Novo Nordisk Statutory ESEF tagged
Annual Report
2021
Morten Kruse-Jacobsen (to the right), Senior Director at Novo Nordisk and married to Anders.
Being a sustainable employer is a key priority for Novo Nordisk. This includes fostering a diverse
and inclusive workplace. From January 2022, Novo Nordisk will oer a minimum of eight weeks
paid parental leave to all non-birthing parents globally, regardless of gender.
Contents
Consolidated
statements and
additional information
Management
review
Introducing Novo Nordisk
Letter from the Chair 4
Letter from the CEO 5
Novo Nordisk at a glance 6
Our business model: how we create value for society 7
Performance highlights 8
Strategic Aspirations
Purpose and sustainability (ESG) 11
Innovation and therapeutic focus 24
Commercial execution 30
Financials 33
Key risks
Risk management 41
Management
Board of Directors 44
Executive Management 47
Consolidated nancial statements
Income statement 50
Cash ow statement 51
Balance sheet 52
Equity statement 53
Notes to the consolidated nancial statements 54
Consolidated ESG statement
Consolidated statement of ESG performance 85
Notes to the consolidated ESG statement 86
Statements and Auditor's Reports
Statement by the Board of Directors and
the Executive Management 92
Independent Auditor's Reports on the Financial Statement 93
Independent Assurance Report on the ESG statement 95
Additional information
More information 96
Financial calendar 97
Product overview 97
Novo Nordisk Annual Report 2021 2Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Letter from the Chair Our long-standing aspiration of creating value for society and
for our future business is more relevant than ever, given the
mounting threats to people’s lives and livelihoods posed by the
health and environmental challenges dominating today’s global
agenda. The past two years have underscored the essential role
of science in tackling these challenges, whether managing a
rogue virus or reducing emissions.
Continued investment in innovation is vital for patients, the future
of our company and for the wider benets we can oer to society.
It is therefore gratifying to see the strides that have been made
in 2021 with the launch of new products – most notably Wegovy
®
for obesity. Production challenges meant that we struggled to
meet the high patient demand for the treatment – a situation
that served to underline the vital importance of investments
made in our global production capacity during 2021.
The opportunity for the coming years is to execute on the
commercial potential of our innovative, new treatments while
ensuring that as many people as possible have access to quality
medicines. At the same time, we must succeed in developing the
medicines of the future. This means looking beyond our existing
focus areas and our successful GLP-1 molecule semaglutide,
towards other therapy areas and new technology platforms to
address unmet medical needs related to serious chronic diseases.
To serve more patients with high quality medicines and to
continue to grow sustainably, we will evolve and challenge
ourselves in how we work and innovate. This also entails
combining our company’s deep in-house expertise with the
best science from outside, through partnerships with other
businesses, with universities around the world and with
research institutions. If we succeed, Novo Nordisk will look very
dierent a decade from now, by which time we will not only be
serving people living with diabetes and obesity but also making
a positive impact in new therapeutic areas.
Our stable ownership structure with the Novo Nordisk
Foundation as the main shareholder will help in this transition by
supporting us through investment in research and development
for the long-term while maintaining a focus on high quality
operations and nancial performance.
We must also ensure that Novo Nordisk has a diverse and truly
inclusive culture if we are to become a better and more innovative
company. With this in mind, we have set new 2025 aspirational
targets for achieving a balanced gender representation across
managerial levels. We believe that this will also stimulate and
inspire the work we are doing to enhance other diversity
dimensions.
At Board level, we are also committed to ensuring strong diversity
and having the right competences to meet future challenges. In
2021, the Board was delighted to welcome the election of Henrik
Poulsen, whose deep experience in corporate transformations
and strong ESG credentials will be invaluable. I would also like to
thank Brian Daniels and Liz Hewitt, who stepped down from the
Board in 2021, for their signicant contributions to Novo Nordisk.
On behalf of the Board of Directors, I would like to oer my
sincere thanks to all Novo Nordisk employees for their dedication
and contribution to the good operational and strategic progress
in 2021; to CEO Lars Fruergaard Jørgensen and his team for their
leadership and to our shareholders and other stakeholders for
continued support.
Helge Lund
Chair of the Board of Directors
Building for
the future
We have made good progress as a company in the past
year – despite the pandemic which continues to impact
the world and the initial challenges in meeting the
unprecedented demand for our new obesity treatment.
We continued to broaden our technology platforms
and product pipeline to strengthen the basis for long-
term growth whilst investing signicantly in expanding
our future production capacity.
Novo Nordisk Annual Report 2021 4Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Our company’s strong commercial performance against a
backdrop of continued disruption caused by the pandemic
would not have been possible without the resilience and
collaborative spirit shown by colleagues across the organisation
and our many partners.
This momentum was driven by our portfolio of GLP-1 based
therapies where buoyant demand for our semaglutide-based
medicines Ozempic
®
and Rybelsus
®
contributed to a total GLP-
1 growth of 28% in 2021, thereby strengthening our global
leadership in diabetes in the process.
Such was the demand in the US for another semaglutide product
Wegovy
®
, that ve weeks after launch, as many prescriptions
were written for the anti-obesity medication as in the four years
that followed the launch of its predecessor Saxenda
®
. This
underscored the high unmet need among people living with
obesity but also presented initial challenges for us in supply
capacity – exacerbated when a key partner experienced issue
with Good Manufacturing Practices (GMP) in December.
Whilst we continue to focus on providing treatment to already-
initiated patients, we are taking steps within our global
production to enable us to fully meet US demand in the second
half of this year and to enable much-anticipated launches in
broader markets.
Importantly, we continue to reach more patients in need around
the world. Our Changing Diabetes
®
in Children partnership, for
example, has provided free, holistic diabetes care to nearly 32,000
children and adolescents living with type 1 diabetes in low- and
middle-income countries. Our diabetes products now reach 34.6
million people worldwide, with more than 5 million receiving them
through our access and aordability programmes.
We are also doing more than ever to mitigate our impact on the
environment, with a 43% reduction in CO
2
emissions compared
to pre-pandemic, and an action plan to drive emissions down
further in transportation, which is our largest residual source of
CO
2
. This includes converting our eet of cars to electric vehicles,
as well as working with a shipping partner to increasingly
transport our products using biofuel.
We have bold ambitions to diversify our product pipeline
into adjacent therapy areas such as NASH (non-alcoholic
steatohepatitis) and cardiovascular disease, where we believe
we can be among the best in the world. Our collaboration with
Heartseed for stem cell-based heart failure therapy reects
these eorts and we expect to take a signicant step forward by
initiating the rst human trials this year.
Our acquisition of Dicerna, which develops RNAi-based therapies
to selectively silence genes that cause or contribute to disease,
demonstrates our ambition to innovate within both established
and new therapy areas for Novo Nordisk. Our commitment
to achieving further breakthroughs within diabetes remains
as strong as ever. Driving this innovation requires creativity –
something I am convinced is fostered through inclusion. To enable
this, we are making Novo Nordisk a more diverse and inclusive
workplace in which both new and long-serving employees have
the opportunity to achieve their full potential.
I would like to thank all my colleagues around the globe for their
hard work and commitment during another demanding year,
as well as the Board of Directors and our shareholders for their
continued support.
Lars Fruergaard Jørgensen
President & Chief Executive Ocer
Letter from the CEO
Strong progress
and new learnings
During 2021 we exceeded expectations – growing
our business, serving more patients than ever and
expanding our pipeline for long-term success. But we
also disappointed patients and prescribers alike due to
supply challenges that we must learn from as we look
to the future.
Novo Nordisk Annual Report 2021 5Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Novo Nordisk
at a glance
Our corporate strategy
140,800
58,644
29,319
48,478
DKK million in operating prot
DKK million in free cash ow
employees worldwide
countries with R&D facilities
Our corporate strategy has four distinct focus areas in
which we operate. It is built on our purpose, the Novo
Nordisk Way and our ambition to be a sustainable
business. We aim to strengthen our leadership and
treatment options in Diabetes and Obesity care, secure
leading positions within Biopharm and establish a
strong presence in other serious chronic diseases such
as NASH, cardiovascular disease and Alzheimer’s disease.
Succeeding in this will drive sustainable growth for
Novo Nordisk.
Novo Nordisk is a global healthcare company, headquartered
in Denmark. O ur key contribution is to discover and develop
innovative biological medicines and make them accessible to
patients throughout the world. We aim to lead in all disease
areas in which we are active.
168
80
5
DKK million in net sales countries with marketed products
countries with aliates
Biopharm
Secure a leading position
by leveraging full portfolio
and expanding into
adjacent areas
Driving change to
defeat diabetes
and other serious
chronic diseases
N
o
v
o
N
o
r
d
i
s
k
W
a
y
S
u
s
t
a
i
n
a
b
l
e
b
u
s
i
n
e
s
s
Obesity care
Strengthen treatment options
through market development
and by oering innovative
medicines and driving
patient outcomes
Diabetes care
Strengthen leadership
by oering innovative
medicines and driving
patient outcomes
Other serious
chronic diseases
Establish presence by
building competitive pipeline
and scientic leadership
Novo Nordisk Annual Report 2021 6Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Manufacturing
Distribution
Commercial
R&D
Novo Nordisk Annual Report 2021 7Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Innovation and therapeutic focus
Further raise innovation bar for diabetes treatment:
– Approval of Xulthophy
®
and Ozempic
®
in China for the treatment
of type 2 diabetes
– Resubmission of semaglutide 2.0 mg in the US and approval
in the EU in January 2022
– Phase 1 trial completed with a glucose-sensitive insulin
Develop superior treatment solutions for obesity:
– Approval of Wegovy
®
, semaglutide 2.4 mg, in the US and approval in
the EU in January 2022
– Phase 3a development initiated with 50 mg oral semaglutide in obesity
Strengthen and progress Biopharm pipeline:
– Sogroya
®
phase 3 programme in children with growth
hormone deciency successfully completed
– First Mim8 phase 1/2 trial cohorts successfully completed
Establish presence in other serious chronic diseases:
– Phase 3a development initiated with ziltivekimab in cardiovascular
disease and semaglutide in NASH and Alzheimer's disease
Acquisition of Dicerna Pharmaceuticals and its RNAi platform
to be applied across therapy areas
– Further raise the innovation bar for diabetes treatment
– Develop a leading portfolio of superior treatment solutions
for obesity
– Strengthen and progress the Biopharm pipeline
– Establish presence in other serious chronic diseases focusing
on cardiovascular disease (CVD), NASH and chronic kidney
disease (CKD)
Commercial execution
Strengthen diabetes leadership to more than one-third:
– Diabetes value market share increased by 0.8 percentage point
to 30.1% (MAT)
Strengthen obesity leadership and double sales:
– Obesity care sales increased by 55% (CER) to DKK 8.4 billion
Secure a sustained growth outlook for Biopharm:
– Biopharm sales increased by 4% (CER) to DKK 19.2 billion
– Strengthen diabetes leadership – aim at global value market
share of more than 1/3
– Strengthen obesity leadership and double 2019 reported sales
– Secure a sustained growth outlook for Biopharm
Financials
Deliver solid sales and operating prot growth:
– Sales growth at 14% (CER)
– International Operations sales growth of 14% (CER)
– US sales growth of 13% (CER) with 60% of sales coming
from products launched since 2015
– Operating prot growth of 13% (CER)
Drive operational eciencies:
– Continued productivity gains in Product Supply
Enable attractive capital allocation to shareholders:
– Free cash ow of DKK 29.3 billion
– Share buyback of DKK 20 billion
– Total dividend of DKK 10.40 per share and payout ratio of 49.6%
– Deliver solid sales and operating prot growth:
– Deliver 6–10% sales growth in IO
– Transform 70% of sales in the US (from 2015 to 2022)
– Drive operational eciencies across the value chain to enable
investments in future growth assets
– Deliver free cash ow to enable attractive capital allocation to
shareholders
2021
Highlights
Strategic
Aspirations 2025
Novo Nordisk Annual Report 2021 8Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
DKK million 2017 2018 2019 2020 2021 2020-21
Financial performance Change
Net sales 111,696 111,831 122,021 126,946 140,800 11%
Sales growth as reported (0.1%) 0.1% 9.1% 4.0% 10.9%
Sales growth in constant exchange rates (CER)
1
2.3% 4.6% 5.6% 6.7% 13.8%
Operating prot 48,967 47,248 52,483 54,126 58,644 8%
Operating prot growth as reported 1.1% (3.5%) 11.1% 3.1% 8.3%
Operating prot growth in constant exchange rates (CER)
1
4.8% 2.8% 5.6% 6.8% 12.7%
Depreciation, amortisation and impairment losses 3,182 3,925 5,661 5,753 6,025
Net nancials (287) 367 (3,930) (996) 436
Prot before income taxes 48,680 47,615 48,553 53,130 59,080 11%
Eective tax rate
2
21.7% 18.9% 19.8% 20.7% 19.2%
Net prot 38,130 38,628 38,951 42,138 47,757 13%
Purchase of intangible assets
2
1,022 2,774 2,299 16,256 1,050 (94%)
Purchase of property, plant and equipment
2
7,626 9,636 8,932 5,825 6,335 9%
Cash used for acquisition of businesses — — — — 18,283
Free cash ow
1
32,588 32,536 34,451 28,565 29,319 3%
Total assets 102,355 110,769 125,612 144,922 194,508 34%
Equity 49,815 51,839 57,593 63,325 70,746 12%
Financial ratios
Gross margin
2
84.2% 84.2% 83.5% 83.5% 83.2%
Sales and distribution costs in percentage of sales 25.4% 26.3% 26.1% 25.9% 26.3%
Research and development costs in percentage of sales 12.5% 13.2% 11.7% 12.2% 12.6%
Operating margin
2
43.8% 42.2% 43.0% 42.6% 41.7%
Net prot margin
2
34.1% 34.5% 31.9% 33.2% 33.9%
Cash to earnings
1
85.5% 84.2% 88.4% 67.8% 61.4%
Operating prot after tax to net operating assets
1
143,2% 116,7% 98.0% 82.8% 69.0%
Dividend payout ratio
2
50.4% 50.6% 50.5% 50.0% 49.6%
Share performance
Basic earnings per share/ADR in DKK
2
15.42 15.96 16.41 18.05 20.79 15%
Diluted earnings per share/ADR in DKK
2
15.39 15.93 16.38 18.01 20.74 15%
Total number of shares (million), 31 December 2,500 2,450 2,400 2,350 2,310 (2%)
Dividend per share in DKK 7.85 8.15 8.35 9.10 10.40
3
14%
Total dividend (DKK million) 19,206 19,547 19,651 21,066 23,711
3
13%
Share repurchases (DKK million) 16,845 15,567 15,334 16,855 19,447 15%
Closing share price (DKK) 335 298 387 427 735 72%
1. See 'Non-IFRS nancial measures' 2. See 'Financial denitions'. 3. Total dividend for the year including interim dividend of DKK 3.50 per share, corresponding to DKK 8,021 million,
which was paid in August 2021. The remaining DKK 6.90 per share, corresponding to DKK 15,690 million, will be paid subject to approval at the Annual General Meeting.
Sales by therapeutic area
Diabetes care Obesity care Biopharm
6%
80%
48%
27%
11%
14%
14%
Sales by geographic area
North America EMEA
Region China Rest of World
Performance highlights
Financial
highlights
Novo Nordisk Annual Report 2021 9Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Purpose and sustainability (ESG)
Novo Nordisk Annual Report 2021 11Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Novo Nordisk Annual Report 2021 12Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Total CO
2
emissions from operations and transportation
350
300
250
200
150
100
50
0
2018
2021
2019 2020
1,000
tonnes
Novo Nordisk Annual Report 2021 13Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Novo Nordisk Annual Report 2021 14Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Rebecca Commanda has type 2
diabetes and lives in Canada
Novo Nordisk Annual Report 2021 15Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
US Product Portfolio
1
%, Change vs. Prior Year
2017 2018 2019 2020 2021
List Price Change - Avg.
2
6.9% 5.0% 5.5% 2.3% 2.0%
Net Price Change - Avg.
2
-9.0% -8.6% -13.2% -16.9% -12.3%
Total US Insulin Portfolio %, Change vs. Prior Year
2017 2018 2019 2020 2021
List Price Change - Avg.
2
6.3% 4.5% 4.4% 0.2% 0.0%
Net Price Change - Avg.
2
-13.5% -14.8% -17.4% -27.7% -10.2%
1. NN US Product Portfolio is inclusive of Diabetes, Obesity and BioPharm products
2. % change represents a sales weighted average list and net price for the respective
calendar year compared to the sales weighted average list and net price for the prior
year and is not reective of the magnitude of individual list price actions
Novo Nordisk Annual Report 2021 16Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Launching aspirational targets
1. Dened as vice presidents, corporate vice presidents, senior vice presidents
and executive management
Alejandro Treviño is living with
obesity in Mexico
Novo Nordisk Annual Report 2021 17Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Mandy Marquardt is a professional track cyclist and is living with type
1 diabetes. She is representing Team Novo Nordisk, the world's rst
all-diabetes professional cycling team
2. Excluding some populations and locations due to local regulations such as in the US
where a local process is in place
3. “Equal Pay gap” is dened as the employee’s pay being signicantly above or below the
expected pay given the employee’s job level, tenure, job family and other parameters
Novo Nordisk Annual Report 2021 18Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Sierra Clark lives with Glanzmann
Thrombasthenia in Canada
Our tax policy has been approved by the Board of Directors.
Read more about this topic at novonordisk.com.
Novo Nordisk Annual Report 2021 19Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Our governance responsibility:
maintaining and building trust
At Novo Nordisk, we categorise governance into
three dimensions. The rst dimension is Corporate
Governance and covers our governance and ownership
structure. Governing Processes, the second dimension,
refers to how we run our business. Sustainability
Standards, which is about how we oversee and
prioritise our sustainability and ESG agenda, is the
third dimension.
Corporate Governance
Governance Structure
The shareholders of Novo Nordisk exercise their rights at the
general meeting, which is the supreme governing body of the
company. The general meeting inter alia adopts the company’s
Articles of Association, approves the annual report and elects
the Board of Directors.
Any shareholder has the right to raise questions at general
meetings. Resolutions can generally be passed by a simple
majority. However, resolutions to amend the Articles of
Association require two-thirds of the votes cast and capital
represented, unless other adoption requirements are imposed
by the Danish Companies Act.
Novo Nordisk has a two-tier management structure consisting
of the Board of Directors and Executive Management.
The governance structure and rules of Novo Nordisk are
further described in our Articles of Association and our
Corporate Governance Report, both of which are available at
novonordisk.com.
Corporate Governance Reporting
Novo Nordisk reports in accordance with the Danish Corporate
Governance Recommendations designated by Nasdaq
Copenhagen as well as the Corporate Governance Standards
of the New York Stock Exchange applicable to foreign private
issuers. In 2021 Novo Nordisk complied with the Danish
Corporate Governance Recommendations as we either complied
with or explained our approach to the recommendations. You
can nd further information about our corporate governance
practices in our 2021 Corporate Governance Report.
Novo Nordisk has prepared a separate Remuneration Report
describing the remuneration awarded or due during 2021 to
the Board and Executives registered with the Danish Business
Authority. The Remuneration Report is submitted to the Annual
General Meeting for an advisory vote.
The Remuneration Policy and Remuneration Report are available
at: www.novonordisk.com/about/corporate-governance.html
Disclosure regarding change of control provisions
The EU Takeover Bids Directive, as partially implemented by the
Danish Financial Statements Act, requires listed companies to
disclose information that may be of interest to the market and
potential take-over bidders, in particular in relation to disclosure
of change-of-control provisions in material contracts.
Novo Nordisk discloses that the Group has one signicant
agreement with a US payer which takes eect, alters or
terminates upon a change of control of the Group. If eected, a
takeover could – at the discretion of the relevant counterparty –
lead to the termination of such agreement. Given the ownership
structure of Novo Nordisk, the risk is considered to be remote.
In relation to the registered management of Novo Nor disk
payments of up to 24 months' xed base salary plus pension
contributions in the event of a merger, acquisition or takeover
of Novo Nordisk.
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Novo Nordisk Annual Report 2021 21Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
High Medium
Novo Nordisk Annual Report 2021 22Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
For more information, see
novonordisk.com.
Novo Nordisk Annual Report 2021 23Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
In pursuit of
life-changing
innovation
more technologies than ever before, not least within the rapidly
evolving cardiometabolic disease space. This journey can deliver
for those who for decades have relied on our innovation within
diabetes and haemophilia, but also in the future may have the
potential to deliver for others at risk of diseases such as NASH
and dyslipidaemia (high cholesterol).
To achieve our ambitions, we will not only leverage our existing
capabilities in protein and peptide engineering and delivery,
but also invest in new platforms such as cell therapy, RNA
interference and gene editing. Much of this work will be done
through partnerships.
Since 1923, Novo Nordisk has pursued scientic
breakthroughs within serious chronic diseases. To
enable us to drive change for society throughout
another century, we are exploring higher levels of
innovation by deploying novel technology platforms
across more therapy areas than at any point in our
history. In doing so, we are building on our heritage
within diabetes care with the ambition to become the
world’s foremost cardiometabolic disease company.
The COVID-19 pandemic has exacerbated the mounting social,
economic and human burden of serious chronic diseases
that aect hundreds of millions of people. By exposing the
vulnerability of these populations, it has highlighted the complex
interactions between communicable and non-communicable
diseases, underscoring the need for ground-breaking
innovation.
We are meeting the challenge by creating an increasingly broad
pipeline of life-changing products in areas including diabetes,
obesity, cardiovascular disease, non-alcoholic steatohepatitis
(NASH), and Alzheimer’s disease. The innovations we are
pursuing today take our company into more therapy areas and
Innovation and therapeutic focus
We are active in late
stage assets across all
our therapy areas
Novo Nordisk Annual Report 2021 24Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Towards holistic, integrated healthcare
Our Research and Development (R&D) strategy has led us to
a point in time where we now have more clinical programmes
with more participants than at any time in our 99-year history.
To make this possible, we have re-organised R&D operations,
creating a Research & Early Development unit to fuel and
validate our early pipeline, and a patient solutions-focused
Development organisation to take our most promising
candidates forward.
Throughout this work, we are focused on the power of
digitalisation and connected healthcare. We are evolving
from a molecule-focused pharmaceutical company to a
patient solutions-oriented enterprise where drug, device,
digital, diagnostics and data are fully integrated to deliver
leading treatment solutions to patients. This ‘5D’ approach will
bring improvements right along the value chain, from more
convenient and better products and devices for patients – who
can check and track their health status in real time via apps and
other systems – to faster, more ecient product development.
Our electronic Patient Interaction Device, for example, allows
the collection of real-time clinical trial data. This technology is
already being used by more than 4,000 patients in 36 countries
and forms a central plank of our ‘moonshot’ aspiration of being
able to submit new products for market authorisation in four
key markets within four days of the last patient visiting a pivotal
trial site.
This is a journey that will take time to complete, but it is already
creating an innovative pipeline of dierentiated projects that
has the potential to secure long-term sustainable growth of our
oering to patients beyond 2030.
In the meantime, our R&D is continuing to deliver signicant
advances. Major milestones in the past year include the US
approval of Wegovy
®
– a pivotal new treatment of obesity
and the initiation of phase 3 clinical trials investigating oral
semaglutide for both obesity and Alzheimer’s disease.
Entering a new century of diabetes innovation
In the 101 years since the discovery of insulin, there have been
many advances in the treatment of diabetes, yet the number of
people living with the condition continues to climb. As a result,
there remains an urgent need for better, more patient-focused
therapies to continue to reduce the burden of diabetes.
Our potential future treatment and device innovations may oer
this step change in care. They include the once-weekly basal
insulin icodec, which entered nal-stage phase 3 development
in November 2020, which has the potential to oer patients
greater convenience than the current option of once-daily basal
insulins. We have also progressed our work on glucose-sensitive
insulin, which is designed to activate when glucose levels rise,
thereby potentially providing better disease control and a lower
risk of hypoglycaemia.
Beyond insulin, we have continued the rollout of Rybelsus
®
, our
once-daily oral GLP-1 therapy, while once-weekly semaglutide
2.0 mg for type 2 diabetes received a positive opinion
recommending marketing authorisation in the EU in November
2021, and has been re-submitted for US regulatory approval
following the receipt of a Refusal to File letter from the US Food
& Drug Administration in March 2021. We have also launched
two phase 2 trials investigating xed-dose combination
therapies for type 2 diabetes – one focusing on semaglutide
in combination with cagrilintide (which is also being explored
for patients living with obesity), and the other looking at
combination of semaglutide and GIP (gastric inhibitory
polypeptide).
Leading the treatment of obesity
We are making major strides in tackling obesity, both with the
successful launch of our pioneering injectable GLP-1 product
Wegovy
®
in the US and the advancement in our pipeline of
next-generation therapies that we hope will deliver even greater
weight loss ecacy.
Moustapha Djamil Cissé is living with type 1 diabetes
and is enrolled in our Changing Diabetes
®
in Children
programme, Senegal
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Wegovy
®
, once-weekly subcutaneous semaglutide 2.4 mg, takes
the medical treatment of obesity to a new level, as an adjunct to
diet and exercise, with an average sustained weight loss from
baseline of 17-18%
4
sustained over 68 weeks in clinical trials.
The implications of such weight loss can be profound since
people with obesity face a range of health risks, from cancer,
type 2 diabetes and heart disease, to severe symptoms and
complications of COVID-19.
Our ultimate aspiration is to close the gap between current
pharmacological treatment options and bariatric surgery through
combination therapies. This work will take a signicant step
forward next year with the planned initiation of a large phase 3
study looking at a combination of cagrilintide and semaglutide.
Cagrilintide, a long-acting amylin analogue, works by reducing the
signaling of hunger to the brain, and early phase 1b data suggests
that its combination with semaglutide provides additive weight loss
ecacy without compromising gastrointestinal tolerability.
Alongside this, we have initiated a phase 3 trial of high-dose
semaglutide 50 mg as an oral treatment for obesity. This would
oer patients a new option and could potentially address issues
associated with injections.
Innovating in rare diseases
The rare blood and endocrine disorders that our Biopharm
business seeks to treat are areas of continuing high unmet
need, and we are advancing several key new products in
our pipeline. This includes the planned initiation of phase
3 development of Mim8, a next-generation subcutaneous
prophylactic treatment for haemophilia A, in 2022. We are also
awaiting the results from phase 3 trials with concizumab in
patients with haemophilia A or B, with or without inhibitors,
while a phase 3 trial investigating the ecacy and safety of
concizumab for pediatric use is expected to be initiated in 2022.
Furthermore, we are seeking to harness disruptive technologies
such as gene editing and RNA interference to develop next-
generation treatments for rare diseases. In December, we
announced the completion of the acquisition of Dicerna
Pharmaceuticals – a Boston-based biotech rm specialising
in RNAi therapeutics for rare and common diseases. The
acquisition builds on a successful collaboration initiated with
Dicerna in 2019 to discover and develop selective gene-silencing
therapies for liver-related cardio-metabolic diseases using
Dicerna’s proprietary RNAi technology platform, and we will now
seek to expand the application of this innovative technology
across all our therapy areas.
Broadening our horizons across serious chronic diseases
We are actively widening our therapeutic focus as we explore
a more holistic approach to cardiometabolic diseases – a
trend exemplied by the potential of semaglutide to improve
outcomes in a wide range of disorders.
Signicantly, the push into new areas includes the treatment of
Alzheimer’s disease, where we are testing oral semaglutide 14
mg in two phase 3a trials that will run for three years. We have
also started a phase 3 programme with semaglutide in patients
with NASH, while two major phase 3 trials are exploring the
potential of semaglutide in treating heart disease.
Beyond semaglutide, our antibody drug ziltivekimab has
entered phase 3 development for atherosclerotic cardiovascular
disease and we are exploring a novel oral PCSK9i agent for
high cholesterol in phase 2. Meanwhile, new partnerships with
Prothena and Heartseed have strengthened our pipeline in
cardiovascular disease, with the latter building our expertise in
the exciting new eld of cell therapy.
Strategic Aspirations
2025 Innovation and
therapeutic focus
– Further raise the innovation-bar for diabetes treatment
– Develop a leading portfolio of superior treatment
solutions for obesity
– Strengthen and progress the Biopharm pipeline
– Establish presence in other serious chronic diseases
focusing on Cardiovascular disease (CVD); Non-alcoholic
steatohepatitis (NASH)
Nadia Sadi is living with non-alcoholic
steatohepatitis (NASH) in Denmark
4. Based on the trial product estimand (secondary statistical approach): treatment eect
if all people adhered to treatment and did not initiate other anti-obesity therapies.
When using a treatment policy estimand, 15-17% weight loss was reported
Novo Nordisk Annual Report 2021 26Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Phase 1 Phase 2 Phase 3 Submission and/or approval
2020 2021
Pipeline overview
Diabetes care
Project Indication Description Phase
Semaglutide 2.0 mg
NN9535
Type 2
diabetes
A long-acting GLP-1 analogue for once-weekly
treatment.
Oral semaglutide HD
1
NN9924
Type 2
diabetes
A long-acting oral GLP-1 analogue, 25 and 50 mg,
intended for once-daily oral treatment.
Icodec
NN1436
Type 1 and
2 diabetes
A long-acting basal insulin analogue intended for
once-weekly treatment.
Icosema
NN1535
Type 2
diabetes
A combination of GLP-1 analogue semaglutide
and insulin icodec intended for once-weekly treatment.
FDC Sema – OW GIP
NN9389
Type 2
diabetes
A combination of semaglutide and novel GIP
intended for once-weekly treatment.
CagriSema in T2D
NN9388
Type 2
diabetes
A combination of amylin analogue and GLP-1 analogue
semaglutide intended for once-weekly treatment.
Insulin 965
NN1965
Type 1 and
2 diabetes
A novel basal insulin analogue intended for once-daily
treatment.
Glucose-sensitive insulin
NN1845
Type 1 and
2 diabetes
A glucose-sensitive insulin analogue intended for
once-daily treatment.
Ideal Pump Insulin
NN1471
Type 1
diabetes
A novel insulin analogue ideal for use in a closed loop
pump device as delivery.
DNA Immunotherapy
NN9041
Type 1
diabetes
A novel plasmid encoding pre- and pro-insulin intended
for preservation of beta cell function.
Obesity care
Oral Sema Obesity
NN9932
Obesity A long acting GLP-1 analogue intended for
once-daily treatment.
PYY1875
NN9775
Obesity A novel analogue of the appetite-regulating hormone,
PYY, intended for once-weekly treatment.
Cagrilintide
NN9838
Obesity A novel long-acting amylin analogue intended
for once-weekly treatment.
CagriSema
NN9838
Obesity A combination of amylin analogue cagrilintide and GLP-1
analogue semaglutide intended for once-weekly treatment.
LA-GDF15
NN9215
Obesity A long-acting GDF15 analogue intended for appetite
regulation leading to weight loss.
Biopharm
Project Indication Description Phase
Sogroya
®
NN8640
Adult GHD
2
A long-acting HGH
3
derivative intended for
once-weekly subcutaneous administration in adults.
Somapacitan
NN8640
GHD
2
A long-acting HGH
3
derivative intended for once-
weekly subcutaneous administration in children.
Concizumab
NN7415
Haemophilia
A and B w/wo
inhibitors
A monoclonal antibody against tissue factor pathway
inhibitor (TFPI) intended for subcutaneous prophylaxis
treatment.
Macimorelin
EX2020
GHD
2
An oral diagnostic agent used for the diagnosis of
GHD in adolescents and children.
Mim8
NN7769
Haemophilia A
with or without
inhibitors
A next generation FVIII mimetic bispecic antibody
for subcutaneous prophylaxis of haemophilia A
regardless of inhibitor status.
