SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

30 April 2004

NOVO NORDISK A/S
(Exact name of Registrant as specified in its charter)

Novo Allé
DK- 2880, Bagsvaerd
Denmark
(Address of principal executive offices)

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-__________________

 

   

 

 

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: 30 April 2004
NOVO NORDISK A/S
Lars Rebien Sørensen, President and Chief Executive Officer

 

   

 

 

Stock Exchange Announcement
Financial statement for first quarter 2004

30 April 2004

Novo Nordisk increased operating profit by 9%
in the first quarter of 2004

Reported operating profit for 2004 is now expected to grow by around 5%
• Sales increased by 14% measured in local currencies in the first quarter of 2004. Measured in Danish kroner sales increased by 8%.
• Sales of diabetes care products increased by 12% measured in local currencies, and sales of insulin analogues alone increased by 94%.
• NovoSeven® sales increased by 20% measured in local currencies.
• Operating profit increased by 9% to DKK 1,516 million, whereas net profit of DKK 1,074 million was in line with net profit in the first quarter of 2003. Earnings per share (diluted) increased by 2% to DKK 3.16.
• Lars Rebien Sørensen, president & CEO, said, “The performance during the first quarter confirms our positive expectations for 2004. The sales growth continues to be driven by insulin analogues and NovoSeven®.”
• A new share repurchase programme of DKK 5 billion has been approved by the Board of Directors of which shares worth approximately DKK 2 billion are expected to be repurchased in 2004.
• Reported operating profit for 2004 is now expected to grow by around 5% compared to 2003, reflecting a more favourable, though still challenging, currency environment than was the case in February 2004, when an unchanged level of operating profit was expected. Measured in local currencies Novo Nordisk reaffirms previous expectations of 15% underlying growth in operating profit.

Stock Exchange Announcement No 27 / 2004

 

Page 1 of 18

 

 

 

 

 

Novo Nordisk A/S

Novo Allé

Telephone:
+45 4444 8888
Telefax:
+45 4443 6633

Internet:

CVR number:

 

2880 Bagsvaerd

www.novonordisk.com

24256790

Investor Relations

 

 

 

 

   

 

 

Contents

Page
Sales growth analysis 2
Financial statement first quarter 2004 3
Performance 4
Sales development by segments 4
  The diabetes care segment 4
  The biopharmaceuticals segment 6
Costs, licence fees and other operating income 7
Net financials and tax 7
Outlook 2004 8
Research and development update 8
Equity 10
Sustainable development 10
Conference call details 10
Forward-looking statement 10
Financial calendar and contact details 11
   
Appendices:  
Appendix 1: Consolidated income statement 12
Appendix 2: Quarterly numbers in DKK 13
Appendix 3: Quarterly numbers in EUR 14
Appendix 4: Consolidated balance sheet 15
Appendix 5: Consolidated statement of changes in equity 16
Appendix 6: Consolidated statements of cash flow and financial resources 17
Appendix 7: Reconciliations of Danish GAAP to IFRS 18

Sales growth analysis

    Sales
Q1 2004
DKK mn 		Growth
as
reported 		Growth
in local
currencies 		Share of
growth
in local
currencies
Diabetes care        
Insulin analogues 893 83% 94% 53%
Human insulin and insulin-related sales 3,232 (5%) (1%) (6%)
Oral antidiabetic products 419 15% 26% 11%
Diabetes care — total 4,544 7% 12% 58%
         
Biopharmaceuticals        
NovoSeven® 1,027 11% 20% 21%
Growth hormone therapy 554 10% 15% 8%
Other products 442 22% 30% 13%
Biopharmaceuticals — total 2,023 13% 21% 42%
         
Total sales 6,567 8% 14% 100%

Stock Exchange Announcement No 27 / 2004

 

Page 2 of 18

 

 

 

 

 

Novo Nordisk A/S

Novo Allé

Telephone:
+45 4444 8888
Telefax:
+45 4443 6633

Internet:

CVR number:

 

2880 Bagsvaerd

www.novonordisk.com

24256790

Investor Relations

 

 

 

 

   

 

 

Financial statement first quarter 2004

As of 1 January 2004, the accounting policies have been changed to comply with International Financial Reporting Standards (IFRS). The accounting policies used in this unaudited interim financial report are consistent with those used in the Annual Financial Report 2003 except for the changes described in the section ‘Adoption of IFRS in 2004’ in the Annual Financial Report 2003, which describes the changes from the historically applied Danish GAAP to IFRS. Free cash flow is defined as cash flow from operating activities plus cash flow from investing activities less net change in marketable securities (>3 months). (Amounts below in DKK million except average number of shares outstanding, earnings per share and full-time employees)

Income statement Q1 2004 Q1 2003   % change
Q1 2003
to Q1 2004
       
Sales 6,567 6,056 8
       
Gross profit 4,716 4,390 7
Gross margin 71.8% 72.5%  
       
Sales and distribution costs 1,926 1,772 9
Percent of sales 29.3% 29.3%  
       
Research and development costs 1,035 937 10
Percent of sales 15.8% 15.5%  
       
Administration costs 471 455 4
Percent of sales 7.2% 7.5%  
       
Licence fees and other operating income 232 171 36
       
Operating profit 1,516 1,397 9
Operating margin 23.1% 23.1%  
       
Share of profit in associated companies (69) (54) 28
Other net financial income 156 288 (46)
Profit before tax 1,603 1,631 (2)
       
