Prepared by Imprima de Bussy
`
`https://www.sec.gov/Archives/edgar/data/353278/00012086461100002...
`
`6-K 1 c104168.htm
`
`MPI Exhibit
`
`1131
`
`LVF 05/15/24
`
`MPI EXHIBIT 1131 PAGE 1
`
`

`

`Prepared by Imprima de Bussy
`
`https://www.sec.gov/Archives/edgar/data/353278/00012086461100002...
`
`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
`
`FEBRUARY 2, 2011
`
`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.
`
`If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g-32(b):82-_____________________
`
`Yes [ ] No [X]
`
`MPI EXHIBIT 1131 PAGE 2
`
`

`

`Prepared by Imprima de Bussy
`
`https://www.sec.gov/Archives/edgar/data/353278/00012086461100002...
`
`Back to Contents
`
`Company Announcement
`
`Financial statement for 2010
`
`2 February 2011
`Novo Nordisk increased operating profit by 27% in 2010
`Organic sales growth of 19% driven by Victoza®, NovoRapid® and Levemir®
`
` • Sales increased by 19% in Danish kroner and by 13% in local currencies.
`o Sales of modern insulins increased by 24% (18% in local currencies).
`o Sales of NovoSeven® increased by 14% (8% in local currencies).
`o Sales of Victoza® reached DKK 2,317 million in 2010.
`o Sales in North America increased by 29% (22% in local currencies).
`o Sales in International Operations increased by 24% (15% in local currencies).
` • Gross margin improved by 1.2 percentage points in Danish kroner to 80.8% in 2010, reflecting a favourable
`product mix development and a positive currency impact.
`
` • Reported operating profit increased by 27% to DKK 18,891 million. Measured in local currencies, operating profit
`increased by approximately 16%.
`
` • Net profit increased by 34% to DKK 14,403 million. Earnings per share (diluted) increased by 38% to DKK 24.60.
` • The phase 3a programme for Degludec and DegludecPlus has now been completed. In the largest trial, the one-
`year trial comparing Degludec and insulin glargine when added to oral anti-diabetic therapy in type 2 diabetes,
`Degludec met the primary endpoint of non-inferior glucose control while reducing nocturnal hypoglycaemia by
`more than 35% compared to insulin glargine.
`
` • For 2011, sales growth measured in local currencies is expected to be 8-10%, and operating profit growth
`measured in local currencies is expected to be around 15%.
`
` • In 2010, Novo Nordisk reached the four long-term financial targets announced in the annual report for 2008.
`Consequently, three of the four targets have been increased while the core target of 15% annual operating profit
`growth has been maintained.
`
` • At the Annual General Meeting on 23 March 2011, the Board of Directors will propose a 33% increase in dividend to
`DKK 10 per share. The Board of Directors has furthermore decided to initiate a new share repurchase programme
`of DKK 10 billion in 2011.
`
`Lars Rebien Sørensen, president and CEO: “2010 was a very good year for Novo Nordisk with strong organic sales
`growth driven by the modern insulins and Victoza®. We expect continued sales growth from these products and are
`encouraged by the results from the phase 3 programme with our new generation insulins.”
`
`Company Announcement no 3 / 2011
`Financial statement for 2010
`
`Novo Nordisk A/S
`
`Investor Relations
`
`Novo Allé
`2880 Bagsværd
`Denmark
`
`Page 1 of 29
`
`Telephone:
`+45 4444 8888
`Telefax:
`+45 4444 6626
`
`Internet:
`novonordisk.com
`
`CVR number:
`24256790
`
`MPI EXHIBIT 1131 PAGE 3
`
`

