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NONOF (Novo Nordisk AS) Free Cash Flow : $9,807 Mil (TTM As of Sep. 2024)


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What is Novo Nordisk AS Free Cash Flow?

Novo Nordisk AS's total free cash flow for the months ended in Sep. 2024 was $4,666 Mil. Its total free cash flow for the trailing twelve months (TTM) ended in Sep. 2024 was $9,807 Mil.

Novo Nordisk AS's Free Cash Flow per Share for the months ended in Sep. 2024 was $1.05. Its free cash flow per share for the trailing twelve months (TTM) ended in Sep. 2024 was $2.20.

During the past 12 months, the average Free Cash Flow per Share Growth Rate of Novo Nordisk AS was -13.10% per year. During the past 3 years, the average Free Cash Flow per Share Growth Rate was 34.60% per year. During the past 5 years, the average Free Cash Flow per Share Growth Rate was 20.90% per year. During the past 10 years, the average Free Cash Flow per Share Growth Rate was 11.40% per year. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Free Cash Flow Growth Rate using Free Cash Flow per Share data.

During the past 13 years, Novo Nordisk AS's highest 3-Year average Free Cash Flow per Share Growth Rate was 130.30% per year. The lowest was -51.70% per year. And the median was 22.00% per year.


Novo Nordisk AS Free Cash Flow Historical Data

The historical data trend for Novo Nordisk AS's Free Cash Flow can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Novo Nordisk AS Free Cash Flow Chart

Novo Nordisk AS Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Free Cash Flow
Get a 7-Day Free Trial Premium Member Only Premium Member Only 5,288.05 4,884.39 7,235.22 9,132.13 10,243.46

Novo Nordisk AS Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
Free Cash Flow Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4,342.20 -1,007.35 773.35 5,374.55 4,665.97

Novo Nordisk AS Free Cash Flow Calculation

Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.

Novo Nordisk AS's Free Cash Flow for the fiscal year that ended in Dec. 2023 is calculated as

Free Cash Flow (A: Dec. 2023 )=Cash Flow from Operations+Capital Expenditure
=15934.336+-5690.876
=10,243

Novo Nordisk AS's Free Cash Flow for the quarter that ended in Sep. 2024 is calculated as

Free Cash Flow (Q: Sep. 2024 )=Cash Flow from Operations+Capital Expenditure
=6527.24+-1861.268
=4,666

Free Cash Flow for the trailing twelve months (TTM) ended in Sep. 2024 adds up the quarterly data reported by the company within the most recent 12 months, which was $9,807 Mil.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Novo Nordisk AS  (OTCPK:NONOF) Free Cash Flow Explanation

Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.

In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.

This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.

Therefore, as of Sep24, Novo Nordisk AS's Forward Rate of Return (Yacktman) % is

Forward Rate of Return (Yacktman) % (Sep24)=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=1.85885714/116.6+0.2
=21.59 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.


Novo Nordisk AS Free Cash Flow Related Terms

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Novo Nordisk AS Business Description

Address
Novo Alle 1, Bagsvaerd, DNK, 2880
With roughly one third of the global branded diabetes treatment market, Novo Nordisk is the leading provider of diabetes-care products in the world. Based in Denmark, the company manufactures and markets a variety of human and modern insulins, injectable diabetes treatments such as GLP-1 therapy, oral antidiabetic agents, and obesity treatments. Novo also has a biopharmaceutical segment (constituting roughly 10% of revenue) that specializes in protein therapies for hemophilia and other disorders.