Net profit 1,074 1,073 0
Net profit margin 16.4% 17.7%  
       
       
Other key numbers      
       
Earnings per share (in DKK) — diluted 3.16 3.11 2
       
Average number of shares outstanding (million) — diluted 339.8 344.6 (1)
       
Depreciation, amortisation and impairment losses 380 309 23
Capital expenditure 392 466 (16)
       
Cash flow from operating activities 1,350 2,174 (38)
Free cash flow 886 1,707 (48)
       
Equity 24,048 21,829 10
Equity ratio 71.1% 69.6%  
Total assets 33,838 31,382 8
       
Full-time employees at the end of the period 19,179 18,221 5

Stock Exchange Announcement No 27 / 2004

 

Page 3 of 18

 

 

 

 

 

Novo Nordisk A/S

Novo Allé

Telephone:
+45 4444 8888
Telefax:
+45 4443 6633

Internet:

CVR number:

 

2880 Bagsvaerd

www.novonordisk.com

24256790

Investor Relations

 

 

 

 

   

 

 

Performance

This quarterly release marks the first quarter in which Novo Nordisk reports according to International Financial Reporting Standards (IFRS). The consequences for the full year of 2004 compared to 2003 were already discussed in connection with the full-year results for 2003. To facilitate the performance evaluation in the first quarter of 2004 all relevant quarterly numbers and ratios for 2003 using IFRS have been made available in the appendices to this announcement.

EPS (diluted) grew by 2% to DKK 3.16. This growth is based on:
• Sales growth in local currencies of 14% and of 8% measured in Danish kroner
• Growth in total operating costs of 9%
• An increase in licence fees and other operating income of 36%
• Net financial income of DKK 87 million compared to DKK 234 million in 2003
• A reduction in the tax rate from 34% to 33%
• A reduction in the average number of shares outstanding (diluted) of 1% to 339.8 million

Sales development by segments

Sales increased by 14% measured in local currencies. Growth was realised both within the diabetes care and the biopharmaceuticals segments - primarily driven by strategically important products like NovoRapid®, NovoMix® 30, NovoSeven® and Norditropin® SimpleXx®.

Sales growth by segment Sales by region

Regionally the sales growth was driven by all regions; especially North America, now constituting 27% of total sales, experienced strong growth.

The diabetes care segment

Sales of diabetes care products grew by 12% measured in local currencies compared to the first quarter of 2003 and by 7% measured in Danish kroner to DKK 4,544 million.

Stock Exchange Announcement No 27 / 2004

 

Page 4 of 18

 

 

 

 

 

Novo Nordisk A/S

Novo Allé

Telephone:
+45 4444 8888
Telefax:
+45 4443 6633

Internet:

CVR number:

 

2880 Bagsvaerd

www.novonordisk.com

24256790

Investor Relations

 

 

 

 

   

 

 

Sales of insulin analogues, human insulin and insulin-related products

Sales of insulin analogues, human insulin and insulin-related products increased by 11% measured in local currencies and by 6% to DKK 4,125 million measured in Danish kroner. All regions contributed to growth both measured in local currencies and in Danish kroner.

Sales of insulin analogues increased by 94% measured in local currencies and by 83% in Danish kroner to DKK 893 million in the first quarter of 2004. Novo Nordisk’s insulin analogue market share continues to increase - now constituting almost 25% of the world market. Solid growth rates were realised in all regions with North America as the primary growth driver followed by Europe. Growth in sales of insulin analogues continues to outperform the rest of the insulin products, and sales of insulin analogues now constitute more than 20% of Novo Nordisk’s total sales of all insulin products.

At the beginning of March, Novo Nordisk’s long-acting insulin analogue, Levemir®, was launched in the first country, Switzerland, with positive initial feedback from the market.

North America
Sales in North America increased by 28% in local currencies in the first quarter of 2004 and by 11% measured in Danish kroner. The market share of insulin in North America continued to increase in the first quarter of 2004 primarily driven by both NovoLog® and NovoLog® Mix and reflecting market share gains in the retail segment. Sales of insulin analogues constituted almost half of Novo Nordisk’s total insulin sales in North America in the first quarter of 2004 compared to about one third in the first quarter of 2003.

The expansion of the US diabetes care sales force with an additional 150 sales representatives progressed during the first quarter of 2004. As of early May the new sales representatives will have completed training and commence detailing physicians. The expansion of the sales force increases Novo Nordisk’s reach and frequency and is expected to underpin the continued strong performance of the US insulin franchise.

Europe
Sales in Europe increased by 4% measured in both local currencies and in Danish kroner, reflecting limited currency impact on sales.

Growth in Europe is driven by sales of the insulin analogues NovoRapid® and NovoMix® 30, within the short-acting and premixed segments, which in total constitute some 70% of the European insulin market. The insulin analogue performance has been supported by Novo Nordisk’s portfolio of new devices - including FlexPen® which continues to gain presence in the insulin market.

In the first quarter of 2004 growth in insulin sales continued to be dampened by price-focused healthcare reforms in a number of countries. Further, as noted in connection with the full-year 2003 results, a minor increase in product inventory by wholesalers and patients was observed in a few countries towards the end of 2003 due to changes in the co-payment systems. This has impacted the sales growth negatively in the first quarter of 2004, though this effect has been partly offset by a change in Novo Nordisk’s European distribution system leading to a minor increase in wholesaler inventory levels at the end of the first quarter of 2004.

Japan & Oceania
Sales in Japan & Oceania increased by 11% in local currencies in the first quarter of 2004 and by 9% measured in Danish kroner, reflecting a minor depreciation of the Japanese yen versus Danish kroner.

