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
MAY 04 2007
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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-_____________________
1ST QUARTER RESULTS
FINANCIAL STATEMENT FOR THE PERIOD 1 JANUARY 2007 TO 31 MARCH 2007
NOVO NORDISK INCREASED FIRST QUARTER OPERATING PROFIT BY 24% DRIVEN BY
DOUBLE-DIGIT SALES GROWTH AND GROSS MARGIN IMPROVEMENTS
o Despite a significant negative currency development, Novo Nordisk
reported 10% sales growth (16% in local currencies)
o Sales of modern insulins increased by 32% (39% in local
currencies).
o Sales of NovoSeven(R) increased by 12%(18% in local
currencies).
o Sales of Norditropin(R) increased by 11% (16% in local
currencies).
o Sales in North America increased by 16% (27% in local
currencies).
o Operating profit increased by 24% to DKK 2,327 million. Adjusted for
the impact from currencies underlying operating profit increased by
more than 35%.
o Net profit increased by 41% to DKK 1,709 million. Earnings per share
(diluted) increased by 44% to DKK 5.35.
o As a result of the significant depreciation of key invoicing
currencies versus Danish kroner, reported operating profit is now
expected to grow by 6-8%. Measured in local currencies the
expectation for growth in operating profit is increased to more than
15%, reflecting a sustainable improvement in gross margin.
o The Danish Government has recently proposed a change in the
corporation tax regime. If adopted in its current form, Novo
Nordisk's future income tax rate is expected, on a recurring basis,
to be reduced by close to 2 percentage points.
Lars Rebien Sorensen, president and CEO, said: "We are pleased with the solid
sales growth that we have seen in the first quarter of 2007 despite the
depreciation of key invoicing currencies. The US modern insulin market is a
significant growth driver and we expect the US growth to continue supported by
the expanded US sales force which will be in the field by the end of the second
quarter."
FINANCIAL STATEMENT FOR THE FIRST THREE MONTHS OF 2007
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 2006. The interim report has
not been audited. Amounts in DKK million, except average number of shares
outstanding, earnings per share and full-time employees.
Q1 Q1 % CHANGE Q1 2006 TO
INCOME STATEMENT 2007 2006 Q1 2007
SALES 9,818 8,946 10%
GROSS PROFIT 7,498 6,531 15%
Gross margin 76.4% 73.0%
Sales and distribution costs 3,048 2,728 12%
Percent of sales 31.0% 30.5%
Research and development costs 1,647 1,419 16%
Percent of sales 16.8% 15.9%
Administrative expenses 614 580 6%
Percent of sales 6.3% 6.5%
Licence fees and other operating income 138 76 82%
OPERATING PROFIT 2,327 1,880 24%
Operating margin 23.7% 21.0%
Net financials 47 (151) -
PROFIT BEFORE TAX 2,374 1,729 37%
NET PROFIT 1,709 1,211 41%
Net profit margin 17.4% 13.5%
OTHER KEY NUMBERS
Depreciation, amortisation and impairment 509 460 11%
losses
Capital expenditure 444 595 (25%)
Cash flow from operating activities 2,551 2,091 22%
Free cash flow 2,100 1,466 43%
Total assets 44,742 41,299 8%
Equity 29,676 27,042 10%
Equity ratio 66.3% 65.5%
Average number of shares outstanding
(million) - diluted 319.7 325.2 (2%)
DILUTED EARNINGS PER SHARE (IN DKK) 5.35 3.72 44%
Full-time employees at the end of the period 24,045 22,556 7%
SALES DEVELOPMENT BY SEGMENTS
Sales increased by 16% in local currencies and by 10% measured in Danish kroner.
Growth was realised both within diabetes care and biopharmaceuticals - primarily
driven by modern insulins (insulin analogues), NovoSeven(R) and Norditropin(R).
GROWTH GROWTH SHARE OF
SALES
3M 2007 AS REPORTED IN LOCAL GROWTH
DKK MILLION CURRENCIES IN LOCAL CURRENCIES
THE DIABETES CARE SEGMENT
Modern insulins 3,065 32% 39% 65%
Human insulin and insulin-related sales 3,555 (4%) 1% 2%
Oral antidiabetic products 523 10% 16% 5%
DIABETES CARE - TOTAL 7,143 10% 16% 72%
THE BIOPHARMACEUTICALS SEGMENT
NovoSeven(R) 1,411 12% 18% 17%
Growth hormone therapy 784 11% 16% 8%
Other products 480 3% 10% 3%
BIOPHARMACEUTICALS - TOTAL 2,675 10% 16% 28%
TOTAL SALES 9,818 10% 16% 100%
SALES DEVELOPMENT BY REGIONS
In the first quarter of 2007, sales growth measured in local currencies was
realised in all regions. The main contributors to growth were North America and
Europe providing 53% and 27%, respectively, of the total sales growth during the
first quarter of 2007. International Operations contributed 16% and Japan &
Oceania 4% of the sales growth in the first quarter of 2007.
