Novo Nordisk increased operating profit by 21% in 2009
In 2010, operating profit is expected to increase by around 10%
* Sales increased by 12% in Danish kroner and by 11% in local currencies.
o
o Sales of NovoSeven(®) increased by 11% (10% in local currencies).
o Sales of Norditropin(®) increased by 14% (10% in local currencies).
o
o
* Gross margin improved by 1.8 percentage points to 79.6% in 2009, primarily
reflecting continued productivity improvements, price increases in the US
and a positive currency impact of around 0.4 percentage points.
* Reported operating profit increased by 21% to DKK 14,933 million. Adjusted
for the impact from currencies underlying operating profit increased by more
than 15%.
* Net profit increased by 12% to DKK 10,768 million. Earnings per share
(diluted) increased by 15% to DKK 17.82.
* At the Annual General Meeting on 24 March 2010, the Board of Directors will
propose a 25% increase in dividend to DKK 7.50 per share of DKK 1. The Board
of Directors has furthermore decided to initiate a new share repurchase
programme of DKK 7.5 billion during 2010.
* In January 2010, Novo Nordisk received marketing authorisation for
Victoza(®), the once-daily human GLP-1 analogue for the treatment of type 2
diabetes, from both the US Food and Drug Administration (FDA) and the
Japanese Ministry of Health, Labour and Welfare.
* For 2010, sales growth measured in local currencies is expected to be in the
range of 6-10% whereas operating profit measured in local currencies is
expected to increase by around 10%.
Lars Rebien Sørensen, president and CEO, said: "We are satisfied with the solid
business performance in 2009, which is primarily driven by the robust sales
growth for our portfolio of modern insulins. The launch of Victoza(®) in Europe
is very encouraging and we look forward to continuing the global roll-out of
Victoza(®) following the recent approvals in the US and Japan."
Contents
Page
Consolidated financial statement 2009 3
Long-term financial targets 4
Sales development by segment 5
Sales development by region 5
Diabetes care 5
Biopharmaceuticals 6
Development in costs and operating profit 7
Net financials and tax 7
Capital expenditure and free cash flow 8
Outlook 2010 8
Research and development update 10
Equity 11
Corporate governance 13
Sustainability issues update 14
Legal issues update 15
Financial calendar 16
Conference call details 16
Forward-looking statement 17
Management statement 18
Contacts for further information 19
Appendices:
Appendix 1: Quarterly numbers in DKK 20
Appendix 2: Statement of comprehensive income 21
Appendix 3: Balance sheet 22
Appendix 4: Statement of cash flows 23
Appendix 5: Statement of changes in equity 24
Appendix 6: Quarterly numbers in EUR / Supplementary information 25
Appendix 7: Key currencies assumptions / Supplementary information 26
Consolidated financial statement 2009
Today, the Board of Directors and Executive Management approved the audited
Annual Report 2009 of Novo Nordisk A/S. The Board of Directors and Executive
Management also approved this financial statement containing condensed financial
information for 2009. This financial statement is prepared in accordance with
the recognition and measurement requirements of IFRS as issued by the
International Accounting Standards Board (IASB) and endorsed by the EU, and with
additional Danish disclosure requirements for listed companies. The accounting
policies used in this financial statement are consistent with those used in the
annual reports for 2008 and 2009.
Profit and loss 2009 2008 2007 2006 2005 % change 2009 vs
2008
(Amounts below in DKK
million)
Sales 51,078 45,553 41,831 38,743 33,760 12%
Gross profit 40,640 35,444 32,038 29,158 24,583 15%
Gross margin 79.6% 77.8% 76.6% 75.3% 72.8%
Sales and distribution 15,420 12,866 12,371 11,608 9,691 20%
costs
Percent of sales 30.2% 28.2% 29.6% 30.0% 28.7%
Research and development 7,864 7,856 8,538 6,316 5,085 0%
costs
- hereof costs related to - (325) (1,325) - -
AERx(®) (1))
Percent of sales 15.4% 17.2% 20.4% 16.3% 15.1%
Percent of sales (excl - 16.5% 17.2% - -
AERx(®)) (1))
Administrative expenses 2,764 2,635 2,508 2,387 2,122 5%
Percent of sales 5.4% 5.8% 6.0% 6.2% 6.3%
Licence fees and other 341 286 321 272 403 19%
operating income
Operating profit 14,933 12,373 8,942 9,119 8,088 21%
Operating margin 29.2% 27.2% 21.4% 23.5% 24.0%
Operating profit (excl - 12,698 10,267 - -
AERx(®))(1))
Operating margin (excl - 27.9% 24.5% - -
AERx(®)) (1))
Net financials (945) 322 2,029 45 146 (393%)
Profit before income 13,988 12,695 10,971 9,164 8,234 10%
taxes
Income taxes 3,220 3,050 2,449 2,712 2,370 6%
Income tax rate 23.0% 24.0% 22.3% 29.6% 28.8%
Net profit 10,768 9,645 8,522 6,452 5,864 12%
Net profit margin 21.1% 21.2% 20.4% 16.7% 17.4%
( )
(1)) Excluding costs related to the discontinuation of all pulmonary diabetes
projects.
Consolidated financial statement 2009 - continued
2009 2008 2007 2006 2005 % change
2009 vs
Other key numbers
2008
(Amounts below in DKK million
except earnings per
share, dividend per share and
number of employees)
Depreciation, amortisation, etc 2,551 2,442 3,007 2,142 1,930 4%
Capital expenditure 2,631 1,754 2,268 2,787 3,665 50%
Free cash flow 12,332 11,015 9,012 4,707 4,833 12%
Total assets 54,742 50,603 47,731 44,692 41,960 8%
Equity 35,734 32,979 32,182 30,122 27,634 8%
Equity ratio 65.3% 65.2% 67.4% 67.4% 65.9%
17.82 15.54 13.39 10.00 8.92 15%
Dividend per share (in DKK)(1)) 7.50 6.00 4.50 3.50 3.00 25%
Payout ratio (2)) 40.9% 37.8% 32.8% 34.4% 33.2% 8%
Payout ratio (adjusted)( 3)) - - 34.9% - -
Average number of full-time 27,985 26,069 24,344 22,590 21,146 7%
employees
(1)) Proposed dividend for the financial year 2009.
(2)) Dividend for the year as a percentage of net profit.
(3)) Dividend for the year as a percentage of net profit adjusted for impact of
Dako and AERx(®) discontinuation.
Long-term financial targets
Performance against long-term 2009 2008 2007 2006 2005 Long-term
financial targets target ratio
20.7% 38.4% (1.9%) 12.7% 15.9% 15%
AERx(®)) (1)) - 23.7% 12.6% - -
29.2% 27.2% 21.4% 23.5% 24.0% 30%
AERx(®)) (1)) - 27.9% 24.5% - -
47.3% 37.4% 27.2% 25.8% 24.7% 50%
114.5% 114.2% 105.7% 73.0% 82.4%
111.5% 97.6% 87.0% 80.2% 82.4% 80%
( )
(1)) Excluding costs related to the discontinuation of all pulmonary diabetes
projects.
Sales development by segment
Sales increased by 12% in Danish kroner and by 11% measured in local currencies.
Growth was realised within both diabetes care and biopharmaceuticals; the
primary growth contribution originated from the modern insulins and
NovoSeven(®). The sales growth was in line with the latest guidance of 'at the
level of 10%' sales growth in local currencies and 'around 1.5 percentage points
higher' as reported in Danish kroner.
