Financial statement for January Novo Nordisk A/S Investor Relations. Novo Allé 2880 Bagsværd Denmark

Transcription

1 statement for January 2013 Novo Nordisk increased operating profit by 32% in 2012 Sales growth of 18% driven by Victoza, NovoRapid and Levemir Sales increased by 18% to 78.0 billion in Danish kroner and by 12% in local currencies. Sales of modern insulins increased by 21% (15% in local currencies). Sales of Victoza increased by 58% (50% in local currencies). Sales in North America increased by 29% (19% in local currencies). Sales in International Operations increased by 18% (16% in local currencies). Reported operating profit increased by 32% to DKK 29.5 billion including a 1.7 percentage points improvement in the gross margin. Measured in local currencies, operating profit increased by 20%. Net profit increased by 25% to DKK 21.4 billion. Earnings per share (diluted) increased by 30% to DKK Novo Nordisk has in December 2012 received, and submitted its response to, a Warning Letter from the US Food and Drug Administration (FDA) in relation to an inspection of an aseptic filling facility in Denmark. Novo Nordisk does not expect the letter to have an impact on products currently marketed in the US. The regulatory process for the new-generation insulins, Tresiba and Ryzodeg, continues to progress in the major markets. In Japan and Europe both products have now been approved. In November 2012, an FDA Advisory Committee voted eight to four in favour of approving the products with a post-approval outcomes trial commitment. In 2012, Novo Nordisk reached its four long-term financial targets. Consequently, two of the four targets have been increased. The core target of 15% annual operating profit growth on average is maintained. For 2013, sales growth measured in local currencies is expected to be 8-11%, and operating profit growth measured in local currencies is expected to be around 10%. Effective 31 January 2013, Novo Nordisk s Executive Management is expanded with two new members who will be responsible for Marketing & Medical Affairs and IT, Quality & Development respectively. At the Annual General Meeting on 20 March 2013, the Board of Directors will propose a 29% increase in dividend to DKK 18 per share. The Board of Directors has furthermore decided to initiate a new 12 months share repurchase programme of up to DKK 14 billion. Lars Rebien Sørensen, president and CEO: 2012 has been another year with strong results for Novo Nordisk driven by the sales growth of Victoza and the two modern insulins NovoRapid and Levemir. We are pleased that Tresiba and Ryzodeg have been approved in key markets like Japan and the EU and look forward to launching Tresiba in several markets in Novo Nordisk A/S Investor Relations Novo Allé 2880 Bagsværd Denmark Telephone: CVR No:

2 statement for 2012 Page 2 of 33 ABOUT NOVO NORDISK Novo Nordisk is a global healthcare company with 90 years of innovation and leadership in diabetes care. The company also has leading positions within haemophilia care, growth hormone therapy and hormone replacement therapy. Headquartered in Denmark, Novo Nordisk employs approximately 34,700 employees in 75 countries, and markets its products in more than 180 countries. Novo Nordisk s B shares are listed on NASDAQ OMX Copenhagen (Novo-B) and its ADRs are listed on the New York Stock Exchange (NVO). CONFERENCE CALL DETAILS On 31 January 2013 at CET, corresponding to 8.30 am EST, 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. WEBCAST OF LONDON PRESENTATION On 4 February 2013 at CET, corresponding to 7.30 am EST, management will give a presentation to institutional investors and sell side-analysts in London. A webcast of the presentation can be followed via a link on novonordisk.com, which can be found under Investors Download centre. Presentation material for the conference call will be made available on the same page. FINANCIAL CALENDAR 4 February 2013 PDF version of the Annual Report February 2013 Deadline for the company s receipt of shareholder proposals for the Annual General Meeting February 2013 Printed version of the Annual Report March 2013 Annual General Meeting May 2013 statement for the first three months of August 2013 statement for the first six months of October 2013 statement for the first nine months of January 2014 statement for 2013 CONTACTS FOR FURTHER INFORMATION Media: Mike Rulis mike@novonordisk.com Ken Inchausti (US) kiau@novonordisk.com Investors: Kasper Roseeuw Poulsen krop@novonordisk.com Frank Daniel Mersebach fdni@novonordisk.com Lars Borup Jacobsen lbpj@novonordisk.com Jannick Lindegaard (US) jlis@novonordisk.com Further about Novo Nordisk is available on the company s website at novonordisk.com.

3 statement for 2012 Page 3 of 33 LIST OF CONTENTS... 4 Consolidated financial statement Performance versus long-term financial targets... 5 Sales development... 6 Development in costs and operating profit Net financials and tax Capital expenditure and free cash flow Key developments in the fourth quarter of Outlook Outlook Long-term financial targets update Research & Development update Diabetes care: Insulin and GLP Biopharmaceuticals: Haemostasis Biopharmaceuticals: Inflammation Sustainability Highlights from the Consolidated social and environmental statements for Social and environmental Equity matters Management statement Appendix 1: Quarterly numbers in DKK Appendix 2: Income statement and statement of comprehensive income Appendix 3: Balance sheet Appendix 4: Statement of cash flows Appendix 5: Statement of changes in equity Appendix 6: Quarterly sales split per region 2012 / supplementary Appendix 7: 2012 sales split per region / supplementary Appendix 8: Quarterly numbers in EUR / supplementary Appendix 9: Key currencies assumptions / supplementary... 33

