6-K 1 c109098.htm 6-K c109098

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

October 31, 2013

        NOVO NORDISK A/S       
(Exact name of Registrant as specified in its charter)

Novo Allé
DK- 2880, Bagsvaerd
Denmark
(Address of principal executive offices)

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-_____________________

 

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Financial report for the period 1 January 2013 to 30 September 2013

31 October 2013

Novo Nordisk increased operating profit by 10% in the first nine months of 2013
Sales growth of 8% driven by Victoza®, Levemir® and NovoRapid®

Sales increased by 13% in local currencies and by 8% in Danish kroner to DKK 61.9 billion.

• Sales of modern insulins increased by 15% (10% in Danish kroner).
• Sales of Victoza® increased by 28% (24% in Danish kroner).
• Sales in North America increased by 20% (17% in Danish kroner).
• Sales in International Operations increased by 15% (8% in Danish kroner).

Gross margin improved by 0.7 percentage points in Danish kroner to 82.6%, reflecting a favourable price and product mix development.

Operating profit increased by 17% in local currencies and by 10% in Danish kroner to DKK 24.1 billion.

Net profit increased by 22% to DKK 19.1 billion. Diluted earnings per share increased by 25% to DKK 35.39.

The roll-out of Tresiba® (insulin degludec), the once-daily new-generation insulin with an ultra-long duration of action, continues to progress. Tresiba® has now also been commercially launched in Sweden and India. In October, the first patient was enrolled in DEVOTE, the cardiovascular outcomes trial for Tresiba®. Data for an interim analysis of the trial are expected to be available within two to three years.

For 2013, expectations to operating performance in local currencies are unchanged. Sales growth measured in local currencies is expected to be 11-13% and operating profit growth measured in local currencies is expected to be 12-15%.

The preliminary outlook for 2014 indicates high single-digit growth in sales and operating profit, both measured in local currencies.

Lars Rebien Sørensen, president and CEO: “We are pleased with the sustained robust financial performance. Sales growth continues to be driven by our portfolio of modern insulins and Victoza®. Tresiba® performance is encouraging and with the initiation of DEVOTE we have passed a significant milestone in the process of making Tresiba® available for people with diabetes in the US.”

Novo Nordisk A/S
Investor Relations
Novo Allé
2880 Bagsværd
Denmark
Telephone:
+45 4444 8888
www.novonordisk.com
CVR No:
24 25 67 90
 
Company announcement No 68 / 2013

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Financial report for the period 1 January 2013 to 30 September 2013
Page 2 of 28

ABOUT NOVO NORDISK
Novo Nordisk is a global healthcare company with 90 years of innovation and leadership in diabetes care. The company also has leading positions within haemophilia care, growth hormone therapy and hormone replacement therapy. Headquartered in Denmark, Novo Nordisk employs approximately 37,000 employees in 75 countries, and markets its products in more than 180 countries. Novo Nordisk’s B shares are listed on NASDAQ OMX Copenhagen (Novo-B) and its ADRs are listed on the New York Stock Exchange (NVO).

CONFERENCE CALL DETAILS
On 31 October 2013 at 13.00 CET, corresponding to 8.00 am EDT, 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 available approximately one hour before on the same page.

WEB CAST DETAILS
On 1 November 2013 at 13.30 CET, corresponding to 8.30 am EDT, management will give a presentation to institutional investors and sell side-analysts in London. A webcast of the presentation can be followed via a link on novonordisk.com, which can be found under ‘Investors – Download centre’. Presentation material for the conference call will be made available on the same page.

FINANCIAL CALENDAR  
3 December 2013 Capital Markets Day
30 January 2014 Financial statement for 2013
3 February 2014 PDF version of the Annual Report 2013
5 February 2014 Deadline for the company’s receipt of shareholder proposals for the Annual General Meeting 2014
14 February 2014 Printed version of the Annual Report 2013
20 March 2014 Annual General Meeting 2014
1 May 2014 Financial statement for the first three months of 2014
7 August 2014 Financial statement for the first six months of 2014
30 October 2014 Financial statement for the first nine months of 2014

CONTACTS FOR FURTHER INFORMATION
Media:
Mike Rulis
+45 4442 3573
mike@novonordisk.com
Ken Inchausti (US)
+1 609 514 8316
kiau@novonordisk.com
 
 
 
Investors:
Kasper Roseeuw Poulsen
+45 4442 4303
krop@novonordisk.com
Frank Daniel Mersebach
+45 4442 0604
fdni@novonordisk.com
Lars Borup Jacobsen
+45 3075 3479
lbpj@novonordisk.com
Jannick Lindegaard (US)
+1 609 786 4575
jlis@novonordisk.com

Further information about Novo Nordisk is available on the company’s website novonordisk.com.

Company announcement No 68 / 2013

Financial report for the period 1 January 2013 to 30 September 2013
Page 3 of 28

 

LIST OF CONTENTS  
FINANCIAL PERFORMANCE 4
  Consolidated financial statement for the first nine months of 2013 4
  Sales development 5
  Diabetes care sales development 5
  Biopharmaceuticals sales development 9
  Development in costs and operating profit 9
  Net financials 10
  Capital expenditure and free cash flow 10
  Key developments in the third quarter of 2013 11
OUTLOOK 12
RESEARCH & DEVELOPMENT UPDATE 14
  Diabetes care: Insulin and GLP-1 14
  Biopharmaceuticals: Haemophilia 15
SUSTAINABILITY UPDATE 15
EQUITY 16
LEGAL MATTERS AND EVENTS AFTER THE END OF THE THIRD QUARTER 18
MANAGEMENT STATEMENT 20
FINANCIAL INFORMATION 21
  Appendix 1: Quarterly numbers in DKK 21
  Appendix 2: Income statement and statement of comprehensive income 22
  Appendix 3: Balance sheet 23
  Appendix 4: Statement of cash flows 24
  Appendix 5: Statement of changes in equity 25
  Appendix 6: Regional sales split 26
  Appendix 7: Key currency assumptions 27
  Appendix 8: Quarterly numbers in USD (additional information) 28

 


 Financial performance
Outlook
R&D
Sustainability
Equity
Legal
Financial information
 
 
Company announcement No 68 / 2013

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Financial report for the period 1 January 2013 to 30 September 2013
Page 4 of 28

FINANCIAL PERFORMANCE

CONSOLIDATED FINANCIAL STATEMENT FOR THE FIRST NINE MONTHS OF 2013
These unaudited consolidated financial statements for the first nine months of 2013 have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’ and on the basis of the same accounting policies as were applied in the Annual Report 2012 of Novo Nordisk. Furthermore, the financial report including the consolidated financial statements for the first nine months of 2013 and Management’s review have been prepared in accordance with additional Danish disclosure requirements for interim reports of listed companies. Novo Nordisk has adopted all new, amended or revised accounting standards and interpretations (‘IFRSs’) as published by the IASB, and also those that are endorsed by the EU effective for the accounting period beginning on 1 January 2013. These IFRSs have not had a significant impact on the consolidated financial statements for the first nine months of 2013.

Amounts in DKK million, except number of shares, earnings per share and full-time equivalent employees.
 
PROFIT AND LOSS
9M 2013
9M 2012
% change
9M 2012
to 9M 2013
  
 
Sales
 61,874   57,064   8%
 
Gross profit 51,134   46,752   9%
Gross margin 82.6% 81.9%    
             
Sales and distribution costs 16,893   15,352   10%
Percentage of sales 27.3% 26.9%    
             
Research and development costs 8,167   7,687   6%
Percentage of sales 13.2% 13.5%    
             
Administrative costs 2,438   2,321   5%
Percentage of sales 3.9% 4.1%    
             
Licence income and other operating income
 503   510   (1% )
 
Operating profit 24,139   21,902   10%
Operating margin 39.0% 38.4%    
             
Net financials
 610   (1,543 )
N/A
  
 
Profit before income taxes
 24,749   20,359   22%
 
Net profit 19,131   15,677   22%
Net profit margin 30.9% 27.5%    
 
OTHER KEY NUMBERS
            
 
Depreciation, amortisation and impairment losses 2,010   1,938   4%
Capital expenditure 2,468   2,313   7%
             
Net cash generated from operating activities 20,570   20,700   (1% )
Free cash flow 17,820   18,237   (2% )
             
Total assets 68,134   66,620   2%
Equity 39,125   35,660   10%
Equity ratio 57.4% 53.5%    
             
Average number of diluted shares outstanding (million) 540.5   553.5   (2% )
Diluted earnings per share / ADR (in DKK) 35.39   28.32   25%
             
Full-time equivalent employees end of period 36,851   33,501   10%
 

 


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Sustainability
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Financial information
 
 
Company announcement No 68 / 2013

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Financial report for the period 1 January 2013 to 30 September 2013
Page 5 of 28

SALES DEVELOPMENT
Sales increased by 13% measured in local currencies and by 8% in Danish kroner. North America was the main contributor with 69% share of growth measured in local currencies, followed by International Operations and Region China contributing 18% and 8% respectively. Sales growth was realised within both diabetes care and biopharmaceuticals, with the majority of growth originating from the modern insulins and Victoza®. Sales growth has been positively impacted by approximately 1 percentage point due to a number of non-recurring events, primarily related to prior year adjustments in the provisions for rebates in North America.

