Annual
Report 2023
Novo Nordisk A/S – Novo Alle 1, 2880 Bagsværd, Denmark – CVR no. 24256790
Juan Pablo Villaseñor lives with
obesity and cardiovascular disease.
Until recently, Juan struggled with
stigma and often blamed himself for
not being able to lose weight. Today,
he exercises regularly and spends
quality time with his son.
Watch Juan’s full story here
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
2
Management
review
Consolidated statements
and additional information
3
4
6
Introducing Novo Nordisk
Letter from the Chair and the CEO
Novo Nordisk at a glance
7 Our value creation
8
Performance highlights
10 Strategic Aspirations
11 Purpose and sustainability
23
Innovation and therapeutic focus
30 Commercial execution
34 Financials
40 Risks
41 Risk management
42 Key operational risks
43 Management
44 Board of Directors
47 Executive Management
50 Consolidated financial statements
Income statement and Statement
50
of comprehensive income
51 Cash flow statement
52 Balance sheet
53 Equity statement
54
Notes to the consolidated
financial statements
86
86
87
Consolidated ESG statement
Statement of ESG performance
Notes to the consolidated
ESG statement
95
95
Statements and Auditor’s Reports
Statement by the Board of Directors
and Executive Management
Independent Auditor’s Report
Independent Assurance Report
96
98
on the ESG statement
Additional information
99
100 More information
101 Product overview
102 ESG initiatives
104 Sustainability frameworks and performance
Participants at the Future
Scientists Summer Camp,
organised by Novo Nordisk
and the LIFE Foundation to
celebrate Novo Nordisk’s
100-year anniversary in 2023.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
3
Introducing
Novo Nordisk
4
Letter from the Chair and the CEO
6 Novo Nordisk at a glance
7 Our value creation
8 Performance highlights
Quresha Nur comes from a
village near Mombasa, Kenya. She
was diagnosed with type 1 diabetes
aged seven and was discriminated
against because of it. People in her
community said she could not go to
school or be active, and expectations
of what she would achieve in life
were low. She decided to prove them
wrong. After graduating, Quresha
co-founded a start-up developing a
non-invasive blood sugar monitoring
device. She also launched ‘Diabetes
Champions’, an organisation that
empowers young girls with diabetes.
When you educate a girl, she says,
you educate a whole community.
Watch Quresha’s full story here
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
4
LETTER FROM THE CHAIR AND THE CEO
An extraordinary year of
innovation, growth and impact
It is a rare privilege for
any company to reach its
centenary; and even more
so to arrive at this milestone
in a position of strength.
As we reflect on 100 years
of driving change to defeat
serious chronic diseases, we
nevertheless acknowledge
that what got us here will
not be enough to take us
where we want to go.
The choices we make at this pivotal moment for our company are key to
shaping our long-term vision – one that extends beyond strengthening
leadership positions in our core therapy areas to becoming a driving
force for improving human health worldwide.
As our business continues to grow, so does our role in society. The
global burden of serious chronic diseases casts a long shadow, and
demands innovative, disruptive solutions that are as sustainable as they
are impactful. Our core contribution to this fight remains our industry-
leading therapeutic innovations, which benefited more than 40 million
people living with serious chronic diseases in 2023. Yet we are also
increasingly focused on prevention as we seek to understand and
address the root causes of the diseases we treat.
The unmet needs in type 2 diabetes and obesity are growing by the
day, and the rising prevalence of these closely related threats to global
health has created surging demand for our GLP-1-based therapies. This
has enabled us to reach more patients than at any point in our 100-year
history, contributing to strong sales growth across North America and
International Operations. However, it has also increased pressure on
our supply chain, resulting in periodic constraints across our portfolio
as we strive to keep pace with demand.
We have responded by investing heavily in expanding our production
capacity with the aim of serving millions more patients worldwide. In 2023
alone, we announced investments totalling more than DKK 75 billion
President and CEO, Lars
Fruergaard Jørgensen (left)
and Chair of the Board of
Directors, Helge Lund (right).
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
5
in the expansion of our production sites across the globe. With
The past year has seen us make significant progress on our pipeline.
supporting a similar transition among our 60,000-plus network of
construction now underway on these projects, we strive to operate our
The SELECT trial showed that semaglutide 2.4 mg reduces the risk of
suppliers, with the aim of significantly cutting carbon emissions across
existing facilities 24 hours a day, seven days a week, as we produce
more of our life-changing medicines than ever before.
major adverse cardiovascular events by 20% in people with obesity
compared to placebo, prompting us to seek label updates for Wegovy®,
while the FLOW kidney outcomes trial for semaglutide closed early
our supply chain.
The resilience and dedication of our growing global workforce
Our response to supply challenges does not stop there. We are also
following a positive analysis of interim data. Novel combination therapy
have been instrumental in scaling our operations in the face of
changing the way we launch and distribute our products, making sure
CagriSema entered phase 3 development in both type 2 diabetes and
unprecedented demand. As we onboard more colleagues than ever
we do this in a responsible manner with a clear focus on safeguarding
obesity, and insulin icodec, potentially the world’s first once-weekly
before, we are focusing on making Novo Nordisk a more diverse
access to appropriate treatment options for our existing patients.
basal insulin, is pending regulatory approval. We have also expanded
and inclusive place to work, nurturing a culture built on openness,
Recent examples of this refined approach include the launches of
Wegovy® in the UK and Germany, where we are collaborating with
health authorities to ensure that some of those in greatest need of
our footprint in cardiovascular disease with the acquisition of
accountability and respect. Above all, we remain a purpose-driven
ocedurenone for uncontrolled hypertension, and bolstered our
company, guided by a clear ambition to drive change to defeat serious
late-stage pipeline in rare blood disorders with phase 3 trials of Mim8
chronic diseases, building on our heritage in diabetes. Our position
medical intervention can access our flagship obesity therapy.
in haemophilia and etavopivat in sickle cell disease.
today in the vanguard of progressive global businesses is a testament
to the strength and longevity of that purpose – and to the drive and
Improving health equity remains a cornerstone of our commitment to
Furthermore, we continue to reap the rewards of recent partnerships
motivation it provides for our people all over the world.
patients, and we are working hard to enhance access to care worldwide.
and investments in novel technology platforms, with our first-ever RNA
Our new production partnership with manufacturer Aspen
interference-derived therapy, Rivfloza™, now approved in the US. The
We would like to extend our gratitude to all colleagues for their
Pharmaceuticals in South Africa will significantly increase the supply
recent expansion of our R&D presence in the Greater Boston area – a
unwavering commitment and invaluable contributions during a
of affordable insulin to the African continent, while long-established
initiatives, including Changing Diabetes® in Children and our Access
to Insulin Commitment, continue to support vulnerable patients in
low- and middle-income countries. In the US, a growing number of
world-renowned life sciences cluster – will potentially open the door to
particularly demanding year, and to our shareholders for their
even more collaboration opportunities as we seek to accelerate our
continued support of our company.
drug discovery and development efforts.
people living with serious chronic diseases have been able to access
Nevertheless, we understand that it will take more than medicine
our expanded range of affordability offerings, which include unbranded
to transition from a disease-focused company to one that prioritises
biologics, low-cost human insulin and our Patient Assistance Program.
broader human health to the benefit of society at large. Leveraging
Despite these efforts, the burden of chronic diseases on healthcare
Diabetes programme, we are enhancing our prevention efforts,
Chair of the Board
President and CEO
a decade’s worth of insights from our pioneering Cities Changing
Helge Lund
Lars Fruergaard Jørgensen
systems is only set to grow, pushing us to break new ground in our
pursuit of innovative treatments. To this end, we are building a pipeline
expanding our partnership with UNICEF to address childhood obesity,
and establishing a Transformational Prevention Unit to deliver scalable,
of Directors
of considerable breadth and depth, powered by the interplay between
preventive solutions to the obesity pandemic.
our world-class in-house R&D capabilities and an increasing focus on
external innovation and business development. Our distinct ownership
Innovation plays an equally important role in our ambition to reach net
structure, with the Novo Nordisk Foundation retaining the majority vote,
gives us the security we need to take a long-term perspective on our
zero emissions across our entire value chain by 2045 – particularly with
our manufacturing output at an all-time high. Having already switched
investments and strategies.
our production sites to sourcing 100% renewable power, we are now
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
6
Our purpose and strategy
Our business is built around the Novo Nordisk Way, our commitment to be a sustainable
business and our clear patient-centric purpose: driving change to defeat serious chronic
diseases. Our key contribution is to discover and develop innovative medicines and make
them accessible to patients throughout the world. We will strengthen our leadership in
diabetes and obesity, secure a leading position within rare disease and establish
ourselves in cardiovascular disease (CVD). We also aim to build a presence in emerging
therapy areas, such as metabolic dysfunction-associated steatohepatitis (MASH), chronic
kidney disease (CKD) and Alzheimer’s disease (AD), and to move toward disease-modifying
and curative therapies.
Novo Nordisk
at a glance
Novo Nordisk is a leading global healthcare company,
founded in 1923 and headquartered in Denmark.
41.6
million people living with
diabetes and obesity reached
Diabetes
Strengthen leadership
by offering innovative
medicines and driving
patient outcomes
o
N
v o N ordisk W
a
y
232,261
DKK million
in net sales
102,574
DKK million
in operating profit
64,319
employees
worldwide
80
countries with
affiliates
68,326
DKK million
in free cash flow
5
countries with
R&D facilities
Driving change
to defeat serious
chronic diseases
S
u
stainable b u s i
e ss
n
Rare Disease
Secure a leading position
by leveraging full portfolio and
expanding into adjacent areas
Obesity
Strengthen leadership through
market development and by
offering innovative medicines and
driving patient outcomes
Cardiovascular &
Emerging Therapy
Areas1
Establish position in
cardiovascular disease and
build a presence in emerging
therapy areas
1. Other Serious Chronic Disease (OSCD) has been renamed to Cardiovascular & Emerging Therapy Areas (CETA) to reflect that cardiovascular disease has
been the main strategic priority within OSCD.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
7
Our value creation
We strive to be a sustainable company, creating value for society and for our future endeavours. We do business in a financially,
environmentally and socially responsible manner and we do this the Novo Nordisk Way. By succeeding, we will create long-term
value for people with chronic diseases, employees, partners, shareholders and society.
Resources
Research and development
Manufacturing
Distribution
Patients
Creating long-term value
Insights from patients,
healthcare experts
and partners
Raw materials
Diverse talent
Financial resources
Reached an all-time
high 41.6 million people
living with diabetes
and obesity
Reached 6.7 million
vulnerable patients with
our insulin medicines
through access and
affordability initiatives
Invested over DKK 45
billion in R&D – a 35%
increase vs 2022
Invested more than
DKK 25 billion to meet
demand for current
and future products
Added more than
9 thousand employees
bringing Novo Nordisk’s
total workforce to over
64 thousand, while
supporting job-creation
amongst our suppliers
Reduced our
CO2 equivalent emissions
from operations and
transportation by 34%
vs 2019, while supporting
our 60,000-plus suppliers
with the transition to
100% renewable power
A total tax
contribution of
DKK 51 billion
Paid out DKK 61.7
billion via dividends
and share buybacks to
shareholders, including
Novo Holdings A/S
The Novo Nordisk Foundation
holds 77.1% of votes and 28.1%
of shares in Novo Nordisk A/S
through Novo Holdings A/S
The Novo Nordisk Foundation
awards grants in three strategic
areas: Health, Sustainability and
Life Science Ecosystem. In 2023,
more than DKK 9 billion were
awarded in grants.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
8
PERFORMANCE HIGHLIGHTS
Our strategy execution progress
Strategic Aspirations 2025
Progress
Purpose and
sustainability
Progress towards zero environmental impact
Being respected for adding value to society
• Carbon emissions from operations and transportation decreased by 34% compared to 2019 (decreased by 8% compared to 2022)
• Medical treatment provided to 40.5 million people living with diabetes
• Reached more than 52,000 children in Changing Diabetes® in Children programme
• Human insulin with more flexible storage without refrigeration now approved in 29 countries
• Partnership with Aspen to produce human insulin for people living with diabetes in Africa
Being recognised as a sustainable employer
• Share of women in senior leadership positions has increased to 41% from 39% in 2022
Innovation and
therapeutic focus
Further raise the innovation-bar for diabetes treatment
Develop a leading portfolio of superior treatment solutions for obesity
• Regulatory submission of once-weekly insulin icodec in the EU, the US and China
• Successful completion of phase 3 trial with higher doses of oral semaglutide
• Initiation of phase 3a trial with CagriSema in type 2 diabetes
• FLOW kidney outcomes trial stopped based on interim analysis due to efficacy
• Successful completion of phase 3 trial with IcoSema
• Successful completion of phase 3 trial with 50 mg of oral semaglutide
• Successful completion of SELECT cardiovascular outcomes trial
• Successful completion of STEP HFpEF phase 3 trials
• Acquisition of Inversago Pharma and phase 2 trial initiated with INV-202 and phase 1 trial initiated with INV-347
• Successful completion of phase 1 trial with oral amycretin
Commercial
execution
Financials
Strengthen and progress the Rare Disease pipeline
• Somapacitan approved in the US, EU and Japan for the treatment of growth hormone deficiency in children
Establish presence in Cardiovascular & Emerging Therapy Areas focusing on CVD, MASH and CKD
• Phase 1 trials initiated with cell therapy treatment in heart failure and Parkinson’s disease
• Acquisition of ocedurenone for the treatment of hypertension
• Phase 1 trial initiated with ANGPTL3i mAb
• Phase 1 trial initiated with VAP-1i in MASH
Strengthen diabetes leadership – aim at global value market share of more than 1/3
• Diabetes value market share increased by 1.9 percentage points to 33.8% (MAT)
More than DKK 25 billion in Obesity sales by 2025
• Obesity care sales increased by 154% (CER) to DKK 41.6 billion
Secure a sustained growth outlook for Rare Disease
• Rare disease sales decreased by 15% (CER) to DKK 17.2 billion
Deliver solid sales and operating profit growth
• Sales growth of 36% (CER)
• Operating profit growth of 44% (CER)
Drive operational efficiencies across the value chain to enable investments in future growth assets
• Operational leverage reflecting sales growth
Deliver free cash flow to enable attractive capital allocation to shareholders
• Free cash flow of DKK 68.3 billion
• DKK 61.7 billion returned to shareholders
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
9
PERFORMANCE HIGHLIGHTS
Financial highlights
DKK million
Financial performance
Net sales
Sales growth as reported
Sales growth in constant exchange rates1
2019
2020
2021
2022
2023
2022-23
DKK million
2019
2020
2021
2022
2023
2022-23
Change
Financial ratios
Change
122,021
126,946
140,800
176,954
232,261
31%
Gross margin3
83.5%
83.5%
83.2%
83.9%
84.6%
9.1%
5.6%
4.0%
10.9%
25.7%
31.3%
Sales and distribution costs in percentage of sales
26.1%
25.9%
26.3%
26.1%
24.4%
6.7%
13.8%
16.4%
35.6%
Research and development costs in percentage of sales
11.7%
12.2%
12.6%
13.6%
14.0%
Operating profit
52,483
54,126
58,644
74,809
102,574
37%
Operating margin3
Operating profit growth as reported
11.1%
3.1%
8.3%
27.6%
37.1%
Operating profit growth in constant exchange rates1
5.6%
6.8%
12.7%
14.6%
43.7%
Depreciation, amortisation and impairment losses
5,661
5,753
6,025
7,362
9,413
58,144
59,879
64,669
82,171
111,987
Net profit margin3
Cash to earnings1
Return on invested capital1
Share performance and capital allocation
28%
36%
EBITDA1,2,3
Net financials
Profit before income taxes
Effective tax rate3
Net profit
(3,930)
(996)
436
(5,747)
2,100
Basic earnings per share/ADR in DKK3,5
48,553
53,130
59,080
69,062
104,674
52%
Diluted earnings per share/ADR in DKK3,5
8.21
8.19
9.03
9.01
10.40
12.26
10.37
12.22
19.8%
20.7%
19.2%
19.6%
20.1%
Total number of shares (million), end of year3,5
4,800
4,700
4,620
4,560
38,951
42,138
47,757
55,525
83,683
Purchase of property, plant and equipment3
8,932
5,825
6,335
12,146
25,806
Purchase of intangible assets3
2,299
16,256
1,050
2,607
13,090
Cash used for acquisition of businesses
—
— 18,283
7,075
—
Free cash flow1
Total assets
Equity
34,451
28,565
29,319
57,362
68,326
125,612
144,922
194,508
241,257
314,486
57,593
63,325
70,746
83,486
106,561
Dividend per share in DKK3,4,5
Total dividend (DKK million)4
Dividend payout ratio3,5
Share repurchases (DKK million)
Closing share price (DKK)3,5
51%
112%
402%
19%
30%
28%
43.0%
42.6%
41.7%
42.3%
44.2%
31.9%
33.2%
33.9%
31.4%
36.0%
88.4%
67.8%
61.4% 103.3%
81.6%
98.0%
82.8%
69.0%
73.6%
88.5%
4.18
4.55
5.20
6.20
19,651
21,066
23,711
27,950
41,987
50.5%
50.0%
49.6%
50.3%
50.2%
15,334
16,855
19,447
24,086
29,924
194
214
368
469
698
18.67
18.62
4,510
9.40
52%
52%
(1%)
52%
50%
24%
49%
1. See Non-IFRS financial measures. 2. EBITDA is defined as ’net profit’, adjusted for 'income taxes', 'financial items', 'depreciation and amortisation' and 'impairment losses'. 3. See Financial definitions. 4. Total dividend for the year including interim dividend of DKK 3.00 per share, corresponding to DKK 13,430 million, which was paid in August 2023.
The remaining DKK 6.40 per share, corresponding to DKK 28,557 million, will be paid subject to approval at the Annual General Meeting in March, 2024. 5. As of 13 September 2023, the trading unit of the Novo Nordisk B shares listed on NASDAQ Copenhagen and ADRs listed on the New York Stock Exchange (NYSE) was changed from DKK 0.20 to DKK
0.10. Comparative figures have been restated to reflect the change in trading unit from DKK 0.20 to DKK 0.10.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
10
Strategic
Aspirations
11 Purpose and sustainability
23
Innovation and therapeutic focus
30 Commercial execution
34 Financials
Jenica Leah lives with sickle cell
disease. It is a condition most cannot
see, yet it leads to excruciating
pain and countless complications.
Aged 13, Jenica had a stroke; three
years later, her lungs collapsed.
This was a turning point, where she
decided to tell the untold story of
living with sickle cell disease. Jenica
wrote a children’s book and now
hosts a podcast where she gives this
condition the attention it deserves.
Her quest is one of making the
invisible visible.
Watch Jenica’s full story here
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
11
PURPOSE AND SUSTAINABILITY
Driving change for
a sustainable future
In a world facing urgent societal
and environmental challenges,
Novo Nordisk is playing a proactive
role in the fight against health
inequity and climate change. Guided
by our purpose of driving change
to defeat serious chronic diseases
and a steadfast commitment to
social, environmental and financial
responsibility, we are raising the
bar to stay at the forefront of
progressive global businesses.
Human health is under threat from a perfect storm of health
inequity, climate change and biodiversity loss. As a leading
like Wegovy® must be supplemented with prevention measures
to head off a global pandemic that threatens to overwhelm
healthcare company committed to serving patients across the
healthcare systems. To this end, we have strengthened our
globe, we have an important role to play in addressing these
focus on public-private partnerships and established a
STRATEGIC ASPIRATIONS 2025
1. Progress towards zero
environmental impact
challenges. Our commitment to social responsibility and
dedicated Transformational Prevention Unit tasked with
2. Being respected for adding
minimising our environmental impact are key to achieving our
delivering scalable commercial solutions that can help predict
value to society
purpose and sustainability goals – and essential for our
and pre-empt obesity.
long-term success.
We are also stepping up efforts to reduce our environmental
That is why we are striving to improve access to affordable care
impact by focusing on our supply chain emissions. Having already
for vulnerable patients across the globe. More than three
switched our production sites to sourcing 100% renewable power
quarters of people with diabetes, for example, live in low- and
in 2020, we are now focused on supporting our 60,000-plus
middle-income countries, and that proportion is likely to grow
suppliers through a similar transition, with the aim of reaching
as global prevalence rises from an estimated 537 million adults
net zero emissions across our full value chain by 2045.
today to a predicted 643 million by 2030. Although we are now
serving more people with diabetes than ever before, expanding
To ensure that sustainability is integrated into Novo Nordisk’s core
our reach by more than four million patients to a total of 40.5
business, we have a series of governance measures in place that
million last year, we recognise the need to do more.
supplement the incorporation of environmental, social and
financial responsibility in our Articles of Association. These include
3. Being recognised as
a sustainable employer
Our key contribution to society remains our therapeutic
innovation. However, we realise it will take more than medicine
our Sustainability Advisory Council, established in 2022, which
provides external input on our goals from experts in academia,
For an overview of our purpose and
sustainability initiatives, frameworks
to defeat serious chronic diseases. This need is particularly
public policy and patient advocacy, and an executive remuneration
and performance, see the tables on
acute in obesity, where medical intervention with treatments
package directly linked to our progress on sustainability targets.
pages 102-104.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
12
Double materiality assessment
Novo Nordisk conducted an initial double materiality
The preliminary, material environmental topics reflect Novo
assessment in 2023 to determine which environmental, social
Nordisk’s environmental initiatives to reduce carbon emissions
and governance (ESG) topics are material for the company.
and promote a circular economy, for example on plastic. ESG
This assessment considers both the impact of Novo Nordisk’s
topics such as biodiversity and water reflect the company’s
business on society and the environment (impact materiality)
dependence on nature-based resources. To this end, Novo
and how ESG matters affect the company (financial materiality).
Nordisk is already increasing sustainability efforts directly
The assessment involved experts and leaders from within Novo
related to nature and biodiversity. Moreover, the company
Nordisk, as well as input from external stakeholders, such as
strives to limit any negative effects resulting from its business
patient organisations, suppliers and investors.
operations, including pollution.
The purpose of the assessment is to prepare for the
Business conduct reflects our efforts to adhere to the highest
implementation of the Corporate Sustainability Reporting
ethical standards, including bioethics. Overall, Novo Nordisk
Directive (CSRD) in 2024. It covers all topics defined in the CSRD,
aims to be respected for its contributions to society and to
along with other ESG topics relevant to Novo Nordisk. The table
build trust through its sustainability efforts.
on the right shows the preliminary, aggregated results of the
assessment, and includes both current and potential ESG topics
from a short-, medium- and long-term perspective. The ESG
topics will help guide the preparation of the company’s ESG
reporting from 2024 onwards.
Many of the preliminary, material ESG topics reflect Novo
Nordisk’s strategic sustainability focus. For social topics, this
includes our efforts to provide access to life-saving medicines
without compromising safety or quality, improve patients’
quality of life and support resilient healthcare systems.
Workers’ wellbeing, both within and outside of our operations,
reflects the importance of remaining a relevant and attractive
workplace while respecting adequate working conditions. We
also consider our local impact in the communities we operate
in and pay tax where value is created.
Preliminary assessment of material ESG topics
Climate change
Patient protection1
and quality of life
Business conduct
Resource use and
Own workers
Bioethics
circular economy
Water and marine
Workers in the
resources
value chain
Biodiversity and
Sustainable
ecosystems
tax
Pollution
Affected
communities
1. Includes topics related to consumers and end-users.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
13
Cutting emissions in
collaboration with our suppliers
According to the World Health Organization, climate change is
However, focusing solely on our own activities is not enough.
the single biggest health threat facing humanity. We recognise
We must also ensure our 60,000-plus suppliers play their part
that caring for our patients also means caring for our planet,
and with the healthcare sector as a whole accounting for
approximately 5% of global emissions, we take our environmental
in this transformation, since their activities account for the
majority of our total CO2e emissions – amounting to 98% in
2023. Our target is that all goods and services from suppliers
impact seriously. We are determined to play our part in creating
will be based on 100% sourced renewable power by 2030.
a sustainable, healthy environment for the long term, and our
ambition is bold and simple: to have zero environmental impact.
We are engaging with suppliers in high-impact areas to
To achieve this, one of our key tasks is to decouple the growth
in our business from our CO2 equivalent (CO2e) emissions;
otherwise, our carbon footprint will continue to climb as we
understand how we can collectively reduce emissions using
novel approaches to decarbonisation. This involves working on
innovative Power-to-X solutions that use renewable electricity
to produce green fuels and low-carbon chemicals, or using
serve increasing numbers of patients.
organic waste materials to produce biofuels.
“Focusing solely on our own activities
is not enough. We must also ensure
our 60,000-plus suppliers play their
part in this transformation.”
Recent examples include our membership of the Sustainable
Aviation Buyers Alliance (SABA) to support the expansion of
sustainable aviation fuel facilities, and our partnership with
global logistics firm Maersk on low-emission fuels for ocean
freight. Both these investments are contributing to the global
uptake of innovative green technologies.
On this front, we have made significant progress in curbing
our company’s emissions. Since 2020, all our production sites
have sourced 100% renewable power and we aim to reach zero
CO2e emissions from operations and transportation by 2030.
SCOPE 1, 2 AND 3 EMISSIONS IN 2023
(1,000 tonnes CO2e)
Scope 1:
Direct emissions from owned or
controlled sources
Scope 2:
Indirect emissions from the
generation of energy purchased
from an utility provider
Scope 3:
All indirect emissions – not included
in scope 2 – that occur upstream and
downstream in our value chain
Target 2045: net zero CO2e emissions across
our full value chain
15
78
3,738
EMISSIONS FROM OPERATIONS
AND TRANSPORTATION
(1,000 tonnes CO2)1
309
221
203
170
174
2019
2020
2021
2022
2023
Company cars (scope 1)
Business flights (scope 3)
Product distribution (scope 3)
Office buildings and
laboratories (scope 1, 2)
Production (scope 1, 2)
Target 2030: zero CO2e emissions
from operations and transportation
1. Emissions in 2023 are measured in CO2e.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
14
Reducing our
plastic footprint
Minimising the use of plastic derived from fossil fuels is a
of pioneering take-back programmes across Denmark, the UK,
priority for Novo Nordisk – and a significant challenge given the
France and Brazil, and in 2023 we established the world’s first
rapid growth in demand for our medical injection devices. We
industry solution for recycling injection pens in Denmark.
currently manufacture more than 800 million pre-filled plastic
Pharmaceutical companies Lilly, Sanofi and Merck have all
pens every year, equivalent to some 14,000 tonnes of plastic.
joined the initiative, and we now share a goal of recycling 25%
As the number of patients we serve continues to grow, those
of the pens distributed by all four companies in Denmark within
numbers will rise markedly unless we take decisive action.
the first 12 months.
We are tackling our plastic challenge on multiple fronts, with
Another important initiative involves rethinking medicine
a threefold ‘reduce-change-avoid’ approach. This includes
delivery by switching from disposable to reusable devices –
reducing plastic consumption by converting to reusable
some with an expected lifespan of up to 5 years. Over the past
devices, changing to the use of non-virgin-fossil plastics in our
year, we have converted selected products in a number of
device production and harnessing recycling to avoid plastic
countries and we expect to switch more in 2024. We are also
ending up in landfill.
“In 2023 we established the world’s
first industry solution for recycling
injection pens in Denmark.”
steadily building device durability into the development of new
medicines and expect that a trend from daily to once-weekly
administration for many products will contribute to reduced
plastic use per patient in the long term.
In addition, we are exploring more sustainable ways to produce
plastic. A good example is a new agreement signed by Novo
Nordisk, alongside the LEGO Group, to buy e-methanol from
The task is not simple. When it comes to recycling, for example,
European Energy when the world’s first large-scale production
used injection pens cannot be dealt with in the same way as
plant for the commodity starts up in Denmark in 2024. The
other household recycling because they are classified as
medical waste, which most countries are not equipped to
handle. To address this challenge, we have expanded a series
e-methanol – made from renewable electricity, water and
captured biogenic CO2 – will help us to create lower-carbon
plastics for use in our medical devices.
Injection pens’ components
that have been discarded
from our production lines in
Hillerød, Denmark.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
15
Dr. Karaireho Silver Bahendeka
is a physician for diabetes
and endocrinology at
St Francis Nsambya Hospital
in Kampala, Uganda.
Supporting more
people with diabetes
With the number of adults living with diabetes across the globe
of around four million people – a significant increase on the
predicted to grow from 537 million today to 643 million by 2030,
500,000 we currently serve. Sub-Saharan Africa is currently home
it is those in the most vulnerable settings who struggle the most
to an estimated 24 million adults living with diabetes.
to access the treatment they need. Last year, we reached more
than 40.5 million people with our diabetes medicines – an
The human insulin produced by the collaboration will be
increase of 4.2 million on 2022 – but we recognise the need to
distributed at low-cost as part of Novo Nordisk’s Access to
do more. For that reason, we are committed to improving
Insulin commitment, which reached 2.4 million people in 2023.
affordability for vulnerable populations, increasing availability
The programme guarantees a ceiling price of USD 3 per vial in
by strengthening supply chains and expanding the capacity to
77 low- and middle-income countries around the world.
diagnose and manage diabetes worldwide.
However, increasing the availability of insulin alone is not enough.
Over the past year, we reached 6.7 million people living with
To enhance access to equitable care in Sub-Saharan Africa, we
diabetes globally with our insulin medicines through access and
have built a business integrated model – iCARE – which is now
affordability initiatives, and we extended support to more than
active in 49 countries. Through public-private partnerships we
52,000 children with type 1 diabetes through our Changing
Diabetes® in Children programme. In the US, we provided access
to affordable insulin for 1.4 million people and supported a further
aim to improve capacity to treat diabetes, increase affordability
of insulin and enhance patient empowerment. Our ambition is
to reach more than two million vulnerable people living with
2.8 million with initiatives relating to our GLP-1-based therapies.
diabetes in Sub-Saharan Africa by 2030.
On the African continent, we doubled down on our commitment
to improve access to insulin, establishing a new partnership with
PEOPLE REACHED WITH OUR DIABETES MEDICINES (million)
South African pharmaceutical manufacturer Aspen Pharmaceuticals
to increase production for distribution across the region. The
partnership acknowledges the World Health Organization’s call
for sustainable access to quality-assured and affordable medicine
through local manufacture and aims to produce more than 60
million vials by 2026. This is equivalent to the annual requirements
30.0
2019
32.8
2020
34.6
2021 40.5
36.3
2023
2022
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
16
Preventing obesity,
starting with children
The obesity epidemic is one of the greatest threats to global
the globe – zeroes in on exactly these key issues through
health, currently impacting more than 813 million adults
policies, programmes and practices that directly impact the
worldwide and responsible for five million deaths each year.
nutrition, wellbeing and development of children.
In addition, obesity impacts the sustainability of health
systems and economic productivity. While Novo Nordisk’s core
Since its launch in 2019, the partnership has positively
contribution to the fight remains our therapeutic innovations,
impacted the lives of more than 2.7 million children and
which reached more than 1.1 million people worldwide in
caregivers across Latin America and the Caribbean. Now it is
2023, we recognise that medicine alone will never be enough
expanding its reach, bringing its proven approach to new
to defeat obesity. We are therefore committed to addressing
geographies with an increased focus on driving policy change
the disease holistically by scaling up our focus on prevention
at national level and action at city level.
– and nowhere is this more urgent than in childhood.
More than 310 million children and adolescents are expected to
are focusing on interventions with demonstrable track records.
be living with obesity by 2030, with those in vulnerable settings
These include advocating for healthy school food regulations
more at risk. These individuals are more likely to develop early-
in Brazil, addressing unhealthy food marketing directed at
onset type 2 diabetes, and their weight in early life can also be a
children online in Mexico and trialling innovative measures to
strong predictor of adult obesity and cardiometabolic disease.
improve urban food retail environments in Indonesia.
Through local engagement and cross-sector collaboration, we
We believe that preventing childhood obesity is a shared
societal responsibility that requires systemic change. Many
The partnership will draw upon insights from our Cities Changing
Diabetes programme, now active in 47 cities globally, which over
of the risk factors driving the epidemic are outside of an
the past decade has addressed the systemic issues underpinning
individual’s control, reflecting rapid urbanisation and the
the rise in type 2 diabetes and obesity in urban environments.
health challenges that come in its wake, from physical
Our broader obesity prevention efforts will be boosted by our
inactivity to the prevalence of foods high in fats, sugar and salt.
recently-established Transformational Prevention Unit, a
semi-autonomous team of multi-disciplinary experts tasked with
Our childhood obesity partnership with UNICEF – which was
delivering high-impact, scalable and accessible solutions that can
expanded in 2023 and aims to reach 10 million children across
predict and pre-empt obesity and its consequences.
Girls playing in the Mexican state of Chiapas.
Mexico was among the launch countries for
our partnership with UNICEF, and Mexico City
was the first metropolis to join Cities Changing
Diabetes. Photo: UNICEF.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
17
Empowering colleagues through
diversity and inclusion
Diversity and inclusion are central to our business and
In the context of the rapid growth of our global organisation,
purpose. In our rapidly growing organisation, we aim to create
this is no small feat. We added more than nine thousand
an inclusive culture where all employees feel valued and are
employees to Novo Nordisk in 2023, and have gone to great
given equal opportunities to realise their potential and where,
lengths to sharpen our focus on onboarding and upskilling
together, we better reflect the diversity of the patients and
our new colleagues into their new roles, nurturing a workplace
communities we serve. Encouraging diverse perspectives and
culture built upon foundational values of openness,
promoting inclusive leadership adds value to Novo Nordisk by
accountability and respect. We measure our success in this
bringing out the best in our people, fostering new ideas and
regard by tracking employee engagement via a yearly
sparking innovation.
all-company Evolve survey, recording an overall engagement
score of 86% in 2023 – up from 85% in 2022 and placing us in
Our aim is to achieve balanced gender representation across
the top quartile of Most Engaged Companies for the first time.
all managerial levels, with a minimum of 45% women and 45%
men in senior leadership roles by the end of 2025. There is still
work to be done but we are making significant progress. At the
end of 2023, 41% of senior leadership positions were filled by
women, compared to 39% one year earlier.
Gender is only one element of diversity, and we want to build
a more representative workforce across all dimensions,
including ethnicity, race, age, nationality, disability status
WOMEN IN LEADERSHIP (%)
EVP/SVP
CVP
VP
Senior leadership
and sexual orientation – not to mention diversity of thought.
Director
We are committed to including these important parameters
globally as we embed them into our people processes and the
employee experience, from initial attraction and recruitment
through to talent development and leadership training.
Manager and team lead
All leaders
2019
2020
2021
2022
2023
18
33
35
33
43
40
40
24
37
36
35
41
42
41
28
39
36
36
44
43
43
29
40
40
39
44
45
44
36
41
42
41
47
46
46
Michele De Gier Gustafsson
heads a clinical digital systems
team in Søborg, Denmark.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
18
Statutory gender reporting
under Danish law
inclusion brings value to the company, by enabling a diverse line of
To ensure alignment between tax authorities regarding the allocation of
thought, increasing innovation and leading to better decision-making.
profit between our entities, we aim to have Advance Pricing Agreements
and similar tax rulings in place for geographies representing around 70%
The policy focuses on three primary drivers: mitigating bias, creating an
of our revenue worldwide.
inclusive workplace and having leaders serve as role models. Its most
significant activities include yearly equal pay reviews, a global gender-
Our tax policy has been approved by the Board of Directors. Read more
Listed companies not having equal representation of genders on the
neutral parental leave policy, tracking of gender representation across
about this at: www.novonordisk.com/sustainable-business/esg-portal/
Board of Directors are required to set a target for the share of the
all managerial levels and aspirational gender diversity targets.
principles-positions-and-policies/tax-policy.html.
underrepresented gender. As of 1 January 2023, listed companies are
also required to set a target and a policy for the share of the
underrepresented gender in upper management1.
SHARE OF THE UNDERREPRESENTED GENDER (2023)2
Share of the
underrepresented gender
Target for the share of the
under represented gender
2022
2023
Board of Directors3
33% (3/9)
38% (3/8)
Not required
Upper management4
38% (19/50)
42% (19/45)
Min. 45% by 2025
Further reporting on diversity and inclusion is included in note 8.3 on
In addition to corporate income taxes, we also pay other taxes. Please
Gender diversity, and for the Board of Directors, also in the Corporate
refer to note 8.7 on Total tax contribution for further information.
Governance Report. Novo Nordisk’s diversity and inclusion policy is
available at: www.novonordisk.com/sustainable-business/esg-portal/
principles-positions-and-policies/diversity-inclusion-policy.html.
TAXES BY REGION (THREE-YEAR AVERAGE 2021-2023)
Region
rights6 Production7 Sales8
Intellectual
property
Corporate
income taxes
(DKK billion)
Total tax
contribution
(DKK billion)
Sustainable tax approach
International Operations
Denmark
Our overall guiding principle within taxation is to have a sustainable tax
EMEA (excluding Denmark)
As of 31 December 2023, the Board of Directors is regarded as having
operating our business in a responsible and transparent manner. Our legal
approach, emphasising our business-anchored approach to managing
the impact of taxes while remaining true to the Novo Nordisk values of
China
Rest of the world
equal gender representation and is therefore not legally required to set
a gender target5. Since diversity remains important for the Board, it has
maintained a voluntary 2025 target of having at least three shareholder-
structures are based on business-anchored considerations and substance.
North America Operations
US
Consequently, we pay tax where value is generated and always respect
Total three-year average
15.3
39.9
elected Board members who are men and three who are women.
international and domestic tax rules. As a global business, we conduct
As of 31 December 2023, the share of the underrepresented gender in
cross-border trading, which is subject to transfer pricing regulations. We
apply a ‘Principal structure’ in line with OECD principles, meaning all legal
upper management at Novo Nordisk A/S is 42%. Accordingly, we have
entities, except for the principals, perform their functions under contract on
achieved equal gender representation as defined under the Danish
behalf of the principals. As a result, entities contracted by the principals are
companies act. However, we have not yet achieved the targeted level of
being allocated an activity-based profit according to a benchmarked profit
45% and therefore maintain our diversity and inclusion policy to keep
making progress. This policy states our strong belief that diversity and
margin. The tax outcome of this operational model is reflected in the
overview to the right, which shows our corporate income taxes by region.
Minor or no activities
Share of category
Significant activities
1. Cf. the Danish Companies Act, section 139 (c). 2. Cf. the Danish Financial Statements Act. section 99(b). 3. Shareholder-elected Board members of Novo Nordisk A/S. 4. Chief executive officer and executive vice presidents employed by Novo Nordisk A/S as well as their direct reports, also employed by Novo Nordisk A/S, with leadership responsibility.
5. Cf. the Danish Companies Act, section 139(c)(1)(1). 6. Intellectual property rights based on sales from where intellectual property rights are located. 7. Production based on number of production employees in the region. 8. Sales based on location of the customer.
14.2
12.2
1.0
0.6
0.4
1.1
1.0
32.8
21.6
5.4
2.6
3.2
7.1
7.0
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
19
Setting high standards
for how we do business
Our business has come under increasing scrutiny over the past
compliance committees, and we are ready to step up our
year – particularly with regard to our GLP-1-based products – as
monitoring efforts by significantly increasing the number
the level of public interest in our company has grown significantly.
of internal checks and reviews in 2024.
Against this backdrop, we have remained steadfast in our
More broadly, our new global code of conduct sets out the
commitment to uphold high ethical standards and adhere to
fundamental principles and required behaviours for our employees
the regulatory requirements of different authorities. In the face
and collaborators and is rooted firmly in the Novo Nordisk Way
of unprecedented demand for our medicines – particularly our
Essentials – a foundational set of guiding principles that shape and
GLP-1-based therapies – we have also strengthened our focus
inform everything we do. We use a unique, systematic approach
on ensuring that only the approved indications of our products
known as facilitation to ensure everyone lives up to these
are promoted.
Essentials. In 2023, 42 units and approximately 2,300 employees
were facilitated, compared to 36 units and 1,700 employees in
At times, however, we were challenged in our aspirations. In the
2022. Any issues are addressed locally, and a consolidated report
UK, for example, we received a two-year suspension from The
is shared with the Board of Directors and Executive Management.
Association of the British Pharmaceutical Industry (ABPI) in 2023
after the trade body found Novo Nordisk to be in breach of the
We also measure the extent to which we live up to societies’
industry’s self-regulatory code of practice. The breach related
expectations through several other governing processes. These
to the provision of insufficient information regarding our
include our company reputation score among key stakeholders
sponsorship of a weight management course offered by a
third-party clinical training provider for healthcare professionals.
(see pages 41-42 for more information), regular product quality
and supplier audits, and an enduring commitment to ensuring
the accuracy of our financial and ESG reporting via both
When mistakes are made, we learn from them. Over the past
internal and external audit processes. Our financial reporting
year, we invested substantial resources in robust training for
and associated processes are audited according to the
colleagues with the aim of ensuring we always deliver the right
message, whether we are addressing the general public
Sarbanes-Oxley Act by an independent audit firm elected at the
Annual General Meeting, and we voluntarily include an
or healthcare professionals. We have also strengthened our
Assurance Report from an independent external auditor for
governance processes in key affiliates via local ethics and
ESG reporting in the Annual Report.
The Novo Nordisk Way Essentials
1
2
3
4
5
6
7
8
9
We create value by having a patient-centred
business approach.
We set ambitious goals and are empowered
to achieve them.
We are accountable for our financial, environmental
and social performance.
We are curious and innovate for the benefit
of patients and society at large.
We build and maintain good relations with
our stakeholders.
We value diversity and treat everyone
with respect.
We focus on performance and personal development.
We have a healthy and engaging working
environment.
We strive for agility and simplicity
in everything we do.
10
We never compromise on quality and ethics.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
20
Corporate Governance
Corporate Governance reporting
Novo Nordisk reports in accordance with the Danish Corporate
Data ethics
Novo Nordisk has adopted a set of data ethics principles to support ethical
Governance Recommendations designated by Nasdaq Copenhagen as
decision-making when using data. In 2023, we trained employees in our
well as the Corporate Governance Standards of the New York Stock
Data Ethics Principles, which were expanded to identify and address risks
Exchange applicable to foreign private issuers.
related to artificial intelligence. You can read more about these principles,
Governance structure
The shareholders of Novo Nordisk exercise their rights at the Annual
In 2023, Novo Nordisk complied with the Danish Corporate Governance
www.novonordisk.com/data-privacy-and-user-rights/data-ethics.html.
in accordance with the Danish Financial Statements Act Section 99d, at:
General Meeting, which is the supreme governing body of the company.
Recommendations as we either complied with or explained our approach
The general meeting inter alia adopts the company’s Articles of
to the recommendations. You can find further information about our
Association, approves the Annual Report and elects the Board of Directors.
corporate governance practices in our 2023 Corporate Governance Report,
Any shareholder has the right to raise questions at general meetings.
available at: www.novonordisk.com/about/corporate-governance.html.
in accordance with section 107b of the Danish Financial Statements Act,
Resolutions can generally be passed by a simple majority. However,
resolutions to amend the Articles of Association require two-thirds of the
Remuneration
votes cast and capital represented, unless other adoption requirements
Executive remuneration is linked to performance on financials as well as
are imposed by the Danish Companies Act.
non-financials (e.g. innovation, sustainability). Novo Nordisk has
prepared a separate Remuneration Report describing the remuneration
Novo Nordisk has a two-tier management structure consisting of the Board
awarded or due during 2023 to the Board of Directors and Executives
of Directors and Executive Management. The governance structure and
registered with the Danish Business Authority. The Remuneration Report
rules of Novo Nordisk are further described in our Articles of Association and
is submitted to the Annual General Meeting for an advisory vote. The
our Corporate Governance Report, both available at: www.novonordisk.com.
Remuneration Policy and the Remuneration Report are available at:
www.novonordisk.com/about/corporate-governance.html.
Foundation ownership
Novo Holdings A/S, a Danish company wholly owned by the Novo Nordisk
Foundation, holds the majority of votes at Novo Nordisk A/S’ general
meetings. The combination of foundation ownership and stock listing
Disclosure regarding change of control provisions
The EU Takeover Bids Directive1, as partially implemented by the
Danish Financial Statements Act, requires listed companies to disclose
enables Novo Nordisk to embark on long-term sustainable strategies
information that may be of interest to the market and potential
while maintaining short-term transparency on performance. Our
foundation ownership supports the overarching imperative to be both
take-over bidders, in particular in relation to disclosure of change-of-
control provisions in material contracts.
commercially successful and responsive to the wider needs of society.
The objectives of the Novo Nordisk Foundation are to provide a stable
effect, alter or terminate upon a change of control of Novo Nordisk following
basis for the commercial and research activities of Novo Nordisk and
Novozymes, and to support scientific, humanitarian and social causes.
implementation of a takeover bid. In relation to the registered management
of Novo Nordisk A/S, the current employment contracts allow for severance
Please refer to the section about value creation on page 7. For more
payments of up to 24 months’ fixed base salary plus pension contributions
information about the ownership structure of Novo Nordisk, see page 38.
in the event of a merger, acquisition or takeover of Novo Nordisk.
