UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 6-K
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REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
FEBRUARY 5, 2008
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NOVO NORDISK A/S
(Exact name of Registrant as specified in its charter)
NOVO ALLE
DK-2880, BAGSVAERD
DENMARK
(Address of principal executive offices)
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Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F
Form 20-F [X] Form 40-F [ ]
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g-32(b):82-_____________________
FINAL RESULTS
FINANCIAL STATEMENT FOR 2007
Novo Nordisk increased net profit by 32% in 2007 Underlying operating profit
increased by close to 25% primarily driven by a 13% sales growth in local
currencies
* Sales in local currencies increased by 13% in 2007 and by 8% in Danish
kroner.
o Sales of modern insulins increased by 35% (29% in Danish kroner).
o Sales of NovoSeven[R] increased by 10% (4% in Danish kroner).
o Sales of Norditropin[R] increased by 11% (6% in Danish kroner).
o Sales in North America increased by 22% (12% in Danish kroner).
o Sales in International Operations increased by 18% (12% in Danish
kroner).
* Gross margin increased to 76.6% in 2007, up from 75.3% in 2006, primarily
reflecting continued productivity improvements.
* Reported operating profit of DKK 8,942 million (2% lower than in 2006) was
impacted by the non-recurring costs of DKK 1.3 billion related to the
discontinuation of the inhaled insulin project AERx[R]. Adjusted for these
non-recurring costs and the impact from currencies, underlying operating
profit increased by close to 25%.
* Net profit increased by 32% to DKK 8,522 million. Adjusted for both the
non-recurring income from the divestment of Dako's business activities and
the non-recurring costs related to the discontinuation of AERx[R], net
profit increased by 25%. Earnings per share (diluted) increased by 34% to
DKK 13.39.
* At the Annual General Meeting on 12 March 2008, the Board of Directors will
propose a 29% increase in dividend to DKK 4.50 per share of DKK 1. The
ongoing share repurchase programme has been increased to DKK 16.5 billion
and is now expected to be finalised before the end of 2009.
* For 2008, reported operating profit is expected to grow by at least 25%.
Adjusted for currency impact and the non-recurring costs related to the
discontinuation of AERx[R], the expectation for underlying operating profit
growth is at least 20%.
Lars Rebien Sorensen, president and CEO, said: "We are very pleased with the
2007 results. They are driven by robust sales growth in all major markets of our
portfolio of modern insulins and strong gross margin improvement. This makes us
confident that we will also be able to deliver solid underlying growth in 2008."
Contents
Page
Consolidated financial statement 2007 3
Long-term financial targets 4
Sales development by segments 5
Sales development by regions 5
Diabetes care 5
Biopharmaceuticals 6
Costs, licence fees and other operating income 7
Net financials and tax 8
Capital expenditure and free cash flow 8
Outlook 2008 9
Research and development update 9
Equity 12
Corporate governance 13
Sustainability issues update 15
Legal issues update 15
Financial calendar 16
Conference call details 16
Forward-looking statement 17
Contacts for further information 18
APPENDICES:
Appendices 1-2: Quarterly numbers in DKK and EUR 19
Appendices 3-4: Income statement and balance sheet 21
Appendix 5: Cash flow statement 23
Appendix 6: Statement of changes in equity 24
Consolidated financial statement 2007
These financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS). The accounting policies used in this
report are in all materiality consistent with those used in the Annual Report
2006.
% CHANGE
2007 VS
PROFIT AND LOSS 2007 2006 2005 2004 2003 2006
(Amounts below in DKK million)
SALES 41,831 38,743 33,760 29,031 26,158 8%
GROSS PROFIT 32,038 29,158 24,583 20,981 18,749 10%
Gross margin 76.6% 75.3% 72.8% 72.3% 71.7%
Sales and distribution costs 12,371 11,608 9,691 8,280 7,451 7%
Percent of sales 29.6% 30.0% 28.7% 28.5% 28.5%
Research and development costs 8,538 6,316 5,085 4,352 4,055 35%
-hereof costs related to (1,325) - - - -
discontinuation of AERx[R]
Percent of sales 20.4% 16.3% 15.1% 15.0% 15.5%
Percent of sales (excl AERx[R])1) 17.2% - - - -
Administrative expenses 2,508 2,387 2,122 1,944 1,857 5%
Percent of sales 6.0% 6.2% 6.3% 6.7% 7.1%
Licence fees and other operating income 321 272 403 575 1,036 18%
OPERATING PROFIT 8,942 9,119 8,088 6,980 6,422 (2%)
Operating margin 21.4% 23.5% 24.0% 24.0% 24.6%
OPERATING PROFIT (excl AERx[R])1) 10,267 - - - - 13%
Operating margin (excl AERx[R])1) 24.5% - - - -
Net financials 2,029 45 146 477 954 -
PROFIT BEFORE INCOME TAXES 10,971 9,164 8,234 7,457 7,376 20%
Income taxes 2,449 2,712 2,370 2,444 2,543 (10%)
Income tax rate 22.3% 29.6% 28.8% 32.8% 34.5%
NET PROFIT 8,522 6,452 5,864 5,013 4,833 32%
Net profit margin 20.4% 16.7% 17.4% 17.3% 18.5%
1) Excluding costs related to the discontinuation of AERx[R].
Consolidated financial statement 2007- continued
These financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS). The accounting policies used in this
report are in all materiality consistent with those used in the Annual Report
2006.
OTHER KEY NUMBERS
(Amounts below in DKK million except earnings per share, dividend per share and
number of employees)
% CHANGE 2007
2007 2006 2005 2004 2003 VS 2006
Depreciation, amortisation, etc 3,007 2,142 1,930 1,892 1,581 40%
Depreciation, amortisation, etc (excl AERx[R])1) 2,137 - - - -
Capital expenditure 2,268 2,787 3,665 2,999 2,273 (19%)
Free cash flow 9,012 4,707 4,833 4,278 3,846 91%
Equity 32,182 30,122 27,634 26,504 24,776 7%
Total assets 47,731 44,692 41,960 37,433 34,564 7%
Equity ratio 67.4% 67.4% 65.9% 70.8% 71.7%
Diluted earnings per share (in DKK) 13.39 10.00 8.92 7.42 7.08 34%
Dividend per share (in DKK)2) 4.50 3.50 3.00 2.40 2.20 29%
Payout ratio3) 32.8% 34.4% 33.2% 31.8% 30.8%
Payout ratio (adjusted)4) 34.9% - - - -
Average number of full-time employees 24,344 22,590 21,146 19,520 18,381 8%
1) Excluding costs related to the discontinuation of AERx[R].
2) Proposed dividend for the financial year 2007.
3) Total dividends for the year as a percentage of net profit.
4) Total dividends for the year as a percentage of net profit
adjusted for impact of Dako and AERx[R] discontinuation.
LONG-TERM FINANCIAL TARGETS
Long-term
2007 2006 2005 2004 2003 target ratio
PERFORMANCE AGAINST LONG-TERM FINANCIAL TARGETS
Operating profit growth (1.9%) 12.7% 15.9% 8.7% 8.4% 15%
Operating profit growth (excl AERx[R])1) 12.6% - - - -
Operating margin 21.4% 23.5% 24.0% 24.0% 24.6% 25%
Operating margin (excl AERx[R])1) 24.5% - - - -
Return on invested capital 27.2% 25.8% 24.7% 21.5% 20.4% 30%
Cash to earnings 105.7% 73.0% 82.4% 85.3% 79.6% 70%2)
Cash to earnings (excl AERx[R])3) 94.2% - - - -
1) Excluding costs related to the discontinuation of AERx[R].
