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
August 7 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-_____________________
INTERIM RESULTS
FINANCIAL STATEMENT FOR THE PERIOD 1 JANUARY 2006 TO 30 JUNE 2006
Stock Exchange Announcement no 26 / 2006
Novo Nordisk increased sales by 20% in the first six months
EXPECTATIONS FOR OPERATING PROFIT GROWTH FOR 2006 INCREASED TO 13%
o Reported sales increased by 20% in the first six months of 2006
* Sales of insulin analogues increased by 59%
* Sales of NovoSeven(R) increased by 19%
* Sales in North America increased by 31%
* Sales in International Operations increased by 41%
o Operating profit increased by 17% to DKK 4,509 million. Adjusted for the
impact from currencies and non-recurring items, underlying operating
profit increased by around 16%.
o Net profit was largely unchanged at DKK 2,954 million, and earnings per
share (diluted) increased by 4% to DKK 9.09.
o The full-year expectations have been increased
* Reported sales are expected to grow by 13-15%, an increase from
the previous expectation of 11-13%, primarily reflecting the solid
sales performance during the first six months.
* Operating profit is expected to grow by around 13% as reported,
compared to the previous expectation of slightly more than 10%
growth, whereas underlying operating profit growth is now expected
to be around 15%, up from the previous expectation of around 10%.
Lars Rebien Sorensen, president and CEO, said: "Our business has performed very
well in the first six months of 2006 in terms of both sales and production
economics. This enables us to upgrade the full-year growth expectations for both
sales and operating profit."
FINANCIAL STATEMENT FOR THE FIRST SIX MONTHS OF 2006
This interim report has been prepared in accordance with International Financial
Reporting Standards (IFRS). The accounting policies used in the interim report
are consistent with those used in the Annual Report 2005. The interim report has
not been audited.
(Amounts in DKK million, except average number of shares outstanding,
earnings per share and full-time employees.)
% CHANGE H1 2005 TO H1 2006
INCOME STATEMENT H1 2006 H1 2005
SALES 18,673 15,541 20%
GROSS PROFIT 14,006 11,246 25%
Gross margin 75.0% 72.4%
Sales and distribution costs 5,578 4,406 27%
Percent of sales 29.9% 28.4%
Research and development costs 2,917 2,303 27%
Percent of sales 15.6% 14.8%
Administrative expenses 1,137 953 19%
Percent of sales 6.1% 6.1%
Licence fees and other 135 269 (50%)
operating income (net)
OPERATING PROFIT 4,509 3,853 17%
Operating margin 24.1% 24.8%
Share of profit/(loss) in (118) 195 (161%)
associated companies
Other net financial (171) 83 (306%)
income/(loss)
PROFIT BEFORE TAX 4,220 4,131 2%
NET PROFIT 2,954 2,916 1%
Net profit margin 15.8% 18.8%
OTHER KEY NUMBERS
Depreciation, amortisation 968 834 16%
and impairment losses
Capital expenditure 1,217 1,458 (17%)
Cash flow from operating 3,859 3,448 12%
activities
Free cash flow 2,462 1,946 27%
Total assets 43,145 37,731 14%
Equity 28,908 25,620 13%
Equity ratio 67.0% 67.9%
Average number of shares 324.8 332.0 (2%)
outstanding (million) -
diluted
DILUTED EARNINGS PER SHARE 9.09 8.78 4%
(IN DKK)
Full-time employees at the 22,792 21,246 7%
end of the period
SALES DEVELOPMENT BY SEGMENTS
Sales increased by 20% in Danish kroner and by 18% measured in local currencies.
Growth was realised both within diabetes care and biopharmaceuticals - primarily
driven by the portfolio of insulin analogues, NovoSeven(R) and growth hormone
therapy products.
SHARE OF
SALES GROWTH GROWTH
H1 2006 GROWTH IN LOCAL IN LOCAL
DKK MILLION AS REPORTED CURRENCIES CURRENCIES
THE DIABETES CARE SEGMENT
Insulin analogues 5,002 59% 56% 65%
Human insulin and 7,410 4% 2% 5%
insulin-related sales
Oral antidiabetic 960 25% 21% 6%
products
DIABETES CARE - TOTAL 13,372 21% 19% 76%
THE BIOPHARMACEUTICALS SEGMENT
NovoSeven(R) 2,772 19% 15% 13%
Growth hormone therapy 1,591 22% 22% 10%
Other products 938 5% 2% 1%
BIOPHARMACEUTICALS - TOTAL 5,301 17% 14% 24%
TOTAL SALES 18,673 20% 18% 100%
Sales growth, measured in local currencies, was realised in all regions, with
North America, International Operations and Europe as the main growth drivers.