`

`Prepared by Imprima de Bussy
`
`https://www.sec.gov/Archives/edgar/data/353278/00012086461100002...
`
`Back to Contents
`Contents
`
`Consolidated financial statement 2010
`Performance versus long-term financial targets
`Sales development
`Development in costs and operating profit
`Net financials and tax
`Capital expenditure and free cash flow
`Key developments in the fourth quarter of 2010
`Outlook 2011
`Updated long-term financial targets
`Research and development update
`Sustainability update
`Equity
`Corporate governance
`Legal update
`Financial calendar
`Conference call details
`Forward-looking statement
`Management statement
`Contacts for further information
`Appendices:
`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 numbers in EUR / Supplementary information
`Appendix 7: Key currencies assumptions / Supplementary information
`
`Company Announcement no 3 / 2011
`Financial statement for 2010
`
`Novo Nordisk A/S
`
`Investor Relations
`
`Novo Allé
`2880 Bagsværd
`Denmark
`
`Telephone:
`+45 4444 8888
`Telefax:
`+45 4444 6626
`
`Internet:
`novonordisk.com
`
`CVR number:
`24256790
`
`Page
`3
`4
`5
`7
`8
`8
`8
`9
`10
`12
`15
`15
`16
`18
`19
`19
`19
`21
`22
`
`23
`24
`25
`26
`27
`28
`29
`
`Page 2 of 29
`
`MPI EXHIBIT 1131 PAGE 4
`
`

`

`Prepared by Imprima de Bussy
`
`https://www.sec.gov/Archives/edgar/data/353278/00012086461100002...
`
`Back to Contents
`Consolidated financial statement 2010
`
`The Board of Directors and Executive Management have approved the audited Annual Report 2010 of Novo Nordisk A/S. The Board of Directors and Executive
`Management also approved this financial statement containing condensed financial information for 2010. 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 Annual Report 2010 as well as those applied in the audited Annual Report 2009.
`
`2010
`
`2009
`
`2008
`
`2007
`
`2006
`
`%
`change
`2010 vs.
`2009
`
`19%
`
`21%
`
`18%
`
`22%
`
`11%
`
`93%
`
`27%
`
`Profit and loss
`(Amounts below in DKK million)
`
`Sales
`
`Gross profit
`Gross margin
`
`Sales and distribution costs
`Percent of sales
`
`Research and development costs
`Percent of sales
`
`Administrative expenses
`Percent of sales
`Licence fees and other operating income
`
`Operating profit
`Operating margin
`
`Net financials
`
`Profit before income taxes
`
`Income taxes
`Effective tax rate
`
`Net profit
`Net profit margin
`
`Company Announcement no 3 / 2011
`Financial statement for 2010
`
`Novo Nordisk A/S
`
`Investor Relations
`
`Novo Allé
`2880 Bagsværd
`Denmark
`
`45,553
`
`35,444
`77.8%
`
`12,866
`28.2%
`
`7,856
`17.2%
`
`2,635
`5.8%
`286
`
`12,373
`27.2%
`
`322
`
`41,831
`
`32,038
`76.6%
`
`12,371
`29.6%
`
`8,538
`20.4%
`
`2,508
`6.0%
`321
`
`8,942
`21.4%
`
`2,029
`
`38,743
`
`29,158
`75.3%
`
`11,608
`30.0%
`
`6,316
`16.3%
`
`2,387
`6.2%
`272
`
`9,119
`23.5%
`
`60,776
`
`49,096
`80.8%
`
`18,195
`29.9%
`
`9,602
`15.8%
`
`3,065
`5.0%
`657
`
`18,891
`31.1%
`
`(605)
`
`18,286
`
`3,883
`21.2%
`
`14,403
`23.7%
`
`51,078
`
`40,640
`79.6%
`
`15,420
`30.2%
`
`7,864
`15.4%
`
`2,764
`5.4%
`341
`
`14,933
`29.2%
`
`(945)
`
`13,988
`
`3,220
`23.0%
`
`10,768
`21.1%
`
`45
`
`(36%)
`
`12,695
`
`10,971
`
`3,050
`24.0%
`
`9,645
`21.2%
`
`2,449
`22.3%
`
`8,522
`20.4%
`
`9,164
`
`2,712
`29.6%
`
`6,452
`16.7%
`
`31%
`
`21%
`
`34%
`
`Page 3 of 29
`
`Telephone:
`+45 4444 8888
`Telefax:
`+45 4444 6626
`
`Internet:
`novonordisk.com
`
`CVR number:
`24256790
`
`MPI EXHIBIT 1131 PAGE 5
`
`