4 statement for 2012 Page 4 of 33 FINANCIAL PERFORMANCE CONSOLIDATED FINANCIAL STATEMENT 2012 The Board of Directors and Executive Management have approved the Annual Report 2012 of Novo Nordisk A/S including the audited consolidated financial statements. The Board of Directors and Executive Management also approved this financial statement containing condensed financial for This consolidated financial statement is prepared in accordance with the recognition and measurement requirements of the International Reporting Standards (IFRS) as issued by IASB, IFRS as endorsed by the EU and the additional Danish disclosure requirements for listed companies. The accounting policies used in this financial statement are consistent with those used in the audited consolidated financial statements in the Annual Report 2012 as well as those applied in the audited consolidated financial statements in the Annual Report 2011, except for the accounting policy for retirement benefit obligations, which has been changed in 2012 following the amendment of IAS 19 Employee benefits. This change does not have a significant impact on the financial statement for PROFIT AND LOSS % change 2011 to 2012 DKK million Sales 78,026 66,346 60,776 51,078 45,553 18% Gross profit 64,561 53,757 49,096 40,640 35,444 20% Gross margin 82.7% 81.0% 80.8% 79.6% 77.8% Sales and distribution costs 21,544 19,004 18,195 15,420 12,866 13% Percentage of sales 27.6% 28.6% 29.9% 30.2% 28.2% Research and development costs 10,897 9,628 9,602 7,864 7,856 13% Percentage of sales 14.0% 14.5% 15.8% 15.4% 17.2% Administrative costs 3,312 3,245 3,065 2,764 2,635 2% Percentage of sales 4.2% 4.9% 5.0% 5.4% 5.8% Licence fees and other operating income % Operating profit 29,474 22,374 18,891 14,933 12,373 32% Operating margin 37.8% 33.7% 31.1% 29.2% 27.2% Net financials (1,663) (449) (605) (945) % Profit before income taxes 27,811 21,925 18,286 13,988 12,695 27% Income taxes 6,379 4,828 3,883 3,220 3,050 32% Effective tax rate 22.9% 22.0% 21.2% 23.0% 24.0% Net profit 21,432 17,097 14,403 10,768 9,645 25% Net profit margin 27.5% 25.8% 23.7% 21.1% 21.2%

5 statement for 2012 Page 5 of 33 CONSOLIDATED FINANCIAL STATEMENT 2012 CONTINUED OTHER KEY NUMBERS (Amounts below in DKK million except earnings per share and dividend per share) % change 2011 to 2012 Depreciation, amortisation and impairment losses 2,693 2,737 2,467 2,551 2,442 (2%) Capital expenditure 3,319 3,003 3,308 2,631 1,754 11% Net cash generated from operating activities 22,214 21,374 19,679 15,378 12,863 4% Free cash flow 18,645 18,112 17,013 12,332 11,015 3% Total assets 65,669 64,698 61,402 54,742 50,603 2% Equity 40,632 37,448 36,965 35,734 32,979 9% Equity ratio 61.9% 57.9% 60.2% 65.3% 65.2% Diluted earnings per share / ADR (in DKK) % Dividend per share (in DKK) 1) % Payout ratio 2) 45.3% 45.3% 39.6% 40.9% 37.8% Payout ratio (adjusted) 3) 4) % % 1) Proposed dividend for the financial year ) Dividend for the year as a percentage of net profit. 3) 2010: Adjusted for impact of ZymoGenetics, Inc. share divestment. 4) 2008: Adjusted for costs related to the discontinuation of pulmonary diabetes projects. PERFORMANCE VERSUS LONG-TERM FINANCIAL TARGETS PERFORMANCE AGAINST LONG- TERM FINANCIAL TARGETS Target Operating profit growth 31.7% 18.4% 26.5% 20.7% 38.4% 15% Operating profit growth (adjusted) 1) % Operating margin 37.8% 33.7% 31.1% 29.2% 27.2% 35% Operating profit after tax to net operating assets 99.0% 77.9% 63.6% 47.3% 37.4% 90% Cash to earnings 87.0% 105.9% 118.1% 114.5% 114.2% Cash to earnings (three-years average) 103.7% 112.8% 115.6% 111.5% 97.6% 90% 1) Excluding costs related to the discontinuation of pulmonary diabetes projects in 2007 and 2008.

6 statement for 2012 Page 6 of 33 SALES DEVELOPMENT Sales increased by 18% measured in Danish kroner and by 12% in local currencies in 2012 compared to This is in line with the latest guidance of 10-12% growth in local currencies provided in connection with the quarterly announcement in October North America was the main contributor with 66% share of growth measured in local currencies, followed by International Operations and Region China, contributing 20% and 11% respectively. Sales growth was realised within both diabetes care and biopharmaceuticals, with the majority of growth originating from the modern insulins and Victoza. Sales growth in 2012 was negatively impacted by around 1.5 percentage points due to healthcare and pricing reforms in several European markets, the US, China and International Operations. Sales 2012 DKK million Growth as reported Growth in local currencies Share of growth in local currencies The diabetes care segment Modern insulins 34,821 21% 15% 55% - NovoRapid 15,693 23% 16% 26% - NovoMix 9,342 13% 7% 8% - Levemir 9,786 27% 21% 21% Human insulins 11,302 5% 0% 0% Protein-related products 2,511 9% 3% 1% Victoza 9,495 58% 50% 39% Oral antidiabetic products 2,758 7% 0% 0% Diabetes care total 60,887 21% 15% 95% The biopharmaceuticals segment NovoSeven 8,933 7% 2% 2% Norditropin 5,698 13% 8% 5% Other products 2,508 (1%) (6%) (2%) Biopharmaceuticals total 17,139 8% 2% 5% Total sales 78,026 18% 12% 100% In the following sections, unless otherwise noted, market data are based on moving annual total (MAT) from November 2012 and November 2011 provided by the independent data provider IMS Health. DIABETES CARE SALES DEVELOPMENT Sales of diabetes care products increased by 21% measured in Danish kroner to DKK 60,887 million and by 15% in local currencies. Novo Nordisk is the world leader in diabetes care and now holds a global value market share of 26% compared to 24% at the same time the year before.

