enabling this transition. I am very pleased to announce two of the locations of our customer co-creation centers. We have selected the Raleigh-Durham area of North Carolina for U.S. Center and Lyngby in the north of Copenhagen in Denmark for our European center. Our work on pricing continues diligently in close collaboration with customers, and our efforts have provided a stronger support as the year has progressed. The resulting benefit is expected to be the strongest in the fourth quarter, ending the full year at the positive pricing overall. We feel increasingly comfortable about the next year EBIT margin of 25% or higher, as more than two-thirds of the price increases are already committed. We continue to have a strong support from Novozymes' unique capabilities when it comes to driving productivity improvements as well as gaining operational leverage. With that overview, let's now look at each of the 5 business areas in more detail. Now let's start with Household Care. Please, can you turn it to slide number three? Thank you. Organic sales in Household Care were flat in the first nine months of the year and grew 4% in DKK. The performance was in line with expectations and included a negative effect from the war in Ukraine. Emerging markets performance was strong in the period and was driven mainly by Latin America and Asia Pacific. Developed markets declined slightly, mainly due to the continued softness in the European laundry volumes. Sales in the third quarter declined 1% organically and grew 4% in DKK. Thus, this was very much in line with our expectations and included a slightly negative impact from the war in Ukraine compared to the first quarters. Sales in developed markets performed well in the third quarter, driven by solid demand in the North American market, which more than offset the softness in European detergent market volumes. European consumers transitioning to private label cleaning solutions are not necessarily impacting Novonesis as our penetration is broad across formats, across tiers, across players. In emerging markets, third quarter organic sales declined primarily due to the negative impact from the war in Ukraine. The full year sales indication for Household Care is maintained at flat to 2% growth. This includes the negative impact from the war in Ukraine of around two percentage points, which we have been talking through already through the year. We expect to see enzymatic penetration to continue to drive growth in emerging markets and the freshness platform to contribute positively both in emerging and developed markets. This is further supported by the increased customer engagement we are seeing in terms of the freshness concept and exclusive partner solution launch in the third quarter. Our outlook also includes a slight contraction of the European laundry detergent volumes. To round off Household Care, we expect a solid performance in the fourth quarter, driven by innovation, our freshness platform, and increased penetration in emerging markets. Could you please turn to slide number four? Thank you. Food, beverages, and human health delivered good results in the first nine months of the year, reporting 8% organic growth and 18% growth in reported currencies. The performance was well-diversified, driven by broad market innovation, favorable market conditions, and customer requirements to mitigate increased input costs. There has been volatility between quarters this year due to customers' order patterns, and we already see a positive timing effect in the fourth quarter. Growth in Food was broad-based, supported by innovation, increased penetration, and ingredient substitution across sub-areas. Beverages performed very well due to higher consumption of low-carb beer, as well as from increased use of local raw materials in beer production. Human Health sales performed well based on the strong underlying demand, driven by cross-selling and geographical expansion of our unique solutions that also now include the Synergia product portfolio. Zooming into the third quarter, Food, Beverages, and Human Health grew 2% organically, which was soft. Performance was impacted by quarter-over-quarter volatility and timing of orders in Food. We continue to see good sales performance in Q3 from plant-based protein solutions in key markets. Beverages performed very well in the third quarter, especially in emerging markets, capitalizing on the favorable market conditions in raw material optimization and consumers' increasing appetite for low-carb beer. The third quarter performance in human health was solid, with double-digit organic sales growth and sound underlying demand. We maintain our indication for the full year with organic sales growth in line with the low teens, including a strong performance in the fourth quarter, especially in food and human health. Innovation and increased penetration will continue to be key growth drivers, and we expect customers to continue their focus on raw material optimization. Could you please turn to slide five? Bioenergy sales grew 26% organically in the first nine months. The performance was strong, driven by innovation and favorable market conditions across regions and applications. Growth was led by strong performance in