Good morning. And welcome to the Novozymes conference call. Today, we'll review our performance for the first nine months of 2019, as well as our outlook and our current priorities. As we hosted the conference call on October 10th following the updated full year outlook, today's presentation will be shorter and should take no more than about 15 minutes. Afterwards, we'll be happy to take your questions. My name is Peder Holk Nielsen, and I'm the CEO of Novozymes. I'm joined here today by the Executive Leadership Team and Investor Relations. Before we jump into the subject matter, I would like to take this opportunity to properly welcome Lars Green to the Executive Leadership Team. He has held various financial positions at Novo Nordisk both in Denmark and abroad and has since 2017 been a member of the Novo Nordisk executive management team. Lars knows Novozymes very well as he has been on the board and been the Chairman of the Audit Committee since 2014. I think he's the perfect match for us, and we're happy to have him onboard. Now let's turn to our performance on slide two. In the third quarter, organic sales grew by 1%. Although this trend is an improvement from the 3% decline in the first half, we're not satisfied with the overall performance of our business in the first nine month of 2019. As we communicated in the revised full year outlook on October 9th, our U.S. ethanol and global agriculturally exposed businesses continues to be challenged - continues to challenge the 2019 outlook. This impacts Bioenergy. It impacts BioAg and starch processing negatively. We expect to close the year with a flat to minus 2% decline in organic sales. The reported EBIT margin was 27.6% for the first nine month of the year, and we guide 27% to 28% for the full year as we announced on October 9th. We're progressing well on our strategy better business for biology - with biology. We're implementing the structures and the responsibilities that allows us to run our business portfolio units in the appropriate manner to secure delivery on our midterm targets. Before we review the individual business areas, let's look at the geographical sales performance. Please turn to slide number three. For the first nine month of the year, sales to the developed markets declined 1% organically while emerging market sales declined by 3%. As the developed markets declined, mainly due to a weak at U.S. ethanol business, the emerging markets were down primarily due to economical constraints in the Middle East. China has also been soft primarily in starch and Household Care. The third quarter in isolation. For the third quarter, in isolation, the emerging markets grew by 6% organically driven by Household Care and Bioenergy in Latin America. Developed markets declined 2% as a result of a weak U.S. Bioenergy business. And now I'll hand it over to Anders for a review of the developments in Household Care. Anders, please?

Thank you, Peder. Please turn to slide number four. Organic sales for Household Care grew by 5% in the third quarter and was flat for the first nine months of the year. The stronger third quarter performance was expected. It was driven by the Freshness rollout and by the negative impact from the Middle East being annualized in the second quarter. Additionally, we experienced positive timing effect in Q3 at the expense of Q2. Sales in both developed and emerging markets grew in the third quarter. Growth in developed market was mainly driven by Europe. In the emerging markets, soft performance in China was more than offset by strong performance in India, Africa and Southeast Asia. Recent year's trend of solid sales growth to regional customers and declining sales to our global customers continued during the first nine month, but with less of a negative impact from global customers compared to last year. I'm excited to see our Freshness platform developing well and according to expectations, not only in terms of our 2019 outlook, but also in relation to reaching the DKK 1 billion ambition over time. In September, we opened the doors to our brand new Household Care customer experience center in Beijing, China. It's part of our effort to increase our presence in the emerging markets, and it adds to the previously announced detergent design center in India. In Household Care, we maintain our full year expectation of low single digit growth. Moving to Technical & Pharma. Technical & Pharma sales declined by 3% organically in the first nine months of 2019 and by 14% in the third quarter. This was below expectation and mainly driven by lower sales in textiles. And also in Q3, we experienced impact of timing in pharma. We expect mid to low single digit decline in 2019 for Technical & Pharma. That's all for me. Andy, please.

