FINANCIAL COMMENTS GENERAL The Lundbeck Groups financial income and expenses in 1996 were influenced by heavy fluctuations in the Danish interest rate level as well as by the political unrest in France, Spain, Italy and Sweden at the beginning of the year. In 1996, Lundbeck thus had a net interest expenditure due to the fact that the Groups loan portfolio was financed by long-term bonds with a high rate of interest, while the Group pursued a conservative investment strategy for the money market-like bonds in the portfolio until the autumn of 1996. However, the net interest expenditure was set off by capital gains on the bond portfolio in the second half of 1996. price loss of DKK 13.5 million, whereas an interest rate decline of 1/2 percentage point would lead to a capital gain of DKK 11.8 million on the bond portfolio. The Groups bond portfolio bore interest at an average rate of 7.65% in relation to the market value as at 31 December 1996. assets. Furthermore, the change to new accounting policies, under which both the loan and the bond portfolios are converted to market value, means that this effect is reflected in the financial profits for the individual years. This was not possible under the accounting policies previously applied. In addition to the provision of loans on mortgage credit-like terms, the Group uses its bankers for short-term financing and operating credits. LOAN PORTFOLIO MANAGEMENT In 1996, a refinancing and conversion of the Groups loan portfolio were carried out. The refinancing meant a reduction in the number of the Groups lenders providing loans on mortgage credit-like terms. The Groups loans on mortgage credit-like terms were the following: Loan amount Mortgage credit loan (refinanced as at 1 January 1997) Interest adjustment loan DKKm 346.6 Interest rate 8.08% Term to maturity 0 years BOND PORTFOLIO MANAGEMENT At year-end 1996, the market value of the Groups bond portfolio amounted to DKK 417.6 million. During the year, the portfolio strategy was revised currently due to the heavy fluctuations in the interest rate level, primarily in the first half of 1996. For the year in general, net capital gains were realised on the bond portfolio. Interest income reflects the conservative strategy, causing the yield for the year as a whole to finish just above money market level. The modified duration (BPV - Basis Point Value), which expresses the bond portfolios price sensitivity, was 6.0 at year-end 1996. The sensitivity of Lundbecks bond portfolio can be illustrated thus: an increase in interest rates of 1/2 percentage point would lead to a DKKm 32.3 9.40%* 15 years *Interest adjustment as at 1 April 1998. The average rate of interest in connection with the financing of the loan portfolio was 8.19% p.a. as at 31 December 1996. As at 1 January 1997, the majority of the Groups loans were converted into one short-term CIBOR (Copenhagen-Inter-Bank-Offered-Rate) based loan. Thus, the interest on the loan was reduced by approx. 4 percentage points to the level 4% p.a. This refinancing makes possible a flexible interest rate fixing as well as a quick matching of financial liabilities and CURRENCY MANAGEMENT Lundbecks currency management is governed by a policy approved by the Supervisory Board, which establishes a framework for the use of financial instruments, hedging horizons, bankers etc. The hedging horizon for the Groups currency hedging continues to be 12 months. As a principal rule, Lundbeck hedges net currency cash flows and not balance sheet items. Only commercial hedging is carried out by means of forward exchange contracts. The Groups currency management is undertaken centrally by the Treasury & Tax department of H. Lundbeck A/S. At year-end 1996, just below 13% of the Groups budgeted cash flows in foreign currencies for 1997 were hedged by means of forward contracts. This hedging concerns receivables payable in the following currencies: FRF, BEF, ATS, GBP and FIM. In 1997, a revision of the Groups currency management will be carried out. 240 220 200 180 160 140 120 100 80 60 40 20 0 Market value of Danish bonds as at 31 December 1996 (DKKm) 181 105 74 55 3 Government 7% 2004 36 Government 8% 2006 Mortgage credit 8% 2026 Mortgage credit 8% 2029 Mortgage credit 9% 2016
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