2) Long-term target ratio measured as three years' average.
3) Earnings adjusted for net profit impact of AERx[R] discontinuation.
SALES DEVELOPMENT BY SEGMENTS
Sales increased by 13% measured in local currencies and by 8% in Danish kroner.
While growth was realised within both diabetes care and biopharmaceuticals, the
primary growth contribution originated from modern insulins. The reported sales
growth realised in 2007 was in line with the previously communicated guidance of
'6-9%' reported sales growth.
SHARE OF
SALES GROWTH GROWTH
2007 GROWTH IN LOCAL IN LOCAL
DKK MILLION AS REPORTED CURRENCIES CURRENCIES
THE DIABETES CARE SEGMENT
Modern insulins 14,008 29% 35% 76%
Human insulins 12,572 (7%) (3%) (8%)
Insulin-related sales 1,749 9% 13% 4%
Oral antidiabetic products 2,149 8% 14% 6%
DIABETES CARE - TOTAL 30,478 9% 14% 78%
THE BIOPHARMACEUTICALS SEGMENT
NovoSeven[R] 5,865 4% 10% 11%
Growth hormone therapy 3,511 6% 11% 7%
Other products 1,977 2% 8% 4%
BIOPHARMACEUTICALS - TOTAL 11,353 4% 10% 22%
TOTAL SALES 41,831 8% 13% 100%
SALES DEVELOPMENT BY REGIONS
In 2007, sales growth was realised in all regions measured in local currencies.
The main contributors to growth were North America and International Operations
providing 53% and 23%, respectively, of the total sales growth. Europe
contributed 21% and Japan & Oceania 3% of the sales growth in 2007 measured in
local currencies.
DIABETES CARE
Sales of diabetes care products increased by 14% measured in local currencies
and by 9% in Danish kroner to DKK 30,478 million compared to last year.
MODERN INSULINS, HUMAN INSULINS AND INSULIN-RELATED PRODUCTS
Sales of modern insulins, human insulins and insulin-related products increased
by 14% measured in local currencies and by 9% in Danish kroner to DKK 28,329
million. All regions contributed to growth measured in local currencies, with
North America and International Operations having the highest growth rates. Novo
Nordisk continues to be the global leader with 53% of the total insulin market
and 43% of the modern insulin market, both measured by volume.
Sales of modern insulins increased by 35% in local currencies in 2007 and by 29%
in Danish kroner to DKK 14,008 million. All regions realised solid growth rates,
with North America and Europe as the primary contributors to growth. Sales of
modern insulins contributed 76% of the overall growth in local currencies and
now constitute 53% of Novo Nordisk's sales of insulins.
North America
Sales in North America increased by 26% in local currencies in 2007 and by 16%
in Danish kroner, reflecting a solid penetration of the modern insulins
Levemir[R], NovoLog[R] and NovoLog[R] Mix 70/30. Novo Nordisk continues to
consolidate its leadership position in the US insulin market with 42% of the
total insulin market and 30% of the modern insulin market, both measured by
volume. Currently, more than 35% of Novo Nordisk's modern insulin volume is
being sold in FlexPen[R].
Europe
Sales in Europe increased by 7% in local currencies and 7% measured in Danish
kroner, reflecting continued progress for the portfolio of modern insulins. Novo
Nordisk holds 57% of the total insulin market and 50% of the modern insulin
market, both measured by volume, and is capturing the main share of growth in
the modern insulin market.
International Operations
Sales within International Operations increased by 20% in local currencies and
by 14% in Danish kroner. The main contributor to growth in 2007 was sales of
modern insulins, primarily in Turkey and China. Furthermore, sales of human
insulins continue to add to overall growth in the region, driven by China. The
key contributor to growth in International Operations continues to be China,
accounting for around 50% of the region's sales growth in 2007.
Japan & Oceania
Sales in Japan & Oceania increased by 4% in local currencies and decreased by 4%
measured in Danish kroner. The sales development reflects sales growth for the
modern insulins NovoRapid[R] and NovoRapid Mix[R] 30. In December 2007, Novo
Nordisk launched Levemir[R] in Japan and is now also in Japan the only company
with a full portfolio of modern insulins. Modern insulins are increasingly being
sold in the leading prefilled delivery device, FlexPen[R]. Novo Nordisk holds
73% of the total insulin market in Japan and 63% of the modern insulin market,
both measured by volume.
ORAL ANTIDIABETIC PRODUCTS (NOVONORM[R]/PRANDIN[R])
Sales of oral antidiabetic products increased by 14% in local currencies and by
8% in Danish kroner to DKK 2,149 million compared to 2006. This primarily
reflects increased sales in International Operations and North America, mainly
due to an increased market share in China and a higher average sales price in
the US market.
BIOPHARMACEUTICALS
Sales of biopharmaceutical products increased by 10% measured in local
currencies and by 4% measured in Danish kroner to DKK 11,353 million compared to
last year.
NOVOSEVEN[R]
Sales of NovoSeven[R] increased by 10% in local currencies and by 4% in Danish
kroner to DKK 5,865 million compared to last year. Sales growth for NovoSeven[R]
was primarily realised in North America. The sales growth for NovoSeven[R]
during 2007 primarily reflected increased sales within the congenital bleeding
disorder segments, where Novo Nordisk is the global leader. Treatment of
spontaneous bleeds for congenital inhibitor patients remains the largest area of
use.
GROWTH HORMONE THERAPY (NORDITROPIN[R])
Sales of Norditropin[R] (ie growth hormone in a liquid, ready-to-use
formulation) increased by 11% measured in local currencies and by 6% measured in
Danish kroner to DKK 3,511 million. All regions, and especially North America
and Europe, contributed to growth measured in local currencies. Novo Nordisk
continues to gain market share in the growth hormone market and is the
second-largest company in this market with 23% market share measured in volume.
OTHER PRODUCTS
Sales of other products within biopharmaceuticals, which predominantly consist
of hormone replacement therapy (HRT)-related products, increased by 8% in local
currencies and by 2% in Danish kroner to DKK 1,977 million. This development
primarily reflects continued sales progress in the US market for Vagifem[R],
Novo Nordisk's topical oestrogen product. Novo Nordisk continues to be the
second-largest participant within the global HRT market.
COSTS, LICENCE FEES AND OTHER OPERATING INCOME
The cost of goods sold was DKK 9,793 million in 2007 representing a gross margin
of 76.6% compared to 75.3% in 2006. This improvement reflects improved
production efficiency, a lower level of write-downs and impairment in 2007
compared to 2006 and higher average prices in the US. The gross margin was
negatively impacted by around 0.8 percentage points due to currency
developments, primarily the lower value of US dollars and Japanese yen versus
Danish kroner compared to last year.
Total non-production-related costs increased by 15% to DKK 23,417 million. The
increase primarily reflects costs related to research and development as well as
sales and distribution. Research and development costs increased more than
sales, primarily reflecting the non-recurring costs related to the
discontinuation of AERx[R] of DKK 1,325 million, of which DKK 870 million
relates to write-down and impairment of tangible and intangible assets, DKK 326
million relates to the discontinuation of clinical trials and, finally, DKK 129
million relates to other exit costs such as leasing and investment commitments.
Sales and distribution costs increased slightly more than sales, primarily
reflecting the increase in the US diabetes care sales force.
In 2007, Novo Nordisk expensed costs in relation to share-based long-term
incentive programmes for senior management and other senior employees (around
525 participants in total) amounting to DKK 130 million. The comparable expense
for 2006 was DKK 113 million (around 425 participants in total).