Nedosiran
7
Primary
Hyperoxaluria
An siRNA targeting lactate dehydrogenase A (or LDHA)
for once monthly subcutaneous treatment.
Eclipse
NN7533
Sickle cell
disease
An oral combination treatment of sickle cell disease
and beta thalassaemia. Project is developed in
collaboration with EpiDestiny.
Other serious chronic diseases
Semaglutide
8
NN9931
NASH
4
A long-acting GLP-1 analogue for once-weekly
treatment of NASH
4
.
Semaglutide Alzheimer
NN6535
Alzheimer’s A long-acting GLP-1 analogue for once-daily treatment
of Alzheimer’s disease.
Ziltivekimab
NN6018
CVD
5
A novel once-monthly monoclonal antibody
intended for inhibition of IL-6 activity.
Belcesiran
7
AATD
6
An siRNA targeting Alpha-1-AntiTrypsin (AAT) for once
monthly subcutaneous treatment.
Oral PCSK9i
NN6435
CVD
5
A long-acting PCSK9 inhibitor for oral treatment.
FGF-21 NASH
NN9500
NASH
4
A long-acting FGF21 analogue for once-weekly
treatment of NASH.
PRX004
NN6019
CVD
5
An anti-amyloid immunotherapy treatment for ATTR5.
DCR-AUD
7
Alcohol Use
Disorder
An siRNA targeting ALDH2 for once monthly
subcutaneous treatment.
1. High dose 2. GHD: Growth hormone deciency 3. HGH: Human growth hormone 4. NASH: Non-alcoholic steatohepatitis
5. CVD: Cardiovascular disease 6. Alpha-1-AntiTrypsin Deciency related liver disease 7. Asset without NN project ID
8. This project also includes a phase 2b study in F4 in a collaboration with Gilead
Novo Nordisk Annual Report 2021 27Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Research and
development progress
Diabetes Obesity Biopharm Other serious chronic diseases
Regulatory events
– A market authorisation application was resubmitted to
the FDA for approval of semaglutide 2.0 mg May 2021.
– Approval by the EU of Ozempic 2.0 mg.
– Xultophy
®
was approved in China for diabetes
management.
– Ozempic
®
was approved in China for diabetes
management.
– A label extension for Insulatard
®
and Actrapid
®
was
submitted to EMA to increase the non-refrigerated
storage time prior to opening by 4 weeks.
Clinical progress
– A phase 3b trial was initiated with high dose Rybelsus
®
,
25 and 50 mg, in people with type 2 diabetes (T2D).
– The phase 3a programme, COMBINE, was initiated
investigating the once-daily combination of Icodec and
semaglutide in people with T2D.
– Phase 3a, ONWARDS trials were initiated investigating
once-weekly Icodec in people with type 1 (T1D) and
(T2D).
– A Phase 2 trial was initiated to investigate the eects
of the combination of semaglutide and novel GIP in
people with T2D.
– A Phase 2 trial was initiated to investigate the eects
of the combination of semaglutide and cagrilintide in
people with (T2D).
– A Phase 1 trial for glucose sensitive insulin was
completed.
– A Phase 1 trial was initiated to investigate tolerogenic
DNA plasmid in for preventive treatment of diabetes in
people with T1D.
Regulatory events
– Once-weekly sc semaglutide 2.4 mg was approved
under the brand name Wegovy
®
for weight
management in adults with obesity or overweight and
at least one weight-related comorbidity in the US. A
marketing authorisation application for semaglutide
2.4 mg obesity was submitted to the Japanese Health
Authorities and approved in the EU.
– Saxenda
®
was granted a label expansion to include the
use in adolescents (aged 12 to <18 years) with obesity
or overweight in the US and Europe.
Clinical progress
– A phase 3a trial was initiated to investigate the eects
of once-weekly sc semaglutide 2.4 mg on physical
function, symptoms and body weight in people with
obesity-related heart failure with preserved ejection
fraction (HFpEF).
– A phase 3a trial OASIS-1 was initiated to investigate
oral semaglutide 50 mg in people with obesity.
Regulatory events
– The once-weekly growth hormone derivative,
somapacitan, was approved in Japan and Europe for
adults with growth hormone deciency.
– Regulatory le to support a prophylaxis indication for
Rebinyn
®
was submitted.
– Regulatory le to support a new indication for
NovoSeven
®
in women with Postpartum haemorrhage
was submitted.
Clinical progress
– Initial results from the phase 3a programme, REAL
4; investigating the once-weekly growth hormone
derivative, somapacitan, in children with Growth
Hormone Deciency (GHD) were compiled.
– Results from a phase 2 trial, REAL 5, in children, with
short stature and born short for gestational age were
compiled.
– First cohorts of phase 1/2 trial with Mim8 successfully
completed.
– A phase 3a trial for macimorelin was initiated
investigating an oral diagnostic agent used for the
diagnosis of GHD in adolescents and children.
Clinical progress
– A phase 3a programme, ESSENCE, was initiated
investigating once-weekly semaglutide in people with
Non-alcoholic steatohepatitis (NASH).
– A phase 3a programme, EVOKE, was initiated
investigating once-weekly semaglutide in people with
Alzheimer’s Disease.
– A phase 3a cardiovascular outcome trial, ZEUS, was
initiated investigating once-monthly monoclonal
antibody Ziltivekimab in people with Atherosclerotic
Cardiovascular Disease (ASCVD), Chronic Kidney
Disease (CKD) and residual inammatory risk.
– In collaboration with Gilead, a phase 2b trial was
initiated investigating semaglutide in combination
with Gileads investigational FXR agonist cilofexor and
investigational ACC inhibitor rsocostat in people with
compensated cirrhosis (F4) due to NASH.
– A phase 2 trial was initiated investigating orally
administrated PCSK9i for LDL-cholesterol lowering in
people with ASCVD or general CV risk.
– Novo Nordisk acquired phase 2 ready antibody PRX004
for the rare heart disease ATTR cardiomyopathy from
Prothena Corporation PLC.
– A phase 2 trial was initiated investigating once-weekly
FGF21 in people with NASH. As part of phase 2 trial
an additional treatment arm with Cagrilintide in
combination with semaglutide is included in the trial.
– Collaboration with Staten Biotechnology terminated.
Novo Nordisk Annual Report 2021 28Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Patent status for
marketed products
The patent expiry dates for the products are shown in the
table on the right. The dates provided are for expiry in
the US, China, Japan and Europe of patents on the active
ingredient, unless otherwise indicated, and include actual
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 or uses that may be relevant for
exclusivity beyond the expiration of the active ingredient
patent. Furthermore, regulatory data protection and/or
orphan exclusivity may apply.
Key marketed products in main markets (active ingredients)
Diabetes: US China Japan Europe
8
Human insulin and Modern insulins
1
Expired Expired Expired Expired
NovoNorm
®
(Prandin
®
) Expired Expired Expired Expired
Victoza
®9
2023 Expired 2022 2023
Tresiba
®
2029 2024 2027 2028
Ryzodeg
®
2029 2024 2024
2
2028
Xultophy
®
2029 2024 2024
2
2028
Fiasp
®
2030
3
2030
3
2030
3
2030
3
Ozempic
®
2032 2026 2031 2031
Rybelsus
®
2032
4
2026
4
2031
4
2031
4
Obesity:
Saxenda
®
2023 Expired Expired 2023
Wegovy
®
2032 2026 2031 2031
Biopharm:
Norditropin
®
(SimpleXx
®
) Expired Expired Expired Expired
Sogroya
®
2034 2031 2036 2036
NovoSeven
®
Expired
5
Expired
5
Expired
5
Expired
5
NovoEight
®
No patent No patent No patent No patent
NovoThirteen
®
(TRETTEN
®
) Expired No patent No patent No patent
Rexia
®
(REBINYN
®
) 2028 2022 2027 2027
Esperoct
®
2032 2029 2034 2034
Vagifem
®
10 mcg 2022
6,7
No patent Expired Expired
1. Modern insulins are NovoRapid
®
(NovoLog
®
), NovoMix
®
30 (NovoLog
®
Mix 70/30) and Levemir
®
2. Patent term extension until 2027 may apply 3. Formulation patent; active ingredient
patent has expired 4. Tablet formulation and once-daily treatment regimen are protected by additional patents expiring in 2031-2034 5. Room temperature-stable formulation patent
until 2023 in China, Japan and Germany and until 2025 in the US 6. Patent covers low-dose treatment regimen 7. Licensed to several generic manufacturers from October 2016
8. Patent status varies from country to country. The gures in the table are based on Germany 9. 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
Novo Nordisk Annual Report 2021 29Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Despite the economic and social disruptions caused by the
pandemic, we successfully launched important new products
and grew market share in 2021, allowing us to make progress
across our strategic aspirations. This robust performance was
underpinned by strong demand for our diabetes treatments
and our new obesity medication, Wegovy
®
.
We are working towards achieving a global diabetes market
value share of one third by 2025. We are also committed to
consolidating and expanding our leading position in obesity
treatment, while our Biopharm division is building a diversied
platform for sustainable growth.
The COVID-19 pandemic provided the backdrop to
Novo Nordisk’s commercial operations in 2021. The
increased risk of serious illness from coronavirus
among people living with diabetes and obesity and
other serious chronic diseases – and the growing
incidence of these conditions around the world –
has made delivering our products to patients more
imperative than ever.
We are increasingly providing a holistic solution to the
challenges of inter-linked cardiometabolic diseases – such
as diabetes, obesity and other serious chronic diseases – by
oering products to patients, healthcare professionals and
payers. In this way we are driving change and adding value for
society, while at the same time building a sustainable business
for the future.
Maintaining
commercial
excellence
30.1%
Value market share for diabetes
8,400
DKK million sales in obesity treatment
Commercial execution
Novo Nordisk Annual Report 2021 30Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Delivering on our ambitions even during these exceptional
times has required our commercial teams to rapidly adopt
new ways of doing business and increase their use of digital
tools. This shift was necessitated by the pandemic, but it
has now become standard practice across the organisation.
Today, we are embracing virtual customer interactions in
multiple settings and developing new digital competences as
we apply a market-t approach to our operations.
A watershed year in obesity therapy
Obesity was an important stand-out in 2021, both for
patients and for our business. The US launch of Wegovy
®
in June 2021 marked the start of a new era in obesity care
and underscored the value that our innovations can bring to
society. The exceptional demand for the therapy – exceeding
all expectations – was testament to the high unmet need
among people living with the disease, while the fact that our
medicine helps patients achieve unprecedented weight loss,
fuelled extensive media attention. Acceptance by payers
was also highly encouraging, with US commercial formulary
access now around 73%.
As a result of this exceptional interest, initial demand for
Wegovy
®
exceeded supply, requiring careful management
to ensure continuity of care for individual patients who had
already started treatment. Despite increasing production
eorts, additional supply chain challenges encountered
towards the end of 2021 mean we do not expect to be able
to meet demand in the US until the second half of 2022
- with relatively few new patients expected to be able to
initiate treatment as a result.
Outside the US, our rst-generation obesity product
Saxenda
®
has now been launched in 62 countries. Better
understanding of the need to address obesity is winning
healthcare system reimbursement in select sub-populations
across a growing number of markets, creating a solid platform
for the increasing uptake of anti-obesity medications.
We are the global leader in obesity treatment, with a value
market share of 77.8% of branded prescription sales, and there
is substantial scope for further growth in the years ahead. There
are currently around 650 million people living with obesity, and
in 10 years the total is likely to be closer to 1 billion.
%
Source: IQVIA data
47.5%
44.5%
28.6%
29.3% 30.1%
44.3% 43.8%
50.4%
52.7%
Diabetes value market share
GLP-1 Insulin Diabetes
2019
2021
2020
55
50
45
40
35
30
25
20
Kara Richadrson Whitely lives with obesity
in the US. She has hiked Mount Kilimanjaro
three times
Novo Nordisk Annual Report 2021 31Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Growing value market share in diabetes
In the highly competitive diabetes market, we improved our
value market share by 0.8 percentage points to 30.1%, reecting
strong demand for GLP-1 products across both North American
and International Operations. There is a clear shift to greater
use of GLP-1 therapies around the world and this segment’s
value share of the total diabetes market has increased to
26.5% compared with 21.9% 12 months ago. We continue to
be the global market leader with our type 2 diabetes products
Rybelsus
®
, Ozempic
®
and Victoza
®
, with a 52.7% share by value.
Ozempic
®
, our once-weekly injectable semaglutide, is now
available in 69 countries – including China – and Rybelsus
®
,
our oral formulation of semaglutide, has been launched in 30
countries.
Increasingly, healthcare providers are demanding diabetes
treatments that not only control blood glucose levels but
also have cardiovascular benets. The fact that Ozempic
®
has
been shown to signicantly reduce the risk of major adverse
cardiovascular events compared with placebo in people living
with type 2 diabetes and ASCVD (atherosclerotic cardiovascular
disease) is particularly important in this regard.
Insulin sales in 2021 were mixed, with the growth driven by
International Operations partially oset by lower sales in the
US However, 2021 was a landmark year for digital health in our
diabetes business, with the rst launch of our smart insulin pens
in Sweden and Germany followed by the UK launch in January
2022. By automatically recording insulin dosing information and
viewing this alongside blood sugar information, the pens allow
patients to better manage their disease with greater accuracy.
This is a key part of our drive to provide more personalised
treatment guidance to ensure patients using insulin maximise
their time in the correct glycaemic range.
The smart pen initiative also paves the way for the digitalisation
of the patient journey in other therapy areas in the future. The
aim is simple: to use smart technology to help patients lead as
normal a life as possible.
Further growth in Biopharm
In Biopharm, sales growth across International and North
America Operations was driven by our treatments for rare blood
disorders, including the newly launched products Esperoct
®
and Rexia
®
, as well as NovoEight
®
and NovoSeven
®
. Sales of
haemophilia A and haemophilia B products increased by 23%
and 23% respectively.
Overall demand for rare endocrine disorder products was
at, with an increase in international sales oset by a decline
in North America. We remain the market leader in the global
human growth disorder market with a value share of 36.3%,
against 35.6% a year ago, reecting the new indications that
have been approved for our products and the global roll-out of
our next-generation injection device.
Strategic Aspirations
2025 Commercial
execution
– Strengthen Diabetes leadership – aim at global value
market share of more than 1/3
– Strengthen Obesity leadership and double current sales
(based on reported sales in 2019)
– Secure a sustained growth outlook for Biopharm
Obesity sales
Sales as reported Growth at CER
2017 2018 2019
2021
2020
10
8
6
4
2
0
Biopharm sales
Sales as reported Growth at CER
2017 2018 2019
2021
2020
25
20
15
10
5
0
64%
-16%
60%
-1%
42%
4%
3%
1%
55%
4%
DKK
billion
DKK
billion
Novo Nordisk Annual Report 2021 32Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
2017
2018 2019 2020 2021
0
30
60
90
120
150
DKK
billion
Financials performance
NAO net sales IO net sales Growth at CER
Financials
2021 performance
and 2022 outlook
Financial performance
Sales increased by 11% measured in Danish kroner and by 14%
at CER to DKK 140,800 million in 2021. Sales in International
Operations increased by 12% measured in Danish kroner
and by 14% at CER. The strategic aspiration for International
Operations is sales growth between 6-10%. Sales in North
America Operations increased by 10% measured in Danish
kroner and by 14% at CER. The strategic aspiration of
transforming 70% of sales in the US has progressed, and 60.3%
of sales are now derived from products launched since 2015.
Geographic sales development
Sales in International Operations increased by 12% measured
in Danish kroner and by 14% at CER. Sales in EMEA increased
by 10% measured in Danish kroner and by 12% at CER. Sales
in Region China increased by 14% measured in Danish kroner
and by 11% at CER
. Sales in Rest of World increased by 14%
measured in Danish kroner and by 19% at CER.
Sales in North America Operations increased by 10% measured
in Danish kroner and by 14% at CER.
Sales development across therapeutic areas
Sales in Diabetes care increased by 11% measured in Danish
kroner and by 13% at CER. Sales of Obesity care products,
Saxenda
®
and Wegovy
®
, increased by 50% measured in
Danish kroner and by 55% at CER. Sales of Biopharm products
increased by 1% measured in Danish kroner and by 4% at CER.
In the following sections, unless otherwise noted, market
data are based on moving annual total (MAT) from November
2021 and November 2020 provided by the independent data
provider IQVIA.
Diabetes care
Sales in Diabetes care increased by 11% measured in Danish
kroner and by 13% at CER to DKK 113,197 million driven by
GLP-1 growth. Novo Nordisk has improved the global diabetes
value market share over the last 12 months from 29.3% to
30.1%. The market share increase was driven by market share
gains in both International Operations and North America
Operations.
2% 5%
6%
7%
14%
Novo Nordisk Annual Report 2021 33Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
2017
2018 2019 2020 2021
DKK
billion
Sales split in Diabetes care
Insulin sales GLP-1 sales Other diabetes care Growth at CER
0
20
40
60
80
100
120
GLP-1 therapy for type 2 diabetes
Sales of GLP-1 products for type 2 diabetes
(Rybelsus
®
,
Ozempic
®
and Victoza
®
) increased by 28% measured
in Danish kroner and by 32% at CER to DKK 53,597 million. The
GLP-1 segment’s value share of the total diabetes market has
increased to 26.5% compared with 21.9% 12 months ago.
Rybelsus
®
sales increased by 158% measured in Danish kroner
and by 168% at CER to DKK 4,838 million. Sales growth was
driven by North America Operations as well as EMEA and Rest of
World. Rybelsus
®
has now been launched in 29 countries.
Ozempic
®
sales increased by 59% measured in Danish kroner
and by 64% at CER to DKK 33,705 million. Sales growth was
driven by both North America Operations and International
Operations. Ozempic
®
has now been launched in 72 countries.
Victoza
®
sales decreased by 20% measured in Danish kroner
and by 18% at CER to DKK 15,054 million as the GLP-1 market is
moving towards once-weekly and tablet-based treatments. The
sales decline was driven by North America Operations, EMEA
and Rest of World, partially oset by higher sales in Region
China.
Insulin sales
Sales of insulin decreased by 1% measured in Danish kroner
and increased by 1% at CER to DKK 56,006 million. Sales
growth at CER was driven by increased sales in International
Operations, partially oset by declining sales in the US.
Obesity care
Sales of Obesity care products, Saxenda
®
and
Wegovy
®
, increased by 50% measured in Danish kroner and
by 55% at CER to DKK 8,400 million. Sales growth was driven
by North America Operations and International Operations.
Saxenda
®
has been launched in 65 countries, and Wegovy
®
was
launched in the US in June 2021. Novo Nordisk currently has
a value market share of 77.8% of the global branded obesity
prescription drug market. The strategic aspiration for Obesity
care is to more than double reported sales from the base in
2019 of DKK 5,679 million by 2025.
Biopharm
Sales of Biopharm products increased by 1% measured in
Danish kroner and by 4% at CER to DKK 19,203 million in line
with the strategic aspiration of sustained growth in Biopharm.
The sales growth at CER was driven by both North America
Operations and International Operations. Sales growth was
driven by Rare blood disorders.
Rare blood disorders
Sales of Rare blood disorder products increased by 6%
measured in Danish kroner and by 9% at CER to DKK 10,217
million. The increasing sales were driven by the launch products
Esperoct
®
and Rexia
®
as well as NovoSeven
®
and NovoEight
®
.
Rare endocrine disorders
Sales of Rare endocrine disorder products decreased by 5%
measured in Danish kroner and by 2% at CER to DKK 7,303
million. The sales development was driven by North America
Operations' sales decreasing by 12% at CER, partially oset by
International Operations sales increasing by 5% at CER. Novo
Nordisk is the leading company in the global human growth
disorder market with a value market share of 36.3% compared
to 35.6% a year ago.
6% 4%
4%
8%
13%
2017
2018 2019 2020 2021
0
30
60
90
120
150
DKK
billion
Sales by therapeutic area
Diabetes care Obesity care Biopharm Growth at CER
2% 5%
6%
7%
14%
Novo Nordisk Annual Report 2021 34Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
2017
2018 2019 2020 2021
DKK
billion %
Operating profit and margin
Operating profit (left axis) Operating profit margin (right axis)
Growth at CER
0
10
20
30
40
50
60
0
10
20
30
40
50
60
Development in costs and operating prot
The cost of goods sold increased by 13% measured in Danish
kroner and by 15% at CER to DKK 23,658 million, resulting in a
gross margin of 83.2% measured in Danish kroner compared
with 83.5% in 2020. The decline in gross margin reects lower
realised prices in the US, a negative currency impact of 0.2
percentage points and amortisation of intangible assets related
to the acquisition of Emisphere Technologies Inc. in 2020. This
is countered by a positive product mix driven by increased GLP-
1 sales and productivity improvements in line with the strategic
aspiration of driving operational eciencies.
Sales and distribution costs increased by 12% measured
in Danish kroner and by 15% at CER to DKK 37,008 million.
The increase in costs is driven by International Operations
and North America Operations. In International Operations,
promotional spend is related to launch activities for Rybelsus
®
and Ozempic
®
as well as Obesity care market development
activities. In North America Operations, the cost increase is
driven by promotional activities for Rybelsus
®
and Ozempic
®
as well as market development activities for Obesity care and
launch costs for Wegovy
®
, partially oset by lower promotional
spend related to insulin.
Research and development costs increased by 15% measured
in Danish kroner and by 16% at CER to DKK 17,772 million.
Increased activities within Other serious chronic diseases are
driving the cost increase reecting the progression of the
pipeline within cardiovascular disease and NASH. The growth
is impacted by amortisation of the priority review voucher for
Wegovy
®
in the US in 2020.
Administration costs increased by 2% measured in Danish
kroner and by 4% at CER to DKK 4,050 million, reecting low
spend in 2020 due to COVID-19 impact on activities.
Other operating income and expenses (net) was DKK 332
million compared with DKK 460 million in 2020.
Operating prot increased by 8% measured in Danish kroner
and by 13% at CER to DKK 58,644 million.
Financial items (net) and tax
Financial items (net) showed a net gain of DKK 436 million
compared with a net loss of DKK 996 million in 2020.
In line with Novo Nordisk’s treasury policy, the most signicant
foreign exchange risks for Novo Nordisk have been hedged,
primarily through foreign exchange forward contracts. The
foreign exchange result was a net gain of DKK 344 million
compared with a net loss of DKK 747 million in 2020. This
reects gains on hedged currencies, primarily the US dollar.
As per the end of December 2021, a negative market value of
nancial contracts of approximately DKK 1.7 billion has been
deferred for recognition in 2022.
The eective tax rate is 19.2% in 2021 compared with an
eective tax rate of 20.7% in 2020, mainly reecting non-
recurring impact from acquisitions in 2020 and 2021.
Net prot increased by 13% to DKK 47,757 million and diluted
earnings per share increased by 15% to DKK 20.74 DKK.
Cash ow and capital allocation
Free cash ow was DKK 29.3 billion compared with DKK 28.6
billion in 2020 supporting the strategic aspiration to deliver
attractive capital allocation to shareholders. The increase is
driven by higher net prot and higher provisions for rebates
in the US partially driven by changed distribution policy for the
340B programme. This increase is partially countered by an
unfavourable impact from change in working capital.
Capital expenditure for property, plant and equipment was DKK
6.3 billion compared with DKK 5.8 billion in 2020.
Novo Nordisk’s nancial reserves were DKK 16.1 billion by
end of December 2021 comprising cash at bank, marketable
securities (measured at fair value based on active market data)
and undrawn credit facilities less overdrafts and loans repayable
within 12 months.
5%
3%
6%
7%
13%
Novo Nordisk Annual Report 2021 35Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
impact sales development. Given the current exchange rates
versus the Danish krone, growth reported in DKK is now
expected to be around 5 percentage points higher than at CER.
Operating prot growth is expected to be 4% to 8% at CER. The
expectation for operating prot growth primarily reects the sales
growth outlook and continued investments in current and future
growth drivers within research and development and commercial.
Across the operating units, commercial investments are related
to the continued roll-out of Ozempic
®
and Rybelsus
®
as well as
global investments in building the anti-obesity market and the
launch of Wegovy
®
. Furthermore, resources are allocated to both
early and late-stage pipeline activities. The acquisition of Dicerna
Pharmaceuticals Inc. is negatively impacting operating prot
growth by around 3 percentage points due to higher operating
costs and amortisations of intangible assets . Given the current
exchange rates versus the Danish krone, growth reported in DKK is
expected to be around 7 percentage points higher than at CER.
For 2022, Novo Nordisk expects nancial items (net) to amount to
a loss of around DKK 2.8 billion, mainly reecting losses associated
with foreign exchange hedging contracts.
The eective tax rate for 2022 is expected to be in the range of
20-22%.
Capital expenditure is expected to be around DKK 12 billion in
2022 primarily relating to investments in additional capacity
for active pharmaceutical ingredient (API) production at
existing manufacturing sites. The expected increase in capital
expenditure reects progress of R&D projects based on the oral
technology platform.
Depreciation, amortisation and impairment losses are expected to
be around DKK 6.5 billion.
The free cash ow is expected to be DKK 50-55 billion. The
increase in free cash ow compared to 2021 reects the impact
from the acquisition of Dicerna Pharmaceuticals in 2021.
All of the above expectations are based on assumptions that the
global or regional macroeconomic and political environment will
not signicantly change business conditions for Novo Nordisk
during 2022, including the potential implications from major
healthcare reforms and legislative changes as well as outcome
of legal cases including litigations related to the 340B Drug
Pricing Programme in the US, and that the currency exchange
rates, especially the US dollar, will remain at the current level
versus the Danish krone. Neither does the guidance include the
nancial implications of any signicant business development
transactions during the remainder of 2022.
Novo Nordisk has hedged expected net cash ows in a number of
invoicing currencies and, all other things being equal, movements
in key invoicing currencies will impact Novo Nordisk’s operating
prot as outlined in note 4.3 in the nancial statements.
Expectations are as reported,
if not otherwise stated
Sales growth
at CER 6% to 10%
as reported Around 5 percentage points higher than at CER
Operating prot growth
at CER 4% to 8%
as reported Around 7 percentage points higher than at CER
Financial items (net) Loss of around DKK 2.8 billion
Eective tax rate 20% to 22%
Capital expenditure (PP&E) Around DKK 12.0 billion
Depreciation, amortisation
and impairment losses Around DKK 6.5 billion
Free cash ow (excluding impact
from business development) DKK 50-55 billion
2022 outlook
For 2022, sales growth is expected to be 6% to10% at CER.
The guidance reects expectations for sales growth in both
International Operations and in North America Operations,
mainly driven by Diabetes and Obesity care. Within Obesity care,
the guidance reects an expectation of meeting the demand for
Wegovy
®
in the US in the second half of 2022.
Intensifying competition within both Diabetes care and
Biopharm as well as an estimated negative impact on global
sales growth of around 3 percentage points from Volume
Based Procurement of insulin in China are also reected in
the guidance. Furthermore, continued pricing pressure within
Diabetes care, especially in the US, is expected to negatively
*Expectations for 2022
0
10
20
30
40
50
2018
2019 2020 2021 2022E*
DKK
billion
Cash flow and capital allocation
Dividend for prior year Interim dividend Share repurchases
Expectations
2 February 2022
Novo Nordisk Annual Report 2021 36Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Forward-looking statements
Novo Nordisk’s reports led with or furnished to the US
Securities and Exchange Commission (SEC), including this
statutory Annual Report 2021 and Form 20-F, which are
both expected to be led with the SEC in February 2022 in
continuation of the publication of this Annual Report 2021,
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 nancial 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 nancials and
other nancial 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.
In this Annual Report 2021, examples of forward looking
statements can be found under the section related to our
‘Strategic Aspirations’ and elsewhere.
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
specic. Novo Nordisk cautions that a number of important
factors, including those described in this Annual Report 2021,
could cause actual results to dier materially from those
contemplated in any forward-looking statements.
Factors that may aect future results include, but are not
limited to, global as well as local political and economic
conditions, including interest rate and currency exchange rate
uctuations, delay or failure of projects related to research and/
or development, unplanned loss of patents, interruptions of
supplies and production, including as a result of interruptions
or delays aecting supply chains on which Novo Nordisk relies,
product recalls, 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 including the risk of
cybersecurity breaches, 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,
failure to maintain a culture of compliance, epidemics,
pandemics or other public health crises, and factors related
to the foregoing matters and other factors not specically
identied herein.
For an overview of some, but not all, of the risks that could
adversely aect Novo Nordisk’s results or the accuracy of
forward-looking statements in this Annual Report 2021,
reference is made to the overview of risk factors in ‘Risk
management’ of this Annual Report 2021.
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 Annual Report
2021, whether as a result of new information, future events,
or otherwise.
Shares and capital structure
Through open and proactive communication, Novo Nordisk aims
to provide the basis for fair and ecient pricing of our shares.
Geographical split of shareholders
1
% of share capital
Denmark North America UK Other
40%
31%
4%
25%
1. Split of shareholders is denoted according to the location of legal deposit-owner
Novo Nordisk Annual Report 2021 37Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Share capital and ownership
Novo Nordisk’s share capital of DKK 462,000,000.00 is divided
into A and B share capital. The A and B shares are calculated in
units of DKK 0.20, amounting to 2.31 billion shares. The A share
capital, consisting of 537 million shares, has a nominal value of DKK
107,487,200 and the B share capital, consisting of 1,773 million
shares, has a nominal value of DKK 354,512,800. Each A share
carries 200 votes and each B share carries 20 votes. Novo Nordisk's
B shares are listed on Nasdaq Copenhagen and on the New York
Stock Exchange (NYSE) as American Depository Receipts (ADRs).
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.
The company’s A shares are not listed and are held by Novo
Holdings A/S
5
, 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 shares take priority for dividends between 0.5 and 5%.
However, in practice, A and B shares receive the same amount
of dividend per share.
As of 31 December 2021, Novo Holdings A/S also held a B share
capital of nominally DKK 22,103,800. Together with the A shares,
Novo Holdings A/S's total ownership amounted to nominally
DKK 129,591,000. Novo Holdings A/S's ownership is reected in
the 'Ownership structure' chart.
There is no complete record of all shareholders; however, based
on available sources of information, as of 31 December 2021
it is estimated that shares were geographically distributed as
shown in the 'Geographical split of shareholders’ chart. As of 31
December 2021, the free oat of listed B shares was 92.01% (of
which approximately 10.1% are listed as ADRs), excluding Novo
Holdings A/S's holding and Novo Nordisk’s holding of treasury
shares. As of 31 December 2021, Novo Holdings A/S and Novo
Nordisk’s holding of B shares equaled 141,618,276 shares
and had a nominal value of DKK 28,323,655. For details about
the share capital, see note 4.2 to the consolidated nancial
statements.
Capital structure
Novo Nordisk’s Board of Directors and Executive Management
consider that the current capital and share structure of Novo
Nordisk serve the interests of the shareholders and the
company well. Novo Nordisk’s capital structure strategy oers
a balance between long-term shareholder value creation and
competitive shareholder return in the short term.
The capital structure has been adjusted following Novo
Nordisk’s Eurobond issuance with an aggregate principal
amount of EUR 1.3 billion. In addition, Novo Nordisk announced
the acquisition of Dicerna on 18 November 2021, worth DKK 18
billion net of cash which is mainly debt-nanced.
