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Finansforeningens Virksomhedsdag
4 June 2015
Mexico City – part of Cities Changing Diabetes
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Agenda
1. Novo Nordisk at a glance
2. Highlights from the first three months of 2015
Finansforeningens Virksomhedsdag
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Forward-looking statements
Novo Nordisk’s reports filed with or furnished to the US Securities and Exchange Commission (SEC), including this document as well as the company’s Annual Report 2014 and Form 20-F, both filed with the SEC in February 2015, and written information released, or oral statements made, to the public in the future by or on behalf of Novo Nordisk, may contain forward-looking statements. Words such as ‘believe’, ‘expect’, ‘may’, ‘will’, ‘plan’, ‘strategy’, ‘prospect’, ‘foresee’, ‘estimate’, ‘project’, ‘anticipate’, ‘can’, ‘intend’, ‘target’ and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward-looking statements. Examples of such forward-looking statements include, but are not limited to:
• Statements of targets, plans, objectives or goals for future operations, including those related to Novo Nordisk’s products, product research, product development, product introductions and product approvals as well as cooperation in relation thereto
• Statements containing projections of or targets for revenues, costs, income (or loss), earnings per share, capital expenditures, dividends, capital structure, net financials and other financial measures
• Statements regarding future economic performance, future actions and outcome of contingencies such as legal proceedings, and
• Statements regarding the assumptions underlying or relating to such statements.
These statements are based on current plans, estimates and projections. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific. Novo Nordisk cautions that a number of important factors, including those described in this document, could cause actual results to differ materially from those contemplated in any forward-looking statements.
Factors that may affect future results include, but are not limited to, global as well as local political and economic conditions, including interest rate and currency exchange rate fluctuations, delay or failure of projects related to research and/or development, unplanned loss of patents, interruptions of supplies and production, product recall, unexpected contract breaches or terminations, government-mandated or market-driven price decreases for Novo Nordisk’s products, introduction of competing products, reliance on information technology, Novo Nordisk’s ability to successfully market current and new products, exposure to product liability and legal proceedings and investigations, changes in governmental laws and related interpretation thereof, including on reimbursement, intellectual property protection and regulatory controls on testing, approval, manufacturing and marketing, perceived or actual failure to adhere to ethical marketing practices, investments in and divestitures of domestic and foreign companies, unexpected growth in costs and expenses, failure to recruit and retain the right employees, and failure to maintain a culture of compliance.
Please also refer to the overview of risk factors in ‘Be aware of the risk’ on p 42-43 of the Annual Report 2014 on the company’s website novonordisk.com.
Unless required by law, Novo Nordisk is under no duty and undertakes no obligation to update or revise any forward-looking statement after the distribution of this document, whether as a result of new information, future events or otherwise.
Important drug information
• Victoza® (liraglutide 1.2 mg & 1.8 mg) is approved for the management of type 2 diabetes only
• Saxenda® (liraglutide 3 mg) is approved in the US and EU for the treatment of obesity only
Finansforeningens Virksomhedsdag
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Novo Nordisk works with four strategic focus areas based on five core capabilities
Core capabilities
Expand leadership
Expand leadership in DIABETES
Pursue leadership in HAEMOPHILIA
Establish presence in OBESITY
Expand leadership in GROWTH DISORDERS
Strategic focus areas
The Novo Nordisk Way
Engineering, formulating, developing and delivering protein- based treatments
Deep disease under- standing
Efficient large-scale production of proteins
Building and maintaining a leading position in emerging markets
Planning and executing global launches of new products