Licence fees and other operating income were DKK 321 million in 2007, positively
impacted by an income in the first quarter of 2007 related to the out-licensing
of an oral antidiabetic compound.
As a consequence of the non-recurring costs related to the discontinuation of
AERx[R], operating profit in 2007 decreased by 2% to DKK 8,942 million compared
to 2006 and is thereby significantly below the previously communicated
expectations of growth in operating profit of 'close to 10% as reported'.
Adjusted for the non-recurring costs related to the discontinuation of AERx[R],
operating profit growth was 13%.
NET FINANCIALS AND TAX
Net financials showed a net income of DKK 2,029 million in 2007 compared to a
net income of DKK 45 million in 2006.
Included in net financials is the result from associated companies with an
income of DKK 1,233 million, primarily related to the non-recurring tax-exempt
income of approximately DKK 1.5 billion from Novo Nordisk's divestment of the
ownership of Dako's business activities as well as Novo Nordisk's share of
losses in ZymoGenetics, Inc of approximately DKK 0.3 billion. In 2006, the
result from associated companies was an expense of DKK 260 million.
The foreign exchange result was an income of DKK 910 million compared to an
income of DKK 141 million in 2006. This development reflects gains on foreign
exchange hedging activities due to the lower value of especially US dollars and
Japanese yen versus Danish kroner in 2007 compared to the exchange rate level
prevailing in 2006. Foreign exchange hedging gains of DKK 691 million have been
deferred for future income recognition, primarily in 2008.
The realised results for net financials in 2007 were slightly higher than the
previously communicated expectation of a total net financial income of around
'DKK 1,950 million'.
The effective tax rate for 2007 was 22.3%, a decrease from 29.6% in 2006. The
significantly lower effective tax rate for 2007 primarily reflects a
non-recurring reduction of around 3 percentage points from Novo Nordisk's
divestment of the ownership of Dako's business activities as well as a
non-recurring effect of close to 2 percentage points from the re-evaluation of
the company's deferred tax liabilities as a consequence of the reduction in the
Danish corporation tax rate to 25%, introduced in 2007.
The realised effective tax rate for 2007 was in line with the previously
communicated expectation of a tax rate of 'around 22%' for the full year of
2007.
CAPITAL EXPENDITURE AND FREE CASH FLOW
Net capital expenditure for property, plant and equipment for 2007 was realised
at DKK 2.3 billion compared to DKK 2.8 billion for 2006. The main investment
projects in 2007 were capacity for AERx[R] insulin strip manufacturing,
expansion of FlexPen[R] assembly capacity as well as expansion of the
purification and filling capacity for insulin products. The realised capital
expenditure was slightly lower than the previously communicated expectation of
'around DKK 2.5 billion'.
Free cash flow for 2007 was realised at DKK 9.0 billion compared to DKK 4.7
billion for 2006. Novo Nordisk's financial resources at the end of 2007 were DKK
13.6 billion and higher than the level at the end of 2006. Included in the
financial resources are unutilised committed credit facilities of approximately
DKK 7.5 billion. The realised cash flow was significantly above the previously
communicated expectation of 'around DKK 7.5 billion' and is reflecting a
stronger operating performance, improvements in working capital requirements as
well as a lower level of investments in the fourth quarter of 2007.
OUTLOOK 2008
Novo Nordisk expects slightly more than 10% growth in SALES measured in local
currencies for 2008. This is based on expectations of continued market
penetration for Novo Nordisk's key strategic products within diabetes care and
biopharmaceuticals as well as expectations of increased competition during 2008.
Given the current level of exchange rates versus Danish kroner, the reported
sales growth in 2008 is expected to be around 3.5 percentage points lower than
the growth rate measured in local currencies.
For 2008, reported OPERATING PROFIT is expected to increase by at least 25%
despite the negative currency environment. The guidance for reported operating
profit for 2008 includes an estimate of non-recurring costs of DKK 300 million
in relation to the discontinuation of AERx[R] to cover severance payments and
other costs. Adjusting for the impact from currency and the non-recurring costs
in 2007 and 2008 related to the discontinuation of AERx[R], underlying operating
profit is expected to grow by at least 20%.
For 2008, Novo Nordisk expects a NET FINANCIAL INCOME of DKK 450 million,
reflecting significant foreign exchange hedging gains, primarily related to the
US dollar.
The effective TAX RATE for 2008 is expected to be approximately 24%.
CAPITAL EXPENDITURE is expected to be around DKK 2.5 billion in 2008.
Expectations for DEPRECIATIONS, AMORTISATION AND IMPAIRMENT LOSSES are around
DKK 2.5 billion, and FREE CASH FLOW is expected to be around DKK 7.5 billion.
All of the above expectations are provided that currency exchange rates,
especially the US dollar and related currencies, remain at the current level
versus the Danish krone for the rest of 2008. All other things being equal,
movements in key invoicing currencies will impact Novo Nordisk's operating
profit as illustrated below:
INVOICING CURRENCY ANNUAL IMPACT ON NOVO NORDISK'S OPERATING
PROFIT OF A 5% MOVEMENT IN CURRENCY
USD DKK 470 million
JPY DKK 140 million
GBP DKK 85 million
USD-related DKK 100 million
Note: For 2008 onwards the currency sensitivity for 'USD-related' currencies has
been focused to solely reflect the impact from CNY and CAD.
Novo Nordisk has hedged expected net cash flows in relation to US dollars,
Japanese yen and British pounds for 17, 15 and 10 months, respectively. The
financial impact from foreign exchange hedging is included in 'Net financials'.
RESEARCH AND DEVELOPMENT UPDATE
DIABETES CARE
Novo Nordisk has finalised the two planned phase 3 studies in Japan assessing
the effect of the once-daily human GLP-1 analogue, liraglutide, for the
treatment of type 2 diabetes in monotherapy and in combination with
sulfonylurea, a widely used oral antidiabetic treatment.
The 24-week monotherapy study included 411 Japanese subjects with type 2
diabetes previously treated with diet and exercise or a single oral antidiabetic
medication. After a four-week wash-out period subjects were randomised to either
liraglutide or sulfonylurea (glibenclamide) therapy. From an average baseline
HbA1c of close to 9%, Hba1c levels decreased by close to 2 percentage points in
the liraglutide-treated group. The change in HbA1c was statistically
significantly better than that observed for the glibenclamide group. At the end
of the study approximately 50% of patients in the liraglutide group were below
the American Diabetes Association (ADA) target of HbA1c < 7%. The improvements
in HbA1c levels in liraglutide-treated subjects were obtained through lowering
of both fasting and postprandial blood glucose levels. At the beginning of the
study, average BMI was close to 25 and average body weight was around 65 kg. A
body weight difference of approximately 2 kg in favour of liraglutide treatment
was observed when compared to treatment with glibenclamide. Treatment with
liraglutide was generally well tolerated. Subjects treated with liraglutide
experienced a low rate of hypoglycaemic events, and this was statistically
significantly lower than the rate observed in subjects treated with
glibenclamide. Nausea was reported in less than 10% of the subjects.
The 24-week sulfonylurea add-on study included 267 Japanese subjects with type 2
diabetes where either placebo or two different doses of liraglutide were added
to existing sulfonylurea therapy. From an average baseline HbA1c of around 8.5%,
a statistically significant improvement in HbA1c was observed following
liraglutide treatment. The average HbA1c at the highest dose tested was reduced
to below 7.0%, thereby bringing around 70% of the subjects to a target HbA1c
level below 7.0%. From an average starting weight of around 65 kg and an average
BMI of around 25 there was no weight change from baseline in the
liraglutide-treated subjects, in spite of the improvements in glycaemic control.
