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CAPITAL STRUCTURE AND FINANCIAL ITEMS (Tables)
 12 Months Ended
Dec. 31, 2017
Share Capital, Reserves And Other Equity Interest And Financial Instruments [Abstract]  
Share Capital
DKK million
A share
capital

B share
capital

Total share capital

 
 
 
 
 
 
 
 
Development in share capital:
 
 
 
Share capital 2013
107

443

550

Cancelled in 2014
—

(20
)
(20
)
Cancelled in 2015
—

(10
)
(10
)
Cancelled in 2016
—

(10
)
(10
)
 
 
 
 
Share capital at the beginning of the year
107

403

510

Cancelled in 2017
—

(10
)
(10
)
Share capital at the end of the year
107

393

500
Treasury Shares
 
 
 
 
2017

2016

 
Market value,
DKK million

As % of share
capital before
cancellation

As % of share
capital after
cancellation

Number of
B shares
of DKK 0.20
(million)

Number of
B shares
of DKK 0.20
(million)

 
 
 
 
 
 
 
 
 
 
 
 
Holding at the beginning of the year
11,631

1.8
%
 
46

52

Cancellation of treasury shares
(12,735
)
(2.0
%)
 
(50
)
(50
)
Transfer regarding restricted stock units
(152
)
 


—

(4
)
Purchase during the year
16,845

 


60

48

Value adjustment
2,990

 


—

—

 
 
 
 
 
 
Holding at the end of the year
18,579

 
2.2
%
56

46

 
 
 
 
 
 
Cash Distribution to Shareholders
DKK million
2017

2016

2015

 
 
 
 
Interim dividend for the year
7,396

7,600

—

Dividend for prior year
11,448

16,230

12,905

Share repurchases for the year
16,845

15,057

17,196

 
 
 
 
Total
35,689

38,887

30,101
Earnings Per Share
DKK million
 
2017

2016

2015

Net profit for the year
 
38,130

37,925

34,860

 
 
 
 
 
Average number of shares outstanding
in 1,000 shares
2,473,218

2,529,945

2,571,219

Dilutive effect of average outstanding share pool1
in 1,000 shares
4,875

4,784

6,479

Average number of shares outstanding, including dilutive effect of outstanding share pool
in 1,000 shares
2,478,093

2,534,729

2,577,698

 
 
 
 
 
Basic earnings per share
DKK
15.42

14.99

13.56

Diluted earnings per share
DKK
15.39

14.96

13.52

 
 
 
 
 
1.
For further information on the outstanding share pool, please refer to note 5.1.
Financial Risks
Type
Financial risk
 
 
Foreign exchange risk
High
Interest rate risk
Low
Liquidity risk
Low
Credit risk
Low
 
 
 
 
Financial Contracts
The financial contracts existing at year-end cover the expected future cash flow for the following number of months:
 
2017
2016
 
 
 
USD
12 months
12 months
CNY1
6 months
9 months
JPY
12 months
14 months
GBP
13 months
12 months
CAD
11 months
11 months
 
 
 
 
 
 
1. Chinese yuan traded offshore (CNH) is used when hedging Novo Nordisk’s CNY currency exposure.
Key Currencies
KEY CURRENCIES
Exchange rate DKK per 100
2017

2016

2015

 
 
 
 
USD
 
 
 
Average
660

673

673

Year-end
621

706

683

Year-end change
(12.0
%)
3.4
%
11.6
%
 
 
 
 
CNY
 
 
 
Average
98

101

107

Year-end
95

102

105

Year-end change
(6.9
%)
(2.9
%)
6.1
%
 
 
 
 
JPY
 
 
 
Average
5.88

6.21

5.56

Year-end
5.51

6.03

5.67

Year-end change
(8.6
%)
6.3
%
10.7
%
 
 
 
 
GBP
 
 
 
Average
849

911

1,028

Year-end
839

869

1,011

Year-end change
(3.5
%)
(14.0
%)
6.2
%
 
 
 
 
CAD
 
 
 
Average
508

508

527

Year-end
495

524

492

Year-end change
(5.5
%)
6.5
%
(6.6
%)
 
 
 
 
 
 
 
 
Foreign Exchange Sensitivity Analysis
A 5% immediate increase/decrease in the following currencies would impact Novo Nordisk’s operating profit as outlined in the table below:

 
Estimated for

 
DKK million
2018

2017

 
 
 
 
 
 