Stock Exchange Announcement No 27 / 2004

 

Page 5 of 18

 

 

 

 

 

Novo Nordisk A/S

Novo Allé

Telephone:
+45 4444 8888
Telefax:
+45 4443 6633

Internet:

CVR number:

 

2880 Bagsvaerd

www.novonordisk.com

24256790

Investor Relations

 

 

 

 

   

 

 

In Japan, NovoRapid® continued to capture market share and with the recent launch of NovoMix® 30, Novo Nordisk is the sole provider in Japan of both a rapid-acting and premixed analogue.

The market conversion towards disposable devices continues in Japan predominantly driven by the high acceptance of the innovative insulin delivery systems FlexPen® and InnoLet® provided by Novo Nordisk.

International Operations

Sales within International Operations increased by 9% in local currencies in the first quarter of 2004 and by 3% measured in Danish kroner, reflecting a depreciation of especially the Chinese CNY.

Novo Nordisk continues the roll-out of insulin analogues in markets within International Operations. Also Novo Nordisk’s insulin delivery systems continued to penetrate the markets within International Operations, as more than half of the insulin sales were sold in devices compared to around 40% in the first quarter of 2003.

Sales of oral antidiabetic products

Sales of oral antidiabetic products increased by 26% measured in local currencies. The weakening of especially the US dollar resulted in an increase in sales measured in Danish kroner of 15% to DKK 419 million. This represents growth in all regions; however, sales growth in the US was positively impacted by inventory build-up by some wholesalers during the first quarter, which has impacted sales growth positively.

The biopharmaceuticals segment

Sales within the biopharmaceuticals segment increased by 21% in local currencies compared to the first quarter of 2003 and by 13% measured in Danish kroner to DKK 2,023 million.

NovoSeven®

Sales of NovoSeven® increased by 20% in local currencies compared to the same period last year. Measured in Danish kroner sales increased by 11% to DKK 1,027 million. Sales growth for NovoSeven® was primarily driven by Europe and to a lesser extent North America.

A number of factors contributed to the NovoSeven® sales growth in the quarter. Due to the high penetration within spontaneous bleeds for congenital inhibitor patients the predominant part of the growth within the inhibitor segment has been generated by acquired haemophilia and usage of NovoSeven® in connection with elective surgery. Treatment of spontaneous bleeds for congenital inhibitor patients remains the largest area of use. Moreover, sales are perceived to have been positively affected by increased investigational use of NovoSeven®.

Finally, in Europe sales growth in the first quarter of 2004 has to some extent been affected by haemophilia patients experiencing severe bleeding episodes and hence demanding a higher than usual usage of NovoSeven®.

Sales of growth hormone therapy (Norditropin® and Norditropin® SimpleXx®)

In local currencies sales of human growth hormone products increased by 15% compared to the first quarter of 2003. Measured in Danish kroner sales increased by 10% to DKK 554 million; more than 95% of sales is now realised through sales of Norditropin® SimpleXx®, liquid growth hormone in the NordiPen® device.

Stock Exchange Announcement No 27 / 2004

 

Page 6 of 18

 

 

 

 

 

Novo Nordisk A/S

Novo Allé

Telephone:
+45 4444 8888
Telefax:
+45 4443 6633

Internet:

CVR number:

 

2880 Bagsvaerd

www.novonordisk.com

24256790

Investor Relations

 

 

 

 

   

 

 

Sales outside Japan increased by 22% in local currencies or 18% in Danish kroner, driven by the increasing market usage of Norditropin® SimpleXx®, in Europe, North America and International Operations. Close to 70% of total growth hormone sales are realised outside Japan.

In Japan, sales measured in local currency were at the level of sales in the first quarter of 2003, whereas sales measured in Danish kroner decreased by 5%, negatively impacted by the depreciation of the Japanese yen versus the Danish krone.

Sales of other products

Sales of other products within the biopharmaceuticals segment, which predominantly consists of hormone replacement therapy (HRT) related products, grew by 30% in local currencies and by 22% in Danish kroner to DKK 442 million.

Sales growth in the first quarter of 2004 was especially positively impacted by the change in July 2003 of the US distribution set-up for Novo Nordisk’s HRT products and by the continued market penetration of the low-dose HRT products Activella® and Vagifem®. In the regions outside North America, sales decreased by 22% measured in Danish kroner, broadly in line with the contraction in the overall HRT market.

Costs, licence fees and other operating income

The cost of goods sold increased by 11% to DKK 1,851 million, leaving the gross margin at 71.8%, a decrease from 72.5% in the first quarter of 2003. This development is due to the negative impact from the lower average exchange rates for a number of the major invoicing currencies compared to the first quarter of 2003. Exclusive of currency impact gross margin continued to show a positive development reflecting continued productivity improvements and a more favourable product mix.

Total non-production-related costs increased by 8% to DKK 3,432 million - in line with the sales growth. The increase in non-production-related costs reflects especially costs related to sales and distribution as well as research and development. Growth in sales and distribution costs for the first quarter is partly related to the increased sales force in the US, both within the diabetes care and HRT businesses.

In total, licence fees and other operating income amounted to DKK 232 million in the first quarter of 2004 compared to DKK 171 million in the same period in 2003. Total licence fees and other operating income for the first quarter of 2004 include income related to the settlement between Pfizer and Novo Nordisk related to Pfizer’s early termination of the out-licence agreement for certain HRT products in the US.

Net financials and tax

Net financials showed a net income of DKK 87 million in the first quarter of 2004 compared to DKK 234 million in the same period in 2003. Included in net financials are foreign exchange hedging gains, primarily related to the hedging of the US dollar, of DKK 138 compared to DKK 299 million in the first quarter of 2003.