 
 
Sales
9M 2013
DKK million
  
Growth
 as reported
  
Growth
in local
currencies
  
Share of
growth
in local
currencies
  
 
The diabetes care segment                
- NovoRapid®
12,393
  
9%
  
13%
  
20%
  
- NovoMix®
7,238
  
5%
  
10%
  
9%
  
- Levemir®
8,379
  
18%
  
22%
  
22%
  
Modern insulins 28,010   10% 15% 51%
Human insulins 8,175   (1% ) 2% 2%
Victoza® 8,402   24% 28% 26%
Protein-related products 1,915   1% 7% 2%
Oral antidiabetic products 1,879   (10% ) (8% ) (2% )
                 
Diabetes care total
 48,381   9% 13% 79%
 
                 
The biopharmaceuticals segment                
NovoSeven® 6,997   7% 11% 10%
Norditropin® 4,452   5% 12% 8%
Other products 2,044   8% 12% 3%
                 
Biopharmaceuticals total
 13,493   7% 12% 21%
 
                 
Total sales 61,874   8% 13% 100%
 

Please refer to appendix 6 for further details on sales in the first nine months of 2013.

In the following sections, unless otherwise noted, market data are based on moving annual total (MAT) from August 2013 and August 2012 provided by the independent data provider IMS Health.

DIABETES CARE SALES DEVELOPMENT
Sales of diabetes care products increased by 13% measured in local currencies and by 9% in Danish kroner to DKK 48,381 million. Novo Nordisk is the world leader in diabetes care and now holds a global value market share of 27% compared to 25% at the same time the year before.

 

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Company announcement No 68 / 2013

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Financial report for the period 1 January 2013 to 30 September 2013
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Insulins and protein-related products
Sales of modern insulins, human insulins and protein-related products increased by 11% in local currencies and by 7% in Danish kroner to DKK 38,100 million. Measured in local currencies, sales growth was driven by North America, International Operations and Region China. Novo Nordisk is the global leader with 48% of the total insulin market and 46% of the market for modern insulin and new-generation insulin, both measured in volume.

The roll-out of Tresiba® (insulin degludec), the once-daily new-generation insulin with an ultra-long duration of action, continues to progress. Tresiba® has now been launched in seven countries, most recently in Sweden and India. Launch activities are progressing as planned and feedback from patients and prescribers is encouraging. In Japan, the first country to launch Tresiba® with broad market access, Tresiba® has steadily expanded its share of the basal insulin market. Eight months after launch, Tresiba® now represents 9% of the basal insulin market measured in weekly value market share. In the UK and Denmark, where Tresiba® has been launched with restricted market access, market penetration remains limited.

Sales of modern insulins increased by 15% in local currencies and by 10% in Danish kroner to DKK 28,010 million. North America accounted for two thirds of the growth, followed by International Operations and Region China. Sales of modern insulins now constitute 77% of Novo Nordisk’s sales of insulin.

INSULIN MARKET SHARES
(volume, MAT)		 Novo Nordisk’s share
of total insulin market		   Novo Nordisk’s share
of the modern insulin and
new-generation insulin market		  
 
  August
2013		   August
2012		   August
2013		   August
2012		  
 
 
Global 48% 49% 46% 46%
USA 40% 41% 39% 38%
Europe 49% 51% 49% 50%
International Operations* 56% 58% 53% 55%
China** 60% 61% 64% 66%
Japan 53% 56% 49% 51%
 

Source: IMS, August 2013 data. *: Data for 12 selected markets representing approximately 60% of Novo Nordisk’s diabetes sales in the region. **: Data for mainland China, excluding Hong Kong and Taiwan.

North America
Sales of insulins and protein-related products in North America increased by 19% in local currencies and by 16% in Danish kroner. Sales growth reflects a continued positive contribution from pricing in the US, solid market penetration of all three modern insulins, NovoLog®, Levemir® and NovoLog® Mix 70/30 as well as human insulin sales growth. In addition, US sales are positively impacted by an adjustment in the provisions for rebates related to prior years. 54% of Novo Nordisk’s modern insulin volume in the US is used in the prefilled device FlexPen®.

 

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Outlook
R&D
Sustainability
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Financial information
 
 
Company announcement No 68 / 2013

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Financial report for the period 1 January 2013 to 30 September 2013
Page 7 of 28

Europe
Sales of insulins and protein-related products in Europe remained unchanged in local currencies and decreased by 1% in Danish kroner. The development reflects that the declining human insulin sales are only partially offset by the continued progress for Levemir® and NovoRapid®. Furthermore, sales are impacted by a lower than normal volume growth of the insulin market, around 2%, as well as the implementation of pricing reforms in several European markets. The device penetration in Europe remains high with 96% of Novo Nordisk’s insulin volume being used in devices, primarily NovoPen® and FlexPen®.

International Operations
Sales of insulins and protein-related products in International Operations increased by 15% in local currencies and by 7% in Danish kroner. The growth, which is positively impacted by the timing in tenders and shipments in a number of countries, is driven by all three modern insulins and a contribution from human insulins. Currently, 59% of Novo Nordisk’s insulin volume in the major private markets is used in devices.

Region China
Sales of insulins and protein-related products in Region China increased by 15% in local currencies and by 15% in Danish kroner. The sales growth was driven by all three modern insulins, while sales of human insulins only grew modestly. Currently, 97% of Novo Nordisk’s insulin volume in China is used in devices, primarily the durable device NovoPen®.

Japan & Korea
Sales of insulins and protein-related products in Japan & Korea decreased by 5% in local currencies and by 23% measured in Danish kroner. The sales development reflects a stagnant Japanese insulin volume market and the negative impact of a challenging competitive environment, which is only partly offset by the initial uptake of Tresiba®. The device penetration in Japan remains high with 98% of Novo Nordisk’s insulin volume being used in devices, primarily FlexPen®.

Victoza® (GLP-1 therapy for type 2 diabetes)
Victoza® sales increased by 28% in local currencies and by 24% in Danish kroner to DKK 8,402 million, reflecting robust sales performance driven by North America, Europe and International Operations. Victoza® holds the global market share leadership in the GLP-1 segment with a 70% value market share compared to 66% in 2012. In volume terms, the growth of the GLP-1 market has decelerated, while the GLP-1 segment’s value share of the total diabetes care market has increased to 6.8% compared to 5.6% in 2012.

 

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Page 8 of 28

 

 
GLP-1 MARKET SHARES
(value, MAT)		 GLP-1 share of total
diabetes care market		   Victoza® share
of GLP-1 market		  
 
  August
2013		   August
2012		  
August
2013
   August
2012		  
 
Global 6.8% 5.6%  
70%
 66%
USA 8.5% 6.8%  
66%
 61%
Europe 7.4% 6.3%  
78%
 75%
International Operations* 2.8% 3.0%  
76%
 81%
China** 0.7% 0.5%  
73%
 33%
Japan 2.2% 2.2%  
73%
 79%
 

Source: IMS, August 2013 data. *: Data for 12 selected markets representing approximately 60% of Novo Nordisk’s diabetes sales in the region. **: Data for mainland China, excluding Hong Kong and Taiwan.

North America
Sales of Victoza® in North America increased by 30% in local currencies and by 26% in Danish kroner. This reflects a continued expansion of the GLP-1 class, which represents 8.5% of the total US diabetes care market in value compared to 6.8% in 2012. Despite the launch of a competing product in 2012, Victoza® continues to drive the US GLP-1 market expansion and is the GLP-1 market leader, now with a 66% value market share compared to 61% a year ago.

Europe
Sales in Europe increased by 25% in local currencies and by 24% in Danish kroner. Sales growth is primarily driven by France, the UK, Spain and Italy. In Europe, the GLP-1 class’ share of the total diabetes care market in value has increased to 7.4% compared to 6.3% in 2012. Victoza® is the GLP-1 market leader with a value market share of 78%.

International Operations
Sales in International Operations increased by 36% in local currencies and by 27% in Danish kroner. Sales growth is primarily driven by a number of Middle Eastern countries. The contraction of the GLP-1 class to 2.8% of the total diabetes care market in value compared to 3.0% in 2012 reflects a decline in Brazil following a strong launch, whereas the class continues to expand outside Brazil. Victoza® is the GLP-1 market leader across International Operations with a value market share of 76%.

