1. DIRF Klaus Bülow Davidsen, Head of IR
DIRF: Financial guidance
6 December 2018
Financial guidance
DIRF
Klaus Bülow Davidsen, Head of IR

2. DIRF: Financial guidance
6 December 2018
Guidance benchmark
For most companies, quarterly guidance is not necessary. Annual guidance is acceptable, especially when quarterly updates on these goals are provided.
Earnings should not be the primary focus. Buy-siders ascribe as much importance to margins and revenues and even more to strategic and operational objectives.
Operational guidance is far more often considered reliable than financial guidance.
Ranges rather than precise goals are intuitively more prudent and acceptable to investors.
Whatever guidance is shared must be first thoroughly vetted internally so the company is absolutely certain goals communicated are ones that will be achieved.
Source: Rivel Associates, ‘A closer look at compliance’, April 2011

3. Novo Nordisk’s guidance statement from the IR policy
DIRF: Financial guidance
6 December 2018
Novo Nordisk’s guidance statement from the IR policy

4. Novo Nordisk’s two types of financial guidance
DIRF: Financial guidance
6 December 2018
Novo Nordisk’s two types of financial guidance
Long-term financial targets
Detailed financial guidance for the year in progress

5. Long-term financial guidance
DIRF: Financial guidance
6 December 2018
Long-term financial guidance
Four elements included: Current targets
Operating profit growth 15%
Operating margin %
Return on invested capital 70%
Cash to earnings (three year average) 90%

6. Detailed financial guidance for the year in progress
DIRF: Financial guidance
6 December 2018
Detailed financial guidance for the year in progress
Example from Q reporting:

7. Impact of currency movements
DIRF: Financial guidance
6 December 2018
Impact of currency movements
Example from Q reporting:

8. DIRF: Financial guidance
6 December 2018
Preliminary guidance for the subsequent year in connection with Q3 reporting
Example from Q reporting:

9. Guidance process Preliminary guidance for subsequent year
DIRF: Financial guidance
6 December 2018
Guidance process
Q3 report
Preliminary guidance for subsequent year
Q4 report
Detailed guidance for remainder of the year
Q1 report
Q2 report
Detailed guidance on remainder of the year