Sales in North America in the first quarter of 2007 were positively impacted by
the implementation of the Medicare Part D scheme, a public scheme which offers
improved medical treatment for elderly patients. As previously communicated, the
greater part of the full-year 2006 positive impact was booked in the fourth
quarter of 2006 as data became available, whereas in 2007 the positive benefit
is expected to have a more even quarterly distribution.
DIABETES CARE
Sales of diabetes care products increased by 16% in local currencies and by 10%
in Danish kroner to DKK 7,143 million compared to the first three months of
2006.
MODERN INSULINS, HUMAN INSULIN AND INSULIN-RELATED PRODUCTS
Sales of modern insulins, human insulin and insulin-related products increased
by 16% measured in local currencies and by 10% to DKK 6,620 million in Danish
kroner. All regions contributed to growth measured in local currencies, with
North America and Europe having the highest growth rates. Novo Nordisk is the
global leader within the insulin segment, with 52% of the total insulin market
and 40% of the modern insulin market, both measured by volume.
Sales of modern insulins increased by 39% in local currencies in the first three
months of 2007 and by 32% in Danish kroner to DKK 3,065 million. All regions
realised solid growth rates, with North America and Europe as the primary
contributors to growth. Sales of modern insulins contributed 65% of the overall
growth in local currencies and now constitute around 46% of Novo Nordisk's sales
of insulin and insulin-related products.
North America
Sales in North America increased by 27% in local currencies in the first three
months of 2007 and by 17% in Danish kroner, reflecting a solid penetration of
the modern insulins NovoLog(R) and NovoLog(R) Mix 70/30 as well as the launch of
Levemir(R) at the end of the first quarter of 2006. Novo Nordisk continues to
consolidate its leadership position in the US insulin market with more than 41%
of the total insulin market and 28% of the modern insulin market, both measured
by volume. The expansion of the US sales force from 1,200 to 1,900 people is on
track for completion by the end of June in order to further support the
continued market penetration of Levemir(R). Furthermore, sales of human insulin
products also increased as a consequence of increased volume as well as higher
average selling prices.
Europe
Sales in Europe increased by 10% in local currencies and 10% measured in Danish
kroner, reflecting continued progress for the portfolio of modern insulins. Novo
Nordisk holds 57% of the total insulin market and 48% of the modern insulin
market, both measured by volume. The solid growth in modern insulin sales in
Europe will be further supported by the significantly improved label for
Levemir(R) which was approved during the first quarter of 2007.
International Operations
Sales within International Operations increased by 17% in local currencies and
by 8% in Danish kroner. The main growth driver in the first three months of 2007
was sales of modern insulins, primarily in Turkey, Russia and China.
Furthermore, human insulin continues to add to overall growth in the region
driven by China. Sales growth in the first quarter of 2007 was negatively
impacted by the loss of a federal tender in Brazil.
Japan & Oceania
Sales in Japan & Oceania increased by 6% in local currencies and decreased by 4%
measured in Danish kroner. The sales development reflects sales growth of modern
insulins, NovoRapid(R) and NovoRapid(R) Mix 30, both of which are increasingly
being sold in the leading prefilled delivery device, FlexPen(R).
ORAL ANTIDIABETIC PRODUCTS (NOVONORM(R)/PRANDIN(R))
Sales of oral antidiabetic products increased by 16% in local currencies and by
10% in Danish kroner to DKK 523 million compared to the same period in 2006.
This reflects increased sales in North America, Europe and International
Operations compared to the same period last year, primarily related to a higher
average sales price in the US market as well as an improved reimbursement
situation in China.
BIOPHARMACEUTICALS
Sales of biopharmaceutical products increased by 16% in local currencies and by
10% measured in Danish kroner to DKK 2,675 million compared to the first three
months of 2006.
NOVOSEVEN(R)
Sales of NovoSeven(R) increased by 18% in local currencies and by 12% in Danish
kroner to DKK 1,411 million compared to the same period last year. Sales growth
for NovoSeven(R) was primarily realised in North America and Europe.
NovoSeven(R) sales in North America in the first three months of 2007 were
robust, whereas the sales development in North America in the same period in
2006 was subdued.
The sales growth of NovoSeven(R) during the first three months of 2007 reflected
increased sales within the congenital 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))
Sales of Norditropin(R) (ie growth hormone in a liquid, ready-to-use
formulation) increased by 16% measured in local currencies and by 11% measured
in Danish kroner to DKK 784 million. All regions contributed to growth measured
in local currencies supported by the continued success of the prefilled delivery
device NordiFlex(R).
