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Capital structure and financial items (Tables)
 12 Months Ended
Dec. 31, 2019
Share Capital, Reserves And Other Equity Interest And Financial Instruments [Abstract]  
Share Capital
Share capital
DKK million
A share
capital

B share
capital

 
Total share capital

 
 
 
 
 
 
 
Development in share capital:
 
 
 
 
 
Share capital 2016
107

403

 
510

 
Cancelled in 2017
—

(10
)
 
(10
)
 
Cancelled in 2018
—

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

383

 
490

 
Cancelled in 2019
—

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

373

 
480

 
 
 
 
 
 
 
Cash Distribution to Shareholders
DKK million
2019

 
2018

2017

 
 
 
 
 
Interim dividend for the year
7,100

 
7,238

7,396

Dividend for prior year
12,309

 
11,810

11,448

Share repurchases for the year
15,334

 
15,567

16,845

 
 
 
 
 
Total
34,743

 
34,615

35,689

 
 
 
 
 
Treasury Shares
 
 
 
 
 
2019

 
2018

 
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
16,610

2.3
%
 
 
56

 
56

Cancellation of treasury shares
(14,895
)
(2.0
%)
 
 
(50
)
 
(50
)
Transfer regarding restricted stock units
(762
)
 


 
(3
)
 
(1
)
Purchase during the year
15,334

 


 
45

 
51

Value adjustment
2,326

 


 
—

 
—

 
 
 
 
 
 
 
 
Holding at the end of the year
18,613

 
2.0
%
 
48

 
56

 
 
 
 
 
 
 
 
Earnings Per Share
DKK million
 
 
2019

 
2018

2017

 
 
 
 
 
 
 
Net profit for the year
 
 
38,951

 
38,628

38,130

 
 
 
 
 
 
 
Average number of shares outstanding
in 1,000 shares
 
2,374,299

 
2,419,603

2,473,218

Dilutive effect of average outstanding share pool1
in 1,000 shares
 
4,359

 
4,814

4,875

Average number of shares outstanding, including dilutive effect of outstanding share pool
in 1,000 shares
 
2,378,658

 
2,424,417

2,478,093

 
 
 
 
 
 
 
Basic earnings per share
DKK
 
16.41

 
15.96

15.42

 
 
 
 
 
 
 
Diluted earnings per share
DKK
 
16.38

 
15.93

15.39

 
 
 
 
 
 
 

1.
For further information on the outstanding share pool, please refer to note 5.1.
Borrowings
Contractual undiscounted cashflows
 
 
 
 
 
 
 
DKK million 
 
Leases

 
Bank overdrafts1

 
Total

 
 
 
 
 
 
 
 
 
2019
 
 
 
 
 
 
 
Within 1 year
 
847

 
659

 
1,506

 
1-3 years
 
1,424

 
—

 
1,424

 
3-5 years
 
734

 
—

 
734

 
More than 5 years
 
1,140

 
—

 
1,140

 
 
 
 
 
 
 
 
 
Total contractual undiscounted cash flows at the end of the year
 
4,145

 
659

 
4,804

 
 
 
 
 
 
 
 
 
Contractual discounted cash flows included in the balance sheet at the end of the year
 
3,824

 
659

 
4,483

 
 
 
 
 
 
 
 
 
Non-current liabilities
 
3,009

 
—

 
3,009

 
Current liabilities
 
815

 
659

 
1,474

 
 
 
 
 
 
 
 
 

1.
Bank overdrafts includes DKK 595 million classified as financing activities (2018: DKK 506 million) and DKK 64 million classified as cash and cash equivalents (2018: DKK 9 million).
Reconciliation of liabilities arising from financing activities
 
 
 
Non-cash movements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DKK million
 
Beginning of the year

Cash flows

Additions

Disposals

Exchange rates

Other

 
End of the year

 
 
 
 
 
 
 
 
 
 
 
 
2019
 
 
 
 
 
 
 
 
 
