Financial statement for the period 1 January 2008 to 31 March 2008
Novo Nordisk increased first quarter operating profit by 22%
Gross margin improved by 0.9 percentage points, despite adverse
currency development
Novo Nordisk increased sales by 15% in local currencies and by 8% in
Danish kroner due to a significant negative currency development.
o Sales of modern insulins increased by 33% (25% in Danish
kroner).
o Sales of NovoSeven® increased by 10% (2% in Danish kroner).
o Sales of Norditropin® increased by 17% (12% in Danish
kroner).
o Sales in North America increased by 21% (7% in Danish
kroner).
o Sales in International Operations increased by 32% (24% in
Danish kroner).
* Gross margin increased by 0.9 percentage points to 77.3% in the
first three months of 2008, reflecting continued productivity
improvements being partly counterbalanced by the adverse currency
development.
* Operating profit increased by 22% to DKK 2,829 million. Adjusted
for the impact from currencies, underlying operating profit
increased by around 35%.
* Net profit increased by 28% to DKK 2,180 million. Earnings per
share (diluted) increased by 30% to DKK 3.48.
* As a result of increased safety concerns surrounding pulmonary
delivery of insulin in general, Novo Nordisk has now decided to
discontinue the remaining pulmonary delivery projects, and the
expected level of non-recurring costs in 2008 is consequently now
expected to be DKK 500 million.
* For 2008, reported operating profit is now expected to grow by
slightly more than 20% as an improved gross margin only partly
compensates for the adverse currency development and the
increased level of non-recurring costs in relation to the
discontinuation of all pulmonary diabetes projects. Reflecting
primarily the improved gross margin, the guidance for growth in
underlying operating profit, adjusted for the impact from
currencies and non-recurring items, has been increased to close
to 25%.
Lars Rebien Sørensen, president and CEO, said: "The solid momentum in
our business is maintained in the first quarter of 2008, despite the
continued depreciation of key invoicing currencies. We are especially
satisfied with the robust sales growth for our modern insulins in the
major markets and the sustainable improvement in our gross margin."
Financial statement for the first three months of 2008
This interim report has been prepared in accordance with
International Financial Reporting Standards (IFRS). The accounting
policies used in the interim report are consistent with those used in
the Annual Report 2007. The interim report has not been audited.
Amounts in DKK million, except average number of shares outstanding,
earnings per share and full-time employees.
% change Q1
2007 to Q1
Income statement Q1 2008 Q1 2007 2008
Sales 10,614 9,818 8%
Gross profit 8,201 7,498 9%
Gross margin 77.3% 76.4%
Sales and distribution costs 2,975 3,048 (2%)
Percent of sales 28.0% 31.0%
Research and development 1,858 1,647 13%
costs
- hereof costs related to 220 - -
discontinuation of AERx®
iDMS
Percent of sales 17.5% 16.8%
Administrative expenses 627 614 2%
Percent of sales 5.9% 6.3%
Licence fees and other 88 138 (36%)
operating income
Operating profit 2,829 2,327 22%
Operating margin 26.7% 23.7%
Net financials 39 47 (17%)
Profit before tax 2,868 2,374 21%
Net profit 2,180 1,709 28%
Net profit margin 20.5% 17.4%
Other key numbers
Depreciation, amortisation 563 509 11%
and impairment losses
Capital expenditure 214 444 (52%)
Cash flow from operating 3,070 2,551 20%
activities
Free cash flow 2,795 2,100 33%
Total assets 47,534 44,742 6%
Equity 31,251 29,676 5%
Equity ratio 65.7% 66.3%
Average number of shares
outstanding (million) -
diluted 626.3 639.4 (2%)
Diluted earnings per share 3.48 2.68 30%
(in DKK)
Full-time employees at the 25,765 24,045 7%
end of the period
Sales development by segments
Sales increased by 15% 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 the modern insulins.
Sales Growth Growth Share of
Q1 2008 as in local growth
DKK reported currencies in local
million currencies
The diabetes care segment
Modern insulins 3,821 25% 33% 70%
Human insulins 2,939 (6%) (2%) (5%)
Insulin-related sales 443 6% 10% 3%
Oral antidiabetic products 640 22% 32% 12%
Diabetes care - total 7,843 10% 16% 80%
The biopharmaceuticals segment
NovoSeven® 1,440 2% 10% 10%
Growth hormone therapy 878 12% 17% 10%
Other products 453 (6%) 1% 0%
Biopharmaceuticals - total 2,771 4% 11% 20%
Total sales 10,614 8% 15% 100%
Sales development by regions
In the first three months of 2008, sales growth was realised in all
regions. The main contributors to growth were North America and
International Operations providing 48% and 38%, respectively, of the
total sales growth measured in local currencies. Europe contributed
12% and Japan & Oceania 2% of the sales growth.
