Results for the year (Tables)

12 Months Ended

Dec. 31, 2019

Analysis of income and expense [abstract]

Gross-To-Net Sales Reconciliation

Gross-to-net sales reconciliation
DKK million	2019		2018		2017
Gross sales	270,431		230,701		216,174
US Managed Care and Medicare	(84,202	)	(65,207	)	(53,077	)
US wholesaler charge-backs	(33,772	)	(29,469	)	(28,324	)
US Medicaid rebates	(14,365	)	(11,950	)	(12,491	)
Other US discounts and sales returns	(8,280	)	(6,606	)	(5,771	)
Non-US rebates, discounts and sales returns	(7,791	)	(5,638	)	(4,815	)
Total gross-to-net sales adjustments	(148,410	)	(118,870	)	(104,478	)
Net sales	122,021		111,831		111,696

Provisions for Sales Rebates

Provisions for sales rebates
DKK million	2019		2018		2017
At the beginning of the year	25,760		20,374		20,063
Additional provisions, including increases to existing provisions	102,782		82,631		63,880
Amount paid during the year	(98,655	)	(78,647	)	(61,059	)
Adjustments, including unused amounts reversed during the year	381		386		(117	)
Effect of exchange rate adjustment	610		1,016		(2,393	)
At the end of the year	30,878		25,760		20,374

Provisions
DKK million	Provisions for sales rebates		Provisions for legal disputes		Provisions for product returns		Other provisions1		2019 total		2018 total
At the beginning of the year	25,760		1,860		869		1,064		29,553		24,057
Additional provisions, including increases to existing provisions	102,782		650		679		510		104,621		83,337
Amount used during the year	(98,655	)	(4	)	(424	)	(161	)	(99,244	)	(79,243	)
Adjustments, including unused amounts reversed during the year	381		(156	)	(48	)	(29	)	148		314
Effect of exchange rate adjustment	610		25		6		14		655		1,088
At the end of the year	30,878		2,375		1,082		1,398		35,733		29,553
Non-current liabilities2	551		2,375		300		1,387		4,613		3,392
Current liabilities	30,327		—		782		11		31,120		26,161

1. Other provisions consists of various types of provision, including obligations in relation to employee benefits such as jubilee benefits, company-owned life insurance, etc.

2. For non-current liabilities, provision for sales rebates is expected to be settled after one year,provisions for product returns will be utilised in2021 and 2022. In the case of provisions for legal disputes, the timing of settlement cannot be determined.

Information by Business Segment

Business segments
DKK million	2019		2018		2017		2019		2018		2017		2019		2018		2017
Segment sales	Diabetes and Obesity care						Biopharm						Total
Long-acting insulin	20,776		20,844		22,174
- of which Tresiba®	9,259		8,035		7,327
- of which Xultophy®	2,210		1,614		729
- of which Levemir®	9,307		11,195		14,118
Premix insulin	10,578		10,194		10,749
- of which Ryzodeg®	993		714		492
- of which NovoMix®/NovoLog Mix®	9,585		9,480		10,257
Fast-acting insulin	19,303		19,353		20,124
- of which Fiasp®	1,243		590		99
- of which NovoRapid®/NovoLog®	18,060		18,763		20,025
Human insulin	9,036		9,265		9,793
Total insulin	59,693		59,656		62,840
Victoza®	21,934		24,333		23,173
Ozempic®	11,237		1,796		—
Rybelsus®	50		—		—
Total GLP-1	33,221		26,129		23,173
Other Diabetes care	4,247		4,250		4,302
Total Diabetes care	97,161		90,035		90,315
Obesity care (Saxenda®)	5,679		3,869		2,562
Diabetes and Obesity care total sales	102,840		93,904		92,877
Haemophilia							10,281		9,576		10,469
- of which NovoSeven®							8,119		7,881		9,206
- of which NovoEight®							1,525		1,354		1,103
Growth disorders (Norditropin®)							7,275		6,834		6,655
Other Biopharm							1,625		1,517		1,695
Biopharm total sales							19,181		17,927		18,819
Segment key figures
Total net sales	102,840		93,904		92,877		19,181		17,927		18,819		122,021		111,831		111,696
Cost of goods sold	16,309		14,716		15,014		3,779		2,901		2,618		20,088		17,617		17,632
Sales and distribution costs	28,729		26,396		25,475		3,094		3,001		2,865		31,823		29,397		28,340
Research and development costs	12,128		12,222		11,358		2,092		2,583		2,656		14,220		14,805		14,014
Administrative costs	3,346		3,266		3,143		661		650		641		4,007		3,916		3,784
Other operating income, net	309		538		466		291		614		575		600		1,152		1,041
Operating profit	42,637		37,842		38,353		9,846		9,406		10,614		52,483		47,248		48,967
Operating margin	41.5	%	40.3	%	41.3	%	51.3	%	52.5	%	56.4	%	43.0	%	42.2	%	43.8	%
Depreciation, amortisation and impairment losses expensed	3,916		3,210		2,536		1,745		715		646		5,661		3,925		3,182
Additions to Intangible assets and Property, plant and equipment	9,644		9,219		7,565		1,518		3,107		2,226		11,162		12,326		9,791
Assets allocated to business segments	86,700		71,706		61,542		16,514		17,542		14,994		103,214		89,248		76,536
Non-allocated assets1													22,398		21,521		25,819
Total assets													125,612		110,769		102,355