Similarly, there were no subjects reporting major hypoglycaemic events. Subjects
randomised to liraglutide treatment experienced the highest completion rate in
the study (around 95%). Overall, reporting of side effects occurred at a low
level and the most frequently reported side effects in liraglutide-treated
subjects were constipation and diarrhoea (in around 10% of subjects). Nausea was
reported in less than 5% of the subjects.
Based on the results from the two Japanese phase 3 studies Novo Nordisk expects
to file for regulatory approval in Japan before the end of the third quarter of
2008.
In December 2007, and as previously communicated, Novo Nordisk announced
clinical results from the last of five phase 3 studies (the LEAD(TM) 3 study) to
be used for the regulatory filing in Europe and the US of the once-daily human
GLP-1 analogue liraglutide. Patients in the one-year study were randomised to
treatment with one of two doses of liraglutide or 8 mg of glimepiride, a widely
used oral antidiabetic medication. At both doses tested, liraglutide provided
statistically significantly better glucose control than glimepiride. On average,
the patients treated with liraglutide experienced a lowering of HbA1c of more
than 1 percentage point. Patients treated with liraglutide who had previously
only been treated with diet and exercise saw HbA1c drop by more than 1.5
percentage points. The ADA treatment goal of HbA1c < 7% was reached by more than
50% of the patients receiving the highest dose of liraglutide. As has been seen
in previous studies where liraglutide has been given as monotherapy, patients
receiving liraglutide in this study experienced a very low level of
hypoglycaemia, contrasting with the glimepiride-treated group where
hypoglycaemia occurred in a larger number of patients. Furthermore, a
statistically significant improvement in systolic blood pressure and a reduction
of body weight of between 3 and 4 kg were seen in patients treated with
liraglutide when compared to patients treated with glimepiride. Novo Nordisk
expects to file for regulatory approval of liraglutide for the treatment of type
2 diabetes in Europe and the US before the end of the second quarter of 2008.
In November 2007 and as previously communicated, Novo Nordisk announced clinical
results of a phase 2 study comparing liraglutide with orlistat, a lipase
inhibitor, for treatment of obesity in people who do not have diabetes. The
study demonstrated that liraglutide given once daily over 20 weeks at the
highest dose led to a weight loss of just above 7 kg in comparison to a weight
loss of just below 3 kg in the placebo group and a weight loss of just above 4
kg in the orlistat-treated group. All doses of liraglutide reduced body weight.
More than 75% of the people treated with the highest dose experienced a weight
loss larger than 5%, and more than 25% experienced a weight loss larger than 10%
relative to their body weight at randomisation. Finally, the study revealed a
beneficial effect on systolic blood pressure after treatment with liraglutide.
Approximately 30% of the 564 participants in the study showed signs of
prediabetes at randomisation. Following 20 weeks of treatment with any dose of
liraglutide, between 80% and 90% of these participants no longer showed any sign
of prediabetes, as opposed to around 40% in the placebo- and orlistat-treated
groups. Liraglutide was generally well tolerated. Novo Nordisk expects to
initiate a phase 3 obesity programme with liraglutide before the end of 2008.
For two of the expected next-generation modern insulin candidates, Novo Nordisk
has initiated clinical phase 2 studies. The studies involve NN1250, a neutral,
soluble, long-acting modern insulin with a flat and predictable profile
providing more than 24-hour coverage by once-daily injection, and NN5401, a
neutral, soluble, modern insulin fixed combination with improved properties.
Novo Nordisk expects to finalise both these phase 2 studies in the first quarter
of 2009.
In December 2007, Novo Nordisk submitted NovoMix[R] 70 for regulatory approval
in Japan. NovoMix[R] 70 is intended to expand the treatment options for the
approximately 50% of the Japanese patients who are currently on a premixed
treatment regimen.
Finally, and as communicated on 14 January 2008, Novo Nordisk has decided to
refocus its activities within inhaled insulin and to discontinue clinical
development of AERx[R] inhaled insulin (AERx[R] iDMS). The decision was based on
a detailed analysis of the future prospects for inhaled insulin and a review of
the medical and commercial potential of the AERx[R] inhaled insulin system. The
decision to discontinue the development of AERx[R] was not due to safety
concerns. Novo Nordisk intends to increase research and development activities
targeted at inhalation systems for long-acting analogues of insulin and GLP-1.
The activities will take place at two centres of excellence in Hayward,
California, and Hillerod, Denmark.
BIOPHARMACEUTICALS
Novo Nordisk has finalised the phase 2 safety study for the use of NovoSeven[R]
in cardiac surgery. A total of 172 cardiac surgery patients were included in the
study. Preliminary results from the study confirm the safety profile known from
the cardiac surgery setting and from previous studies of NovoSeven[R] outside of
haemophilia with inhibitors. While the primary endpoint of this trial was
safety, the trial also demonstrated the biologic haemostatic effect of
NovoSeven[R]. Novo Nordisk expects to communicate next steps for NovoSeven[R] in
cardiac surgery during the first half of 2008, following consultations with
regulatory authorities and external experts.
A subcutaneously administered formulation of rFVIIa has entered phase 1 clinical
development. The possibility of administering rFVIIa by means of subcutaneous
injection is expected to significantly improve convenience for haemophilia
patients with inhibitors.
The heat-stable version of NovoSeven[R] was submitted in December 2007 for
regulatory approval in Japan. Regulatory submissions of the heat-stable version
of NovoSeven[R] in Europe and the US took place in mid-2007.
Driven by a higher aspiration level within the haemophilia portfolio of Novo
Nordisk, the company is now actively pursuing the development of new molecules
for the treatment of haemophilia with and without inhibitors. The portfolio
includes clotting factors targeting different parts of the coagulation pathway
and aim at on-demand as well as prophylactic therapy. Among the preclinical
projects, the most advanced of these are expected to enter clinical development
within the next couple of years.
The R&D strategy for the emerging biopharmaceuticals area has been updated.
Based on an evaluation of the general competence level required, the level of
investments needed and the likelihood of success, Novo Nordisk has decided to
increase and focus activities on inflammatory diseases. As a consequence,
research and development activities within oncology will be terminated and
resources applied to the growing inflammation portfolio. Existing oncology
projects, including the IL-21 programme and the anti-KIR project, are expected
to be out-licensed. The ongoing development activities for these two projects
will continue while discussions with potential new partners are taking place.
The first two compounds targeting inflammatory diseases are expected to enter
clinical development in 2008.
As a strategic life-cycle management initiative supporting the growth hormone
franchise, Novo Nordisk has initiated a phase 1 study with a longer-acting human
growth hormone. Based on Novo Nordisk's PEGylation technology, the compound is
designed for once-weekly treatment with expected administration in a convenient
injection device.
In December 2007, Novo Nordisk filed Vagifem[R] low dose (10 micrograms
oestradiol) for marketing approval with the FDA.
EQUITY
Total equity was DKK 32,182 million at the end of 2007, equal to 67.4% of total
assets, compared to 67.4% at the end of 2006. Please refer to appendix 6 for
further elaboration of changes in equity during 2007.
PROPOSED DIVIDEND AND SHARE REPURCHASE PROGRAMME
At the Annual General Meeting on 12 March 2008, the Board of Directors will
propose a 29% increase in dividend to DKK 4.50 per share of DKK 1, corresponding
to a pay-out ratio of 34.9%, when adjusted for the non-recurring costs related
to the discontinuation of AERx[R] and the non-recurring income from the
divestment of Dako's business activities, compared to 34.4% for the financial
year 2006. No dividend will be paid on the company's holding of treasury B
shares.