Sales in International Operations in the first quarter of 2008 were
positively impacted by the timing of tender sales compared to the
first three months of 2007.
Diabetes care
Sales of diabetes care products increased by 16% measured in local
currencies and by 10% in Danish kroner to DKK 7,843 million compared
to the first three months of 2007.
Modern insulins, human insulins and insulin-related products
Sales of modern insulins, human insulins and insulin-related products
in the first three months of 2008 increased by 15% measured in local
currencies and by 9% in Danish kroner to DKK 7,203 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 52% of the
total insulin market and 43% of the modern insulin market, both
measured by volume.
Sales of modern insulins increased by 33% in local currencies and by
25% in Danish kroner to DKK 3,821 million with Levemir® contributing
the highest share of growth and increasing by 70% compared to the
first three months of 2007. All regions realised solid growth rates,
with North America and Europe as the primary contributors to growth.
Sales of modern insulins now constitute 57% of Novo Nordisk's sales
of insulin.
North America
Sales in North America increased by 27% in local currencies in the
first three months of 2008 and by 12% in Danish kroner, reflecting a
solid penetration of the modern insulins Levemir®, NovoLog® and
NovoLog® Mix 70/30. Novo Nordisk maintains its leadership position in
the US insulin market with 42% of the total insulin market and 31% of
the modern insulin market, both measured by volume. Currently, more
than 35% of Novo Nordisk's modern insulin volume in the US is being
sold in FlexPen®.
Europe
Sales in Europe increased by 6% in local currencies and 4% measured
in Danish kroner, reflecting continued progress for the portfolio of
modern insulins. Novo Nordisk holds 56% of the total insulin market
and 51% of the modern insulin market, both measured by volume, and is
capturing the main share of growth in the modern insulin market.
International Operations
Sales within International Operations increased by 22% in local
currencies and by 15% in Danish kroner. The main contributor to
growth in the first three months of 2008 was sales of modern
insulins, primarily in Turkey and China. Furthermore, sales of human
insulins continue to add to overall growth in the region, also driven
by China, and hence China continues to be the key contributor to
growth in International Operations.
Japan & Oceania
Sales in Japan & Oceania increased by 6% in local currencies and by
5% measured in Danish kroner. The sales development reflects sales
growth for the modern insulins NovoRapid® and NovoRapid Mix® 30 as
well as for Levemir® which was launched in Japan in December 2007. At
this early point in the launch, Levemir® shows a very solid
penetration with a current volume market share of more than 10% of
the long-acting insulin market in Japan. Novo Nordisk holds 73% of
the total insulin market in Japan and 64% of the modern insulin
market, both measured by volume.
Oral antidiabetic products (NovoNorm®/Prandin®)
In the first three months of 2008, sales of oral antidiabetic
products increased by 32% in local currencies and by 22% in Danish
kroner to DKK 640 million compared to the same period in 2007. This
primarily reflects increased sales in International Operations,
mainly due to earlier timing of sales to China.
Biopharmaceuticals
In the first quarter of 2008, sales of biopharmaceutical products
increased by 11% measured in local currencies and by 4% measured in
Danish kroner to DKK 2,771 million compared to the first three months
of 2007.
NovoSeven®
Sales of NovoSeven® increased by 10% in local currencies and by 2% in
Danish kroner to DKK 1,440 million compared to the first three months
of 2007. Sales growth for NovoSeven® was primarily realised in
International Operations due to the timing of tender sales compared
to last year, and in North America. The sales growth for NovoSeven®
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®)
Sales of Norditropin® (ie growth hormone in a liquid, ready-to-use
formulation) increased by 17% measured in local currencies and by 12%
measured in Danish kroner to DKK 878 million. Growth was realised in
all regions with North America as the primary contributor to growth.
Novo Nordisk continues to gain market share in the growth hormone
market and is the second-largest company in this market with a global
market share of 23% measured by volume.
Other products
Sales of other products within biopharmaceuticals, which
predominantly consist of hormone replacement therapy (HRT)-related
products, increased by 1% in local currencies and decreased by 6% in
Danish kroner to DKK 453 million. This development reflects modest
sales growth in the US market partly countered by declining sales in
a contracting European HRT market.
Costs, licence fees and other operating income
The cost of goods sold was DKK 2,413 million in the first three
months of 2008, representing a gross margin of 77.3% compared to
76.4% in the same period last year. This improvement reflects
improved production efficiency and higher average prices in the US.