7 statement for 2012 Page 7 of 33 Modern insulins, human insulins and protein-related products Sales of modern insulins, human insulins and protein-related products increased by 16% in Danish kroner to DKK 48,634 million and by 10% measured in local currencies, with North America, International Operations and Region China achieving the highest growth rates. Novo Nordisk is the global leader with 49% of the total insulin market and 46% of the modern insulin market, both measured in volume. Sales of modern insulins increased by 21% in Danish kroner to DKK 34,821 million and by 15% in local currencies. North America accounted for more than half of the growth, followed by International Operations and Region China. Sales of modern insulins now constitute more than 75% of Novo Nordisk s sales of insulin. INSULIN MARKET SHARES (volume, MAT) Novo Nordisk s share of total insulin market Novo Nordisk s share of modern insulin market November 2012 November 2011 November 2012 November 2011 Global 49% 50% 46% 46% USA 41% 40% 38% 36% Europe 50% 51% 50% 50% International Operations* 58% 58% 55% 56% Japan 55% 59% 51% 53% China** 60% 62% 65% 67% Source: IMS, November 2012 data. *: Data for 12 selected markets representing approximately 60% of Novo Nordisk s diabetes sales in the region. **: Data for mainland China, excluding Hong Kong and Taiwan. North America Sales of modern insulins, human insulins and protein-related products in North America increased by 29% in Danish kroner and by 20% in local currencies. This reflects continued solid market penetration of the modern insulins, NovoLog, Levemir and NovoLog Mix 70/30, and a modest growth in human insulin sales. 50% of Novo Nordisk s modern insulin volume in the US is used in the prefilled device FlexPen. Europe Sales of modern insulins, human insulins and protein-related products in Europe were unchanged in Danish kroner but decreased by 1% in local currencies. Sales in Europe reflect continued progress for NovoRapid and Levemir, countered by declining human insulin sales. Sales growth in Europe is negatively impacted by a continued low insulin volume growth, below 3%, and by the implementation of pricing reforms in several European markets. The device penetration in Europe remains high with 96% of Novo Nordisk s insulin volume being used in devices, primarily NovoPen and FlexPen. International Operations Sales of modern insulins, human insulins and protein-related products in International Operations increased by 19% in Danish kroner and by 16% in local currencies. The growth is driven by all three modern insulins and a solid contribution from human insulins. Currently, 58% of Novo Nordisk s insulin volume in the major private markets is used in devices.

8 statement for 2012 Page 8 of 33 Japan & Korea Sales of modern insulins, human insulins and protein-related products in Japan & Korea increased by 1% measured in Danish kroner but declined by 6% in local currencies. Sales development is impacted negatively by a continued volume decline in the Japanese insulin market and a challenging competitive environment. The device penetration in Japan remains high with 98% of Novo Nordisk s insulin volume being used in devices, primarily the FlexPen. Region China Sales of modern insulins, human insulins and protein-related products in Region China increased by 27% in Danish kroner and by 15% in local currencies. The sales growth was driven by all three modern insulins, while sales of human insulins only grew modestly. Currently, 97% of Novo Nordisk s insulin volume in China is used in devices, primarily the durable device NovoPen. Victoza (GLP-1 therapy for type 2 diabetes) Victoza sales increased by 58% in Danish kroner to DKK 9,495 million and by 50% in local currencies, reflecting robust sales in all regions. The global roll-out is continuing, with 60 countries having launched Victoza by the end of December Since September, Victoza has been launched in South Korea and two smaller countries. Victoza holds the global market share leadership with a 68% value market share in the GLP-1 segment compared to 58% in The GLP-1 segment s value share of the total diabetes care market has increased to 6.0% compared to 4.5% in GLP-1 MARKET SHARES (value, MAT) GLP-1 share of total diabetes care market Victoza share of GLP-1 market November 2012 November 2011 November 2012 November 2011 Global 6.0% 4.5% 68% 58% USA 7.3% 5.8% 62% 52% Europe 6.7% 5.0% 76% 68% International Operations* 3.0% 1.2% 80% 64% Japan 2.3% 1.6% 77% 87% China** 0.5% 0.2% 44% 4% Source: IMS, November 2012 data. *: Data for 12 selected markets representing approximately 60% of Novo Nordisk s diabetes sales in the region. **: Data for mainland China, excluding Hong Kong and Taiwan. North America Sales of Victoza in North America increased by 60% in Danish kroner and by 48% measured in local currencies. This reflects a continued expansion of the GLP-1 class, which represents 7.3% of the total US diabetes care market in value compared to 5.8% in Despite the launch of a competitive product, Victoza continues to drive the US GLP-1 market expansion and is the GLP-1 market leader with a 62% value market share. Europe Sales in Europe increased by 50% in Danish kroner and by 48% measured in local currencies. Sales growth is primarily driven by France, the UK, Italy and Spain. In Europe, the GLP-1 class s share of the total diabetes care market in value has increased to 6.7% compared to 5.0% in Victoza is the GLP-1 market leader with a value market share of 76%.

