6 Revenue from contracts with customers

The Group has recognized the following amounts relating to revenue in the consolidated income statement:

 

 

 

€ million

2018

2017

Revenue from contracts with customers

4 603

4 493

Revenue from agreements whereby risks and rewards are shared

29

37

Total revenue

4 632

4 530

 

 

 

6.1 Disaggregation of revenue from contracts with customers

 

 

 

 

 

 

 

 

Actual

Timing of revenue recognition

 

2018

2017

2018

2017

€ million

At a point in time

Over time

At a point in time

Over time

Net sales U.S.

2 158

2 069

2 158

0

2 069

0

Cimzia®

896

918

896

0

918

0

Vimpat®

822

746

822

0

746

0

Keppra®

221

232

221

0

232

0

Neupro®

101

96

101

0

96

0

Briviact®

109

63

109

0

63

0

Established brands

9

14

9

0

14

0

Net sales Europe

1 325

1 288

1 325

0

1 288

0

Cimzia®

400

370

400

0

370

0

Keppra®

216

235

216

0

235

0

Neupro®

174

168

174

0

168

0

Vimpat®

206

177

206

0

177

0

Briviact®

29

22

29

0

22

0

Established brands

300

316

300

0

316

0

Net sales international markets

829

798

829

0

798

0

Keppra®

352

311

352

0

311

0

Cimzia®

150

136

150

0

136

0

Vimpat®

70

53

70

0

53

0

Neupro®

46

50

46

0

50

0

Briviact®

4

1

4

0

1

0

Established brands

207

246

207

0

246

0

Net sales before hedging

4 312

4 154

4 312

0

4 154

0

Designated hedges reclassified to net sales

100

28

100

0

28

0

Total net sales

4 412

4 182

4 412

0

4 182

0

Royalty income and fees

92

108

92

0

108

0

Contract manufacturing revenues

83

91

83

0

91

0

Income from licensing deals (upfront payments, development milestones, sales milestones)

12

100

2

10

73

27

Revenue resulting from services & other deliveries

4

12

1

3

0

12

Total other revenue

99

203

86

13

164

39

Total revenue from contracts with customers

4 603

4 493

4 590

13

4 454

39

 

 

 

 

 

 

 

6.2 Contract assets and liabilities

The group has recognized the following revenue-related contract liabilities:

The Group does not have any revenue-related contract assets.

Revenue-related contract liabilities relate to unsatisfied performance obligations resulting from out-licensing agreements with Otsuka, Daiichi, GSK and Pfizer (see below). These liabilities have decreased because of the recognition of revenue during the year resulting from performance obligations that were satisfied in 2018.

The following table shows how much of the revenue recognized in the current reporting period was included in the contract liability balance at the beginning of the period and how much relates to performance obligations that were satisfied in previous periods.

 

 

 

€ million

2018

2017

Revenue recognized that was included in the contract liability balance at the beginning of the period

9

22

Revenue resulting from out-licensing agreements

9

22

Revenue recognized that relates to performance obligations that were satisfied in a prior year

196

181

Product sales

104

56

Revenue resulting from out-licensing agreements

92

125

 

 

 

The following table shows unsatisfied performance obligations resulting from out-licensing agreements:

 

 

 

 

€ million

Note

2018

2017

Aggregate amount of the transaction price allocated to development agreements that are partially or fully unsatisfied as at 31 December

34

12

18

Upfront payments received for out – licensing agreements to be taken in revenue as performance obligations are satisfied over time

34

10

12

Unsatisfied performance obligations resulting from out – licensing agreements

 

22

30

 

 

 

 

Management expects that 62% of the transaction price allocated to the unsatisfied development agreements as of 31 December 2018 will be recognized as revenue during the next reporting period. The remaining 38% will be recognized in financial years 2020 till 2026. The amount disclosed above does not include variable consideration which is constrained. The performance obligations still to be satisfied concern development activities to be performed over the next years (€ 12 million) as well as providing access to IP rights owned by the Group (€ 10 million).

All other development, manufacturing or other service agreements are for periods of one-year or less or are billed based on time incurred. As permitted under IFRS 15, the transaction price allocated to these unsatisfied agreements is not disclosed.

No assets are recognized from costs to fulfill a contract.