1. The part of total assets that remains unallocated to either of the two business segments includes investments in associated companies, deferred income tax assets, other financial assets, tax receivables, derivative financial instruments and cash at bank.

Research and development costs by business segment (note 2.2)
DKK million	2019	2018	2017
Diabetes and Obesity care	12,128	12,222	11,358
Biopharm	2,092	2,583	2,656
Total	14,220	14,805	14,014

Geographical Areas

Geographical areas (continued)
	2019		2018		2017		2019		2018		2017		2019		2018		2017		2019		2018		2017
	International Operations (continued)												North America Operations
DKK million	Region Japan & Korea						Region Latin America						Total						Of which the US
Sales by business segment:
Long-acting insulin	930		857		872		800		708		726		11,741		12,902		14,758		11,271		12,600		14,466
- of which Tresiba®	821		751		739		478		414		377		5,782		5,271		4,982		5,500		5,192		4,970
- of which Xultophy®	11		—		—		70		20		—		717		529		162		708		528		162
- of which Levemir®	98		106		133		252		274		349		5,242		7,102		9,614		5,063		6,880		9,334
Premix insulin	722		650		697		123		122		143		871		1,332		1,790		839		1,294		1,743
- of which Ryzodeg®	457		351		253		35		32		30		—		—		—		—		—		—
- of which NovoMix®/NovoLog Mix®	265		299		444		88		90		113		871		1,332		1,790		839		1,294		1,743
Fast-acting insulin	790		779		941		407		351		335		8,999		10,021		10,968		8,592		9,634		10,574
- of which Fiasp®	5		—		—		—		—		—		626		233		8		597		211		—
- of which NovoRapid®/NovoLog®	785		779		941		407		351		335		8,373		9,788		10,960		7,995		9,423		10,574
Human insulin	170		187		232		734		695		836		1,675		1,917		1,937		1,552		1,778		1,766
Total insulin	2,612		2,473		2,742		2,064		1,876		2,040		23,286		26,172		29,453		22,254		25,306		28,549
Victoza®	748		614		590		631		544		500		14,685		18,093		17,465		14,217		17,561		16,929
Ozempic®	—		—		—		174		—		—		10,094		1,757		—		9,599		1,634		—
Rybelsus®	—		—		—		—		—		—		50		—		—		50		—		—
Total GLP-1	748		614		590		805		544		500		24,829		19,850		17,465		23,866		19,195		16,929
Other Diabetes care	421		368		376		68		66		58		858		890		943		705		733		782
Total Diabetes care	3,781		3,455		3,708		2,937		2,486		2,598		48,973		46,912		47,861		46,825		45,234		46,260
Obesity care (Saxenda®)	282		175		—		656		410		277		3,596		2,658		1,993		3,348		2,446		1,828
Diabetes and Obesity care total	4,063		3,630		3,708		3,593		2,896		2,875		52,569		49,570		49,854		50,173		47,680		48,088
Haemophilia	560		557		681		1,035		858		558		4,335		4,004		5,023		4,031		3,723		4,852
- of which NovoSeven®	377		400		497		959		837		543		3,617		3,457		4,609		3,454		3,278		4,451
- of which NovoEight®	116		135		169		76		21		15		382		308		315		358		291		315
Growth disorders	1,746		1,538		1,579		286		251		263		3,050		2,834		2,550		3,035		2,823		2,543
Other Biopharm	84		72		104		2		4		3		503		500		582		247		262		348
Biopharm total	2,390		2,167		2,364		1,323		1,113		824		7,888		7,338		8,155		7,313		6,808		7,743
Total sales by business and geographical segment	6,453		5,797		6,072		4,916		4,009		3,699		60,457		56,908		58,009		57,486		54,488		55,831
Total sales growth as reported	11.3	%	(4.5	%)	(2.5	%)	22.6	%	8.4	%	3.0	%	6.2	%	(1.9	%)	(2.1	%)	5.5	%	(2.4	%)	(2.4	%)
Property, plant and equipment	436		201		146		702		615		668		19,579		13,040		7,318		19,531		13,023		7,298
Trade receivables, net	495		504		279		1,047		914		862		14,404		12,902		10,742		13,999		12,643		10,517
Allowance for doubtful trade receivables	(7	)	(5	)	(5	)	(301	)	(246	)	(211	)	(13	)	(12	)	(32	)	(13	)	(12	)	(32	)
Total assets	1,543		1,503		1,304		3,442		2,952		3,036		40,071		30,349		20,612		39,460		29,732		20,180

