Novo Nordisk Annual Report 2020 Team Novo Nordisk, the world’s first all-diabetes professional cycling team, are racing with 100 on their jersey to celebrate the 100-year anniversary of the discovery of insulin Novo Nordisk A/S - Novo Allé 1, 2880 Bagsværd, Denmark - CVR no. 24256790 Introducing Novo Nordisk / Strategic Aspirations / Corporate governance / Consolidated statements / Additional information Novo Nordisk Annual Report 2020 / 2 Contents Management review Consolidated statements Introducing Novo Nordisk Consolidated financial statements Letter from the Chair . 3 Income statement . 47 Letter from the CEO . 5 Cash flow statement . 48 Novo Nordisk at a glance . 7 Balance sheet . 49 Business model . 8 Equity statement . 50 Performance highlights . 9 Notes to the consolidated financial statements . 51 Strategic Aspirations Consolidated ESG statement (supplementary information) Purpose and sustainability . 11 Statement of ESG performance . 81 Innovation and therapeutic focus . 20 Notes to the consolidated ESG statement . 82 Commercial execution . 26 Financials . 29 Statements and Auditor's Reports Statement by Board of Directors and Executive Management . 88 Corporate governance Independent Auditor's Reports . 89 Risk management . 34 Independent Assurance Report on the ESG statement . 91 Shares and capital structure . 36 Corporate governance . 38 Governance practices . 40 Additional information Mandy is part of Team Novo Nordisk, the world’s first Board of Directors . 42 More information . 92 all-diabetes professional cycling team Executive Management . 45 Product overview . 93 Introducing Novo Nordisk / Strategic Aspirations / Corporate governance / Consolidated statements / Additional information Novo Nordisk Annual Report 2020 / 3 Letter from the Chair Rising to the challenge The devastating impact of COVID-19 on societies and economies in 2020 intensified existing challenges such as inequality and poverty. However, in times of crisis, businesses play a critical role in mobilising resources and providing solutions. Novo Nordisk has worked hard to respond to the challenges, helping people with serious chronic diseases while also supporting society on a broader scale. Novo Nordisk’s highest priority in 2020 was to commercial organisation embraced an increasingly ensure the safety of our employees and the digital new reality. uninterrupted supply of our life-saving medicines for patients. We achieved this, while also The world has been through one of the most supporting society's response to the pandemic, difficult years in recent human history. Despite most notably in Denmark, where our headquarter the pandemic and the turbulent business presence meant we were able to assist the environment, Novo Nordisk took important steps government in the rapid scale-up of coronavirus towards delivering on our purpose of driving testing . At the same time, our scientists continued change to defeat diabetes and other serious to make significant progress in discovering chronic diseases – a goal we are confident will new therapies of the future, while our global translate into sustainable and profitable growth. Introducing Novo Nordisk / Strategic Aspirations / Corporate governance / Consolidated statements / Additional information Novo Nordisk Annual Report 2020 / 4 This does not mean that the road ahead is going Employees from the Novo Nordisk research department volunteered to be easy . The pandemic has exacted an immense to contribute to the fight against economic, as well as human, cost on societies COVID-19 and, together with staff from the Danish health service, they helped and it is inevitable that public finances will remain to increase the testing capacity in Denmark . fragile for many years. Those fiscal constraints will put pressure on businesses that work closely with governments, including the pharmaceutical industry, and we will have to find new ways to ensure that our products are accessible to all those who need them. Beyond COVID-19, two consistent priorities were high on the Board’s agenda in 2020, namely scientific innovation and sustainability – both of which are vital to ensure the future of the company . It is therefore satisfying to see a healthy product pipeline, including the pioneering science “Above all, 2020 underscored It is increasingly clear that society expects more Above all, 2020 underscored the need for strong cor- that we consider to be the biggest contribution we the need for strong corporate from businesses as the world grapples with porate values and a shared sense of purpose . We are can make to society . values and a shared sense climate change and environmental degradation, as fortunate that both are well-established across our of purpose. We are fortunate well as the need for greater