Region China
Sales in Region China increased by 100% in local currencies and by 100% in Danish kroner. The GLP-1 class in China is not reimbursed and relatively modest in size. However, its share of the total diabetes care market in value has expanded to 0.7% compared to 0.5% in 2012. Victoza® holds a GLP-1 value market share of 73%.

Japan & Korea
Sales in Japan & Korea decreased by 8% in local currencies and by 26% in Danish kroner. In Japan, the GLP-1 class represents 2.2% of the total diabetes care market value. Victoza® remains the leader in the class with a value market share of 73%.

 

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Outlook
R&D
Sustainability
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Company announcement No 68 / 2013

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Financial report for the period 1 January 2013 to 30 September 2013
Page 9 of 28


NovoNorm®/Prandin®/PrandiMet® (oral antidiabetic products)
Sales of oral antidiabetic products decreased by 8% in local currencies and 10% in Danish kroner to DKK 1,879 million. The negative sales development reflects an impact from generic competition in the US and Europe as well as a changed inventory setup in China.

BIOPHARMACEUTICALS SALES DEVELOPMENT
Sales of biopharmaceutical products increased by 12% measured in local currencies and by 7% in Danish kroner to DKK 13,493 million. Sales growth was primarily driven by North America and International Operations.

NovoSeven® (bleeding disorders therapy)
Sales of NovoSeven® increased by 11% in local currencies and by 7% in Danish kroner to DKK 6,997 million. The market for NovoSeven® remains volatile and sales growth is primarily driven by North America and International Operations.

Norditropin® (growth hormone therapy)
Sales of Norditropin® increased by 12% in local currencies and by 5% in Danish kroner to DKK 4,452 million. The sales growth is primarily driven by North America and by International Operations. Novo Nordisk is the leading company in the global growth hormone market with a 28% market share measured by volume.

Other biopharmaceuticals
Sales of other products within biopharmaceuticals, which predominantly consist of hormone replacement therapy (HRT)-related products, increased by 12% in local currencies and by 8% in Danish kroner to DKK 2,044 million. Sales growth is driven by North America and reflects a positive impact of pricing and non-recurring adjustments to the provisions for rebates.

DEVELOPMENT IN COSTS AND OPERATING PROFIT
The cost of goods sold grew 4% to DKK 10,740 million, resulting in a gross margin of 82.6% compared to 81.9% in 2012. This development primarily reflects an underlying improvement driven by favourable price development in North America and a positive net impact from product mix due to increased sales of modern insulins and Victoza®. The gross margin was negatively impacted by around 0.3 percentage point due to the depreciation of key invoicing currencies versus the Danish krone compared to prevailing exchange rates in 2012.

Total non-production-related costs increased by 11% in local currencies and by 8% in Danish kroner to DKK 27,498 million.

Sales and distribution costs increased by 13% in local currencies and by 10% in Danish kroner to DKK 16,893 million. The growth in costs is driven by the expansion of the US sales force in the second half of 2012 and sales and marketing investments in China and selected countries in International Operations, costs related to the launch of Tresiba® in

 

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Company announcement No 68 / 2013

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Financial report for the period 1 January 2013 to 30 September 2013
Page 10 of 28

Europe and Japan. The growth percentage for costs is furthermore impacted by changes to legal provisions in 2012 and 2013.

Research and development costs increased by 8% in local currencies and by 6% in Danish kroner to DKK 8,167 million. The modest cost increase reflects timing of clinical trial activity. Within diabetes care, costs are primarily driven by development costs related to the initiation of the Tresiba® cardiovascular outcome study, the ongoing phase 3a trials for semaglutide, the once-weekly GLP-1 analogue and faster-acting insulin aspart. Within biopharmaceuticals, costs are primarily related to the continued progress of the portfolio of development projects within haemophilia and the phase 2 trial for anti-IL-20, a recombinant human monoclonal antibody, in rheumatoid arthritis.

Administration costs increased by 8% in local currencies and by 5% in Danish kroner to DKK 2,438 million. The increase in costs is primarily driven by back-office infrastructure costs to support the expansion of the sales organisation in North America and International Operations as well as an impact from a cost refund in the first half of 2012 of a previously expensed fine related to an import licence for a major market in International Operations.

Licence income and other operating income constituted DKK 503 million compared to DKK 510 million in 2012.

Operating profit in local currencies increased by 17% and by 10% in Danish kroner to DKK 24,139 million.

NET FINANCIALS
Net financials showed a net income of DKK 610 million compared to a net expense of DKK 1,543 million in 2012.

In line with Novo Nordisk’s treasury policy, the most significant foreign exchange risks for the group have been hedged, primarily through foreign exchange forward contracts. The foreign exchange result was an income of DKK 696 million compared to an expense of DKK 1,455 million in 2012. This development reflects gains on foreign exchange hedging involving especially the Japanese yen and the US dollar due to their depreciation versus the Danish krone compared to the prevailing exchange rates in 2012. This positive effect is partly offset by losses on commercial balances, primarily related to non-hedged currencies.

CAPITAL EXPENDITURE AND FREE CASH FLOW
Net capital expenditure for property, plant and equipment was DKK 2.5 billion compared to DKK 2.3 billion in 2012. Net capital expenditure was primarily related to filling capacity in Denmark and Russia, new offices in Denmark, new diabetes research facilities in Denmark as well as device production facilities in the US and Denmark.

 

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Sustainability
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Company announcement No 68 / 2013

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Financial report for the period 1 January 2013 to 30 September 2013
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Free cash flow was DKK 17.8 billion compared to DKK 18.2 billion in 2012. The decrease of 2% compared to 2012 reflects the growth in net profit of 22% being more than offset by increased tax payments and earlier payment of rebate liabilities in the US.

KEY DEVELOPMENTS IN THE THIRD QUARTER OF 2013
Please refer to appendix 1 for an overview of the quarterly numbers in DKK and appendix 6 for details on sales in the third quarter of 2013.

Sales in the third quarter of 2013 increased by 10% in local currencies and by 3% in Danish kroner to 20.5 billion compared to the same period in 2012. The growth, which was driven by the three modern insulins and Victoza®, was partly offset by generic competition to Prandin® in the US. Sales of Victoza® in the third quarter of 2013 were primarily driven by the US and Europe. From a geographic perspective, North America, International Operations and Europe represented the majority of total sales growth in local currencies.

The gross margin increased to 82.8% in the third quarter of 2013 compared to 82.4% in the same period last year. The increase of 0.4 percentage point was driven by a positive impact from pricing in the US and a favourable product mix development which was partly offset by a negative currency impact of 0.2 percentage point.

In the third quarter of 2013, total non-production-related costs increased by 10% in local currencies and by 5% in Danish kroner to DKK 9,146 million compared to the same period last year.

Sales and distribution costs increased by 10% in local currencies and by 4% in Danish kroner in the third quarter of 2013 compared to the same period last year. The growth in costs is driven by the expansion of the US sales force in the second half of 2012, sales and marketing investments in China and selected countries in International Operations as well as an impact from adjustments of legal provisions.

Research and development costs increased by 9% in local currencies and by 7% in Danish kroner in the third quarter of 2013 compared to the same period last year. The cost increase is primarily driven by the continued progress of key development projects within diabetes and biopharmaceuticals, the initiation of the Tresiba® cardiovascular outcomes trial, as well as the expansion of Novo Nordisk’s research activities in the US and China.

Administration costs increased by 13% in local currencies and by 7% in Danish kroner in the third quarter of 2013 compared to the same period last year. The increase in costs is primarily driven by back-office infrastructure costs to support the expansion of the sales organisation in North America and International Operations as well as costs related to new offices in Denmark.

Operating profit in local currencies increased by 12% and by 2% in Danish kroner in the third quarter of 2013 compared to the same period last year.

 

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Outlook
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Sustainability
Equity
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Company announcement No 68 / 2013

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Financial report for the period 1 January 2013 to 30 September 2013
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OUTLOOK

OUTLOOK 2013
The current expectations for 2013 are summarised in the table below:

Expectations are as reported,
if not otherwise stated		  
Current expectations
31 October 2013
  
Previous expectations
8 August 2013
Sales growth        
in local currencies  
11-13%
  
11-13%
as reported   Around 4.5 percentage
points lower
   Around 4 percentage
points lower
Operating profit growth        
in local currencies  
12-15%
  
12-15%
as reported   Around 7 percentage
points lower		   Around 6 percentage
points lower
Net financials   Income of around
DKK 1,100 million		   Income of around
DKK 900 million
Effective tax rate   Around 23%   Around 23%
Capital expenditure   Around DKK 3.5 billion   Around DKK 3.5 billion
Depreciation, amortisation
and impairment losses		   Around DKK 3.0 billion   Around DKK 3.0 billion
Free cash flow   Around DKK 22 billion   Around DKK 22 billion

Sales growth for 2013 is still expected to be 11-13% measured in local currencies. This reflects expectations for continued robust performance for the portfolio of modern insulins and Victoza® as well as a modest sales contribution from Tresiba®. These sales drivers are partly expected to be countered by generic competition to Prandin® in the US, intensifying competition within diabetes care as well as biopharmaceuticals and the macroeconomic conditions in a number of markets in International Operations. Given the current level of exchange rates versus the Danish krone, the reported sales growth is now expected to be around 4.5 percentage points lower than growth measured in local currencies.

