Novo Nordisk A/S (Novo) has reported sales of DKK45.5 billion for the full year of 2007, compared with the sales of DKK41.8 billion in the previous year. It also reported net profit of DKK9.6 billion, or DKK15.54 per diluted share, for the full year of 2008, compared with the net profit of DKK8.5 billion, or DKK13.39 per diluted share, in the previous year.
Sales in local currencies increased by 12% in 2008 and by 9% in Danish kroner.
Sales of modern insulins increased by 28% (24% in Danish kroner).
Sales of NovoSeven increased by 14% (9% in Danish kroner).
Sales of Norditropin increased by 12% (10% in Danish kroner).
Sales in North America increased by 18% (10% in Danish kroner).
Sales in International Operations increased by 21% (15% in Danish kroner).
Gross margin improved by 1.7 percentage points in local currencies and by 1.2 percentage points in Danish kroner to 77.8% in 2008, primarily reflecting continued productivity improvements and a negative currency impact of around 0.5 percentage points.
Reported operating profit increased by 38% to DKK12,373 million, up from 8,942 DKKmillion in 2007. Adjusted for the impact of closure costs for pulmonary diabetes projects in 2007 and 2008 and the impact of currencies, underlying operating profit increased by more than 25%.
Net profit increased by 13% to DKK9,645 million. Earnings per share (diluted) increased by 16% to DKK15.54.
At the Annual General Meeting on 18 March 2009, the board of directors will propose a 33% increase in dividend to DKK6.00 per share of DKK1. The ongoing share repurchase programme has been increased by DKK1 billion to DKK18.5 billion and the remaining DKK6 billion of the programme is expected to be repurchased before the end of 2009.
For 2009, operating profit measured in local currencies is expected to grow at the level of 10%. Due to a positive currency impact reported operating profit growth is expected to be around 9 percentage points higher.
Novo Nordisk reached in 2008 the four long-term financial targets established in 2006. The four ratios used are still considered appropriate measures to ensure value creation and several targets have consequently been increased.
Lars Rebien Sørensen, president and chief executive officer, said: “We are satisfied with the solid business results achieved in 2008 driven by the continued penetration of our modern insulins in all key markets. Despite the general economic downturn we still expect double-digit growth in both sales and operating profit for 2009 and we are increasing our long-term financial targets.”
Sales development by regions
In 2008, sales growth was realised in all regions measured in local currencies. The main contributors to growth were North America and International Operations providing 48% and 29%, respectively, of the total sales growth. Europe contributed 21% and Japan & Oceania 2% of the sales growth in 2008 measured in local currencies.
Sales of diabetes care products increased by 13% measured in local currencies and by 9% in Danish kroner to DKK33,356 million compared to last year.
Modern insulins, human insulins and insulin-related products
Sales of modern insulins, human insulins and insulin-related products increased by 12% measured in local currencies and by 9% in Danish kroner to DKK30,965 million. All regions contributed to growth, with North America and International Operations having the highest growth rates. Novo Nordisk continues to be the global leader with 52% of the total insulin market and 44% of the modern insulin market, both measured by volume.
Sales of modern insulins increased by 28% in local currencies in 2008 and by 24% in Danish kroner to DKK17,317 million. Sales of Levemir increased by 55%, sales of NovoRapid® (NovoLog in the US) increased by 22% and sales of NovoMix (NovoLog Mix 70/30 in theUS) increased by 23%, all measured in local currencies. All regions realised solid growth rates, with North America and Europe as the primary contributors to growth. Sales of modern insulins contributed 77% of the overall growth in local currencies and now constitute 59% of Novo Nordisk’s sales of insulins.
Sales in North America increased by 21% in local currencies in 2008 and by 14% in Danish kroner, reflecting a solid penetration of the modern insulins Levemir, NovoLog and NovoLog Mix 70/30. In the fourth quarter of 2008, US sales were positively impacted by a rebate reversal related to a federal healthcare programme. Novo Nordisk maintains its leadership position in the US insulin market with 41% of the total insulin market and 32% of the modern insulin market, both measured by volume. Currently, more than 37% of Novo Nordisk’s modern insulin volume is being sold in FlexPen.
Sales in Europe increased by 6% in local currencies and 5% measured in Danish kroner, reflecting continued progress for the portfolio of modern insulins. Novo Nordisk holds 55% of the total insulin market and 51% of the modern insulin market, both measured by volume, and is capturing the main share of growth in the modern insulin market.
Sales within International Operations increased by 18% in local currencies and by 14% in Danish kroner. The main contributor to growth in 2008 was sales of modern insulins, primarily in Turkey and China. Furthermore, sales of human insulins continue to add to overall growth in the region, driven by China.
Japan & Oceania
Sales in Japan & Oceania increased by 1% in local currencies and by 6% measured in Danish kroner. The sales development reflects sales growth for the modern insulins NovoRapid, NovoRapid Mix 30 and Levemir. Novo Nordisk holds 72% of the total insulin market in Japan and 64% of the modern insulin market, both measured by volume.