equity in healthcare. organisation, empowering our employees to keep Our research is now more broadly focused as we that both are well-established Indeed, the pandemic has turbocharged many of delivering for both patients and investors, despite look to deliver treatments within therapy areas across our organisation, these issues, with an effective alliance emerging the unprecedented disruptions caused by COVID-19 . adjacent to our core competencies. Specifically, empowering our employees between young people and investors that is this means looking beyond semaglutide, the GLP-1 to keep delivering for both prompting companies to pay far more attention to On behalf of the Board of Directors I would like to molecule found in our new oral diabetes treat- patients and investors, sustainability . offer my thanks to all Novo Nordisk’s employees ment Rybelsus® and the once-weekly injectable despite the unprecedented for their hard work and commitment during the Ozempic®. We are exploring novel ways to treat disruptions caused by At Novo Nordisk, we have been focused on exceptional challenges of 2020; to Lars Fruergaard a range of conditions beyond diabetes, including COVID-19.” sustainability for many years – but we are Jørgensen and his team for leading the company cardiovascular disease – the world’s leading cause determined to continue to raise our game . through a turbulent year in such a thoughtful and of death1 – obesity and most recently also as a In the past year we launched a new social positive manner; and to our shareholders for their potential treatment for Alzheimer’s disease. In responsibility strategy, Defeat Diabetes, and continued support . tandem with this push into new areas, we are also initiated programmes within renewable power establishing more external alliances and partner- and recycling as part of our Circular for Zero Helge Lund ships to complement our in-house expertise . 1 . WHO, The top 10 causes of death (2020) environmental strategy . Chair of the Board of Directors Introducing Novo Nordisk / Strategic Aspirations / Corporate governance / Consolidated statements / Additional information Novo Nordisk Annual Report 2020 / 5 Letter from the CEO The power of purpose The COVID-19 pandemic has taken a terrible toll around the world – but the pain has not been shared equally. People with underlying conditions have been hit disproportionately hard by the virus, a fact that makes Novo Nordisk’s purpose of driving change to defeat diabetes and other serious chronic diseases more meaningful than ever. Today, one in 11 people in the world has diabetes discovery of insulin, the first of these is 'Purpose and if action is not taken to bend the curve, that and sustainability'. Over the past year we have figure is projected to rise to one in nine by 20451 . stepped up our commitment to our purpose by The risk posed by COVID-19 to people living with launching a new Defeat Diabetes social responsi- diabetes and obesity is a clear wake-up call: we bility strategy . This sets out our ambition to accel- must continue to do more to tackle these diseases erate the prevention of type 2 diabetes, provide or risk vast future damage to millions of lives, as access to affordable care for vulnerable patients in well as to broader societies and economies. every country and innovate to improve lives . We measure our contribution to the fight against Beyond defeating serious chronic diseases, we diabetes and other serious chronic diseases in our also aspire to have zero environmental impact . Strategic Aspirations for 2025 . Appropriately, after In 2020, we took an important step by achieving a year as unparalleled as 2020, and as the world our target of using 100% renewable power across acknowledges the hundredth anniversary of the global production – a key milestone on the road to our target of zero CO2 emissions from all 1 . IDF Diabetes Atlas, 9th edition, 2019 operations and transport by 2030 . Introducing Novo Nordisk / Strategic Aspirations / Corporate governance / Consolidated statements / Additional information Novo Nordisk Annual Report 2020 / 6 We now also ask that by the end of the decade, progress with our ambition to secure sustained our direct suppliers use only renewable power growth within our Biopharm division thanks to when supplying us. It has been great to see some strong demand for our growth hormone and new of our largest suppliers step up and meet this haemophilia products . target already . I believe that our ability to meet the needs of our Despite this encouraging progress, we can millions of patients during the pandemic in 2020 only fulfil our purpose and be respected for comes as a consequence of our crystal-clear adding value to society if we deliver on our core purpose and long-established