Novo Nordisk consolidated:
- Consolidated sales increased 22% to DKK 18,644 million, of which 10% is due to increase in currencies.
- Operating profit increased 37% to DKK 4,042 million.
- Profit before tax and net profit increased 43% to DKK 3,918 million and 42% to DKK 2,468 million, respectively.
- Assuming exchange rate levels remain at the present level for the rest of the year, the operating profit growth for the present Novo Nordisk is now expected to be around 30% for the full year.
- Novozymes is expected to be demerged from Novo Nordisk A/S on 13 November.
Novozymes:
- Novozymes sales increased 13% to DKK 3,738 million, of which 8% is due to increase in currencies.
- Operating profit increased 24% to DKK 585 million.
- Profit before tax and net profit increased 10% to DKK 490 million and 9% to DKK 332 million, respectively.
- Assuming that the sales growth in local currencies will be 4-5% for the full year relative to 1999 and that exchange rate levels remain at the present levels for the rest of 2000, Novozymes expects operating profit for the full year of 2000 to increase around 20% relative to 1999.
Novo Nordisk Health Care:
- Health Care sales increased 24% to DKK 14,936 million, of which 10% is due to increase in currencies.
- Operating profit increased 40% to DKK 3,457 million.
- Profit before tax and net profit both increased 49% to DKK 3,430 million and DKK 2,136 million, respectively.
- Assuming exchange rate levels remain at the present levels for the rest of 2000, Novo Nordisk Health Care operating profit growth is expected to be up to 35%.
Novo Nordisk consolidated
The results achieved in the first nine months of 2000 were better than expected. Operating profit was DKK 4,042 million. Compared with the first nine months of 1999, this represents an increase of 37%; however, if adjusted for one-time items and Seroxat® royalty income in both years, the increase was 40%.
Profit before tax and net profit for the first nine months of 2000 were DKK 3,918 million and DKK 2,468 million, respectively, 43% and 42% higher than in 1999. Compared with the corresponding results for the first nine months of 1999 adjusted as mentioned above, profit before tax and net profit increased 46% and 45%, respectively.
Consolidated sales in the first nine months of 2000 were DKK 18,644 million, an increase of 22%. Measured in local currencies, the increase was 12%. Health Care sales rose 24%, while Novozymes sales rose 13% compared with the first nine months of 1999.
Future company structure
An extraordinary general meeting will take place on 13 November 2000, when the shareholders will decide on the proposed demerger with retroactive accounting effect from 1 January 2000. The Health Care business will remain in the continuing company (Novo Nordisk A/S), while Enzyme Business will be spun off in a new company called Novozymes A/S.
An extraordinary general meeting will take place on 13 November 2000, when the shareholders will decide on the proposed demerger with retroactive accounting effect from 1 January 2000. The Health Care business will remain in the continuing company (Novo Nordisk A/S), while Enzyme Business will be spun off in a new company called Novozymes A/S.
On 16 October a demerger document was published describing the demerger process and the two stand-alone businesses.
Holding of own B shares
As of 2 November 2000, Novo Nordisk's consolidated holding of its own shares (treasury shares) was 6,173,809 B shares, corresponding to 8.2% of the total number of shares at the end of 1999. Following the approval of the demerger, Novozymes A/S will own 180,000 of these B shares to cover the existing share option obligations to Novozymes employees.
As of 2 November 2000, Novo Nordisk's consolidated holding of its own shares (treasury shares) was 6,173,809 B shares, corresponding to 8.2% of the total number of shares at the end of 1999. Following the approval of the demerger, Novozymes A/S will own 180,000 of these B shares to cover the existing share option obligations to Novozymes employees.
Outlook for 2000
Assuming that the exchange rate levels remain at the present levels for the rest of 2000, Novo Nordisk now expects an operating profit growth for 2000 at around 30%, an upgrade from around 25% expected in August this year, due to more favourable currency rates as well as an improved underlying business performance.
Assuming that the exchange rate levels remain at the present levels for the rest of 2000, Novo Nordisk now expects an operating profit growth for 2000 at around 30%, an upgrade from around 25% expected in August this year, due to more favourable currency rates as well as an improved underlying business performance.
This nine-month release is expected to be the last release based on the consolidated Novo Nordisk accounts, and as a result of this, the outlooks for each of the two businesses are to be found in the separate sections below.