DIABETES CARE
Sales of diabetes care products increased by 21% in Danish kroner to DKK 13,372
million and by 19% in local currencies compared to
the first six months of 2005.
INSULIN ANALOGUES, HUMAN INSULIN AND INSULIN-RELATED PRODUCTS
Sales of insulin analogues, human insulin and insulin-related products increased
by 21% to DKK 12,412 million in Danish kroner and by 19% measured in local
currencies. North America and International Operations (in particular China,
India and Russia) delivered the highest growth rates but all regions contributed
to growth. Novo Nordisk is the global leader within the insulin segment, with
52% of the insulin market and 37% of the insulin analogue segment, both measured
by volume.
Sales of insulin analogues increased by 59% in Danish kroner to DKK 5,002
million and by 56% in local currencies in the first six months of 2006. All
regions realised solid growth rates, with North America and Europe as the
primary growth drivers. Sales of insulin analogues contributed with 65% of the
overall growth in local currencies and now constitute more than 40% of Novo
Nordisk's sales of insulin and insulin-related products. Novo Nordisk's leading
prefilled delivery device, FlexPen(R) continues to support the sales growth of
insulin analogues in all regions.
North America
Sales in North America increased by 41% in Danish kroner and by 33% in local
currencies in the first six months of 2006, reflecting solid performance of the
insulin analogues NovoLog(R) and NovoLog(R) Mix 70/30, combined with the launch
of Levemir(R), the long-acting insulin analogue. Novo Nordisk has consolidated
its leadership position in the US insulin market holding close to 40% of the
total market, and more than 25% of the analogue segment, both measured by
volume. Furthermore, sales of human insulin products increased as a consequence
of increased volume as well as higher average selling prices.
The launch of Levemir(R) in the US market is progressing well, and the product
has been very well received by healthcare professionals, people with diabetes
and managed care organisations, thereby improving the penetration of Novo
Nordisk's portfolio of insulin analogue products.
International Operations
Sales within International Operations increased by 37% in Danish kroner and by
31% in local currencies. The sales development during the first six months of
2006 reflects solid performance in all key markets with China contributing more
than 20% of the growth within the region.
The main growth driver in the first six months of 2006 was sales of human
insulin, primarily in China and India. Furthermore, sales of insulin analogues
more than doubled compared to the same period last year, with Russia and Turkey
as the key growth contributors.
Europe
Sales in Europe increased by 12% in Danish kroner and by 11% in local
currencies, reflecting solid progress in the conversion from human insulin to
insulin analogues, which was only partly offset by a negative impact from
healthcare reforms. Novo Nordisk continues to consolidate its leadership
position in the European insulin market with a 58% share of the total market and
46% of the insulin analogue segment, both measured by volume.
Japan & Oceania
Sales in Japan & Oceania increased by 1% measured in Danish kroner and by 5% in
local currencies. The sales development reflects sales growth of insulin
analogues, NovoRapid(R) and NovoRapid(R) Mix 30, both of which are increasingly
being sold in the leading prefilled delivery device, FlexPen(R). However, sales
in Japan have been negatively impacted by a mandatory reduction in reimbursement
prices, effective as of 1 April 2006.
ORAL ANTIDIABETIC PRODUCTS (NOVONORM(R)/PRANDIN(R))
Sales of oral antidiabetic products increased, compared to the same period in
2005, by 25% in Danish kroner to DKK 960 million and by 21% in local currencies,
reflecting increased sales in North America and International Operations,
compared to the same period last year. Sales in North America have been
positively impacted by higher volumes and average selling prices in the US
market, whereas the positive sales performance in International Operations is
primarily due to the beneficial impact from an improved level of reimbursement
in major regions in China, which came into effect late last year.
BIOPHARMACEUTICALS
Sales of biopharmaceutical products increased by 17% measured in Danish kroner
to DKK 5,301 million and by 14% in local currencies compared to the first six
months of 2005.
NOVOSEVEN(R)
Sales of NovoSeven(R) increased by 19% in Danish kroner to DKK 2,772 million and
by 15% in local currencies compared to the same period last year. Sales growth
for NovoSeven(R) was realised in all regions with International Operations and
Europe as the main growth drivers. Sales in North America increased during the
first six months of 2006, primarily driven by increased sales in the second
quarter. North America continues to constitute approximately half of total
NovoSeven(R) sales.
