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Novo Nordisk’s financial results for Q4 2018

Lars Fruergaard Joergensen

Danish, and Nordic, giant Novo Nordisk has presented its results for the fourth quarter of 2018 – a little lower than expected and the company intends to initiate a new 12-month share repurchase programme of up to DKK 15 billion.

The company’s operating profit increased by 6% measured in local currencies when adjusted for the cost of severance and the priority review voucher for oral semaglutide, and sales remained broadly unchanged in Danish kroner and increased by 5% in local currencies to DKK 111.8 billion, states the company in their press release.

Sales within diabetes and obesity increased by 1% to DKK 93.9 billion (6% in local currencies) and sales within biopharmaceuticals decreased by 5% to DKK 17.9 billion (1% in local currencies). Operating profit decreased by 4% in Danish kroner and increased by 3% in local currencies to DKK 47.2 billion, impacted by the depreciation of the US dollar and related currencies versus the Danish krone. Adjusting for severance costs related to lay-offs in second half of 2018 and the expense related to the priority review voucher for the filing of oral semaglutide, operating profit increased by 6% in local currencies.

Net profit increased by 1% to DKK 38.6 billion and diluted earnings per share increased by 4% to DKK 15.93.

Expectations for 2019

For 2019, sales growth is expected to be 2-5% measured in local currencies. This includes the previously communicated negative impact from the changes in the funding of the Medicare Part D coverage by approximately DKK 2 billion. Sales growth reported in Danish kroner is expected to be 2 percentage points higher than in local currencies. Operating profit growth is expected to be 2-6% measured in local currencies. Operating profit growth reported in Danish kroner is expected to be 4 percentage points higher than in local currencies.

The Board of Directors has adjusted the long-term financial target for OPAT/NOA from 125% to 80% to reflect the new accounting principles for handling of leases (IFRS 16) as well as the investment level in tangible and intangible assets. Further, to reflect the investment level, the cash to earnings target is adjusted from 90% to 85%. The long-term financial target for operating profit growth remains unchanged.

A new 12-month share repurchase programme of up to DKK 15 billion.

At the Annual General Meeting on 21 March 2019, the Board of Directors will propose a final dividend of DKK 5.15 for 2018 per share of DKK 0.20. The expected total dividend for 2018 of DKK 8.15 per share, of which DKK 3.00 per share was paid as interim dividend in August 2018, corresponds to an increase of 4% compared to 2017. The Board of Directors intends to initiate a new 12-month share repurchase programme of up to DKK 15 billion.

A year of change

“2018 was a year of change and significant progress for Novo Nordisk. We delivered on our targets for sales and operating profit and have successfully launched Ozempic, our new once-weekly GLP-1 for people with type 2 diabetes, in several countries. The results from the broad PIONEER phase 3a programme for oral semaglutide are very encouraging for people with type 2 diabetes, and we are now close to submitting oral semaglutide for FDA approval,” says Lars Fruergaard Jørgensen, president and CEO.

Photo of Lars Fruergaard Jørgensen, president and CEO, Novo Nordisk