Novozymes (Enzyme Business activities only)
Operating profit for Novozymes (Enzyme Business) increased by 24% to DKK 585 million compared with DKK 472 million for the nine months of 1999. The growth rate was mainly fuelled by the appreciation of the company's most important currencies compared to DKK. The operating margin increased from 14.2% to 15.7% for the nine-month period of 2000.
Sales increased by 13% to DKK 3,738 million from DKK 3,313 million in the same period of 1999. Volume, price and product mix contributed with a 5 percentage-point increase, while changes in currency exchange rates increased sales by 8 percentage points. Sales in the third quarter of 2000 were positively impacted by some inventory build-up within the detergent industry and the positive seasonality impact from the wine and juice industry.
Sales of technical enzymes increased by 9%. Sales to the detergent industry are slowly improving due to the introduction of Mannaway(TM) earlier in 2000. Sales of other technical enzymes, including enzymes to the textile and starch/fuel alcohol industries, increased by 23%.
Sales of enzymes to the food industries showed strong growth of 21%. Specifically the baking and beverage segments contributed to the sales growth.
The animal feed enzyme sales continued to perform strongly with a 29% increase.
Ronozyme(TM) P has been introduced on the US market at the beginning of the fourth quarter.
Ronozyme(TM) P has been introduced on the US market at the beginning of the fourth quarter.
During the first nine months of 2000, five new products have been introduced, of which two new products in the third quarter: Lecitase(TM) Novo for the fats and oil industry, to be used in the production of cooking oil, and a new AMG(TM) for starch degrading to the starch/fuel alcohol industry.
As a result of change in product mix and generally improved production efficiency, production costs increased at a lower rate than sales. Sales and distribution, research and development and administrative costs as a whole rose at the same rate as sales.
Licence fees and other operating income were DKK 7 million in the first nine months of 2000 compared with DKK 3 million last year.
In October 2000 Novozymes granted the pharmaceutical company Merck KGaA a worldwide and non-exclusive licence to a certain patent family within the field of low-allergenic protein techniques. The financial terms of the agreement will not be disclosed.
Total depreciation, which is included in the respective cost items, increased 5% to DKK 366 million.
Net financials
In the first nine months of 2000, Novozymes had net financial expenses of DKK 95 million compared with net financial expenses of DKK 28 million in the first nine months of 1999.
In the first nine months of 2000, Novozymes had net financial expenses of DKK 95 million compared with net financial expenses of DKK 28 million in the first nine months of 1999.
The company had a net foreign exchange loss of DKK 60 million compared with a gain of DKK 17 million in the first nine months of 1999. The net foreign exchange loss is primarily due to realised and unrealised losses on hedging of Novozymes' currency exposure with respect to USD.
Net interest expenses increased to DKK 61 million from DKK 46 million last year, primarily due to the general increase in interest rates.
Other financial items were positive with DKK 26 million compared to DKK 1 million last year, due to sales of marketable securities this year.
Legal dispute
On 22 August 2000 a court in São Paulo, Brazil issued a decision formally seizing Novo Nordisk's assets in Brazil. The reasoning behind this decision was an alleged 'association' with one of the company's former enzyme distributors that was declared bankrupt in 1999. The decision was immediately appealed and before it could be enforced against the company, it was suspended by the Court of Appeals in São Paulo, thus allowing the company to continue its Brazilian operations without interruptions. The management of Novozymes believes that there is no merit to the case and the company will pursue its rights rigorously.
On 22 August 2000 a court in São Paulo, Brazil issued a decision formally seizing Novo Nordisk's assets in Brazil. The reasoning behind this decision was an alleged 'association' with one of the company's former enzyme distributors that was declared bankrupt in 1999. The decision was immediately appealed and before it could be enforced against the company, it was suspended by the Court of Appeals in São Paulo, thus allowing the company to continue its Brazilian operations without interruptions. The management of Novozymes believes that there is no merit to the case and the company will pursue its rights rigorously.
Outlook for 2000
Assuming that sales growth measured in local currencies will be 4-5% for the full year relative to 1999 and that exchange rates remain at the present levels for the rest of 2000, Novozymes expects operating profit for 2000 to increase around 20% relative to 1999.