The sales growth of NovoSeven(R) during the first six months of 2006 reflected
increased sales within the congenital inhibitor and acquired haemophilia
segments as well as a perceived higher level of investigational use. Treatment
of spontaneous bleeds for congenital inhibitor patients remains the largest area
of use.
GROWTH HORMONE THERAPY (NORDITROPIN(R) SIMPLEXX(R))
Sales of Norditropin(R) SimpleXx(R) products (ie growth hormone in a liquid,
ready-to-use formulation) increased by 22% measured in Danish kroner to DKK
1,591 million and by 22% measured in local currencies. North America, Europe and
International Operations contributed to growth, primarily supported by the
continued success of the prefilled delivery device, NordiFlex(R). As a result of
solid growth rates in North America, quarterly sales of Norditropin(R)
SimpleXx(R) in this region are now for the first time above quarterly sales in
Japan & Oceania, making North America the largest region from a sales
perspective for Novo Nordisk within this therapy area.
OTHER PRODUCTS
Sales of other products within biopharmaceuticals, which predominantly consist
of hormone replacement therapy-related products, increased by 5% in Danish
kroner to DKK 938 million and by 2% in local currencies. North American sales of
the topical oestrogen product, Vagifem(R), continue to be the main growth
driver.
COSTS, LICENCE FEES AND OTHER OPERATING INCOME
The cost of goods sold increased by 9% to DKK 4,667 million, significantly lower
than the growth in sales of 20%, resulting in an improvement of the gross margin
of 2.6 percentage points to 75.0%, compared to 72.4% in the first six months of
2005. This significant improvement in gross margin reflects not only a better
than expected improvement in the production efficiency but also an improved
product mix, whereas the development in foreign exchange rates only had a
slightly positive impact.
Total non-production-related costs increased by 26% to DKK 9,632 million. The
cost increase mainly reflects the expansion of the US diabetes care sales force
implemented during the fourth quarter of 2005, costs related to the US launch of
Levemir(R) as well as the high number of late-stage clinical development
projects in the first six months of 2006.
Licence fees and other operating income in the first six months of 2006 were DKK
135 million, compared to DKK 269 million in the same period last year where a
non-recurring income of around DKK 100 million was realised from a
sale-and-leaseback transaction involving certain office buildings in Denmark.
NET FINANCIALS
Net financials showed a net expense of DKK 289 million in the first six months
of 2006 compared to an income of DKK 278 million in the same period in 2005.
Included in net financials is the result from associated companies with an
expense of DKK 118 million, primarily related to Novo Nordisk's share of losses
in ZymoGenetics Inc, compared to an income of DKK 195 million in the first six
months of 2005 when a non-recurring, tax-exempt income of approximately DKK 250
million from a sale of shares in Ferrosan A/S was realised.
The foreign exchange result was an expense of DKK 175 million compared to a gain
of DKK 135 million in the same period last year. This development primarily
reflects losses on foreign exchange hedging activities during the first three
months of 2006 due to the higher value of especially US dollars versus Danish
kroner compared to the exchange rate level prevailing in 2005.
OUTLOOK 2006
Due to the solid sales performance in the first six months of 2006, the
expectation for reported SALES growth for the full-year of 2006 is increased to
13-15%, compared to the previous expectation of sales growth of 11-13%, measured
in Danish kroner. The sales forecast also reflects expectations of increased
competition in the diabetes care area during the second half of 2006 due to
competitors' product launches as well as a negative currency impact for the
second half of 2006, given the currently prevailing exchange rate levels.
Reported OPERATING PROFIT is now expected to grow by around 13%, compared to the
expectation of slightly more than 10% growth communicated previously. The
expectation for underlying operating profit growth, ie excluding the impact from
currency movements and non-recurring items, is now around 15%, compared to the
previous expectation of around 10%. The increase in expectations for operating
profit growth is partly reflecting a sustained improvement in production economy
and partly the increased outlook for full-year sales growth.
For 2006, Novo Nordisk still expects a NET FINANCIAL EXPENSE of DKK 350 million.
The effective TAX RATE for 2006 is still expected to be approximately 30%.
CAPITAL EXPENDITURE is still expected to be around DKK 3 billion in 2006.
Expectations for DEPRECIATIONS, AMORTISATION AND IMPAIRMENT LOSSES are unchanged
at around DKK 2.1 billion, and FREE CASH FLOW is still expected to be around DKK
4.5 billion.
All of the above expectations are provided that currency exchange rates,
especially the US dollar and related currencies, remain at the current level
versus the Danish krone for the rest of 2006.
