Galapagos NV — Annual Report 2012

Mar 8, 2013

Consolidated financial statements

CONSOLIDATED INCOME STATEMENT AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARS ENDED 31 DECEMBER

Consolidated income statement

	Continuing	Continuing	Discontinued	Discontinued
	operations	operations	operations	operations	Group total	Group total
Thousands of €	Dec 2012	Dec 2011	Dec 2012	Dec 2011	Dec 2012	Dec 2011
Services revenue	65,660	57,147		2,418	65,660	59,565
R&D revenue	70,608	36,322			70,608	36,322
Other income	16,716	19,403			16,716	19,403
Total operating income	152,984	112,872		2,418	152,984	115,290
Services cost of sales	-48,179	-39,091		-1,832	-48,179	-40,923
R&D Expenditure	-80,259	-84,460			-80,259	-84,460
General and administrative costs	-24,511	-22,121		-602	-24,511	-22,723
Sales and marketing expenses	-2,134	-2,273			-2,134	-2,273
Restructuring and integration
costs	-2,506				-2,506
Result on divestment	-2,006	5,197		-3,043	-2,006	2,154
Operating profit/loss (-)	-6,610	-29,877		-3,058	-6,610	-32,935
Finance income	3,820	831		28	3,820	859
Finance cost	-2,362	-1,647		-4	-2,362	-1,651
Profit/loss (-) before tax	-5,152	-30,693		-3,034	-5,152	-33,727
Taxes	-569	630			-569	630
NET PROFIT/LOSS (-)	-5,721	-30,063		-3,034	-5,721	-33,097
NET PROFIT/LOSS (-)
attributable to:
Owners of the parent	-5,721	-30,063		-3,034	-5,721	-33,097

Consolidated statement of comprehensive income

Exchange difference arising on
translating of foreign operations	959	1,333	-956	959	377
Other comprehensive income	959	1,333	-956	959	377
Total comprehensive income
attributable to:
Owners of the parent	-4,761	-28,730	-3,990	-4,761	-32,720

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AT 31 DECEMBER

Assets

Thousands of €	2012	2011
NON-CURRENT ASSETS	102,602	95,493
Goodwill	37,667	38,880
Intangible assets	9,424	10,614
Property, plant and equipment	18,099	19,524
Deferred tax assets	1,705	2,166
Non-Current tax receivables	35,288	23,081
Available for sale financial assets and other non-current assets	419	1,228
CURRENT ASSETS	132,727	65,561
Inventories	204	502
Trade and other receivables	32,494	30,010
Current tax receivables	188
Cash and cash equivalents	94,647	32,555
Other current assets	5,194	2,495
TOTAL ASSETS	235,329	161,055

Equity and liabilities

Thousands of €	2012	2011
TOTAL EQUITY	118,447	118,376
Share capital	139,347	137,460
Share premium account	72,876	72,021
Translation differences	994	35
Accumulated losses	-94,770	-91,140
TOTAL LIABILITIES	116,882	42,679
NON-CURRENT LIABILITIES	7,868	7,319
Pension liabilities	2,035	1,426
Provisions	676	786
Deferred tax liabilities	2,624	2,403
Finance lease liabilities	165	451
Other non-current liabilities	2,367	2,253
CURRENT LIABILITIES	109,014	35,360
Provisions	176	393
Finance lease liabilities	240	425
Trade and other payables	22,093	18,068
Current tax payable	3	616
Other current liabilities	86,501	15,857
TOTAL LIABILITIES AND EQUITY	235,329	161,055

Thousands of €	2012	2011
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	32,555	40,397
Result from operations	-6,610	-32,935
Adjustments for:
Depreciation of property, plant and equipment	6,884	7,727
Amortization of intangible fixed assets	2,125	4,369
Inventories write off	3
Exchange gain/loss (-) on translation of net assets of subsidiary	-659	244
Share based compensation	2,086	2,040
Gain (-) / Loss (+) on disposal of business	3,004	-2,154
Increase/Decrease (-) provisions	-359	296
Increase/Decrease (-) pension liabilities (assets)	609	297
Profit on disposal of fixed assets	-17
Operating cash flows before movements in working capital	7,066	-20,116
Increase (-)/Decrease in inventories	291	942
Increase (-)/Decrease in receivables	-16,876	11,032
Increase/Decrease (-) in payables	74,249	-3,265
Cash generated/used (-) in operations	64,729	-11,407
Interest paid and other financial costs	-471	-603
Taxes	-153	19
NET CASH FLOWS GENERATED/USED (-) IN OPERATING ACTIVITIES	64,104	-11,991

