3,000 2,750 2,500 2,250 2,000 1,750 1,500 1,250 1,000 750 500 250 0 Turnover (DKKm) Cipramil®/Seropram® Other antidepressants Serdolect®/Serlect® 1,227 807 Other antipsychotics Other turnover 453 241 113 180 282 193 181 340 172 252 309 198 427 242 12 482 205 37 525 333 1992 1993 1994 1995 1996 COSTS Total production, distribution and administration costs increased by 20% from 1995 to 1996. Production costs grew by 4% in 1996. This low growth rate is due to a change in the composition of sales, as there has been a shift towards products with a higher contribution ratio. Distribution costs increased by 42% in 1996. This increase is primarily attributable to costs for preparation of the introduction of the new product Serdolect®/Serlect® into a number of European markets, to special marketing costs in connection with the introduction of Cipramil®/Seropram® into new markets as well as to the general market expansion. Administration costs grew by 21% in 1996 and thus make up 19% of the turnover compared with 20% in 1995. Administration costs include costs for an extensive upgrading of the Groups IT application. This comprises a common technological application, an international communications network as well as comprehensive training of all the Groups employees. The objective is to strengthen Group efficiency and competitiveness through information technology. The increase in administration costs is also attributable to the continued development of the capacity in new and established sales subsidiaries. RESEARCH AND DEVELOPMENT COSTS Total research and development costs grew by 31% to DKK 332 million. As in the two previous years, research and development costs make up 14% of the turnover. The costs pertain partly to the existing products, Cipramil®/Seropram® and Serdolect®/Serlect®, and partly to a number of new products within the Groups strategic core areas. OPERATING PROFIT Profit before research and development costs grew by 43%, while operating profit improved by 52% from 1995 to 1996. Thus the Groups expectations for the operating profit for 1996 were met despite the fact that in 1996 Lundbeck had a very high level of operating investments in connection with the introduction of new products into a number of markets as well as a continued increase in the number of markets. In 1996, Lundbeck realised the expected financial profits through a positive market development and a considerable financial adjustability supported by a tight and focused financial management of the Groups many activities and units. The positive development is reflected in the net profit ratio, which increased from 11% in both 1994 and 1995 to 13% in 1996. 33
CONTENTS Supervisory Board and Board of Management . . . . . . . . . . . . . . . . . . . . 4 The Sup
SPECIALISTS IN PSYCHIATRY PIONEERS IN NEUROLOGY As a specialist, one must constantly seek knowledge
SUPERVISORY BOARD Arne V. Jensen (Chairman) Jørgen Fakstorp (Vice-Chairman) Lars Bruhn Henrik He
BOARD OF MANAGEMENT Erik Sprunk-Jansen President Eva Steiness Executive Vice President Research and
2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Net turnover (DKKm) 1,853 2,326
THE SUPERVISORY BOARDS REPORT DEVELOPMENT OF STRATEGY The rules of play for pharmaceutical companies
2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Average number of employees Outs
THE SUPERVISORY BOARDS REPORT The development of Serdolect®/Serlect® for the American market has tak
ART OR THERAPY In 1988 a group of Dutch psychiatrists formed the Art & Psychiatry Foundation arr
Art & Psychiatry Foundation is therefore to question the concept art and serve as a mediator bet
THE VALUE OF CREATIVE THERAPY In spite of the lack of scientific studies of creative therapy, both p
and the methods we employ. For me it is important to keep wondering, says Dr. de Groot. In this way,
A STEP IN THE RIGHT DIRECTION Professor Norman Sartorius, President of the World Psychiatric Associa
opment of a part of the national mental health programme in which Lundbeck and Grenlandsaksjonen wil
NATURAL CONSIDERATIONS We have a major responsibility for the internal and external environment in c
