UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 6-K
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REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
January 31 2006
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NOVO NORDISK A/S
(Exact name of Registrant as specified in its charter)
NOVO ALLE
DK-2880, BAGSVAERD
DENMARK
(Address of principal executive offices)
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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-_____________________
FINAL RESULTS
NOVO NORDISK INCREASED SALES BY 16% IN 2005
OPERATING PROFIT GROWTH OF 16% EXCEEDED PREVIOUS EXPECTATIONS
o Reported sales in 2005 increased by 16%
o Sales of insulin analogues increased by 62%
o Sales of NovoSeven(R) increased by 16%
o Sales in North America increased by 27%
o Sales in International Operations increased by 25%
o Operating profit increased by 16% to DKK 8,088 million while underlying
operating profit (measured in local currencies and excluding non-recurring
items) increased by around 20%.
o Net profit increased by 17% to DKK 5,864 million and earnings per share
(diluted) increased by 20% to DKK 17.83.
o The long-term eco-efficiency targets established in 2001 were achieved in
2005. Total realised improvements in the eco-efficiency, as measured by EPI
indices, from 2001 to 2005 were 49% for water and 84% for energy
o At the Annual General Meeting on 8 March 2006, the Board of Directors will
propose a 25% increase in dividend to DKK 6.00 per share of DKK 2. A new
share repurchase programme of DKK 6 billion will be initiated in 2006.
o In 2006, Novo Nordisk expects to increase operating profit by slightly more
than 10%.
Lars Rebien Sorensen, president & CEO, said: "We are pleased with the
results achieved in 2005. Novo Nordisk insulin now constitutes more than half of
the insulin sold globally, and we expect the strong demand for our strategic
products to continue in 2006 despite increased competition. We are confident
that we also in 2006 will be able to deliver solid financial performance while
at the same time increasing our investments in both R&D and in sales and
marketing."
CONTENTS
PAGE
Consolidated financial statement 2005 3
Sales development by segments 4
Diabetes care 4
Biopharmaceuticals 5
Costs, licence fees and other operating income 6
Net financials and tax 7
Capital expenditure and free cash flow 7
Outlook 2006 7
Long-term financial targets 8
Research and development update 9
Equity 11
Corporate governance 11
Sustainability issues update 12
Legal issues update 13
Financial calendar 13
Conference call details 14
Forward-looking statement 14
Contact details 15
APPENDICES:
Appendices 1-3: Income statement, balance sheet and cash flow 16
statement
Appendix 4: Statement of changes in equity 19
Appendices 5-6: Quarterly numbers in DKK and EUR 20
CONSOLIDATED FINANCIAL STATEMENT 2005
These financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS). The accounting policies used in this
report are in all materiality consistent with those used in the Annual Report
2004.
(Amounts below in DKK million except earnings per share, dividend per share and
number of employees)
% CHANGE 2004 TO
PROFIT AND LOSS 2005 2004 2003 2002 2001 2005
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SALES 33,760 29,031 26,158 24,866 23,385 16%
GROSS PROFIT 24,583 20,981 18,749 18,268 17,349 17%
Gross margin 72.8% 72.3% 71.7% 73.5% 74.2%
Sales and distribution costs 9,691 8,280 7,451 7,187 6,951 17%
Percent of sales 28.7% 28.5% 28.5% 28.9% 29.7%
Research and development costs 5,085 4,352 4,055 3,952 3,872 17%
Percent of sales 15.1% 15.0% 15.5% 15.9% 16.6%
Administrative expenses 2,122 1,944 1,857 1,960 1,931 9%
Percent of sales 6.3% 6.7% 7.1% 7.9% 8.3%
Licence fees and other operating income 403 575 1,036 758 815 (30%)
OPERATING PROFIT 8,088 6,980 6,422 5,927 5,410 16%
Operating margin 24.0% 24.0% 24.6% 23.8% 23.1%
Net financials 146 477 954 401 285 (69%)
PROFIT BEFORE INCOME TAXES 8,234 7,457 7,376 6,328 5,695 10%
NET PROFIT 5,864 5,013 4,833 4,116 3,620 17%
Net profit margin 17.4% 17.3% 18.5% 16.6% 15.5%
OTHER KEY NUMBERS
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Depreciation, amortisation, etc 1,930 1,892 1,581 1,293 1,043 2%
Capital expenditure 3,665 2,999 2,273 3,893 3,829 23%
Free cash flow 4,833 4,278 3,846 497 186 13%
Equity 27,634 26,504 24,776 22,477 19,700 4%
Total assets 41,960 37,433 34,564 31,612 28,662 12%
Equity ratio 65.9% 70.8% 71.7% 71.1% 68.7%
Diluted earnings per share (in DKK) 17.83 14.83 14.15 11.85 10.45 20%
Dividend per share (in DKK) 6.00 4.80 4.40 3.60 3.35 25%
(proposed dividend for the financial year 2005)
Average number of full-time employees 21,146 19,520 18,381 17,073 14,771 8%
PERFORMANCE AGAINST LONG-TERM FINANCIAL TARGET LONG-TERM TARGET
RATIOS RATIO
Operating profit growth 15.9% 8.7% 8.4% 9.6% 15.0% 15%
Operating margin 24.0% 24.0% 24.6% 23.8% 23.1% 25%
Return on invested capital 24.7%1) 21.5% 20.4% 21.1% 23.2% 25%
Cash to earnings 82.4% 85.3% 79.6% 12.1% 5.1% 60%2)
1) ROIC adjusted for non-recurring tax reductions in 2005 equals 23.9%
2) Long-term target ratio measured as three years' average
SALES DEVELOPMENT BY SEGMENTS
Sales in 2005 increased by 16% in Danish kroner and by 15% measured in local
currencies. Sales growth was realised both within diabetes care and
biopharmaceuticals - primarily driven by the portfolio of insulin analogues as
well as NovoSeven(R). Furthermore, sales of growth hormone therapy products
contributed to growth.
SALES SHARE OF
2005 GROWTH GROWTH
DKK GROWTH IN LOCAL IN LOCAL
MILLION AS REPORTED CURRENCIES CURRENCIES
THE DIABETES CARE SEGMENT
Insulin analogues 7,298 62% 61% 62%
Human insulin and insulin-related 15,006 4% 3% 10%
products
Oral antidiabetic products 1,708 4% 3% 1%
DIABETES CARE - TOTAL 24,012 17% 16% 73%
THE BIOPHARMACEUTICALS SEGMENT
NovoSeven(R) 5,064 16% 16% 15%
Growth hormone therapy 2,781 20% 20% 10%
Other products 1,903 4% 4% 2%
BIOPHARMACEUTICALS - TOTAL 9,748 15% 14% 27%
TOTAL SALES 33,760 16% 15% 100%
Sales growth was realised in all regions. The main growth driver was North
America, constituting 28% of total sales, followed by International Operations
with 18% of total sales.
