- Consolidated sales increased 20% to DKK 5,564 million. Measured in local currencies, sales increased 11%.
- Health Care sales up 23%.
- Enzyme Business sales up 8%.
- Operating profit increased 30% to DKK 1,122 million; excluding Seroxat® licence income and one-off income, the increase was 24%.
- Operating profit for Health Care rose by 32% to DKK 994 million (including Seroxat® licence income and one-off income).
- Operating profit for Enzyme Business rose 13% to DKK 128 million.
- Profit before tax and net profit increased 43% to DKK 1,087 million and 39% to DKK 686 million respectively.
- For the year 2000 the company now expects an increase in operating profit of 15-20%, assuming that currency exchange rates remain at the current level. Adjusted for Seroxat® licence income and restructuring expenses in 1999, the increase is expected to be 25-30%.
The results achieved in the first quarter of 2000 were better than expected. Operating profit was DKK 1,122 million, which represents an increase of 30%; however, excluding Seroxat® licence income and the one-off income from the settlement of patent disputes, the increase was 24%.
Profit before tax and net profit for the first quarter of 2000 were DKK 1,087 million and DKK 686 million respectively, 43% and 39% higher than in 1999.
For the two business segments Health Care and Enzyme Business, operating profit increased by 32% and 13% respectively over the first quarter of 1999. The operating profit margin for Health Care was 22.4% and for Enzyme Business 11.2%, compared with 20.9% and 10.7% respectively for the corresponding period last year.
Consolidated sales in the first quarter of 2000 were DKK 5,564 million compared with DKK 4,654 million in the same period last year, an increase of 20%. Enzyme Business sales rose by 8%, while sales were 23% higher in Health Care compared with the first quarter of last year.
Measured in local currencies, sales increased by 11% compared with the first quarter of 1999. Measured in DKK, the average value of Novo Nordisk's invoicing currencies was 9% higher in the first quarter of 2000 than in the same period last year, primarily due to a 24% appreciation of JPY against DKK and a 14% appreciation of USD against DKK.
Total licence fees and other operating income, including some one-off income, were DKK 267 million in the first quarter of 2000 compared with DKK 178 million last year.
Total costs, excluding net financials and tax, rose by 19% to DKK 4,709 million.
Production costs rose substantially less than sales due to a better product mix, while sales and distribution costs showed a strong increase, reflecting increased costs in connection with the introduction of Norditropin® SimpleXx(TM), NovoRapid® and NovoNorm® in Europe. Research and development costs and administrative costs grew less than sales.
Total depreciation increased by 8% to DKK 371 million.
Outlook for 2000
The results for the first quarter of 2000 were better than expected, primarily because of the development in the rate of exchange of JPY and USD against DKK and due to a better product mix. Additionally, Seroxat® licence income recorded in the first quarter of 2000, but partially related to final settlement of sales in 1999, was higher than expected. The company's expectations regarding operating profit growth for the full year of 2000 are therefore increased to 15-20%, assuming that currency exchange rates remain at the current level for the remainder of 2000.
The results for the first quarter of 2000 were better than expected, primarily because of the development in the rate of exchange of JPY and USD against DKK and due to a better product mix. Additionally, Seroxat® licence income recorded in the first quarter of 2000, but partially related to final settlement of sales in 1999, was higher than expected. The company's expectations regarding operating profit growth for the full year of 2000 are therefore increased to 15-20%, assuming that currency exchange rates remain at the current level for the remainder of 2000.
Expectations regarding the effective tax rate remain unchanged at 37%, while the expected level of capital expenditure has been increased to DKK 2.3 billion.
Net financial costs for the year 2000 is at the current level of currency exchange rates expected to be at the level of DKK 75 million, mainly due to losses on foreign exchange hedging activities.
Health Care
The Health Care business had a strong first quarter with a 32% increase in operating profit. Excluding Seroxat® licence income and one-off income, the increase was 26% compared to the first quarter of 1999. Operating profit was positively impacted by the development in especially the JPY and USD currencies compared to DKK, but also a better product mix improved the margins.
The Health Care business had a strong first quarter with a 32% increase in operating profit. Excluding Seroxat® licence income and one-off income, the increase was 26% compared to the first quarter of 1999. Operating profit was positively impacted by the development in especially the JPY and USD currencies compared to DKK, but also a better product mix improved the margins.