During 2007, Novo Nordisk repurchased 15,537,012 B shares at an average price of
DKK 311 per share, equal to a cash value of DKK 4.8 billion. During 2006, Novo
Nordisk repurchased B shares equal to a cash value of DKK 3 billion. The Board
of Directors has approved an increase by DKK 6.5 billion in the ongoing DKK 10
billion share repurchase programme, bringing the total value of the share
repurchase programme to DKK 16.5 billion. The programme is now expected to be
finalised before the end of 2009 as compared to the previously communicated
completion time 'before the end of 2008'.
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 (Safe Harbour Regulation). For that purpose Novo Nordisk has appointed J.
P. Morgan Securities Ltd. as lead manager to independently and without influence
from Novo Nordisk execute the first part of its share repurchase programme. The
purpose of the programme is reduction of 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 6 August 2008. A maximum of 172,967 shares can be bought
during one single trading day, equal to 15% of the average daily trading volume
of Novo Nordisk B shares on the OMX Nordic Exchange Copenhagen during the month
of December 2007, and a maximum of 22,312,788 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.
HOLDING OF TREASURY SHARES AND REDUCTION OF SHARE CAPITAL
As per 30 January 2008, Novo Nordisk A/S and its wholly-owned affiliates owned
25,815,130 of its own B shares, corresponding to 4% of the total share capital.
In order to maintain capital structure flexibility, the Board of Directors will
at the Annual General Meeting in 2008 also propose a reduction in the B share
capital from DKK 539,472,800 to DKK 526,512,800 by cancelling 12,960,000 B
shares of DKK 1 from the Company's own holdings of B shares at a nominal value
of DKK 12,960,000, equal to 2% of the total share capital. After implementation
of the share capital reduction, the Company's share capital will amount to DKK
634,000,000 divided into an A share capital of DKK 107,487,200 and a B share
capital of DKK 526,512,800.
CORPORATE GOVERNANCE
ELECTION OF NEW MEMBER OF THE BOARD OF DIRECTORS
At the Annual General Meeting on 12 March 2008, the Board of Directors will
propose that Pamela J Kirby is elected to the Board. Dr Kirby, a British
national, is chairman of the Board of Scynexis Inc, US, and is also a board
member of Smith & Nephew plc, UK, among other board positions. Dr Kirby has
extensive executive experience from the international pharmaceutical and biotech
industry and holds a PhD in clinical pharmacology from the University of London,
UK.
REMUNERATION POLICY
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 executives with those of the shareholders. In light of recent changes in
Danish legislation, Novo Nordisk will present for approval at the Annual General
Meeting in 2008 its guidelines for incentive-based remuneration for the Board of
Directors and Executive Management of Novo Nordisk.
LONG-TERM SHARE-BASED INCENTIVE PROGRAMME FOR SENIOR MANAGEMENT
As from 2004, members of Novo Nordisk's Executive Management (currently five)
and the other members of the Senior Management Board (currently 22) 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 the 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 shares in the joint pool are locked up for a three-year period before
they potentially may be transferred to the participants.
For 2004, 252,688 shares were allocated to the joint pool and the market value
of the scheme was expensed in 2004. The number of shares in the 2004 joint pool
has not been reduced as the financial performance in the subsequent years
(2005-2007) reached specified threshold levels. Accordingly, the original number
of shares allocated to the joint pool will, according to the principles of the
scheme, be transferred to 22 current and former members of senior management
immediately after the announcement of the full-year 2007 financial results on 31
January 2008.
For 2007 and based on an assessment of the economic value generated in 2007, as
well as the performance of the R&D portfolio and key sustainability projects,
the Board of Directors on 30 January 2008 approved the establishment of a joint
pool for the financial year of 2007 by allocating a total of 166,445 Novo
Nordisk B shares, corresponding to a cash value of DKK 43 million. This
allocation amounts to 6.5 months of fixed base salary on average per
participant. This amount was expensed in 2007.
As the long-term share-based incentive programme is evaluated by the Board of
Directors to have worked successfully in 2007, it is planned to continue in 2008
with an unchanged structure. Novo Nordisk has, however, decided to make this
decision subject to the formal approval by the Annual General Meeting in March
2008 of the guidelines for incentive-based remuneration for the Board of
Directors and Executive Management of Novo Nordisk.
LONG-TERM SHARE-BASED INCENTIVE PROGRAMME FOR VICE PRESIDENTS
As from 2007, around 500 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 the 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 the 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 2007 as well as the
performance of the R&D portfolio and key sustainability projects, the Board of
Directors on 30 January 2008 approved the establishment of a pool for 2007 by
allocating a total of 527,665 Novo Nordisk B shares, corresponding to a cash
value of DKK 135 million. This allocation amounts to 3.25 months of fixed base
salary on average per participant. This amount will be amortised over four
years.
COMPLIANCE WITH SARBANES-OXLEY REQUIREMENTS
In 2007, Novo Nordisk was, as was also the case in 2006, 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 2007
compliance are included in the Form 20-F, which Novo Nordisk as a listed company
on the New York Stock Exchange is required to prepare. The Form 20-F is expected
to be filed mid-February 2008.
SUSTAINABILITY ISSUES UPDATE
EXTENSION OF FUNDING TO THE WORLD DIABETES FOUNDATION
The World Diabetes
Foundation (WDF) is dedicated to supporting the prevention and treatment of
diabetes in the developing world through the funding of sustainable projects. At
its core lies the promise of equal access to diabetes care. The WDF was
established by Novo Nordisk A/S in 2002 through a commitment to donate an amount
not exceeding DKK 65 million per year until 2010. The WDF is an independent
trust and is governed by a board of six experts in the field of diabetes, access
to health and development assistance. Since 2002, the WDF has successfully
funded 138 projects in more than 70 developing countries, and it is estimated
that these projects will potentially influence the diabetes treatment of 55
million people directly.
The Board of Directors of Novo Nordisk wishes to secure that the WDF is able to
continue its activities after expiry in 2010 of the original donation period,
and will propose that the Annual General Meeting approves a donation by Novo
Nordisk to the WDF of an amount up to a total of DKK 575 million to be granted
as individual annual contributions over a period of 10 years as from the
financial year 2008 through to the financial year 2017.
IMPLEMENTATION OF THE UN RESOLUTION ON DIABETES
On the first UN-observed World Diabetes Day, 14 November 2007, Novo Nordisk
organised events to mark the day across the world. Around 250,000 people in 50
countries took part. The company's global advocacy effort to promote awareness
of and action on diabetes is a response to the UN Resolution on diabetes,
adopted in December 2006, in recognition of diabetes as a major global health
challenge and in respect of the human right to proper care. Novo Nordisk
continues to take an active leadership role in its implementation via its
National Changing Diabetes[R] programmes, which offer awareness, education and
guidelines on prevention, treatment and care of diabetes.
CHANGING DIABETES[R] BAROMETER
The Changing Diabetes[R] Barometer, launched in November 2007, will measure and
share the worldwide progress in the fight against diabetes on an annual basis.
The Barometer is a tool that will provide healthcare professionals, patient
organisations, politicians, institutions and news media with valuable
information on how to improve the quality of diabetes care, bring down
diabetes-related complications, extend patients' life expectancy and reduce
costs. An annual report will include key findings from the Barometer. The first
report covers 21 countries and highlights that significant savings, potentially
as much as a 20% reduction of lifelong healthcare costs, can be achieved if
people with diabetes are diagnosed earlier and before any complications arise.