The growth of 16% in sales for 2005 was slightly above the expected growth of
13-15% as communicated with the financial results for the first nine months of
2005 on 27 October 2005.
DIABETES CARE
Sales of diabetes care products increased by 17% in Danish kroner to DKK 24,012
million compared to 2004 and by 16% in local currencies.
INSULIN ANALOGUES, HUMAN INSULIN AND INSULIN-RELATED PRODUCTS
Sales of insulin analogues, human insulin and insulin-related products increased
by 18% measured in Danish kroner to DKK 22,304 million and by 17% in local
currencies. All regions contributed to growth measured in local currencies as
well as in Danish kroner, with North America and International Operations having
the highest growth rates.
Novo Nordisk continues to consolidate its global leadership position within the
insulin segment: the company's total insulin market share worldwide is 51% and
the analogue market share is 34%, both measured in volume. The similar market
shares in 2004 were 50% and 28%, respectively.
Sales of insulin analogues increased by 62% in Danish kroner to DKK 7,298
million in 2005 and by 61% in local currencies. Insulin analogues constituted
around 62% of the overall sales growth for Novo Nordisk in 2005, measured in
local currencies, as compared to 55% in 2004.
North America
Sales in North America increased by 40% in Danish kroner and by 39% in local
currencies in 2005, reflecting solid sales performance for the insulin analogues
NovoLog(R) and NovoLog(R) Mix 70/30. Novo Nordisk now holds 38% of the total US
insulin market and 23% of the analogue market, both measured in volume. The
similar market shares in 2004 were 34% and 18%, respectively. The human insulin
products also contributed to the sales increase in 2005 due to higher volumes
and higher average sales prices.
Novo Nordisk has now completed the previously announced expansion of the US
diabetes care sales force by adding around 400 individuals, thereby bringing the
total sales force to 1,200. The company is thereby well positioned to launch
Levemir(R) in the US market, and the launch is expected to take place during the
second quarter of 2006.
Europe
Insulin sales in Europe increased by 8% in Danish kroner and by 7% in local
currencies, primarily reflecting progress for the portfolio of insulin
analogues, including Levemir(R). Novo Nordisk continues to consolidate the
leadership position in the insulin analogue market, holding 43% of the market,
measured in volume.
International Operations
Sales in International Operations increased by 27% in Danish kroner and by 23%
in local currencies. The primary growth drivers in 2005 were sales in China,
Russia and Brazil. China accounted for close to 20% of total insulin sales in
International Operations and 25% of the increase in insulin sales during 2005.
Novo Nordisk holds close to 60% of the Chinese insulin market, measured in
volume.
Whereas insulin sales in International Operations remain dominated by human
insulin products, the portfolio of insulin analogue products continues to add to
the overall sales growth in the region, with Turkey and Russia as the largest
growth drivers. Novo Nordisk remains the overall insulin market leader within
the International Operations region and also holds the leadership position
within insulin analogues.
Japan & Oceania
Sales in Japan & Oceania increased by 10% in Danish kroner and by 11% in local
currencies, primarily reflecting higher sales of NovoRapid(R) and NovoRapid(R)
30 Mix, assisted by the ongoing switch from durable to prefilled devices. In
Japan, Novo Nordisk holds close to 60% and in Australia close to 70% of the
insulin analogue market, measured by volume.
ORAL ANTIDIABETIC PRODUCTS
Sales of oral antidiabetic products increased by 4% in Danish kroner to DKK
1,708 million and by 3% in local currencies, compared to 2004. While the sales
development was positive both in Europe and International Operations, this was
partly offset by slightly lower sales in the US market, compared to 2004,
reflecting a lower market share for Prandin(R).
BIOPHARMACEUTICALS
Sales of biopharmaceutical products increased by 15% in Danish kroner to DKK
9,748 million and by 14% in local currencies compared to 2004.
NOVOSEVEN(R)
Sales of NovoSeven(R) increased by 16% in Danish kroner to DKK 5,064 million and
by 16% in local currencies compared to 2004. All regions contributed to the
increase in sales, with North America as the main contributor to growth.
The sales growth of NovoSeven(R) was influenced by several factors
during 2005. Due to the high penetration within spontaneous bleeds in congenital
inhibitor patients, the predominant part of the growth within the inhibitor
segment was generated by treatment of acquired haemophilia patients and usage of
NovoSeven(R) in connection with elective surgery. Treatment of spontaneous
bleeds for congenital inhibitor patients remains the largest area of use. In
addition, sales are perceived to have been positively affected by increased
investigational use of NovoSeven(R).
GROWTH HORMONE THERAPY (NORDITROPIN(R) AND NORDITROPIN(R) SIMPLEXX(R))
Sales of growth hormone therapy products increased by 20% in Danish kroner to
DKK 2,781 million and by 20% in local currencies, and all regions contributed to
the sales increase compared to 2004, with North America and Europe having the
highest growth rates. The NordiFlex(R) prefilled ready-to-use delivery device
was the main reason for the increase in sales.
OTHER PRODUCTS
Sales of other products within biopharmaceuticals, which predominantly consist
of hormone replacement therapy (HRT) products, increased by 4% in Danish kroner
to DKK 1,903 million and by 4% in local currencies compared to last year. The
main sales increase occurred in the US market, while sales in Europe were
slightly above the levels realised in 2004.
COSTS, LICENCE FEES AND OTHER OPERATING INCOME
The cost of goods sold increased by 14% to DKK 9,177 million, representing a
gross margin of 72.8%, compared to 72.3% in 2004. The improvement mainly
reflects an improved product mix and increased production efficiency.
Total non-production-related costs increased by 16% to DKK 16,898 million. The
increase in non-production-related costs in particular reflects increased sales
and distribution costs, which increased in line with the growth in sales. This
was mainly due to the increase in the US diabetes care sales force during the
fourth quarter of 2005 as well as costs related to the continued roll-out of
Levemir(R) in the European market, including expansion of sales forces in key
markets.
Total costs related to depreciation, amortisation and impairment losses in 2005
were DKK 1,930 million compared to DKK 1,892 million in 2004. The costs for 2005
include DKK 171 million in impairment charges, primarily related to fixed
assets, compared to DKK 326 million in 2004.