Ownership structure
*
76.7% of votes
28.1% of capital
23.3% of votes
71.9% of capital
Novo Nordisk A/S
537 million A shares
(nominal value DKK 107 million)
1,773 million B shares
(nominal value DKK 355 million)
Novo Nordisk Foundation
Novo Holdings A/S
Institutional and private investors
* Treasury shares are included, however, voting rights of treasury shares cannot be exercised
5. Novo Holdings A/S's registered address is Tuborg Havnevej 19, DK-2900 Hellerup, Denmark
Novo Nordisk Annual Report 2021 38Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Strategic Aspirations
2025 Financial
Dividend policy
The company’s dividend policy applies a pharmaceutical
industry benchmark to ensure a competitive payout ratio
for dividend payments, which are complemented by share
repurchase programmes. The nal dividend for 2020 paid in
March 2021 was equal to DKK 5.85 per A and B share of DKK
0.20 including ADRs. The total dividend for 2020 was DKK 9.10
per A and B share of DKK 0.20, corresponding to a payout ratio
of 50.0%, which was in line with the 2020 pharma peer group
average of 50.6%.
In August 2021, an interim dividend was paid equaling DKK 3.50
per A and B share of DKK 0.20 including ADRs. For 2021, the
Board of Directors will propose a nal dividend of DKK 6.90 to
be paid in March 2022, equivalent to a total dividend for 2021
of DKK 10.40 and a payout ratio of 49.6%. The company expects
to distribute an interim dividend in August 2022. Further
information regarding this interim dividend will be announced
in connection with the nancial report for the rst six months
of 2022. Dividends are paid from distributable reserves. Novo
Nordisk does not pay a dividend on its holding of treasury
shares.
Share repurchase programme for 2021/2022
During the twelve-month period beginning 1 February 2021,
Novo Nordisk repurchased shares worth DKK 20 billion. The
share repurchase programme has primarily been conducted in
accordance with the safe harbour rules in the EU Market Abuse
Regulation (MAR). For the next 12 months, Novo Nordisk has
decided to implement a new share repurchase programme.
The expected total repurchase value of B shares amounts
to a cash value of up to DKK 22 billion. The total programme
may be reduced in size if signicant business development
opportunities arise during 2022. Novo Nordisk expects to
conduct the majority of the new share repurchase programme
according to the safe harbour rules dened in MAR. At the
Annual General Meeting in March 2022, the Board of Directors
will propose a further reduction in the company’s B share
capital, corresponding to approximately 1.3% of the total share
capital, by cancelling 30,000,000 treasury shares.
Share price development
Novo Nordisk’s share price increased by 72.3% during 2021 until
its close on 31 December close of DKK 735.00. The total market
value of Novo Nordisk’s B shares, excluding treasury shares and
Novo Holdings A/S shares, was DKK 1,198,745,107,140, as of 31
December 2021.
– Deliver solid sales and operating prot growth:
– Deliver 6–10% sales growth in International Operations
– Transform 70% of sales in the US (from 2015 to 2022)
– Drive operational eciencies across the value chain to
enable investments in future growth assets
– Deliver free cash ow to enable attractive capital
allocation to shareholders
Share price performance 2021
Novo Nordisk share price and indexed peers
1
Novo Nordisk Pharmaceutical industry index
2
OMXC25
1. OMXC25 and pharmaceutical industry development have been rebased to Novo Nordisk share price in January 2021
2. AstraZeneca, Bristol-Myers Squibb, Eli Lilly & Co., Glaxo Smith Kline, Lundbeck, Merck & Co, Novartis AG, Pzer, Roche, Sano-Aventis AG
DKK
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1000
800
600
400
200
0
25.5%
72.3%
17.2%
Novo Nordisk Annual Report 2021 39Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Risk management
To be a sustainable business, we must anticipate and
adapt to our environment to create new strategic
opportunities. Managing risks rigorously and
systematically is key in order for us to create and
protect value.
We apply a dual lensed approach to risk management. This
means we identify and mitigate both operational risks that pose
a threat to our short to medium-term plans, as well as strategic
risks that could reduce our ability to achieve our corporate
strategy over the long-term.
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 socioeconomic and political developments that present
risks or opportunities for our business. Annually, Executive
Management and the Board of Directors review a strategic risk
prole.
Innovation and competition
We are a scientic based company whose future is based on
raising the innovation bar. To remain competitive in the future
and thereby mitigate the innovation risk, we invest signicantly
in internal and external pipeline opportunities to ensure
patients receive improved treatments.
Digital disruption
New digital technologies could bring new competitors into the
pharmaceutical industry. It also provides an opportunity for us
to deliver more value to our stakeholders and help patients live
a life free from the limitations of their disease. Digital health
solutions bring new risks particularly around data regulation
and privacy, as well as potential quality risks. We strive to
monitor and mitigate these risks in close collaboration with
relevant partners.
Production capacity and supply chain risks
Demand uctuations, resource shortages, trade disputes,
quality assurance and local manufacturing requirements are
all factors that can pressure global supply chains. Furthermore,
expanding production capacity is complex and associated with
a long lead time. Therefore, planning and management of our
supply chain and production is key to mitigate this risk.
Operational risk management process:
In the short to medium-term we are also exposed to risks
throughout our value chain. Some risks are inherent in the
pharmaceutical industry, such as delays or failures of potential
late-stage medicines in the R&D pipeline. Other risks, such as
supply disruptions and competitive threats, are well-known
to any manufacturing company with global production. We
will never 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 to potential
nancial loss and reputational damage.
Executive Management, the Board of Directors and Audit
Committee review a 'heat map' of our biggest operational
risks every six months. This map is based on insights from
management teams across the organisation and includes risks
that could cause signicant disruptions to the business over
a three-year horizon. The following overview provides more
details of our key risks.
For more information, see our Corporate Governance
report available at www.novonordisk.com/about/corporate-
governance.html
Key operational risks
An aggregated illustration of our key operational risks is
outlined below with associated descriptions on the next page.
Clinical Pipeline Risks IT Security Risks
Product Supply, Quality
and Safety Risk
Financial Risks
Commercialisation Risks
Legal, Patents and
Compliance Risks
1 4
2 5
3
6
High
Impact
Low Likelihood High
3
1
2
4
6
5
ILLUSTRATIVE
Novo Nordisk Annual Report 2021 41Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Risk area Description Impact Mitigating actions
Clinical Pipeline
Risks
Findings in clinical activities, regulatory processes or
misunderstanding of commercial potential leading to delays or
failure of products in the pipeline
– Patients would not benet from innovative treatments
– Could have an adverse impact on sales, prots and market position
– Pre-clinical and clinical activities to demonstrate safety and
ecacy
– Consultations with regulators to review pre-clinical and clinical
ndings and obtain guidance on development path
Product Supply,
Quality and Safety
Risks
Disruption of product supply or quality failures may compromise
the availability of products, ultimately impacting the health of
patients and a lost commercial opportunity
– Product shortages could have potential implications for patients
– Could put patients' health and lives at risk and jeopardise
reputation and license to operate if regulatory compliance is not
ensured
– Could have an adverse impact on sales, prots and market position
– Establishing global production with multiple facilities and safety
stock to reduce supply risk
– Regular quality audits of internal units and suppliers and annual
inspections by authorities document GMP compliance
– Identication and correction of root causes when issues are
identied. If necessary, products are recalled
Commercialisation
Risks
Market dynamics and geopolitical, macroeconomic or healthcare
crises (e.g., pandemics) leading to reduced payer ability and
willingness to pay
– Market dynamics could impact price levels and patient access
– Could have an adverse impact on sales, prots and market position
– Innovation of novel products, clinical trial data and real-world
evidence demonstrate added value of new products
– Payer negotiations to ensure improved patients' access
– Increased and new access and aordability initiatives
IT Security Risks
Disruption to IT systems, such as cyber-attacks or infrastructure
failure resulting in business disruption or breach of data
condentiality
– Could limit our ability to produce and safeguard product quality
– Could compromise patients' or other individuals' privacy
– Could limit our ability to maintain operations or limit future
business opportunities if proprietary information is lost
– Could have an adverse impact on sales, prots and market position
– Company-wide information security awareness activities
– Continuity plans for non-availability of IT systems
– Company-wide internal audit of IT security controls
– Detection and protection mechanisms in IT systems and business
processes
Financial Risks
Exchange rate uctuations (mainly in USD, CNY and JPY),
disputes with tax authorities and changes to tax legislation and
interpretation
– Could lead to signicant tax adjustments, nes and higher-than-
expected tax level
– Could have an adverse impact on sales, prots and market position
– Hedging for selected currencies
– Integrated treasury management
– Applicable taxes paid in jurisdictions where business activity
generates prots and multi-year Advance Pricing Agreements
with tax authorities
Legal, Patents and
Compliance Risks
Breach of legislation, industry codes or company policies.
Competitors asserting patents against Novo Nordisk or challenging
patents critical for protection of commercial product and pipeline
candidates
– Potential exposure to investigations, criminal and civil sanctions
and other penalties
– Could compromise our reputation and the rights and integrity of
individuals involved
– Unexpected loss of exclusivity for or injunctions against existing
and pipeline products could have an adverse impact on future sales
– Could have an adverse impact on sales, prots and market position
– Legal review of key activities
– Business Ethics Code of Conduct integrated in our business,
Compliance hotline in place and Internal Audit of compliance with
business ethics standards
– Internal controls to minimise vulnerability to patent infringement
and invalidity actions
1
2
3
4
5
6
Novo Nordisk Annual Report 2021 42Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Helge Lund
Chair
Norwegian. Born October 1962. Male.
First elected 2017
1
. Term 2022.
Chair of the Nomination Committee
and Chair of 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
Holding AS. Member of the board
of directors and member of the
remuneration committee of Belron
SA and 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.
Competences:
Global corporate leadership;
healthcare and pharma industry;
nance & accounting; business
development, M&A and external
innovation sourcing; human capital
management; environmental, social
& governance (ESG).
1. In addition, Helge Lund was a member
of the Board for one year in 2014-2015
Jeppe Christiansen
Vice chair
Danish. Born November 1959. Male.
First elected 2013. Term 2022.
Chair of the Remuneration
Committee and member of the Chair
Committee.
Positions and management duties:
Chief executive ocer of Maj Invest
Holding A/S and executive director
of two wholly owned subsidiaries.
Chair of the board of directors
of Haldor Topsøe A/S, Emlika
Holding ApS, and two wholly owned
subsidiaries of the latter company,
and chair of the board of directors
of JEKC Holding ApS. Member of the
board of directors of Novo Holdings
A/S, KIRKBI A/S, BellaBeat Inc., Pluto
Naturfonden and Randers Regnskov.
Member of the board of governors
of Det Kgl. Vajsenhus. Adjunct
Professor, department of nance,
Copenhagen Business School.
Competences:
Healthcare and pharma industry;
nance & accounting; business
development, M&A and external
innovation sourcing; human capital
management; environmental, social
& governance (ESG).
Laurence Debroux
French. Born July 1969. Female.
First elected 2019. Term 2022.
Chair of the Audit Committee and
member of the Remuneration
Committee.
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 board of
directors, control & risk committee
and of the ESG committee of
Juventus Football Club S.p.A.
Member of the board of HEC Paris
Business School and of Kite Insights
(The Climate School).
Competences:
Global corporate leadership;
healthcare and pharma industry;
nance & accounting; business
development, M&A and external
innovation sourcing; human capital
management; environmental, social
& governance (ESG).
Andreas Fibig
German. Born February 1962. Male.
First elected 2018. Term 2022.
Member of the Audit Committee.
Positions and management duties:
Chair, chief executive ocer
and member of the innovation
and sustainability committee of
International Flavors & Fragrances
Inc. Chair of the board of directors of
the German American Chamber of
Commerce and executive committee
member of the World Business
Council for Sustainable Development
(WBCSD).
Competences:
Global corporate leadership;
healthcare and pharma industry;
technology; nance & accounting;
business development, M&A and
external innovation sourcing; human
capital management; environmental,
social & governance (ESG).
Sylvie Grégoire
Canadian and American. Born
November 1961. Female. First
elected 2015. Term 2022.
Member of the Audit Committee, the
Research & Development Committee
and the Nomination Committee.
Positions and management duties:
Executive chair of the board of
directors of EIP Pharma, Inc.
Member of the board of directors
and member of the nominating and
corporate governance committee
of Perkin Elmer Inc. Member of the
board of directors of F2G Ltd.
Competences:
Global corporate leadership;
healthcare and pharma industry;
medicine & science; nance &
accounting; business development,
M&A and external innovation
sourcing; human capital
management.
Henrik Poulsen
Danish. Born September 1967. Male.
First elected 2021. Term 2022.
Member of the Audit Committee.
Positions and management duties:
Deputy chair of the board of directors
and member of the transaction
committee of ISS A/S. Deputy
chair of the supervisory board and
member of the audit, remuneration
and nomination committees of
Carlsberg A/S. Member of the board
of directors of Novo Holdings A/S
and Ørsted A/S. Senior advisor to
A.P. Møller Holding A/S and chair of
the board of directors of Færch A/S.
Member of the supervisory board of
Bertelsmann SE & Co. KGaA.
Competences:
Global corporate leadership;
nance & accounting; business
development, M&A and external
innovation sourcing; human capital
management; environmental, social
& governance (ESG).
Board of Directors
Novo Nordisk Annual Report 2021 44Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Mette Bøjer Jensen
Danish. Born December 1975. Female.
First elected 2018. Term 2022.
Employee representative. Member of
the Nomination Committee.
Positions and management duties:
Wash & Sterilisation specialist
in Product Supply, Novo Nordisk A/S.
Competences:
Not mapped for employee
representatives.
Kasim Kutay
British. Born May 1965. Male.
First elected 2017. Term 2022.
Member of the Nomination
Committee and the Research &
Development Committee.
Positions and management duties:
Chief executive ocer of Novo
Holdings A/S. Member of the board
of directors and member of the
nomination and remuneration
committee of Novozymes A/S.
Member of the board of directors
and member of the nomination
and remuneration committee of
Evotec SE. Member of the board
of directors of the Life Sciences
Advisory board of Gimv NV.
Competences:
Global corporate leadership;
healthcare and pharma industry;
nance & accounting; business
development, M&A and external
innovation sourcing; human capital
management.
Anne Marie Kverneland
Danish. Born July 1956. Female.
First elected 2000. Term 2022.
Employee representative. Member
of the Remuneration Committee.
Positions and management duties:
Laboratory technician and full-time
union representative in Novo
Nordisk A/S. Member of the board
of directors of the Novo Nordisk
Foundation.
Competences:
Not mapped for employee
representatives.
Martin Mackay
American and British. Born April 1956.
Male. First elected 2018. Term 2022.
Chair of the Research &
Development Committee. Member
of the Remuneration Committee.
Positions and management duties:
Co-founder, chair and CEO of
Rallybio LLC. Member of the board
of directors of 5:01Acquisition
Corporation. Senior advisor to New
Leaf Venture Partners, LLC. Member
of the board of directors and chair of
the science & technology committee
of Charles River Laboratories
International, Inc.
Competences:
Global corporate leadership;
healthcare and pharma industry;
medicine & science; technology;
business development, M&A and
external innovation sourcing; human
capital management.
Thomas Rantzau
Danish. Born March 1972. Male.
First elected 2018. Term 2022.
Employee representative. Member
of the Research & Development
Committee.
Positions and management duties:
Area specialist in Product Supply,
Novo Nordisk A/S.
Competences:
Not mapped for employee
representatives.
Stig Strøbæk
Danish. Born January 1964. Male.
First elected 1998. Term 2022.
Employee representative. Member
of the Audit Committee.
Positions and management duties:
Electrician and a full-time union
representative in Novo Nordisk A/S.
Competences:
Not mapped for employee
representatives.
Novo Nordisk Annual Report 2021 45Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Independence and meeting attendance overview
Meeting attendance in 2021
1
Name Independence
2
Board of
Directors
Chair
Committee
Audit
Committee
7
Nomination
Committee
Remuneration
Committee
R&D
Committee
Helge Lund Independent
Jeppe Christiansen Not independent
3
Laurence Debroux Independent
4,5,8
Andreas Fibig Independent
4
Sylvie Grégoire Independent
4
Mette Bøjer Jensen Not independent
6
Kasim Kutay Not independent
3
Anne Marie Kverneland Not independent
6
Martin Mackay Independent
Henrik Poulsen Not independent
3,4,5,8
Thomas Rantzau Not independent
6
Stig Strøbæk Not independent
4,6
Board members who stepped down at the annual general meeting in March 2021
Brian Daniels Independent
Liz Hewitt Independent
1. Number of meetings attended by each Board member out of the total number of meetings within the member's term 2. In accordance with recommendation 3.2.1 of the Danish Corporate Governance Recommendations as designated by Nasdaq Copenhagen 3. Member of
the board of directors or executive management of Novo Holdings A/S 4. Pursuant to the US Securities Exchange Act, Ms Debroux, Mr Fibig and Ms Grégoire qualify as independent Audit Committee members, while Mr Poulsen and Mr Strøbæk rely on an exemption from the
independence requirements 5. Ms Debroux and Mr Poulsen possess the qualications within accounting and auditing required under part 8 of the Danish Act on Approved Auditors and Audit Firms 6. Elected by employees of Novo Nordisk 7. Collectively the members have relevant
industry expertise 8. Designated as nancial experts as dened by the US Securities and Exchange Commission (SEC)
Novo Nordisk Annual Report 2021 46Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Lars Fruergaard Jørgensen
President and chief executive ocer
(CEO)
Born November 1966. Male.
Other positions and
management duties:
Member of the supervisory board
and member of the nomination
committee of Carlsberg A/S.
First vice president of the European
Federation of Pharmaceutical
Industries and Associations (EFPIA).
Monique Carter
Executive vice president
People & Organisation
Born December 1973. Female.
Other positions and
management duties:
No other management positions.
Maziar Mike Doustdar
1
Executive vice president
International Operations
Born August 1970. Male.
Other positions and
management duties:
No other management positions.
Ludovic Helfgott
1
Executive vice president
Biopharm
Born July 1974. Male.
Other positions and
management duties:
President of the Novo Nordisk
Haemophilia Foundation Council.
Karsten Munk Knudsen
Executive vice president
Chief nancial ocer (CFO)
Born December 1971. Male.
Other positions and
management duties:
Chair of the board of directors of
NNE A/S. Member of the board
of directors and chair of the audit
committee of Hempel A/S.
Doug Langa
1
Executive vice president,
North America Operations
Born October 1966. Male.
Other positions and
management duties:
No other management positions.
Martin Holst Lange
Executive vice president
Development
Born October 1970. Male.
Other positions and
management duties:
No other management positions.
Marcus Schindler
Executive vice president
Research & Early Development and
chief scientic ocer (CSO)
Born September 1966. Male.
Other positions and
management duties:
Adjunct Professor of Pharmacology
at the University of Gothenburg.
Camilla Sylvest
Executive vice president
Commercial Strategy & Corporate
Aairs
Born November 1972. Female.
Other positions and
management duties:
Vice chair of the board of directors
of the World Diabetes Foundation.
Member of the board of directors of
Danish Crown A/S.
Henrik Wul
Executive vice president
Product Supply, Quality & IT
Born November 1970. Male.
Other positions and
management duties:
Member of the board of directors
and the remuneration committee of
Ambu A/S. Member of the board of
directors of Grundfos Holding A/S.
1. Not registered as executive with the Danish Business Authority
Executive Management
Novo Nordisk Annual Report 2021 47Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Novo Nordisk Annual Report 2021 49Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Consolidated nancial, environmental, social and
governance statements 2021
Consolidated statements
Income statement p. 50
Cash ow statement p. 51
Balance sheet p. 52
Equity statement p. 53
Notes to the consolidated nancial statements
Section 1
Basis of preparation
1.1 Principal accounting policies and key accounting estimates
p. 54
1.2 Changes in accounting policies and disclosures p. 54
Section 2
Results for the year
2.1 Net sales and rebates p. 55
2.2 Segment information p. 56
2.3 Research and development costs p. 58
2.4 Employee costs p. 58
2.5 Other operating income and expenses p. 59
2.6 Income taxes and deferred income taxes p. 59
2.7 Earnings per share p. 60
Section 3
Operating assets and liabilities
3.1 Intangible assets and property, plant and equipment p. 61
3.2 Inventories p. 64
3.3 Trade receivables p. 65
3.4 Provisions and contingent liabilities p. 66
3.5 Other liabilities p. 67
Section 4
Capital structure and nancial items
4.1 Distribution to shareholders p. 68
4.2 Share capital, Treasury shares and Other reserves p. 68
4.3 Financial risks p. 69
4.4 Derivative nancial instruments p. 71
4.5 Borrowings p. 72
4.6 Cash and cash equivalents p. 73
4.7 Other non-cash items p. 73
4.8 Change in working capital p. 73
4.9 Financial assets and liabilities p. 74
4.10 Financial income and expenses p. 75
Section 5
Other disclosures
5.1 Share-based payment schemes p. 76
5.2 Commitments p. 78
5.3 Acquisition of businesses p. 78
5.4 Related party transactions p. 79
5.5 Fee to statutory auditors p. 80
5.6 General accounting policies p. 80
5.7 Companies in the Novo Nordisk Group p. 81
Financial denitions
(part of Management's review – not audited) p. 82
Non-IFRS nancial measures
(part of Management's review – not audited) p. 83
Consolidated ESG statement p. 85
Notes to the consolidated ESG statement
Section 6
Basis of preparation p. 86
Section 7
Environmental performance
7.1 Energy consumption for operations and share of
renewable power p. 87
7.2 Water consumption for production sites p. 87
7.3 Breaches of environmental regulatory limit values p. 87
7.4 CO
2
emissions from operations and transportation p. 87
7.5 Waste from production sites p. 88
Section 8
Social performance
8.1 Patients reached with Novo Nordisk's Diabetes care products p. 88
8.2 Employees p. 89
8.3 Sustainable employer score p. 89
8.4 Frequency of occupational accidents p. 89
8.5 Gender diversity p. 89
8.6 Total tax contribution p. 90
8.7 Supplier audits p. 90
Section 9
Governance performance
9.1 Business ethics reviews and training p. 90
9.2 Supplier audits p. 90
9.3 Product recalls p. 91
9.4 Failed inspections p. 91
9.5 Facilitations of the Novo Nordisk Way p. 91
9.6 Company reputation p. 91
9.7 Animals purchased for research p. 91
Novo Nordisk Annual Report 2021 50Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Income statement
and statement of comprehensive income for the year ended 31 December
DKK million Note 2021 2020 2019
Income statement
Net sales 2.1, 2.2 140,800 126,946 122,021
Cost of goods sold 2.2 (23,658 ) (20,932 ) (20,088 )
Gross prot 117,142 106,014 101,933
Sales and distribution costs 2.2 (37,008 ) (32,928 ) (31,823 )
Research and development costs 2.2, 2.3 (17,772 ) (15,462 ) (14,220 )
Administrative costs 2.2 (4,050 ) (3,958 ) (4,007 )
Other operating income and expenses 2.2, 2.5 332 460 600
Operating prot 58,644 54,126 52,483
Financial income 4.10 2,887 1,628 65
Financial expenses 4.10 (2,451 ) (2,624 ) (3,995 )
Prot before income taxes 59,080 53,130 48,553
Income taxes 2.6 (11,323 ) (10,992 ) (9,602 )
Net prot 47,757 42,138 38,951
Earnings per share
Basic earnings per share (DKK) 2.7 20.79 18.05 16.41
Diluted earnings per share (DKK) 2.7 20.74 18.01 16.38
DKK million Note 2021 2020 2019
Statement of comprehensive income
Net prot 47,757 42,138 38,951
Other comprehensive income:
Items that will not be reclassied subsequently to the income statement:
Remeasurements of retirement benet obligations 146 (67 ) (187 )
Items that will be reclassied subsequently to the income statement:
Exchange rate adjustments of investments in subsidiaries 1,624 (1,689 ) 226
Cash ow hedges:
Realisation of previously deferred (gains)/losses 4.2, 4.4 (1,802 ) 329 1,677
Deferred gains/(losses) incurred during the period 4.2, 4.4 (1,755 ) 1,384 (329 )
Other items 112 10 9
Tax on other comprehensive income, income/(expense) 2.6 1,005 (577 ) (231 )
Other comprehensive income, net of tax (670 ) (610 ) 1,165
Total comprehensive income 47,087 41,528 40,116
Novo Nordisk Annual Report 2021 51Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Cash ow statement
for the year ended 31 December
DKK million Note 2021 2020 2019
Cash ow statement
Net prot 47,757 42,138 38,951
Adjustment of non-cash items:
Income taxes in the income statement 2.6 11,323 10,992 9,602
Depreciation, amortisation and impairment losses 3.1 6,025 5,753 5,661
Other non-cash items 4.7 13,009 7,849 7,032
Change in working capital 4.8 (8,656 ) (4,353 ) (3,388 )
Interest received 241 100 64
Interest paid (261 ) (422 ) (204 )
Income taxes paid 2.6 (14,438 ) (10,106 ) (10,936 )
Net cash generated from operating activities 55,000 51,951 46,782
Purchase of intangible assets 3.1 (1,050 ) (16,256 ) (2,299 )
Proceeds from sale of property, plant and equipment — 7 4
Purchase of property, plant and equipment 3.1 (6,335 ) (5,825 ) (8,932 )
Cash used for acquisition of businesses 5.3 (18,283 ) — —
Proceeds from other nancial assets — 12 148
Purchase of other nancial assets (4 ) — (350 )
Purchase of marketable securities (7,109 ) — —
Sale of marketable securities 1,172 — —
Investment in associated companies 5.4 — (392 ) (97 )
Proceeds from the divestment of Group and
associated companies — — (3 )
Dividend received from associated companies 5.4 4 18 20
Net cash used in investing activities (31,605 ) (22,436 ) (11,509 )
DKK million Note 2021 2020 2019
Purchase of treasury shares 4.2 (19,447 ) (16,855 ) (15,334 )
Dividends paid 4.1 (21,517 ) (20,121 ) (19,409 )
Proceeds from borrowings 4.5 22,160 5,682 81
Repayment of borrowings 4.5 (6,689 ) (950 ) (822 )
Net cash used in nancing activities (25,493 ) (32,244 ) (35,484 )
Net cash generated from activities (2,098 ) (2,729 ) (211 )
Cash and cash equivalents at the beginning of the year 12,226 15,411 15,629
Exchange gains/(losses) on cash and cash equivalents 591 (456 ) (7 )
Cash and cash equivalents at the end of the year 4.6 10,719 12,226 15,411
Novo Nordisk Annual Report 2021 52Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Balance sheet
at 31 December
DKK million Note 2021 2020
Assets
Intangible assets 3.1 43,171 20,657
Property, plant and equipment 3.1 55,362 50,269
Investments in associated companies 525 582
Deferred income tax assets 2.6 8,672 5,865
Other receivables and prepayments 267 674
Other nancial assets 916 1,066
Total non-current assets 108,913 79,113
Inventories 3.2 19,621 18,536
Trade receivables 3.3 40,643 27,734
Tax receivables 1,119 289
Other receivables and prepayments 5,037 4,161
Marketable securities 4.3 6,765 —
Derivative nancial instruments 4.4 1,690 2,332
Cash at bank 4.6 10,720 12,757
Total current assets 85,595 65,809
Total assets 194,508 144,922
DKK million Note 2021 2020
Equity and liabilities
Share capital 4.2 462 470
Treasury shares 4.2 (6 ) (8 )
Retained earnings 72,004 63,774
Other reserves 4.2 (1,714 ) (911 )
Total equity 70,746 63,325
Borrowings 4.5 12,961 2,897
Deferred income tax liabilities 2.6 5,271 2,502
Retirement benet obligations 1,280 1,399
Other liabilities 3.5 360 —
Provisions 3.4 4,374 4,526
Total non-current liabilities 24,246 11,324
Borrowings 4.5 13,684 7,459
Trade payables 8,870 5,717
Tax payables 3,658 3,913
Other liabilities 3.5 19,600 17,005
Derivative nancial instruments 4.4 2,184 1,365
Provisions 3.4 51,520 34,814
Total current liabilities 99,516 70,273
Total liabilities 123,762 81,597
Total equity and liabilities 194,508 144,922
Novo Nordisk Annual Report 2021 53Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Equity statement
at 31 December
2021 2020 2019
DKK million
Share
capital
Treasury
shares
Retained
earnings
Other
reserves Total
Share
capital
Treasury
shares
Retained
earnings
Other
reserves Total
Share
capital
Treasury
shares
Retained
earnings
Other
reserves Total
Balance at the beginning of the year 470 (8 ) 63,774 (911 ) 63,325 480 (10 ) 57,817 (694 ) 57,593 490 (11 ) 53,406 (2,046 ) 51,839
Net prot 47,757 47,757 42,138 42,138 38,951 38,951
Other comprehensive income 146 (816 ) (670 ) (67 ) (543 ) (610 ) (187 ) 1,352 1,165
Total comprehensive income 47,903 (816 ) 47,087 42,071 (543 ) 41,528 38,764 1,352 40,116
Transfer of cash ow hedge reserve to
intangible assets (note 4.2) 13 13 326 326
Transactions with owners:
Dividends (note 4.1) (21,517 ) (21,517 ) (20,121 ) (20,121 ) (19,409 ) (19,409 )
Share-based payments (note 5.1) 1,040 1,040 823 823 363 363
Tax related to restricted stock units 245 245 31 31 18 18
Purchase of treasury shares (note 4.2) (6 ) (19,441 ) (19,447 ) (8 ) (16,847 ) (16,855 ) (9 ) (15,325 ) (15,334 )
Reduction of the B share capital (note 4.2) (8 ) 8 — (10 ) 10 — (10 ) 10 —
Balance at the end of the year 462 (6 ) 72,004 (1,714 ) 70,746 470 (8 ) 63,774 (911 ) 63,325 480 (10 ) 57,817 (694 ) 57,593
Refer to note 4.2 for details of movements in Other reserves.
Novo Nordisk Annual Report 2021 54Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Section 1
Basis of preparation
1.1 Principal accounting policies and
key accounting estimates
The consolidated nancial statements included in this Annual Report
have been prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board
(IASB) and in accordance with IFRS as endorsed by the EU and further
requirements in the Danish Financial Statements Act.
Measurement basis
The consolidated nancial statements have been prepared on the historical
cost basis except for derivative nancial instruments, equity investments,
marketable securities and trade receivables in a factoring portfolio, which
are measured at fair value. Except for the changes described in note 1.2, the
principal accounting policies set out below have been applied consistently
in the preparation of the consolidated nancial statements for all the years
presented. The general accounting policies are described in note 5.6.
Principal accounting policies
Novo Nordisk’s accounting policies are described in each of the individual
notes to the consolidated nancial statements. Accounting policies listed in
the table below are regarded as the principal accounting policies applied
by Management.
Principal accounting policies Key accounting estimates and judgements Estimation risk Note
US net sales and rebates Estimate of US sales deductions and provisions for sales rebates High
2.1
Intangible assets from acquisition of businesses Estimate in determining the fair value of intangible assets when acquiring assets in a business combination High
5.3
Income taxes and deferred income taxes Estimate regarding deferred income tax assets and provision for uncertain tax positions Medium
2.6
Provisions and contingent liabilities Estimate of ongoing legal disputes, litigation and investigations Medium
3.4
Intangible assets Estimate regarding impairment of assets and judgement of whether a transaction is an asset acquisition or a business combination Low
3.1
Inventories Estimate of indirect production costs capitalised and inventory write-down Low
3.2
Key accounting estimates and judgements
The use of reasonable estimates and judgements is an essential part
of the preparation of the consolidated nancial 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 identied are those that have a signicant
risk of resulting in a material adjustment to the measurement of assets and
liabilities in the following reporting period. An example being the estimation
of US sales deductions and provisions for sales rebates.
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 dier from the amounts estimated as more detailed
information becomes available.
In addition, Management makes judgements in the process of applying the
entity’s accounting policies, for example the classication of a transaction as
an asset acquisition or a business combination.
Management regards those listed below as the key accounting
estimates and judgements used in the preparation of the consolidated
nancial statements.