North America, supported by the continued recovery of U.S. ethanol production, capacity expansion of corn-based ethanol in Latin America, as well as biodiesel, resulting in double-digit growth in both developed and emerging markets. The impressive growth was unlocked by the leveraging Novozymes' diversified and innovative toolbox for solutions. They allow our customers to gain market-leading yields, returns, and additional value generation in DDGs, corn oil, and fiber extraction. Growth was further supported by a solid market environment, enhancing the value of our innovation. According to EIA, U.S. ethanol production was up by around 4% in the first nine months. The third quarter organic sales growth of 32% was driven by similar factors as those for the first nine months, and EIA estimate for the U.S. ethanol production was up by around 1% year-on-year. In addition, sales of enzymes used for biomass conversion, commonly referred to as second generation biofuels, did well and contributed to growth in the third quarter. Looking at the full year, we expect growth to be driven by innovation, by product value optimization, as well as higher focus on yield and throughput. Additionally, we expect growth to be supported by 3%-4% higher U.S. ethanol production, as well as growing Latin America demand. Following the strong performance after the first nine months, we have raised organic sales growth indication for bioenergy from previously mid-teens to now high teens. The implied growth of the fourth quarter in bioenergy is estimated to be roughly flat, mainly due to a strong comparator from last year, volatility around year-on-year demand, and limited contribution from second generation solutions. Could you please turn to slide number six? Thank you. Sales in Grain and Tech Processing grew 11% organically in the first nine months. The strong performance was led by double-digit growth in Grain, with a strong growth in both developed and emerging markets, driven by favorable market conditions and innovation. Tech Processing also grew organically, although at a lower rate, supported by sales of enzymes used both for COVID-19 testing kits. In the third quarter, Grain & Tech Processing sales grew 7% organically. Similar to the nine-month performance, the growth in Grain was broad, with double-digit growth in both developed and emerging markets. Sales in Tech Processing declined mainly due to soft performance in textile, as well as lower sales of enzyme for COVID-19 testing kits. In the third quarter, and in line with our strategic direction, Novonesis signed an agreement to divest selected products in its microbial wastewater treatment business. The transition is expected to close at the beginning of 2023. Looking at the full year, we expect growth to be broad-based with innovation-driven performance and supportive market conditions, primarily in Grain. Grain is led by solid end market demand in Grain, market penetration in vegetable oil processing, as well as innovation. In Tech, growth is expected mainly from higher sales of enzymes for COVID-19 testing kits. Following a strong performance in the first nine months and continued good momentum expected in Q4, the full-year organic growth indication for Grain and Tech Processing is now around 10%. Could you please turn to slide number seven, please? Thank you. Agricultural, Animal Health and Nutrition sales grew 7% organically in the first nine months, led by a strong growth in Animal Health and Nutrition, especially in developed markets. The performance in Agricultural was soft and declined due to timing in the third quarter. Innovation and favorable market conditions, partially linked to higher soft commodity prices, boosted the demand for yield-enhancing solutions across the sub areas. Third quarter sales declined 7% organically year-on-year. Similar to the nine-month period, Animal Health and Nutrition grew very well, while Agricultural declined due to the timing of orders between the third and the fourth quarter. For the full year, organic sales growth will be led by strong growth in Animal Health and Nutrition, complemented by solid growth in Agricultural, with confirmed acceleration in the fourth quarter. Growth in Animal Health and Nutrition will primarily be driven by innovation as well as end market volume growth. For Agricultural, innovation and more diversified commercial model are key enablers for increased market penetration of our bio-yield and biocontrol solutions. Including the third quarter sales decline, the full-year organic growth indication for Agricultural, Animal Health and Nutrition is maintained at high single digits to low teens, following a confirmed outlook for a solid Q4 performance. With that, I'll hand over to Lars for a review of the financials. Lars, please. Thank you, Ester. Please turn to slide number 8 for a review of our financial performance. Despite continued pressure from rising inputs, energy, and logistics costs in the first nine months, we continue to deliver solid financial results and returns. Sales in the first nine months of the year grew 17% in reported Danish krone and 9% organically. Currencies provided a 7% tailwind, with another 1% added from the acquisition of Synergia. For the third quarter, sales