Growth Growth Share of
Sales
2009 as in local growth
DKK reported currencies in local
million currencies
The diabetes care segment
Modern insulins 21,471 24% 23% 82%
- NovoRapid(®) 9,749 25% 22% 36%
- NovoMix(®) 6,499 15% 15% 18%
- Levemir(®) 5,223 36% 35% 28%
Human insulins 11,315 (4%) (5%) (13%)
Protein-related products 2,064 12% 10% 4%
Oral antidiabetic products 2,652 11% 9% 4%
Diabetes care - total 37,502 12% 11% 77%
The biopharmaceuticals segment
NovoSeven(®) 7,072 11% 10% 13%
Norditropin(®) 4,401 14% 10% 8%
Other products 2,103 9% 6% 2%
Biopharmaceuticals - total 13,576 11% 9% 23%
Total sales 51,078 12% 11% 100%
Sales development by region
In 2009, sales growth was realised in all regions. North America was the main
contributor with 48% share of the growth measured in local currencies.
International Operations and Europe contributed 32% and 19%, respectively, of
the total sales growth - also measured in local currencies.
Diabetes care
Sales of diabetes care products increased by 12% measured in Danish kroner to
DKK 37,502 million and by 11% in local currencies compared to 2008.
Modern insulins, human insulins and protein-related products
Sales of modern insulins, human insulins and protein-related products increased
by 13% in Danish kroner to DKK 34,850 million and by 11% measured in local
currencies, driven by North America and International Operations. Novo Nordisk
continues to be the global leader with 51% of the total insulin market and 45%
of the modern insulin market, both measured by volume.
The portfolio of modern insulins is the main contributor to growth, and sales
increased by 24% in Danish kroner to DKK 21,471 million and by 23% in local
currencies. All regions realised solid growth rates, with North America
accounting for 51% of the growth followed by Europe and International
Operations. Sales of modern insulins now constitute 65% of Novo Nordisk's sales
of insulin in Danish kroner.
North America
Sales in North America increased by 25% in Danish kroner and by 20% in local
currencies in 2009, reflecting a solid penetration of the modern insulins
Levemir(®),( )NovoLog(®) and NovoLog(®) Mix 70/30. Novo Nordisk (®)
Europe
54% of the total insulin market and 51% of the modern insulin market, both
measured by volume, and is capturing the main share of growth in the modern
insulin market. The device penetration in Europe remains high with more than
95% of Novo devices, primarily NovoPen(®) and FlexPen(®).
Victoza(®), the first once-daily human GLP-1 analogue, has been launched in
Germany, the United Kingdom, Denmark, Ireland, Norway, Switzerland, the
Netherlands, Greece and Sweden. Launch activities are progressing well in these
markets and feedback from healthcare professionals and patients is encouraging.
In Germany, the GLP-1 class constitutes more than 3% of the total diabetes care
market and Victoza(®) has more than 52% of the GLP-1 market, both measured in
weekly value market shares.
International Operations
Sales within International Operations increased by 17% in Danish kroner and by
19% in local currencies. The main contributor to growth in 2009 was sales of
modern insulins, primarily in China and Turkey. Furthermore, sales of human
insulin continue to add to overall growth in the region, primarily driven by
China. The device penetration in China is high with more than 90% of Novo
Nordisk's insulin volume sold in devices, primarily NovoPen(®).
Japan & Oceania
Sales in Japan & Oceania increased by 12% measured in Danish kroner and
decreased by 1% in local currencies. The sales development reflects sales growth
for all three modern insulins, NovoRapid(®), Levemir(®) and NovoRapid Mix(®)
30, countered by pressure on the overall Novo Nordisk market share due to
intense competition. Novo Nordisk has 67% of the total insulin market in Japan
and 59% of the modern insulin market, both measured by volume. The device
penetration in Japan remains high with more than 95% of Novo Nordisk's insulin
volume being sold in devices, primarily NovoPen(®) and FlexPen(®).
Oral antidiabetic products (NovoNorm(®)/Prandin(®))
In 2009, sales of oral antidiabetic products increased by 11% in Danish kroner
to DKK 2,652 million and by 9% in local currencies compared to 2008.
Biopharmaceuticals
In 2009, sales of biopharmaceutical products increased by 11% measured in Danish
kroner to DKK 13,576 million and by 9% measured in local currencies compared to
2008.
NovoSeven(®)
Sales of NovoSeven(®) increased by 11% in Danish kroner to DKK 7,072 million and
by 10% in local currencies. Sales growth for NovoSeven(®) was primarily realised
in International Operations and Europe. The sales growth for NovoSeven(®) mainly
reflected increased sales from treatment of spontaneous bleeding episodes for
congenital inhibitor patients, which remains the largest therapeutic area of use
for NovoSeven(®).
Norditropin(®)
Sales of Norditropin(®) (ie growth hormone in a liquid, ready-to-use
formulation) increased by 14% measured in Danish kroner to DKK 4,401 million and
by 10% measured in local currencies compared to 2008. North America and Europe
were the main contributors to growth measured in local currencies. Novo Nordisk
maintained its position as the second-largest company in the global growth
hormone market with 24% market share measured by volume.
Other products
Sales of other products within biopharmaceuticals, which predominantly consist
of hormone replacement therapy-related products, increased by 9% in Danish
kroner to DKK 2,103 million and by 6% in local currencies. This development
primarily reflects continued sales progress for Vagifem(®), a topical oestrogen
product, in the US.
Development in costs and operating profit
The gross margin increased to 79.6% from 77.8% in 2008. This improvement
primarily reflects improved production efficiency, higher average selling prices
in the US and a positive currency effect. The improved production efficiency
primarily reflects higher yields in diabetes bulk production and increased
utilisation of insulin filling and packaging lines. The gross margin was
positively impacted by around 0.4 percentage points as a result of a positive
currency development, primarily the higher value of the US dollar and the
Japanese yen versus the Danish krone compared to 2008.
In 2009, total non-production-related operating costs increased by 12% to DKK
26,048 million compared to last year. Around 1.5 percentage points of the
increase in non-production-related operating costs reflect the higher value of
key currencies versus the Danish krone in 2009 compared to 2008. The underlying
development in non-production-related operating costs relates to the expanded
sales force in especially the US, the UK, Germany, Japan and China, countered by
a stable level for research and development costs. The development in research
and development costs primarily reflects non-recurring costs in 2008 related to
the discontinuation of all pulmonary diabetes projects and of the growth hormone
therapy project for patients with low serum albumin in dialysis (LSAD) countered
by costs in 2009 related to late-stage development of the new insulin Degludec
and DegludecPlus (formerly known as SIBA and SIAC) in the second half of 2009.
Operating profit in 2009 increased by 21% to DKK 14,933 million compared to
2008 and is thus slightly higher than the latest guidance for growth in reported
operating profit of around 18%.
Net financials and tax
Net financials showed a net expense of DKK 945 million in 2009 compared to a net
income of DKK 322 million in 2008.
Included in net financials is the result from associated companies with an
expense of DKK 55 million, primarily related to Novo Nordisk's share of losses
in ZymoGenetics, Inc. In 2008, the result from associated companies was an
expense of DKK 124 million.
For 2009, the foreign exchange result was an expense of DKK 751 million compared
to an income of DKK 141 million in 2008. This development reflects losses on
foreign exchange hedging of especially US dollars and Japanese yen, due to the
appreciation of these currencies versus Danish kroner in 2009 compared to the
exchange rate level prevailing in 2008.
The realised results for net financial expenses of DKK 945 million in 2009 were
lower than the latest guidance of a total net financial expense of 'around DKK
750 million´. The lower result for net financials is primarily explained by
losses on foreign exchange hedging of especially US dollars and Japanese yen due
to the appreciation of these currencies versus Danish kroner in the fourth
quarter of 2009.
The realised effective tax rate for 2009 was 23% which is in line with the
latest guidance of a tax rate of 'approximately 23%' for the full year of 2009.
Capital expenditure and free cash flow
Net capital expenditure for property, plant and equipment for 2009 was realised
at DKK 2.6 billion compared to DKK 1.8 billion in 2008. The main investment
projects in 2009 were the insulin filling plant in Tianjin, China, and new
device manufacturing lines in Denmark. The realised capital expenditure was in
line with previously communicated expectations of 'around DKK 2.5 billion'.