In 2005, Novo Nordisk expensed costs in relation to share-based incentive
programmes for senior management and other senior employees amounting to DKK 83
million. The comparable expense for 2004 was DKK 104 million. In addition, costs
amounting to DKK 140 million in connection with the previously announced general
employee share programme were expensed during the fourth quarter of 2005.
Licence fees and other operating income in 2005 were DKK 403 million, compared
to DKK 575 million in 2004, reflecting a lower level of non-recurring income in
2005.
Operating profit in 2005 was realised at DKK 8,088 million, compared to
DKK 6,980 million in 2004, corresponding to a growth rate of 16%. This was
slightly above the previously announced expectations of growth in operating
profit of 12-15%, communicated in connection with the release of the financial
results for the first nine months of 2005.
NET FINANCIALS AND TAX
Net financials showed an income of DKK 146 million in 2005 compared to an income
of DKK 477 million in 2004. Net financials in 2005 were in line with the
previously announced expectation of an income of DKK 150 million.
The result from associated companies was an income of DKK 319 million compared
to an expense of DKK 117 million in 2004, primarily reflecting Novo Nordisk's
share of the net loss in ZymoGenetics Inc being more than offset by total
non-recurring gains during 2005 of approximately DKK 450 million from sales of
shares in Ferrosan A/S and an offering of new shares in ZymoGenetics Inc.
The foreign exchange result was a loss of DKK 40 million compared to a gain of
DKK 533 million in 2004. The loss on foreign exchange in 2005 reflects losses
from foreign exchange hedging activities due to the higher level in 2005 of
especially US dollars versus Danish kroner compared to 2004. In accordance with
IFRS, an unrealised loss of DKK 345 million was deferred by the end of December
2005 for profit and loss recognition in 2006 and 2007 when the hedged
operational cash flows occur.
The effective tax rate for 2005 was 28.8%, a decrease from 32.8% in 2004,
equivalent to a total tax expense of DKK 2.4 billion in 2005. The lower
effective tax rate for 2005 is a result of several factors, including the
reduction of the Danish corporate income tax rate from 30% to 28%, effective for
the entire 2005, and a beneficial impact from the re-evaluation of the company's
deferred tax liabilities, as well as the tax-exempt status of the non-recurring
gains from associated companies as mentioned above.
The realised effective tax rate for 2005 was in line with the previously
communicated expectation of a tax rate of 'slightly below 29%' for the full year
of 2005.
CAPITAL EXPENDITURE AND FREE CASH FLOW
Net capital expenditure for property, plant and equipment for 2005 was realised
at DKK 3.7 billion, compared to DKK 3.0 billion for 2004. The main investment
projects in 2005 were the expansion of purification and filling capacity for
insulin products.
Free cash flow for 2005 was realised at DKK 4.8 billion compared to DKK 4.3
billion for 2004.
Novo Nordisk's financial resources at the end of 2005 were DKK 11.4 billion
compared to DKK 10.2 billion in 2004. Included in the financial resources are
undrawn committed credit facilities of approximately DKK 7.5 billion.
OUTLOOK 2006
Novo Nordisk expects at least 10% GROWTH IN SALES measured in local currencies
for 2006. This is based on expectations of a strong market for insulin products
in general and the continued market penetration of Novo Nordisk's insulin
analogue portfolio, combined with expectations of increasing NovoSeven(R) and
Norditropin(R) SimpleXx(R) sales. Given the current level of exchange rates
versus Danish kroner, the sales growth rate for 2006 measured in Danish kroner
is expected to be slightly higher than the growth rate measured in local
currencies.
For 2006, OPERATING PROFIT GROWTH measured in local currencies and excluding the
impact from non-recurring items is expected to grow by around 10%, reflecting
the expected higher spending on sales and marketing activities, combined with an
increased number of late-stage clinical development projects. Measured in Danish
kroner the growth in operating profit is expected to be slightly more than 10%,
reflecting a minor positive currency impact and the absence of non-recurring
income in 2006.
Novo Nordisk expects a NET FINANCIAL EXPENSE of DKK 350 million in 2006,
reflecting
o a net financial expense of around DKK 150 million (excluding Novo Nordisk's
share of profit & loss in associated companies), primarily related to
deferred losses from foreign exchange hedging contracts, and
o a negative impact from losses in associated companies of around DKK 200
million, primarily reflecting Novo Nordisk's share of the expected loss in
ZymoGenetics Inc.
Novo Nordisk expects the EFFECTIVE TAX RATE to be 30%, 1 percentage point higher
than the tax rate realised for 2005. As previously stated, the tax rate for 2005
was positively impacted by the tax-exempt status of non-recurring gains related
to associated companies as well as the positive impact from re-evaluation of
deferred tax liabilities.
Novo Nordisk plans CAPITAL EXPENDITURES of around DKK 3 billion, primarily
related to the construction of additional purification and filling capacity for
insulin products. DEPRECIATION, AMORTISATION AND IMPAIRMENT LOSSES are expected
to be around DKK 2.1 billion and the FREE CASH FLOW to be around DKK 4 billion.
All of the above expectations are provided that currency exchange rates remain
at the current level for 2006. All other things being equal, movements in key
invoicing currencies will impact Novo Nordisk's operating profit in 2006 as
illustrated below.
ANNUAL IMPACT ON NOVO NORDISK'S OPERATING PROFIT IN
INVOICING CURRENCY 2006 OF A 5% MOVEMENT IN CURRENCY
USD DKK 350 million
JPY DKK 150 million
GBP DKK 90 million
USD-related DKK 100 million
Note: USD-related currencies include CNY, CAD, ARS, BRL, MXN, CLP, SGD, TWD and
INR
Novo Nordisk has hedged expected net cash flows in US dollars, Japanese yen and
British pounds for 13, 12 and 10 months, respectively. In accordance with IFRS,
the financial impact from foreign exchange contracts will be included in 'Net
financials' as the underlying operational cash flows materialise.
LONG-TERM FINANCIAL TARGETS
Following the demerger of Novozymes towards the end of 2000, Novo Nordisk
communicated four long-term financial targets in early 2001. Focusing on growth,
profitability, financial return and generation of cash, the four targets have
served to balance short- and long-term considerations, thereby ensuring a focus
on shareholder value creation.
