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Investor Presentaiton

Novo Nordisk Annual Report 2023 Introducing Novo Nordisk Strategic Aspirations Risks Management Consolidated statements Additional information 71 F Financial reserves DKK million Cash and cash equivalents 2023 2022 2021 4.5 Derivative financial instruments (note 4.7) 14,392 12,653 10,719 DKK million Marketable securities 15,838 10,921 6,765 Forward contracts USD1 Undrawn committed credit facility4 11,552 11,527 11,526 Forward contracts CNH, CAD and JPY² Borrowings (Note 4.6) (5,431) (480) (12,861) Financial reserves 36,351 34,621 16,149 4. The undrawn committed credit facility comprises a facility EUR 1,550 million in 2023 and EUR 1,550 million in 2022 committed by a portfolio of international banks. The facility matures in 2025. 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 Eurobonds and bank overdrafts contractually obliged for repayment within 12 months of the balance sheet date. Forward contracts, cash flow hedges Forward contracts USD¹ Forward contracts EUR, CNH, CAD and others² Forward contracts, fair value hedges Total derivative financial instruments Recognised in the income statement Recognised in other comprehensive income 2023 Contract amount Positive fair value Negative fair value Contract amount Positive fair value at year-end at year-end at year-end at year-end at year-end 2022 Negative fair value at year-end 104,022 1,600 193 59,292 1,591 907 20,246 295 90 10,677 373 31 124,268 1,895 283 69,969 1,964 938 65,870 330 946 38,432 639 1,942 28,520 119 43 4,111 124 23 94,390 449 989 42,543 763 1,965 218,658 2,344 449 1,272 989 112,512 2,727 2,903 763 1,965 1,895 283 1,964 938 1. Average hedge rate for USD cash flow hedges is 676 at the end of 2023 (696 at the end of 2022) and average hedge rate for USD fair value hedges is 675 at the end of 2023 (714 at the end of 2022). 2. For 2022 the relevant currencies are CAD, JPY and GBP. The fair value of cash flow hedges at year-end 2023, a gain of DKK 1,612 million, has been recognised in other comprehensive income. The financial contracts are expected to impact the income statement within the next 12 months, with deferred gains and losses on cash flow hedges then being transferred to financial income or financial expenses. There is no expected ineffectiveness at 31 December 2023, primarily because hedging instruments match currencies of hedged cash flows. Use of derivative financial instruments The derivative financial 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 financial contract that qualifies 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 financial transaction (cash flow 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 flow hedges Value adjustments of the effective part of cash flow 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 flow hedges of foreign currency risk on highly probable non-financial asset purchases, the cumulative value adjustments are transferred directly from the cash flow hedge reserve to the initial cost of the asset when recognised. Discontinuance of cash flow 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 forecasted transaction is ultimately recognised in the income statement. When a forecasted 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 financial income or financial expenses. For additional disclosures on accounting policies for financial instruments refer to note 4.9.
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