Please refer to the specic notes for further information on the key
accounting estimates and judgements as well as assumptions applied.
Applying materiality
The consolidated nancial 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 nancial statements. If a line
item is not individually material, it is aggregated with other items of a
similar nature in the consolidated nancial statements or in the notes.
Management provides specic disclosures required by IFRS unless the
information is not applicable or is considered immaterial to the decision-
making of the primary users of these nancial statements.
1.2 Changes in accounting policies and disclosures
Adoption of new or amended IFRSs
Management has assessed the impact of new or amended and revised
accounting standards and interpretations (IFRSs) issued by the IASB and
IFRSs endorsed by the European Union eective on or after 1 January 2021.
It is assessed that application of amendments eective from 1 January 2021
has not had a material impact on the consolidated nancial statements for
2021. Furthermore, Management does not anticipate any signicant impact
on future periods from the adoption of these amendments.
Novo Nordisk Annual Report 2021 55Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Section 2
Results for the year
2.1 Net sales and rebates
Gross-to-net sales reconciliation
DKK million 2021 2020 2019
Gross sales 340,180 298,187 270,431
US Managed Care and Medicare (112,929) (96,716) (84,202)
US wholesaler charge-backs (40,354) (37,036) (33,772)
US Medicaid rebates (19,810) (17,307) (14,365)
Other US discounts and sales
returns (14,119) (10,867) (8,280)
Non-US rebates, discounts and
sales returns (12,168) (9,315) (7,791)
Total gross-to-net sales
adjustments (199,380) (171,241) (148,410)
Net sales 140,800 126,946 122,021
Provisions for sales rebates
DKK million 2021 2020 2019
At the beginning of the year 34,052 30,878 25,760
Additional provisions, including
increases to existing provisions 155,602 111,921 102,782
Amount paid during the year (141,370) (106,116) (98,655)
Adjustments, including unused
amounts reversed during the year (284) 166 381
Eect of exchange rate adjustment 2,822 (2,797) 610
At the end of the year 50,822 34,052 30,878
Sales discounts and sales rebates are predominantly issued in the US. As
such, rebates amount to 75% of gross sales in the US (74% in 2020 and 71%
in 2019).
Provisions for sales rebates include US Managed Care, Medicare, Medicaid,
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 benet 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 oered 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. Rebates are estimated according to the specic terms in each
agreement, historical experience, anticipated channel mix, growth rates and
market share information. Novo Nordisk adjusts the provision periodically to
reect 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.
Since January 2021, Novo Nordisk has 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.
Chargebacks 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. Please refer to note
3.4 Provisions and contingent liabilities for a more elaborate description of
the ongoing litigation on 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 reect 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 2021, Novo Nordisk had three major wholesalers distributing products in
the US, representing 18%, 13% and 13% respectively of total net sales (19%,
13% and 12% in 2020 and 19%, 14% and 12% in 2019). Sales to these three
wholesalers are within both Diabetes and Obesity care and Biopharm.
Net sales to be recognised from fullling existing customer contracts
containing xed or minimum sales volumes, with an original term greater
than 12 months, are expected to be DKK 1,012 million within 12 months
(DKK 431 million in 2020) and DKK 962 million thereafter (DKK 216 million
in 2020).
Novo Nordisk's sales are impacted by exchange rate changes. Refer to
note 4.3 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 satised.
In some markets, Novo Nordisk sells products on a sale-or-return basis.
Where there is historical experience or a reasonably accurate estimate of
Novo Nordisk Annual Report 2021 56Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
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 sucient 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 3.4).
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 is recognised in the income
statement in nancial items. Please refer to notes 4.3, 4.4 and 4.10 for
more details on hedging.
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 require use of signicant judgement, 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 dened 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 can only be recognised to the extent that it is highly probable that a
signicant reversal of the recognised revenue will not occur. In determining
the amount of revenue to recognise, Management has considered, among
other factors, whether the consideration is highly susceptible to factors
outside Novo Nordisk's inuence, as well as the extent of predictability and
historical experience with similar transactions.
Novo Nordisk considers the provisions established for sales rebates to
be reasonable and appropriate based on currently available information.
However, the actual amount of rebates and discounts may dier from
the amounts estimated by Management as more detailed information
becomes available.
2.2 Segment information
Business segments – Key gures
Diabetes and Obesity care Biopharm Total
DKK million 2021 2020 2019 2021 2020 2019 2021 2020 2019
Total net sales 121,597 108,020 102,840 19,203 18,926 19,181 140,800 126,946 122,021
Cost of goods sold (19,363) (17,715) (16,309) (4,295) (3,217) (3,779) (23,658) (20,932) (20,088)
Sales and distribution costs (33,791) (29,903) (28,729) (3,217) (3,025) (3,094) (37,008) (32,928) (31,823)
Research and development costs (15,600) (13,535) (12,128) (2,172) (1,927) (2,092) (17,772) (15,462) (14,220)
Administrative costs (3,504) (3,387) (3,346) (546) (571) (661) (4,050) (3,958) (4,007)
Other operating income and
expenses 199 264 309 133 196 291 332 460 600
Operating prot 49,538 43,744 42,637 9,106 10,382 9,846 58,644 54,126 52,483
Operating margin 40.7% 40.5% 41.5% 47.4% 54.9% 51.3% 41.7% 42.6% 43.0%
Depreciation, amortisation and
impairment losses expensed (4,895) (4,624) (3,916) (1,130) (1,129) (1,745) (6,025) (5,753) (5,661)
Novo Nordisk operates in two business segments based on therapies:
Diabetes and Obesity care and Biopharm, representing the entirety of the
Group's operations.
The segments include research, development, manufacturing and marketing
of products within the following areas:
– Diabetes and Obesity care: insulin, GLP-1 and related delivery
systems, oral antidiabetic products (OAD), obesity and other
serious chronic diseases
– Biopharm: Rare blood disorders, rare endocrine disorders and
hormone replacement therapy.
Segment performance is evaluated on the basis of operating prot,
consistent with the consolidated nancial 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 been split between business
segments according to a specic allocation. In addition, a small number
of corporate overhead costs are allocated systematically between the
segments. 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, as all signicant decisions regarding business development and
direction are taken in this forum.
Geographical areas
Sales to external customers attributed to the US are collectively the most
material to the Group. The US and Mainland China are the only territories
where sales contribute 10% or more of total net sales.
In 2021, 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).
Refer to note 5.7 for an overview of companies in the Novo Nordisk Group
based on geographical areas.
The country of domicile is Denmark, which is part of EMEA. Denmark is
immaterial to Novo Nordisk's activities in terms of sales as 99.8% of total
sales are realised outside Denmark. Sales are attributed to geographical
areas according to the location of the customer.
Novo Nordisk Annual Report 2021 57Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Net sales – Business segments and geographical areas
Total International Operations Total North America Operations
Total Novo Nordisk
net sales
Total IO EMEA China Rest of World Total NAO Of which the US
DKK million 2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019
Diabetes and Obesity care segment:
Rybelsus
®
524 36 — 289 36 — — — — 235 — — 4,314 1,837 50 4,243 1,826 50 4,838 1,873 50
Ozempic
®
8,856 3,634 1,143 6,393 3,112 969 303 10 — 2,160 512 174 24,849 17,577 10,094 23,168 16,650 9,599 33,705 21,211 11,237
Victoza
®
6,726 7,095 7,249 3,527 4,251 4,713 1,544 1,033 898 1,655 1,811 1,638 8,328 11,652 14,685 8,031 11,292 14,217 15,054 18,747 21,934
Total GLP-1 16,106 10,765 8,392 10,209 7,399 5,682 1,847 1,043 898 4,050 2,323 1,812 37,491 31,066 24,829 35,442 29,768 23,866 53,597 41,831 33,221
Long-acting insulin 11,074 9,959 9,035 6,729 6,451 5,955 2,080 1,471 1,059 2,265 2,037 2,021 6,990 8,480 11,741 6,412 7,962 11,271 18,064 18,439 20,776
– of which Tresiba
®
5,486 4,407 3,477 2,979 2,574 1,983 1,095 418 87 1,412 1,415 1,407 4,243 4,561 5,782 3,793 4,191 5,500 9,729 8,968 9,259
– of which Xultophy
®
2,135 1,789 1,493 1,693 1,605 1,407 3 1 — 439 183 86 522 655 717 512 642 708 2,657 2,444 2,210
– of which Levemir
®
3,453 3,763 4,065 2,057 2,272 2,565 982 1,052 972 414 439 528 2,225 3,264 5,242 2,107 3,129 5,063 5,678 7,027 9,307
Premix insulin 10,512 10,246 9,707 2,879 2,959 3,160 5,224 4,852 4,306 2,409 2,435 2,241 691 679 871 665 652 839 11,203 10,925 10,578
– of which Ryzodeg
®
1,711 1,291 993 392 321 237 283 39 4 1,036 931 752 — — — — — — 1,711 1,291 993
– of which NovoMix
®
8,801 8,955 8,714 2,487 2,638 2,923 4,941 4,813 4,302 1,373 1,504 1,489 691 679 871 665 652 839 9,492 9,634 9,585
Fast-acting insulin 10,903 10,808 10,304 6,454 6,584 6,422 2,288 2,075 1,753 2,161 2,149 2,129 6,784 7,505 8,999 6,357 7,101 8,592 17,687 18,313 19,303
– of which Fiasp
®
1,106 832 617 965 764 585 — — — 141 68 32 642 553 626 605 519 597 1,748 1,385 1,243
– of which NovoRapid
®
9,797 9,976 9,687 5,489 5,820 5,837 2,288 2,075 1,753 2,020 2,081 2,097 6,142 6,952 8,373 5,752 6,582 7,995 15,939 16,928 18,060
Human insulin 7,453 7,339 7,361 2,152 2,370 2,438 2,692 2,655 2,847 2,609 2,314 2,076 1,599 1,534 1,675 1,515 1,431 1,552 9,052 8,873 9,036
Total insulin 39,942 38,352 36,407 18,214 18,364 17,975 12,284 11,053 9,965 9,444 8,935 8,467 16,064 18,198 23,286 14,949 17,146 22,254 56,006 56,550 59,693
Other Diabetes care 2,644 2,946
3,389 713 725 1,052 1,432 1,546 1,647 499 675 690 950 1,085 858 806 943 705 3,594 4,031 4,247
Total Diabetes care 58,692 52,063 48,188 29,136 26,488 24,709 15,563 13,642 12,510 13,993 11,933 10,969 54,505 50,349 48,973 51,197 47,857 46,825 113,197 102,412 97,161
Obesity care (Saxenda
®
and Wegovy
®
) 3,117 2,118 2,083 1,809 1,124 981 61 10 9 1,247 984 1,093 5,283 3,490 3,596 4,912 3,230 3,348 8,400 5,608 5,679
Diabetes and Obesity care total 61,809 54,181 50,271 30,945 27,612 25,690 15,624 13,652 12,519 15,240 12,917 12,062 59,788 53,839 52,569 56,109 51,087 50,173 121,597 108,020 102,840
Biopharm segment:
Rare blood disorders 5,784 5,708 5,946 3,712 3,579 3,646 222 361 284 1,850 1,768 2,016 4,433 3,954 4,335 4,170 3,675 4,031 10,217 9,662 10,281
– of which Haemophilia A 1,625 1,332 1,176 1,162 983 877 24 16 15 439 333 284 487 381 382 460 358 358 2,112 1,713 1,558
– of which Haemophilia B 400 306 197 268 199 149 4 — — 128 107 48 237 212 185 102 86 77 637 518 382
– of which NovoSeven
®
3,673 3,996 4,502 2,225 2,352 2,577 194 345 269 1,254 1,299 1,656 3,548 3,207 3,617 3,461 3,089 3,454 7,221 7,203 8,119
Rare endocrine disorders 4,880 4,832 4,225 2,212 2,220 1,960 167 66 36 2,501 2,546 2,229 2,423 2,875 3,052 2,400 2,857 3,037 7,303 7,707 7,277
Other Biopharm 1,064 1,108 1,122 837 886 912 6 5 5 221 217 205 619 449 501 330 205 245 1,683 1,557 1,623
Biopharm total 11,728 11,648 11,293 6,761 6,685 6,518 395 432 325 4,572 4,531 4,450 7,475 7,278 7,888 6,900 6,737 7,313 19,203 18,926 19,181
Total sales by geographical area 73,537 65,829 61,564 37,706 34,297 32,208 16,019 14,084 12,844 19,812 17,448 16,512 67,263 61,117 60,457 63,009 57,824 57,486 140,800 126,946 122,021
Total sales growth as reported 11.7% 6.9% 12.1% 9.9% 6.5% 10.2% 13.7% 9.7% 13.8% 13.5% 5.7% 14.6% 10.1% 1.1% 6.2% 9.0% 0.6% 5.5% 10.9% 4.0% 9.1%
Novo Nordisk Annual Report 2021 58Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
2.3 Research and development costs
DKK million 2021 2020 2019
Employee costs (note 2.4) 7,328 6,269 5,968
Amortisation and impairment
losses, intangible assets
(note 3.1) 744 1,025 522
Depreciation and impairment
losses, property, plant and
equipment (note 3.1) 736 724 783
Other research and
development costs 8,964 7,444 6,947
Total research and
development costs 17,772 15,462 14,220
As percentage of net sales 12.6% 12.2% 11.7%
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
– human growth hormone and new modes of action for treatment of growth
disorders and other rare endocrine disorders
– new indications with existing assets within NASH, Alzheimer’s, and chronic
kidney disease
– new research platforms including cell therapy and RNAi for treatment
of NASH, 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 focus on new technology
platforms including stem cells, gene therapy and developing RNAi therapies.
Research and development activities are carried out by Novo Nordisk's
research and development centres, mainly 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.
Accounting policies
Novo Nordisk expenses all research costs. In line with industry practice,
internal and subcontracted development costs are also expensed as
they are incurred, due to signicant regulatory uncertainties and other
uncertainties inherent in the development of new products. 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.
Research and development costs primarily comprise employee costs,
and internal and external costs related to execution of studies, including
manufacturing costs and facility costs of the research centres. The costs
also comprise amortisation, depreciation and impairment losses related
to software and property, plant and equipment used in the research and
development activities. Impairment losses recognised on intangible assets
related to research and development projects are presented in research and
development costs.
Certain research and development activities are recognised outside research
and development costs:
– Royalty expenses paid to partners after regulatory approval are expensed
as cost of goods sold.
– Royalty income received from partners is recognised as part of other
operating income and expenses.
– 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 2021 2020 2019
Wages and salaries 28,939 26,778 25,335
Share-based payment costs
(note 5.1) 1,040 823 363
Pensions – dened contribution
plans 2,022 1,961 1,910
Pensions – dened benet plans
(note N/A)
139 138 151
Other social security contributions 2,203 1,862 1,963
Other employee costs 2,189 2,044 2,203
Total employee costs for the year 36,532 33,606 31,925
Employee costs capitalised as
intangible assets and property,
plant and equipment (1,240) (1,279) (1,314)
Change in employee costs
capitalised as inventories (56) (60) (139)
Total employee costs
in the income statement 35,236 32,267 30,472
Included in the income statement:
Cost of goods sold 9,611 8,896 8,134
Sales and distribution costs 15,003 14,146 13,463
Research and development costs 7,328 6,269 5,968
Administrative costs 3,098 2,848 2,679
Other operating income and
expenses 196 108 228
Total employee costs in the
income statement 35,236 32,267 30,472
Number of employees 2021 2020 2019
Average number of
full-time employees 46,171 43,759 42,218
Year-end number of
full-time employees 47,792 44,723 42,703
Employees (total) 48,478 45,323 43,258
Novo Nordisk Annual Report 2021 59Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Remuneration to Executive Management and Board of Directors
DKK million 2021 2020 2019
Salary and short-term incentive 126 119 120
Pension 12 26 26
Benets 10 10 14
Long-term incentive
1
100 52 40
Severance payments 29 — —
Executive Management in total
2
277 207 200
Fee to Board of Directors
2
17 17 19
Total 294 224 219
1. Please refer to note 5.1 for further information.
2. Total remuneration for registered members of Executive Management amounts to
DKK 0 million (DKK 141 million in 2020 and DKK 135 million in 2019). All members of
the Board of Directors are registered.
Wages, salaries, social security contributions, annual leave and sick leave,
bonuses and non-monetary benets are recognised in the year in which
the associated services are rendered by employees of Novo Nordisk. Where
Novo Nordisk provides long-term employee benets, 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 prot 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.
2.6 Income taxes and deferred income taxes
Income taxes expensed
DKK million 2021 2020 2019
Current tax on prot for the year 13,871 11,557 11,275
Deferred tax on prot for the year (1,528) 1,105 (1,559)
Tax on prot for the year 12,343 12,662 9,716
Current tax adjustments recognised
for prior years (603) (563) (191)
Deferred tax adjustments
recognised for prior years (417) (1,107) 77
Income taxes in the
income statement 11,323 10,992 9,602
Tax on other comprehensive
income for the year,
(income)/expense (1,005) 577 231
Computation of eective tax rate
DKK million 2021 2020 2019
Statutory corporate income tax
rate in Denmark 22.0% 22.0% 22.0%
Deviation in foreign subsidiaries'
tax rates compared to the Danish
tax rate (net) (1.5%) (2.5%) (2.1%)
Non-taxable income less non-tax-
deductible expenses (net) (0.3%) (0.2%) 0.1%
Other adjustments (net) (1.0%) 1.4% (0.2%)
Eective tax rate 19.2% 20.7% 19.8%
Income taxes paid
DKK million 2021 2020 2019
Income taxes paid in Denmark for
current year 9,703 4,262 7,774
Income taxes paid outside
Denmark for current year 3,439 4,508 2,258
Income taxes paid/repayments
relating to prior years 1,296 1,336 904
Income taxes paid 14,438 10,106 10,936
The deviation in foreign subsidiaries' tax rates from the Danish tax rate is
mainly driven by Swiss business activities as well as adjustments to deferred
tax assets due to changes in local corporate tax rates. Other adjustments
consist of tax related to acquisitions and subsequent transfers of intellectual
property rights and adjustments to prior years.
In 2020, income taxes paid in Denmark and paid outside Denmark were
impacted by transfers of intellectual property rights related to acquisitions.
In 2021, the impact from acquisitions and transfer of intellectual property
rights was less signicant.
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.
Deferred income taxes arise from temporary dierences between the
accounting and tax values of the individual consolidated companies and
from realisable tax loss carry-forwards. However, 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, aects neither accounting nor taxable prot
or loss and does not give rise to equal taxable and deductible temporary
dierences. 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 prots. A provision for
withholding tax is only recognised if a concrete distribution of dividends
is planned. The unrecognised potential withholding tax amounts to
DKK 444 million (DKK 337 million in 2020).
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 2021 60Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Key accounting estimate 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 sucient taxable income
will be available in the future, against which the temporary dierences and
unused tax losses can be utilised. The total tax value of unrecognised tax
loss carry-forwards amounts to DKK 166 million in 2021 (DKK 628 million
in 2020).
Development in deferred income tax assets and liabilities
DKK million
Property,
plant and
equipment
Intangible
assets Inventories
Liabilities Other
Oset
within
countries Total
2021
Net deferred tax asset/(liability) at 1 January (1,614) (3,600) 2,556 4,617 1,404 — 3,363
Income/(charge) to the income statement (330) 632 387 2,037 (781) 1,945
Income/(charge) to other comprehensive income — 2 251 (41) 793 1,005
Income/(charge) to equity — (2) — — 194 192
Additions from acquisitions — (4,456) — — 976 (3,480)
Eect of exchange rate adjustment (36) 49 1 319 43 376
Net deferred tax asset/(liability) at 31 December (1,980) (7,375) 3,195 6,932 2,629 — 3,401
Classied as follows:
Deferred tax asset at 31 December 719 109 3,210 7,223 3,541 (6,130) 8,672
Deferred tax liability at 31 December (2,699) (7,484) (15) (291) (912) 6,130 (5,271)
2020
Net deferred tax asset/(liability) at 1 January (1,591) (718) 1,811 3,452 1,087 — 4,041
Income/(charge) to the income statement (47) (2,883) 963 1,449 520 2
Income/(charge) to other comprehensive income — 92 (216) 16 (469) (577)
Income/(charge) to equity — (92) — — 20 (72)
Additions from acquisitions — — — — 276 276
Eect of exchange rate adjustment 24 1 (2) (300) (30) (307)
Net deferred tax asset/(liability) at 31 December (1,614) (3,600) 2,556 4,617 1,404 — 3,363
Classied as follows:
Deferred tax asset at 31 December 755 46 2,568 4,895 2,903 (5,302) 5,865
Deferred tax liability at 31 December (2,369) (3,646) (12) (278) (1,499) 5,302 (2,502)
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 probable
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.
2.7 Earnings per share
2021 2020 2019
Net prot 47,757 42,138 38,951
Average number of
shares outstanding
in million
shares 2,296.6 2,333.9 2,374.3
Dilutive eect of
average outstanding
share pool
1,2
in million
shares 6.5 6.1 4.4
Average number of
shares outstanding,
including dilutive
eect of outstanding
share pool
in million
shares 2,303.1 2,340.0 2,378.7
Basic earnings
per share DKK 20.79 18.05 16.41
Diluted earnings
per share DKK 20.74 18.01 16.38
1. For further information on the development in treasury shares, please refer to note 4.2
2. For further information on the outstanding share pool, please refer to note 5.1.
Accounting policies
Earnings per share is presented as both basic and diluted earnings per
share. Basic earnings per share is calculated as net prot divided by the
monthly average number of shares outstanding. Diluted earnings per share
is calculated as net prot divided by the sum of monthly average number
of shares outstanding, including the dilutive eect of the outstanding share
pool. Please refer to 'Financial denitions' for a description of calculation of
the dilutive eect.
Novo Nordisk Annual Report 2021 61Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Section 3
Operating assets
and liabilities
3.1 Intangible assets and property, plant and
equipment
Out of total property, plant and equipment and intangible assets,
DKK 46,705 million is located in Denmark (DKK 44,431 million in 2020) and
DKK 41,035 million is located in the US (DKK 18,750 million in 2020) where
the Group's main production, lling, packaging, moulding, assembly facilities
and intangible assets are located.
DKK million Goodwill
Intellec-tual
property
rights
Software
and other
intangibles
Total
intangible
assets
Land and
buildings
Plant and
machinery
Other
equipment
Assets
under
construction
Property,
plant and
equipment
2021
Cost at the beginning of the year — 22,404 2,936 25,340 37,509 31,503 6,876 10,798 86,686
Additions from acquisition of businesses (note 5.3) 4,346 18,687 24 23,057 522 — 57 3 582
Additions during the year — 583 492 1,075 827 890 516 4,858 7,091
Disposals during the year — — (45) (45) (359) (148) (305) (41) (853)
Transfer and reclassications — — — — 1,529 3,078 468 (5,075) —
Eect of exchange rate adjustment — 128 27 155 1,048 621 164 548 2,381
Cost at the end of the year 4,346 41,802 3,434 49,582 41,076 35,944 7,776 11,091 95,887
Amortisation/depreciation and impairment losses at
the beginning of the year — 3,135 1,548 4,683 12,936 19,444 4,037 — 36,417
Amortisation/depreciation for the year — 866 200 1,066 1,892 1,529 824 — 4,245
Impairment losses for the year — 573 — 573 14 32 54 41 141
Amortisation/depreciation and impairment losses
reversed on disposals during the year — — (1) (1) (365) (140) (305) (41) (851)
Eect of exchange rate adjustment — 78 12 90 192 273 108 — 573
Amortisation/depreciation and impairment losses at
the end of the year — 4,652 1,759 6,411 14,669 21,138 4,718 — 40,525
Carrying amount at the end of the year 4,346 37,150 1,675 43,171 26,407 14,806 3,058 11,091 55,362
2020
Cost at the beginning of the year — 7,270 2,560 9,830 30,260 27,594 6,215 20,351 84,420
Additions during the year — 15,906 396 16,302 741 506 490 4,560 6,297
Disposals during the year — (698) — (698) (119) (583) (122) (16) (840)
Transfer and reclassications — — — — 7,440 4,586 515 (12,541) —
Eect of exchange rate adjustment — (74) (20) (94) (813) (600) (222) (1,556) (3,191)
Cost at the end of the year — 22,404 2,936 25,340 37,509 31,503 6,876 10,798 86,686
Amortisation/depreciation and impairment losses at
the beginning of the year — 2,643 1,352 3,995 11,528 18,888 3,453 — 33,869
Amortisation/depreciation for the year — 889 207 1,096 1,859 1,500 821 — 4,180
Impairment losses for the year — 350 — 350 14 69 28 16 127
Amortisation/depreciation and impairment losses
reversed on disposals during the year — (698) — (698) (119) (581) (115) (16) (831)
Eect of exchange rate adjustment — (49) (11) (60) (346) (432) (150) — (928)
Amortisation/depreciation and impairment losses at
the end of the year — 3,135 1,548 4,683 12,936 19,444 4,037 — 36,417
Carrying amount at the end of the year — 19,269 1,388 20,657 24,573 12,059 2,839 10,798 50,269
Novo Nordisk Annual Report 2021 62Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Intangible assets
Amortisation and impairment losses
DKK million 2021 2020 2019
Cost of goods sold 844 369 916
Sales and distribution costs 39 40 24
Research and development costs 744 1,025 522
Administrative costs 11 10 3
Other operating income and
expenses 1 2 4
Total amortisation and
impairment loss 1,639 1,446 1,469
Total amortisation 1,066 1,096 487
Total impairment losses 573 350 982
Of the total addition of intangible assets in 2021 DKK 492 million is internally
developed (DKK 396 million in 2020).
Intangible assets with an indenite useful life and intangible assets not yet
available for use amount to DKK 22,690 million (DKK 9,607 million in 2020),
primarily intellectual property rights in relation to research and development
projects and goodwill.
2021 additions
Additions from acquisition of businesses relates to Novo Nordisk’s
acquisition of Dicerna Pharmaceuticals, Inc., which primarily includes
the RNAi research technology platform and pipeline assets, which are
recognised within intellectual property rights and goodwill; please refer
to note 5.3.
In 2021, Novo Nordisk acquired Prothena’s wholly-owned subsidiary
Neotope Neuroscience Ltd. and thereby gained full worldwide rights to
the intellectual property rights of Prothena’s ATTR amyloidosis business
and pipeline cover. The acquisition included the clinical stage antibody
PRX004. PRX004 is an antibody that uses a depleter mechanism that has
the potential to improve heart failure symptoms and reverse the disease
progression within the ATTR-CM diseases. The transaction has been
accounted for as an asset acquisition recognised in intellectual property
rights, all related to PRX004.
2020 additions
In 2020, Novo Nordisk acquired Corvidia Therapeutics Inc., in a transaction
accounted for as an asset acquisition. An addition of DKK 4,580 million was
recognised in intellectual property rights for the acquisition of Ziltivekimab, a
fully human monoclonal antibody directed against Interleukin-6 related to
chronic kidney disease, which is under development.
Novo Nordisk acquired Emisphere Technologies Inc. and obtained
ownership of the Eligen
®
SNAC oral delivery technology. Under the terms
of the agreement, Novo Nordisk acquired all outstanding shares of
Emisphere for USD 1,335 million. As part of the transaction, Novo Nordisk
also acquired related Eligen
®
SNAC royalty stream obligations owed to
MHR Fund Management LLC (MHR), the largest shareholder of Emisphere,
for USD 450 million. The transaction has been accounted for as an asset
acquisition, with DKK 11,060 million recognised in intellectual property
rights, of which DKK 2,467 million was related to assets under development.
At 31 December 2021, the carrying amount of acquired intangible assets
related to Rybelsus is DKK 7,150 million (DKK 7,716 million in 2020), which
has a remaining amortisation period of 13 years.
Impairment of intangible assets
In 2021, an impairment loss of DKK 573 million (DKK 350 million in 2020)
was recognised, all related to intellectual property rights. DKK 436 million
(DKK 350 million in 2020) of the impairment was related to the Diabetes
and Obesity care segment and DKK 137 million (none in 2020) related to
Biopharm. The entire impairment loss in 2021 was recognised in research
and development costs (DKK 350 million in research and development
costs in 2020). 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 identied in 2021 or
in 2020.
It is assessed that the carrying amount of goodwill which arose from the
acquisition of Dicerna Pharmaceuticals, Inc. on 28 December 2021 still
reected the fair value as of 31 December 2021. An impairment test has not
been performed on goodwill due to the timing of the acquisition three days
before year-end, and no impairment indicators have been identied in the
period from the acquisition to 31 December 2021.
The allocation of goodwill of DKK 4,346 million to cash-generating units is
considered provisional due to the fact that the transaction was closed on 28
December 2021, leaving limited time for determining the cash-generating units.
The allocation will be nalised within 12 months from the acquisition date.
Accounting policies
Goodwill on acquisition of businesses is initially measured at cost, and is
subsequently measured at cost less any accumulated impairment losses.
Intellectual property rights acquired for research and development
projects, are carried at historical cost less accumulated amortisation and
any impairment loss. Upfront fees and acquisition costs are capitalised and
subsequent milestone payments payable on achievement of a contingent
event will be capitalised on the contingent event being probable of being
achieved. Intangible assets acquired in a business combination are
recognised at fair value at the acquisition date.
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 begins after regulatory
approval has been obtained or when assets are put in use.
Goodwill and intangible assets with an indenite useful life and intangible
assets not yet available for use are not subject to amortisation. They
are tested annually for impairment, irrespective of whether there is any
indication that they may be impaired. The carrying amount of goodwill will
within 12 months from acquisition date be allocated to cash-generating
units for impairment testing purposes. The allocation is made to those cash-
generating units that are expected to benet from the business combination
in which the goodwill arose. The units are identied at the lowest level at
which goodwill is monitored for internal management purposes.
Internal development of software for internal use is recognised as intangible
assets if the recognition criteria are met, for example a signicant business
system where the expenditure leads to the creation of a durable asset.
Amortisation is based on the straight-line method over the estimated useful
life of 3-15 years. The amortisation begins when the asset is in the location
and condition necessary for it to be capable of operating in the manner
intended by Management.
Research and development projects
Internal and subcontracted research costs are charged in full 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; please 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
Novo Nordisk Annual Report 2021 63Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
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, intellectual property rights,
the likelihood of obtaining future commercial sales is reected in the cost of
the asset, and thus the probability recognition criteria is always considered
to be satised. As the cost of acquired research and development projects
can often be measured reliably, these projects full 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.
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.
– Changes in the legal framework covering patents, rights and licences.
– Advances in medicine and/or technology that aect the medical
treatments.
– Lower-than-predicted sales.
– 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.
– Changes or anticipated changes in participation rates or
reimbursement policies.
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 ows. Impairments on intangible assets, other than goodwill, are
reviewed at each reporting date for possible reversal.
Key accounting estimates and judgements on intangible assets
Impairment tests of intellectual property rights not yet available for use are
based on Management’s projections and anticipated net present value of
estimated future cash ows from marketable products.
Management makes judgements related to intangible assets when
assessing whether a transaction is a business combination or an asset
acquisition. The assessment of whether a transaction is a business
combination or an asset acquisition involves the optional concentration test,
which is met if substantially all of the fair value of the gross assets acquired
is concentrated in a single identiable asset or group of similar identiable
assets. If met the transaction is accounted for as an asset acquisition. If not
met, an assessment of any acquired processes is made to determine if they
are substantive. Management makes judgements when assessing whether
a process is substantive. A process is considered substantive if it is critical to
the ability to producing outputs from the transaction.
Judgements are also made in evaluating whether payments under
collaboration arrangements are acquisition of assets or prepayment of R&D
services.