9 statement for 2012 Page 9 of 33 International Operations Sales in International Operations increased by 90% in Danish kroner and by 98% measured in local currencies. This reflects continued strong, driven by Brazil and a number of Middle Eastern countries, and a modest comparator in The GLP-1 class is expanding in International Operations and represents 3.0% of the total diabetes care market in value compared to 1.2% in The significant expansion of the GLP-1 class is primarily driven by a strong uptake in Brazil. Victoza is the GLP-1 market leader across International Operations with a value market share of 80%. Japan & Korea Sales in Japan & Korea increased by 39% in Danish kroner and by 29% measured in local currencies. In Japan, the GLP-1 market is growing and represents 2.3% of the total diabetes care market in value compared to 1.6% in Victoza is the leader in the Japanese GLP-1 class with a value market share of 77%. Region China Victoza was launched in China during the fourth quarter of Early market feedback is positive and hospital listings are developing satisfactorily. The GLP-1 class in China is not reimbursed and relatively modest in size, but its share of the total diabetes care market in value has expanded to 0.5% compared to 0.2% in Victoza holds a GLP-1 value market share of 44%. NovoNorm /Prandin /PrandiMet (oral antidiabetic products) Sales of oral antidiabetic products increased by 7% in Danish kroner to DKK 2,758 million and remained unchanged in local currencies. The sales development reflects sales growth in all regions except Europe where generic competition is negatively impacting overall sales in several markets. BIOPHARMACEUTICALS SALES DEVELOPMENT Sales of biopharmaceutical products increased by 8% measured in Danish kroner to DKK 17,139 million and by 2% measured in local currencies, primarily driven by higher sales in the US, partly countered by lower sales in Europe. NovoSeven (bleeding disorders therapy) Sales of NovoSeven increased by 7% in Danish kroner to DKK 8,933 million and by 2% in local currencies. The market for NovoSeven remains negatively impacted by stricter budgetary controls, an increased number of inhibitor patients participating in clinical trials and patients transferring to an alternative treatment regimen of immune tolerance therapy. The sales development reflects a strong in Japan countered by lower sales in Europe. Norditropin (growth hormone therapy) Sales of Norditropin increased by 13% measured in Danish kroner to DKK 5,698 million and by 8% measured in local currencies. The sales growth is primarily driven by North America and International Operations. Novo Nordisk is the leading company in the global growth hormone market with a 24% market share measured by volume. Other products Sales of other products within biopharmaceuticals, decreased by 1% in Danish kroner to DKK 2,508 million and by 6% measured in local currencies. This development reflects a negative impact from the decline in the total glucagon market for diagnostic purposes in

10 statement for 2012 Page 10 of 33 Japan as well as generic competition to Activella, countered by continued sales growth for Vagifem in the US. DEVELOPMENT IN COSTS AND OPERATING PROFIT The cost of goods sold grew by 7% to DKK 13,465 million, resulting in a gross margin of 82.7% compared to 81.0% in This development primarily reflects an underlying improvement of 1.0 percentage point driven by favourable price development in North America and a positive net impact from product mix due to increased sales of modern insulins and Victoza. The gross margin was positively impacted by around 0.7 percentage point from currencies as a result of the appreciation of primarily the US dollar versus the Danish krone compared to Total non-production-related costs increased by 12% to DKK 35,753 million and by 8% in local currencies. Sales and distribution costs increased by 13% to DKK 21,544 million and by 8% in local currencies. The cost increase is driven by the expansion of the US sales force and other costs to prepare for the global launch of Tresiba. Furthermore, costs increased due to sales and marketing investments in selected countries in International Operations as well as the Chinese sales force expansion in mid Growth in sales and distribution costs is being partly offset by a reversal of provisions for legal disputes, which have been resolved during Research and development costs increased by 13% to DKK 10,897 million and by 11% in local currencies. The cost increase is primarily driven by development costs related to the ongoing phase 3 trials for liraglutide in obesity and the phase 3a trials for IDegLira, a fixed-ratio combination of insulin degludec and liraglutide. Within biopharmaceuticals, costs are primarily related to the portfolio of development projects within haemophilia and the phase 2 trial for anti-il-20, a recombinant human monoclonal antibody, in rheumatoid arthritis. Administration costs increased by 2% to DKK 3,312 million and stayed flat in local currencies. The unchanged costs in local currencies reflect items of a non-recurring nature in 2011 and 2012, and an underlying increase of approximately 4%, primarily to support the expansion of the international sales organisation. Licence fees and other operating income amounted to DKK 666 million compared to DKK 494 million in This development reflects a higher level of recurring royalty income. Operating profit in 2012 increased by 32% to DKK 29,474 million. In local currencies, the growth was 20%, which is slightly higher than the latest guidance for operating profit growth for 2012 of 16-18%. This reflects realised sales growth at the upper end of the guided interval accompanied by slightly lower-than-expected sales and distribution costs. NET FINANCIALS AND TAX Net financials showed a net expense of DKK 1,663 million compared to a net expense of DKK 449 million in The reported net financial expenses in 2012 are in line with the latest guidance of around DKK 1,700 million. As of 31 December 2012, foreign exchange hedging gains of around DKK 850 million have been deferred for recognition in the income statement in In line with Novo Nordisk s treasury policy, the most significant foreign exchange risks for the group have been hedged primarily through forward currency contracts. Reflecting the