The effective tax rate for 2004 was 33%, down from 34% in 2003, leading to a total tax expense of DKK 529 million in the first quarter of 2004.

Stock Exchange Announcement No 27 / 2004

 

Page 7 of 18

 

 

 

 

 

Novo Nordisk A/S

Novo Allé

Telephone:
+45 4444 8888
Telefax:
+45 4443 6633

Internet:

CVR number:

 

2880 Bagsvaerd

www.novonordisk.com

24256790

Investor Relations

 

 

 

 

   

 

 

Outlook 2004

Novo Nordisk still expects double-digit growth in sales for 2004 measured in local currencies based on the continued market penetration of the Novo Nordisk insulin analogue portfolio, combined with the expectations of increasing NovoSeven® and Norditropin® SimpleXx® sales. This level of sales growth leaves expectations for 2004 operating profit growth measured in local currencies and excluding the impact from non-recurring items in line with Novo Nordisk’s long-term target of growing operating profit by 15% p.a.

However, reflecting a more positive, though still challenging, currency environment than was the case at the time of the outlook provided in connection with the 2003 annual results announcement in February 2004, Novo Nordisk now expects sales measured in DKK to grow by close to 10% and reported operating profit to grow by around 5% in 2004. In February of 2004 operating profit for 2004 was expected to be at the same level as reported in 2003.

For 2004 Novo Nordisk now expects a net financial expense of approximately DKK 100 million. This is partly reflecting the appreciation of especially the US dollar, but also the Japanese yen, since February 2004, which reduces the expected positive impact from hedging of these currencies and partly reflecting a higher expected negative impact from Novo Nordisk’s share of profit and loss from associated companies.

For 2004 Novo Nordisk still expects the tax rate to be 33%, 1 percentage point lower than the tax rate realised in 2003.

Novo Nordisk continues to plan for capital expenditure of around DKK 3 billion in 2004. Depreciations, amortisation and impairment losses are still expected to be around DKK 1.8 billion.

The free cash flow is still expected to be around DKK 3 billion.

All of the above expectations are provided that currency exchange rates remain at the current level for the rest of 2004. All other things being equal the full-year effect of movements in key invoicing currencies will impact Novo Nordisk’s operating profit in 2004 as illustrated below.

 
 
  Invoicing
currency 		Impact on Novo Nordisk’s operating profit in 2004
of a 5% movement in currency 		 
 
 
  USD DKK 210 million  
 
 
  JPY DKK 130 million  
 
 
  GBP DKK 75 million  
 
 
  USD-related DKK 50 million  
 
 

Note: USD-related currencies consist of CNY, CAD, ARS, BRL, MXN, CLP, SGD, TWD, INR

Novo Nordisk has hedged expected net cash flows in relation to US dollars, Japanese yen and British pounds. The current currency hedging periods for these main currencies are 14, 12 and 8 months, respectively. The financial impact from currency hedging is included in ‘Net financials’.

Research and development update

The diabetes care segment

On 27 February 2004 the European Union’s Committee for Proprietary Medicinal Products (CPMP), recommended granting marketing authorisation for Levemir® (insulin detemir), a long-acting insulin analogue for the treatment of diabetes. Following the positive opinion from

Stock Exchange Announcement No 27 / 2004

 

Page 8 of 18

 

 

 

 

 

Novo Nordisk A/S

Novo Allé

Telephone:
+45 4444 8888
Telefax:
+45 4443 6633

Internet:

CVR number:

 

2880 Bagsvaerd

www.novonordisk.com

24256790

Investor Relations

 

 

 

 

   

 

 

CPMP, Novo Nordisk anticipates that the European Commission will issue marketing authorisation for Levemir® in the European Union within the coming months. Subsequent to the marketing authorisation Novo Nordisk still expects to launch Levemir® in key European markets in the second half of 2004.

Novo Nordisk has performed a planned 12-month interim analysis of the 24-month safety study of AERx® iDMS inhaled insulin in type 1 diabetes patients. The primary end-point of this phase 3 safety study is an assessment of the long-term pulmonary safety profile. The interim analysis showed a favourable pulmonary safety profile of AERx® iDMS with the inhaled insulin showing no adverse effect on all measures of pulmonary safety including pulmonary function tests and chest X-ray. In a basal-bolus regimen AERx® iDMS produced a similar level of overall glucose control compared to injected rapid-acting insulin analogue (NovoRapid®) over the 12-month period as measured by HbA1c. However, the meal-related plasma glucose regulation with AERx® iDMS in this type 1 population was not satisfactory compared to NovoRapid® delivered by injection. As a consequence, Novo Nordisk has decided to change the study protocol and shorten the duration of the study.

Previous short-term studies with type 2 diabetes patients have demonstrated a favourable meal-related blood glucose regulation. Novo Nordisk and its partner Aradigm Corporation will over the next few months conduct further analyses of all the clinical data within both type 1 and 2 diabetes before additional clinical studies are initiated.

In early April Novo Nordisk initiated the construction of a new facility in Kalundborg, Denmark aimed at producing liraglutide (once daily human GLP-1 analogue), a potential new Novo Nordisk product for treating people with diabetes. Novo Nordisk still expects to initiate the phase 3 programme for liraglutide in the second half of 2004.

The biopharmaceuticals segment
Results from studies during the fourth quarter of 2003 and in the first quarter of 2004 confirmed Novo Nordisk’s objective of establishing NovoSeven® as the preferred haemostatic agent for clinically significant bleedings. The objective is pursued via the NovoSeven® expansion programme from which Novo Nordisk now expects to be able to report from the phase 2 study focused at the use of NovoSeven® in connection with intracerebral haemorrhage (ICH) by mid-2004.

