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Slide 1
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Sustainability investor call
18 May 2016
Shanghai – part of Cities Changing Diabetes
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Agenda
Sustainable business – overview and strategy by Jakob Riis, EVP, China, Pacific & Marketing
Social and environmental responsibility – examples by Susanne Stormer, VP, Corporate Sustainability
Changing Diabetes by Jakob Riis, EVP, China, Pacific & Marketing
Question and Answer session
Sustainability investor call
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Forward-looking statements
Novo Nordisk’s reports filed with or furnished to the US Securities and Exchange Commission (SEC), including the company’s Annual Report 2015 and Form 20-F, which are both filed with the SEC in February 2016 in continuation of the publication of the Annual Report 2015, and presentations made, written information released, or oral statements made, to the public in the future by or on behalf of Novo Nordisk, may contain forward-looking statements. Words such as ‘believe’, ‘expect’, ‘may’, ‘will’, ‘plan’, ‘strategy’, ‘prospect’, ‘foresee’, ‘estimate’, ‘project’, ‘anticipate’, ‘can’, ‘intend’, ‘target’ and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward-looking statements. Examples of such forward-looking statements include, but are not limited to:
• Statements of targets, plans, objectives or goals for future operations, including those related to Novo Nordisk’s products, product research, product development, product introductions and product approvals as well as cooperation in relation thereto
• Statements containing projections of or targets for revenues, costs, income (or loss), earnings per share, capital expenditures, dividends, capital structure, net financials and other financial measures
• Statements regarding future economic performance, future actions and outcome of contingencies such as legal proceedings, and
• Statements regarding the assumptions underlying or relating to such statements.
These statements are based on current plans, estimates and projections. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific. Novo Nordisk cautions that a number of important factors, including those described in this presentation, could cause actual results to differ materially from those contemplated in any forward-looking statements.
Factors that may affect future results include, but are not limited to, global as well as local political and economic conditions, including interest rate and currency exchange rate fluctuations, delay or failure of projects related to research and/or development, unplanned loss of patents, interruptions of supplies and production, product recall, unexpected contract breaches or terminations, government-mandated or market-driven price decreases for Novo Nordisk’s products, introduction of competing products, reliance on information technology, Novo Nordisk’s ability to successfully market current and new products, exposure to product liability and legal proceedings and investigations, changes in governmental laws and related interpretation thereof, including on reimbursement, intellectual property protection and regulatory controls on testing, approval, manufacturing and marketing, perceived or actual failure to adhere to ethical marketing practices, investments in and divestitures of domestic and foreign companies, unexpected growth in costs and expenses, failure to recruit and retain the right employees, and failure to maintain a culture of compliance.
Please also refer to the overview of risk factors in ‘Managing risks’ on p 42-43 of the Annual Report 2015.
Unless required by law, Novo Nordisk is under no duty and undertakes no obligation to update or revise any forward-looking statement after the distribution of this presentation, whether as a result of new information, future events or otherwise.