changes without taking the necessary precautions, and the knowledge that a defective filter or an ov
FOCUS ON PARKINSONS DISEASE Lundbeck works in two main areas. For this reason we describe ourselves
refers to various theories about heredity, environmental impacts, head trauma, side-effects of drugs
A PRODUCT WITH POTENTIAL There is broad agreement that the development of specific serotonin-reuptak
and on their family and social relations. In fact, the quality of life of patients with phobias is j
ITS ALL ABOUT PREVENTION In 1993, Lundbeck, working in close cooperation with some of the worlds lea
Preclinical tests show that preparations like Serdolect®/Serlect® do not affect the part of the brai
LUNDBECKS PRODUCTS Lundbeck specialises in the development of new and better drugs for the treatment
In April 1997, we sold the rights to Ketogan® and Ketodur® to Searle Scandinavia (a division of Mons
LUNDBECK WORLDWIDE Lundbecks head office is situated in Valby, near the centre of Copenhagen. It hou
Norway H. Lundbeck A/S P.O. Box 361 Lysaker torg 10, N-1324 Lysaker Tel: +47 6753 5372 Fax: +47 6753
THE LUNDBECK FOUNDATION AWARD FOR OUTSTANDING RESEARCH H. Lundbeck A/S is fully owned by the Lundbec
ACCOUNTS
SUMMARY FOR THE GROUP 1987-1996 Profit and loss account (DKKm) Net turnover Profit before R&D co
Key figures Average number of employees Net profit ratio before R&D costs (%) Net profit ratio (
COMMENTS ON THE ACCOUNTS CHANGES IN ACCOUNTING POLICIES With effect from the annual accounts for 199
3,000 2,750 2,500 2,250 2,000 1,750 1,500 1,250 1,000 750 500 250 0 Turnover (DKKm) Cipramil®/Sero
COMMENTS ON THE ACCOUNTS 100% 90% 80% 70% 60% 18 26 20 22 23 36 35 34 33 Cost structure (%) 28 Pro
450 400 350 300 250 200 150 100 50 0 -50 -100 -150 Cash flow (DKKm) 281 282 231 191 203 164 145 98
FINANCIAL COMMENTS GENERAL The Lundbeck Groups financial income and expenses in 1996 were influenced
Lundbecks cash flows in foreign currencies in 1996 were concentrated around SEK, FRF, FIM and DEM bl
ACCOUNTING POLICIES GENERAL The annual accounts and the consolidated accounts have been prepared in
THE BALANCE SHEET INTANGIBLE FIXED ASSETS Intangible fixed assets are stated at cost less accumulate
Win Van Niel, Daoux Rex, bronze, 35 x 25 x 8 cm. 40
PROFIT AND LOSS ACCOUNT PARENT COMPANY 1995 DKKm 1,042.8 469.1 157.3 160.8 255.6 221.2 12.7 5.9 41.2
BALANCE SHEET AT 31 DECEMBER ASSETS PARENT COMPANY 1995 DKKm 21.0 11.0 32.0 312.3 97.2 112.2 114.0 6
BALANCE SHEET AT 31 DECEMBER LIABILITIES PARENT COMPANY 1995 DKKm 110.0 14.7 25.5 785.1 935.3 1996 D
STATEMENT OF SOURCES AND APPLICATION OF FUNDS GROUP 1996 DKKm 310.8 5.0 84.3 400.1 -47.2 -78.4 78.0
SIGNATURES Copenhagen, 24 April 1997 THE Erik Sprunk-Jansen President BOARD OF MANAGEMENT Ib D.
NOTES 1 NET TURNOVER PARENT COMPANY 1995 DKKm 282.2 760.6 1,042.8 1996 DKKm 263.0 1,150.7 1,413.7 De
Production, distribution, administration, and research and development costs include depreciation et
NOTES 4 FINANCIAL ITEMS, NET PARENT COMPANY 1995 DKKm 44.4 1.4 30.4 2.8 79.0 43.4 5.5 8.8 57.7 21.3
6 FOREIGN CURRENCY TRANSLATION OF SUBSIDIARIES PROFIT AND LOSS ACCOUNTS AT THE EXCHANGE RATE RULING
NOTES 7 INTANGIBLE AND TANGIBLE FIXED ASSETS GROUP: Research and Leasehold INTANGIBLE development im
7 INTANGIBLE AND TANGIBLE FIXED ASSETS - CONTINUED PARENT COMPANY: Research and Leasehold INTANGIBLE
NOTES 8 SHARES IN SUBSIDIARIES Total Purchase price 84.8 4.1 -115.5 145.8 88.9 56.1 -3.2 39.5 -18.7
8 SHARES IN SUBSIDIARIES - CONTINUED Specified as follows: Equity value at 31.12.1996 DKKm 1.6 57.0
NOTES 9 OTHER SHAREHOLDINGS AND OTHER RECEIVABLES PARENT COMPANY Other shareholdings 4.5 1.6 -0.7 5.
11 PROVISIONS FOR DEFERRED TAX Timing differences between amounts as stated in the accounts and as c
NOTES 13 DEBT PARENT COMPANY 1995 DKKm 378.2 27.7 141.7 547.6 10.3 11.7 22.0 569.6 18.2 84.5 0.0 50.
14 CHANGE IN INTEREST-BEARING DEBT GROUP 1996 DKKm Proceeds in connection with the raising of intere
Marjanne Voolstra, Eerste berg, acrylic paint on paper, 100 x 70 cm. 58
INTEGRATED THERAPY When disease strikes, it is not just a case of a fault in the works that has to b
The story of Lundbecks logo is rather unusual. It goes back to the 1930s and Paris, where Grete Lund
