Investor Presentaiton
Novo Nordisk Annual Report 2023
Part of the Management review - not audited
Free cash flow
Free cash flow 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 within the business to fund future growth.
The following table shows a reconciliation of free cash flow with net cash generated
from operating activities, the most directly comparable IFRS financial measure:
Free cash flow
DKK million
Net cash generated from operating
activities IFRS
Cash to earnings
Cash to earnings is defined as 'free cash flow as a percentage of net profit'.
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 flow is used as the numerator instead of net cash flow.
The following table shows the reconciliation of cash to earnings to cash flow from
operating activities/net profit in %, the most directly comparable IFRS financial measure:
2023
2022
2021
Cash flow from operating activities/net profit in %
DKK million
2023
2022
2021
108,908
78,887
55,000
Net cash used in investing activities IFRS
(43,892)
(24,918) (31,605)
Net cash generated from operating
activities IFRS
Net purchase of marketable securities IFRS
4,758
2,921
5,937
/ Net profit IFRS
108,908
78,887
83,683
55,525
55,000
47,757
Addition on marketable securities through
acquisition of business IFRS
Cash flow from operating
1,470
861
activities/net profit in %
130.1%
142.1%
115.2%
Repayment on lease liabilities IFRS
(1,448)
(998)
(874)
Free cash flow
68,326
57,362
29,319
Cash to earnings
DKK million
2023
2022
2021
Free cash flow
68,326
57,362
29,319
/ Net profit IFRS
83,683
55,525
47,757
Cash to earnings
81.6%
103.3%
61.4%
98
85View entire presentation