OTHER PRODUCTS
Sales of other products within biopharmaceuticals, which predominantly consist
of hormone replacement therapy (HRT) related products, increased by 10% in local
currencies and by 3% in Danish kroner to DKK 480 million. This development
primarily reflects continued sales progress in the US market for Vagifem(R),
Novo Nordisk's topical oestrogen product. In April Novo Nordisk launched a
low-dose version of Activella(R), a continuous-combined hormone therapy, in the
US market.
COSTS, LICENCE FEES AND OTHER OPERATING INCOME
The cost of goods sold decreased by 4% to DKK 2,320 million, representing a
gross margin of 76.4% compared to 73.0% in the first three months of 2006 when
the gross margin was lower than the average for the full year of 2006. This
improvement reflects improved production efficiency, an improved product mix and
higher average prices in the US, but also a negative currency impact of around
0.4% primarily due to the lower value of US dollars versus Danish kroner
compared to the same period last year.
Total non-production-related costs increased by 12% to DKK 5,309 million. The
increase reflects costs related to sales and distribution as well as research
and development. Sales and distribution costs increased more than sales,
primarily reflecting the increase in the US diabetes care sales force currently
being implemented, expansions of sales forces in other markets such as Germany,
France, the United Kingdom and China, as well as a provision relating to an
antidumping court case in Brazil. Research and development costs also increased
more than sales, reflecting the high number of late-stage clinical development
projects currently being conducted.
Licence fees and other operating income in the first three months of 2007 were
DKK 138 million, positively impacted by a non-recurring income related to the
out-licensing of an oral antidiabetic compound.
NET FINANCIALS
Net financials showed a net income of DKK 47 million in the first three months
of 2007 compared to a net expense of DKK 151 million in the same period in 2006.
Included in net financials is the result from associated companies with an
expense of DKK 60 million, primarily related to Novo Nordisk's share of losses
in ZymoGenetics Inc, compared to an expense of DKK 60 million in the same period
in 2006.
The foreign exchange result was an income of DKK 197 million compared to a loss
of DKK 140 million in the same period last year. This development reflects gains
on foreign exchange hedging activities due to the lower value of especially US
dollars versus Danish kroner in the first three months of 2007 compared to the
exchange rate level prevailing in 2006.
OUTLOOK 2007
Novo Nordisk still expects more than 10% growth in SALES measured in local
currencies for 2007. This is based on expectations of continued market
penetration of Novo Nordisk's key strategic products within diabetes care and
biopharmaceuticals, as well as expectations of increased competition in the
diabetes care area during 2007 due to competitors' product launches. The growth
in the US market is expected to show a more even quarterly distribution in 2007
compared to 2006 when the greater part of the positive impact from the
implementation of the Medicare Part D scheme was booked in the fourth quarter.
Given the current level of exchange rates versus Danish kroner, the reported
sales growth rate for 2007 is expected to be negatively impacted by around 4
percentage points. As a consequence, reported sales growth is now expected to be
less than 10%.
For 2007, OPERATING PROFIT as reported is now expected to grow by 6-8%, due to
the significant depreciation of key invoicing currencies versus Danish kroner
compared to the exchange rate levels prevailing at the time of the full-year
2006 results released on 31 January 2007. Measured in local currencies the
expectation for growth in operating profit is increased to more than 15%,
reflecting a sustainable improvement in gross margin. The expectation for
operating profit growth still includes an expected higher level of spending on
the portfolio of research and development projects as well as a continued high
level of spending on sales and marketing.
For 2007, Novo Nordisk now expects a NET FINANCIAL INCOME of around DKK 1,800
million, including a positive impact from Novo Nordisk's divestment of the
ownership of Dako's business activities, which was announced on 28 February
2007. The tax-exempt income of around DKK 1,500 million from the divestment is
expected to be booked in the second half of 2007. The divestment is subject to a
number of conditions including the approval of the transaction by applicable
competition authorities, which is still pending, and the approval of the
transaction at a shareholders' meeting of Dako A/S, which has been obtained.
Given the prevailing Danish corporation tax regime, the effective tax rate for
2007 is now expected to be around 25% due to a positive non-recurring effect of
around 3 percentage points from Novo Nordisk's divestment of the ownership of
Dako's business activities. Furthermore, if the proposed change in the Danish
corporation tax regime is adopted in its current wording, a positive recurring
effect of close to 2 percentage points and a positive non-recurring effect from
the re-evaluation of the company's deferred tax liabilities of around 1
percentage point are expected.
CAPITAL EXPENDITURE is still expected to be around DKK 3 billion in 2007.
Expectations for DEPRECIATIONS, AMORTISATION AND IMPAIRMENT LOSSES are still
around DKK 2.3 billion, and FREE CASH FLOW is now expected to be close to DKK 7
billion, reflecting a positive impact from the divestment of the ownership of
Dako's business activities.