Property, plant and equipment
Depreciation and impairment losses
DKK million 2021 2020 2019
Cost of goods sold 2,836 2,729 2,656
Sales and distribution costs 409 403 354
Research and development costs 736 724 783
Administrative costs 386 433 376
Other operating income and
expenses 19 18 23
Total depreciation and
impairment losses 4,386 4,307 4,192
Of which related to leased assets 899 964 852
Capital expenditure in the reporting period was primarily related to
investments in facility upgrades and new production facilities for active
pharmaceutical ingredients for diabetes, mainly the facility in Clayton, US.
The facility in Clayton is intended to strengthen the Novo Nordisk supply
chain. Capital expenditure also related to investments in facility upgrades
of the purication plant and establishing additional API capacity, both in
Kalundborg.
Leased property, plant and equipment
DKK million 2021 2020
Land and buildings 3,340 2,901
Other equipment 499 479
Total 3,839 3,380
Novo Nordisk mainly leases oce buildings, warehouses, laboratories
and vehicles. The right-of-use asset is presented in property, plant and
equipment and the lease liability in borrowings. In 2021, the total amount
recognised in the income statement related to leases was DKK 1,303 million
(DKK 1,373 million in 2020). The total cash outow for leases amounted to
DKK 1,275 million (DKK 1,367 million in 2020).
As of 31 December 2021, the lease liability excludes potential lease
payments of DKK 2,209 million (undiscounted) related to lease term
extension rights on properties that were not considered reasonably certain
to be exercised (DKK 2,363 million in 2020). Please refer to note 4.5 for a
maturity analysis of lease payments.
Novo Nordisk Annual Report 2021 64Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Accounting policies
Property, plant and equipment is measured at historical cost less
accumulated depreciation and any impairment loss. The cost of self-
constructed assets includes costs directly and indirectly 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 benets associated with the item will ow 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 lives of the
assets (buildings: 12-50 years, plant and machinery: 5-25 years and other
equipment: 3-10 years. Land is not depreciated).
The 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 assets’ residual values and
useful lives are 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 development costs.
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.
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, please refer to
note 4.9.
3.2 Inventories
DKK million 2021 2020
Raw materials 4,310 3,326
Work in progress 12,285 12,252
Finished goods 5,282 5,111
Total inventories (gross) 21,877 20,689
Write-downs at year-end (2,256) (2,153)
Total inventories (net) 19,621 18,536
Indirect production costs included in work in
progress and nished goods 8,929 9,703
Share of total inventories (net) 46% 52%
Movements in inventory write-downs:
Write-downs at the beginning of the year 2,153 1,426
Write-downs during the year 883 1,628
Utilisation of write-downs (661) (528)
Reversal of write-downs (119) (373)
Write-downs at the end of the year 2,256 2,153
All write-downs in both 2021 and 2020 relate to fully impaired inventory.
Accounting policies
Inventories are stated at cost or net realisable value, whichever is lower.
Cost is determined using the rst-in, rst-out method. Cost comprises direct
production costs such as raw materials, consumables and labour. Production
costs for work in progress and nished 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 development 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.
Key accounting estimate of indirect production costs capitalised
The production of both Diabetes and Obesity care and Biopharm products
is highly complex from fermentation to purication and formulation,
including quality control of all production processes. Furthermore, the
process is very sensitive to manufacturing conditions. These factors all
inuence the parameters for capitalisation of indirect production costs at
Novo Nordisk and the full cost of the products. Indirect production costs are
initially measured using a standard cost method. This is reviewed regularly
to ensure relevant measures of capacity utilisation, production lead time,
cost base and other relevant factors, hence inventory is valued at actual cost.
When calculating total inventory, Management must estimate cost of
production, standard cost variances and idle capacity in determining
indirect production costs for capitalisation. Changes in the parameters for
calculation of indirect production costs could have an impact on the gross
margin and the overall valuation of inventories. Indirect production costs
account for 46% of the net inventory value, reecting a complex production
process and low direct raw material costs.
Novo Nordisk Annual Report 2021 65Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
3.3 Trade receivables
DKK million
Gross
carrying
amount
Loss
allowance
Net
carrying
amount
2021
Not yet due 40,274 (844) 39,430
1-90 days 1,132 (93) 1,039
91-180 days 212 (74) 138
181-270 days 87 (51) 36
271-360 days 63 (63) —
More than 360 days past due 305 (305) —
Trade receivables 42,073 (1,430) 40,643
EMEA 7,827 (852) 6,975
China 2,564 — 2,564
Rest of World 4,227 (558) 3,669
North America Operations 27,455 (20) 27,435
Trade receivables 42,073 (1,430) 40,643
2020
Not yet due 27,511 (805) 26,706
1-90 days 1,000 (112) 888
91-180 days 188 (63) 125
181-270 days 44 (29) 15
271-360 days 51 (51) —
More than 360 days past due 320 (320) —
Trade receivables 29,114 (1,380) 27,734
EMEA 6,306 (781) 5,525
China 2,137 — 2,137
Rest of World 3,003 (580) 2,423
North America Operations 17,668 (19) 17,649
Trade receivables 29,114 (1,380) 27,734
Movements in allowance for doubtful trade receivables
DKK million 2021 2020
Carrying amount at the beginning of the year 1,380 1,484
Reversal of allowance on realised losses (62) (108)
Net movement recognised in income statement 102 139
Eect of exchange rate adjustment 10 (135)
Allowance at the end of the year 1,430 1,380
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 uctuations, high ination 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 2021 have overall remained unchanged from
2020. However, despite the continued COVID-19 pandemic Novo Nordisk
has not experienced signicant increases in collectability issues on individual
customers nor has it experienced signicant deterioration in the ageing of
receivables.
Please refer to note 4.3 for the trade receivable programmes.
Accounting policies
Trade receivables are initially recognised at transaction price and
subsequently measured at amortised cost using the eective 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 o are credited against sales
and distribution costs.
Management makes allowance for doubtful trade receivables based on the
simplied approach to provide for expected credit losses, which permits
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 specic customer knowledge. The allowance is based
on a provision matrix on days past due and a forward looking-element
relating mainly to incorporation of the Dun & Bradstreet country risk
rating and an individual assessment. Please refer to note 4.3 for a general
description of credit risk.
Novo Nordisk Annual Report 2021 66Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
3.4 Provisions and contingent liabilities
DKK million
Provisions
for sales
rebates
1
Provisions
for legal
disputes
Provisions
for product
returns
Other
provi-
sions
2
2021 Total 2020 Total
At the beginning of the year 34,052 2,451 795 2,042 39,340 35,733
Additional provisions, including increases to existing provisions 155,602 608 493 461 157,164 113,810
Amount used during the year (141,370) (657) (450) (214) (142,691) (107,220)
Adjustments, including unused amounts reversed during the year (284) (419) 13 (280) (970) 78
Eect of exchange rate adjustment 2,822 174 7 48 3,051 (3,061)
At the end of the year 50,822 2,157 858 2,057 55,894 39,340
Non-current liabilities3 255 1,895 316 1,908 4,374 4,526
Current liabilities 50,567 262 542 149 51,520 34,814
1. Provisions for sales rebates are related to US Managed Care, Medicare, Medicaid and other US rebate types, as well as rebates in a number of European countries and Canada.
2. Other provisions consists of various types of provision, including obligations in relation to employee benets such as jubilee benets, company-owned life insurance, etc.
3. For non-current liabilities, provision for sales rebates is expected to be settled after one year, provisions for product returns will be utilised in 2023 and 2024. 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 uncertainties connected with
these estimates.
In September 2021, Novo Nordisk announced that it has reached an
agreement in principle to settle the previously disclosed securities class
action litigation pending in the Federal District Court of New Jersey, US. The
settlement was reached after a voluntary mediation process and resolves
claims brought by plaintis for alleged violations of US securities laws. The
settlement contains no admission of liability, wrongdoing, or responsibility
by any of the defendants and will include a full release of all defendants in
connection with the allegations made in the lawsuit. Under the terms of the
settlement agreement, Novo Nordisk has agreed to pay USD 100 million
(inclusive of all plaintis’ attorneys fees and expenses and settlement costs).
The payment is covered by insurance.. The settlement is subject to a court
approval process, which could take several months.
In January 2022, Novo Nordisk announced that it has settled the previously
disclosed securities lawsuit led against Novo Nordisk in Denmark by a
number of institutional shareholders, which included a claim for a total
amount of DKK 11,800 million. The lawsuit alleged that Novo Nordisk made
misleading statements and did not make appropriate disclosures regarding
its sales of insulin products in the US. The settlement contains no admission
of liability, wrongdoing or responsibility by Novo Nordisk and no payment
will be made by Novo Nordisk to the plaintis.
Pending litigation against Novo Nordisk
Numerous claims alleging pancreatic cancer, pancreatitis, and thyroid cancer
have been led in US courts against various incretin class manufacturers,
including Victoza
®
and Novo Nordisk. As of 31 January 2022, 369 plaintis
have led product liability cases against Novo Nordisk, the vast majority
alleging pancreatic cancer. In March and April 2021, the Federal MDL and
State JCCP courts granted defendants’ motions for summary judgment on
federal pre-emption and general causation grounds thereby dismissing all
the pending cases against Novo Nordisk relating to Victoza
®
. Plaintis have
led a notice of appeal of the Federal Court ruling, and they have the right
to le a similar notice of appeal of the State Court ruling. Final decisions on
both appeals are not expected before the end of 2022. Novo Nordisk does
not expect the lawsuit to have a material impact on Novo Nordisk’s nancial
position, operating prot or cash ow.
Novo Nordisk is currently defending eight lawsuits, including two plead as
putative class actions, relating to the pricing of diabetes medicines. Four
of these cases are pending in New Jersey federal court; three are pending
in federal courts in Texas, Florida, and Mississippi and the remaining one
is pending in state court in Kentucky. All pending matters also name as
defendants Eli Lilly and Company and Sano, while certain matters also
name Pharmacy Benet Managers (PBMs) and related entities. Plaintis
generally allege that the manufacturers and PBMs colluded to articially
inate list prices paid by consumers for diabetes products, while oering
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 nancial position, operating prot, or cash ow.
In 2016, Novo Nordisk US received a Civil Investigative Demand from the U.S.
Department of Justice (“DOJ CID”) relating to potential o-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 led by a former Novo Nordisk US employee (the “Relator”) under
seal in the Western District of Oklahoma. Relator alleges Novo Nordisk
US caused the submission of false claims to Medicare, Medicaid, Federal
Employees Health Benets Program and private insurers in California as a
result of the same conduct that was the subject of the DOJ CID. As a result
of these allegations, Relator (on behalf of the federal and certain state
governments) seeks injunctive and monetary relief. A consolidated complaint
was jointly led by Relator and the State of Washington on 9 March 2020.
The consolidated complaint was unsealed (made public) by the court on
28 May 2020. Novo Nordisk has led two motions seeking dismissal of the
complaint, both of which are currently pending and awaiting ruling from the
Court. Novo Nordisk does not expect the lawsuit to have a material impact
on Novo Nordisk’s nancial position, operating prot or, cash ow.
Since January 2021, Novo Nordisk has 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’s
contract pharmacy policy has been challenged by the US Department of
Health and Human Services. On 17 May 2021, the US government issued
a letter to Novo Nordisk asserting that Novo Nordisk’s policy violates the
340B statute. Novo Nordisk believes its policy does not violate the 340B
Drug Pricing Program requirements and has commenced litigation against
the government seeking a declaration that its 340B policy is consistent with
relevant US laws. On 5 November 2021, the US District Court for the District
of New Jersey issued a decision on Novo Nordisk’s motion for summary
judgment holding that the use of contract pharmacies is consistent with
the 340B statute and that manufacturers have no statutory right to impose
Novo Nordisk Annual Report 2021 67Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
restrictions on the sale or distribution of 340B drugs. Novo Nordisk has
appealed the decision to the US Court of Appeals for the Third Circuit. A
decision on this appeal is not expected before the end of 2022. Depending
on the outcome of these matters, there may be a signicant impact on Novo
Nordisk’s nancial position, net sales and cash ow.
Mosaic Health Inc. and Central Virginia Health Services, Inc. (both 340B
covered entities) led a putative class action lawsuit in NY Federal Court
against Novo Nordisk US, Eli Lilly, Sano and AstraZeneca alleging a
conspiracy among the manufacturers to articially x prices of diabetes
medications through changes to their policies relating to the distribution of
340B drugs through contract pharmacy arrangements. A motion to dismiss
the lawsuit has been led and is currently pending before the Court.
Novo Nordisk does not expect the lawsuits to have a material impact on
Novo Nordisk’s nancial position, operating prot, or cash ow.
Pending claims against Novo Nordisk and Investigations involving
Novo Nordisk
Several authorities in the US have served Novo Nordisk with Civil Investigative
Demands (CIDs) or subpoenas calling for the production
Novo Nordisk is one of several pharmaceutical companies that received
requests for information involving pricing practices for its diabetes products
from several committees of the Unites States House of Representatives
and/or United States Senate. Novo Nordisk has responded to the various
committees in response to their requests. Novo Nordisk does not expect
the inquiries to have a material impact on Novo Nordisk’s nancial position,
operating prot, or cash ow.
Other contingent liabilities
In addition to the above, the Novo Nordisk Group is engaged in certain
litigation proceedings and various ongoing audits and investigations. In
the opinion of Management, neither settlement or continuation of such
proceedings, nor such pending audits and investigations, are expected to
have a material eect on Novo Nordisk’s nancial position, operating prot,
or cash ow.
Accounting policies
Provisions for sales rebates and discounts granted to government agencies,
wholesalers, retail pharmacies, Managed Care and other customers
are recorded at the time the related revenues are recorded or when
the incentives are oered. Provisions are calculated based on historical
experience and the specic 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. Please 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 outow 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 reects
current market assessments of the time value of money and the risks
specic to the obligation. The increase in the provision for interest is
recognised as a nancial 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.
Key accounting estimates regarding ongoing legal disputes, litigation
and investigations
Provisions for legal disputes consist of various types of provisions linked to
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 counsels 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.
of documents and information. Below is a list of ongoing matters:
– Washington Attorney General’s Oce CID (March 2017), relating to, among
other things, pricing, and trade practices for insulin products, including
Levemir
®
, NovoLog
®
, and Novolin
®
, from 1 January 2005 through the
present date.
– New Mexico Attorney General’s Oce CID (April 2017), relating to, among
other things, trade practice and pricing of insulin products, namely
NovoLog
®
and Novolin
®
from 1 January 2012 through the present date.
– New York State Attorney General’s Oce Subpoena (July 2019), relating to,
among other things, pricing, and trade practices for insulin products, from
1 July 2013 through the present.
– Colorado Attorney General’s Oce CID (December2019), relating to, among
other things, pricing, and trade practices for insulin products, for the period
from 1 January 2010 to present.
– Vermont Attorney General’s Oce Subpoena (December 2020), related to,
among other things, pricing and trade practices for insulin products sold by
Novo Nordisk during the period 1 January 2011 through the present date.
– US Department of Justice (December 2021), relating to the nancial
relationships with healthcare professional and prescriptions for Ozempic
®
and Rybelsus
®
during the period of 1 January 2016 to present.
In all matters Novo Nordisk is cooperating with the authorities in question.
Novo Nordisk does not expect the above investigations to have a material
impact on Novo Nordisk’s nancial position, operating prot, or cash ow.
3.5 Other liabilities
Other liabilities primarily comprises employee cost payables, payables
related to non-current assets, sales rebates as well as deferred revenue.
Novo Nordisk Annual Report 2021 68Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Section 4
Capital structure
and nancial items
4.1 Distribution to shareholders
DKK million 2021 2020 2019
Interim dividend for the year 8,021 7,570 7,100
Dividend for prior year 13,496 12,551 12,309
Share repurchases for the year 19,447 16,855 15,334
Total 40,964 36,976 34,743
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.
The net cash distribution to shareholders in the form of dividends and share
repurchases amounts to DKK 40,964 million, compared with a free cash ow
of DKK 29,319 million.
The total dividend for 2021 amounts to DKK 23,711 million (DKK 10.40 per
share). The 2021 nal dividend of DKK 15,690 million (DKK 6.90 per share) is
expected to be distributed pending approval at the Annual General Meeting.
The interim dividend of DKK 8,021 million (DKK 3.50 per share) was paid in
August 2021. The total dividend for 2020 was DKK 21,066 million (DKK 9.10
per share), of which the nal dividend of DKK 13,496 million (DKK 5.85 per
share) was paid in March 2021. No dividend is declared on treasury shares.
Novo Nordisk's dividend pay-outs are complemented by share repurchase
programmes.
4.2 Share capital, Treasury shares and Other reserves
Development in number of shares
Million shares A shares B shares Total
Shares beginning of 2020 537 1,863 2,400
Shares cancelled in 2020 — (50) (50)
Outstanding shares end of 2020 537 1,813 2,350
Shares cancelled in 2021 — (40) (40)
Outstanding shares end of 2021 537 1,773 2,310
Each A share of DKK 0.2 per share carries 200 votes and each B share of
DKK 0.2 per share carries 20 votes. At the end of 2021, the share capital
amounted to DKK 107 million in A share capital (DKK 107 million in 2020 and
2019) and DKK 355 million in B share capital (DKK 363 million in 2020 and
DKK 373 million in 2019).
Treasury shares 2021 2020
Market
value,
DKK million
Treasury
shares in %
Number of
B shares
(million)
Number of
B shares
(million)
Holding at the be-
ginning of the year 16,016 1.6% 37.5 48.1
Cancellation of
treasury shares (17,066) (40.0) (50.0)
Transfer regarding
restricted stock units (486) (1.1) (0.4)
Purchase during the
year 19,447 34.7 39.8
Value adjustment 4,947 — —
Holding at the end
of the year 22,858 1.3% 31.1 37.5
Treasury shares are primarily acquired to reduce the company's share
capital. In addition, a limited part is used to nance Novo Nordisk's
long-term share-based incentive programme (restricted stock units) and
restricted stock units to employees. Treasury shares are deducted from
the share capital on cancellation at their nominal value of DKK 0.2 per
share. Dierences between this amount and the amount paid to acquire or
received for disposing of treasury shares are deducted directly in equity.
The purchase of treasury shares during the year relates to the remaining
part of the 2020 share repurchase programme, totalling DKK 1 billion and
the DKK 20 billion Novo Nordisk B share repurchase programme for 2021, of
which DKK 1.6 billion was outstanding at year-end. The programme ended
on 1 February 2022. Transfer of treasury shares relates to the long-term
share-based incentive programme and restricted stock units to employees.
Specication of Other reserves
DKK million
Exchange
rate ad-
justments
Cash ow
hedges
Tax and
other items Total
2019
Reserve at the
beginning of the year (1,065) (1,677) 696 (2,046)
Other comprehensive
income, net 226 1,348 (222) 1,352
Reserve at the end
of the year (839) (329) 474 (694)
2020
Other comprehensive
income, net (1,689) 1,713 (567) (543)
Transferred to
intangible assets1 — 418 (92) 326
Reserve at the end
of the year (2,528) 1,802 (185) (911)
2021
Other comprehensive
income, net 1,624 (3,557) 1,117 (816)
Transferred to
intangible assets1 — 15 (2) 13
Reserve at the end
of the year (904) (1,740) 930 (1,714)
For information on transfer of cash ow hedge reserve to intangible assets refer
to note 4.4.
According to Danish corporate law, reserves available for distribution as
dividends are based on the nancial statements of the parent company,
Novo Nordisk A/S. Dividends are paid from distributable reserves. As
of 31 December 2021 distributable reserves total DKK 51,114 million
(DKK 51,858 million in 2020), corresponding to the parent company's retained
earnings and reserve for cash ow hedges and exchange rate adjustments.
Novo Nordisk Annual Report 2021 69Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
4.3 Financial risks
Management has assessed the following key nancial risks:
Type Financial risk
Foreign exchange risk High
Credit risk Low
Liquidity risk Low
Interest rate risk Low
Novo Nordisk has centralised management of the Group's nancial risks. The
overall objectives and policies for the company's nancial risk management
are outlined in an 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
nancial 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 nancial positions, and all positions are marked-to-market.
Foreign exchange risk
Foreign exchange risk is the most important nancial risk for Novo Nordisk
and can have a signicant impact on the income statement, statement
of comprehensive income, balance sheet and cash ow statement. The
majority of Novo Nordisk's sales are in USD, EUR, CNY, JPY, CAD and GBP. The
foreign exchange risk is most signicant in USD, CNY and JPY, while the EUR
exchange rate risk is regarded as low because of Denmark's xed exchange
rate policy towards EUR.
The overall objective of foreign exchange risk management is to reduce the
short-term negative impact of exchange rate uctuations on earnings and
cash ow, thereby contributing to the predictability of the nancial results.
Novo Nordisk hedges existing assets and liabilities in key currencies as well
as future expected cash ows 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 ows are continually assessed
using historical inows, budgets and monthly sales forecasts.
Hedge eectiveness is assessed on a regular basis. Management has
chosen to classify the result of hedging activities as part of nancial items.
Key currencies gures
USD CNY JPY CAD GBP
Average exchange rate applied (DKK per 100)
2021 629 97 5.73 502 865
2020 654 95 6.13 488 839
2019 667 97 6.12 503 852
Year-end exchange rate applied (DKK per 100)
2021 657 103 5.70 517 885
2020 606 93 5.88 474 824
2019 668 96 6.11 511 877
Foreign exchange rate sensitivity analysis
At year-end, an immediate 5% increase/decrease in the disclosed currencies
versus DKK and EUR is estimated by Management to have the following
impact on Novo Nordisk's operating prot for the next 12 months.
Sensitivity on operating prot of an immediate 5% increase in key
currencies
1
DKK million USD CNY JPY CAD GBP
2022 2,350 360 230 200 120
2021 1,900 460 200 140 110
1. An immediate 5% decrease would have the opposite impact of the above.
Sensitivity of an immediate 5% increase in all other currencies rates on
31 December versus DKK and EUR
1
DKK million 2021 2020
Sensitivity of all currencies
Income statement 113 299
Other comprehensive income (2,677) (1,893)
Total (2,564) (1,594)
Sensitivity of USD
Income statement (87) 2
Other comprehensive income (2,218) (1,380)
Total (2,305) (1,378)
1. An immediate 5% decrease would have the opposite impact of the above.
The foreign exchange sensitivity analysis comprises eects from the Group's
cash, trade receivables and trade payables, current loans, current and non-
current nancial 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 USD CNY
1
JPY CAD GBP
2021 12 0 12 9 11
2020 10 6 12 9 11
1. Chinese yuan traded oshore (CNH) is used to hedge Novo Nordisk's CNY currency
exposure.
The table above shows nancial contracts existing at year-end to cover the
expected future cash ow for the disclosed number of months. During 2021,
the hedging horizon varied between 9 months and 12 months for USD, JPY,
CAD and GBP. Average hedge rate for USD cash ow hedges is 628 at the
end of 2021 (640 at the end of 2020).
Novo Nordisk Annual Report 2021 70Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Credit risk
Credit risk arises from the possibility that transactional counterparties
may default on their obligations, causing nancial losses for the Group.
Credit risk exposure to nancial counterparties
Credit exposure for cash at bank, marketable securities and derivative
nancial instruments (fair value)
DKK million
Cash at
bank
Marketable
securities
Derivative
nancial
instruments Total
2021
AAA range 477 6,765 — 7,242
AA range 3,726 — 585 4,311
A range 5,637 — 1,105 6,742
BBB range 23 — — 23
Not rated or below
BBB range 857 — — 857
Total 10,720 6,765 1,690 19,175
2020
AAA range — — — —
AA range 7,296 — 989 8,285
A range 4,443 — 1,343 5,786
BBB range 212 — — 212
Not rated or below
BBB range 806 — — 806
Total 12,757 — 2,332 15,089
Novo Nordisk considers its maximum credit exposure to nancial
counterparties to be DKK 19,175 million (DKK 15,089 million in 2020). In
addition, Novo Nordisk considers its maximum credit exposure to trade
receivables, other receivables (less prepayments and VAT receivables) and
other nancial assets to be DKK 43,425 million (DKK 29,522 million in 2020).
Please refer to note 4.9 for details of the Group's total nancial assets.
To manage credit risk regarding nancial counterparties, Novo Nordisk only
enters into derivative nancial contracts and money market deposits with
nancial counterparties possessing a satisfactory long-term credit rating
from at least two out of the three selected ratings agencies: Standard and
Poor's, Moody's and Fitch. Furthermore, maximum credit lines dened 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 AAA credit ratings.
Credit risk exposure to non-nancial counterparties
Outside the US, Novo Nordisk has no signicant concentration of credit
risk related to trade receivables or other receivables and prepayments, as
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 uctuations, high ination 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 2021
have overall remained unchanged from 2020 to 2021. However, despite
the continued COVID-19 pandemic Novo Nordisk has not experienced
signicant increases in collectability issues on individual customers nor has it
experienced signicant deterioration in the ageing of receivables.
Trade receivable programmes
At year-end, the Group had derecognised receivables without recourse
having due dates after 31 December 2021 amounting to:
DKK million 2021 2020 2019
US 1,313 1,817 3,672
Japan 2,453 2,351 2,149
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.
In addition, full non-recourse o-balance-sheet factoring arrangement
programmes are occasionally applied by Novo Nordisk subsidiaries around
the world, with limited impact on the Group's trade receivables.
Please refer to note 3.3 for the split of allowance for trade receivables by
geographical segment.
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 xed rate instruments
and the sensitivity towards interest rates on current debt of DKK 12,861
million (DKK 6,153 million in 2020) is countered by the interest sensitivity
on cash and cash equivalents of DKK 10,719 million (DKK 12,226 million
in 2020). Interest rate risk on marketable securities of DKK 6,765 million is
considered low due to a low portfolio duration.
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.
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 loans and bank overdrafts classied
as liabilities arising from nancing activities contractually obliged for
repayment within 12 months of the balance sheet date.
Financial reserves
DKK million 2021 2020 2019
Cash and cash equivalents
(note 4.6) 10,719 12,226 15,411
Marketable securities 6,765 — —
Undrawn committed credit facility
1
11,526 11,531 11,578
Undrawn bridge facility
2
— 5,577 —
Borrowings (Note 4.5) (12,861) (576) (595)
Financial reserves
3
16,149 28,758 26,394
1. The undrawn committed credit facility comprises a EUR 1,550 million facility
(EUR 1,550 million in 2020 and EUR 1,550 million in 2019) committed by a portfolio of
international banks. The facility matures in 2025.
2. For 2020, the undrawn bridge facility comprises the EUR 750 million (DKK 5,577
million) undrawn portion of EUR 1,500 million bridge facility. The facility was expected
to mature in 2021 but the terms provided that the maturity could be extended,
at the option of Novo Nordisk to June 2022. Financial reserves for 2020 include
amounts undrawn under credit facilities and overdrafts where the repayment is not
contractually required within 12 months. In accordance with IFRS, the DKK 5,577
million (EUR 750 million) drawn loan was classied as current borrowings in 2020 as it
was Management's expectation that it would be repaid in 2021. The loan was repaid
in 2021.
3. Additional non-IFRS nancial measure; please refer to 'Non-IFRS nancial measures',
which is not part of the audited nancial statements.
Novo Nordisk Annual Report 2021 71Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
4.4 Derivative nancial instruments
Derivative nancial instruments 2021 2020
DKK million
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
Forward contracts USD
1
42,351 17 1,667 29,110 1,658 —
Forward contracts CNH, JPY, GBP and CAD 9,032 32 122 10,291 191 47
Forward contracts, cash ow hedges 51,383 49 1,789 39,401 1,849 47
Forward contracts USD
2
30,909 1,607 284 19,411 379 1,307
Forward contracts CNH, CAD, EUR, GBP and JPY 7,361 34 111 4,578 104 11
Forward contracts, fair value hedges 38,270 1,641 395 23,989 483 1,318
Total derivative nancial instruments 89,653 1,690 2,184 63,390 2,332 1,365
Recognised in the income statement 1,641 395 483 1,318
Recognised in other comprehensive income 49 1,789 1,849 47
1. Average hedge rate for USD cash ow hedges is 628 at the end of 2021 and 640 at the end of 2020.
2. Average hedge rate for USD fair value hedges is 628 at the end of 2021 and 634 at the end of 2020.
The fair value of cash ow hedges at year-end 2021, loss of DKK 1,740 million,
has been recognised in other comprehensive income. In addition,
DKK 15 million in cash ow hedge losses on intangible asset purchases has
been incurred for a total 2021 other comprehensive impact of DKK 1,755
million. The DKK 15 million deferred loss was transferred directly from the
cash ow hedge reserve to the initial cost of the intangible assets.
The nancial contracts are expected to impact the income statement within
the next 12 months, with deferred gains and losses on cash ow hedges
then being transferred to nancial income or nancial expenses. There is no
expected ineectiveness at 31 December 2021, primarily because hedging
instruments match currencies of hedged cash ows.
Use of derivative nancial instruments
The derivative nancial 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
nancial contract that qualies 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 nancial transaction
(cash ow 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 ow hedges
Value adjustments of the eective part of cash ow 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 ow hedges of foreign currency risk on highly probable non-
nancial asset purchases, the cumulative value adjustments are transferred
directly from the cash ow hedge reserve to the initial cost of the asset when
recognised.
Discontinuance of cash ow 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 forecast
transaction is ultimately recognised in the income statement. When a
forecast 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 nancial income or nancial expenses.
For additional disclosures on accounting policies for nancial instruments
please refer to note 4.9.
Novo Nordisk Annual Report 2021 72Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
4.5 Borrowings
Contractual undiscounted cash ows 2021 2020
DKK million Leases
Issued
bonds Loans
Bank
overdrafts
1
Total Leases Loans
Bank
overdrafts
1
Total
Within 1 year 946 — 12,503 359 13,808 855 5,577 1,107 7,539
1-3 years 1,475 4,854 — — 6,329 1,247 — — 1,247
3-5 years 942 — — — 942 694 — — 694
More than 5 years 1,266 4,800 — — 6,066 1,241 — — 1,241
Total contractual undiscounted cash
ows at the end of the year 4,629 9,654 12,503 359 27,145 4,037 5,577 1,107 10,721
Contractual discounted cash ows
included in the balance sheet at the
end of the year 4,129 9,654 12,503 359 26,645 3,672 5,577 1,107 10,356
Non-current liabilities 3,307 9,654 — — 12,961 2,897 — — 2,897
Current liabilities 822 — 12,503 359 13,684 775 5,577 1,107 7,459
Reconciliation of liabilities arising from nancing activities Non-cash movements
DKK million
Beginning of
the year
Re-
payments Proceeds Additions
2
Disposals
Exchange
rates Other
End of the
year
2021
Lease liabilities 3,672 (874) — 1,183 — 146 2 4,129
Issued bonds — — 9,657 — — — (3) 9,654
Loans 5,577 (5,577) 12,503 — — — — 12,503
Bank overdrafts
1
576 (238) — — — 17 3 358
Liabilities arising from nancing activities 9,825 (6,689) 22,160 1,183 — 163 2 26,644
Bank overdrafts
1
531 (527) — — — — (3) 1
Total borrowings 10,356 (7,216) 22,160 1,183 — 163 (1) 26,645
2020
Lease liabilities 3,824 (950) — 978 — (171) (9) 3,672
Loans — — 5,582 — — (5) — 5,577
Bank overdrafts
1
595 — 100 — — (119) — 576
Liabilities arising from nancing activities 4,419 (950) 5,682 978 — (295) (9) 9,825
Bank overdrafts
1
64 — 467 — — — — 531
Total borrowings 4,483 (950) 6,149 978 — (295) (9) 10,356
1. Bank overdrafts includes DKK 358 million classied as nancing activities (DKK 576 million in 2020) and DKK 1 million classied as cash and cash equivalents (DKK 531 million in 2020).