It is disclosed that Novo Nordisk does not have any material contracts that take
1. Directive 2004/25/EC.
In 1924, August Krogh
announced that profits from
the sale of insulin would be
used for the public good.
This year, the Novo Nordisk
Foundation celebrates its
100-year anniversary.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
21
ESG Governance
We strive to conduct our activities in a financially, environmentally
and socially responsible way. To achieve this objective and
integrate sustainability considerations in Novo Nordisk’s strategy
and core business, ESG is anchored and discussed in relevant
governance bodies across the organisation.
Our ESG Governance model includes the Board of Directors’
and Board Committees’ oversight and advice on ESG matters
such as strategic direction and ambition level, as set by Executive
Management. Their oversight also includes approval of our ESG
reporting, variable remuneration components and more.
Operational decisions are anchored at the executive level in the
Sustainable Business Execution Steering Group. It is composed
of our Commercial Strategy & Corporate Affairs executive vice
president and other senior sustainability leaders, including
representatives of North America and International Operations.
Supported by the underlying steering groups, the Sustainable
Business Execution Steering Group provides guidance on
implementation related to our social and environmental initiatives.
To ensure a well-rounded governance setup, we actively seek
external input through our Sustainability Advisory Council.
Comprised of experts from various fields, this independent body
offers invaluable perspectives that challenge us to continuously
improve our sustainability efforts. They provide constructive
feedback on our current initiatives and help us explore innovative
opportunities for the future. You can learn more about the council
and its members at: www.novonordisk.com/sustainable-business/
esg-portal.html.
Audit
Committee
Oversees financial and
ESG reporting.
Remuneration
Committee
Determines executive
remuneration, including
based on sustainability
targets.
Nomination
Committee
Assesses the
competencies of the
Board of Directors,
including within ESG.
Board of
Directors
Oversees strategic
direction and advises
on ambition level.
Executive
Management
Decides on strategic
direction, ambition level,
targets, roadmaps and
central funding, as well as
financial and ESG reporting.
Sustainability
Advisory Council
Provides non-binding
recommendations on our
Strategic Aspirations regarding
purpose and sustainability.
Composed of external experts.
Sustainable Business
Execution Steering Group
Takes operational decisions to
implement Executive Management’s
decisions regarding core
sustainable business priorities.
ESG Reporting
Steering Group1
Provides guidance on
ESG reporting, including
implementation of new
regulatory requirements.
Environmental
steering groups
Drive environmental
initiatives, particularly with
regards to circularity.
Social steering
groups
Drive social initiatives, related
to global health equity, business
ethics and others.
1. The responsibility of the consolidated ESG statement resides in Finance.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
22
EU Taxonomy
Eligibility and alignment
We followed a two-step process to arrive at our Taxonomy disclosures. Firstly,
Accounting policies
Total Turnover consists of total revenue from sale of goods, as defined
we screened the economic activities defined in the EU Taxonomy to identify
under IFRS. The Turnover KPI is defined as Taxonomy-eligible Turnover
those relevant under the Novo Nordisk business model. Based on our review
divided by total Turnover.
and materiality considerations, we identified one new economic activity
The EU Taxonomy is a European sustainability classification framework. It
to report on in 2023: ‘1.2 Manufacture of medicinal products’ under the
Total CapEx consists of additions to fixed assets (including financial
enables corporates to communicate to stakeholders which of their business
environmental objective of ‘Pollution prevention and control’. Furthermore,
lease) and intangible assets. Additions resulting from business
activities have the potential to be considered sustainable (i.e. are Taxonomy-
like in 2022, we report Taxonomy-eligible CapEx for the economic activities
combinations are also included. Goodwill is not included in CapEx as
eligible) and report to which extent eligible activities fulfil EU requirements
‘7.1 Construction of new buildings’ and ‘7.2 Renovation of existing buildings’
it is not defined as an intangible asset in accordance with IAS 38. The
to be considered sustainable (i.e. are Taxonomy-aligned). For each relevant
under the environmental objective ‘Climate change mitigation’.
CapEx KPI is defined as Taxonomy-eligible CapEx divided by total CapEx.
business activity, the company has to disclose how much of its Turnover,
Operating Expenditures (OpEx) and Capital Expenditures (CapEx) can be
Secondly, we evaluated whether we could classify any of our Taxonomy-eligible
Total OpEx consists of direct non-capitalised costs that relate to research
considered eligible and aligned, respectively.
CapEx for economic activity 7.1 and 7.2 as Taxonomy-aligned. Although we
and development, building renovation, short-term lease, maintenance
In 2023 we identified eligible economic activities based on the six published
requirements in the design phase of the projects have not been fully met.
servicing of property, plant and equipment assets. OpEx excludes
environmental objectives . Each of the economic activities was assessed on its
Consequently, the existing projects do not meet the criteria for alignment in
amortisations and impairments. The OpEx KPI is defined as Taxonomy-
have made progress in fulfilling the technical screening criteria, certain
and repair and any other direct expenditures relating to the day-to-day
percentage of Taxonomy-eligibility and, for those related to the environmental
2023. We strive for alignment of certain projects in 2024. Furthermore, we have
eligible OpEx divided by total OpEx.
objectives of ‘Climate change mitigation’ and ‘Climate change adaptation’, also
started investigating the requirements, including CapEx plans, for reporting
on their percentage of Taxonomy-alignment. As a result, we report 100%, 60%
alignment of the activity ‘Manufacture of medicinal products’ with the aspiration
None of our activities contribute to multiple objectives and hence do not
and 5% Taxonomy-eligible Turnover, CapEx and OpEx in 2023, respectively.
of reporting alignment for part of the activities in 2024.
require disaggregation of KPI’s. For the CapEx and OpEx allocations, we
have identified the relevant purchases and measures as well as the
primary related economic activity. Thereby, we ensure that no CapEx or
EU TAXONOMY ELIGIBILITY AND ALIGNMENT1
Turnover
CapEx
OpEx
OpEx is double counted. We are adjusting the R&D cost for
2022
(DKK
2023
(DKK
2022
(DKK
2023
(DKK
2022
(DKK
2023
(DKK
amortisations to not double count these costs, as the amortisation
would also have been part of CapEx in prior years.
Environmental objective
Economic activity2
million)
(%)
million)
(%)
million)
(%)
million)
(%)
million)
(%)
million)
(%)
Total Turnover, CapEx, OpEx
176,954 100% 232,261 100%
23,961 100%
44,498 100%
23,348 100%
31,115 100%
Taxonomy-non-eligible activities (B.)
Climate change mitigation
7.1. Construction of new buildings
7.2. Renovation of existing buildings
N/A N/A
0
0
0%
0%
0
0
0
0%
20,788 87%
17,996
40%
23,348 100%
29,646
95%
0%
0%
1,166
5%
6,010
14%
2,007
8%
2,406
5%
0
0
0%
0%
0
0
Pollution prevention and control
1.2. Manufacture of medicinal products
N/A N/A 232,261 100%
N/A N/A
18,086
41%
N/A N/A
1,469
Eligible not aligned (A.2. / A.1.+ A.2.)3
Eligible and aligned (A.1.)
0
0
0%
232,261 100%
3,173 13%
26,502
60%
0%
0
0%
0
0%
0
0%
0
0
0%
1,469
0%
0
0%
1. A.1., A.2., A.1.+A.2. and B. refer to Annex V to the Commission Delegated Regulation (EU) 2023/2486 of 27 June 2023. Not disclosed data are all either 0 (zero) or not applicable. 2. None of the reported economic activities are Enabling or
Transitional and we do not have any economic activities substantially contributing to ‘Climate Change Adaption’, ‘Water’, ‘Circular Economy’ or ‘Biodiversity’. 3. When allocating CapEx and OpEx to economic activities, we prioritise those that
directly contribute to an environmental objective and for which specific technical screening criteria are set. Secondly, we link CapEx and OpEx associated with our primary economic activity, ‘1.2. Manufacture of medicinal products’.
0%
0%
5%
5%
Contextual information about the KPIs
We consider all Novo Nordisk’s revenue related to Manufacture of medicinal
products. As Taxonomy-eligible, we only include CapEx directly associated
with the manufacturing process or related to construction or renovation of
buildings, hence intangible assets are excluded. This is the main reason for
reported eligibility being less than 100%. Eligible CapEx mainly relates to
the expansion of production capacity and consist of additions to property,
plant and equipment, cf. note 3.2 to the Consolidated financial statements.
Eligible OpEx mainly relates to research and development directly linked to
manufacturing processes. The narrow EU Taxonomy OpEx definition is the
main reason for a reported low eligibility.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
23
INNOVATION AND THERAPEUTIC FOCUS
Broadening our pipeline for
long-term innovation
As the world grapples with the
increasing impact of serious chronic
diseases, Novo Nordisk is amplifying
its research and development efforts
to tackle these global health
challenges head-on. Diseases like
diabetes, obesity, cardiovascular
disease and rare blood disorders
pose significant threats to human
health and society, demanding
urgent action.
Guided by our purpose to drive change to defeat serious chronic
emphasis on business development has resulted in the
STRATEGIC ASPIRATIONS 2025
diseases, we are broadening our pipeline of potential new
acquisition of biotechs including Inversago Pharma and Embark,
treatments with an approach that is as comprehensive as it is
two companies developing novel therapies with a potential
innovative. Building on our 100-year heritage in protein and
application across a range of cardiometabolic diseases.
peptide engineering, we are harnessing the power of novel
1. Further raise the innovation-bar
for diabetes treatment
2. Develop a leading portfolio of superior
research technology platforms, leveraging cutting-edge data
To further expand our capabilities, we have established a
treatment solutions for obesity
science tools and forging new strategic partnerships. This
significant presence in the Greater Boston area, a world-
multi-faceted approach is enabling us to accelerate our research
renowned hub for innovation and cutting-edge science and
efforts and expand our footprint across multiple disease areas.
technology. Through strategic partnerships, such as those
with technology firm Valo Health and the Broad Institute of
As our evolution from a diabetes-focused organisation to a
MIT and Harvard, we aim to accelerate our drug discovery and
3. Strengthen and progress the
Rare Disease pipeline
4. Establish presence in Cardiovascular
& Emerging Therapy Areas focusing
broader cardiometabolic-focused company continues, our
development efforts, expanding our use of human data, artificial
on CVD, MASH and CKD
attention remains on areas with the highest unmet needs – and
intelligence and machine learning and tapping into our partners’
those where we are best positioned to compete. Strengthening
innovative genetics and genomics tools.
our leadership position in both diabetes and obesity remains
our top priority, while expanding our presence in cardiovascular
These extensive, wide-ranging efforts are already yielding
disease and rare blood disorders is also a key focus.
positive results, including the initiation of clinical testing for
cutting-edge cell therapy and siRNA (small interfering ribonucleic
We are stepping up our investment in these areas to build and
acid) treatments. Armed with an increasing array of novel
maintain industry-leading pipelines, while at the same time
seeking new opportunities to complement our in-house
research and development tools, we aim to move a greater
number of projects into clinical testing at a faster pace, reducing
expertise with external innovation. Over the past year, this
the cost per project without compromising safety or quality.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
24
Once-weekly insulin to set
new standard in treatment
Taking diabetes treatment to
the next level with CagriSema
Our company was founded on the discovery and
Insulin icodec has been filed for regulatory
Our determination to raise the bar in diabetes
production of insulin, and we remain committed
approval in the US, EU and China, following phase
treatment is exemplified by CagriSema, our new
to pushing the envelope when it comes to insulin
3a trials that demonstrated superior reductions
investigational therapy for type 2 diabetes that has
innovation. Our investigational once-weekly
in blood glucose levels and reduced incidence of
now entered large-scale phase 3 clinical development.
insulin icodec represents the latest major step
severe hypoglycaemia compared to once-daily
This two-in-one medicine combines semaglutide with
forward in insulin care, potentially changing
basal insulin degludec and insulin glargine U100
the amylin analogue cagrilintide, offering a novel
the basal insulin experience for people living
in insulin-naïve people with type 2 diabetes. If
with diabetes.
approved, insulin icodec will become the first
mechanism to influence the gut-brain axis with the
aim of improving glycaemic control in people living
Rebecca Commanda lives
with type 2 diabetes in
Ontario, Canada.
“If approved, insulin icodec will
become the first once-weekly
basal insulin option for adults
with diabetes, reducing the
number of weekly basal insulin
injections from seven to just one.”
once-weekly basal insulin option for adults with
with type 2 diabetes. Cagrilintide works by reducing
diabetes, reducing the number of weekly
injections from seven to just one.
hunger and increasing satiety signals to the brain,
providing an additive effect to semaglutide.
In the longer term, we are working on further
The decision to move into phase 3 development
improvements in insulin technology. This includes
follows phase 2 results that showed a once-weekly
continuing to pursue the development of
subcutaneous injection of CagriSema reduced
glucose-sensitive insulin, which only becomes
active when the body’s glucose levels start to rise.
long-term blood glucose levels by 2.2 percentage
points and outperformed its individual components
in reducing body weight. CagriSema, which appears
to have a safe and well-tolerated profile, previously
commenced large-scale phase 3 trials in obesity in
2022, reflecting its broad potential across multiple
therapy areas.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
25
Landmark trial underscores
cardiovascular benefits of semaglutide
The success of our ground-breaking SELECT cardiovascular
decades, obesity-related cardiovascular deaths have increased
outcomes trial was a powerful endorsement of the efficacy and
significantly. Obesity leads to cardiovascular morbidity and
clinical importance of semaglutide as a treatment for people
mortality and is associated with risk factors such as high blood
living with obesity and established cardiovascular disease (CVD).
pressure and inflammation.
The study was the largest ever completed by our company,
involving more than 17,500 adults aged 45 and above with
obesity and established CVD but no prior history of diabetes.
The findings demonstrated a 20% reduction in major adverse
cardiovascular events (MACE) for trial participants treated with
semaglutide 2.4 mg compared to placebo – showing that
semaglutide not only helps patients lose weight but can also
improve cardiovascular outcomes.
The trial data showed this effect is consistent regardless of
“It is the first time that an approved
weight management medicine
has been shown to reduce the risk
of heart attacks, strokes and
cardiovascular death.”
patient age, gender, ethnicity and starting BMI (body mass
It is the first time that an approved weight management
index), with risk reductions evident across heart attack,
medicine has been shown to reduce the risk of heart attacks,
cardiovascular death and stroke. Importantly, the effect is seen
soon after treatment initiation, suggesting that weight loss
alone may not fully explain the benefits of semaglutide 2.4 mg
strokes and cardiovascular death. Novo Nordisk has filed for
a label update of Wegovy® in the US and EU based on these
findings, and a decision is expected in 2024. The US Food
in reducing the risk of MACE.
and Drug Administration has granted our submission a
priority review.
Every year almost 21 million people die from CVD, which is
the leading cause of disability and death worldwide. While
cardiovascular mortality has decreased over the past two
Juan Pablo Villaseñor
lives with obesity and
cardiovascular disease in
Ciudad de Mexico, Mexico.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
26
CARDIOVASCULAR & EMERGING THERAPY AREAS
Expanding our footprint in
cardiovascular disease
Next-generation treatments
for rare blood disorders
Cardiovascular disease (CVD) represents one
To date, ocedurenone has been investigated in
of the greatest health challenges of our time.
nine clinical trials, and is currently in phase 3
Our Rare Disease unit – comprising treatments
for rare blood and endocrine disorders – has a
Affecting an estimated 620 million people across
development for the treatment of uncontrolled
growing pipeline of exciting products, including two
the globe, it takes a major toll on quality of life
hypertension in people with CKD. We expect to
potential medicines for rare blood disorders with
and is currently the leading cause of death
initiate further phase 3 trials in the coming years
large unmet medical needs.
worldwide.
as we seek to maximise its full potential.
Mim8, our next-generation bispecific antibody for
At Novo Nordisk, we are determined to reduce
Meanwhile, our first standalone CVD compound,
haemophilia A, is now in phase 3 development.
the risk and burden of living with CVD, and over
ziltivekimab, is currently in phase 3 development
Administered subcutaneously, it works by
the past year we have taken significant steps
for the treatment of atherosclerotic cardiovascular
mimicking the function of the missing clotting
to increase our footprint in this area of huge
disease in people living with CKD. The ZEUS trial
factor VIII and is being tested as a treatment to
unmet need.
will include more than 6,000 patients in 38
prevent bleeds.
countries, with completion expected in late-2025.
In October 2023, we strengthened our CVD
pipeline with the acquisition of ocedurenone in
a deal worth up to USD 1.3 billion. This mature
clinical candidate targets uncontrolled
hypertension – a leading risk factor for
cardiovascular events, heart failure, chronic
kidney disease (CKD) and premature death.
The experimental once-daily oral medicine
etavopivat, also in phase 3 evaluation, offers
potential benefits for people with sickle cell disease
(SCD), a crippling and life-threatening condition
caused by misshapen red blood cells. Acquired as
part of the business development deal that brought
US-based Forma Therapeutics in-house in 2022,
the investigational therapy is designed to modulate
red blood cell health to reduce anaemia, pain,
transfusions and strokes in people living with SCD.
Masahiro Umehara (left)
lives with haemophilia A in
Tokyo, Japan. Pictured here
with his son Masatsugu
and his dog.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
27
Pipeline overview
DIABETES
OBESITY
RARE DISEASE
CARDIOVASCULAR & EMERGING THERAPY AREAS
Project
Indication Description
Phase
Project
Indication Description
Phase
Project
Indication
Description
Phase
Project
Indication Description
Phase
Oral Semaglutide
HD1
NN9924
T2D2
A long-acting GLP-13 analogue, 25.0
and 50.0 mg, intended for once-daily
oral treatment.
Oral Semaglutide
NN9932
Obesity
A long acting GLP-1 analogue
intended for once-daily oral
treatment.
Icodec
NN1436
IcoSema
NN1535
CagriSema
NN9388
GELA
NN9506
T1D4
and T2D
A long-acting basal insulin analogue
intended for once-weekly
subcutaneous treatment.
CagriSema
NN9838
Obesity
T2D
T2D
T2D
A combination of GLP-1 analogue
semaglutide and insulin icodec
intended for once-weekly
subcutaneous treatment.
A combination of amylin analogue
cagrilintide and GLP-1 analogue
semaglutide intended for once-weekly
subcutaneous treatment.
A collaboration with GE Healthcare,
using ultrasound for once-monthly
treatment.
GELA
NN9505
INV-202
NN9440
Amycretin
NN9487
Obesity
Obesity
Obesity
A combination of amylin analogue
cagrilintide and GLP-1 analogue
semaglutide intended for once-weekly
subcutaneous treatment.
A collaboration with GE Healthcare,
using ultrasound for once-monthly
treatment.
A CB-16 receptor inverse agonist
intended for once-daily oral
treatment.
A long-acting co-agonist of GLP-1 and
amylin intended for once-weekly
subcutaneous treatment or once-daily
oral treatment.
Glucose-sensitive
insulin
NN1845
T1D
and T2D
A glucose-sensitive insulin analogue
intended for once-daily subcutaneous
treatment.
OW GLP-1 GIP
NN9541
Obesity
A combination of GLP-1 and GIP
co-agonist intended for once-weekly
subcutaneous treatment.
Pumpsulin
NN1471
DNA
Immuno therapy
NN9041
T1D
T1D
OW GLP-1 GIP5
NN9541
T2D
A novel insulin analogue ideal for use
in closed loop pump systems.
A novel plasmid encoding pre- and
pro-insulin intended for preservation
of beta cell function.
A combination of GLP-1 and GIP
co-agonist intended for once-weekly
subcutaneous treatment.
OW Oral
Semaglutide
NN9904
T2D
An oral version of semaglutide
intended for once-weekly treatment.
Concizumab
NN7415
Haemophilia
A or B
w/wo
inhibitors
A monoclonal antibody against tissue
factor pathway inhibitor (TFPI)
intended for subcutaneous
prophylaxis treatment.
Nedosiran
NN7022
Mim8
NN7769
Primary
hyperoxaluria
type 1
An siRNA targeting lactate
dehydrogenase A (LDHA) intended for
once-monthly subcutaneous
treatment.
Haemophilia
A w/wo
inhibitors
A next generation FVIIIa mimetic
bispecific antibody intended for
subcutaneous prophylaxis of
haemophilia A.
Etavopivat
NN7535
Sickle cell
disease
A second-generation small molecule
PKR-activator intended for once-daily
oral treatment.
Etavopivat
NN7536
Thalassemia A second-generation small molecule
PKR-activator intended for once-daily
oral treatment.
Ziltivekimab
NN6018
CKD8+
ASCVD9
A once-monthly monoclonal antibody
intended for inhibition of IL-610 activity.
Ziltivekimab
NN6018
HFpEF11
A once-monthly monoclonal antibody
intended for inhibition of IL-6 activity.
Ocedurenone
NN6023
CVD12
A small molecule, non-steroidal
mineralocorticoid receptor antagonist
(nsMRA) intended for oral treatment.
ATTR-CM
NN6019
CM4HF
NN9003
Anti-ANGPTL3
mAb
NN6491
CVD
CVD
CVD
An anti-amyloid immunotherapy
intended for intravenous treatment.
An investigational cell therapy
intended for restoring heart function
in people with chronic heart failure.
An ANGPTL3 neutralising sweeping
antibody intended for once-monthly
subcutaneous treatment.
Etavopivat
NN7537
MDS7
A second-generation small molecule
PKR-activator intended for once-daily
oral treatment.
Semaglutide
NN6535
Alzheimer’s A long-acting GLP-1 analogue
intended for once-daily subcutaneous
treatment.
NDec
NN7533
Sickle cell
disease
An oral combination of decitabine and
tetrahydrouridine. Project is developed
in collaboration with EpiDestiny.
Semaglutide
NN9931
MASH13
A long-acting GLP-1 analogue
intended for once-weekly
subcutaneous treatment.
CagriSema
NN9588
MASH
A combination of amylin analogue
cagrilintide and GLP-1 analogue
semaglutide intended for once-weekly
subcutaneous treatment.
A long-acting FGF21 analogue
intended for once-weekly
subcutaneous treatment.
An siRNA targeting LXRa intended for
once-monthly subcutaneous
treatment.
An siRNA targeting MARC1 intended
for once-monthly subcutaneous
treatment.
A VAP-1 inhibitor intended for
once-daily oral treatment.
MASH
MASH
MASH
MASH
Parkinson’s A cryopreserved cell therapy intended
for disease modifying treatment.
Oncology
A GalXC-derived lipid conjugate
one-time subcutaneous treatment.
FGF21
NN9500
LXRa
NN6582
MARC1
NN6581
VAP-1i
NN6561
SC4PD
NN9001
STAT3
NN4002
2022
2023
Phase 1
Phase 2
Phase 3
Submission and/or approval
1. HD: High Dose. 2. T2D: Type 2 diabetes. 3. GLP-1: Glucagon-like peptide-1. 4. T1D: Type 1 diabetes. 5. GIP: Gastric inhibitory polypeptide. 6. CB-1: Cannabinoid receptor-1. 7. MDS: Myelodysplastic syndromes. 8. CKD: Chronic kidney disease.
9. ASCVD: Atherosclerotic cardiovascular disease. 10. IL-6: Interleukin-6. 11. HFpEF: Heart failure with preserved ejection fraction. 12. CVD: Cardiovascular disease. 13. MASH: Metabolic dysfunction-associated steatohepatitis.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
28
Research and development progress
DIABETES
Regulatory events
OBESITY
Regulatory events
RARE DISEASE
Regulatory events
CARDIOVASCULAR & EMERGING THERAPY AREAS
Clinical progress
• Rybelsus® (oral semaglutide) was approved as first-line
• Wegovy® (semaglutide 2.4 mg) was approved for treatment
• Marketing authorisation application was submitted to the
• Phase 3a trial, HERMES, investigating ziltivekimab in
treatment option by the FDA.
of obesity in adolescents by the EMA.
• Results from Rybelsus® (oral semaglutide) formulation
change and PIONEER PLUS were submitted to the EMA.
• Marketing authorisation application was submitted to the EMA,
FDA, CDE and PMDA for approval of insulin icodec for treatment
of both type 1 diabetes (T1D) and type 2 diabetes (T2D).
• Marketing authorisation application was submitted to the
EMA for the approval of dasiglucagon for treatment of
severe hypoglycaemia.
Clinical progress
• Phase 3b trial, PIONEER PLUS, investigating 25.0 and 50.0 mg
oral semaglutide in patients with T2D was completed.
• Wegovy® (semaglutide 2.4 mg) was approved as an adjunct
to diet and exercise for the use of weight management in
adults with obesity by the PMDA.
• Results from the phase 3b cardiovascular outcomes trial
(CVOT) SELECT were submitted to the FDA and the EMA.
Clinical progress
• Phase 3b CVOT trial, SELECT, investigating subcutaneous
• Phase 3a trial, STEP HFpEF, investigating subcutaneous
once-weekly semaglutide 2.4 mg in people with HFpEF
was completed.
• Phase 3b trial, ASCEND PLUS, investigating oral semaglutide
• Phase 3a trial, OASIS 1, investigating oral semaglutide in
EMA for the approval of concizumab for treatment of
haemophilia A or B with inhibitors.
• A Complete Response Letter requesting further information
was received from the FDA as a response to the concizumab
marketing authorisation application.
• Alhemo® (concizumab) was approved for the treatment of
haemophilia A or B with inhibitors by the PMDA.
• Sogroya® (somapacitan) was approved for treatment of
growth hormone deficiency in children by the FDA, EMA
and PMDA.
people with HfpEF was initiated.
• Novo Nordisk acquired ocedurenone, a phase 3 oral
administrated small molecule, non-steroidal
mineralocorticoid receptor antagonist for treatment of
patients with uncontrolled hypertension and advanced CKD.
• Phase 1/2 trial investigating the ability of cell therapy HS-001
to restore heart function in people with advanced heart
failure was initiated in collaboration with Heartseed.
• Phase 1 trial investigating ANGPTL3 mAb in people with
cardiovascular disease was initiated.
primary hyperoxaluria type 1 by the FDA.
Clinical progress
STEM-PD to restore dopamine nerve cells lost in the brain
of people with Parkinson’s was initiated in collaboration
with Lund University.
• Phase 1 trial investigating STAT3 in people with tumour-
once-weekly semaglutide 2.4 mg was completed.
• RivflozaTM (nedosiran) was approved for the treatment of
• Phase 1 trial investigating the ability of cell therapy
people with obesity was completed.
• Etavopivat transitioned from phase 2 to phase 3 trial in the
associated immune cells was initiated.
• Phase 1/2 investigating NNC0165-1875 in combination
with semaglutide in people with obesity was completed.
The project was terminated.
• Novo Nordisk acquired Inversago Pharma, with lead assets
INV-202 (a phase 2 ready asset for treatment of obesity) and
INV-347 (a phase 1 ready asset for treatment of obesity).
ongoing seamless phase 2/3 HIBISCUS trial, investigating the
safety and efficacy of etavopivat in adults and adolescents
with sickle cell disease.
• Phase 1 trial investigating VAPi-1 in people with MASH
was initiated.
in patients with T2D and no history of prior myocardial
infarction (MI) or stroke was initiated.
• Phase 3b kidney outcomes trial, FLOW, investigating
subcutaneous once-weekly semaglutide 2.4 mg in people
with T2D and chronic kidney disease (CKD) was stopped early
based on interim analysis due to efficacy.
• Phase 3a programme, REIMAGINE, investigating once-weekly
combination of semaglutide and cagrilintide in people with
T2D was initiated.
• Phase 2 trial investigating the combination of semaglutide
and GIP in people with diabetes was completed. The project
was terminated.
• Phase 1 trial investigating the effects of the combination of
semaglutide and SGLT2i inhibitor dapagliflozin in people with
T2D was completed. The project was terminated.
• Phase 1 trial investigating the SOMA device for oral treatment
was completed.
• Phase 1 trial investigating oral GLP-1/GIP co-agonist for
treatment of T2D was completed. Novo Nordisk is planning to
initiate a phase 2 trial with a subcutaneous formulation of the
GLP-1/GIP co-agonist.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
29
Patent status for products with marketing authorisation
The patent expiry dates for products marketed by
Novo Nordisk1 are shown in the tables on the right.
The dates provided are for expiry in the US, China,
Japan and Europe of patents on the active ingredient,
Human insulin
and Modern
insulins3
Expired
Expired
Expired
Expired
Saxenda®
Expired
Expired
Expired
Expired
Wegovy®
2032
2026
2031
2031
Product
US
China
Japan
Europe2
Product
US
China
Japan
Europe2
Product
US
China
Japan
Europe2
unless otherwise indicated, and include actual
Victoza®4
Expired
Expired
Expired
Expired
and estimated extensions of patent term, when
applicable. For several products, in addition to the
active ingredient patent, Novo Nordisk holds other
patents on manufacturing processes, formulations
Tresiba®
2029
2024
2027
2028
Ryzodeg®
2029
2024
20245
2028
or uses that may be relevant for exclusivity beyond
Xultophy®
2029
2024
20245
2028
the expiration of the active ingredient patent.
Furthermore, regulatory data protection and/or
orphan exclusivity may apply.
Fiasp®
20306
20306
20306
20306
Ozempic®
2032
2026
2031
2031
Rybelsus®
2032
2026
2031
2031
Norditropin®
(SimpleXx®)
Expired
Expired
Expired
Expired
NovoSeven®
Expired
Expired
Expired
Expired
NovoEight®
Refixia®
(REBINYN®)
No
patent
No
patent
No
patent
No
patent
2028
2027
2032
2027
Esperoct®
2032
2029
2034
2034
Vagifem®
10 mcg
Expired
No
patent
Expired
Expired
1. This overview does not include products whose sales represent less than 0.5% of Novo Nordisk’s total sales. 2. Patent status varies from country to country. The figures in the table are based on Germany. 3. Modern insulins are NovoRapid® (NovoLog®), NovoMix® 30 (NovoLog® Mix 70/30), Levemir®. 4. We have granted and pending patents
covering the Victoza® formulation. These patents generally expire in November 2024, except for the US where the formulation patent expires in February 2026. 5. Patent term extension until 2027 may apply. 6. Formulation patent; active ingredient patent has expired.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
30
COMMERCIAL EXECUTION
Stepping up to serve more patients
in the face of unprecedented demand
Demand for Novo Nordisk
medicines is soaring, driven by a
global obesity epidemic and
exceptional growth in the GLP-1
market. This has resulted in a record
number of people being treated
with our medicines, but also supply
constraints. In response, we are
significantly ramping up production
capacity and have introduced clear
prioritisation principles to ensure
broad and equitable distribution of
our products.
Our centenary year has been characterised by extraordinary
with our unwavering commitment to deliver innovation to as
STRATEGIC ASPIRATIONS 2025
growth, driven by surging global demand for our medicines.
many patients across the globe as possible.
Faced with these unprecedented circumstances, we have
reshaped our commercial execution strategy to best serve
At the same time, we are investing heavily in new and upgraded
the record number of patients who rely on our medicines.
production facilities in Denmark and other countries, increasing our
1. Strengthen diabetes leadership
– aim at global value market
share of more than 1/3
By ensuring supply for patients in the greatest need while
capacity to meet current and future demand for our treatments and
2. More than DKK 25 billion in
continuing to bring innovation to people living with serious
laying the foundation for sustainable long-term growth.
Obesity sales by 2025
chronic diseases all over the world, we aim to balance our
financial and societal responsibilities.
These investments include a record DKK 42 billion expansion of
our flagship production site in Kalundborg, Denmark, which is
Finding parity between the value we create and the values
already producing half of the world’s entire supply of insulin.
we aspire to has required some radical changes to normal
Outside of Denmark, we are more than doubling the production
commercial practices, along with a different mindset among
footprint of our long-established facilities in Chartres, France,
sales staff. In many ways, we have rewritten the traditional
with investments totalling DKK 17 billion. Both projects will
rulebook for product launches by placing greater focus on the
equitable distribution of limited supplies between different
include state-of-the-art, multi-product facilities to accommodate
current and future products and processes.
geographies and patient groups.
Our top priority is that patients currently on Novo Nordisk
we strive to operate our facilities across the globe 24/7. In the
medicines continue to have uninterrupted access to an
appropriate treatment option. We are also focusing on introducing
past year, we have delivered more products to more patients
than ever before, but such is the scale of demand that we expect
new treatments to new markets in a more measured way, aligned
periodic supply constraints to continue into 2024.
With construction under way on these major expansion projects,
3. Secure a sustained growth
outlook for Rare Disease
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
31
DIABETES VALUE MARKET SHARE (%)
GLP-1
Insulin
Total diabetes
50.4%
52.7%
54.9%
54.8%
44.3%
43.8%
44.6%
43.9%
29.3%
30.1%
31.9%
33.8%
60
50
40
30
20
2020
2021
2022
2023
Source: IQVIA MAT, Nov 2023.
DIABETES SALES (DKK billion)
Sales as reported
Growth at CER
Strengthening diabetes leadership
with strong GLP-1-based product growth
We have extended our leadership in diabetes care and
This includes a recognition that certain GLP-1-based therapies
increased our value market share by 1.9 percentage points
are not only highly effective options for controlling blood
to 33.8% in 2023, fuelled by strong uptake of the GLP-1-based
products Ozempic® and Rybelsus® in both North America and
International Operations.
sugar levels, but may also offer significant benefits in terms
of reducing weight and cardiovascular risks – positive effects
now reflected in international treatment guidelines.
Ozempic® is now the world’s biggest-selling diabetes medicine.
Available as a once-weekly injection, it is contributing to a
major shift in treatment for type 2 diabetes. At the same time,
our oral GLP-1-based therapy, Rybelsus®, is gaining ground by
offering patients with type 2 diabetes an intervention without
injections. Demand for these two products has grown to
Despite declining sales of insulin in key markets, reflecting
both pricing pressures and lower volumes in some
geographies, Novo Nordisk’s insulin value market share
remains little changed from 12 months earlier, at 43.9%,
compared to 44.6% in 2022.
unprecedented levels, helping to generate record sales growth
Across International Operations, insulin is still an important
despite supply constraints and a decline in demand for the
first-generation GLP-1-based product Victoza®.
and growing segment, although insulin sales in China have
been adversely impacted since the introduction of Volume
200
160
120
80
40
0
29%
Although competition is increasing, Novo Nordisk remains
a decline in overall volumes and a decrease in realised prices
Based Procurement in mid-2022. The US has also experienced
14%
the market leader in the GLP-1 market with a value share of
due to channel / payer mix and higher rebates.
8%
13%
54.8%, broadly steady compared to 2022 where our value
share stood at 54.9%.
Nevertheless, in a global diabetes market driven by high
GLP-1 growth, we are uniquely positioned to maintain and
The high demand for our GLP-1-based medicines is partly
strengthen our leadership in this sector and have already
fuelled by a growing understanding of the importance of the
met our target of securing value market share of at least
class among healthcare professionals, patients and payers.
one-third by 2025.
2020
2021
2022
2023
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
32
Controlled launches for
market-leading obesity therapy
Surging demand, limited supply and unprecedented global
media attention on our ground-breaking obesity treatment,
Wegovy®, have brought significant challenges – as well as
exciting long-term opportunities.
The success of Wegovy®, which builds on our experience with
our first-generation GLP-1-based obesity product Saxenda®,
means that Novo Nordisk has captured most of the growth and
gained a clear leadership position in the obesity market. The
sector remains extremely dynamic, with new players lining up to
Demand for Wegovy® is still growing strongly in the US, its first
launch market, and we have taken proactive steps to conduct
enter the space amid a growing appreciation that medicines
tackling obesity have the potential to boost public health and
controlled and limited roll-outs in other major markets, with the
cut long-term healthcare costs.
goal of reaching the patients in greatest need of the therapy
despite ongoing supply constraints.
“Novo Nordisk is also reserving a share of
Wegovy® supply in each new launch
market for patients who cannot afford to
pay for the product out of pocket.”
In the UK, for example, Wegovy® is now available in specialist
National Health Service weight management services for people
Globally, the number of people living with obesity has almost
tripled since 1975 and is set to reach over 1.2 billion adults by
2030. The causes of obesity are complex and its consequences
far-reaching because, so often, it puts people on a path to other
diseases – not only diabetes, but also heart and liver diseases,
cancers and many more.
Today, only one in 10 people living with obesity seek
professional medical help – and only one in five of those receive
treatment with a weight management medication. But attitudes
are changing fast. The past two years have been characterised
by a growing understanding among both the medical
who meet strict criteria, or else privately through a registered
community and the public of the critical need to treat obesity,
healthcare professional. UK physicians are being urged to
while an increasing number of people living with the disease are
prescribe responsibly and Novo Nordisk is also reserving a share
of Wegovy® supply in each new launch market for patients who
cannot afford to pay for the product out of pocket.
actively seeking support. We want to understand more about
their journey and how we can continue to help them maintain
their long-term progress towards better health.
GLOBAL PREVALENCE OF OBESITY IN ADULTS (millions)
Obesity
1,532
1,246
1,007
813
2,000
1,600
1,200
800
400
0
2020
2025
2030
2035
Source: Obesity Atlas, 2023.
OBESITY SALES (DKK billion)
Sales as reported
Growth at CER
50
40
30
20
10
0
154%
84%
3%
55%
2020
2021
2022
2023
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
33
Targeting sustainable growth
in Rare Disease
PRODUCTION
Expanding our production
capacity to meet demand
Our Rare Disease unit had a challenging year,
with sales decreasing by 15% as Norditropin®,
our long-established treatment for growth
In the rare endocrine space, our once-weekly
treatment Sogroya® offers a new opportunity for
people living with growth hormone deficiency by
Tackling the supply problems that prevent us
We are also thinking strategically about ways to
from meeting the growing demand for our
remove bottlenecks in the supply chain. For
products is a top priority for Novo Nordisk. We
example, we are seeking to alleviate pressure on
disorders, was impacted by supply constraints
removing the burden of daily injections and
know we must do more to ramp up capacity, and
device supplies by introducing our medicines in
due to a temporary reduction in manufacturing
offering demonstrated efficacy.
our colleagues in production are working around
once-weekly rather than daily formulations, and
output. Sales of rare blood disorder products,
meanwhile, were up 1% as a decline in NovoSeven®
and NovoEight® sales was offset by growing
demand for our newer haemophilia A and B
therapies, Esperoct® and Refixia®.
RARE DISEASE SALES (DKK billion)
Sales as reported
Growth at CER
In the past year we have announced investments
totalling more than DKK 75 billion into expanding
CAPEX INVESTMENTS (DKK billion)
capacity across our global network of production
CapEx
CapEx to sales ratio
the clock to get additional supplies onto
we are exploring ways to reduce the reliance on
pharmacy shelves and into the hands of patients.
single-use injection devices.
1%
4%
1%
-15%
Despite the challenges encountered this year, we
remain confident that our rich pipeline in rare
disease can bring growth back on track. The
line-up of new therapies includes significant
advances in both rare blood and endocrine
disorders. Next-generation treatments –
including Mim8 and Alhemo® in haemophilia –
will add to growth in the medium term, while
accelerated internal innovation and external
business development will help us to build our
presence in other rare disease areas of high
unmet need, such as sickle cell disease.
25
20
15
10
5
0
sites – including major expansions of our facilities
in Kalundborg, Denmark, and Chartres, France,
and the acquisition of a brownfield development
and production site in Athlone, Ireland. There are,
however, limits to how rapidly we can translate
these investments into making more medicines
that are ready for shipment. Pharmaceutical
production must adhere to the highest possible
standards, and we will never compromise on
safety and quality for the sake of speed. In the
meantime, we strive to operate our global
manufacturing facilities 24/7 to maximise output
30
24
18
12
6
0
11%
7%
5%
4%
2020
2021
2022
2023
from the current production base.
2020
2021
2022
2023
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
34
FINANCIALS
2023 performance
and 2024 outlook
STRATEGIC ASPIRATIONS 2025
1. Deliver solid sales and operating profit growth
2. Drive operational efficiencies across the value chain to enable
investments in future growth assets
3. Deliver free cash flow to enable attractive capital allocation
to shareholders
Financial performance
Geographic sales development
Diabetes care
Sales in Diabetes care increased by 24% measured in Danish kroner and
Sales increased by 31% measured in Danish kroner and by 36% at CER
Sales in North America Operations increased by 50% measured in
by 29% at CER to DKK 173,466 million driven by growth of GLP-1-based
to DKK 232,261 million in 2023. Novo Nordisk’s 2023 sales and operating
Danish kroner and by 54% at CER.
products. Novo Nordisk has improved the global diabetes value market
profit performance measured at CER were within the ranges provided in
share over the last 12 months to 33.8% from 31.9%.
November 2023. The free cash flow, effective tax rate, capital expenditure
Sales in International Operations increased by 11% measured in Danish
as well as depreciation, amortisation and impairment losses were all in
kroner and by 16% at CER. Sales in EMEA increased by 15% measured in
The market share increase was driven by market share gains in both
line with the guidance.
Danish kroner and by 17% at CER. Sales in Region China increased by 3%
North America Operations and International Operations.
FINANCIAL PERFORMANCE (DKK billion)
North America Operations net sales
International Operations net sales
measured in Danish kroner and by 11% at CER. Sales in Rest of World
increased by 11% measured in Danish kroner and by 15% at CER.
Growth at CER
Sales development across therapeutic areas
7%
14%
36%
16%
Sales in Diabetes care increased by 24% measured in Danish kroner and
by 29% at CER. Sales of Obesity care products, Wegovy® and Saxenda®,
increased by 147% measured in Danish kroner and by 154% at CER.
Sales of Rare disease products decreased by 16% measured in Danish
kroner and by 15% at CER.
GLP-1-based therapy for type 2 diabetes
Sales of GLP-1-based products for type 2 diabetes (Rybelsus®, Ozempic®
and Victoza®) increased by 48% measured in Danish kroner and by 52%
at CER to DKK 123,132 million. The estimated global GLP-1 share of total
diabetes prescriptions has increased to 6.0% compared with 4.5% 12
months ago. Novo Nordisk continues to be the global market leader in
the GLP-1 segment with a 54.8% value market share.
Rybelsus® sales increased by 66% measured in Danish kroner and by
71% at CER to DKK 18,750 million. Sales growth was driven by North
2020
2021
2022
2023
In the following sections, unless otherwise noted, market data are based
America Operations as well as EMEA and Rest of World.
on moving annual total (MAT) from November 2022 and November 2023
provided by the independent data provider IQVIA.
Ozempic® sales increased by 60% measured in Danish kroner and by
66% at CER to DKK 95,718 million. Sales growth was driven by both
North America Operations and International Operations. Sales growth
300
250
200
150
100
50
0
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
35
has resulted in periodic supply constraints and related drug shortage
notifications across geographies.
Rare Disease
Sales of Rare Disease products decreased by 16% measured in Danish
Rybelsus® as well as Obesity care market development activities.
The increase in sales and distribution costs is impacted by adjustments
kroner and by 15% at CER to DKK 17,163 million.
to legal provisions.
Victoza® sales decreased by 30% measured in Danish kroner and by 28%
at CER to DKK 8,664 million as the GLP-1 market is moving towards once-
weekly and tablet-based treatments. The sales decline was mainly driven
Rare blood disorders
Sales of Rare blood disorder products increased by 1% measured in
Research and development costs increased by 35% measured in Danish
kroner and by 37% at CER to DKK 32,443 million reflecting increased
by North America Operations.
Danish kroner and by 3% at CER to DKK 11,776 million driven by the
late-stage clinical trial activity and increased early research activities
Insulin sales
Sales of insulin decreased by 9% measured in Danish kroner and
by 6% at CER to DKK 48,022 million. Sales decline at CER was driven by
declining sales in the US and Region China.
extended half-life products in haemophilia B and A, partially countered
by NovoSeven®.
compared to 2022. The acquisition of Forma Therapeutics Inc. in 2022
and Inversago Pharma also increased R&D spending.
Rare endocrine disorders
Sales of Rare endocrine disorder products decreased by 46% measured
in Danish kroner and by 47% at CER to DKK 3,836 million reflecting
Administration costs increased by 9% measured in Danish kroner and
by 11% at CER to DKK 4,855 million.
Obesity care
Sales of Obesity care products, Wegovy® and Saxenda®, increased by 147%
measured in Danish kroner and by 154% at CER to DKK 41,632 million. Sales
a reduction in manufacturing output. Novo Nordisk is working on
re-establishing supply of rare endocrine disorder products. Sogroya®
has now been launched in five countries, and the initial feedback from
Other operating income and expenses (net) was DKK 119 million
compared with DKK 1,034 million in 2022, mainly driven by lower income
from partnerships related to Dicerna Pharmaceuticals Inc.
growth was driven by both North America Operations and International
Operations. Wegovy® has now been launched in the US, Denmark, Norway,
Germany, the UK, Iceland, Switzerland and the United Arab Emirates. The
patients and physicians is encouraging. Novo Nordisk has a value market
share of 19.3% (MAT) in the global human growth disorder market.
Operating profit increased by 37% measured in Danish kroner and
by 44% at CER to DKK 102,574 million reflecting the sales growth.
volume growth of the global branded obesity market was 116% in 2023.