The gross margin was negatively impacted by around 1 percentage
point, due to currency developments, primarily the lower value of the
US dollar and the British pound versus the Danish krone compared to
the first three months of 2007.
In the first three months of 2008, total non-production-related costs
increased by 3% to DKK 5,460 million compared to the same period last
year. Sales and distribution costs decreased by 2% primarily
reflecting a provision related to an antidumping case in Brazil
recorded in the first quarter of 2007, partly countered by higher
costs related to the expanded sales force in the US. Research and
development costs increased by 13% reflecting the non-recurring costs
related to the discontinuation of AERx® iDMS.
Licence fees and other operating income of DKK 88 million in the
first three months of 2008 represent a decrease of 36% compared to
the same period last year, which was positively impacted by a
non-recurring income from to the out-licensing of an oral
antidiabetic compound.
Net financials
Net financials showed a net income of DKK 39 million in the first
three months of 2008 compared to a net income of DKK 47 million in
the same period last year.
Included in net financials is the result from associated companies
with an expense of DKK 67 million, primarily related to Novo
Nordisk's share of losses in ZymoGenetics, Inc. In the same period of
2007, the result from associated companies was an expense of DKK 60
million.
The foreign exchange result was an income of DKK 70 million compared
to an income of DKK 197 million in the same period of 2007. This
development reflects gains on foreign exchange hedging activities due
to the lower value of especially US dollars versus Danish kroner
partly offset by losses on commercial balances in primarily
non-hedged emerging markets currencies. Foreign exchange hedging
gains of around DKK 1 billion as per 31 March 2008 have been deferred
for future income recognition, hereof approximately DKK 200 million
for income recognition in 2009.
Outlook 2008
Novo Nordisk now expects a sales growth of 10-13% measured in local
currencies for 2008 compared to the previous expectation of a sales
growth slightly above 10%. 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 now expected to be around 6 percentage points lower than the
growth rate measured in local currencies.
The expectation for growth in reported operating profit for 2008 is
now slightly more than 20% as expectations for improvements in the
gross margin only partly are able to offset an increased negative
currency impact of around 5 percentage points compared to the 2008
guidance provided on 31 January 2008 in connection with the release
of the results for the financial year 2007. This expectation includes
a revised estimate of non-recurring costs in relation to the
discontinuation of all pulmonary delivery projects of DKK 500 million
in 2008 compared to the previous estimate of DKK 300 million for the
discontinuation of the AERx® iDMS inhaled insulin project.
Adjusted for the impact from currency and the non-recurring costs
related to the discontinuation of all pulmonary delivery projects in
2007 and 2008, underlying operating profit is now expected to grow by
close to 25% compared to the previous estimate of at least 20%
growth.
For 2008, Novo Nordisk now expects a net financial income of DKK 600
million, reflecting significant foreign exchange hedging gains,
primarily related to the US dollar.
The effective tax rate for 2008 is still expected to be approximately
24%.
Capital expenditure is now expected to be around DKK 2 billion in
2008. Expectations for depreciations, amortisation and impairment
losses are still around DKK 2.5 billion, whereas free cash flow is
now expected to be around DKK 8 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.
Novo Nordisk has hedged expected net cash flows in relation to US
dollars, Japanese yen and British pounds for 18, 14 and 10 months,
respectively. The financial impact from foreign exchange hedging is
included in 'Net financials'.
Research and development update
Diabetes care
The data to be included in the liraglutide regulatory dossiers that
will be submitted to the FDA and EMEA has recently been discussed
with the US and EU regulatory authorities. Based on this, Novo
Nordisk still expects to file for regulatory approval of liraglutide
in the US and EU before the end of the second quarter of 2008. The
filing for regulatory approval of liraglutide in Japan is still
expected to take place in the third quarter of 2008.
At the annual meeting of the American Diabetes Association (ADA) to
be held in San Francisco on 6-10 June 2008, Novo Nordisk expects to
present detailed results from the global phase 3a programme with
liraglutide.
As communicated on 14 January 2008, Novo Nordisk has refocused its
clinical development activities within inhaled insulin and
discontinued the development of AERx® iDMS, an inhaled fast-acting
insulin. At the time of discontinuation of AERx® iDMS, specific
safety concerns were not apparent and Novo Nordisk announced that R&D
activities within inhalation of long-acting insulin and GLP-1 would
continue. Following recent reports of lung cancer cases in type 2
diabetes patients treated with Exubera®, an inhaled insulin product
from Pfizer, the likelihood of achieving a positive benefit:risk
ratio for future pulmonary diabetes projects has become more
uncertain and Novo Nordisk has consequently decided to stop all R&D
activities in the field. As a consequence of this decision, Novo
Nordisk will discontinue all pulmonary delivery projects in Denmark,
as well as at the pulmonary R&D centre in Hayward, California. This
decision will increase the non-recurring costs for 2008 relating to
the discontinuation of the pulmonary delivery projects from a
previous estimate of DKK 300 million related to the phase 3 AERx®
iDMS project to a revised estimate of DKK 500 million for the
discontinuation of the total pulmonary delivery project portfolio.
