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97 Earnings (EPS) 7.50 Market price, year-end 122 Market price, growth 23.5% Market value, year-end DKKbn 28.5 Y supplementary report nnual eport 4 The specialist in psychiatry and pioneer in neurology Supervisory Board Flemming Lindeløv Thorleif Krarup Lars Bruhn Peter Kürstein Mats Pettersson Executive Management Claus Bræstrup Lars Bang Ole Chrintz Hans Henrik Munch-Jensen Stig Løkke P 1 Profit from operations Earnings per share (EPS) Dividend per share Net profit for the year 2,575 2 Imaginative 3 Dare to be different management report 4 management report financial report supplementary report 05 08 10 11 13 15 19 23 24 26 29 A cl 5 A clear vision Five ambitious goals A focused strategy management report After a major transitio 6 Lundbecks vision and strategic five-year horizon Lundbecks vision is to be one of the worlds lead 7 Research and development partnerships enable us to maintain an R&D portfolio on a level with 8 Financial performance in 2004 Group financial highlights 2000-2004 2000 DKKm Revenue Research and 9 When Lundbeck presented its annual report for 2003, management provided financial forecasts for 2 10 Corporate governance For a number of years, Lundbecks Supervisory Board has taken a systematic a 11 Important events in 2004 Cipralex® launched in Spain and approved in Canada At the end of 2004, 12 application with the US health authorities between late 2006 and mid-2007. The companies plan to 13 Financial forecast and targets management report We forecast a profit from operations of approx 14 to 23% in 2004, and we expect to maintain this level in 2005. This stabilisation of the companys 15 Global specialist with a focused strategy Having completed a transitional phase, Lundbeck is now 16 The European market represents 26% of the global market for CNS products. By 2004, Cipralex® for 17 USA ­ revenue overview USA Income from Lexapro® Mature products1 Total revenue, USA 1) Incl. inc 18 Approved drugs Since the launch of the first drugs to treat schizophrenia and other psychotic di 19 Cipralex®/Lexapro® profile Depression can strike anyone, but certain social and biological facto 20 approved in 2005, and with this approval Cipralex® will be approved in Europe for the treatment 21 Other clinical studies presented by Lundbeck demonstrate socioeconomic benefits by using Ebixa® 22 Mature drugs In addition to the three new drugs launched by Lundbeck in the past two years, our 23 Lundbecks products Launched products First registration 2001 1989 2002 Approved, no of countries 24 Innovation and development Lundbecks long-term success hinges on the successful development and 25 stop progression of Parkinsons disease. The ongoing clinical trial will be completed in 2006. Ot 26 Core value chain competencies Lundbeck is the only fully integrated pharmaceutical company in th 27 sional ambitions in a rewarding environment. It is important that we are able to offer our emplo 28 Age composition of Lundbecks employees in 2004 (worldwide) Building competencies through partne 29 Pro-active initiatives for the environment For a number of years, Lundbeck has taken a systemati 30 Consumption of organic solvents Tonnes × 100 100 80 60 40 20 0 2000 2001 2002 2003 2004 Energy 31 Employee involvement At Lundbeck we believe that it is important to involve our employees in hea 32 work per million working hours relative to 2004. The reason for this extra effort is that experi 33 materials, products and employees. To optimise these factors, we aim to analyse Lundbecks transp 34 Passionate Never give up 35 management report 36 Financial report 2004 Y 37 financial report management report 38 Summary for the Group 1995-2004 Income statement (DKKm) Revenue Profit before