Assuming that sales growth measured in local currencies will be 4-5% for the full year relative to 1999 and that exchange rates remain at the present levels for the rest of 2000, Novozymes expects operating profit for 2000 to increase around 20% relative to 1999.
Assuming that the currency exchange rate levels remain unchanged for the rest of 2000, Novozymes expects net financials to be negative at the level of DKK 130 million.
The effective tax rate for the full year is expected to be at the level of 32%.
Capital expenditure for property, plant and equipment in 2000 is expected to be at a lower level than depreciation for the full year.
Listing of Novozymes A/S
It is expected that the shares of Novozymes A/S will be listed on the Copenhagen Stock Exchange on 17 November.
It is expected that the shares of Novozymes A/S will be listed on the Copenhagen Stock Exchange on 17 November.
Novo Nordisk (Health Care only)
Novo Nordisk Health Care (HC) continued the positive development in the third quarter of 2000, and operating profit in the first nine months of 2000 increased by 40% compared to the same period in 1999. Excluding one-time items, the increase was 43%. Operating profit was positively impacted by the development in especially JPY and USD compared to DKK, but also by a better product mix.
Operating margin increased from 20.5% in the first nine months of 1999 to 23.1% in the same period in 2000, or from 18.0% to 20.8% if adjusted for the above-mentioned one-time items.
Health Care sales increased by 24% to DKK 14,936 million in the first nine months of 2000 from DKK 12,030 million in the first nine months of 1999. In the first nine months of 2000 US sales increased by 59% to DKK 2,589 million and now represent 17% of the total Health Care sales.
Price, volume and product mix improvements had a favourable impact on total sales of 14%, while currency had a positive impact of 10%.
Total licence fees and other operating income were DKK 531 million in the first nine months of 2000 compared with DKK 666 million in the same period last year. Licence fees and other operating income in 2000 includes income from settlement of patent disputes and outlicensing of the HRT portfolio in the US, and both years include Seroxat® licensing income, although at a significant lower level in 2000 than in 1999.
Total costs, excluding net financials and tax, rose 17% to DKK 12,012 million.
Production costs increased at a lower rate than sales while sales and distribution costs rose at a rate similar to that of sales, especially reflecting major costs in connection with product introductions. Research and development costs also increased in line with sales whereas administrative expenses increased less.
Total depreciation, which is included in the respective cost items, increased 8% to DKK 769 million.
Diabetes Care
Sales of Diabetes Care products rose by 21% to DKK 10,534 million in the first nine months of 2000. Insulin and pen products grew by 19%, while NovoNorm®/Prandin(TM) sales increased by 56%.
Sales of Diabetes Care products rose by 21% to DKK 10,534 million in the first nine months of 2000. Insulin and pen products grew by 19%, while NovoNorm®/Prandin(TM) sales increased by 56%.
Sales of insulin products in the US market increased by 33% in DKK and by 16% measured in USD. As of 1 November the total number of sales representatives in the US has reached approximately 600.
It is now expected that NovoLog® (rapid-acting insulin analogue) will be launched in the US market in 2001.
Sales of NovoNorm®/Prandin(TM) were DKK 785 million
compared with DKK 503 million in the first nine months of 1999. Both US and European sales increased.
In the third quarter of 2000, the development project NN414 moved into Phase 1 clinical testing. The substance will be tested for its effect on insulin secretion.
NovoSeven®
Sales of NovoSeven® increased by 67% to DKK 1,590 million. US sales continue to show strong growth, supported by increasing sales in Europe and Japan.
Sales of NovoSeven® increased by 67% to DKK 1,590 million. US sales continue to show strong growth, supported by increasing sales in Europe and Japan.
A study of the use of NovoSeven® in orthotopic liver transplantation has been finalised. The study confirmed the good safety profile of NovoSeven® and studies aimed at optimising the dosing requirements will continue.
Growth Disorders
Sales of products within Growth Disorders (Norditropin® - human growth hormone) rose by 22% to DKK 1,493 million in the first nine months of 2000. The sales growth was favourably affected by the appreciation of the JPY. The roll-out of Norditropin® SimpleXx®, the first liquid growth hormone in a dedicated pen device, continues to be in alignment with the ambitious plans.