Health Care sales in the first quarter of 2000 rose by 23% to DKK 4,426 million from DKK 3,598 million in the first quarter of 1999. Volume, price and product mix improvements had a favourable impact of 13%, while currency had a positive impact of 10%.
Diabetes Care
Sales of Diabetes Care products rose by 22% to DKK 3,153 million in the first quarter of 2000. The insulin and pen products grew by 20%, while NovoNorm®/Prandin(TM) sales increased by 56%.
Sales of Diabetes Care products rose by 22% to DKK 3,153 million in the first quarter of 2000. The insulin and pen products grew by 20%, while NovoNorm®/Prandin(TM) sales increased by 56%.
Sales of insulin products in the US market increased by 37% in DKK and by 20% measured in local currency. Both vials and Penfill® sales contributed to this development. The sales and marketing agreement with Schering-Plough ended 31 March. It is expected that an additional 400 sales representatives will be rented before the end of the second quarter to market our insulin and Prandin(TM) products in the US.
Sales of NovoNorm®/Prandin(TM) were DKK 236 million compared with DKK 151 million in the first quarter of 1999. Both the US and the European sales have increased strongly. In April 2000 NovoNorm® was launched in France.
The insulin sensitiser project, NN2344, has moved into Phase 2.
As announced on 27 April, Novo Nordisk has filed a lawsuit against Aventis in Germany for patent infringement relating to the long-acting insulin analogue Lantus.
HRT
Sales of HRT products (HRT - hormone replacement therapy) rose by 4% to DKK 280 million in the first quarter of 2000. Sales were favourably affected by the launch of Activelle(TM), with some cannibalisation of the older products. Sales were negatively impacted by inventory adjustments at the wholesaler level in specific European countries.
Sales of HRT products (HRT - hormone replacement therapy) rose by 4% to DKK 280 million in the first quarter of 2000. Sales were favourably affected by the launch of Activelle(TM), with some cannibalisation of the older products. Sales were negatively impacted by inventory adjustments at the wholesaler level in specific European countries.
In March the infertility project, FF-MAS, started in clinical in vitro testing.
In April Activella(TM) received US approval for the indication of prevention of osteoporosis. The product will be marketed in the US by Pharmacia Corporation.
Growth Disorders
Sales of products within Growth Disorders (Norditropin® - human growth hormone) rose by 15% to DKK 440 million in the first quarter of 2000. The sales growth was favourably affected by the appreciation of the JPY and the successful introduction of Norditropin® SimpleXx(TM) (liquid Norditropin®) in a number of European countries.
Sales of products within Growth Disorders (Norditropin® - human growth hormone) rose by 15% to DKK 440 million in the first quarter of 2000. The sales growth was favourably affected by the appreciation of the JPY and the successful introduction of Norditropin® SimpleXx(TM) (liquid Norditropin®) in a number of European countries.
The price revision in Japan resulted in a 9% mandatory price cut of growth hormone products, of which a major part is expected to impact Novo Nordisk sales directly.
In March Norditropin® SimpleXx(TM) received approval for marketing in Japan, where it will be launched later this year.
NovoSeven®
Sales of NovoSeven® increased 68% to DKK 449 million. US sales continue to show strong growth, supported by increasing sales in Europe. NovoSeven® was launched in the US in April 1999 and hence there were no sales in the US in the first quarter of 1999. In March NovoSeven® received approval for marketing in Japan. Launch will take place later this year.
Sales of NovoSeven® increased 68% to DKK 449 million. US sales continue to show strong growth, supported by increasing sales in Europe. NovoSeven® was launched in the US in April 1999 and hence there were no sales in the US in the first quarter of 1999. In March NovoSeven® received approval for marketing in Japan. Launch will take place later this year.
Enzyme Business
Operating profit of the Enzyme Business increased by 13% to DKK 128 million. The growth rate was mainly fuelled by the appreciation of the USD currency compared to DKK, since the USD is the most important foreign currency for Enzyme Business.
Operating profit of the Enzyme Business increased by 13% to DKK 128 million. The growth rate was mainly fuelled by the appreciation of the USD currency compared to DKK, since the USD is the most important foreign currency for Enzyme Business.
Sales increased by 8% to DKK 1,138 million in the first quarter of 2000 from DKK 1,056 million in 1999. Volume, price and product mix changes outweighed each other, while currency exchange rates increased sales by 8%. The price on one older high-volume product has been reduced in order to maintain long-term volume growth.
While sales to the detergent industry were flat, sales to the starch and textile area showed growth, resulting in sales of technical enzymes in total increasing by 3%.