2. Includes additions from acquisitions of businesses.
Issued bonds
EUR 650
million (2024)
EUR 650
million (2028)
Issue date 4 June 2021 4 June 2021
Maturity date 4 June 2024 4 June 2028
Interest type
Fixed Fixed
Coupon interest rate
0.000% 0.125%
Carrying amount 4,854 4,800
Fair value 4,850 4,794
In 2021 Novo Nordisk launched its rst Euro Medium Term Note (EMTN)
programme in two tranches with an aggregate principal amount of EUR
1.3 billion corresponding to DKK 9.7 billion. Net proceeds of the issuances
have been used by Novo Nordisk for general corporate purposes, including
renancing of the bridge loan facility established in connection with Novo
Nordisk’s acquisition of Emisphere Technologies Inc. in 2020. The bonds
are listed on Euronext Dublin.
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 eective interest method. The lease liability is subsequently remeasured
to reect 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 eective interest
method. The dierence between the proceeds received and the nominal
value is recognised in nancial income or nancial expenses over the term
of the loan.
As part of bridge funding the acquisition of Dicerna Pharmaceuticals, Inc.,
Novo Nordisk entered into a sale and repurchase agreement of marketable
securities (REPO). On 31 December 2021, the carrying amount of the assets
transferred is DKK 5,937 million, and the associated liabilities amounts to
DKK 5,937 million. The repurchase is xed, and Novo Nordisk has therefore
retained full exposure from fair value changes of the marketable securities.
Novo Nordisk Annual Report 2021 73Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Therefore, the transaction is treated as a collateralised lending arrangement.
Where substantially all the risks and rewards of ownership are retained in
nancial assets that have been transferred, the assets are not derecognised
and the proceeds obtained are recognised as a nancial liability.
For fair value determination please refer to note 4.9.
4.6 Cash and cash equivalents
Cash and cash equivalents
DKK million 2021 2020 2019
Cash at bank (note 4.3) 10,720 12,757 15,475
Borrowings
1
(note 4.5) (1) (531) (64)
Cash and cash equivalents 10,719 12,226 15,411
1. Bank overdrafts includes DKK 358 million classied as nancing activities
(DKK 576 million in 2020) and DKK 1 million classied as cash and cash equivalents
(DKK 531 million in 2020).
Cash and cash equivalents at 31 December 2021 includes DKK 1,123 million
that is restricted (DKK 653 million in 2020). 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 consists of cash oset 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 nancing activities in the cash ow statement.
4.7 Other non-cash items
DKK million 2021 2020 2019
Reversals of non-cash income
statement items
Interest income and interest
expenses, net (note 4.10) 58 53 155
Capital gain/(loss) on investments,
net. etc (note 4.10) (340) 195 145
Result of associated companies
(note 4.10) 24 (149) 137
Share-based payment costs
(note 5.1) 1,040 823 363
Increase/(decrease) in provisions
(note 3.4) and retirement benet
obligations 16,581 3,605 6,071
Other (4,354) 3,322 161
Total other non-cash items 13,009 7,849 7,032
4.8 Change in working capital
DKK million 2021 2020 2019
Inventories (1,085) (895) (1,305)
Trade receivables (12,909) (2,822) (2,126)
Other receivables and
prepayments (469) (419) (1,190)
Trade payables 3,153 (641) (398)
Other liabilities 2,595 1,274 1,202
Adjustment for payables related to
non-current assets (15) 879 295
Adjustment related to acquisition
of businesses (1,409) — —
Adjustment related to divestment
of Group companies — — (42)
Change in working capital
including exchange rate
adjustments (10,139) (2,624) (3,564)
Exchange rate adjustments 1,483 (1,729) 176
Cash ow change in working
capital (8,656) (4,353) (3,388)
Novo Nordisk Annual Report 2021 74Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
4.9 Financial assets and liabilities
Financial assets by category
DKK million 2021 2020
Other nancial assets 553 766
Marketable securities 6,765 —
Derivative nancial instruments (note 4.4) 1,690 2,332
Financial assets at fair value through the
income statement 9,008 3,098
Other nancial assets 363 300
Trade receivables 15,036 11,643
Other receivables and prepayments (current
and non-current) 5,304 4,835
– less prepayments and VAT receivables (3,438) (4,113)
Cash at bank (note 4.6) 10,720 12,757
Financial assets at amortised cost 27,985 25,422
Trade receivables in a factoring portfolio
1
25,607 16,091
Financial assets at fair value through other
comprehensive income 25,607 16,091
Total nancial assets at the end of the year
by category 62,600 44,611
Financial liabilities by category
Derivative nancial instruments (note 4.4) 2,184 1,365
Financial liabilities measured at
fair value through the income statement 2,184 1,365
Borrowings (non-current)
2
(note 4.5) 12,961 2,897
Borrowings (current)
2
(note 4.5) 13,684 7,459
Trade payables 8,870 5,717
Other liabilities (non-current) 360 —
Other liabilities (current) 19,600 17,005
– less VAT and duties payable (590) (598)
Financial liabilities measured at
amortised cost 54,885 32,480
Total nancial liabilities at the end of the
year by category
3
57,069 33,845
1. Trade receivables which are measured at fair value through other comprehensive
income, which have no associated loss allowance. Refer to note 3.3.
2. The fair value of loans approximates the booked amount.
3. Please refer to note 4.5 for a maturity analysis for non-current and current borrowings.
Financial assets with the exception of other nancial assets and the non-
current part of other receivables and prepayments (DKK 267 million in 2021,
DKK 674 million in 2020) are all due within one year. Other nancial assets
at amortised cost include DKK 335 million which are due in more than ve
years (DKK 280 million in 2020). Other nancial assets measured at fair value
through the income statement are minor shareholdings.
Fair value measurement hierarchy
DKK million 2021 2020
Active market data 7,169 634
Directly or indirectly observable market data 1,690 2,332
Not based on observable market data 25,756 16,223
Total nancial assets at fair value 34,615 19,189
Active market data — —
Directly or indirectly observable market data 2,184 1,365
Not based on observable market data — —
Total nancial liabilities at fair value 2,184 1,365
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 2021 or 2020. There are no signicant
intangible assets or items of property, plant and equipment measured at fair
value. For a description of the credit quality of nancial assets such as trade
receivables, cash at bank, current debt and derivative nancial instruments,
please refer to notes 4.3 and 4.4.
Accounting policies
Depending on purpose, Novo Nordisk classies nancial instruments into
the following categories:
– Financial assets at fair value through the income statement
– Financial assets at amortised cost
– Financial assets at fair value through other comprehensive income
– Financial liabilities at fair value through the income statement
– Financial liabilities at amortised cost
Management determines the classication of its nancial instruments on
initial recognition and re-evaluates this at the end of every reporting period
to the extent that such a classication is permitted or required.
Recognition and measurement
Financial assets at fair value through the income statement consist of equity
investments, marketable securities and derivative nancial instruments.
These are initially recognised at fair value. Equity investments are included
in other nancial assets. Net gains and losses arising from changes in the
fair value of equity instruments and marketable securities are recognised in
the income statement as nancial income or expenses. For a description of
accounting policies on derivative nancial instruments designated to hedge
accounting, please refer to note 4.4.
Financial assets at fair value through other comprehensive income are trade
receivables that are held to collect or to sell in factoring agreements.
Financial assets at amortised cost are cash at bank and non-derivative nancial
assets solely with payments of principal and interest. Novo Nordisk normally
'holds-to-collect' the nancial assets to attain the contractual cash ows. If
collection is expected within one year (or in the normal operating cycle of
the business, if longer), they are classied 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 eective interest method less impairment. For a description of accounting
policies on trade receivables, please refer to note 3.3.
Purchases and sales of nancial assets are recognised on the settlement
date. Financial assets are removed from the balance sheet when the rights
to receive cash ows have expired or have been transferred and Novo
Nordisk has substantially transferred all the risks and rewards of ownership.
Financial liabilities at fair value through the income statement consist of
nancial derivative instruments.
Financial liabilities at amortised cost consist of borrowings (loans, issued
bonds, bank overdrafts and lease liabilities), trade payables and other
liabilities. These are initially recognised at the fair value of the proceeds
received less transaction costs. The dierence between the proceeds
received and the nominal value is recognised in nancial expenses over the
term of the loan using the eective interest method. For initial recognition of
lease liabilities refer to note 4.5.
Financial liabilities are derecognised when the obligation is repaid, cancelled
or expires.
Novo Nordisk Annual Report 2021 75Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Fair value measurement
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 derivative nancial instruments is measured on the basis of
quoted market prices of nancial instruments traded in active markets. If an
active market exists, the fair value is based on the most recently observed
market price at the end of the reporting period. If a nancial 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 nancial instruments assumed to be motivated by normal business
considerations.
If an active market does not exist, the fair value of standard and simple
nancial 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 parameters are 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 insignicant 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.
The marketable securities are initially measured at fair value plus transaction
costs and subsequently changes to the carrying amount are recognised in
the income statement.
4.10 Financial income and expenses
Financial income
DKK million 2021 2020 2019
Financial income
Interest income
1
231 337 65
Foreign exchange gain (net) — 1,142 —
Financial gain from forward
contracts (net) 2,316 — —
Capital gain on investments, etc. 340 — —
Result of associated companies — 149 —
Total nancial income 2,887 1,628 65
Financial expenses
Interest expenses
1
289 390 220
Foreign exchange loss (net) 1,972 — 539
Financial loss from forward
contracts (net) — 1,889 2,673
Capital loss on investments, etc. — 195 145
Capital loss on marketable
securities 44 — —
Result of associated companies 24 — 137
Other nancial expenses 122 150 281
Total nancial expenses 2,451 2,624 3,995
1. Total interest income and expenses is measured at amortised cost for nancial assets
and liabilities.
Financial impact from forward contracts, specied
DKK million 2021 2020 2019
Income/(loss) transferred from
other comprehensive income 1,802 (329) (1,677)
Value adjustment of transferred
contracts (1,411) 79 (1,609)
Unrealised fair value adjustments
of forward contracts 1,246 (835) (217)
Realised foreign exchange gain/
(loss) on forward contracts 679 (804) 830
Financial income/(expense) from
forward contracts 2,316 (1,889) (2,673)
Accounting policies
As described in note 4.3, Management has chosen to classify the result of
hedging activities as part of nancial items in the income statement except
for foreign currency-risk cash ow hedges on highly probable non-nancial
asset purchases, where the cumulative value adjustments are transferred
directly from the cash ow 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 ow hedges
transferred from other comprehensive income to the income statement
when the hedged transaction is recognised in the income statement.
In addition, value adjustments of fair value hedges are recognised in
nancial income and nancial expenses along with any value adjustments of
the hedged asset or liability that are attributable to the hedged risk. Finally,
value adjustments of foreign currency assets and liabilities in non-hedged
currencies will impact nancial income and nancial expenses.
Novo Nordisk Annual Report 2021 76Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Section 5
Other disclosures
5.1 Share-based payment schemes
Share-based payment expensed in the income statement
DKK million 2021 2020 2019
Restricted stock units to employees 189 189 48
Long-term share-based incentive
programme (Management Board)
1
234 162 86
Long-term share-based incentive
programme (management group
below Management Board) 598 436 195
Shares allocated to individual
employees 19 36 34
Share-based payment expensed in
the income statement 1,040 823 363
1. In 2021, Novo Nordisk introduced a new share-based compensation programme with
terms, which amortises the grant date valuation over three years (2018, 2019 and
2020 were amortised over four years). The 2021 expense includes amortisation of the
2018, 2019, 2020 and 2021 programmes.
Restricted stock units to employees
In appreciation of the eorts of employees during recent years, as of 1
August 2019, all employees in the company were oered 75 restricted
stock units. A restricted stock unit gives the holder the right to receive one
Novo Nordisk B share free of charge in February 2023, subject to continued
employment. The cost of the DKK 660 million programme is amortised over
the vesting period.
Long-term share-based incentive programme
Management Board
On 1 February 2022, the Board of Directors approved an interim allocation
of 0.5 million Novo Nordisk B shares to the members of the Management
Board for the 2021 nancial year. The number of shares is periodically
estimated based on long-term incentive performance. The nal number
of shares allocated for the 2021 programme is decided at the end of
the performance period in 2023. The value at launch of the programme
(adjusted for expected dividends) was DKK 223 million. The cost of the 2021
programme is amortised over the vesting period of 2021-2023 at an annual
amount of DKK 74 million. The maximum share allocation 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.
Financial targets are set by the Board for a three-year period, while every
year the Board sets the non-nancial targets, the rst time in February 2021
for the year 2021.
The grant date of the programme was February 2021, and the share
price used for the determining the grant date fair value of the award
was the average share price (DKK 450) for Novo Nordisk B shares on
Nasdaq Copenhagen in the period 3-17 February 2021, adjusted for the
expected dividend. Based on the split of participants when the share
allocation was decided, 45% of the allocated shares will be allocated to
members of Executive Management and 55% to other members of the
Management Board.
The shares allocated for 2018 were released to the individual participants
subsequent to approval of the 2021 Annual Report by the Board of Directors
and after the announcement of the 2021 full-year nancial results on 2
February 2022. The shares allocated correspond to a value at launch of the
programme of DKK 115 million, expensed over the vesting period of 2018-2021.
The number of shares to be transferred (0.5 million shares) is higher than the
original number of shares allocated, as the average sales growth in the three-
year vesting period was above the maximum performance target set by the
Board and consequently, the number of shares increased by 30%.
All restricted stock units and shares allocated to Management are hedged by
treasury shares.
Management group below the Management Board
The management group below the Management Board has a share-based
incentive programme with similar performance criteria. For 2021, a total of
1.6 million shares have currently been allocated to this group, corresponding
to a value at launch of the programme (adjusted for expected dividends) of
DKK 649 million. The number of shares is periodically estimated based on
long-term incentive performance. The nal number of shares allocated for
the 2021 programme is decided at the end of the performance period in
2023. The cost of the 2021 programme is amortised over the vesting period
of 2021-2023 at an annual amount of DKK 216 million. Financial target are
set by the Board for a three-year period, while every year the Board sets the
non-nancial targets, the rst time in February 2021 for the year 2021.
The shares allocated for 2018 were released to the individual participants
subsequent to approval of the 2021 Annual Report by the Board of Directors
and after the announcement of the 2021 full-year nancial results on 2
February 2022. The shares allocated correspond to a value at launch of
the programme of DKK 312 million amortised over the period 2018-2021.
The number of shares to be transferred (1.2 million shares) is higher than
the original number of shares allocated, as the average sales growth in the
three-year vesting period was above the maximum performance target set
by the Board and consequently the number of shares increased by 30%.
Accounting policies
Share-based compensation
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 xed 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 prior years are included in the income
statement in the year of adjustment.
Novo Nordisk Annual Report 2021 77Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
General terms and conditions of launched programmes
Restricted stock units to employees Shares for Management Board
Shares for management group below
Management Board
Shares allocated to individual
employees
2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019
Number of shares awarded in the year (million) — — 2.1 0.5 0.4 0.5 1.6 1.0 1.3 0.1 0.0 0.2
Value per share at launch (DKK) — — 307 423 411 298 423 411 298 538 391 311
Total market value at launch (DKK million) — — 660 223 152 152 649 416 387 71 17 48
Performance and vesting period 2019 to
2023
2021 to
2023
2020 to
2023
2019 to
2022
2021 to
2023
2020 to
2023
2019 to
2022
2021 to
2024
2020 to
2023
2019 to
2022
Allocated to recipients Feb 2023 Feb 2024 Feb 2024 Feb 2023 Feb 2024 Feb 2024 Feb 2023 2024 2023 2022
Amortisation period — — 3.5 years 3 years 4 years 4 years 3 years 4 years 4 years 3 years 3 years 3 years
Outstanding restricted stock units
(million) Restricted stock units to employees Shares for Management Board
Shares for management group below
Management Board
Shares allocated to individual
employees Total
2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019
Outstanding at the beginning of
the year 2.1 2.1 1.5 1.8 1.3 1.2 4.5 3.2 2.7 0.2 0.3 0.2 8.6 6.9 5.6
Released allocated shares (0.1) (0.0) (1.4) (0.3) (0.1) (0.4) (0.6) (0.2) (0.7) (0.1) (0.1) (0.1) (1.1) (0.4) (2.6)
Cancelled allocated shares — — (0.1) — (0.0) (0.0) (0.3) (0.1) (0.1) (0.0) (0.0) (0.0) (0.3) (0.1) (0.2)
Allocated in the year — — 2.1 0.5 0.4 0.5 1.6 1.0 1.3 0.1 0.0 0.2 2.2 1.4 4.1
Performance adjustment
1
— — — 0.2 0.2 — 0.3 0.6 — 0.0 — — 0.5 0.8 —
Outstanding at the end of the year 2.0 2.1 2.1 2.2 1.8 1.3 5.5 4.5 3.2 0.2 0.2 0.3 9.9 8.6 6.9
1. The number of shares for Management Board and management group below Management board has been adjusted as the nancial and non-nancial targets set by the Board are expected to be exceeded for the 2021 programme. The number of shares for Management
Board and management group below Management board has been adjusted as the sales growth target set by the Board for the 2018 programme is exceeded and is expected to be exceeded for the 2019 and 2020 programmes.
Novo Nordisk Annual Report 2021 78Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
5.2 Commitments
Contractual obligations not recognised in the balance sheet
DKK million Current
Non-
current Total
2021
Leases
1
145 636 781
Research and development
obligations 4,196 6,357 10,553
Research and development –
potential milestone payments
2
771 4,220 4,991
Commercial product launch –
potential milestone payments
2
— 5,966 5,966
Purchase obligations relating to
investments in property, plant and
equipment 545 — 545
Other purchase obligations 13,407 5,998 19,405
Total obligations not recognised in
the balance sheet 19,064 23,177 42,241
2020
Leases
1
152 612
764
Research and development
obligations
2,733 4,502
7,235
Research and development –
potential milestone payments
2
205 3,878
4,083
Commercial product launch –
potential milestone payments
2
— 6,105
6,105
Purchase obligations relating to
investments in property, plant and
equipment
339 —
339
Other purchase obligations 7,528 4,535 12,063
Total obligations not recognised in
the balance sheet 10,957 19,632 30,589
1. Predominantly relates to estimated variable property taxes, leases committed but not
yet commenced and low value assets.
2. Potential milestone payments are associated with uncertainty as they are linked to
successful achievements in research activities.
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 commercial product launch
following regulatory approval.
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 primarily relate to purchase agreements regarding
medical equipment and consumer goods. Novo Nordisk expects to fund
these commitments with existing cash and cash ow from operations.
At the Annual General Meeting in 2020, a donation to the World Diabetes
Foundation (WDF) was approved. For the years 2020-2024, the donation is
calculated as 0.085% of Novo Nordisk's total Diabetes care net sales. The
annual donation cannot exceed DKK 93 million in 2022, DKK 94 million in
2023 and DKK 95 million in 2024, or 15% of the taxable income of Novo
Nordisk A/S in the nancial year in question, whichever is the lowest.
Other guarantees
Other guarantees amount to DKK 1,251 million (DKK 1,117 million in 2020).
Other guarantees primarily relate to performance guarantees issued by
Novo Nordisk.
5.3 Acquisition of businesses
Business combinations in 2021
On 28 December 2021, Novo Nordisk acquired all outstanding shares of
the publicly held US company Dicerna Pharmaceuticals, Inc. via a cash
tender oer. Before the acquisition, Novo Nordisk held 2.9% of the shares in
Dicerna Pharmaceuticals, Inc. at a fair value of DKK 573 million.
About Dicerna Pharmaceuticals, Inc.
Dicerna Pharmaceuticals, Inc. is a biopharmaceutical company focused on
discovering, developing and commercialising medicines that are designed to
leverage RNAi to silence selectively genes that cause or contribute to diseases.
Dicerna Pharmaceuticals, Inc. has established collaborative relationships with
some of the leading pharmaceutical companies and has together with the
collaborative partners more than 20 active discovery, preclinical or clinical
programmes. Dicerna Pharmaceuticals, Inc. employs around 320 people.
Strategic rationale
The acquisition of Dicerna Pharmaceuticals, Inc.’s RNAi platform is a
strategic addition to Novo Nordisk’s existing research technology platforms
and support the strategy of using a broad range of technology platforms
applicable across all Novo Nordisk’s therapeutic focus areas. In 2019, Novo
Nordisk entered into a research collaboration and license agreement with
Dicerna Pharmaceuticals, Inc. to discover and develop RNAi therapies using
Dicerna Pharmaceuticals, Inc.’s proprietary RNAi platform technology.
Details of the acquisition
The total purchase price amounts to DKK 22,034 million, which has been settled
by the fair value of existing shareholdings of DKK 573 million, settlement of a
pre-existing relationship of DKK 145 million and a cash consideration of DKK
21,316 million. The settlement of a pre-existing relationship relates to the
existing research collaboration and license agreement, according to which Novo
Nordisk has paid upfront for research services that on the date of acquisition
had a value of DKK 145 million.
Furthermore, under the existing research collaboration and license agreement,
Novo Nordisk has prior to the acquisition acquired rights to license from
Dicerna Pharmaceutical Inc. with a carrying value of DKK 863 million. As part
of the acquisition of Dicerna Pharmaceutical Inc., Novo Nordisk has acquired
the underlying intellectual property rights that replace the previously acquired
rights to license. The additional value of the underlying property rights of DKK
2,454 million over the carrying value of previously acquired rights to license, is
included in intellectual property rights acquired in the business combination
and is calculated as the present value of future payment avoided by acquisition
of Dicerna Pharmaceutical Inc. No material gain or loss has been recognised as
part of settling the pre-existing arrangement.
Novo Nordisk Annual Report 2021 79Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
The purchase price allocation for the acquisition is considered provisional
due to the fact that the transaction was closed on 28 December 2021,
leaving limited time to identify and determine fair value of assets acquired
and liabilities assumed. Adjustments may be applied to the purchase price
allocation for a period of up to 12 months from the acquisition date.
The provisional fair value of recognised assets and liabilities is as follows:
DKK million 2021
Intellectual property rights 18,687
Other intangible assets 24
Financial assets 31
Cash 3,033
Deferred tax assets/liabilities, net (3,480)
Other net assets (607)
Net identiable assets acquired 17,688
Goodwill 4,346
Purchase price 22,034
Settlement of pre-existing relationship (145)
Fair value of existing shareholdings (573)
Consideration transferred 21,316
Cash acquired (3,033)
Cash used for acquisition of businesses 18,283
The goodwill is primarily attributable to the highly-skilled workforce
and expected synergies generated from Novo Nordisk's know-how and
commercialisation abilities within protein and peptide based medicines
and Dicerna Pharmaceuticals, Inc.’s know-how within RNAi technology. The
goodwill is not expected to be deductible for tax purposes.
Transaction costs of DKK 124 million are included in other operating income
and expenses in the income statement.
Business combinations in 2020
No business combinations were completed in 2020.
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 eectively 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.
Identiable 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 identiable assets acquired and liabilities assumed.
Key accounting estimate in determining the fair value of intangible
assets acquired in a business combination
The application of the acquisition method involves the use of signicant
estimates as the identiable 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 ows.
The valuation of intellectual property rights identied in the acquisition
of Dicerna Pharmaceuticals, Inc. is mainly based on Relief From Royalty
models, where Management has estimated the net present value of
royalties and milestone payments, if the existing research collaboration
and license agreement had been extended in time and scope to cover all
of the proprietary RNAi technology. Further, Pipeline assets and research
collaboration and license agreements with other parties than Novo Nordisk
are valued based on estimated net present value of future cash ows.
5.4 Related party transactions
Material transactions with related parties
DKK million 2021 2020 2019
Novo Holdings A/S
Purchase of Novo Nordisk B shares 6,695 5,963 4,894
Dividend payment to Novo
Holdings A/S 6,144 5,767 5,580
NNIT Group
Services provided by NNIT 593 775 941
Dividend payment from NNIT (4) (18) (20)
Novozymes Group
Services provided by Novo Nordisk (116) (113) (132)
Services provided by Novozymes 78 72 103
CS Solar Fund XIV
Purchase of shares by Novo
Nordisk — — 97
Liability for capital commitment
1
— — 389
Distribution by CS Solar Fund XIV — — (385)
1. The liability disclosed for 2019 related to capital commitment was paid in 2020
(DKK 392 million).
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 76.7% 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 an associated company of Novo Holdings A/S, Unchained Labs,
Inc. and Altascience Company Inc. are considered related parties to Novo
Nordisk A/S. As they share 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 or Executive Management of Novo
Nordisk A/S.
Novo Nordisk Annual Report 2021 80Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
In 2021, Novo Nordisk A/S acquired 11,220,000 B shares, worth
DKK 6.7 billion, from Novo Holdings A/S as part of the DKK 20.0 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 nancial results for the four quarters in 2021.
In Novo Nordisk A/S, there were no transactions with the Board of Directors
or Executive Management besides remuneration. There were no other
transactions with the Board of Directors or Executive Management of NNIT
A/S, Novozymes A/S, Novo Holdings A/S, the Novo Nordisk Foundation, Xellia
Pharmaceuticals ApS, Unchained Labs, Sonion A/S or CS Solar Fund XIV.
For information on remuneration of the Management of Novo Nordisk,
please refer to note 2.4 Employee costs. There were no loans to the Board
of Directors or Executive Management in 2021, nor were there any in 2020
or 2019.
There were no material unsettled balances with related parties at the end of
the year.
5.5 Fee to statutory auditors
DKK million 2021 2020 2019
Statutory audit 26 26 26
Audit-related services 3 3 4
Tax advisory services 4 9 11
Other services 4 4 4
Total fee to statutory auditors 37 42 45
Fees for services other than statutory audit of the nancial statements
amount to DKK 11 million (DKK 16 million in 2020 and DKK 19 million in
2019).
In 2021, Deloitte Statsautoriseret Revisionspartnerselskab provided other
services in the amount of DKK 6 million which relate to tax compliance and
transfer pricing, educational training, review of ESG data, due diligence and
other assurance assessments and opinions.
PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab
(PricewaterhouseCoopers Denmark) provided other services in the amount
of DKK 9 million in 2020 and DKK 12 million in 2019 which relate to tax
compliance and transfer pricing, educational training, review of ESG data,
due diligence and other assurance assessments and opinions.
5.6 General accounting policies
Principles of consolidation
The consolidated nancial statements incorporate the nancial statements
of the parent company Novo Nordisk A/S and entities controlled by Novo
Nordisk A/S. Control exists when Novo Nordisk has eective 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 eective date of acquisition and
up to the eective date of disposal.
Functional and presentation currency
Items included in the nancial 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 nancial
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 dierences arising from the translation of eective
qualifying cash ow 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 eects of exchange rate adjustments are recognised in other
comprehensive income.
Cash ow statement
The Cash ow statement is presented in accordance with the indirect
method commencing with net prot for the year.
Novo Nordisk Annual Report 2021 81Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
5.7 Companies in the Novo Nordisk Group
Activity: • Sales and marketing • Production
•
Research and development
•
Services/investments
Company and country Percentage of shares owned Activity
Parent company
Novo Nordisk A/S, Denmark • • • •
Subsidiaries by geographical area
North America Operations
Novo Nordisk Canada Inc., Canada 100 •
Novo Nordisk Inc., United States 100 •
Novo Nordisk North America Operations A/S, Denmark 100 •
Novo Nordisk Pharmaceutical Industries LP, United States 100 •
Novo Nordisk Pharmatech US, Inc., United States 100 •
Novo Nordisk Pharma, Inc., United States 100 •
Novo Nordisk Research Center Indianapolis, Inc., United States 100 •
Novo Nordisk Research Center Seattle, Inc., United States 100 •
Novo Nordisk US Bio Production, Inc., United States 100 •
Novo Nordisk US Commercial Holdings, Inc., United States 100 •
Novo Nordisk US Holdings Inc., United States 100 •
Corvidia Therapeutics, Inc., United States 100 •
Dicerna Pharmaceuticals, Inc., United States 100 •
Emisphere Technologies, Inc., United States 100 •
International Operations
Novo Nordisk Pharmaceuticals A/S, Denmark 100 •
Novo Nordisk Pharma Operations A/S, Denmark 100 • •
Novo Nordisk Region AAMEO and LATAM A/S, Denmark 100 •
Novo Nordisk Region Europe A/S, Denmark 100 •
Novo Nordisk Region Japan & Korea A/S, Denmark 100 •
EMEA
Aldaph SpA, Algeria 100 • •
Novo Nordisk Pharma GmbH, Austria 100 •
S.A. Novo Nordisk Pharma N.V., Belgium 100 •
Novo Nordisk Pharma d.o.o., Bosnia and Herzegovina 100 •
Novo Nordisk Pharma EAD, Bulgaria 100 •
Novo Nordisk Hrvatska d.o.o., Croatia 100 •
Novo Nordisk s.r.o., Czech Republic 100 •
Novo Nordisk Denmark A/S, Denmark 100 •
Novo Nordisk Pharmatech A/S, Denmark 100 • •
Novo Nordisk Egypt LLC, Egypt 100 •
Novo Nordisk Farma OY, Finland 100 •
Novo Nordisk, France 100 •
Novo Nordisk Production SAS, France 100 •
Novo Nordisk Pharma GmbH, Germany 100 •
Novo Nordisk Hellas Epe., Greece 100 •
Novo Nordisk Hungária Kft., Hungary 100 •
Neotope Neuroscience Limited, Ireland 100 •
Company and country Percentage of shares owned Activity
Novo Nordisk Limited, Ireland 100 •
Novo Nordisk Ltd, Israel 100 •
Novo Nordisk S.P.A., Italy 100 •
Novo Nordisk Kazakhstan LLP, Kazakhstan 100 •
Novo Nordisk Kenya Ltd., Kenya 100 •
Novo Nordisk Pharma SARL, Lebanon 100 •
UAB Novo Nordisk Pharma, Lithuania 100 •
Novo Nordisk Farma dooel, North Macedonia 100 •
Novo Nordisk Pharma SAS, Morocco 100 •
Novo Nordisk B.V., Netherlands 100 •
Novo Nordisk Finance (Netherlands) B.V., Netherlands 100 • •
Novo Nordisk Pharma Limited, Nigeria 100 •
Novo Nordisk Norway AS, Norway 100 •
Novo Nordisk Pharmaceutical Services Sp. z o.o., Poland 100 •
Novo Nordisk Pharma Sp.z.o.o., Poland 100 •
Novo Nordisk Comércio Produtos Farmacêuticos Lda., Portugal 100 •
Novo Nordisk Farma S.R.L., Romania 100 •
Novo Nordisk Limited Liability Company, Russia 100 •
Novo Nordisk Production Support LLC, Russia 100 • •
Novo Nordisk Saudi for Trading, Saudi Arabia 100 •
Novo Nordisk Pharma d.o.o. Belgrade (Serbia), Serbia 100 •
Novo Nordisk Slovakia s.r.o., Slovakia 100 •
Novo Nordisk, d.o.o., Slovenia 100 •
Novo Nordisk (Pty) Limited, South Africa 100 •
Novo Nordisk Pharma S.A., Spain 100 •
Novo Nordisk Scandinavia AB, Sweden 100 •
Novo Nordisk Health Care AG, Switzerland 100 • •
Novo Nordisk Pharma AG, Switzerland 100 •
Novo Nordisk Tunisie SARL, Tunisia 100 •
Novo Nordisk Saglik Ürünleri Tic. Ltd. Sti., Turkey 100 •
Novo Nordisk Ukraine, LLC, Ukraine 100 •
Novo Nordisk Pharma Gulf FZE, United Arab Emirates 100 •
Novo Nordisk Holding Limited, United Kingdom 100 • •
Novo Nordisk Limited, United Kingdom 100 •
Ziylo Limited, United Kingdom 100 •
Region China
Novo Nordisk (China) Pharmaceuticals Co., Ltd., China 100 • •
Novo Nordisk (Shanghai) Pharma Trading Co., Ltd., China 100 •
Beijing Novo Nordisk Pharmaceuticals Science & Technology Co.,
Ltd., China
100 •
Novo Nordisk Region China A/S, Denmark 100 •
Novo Nordisk Hong Kong Limited, Hong Kong 100 •
Novo Nordisk Pharma (Taiwan) Ltd., Taiwan 100 •
Company and country Percentage of shares owned Activity
Rest of World
Novo Nordisk Pharma Argentina S.A., Argentina 100 •
Novo Nordisk Pharmaceuticals Pty. Ltd., Australia 100 •
Novo Nordisk Pharma (Private) Limited, Bangladesh 100 •
Novo Nordisk Produção Farmacêutica do Brasil Ltda., Brazil 100 •
Novo Nordisk Farmacêutica do Brasil Ltda., Brazil 100 •
Novo Nordisk Farmacéutica Limitada, Chile 100 •
Novo Nordisk Colombia SAS, Colombia 100 •
Novo Nordisk India Private Limited, India 100 •
Novo Nordisk Service Centre (India) Pvt. Ltd., India 100 •
PT. Novo Nordisk Indonesia, Indonesia 100 •
Novo Nordisk Pars, Iran 100 • •
Novo Nordisk Pharma Ltd., Japan 100 • •
Novo Nordisk Pharma (Malaysia) Sdn Bhd, Malaysia 100 •
Novo Nordisk Pharma Operations (Business Area) Sdn Bhd,
Malaysia
100 •
Novo Nordisk Mexico S.A. de C.V., Mexico 100 •
Novo Nordisk Pharmaceuticals Ltd., New Zealand 100 •
Novo Nordisk Pharma (Private) Limited, Pakistan 100 •
Novo Nordisk Panama S.A., Panama 100 •
Novo Nordisk Peru S.A.C., Peru 100 •
Novo Nordisk Pharmaceuticals (Philippines) Inc., Philippines 100 •
Novo Nordisk Pharma (Singapore) Pte Ltd., Singapore 100 •
Novo Nordisk India Holding Pte Ltd., Singapore 100 •
Novo Nordisk Pharma Korea Ltd., South Korea 100 •
Novo Nordisk Lanka (PVT) Ltd, Sri Lanka 100 •
Novo Nordisk Pharma (Thailand) Ltd., Thailand 100 •
Novo Nordisk Venezuela Casa de Representación C.A., Venezuela 100 •
Other subsidiaries and associated companies
NNE A/S, Denmark 100 •
NNIT A/S, Denmark 18 •
CS Solar Fund XIV, LLC, United States 99 •
Companies without signicant activities are not included in the list.