Thanks, Anders. Please turn to slide five. In Food & Beverages, we've had a difficult first nine months due to weakness in starch processing and baking, partly counterbalanced by solid performance in Beverages & Food and Nutrition. In Q3, challenges in starch continued, while baking improved and Food Nutrition and beverage continued to deliver growth. Overall, third quarter sales grew by 1% organically giving a 1% decline for the first nine months of 2019. For starch, performance was hit earlier in the year due to harsh weather in the U.S., and it continues to be impacted by high corn prices competing against low global sugar pricing. Further, we're seeing some market share loss in low margin Chinese segments where we've increased prices. Through Q3, we still see softness in developed markets starch processing volumes, and China remains challenged due to continued adverse commodity prices. Although sales to the baking industry remain dynamic, we saw improved performance in Q3. As we expected, we've seen some recovery in the Middle East & Africa business through export oriented European customers. Further, animalization of fresh-keeping price decreases in North America is progressing, meaning the headwinds in that market are stabilizing. Other emerging markets are mixed with strong growth in Asia Pacific continuing while Latin America is challenged. Food Nutrition delivered growth in both the third quarter and the first nine months of the year. The solid performance was driven by the increased penetration of our protein ingredient and plant extraction solutions. Supporting this business, we maintain our focus on pushing commercial penetration and on developing new products to support higher quality and more sustainable foods. Sales to the beverage industry are performing well driven by brewing and juice and wine, while sales to the beverage alcohol industry remain a bit soft. Summing up, it's been a disappointing first nine months in Food & Beverages due to the softness in the starch processing business, as well as weaker than expected performance in baking. Structurally, we continue to see opportunities for health awareness among consumers. Further, we continued to promote innovation in new segments such as vegetable oil processing and grain milling. However, we won't see full recovery from the headwinds early in 2019, and therefore, we expect the business to finish the full year flat compared to last year. Tina, over to you. Tina Sejersgård Fanø: Thank you, Andy. Let's start by looking at Bioenergy on slide six. Our Bioenergy sales have been affected by a very challenged U.S. ethanol industry this year. This was also seen in the third quarter as our sales declined of 5% compared to 2018 taking the nine month performance to minus 4%. Production volumes in the U.S. ethanol industry declined further in the third quarter. High inventory levels and low gross margin has led to idle plant and lower capacity utilization. To support profitability and reduce losses, the most flexible producers have optimized capacity utilization. Our customers are producing less than the average industry decline, which according to EIA should be down by some 4% in the third quarter and by 2% after the first nine months. On a positive note, we continue to see growing demand from Brazil and good penetration for our new yeast solutions in the U.S. Looking at the long term, China is also progressing well with additional provinces announcing implementation plans to comply with the mandate. The conditions of the U.S. ethanol industry have been challenging in 2019 adversely impacting our sales in Bioenergy. We don't see the situation improving in the fourth quarter and thus expect a mid-single digit decline in organic sales for the full year. Now please turn to slide seven for an update on Agriculture & Feed. Sales in Agriculture & Feed grew 3% organically in the third quarter and declined by 3% after the first nine months. Sales in agriculture remain below last year following the wet spring weather in the U.S. Midwest. BioRise, our new corn inoculant launch in partnership with Bayer, is doing well, while our solution for other crops are more challenged. And although the third quarter performance was a step in the right direction, it was not as strong as expected. This includes uncertainty to the planting season in Latin America, which is also reflected in our full year expectations. Feed sales are developing as expected supported by the rollout of Balancius, our recently launched solution for improved gut health in poultry. Looking at the remainder of the year, uncertainty persists in agriculture with drought in Latin America adding to the concern. This is also why we expect a mid to low single digit decline in organic sales in Agriculture & Feed for the full year. So now over to you, Thomas.