Development in costs and operating profit
SALES BY THERAPEUTIC AREA (DKK billion)
Diabetes care
Obesity care
Rare Disease
Growth at CER
The cost of goods sold increased by 26% measured in Danish kroner
OPERATING PROFIT AND MARGIN (DKK billion)
and by 28% at CER to DKK 35,765 million, resulting in a gross margin
Operating profit (left axis)
Operating profit margin (right axis)
of 84.6% measured in Danish kroner compared with 83.9% in 2022.
Growth at CER
7%
14%
300
250
200
150
100
50
0
The increase in gross margin reflects a positive product mix, driven by
36%
increased sales of GLP-1-based treatments. This is partially countered
by costs related to ongoing capacity expansions, a negative currency
16%
impact and lower realised prices mainly in the US and Region China.
Sales and distribution costs increased by 23% measured in Danish
kroner and by 26% at CER to DKK 56,743 million. The increase in costs is
driven by both North America Operations and International Operations.
In North America Operations, the cost increase is driven by the relaunch
of Wegovy® and promotional activities for Ozempic®. In International
Operations, the increase is mainly related to promotional activities for
125
100
75
50
25
0
7%
13%
15%
44%
100%
80%
60%
40%
20%
0%
2020
2021
2022
2023
2020
2021
2022
2023
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
36
Financial items (net) and tax
CASH FLOW AND CAPITAL ALLOCATION (DKK billion)
Operating profit growth is expected to be 21% to 29% at CER. Given the
Dividend for prior year
Interim dividend
Share repurchases
current exchange rates versus the Danish krone, growth reported in DKK
Financial items (net) showed a net gain of DKK 2,100 million compared
with a net loss of DKK 5,747 million in 2022, reflecting gains on hedged
currencies, primarily in US dollar.
In line with Novo Nordisk’s treasury policy, the most significant foreign
exchange risks for Novo Nordisk have been hedged, primarily through
foreign exchange forward contracts. The foreign exchange result was a gain
of DKK 1,652 million compared with a net loss of DKK 4,651 million in 2022.
As per the end of December 2023, a positive market value of financial
contracts of approximately DKK 1.6 billion has been deferred for
70
60
50
40
30
20
10
0
is now expected to be around 2 percentage points lower than at CER.
The expectation for operating profit growth primarily reflects the sales
growth outlook and continued investments in future and current growth
drivers within Research, Development and Commercial. Within R&D,
investments are related to the continued expansion and progression of
the early and late-stage pipeline. Commercial investments are mainly
related to Obesity care market development activities as well as
increased spend related to GLP-1 diabetes care.
Novo Nordisk now expects financial items (net) to amount to a gain of
around DKK 1.3 billion, mainly reflecting gains associated with foreign
recognition in 2024.
2021
2022
2023
2024E1
exchange hedging contracts as well as interest gains from cash and
The effective tax rate was 20.1% in 2023 compared with an effective
tax rate of 19.6% in 2022.
1. Expectations for 2024.
2024 outlook
marketable securities.
The effective tax rate for 2024 is expected to be in the range of 19-21%.
Net profit increased by 51% to DKK 83,683 million and diluted earnings
Sales growth is expected to be 18% to 26% at CER. Given the current
Capital expenditure is expected to be around DKK 45 billion in 2024
per share increased by 52% to DKK 18.62.
exchange rates versus the Danish krone, sales growth reported in
reflecting the expansion of the supply chain, including the previously
Cash flow and capital allocation
The guidance reflects expectations for sales growth in both North
and Hillerød, Denmark, and Chartres, France. The investments in
DKK is expected to be around 1 percentage point lower than at CER.
communicated expansions of the manufacturing facilities in Kalundborg
America Operations and International Operations, mainly driven by
Kalundborg will create additional capacity across the entire global value
Free cash flow realised in 2023 was DKK 68.3 billion compared with
volume growth of GLP-1-based treatments for Obesity and Diabetes
chain from manufacturing of active pharmaceutical ingredients (API) to
DKK 57.4 billion in 2022 supporting the strategic aspiration to deliver
care. Intensifying competition and continued pricing pressure within
packaging, with the majority invested in API capacity. The API facility will
attractive capital allocation to shareholders. The cash conversion in
Diabetes and Obesity Care are included in the guidance.
be designed as a multi-product facility with flexibility to accommodate
2023 is positively impacted by timing of payment of rebates in the US,
including provisions related to the revised 340B distribution policy in
the US. Income under the 340B Program has been partially recognised.
Following higher than expected volume growth in recent years, including
GLP-1-based products such as Ozempic® and Wegovy®, combined with the
expectation of continued volume growth and capacity limitations at some
current and future processes. In Hillerød, the investments will create
additional production capacity of API within Cardiovascular & Emerging
Therapy Areas. The expansion of the production facilities in Chartres are
related to additional aseptic production and finished production
Capital expenditure for property, plant and equipment was DKK 25.8
manufacturing sites, the outlook also reflects expected continued periodic
processes. In the coming years, the capital expenditure to sales ratio is
billion compared with DKK 12.1 billion in 2022, primarily reflecting
supply constraints and related drug shortage notifications across a
still expected to be low double digit.
investments in additional capacity for active pharmaceutical ingredient
(API) production and fill-finish capacity for both current and future
number of products and geographies. Novo Nordisk is investing in internal
and external capacity to increase supply both short and long term. Novo
injectable and oral products. Capital expenditures for intangible assets
was DKK 13.1 billion in 2023 compared with DKK 2.6 billion in 2022
reflecting business development activities.
Nordisk started gradually increasing the supply of the lower dose strengths
of Wegovy® in the US in January 2024. A gradual roll-out of Wegovy® with
capped volumes in International Operations is included in the guidance.
Depreciation, amortisation and impairment losses are expected to be
around DKK 10 billion.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
37
The free cash flow is expected to be DKK 64-74 billion reflecting the sales
Novo Nordisk has hedged expected net cash flows in a number of
projections. By their very nature, forward-looking statements involve
growth, a favourable impact from rebates in the US countered by
invoicing currencies and, all other things being equal, movements in
inherent risks and uncertainties, both general and specific. Novo Nordisk
investments in capital expenditure.
key invoicing currencies will impact Novo Nordisk’s operating profit as
cautions that a number of important factors, including those described
outlined in note 4.4 on Financial risks.
in this Annual Report 2023, could cause actual results to differ materially
All of the above expectations are based on assumptions that the global
from those contemplated in any forward-looking statements.
or regional macroeconomic and political environment will not
Forward-looking statements
significantly change business conditions for Novo Nordisk during 2024,
Factors that may affect future results include, but are not limited to,
including energy and supply chain disruptions, the potential implications
Novo Nordisk’s reports filed with or furnished to the US Securities and
global as well as local political and economic conditions, such as interest
from major healthcare reforms and legislative changes as well as
Exchange Commission (SEC), including this statutory Annual Report 2023
rate and currency exchange rate fluctuations, delay or failure of projects
outcome of legal cases including litigations related to the 340B Drug
and Form 20-F, which are both expected to be filed with the SEC in
related to research and/or development, unplanned loss of patents,
Pricing Program in the US, and that the currency exchange rates,
January 2024 in continuation of the publication of this Annual Report
interruptions of supplies and production, including as a result of
especially the US dollar, will remain at the current level versus the
2023, and written information released, or oral statements made, to
interruptions or delays affecting supply chains on which Novo Nordisk
Danish krone. Neither does the guidance include the financial
the public in the future by or on behalf of Novo Nordisk, may contain
relies, shortages of supplies, including energy supplies, product recalls,
implications of any new significant business development transactions
forward-looking statements. Words such as ‘believe’, ‘expect’, ‘may’,
unexpected contract breaches or terminations, government-mandated
and significant impairments of intangible assets during 2024.
‘will’, ‘plan’, ‘strategy’, ‘prospect’, ‘foresee’, ‘estimate’, ‘project’, ‘anticipate’,
or market-driven price decreases for Novo Nordisk’s products,
Expectations are as reported,
if not otherwise stated
Expectations
31 January 2024
Sales growth
at CER
as reported
Operating profit growth
at CER
as reported
Financial items (net)
Effective tax rate
Capital expenditure (PP&E)
Depreciation, amortisation and
impairment losses
Free cash flow (excluding impact
from business development)
‘can’, ‘intend’, ‘target’ and other words and terms of similar meaning
introduction of competing products, reliance on information technology
in connection with any discussion of future operating or financial
including the risk of cybersecurity breaches, Novo Nordisk’s ability to
performance identify forward-looking statements. Examples of such
successfully market current and new products, exposure to product
forward-looking statements include, but are not limited to:
liability and legal proceedings and investigations, changes in
governmental laws and related interpretation thereof, including on
18% to 26%
Around 1 percentage point
lower than at CER
• statements of targets, plans, objectives or goals for future operations,
reimbursement, intellectual property protection and regulatory controls
including those related to Novo Nordisk’s products, product research,
on testing, approval, manufacturing and marketing, perceived or actual
product development, product introductions and product approvals
failure to adhere to ethical marketing practices, investments in and
as well as cooperation in relation thereto,
divestitures of domestic and foreign companies, unexpected growth in
• statements containing projections of or targets for revenues, costs,
costs and expenses, strikes and other labour market disputes, failure to
21% to 29%
income (or loss), earnings per share, capital expenditures, dividends,
recruit and retain the right employees, failure to maintain a culture of
capital structure, net financials and other financial measures,
compliance, epidemics, pandemics or other public health crises, effects
Gain of around DKK 1.3 billion
and outcome of contingencies, such as legal proceedings, and
• statements regarding future economic performance, future actions
of domestic or international crises, civil unrest, war or other conflict and
factors related to the foregoing matters and other factors not
Around 2 percentage points
lower than at CER
19% to 21%
• statements regarding the assumptions underlying or relating to such
specifically identified herein.
Around DKK 45 billion
statements.
Around DKK 10 billion
For an overview of some, but not all, of the risks that could adversely
DKK 64-74 billion
In this Annual Report 2023, examples of forward-looking statements
can be found under the section related to our ‘Strategic Aspirations’ and
affect Novo Nordisk’s results or the accuracy of forward-looking
statements in this Annual Report 2023, reference is made to the overview
elsewhere. These statements are based on current plans, estimates and
of risk factors in ‘Risk management’ of this Annual Report 2023.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
38
OWNERSHIP STRUCTURE1
Unless required by law, Novo Nordisk has no duty and undertakes
shares take priority for dividends between 0.5 and 5%. However, in
no obligation to update or revise any forward-looking statement after
practice, A and B shares receive the same amount of dividend per share.
Novo Nordisk
Foundation
Institutional and
private investors
the distribution of this Annual Report 2023, whether as a result of new
information, future events, or otherwise.
Shares and capital structure
As of 31 December 2023, Novo Holdings A/S held a B share capital of
a nominal value of DKK 19,018,300. Together with the A shares, Novo
Holdings A/S’s total ownership amounted to a nominal value of
DKK 126,505,500. Novo Holdings A/S ownership is reflected in the
100%
provide the basis for fair and efficient pricing of our shares.
Through open and proactive communication, Novo Nordisk aims to
‘Ownership structure’ chart.
Novo Holding A/S
77.1%
of votes
28.1%
of capital
22.9%
of votes
71.9%
of capital
A shares
1,075m shares
23.8% of capital and
75.8% of votes
B shares
3,435m shares
76.2% of capital and
24.2% of votes
Novo Nordisk A/S
Share capital and ownership
There is no complete record of all shareholders; however, based on
available sources of information, as of 31 December 2023 it is estimated
that shares were geographically distributed as shown in the ‘Geographical
Novo Nordisk’s share capital of DKK 451 million is divided into A and B share
split of shareholders’ chart. As of 31 December 2023, the free float of
capital. The A and B shares are calculated in units of DKK 0.10, amounting
listed B shares was 92.96% (of which approximately 12.18% are listed as
to 4.51 billion shares. The A share capital, consisting of 1,075 million shares,
ADRs), excluding Novo Holdings A/S and Novo Nordisk’s holding of shares.
has a nominal value of DKK 107,487,200 and the B share capital, consisting
As of 31 December 2023, Novo Holdings A/S and Novo Nordisk’s holding
of 3,435 million shares, has a nominal value of DKK 343,512,800. Each A
of B shares equaled 241,895,054 shares and had a nominal value of DKK
share of a nominal value of DKK 0.10 carries 100 votes and each B share of
24,189,505. For details about the share capital, see note 4.2 to the
a nominal value of DKK 0.10 carries 10 votes. Novo Nordisk’s B shares are
consolidated financial statements.
listed on Nasdaq Copenhagen and on the New York Stock Exchange (NYSE)
as American Depository Receipts (ADRs).
GEOGRAPHICAL SPLIT OF SHAREHOLDERS3 (% of share capital)
The general meeting has authorised the Board of Directors to distribute
extraordinary dividends, issue new shares in accordance with the Articles
of Association and repurchase shares in accordance with authorizations
granted.
Denmark
North America
UK
Other
The company’s A shares are not listed and are held by Novo Holdings A/S2,
a Danish public limited liability company wholly owned by the Novo
Nordisk Foundation. According to the Articles of Association of the
Foundation, the A shares cannot be divested. Special rights attached to
A shares include pre-emptive subscription rights in the event of an
increase in the A share capital and pre-emptive purchase rights in the
event of a sale of A shares, while B shares take priority for liquidation
proceedings. A shares take priority for dividends below 0.5%, and B
39
32
3
26
1. Treasury shares are included; however, voting rights of treasury shares cannot be exercised. 2. Novo Holdings A/S’s registered address is Tuborg Havnevej 19, DK-2900 Hellerup, Denmark. 3. Split of shareholders is denoted according to the location of legal deposit-owners.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
39
Capital structure
Share repurchase programme for 2023/2024
Novo Nordisk’s Board of Directors and Executive Management consider
During the twelve-month period beginning 1 February 2023, Novo
that the current capital and share structure of Novo Nordisk serve the
Nordisk repurchased shares worth DKK 30 billion. The share repurchase
interests of the shareholders and the company well. Novo Nordisk’s
capital structure strategy offers a balance between long-term
programme has primarily been conducted in accordance with the safe
harbour rules in the EU Market Abuse Regulation (MAR)4.
shareholder value creation and competitive shareholder return in the
short term.
For the next 12 months, Novo Nordisk has decided to implement a new
share repurchase programme. The expected total repurchase value of B
In 2021, the capital structure was adjusted following Novo Nordisk’s
shares, for the 12 months beginning 2024, amounts to a cash value of
Eurobond issuance with an aggregate principal amount of EUR 1.3 billion.
up to DKK 20 billion. The total programme may be reduced in size if
In 2022, Novo Nordisk issued Eurobonds in the amount of EUR 1.5 billion.
significant business development opportunities arise during 2024. Novo
The total outstanding Eurobonds in 2023 amounted to EUR 2.8 billion.
Nordisk expects to conduct the majority of the new share repurchase
Dividend policy
programme according to the safe harbour rules in MAR. At the Annual
General Meeting in March 2024, the Board of Directors will propose a
further reduction in the company’s B share capital, corresponding to
SHARE PRICE PERFORMANCE 2023
Novo Nordisk share price and indexed peers5 (%)
Novo Nordisk
OMXC25
Peer group6
DKK
800
700
600
500
400
300
The company’s dividend policy applies a pharmaceutical industry
approximately 1.0% of the total share capital, by cancelling 45 million
Jan
Feb
Mar
Apr May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
benchmark to ensure a competitive payout ratio for dividend payments,
treasury shares.
which are complemented by share repurchase programmes. The final
dividend for 2022 paid in March 2023 was equal to DKK 4.08 per A and
Share price development
B share of DKK 0.10 as well as for ADRs. The total dividend for 2022 was
DKK 6.20 per A and B share of DKK 0.10, corresponding to a payout ratio
The Novo Nordisk price of the B share of a nominal value of DKK 0.20 was
of 50.3%. The 2022 pharma peer group average was 46.5%.
end of December 2022 DKK 938.00. Following the two-for-one stock split
in September 2023, the B share price of a nominal value of DKK 0.10 was
In August 2023, an interim dividend was paid equaling DKK 3.00 per
end of December 2023 DKK 698.10. The comparable share prices for B
A and B share of DKK 0.10 as well as for ADRs. For 2023, the Board of
shares with a nominal value of DKK 0.10 were DKK 469.00 and DKK 698.10
Directors will propose a final dividend of DKK 6.40 to be paid in March
at the end of 2022 and 2023 respectively, an increase of 48.8 %. The total
2024, equivalent to a total dividend for 2023 of DKK 9.40 and a payout
ratio of 50.19%. The company expects to distribute an interim dividend
market value of Novo Nordisk’s B shares, excluding treasury shares
and Novo Holdings A/S shares, was DKK 2,229,925,434,103, as of
in August 2024. Further information regarding this interim dividend will
29 December 2023.
be announced in connection with the financial report for the first six
months of 2024. Dividends are paid from distributable reserves. Novo
Nordisk does not pay a dividend on its holding of treasury shares.
5. OMXC25 and pharmaceutical industry development have been rebased to Novo Nordisk share price in January
2023. 6. AstraZeneca, Bristol-Meyers, Eli Lilly, GlaxoSmithKline, Lundbeck, Merck, Novartis, Pfizer, Roche and Sanofi.
2024 FINANCIAL CALENDAR
Capital Markets Day 2024
Annual General Meeting 2024
Ex-dividend
Record date
Payment, B-shares
Payment, ADRs
Financial statement for the first three months of 2024
Financial statement for the first six months of 2024
Ex-dividend, B-shares. Ex-dividend and Record date, ADRs
Record date, B-shares
Payment, B-shares
Payment, ADRs
Financial statements for the first nine months of 2024
Financial statement for 2024 and Annual Report 2024
7 Mar 2024
21 Mar 2024
22 Mar 2024
25 Mar 2024
26 Mar 2024
2 Apr 2024
2 May 2024
7 Aug 2024
15 Aug 2024
16 Aug 2024
19 Aug 2024
26 Aug 2024
6 Nov 2024
5 Feb 2025
4. Regulation (EU) 596/2014.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
40
Risks
41 Risk management
42 Key operational risks
Orley Andreasson lives with
obesity. He was bullied in school
because of his size – often being
portrayed as lazy, stupid or lacking
self-control. He is now more
confident about himself and wants
to give back. During his freestyle
rapping sessions, Orley talks about
living with obesity and connects with
kids who struggle with stigma and
bullying. He believes we can all make
a small change in the fight against
fat-shaming.
Watch Orley’s full story here
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
41
Risk management
To be a sustainable business, we must remain responsive
to evolving expectations and seize strategic opportunities
as they arise. Managing risks rigorously and systematically
is crucial to our ability to create and protect value.
planning and management of our production capacity and supply chain
pricing negotiations. Our values, encapsulated in the Novo Nordisk Way,
are key to mitigate this risk.
Access and affordability
Access to affordable care is a global issue as healthcare systems struggle
to provide quality care at a sustainable cost, while the burden of chronic
guide every decision we make. OneCode, our code of conduct, further
empowers us to conduct our operations responsibly. These guidelines help
us to maintain integrity, thereby enabling us to fulfil our purpose effectively.
Operational risk management process
In the short- to medium-term, we are exposed to risks throughout our
We apply a dual-lensed approach to risk management. This means we
diseases keeps rising. Ensuring access and affordability is a risk and
identify and mitigate both operational risks that pose a threat to our
responsibility Novo Nordisk shares with all involved in healthcare. We
value chain. Some risks are inherent in the pharmaceutical industry,
short- to medium-term plans, as well as strategic risks that could reduce
recognise that we cannot defeat chronic diseases alone, but to mitigate
such as delays or failures of potential late-stage medicines in the R&D
our ability to achieve our corporate strategy over the long term.
the risk we can accelerate our actions to find solutions in collaboration
pipeline. Other risks, such as geopolitical instability, supply disruptions
Addressing risks in our strategic planning
Scenario and risk-thinking exercises are part of our strategic planning.
They include analyses of market dynamics, as well as impacts from
Digital disruption
New digital technologies could bring new competitors into the
with relevant stakeholders.
and competitive threats, are familiar to any manufacturing company
with global production. We will not compromise on product quality,
patient safety and business ethics: these are front and centre of our
enterprise-wide risk management set-up. We assess risks as potential
socioeconomic, environmental, geopolitical and political developments
pharmaceutical industry. They also provide an opportunity for us to
financial loss or reputational damage likelihood.
that present risks or opportunities for our business. Annually, Executive
deliver more value to our stakeholders and help patients live a life with
Management and the Board of Directors review a strategic risk profile.
fewer limitations. Digital health solutions bring new risks, particularly
Executive Management, the Board of Directors and the Audit Committee
The main strategic risks are:
regarding data regulation and privacy, as well as potential quality issues.
review a risk grid of our biggest operational risks every six months. This
Innovation and competition
Novo Nordisk faces a concentration risk with multiple brands being
relevant partners.
and includes all types of risks that could cause significant disruptions to the
business over a three-year horizon, including potential ESG risks. An overview
dependent on the semaglutide compound as the active pharmaceutical
ingredient. To remain competitive in the long term and thereby mitigate
the innovation risk, we invest in internal and external pipeline opportunities
Environmental impact
Novo Nordisk has an impact on the environment and changes to the
climate could potentially have an impact on Novo Nordisk’s business.
of our key operational risks, along with detailed descriptions, is provided on
the next page. For more information, see our Corporate Governance Report
available at: www.novonordisk.com/about/corporate-governance.html.
We strive to monitor and mitigate these risks in close collaboration with
grid is based on insights from management teams across the organisation
to ensure patients receive improved treatments.
As part of our ‘zero environmental impact’, we assess, monitor and
Production capacity and supply chain risks
Demand fluctuations, resource shortages, geopolitical instability, trade
disputes and local manufacturing requirements are all factors that can
mitigate these risks throughout our value chain.
Company reputation
On the following page we also include the Novo Nordisk reputation score.
Ethics and compliance
Our commitment to ethics and compliance remains at the forefront of all
This is measured among key stakeholders (i.e. the informed general
public, people with diabetes, people with obesity, general practitioners
pressure global supply chains. Furthermore, expanding production
our operations. Any inability to uphold our ethical standards could lead to
and diabetes specialists) and is an indicator of the extent to which we live
capacity is complex and associated with a long lead time. Therefore,
reputational implications, with potential effects on market access and
up to society’s expectations.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
42
Key operational risks
Risk area
Description
Impact
Mitigating actions
KEY OPERATIONAL RISKS (ILLUSTRATIVE)
1
Findings in clinical activities, regulatory processes or
• Patients would not benefit from innovative treatments.
• Pre-clinical and clinical activities to demonstrate safety
Research and
Clinical Pipeline
Risks
misjudging of commercial potential, leading to delays
• Could have an adverse impact on sales, profits and market position.
and efficacy.
High
or failure of products in the pipeline.
• Consultations with regulators to review pre-clinical and
clinical findings and obtain guidance on development path.
2
Higher-than-expected demand or disruption of
• Product shortages could have potential implications for patients.
• Significantly expanding global production with multiple
Product Supply,
Quality and
Safety Risks
product supply due to, e.g. geopolitical instability or
• Could jeopardise reputation and license to operate if regulatory
facilities and safety stock to reduce supply risk.
quality issues may compromise product availability,
compliance is not ensured.
• Planning and management of supply chain.
ultimately impacting patients and representing a lost
• Could have an adverse impact on sales, profits and market position.
• Regular quality audits of internal units and suppliers to
commercial opportunity. In addition, there could be
• Compromised patient safety and exposure to product liability
document GMP compliance.
risks related to safety and product liability.
legal proceedings.
•
Identification and correction of root causes when issues
are identified. If necessary, products are recalled.
t
c
a
p
m
I
3
Competitive pressures, as well as market dynamics
• Market dynamics could impact price levels and patient access.
•
Innovation of novel products, clinical trial data and real-world
Commercialisation
Risks
and geopolitical, macroeconomic or healthcare crises
• Could have an adverse impact on sales, profits and market position.
evidence demonstrate added value of new products.
(e.g. pandemics) leading to reduced payer ability and
willingness to pay.
• Payer negotiations to ensure improved patient access.
•
Increased and new access and affordability initiatives.
4
IT Security
Risks
5
Financial
Risks
Disruption to IT systems, such as cyber-attacks or
• Could limit our ability to produce and safeguard product quality.
• Company-wide information security awareness activities.
infrastructure failure resulting in business disruption
• Could compromise patients’ or other individuals’ privacy.
• Continuity plans for non-availability of IT systems.
or breach of data confidentiality.
• Could limit our ability to maintain operations or limit future business
• Company-wide internal audit of IT security controls.
opportunities if proprietary information is lost.
• Detection and protection mechanisms in IT systems and
• Could have an adverse impact on sales, profits and market position.
business processes.
Exchange rate fluctuations (mainly in USD, CNY, JPY
• Could lead to tax adjustments, fines and higher-than-expected
• Hedging for selected currencies.
and CAD), disputes with tax authorities and changes
tax level.
•
Integrated treasury management.
to tax legislation and interpretation.
• Could have an adverse impact on sales and profits.
• Applicable taxes paid in jurisdictions where business activity
generates profits and multi-year Advance Pricing Agreements
with tax authorities.
6
Breach of legislation, industry codes or company
• Potential exposure to investigations, criminal and civil sanctions
• Legal review of key activities.
Legal, Patents
and Compliance
Risks
policies. Competitors asserting patents against
and other penalties.
• Code of Conduct integrated in our business.
Novo Nordisk or challenging patents critical for
• Could compromise our reputation and the rights and integrity
• Compliance Hotline in place.
protection of commercial product and
of individuals involved.
pipeline candidates.
• Unexpected loss of exclusivity for, or injunctions against, existing
•
•
Internal Audit of compliance with business ethics standards.
Internal controls to minimise vulnerability to patent
and pipeline products could have an adverse impact on future sales.
infringement and invalidity actions.
• Could have an adverse impact on sales, profits and market position.
2
3
4
6
1
5
Low
High
Likelihood
REPUTATION SCORE
82.1
0.2
We achieved a reputation score
of 82.1 points in 2023 measured
on a scale of 0-100 (0.2 down from
2022). Stable with last year, Novo
Nordisk continues to lead our
selected industry benchmarks. This
excellent reputation score is driven
by positive perceptions of our
products and services, the most
important reputation component,
and growing appreciation from the
informed general public.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
43
Management
42 Board of Directors
45 Executive Management
Banin Mahdi (left) and Anusha
Samia (right) met three years ago
through Pannahouse, a hub in
Copenhagen where young people
gather weekly to play ‘panna’ – an
increasingly popular type of street
football. Before joining Pannahouse,
Banin spent most of the time on
her phone or watching TV, while
Anusha described herself as shy.
They are now confident, willing to
show their true selves and motivated
to help others. The two girls stress
how impactful these initiatives are:
offering young people alternatives to
hanging out on the street, building
community and keeping body and
mind healthy. As they say, it is always
more than just football.
Watch Pannahouse’s full story here
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
44
Board of Directors
Helge Lund
Chair
Henrik Poulsen
Vice chair
Norwegian. Born October 1962. Male.
Member since 20171. Term 2024. Chair
of the Nomination Committee and the
Chair Committee.
Positions and management duties:
Chair of the board of directors and
chair of the people & governance
committee of BP p.l.c. Chair of the board
of directors of Inkerman AS. Member of
the board of directors and member of
the remuneration committee of Belron
SA. Member of the board of directors of
P/F Tjaldur. Operating advisor to Clayton
Dubilier & Rice. Member of the board of
trustees of the International Crisis Group.
Competencies:
Global corporate leadership; healthcare
and pharma industry; finance and
accounting; business development, M&A
and external innovation sourcing; human
capital management; environmental,
social and governance (ESG).
Danish. Born September 1967. Male.
Member since 2021. Term 2024. Chair
of the Remuneration Committee and
member of the Audit Committee and
the Chair Committee.
Positions and management duties:
Chair of the supervisory board, chair of
the nomination committee and member
of the remuneration committee of
Carlsberg A/S. Chair of the board of
directors and chair of the nomination &
remuneration committee at Faerch A/S.
Member of the board of directors of
Novo Holdings A/S. Member of the
supervisory board of Bertelsmann SE &
Co. KGaA. Senior advisor to A.P. Møller
Holding A/S.
Competencies:
Global corporate leadership; finance and
accounting; business development, M&A
and external innovation sourcing; human
capital management; environmental,
social and governance (ESG).
1. Helge Lund was also a member of the Board of Directors for one one-year term from 2014-2015.
Elisabeth Dahl Christensen
Laurence Debroux
Andreas Fibig
Sylvie Grégoire
Danish. Born November 1965. Female.
Member since 2022. Term 2026.
Employee representative. Member
of the Remuneration Committee.
French. Born July 1969. Female. Member
since 2019. Term 2024. Chair of the
Audit Committee and member of the
Remuneration Committee.
German. Born February 1962. Male.
Member since 2018. Term 2024.
Member of the Research & Development
Committee.
Positions and management duties:
Full-time union representative at
Novo Nordisk A/S.
Competencies:
Not mapped for employee
representatives.
Positions and management duties:
Member of the board of directors, chair
of the audit committee and member of
the ESG committee of Exor N.V. Member
of the supervisory board and member
of the audit committee of Randstad N.V.
Member of the board of directors of
HEC Paris Business School and of Kite
Insights (The Climate School).
Competencies:
Global corporate leadership; healthcare
and pharma industry; finance and
accounting; business development, M&A
and external innovation sourcing; human
capital management; environmental,
social and governance (ESG).
Positions and management duties:
Member of the board of directors of
Indigo Agriculture Inc., Evodiabio ApS
and ExlService Holdings, Inc. Honorary
director of the German American
Chamber of Commerce.
Competencies:
Global corporate leadership; healthcare
and pharma industry; technology, data
and digital; finance and accounting;
business development, M&A and
external innovation sourcing; human
capital management; environmental,
social and governance (ESG).
Canadian and American. Born November
1961. Female. Member since 2015. Term
2024. Member of the Audit Committee,
the Research & Development Committee
and the Nomination Committee.
Positions and management duties:
Co-founder and chair of the board of
directors of CervoMed, Inc. Member of
the board of directors and member of
the nominating & corporate governance
committee and the compensation
& benefits committee of Revvity Inc.
Member of the board of directors of
F2G Ltd. Advisor to the Soffinova
Telethon Fund.
Competencies:
Global corporate leadership; healthcare
and pharma industry; medicine and
science; finance and accounting;
business development, M&A and
external innovation sourcing; human
capital management.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
45
Board of Directors (continued)
Liselotte Hyveled
Mette Bøjer Jensen
Kasim Kutay
Christina Law
Martin Mackay
Thomas Rantzau
Danish. Born January 1966. Female.
Member since 20222. Term 2026.
Employee representative. Member of the
Research & Development Committee.
Danish. Born December 1975. Female.
Member since 2018. Term 2026.
Employee representative. Member
of the Audit Committee.
British. Born May 1965. Male. Member
since 2017. Term 2024. Member of
the Nomination Committee and the
Research & Development Committee.
Chinese. Born January 1967. Female.
Member since 2022. Term 2024.
Member of the Audit Committee.
Positions and management duties:
Chief patient officer and principal vice
president of Patient Voice Strategy &
Alliances, Novo Nordisk A/S.
Positions and management duties:
Wash & Sterilisation specialist in
Product Supply, Novo Nordisk A/S.
Competencies:
Not mapped for employee
representatives.
Competencies:
Not mapped for employee
representatives.
Positions and management duties:
CEO of Novo Holdings A/S. Member
of the board of directors and member
of the nomination and remuneration
committee of Novozymes A/S.
Competencies:
Global corporate leadership; healthcare
and pharma industry; finance and
accounting; business development,
M&A and external innovation sourcing;
human capital management.
Positions and management duties:
Group CEO of Raintree Group of
Companies. Member of the board of
directors of Raintree Group Limited,
Raintree Investment Pte Ltd. and Air
Liquide S.A. Member of the board of
directors and member of the nomination
and compensation committee of
INSEAD Business School. Member of the
board of directors of La Fondation des
Champions.
Competencies:
Global corporate leadership; technology,
data and digital; business development,
M&A and external innovation sourcing;
human capital management.
Danish. Born March 1972. Male.
Member since 2018. Term 2026.
Employee representative. Member
of the Nomination Committee.
Positions and management duties:
Lead auditor, Internal Audits,
Novo Nordisk A/S.
Competencies:
Not mapped for employee
representatives.
American and British. Born April 1956.
Male. Member since 2018. Term 2024.
Chair of the Research & Development
Committee and member of the
Remuneration Committee.
Positions and management duties:
Co-founder and executive chairman of
Rallybio LLC. Member of the board of
directors and member of the science &
technology committee and the finance
committee of Charles River Laboratories
International, Inc.
Competencies:
Global corporate leadership; healthcare
and pharma industry; medicine and
science; technology, data and digital;
business development, M&A and
external innovation sourcing; human
capital management.
2. Liselotte Hyveled was also an employee-elected member of the Board of Directors for one four-year term from 2014-2018.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
46
Independence and meeting attendance overview
Meeting attendance in 20233
Board of
Directors
Chair
Committee
Audit
Committee10
Nomination
Committee
Remuneration
Committee
R&D
Committee
Lars Fruergaard Jørgensen
and Helge Lund (left) during
the Annual General Meeting
in March 2023.
Name
Independence4
Helge Lund
Independent
Henrik Poulsen
Not independent 5, 6, 7, 9
Elisabeth Dahl Christensen
Not independent 8
Laurence Debroux
Independent 6, 7, 9
Andreas Fibig
Sylvie Grégoire
Independent
Independent6
Liselotte Hyveled
Not independent8
Mette Bøjer Jensen
Not independent6, 8
Kasim Kutay
Christina Law
Not independent5
Independent6
Martin Mackay
Independent
Thomas Rantzau
Not independent8
9/9
9/9
9/9
9/9
9/9
9/9
8/9
9/9
8/9
9/9
9/9
9/9
7/7
7/7
5/5
5/5
5/5
5/5
5/5
3/3
3/3
3/3
3/3
Board members who stepped down at the Annual General Meeting in March 2023
Jeppe Christiansen
Not independent5
2/2
5/6
6/6
6/6
6/6
1/2
4/4
4/4
4/4
4/4
4/4
3. Number of meetings attended by each Board member out of the total number of meetings within the member’s term. 4. In accordance with recommendation 3.2.1 of the Danish Corporate
Governance Recommendations as designated by Nasdaq Copenhagen. 5. Member of the board of directors or executive management of Novo Holdings A/S. 6. Pursuant to the US Securities Exchange
Act, Ms Debroux, Ms Grégoire and Ms Law qualify as independent Audit Committee members, while Ms Bøjer Jensen and Mr Poulsen rely on an exemption from the independence requirements.
7. Ms Debroux and Mr Poulsen possess the qualifications within accounting and auditing required under part 8 of the Danish Act on Approved Auditors and Audit Firms. 8. Elected by employees of
Novo Nordisk. 9. Designated as financial experts as defined by the US Securities and Exchange Commission (SEC). 10. Collectively, the members have relevant industry expertise.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
47
Executive Management
Lars Fruergaard Jørgensen11
Maziar Mike Doustdar
Ludovic Helfgott
Karsten Munk Knudsen11
Doug Langa
Martin Holst Lange
President and chief executive officer
(CEO). Born November 1966. Male.
Executive vice president. International
Operations. Born August 1970. Male.
Executive vice president. Rare Disease.
Born July 1974. Male.
Executive vice president. Chief financial
officer (CFO). Born December 1971. Male.
Executive vice president. North America
Operations. Born October 1966. Male.
Executive vice president. Development.
Born October 1970. Male.
Other positions and management duties:
President of the European Federation
of Pharmaceutical Industries and
Associations (EFPIA).
Other positions and management duties:
Member of the board of directors and the
personnel and remuneration committee
of Orion Corporation.
Other positions and management duties:
President of the Novo Nordisk
Haemophilia Foundation Council.
Other positions and management duties:
Member of the board of directors, chair
of the audit committee and member of
the equity & capital markets committee
of Hempel A/S. Member of the board of
directors and chair of the audit committee
of 3Shape Holding A/S.
Other positions and management duties:
No other management positions.
Other positions and management duties:
Member of the board of directors of
Pharmacosmos A/S.
David Moore
Tania Sabroe
Marcus Schindler
Camilla Sylvest
Henrik Wulff
Executive vice president. Corporate
Development. Born January 1974. Male.
Executive vice president. People &
Organisation. Born July 1977. Female.
Executive vice president. Research & Early
Development and chief scientific officer
(CSO). Born September 1966. Male.
Executive vice president. Commercial
Strategy & Corporate Affairs. Born
November 1972. Female.
Other positions and management duties:
Member of the board of directors of
Naveris Inc., Radius Health Inc. and
Novasenta Inc.
Other positions and management duties:
No other management positions.
Other positions and management duties:
Adjunct Professor of Pharmacology at the
University of Gothenburg.
Other positions and management duties:
Vice chair of the board of directors of
Danish Crown A/S. Member of the board
of directors of Argenx SE.
Executive vice president. Product Supply,
Quality & IT. Born November 1970. Male.
Other positions and management duties:
Member of the board of directors of
Grundfos Holding A/S.
11. Lars Fruergaard Jørgensen and Karsten Munk Knudsen are registered as executives with the Danish Business Authority. The other members of Executive Management are not registered as executives with the Danish Business Authority.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
48
Consolidated
statements
50 Consolidated financial statements
86 Consolidated ESG statement
95 Statement and Auditor’s Reports
Dr. Shellie Morris AO is an
award-winning singer-songwriter
from Australia. She is also part
of ‘Uncle Jimmy Thumbs Up!’,
an organisation dedicated to
improving health outcomes of
First Nations communities through
music workshops, preventative
health education and community
engagement. Shellie believes in music
as a healing and educational tool,
one that First Nations people have
long used to tell their stories and
experiences. When connecting with
people, she always starts off with
a blank piece of paper.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
49
Consolidated
financial statements
Income statement and Statement of comprehensive income
Cash flow statement
Balance sheet
Equity statement
50
51
52
53
Section 4
Capital structure and financial items
4.1 Earnings per share
4.2 Distribution to shareholders
4.3 Share capital, Treasury shares and Other reserves 68
Notes to the consolidated financial statements
4.5 Derivative financial instruments
4.6 Borrowings
Section 1
Basis of preparation
1.1 Material accounting policies and key accounting estimates 54
4.7 Cash and cash equivalents
4.8 Cash flow statement specifications
4.9 Financial assets and liabilities
1.2 Changes in accounting policies and disclosures
54
4.10 Financial income and expenses
4.4 Financial risks
Section 2
Results for the year
2.1 Net sales and rebates
2.2 Segment information
2.3 Research and development costs
2.4 Employee costs
2.5 Other operating income and expenses
2.6
Income taxes and deferred income taxes
Section 3
Operating assets and liabilities
3.1
Intangible assets
3.2 Property, plant and equipment
3.3
Inventories
3.4 Trade receivables
3.5 Provisions and contingent liabilities
Section 5
Other disclosures
5.1 Share-based payment schemes
5.2 Commitments
5.3 Acquisition of businesses
5.4 Related party transactions
5.5 Fees to statutory auditors
5.6 General accounting policies
5.7 Companies in the Novo Nordisk Group
Part of the Management review – not audited
Financial definitions
Non-IFRS financial measures
55
56
58
58
59
59
61
63
64
65
66
69
71
72
73
73
74
75
76
78
78
79
79
80
81
82
83
Consolidated
ESG statement
Statement of ESG performance
86
Notes to the consolidated ESG statement
68
68
Section 6
Basis of preparation
Section 9
Governance performance
9.1 Business ethics reviews and training
9.2 Compliance Hotline
9.3 Supplier audits
87
9.4 Product recalls
9.5 Failed inspections
93
93
93
93
93
94
94
94
9.6 Facilitations of the Novo Nordisk Way
9.7 Company reputation
9.8 Animals purchased for research
Section 7
Environmental performance
7.1
Energy consumption for operations and
share of renewable power for production sites
7.2 Scope 1, 2 and 3 emissions
7.3 Water consumption for production sites
7.4 Waste from production sites
7.5 Breaches of environmental regulatory limit values
Section 8
Social performance
8.1
Patients reached with Novo Nordisk’s Diabetes
and Obesity care products
8.2 Employees
8.3 Gender diversity in leadership positions
8.4 Sustainable employer score
8.5 Health and safety
8.6 US pricing
8.7 Total tax contribution
8.8 Donations and other contributions
88
88
89
89
90
90
90
91
91
91
92
92
92
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
50
Income statement and Statement of comprehensive income
for the year ended 31 December
DKK million
Income statement
Net sales
Cost of goods sold
Gross profit
Sales and distribution costs
Research and development costs
Administrative costs
Note
2023
2022
2021
DKK million
Note
2023
2022
2021
Statement of comprehensive income
2.1, 2.2
232,261
176,954
140,800
Net profit
83,683
55,525
47,757
2.2
(35,765)
(28,448)
(23,658)
Other comprehensive income:
196,496
148,506
117,142
Remeasurements of retirement benefit obligations
2.2
(56,743)
(46,217)
(37,008)
2.2, 2.3
(32,443)
(24,047)
(17,772)
2.2
(4,855)
(4,467)
(4,050)
Items that will not be reclassified subsequently to the income statement
13
13
615
615
146
146
Exchange rate adjustments of investments in subsidiaries
4.3
(1,404)
2,289
1,624
Cash flow hedges:
Realisation of previously deferred (gains)/losses
Deferred gains/(losses) incurred during the period
4.3, 4.5
(1,026)
4.3, 4.5
1,612
Other items
Income tax related to these items
Items that will be reclassified subsequently to the income statement
Other comprehensive income
Total comprehensive income
4.3
2.6, 4.3
4
(359)
(1,173)
(1,160)
82,523
1,740
1,026
(3)
(889)
4,163
4,778
(1,802)
(1,755)
112
1,005
(816)
(670)
60,303
47,087
Other operating income and expenses
2.2, 2.5
119
1,034
332
Operating profit
Financial income
Financial expenses
Profit before income taxes
Income taxes
Net profit
Earnings per share
Basic earnings per share (DKK)
Diluted earnings per share (DKK)
102,574
74,809
58,644
4.10
4.10
2,945
(845)
104,674
239
(5,986)
69,062
2,887
(2,451)
59,080
2.6
(20,991)
(13,537)
(11,323)
83,683
55,525
47,757
4.1
4.1
18.67
18.62
12.26
12.22
10.40
10.37
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
51
Cash flow statement
for the year ended 31 December
DKK million
Cash flow statement
Net profit
Adjustment of non-cash items:
Note
2023
2022
2021
DKK million
83,683
55,525
47,757
Dividends paid
Proceeds from borrowings
Purchase of treasury shares
Income taxes in the income statement
2.6
20,991
13,537
11,323
Repayment of borrowings
Depreciation, amortisation and impairment losses
Other non-cash items
Change in working capital
Interest received
Interest paid
Income taxes paid
Net cash generated from operating activities
Purchase of intangible assets
Purchase of property, plant and equipment
Cash used for acquisition of businesses
Proceeds from other financial assets
Purchase of other financial assets
Purchase of marketable securities
Sale of marketable securities
Dividend received from associated companies
Net cash used in investing activities
3.1, 3.2
4.8
4.8
9,413
32,382
(12,245)
1,072
(491)
7,362
22,310
(5,336)
276
(272)
13,416
(9,063)
241
(261)
2.6
(25,897)
(14,515)
(14,438)
3.1
3.2
5.3
5.4
108,908
(13,090)
78,887
(2,607)
(25,806)
(12,146)
55,000
(1,050)
(6,335)
—
33
(271)
(7,075)
(18,283)
—
(169)
—
(4)
(13,018)
(9,566)
(7,109)
8,260
—
6,645
1,172
—
4
(43,892)
(24,918)
(31,605)
6,025
Net cash used in financing activities
Net cash generated from activities
Cash and cash equivalents at the beginning of the year
Exchange gains/(losses) on cash and cash equivalents
Cash and cash equivalents at the end of the year
4.7
14,392
12,653
10,719
Note
2023
2022
2021
4.3
4.2
4.6
4.6
(29,924)
(24,086)
(19,447)
(31,767)
(25,303)
(21,517)
—
11,215
(1,467)
(13,623)
22,160
(6,689)
(63,158)
(51,797)
(25,493)
1,858
12,653
(119)
2,172
10,719
(238)
(2,098)
12,226
591
Novo Nordisk Annual Report 2023 Balance sheet
at 31 December
DKK million
Assets
Intangible assets
Property, plant and equipment
Investments in associated companies
Deferred income tax assets
Other receivables and prepayments
Other financial assets
Total non-current assets
Inventories
Trade receivables
Tax receivables
Other receivables and prepayments
Marketable securities
Derivative financial instruments
Cash at bank
Total current assets
Total assets
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
52
Note
2023
2022
DKK million
Note
2023
2022
Equity and liabilities
3.1
3.2
60,406
90,961
410
50,939
Share capital
66,671
Treasury shares
327
Retained earnings
2.6
20,380
13,904
Other reserves
1,430
1,253
206
Total equity
1,016
Borrowings
174,840
133,063
Deferred income tax liabilities
Retirement benefit obligations
Other liabilities
940
Provisions
6,005
Total non-current liabilities
3.3
3.4
4.4
4.5
4.7
31,811
64,770
2,423
8,068
15,838
2,344
14,392
24,388
50,560
10,921
2,727
12,653
139,646
108,194
Borrowings
Trade payables
Tax payables
Other liabilities
314,486
241,257
Derivative financial instruments
Provisions
Total current liabilities
Total liabilities
Total equity and liabilities
4.3
4.3
451
(5)
104,839
4.3
1,276
106,561
4.6
2.6
3.5
4.6
4.5
3.5
20,528
10,162
742
189
6,649
38,270
6,478
25,606
7,116
28,705
1,272
100,478
456
(6)
80,587
2,449
83,486
24,318
7,061
762
100
4,590
36,831
1,466
15,587
7,091
23,606
2,903
70,287
169,655
120,940
207,925
157,771
314,486
241,257
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
53
Equity statement
at 31 December
DKK million
Share
capital
Treasury
shares
Retained
earnings
Other
reserves
2023
Total
Share
capital
Treasury
shares
Retained
earnings
Other
reserves
2022
Total
Share
capital
Treasury
shares
Retained
earnings
Other
reserves
2021
Total
Balance at the beginning of the year
456
(6)
80,587
2,449
83,486
462
(6)
72,004
(1,714)
70,746
470
(8)
63,774
(911)
63,325
Net profit
Other comprehensive income
Total comprehensive income
Transfer of cash flow hedge reserve to intangible assets (note 4.3)
83,683
83,683
13
(1,173)
(1,160)
83,696
(1,173)
82,523
—
—
(4)
5
(5)
(31,767)
2,149
(29,920)
94
(31,767)
2,149
(29,924)
—
94
(6)
6
(6)
55,525
615
56,140
(25,303)
1,539
(24,080)
287
4,163
4,163
—
55,525
4,778
60,303
—
(25,303)
1,539
(24,086)
—
287
47,757
146
47,903
(21,517)
1,040
(19,441)
245
(816)
(816)
13
47,757
(670)
47,087
13
(21,517)
1,040
(19,447)
—
245
(6)
8
(8)
451
(5)
104,839
1,276
106,561
456
(6)
80,587
2,449
83,486
462
(6)
72,004
(1,714)
70,746
Transactions with owners:
Dividends (note 4.2)
Share-based payments (note 5.1)
Purchase of treasury shares (note 4.3)
Reduction of the B share capital (note 4.3)
Tax related to transactions with owners
Balance at the end of the year
Refer to note 4.3 for details of movements in Other reserves.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
54
Notes to the consolidated financial statements
Section 1
Basis of preparation
1.1 Material accounting policies and
key accounting estimates
The consolidated financial statements included in this Annual Report have been
prepared in accordance with IFRS Accounting Standards as issued by the International
Accounting Standards Board (IASB) and in accordance with IFRS Accounting Standards
as endorsed by the EU and further requirements in the Danish Financial Statements Act.