Research at Novo Nordisk in Denmark will continue to focus on
injection-based delivery and alternative non-invasive approaches to
delivery of insulin, GLP-1 and other therapeutic proteins.
The results from a comparative study of dosing accuracy of Levemir®
FlexPen® and Lantus® SoloStar® was recently published in Current
Medical Research & Opinion. The study investigated the dosing
accuracy at 5, 10 and 30 unit dose levels for both insulin delivery
devices. At all doses investigated in the study, FlexPen® was
reported to be more accurate, and the differences in accuracy between
the two pens were statistically significant at all doses tested.
Biopharmaceuticals
On 25 April, Novo Nordisk received marketing authorisation from the
European Commission for the room temperature stable version of
NovoSeven®. A room temperature stable product is expected to deliver
significant patient benefits including immediate access to treatment
as well as fast and convenient administration when a bleeding episode
occurs. Novo Nordisk expects to launch this upgraded version of
NovoSeven® in Europe in the second half of 2008.
In January 2008, Novo Nordisk finalised the phase 2 safety study for
the use of NovoSeven® in cardiac surgery. The study confirmed the
safety profile known from the cardiac surgery setting and from
previous studies of NovoSeven® outside of haemophilia patients with
inhibitors. While the primary endpoint of this trial was safety, the
trial also demonstrated the biologic haemostatic effect of
NovoSeven®. Based on an assessment of Novo Nordisk's possibilities
within this indication with both NovoSeven® and NN1731, the
next-generation version of recombinant factor VIIa, Novo Nordisk has
decided not to progress with a pivotal phase 3 programme with
NovoSeven®. Instead, a phase 2a study within cardiac surgery with
NN1731 is expected to be initiated in the second half of 2009. The
results from the phase 2 trial with NovoSeven® in cardiac surgery are
expected to be published and presented at scientific congresses in
2008.
Furthermore, Novo Nordisk has completed a phase 1 dose escalation
study with rFXIII in cardiac surgery. A total of 43 patients were
randomised to treatment with either placebo or rFXIII. The study
confirmed the ability of rFXIII to normalise the FXIII levels in the
blood, which is expected to reduce the risk of bleeding. Based on
this, Novo Nordisk expects to initiate a phase 2 study for the use of
rFXIII in cardiac surgery mid-2009.
Equity
Total equity was DKK 31,251 million at the end of the first three
months of 2008, equal to 65.7% of total assets, compared to 67.4% at
the end of 2007. Please refer to appendix 6 for further elaboration
of changes in equity during the first three months of 2008.
Reduction of share capital
The Annual General Meeting of Novo Nordisk A/S, which was held on 12
March, approved a 2% reduction in the total share capital by
cancellation of 12,960,000 treasury B shares of DKK 1 at a nominal
value of DKK 12,960,000. After the legal implementation of the share
capital reduction, which is expected to take place after expiry of
the legal notice period in June 2008, Novo Nordisk'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.
Treasury shares and share repurchase programme
The current share repurchase programme is conducted in accordance
with the provisions of the European Commission's regulation no
2273/2003 of 22 December 2003, also known as 'Safe Harbour
Regulation', with J.P. Morgan Securities Ltd. as lead manager.
According to this, 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 that started on 31 January 2008 and will end 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.
As per 25 April 2008, Novo Nordisk A/S and its wholly-owned
affiliates owned 27,977,880 of its own B shares, corresponding to
4.3% of the total share capital. In 2008, Novo Nordisk under the Safe
Harbour regulation repurchased 3,017,907 B shares equal to a cash
value of DKK 983 million as part of the overall ongoing DKK 16.5
billion share repurchase programme which is expected to be finalised
before the end of 2009. Novo Nordisk expects to repurchase B shares
equal to a cash value of around DKK 4 billion in 2008. In 2006 and
2007, Novo Nordisk repurchased B shares equal to a cash value of DKK
7.8 billion.
