Novo Nordisk Financial Results 1994.NEW YORK--(BUSINESS WIRE)--March 8, 1995-- - Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: sales increased by 11% to DKK DKK In currencies, this is the abbreviation for the Danish Krone. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 13,524 million. - Health Care Business sales up by 12%. - Enzyme enzyme, biological catalyst. The term enzyme comes from zymosis, the Greek word for fermentation, a process accomplished by yeast cells and long known to the brewing industry, which occupied the attention of many 19th-century chemists. Business sales up by 8%. - Other businesses sales up by 11%. - Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased by 6% to DKK 2,050 million. - Income before tax was in line with expectations and increased by 4% to DKK 1,932 million. - Net income was DKK 1,432 million, level with that of 1993. - Capital expenditure for fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → amounted to DKK 1,738 million. - Return on stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. was 11.4%. Novo Nordisk Wikipedia is not the place for advertisement or self-advertising. Novo Nordisk (, NYSE: NVO) manufactures and markets pharmaceutical products and services. Founded in Denmark in 1923, the company has since become a world leader in diabetes care with the broadest Financial Results 1994 (Amounts in DKK million, except earnings per share/ADS, number of shares outstanding and number of employees) Change 93-94 1994 1993 1992 1991 1990 % Net turnover 13,524 12,163 10,699 9,361 8,066 11 Operating income 2,050 1,937 1,677 1,401 1,054 6 Net financials (118) (71) -- 59 85 66 Income before tax 1,932 1,866 1,677 1,460 1,138 4 Taxation 500 440 401 531 378 14 Net income 1,432 1,426 1,276 928 760(a) -- Stockholders' equity 13,136 11,914 10,584 9,484 7,034 10 Total assets 21,137 19,176 16,821 15,246 12,510 10 R&D expenditure 1,896 1,669 1,522 1,347 1,195 14 Depreciation 1,055 797 695 591 521 32 Expenditures for property, plant and equipment (net) 1,738 2,392 1,957 1,348 1,172 (27) Average number of employees 12,448 11,191 10,180 9,185 8,412 11 Earnings per share 38.17 38.01 34.12 27.02 24.05(b) -- Earnings per ADS(c) 9.54 9.50 8.53 6.76 6.01(b) -- Average number of shares outstanding (million)(d) 37.5 37.5 37.4 34.4 31.6 --
As from 1994 the company has changed its method for valuation of
inventories by including direct labor costs; formerly, only direct
materials and energy were included.
(a) Exclusive of extraordinary items amounting to DKK 18 million.
(b) Inclusive of extraordinary items, earnings per share amounted
to DKK 24.62 (DKK 6.16 per ADS).
(c) Effective April 18, 1994, the ratio of Novo Nordisk's B
shares to ADSs was changed to 1:4 - one B share representing four
ADSs.
(d) The average number of shares outstanding calculated as a
weighted average without adjustment factor.
Novo Nordisk Financial Results 1994 (Amounts in USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. million, except earnings per share/ADS, number of shares outstanding and number of employees) (Translated for convenience at the December December: see month. 31, 1994 exchange rate of USD 1.00 = DKK 6.083) Change 93-94 1994 1993 1992 1991 1990 % Net turnover 2,223 2,000 1,759 1,539 1,326 11 Operating income 337 318 276 230 173 6 Net financials (19) (11) 0 10 14 66 Income before tax 318 307 276 240 187 4 Taxation 83 73 66 87 62 14 Net income 235 234 210 153 125(a) -- Stockholders' equity 2,160 1,959 1,740 1,559 1,156 10 Total assets 3,475 3,152 2,765 2,506 2,057 10 R&D expenditure 312 274 250 221 196 14 Depreciation 174 131 114 97 86 32 Expenditures for property, plant and equipment (net) 286 393 322 222 193 (27) Average number of employees 12,448 11,191 10,180 9,185 8,412 11 Earnings per share 6.27 6.25 5.61 4.44 3.95(b) -- Earnings per ADS(c) 1.57 1.56 1.40 1.11 0.99(b) -- Average number of shares outstanding (million)(d) 37.5 37.5 37.4 34.4 31.6 --
As from 1994 the company has changed its inventory valuation
method by including direct labor costs; formerly, only direct
materials and energy were included.
(a) Exclusive of extraordinary items amounting to USD 3 million.
