- Diabetes care sales were up 19% to DKK 3,754 million.
- Sales within coagulation disorders were up 63% to DKK 730 million.
- Human growth hormone sales were up 4% to DKK 457 million.
- Hormone replacement therapy sales were up 17% to DKK 327 million.
Total costs, excluding net financials and tax, rose by 15% to DKK 4,313 million. Production costs and sales and distribution costs grew in line with sales, whereas the increase in costs related to research and development was lower than the sales increase. Administrative costs showed a flat development in absolute terms. Included in the total costs are depreciation and amortisation of DKK 273 million, equivalent to an increase of 7%.
Total licence fees and other income, including the income of close to DKK 250 million related to the settlement with Aventis in January 2001, amounted to DKK 321 million in the first quarter of 2001 compared to DKK 328 million in the first quarter of 2000.
Operating profit was realised at DKK 1,358 million, which represents an increase of 37%. Excluding in both quarters Seroxat® licence income and one-off income from settlement of patent disputes with Eli Lilly and Aventis, the increase was 45%. This significant underlying growth in operating profit partly reflects the relatively low proportion of the operating profit for 2000 that was realised in the first quarter. In 2001 the operating profit is expected to be more evenly distributed over the quarters.
Profit before tax in the first quarter of 2001 rose by 66% to DKK 1,595 million, positively impacted by the increase in quarterly net financials from DKK (34) million in 2000 to DKK 237 million 2001. This development reflects the positive contribution in 2001 from hedging of currency exchange exposure, especially in JPY.
The tax rate for the first quarter was 36.0%, down from 37.5% in the first quarter of 2000, and net profit hence increased by 70% to DKK 1,021 million, up from DKK 600 million in the first quarter of last year.
Outlook for 2001
Assuming that currency exchange rates remain at the current level for the rest of the year, Novo Nordisk still expects to meet its long-term target of 15% growth in operating profit in 2001. This forecast includes the agreement in January 2001 with Aventis, which has impacted Novo Nordisk's operating profit by close to DKK 250 million in the first quarter of 2001.
Assuming that currency exchange rates remain at the current level for the rest of the year, Novo Nordisk still expects to meet its long-term target of 15% growth in operating profit in 2001. This forecast includes the agreement in January 2001 with Aventis, which has impacted Novo Nordisk's operating profit by close to DKK 250 million in the first quarter of 2001.
Novo Nordisk hedges the foreign exchange exposure in its major currencies, and the instruments used are forward contracts and options. At the current level of interest rates and exchange rates, Novo Nordisk still expects net financial income for the full year to amount to approximately DKK 300 million.
Capital expenditures are now expected to exceed DKK 3 billion, compared to previously announced DKK 2.8 billion, in order to meet increasing demands for human insulin, insulin analogues and NovoSeven®.
The tax rate is still expected to be at the level of 36%.
Sales development
Sales growth was realised within all business areas in the first quarter of 2001, where especially diabetes care and coagulation disorders were drivers of sales growth. Solid growth rates were realised worldwide with the exception of Japan, where sales were flat compared to the first quarter of 2000.
Sales growth was realised within all business areas in the first quarter of 2001, where especially diabetes care and coagulation disorders were drivers of sales growth. Solid growth rates were realised worldwide with the exception of Japan, where sales were flat compared to the first quarter of 2000.
Diabetes care
Sales of diabetes care products rose by 19% to DKK 3,754 million in the first quarter of 2001 compared to the first quarter of 2000.
Sales of diabetes care products rose by 19% to DKK 3,754 million in the first quarter of 2001 compared to the first quarter of 2000.
Sales of diabetes care products excluding NovoNorm®/Prandin® grew by 17%, and on a geographical basis high growth was realised in Europe and the US, whereas the growth in Japan was modest.
In the US market, diabetes care products excluding Prandin® increased by 27% measured in DKK and by 19% measured in local currency. This development was partly driven by the co-marketing agreement with Wal-Mart launched in August 2000. Deployment and expansion of the US sales force is ongoing and conversion of the rented sales force to Novo Nordisk employees is progressing. By the launch of NovoLog® and Innovo® in the second half of 2001 it is expected that the sales force in the US will consist of approximately 600 fully integrated Novo Nordisk employees.
During the first quarter of 2001 InnoLet®, the innovative disposable doser, was launched in Denmark and Germany. Roll-out in other European countries will continue during the year.
Sales of NovoNorm®/Prandin® increased by 50% to DKK 355 million compared to DKK 236 million in the first quarter of 2000. Growth in sales was realised especially in the US and in Europe, where the roll-out of NovoNorm® in all major markets was completed in 2000. Outside the US and Europe, a contract with the Russian Ministry of Health also contributed to growth.