NNE A/S subsidiaries are not included in the list.
Novo Nordisk Annual Report 2021 82Part of Management´s review – not audited
Financial denitions
(part of Management's 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 nancial measures'.
ADR
An American Depository Receipt (or ADR) represents ownership of the
shares of a non-US company and trades in US nancial markets.
Basic earnings per share (EPS)
Net prot divided by the average number of shares outstanding.
Diluted earnings per share
Net prot divided by average number of shares outstanding, including the
dilutive eect of the outstanding restricted stock units.
Dividend pay-out ratio
Total dividends for the year as a percentage of net prot.
Eective tax rate
Income taxes as a percentage of prot before income taxes.
Gross margin
Gross prot as a percentage of sales.
Net prot margin
Net prot as a percentage of sales.
Number of shares outstanding
The total number of shares, excluding the holding of treasury shares.
Operating margin
Operating prot as a percentage of sales.
Purchase of intangible assets
Cash ow statement amount for the purchase of intangible assets.
Purchase of property, plant and equipment
Cash ow statement amount for the purchase of property, plant
and equipment.
The denition of capital expenditure was redened in 2019. Capital
expenditure is now dened as purchase of property, plant and equipment
from the cash ow statement. Amounts for 2017-2018 have been restated
in 'Financial highlights'.
Working capital
Working capital is dened as current assets less current liabilities and
measures the liquid assets Novo Nordisk has available for the business.
Novo Nordisk Annual Report 2021 83Part of Management´s review – not audited
Non-IFRS nancial
measures
Sales in constant exchange rates
DKK million 2021 2020 2019
Net sales IFRS 140,800 126,946 122,021
Eect of exchange rate 3,643 3,254 (3,923)
Sales in constant exchange rates 144,443 130,200 118,098
Net sales previous year 126,946 122,021 111,831
% increase/(decrease) in reported
currencies 10.9% 4.0% 9.1%
% increase/(decrease) in constant
exchange rates 13.8% 6.7% 5.6%
Operating prot in constant exchange rates
DKK million 2021 2020 2019
Operating prot IFRS 58,644 54,126 52,483
Eect of exchange rate 2,332 1,930 (2,607)
Operating prot in constant
exchange rates 60,976 56,056 49,876
Operating prot previous year 54,126 52,483 47,248
% increase/(decrease) in reported
currencies 8.3% 3.1% 11.1%
% increase/(decrease) in constant
exchange rates 12.7% 6.8% 5.6%
Operating prot after tax to net operating assets (OPAT/NOA)
'Operating prot after tax to net operating assets' is dened as 'operating
prot after tax' (using the eective 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 operating prot after tax to net operating assets is
a useful measure in providing investors and Management with information
regarding the Group's performance. The calculation of this nancial target
is a widely accepted measure of earnings eciency in relation to total
capital employed.
Solely for the purpose of calculating average net operating assets for 2019,
year-end net operating assets for 2018 have been adjusted upwards by
DKK 3,778 million to DKK 40,541 million, reecting the recognition by Novo
Nordisk of right-of-use assets of DKK 3,778 million as of 1 January 2019 in
accordance with IFRS 16.
The following table shows the reconciliation of operating prot after tax
to net operating assets with operating prot/equity in %, the most directly
comparable IFRS nancial measure:
Operating prot/equity in %
DKK million 2021 2020 2019
Operating prot IFRS 58,644 54,126 52,483
/ Equity IFRS 70,746 63,325 57,593
Operating prot/equity in % 82.9% 85.5% 91.1%
Operating prot after tax to net operating assets
DKK million 2021 2020 2019
Operating prot after tax 47,384 42,922 42,091
/ Average net operating assets 68,634 51,824 42,940
Operating prot after tax to net
operating assets in % 69.0% 82.8% 98.0%
OPAT/NOA numerator
Reconciliation of operating prot to operating prot after tax:
DKK million 2021 2020 2019
Operating prot IFRS 58,644 54,126 52,483
Tax on operating prot (using
eective tax rate) (11,260) (11,204) (10,392)
Operating prot after tax 47,384 42,922 42,091
(part of Management's review – not audited)
In the Annual Report, Novo Nordisk discloses certain nancial measures of
the Group’s nancial performance, nancial position and cash ows that
reect adjustments to the most directly comparable measures calculated
and presented in accordance with IFRS. These non-IFRS nancial measures
may not be dened and calculated by other companies in the same manner,
and may therefore not be comparable.
The non-IFRS nancial measures presented in the Annual Report are:
– sales and operating prot in constant exchange rates
– operating prot after tax to net operating assets (OPAT/NOA)
– nancial reserves
– free cash ow
– cash to earnings
IFRS
refers to an IFRS nancial measure.
Sales and operating prot growth in constant exchange rates
'Growth in constant exchange rates' means that the eect of changes in
exchange rates is excluded. It is dened as sales/operating prot for the
period measured at the average exchange rates for the same period of the
prior year compared with net sales/operating prot for the same period of
the prior year. Price adjustments within hyperination countries as dened
in IAS 29 'Financial reporting in hyperination economies' are excluded
from the calculation to avoid growth in constant exchange rates being
articially inated. Growth in constant exchange rates is considered to be
relevant information for investors in order to understand the underlying
development in sales and operating prot by adjusting for the impact
of currency uctuations.
Novo Nordisk Annual Report 2021 84Part of Management´s review – not audited
OPAT/NOA denominator
DKK million 2021 2020 2019
Intangible assets 43,171 20,657 5,835
Property, plant and equipment 55,362 50,269 50,551
Deferred income tax assets 8,672 5,865 4,121
Other receivables and
prepayments (non-current)
267 674 841
Inventories 19,621 18,536 17,641
Trade receivables 40,643 27,734 24,912
Tax receivables 1,119 289 806
Other receivables and
prepayments (current)
5,037 4,161 3,434
Deferred tax liabilities (5,271) (2,502) (80)
Retirement benet obligations (1,280) (1,399) (1,334)
Other liabilities (non-current) (360) — —
Provisions (non-current) (4,374) (4,526) (4,613)
Trade payables (8,870) (5,717) (6,358)
Tax payables (3,658) (3,913) (4,212)
Other liabilities (current) (19,600) (17,005) (15,085)
Provisions (current) (51,520) (34,814) (31,120)
Net operating assets 78,959 58,309 45,339
Average net operating assets
1
68,634 51,824 42,940
1. Average net operating assets for 2019 was calculated based on an adjusted net
operating assets gure for 2018, which was adjusted by the right-of-use assets of
DKK 3,778 million as of 1 January 2019, following the implementation of IFRS 16. As
a consequence, the net operating assets gure for 2018 was adjusted to DKK 40,541
million for the calculation of the average net operating assets for 2019.
Reconciliation of net operating assets to equity: IFRS
DKK million 2021 2020 2019
Equity 70,746 63,325 57,593
Investment in associated
companies
(525) (582) (474)
Other nancial assets (916) (1,066) (1,334)
Marketable securities (6,765) — —
Derivative nancial instruments (1,690) (2,332) (188)
Cash at bank (10,720) (12,757) (15,475)
Borrowings – non-current 12,961 2,897 3,009
Borrowings – current 13,684 7,459 1,474
Derivative nancial instruments 2,184 1,365 734
Net operating assets 78,959 58,309 45,339
Financial reserves
'Financial reserves at the end of the year' is dened as 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 loans and
bank overdrafts classied as liabilities arising from nancing activities with
obliged repayment within 12 months of the balance sheet date.
Management believes that nancial reserves at the end of the year are an
important measure of the Group's nancial strength from an investor's
perspective, capturing the robustness of the Group's nancial position and
its nancial preparedness for unforeseen developments.
The following table reconciles total nancial reserves with cash and cash
equivalents, the most directly comparable IFRS nancial measure:
Financial reserves
DKK million 2021 2020 2019
Cash and cash equivalents IFRS 10,719 12,226 15,411
Marketable securities IFRS 6,765 — —
Undrawn committed credit facility 11,526 11,531 11,578
Undrawn bridge facility
1
— 5,577 —
Borrowings
1
(12,861) (576) (595)
Financial reserves
1
16,149 28,758 26,394
1. Financial reserves for 2020 include amounts undrawn under credit facilities and
overdrafts where the repayment of such facilities or overdrafts is not contractually
required within 12 months of the balance sheet date. Financial reserves for 2020 include
the DKK 5,577 million (EUR 750 million) undrawn portion of a bridge facility as the
terms of the facility provided that the maturity could be extended, at the option of Novo
Nordisk, through June 2022. In accordance with IFRS, the DKK 5,577 million (EUR 750
million) drawn portion of the bridge facility has nevertheless been classied as current
debt as it was Management’s expectation that the facility would be repaid in 2021. The
loan was repaid in 2021.
Free cash ow
Free cash ow 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 in
the business to fund future growth.
The following table shows a reconciliation of free cash ow with net cash
generated from operating activities, the most directly comparable IFRS
nancial measure:
Free cash ow
DKK million 2021 2020 2019
Net cash generated from
operating activities IFRS 55,000 51,951 46,782
Net cash used in investing
activities IFRS (31,605) (22,436) (11,509)
Net purchase of marketable
securities IFRS 5,937 — —
Addition on marketable securities
through acquisition of
business IFRS 861 — —
Repayment on lease
liabilities IFRS (874) (950) (822)
Free cash ow 29,319 28,565 34,451
Cash to earnings
Cash to earnings is dened as 'free cash ow as a percentage of net prot'.
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 ow is used as the numerator instead
of net cash ow.
The following table shows the reconciliation of cash to earnings to cash ow
from operating activities/net prot in %, the most directly comparable IFRS
nancial measure:
Cash ow from operating activities/net prot in %
DKK million 2021 2020 2019
Net cash generated from
operating activities IFRS 55,000 51,951 46,782
/ Net prot IFRS 47,757 42,138 38,951
Cash ow from operating
activities/net prot in % 115.2% 123.3% 120.1%
Cash to earnings
DKK million 2021 2020 2019
Free cash ow 29,319 28,565 34,451
/ Net prot IFRS 47,757 42,138 38,951
Cash to earnings 61.4% 67.8% 88.4%
Novo Nordisk Annual Report 2021 85Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Statement of
Environmental,
Social and
Governance (ESG)
performance
for the year ended 31 December
Note 2021 2020 2019
Environmental performance
Resources
Energy consumption for operations (1,000 GJ) 7.1 3,387 3,191 2,993
Share of renewable power for production sites 7.1 100% 100% 76%
Water consumption for production sites (1,000 m
3
) 7.2 3,488 3,368 3,149
Breaches of environmental regulatory limit values 7.3 12 15 16
Emissions and waste
CO
2
emissions from operations and transportation (1,000 tonnes) 7.4 174 170 306
Waste from production sites (1,000 tonnes) 7.5 181 141 124
Social performance
Patients
Patients reached with Novo Nordisk's Diabetes care products (estimate in millions) 8.1 34.6 32.8 30.0
– Hereof reached via the Novo Nordisk Access to Insulin Commitment (estimate in millions)
1
8.1 1.7 3.2 2.9
– Hereof children reached through the Changing Diabetes
®
in Children programme (cumulative) 8.1 31,846 28,296 25,695
People & employees
Employees (total) 8.2 48,478 45,323 43,258
Employee turnover 8.2 11.0% 7.9% 11.4%
Sustainable employer score
2
8.3 84% N/A N/A
Frequency of occupational accidents (number per million working hours) 8.4 1.3 1.3 2.2
Gender in leadership positions (ratio men:women) 8.5 57:43 59:41 60:40
Gender in senior leadership positions (ratio men:women) 8.5 64:36 65:35 67:33
Gender in the Board of Directors (ratio men:women) 8.5 67:33 62:38 62:38
Societies
Total tax contribution (DKK million) 8.6 32,593 26,376 27,527
Donations and other contributions (DKK million) 8.7 92 158 105
Governance performance
Governing processes
Business ethics reviews 9.1 37 32 34
Relevant employees trained in business ethics 9.1 98% 99% 99%
Supplier audits 9.2 253 177 236
Product recalls 9.3 1 — 4
Failed inspections 9.4 — — —
Values & trust
Facilitations of the Novo Nordisk Way (total) 9.5 34 26 32
Company reputation (scale 0-100)
3
9.6 82.6 N/A N/A
Animals purchased for research 9.7 47,879 50,036 49,637
1. During 2020, the ceiling price was lowered from USD 4 to USD 3 which aects the comparability of 2021 and prior years.
2. In 2021, the engagement survey was entirely redesigned to support Novo Nordisk’s strategic goals. As a result, comparison to previous surveys is not appropriate.
3. Company reputation replaces Company trust in order to capture more dimensions of how Novo Nordisk is perceived by external stakeholders.
Novo Nordisk Annual Report 2021 86Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
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. Novo Nordisk is
also inspired by the International Integrated Reporting Framework and adheres
to the AA1000AP (2018), which states that reporting must provide a complete,
accurate, relevant and balanced picture of the organisation’s approach to and
impact on stakeholders and society.
As recommended by the Task Force 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:
– 2ºC scenario, consistent with meeting the Paris Agreement Goal
(Representative Concentration Pathway RCP 2.6)
– 4ºC scenario as an alternative high-emission scenario (RCP 8.5)
Novo Nordisk 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
CDP disclosures.
Novo Nordisk applies AA1000AP (2018) as a component in creating a generally
applicable approach to assessing and strengthening the credibility of the
Group's public reporting of ESG information. Novo Nordisk has designed
processes to ensure that the qualitative and quantitative information that
documents the ESG dimensions of performance is assured, as well as the
systems that underpin the data and performance. The principles outlined in
AA1000AP (2018) have been applied as described below.
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 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.
Materiality
When assessing whether a disclosure is material to include in the
consolidated ESG statement, Management considers whether the matter
is of such relevance and importance that it could substantively inuence
the assessment by providers of nancial capital of Novo Nordisk's ability to
create value over the short-, medium- and long-term. This assessment builds
on ongoing stakeholder engagement and trendspotting supplemented by
data-driven analysis. The identied key issues are addressed by programmes
or action plans with clear and measurable targets. The issues presented
in the Annual Report are thus deemed to have a signicant impact on the
Group's Environmental, Social and Governance performance and hereby
the future business performance and may support stakeholders in their
decision-making.
Responsiveness
The Annual Report reects how the company is managing 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. To all Novo Nordisk stakeholders, the Annual Report
is just one element of interaction and communication with the company.
Impact
Understanding, measuring and communicating the positive and negative
impacts on society and the environment of Novo Nordisk’s activities is
important and remains a priority for Novo Nordisk.
Principles of consolidation
The disclosures of energy consumption and CO
2
emissions cover production
sites, laboratories and oces. The disclosures of water consumption,
environmental breaches and waste cover production sites.
The social and governance-related disclosures cover the Novo Nordisk
Group, comprising Novo Nordisk A/S and entities controlled by Novo Nordisk
A/S as applicable.
Accounting policies and changes hereto
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 below.
The existing categorisation of CO
2
emissions from operations and
transportation has been supplemented with the categorisation into scope 1,
2, and 3 emissions to align with the Greenhouse Gas Protocol.
Gender in senior leadership positions (ratio men:women) has been added
to the statement to reect the aspirational target of 45:45 representation
in senior leadership positions launched during 2021. The target of 45:45
representation leaves 10% exibility while also allowing for non-binary
gender denitions and those that may not wish to be categorised.
Sustainable employer score is replacing the previous disclosure of employee
engagement in accordance with Novo Nordisk's aspirations of becoming
a sustainable employer. The sustainable employer score is based on the
new employee survey and captures a multitude of dimensions related to
employee well-being.
Company reputation is replacing the previous disclosure of company trust.
A new and more comprehensive approach to reputational intelligence has
been launched in 2021 to cover more markets and stakeholders. These
insights are summarised in the company reputation score.
Finally, the categorisation of disclosures into Environment, Social and
Governance as well as the sub-categorisation within each dimension has
been changed for some metrics.
Novo Nordisk Annual Report 2021 87Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
Section 7
Environmental
performance
7.1 Energy consumption for operations and share of
renewable power
Energy consumption for operations
1,000 GJ 2021 2020 2019
Production 2,859 2,718 2,458
Oce buildings and laboratories 528 473 535
Total energy consumption 3,387 3,191 2,993
Energy consumption for production increased by 5% primarily due to a new
production facility and a general increase in produced volumes.
Energy consumption in oce buildings and laboratories increased by 12%
as facilities were utilised more throughout the year compared to 2020.
Energy-saving projects implemented in 2021 within production sites
resulted in annual savings of 67,000 GJ.
In 2021, 100% of power sourced for production sites was from renewable
energy.
Accounting policies
Energy consumption for operations is measured as consumption of power,
steam, heat and fuel. The fuel is mainly from natural gas, wood, diesel oil,
gas oil and light fuel oil. Energy consumption is based on meter readings
and invoices.
Energy consumption in production and laboratories covers consumption of
power, steam, heat and fuel. Energy consumption in oce buildings outside
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. It is
calculated as the sum of power in each site or oce that is derived from
100% renewable sources, either sourced or self-produced.
7.2 Water consumption for production sites
In 2021, production sites consumed 3,488,000 cubic metres of water, an
increase of 4% compared to 2020 due to a new production facility and a
general increase in produced volumes.
Production sites in Brazil, China, Iran and Algeria, are located in areas
subject to water stress or high seasonal variations. They consume 10% of
the total water for global production. Overall, water consumption at these
facilities decreased by 10% compared to 2020 due to signicant water-
saving projects implemented despite increased production.
Accounting policies
Water consumption is measured based on meter readings and invoices. It
includes drinking water, industrial water and steam used at production sites.
7.3 Breaches of environmental regulatory limit values
In 2021, there were 12 breaches, a decrease from 15 breaches in 2020.
The breaches were mainly related to wastewater and process waste, and all
had a limited impact on the environment. All breaches were reported to the
authorities.
Accounting policies
Breaches of regulatory limit values cover all breaches reported to the
environmental authorities.
7.4 CO
2
emissions from operations and transportation
CO
2
emissions from operations and transportation
1,000 tonnes 2021 2020 2019
Production 39 37 86
Oce buildings and laboratories 8 8 13
Product distribution 71 61 80
Business ights 10 19 65
Company cars 46 45 62
Total CO
2
emissions 174 170 306
CO
2
emissions by Scope 1, 2 and 3
1,000 tonnes 2021 2020 2019
Scope 1 77 75 86
– Production 29 28 21
– Oce buildings and laboratories 2 2 3
– Company cars 46 45 62
Scope 2 16 15 75
– Production 10 9 65
– Oce buildings and laboratories 6 6 10
Scope 3
1
81 80 145
– Business ights 10 19 65
– Product distribution 71 61 80
Total CO
2
emissions 174 170 306
1. Scope 3 emissions are restricted to CO
2
emissions from business ights and product
distribution. For a full overview of CO
2
emissions, please visit cdp.net
Novo Nordisk has long-term targets of zero CO
2
emissions from operations
and transportation by 2030 and net-zero emissions by 2045.
In 2021, total CO
2
emissions from operations and transportation increased
by 2%. The increase was primarily due to a rise in emissions from product
distribution.
Scope 1 emissions increased by 3% due to a new production facility,
increased natural gas consumption caused by a general increase in
produced volumes and an increase in car fuel consumption.
Scope 2 emissions increased by 7% due to increased electricity and steam
consumption caused by a general increase in produced volumes.
Scope 3 emissions increased by 1% following a 16% increase in product
distribution, partially countered by a 47% decrease in emissions from
business ights due to COVID-19. The increase in emissions from product
distribution is primarily caused by increased use of air freight instead of sea
and road freight. CO
2
reductions of 4,000 tonnes were incurred from green
fuel agreements with selected transportation service providers.
Accounting policies
Emissions are limited to CO
2
emissions from energy and do not include
other greenhouse gases.
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CO
2
emissions from operations (production, oce buildings and
laboratories)
CO
2
emissions from operations cover consumption of power, fuel, heat and
steam at oce buildings in Denmark, global production sites and
laboratories, and consumption of power in oce buildings outside Denmark.
Emissions are calculated according to the GHG Protocol and based on
emission factors from the previous year.
CO
2
emissions from product distribution
CO
2
emissions from product distribution are calculated by external
transportation suppliers as the estimated emissions from product
distribution in metric tonnes. CO
2
emissions are calculated based on the
worldwide distribution of semi-nished and nished products, raw materials
and components by air, sea and road between production sites and from
production sites to subsidiaries, direct customers and importing
distributors. CO
2
emissions from product distribution from subsidiaries to
pharmacies, hospitals and wholesalers are not included. Due to the lack of
reliable emissions data from specic freight forwarders, an estimated 3% of
trucking emissions are not included in the scope.
CO
2
emissions from business ights
CO
2
emissions from business ights are estimated based on mileage and
emission factors for short-, medium- and long-haul ights along with
passenger class obtained from travel agencies. Currently, 85% of emissions
from ights are calculated based on data provided by travel agencies. The
remaining 15% emissions are extrapolated based on the average CO
2
emissions per employee.
CO
2
emissions from company cars
CO
2
emissions from company cars cover cars leased or owned by Novo
Nordisk. Emissions are calculated by multiplying emission factors by the
volumes of diesel and petrol used.
CO
2
emissions by scope 1, 2 and 3
Scope 1 emissions comprise direct CO
2
emissions from sources that are
owned or controlled by Novo Nordisk A/S.
Scope 2 emissions comprise CO
2
emissions from purchased or acquired
electricity, cooling, heat and steam.
Scope 3 emissions only include CO
2
emissions from business ights and
product distribution. Other Scope 3 categories, e.g. purchased goods
and services, capital goods, waste generated in operations and employee
commuting, are not included.
7.5 Waste from production sites
Waste from production sites
1,000 tonnes 2021 2020 2019
Organic residues 143 108 89
Other (paper, cardboard, metals, etc.) 8 8 8
Total recycling 151 116 97
Ethanol waste 13 9 13
Other (various combustible waste) 9 6 5
Total waste with energy recovery 22 15 18
Water waste 5 5 5
Other 2 4 3
Total waste with no energy recovery 7 9 8
Total waste to landll 1 1 1
Total waste 181 141 124
In 2021, waste from production sites increased by 28% due to increased
production. 96% of the total waste was either recycled, used for biogas
production or incinerated at plants where energy is used for heat and
power production.
The amount of waste recycled increased by 30% from 116,000 to 151,000
tonnes primarily driven by the production in Kalundborg, Denmark.
The amount of waste sent for energy recovery increased by 47% from
15,000 to 22,000 tonnes, primarily due to increased production volumes
and challenges in ethanol regeneration. Less than 1% of total waste was
sent to landll.
In 2021, as in 2020, 14% of the waste was categorised as hazardous waste.
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
care products
The estimated number of full-year patients reached with Novo Nordisk's
Diabetes care products increased from 32.8 million in 2020 to 34.6 million in
2021. This 5% increase was primarily driven by growth in the GLP-1 franchise
which increased by 1.3 million patients followed by the new-generation
insulin franchise which grew by 0.7 million patients.
In 2021, the estimated number of patients reached with Novo Nordisk's
Diabetes care products through the Access to Insulin Commitment was 1.7
million. Novo Nordisk also sold human insulin below the ceiling price of USD
3 in countries outside the commitment, reaching an estimated additional
2.2 million patients in 2021. During 2020, the ceiling price was lowered from
USD 4 to USD 3 which aects the comparability of 2021 and prior years.
Comparing 2021 and 2020 using the current ceiling price of USD 3, the
result is an estimated increase of 40,000 patients reached in 2021. Using
the previous ceiling price of USD 4, an estimated 3.4 million patients were
reached in 2021 compared to 3.2 million in 2020. In addition to oering
insulin at a low price, supply chain improvements and capacity building are
also important levers in ensuring access to aordable care for vulnerable
patients.
Through the Changing Diabetes
®
in Children programme, 31,846 children
had been reached by the end of 2021, compared with 28,296 in 2020.
More than half of the 3,550 newly enrolled children were reached through
expansion of the programme in Ethiopia, Sudan, Kenya and Uganda.
Accounting policies
The number of full-year patients reached with Novo Nordisk's Diabetes 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
dened by the World Health Organization (WHO).
The number of full-year patients reached with Novo Nordisk's Diabetes care
products (human insulin in vials) via the Access to Insulin Commitment is
estimated by dividing Novo Nordisk's annual sales volume by the annual
usage dose per patient reached via the Access to Insulin Commitment as
dened by WHO.
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The WHO-dened daily dosage for these products may not accurately
reect 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.
8.2 Employees
Employees
Number 2021 2020 2019
North America Operations 6,106 6,213 6,190
International Operations 42,372 39,110 37,068
– EMEA (Europe, the Middle East and Africa) 26,680 24,600 23,540
– of which in Denmark 19,150 17,538 16,747
– China (Mainland China, Hong Kong, Taiwan) 5,833 5,548 5,263
– Rest of World (all other countries) 9,859 8,962 8,265
Total employees 48,478 45,323 43,258
Full-time employees 47,792 44,723 42,703
The number of employees increased in most areas, with the highest growth in
Product Supply Quality & IT, partially countered by North America Operations.
The employee turnover rate increased from 7.9% in 2020 to 11.0% in 2021
which is comparable to turnover rates in years prior to COVID-19.
Accounting policies
The number of employees is recorded as all employees except externals,
employees on unpaid leave, interns, bachelor and master thesis employees
and substitutes at year-end.
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 rate of turnover is measured as the number of employees, excluding
temporary employees, who left the Group during the nancial 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.
8.3 Sustainable employer score
In 2021 the global employee survey was entirely redesigned to support
Novo Nordisk’s ambition to be a Sustainable Employer, which underpins
the broader Sustainable Business agenda. The new 21-item survey, Evolve,
is sharply focused on the most vital elements of the Sustainable Employer
ambition, provides greater dierentiation of results, and is more actionable
for leaders and their teams.
The inaugural Evolve survey revealed that overall engagement is high at
84% favourable, and that Novo Nordisk scores in the top decile against
external organisations when it comes to providing a Purpose-driven
workplace. Opportunities for improvement include greater equality of career
opportunities, better work-life balance and clearer performance evaluations.
Accounting policies
The Sustainable employer score measures the average percentage of
favourable answers to the 18 engagement items in the survey. Favourable
answers are dened as "Agree" and "Strongly agree" to positively framed
questions. The survey is distributed through an external vendor.
8.4 Frequency of occupational accidents
The average frequency rate of occupational accidents with absence was 1.3
accidents per million working hours in 2021, which is unchanged compared
to 2020. The increase of 6.5% in the number of occupational accidents with
absence (99 in 2021 compared to 93 in 2020) was counter-balanced by an
increase in the number of employees. In 2021, Novo Nordisk had zero (0)
work-related fatalities compared to one (1) in both 2019 and 2020. Novo
Nordisk works with a zero-injury mindset and has a long-term commitment
to continuously improving safety performance.
Accounting policies
The frequency of occupational accidents with absence is measured as the
internally reported number of accidents per million nominal working hours.
Contractors, visitors, employees on unpaid leave, interns, and bachelor and
master 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.
8.5 Gender diversity
Gender in leadership positions
Ratio men:women 2021 2020 2019
CEO, EVP, SVP 72:28 76:24 82:18
CVP, VP 63:37 64:36 66:34
Director, Manager, Team Leader 57:43 58:42 59:41
Gender in leadership positions (overall) 57:43 59:41 60:40
Gender in senior leadership positions 64:36 65:35 67:33
Gender in the Board of Directors 67:33 62:38 62:38
The gender diversity in leadership positions overall at Novo Nordisk meets
the Danish gender diversity requirements. Gender diversity in leadership
positions overall increased from 41% in 2020 to 43% in 2021. Within senior
leadership positions, there was an increase from 35% in 2020 to 36% in
2021. Among employees as a whole, the gender split was 49% women and
51% men in 2021, the same as in 2020.
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, 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 was introduced. Further information about the new target is
disclosed in 'Launching aspirational targets' on page 17.
As of 31 December 2021, two shareholder-elected Board members
were female and six were male. The 2024 target of having at least three
shareholder-elected Board members of each gender was thus not yet
met as a female Board member stepped down at the 2021 annual general
meeting, leaving the number of female Board members at two. Diversity
in the broadest sense remains a key focus area for the Board of Directors,
including in Board member searches. Further information about the Board
members is disclosed in the Corporate Governance Report.
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Accounting policies
Diversity at Novo Nordisk is reported as the percentage split by gender in
leadership positions. Senior leadership positions are dened as employees
in the global job levels Chief Executive Ocer (CEO), Executive Vice President
(EVP), Senior Vice President (SVP), Corporate Vice President (CVP) and
Vice President (VP). Overall leadership positions are dened as Directors,
Managers, Team Leaders and senior leadership positions.
Diversity at the Board of Directors is reported as the percentage split by
gender among all members, including employee-elected members.