Sustainability issues update
Novo Nordisk calls for joint effort to prevent diabetes
Novo Nordisk actively supports the implementation of the UN
Resolution on Diabetes globally and organises a series of national
forums to bring diabetes on the political agenda. In April, Novo
Nordisk supported a meeting with around 300 diabetes experts,
policy-makers, patient representatives, industry and media to discuss
how to stop the epidemic growth in diabetes in Denmark. Experts
predict a twofold increase in the number of people with diabetes over
the next 20 years if no action is taken. This would entail a 50%
increase in the socio-economic burden from diabetes. The delegates
concluded that more can and should be done to prevent diabetes and
its serious complications. Prevention needs to be a priority in city
planning, schools and at workplaces. Measures to detect diabetes
early and ensure cohesive and patient-centred care should be the
standard in all regions. This was backed by the Danish Minister of
Health and health policy representatives from the Danish parliament,
regions and counties who vouched for the political commitment to take
appropriate action now.
In Italy a similar event led to a broad coalition for a new diabetes
coordination agency, a screening campaign and support for data
collection to the Novo Nordisk-led Changing Diabetes® Barometer. The
Changing Diabetes® Barometer measures the current state of diabetes
and pinpoints areas in need for improvement. The tool enables
healthcare providers, governments and patient associations to measure
progress and set priorities for national diabetes action plans.
Legal issues update
US hormone therapy litigation
As of 29 April 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®
and Vagifem®) have been sold and marketed in the US since 2000. Until
July 2003, the products were sold and marketed exclusively in the US
by Pharmacia & Upjohn Company (now Pfizer Inc.). A further 27
individuals currently allege, in relation to similar lawsuits against
Pfizer Inc., that they have also 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.
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 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', 'guidance', '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 on the first page and 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 available on our website (novonordisk.com).
Unless required by law, Novo Nordisk is under no duty and undertakes
no obligation to update or revise any forward-looking statement after
the distribution of this document, whether as a result of new
information, future events or otherwise.
Management statement
Today, the Board of Directors and Executive Management reviewed and
approved the interim report and accounts of Novo Nordisk A/S for the
first three months of 2008.
The interim report and accounts have been prepared in accordance with
International Financial Reporting Standards and the additional Danish
disclosure requirements applying to listed companies' interim reports
and accounts.
In our opinion the accounting policies used are appropriate and the
overall presentation of the interim report and accounts is adequate.
Furthermore, in our opinion the interim report and accounts give a
true and fair view of the Group's assets, liabilities, financial
position and of the results of the operations and consolidated cash
flows for the period under review.
Bagsværd 30 April 2008
Executive Management:
Lars Rebien Sørensen Jesper Brandgaard
President and CEO CFO
Lise Kingo Kåre Schultz Mads Krogsgaard Thomsen
Board of Directors:
Sten Scheibye Göran A Ando
Chairman Vice chairman
Kurt Briner Henrik Gürtler Johnny Henriksen
Pamela Kirby Anne Marie Kverneland Kurt Anker Nielsen
Søren Thuesen
Pedersen Stig Strøbæk Jørgen Wedel
Contacts for further information
Media: Investors:
Outside North America: Outside North America:
Mike Rulis Mads Veggerby Lausten
Tel: (+45) 4442 3573 Tel: (+45) 4443 7919
E-mail: mike@novonordisk.com E-mail: mlau@novonordisk.com
Hans Rommer
Tel: (+45) 4442 4765
E-mail: hrmm@novonordisk.com
In North America: In North America:
Sean Clements Christian Qvist Frandsen
Tel: (+1) 609 514 8316 Tel: (+1) 609 712 8127
E-mail: secl@novonordisk.com E-mail: cqfr@novonordisk.com
Further information on Novo Nordisk is available on the company's
internet homepage at the address: novonordisk.com
Appendix 1 - Quarterly numbers in DKK
% change
Q1 2008
2008 2007 vs
Q1 Q4 Q3 Q2 Q1 Q1 2007
Sales 10,614 10,946 10,504 10,563 9,818 8%
Gross profit 8,201 8,345 7,990 8,205 7,498 9%
Gross margin 77.3% 76.2% 76.1% 77.7% 76.4%
Sales and 2,975 3,220 2,993 3,110 3,048 -2%
distribution costs
Percent of sales 28.0% 29.4% 28.5% 29.4% 31.0%
Research and 1,858 3,413 1,724 1,754 1,647 13%
development costs
- Hereof costs (220) (1,325) - - -
related to
discontinuation
of AERx®
Percent of sales 17.5% 31.2% 16.4% 16.6% 16.8%
Percent of sales 15.4% 19.1% 16.4% 16.6% 16.8%
(excl. AERx®)*
Administrative 627 677 623 594 614 2%
Expenses
Percent of sales 5.9% 6.2% 5.9% 5.6% 6.3%
Licence fees and 88 92 31 60 138 -36%
other operating
income (net)
Operating profit 2,829 1,127 2,681 2,807 2,327 22%
Operating margin 26.7% 10.3% 25.5% 26.6% 23.7%
Operating profit 3,049 2,452 2,681 2,807 2,327 31%
(excl. AERx®)*
Operating margin 28.7% 22.4% 25.5% 26.6% 23.7%
(excl. AERx®)*
Share of (67) 0 (57) 1,350 (60) 12%
profit/(loss)
in associated
companies
Financial income 474 375 322 297 309 53%
Financial expenses 368 155 90 60 202 82%
Profit before income 2,868 1,347 2,856 4,394 2,374 21%
Taxes
Net profit 2,180 977 2,184 3,652 1,709 28%
Depreciation, 563 1,396 586 516 509 11%
amortisation and
impairment losses
Depreciation, 563 526 586 516 509 11%
amortisation, etc
(excl. AERx®)*
Capital expenditure 214 719 597 508 444 -52%
Cash flow from 3,070 2,498 3,500 1,438 2,551 20%
operating activities
Free cash flow 2,795 3,198 2,888 826 2,100 33%
Equity 31,251 32,182 33,161 33,475 29,676 5%
Total assets 47,534 47,731 48,423 48,300 44,742 6%
Equity ratio 65.7% 67.4% 68.5% 69.3% 66.3%
Full-time employees 25,765 25,516 25,206 24,729 24,045 7%
at the end of the
period
Basic earnings per 3.51 1.56 3.46 5.75 2.69 30%
share (in DKK)
Diluted earnings 3.48 1.55 3.43 5.71 2.68 30%
per share (in DKK)
Average number 620.9 624.4 632.0 635.8 635.0 -2%
of shares
outstanding
(million)**
Average number of
shares outstanding
incl
dilutive effect of 626.3 629.6 636.4 640.2 639.4 -2%
options 'in the
money'
(million)**
Sales by business
segments:
Modern insulins 3,821 3,911 3,568 3,464 3,065 25%
(insulin analogues)
Human insulins 2,939 3,116 3,098 3,222 3,136 -6%
Insulin-related 443 448 445 437 419 6%
sales
Oral antidiabetic 640 512 585 529 523 22%
products (OAD)
Diabetes care 7,843 7,987 7,696 7,652 7,143 10%
Total
NovoSeven® 1,440 1,519 1,427 1,508 1,411 2%
Growth hormone 878 925 878 924 784 12%
Therapy
Hormone 385 437 414 411 406 -5%
Replacement
Therapy
Other products 68 78 89 68 74 -8%
Biopharma- 2,771 2,959 2,808 2,911 2,675 4%
ceuticals total
Sales by geographic
segments:
Europe 4,061 4,348 4,036 4,035 3,931 3%
North America 3,450 3,608 3,500 3,424 3,214 7%
International 2,096 1,776 1,870 1,953 1,696 24%
Operations
Japan & Oceania 1,007 1,214 1,098 1,151 977 3%
Segment operating
profit:
Diabetes care 1,672 (75) 1,487 1,600 1,247 34%
Diabetes care 1,892 1,250 1,487 1,600 1,247 52%
(excl. AERx®)*
Biopharma- 1,157 1,202 1,194 1,207 1,080 7%
Ceuticals
*) Excluding costs related to the discontinuation of AERx®
**) For Q1 2008 the exact numbers of 'Average number
of shares outstanding' and 'Average number of shares outstanding
incl dilutive effect of options 'in the money'' are 620,924,273
and 626,305,119 respectively.