LEGAL ISSUES UPDATE
US HORMONE THERAPY LITIGATION
As of 30 January 2008, Novo Nordisk Inc., as well as the majority of 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 45 individuals who allege use of a Novo Nordisk hormone therapy
product. These products (Activella[R] and Vagifem[R]) 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.).
Further, 27 individuals currently allege, in relation to similar lawsuits
against Pfizer Inc., that they also have used a Novo Nordisk hormone therapy
product. Novo Nordisk does not have any court trials scheduled for 2008 and does
not presently expect to have a trial before late 2008. Novo Nordisk does not
expect the pending claims to impact Novo Nordisk's financial outlook.
Additional information on contingent liabilities is available in the financial
notes in the Annual Report 2007, which is expected to be available on Novo
Nordisk's website on 4 February 2008.
FINANCIAL CALENDAR
4 February 2008 - PDF version of the Annual Report available on
novonordisk.com, online Annual Report launched
15 February 2008 - Printed version of the Annual Report
12 March 2008 - Annual General Meeting
13 March 2008 - Shareholders' meeting (in Danish only)
30 April 2008 - Financial statement for the first quarter of 2008
7 August 2008 - Financial statement for the first half of 2008
30 October 2008 - Financial statement for the first nine months of 2008
29 January 2009 - Financial statement for 2008
CONFERENCE CALL DETAILS
At 13.00 CET today, corresponding to 7.00 am New York time, a conference call
will be held. Investors will be able to listen in via a link on novonordisk.com,
which can be found under 'Investors - Download centre'. Presentation material
for the conference call will be made available approximately one hour before on
the same page.
FORWARD-LOOKING STATEMENT
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
2007 and Form 20-F both expected to be filed with the SEC in February 2008, 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' 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 (i)
statements of plans, objectives or goals for future operations, including those
related to Novo Nordisk's products, product research, product introductions and
product approvals as well as cooperations in relation thereto, (ii) statements
containing projections of revenues, income (or loss), earnings per share,
capital expenditures, dividends, capital structure or other net financials,
(iii) statements of future economic performance , future actions and outcome of
contingencies such as legal proceedings, and (iv) 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 2008',
'Research and development update' 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 in this document, could cause actual results
to differ materially from those contained 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 development projects,
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
'business strategy, opportunities and key risks' on pp 8-9 of the Annual Report
2007 expected to be available on our website (novonordisk.com) from 4 February
2008.
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.
Bagsvaerd 31 January 2008
Board of Directors
CONTACTS FOR FURTHER INFORMATION
Media: Investors:
Outside North America: Outside North America:
Mike Rulis Mads Veggerby Lausten
Tel (direct): (+45) 4442 3573 Tel (direct): (+45) 4443 7919
mike@novonordisk.com mlau@novonordisk.com
Hans Rommer
Tel (direct): (+45) 4442 4765
hrmm@novonordisk.com
In North America: In North America:
Sean Clements Christian Qvist Frandsen
Tel (direct): (+1) 609 514 8316 Tel (direct): (+1) 609 919 7937
secl@novonordisk.com cqfr@novonordisk.com
Further information on Novo Nordisk is available on the company's internet
homepage at the address: novonordisk.com
ENCL 1: QUARTERLY NUMBERS IN DKK
(Amounts in DKK million, except number of employees, earnings per share and
number of shares outstanding.)
%
change
Q4
2007
2007 2006 vs
Q4
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 2006
SALES 10,946 10,504 10,563 9,818 10,487 9,583 9,727 8,946 4%
Gross profit 8,345 7,990 8,205 7,498 7,906 7,246 7,475 6,531 6%
Gross margin 76.2% 76.1% 77.7% 76.4% 75.4% 75.6% 76.8% 73.0%
Sales and distribution costs 3,220 2,993 3,110 3,048 3,331 2,699 2,850 2,728 -3%
Percent of sales 29.4% 28.5% 29.4% 31.0% 31.8% 28.2% 29.3% 30.5%
Research and development costs 3,413 1,724 1,754 1,647 1,910 1,489 1,498 1,419 79%
Hereof costs related to
discontinuation of AERx[R]* (1,325)
Percent of sales 31.2% 16.4% 16.6% 16.8% 18.2% 15.5% 15.4% 15.9%
Percent of sale (excl. AERx[R])* 19.1%
Administrative expenses 677 623 594 614 645 605 557 580 5%
Percent of sales 6.2% 5.9% 5.6% 6.3% 6.2% 6.3% 5.7% 6.5%
Licence fees and other operating
income (net) 92 31 60 138 88 49 59 76 5%
OPERATING PROFIT 1,127 2,681 2,807 2,327 2,108 2,502 2,629 1,880 -47%
Operating margin 10.3% 25.5% 26.6% 23.7% 20.1% 26.1% 27.0% 21.0%
OPERATING PROFIT (excl. AERX[R])* 2,452 16%
Operating margin (excl. AERx[R])* 22.4%
Share of profit/(loss) in associated
companies 0 (57) 1,350 (60) (112) (30) (58) (60) -
Financial income 375 322 297 309 579 139 102 111 -35%
Financial expenses 155 90 60 202 165 77 182 202 -6%
Profit before income taxes 1,347 2,856 4,394 2,374 2,410 2,534 2,491 1,729 -44%
NET PROFIT 977 2,184 3,652 1,709 1,724 1,774 1,743 1,211 -43%
Depreciation, amortisation and
impairment losses 1,396 586 516 509 574 600 508 460 143%
Depreciation, amortisation, etc
(excl. AERx[R])* 526 -8%
Capital expenditure 719 597 508 444 899 671 622 595 -20%
Cash flow from operating activities 2,498 3,500 1,438 2,551 359 3,520 1,768 2,091 596%
Free cash flow 3,198 2,888 826 2,100 (439) 2,684 996 1,466 -
Equity 32,182 33,161 33,475 29,676 30,122 28,288 28,908 27,042 7%
Total assets 47,731 48,423 48,300 44,742 44,692 43,744 43,145 41,299 7%
Equity ratio 67.4% 68.5% 69.3% 66.3% 67.4% 64.7% 67.0% 65.5%
Full-time employees at the end of
the period 25,516 25,206 24,729 24,045 23,172 23,071 22,792 22,556 10%
Basic earnings per share (in DKK) 1.56 3.46 5.75 2.69 2.72 2.77 2.70 1.87 -43%
Diluted earnings per share (in DKK) 1.55 3.43 5.71 2.68 2.70 2.76 2.69 1.86 -43%
Average number of shares outstanding
(million)** 624.4 632.0 635.8 635.0 634.2 640.2 645.8 647.2 -2%
Average number of shares outstanding
incl dilutive effect of options 'in
the money' (million)** 629.6 636.4 640.2 639.4 638.4 643.6 649.0 650.4 -1%
Sales by business segments:
Modern insulins (insulin analogues) 3,911 3,568 3,464 3,065 3,122 2,701 2,678 2,324 25%
Human insulins *** 3,116 3,098 3,222 3,136 3,519 3,306 3,301 3,325 -11%
Insulin-related sales *** 448 445 437 419 431 391 406 378 4%
Oral antidiabetic products (OAD) 512 585 529 523 508 516 483 477 1%
DIABETES CARE TOTAL 7,987 7,696 7,652 7,143 7,580 6,914 6,868 6,504 5%
NovoSeven[R] 1,519 1,427 1,508 1,411 1,470 1,393 1,507 1,265 3%
Growth hormone therapy 925 878 924 784 897 821 882 709 3%
Hormone replacement therapy 437 414 411 406 455 383 396 373 -4%
Other products 78 89 68 74 85 72 74 95 -8%
BIOPHARMACEUTICALS TOTAL 2,959 2,808 2,911 2,675 2,907 2,669 2,859 2,442 2%
Sales by geographic segments:
Europe **** 4,348 4,036 4,035 3,931 4,013 3,843 3,903 3,541 8%
North America 3,608 3,500 3,424 3,214 3,486 3,062 2,968 2,764 3%
International Operations **** 1,776 1,870 1,953 1,696 1,690 1,539 1,648 1,617 5%
Japan & Oceania 1,214 1,098 1,151 977 1,298 1,139 1,208 1,024 -6%
Segment operating profit:
Diabetes care (75) 1,487 1,600 1,247 1,198 1,296 1,490 998 -
Diabetes care (excl. AERx[R])* 1,250 4%
Biopharmaceuticals 1,202 1,194 1,207 1,080 910 1,206 1,139 882 32%
*) Excluding costs related to the discontinuation of AERx[R]
**) For Q4 2007 the exact numbers of 'Average number of shares outstanding' and
'Average number of shares outstanding incl dilutive effect of options in the
money'' are 624,376,552 and 629,555,043 respectively.