 
Lease liabilities
 
3,988

(822
)
640

(57
)
63

12

 
3,824

 
Bank overdrafts
 
506

81

—

—

8

—

 
595

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities arising from financing activities 
 
4,494

(741
)
640

(57
)
71

12


4,419

 
 
 
 
 
 
 
 
 
 
 
 
Bank overdrafts
 
9

55

—

—

—

—

 
64

 
 
 
 
 
 
 
 
 
 
 
 
Total borrowings
 
4,503

(686
)
640

(57
)
71

12

 
4,483

 
 
 
 
 
 
 
 
 
 
 
 
Financial Risks
Management has assessed the following key 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:
 
2019
 
2018
 
 
 
 
USD
9 months
 
11 months
CNY1
7 months
 
6 months
JPY
12 months
 
12 months
CAD
9 months
 
9 months
GBP
10 months
 
11 months
 
 
 
 

1.
Chinese yuan traded offshore (CNH) is used to hedge Novo Nordisk’s CNY currency exposure.
Key Currencies
Key currencies
Exchange rate DKK per 100
2019

 
2018

2017

 
 
 
 
 
USD
 
 
 
 
Average
667

 
631

660

Year-end
668

 
652

621

Year-end change
2.5
%
 
5.1
%
(12.0
%)
 
 
 
 
 
CNY
 
 
 
 
Average
97

 
95

98

Year-end
96

 
95

95

Year-end change
1.1
%
 
(0.3
%)
(6.9
%)
 
 
 
 
 
JPY
 
 
 
 
Average
6.12

 
5.72

5.88

Year-end
6.11

 
5.91

5.51

Year-end change
3.4
%
 
7.3
%
(8.6
%)
 
 
 
 
 
CAD
 
 
 
 
Average
503

 
487

508

Year-end
511

 
479

495

Year-end change
6.7
%
 
(3.2
%)
(5.5
%)
 
 
 
 
 
GBP
 
 
 
 
Average
852

 
842

849

Year-end
877

 
827

839

Year-end change
6.0
%
 
(1.4
%)
(3.5
%)
 
 
 
 
 
Foreign Exchange Sensitivity Analysis
At year-end, a 5% immediate increase/decrease in all other currencies versus EUR and DKK would affect 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

 
 
 
 
2019
 
 
 
Other comprehensive income
(1,811
)
 
1,811

Income statement
199

 
(199
)
 
 
 
 
Total
(1,612
)
 
1,612

 
 
 
 
2018
 
 
 
Other comprehensive income
(1,988
)
 
1,988

Income statement
115

 
(115
)
 
 
 
 
Total
(1,873
)
 
1,873

 
 
 
 
A 5% increase/decrease in the year-end rate in the following currencies versus EUR and DKK would impact Novo Nordisk’s operating profit estimated by Management as outlined in the table below:
 
Estimated for
DKK million
2020

 
2019

 
 
 
 
USD
1,950

 
2,000

CNY
450

 
350

JPY
150

 
160

CAD
130

 
90

GBP
100

 
85

 
 
 
 
Credit Exposure
DKK million
 
Cash at
bank

Derivative financial instruments

 
Total

 
 
 
 
 
 
 
 
2019
 
 
 
 
 
 
AA-range
 
7,471

139

 
7,610

 
A-range
 
7,145

49

 
7,194

 
BBB-range
 
314

—

 
314

 
Not rated or below BBB-range
 
545

—

 
545

 
 
 
 
 
 
 
 
Total
 
15,475

188

 
15,663

 
 
 
 
 
 
 
 
2018
 
 
 
 
 
 
AA-range
 
7,989

90

 
8,079

 
A-range
 
7,212

114

 
7,326

 
BBB-range
 
246

—

 
246

 
Not rated or below BBB-range
 
191

—

 
191

 
 
 
 
 
 
 
 
Total
 
15,638

204

 
15,842

 
 
 
 
 
 
 
 
Derecognised Receivables
At year-end, the Group had derecognised receivables without recourse having due dates after 31 December 2019 amounting to:


DKK million
 
2019

 
2018

2017

 
 
 
 
 
 
US
 
3,672

 
3,587

3,328

Japan
 
2,149

 
1,937

2,024

 
 
 
 
 
 
Hedging Activities
Derivative financial instruments
 
2019
 
 
 
 
2018
 
 
 
 
 
 
 
 
 
 
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 USD1
25,394

81

315

 
 
29,951

21

1,555

Forward contracts CNH, JPY, GBP and CAD
10,013

35

130

 
 
7,462

23

166

 
 
 
 
 
 
 
 
 
Forward contracts, cash flow hedges
35,407

116

445

 
 
37,413

44

1,721

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Forward contracts USD
11,287

61

217

 
 
9,145

123

256

Forward contracts CNH, CAD, EUR, GBP and JPY
3,761

11

72

 
 
3,268

37

47

 
 
 
 
 
 
 
 
 
Forward contracts, fair value hedges
15,048

72

289

 
 
12,413

160

303

 
 
 
 
 
 
 
 
 
Total derivative financial instruments
50,455

188

734

 
 
49,826

204

2,024

 
 
 
 
 
 
 
 
 
Recognised in the income statement
 
72

289

 
 
 
160

303

Recognised in other comprehensive income
 
116

445

 
 
 
44

1,721

 
 
 
 
 
 
 
 
 

1.
Average hedge rate for USD cash flow hedges is 654 at the end of 2019 and 610 at the end of 2018.
Cash and Cash Equivalents and Financial Resources
DKK million
 
2019

 
2018

2017

 
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
 
Cash at bank (note 4.3)
 
15,475

 
15,638

18,852

Borrowings (bank overdrafts)1
 
(64
)
 
(9
)
(1,694
)
 
 
 
 
 
 
Cash and cash equivalents
 
15,411

 
15,629

17,158

 
 
 
 
 
 
Financial resources
 
 
 
 
 
Cash and cash equivalents
 
15,411

 
15,629

17,158

Undrawn committed credit facility2
 
11,578

 
11,574

8,190

Borrowings (bank overdrafts)1
 
(595
)
 
(506
)
—

 
 
 
 
 
 
Financial resources3
 
26,394

 
26,697

25,348

 
 
 
 
 
 

1.
Cash and cash equivalents at the beginning of 2018 has been adjusted for a DKK 412 million bank loan reclassified to financing activities. At 31 December 2019 bank overdrafts classified as financing activities totalled DKK 595 million (2018: DKK 506 million).
2.
The undrawn committed credit facility in 2019 is a EUR 1,550 million facility (EUR 1,550 million in 2018 and EUR 1,100 million in 2017) committed by a portfolio of international banks. The facility matures in 2024.
3.
Additional non-IFRS financial measure; please refer to 'Financial definitions', which is not part of the audited financial statements.

Free cash flow
 
 
 
 
 
DKK million
 
2019

 
2018

2017

 
 
 
 
 
 
Net cash generated from
operating activities
 
46,782

 
44,616

41,168

Net cash used in investing activities
 
(11,509
)
 
(12,080
)
(6,571
)
Net purchase of marketable securities
 
—

 
—

(2,009
)
Repayment on lease liabilities
 
(822
)
 
—

—

 
 
 
 
 
 
Free cash flow4
 
34,451

 
32,536

32,588

 
 
 
 
 
 


4. Additional non-IFRS financial measure; please refer to 'Financial definitions', which is not part of the audited financial statements.
Free Cash Flow
Free cash flow
 
 
 
 
 
DKK million
 
2019

 
2018

2017

 
 
 
 
 
 
Net cash generated from
operating activities
 
46,782

 
44,616

41,168

Net cash used in investing activities
 
(11,509
)
 
(12,080
)
(6,571
)
Net purchase of marketable securities
 
—

 
—

(2,009
)
Repayment on lease liabilities
 
(822
)
 
—

—

 
 
 
 
 
 