8.6 Total tax contribution
Total tax contribution
DKK million
Taxes
borne
Taxes
collected 2021 2020 2019
Corporate income taxes
paid 14,438 3,952 18,390 13,577 14,392
Employment taxes 1,893 8,947 10,840 9,588 9,638
Indirect taxes 1,506 1,106 2,612 2,497 2,610
Other taxes 751 — 751 714 887
Total 18,588 14,005 32,593 26,376 27,527
The total tax contribution in 2021 amounted to DKK 32,593 million split with
57% on taxes borne and 43% on taxes collected. In 2020, the split was 52%
on taxes borne (DKK 13,676 million) and 48% on taxes collected (DKK 12,700
million).
The overall increase in total tax contribution from 2020 to 2021 is primarily
related to Corporate income taxes paid. In 2020 the calculated corporate
tax payable exceeded the prepayment of corporate income taxes in
Denmark. These additional corporate income taxes have been paid in 2021.
Furthermore, the prot before tax has increased for 2021, also resulting in
an increase in Corporate income taxes paid.
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 dened as taxes where Novo Nordisk carries the cost. Taxes
collected are dened as taxes collected by Novo Nordisk on behalf of others,
e.g. employee income taxes deducted from the employee salaries and paid
on to the government.
Corporate income taxes paid
Corporate income taxes paid primarily consist of corporate income taxes
and withholding taxes on company dividends paid during the year.
Employment taxes
Employment taxes primarily consist of taxes collected from the employees
on behalf of the government and social security costs (part of payroll taxes
in some countries).
Indirect taxes
Indirect taxes consist of non-refundable VAT, net VAT collections, customs
duties, environmental taxes and property taxes.
Other taxes
Other taxes consist of country-specic taxes not linked to one of the
categories above, e.g. the US branded prescription drug (BPD) fee.
8.7 Donations and other contributions
Donations and other contributions
DKK million 2021 2020 2019
World Diabetes Foundation (WDF) 92 138 86
Novo Nordisk Haemophilia
Foundation (NNHF) — 20 19
Total donations and other
contributions 92 158 105
The WDF, an independent trust, supports sustainable partnerships and
acts as a catalyst to help others do more. The amount granted to WDF has
decreased from DKK 138 million in 2020 to DKK 92 million in 2021 as the
donation in 2020 included a special one-o contribution of DKK 50 million.
In 2021, the WDF Board of Directors approved funding to 13 partnership
projects in 16 countries. See note 5.2 in the consolidated nancial
statements and worlddiabetesfoundation.org for additional information.
The NNHF supports programmes in low- and middle-income countries.
Initiatives focus on capacity-building, diagnosis and registry, awareness and
advocacy. Novo Nordisk agreed to a donation of DKK 20 million to NNHF in
2021 but due to nancial considerations from NNHF the donation was not
paid out. Since 2005, the NNHF has provided funding for 289 programmes
in 83 countries. See nnhf.org for additional information.
Accounting policies
Donations and other contributions by Novo Nordisk to the WDF and the
NNHF are recognised as an expense when the donation or contribution is
paid out or when an unconditional commitment to donate has been made.
Section 9
Governance
performance
9.1 Business ethics reviews and training
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.
The mandatory business ethics training is based on the Business Ethics
Code of Conduct in the form of globally applicable e-learning and related
tests released annually by the Novo Nordisk Business Ethics Compliance
Oce. The percentage of employees completing the training is calculated as
the percentage of completion of training in both the Code of Conduct and
related tests based on internal registrations.
9.2 Supplier audits
Supplier audits
Number 2021 2020 2019
Responsible sourcing audits 16 7 27
Quality audits 237 170 209
Total supplier audits 253 177 236
The number of audits concluded in 2021 increased by 43% compared to
2020. The increase represents an improved ability to conduct audits of
suppliers although the eects of COVID-19 continue to limit travel and
access to suppliers' facilities. One critical nding regarding credibility of
certicate of analysis has been issued during a qualication audit in 2021.
Consequently, Novo Nordisk has decided not to use the supplier in question.
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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.
9.3 Product recalls
Novo Nordisk had one product recall in the US in 2021 due to disbursement
of product samples without proper temperature monitoring.
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 aect various countries.
9.4 Failed inspections
In 2021, as in 2020, Novo Nordisk had no failed inspections among those
resolved at year-end. However, a contract manufacturer lling syringes for
Wegovy
®
failed an inspection causing disruption in the supply of Wegovy
®
.
During 2021, 97 inspections of Novo Nordisk were conducted, compared
with 77 in 2020. At year-end, 86 inspections were passed and 11 were
unresolved, as nal inspection reports had not been received or the nal
authority acceptance was pending, which is normal. Follow-up on unresolved
inspections continues in 2022.
Accounting policies
The number of failed inspections is measured in relation to inspections
by the US Food & Drug Administration (USFDA), the European Medicines
Agency (EMA), the Notied Body (TÜV SUD) and domestic authorities for
strategic manufacturing sites. Failed inspections are dened as inspections
where Warning Letters or EMA non-compliance letters related to GMP
inspections are received, GMP/ISO certicates for strategic sites are lost,
pre-approval inspections result in a Warning 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
dened as the manufacturing sites in Brazil, China, Denmark, France and
the US.
9.5 Facilitations of the Novo Nordisk Way
In 2021, a total of 34 units were facilitated and more than 1,600 employees
were individually interviewed. In addition, feedback on those units was
collected from approximately 500 stakeholders.
Overall, the 2021 process continues to show a good level of adherence to
the Novo Nordisk Way. 5 units were found to be in breach of one or more of
the Novo Nordisk Essentials. The Essential with the strongest performance
continues to be Essential 1 (We create value by having a patient-centred
business approach) and Essential 10 (We never compromise on quality and
business ethics. In 2021, partly driven by the focus on strengthening the
culture journey, signicantly more ndings were issued related to Essential 2
(We set ambitious goals and strive for excellence) and Essential 7 (We focus
on personal performance and development).
Accounting policies
Facilitations of the Novo Nordisk Way is measured as the number of
facilitations completed. It is an internal process for assessing adherence
to the Novo Nordisk Way. The assessments are based on review of
documentation and feedback from stakeholders followed by an on-site
visit during which randomly selected employees and management are
interviewed. Identied 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.
9.6 Company reputation
Company reputation
Scale 0-100 2021 2020 2019
People with diabetes 77.1 N/A N/A
People with obesity 79.4 N/A N/A
General practitioners 81.5 N/A N/A
Diabetes specialists 84.8 N/A N/A
Informed general public 90.3 N/A N/A
Total score (average) 82.6 N/A N/A
Company reputation is replacing the previous disclosure of company trust.
A new and more comprehensive approach to reputational intelligence was
launched in 2021 to cover more markets and stakeholders.
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: USA, Canada, Brazil, China, Japan, Germany, Italy, UK, France, and
Denmark. The data are collected through online surveys carried out by an
external consultancy rm. Responses are aggregated to produce an overall
score on a Likert scale of 1-7 which is rebased on a 0-100 scale.
9.7 Animals purchased for research
Animals purchased
Number 2021 2020 2019
Mice, rats and other rodents 35,675 38,850 48,081
Pigs 759 783 880
Rabbits 184 239 349
Dogs 114 91 157
Non-human primates 495 264 168
Fish 10,638 9,804 —
Other vertebrates 14 5 2
Total animals purchased 47,879 50,036 49,637
The number of animals purchased for research in 2021 decreased by 4.3%
compared with 2020 due to reduced usage of mice, rats and other rodents.
The overall development reects the changes in stages of the dierent
research projects. The reduction in the number of rodents purchased
reects Novo Nordisk's continuous focus on reducing the number of animals
per research project. 75% of the animals purchased were rodents and 22%
were sh.
Accounting policies
The record of 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.
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Statement by the Board of Directors and
Executive Management on the 2021 Annual Report
Registered Executive Management Board of Directors
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Independent
Auditor’s Reports
Report on the Financial Statements
Key audit matter How our audit addressed the key audit matter
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Business Registration No 33 96 35 56
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Independent Auditor's Assurance Report on the ESG statement
To Management and broader stakeholders of Novo
Nordisk A/S
Novo Nordisk A/S engaged us to provide limited assurance on the ESG statement
presented in the Annual Report of Novo Nordisk for the year ended 31 December 2021.
Our scope of work was limited to assurance that:
– The performance data regarding Environment, Social and Governance, on pages from
85 to 91 in the report, have been stated in accordance with the reporting criteria;
– Novo Nordisk’s description in the report adheres to the principles of inclusivity,
materiality, responsiveness, and impact set out in AccountAbility’s AA1000AP (2018);
– The report has been prepared in accordance with the requirements of sections 99a,
99b, 99d, and 107d of the Danish Financial Statements Act (FSA).
Management's responsibility
Management of Novo Nordisk is responsible for collecting, analysing, aggregating,
and presenting the information in the ESG statement, ensuring that data are free from
material misstatement, whether due to fraud or error. The Novo Nordisk accounting
policies and internal control documents contain Management’s dened reporting scope
for each data type. The criteria for accounting principles are contained within the ESG
statement.
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, ISAE 3410 Assurance Engagements
on greenhouse gas statements, and AA1000 Assurance Standard, AA1000AS (v3) Type
2 Moderate (which is the equivalent to ISAE 3000 limited assurance), and additional
requirements under Danish audit regulation.
We are responsible for:
– planning and performing the engagement to obtain limited assurance about whether
the consolidated ESG statement is free from material misstatement, whether due to
fraud or error;
– forming an independent conclusion, based on the procedures we performed and the
evidence we obtained; and
– reporting our conclusion to the Management and broader stakeholders of Novo
Nordisk A/S.
Deloitte Statsautoriseret Revisionspartnerselskab is subject to International Standard
on Quality Control (ISQC) 1 and, accordingly, applies a comprehensive quality control
system, including documented policies and 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, condentiality and professional behaviour, and ethical requirements applicable in
Denmark.
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. Considering the risk
of material error, we planned and performed our work to obtain all information and
explanations necessary to support our conclusion.
Work performed
A. 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 internal stakeholders to understand the key processes and
control activities for reporting data;
– obtained an understanding of the key processes and controls for managing, recording
and reporting;
– performed limited substantive testing on a selective basis to check that data had been
appropriately measured, recorded, collated and reported;
– performed analysis of data that have been selected on the basis of risk and materiality;
– made inquiries regarding signicant developments in the reported data;
– considered the presentation and disclosure of the ESG statement; and
– 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 (2004) and The
Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011).
B. Regarding alignment with the AA1000 accounting principles of Inclusivity, Materiality,
Responsiveness, and Impact we performed the following activities:
– interviewed members of Novo Nordisk’s Board of Directors and Executive Management
team, representatives of senior management at global and regional levels, as well
as key employees in Global Public Aairs and Sustainability to determine their
understanding of Novo Nordisk’s stakeholders, the mechanisms used to engage them
and key issues of interest to each stakeholder group;
– interviewed external stakeholder to determine their perception of Novo Nordisk’s
stakeholder engagement capabilities, and responsiveness to material concerns of
stakeholders;
– reviewed evidence on a selective basis to support the assertions made in these
interviews and in the stakeholder engagement description;
– conrmed the systems and procedures to support Novo Nordisk’s governance for
responsible business conduct and stakeholder relationships; and
– assessed the disclosure and presentation of the stakeholder engagement description.
Our conclusion
Based on our work and the evidence obtained, nothing has come to our attention that
causes us not to believe that in all material respects:
– The performance data regarding Environment, Social and Governance, on pages from
85 to 91 in the report, have been stated in accordance with the reporting criteria;
– The description in the report adheres to the principles of inclusivity, materiality,
responsiveness and impact set out in AccountAbility’s AA1000AP (2018);
– The report has been prepared in accordance with the requirements of sections 99a,
99b, 99d and 107d of the Danish Financial Statements Act (FSA).
Observations and recommendations
According to AA1000AS, we are required to include observations and recommendations
for improvements regarding adherence to AA1000AP. We have no signicant
recommendations regarding the principles of Materiality, Inclusivity, Responsiveness and
Impact. We have communicated to Management a number of minor recommendations
for improvement.
Copenhagen, 2 February 2022
Deloitte
Statsautoriseret Revisionspartnerselskab
Business Registration No 33 96 35 56
Anders Vad Dons Helena Barton
State Authorised Public Accountant
mne25299
Lead Reviewer
Novo Nordisk Annual Report 2021 96Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
More information
Additional reporting
Novo Nordisk provides additional disclosure to satisfy legal requirements
and stakeholder interests. Supplementary reports can be downloaded from
novonordisk.com/annualreport, while additional information can be found at
novonordisk.com
Materiality
Novo Nordisk relies on the International Integrated Reporting Council’s
denition of materiality. Information deemed material for providers of
nancial capital in their decision-making is included in the Annual Report, i.e.
of such relevance and importance that it could substantively inuence their
assessments of Novo Nordisk’s ability to create value over the short, medium
and long term. See how Novo Nordisk determines materiality and material
issues at novonordisk.com
Annual Report
This Annual Report is Novo Nordisk’s full statutory Annual Report pursuant
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 24 March 2022 and will subsequently be submitted to
and be available at the Danish Business Authority.
The Annual Report is prepared in accordance with the International Financial
Reporting Standards and the Danish Financial Statements Act. Moreover,
it meets the requirements of an integrated report, as per the International
Integrated Reporting Framework.
The Annual Report also meets the requirements for Communication on
Progress to the UN Global Compact, a voluntary reporting on performance
towards its 10 principles on human rights, labour rights, environment and
anti-corruption and additional progress reporting on corporate sustainability
leadership and UN goals. The Annual Report also adheres to the UN Guiding
Principles Reporting Framework on respect of human rights.
Form 20 F
The Form 20-F is led using a standardised reporting form so that investors
can evaluate the company alongside US domestic equities.
It is an annual reporting requirement by the US Securities and Exchange
Commission (SEC) for foreign private issuers with equity shares listed on
exchanges in the United States.
Remuneration Report
The Remuneration Report describes in accordance with section 139b of
the Danish Companies Act the remuneration awarded or due during 2021
to members of the Board and Executive Management registered with the
Danish Business Authority. The Remuneration Report is submitted to the
Annual General Meeting for an advisory vote.
Corporate Governance Report
The Corporate Governance Report discloses Novo Nordisk’s compliance with
Corporate Governance to meet the requirements of the Danish Financial
Statements Act.
References
Throughout the management review section in this report, links are provided
to online sources for additional information. Some of the references are not
mandatory and hence not included in the audit of the management review.
For more news from Novo Nordisk, visit
novonordisk.com/investors.html
novonordisk.com/news-and-media/latest-news.html
Disclaimer
The patients, employees and relatives portrayed in this Annual Report and
ancillary reports have participated of their own accord and solely to express
their own personal opinions on topics referred to, which do not necessarily
reect the views and opinions of Novo Nordisk. Use of the pictures as
illustrations is in no way intended to associate the patients, employees or
relatives with the promotion of any Novo Nordisk products.
Credits
Design and production: Kontrapunkt.
Illustrations: &Robin.
Photography: Ashley Marie, David Brecetty, Gustavo Aranda Hernández, Jesper
Edvardsen, Jesper Westley, Kelly Mailloux, Martin Juul, Matt Pugh, Sala Lewis.
Novo Nordisk Annual Report 2021 97Contents Introducing Novo Nordisk Strategic Aspirations Key risks Management Consolidated statements Additional information
New-generation insulin and combinations
Tresiba
®
, insulin degludec
Ryzodeg
®
70/30, insulin degludec/insulin
aspart Fiasp
®
, fast-acting insulin aspart
Xultophy
®
*, insulin degludec/liraglutide
Modern insulin
Levemir
®
, insulin detemir
NovoRapid
®
**, insulin aspart
NovoMix
®
30, biphasic insulin aspart
NovoMix
®
50, biphasic insulin aspart
NovoMix
®
70, biphasic insulin aspart
Human insulin
lnsulatard
®
, isophane (NPH) insulin
Actrapid
®
, regular human insulin
Mixtard
®
30, biphasic human insulin
Mixtard
®
40, biphasic human insulin
Mixtard
®
50, biphasic human insulin
Glucagon-like peptide-1
Victoza
®
, liraglutide
Ozempic
®
, semaglutide
Rybelsus
®
, oral semaglutide
Pre-lled delivery system
FlexTouch
®
, U100, U200
FlexPen
®
InnoLet
®
Ozempic
®
pen
Ozempic
®
Single dose device
Durable delivery systems
NovoPen
®
6
NovoPen
®
5
NovoPen
®
4
NovoPen Echo
®
Plus
NovoPen Echo
®
Other delivery systems
PumpCart
®
, NovoRapid
®
& Fiasp
®
cartridge to be used in pump
Cartridge Vial
Oral antidiabetic agents
NovoNorm
®
, repaglinide
Glucagon
GlucaGen
®
, glucagon for diagnostic use
GlucaGen
®
Hypokit, glucagon emergency kit for
severe hypoglycaemia
Needles
NovoFine
®
Plus
NovoFine
®
NovoTwist
®
NovoFine
®
AutoCover
®
Glucagon-like peptide-1
Saxenda
®
, liraglutide 3.0 mg
Wegovy
®
, semaglutide 2.4 mg, FlexTouch
®
Obesity delivery systems
Saxenda
®
pen
Wegovy
®
, Single dose device, FlexTouch
®
Rare Blood Disorders
NovoSeven
®
, recombinant factor VIIa,
also available with pre-lled syringe in an
increasing number of countries
NovoEight
®
***, recombinant factor VIII
NovoThirteen
®
, recombinant factor XIII
Rexia
®
****, nonacog beta pegol; N9-GP
Esperoct
®
, turoctocog alfa pegol, NS-GP
Rare Endocrine Disorders
Norditropin
®
, somatropin (rDNA origin)
Sogroya
®
, somapacitan
Macrilen™, macimorelin; growth hormone
secretagogue receptor agonist
Human growth hormone delivery
system Pre-lled delivery system
FlexPro
®
NordiFlex
®
Nordilet
®
NordiPen
®
Durable delivery systems
Durable multi-dose delivery system to be
used with Norditropin
®
SimpleXx
®
Other delivery system
PenMate
®
, automatic needle inserter
(for NordiPen
®
and NordiFlex
®
)
Hormone replacement therapy
Vagifem
®
, estradiol hemihydrate
Activelle
®
, estradiol/norethisterone acetate
Kliogest
®
, estradiol/norethisterone acetate
Novofem
®
, estradiol/norethisterone acetate
Trisequens
®
, estradiol/norethisterone acetate
Estrofem
®
, estradiol
Diabetes care BiopharmObesity care
* In the US approved under the brand name Xultophy
®
100/3.6 ** In the US called NovoLog
®
*** In the US spelt Novoeight
®
**** In the US approved under the name of REBINYN
®
29 March 2022
Payment, B shares
28 March 2022
Record date
25 March 2022
Ex-dividend
24 March 2022
Annual General meeting
4 May 2022
Financial statement for the
rst three months of 2022
5 April 2022
Payment, ADRs
12 August 2022
Ex-dividend
4 August 2022
Financial statement for the
rst six months of 2022
2 November 2022
Financial statement for the
rst nine months of 2022
1 February 2023
Financial statement for 2022
and Annual Report 2022
23 August 2022
Payment, ADRs
16 August 2022
Payment, B shares
15 August 2022
Record date
2022 nancial calender
Product overview
Financial statements of the parent company 2021
The following pages comprise the nancial 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.
Income statement
For the year ended 31 December
DKK million Note 2021 2020
Net sales 2 112,553 100,940
Cost of goods sold 3 (26,642) (20,662)
Gross prot 85,911 80,278
Sales and distribution costs 3 (30,021) (26,673)
Research and development costs 3 (15,244) (14,524)
Administrative costs 3 (1,976) (1,913)
Other operating income and
expenses 1,032 1,976
Operating prot 39,702 39,144
Prot in subsidiaries, net of tax 8 16,879 10,394
Financial income 4 2,415 2,144
Financial expenses 4 (2,225) (2,238)
Prot before income taxes 56,771 49,444
Income taxes (9,248) (7,285)
Net prot 47,523 42,159
Balance sheet
At 31 December
DKK million Note 2021 2020
Assets
Intangible assets 6 9,110 7,938
Property, plant and equipment 7 27,007 25,322
Financial assets 8 71,564 43,598
Deferred income tax assets 5 228 —
Other receivables and prepayments — 218
Total non-current assets 107,909 77,076
Raw materials 3,754 2,781
Work in progress 10,899 10,647
Finished goods 2,131 2,246
Inventories 16,784 15,674
Trade receivables 2,128 1,523
Amounts owed by aliated companies 13,200 15,893
Tax receivables 695 —
Other receivables and prepayments 2,967 2,353
Receivables 18,990 19,769
Marketable securities 5,904 —
Derivative nancial instruments 9 1,690 2,332
Cash at bank 8,870 11,509
Total current assets 52,238 49,284
Total assets 160,147 126,360
DKK million Note 2021 2020
Equity and liabilities
Share capital 462 470
Net revaluation reserve according to
the equity method 17,675 9,749
Development costs reserve 1,218 959
Reserve for cash ow hedge (1,600) 1,617
Retained earnings 52,714 50,241
Total equity 70,469 63,036
Borrowings 10 10,111 596
Deferred income tax liabilities 5 — 523
Other provisions 11 1,377 1,348
Total non-current liabilities 11,488 2,467
Borrowings 10 12,648 6,275
Derivative nancial instruments 9 2,184 1,365
Trade payables 3,048 2,910
Amounts owed to aliated
companies 53,826 40,931
Tax payables 171 3,114
Other liabilities 6,313 6,262
Total current liabilities 78,190 60,857
Total liabilities 89,678 63,324
Total equity and liabilities 160,147 126,360
Novo Nordisk Annual Report 2021 98Financial statements of the parent company
Equity statement
DKK million
Share
capital
Net
revaluation
reserve
Reserve for cash
ow hedges and
exchange rate
adjustments
Develop-
ment costs
reserve
Retained
earnings 2021 2020
Balance at the beginning of the year 470 9,749 1,617 959 50,241 63,036 57,432
Appropriated from net prot 17,500 17,500 24,995
Appropriated from net prot to net revaluation reserve 6,312 6,312 (3,902)
Exchange rate adjustments of investments in subsidiaries 1,614 10 1,624 (1,689)
Eect of cash ow hedges transferred to the income statement (3,227) (3,227) 1,940
Fair value adjustments of cash ow hedges for the year — —
Development costs 259 (259) — —
Other adjustments 1,904 1,904 (179)
Transactions with owners:
Total dividend for the year 23,711 23,711 21,066
Interim dividends paid during the year (8,021) (8,021) (7,570)
Dividends paid for prior year (13,496) (13,496) (12,551)
Reduction of the B share capital (8) 8 — —
Purchase of treasury shares (19,447) (19,447) (16,855)
Share-based payments (note 3) 383 383 327
Tax related to restricted stock units 190 190 22
Balance at the end of the year 462 17,675 (1,600) 1,218 52,714 70,469 63,036
Proposed appropriation of net prot:
Interim dividend for the year 8,021 7,570
Final dividend for the year 15,690 13,496
Appropriated to net revaluation reserve 6,312 (3,902)
Transferred to retained earnings 17,500 24,995
Distribution of net prot 47,523 42,159
Please refer to note 4.2 in the consolidated nancial statements for details
on the average number of shares, treasury shares and total number of A
and B shares in Novo Nordisk A/S.
Development in share capital
DKK million
A share
capital
B share
capital
Total
share
capital
Beginning of 2017 107 403 510
Cancelled in 2017 — (10) 500
Cancelled in 2018 — (10) 490
Cancelled in 2019 — (10) 480
Cancelled in 2020 — (10) 470
Cancelled in 2021 — (8) 462
Share capital at the end of the year 107 355 462
Novo Nordisk Annual Report 2021 99Financial statements of the parent company
Notes
1 Accounting policies
The nancial 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 nancial statements of the parent company
are unchanged from the previous nancial year except for implementation
of accounting policy related to goodwill. The accounting policies are the
same as for the consolidated nancial statements with the adjustments
described below. For a description of the accounting policies of the Group,
please refer to the consolidated nancial statements.
No separate statement of cash ows has been prepared for the parent
company; please refer to the statement of cash ows for the Group.
Supplementary accounting policies for the parent company
Financial assets
In the nancial 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
basis rather than a consolidation method. The net prot of subsidiaries and
associated companies less unrealised intra-group prots and amortisation
of goodwill is recorded in the income statement of the parent company.
Goodwill is amortised over no more than 25 years which reects the useful
life of the underlying assets and activities generating the goodwill.
To the extent that net prot 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. Prots in subsidiaries and associated companies are
disclosed as prot after tax.
Amounts owed by aliates, 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 ow hedges and exchange rate adjustments.
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 Danish subsidiaries are included in the joint
taxation of the parent company, Novo Holdings A/S.
2 Sales
DKK million 2021 2020
Sales by business segment
Diabetes and Obesity care 112,347 100,741
Biopharm 206 199
Total sales 112,553 100,940
Sales by geographical segment
North America Operations 57,654 52,054
International Operations:
EMEA 27,124 25,124
China 15,608 12,554
Rest of World 12,167 11,208
Total sales 112,553 100,940
Sales are attributed to a geographical segment based on location of the
customer. For denitions of segments, please refer to note 2.2 in the
consolidated nancial statements. Refer to note 5.7 in the consolidated
nancial statements for an overview of companies in the Novo Nordisk
Group based on geographical areas.
3 Employee costs
DKK million 2021 2020
Wages and salaries 12,485 11,503
Share-based payment costs 383 327
Pensions 1,116 1,045
Other social security contributions 207 176
Other employee costs 363 299
Total employee costs in the income
statement 14,554 13,350
Average number of full-time employees 16,851 15,782
Year-end number of full-time employees 17,534 16,151
For information regarding remuneration to the Board of Directors and
Executive Management, please refer to note 2.4 to the consolidated nancial
statements.
4 Financial income and nancial expenses
DKK million 2021 2020
Interest income relating to subsidiaries 238 263
Result of associated company — 21
Foreign exchange gain (net) — 1,751
Financial gain from forward contracts (net) 2,021 —
Other nancial income 156 109
Total nancial income 2,415 2,144
Interest expenses relating to subsidiaries 13 137
Result of associated company 13 —
Foreign exchange loss (net) 1,978 —
Financial loss from forward contracts (net) — 1,777
Other nancial expenses 221 324
Total nancial expenses 2,225 2,238
Novo Nordisk Annual Report 2021 100Financial statements of the parent company
5 Deferred income tax assets/(liabilities)
DKK million 2021 2020
Net deferred tax asset/(liability) at the beginning
of the year (523) 95
Income/(charge) to the income statement (330) (18)
Income/(charge) to equity 1,081 (600)
Net deferred tax asset/(liability) at the end of
the year 228 (523)
The Danish corporate tax rate was 22% in 2021 (22% in 2020).
6 Intangible assets
DKK million 2021 2020
Cost at the beginning of the year 11,077 6,065
Additions during the year 1,560 5,165
Disposals during the year (65) (153)
Cost at the end of the year 12,572 11,077
Amortisation at the beginning of the year 3,139 2,637
Amortisation during the year 289 306
Impairment losses for the year 34 349
Amortisation and impairment losses reversed
on disposals during the year — (153)
Amortisation at the end of the year 3,462 3,139
Carrying amount at the end of the year 9,110 7,938
Intangible assets primarily relate to intellectual property rights, internally
developed software and costs related to major IT projects.
7 Property, plant and equipment
DKK million
Land and
buildings
Plant and
machinery
Other
equipment
Assets
under
con-
struction 2021 2020
Cost at the beginning of the year 22,094 22,347 4,013 3,529 51,983 49,545
Additions during the year 328 995 162 2,823 4,308 3,089
Disposals during the year (108) (145) (34) (9) (296) (651)
Transfer from/(to) other items 630 1,544 244 (2,418) — —
Cost at the end of the year 22,944 24,741 4,385 3,925 55,995 51,983
Depreciation and impairment losses at the beginning of the year 9,314 14,954 2,393 — 26,661 24,821
Depreciation for the year 1,084 1,089 347 — 2,520 2,387
Impairment losses for the year 9 18 54 9 90 97
Depreciation reversed on disposals during the year (95) (145) (34) (9) (283) (644)
Depreciation and impairment losses at the end of the year 10,312 15,916 2,760 — 28,988 26,661
Carrying amount at the end of the year 12,632 8,825 1,625 3,925 27,007 25,322
Of which related to leased property, plant and equipment 545 — 52 — 597 763
Leased property, plant and equipment primarily relates to lease of oce buildings, warehouses, laboratories and vehicles.
Novo Nordisk Annual Report 2021 101Financial statements of the parent company
8 Financial assets
DKK million
Invest-
ments in
subsi-
diaries
Amounts
owed by
aliated
companies
Invest-
ment in
associated
company
Other
securities
and invest-
ments 2021 2020
Cost at the beginning of the year 29,174 4,047 105 1,220 34,546 18,493
Investments during the year 19,698 1,255 67 21,020 29,629
Divestments and repayments during the year (989) (590) (1,579) (13,576)
Cost at the end of the year 48,872 4,313 105 697 53,987 34,546
Value adjustments at the beginning of the year 26,255 (245) 111 (452) 25,669 28,803
Prot/(loss) before tax 19,635 19,635 18,187
Share of result after tax in associated company (13) (13) 21
Income taxes on prot for the year (2,006) (2,006) (3,748)
Market value adjustment 75 75 (171)
Dividends received (11,050) (4) (11,054) (16,785)
Divestments during the year 216 216 (3)
Eect of exchange rate adjustment charged to the income statement 281 17 298 —
Eect of exchange rate adjustment charged to equity 2,603 10 2,613 (3,103)
Other adjustments 500 500 2,468
Value adjustments at the end of the year 35,937 46 94 (144) 35,933 25,669
Unrealised internal prot at the beginning of the year (16,617) (16,617) (13,420)
Unrealised internal prot movements in the year (750) (750) (4,045)
Eect of exchange rate adjustment charged to equity (989) (989) 848
Unrealised internal prot at the end of the year (18,356) — — — (18,356) (16,617)
Carrying amount at the end of the year 66,453 4,359 199 553 71,564 43,598
The carrying amount of investments in subsidiaries does not include
capitalised goodwill at the end of the year. For a list of companies in the
Novo Nordisk Group, please refer to note 5.7 to the consolidated nancial
statements.
Novo Nordisk Annual Report 2021 102Financial statements of the parent company
9 Derivatives
For information on derivative nancial instruments, please refer to note 4.4
to the consolidated nancial statements.
10 Borrowings
DKK million 2021 2020
Within 1 year 12,648 6,275
1-5 years 5,282 470
More than 5 years 4,829 126
Total borrowings 22,759 6,871
11 Other provisions
Provisions for pending litigations are recognised as other provisions.
For information on pending litigations, please refer to note 3.4 to the
consolidated nancial 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.
12 Related party transactions
For information on transactions with related parties, please refer to note 5.4
to the consolidated nancial statements.
The parent company’s share of services provided by NNIT Group amounts to
DKK 490 million (DKK 638 million in 2020).
Novo Nordisk A/S is included in the consolidated nancial statements of the
Novo Nordisk Foundation.
13 Fee to statutory auditors
DKK million 2021 2020
Statutory audit 8 8
Audit-related services 2 3
Tax advisory services 2 5
Other services 2 1
Total fee to statutory auditors 14 17
14 Commitments and contingencies
DKK million 2021 2020
Commitments
Leases
1
117 137
Potential milestone payments
2
11,978 6,794
Guarantees given for subsidiaries 19,141 8,490
Other guarantees 112 101
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; please refer to note 5.2 to the
consolidated nancial statements.
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, please refer
to notes 3.4 and 5.2 to the consolidated nancial statements.
Novo Nordisk Annual Report 2021 103Financial statements of the parent company