Thank you, Tina. Please turn to slide eight. In the third quarter, we launched four new products, and we took important steps towards implementing the updated strategy presented earlier this year. Two of the new products launched were for the broad market and two were exclusive. This brings the total number of launches in 2019 to 16. One of these, Achieve Advance, is a solution for automatic dishwashing in Household Care. This new product offer customer’s high performance in short and wash cycles at lower temperature with a lower environmental impact. We also launched Optimize 500 together with Bayer. This new robust soy inoculant brings together selected bacteria’s and provide the largest possible number of nodules in the main routes to boost the yield potential of each plant. In addition to launching our new products, we are in the process - in the process of implementing the updated strategy. The new pipeline governance has been outlined to enable better and more structural resource allocation in accordance with the new business portfolio unit framework. In essence, we'll focus our efforts where we can move the bar highest. We have reduced the number of R&D projects in our pipeline from some 150 projects in the spring to fewer than 100 projects today. I'm really proud of the diligence all our colleagues have shown in this transition and the fact that it hasn't led to any delays on ongoing projects. With fewer projects in the pipeline, we can allocate more resources to each project, keeping a steady flow of new product launches. We're confident that the new setup will allow for more impact from innovation. That's all for me, and I'll hand over to Lars.

Thank you, Thomas, and thank you, Peder, for the warm welcome. I'm happy to be onboard, and I look forward to meeting many of you listening in the coming month. Please turn to slide number nine. Organic sales came out at minus 2% for the first nine month, including a third quarter performance on 1% growth. This was softer than expected and due to U.S. ethanol and agriculturally exposed businesses also impacting Agriculture & Feed and starch processing negatively. Reported nine months sales in Danish kroner were flat, benefiting from currencies, but reduced by one-off divestments and less deferred income. The declining top line had a negative impact on the gross margin. At 55.2% after the first nine months, this was roughly 200 basis points lower than last year. Margins in the third quarter were as expected, also impacted by severance payments from the August restructuring to the tune of roughly DKK 250 million. The severance costs are split roughly even between the operational cost lines. The EBIT margin for the first nine months of the year is slightly below last year. The second quarter recognition of BioAg deferred income and the divestment of the remaining pharma-related royalty contributed positively while the Q3 severance payments impacted negatively. The EBIT margin, excluding one-offs for the nine month period, was roughly 26% and for the third quarter close to 30%. The effective tax rate for the third quarter and first nine months is on par with last year. Net profit contracted 7%, including hedging losses on the U.S. dollar. Free cash flow before acquisitions of DKK 2.1 billion after the first nine months of 2019 was slightly higher than last year. Cash flow has benefited from lower net investments as construction of the innovation campus in Denmark and of the new production facilities in India and the U.S. has been completed. However, the positive cash flow effect of a lower investment level was partly offset by a lower operating cash flow. Now please turn to slide number 10 for the 2019 outlook. The full year outlook is reconfirmed as per the October 9 revision. Organic sales for 2019 is expected to come in at minus 2% to flat, and sales growth in Danish kroner is expected to be half to 1 percentage point higher. The EBIT margin is expected to be between 27% and 28% in 2019. The underlying EBIT margin is expected to end the year at between 25% and 26%, excluding the August restructuring cost as well as the positive second quarter one-offs. Given the lower sales and EBIT margin outlook, we expect the development in net profit to be at minus 5% to flat. We maintain our guidance for free cash flow before oppositions at DKK 1.9 billion to DKK 2.3 billion. This is explained by lower operating cash flows and lower net investments as we are well invested in our production capacity and the cost of the new innovation campus came in lower than expected. And finally, we expect ROIC excluding goodwill, to be around 21% for the full year. With that walk-through of the financials and our full year outlook, I'll pass the word back to Peder for a wrap-up.

Thank you, Lars. We're delivering on our own expectations for new product launches and commercialization of new innovation. This has unfortunately not been enough to mitigate the bad developments in agriculturally exposed businesses with floodings in the Midwest, weakness in starch, the reductions in U.S. ethanol volumes and sanctions in the Middle East. We confirm the full year outlook as we announced on October 9. We're moving ahead with our strategy, better business with biology. A strategic direction is set and the implementation of the strategy is well underway. We're confident that the changes will allow us to meet the midterm targets. As announced on October 15, I'll leave Novozymes by early 2020 after presenting the full year results. I have, together with the board, agreed that this is the right time both for Novozymes and for myself. I'm confident we are in a good position to deliver on the midterm targets. That concludes today presentation, and we're now ready to take your questions. Operator, please begin.