For 2013, operating profit growth is still expected to be 12-15% measured in local currencies. This reflects significant sales and marketing investments in the portfolio of modern insulins and Victoza® in the US, the launch of Tresiba® outside the US, sales and marketing investments in China and in a selected number of countries in International Operations as well as a significant increase in costs related to the continued progress of key development projects within diabetes and biopharmaceuticals. Given the current level of exchange rates versus the Danish krone, the reported operating profit growth is now expected to be around 7 percentage points lower than growth measured in local currencies.

For 2013, Novo Nordisk now expects a net financial income of around DKK 1,100 million. The current expectation primarily reflects gains associated with foreign exchange hedging contracts following the depreciation of the Japanese yen and the US dollar

 

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versus the Danish krone compared to the average prevailing exchange rates in 2012. This positive effect is partly offset by losses on commercial balances, primarily related to non-hedged currencies.

The effective tax rate for 2013 is still expected to be around 23%.

Capital expenditure is still expected to be around DKK 3.5 billion in 2013, primarily related to investments in filling capacity and prefilled device production facilities and new offices in Denmark. Depreciation, amortisation and impairment losses are still expected to be around DKK 3.0 billion. Free cash flow is still expected to be around DKK 22 billion.

With regard to the financial outlook for 2014, Novo Nordisk expects to provide detailed guidance on expectations in connection with the release of the full-year financial results for 2013 on 30 January 2014. At present, the preliminary plans for 2014 indicate high single-digit growth in sales and operating profit, both measured in local currencies. The outlook reflects expectations for continued robust performance of the portfolio of modern insulins and Victoza® as well as a positive sales contribution from Tresiba®. These sales drivers are expected to be partly countered by an impact from a more challenging contract environment in the US, generic competition to Prandin® in the US, intensifying competition within both diabetes and biopharmaceuticals as well as the macroeconomic conditions in a number of markets in International Operations. In addition, the outlook for operating profit reflects significant costs related to the continued progress of key late-stage clinical development projects. Given the current level of exchange rates versus the Danish krone, reported growth in operating profit in 2014 is expected to be approximately 5% lower than the growth measured in local currencies. The currency impact on reported operating profit growth is expected to be partly offset by a net gain on foreign exchange contracts hedging operating cash flows in 2014. Income recognition of this net gain has been deferred to 2014 when the hedged operating cash flows will be realised. The net hedging gain pertaining to 2014 is currently expected to be around DKK 900 million.

All of the above expectations are based on the assumption that the global economic environment will not significantly change business conditions for Novo Nordisk during 2013 and 2014, and that currency exchange rates, especially for the US dollar, will remain at the current level versus the Danish krone. Please refer to appendix 7 for key currency assumptions.

Novo Nordisk has hedged expected net cash flows in a number of key invoicing currencies and, all other things being equal, movements in these key invoicing currencies will impact Novo Nordisk’s operating profit as outlined in the table below.

 

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Key invoicing
currencies
Annual impact on Novo Nordisk’s
operating profit of a 5%
movement in currency
Hedging period
(months)
 
USD DKK 1,200 million
12
  
JPY DKK 200 million
13
  
CNY DKK 180 million
12*
  
GBP DKK 85 million
12
  
CAD DKK 55 million
10
  
 

* USD used as proxy when hedging Novo Nordisk’s CNY currency exposure

The financial impact from foreign exchange hedging is included in ‘Net financials’. R&D


RESEARCH & DEVELOPMENT UPDATE

DIABETES CARE: INSULIN AND GLP-1

Annual meeting of the European Association for the Study of Diabetes (EASD)
In September, at the annual meeting of the European Association for the Study of Diabetes (EASD) held in Barcelona, Spain, Novo Nordisk presented results from the company’s diabetes research and development activities in 49 accepted abstracts, including nine oral presentations. Among the key presentations was the presentation of results from the DUAL™ I phase 3a trial for IDegLira, a combination product of insulin degludec (Tresiba®), the once-daily new-generation basal insulin analogue, with an ultra-long duration of action, and liraglutide (Victoza®), the once-daily human GLP-1 analogue. Furthermore, presentations included results from a phase 3a trial comparing Ryzodeg® with NovoMix® and the baseline characteristics for LEADER®, the ongoing cardiovascular outcomes trial for Victoza®.

DEVOTE, the Tresiba® cardiovascular outcomes trial initiated
In October, Novo Nordisk initiated DEVOTE, the cardiovascular outcomes trial for Tresiba®. As previously announced, DEVOTE is a double-blind trial, using insulin glargine as comparator and is expected to include around 7,500 type 2 diabetes patients that have existing, or high risk of, cardiovascular disease. The primary endpoint of the study is major adverse cardiovascular events (cardiovascular death, non-fatal myocardial infarction or non-fatal stroke). The study will be event-driven and complete when a predefined number of major adverse cardiovascular events has occurred. Novo Nordisk expects to have sufficient data to support a prespecified interim analysis within two to three years and to complete the study within four to six years.

Phase 3 initiated for faster-acting insulin aspart (NN1218)
In August, onset®, the phase 3 programme for faster-acting insulin aspart was initiated. Two of the three initiated trials investigate the efficacy and safety of faster-acting insulin aspart compared to insulin aspart in combination with basal insulin in 1,100 people with type 1 diabetes for 52 weeks and 670 people with type 2 diabetes for 26 weeks respectively. In the third trial, faster-acting insulin aspart used as part of a basal-bolus

 

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regimen is compared with basal insulin treatment for 18 weeks in 220 people with type 2 diabetes.

Phase 4 trial comparing Victoza® with lixisenatide initiated
In October, Novo Nordisk initiated a phase 4 trial comparing Victoza 1.8 mg with lixisenatide 20 microgram. The randomised, open-label trial will investigate the efficacy and safety of Victoza® versus lixisenatide treatment for 26 weeks as add-on to metformin in 400 people with type 2 diabetes.

BIOPHARMACEUTICALS: HAEMOPHILIA
Turoctocog alfa approved as Novoeight® in the US and received positive opinion in the EU
In October, the U.S. Food and Drug Administration (FDA) approved Novo Nordisk’s Biologics License Application (BLA) for recombinant coagulation factor VIII, turoctocog alfa. Novoeight® is approved for use in adults and children with haemophilia A for control and prevention of bleeding, perioperative management as well as routine prophylaxis to prevent or reduce the frequency of bleeding episodes. Novoeight® is the first biological product approved under PDUFA V, which was enacted in 2012.

In Europe, the Committee for Medicinal Products for Human Use (CHMP) under the European Medicines Agency (EMA) adopted a positive opinion for the product and recommended marketing authorisation for the treatment and prophylaxis of bleeding in patients with haemophilia A. Novo Nordisk expects to receive the final marketing authorisation from the European Commission within the coming months.

Novo Nordisk expects to launch the product in Europe early 2014 and in the US in the first half of 2015.

NovoThirteen® resubmitted in the US
In October, Novo Nordisk resubmitted the application for approval of NovoThirteen® in the US to the FDA following the receipt of a complete response letter, which was announced in August 2013.

SUSTAINABILITY UPDATE

Continued job creation at Novo Nordisk
The number of full-time equivalent employees was 36,851 as of 30 September 2013 compared to 33,501 as of 30 September 2012. New hiring was led by expansion in the sales affiliates in US, China and countries in the International Operations region. Furthermore, the research & development and production activities in Denmark contributed to growth in the number of employees.

New initiatives within clinical data transparency
All Novo Nordisk trial data are today made public in the form of scientific publications and trial summaries (synopses). In addition, Novo Nordisk will from 1 March 2014 make the actual clinical study reports publically available for trials completed after 1 January 2006 on product indications approved both in the EU and US. The clinical study reports will be

 

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redacted to assure personal data protection for patients and healthcare personnel participating in the trials.

Furthermore, Novo Nordisk will from 1 March 2014, upon request, make raw data from trials completed after 2001 available to bona fide researchers with legitimate and valid research proposals. The data will be made available after research proposals have been reviewed by an independent expert governing body established by Novo Nordisk.