`

`Prepared by Imprima de Bussy
`
`https://www.sec.gov/Archives/edgar/data/353278/00012086461100002...
`
`Back to Contents
`Consolidated financial statement 2010 – continued
`
`Other key numbers
`(Amounts below in DKK million except earnings per share,
`dividend per share and number of employees)
`
`Depreciation, amortisation, etc
`Capital expenditure
`
`Free cash flow
`
`Total assets
`Equity
`Equity ratio
`
`Diluted earnings per share (in DKK)
`Dividend per share (in DKK)1)
`
`Payout ratio 2)
`Payout ratio (adjusted) 3), 4), 5)
`
`2010
`
`2,467
`3,308
`
`2009
`
`2,551
`2,631
`
`2008
`
`2,442
`1,754
`
`17,013
`
`12,332
`
`11,015
`
`61,402
`36,965
`60.2%
`
`24.60
`10.00
`
`39.6%
`42.8%
`
`54,742
`35,734
`65.3%
`
`17.82
`7.50
`
`40.9%
`-
`
`50,603
`32,979
`65.2%
`
`15.54
`6.00
`
`37.8%
`36.6%
`
`2007
`
`3,007
`2,268
`
`9,012
`
`47,731
`32,182
`67.4%
`
`13.39
`4.50
`
`32.8%
`34.9%
`
`2006
`
`2,142
`2,787
`
`4,707
`
`44,692
`30,122
`67.4%
`
`10.00
`3.50
`
`34.4%
`-
`
`%
`change
`2010 vs.
`2009
`
`(3%)
`26%
`
`38%
`
`12%
`3%
`
`38%
`33%
`
`Average number of full-time employees
`
`29,423
`
`27,985
`
`26,069
`
`24,344
`
`22,590
`
`5%
`
`1) Proposed dividend for the financial year 2010.
`2) Dividend for the year as a percentage of net profit.
`3) 2010: Adjusted for divestment of shares in ZymoGenetics.
`4) 2008: Adjusted for pulmonary diabetes projects discontinuation.
`5) 2007: Adjusted for divestment of shares in Dako and AERx® discontinuation.
`
`Performance versus long-term financial targets
`Performance against long-term
`2010
`2009
`2008
`financial targets
`Operating profit growth
`Operating profit growth (excl AERx®) 1)
`
`20.7%
`-
`
`38.4%
`23.7%
`
`26.5%
`-
`
`2007
`
`(1.9%)
`12.6%
`
`21.4%
`24.5%
`
`27.2%
`29.9%
`
`2006
`
`12.7%
`-
`
`23.5%
`-
`
`25.8%
`
`Operating margin
`Operating margin (excl AERx®) 1)
`
`Return on invested capital
`Return on invested capital (adjusted)2), 3), 4)
`
`Cash to earnings
`Cash to earnings (three years’ average)
`
`31.1%
`-
`
`63.6%
`62.4%
`
`118.1%
`115.6%
`
`29.2%
`-
`
`47.3%
`
`27.2%
`27.9%
`
`37.4%
`38.4%
`
`114.5% 114.2% 105.7%
`111.5%
`97.6%
`87.0%
`
`73.0%
`80.2%
`
`1) Excluding costs related to the discontinuation of all pulmonary diabetes projects.
`2) 2010: Adjusted for tax impact from divestment of shares in ZymoGenetics.
`3) 2008: Adjusted for costs related to the discontinuation of pulmonary diabetes projects
`4) 2007: Adjusted for tax impact from divestment of shares in Dako and costs related to the discontinuation of AERx®
`
`Company Announcement no 3 / 2011
`Financial statement for 2010
`
`Novo Nordisk A/S
`
`Investor Relations
`
`Novo Allé
`2880 Bagsværd
`Denmark
`
`Telephone:
`+45 4444 8888
`Telefax:
`+45 4444 6626
`
`Internet:
`novonordisk.com
`
`CVR number:
`24256790
`
`Target
`
`15%
`
`30%
`
`50%
`
`80%
`
`Page 4 of 29
`
`MPI EXHIBIT 1131 PAGE 6
`
`