grew by 16% in Danish krone, including a 6% organic growth, 9% from currencies, and 1% from Synergia. The gross margin was 54.9% in the first nine months of the year and 53.8% in the third quarter. As expected, this was below last year's margins for the respective periods, mainly due to higher input costs, energy, and logistic costs, which were partly offset by productivity improvements, operating leverage, and pricing. Our pricing efforts have provided an increasingly stronger contribution to the gross margin as the year has progressed, and with a more visible impact in the third quarter. The reported EBIT margin was 27.2%, which was 1.6 percentage points below last year. The decrease was mainly due to the lower gross margin and included a slightly improved OpEx-to-sales ratio, as well as tailwind from currencies. The reported nine months EBIT margin also included around DKK 200 million contribution impacting other operating income, which relate to the accounting gain from the 21st.BIO investment recognized in the third quarter. The underlying EBIT margin, when adjusting for non-recurring items in the first nine months of the year, was around 26% and roughly 2% points below last year's underlying EBIT margin for the same period. The third quarter EBIT margin was 29.5%, which was 0.4% points above the third quarter last year, and this included the positive contribution from the 21st.BIO agreement, as well as a tailwind from currencies. Adjusting for 21st.BIO in the third quarter, the underlying EBIT margin was approximately 25%, impacted by increased input costs and a higher OpEx-to-sales ratio. Net profit for the nine months was strong at roughly DKK 2.8 billion, which was 11% higher than last year, supported by an overall increase in EBIT as well as positive one-off financial gains. Free cash flow, excluding acquisitions, was DKK 1.5 billion in the first nine months of the year and DKK 489 million in the third quarter. As expected, this was a decline from last year due to the increased growth investments we are undertaking, and especially related to the state-of-the-art advanced protein solutions production line at our site in Blair, Nebraska, which is progressing very well. Inventories were also somewhat higher, mainly from higher input costs. ROIC, including goodwill, ended at 17.8% and was around 2.8% points below last year, mainly due to acquisitions and the increase in growth investments. Now please turn to slide nine for an update on the 2022 outlook. As we announced on October seven, we have upgraded our full-year organic sales growth to 8%-9%. This followed a stronger-than-expected performance in the first nine months of the year and a strong start to the fourth quarter. In the fourth quarter, we expect a stronger contribution from pricing and a more positive mix. This, and the solid start to the quarter, has strengthened our confidence in the increased guidance for the full year. Sales reported in Danish kroner are expected to be around nine percentage points higher than the organic sales growth outlook based on the latest currency exchange rates. As for the full-year EBIT margin, we expect solid results and maintain the 26%-27% outlook. We continue to see pressure from input, energy and transportation costs, while also experiencing improved pricing and a stronger product mix in the fourth quarter. While the third quarter gross margin was soft, we expect around 250 basis points decline in the gross margin for 2022 compared to 2021. While we navigate the shorter term implications from higher input, energy and logistics costs, we have already committed more than two-thirds of the price increases for 2023, and we see continued good momentum in our pricing discussions with customers. This gives increasing comfort to deliver 25% or higher EBIT margin for next year. For the ROIC, including goodwill, we expect a full year result of 17%-18%, which includes the positive impact of about one percentage point from the non-cash accounting gain related to the 21st. BIO agreement recognized in the third quarter of this year. We are adjusting the free cash flow before acquisitions by DKK 400 million following higher net investments. This is due to phasing between 2022 and 2023 of the construction of our advanced protein solutions production line in Blair, which is progressing very well. We are maintaining the initial timeline investment of around DKK 2 billion and are increasingly comfortable with its scheduled completion by end 2023. As mentioned in relation to the second quarter announcement, we have here in the third quarter completed the divestment of the minority ownership of Albumedix. The transaction does not impact any of our outlook parameters. Rounding off on the financial outlook, we continue to make significant growth investments to support our long-term growth and returns, and we are executing on our strategic agenda. With current visibility, we feel very comfortable when it comes to delivering on our financial targets as set out in our strategy, Unlocking growth - powered by biotech. With this, I'll now hand back to Ester for a wrap-up before we open up for questions. Ester, please. Thank you. Thank you, Lars. Could you please turn to slide number 10? Thank you. Let