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 2007.
Novo Nordisk has hedged expected net cash flows in relation to US dollars,
Japanese yen and British pounds for 17, 14 and 11 months, respectively. The
financial impact from foreign exchange hedging is included in 'Net financials'.
RESEARCH AND DEVELOPMENT UPDATE
DIABETES CARE
Novo Nordisk has received marketing authorisation from the European Commission
for the use of Levemir(R) once daily in combination treatment with oral
antidiabetics (OADs) for people with type 2 diabetes. The updated label contains
weight comparison data with relevant competitors to Levemir(R) emphasising the
superior weight profile of Levemir(R).
In addition, and as previously communicated, Novo Nordisk has published results
from the observational PREDICTIVE(TM) study in the International Journal of
Clinical Practice confirming that Levemir(R) for the majority of people
effectively controls blood glucose levels and also limits weight gain compared
to other basal insulins.
In Japan, Novo Nordisk has completed recruitment in two phase 3 studies for the
use of liraglutide, the once-daily human GLP-1 analogue, in type 2 diabetes. The
two studies include in total around 600 patients with type 2 diabetes and
results are expected to be available during the first half of 2008.
Recruitment in the 20-week phase 2 dose-ranging study on the potential use of
liraglutide as an antiobesity agent for treatment of obese, non-diabetic people
has been finalised. The results are still expected to be available during the
first half of 2008.
BIOPHARMACEUTICALS
As communicated on 26 February 2007, Novo Nordisk has decided not to pursue
regulatory approval for the use of NovoSeven(R) in ICH. The global phase 3 trial
showed that treatment with NovoSeven(R) significantly reduced intracerebral
bleeding compared to placebo treatment. Even though improvement in clinical
outcomes in terms of functional independence and neurological impairment was
observed on day 15 after the bleeding, mortality and severe disability was not
improved at the end of the study period at day 90. As mortality and severe
disability at day 90 was the primary endpoint of the study, Novo Nordisk has
decided not to seek regulatory approval for NovoSeven(R) in ICH. With regard to
safety, study results were in line with the established safety profile of
NovoSeven(R).
In Europe, Novo Nordisk has received marketing authorisation from the European
Commission for the use of NovoSeven(R) as a single high dose of 270 mcg per kg
bodyweight in the treatment of mild and moderate bleeding events in inhibitor
patients. The single dose will help the patients avoid the disruption that
multiple intravenous infusions cause to their lives. It is also beneficial in
terms of protecting the patient from the effects of repeated venous puncture.
The phase 2 study for the use of NovoSeven(R) in cardiac surgery is now expected
to be finalised during the first quarter of 2008. As previously communicated, an
increase in the number of trial sites has been warranted to reach an acceptable
recruitment rate; however, the opening of these additional sites has been more
time-consuming than anticipated.
Finally, as part of the IL-21 programme within oncology, Novo Nordisk has
initiated a phase 1 dose-escalation study with IL-21 in combination with
cetuximab for the treatment of colorectal cancer. In addition, Novo Nordisk is
in the process of initiating a phase 1/2 study with IL-21 in combination with
sunitinib for the use in renal cell carcinoma with up to 80 patients.
EQUITY
Total equity was DKK 29,676 million at the end of the first three months of
2007, equal to 66.3% of total assets, compared to 67.4% at the end of 2006.
Please refer to appendix 5 for further elaboration of changes in equity during
2007.
REDUCTION OF SHARE CAPITAL
The Annual General Meeting, which was held on 7 March, approved a 4% reduction
in the total share capital by cancellation of nominally DKK 26.96 million
(13,480,000 shares of DKK 2) of the current treasury B shares.
TREASURY SHARES AND SHARE REPURCHASE PROGRAMME
As per 1 May 2007, Novo Nordisk A/S and its wholly-owned affiliates owned
19,163,309 of its own B shares, corresponding to 5.69% of the total share
capital. During the period from 1 February to 1 May 2007, Novo Nordisk did not
repurchase any shares. In 2006, Novo Nordisk repurchased shares equal to a cash
value of DKK 3 billion out of the total DKK 10 billion share repurchase
programme for 2006-2008. In 2007, Novo Nordisk now expects to repurchase B
shares equal to a cash value of DKK 5 billion following the divestment of the
ownership of Dako's business activities.
SUSTAINABILITY ISSUES UPDATE
NOVO NORDISK HOSTS GLOBAL CHANGING DIABETES LEADERSHIP FORUM
With the aim of changing diabetes Novo Nordisk hosted a Global Changing Diabetes
Leadership Forum on 12-14 March 2007 in New York. The Forum was supported by the
International Diabetes Federation (IDF) and is the most recent initiative taken
by Novo Nordisk to call for a worldwide change in diabetes care. Former US
President Bill Clinton was the keynote speaker. The Forum included dialogues on
how to redefine healthcare and focus on the needs of people with diabetes, and
involved 185 leaders in diabetes, healthcare, politics and media from more than
20 countries.