USD
1,900

2,100

CNY
325

320

JPY
170

200

GBP
90

90

CAD
80

80

 
 
 
At year-end, a 5% increase/decrease in all other currencies versus EUR and DKK would affect the hedging instruments’ impact on Other comprehensive income and the Income statement as outlined in the table below:
DKK million
5% increase
in all other
currencies against
DKK and EUR

5% decrease
in all other
currencies against
DKK and EUR

 
 
 
 
 
 
2017
 
 
Other comprehensive income
(1,994
)
2,098

Income statement
210

(255
)
 
 
 
Total
(1,784
)
1,843

 
 
 
2016
 
 
Other comprehensive income
(2,477
)
2,478

Income statement
94

(89
)
 
 
 
Total
(2,383
)
2,389

 
 
 
Credit Exposure
DKK million
Cash at
bank

Marketable securities1

Derivative financial instruments

Total

 
 
 
 
 
 
 
 
 
 
2017
 
 
 
 
AA-range
12,369

 
935

13,304

A-range
5,967

 
1,369

7,336

BBB-range
438

 
 
438

Not rated or below BBB-range
78



 
78

 
 
 
 
 
Total
18,852

—

2,304

21,156

 
 
 
 
 
2016
 
 
 
 
AAA-range
 
2,007

 
2,007

AA-range
12,442

 
309

12,751

A-range
5,971

 
220

6,191

BBB-range
83

 
 
83

Not rated or below BBB-range
194

2

 
196

 
 
 
 
 
Total
18,690

2,009

529

21,228

 
 
 
 
 
1. Net yield on the bond portfolio in 2016 was -0.05%.
Derecognised Receivables
At year-end, the Group had derecognised receivables without recourse having due dates after 31 December amounting to:

DKK million
2017

2016

2015

 
 
 
 
US
3,328

2,754

945

Japan
2,024

2,259

1,899

 
 
 
 
 
 
 
 
Hedging Activities
HEDGING ACTIVITIES

 
2017
 
 
2016
DKK million
 
Contract
amount
at year-end

Positive
fair value
at year-end

Negative
fair value
at year-end

 
 
Contract
amount
at year-end

Positive
fair value
at year-end

Negative
fair value
at year-end

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Forward contracts USD
 
33,273

1,664

8

 
 
36,579

16

2,081

Forward contracts CNH, JPY, GBP and other currencies
 
7,677

222

37

 
 
10,070

199

110

 
 
 
 
 
 
 
 
 
 
Forward contracts, cash flow hedges
 
40,950

1,886

45

 
 
46,649

215

2,191

 
 
 
 
 
 
 
 
 
 
Currency options USD
 
2,152

180

—

 
 
588

50

—

Currency options JPY
 
112

6

—

 
 
190

11

—

 
 
 
 
 
 
 
 
 
 
Currency options, cash flow hedges1
 
2,264

186

—

 
 
778

61

—

 
 
 
 
 
 
 
 
 
 
Forward contracts USD
 
11,519

260

239

 
 
9,953

223

300

Forward contracts CNH, JPY, GBP and other currencies
 
2,680

120

25

 
 
3,087

79

87

 
 
 
 
 
 
 
 
 
 
Forward contracts, fair value hedges
 
14,199

380

264

 
 
13,040

302

387

Time value of currency options (hedge accounting not applied)
 
—

34

—

 
 
—

2

—

Currency options GBP (hedge accounting not applied)
 
125

1

—

 
 
 
 
 
Total hedging activities
 
57,538

2,487

309

 
 
60,467

580

2,578

 
 
 
 
 
 
 
 
 
 
Recognised in the Income statement
 
 
415

264

 
 
 
304

387

Recognised in Other comprehensive income2
 
 
2,072

45

 
 
 
276

2,191

 
 
 
 
 
 
 
 
 
 
Presented in the Balance sheet as:
 
 
 
 
 
 
 
 
 
Derivative financial instruments (current assets/liabilities)
 
 
2,304

309

 
 
 
529

2,578

Cash at bank
 
 
183

 
 
 
 
51

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

1.
Includes expired currency options of DKK 183 million deferred for realisation in 2018.
2.
Realisation in 2017 of previously deferred loss amounts to DKK 1,955 million (DKK 1,915 million adjusted for DKK 40 million to be realised in 2018). Furthermore, an additional gain of DKK 1,987 million (DKK 2,027 million adjusted for DKK 40 million from prior years) as of 31 December 2017 has been deferred for realisation in 2018.
Expected Timing of Income Statement Impact
The above financial contracts regarding cash flow hedging are expected to impact the Income statement within the periods shown below. The split is based on an estimate of when the cash flow hedges are expected to be reclassified to fair value hedges with the fair value then being transferred to Financial income or Financial expenses. The cash flow impact is an immediate consequence of the reclassification.

