Novo Nordisk Annual Report 2021
Contents
Introducing Novo Nordisk
Strategic Aspirations
Key risks
Management
Consolidated statements
Additional information.
Novo Nordisk Annual Report 2021 36
Cash flow and capital allocation
Dividend for prior year Interim dividend Share repurchases
DKK
billion
50
40
30
20
10
0
2018
*Expectations for 2022
2022 outlook
2019
2020
2021
2022E*
For 2022, sales growth is expected to be 6% to 10% at CER.
The guidance reflects 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 reflects 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 reflected in
the guidance. Furthermore, continued pricing pressure within
Diabetes care, especially in the US, is expected to negatively
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 profit growth is expected to be 4% to 8% at CER. The
expectation for operating profit growth primarily reflects 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 profit
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 financial items (net) to amount to
a loss of around DKK 2.8 billion, mainly reflecting losses associated
with foreign exchange hedging contracts.
The effective 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 reflects 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 flow is expected to be DKK 50-55 billion. The
increase in free cash flow compared to 2021 reflects 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 significantly 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
financial implications of any significant business development
transactions during the remainder of 2022.
Novo Nordisk has hedged expected net cash flows in a number of
invoicing currencies and, all other things being equal, movements
in key invoicing currencies will impact Novo Nordisk's operating
profit as outlined in note 4.3 in the financial statements.
Expectations are as reported,
if not otherwise stated
Sales growth
at CER
as reported
Expectations
2 February 2022
6% to 10%
Around 5 percentage points higher than at CER
Operating profit growth
at CER
4% to 8%
Around 7 percentage points higher than at CER
Loss of around DKK 2.8 billion
20% to 22%
as reported
Financial items (net)
Effective tax rate
Capital expenditure (PP&E)
Depreciation, amortisation
and impairment losses
Free cash flow (excluding impact
from business development)
Around DKK 12.0 billion
Around DKK 6.5 billion.
DKK 50-55 billionView entire presentation