NOVO NORDISK ENTERS INTO PARTNERSHIP ON GREENER ENERGY SUPPLIES IN DENMARK
On 1 May Novo Nordisk signed an agreement with DONG Energy to enter into a
partnership on 'Less Energy and Greener Energy'. This agreement will be a
significant contribution to the company's target to reduce CO2 emissions by
2014. Under the partnership, Novo Nordisk commits to converting all future
energy savings in Denmark towards purchasing of green electricity for Danish
production sites from DONG Energy, to be supplied from wind turbines. In return,
DONG Energy will help identify energy savings options at Novo Nordisk's Danish
production sites, which represent 90% of the company's total CO2 emissions. With
the agreement, the aim is for all of the company's Danish production sites to
operate on renewable energy by 2014. The partnership is expected to serve as an
engine for a higher degree of conversion to renewable energy supplies among
Danish industries.
LEGAL ISSUES UPDATE
US HORMONE THERAPY LITIGATION
As of 1 May 2007, Novo Nordisk Inc., as well 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
44 individuals who allege use of 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
27 individuals currently allege, in relation to similar lawsuits against Pfizer
Inc., that they also have used a Novo Nordisk hormone therapy product. Novo
Nordisk does not have any court trials scheduled for 2007 and does not presently
expect to have a trial scheduled before 2008. Novo Nordisk does not expect the
pending claims to impact Novo Nordisk's financial outlook.
ANTIDUMPING CASE IN BRAZIL
In March 2007, Novo Nordisk was informed that the Superior Court in Brazil
reversed a decision from a lower court in an antidumping case against Novo
Nordisk initiated by the Brazilian authorities. According to the decision Novo
Nordisk will have to pay antidumping duties and interest related to the period
2001-2005. Novo Nordisk disputes the antidumping claim and expects to appeal the
decision to the Supreme Court in Brazil. A provision for the antidumping duties
and related interest has been included in the financial result for the first
quarter of 2007.
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 contains forward-looking statements as the term is defined in the US
Private Securities Litigation Reform Act of 1995. This in particular relates to
information included under the headings 'Outlook 2007', 'Research and
development update' and 'Legal issues update' with reference to plans,
forecasts, expectations, strategies, projections and assessment of risks. Words
such as 'believe', 'expect', 'may', 'will', 'plan', 'strategy', 'prospect',
'foresee', 'estimate', 'project', 'anticipate', 'can', 'intend' and similar
words identify forward-looking statements.
Examples of such forward-looking statements include, but are not limited to: (i)
statements of plans, objectives or goals for future operations including those
related to Novo Nordisk's products, product research, product introductions and
product approvals as well as co-operations in relation thereto, (ii) statements
containing projections of revenues, income (or loss), earnings per share,
capital expenditures, dividends, capital structure or other net financials,
(iii) statements of future economic performance and (iv) statements of the
assumptions underlying or relating to such statements.
These statements are based on current plans, estimates and projections, and
therefore undue reliance should not be placed on them. Moreover, such statements
are not guarantees of future results. By their very nature, forward-looking
statements involve inherent risks and uncertainties, both general and specific,
and risks exist that the predictions, forecasts, projections and other
forward-looking statements will not be achieved. Novo Nordisk cautions that a
number of important factors could cause actual results to differ materially from
the plans, objectives, expectations, estimates and intentions expressed in such
forward-looking statements.
Factors that may affect future results include, but are not limited to, interest
rate and currency exchange rate fluctuations, delay or failure of development
projects, interruptions of supplies and production, product recall, pressure on
insulin prices, 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 current and new products, exposure to product liability and
other legal proceedings and investigations, changes in reimbursement rules and
governmental laws and related interpretation thereof, perceived or actual
failure to adhere to ethical marketing practices, developments in international
activities, which also involve certain political risks, investments in and
divestitures of domestic and foreign companies 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 for 2006 filed with the US SEC in February 2007, and to the section
'Risk management' of the Annual Report 2006 available on our website
(novonordisk.com).
Forward-looking statements speak only as of the date they were made, and unless
required by law Novo Nordisk is under no duty and undertakes no obligation to
update or revise any of them, after the distribution of this Stock Exchange
Announcement, whether as a result of new information, future events or
otherwise.
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 three months of
2007.
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 May 2007
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 Mads Veggerby Lausten
Tel (direct): (+45) 4442 3573 Tel (direct): (+45) 4443 7919
E-mail: mike@novonordisk.com E-mail: mlau@novonordisk.com
Hans Rommer
Tel (direct): (+45) 4442 4765
E-mail: hrmm@novonordisk.com
In North America: In North America:
Lori Moore Christian Qvist Frandsen
Tel (direct): (+1) 609 919 7991 Tel (direct): (+1) 609 919 7937
E-mail: lrmo@novonordisk.com E-mail: cqfr@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
(Amounts in DKK million, except number of employees, earnings per share and
number of shares outstanding.)