Thank you. [Operator Instructions] First question is from Jonas Guldborg from Danske Bank. Please go ahead. Your line is now open. Okay, it looks like Jonas' line was disconnected, so we'll go to the next question from Michael Novod from Nordea Markets.

Yes. It's Michael Novod from Nordea, Copenhagen. Just two questions, two technical and two the planning season in Latin America. On the technical enzymes and the lower sales in textiles, can you try to elaborate more, say, precisely, also adding to your comments on the October 10 call to what is really driving most specifically the weakness in the textiles and whether it's something that you see as being more persistent or whether it say more one-off character in the textile enzymes and whether you've also seen a sort of a stabilization since the October 10 announcement or whether its continuing? And the second thing on - the same goes for the planting season and the concerns in Latin America, have you seen any sort of stabilization in your view since October 10? Two weeks ago, do you see this continuing? And should we be more concerned now than we were, say, two weeks ago?

So on the first part on textiles, we have, if you look back to last year textiles has been a little bit volatile, but we have built that into our expectations for the full year guidance. What's happening is that production output seems to be challenged in the textile industry and especially on cotton, and volumes are additionally moving to geographies that lose - use less enzymes, and we also have lower market share. So we are also affected more negatively than the market in general, and that speaks for the majority of the issues that we experience right now is textiles. We have also seen that things can come back rather fast in the textile industries, so it is a little bit unpredictable, but we have not seen any changes since when we gave the last guidance, that’s building. Tina Sejersgård Fanø: And on Latin America and the situation there in BioAg, we have seen some weak start to the planting season there, and that's why we have lowered the expectation to low-to-mid single digit decline. But nothing changed compared to for two weeks ago.

So in conclusion, we don't see any changes compared to October 9. Take the next question, please.

And the next question is now from Jonas Guldborg from Danske Bank. Please go ahead. Your line is open.

Good morning. Can you hear me now? Tina Sejersgård Fanø: Yes.

Good. Couple of questions also on Bioenergy from me. If you take the minus 5% in Q3, could you try and split that between the U.S. market development and then yeast and the impact from growth in Brazil? And then also if you could elaborate a bit on what it is that you see in China, in E10 right now? And then on Food & Beverage, if we - can you say anything about the development in the starch market? How should we look at the dynamics here going into next year? Thank you.

Thank you. We'll let Tina take the Bioenergy questions. Tina, please? Tina Sejersgård Fanø: Yeah. So we record minus five for Q3 in Bioenergy. And you're right, Jonas, that we see improvement from both yeast and Latin America. That's probably a couple of percentage each. On the E10 in China, in January 2020, Hebei will be fully implemented to cover the full province, which is an expansion from the southern cities. And we also see development in two other provinces, Shandong and Jiangxi. We also, on the production side, see a couple of plants, one plant has been built and another one is in the making. So we see some progress on the E10, but it is still early days there.

Yeah. On the starch side, we're in the middle of actually preparing our budgets for next year, and so we're kind of deeply evaluating how we see the underlying market drivers and the different geographies and how we think that, that will project into the situation for next year. So I'm not really ready to guide on that yet, but we're doing the deep dive and we'll be able to talk about that more in January.

And just to get back to the strategy update, then starch processing is not one of the businesses where we expect a lot of growth going forward. We invest in other areas of our business. Next question please.

Next question is from Gunther Zechmann from Bernstein. Please go ahead. Your line is now open.

Hi, good morning. Thanks for taking my questions. The first one is on cash flow and the second one more on the BioAg side of the business. On cash flow, you've done DKK 2.1 billion year-to-date midpoint of the full year guidance. And last time, you had a negative free cash flow fourth quarter was in 2014. So is there anything that we should expect in cash outflows other than quite high Danish taxes? I think that payable in Q4, is anything on the working capital side or other taxes that we should consider? That's the first question. And the second one on BioAg. Thanks, Tina, for the comments on how the season starts. In North America, I think that – in the press release also you highlight BioRise as doing very well. Can you share an acreage number there with us, please?

