ANNUAL REPORT 2021
LUNDBECK
ANNUAL REPORT 2021
= CONTENTS
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For definition of the measure "Core EBIT" and "Core EBIT margin", see page 110
Core reconciliation
EXPENSES AND PROFITS
In 2021, total costs declined by 9% to DKK 14,289 million
compared to DKK 15,623 million last year. Adjusted for non-
core costs, total costs declined by 3% to DKK 12,782 million
mainly as a result of pandemic-related cost avoidance.
Cost of sales declined by 12% to DKK 3,648 million in 2021 and
the gross margin was 77.6% compared to 76.4% in 2020. Cost
of sales was negatively impacted by the inclusion of VyeptiⓇ
amortizations, but reduced royalty costs mitigated some of the
effect. Sales and distribution costs were DKK 5,885 million, a
decline of 1% compared to 2020 mainly because of COVID-19-
related cost avoidance. Sales and distribution costs
corresponded to 36.1% of revenue, compared to 33.6% last
year. Administrative expenses declined 3% to DKK 933 million,
corresponding to 5.7% of total revenue. Selling, general &
administrative expenses (SG&A) for 2021 reached DKK 6,818
million compared to DKK 6,912 million in 2020. The SG&A ratio
for the period was 41.8%, compared to 39.1% last year.
R&D costs were 3,823 million for 2021 with a R&D ratio of
23.5%. Compared to 2020, the R&D costs declined 16%, while
adjusted for the impairment of foliglurax of DKK 792 million in
2020, the R&D costs increased by 2%.
Total operational costs (OPEX) reached DKK 10,641 million
compared to DKK 11,457 million in 2020. Adjusted for the
impairment of foliglurax product rights last year, OPEX
consequently did not change.
In 2021, Core EBIT* declined by 21% to DKK 3,517 million and
the Core EBIT margin was 21.6%. Reported EBIT reached DKK
2,010 million compared to DKK 1,990 million in 2020 which was
impacted by the impairment of the foliglurax product rights in
2020. The reported EBIT margin increased from 11.3% to
12.3%.
TAX
The effective tax rate for 2021 was 16.6% compared to 17.0% in
2020**. The tax rate is positively impacted by increased R&D
deductions in Denmark, foreign-derived intangible income (FDII)
benefits and recognition of tax credits in the U.S.
PROFIT AND EPS
Profit for 2021 reached DKK 1,318 million compared to DKK
1,581 million in 2020. The reported net profit corresponded to
an EPS of DKK 6.63 versus an EPS of DKK 7.96 last year. Core
EPS was DKK 12.57 for 2021, compared to a Core EPS of DKK
18.92 in 2020.
CASH FLOWS
Cash flows from operating activities amounted to DKK 2,272
million in 2021 compared to DKK 3,837 million in 2020. The
development compared to last year primarily relates to reduced
EBITDA due to NortheraⓇ loss of exclusivity, the Lonza liability
settlement, negative impact from working capital due to
inventory build-up and a higher cash tax payment related to
intercompany transfer of product rights in 2020.
Lundbeck's net cash flows from investing activities were an
outflow of DKK 610 million in 2021 compared to an outflow of
DKK 467 million in 2020.
In 2021, the net cash outflow reached DKK 1,674 million
compared to an inflow of DKK 976 million in 2020. The net cash
flow is impacted by repayment of bank loans net of DKK 2,279
million.
Net debt has decreased from DKK 4,106 million at year-end
2020 to DKK 3,189 million at the end of 2021. Interest bearing
debt was DKK 5,468 million at the end of 2021.
**
Please find Lundbeck's tax policy on
https://www.lundbeck.com/content/dam/lundbeck-com/masters/global-
site/pdf/Lundbeck_Tax_Policy_2022.pdfView entire presentation