Novo Nordisk has hedged expected net cash flows in relation to US dollars,
Japanese yen and British pounds for 15, 11 and 11 months, respectively. The
financial impact from foreign exchange hedging is included in 'Net financials'.
RESEARCH AND DEVELOPMENT UPDATE
DIABETES CARE
At the annual meeting of the American Diabetes Association (ADA) held in
Washington DC in June this year, Novo Nordisk presented detailed results from a
14-week phase 2b study with liraglutide, a once-daily human GLP-1 analogue,
currently in phase 3 clinical development. The results showed a lowering of
Hba1c of 1.7% at the highest dose as well as a weight loss of 3 kg. There were
no hypoglycaemic events, and nausea was reported at a low level of around 10%.
In Japan, Novo Nordisk has recently completed a separate study with liraglutide
in a phase 2 dose-finding trial in patients with type 2 diabetes. The study
included around 200 patients previously treated with diet and exercise and/or a
single oral antidiabetic agent. Treatment with liraglutide reduced HbA1c levels
in this study by around 2 percentage points. Furthermore, more than 75% of
patients reached the ADA treatment goal of an HbA1c level below 7%. The lowering
of HbA1c was a function of improvements in both fasting and post-prandial
glucose control. There were no events of major or minor hypoglycaemia observed.
Phase 3 studies with liraglutide are expected to be initiated in Japan in the
first half of 2007 following consultation with the Japanese authorities.
Furthermore, at the ADA meeting, Novo Nordisk presented results from the German
arm of the Predictive(TM) study, a global observational study with Levemir(R) in
more than 30,000 patients with type 1 or type 2 diabetes. The results show that
treatment with Levemir(R) reduces hypoglycaemia, improves total glycaemic
control and reduces weight compared to other long-acting insulin products.
In July, the European Commission approved a label expansion for NovoRapid(R) to
be used during pregnancy. The label expansion is a result of Novo Nordisk's
continued focus on expanding labels for the portfolio of insulin analogues.
BIOPHARMACEUTICALS
Novo Nordisk has recently completed a phase 2a safety study for the use of
NovoSeven(R) in traumatic brain injury. A total of approximately 100 patients
were included in the study, and the preliminary analysis confirms the safety
profile of NovoSeven(R) and indicates its potential as a haemostatic agent in
patients with traumatic brain injury. Novo Nordisk expects to communicate in
more detail from this and a number of other trials at the company's Capital
Markets Day on 6 October 2006.
The phase 3 study for the use of NovoSeven(R) in intracerebral haemorrhage (ICH)
is now expected to be finalised during the first quarter of 2007. As outlined in
the study protocol, a mid-term sample size review has been performed to ensure
that the study is adequately powered to statistically assess the hypothesis
outlined in the protocol. The outcome of the review is that the total number of
patients to be included in the study should be increased from 675 to slightly
more than 800.
The phase 2 study for the use of NovoSeven(R) in cardiac surgery is now expected
to be finalised during the first half of 2007. Due to the challenging nature of
this study, primarily as a consequence of strict inclusion/exclusion criteria,
an increase in the number of trial sites has been warranted to reach an
acceptable recruitment rate. The study will now progress as a global trial,
including the US, following the FDA's recent approval of the study protocol.
EQUITY
Total equity was DKK 28,908 million at the end of the first half of 2006, equal
to 67.0% of total assets, compared to 65.9% at the end of 2005. Please refer to
appendix 5 for further elaboration of changes in equity during 2006.
HOLDING OF TREASURY SHARES AND SHARE REPURCHASE PROGRAMME
As per 1 August 2006, Novo Nordisk A/S and its wholly-owned affiliates owned
14,226,224 of its own B shares, corresponding to 4.22% of the total share
capital. The reduction in the ownership of treasury shares reflects the
cancellation of 17,734,160 B shares, which took place on 23 June 2006 following
a decision at the annual general meeting earlier this year.
During the period from 28 April to 1 August 2006, Novo Nordisk purchased 510,000
B shares at a cash value of DKK 0.2 billion as part of the DKK 6 billion share
repurchase programme for 2006 and 2007.
SUSTAINABILITY ISSUES UPDATE
CAMPAIGN FOR UNITED NATIONS (UN) RESOLUTION ON DIABETES
Novo Nordisk actively supports the International Diabetes Federation's worldwide
campaign, UNite for Diabetes. Its goal is to achieve a UN Resolution on diabetes
and make the annual World Diabetes Day, on 14 November, internationally observed
by the UN. Novo Nordisk's contribution primarily focuses on the needs of
children and young people - both those who already have diabetes and those at
particular risk of developing diabetes.