In the first quarter, a new product, Sweetzyme® IT, was introduced within the starch segment. In April, deliveries to Procter & Gamble of a new detergent enzyme, Mannaway(TM), for removal of food stains, have started. P&G is expected to start marketing the Mannaway(TM)-containing new detergents in the US and European markets in May-June.
Sales of enzymes to the food and feed industries showed continuing strong growth with 21% and 20% increases respectively.
In April Ronozyme® P (Bio-Feed® Phytase) received approval in the US where it opens up a new feed enzyme market.
Net financials
In the first quarter, Novo Nordisk had net financial expenses of DKK 35 million compared with DKK 106 million in the first quarter of 1999.
In the first quarter, Novo Nordisk had net financial expenses of DKK 35 million compared with DKK 106 million in the first quarter of 1999.
In the first quarter the net foreign exchange loss was DKK 62 million compared with a loss of DKK 128 million in the first quarter of 1999. The loss primarily relates to unrealised losses on hedging of Novo Nordisk's currency exposure with respect to JPY and USD. Net interest income decreased to DKK 18 million in the first quarter of 2000 from DKK 27 million last year.
The net gain on marketable securities, other financial expenses and associated companies was DKK 9 million in the first quarter of 2000 compared with a loss of DKK 5 million in the first quarter of 1999.
Holding of own shares
As of 31 March 2000, Novo Nordisk's holding of its own shares (treasury shares) was 5,514,559 B shares, corresponding to 7.31% of the total number of shares. As of 3 November 1999, on which date a new repurchasing programme of DKK 2 billion was announced, Novo Nordisk's holding of its own shares was 3,991,059 B shares. The average price of the 1,523,500 B shares purchased after that date is DKK 1,015 per share meaning that 75% of this repurchasing programme was completed at the end of March.
As of 31 March 2000, Novo Nordisk's holding of its own shares (treasury shares) was 5,514,559 B shares, corresponding to 7.31% of the total number of shares. As of 3 November 1999, on which date a new repurchasing programme of DKK 2 billion was announced, Novo Nordisk's holding of its own shares was 3,991,059 B shares. The average price of the 1,523,500 B shares purchased after that date is DKK 1,015 per share meaning that 75% of this repurchasing programme was completed at the end of March.
Due to low trading volumes the Novo Nordisk share was delisted from the SWX Swiss Exchange in Zurich, effective from 31 March 2000.
New corporate structure
The process of demerging the Enzyme Business is progressing as planned. It is still expected that Novozymes A/S, the new enzyme company, will be established around the turn of the year 2000/2001.
The process of demerging the Enzyme Business is progressing as planned. It is still expected that Novozymes A/S, the new enzyme company, will be established around the turn of the year 2000/2001.
The company is awaiting a private letter ruling on the demerger from the US tax authorities.
ZymoGenetics
It has been decided to initiate a private placement of newly issued shares for the currently wholly-owned biotechnology company ZymoGenetics, Seattle, Washington, US; if the market conditions are acceptable to Novo Nordisk, the private placement will be completed in the second half of 2000. President and CEO of ZymoGenetics is Bruce Carter.
It has been decided to initiate a private placement of newly issued shares for the currently wholly-owned biotechnology company ZymoGenetics, Seattle, Washington, US; if the market conditions are acceptable to Novo Nordisk, the private placement will be completed in the second half of 2000. President and CEO of ZymoGenetics is Bruce Carter.
Boards of directors and executive management teams for Novo Nordisk and Novozymes after the demerger
At the extraordinary general meeting planned to be held around the turn of the year 2000/2001 for the purpose of obtaining approval of Novo Nordisk's demerger, new boards of directors of Novo Nordisk and Novozymes are expected to be elected as follows:
At the extraordinary general meeting planned to be held around the turn of the year 2000/2001 for the purpose of obtaining approval of Novo Nordisk's demerger, new boards of directors of Novo Nordisk and Novozymes are expected to be elected as follows:
Novo Nordisk A/S - the Health Care company:
Mads Øvlisen, director (chairman)
Kurt Anker Nielsen, president, Novo A/S, Denmark (vice chairman)
Ulf J Johansson, founder and chairman of Europolitan Holdings AB, Sweden
Kurt Briner, former president & CEO of Sanofi Pharma, France
Niels Jacobsen, president & CEO, Oticon / William Demant Holding, Denmark
Jørgen Wedel, executive vice president, Gillette Corp, US.
