Novo Nordisk - Prepared by Imprima

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 6-K


REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

January 31, 2013


        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-_____________________

 


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Financial statement for 2013

30 January 2014

Novo Nordisk increased operating profit in local currencies by 15% in 2013
Sales growth of 12% in local currencies driven by growth in sales of Victoza®, NovoRapid® and Levemir®

Sales increased by 12% in local currencies and by 7% to 83.6 billion in Danish kroner.
Sales of modern insulins increased by 14% (10% in Danish kroner).
Sales of Victoza® increased by 27% (23% in Danish kroner).
Sales of Biopharmaceuticals increased by 12% (6% in Danish kroner).
Sales in North America increased by 18% (14% in Danish kroner).
Sales in International Operations increased by 17% (8% in Danish kroner).
Sales in Region China increased by 13% (12% in Danish kroner).

Gross margin improved by 0.4 percentage point in Danish kroner to 83.1%, reflecting a favourable price and product mix development partly offset by a 0.3 percentage point negative currency impact.

Operating profit increased by 15% in local currencies and by 7% in Danish kroner to DKK 31.5 billion.

Net profit increased by 18% to DKK 25.2 billion. Diluted earnings per share of DKK 0.20 increased by 20% to DKK 9.35.

In December 2013, Novo Nordisk filed for regulatory approval of a 3 mg dose of liraglutide, the once-daily human GLP-1 analogue, as a treatment for obesity with the regulatory agencies in both the US and in EU.

Kåre Schultz is appointed president & COO, a role in which he will work closely with CEO Lars Rebien Sørensen on matters relevant to the company’s senior leadership and the Board of Directors.

For 2014, sales growth measured in local currencies is expected to be 8-11%, whereas operating profit growth measured in local currencies is expected to be around 10%.

At the Annual General Meeting on 20 March 2014, the Board of Directors will propose a 25% increase in dividend to DKK 4.50 per share of DKK 0.20. The Board of Directors has furthermore decided to initiate a new 12 months share repurchase programme of up to DKK 15 billion.

Lars Rebien Sørensen, president and CEO: “We are pleased with Novo Nordisk’s financial performance in 2013, a year which also posed challenges for us. The double-digit sales growth has again in 2013 been driven by robust growth of our portfolio of modern insulins and Victoza®. For Tresiba®, the Complete Response Letter in the US was a disappointment, but in markets where we have launched the product, performance has been encouraging.”


Novo Nordisk A/S
Investor Relations
Novo Allé
2880 Bagsværd
Denmark
Telephone:
+45 4444 8888
www.novonordisk.com
CVR No:
24 25 67 90
 
Company announcement No 5 / 2014

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Financial statement for 2012
Page 2 of 35

 

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 38,000 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 30 January 2014 at 13.00 CET, corresponding to 7.00 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 available approximately one hour before on the same page.

WEB CAST DETAILS
On 3 February 2014 at 13.30 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
3 February 2014 PDF version of the Annual Report 2013
5 February 2014 Deadline for the company’s receipt of shareholder proposals for the
  Annual General Meeting 2014
14 February 2014 Printed version of the Annual Report 2013
20 March 2014 Annual General Meeting 2014
1 May 2014 Financial statement for the first three months of 2014
7 August 2014 Financial statement for the first six months of 2014
30 October 2014 Financial statement for the first nine months of 2014
30 January 2015 Financial statement for 2014

CONTACTS FOR FURTHER INFORMATION
Media:
Mike Rulis
+45 4442 3573
mike@novonordisk.com
Ken Inchausti (US)
+1 609 514 8316
kiau@novonordisk.com
 
 
 
Investors:
Kasper Roseeuw Poulsen
+45 3079 4303
krop@novonordisk.com
Frank Daniel Mersebach
+45 3079 0604
fdni@novonordisk.com
Lars Borup Jacobsen
+45 3075 3479
lbpj@novonordisk.com
Daniel Bohsen
+45 3079 6376
dabo@novonordisk.com
Jannick Lindegaard (US)
+1 609 235 8567
jlis@novonordisk.com

Further information about Novo Nordisk is available on novonordisk.com.

 

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Financial statement for 2012
Page 3 of 35

 

LIST OF CONTENTS    
     
FINANCIAL PERFORMANCE 4
   Consolidated financial statement for 2013 4
   Performance versus long-term financial targets 5
   Sales development 6
   Development in costs and operating profit 10
   Net financials and tax 11
   Capital expenditure and free cash flow 11
   Key developments in the fourth quarter of 2013 12
     
OUTLOOK 13
     
RESEARCH & DEVELOPMENT UPDATE 14
   Diabetes care: Insulin and GLP-1 14
   Biopharmaceuticals: Haemophilia 16
   Biopharmaceuticals: Human growth hormone 17
   Biopharmaceuticals: Inflammation 18
     
SUSTAINABILITY 19
   Highlights from the Consolidated social and environmental statements for 2013 19
   Social performance 19
   Environmental performance 20
     
EQUITY 21
CORPORATE GOVERNANCE 23
LEGAL UPDATE 25
MANAGEMENT STATEMENT 27
     
FINANCIAL INFORMATION 28
   Appendix 1: Quarterly numbers in DKK 28
   Appendix 2: Income statement and statement of comprehensive income 29
   Appendix 3: Balance sheet 30
   Appendix 4: Statement of cash flows 31
   Appendix 5: Statement of changes in equity 32
   Appendix 6: Regional sales split 33
   Appendix 7: Key currency assumptions 34
   Appendix 8: Quarterly numbers in USD (additional information) 35

 

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Financial statement for 2012
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FINANCIAL PERFORMANCE

CONSOLIDATED FINANCIAL STATEMENT FOR 2013

The Board of Directors and Executive Management have approved the Annual Report 2013 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 information for 2013. This financial statement is prepared in accordance with the recognition and measurement requirements of the International Financial 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 2013 as well as those applied in the audited consolidated financial statements in the Annual Report 2012.













PROFIT AND LOSS
2013 2012 2011 2010 2009 % change 2012 to 2013
DKK million












Sales
83,572 78,026 66,346 60,776 51,078 7%












Gross profit
69,432 64,561 53,757 49,096 40,640 8%
Gross margin
83.1%   82.7%   81.0%   80.8%   79.6%  
 
Sales and distribution costs
23,380 21,544 19,004 18,195 15,420 9%  
Percentage of sales
28.0%   27.6%   28.6%   29.9%   30.2%  
 
Research and development costs
11,733 10,897 9,628 9,602 7,864 8%  
Percentage of sales
14.0%   14.0%   14.5%   15.8%   15.4%  
 
Administrative costs
3,508 3,312 3,245 3,065 2,764 6%  
Percentage of sales
4.2%   4.2%   4.9%   5.0%   5.4%  
 
Licence fees and other operating income
682 666 494 657 341 2%  












Operating profit
31,493 29,474 22,374 18,891 14,933 7%
Operating margin
37.7%   37.8%   33.7%   31.1%   29.2%  
 
Net financials
1,046 (1,663)   (449)   (605)   (945)   N/A












Profit before income taxes
32,539 27,811 21,925 18,286 13,988 17%












Income taxes
7,355 6,379 4,828 3,883 3,220 15%  
Effective tax rate
22.6%   22.9%   22.0%   21.2%   23.0%  
                         
Net profit
25,184 21,432 17,097 14,403 10,768 18%
Net profit margin
30.1%   27.5%   25.8%   23.7%   21.1%  












 

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Financial statement for 2012
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CONSOLIDATED FINANCIAL STATEMENT 2013 – CONTINUED













 
OTHER KEY NUMBERS 2013 2012 2011 2010 2009 % change 2012
to 2013
(Amounts below in DKK million except earnings per share and dividend per share)  












Depreciation, amortisation and impairment losses 2,799 2,693 2,737 2,467 2,551 4%  
Capital expenditure 3,207 3,319 3,003 3,308 2,631 (3%)  
 
Net cash generated from operating activities 25,942 22,214 21,374 19,679 15,378 17%  
Free cash flow 22,358 18,645 18,112 17,013 12,332 20%  
                         
Total assets 70,337 65,669 64,698 61,402 54,742 7%  
Equity 42,569 40,632 37,448 36,965 35,734 5%  
Equity ratio 60.5%   61.9%   57.9%   60.2%   65.3%  
 
Diluted earnings per share / ADR (in DKK) 1) 9.35 7.77 6.00 4.92 3.56 20%  
Dividend per share (in DKK) 1) 2) 4.50 3.60 2.80 2.00 1.50 25%  
                         
Payout ratio 3) 47.1%   45.3%   45.3%   39.6%   40.9%  

1) Comparative figures have been restated to reflect the change in trading unit from DKK 1 to DKK 0.20.
2) Proposed dividend for the financial year 2013.
3) Dividend for the year as a percentage of net profit.


 

PERFORMANCE VERSUS LONG-TERM FINANCIAL TARGETS













PERFORMANCE AGAINST LONG-TERM FINANCIAL TARGETS 2013 2012 2011 2010 2009 Target
                         












Operating profit growth 6.9%   31.7%   18.4%   26.5%   20.7%   15%












Operating profit margin 37.7%   37.8%   33.7%   31.1%   29.2%   40%












Operating profit after tax to net
operating assets 97.2%   99.0%   77.9%   63.6%   47.3%   125%












Cash to earnings 88.8%   87.0%   105.9%   118.1%   114.5%  
Cash to earnings (three-years average) 93.9%   103.7%   112.8%   115.6%   111.5%   90%












 

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Financial statement for 2012
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SALES DEVELOPMENT
Sales increased by 12% measured in local currencies and by 7% in Danish kroner. This is in line with the latest guidance of ‘11-13% growth in local currencies’ provided in connection with the quarterly announcement in October 2013. 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 9% respectively. Sales growth was realised within both diabetes care and biopharmaceuticals, with the majority of growth originating from the modern insulins and Victoza®.