Sustainability investor call
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The Novo Nordisk Way builds the foundation of the company’s strategy
Core capabilities
Expand leadership in DIABETES
Pursue leadership in HAEMOPHILIA
Establish presence in OBESITY
Expand leadership in GROWTH DISORDERS
Strategic priorities
The Novo Nordisk Way
Engineering, formulating, developing and delivering protein-based treatments
Deep disease under- standing
Efficient large-scale production of proteins
Building and maintaining a leading position in emerging markets
Planning and executing global launches of new products
Driving change to defeat diabetes and other serious chronic conditions
Sustainability investor call
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The Novo Nordisk Way The Triple Bottom Line Business Principle
The Triple Bottom Line (TBL) is the foundation for how Novo Nordisk creates value and stays successful
Sustainability investor call
We build on the purpose set by our founders and live by their values: The Novo Nordisk Way sets the direction and unites us around a common purpose in the pursuit of our aspirations
The Triple Bottom Line Principle guides how we do business responsibly and how we make decisions that consider the interests of stakeholders and the long-term interests of our shareholders
Financially responsible
Socially responsible
Environmentally responsible
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Novo Nordisk made a commitment to have renewable energy for all production sites by 2020 and to reduce CO2 emissions related to activities from across the value chain
UN: United Nations
Our activities are aligned with the UN Sustainable Development Goals (SDG)
Example of key strategic priorities contributing to achieving the SDGs
The new UN global goals are an opportunity to focus on ‘good health’ including preventing diabetes
NCDs: non-communicable diseases
Sustainability investor call
The Cities Changing Diabetes partnership maps and analyses root causes of urban diabetes and will provide solutions to address systemic issues relating to healthy living in cities
Explicit mention of NCDs as a priority for global health is a business opportunity for Novo Nordisk to work with governments to address needs for diabetes prevention and care
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The Triple Bottom Line at work Long-term targets
We chose long-term TBL targets that create value both for the society and our business
Sustainability investor call
Social targets • 40 million people treated with Novo Nordisk’s diabetes
care products by 2020 • Working the Novo Nordisk Way >4 score in survey
Environmental targets • Decouple consumption of water and energy from sales
growth: increase of <50% of sales growth • 100% production sites worldwide to be powered by
renewable energy by 2020 Financial targets • 10% operating profit growth • 125% operating profit after tax to net operating assets • 90% cash to earnings
Demonstrate responsibility for impacts on society
Integrate social and environmental priorities
in business strategy
Lead towards
prosperity
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0%
10%
20%
30%
40%
Million1
In 2015, good progress was made towards achieving the long-term goals
Patients reached with diabetes care products
0
10
20
30
40
50
60
2011 2015
1 Novo Nordisk estimate; 2 Average score in annual employee survey (1-5); 3 Target not to exceed
0
1
2
3
4
1,000,000 GJ
2011 2015
Energy consumption3
0
1
2
3
4
5
2011 2015
Working the Novo Nordisk Way2
2011 2015
Operating Profit Growth
Points Growth Realised
Target
Realised
Target
Realised
Target
Realised
Target
Sustainability investor call
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1. Early diagnosis:
• ~200 million people are left undiagnosed
2. Treatment to target:
• Over 30% will have at least one complication when diagnosed
3. Urban diabetes:
• Urban living can lead to 5 times higher risk of diabetes in emerging countries
• ~65% of people with diabetes live in urban areas globally
Changing Diabetes® encompasses multilevel projects that tackle the global diabetes pandemic
Changing Diabetes® addresses the largest potentials to overcome the ‘Rule of Halves’
‘Rule of Halves’: only ~6% of people with diabetes achieve desirable outcomes
* Actual rates of diagnosis, treatment, targets and outcomes vary in different countries ** Recommended glucose levels
Sustainability investor call
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Global partnerships to develop an approach to fight urban diabetes
Seven partner cities are addressing the threat of urban diabetes
Cities Changing Diabetes aims to break the ‘Rule of Halves’ and stop urban diabetes from ruining millions of lives
Urban diabetes: Type 2 diabetes in cities
• Map the challenge in selected cities
• Share learning and best practices on how to break the ‘Rule of Halves’
• Implement action plans with local partners
2/3 of people living
with diabetes live
in urban areas
Mexico City
Copenhagen
Houston
Shanghai
Sustainability investor call
Tianjin
Johannesburg
City Leaders
Vancouver
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Seven Diabetes Support Centres launched in Ghana
‘Base of the Pyramid’ programme aims to improve access to care in low income markets
Novo Nordisk aims to close the gap in access to care, particularly in the least developed markets
IO: International Operations
Free screening at Diabetes Support Centre in Accra, Ghana, April 2014
Sustainability investor call