`

`Prepared by Imprima de Bussy
`
`https://www.sec.gov/Archives/edgar/data/353278/00012086461100002...
`
`Back to Contents
`Sales development
`Sales increased by 19% in Danish kroner and by 13% measured in local currencies, which is slightly higher than the
`latest guidance of ‘11-12% growth in local currencies’. All regions contributed to growth measured in local currencies;
`North America was the main contributor with 62% share of growth measured in local currencies, followed by
`International Operations and Europe, contributing 24% and 12%, respectively. Sales growth was realised within both
`diabetes care and biopharmaceuticals, with the majority of growth originating from the modern insulins and Victoza®.
`
`The diabetes care segment
`Modern insulins
`– NovoRapid®
`– NovoMix®
`– Levemir®
`Human insulins
`Protein-related products
`Victoza®
`Oral antidiabetic products
`Diabetes care total
`
`The biopharmaceuticals segment
`NovoSeven®
`Norditropin®
`Other products
`Biopharmaceuticals total
`
`Sales
`2010
`DKK
`million
`
`26,601
`11,900
`7,821
`6,880
`11,827
`2,214
`2,317
`2,751
`45,710
`
`8,030
`4,803
`2,233
`15,066
`
`Growth
`Growth
`in local
`as
`reported currencies
`
`Share of
`growth
`in local
`currencies
`
`24%
`22%
`20%
`32%
`5%
`12%
`-
`4%
`22%
`
`14%
`9%
`6%
`11%
`
`18%
`16%
`14%
`26%
`(1%)
`5%
`-
`(1%)
`16%
`
`8%
`4%
`(1%)
`5%
`
`57%
`23%
`14%
`20%
`(2%)
`2%
`32%
`0%
`89%
`
`9%
`2%
`0%
`11%
`
`Total sales
`Diabetes care sales development
`Sales of diabetes care products increased by 22% measured in Danish kroner to DKK 45,710 million and by 16% in
`local currencies compared to 2009. In the following sections, market shares are based on moving annual total volume
`data from November 2010 provided by the independent third-party IMS Health.
`
`13%
`
`100%
`
`60,776
`
`19%
`
`Modern insulins, human insulins and protein-related products
`In 2010, sales of modern insulins, human insulins and protein-related products increased by 17% in Danish kroner to
`DKK 40,642 million and by 11% measured in local currencies compared to 2009, with North America and International
`Operations having the highest growth rates. Novo Nordisk is the global leader with 51% of the total insulin market and
`46% of the modern insulin market.
`
`Sales of modern insulins increased by 24% in Danish kroner to DKK 26,601 million and by 18% in local currencies
`compared to 2009, reflecting steady organic sales growth globally. All regions realised solid growth rates, with North
`America accounting for more than half of the growth, followed by International Operations and Europe. Sales of
`modern insulins now constitute close to 70% of Novo Nordisk’s sales of insulin.
`
`Company Announcement no 3 / 2011
`Financial statement for 2010
`
`Novo Nordisk A/S
`
`Investor Relations
`
`Novo Allé
`2880 Bagsværd
`Denmark
`
`Page 5 of 29
`
`Telephone:
`+45 4444 8888
`Telefax:
`+45 4444 6626
`
`Internet:
`novonordisk.com
`
`CVR number:
`24256790
`
`MPI EXHIBIT 1131 PAGE 7
`
`