Measurement basis
The consolidated financial statements have been prepared on the historical cost basis
except for derivative financial instruments, equity investments, marketable securities
and trade receivables in a factoring portfolio, which are measured at fair value.
Material accounting policies
Apart from the general accounting policies, which are described in note 5.6, Novo
Nordisk’s accounting policies are described in each of the individual notes to the
consolidated financial statements. The accounting policies have been applied
consistently in the preparation of the consolidated financial statements for all the
years presented.
Key accounting estimates and judgements
The use of reasonable estimates and judgements is an essential part of the
preparation of the consolidated financial statements. Given the uncertainties inherent
in Novo Nordisk’s business activities, Management must make certain estimates
regarding valuation and make judgements on the reported amounts of assets,
liabilities, net sales, expenses and related disclosures.
The key accounting estimates identified are those that have a significant risk of
resulting in a material adjustment to the carrying amount of assets and liabilities in
the following reporting period. An example being the estimation of US sales
deductions and provisions for sales rebates.
When determining estimates and assumptions, Management has assessed the
qualitative and quantitative impact of climate-related matters. It is Management’s
assessment that the effect of climate-related matters does not significantly impact
estimates and assumptions.
Management bases its estimates on historical experience and various other
assumptions that are held to be reasonable under the circumstances. The estimates
and underlying assumptions are reviewed on an ongoing basis. If necessary, changes
are recognised in the period in which the estimate is revised. Management considers
the key accounting estimates to be reasonable and appropriate based on currently
available information. The actual amounts may differ from the amounts estimated as
more detailed information becomes available.
In addition, Management may make certain judgements in the process of applying
the entity’s accounting policies, for example the classification of a transaction as an
asset acquisition or a business combination.
Management regards those listed below as the key accounting estimates applied in
the preparation of the consolidated financial statements. Refer to the specific notes
for further information on the key accounting estimates as well as assumptions
applied. Management did not identify material judgements made in the current
reporting period apart from those involving estimations.
Applying materiality
The consolidated financial statements are a result of processing large numbers
of transactions and aggregating those transactions into classes according to their
nature or function. The transactions are presented in classes of similar items in the
consolidated financial statements. If a line item is not individually material, it is
aggregated with other items of a similar nature in the consolidated financial
statements or in the notes.
Management provides the specific disclosures required by IFRS unless the information
is not applicable or is considered immaterial to the decision-making of the primary
users of these financial statements.
1.2 Changes in accounting policies and disclosures
Management has assessed the impact of new or amended accounting standards and
interpretations (IFRSs) issued by the IASB and IFRSs endorsed by the European Union
effective on or after 1 January 2023. Management assessed that application of these
has not had a material impact on the consolidated financial statements for 2023.
Furthermore, Management has assessed the impact of new or amended accounting
standards and interpretations (IFRSs) issued by the IASB that have not yet become
effective. No new or amended accounting standards or interpretations (IFRSs) have
been early adopted. Management does not anticipate any significant impact on the
consolidated financial statements in the period of initial application after the adoption
of these amendments.
Key accounting estimates
Estimate of US sales deductions and provisions for sales rebates
Estimate in determining the fair value of intangible assets and assessment of impairment of intangible assets
Estimate regarding deferred income tax assets and provision for uncertain tax positions
Estimate of ongoing legal disputes, litigation and investigations
Risk
High
Medium
Medium
Medium
Note(s)
2.1, 3.5
3.1
2.6
3.5
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
55
Section 2
Results for the year
2.1 Net sales and rebates
Gross-to-net sales reconciliation
DKK million
Gross sales
2023
2022
2021
608,645
455,692
340,180
US Managed Care and Medicare
(223,191)
(161,123)
(112,929)
US wholesaler charge-backs
(74,435)
(56,443)
(40,354)
US Medicaid rebates
(31,821)
(24,667)
(19,810)
Other US discounts and sales returns
(28,481)
(18,300)
(14,119)
Non-US rebates, discounts and sales returns
(18,456)
(18,205)
(12,168)
Total gross-to-net sales adjustments
(376,384)
(278,738)
(199,380)
Net sales
232,261
176,954
140,800
Provisions for sales rebates
DKK million
2023
2022
2021
At the beginning of the year
69,499
50,822
34,052
Additional provisions, including increases to
existing provisions
285,266
206,354
155,602
Amount paid during the year
(250,316)
(189,580)
(141,370)
Adjustments, including unused amounts
reversed during the year
(2,364)
(1,141)
(284)
Effect of exchange rate adjustment
At the end of the year
(2,207)
99,878
3,044
2,822
69,499
50,822
Sales discounts and sales rebates are predominantly issued in the US. As such, rebates
amount to 74% of gross sales in the US (75% in 2022 and 75% in 2021). Provisions for sales
rebates include US Managed Care, Medicare, Medicaid, 340B Drug Pricing Program and
other US rebate types, as well as rebates in a number of European countries and Canada.
Pricing mechanisms in the US market
In the US, sales rebates are paid in connection with public healthcare insurance
programmes, including Medicare and Medicaid, as well as rebates to pharmacy benefit
managers (PBMs) and managed healthcare plans. Key customers in the US include
private payers, PBMs and government payers. PBMs and managed healthcare plans
play a role in negotiating price concessions with drug manufacturers for both the
commercial and government channels, and determine which drugs are covered on
their formularies (or 'preferred drug lists').
US Managed Care and Medicare
For Managed Care and Medicare, rebates are offered to a number of PBMs and
managed healthcare plans. These rebate programmes allow the customer to receive a
rebate after attaining certain performance parameters relating to formulary status or
pre-established market share thresholds. Rebate provisions are estimated according
to the specific terms in each agreement, historical experience, anticipated channel
mix, growth rates and market share information. Novo Nordisk adjusts the provision
periodically to reflect actual sales performance. Managed Care and Medicare rebates
are generally settled around 100 days from the transaction date.
US wholesaler charge-backs
Wholesaler charge-backs relate to contractual arrangements between Novo Nordisk
and indirect customers in the US whereby products are sold at contract prices lower
than the list price originally charged to wholesalers. Chargeback provisions are
estimated using a combination of factors such as historical experience, current
wholesaler inventory levels, contract terms and the value of claims received but not
yet processed. Wholesaler charge-backs are generally settled within 30 days after
receipt of claim.
In January 2021, Novo Nordisk changed its policy in the US related to the 340B Drug
Pricing Program, whereby Novo Nordisk no longer provides 340B statutory discounts
to certain pharmacies that contract with covered entities participating in the 340B
Drug Pricing Program. Novo Nordisk has recognised revenue related to the 340B Drug
Pricing Program to the extent that it is highly probable that its inclusion will not result
in a significant revenue reversal in the future. Refer to note 3.5 for a more elaborate
description of the ongoing litigation related to the 340B Drug Pricing Program.
US Medicaid rebates
Medicaid is a government insurance programme. Medicaid rebates have been
estimated using a combination of historical experience, product and population
growth, price changes and the impact of contracting strategies. The calculation also
involves interpretation of relevant regulations that are subject to changes in
interpretative guidance from government authorities. Novo Nordisk adjusts the
provision periodically to reflect actual sales performance. Medicaid rebates are
generally settled around 150 days from the transaction date.
Other US and non-US discounts and sales returns
Other discounts are provided to distributors, wholesalers, hospitals, pharmacies, etc.
They are usually linked to sales volume or provided as cash discounts. Discounts are
calculated based on historical data and recorded as a reduction in gross sales at the time
the related sales are recorded. Sales returns relate to damaged or expired products.
Other net sales disclosures
In 2023, Novo Nordisk had 3 major wholesalers distributing products in the US,
representing 22%, 17% and 15% respectively of global net sales (19%, 14% and 13%
in 2022 and 18%, 13% and 13% in 2021). Sales to these 3 wholesalers are within both
Diabetes and Obesity care and Rare disease.
Net sales to be recognised from fulfilling existing customer contracts containing fixed
or minimum sales volumes, with an original term greater than 12 months, are
expected to be DKK 3,166 million within 12 months (DKK 1,835 million in 2022) and
DKK 443 million thereafter (DKK 798 million in 2022).
Novo Nordisk's sales are impacted by exchange rate changes. Refer to note 4.4 for
development in key exchange rates.
ACCOUNTING POLICIES
Revenue from sale of goods is recognised when Novo Nordisk has transferred control
of products sold to the buyer and it is probable that Novo Nordisk will collect the
consideration to which it is entitled for transferring the products. Control of the products
is transferred at a single point in time, typically on delivery. The amount of sales to be
recognised is based on the consideration Novo Nordisk expects to receive in exchange
for its goods. When sales are recognised, Novo Nordisk also records estimates for a
variety of sales deductions; including product returns as well as rebates and discounts
to government agencies, wholesalers, health insurance companies, managed healthcare
organisations and retail customers. Sales deductions are recognised as a reduction of
gross sales to arrive at net sales, by assessing the expected value of the sales deductions
(variable consideration). Where contracts contain customer acceptance criteria, Novo
Nordisk recognises sales when the acceptance criteria are satisfied.
In some markets, Novo Nordisk sells products on a sale-or-return basis. Where there
is historical experience or a reasonably accurate estimate of future returns, estimated
product returns are recorded as a reduction in sales. Where shipments of new products
are made on a sale-or-return basis, without sufficient historical experience for
estimating sales returns, revenue is recorded based on estimated demand and
acceptance rates for well-established products with similar market characteristics. If
similar market characteristics do not exist, revenue is recorded when there is evidence
of consumption or when the right of return has expired.
Unsettled rebates are recognised as provisions when the timing or amount is
uncertain (note 3.5).
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
56
Where absolute amounts are known, the rebates are recognised as other liabilities.
Wholesaler charge-backs that are absolute are netted against trade receivable balances.
The impact of foreign currency hedging in the income statement is recognised as part
of financial items. Refer to notes 4.4, 4.5 and 4.10 for more details on hedging.
2.2 Segment information
Business segments – Key figures
Diabetes and Obesity care
Rare disease
Total
KEY ACCOUNTING ESTIMATES OF SALES DEDUCTIONS AND
PROVISIONS FOR SALES REBATES
Sales deductions are estimated and provided for at the time the related sales are
recorded. These estimates of unsettled rebate, discount and product return obligations
is considered a key accounting estimate as not all conditions are known at the time of
sale, for example total sales volume to a given customer. The estimates are based on
analyses of existing contractual obligations and historical experience. Provisions are
calculated on the basis of a percentage of sales for each product as defined by the
contracts with the various customer groups. Provisions for sales rebates are adjusted to
actual amounts as rebates, discounts and returns are processed.
Revenue related to the 340B Drug Pricing Program can only be recognised to the
extent that it is highly probable that a significant reversal of the recognised revenue
will not occur. Significant estimation is required to determine the amount of revenue
to recognise. Management has considered interpretations of applicable laws, whether
the consideration is highly susceptible to factors outside Novo Nordisk's influence, as
well as the experience of historical claims. Refer to note 3.5 for information on the
ongoing litigation related to the 340B Drug Pricing Program.
Novo Nordisk considers the provisions established for sales rebates to be reasonable
and appropriate based on the information currently available. However, the actual
amount of rebates and discounts may differ from the amounts estimated by
Management as more detailed information becomes available.
DKK million
Net sales
Cost of goods sold
2023
2022
2021
215,098
156,412
121,597
(30,483)
(23,405)
(19,363)
Sales and distribution costs
(52,477)
(42,392)
(33,791)
Research and development costs
(28,073)
(20,157)
(15,600)
Administrative costs
(4,435)
(3,955)
(3,504)
Other operating income and expenses
Segment operating profit
Operating margin
Depreciation, amortisation and impairment
losses expensed
(7)
99,623
46.3%
892
199
67,395
49,538
43.1%
40.7%
2023
17,163
(5,282)
(4,266)
(4,370)
(420)
126
2,951
17.2%
2022
20,542
(5,043)
(3,825)
(3,890)
(512)
142
7,414
36.1%
2021
2023
2022
2021
19,203
232,261
176,954
140,800
(4,295)
(35,765)
(28,448)
(23,658)
(3,217)
(56,743)
(46,217)
(37,008)
(2,172)
(32,443)
(24,047)
(17,772)
(546)
133
(4,855)
(4,467)
(4,050)
119
1,034
332
9,106
102,574
74,809
58,644
47.4%
44.2%
42.3%
41.7%
(8,195)
(5,701)
(4,895)
(1,218)
(1,661)
(1,130)
(9,413)
(7,362)
(6,025)
Business segments
Novo Nordisk operates in two business segments based on therapies: Diabetes and
Obesity care and Rare disease, representing the entirety of the Group's operations.
The activities of the segments include research, development, manufacturing and
marketing of products within the following areas:
• Diabetes and Obesity care: diabetes, obesity, cardiovascular and emerging therapy areas
•
Rare disease: rare blood disorders, rare endocrine disorders and hormone
replacement therapy.
Segment performance is evaluated on the basis of operating profit, consistent with the
consolidated financial statements. Financial income and expenses and income taxes
are managed at Group level and are not allocated to business segments. There are no
sales or other transactions between the business segments. Costs have generally been
split between business segments according to a specific allocation. Certain corporate
overhead costs are allocated between segments based on overall allocation keys.
Other operating income and expenses have been allocated to the two segments based
on the same principle.
ACCOUNTING POLICIES
Operating segments are reported in a manner consistent with the internal reporting
provided to Executive Management and the Board of Directors. We consider Executive
Management to be the operating decision-making body.
Geographical areas
In 2023, Novo Nordisk operated in two main commercial units:
• International Operations
• EMEA: Europe, the Middle East and Africa.
• China: Mainland China, Hong Kong and Taiwan.
• Rest of World: All other countries except for North America.
• North America Operations (the US and Canada).
In 2023, the US contributed 10% or more of total net sales. In 2022, the US also
contributed 10% or more of total net sales. The country of domicile is Denmark, which
is part of EMEA. Denmark is immaterial to Novo Nordisk's activities in terms of sales as
99.2% of total net sales are realised outside Denmark (99.8 % in 2022). Sales are
attributed to geographical areas according to the location of the customer.
Out of total property, plant and equipment and intangible assets of DKK 151,367 million
(DKK 117,610 million in 2022), DKK 82,274 million is located in Denmark (DKK 54,492
million in 2022) and DKK 46,609 million is located in the US (DKK 44,267 million in
2022) where the majority of production facilities and intangible assets are located.
Refer to note 5.7 for an overview of companies in the Novo Nordisk Group based on
geographical areas.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
57
Net sales – Business segments and geographical areas
DKK million
2023
2022
2021
2023
2022
2021
2023
2022
2021
2023
2022
2021
2023
2022
2021
2023
2022
2021
2023
2022
2021
Total IO
EMEA
China
Rest of World
Total NAO
US
Total International Operations
Total North America Operations
Total Novo Nordisk
net sales
Diabetes and Obesity care segment:
Rybelsus®
Ozempic®
Victoza®
Total GLP-1
Long-acting insulin
• of which Tresiba®
• of which Xultophy®
• of which Levemir®
Premix insulin
• of which Ryzodeg®
• of which NovoMix®
Fast-acting insulin
• of which Fiasp®
• of which NovoRapid®
Human insulin
Total insulin
Other Diabetes care
Total Diabetes care
Wegovy®
Saxenda®
Total Obesity care
7,389
3,155
524
4,232
1,714
26,378
17,369
8,856
14,327
10,417
4,850
5,672
6,726
2,166
2,724
289
6,393
3,527
38,617
26,196
16,106
20,725
14,855
10,209
11,339
11,403
11,074
5,864
2,887
2,588
6,092
2,400
2,911
5,486
2,135
3,453
9,342
10,023
10,512
3,730
5,612
2,889
7,134
1,711
8,801
10,415
10,826
10,903
1,512
8,903
6,134
1,354
9,472
6,508
1,106
9,797
7,453
7,103
3,435
1,831
1,837
2,570
587
1,983
6,695
1,266
5,429
1,919
7,157
3,485
1,716
1,956
2,622
495
2,127
6,456
1,138
5,318
1,983
6,729
2,979
1,693
2,057
2,879
392
2,487
6,454
965
5,489
2,152
131
4,821
1,256
6,208
1,649
848
409
392
4,441
1,965
2,476
1,545
—
1,545
1,213
63
2,196
1,478
3,737
1,636
1,050
45
541
4,912
1,218
3,694
1,942
—
1,942
1,812
—
303
1,544
3,026
7,230
1,428
1,847
11,684
2,080
1,095
3
982
5,224
283
4,941
2,288
—
2,288
2,692
2,587
1,581
647
359
2,331
1,178
1,153
2,175
246
1,929
3,002
1,378
4,756
1,470
7,604
2,610
1,557
639
414
2,489
1,176
1,313
2,428
216
2,212
2,713
235
11,361
8,144
4,314
11,060
8,011
4,243
18,750
11,299
4,838
2,160
69,340
42,381
24,849
63,010
38,750
23,168
95,718
59,750
33,705
1,655
3,814
6,650
8,328
3,613
6,406
8,031
8,664
12,322
15,054
4,050
84,515
57,175
37,491
77,683
53,167
35,442
123,132
83,371
53,597
2,265
1,412
439
414
2,409
1,036
1,373
2,161
141
2,020
2,609
3,566
1,888
332
5,338
3,261
409
6,990
4,243
522
2,931
1,333
325
4,685
2,723
399
1,346
1,668
2,225
1,273
1,563
2,107
6,412
14,905
16,741
18,064
3,793
512
7,752
3,219
3,934
9,353
2,809
4,579
9,729
2,657
5,678
232
—
232
539
—
539
691
—
691
216
—
216
517
—
517
665
—
665
9,574
10,562
11,203
3,730
5,844
2,889
7,673
1,711
9,492
5,534
6,637
6,784
5,265
6,247
6,357
15,949
17,463
17,687
661
4,873
1,460
649
5,988
1,678
642
6,142
1,599
618
4,647
1,406
606
5,641
1,605
605
2,173
2,003
1,748
5,752
13,776
15,460
15,939
1,515
7,594
8,186
9,052
37,230
38,760
39,942
18,287
18,218
18,214
8,848
10,302
12,284
10,095
10,240
9,444
10,792
14,192
16,064
9,818
13,054
14,949
48,022
52,952
56,006
1,987
2,428
2,644
661
717
713
892
1,181
1,432
434
530
499
325
797
950
267
660
806
2,312
3,225
3,594
77,834
67,384
58,692
39,673
33,790
29,136
15,948
15,220
15,563
22,213
18,374
13,993
95,632
72,164
54,505
87,768
66,881
51,197
173,466
139,548
113,197
1,913
6,402
8,315
54
5,832
5,886
—
3,117
3,117
1,913
3,780
5,693
54
3,561
3,615
—
1,809
1,809
—
146
146
—
133
133
—
61
61
—
2,476
2,476
—
2,138
2,138
—
29,430
1,247
3,887
6,134
4,844
1,386
29,430
3,897
3,306
6,134
4,368
1,386
31,343
6,188
3,526
10,289
10,676
1,247
33,317
10,978
5,283
32,736
10,502
4,912
41,632
16,864
1,386
7,014
8,400
Diabetes and Obesity care total
86,149
73,270
61,809
45,366
37,405
30,945
16,094
15,353
15,624
24,689
20,512
15,240
128,949
83,142
59,788
120,504
77,383
56,109
215,098
156,412
121,597
Rare disease segment:
Rare blood disorders
• of which Haemophilia A
• of which Haemophilia B
• of which NovoSeven®
Rare endocrine disorders
Other Rare disease
Rare disease total
6,432
1,939
584
3,789
2,045
1,006
6,671
1,769
479
4,335
4,904
1,002
5,784
1,625
400
3,673
4,880
1,064
4,021
1,271
377
2,285
699
781
3,795
1,137
294
2,311
2,232
804
3,712
1,162
268
2,225
2,212
837
9,483
12,577
11,728
5,501
6,831
6,761
372
223
13
136
216
5
593
604
81
13
510
246
6
856
222
2,039
2,272
1,850
5,344
5,035
4,433
5,070
4,710
4,170
11,776
11,706
10,217
24
4
194
167
6
445
194
1,368
1,130
220
551
172
1,514
2,426
192
439
128
1,254
2,501
221
483
477
4,169
1,791
545
569
280
3,973
2,234
696
487
237
3,548
2,423
619
468
336
4,065
1,757
203
543
152
3,811
2,205
358
460
102
3,461
2,400
330
2,422
1,061
7,958
3,836
1,551
2,338
2,112
759
8,308
7,138
1,698
637
7,221
7,303
1,683
395
3,389
4,890
4,572
7,680
7,965
7,475
7,030
7,273
6,900
17,163
20,542
19,203
Total sales by geographical area
95,632
85,847
73,537
50,867
44,236
37,706
16,687
16,209
16,019
28,078
25,402
19,812
136,629
91,107
67,263
127,534
84,656
63,009
232,261
176,954
140,800
Total sales growth as reported
11.4%
16.7%
11.7%
15.0%
17.3%
9.9%
2.9%
1.2%
13.7%
10.5%
28.2%
13.5%
50.0%
35.4%
10.1%
50.6%
34.4%
9.0%
31.3%
25.7%
10.9%
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
58
2.3 Research and development costs
DKK million
Employee costs (note 2.4)
2023
12,429
2022
9,952
2021
7,328
Research and development activities are mainly carried out by Novo Nordisk's research
and development centres, in Denmark, the US, the UK and China. Clinical trials are
carried out all over the world. Novo Nordisk also enters into partnerships and licence
agreements.
Amortisation and impairment losses,
intangible assets (note 3.1)
Depreciation and impairment losses,
property, plant and equipment (note 3.2)
Clinical trial cost
Other research and
development costs
Total research and development costs
As percentage of net sales
1,757
1,364
744
1,313
9,468
7,476
32,443
14.0%
922
6,313
736
4,214
5,496
4,750
24,047
17,772
13.6%
12.6%
Other research and development costs mainly comprise external consulting fees, IT
services, facilities, consumables and other internal costs.
ACCOUNTING POLICIES
Novo Nordisk expenses all research costs. Due to significant regulatory uncertainties
and other uncertainties inherent in the development of new products, internal and
subcontracted development costs are also expensed as they are incurred, in line with
industry practice. This means that they do not qualify for capitalisation as intangible
assets until marketing approval by a regulatory authority is obtained or considered
highly probable. Costs for post-approval activities that are required by authorities as
a condition for obtaining regulatory approval are recognised as research and
development costs.
Novo Nordisk's research and development is mainly focused on:
• Insulins, GLP-1s and other therapeutic compounds for diabetes treatment
• GLP-1s, combinations and new modes of action for Obesity care
•
Blood-clotting factors and new modes of action for treatment of haemophilia
and other rare blood disorders
•
• Novel targets within cardiovascular disease focusing on ASCVD and Heart failure
Human growth hormone and new modes of action for treatment of growth
•
disorders and other rare endocrine disorders
New indications with existing assets within MASH, Alzheimer’s disease and
chronic kidney disease
Research technology platforms including cell therapy and RNAi for treatment of
MASH, cardiovascular disease, chronic kidney disease and Parkinson's disease,
among others
•
The research activities mainly utilise biotechnological methods based on advanced
protein chemistry and protein engineering. These methods have played a key role in
the development of the production technology used to manufacture insulin, GLP-1,
recombinant blood-clotting factors and human growth hormone. Research activities
further utilise new technology platforms including stem cells, gene therapy, small
molecules and RNAi therapies.
Research and development costs primarily comprise employee costs as well as internal
and external costs related to execution of studies, including manufacturing costs and
facility costs of the research centres. The costs also comprise amortisation, deprecia-
tion and impairment losses related to intellectual property rights and property, plant
and equipment used in the research and development activities.
Amortisations of intellectual property rights related to marketed products are
recognised in cost of goods sold. Royalty expenses paid to partners after regulatory
approval are also expensed as cost of goods sold.
Contractual research and development obligations to be paid in the future are
disclosed separately as commitments in note 5.2.
2.4 Employee costs
DKK million
Wages and salaries
Share-based payment costs (note 5.1)
Pensions – defined contribution plans
Pensions – defined benefit plans
Other social security contributions
Other employee costs
2023
42,867
2,149
3,267
126
3,039
4,066
2022
2021
34,575
28,939
1,539
2,472
185
2,713
3,105
1,040
2,022
139
2,203
2,189
Total employee costs for the year
55,514
44,589
36,532
Employee costs capitalised as intangible
assets and property, plant and equipment
Change in employee costs capitalised
as inventories
Total employee costs
in the income statement
Included in the income statement:
Cost of goods sold
Sales and distribution costs
Research and development costs
Administrative costs
Other operating income and expenses
Total employee costs in the
income statement
Number of employees
Number
Average number of full-time employees
Year-end number of full-time employees
Year-end employees (total)
(2,337)
(1,451)
(1,240)
(409)
(70)
(56)
52,768
43,068
35,236
15,490
20,810
12,429
3,962
77
11,766
17,700
9,952
3,517
133
9,611
15,003
7,328
3,098
196
52,768
43,068
35,236
2023
59,552
63,370
64,319
2022
51,046
54,393
55,185
2021
46,171
47,792
48,478
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
59
Remuneration to Executive Management and Board of Directors
2.6 Income taxes and deferred income taxes
DKK million
Salary and short-term incentive
Pension
Benefits
Long-term incentive1
Severance payments
Executive Management in total2
Fees to Board of Directors3
Total
2023
173
17
19
121
—
330
22
352
2022
141
13
9
97
—
260
20
280
2021
126
12
10
100
29
277
17
294
Income taxes expensed
DKK million
Current tax on profit for the year
Deferred tax on profit for the year
Tax on profit for the year
Current tax adjustments recognised
for prior years
Deferred tax adjustments recognised
for prior years
The deviation in foreign subsidiaries' tax rates from the Danish tax rate is mainly
driven by Swiss and US business activities. Other adjustments consist of tax related
to acquisitions and adjustments to prior years.
2023
25,918
(4,464)
21,454
2022
2021
17,829
13,871
(3,806)
(1,528)
14,023
12,343
(916)
339
(603)
453
(825)
(417)
From 1 January 2024 Novo Nordisk will be subject to Global Minimum Tax (OECD BEPS
Pillar 2 rules). The rules are not expected to have a material impact on the tax position
of Novo Nordisk in 2024.
ACCOUNTING POLICIES
The tax expense for the period comprises current and deferred tax. It also includes
adjustments to previous years and changes in provisions for uncertain tax positions.
Tax is recognised in the income statement except to the extent that it relates to items
recognised in equity or other comprehensive income. Provisions for ongoing tax
disputes are included as part of deferred tax assets, tax receivables and tax payables.
1. Refer to note 5.1 for further information on share-based payment schemes. 2. Total remuneration for
persons registered as members of Executive Management with the Danish Business Authority amounts to
DKK 195 million (DKK 175 million in 2022 and DKK 202 million in 2021). 3. All members of the Board of Directors
are registered with the Danish Business Authority.
ACCOUNTING POLICIES
Wages, salaries, social security contributions, annual leave and sick leave, bonuses
and non-monetary benefits are recognised in the year in which the associated
services are rendered by employees of Novo Nordisk. Where Novo Nordisk provides
long-term employee benefits, the costs are accrued to match the rendering of the
services by the employees concerned.
2.5 Other operating income and expenses
ACCOUNTING POLICIES
Other operating income and expenses, comprises licence income and income of a
secondary nature in relation to the main activities of Novo Nordisk. Licence income
from royalties on net sales is recognised as the underlying customers' sale occurs
and from sales milestones once the contingent sale milestone is achieved in
accordance with the terms of the relevant agreement.
Operating profit from the wholly owned subsidiary NNE A/S, not related to Novo
Nordisk's main activities, is recognised as other operating income and expenses.
Other operating income and expenses, also includes income from the sale of
intellectual property rights as well as transaction costs incurred in connection
with acquisition of businesses.
Income taxes in the income statement
20,991
13,537
11,323
Tax on other comprehensive income
for the year, (income)/expense
Computation of effective tax rate
359
889
(1,005)
DKK million
2023
2022
2021
Statutory corporate income tax rate
in Denmark
Deviation in foreign subsidiaries' tax
rates compared to the Danish tax
rate (net)
Non-taxable income less non-tax-
deductible expenses (net)
Other adjustments (net)
Effective tax rate
Income taxes paid
DKK million
Income taxes paid in Denmark for
current year
Income taxes paid outside Denmark
for current year
Income taxes paid/(repayments) relating
to prior years
22.0%
22.0%
22.0%
(0.9%)
(1.1%)
(1.5%)
(0.7%)
(0.3%)
20.1%
(0.5%)
(0.3%)
(0.8%)
(1.0%)
19.6%
19.2%
2023
2022
2021
16,242
9,181
9,703
8,906
5,647
3,439
749
(313)
1,296
Income taxes paid
25,897
14,515
14,438
Deferred income taxes arise from temporary differences between the accounting
and tax values of the individual consolidated companies and from realisable tax
loss carry-forwards. Deferred tax liabilities are not recognised if they arise from the
initial recognition of goodwill. Deferred income tax is also not accounted for if it arises
from initial recognition of an asset or liability in a transaction other than a business
combination that, at the time of the transaction, affects neither accounting nor taxable
profit or loss and does not give rise to equal taxable and deductible temporary
differences. The tax value of tax loss carry-forwards is included in deferred tax assets
to the extent that these are expected to be utilised in future taxable income. The
deferred income taxes are measured according to current tax rules and at the tax
rates assumed in the year in which the assets are expected to be utilised.
In general, the Danish tax rules related to dividends from group companies provide
exemption from tax for most repatriated profits. In some countries withholding tax
will be applied to dividends paid to Denmark. A provision for withholding tax is only
recognised if a concrete distribution of dividends is planned. The unrecognised
potential withholding tax amounts to DKK 1,026 million (DKK 567 million in 2022).
The value of future tax deductions in relation to share programmes is recognised
as a deferred tax asset until the shares are paid out to the employees. Any estimated
excess tax deduction compared to the costs realised in the income statement is
charged to equity.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
60
KEY ACCOUNTING ESTIMATES REGARDING DEFERRED INCOME TAX ASSETS
AND PROVISIONS FOR UNCERTAIN TAX POSITIONS
Management has considered future taxable income and has estimated the amount
of deferred income tax assets that should be recognised. The estimate is based on an
assessment of whether sufficient taxable income will be available in the future, against
which the temporary differences and unused tax losses can be utilised. The total tax
value of unrecognised tax loss carry-forwards amounts to DKK 360 million in 2023
(DKK 318 million in 2022).
In the course of conducting business globally, tax and transfer pricing disputes with
tax authorities may occur. Management has estimated the expected outcome of the
disputes by using the ‘most likely outcome’ method to determine the provisions for
uncertain tax positions. Management considers the provisions made to be adequate.
However, the actual obligation may deviate and depends on the result of litigation
and settlements with the relevant tax authorities.
Development in deferred income tax assets and liabilities
DKK million
2023
Net deferred tax asset/(liability) at the beginning of the year
Income/(charge) to the income statement
Income/(charge) to other comprehensive income
Income/(charge) to equity
Additions from acquisitions
Effect of exchange rate adjustment
Property,
plant and
equipment
Intangible
assets
Inventories
Liabilities
Other
Offset
within
countries
(2,402)
(213)
(8,279)
(2,106)
—
—
—
54
—
—
—
144
2,595
(645)
(224)
—
—
(9)
11,007
3,973
(6)
—
—
(547)
3,922
3,002
(129)
(120)
62
139
Net deferred tax asset/(liability) at the end of the year
(2,561)
(10,241)
1,717
14,427
6,876
Classified as follows:
Deferred tax asset at the end of the year
Deferred tax liability at the end of the year
2022
433
245
(2,994)
(10,486)
Net deferred tax asset/(liability) at the beginning of the year
(1,980)
(7,375)
Income/(charge) to the income statement
Income/(charge) to other comprehensive income
Income/(charge) to equity
Additions from acquisition of businesses (note 5.3)1
Effect of exchange rate adjustment1
(413)
—
—
—
(9)
674
—
—
(1,475)
(103)
1,820
(103)
3,195
(465)
(130)
—
—
(5)
14,792
(365)
6,932
3,999
(141)
—
—
217
6,986
(110)
2,629
836
(608)
234
766
65
Net deferred tax asset/(liability) at the end of the year1
(2,402)
(8,279)
2,595
11,007
3,922
Classified as follows:
Deferred tax asset at the end of the year1
Deferred tax liability at the end of the year
579
195
2,627
11,027
(2,981)
(8,474)
(32)
(20)
4,646
(724)
(5,170)
5,170
13,904
(7,061)
1. Comparatives were restated to reflect change in the provisional valuation of net identifiable assets from a business combination completed in 2022. Reference is made to note 5.3.
Total
6,843
4,011
(359)
(120)
62
(219)
10,218
—
—
—
—
—
—
—
(3,896)
20,380
3,896
(10,162)
—
—
—
—
—
—
—
3,401
4,631
(879)
234
(709)
165
6,843
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
61
Section 3
Operating assets
and liabilities
3.1 Intangible assets
Amortisation and impairment losses
DKK million
Cost of goods sold
Sales and distribution costs
Research and development costs
Administrative costs
Other operating income and expenses
Total amortisation
and impairment losses
Total amortisation
Total impairment losses
DKK million
2023
Cost at the beginning of the year
Additions during the year
Disposals during the year
Effect of exchange rate adjustment
Cost at the end of the year
2023
982
9
1,757
41
459
3,248
1,834
1,414
2022
846
34
1,364
19
96
2,359
1,599
760
2021
844
39
744
11
1
Amortisation and impairment losses at the beginning of the year
Amortisation for the year
Impairment losses for the year
Impairment losses reversed during the year
Amortisation and impairment losses reversed on disposals during the year
Effect of exchange rate adjustment
Amortisation and impairment losses at the end of the year
Carrying amount at the end of the year
1,639
2022
1,066
Cost at the beginning of the year
573
Additions from acquisition of businesses (note 5.3)1
Additions during the year
Disposals during the year
Effect of exchange rate adjustment1
Cost at the end of the year1
Amortisation and impairment losses at the beginning of the year
Amortisation for the year
Impairment losses for the year
Amortisation and impairment losses reversed on disposals during the year
Effect of exchange rate adjustment
Amortisation and impairment losses at the end of the year
Carrying amount at the end of the year1
Intellectual
property
rights
Software
and other
intangibles
Total
intangible
assets
Goodwill
4,615
—
—
(151)
4,464
—
—
—
—
—
—
—
49,731
12,567
(1,629)
76
60,745
6,737
1,621
1,776
(382)
(1,629)
102
8,225
4,464
52,520
4,346
41,802
—
—
—
269
5,766
1,310
(151)
1,004
4,615
49,731
—
—
—
—
—
—
4,652
1,404
760
(149)
70
6,737
4,615
42,994
5,281
500
(158)
(39)
5,584
1,951
213
20
—
(16)
(6)
2,162
3,422
3,434
492
1,426
(33)
(38)
5,281
1,759
195
—
(13)
10
1,951
3,330
59,627
13,067
(1,787)
(114)
70,793
8,688
1,834
1,796
(382)
(1,645)
96
10,387
60,406
49,582
6,258
2,736
(184)
1,235
59,627
6,411
1,599
760
(162)
80
8,688
50,939
1. Comparatives were restated to reflect change in provisional valuation of net identifiable assets from a business combination completed in 2022. Reference is made to note 5.3.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
62
Description of material additions
2023 additions
Novo Nordisk acquired Ocedurenone for uncontrolled hypertension with potential
application in cardiovascular and kidney disease from KBP Biosciences PTE., Ltd.
Ocedurenone is an orally administered, small molecule, non-steroidal mineralocorticoid
receptor antagonist (nsMRA) that is currently being examined in the phase 3 trial
CLARION-CKD in patients with uncontrolled hypertension and advanced chronic
kidney disease (CKD). The transaction has been accounted for as an asset acquisition,
with DKK 5,650 million recognised in intellectual property rights.
Novo Nordisk acquired Inversago Pharma Inc. and obtained ownership of the
development asset INV-202. INV-202, an oral CB1 inverse agonist, is designed to
preferentially block the receptor protein CB1, which plays an important role in
metabolism and appetite regulation. The transaction has been accounted for as an
asset acquisition, with DKK 4,321 million recognised in intellectual property rights.
Novo Nordisk acquired Biocorp Production in a transaction accounted for as an
asset acquisition with DKK 1,221 million recognised in intellectual property rights.
Of the total additions of intangible assets, DKK 500 million relates to internally
generated software and other intangibles (DKK 544 million in 2022).
2022 additions
Additions from acquisition of businesses relates to Novo Nordisk’s acquisition of
Forma Therapeutics Holdings, Inc., which primarily includes the lead candidate
Etavopivat, which is recognised within intellectual property rights; refer to note
5.3 for details on the business combination.
Impairment test
Intangible assets other than goodwill
In 2023, an impairment loss of DKK 1,796 million (DKK 760 million in 2022) was
recognised. The entire DKK 1,796 million (DKK 250 million in 2022) of the impairment
was related to the Diabetes and Obesity care segment. DKK 382 million was
recognised as a reversal of prior impairment related to Rare disease (DKK 510 million
impairment loss in 2022). The entire impairment loss in 2023, including the reversal
of prior impairment, was recognised in research and development costs (DKK 760
million in research and development costs in 2022). The impairment was a result of
Management’s review of expectations related to intellectual property rights not yet
in use.
No impairment related to marketable products was identified in 2023 or in 2022.
Goodwill
As of 31 December 2023, goodwill is allocated to the segments Diabetes and Obesity
care DKK 4,018 million (DKK 4,154 million in 2022) and Rare Disease DKK 446 million
(DKK 461 million in 2022). No impairment of goodwill was recognised in 2023 or 2022
as the annual impairment test showed that the estimated recoverable amount in the
forecast period exceeded the carrying amount of the cash-generating units to which
goodwill was allocated.
Goodwill is monitored for impairment at the operating segment level, which is the lowest
level CGU to which consolidated goodwill is allocated and monitored by Management.
CGUs are therefore defined as Novo Nordisk's business segments, Diabetes and Obesity
care and Rare disease. The recoverable amount is estimated using an income-approach
and is based on discounted cash flow projections. The applied post-tax discount rates for
Diabetes and Obesity care and Rare diseases are 7.0% (Pre-tax discount rate of 8.3%). Cash
flow projections are based on budgets approved by Management. The forecast period for
Diabetes and Obesity care, and Rare diseases is 9 years.
The discounted cash flow from the budget and forecast period significantly exceeds the
carrying amount of goodwill.
The key assumptions and sensitivities are Novo Nordisk’s volume market share, growth
rates, pricing, development of new markets and the success rate for introducing new
products and treatments. Sensitivities are affected by external factors such as market
and generic competition, and price regulation.
ACCOUNTING POLICIES
Research and development projects
Internal and subcontracted research costs are fully charged to the consolidated
income statement in the period in which they are incurred. Consistent with industry
practice, development costs are also expensed until regulatory approval is obtained
or is probable; refer to note 2.3.
Payments to third parties under collaboration and licence agreements are assessed
for the substance of their nature. Payments which represent subcontracted research
and development work are expensed as the services are received. Payments which
represent rights to the transfer of intellectual property, developed at risk by the third
party, are capitalised.
For acquired research and development projects, and intellectual property rights, the
likelihood of obtaining future commercial sales is reflected in the cost of the asset,
and thus the probability recognition criteria is always considered to be satisfied. As the
cost of acquired research and development projects can often be measured reliably,
these projects fulfil the capitalisation criteria as intangible assets on acquisition.
Subsequent milestone payments payable on achievement of a contingent event (e.g.
commencement of phase 3 trials) are accrued and capitalised into the cost of the
intangible asset when the achievement of the event is probable. Development costs
incurred subsequent to acquisition are treated consistently with internal project
development costs.
The value assigned to key assumptions reflects past experience adjusted for market specific
risks or expected changes. Fair value is determined using largely unobservable inputs.
Recognition and measurement
Intangible assets are initially measured at cost, and are subsequently measured at
cost less any accumulated amortisation and any impairment loss.
Other intangible assets disclosures
Intangible assets with an indefinite useful life and intangible assets not yet available for
use amount to DKK 34,012 million (DKK 27,536 million in 2022), primarily intellectual
property rights and goodwill. The carrying amount of internally generated intangible
assets amounts to DKK 1,277 million at end of 2023 (DKK 1,017 million in 2022).
For intellectual property rights acquired for research and development projects,
upfront fees and acquisition costs are capitalised as the historical cost. Subsequent
milestone payments payable on achievement of a contingent event will be capitalised
when the contingent event being achieved is probable. Intangible assets acquired in a
business combination are recognised at fair value at the acquisition date.
Intellectual property rights include DKK 5,650 million related to Ocedurenone
(acquired in 2023), DKK 5,740 million related to Etavopivat (DKK 5,546 million in 2022),
DKK 4,648 million related to Ziltivekimab (DKK 4,648 million in 2022), all of which are
intangible assets under development.
Amortisation is based on the straight-line method over the estimated useful life. This
corresponds to the legal duration or the economic useful life depending on which is
shorter, and not exceeding 25 years in either case. The amortisation of intellectual
property rights commences after regulatory approval has been obtained or when
assets are put in use.
In addition, intellectual property rights contain DKK 6,018 million related to Rybelsus®
(DKK 6,584 million in 2022), which has a remaining useful life of 11 years (12 years in
2022), DKK 4,206 million related to Nedosiran (DKK 3,704 million in 2022) with a
remaining useful life of 13 years and DKK 9,480 million (DKK 10,251 million in 2022)
related to the RNAi technology platform, with a remaining estimated useful life of 21
years (22 years in 2022).
Amortisation of software is based on the straight-line method over the estimated useful life
of 3-15 years. The amortisation commences when the asset is in the location and condition
necessary for it to be capable of operating in the manner intended by Management.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
63
Impairment test
Goodwill and intangible assets with an indefinite useful life and intangible assets
not yet available for use are tested for impairment when indicators of impairment
exist. However, they are tested at least annually, irrespective of whether there is any
indication that they may be impaired. Goodwill is allocated to operating segments
based on expected future cash flow from products utilizing the synergies and
know-how acquired.