• Business development initiative aiming to increase access to care in low income countries through interventions to:
1. Increase awareness of diabetes
2. Ensure early diagnosis of diabetes
3. Educate healthcare professionals to manage diabetes
4. Increase availability and accessibility of diabetes care products
5. Improve adherence through patient education and support
• Projects launched in Ghana, India, Kenya and Nigeria with different business models
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• In 2015, Novo Nordisk made a public commitment to go ‘100% renewable’
Novo Nordisk Climate Ambition covers the entire value chain
100% renewable power at production sites in 2020
Novo Nordisk works across the value chain to reduce CO2 emissions
Sustainability investor call
Denmark Brazil Japan China
US France Russia Algeria
• Novo Nordisk Climate Ambition is to continuously cut CO2 emissions per treated patient
• We work across the value chain to:
• Engage with suppliers to reduce their CO2 emissions
• Reduce CO2 emissions from company cars and business travel
• Increase energy efficiency in production
• Reduce air transport in distribution of our products
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Novo Nordisk has a comprehensive approach to bioethics
Clinical trials create value for society and are conducted in an ethical and sustainable way
HCP: health care professional Source: Assessing the value of diabetes clinical research, Novo Nordisk Blueprint
Sustainability investor call
Creating value through clinical trials
80% of patients said that
clinical trials improved their HbA1c levels after participation
74% of HCPs agreed that
the benefits of participation for patients extend beyond the clinical trial
35% higher screening
success in our clinical trials than the industry average
90% of patients rate
their overall clinical trial experience as positive
75% of HCPs believe that clinical trials contribute to overall
improvements in treatments and patient care at their hospital/clinic
Clinical trial ethics
Animal ethics
Gene technology ethics
Stem cell ethics
Human biosamples
Value to society Value to Novo Nordisk
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Novo Nordisk follows the OIG framework and industry specific policies Key 2015 achievements
Ensuring ethical business conduct on a global scale
HCP: healthcare professional EFPIA: European Federation of Pharmaceutical Industries and Associations
Sustainability investor call
Ethics compliance programme by the US Office of the Inspector General of the Department of Health & Human Services (OIG Framework):
1. Trends, risks and procedures
2. Governance and coordination
3. Training
4. Effective lines of communication
5. Auditing and monitoring
6. Disciplinary guidelines
7. Investigations and corrective actions
Industry specific policies:
• Disclosure of HCP payments
• US Sunshine Act
• EFPIA disclosure act
• Annual business ethics training for 97% of all employees
• 49 business ethics assurance reviews conducted
• Audits covering 18,500 employees on adherence to Novo Nordisk Way
• 240 supplier audits
• Group-wide human rights impact assessment covered all corporate functions and global processes. Novo Nordisk is now acting on the findings through a number of work streams
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Employee health and safety and engagement are key focus areas for management
Novo Nordisk is committed to building a diverse and inclusive organisation
Novo Nordisk is committed to the continued development of its employees
Note: numbers refer to FY2015, except for FTEs FTE: full-time employees 1 Excluding employees in NNIT A/S, which was divested in 2015
Sustainability investor call
2010 2015
Total Appointments Sr. Managers
2010 2015 2010 2015
63%
37% 41%
59% 56%
44%
14%
86%
11%
89%
90.9% retention rate
3.0 accidents per million working hours
4.3 engagement with the Novo Nordisk Way
41,571 FTE employees and 6% growth vs LY1
59%
41%
Male
Female
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The Blueprint for Change Programme aims to understand, communicate and optimise the value created through the TBL
Sustainability investor call
COMING SOON
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Closing remarks
Strategic activities focus on urban diabetes aligned with business priorities
Environmental performance challenged by continued growth of the company
Responsible business practices with robust governance and consistently solid performance
Poised for sustainable business: Strong TBL track-record and ambitious new long-term targets in place
Sustainability investor call
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Share information Investor Relations contacts
Investor contact information
Novo Nordisk’s B shares are listed on the stock exchange in Copenhagen under the symbol ‘NOVO B’. Its ADRs are listed on the New York Stock Exchange under the symbol ‘NVO’. For further company information, visit Novo Nordisk on the internet at: novonordisk.com
Peter Hugreffe Ankersen +45 3075 9085 [email protected]
Melanie Raouzeos +45 3075 3479 [email protected]
In North America:
Kasper Veje +1 609 235 8567 [email protected]
Novo Nordisk A/S Investor Relations Novo Allé, DK-2880 Bagsværd
Upcoming events
13 Jun 2016 Investor and analyst event in connection with ADA
05 Aug 2016 Financial statement for the first six months of 2016
28 Oct 2016 Financial statement for the first nine months of 2016
02 Feb 2017 Financial statement for 2016
Sustainability investor call