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1. Business performance review

1.1 Key highlights

1.1 Key highlights

 

Actual1

Variance

€ million

2020

2019

Actual rates

CER2

Revenue

5 347

4 913

9%

8%

Net sales

5 052

4 680

8%

7%

Royalty income and fees

96

78

22%

25%

Other revenue

199

155

28%

29%

Gross Profit

3 984

3 645

9%

8%

Marketing and selling expenses

-1 221

-1 108

10%

12%

Research and development expenses

-1 569

-1 272

23%

24%

General and administrative expenses

- 196

- 195

1%

2%

Other operating income/expenses (-)

95

48

98%

100%

Adjusted (recurring) EBIT

1 093

1 118

-2%

-8%

Impairment, restructuring and other income/expenses (-)

- 122

- 50

>100%

>100%

EBIT (operating profit)

971

1 068

-9%

-14%

Net financial expenses

- 93

- 107

-13%

-12%

Share of profit/loss (-) of associates

2

- 1

>-100%

>-100%

Profit before income taxes

880

960

-8%

-14%

Income tax expenses

- 119

- 146

-19%

-16%

Profit from continuing operations

761

814

-7%

-14%

Profit/loss (-) from discontinued operations

0

2

-94%

-94%

Profit

761

817

-7%

-14%

Attributable to UCB shareholders

732

792

-7%

-15%

Attributable to non-controlling interests

29

25

16%

18%

Adjusted (Recurring) EBITDA

1 441

1 431

1%

-4%

Capital expenditure (including intangible assets)

349

294

19%

 

Net financial cash / debt (-)

-1 411

12

>100%

 

Operating cash flow from continuing operations

1 081

893

21%

 

Weighted average number of shares – non diluted (million)

189.00

187.00

1%

 

EPS (€ per weighted average number of shares – non diluted)

3.87

4.23

-8%

16%

Core EPS (€ per weighted average number of shares – non diluted)

5.36

5.20

3%

-2%

  • 1 Due to rounding, some financial data may not add up in the tables included in this management report.
  • 2 CER: constant exchange rates and excluding hedging.
  • Revenue in 2020 reached € 5 347 million up by 9% (+8% at constant exchange rates (CER)). Net sales went up to € 5 052 million by 8% (+7% CER). Net sales before “designated hedging reclassified to net sales” were up by 5% (+7% CER). This growth was driven by the enduring growth of UCB’s core products. Royalty income and fees were € 96 million, other revenue € 199 million.

  • Adjusted (recurring) EBITDA was driven by higher marketing and selling – due to launches and pre-launch activities – higher research and development expenses – due to additions to the pipeline and the pipeline progress – compensated by positive other operating earnings due to partnering, reaching € 1 441 million (+1%; -4% CER).

  • Profit decreased to € 761 million from € 817 million (-7%, -14% CER), of which € 732 million is attributable to UCB shareholders and € 29 million to non-controlling interests.

  • Core earnings per share reached € 5.36 after € 5.20 in 2019 based on an average of 189 million shares outstanding.

This Business Performance Review is based on the consolidated financial statements for the UCB Group of companies prepared in accordance with IFRS. The separate statutory financial statements of UCB SA prepared in accordance with Belgian Generally Accepted Accounting Principles, together with the report of the Board of Directors to the General Assembly of Shareholders, as well as the auditors’ report, will be filed at the National Bank of Belgium within the statutory periods, and be available on request or on our website.

Scope change: As a result of the divestment of the activities Films (September 2004), Surface Specialties (February 2005), and the divestiture of Kremers Urban Pharmaceuticals Inc. (November 2015), UCB reports the results from those activities as a part of profit from discontinued operations.

Restructuring, impairment and other income/expenses (-): Transactions and decisions of a one-time nature that affect UCB’s results are shown separately (“restructuring, impairment and other income/expenses” items).

Besides EBIT (earnings before interest and taxes or operating profit), a line for “adjusted (recurring) EBIT” (underlying operating profit), reflecting the ongoing profitability of the company’s biopharmaceutical activities, is included. The adjusted (recurring) EBIT is equal to the line “operating profit before impairment, restructuring and other income and expenses” reported in the consolidated financial statements. In compliance with the ESMA Alternative Performance Measures guidelines, “recurring EBITDA” was renamed into “adjusted EBITDA”. The calculation methodology remains unchanged.

Core EPS is the core profit, or the profit attributable to the UCB shareholders, adjusted for the after-tax impact of restructuring, impairment, other income/expense items, the financial one-offs, the after-tax contribution from discontinued operations and the after-tax amortization of intangibles linked to sales, per non-dilutive weighted average number of shares.