The development of future products that can improve patient care depends strongly on the collaboration with patients, study sites and investigators. Novo Nordisk is expanding activities on clinical data transparency to assure confidence in our scientific handling and communication of data and to ensure maximal benefit for future medical progress from the data captured in the trials. Novo Nordisk’s full policy on the sharing of clinical trials data can found at http://www.novonordisk-trials.com/WebSite/Content/NN-code-of-conduct.aspx.

Novo Nordisk and Indonesian Ministry of Health join to address diabetes challenges
On 3 September, the Indonesian Ministry of Health and Novo Nordisk launched a joint platform to address the rising prevalence of diabetes and its associated costs in the country of 242 million people. It is estimated that close to eight million people in Indonesia have diabetes of which less than 1% achieve treatment targets. The launch brought together key public and private stakeholders and commitment was made to increase public awareness, build capacity among healthcare professionals and improve treatments, eg by upgrading 15 government-mandated community health clinics to become diabetes clinics.

Novo Nordisk recognised in the Dow Jones Sustainability Index
Novo Nordisk received top placement in the Dow Jones Sustainability Index (DJSI), an investor focused benchmark of the world’s leading companies based on long-term economic, environmental and social criteria.

As last year, Novo Nordisk was ranked second in the pharmaceutical sector and recognised as being best in class in a number of categories. This year, Novo Nordisk was considered best in class across sectors in the categories ‘Environmental Policy/Management System’, ‘Human Capital Development’ and ‘Social Reporting’.

EQUITY

Total equity was DKK 39,125 million at the end of the third quarter of 2013, equivalent to 57.4% of total assets, compared to 53.5% at the end of the third quarter of 2012. Please refer to appendix 5 for further elaboration of changes in equity.

Change in trading units
In order to secure liquidity for both the Novo Nordisk B shares and American Depositary Receipts (ADRs) and bring price levels in line with market practice for especially the

 

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ADRs, the Board of Directors has decided to split the share in a five-for-one ratio. The trading unit of the Novo Nordisk B shares listed on NASDAQ OMX Copenhagen will be changed from DKK 1 to DKK 0.20. The ratio of B shares to ADRs listed on the New York Stock Exchange will remain 1:1. These changes in trading units are expected to take effect as of 2 January 2014 for the Novo Nordisk B shares and as of 9 January 2014 for the ADRs.

2013 share repurchase programme
On 8 August, as part of an overall programme of DKK 14 billion to be executed during a 12-month period beginning 31 January 2013, Novo Nordisk announced a share repurchase programme of up to DKK 2.5 billion to be executed from 8 August to 29 October 2013. The purpose of the programme is to reduce the company’s share capital. Under the programme, announced 8 August, Novo Nordisk has repurchased B shares for an amount of DKK 2.5 billion in the period from 8 August to 29 October 2013. The programme announced on 8 August was concluded on 29 October 2013.

As of 29 October 2013, Novo Nordisk A/S and its wholly-owned affiliates owned 18,880,918 of its own B shares, corresponding to 3.4% of the total share capital.

As of 29 October 2013, Novo Nordisk A/S has repurchased a total of 11,438,443 B shares equal to a transaction value of DKK 11.0 billion under the DKK 14 billion programme beginning 31 January 2013.

As part of the execution of Novo Nordisk A/S’ ongoing share repurchase programme of DKK 14.0 billion to be executed during a 12-month period beginning 31 January 2013, a new share repurchase programme has been initiated in accordance with the provisions of the European Commission’s regulation No 2273/2003 of 22 December 2003, also referred to as the Safe Harbour rules. For that purpose, Novo Nordisk A/S has appointed Skandinaviska Enskilda Banken, Denmark, as lead manager to execute the programme independently and without influence from Novo Nordisk. Under the agreement, Skandinaviska Enskilda Banken, Denmark, will repurchase B shares on behalf of Novo Nordisk A/S for an amount of up to DKK 2.8 billion during the trading period starting 31 October 2013 and ending on 28 January 2014. A maximum of 122,645 shares of DKK 1, currently equalling 122,645 shares prior to the change in trading unit, can be bought during one single trading day, equal to 20% of the average daily trading volume of Novo Nordisk B shares on NASDAQ OMX Copenhagen during the month of September 2013. A maximum of 7,236,055 shares of DKK 1 in total, currently equalling 7,236,055 shares prior to the change in trading unit, can be bought in the period from 31 October 2013 to 28 January 2014. At least once every seven trading days, Novo Nordisk A/S will issue an announcement in respect of the transactions made under the repurchase programme.

In addition to the agreement with Skandinaviska Enskilda Banken of repurchasing shares of an amount of up to DKK 2.8 billion, Novo Nordisk expects to purchase B-shares from employees in November for approximately DKK 0.2 billion. The purchase is related to a 2010 employee share programme for employees outside Denmark. Novo Nordisk will purchase the shares at the average trading price of Novo Nordisk B shares on NASDAQ OMX Copenhagen during the period starting on 31 October 2013 and ending on 14

 

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November 2013. The repurchase of shares in this transaction is not part of the Safe Harbour programme, but is part of the overall DKK 14 billion share repurchase programme.


LEGAL MATTERS AND EVENTS AFTER THE END OF THE THIRD QUARTER

Product liability lawsuits related to hormone therapy products
As of 28 October 2013, Novo Nordisk Inc., along with a majority of the hormone therapy product manufacturers in the US, is a defendant in product liability lawsuits related to hormone therapy products. These lawsuits currently involve a total of 13 individuals who allege use of a Novo Nordisk hormone therapy product. The 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.). In addition, 13 individuals currently allege, in relation to similar lawsuits against Pfizer Inc., that they have also used a Novo Nordisk hormone therapy product. Pfizer Inc. has publicly announced the settlement of many of its hormone therapy cases. The continued reduction in pending cases is the result of Pfizer Inc. settling several cases that also involve Novo Nordisk’s products. Currently, Novo Nordisk does not have any trials scheduled in 2013. Novo Nordisk does not expect the pending claims to have a material impact on its financial position, operating profit and cash flow.

Patent infringement lawsuits related to Prandin®
In the patent infringement lawsuit against Caraco Pharmaceutical Laboratories, Ltd. (Caraco) regarding Caraco’s abbreviated new drug application (ANDA) for a generic version of Prandin® (repaglinide), Novo Nordisk petitioned the Federal Circuit for an en banc rehearing of the 3-judge 2-1 decision finding invalid the Novo Nordisk patent related to the use of repaglinide in combination with metformin for the treatment of type 2 diabetes. On 18 September, the Federal Circuit denied Novo Nordisk’s petition. While Novo Nordisk continues to believe in the validity of its patent, it will not pursue further appeals. Generic repaglinide products are currently available in the US market.

Product liability lawsuits related to Victoza®
Novo Nordisk is per 28 October 2013 named in 19 single-plaintiff lawsuits primarily seeking to recover damages for pancreatic cancer experienced by patients who allege to have been prescribed Victoza® and other GLP-1/DPP-IV products. Twelve of the 19 Novo Nordisk cases include other defendants, and most cases have been filed in California federal court. Currently, Novo Nordisk does not have any trials scheduled in 2013. Novo Nordisk does not expect the pending claims to have a material impact on its financial position, operating profit and cash flow.

Recall of NovoMix® 30 batches in some European countries
On 25 October 2013, Novo Nordisk initiated a recall of a number of batches of NovoMix® 30 from 13 European countries. The products were recalled after a quality control conducted by Novo Nordisk showed that a small percentage (0.14%) of the products in these batches did not meet the specifications for insulin strength. To protect patient safety, Novo Nordisk recalled all products in the affected batches from wholesalers, pharmacies and patients. Novo Nordisk does not expect the recall to have a material impact on its financial position, operating profit and cash flow.

 

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FORWARD-LOOKING STATEMENTS
Novo Nordisk’s reports filed with or furnished to the US Securities and Exchange Commission (SEC), including this document as well as the company’s Annual Report 2012 and Form 20-F, both filed with the SEC in February 2013, and written information released, or oral statements made, to the public in the future by or on behalf of Novo Nordisk, may contain forward-looking statements. Words such as ‘believe’, ‘expect’, ‘may’, ‘will’, ‘plan’, ‘strategy’, ‘prospect’, ‘foresee’, ‘estimate’, ‘project’, ‘anticipate’, ‘can’, ‘intend’, ‘target’ and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward-looking statements. Examples of such forward-looking statements include, but are not limited to:

• statements of targets, plans, objectives or goals for future operations, including those related to Novo Nordisk’s products, product research, product development, product introductions and product approvals as well as cooperation in relation thereto
• statements containing projections of or targets for revenues, costs, income (or loss), earnings per share, capital expenditures, dividends, capital structure, net financials and other financial measures
• statements regarding future economic performance, future actions and outcome of contingencies such as legal proceedings
• statements regarding the assumptions underlying or relating to such statements.

