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.View entire presentation