(b) Inclusive of extraordinary items, earnings per share amounted
to USD 4.05 (USD 1.01 per ADS)
(c) Effective April 18, 1994, the ratio of Novo Nordisk's B
shares to ADSs was changed to 1:4 - one B share representing four
ADSs.
(d) The average number of shares outstanding calculated as a
weighted average without adjustment factor
The Novo Nordisk Group 1994
Income before tax was DKK 1,932 million, an increase of 4%
compared with 1993. Net income was DKK 1,432 million, level with
that of 1993. Return on stockholders' equity was 11.4%.
Consolidated sales rose to DKK 13,524 million in 1994 from DKK
12,163 million in 1993, an increase of 11%. Sales of Health Care
Business and of Enzyme Business increased by 12% and 8%,
respectively, compared with 1993. For other businesses, sales were
11% higher in 1994 than in 1993.
The increase in consolidated sales was almost exclusively
attributable to larger volumes sold and product mix improvements.
The weighted average value of Novo Nordisk's invoicing currencies in
1994 was 0.25% higher than the comparable average in 1993.
As previously announced, in 1994 the company changed its method
for valuation of inventories by including direct labour costs.
Formerly, only direct materials and energy were included. This
change, which is in conformity with Danish Accounting Guidelines No
8, has increased operating income by DKK 77 million and net income by
DKK 51 million. The comparative figures for 1993 and earlier years
have not been conformed, because the net effect on each year is
considered insignificant.
In addition, the company has changed the classification of costs
and expenses in the net income statement from type of expense to
function (see Appendix 1) to facilitate comparison with other
companies.
"Production costs" (cost of materials and direct labour)
increased by 8%, resulting in a slight increase in the contribution
margin in relation to 1993. However, if direct labour had not been
included in the valuation of inventories, the increase would have
been 11%.
Total capacity costs including "production overheads" increased
by just under 15% from DKK 7,980 million in 1993 to DKK 9,138 million
in 1994. Excluding "restructuring and other exceptional charges
(net)" as mentioned below, the increase was less than 13%.
Production overheads rose by 19% over 1993. The considerable
growth is due to a significant staff increase necessitated by the
growing demand, running-in of several new production plants, and
costs directly or indirectly resulting from quality assurance
activities. Finally, depreciation within the production area rose by
30% to DKK 584 million.
Despite continued expansion of the international sales
organisation, "sales and distribution costs" only increased by 8%.
This mainly reflects the fact that Novo Nordisk has replaced
marketing agreements with independent agents and distributors by
in-house sales organisations in several countries.
"Research and development expenditure" rose by 14% in 1994 to
DKK 1,896 million, corresponding to 14% of net turnover, from DKK
1,669 million in 1993.
"Administrative expenses" increased by 17% over 1993. In 1994
these expenses were significantly affected by increased provisions
for debt relating to customers in countries subject to special
economic and political risks. In contrast, these provisions fell in
1993. Adjusted for the above provisions, the cost increase was 7%.
Total employee costs rose by 14% to DKK 4,549 million in 1994
from DKK 3,981 million in 1993, due primarily to a 10% increase in
the number of employees. At the end of 1994 the total number of
employees was 12,847. The staff increases occurred mainly within
production and quality assurance, as well as in the international
sales organisation.
Depreciation in 1994 totalled DKK 1,055 million, an increase of
32% over 1993. The significant increase reflects initiation of
depreciation on a number of newly completed facilities and production
plants.
In 1994 Novo Nordisk took a number of steps to implement a more
focused business strategy and to create a more efficient
organisational structure. As a result, the cost development was
affected by restructuring and other special events; hence Novo
Nordisk has elected to present these incomes and costs in the annual
accounts under a separate caption, "restructuring and other
exceptional charges", which amounted to DKK 134 million. The item
comprises:
- Divestiture of the bulk antibiotics business, termination of
certain product lines, and rationalisation of the sale and
distribution network.
- Provision of DKK 84 million to meet expected relocation costs,
severance pay, and depreciation on property relating to the merger of
two US companies in 1995.
- Substantial one-time costs incurred in connection with certain
legal matters in the US and increasingly stringent quality assurance
and documentation requirements of the US health authorities (FDA).
"Other operating income" rose from DKK 227 million in 1993 to
DKK 342 million in 1994, an increase of 51%. The predominant factor
behind this growth was the development in licence fees which grew by
DKK 141 million to DKK 277 million. Of total licence fees
approximately two thirds came from SeroxatR/PaxilR.