Appendix 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
Q1 2008
2008 2007 vs
Q1 Q4 Q3 Q2 Q1 Q1 2007
Sales 1,424 1,468 1,411 1,418 1,317 8%
Gross profit 1,100 1,119 1,074 1,101 1,006 9%
Gross margin 77.3% 76.2% 76.1% 77.7% 76.4%
Sales and distribution 399 432 402 417 409 -2%
costs
Percent of sales 28.0% 29.4% 28.5% 29.4% 31.0%
Research and 249 458 232 235 221 13%
development costs
-Hereof costs related (30) (178) - - -
to
discontinuation of
AERx®*
Percent of sales 17.5% 31.2% 16.4% 16.6% 16.8%
Percent of sales 15.4% 19.1% 16.4% 16.6% 16.8%
(excl. AERx®)*
Administrative 84 91 84 80 82 2%
expenses
Percent of sales 5.9% 6.2% 5.9% 5.6% 6.3%
Licence fees and 12 12 4 8 19 -36%
other operating
income (net)
Operating profit 380 151 360 377 312 22%
Operating margin 26.7% 10.3% 25.5% 26.6% 23.7%
Operating profit 410 329 360 377 312 31%
(excl. AERx®)*
Operating margin 28.7% 22.4% 25.5% 26.6% 23.7%
(excl. AERx®)*
Share of profit/(loss) (9) 0 (7) 181 (8) 12%
in associated
companies
Financial income 64 49 44 40 41 53%
Financial expenses 49 21 12 8 27 82%
Profit before income 385 180 384 589 319 21%
taxes
Net profit 292 131 294 490 229 28%
Depreciation, 76 188 78 70 68 11%
amortisation and
impairment losses
Depreciation, 76 71 78 70 68 11%
amortisation, etc
(excl AERx®)*
Capital expenditure 29 96 80 68 60 -52%
Cash flow from 412 335 470 193 342 20%
operating activities
Free cash flow 375 430 387 111 282 33%
Equity 4,191 4,316 4,449 4,498 3,983 5%
Total assets 6,375 6,401 6,496 6,490 6,005 6%
Equity ratio 65.7% 67.4% 68.5% 69.3% 66.3%
Full-time employees 25,765 25,516 25,206 24,729 24,045 7%
at the end of the
period
Basic earnings per 0.47 0.21 0.47 0.77 0.36 30%
share (in EUR)
Diluted earnings per 0.47 0.21 0.47 0.76 0.36 30%
share (in EUR)
Average number of 620.9 624.4 632.0 635.8 635.0 -2%
shares outstanding
(million)**
Average number of
shares outstanding
incl
dilutive effect of 626.3 629.6 636.4 640.2 639.4 -2%
options 'in the
money' (million)**
Sales by business
segments:
Modern insulins 513 525 479 465 411 25%
(insulin analogues)
Human insulins 394 418 416 432 421 -6%
Insulin-related 59 60 60 59 56 6%
sales
Oral antidiabetic 86 68 79 71 70 22%
products (OAD)
Diabetes care 1,052 1,071 1,034 1,027 958 10%
total
NovoSeven® 193 204 191 203 189 2%
Growth hormone 118 124 118 124 105 12%
therapy
Hormone 52 59 55 56 54 -5%
replacement therapy
Other products 9 10 12 9 10 -8%
Biopharmaceuticals 372 397 376 392 358 4%
total
Sales by geographic
segments:
Europe 545 583 542 542 527 3%
North America 463 484 470 460 431 7%
International 281 238 251 262 228 24%
Operations
Japan & Oceania 135 163 147 155 131 3%
Segment operating
profit:
Diabetes care 224 (10) 200 215 167 34%
Diabetes care 254 168 200 215 167 52%
(excl. AERx®)*
Biopharmaceuticals 155 162 160 162 145 7%
*) Excluding costs related to the discontinuation of AERx®
**) For Q1 2008 the exact numbers of 'Average number of
shares outstanding' and 'Average number of shares
outstanding incl dilutive effect of options 'in the money'' are
620,924,273 and 626.305,119 respectively.
Appendix 3 - Income statement
Q1 Q1
DKK million 2008 2007
Sales 10,614 9,818
Cost of goods sold 2,413 2,320
Gross profit 8,201 7,498
Sales and distribution
costs 2,975 3,048
Research and
development costs 1,858 1,647
- Hereof costs related to
discontinuation of AERx® (220) -
Administrative
expenses 627 614
Licence fees and other
operating income (net) 88 138
Operating profit 2,829 2,327
Share of profit/(loss)
in associated companies (67) (60)
Financial income 474 309
Financial expenses 368 202
Profit before income
taxes 2,868 2,374
Income taxes 688 665
NET PROFIT 2,180 1,709
Basic earnings per
share (DKK) 3.51 2.69
Diluted earnings per
share (DKK) 3.48 2.68
Segment sales:
Diabetes care 7,843 7,143
Biopharmaceuticals 2,771 2,675
Segment operating
profit:
Diabetes care 1,672 1,247
Operating margin 21.3% 17.5%
Diabetes care (excl. AERx®) 1,892 1,247
Operating margin (excl. AERx®) 24.1% 17.5%
Biopharmaceuticals 1,157 1,080
Operating margin 41.8% 40.4%
Appendix 4 - Balance sheet
DKK million 31 Mar 2008 31 Dec 2007
ASSETS
Intangible assets 700 671
Property, plant and
equipment 19,034 19,605
Investments in
associated companies 407 500
Deferred income tax
assets 2,476 2,522
Other financial assets 168 131