11 statement for 2012 Page 11 of 33 portfolio of foreign currency exchange hedging contracts, the foreign exchange result for 2012 was an expense of DKK 1,529 million compared to an expense of DKK 322 million in This development reflects losses on foreign exchange hedging involving especially the US dollar due to its appreciation versus the Danish krone compared to the prevailing exchange rate level in The effective tax rate for 2012 was 22.9%, which is in line with the latest guidance of a tax rate of around 23% for the full year CAPITAL EXPENDITURE AND FREE CASH FLOW Net capital expenditure for property, plant and equipment for 2012 was DKK 3.3 billion compared to DKK 3.0 billion in The main investment projects in 2012 were primarily related to filling capacity in Denmark, Russia and France as well as device production facilities in the US, China and Denmark. Net capital expenditure was in line with previously communicated expectations of around DKK 3.5 billion. Free cash flow for 2012 was DKK 18.6 billion compared to DKK 18.1 billion in 2011, which is in line with the latest guidance of around DKK 19 billion. The limited increase compared to 2011 reflects non-recurring tax payments in 2012 related to income tax disputes from prior years. KEY DEVELOPMENTS IN THE FOURTH QUARTER OF 2012 Please refer to appendix 1 for an overview of the quarterly numbers in DKK. Sales in the fourth quarter of 2012 increased by 16% to DKK 20,962 million and by 12% in local currencies compared to the same period in The growth was driven by the three modern insulins, Victoza and NovoSeven. Victoza sales of DKK 2,709 million in the fourth quarter of 2012 were primarily driven by the US and Europe. From a geographic perspective, North America and International Operations represented the majority of total sales growth. The gross margin increased to 85.0% in the fourth quarter of 2012 compared to 82.8% in the same period last year. The underlying increase of 1.6 percentage points was driven by production efficiency, a positive impact from pricing in the US and a favourable product mix development. The gross margin was further improved by a positive currency impact of 0.6 percentage points. In the fourth quarter of 2012, total non-production-related costs increased by 15% to DKK 10,393 million and by 12% in local currencies compared to the same period last year. Sales and distribution costs in Danish kroner increased by 15% as reported and by 11% in local currencies in the fourth quarter of 2012 compared to the same period last year. The cost increase is driven by the expansion of the US sales force, Tresiba pre-launch activities, as well as sales and marketing investments in selected countries in International Operations. Research and development costs in Danish kroner increased by 17% as reported and by 15% in local currencies in the fourth quarter of 2012 compared to the same period last year. The development primarily reflects the continued progress of key development projects and the expansion of Novo Nordisk s global research activities in the US and China.

12 statement for 2012 Page 12 of 33 Administration costs in Danish kroner increased by 7% as reported and by 6% in local currencies in the fourth quarter of 2012 compared to the same period last year. The growth in administration costs is primarily related to back-office infrastructure costs to support the expansion of the sales organisation in North America and International Operations. Reported operating profit increased by 25% in the fourth quarter of 2012 compared to the same period last year and by 17% in local currencies. The growth in operating profit is driven by the robust sales growth and the significant gross margin improvement. OUTLOOK OUTLOOK 2013 The current expectations for 2013 are summarised in the table below: Expectations are as reported, if not otherwise stated Expectations 31 January 2013 Sales growth in local currencies 8-11% as reported Around 4.5 percentage points lower Operating profit growth in local currencies Around 10% as reported Around 7 percentage points lower Net financials Income of around DKK 1,400 million Effective tax rate Around 23% Capital expenditure Depreciation, amortisation and impairment losses Free cash flow Around DKK 3.5 billion Around DKK 3.0 billion Around DKK 22 billion Novo Nordisk expects sales growth in 2013 of 8-11% measured in local currencies. This reflects expectations for continued robust penetration for the portfolio of modern insulins, a continued steady Victoza and a positive sales contribution from Tresiba, primarily in the US, the EU and Japan. These sales drivers are partly expected to be countered by an impact from the challenging pricing environments in major markets, generic competition to oral antidiabetic products, intensifying competition within diabetes care as well as biopharmaceuticals and the macroeconomic conditions in a number of markets in International Operations. Given the current level of exchange rates versus the Danish krone, the reported sales growth is now expected to be around 4.5 percentage points lower than growth measured in local currencies. For 2013, operating profit growth is expected to be around 10% measured in local currencies. This reflects significant costs related to the expected global launch of Tresiba, the expanded US sales force, as well as sales and marketing investments in China and in a selected number of countries in International Operations. Given the current level of exchange rates versus the Danish krone, the reported operating profit

13 statement for 2012 Page 13 of 33 growth is now expected to be around 7 percentage points lower than growth measured in local currencies. For 2013, Novo Nordisk expects a net financial income of around DKK 1,400 million. The current expectation primarily reflects gains associated with currency hedging contracts following the depreciation of the US dollar and the Japanese yen versus the Danish krone compared to the average prevailing exchange rates in The expectations for gains related to currency hedging contracts are more than offset by the expected significant negative net impact on reported operating profit from the depreciation of invoicing currencies versus the Danish krone, primarily reflecting depreciation of non-hedged emerging market currencies. The effective tax rate for 2013 is expected to be around 23%. Capital expenditure is expected to be around DKK 3.5 billion in 2013, primarily related to investments in filling capacity and prefilled device production facilities and new office buildings in Denmark. Depreciation, amortisation and impairment losses are expected to be around DKK 3.0 billion. Free cash flow is expected to be around DKK 22 billion. All of the above expectations are based on the assumption that the global economic environment will not significantly change business conditions for Novo Nordisk during 2013, and that currency exchange rates, especially for the US dollar, will remain at the current level versus the Danish krone. Please refer to appendix 9 for key currency assumptions. Novo Nordisk has hedged expected net cash flows in a number of invoicing currencies and, all other things being equal, movements in key invoicing currencies will impact Novo Nordisk s operating profit as outlined in the table below. Key invoicing currencies Annual impact on Novo Nordisk s operating profit of a 5% movement in currency Hedging period (months) USD DKK 975 million 12 JPY DKK 200 million 13 CNY DKK 110 million 12* GBP DKK 85 million 12 CAD DKK 55 million 8 * USD used as proxy when hedging Novo Nordisk s CNY currency exposure The financial impact from foreign exchange hedging is included in Net financials. LONG-TERM FINANCIAL TARGETS UPDATE Novo Nordisk introduced four long-term financial targets in 1996 to balance short- and long-term considerations thereby ensuring a focus on shareholder value creation. The targets were subsequently revised and updated on several occasions. Novo Nordisk has now reached the level stipulated in the four long-term financial targets. The target levels have consequently been reviewed and two targets have been updated.

