Investor Presentaiton
Novo Nordisk Annual Report 2023
Part of the Management review - not audited
Return on invested capital (ROIC)
ROIC is defined as 'operating profit after tax' (using the effective tax rate) as a percentage
of average inventories, receivables, property, plant and equipment, intangible assets and
deferred tax assets, less non-interest-bearing liabilities including provisions and deferred
tax liabilities (where the average is the sum of the above assets and liabilities at the
beginning of the year and at year-end divided by two).
Management believes ROIC is a useful measure in providing investors and Manage-
ment with information regarding the Group's performance. The calculation of this
financial target is a widely accepted measure of earnings efficiency in relation to total
capital employed.
The following tables show the reconciliation of ROIC with operating profit/equity in %,
the most directly comparable IFRS financial measure:
ROIC denominator
DKK million
Intangible assets
Property, plant and equipment
Reconciliation of net operating assets to equity: IFRS
2023
2022
60,406
50,939
2021
43,171
DKK million
2023
2022
2021
Equity IFRS
106,561
83,486
70,746
90,961
66,671
55,362
Investment in associated companies
(410)
(327)
(525)
Deferred income tax assets
20,380
13,904
8,672
Other financial assets
(1,253)
(1,016)
(916)
Other receivables and prepayments (non-
current)
Marketable securities
(15,838)
(10,921)
(6,765)
1,430
206
267
Derivative financial instruments
(2,344)
(2,727)
(1,690)
Inventories
31,811
24,388
Trade receivables
64,770
50,560
19,621
40,643
Cash at bank
(14,392)
(12,653)
(10,720)
Borrowings non-current
20,528
24,318
12,961
Tax receivables
2,423
940
1,119
Borrowings current
6,478
1,466
13,684
Other receivables and prepayments
Derivative financial instruments
1,272
2,903
2,184
(current)
8,068
6,005
5,037
Operating profit/equity in %
Net operating assets
100,602
84,529
78,959
Deferred income tax liabilities
(10,162)
(7,061)
(5,271)
DKK million
2023
Operating profit IFRS
102,574
2022
74,809
/ Equity IFRS
106,561
83,486
2021
58,644
70,746
Retirement benefit obligations
(742)
(762)
(1,280)
Other liabilities (non-current)
(189)
(100)
(360)
Provisions (non-current)
(6,649)
(4,590)
(4,374)
Operating profit/equity in %
96.3%
89.6%
82.9%
Trade payables
(25,606)
(15,587)
(8,870)
ROIC
Tax payables
(7,116)
(7,091)
(3,658)
DKK million
2023
2022
2021
Other liabilities (current)
(28,705)
(23,606) (19,600)
Operating profit after tax
81,957
60,146
47,384
Provisions (current)
(100,478)
(70,287)
(51,520)
/ Average net operating assets
92,566
81,744
68,634
Net operating assets
100,602
84,529
78,959
ROIC in %
88.5%
73.6%
69.0%
Average net operating assets
92,566
81,744
68,634
ROIC numerator
Reconciliation of operating profit to operating profit after tax
DKK million
2023
2022
Operating profit IFRS
102,574
74,809
2021
58,644
Tax on operating profit (using effective
tax rate)
(20,617)
Operating profit after tax
81,957
(14,663)
60,146
(11,260)
47,384
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