me quickly summarize our main messages from today's call. We've delivered a strong nine-month performance with 9% organic sales growth and a solid financials despite the impact from higher input, energy and transportation costs. We have increased organic sales growth outlook, and we reconfirm this upgrade after a strong start to Q4. We see good traction with price increases being implemented across all business areas. The benefit will be more visible in the fourth quarter and even more so in 2023. Accordingly, we confirm our view of an EBIT margin of 25% or higher in 2023. I want to highlight the diligent execution of our strategy with key progress areas here in 2022 being well on track. Since the last quarter, we have progressed very well on key milestones in the construction of the new production line for advanced protein solutions in Blair, Nebraska. We continue to strengthen our commercial setup, bringing in new talent and capabilities and now having selected two locations for our customer co-creation centers. Finally, I would like to commend the entire organization for the fantastic job that is ongoing. We're delivering growth levels that have not been seen in Novonesis for many years. We're driving a more focused and prioritized innovation pipeline, securing our growth ambitions for both the long term and the short term. We have a second-to-none production and optimization setup, enabling fast and efficient delivery of our innovation. As we enhance our commercial strength, we are able to increasingly capitalize on our full biological toolbox. By combining these unique capabilities, we can, together with our customers, accelerate the world's transition to a climate neutral society, transform the food systems and enable healthier lives. With those concluding remarks, we're now ready to open up for questions. Operator, if you could please begin. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you are using the speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. Our first question comes from the line of Gunther Zechmann with Bernstein. Please go ahead. Hi. Good morning. Gunther Zechmann from Bernstein. Hi, Ester. Hi, Lars. Hi, Tobias. Two questions to start, please. The first one on pricing. You said two-thirds of the pricing initiatives are committed for 2023. Are you willing to share what level of price increases you're looking for for 2023, please? Linked in with that, have you seen any volume elasticity, any erosion on volumes from the price increases that you've pushed through so far? That's the first one. The second one on the solid start in Q4, if I can just push you a little bit more on that, please. Are you willing to share any numbers with us, from October or the order book in November? Ester, you mentioned especially Household Care being solid in performance in Q4 so far. Same question there. If you're willing to share anything more quantitatively, that would be great. Thank you. Thank you, Gunther, for your kind words and broad questions. Let me start giving a little bit of color and then have Lars build on it and maybe Anders also, if you wanna put a little bit more color on Household Care. I'll start with the second question because it has a fast answer. I mean, it's a strong start of Q4. With that strong start of Q4, we also confirming the timing effects that we saw in Q3. We see that particularly in Food and in Health and across all the segments, but particularly in those two. With this strong start of Q4, we feel even more reassured of the uplifted guidance that we set and we announced in October 7. To your comment on pricing, we have seen increasingly contribution of pricing through these last quarters' years. If you remember, we evolving from a erosion of 1%-2% that we had in the past to last year finishing the year with a slightly negative impact on price. Then, with the impact on price growing quarter sequentially after quarter and then aiming for a slight positive contribution at the year-end. Next year, that contribution will be even stronger. You will see pricing as a stronger contributor of our growth next year, coupled with volume. We are a growing company. We see a strong demand from our solutions across all fronts. That continues to be in place. Next year you will see both volume growth and then also a further acceleration or further contribution, both from what has been historical levels on price. On your question on elasticity, we're having extremely good conversations with our customers. We're pricing our solutions on value, on the value that we're bringing in. Those are the conversations we're sharing with our customers on the fair share of value in this environment that we live in of high energy prices, a environment also with a strong need of sustainable solutions that enable healthier fruits and foods and functionalization, and that's the type of conversations we're having with our customers with very positive momentum. Lars, if you wanna build on, please. No, I think you covered it very well, Ester. I just wanna reiterate that we see this positive contribution and the positive trajectory for pricing during the year. We start to see pricing have actually an impact on our numbers here in Q3. We expect to see a positive contribution