Further to support the objective Novo Nordisk has in the first quarter of 2004 initiated a phase 2 study focused on the use of NovoSeven® in connection with variceal bleeding in patients with advanced cirrhosis. The study is planned to be a 260-patient multi-centre, randomised, double-blind placebo-controlled trial running in Europe and Asia and is set up on the back of the findings from the completed phase 2 study focused at upper gastrointestinal bleedings in cirrhotic patients. The company has decided to discontinue the current stem cell transplantation study due to slower than anticipated patient enrolment. Novo Nordisk is currently considering alternative study designs within chemotherapy-induced bleedings.

Following the successful completion of a phase 2 study focusing on the use of NovoSeven® in connection with trauma, Novo Nordisk is aiming at starting a follow-up pivotal phase 3 study towards the end of the year. A study focusing on the use of NovoSeven® in connection with spinal surgery will also start later this year.

The development project Active Site Inhibited Seven (ASIS) for treatment of Acute Respiratory Distress Syndrome (ARDS) has been discontinued due to an unfavourable risk/benefit profile observed in an exploratory phase 2a trial. Other areas of the use of ASIS are being evaluated.

Stock Exchange Announcement No 27 / 2004

 

Page 9 of 18

 

 

 

 

 

Novo Nordisk A/S

Novo Allé

Telephone:
+45 4444 8888
Telefax:
+45 4443 6633

Internet:

CVR number:

 

2880 Bagsvaerd

www.novonordisk.com

24256790

Investor Relations

 

 

 

 

   

 

 

The phase 2 study on the use of human growth hormone in complicated fractures has been completed. The study showed a significant acceleration of fracture healing and Novo Nordisk is currently evaluating further development within this area.

Equity

Total equity were DKK 24,048 million at the end of the first quarter of 2004, equalling 71.1% of total assets, compared to 72.0% at the end of 2003. Please refer to appendix 5 for further elaboration hereof.

To provide Novo Nordisk with additional financial flexibility Moody’s and Standard & Poor’s have been requested to perform a credit rating of Novo Nordisk. The rating from Moody’s is “A2 with stable outlook” whereas the rating from S&P is “A minus with positive outlook”. Novo Nordisk has no immediate plans to make use of the credit ratings through issuance of capital market products.

Holding of own shares

At the end of the first quarter of 2004, Novo Nordisk A/S and its wholly-owned affiliates owned 16,450,865 of its own B shares corresponding to 4.64% of the total share capital.

Share repurchase programme

In order to align the capital structure with the expected positive development in free cash flow, a new share repurchase programme of DKK 5 billion has been approved by the Board of Directors of which shares worth around DKK 2 billion are expected to be repurchased in 2004. The repurchased shares will be kept as treasury shares. In accordance with Novo Nordisk’s accounting policies, the value of the repurchased shares will 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.

Sustainable development

To support the implementation of non-discrimination and diversity management the ‘Novo Nordisk Guidelines on Equal Opportunities’ have been developed. A Code of Conduct targeted at employees has been developed to affirm Novo Nordisk’s commitment to ensuring a working environment free of discrimination and harassment.

Novo Nordisk has received the European Sustainability Report Award 2003 for its 2002 Sustainability Report. The award is given by the national associations of state-chartered accountants in 15 countries and has existed since 1996. This is the sixth time that it was given to Novo Nordisk.

Conference call details

At 14:00 CET today, corresponding to 8:00 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 - 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.

Stock Exchange Announcement No 27 / 2004

 

Page 10 of 18

 

 

 

 

 

Novo Nordisk A/S

Novo Allé

Telephone:
+45 4444 8888
Telefax:
+45 4443 6633

Internet:

CVR number:

 

2880 Bagsvaerd

www.novonordisk.com

24256790

Investor Relations

 

 

 

 

   

 

 

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 27 February 2004. Please also refer to the section ‘Management of risk in Novo Nordisk’ in the Annual Financial Report 2003. 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.

Bagsværd, 30 April 2004
The Board of Directors

Financial calendar

11 August 2004 — Financial statement for the first half of 2004
27 October 2004 — Financial statement for the first nine month of 2004
28 January 2005 — Financial statement for 2004

Contacts for further information

Media: Investors:
   
Outside North America: Outside North America:
Mike Rulis Peter Haahr
Tel (direct): (+45) 4442 3573 Tel (direct): (+45) 4442 1207
e-mail: mike@novonordisk.com e-mail: pehr@novonordisk.com
   
  Palle Holm Olesen
  Tel (direct): (+45) 4442 6175
  e-mail: phoo@novonordisk.com
   
In North America: In North America:
Susan T Jackson Christian Kanstrup
Tel (direct): (+1) 609 919 7776e-mail: stja@novonordisk.com Tel (direct): (+1) 609 919 7937e-mail: cka@novonordisk.com

Further information on Novo Nordisk is available on the company’s internet homepage at the address: novonordisk.com

Stock Exchange Announcement No 27 / 2004

 

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Novo Nordisk A/S

Novo Allé

Telephone:
+45 4444 8888
Telefax:
+45 4443 6633

Internet:

CVR number:

 

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Appendix 1:

As of 1 January 2004, the accounting policies have been changed to comply with International Financial Reporting Standards (IFRS). The accounting policies used in appendix 1 as well as all other appendices in this interim report are consistent with those used in the Annual Financial Report 2003 except for the changes described in the section ‘Adoption of IFRS in 2004’ in the Annual Financial Report 2003, which describes the changes from the historically applied Danish GAAP to IFRS.