Geographical areas
	2019		2018		2017		2019		2018		2017		2019		2018		2017		2019		2018		2017
	International Operations
DKK million	Total International Operations						Region Europe						Region AAMEO						Region China
Sales by business segment:
Long-acting insulin	9,035		7,942		7,416		4,720		4,282		3,895		1,526		1,281		1,229		1,059		814		694
- of which Tresiba®	3,477		2,764		2,345		1,685		1,246		966		406		337		261		87		16		2
- of which Xultophy®	1,493		1,085		567		1,266		1,007		560		146		58		7		—		—		—
- of which Levemir®	4,065		4,093		4,504		1,769		2,029		2,369		974		886		961		972		798		692
Premix insulin	9,707		8,862		8,959		1,595		1,701		1,878		2,961		2,606		2,686		4,306		3,783		3,555
- of which Ryzodeg®	993		714		492		68		56		26		429		275		183		4		—		—
- of which NovoMix®/NovoLog Mix®	8,714		8,148		8,467		1,527		1,645		1,852		2,532		2,331		2,503		4,302		3,783		3,555
Fast-acting insulin	10,304		9,332		9,156		4,732		4,558		4,366		2,622		2,194		2,261		1,753		1,450		1,253
- of which Fiasp®	617		357		91		585		357		91		27		—		—		—		—		—
- of which NovoRapid®/NovoLog®	9,687		8,975		9,065		4,147		4,201		4,275		2,595		2,194		2,261		1,753		1,450		1,253
Human insulin	7,361		7,348		7,856		1,380		1,580		1,770		2,230		2,065		1,922		2,847		2,821		3,096
Total insulin	36,407		33,484		33,387		12,427		12,121		11,909		9,339		8,146		8,098		9,965		8,868		8,598
Victoza®	7,249		6,240		5,708		3,967		3,720		3,451		1,005		841		858		898		521		309
Ozempic®	1,143		39		—		965		39		—		4		—		—		—		—		—
Rybelsus®	—		—		—		—		—		—		—		—		—		—		—		—
Total GLP-1	8,392		6,279		5,708		4,932		3,759		3,451		1,009		841		858		898		521		309
Other Diabetes care	3,389		3,360		3,359		562		579		605		691		675		754		1,647		1,672		1,566
Total Diabetes care	48,188		43,123		42,454		17,921		16,459		15,965		11,039		9,662		9,710		12,510		11,061		10,473
Obesity care (Saxenda®)	2,083		1,211		569		334		207		102		802		418		190		9		1		—
Diabetes and Obesity care total	50,271		44,334		43,023		18,255		16,666		16,067		11,841		10,080		9,900		12,519		11,062		10,473
Haemophilia	5,946		5,572		5,446		2,762		2,781		2,828		1,305		1,177		1,163		284		199		216
- of which NovoSeven®	4,502		4,424		4,597		1,767		1,944		2,245		1,130		1,049		1,097		269		194		215
- of which NovoEight®	1,143		1,046		788		790		776		551		146		109		52		15		5		1
Growth disorders	4,225		4,000		4,105		1,466		1,511		1,572		691		680		676		36		20		15
Other Biopharm	1,122		1,017		1,113		779		721		722		252		216		279		5		4		5
Biopharm total	11,293		10,589		10,664		5,007		5,013		5,122		2,248		2,073		2,118		325		223		236
Total sales by business and geographical segment	61,564		54,923		53,687		23,262		21,679		21,189		14,089		12,153		12,018		12,844		11,285		10,709
Total sales growth as reported	12.1	%	2.3	%	2.2	%	7.3	%	2.3	%	2.5	%	15.9	%	1.1	%	3.8	%	13.8	%	5.4	%	2.4	%
Property, plant and equipment	30,972		28,851		27,929		26,730		25,500		24,665		1,003		723		566		2,101		1,812		1,884
Trade receivables, net	10,508		9,884		9,423		3,611		3,388		3,273		3,595		3,237		3,468		1,760		1,841		1,541
Allowance for doubtful trade receivables	(1,471	)	(1,358	)	(1,262	)	(196	)	(241	)	(223	)	(967	)	(866	)	(823	)	—		—		—
Total assets	85,541		80,420		81,743		67,007		64,327		65,600		6,729		5,635		5,876		6,820		6,003		5,927