By 2005, Novo Nordisk is approaching the achievement of the long-term financial
targets. The four ratios are still considered the best way to ensure value
creation; however, the current targets are no longer providing sufficient
guidance on the targeted financial performance on a five-year horizon. Following
a review, the targets for the four ratios have been reassessed and the updated
targets are illustrated below:
Previous Result NEW
Ratio targets 2005 TARGETS
Operating margin 25% 24.0% 25%
Growth in operating profit 15% 15.9% 15%
Return on invested capital (ROIC) 25% 24.7%1) 30%
Cash to earnings (three years' average) 60% 82.4%2) 70%
1) Excluding the non-recurring reductions in 2005 in the effective tax rate,
ROIC would have been 23.9%
2) The cash to earnings ratio is 82.4% both for the year 2005 and as an average
for the period 2003-2005
The updated targets are guiding the financial development of Novo Nordisk given
the current scope of business activities and have been prepared assuming that
currency exchange rates remain at the current level. Individually, and on a
combined basis, these four financial targets are considered to be competitive
compared to the overall performance of the pharmaceutical industry.
The target for operating margin remains at 25%, as further productivity
improvements in production and administrative areas are expected to be
re-invested in research and development activities.
The targeted growth in operating profit remains at 15% on average. The target
allows for a deviation in an individual year if necessitated by business
opportunities or market conditions.
The target for return on invested capital (ROIC) measured post tax is raised
from 25% to 30%. The increased target reflects the expectation of continued
lower growth in invested capital compared to operating profit as well as a
recurring lower effective tax rate, partly due to the lowering of the Danish
corporate tax rate from 30% to 28% effective for the year 2005 onwards.
The targeted cash to earnings ratio is raised from 60% to 70% reflecting the
improved cash conversion ability in the last three years. As previously, this
target will be pursued as an average over a three-year period. Performance
measured by this ratio may be impacted in individual years by significant
in-licensing activities or other major investments.
RESEARCH AND DEVELOPMENT UPDATE
DIABETES CARE
In November, Novo Nordisk filed for marketing approval of Levemir(R) in Japan.
As is already the case in the US and Europe, Novo Nordisk expects, upon approval
of the product, to be the first and only company with both rapid-acting,
premixed and long-acting insulin analogues in Japan.
In Japan, Novo Nordisk has been informed by the Japanese regulatory authorities
that additional data for the NovoMix(R) 50 filing will be required for approval.
Novo Nordisk is currently planning the initiation of the necessary additional
clinical trials.
In the US, the FDA has approved a label expansion for NovoLog(R) Mix 70/30. Key
additions to the label include blood glucose control data showing that more
patients on a NovoLog(R) Mix 70/30 regimen reach an HbA1c target of 7.0%
compared to treatment with a basal insulin analogue. The label expansion is
expected to support further market share gains for NovoLog(R) Mix 70/30 in the
US market.
As previously communicated, the phase 2b study with liraglutide was successfully
completed in November 2005. The results from the 14-week study showed an
improvement of long-term glycaemic control, as measured by haemoglobinA1c
(HbA1c), of between 1.5 and 2 percentage points by treatment with liraglutide
compared to placebo. Liraglutide was well tolerated and nausea was reported at a
level of 5-10%. There were no cases of major or minor hypoglycaemia in spite of
the impressive glycaemic control. Phase 3 studies with liraglutide including
approximately 3,800 patients are still expected to start in February 2006.
The additional strip and device optimisation and validation in the AERx(R) iDMS
project is almost completed. Novo Nordisk now expects to confirm during the
first quarter of 2006 the re-initiation of the remaining phase 3 studies. This
confirmation will partly be subject to FDA's acceptance of the final
specifications for the AERx(R) system.
In October, Novo Nordisk initiated a phase 1 study with a novel oral
antidiabetic compound. The compound targets a pathway which is distinct from
currently marketed OADs.
Finally, a new-generation insulin preparation with improved properties has
entered clinical development in phase 1. This is closely in line with Novo
Nordisk's commitment to continuously improve the portfolio of insulin products
through innovation.
BIOPHARMACEUTICALS
Novo Nordisk has initiated a phase 2 clinical study in Japan with NovoSeven(R)
for the treatment of intracerebral haemorrhage (ICH). The study is expected to
include around 100 patients and to be completed during 2007.
In October, Novo Nordisk filed in the EU for marketing approval of NovoSeven(R)
in ICH, based on results of clinical phase 2 trials. Novo Nordisk has received
preliminary feedback from EMEA, indicating a preference for receiving additional
data. Based on this, and a higher than expected recruitment rate in the ongoing
global phase 3 study, Novo Nordisk will withdraw the current file and resubmit
an application following the completion of phase 3. The updated application will
reflect the less restrictive inclusion criteria in the phase 3 trial. This
trial, now expected to be completed by the end of 2006, is aimed at satisfying
the needs of regulatory agencies for approval worldwide outside Japan.
The NovoSeven(R) phase 3 clinical study in trauma outside the US is continuing
as planned. As previously communicated, the study includes mortality as a
primary study outcome and is expected to include around 1,500 patients.
In the US, the FDA has asked for additional data related to the feasibility of
conducting a NovoSeven(R) phase 3 clinical study in trauma without a waiver of
informed consent. Therefore, Novo Nordisk has decided to initiate a phase 3
study without a waiver of informed consent, with the same primary end-point as
the non-US trial, in order to provide the required data to the FDA. Novo Nordisk
expects this process to take at least one year, but the timeline will ultimately
depend on how the FDA interprets preliminary patient enrolment data from the
study conducted without a waiver of informed consent.
Novo Nordisk filed in December for marketing approval in the US of NovoSeven(R)
for treatment of bleeding episodes in patients with acquired haemophilia.
Novo Nordisk expects to finalise four ongoing phase 2 studies with NovoSeven(R)
within traumatic brain injury, cardiac surgery, spinal surgery and upper
gastro-intestinal bleeds, respectively, in the second half of 2006.
In the HRT area, Novo Nordisk now expects to file in February 2006 in Europe and
the US for marketing approval of an ultra-low-dose version of Activelle(R)
(Activella(R) in the US).
EQUITY
Total equity was DKK 27,634 million at the end of 2005, equal to 65.9% of total
assets, compared to 70.8% at the end of 2004. The lower equity ratio reflects
the accelerated completion of the DKK 5 billion share repurchase programme as
well as unrealised losses on cash flow hedges, deferred as part of net equity
for profit and loss recognition in 2006 and 2007. Please refer to appendix 4 for
further elaboration of changes in equity during 2005.
PROPOSED DIVIDEND AND REDUCTION OF SHARE CAPITAL
At the Annual General Meeting on 8 March 2006, the Board of Directors will
propose a 25% increase in dividend to DKK 6.00 per share of DKK 2, corresponding
to a pay-out ratio of 33.2%, compared to 31.8% for the financial year 2004. No
dividend will be paid on the company's holding of treasury B shares.