LEGAL ISSUES UPDATE
US HORMONE THERAPY LITIGATION
As of 1 August 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
43 individuals 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). Further, an additional
16 individuals 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 during 2007; however, Novo
Nordisk is not expecting the claims to impact its financial outlook.
LAWSUIT AGAINST PFIZER REGARDING INHALED INSULIN
On 1 August Novo Nordisk filed a lawsuit against Pfizer claiming that Pfizer's
product Exubera(R) infringes Novo Nordisk's patents covering inhaled insulin
treatment for diabetes. The lawsuit, filed in United States Federal Court in the
Southern District of New York, alleges that Pfizer wilfully and deliberately
infringed the patents.
CAPITAL MARKETS DAY
Novo Nordisk has invited analysts and institutional investors to a Capital
Markets Day on 6 October 2006 for an update on the company's overall strategy as
well as key operational and R&D value drivers. All investors will be able to
follow the Capital Markets Day via a live webcast, which will be made available
under the 'Investors' section of novonordisk.com.
CONFERENCE CALL DETAILS
At 13.00 CET today, corresponding to 7.00 am New York time, a conference call
will be held. Investors will be able to listen in via a link on novonordisk.com,
which can be found under 'Investors - Download centre'. Presentation material
for the conference call will be 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, proceedings and investigations, 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 6 February 2006. 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.
MANAGEMENT STATEMENT
Today, the Board of Directors and Executive Management reviewed and approved the
interim report and accounts of Novo Nordisk A/S for the first six months of
2006.
The interim report and accounts have been prepared in accordance with
International Financial Reporting Standards and the additional Danish disclosure
requirements applying to listed companies' interim reports and accounts.
In our opinion the accounting policies used are appropriate and the overall
presentation of the interim report and accounts is adequate. Furthermore, in our
opinion the interim report and accounts give a true and fair view of the Group's
assets, liabilities, financial position and of the results of the operations and
consolidated cash flows for the period under review.
Bagsvaerd 2 August 2006
EXECUTIVE MANAGEMENT:
Lars Rebien Sorensen Jesper Brandgaard
President and CEO CFO
Lise Kingo Kare Schultz Mads Krogsgaard Thomsen
BOARD OF DIRECTORS:
Sten Scheibye Goran A Ando
Chairman Vice chairman
Kurt Briner Henrik Gurtler Johnny Henriksen
Niels Jacobsen Anne Marie Kverneland Kurt Anker Nielsen
Soren Thuesen Pedersen Stig Strobaek Jorgen Wedel
Contacts for further information
MEDIA: INVESTORS:
Outside North America: Outside North America:
Mike Rulis Mogens Thorsager Jensen
Tel (direct): (+45) 4442 3573 Tel (direct): (+45) 4442 7945
E-mail: mike@novonordisk.com E-mail: mtj@novonordisk.com
Christian Qvist Frandsen
Tel (direct): (+45) 4443 5182
E-mail: cqfr@novonordisk.com
Hans Rommer
Tel (direct): (+45) 4442 4765
E-mail: hrmm@novonordisk.com
In North America: In North America:
Susan T Jackson Mads Veggerby Lausten
Tel (direct): (+1) 609 919 7776 Tel (direct): (+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
QUARTERLY NUMBERS IN DKK
% change
Q2 2005
2006 2005 -
Q2 Q1 Q4 Q3 Q2 Q1 Q2 2006
SALES 9,727 8,946 9,426 8,793 8,283 7,258 17%
Gross profit 7,475 6,531 6,902 6,435 6,073 5,173 23%
Gross margin 76.8% 73.0% 73.2% 73.2% 73.3% 71.3%
Sales and distribution costs 2,850 2,728 2,883 2,402 2,267 2,139 26%
Percent of sales 29.3% 30.5% 30.6% 27.3% 27.4% 29.5%