Impairment tests are based on Management’s projections and anticipated net present
value of estimated future cash flows from marketable products. The discount rate
used is based on the Group WACC, adjusted where appropriate, to reflect the risk of
the specific asset tested. Fair value is determined using largely unobservable inputs.
Accordingly, the valuation technique and inputs used to measure fair value are
classified as level 3 in the fair value hierarchy.
Assets that are subject to amortisation are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not
be recoverable. Factors considered material that could trigger an impairment test
include the following:
• Development of a competing drug
• Realised sales trending below predicted sales
• Changes or anticipated changes in participation rates or reimbursement policies
• Inconsistent or unfavourable clinical readouts
• Changes in the legal framework covering patents, rights and licences
• Advances in medicine and/or technology that affect the medical treatments
• Adverse impact on reputation and/or brand names
• Changes in the economic lives of similar assets
• Relationship to other intangible assets or property, plant and equipment
If the carrying amount of intangible assets exceeds the recoverable amount based on
the existence of one or more of the above indicators of an impairment, any impairment
is measured based on discounted projected cash flows. Impairments on intangible
assets, other than goodwill, are reviewed at each reporting date for possible reversal.
KEY ACCOUNTING ESTIMATES ON INTANGIBLE ASSETS
Impairment tests are based on Management’s projections and anticipated net present
value of estimated future cash flows from marketable products.
When collaboration agreements contain elements of acquisition of intangible assets and
research and development activities to be performed by the counterpart, Management
estimates the allocation of payments that should be deferred to the acquisition of
intangible assets and prepaid research and development activities respectively.
3.2 Property, plant and equipment
DKK million
2023
Cost at the beginning of the year
Additions during the year
Disposals during the year
Transfer and reclassifications
Effect of exchange rate adjustment
Cost at the end of the year
Depreciation and impairment losses at the beginning of the year
Depreciation for the year
Impairment losses for the year
Depreciation and impairment losses reversed on disposals during the year
Effect of exchange rate adjustment
Depreciation and impairment losses at the end of the year
Carrying amount at the end of the year
2022
Cost at the beginning of the year
Additions from acquisition of businesses (note 5.3)
Additions during the year
Disposals during the year
Transfer and reclassifications
Effect of exchange rate adjustment
Cost at the end of the year
Depreciation and impairment losses at the beginning of the year
Depreciation for the year
Impairment losses for the year
Depreciation and impairment losses reversed on disposals during the year
Effect of exchange rate adjustment
Depreciation and impairment losses at the end of the year
Carrying amount at the end of the year
Land and
buildings
Plant and
machinery
Other
equipment
Assets
under
construction
Property,
plant and
equipment
43,403
37,548
8,114
22,361
111,426
2,681
(690)
4,246
(650)
48,990
16,781
2,450
6
(664)
(248)
18,325
30,665
47
(952)
4,679
(371)
40,951
22,935
1,919
118
(942)
(196)
23,834
17,117
873
(624)
731
(115)
8,979
5,039
1,086
24
(597)
(89)
5,463
3,516
27,830
(562)
(9,656)
31,431
(2,828)
—
(310)
(1,446)
39,663
138,583
—
—
562
(562)
—
—
39,663
44,755
5,455
710
(2,765)
(533)
47,622
90,961
41,076
35,944
7,776
11,091
95,887
297
706
(205)
1,000
529
43,403
14,669
2,245
3
(188)
52
16,781
26,622
2
143
(123)
1,152
430
37,548
21,138
1,793
10
(123)
117
22,935
14,613
14
645
(621)
329
(29)
8,114
4,718
916
3
(615)
17
5,039
3,075
—
313
13,160
14,654
(33)
(2,481)
624
(982)
—
1,554
22,361
111,426
—
—
33
(33)
—
—
22,361
40,525
4,954
49
(959)
186
44,755
66,671
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
64
Depreciation and impairment losses
DKK million
Cost of goods sold
Sales and distribution costs
Research and development costs
Administrative costs
Other operating income and expenses
Total depreciation and
impairment losses
Of which related to leased assets
2023
3,968
504
1,313
354
26
6,165
1,251
2022
3,229
424
922
408
20
5,003
1,052
2021
2,836
409
736
386
19
4,386
899
Capital expenditure in the reporting period was primarily related to investments in
facility upgrades and new production facilities for active pharmaceutical ingredients
(API) for current and future diabetes and obesity care products, mainly in Kalundborg.
The investments will establish additional capacity across the entire global value chain
from manufacturing of API to assembly and packaging, with the majority being
invested in API capacity.
ACCOUNTING POLICIES
Property, plant and equipment is measured at historical cost less accumulated
depreciations and any impairment loss. The cost of self-constructed assets includes
costs directly attributable to the construction of the assets. Any subsequent cost is
included in the asset’s carrying amount or recognised as a separate asset only when
it is probable that future economic benefits associated with the item will flow to Novo
Nordisk, and the cost of the item can be measured reliably. Depreciation is based on
the straight-line method over the estimated useful life of the assets (buildings: 12-50
years, plant and machinery: 5-25 years and other equipment: 3-10 years. Land is not
depreciated). Climate-related matters, including the commitment to reach net zero
emissions, were considered when estimating the useful lives of property, plant and
equipment.
3.3 Inventories
DKK million
Raw materials
Work in progress
Finished goods
Total inventories (gross)
Write-downs at year-end
Total inventories (net)
Depreciation commences when the asset is available for use, i.e. when it is in the
location and condition necessary for it to be capable of operating in the manner
intended by Management. The asset's residual value and useful life is reviewed and
adjusted, if appropriate, at the end of each reporting period. If an asset’s carrying
amount is higher than its estimated recoverable amount, it is written down to the
recoverable amount. Plant and equipment with no alternative use developed as part
of a research and development project are expensed. However, plant and equipment
with an alternative use or used for general research and development purposes are
capitalised and depreciated over the estimated useful life as research and develop-
ment costs.
Indirect production costs included in work in
progress and finished goods
Share of total inventories (net)
Movements in inventory write-downs:
Write-downs at the beginning of the year
Write-downs during the year
Utilisation of write-downs
Reversal of write-downs
Write-downs at the end of the year
2023
9,500
17,601
7,224
34,325
(2,514)
31,811
2022
6,392
13,673
6,038
26,103
(1,715)
24,388
13,101
10,640
41%
44%
1,715
1,808
(718)
(291)
2,514
2,256
1,110
(1,482)
(169)
1,715
Leased property, plant and equipment
DKK million
Land and buildings
Other equipment
Total
2023
5,157
768
5,925
2022
3,544
587
4,131
For contracts which are, or contain, a lease, the Group recognises a right-of-use asset
and a lease liability. The right-of-use asset is initially measured at cost, being the initial
amount of the lease liability. The right-of-use asset is subsequently depreciated using
the straight-line method over the lease term. The right-of-use asset is periodically
adjusted for certain remeasurements of the lease liability and reduced by any
impairment losses.
Novo Nordisk mainly leases office buildings, warehouses, laboratories and vehicles.
The right-of-use asset is presented in property, plant and equipment and the lease
liability in borrowings.
In 2023, the total amount recognised in the income statement related to leases was
DKK 1,832 million (DKK 1,491 million in 2022 and DKK 1,303 million DKK 2021). The
total cash outflow for leases amounted to DKK 2,022 million (DKK 1,438 million in
2022 and DKK 1,275 million in 2021). As of 31 December 2023, the lease liability
of DKK 5,726 million excludes potential lease payments of DKK 4,051 million
(undiscounted) related to optional lease term extension rights on properties that
were not considered reasonably certain to be exercised (DKK 3,723 million in 2022).
Refer to note 4.6 for a maturity analysis of lease payments and 5.2 for commitments
not recognised in the balance sheet related to leases.
The lease term determined by the Group is the non-cancellable period of a lease,
together with extension/termination option, if these are reasonably certain to be
exercised. For contracts with a rolling term (evergreen leases), the Group estimates the
leasing period to be equal to the termination period, if no probable scenario exists for
estimating the leasing period.
If the lease liability is remeasured due to a change in future lease payments a
corresponding adjustment is made to the right-of-use asset, or in the income
statement when the right-of-use asset has been fully depreciated. For a description
of accounting policies for lease liabilities, refer to note 4.9.
All write-downs in both 2023 and 2022 relate to fully impaired inventory.
ACCOUNTING POLICIES
Inventories are stated at cost or net realisable value, whichever is lower. Cost is
determined using the first-in, first-out method. Cost comprises direct production costs
such as raw materials, consumables and labour. Production costs for work in progress and
finished goods include indirect production costs such as employee costs, depreciation,
maintenance, etc. If the expected sales price less completion costs to execute sales (net
realisable value) is lower than the carrying amount, a write-down is recognised for the
amount by which the carrying amount exceeds its net realisable value.
Inventory manufactured prior to regulatory approval (prelaunch inventory) is capitalised
but immediately written down, until there is a high probability of regulatory approval for
the product. The cost is recognised in the income statement as research and develop-
ment costs. Once there is a high probability of regulatory approval being obtained, the
write-down is reversed, up to no more than the original cost.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
65
3.4 Trade receivables
Movements in allowance for doubtful trade receivables
DKK million
Carrying amount at the beginning of the year
Reversal of allowance on realised losses
Net movement recognised in income statement
Effect of exchange rate adjustment
Allowance at the end of the year
2023
1,520
(39)
413
(100)
1,794
2022
1,430
(15)
212
(107)
1,520
Novo Nordisk’s customer base is comprised of government agencies, wholesalers,
retail pharmacies and other customers. Novo Nordisk closely monitors the current
economic conditions of countries impacted by currency fluctuations, high inflation
and an unstable political climate. These indicators, as well as payment history, are
taken into account in the valuation of trade receivables. Overall, the country risk
ratings in 2023 have remained unchanged from 2022. No loss allowance has been
recognised on trade receivables in factoring portfolios in 2023 and 2022. Refer
to note 4.4 for more information on the trade receivable programmes.
DKK million
2023
Not yet due
1-90 days
91-180 days
181-270 days
271-360 days
More than 360 days past due
Trade receivables
EMEA
China
Rest of World
North America Operations
Trade receivables
2022
Not yet due
1-90 days
91-180 days
181-270 days
271-360 days
More than 360 days past due
Gross
carrying
amount
Loss
allowance
Net
carrying
amount
64,327
(1,095)
63,232
1,557
211
111
90
268
66,564
10,183
1,865
6,396
48,120
66,564
50,649
729
194
149
57
302
(160)
(100)
(81)
(90)
(268)
1,397
111
30
—
—
(1,794)
64,770
(859)
(9)
(843)
(83)
(1,794)
(920)
(113)
(77)
(51)
(57)
(302)
9,324
1,856
5,553
48,037
64,770
49,729
616
117
98
—
—
Trade receivables
52,080
(1,520)
50,560
EMEA
China
Rest of World
North America Operations
Trade receivables
9,486
1,138
5,297
36,159
52,080
(859)
—
(632)
(29)
(1,520)
8,627
1,138
4,665
36,130
50,560
ACCOUNTING POLICIES
Trade receivables are initially recognised at transaction price and subsequently
measured at amortised cost using the effective interest method, less allowance
for doubtful trade receivables. The split of trade receivables and allowance for
trade receivables is based on the location of the customer.
Before being sold, trade receivables in factoring portfolios are measured at fair value
with changes recognised in other comprehensive income. The allowance for doubtful
receivables is deducted from the carrying amount of trade receivables, and the amount
of the loss is recognised in the income statement under sales and distribution costs.
Subsequent recoveries of amounts previously written off are credited against sales and
distribution costs.
Management makes allowance for doubtful trade receivables based on the simplified
approach to provide for expected credit losses, which requires the use of the lifetime
expected loss provision for all trade receivables. The allowance is an estimate based on
shared credit risk characteristics and the days past due. Generally, invoices are due for
payment within 90 days from shipment of goods. Loss allowance is calculated using an
ageing factor, geographical risk and specific customer knowledge. The allowance is
based on a provision matrix on days past due and a forward looking element relating
mainly to incorporation of Dun & Bradstreet country risk ratings and an individual
assessment. Refer to note 4.4 for a general description of credit risk.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
66
3.5 Provisions and contingent liabilities
DKK million
At the beginning of the year
Additional provisions, including increases to existing provisions
Amount used during the year
Adjustments, including unused amounts reversed during the year
Effect of exchange rate adjustment
At the end of the year
Non-current liabilities3
Current liabilities
Provisions
for sales
rebates1
Provisions
for legal
disputes
Provisions
for product
returns
Other
provisions2
2023
Total
2022
Total
69,499
285,266
(250,316)
(2,364)
(2,207)
99,878
451
99,427
2,376
1,937
(226)
(240)
(61)
3,786
3,763
23
1,030
1,010
(531)
12
11
1,532
613
919
1,972
74,877
55,894
588
288,801
207,715
(173)
(251,246)
(190,278)
(431)
(25)
1,931
1,822
(3,023)
(2,282)
107,127
6,649
109
100,478
(1,668)
3,214
74,877
4,590
70,287
1. Provisions for sales rebates are related to US Managed Care, Medicare, Medicaid, 340B Drug Pricing Program and other types of US rebates, as well as rebates in a number of European countries and Canada. 2. Other provisions
consists of various types of provisions, including obligations in relation to employee benefits such as jubilee benefits. 3. For non-current liabilities, provisions for sales rebates are expected to be settled after one year, provisions for
product returns will be utilised in 2024 and 2025. In the case of provisions for legal disputes, the timing of settlement cannot be determined.
Contingent liabilities
Novo Nordisk is currently involved in pending litigations, claims and investigations
arising out of the normal conduct of its business. While provisions that Management
deems to be reasonable and appropriate have been made for probable losses, there
are inherent uncertainties connected with these estimates.
Pending litigation against Novo Nordisk
Since January 2021, Novo Nordisk has made a number of changes to its policy in
the US related to facilitating delivery of its discounted medicines to commercial
pharmacies that contract with covered entities participating in the 340B Drug Pricing
Program. On 30 January 2023, the US Court of Appeals for the Third Circuit issued a
ruling holding that Novo Nordisk’s drug distribution policy was consistent with the
340B statute. However, rulings in similar cases involving other manufacturers are
pending before the US Courts of Appeals for the Seventh and DC Circuits, and such
cases may be subject to further discretionary appellate review before the US Supreme
Court. Depending on the outcome of any subsequent rulings and appeals in these
matters, there may be a material impact on Novo Nordisk’s financial position, net
sales and cash flow.
Mosaic Health Inc. and Central Virginia Health Services, Inc. (both 340B covered
entities) filed a putative class action lawsuit in Federal Court in New York against
Novo Nordisk, Eli Lilly and Company, Sanofi and AstraZeneca alleging a conspiracy
among the manufacturers to artificially fix prices of diabetes medications through
changes to their policies relating to the distribution of 340B drugs. The lawsuit was
subsequently dismissed by the Court on 2 September 2022. Plaintiffs have filed an
amended complaint. Novo Nordisk does not expect this matter to have a material
impact on Novo Nordisk’s financial position, operating profit or cash flow.
Novo Nordisk is currently defending several lawsuits, including putative class actions,
relating to the pricing of diabetes medicines in the US. The first lawsuit was filed in 2017
and in August 2023 a multi-district litigation was created in the United States District
court for the District of New Jersey. Nearly all pending matters also name Eli Lilly and
Company and Sanofi as defendants, while certain matters also name Pharmacy Benefit
Managers (PBMs) and related entities. Plaintiffs generally allege that the manufacturers
and PBMs colluded to artificially inflate list prices paid by consumers for diabetes
products, while offering reduced prices to PBMs through rebates used to secure
formulary access. Novo Nordisk does not expect the lawsuits to have a material
impact on Novo Nordisk’s financial position, operating profit or cash flow.
In 2016, Novo Nordisk received a Civil Investigative Demand (CID) from the US
Department of Justice (DOJ) relating to potential off-label marketing of NovoSeven®
(including high dose and for prophylactic use) and interactions with physicians and
patients. The DOJ investigation was likely prompted by a lawsuit filed in 2015 by a
former Novo Nordisk employee, who alleged Novo Nordisk caused the submission of
false claims to Medicare, Medicaid, Federal Employees Health Benefits Program and
private insurers in California as a result of the same conduct that was the subject of
the DOJ CID. In May 2023, at the Plaintiffs’ request, the case was transferred to the United
States District Court for the Western District of Washington. Following transfer, in July
2023, Plaintiffs filed a motion to revive their nationwide Medicare claims and their
Delaware Medicaid claims. Novo Nordisk filed a motion to dismiss these claims. Novo
Nordisk does not expect the lawsuits to have a material impact on Novo Nordisk’s
financial position, operating profit or cash flow.
Novo Nordisk, along with Eli Lilly, are defendants in numerous product liability lawsuits
(including in the US) related to the use of GLP-1-based treatments. Plaintiffs have alleged
that the use of these treatments, including Ozempic®, Wegovy® and Rybelsus®, have
caused various gastrointestinal and other injuries. Novo Nordisk is taking actions to
address the lawsuits. Novo Nordisk does not expect these lawsuits to have a material
impact on Novo Nordisk’s financial position, operating profit or cash flow.
Pending claims against Novo Nordisk and Investigations involving Novo Nordisk
Novo Nordisk has received Civil Investigative Demands (CIDs) or subpoenas from several
US authorities including Attorneys General from the states of Minnesota, New Mexico,
Washington, Colorado, Vermont, Texas and the US Federal Trade Commission that call
for the production of documents and information relating to, among other things, the
company’s trade practices relating to its insulin and GLP-1-based products. Novo Nordisk
is cooperating with the relevant government authorities in each of these investigative
matters and does not expect these matters to have a material impact on Novo Nordisk’s
financial position, operating profit or cash flow.
In December 2021, Novo Nordisk received a CID from the DOJ relating to the company’s
financial relationships with healthcare professional and prescriptions for Ozempic® and
Rybelsus® during the period of 1 January 2016 to present. Novo Nordisk is cooperating
with the DOJ in this investigation and does not expect this matter to have a material
impact on Novo Nordisk’s financial position, operating profit or cash flow.
Other contingent liabilities
In addition to the above, Novo Nordisk is engaged in certain litigation proceedings and
various ongoing audits and investigations. In the opinion of Management, neither
settlement nor continuation of such proceedings, nor such pending audits and
investigations, are expected to have a material effect on Novo Nordisk’s financial position,
operating profit or cash flow.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
67
KEY ACCOUNTING ESTIMATES REGARDING ONGOING LEGAL DISPUTES,
LITIGATION AND INVESTIGATIONS
Provisions for legal disputes consist of various types of provisions linked to ongoing
legal disputes. Management makes estimates regarding provisions and contingencies,
including the probability of pending and potential future litigation outcomes. These
are by nature dependent on inherently uncertain future events. When determining
likely outcomes of litigation, etc., Management considers the input of external counsel
on each case, as well as known outcomes in case law. Although Management believes
that the total provisions for legal proceedings are adequate based on currently
available information, there can be no assurance that there will not be any changes
in facts or matters, or that any future lawsuits, claims, proceedings or investigations
will not be material.
ACCOUNTING POLICIES
Provisions for sales rebates and discounts granted to government agencies, wholesal-
ers, retail pharmacies, Managed Care and other customers are recorded at the time
the related revenues are recorded or when the incentives are offered. Provisions are
calculated based on Management's interpretation of applicable laws and regulations,
historical experience and the specific terms in the individual agreements. Unsettled
rebates are recognised as provisions when the timing or amount is uncertain. Where
absolute amounts are known, the rebates are recognised as other liabilities. Refer to
note 2.1 for further information on sales rebates and provisions.
Provisions for legal disputes are recognised where a legal or constructive obligation
has been incurred as a result of past events and it is probable that there will be an
outflow of resources that can be reliably estimated. In this case, Novo Nordisk arrives
at an estimate based on an evaluation of the most likely outcome. Disputes for which
no reliable estimate can be made are disclosed as contingent liabilities.
Provisions are measured at the present value of the anticipated expenditure for
settlement. This is calculated using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the obligation. The
increase in the provision for interest is recognised as a financial expense.
Novo Nordisk issues credit notes for expired goods as a part of normal business.
Where there is historical experience or a reasonably accurate estimate of expected
future returns can otherwise be made, a provision for estimated product returns is
recorded. The provision is measured at gross sales value.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
68
Section 4
Capital structure and
financial items
4.1 Earnings per share
4.2 Distribution to shareholders
DKK million
Interim dividend for the year
Dividend for prior year
Share repurchases for the year
Total distribution for the year
2023
13,430
18,337
29,924
61,691
2022
9,613
15,690
24,086
49,389
2021
8,021
13,496
19,447
40,964
At the end of 2023, the share capital amounted to DKK 107 million in A share
capital (DKK 107 million in 2022 and 2021) and DKK 344 million in B share capital
(DKK 349 million in 2022 and DKK 355 million in 2021).
The A share capital and number of A shares of DKK 0.10 was in 2023 unchanged
besides the effect of the split in trading units, and unchanged in 2022 and 2021.
In 2023, the B share capital decreased by DKK 5 million (equal to cancellation of
50 million shares of DKK 0.10). The corresponding decrease in 2022 was DKK 6
million (equal to cancellation of 60 million shares of DKK 0.10) and decrease in
2021 of DKK 8 million (equal to cancellation of 80 million shares of DKK 0.10).
2023
2022
2021
Novo Nordisk's guiding principle is that any excess capital after the funding of organic
growth opportunities and potential acquisitions should be returned to investors.
Each A share of DKK 0.10 per share carries 100 votes and each B share of
DKK 0.10 per share carries 10 votes.
The net cash distribution to shareholders in the form of dividends and share repurchases
amounts to DKK 61,691 million, compared with a free cash flow of DKK 68,326 million.
Treasury shares
Net profit
DKK million
83,683
55,525
47,757
Average number of shares
outstanding1
Dilutive effect of average
outstanding share pool
Average number of shares
outstanding, including dilutive
effect of outstanding share pool
Basic earnings per share
Diluted earnings per share
in million
shares
in million
shares
in million
shares
4,482.8
4,530.6
4,593.2
12.0
14.0
13.0
4,494.8
4,544.6
4,606.2
DKK
DKK
18.67
18.62
12.26
12.22
10.40
10.37
1. Excluding treasury shares. For further information on the development in treasury shares, refer to note 4.3.
The trading unit of the Novo Nordisk B shares listed on NASDAQ Copenhagen was
changed from DKK 0.20 to DKK 0.10 as of 13 September 2023. The ADRs listed on
the New York Stock Exchange (NYSE) were similarly split as of 20 September 2023.
Comparative figures have been restated to reflect the change in trading unit from
DKK 0.20 to DKK 0.10.
The total dividend for 2023 amounts to DKK 41,987 million (DKK 9.40 per share). A
final dividend for 2023 of DKK 28,557 million (DKK 6.40 per share) is expected to be
distributed pending approval at the Annual General Meeting. The interim dividend of
DKK 13,430 million (DKK 3.00 per share) was declared and paid in August 2023. The
total dividend for 2022 was DKK 27,950 million (DKK 6.20 per share), of which the final
dividend of DKK 18,337 million (DKK 4.08 per share) was declared and paid in March
2023. No dividend is declared on treasury shares.
Novo Nordisk's dividend pay-outs are complemented by share repurchase programmes.
4.3 Share capital, Treasury shares and Other reserves
Development in number of shares
DKK million
A shares
B shares
ACCOUNTING POLICIES
Earnings per share is presented as both basic and diluted earnings per share. Basic
earnings per share is calculated as net profit divided by the monthly average number
of shares outstanding. Diluted earnings per share is calculated as net profit divided
by the sum of monthly average number of shares outstanding, including the dilutive
effect of the outstanding share pool. Refer to 'Financial definitions' for a description
of calculation of the dilutive effect.
Shares beginning of 2022
Shares cancelled in 2022
Outstanding shares end of 2022
Shares cancelled in 2023
Outstanding shares end of 2023
1,075
—
1,075
—
1,075
3,545
(60)
3,485
(50)
3,435
2023
2022
Number of
B shares of
DKK 0.10
(million)
Number of
B shares of
DKK 0.10
(million)
Market
value
(DKK million)
Holding at the beginning of the year
Cancellation of treasury shares
Released allocated shares to employees
Purchase during the year
Value adjustment
Holding at the end of the year
28,242
(23,450)
(4,433)
29,924
5,817
36,100
60.2
(50.0)
(9.5)
51.0
—
51.7
62.2
(60.0)
(3.7)
61.7
—
60.2
Total
4,620
(60)
4,560
(50)
4,510
At the end of 2023, the holding of treasury shares amounted to 1.1% of the total
outstanding shares (1.3% of the outstanding shares in 2022). Treasury shares are
primarily acquired to reduce the company's share capital. In addition, a limited part
is used to finance Novo Nordisk's long-term share-based incentive programme and
restricted stock units to employees. Treasury shares are deducted from the share
capital on cancellation at their nominal value of DKK 0.10 per share. Differences
between this amount and the amount paid to acquire or received for disposing of
treasury shares are deducted directly in retained earnings.
The purchase of treasury shares during the year relates to the remaining part of the
2022 share repurchase programme, totalling DKK 1.5 billion and the DKK 30 billion
Novo Nordisk B share repurchase programme for 2023, of which DKK 1.6 billion was
outstanding at year-end. The programme ended on 29 January 2024.
The trading unit of the Novo Nordisk B shares listed on NASDAQ Copenhagen and
the ADRs listed on the New York Stock Exchange (NYSE) was split in 2023. Comparative
figures have been restated to reflect the split.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
69
Specification of Other reserves
4.4 Financial risks
Key currencies
DKK million
2021
Exchange
rate
adjustments
Cash flow
hedges1
Tax and
other
items
Total
Type
Reserve at the beginning
of the year
(2,528)
1,802
Other comprehensive income, net
1,624
(3,557)
Transferred to intangible assets
—
15
Reserve at the end of the year
(904)
(1,740)
2022
Other comprehensive income, net
Reserve at the end of the year
2,289
1,385
2023
Other comprehensive income, net
(1,404)
Reserve at the end of the year
(19)
1. For information on derivatives refer to note 4.5.
2,766
1,026
586
1,612
(185)
1,117
(2)
930
(892)
38
(355)
(317)
(911)
(816)
13
(1,714)
4,163
2,449
(1,173)
1,276
According to Danish corporate law, reserves available for distribution as dividends are
based on the financial statements of the parent company, Novo Nordisk A/S. Dividends
are declared and paid from distributable reserves. As of 31 December 2023,
distributable reserves total DKK 78,779 million (DKK 63,136 million in 2022),
corresponding to the parent company's retained earnings and Reserve for cash flow
hedges and exchange rate adjustments.
Management has assessed the following key financial risks:
Foreign exchange risk
Credit risk
Interest rate risk
Liquidity risk
Financial risk
High
Low
Low
Low
Novo Nordisk has centralised management of the Group's financial risks. The overall
objectives and policies for the company's financial risk management are outlined in
the internal Treasury Policy, which is approved by the Board of Directors. The Treasury
Policy consists of the Foreign Exchange Policy, the Investment Policy, the Financing
Policy and the Policy regarding Credit Risk on Financial Counterparts, and includes a
description of permitted use of financial instruments and risk limits.
Novo Nordisk only hedges commercial exposures and consequently does not enter
into derivative transactions for trading or speculative purposes. Novo Nordisk uses a
fully integrated treasury management system to manage all financial positions, and
all positions are marked-to-market.
Foreign exchange risk
Foreign exchange risk is the most important financial risk for Novo Nordisk and
can have a significant impact on the income statement, statement of comprehensive
income, balance sheet and cash flow statement. The majority of Novo Nordisk's sales
are in USD, EUR, CNY, CAD, JPY and GBP. The foreign exchange risk is most significant
in USD, CNY and CAD, while the EUR exchange rate risk is regarded as low because of
Denmark's fixed exchange rate policy towards EUR. The overall objective of foreign
exchange risk management is to reduce the short-term negative impact of exchange
rate fluctuations on earnings and cash flow, thereby contributing to the predictability
of the financial results. Novo Nordisk hedges existing assets and liabilities in key
currencies as well as future expected cash flows up to a maximum of 24 months forward.
Hedge accounting is applied to match the impact of the hedged item and the hedging
instrument in the consolidated income statement. The currency hedging strategy
balances risk reduction and cost of hedging by use of foreign exchange forwards
and foreign exchange options matching the due dates of the hedged items. Expected
cash flows are continually assessed using historical inflows, budgets and monthly
sales forecasts.
Hedge effectiveness is assessed on a regular basis. Management has chosen to
classify the result of hedging activities as part of financial items.
USD
CNY
CAD
JPY
GBP
Average exchange rate applied (DKK per 100)
2023
2022
2021
689
708
629
97
105
97
Year-end exchange rate applied (DKK per 100)
2023
2022
2021
674
697
657
95
101
103
511
543
502
509
515
517
4.91
5.40
5.73
4.77
5.29
5.70
857
873
865
858
838
885
Foreign exchange rate sensitivity analysis
At year-end, an immediate 5% decrease in the disclosed currencies versus DKK and
EUR is estimated by Management to have the following impact on Novo Nordisk's
operating profit for the next 12 months.
Sensitivity on operating profit of an immediate 5% decrease in key currencies1
DKK million
2024
2023
USD
(5,700)
(3,180)
CNY
(500)
(500)
CAD
(530)
(320)
JPY
(210)
(240)
GBP
(150)
(160)
1. An immediate 5% increase would have the opposite impact of the above.
As per the end of 2023, a positive market value of financial contracts related to
hedging of foreign exchange risk of DKK 1,612 million had been deferred for
recognition in 2024 (in 2022 a positive market value of DKK 1,026 million was deferred
for recognition in 2023).
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
70
Sensitivity of an immediate 5% decrease in currency rates on
31 December versus DKK2
Credit exposure for cash at bank, marketable securities and
derivative financial instruments (fair value)
DKK million
Sensitivity of all currencies
Income statement
Other comprehensive income
Total
Hereof sensitivity of USD
Income statement
Other comprehensive income
Total
2023
2022
(117)
6,058
5,941
70
5,082
5,152
(37)
3,431
3,394
150
2,923
3,073
DKK million
2023
AAA range
AA range
A range
BBB range
Not rated or below BBB
range
2. An immediate 5% increase would have the opposite impact of the above.
The foreign exchange sensitivity analysis comprises effects from the Group's cash,
trade receivables and trade payables, current loans, current and non-current financial
investments, lease liabilities and foreign exchange forwards. Anticipated currency
transactions, investments in foreign subsidiaries and non-current assets are not included.
Financial contracts coverage at year end
Months
2023
2022
USD
CNY3
CAD
12
12
12
0
9
9
JPY
12
12
GBP
0
11
3. Chinese yuan traded offshore (CNH) is used to hedge Novo Nordisk's CNY currency exposure.
Total
2022
AAA range
AA range
A range
BBB range
Not rated or below BBB
range
Cash at
bank
Marketable
securities
Derivative
financial
instruments
—
15,838
6,451
7,292
17
632
—
—
—
—
—
912
1,432
—
—
Total
15,838
7,363
8,724
17
632
14,392
15,838
2,344
32,574
6
10,797
5,507
6,550
124
466
—
124
—
—
—
963
1,764
—
—
10,803
6,470
8,438
124
466
Credit risk exposure to non-financial counterparties
Outside the US, Novo Nordisk has no significant concentration of credit risk related
to trade receivables or other receivables and prepayments, because the exposure in
general is spread over a large number of counterparties and customers. In the US, the
three major wholesalers account for a large proportion of total net sales, see note 2.1.
However, US wholesaler credit ratings are monitored, and part of the trade receivables
are sold on full non-recourse terms; see below for details.
Novo Nordisk closely monitors the current economic conditions of countries impacted
by currency fluctuations, high inflation and an unstable political climate. These
indicators, as well as payment history are taken into account in the valuation of trade
receivables. The country risk ratings in 2023 have overall remained unchanged from
2022 to 2023.
Trade receivable programmes
At year-end, the Group had derecognised receivables without recourse having due
dates after 31 December 2023 amounting to:
DKK million
US
Japan
2023
5,059
2,050
2022
1,394
2,273
2021
1,313
2,453
Novo Nordisk's subsidiaries in the US and Japan employ trade receivable programmes in
which trade receivables are sold on full non-recourse terms to optimise working capital.
Total
12,653
10,921
2,727
26,301
Refer to note 3.4 for the split of allowance for trade receivables by geographical segment.
The table above shows financial contracts existing at year-end to cover the expected
future cash flow for the disclosed number of months. During 2023, the hedging horizon
varied between 9 and 12 months for USD, CAD and JPY. The hedge horizon for CNY has
been increased from 0 to 12 months, while GBP has been phased out. Average hedge
rate for USD cash flow hedges is 676 at the end of 2023 (696 at the end of 2022).
Credit risk exposure to financial counterparties
Novo Nordisk considers its maximum credit exposure to financial counterparties to be
DKK 32,574 million (DKK 26,301 million in 2022). In addition, Novo Nordisk considers its
maximum credit exposure to trade receivables, other receivables (less prepayments and
VAT receivables) and other financial assets to be DKK 67,209 million (DKK 52,714 million
in 2022). Refer to note 4.9 for details of the Group's total financial assets.
Interest rate risk
Novo Nordisk’s exposure to interest rate risk is considered to be low due to the
capital structure. Non-current debt consists of fixed rate instruments. Interest rate
risk on marketable securities of DKK 15,838 million is considered low due to a low
portfolio duration.
Credit risk
Credit risk arises from the possibility that transactional counterparties may default
on their obligations, causing financial losses for the Group.
To manage credit risk regarding financial counterparties, Novo Nordisk only enters into
derivative financial contracts and money market deposits with financial counterparties
possessing a satisfactory long-term credit rating from at least two of the three selected
rating agencies: Standard and Poor's, Moody's and Fitch. Furthermore, maximum credit
lines defined for each counterparty diversify the overall counterparty risk. The credit risk
on marketable securities is low, as investments are made in highly liquid bonds with
predominantly AAA credit ratings.
Liquidity risk
The liquidity risk is considered to be low. Novo Nordisk ensures the availability of
the required liquidity through a combination of cash management, highly liquid
investment portfolios and both uncommitted and committed credit facilities.
Novo Nordisk uses cash pools for optimisation and centralisation of cash management.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
71
Financial reserves
DKK million
Cash and cash equivalents
(note 4.7)
Marketable securities
Undrawn committed credit facility4
Borrowings (Note 4.6)
Financial reserves
2023
2022
2021
14,392
15,838
11,552
(5,431)
36,351
12,653
10,921
11,527
10,719
6,765
11,526
(480)
(12,861)
34,621
16,149
4. The undrawn committed credit facility comprises a facility EUR 1,550 million in 2023 and EUR 1,550 million in
2022 committed by a portfolio of international banks. The facility matures in 2025.
Financial reserves comprise the sum of cash and cash equivalents at the end of the
year, marketable securities with original term to maturity exceeding three months and
undrawn committed credit and loan facilities, with a maturity of more than 12 months,
less Eurobonds and bank overdrafts contractually obliged for repayment within 12
months of the balance sheet date.
4.5 Derivative financial instruments
DKK million
Forward contracts USD1
Forward contracts CNH, CAD and JPY2
Forward contracts, cash flow hedges
Forward contracts USD1
Forward contracts EUR, CNH, CAD and others2
Forward contracts, fair value hedges
Total derivative financial instruments
Recognised in the income statement
Recognised in other comprehensive income
2023
2022
Contract
amount
at year-end
Positive
fair value
at year-end
Negative
fair value
at year-end
Contract
amount
at year-end
Positive
fair value
at year-end
Negative
fair value
at year-end
104,022
20,246
124,268
65,870
28,520
94,390
1,600
295
1,895
330
119
449
193
90
283
946
43
989
59,292
10,677
69,969
38,432
4,111
42,543
218,658
2,344
1,272
112,512
449
1,895
989
283
1,591
373
1,964
639
124
763
2,727
763
1,964
907
31
938
1,942
23
1,965
2,903
1,965
938
1. Average hedge rate for USD cash flow hedges is 676 at the end of 2023 (696 at the end of 2022) and average hedge rate for USD fair value hedges is 675 at the end of 2023 (714 at the end of 2022). 2. For 2022 the relevant
currencies are CAD, JPY and GBP.
The fair value of cash flow hedges at year-end 2023, a gain of DKK 1,612 million,
has been recognised in other comprehensive income.
The financial contracts are expected to impact the income statement within the next
12 months, with deferred gains and losses on cash flow hedges then being transferred
to financial income or financial expenses. There is no expected ineffectiveness at
31 December 2023, primarily because hedging instruments match currencies of
hedged cash flows.
Use of derivative financial instruments
The derivative financial instruments are used to manage the exposure to foreign
exchange risk. None of the derivatives are held for trading. Novo Nordisk uses
forward exchange contracts to hedge forecast transactions, assets and liabilities.
Net investments in foreign subsidiaries are currently not hedged.
ACCOUNTING POLICIES
On initiation of the contract, Novo Nordisk designates each derivative financial
contract that qualifies for hedge accounting as one of:
• hedges of the fair value of a recognised asset or liability (fair value hedge)
• hedges of the fair value of a forecast financial transaction (cash flow hedge).
All contracts are initially recognised at fair value and subsequently remeasured
at fair value at the end of the reporting period.
Fair value hedges
Value adjustments of fair value hedges are recognised in the income statement along
with any value adjustments of the hedged asset or liability that are attributable to the
hedged risk.
Cash flow hedges
Value adjustments of the effective part of cash flow hedges are recognised in other
comprehensive income. The cumulative value adjustment of these contracts is
transferred from other comprehensive income to the income statement when the
hedged transaction is recognised in the income statement. For cash flow hedges of
foreign currency risk on highly probable non-financial asset purchases, the cumulative
value adjustments are transferred directly from the cash flow hedge reserve to the
initial cost of the asset when recognised.
Discontinuance of cash flow hedging
When a hedging instrument expires or is sold, or when a hedge no longer meets the
criteria for hedge accounting, any cumulative gain or loss existing in equity at that time
remains in equity and is recognised when the forecasted transaction is ultimately
recognised in the income statement. When a forecasted transaction is no longer
expected to occur, the cumulative gain or loss that was reported in equity is immediately
transferred to the income statement under financial income or financial expenses.
For additional disclosures on accounting policies for financial instruments refer to note 4.9.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
72
4.6 Borrowings
Reconciliation of liabilities arising from financing activities
Non-cash movements
DKK million
2023
Lease liabilities
Issued Eurobonds
Bank overdrafts
Total borrowings
2022
Lease liabilities
Issued Eurobonds
Loans
Bank overdrafts
Total borrowings
1. 2022 figures include additions from acquisition of business.
Beginning
of the year
Re-
payments
Proceeds
Additions1
Disposals
Exchange
rates
Other
End of the
year
4,529
(1,448)
20,775
480
—
(19)
25,784
(1,467)
—
—
—
—
—
2,809
—
—
2,809
1,358
—
—
—
4,129
9,654
(998)
—
11,120
12,503
(12,623)
359
(3)
—
95
26,645
(13,624)
11,215
1,358
(4)
—
—
(4)
(1)
—
—
—
(1)
(170)
46
(4)
(128)
43
(2)
120
27
188
10
3
(1)
12
(2)
3
—
2
3
5,726
20,824
456
27,006
4,529
20,775
—
480
25,784
Issuance of Eurobonds
Interest
0.000% Fixed
0.750% Fixed
1.125% Fixed
0.125% Fixed
1.375% Fixed
Maturity
Jun 2024
Mar 2025
Sep 2027
Jun 2028
Mar 2030
Nominal value in millions
EUR
650
500
500
650
500
DKK
4,844
3,726
3,726
4,844
3,726
Eurobonds
In 2022, three tranches of Eurobonds with an aggregate principal amount of
EUR 1.5 billion corresponding to DKK 11.1 billion were launched under the programme.
Net proceeds of the issuances were used for general corporate purposes, including
refinancing of the bridge loan facility established in connection with Novo Nordisk’s
acquisition of Dicerna Pharmaceuticals, Inc. No bonds have been issued in 2023. The
total fair value of issued Eurobonds amounts to DKK 19.7 billion (DKK 18.7 billion in 2022).
ACCOUNTING POLICIES
The lease liabilities are related to IFRS 16 leases, primarily for premises and company
cars and include the present value of future lease payments during the lease term. Lease
liabilities are initially measured at the present value of the lease payments outstanding
at the commencement date, discounted using the incremental borrowing rate. The lease
liability is measured using the effective interest method. The lease liability is subsequently
remeasured to reflect changes in future lease payments, e.g. changes in lease terms.
Issued bonds, loans and bank overdrafts are initially recognised at the fair value of the
proceeds received less transaction costs. In subsequent periods these are measured at
amortised cost using the effective interest method. The difference between the proceeds
received and the nominal value is recognised in financial income or financial expenses
over the term of the loan. Where substantially all the risks and rewards of ownership are
retained in financial assets that have been transferred, the assets are not derecognised
and the proceeds obtained are recognised as a financial liability. For fair value
determination refer to note 4.9.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
73
Contractual undiscounted cash flows
2023
4.7 Cash and cash equivalents
4.8 Cash flow statement specifications
Leases
Issued
Eurobonds
Bank
overdrafts
Total
DKK million
Cash at bank
Borrowings (note 4.6)
2023
14,392
—
—
(1)
2022
2021
Other non-cash items
12,653
10,720
DKK million
2023
2022
2021
DKK million
2023
Within 1 year
1-3 years
3-5 years
More than 5 years
Total
Carrying amount end
of the year
Non-current liabilities
Current liabilities
2022
Within 1 year
1-3 years
3-5 years
More than 5 years
Total
Carrying amount end
of the year
Non-current liabilities
Current liabilities
1,318
1,902
1,253
1,612
6,085
5,726
4,552
1,174
1,088
1,566
923
1,416
4,993
4,529
3,543
986
4,975
3,948
8,695
3,819
456
—
—
—
6,749
5,850
9,948
5,431
21,437
456
27,978
20,824
15,976
4,848
127
8,811
3,905
8,672
21,515
20,775
20,775
—
456
—
456
480
—
—
—
480
480
—
480
27,006
20,528
6,478
1,695
10,377
4,828
10,088
26,988
25,784
24,318
1,466
Cash and cash equivalents
14,392
12,653
10,719
Cash and cash equivalents at 31 December 2023 includes DKK 857 million that is
restricted (DKK 458 million in 2022). The restricted cash balance relates to subsidiaries
in which availability of currency for remittance of funds is temporarily scarce.
ACCOUNTING POLICIES
Cash and cash equivalents consist of cash offset by short-term bank overdrafts. Where
short-term bank overdrafts are consistently overdrawn, they are excluded from cash
and cash equivalents. The movement in such facilities is presented under financing
activities in the cash flow statement.
Interest income and interest expenses, net
(note 4.10)
Capital gain/(loss) on investments, net
(note 4.10)
Result of associated companies (note 4.10)
Other non-current receivables and
prepayments
Other non-current liabilities
Share-based payment costs (note 5.1)
Increase/(decrease) in provisions (note 3.5)
and retirement benefit obligations
Other
(527)
106
(81)
(1,224)
89
2,149
139
124
189
61
(260)
1,539
58
(340)
24
407
—
1,040
32,243
19,080
16,581
(373)
1,438
(4,354)
Total other non-cash items
32,382
22,310
13,416
Change in working capital
DKK million
Inventories
2023
2022
2021
(7,423)
(4,767)
(1,085)
Trade receivables
(14,210)
(9,917)
(12,909)
Other receivables and prepayments
Trade payables
Other liabilities
Adjustment for payables related to non-
current assets
Adjustment related to acquisition of
businesses
Change in working capital including
exchange rate adjustments
(2,063)
10,019
5,099
(968)
6,717
4,006
(876)
3,153
2,595
(2,432)
(1,567)
(15)
—
(143)
(1,409)
(11,010)
(6,639)
(10,546)
Exchange rate adjustments
(1,235)
1,303
1,483
Cash flow change in working capital
(12,245)
(5,336)
(9,063)
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
74
4.9 Financial assets and liabilities
Fair value measurement hierarchy
DKK million
Financial assets by category
Other financial assets
Marketable securities
Financial assets at fair value through
the income statement
Derivative financial instruments (note 4.5)
Derivatives used as hedging instruments (assets)
Other financial assets
Trade receivables
Other receivables and prepayments
(current and non-current)
• less prepayments and VAT receivables
Cash at bank (note 4.7)
Financial assets at amortised cost
Trade receivables in a factoring portfolio
Financial assets at fair value through other
comprehensive income
Total financial assets at the end
of the year by category
Financial liabilities by category
Derivative financial instruments (note 4.5)
Derivatives used as hedging instruments (liability)
Borrowings (non-current) (note 4.6)1
Borrowings (current) (note 4.6)1
Trade payables
Other liabilities (non-current)
Other liabilities (current)
• less VAT and duties payable
Financial liabilities measured at
amortised cost
Total financial liabilities at the end
of the year by category
1. Refer to note 4.6 for a maturity analysis for non-current and current borrowings.
2023
2022
DKK million
Active market data (level 1)
571
15,838
559
10,921
Directly or indirectly observable market data (level 2)
Not based on observable market data (level 3)
Total financial assets at fair value
16,409
11,480
Active market data (level 1)
2,344
2,344
682
2,727
2,727
457
31,729
16,593
Directly or indirectly observable market data (level 2)
Not based on observable market data (level 3)
Total financial liabilities at fair value
2023
16,052
2,344
33,398
51,794
—
1,272
—
1,272
2022
11,288
2,727
34,159
48,174
—
2,903
—
2,903
9,498
(8,312)
14,392
47,989
33,041
6,211
(5,073)
12,653
30,841
33,967
Financial assets and liabilities measured at fair value can be categorised using the fair
value measurement hierarchy above. There were no transfers between the 'Active
market data' and 'Directly or indirectly observable market data' categories during 2023
or 2022. The fair value of issued Eurobonds, which is disclosed in note 4.6, are based
on 'Active market data'. There are no significant intangible assets or items of property,
plant and equipment measured at fair value. For a description of the credit quality of
financial assets such as trade receivables, cash at bank, current debt and derivative
financial instruments, refer to notes 4.4 and 4.5.