 
Sales
2013
DKK
million
Growth
as reported
Growth
in local
currencies
Share of
growth
in local
currencies








The diabetes care segment
   - NovoRapid ® 16,848 7% 12% 20%
   - NovoMix ® 9,759 4% 10% 10%
   - Levemir ® 11,546 18% 22% 24%
                 
Modern insulins 38,153 10%   14%   54%  
                 
Human insulins 10,869 (4%)   0%   0%  
                 
Victoza® 11,633 23%   27%   28%  
                 
Protein-related products 2,555 2%   9%   2%  
                 
Oral antidiabetic products 2,246 (19%)   (16%)   (5%)  
 
Diabetes care total 65,456 8% 12% 79%








The biopharmaceuticals segment
                 
NovoSeven® 9,256 4%   8%   7%  
                 
Norditropin® 6,114 7%   16%   10%  
                 
Other products 2,746 9%   15%   4%  
 
Biopharmaceuticals total 18,116 6% 12% 21%








Total sales 83,572 7% 12% 100%








In the following sections, unless otherwise noted, market data are based on moving annual total (MAT) from November 2013 and November 2012 provided by the independent data provider IMS Health.

DIABETES CARE SALES DEVELOPMENT
Sales of diabetes care products increased by 12% measured in local currencies and by 8% in Danish kroner to DKK 65,456 million. Novo Nordisk is the world leader in diabetes care and now holds a global value market share of 27% compared to 26% at the same time the previous year.

Insulins and protein-related products
Sales of insulins and protein-related products increased by 11% in local currencies and by 6% in Danish kroner to DKK 51,577 million. Measured in local currencies, sales

 

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Financial statement for 2012
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growth was driven by North America, International Operations and Region China. Novo Nordisk is the global leader with 48% of the total insulin market and 46% of the market for modern insulin and new-generation insulin, both measured in volume.

The roll-out of Tresiba® (insulin degludec), the once-daily new-generation insulin with an ultra-long duration of action, continues to progress. Launch activities are proceeding as planned and feedback from patients and prescribers is encouraging. Tresiba® has been launched in eight countries with 20 more countries expected to launch during 2014. In the countries where Tresiba® is reimbursed on a similar level as insulin glargine, it has steadily grown its share of the basal insulin market. In these countries, Tresiba® now represents around 10% of the basal insulin market measured in monthly value market share. In the markets where Tresiba® has been launched with restricted market access compared to insulin glargine, market penetration remains modest.

Sales of modern insulins increased by 14% in local currencies and by 10% in Danish kroner to DKK 38,153 million. North America accounted for two-thirds of the growth, followed by International Operations and Region China. Sales of modern insulins now constitute 78% 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 the modern insulin and new-generation insulin market
   








November
2013
November
2012
November
2013
November
2012








Global 48% 49% 46% 46%
                 
USA* 40%   41%   39%   38%  
                 
Europe 49%   50%   49%   50%  
                 
International Operations** 56%   58%   53%   55%  
                 
China*** 59%   61%   64%   65%  
                 
Japan 52%   55%   48%   51%  








Source: IMS, November 2013 data. *: US trend data reflect changes to IMS data collection coverage and methodology **: 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 insulins and protein-related products in North America increased by 18% in local currencies and by 14% in Danish kroner. Sales growth reflects a continued positive contribution from pricing in the US, solid market penetration of all three modern insulins, NovoLog®, Levemir® and NovoLog® Mix 70/30. 55% of Novo Nordisk’s modern insulin volume in the US is used in the prefilled device FlexPen®.

Europe
Sales of insulins and protein-related products in Europe remained unchanged in local currencies and decreased by 1% in Danish kroner. The development reflects that the declining human insulin sales are offset by the continued progress for Levemir® and NovoRapid®. Furthermore, sales are impacted by a low volume growth of the insulin market, around 3%, as well as the implementation of pricing reforms in several European

 

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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 insulins and protein-related products in International Operations increased by 15% in local currencies and by 6% in Danish kroner. The growth, which is positively impacted by the timing in tenders and shipments in a number of countries, is driven by all three modern insulins and a contribution from human insulins. Currently, 59% of Novo Nordisk’s insulin volume in the major private markets is used in devices.

Region China
Sales of insulins and protein-related products in Region China increased by 15% in local currencies and by 14% in Danish kroner. 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®.

Japan & Korea
Sales of insulins and protein-related products in Japan & Korea decreased by 3% in local currencies and by 22% measured in Danish kroner. The sales development reflects a stagnant Japanese insulin volume market and the negative impact of a challenging competitive environment, which is only partly offset by the robust uptake of Tresiba®. The device penetration in Japan remains high with 98% of Novo Nordisk’s insulin volume being used in devices, primarily FlexPen®.

Victoza® (GLP-1 therapy for type 2 diabetes)
Victoza® sales increased by 27% in local currencies and by 23% in Danish kroner to DKK 11,633 million, reflecting robust sales performance driven by North America, Europe and International Operations. Victoza® holds the global market share leadership in the GLP-1 segment with a 71% value market share compared to 68% in 2012. The GLP-1 segment’s value share of the total diabetes care market has increased to 6.9% compared to 5.9% in 2012.









GLP-1 MARKET SHARES
(value, MAT)
GLP-1 share of total
diabetes care market
Victoza® share
of GLP-1 market
             








November November November November
2013 2012 2013 2012








Global 6.9% 5.9% 71% 68%
                 
USA* 8.6%   7.3%   67%   62%  
                 
Europe 7.6%   6.7%   78%   76%  
                 
International Operations** 2.8%   3.0%   75%   80%  
                 
China*** 0.6%   0.5%   74%   45%  
                 
Japan 2.1%   2.3%   71%   77%  








Source: IMS, November 2013 data. *: US trend data reflect changes to IMS data collection coverage and methodology **: 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.

 

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North America
Sales of Victoza® in North America increased by 31% in local currencies and by 27% in Danish kroner. This reflects a continued expansion of the GLP-1 class, which represents 8.6% of the total US diabetes care market in value compared to 7.3% in 2012. Despite the launch of a competing product in 2012, Victoza® continues to drive the US GLP-1 market expansion and is the GLP-1 market leader, now with a 67% value market share compared to 62% a year ago.

Europe
Sales in Europe increased by 20% in local currencies and by 19% in Danish kroner. Sales growth is primarily driven by France, the UK, Spain and Italy. In Europe, the GLP-1 class’ share of the total diabetes care market in value has increased to 7.6% compared to 6.7% in 2012. Victoza® is the GLP-1 market leader with a value market share of 78%.

International Operations
Sales in International Operations increased by 31% in local currencies and by 21% in Danish kroner. Sales growth is primarily driven by a number of Middle Eastern countries, Brazil and Argentina. The GLP-1 class’ share of the diabetes care market in value has contracted to 2.8% compared to 3.0% in 2012. This reflects a decline in the class’ share of the total diabetes care market in Brazil following a strong initial penetration. Outside Brazil, the class continues to expand. Victoza® is the GLP-1 market leader across International Operations with a value market share of 75%.

Region China
Sales in Region China increased by 84% in local currencies and by 83% in Danish kroner. The GLP-1 class in China is not reimbursed and relatively modest in size. However, its share of the total diabetes care market in value has expanded to 0.6% compared to 0.5% in 2012. Victoza® holds a GLP-1 value market share of 74%.

Japan & Korea
Sales in Japan & Korea decreased by 8% in local currencies and by 27% in Danish kroner. In Japan, the GLP-1 class represents 2.1% of the total diabetes care market value. Victoza® remains the leader in the class with a value market share of 71%.

NovoNorm®/Prandin®/PrandiMet® (oral antidiabetic products)
Sales of oral antidiabetic products decreased by 16% in local currencies and by 19% in Danish kroner to DKK 2,246 million. The negative sales development reflects an impact from generic competition in the US and Europe as well as a changed inventory setup in China.

BIOPHARMACEUTICALS SALES DEVELOPMENT
Sales of biopharmaceutical products increased by 12% measured in local currencies and by 6% in Danish kroner to DKK 18,116 million. Sales growth was primarily driven by North America and International Operations.

 

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NovoSeven® (bleeding disorders therapy)
Sales of NovoSeven® increased by 8% in local currencies and by 4% in Danish kroner to DKK 9,256 million. The market for NovoSeven® remains volatile, and sales growth is primarily driven by North America and International Operations.

Norditropin® (growth hormone therapy)
Sales of Norditropin® increased by 16% in local currencies and by 7% in Danish kroner to DKK 6,114 million. The sales growth is primarily driven by contractual wins, the support programmes that Novo Nordisk offers healthcare professionals and patients as well as the penetration of the prefilled FlexPro® device in North America and furthermore by growth in International Operations. Novo Nordisk is the leading company in the global growth hormone market with a 28% market share measured in volume.

Other biopharmaceuticals
Sales of other products within biopharmaceuticals, which predominantly consist of hormone replacement therapy-related (HRT) products, increased by 15% in local currencies and by 9% in Danish kroner to DKK 2,746 million. Sales growth is driven by North America and reflects a positive impact of pricing and non-recurring adjustments to the provisions for rebates.

DEVELOPMENT IN COSTS AND OPERATING PROFIT
The cost of goods sold grew 5% to DKK 14,140 million, resulting in a gross margin of 83.1% compared to 82.7% in 2012. This development primarily reflects an underlying improvement 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 negatively impacted by around 0.3 percentage point due to the depreciation of key invoicing currencies versus the Danish krone compared to prevailing exchange rates in 2012.

Total non-production-related costs increased by 11% in local currencies and by 8% in Danish kroner to DKK 38,621 million.

Sales and distribution costs increased by 13% in local currencies and by 9% in Danish kroner to DKK 23,380 million. The growth in costs is driven by the expansions of the sales forces and sales and marketing investments in the US, China and selected countries in International Operations as well as costs related to the launch of Tresiba®. The growth percentage for costs has also been impacted by changes to legal provisions in 2012 and 2013.

