ANNUAL REPORT 2004 FINANCIAL, SOCIAL AND ENVIRONMENTAL PERFORMANCE
ancial and no
data pages 4
Getting on with my life
Advances in insulin therapy make the difference
Time to actDiabetes is a time bomb in the developing world
Movers and shakers
Embracing the globe
Driving forceInnovation and balance
drive business success
REPORTANNUAL REPORT 2004
Defeating diabetes02 CAN DIABETES REALLY BE DEFEATED?
Defeating diabetes demands social leadership and scientificbreakthroughs. It all comes down to prevention.
12 GETTING ON WITH MY LIFEDiabetes is as complex and variable as peoples individualpersonalities and lifestyles, which is why there is no one-size-fits-all insulin therapy.
Innovation20 WHEN TIME IS RUNNING OUT
NovoSeven may save lives and prevent severe disabil-ities in many life-threatening situations.
26 RESEARCH AND DEVELOPMENT PIPELINE
Competitive business results10 DRIVING FORCE
Novo Nordisk answers questions on its short- and long-termbusiness strategy.
38 PERFORMANCE HIGHLIGHTS
41 FINANCIAL & NON-FINANCIAL PERFORMANCE DATAThe management report, Triple Bottom Line performance in-dicators, financial, environmental and social highlights, reviewof corporate governance and risk management, financial ac-counts and notes, and non-financial accounting policies.
108 SHAREHOLDER INFORMATION
Challenging workplace32 GLOBAL EXPANSION
With a worldwide sales organisation and customers in everycorner of the globe, Novo Nordisk is working towards be-coming more international.
34 LEADING WITH PASSIONA strategy for developing talent and diversity is key for NovoNordisks future growth.
Values in action18 AN INDUSTRY UNDER FIRE
The pharmaceutical industry is being challenged on every-thing from access to medicine, drug pricing and marketingto the conduct of clinical trials.
28 TIME TO ACTFor the developing world, diabetes is a future time bomb,with two-thirds of future diabetes cases expected to occur inthis part of the world.
36 PREPARING FOR A LOW-CARBON FUTUREClimate change is one of the serious environmental chal-lenges facing humankind. If unaddressed, it can be a grow-ing and costly business risk.
Front cover: Andrea Monjars Tamz from Mexico knows that by taking care ofherself, she can live her life with all it has to offer including skateboarding!Andrea has type 1 diabetes. See page 14 for more information.
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D efeating diabetes is our passion and our business.We have built our company on that aspiration,and this is what defines our commitment as a re-sponsible business. The diabetes epidemic travelsfast across the globe, and so we must be there atits heels when it strikes or even better: before it does. We will con-tinue to develop better treatment options and to drive research intowhat matters most: to find the cure. We will also be rallying for theprevention of diabetes, with a special focus on children and youth our future.
Novo Nordisk is an increasingly active player in the global compe-tition for resources, people, market shares and voice. In 2004 wesignificantly expanded our sales organisation in key growth markets.We have grown our business, especially in the US and in developingcountries. In Brazil, China and the US we have made large invest-ments in new production facilities, building a global sourcing net-work at competitive costs. And today, more than 40% of NovoNordisks people are employed outside Denmark.
In diabetes, Novo Nordisk has the broadest product portfolio inthe industry, and with the approval and launch of Levemir in Europe,we are the first company with a full range of insulin analogues. Inhaemostasis management, we achieved proof of concept in stop-ping serious bleeds in trauma and intracerebralhaemorrhage with NovoSeven. And we believethat our pipeline will prove that we can play akey role in the discovery and development ofnew biopharmaceuticals for the treatment ofother serious illnesses such as cancer and in-flammatory diseases.
As a result of the growing demand forbetter diabetes therapy, our competitiveportfolio of patent-protected new ana-logues, and further penetration of the usage of NovoSeven both within haemo-philia and for investigational use, we arerealising strong growth in our sales.
