Investor Presentaiton
Novo Nordisk Annual Report 2023
Non-IFRS financial measures
(part of the Management review - not audited)
In the Annual Report, Novo Nordisk discloses certain financial measures of the
Group's financial performance, financial position and cash flows that reflect
adjustments to the most directly comparable measures calculated and presented
in accordance with IFRS. These non-IFRS financial measures may not be defined
and calculated by other companies in the same manner, and may therefore not
be comparable.
The non-IFRS financial measures presented in the Annual Report are:
Net sales and operating profit in constant exchange rates (CER)
⚫ 'Net profit', adjusted for 'income taxes', 'financial items', 'depreciation and
amortisation' and 'impairment losses' (EBITDA)
Return on invested capital (ROIC)
Free cash flow
Cash to earnings
Net sales IFRS
Part of the Management review - not audited
Net sales in constant exchange rates
DKK million
2023
2022
232,261
Effect of exchange rate
7,658
Net sales in constant exchange rates
Net sales previous year
239,919
176,954
% increase/(decrease) in reported currencies
31.3%
176,954
(13,024)
163,930
140,800
25.7%
2021
140,800
3,643
144,443
126,946
10.9%
% increase/(decrease) in constant
exchange rates
Earnings before interest, taxes, depreciation, amortisation
and impairment losses (EBITDA)
EBITDA is defined as 'net profit', before 'income taxes', 'financial items', 'depreciation
and amortisation' and 'impairment losses'.
Management believes EBITDA is a useful measure as it helps analyse operating results
from core business operations without including the effects of capital structure, tax
rates, depreciation, amortisation and impairment losses.
The following table shows a reconciliation of EBITDA with operating profit, the most
directly comparable IFRS financial measures:
35.6%
16.4%
13.8%
Operating profit in constant exchange rates
EBITDA
DKK million
2023
2022
Operating profit IFRS
102,574
74,809
Effect of exchange rate
4,898
(7,578)
2021
58,644
2,332
DKK million
2023
2022
2021
Net profit IFRS
83,683
55,525
47,757
Income taxes IFRS
20,991
13,537
11,323
Operating profit in constant exchange rates
Operating profit previous year
107,472
67,231
60,976
Financial income IFRS
(2,945)
(239)
(2,887)
74,809
58,644
54,126
Financial expenses IFRS
845
5,986
2,451
% increase/(decrease) in reported currencies
37.1%
27.6%
8.3%
Operating profit (EBIT) IFRS
102,574
74,809
58,644
43.7%
14.6%
12.7%
Depreciation and amortisations
Impairment losses
7,289
6,553
5,311
2,124
809
714
EBITDA
111,987
82,171
64,669
IFRS refers to an IFRS financial measure.
Sales and operating profit growth in constant exchange rates
'Growth in constant exchange rates' means that the effect of changes in exchange
rates is excluded. It is defined as sales/operating profit for the period measured at
the average exchange rates for the same period of the prior year, compared with net
sales/operating profit for the same period of the prior year. Price adjustments within
hyperinflation countries as defined in IAS 29 'Financial reporting in hyperinflation
economies' are excluded from the calculation to avoid growth in constant exchange
rates being artificially inflated. Growth in constant exchange rates is considered to be
relevant information for investors in order to understand the underlying development
in sales and operating profit by adjusting for the impact of currency fluctuations.
% increase/(decrease) in constant
exchange rates
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