The Novo Nordisk Group      
Consolidated income statement      
       
  2004   2003
DKK million Q1   Q1
 
       
Sales 6,567   6,056
Cost of goods sold 1,851   1,666
 
Gross profit 4,716   4,390
       
Sales and distribution costs 1,926   1,772
Research and development costs 1,035   937
Administrative expenses 471   455
Licence fees and other operating income (net) 232   171
 
Operating profit 1,516   1,397
       
Share of profit in associated R&D companies (38)   (63)
Share of profit in other associated companies (31)   9
Financial income 178   421
Financial expenses 22   133
 
Profit before taxation 1,603   1,631
       
Income taxes 529   558
 
NET PROFIT 1,074   1,073
       
       
       
Earnings per share (DKK) 3.18   3.12
Earnings per share diluted (DKK) 3.16   3.11
       
       
Segment sales:      
  Diabetes care 4,544   4,265
  Biopharmaceuticals 2,023   1,791
       
Segment operating profit:      
  Diabetes care 693   691
  Biopharmaceuticals 823*   706

* Operating profit for Biopharmaceuticals in the first quarter of 2004 includes income related to the settlement between Pfizer and Novo Nordisk related to Pfizer’s early termination of the out-licence agreement for certain HRT products in the US.

Stock Exchange Announcement No 27 / 2004

 

Page 12 of 18

 

 

 

 

 

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Appendix 2:

The Novo Nordisk Group
Quarterly numbers in DKK
 
(Amounts in DKK million, except number of employees, earnings per share and number of shares outstanding.)

  2004 2003     % change
Q1 2003 -
Q1 2004
  Q1 Q4 Q3 Q2 Q1
               
 
    
               
Sales 6,567 7,158 6,655 6,477 6,056   8%
               
Gross profit 4,716 5,031 4,847 4,677 4,390   7%
Gross margin 71.8% 70.3% 72.8% 72.2% 72.5%    
               
Sales and distribution costs 1,926 2,097 1,880 1,854 1,772   9%
Percent of sales 29.3% 29.3% 28.2% 28.6% 29.3%    
Research and development costs 1,035 1,125 1,012 969 937   10%
Percent of sales 15.8% 15.7% 15.2% 15.0% 15.5%    
Administrative expenses 471 482 485 415 455   4%
Percent of sales 7.2% 6.7% 7.3% 6.4% 7.5%    
Licence fees and other operating income (net) 232 423 216 226 171   36%
               
Operating profit 1,516 1,750 1,686 1,665 1,397   9%
Operating margin 23.1% 24.4% 25.3% 25.7% 23.1%    
               
Net financials 87 406 27 287 234   -63%
Profit before taxation 1,603 2,156 1,713 1,952 1,631   -2%
               
Net profit 1,074 1,413 1,128 1,288 1,073   0%
               
Depreciation, amortisation and impairment losses 380 553 363 356 309   23%
Capital expenditure 392 934 383 519 466   -16%
               
Cash flow from operating activities 1,350 221 2,317 1,437 2,174   -38%
Free cash flow 886 (703) 1,932 910 1,707   -48%
               
Equity 24,048 24,887 23,700 22,807 21,829   10%
Total assets 33,838 34,564 35,140 33,103 31,382   8%
Equity ratio 71.1% 72.0% 67.4% 68.9% 69.6%    
               
Full-time employees at the end of the period 19,179 18,756 18,664 18,465 18,221   5%
               
Diluted earnings per share (in DKK)* 3.16 4.17 3.31 3.76 3.11   2%
               
Average number of shares outstanding (million)*              
- used for diluted earnings per share 339.8 339.1 340.7 342.0 344.6   -1%
               
Sales by business segments:              
  Insulin analogues 893 796 711 576 488   83%
  Human insulin and insulin-related sales 3,232 3,963 3,554 3,666 3,414   -5%
  Oral antidiabetic products (OAD) 419 390 387 300 363   15%
  Diabetes care total 4,544 5,149 4,652 4,542 4,265   7%
               
  NovoSeven® 1,027 940 1,010 996 925   11%
  Growth hormone therapy 554 588 520 537 503   10%
  Hormone replacement therapy 342 399 361 292 279   23%
  Other products 100 82 112 110 84   19%
  Biopharmaceuticals total 2,023 2,009 2,003 1,935 1,791   13%
               
  Sales by geographic segments:              
  Europe 2,894 3,165 2,920 2,935 2,723   6%
  North America 1,769 1,618 1,674 1,501 1,566   13%
  International Operations 980 1,234 1,027 1,058 910   8%
  Japan & Oceania 924 1,141 1,034 983 857   8%
               
  Segment operating profit:              
  Diabetes care 693 966 755 784 691   0%
  Biopharmaceuticals 823 784 931 881 706   17%

*) For Q1 2004 diluted earnings per share/ADR of a nominal value of DKK 2, which include options on Novo Nordisk’s treasury shares with anexercise price below current market value, have been based on an average number of shares of 339,826,027.

Stock Exchange Announcement No 27 / 2004

 

Page 13 of 18

 

 

 

 

 

Novo Nordisk A/S

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Appendix 3:

The Novo Nordisk Group
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.