Free cash flow for 2009 was realised at DKK 12.3 billion compared to DKK 11.0
billion in 2008. The higher cash flow is driven by higher net profit and lower
income taxes paid, countered by increased capital expenditure during 2009. The
realised cash flow was above the latest guidance of 'at least DKK 11 billion'
primarily driven by improved operating performance and temporary extension of
the credit terms for employee withholding taxes in Denmark.
Outlook 2010
The current expectations for 2010 are summarised in the table below:
+-------------------------------------+--------------------------------------+
|Expectations are as reported, if not | Current expectations |
| | |
|otherwise stated | 2 February 2010 |
+-------------------------------------+--------------------------------------+
|Sales growth | |
| | 6-10% |
| - in local currencies |At a similar level as local currencies|
| | |
| - as reported | |
+-------------------------------------+--------------------------------------+
|Operating profit growth | |
| | Around 10% |
| - in local currencies |At a similar level as local currencies|
| | |
| - as reported | |
+-------------------------------------+--------------------------------------+
|Net financial expense | Around DKK 100 million |
+-------------------------------------+--------------------------------------+
|Effective tax rate | Approximately 23% |
+-------------------------------------+--------------------------------------+
|Capital expenditure | Around DKK 3.5 billion |
+-------------------------------------+--------------------------------------+
|Depreciation, amortisation and | Around DKK 2.7 billion |
| | |
|impairment losses | |
+-------------------------------------+--------------------------------------+
|Free cash flow | Around DKK 12 billion |
| | |
| | |
+-------------------------------------+--------------------------------------+
Novo Nordisk expects sales growth in 2010 of 6-10% measured in local currencies.
This is based on expectations of continued market penetration for Novo Nordisk's
key strategic products within diabetes care, including continued global roll-out
of Victoza(®), and biopharmaceuticals as well as expectations of continued
intense competition, potential generic competition to NovoNorm(®)/Prandin(®) and
an adoption of a healthcare reform in the US. Given the current level of
exchange rates versus Danish kroner, the reported sales growth is now expected
to be at a level similar to the growth rate measured in local currencies.
For 2010, growth in operating profit is expected to be around 10% measured in
local currencies. The forecast reflects further improvement of the gross margin,
increased spending for R&D activities, primarily related to insulin Degludec and
DegludecPlus, and higher licence fees and other operating income. Given the
current level of exchange rates versus Danish kroner, the reported operating
profit growth is now expected to be at a level similar to the growth rate
measured in local currencies. Given the development in key currencies in 2009, a
higher share of the 2010 growth for reported sales and operating profit is
expected to be realised in the second half of 2010.
For 2010, Novo Nordisk expects a net financial expense of around DKK 100
million. The current expectation primarily reflects Novo Nordisk share of losses
in associated companies.
The effective tax rate for 2010 is expected to be maintained at around 23%.
Capital expenditure is expected to be around DKK 3.5 billion in 2010, primarily
related to the new insulin formulation and filling plant in China and new device
capacity in Denmark. Expectations for depreciations, amortisation and impairment
losses are around DKK 2.7 billion, and free cash flow is expected to be around
DKK 12 billion.
All of the above expectations are based on the assumption that the global
economic environment will not significantly change business conditions for Novo
Nordisk during 2010 and that currency exchange rates, especially the US dollar,
remain at the current level versus the Danish krone during 2010 (see appendix
7). Novo Nordisk has hedged expected net cash flows in a number of invoicing
currencies and, all other things being equal, movements in key invoicing
currencies will impact Novo Nordisk's operating profit as outlined in the table
below.
Key invoicing Annual impact on Novo Nordisk's Hedging period
currencies operating profit of a 5% (months)
movement in currency
USD DKK 580 million 17
JPY DKK 150 million 15
CNY DKK 100 million 17*
GBP DKK 80 million 13
CAD DKK 40 million 9
*USD used as proxy when hedging Novo Nordisk's CNY currency exposure
The financial impact from foreign exchange hedging is included in 'Net
financials'.
Research and development update
Diabetes care
Significant regulatory progress has been made for the first once-daily human
Glucagon-Like Peptide-1 (GLP-1) analogue Victoza(®), previously known under the
INN name liraglutide. As announced on 20 January and 26 January, respectively,
Victoza(®) is now also approved in Japan and the US. With these recent
approvals, and the marketing authorisation granted by the European Commission on
30 June 2009, Victoza(®) has now been approved in all of the triad markets for
diabetes treatment.
In the US, Victoza(®) is indicated as an adjunct to diet and exercise to improve
glycaemic control in adults with type 2 diabetes. The US prescribing information
includes a boxed warning based on the thyroid c-cell tumours found in rodent
studies and Victoza® is contraindicated in patients with a personal or family
history of medullary thyroid carcinoma, and in patients with multiple endocrine
neoplasia syndrome type 2. Novo Nordisk expects to launch Victoza(®) within
weeks.
In Japan, Victoza(®) is the first GLP-1 analogue to be approved by the Ministry
of Health, Labour and Welfare and the awarded indication covers monotherapy and
combination therapy with sulfonylurea in type 2 diabetes. Novo Nordisk expects
to launch Victoza(®) in Japan in the first half of 2010, upon completion of
price negotiations.
Results from clinical trial extensions of LEAD(TM) 3, comparing Victoza(®) to a
sulphonylurea, and the phase 3b trial comparing Victoza(®) to a DPPIV inhibitor,
confirm both the superiority and sustainability of HbA(1c) reduction and weight
loss that was seen in the main study periods with Victoza(®). The study
extensions have now documented treatment effect for periods of 3 years and 1
year in the two trials, respectively.
The phase 3 programmes, BEGIN((TM)) and BOOST((TM)), for the two new generation
insulins, Degludec and DegludecPlus, respectively, continue to progress
according to plan. The BEGIN((TM)) programme includes a trial comparing Degludec
with sitagliptin in insulin naïve type 2 diabetes patients. The BOOST((TM))
programme includes two trials comparing once-daily injection of DegludecPlus
with once-daily injection of insulin glargine in patients with type 2 diabetes,
who are insulin naïve or already treated with insulin, respectively. Further
trials are expected to be initiated during the first half of 2010.
Recently, Novo Nordisk has initiated a phase 1 study investigating the benefits
of a new combination product of insulin degludec and Victoza® for people with
type 2 diabetes.
To improve the treatment outcomes and convenience in patients affected by
diabetes, the development of tailor-made proteins for oral administration has
been a long-standing Novo Nordisk aspiration. The biggest challenge in
developing proteins for oral delivery is to achieve sufficient uptake of the
drug into the body. Based on Novo Nordisk insight into the design of stable
insulin and GLP-1 analogues, as well as formulation partnerships with Emisphere
Technologies, Inc. and Merrion Pharmaceuticals plc, Novo Nordisk strives to
overcome the hurdles related to degradation in the gastrointestinal tract and
subsequent lack of absorption into the circulation.
The first phase 1 clinical trial with a Novo Nordisk insulin analogue designed
for oral administration has been initiated with the aim of investigating the
safety, tolerability, pharmacokinetics and pharmacodynamics in healthy
volunteers and people with type 1 and type 2 diabetes. The trial is planned to
enrol about 80 people.
Within oral GLP-1, Novo Nordisk has initiated a phase 1 clinical trial with a
long-acting GLP-1 analogue. The objective of the trial is to investigate the
safety, tolerability and bioavailability in about 155 healthy volunteers.
Novo Nordisk has initiated a phase 1 trial with NN9161, to be developed for
treatment of obesity. The trial will investigate safety, tolerability,
pharmacokinetics and potential signs of efficacy in approximately 140 obese, but
otherwise healthy volunteers.
Biopharmaceuticals
Both the US and European regulatory agencies have approved Vagifem(®) 10 mcg for
local treatment of topical atrophy. Vagifem(®) 10 mcg represents a reduced
strength of the already approved vaginal oestrogen product, Vagifem(®) 25 mcg.