in Q4. We expect to see that increase into 2023. It's too early to say exactly what the components will be for next year. We will come back in January when we guide for 2023 to be more specific on our expectations for next year. We are expecting also a positive volume contribution. That's where we see the future related to the pricing discussions we have right now. Anders? Thanks. Let me just add a little more flavor. Actually, it's not only Household Care where we see a good start into October. We actually see that in both Household Care and Food and Beverage and Human Health. As I guess you also relate to, we need to see a tick up in growth to deliver on the guidance in both segments. It's also clear that when you then do the comps for Q4, they're also much easier. Let me then finally also add that our Human Health business is also expected to deliver higher growth in the fourth quarter. All in all, we are fairly comfortable with the guidance for both segments. Thank you. The next question comes from the line of Søren Samsøe with SEB. Please go ahead. Okay. Søren Samsøe, your line is open. You may ask your question. Sorry, can you hear me? Yes, we can hear you well, Søren. Thank you very much. Just if you could expand a little bit on the pricing. It seems that you of course expect positive contribution for 2023, but if you could also tell a little bit about what segments is driving this. Is it equal across all segments or do you expect a strong contribution in for example? Yeah, some of the other areas like Bioenergy or a negative pricing in Household Care, or how do you see it? Could expand a bit on that. Thank you. We see positive contribution across the whole segments. The conversations with our customers are equally relevant across all areas. It is true that the seasonality, as the contracts expire, that might differ from one segment or the other, but from the momentum and from the intensity, we expect a similar level of contribution across all segments. Okay. That's clear. Then the second question goes to human health, where you have very impressive double-digit growth. Again, if you could comment on what regions and what segments is driving this growth could be interesting. Thank you. Amy Byrick, could you build on this? Sure. Thanks. Yeah, we were pleased with the double-digit growth in Q3 with human health. I think most interesting is that actually what we see is that we haven't actually been able to fully realize the underlying demand that we're seeing in the market because of some supply chain constraints. That's really, I think, Anders referred to it earlier, the very strong outlook that we're seeing as we go into Q4. We see the strength in our HCP channel, the healthcare practitioners, which is particularly in the U.S. We also see launching in rest of world with new product launches into China and also growth in Europe. Really it's quite broad-based growth, and as we see this growth, it's really the challenges that we look at are relieving, dealing with some of the supply chain constraints to be able to realize the full potential that we see in the underlying demand. You don't see any signs of, I mean, you could argue that probiotics area could be seen as a premium area for some consumers. You're not seeing any signs of downtrading or anything like that at this point. I think what we see right now, and I think it's where we are, very confident both about the product portfolio, which is quite differentiated in terms of mode of action-driven products, and also some of the differentiation in terms of channels. I referred earlier to the healthcare practitioner channel, which are quite differentiated. No, right now we see strong continued growth. The next question comes from the line of Alexander Sloane with Bank of America. Please go ahead. Good morning. Thanks for taking my questions. First on Household Care. You talked this quarter about EM being a bit softer and developed markets actually growing, which is a reversal from the rest of the year. Can you talk about in each of those sort of what you're seeing on demand and how you expect that to evolve as consumer incomes get under increasing pressure? And then the second question on Bioenergy. You talked about second generation ethanol sales, I think, to rise in this quarter, including they have very big growth ambitions and building three more plants in the next two years. Do you share their excitement on that market? And when would you expect that to translate into meaningful recurring second generation ethanol sales for you? Thank you. Thank you, Alex. I will let Hannes and Tina answer the question on Household Care and on Bioenergy respectively. Before we go there, I would only like to commend the fantastic job that Tina and the team has done on Bioenergy by deleveraging, de-risking, and bringing a broader exposure for Bioenergy, making a business that was highly exposed to bioethanol for gasoline in North America in a much broader range of solutions geographically and also reaching expansion reach through applications. On Household Care, thanks for the question. Our main challenge in emerging markets right now relates to the war in Ukraine and that has quite an effect because we have stopped selling. As we also called