14 statement for 2012 Page 14 of 33 The targets have been revised based on an assumption of a continuation of the current business environment. Significant changes to the business environment, including the structure of the US healthcare system, regulatory requirements, pricing environment, competitive environment, healthcare reforms and exchange rates, may significantly impact the time horizon for achieving the long-term targets or require them to be revised. PERFORMANCE AGAINST LONG-TERM FINANCIAL TARGETS Result 2012 Average * Previous target Updated target Operating profit growth 32% 27% 15% 15% Operating margin 38% 32% 35% 40% Operating profit after tax to net operating assets 99% 65% 90% 125% Cash to earnings 87% Cash to earnings (three-year average) 104% 108% 90% 90% *Calculated as a simple average The target level for operating profit growth remains at 15% on average. The target still allows for deviations in individual years if necessitated by business opportunities, market conditions or exchange rate movements. The target level for operating margin is increased from 35% to 40%. This is expected to be enabled by continued robust sales growth coupled with gross margin expansion from both product mix and pricing, as well as further productivity improvements in the manufacturing areas. For non-production-related activities, the operating margin expansion is expected to be supported by a modest development in administrative costs and scale advantages within sales and marketing, whereas continued investment is envisioned for research and development activities, which are expected to grow in line with sales. The target level for operating profit after tax to net operating assets is increased from 90% to 125%. The raised target reflects the expectation of a continued robust operating profit growth combined with a stable effective tax rate and relatively limited increase in net operating assets. The target level for the cash-to-earnings ratio is maintained at 90%, as expected continued growth in International Operations and Region China will gradually impact working capital requirements. As previously, this target will be pursued looking at the average over a three-year period. RESEARCH & DEVELOPMENT UPDATE DIABETES CARE: INSULIN AND GLP-1 Tresiba and Ryzodeg regulatory update The regulatory reviews of Tresiba (insulin degludec) and Ryzodeg (insulin degludec/insulin aspart) continue to progress. Since the first regulatory submissions in

15 statement for 2012 Page 15 of 33 EU and US announced in September 2011, Novo Nordisk has filed for regulatory approval for Tresiba and Ryzodeg in nine additional countries. Further to these, Novo Nordisk submitted Tresiba for regulatory review in Argentina in December As previously announced, the European Commission granted marketing authorisations for Tresiba and Ryzodeg for the treatment of diabetes in adults in January The authorisations cover all 27 European Union member states. Novo Nordisk expects to launch Tresiba in the UK and Denmark during the first half of 2013 and in other European markets throughout the rest of 2013 and Ryzodeg is currently expected to be launched approximately one year after Tresiba. As previously announced, the Japanese Ministry of Health, Labour and Welfare approved Ryzodeg for the treatment of diabetes in December In Japan, price negotiations for Tresiba continue and are expected to be completed in the first quarter of The exact launch timing for Ryzodeg is to be decided upon following the Tresiba price listing. As previously announced, the Endocrinologic and Metabolic Drugs Advisory Committee of the United States Food and Drug Administration (FDA) met in November 2012 to discuss the New Drug Applications (NDA) for Tresiba and Ryzodeg. At the meeting, the FDA asked the panel members to vote on whether a cardiovascular outcomes trial should be conducted and whether sufficient safety and efficacy data had been provided to support marketing of Tresiba and Ryzodeg. The committee unanimously recommended that a cardiovascular outcomes trial should be conducted for Tresiba and voted eight to four in favour of approving the products with a post-approval outcomes trial commitment. The FDA has not informed Novo Nordisk of when it expects to complete its review of the NDAs. Phase 3a completed for IDegLira (NN9068) As announced in December 2012, DUAL II, the second and final phase 3a trial with IDegLira, a fixed-ratio combination of insulin degludec and liraglutide, for the treatment of patients with type 2 diabetes, has been completed. Together with the results from DUAL I, for which headline data were announced in August 2012, DUAL II reconfirms the competitive profiles of Tresiba and Victoza, and the trials show that patients can realise the combined benefits from each of the components in the combination product. Novo Nordisk is planning regulatory filing for IDegLira in the EU mid-2013 and in the US during 2013 pending marketing authorisation of Tresiba. FIAsp approved for phase 3a development (NN1218) As announced in December 2012, the phase 1 proof of-concept trials for a number of different formulations of insulin aspart have now been completed. The new formulation of insulin aspart selected for phase 3a development has a faster onset of appearance and thereby mimics the endogenous insulin secretory response in a non-diabetic individual more closely than NovoRapid (NovoLog in the US). This potentially enables more flexible insulin administration in connection with meals, as well as improved post-prandial glucose control. Novo Nordisk expects to initiate the phase 3a programme, onset, expected to include around 3,000 people with type 1 or type 2 diabetes, towards the end of 2013.