The introduction of a lower dose of Vagifem(®) is in line with the
recommendations from the International Menopause Society (IMS), the North
American Menopause Society (NAMS) and American College of Obstetricians &
Gynecologists (ACOG) and Novo Nordisk expects to launch Vagifem(®) 10 mcg in the
first quarter of 2010 in the US, and in the third quarter of 2010 in Europe.
In June 2009, the EU label for NovoSeven(®) RT was updated to reflect that
safety and efficacy has not been established outside the approved indications
for the drug. On 15 January 2010, the U.S. Food and Drug Administration (FDA)
approved an update to the NovoSeven(®) RT label. A boxed warning was added to
the NovoSeven(®) RT label, stating that serious arterial and venous thrombotic
and thromboembolic events are associated with its use outside of licensed
indications. This label change was initiated by Novo Nordisk as part of routine
periodic safety updates.
To strengthen its activities within inflammation, Novo Nordisk has inlicensed a
human anti-IL-21 monoclonal antibody (anti-IL-21 mAb) developed by ZymoGenetics,
as well as broad intellectual property rights covering anti-IL-21 mAb and the
development of other IL-21 antibodies. The anti-IL-21 mAb is a pre-IND candidate
for the treatment of autoimmune and inflammatory diseases, with which Novo
Nordisk expects to initiate a phase 1 trial in 2010.
Equity
Total equity was DKK 35,734 million at the end of 2009, equivalent to 65% of
total assets, unchanged from the end of 2008. Please refer to appendix 5 for
further elaboration of changes in equity during 2009.
Proposed dividend and share repurchase programme
At the Annual General Meeting on 24 March 2010, the Board of Directors will
propose a 25% increase in dividend to DKK 7.50 per share of DKK 1, corresponding
to a pay-out ratio of 40.9%, compared to 37.8% for the financial year 2008. No
dividend will be paid on the company's holding of treasury B shares.
During 2009, Novo Nordisk repurchased 21,661,949 B shares at an average price of
DKK 301 per share, equivalent to a cash value of DKK 6.5 billion. Novo Nordisk
thereby concluded the previously announced share repurchase programme.
The Board of Directors has approved a new DKK 7.5 billion share repurchase
programme to be executed during 2010. Novo Nordisk will initiate its share
repurchase programme in accordance with the provisions of the European
Commission's regulation no. 2273/2003 of 22 December 2003 (The Safe Harbour
Regulation). For that purpose Novo Nordisk has appointed J. P. Morgan Securities
Ltd. as lead manager to execute a part of its share repurchase programme
independently and without influence from Novo Nordisk. The purpose of the
programme is to reduce the company's share capital. Under the agreement, J. P.
Morgan Securities Ltd. will repurchase shares on behalf of Novo Nordisk for an
amount of up to DKK 2 billion during the trading period starting today and
ending on 26 April 2010. A maximum of 231,787 shares can be bought during one
single trading day, equal to 20% of the average daily trading volume of Novo
Nordisk B shares on NASDAQ OMX Copenhagen during the month of January 2010, and
a maximum of 13,211,858 shares in total can be bought during the trading period.
At least once every seven trading days, Novo Nordisk will issue an announcement
in respect of the transactions made under the repurchase programme.
Share savings programme
In the autumn of 2009, the employees in the Danish part of the organisation were
offered participation in a share savings programme. An annual maximum of DKK
22,800 per employee can be saved out of gross salary in 2010. The savings will
be converted into Novo Nordisk B shares at the market price on 7 December 2010
contingent on continued employment. The shares will be restricted until January
2018.
Approximately 8,400 employees elected to participate in the programme,
corresponding to 64% of the eligible employees. The total invested amount by the
employees is expected to be approximately DKK 160 million. The programme is cost
neutral to the company.
Holding of treasury shares and reduction of share capital
As per 2 February 2010, Novo Nordisk A/S and its wholly-owned affiliates owned
32,137,945 of its own B shares, corresponding to 5.2% of the total share
capital.
In order to maintain capital structure flexibility, the Board of Directors at
the Annual General Meeting in 2010 will propose a reduction in the B share
capital from DKK 512,512,800 to DKK 492,512,800 by cancelling 20,000,000 B
shares of DKK 1 from the company's own holdings of B shares at a nominal value
of DKK 20,000,000, equivalent to 3.2% of the total share capital. After
implementation of the share capital reduction, the company's share capital will
amount to DKK 600,000,000 divided into an A share capital of DKK 107,487,200 and
a B share capital of DKK 492,512,800.
Cancellation of listing and trading on the London Stock Exchange
Novo Nordisk has decided to apply to the UK Listing Authority to cancel the
listing of its B shares and to request that trading in those shares on the
London Stock Exchange be cancelled.
Novo Nordisk believes that it would be in the best interests of the company to
terminate its listing on the Official List of the UK Listing Authority and
cancel the trading of the B shares on the London Stock Exchange as trading
levels of the shares have been very low. Investors have historically shown a
preference for trading the B shares on NASDAQ OMX Copenhagen.
The company will retain the listing of its B shares on NASDAQ OMX Copenhagen and
the listing of its ADRs on the New York Stock Exchange. The cancellation of the
listing from the Official List of the UK Listing Authority and of trading on the
London Stock Exchange is therefore not expected to adversely affect shareholders
or investors.
A notice period of not less than 20 business days prior to de-listing and
cancellation will commence today, 2 February 2010. It is intended that
de-listing and cancellation will take effect at or shortly after 8.00 am (London
time) on 2 March 2010.
Corporate governance
Remuneration policy for executives
Novo Nordisk's existing remuneration policy aims to attract, retain and motivate
members of the Board of Directors and Executive Management of Novo Nordisk.
Remuneration levels are designed to be competitive and to align the interest of
the board members and executives with those of the shareholders.
Long-term share-based incentive programme for senior management
As from 2004, members of Novo Nordisk's Executive Management (currently 5) and
other members of the Senior Management Board (currently 23) have participated in
a performance-based incentive programme where a proportion of the calculated
shareholder value creation has been allocated to a joint pool for the
participants. For members of Executive Management and other members of the
Senior Management Board, the joint pool operates with a yearly maximum
allocation per participant equal to eight months' fixed base salary plus pension
contribution. Once the joint pool has been approved by the Board of Directors,
the total cash amount is converted into Novo Nordisk A/S B shares at market
price. The market price is calculated as the average trading price for Novo
Nordisk B shares on NASDAQ OMX Copenhagen in the open trading window following
the release of full-year financial results. The shares in the joint pool are
locked up for a three-year period before they are transferred to the
participants. In the lock-up period, the Board may remove shares from the joint
pool in the event of lower than planned value creation in subsequent years.
For 2006, 261,500 shares were allocated to the joint pool and the market value
of the scheme, corresponding to DKK 46 million, was expensed in 2006. The number
of shares in the 2006 joint pool has not been reduced by the Board of Directors
as the financial performance in the subsequent years (2007-2009) reached
specified threshold levels. Hence, the original number of shares allocated to
the joint pool will, according to the principles of the scheme, be transferred
to 24 current and former members of senior management immediately after the
announcement of the 2009 full-year financial results on 2 February 2010.
For 2009 and based on an assessment of the economic value generated in 2009, as
well as the performance of the R&D portfolio and key sustainability projects,
the Board of Directors on 1 February 2010 approved the establishment of a joint
pool for the financial year of 2009 by allocating a total of 177,066 Novo
Nordisk B shares, corresponding to a cash value of DKK 54 million. This
allocation amounts to 7 months of fixed base salary on average per participant.
This amount was expensed in the 2009 accounts.
As the long-term share-based incentive programme is evaluated by the Board of
Directors to have worked successfully in 2009, it is planned to continue in
2010 with an unchanged structure.