out, that's why we take our guidance down a couple of percentage points in Household Care, and that's the major deviation. We also see a little bit of softness in China due to COVID lockdowns, and we also see some challenges in Africa. On the other hand, we see strong momentum in India and very strong momentum in Latin America. On developed markets, sort of the net of that is good development in North America with broad-based sort of penetration and then some remaining challenges as we also called out in Europe. That sort of makes up the composition of the Q3 performance in Household Care. On biomass, yes, we are happy here in Q3 to see that biomass is contributing to our numbers. As any plant starting up, it is a bumpy ride, so therefore, you shouldn't expect a straight line. However, across geographies, we are in fact seeing increasing interest in biomass conversion, and we are cautiously optimistic. That was Tina with a particular voice. Yeah. Sorry. Thank you. The next question comes from the line of Sam Perry with Credit Suisse. Please go ahead. Hi, guys. Thanks for taking my questions. Firstly, on food and bev, the guide for low teens growth for the full year implies a step up to around 30% organic in the fourth quarter from 2% this quarter. I'm sort of keen to understand, is there any one-off impact or nature of that sales growth? I'm aware that you've got a broad base of customers, and I know, as your comments earlier suggest that you've got good visibility over that. Keen to understand why there's been such a large amount of phasing and if you sort of stand by that low teens growth for the full year. Thanks. Thank you, Sam. Anders Lund, could you please take the question? Yeah, thanks. So if you look at the composition of this year, the quarter by quarter has been a little bit bumpy in Food and Beverages, where we started out with very strong growth in Q1. When we look at the full year, we look at an October that came in strong. We look at Human Health that we believe quite strongly will accelerate. Finally, our comps are also very favorable. All in all, that makes us comfortable that the guidance is intact for the segment. If you do the math, you also have to look at some of the run rates of full year. Actually during the run rates, you come in very close to the low end of our guidance. Again, the comps actually makes a big difference in our ability to deliver within the guidance of the segment. Thanks. If I could just have one follow-up. In terms of the margin as well, your guidance for this year for 26%-27%, if you came in near the bottom end of that, or actually if you look at the Q3 margin ex one-off, you're slightly below the 25% guide for 2023. If I was to do the margin bridge there, can you help us with the margin bridge there? Obviously, there's an element of pricing, are you saying that that more than offsets the negative cost into next year? Lars, please. Yes. You can say when we look at our margin, then we are at around 26%, you can say, when adjusted for those one-offs, and therefore, you can say well in line to deliver on our adjusted 25%-26%, if we exclude that one-off impact. I think we are at the end of Q3 here in a very good place to deliver on our full year guidance. As we said, we do expect our pricing impact to accelerate here in the fourth quarter. And that gives us the comfort to also stick to our guidance for the full year of an EBIT margin between 26% and 27%. If I can only echo what Lars said, we are in a good place to deliver on our guidance for the EBIT margin for this year. We are also in a good place to deliver on the minimum 25% target that we have for next year. Thank you. The next question comes from the line of Chetan Udeshi with JPMorgan. Please go ahead. Yeah. Hi, thanks. The first question, if I just look at the full year gross margin guidance, which I think you mentioned earlier, 250 basis points decline. I think it implies something closer to 56%, if I do my math or if I've done it correctly for Q4. Which is a step up from just under 54% in Q3. I just was keen to understand that delta of 200 basis points improvement in Q4, how much of that is actually net pricing getting better versus mix getting better? That's the first question. The second question is slightly unusual, but I was keen to understand the 21st.BIO, you know, the formation of that. I'm curious, what is in store for Novozymes from that JV? Because if I understand correctly, you are actually contributing some of your IP patterns for production sites. Should we be thinking about this more like a licensing model in the future where, you know, you end up getting some or the other, you know, ongoing royalty stream in the future? Thank you. Thank you, Sebastian. I'll give you a little bit of color on the gross margin. Lars will of course further elaborate then, and then, Claus, if you put your comments on 21st.BIO. To your question on what are the contributors of the gross margin, all of them. We're facing tailwinds, headwinds here on pricing, on raw materials, on energy, on logistics, and we are partially overcoming them with all the capabilities within Novozymes, through productivity, through mix, and yes, also through top line growth, and also through an increasing