Finansforeningens Virksomhedsdag
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The number of people with diabetes according to IDF
Double digit top line growth driven by diabetes pandemic
0
100
200
300
400
500
600
Note: 20-79 age group 1 CAGR for 14-year period Source: International Diabetes Federation: Diabetes Atlas, 2000 and 2014
Million people
2000 2014 2035E
151
387
215
99
34 29
CAGR1: 7.0%
592
10
355
146
45 33
13
Europe North America Japan & Korea
International Operations China
Diagnosis and optimal treatment remains a challenge – the rule of halves
All people with diabetes
50% are diagnosed
50% have access to care
50% get decent care
100%
50%
25%
12%
50% reach target
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0%
10%
20%
30%
2005 20140%
10%
20%
30%
2005 2014
Sales growth in local currencies 2005–2014
Operating profit growth in local currencies 2005–2014
Novo Nordisk has delivered sustained double digit growth throughout the last decade
Note: Numbers for 2007 and 2008 are adjusted for the impact of the discontinuation of pulmonary insulin projects
12%
Sales growth Average growth Operating profit growth Average growth
19%
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0
50
100
150
200
250
300
0%
10%
20%
30%
1CAGR for 10-year period Source: IMS Monthly MAT value figures
Global diabetes care market by treatment class
Global diabetes care value market share
Novo Nordisk has a strong leadership position within the growing diabetes care market
Source: IMS Monthly MAT value figures
Feb 2005
Feb 2015
27%
GSK
Merck Eli Lilly Sanofi
Takeda
Novo Nordisk
AstraZeneca Novartis
DKK billion
OAD Insulin GLP-1
Total market: CAGR1 12.9%
CAGR1 16.6%
Injectables: CAGR1 18.0%
CAGR1 7.7
Feb 2005
Feb 2015
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0%
10%
20%
30%
40%
50%
60%
Global insulin market Global modern insulin1 volume market shares
Strong underlying insulin market growth and steady market share development
1 Includes new generation insulin. 2 CAGR for 5-year period Note: US trend data reflect changes to IMS data collection coverage and methodology as of Jan 2012 Source: IMS Monthly MAT volume and value (DKK) figures
1 Includes new generation insulin Note: US trend data reflect changes to IMS data collection coverage and methodology as of Jan 2012, does not add up to 100% due to other players Source: IMS Monthly MAT volume figures
Feb 2015
Feb 2010
Feb 2015
Eli Lilly Novo Nordisk Sanofi
0%
20%
40%
60%
80%
100%
0
100
200
300
400
500
Modern insulin1
Human insulin
tMU Penetration
Device penetration Modern insulin penetration1
CAGR volume2: 5.6% CAGR value2: 18.4% 45%
35%
19%
Feb 2010
Finansforeningens Virksomhedsdag
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Agenda
1. Novo Nordisk at a glance
2. Highlights from the first three months of 2015
Finansforeningens Virksomhedsdag
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Highlights – first three months of 2015
Sales development • Sales increased by 24% in Danish kroner and 9% in local currencies
• North America, International Operations and Region China grew by 34%, 22% and 31% in Danish kroner, respectively • Levemir® increased by 31% in Danish kroner and continues to capture market share in the US • Victoza® increased by 36% in Danish kroner and continues to drive the growth of the GLP-1 market
• Tresiba® continues to perform well in countries with similar reimbursement as insulin glargine
Research and Development • Tresiba® and Ryzodeg® resubmitted to the US FDA in March and accepted for review in April • Final two phase 3a trials comparing faster-acting insulin aspart with NovoRapid® successfully completed • Positive results for phase 2 trial with oral semaglutide in people with type 2 diabetes • Saxenda® approved in Europe for the treatment of obesity
Financials • Operating profit growth of 73% in Danish kroner; adjusted for partial NNIT divestment the growth was 17% in local currency • Diluted earnings per share increased 56% to 3.79 DKK per share and 3.02 DKK when adjusted for partial divestment of NNIT
2015 financial outlook: • Sales growth is now expected to be 7-9% in local currencies (around 16% higher as reported) • Operating profit growth is now expected around 17% in local currencies (around 25% higher as reported)
• 2015 share repurchase programme increased to DKK 17.5 billion primarily reflecting partial divestment of NNIT
Finansforeningens Virksomhedsdag
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Changes to Executive Management