So Lars, on cash flow please?

Yes. So as you point out, it is very rare that we see a negative cash flow for the quarter. And also, I think, if anything, it is more likely that we would land in the higher end of the interval than the lower end. But that is set, fourth quarter is typically a lower cash flow quarter. And we do have the significant tax payments in Denmark. And then I'll also point out that the severance cost that we have incurred in our profit and loss in the third quarter, a lot of that will be paid out as cash during the fourth quarter when notice periods expire. So therefore, there is an unusual cash payment waiting for us in the fourth quarter, and therefore we maintain our guidance for the full year at DKK 1.9 billion to DKK 2.3 billion.

Thank you, Lars. And Tina, on BioRise in the U.S.? Tina Sejersgård Fanø: And on BioRise and in the U.S., so last year, we have been reporting that we sold into around 16 million acres, and we also said that we were looking at doubling the - up to 20, 25 million acres the coming years. But please remember, Gunther, that Q4 is not done yet, so therefore, we would like to wait with establishing the full number until our January accounts.

Okay. Thanks.

Next question is from Lars Topholm from Carnegie. Please go ahead. Your line is open,

Yes. A couple of questions. In Household Care, rolling out your new technology, can you take me through what will happen in Q4, maybe also which markets you're going to hit in 2020? And then, Lars Green, welcome to you. One question for you. So when Novozymes comments, it's always focused on year-to-date especially in your written statement. I don't think a single person on this call really cares about year-to-date. We care about the quarter. Can you, as new CFO, make sure you comment on the quarter and maybe also give us full quarterly cash flow statements like most other companies do? And then an additional question. On net working capital, what initiatives do you see you can make to optimize net working capital, which has been a headwind for the past six, seven quarters? Thank you.

So on the Freshness platform, we are on track on the rollout, and it's ramping up according to plan both nine months into the year and also the outlook for '19 and the coming years. However, we've also agreed with our partner not to give more detailed guidance on regions and formats before they launch. And I hope you can appreciate that once it's openly public domain, of course, we'll speak more about it and will be very precise on what has happened.

Will any of the major detergent markets in 2020 - what's the status in U.S. for example?

I think the answer is yes, and I'll give you guidance once they come out, and they are launching in their markets.

Perfect. Thank you.

So Lars, thank you for the welcome, looking forward to discuss these matters with you and everybody else going forward. So on your comments about the quarter versus year-to-date, obviously, when we release accounts, we are speaking to what has happened since we last spoke. But I think you also have to recognize that Novozymes is a long-term business, so therefore, we have to find the right balance between speaking to what are the long-term value creation of the company and then the short term sort of financial measures. But I'll take note of your comment and look forward to discuss that with you. On net working capital?

Just one. If you look at the section in the report called income statement, there's not a single reference to the quarter. Everything is year-to-date. Is that really good enough?

So as I said, it will take note of your comments, and you can actually derive the quarterly numbers in there. But as I said, I'll take note of your comment and look forward to discuss that with you as we move forward. So specifically, on net working capital, you ask what initiatives are we going to take. First and foremost, my focus is, together with the rest of the leadership team, to execute on the strategy and return the company to growth on the top line. So that's my first and foremost priority as I come in. Part of that strategy, as you will remember from our release back in June, was also that we will improve our cash flow, and therefore, we will also get to look at net working capital. And I think we will take the typical measures of looking at how we can optimize our inventories, make sure that we balance our commercial terms with our customers and also make sure that we work with other elements of our balance sheet capacity and so on, so that we take care of the cash and increase that to a level of approximately 20% to sales as we said that was our target in the three year horizon.

Thank you very much for answering my questions.

Our next question is from Sebastian Bray from Berenberg. Please go ahead. Your line is now open.