Research and development costs increased by 9% in local currencies and by 8% in Danish kroner to DKK 11,733 million. Within diabetes care, costs are primarily driven by development costs related to the initiation of the Tresiba® cardiovascular outcome trial, and the ongoing phase 3a trials for both faster-acting insulin aspart and semaglutide, the once-weekly GLP-1 analogue. Within biopharmaceuticals, costs are primarily related to the continued progress of the portfolio of development projects within haemophilia and

 

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the phase 2 trial for anti-IL-20, a recombinant human monoclonal antibody, in rheumatoid arthritis.

Administrative costs increased by 9% in local currencies and by 6% in Danish kroner to DKK 3,508 million. The increase in costs is primarily driven by back-office infrastructure costs to support the expansions of the sales organisations in North America, China and selected countries in International Operations, non-recurring costs related to new offices in Denmark and the US as well as an impact from a cost refund in 2012 of a previously expensed fine related to an import licence for a major market in International Operations.

Licence income and other operating income constituted DKK 682 million compared to DKK 666 million in 2012.

Operating profit increased by 7% in Danish kroner to DKK 31,493 million. In local currencies, the growth was 15%, which is in line with the latest guidance for operating profit growth measured in local currencies for 2013 of ‘12-15%’.

NET FINANCIALS AND TAX
Net financials showed a net income of DKK 1,046 million compared to a net expense of DKK 1,663 million in 2012. The reported net financial income in 2013 is in line with the latest guidance of ‘around DKK 1,100 million’. As of 31 December 2013, foreign exchange hedging gains of around DKK 1,200 million have been deferred for recognition in the income statement in 2014.

In line with Novo Nordisk’s treasury policy, the most significant foreign exchange risks for the group have been hedged, primarily through foreign exchange forward contracts. The foreign exchange result was a net income of DKK 1,146 million compared to a net expense of DKK 1,529 million in 2012. This net income reflects gains on foreign exchange hedging involving especially the Japanese yen and the US dollar due to their depreciation versus the Danish krone compared to the prevailing exchange rates in 2012, which has been partly offset by losses on commercial balances, primarily related to non-hedged currencies.

The effective tax rate for 2013 was 22.6%, which is in line with the latest guidance of a tax rate of ‘around 23%’ for the full year 2013.

CAPITAL EXPENDITURE AND FREE CASH FLOW
Net capital expenditure for property, plant and equipment was DKK 3.2 billion compared to DKK 3.3 billion in 2012. Net capital expenditure was primarily related to new offices in Denmark, filling capacity in Denmark and Russia, additional GLP-1 manufacturing capacity, new diabetes research facilities in Denmark as well as device production facilities in the US and Denmark. Net capital expenditure was in line with previously communicated expectations of ‘around DKK 3.5 billion’.

 

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Free cash flow was DKK 22.4 billion compared to DKK 18.6 billion in 2012, which is in line with the latest guidance of ‘around DKK 22 billion’. The increase of 20% compared to 2012 reflects the growth in net profit of 18% and a lower impact from tax payments in 2013 compared to 2012 related to ongoing transfer pricing disputes which was partly offset by earlier payment of rebate liabilities in the US.

KEY DEVELOPMENTS IN THE FOURTH QUARTER OF 2013
Please refer to appendix 1 for an overview of the quarterly numbers in DKK and appendix 6 for details on sales in the fourth quarter of 2013.

Sales in the fourth quarter of 2013 increased by 10% in local currencies and by 4% in Danish kroner to 21.7 billion compared to the same period in 2012. The growth, which was driven by the three modern insulins and Victoza®, was partly offset by generic competition to Prandin® in the US. From a geographic perspective, North America, International Operations and Region China represented the majority of total sales growth in local currencies.

The gross margin was 84.3% in the fourth quarter of 2013 compared to 85.0% in the same period last year. The decrease of 0.7 percentage point reflects a negative currency impact of 0.8 percentage point which was partly offset by a positive impact from pricing in the US and a favourable product mix development.

In the fourth quarter of 2013, total non-production-related costs increased by 12% in local currencies and by 7% in Danish kroner to DKK 11,123 million compared to the same period last year.

Sales and distribution costs increased by 11% in local currencies and by 5% in Danish kroner in the fourth quarter of 2013 compared to the same period last year. The growth in costs is driven by expansions of the US and Chinese sales forces, sales and marketing investments in the US, China and selected countries in International Operations.

Research and development costs increased by 14% in local currencies and by 11% in Danish kroner in the fourth quarter of 2013 compared to the same period last year. The cost increase is primarily driven by the continued progress of key development projects within diabetes and biopharmaceuticals including the Tresiba® cardiovascular outcomes trial.

Administrative costs increased by 10% in local currencies and by 8% in Danish kroner in the fourth quarter of 2013 compared to the same period last year. The increase is primarily driven by non-recurring costs related to new offices in Denmark as well as back-office infrastructure costs to support the expansions of the sales organisations in North America, China and selected countries in International Operations.

Operating profit in local currencies increased by 9% and decreased by 3% in Danish kroner in the fourth quarter of 2013 compared to the same period last year.

 

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OUTLOOK

OUTLOOK 2014
The current expectations for 2014 are summarised in the table below:



Expectations are as reported,
if not otherwise stated
Expectations
30 January 2014

Sales growth
in local currencies
8-11%
   
as reported
Around 3.5 percentage points lower

Operating profit growth
in local currencies
Around 10%
as reported
Around 5.5 percentage points lower

Net financials
Income of around DKK 750 million
Effective tax rate
Around 22%
Capital expenditure
Around DKK 4.0 billion
Depreciation, amortisation and impairment losses
Around DKK 2.9 billion
Free cash flow
Around DKK 26 billion

Sales growth for 2014 is expected to be 8-11% measured in local currencies. This reflects expectations for continued robust performance for the portfolio of modern insulins and Victoza® as well as a modest sales contribution from Tresiba®. These sales drivers are expected to be partly countered by an impact from a more challenging contract environment in the US, generic competition to Prandin® in the US during the first half of 2014, intensifying competition within both diabetes and biopharmaceuticals as well as 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 3.5 percentage points lower than growth measured in local currencies.

For 2014, operating profit growth is expected to be around 10% measured in local currencies. This reflects a significant increase in costs related to the continued progress of key development projects within diabetes and biopharmaceuticals. In addition, significant costs are expected in relation to sales force expansions and sales and marketing investments in the portfolio of modern insulins and Victoza® in the US, China and selected markets in International Operations as well as the launch of Tresiba® outside the US. Given the current level of exchange rates versus the Danish krone, the reported operating profit growth is now expected to be around 5.5 percentage points lower than growth measured in local currencies.

For 2014, Novo Nordisk expects a net financial income of around DKK 750 million. The current expectation primarily reflects gains associated with foreign exchange hedging contracts following the depreciation of the Japanese yen and the US dollar versus the Danish krone compared to the average prevailing exchange rates in 2013.

The effective tax rate for 2014 is expected to be around 22%.

 

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Capital expenditure is expected to be around DKK 4.0 billion in 2014, primarily related to investments in additional GLP-1 manufacturing capacity, expansion of filling capacity, prefilled device production facilities, construction of new laboratory facilities as well as expansion of protein capacity within the CMC (Chemistry, Manufacturing and Control) organisation. Depreciation, amortisation and impairment losses are expected to be around DKK 2.9 billion. Free cash flow is expected to be around DKK 26 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 2014, and that currency exchange rates, especially the US dollar, will remain at the current level versus the Danish krone. Please refer to appendix 7 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 1,300 million
12
CNY
DKK 220 million
12*
JPY
DKK 145 million
14
GBP
DKK 85 million
12
CAD
DKK 60 million
10



* USD used as proxy when hedging Novo Nordisk’s CNY currency exposure    

The financial impact from foreign exchange hedging is included in ‘Net financials’.

RESEARCH & DEVELOPMENT UPDATE

DIABETES CARE: INSULIN AND GLP-1

Liraglutide 3 mg filed for regulatory approval in the US and EU as a treatment for obesity
As announced in December 2013, Novo Nordisk has filed a New Drug Application (NDA) with the U.S. Food and Drug Administration (FDA) and a Marketing Authorisation Application (MAA) with the European Medicines Agency (EMA). The submissions cover the 3 mg dose of liraglutide, a once-daily human GLP-1 analogue, as an adjunct to a reduced-calorie diet and increased physical activity for chronic weight management in adults with obesity, or who are overweight and have comorbidities.

DUAL™ IV shows benefits of adding IDegLira (NN9068) to sulfonylurea (SU) and metformin treatment
In December 2013, Novo Nordisk completed the phase 3b trial DUAL™ IV with IDegLira, a combination product of insulin degludec (Tresiba®), the once-daily new-generation

 

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basal insulin analogue, with an ultra-long duration of action, and liraglutide (Victoza®), the once-daily human GLP-1 analogue, for the treatment of type 2 diabetes currently under review with EMA.

In DUAL™ IV, 435 people with type 2 diabetes, inadequately controlled on sulfonylurea (SU) alone, or in combination with metformin, were randomised to 26 weeks of treatment with either IDegLira or placebo added to their existing oral anti-diabetic therapy.

From a baseline HbA1c of 7.9%, people randomised to IDegLira achieved a statistically significantly greater average reduction in HbA1c of 1.4% compared to 0.5% for those treated with placebo. Close to 80% of the people using IDegLira achieved the HbA1c treatment target of <7% recommended by the American Diabetes Association (ADA) and the European Association for the Study of Diabetes (EASD), and close to 65% reached HbA1c target of ≤6.5% as recommended by the American Association of Clinical Endocrinologists (AACE). The corresponding numbers for placebo were just below 30% for the ADA and EASD targets and just above 10% for the AACE target.

As would be expected from the use of GLP-1 in combination with an SU, the rate of overall confirmed hypoglycaemia was statistically significantly higher among those treated with IDegLira than placebo. The IDegLira arm experienced a modest weight gain of 0.5 kg compared with a weight loss of 1.0 kg among people treated in the placebo group.