In order to maintain capital structure flexibility the Board of Directors will
also propose a reduction in the B share capital, by cancellation of nominally
DKK 35.5 million (17,734,708 shares) of current treasury B shares, to DKK 566.4
million. This corresponds to a 5% reduction of the total share capital.
TREASURY SHARES AND SHARE REPURCHASE PROGRAMME
As per 27 January 2006, Novo Nordisk A/S and its wholly-owned affiliates owned
30,979,219 of its own B shares, corresponding to 8.73% of the total share
capital. During the fourth quarter of 2005, a total of 914,135 B shares were
disposed of to employees under the general employee share programme and to
employees who exercised stock options granted by Novo Nordisk.
During 2005, Novo Nordisk purchased 9,657,118 B shares at a cash value of DKK 3
billion which, combined with the DKK 2 billion worth of B shares repurchased
during 2004, completes the share repurchase programme of DKK 5 billion announced
in April 2004.
The Board of Directors has approved the initiation of a new share repurchase
programme of DKK 6 billion to be repurchased during 2006 and 2007. The objective
is to align Novo Nordisk's capital structure to the expected positive
development in free cash flow. The completion of the new programme will be
subject to the shareholders' approval at the Annual General Meeting on 8 March
2006 of the proposed reduction of the company's share capital.
The repurchased shares will be kept as treasury shares and the value of the
repurchased shares will, in accordance with Novo Nordisk's accounting policies,
be written off against equity. A corresponding reduction will be made in 'number
of shares outstanding' used in the calculation of Novo Nordisk's financial
ratios.
CORPORATE GOVERNANCE
LONG-TERM SHARE-BASED INCENTIVE PROGRAMME
As from 2004, Novo Nordisk's Executive Management and the Senior Management
Board (26 in total) participate in a performance-based incentive programme where
Novo Nordisk B shares are allocated annually to a bonus pool when certain
predefined business-related targets have been achieved. The annual maximum
allocation of shares to the bonus pool is capped at the equivalent of eight
months of salary on average per participant. The shares in the bonus pool are
locked up for a three-year period before they are transferred to the executives
at the expiry of the three-year lock-up period.
Based on an assessment of the economic value generated in 2005 as well as the
performance of the R&D portfolio and key sustainability projects, the Board of
Directors on 26 January 2006 approved the establishment of a bonus pool for 2005
by allocating a total of 116,013 Novo Nordisk B shares, corresponding to a cash
value of DKK 35.5 million. This allocation amounts to seven months of salary on
average per participant.
SHARE OPTION PROGRAMME
The grant of share options to approximately 400 senior employees, excluding the
members of Executive Management and the Senior Management Board, in accordance
with Novo Nordisk's share option programme is subject to the achievement of
shareholder value-based targets as determined by the Board of Directors. For
2005, targets were established for operating profit and return on invested
capital, respectively, in addition to a number of non-financial targets for the
performance of the R&D portfolio and key sustainability projects. These
non-financial targets are identical to the targets included in the long-term
share-based incentive programme for Executive Management and the Senior
Management Board.
As the majority of the non-financial targets and both financial targets for 2005
were achieved, a total of 820,234 share options will be granted at an exercise
price of DKK 306 per option. The options can be exercised in the period 31
January 2009 - 30 January 2014. The value of the share option programme is
estimated to be DKK 47 million, based on the Black-Scholes model. The company's
holding of its own shares will cover this commitment.
COMPLIANCE WITH SARBANES-OXLEY REQUIREMENTS
In 2005, Novo Nordisk completed the process of becoming compliant with the
Sarbanes-Oxley Act section 404 that requires detailed documentation of how
financial reporting processes are designed and operating: the flow of
information, and systems and controls supporting the reporting processes. Novo
Nordisk must ensure that there are no material weaknesses in the internal
controls which could lead to a material misstatement in the company's financial
reporting. Novo Nordisk will include a conclusion on the evaluation of the
financial reporting processes and the auditors' evaluation hereof in the
so-called Form 20-F filing to the US Securities and Exchange Commission, which
is expected to be submitted in February 2006. Compliance with these requirements
as a foreign registrant on the New York Stock Exchange (NYSE) is only required
by the end of 2006 and, hence, Novo Nordisk's compliance with section 404 is
achieved one year ahead of requirements.
SUSTAINABILITY ISSUES UPDATE
TARGETS FOR ECO-EFFICIENCY ACHIEVED
In 2005, Novo Nordisk continued to improve eco-efficiency, a measure for the
ability to produce more pharmaceutical products with use of less energy and
water. The five-year targets of annual improvements of the water and energy use
efficiency at 5% and 4%, respectively, have been exceeded. Total realised
improvements for 2001 to 2005 were 49% for water and 84% for energy.
TARGET SET TO ACHIEVE REDUCTION OF CO2 EMISSIONS
By 2014, Novo Nordisk will reduce its CO2 emissions by 10% compared to 2004
emission levels. This is an ambitious target for the company's climate strategy,
considering that Novo Nordisk emissions would increase by an estimated 60-70% in
the absence of emission reduction programmes. The target has been defined in an
agreement with the World Wide Fund for Nature (WWF), which makes Novo Nordisk
the 10th company in the world to become a member of the Climate Savers
Programme.
The significant CO2 reductions will be achieved through a broad range of
measures including improved energy efficiency, fuel switching and conversion to
renewable sources such as wind and solar energy. Currently 90% of the company's
CO2 emissions arise in Denmark where the energy supplies are predominantly based
on fossil fuels.
BUSINESS ETHICS POLICY IMPLEMENTED
Novo Nordisk has implemented a new global business ethics policy supported by a
set of standard operating procedures. The policy adheres to the principles of
the UN Convention against Corruption and the Global Compact. Implementation
measures include training of relevant staff, an advisory function and compliance
audits.
LEGAL ISSUES UPDATE
US HORMONE THERAPY LITIGATION
As of 26 January 2006, Novo Nordisk Inc, as the majority of hormone therapy
product manufacturers in the US, is a defendant in product liability lawsuits
related to hormone therapy products. These lawsuits currently involve a total of
37 individuals (as compared to 34 individuals in October 2005) who allege to
have used a Novo Nordisk hormone therapy product. These products (Activella(R)
and Vagifem(R)) 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). According to information received from Pfizer,
an additional 13 individuals (as compared to 16 individuals in October 2005)
currently allege, in relation to similar lawsuits against Pfizer Inc, that they
also have used a Novo Nordisk hormone therapy product. Currently, it is expected
that the first trial may take place in the third or fourth quarter of 2006;
however, Novo Nordisk does not expect the claims to impact the company's
financial outlook.