Free cash flow4
 
34,451

 
32,536

32,588

 
 
 
 
 
 


4. Additional non-IFRS financial measure; please refer to 'Financial definitions', which is not part of the audited financial statements.
Change in Working Capital
Change in working capital
 
 
 
 
 
DKK million
 
2019

 
2018

2017

 
 
 
 
 
 
Inventories
 
(1,305
)
 
(963
)
(1,032
)
Trade receivables
 
(2,126
)
 
(2,621
)
69

Other receivables and prepayments1
 
(1,190
)
 
(662
)
(17
)
Trade payables
 
(398
)
 
1,146

(401
)
Other liabilities1
 
1,202

 
(348
)
265

Adjustment for payables related to non-current assets
 
295

 
84

(1,143
)
Adjustment related to divestment of group companies
 
(42
)
 
—

—

 
 
 
 
 
 
Change in working capital including exchange rate adjustments
 
(3,564
)
 
(3,364
)
(2,259
)
 
 
 
 
 
 
Exchange rate adjustments
 
176

 
(6
)
(1,375
)
 
 
 
 
 
 
Cash flow change in working capital
 
(3,388
)
 
(3,370
)
(3,634
)
 
 
 
 
 
 


1. Change in working capital includes adjustments in respect of implementation of IFRS 16, please refer to note 1.2.
Other Non-Cash Items
The adjustments are specified as follows:
Other non-cash items
 
 
 
 
 
DKK million
 
2019

 
2018

2017

 
 
 
 
 
 
Reversals of non-cash income statement items
 
 
 
 
 
Interest income and interest expenses, net (note 4.9)
 
155

 
34

21

Capital gain/(loss) on investments, net etc (note 4.9)
 
145

 
(163
)
25

Result of associated company (note 4.9)
 
137

 
(12
)
(14
)
Share-based payment costs (note 5.1)
 
363

 
414

292

Income from the divestment of group companies
 
(68
)
 
(122
)
—

Adjustment in non-cash items related to divestment of group companies
 
162

 
—

—

Increase/(decrease) in provisions (note 3.7) and retirement benefit obligations
 
6,071

 
5,503

214

Other
 
67

 
444

1,489

 
 
 
 
 
 
Total other non-cash items
 
7,032

 
6,098

2,027

 
 
 
 
 
 
Financial Assets
Financial assets by category
 
 
 
 
DKK million
 
2019

 
2018

 
 
 
 
 
Financial assets at fair value through the income statement
 
1,158

 
969

Other financial assets1
 
970

 
765

Derivative financial instruments (note 4.4)
 
188

 
204

 
 


 
 
Financial assets at amortised cost
 
28,418

 
28,340

Other financial assets1
 
364

 
477

Trade receivables (note 3.5)2
 
12,203

 
11,188

Other receivables and prepayments (current and non-current)
 
4,275

 
3,090

- less prepayments and VAT receivables
 
(3,899
)
 
(2,053
)
Cash at bank (note 4.5)
 
15,475

 
15,638

 
 


 
 
Financial assets at fair value through OCI
 
12,709

 
11,598

Trade receivables in a factoring portfolio (note 3.5)2
 
12,709

 
11,598

 
 

 
 
Total financial assets at the end of the year by category1
 
42,285

 
40,907

 
 
 
 
 

1.
Financial assets with the exception of other financial assets and non-current part of other receivables and prepayments (DKK 841 million) are all due within one year. Other financial assets at amortised cost include DKK 327 million which are due in more than 5 years (2018: DKK 377 million). Other financial assets measured at fair value through the income statement are minor shareholdings.
2.
Trade receivables which are measured at fair value through OCI, which have no associated loss allowance.