The previously reported safety and tolerability profile of IDegLira was reconfirmed and no apparent differences between IDegLira and placebo were observed with respect to adverse events and standard safety parameters.

Two trials initiated to further document hypoglycaemia profile of Tresiba®
In January 2014, Novo Nordisk initiated the two 64-week randomised, double-blind, cross-over trials, announced at the Capital Markets Day in December 2013, comparing the safety and efficacy of Tresiba® and insulin glargine. The overall purpose of the trials is to document the hypoglycaemia profile in type 1 diabetes and type 2 diabetes respectively, compared to insulin glargine. In one trial, BEGIN™-SWITCH 1, 450 people with type 1 diabetes will be sequentially treated with Tresiba® and insulin glargine in combination with insulin aspart in a randomised order. In the second trial, BEGIN™-SWITCH 2, 670 people with type 2 diabetes will be treated sequentially with Tresiba® and insulin glargine in combination with metformin in a randomised order.

Recruitment in SUSTAIN™ 6 completed and two additional phase 3a trials with semaglutide (NN9535) initiated
In December 2013, Novo Nordisk completed recruitment to SUSTAIN™ 6, a trial collecting cardiovascular outcome and other long-term diabetes-related endpoints with semaglutide in more than 3,000 people that had type 2 diabetes and an elevated cardiovascular risk. Furthermore, as announced at the Capital Markets Day in December 2013, Novo Nordisk has initiated two additional trials in the phase 3a programme

 

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SUSTAIN™ investigating the once-weekly GLP-1 analogue, semaglutide, as a treatment for people with type 2 diabetes. The aim of the trials is to evaluate the efficacy and safety of semaglutide as add-on to oral anti-diabetic drugs for 56 weeks compared to once-weekly exenatide ER (extended release) or once-daily sitagliptin respectively. Novo Nordisk expects to initiate three additional trials in the SUSTAIN™ programme during 2014.

Phase 3a pump trial initiated for faster-acting insulin aspart (NN1218)
In November 2013, Novo Nordisk initiated a 6-week randomised, double-blind trial, evaluating the compatibility and safety of faster-acting insulin aspart and insulin aspart, both administered by pumps providing continuous subcutaneous insulin infusions. The trial is expected to include 40 people with type 1 diabetes. With this initiation, all four trials in the phase 3a programme, onset™, are ongoing.

Initiation of phase 3 for LATIN T1D, liraglutide as adjunct therapy to insulin in type 1 diabetes (NN9211)
As announced at the Capital Markets Day in December 2013, Novo Nordisk has initiated the first phase 3a trial, ADJUNCT ONE™ investigating the efficacy and safety of liraglutide as an adjunct therapy to insulin in people with type 1 diabetes. ADJUNCT ONE™ is expected to include 1,400 people with type 1 diabetes who will be randomised to treatment for 52 weeks with liraglutide or placebo, both in addition to intensification (treat-to-target concept) of the insulin treatment. Novo Nordisk expects to initiate the second phase 3a trial, ADJUNCT TWO™, in the first half of 2014.

Initiation of phase 2 trial for the first oral GLP-1, OG217SC (NN9924)
As announced at the Capital Markets Day in December 2013, Novo Nordisk has initiated the first phase 2 trial with an oral GLP-1, OG217SC. The trial will examine the dose range, dose escalation and efficacy of oral semaglutide administered over 26 weeks compared with placebo in 600 people with type 2 diabetes.

Novo Nordisk receives approval for FlexTouch® in the US
In November 2013, the US FDA approved the prefilled insulin pens NovoLog® FlexTouch® and Levemir® FlexTouch®. FlexTouch® is Novo Nordisk’s latest prefilled insulin pen with a spring-loaded push-button dosing mechanism. FlexTouch® is expected to be launched in the US in the second half of 2014.

BIOPHARMACEUTICALS: HAEMOPHILIA

NovoEight® launched in EU and approved in Japan
In January 2014, following approval by the European Commission in November 2013, Germany was the first country to launch NovoEight®, a recombinant coagulation factor VIII product, for the treatment and prophylaxis of bleeding in patients with haemophilia A.

Furthermore, NovoEight® was approved by the Japanese Ministry of Health, Labor and Welfare in January 2014.

 

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Novo Nordisk expects to launch NovoEight® in a number of European countries and Japan during 2014.

TRETTEN® approved in the US for the treatment of congenital factor XIII A-subunit deficiency
In December 2013, the US FDA approved TRETTEN®, a recombinant factor XIII compound marketed under the brand name NovoThirteen® outside of North America. TRETTEN® is approved for the routine prophylaxis of bleeding in people with congenital factor XIII A-subunit deficiency. It is the only recombinant treatment for congenital FXIII A-subunit deficiency, a rare bleeding disorder with which approximately 1,000 people are diagnosed globally. TRETTEN® is expected to be available in the US early 2014.

Furthermore, in January 2014, the Committee for Medicinal Products for Human Use (CHMP) under the European Medicines Agency (EMA) adopted a positive opinion to recommend an expansion of the current marketing authorisation for NovoThirteen®, covering adult patients with congenital factor XIII A-subunit deficiency, to also cover paediatric patients under the age of 6 years.

Phase 3a surgery trial completed with N9-GP (NN7999)
In January 2014, Novo Nordisk completed the second phase 3 trial with N9-GP, a glycopegylated recombinant factor IX compound for people with haemophilia B. The trial (paradigm™ 3) was open-label, multi-centre and evaluated the efficacy and safety of N9-GP during surgical procedures in 13 people with haemophilia B, in line with regulatory guidelines.

In the trial, a single preoperative dose of 80 U/kg of N9-GP prevented bleeding in all participants during major surgeries with 100% success rate. The preoperative dose maintained the level of FIX activity at the normal range and no additional dose was required during the course of surgery. Clinical efficacy evaluated by haemostatic response was reported as excellent or good in all participants.

In addition, postoperative effective haemostatic coverage was achieved by an average of 2 doses of 40 U/kg N9-GP during the first six days after surgery.

In the trial, N9-GP appeared to have a safe and well-tolerated profile and no participants developed inhibitors.

BIOPHARMACEUTICALS: HUMAN GROWTH HORMONE

Multiple dose trial completed for the once-weekly growth hormone (NN8640) in adults with growth hormone deficiency
A phase 1 trial investigating the safety, tolerability, pharmacokinetics and pharmacodynamics of multiple doses of the once-weekly growth hormone derivative, NN8640, in adults with growth hormone deficiency has been completed. In the trial, NN8640 appeared to have a safe and well-tolerated profile and no safety concerns were identified. The trial confirmed the data from a similar trial in healthy adults and supports the suitability of NN8640 for once-weekly dosing in adults with growth hormone

 

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deficiency. Based on these results and following consultations with regulatory authorities, Novo Nordisk expects to make a final decision of whether to progress NN8640 into phase 3 development for adult treatment around mid-2014.

BIOPHARMACEUTICALS: INFLAMMATION

Anti-NKG2D (NN8555) to resume phase 2 development in Crohn’s Disease
In December 2012, Novo Nordisk decided to discontinue further development of anti-NKG2D as a treatment for Crohn’s disease based on the results from a futility analysis conducted during the trial. Following completion of the single-dose trial and analysis of the full data set, Novo Nordisk has now decided to reinitiate development. In the trial, the primary end-point on effect at week 4 was not achieved. However, the analysis demonstrated a clear biological and clinical effect of anti-NKG2D at later time points. In the trial, anti-NKG2D appeared to be safe and have a well-tolerated profile and Novo Nordisk expects to continue the phase 2 development of anti-NKG2D for Crohn’s disease.

Anti-IL-21 (NN8828) discontinued in rheumatoid arthritis
In January, Novo Nordisk completed a phase 2a trial evaluating the monoclonal antibody anti-IL-21 as a treatment for rheumatoid arthritis (RA). In the trial, the primary endpoint of demonstrating a statistically significant change in disease activity compared to placebo was achieved; however, the magnitude of the treatment effect did not warrant further development. Consequently, Novo Nordisk has decided to discontinue further development of anti-IL-21 for RA. In the trial, anti-IL-21 appeared to have a safe and well-tolerated profile. Novo Nordisk will continue to develop anti-IL-21 as a potential treatment for Crohn’s disease and Systemic Lupus Erythematosus (SLE).

 

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SUSTAINABILITY

HIGHLIGHTS FROM THE CONSOLIDATED SOCIAL AND ENVIRONMENTAL STATEMENTS FOR 2013













SOCIAL PERFORMANCE
2013
2012
2011
2010
2009
%
change
2012 to
2013












Patients
Patients reached with diabetes care
24.3
22.8
20.9
n/a
n/a
7%
products (million)(estimate)
Least developed countries where
35
35
36
33
36
Novo Nordisk sells insulin according
to the differential pricing policy1












Employees
Employees (FTEs)
37,978
34,286
32,136
30,014
28,809
11%
Employee turnover
8.1%
9.1%
9.8%
9.1%
8.3%
Diverse senior management teams
70%
66%
62%
54%
50%












Assurance
Relevant employees trained in business ethics
97%
99%
99%
98%
n/a
Product recalls
6
6
5
5
2
Warning Letters and re-inspections
1
1
0
0
0












                         
ENVIRONMENTAL PERFORMANCE












Resources
Energy consumption (1,000 GJ)
2,572
2,433
2,187
2,234
2,246
6%
Water consumption (1,000 m3)
2,685
2,475
2,136
2,047
2,149
8%












Emissions and waste
CO2 emissions from energy consumption (1,000 tons)
125
122
94
95
166
2%

1. According to the UN there are 49 least developed countries in the world


SOCIAL PERFORMANCE

Patients
Novo Nordisk estimates that the company provides medical treatments for approximately 24.3 million people with diabetes worldwide, showing a 7% increase compared to 2012. The number is calculated based on WHO’s recommended daily doses for diabetes medicines. The growth is driven by sales of insulin and Victoza®.