US SUBPOENA
In December 2005, the office of the US Attorney for the Eastern District of New
York served Novo Nordisk with a subpoena calling for the production of documents
relating to the company's US marketing and promotional practices. Novo Nordisk
believes that the investigation is limited to its insulin products. The subpoena
indicates that the documents are necessary for the investigation of potential
criminal offences relating to healthcare benefit programmes. Novo Nordisk is
cooperating with the US Attorney in this investigation.
Financial calendar
2 February 2006 - PDF version of the Annual Report available on novonordisk.com
13 February 2006 - Printed and online versions of the Annual Report
8 March 2006 - Annual General Meeting
28 April 2006 - Financial statement for the first quarter of 2006
2 August 2006 - Financial statement for the first half of 2006
27 October 2006 - Financial statement for the first nine months of 2006
31 January 2007 - Financial statement for 2006
CONFERENCE CALL DETAILS
At 11.00 CET today, corresponding to 10.00 am London time and 5.00 am New York
time, a conference call will be held. Investors will be able to listen in via a
link on novonordisk.com. This link can be found under 'Investors - Conference
call'. Presentation material for the conference call will be made available
approximately one hour before on the same page.
FORWARD-LOOKING STATEMENT
The above sections contain forward-looking statements as the term is defined in
the US Private Securities Litigation Reform Act of 1995. Forward-looking
statements provide current expectations or forecasts of events such as new
product introductions, product approvals and financial performance.
Such forward-looking statements are subject to risks, uncertainties and
inaccurate assumptions. This may cause actual results to differ materially from
expectations. Factors that may affect future results include interest rate and
currency exchange rate fluctuations, delay or failure of development projects,
production problems, unexpected contract breaches or terminations,
government-mandated or market-driven price decreases for Novo Nordisk's
products, introduction of competing products, Novo Nordisk's ability to
successfully market both new and existing products, exposure to product
liability and other lawsuits, changes in reimbursement rules and governmental
laws and related interpretation thereof, and unexpected growth in costs and
expenses. Risks and uncertainties are further described in reports filed by Novo
Nordisk with the US Securities and Exchange Commission (SEC) including the
company's Form 20-F, which was filed on 21 February 2005. Please also refer to
the section 'Risk Management' in the Annual Report 2005. Novo Nordisk is under
no duty to update any of the forward-looking statements or to conform such
statements to actual results, unless required by law.
Bagsvaerd 27 January 2006
Board of Directors
Contacts for further information
Media: Investors:
Outside North America: Outside North America:
Mike Rulis Mogens Thorsager Jensen
Tel: (+45) 4442 3573 Tel: (+45) 4442 7945
E-mail: mike@novonordisk.com E-mail: mtj@novonordisk.com
Christian Qvist Frandsen
Tel: (+45) 4443 5182
E-mail: cqfr@novonordisk.com
In North America: In North America:
Susan T Jackson Mads Veggerby Lausten
Tel: (+1) 609 919 7776 Tel: (+1) 609 919 7937
E-mail: stja@novonordisk.com E-mail: mlau@novonordisk.com
Further information on Novo Nordisk is available on the company's internet
homepage at the address novonordisk.com
APPENDIX 1: CONSOLIDATED INCOME STATEMENT
DKK million 2005 2004
Sales 33,760 29,031
Cost of goods sold 9,177 8,050
GROSS PROFIT 24,583 20,981
Sales and distribution costs 9,691 8,280
Research and development costs 5,085 4,352
Administrative expenses 2,122 1,944
Licence fees and other operating income (net) 403 575
OPERATING PROFIT 8,088 6,980
Share of profit/(loss) in associated companies 319 (117)
Financial income 498 898
Financial expenses 671 304
PROFIT BEFORE INCOME TAXES 8,234 7,457
Income taxes 2,370 2,444
NET PROFIT 5,864 5,013
BASIC EARNINGS PER SHARE (DKK) 17.89 14.89
DILUTED EARNINGS PER SHARE (DKK) 17.83 14.83
SEGMENT SALES:
Diabetes care 24,012 20,533
Biopharmaceuticals 9,748 8,498
SEGMENT OPERATING PROFIT:
Diabetes care 4,055 3,404
Operating margin 16.9% 16.6%
Biopharmaceuticals 4,033 3,576
Operating margin 41.4% 42.1%
APPENDIX 2: CONSOLIDATED BALANCE SHEET
DKK million 31DEC2005 31Dec2004
ASSETS
Intangible assets 485 314
Property, plant and equipment 19,941 17,559
Investments in associated companies 926 883
Deferred income tax assets 879 769
Other financial assets 169 159
TOTAL LONG-TERM ASSETS 22,400 19,684
Inventories 7,782 7,163
Trade receivables 4,794 4,062
Tax receivables 504 710
Other receivables 1,455 1,040
Marketable securities and financial derivatives 1,722 1,341
Cash at bank and in hand 3,303 3,433
TOTAL CURRENT ASSETS 19,560 17,749
TOTAL ASSETS 41,960 37,433
EQUITY AND LIABILITIES
Share capital 709 709
Treasury shares (61) (45)
Share premium account - 2,565
Retained earnings 26,962 22,671
Other comprehensive income 24 604
TOTAL EQUITY 27,634 26,504
Long-term debt 1,248 1,188
Deferred income tax liabilities 1,846 1,853
Provision for pensions 316 250
Other provisions 335 358
TOTAL LONG-TERM LIABILITIES 3,745 3,649
Short-term debt and financial derivatives 1,444 507
Trade payables 1,500 1,061
Tax payables 676 631
Other liabilities 4,577 3,721
Other provisions 2,384 1,360
TOTAL CURRENT LIABILITIES 10,581 7,280
TOTAL LIABILITIES 14,326 10,929
TOTAL EQUITY AND LIABILITIES 41,960 37,433
Note: Financial derivatives have been reclassified from Other receivables to
Marketable securities and financial derivatives. The calculation of ROIC has
been adjusted accordingly.