 
 
2017
 
 
2016
DKK million
 
Positive
fair value
at year-end

Negative
fair value
at year-end

 
 
Positive
fair value
at year-end

Negative
fair value
at year-end

 
 
 
 
 
 
 
 
Expected timing of Income statement impact
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0–12 months
 
2,072

45

 
 
236

2,191

More than 12 months
 
—

—

 
 
40

—

 
 
 
 
 
 
 
 
Total cash flow hedges for which hedge accounting is applied
 
2,072

45

 
 
276

2,191
Cash and Cash Equivalents and Financial Resources
DKK million
2017

2016

2015

CASH AND CASH EQUIVALENTS
 
 
 
Cash at bank (note 4.2)
18,852

18,690

16,923

Current debt (bank overdrafts)
(1,694
)
(229
)
(1,073
)
 
 
 
 
Cash and cash equivalents
17,158

18,461

15,850

FINANCIAL RESOURCES
 
 
 
Cash and cash equivalents
17,158

18,461

15,850

Marketable securities (note 4.2)
—

2,009

3,542

Undrawn committed credit facility1
8,190

8,178

8,209

 
 
 
 
Financial resources2
25,348

28,648

27,601

 
 
 
 
1.
The undrawn committed credit facility in 2017 is a EUR 1,100 million facility (EUR 1,100 million in 2016 and EUR 1,100 million in 2015) committed by a portfolio of international banks. The facility matures in 2019.
2.
Additional non-IFRS measure; please refer to pp 96-97 for definition.
Free Cash Flow
FREE CASH FLOW
DKK million
2017

2016

2015

 
 
 
 
Net cash generated from
operating activities
41,168

48,314

38,287

Net cash used in investing activities
(6,571
)
(6,790
)
(6,098
)
Net purchase of marketable securities
(2,009
)
(1,533
)
2,033

 
 
 
 
Free cash flow3
32,588

39,991

34,222

 
 
 
 
3.
Additional non-IFRS measure; please refer to pp 96-97 for definition.
Change in Working Capital
CHANGE IN WORKING CAPITAL
DKK million
2017

2016

2015

 
 
 
 
Inventories
(1,032
)
(1,583
)
(1,401
)
Trade receivables
69

(4,749
)
(2,444
)
Other receivables and prepayments
(17
)
(154
)
493

Trade payables
(401
)
1,084

(23
)
Other liabilities
265

1,526

1,604

Adjustment for payables related to non-current assets
(1,143
)
—

—

Adjustment for the partial divestment of NNIT A/S
—

—

(207
)
 
 
 
 
Change in working capital before exchange rate adjustments
(2,259
)
(3,876
)
(1,978
)
Exchange rate adjustments
(1,375
)
168

(179
)
Cash flow change in working capital
(3,634
)
(3,708
)
(2,157
)
Other Non-Cash Items
OTHER NON-CASH ITEMS
DKK million
2017

2016

2015

 
 
 
 
Reversals of non-cash income statement items
 
 
 
Interest income and interest expenses, net (note 4.8)
21

13

11

Capital gain/(loss) on investments etc (note 4.8)
25

(16
)
(15
)
Result of associated company (note 4.8)
(14
)
(24
)
(14
)
Share-based payment costs (note 5.1)
292

368

442

 
 
 
 
Changes in non-cash balance sheet items
 
 
 
Increase/(decrease) in provisions (note 3.6)
226

4,007

6,193

Increase/(decrease) in retirement benefit obligations (note 3.5)
(115
)
265

155

Remeasurements of retirement benefit obligations (note 3.5)
103

(205
)
(37
)
 
 
 
 
Other adjustments
 
 
 
Exchange rate adjustments on working capital (note 4.5)
1,375

(168
)
179

Other, primarily exchange rate adjustments
114

(358
)
(1,006
)
 
 
 
 
Total other non-cash items
2,027

3,882

5,908
Financial Assets
FINANCIAL ASSETS BY CATEGORY
DKK million
Available-
for-sale
financial
assets at
fair value