Of the 382 million people living with diabetes it is estimated that just over half are diagnosed and many of those diagnosed do not receive medical treatment. Novo Nordisk’s global access to diabetes care strategy aims to provide better care for those who need it and currently do not have access to proper diabetes care. In 2013, Novo Nordisk sold human insulin according to the company’s differential pricing policy in 35 of

 

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the 49 Least Developed Countries, as defined by the UN. According to this policy, the price should not exceed 20% of the average prices in the Western world; while the number of countries buying insulin in accordance with this policy has been stable for some years, the volume sold increased by 7%.

Employees
At the end of 2013, the total number of employees was 38,436, corresponding to 37,978 full-time positions, which is an 11% increase compared with 2012. This growth is driven by expansion of the sales and marketing organisation in the regions North America and International Operations as well as significant expansion in Denmark in the research and development organisation and in production.

Employee turnover decreased from 9.1% in 2012 to 8.1%, continuing the positive trend. The average number reflects some geographical variation.

Assurance
Following the receipt in December 2012 of a Warning Letter from the US Food and Drug Administration (FDA), a re-inspection was carried out in August 2013. In January 2014, Novo Nordisk received confirmation from the agency that the violations had been addressed satisfactorily.

In 2013, Novo Nordisk had six instances of product recalls from the market, which is the same level as the previous year. Among one of these, an internal quality control found that a small percentage (0.14%) of certain batches of the company’s prefilled insulin product NovoMix®30 did not meet the specifications for insulin strength. As a result, three million products were recalled from wholesalers, pharmacies and patients in several European markets. The root cause was found to be a production error and has been resolved.

ENVIRONMENTAL PERFORMANCE

Energy and water
In 2013, 2,572,000 GJ energy and 2,685,000 m3 water was consumed at production sites around the world. This equals an increase of 6% and 8% respectively, which is linked to the increased production volume output and new production capacity.

CO2
In 2013, CO2 emissions from production amounted to a total of 125,000 tons. This equals a 2% increase compared to 2012, which is directly linked to the increased consumption of energy. The increase in CO2 emission is less than the increase in energy consumption, because part of the increase in energy consumption happened at sites sourcing less CO2-intensive energy. At the same time, consumption decreased at sites with coal-based energy supply. The company’s target of a 10% absolute reduction in 10 years is expected to be met in 2014.

 

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EQUITY

Total equity was DKK 42,569 million at the end of 2013, equivalent to 60.5% of total assets, compared to 61.9% at the end of 2012. Please refer to appendix 5 for further elaboration of changes in equity.

Five for one stock split implemented in January 2014
As announced in October 2013, Novo Nordisk’s Board of Directors approved a stock split of the Novo Nordisk B shares listed on NASDAQ OMX Copenhagen and of the American Depositary Receipts (ADRs) listed on New York Stock Exchange (NYSE). Consequently, the trading unit of the Novo Nordisk B shares listed on the stock exchange in Copenhagen was changed from DKK 1 to DKK 0.20. The ratio of B shares to ADRs listed on NYSE has remained 1:1. The changes in trading units came into effect on 2 January 2014 for the Novo Nordisk B shares and on 9 January 2014 for the ADRs.

2013 share repurchase programme
On 31 October, as part of an overall programme of DKK 14 billion to be executed during a 12-month period beginning 31 January 2013, Novo Nordisk announced a share repurchase programme of up to DKK 2.8 billion to be executed from 31 October 2013 to 28 January 2014. The purpose of the programme is to reduce the company’s share capital. Under the programme, announced 31 October, Novo Nordisk has repurchased B shares for an amount of DKK 2.8 billion in the period from 31 October 2013 to 28 January 2014. The programme announced on 31 October 2013 was concluded on 28 January 2014.

In addition to the DKK 2.8 billion share repurchase programme announced 31 October 2013, Novo Nordisk repurchased 1 million B shares from employees in November 2013. The transaction amounted to DKK 0.2 billion and was related to the general employee share programme outside of Denmark from 2010. The shares in this transaction were not part of the Safe Harbour repurchase programme, but were part of the overall DKK 14 billion repurchase programme.

As of 28 January 2014, Novo Nordisk A/S has repurchased a total of 72,368,270 B shares equal to a transaction value of DKK 14 billion and has thereby completed the DKK 14 billion programme.

Holding of treasury shares and reduction of share capital
As of 28 January 2014, Novo Nordisk A/S and its wholly owned affiliates owned 107,640,025 of its own B shares, corresponding to 3.9% of the total share capital.

In order to maintain capital structure flexibility, the Board of Directors will, at the Annual General Meeting in 2014, propose a reduction in the B share capital from DKK 442,512,800 to DKK 422,512,800 by cancelling 100,000,000 B shares of DKK 0.20 from the company’s own holdings of B shares at a nominal value of DKK 20,000,000 equivalent to 3.64% of the total share capital. After implementation of the share capital reduction, the company’s share capital will amount to DKK 530,000,000; divided into an A share capital of DKK 107,487,200 and a B share capital of DKK 422,512,800.

 

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Proposed dividend
At the Annual General Meeting on 20 March 2014, the Board of Directors will propose a 25% increase in dividend to DKK 4.50 per share of DKK 0.20, corresponding to a payout ratio of 47.1%. For 2012, the Novo Nordisk payout ratio was 45.3%, whereas Novo Nordisk’s peer group of comparable pharmaceutical companies operated with a payout ratio around 47%. No dividend will be paid on the company’s holding of treasury shares.

2014 share repurchase programme
The Board of Directors has approved a new share repurchase programme of up to DKK 15 billion to be executed during the coming 12 months. As part of the up to DKK 15 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 3.6 billion during the trading period starting today, 30 January and ending on 29 April 2014. A maximum of 583,326 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 2013, and a maximum of 35,582,886 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.

In addition to the agreement with Skandinaviska Enskilda Banken of repurchasing shares of an amount of up to DKK 3.6 billion, Novo Nordisk expects to purchase B-shares from employees in January 2014 for approximately DKK 0.1 billion. The repurchase of shares in this transaction is not part of the Safe Harbour programme, but is part of the overall DKK 15 billion share repurchase programme.

Novo Nordisk’s majority shareholder Novo A/S, a holding company fully owned by the Novo Nordisk Foundation, has informed Novo Nordisk that it intends from 2014 onwards to consider its participation in Novo Nordisk’s share repurchase programme on a case-by-case basis. This implies that Novo A/S may decide not to participate in a share repurchase programme in any individual year.

 

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CORPORATE GOVERNANCE

Changes in Novo Nordisk’s management
Effective 30 January 2014, Chief Operating Officer Kåre Schultz is appointed president & COO. The promotion is a reflection of the importance and complexity of Kåre Schultz’ organisation – Operations – which he has led successfully since 2002. Operations is responsible for Novo Nordisk’s global sales and product supply organisation. In his role as president, Kåre Schultz will work closely with CEO Lars Rebien Sørensen and the other members of Executive Management on matters relevant to the company’s senior leadership and the Board of Directors.

Effective 1 February 2014, Eddie Williams, corporate vice president and head of Biopharmaceuticals in Novo Nordisk’s US affiliate has been appointed senior vice president and member of the company’s global Senior Management Board. The promotion is a reflection of the size and strategic importance of the company’s biopharmaceuticals business 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 (seven in 2013) and other members of the Senior Management Board (28 in 2013) have participated in a performance-based incentive programme. In the programme, a proportion of the calculated economic value added for the calendar year has been allocated to a joint pool for the participants. For 2013, the joint pool operates with a yearly maximum allocation per participant equal to nine months’ fixed base salary plus pension contribution for members of Executive Management and a yearly maximum allocation per participant equal to eight months’ fixed base salary plus pension contribution for other members of the Senior Management Board. 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 performance-based incentive programme. The shares in the joint pool are locked up for a three-year period before they are transferred to the participants. In the lock-up period, the Board of Directors may remove shares from the joint pool in the event of lower than planned value creation in subsequent years.

For 2010, 842,880 shares were allocated to the joint pool and the value at launch of the programme (DKK 64 million) was expensed in 2010. The number of shares in the 2010 joint pool has not subsequently been reduced by the Board of Directors as the financial performance in the following years (2011–2013) reached specified threshold levels. Hence, the original number of shares allocated to the joint pool will, according to the

 

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principles of the scheme, be transferred to 28 current and former members of senior management immediately after the announcement of the 2013 full-year financial results on 30 January 2014.

For 2013, based on an assessment of the economic value generated, the performance of the R&D portfolio and key sustainability projects, the Board of Directors on 29 January 2014 approved the establishment of a joint pool for the financial year of 2013 by allocating a total of 254,417 Novo Nordisk B shares. This allocation amounts to 4.75 months of fixed base salary plus pension contribution per member of Executive Management and 4.2 months of fixed base salary plus pension contribution for senior vice presidents, corresponding to a value at launch of the programme of DKK 51 million, which has been expensed in the 2013 accounts. According to the principles of the programme, the share price used for the conversion of the performance programme to the share pool was the average share price (DKK 202.40 per share of DKK 0.20) for Novo Nordisk B shares on NASDAQ OMX Copenhagen in the 15 days trading window (31 January–14 February 2013) following the release of the Annual Report for 2012 when the programme was approved by the Board of Directors. The allocation under the programme reflects that, while Novo Nordisk exceeded the planned financial performance in 2013, the company did not meet its target of having Tresiba® approved in the US due to the Complete Response Letter from the US Food and Drug Administration in February. This event also entailed that the target for the submission of IDegLira for regulatory approval to the US FDA could not be met. As a consequence of these shortcomings the allocation under the long-term incentive programme has been reduced.