`

`Prepared by Imprima de Bussy
`
`https://www.sec.gov/Archives/edgar/data/353278/00012086461100002...
`
`Back to Contents
`
`North America
`Sales in North America increased by 26% in Danish kroner and by 19% in local currencies in 2010, reflecting a
`continued solid market penetration of the modern insulins, Levemir®, NovoLog® and NovoLog® Mix 70/30. Novo
`Nordisk maintains its leadership position in the US insulin market with 42% of the total insulin market and 37% of the
`modern insulin market. Currently, around 43% of Novo Nordisk’s modern insulin volume in the US is being sold in the
`prefilled device FlexPen®.
`
`Europe
`Sales in Europe increased by 4% measured in Danish kroner and by 2% in local currencies in 2010, reflecting
`continued progress for the portfolio of modern insulins and declining human insulin sales. Novo Nordisk holds 53% of
`the total insulin market and 51% of the modern insulin market. The device penetration in Europe remains high with
`more than 95% of Novo Nordisk’s insulin volume being used in devices, primarily NovoPen® and FlexPen®.
`
`International Operations
`Sales in International Operations increased by 26% in Danish kroner and by 17% in local currencies in 2010. The main
`contributor to growth was sales of modern insulins, primarily in China. Sales of human insulins continue to add to
`overall growth in the region, also driven by China.
`
`As of 1 January 2011 a fifth Novo Nordisk sales region, Region China, has been established comprised of China, Taiwan
`and Hong Kong; therefore going forward, they will no longer constitute a part of ‘International Operations’. In China,
`Novo Nordisk currently holds 63% of the total insulin market and 70% of the modern insulin market.
`
`Japan & Korea
`Sales in Japan & Korea increased by 10% measured in Danish kroner and decreased by 2% in local currencies in 2010.
`The sales development reflects sales growth for all three modern insulins, Levemir®, NovoRapid® and NovoRapid
`Mix® 30, being offset by a decline in human insulin sales. In a continuously challenging competitive environment,
`Novo Nordisk now holds 63% of the total insulin market in Japan and 56% of the modern insulin market. The device
`penetration in Japan remains high with more than 98% of Novo Nordisk’s insulin volume being used in devices,
`primarily NovoPen® and FlexPen®.
`
`Victoza® (GLP-1 therapy for type 2 diabetes)
`Victoza® sales reached DKK 2,317 million during 2010 reflecting solid market performance in both Europe and the US.
`The global launch has continued throughout 2010, most recently Russia, Argentina, Mexico and four countries in the
`Middle East have launched Victoza®. The global market performance has been encouraging with Victoza® reaching
`solid market shares in the GLP-1 segment as well as significantly increasing the GLP-1 class’ share of the total diabetes
`care market in 2010.
`
`NovoNorm®/Prandin®/PrandiMet® (oral antidiabetic products)
`In 2010, sales of oral antidiabetic products increased by 4% in Danish kroner to DKK 2,751 million and decreased by
`1% measured in local currencies compared to 2009. The sales development primarily reflects sales growth in China
`being offset by lower sales in Europe due to generic competition in several European markets with the main impact in
`Germany.
`
`Company Announcement no 3 / 2011
`Financial statement for 2010
`
`Novo Nordisk A/S
`
`Investor Relations
`
`Novo Allé
`2880 Bagsværd
`Denmark
`
`Page 6 of 29
`
`Telephone:
`+45 4444 8888
`Telefax:
`+45 4444 6626
`
`Internet:
`novonordisk.com
`
`CVR number:
`24256790
`
`MPI EXHIBIT 1131 PAGE 8
`
`

`

`Prepared by Imprima de Bussy
`
`https://www.sec.gov/Archives/edgar/data/353278/00012086461100002...
`
`Back to Contents
`Biopharmaceuticals sales development
`In 2010, sales of biopharmaceutical products increased by 11% measured in Danish kroner to DKK 15,066 million and
`by 5% measured in local currencies compared to 2009.
`
`NovoSeven® (bleeding disorders therapy)
`Sales of NovoSeven® increased by 14% in Danish kroner to DKK 8,030 million and by 8% in local currencies
`compared to 2009. Sales growth for NovoSeven® was primarily realised in North America, but also Japan & Korea and
`International Operations contributed to the growth.
`
`Norditropin® (growth hormone therapy)
`Sales of Norditropin® increased by 9% measured in Danish kroner to DKK 4,803 million and by 4% measured in local
`currencies compared to 2009. Novo Nordisk is the second-largest company in the global growth hormone market with
`a 24% market share measured in volume.
`
`Other products
`Sales of other products within biopharmaceuticals, which predominantly consist of hormone replacement therapy
`(HRT)-related products, increased by 6% in Danish kroner to DKK 2,233 million and decreased by 1% measured in
`local currencies. This development primarily reflects continued sales progress for Vagifem® being offset by the impact
`from generic competition to Activella® in the US.
`Development in costs and operating profit
`The cost of goods sold grew 12% to DKK 11,680 million in 2010, and thereby providing a gross margin of 80.8%
`compared to 79.6% in 2009. This improvement primarily reflects a favourable product mix impact due to increased
`sales of modern insulins and Victoza®, and a positive currency impact of 0.4 percentage point.
`
`In 2010, total non-production-related costs increased by 18% to DKK 30,862 million and by 14% in local currencies
`compared to 2009.
`
`Sales and distribution costs increased by 18% to DKK 18,195 million, primarily reflecting the launch costs of Victoza®
`in Europe and the US, as well as a continued expansion of the field sales forces in Europe, Japan, China and the US,
`and an increase in the provisions for legal cases.
`
`Research and development costs increased by 22% to DKK 9,602 million, primarily reflecting the ongoing phase 3
`programme for the new generation of insulins, Degludec and DegludecPlus.
`
`Licence fees and other operating income constituted DKK 657 million in 2010 compared to DKK 341 million in 2009.
`This development primarily reflects a sustainable higher level of licence fees as well as a non-recurring income of
`approximately DKK 100 million related to a patent settlement during the first quarter of 2010.
`
`Operating profit in 2010 increased by 27% to DKK 18,891 million compared to 2009. In local currencies the growth
`was approximately 16% which is in line with the latest guidance of ‘more than 15%’.
`
`Company Announcement no 3 / 2011
`Financial statement for 2010
`
`Novo Nordisk A/S
`
`Investor Relations
`
`Novo Allé
`2880 Bagsværd
`Denmark
`
`Page 7 of 29
`
`Telephone:
`+45 4444 8888
`Telefax:
`+45 4444 6626
`
`Internet:
`novonordisk.com
`
`CVR number:
`24256790
`
`MPI EXHIBIT 1131 PAGE 9
`
`