CONSOLIDATED CASH FLOW STATEMENTS FOR THE YEARS ENDED 31 DECEMBER

Thousands of €	2012	2011
Purchase of property, plant and equipment	-5,896	-4,396
Purchase of and expenditure in intangible fixed assets	-940	-1,437
Proceeds from disposal of intangible assets	20
Proceeds from disposal of property, plant and equipment	379	44
Acquisitions (-), disposals (+) of subsidiaries, associates or joint ventures, net of cash acquired		8,710
NET CASH USED IN INVESTING ACTIVITIES	-6,437	2,921
Repayment of obligations under finance leases and other debts	-477	-343
Proceeds of Capital and Share premium increases, net of issue costs	2,742	553
Interest received and other financial income	1,769	423
NET CASH GENERATED/USED (-) IN FINANCING ACTIVITIES	4,034	633
EFFECT OF EXCHANGE RATE DIFFERENCES ON CASH AND CASH EQUIVALENTS	391	594
INCREASE/DECREASE (-) IN CASH AND CASH EQUIVALENTS	62,092	-7,842
CASH AND CASH EQUIVALENTS AT END OF YEAR	94,647	32,555

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		Share premium	Translation dif	Accumulated
Thousands of €	Share capital	account	ferences	losses	Total
Balance at 1 January 2011	137,122	71,806	-343	-60,079	148,506
Net result				-33,097	-33,097
Other comprehensive income			378		378
Total comprehensive income			378	-33,097	-32,719
Share based compensation				2,040	2,040
Exercise warrants	338	215			553
Other				-4	-4
Balance at 31 December 2011	137,460	72,021	35	-91,140	118,376
Net result				-5,721	-5,721
Other comprehensive income			959		959
Total comprehensive income			959	-5,721	-4,762
Share based compensation				2,086	2,086
Exercise warrants	1,887	855			2,742
Other				5	5
Balance at 31 December 2012	139,347	72,876	994	-94,770	118,447

SEGMENT REPORTING

2012 SEGMENT INFORMATION

		Continuing operations		Discontinued operations	Unallocated costs	Galapagos Group total
		R&D	Services	Intersegment
	Thousands of €			eliminations
	R&D revenue	65,959					65,959
	Service revenue	4,676	65,766				70,442
	Other Income	10,639					10,639
	Grant Income	2,216					2,216
MANAGEMENT REPORTING	External revenue	83,490	65,766				149,256
	Internal revenue	4,145	3,201	-7,347
	Total revenue	87,635	68,967	-7,347			149,256
	Cost of sales	-5,638	-46,378	2,765			-49,250
	Gross Margin	81,997	22,590	-4,582			100,006
	Opex	-85,528	-14,373	4,582		-6,333	-101,653
	MR EBIT	-3,531	8,217			-6,333	-1,647
	MR EBITDA	896	11,652			-6,333	6,215
	R&D Tax Credits	4,294					4,294
	Discounting of CIR receivables	-300					-300
	Reversal of Novartis revenue recognition	-197					-197
	Transfer Pricing Effect	472	-472
	Warrants	-1,372	-714				-2,086
IFRS - RECURRING	IFRS Amortisation	415	-1,694				-1,279
	Other effects	-327	-557				-884
	IFRS EBIT - RECURRING	-546	4,779			-6,333	-2,099
	Loss on liquidation of Cambridge Drug Discovery Holdings Ltd		-3,004				-3,004
	Basel closing costs		-1,136				-1,136
	Restructuring costs	-1,369					-1,369
IFRS - NON RECURRING	Earn Out Income from Evotec		981				981
	Other Effect on IFRS Non Recurring Result		17				17
	IFRS EBIT	-1,914	1,638			-6,333	-6,610

2011 SEGMENT INFORMATION

			Continuing operations		Discontinued	Unallocated	Galapagos
					operations	costs	Group total
		R&D	Services	Intersegment
	Thousands of €			eliminations
	R&D revenue	36,306					36,306
	Service revenue		59,575				59,575
	Other Income	10,510	12				10,522
	Grant Income	2,501	33				2,534
	External revenue	49,317	59,619				108,936
	Internal revenue	5,133	10,662	-15,795
MANAGEMENT REPORTING	Total revenue	54,451	70,281	-15,795			108,936
	Cost of sales		-46,651	5,905			-40,747
	Gross Margin	54,451	23,630	-9,891			68,189
	Opex	-94,962	-14,581	9,891		-4,826	-104,479
	MR EBIT	-40,512	9,048			-4,826	-36,289
	MR EBITDA	-35,413	13,668		156	-4,826	-26,415
	R&D Tax Credits	6,052					6,052
	Reversal of Novartis revenue recognition	-197					-197
	Employee Profit Sharing Reserve	-107					-107
	Transfer Pricing Effect	397	-397
	Warrants	-1,339	-693		-8		-2,040
IFRS - RECURRING	IFRS Amortisation	218	-2,434		-2		-2,219
	Other effects	-222	-67				-289
	IFRS EBIT - RECURRING	-35,710	5,456		-10	-4,826	-35,089
	Result on divestment of Compound Focus		5,197		-3,043		2,154
	IFRS EBIT	-35,710	10,653		-3,053	-4,826	-32,935
IFRS - NON RECURRING