***) As from Q2 2007 sales figures for Human insulins and Insulin-related sales
are presented separately. Comparative figures are adjusted accordingly.
****) Comparative figures from 2006 have been adjusted in order to reflect a
changed organisational structure from 1 January 2007 which transfers 8
countries, incl. Bulgaria and Romania, from International Operations to Europe.
ENCL 2: QUARTERLY NUMBERS IN EUR
(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.
%
change
Q4
2007
2007 2006 vs
Q4
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 2006
SALES 1,468 1,411 1,418 1,317 1,406 1,285 1,304 1,199 4%
Gross profit 1,119 1,074 1,101 1,006 1,060 972 1,002 875 6%
Gross margin 76.2% 76.1% 77.7% 76.4% 75.4% 75.6% 76.8% 73.0%
Sales and distribution costs 432 402 417 409 447 361 382 366 -3%
Percent of sales 29.4% 28.5% 29.4% 31.0% 31.8% 28.2% 29.3% 30.5%
Research and development costs 458 232 235 221 256 200 201 190 79%
-Hereof costs related to discontinuation
of AERx[R]* (178)
Percent of sales 31.2% 16.4% 16.6% 16.8% 18.2% 15.5% 15.4% 15.9%
Percent of sales (excl. AERx[R])* 19.1%
Administrative expenses 91 84 80 82 86 82 74 78 5%
Percent of sales 6.2% 5.9% 5.6% 6.3% 6.2% 6.3% 5.7% 6.5%
Licence fees and other operating income (net) 12 4 8 19 11 7 8 10 5%
OPERATING PROFIT 151 360 377 312 283 336 352 252 -47%
Operating margin 10.3% 25.5% 26.6% 23.7% 20.1% 26.1% 27.0% 21.0%
OPERATING PROFIT (EXCL. AERX[R])* 329 16%
Operating margin (excl. AERx[R])* 22.4%
Share of profit/(loss) in associated
companies 0 (7) 181 (8) (15) (4) (8) (8) -
Financial income 49 44 40 41 78 18 14 15 -35%
Financial expenses 21 12 8 27 22 11 24 27 -6%
Profit before income taxes 180 384 589 319 324 339 334 232 -44%
NET PROFIT 131 294 490 229 231 238 234 162 -43%
Depreciation, amortisation and impairment
losses 188 78 70 68 77 80 68 62 143%
Depreciation, amortisation, etc
(excl AERx[R])* 71 -8%
Capital expenditure 96 80 68 60 121 90 83 80 -20%
Cash flow from operating activities 335 470 193 342 48 472 237 280 596%
Free cash flow 430 387 111 282 (59) 360 134 196 -
Equity 4,316 4,449 4,498 3,983 4,040 3,793 3,875 3,624 7%
Total assets 6,401 6,496 6,490 6,005 5,994 5,866 5,784 5,534 7%
Equity ratio 67.4% 68.5% 69.3% 66.3% 67.4% 64.7% 67.0% 65.5%
Full-time employees at the end
of the period 25,516 25,206 24,729 24,045 23,172 23,071 22,792 22,556 10%
Basic earnings per share (in EUR) 0.21 0.47 0.77 0.36 0.37 0.37 0.36 0.25 -43%
Diluted earnings per share (in EUR) 0.21 0.47 0.76 0.36 0.36 0.37 0.36 0.25 -43%
Average number of shares outstanding
(million)** 624.4 632.0 635.8 635.0 634.2 640.2 645.8 647.2 -2%
Average number of shares outstanding
incl Dilutive effect of options 'in the
money' (million)** 629.6 636.4 640.2 639.4 638.4 643.6 649.0 650.4 -1%
Sales by business segments:
Modern insulins (insulin analogues) 525 479 465 411 418 363 359 311 25%
Human insulins *** 418 416 432 421 472 443 442 446 -11%
Insulin-related sales *** 60 60 59 56 57 53 54 51 4%
Oral Antidiabetic products (OAD) 68 79 71 70 68 69 65 64 1%
DIABETES CARE TOTAL 1,071 1,034 1,027 958 1,015 928 920 872 5%
NovoSeven[R] 204 191 203 189 197 186 202 170 3%
Growth hormone therapy 124 118 124 105 121 110 118 95 3%
Hormone replacement therapy 59 55 56 54 61 51 53 50 -4%
Other products 10 12 9 10 12 9 10 13 -8%
BIOPHARMACEUTICALS TOTAL 397 376 392 358 391 356 383 328 2%
Sales by geographic segments:
Europe**** 583 542 542 527 538 515 523 475 8%
North America 484 470 460 431 467 411 398 370 3%
International operations **** 238 251 262 228 227 206 221 217 5%
Japan & Oceania 163 147 155 131 174 153 162 137 -6%
Segment operating profit:
Diabetes care (10) 200 215 167 161 173 200 134 -
Diabetes care (excl. AERx[R])* 168 4%
Biopharma ceuticals 162 160 162 145 122 162 153 118 32%
*) Excluding costs related to the discontinuation of AERx[R]
**) For Q4 2007 the exact numbers of 'Average number of shares outstanding' and
'Average number of shares outstanding incl dilutive effect of options in the
money'' are 624,376,552 and 629,555,043 respectively.
***) As from Q2 2007 sales figures for Human insulins and Insulin-related sales
are presented separately. Comparative figures are adjusted accordingly.
****) Comparative figures from 2006 have been adjusted in order to reflect a
changed organisational structure from 1 January 2007 which transfers 8
countries, incl. Bulgaria and Romania, from International Operations to Europe.