33,041
33,967
99,783
79,015
ACCOUNTING POLICIES
Depending on purpose, Novo Nordisk classifies financial instruments into the
following categories:
1,272
1,272
20,528
6,478
25,606
189
28,705
(600)
2,903
2,903
24,318
1,466
15,587
100
23,606
(875)
80,906
64,202
82,178
67,105
• Financial assets at fair value through the income statement
• Derivatives used as hedging instruments
• Financial assets at amortised cost
• Financial assets at fair value through other comprehensive income
• Financial liabilities at amortised cost
Recognition and measurement
Financial assets measured at fair value through the income statement consist of other
financial assets, which comprise of equity investments, and marketable securities.
These financial instruments are initially recognised at fair value. Net gains and losses
arising from changes in the fair value of equity instruments and marketable securities
are recognised in the income statement as financial income or expenses.
For a description of accounting policies on derivative financial instruments designated
to hedge accounting, refer to note 4.5.
Financial assets at amortised cost are cash at bank and non-derivative financial assets
solely with payments of principal and interest. Novo Nordisk normally 'holds-to-collect'
the financial assets to attain the contractual cash flows. If collection is expected within
one year (or in the normal operating cycle of the business, if longer), they are classified
as current assets. If not, they are presented as non-current assets. These are initially
measured at fair value less transaction costs, except for trade receivables that are initially
measured at the transaction price. Subsequently, they are measured at amortised cost
using the effective interest method less impairment. For a description of accounting
policies on trade receivables, refer to note 3.4.
Financial assets at fair value through other comprehensive income are trade
receivables that are held to collect or to sell in factoring agreements.
Financial liabilities at amortised cost consist of borrowings (loans, issued Eurobonds,
bank overdrafts and lease liabilities), trade payables and other liabilities (primarily
employee cost payables, payables related to assets under construction, sales rebates
and deferred income). These are initially recognised at the fair value less transaction
costs. Subsequently, they are measured at amortised cost using the effective interest
method. For initial recognition of lease liabilities refer to note 4.6.
Fair value measurement
If an active market exists, the fair value of a financial instrument is based on the
most recently observed market price at the end of the reporting period. If a financial
instrument is quoted in a market that is not active, Novo Nordisk bases its valuation
on the most recent transaction price. Adjustment is made for subsequent changes
in market conditions, for instance by including transactions in similar financial
instruments assumed to be motivated by normal business considerations. The
fair values of quoted investments are based on current bid prices at the end of
the reporting period.
Financial assets for which no active market exists are carried at fair value based on a
valuation methodology. The fair value of such financial instruments are determined
on the basis of quoted market prices of financial instruments traded in active markets.
The fair value of standard and simple financial instruments, such as foreign exchange
forward contracts, interest rate swaps, currency swaps and unlisted bonds, is
measured according to generally accepted valuation techniques. Market-based
input is used to measure the fair value.
The fair value of trade receivables in a factoring portfolio is calculated based on the
net invoice amount (invoice amount less charge-backs) less the fee payable to the
factoring entity. The factoring fee is insignificant due to the short period between the
time of sale to the factoring entity and the invoice due date and the rate applicable.
Inputs into the estimate of US wholesaler charge-backs are described in note 2.1.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
75
4.10 Financial income and expenses
Financial impact from forward contracts, specified
DKK million
Financial income
Interest income1
Foreign exchange gain (net)
Financial gain from forward
contracts (net)
Capital gain on investments
Capital gain on marketable securities
Result of associated companies
Total financial income
Financial expenses
2023
2022
2021
DKK million
2023
2022
2021
1,069
308
1,344
—
143
81
239
—
—
—
—
—
231
—
2,316
340
—
—
2,945
239
2,887
Income/(loss) transferred from other
comprehensive income
Realised fair value adjustment of
transferred contracts
Unrealised fair value adjustments of
forward contracts2
Realised foreign exchange gain/(loss) on
forward contracts
Financial income/(expense) from
forward contracts
1,026
(1,740)
1,802
214
(3,772)
(1,411)
(540)
(1,202)
1,246
644
4,948
679
1,344
(1,766)
2,316
Interest expenses on debts and borrowings
542
Foreign exchange loss (net)
Financial loss from forward
contracts (net)
Capital loss on investments
Capital loss on marketable securities
Result of associated companies
Other financial expenses
Total financial expenses
—
—
106
—
—
197
845
378
2,885
1,766
124
463
189
181
5,986
289
1,972
—
—
44
24
122
2,451
2. Refer to note 4.5 for information on open fair value hedge contracts at 31 December.
ACCOUNTING POLICIES
As described in note 4.4, Management has chosen to classify the result of hedging
activities as part of financial items in the income statement, except for foreign
currency-risk cash flow hedges on highly probable non-financial asset purchases
where the cumulative value adjustments are transferred directly from the cash flow
hedge reserve to the initial cost of the asset when recognised.
Financial items primarily relate to foreign exchange elements and are mainly impacted
by the cumulative value adjustment of cash flow hedges transferred from other
comprehensive income to the income statement when the hedged transaction is
recognised in the income statement.
1. Interest income include DKK 370 million from marketable securities at fair value through the income
statement (2022: DKK 78 million; 2021: DKK 30 million) while the remaining interest income is derived from
financial assets at amortised cost.
In addition, value adjustments of fair value hedges are recognised in financial income
and financial expenses along with any value adjustments of the hedged asset or
liability that are attributable to the hedged risk.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
76
Section 5
Other disclosures
5.1 Share-based payment schemes
Share-based payment expensed in the income statement
DKK million
Restricted stock units to employees
Long-term share-based incentive programme
(Management Board)1
Long-term share-based incentive programme
(Management group below Management Board)
Restricted stock units to individual employees
Share-based payment expensed in the income
statement
2023
365
2022
265
2021
189
304
250
234
1,271
209
819
205
598
19
2,149
1,539
1,040
1. In 2021, Novo Nordisk introduced a new share-based compensation programme with terms, which amortises
the grant date valuation over three years (the 2020 programme was amortised over four years). The 2023
expense includes amortisation of the 2020, 2021, 2022 and 2023 programmes.
Restricted stock units to employees
In connection with Novo Nordisk's 100 year anniversary and in appreciation of the
efforts of employees during recent years, as of 1 February 2023, all eligible employees
in the company were offered 74 restricted stock units. Each restricted stock unit gives
the holder the right to receive one Novo Nordisk B share free of charge in August
2026, subject to continued employment. The cost of the DKK 1,331 million programme
is amortised over the vesting period.
Long-term share-based incentive programme
Management Board
During 2023, Management Board participated in four long-term incentive
programmes (LTIP) which commenced in 2020, 2021, 2022 and 2023 respectively.
The LTIPs commenced in 2021, 2022 and 2023 have a three-year performance period,
subject to continued employment, and a subsequent two-year holding period. Targets are
set at the beginning of the performance period and include determination of threshold,
on-target level of performance and level of performance to achieve maximum allocation
of shares. The maximum share allocation at grant cannot exceed 26 months’ base salary
for the CEO, 19.5 months’ base salary for executive vice presidents and up to 15.6 months’
base salary for senior vice presidents. Hence the LTIP is capped at a number of shares at
the time of grant. Financial targets are set by the Board for a three-year period, and are
linked to three-year average growth in sales and operating profit, while every year the
Board has set the non-financial targets for a one-year period. All targets are aligned
to Novo Nordisk’s Strategic Aspirations 2025: Purpose and sustainability, Innovation and
therapeutic focus, Commercial execution and Financials. Target achievement is assessed
by the Board.
The grant date of the 2023-programme was February 2023, and the share price used
for the determining the grant date fair value of the award (DKK 456) was the average
share price for Novo Nordisk B shares on Nasdaq Copenhagen in the period 2-16
February 2023, adjusted for the expected dividend. Based on the split of participants
at the grant date, 46% of the allocated shares is be allocated to members of Executive
Management and 54% to other members of the Management Board.
The LTIP which commenced in 2020 is likewise subject to a three-year performance
period in which the number of allocated shares may increase or decrease in line with
performance, which is linked to financial targets, including sales growth and economic
value creation, and non-financial targets, including achievement of clinical trial
milestones and market authorisation for specific products. The maximum share
allocation is capped in a similar way as the LTIPs described above.
All restricted stock units and shares allocated to Management are settled by transfers
of treasury shares at the time of vesting.
Management group below the Management Board
The Management group below the Management Board has a share-based incentive
programme with similar performance criteria as Management Board. Financial targets
are set by the Board for a three-year period, while the non-financial targets have been
set by the Board each year.
On 31 December 2023, a total of 18.9 million shares (21.4 million in 2022 and
19.8 million in 2021) were outstanding including all ongoing programmes.
ACCOUNTING POLICIES
Novo Nordisk operates equity-settled, share-based compensation plans.
The fair value of the employee services received in exchange for the grant
of shares is recognised as an expense and allocated over the vesting period.
The total amount to be expensed over the performance and vesting period is
determined by reference to the fair value of the shares granted, excluding the
impact of any non-market vesting conditions. The fair value is fixed at the grant
date, and adjusted for expected dividends during the vesting period. Non-market
vesting conditions are included in assumptions about the number of shares that
are expected to vest. At the end of each reporting period, Novo Nordisk revises its
estimates of the number of shares expected to vest. Novo Nordisk recognises the
impact of the revision of the original estimates, if any, in the income statement and
in a corresponding adjustment to equity (change in proceeds) over the remaining
vesting period. Adjustments relating to previous years are included in the income
statement in the year of adjustment.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
77
General terms and conditions of 2020-2023 programmes1
Employees'
100 year
anniversary
programme
Management Board
Management group below Management Board
Individual employees
Preliminary number of shares to be allocated2 (million)
Fair value per restricted stock unit at grant date (DKK)
2023
3.0
446
2023
0.6
456
2022
0.7
320
2021
1.0
212
2020
0.9
206
2023
3.1
456
2022
3.3
320
2021
3.0
212
2020
2.4
206
2023
0.3
544
2022
0.8
371
2021
0.3
269
Performance and vesting period
2023 to 2026
2023 to 2025
2022 to 2024 2021 to 2023 2020 to 2023
2023 to 2025
2022 to 2024 2021 to 2023 2020 to 2023
2023 to 2026
2022 to 2025 2021 to 2024
Allocation date
Amortisation period
Aug 2026
Feb 2026
Feb 2025
Feb 2024
Feb 2024
Feb 2026
Feb 2025
Feb 2024
Feb 2024
2026
2025
2024
3.5 years
3 years
3 years
3 years
4 years
3 years
3 years
3 years
4 years
3 years
3 years
3 years
1. As of 13 September 2023, the trading unit of the Novo Nordisk B shares listed on NASDAQ Copenhagen and ADRs listed on the New York Stock Exchange (NYSE) was changed from DKK 0.20 to DKK 0.10. Comparative figures have been restated to reflect the change in trading unit from DKK 0.20 to DKK 0.10. 2. The number of shares to be allocated
under the LTIPs to Management Board and management group below Management Board, respectively, may potentially be reduced or increased depending on whether Novo Nordisk’s performance during the three-year performance period is higher or lower compared to targets determined by the Board. The maximum number is capped.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
78
5.2 Commitments
Contractual obligations not recognised in the balance sheet
DKK million (undiscounted)
2023
Leases1
Current
Non-
current
Total
144
2,053
2,197
Research and development obligations
8,678
13,235
21,913
Contractual obligations
Research and development obligations include contingent payments related to
achieving development milestones. Such amounts entail uncertainties in relation
to the period in which payments are due because a proportion of the obligations
are dependent on milestone achievements. Exercise fees and subsequent milestone
payments under in-licensing option agreements are excluded, as Novo Nordisk is
not contractually obligated to make such payments. Commercial product launch
milestones include contingent payments solely related to achievement of a commer-
cial product launch following regulatory approval. The increase in research and
development obligation is driven by the general increase in business activities.
Research and development – potential
milestone payments2
Commercial product launch – potential
milestone payments2
Purchase obligations relating to investments
in property, plant and equipment
Purchase obligations relating to contract
manufacturers
Other purchase obligations
Total obligations not recognised in the
balance sheet
2022
Leases1
Research and development obligations
Research and development – potential
milestone payments2
Commercial product launch – potential
milestone payments2
Purchase obligations relating to investments
in property, plant and equipment
Purchase obligations relating to contract
manufacturers
Other purchase obligations
Total obligations not recognised in the
balance sheet
1,234
27,311
28,545
—
12,952
12,952
Commercial milestones, royalties and other payments based on a percentage of sales
generated from sale of goods following marketing approval are excluded from the
contractual commitments analysis because of their contingent nature, related to
future sales.
The purchase obligations related to investments in property, plant and equipment
primarily relates to production capacity expansion projects. Novo Nordisk expects
to fund these commitments with existing cash and cash flow from operations.
Other purchase commitments mainly consist of commitments related to promotional
and media activities, professional and consulting activities and strategic sourcing
contracts.
The contractual obligations not recognised in the balance sheet represent contractual
payments and are not discounted and are not risk-adjusted.
Other guarantees
Other guarantees amount to DKK 1,878 million (DKK 1,222 million in 2022). Other
guarantees primarily relate to performance guarantees issued by Novo Nordisk.
4,222
1,693
5,915
6,315
26,792
7,151
5,888
33,107
13,039
27,744
89,924
117,668
205
5,988
1,641
7,582
1,846
13,570
376
5,011
5,387
—
7,598
7,598
1,696
1,427
3,123
3,537
15,225
9,825
4,541
13,362
19,766
27,027
37,625
64,652
1. Predominantly relates to estimated variable property taxes, leases committed but not yet commenced and
low value leases. 2. Potential milestone payments are associated with uncertainty because they are linked to
successful achievements in research activities.
5.3 Acquisition of businesses
Fair value recognised at date of acquisition
DKK million
Intellectual property rights
Other intangible assets
Financial assets
Marketable securities
Cash
Deferred tax assets (liabilities), net
Other net assets
Net identifiable assets acquired
Goodwill
Consideration transferred
Cash acquired
Cash used for acquisition of businesses
2022
Forma Therapeutics
5,766
492
77
1,470
1,027
(709)
(21)
8,102
—
8,102
(1,027)
7,075
Business combinations in 2023
No transactions completed during 2023 were classified as acquisitions of businesses.
Business combinations in 2022
On 14 October 2022, Novo Nordisk acquired all outstanding shares of the publicly held
US company Forma Therapeutics Holdings, Inc. at a price of USD 20 per share via a
cash tender offer, equal to a total purchase price of DKK 8,102 million. At end of 2022,
the initial accounting for goodwill, intellectual property rights, other intangible assets
and deferred tax assets and liabilities remained provisional. The valuation of these
were finalised in 2023 with the result that net deferred tax liabilities were reduced
retrospectively by DKK 524 million to a total of DKK 709 million. The reduction was
offset by a corresponding amount to goodwill. The valuation of intellectual property
rights and other intangible assets remain unchanged.
Novo Nordisk Annual Report 2023 ACCOUNTING POLICIES
The acquisition method of accounting is used to account for all business combinations.
The purchase price for a business comprises the fair values of the assets transferred,
liabilities incurred to the former owners including warrant holders of the acquired
business and the fair value of any asset or liability resulting from a contingent
consideration arrangement. Any amount of the purchase price which effectively
comprises a settlement of a pre-existing relationship is not part of the exchange
for the acquiree and is therefore not included in the consideration for the purpose
of applying the acquisition method. Settlements of pre-existing relationships are
accounted for as separate transactions in accordance with the relevant IFRS standards.
Identifiable assets and liabilities and contingent liabilities assumed are measured
at fair value at the date of acquisition by applying relevant valuation methods.
Acquisition-related costs are expensed as incurred. Goodwill is recognised at the
excess of purchase price over the fair value of net identifiable assets acquired and
liabilities assumed.
KEY ACCOUNTING ESTIMATES IN DETERMINING
THE FAIR VALUE OF INTANGIBLE ASSETS
The application of the acquisition method involves the use of significant estimates
because the identifiable net assets of the acquiree are recognised at their fair value
for which observable market prices are typically not available. This is particularly
relevant for intangible assets which require use of valuation techniques typically
based on estimates of present value of future uncertain cash flows. For the 2022
acquisition of Forma Therapeutics Holdings, Inc. valuations of intellectual property
rights were based on estimated and risk adjusted net present value of future cash flows.
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
79
5.4 Related party transactions
5.5 Fees to statutory auditors
Material transactions with related parties
DKK million
Novo Holdings A/S
Purchase of Novo Nordisk B shares
Dividend payment to Novo Holdings A/S
8,775
9,028
6,984
7,207
6,695
6,144
Audit-related services
Tax advisory services
2023
2022
2021
DKK million
2023
2022
Statutory audit1
Other services
Total fees to statutory auditors
30
3
8
18
59
38
2
3
12
55
2021
26
3
4
4
37
1. 2022 statutory audit fee includes DKK 9 million of additional fee related to 2021.
Fees for services other than statutory audit of the financial statements amount to
DKK 29 million (DKK 17 million in 2022 and DKK 11 million in 2021).
In 2023, Deloitte Statsautoriseret Revisionspartnerselskab provided other services
than statutory audit in the amount of DKK 18 million (DKK 12 million in 2022 and
DKK 6 million in 2021) which relate to tax due diligence and transfer pricing,
management consulting for strategic projects, leadership training, review of ESG
data and other assurance assessments and opinions.
NNIT Group
Services provided by NNIT
Dividend payment from NNIT
Altasciences Group
Services provided by Novo Nordisk
Services provided by Altasciences
Novozymes Group
Services provided by Novo Nordisk
Services provided by Novozymes
436
—
—
229
(48)
112
660
—
—
70
(78)
92
593
(4)
—
11
(116)
78
Novo Nordisk A/S is controlled by Novo Holdings A/S (incorporated in Denmark), which
owns 28.1% of the share capital in Novo Nordisk A/S, representing 77.1% of the total
number of votes. The remaining shares are widely held. The ultimate parent of the
Group is the Novo Nordisk Foundation (incorporated in Denmark). Both entities are
considered related parties.
As associated companies of Novo Nordisk A/S, NNIT Group and Churchill Stateside
Solar Fund XIV, LLC ('CS Solar Fund XIV') are considered related parties. As associated
companies of Novo Holdings A/S, Unchained Labs, Inc. and Altasciences Company Inc.
are considered related parties to Novo Nordisk A/S. As Novo Holdings is a controlling
shareholder, the Novozymes Group, Sonion Group and Xellia Pharmaceuticals are also
considered to be related parties, as well as the Board of Directors and Executive
Management of Novo Nordisk A/S.
In 2023, Novo Nordisk A/S acquired 14,025 B shares, worth DKK 8.8 billion, from
Novo Holdings A/S as part of the DKK 30.0 billion share repurchase programme. The
transaction price for each transaction was calculated as the average market price in
the open window period following the announcements of the financial results for the
first and third quarters in 2023.
There were no transactions with the Board of Directors or Executive Management
besides remuneration.
There were no material unsettled balances with related parties at the end of the year.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
80
5.6 General accounting policies
Principles of consolidation
The consolidated financial statements incorporate the financial statements of the
parent company Novo Nordisk A/S and entities controlled by Novo Nordisk A/S.
Control exists when Novo Nordisk has effective power over the entity and has the
right to variable returns from the entity. The results of subsidiaries acquired or
disposed of during the year are included in the consolidated income statement
from the effective date of acquisition and up to the effective date of disposal.
Functional and presentation currency
Items included in the financial statements of Novo Nordisk's entities are measured using
the currency of the primary economic environment in which the entity operates (functional
currency). The consolidated financial statements are presented in Danish kroner (DKK),
which is also the functional and presentation currency of the parent company.
Translation of transactions and balances
Foreign currency transactions are translated into the functional currency using
the prevailing exchange rates at the transaction dates. Foreign exchange gains and
losses resulting from the settlement of such transactions and from the translation
at year-end exchange rates of monetary assets and liabilities are recognised in the
income statement. Foreign currency differences arising from the translation of
effective qualifying cash flow hedges are recognised in other comprehensive income.
Translation of Group companies
Financial statements of foreign subsidiaries are translated into DKK at the exchange
rates prevailing at the end of the reporting period for balance sheet items, and at
average exchange rates for income statement items. All effects of exchange rate
adjustments are recognised in other comprehensive income.
Cash flow statement
The Cash flow statement is presented in accordance with the indirect method
commencing with net profit for the year.
Novo Nordisk Annual Report 2023 5.7 Companies in the Novo Nordisk Group
Activity:
• Sales and marketing
• Research and development
• Production
• Services/investments
Percentage of shares owned
Activity
Novo Nordisk Limited, Ireland
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
81
Company and country
Percentage of shares owned
Activity
Company and country
Percentage of shares owned
Activity
Novo Nordisk Estonia OÜ, Estonia
Novo Nordisk Farma OY, Finland
Biocorp Production S.A., France
Activity
Novo Nordisk, France
• • • •
Novo Nordisk Production SAS, France
Novo Nordisk Pharma GmbH, Germany
Novo Nordisk Hellas Epe., Greece
Novo Nordisk Hungária Kft., Hungary
•
•
•
•
•
•
•
100
100 •
100
100 •
100
100 •
100 •
100
100
100
100
100
100
100
100
100
100 •
100
100
100
•
•
•
•
•
•
•
•
•
100 • •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100 • •
100 •
100 •
Novo Nordisk Ltd, Israel
Novo Nordisk S.P.A., Italy
Novo Nordisk Kazakhstan LLP, Kazakhstan
Novo Nordisk Kenya Ltd., Kenya
Novo Nordisk Latvia SIA, Latvia
Novo Nordisk Pharma SARL, Lebanon
UAB Novo Nordisk Pharma, Lithuania
Novo Nordisk Farma dooel, North Macedonia
Novo Nordisk Pharma SAS, Morocco
Novo Nordisk B.V., Netherlands
Novo Nordisk Finance (Netherlands) B.V., Netherlands
Novo Nordisk Pharma Limited, Nigeria
Novo Nordisk Norway AS, Norway
Novo Nordisk Pharmaceutical Services Sp. z.o.o., Poland
Novo Nordisk Pharma Sp.z.o.o., Poland
Novo Nordisk Portugal, Lda., Portugal
Novo Nordisk Farma S.R.L., Romania
Novo Nordisk Limited Liability Company, Russia
Novo Nordisk Production Support LLC, Russia
Novo Nordisk Saudi for Trading, Saudi Arabia
Novo Nordisk Pharma d.o.o. Belgrade (Serbia), Serbia
Novo Nordisk Slovakia s.r.o., Slovakia
Novo Nordisk, d.o.o., Slovenia
Novo Nordisk (Pty) Limited, South Africa
Novo Nordisk Pharma S.A., Spain
Novo Nordisk Scandinavia AB, Sweden
Novo Nordisk Health Care AG, Switzerland
Novo Nordisk Pharma AG, Switzerland
Novo Nordisk Tunisie SARL, Tunisia
Novo Nordisk Saglik Ürünleri Tic. Ltd. Sti., Turkey
Novo Nordisk Ukraine, LLC, Ukraine
Novo Nordisk Pharma Gulf FZE, United Arab Emirates
Novo Nordisk Holding Limited, UK
Novo Nordisk Limited, UK
Novo Nordisk Research Centre Oxford Limited, UK
• •
•
100 •
100 •
100
100 •
100
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100
100 •
100 •
100 •
100 •
100 •
100 •
100 • •
100
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100
100 •
100
Region China
Novo Nordisk (China) Pharmaceuticals Co. Ltd., China
Novo Nordisk (Shanghai) Pharma Trading Co., Ltd., China
Novo Nordisk Region China A/S, Denmark
Novo Nordisk Hong Kong Limited, Hong Kong
Novo Nordisk Pharma (Taiwan) Ltd., Taiwan
Beijing Novo Nordisk Pharmaceuticals Science & Technology Co., Ltd., China
Region Rest of World
Novo Nordisk Pharma Argentina S.A., Argentina
Novo Nordisk Pharmaceuticals Pty. Ltd., Australia
Novo Nordisk Pharma (Private) Limited, Bangladesh
Novo Nordisk Produção Farmacêutica do Brasil Ltda., Brazil
Novo Nordisk Farmacêutica do Brasil Ltda., Brazil
Novo Nordisk Farmacéutica Limitada, Chile
Novo Nordisk Colombia SAS, Colombia
Novo Nordisk India Private Limited, India
Novo Nordisk Service Centre (India) Pvt. Ltd., India
PT. Novo Nordisk Indonesia, Indonesia
Novo Nordisk Pars, Iran
Novo Nordisk Pharma Ltd., Japan
Novo Nordisk Pharma (Malaysia) Sdn Bhd, Malaysia
Novo Nordisk Pharma Operations Sdn Bhd, Malaysia
Novo Nordisk Mexico S.A. de C.V., Mexico
Novo Nordisk Pharmaceuticals Ltd., New Zealand
Novo Nordisk Pharma (Private) Limited, Pakistan
Novo Nordisk Panama S.A., Panama
Novo Nordisk Peru S.A.C., Peru
Novo Nordisk Pharmaceuticals (Philippines) Inc., Philippines
Novo Nordisk Pharma (Singapore) Pte Ltd., Singapore
Novo Nordisk India Holding Pte Ltd., Singapore
Novo Nordisk Pharma Korea Ltd., South Korea
Novo Nordisk Lanka (PVT) Ltd, Sri Lanka
Novo Nordisk Pharma (Thailand) Ltd., Thailand
Novo Nordisk Vietnam Ltd., Vietnam
•
•
•
•
•
•
100 • •
100 •
100
100 •
100 •
100
•
100 •
100 •
100 •
100
100 •
100 •
100 •
100 •
100
100 •
100 • •
100 • •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100 •
100
100 •
100 •
100 •
100 •
• •
Other subsidiaries and associated companies
Company and country
Percentage of shares owned
Activity
NNE A/S, Denmark
NNIT A/S, Denmark
CS Solar Fund XIV, LLC, US
100
18
99
•
•
•
•
•
Companies without significant activities are not included in the list.
NNE A/S subsidiaries are not included in the list.
Company and country
Parent company
Novo Nordisk A/S, Denmark
Subsidiaries by geographical area
Company and country
North America Operations
Inversago Pharma Inc., Canada
Novo Nordisk Canada Inc., Canada
Novo Nordisk North America Operations A/S, Denmark
Novo Nordisk Inc., US
Novo Nordisk Pharmaceutical Industries LP, US
Novo Nordisk Pharmatech US, Inc., US
Novo Nordisk Pharma, Inc., US
Novo Nordisk Research Center Indianapolis, Inc., US
Novo Nordisk Research Center Seattle, Inc., US
Novo Nordisk US Bio Production, Inc., US
Novo Nordisk US Commercial Holdings, Inc., US
Novo Nordisk US Holdings Inc., US
Dicerna Pharmaceuticals, Inc., US
Emisphere Technologies, Inc., US
Forma Therapeutics, Inc., US
Region International Operations
Novo Nordisk Pharmaceuticals A/S, Denmark
Novo Nordisk Pharma Operations A/S, Denmark
Novo Nordisk Region AAMEO and LATAM A/S, Denmark
Novo Nordisk Region Europe A/S, Denmark
Novo Nordisk Region Japan & Korea A/S, Denmark
Region EMEA
Aldaph SpA, Algeria
Novo Nordisk Pharma GmbH, Austria
S.A. Novo Nordisk Pharma N.V., Belgium
Novo Nordisk Pharma d.o.o., Bosnia and Herzegovina
Novo Nordisk Pharma EAD, Bulgaria
Novo Nordisk Hrvatska d.o.o., Croatia
Novo Nordisk s.r.o., Czech Republic
Novo Nordisk Denmark A/S, Denmark
Novo Nordisk Pharmatech A/S, Denmark
Novo Nordisk Egypt LLC, Egypt
Novo Nordisk Egypt Pharmaceuticals Ltd., Egypt
Novo Nordisk Annual Report 2023 82
Financial definitions
(part of the Management review – not audited)
Financial ratios have been calculated in accordance with the guidelines from the
Danish Society of Financial Analysts, and supplemented by certain key ratios for
Novo Nordisk. Financial ratios are described below and in the section 'Non-IFRS
financial measures'.
ADR
An American Depository Receipt (or ADR) represents ownership of the shares
of a non-US company and trades in US financial markets.
Operating margin
Operating profit as a percentage of net sales.
Purchase of intangible assets
Cash flow statement amount for the purchase of intangible assets.
Purchase of property, plant and equipment
Cash flow statement amount for the purchase of property, plant and equipment.
Basic earnings per share (EPS)
Net profit divided by the average number of shares outstanding.
The definition of capital expenditure was redefined in 2019. Capital expenditure is now
defined as purchase of property, plant and equipment from the cash flow statement.
Shares
The share capital of Novo Nordisk comprise of A-shares and B-shares, with B-shares
listed on Nasdaq Copenhagen in trading units of nominal value DKK 0.10 and ADRs,
that equals B-shares of nominal value DKK 0.10, being listed on New York Stock
Exchange (NYSE). Key ratios per share, including number of outstanding shares,
are aligned with trading units of nominal value DKK 0.10.
Working capital
Working capital measures the liquid assets Novo Nordisk has available for operations.
Diluted earnings per share
Net profit divided by average number of shares outstanding, including the dilutive
effect of the outstanding restricted stock units.
Dividend payout ratio
Total dividends for the year as a percentage of net profit. Total dividends for the
year comprise of interim dividend paid during the year and proposed ordinary
dividend for the year.
EBITDA
EBITDA is defined as ’net profit’, adjusted for 'income taxes', 'financial items',
'depreciation and amortisation' and 'impairment losses'.
Effective tax rate
Income taxes as a percentage of profit before income taxes.
Gross margin
Gross profit as a percentage of net sales.
Net profit margin
Net profit as a percentage of net sales.
Number of shares outstanding
The total number of shares, excluding the holding of treasury shares.
Part of the Management review – not auditedNovo Nordisk Annual Report 2023 83
Non-IFRS financial measures
(part of the Management review – not audited)
In the Annual Report, Novo Nordisk discloses certain financial measures of the
Group’s financial performance, financial position and cash flows that reflect
adjustments to the most directly comparable measures calculated and presented
in accordance with IFRS. These non-IFRS financial measures may not be defined
and calculated by other companies in the same manner, and may therefore not
be comparable.
Net sales in constant exchange rates
DKK million
Net sales IFRS
2023
2022
2021
232,261
176,954
140,800
Effect of exchange rate
7,658
(13,024)
3,643
Net sales in constant exchange rates
239,919
163,930
144,443
The non-IFRS financial measures presented in the Annual Report are:
Net sales previous year
176,954
140,800
126,946
• Net sales and operating profit in constant exchange rates (CER)
•
'Net profit’, adjusted for 'income taxes', 'financial items', 'depreciation and
amortisation' and 'impairment losses' (EBITDA)
% increase/(decrease) in reported currencies
31.3%
25.7%
10.9%
% increase/(decrease) in constant
exchange rates
35.6%
16.4%
13.8%
Earnings before interest, taxes, depreciation, amortisation
and impairment losses (EBITDA)
EBITDA is defined as ’net profit’, before 'income taxes', 'financial items', 'depreciation
and amortisation' and 'impairment losses'.
Management believes EBITDA is a useful measure as it helps analyse operating results
from core business operations without including the effects of capital structure, tax
rates, depreciation, amortisation and impairment losses.
The following table shows a reconciliation of EBITDA with operating profit, the most
directly comparable IFRS financial measures:
• Return on invested capital (ROIC)
• Free cash flow
• Cash to earnings
IFRS refers to an IFRS financial measure.
Sales and operating profit growth in constant exchange rates
'Growth in constant exchange rates' means that the effect of changes in exchange
rates is excluded. It is defined as sales/operating profit for the period measured at
the average exchange rates for the same period of the prior year, compared with net
sales/operating profit for the same period of the prior year. Price adjustments within
hyperinflation countries as defined in IAS 29 'Financial reporting in hyperinflation
economies' are excluded from the calculation to avoid growth in constant exchange
rates being artificially inflated. Growth in constant exchange rates is considered to be
relevant information for investors in order to understand the underlying development
in sales and operating profit by adjusting for the impact of currency fluctuations.
Operating profit in constant exchange rates
EBITDA
DKK million
Operating profit IFRS
Effect of exchange rate
2023
102,574
4,898
Operating profit in constant exchange rates
107,472
Operating profit previous year
% increase/(decrease) in reported currencies
74,809
37.1%
2022
74,809
(7,578)
67,231
58,644
27.6%
2021
DKK million
58,644
Net profit IFRS
2,332
Income taxes IFRS
60,976
Financial income IFRS
54,126
Financial expenses IFRS
2023
83,683
20,991
(2,945)
845
2022
55,525
13,537
(239)
5,986
2021
47,757
11,323
(2,887)
2,451
8.3%
Operating profit (EBIT) IFRS
102,574
74,809
58,644
% increase/(decrease) in constant
exchange rates
43.7%
14.6%
12.7%
Depreciation and amortisations
Impairment losses
EBITDA
7,289
2,124
6,553
809
5,311
714
111,987
82,171
64,669
Part of the Management review – not auditedNovo Nordisk Annual Report 2023 ROIC denominator
DKK million
Intangible assets
Property, plant and equipment
Deferred income tax assets
Other receivables and prepayments (non-
current)
Inventories
Trade receivables
Tax receivables
Other receivables and prepayments
(current)
Deferred income tax liabilities
Retirement benefit obligations
Other liabilities (non-current)
Provisions (non-current)
Trade payables
Tax payables
2023
60,406
90,961
20,380
1,430
31,811
64,770
2,423
8,068
(10,162)
(742)
(189)
2022
50,939
66,671
13,904
206
24,388
50,560
940
6,005
(7,061)
(762)
(100)
(6,649)
(4,590)
(25,606)
(15,587)
(7,116)
(7,091)
84
Reconciliation of net operating assets to equity: IFRS
2021
DKK million
43,171
Equity IFRS
2023
2022
2021
106,561
83,486
70,746
55,362
Investment in associated companies
8,672
Other financial assets
Marketable securities
(410)
(1,253)
(327)
(1,016)
(15,838)
(10,921)
Derivative financial instruments
(2,344)
(2,727)
(525)
(916)
(6,765)
(1,690)
Cash at bank
(14,392)
(12,653)
(10,720)
Borrowings – non-current
20,528
24,318
Borrowings – current
Derivative financial instruments
6,478
1,272
1,466
2,903
12,961
13,684
2,184
Net operating assets
100,602
84,529
78,959
267
19,621
40,643
1,119
5,037
(5,271)
(1,280)
(360)
(4,374)
(8,870)
(3,658)
Other liabilities (current)
(28,705)
(23,606)
(19,600)
Provisions (current)
Net operating assets
Average net operating assets
(100,478)
(70,287)
(51,520)
100,602
92,566
84,529
81,744
78,959
68,634
Return on invested capital (ROIC)
ROIC is defined as 'operating profit after tax' (using the effective tax rate) as a percentage
of average inventories, receivables, property, plant and equipment, intangible assets and
deferred tax assets, less non-interest-bearing liabilities including provisions and deferred
tax liabilities (where the average is the sum of the above assets and liabilities at the
beginning of the year and at year-end divided by two).
Management believes ROIC is a useful measure in providing investors and Manage-
ment with information regarding the Group's performance. The calculation of this
financial target is a widely accepted measure of earnings efficiency in relation to total
capital employed.
The following tables show the reconciliation of ROIC with operating profit/equity in %,
the most directly comparable IFRS financial measure:
Operating profit/equity in %
DKK million
Operating profit IFRS
/ Equity IFRS
Operating profit/equity in %
ROIC
DKK million
Operating profit after tax
/ Average net operating assets
ROIC in %
2023
102,574
106,561
96.3%
2023
81,957
92,566
88.5%
2022
74,809
83,486
89.6%
2022
60,146
81,744
73.6%
2021
58,644
70,746
82.9%
2021
47,384
68,634
69.0%
ROIC numerator
Reconciliation of operating profit to operating profit after tax
DKK million
2023
2022
2021
Operating profit IFRS
102,574
74,809
58,644
Tax on operating profit (using effective
tax rate)
(20,617)
(14,663)
(11,260)
Operating profit after tax
81,957
60,146
47,384
Part of the Management review – not auditedNovo Nordisk Annual Report 2023 Free cash flow
Free cash flow is a measure of the amount of cash generated in the period which is
available for the Board to allocate between Novo Nordisk's capital providers, through
measures such as dividends, share repurchases and repayment of debt (excluding
lease liability repayments) or for retaining within the business to fund future growth.
The following table shows a reconciliation of free cash flow with net cash generated
from operating activities, the most directly comparable IFRS financial measure:
Cash to earnings
Cash to earnings is defined as ‘free cash flow as a percentage of net profit’.
Management believes that cash to earnings is an important performance metric
because it measures the Group’s ability to turn earnings into cash. Since Management
wants this measure to capture the ability of the Group’s operations to generate cash,
free cash flow is used as the numerator instead of net cash flow.
The following table shows the reconciliation of cash to earnings to cash flow from
operating activities/net profit in %, the most directly comparable IFRS financial measure:
85
Free cash flow
DKK million
2023
2022
2021
Cash flow from operating activities/net profit in %
Net cash generated from operating
activities IFRS
108,908
78,887
55,000
DKK million
Net cash used in investing activities IFRS
(43,892)
(24,918)
(31,605)
Net purchase of marketable securities IFRS
4,758
2,921
5,937
Addition on marketable securities through
acquisition of business IFRS
Repayment on lease liabilities IFRS
Free cash flow
—
(1,448)
68,326
Net cash generated from operating
activities IFRS
/ Net profit IFRS
Cash flow from operating
activities/net profit in %
1,470
(998)
861
(874)
57,362
29,319
Cash to earnings
DKK million
Free cash flow
/ Net profit IFRS
Cash to earnings
2023
2022
2021
108,908
83,683
78,887
55,525
55,000
47,757
130.1%
142.1%
115.2%
2023
68,326
83,683
81.6%
2022
57,362
55,525
103.3%
2021
29,319
47,757
61.4%
Part of the Management review – not auditedNovo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
86
Statement of ESG performance
for the year ended 31 December
Note
2023
2022
2021
Note
2023
2022
2021
Environmental performance
Energy consumption for operations (1,000 GJ)
Share of renewable power for production sites
Scope 1 emissions (1,000 tonnes CO2e)1
Scope 2 emissions (1,000 tonnes CO2e)1
Scope 3 emissions (1,000 tonnes CO2e)1,2
Water consumption for production sites (1,000 m3)
Waste from production sites (tonnes)
Breaches of environmental regulatory limit values3
Social performance
Patients
Patients reached with Novo Nordisk's Diabetes and Obesity care products (in millions)4
• Hereof reached via the Novo Nordisk Access to Insulin Commitment (in millions)
3,784
100%
78
15
3,738
4,150
3,677
100%
76
16
2,418
3,918
Social performance (continued)
3,387
Societies
100%
Change in average net price across US product portfolio (% change to previous year)
77
16
Change in average net price across US insulin portfolio (% change to previous year)
Total tax contribution (DKK million)
N/A
Donations and other contributions (DKK million)
3,488
Governance performance
189,091
213,505
180,806
Business ethics reviews
12
8
8
Employees trained in business ethics
Number of substantiated cases reported via the Compliance Hotline
Convictions for violation of anti-corruption and anti-bribery laws
41.6
2.4
36.9
1.8
34.9
1.7
Supplier audits
Product recalls
7.1
7.1
7.2
7.2
7.2
7.3
7.4
7.5
8.1
8.1
Children reached through the Changing Diabetes® in Children programme
(cumulative)
8.1
52,249
41,033
31,846
People and employees
Year-end employees (total)
Employee turnover
Gender in leadership positions (ratio men:women)
Gender in senior leadership positions (ratio men:women)
Gender in the Board of Directors (ratio men:women)
Sustainable employer score
Frequency of occupational accidents (number per million working hours)
8.2
8.2
8.3
8.3
8.3
8.4
8.5
64,319
55,185
48,478
5.5%
54:46
59:41
50:50
86%
1.5
8.2%
56:44
61:39
54:46
85%
1.5
11.0%
57:43
64:36
67:33
84%
1.3
Failed inspections
Facilitations of the Novo Nordisk Way
Company reputation (scale 0-100)
Animals purchased for research
8.6
8.6
8.7
8.8
9.1
9.1
9.2
9.2
9.3
9.4
9.5
9.6
9.7
9.8
(8.2%)
(10.5%)
(12.3%)
(24.4%)
(19.5%)
(10.9%)
51,247
36,003
32,593
138
126
92
40
99%
314
—
382
2
—
42
35
99%
288
—
294
3
—
36
37
98%
236
—
253
1
—
34
82.1
82.3
82.6
56,508
79,750
47,879
1. 2023 is the first year of reporting all emission categories in CO2e. Comparative figures for scope 1, 2 and part of scope 3 emissions are measured in CO2. Refer to section
7.2 for further details. 2. 2022 was the first year of full scope 3 emissions' disclosure, which in 2021 and previously was limited to business flights and product distribution.
3. The methodology for counting number of breaches has changed in 2023. Comparative figures are adjusted accordingly. 4. 2023 is the first year of reporting Obesity as
part of number of patients reached. Comparative figures are adjusted accordingly.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
87
Notes to the consolidated ESG statement
Section 6
Basis of preparation
General reporting standards and principles
Novo Nordisk's annual reporting complies with the Danish Financial Statements Act.
Sections 99a, 99b, 99d and 107d specify the requirements to report on the management
of risks related to the environment, climate, human rights, labour and social conditions,
anti-corruption, gender distribution and data ethics. These requirements are addressed in
the Management review.
As recommended by the Taskforce on Climate-related Financial Disclosures (TCFD), Novo
Nordisk is working to integrate two climate change scenarios into the risk management
process, to identify short-, medium- and long-term risks within the production and
supply chain:
Impact
Understanding, measuring and communicating the positive and negative impacts on
society and the planet of Novo Nordisk's activities is important and remains a priority
for Novo Nordisk.
Materiality
The 2023 consolidated ESG statement includes KPIs as guided by Novo Nordisk's ESG
strategy and ongoing external stakeholder engagement. When assessing whether a KPI
is material to the consolidated ESG statement, Management considers whether the matter
is of such relevance and importance that it could substantially influence the assessment of
Novo Nordisk's ESG performance by the users of the Annual Report 2023.
•
Limiting temperature increase to well below 2ºC scenario, preferably 1.5ºC, compared
to pre-industrial times in accordance with the Paris Agreement.
• A temperature increase of 4ºC scenario as an alternative high-emission scenario.
The provisional Double Materiality Assessment described on page 12, performed at the
end of 2023, will inform our ESG reporting in 2024 in accordance with the Corporate
Sustainability Reporting Directive (CSRD) and will be updated regularly.
Scope 1, 2 and 3 emissions have been prepared in accordance with the Greenhouse Gas
(GHG) Protocol. Novo Nordisk also discloses in accordance with the recommendations put
forward by the Carbon Disclosure Project (CDP). For a full breakdown of climate and water
impacts, please refer to the publicly available report on Novo Nordisk's CDP disclosures at:
www.cdp.net.
Principles of consolidation
The disclosures of energy consumption and CO2e emissions cover production sites,
laboratories and offices. The disclosures of water consumption, environmental breaches
and waste cover production sites. Novo Nordisk Engineering A/S is not included in our
environmental reporting.
Inclusivity
As a pharmaceutical business with global reach, Novo Nordisk is committed to being
accountable to those stakeholders who are impacted by the organisation. From the
perspective of social responsibility, the key stakeholder groups are patients who rely on
Novo Nordisk's products, employees at Novo Nordisk and throughout the Group's value
chain, business partners and local communities. Novo Nordisk maps its stakeholders and
has processes in place to ensure inclusion of stakeholder concerns and expectations.
Responsiveness
The Annual Report reflects how Novo Nordisk manages operations in ways that consider
and respond to stakeholder concerns and interests. The report reaches out to a wide
range of stakeholders but is primarily prepared with investors in mind. For most Novo
Nordisk stakeholders, the Annual Report is just one element of interaction and
communication with the Company.