% change
2007 2006 Q1 2006 -
Q1 Q4 Q3 Q2 Q1 Q1 2007
SALES 9,818 10,487 9,583 9,727 8,946 10%
Gross profit 7,498 7,906 7,246 7,475 6,531 15%
Gross margin 76.4% 75.4% 75.6% 76.8% 73.0%
Sales and
distribution costs 3,048 3,331 2,699 2,850 2,728 12%
Percent of sales 31.0% 31.8% 28.2% 29.3% 30.5%
Research and
development
costs 1,647 1,910 1,489 1,498 1,419 16%
Percent of sales 16.8% 18.2% 15.5% 15.4% 15.9%
Administrative
expenses 614 645 605 557 580 6%
Percent of sales 6.3% 6.2% 6.3% 5.7% 6.5%
Licence fees and
other operating
income (net) 138 88 49 59 76 82%
OPERATING PROFIT 2,327 2,108 2,502 2,629 1,880 24%
Operating margin 23.7% 20.1% 26.1% 27.0% 21.0%
Share of
profit/(loss) in associated
companies (60) (112) (30) (58) (60) 0%
Financial income 309 579 139 102 111 178%
Financial expenses 202 165 77 182 202 0%
Profit before
income taxes 2,374 2,410 2,534 2,491 1,729 37%
NET PROFIT 1,709 1,724 1,774 1,743 1,211 41%
Depreciation,
amortisation and
impairment losses 509 574 600 508 460 11%
Capital expenditure 444 899 671 622 595 -25%
Cash flow from
operating activities 2,551 359 3,520 1,768 2,091 22%
Free cash flow 2,100 (439) 2,684 996 1,466 43%
Equity 29,676 30,122 28,288 28,908 27,042 10%
Total assets 44,742 44,692 43,744 43,145 41,299 8%
Equity ratio 66.3% 67.4% 64.7% 67.0% 65.5%
Full-time employees
at the end of the
period 24,045 23,172 23,071 22,792 22,556 7%
Basic earnings
per share (in DKK) 5.38 5.44 5.54 5.40 3.74 44%
Diluted earnings
per share (in DKK) 5.35 5.40 5.51 5.37 3.72 44%
Average number
of shares
outstanding (million)* 317.5 317.1 320.1 322.9 323.6 -2%
Average number
of shares
outstanding incl
dilutive effect of
options 'in the
money' (million)* 319.7 319.2 321.8 324.5 325.2 -2%
Sales by business
segments:
Modern insulins
(insulin analogues) 3,065 3,122 2,701 2,678 2,324 32%
Human insulin
and insulin-related
sales 3,555 3,950 3,697 3,707 3,703 -4%
Oral antidiabetic
products (OAD) 523 508 516 483 477 10%
DIABETES CARE
TOTAL 7,143 7,580 6,914 6,868 6,504 10%
NovoSeven(R) 1,411 1,470 1,393 1,507 1,265 12%
Growth hormone
therapy 784 897 821 882 709 11%
Hormone
replacement
therapy 406 455 383 396 373 9%
Other products 74 85 72 74 95 -22%
BIOPHARMACEUTICALS
TOTAL 2,675 2,907 2,669 2,859 2,442 10%
Sales by geographic
segments:
Europe ** 3,931 4,013 3,843 3,903 3,541 11%
North America 3,214 3,486 3,062 2,968 2,764 16%
International
Operations ** 1,696 1,690 1,539 1,648 1,617 5%
Japan & Oceania 977 1,298 1,139 1,208 1,024 -5%
Segment operating
profit:
Diabetes care 1,247 1,198 1,296 1,490 998 25%
Biopharmaceuticals 1,080 910 1,206 1,139 882 22%
*) For Q1 2007 the exact numbers of 'Average number of shares outstanding' and
'Average number of shares outstanding incl dilutive effect of options 'in the
money" are 317,520,216 and 319,668,756 respectively.
**) Comparative figures from 2006 have been adjusted in order to reflect a
changed organisational structure from 1 January 2007 which transfers 8
countries, incl.
Bulgaria and Romania, from International Operations to Europe.