ENCL 3: INCOME STATEMENT
12M 12M
DKK million 2007 2006
Sales 41,831 38,743
Cost of goods sold 9,793 9,585
GROSS PROFIT 32,038 29,158
Sales and distribution costs 12,371 11,608
Research and development costs 8,538 6,316
- Hereof costs related to discontinuation of AERx[R] (1,325) -
Administrative expenses 2,508 2,387
Licence fees and other operating income (net) 321 272
OPERATING PROFIT 8,942 9,119
OPERATING PROFIT
(EXCL. COSTS RELATED TO DISCONTINUATION OF AERX[R]) 10,267 -
Share of profit/(loss) in associated companies 1,233 (260)
Financial income 1,303 931
Financial expenses 507 626
PROFIT BEFORE INCOME TAXES 10,971 9,164
Income taxes 2,449 2,712
NET PROFIT 8,522 6,452
BASIC EARNINGS PER SHARE (DKK) 13.49 10.05
DILUTED EARNINGS PER SHARE (DKK) 13.39 10.00
SEGMENT SALES:
Diabetes care 30,478 27,866
Biopharmaceuticals 11,353 10,877
SEGMENT OPERATING PROFIT:
Diabetes care 4,259 4,982
Operating margin 14.0% 17.9%
Diabetes care (excl. AERx[R])* 5,584 -
Operating margin (excl. AERx[R])* 18.3% -
Biopharmaceuticals 4,683 4,137
Operating margin 41.2% 38.0%
*) Excluding costs related to the discontinuation of AERx[R]
ENCL 4: BALANCE SHEET
DKK million 31 Dec 2007 31 Dec 2006
ASSETS
Intangible assets 671 639
Property, plant and
equipment 19,605 20,350
Investments in associated
companies 500 788
Deferred income tax assets 2,522 1,911
Other financial assets 131 169
TOTAL LONG-TERM ASSETS 23,429 23,857
Inventories 9,020 8,400
Trade receivables 6,092 5,163
Tax receivables 319 385
Other receivables 1,493 1,784
Marketable securities and
financial derivatives 2,555 1,833
Cash at bank and in hand 4,823 3,270
TOTAL CURRENT ASSETS 24,302 20,835
TOTAL ASSETS 47,731 44,692
EQUITY AND LIABILITIES
Share capital 647 674
Treasury shares (26) (39)
Retained earnings 30,661 28,810
Other comprehensive
income 900 677
TOTAL EQUITY 32,182 30,122
Long-term debt 961 1,174
Deferred income tax
liabilities 2,346 1,998
Provision for pensions 362 330
Other provisions 1,239 911
TOTAL LONG-TERM LIABILITIES 4,908 4,413
Short-term debt and financial
derivatives 405 338
Trade payables 1,947 1,712
Tax payables 929 788
Other liabilities 4,959 4,863
Other provisions 2,401 2,456
TOTAL CURRENT LIABILITIES 10,641 10,157
TOTAL LIABILITIES 15,549 14,570
TOTAL EQUITY AND LIABILITIES 47,731 44,692
ENCL 5: CASH FLOW STATEMENT
DKK million 2007 2006
NET PROFIT 8,522 6,452
Adjustment for non-cash items:
Income taxes 2,449 2,712
Depreciation, amortisation and impairment losses 3,007 2,142
Interest income and interest expenses (16) (73)
Other adjustment for non-cash items (309) 959
Income taxes paid (2,607) (3,514)
Interest received and interest paid (net) (29) 95
CASH FLOW BEFORE CHANGE IN WORKING CAPITAL 11,017 8,773
CHANGE IN WORKING CAPITAL:
(Increase)/decrease in trade receivables and
other receivables (702) (804)
(Increase)/decrease in inventories (617) (686)
Increase/(decrease) in trade payables and
other liabilities 289 455
CASH FLOW FROM OPERATING ACTIVITIES 9,987 7,738
INVESTMENTS:
Acquisition of subsidiaries and business units (59) -
Sale of intangible assets and long-term
financial assets - 175
Purchase of intangible assets and long-term
financial assets (118) (419)
Sale of property, plant and equipment 40 111
Purchase of property, plant and equipment (2,308) (2,898)
Net change in marketable
Securities (maturity exceeding three months) (541) 514
Dividend received 1,470 -
NET CASH USED IN INVESTING ACTIVITIES (1,516) (2,517)
FINANCING:
New long-term debt - -
Repayment of long-term debt (18) (23)
Purchase of treasury shares (4,835) (3,000)
Sale of treasury shares 241 210
Dividends paid (2,221) (1,945)
CASH FLOW FROM FINANCING ACTIVITIES (6,833) (4,758)
NET CASH FLOW 1,638 463
Unrealised gain/(loss) on exchange rates
and marketable securities included in cash
and cash equivalents (6) 39
NET CHANGE IN CASH AND CASH EQUIVALENTS 1,632 502
Cash and cash equivalents at the beginning
of the year 2,985 2,483
CASH AND CASH EQUIVALENTS AT THE
END OF THE YEAR 4,617 2,985
Bonds with original term to maturity
exceeding three months 1,486 1,001
Undrawn committed credit facilities 7,457 7,456
FINANCIAL RESOURCES AT THE END OF THE YEAR 13,560 11,442
Cash flow from operating activities 9,987 7,738
+ Net cash used in investing activities (1,516) (2,517)
- Net change in marketable securities
(maturity exceeding three months) (541) 514
FREE CASH FLOW 9,012 4,707
ENCL 6: STATEMENT OF CHANGES IN EQUITY
Other comprehensive income
Exchange Deferred
Share Treasury Retained rate gain/loss on Other
DKK million capital shares earnings adjustments cash hedges adjustments TOTAL
2007
Balance at the beginning
of the year 674 (39) 28,810 156 420 101 30,122
Exchange rate adjustment of
investments in subsidiaries 53 53
Deferred (gain)/loss on cash flow
hedges at the beginning of the
year recognised in the Income
statement for the year (420) (420)
Deferred gain/(loss) on cash
flow hedges at the end of the
year 691 691
Fair value Adjustments on
financial assets available
for sale 12 12
Novo Nordisk share of equity
recognised by associated
companies (41) (41)
Tax on equity adjustments (93) (93)
Other adjustments 21 21
Net income Recognised directly
in equity for the year - - - 53 271 (101) 223
Net profit for the year 8,522 8,522
Total income for the year - - 8,522 53 271 (101) 8,745
Share-based payment 130 130
Purchase of treasury shares (16) (4,819) (4,835)
Sale of treasury shares 2 239 241
Reduction of the B share capital (27) 27 -
Dividends (2,221) (2,221)
BALANCE AT THE END OF THE YEAR 647 (26) 30,661 209 691 - 32,182
At the end of the year proposed dividends (not yet declared) of DKK 2,795
million are included in Retained earnings. No dividend is declared on treasury
shares.
Other comprehensive income
Exchange Deferred
Share Treasury Retained rate gain/loss on Other
DKK million capital shares earnings adjustments cash hedges adjustments TOTAL
2006
Balance at the beginning of
the year 709 (61) 26,962 142 (345) 227 27,634
Exchange rate adjustment of
investments in subsidiaries 14 14
Deferred (gain)/loss on cash
flow hedges at the beginning
of the year recognised in the
Income statement for the year 345 345
Deferred gain/(loss) on cash
flow hedges at the end of the
year 420 420
Fair value adjustments on
financial assets available
for sale (27) (27)
Novo Nordisk share of equity
recognised by associated
companies 36 36
Tax on equity adjustments (129) (129)
Other adjustments 5 (6) (1)
Net income recognised directly
in equity for the year - - 5 14 765 (126) 658
Net profit for the year 6,452 6,452
Total income for the year - - 6,457 14 765 (126) 7,110
Share-based payment 113 113
Purchase of treasury
shares (15) (2,985) (3,000)
Sale of treasury shares 2 208 210
Reduction of the B share
capital (35) 35 -
Dividends (1,945) (1,945)
BALANCE AT THE END OF THE YEAR 674 (39) 28,810 156 420 101 30,122
At the end of the year proposed dividends (declared in 2007) of DKK 2,221
million are included in Retained earnings. No dividend is declared on treasury
shares.
Stock Exchange Announcement no 3/2008
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf of the
undersigned, thereunto duly authorized.
Date: FEBRUARY 5, 2008 NOVO NORDISK A/S
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Lars Rebien Sorensen,
President and Chief Executive Officer