In this document, examples of forward-looking statements can be found under the headings ‘Outlook’, ‘Research and Development update’, Equity’ and ‘Legal matters and events after the end of third quarter’.

These statements are based on current plans, estimates and projections. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific. Novo Nordisk cautions that a number of important factors, including those described in this document, could cause actual results to differ materially from those contemplated in any forward-looking statements.

Factors that may affect future results include, but are not limited to, global as well as local political and economic conditions, including interest rate and currency exchange rate fluctuations, delay or failure of projects related to research and/or development, unplanned loss of patents, interruptions of supplies and production, product recalls, unexpected contract breaches or terminations, government-mandated or market-driven price decreases for Novo Nordisk’s products, introduction of competing products, reliance on information technology, Novo Nordisk’s ability to successfully market current and new products, exposure to product liability and legal proceedings and investigations, changes in governmental laws and related interpretation thereof, including on reimbursement, intellectual property protection and regulatory controls on testing, approval, manufacturing and marketing, perceived or actual failure to adhere to ethical marketing practices, investments in and divestitures of domestic and foreign companies, unexpected growth in costs and expenses, failure to recruit and retain the right employees, and failure to maintain a culture of compliance.

Please also refer to the overview of risk factors in the ‘Risk overview’ on p 43 of the Annual Report 2012 available on the company’s 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.

 

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MANAGEMENT STATEMENT

The Board of Directors and Executive Management have reviewed and approved the financial report of Novo Nordisk A/S for the first nine months of 2013. The financial report has not been audited or reviewed by the company’s independent auditors.

The financial report for the first nine months of 2013 has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’ and accounting policies set out in the Annual Report 2012 of Novo Nordisk. Furthermore, the financial report for the first nine months of 2013 and Management’s Review are prepared in accordance with additional Danish disclosure requirements for interim reports of listed companies.

In our opinion, the accounting policies used are appropriate and the overall presentation of the financial report for the first nine months of 2013 is adequate. Furthermore, in our opinion, Management's Review includes a true and fair account of the development in the operations and financial circumstances, of the results for the period and of the financial position of the Group as well as a description of the most significant risks and elements of uncertainty facing the Group in accordance with Danish disclosure requirements for listed companies.

Besides what has been disclosed in the quarterly financial reports, no changes in the Group’s most significant risks and uncertainties have occurred relative to what was disclosed in the consolidated annual report for 2012.

Bagsværd, 31 October 2013

 

Executive Management:    
Lars Rebien Sørensen
Jesper Brandgaard
Lars Fruergaard Jørgensen
President and CEO
CFO
 
Lise Kingo
Jakob Riis
Kåre Schultz
 
 
Mads Krogsgaard Thomsen

Board of Directors:    
Göran Ando
Jeppe Christiansen
Bruno Angelici
Chairman
Vice chairman
 
Henrik Gürtler
Liz Hewitt
Ulrik Hjulmand-Lassen
 
Thomas Paul Koestler
Anne Marie Kverneland
Søren Thuesen Pedersen
 
Hannu Ryöppönen
Stig Strøbæk

 

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FINANCIAL INFORMATION

APPENDIX 1: QUARTERLY NUMBERS IN DKK

 
(Amounts in DKK million, except number of full-time equivalent employees, earnings per share and number of shares outstanding).          
  2013   2012   % change
Q3 2013 vs
Q3 2012		  
  Q3   Q2   Q1   Q4   Q3   Q2   Q1
 
 
 
 
Sales 20,511   21,380   19,983   20,962   19,845   19,468   17,751   3%
Gross profit 16,986   17,774   16,374   17,809   16,360   16,044   14,348   4%
Gross margin 82.8% 83.1% 81.9% 85.0% 82.4% 82.4% 80.8%    
                                 
Sales and distribution costs 5,529   5,834   5,530   6,192   5,299   5,203   4,850   4%
Percentage of sales 27.0% 27.3% 27.7% 29.5% 26.7% 26.7% 27.3%    
Research and development costs 2,795   2,715   2,657   3,210   2,617   2,563   2,507   7%
Percentage of sales 13.6% 12.7% 13.3% 15.3% 13.2% 13.2% 14.1%    
Administrative costs 822   815   801   991   766   779   776   7%
Percentage of sales 4.0% 3.8% 4.0% 4.7% 3.9% 4.0% 4.4%    
Licence income and other operating income 152   175   176   156   186   154   170   (18% )
                                 
Operating profit 7,992   8,585   7,562   7,572   7,864   7,653   6,385   2%
Operating margin 39.0% 40.2% 37.8% 36.1% 39.6% 39.3% 36.0%    
                                 
Financial income 418   363   315   17   (85 ) 146   47  
N/A
  
Financial expenses 111   267   108   137   420   856   375   (74% )
Net financials 307   96   207   (120 ) (505 ) (710 ) (328 )
N/A
  
                                 
Profit before income taxes 8,299   8,681   7,769   7,452   7,359   6,943   6,057   13%
                                 
Net profit 6,415   6,734   5,982   5,755   5,667   5,346   4,664   13%
Depreciation, amortisation and impairment losses 643   676   691   755   644   656   638   0%
Capital expenditure 908   778   782   1,006   942   855   516   (4% )
Net cash generated from operating activities1 6,217   7,283   7,070   1,514   7,962   7,151   5,587   (22% )
Free cash flow1 5,219   6,423   6,178   408   6,926   6,273   5,038   (25% )
Total assets 68,134   64,289   62,447   65,669   66,620   60,978   61,210   2%
Total equity 39,125   35,357   33,801   40,632   35,660   31,334   32,358   10%
Equity ratio 57.4% 55.0% 54.1% 61.9% 53.5% 51.4% 52.9%    
                                 
Full-time equivalent employees end of period 36,851   35,869   35,154   34,286   33,501   32,819   32,252   10%
                                 
Basic earnings per share/ADR (in DKK) 12.03   12.52   11.04   10.59   10.40   9.72   8.38   16%
Diluted earnings per share/ADR (in DKK) 11.96   12.45   10.98   10.53   10.33   9.67   8.32   16%
Average number of shares outstanding (million) 533.5   537.7   541.6   542.9   544.6   549.1   556.7   (2% )
Average number of diluted shares                                
outstanding (million) 536.3   540.5   544.7   546.0   547.8   552.4   560.5   (2% )
                                 
Sales by business segment:                                
  Modern insulins (insulin analogues) 9,393   9,626   8,991   9,462   8,879   8,613   7,867   6%
  Human insulins 2,572   2,779   2,824   3,009   2,794   2,781   2,718   (8% )
  Victoza®   2,847   2,877   2,678   2,709   2,503   2,293   1,990   14%
  Protein-related products 666   643   606   621   644   621   625   3%
  Oral antidiabetic products (OAD) 504   681   694   670   719   653   716   (30% )
  Diabetes care total 15,982   16,606   15,793   16,471   15,539   14,961   13,916   3%
                                 
  NovoSeven® 2,428   2,542   2,027   2,420   2,153   2,451   1,909   13%
  Norditropin® 1,436   1,479   1,537   1,461   1,451   1,440   1,346   (1% )
  Other biopharmaceuticals 665   753   626   610   702   616   580   (5% )
  Biopharmaceuticals total 4,529   4,774   4,190   4,491   4,306   4,507   3,835   5%
                                 
Sales by geographic segment:                                
  North America 9,763   10,038   9,009   9,559   8,981   8,356   7,324   9%
  Europe 4,994   5,123   4,761   5,237   4,793   5,081   4,596   4%
  International Operations 2,697   3,077   3,094   2,894   2,695   2,757   2,734   0%
  Japan & Korea 1,312   1,368   1,239   1,698   1,710   1,724   1,485   (23% )
  Region China 1,745   1,774   1,880   1,574   1,666   1,550   1,612   5%
                                 
Segment operating profit:                                
  Diabetes care 5,886   5,965   5,502   5,420   5,768   5,270   4,638   2%
  Biopharmaceuticals 2,106   2,620   2,060   2,152   2,096   2,383   1,747   0%

 

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APPENDIX 2: INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME

 
 
9M
9M
Q3
  
Q3
  
DKK million
2013
  
2012
  
2013
  
2012
  
 
Income statement                
Sales 61,874   57,064   20,511   19,845  
Cost of goods sold 10,740   10,312   3,525   3,485  
 
Gross profit 51,134   46,752   16,986   16,360  
                 
Sales and distribution costs 16,893   15,352   5,529   5,299  
Research and development costs 8,167   7,687   2,795   2,617  
Administrative costs 2,438   2,321   822   766  
Licence income and other operating income 503   510   152   186  
 
Operating profit 24,139   21,902   7,992   7,864  
                 
Financial income 1,096   108   418   (85 )
Financial expenses 486   1,651   111   420  
 