16 statement for 2012 Page 16 of 33 Phase 3a development to be initiated for liraglutide as an adjunct to insulin therapy in people with type 1 diabetes (NN9211) Novo Nordisk has completed a clinical pharmacology trial investigating the use of liraglutide as an adjunct to insulin therapy in people with type 1 diabetes, LATIN T1D (Liraglutide as adjunct therapy to insulin in people with type 1 diabetes). The trial showed that liraglutide treatment as an adjunct to insulin neither compromises the glucagon response during hypoglycaemia, nor other counter-regulatory responses. Further, both the daily insulin requirements and body weight after four weeks of treatment had decreased in a dose-dependent manner. The clinical data from this trial confirmed the safety profile of liraglutide seen in type 2 diabetes when used in people with type 1 diabetes together with insulin. Novo Nordisk expects to initiate the phase 3a programme, ADJUNCT which includes around 2,000 people with type 1 diabetes, in the second half of First phase 1 trial initiated for LAI287, a new long-acting insulin (NN1436) Novo Nordisk has initiated the first phase 1 trial with LAI287, a new long-acting insulin analogue with potential for once-weekly dosing. The trial will investigate the safety, tolerability, pharmacokinetics and pharmacodynamics of LAI287 in approximately 80 healthy volunteers and people with type 1 diabetes. BIOPHARMACEUTICALS: HAEMOSTASIS NovoThirteen launched in Canada and Denmark and resubmitted to the FDA in the US NovoThirteen (Tretten in Canada), Novo Nordisk s recombinant factor XIII product, has now been launched in Canada and Denmark. In the US, Novo Nordisk has resubmitted the application for approval to the FDA following the receipt of a complete response letter, which was announced in February Turoctocog alfa also submitted for regulatory approval in Japan, Australia and Switzerland (NN7008) In addition to the previously announced submission in EU and the US, Novo Nordisk has submitted turoctocog alfa for regulatory review in Japan, Australia and Switzerland. Turoctocog alfa is a new recombinant coagulation factor VIII intended for prevention and treatment of bleeding in people with haemophilia A. BIOPHARMACEUTICALS: INFLAMMATION Phase 2a trial with anti-nkg2d (NN8555) discontinued in patients with Crohn s Disease As previously announced, Novo Nordisk has decided to discontinue further development of anti-nkg2d as a treatment for Crohn s disease following an interim futility analysis of an ongoing double-blinded, randomised, placebo-controlled phase 2a trial. The analysis was performed on the basis of 74 randomised patients and did not meet the pre-specified criteria for efficacy, and the study has therefore been discontinued. No safety concerns were identified in the trial.

17 statement for 2012 Page 17 of 33 SUSTAINABILITY HIGHLIGHTS FROM THE CONSOLIDATED SOCIAL AND ENVIRONMENTAL STATEMENTS FOR 2012 SOCIAL PERFORMANCE % change 2011 to 2012 Patients Patients reached with diabetes care products (million) (estimate) n/a n/a n/a 10% Donations (DKK million) % Employees Employees (average FTEs) 33,061 31,499 29,423 27,985 26,069 5% Employee turnover 9.1% 9.8% 9.1% 8.3% 12.1% Working the Novo Nordisk Way n/a n/a n/a Diverse senior management teams 66% 62% 54% 50% 43% Assurance Relevant employees trained in business ethics 99% 99% 98% n/a n/a Warning Letters and re-inspections ENVIRONMENTAL PERFORMANCE Resources Energy consumption (1,000 GJ) 2,433 2,187 2,234 2,246 2,533 11% Water consumption (1,000 m3) 2,475 2,136 2,047 2,149 2,684 16% Emissions and waste CO 2 emissions from energy consumption (1,000 tons) The accounting policy has been updated in line with WHO definition, and historical data are restated accordingly. 2. Comprises donations to the World Diabetes Foundation and the Novo Nordisk Haemophilia Foundation only. 3. Employee assessment measured on a scale of 1-5, with 5 being the best. 4. The accounting policy has been updated and historical data are restated accordingly. SOCIAL AND ENVIRONMENTAL PERFORMANCE 2012 Social Patients Novo Nordisk estimates, based on the WHO standard data for daily insulin doses, that it provides therapeutic treatments for approximately 23 million people with diabetes worldwide. Of the 371 million people with diabetes, it is known that a large proportion is undiagnosed. About 80% of all people with diabetes live in low- and middle-income countries where provision of adequate healthcare is often absent or insufficient. Novo Nordisk s updated global access to diabetes care strategy aims at closing the gap between health needs and healthcare and has established a goal of reaching an estimated 40 million patients with medical care by Efforts to expand access to medical care include financial support through the World Diabetes Foundation (WDF) and the Novo Nordisk Haemophilia Foundation (NNHF). In 2012, the company donated DKK 64 million to the WDF, which invests in sustainable initiatives to build healthcare capacity that improves prevention and treatment of

18 statement for 2012 Page 18 of 33 diabetes in developing countries. Donations to the NNHF amounted to DKK 20 million for capacity-building as well as improved awareness, diagnosis and registries within haemophilia in developing and emerging countries. Employees In 2012, the average number of full-time employees was 33,061, an increase of 5% compared to At the end of 2012, Novo Nordisk employed a total of 34,731 people, corresponding to 34,286 full-time positions. The growth in the number of employees is driven by the expansion of the sales and marketing organisation in the regions North America and International Operations as well as in the global Research and Development organisation. Employee turnover decreased from 9.8% in 2011 to 9.1%. The annual employee survey, evoice, measures the extent to which the organisation is working in accordance with the Novo Nordisk Way. In 2012, as in 2011, the consolidated score was 4.3, measured on a scale of 1 to 5, with 5 being the best score. Assurance Novo Nordisk has received a Warning Letter dated 12 December 2012 from the US Food and Drug Administration (FDA) following a current Good Manufacturing Practice (cgmp) inspection of an aseptic filling facility in Bagsværd, Denmark. The facility inspection took place on March 2012, and Novo Nordisk submitted its response to the inspection findings by the FDA in April In the Warning Letter, the FDA cites two specific violations. Novo Nordisk takes the observed violations very seriously and is committed to taking the appropriate steps to address the concerns raised by the agency. The company submitted its response to the Warning Letter on 28 December. Novo Nordisk does not expect the warning letter to have an impact on products currently marketed in the US. Environmental Energy Energy consumed for production increased in 2012 by 11%, while water consumption increased by 16%. This development is directly linked to the increased production volume output. CO 2 CO 2 emissions from energy consumption for production increased by 30% in 2012 compared to The increase is driven by the phase-in of a new filling plant in Tianjin, China and a larger production volume at the main production site in Kalundborg, Denmark. In total, CO 2 emissions from energy consumption have decreased by 44% compared to the 2004 baseline, and the company remains on track to achieve its longterm target of an absolute 10% reduction by EQUITY Total equity was DKK 40,632 million at the end of 2012, equivalent to 61.9% of total assets, compared to 57.9% at the end of Please refer to appendix 5 for further elaboration of changes in equity during 2012.