APPENDIX 2 - 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
2007 2006 Q1 2006 -
Q1 Q4 Q3 Q2 Q1 Q1 2007
SALES 1,317 1,406 1,285 1,304 1,199 10%
Gross profit 1,006 1,060 972 1,002 875 15%
Gross margin 76.4% 75.4% 75.6% 76.8% 73.0%
Sales and distribution costs 409 447 361 382 366 12%
Percent of sales 31.0% 31.8% 28.2% 29.3% 30.5%
Research and development costs 221 256 200 201 190 16%
Percent of sales 16.8% 18.2% 15.5% 15.4% 15.9%
Administrative expenses 82 86 82 74 78 6%
Percent of sales 6.3% 6.2% 6.3% 5.7% 6.5%
Licence fees and other operating income
(net) 19 11 7 8 10 82%
OPERATING PROFIT 312 283 336 352 252 24%
Operating margin 23.7% 20.1% 26.1% 27.0% 21.0%
Share of profit/(loss) in associated
companies (8) (15) (4) (8) (8) 0%
Financial income 41 78 18 14 15 178%
Financial expenses 27 22 11 24 27 0%
Profit before income taxes 319 324 339 334 232 37%
NET PROFIT 229 231 238 234 162 41%
Depreciation, amortisation and impairment
losses 68 77 80 68 62 11%
Capital expenditure 60 121 90 83 80 -25%
Cash flow from operating activities 342 48 472 237 280 22%
Free cash flow 282 (59) 360 134 196 43%
Equity 3,983 4,040 3,793 3,875 3,624 10%
Total assets 6,005 5,994 5,866 5,784 5,534 8%
Equity ratio 66.3% 67.4% 64.7% 67.0% 65.5%
Full-time employees at the end of the period 24,045 23,172 23,071 22,792 22,556 7%
Basic earnings per share (in EUR) 0.72 0.72 0.75 0.72 0.50 44%
Diluted earnings per share (in EUR) 0.72 0.72 0.74 0.72 0.50 44%
Average number of shares outstanding
(million)* 317.5 317.1 320.1 322.9 323.6 -2%
Average number of shares outstanding incl
dilutive effect of options 'in the
money' (million)* 319.7 319.2 321.8 324.5 325.2 -2%
Sales by business segments:
Modern insulins (insulin analogues) 411 418 363 359 311 32%
Human insulin and insulin-related sales 477 530 496 497 496 -4%
Oral antidiabetic products (OAD) 70 68 69 65 64 10%
DIABETES CARE TOTAL 958 1,016 928 921 871 10%
NovoSeven(R) 189 197 186 202 170 12%
Growth hormone therapy 105 121 110 118 95 11%
Hormone replacement therapy 54 61 51 53 50 9%
Other products 10 12 9 10 13 -22%
BIOPHARMACEUTICALS TOTAL 358 391 356 383 328 10%
Sales by geographic segments:
Europe ** 527 538 515 523 475 11%
North America 431 467 411 398 370 16%
International Operations ** 228 227 206 221 217 5%
Japan & Oceania 131 174 153 162 137 -5%
Segment operating profit:
Diabetes care 167 161 173 200 134 25%
Biopharmaceuticals 145 122 162 153 118 22%
*) For Q1 2007 the exact numbers of 'Average number of shares outstanding' and
'Average number of shares outstanding incl dilutive effect of options 'in the
money" are 317,520,216 and 319,668,756 respectively.
**) Comparative figures from 2006 have been adjusted in order to reflect a
changed organisational structure from 1 January 2007 which transfers 8
countries, incl. Bulgaria and Romania, from International Operations to Europe.
APPENDIX 3 - INCOME STATEMENT
Q1 Q1
DKK million 2007 2006
Sales 9,818 8,946
Cost of goods sold 2,320 2,415
GROSS PROFIT 7,498 6,531
Sales and distribution costs 3,048 2,728
Research and development costs 1,647 1,419
Administrative expenses 614 580
Licence fees and other operating income (net) 138 76
OPERATING PROFIT 2,327 1,880
Share of profit/(loss) in associated companies (60) (60)
Financial income 309 111
Financial expenses 202 202
PROFIT BEFORE INCOME TAXES 2,374 1,729
Income taxes 665 518
NET PROFIT 1,709 1,211
BASIC EARNINGS PER SHARE (DKK) 5.38 3.74
DILUTED EARNINGS PER SHARE (DKK) 5.35 3.72
SEGMENT SALES:
Diabetes care 7,143 6,504
Biopharmaceuticals 2,675 2,442
SEGMENT OPERATING PROFIT:
Diabetes care 1,247 998
Operating margin 17.5% 15.3%
Biopharmaceuticals 1,080 882
Operating margin 40.4% 36.1%
APPENDIX 4 - BALANCE SHEET
DKK million 31 MAR 2007 31 DEC 2006
ASSETS
Intangible assets 635 639
Property, plant and equipment 20,329 20,350
Investments in associated companies 734 788
Deferred income tax assets 1,960 1,911
Other financial assets 160 169
TOTAL LONG-TERM ASSETS 23,818 23,857
Inventories 8,618 8,400
Trade receivables 5,414 5,163
Tax receivables 321 385