Research and Development Costs

Research and development costs
DKK million	2019		2018		2017
Employee costs (note 2.4)	5,968		6,288		5,848
Amortisation and impairment losses, intangible assets (note 3.1)	522		769		211
Depreciation and impairment losses, property, plant and equipment	783		468		525
(note 3.2)
Other research and development costs	6,947		7,280		7,430
Total research and development costs	14,220		14,805		14,014
As percentage of net sales	11.7	%	13.2	%	12.5	%

Employee Costs and Remuneration to Executive Management and Board of Directors

Employee costs
DKK million	2019		2018		2017
Wages and salaries	25,335		25,259		23,869
Share-based payment costs (note 5.1)	363		414		292
Pensions – defined contribution plans	1,910		1,791		1,800
Pensions – defined benefit plans (note 3.6)	151		73		165
Other social security contributions	1,963		1,901		1,910
Other employee costs	2,203		2,087		2,102
Total employee costs for the year	31,925		31,525		30,138
Employee costs capitalised as intangible assets and property, plant and equipment	(1,314	)	(1,500	)	(1,435	)
Change in employee costs capitalised as inventories	(139	)	(105	)	(91	)
Total employee costs in the income statement	30,472		29,920		28,612
Included in the income statement:
Cost of goods sold	8,134		8,164		7,854
Sales and distribution costs	13,463		12,214		11,994
Research and development costs	5,968		6,288		5,848
Administrative costs	2,679		2,755		2,505
Other operating income, net	228		499		411
Total employee costs in the income statement	30,472		29,920		28,612

Average number of full-time employees	42,218	42,881	41,665
Year-end number of full-time employees	42,703	42,672	42,076
Employees (total)	43,258	43,202	42,682

Remuneration to Executive Management and Board of Directors
DKK million	2019	2018	2017
Salary and short-term incentive	120	102	74
Pension	26	22	18
Benefits	14	4	6
Long-term incentive3	40	22	7
Severance payments	—	28	—
Executive Management in total1,2	200	178	105
Fee to Board of Directors2	19	17	16
Total	219	195	121

1. Jesper Brandgaard retired from Novo Nordisk in April 2019. Until April 2020 Jesper Brandgaard will continue to provide certain services for Novo Nordisk. Remuneration of Jesper Brandgaard from January to April 2019 is included in the above table. A severance payment of DKK 27.7 million is included in the 2018 amounts.

