Danes pin hopes on Novo and Orsted

At their height, Denmark's corporate champions seemed untouchable. Novo Nordisk A/S, long known mostly as an insulin maker, was Europe's most valuable company last year, after riding a surge of demand for Ozempic and Wegovy.

- SANNE WASS NAOMI KRESGE WILL MATHIS

That followed the success of Orsted A/S, the world’s largest offshore wind developer, which in 2021 was celebrating record valuations and racing to expand internationally as governments poured money into green energy.

Now, those triumphs look fragile. On Wednesday, Novo announced 9,000 job cuts — more than half in Denmark — after losing its lead in the US obesity market to rival Eli Lilly & Co. Orsted has been forced to scrap multibillion-dollar projects, take heavy write-downs and raise new cash amid soaring costs, supply-chain snags and Donald Trump's war on offshore wind. Both companies have suffered steep valuation losses, and the investor euphoria that once defined them has largely disappeared.

The turbulence at these two giants hasn't just rattled investors and executives. Novo's setbacks have sent tremors through Denmark's government ministries, pension funds and households. Consumer confidence is worsening, stoking concern that both domestic spending and the country’s flourishing investment culture may take a hit. Economists are warning of lower growth, and there are fears Denmark is facing a so-called “Nokia risk” — a reference to how Finland ended up in a downward spiral after the country’s overdependence on the company left it exposed when the iPhone came along.

The bad news from both companies “comes at a time when consumer confidence is already very low, and many Danes are deeply concerned about the economy,’ said Las Olsen, chief economist at Danske Bank A/S. “This very bleak sentiment could easily get worse,” he added, and weaken consumption.

No place in Denmark is more of a seismograph for Novo's fortunes than Kalundborg, the industrial town that hosts the drugmaker’s main production site. Locals not only fill Novo's factories, but also invest heavily in the company itself. Michael Rasmussen, who runs the nearby Meny supermarket, said the stock’s recent plunge has weighed on residents.