Coagulation disorders
Sales of NovoSeven® increased by 63% to DKK 730 million. US sales continued to show strong growth supported by increasing sales in Europe and launch of NovoSeven® in Japan in May 2000.
Sales of NovoSeven® increased by 63% to DKK 730 million. US sales continued to show strong growth supported by increasing sales in Europe and launch of NovoSeven® in Japan in May 2000.
There are several growth drivers behind the sales of NovoSeven®. The confidence in the use of NovoSeven® in connection with surgical procedures in haemophilia patients with inhibitors has increased and there has been an increased focus on the use of NovoSeven® in patients with acquired haemophilia. Sales have also been positively impacted by a temporary limitation of rFVIII products for use in certain segments of the inhibitor patient group. Finally, sales are also perceived to have been positively affected by an increased investigational use of NovoSeven®.
The NovoSeven® clinical expansion programme is progressing according to plan and two Phase 2 studies have been initiated since the announcement of the full year results 2000 on 20 February 2001.
Human growth hormone
Sales of human growth hormone products rose by 4% to DKK 457 million in the first quarter of 2001. Sales in Europe contributed to the growth, driven by continued roll-out of Norditropin® SimpleXx®. On the other hand, sales in Japan were negatively impacted by inventory adjustments at wholesalers in the fourth quarter of 2000 and by the depreciation of JPY relative to the first quarter of 2000.
Sales of human growth hormone products rose by 4% to DKK 457 million in the first quarter of 2001. Sales in Europe contributed to the growth, driven by continued roll-out of Norditropin® SimpleXx®. On the other hand, sales in Japan were negatively impacted by inventory adjustments at wholesalers in the fourth quarter of 2000 and by the depreciation of JPY relative to the first quarter of 2000.
Hormone replacement therapy
Sales of hormone replacement therapy products rose by 17% to DKK 327 million in the first quarter of 2001. Especially sales of Activelle(TM)/Activella(TM) contributed to the sales growth, both in Europe and in the US. Pharmacia Corp launched Activella(TM), Vagifem® and Innofem® in the US during the second and third quarters of 2000.
Sales of hormone replacement therapy products rose by 17% to DKK 327 million in the first quarter of 2001. Especially sales of Activelle(TM)/Activella(TM) contributed to the sales growth, both in Europe and in the US. Pharmacia Corp launched Activella(TM), Vagifem® and Innofem® in the US during the second and third quarters of 2000.
Net financials
In the first quarter of 2001, Novo Nordisk had net financial income of DKK 237 million compared to a loss of DKK 34 million in the first quarter of 2000. Foreign exchange gains in the first quarter of 2001 were DKK 188 million compared to a loss of DKK 56 million in the first quarter of 2000. The gains primarily relate to the hedging of JPY.
In the first quarter of 2001, Novo Nordisk had net financial income of DKK 237 million compared to a loss of DKK 34 million in the first quarter of 2000. Foreign exchange gains in the first quarter of 2001 were DKK 188 million compared to a loss of DKK 56 million in the first quarter of 2000. The gains primarily relate to the hedging of JPY.
Shareholders' funds
Development in shareholders' funds
Shareholders' funds increased by DKK 1,073 million to DKK 16,811 million, primarily due to the positive net profit of DKK 1,021 million.
Development in shareholders' funds
Shareholders' funds increased by DKK 1,073 million to DKK 16,811 million, primarily due to the positive net profit of DKK 1,021 million.
|
Shareholders' funds at 31 Dec 2000 |
DKK |
15,738 |
million |
|
Net profit for the period |
|
1,021 |
|
|
Repurchase of own shares |
|
(24) |
|
|
Sale of own shares |
|
31 |
|
|
Other adjustments |
|
45 |
|
|
Shareholders' funds at 31 March 2001 |
DKK |
16,811 |
million |
According to a ruling by a Danish High Court on 27 April 2001, Novo Nordisk and two other companies have been permitted to deduct costs pertaining to issuance of employee shares. However, the Ministry of Taxation may appeal the decision to the Supreme Court by 22 June 2001 at the latest.
If the decision is not appealed, or if appealed, and the Supreme Court upholds the ruling by the High Court, then Novo Nordisk will be able to file taxable deductions for the employee shares issued in 1998. In accordance with Novo Nordisk's accounting policies, expenses for employee shares and related taxes are recorded under shareholders' funds; accordingly, the ruling of the High Court will have no impact on the company's profit and loss account but will have a minor positive impact on shareholders' funds for 2001.
Change in trading unit
As decided at the Board of Directors' meeting in February, the trading unit of Novo Nordisk B shares changed from DKK 10 to DKK 2 effective as of 4 April 2001. Subsequently the ratio of B shares to American Depositary Shares (ADSs) was changed from 1:2 to 1:1, hence in the future B shares and ADSs will both reflect trading units of DKK 2.