research and devel 39 Ratios, continued Capital turnover (%) Property, plant and equipment investments, gross (DKKm) I 40 Financial review The annual report of H. Lundbeck A/S is prepared in accordance with internation 41 increase of 26%. In 2004, Forest Laboratories, Inc. generated Lexapro® sales of USD 1,558 millio 42 Cost of sales decreased by 2% in 2004 to DKK 1,724 million. The lower level of costs was attribu 43 Profit before tax rose by 24% to DKK 2,542 million, and profit after tax and minority interests 44 connection with the announcement of the financial results for 2003, Lundbeck introduced a share 45 In 2004, Lundbeck and Forest signed a supplementary agreement that takes into consideration the 46 the market value of the 2004 plan has been calculated at DKK 22.98 per warrant, based on the pri 47 Executive Management Liability, 2004 plans Warrants for the Executive Management and a number of 48 The Groups interest rate risk on the bond portfolio was approx. DKK 39 million at 31 December 20 49 with the prepayment and subsequently recognised in the income statement when the prepayment is r 50 Accounting policies The annual report of H. Lundbeck A/S is prepared in accordance with internat 51 ents proportionate share of the fair value of assets and liabilities at the time of acquisition. 52 Derivative financial instruments Forward exchange contracts and other derivative financial instr 53 Government loans and grants Forgivable government development loans are recognised as income in 54 of the underlying products. Patents are amortised over the remaining patent period, and licences 55 value. Other receivables without a fixed maturity are recognised at cost. Inventories Raw materi 56 those cases where the computation of the tax value can be made under alternative taxation rules, 57 Cash flows denominated in foreign currencies, including cash flows in foreign subsidiaries, are 58 59 Income statement for the year ended 31 December 2004 Parent 2003 DKKm Parent 2004 DKKm Group 200 60 Balance sheet at 31 December 2004 ­ assets Parent 2003 DKKm Parent 2004 DKKm Group 2004 DKKm Gro 61 Balance sheet at 31 December 2004 ­ liabilities Parent 2003 DKKm Parent 2004 DKKm Group 2004 DKK 62 Equity at 31 December 2004 ­ Group 2003 Equity at 1.1.2003 Distribution of dividend 8.4.2003, g 63 Equity at 31 December 2004 ­ Parent Reserve for net revaluation according to the equity method D 64 65 Cash flow statement for the year ended 31 December 2004 Parent 2003 DKKm Parent 2004 DKKm Group 66 Management statement We have today presented the annual report of H. Lundbeck A/S for 2004. The 67 Auditors report To the shareholders of H. Lundbeck A/S We have audited the annual report of H. L 68 69 Notes 1. Revenue Parent 2003 DKKm Parent 2004 DKKm Group 2004 DKKm Group 2003 DKKm 223.1 2,766. 70 Notes 2. Staff costs, continued Employees Parent 2003 DKKm Parent 2004 DKKm Group 2004 DKKm Grou 71 2. Staff costs, continued Share options and warrants for the Executive Management and key employ 72 Notes 2. Staff costs, continued The years adjustment of the calculation basis of the share price 73 3. Depreciation and amortisation Parent 2003 DKKm Parent 2004 DKKm Group 2004 DKKm Group 2003 DK 74 Notes 5. Net financials Parent 2003 DKKm Parent 2004 DKKm Group 2004 DKKm Group 2003 DKKm 32.2 75 6. Tax on profit for the year Parent 2003 DKKm Parent 2004 DKKm Group 2004 DKKm Group 2003 DKKm 76 Notes 7. Intangible assets and property, plant and equipment Group Goodwill DKKm Patent rights D 77 7. Intangible assets and property, plant and equipment, continued Group Land and buildings DKKm 78 Notes 8. Investments in subsidiaries Accumulated revaluations DKKm Accumulated impairment losses 79 8. Investments in subsidiaries, continued Ownership