5. Segment information

Notes to the consolidated financial statements

The group has two reportable segments, R&D and fee-for-service business.

Segment information for the year 2019

(thousands of €)

R&D

Fee-for-services

Inter-segment elimination

Group

(1)

Unallocated expenses consist of expenses for warrant plans under IFRS 2 Share based payments.

External revenue

834,901

10,084

 

844,985

Internal revenue

 

6,742

(6,742)

Other income

50,905

 

50,905

Revenues & other income

885,806

16,826

(6,742)

895,890

 

 

 

 

 

Segment result

407,464

1,125

 

408,589

Unallocated expenses(1)

 

 

 

(38,297)

Operating profit

 

 

 

370,292

Financial (expenses)/income

 

 

 

(220,233)

Result before tax

 

 

 

150,060

Income taxes

 

 

 

(214)

Net profit

 

 

 

149,845

Segment information for the year 2018

(thousands of €)

R&D

Fee-for-services

Inter-segment elimination

Group

(1)

Unallocated expenses consist mainly of expenses for warrant plans under IFRS 2 Share based payments.

External revenue

278,666

10,170

 

288,836

Internal revenue

 

8,508

(8,508)

Other income

29,000

9

 

29,009

Revenues & other income

307,666

18,687

(8,508)

317,845

 

 

 

 

 

Segment result

(19,734)

1,751

 

(17,983)

Unallocated expenses(1)

 

 

 

(26,824)

Operating loss

 

 

 

(44,807)

Financial (expenses)/income

 

 

 

15,598

Result before tax

 

 

 

(29,209)

Income taxes

 

 

 

(50)

Net loss

 

 

 

(29,259)

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 2019 our operations were mainly located in Belgium, Croatia, France and the Netherlands and our top 3 customers represented 98.8% of the revenues. Our client base in 2019 and 2018 included nine of the largest pharmaceutical companies in the world.

Following table summarizes our revenues by destination of customer:

 

Year ended 31 December

(thousands of €)

2019

2018

North America

795,605

117,609

Europe

49,018

171,113

Asia Pacific

362

114

Total revenues

844,985

288,836

Following table summarizes our revenues by major customers:

 

Year ended 31 December

 

2019

2018

 

(thousands of €)

%

(thousands of €)

%

(1)

Following the contract amendment, the revenue recognized for filgotinib for the year ended 31 December 2019 included a negative catch-up effect of €245.9 million on closing date resulting from the decrease in the percentage of completion applied to previously received upfront and milestones for that program.

Gilead

 

 

 

 

North America(1)

793,873

94%

116,640

40%

Europe(1)

(4,570)

-1%

7,793

3%

AbbVie

 

 

 

 

Europe

26,356

3%

89,936

31%

Novartis

 

 

 

 

Europe

19,177

2%

55,218

19%

Servier

 

 

 

 

Europe

0%

9,000

3%

Total revenues from major customers

834,836

99%

278,587

96%

As of 31 December 2019, we held €203 million of non-current assets (€110 million in 2018) distributed as follows:

  • Belgium: €133 million (€64 million in 2018)
  • France: €54 million (€36 million in 2018)
  • The Netherlands: €8 million (€4 million in 2018)
  • Croatia: €7 million (€5 million in 2018)
  • Switzerland: €1 million (nil in 2018)

The increase in non-current assets was mainly explained by (i) an increase in property, plant & equipment explained by new acquisitions in 2019 but also by the recognition of right-of-use assets following the adoption of IFRS 16 Leases, (ii) an increase in intangible assets due to new acquisitions and capitalization of contract costs linked to the collaboration agreement with Gilead, and (iii) an increase in non-current R&D incentives receivables (see note 16).