Profit before income taxes 24,749   20,359   8,299   7,359  
                 
Income taxes
 5,618   4,682   1,884   1,692  
 
NET PROFIT 19,131   15,677   6,415   5,667  
                 
Basic earnings per share (DKK) 35.59   28.50   12.03   10.40  
Diluted earnings per share (DKK) 35.39   28.32   11.96   10.33  

Segment Information

                   
  Segment sales:                
    Diabetes care
48,381
  
44,416
  
15,982
  
15,539
  
    Biopharmaceuticals
13,493
  
12,648
  
4,529
  
4,306
  
                   
  Segment operating profit:                
    Diabetes care 17,353   15,676   5,886   5,768  
    Operating margin 35.9% 35.3% 36.8% 37.1%  
                   
    Biopharmaceuticals 6,786   6,226   2,106   2,096  
    Operating margin 50.3% 49.2% 46.5% 48.7%  
                   
 
Total segment operating profit
 24,139   21,902   7,992   7,864  
                   

Statement of comprehensive income

Net profit for the period
19,131
  
15,677
  
6,415
  
5,667
  
                 
  Other comprehensive income:                
  Items that will not be reclassified subsequently to the Income statement:                
  Remeasurements on defined benefit plans 23   –   75   –  
                 
  Items that will be reclassified subsequently to the Income statement,
  when specific conditions are met:		                
  Exchange rate adjustments of investments in subsidiaries (234 ) (137 ) (224 ) (28 )
  Cash flow hedges, realisation of previously deferred (gains)/losses (698 ) 1,090   (281 ) 252  
  Cash flow hedges, deferred gains/(losses) incurred during the period 756   34   556   562  
  Other items (9 ) 23   95   5  
  Tax on other comprehensive income, income/(expense) (152 ) (282 ) (138 ) (231 )
 
  Other comprehensive income for the period, net of tax (314 ) 728   83   560  
 
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 18,817   16,405   6,498   6,227  

 

 

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Page 23 of 28

APPENDIX 3: BALANCE SHEET

 
DKK million
30 Sep 2013
  
31 Dec 2012
  
 
ASSETS        
Intangible assets 1,682   1,495  
Property, plant and equipment 21,870   21,539  
Deferred income tax assets1 3,471   2,244  
Other financial assets 204   228  
 
TOTAL NON-CURRENT ASSETS 27,227   25,506  
         
Inventories 9,340   9,543  
Trade receivables 9,721   9,639  
Tax receivables1 4,220   1,240  
Other receivables and prepayments 2,963   2,705  
Marketable securities 4,054   4,552  
Derivative financial instruments 1,181   931  
Cash at bank and on hand 9,428   11,553  
 
TOTAL CURRENT ASSETS
 40,907   40,163  
 
TOTAL ASSETS
 68,134   65,669  
 
         
EQUITY AND LIABILITIES        
Share capital 550   560  
Treasury shares (17 ) (17 )
Retained earnings 37,818   39,001  
Other reserves 774   1,088  
 
TOTAL EQUITY 39,125   40,632  
         
Deferred income tax liabilities1 448   732  
Retirement benefit obligations 748   760  
Provisions 2,154   1,907  
 
TOTAL NON-CURRENT LIABILITIES 3,350   3,399  
         
Current debt 670   500  
Trade payables 2,931   3,859  
Tax payables1 4,956   593  
Other liabilities 9,336   8,982  
Derivative financial instruments 1   48  
Provisions 7,765   7,656  
 
TOTAL CURRENT LIABILITIES 25,659   21,638  
         
TOTAL LIABILITIES
 29,009   25,037  
 
TOTAL EQUITY AND LIABILITIES
 68,134   65,669  
 

1Following development in on-going tax disputes, uncertain tax positions previously presented net as part of deferred tax liabilities are as of Q3 2013 presented individually as part of deferred tax asset, current tax receivable and current tax payables. Comparative figures have not been restated.

 

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APPENDIX 4: STATEMENT OF CASH FLOWS

 
DKK million
9M 2013
  
9M 2012
  
 
         
Net profit 19,131   15,677  
         
Adjustment for non-cash items 7,854   9,019  
Change in working capital (554 ) (666 )
Interest received 111   192  
Interest paid (30 ) (32 )
Income taxes paid (5,942 ) (3,490 )
 
Net cash generated from operating activities 20,570   20,700  
         
Proceeds from intangible assets and other financial assets 29   -  
Purchase of intangible assets and other financial assets (311 ) (150 )
Proceeds from sale of property, plant and equipment 10   17  
Purchase of property, plant and equipment (2,478 ) (2,330 )
Net change in marketable securities 498   10  
 
Net cash used in investing activities (2,252 ) (2,453 )
         
Purchase of treasury shares, net (10,905 ) (10,690 )
Dividends paid (9,715 ) (7,742 )
 
Net cash used in financing activities (20,620 ) (18,432 )
         
NET CASH GENERATED FROM ACTIVITIES (2,302 ) (185 )
         
Cash and cash equivalents at the beginning of the period 11,053   13,057  
Exchange gain/(loss) on cash and cash equivalents 7   23  
 
Cash and cash equivalents at the end of the period 8,758   12,895  
         
Additional information:        
Cash and cash equivalents at the end of the period 8,758   12,895  
Marketable securities at the end of the period 4,054   4,063  
Undrawn committed credit facilities 4,848   4,846  
 
FINANCIAL RESOURCES AT THE END OF THE PERIOD 17,660   21,804  
         
Net cash generated from operating activities 20,570   20,700  
Net cash used in investing activities (2,252 ) (2,453 )
Net change in marketable securities (498 ) (10 )
 
FREE CASH FLOW
 17,820   18,237  
 

 

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APPENDIX 5: STATEMENT OF CHANGES IN EQUITY

 
              Other reserves      
             
     
DKK million
Share
capital
Treasury
shares
Retained
earnings
Exchange
rate adjust-
ments
Cash flow
hedges
Tax and
other
adjust-
ments
Total
other
reserves
Total
  
 
9M 2013                                
Balance at the beginning of the period 560   (17 ) 39,001   226   847   15   1,088   40,632  
Net profit for the period         19,131                   19,131  
Other comprehensive income for the period, net of tax             (234 ) 58   (138 ) (314 ) (314 )
 
Total comprehensive income for the period 560   (17 ) 58,132   (8 ) 905   (123 ) 774   59,449  
                                 
Transactions with owners, recognised directly in equity:                                
Dividends         (9,715 )                 (9,715 )
Share-based payment         296                   296  
Purchase of treasury shares     (11 ) (10,941 )                 (10,952 )
Sale of treasury shares     1   46                   47  
Reduction of the B share capital (10 ) 10                       –  
 
Balance at the end of the period 550   (17 ) 37,818   (8 ) 905   (123 ) 774   39,125  
 

 
 
              Other reserves      
             
     
DKK million
Share
capital
Treasury
shares
Retained
earnings
Exchange
rate adjust-
ments
Cash flow
hedges
Tax and
other
adjust-
ments
Total
other
reserves
Total
  
 
9M 2012                                
Balance at the beginning of the period 580   (24 ) 37,111   398   (1,184 ) 567   (219 ) 37,448  
Net profit for the period         15,677                   15,677  
Other comprehensive income for the period, net of tax             (137 ) 1,124   (259 ) 728   728  
 
Total comprehensive income for the period 580   (24 ) 52,788   261   (60 ) 308   509   53,853  
                                 
Transactions with owners, recognised directly in equity:                                
Dividends         (7,742 )                 (7,742 )
Share-based payment         239                   239  
Purchase of treasury shares     (13 ) (10,774 )                 (10,787 )
Sale of treasury shares     1   96                   97  
Reduction of the B share capital (20 ) 20                       –  
 
Balance at the end of the period 560   (16 ) 34,607   261   (60 ) 308   509   35,660  
 

 

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Page 26 of 28

APPENDIX 6: REGIONAL SALES SPLIT

 
Q3 2013 sales split per region
                        
 
DKK million
Total
  
North
America
 
Europe
  
Inter-
national
Operations
  
Japan &
Korea
 
Region China
  
 
The diabetes care segment                        
    NovoRapid ® 4,093   2,433   954   359   232   115  
    % change in local currencies 8% 9% 5% 16% 2% 19%
    NovoMix ®     2,354   652   600   409   189   504  
    % change in local currencies 7% 7% (2% ) 13% (7% ) 20%
    Levemir ® 2,946   1,807   720   289   68   62  
    % change in local currencies 27% 44% 3% 20% (11% ) 34%
  Modern insulin 9,393   4,892   2,274   1,057   489   681  
  % change in local currencies 13% 19% 2% 16% (4% ) 21%
  Human insulin 2,572   453   602   671   117   729  
  % change in local currencies (2% ) (5% ) (5% ) (1% ) (17% ) 6%
  Victoza® 2,847   1,822   746   173   78   28  
  % change in local currencies 20% 22% 24% 12% (11% ) 61%
  Other diabetes care 1,170   379   222   186   127   256  
  % change in local currencies (7% ) (22% ) (3% ) 27% 40% (20% )
  Diabetes care total 15,982   7,546   3,844   2,087   811   1,694  
  % change in local currencies 10% 15% 4% 11% (2% ) 6%
                         