Long-term share-based incentive programme for corporate vice presidents and vice
presidents
As from 2007, a number of key employees below top-level management also
participate in a share-based programme with similar performance criteria as the
programme for the members of Executive Management and other members of the
Senior Management Board. The share-based incentive programme for key employees
will, as is the case for the programme for Executive Management and other
members of the Senior Management Board, be based on an annual calculation of
shareholder value creation compared to the planned performance for the year. The
pool will operate with a maximum contribution per participant equal to four
months' fixed base salary. The shares in the pool are also locked up for a
three-year period before they potentially may be transferred to the
participants.
Based on an assessment of the economic value generated in 2009 as well as the
performance of the R&D portfolio and key sustainability projects, the Board of
Directors on 1 February 2010 approved the establishment of a pool for 2009 by
allocating a total of 605,218 Novo Nordisk B shares, corresponding to a cash
value of DKK 186 million. This allocation amounts to 3.5 months of fixed base
salary on average per participant. The number of participants for 2009 is
approximately 675. The cash value of the allocation will be amortised over four
years.
Compliance with Sarbanes-Oxley requirements
In 2009, Novo Nordisk was, as was the case in 2008, compliant with the US
Sarbanes-Oxley Act section 404 that requires detailed documentation of how
financial reporting processes, systems and controls are designed and operating.
Management's conclusion and the external auditor's certification of the 2009
compliance are included in the Form 20-F, which Novo Nordisk as a listed company
on the New York Stock Exchange is required to file with the US Securities and
Exchange Commission (SEC). The Form 20-F for 2009 is expected to be filed in
February 2010.
Sustainability issues update
Diabetes Leadership Forum in China
In October at the Diabetes Leadership Forum 2009 China, sponsored by Novo
Nordisk, around 650 government representatives, doctors, nurses, international
organisations, patient associations and key opinion leaders met in Beijing to
discuss the rapidly growing burden of diabetes in China. A conservative estimate
is that 40 million Chinese have diabetes, and this number is expected to double
by 2025. Around 7% of the total healthcare budget in China is spent on the
treatment of diabetes and its complications.
The Forum was jointly hosted by the Chinese Ministry of Health and the World
Diabetes Foundation, organised by the Chinese Diabetes Society and the Chinese
Centre for Disease Control and Prevention, with the support of the International
Diabetes Federation.
Novo Nordisk has been present in China for 15 years, providing insulin products
as well as education programmes for physicians and patients. Novo Nordisk has
delivered training for more than 200,000 physicians and nurses, including
programmes delivered by the Steno Diabetes Center funded through the Novo
Nordisk Foundation. Today, China is Novo Nordisk's fourth-largest market in
terms of sales.
Free insulin and diabetes care to children in Bangladesh
In November 2009, the programme Changing Diabetes(®) in Children was expanded to
include Bangladesh through a five-year commitment to a joint initiative between
Novo Nordisk and the Diabetic Association of Bangladesh, supported by the World
Diabetes Foundation.
The initiative includes the setting-up of three dedicated paediatric diabetes
clinics for diagnosis and treatment of children with type 1 diabetes. The
clinics will also provide patient education and registration, training for
healthcare professionals and diabetes care supplies to 700 children.
The programme, which is part of Novo Nordisk's access to diabetes care strategy,
offers diabetes care, including free insulin, for children with type 1 diabetes
in the world's poorest countries. So far it reaches out to six countries and
relies on a sustainable cooperation with local partners, including governments
and diabetes associations, to build local capacity for diagnosis and treatment
of type 1 diabetes in children.
Legal issues update
As of 1 February 2010, Novo Nordisk Inc., along with a majority of the hormone
therapy product manufacturers in the US, is a defendant in product liability
lawsuits related to hormone therapy products. These lawsuits currently involve a
total of 52 individuals who allege use of a Novo Nordisk hormone therapy
product. These products (Activella(®) and Vagifem(®)) have been sold and
marketed in the US since 2000. Until July 2003, the products were sold and
marketed exclusively in the US by Pharmacia & Upjohn Company (now Pfizer Inc.).
Furthermore, 63 individuals currently allege, in relation to similar lawsuits
against Pfizer Inc., that they have also used a Novo Nordisk hormone therapy
product. Currently, Novo Nordisk does not have any trials scheduled in 2010.
Novo Nordisk does not expect the pending claims to have a material impact on
Novo Nordisk's financial position.
In 2002, Sanofi-Aventis filed an opposition against a European NovoRapid(®)
formulation patent covering the combination of ingredients used in the aqueous
formulation of NovoRapid(®). Initially the patent was revoked in 2006 by the
Opposition Division of the European Patent Office. In December 2009, the patent
for the NovoRapid(®) formulation was re-instated by the Board of Appeal of the
European Patent Office. The implications are that the combination of ingredients
used in the NovoRapid(®) formulation is covered by patent in Europe until 2017.
No further appeal is possible. A similar patent is also in force in a number of
countries outside the EU, including the US, Canada, Brazil, Russia, China,
India, Japan and Australia, with patent term until 2017.
Novo Nordisk is involved in an ongoing patent infringement dispute with Caraco
Pharmaceuticals Laboratories, Ltd (Caraco) regarding Caraco's application to
market a generic version of Prandin(®) in the US. The parties await a decision
from the Court of Appeals for the Federal Circuit (CAFC) on Novo Nordisk Use
Code (describing the therapeutic use for Prandin(®)). If the CAFC decision is
in favour of Novo Nordisk, the validity trial regarding Novo Nordisk's U.S.
Patent No. 6,677,358 ('358 patent), covering the Prandin(®)/metformin
combination is expected to proceed in the second quarter of 2010. If the '358
patent is upheld during the validity trial, then Caraco will not be able to
launch a generic version of Prandin(®) without infringing Novo Nordisk's
intellectual property rights. If the CAFC decision is not in Novo Nordisk's
favour, then Novo Nordisk must change its Use Code and, as a result, Caraco will
be permitted to change its label such that it does not infringe Novo Nordisk's
intellectual property rights.
In January 2010, the Inspector General of the US Department of Defense issued a
subpoena directed to Novo Nordisk to provide documents relating to NovoSeven(®).
Novo Nordisk is cooperating with the Office of the Inspector General and the US
Attorney's Office for the District of Maryland in responding to the subpoena,
but cannot, at this point in time, determine or predict the outcome of the
investigation or when the next update related to this case will be available
given the unpredictable nature of these investigations.
Financial calendar
2 February 2010 Financial statement for 2009
4 February 2010 PDF version of the Annual Report 2009 available on
novonordisk.com <
http://www.novonordisk.com/>
18 February 2010 Printed version of the Annual Report 2009
24 March 2010 Annual General Meeting 2010
27 April 2010 Financial statement for the
first three months of 2010
5 August 2010 Financial statement for the first six months of
2010
27 October 2010 Financial statement for the first nine months of
2010
2 February 2011 Financial statement for 2010
Conference call details
At 1.00 pm CET today, corresponding to 7.00 am EST, a conference call will be
held. Investors will be able to listen in via a link on novonordisk.com
<
http://www.novonordisk.com/>, which can be found under 'Investors - Download
centre'. Presentation material for the conference call will be made available on
the same page approximately one hour before.
Forward-looking statements
Novo Nordisk's reports filed with or furnished to the US Securities and Exchange
Commission (SEC), including this document as well as the company's Annual Report
2009 and Form 20-F, both expected to be filed with the SEC in February 2010, and
written information released, or oral statements made, to the public in the
future by or on behalf of Novo Nordisk, may contain forward-looking statements.
Words such as 'believe', 'expect', 'may', 'will', 'plan', 'strategy',
'prospect', 'foresee', 'estimate', 'project', 'anticipate', 'can', 'intend',
'target' and other words and terms of similar meaning in connection with any
discussion of future operating or financial performance identify forward-looking
statements. Examples of such forward-looking statements include, but are not
limited to:
- statements of plans, objectives or goals for future operations,
including those related to Novo Nordisk's products, product research, product
development, product introductions and product approvals as well as cooperations
in relation thereto
- statements containing projections of or targets for revenues, income
(or loss), earnings per share, capital expenditures, dividends, capital
structure or other net financials
- statements of future economic performance, future actions and outcome
of contingencies such as legal proceedings
- statements of the assumptions underlying or relating to such
statements.