`

`Prepared by Imprima de Bussy
`
`https://www.sec.gov/Archives/edgar/data/353278/00012086461100002...
`
`Back to Contents
`Net financials and tax
`Net financials showed a net expense of DKK 605 million in 2010 compared to a net expense of DKK 945 million in
`2009. The result for net financial expenses of DKK 605 million in 2010 is higher than the latest guidance of ‘around
`DKK 300 million’. The higher expenses are primarily explained by an increase in the losses on foreign exchange
`hedging of especially US dollars and Japanese yen due to the appreciation of these currencies versus Danish kroner in
`the fourth quarter of 2010.
`
`For 2010, the foreign exchange result was an expense of DKK 1,341 million compared to an expense of DKK 751
`million in 2009. This development reflects losses on foreign exchange hedging of especially US dollars due to the
`appreciation versus Danish kroner in 2010 compared to the exchange rate level prevailing in 2009.
`
`Also included in net financials is the result from associated companies with an income of DKK 1,070 million. In the
`fourth quarter of 2010, Novo Nordisk recorded a non-recurring income of approximately DKK 1.1 billion from the sale
`of shares in ZymoGenetics, Inc. as announced on 8 October 2010. In 2009, the result from associated companies was
`an expense of DKK 55 million.
`
`The effective tax rate for 2010 was 21.2% which is in line with the latest guidance of a tax rate of ‘around 21.5%’ for
`the full year of 2010. The effective tax rate for 2010 is reduced by a non-recurring effect of approximately 1.5
`percentage points from the divestment of Novo Nordisk’s ownership share of ZymoGenetics, Inc., which is exempt from
`tax charges under applicable Danish tax laws.
`Capital expenditure and free cash flow
`Net capital expenditure for property, plant and equipment for 2010 was DKK 3.3 billion compared to DKK 2.6 billion in
`2009. The main investment projects in 2010 were the insulin filling plant in Tianjin, China, and new device
`manufacturing lines in Denmark. Net capital expenditure was in line with previously communicated expectations of a
`net capital expenditure of ‘more than DKK 3 billion’.
`
`Free cash flow for 2010 was DKK 17.0 billion compared to DKK 12.3 billion in 2009, hence ending higher than the
`latest guidance of ‘more than DKK 14 billion’. The increase in cash flow compared to guidance is primarily driven by
`improvement in working capital balances as inventory levels decreased and both trade payables and other current
`liabilities increased.
`Key developments in the fourth quarter of 2010
`Please refer to appendix 1 for an overview of the quarterly numbers in DKK.
`
`Sales in the fourth quarter of 2010 increased by 23% to DKK 16,124 million and by 15% in local currencies compared
`to the same period in 2009. The growth was driven by the modern insulins, Victoza® and NovoSeven®, and with
`North America and International Operations representing the majority of the growth from a geographic perspective.
`International Operations’ sales growth was primarily driven by modern insulins, especially in China. Victoza® sales of
`DKK 951 million in the fourth quarter of 2010 were primarily driven by sales in the US and Europe.
`
`The gross margin increased to 80.9% in the fourth quarter of 2010 compared to 79.8% in the same period last year.
`The increase was primarily driven by a favourable development in
`
`Company Announcement no 3 / 2011
`Financial statement for 2010
`
`Novo Nordisk A/S
`
`Investor Relations
`
`Novo Allé
`2880 Bagsværd
`Denmark
`
`Page 8 of 29
`
`Telephone:
`+45 4444 8888
`Telefax:
`+45 4444 6626
`
`Internet:
`novonordisk.com
`
`CVR number:
`24256790
`
`MPI EXHIBIT 1131 PAGE 10
`
`