The biopharmaceuticals segment                        
  NovoSeven® 2,428   1,252   579   382   169   46  
  % change in local currencies 20% 17% 20% 27% 20% 47%
  Norditropin® 1,436   567   411   154   301   3  
  % change in local currencies 9% 22% 1% (1% ) 7% (25% )
  Other biopharmaceuticals 665   398   160   74   31   2  
  % change in local currencies 2% 5% 6% 30% (45% ) 0%
  Biopharmaceuticals total 4,529   2,217   1,150   610   501   51  
  % change in local currencies 13% 16% 11% 19% 4% 42%
 
Total sales 20,511   9,763   4,994   2,697   1,312   1,745  
  % change in local currencies 10% 15% 6% 12% 0% 7%
 

 
 
9M 2013 sales split per region
                        
 
DKK million
Total
  
North
America
 
Europe
  
Inter-
national
Operations
  
Japan &
Korea
 
Region China
  
 
The diabetes care segment                        
    NovoRapid ® 12,393   7,350   2,807   1,176   698   362  
    % change in local currencies 13% 16% 4% 24% 0% 32%
    NovoMix ® 7,238   2,026   1,819   1,353   591   1,449  
    % change in local currencies 10% 16% (3% ) 16% (5% ) 24%
    Levemir ® 8,379   4,885   2,146   947   222   179  
    % change in local currencies 22% 32% 4% 28% (6% ) 43%
  Modern insulin 28,010   14,261   6,772   3,476   1,511   1,990  
  % change in local currencies 15% 21% 2% 22% (3% ) 27%
  Human insulin 8,175   1,415   1,812   2,303   370   2,275  
  % change in local currencies 2% 13% (8% ) 5% (21% ) 7%
  Victoza® 8,402   5,383   2,130   546   245   98  
  % change in local currencies 28% 30% 25% 36% (8% ) 100%
  Other diabetes care 3,794   1,384   656   532   335   887  
  % change in local currencies (1% ) (2% ) (10% ) 14% 12% (3% )
  Diabetes care total 48,381   22,443   11,370   6,857   2,461   5,250  
  % change in local currencies 13% 21% 3% 16% (5% ) 12%
                         
The biopharmaceuticals segment                        
  NovoSeven® 6,997   3,475   1,740   1,195   452   135  
  % change in local currencies 11% 13% 7% 13% 11% 4%
  Norditropin® 4,452   1,619   1,284   623   916   10  
  % change in local currencies 12% 28% 1% 10% 7% (9% )
  Other biopharmaceuticals 2,044   1,273   484   193   90   4  
  % change in local currencies 12% 21% 6% 21% (35% ) 50%
  Biopharmaceuticals total 13,493   6,367   3,508   2,011   1,458   149  
  % change in local currencies 12% 18% 5% 13% 4% 3%
 
Total sales 61,874   28,810   14,878   8,868   3,919   5,399  
% change in local currencies 13% 20% 3% 15% (2% ) 12%
 

 

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Page 27 of 28

APPENDIX 7: KEY CURRENCY ASSUMPTIONS

 
 
DKK per 100
2012 average
exchange rates
YTD 2013 average
exchange rates
as of 28 October 2013
Current
exchange rates
as of 28 October 2013
  
 
USD 579   564   541  
             
JPY 7.27   5.84   5.54  
             
CNY 91.8   91.6   88.9  
             
GBP 918   876   874  
             
CAD 580   551   518  

 

 

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APPENDIX 8: QUARTERLY NUMBERS IN USD (ADDITIONAL INFORMATION)

Key figures are translated into USD as additional information - the translation is based on the average exchange rate for income statement and the exchange rate at the balance sheet date for balance sheet items. The specified percent changes are based on the changes in the 'Quarterly numbers in DKK', see appendix 1.

(Amounts in USD million, except full-time equivalent employees, earnings per share and number of shares outstanding).          
% change
 
2013
  
2012
   Q3 2013 vs
  Q3   Q2   Q1   Q4   Q3   Q2   Q1   Q3 2012
 
 
 
Sales 3,643   3,749   3,537   3,641   3,337   3,362   3,129   3%
Gross profit 3,017   3,117   2,898   3,093   2,752   2,771   2,529   4%
Gross margin 82.8% 83.1% 81.9% 85.0% 82.4% 82.4% 80.8%  
Sales and distribution costs 982   1,024   978   1,075   890   900   854   4%
Percentage of sales 27.0% 27.3% 27.7% 29.5% 26.7% 26.7% 27.3%  
Research and development costs 497   476   470   557   440   442   442   7%
Percentage of sales 13.6% 12.7% 13.3% 15.3% 13.2% 13.2% 14.1%  
Administrative costs 145   143   142   172   129   134   137   7%
Percentage of sales 4.0% 3.8% 4.0% 4.7% 3.9% 4.0% 4.4%  
Licence income and other operating income 27   31   31   27   31   27   30   (18%
)
Operating profit 1,420   1,505   1,339   1,316   1,324   1,322   1,126   2%
Operating margin 39.0% 40.2% 37.8% 36.1% 39.6% 39.3% 36.0%  
                               
Financial income 73   65   55   3   (15 ) 26   8  
N/A
Financial expenses 20   47   19   24   70   149   66   (74%
)
Net financials 53   18   36   (21 ) (85 ) (123 ) (58 )
N/A
Profit before income taxes 1,473   1,523   1,375   1,295   1,239   1,199   1,068   13%
Net profit 1,139   1,181   1,059   1,000   954   924   822   13%
                               
Depreciation, amortisation and impairment losses 114   119   122   131   108   114   112   0%
Capital expenditure 161   137   138   175   159   148   91   (4%
)
Net cash generated from operating activities1 1,105   1,277   1,251   270   1,343   1,237   985   (22%
)
Free cash flow1 927   1,126   1,094   78   1,168   1,085   888   (25%
)
Total assets 12,338   11,274   10,698   11,604   11,554   10,328   10,988   2%
Total equity 7,085   6,200   5,791   7,180   6,185   5,307   5,809   10%
Equity ratio 57.4% 55.0% 54.1% 61.9% 53.5% 51.4% 52.9%  
                               
Full-time equivalent employees end of period 36,851   35,869   35,154   34,286   33,501   32,819   32,252   10%
                               
Basic earnings per share/ADR (in USD) 2.14   2.20   1.95   1.84   1.75   1.68   1.48   16%
Diluted earnings per share/ADR (in USD) 2.12   2.19   1.94   1.83   1.74   1.67   1.47   16%
Average number of shares outstanding (million) 533.5   537.7   541.6   542.9   544.6   549.1   556.7   (2%
)
Average number of diluted shares outstanding (million) 536.3   540.5   544.7   546.0   547.8   552.4   560.5   (2%
)
                               
Sales by business segment:                              
  Modern insulins (insulin analogues) 1,669   1,688   1,591   1,644   1,493   1,487   1,387   6%
  Human insulins 457   487   500   523   469   479   479   (8%
)
  Victoza® 505   505   474   470   422   396   351   14%
  Protein-related products 118   113   107   108   108   107   110   3%
  Oral antidiabetic products (OAD) 90   119   123   116   122   113   126   (30%
)
  Diabetes care total 2,839   2,912   2,795   2,861   2,614   2,582   2,453   3%
                               
  NovoSeven® 431   446   359   420   362   423   337   13%
  Norditropin® 255   259   272   254   244   249   237   (1%
)
  Other biopharmaceuticals 118   132   111   106   117   108   102   (5%
)
  Biopharmaceuticals total 804   837   742   780   723   780   676   5%
                               
Sales by geographic segment:                              
  North America 1,734   1,761   1,594   1,659   1,514   1,443   1,291   9%
  Europe 887   898   843   910   804   878   810   4%
  International Operations 479   539   548   503   452   476   482   0%
  Japan & Korea 233   240   219   295   287   298   262   (23%
)
  Region China 310   311   333   274   280   267   284   5%
                               
Segment operating profit:                              
  Diabetes care 1,045   1,046   974   942   972   910   818   2%
  Biopharmaceuticals 375   459   365   374   352   412   308   0%

1Free cash flow for Q1 2012 and Q2 2012 has been reduced by USD 234 million and increased by USD 234 million, respectively, as withheld dividend tax is now presented as part of financing activities.

 

 

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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: October 31, 2013

NOVO NORDISK A/S

Lars Rebien Sørensen, President and Chief Executive Officer