Mads Øvlisen, director (chairman)
Kurt Anker Nielsen, president, Novo A/S, Denmark (vice chairman)
Ulf J Johansson, founder and chairman of Europolitan Holdings AB, Sweden
Kurt Briner, former president & CEO of Sanofi Pharma, France
Niels Jacobsen, president & CEO, Oticon / William Demant Holding, Denmark
Jørgen Wedel, executive vice president, Gillette Corp, US.
Novozymes A/S:
Henrik Gürtler, president, Novo A/S, Denmark (chairman)
Kurt Anker Nielsen, president, Novo A/S, Denmark (vice chairman)
Paul Petter Aas, president, Hydro Agri, Norway
Jerker Hartwall, executive vice president and president, Perstorp, Sweden
Walter Thygesen, managing director and regional vice president, Compaq, Denmark
Hans Werdelin, director, Denmark.
Henrik Gürtler, president, Novo A/S, Denmark (chairman)
Kurt Anker Nielsen, president, Novo A/S, Denmark (vice chairman)
Paul Petter Aas, president, Hydro Agri, Norway
Jerker Hartwall, executive vice president and president, Perstorp, Sweden
Walter Thygesen, managing director and regional vice president, Compaq, Denmark
Hans Werdelin, director, Denmark.
Until the extraordinary general meeting these two boards will act as advisory boards to the respective management teams of the two businesses: Health Care and Enzyme Business. After the extraordinary general meeting the board of Novozymes A/S will also be supplemented with board members elected by the employees.
After the demerger, the executive management teams of Novo Nordisk and Novozymes will consist of:
Novo Nordisk A/S:
Lars Rebien Sørensen, president and CEO
Jesper Brandgaard, Finance
Lars Almblom Jørgensen, Operations
Kåre Schultz, Staffs and Quality
Mads Krogsgaard Thomsen, Research and Development
Lars Rebien Sørensen, president and CEO
Jesper Brandgaard, Finance
Lars Almblom Jørgensen, Operations
Kåre Schultz, Staffs and Quality
Mads Krogsgaard Thomsen, Research and Development
Novozymes A/S:
Steen Riisgaard, president and CEO
Per Falholt, Research and Development
Per Månsson, Finance, IT & Legal
Peder Holk Nielsen, Sales and Marketing
Arne Schmidt, Production and Procurement
Steen Riisgaard, president and CEO
Per Falholt, Research and Development
Per Månsson, Finance, IT & Legal
Peder Holk Nielsen, Sales and Marketing
Arne Schmidt, Production and Procurement
Forward-looking statements
The above sections contain forward-looking statements as the term is defined in the US Private Securities Litigation Reform Act of 1995.
The above sections contain forward-looking statements as the term is defined in the US Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to risk and uncertainties that may cause actual results to differ materially from expectations, including unexpected developments in the international currency exchange and securities markets, government-mandated or market-driven price decreases for Novo Nordisk's products in the company's major markets and the introduction of competing products within Novo Nordisk's core businesses.
These and other risks and uncertainties are further described in reports filed with the US Securities and Exchange Commission (SEC) by Novo Nordisk and readily available to the public, including the company's Form 20-F, which was filed on 2 May 2000.
In addition to the risk factors described in the company's Form 20-F, the economic situation in Asia, Russia and Latin America could have an adverse impact on unit sales and/or prices, including currency exchange rates, in 2000. The total group sales in Asia (excluding Japan), Russia and Latin America were approximately DKK 2 billion in 1999 corresponding to 10% of total group sales.
Bagsværd, 3 May 2000
The Board of Directors
Novo Nordisk A/S
Novo Nordisk A/S
For further information please contact:
Media:
Outside North America:
Søren Møller Christensen
Phone (direct) : (+45) 4442 1207
Søren Møller Christensen
Phone (direct) : (+45) 4442 1207
In North America:
Susan Toth Jackson
Phone: (+1) 212-867-0123
Susan Toth Jackson
Phone: (+1) 212-867-0123
Investors:
Outside North America:
Michael Steen-Knudsen
Phone (direct): (+45) 4442 6048
Michael Steen-Knudsen
Phone (direct): (+45) 4442 6048
Carsten Bøss
Phone: (direct) (+45) 4442 6047
Phone: (direct) (+45) 4442 6047
In North America:
Peter Lundby Hansen
Phone: (direct) (+1) 212-878-9607
Peter Lundby Hansen
Phone: (direct) (+1) 212-878-9607