`

`Prepared by Imprima de Bussy
`
`https://www.sec.gov/Archives/edgar/data/353278/00012086461100002...
`
`Back to Contents
`
`product mix and a positive currency effect countered by costs related to an employee share programme.
`
`In the fourth quarter of 2010, total non-production-related costs increased by 21% to DKK 8,859 million and by 14%
`in local currencies compared to the same period last year.
`
`Sales and distribution costs increased by 24% in the fourth quarter of 2010 compared to the same period last year,
`primarily driven by Victoza® launch costs and field sales force expansions in the US and International Operations and
`an increase in the provisions for legal cases.
`
`Research and development costs increased by 15% in the fourth quarter of 2010 compared to the same period last
`year, primarily driven by the phase 3 development programme for Degludec and DegludecPlus.
`
`Reported operating profit increased by 35% in the fourth quarter of 2010 compared to the same period last year, and
`by around 19% in local currencies. This primarily reflects the sales growth and the improvement in gross margin offset
`by the costs related to an employee share programme implemented in December 2010.
`Outlook 2011
`The current expectations for 2011 are summarised in the table below:
`
`Expectations are as reported, if not
`otherwise stated
`
`Current expectations
`2 February 2011
`
`Sales growth
`- in local currencies
`- as reported
`
`Operating profit growth
`- in local currencies
`- as reported
`
`Net financials
`
`Effective tax rate
`
`Capital expenditure
`
`Depreciation, amortisation and impairment losses
`
`Free cash flow
`
`8-10%
`Around 1.5 percentage points lower
`
`Around 15%
`Around 2.5 percentage points lower
`
`Expense of around DKK 100 million
`
`Around 23%
`
`Around DKK 3.5 billion
`
`Around DKK 2.7 billion
`
`More than DKK 16 billion
`
`Novo Nordisk expects sales growth in 2011 of 8-10% measured in local currencies. This is based on expectations of
`continued market penetration for Novo Nordisk’s key products, as well as expectations of continued intense
`competition, generic competition to oral antidiabetic products, and an impact from the implementation of healthcare
`reforms primarily in the US and Europe. Given the current level of exchange rates versus Danish kroner, the reported
`sales growth is expected to be around 1.5 percentage points lower than growth measured in local currencies.
`
`For 2011, growth in operating profit is expected to be around 15% measured in local currencies. Given the current level
`of exchange rates versus Danish kroner, the reported operating profit growth is expected to be 2.5 percentage points
`lower than growth measured in local currencies.
`
`Company Announcement no 3 / 2011
`Financial statement for 2010
`
`Novo Nordisk A/S
`
`Investor Relations
`
`Novo Allé
`2880 Bagsværd
`Denmark
`
`Page 9 of 29
`
`Telephone:
`+45 4444 8888
`Telefax:
`+45 4444 6626
`
`Internet:
`novonordisk.com
`
`CVR number:
`24256790
`
`MPI EXHIBIT 1131 PAGE 11
`
`

`

`Prepared by Imprima de Bussy
`
`https://www.sec.gov/Archives/edgar/data/353278/00012086461100002...
`
`Back to Contents
`
`For 2011, Novo Nordisk expects a net financial expense of around DKK 100 million. The current expectation reflects that
`the impact of currency hedging contracts is approximately neutral.
`
`The effective tax rate for 2011 is expected to be around 23%.
`
`Capital expenditure is expected to be around DKK 3.5 billion in 2011, primarily related to investments in the new insulin
`formulation and filling plant in China and a new prefilled device production facility in Denmark. Expectations for
`depreciation, amortisation and impairment losses are around DKK 2.7 billion whereas free cash flow is expected to be
`more than DKK 16 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 the remainder of 2011 and that currency exchange rates,
`especially the US dollar, will remain at the current level versus the Danish krone during the remainder of 2011. 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
`
`USD
`JPY
`CNY
`GBP
`
`Annual impact on Novo Nordisk’s
`operating profit of a 5%
`movement in currency
`DKK 620 million
`DKK 155 million
`DKK 120 million
`DKK 85 million
`
`Hedging period
`(months)
`
`15
`13
` 12*
`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’.
`Updated long-term financial targets
`Focusing on growth, profitability, financial return and generation of cash, 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 in the annual report for 2000, 2005 and 2008.
`Novo Nordisk has now reached the performance level stipulated in the four long-term financial targets and has
`consequently revised the target levels. The revision is based on an assumption of a continuation of the current
`business environment and given the current scope of business activities and has been prepared assuming that
`currency exchange rates remain at the current level as outlined in appendix 7. Should any of these assumptions
`change the time horizon for achieving the long term targets may be prolonged or it may be required to revise the
`targets.
`
`Company Announcement no 3 / 2011
`Financial statement for 2010
`
`Novo Nordisk A/S
`
`Investor Relations
`
`Novo Allé
`2880 Bagsværd
`Denmark
`
`Page 10 of 29
`
`Telephone:
`+45 4444 8888
`Telefax:
`+45 4444 6626
`
`Internet:
`novonordisk.com
`
`CVR number:
`24256790
`
`MPI EXHIBIT 1131 PAGE 12
`
`