Research and development costs 1,498 1,419 1,551 1,231 1,197 1,106 25%
Percent of sales 15.4% 15.9% 16.5% 14.0% 14.5% 15.2%
Administrative expenses 557 580 624 545 470 483 19%
Percent of sales 5.7% 6.5% 6.6% 6.2% 5.7% 6.7%
Licence fees and other operating income (net) 59 76 79 55 202 67 -71%
OPERATING PROFIT 2,629 1,880 1,923 2,312 2,341 1,512 12%
Operating margin 27.0% 21.0% 20.4% 26.3% 28.3% 20.8%
Share of profit/(loss) in Associated companies (58) (60) (25) 149 (43) 238 35%
Financial income 102 111 88 58 238 114 -57%
Financial expenses 182 202 299 103 193 76 -6%
Profit before taxation 2,491 1,729 1,687 2,416 2,343 1,788 6%
NET PROFIT 1,743 1,211 1,196 1,752 1,684 1,232 4%
Depreciation, amortisation and impairment 508 460 537 559 422 412 20%
losses
Capital expenditure 622 595 1,120 1,087 735 723 -15%
Cash flow from operating activities 1,768 2,091 2,359 2,905 2,105 1,343 -16%
Free cash flow 996 1,466 1,147 1,740 1,332 614 -25%
Equity 28,908 27,042 27,634 26,589 25,620 25,729 13%
Total assets 43,145 41,299 41,960 40,181 37,731 36,497 14%
Equity ratio 67.0% 65.5% 65.9% 66.2% 67.9% 70.5%
Full-time employees at the end of the period 22,792 22,556 22,007 21,631 21,246 20,942 7%
Basic earnings per share (DKK) 5.40 3.74 3.70 5.38 5.11 3.71 6%
Diluted earnings per share (in DKK)* 5.37 3.72 3.68 5.36 5.09 3.70 6%
Average number of shares outstanding (million)* 322.9 323.6 323.4 325.8 329.6 332.0 -2%
Average number of shares outstanding incl 324.5 325.2 324.8 326.9 330.8 333.2 -2%
dilutive effect of options 'in the money' (million)*
Sales by business segments:
Insulin analogues 2,678 2,324 2,229 1,929 1,692 1,448 58%
Human insulin and insulin-related sales 3,707 3,703 4,036 3,871 3,753 3,346 -1%
Oral antidiabetic products (OAD) 483 477 454 487 391 376 24%
DIABETES CARE TOTAL 6,868 6,504 6,719 6,287 5,836 5,170 18%
NovoSeven(R) 1,507 1,265 1,390 1,336 1,248 1,090 21%
Growth hormone therapy 882 709 781 700 704 596 25%
Hormone replacement Therapy 396 373 421 406 410 328 -3%
Other products 74 95 115 64 85 74 -13%
BIOPHARMACEUTICALS TOTAL 2,859 2,442 2,707 2,506 2,447 2,088 17%
Sales by geographic segments:
Europe 3,761 3,403 3,602 3,434 3,405 3,006 10%
North America 2,968 2,764 2,696 2,462 2,282 2,092 30%
International Operations 1,790 1,755 1,797 1,750 1,395 1,128 28%
Japan & Oceania 1,208 1,024 1,331 1,147 1,201 1,032 1%
Segment operating profit:
Diabetes care 1,490 998 909 1,161 1,235 750 21%
Biopharmaceuticals 1,139 882 1,014 1,151 1,106 762 3%
*) For Q2 2006 the exact numbers of 'Average number of shares outstanding'
and 'Avereage number of shares outstanding incl dilutive effect of
options 'in the money" are 322,909,583 and 324,512,033 respectively.
Appendix 2
QUARTERLY NUMBERS IN EUR
%
change
Q2 2005
2006 2005 -
Q2 Q1 Q4 Q3 Q2 Q1 Q2 2006
SALES 1,304 1,199 1,264 1,179 1,113 975 17%
Gross profit 1,002 875 925 863 816 695 23%
Gross margin 76.8% 73.0% 73.2% 73.2% 73.3% 71.3%
Sales and distribution costs 382 366 387 322 305 287 26%
Percent of sales 29.3% 30.5% 30.6% 27.3% 27.4% 29.5%
Research and development costs 201 190 208 165 160 149 25%
Percent of sales 15.4% 15.9% 16.5% 14.0% 14.5% 15.2%
Administrative expenses 74 78 84 73 63 65 19%
Percent of sales 5.7% 6.5% 6.6% 6.2% 5.7% 6.7%
Licence fees and other operating income (net) 8 10 11 7 27 9 -71%
OPERATING PROFIT 352 252 257 310 315 203 12%
Operating margin 27.0% 21.0% 20.4% 26.3% 28.3% 20,8%
Share of profit in associated R&D companies (8) (8) (3) 20 (6) 32 35%
Financial income 14 15 12 8 32 15 -57%
Financial expenses 24 27 40 14 26 10 -6%
Profit before taxation 334 232 226 324 315 240 6%
NET PROFIT 234 162 160 235 226 166 4%
Depreciation, amortisation 68 62 72 75 57 55 20%
and impairment losses