  2004 2003     % change
Q1 2003 -
Q1 2004
  Q1 Q4 Q3 Q2 Q1
 
   
               
Sales 882 957 896 872 815    8%
               
Gross profit 633 673 652 630 591   7%
Gross margin 71.8% 70.3% 72.8% 72.2% 72.5%    
               
Sales and distribution costs 259 281 253 250 238   9%
Percent of sales 29.3% 29.3% 28.2% 28.6% 29.3%    
Research and development costs 139 150 136 131 126   10%
Percent of sales 15.8% 15.7% 15.2% 15.0% 15.5%    
Administrative expenses 62 64 66 55 62   4%
Percent of sales 7.2% 6.7% 7.3% 6.4% 7.5%    
Licence fees and other operating income (net) 31 56 30 30 23   36%
               
Operating profit 204 234 227 224 188   9%
Operating margin 23.1% 24.4% 25.3% 25.7% 23.1%    
               
Net financials 11 54 4 38 32   -63%
Profit before taxation 215 288 231 262 220   -2%
               
Net profit 144 189 152 174 144   0%
               
Depreciation, amortisation and impairment losses 51 74 48 48 42   23%
Capital expenditure 53 125 51 70 63   -16%
               
Cash flow from operating activities 181 28 312 193 293   -38%
Free cash flow 119 (96) 260 123 230   -48%
               
Equity 3,230 3,343 3,192 3,070 2,939   10%
Total assets 4,545 4,643 4,732 4,455 4,226   8%
Equity ratio 71.1% 72.0% 67.4% 68.9% 69.6%    
               
Full-time employees at the end of the period 19,179 18,756 18,664 18,465 18,221   5%
               
Diluted earnings per share (in EUR)* 0.42 0.56 0.45 0.50 0.42   2%
               
Average number of shares outstanding (million)*              
- used for diluted earnings per share 339.8 339.1 340.7 342.0 344.6   -1%
               
Sales by business segments:              
  Insulin analogues 120 106 96 77 66   83%
  Human insulin and insulin-related sales 435 529 479 494 459   -5%
  Oral antidiabetic products (OAD) 56 53 52 40 49   15%
  Diabetes care total 611 688 627 611 574   7%
               
  NovoSeven® 138 125 136 135 124   11%
  Growth hormone therapy 74 79 70 72 68   10%
  Hormone replacement therapy 46 54 48 39 38   23%
  Other products 13 11 15 15 11   19%
  Biopharmaceuticals total 271 269 269 261 241   13%
               
Sales by geographic segments:              
  Europe 389 422 394 394 367   6%
  North America 237 217 225 202 211   13%
  International Operations 132 165 138 143 122   8%
  Japan & Oceania 124 153 139 133 115   8%
               
Segment operating profit:              
  Diabetes care 93 129 101 106 93   0%
  Biopharmaceuticals 111 105 126 118 95   17%

*) For Q1 2004 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 339,826,027.

 

Stock Exchange Announcement No 27 / 2004

 

Page 14 of 18

 

 

 

 

 

Novo Nordisk A/S

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Appendix 4:

The Novo Nordisk Group    
Consolidated balance sheet    
     
DKK million 31 Mar 2004 31 Dec 2003
ASSETS    
     
Long-term assets    
Intangible assets 346 331
Property, plant and equipment 16,403 16,342
Investments in associated companies 991 1,040
Deferred tax assets 702 579
Long-term financial assets 111 80
TOTAL LONG-TERM ASSETS 18,553 18,372
     
Current assets    
Inventories 6,816 6,531
Trade receivables 3,768 3,785
Tax receivables 403 134
Other receivables 1,961 2,652
Marketable securities 832 1,828
Cash at bank and in hand 1,505 1,262
TOTAL CURRENT ASSETS 15,285 16,192
     
TOTAL ASSETS 33,838 34,564
     
     
EQUITY AND LIABILITIES    
     
Share capital 709 709
Treasury shares (33) (33)
Share premium account 2,565 2,565
Retained earnings 20,640 21,037
Other comprehensive income 167 609
TOTAL EQUITY 24,048 24,887
     
Long-term liabilities    
Long-term debt 772 753
Deferred tax liabilities 1,705 1,610
Provision for pensions 270 222
Other long-term provisions 58 60
Total long-term liabilities 2,805 2,645
     
Current liabilities    
Short-term debt 794 975
Trade payables 699 1,008
Tax payables 277 643
Other current liabilities 4,071 3,366
Other short-term provisions 1,144 1,040
Total current liabilities 6,985 7,032
     
TOTAL LIABILITIES 9,790 9,677
     
TOTAL EQUITY AND LIABILITIES 33,838 34,564

Stock Exchange Announcement No 27 / 2004

 

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Appendix 5:

The Novo Nordisk Group                
Consolidated statement of changes in equity          
                 
          Other comprehensive income
   
DKK million Share capital Treasury shares Share premium account Retained earnings Exchange rate adjustments Deferred
gain/loss on cash flow hedges 		Other adjust-ments   Total
Q1 2004                  
                   
Balance at the beginning of the year 709 (33) 2,565 21,037 33 513 63     24,887
                   
Net profit for the period       1,074         1,074
Sale of treasury shares   -   17         17
Dividends declared       (1,488)         (1,488)
Exchange rate adjustment of investments in subsidiaries         (20)       (20)
Reversal of deferred (gain)/loss on cash flow hedges at the beginning of the year           (513)     (513)
Deferred gain/(loss) on cash flow hedges at the end of the period           92     92
Other adjustments             (1)   (1)
Balance at the end of the period 709 (33) 2,565 20,640 13 92 62   24,048
                   
                   
                   