Other receivables 1,743 1,784
Marketable securities and financial derivatives 1,679 1,833
Cash at bank and in hand 3,149 3,270
TOTAL CURRENT ASSETS 20,924 20,835
TOTAL ASSETS 44,742 44,692
EQUITY AND LIABILITIES
Share capital 674 674
Treasury shares (38) (39)
Retained earnings 28,440 28,810
Other comprehensive income 600 677
TOTAL EQUITY 29,676 30,122
Long-term debt 1,172 1,174
Deferred income tax liabilities 1,992 1,998
Provision for pensions 371 330
Other provisions 880 911
TOTAL LONG-TERM LIABILITIES 4,415 4,413
Short-term debt and financial derivatives 196 338
Trade payables 1,505 1,712
Tax payables 690 788
Other liabilities 5,561 4,863
Other provisions 2,699 2,456
TOTAL CURRENT LIABILITIES 10,651 10,157
TOTAL LIABILITIES 15,066 14,570
TOTAL EQUITY AND LIABILITIES 44,742 44,692
APPENDIX 5 - STATEMENT OF CHANGES IN EQUITY
Other comprehensive income
Deferred
gain/loss on
Share Treasury Retained Exchange rate cash flow Other
DKK million capital shares earnings adjustments hedges adjustments TOTAL
Q1 2007
Balance at the
beginning of
the year 674 (39) 28,810 156 420 101 30,122
Exchange rate
adjustment of
investments
in
subsidiaries 47 47
Deferred
(gain)/loss
on cash flow
hedges at
the
beginning of
the
year
recognised
in the Income
statement for
the period (420) (420)
Deferred
gain/(loss) on
cash flow
hedges
at the end of
the period 306 306
Other
adjustments (10) (10)
Net income
recognised
directly
in equity - - - 47 (114) (10) (77)
Net profit for
the period 1,709 1,709
Total income
for the period - - 1,709 47 (114) (10) 1,632
Share-based
payment 25 25
Purchase of
treasury
shares -
Sale of
treasury
shares 1 117 118
Dividends (2,221) (2,221)
BALANCE AT
THE
END OF THE
PERIOD 674 (38) 28,440 203 306 91 29,676
Q1 2006
Balance at the
beginning of
the year 709 (61) 26,962 142 (345) 227 27,634
Exchange rate
adjustment of
investments
in
subsidiaries 118 118
Deferred
(gain)/loss on
cash flow
hedges
at the
beginning
of the year
recognised in
the Income
statement for
the period 345 345
Deferred
gain/(loss) on
cash flow
hedges
at the end of
the period (29) (29)
Other
adjustments (16) (16)
Net income
recognised
directly
in equity - - - 118 316 (16) 418
Net profit for
the period 1,211 1,211
Total income
for
the period - - 1,211 118 316 (16) 1,629
Share-based
payment 25 25
Purchase of
treasury
shares (2) (355) (357)
Sale of
treasury
shares 1 55 56
Dividends (1,945) (1,945)
BALANCE AT
THE
END OF THE
PERIOD 709 (62) 25,953 260 (29) 211 27,042
APPENDIX 6 - CONDENSED CASH FLOW STATEMENT
DKK million Q1 2007 Q1 2006
NET PROFIT 1,709 1,211
Adjustment for non-cash items 1,706 1,388
Income taxes paid and net interest received (804) (579)
CASH FLOW BEFORE CHANGE IN WORKING CAPITAL 2,611 2,020
Net change in working capital (60) 71
CASH FLOW FROM OPERATING ACTIVITIES 2,551 2,091
Net investments in intangible assets and long-term financial assets (7) (30)
Capital expenditure for property, plant and equipment (444) (595)
Net change in marketable securities (maturity exceeding three months) 4 510
NET CASH USED IN INVESTING ACTIVITIES (447) (115)
CASH FLOW FROM FINANCING ACTIVITIES (2,111) (2,286)
NET CASH FLOW (7) (310)
Unrealised gain/(loss) on exchange rates and marketable securities
included in cash and cash equivalents (5) (4)
NET CHANGE IN CASH AND CASH EQUIVALENTS (12) (314)
Cash and cash equivalents at the beginning of the year 2,985 2,483
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 2,973 2,169
Bonds with original term to maturity exceeding three months 997 999
Undrawn committed credit facilities 7,451 7,462
FINANCIAL RESOURCES AT THE END OF THE PERIOD 11,421 10,630
Cash flow from operating activities 2,551 2,091
+ Net cash used in investing activities (447) (115)
- Net change in marketable securities (maturity exceeding three months) 4 510
FREE CASH FLOW 2,100 1,466
Stock Exchange Announcement no 9 / 2007
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: May 04 2007 NOVO NORDISK A/S
---------------------------------------------------
Lars Rebien Sorensen,
President and Chief Executive Officer