`

`Prepared by Imprima de Bussy
`
`https://www.sec.gov/Archives/edgar/data/353278/00012086461100002...
`
`Back to Contents
`
`Performance against long-term
`financial targets
`Operating profit growth
`
`Operating margin
`
`Return on invested capital
`
`Cash to earnings
`Cash to earnings (three years’ average)
`
`* Simple average of reported figures for 2006-2010
`
`Average*
`2006-2010
`19%
`
`26%
`
`40%
`
`105%
`98%
`
`Result
`2010
`27%
`
`31%
`
`64%
`
`118%
`116%
`
`Previous
`target
`15%
`
`30%
`
`50%
`
`80%
`
`New
`target
`
`15%
`
`35%
`
`70%
`
`90%
`
`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 30% to 35%. The enabling factors are expected to be a
`continued positive product mix development, further productivity improvements in the manufacturing and
`administrative areas while at the same time ensuring investments in research and development as well as sales and
`marketing. It should be noted that the achievement of the operating margin target may be influenced by significant
`changes in market conditions including regulatory requirements, pricing environment, competitive environment,
`healthcare reforms and exchange rates.
`
`The target level for return on invested capital (ROIC) measured post tax is increased from 50% to 70%. The raised
`target reflects the expectation of continued lower growth in invested capital relative to operating profit as well as a
`stable effective tax rate. In setting the new target level Novo Nordisk has assumed that proposed new accounting rules
`regarding treatment of operating leases, the draft International Financial Reporting Standard ‘Leases’ (ED/2010/09),
`will be implemented. It is currently anticipated that the introduction of this new accounting standard for Novo Nordisk
`will have approximately 10 percentage points negative effect on ROIC.
`
`The target level for the cash-to-earnings ratio is increased from 80% to 90%, reflecting a sustained lower tangible
`investment level and improved cash conversion ability. As previously, this target will be pursued looking at the average
`over a three-year period.
`
`Company Announcement no 3 / 2011
`Financial statement for 2010
`
`Novo Nordisk A/S
`
`Investor Relations
`
`Novo Allé
`2880 Bagsværd
`Denmark
`
`Page 11 of 29
`
`Telephone:
`+45 4444 8888
`Telefax:
`+45 4444 6626
`
`Internet:
`novonordisk.com
`
`CVR number:
`24256790
`
`MPI EXHIBIT 1131 PAGE 13
`
`

`

`Prepared by Imprima de Bussy
`
`https://www.sec.gov/Archives/edgar/data/353278/00012086461100002...
`
`Back to Contents
`Research and development update
`Diabetes care: Degludec and DegludecPlus phase 3a programme update
`Novo Nordisk has now completed the 17 phase 3a trials that comprise the BEGIN™ and BOOST™ programmes
`intended to support the regulatory dossiers for Degludec and DegludecPlus, respectively. Headline results from 10
`trials completed since the company announcement of 22 December 2010, including one extension trial, are presented
`below:
`
`Degludec versus insulin glargine in type 2 diabetes; phase 3 results (NN1250-3579)
`In this 52-week trial, 1,030 insulin naïve people with type 2 diabetes were randomised 3:1 to either Degludec or
`insulin glargine, both given once daily in addition to metformin ± a DPP-IV inhibitor.
`
`Degludec effectively improved long-term glycaemic control, achieving the primary objective of showing HbA1c non-
`inferiority to insulin