2. Total remuneration for registered members of Executive Management amounts to DKK 135 million (DKK 142 million in 2018 and DKK 74 million in 2017).All members of the Board of Directors are registered.

3. Please refer to note 5.1 for further information.

Income Taxes Expensed and Paid

Income taxes expensed
DKK million	2019		2018		2017
Current tax on profit for the year	11,275		10,469		10,562
Deferred tax on profit for the year	(1,559	)	(1,007	)	182
Tax on profit for the year	9,716		9,462		10,744
Current tax adjustments recognised for prior years	(191	)	(522	)	(425	)
Deferred tax adjustments recognised for prior years	77		47		231
Income taxes in the income statement	9,602		8,987		10,550
Tax on other comprehensive income for the year, (income)/expense	231		(755	)	1,041

Income taxes paid
DKK million	2019	2018	2017
Income taxes paid in Denmark for current year	7,774	6,640	6,798
Income taxes paid outside Denmark for current year	2,258	2,376	2,639
Income taxes paid/repayments relating to prior years	904	598	(336	)
Total income taxes paid	10,936	9,614	9,101

Computation of Effective Tax Rate

DKK million	2019		2018		2017
Computation of effective tax rate:
Statutory corporate income tax rate in Denmark	22.0	%	22.0	%	22.0	%
Deviation in foreign subsidiaries’ tax rates compared to the Danish tax rate (net)	(2.1	%)	(1.9	%)	0.0	%
Non-taxable income less non-tax-deductible expenses (net)	0.1	%	(0.2	%)	0.1	%
Others, including adjustment of prior years	(0.2	%)	(1.0	%)	(0.4	%)
Effective tax rate	19.8	%	18.9	%	21.7	%

Deferred Income Tax Assets and Liabilities and Specification of Tax Loss Carry-Forwards

Development in deferred income tax assets and liabilities
DKK million	Property, plant and equipment		Intangible assets		Inventories		Liabilities		Other		Offset within countries		Total
2019
Net deferred tax asset/(liability) at 1 January	(703	)	(564	)	973		2,402		667		—		2,775
Change in accounting policy, leases	(865	)	—		—		865		—				—
Income/(charge) to the income statement	(5	)	(155	)	820		133		689				1,482
Income/(charge) to other comprehensive income	—		—		18		47		(296	)			(231	)
Income/(charge) to equity	—		—		—		—		18				18
Disposal of subsidiaries	—		—		—		(18	)	—				(18	)
Effect of exchange rate adjustment	(18	)	1		—		23		9				15
Net deferred tax asset/(liability) at 31 December	(1,591	)	(718	)	1,811		3,452		1,087		—		4,041
Classified as follows:
Deferred tax asset at 31 December	769		58		3,428		3,580		1,843		(5,557	)	4,121
Deferred tax liability at 31 December	(2,360	)	(776	)	(1,617	)	(128	)	(756	)	5,557		(80	)
2018
Net deferred tax asset/(liability) at 1 January	(868	)	(500	)	833		1,658		(28	)	—		1,095
Income/(charge) to the income statement	199		(67	)	177		763		(112	)			960
Income/(charge) to other comprehensive income	—		—		(37	)	(22	)	814				755
Income/(charge) to equity	—		—		—		—		(15	)			(15	)
Effect of exchange rate adjustment	(34	)	3		—		3		8				(20	)
Net deferred tax asset/(liability) at 31 December	(703	)	(564	)	973		2,402		667		—		2,775
Classified as follows:
Deferred tax asset at 31 December	694		52		2,490		2,403		833		(3,579	)	2,893
Deferred tax liability at 31 December	(1,397	)	(616	)	(1,517	)	(1	)	(166	)	3,579		(118	)