The social and governance-related disclosures cover the Novo Nordisk Group, comprising
Novo Nordisk A/S and entities controlled by Novo Nordisk A/S. Novo Nordisk Engineering
A/S is not included in our reporting for Sustainable employer score, employees trained in
business ethics, failed inspections and facilitations of the Novo Nordisk Way. Novo Nordisk
Pharmatech A/S is not included in our reporting on employees trained in business ethics
and facilitations of the Novo Nordisk Way.
Changes in accounting policies and disclosures
The accounting policies set out in the notes have been applied consistently in the
preparation of the consolidated ESG statement for all the years presented, unless
stated otherwise.
The following changes to accounting policies and new KPIs have been considered in
the 2023 consolidated ESG statement:
Environmental performance
In 2022, scope 1 emissions, scope 2 emissions and scope 3 emissions from business
travel were calculated as CO2. To further align with the GHG Protocol, in 2023 these
KPIs are calculated as CO2e. The remaining scope 3 emissions have been calculated as
CO2e in 2022 and 2023. CO2e includes CO2 and all other greenhouse gases; for more
information, please refer to section 7.2. Additionally, scope 1 emissions have been
expanded to also include refrigerants. Further scope changes may occur in the future
as more data becomes available.
In 2023, the methodology for counting the number of breaches of regulatory limit
values was changed. Breaches related to the same continued exceedance at the same
site are counted as one breach for the year. Comparative figures for 2021 and 2022
have been adjusted accordingly. Please refer to section 7.5.
Social performance
The KPI on patients reached has been expanded to include patients reached with
Novo Nordisk's Obesity care products. Comparative figures for 2021 and 2022 have
been adjusted accordingly; please refer to section 8.1. New breakdowns including
comparative figures for 2021 and 2022 have been included on employees by gender
and by age group. Please refer to section 8.2.
Governance performance
New KPIs including comparative figures for 2021 and 2022 have been included on
number of substantiated cases reported via the Compliance Hotline and convictions
for violation of anti-corruption and anti-bribery laws. Please refer to section 9.2.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
88
Section 7
Environmental performance
7.1 Energy consumption for operations and
share of renewable power for production sites
Energy consumption for operations
1,000 GJ
Production
Office buildings and laboratories
Total energy consumption
2023
3,214
570
3,784
2022
3,091
586
3,677
2021
2,859
528
3,387
In 2023, Novo Nordisk continued working with energy-saving, optimisation and
stabilisation projects. This included utilising more renewable natural gas and steam,
reducing propane, diesel and heavy fuel usage, and implementing new dehumidification
systems. Energy-saving projects implemented in 2023 within production sites resulted in
annual energy savings of 64 thousand GJ. These efforts could not fully mitigate the
increased production volumes, ramp-up activities and impact from adverse local weather
conditions, and consequently energy consumption for production increased by 4%.
Energy consumption in office buildings and laboratories decreased by 3% due to reduced
use of facilities and implementation of energy-saving measures.
Since 2020, Novo Nordisk has transitioned to sourcing 100% renewable power for
production through a mix of solutions, primarily Renewable Electricity Certificates
(REC), Power Purchase Agreements (PPA), Guarantees of Origin (GO) as well as on-
site renewable solutions.
ACCOUNTING POLICIES
Energy consumption for operations is measured as consumption of power, steam, heat
and fuel. Fuel is mainly natural gas, wood, diesel oil, gas oil and light fuel oil. Energy
consumption is based on metre readings and invoices. Energy consumption in office
buildings outside of Denmark is limited to the consumption of power.
The share of renewable power used at production sites is reported according to the
Greenhouse Gas (GHG) Protocol scope 2 Guideline. The market-based method is used
to account for renewable power at production sites through procurement of contractual
instruments such as Energy Attribute Certificates (EAC), PPAs and GOs from sources such
as wind, hydro, solar and biomass. Contractual instruments are procured based on the
total consumption of power in each country involved in production.
7.2 Scope 1, 2 and 3 emissions
1,000 tonnes CO2e
Scope 11
• Production
• Office buildings and laboratories
• Company cars
Scope 21
• Production
• Office buildings and laboratories
Scope 32
• Purchased goods and services3
• Capital goods3
• Fuel and energy related activities
• Upstream transportation and distribution
• Waste generated in operations
• Business travel1,3
• Employee commuting
• Downstream transportation and distribution
• End-of-life treatment of sold products
2023
2022
2021
78
31
1
46
15
12
3
3,738
2,067
1,315
56
113
6
83
43
52
3
76
25
3
48
16
11
5
2,418
1,473
614
55
123
5
73
35
37
3
77
29
2
46
16
10
6
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Total CO2e emissions
3,831
2,510
1. Categories measured in CO2 in comparison periods. 2. The calculation of scope 3 emissions is substantially
based on estimations and therefore inherently uncertain. 3. 2022 figures have been restated by adding 222, 137
and 18 thousand tonnes, respectively.
In 2023, Novo Nordisk experienced increased production volumes, ramp-up activities
and impact from adverse local weather conditions; however, due to energy-saving
projects and renewable power initiatives, scope 1 and 2 emissions remained broadly
unchanged from 2022. Scope 3 emissions increased by 55% due to substantial
investments in production capacity and increase in supply chain activities to support
company growth. The two categories Purchased goods and services and Capital goods
account for 90% of the scope 3 emissions, and they account for 98% of the overall
scope 3 emissions' increase.
ACCOUNTING POLICIES
Scope 1 emissions
Scope 1 emissions comprise direct CO2e emissions from sources that are owned or
controlled by the Novo Nordisk Group. CO2e emissions from production, office buildings
and laboratories include consumption of fuel oil, propane, wood and natural gas.
CO2e emissions from production sites additionally include emissions from leakage of
refrigerants from cooling systems. Production sites report on refrigerant quantities
when there is leakage of refrigerant over 1 kg. Associated CO2e emissions are
calculated based on refrigerant quantities and their respective Global Warming
Potential (GWP).
CO2e emissions from company cars cover cars leased or owned by Novo Nordisk.
Emissions are calculated by multiplying the CO2e emission factors from the
Environmental Protection Agency (EPA) by the volumes of diesel and petrol used.
Scope 2 emissions
Scope 2 emissions comprise CO2e emissions from purchased electricity, heat and
steam. Market-based emissions are calculated based on CO2e emission factors
from the previous year. For a full overview of location-based emissions, please visit:
www.cdp.net.
Scope 3 emissions
Novo Nordisk has identified 9 categories, out of the 15 categories of scope 3 emissions
defined by the GHG protocol, as relevant. The remaining 6 categories are not separately
reported on as they are either not applicable to Novo Nordisk or emissions have been
included in the other emission categories.
Purchased goods and services
Purchased goods and services include emissions related to all spend from external
suppliers, except for investment spend and travel categories, which are included
in other scope 3 categories. Purchased goods and services mainly comprise of raw
materials for products, marketing, packaging materials, as well as consumables for
laboratory and IT office equipment. Direct spend is converted into CO2e emissions
using the average data method. Material weights are matched with CO2e factors
depending on data availability. A spend-based factor is applied for direct spend data
where no weight can be obtained. Indirect spend is converted into CO2e using a
spend-based method.
Capital goods
Capital goods include emissions related to all indirect investment spend from external
suppliers, mainly production utilities and equipment. Indirect spend is converted into
CO2e emissions via the average spend-based method using emission factors.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
89
Fuel and energy related activities
Fuel and energy related activities include all upstream CO2e emissions of purchased
fuels and energy (beyond scope 1 and 2 emissions). Energy consumption is converted
from GJ to kWh and multiplied by DEFRA's country-specific emission factors to assess
CO2e tonnes. The category comprises upstream emissions from electricity, steam and
heat; upstream emissions from transportation and distribution of electricity, steam
and heat and emissions from upstream fuel.
Upstream transportation and distribution
CO2e emissions from upstream transportation and distribution are calculated by an
external supplier managing the transportation and distribution processes on behalf of
Novo Nordisk, and using the industry standard EcoTransit solution. CO2e emissions are
calculated based on the worldwide distribution of semi-finished and finished products,
raw materials and components by air, sea and road between production sites and
from production sites to subsidiaries, direct customers and importing distributors.
Waste generated in operations
Waste generated in own operations includes CO2e emissions associated with
third-party disposal and treatment of waste generated from production sites, offices
and laboratories. Currently, waste data is available for production sites and offices,
as well as laboratories within Denmark. Waste data is not available for offices and
laboratories outside of Denmark, for which CO2e emissions are therefore extrapolated
using the waste-type-specific method.
Business travel
Business travel includes CO2e emissions from business flights and other travel, such
as hotel stays and taxis. CO2e emissions from business flights are estimated based on
mileage and passenger class details obtained from travel agencies. These are
multiplied by CO2e emission factors for short-, medium- and long-haul flights. EPA
emission factors are used to perform the calculations. Currently, 90% of emissions
from flights are calculated based on data provided by travel agencies and the
remaining 10% are extrapolated based on travel spend. CO2e emissions from other
travel-related activities are calculated using a spend-based approach.
Employee commuting
Employee commuting includes CO2e emissions associated with commuting by all
employees except those with company cars, since these emissions are reported as
scope 1 emissions. CO2e emissions are estimated using the average data method and
based on assumptions for the top six countries (Denmark, USA, India, China, France
and Brazil) in terms of number of employees, which account for 85% of the employee
base. Average distance and mode of transportation are used to calculate the CO2e
emissions for the remaining 15% of employees.
Downstream transportation and distribution
Downstream transportation and distribution include CO2e emissions that occur from
transportation and distribution of sold products in vehicles and to facilities not owned
or controlled by Novo Nordisk. Only transportation emissions are included in the
calculations, specifically from the first receiving warehouse to pharmacies, hospitals
and wholesalers. A simulation-based approach is applied to calculate downstream
emissions, using a distance-based method by simulating route networks for four
countries (Denmark, UK, Switzerland and Brazil). Transportation work (tonne-km)
and CO2e emissions are estimated by calculating the distance travelled for the weight
of distributed products and cool boxes. Moreover, the modelled route networks
provide the basis for simulating US and China transportation and distribution.
Transportation work per net kg product from the six reference countries (Denmark,
UK, Switzerland, Brazil, China and US) is extrapolated to the remaining countries.
Emissions per country are calculated based on i) the weight of sold products,
ii) reference country transportation work and iii) the emission factor for the region
and mode of transportation.
End-of-life treatment of sold products
End-of-life treatment of sold products includes CO2e emissions from end-of-life
treatment of all products sold to the market, including packaging. The amount of sold
products is calculated from the realised sales data for specific devices and markets. It
is assumed that devices are discarded in the markets where they are sold and that the
end-of-life treatment follows the general treatment of the household waste for each
market. Scenarios have been developed for end-of-life treatment for various Novo
Nordisk products (FlexPen®, FlexTouch®, NovoFine® needle etc.). The scenarios cover
the US, EU and Japan. The remaining CO2e emissions from other products are
extrapolated by unit sales based on average end-of-life emissions from the products.
7.3 Water consumption for production sites
In 2023, production sites consumed 4,150 thousand cubic metres of water; an increase
of 6% compared to 2022 due to higher production volumes and ramp up activities for
capacity expansion at production sites. Other contributing factors were warmer
months in 2023, hence additional water was used for cooling purposes. Additionally,
a higher number of employees led to increased on-site activities and extra shifts.
Production sites in France, Brazil, China, US, Iran and Algeria are located in areas
of high water stress or with high seasonal variations (please refer to the CDP Water
Security 2023 Reporting Guidance). These sites consume 18% of the total water
for global production. Despite a significant increase in production volumes, water
consumption at these facilities was kept at a 2% increase as the implementation of
water conservation projects in water-stressed areas led to savings of 14 thousand
cubic metres of water.
ACCOUNTING POLICIES
Water consumption is measured in thousand cubic metres of water and is based on
metre readings and invoices. It includes drinking water, industrial water and steam
water used at production sites.
7.4 Waste from production sites
Tonnes
Organic residues
2023
2022
2021
128,116
166,183
143,254
Other (paper, cardboard, metals, etc.)
19,019
12,820
7,990
Total recycling
Ethanol waste
Other (various combustible waste)
Total waste with energy recovery
Water waste with no energy recovery
Other
Total waste with no energy recovery
Water waste with resource recovery
Other
Total waste with resource recovery
Total waste to landfill
Total waste
147,135
179,003
151,244
12,521
9,390
21,911
141
1,987
2,128
7,949
9,330
17,279
638
14,913
13,232
8,007
8,239
22,920
21,471
356
827
1,183
7,379
2,114
9,493
906
5,499
1,660
7,159
N/A
N/A
N/A
932
189,091
213,505
180,806
In 2023, waste from production sites decreased by 11% compared to 2022 due to
waste reduction initiatives, reuse of waste and implementation of zero landfill
waste strategies.
The amount of waste recycled decreased by 18%, primarily due to initiatives to avoid
waste and efforts to transition from recycling to resource recovery.
The amount of waste sent for energy recovery decreased by 4%, primarily due to
optimisation projects and changes in the composition of waste, which led to a decrease
in the amount of waste being sent to incineration. Less than 0.3% of the total waste was
sent to landfill. In 2023, 20% of the waste was categorised as hazardous waste.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
90
ACCOUNTING POLICIES
Waste is measured as the sum of all the waste disposed of at production sites based
on weight receipts. Organic residues for recycling are waste from the production of
the active pharmaceutical ingredients, where the energy is recovered in biogas plants
and the digested slurry is used on local farmland as fertiliser. Ethanol is recovered in
internal regeneration plants and re-used. Energy recovery is waste disposed of at
waste-to-energy plants and at a biogas plant. Waste with no energy recovery covers
water waste and other waste not suitable for other disposal methods, such as
hazardous waste for incineration and various other types of waste.
Section 8
Social performance
8.1 Patients reached with Novo Nordisk's
Diabetes and Obesity care products
7.5 Breaches of environmental regulatory limit values
Estimate in millions
2023
2022
2021
In 2023 there were 12 breaches compared to 8 in 2022. None of the breaches resulted
in any correlated material negative impact on the environment. For all breaches,
mitigation actions are in progress.
ACCOUNTING POLICIES
Breaches of regulatory limit values cover all breaches with limit values reported to the
environmental authorities. Breaches related to the same continued exceedance at the
same site count as one breach for the year.
Patients reached with Novo Nordisk's
Diabetes care products
Patients reached with Novo Nordisk's
Obesity care products
Total number of patients reached
40.5
1.1
41.6
36.3
34.6
0.6
36.9
0.3
34.9
ACCOUNTING POLICIES
The number of full-year patients reached with Novo Nordisk's Diabetes and Obesity care
products, excluding devices, is estimated by dividing Novo Nordisk's annual sales volume
by the annual usage dose per patient for each product class, as defined by the WHO (for
Diabetes) and in accordance with the dose strength of the product (for Obesity).
The number of full-year patients reached with human insulin vials via the Novo
Nordisk Access to Insulin Commitment is estimated by dividing Novo Nordisk's annual
sales volume by the annual usage dose per patient reached via the Novo Nordisk
Access to Insulin Commitment, as defined by the WHO. The WHO-defined daily dosage
for these products may not accurately reflect the recommended or prescribed daily
dose. Actual doses are based on individual characteristics (e.g. age and weight) and
pharmacokinetic considerations. Despite this uncertainty, Novo Nordisk assesses this
to be the most consistent way of reporting.
The number of children reached with Diabetes care treatment through the Changing
Diabetes® in Children programme is measured as the total accumulated number of
children enrolled since the initiation of the partnership in 2009.
The estimated number of full-year patients reached with Novo Nordisk's Diabetes care
products increased from 36.3 million in 2022 to 40.5 million in 2023. The 12% increase
was primarily driven by the GLP-1 franchise, followed by the new-generation insulin
franchise and the human insulin franchise. The increase in number of full-year patients
reached with Novo Nordisk's Obesity care products in 2023 was primarily driven by the
continued launch of Wegovy® in new markets.
8.2 Employees
Number of employees
Number
Year-end employees (total)
In 2023, the estimated number of full-year patients with diabetes reached with
Novo Nordisk's human insulin vials through the Access to Insulin Commitment was
2.4 million, compared to 1.8 million in 2022. The 33% growth through the Access to
Insulin Commitment was driven by increased sales through both government and
private market channels, sold at or below the USD 3 ceiling price. Novo Nordisk also
sold human insulin vials at or below the ceiling price of USD 3 in countries outside the
Commitment, reaching an estimated additional 2.6 million patients in 2023. This
represents a total of 5 million patients with diabetes reached with human insulin at
or below USD 3 per vial globally.
Through the Changing Diabetes® in Children (CDIC) partnership, 52,249 children and
youth were reached in total by the end of 2023, compared to 41,033 by the end of 2022.
Almost half of the new enrolled children were reached through expansion in Asian
countries, mainly India, Pakistan, Indonesia and Vietnam. The children receive access to
diabetes care in clinics (e.g. patient education), as well as medical supplies if needed.
Year-end number of full-time employees
Employees by geographical area
Number
International Operations
Denmark
EMEA (Europe, the Middle East and Africa),
excluding Denmark
China (Mainland China, Hong Kong, Taiwan)
Rest of World (all other countries)
North America Operations
Year-end employees (total)
2023
64,319
63,370
2023
56,004
28,692
8,808
6,485
12,019
8,315
64,319
2022
55,185
54,393
2022
47,935
22,916
7,954
6,148
10,917
7,250
2021
48,478
47,792
2021
42,372
19,150
7,530
5,833
9,859
6,106
55,185
48,478
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
91
Employees by gender
%
Male
Female
Other
Not reported
Employees by age group
%
Under 30 years old
30-50 years old
Over 50 years old
8.3 Gender diversity in leadership positions
8.4 Sustainable employer score
2023
51%
49%
0%
0%
2023
17%
64%
19%
2022
51%
49%
0%
0%
2022
15%
65%
20%
2021
51%
49%
0%
0%
2021
14%
66%
20%
Ratio men:women
CEO, EVP, SVP
CVP, VP
Director, manager, team leader
Gender in leadership positions (overall)
Gender in senior leadership positions
Gender in the Board of Directors
2023
64:36
59:41
54:46
54:46
59:41
50:50
2022
71:29
60:40
55:45
56:44
61:39
54:46
2021
72:28
63:37
57:43
57:43
64:36
67:33
The gender diversity in leadership positions overall at Novo Nordisk meets the Danish
gender diversity requirements. At the end of 2023, 46% of leadership positions were
filled by women, compared to 44% at the end of 2022. Within senior leadership, 41%
positions were filled by women at the end of 2023, compared to 39% at the end of 2022.
This year’s employee survey revealed an increase in the already high overall
engagement, bringing it to 86% favourable compared to 85% favourable in 2022.
Novo Nordisk continues to score in the top quartile when benchmarked against
external organisations when it comes to providing a purpose-driven workplace.
Improvements were seen on most questions, with a large improvement on
‘I understand how my performance is evaluated’, which was a focus area for
follow up on the 2022 survey results. Opportunities for further improvement
were seen in providing equal career opportunities for all and improving following
through on committed actions, based on survey results across the organisation.
ACCOUNTING POLICIES
The Sustainable employer score measures the average percentage of favourable
answers to the 18 engagement items in the survey. Favourable answers are
defined as ‘Agree’ and ‘Strongly agree’ to positively framed questions. The survey
is administered by an external vendor.
The number of employees increased in most areas with the highest growth in EMEA,
notably in Product Supply, Quality and IT. Currently, Novo Nordisk’s HR systems allow
employees to select the gender they most identify with. Moving forward, Novo Nordisk is
committed to increasing awareness of this self-identification option. The breakdown by
age group remained stable in the last three years.
All management teams, from entry level upwards, are encouraged to focus on enhanced
diversity, with the aim of ensuring a robust pipeline of talent for leadership positions. In
2021, Novo Nordisk introduced a global aspirational target of achieving a balanced gender
representation across all managerial levels with a minimum of 45% for both women and
men in senior leadership positions by the end of 2025.
The employee turnover rate decreased from 8.2% in 2022 to 5.5% in 2023, with decline
in almost all business areas.
ACCOUNTING POLICIES
The total number of employees is measured as headcount of all employees at
year-end, except externals, employees on unpaid leave, interns, Bachelor's and
Master's thesis employees and substitutes. All employee data is based on
registrations in Novo Nordisk's HR systems.
Employees are attributed to geographical regions according to their primary
workplace across the commercial units, research and development, production
and support functions. Employees in corporate functions are included in EMEA
and employees in Global Business Services in Bangalore, India, are included in
Rest of World.
The employee turnover rate is measured as the number of employees, excluding
temporary employees, who left the Group during the financial year, divided by the
average number of employees, excluding temporary employees. Employees working for
Group companies that have been disposed of are not counted as having left the Group.
ACCOUNTING POLICIES
Gender in leadership positions is reported as the percentage split by gender in
leadership and senior leadership positions. Senior leadership positions are defined
as employees in the global job levels chief executive officer (CEO), executive vice
president (EVP), senior vice president (SVP), corporate vice president (CVP) and vice
president (VP). Overall leadership positions are defined as directors, managers,
team leaders and senior leadership positions. Diversity on the Board of Directors is
reported as the percentage split by gender among all members, including employee-
elected members.
8.5 Health and safety
In 2023, Novo Nordisk had 153 accidents with reported absence compared to 128 in
2022, which is in line with the increase in number of employees. The average lost time
accident frequency was 1.5 in 2023, in line with 2022.
Novo Nordisk had one work-related fatality in 2023 compared to two in 2022, due to
a car accident. Novo Nordisk will continue to train and motivate employees on good
road safety behaviour to reduce the risk of recurrences.
In 2023, Novo Nordisk has harmonised incident reporting into one global reporting
system to ensure standardised reporting and systematic prevention, specifically with
focus on prevention of high-risk incidents.
We offer a healthy and engaging workplace, supported by a comprehensive health
and safety programme based on continuous improvements within safety, physical
health, mental well-being and employee health promotion. To this end, we have
implemented our Health & Safety management system across our entire global
organisation. Performance is overseen by Executive management and the Board of
Directors. In 2023, 13.8% of Novo Nordisk employees reported symptoms of stress, in
line with 2022, and 7.1% reported symptoms of work-related physical pain, compared
to 7.8% in 2022.
For a full overview of Novo Nordisk's Health and safety framework and for the CEO’s
statement on health and safety, please refer to: www.novonordisk.com/sustainable-
business/esg-portal/social.html.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
92
8.7 Total tax contribution
8.8 Donations and other contributions
ACCOUNTING POLICIES
The frequency of occupational accidents is measured as the internally reported
number of accidents with absence per million nominal working hours, also referred to
as Lost Time Injury Frequency (LTIF). Contractors, visitors, employees on unpaid leave,
interns and Bachelor's and Master's thesis students are not included. An occupational
accident with absence is any work-related accident causing at least one day of absence
in addition to the day of the accident.
DKK million
Corporate income taxes
paid
Taxes
borne
Taxes
collected
2023
2022
2021
25,897
6,080
31,977
19,097
18,390
Employment taxes
2,666
13,510
16,176
13,006
10,840
The percentages of employees reporting symptoms of stress and employees reporting
symptoms of work-related physical pain are monitored in the annual employee survey.
In the survey, stress is defined as a situation where the employee feels tense, restless,
nervous or troubled, or unable to sleep at night due to thoughts about their problems.
With reference to symptoms of physical pain, the employee is asked in the survey if
generally their work causes them physical pain.
Indirect taxes
Other taxes
Total
2,815
(1,035)
1,314
—
1,780
1,314
3,027
2,612
873
751
32,692
18,555
51,247
36,003
32,593
8.6 US pricing
% change vs prior year
US product portfolio
List price change – Avg.
Net price change – Avg.
US insulin portfolio
List price change – Avg.
Net price change – Avg.
2023
2022
2021
2.8%
2.4%
1.6%
(8.2%)
(10.5%)
(12.3%)
0.1%
0.0%
0.0%
(24.4%)
(19.5%)
(10.9%)
Novo Nordisk has a long history of making products accessible and affordable through
responsible pricing practices and patient access programmes. In 2023, the average net price
of both the US product portfolio and the US insulin portfolio decreased by 8.2% and 24.4%,
respectively, compared to 10.5% and 19.5% in 2022, as a result of enhancements to secure
formulary access for insured patients, as well as the evolution of channel and payer mix.
In 2023, the total tax contribution amounted to DKK 51,247 million, split across 64% of
taxes borne and 36% of taxes collected. In 2022, the split was 55% of taxes borne and
45% of taxes collected.
The overall increase in total tax contribution from 2022 to 2023 is primarily related
to higher corporate income taxes paid in Denmark due to an increase in the profit
before tax. In addition, the corporate income tax in 2022 reflects the partial refund
of tax prepayment made in 2021. Expansion of production and sales worldwide have
required more employees which has increased the payment of employment taxes
including social security contributions.
ACCOUNTING POLICIES
Novo Nordisk's total tax contribution is measured as the taxes borne or collected by
Novo Nordisk, which have been paid in the respective year. Taxes borne are defined
as taxes where Novo Nordisk carries the cost. Taxes collected are defined as taxes
collected by Novo Nordisk on behalf of others, e.g. employee income taxes deducted
from employee salaries and paid to the government.
Corporate income taxes paid primarily consist of corporate income taxes and
withholding taxes on company dividends paid during the year.
Novo Nordisk has provided sales discounts and rebates amounting to 74% of US gross
sales in 2023, resulting in the average annual list price across US product portfolio
increasing by 2.8% and the US insulin portfolio by 0.1%.
Employment taxes primarily consist of taxes collected from employees on behalf of
the government and social security costs (part of payroll taxes in some countries).
ACCOUNTING POLICIES
The US product portfolio is inclusive of Diabetes, Obesity and Rare Disease products.
The percentage change represents a sales weighted average list and net price for the
respective year compared to the sales weighted average list and net price for the prior
year, and is not reflective of the magnitude of individual list price actions. The net price
represents the average list price minus rebates, discounts and returns for the specific
product for the year in which it is being calculated.
Indirect taxes consist of non-refundable VAT, net VAT collections, customs duties,
environmental taxes and property taxes.
Other taxes consist of country-specific taxes not linked to one of the categories
above, e.g. the US branded prescription drug fee.
DKK million
World Diabetes Foundation (WDF)
Novo Nordisk Haemophilia Foundation
(NNHF)
Total donations and other contributions
2023
119
19
138
2022
93
33
126
2021
92
—
92
The WDF, an independent trust, supports sustainable partnerships and acts as a
catalyst to help others do more. The amount granted to WDF has increased to
DKK 119 million in 2023 in accordance with the donation agreement. For more
information, visit: www.worlddiabetesfoundation.org.
The NNHF supports programmes in low- and middle-income countries. Initiatives
focus on capacity-building, diagnosis and registry, awareness and advocacy. The
residual payment for the agreed donation to the NNHF for the year 2022 was made
in 2023, amounting to DKK 13 million. Additionally, in 2023 Novo Nordisk paid DKK 6
million. Since 2005, the NNHF has provided funding for 311 programmes (237 projects
and 74 fellowships) in 87 countries. For additional information, visit: www.nnhf.org.
ACCOUNTING POLICIES
Donations and other contributions by Novo Nordisk to the WDF and the NNHF are
recognised when the donation or contribution is paid out.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
93
9.2 Compliance Hotline
9.4 Product recalls
Section 9
Governance performance
9.1 Business ethics reviews and training
In 2023, Group Internal Audit performed 40 business ethics reviews, compared
to 35 in 2022, which was in line with the number of planned reviews for the year.
Annual training on business ethics is mandatory for all employees, including all new
hires. In 2023, 99% of employees completed and documented their training, in line
with 2022. The completion and documentation rate represents the emphasis of Novo
Nordisk diligently following up on employees to ensure completion of the annual
training. The remaining 1% is mainly due to employees being on leave.
We maintain a Compliance Hotline to enable employees, stakeholders and external
parties to report potential violations of our policies or applicable laws and regulations.
The Compliance Hotline is an important component of our commitment to ethical
conduct and transparency. The increase in number of substantiated cases in the
period from 2021 to 2023 is driven by the increased business growth, including
development in number of employees.
ACCOUNTING POLICIES
Number of substantiated cases reported via the Compliance Hotline includes the number
of cases where reported allegations of suspected misconduct have been substantiated or
partially substantiated. When a case has been substantiated or partially substantiated,
corrective actions are initiated.
Convictions for violation of anti-corruption and anti-bribery laws include convictions
where a Novo Nordisk legal entity (parent or any affiliate) has been found in violation
by a court of law.
ACCOUNTING POLICIES
The number of business ethics reviews is recorded as the number of business ethics
reviews performed by Group Internal Audit in subsidiaries, production sites, vendors
and headquarter areas.
9.3 Supplier audits
The mandatory ethics and compliance training is based on the principles for ethics
and compliance for employees working at Novo Nordisk. The training is provided
in the form of globally applicable e-learning and related tests. The percentage of
employees trained in business ethics is calculated as the number of employees that
have completed the training divided by the total number of employees at year-end.
Number
2023
2022
2021
Responsible sourcing audits
Quality audits
Total supplier audits
24
358
382
14
280
294
16
237
253
The 30% increase in the number of supplier audits from 2022 to 2023 reflects the general
increased activity level in Novo Nordisk. Two critical findings on responsible sourcing were
issued during 2023, both related to wages, benefits and working hours. Three critical
findings were issued during quality audits, related to reprocessing, certificates of
analysis (COAs) and cross-contamination control. Agreements regarding actions to
address all critical findings have been made with the affected suppliers. Of the two
critical findings issued and reported in 2022, one was addressed in the same year, and
remediation for the second critical finding regarding environmental reporting was still
ongoing. An agreement with the supplier has subsequently been reached during 2023.
ACCOUNTING POLICIES
The number of supplier audits concluded by Novo Nordisk's Corporate Quality
function consists of the number of responsible sourcing audits and quality audits
conducted at suppliers.
In 2023, Novo Nordisk had two product recalls. In Libya, the recall was due to a
labelling error on the sales carton. In Spain, the recall was due to cracked cartridges
in FlexTouch® pens.
ACCOUNTING POLICIES
The number of product recalls is recorded as the number of times Novo Nordisk has
instituted a recall, and includes recalls in connection with clinical trials. A recall can
affect various countries.
9.5 Failed inspections
In 2023, Novo Nordisk had not failed any inspection among those that were resolved at
year-end. During 2023, 152 inspections were conducted. At year-end, 117 inspections
were passed and 35 were unresolved, as final inspection reports had not been received,
or the final authority’s acceptance was pending. This is normal practice. Follow-up on
unresolved inspections will continue in 2024.
ACCOUNTING POLICIES
Failed inspections are defined as inspections where Warning Letters or EMA non-
compliance letters related to GMP inspections are received, GMP/ISO certificates for
strategic sites are lost, pre-approval inspections result in a Complete Response Letter,
study conclusions are changed due to GCP/GLP inspection issues, or marketing or import
authorisations are withdrawn due to inspection issues. Strategic sites are defined as the
manufacturing sites in Brazil, China, Denmark, France and the US. Acquired companies
inspections are defined as inspections run by the acquired company. Inspections at
acquired companies run by Novo Nordisk are reported as Novo Nordisk inspections.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
94
9.6 Facilitations of the Novo Nordisk Way
9.7 Company reputation
9.8 Animals purchased for research
In 2023, a total of 42 units were facilitated and approximately 2,300 employees were
individually interviewed. In addition, feedback on those units was collected from
approximately 550 stakeholders. Out of the 42 units, one unit was assessed not to be
working in accordance with the Novo Nordisk Way, and for five units immediate actions
were required, which if not taken would lead to breaches of the Novo Nordisk Way.
Across all units facilitated, the accelerated growth and supply-demand challenges
are the two main factors which consistently impact the organisation and drive most
improvement opportunities from the facilitations conducted. The most frequent
observations raised to management teams for action are associated with five out of
our ten Essentials: 2) We set ambitious goals and are empowered to achieve them, 5)
We build and maintain good relations with our stakeholders, 7) We focus on
performance and personal development, 8) We have a healthy and engaging work
environment, and 9) We strive for agility and simplicity in everything we do.
ACCOUNTING POLICIES
Facilitations of the Novo Nordisk Way are measured as the number of facilitations
completed. A facilitation is an internal process for assessing adherence to the Novo
Nordisk Way. The assessments are based on a review of documentation and feedback
from stakeholders, followed by an on-site visit during which randomly selected
employees and management are interviewed. Identified gaps and improvement
opportunities related to the Novo Nordisk Way are presented to, and discussed with,
Management. The facilitators and Management agree on an action plan to address
those gaps and improvement opportunities. For the full list of the Novo Nordisk Way
Essentials, please refer to page 19 in the Management review.
Scale 0-100
People with diabetes
People with obesity
General practitioners
Diabetes specialists
Informed general public
Total score (average)
2023
2022
2021
Number
81.4
77.9
82.9
88.9
79.6
82.1
81.3
79.4
84.0
90.3
76.3
82.3
81.5
79.4
84.8
90.3
77.1
82.6
Mice, rats and other rodents
Pigs
Rabbits
Dogs
Non-human primates
Fish
Other vertebrates
2023
54,410
2022
2021
63,760
35,675
608
289
356
807
36
2
427
606
146
700
759
184
114
495
14,098
10,638
13
14
Company reputation is a comprehensive approach to analysing reputational intelligence.
Novo Nordisk’s excellent reputation score is driven by positive perceptions of products
and services, and by growing appreciation from the informed general public.
ACCOUNTING POLICIES
The reputation score is based on four factors measuring esteem, admiration, trust
and feeling of the stakeholders towards Novo Nordisk, across ten key markets: France,
Denmark, the US, Canada, Brazil, China, Japan, Germany, Italy and the UK. The data
is collected through online surveys carried out by an external consultancy firm.
Responses are aggregated to produce an overall score on a Likert scale of 1-7, which
is rebased on a 0-100 scale.
Total animals purchased
56,508
79,750
47,879
The number of animals purchased for research in 2023 decreased by 29% compared
to 2022. 96% of the animals purchased were rodents. The significant decrease in the
number of fish and rodents in 2023 is attributable, respectively, to specific research
projects using fish larvae that have been discontinued in the year, and to our
continuous efforts to reduce the number of animals used for research.
ACCOUNTING POLICIES
Animals purchased for research comprises the number of animals purchased for all
research undertaken by Novo Nordisk either in-house or by external contractors. The
number of animals purchased is based on internal registration of purchased animals
and yearly reports from external contractors.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
95
Statement by the Board of Directors and Executive Management
The Board of Directors and Executive Management have today considered
In our opinion, the Management review contains a fair review of the
the Greenhouse Gas (GHG) Protocol and the reporting principles of
and approved the Annual Report for Novo Nordisk A/S for the financial
development of the Group’s and the parent company’s business and
materiality, inclusivity, responsiveness and environmental, social and
year 1 January 2023 – 31 December 2023.
financial matters, the results for the year and of the parent company’s
governance accounting policies. In our opinion, the consolidated ESG
The consolidated financial statements are presented in accordance with
included in the consolidated financial statements, together with a
presentation of the organisation’s environmental, social and governance
IFRS Accounting Standards as endorsed by the EU. The parent financial
description of the principal risks and uncertainties that the Group
performance in accordance with these principles.
financial position and the financial position as a whole of the entities
statement gives a true and fair account and a balanced and reasonable
statements are presented in accordance with the Danish Financial
and the parent company face.
Statements Act. Furthermore, the Annual Report is prepared in
We recommend the Annual Report for adoption at the Annual General
accordance with disclosure requirements for listed companies.
In our opinion, the Annual Report of Novo Nordisk A/S for the financial
Meeting.
year 1 January 2023 to 31 December 2023 identified as NOVO-2023-12-
In our opinion, the consolidated financial statements and the parent
31-en.zip is prepared, in all material respects, in compliance with the
Bagsværd, 31 January 2024
financial statements give a true and fair view of the Group’s and the
ESEF Regulation.
parent company’s financial position at 31 December 2023, as well as
of the results of their operations and cash flows for the financial year
The consolidated ESG statement for 1 January – 31 December 2023 has
1 January 2023 - 31 December 2023.
been prepared in accordance with the Danish Financial Statements Act,
Registered Executive Management
Board of Directors
Lars Fruergaard Jørgensen
Karsten Munk Knudsen
President and CEO
CFO
Helge Lund
Chair
Henrik Poulsen
Vice Chair
Elisabeth Dahl Christensen
Laurence Debroux
Andreas Fibig
Sylvie Grégoire
Liselotte Hyveled
Mette Bøjer Jensen
Kasim Kutay
Christina Law
Martin Mackay
Thomas Rantzau
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
96
Independent Auditor’s Report
To stakeholders of Novo Nordisk A/S
Report on the Financial Statements
Opinion
We have audited the consolidated financial statements and the parent financial statements of
Novo Nordisk A/S for the financial year 1 January 2023 – 31 December 2023, which comprise the
income statement, balance sheet, equity statement and notes, including a summary of material
accounting policy information, for the Group as well as the Parent, and the statement of
comprehensive income and the cash flow statement of the Group (collectively referred to as the
‘Financial Statements’). The consolidated financial statements are prepared in accordance with
IFRS Accounting Standards as endorsed by the EU and additional requirements of the Danish
Financial Statements Act, and the parent financial statements are prepared in accordance with
the Danish Financial Statements Act.
In our opinion, the consolidated financial statements give a true and fair view of the Group’s
financial position at 31 December 2023, and of the results of its operations and cash flows for
the financial year 1 January 2023 – 31 December 2023 in accordance with IFRS Accounting
Standards as endorsed by the EU and additional requirements under the Danish Financial
Statements Act.
Further, in our opinion, the parent financial statements give a true and fair view of the Parent’s
financial position at 31 December 2023, and of the results of its operations for the financial year
1 January 2023 – 31 December 2023 in accordance with the Danish Financial Statements Act.
Our opinion is consistent with our Long-form Auditor’s report issued to the Audit Committee
and the Board of Directors.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) and the
additional requirements applicable in Denmark. Our responsibilities under those standards and
requirements are further described in the Auditor’s responsibilities for the audit of the
consolidated financial statements and the parent financial statements section of this auditor’s
report. We are independent of the Group in accordance with the International Ethics Standards
Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code) and
the additional ethical requirements applicable in Denmark, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the IESBA Code. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, we have not provided any prohibited non-audit
services as referred to in Article 5(1) of Regulation (EU) No 537/2014.
We were appointed auditors of Novo Nordisk A/S for the first time on 25 March 2021, for the
financial year 2021. We have been reappointed annually by decision of the general meeting for a
total continuous engagement period of three years up to and including the financial year 2023.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements and the parent financial
statements for the financial year 1 January 2023 – 31 December 2023. These matters were
addressed in the context of our audit of the consolidated financial statements and the parent
financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
US sales rebates
Refer to notes 2.1 and 3.5 in the consolidated financial statements.
In the United States (US), sales rebates are paid in connection with public healthcare insurance
programmes, namely Medicare and Medicaid, as well as rebates to pharmacy benefit managers
and managed healthcare plans. In January 2021, the Group changed its policy in the US related to
the 340B Drug Pricing Program, whereby Novo Nordisk no longer provides 340B statutory
discounts to certain pharmacies that contract with covered entities participating in the 340B Drug
Pricing Program. Novo Nordisk has only recognised revenue related to the 340B Drug Pricing
Program to the extent that it is highly probable that its inclusion will not result in a significant
revenue reversal in the future. When sales are recognised, Novo Nordisk also records provisions
for the expected value of the sales deductions (variable consideration) at the time the related
sales are recorded.
The US sales rebates, including provisions related to the 340B Drug Pricing Program, involved
significant measurement uncertainty as the provisions are based on legal interpretations of
applicable laws and regulations, historical claims experience, payer channel mix, current contract
prices, unbilled claims, claims submission time lags and inventory levels in the distribution
channel. Consequently, we considered this to be a key audit matter.
We evaluated the appropriateness of the methodology used to develop sales rebates provisions,
including provisions related to the 340B Drug Pricing Program, by involving audit professionals
with industry and quantitative analytics experience to assist us in performing our auditing
procedures.
We tested the effectiveness of controls relating to sales rebates, including controls over the
assumptions and data used to estimate these rebates.
We tested rebate claims processed, including evaluating those claims for consistency with the
conditions and terms of rebate arrangements.
We tested the overall reasonableness of the accruals recorded at period end by developing an
expectation for comparison to actual recorded balances.
We evaluated Management’s ability to estimate sales rebates accurately by considering the
historical accuracy of the estimates in prior year.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
97
Statement on the management review
Management is responsible for the management review.
Our opinion on the consolidated financial statements and the parent financial statements does not
cover the management review, and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements and the parent financial
statements, our responsibility is to read the management review and, in doing so, consider
whether the management review is materially inconsistent with the consolidated financial
statements and the parent financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
Moreover, it is our responsibility to consider whether the management review provides the
information required by the Danish Financial Statements Act and article 8 of Regulation (EU)
2020/852 (EU Taxonomy Regulation).
Based on the work we have performed, we conclude that the management review is in
accordance with the consolidated financial statements and the parent financial statements and
has been prepared in accordance with the requirements of the Danish Financial Statements Act
and article 8 of Regulation (EU) 2020/852 (EU Taxonomy Regulation). We did not identify any
material misstatement of the management review.
Management’s responsibilities for the Financial Statements
Management is responsible for the preparation of consolidated financial statements that give a
true and fair view in accordance with IFRS Accounting Standards as endorsed by the EU and
additional requirements of the Danish Financial Statements Act as well as the preparation of
parent financial statements that give a true and fair view in accordance with the Danish Financial
Statements Act, and for such internal control as Management determines is necessary to enable
the preparation of consolidated financial statements and parent financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements and the parent financial statements,
Management is responsible for assessing the Group’s and the Parent’s ability to continue as a
going concern, for disclosing, as applicable, matters related to going concern, and for using the
going concern basis of accounting in preparing the consolidated financial statements and the
parent financial statements unless Management either intends to liquidate the Group or the
Entity or to cease operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements and the parent financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs and the additional requirements applicable in Denmark will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these consolidated financial
statements and these parent financial statements.
As part of an audit conducted in accordance with ISAs and the additional requirements applicable
in Denmark, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements
and the parent financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s and the Parent’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by Management.
related to the preparation of the annual report in XHTML format and iXBRL tagging of the
consolidated financial statements including notes.
Management is responsible for preparing an annual report that complies with the ESEF
Regulation. This responsibility includes:
• The preparing of the annual report in XHTML format;
• The selection and application of appropriate iXBRL tags, including extensions to the ESEF
taxonomy and the anchoring thereof to elements in the taxonomy, for financial information
required to be tagged using judgement where necessary;
• Ensuring consistency between iXBRL tagged data and the consolidated financial statements
• Conclude on the appropriateness of Management’s use of the going concern basis of
presented in human readable format; and
accounting in preparing the consolidated financial statements and the parent financial
statements, and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s and the Parent’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the consolidated
financial statements and the parent financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date
of our auditor’s report. However, future events or conditions may cause the Group and the
Entity to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the Financial Statements, including
the disclosures in the notes, and whether the Financial Statements represent the underlying
transactions and events in a manner that gives a true and fair view.
• For such internal control as Management determines necessary to enable the preparation of
an annual report that is compliant with the ESEF Regulation.
Our responsibility is to obtain reasonable assurance on whether the annual report is prepared,
in all material respects, in compliance with the ESEF Regulation based on the evidence we have
obtained and to issue a report that includes our opinion. The nature, timing and extent of
procedures selected depend on the auditor’s judgement, including the assessment of the risks
of material departures from the requirements set out in the ESEF Regulation, whether due to
fraud or error. The procedures include:
• Testing whether the annual report is prepared in XHTML format;
• Obtaining an understanding of the Company’s iXBRL tagging process and of internal control
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities
over the tagging process;
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence,
and, where applicable, safeguards put in place and measures taken to eliminate threats.
• Evaluating the completeness of the iXBRL tagging of the consolidated financial statements
including notes;
• Evaluating the appropriateness of the Company’s use of iXBRL elements selected from the
ESEF taxonomy and the creation of extension elements where no suitable element in the ESEF
taxonomy has been identified;
• Evaluating the use of anchoring of extension elements to elements in the ESEF taxonomy; and
• Reconciling the iXBRL tagged data with the audited consolidated financial statements.
In our opinion, the annual report of Novo Nordisk A/S for the financial year 1 January to 31
December 2023 with the file name NOVO-2023-12-31-en.zip is prepared, in all material respects,
in compliance with the ESEF Regulation.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the Financial Statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Copenhagen, 31 January 2024
Deloitte
Statsautoriseret Revisionspartnerselskab
Business Registration No 33 96 35 56
Report on compliance with the ESEF Regulation
As part of our audit of the Financial Statements of Novo Nordisk A/S, we performed procedures
to express an opinion on whether the annual report of Novo Nordisk A/S for the financial year 1
January 2023 to 31 December 2023 with the file name NOVO-2023-12-31-en.zip is prepared, in
all material respects, in compliance with the Commission Delegated Regulation (EU) 2019/815
on the European Single Electronic Format (ESEF Regulation), which includes requirements
Anders Vad Dons
State-Authorised Public Accountant
mne25299
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
98
Independent Auditor’s Assurance Report on the ESG statement
To stakeholders of Novo Nordisk A/S
Novo Nordisk A/S engaged us to provide limited assurance on the consolidated ESG
statement (‘the ESG statement’) for the period 1 January – 31 December 2023, presented on
pages 86 to 94 in the Annual Report 2023 of Novo Nordisk A/S.