Sales of products within Growth Disorders (Norditropin® - human growth hormone) rose by 22% to DKK 1,493 million in the first nine months of 2000. The sales growth was favourably affected by the appreciation of the JPY. The roll-out of Norditropin® SimpleXx®, the first liquid growth hormone in a dedicated pen device, continues to be in alignment with the ambitious plans.
In October Norditropin® SimpleXx® (Norditropin® cartridge in the US) was launched in the US.
HRT
Sales of HRT products (HRT - hormone replacement therapy) increased by 13% to DKK 932 million in the first nine months of 2000.
Sales of HRT products (HRT - hormone replacement therapy) increased by 13% to DKK 932 million in the first nine months of 2000.
Net financials
In the first nine months of 2000, Novo Nordisk (HC) had net financial expenses of DKK 27 million compared with net financial expenses of DKK 173 million in the first nine months of 1999.
In the first nine months of 2000, Novo Nordisk (HC) had net financial expenses of DKK 27 million compared with net financial expenses of DKK 173 million in the first nine months of 1999.
Novo Nordisk (HC) had a net foreign exchange loss of DKK 99 million compared with a loss of DKK 294 million in the first nine months of 1999. The net foreign exchange losses are primarily due to realised and unrealised losses on hedging of Novo Nordisk's (HC) currency exposure with respect to USD and JPY.
Net interest income decreased DKK 17 million to DKK 79 million.
Outlook for 2000
Assuming that exchange rate levels remain at the present levels for the rest of 2000, Novo Nordisk (HC) expects operating profit for 2000 to increase up to 35% relative to 1999.
Assuming that exchange rate levels remain at the present levels for the rest of 2000, Novo Nordisk (HC) expects operating profit for 2000 to increase up to 35% relative to 1999.
Net financial costs are expected to be at the level of DKK 25 million for the full year.
The effective tax rate for the first nine months of 2000 is 37.7%. For the full year, the tax rate is expected at the level of 38%.
Novo Nordisk (HC) expects capital expenditure for property, plant and equipment in 2000 of up to DKK 2 billion.
ZymoGenetics
Earlier in 2000 Novo Nordisk announced its intentions to complete a private placement of shares in ZymoGenetics before the end of 2000. On 23 October it was announced that such a transaction was completed through the signing of a USD 150 million private placement into ZymoGenetics from a consortium led by E M Warburg, Pincus & Co, LLC.
Earlier in 2000 Novo Nordisk announced its intentions to complete a private placement of shares in ZymoGenetics before the end of 2000. On 23 October it was announced that such a transaction was completed through the signing of a USD 150 million private placement into ZymoGenetics from a consortium led by E M Warburg, Pincus & Co, LLC.
As a result Novo Nordisk now controls less than 50% of the votes in ZymoGenetics, but the company maintains an option to take out rights to product candidates within diabetes worldwide and rights outside North America to product candidates in other therapeutic categories.
The required clearance has just been received from the US antitrust authorities so that the transaction can now be concluded.
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, 2 November 2000
The Board of Directors
Novo Nordisk A/S
Novo Nordisk A/S
For further information please contact:
Media
Health Care Investors
Health Care
Health Care Investors
Health Care
Outside North America :
Karsten Madsen
Tel (direct): (+45) 4442 4137
Karsten Madsen
Tel (direct): (+45) 4442 4137
Outside North America :
Peter Haahr
Tel (direct): (+45) 4442 1207
Peter Haahr
Tel (direct): (+45) 4442 1207
Outside North America :
Rasmus Holm-Jørgensen
Tel (direct): (+45) 4442 2983
In North America:
Brian Zignego
Tel: (+1) 212-867-0123
Rasmus Holm-Jørgensen
Tel (direct): (+45) 4442 2983
In North America:
Brian Zignego
Tel: (+1) 212-867-0123
In North America:
Rasmus Holm-Jørgensen
(direct): (+1) 212-878-9607
Novozymes
Eva Louise Holm Petersen
Tel (direct): (+45) 4442 3338
Rasmus Holm-Jørgensen
(direct): (+1) 212-878-9607
Novozymes
Eva Louise Holm Petersen
Tel (direct): (+45) 4442 3338
Michael Steen-Knudsen
Tel (direct): (+45) 4442 6048
Tel (direct): (+45) 4442 6048