TOTAL LONG-TERM
ASSETS 22,785 23,429
Inventories 9,300 9,020
Trade receivables 6,191 6,092
Tax receivables 417 319
Other receivables 1,449 1,493
Marketable securities
And financial derivatives 2,943 2,555
Cash at bank and in hand 4,449 4,823
TOTAL CURRENT
ASSETS 24,749 24,302
TOTAL ASSETS 47,534 47,731
EQUITY AND
LIABILITIES
Share capital 647 647
Treasury shares (27) (26)
Retained earnings 29,505 30,661
Other comprehensive
income 1,126 900
TOTAL EQUITY 31,251 32,182
Long-term debt 929 961
Deferred income tax
liabilities 2,403 2,346
Provision for pensions 388 362
Other provisions 967 1,239
Total long-term
liabilities 4,687 4,908
Short-term debt and
financial derivatives 619 405
Trade payables 1,570 1,947
Tax payables 1,163 929
Other liabilities 5,805 4,959
Other provisions 2,439 2,401
Total current
liabilities 11,596 10,641
TOTAL LIABILITIES 16,283 15,549
TOTAL EQUITY
AND LIABILITIES 47,534 47,731
Appendix 5 - Cash flow statement
DKK million Q1 2008 Q1 2007
Net profit 2,180 1,709
Adjustment for 1,435 1,706
non-cash items
Income taxes paid (359) (804)
and net interest received
Cash flow before 3,256 2,611
change in working capital
Net change in working (186) (60)
capital
Cash flow from operating 3,070 2,551
activities
Net investments in intangible (61) (7)
assets and long-term financial
assets
Capital expenditure for property, (214) (444)
plant and equipment
Net change in marketable 4 4
securities (maturity exceeding
three months)
Net cash used in investing (271) (447)
activities
Cash flow from financing (3,371) (2,111)
activities
NET CASH FLOW (572) (7)
Unrealised gain/(loss) on
exchange rates and marketable
securities
included in cash and cash (23) (5)
equivalents
Net change in cash and (595) (12)
cash equivalents
Cash and cash equivalents at 4,617 2,985
the beginning of the year
Cash and cash equivalents 4,022 2,973
at the end of the period
Bonds with original term to 1,490 997
maturity exceeding three months
Undrawn committed credit 7,451 7,451
facilities
FINANCIAL RESOURCES AT 12,963 11,421
THE END OF THE PERIOD
Cash flow from operating activities 3,070 2,551
+ Net cash used in investing (271) (447)
activities
- Net change in marketable
securities (maturity exceeding
three months) 4 4
FREE CASH FLOW 2,795 2,100
Appendix 6 - Statement of changes in equity
Other
compre-
hensive
income
Share Trea- Ret- Ex- De- Other Total
capital sury ained change ferred adjust-
shares ear- rate gain/ ments
nings adjust- loss
ments on cash
flow
DKK million hedges
Q1 2008
Balance at 647 (26) 30,661 209 691 - 32,182
the
beginning of
the year
Exchange (109) (109)
rate
adjustment
of
investments
in
subsidiaries
Deferred (208) (208)
(gain)/loss
on
cash flow
hedges at
the
beginning of
the year
recognised
in the
income
statement
for
the period
Changes of 572 572
fair value
on
cash flow
hedges
during the
period
Fair value - -
adjustments
on financial
assets
available
for sale
Novo Nordisk 9 9
share of
equity
recognised
by
associated
companies
Other (38) (38)
adjustments
Net income - - - (109) 364 (29) 226
recognised
directly in
equity
Net profit 2,180 2,180
for
the period
Total income - - 2,180 (109) 364 (29) 2,406
for the
period
Share-based 34 34
payment
Purchase of (2) (620) (622)
treasury
shares
Sale of 1 45 46
treasury
shares
Reduction of -
the B share
capital
Dividends (2,795) (2,795)
Balance at 647 (27) 29,505 100 1,055 (29) 31,251
the end of
the period
Q1 2007
Balance at 674 (39) 28,810 156 420 101 30,122
the
beginning
of the year
Exchange 47 47
rate
adjustment
of
investments
in
subsidiaries
Deferred (171) (171)
(gain)/loss
on cash flow
hedges at
the
beginning
of the year
recognised
in
the Income
statement
for the
period
Changes of 57 57
fair value
on
cash flow
hedges
during the
period
Fair value 13 13
adjustments
on financial
assets
available
for
sale
Novo Nordisk - -
share of
equity
recognised
by
associated
companies
Other (23) (23)
adjustments
Net income - - - 47 (114) (10) (77)
recognised
directly in
equity
Net profit 1,709 1,709
for
the period
Total income - - 1,709 47 (114) (10) 1,632
for the
period
Share-based 25 25
payment
Purchase of -
treasury
shares
Sale of 1 117 118
treasury
shares
Dividends (2,221) (2,221)
Balance at 674 (38) 28,440 203 306 91 29,676
the end of
the period
Stock Exchange Announcement no 24 / 2008