Q1 2003                  
                   
Balance at the beginning of the year 709 (19) 2,565 18,968 27 391 (45)   22,596
                   
Net profit for the period       1,073         1,073
Purchase of treasury shares   (6)   (590)         (596)
Sale of treasury shares       1         1
Dividends declared       (1,233)         (1,233)
Exchange rate adjustment of investments in subsidiaries         (13)       (13)
Reversal of deferred (gain)/loss on cash flow hedges at the beginning of the year           (391)     (391)
Deferred gain/(loss) on cash flow hedges at the end of the period           394     394
Other adjustments             (2)   (2)
Balance at the end of the period 709 (25) 2,565 18,219 14 394 (47)   21,829

Stock Exchange Announcement No 27 / 2004

 

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Appendix 6:

The Novo Nordisk Group    
Condensed consolidated statements of cash flow and financial resources
     
     
DKK million Q1 2004 Q1 2003
     
Net profit 1,074 1,073
     
Net reversals with no effect on cash flow 1,191 896
Income taxes paid and net interest received (1,085) (322)
Cash flow before change in working capital 1,180 1,647
     
Net change in working capital 170 527
Cash flow from operating activities 1,350 2,174
     
Net investments in intangible assets and long-term financial assets (72) (1)
Capital expenditure for property, plant and equipment (392) (466)
Net change in marketable securities (>3 months) 1,002 2
Total cash flow from investing activities 538 (465)
     
Cash flow from financing activities (1,506) (1,825)
     
NET CASH FLOW 382 (116)
     
Unrealised gain/(loss) on exchange rates in cash and cash equivalents 4 (12)
Net change in cash and cash equivalents 386 (128)
     
Cash and cash equivalents at the beginning of the year 841 919
Cash and cash equivalents at the end of the period 1,227 791
     
Undrawn committed credit facilities 5,722 9,121
FINANCIAL RESOURCES AT THE END OF THE PERIOD 6,949 9,912
     
     
FREE CASH FLOW* 886 1,707

*) Cash flow from operating activities + Cash flow from investing activities - Net change in marketable securities (>3 months)

Stock Exchange Announcement No 27 / 2004

 

Page 17 of 18

 

 

 

 

 

Novo Nordisk A/S

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Appendix 7:

The Novo Nordisk Group
Reconciliations of Danish GAAP to IFRS
   
Accounting policies
This unaudited interim financial report has been prepared in accordance with International Accounting Standard 34 on Interim Financial Reporting.
As of 1 January 2004, the accounting policies have been changed to comply with International Financial Reporting Standards (IFRS). The date of transition is 1 January 2002. The accounting policies used in this interim financial report are consistent with those used in the Annual Financial Report 2003 except for the changes described in the section ‘Adoption of IFRS in 2004’ in the Annual Financial report 2003, which describes the changes from the historically applied Danish GAAP to IFRS. In this interim financial report the presentation and accounting terminology comply with IFRS.
The reconciliation items in the tables below refer to descriptions of the changes in accounting policies due to IFRS adoption mentioned in the section ‘Adoption of IFRS in 2004’ in the Annual Financial Report 2003.
   
Effect of IFRS adoption for the quarterly financial reporting in 2003

           
DKK Million Q1 Q2 Q3 Q4
Operating profit — Danish GAAP 1,320 1,619 1,636 1,809
  Accounting for associated R&D companies — reclass. of share of profit or loss 40 36 40 31
  Accounting for associated R&D companies — reclass. of capital (gain)/loss 18 - - (103)
  Provisions for pensions 9 - 1 -
  Borrowing costs — depreciation 10 9 9 10
  Other - 1 - 3
Operating profit — IFRS 1,397 1,665 1,686 1,750
           
Net profit — Danish GAAP 1,091 1,286 1,130 1,351
  Accounting for associated R&D companies (5) (5) (5) 6
  Market value of currency options (15) 17 (13) 41
  Provisions for pensions 5 - 1 -
  Borrowing costs — depreciation 10 9 9 10
  Borrowing costs — interest expenses as incurred (3) (3) (2) (2)
  Other (10) (16) 8 7
Net profit — IFRS 1,073 1,288 1,128 1,413
           
Equity — Danish GAAP 22,158 23,159 24,037 25,224
  Accounting for associated R&D companies 40 34 28 31
  Market value of currency options (16) (23) (18) (35)
  Provisions for pensions (32) (30) (29) (36)
  Borrowing costs (282) (278) (273) (268)
  Other (39) (55) (45) (29)
Equity — IFRS 21,829 22,807 23,700 24,887
           
Effect of IFRS adoption on net profit        
           
DKK Million   2003 2002  
 
Net profit — Danish GAAP   4,858 4,095  
  Accounting for associated R&D companies   (9) (9)  
  Market value of currency options   30 50  
  Provisions for pensions   6 (7)  
  Borrowing costs — depreciation   38 39  
  Borrowing costs — interest expenses as incurred   (10) (14)  
  Other   (11) (10)  
Net profit — IFRS   4,902 4,144  
           
Effect of IFRS adoption on equity        
      31 Dec 31 Dec 1 Jan
DKK Million   2003 2002 2002
Equity — Danish GAAP   25,224 22,928 20,137
  Accounting for associated R&D companies   31 47 57
  Market value of currency options   (35) (22) (22)
  Provisions for pensions   (36) (42) (15)
  Borrowing costs   (268) (287) (297)
  Other   (29) (28) (31)
Equity — IFRS   24,887 22,596 19,829

Stock Exchange Announcement No 27 / 2004

 

Page 18 of 18

 

 

 

 

 

Novo Nordisk A/S

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+45 4444 8888
Telefax:
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Internet:

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