A limited assurance engagement is substantially less in scope than a reasonable assurance
engagement. Consequently, the level of assurance obtained in a limited assurance
engagement is substantially lower than the assurance that would have been obtained
had we performed a reasonable assurance engagement.
Management’s responsibility
Management of Novo Nordisk A/S is responsible for designing, implementing and
maintaining internal controls over information relevant to the preparation of the ESG data
and information in the ESG statement, ensuring it is free from material misstatement,
whether due to fraud or error. Furthermore, Management is responsible for establishing
objective accounting policies for the preparation of the ESG statement, for the overall content
of the ESG statement, and for measuring and reporting ESG data in accordance with the Basis
of preparation and the ESG accounting policies.
Auditor’s responsibility
Our responsibility is to express a limited assurance conclusion based on our engagement with
Management and in accordance with the agreed scope of work. We have conducted our work
in accordance with ISAE 3000 (Revised) Assurance Engagements Other than Audits or Reviews
of Historical Financial Information and ISAE 3410 Assurance Engagements on Greenhouse
Gas Statements, and additional requirements under Danish audit regulation, to obtain limited
assurance about our conclusion. Greenhouse Gas emissions quantification is subject to
inherent uncertainty because of incomplete scientific knowledge used to determine emission
factors and the values needed to combine emissions of different gasses.
We are responsible for:
• planning and performing the engagement to obtain limited assurance about whether the
ESG statement is free from material misstatement, whether due to fraud or error, and
prepared, in all material respects, in accordance with the Basis for preparation and the ESG
accounting policies;
• forming an independent conclusion, based on the procedures we performed and the
evidence we obtained; and
• reporting our conclusion to the stakeholders of Novo Nordisk A/S.
Deloitte Statsautoriseret Revisionspartnerselskab applies International Standard on Quality
Management 1 (ISQM 1), which requires the firm to design, implement and operate a system
of quality management including policies or procedures regarding compliance with ethical
requirements, professional standards and applicable legal and regulatory requirements. We
have complied with the requirements for independence and other ethical requirements of
the International Ethics Standards Board for Accountants’ International Code of Ethics for
Professional Accountants (IESBA Code), which is founded on fundamental principles of
integrity, objectivity, professional competence and due care, confidentiality and professional
behaviour and ethical requirements applicable in Denmark.
Work performed
We are required to plan and perform our work in order to consider the risk of material
misstatement in the ESG statement. To do so, we have:
• conducted interviews with data owners and internal stakeholders to understand the key
processes and control activities for measuring, recording and reporting the ESG data;
• performed limited substantive testing on a selective basis to check that data has been
appropriately measured, recorded, collated and reported;
• performed analysis of data, selected based on risk and materiality;
• made inquiries regarding significant developments in the reported data;
• considered the presentation and disclosure of the ESG statement;
• assessed that the process for reporting greenhouse gas emissions data follows the
principles of relevance, completeness, consistency, transparency and accuracy outlined
in The Greenhouse Gas Protocol Corporate Standard Revised edition (2015) and The
Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011); and
• evaluated the evidence obtained.
Our conclusion
Based on the procedures performed and the evidence obtained, nothing has come to
our attention that causes us not to believe that the ESG data on pages 86 to 94 in the
consolidated ESG statement for the period 1 January – 31 December 2023, have been
prepared, in all material respects, in accordance with the Basis of preparation and the
ESG accounting policies.
Copenhagen, 31 January 2024
Deloitte
Statsautoriseret Revisionspartnerselskab
Business Registration No. 33 96 35 56
Anders Vad Dons
State-Authorised Public Accountant
mne25299
Mads Stærdahl Rosenfeldt
ESG Partner
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
99
Additional
information
100 More information
101 Product overview
102 ESG initiatives
104 Sustainability frameworks and performance
Once considered the best mountain
biker in Spain, David Lozano (right)
was dropped from his professional
contract after being diagnosed with
type 1 diabetes. Determined to
continue his career, David connected
with Team Novo Nordisk, the world’s
only all-diabetes professional cycling
team. His transition to road biking has
been full of personal triumphs, and his
involvement in the team led his father
– also diagnosed with type 1 diabetes –
to take a more active role in managing
the disease. David is pictured here with
his teammate Matyas Kopecky.
Watch Team Novo Nordisk’s
documentary here
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
100
More information
Additional reporting
Novo Nordisk provides additional disclosure to satisfy legal requirements
Form 20-F
The Form 20-F is filed using a standardised reporting form so that
Disclaimer
The patients, employees and relatives portrayed in this Annual Report
and stakeholder interests. Supplementary reports can be downloaded at:
investors can evaluate the company alongside US domestic equities.
and ancillary reports have participated of their own accord and solely to
www.novonordisk.com/annualreport, while additional information can
It is an annual reporting requirement by the US Securities and Exchange
express their own personal opinions on topics referred to, which do not
be found at: www.novonordisk.com.
Commission (SEC) for foreign private issuers with equity shares listed on
necessarily reflect the views and opinions of Novo Nordisk. Use of the
Materiality
Novo Nordisk relies on the International Integrated Reporting
Council’s definition of materiality. Information deemed material for
exchanges in the United States.
pictures as illustrations is in no way intended to associate the patients,
employees or relatives with the promotion of any Novo Nordisk
Corporate Governance Report
The Corporate Governance Report discloses Novo Nordisk’s compliance
products.
providers of financial capital in their decision-making is included in
with corporate governance to meet the requirements of the Danish
the Annual Report, i.e. it being of such relevance and importance that
Financial Statements Act.
it could substantively influence their assessments of Novo Nordisk’s
Credits
Design and production: Kontrapunkt.
Illustrations: Kontrapunkt.
ability to create value over the short, medium and long term. See
how Novo Nordisk determines materiality and material issues at:
Remuneration Report
The Remuneration Report describes the remuneration awarded or due
Photography: Carlos Rossini, Helen Orr, Jesper Edvarsen, Jesper Westley,
Junpei Ono, Kelly Mailloux, Martin Nordmark, Marie Hald, Mauricio
www.novonordisk.com.
during 2023 to members of the Board and Executive Management
Ramos, Thomas Fink.
registered with the Danish Business Authority in accordance with section
Annual Report
This Annual Report is Novo Nordisk’s full statutory Annual Report pursuant
139b of the Danish Companies Act. The Remuneration Report is
submitted to the Annual General Meeting for an advisory vote.
to Section 149(1) of the Danish Financial Statements Act. The statutory
Annual Report will be presented and adopted at the Annual General Meeting
on 21 March 2024 and will subsequently be submitted to and be available
References
Throughout the Management review section in this report, links are
at the Danish Business Authority. The consolidated financial statements
provided to online sources for additional information. Some of the
included in this Annual Report have been prepared in accordance with IFRS
references are not mandatory and hence not included in the audit
Accounting Standards (IFRS) as issued by the International Accounting
of the Management review. For more news from Novo Nordisk, please
Standards Board (IASB) and in accordance with IFRS Accounting Standards
visit: www.novonordisk.com/investors.html and www.novonordisk.com/
endorsed by the EU and further requirements in the Danish Financial
news-and-media/latest-news.html.
Statements Act. Moreover, it meets the requirements of an integrated
report, as per the International Integrated Reporting Framework.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
101
Product overview1
New-generation insulin and combinations
Durable delivery systems
• Tresiba®, insulin degludec
• Ryzodeg®, insulin degludec/insulin aspart
• Fiasp®, fast-acting insulin aspart
• Xultophy®2, insulin degludec/liraglutide
Modern insulin
• Levemir®, insulin detemir
• NovoRapid®3, insulin aspart
• NovoMix® 30, biphasic insulin aspart
• NovoMix® 50, biphasic insulin aspart
• NovoMix® 70, biphasic insulin aspart4
Human insulin
• Insulatard® isophane (NPH) insulin
• Actrapid®, regular human insulin
• Mixtard® 30, biphasic human insulin
• Mixtard® 40, biphasic human insulin4
• Mixtard® 50, biphasic human insulin
Glucagon-like peptide-1
• Victoza®, liraglutide
• Ozempic®, semaglutide
• Rybelsus®, oral semaglutide
Pre-filled delivery systems
• FlexTouch®, U100, U200
• FlexPen®
• InnoLet®
• Ozempic®, FlexTouch®
• NovoPen® 6
• NovoPen® 5
• NovoPen® 4
• NovoPen Echo® Plus
• NovoPen Echo®
Other delivery systems
• PumpCart®, NovoRapid® and Fiasp® cartridge
to be used in pump
• Penfill® cartridge
• Mallya®
Oral antidiabetic agents
• NovoNorm®, repaglinide
Glucagon
• GlucaGen®, glucagon (vial and Hypokit®)
• Zegalogue®, dasiglucagon
Needles
• NovoFine® Plus
• NovoFine®
• NovoTwist®
• NovoFine® AutoCover®
Glucagon-like peptide-1
• Saxenda®, liraglutide 3.0 mg
• Wegovy®, semaglutide 2.4 mg
Obesity delivery systems
• Saxenda®, FlexTouch®
• Wegovy® Single Dose Device and FlexTouch®
Rare blood disorders
• NovoSeven®, eptacog alfa (recombinant activated factor VII)
• NovoEight®5, turoctocog alfa (recombinant factor VIII)
• NovoThirteen®, catridecacog (recombinant factor XIII)
• Refixia®6, nonacog beta pegol, N9-GP (recombinant factor IX)
• Esperoct®, turoctocog alfa pegol, N8-GP (recombinant factor VIII)
• Alhemo®, concizumab (anti-TFPI)
Rare endocrine disorders
• Norditropin®, somatropin (rDNA origin)
• Sogroya®, somapacitan (rDNA origin)
Pre-filled human growth hormone delivery systems
• FlexPro®
• NordiFlex®
Other delivery systems
• PenMate®, automatic needle inserter for NordiFlex®
Hormone replacement therapies
• Vagifem®7, estradiol hemihydrate
• Activelle®, estradiol/norethisterone acetate
• Kliogest®, estradiol/norethisterone acetate
• Novofem®, estradiol/norethisterone acetate
• Trisequens®, estradiol/norethisterone acetate
• Estrofem®, estradiol
1. Products listed may not be available in all markets. 2. In the US approved under the brand name Xultophy® 100/3.6. 3. In the US called NovoLog®. 4. The global discontinuation of NovoMix® 70 and Mixtard® 40 has been communicated. 5. In the US written Novoeight®. 6. In the US approved under the name of REBINYN®. 7. In the UK also called gina®.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
102
ESG initiatives
We recognise the need to operate with proper regard to our impact on society and the
environment. This table compiles some of our most significant initiatives within ESG.
Agenda
Name
Description
Reach
Ambition
2023 Progress
CO2e emissions
Purchasing renewable
energy
Range of solutions helping us move towards 100% renewable energy supply. This includes Renewable Electricity Certificates
(REC), Power Purchase Agreements (PPA) and on-site renewable energy solutions.
Global
Achieve zero CO2e emissions from operations
by 2030.
Minimising air
transportation impact
Three-fold approach to reduce CO2e emissions associated to air transportation. This includes limiting business flights,
reducing air freight of our products and purchasing Sustainable Aviation Fuel (SAF).
Global
Achieve zero CO2e emissions from transportation
by 2030.
Across Novo Nordisk, 63.2% of the energy sourced and 99.5% of the power sourced this
year was renewable. At production sites, 61.3% of the energy sourced and 100% of the
power sourced was renewable.
We reduced CO2e emissions associated to air transportation by 32%. We entered into
the Sustainable Aviation Buyers Alliance (SABA) to purchase SAF, hereby securing
significant investment and scalability in SAF solutions.
Decarbonising
supply chains
Holistic effort to decarbonise our supply chain, with over 90% of CO2e emissions coming from suppliers, by identifying and
implementing levers within high-impact scope 3 categories.
Global
Set an absolute, near-term scope 3 reduction
target by the end of 2024.
We started an in-depth supplier engagement programme and roadmap development.
This will continue throughout 2024.
Sustainable Markets
Initiative (SMI)
Public-private partnership, involving CEOs and leaders from healthcare organisations, that aims to decarbonise healthcare
systems by reducing emissions from supply chains, patient care pathways and clinical trials.
Global
Address 3.5 million tonnes of CO2e per year across
more than 100 of the members’ largest
pharmaceutical suppliers.
The SMI private sector CEOs launched joint, minimum environmental targets
for suppliers.
Plastic
Converting to
reusable devices
Efforts to move away from single-use devices and convert into reusable devices that have a longer lifespan. While Novo
Nordisk has manufactured reusable devices for almost 30 years, we intend to prioritise this conversion going forward.
NWE1, AU2,
CN3, CA4
Build on this year's conversions to raise the ambition
level for 2024 and beyond.
We increased our efforts to shift more patients towards reusable devices in Region
North West Europe, Australia, China and Canada.
Finding fossil-free
plastic alternatives
Efforts to find viable, lower-carbon alternatives to fossil-based plastic, which is present in the hundreds of millions of pens
we produce every year.
Global
Replace plastic in our products with fossil-free
alternatives.
We announced a partnership with the LEGO Group to buy e-methanol from European
Energy and use it as a lower-carbon alternative to conventional plastics. Production of
the resulting plastic is expected for 2025.
Recycling
injection devices
Take-back scheme tasked with recycling injection pens. This includes pilot programmes in a number of countries, and
the world's first industry pilot in Denmark, in collaboration with Lilly, Sanofi and Merck.
DK5, UK6, BR7,
FR8
Collect 25% of the injection pens in Denmark within
the industry pilot’s first year, and achieve an 85%
recycling rate by the end of 2024.
We launched the world’s first industry pilot in Denmark and are currently achieving a
50% recycling rate of the materials in the returned injection pens.
Access and
affordability
Access to Insulin
Commitment
Commitment to provide human insulin at a ceiling price of USD 3 per vial to governments and public tenders in 77 LMIC9,
as well as USD 2 per vial to selected humanitarian organisations and NGOs.
LMIC
Secure access to affordable insulin to significantly
more people living with diabetes in LMIC.
An estimated 2.4 million people accessed care under this commitment.
Changing Diabetes®
in Children
Public-private partnership providing comprehensive care for children and young people living with type 1 diabetes in LMIC.
This includes free life-saving medicine and supplies for those up to 25 years old.
Thermostable insulin
Cross-functional initiative that challenges and re-evaluates the thermal stability of short- and intermediate-acting human
insulin products. These are widely used in LMIC and humanitarian settings, where people with diabetes, and without access
to stable cooling options, can benefit from revised storage guidance.
29 countries
across AF10,
ME11, AS12,
SA13
LMIC
Reach 100,000 vulnerable children and young people
living with type 1 diabetes by 2030.
So far, we have reached 52,249 children and young people, trained 25,314 healthcare
professionals and refurbished 406 clinics.
Reach national approvals in the 72 countries
considered for revised storage conditions.
So far, we have 29 national approvals for more flexible storage conditions.
iCARE
Integrated business model, driven by our regional affiliate, that uses partnerships across sub-Saharan Africa to improve
access to diabetes care. It does so by establishing and strengthening four building blocks of diabetes management: capacity,
affordability, reach and empowerment.
Sub-Saharan
Africa
Secure access to diabetes care for vulnerable
patients.
We reached 433 thousand people with diabetes and trained 3,523 healthcare
professionals.
Africa for Africa
Commitment to significantly increase availability of insulin to people with diabetes on the African continent. It focuses on
local production, and will both reduce the environmental footprint from transportation and support creation of local jobs.
Africa
Produce more than 60 million vials by 2026.
We announced a partnership with South African-based pharmaceutical manufacturer
Aspen Pharmacare to increase the production of insulin for the African continent.
Partnering for Change
Collaboration between the International Committee of the Red Cross (ICRC), the Danish Red Cross and Novo Nordisk
investigating better approaches to care for people living with non-communicable diseases (NCDs) in humanitarian crises.
LB14, IQ15
Publish nine peer-reviewed articles on NCD care
in humanitarian crises.
Six peer-reviewed articles were published, four are under review and an additional two
are in the pipeline.
1. NWE: North West Europe. 2. AU: Australia. 3. CN: China. 4. CA: Canada. 5. DK: Denmark. 6. UK: United Kingdom. 7. BR: Brazil. 8. FR: France. 9. LMIC: Low- and middle-income countries. 10. AF: Africa. 11. ME: Middle East. 12. AS: Asia. 13. SA: South America. 14. LB: Lebanon. 15. IQ: Iraq.
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
103
ESG initiatives (continued)
Agenda
Name
Description
Reach
Ambition
2023 Progress
Access and
affordability
(continued)
MyInsulinRxTM
Programme allowing eligible patients to obtain a monthly supply of any combination of Novo Nordisk insulin products
(up to three vials or two packs of pens) for USD 35.
Patient Assistance
Program
Programme offering free diabetes medication to people in need who meet certain eligibility criteria, including annual
household income at or below 400% of the government-defined poverty level.
Immediate Supply
Program
Programme providing a free, one-time, short-term supply of our insulin (up to three vials or two packs of pens) to eligible
patients who may be at risk of rationing.
Copay Savings Offers
Offers reducing the cost for commercially insured patients who are exposed to higher than average copays.
US16
US
US
US
Provide access to affordable insulin to those in need
in the US.
We replaced My99Insulin with MyInsulinRxTM, reducing the out of pocket cost for
patients from USD 99 to 35.
Provide access to affordable diabetes medication to
those in need in the US.
We provided free insulin to 63 thousand people and free GLP-1-based medicines to 162
thousand people.
Provide access to affordable insulin to those in need
in the US.
Nine thousand patients had access to this programme, and we provided education on
availability of our affordability offerings.
Provide access to affordable diabetes medication to
those in need in the US.
We provided USD 169 million in copay assistance for insulin and USD 599 million in
copay assistance for GLP-1-based medicines.
Prevention
Cities Changing Diabetes
Programme bringing together a network of 47 city-based public-private partnerships that aim to prevent obesity and type 2
diabetes in vulnerable populations and children.
Global
Promote health equity, expand prevention efforts
and address barriers to health for vulnerable
populations and children.
Over 50 research studies were conducted, more than 250 local partnerships were
created or strengthened, and over 85 local interventions on diabetes and obesity were
initiated.
Partnership with UNICEF
Collaboration aiming to prevent childhood obesity across Latin America and Asia Pacific. It uses policies, programmes and
practices to directly impact the nutrition, wellbeing and development of children.
MX17, CO18,
BR, ID19
Directly impact at least 10 million children through
programmatic activities by 2026.
So far, the partnership has benefitted more than 2.7 million children and caregivers
across Latin America and the Caribbean through direct programmatic reach.
Diversity and
inclusion
Global parental
leave policy
Policy offering a minimum of eight weeks of paid leave within the first year of becoming a parent to all non-birthing parents
globally, regardless of gender.
Global
Ensure that all employees get the opportunity to
bond with their child.
Employees worldwide continue to benefit from our enhanced parental leave policy.
Global inclusion index
Numerical indicator, included in our annual employee engagement survey, of how employees rate the state of inclusion in
Novo Nordisk. It includes four statements covering psychological safety, equal opportunity, sense of belonging and valuing
of diverse perspectives.
Global
Sustain progress on the state of inclusion in
Novo Nordisk.
Of the more than 47,000 employees who completed the survey, 82% rated the inclusion
statements favourable, compared to 78% in 2021 and 82% in 2022.
Yearly equal pay reviews
Equal pay reviews conducted on a yearly basis and followed by corrective actions for confirmed equal pay risk cases.
Global,
excluding US
Mitigate bias in pay processes and decisions.
Out of the more than 49,000 positions covered in the pay review, we identified 0.6%
with an equal pay gap and we are taking corrective actions.
Gender diversity targets
Two aspirational gender diversity targets that accelerate progress towards balanced gender representation and ensure
leadership accountability.
Global
Achieve a balanced gender representation across all
managerial levels and a minimum of 45% women
and 45% men in senior leadership positions by the
end of 2025.
By end of year, 46% of all leaders were women, and 41% of leaders in senior leadership
positions were women, compared to 44% and 39%, respectively, at the end of 2022.
Company
culture
Novo Nordisk
Way Facilitation
Collaborative assessment that a team of facilitators performs with selected units to evaluate their compliance with the Novo
Nordisk Way.
Global
Assess all high-risk units yearly.
42 units were assessed, one of which was deemed to not be working in accordance
with the Novo Nordisk Way. The most frequent findings raised to management teams
relate to ambition, empowerment, stakeholder relations, simplicity or agility.
Ethics and
compliance
Global Ethics and
Compliance Framework
The Novo Nordisk Way, our OneCode and international and local standards for responsible business conduct set the foundation
for ethics and compliance in Novo Nordisk. This covers anti-fraud, anti-bribery, anti-off-label promotion, transparency in dealing
with healthcare professionals and organisations, protection of personal data and respect to human rights.
Global
Ensure that all Novo Nordisk employees act with
integrity and in compliance with the ethics and
compliance framework.
We launched OneCode, which sets expectations and guides all Novo Nordisk employees
on how we act as a company and individuals.
Annual Ethics and
Compliance Training
Ethics and compliance training conducted on an annual basis and mandatory for all employees, including all new hires.
Global
Train all Novo Nordisk employees annually in ethics
and compliance.
99% of all employees completed and documented their training, with the remaining 1%
missing mainly due to employees being on leave.
Business Ethics Reviews
Business ethics reviews performed by Group Internal Audit (GIA) in subsidiaries, production sites, vendors and headquarters
to assess the level of ethics and compliance in Novo Nordisk.
Global
Complete 45 business ethics reviews in 2024.
40 business ethics reviews were completed, compared to 35 reviews in 2022. Consolidated
conclusions were reported to Executive Management and the Audit Committee. GIA
assessed that the level of ethics and compliance in Novo Nordisk is sound.
16. US: United States. 17. MX: Mexico. 18. CO: Colombia. 19. ID: Indonesia.
Novo Nordisk Annual Report 2023 Introducing Novo Nordisk
Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
104
Sustainability frameworks and performance
We strive to follow and adhere to international standards, recommendations and commitments set by globally
recognised entities. We are also regularly assessed by independent organisations on our ESG performance. This
table compiles some of the most relevant standards, recommendations and commitments we adhere to, as well as
assessments we receive.
Agenda
Name
Type
Description
Scale
Result
Comment
Value Reporting Foundation (VRF)
Standard
The VRF (previously known as Sustainability Accounting Standards Board, and now part of the IFRS Foundation)
enables organisations to provide industry-based disclosures on sustainability risks and opportunities affecting cash
flows, access to finance or cost of capital in short, medium or long term.
N/A
N/A
Novo Nordisk reports on VRF in alignment with the ‘Biotechnology & Pharmaceuticals’ standard. We are
fully or partially aligned with all the 25 indicators required by VRF.
UN Sustainable Development Goals
(UN SDGs)
Commitment
The UN SDGs are a set of 17 goals and 169 targets designed to achieve a sustainable future by 2030. The goals
cover a range of issues, including poverty, inequality, climate change and environmental sustainability.
N/A
N/A
UN Global Compact (UNGC)
Ten Principles
Commitment
The UNGC requires companies to align strategies and operations with universal principles on human rights, labour,
environment and anti-corruption, and to take actions that advance societal goals.
N/A
N/A
Morgan Stanley Capital International
(MSCI) ESG Ratings
Assessment
The MSCI ESG Ratings measure an organisation's resilience to financially material ESG risks. They assess how
companies manage risks compared to their peers, using a customised methodology to identify industry leaders and
laggards.
CCC-AAA
AAA
Novo Nordisk uses SDGs to step up sustainability, drive zero environmental impact by 2030 and improve
healthcare for more people. The priority SDGs are Goal 3 (Good health and wellbeing) and Goal 12
(Responsible consumption and production).
Novo Nordisk is committed to UNGC principles and has been an active participant since 2002. We submit
the ‘Communication on Progress’ focusing on governance, human rights, labour, environment and
anti-corruption on an annual basis.
Novo Nordisk maintained an AAA leadership ESG rating in line with the past six years, and is among the
top 5% of pharmaceutical peers, which comprises 267 companies.
Sustainalytics ESG Risk Ratings
Assessment
The Sustainalytics ESG Risk Ratings measure an organisation's exposure to industry-specific, material ESG risks as
well as risk management. Sustainalytics ESG Risk Ratings assess the ESG performance of more than 16,000
companies.
>40-0
23.1
Novo Nordisk ranked among the top 15% of the pharmaceutical industry group, with a ranking of 139 out
of 912, incurring an ESG risk rating of 23.1 (medium risk). Sustainalytics ESG Risk Ratings range from
severe (>40) to negligible (0-10) risk.
Standard & Poor's (S&P) Scores
Assessment
The S&P Global ESG Score measures ESG performance via disclosures, media analysis, modelling approaches and
company engagement. The S&P Corporate Sustainability Assessment (CSA) Score is the ESG Score without utilising
modelling approaches.
0-100
59 in ESG Score
53 in CSA Score
Novo Nordisk ranked in the 91st percentile within the pharma peer group with an ESG score of 59 and a
CSA score of 53.
Corporate Knights Global 100
Assessment
The Corporate Knights 19th annual ranking of the world’s 100 most sustainable corporations is based on an
assessment of over 6,000 public companies with revenue over USD 1 billion.
100-1
53
Novo Nordisk ranked 1st within Denmark in the ‘Pharmaceutical & Biotech Manufacturing Peer Group’,
2nd in the healthcare sector globally and 53rd in the overall rank.
Taskforce on Climate-related
Financial Disclosures (TCFD)
Standard
The TCFD establishes recommendations for disclosing comparable and consistent information on climate-related
aspects across organisations. TCFD is specifically focused on climate governance, strategy, risk management and
setting of metrics and targets.
N/A
N/A
Science Based Targets initiative (SBTi)
Standard
The SBTi defines best practice in emissions reduction and net zero targets aligned with climate sciences. It also
independently assesses and approves companies’ targets in accordance with its strict criteria.
N/A
N/A
Novo Nordisk integrates TCFD-recommended scenarios into its risk management: limiting temperature
increase below 2ºC, preferably 1.5ºC as per the Paris Agreement, and a 4ºC increase scenario as
high-emission alternative. We have assessed production sites on these scenarios and intend to assess the
entire supply chain going forward.
Novo Nordisk has an approved near-term 2030 target in line with the 1.5 °C requirement from SBTi.
Additionally, Novo Nordisk is committed to achieving net zero emissions by 2045, with an aim to be
aligned with SBTi’s net zero requirements.
Carbon Disclosure Project (CDP) Scores
Assessment
The CDP measures environmental performance through three disclosure stages: awareness, management and
leadership. The CDP Scores incentivise companies to measure and manage environmental impacts via climate
change and water security questionnaires.
D- to A
A in CDP Climate
A- in CDP Water
In 2022, Novo Nordisk maintained an A leadership ranking in CDP Climate and improved from a B to
an A- leadership ranking in CDP Water. Scores for the 2023 CDP Climate & Water will be available at:
www.cdp.net in February 2024.
UN Guiding Principles on Business and
Human Rights (UNGPs)
Commitment
The UNGPs comprise of guidelines for states and companies to prevent, address and remedy adverse impacts on
human rights in their business operations.
N/A
N/A
In accordance with the UNGPs, Novo Nordisk commits to the responsibility to respect human rights
throughout own operations and value chains, as elaborated in our Human Rights Commitment. In
adherence with the UN Guiding Principles Reporting Framework, Novo Nordisk annually publishes a
Human Rights Report which outlines our latest work towards meeting this responsibility. Please refer to:
www.novonordisk.com/sustainable-business/esg-portal/social.html.
Access To Medicine Foundation
(ATMI) Score
Assessment
The ATMI evaluates 20 of the world’s largest pharmaceutical companies on their performance on priority
access-to-medicine topics. Companies are assessed based on research and development, governance of access and
product delivery.
0-5
2.97
In 2022, Novo Nordisk ranked 11th, with the strongest performance in the governance of access area,
where a score of 4.43 out of 5 was achieved. ATMI will release updated ranking for top 20 companies in
2024.
World Economic Forum (WEF)
‘Good Work Framework’
Standard
The WEF ‘Good Work Framework’ sets out five objectives and goals: promote fair pay and social justice; provide
flexibility and protection; deliver on health and well-being; drive diversity, equity and inclusion; foster employability
and learning culture.
N/A
N/A
Novo Nordisk published a WEF ‘Good Work Framework’ case study in March 2023 titled ‘Making Inclusivity
a Reality’. It featured work practices and aspirational targets in D&I.
OECD Guidelines for Multinational
Enterprises on Responsible Business
Conduct (OECD Guidelines)
Recommendation
The OECD Guidelines are government-backed recommendations on responsible business conduct with the purpose
of fostering business contribution to sustainable development and addressing adverse impacts on people, planet
and society that stem from business activities.
N/A
N/A
Novo Nordisk adheres to the OECD Guidelines on a corporate level as part of our commitment to ethical
business conduct. We set expectations in line with the OECD Guidelines towards Novo Nordisk suppliers
by integrating the OECD Guidelines to our Responsible Sourcing Standards.
Novo Nordisk Annual Report 2023 Financial statements of the parent company 2023
The following pages comprise the financial statements of the parent company, the legal entity Novo Nordisk A/S. Apart from ownership of the subsidiaries in the
Novo Nordisk Group, activity within the parent company mainly comprises sales, research and development, production, corporate activities and support functions.
105
Balance sheet
At 31 December
Note
2023
2022
DKK million
Note
2023
2022
DKK million
Note
2023
2022
Income statement
For the year ended 31 December
DKK million
Net sales
Cost of goods sold
Gross profit
Sales and distribution costs
Research and development costs
Administrative costs
Other operating income and expenses
Operating profit
Profit in subsidiaries, net of tax
Financial income
Financial expenses
2
3
3
3
3
8
4
4
198,078
142,656
Assets
(38,433)
(31,060)
Intangible assets
159,645
111,596
Property, plant and equipment
(42,291)
(37,476)
Financial assets
(28,731)
(19,209)
Other receivables and prepayments
6
7
8
9
28,755
53,822
87,543
1,238
(2,002)
(2,135)
Total non-current assets
171,358
132,302
1,315
87,936
15,973
3,636
1,012
Raw materials
53,788
Work in progress
19,238
Finished goods
567
Inventories
(4,581)
(6,280)
Trade receivables
8,415
5,659
16,211
13,657
4,311
2,975
28,937
22,291
2,348
1,877
Profit before income taxes
102,964
67,313
Amounts owed by affiliated companies
30,398
18,192
Income taxes
Net profit
(19,557)
(11,975)
Tax receivables
8
83,407
55,338
Other receivables and prepayments
9
5,494
Receivables
Marketable securities
38,248
15,838
Derivative financial instruments
11
2,344
Cash at bank
Total current assets
Total assets
Equity and liabilities
19,449
Share capital
10
451
456
34,547
Net revaluation reserve
78,306
Development costs reserve
—
Reserve for cash flow hedges and exchange
rate adjustments
Retained earnings
Total equity
Borrowings
Deferred income tax liabilities
Other provisions
Total non-current liabilities
Borrowings
Derivative financial instruments
Trade payables
24,696
17,785
1,756
1,524
1,594
77,185
105,682
16,855
6,282
1,280
1,045
62,091
82,901
21,199
2,967
1,303
24,417
25,469
5,072
1,272
6,778
169
2,903
4,782
12
5
13
12
11
7
3,185
23,261
10,921
2,727
9,795
68,995
10,623
95,990
267,348
201,297
Amounts owed to affiliated companies
108,865
74,059
Tax payables
Other liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
3,046
12,216
3,115
7,899
137,249
92,927
161,666
118,396
267,348
201,297
Financial statements of the parent companyNovo Nordisk Annual Report 2023 Equity statement
DKK million
Share
capital
Net
revaluation
reserve
Reserve for cash
flow hedges and
exchange rate
adjustments
Development
costs reserve
Retained
earnings
2023
2022
Refer to note 4.3 in the consolidated financial statements for details on the number of
shares, treasury shares and total number of A and B shares in Novo Nordisk A/S.
Balance at the beginning of the year
456
17,785
1,045
1,524
62,091
82,901
70,469
106
Appropriated from net profit
Appropriated from net profit to net revaluation reserve
Exchange rate adjustments of investments in subsidiaries
8,304
(1,393)
Realisation of previously deferred (gains)/losses on cash flow hedges
Deferred gains/(losses) on cash flow hedges incurred during the period
(998)
1,547
Development costs
Other adjustments
Transactions with owners:
Total dividend for the year
Interim dividends paid during the year
Dividends paid for prior year
Reduction of the B share capital
Purchase of treasury shares
Share-based payments (note 3)
Tax related to restricted stock units
Balance at the end of the year
Proposed appropriation of net profit:
Interim dividend for the year
Final dividend for the year
Appropriated to net revaluation reserve
Transferred to retained earnings
Distribution of net profit
33,116
33,116
8,304
(1,393)
(998)
1,547
—
1,284
232
(232)
1,284
41,987
41,987
(13,430)
(13,430)
29,532
(2,144)
2,291
1,610
998
—
976
27,950
(9,613)
(18,337)
(18,337)
(15,690)
5
—
—
(29,924)
(29,924)
(24,086)
562
63
562
63
433
175
(5)
451
24,696
1,594
1,756
77,185
105,682
82,901
13,430
28,557
8,304
33,116
83,407
9,613
18,337
(2,144)
29,532
55,338
Financial statements of the parent companyNovo Nordisk Annual Report 2023 Tax
For Danish tax purposes, the parent company is assessed jointly with its Danish
subsidiaries. The Danish jointly taxed companies are included in a Danish on-account
tax payment scheme for Danish corporate income tax. All current taxes under the
scheme are recorded in the individual companies. Novo Nordisk A/S and its jointly
taxed subsidiaries are included in the joint taxation of the parent company, Novo
Holdings A/S.
3 Employee costs
DKK million
Wages and salaries
Share-based payment costs
Pensions
Other social security contributions
107
2023
2022
19,525
14,656
562
1,709
301
1,039
23,136
23,754
26,111
433
1,281
247
629
17,246
19,201
20,926
2023
2022
Other employee costs
Total employee costs
197,969
142,413
Average number of full-time employees
109
243
Year-end number of full-time employees
For information regarding remuneration to the Board of Directors and Executive
Management, refer to note 2.4 to the consolidated financial statements.
198,078
142,656
124,860
79,953
40,038
12,800
20,380
32,789
14,412
15,502
198,078
142,656
Sales are attributed to a geographical segment based on location of the customer.
For definitions of segments, refer to note 2.2 in the consolidated financial statements.
Refer to note 5.7 in the consolidated financial statements for an overview of
companies in the Novo Nordisk Group based on geographical areas.
Notes
1 Accounting policies
The financial statements of the parent company have been prepared in accordance
with the Danish Financial Statements Act (Class D) and other accounting regulations
for companies listed on Nasdaq Copenhagen.
The accounting policies for the financial statements of the parent company are
unchanged from the previous financial year. The accounting policies are the same as
for the consolidated financial statements with the adjustments described below. For a
description of the accounting policies of the Group, refer to the consolidated financial
statements.
No separate statement of cash flows has been prepared for the parent company; refer
to the statement of cash flows for the Group.
Supplementary accounting policies for the parent company
Intangible assets
Goodwill recognised in subsidiaries is amortised over 23 years, which reflects the
useful life of the underlying assets and activities generating the goodwill.
Financial assets
In the financial statements of the parent company, investments in subsidiaries and
associated companies are recorded under the equity method, using the respective
share of the net asset values in subsidiaries and associated companies. The equity
method is used as a measurement method rather than a consolidation method.
The net profit of subsidiaries and associated companies less unrealised intra-group
profits and amortisation of goodwill is recorded in the income statement of the parent
company. To the extent that net profit exceeds declared dividends from such companies,
the net revaluation of investments in subsidiaries and associated companies is
transferred to net revaluation reserve under equity according to the equity method.
Profits in subsidiaries and associated companies are disclosed as profit after tax.
Amounts owed by affiliates, where settlement is neither planned nor likely within
the foreseeable future, are treated as part of net-investments in subsidiaries, with
exchange rate adjustments recognised directly in equity through reserve for cash
flow hedges and exchange rate adjustments.
2 Sales
DKK million
Sales by business segment
Diabetes and Obesity care
Rare disease
Total sales
Sales by geographical segment
North America Operations
International Operations:
EMEA
China
Rest of World
Total sales
Financial statements of the parent companyNovo Nordisk Annual Report 2023 108
Intellectual
property rights
Software
and other
intangibles
20,167
11,347
—
31,514
2,672
840
1,499
—
5,011
26,503
3,653
490
—
4,143
1,699
171
21
—
1,891
2,252
2023
23,820
11,837
—
35,657
4,371
1,011
1,520
—
6,902
28,755
2022
12,572
11,399
(151)
23,820
3,462
810
250
(151)
4,371
19,449
Intangible assets primarily relate to intellectual property rights, internally developed software and costs related to major IT projects. Intangible assets which are not yet available
for use amount to DKK 19,993 million (DKK 10,007 million in 2022).
365
170
—
—
—
32
Cost at the beginning of the year
Additions during the year
Disposals during the year
Cost at the end of the year
Amortisation at the beginning of the year
Amortisation during the year
567
Impairment losses for the year
1,150
Amortisation and impairment losses reversed on disposals during the year
4
Amortisation at the end of the year
Carrying amount at the end of the year
4 Financial income and financial expenses
6 Intangible assets
DKK million
2023
2022
DKK million
Interest income relating to subsidiaries
Interest income relating to external counterparties
Foreign exchange gain (net)
Financial gain from forward contracts (net)
Capital gain from marketable securities
Other financial income
Total financial income
Interest expenses relating to subsidiaries
Result of associated company
Foreign exchange loss (net)
Financial loss from forward contracts (net)
Capital loss from marketable securities
Other financial expenses
Total financial expenses
5 Deferred income tax assets/(liabilities)
487
936
772
1,263
144
34
3,636
4,225
38
—
—
—
318
4,581
2,705
1,659
463
299
6,280
DKK million
2023
2022
Net deferred tax asset/(liability) at the beginning
of the year
Income/(charge) to the income statement
Income/(charge) to equity
Net deferred tax asset/(liability)
at the end of the year
(2,967)
(2,797)
(518)
228
(2,629)
(566)
(6,282)
(2,967)
The Danish corporate tax rate is 22% in 2023 (22% in 2022).
Financial statements of the parent companyNovo Nordisk Annual Report 2023 109
7 Property, plant and equipment
DKK million
Cost at the beginning of the year
Additions during the year
Disposals during the year
Transfer from/(to) other items
Cost at the end of the year
Depreciation and impairment losses at the beginning of the year
Depreciation for the year
Impairment losses for the year
Depreciation reversed on disposals during the year
Depreciation and impairment losses at the end of the year
Carrying amount at the end of the year
Of which related to leased property, plant and equipment
Land and
buildings
Plant and
machinery
Other
equipment
Assets under
construction
2023
23,801
25,384
4,489
12,018
65,692
822
(330)
597
219
(849)
800
24,890
25,554
11,328
16,918
1,142
1,180
5
(326)
67
(855)
12,149
17,310
12,741
8,244
1,011
—
150
(266)
509
4,882
2,899
426
21
(276)
3,070
1,812
72
21,229
22,420
(316)
(1,761)
(1,906)
—
31,025
86,351
—
—
316
31,145
2,748
409
(316)
(1,773)
—
32,529
31,025
53,822
—
1,083
2022
55,995
10,223
(526)
—
65,692
28,988
2,597
36
(476)
31,145
34,547
580
Leased property, plant and equipment primarily relates to lease of office buildings, warehouses, laboratories and vehicles.
Financial statements of the parent companyNovo Nordisk Annual Report 2023 8 Financial assets
DKK million
Cost at the beginning of the year
Investments during the year
Divestments and repayments during the year
Cost at the end of the year
Value adjustments at the beginning of the year
Profit/(loss) before tax
Share of result after tax in associated company
Income taxes on profit for the year
Market value adjustment
Dividends received
Divestments during the year
110
9 Other receivables and prepayments
Other receivables and prepayments includes prepayments of DKK 5,375 million,
primarily related to prepaid contract manufacturing and R&D activities
10 Share capital
For information on share capital, refer to note 4.3 to the consolidated financial
statements.
11 Derivatives
For information on derivative financial instruments, refer to note 4.5 to the consolidat-
ed financial statements. All derivatives in the group are entered into with Novo Nordisk
A/S as the counterpart.
Investments in
subsidiaries
Amounts owed
by affiliated
companies
Investment in
associated
company
Other
securities and
investments
4,975
800
(3,328)
2,447
292
105
105
90
(38)
54,660
5,170
(29)
59,801
34,407
18,112
(1,332)
(9,127)
29
2023
2022
60,497
53,987
757
124
(63)
818
6,094
(3,420)
63,171
(268)
34,521
18,112
(38)
6,697
(187)
60,497
35,933
19,713
(4)
(1,332)
(1,596)
(6)
(6)
(135)
(9,127)
(23,305)
12 Borrowings
Effect of exchange rate adjustment charged to the income statement
(271)
Effect of exchange rate adjustment charged to equity
Other adjustments
Value adjustments at the end of the year
Unrealised internal profit at the beginning of the year
Unrealised internal profit movements in the year
Effect of exchange rate adjustment charged to equity
Unrealised internal profit at the end of the year
Carrying amount at the end of the year
(2,285)
1,467
41,271
(16,712)
(807)
892
(16,627)
84,445
For a list of companies in the Novo Nordisk Group, refer to note 5.7 to the consolidated financial statements.
25
(96)
54
(367)
(2,285)
1,467
—
220
1,768
1,927
DKK million
Within 1 year
1-5 years
More than 5 years
Total borrowings
2023
5,072
2022
169
12,889
12,627
3,966
8,572
21,927
21,368
21
52
(345)
40,999
34,521
(16,712)
(18,356)
(807)
892
1,121
523
Borrowings mainly consist of loans from Novo Nordisk Finance (Netherlands) B.V.
related to issuance of Eurobonds.
—
2,468
—
157
—
(16,627)
(16,712)
473
87,543
78,306
Financial statements of the parent companyNovo Nordisk Annual Report 2023 111
2023
2022
804
18,448
25,218
11,780
95
11,778
6,727
7,746
13 Other provisions
16 Commitments and contingencies
Provisions for pending litigations are recognised as other provisions. For information
on pending litigations, refer to note 3.5 to the consolidated financial statements.
Furthermore, as part of normal business Novo Nordisk issues credit notes for expired
goods. Consequently, a provision for future returns is made, based on historical
product return statistics.
DKK million
Commitments
Leases1
14 Related party transactions
For information on transactions with related parties, refer to note 5.4 to the
consolidated financial statements.
The parent company’s share of services provided by NNIT Group amounts to DKK 327
million (DKK 578 million in 2022).
Novo Nordisk A/S is included in the consolidated financial statements of the Novo
Nordisk Foundation.
15 Fee to statutory auditors
DKK million
Statutory audit1
Audit-related services
Tax advisory services
Other services
Total fee to statutory auditors
1. 2022 statutory audit fee includes DKK 6 million of additional fee related to 2021.
2023
9
2
4
15
30
2022
15
2
1
9
27
Research and development obligations
Research and development - potential milestones2
Commercial product launch - potential milestones2
Purchase obligations relating to investments in property
plant and equipment
1,072
232
Purchase obligation relating to contract manufactures
33,107
13,362
Other purchase obligations
Guarantees given for subsidiaries3
Other guarantees
2,742
2,533
35,608
31,858
993
127
1. Lease commitments predominantly relate to estimated variable property taxes and low value assets.
2. Potential milestone payments are associated with uncertainty as they are linked to successful achievements
in research activities; refer to note 5.2 to the consolidated financial statements. 3. Guarantees given for
subsidiaries mainly relate to guarantees towards Novo Nordisk Finance (Netherlands) B.V. related to issuance
of Eurobonds.
Novo Nordisk A/S and its Danish subsidiaries are jointly taxed with the Danish
companies in Novo Holdings A/S. The joint taxation also covers withholding taxes in
the form of dividend tax, royalty tax and interest tax. The Danish companies are jointly
and severally liable for the joint taxation. Any subsequent adjustments to income taxes
and withholding taxes may lead to a larger liability. The tax for the individual
companies is allocated in full on the basis of the expected taxable income.
For information on pending litigation and other contingencies, refer to notes 3.5 and
5.2 to the consolidated financial statements.
Financial statements of the parent companyNovo Nordisk Annual Report 2023 Novo Nordisk A/S – Novo Alle 1, 2880 Bagsværd, Denmark – CVR no. 24256790
+45 4444 8888 (switchboard), novonordisk.com