contribution of pricing that sequentially has been growing quarter over quarter with Q4 being the one of the strongest of the year, and also even growing even for the next year. It is also true that in Q4, we're expecting a margin expansion relative to Q3, and where pricing is gonna be on mix confirmed by the timing contributors of that. With that, Lars, if you could build in. Just building on what you said, Ester, we do expect an increasing impact from price in Q4. If you then look at our comments around the timing between Q3 and Q4, that also relates to areas such as baking, human health and BioAg, all areas that has a relatively high gross margin. Therefore, factors or timing effects that supports a better product mix in our expectations for Q4. Those two combined, and then our continued efforts with our toolbox, as Ester spoke to, that's the background for our guidance for the full year. On 21st.BIO, the arrangement is that Novozymes have delivered an IP and strain assets into this entity and then capitalized by Novo Holdings. The focus of this is to bridge the scale-up challenges that industrial small startups in industrial biotech see, and it pertains to applications that are outside Novozymes' focus areas. Novozymes will benefit one from, of course, the value creation within 21st.BIO, and of course, seeing what's coming in industrial biotech in areas that Novozymes are not working in. In that way, we leverage, you could say, our assets beyond what we are doing as a company ourselves. Thank you, Chetan Udeshi. Okay, thank you. Thank you, Chetan Udeshi, for your questions also. Next question, please. The next question comes from the line of Sebastian Bray with Berenberg. Please go ahead. Hello, good morning, and thank you for taking my questions. I would have two, please. The first is on energy costs. Could you please give an idea of what the year-to-date inflation and energy costs has been? Could you please remind me if the exposure moving into 2023 is still essentially spot? My second question is on agriculture. I appreciate timing effects have happened quite often in the past in this segment, but the soft commodity environment is quite supportive, and Novonesis is a little less dependent on a single distributor, BioAg than it has been in the past. Why exactly would sales be shifting from Q3 into Q4? Thank you. Thank you, Sebastian. Lars, if you can take the question on energy and then Tina on agricultural. Thank you. Yeah. Energy is, of course, one of the components of the increasing input costs that we have seen here in 2022. One of the components of the pressure that we have on the gross margin, and therefore, the decline or compression in the overall gross margin of around 250 basis points versus 2021. Exactly which contribution comes from which, I'm not going to share because there is a mix of so many factors and so it's just I think it suffices to say that energy is obviously one of the significant ones and also one that has increased here in the H2 of the year, where in particular the European energy costs have increased. When you look at the next year, then obviously that has an implication for 2023. At this point in time, we have some hedging for 2023, but not to an extent where we would normally be in a, let's say, normal year. This is really because of those hedging markets not being, let's say, as efficient as they have been in prior years. There is an element of exposure on our energy costs, also when we look into 2023. Mind you, in any year, this is the time when contracts on raw materials, energy and you can say all of our input for our facilities would be done. That is also what we are doing now, like we are building the agreements with our customers on the sell side. This is the cycle and the period we're in right now where we're securing our contracts both on the input and the output side for 2023. On the BioAg and agricultural side, you are right, Sebastian, that we have upgraded and changed significantly our go-to-market model from the alliance set up with Monsanto to a more diversified setup, which we are operating now. There are differences for when it is we prepare for the biggest planting season. You know, North America is a big part of our business, and there are timing differences for when it is these kind of things happen as we prepare for next year. We are, though, confirming the full year outlook for the segment Agricultural, Animal Health and Nutrition and are confident on delivering on that. Thank you, Tina and Lars. One last question, please, operator. The last question comes from the line of Lars Topholm with Carnegie. Please go ahead. Yes, also two questions from my side. I actually wanted to ask Tina to hear her voice, but, don't worry, Tina, they're not for you. Thanks, Lars. When I look at your R&D costs, both in relative terms and absolute terms, they appear quite low for Q3. Is that because Claus has to be the one defending your margin, or is this just phasing, and what kind of levels should we look at going forward? A second question goes to your player project, because current markets for plant-based meats are quite soft, probably because of some price elasticity. I just wonder if there are any changes to your sort of long-term outlook