Good morning, everybody. Welcome from my side, Lars. I have a question on the margin profile and in particular the pricing or mix impact in Q3. I take it from the first page of the release for the adjusted EBIT margin for the quarter was, firstly, which by the standards of recent years is quite high, and I'm wondering what other drivers for this? And how sustainable are they? Household Care had a quite strong impact on the mix and what I imagine a number of lower-margin textile enzymes have dropped out. Or is there any other reason or mix effect or your preliminary efforts in raising price that have started to make a difference to the margin? Thank you.

Yes. Thank you for that question. So I think when you adjust the reported operation margin of 23% for the extraordinary severance cost of DKK 250 million or so, you arrive at this underlying margin of approximately 30%. I think that it is on the high side compared to what is sustainable. Because I think, as we announced restructurings were coming, I think there has been an element in the company of holding back, and now we are ready to start investing some of that money again, and we see the activity level pickup. So I don't think that you should expect the underlying margin to be sustainable, plus we are now starting to invest some of that money that we released late August in emerging market commercially and also behind some of our innovation. So I think you should keep that in mind as we move forward. On the gross margin, I think the good news is that we saw growth return in the third quarter. And obviously, growth means leveraged on the margin, so that is supporting us. So I think it is more the growth returning to growth than it is necessarily new mixes of our business that is improving our margin.

All right. Thank you very much.

And next question is from Soren Samsoe from SEB. Please go ahead. Your line is open.

Yes. It was just a question for your ethanol business. I understand that the yeast is still going well, but maybe not as well as you expected. We have seen a lot more players going into yeast the last 18 months, so I know that's an effect of your customers' maybe scaling more, down more in production than the market as a whole. But are you sure that's not a more competitive situation now happening in yeast that can may be affect your business in the next three years? Thank you. Tina Sejersgård Fanø: Well, the next three years, that's a good question, Soren. The reason what we see here in Q3...

Say 12 months, you can say 12 months if you prefer. Tina Sejersgård Fanø: No. Here, in Q3, it is due to that our customers is scaling more back, and it is the volume based, that's what we believe and that's what we experienced in the dialogue with customers. But you are right, yeast is a competitive market, and there is a number of yeast players out there. But for now, we see that our solutions are affected a bit by the pullback and by the pullback of our customers. Overall, it is a matter of securing that you have the most attractive and innovative solutions, which gives most value to the players. And so far, we believe we have that. But for sure, we are not expecting to, you could say, not do anything more. We still have an active development pipeline of yeast because we see that as a future area for where it is we can develop new solutions. And we are very pleased with the new solution, which we just launched in June, which is expressing more than one enzyme, and we believe that there's way more we can do in this field.

And maybe just add, we're grabbing the market share in yeast, and we continue to do so.

Okay. Thank you.

And next question is from Virendra Chauhan from AlphaValue. Please go ahead. Your line is open.

Yes. I have a couple of questions. Firstly, on the recent announcement with respect to U.S. and China that China issued a commitment to buy up to 50 billion of U.S. agricultural products, so - and like so far, do you see any positive impact on your end customers from that announcement? Is there any - on the ground, and do you see a pickup in the activity on the ground?

If I take that question. I don't think we see anything yet. We see a lot of uncertainty. And I just - we're not seeing anything yet, but I think you should expect that a resolution that would enable trade of agricultural commodities between China and the U.S. would favor our business, but we're not seeing any of that yet.

Okay. Sure. And just one more question for you, Peder. So what exactly was your thought process in deciding that now is the right time to leave? Because to me, it looks like Novozymes is in a bit pretty tough period. So like, given that you've been at the firm for fairly long while, wouldn't you get the best person to see them through? And secondly, like, on October 9 in one of the interviews, I also read that there was - you've committed to staying on for two more years at least, but then something changed in that one week to October 15. So what exactly was the thought process behind the deciding that now is the time to leave?