Long-term, share-based incentive programme for corporate vice presidents and vice presidents
As from 2007, a number of key employees below senior management also participate in a share-based programme with similar performance criteria as the programme for senior management. The share-based incentive programme for key employees will, as is the case for the programme for senior management, be based on an annual calculation of economic value added compared to the planned performance for the year. The pool will operate with a maximum contribution per participant equal to four months of fixed base salary. The shares in the pool are also locked up for a three-year period before they may be transferred to the participants.

For 2010, 2,744,680 shares were allocated to a share pool for key employees and the value at launch of the programme (DKK 208 million) has been amortised over the period 2010-2013. The number of shares in the 2010 share pool has not subsequently been reduced by the Board of Directors as the financial performance in the following years (2011–2013) reached specified threshold levels. Hence, 2,475,090 shares will be transferred to 576 employees after the announcement of the 2013 full-year financial results on 30 January 2014. The number of shares to be transferred is lower than the original number of shares allocated to the share pool as some participants have left the company before the release conditions of the programme have been met.

 

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For 2013, based on an assessment similar to the senior management programme, the Board of Directors on 29 January 2014 approved the establishment of a share pool for 2013 for key employees by allocating a total of 622,190 Novo Nordisk B shares. This allocation – which is 52.5 % of the maximum according to the terms of the programme – corresponds to a value at launch of the programme of DKK 126 million using the same share price mechanism as described for the senior management programme. The value of the programme will be amortised over four years. The number of participants for 2013 is approximately 825.

LEGAL UPDATE

Product liability lawsuits related to hormone therapy products
As of 27 January 2014, Novo Nordisk Inc., along with a majority of the hormone therapy product manufacturers in the US, is a defendant in product liability lawsuits related to hormone therapy products. These lawsuits currently involve a total of two individuals who allege use of a Novo Nordisk hormone therapy product. The products (Activella® and Vagifem®) have been sold and marketed in the US since 2000. Until July 2003, the products were sold and marketed exclusively in the US by Pharmacia & Upjohn Company (now Pfizer Inc.). In addition, one individual currently alleges, in relation to similar lawsuits against Pfizer Inc., that she has also used a Novo Nordisk hormone therapy product. Pfizer Inc. has publicly announced the settlement of many of its hormone therapy cases. The continued reduction in pending cases is the result of Pfizer Inc. settling several cases that also involve Novo Nordisk’s products. Currently, Novo Nordisk’s first trial is scheduled for September 2014. Novo Nordisk does not expect the pending claims to have a material impact on its financial position, operating profit and cash flow.

Product liability lawsuits related to Victoza®
Novo Nordisk is per 27 January 2014 named in 34 product liability lawsuits seeking to recover damages for injuries, predominantly related to pancreatic cancer, allegedly experienced by patients who claim to have been prescribed Victoza® and other GLP-1/DPP-IV products. Twenty-four of the Novo Nordisk cases include other defendants, and most cases have been filed in California federal court. Currently, Novo Nordisk does not have any trials scheduled in 2014. Novo Nordisk does not expect the pending claims to have a material impact on its financial position, operating profit and cash flow.

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FORWARD-LOOKING STATEMENTS

Novo Nordisk’s reports filed with or furnished to the US Securities and Exchange Commission (SEC), including this document as well as the company’s Annual Report 2013 and Form 20-F, both expected to be filed with the SEC in February 2014, and written information released, or oral statements made, to the public in the future by or on behalf of Novo Nordisk, may contain forward-looking statements. Words such as ‘believe’, ‘expect’, ‘may’, ‘will’, ‘plan’, ‘strategy’, ‘prospect’, ‘foresee’, ‘estimate’, ‘project’, ‘anticipate’, ‘can’, ‘intend’, ‘target’ and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward-looking statements. Examples of such forward-looking statements include, but are not limited to:

statements of targets, plans, objectives or goals for future operations, including those related to Novo Nordisk’s products, product research, product development, product introductions and product approvals as well as cooperation in relation thereto
statements containing projections of or targets for revenues, costs, income (or loss), earnings per share, capital expenditures, dividends, capital structure, net financials and other financial measures
statements regarding future economic performance, future actions and outcome of contingencies such as legal proceedings
statements regarding the assumptions underlying or relating to such statements.

In this document, examples of forward-looking statements can be found under the headings ‘Outlook’, ‘Research and Development update’, Equity’ and ‘Legal update’.

These statements are based on current plans, estimates and projections. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific. Novo Nordisk cautions that a number of important factors, including those described in this document, could cause actual results to differ materially from those contemplated in any forward-looking statements.

Factors that may affect future results include, but are not limited to, global as well as local political and economic conditions, including interest rate and currency exchange rate fluctuations, delay or failure of projects related to research and/or development, unplanned loss of patents, interruptions of supplies and production, product recalls, unexpected contract breaches or terminations, government-mandated or market-driven price decreases for Novo Nordisk’s products, introduction of competing products, reliance on information technology, Novo Nordisk’s ability to successfully market current and new products, exposure to product liability and legal proceedings and investigations, changes in governmental laws and related interpretation thereof, including on reimbursement, intellectual property protection and regulatory controls on testing, approval, manufacturing and marketing, perceived or actual failure to adhere to ethical marketing practices, investments in and divestitures of domestic and foreign companies, unexpected growth in costs and expenses, failure to recruit and retain the right employees, and failure to maintain a culture of compliance.

Please also refer to the overview of risk factors in ‘Risks to be aware of’ on pp 42-43 of the Annual Report 2013 available on novonordisk.com on 3 February 2014.

Unless required by law, Novo Nordisk is under no duty and undertakes no obligation to update or revise any forward-looking statement after the distribution of this document, whether as a result of new information, future events or otherwise.

 

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MANAGEMENT STATEMENT

The Board of Directors and Executive Management have approved the Annual Report 2013 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 information for 2013.

The consolidated financial statements in the Annual Report 2013 are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and with the IFRS as endorsed by the EU. Furthermore, the Annual Report 2013, including the consolidated financial statements and management review, is prepared in accordance with additional Danish disclosure requirements for listed companies.

This financial statement has been prepared in accordance with the recognition and measurement requirements in the IFRS, the accounting policies as applied in the audited consolidated financial statements of 2013 and additional Danish disclosure requirements for listed companies.

In our opinion, the accounting policies used are appropriate, and the overall presentation of this financial statement is adequate. Furthermore, in our opinion, this company announcement of the financial statement for 2013 includes a true and fair account of the development in the operations and financial circumstances of the results for the year and of the financial position of the Group as well as a reference to the most significant risks and elements of uncertainty facing the Group in accordance with Danish disclosure requirements for listed companies.

Bagsværd, 30 January 2014

Executive Management:    
     
Lars Rebien Sørensen
Jesper Brandgaard
Lars Fruergaard Jørgensen
President and CEO CFO  
     
Lise Kingo Jakob Riis Kåre Schultz
     
Mads Krogsgaard Thomsen    
     
Board of Directors:    
     
Göran Ando Jeppe Christiansen Bruno Angelici
Chairman Vice chairman  
     
Henrik Gürtler Liz Hewitt Ulrik Hjulmand-Lassen
     
Thomas Paul Koestler Anne Marie Kverneland Søren Thuesen Pedersen
     
Hannu Ryöppönen Stig Strøbæk  

 

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FINANCIAL INFORMATION

APPENDIX 1: QUARTERLY NUMBERS IN DKK


 
(Amounts in DKK million, except number of full-time equivalent employees, earnings per share and number of shares outstanding).      
 
% change
2013
2012
Q4 2013 vs
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 2012









Sales 21,698 20,511 21,380 19,983 20,962 19,845 19,468 17,751
4%
Gross profit 18,298 16,986 17,774 16,374 17,809 16,360 16,044 14,348
3%
Gross margin 84.3% 82.8% 83.1% 81.9% 85.0% 82.4% 82.4% 80.8%
Sales and distribution costs 6,487 5,529 5,834 5,530 6,192 5,299 5,203 4,850
5%
Percentage of sales 29.9% 27.0% 27.3% 27.7% 29.5% 26.7% 26.7% 27.3%
Research and development costs 3,566 2,795 2,715 2,657 3,210 2,617 2,563 2,507
11%
Percentage of sales 16.4% 13.6% 12.7% 13.3% 15.3% 13.2% 13.2% 14.1%
Administrative costs 1,070 822 815 801 991 766 779 776
8%
Percentage of sales 4.9% 4.0% 3.8% 4.0% 4.7% 3.9% 4.0% 4.4%
Licence income and other operating income 179 152 175 176 156 186 154 170
15%
Operating profit 7,354 7,992 8,585 7,562 7,572 7,864 7,653 6,385
(3%)
Operating margin 33.9% 39.0% 40.2% 37.8% 36.1% 39.6% 39.3% 36.0%
Financial income 606 418 363 315 17 (85 ) 146 47
N/A
Financial expenses 170 111 267 108 137 420 856 375
24%
Net financials 436 307 96 207 (120 ) (505 ) (710 ) (328 )
N/A
Profit before income taxes 7,790 8,299 8,681 7,769 7,452 7,359 6,943 6,057
5%
Net profit 6,053 6,415 6,734 5,982 5,755 5,667 5,346 4,664
5%
Depreciation, amortisation and impairment losses 789 643 676 691 755 644 656 638
5%
Capital expenditure 739 908 778 782 1,006 942 855 516
(27%)
Net cash generated from operating activities 1) 5,372 6,217 7,283 7,070 1,514 7,962 7,151 5,587
255%
Free cash flow 1) 4,538 5,219 6,423 6,178 408 6,926 6,273 5,038
N/A
Total assets 70,337 68,134 64,289 62,447 65,669 66,620 60,978 61,210
7%
Total equity 42,569 39,125 35,357 33,801 40,632 35,660 31,334 32,358
5%
Equity ratio 60.5% 57.4% 55.0% 54.1% 61.9% 53.5% 51.4% 52.9%
Full-time equivalent employees end of period 37,978 36,851 35,869 35,154 34,286 33,501 32,819 32,252
11%
Basic earnings per share/ADR (in DKK) 2) 2.28 2.41 2.50 2.21 2.12 2.08 1.94 1.68
8%
Diluted earnings per share/ADR (in DKK) 2) 2.27 2.39 2.49 2.20 2.11 2.07 1.93 1.66
8%
Average number of shares outstanding (million) 2) 2,653.4 2,667.5 2,688.5 2,708.0 2,714.5 2,723.0 2,745.5 2,783.5
(2%)
Average number of diluted shares
outstanding (million) 2) 2,666.8 2,681.5 2,702.5 2,723.5 2,730.0 2,739.0 2,762.0 2,802.5
(2%)
Sales by business segment:
   Modern insulins (insulin analogues) 10,143 9,393 9,626 8,991 9,462 8,879 8,613 7,867
7%
   Human insulins 2,694 2,572 2,779 2,824 3,009 2,794 2,781 2,718
(10%)
   Victoza® 3,231 2,847 2,877 2,678 2,709 2,503 2,293 1,990
19%
   Protein-related products 640 666 643 606 621 644 621 625
3%
   Oral antidiabetic products (OAD) 367 504 681 694 670 719 653 716
(45%)
   Diabetes care total 17,075 15,982 16,606 15,793 16,471 15,539 14,961 13,916
4%
   NovoSeven® 2,259 2,428 2,542 2,027 2,420 2,153 2,451 1,909
(7%)
   Norditropin® 1,662 1,436 1,479 1,537 1,461 1,451 1,440 1,346
14%
   Other biopharmaceuticals 702 665 753 626 610 702 616 580
15%
   Biopharmaceuticals total 4,623 4,529 4,774 4,190 4,491 4,306 4,507 3,835
3%
Sales by geographic segment:
   North America 10,214 9,763 10,038 9,009 9,559 8,981 8,356 7,324
7%
   Europe 5,185 4,994 5,123 4,761 5,237 4,793 5,081 4,596
(1%)
   International Operations 3,139 2,697 3,077 3,094 2,894 2,695 2,757 2,734
8%
   Japan & Korea 1,398 1,312 1,368 1,239 1,698 1,710 1,724 1,485
(18%)
   Region China 1,762 1,745 1,774 1,880 1,574 1,666 1,550 1,612
12%
Segment operating profit:
   Diabetes care 5,567 5,886 5,965 5,502 5,420 5,768 5,270 4,638
3%
   Biopharmaceuticals 1,787 2,106 2,620 2,060 2,152 2,096 2,383 1,747
(17%)