Capital expenditure 83 80 150 146 99 97 -15%
Cash flow from operating activities 237 280 316 390 283 180 -16%
Free cash flow 134 196 154 234 179 82 -25%
Equity 3,875 3,624 3,704 3,563 3,438 3,454 13%
Total assets 5,784 5,534 5,624 5,384 5,064 4,899 14%
Equity ratio 67.0% 65.5% 65.9% 66.2% 67.9% 70.5%
Full-time employees at the end of the period 22,792 22,556 22,007 21,631 21,246 20,942 7%
Basic earnings per share (in EUR) 0.72 0.50 0.50 0.72 0.68 0.50 6%
Diluted earnings per share (in EUR)* 0.72 0.50 0.49 0.72 0.68 0.50 6%
Average number of shares 322.9 323.6 323.4 325.8 329.6 332.0 -2%
outstanding (million)*
Average number of shares 324.5 325.2 324.8 326.9 330.8 333.2 -2%
outstanding incl dilutive
effect of options 'in the
money' (million)*
Sales by business segments:
Insulin analogues 359 311 299 258 227 195 58%
Human insulin and insulin-related sales 497 496 541 520 504 450 -1%
Oral antidiabetic products (OAD) 65 64 61 65 52 51 24%
DIABETES CARE TOTAL 921 871 901 843 783 696 18%
NovoSeven(R) 202 170 187 179 168 146 21%
Growth hormone therapy 118 95 105 93 95 80 25%
Hormone replacement therapy 53 50 56 55 55 44 -3%
Other products 10 13 15 9 12 9 -13%
BIOPHARMACEUTICALS TOTAL 383 328 363 336 330 279 17%
Sales by geographic segments:
Europe 504 456 484 460 457 404 10%
North America 398 370 361 330 307 281 30%
International Operations 240 235 241 235 187 152 28%
Japan & Oceania 162 137 178 154 162 138 1%
Segment operating profit:
Diabetes care 200 134 121 156 166 101 21%
Biopharmaceuticals 153 118 136 154 149 102 3%
*) For Q2 2006 the exact numbers of 'Average number of shares outstanding'
and 'Avereage number of shares outstanding incl dilutive effect of
options 'in the money" are 322,909,583 and 324,512,033 respectively.
Appendix 3
INCOME STATEMENT
H1 H1 Q2 Q2
DKK million 2006 2005 2006 2005
Sales 18,673 15,541 9,727 8,283
Cost of goods sold 4,667 4,295 2,252 2,210
GROSS PROFIT 14,006 11,246 7,475 6,073
Sales and distribution costs 5,578 4,406 2,850 2,267
Research and development costs 2,917 2,303 1,498 1,197
Administrative expenses 1,137 953 557 470
Licence fees and other operating income (net) 135 269 59 202
OPERATING PROFIT 4,509 3,853 2,629 2,341
Share of profit/(loss) in associated companies (118) 195 (58) (43)
Financial income 213 352 102 238
Financial expenses 384 269 182 193
PROFIT BEFORE TAXATION 4,220 4,131 2,491 2,343
Income taxes 1,266 1,215 748 659
NET PROFIT 2,954 2,916 1,743 1,684
BASIC EARNINGS PER SHARE (DKK) 9.14 8.81 5.40 5.11
DILUTED EARNINGS PER SHARE (DKK) 9.09 8.78 5.37 5.09
SEGMENT SALES:
Diabetes care 13,372 11,006 6,868 5,836
Biopharmaceuticals 5,301 4,535 2,859 2,447
SEGMENT OPERATING PROFIT:
Diabetes care 2,488 1,985 1,490 1,235
Operating margin 18.6% 18.0% 21.7% 21.2%
Biopharmaceuticals 2,021 1,868 1,139 1,106
Operating margin 38.1% 41.2% 39.8% 45.2%
Appendix 4
BALANCE SHEET
DKK million 30 Jun 2006 31 Dec 2005
ASSETS
Intangible assets 558 485
Property, plant and equipment 20,077 19,941
Investments in associated companies 757 926
Deferred tax assets 1,270 879
Other financial assets 177 169
TOTAL LONG-TERM ASSETS 22,839 22,400
Inventories 8,092 7,782
Trade receivables 5,058 4,794
Tax receivables 769 504
Other receivables 1,551 1,455
Marketable securities and financial derivatives 1,559 1,722
Cash at bank and in hand 3,277 3,303
TOTAL CURRENT ASSETS 20,306 19,560
TOTAL ASSETS 43,145 41,960
EQUITY AND LIABILITIES
Share capital 674 709
Treasury shares (28) (61)
Retained earnings 27,558 26,962
Other comprehensive income 704 24
TOTAL EQUITY 28,908 27,634
Long-term debt 1,178 1,248
Deferred tax liabilities 2,190 1,846
Provision for pensions 330 316
Other provisions 317 335
TOTAL LONG-TERM LIABILITIES 4,015 3,745
Short-term debt and financial
derivatives 326 1,444