for that business. I think you have explained that eventually your offtake agreement will secure an annual revenue in excess of DKK 1 billion. I wonder if you can put some words on the phasing of that. Is it like the hygiene platform where it takes 200 years, or is this, you know, within a 5-year period after startup, or how should we get our heads around that? Thank you. Thank you, Lars. We're all delighted to also listen to your voice. Actually, in many times in your questions you implicitly bring the answers. Always a pleasure also to hear your questions. Let me take a little bit the first one on R&D. Lars, to support it with figures, and then, Amy, please, on our path and trajectory of our DKK 1 billion sales from the protein platform. On our efforts on margin, this is a collective effort from the whole team here on margin. It comes from all fronts. It comes from productivity, it comes from innovation, it comes from top line growth, it comes from pricing, it comes from mix, it comes from all areas. It is not coming at the expense of what we are, which is a science company. It is not coming at the expense of R&D resources. That's an area that we continue to invest and we continue. It's an asset. This is who we are, and we're gonna continue to invest in R&D. Then it is true that depending on how you take the picture, and as we're growing rapidly, that can trigger exactly the driver of the question that you made. With that, I'll pass it to Lars. Yeah. Just to support what Ester said, you'll recall, Lars, that in the beginning of last year, we did take some costs to optimize our R&D footprint. Really this is what we are now seeing the benefit of. We are not taking away the resources from R&D. We are sticking to it. In absolute terms, you are seeing a cost level that is fairly constant. In relative terms, we are seeing a decline in our R&D ratio, and that is because we have a significant part of our R&D costs nominated in Danish kroner based here in Denmark. Of course, that doesn't have the same impact as our currency exposure on the top line. In relative terms, you are seeing the R&D ratio going down. As I said, and as Ester said, we are not taking away the investments in R&D. We are sort of sticking to the plan that we had when we optimized the R&D setup last year. The DKK 475 million we see in Q2, is that sort of a fair run rate if I maybe put DKK 25 million on top, then we have a range, is that what we should factor in? I think that is too detailed, Lars, to guide you specifically on the absolute kroner investment in R&D. What I'm saying is that we have arrived at a level now where we are investing in line with what we said we would do. We are not reducing our investments in R&D. I think that's the key message. Thank you. And, uh, on- The protein? Yeah. On your question on the proteins plant, I think you're absolutely right. While we still see growth in the plant-based markets in Europe and Asia, we do see inflationary pressures taking a toll and slowing down growth in the US. I think what's really interesting though when you look at it is that the difference between players in that market. You have a subset of players who are growing dramatically still, and you have some which are really in rapid decline. The difference between the players who continue to grow and those who don't is really the perceived nutritional benefits and also the sensorial attributes, so taste, texture, how good the products are that are on the market. It's exactly that which gives us confidence in the ongoing category for Novonesis. If you look at the products that we're bringing to market, whether it's our advanced proteins products that are yet to come, or whether it's the existing products in enzymatic modification of proteins, they're all targeted at increasing nutritional profile, increasing sensorial attributes and improving the end products. We believe in the relevance of the category ongoing, and we believe very strongly in the positioning that Novonesis has. You know, bottom line, we remain confident both in the category itself and also in the business case supporting the investment in Blair. The timeframe for reaching the $1 billion mark, and also I assume what you say implies your offtake agreement is with one of the players that are still growing. Is that the right way to read your answer? Yeah. We don't see any change versus the original agreement. Can you remind me what you said about timeframe in the original agreement? Yeah. Maybe I can support and answer this question. We said originally, and we stick to that we expect to reach the DKK 1 billion of sales within the first 5 years of the new facility being in operation, and that's still our expectations. Fantastic. Then the one on your offtake agreement. I know you won't disclose a customer name, but is it fair to assume it's one of the players that are still growing? Yeah, yeah. As you rightly say, you've answered your own question again, Lars. We can't disclose the details of the contract or the name. Okay. Thanks for taking my questions. Thank you all for joining us today. Thank you for your questions and for the conversation, and looking forward to meeting many of you today, tomorrow, and these forthcoming days. Thank you very much.