4. Segment information

4. Segment information

In 2015, the IFRS 8 threshold of 10% of the combined revenues, external and inter-segment, of all segments was met by the external and internal revenues reported by our fee-for-service business located in Croatia. Consequently, there were two reportable segments in 2015 and 2016, R&D and fee-for-service business.

Segment information for the year 2016

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(thousands of €)

R&D

Fee-for-services

Inter-segment elimination

Group

(1)

The unallocated expenses of €10,841 thousand are composed of (a) €11,034 thousand of warrant costs, (b) €193 thousand of reduced cost from the IAS19R reclassification of actuarial losses on long term defined post-employment benefit obligations, from profit or loss accounts to other comprehensive income. The above listed items are not presented to management in our management reporting as segment results, and are, therefore, presented on the line “unallocated expenses” in our segment reporting.

(2)

Cash and taxes are handled at group level and are therefore presented under unallocated (expenses) / income

External revenue

121,616

7,903

 

129,519

Internal revenue

–

4,379

(4,379)

 

Other income

21,922

171

 

22,093

Revenues & other income

143,538

12,453

(4,379)

151,612

 

 

 

 

 

Segment result

1,138

(1,787)

 

(649)

Unallocated expenses (1)

 

 

 

(10,841)

Operating loss

 

 

 

(11,491)

Financial (expenses)/income (2)

 

 

 

65,737

Result before tax

 

 

 

54,246

Income taxes (2)

 

 

 

(235)

Net income

 

 

 

54,012

Segment information for the year 2015

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(thousands of €)

R&D

Fee-for-services

Inter-segment elimination

Group

(1)

The unallocated expenses of €4,731 thousand are composed of (a) €5,036 thousand of warrant costs, (b) €507 thousand of decrease in depreciation cost triggered by an IFRS adjustment on the depreciation charges reported by Fidelta (Croatia) reflecting the expected useful lifetime following the purchase accounting of the acquisition of the Zagreb Research operations of GSK in 2010, (c) €202 thousand of cost from the IAS19R reclassification of actuarial gains on long term defined post- employment benefit obligations, from profit or loss accounts to other comprehensive income. The above listed items are not presented to management in our management reporting as segment results, and are, therefore, presented on the line “unallocated expenses” in our segment reporting.

(2)

Cash and taxes are handled at group level and are therefore presented under unallocated (expenses) / income

External revenue

34,129

5,434

 

39,563

Internal revenue

–

5,459

(5,459)

–

Other income

20,778

238

 

21,017

Revenues & other income

54,907

11,131

(5,459)

60,580

 

 

 

 

 

Segment result

(82,024)

(2,690)

 

(84,713)

Unallocated expenses (1)

 

 

 

(4,731)

Operating loss

 

 

 

(89,444)

Financial (expenses)/income (2)

 

 

 

(30,184)

Result before tax

 

 

 

(119,627)

Income taxes (2)

 

 

 

1,218

Net income

 

 

 

(118,410)

Segment assets and liabilities are not information being provided to management on a recurring basis. This information is therefore not disclosed in our segment information.

Geographical information

In 2016 our operations were located in Belgium, Croatia, France and the Netherlands.

In 2016 our top 10 customers represented 98% of the revenues. Our client base in 2016 and 2015 included eight of the top 20 pharmaceutical companies in the world.

Following table summarizes our revenues by destination of customer:

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Year ended 31 December

(thousands of €)

2016

2015

United States

88,628

17,077

Europe

40,884

22,446

Asia Pacific

6

40

Total revenues

129,519

39,563

Following table summarizes our revenues by major customers:

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Year ended 31 December

 

2016

2015

 

(thousands of €)

%

(thousands of €)

%

Gilead

87,813

68%

 

 

United States

87,813

68%

 

 

AbbVie

32,596

25%

29,870

75%

Europe

32,596

25%

13,640

34%

United States

 

0%

16,229

41%

Total revenues

120,409

93%

29,870

75%

Following table summarizes our revenues by destination of our entity:

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Year ended 31 December

(thousands of €)

2016

2015

Galapagos NV (Belgium)

121,703

34,082

Galapagos SASU (France)

84

25

Fidelta d.o.o. (Croatia)

7,732

5,440

Xenometrix, Inc. (United States)

 

16

Total revenues

129,519

39,563

In 2016, we held €76 million of non-current assets (€68 million in 2015) distributed as follows:

  • Belgium: €37 million (€30 million in 2015)
  • France: €31 million (€29 million in 2015)
  • Croatia: €4 million (€5 million in 2015)
  • The Netherlands: €4 million (€4 million in 2015)

The increase in non-current assets was mainly explained by the increase in non-current R&D incentives receivables (see note 15).