I can try to at least - I think I've consistently said that my current contract runs out when I turn 65. That I've also added that - that could be shorter or it could be longer for that sake. Personally, I've never had a big appetite for a countdown towards that my 65th birthday. So there's been a process running for the last several months where we've been looking at a transition. One can always debate the exact timing of transitions. I think this is a fine one, and I'm excited to move on. And I think the company is, as you point out, not in the best state. I think we are - we're suffering from a lot of incidents on the top line that we have reviewed with you over the last quarters here. On the other hand, I think the implementation of the strategy, including the momentum we see from our innovation is in a very good place. So I guess what I'm saying is there's always been a transition to happen at some point in time, and now it's going to happen at the beginning of next year.

Thank you. That answers my question. So all the best, Peder, wherever you move on. And I think, Lars, welcome, looking forward to talking to you in the next call.

Thank you.

And our next question is from Andrew Stott from UBS. Please go ahead. Your line is now open.

Good morning. I've got a couple of questions actually. First of all, can you provide the same underlying comparisons for the gross margin as you have for the EBIT margin? And then secondly, just coming back to Household Care on the plus 5%. How do you think about that as you go into next year? I get the fact that you've got the Freshness contribution. I also get the fact that Middle East comparisons have dropped out. But is 5% something you sort of feel is sustainable? Or is that actually a tough as you move forward into 2020?

So thank you for that question. First, on gross margin, so we saw a significant decline in the underlying gross margin in the first half of the year largely due to the lower sales because simply there are - fixed costs, so the underlying gross margin was under pressure with the lower volumes and the lower sales in the first half year third quarter. If you adjust for the one-offs or non-recurring cost both this year but also the benefit of deferred income and pharma-related royalties last year, third quarter gross margin in isolation and adjusted for currencies were actually more or less in line with last year. So will the company be returning to growth in the third quarter? We also returned to being able to leverage our footprint and deliver a gross margin in line with history. So I think that's the key message, really, that adjusted for one-offs and currencies the gross margin is back to a comparable level for the quarter.

And on Household Care...

58%, just to confirm.

So a little over that when you also adjust for the currency. So depending on which currency you used last year, this year, but I think the key message is, it’s in line with last year.

So on the Household Care, we expect to see an improvement in the 2020 for two primary reasons. One is the annualization that goes away in '20 on the Middle East, and the other one is continued growth in Freshness. We haven't done the exact numbers yet, so I would not bank on 5%, but we'll definitely see an improvement over 2019.

Thank you very much.

And next question is from Klaus Kehl from Nykredit. Please go ahead. Your line is open.

Yes. Also a question related to the cash flow and, well, maybe not on a quarterly basis, but if I look at the full year cash flow guidance, then it seems a bit low to me. And just to check on that, is there any major changes in provisions, net working capital or anything else? And secondly, could you tell us whether you use factoring in order to, yes, affect your net working capital? That will be my questions.

So thank you. So on the cash flow, you are right that at the end of Q3, we have actually achieved the midpoint of our full year guidance, so assumption there is a flattish fourth quarter. So the unusual thing in the fourth quarter this year is the cash effects of the severance cost that we have incurred in our P&L in the third quarter, and a large part of that sort of are turning into cash as notice periods expire, so that's the unusual thing. There are no other unusual things in the balance sheet, in the net working capital or anything. And no, we don't use factoring to impact the net working capital levels in Novozymes.

Okay. And just to be sure that there's no major changes in provisions or anywhere else in the balance sheet?

No, we provide, like we should at the end of each quarter, we did that at the end of Q3, and of course, we expect to do that also at the end of Q4. Now on cash, it's difficult to provide a lot. Cash is really what cash is, so we'll see what it turns into at the end of the year. But given the unusual cash related to the severance in Q4, we have maintained the full year guidance at the level we also saw a couple of months ago.

Okay. Excellent. Thank you very much.

Thank you, Lars. I understand this is the last question, so we'll close this conference. We look forward to meeting many of you on the road over the next few days. And then, as I said in my outro, I expect to communicate the fourth quarter results at the end of January, so I'll also come around and say hello at the end of January when we have the full year results. Thanks a lot for your interest, and thanks for calling in. Bye.