But no road is smooth. Competition istougher than ever, and healthcare reformsacross the globe and in particular in Europeare impacting profit margins. In 2004 we alsosaw yet another year with adverse currencydevelopments for European-based companieswhich called for continued cost cautiousness.In spite of this we are pleased to see very sat-isfactory financial results for 2004. For this,we thank the people of Novo Nordisk fortheir commitment and efforts, as well as our
partners and collaborators throughout the world. Also in 2004 wesaw an appreciation of Novo Nordisks share price and we are pleasedto see that our shareholders were rewarded for their support.
Novo Nordisk is well positioned to meet the challenges of the future. We have built leadership positions in areas of huge unmetmedical needs. We are expanding our research network internation-ally while building a global sourcing organisation. There will be chal-lenges related to the transformation of jobs in developed countriesto jobs with increased knowledge content, while new jobs are createdin developing economies. We are rolling out a portfolio of new andpatent-protected products and are not like the rest of the pharma-ceutical industry, which is exposed to patent expirations over the nextfew years. We have a strong track record in the area of biopharma-ceuticals, an area which we believe will represent significant growthopportunities in the future. Therefore we see globalisation as an opportunity.
In a highly competitive business environment there is a particularchallenge in taking a long-term, holistic perspective. Novo Nordisktakes a multi-pronged approach to providing better access to healththrough capacity building, a preferential pricing policy for the poor-est nations and funding through the World Diabetes Foundation,which is now reaching out to many millions of people with diabetes.
In terms of sustainability, Novo Nordisk demonstrates itsdetermination to play a leading role by setting a target
for an absolute reduction of CO2 emissions over thenext decade. When people can overcome the chal-
lenges of diabetes, we must as a company tack-le the global challenges of social and sustain-
able stewardship.The Novo Nordisk Annual Report 2004
provides a balanced presentation of thecompanys financial, social and environ-mental performance this year for thefirst time in one inclusive report.
We hope you will enjoy reading it. E
growth in operating profitin 2004.
9%cash to earnings ratio in 2004.
85.3%million DKK sales in 2004.
29,031return on invested capitalin 2004.
Global challenges global opportunities
LARS REBIEN SRENSEN (L)PRESIDENT AND CEO
MADS VLISEN (R)CHAIRMAN OF THE BOARD OF DIRECTORS
Novo Nordisk Annual Report 2004 1
operating profit marginin 2004.
2 Novo Nordisk Annual Report 2004
Defeating diabetes, one of the four chronic dis-eases which account for 50% of global mortality,demands social leadership as much as scientificbreakthroughs. It all comes down to prevention,says Oxford University, Novo Nordisk and theirpartners in a unique global alliance.
Can diabetesbe defeated?
people died in the US in 2000 fromobesity-related causes, making it thesecond-leading cause of death.
400,000of diabetes cases worldwide arelinked to being overweight; in somecountries, it is as high as 90%.
Novo Nordisk Annual Report 2004 3
he bicycle paths in Shanghai are being paved over for new highways. From NewYork to Munich to So Paulo, people eatfood high in fat, sugar and salt.Conveniences like modern appliances, cars,computers and television encourage peopleto move less. There are too few parks and
playgrounds as much of the world gets around by car. The traditional Western lifestyle, to which many in the developing
world aspire, puts human health at risk. The chronic diseases asso-ciated with an unhealthy lifestyle, like heart disease and diabetes,are striking not just the elderly but also the working-age population insocieties around the world. With growing rates of obesity, children aredeveloping type 2 diabetes a disease formerly seen only in adults.
Chronic diseases are now the largest cause of death in the world.But the developing world is fighting on two fronts: fighting infectiousdiseases while also dealing with explosive rates of chronic disease.
Something has to change. And it means every sector of societyhas to get involved. In 2003, Novo Nordisk, together with OxfordUniversity, founded Oxford Vision 2020. Its goal is to call attentionto the fact that three risk factors (tobacco