6 Revenue from contracts with customers

6 Revenue from contracts with customers

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

 

 

 

€ million

2019

2018

Revenue from contracts with customers

4 895

4 603

Revenue from agreements whereby risks and rewards are shared

18

29

Total revenue

4 913

4 632

 

 

 

6.1 Disaggregation of revenue from contracts with customers

 

 

 

 

 

 

 

 

Actual

Timing of revenue recognition

 

2019

2018

2019

2018

€ million

At a point in time

Over time

At a point in time

Over time

Net sales U.S.

2 546

2 158

2 546

0

2 158

0

Cimzia®

1 088

896

1 088

0

896

0

Vimpat®

1 001

822

1 001

0

822

0

Keppra®

189

221

189

0

221

0

Briviact®

170

109

170

0

109

0

Neupro®

97

101

97

0

101

0

Established brands/Other products

1

9

1

0

9

0

Net sales Europe

1 332

1 325

1 332

0

1 325

0

Cimzia®

429

400

429

0

400

0

Keppra®

196

216

196

0

216

0

Vimpat®

236

206

236

0

206

0

Neupro®

170

174

170

0

174

0

Briviact®

45

29

45

0

29

0

Established brands/Other products

256

300

256

0

300

0

Net sales international markets

906

829

906

0

829

0

Keppra®

385

352

385

0

352

0

Cimzia®

194

150

194

0

150

0

Vimpat®

86

70

86

0

70

0

Neupro®

52

46

52

0

46

0

Briviact®

6

4

6

0

4

0

Established brands/Other products

183

207

183

0

207

0

Net sales before hedging

4 784

4 312

4 784

0

4 312

0

Designated hedges reclassified to net sales

−104

100

−104

0

100

0

Total net sales

4 680

4 412

4 680

0

4 412

0

Royalty income and fees

78

92

78

0

92

0

Contract manufacturing revenues

109

83

109

0

83

0

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

24

12

11

13

2

10

Revenue resulting from services & other deliveries

4

4

3

1

1

3

Total other revenue

137

99

123

14

86

13

Total revenue from contracts with customers

4 895

4 603

4 881

14

4 590

13

 

 

 

 

 

 

 

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 2019.

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

2019

2018

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

13

9

Revenue resulting from out-licensing agreements

13

9

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

107

196

Product sales

20

104

Revenue resulting from out-licensing agreements

87

92

 

 

 

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

 

 

 

 

€ million

Note

2019

2018

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

34

3

12

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

34

6

10

Unsatisfied performance obligations resulting from out-licensing agreements

 

9

22

 

 

 

 

Management expects that 62% of the transaction price allocated to the unsatisfied development agreements as of 31 December 2019 will be recognized as revenue during the next reporting period. The remaining 38% will be recognized in financial years 2021 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 (€ 3 million) as well as providing access to IP rights owned by the Group (€ 6 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.