As decided at the Board of Directors' meeting in February, the trading unit of Novo Nordisk B shares changed from DKK 10 to DKK 2 effective as of 4 April 2001. Subsequently the ratio of B shares to American Depositary Shares (ADSs) was changed from 1:2 to 1:1, hence in the future B shares and ADSs will both reflect trading units of DKK 2.
Reduction of share capital
At the Annual General Meeting in March 2001, it was decided to reduce the B share capital by cancellation of nominally DKK 45 million of treasury B shares. Registration of the cancellation, which corresponds to approximately 6% of the share capital, is expected to take place in the third quarter of 2001.
At the Annual General Meeting in March 2001, it was decided to reduce the B share capital by cancellation of nominally DKK 45 million of treasury B shares. Registration of the cancellation, which corresponds to approximately 6% of the share capital, is expected to take place in the third quarter of 2001.
Employee shares
Based on recent years' business and financial results and the commitment shown by the employees in connection with the demerger, the Board of Directors has decided to initiate an employee share programme at the end of 2001. The employee share programme is expected to comprise approximately 1.5 million B shares (approx 0.4% of total share capital) , which will be offered at DKK 100 per share from the current holding of own B shares.
Based on recent years' business and financial results and the commitment shown by the employees in connection with the demerger, the Board of Directors has decided to initiate an employee share programme at the end of 2001. The employee share programme is expected to comprise approximately 1.5 million B shares (approx 0.4% of total share capital) , which will be offered at DKK 100 per share from the current holding of own B shares.
Holding of own shares
As of the end of the first quarter of 2001, Novo Nordisk A/S (NYSE: NVO) and its wholly-owned affiliates owned 31,517,205 of its own B shares (adjusted to reflect the change in trading unit as of 4 April 2001) corresponding to a total nominal value of DKK 63,034,410 or 8.36% of the total share capital.
As of the end of the first quarter of 2001, Novo Nordisk A/S (NYSE: NVO) and its wholly-owned affiliates owned 31,517,205 of its own B shares (adjusted to reflect the change in trading unit as of 4 April 2001) corresponding to a total nominal value of DKK 63,034,410 or 8.36% of the total share capital.
Conference call
At 4 pm CET today, corresponding to 10.00 am New York time, a conference call will be held. Investors will be able to listen in via a link on our homepage, which can be found under "Investors - Conference Call". Slides for the conference call can be found approximately two hours before on the same page.
At 4 pm CET today, corresponding to 10.00 am New York time, a conference call will be held. Investors will be able to listen in via a link on our homepage, which can be found under "Investors - Conference Call". Slides for the conference call can be found approximately two hours before on the same page.
Forward-looking statement
The above sections contain forward-looking statements as the term is defined in the US Private Securities Litigation Reform Act of 1995. The forward-looking statements include statements regarding Novo Nordisk's expected growth rates.
The above sections contain forward-looking statements as the term is defined in the US Private Securities Litigation Reform Act of 1995. The forward-looking statements include statements regarding Novo Nordisk's expected growth rates.
Such forward-looking statements are subject to risk and uncertainties that may cause actual results to differ materially from expectations, including unexpected developments in the international currency exchange and securities markets, delay or failure of development projects, production problems, government-mandated or market-driven price decreases for Novo Nordisk's products in the company's major markets and the introduction of competing products within Novo Nordisk's core businesses.
These and other risks and uncertainties are further described in reports filed by Novo Nordisk with the US Securities and Exchange Commission (SEC) including the company's Form 20-F, which was filed on 27 April 2001.
Novo Nordisk is under no duty to update any of the forward-looking statements after the date of this report or to confirm such statements to actual results, unless required by law.
Further information
Media:
Outside North America:
Karsten Madsen
Phone (direct): (+45) 4442 4137
Karsten Madsen
Phone (direct): (+45) 4442 4137
In North America:
Susan Jackson
Phone (direct): (+1) 212 867 0123
Susan Jackson
Phone (direct): (+1) 212 867 0123
Investors:
Outside North America:
Peter Haahr
Phone (direct): (+45) 4442 1207
Peter Haahr
Phone (direct): (+45) 4442 1207
Palle Holm Olesen
Phone (direct): (+45) 4442 6175
Phone (direct): (+45) 4442 6175
In North America:
Rasmus Jorgensen
Phone (direct): (+1) 212 878 9607
Rasmus Jorgensen
Phone (direct): (+1) 212 878 9607
Bagsværd, 8 May 2001
Board of Directors
Novo Nordisk A/S
Appendix: Q1 2001 and 2000 - quarterly numbers in DKK
(click here to see tables)
Novo Nordisk A/S
Appendix: Q1 2001 and 2000 - quarterly numbers in DKK
(click here to see tables)