Net financial costs were DKK 118 million compared with DKK 71
million in 1993.
Income taxes for 1994 have been provided at DKK 500 million,
corresponding to 25.9% of income before tax. The increase in the
effective tax rate is due among other things to lower than expected
capital expenditure for fixed assets in 1994.
The cash flow improved significantly in 1994 compared with 1993,
mainly as a result of the lower level of capital expenditure. The
net cash flow was DKK (85) million compared with DKK (1,021) million
in 1993.
Stockholders' equity rose to DKK 13,136 million at the end of
1994 from DKK 11,914 million at the beginning of 1994. The increase
in stockholders' equity contains the inclusion of direct labour costs
in inventories as of 1 January 1994 at the amount of DKK 224 million.
Stockholders' equity accounted for approximately 62% of total assets
at year-end 1994.
Outlook for 1995
For 1995, Novo Nordisk expects its operations to develop
favourably, envisaging continued sales growth of its core products in
key geographic markets.
For 1995, Novo Nordisk expects a sales increase of up to 10%.
These expectations assume that exchange rates of Novo Nordisk's
invoicing currencies stabilise at the average level of the initial
months of the year, and that no significant new governmental measures
to reduce the price of pharmaceutical products are introduced.
Owing to ongoing investment projects, Novo Nordisk expects a net
interest expense in 1995 versus a net interest income in 1994.
Developments in gains and losses on foreign currency and on Novo
Nordisk's portfolio of marketable securities will chiefly depend on
developments in the international currency and securities markets.
On this background Novo Nordisk expects an increase in income
before tax at the level of the sales increase. Earnings in 1995
could be affected by non-recurring income or costs resulting from
implementation of the newly published corporate strategy.
In accordance with current Danish and international tax rules,
Novo Nordisk's effective tax rate is expected to increase gradually
towards 30% over the next years. For 1995 the effective tax rate is
expected to be at the level of 25-27%. If the proposed bill on
international taxation, L35, is passed by the Danish Folketing
(Parliament) in its present form, the consequences will be increased
taxes for the company.
Capital expenditure for property, plant and equipment in 1995 is
expected to be at the level of DKK 2 billion.
1994
Health Care Business (HCB)
Total HCB sales increased from DKK 8,225 million in 1993 to DKK
9,236 million in 1994. The 12% sales growth reflects changes in
volume/product mix, while overall developments in prices and currency
exchange rates only contributed modestly to the positive development.
Sales of Diabetes Care products rose by 9% to DKK 6,499 million from
1993 to 1994. The progress is mainly attributable to a better
product mix and increasing market shares in several markets, notably
Japan and Germany. In contrast, market shares declined in the US,
due primarily to a difficult supply situation in 1994. Diabetes
Care's contribution to HCB's total turnover amounted to 70% in 1994
against 72% in 1993.
Sales of HRT (hormone replacement therapy) products rose by 21%
to DKK 671 million in 1994 due to larger volumes sold in a number of
markets, notably Germany and the Nordic countries.
Sales of hGH (human growth hormone - NorditropinR) increased by
16% to DKK 1,337 million in 1994. The positive development is
attributable to larger volumes sold in a number of European markets
and in Japan. As Japan is still by far the most important market,
the 6% increase in the value of JPY vis- -vis DKK also had a
significant positive effect.
Sales of other Health Care products increased by 30% to DKK 729
million in 1994. A major reason for the progress was the fact that
sales of SeroxatR in the Nordic countries more than doubled.
Enzyme Business (EB)
EB sales increased by 8%, from DKK 3,202 million in 1993 to DKK
3,472 million in 1994, due solely to volume/product mix changes. The
overall price development was negative, and currency developments
were marginally unfavourable to EB in 1994.
The sales growth was unevenly split on EB's two core product
areas: enzymes for the detergent industry and enzymes for the process
industries.
Detergent enzymes recorded a limited sales increase. The reason
was falling prices particularly of proteases, combined with the fact
that the launch of new enzyme- containing laundry and dishwashing
detergents by some of EB's customers occurred later than expected.
The relative increase in sales of enzymes for the process
industries was somewhat bigger than EB's total sales growth. This is
primarily due to volume/mix improvements for a number of industries,
notably the textile, animal feed and baking industries. The dairy
industry was the only major industry segment that recorded a decline
compared with 1993.
...................MORE TO FOLLOW......................... CONTACT: Novo Nordisk of North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Inc. Carsten Boess, 212/867-0123 |
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