President & CEO Lars Rebien Sørensen
EVP Chief Financial
Officer
Jesper Brandgaard
Jakob Riis
EVP China, Pacific &
Marketing
Mads Krogsgaard Thomsen
EVP Chief Science
Officer
Lars Fruergaard Jørgensen
EVP Corporate
Development
EVP Europe
Jerzy Gruhn
EVP Product Supply
Henrik Wulff
EVP International Operations
Maziar Mike Doustdar
EVP US
Jesper Høiland
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Growth analysis – First three months of 2015
North America is the main contributor to growth
Sales as reported – First three months of 2015
Local currencies Growth Share of growth
North America 11% 56%
Europe 5% 11%
International Operations 12% 20%
Region China 11% 13%
Japan & Korea 0% 0%
Total sales 9% 100%
International Operations
+22%
Region China +31%
Japan & Korea +6%
North America +34%
Europe +6%
49%
20%
15%
11%
5%
Sales of DKK 25.2 billion (+24%)
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Local currencies Growth Share of growth
New-generation insulin n/a 10%
Modern insulin 8% 39%
Human insulin 0% 0%
Victoza® 18% 28%
Other diabetes care1 6% 3%
Diabetes care 9% 80%
Haemophilia2 6% 8%
Norditropin® 9% 7%
Other biopharmaceuticals 14% 5%
Biopharmaceuticals 8% 20%
Total 9% 100%
Growth is driven by modern insulin and Victoza®
Sales as reported – first three months of 2015 Growth analysis – first three months of 2015
1 Includes protein related products and OAD
2 Includes NovoSeven®, NovoEight® and NovoThirteen®
Other +30%
7% Haemophilia
+21% 11%
Diabetes care +24%
79%
3%
79%
11%
7% 3%
Norditropin®
+22%
Sales of DKK 25.2 billion (+24%)
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64%
3%
2%
30%
0%
20%
40%
60%
80%
100%
Source: IMS NPA MAT, Feb 2015
US GLP-1 market development
Source: IMS NPA MAT, Feb 2015
Victoza® maintains leadership in the US GLP-1 market
Feb 2015
Feb 2012
Feb 2012
Total TRx Growth rate
0%
5%
10%
15%
20%
25%
0
1,000
2,000
3,000
4,000
5,000
Thousands
US GLP-1 market shares
exenatide Victoza®
albiglutide dulaglutide
Feb 2015
MAT GLP-1 TRx (000)
GLP-1 TRx market share
MAT volume growth rate
Finansforeningens Virksomhedsdag
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Levemir® market share and device penetration in the US modern basal insulin segment
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Note: Reported sales first three months of 2015
Levemir® sales growth driven by strong performance in North America
North America drives strong Levemir® performance aided by continued market share gains in the US
68%
North America
Europe IO China Japan & Korea
DKK billion
21%
Growth in local currency
0% 6%
15% -31%
0%
5%
10%
15%
20%
25%
30%
30%
40%
50%
60%
70%
80%
Feb 2015
Market share
Feb 2014
Feb 2013
Feb 2012
Device penetration
0%
Levemir® market share Levemir® device penetration
Source: IMS MAT volume figures
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Key launch observations Tresiba® value share of basal insulin segment
in selected countries
Roll-out of degludec portfolio progressing well
Note: Limited IMS coverage in India Source: IMS Monthly value figures, Feb 2015
Months from launch
• Tresiba® launched in 27 countries, recently in Colombia, Libya, Finland and the United Arab Emirates
• Tresiba® has shown solid penetration in markets with similar reimbursement as insulin glargine
• Penetration of Tresiba® remains modest in markets with restricted market access compared to insulin glargine
• Ryzodeg® commercially launched in Mexico and India, and now also in Bangladesh
• Xultophy® launched in Switzerland as first country
15%
27%
27%
13%
8% 3%
2%
7%
8%
4%
0% 0%
5%
10%
15%
20%
25%
30%
1 3 5 7 9 11 13 15 17 19 21 23 25
Mexico
Switzerland
Japan India Sweden Denmark
Germany Argentina Brazil Netherlands
United Kingdom
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DKK million Q1 2015 Q1 2014 Change Sales 25,200 20,343 24% Gross profit 21,326 16,877 26% Gross margin 84.6% 83.0%
Sales and distribution costs 6,147 5,086 21% Percentage of sales 24.4% 25.0%
Research and development costs 3,250 3,168 3% Percentage of sales 12.9% 15.6%
Administration costs 854 805 6% Percentage of sales 3.4% 4.0%
Other operating income, net 2,782 215 N/A Hereof non-recurring income from the IPO of NNIT 2,376
Operating profit 13,857 8,033 73% Net financials (1,372) 268 N/A Profit before income tax 12,485 8,301 50% Tax 2,609 1,843 42% Effective tax rate 20.9% 22.2%
Net profit 9,876 6,458 53% Diluted earnings per share (DKK) 3.79 2.43 56% Diluted earnings per share (DKK) adjusted for NNIT IPO 3.02 2.43 24%