Financial Liabilities

Financial liabilities by category
 
 
 
 
DKK million
 
2019

 
2018

 
 
 
 
 
Financial liabilities measured at fair value through the income statement
 
734

 
2,024

Derivative financial instruments (note 4.4)
 
734

 
2,024

 
 


 


Financial liabilities measured at amortised cost
 
25,448

 
20,936

Borrowings (non-current)
 
3,009

 
—

Borrowings (current)
 
1,474

 
515

Trade payables
 
6,358

 
6,756

Other liabilities
 
15,085

 
14,098

- less VAT and duties payable
 
(478
)
 
(433
)
 
 


 


Total financial liabilities at the end of the year by category3
 
26,182

 
22,960

 
 
 
 
 

3. Please refer to note 4.2 for a maturity analysis for non-current and current borrowings. All other financial liabilities are due within one yea
Fair Value Measurement Hierarchy
Fair value measurement hierarchy
 
 
 
 
DKK million
 
2019

 
2018

 
 
 
 
 
Active market data
 
846

 
649

Directly or indirectly observable market data
 
188

 
204

Not based on observable market data1
 
12,833

 
11,714

 
 
 
 
 
Total financial assets at fair value
 
13,867

 
12,567

 
 
 
 
 
Active market data
 
—

 
—

Directly or indirectly observable market data
 
734

 
2,024

Not based on observable market data
 
—

 
—

 
 
 
 
 
Total financial liabilities at fair value
 
734

 
2,024

 
 
 
 
 


1.
The fair value of trade receivables in a factoring portfolio is calculated based on the net invoice amount (invoice amount less charge-backs) less the fee payable to the factoring entity. The factoring fee is insignificant due to the short period between the time of sale to the factoring entity and the invoice due date and the rate applicable. Inputs to the estimate of US wholesaler charge-backs are described in note 2.1.
Financial Income
Financial income
 
 
 
 
 
DKK million
 
2019

 
2018

2017

 
 
 
 
 
 
Interest income1
 
65

 
51

69

Foreign exchange gain (net)
 
—

 
—

1,163

Financial gain from forward contracts (net)
 
—

 
1,656

—

Financial gain from currency options (net)
 
—

 
152

—

Capital gain on investments, etc.
 
—

 
251

—

Result of associated companies
 
—

 
12

14

 
 
 
 
 
 
Total financial income
 
65

 
2,122

1,246

 
 
 
 
 
 
Financial Expenses
Financial expenses
 
 
 
 
 
DKK million
 
2019

 
2018

2017

 
 
 
 
 
 
Interest expenses1
 
220

 
85

90

Foreign exchange loss (net)
 
539

 
1,510

—

Financial loss from forward contracts (net)
 
2,673

 
—

1,346

Financial loss from currency options (net)
 
—

 
—

4

Capital loss on investments, etc.
 
145

 
88

25

Result of associated companies
 
137

 
—

—

Other financial expenses
 
281

 
72

68

 
 
 
 
 
 
Total financial expenses
 
3,995

 
1,755

1,533

 
 
 
 
 
 

1.
Total interest income and expenses is measured at amortised cost for financial assets and liabilities.
Financial Impact From Forward Contracts and Currency Options, Specified
Financial impact from forward contracts and currency options, specified
DKK million
 
2019

 
2018

2017

 
 
 
 
 
 
Forward contracts
 
 
 
 
 
Income/(loss) transferred from other comprehensive income
 
(1,677
)
 
1,841

(2,016
)
Value adjustment of transferred contracts
 
(1,609
)
 
(1,299
)
2,477

Unrealised fair value adjustments of forward contracts
 
(217
)
 
(143
)
116

Realised foreign exchange gain/(loss) on forward contracts
 
830

 
1,257

(1,923
)
 
 
 
 
 
 
Financial income/(expense) from forward contracts
 
(2,673
)
 
1,656

(1,346
)
 
 
 
 
 
 
Currency options
 
 
 
 
 
Realised income/(loss) transferred from other comprehensive income
 
—

 
186

61

Value adjustment of transferred options
—

 
(3
)
(9
)
Foreign exchange gain/(loss) on currency options
 
—

 
(31
)
(56
)
 
 
 
 
 
 
Financial income/(expense) from currency options
 
—

 
152

(4
)