19 statement for 2012 Page 19 of share repurchase programme On 9 November 2012, Novo Nordisk announced a DKK 1.5 billion share repurchase programme as part of the overall DKK 12 billion programme to be executed during a 12- month period starting 2 February The purpose of the programme was to reduce the company s share capital. Under the programme announced on 9 November 2012, Novo Nordisk has repurchased B shares for an amount of DKK 1.5 billion in the period from 9 November 2012 to 29 January 2013 when the programme was concluded. As of 29 January 2013, Novo Nordisk has repurchased 14,082,750 shares corresponding to a total value of DKK 12.0 billion and has thereby completed the DKK 12 billion programme employee share programme Under an employee share-savings programme, approximately 7,500 employees in Denmark have purchased a total of 148,702 shares. The shares were purchased at a price of DKK 920 the average market price on 5 December The company does not incur any costs related to this programme. Holding of treasury shares and reduction of share capital As of 29 January 2013, Novo Nordisk A/S and its wholly owned affiliates owned 18,442,009 of its own B shares, corresponding to 3.3% of the total share capital. In order to maintain capital structure flexibility, the Board of Directors will, at the Annual General Meeting in 2013, propose a reduction in the B share capital from DKK 452,512,800 to DKK 442,512,800 by cancelling 10,000,000 B shares of DKK 1 from the company s own holdings of B shares at a nominal value of DKK 10,000,000, equivalent to 1.8% of the total share capital. After implementation of the share capital reduction, the company s share capital will amount to DKK 550,000,000; divided into an A share capital of DKK 107,487,200 and a B share capital of DKK 442,512,800. Proposed dividend At the Annual General Meeting on 20 March 2013, the Board of Directors will propose a 29% increase in dividend to DKK per share of DKK 1, corresponding to a payout ratio of 45.3%. For 2011, the payout ratio was also 45.3%. No dividend will be paid on the company s holding of treasury shares share repurchase programme The Board of Directors has approved a new share repurchase programme of up to DKK 14 billion to be executed during the coming 12 months. As part of the up to DKK 14 billion share repurchase programme, a new share repurchase programme has now been initiated in accordance with the provisions of the European Commission's Regulation No 2273/2003 of 22 December 2003 (The Safe Harbour Regulation). For that purpose, Novo Nordisk has appointed Skandinaviska Enskilda Banken, Denmark, as lead manager to execute a part of its share repurchase programme independently and without influence from Novo Nordisk. The purpose of the programme is to reduce the company's share capital. Under the agreement, Skandinaviska Enskilda Banken, Denmark, will repurchase shares on behalf of Novo Nordisk for an amount of up to DKK 3.0 billion during the trading period starting today, 31 January and ending on 29 April A maximum of 93,931 shares can be bought during one single trading day, equal to 20% of the average daily trading volume of Novo Nordisk B shares on NASDAQ OMX Copenhagen during the month of December 2012, and a maximum of 5,541,929 shares in total can be bought during the trading period. At least once every seven trading days, Novo Nordisk will issue an announcement in respect of the transactions made under the repurchase programme.

20 statement for 2012 Page 20 of restricted stock unit programme 2013 marks the 90 th anniversary of the first diabetes patients being treated with insulin from the company that is now Novo Nordisk. To commemorate the occasion, employees in the company will be offered 20 restricted stock units. The programme includes all employees as per 1 January 2013, apart from employees in the separately operating affiliates NNE Pharmaplan and NNIT. A restricted stock unit gives the right to receive one Novo Nordisk B share free of charge on 1 April 2016 subject to continued employment and average sales growth of at least 5% per year measured in DKK in the period It is estimated that 474,000 shares will be needed for the programme. The costs of the programme approximately DKK 440 million will be amortised over the period 1 January 2013 to 1 April No dividends will be paid on the restricted stock units and the holders will have no voting rights until the restricted stock units are converted to shares in CORPORATE GOVERNANCE Changes in Novo Nordisk s management Effective 31 January 2013, Novo Nordisk s Executive Management is expanded with two new members: Jakob Riis is appointed executive vice president with responsibility for Marketing & Medical Affairs, and Lars Fruergaard Jørgensen is appointed executive vice president with responsibility for IT, Quality & Development. Both are today senior vice presidents in Novo Nordisk with responsibility for Marketing & Medical Affairs and IT & Development, respectively. This change lifts the direct responsibility for these critical functions into Executive Management, while also broadening the group of senior managers with executive experience. The biographies of the newly appointed executive vice presidents can be found on novonordisk.com. Effective 1 March, four corporate vice presidents in Novo Nordisk s US affiliate have been appointed senior vice presidents and members of the company s global Senior Management Board. The promotions reflect the increasing size, complexity and strategic importance of Novo Nordisk s business and development pipeline in the US. Remuneration principles for executives Novo Nordisk s remuneration principles aim to attract, retain and motivate members of Executive Management. Remuneration levels are designed to be competitive and to align the interest of the executives with shareholder interests. Long-term, share-based incentive programme for senior management As from 2004, members of Novo Nordisk's Executive Management (five in 2012) and other members of the Senior Management Board (26 in 2012) have participated in a -based incentive programme where a proportion of the calculated shareholder value creation has been allocated to a joint pool for the participants. For members of Executive Management and other members of the Senior Management Board, the joint pool operates with a yearly maximum allocation per participant equal to eight months fixed base salary plus pension contribution. Once the joint pool has been approved by the Board of Directors, the total cash amount is converted into Novo Nordisk B shares at market price. The market price is calculated as the average trading price for Novo Nordisk B shares on NASDAQ OMX Copenhagen in the open trading window following the release of the full-year financial results for the year preceding the