In this document, examples of forward-looking statements can be found under the
headings 'Outlook 2010', 'Research and development update', 'Equity' and 'Legal
issues update'.
These statements are based on current plans, estimates and projections. By their
very nature, forward-looking statements involve inherent risks and
uncertainties, both general and specific. Novo Nordisk cautions that a number of
important factors, including those described in this document, could cause
actual results to differ materially from those contemplated in any
forward-looking statements.
Factors that may affect future results include, but are not limited to, global
as well as local political and economic conditions, including interest rate and
currency exchange rate fluctuations, delay or failure of projects related to
research and/or development, unplanned loss of patents, interruptions of
supplies and production, product recall, unexpected contract breaches or
terminations, government-mandated or market-driven price decreases for Novo
Nordisk's products, introduction of competing products, reliance on information
technology, Novo Nordisk's ability to successfully market current and new
products, exposure to product liability and legal proceedings and
investigations, changes in governmental laws and related interpretation thereof,
including on reimbursement, intellectual property protection and regulatory
controls on testing, approval, manufacturing and marketing, perceived or actual
failure to adhere to ethical marketing practices, investments in and
divestitures of domestic and foreign companies, unexpected growth in costs and
expenses, failure to recruit and retain the right employees and failure to
maintain a culture of compliance.
Please also refer to the overview of risk factors in 'Risk Management' on pp
40-42 of the Annual Report 2009 available on the company's website
(novonordisk.com <
http://www.novonordisk.com/>) as of 4 February 2010.
Unless required by law Novo Nordisk is under no duty and undertakes no
obligation to update or revise any forward-looking statement after the
distribution of this document, whether as a result of new information, future
events or otherwise.
Management statement
Today, the Board of Directors and Executive Management approved the audited
Annual Report of Novo Nordisk A/S for the year 2009. The Board of Directors and
Executive Management also approved this financial statement containing condensed
financial information for 2009.
The consolidated financial statements in the Annual Report 2009 are prepared in
accordance with International Financial Reporting Standards as issued by the
International Accounting Standards Board (IASB), and with the International
Financial Reporting Standards as endorsed by the EU. Further, the consolidated
financial statements and Management's Review are prepared in accordance with
additional Danish disclosure requirements for listed companies.
This financial statement has been prepared in accordance with the accounting
policies as applied in the consolidated financial statements for 2009 and
additional Danish disclosure requirements for listed companies.
In our opinion the accounting policies used are appropriate and the overall
presentation of this financial statement is adequate. Furthermore, in our
opinion, Management's Review includes a true and fair account of the development
in the operations and financial circumstances, of the results for the year and
of the financial position of the Group as well as a description of the most
significant risks and elements of uncertainty facing the Group in accordance
with Danish disclosure requirements for listed companies.
Bagsværd, 2 February 2010
Executive Management:
Lars Rebien Sørensen Jesper Brandgaard
President and CEO CFO
Lise Kingo Kåre Schultz Mads Krogsgaard Thomsen
Board of Directors:
Sten Scheibye Göran A Ando
Chairman Vice chairman
Henrik Gürtler Johnny Henriksen Pamela J Kirby
Anne Marie Kverneland Kurt Anker Nielsen Søren Thuesen Pedersen
Hannu Ryöppönen Stig Strøbæk Jørgen Wedel
Contacts for further information
Media: Investors:
Mike Rulis Klaus Bülow Davidsen
Tel: (+45) 4442 3573 Tel: (+45) 4442 3176
mike@novonordisk.com klda@novonordisk.com
<mailto:mike@novonordisk.com> <mailto:klda@novonordisk.com>
Kasper Roseeuw Poulsen
Tel: (+45) 4442 4471
krop@novonordisk.com
<mailto:krop@novonordisk.com>
In North America: In North America
Sean Clements Hans Rommer
Tel: (+1) 609 514 8316 Tel: (+1) 609 919 7937
secl@novonordisk.com hrmm@novonordisk.com
<mailto:secl@novonordisk.com> <mailto:hrmm@novonordisk.com>
Further information about Novo Nordisk is available on the company's homepage
novonordisk.com <
http://novonordisk.com/>
Appendix 1: Quarterly numbers in DKK
(Amounts in DKK
million, except
number of
employees,
earnings per
share and
number of
shares %
outstanding.) change
2009 Q4
2009
2008 vs
Q4
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 2008
--------------------------------------------------
Sales 13,062 12,517 13,001 12,498 12,583 11,246 11,110 10,614 4%
Gross profit 10,427 9,832 10,391 9,990 10,047 8,640 8,556 8,201 4%
Gross margin 79.8% 78.5% 79.9% 79.9% 79.8% 76.8% 77.0% 77.3%
Sales and
distribution
costs 4,237 3,502 3,837 3,844 3,558 3,155 3,178 2,975 19%
Percent of 32.4% 28.0% 29.5% 30.8% 28.3% 28.1% 28.6% 28.0%
sales
Research
and
development
costs 2,387 1,884 1,849 1,744 2,439 1,579 1,980 1,858 -2%
Percent of 18.3% 15.1% 14.2% 14.0% 19.4% 14.0% 17.8% 17.5%
sales
Administrative
expenses 726 666 693 679 749 633 626 627 -3%
Percent of 5.6% 5.3% 5.3% 5.4% 6.0% 5.6% 5.6% 5.9%
sales
Licence fees
and other
operating
income (net) 142 34 78 87 73 51 74 88 95%
Operating
profit 3,219 3,814 4,090 3,810 3,374 3,324 2,846 2,829 -5%
Operating 24.6% 30.5% 31.5% 30.5% 26.8% 29.6% 25.6% 26.7%
margin
Share of
profit/
(loss) in
associated
companies (2) (7) (11) (35) 4 (58) (3) (67) -150%
Financial
income 58 9 166 142 (82) 306 429 474 -171%
Financial
expenses 258 209 361 412 226 66 21 368 25%
Profit before
income taxes 2,992 3,607 3,884 3,505 3,070 3,506 3,251 2,868 -3%
Net profit 2,323 2,755 2,991 2,699 2,330 2,664 2,471 2,180 0%
Depreciation,
amortisation
and
impairment
losses 754 657 533 607 752 560 567 563 0%
Capital
expenditure 935 726 557 413 764 448 328 214 22%
Cash flow
from operating
activities 3,583 5,039 2,608 4,148 3,204 3,673 2,916 3,070 12%
Free cash
Flow 2,402 4,242 2,062 3,626 2,421 3,210 2,589 2,795 -1%
Total assets 54,742 52,589 51,246 50,205 50,603 48,990 48,478 47,534 8%
Total equity 35,734 34,874 34,086 31,345 32,979 32,173 33,046 31,251 8%
Equity ratio 65.3% 66.3% 66.5% 62.4% 65.2% 65.7% 68.2% 65.7%
Full-time
employees at
the end of the
period 28,809 28,497 27,998 27,429 26,575 26,360 26,060 25,765 8%
Basic
earnings
per share
(in DKK) 3.95 4.62 4.96 4.44 3.82 4.34 3.99 3.51 3%
Diluted
earnings
per share
(in DKK) 3.92 4.58 4.91 4.41 3.80 4.30 3.96 3.48 3%
Average
number of
shares
outstanding
(million) 598.9 596.4 603.1 607.4 609.3 614.2 618.6 620.9 -3%
Average
number of
shares
outstanding
incl dilutive
effect
of options
'in the money'
(million) 595.2 601.4 607.9 612.7 614.4 618.6 623.5 626.3 -3%
Sales by
business
segments:
Modern
insulins
(insulin
analogues) 5,714 5,353 5,414 4,990 5,028 4,365 4,103 3,821 14%
Human
insulins 2,685 2,747 2,879 3,004 3,093 2,806 2,966 2,939 -13%
Protein-
related
sales 569 519 492 484 477 464 460 443 19%
Oral
antidiabetic
products
(OAD) 636 650 675 691 602 671 478 640 6%
Diabetes
care total 9,604 9,269 9,460 9,169 9,200 8,306 8,007 7,843 4%
NovoSeven® 1,742 1,651 1,874 1,805 1,774 1,534 1,648 1,440 -2%
Norditropin® 1,171 1,074 1,122 1,034 1,060 941 986 878 10%
Hormone
replacement
therapy 460 440 435 409 442 394 391 385 4%
Other
products 85 83 110 81 107 71 78 68 -21%
Biopharma-
ceuticals total 3,458 3,248 3,541 3,329 3,383 2,940 3,103 2,771 2%
Sales by
geographic
segments:
North
America 4,510 4,527 4,710 4,532 4,478 3,759 3,467 3,450 1%
Europe 4,594 4,376 4,375 4,195 4,453 4,305 4,400 4,061 3%
International
Operations 2,493 2,288 2,532 2,513 2,186 2,074 2,069 2,096 14%
Japan &
Oceania 1,465 1,326 1,384 1,258 1,466 1,108 1,174 1,007 0%
Segment
operating
profit:
Diabetes
care 1,720 2,286 2,333 2,171 2,424 1,963 1,510 1,672 -29%