Lundbeck (Hong Kong) Limited, Hong Kong Lun 80 Notes 9. Investments in associates Accumulated revaluations/ impairment losses DKKm Total DKKm 81 11. Inventories Parent 2003 DKKm Parent 2004 DKKm Group 2004 DKKm Group 2003 DKKm 277.1 283.9 82 Notes 14. Provisions for pensions and similar liabilities Parent 2003 DKKm Parent 2004 DKKm Grou 83 14. Provisions for pensions and similar liabilities, continued The UK defined benefit plan is fu 84 Notes 15. Provision for deferred tax Group Temporary differences between assets and liabilities 85 15. Provision for deferred tax, continued Parent Temporary differences between assets and liabil 86 Notes 16. Other provisions Parent 2003 DKKm Parent 2004 DKKm Group 2004 DKKm Group 2003 DKKm 19 87 19. Contractual obligations Rental and lease obligations Lundbeck has obligations amounting to D 88 Notes 20. Contingent liabilities, continued Pending legal proceedings The Group is involved in l 89 21. Financial instruments, continued Trading part Market value (forward exchange contracts) DKKm 90 Notes 21. Financial instruments, continued Interest rate risk The interest rate risk has been ca 91 22. Related parties Lundbeck defines related parties as - The companys principal shareholder, LF 92 Notes 24. Earnings per share 2004 2003 Profit for the year (DKKm) Average number of outstanding 93 27. Acquisition of companies Parent 2003 DKKm Parent 2004 DKKm Group 2004 DKKm Group 2003 DKKm 94 Responsible 3. korrektur | 14.02.2005 95 Do the right thing supplementary report 96 Supplementary report Creating shareholder value 3. korrektur | 14.02.2005 97 Earnings (EPS) 7.50 Market price, year-end 122 Market price, growth 23.5% Market value, year-end 98 Shareholder information Lundbecks year on the stock exchange Lundbecks shares are listed on the 99 LFI A/S is the largest shareholder in H. Lundbeck A/S. LFI A/S is wholly owned by the Lundbeck F 100 Releases from H. Lundbeck A/S in 2004 No 145 144 143 142 141 140 139 138 137 136 135 134 133 13 101 Analyst coverage Broker ABG Sundal Collier Alfred Berg / ABN Amro Alm. Brand Bank Arbejdernes L 102 Market growth Alzheimers disease Depression Parkinsons disease Psychotic disorders Sleep disor 103 Growth in the CNS market With an aggregate value of USD 77.2 billion, the market for drugs to t 104 Alzheimers disease (N7D) Market size USD 2.3 billion Market growth +30% in 2003 The market for 105 N7D geographical distribution, value, full-year 2003 N7D volume, by categories 18% USA Europ 106 Depression (N6A) Market size USD 19.5 billion Market growth +10% in 2003 The market for antide 107 Best-selling drugs in the N6A therapeutic area, full-year 2003 Drug Zoloft® Paxil®/Seroxat® Eff 108 Parkinsons disease (N4A) Market size USD 2.2 billion Market growth +9% in 2003 In 2003, the ma 109 N4A geographical distribution, value, full-year 2003 Categorisation of drugs in the N4A therap 110 Psychotic disorders (N5A) Market size USD 12.2 billion Market growth +20% in 2003 In 2003, the 111 Best-selling drugs in the N5A therapeutic area, full-year 2003 Drug Zyprexa® Risperdal® Seroque 112 Sleep disorders (N5B) Market size USD 3.3 billion Market growth +12% in 2003 In 2003 the marke 113 Best-selling drugs in the N5B therapeutic area, full-year 2003 Drug Ambien® Lendormin® Sonata® 114 Lundbeck worldwide Parent company Denmark H. Lundbeck A/S Subsidiaries Africa South Africa Lun 115 Lundbeck GmbH Greece Lundbeck Hellas S.A. Hungary Lundbeck Hungária KFT Ireland Lundbeck (Irela 116 Design: Bysted A/S Photo: Thomas Busk and Jens Bangsbo Print: Quickly Tryk A/S March 2005 Experience Lundbeck To use this CD please insert in CD drive and Experience Lundbeck will automatica Annual Report 2004 R H. Lundbeck A/S Ottiliavej 9 DK-2500 Copenhagen Valby Corporate Reporting Tel