Novo Nordisk Sales Beat on Diabetes Treatments — Earnings Review

Novo Nordisk A/S (NVO) reported results for the fourth quarter on Wednesday. Here’s what we watched:
SALES: Sales rose 9% to 32.42 billion Danish kroner ($4.79 billion) against analysts’ expectations of DKK31.95 billion. Sales in the quarter found support from Novo Nordisk’s diabetes treatments, as well as increased sales in obesity care and biopharm, offset by declining insulin sales.
NET PROFIT: Net profit for the three months ended Dec. 31 rose to DKK8.72 billion from DKK8.5 billion a year earlier, missing the DKK9.2 billion forecast by analysts in a FactSet poll.
WHAT WE WATCHED:
GLUCAGON-LIKE PEPTIDE-1: Sales of Novo Nordisk’s Ozempic glucagon-like peptide-1 products for type 2 diabetes–Victoza, Ozempic and Rybelsus–increased by 27% measured in Danish kroner and by 22% in local currencies to DKK33.2 billion in 2019. Sales growth was driven by both its North America and international operations, it said. Sales of Ozempic totaled DKK11.2 billion and Ozempic has now been launched in 26 countries. The GLP-1 segment’s value share of the total diabetes market has increased to 18.0% compared with 14.4% 12 months ago and Novo Nordisk said it has a 47.5% market share in the global GLP-1 segment.
MARGINS: The gross margin was 83.2% in the fourth quarter of 2019 compared with 84.4% in the same period last year. The decline of 1.2 percentage points of the gross margin reflects a negative impact from lower realised prices in the U.S. and a negative currency impact of 0.3 percentage point partly countered by a positive product mix. The EBIT margin rose slightly to 36.6% from 36.3%.
GUIDANCE: For 2020, sales growth is expected to be 3%-6% measured in local currencies, reflecting expectations for robust sales of the company’s diabetes-care products Ozempic, Victoza and Rybelsus, obesity-care product Saxenda, the portfolio of new-generation insulin and biopharm products Esperoct, Refixia and NovoEight. The guidance also reflects intensifying competition both within diabetes care and biopharm, as well as continued pricing pressure within diabetes care and affordability initiatives in the U.S., it said. Sales growth reported in Danish kroner is expected to be one percentage point higher than in local currencies. Operating-profit growth is expected to be 1% to 5% measured in local currencies. Reported in Danish kroner it is expected to be one percentage point higher than in local currencies. Capital expenditure is expected to be around DKK6.5 billion in 2020, primarily relating to investments in additional capacity for production within diabetes care.

https://www.marketscreener.com/NOVO-NORDISK-AS-1412980/news/Novo-Nordisk-Sales-Beat-on-Diabetes-Treatments-Earnings-Review-29943740/