1) Free cash flow for Q1 2012 and Q2 2012 has been reduced by DKK 1,328 million and increased by DKK 1,328 million, respectively, as withheld dividend tax is now presented as part of financing activities.
2) Comparative figures have been restated to reflect the change in trading unit from DKK 1 to DKK 0.20.

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APPENDIX 2: INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME


 
12M
12M
DKK million 2013 2012




Income statement
Sales 83,572 78,026
Cost of goods sold 14,140 13,465




Gross profit 69,432 64,561
Sales and distribution costs 23,380 21,544
Research and development costs 11,733 10,897
Administrative costs 3,508 3,312
Licence income and other operating income, net 682 666




Operating profit 31,493 29,474
 
Financial income 1,702 125
Financial expenses 656 1,788




Profit before income taxes 32,539 27,811
 
Income taxes 7,355 6,379




NET PROFIT FOR THE YEAR 25,184 21,432




 
Basic earnings per share (DKK) 1) 9.40 7.82
Diluted earnings per share (DKK) 1) 9.35 7.77
 
Segment information




Segment sales:
   Diabetes care 65,456 60,887
   Biopharmaceuticals 18,116 17,139
Segment operating profit:
   Diabetes care 22,920 21,096
   Operating margin 35.0% 34.6%
   Biopharmaceuticals 8,573 8,378
   Operating margin 47.3% 48.9%
Total segment operating profit 31,493 29,474




 
Statement of comprehensive income
Net profit for the year 25,184 21,432
      Other comprehensive income
      Items that will not be reclassified subsequently to the Income statement:
      Remeasurements on defined benefit plans 54 (281 )
      Items that will be reclassified subsequently to the Income statement,
      when specific conditions are met:
      Exchange rate adjustments of investments in subsidiaries (435 ) (172 )
      Cash flow hedges, realisation of previously deferred (gains)/losses (809 ) 1,182
      Cash flow hedges, deferred gains/(losses) incurred during the period 1,195 849
      Other items 75 35
      Tax on other comprehensive income, income/(expense) (211 ) (587 )




      Other comprehensive income for the year, net of tax (131 ) 1,026




TOTAL COMPREHENSIVE INCOME FOR THE YEAR 25,053 22,458




 

1) Comparative figures have been restated to reflect the change in trading unit from DKK 1 to DKK 0.20.

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APPENDIX 3: BALANCE SHEET


 
DKK million
31 Dec 2013 31 Dec 2012




ASSETS
Intangible assets 1,615 1,495
Property, plant and equipment 21,882 21,539
Deferred income tax assets 4,231 2,244
Other financial assets 551 228




TOTAL NON-CURRENT ASSETS 28,279 25,506
Inventories 9,552 9,543
Trade receivables 10,907 9,639
Tax receivables 3,155 1,240
Other receivables and prepayments 2,454 2,705
Marketable securities 3,741 4,552
Derivative financial instruments 1,521 931
Cash at bank and on hand 10,728 11,553




TOTAL CURRENT ASSETS 42,058 40,163




TOTAL ASSETS 70,337 65,669




EQUITY AND LIABILITIES
Share capital 550 560
Treasury shares (21 ) (17 )
Retained earnings 41,137 39,001
Other reserves 903 1,088




TOTAL EQUITY 42,569 40,632
Deferred income tax liabilities 672 732
Retirement benefit obligations 688 760
Provisions 2,183 1,907




Total non-current liabilities 3,543 3,399
Current debt 215 500
Trade payables 4,092 3,859
Tax payables 2,222 593
Other liabilities 9,386 8,982
Derivative financial instruments - 48
Provisions 8,310 7,656




Total current liabilities 24,225 21,638
TOTAL LIABILITIES 27,768 25,037




TOTAL EQUITY AND LIABILITIES 70,337 65,669





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APPENDIX 4: STATEMENT OF CASH FLOWS


DKK million
2013
2012




Net profit for the year 25,184 21,432
Adjustment for non-cash items 10,738 11,253
Change in working capital (265 ) 274
Interest received 131 207
Interest paid (39 ) (61 )
Income taxes paid (9,807 ) (10,891 )




Net cash generated from operating activities 25,942 22,214
Proceeds from intangible assets and other financial assets 29 -
Purchase of intangible assets and other financial assets (406 ) (250 )
Proceeds from sale of property, plant and equipment 31 53
Purchase of property, plant and equipment (3,238 ) (3,372 )
Net purchase of marketable securities 811 (501 )




Net cash used in investing activities (2,773 ) (4,070 )
Repayment of loans - (502 )
Purchase of treasury shares, net (13,924 ) (11,896 )
Dividends paid (9,715 ) (7,742 )




Net cash used in financing activities (23,639 ) (20,140 )
NET CASH GENERATED FROM ACTIVITIES (470 ) (1,996 )
Cash and cash equivalents at the beginning of the year 11,053 13,057
Exchange gains/(losses) on cash and cash equivalents (70 ) (8 )




Cash and cash equivalents at the end of the year 10,513 11,053

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APPENDIX 5: STATEMENT OF CHANGES IN EQUITY


Other reserves

DKK million
Share
capital
Treasury
shares
Retained
earnings
Exchange
rate
adjustment
Cash flow
hedges
Tax and
other
items
Total
other
reserves
Total

















                                 
2013
Balance at the beginning of the year 560 (17 ) 39,001 226 847 15 1,088 40,632
Net profit for the year 25,184 25,184
Other comprehensive income for the year 54 (435 ) 386 (136 ) (185 ) (131 )

















Total comprehensive income for the year 25,238 (435 ) 386 (136 ) (185 ) 25,053
Transactions with owners:
Dividends (9,715 ) (9,715 )
Share-based payments 409 409
Tax credit related to share option scheme 114 114
Purchase of treasury shares (15 ) (13,974 ) (13,989 )
Sale of treasury shares 1 64 65
Reduction of the B share capital (10 ) 10 -

















Balance at the end of the year 550 (21 ) 41,137 (209 ) 1,233 (121 ) 903 42,569

















At the end of the year proposed dividends (not yet declared) of DKK 11,866 million (4.50 DKK per share of DKK 0.20) are included in Retained earnings. No dividend is declared on treasury shares.


Other reserves

DKK million
Share
capital
Treasury
shares
Retained
earnings
Exchange
rate
adjustment
Cash flow
hedges
Tax and
other
items
Total
other
reserves
Total

















2012
Balance at the beginning of the year 580 (24 ) 37,111 398 (1,184 ) 567 (219 ) 37,448
Net profit for the year 21,432 21,432
Other comprehensive income for the year (281 ) (172 ) 2,031 (552 ) 1,307 1,026

















Total comprehensive income for the year 21,151 (172 ) 2,031 (552 ) 1,307 22,458
Transactions with owners:
Dividends (7,742 ) (7,742 )
Share-based payments 308 308
Tax credit related to share option scheme 56 56
Purchase of treasury shares (15 ) (12,147 ) (12,162 )
Sale of treasury shares 2 264 266
Reduction of the B share capital (20 ) 20 -

















Balance at the end of the year 560 (17 ) 39,001 226 847 15 1,088 40,632

















At the end of the year dividends of DKK 9,715 million (3.60 DKK per share of DKK 0.20) are included in Retained earnings. No dividend is declared on treasury shares.