Financial results – first three months of 2015
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6 8 10 12 13
12 12
14 15 15
2.5
0
5
10
15
20
25
30
35
2011 2012 2013 2014 2015E
Annual cash return to shareholders Share repurchase programmes have enabled
continued reduction in share capital
Organic growth enables steady cash return to shareholders via dividends and share repurchase programmes
1 Based on improved outlook for free cash flow generation primarily related to partial divestment of NNIT
Note: Dividends are allocated to the year of dividend pay. For 2015 expected free cash flow is DKK 32-34 billion. Share repurchase programmes run for 12 months starting February until end January of the following year
580 560 550 530 520
300
350
400
450
500
550
600
2011 2012 2013 2014 2015
DKK billion
DKK million
0
Share capital CAGR -2.7%
-3% -2%
-4% -2%
Share repurchase Dividend Free cash flow
Expanded share repurchase1
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Source: IMS MAT Feb 2015 volume and value (DKK) figures
Solid market performance Promising pipeline
Closing remarks
> > • The only company with a full portfolio of novel
insulin products
• GLP-1 portfolio offers expansion opportunity within type 1 and 2 diabetes
• Xultophy® supports promising outlook for insulin and GLP-1 combination therapy
• Saxenda® holds potential within obesity
• Promising pipeline within haemophilia and growth hormone disorders
• ≥10% annual diabetes care market growth driven by diabetes prevalence
• 27% market share in diabetes care and solid leadership position
• 47% insulin volume market share with leadership position across all regions
• 45% modern and new-generation insulin volume c market share
• 69% GLP-1 value market share with strong global leadership position
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Share information Investor Relations contacts
Investor contact information
Novo Nordisk’s B shares are listed on the stock exchange in Copenhagen under the symbol ‘NOVO B’. Its ADRs are listed on the New York Stock Exchange under the symbol ‘NVO’. For further company information, visit Novo Nordisk on the internet at: novonordisk.com
Kasper Roseeuw Poulsen +45 3079 4303 [email protected]
Daniel Bohsen +45 3079 6376 [email protected]
Melanie Raouzeos +45 3075 3479 [email protected]
In North America:
Frank Daniel Mersebach
+1 609 235 8567
Novo Nordisk A/S Investor Relations Novo Allé, DK-2880 Bagsværd
07 Jun 2015 Investor and analyst event in connection with ADA
06 Aug 2015 Financial statement for the first six months of 2015
29 Oct 2015 Financial statement for the first nine months of 2015
03 Feb 2016 Financial statement for 2015
Upcoming events
Finansforeningens Virksomhedsdag
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Backup
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Significant news flow from late-stage diabetes and obesity pipeline
Note: Indicated timeline as of financial release of first three months of 2015 on 30 Apr
Project Past 3 months Within 3 months In ~3-6 months In ~6-9 months
Oral GLP-1 Phase 2
Tresiba®
Faster-acting insulin aspart
LATIN T1D ADJUNCT TWO™
ADJUNCT ONE™
Results available
In ~9-12 months
Semaglutide
SUSTAIN™ 1
SUSTAIN™ 3
SUSTAIN™ 2
SUSTAIN™ 4
SUSTAIN™ 5
Victoza®
SUSTAIN™ 6
LEADER™
Saxenda® SCALE™ extension data
US resubmission √
onset® 2 √
onset® 1 √
√
SWITCH 1
SWITCH 2
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Financial outlook for 2015
The financial outlook is based on an assumption of a continuation of the current business environment and given the current scope of business activities and has been prepared assuming that currency exchange rates remain at the level as of 27 Apr 2015
Sales growth - local currencies
Sales growth - reported
Operating profit growth - local currencies
Operating profit growth - reported
Net financials
Effective tax rate
Capital expenditure
Free cash flow
Expectations 30 Apr 2015
7-9%
Around 16 percentage points higher
Around 17%
Around 25 percentage points higher
Loss of around DKK 6 billion
Around 21%
Around DKK 5.0 billion
Around DKK 3.0 billion
Around DKK 32-34 billion
Previous expectations 30 Jan 2015
Depreciation, amortisation and impairment losses
6-9%
Around 12 percentage points higher
Around 10%
Around 19 percentage points higher
Loss of around DKK 5 billion
Around 22%
Around DKK 5.0 billion
Around DKK 3.0 billion
Around DKK 29-31 billion
Finansforeningens Virksomhedsdag
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