APPENDIX 3: CONSOLIDATED CASH FLOW STATEMENT AND FINANCIAL RESOURCES
DKK million 2005 2004
NET PROFIT 5,864 5,013
Reversals with no effect on cash flow:
Income taxes 2,370 2,444
Depreciation, amortisation and impairment losses 1,930 1,892
Interest income and interest expenses 44 (128)
Other reversals with no effect on cash flow 1,109 1,018
Income taxes paid (2,138) (2,866)
Interest received and interest paid (net) (73) 109
CASH FLOW BEFORE CHANGE IN WORKING CAPITAL 9,106 7,482
CHANGE IN WORKING CAPITAL:
(Increase)/decrease in trade receivables and other
receivables (1,139) 211
(Increase)/decrease in inventories (618) (623)
Increase/(decrease) in trade payables and other
liabilities 1,363 519
CASH FLOW FROM OPERATING ACTIVITIES 8,712 7,589
INVESTMENTS:
Sale of intangible assets and long-term financial
assets 400 -
Acquisition of subsidiaries and business units (350) -
Purchase of intangible assets and long-term
financial assets (264) (312)
Sale of property, plant and equipment 234 140
Purchase of property, plant and equipment (3,899) (3,139)
Net change in marketable securities
(maturity exceeding three months) (1,032) 1,310
CASH FLOW FROM INVESTING ACTIVITIES (4,911) (2,001)
FINANCING:
New long-term debt - 505
Repayment of long-term debt (29) (574)
Purchase of treasury shares (3,018) (1,982)
Sale of treasury shares 206 87
Dividends paid (1,594) (1,488)
CASH FLOW FROM FINANCING ACTIVITIES (4,435) (3,452)
NET CASH FLOW (634) 2,136
Unrealised gain/(loss) on exchange rates
and marketable securities included in cash
and cash equivalents 154 (14)
NET CHANGE IN CASH AND CASH EQUIVALENTS (480) 2,122
Cash and cash equivalents at the beginning of the year 2,963 841
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 2,483 2,963
Bonds with term to maturity exceeding three months 1,502 508
Undrawn committed credit facilities 7,461 6,694
FINANCIAL RESOURCES AT THE END OF THE YEAR 11,446 10,165
Cash flow from operating activities 8,712 7,589
+ Cash flow from investing activities (4,911) (2,001)
- Net change in marketable securities
(maturity exceeding three months) (1,032) 1,310
FREE CASH FLOW 4,833 4,278
APPENDIX 4: CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Other comprehensive income
Deferred
Share Exchange gain/loss on
Share Treasury Premium Retained rate cash flow Other
DKK million capital shares account earnings adjustments hedges adjustments TOTAL
2005
Balance at the beginning of
the year 709 (45) 2,565 22,671 (40) 461 183 26,504
Exchange rate adjustment of
investments in subsidiaries 182 182
Deferred (gain)/loss on cash
flow hedges at the beginning
of the year recognised in the
Income statement for the year (461) (461)
Deferred gain/(loss) on cash
flow hedges at the end of the
year (345) (345)
Other adjustments 29 44 73
Net income recognised
directly in equity - - - 29 182 (806) 44 (551)
Net profit for the year 5,864 5,864
Total income for the year - - - 5,893 182 (806) 44 5,313
Cost of share-based payment 223 223
Purchase of treasury shares (19) (2,999) (3,018)
Sale of treasury shares 3 203 206
Transfer of share premium
account to retained
earnings*) (2,565) 2,565 -
Dividends (1,594) (1,594)
BALANCE AT THE END OF THE YEAR 709 (61) - 26,962 142 (345) 227 27,634
*) In accordance with changes in the Danish Companies Act the share premium account is transferred
to retained earnings.
At the end of the year proposed dividends of DKK 1,945 million are included in
retained earnings. No dividend is declared on treasury shares.
2004
Balance at the beginning of
the year 709 (33) 2,565 20,925 (79) 513 176 24,776
Exchange rate adjustment of
investments in subsidiaries 39 39
Deferred (gain)/loss on cash
flow hedges at the beginning
of the year recognised in the
Income statement for the year (513) (513)
Deferred gain/(loss) on cash
flow hedges at the end of the
year 461 461
Other adjustments 7 7
Net income recognised
directly in equity - - - - 39 (52) 7 (6)
Net profit for the year 5,013 5,013
Total income for the year - - - 5,013 39 (52) 7 5,007
Cost of share-based payment 104 104
Purchase of treasury shares (13) (1,969) (1,982)
Sale of treasury shares 1 86 87
Dividends (1,488) (1,488)
BALANCE AT THE END OF THE YEAR 709 (45) 2,565 22,671 (40) 461 183 26,504
At the end of the year proposed dividends of DKK 1,594 million are included in
retained earnings. No dividend is declared on treasury shares.
APPENDIX 5: QUARTERLY NUMBERS IN DKK
(Amounts in DKK million, except number of employees, earnings per share and
number of shares outstanding.)
% change
2005 2004 Q42004-
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 2005
SALES 9,426 8,793 8,283 7,258 7,944 7,408 7,164 6,515 19%
Gross profit 6,902 6,435 6,073 5,173 5,783 5,318 5,219 4,661 19%
Gross margin 73.2% 73.2% 73.3% 71.3% 72.8% 71.8% 72.9% 71.5%
Sales and distribution costs 2,883 2,402 2,267 2,139 2,364 2,039 1,991 1,886 22%
Percent of sales 30.6% 27.3% 27.4% 29.5% 29.8% 27.5% 27.8% 28.9%
Research and development costs 1,551 1,231 1,197 1,106 1,243 1,086 983 1,040 25%
Percent of sales 16.5% 14.0% 14.5% 15.2% 15.6% 14.7% 13.7% 16.0%
Administrative expenses 624 545 470 483 534 502 431 477 17%
Percent of sales 6.6% 6.2% 5.7% 6.7% 6.7% 6.8% 6.0% 7.3%
Licence fees and other operating
income (net) 79 55 202 67 213 59 71 232 -63%
OPERATING PROFIT 1,923 2,312 2,341 1,512 1,855 1,750 1,885 1,490 4%
Operating margin 20.4% 26.3% 28.3% 20.8% 23.4% 23.6% 26.3% 22.9%
Share of profit/(loss) in
associated companies (25) 149 (43) 238 (20) 12 (40) (69) 25%
Financial income 88 58 238 114 491 125 104 178 -82%
Financial expenses 299 103 193 76 186 52 44 22 61%
Profit before taxation 1,687 2,416 2,343 1,788 2,140 1,835 1,905 1,577 -21%
NET PROFIT 1,196 1,752 1,684 1,232 1,462 1,226 1,272 1,053 -18%