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APPENDIX 6: REGIONAL SALES SPLIT


 
Q4 2013 sales split per region                        












DKK million
Total
North
America
Europe
Inter-
national
Operations
Japan &
Korea
Region China












The diabetes care segment
      NovoRapid® 4,455 2,602 1,012 464 253 124
      % change in local currencies 10% 9% 4% 36% 6% 32%
      NovoMix® 2,521 668 631 522 198 502
      % change in local currencies 9% 1% (2% ) 29% (6% ) 28%
      Levemir® 3,167 1,938 763 343 66 57
      % change in local currencies 24% 37% 3% 27% (14% ) 29%
   Modern insulin 10,143 5,208 2,406 1,329 517 683
   % change in local currencies 14% 16% 2% 30% (2% ) 29%
   Human insulin 2,694 561 615 651 120 747
   % change in local currencies (5% ) (12% ) (8% ) (5% ) (16% ) 5%
   Victoza® 3,231 2,154 766 195 86 30
   % change in local currencies 25% 35% 9% 18% (10% ) 48%
   Other diabetes care 1,007 207 229 159 136 276
   % change in local currencies (16% ) (59% ) 0% 28% 41% 11%
   Diabetes care total 17,075 8,130 4,016 2,334 859 1,736
   % change in local currencies 10% 13% 1% 17% 0% 15%
The biopharmaceuticals segment
   NovoSeven® 2,259 984 554 521 177 23
   % change in local currencies (1% ) (16% ) (4% ) 35% 34% (8% )
   Norditropin® 1,662 654 445 230 330 3
   % change in local currencies 26% 59% (4% ) 52% 12% 33%
   Other biopharmaceuticals 702 446 170 54 32 -
   % change in local currencies 23% 48% (4% ) 9% (20% ) 0%
   Biopharmaceuticals total 4,623 2,084 1,169 805 539 26
   % change in local currencies 11% 11% (4% ) 38% 15% (3% )












Total sales 21,698 10,214 5,185 3,139 1,398 1,762
   % change in local currencies 10% 12% 0% 22% 5% 15%
   % change as reported 4% 7% (1% ) 8% (18% ) 12%












2013 sales split per region


 
DKK million
Total
North
America
Europe
Inter-
national
Operations
Japan &
Korea
Region China












The diabetes care segment
      NovoRapid® 16,848 9,953 3,819 1,639 951 486
      % change in local currencies 12% 14% 4% 27% 1% 32%
      NovoMix ® 9,759 2,694 2,450 1,875 789 1,951
      % change in local currencies 10% 12% (3% ) 20% (5% ) 25%
      Levemir® 11,546 6,823 2,909 1,290 288 236
      % change in local currencies 22% 33% 4% 28% (8% ) 39%
   Modern insulin 38,153 19,470 9,178 4,804 2,028 2,673
   % change in local currencies 14% 20% 2% 24% (3% ) 27%
   Human insulin 10,869 1,976 2,427 2,954 490 3,022
   % change in local currencies 0% 4% (8% ) 2% (20% ) 6%
   Victoza® 11,633 7,537 2,896 741 331 128
   % change in local currencies 27% 31% 20% 31% (8% ) 84%
   Other diabetes care 4,801 1,590 885 692 471 1,163
   % change in local currencies (4% ) (18% ) (8% ) 17% 19% 0%
   Diabetes care total 65,456 30,573 15,386 9,191 3,320 6,986
   % change in local currencies 12% 18% 3% 16% (4% ) 13%
The biopharmaceuticals segment
   NovoSeven® 9,256 4,459 2,294 1,716 629 158
   % change in local currencies 8% 5% 4% 19% 17% 2%
   Norditropin® 6,114 2,273 1,729 853 1,246 13
   % change in local currencies 16% 36% 0% 20% 8% 0%
   Other biopharmaceuticals 2,746 1,719 654 247 122 4
   % change in local currencies 15% 27% 3% 18% (32% ) 25%
   Biopharmaceuticals total 18,116 8,451 4,677 2,816 1,997 175
   % change in local currencies 12% 16% 3% 19% 7% 2%












Total sales 83,572 39,024 20,063 12,007 5,317 7,161
   % change in local currencies 12% 18% 3% 17% 0% 13%
   % change as reported 7% 14% 2% 8% (20% ) 12%













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Page 34 of 35

APPENDIX 7: KEY CURRENCY ASSUMPTIONS










DKK per 100
2012 average
exchange rates
2013 average
exchange rates
YTD 2014 average
exchange rates
as of 27 January 2014
Current
exchange rates
as of 27 January 2014









USD 579 562 548 546
CNY 91.8 91.3 90.6 90.4
JPY 7.27 5.77 5.26 5.32
GBP 918 878 901 904
CAD 580 545 504 495

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APPENDIX 8: QUARTERLY NUMBERS IN USD (ADDITIONAL INFORMATION)

Key figures are translated into USD as additional information - the translation is based on the average exchange rate for income statement and the exchange rate at the balance sheet date for balance sheet items. The specified percent changes are based on the changes in the 'Quarterly numbers in DKK', see appendix 1.


(Amounts in USD million, except full-time equivalent employees, earnings per share and number of shares outstanding).  
                                 
% change
 
2013 2012
Q4 2013 vs
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4 2012




Sales 3,950 3,643 3,749 3,537 3,641 3,337 3,362 3,129
4%
Gross profit 3,330 3,017 3,117 2,898 3,093 2,752 2,771 2,529
3%
Gross margin 84.3% 82.8% 83.1% 81.9% 85.0% 82.4% 82.4% 80.8%
Sales and distribution costs 1,178 982 1,024 978 1,075 890 900 854
5%
Percentage of sales 29.9% 27.0% 27.3% 27.7% 29.5% 26.7% 26.7% 27.3%
Research and development costs 646 497 476 470 557 440 442 442
11%
Percentage of sales 16.4% 13.6% 12.7% 13.3% 15.3% 13.2% 13.2% 14.1%
Administrative costs 195 145 143 142 172 129 134 137
8%
Percentage of sales 4.9% 4.0% 3.8% 4.0% 4.7% 3.9% 4.0% 4.4%
Licence income and other operating income 32 27 31 31 27 31 27 30
15%
Operating profit 1,343 1,420 1,505 1,339 1,316 1,324 1,322 1,126
(3%)
Operating margin 33.9% 39.0% 40.2% 37.8% 36.1% 39.6% 39.3% 36.0%
Financial income 110 73 65 55 3 (15 ) 26 8
N/A
Financial expenses 31 20 47 19 24 70 149 66
24%
Net financials 79 53 18 36 (21 ) (85 ) (123 ) (58 )
N/A
Profit before income taxes 1,422 1,473 1,523 1,375 1,295 1,239 1,199 1,068
5%
Net profit 1,105 1,139 1,181 1,059 1,000 954 924 822
5%
Depreciation, amortisation and impairment losses 143 114 119 122 131 108 114 112
5%
Capital expenditure 135 161 137 138 175 159 148 91
(27%)
Net cash generated from operating activities 1) 986 1,105 1,277 1,251 270 1,343 1,237 985
255%
Free cash flow 1) 834 927 1,126 1,094 78 1,168 1,085 888
N/A
Total assets 12,995 12,338 11,274 10,698 11,604 11,554 10,328 10,988
7%
Total equity 7,865 7,085 6,200 5,791 7,180 6,185 5,307 5,809
5%
Equity ratio 60.5% 57.4% 55.0% 54.1% 61.9% 53.5% 51.4% 52.9%
Full-time equivalent employees end of period 37,978 36,851 35,869 35,154 34,286 33,501 32,819 32,252
11%
Basic earnings per share/ADR (in USD) 2) 0.41 0.43 0.44 0.39 0.37 0.35 0.33 0.30
8%
Diluted earnings per share/ADR (in USD) 2) 0.41 0.42 0.44 0.39 0.36 0.35 0.34 0.29
8%
Average number of shares outstanding (million) 2) 2,653.4 2,667.5 2,688.5 2,708.0 2,714.5 2,723.0 2,745.5 2,783.5
(2%)
Average number of diluted shares
outstanding (million) 2) 2,666.8 2,681.5 2,702.5 2,723.5 2,730.0 2,739.0 2,762.0 2,802.5
(2%)
Sales by business segment:
   Modern insulins (insulin analogues) 1,844 1,669 1,688 1,591 1,644 1,493 1,487 1,387
7%
   Human insulins 491 457 487 500 523 469 479 479
(10%)
   Victoza® 587 505 505 474 470 422 396 351
19%
   Protein-related products 117 118 113 107 108 108 107 110
3%
   Oral antidiabetic products (OAD) 68 90 119 123 116 122 113 126
(45%)
   Diabetes care total 3,107 2,839 2,912 2,795 2,861 2,614 2,582 2,453
4%
   NovoSeven® 412 431 446 359 420 362 423 337
(7%)
   Norditropin® 303 255 259 272 254 244 249 237
14%
   Other biopharmaceuticals 128 118 132 111 106 117 108 102
15%
   Biopharmaceuticals total 843 804 837 742 780 723 780 676
3%
Sales by geographic segment:
   North America 1,858 1,734 1,761 1,594 1,659 1,514 1,443 1,291
7%
   Europe 944 887 898 843 910 804 878 810
(1%)
   International Operations 572 479 539 548 503 452 476 482
8%
   Japan & Korea 255 233 240 219 295 287 298 262
(18%)
   Region China 321 310 311 333 274 280 267 284
12%
Segment operating profit:
   Diabetes care 1,016 1,045 1,046 974 942 972 910 818
3%
   Biopharmaceuticals 327 375 459 365 374 352 412 308
(17%)

1) Free cash flow for Q1 2012 and Q2 2012 has been reduced by USD 234 million and increased by USD 234 million, respectively, as withheld dividend tax is now presented as part of financing activities.
2) Comparative figures have been restated to reflect the change in trading unit from DKK 1 to DKK 0.20.

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Company announcement No 5 / 2014

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf of the undersigned, thereunto duly authorized.

Date: January 30, 2014

NOVO NORDISK A/S


Lars Rebien Sørensen, President and Chief Executive Officer