Trade payables 1,243 1,500
Tax payables 1,332 676
Other liabilities 4,921 4,577
Other provisions 2,400 2,384
TOTAL CURRENT LIABILITIES 10,222 10,581
TOTAL LIABILITIES 14,237 14,326
TOTAL EQUITY AND LIABILITIES 43,145 41,960
Appendix 5
STATEMENT OF CHANGES IN EQUITY
Other comprehensive income
Deferred
Exhange gain/loss
Share rate on cash Other
Share Treasury premium Retained adjust- flow adjust-
capital shares account earnings ments hedges ments Total
H1 2006
Balance at the beginning of the year 709 (61) - 26,962 142 (345) 227 27,634
Exchange rate adjustment of (6) (6)
investments in subsidiaries
Deferred (gain)/loss on cash 345 345
flow hedges at the beginning of
the year recognized in the
Income statement for the period
Deferred gain/(loss) on cash 367 367
flow hedges at the end of the
period
Other adjustments (26) (26)
Net income recognized directly - - - - (6) 712 (26) 680
in equity
Net profit for the period - - - 2,954 2,954
Total income for the period - - - 2,954 (6) 712 (26) 3,634
Share-based payment 51 51
Purchase of treasury shares (3) - (576) (579)
Sale of treasury shares 1 - 112 113
Reduction of the B share capital (35) 35 -
Dividends (1,945) (1,945)
BALANCE AT THE END OF THE PERIOD 674 (28) - 27,558 136 367 201 28,908
H1 2005
Balance at the beginning of the 709 (45) 2,565 22,671 (40) 461 183 26,504
year
Exchange rate adjustment of 98 98
investments in subsidiaries
Deferred (gain)/loss on cash (461) (461)
flow hedges at the beginning of
the year recognized in the
Income statement for the period
Deferred gain/(loss) on cash (386) (386)
flow hedges at the end of the
period
Other adjustments 96 13 109
Net income recognized directly - - - 96 98 (847) 13 (640)
in equity
Net profit for the period - - 2,916 2,916
Total income for the period - - - 3,012 98 (847) 13 2,276
Cost of share-based payment 40 40
Purchase of treasury shares (11) (1,636) (1,647)
Sale of treasury shares - 41 41
Transfer of share premium (2,565) 2,565 -
account to retained earnings *)
Dividends (1,594) (1,594)
BALANCE AT THE END OF THE PERIOD 709 (56) - 25,099 58 (386) 196 25,620
*) In accordance with changes in the Danish Companies Act the share premium
account is transferred to retained earnings.
Appendix 6
CONDENSED CASH FLOW STATEMENT
DKK million H12006 H12005
NET PROFIT 2,954 2,916
Adjustment for non-cash items 2,651 2,145
Income taxes paid and net interest received (877) (926)
CASH FLOW BEFORE CHANGE IN WORKING CAPITAL 4,728 4,135
Net change in working capital (869) (687)
CASH FLOW FROM OPERATING ACTIVITIES 3,859 3,448
Net investments in intangible assets and long-term financial assets (180) (44)
Capital expenditure for property, plant and equipment (1,217) (1,458)
Net change in marketable securities (>3 months) 511 -
NET CASH USED IN INVESTING ACTIVITIES (886) (1,502)
CASH FLOW FROM FINANCING ACTIVITIES (2,463) (3,219)
NET CASH FLOW 510 (1,273)
Unrealised gain/(loss) on exchange rates in cash and cash equivalents (25) 161
NET CHANGE IN CASH AND CASH EQUIVALENTS 485 (1,112)
Cash and cash equivalents at the beginning of the year 2,483 2,963
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 2,968 1,851
Bonds with original term to maturity exceeding three months 999 507
Undrawn committed credit facilities 7,459 6,706
FINANCIAL RESOURCES AT THE END OF THE PERIOD 11,426 9,064
Cash flow from operating activities 3,859 3,448
+ Net cash used in investing activities (886) (1,502)
- Net change in marketable securities (maturity exceeding three months) 511 -
FREE CASH FLOW 2,462 1,946
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: August 7 2006 NOVO NORDISK A/S
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Lars Rebien Sorensen,
President and Chief Executive Officer