Depreciation, amortisation and
impairment losses 537 559 422 412 549 576 387 380 -2%
Capital expenditure 1,120 1,087 735 723 1,092 873 642 392 3%
Cash flow from operating
activities 2,359 2,905 2,105 1,343 2,039 2,490 1,710 1,350 16%
Free cash flow 1,147 1,740 1,332 614 839 1,597 956 886 37%
Equity 27,634 26,589 25,620 25,729 26,504 25,557 24,827 23,942 4%
Total assets 41,960 40,181 37,731 36,497 37,433 35,587 34,248 33,838 12%
Equity ratio 65.9% 66.2% 67.9% 70.5% 70.8% 71.8% 72.5% 70.8%
Full-time employees at the end of
the period 22,007 21,631 21,246 20,942 20,285 20,001 19,631 19,179 8%
Diluted earnings per share (in
DKK)* 3.68 5.36 5.09 3.70 4.37 3.63 3.74 3.10 -16%
Average number of shares
outstanding (million)*
- used for diluted earnings per
share 324.8 326.9 330.8 333.2 334.7 338.2 339.8 339.8 -3%
Sales by business segments:
Insulin analogues 2,229 1,929 1,692 1,448 1,332 1,252 1,037 886 67%
Human insulin and
insulin-related sales 4,036 3,871 3,753 3,346 3,944 3,593 3,640 3,206 2%
Oral antidiabetic products
(OAD) 454 487 391 376 403 445 379 416 13%
DIABETES CARE TOTAL 6,719 6,287 5,836 5,170 5,679 5,290 5,056 4,508 18%
NovoSeven(R) 1,390 1,336 1,248 1,090 1,170 1,086 1,084 1,019 19%
Growth hormone therapy 781 700 704 596 651 559 557 550 20%
Hormone replacement therapy 421 406 410 328 364 396 389 339 16%
Other products 115 64 85 74 80 77 78 99 44%
BIOPHARMACEUTICALS TOTAL 2,707 2,506 2,447 2,088 2,265 2,118 2,108 2,007 20%
Sales by geographic segments:
Europe 3,602 3,434 3,405 3,006 3,364 3,057 3,106 2,884 7%
North America 2,696 2,462 2,282 2,092 1,816 2,098 1,837 1,727 48%
International Operations 1,797 1,750 1,395 1,128 1,559 1,171 1,134 980 15%
Japan & Oceania 1,331 1,147 1,201 1,032 1,205 1,082 1,087 924 10%
Segment operating profit:
Diabetes care 909 1,161 1,235 750 1,047 746 936 675 -13%
Biopharmaceuticals 1,014 1,151 1,106 762 808 1,004 949 815 25%
*) For Q4 2005 diluted earnings per share/ADR of a nominal value of DKK 2, which
include options on Novo Nordisk's treasury shares with an exercise price below
current market value, have been based on an average number of shares of
324,764,318.
APPENDIX 6: QUARTERLY NUMBERS IN EUR
(Amounts in EUR million, except number of employees, earnings per share and
number of shares outstanding.)
Key figures are translated into EUR as supplementary information - the
translation is based on average exchange rate for income statement and exchange
rate at the balance sheet date for balance sheet items.
% change
2005 2004 Q42004-
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 2005
SALES 1,264 1,179 1,113 975 1,068 997 962 875 19%
Gross profit 925 863 816 695 778 715 701 626 19%
Gross margin 73.2% 73.2% 73.3% 71.3% 72.8% 71.8% 72.9% 71.5%
Sales and distribution costs 387 322 305 287 318 274 268 253 22%
Percent of sales 30.6% 27.3% 27.4% 29.5% 29.8% 27.5% 27.8% 28.9%
Research and development costs 208 165 160 149 167 146 132 140 25%
Percent of sales 16.5% 14.0% 14.5% 15.2% 15.6% 14.7% 13.7% 16.0%
Administrative expenses 84 73 63 65 72 67 58 64 17%
Percent of sales 6.6% 6.2% 5.7% 6.7% 6.7% 6.8% 6.0% 7.3%
Licence fees and other operating
income (net) 11 7 27 9 28 8 10 31 -63%
OPERATING PROFIT 257 310 315 203 249 236 253 200 4%
Operating margin 20.4% 26.3% 28.3% 20.8% 23.4% 23.6% 26.3% 22.9%
Share of profit in associated R&D
companies (3) 20 (6) 32 (1) - (5) (9) 25%
Financial income 12 8 32 15 65 17 14 24 -82%
Financial expenses 40 14 26 10 25 7 6 3 61%
Profit before taxation 226 324 315 240 288 246 256 212 -21%
NET PROFIT 160 235 226 166 197 165 171 141 -18%
Depreciation, amortisation and
impairment losses 72 75 57 55 74 77 52 51 -2%
Capital expenditure 150 146 99 97 147 117 86 53 3%
Cash flow from operating
activities 316 390 283 180 274 335 230 181 16%
Free cash flow 154 234 179 82 113 215 128 119 37%
Equity 3,704 3,563 3,438 3,454 3,563 3,434 3,340 3,216 4%
Total assets 5,624 5,384 5,064 4,899 5,033 4,782 4,608 4,545 12%
Equity ratio 65.9% 66.2% 67.9% 70.5% 70.8% 71.8% 72.5% 70.8%
Full-time employees at the end of
the period 22,007 21,631 21,246 20,942 20,285 20,001 19,631 19,179 8%
Diluted earnings per share (in
EUR)* 0.49 0.72 0.68 0.50 0.58 0.49 0.50 0.42 -16%
Average number of shares
outstanding (million)*
- used for diluted earnings per
share 324.8 326.9 330.8 333.2 334.7 338.2 339.8 339.8 -3%
Sales by business segments:
Insulin analogues 299 258 227 195 179 169 139 119 67%
Human insulin and
insulin-related sales 541 520 504 450 531 483 489 430 2%
Oral antidiabetic products
(OAD) 61 65 52 51 54 60 51 56 13%
DIABETES CARE TOTAL 901 843 783 696 764 712 679 605 18%
NovoSeven(R) 187 179 168 146 157 147 145 137 19%
Growth hormone therapy 105 93 95 80 87 75 75 74 20%
Hormone replacement therapy 56 55 55 44 49 53 52 46 16%
Other products 15 9 12 9 11 10 11 13 44%
BIOPHARMACEUTICALS TOTAL 363 336 330 279 304 285 283 270 20%
Sales by geographic segments:
Europe 484 460 457 404 452 411 418 387 7%
North America 361 330 307 281 244 282 247 232 48%
International Operations 241 235 187 152 210 157 152 132 15%
Japan & Oceania 178 154 162 138 162 147 145 124 10%
Segment operating profit:
Diabetes care 121 156 166 101 141 101 125 91 -13%
Biopharmaceuticals 136 154 149 102 108 135 128 109 25%
*) For Q4 2005 diluted earnings per share/ADR of a nominal value of DKK 2, which
include options on Novo Nordisk's treasury shares with an exercise price below
current market value, have been based on an average number of shares of
324,764,318.
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: January 31 2006 NOVO NORDISK A/S
---------------------------------------------------
Lars Rebien Sorensen,
President and Chief Executive Officer