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LEO Foundation Annual Report 2020
Financial review – LEO Group
Management review
Financial review – LEO Group In 2020, the LEO Group delivered a net result of DKK -410 million and awarded DKK 72 million in independent research grants.
As expected, LEO Pharma’s result was negative in 2020 driven by the large investments in development of LEO Pharma’s near-term pipeline. Revenues came in lower than expected, due to COVID-19’s impact on the markets. Group profit before tax of DKK 50 million was positively impacted by solid financial results from the LEO Foundation’s investment activities. The LEO Foundation awarded a total of DKK 72 million in grants and awards in 2020, which is slightly less than in 2019 (DKK 79 million).
Operation activities Revenue at LEO Pharma declined by 6% from DKK 10,805 million in 2019 to DKK 10,133 million in 2020. The decline was primarily due to generic competition and COVID-19’s negative impacts on sales. LEO Pharma continuously invested significantly in R&D to bring new and innovative treatments to the markets. R&D costs was DKK 2,096 million (2019: DKK 2,444 million) equivalent to 21% of sales.
Total Group administration costs amounted to DKK 2,176 million, compared to DKK 1,735 million in 2019. The increase was among other things due to the restructuring plan announced by LEO Pharma in August 2020. The Foundation’s own net administration and operational costs amounted to DKK 16 million, on par with 2019. Operating result (EBIT) in LEO Pharma amounted to a loss of DKK 726 million, compared to a loss of DKK 1,313 million in 2019. The improved result was driven by a one-off income of DKK 1,181 million from a divestment of a portfolio of four non-core products to Cheplapharm, as well as cost reduction measures to contain the financial impact of COVID-19.
Investment activities The LEO Foundation’s return on financial investments ended at a solid DKK 968 million, and the investment strategy showed its strength in a year with highly volatile financial markets. It followed a strong financial investment return in 2019 of DKK 2,311 million.
Net results and grants Overall, 2020 net result for the Group was a loss of DKK 410 million, compared to a profit of DKK 389 million in 2019. The LEO Foundation awarded a total of DKK 72 million in grants and awards in 2020, slightly less than in 2019 (DKK 79 million). Outstanding grant liability decreased slightly to DKK 350 million at year-end, versus DKK 365 million in 2019.
Assets At the end of December 2020, total assets amounted to DKK 38,710 million, compared to DKK 39,195 million in 2019. This includes financial investments of DKK 15,861 million by year-end (2019: DKK 15,226 million). Intangible asset decreased to DKK 9,228 million as of December 31, 2020, against DKK 10,275 million in 2019. This reflects the combined effect of LEO Pharma’s divestment of four non-core products to Cheplapharm and completion of IT projects of DKK 650 million.
Financial statements