Biopharma-
ceuticals 1,499 1,528 1,757 1,639 950 1,361 1,336 1,157 58%
Appendix 2: Statement of comprehensive income
12M 12M
DKK million 2009 2008
--------------------------------------------------------------------------------
Income statement
Sales 51,078 45,553
Cost of goods sold 10,438 10,109
--------------------------------------------------------------------------------
Gross profit 40,640 35,444
Sales and distribution costs 15,420 12,866
Research and development costs 7,864 7,856
Administrative expenses 2,764 2,635
Licence fees and other operating income (net) 341 286
--------------------------------------------------------------------------------
Operating profit 14,933 12,373
Share of profit or loss of associated companies, net of tax (55) (124)
Financial income 375 1,127
Financial expenses 1,265 681
--------------------------------------------------------------------------------
Profit before income taxes 13,988 12,695
Income taxes 3,220 3,050
--------------------------------------------------------------------------------
NET PROFIT FOR THE YEAR 10,768 9,645
--------------------------------------------------------------------------------
Basic earnings per share (DKK) 17.97 15.66
Diluted earnings per share (DKK) 17.82 15.54
Segment Information
+------------------------------------------------------------------------------+
|Segment sales: |
| |
| Diabetes care 37,502 33,356|
| |
| Biopharmaceuticals 13,576 12,197|
| |
| |
|Segment operating profit: |
| |
| Diabetes care 8,510 7,569|
| |
| Operating margin 22.7% 22.7%|
| |
| |
| |
| Biopharmaceuticals 6,423 4,804|
| |
| Operating margin 47.3% 39.4%|
| |
| |
| |
|Total segment operating profit 14,933 12,373|
+------------------------------------------------------------------------------+
Statement of comprehensive income
Net profit for the year 10,768 9,645
Other comprehensive income:
Gains and losses arising from translating the financial
statement of
foreign operations and re-measuring available-for-sale
financial assets 527 (482)
Adjustment of cash flow hedges for the year 1,252 (1,555)
Share of other comprehensive income of associated
companies 9 39
Other 10 (45)
Income taxes relating to other comprehensive income (25) 81
--------------------------------------------------------------------------------
Other comprehensive income for the year, net of tax 1,773 (1,962)
--------------------------------------------------------------------------------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 12,541 7,683
--------------------------------------------------------------------------------
Appendix 3: Balance sheet
31 Dec 31 Dec
DKK million 2009 2008
----------------------------------------------------------------
ASSETS
Intangible assets 1,037 788
Property, plant and equipment 19,226 18,639
Investments in associated companies 176 222
Deferred income tax assets 1,455 1,696
Other non-current financial assets 182 194
----------------------------------------------------------------
TOTAL NON-CURRENT ASSETS 22,076 21,539
Inventories 10,016 9,611
Trade receivables 7,063 6,581
Tax receivables 799 1,010
Other current assets 1,962 1,704
Marketable securities and financial instruments 1,530 1,377
Cash at bank and in hand 11,296 8,781
----------------------------------------------------------------
TOTAL CURRENT ASSETS 32,666 29,064
----------------------------------------------------------------
TOTAL ASSETS 54,742 50,603
----------------------------------------------------------------
EQUITY AND LIABILITIES
Share capital 620 634
Treasury shares (32) (26)
Retained earnings 34,435 33,433
Other reserves 711 (1,062)
----------------------------------------------------------------
TOTAL EQUITY 35,734 32,979
Non-current debt 970 980
Deferred income tax liabilities 3,010 2,404
Retirement benefit obligations 456 419
Provisions for other liabilities 1,157 863
----------------------------------------------------------------
Total non-current liabilities 5,593 4,666
Current debt and financial instruments 418 1,334
Trade payables 2,242 2,281
Tax payables 701 567
Other current liabilities 6,813 5,853
Provisions for other liabilities 3,241 2,923
----------------------------------------------------------------
Total current liabilities 13,415 12,958
TOTAL LIABILITIES 19,008 17,624
----------------------------------------------------------------
TOTAL EQUITY AND LIABILITIES 54,742 50,603
----------------------------------------------------------------
Appendix 4: Statement of cash flows
DKK million 2009 2008
------------------------------------------------------------
Net profit for the year 10,768 9,645
Adjustment for
non-cash items:
Income taxes 3,220 3,050
Depreciation, amortisation and
impairment losses 2,551 2,442
Interest income and
interest expenses 71 (385)
Other adjustment 859 614
Income taxes paid (1,998) (3,172)
Interest received 284 656
Interest paid (98) (247)
------------------------------------------------------------
Cash flow before change
in working capital 15,657 12,603
(Increase)/decrease in
trade receivables and
other current assets (740) (700)
(Increase)/decrease
in inventories (405) (591)
Increase/(decrease) in
trade payables and other
current liabilities 921 1,228
Exchange rate adjustment (55) 323
------------------------------------------------------------
Cash flow from
operating activities 15,378 12,863
Purchase of intangible
assets and non-current
financial assets (433) (264)
Proceeds from sale of
property, plant and
equipment 1 18
Purchase of property, plant and equipment (2,632) (1,772)
Net change in marketable
securities (maturity
exceeding three months) - 466
Dividend received 18 170
------------------------------------------------------------
Cash flow from
investing activities (3,046) (1,382)
Repayment of non-current
debt - (153)
Purchase of treasury shares (6,512) (4,717)
Proceeds from sale
of treasury shares 117 295
Dividends paid to the
Company´s owners (3,650) (2,795)
------------------------------------------------------------
Cash flow from
financing activities (10,045) (7,370)
NET CASH FLOW 2,287 4,111
Unrealised gain/(loss) on
exchange rates and marketable securities
included in cash and
cash equivalents 21 (2)
------------------------------------------------------------
Net change in cash
and cash equivalents 2,308 4,109
Cash and cash equivalents
at the beginning of the year 8,726 4,617
------------------------------------------------------------
Cash and cash equivalents
at the end of the year 11,034 8,726
Additional information:
Cash and cash equivalents
at the end of the year 11,034 8,726
Bonds with original term to
maturity exceeding three months 1,013 997
Undrawn committed credit facilities 4,465 7,451
------------------------------------------------------------
FINANCIAL RESOURCES
AT THE END OF THE YEAR 16,512 17,174
Cash flow from operating
activities 15,378 12,863
+ Cash flow from
investing activities (3,046) (1,382)
- Net change in marketable
securities (maturity exceeding
three months) - 466
------------------------------------------------------------
FREE CASH FLOW 12,332 11,015
------------------------------------------------------------
Appendix 5: Statement of changes in equity
Other
reserves
---------------------------
Deferred
gain/
Exchange loss on Other
Share Retained rate cash adjust-
capital Treasury earnings adjust- flow ments Total
DKK million shares ments hedges
--------------------------------------------------------------------------------
2009
Balance
at the
beginning of
the year 634 (26) 33,433 (256) (859) 53 32,979
Total
comprehen-sive
income for
the year 10,768 527 1,252 (6) 12,541
Transactions
with
owners,
recognized
directly
in equity:
Dividends (3,650) (3,650)
Share-based
payment 259 259
Purchase of
treasury shares (22) (6,490) (6,512)
Sale of
treasury
shares 2 115 117
Reduction
of the
B share
capital (14) 14 -
--------------------------------------------------------------------------------
Balance
at the
end of
the year 620 (32) 34,435 271 393 47 35,734
--------------------------------------------------------------------------------
At the end of the year proposed
dividends (not yeat declared)
of DKK 4.400 million
(7.50 DKK per share) are included
In Retained earnings.