Financial
assets
measured at
fair value
through the
Income
statement

Loans
and
receivables

Cash
and cash
equivalents

Total

 
 
 
 
 
 
2017
 
 
 
 
 
Other financial assets
411

 
567

 
978

Trade receivables (note 3.4)
 
 
20,165

 
20,165

Other receivables
 
 
2,428

 
2,428

- less prepayments and VAT receivables
 
 
(1,613
)
 
(1,613
)
Derivative financial instruments (note 4.3)
 
2,304

 
 
2,304

Cash at bank (note 4.4)
 
 
 
18,852

18,852

 
 
 
 
 
 
Total financial assets at the end of the year by category1
411

2,304

21,547

18,852

43,114

Total financial assets at the end of the year by category, 2016
2,708

529

21,750

18,690

43,677

 
 
 
 
 
 
1. Financial assets are all due within one year except for DKK 30 million due in 2019.
Financial Liabilities
FINANCIAL LIABILITIES BY CATEGORY
DKK million
Financial
liabilities
measured at
fair value
through the
Income
statement

Financial
liabilities
measured at
amortised
cost

Total

 
 
 
 
2017
 
 
 
Current debt (note 4.4)
 
1,694

1,694

Trade payables
 
5,610

5,610

Other liabilities (note 3.7)
 
14,446

14,446

- less VAT and duties payable (note 3.7)
 
(1,182
)
(1,182
)
Derivative financial instruments (note 4.3)
309

 
309

 
 
 
 
Total financial liabilities at the end of the year by category2
309

20,568

20,877

Total financial assets at the end of the year by category, 2016
2,578

19,349

21,927

 
 
 
 
2. All financial liabilities are due within one year except for DKK 1 million due in 2019.
Fair Value Measurement Hierarchy
FAIR VALUE MEASUREMENT HIERARCHY
DKK million
2017

2016

 
 
 
Active market data
338

2,675

Directly or indirectly observable market data
2,304

529

Not based on observable market data
73

33

 
 
 
Total financial assets at fair value
2,715

3,237

 
 
 
Active market data
—

—

Directly or indirectly observable market data
309

2,578

Not based on observable market data
—

—

 
 
 
Total financial liabilities at fair value
309

2,578

 
 
 
Financial Income
FINANCIAL INCOME
DKK million
2017

2016

2015

 
 
 
 
Interest income
69

52

56

Foreign exchange gain (net)1
1,163

—

—

Capital gain on investments etc
—

16

15

Result of associated company2
14

24

14

 
 
 
 
Total financial income
1,246

92

85

 
 
 
 
Financial Expenses
FINANCIAL EXPENSES
DKK million
2017

2016

2015

 
 
 
 
Interest expenses
90

65

67

Foreign exchange loss (net)1
—

335

504

Financial loss from forward contracts (net)
1,346

158

5,232

Financial loss from currency options (net)
4

83

162

Capital loss on investments etc
25

—

—

Other financial expenses
68

85

81

 
 
 
 
Total financial expenses
1,533

726

6,046

 
 
 
 
1.
Primarily related to Trade receivables, Other receivables and Trade payables.
2.
Based on the share price as of 31 December 2017, the market value of the investment in NNIT A/S (corresponding to 26% of the share capital) amounts to DKK 1,109 million (DKK 1,364 million at 31 December 2016 and DKK 1,186 million at 31 December 2015).
Financial Impact From Forward Contracts and Currency Options, Specified
FINANCIAL IMPACT FROM FORWARD CONTRACTS AND CURRENCY OPTIONS, SPECIFIED
DKK million
2017

2016

2015

 
 
 
 
Forward contracts
 
 
 
Income/(loss) transferred from Other comprehensive income
(2,016
)
(705
)
(2,237
)
Value adjustment of transferred contracts
2,477

62

(3,212
)
Unrealised fair value adjustments of forward contracts
116

(85
)
(412
)
Foreign exchange gain/(loss) on forward contracts
(1,923
)
570

629

 
 
 
 
Financial income/(expense) from forward contracts
(1,346
)
(158
)
(5,232
)
 
 
 
 
Currency options
 
 
 
Realised income/(loss) transferred from Other comprehensive income
61

23

21

Value adjustment of transferred options
(9
)
—

(12
)
Foreign exchange gain/(loss) on currency options
(56
)
(106
)
(171
)
 
 
 
 
Financial income/(expense) from currency options
(4
)
(83
)
(162
)