No dividend is declared on
treasury shares.
Other
reserves
-----------------------------
Deferred
gain/
Exchange loss on
rate cash Other
Share Treasury Retained adjust- flow adjust-
DKK million capital shares earnings ments hedges ments Total
---------------------------------------------------------------
2008
Balance at the
beginning of
the year 647 (26) 30,661 209 678 13 32,182
Total
comprehensive
income for
the year 9,645 (465) (1,537) 40 7,683
Transactions
with
owners,
recognised
directly
in equity:
Dividends (2,795) (2,795)
Share-based
payment 331 331
Purchase
of treasury
shares (16) (4,701) (4,717)
Sale of
treasury
shares 3 292 295
Reduction
of the B
share
capital (13) 13 -
---------------------------------------------------------------
Balance
at the
end of
the year 634 (26) 33,433 (256) (859) 53 32,979
---------------------------------------------------------------
At the end of the year proposed
dividends (declared in 2009)
of DKK 3,650 million (6.00 DKK
per share) are included in
Retained earnings.
No dividend is declared on treasury shares.
Appendix 6: Quarterly numbers in EUR / Supplementary information
(Amounts in EUR million, except
number of employees, earnings
per share and number of shares outstanding).
Key figures are translated into EUR as supplementary
information - the translation is
based on average exchange rate
for income statement and exchange rate at the balance
sheet date for balance sheet items.
The specified percent changes are based on the changes
in the 'Quarterly numbers in DKK', see appendix 1.
(Amounts in
EUR million,
except number
of employees,
earnings per
share and
number of
shares
outstanding.) %change
2009 Q42009
2008 vs
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q42008
----------------------------------------------------------
Sales 1,756 1,681 1,746 1,677 1,688 1,508 1,489 1,424 4%
Gross profit 1,401 1,321 1,395 1,341 1,348 1,159 1,147 1,100 4%
Gross margin 79.8% 78.5% 79.9% 79.9% 79.8% 76.8% 77.0% 77.3%
Sales and
distribution
costs 570 471 515 516 478 423 426 399 19%
Percent of 32.4% 28.0% 29.5% 30.8% 28.3% 28.1% 28.6% 28.0%
sales
Research
and
development
costs 321 253 248 234 327 211 266 249 (2%)
Percent of 18.3% 15.1% 14.2% 14.0% 19.4% 14.0% 17.8% 17.5%
sales
Administrative
expenses 97 90 93 91 100 85 84 84 (3%)
Percent of 5.6% 5.3% 5.3% 5.4% 6.0% 5.6% 5.6% 5.9%
sales
Licence fees
and other
operating
income (net) 19 5 10 12 10 7 10 12 95%
Operating
profit 432 512 549 512 453 446 381 380 (5%)
Operating 24.6% 30.5% 31.5% 30.5% 26.8% 29.6% 25.6% 26.7%
margin
Share of
profit/
(loss) in
associated
companies 0 (1) (1) (5) 2 (8) 0 (9) (150%)
Financial
income 8 2 22 19 8 41 57 64 (171%)
Financial
expenses 38 28 49 55 50 9 3 49 25%
Profit before
income taxes 402 485 521 471 413 470 436 385 (3%)
Net profit 312 370 402 362 313 357 332 292 0%
Depreciation,
amortisation
and
impairment
losses 102 88 72 81 101 75 76 76 0%
Capital
expenditure 125 98 75 55 102 60 44 29 22%
Cash flow
from operating
activities 481 677 350 557 429 492 391 412 12%
Free cash
Flow 323 569 277 487 325 430 347 375 (1%)
Total assets 7,356 7,064 6,881 6,741 6,792 6,566 6,500 6,375 8%
Total equity 4,802 4,685 4,577 4,208 4,426 4,312 4,431 4,191 8%
Equity ratio 65.3% 66.3% 66.5% 62.4% 65.2% 65.7% 68.2% 65.7%
Full-time
employees at
the end of the
period 28,809 28,497 27,998 27,429 26,575 26,360 26,060 25,765 8%
Basic
earnings
per share
(in DKK) 0.53 0.62 0.66 0.60 0.51 0.58 0.54 0.47 3%
Diluted
earnings
per share
(in DKK) 0.52 0.62 0.66 0.59 0.51 0.57 0.53 0.47 3%
Average
number of
shares
outstanding
(million) 589.9 596.4 603.1 607.4 609.3 614.2 618.6 620.9 (3%)
Average
number of
shares
outstanding
incl
dilutive
effect
of options
'in the money'
(million) 595.2 601.4 607.9 612.7 614.4 618.6 623.5 626.3 (3%)
Sales by
business
segments:
Modern
insulins
(insulin
analogues) 767 719 727 670 675 585 550 513 14%
Human
insulins 361 369 387 403 415 376 398 394 (13%)
Protein-
related
sales 76 70 66 65 64 62 62 59 19%
Oral
antidiabetic
products
(OAD) 86 87 90 93 81 90 64 86 6%
Diabetes
care total 1,290 1,245 1,270 1,231 1,235 1,113 1,074 1,052 4%
NovoSeven® 234 222 252 242 238 206 221 193 (2%)
Norditropin® 158 144 150 139 142 126 132 118 10%
Hormone
replacement
therapy 62 59 58 55 59 53 52 52 4%
Other
products 12 11 16 10 14 9 11 9 (21%)
Biopharma-
ceuticals
total 466 436 476 446 453 394 416 372 2%
Sales by
geographic
segments:
North
America 606 607 633 608 601 504 465 463 1%
Europe 618 588 587 563 597 577 590 545 3%
International
Operations 335 308 340 337 293 278 278 281 14%
Japan &
Oceania 197 178 186 169 197 149 157 135 0%
Segment
operating
profit:
Diabetes
care 230 307 314 291 325 263 203 224 (29%)
Biopharma-
ceuticals 202 205 235 221 127 183 179 155 58%
Appendix 7: Key currencies assumptions / Supplementary information
| | |
DKK per 100|2009 average exchange |Assumed 2010 average |Current exchange rate
| rates | exchange rates |as of 27 January 2010
------------+----------------------+---------------------+----------------------
USD | 536 | 528 | 529
------------+----------------------+---------------------+----------------------
JPY | 5.73 | 5.88 | 5.91
------------+----------------------+---------------------+----------------------
GBP | 836 | 855 | 858
------------+----------------------+---------------------+----------------------
CNY | 78 | 77 | 78
------------+----------------------+---------------------+----------------------
CAD | 470 | 495 | 497
| | |
Company Announcement no 4 / 2010
[HUG#1379258]
Company Announcement no 4 2010:
http://hugin.info/2013/R/1379258/339430.pdf