Annual Report 2025
LEO Pharma A/S | Company reg. no. 56759514
Like a thousand
paper cuts
Patient testimonial
Chronic hand eczema (CHE)
Actor portrayal
Highlights
Letter from the Chair and the CEO 4
LEO Pharma at a glance 6
Performance highlights 7
Business model 8
Our treatments 9
2025 highlights 10
Key figures 11
LEO Pharma stories – CHE 12
Our business
LEO Pharma’s strategy 14
Growth 15
Pipeline 18
Profitability 21
Unite as one team 22
Leave a legacy 24
LEO Pharma stories – GPP 26
Financial review & outlook
Financial review & outlook 28
Corporate matters
Corporate governance 33
Board of Directors 35
Global Leadership Team 39
Risk management 42
Sustainability statement
General information 47
Environmental information 55
Social information 71
Governance information 83
Appendix 88
Consolidated financial statements
Income statement 91
Statement of comprehensive income 91
Balance sheet 92
Statement of changes in equity 93
Cash flow statement 94
Notes 95
Statements and reports
Statement of the Board of Directors and
Executive Management 130
Independent Auditor's report 131
Independent auditor's limited assurance
report on selected disclosures in the
sustainability statement 133
Parent Company financial statements
Income statement 136
Balance sheet 137
Statement of changes in equity 138
Notes 139
Glossary 148
Financial statementsManagement’s review
About this report: The sustainability statement on pages 46-89 represents LEO Pharma’s compliance
with the statutory disclosure pursuant to section 99a(2018) of the Danish Financial Statements Act.
Contents
Management's review 3LEO Pharma Annual Report 2025 → Highlights
Our business
Financial review & outlook
Corporate matters
Sustainability statement
Letter from the Chair and the CEO
Powering progress
through strong brands,
strategic partnerships
and bold actions
2025 marked a pivotal chapter
in LEO Pharma's growth journey.
We delivered on our strategy,
strengthened our financial profile
and prepared the company for the
next phase of growth. We did so by
pursuing three priorities: growing
our portfolio, partnering to raise
the standard of care and further
strengthening our profitability.
Bringing this momentum into 2026,
we will continue to drive commercial
execution across our full portfolio
while building the next wave of
innovative therapies.
Building on strong foundations
Our established brands remain a powerful value
driver and a cornerstone of the treatment paradigm
for many skin diseases, including psoriasis and
atopic dermatitis (AD). Trusted by patients, health-
care providers and regulators across more than 70
markets, with a strong track record of supply reliability
and unique topical formulations that are difficult to
replicate, the portfolio continues to grow, even after
many brands have lost their exclusivity.
As the well-diversified backbone of our dermatology
platform, our established brands continued to grow
in 2025, further strengthening our business foun-
dation. This solid base now enables us to accelerate
growth across our dermatology portfolio with the
launch of new first-in-class innovations.
Innovation accelerating growth
In 2025, LEO Pharma expanded its portfolio of
first-in-class strategic brands from one to three
global products, marking a new pivotal chapter in
our growth journey.
Adtralza®/Adbry®, a first-in-class IL-13 biologic for
AD, which launched in 2021, has already become
our largest product. In 2025, Adtralza®/Adbry®
continued strong growth through focused commer-
cial execution and new clinical evidence from the
successful ADHAND Phase 3b trial.
Anzupgo®, the first and only FDA-approved treat-
ment specifically for chronic hand eczema (CHE),
accelerated its global rollout in 2025 and is now
available in 12 markets. It launched in the U.S. in
September to a strong initial reception. Beyond its
2025 was a year of strong growth for LEO Pharma,
with Group revenue rising to DKK 13,499 million
(EUR 1,809 million), up 10% at constant exchange
rates (CER), including 12% CER growth in Derma-
tology driven by 48% revenue CER growth for our
first-in-class strategic brands. Adjusted EBITDA
more than doubled to DKK 2,107 million (EUR 282
million), yielding a 16% margin. The 2025 results
mark the third consecutive year of double-digit
revenue CER growth for the Group, driven by inno-
vation and supporting significantly improved profit-
ability. This performance reflects strategic execu-
tion focused on delivering impact for patients and
leveraging our scalable global operating model.
Making a fundamental difference for patients
At LEO Pharma, we are focused on providing trans-
formative treatments for one of the most significant
healthcare challenges of our time: skin diseases.
These affect over a third of the global population
and cause disability, pain, itching, and significant
social and economic loss.
We stand out as a truly global platform dedicated
to the medical dermatology market, well-
positioned in a rapidly expanding market worth
over USD 40 billion. With the broadest global port-
folio in medical dermatology, a proven innovation
model and decades of deep expertise, we are
proud of our unique position in the industry.
Our worldwide reach and the breadth of our brand
portfolio enable us to deliver value to patients,
partners and shareholders alike.
Left to right:
Christophe Bourdon, CEO,
and Jesper Brandgaard, Chair
of the Board of Directors.
Highlights
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Our business
Financial review & outlook
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Sustainability statement
In 2025, employee engagement reached its
highest level in five years, reflecting great
commitment and pride in our shared purpose.
immediate performance, Anzupgo® is set to be a
key growth driver from 2026.
Spevigo®, an IL-36RA for generalized pustular pso-
riasis (GPP), joined our portfolio on September 30,
2025 following our global development and com-
mercialization license agreement with Boehringer
Ingelheim. Its integration into our global dermatol-
ogy platform has added a rare-disease pillar to our
portfolio, expanding our ability to deliver high-
impact care to underserved patients.
Together, these first-in-class innovations build
on our established brands’ strong foundation
and deepen LEO Pharma’s leadership in medical
dermatology, providing multiple complementary
engines of growth, with one common objective: to
address significant unmet needs for people
affected by skin disease.
Unlocking new innovation through partnerships
While considerable progress has been made in
recent years in treating skin diseases such as pso-
riasis and AD, hundreds of skin diseases still have
high unmet needs and lack approved treatments.
For many patients, care often remains limited to
symptom management.
Scientific advances in the broader field of inflam-
mation and immunology are opening up new op-
portunities to leverage LEO Pharma's decades of
expertise in skin biology and clinical development.
In 2025, our pipeline momentum accelerated
with the late-stage development of Anzupgo® and
Spevigo® for new potential indications such as
palmoplantar pustulosis (PPP), lichen schlerosis
(LS) and pyoderma gangrenosum (PG) - specifically
indications where there are currently no FDA-ap-
proved therapies. Furthermore, we advanced our
preclinical small-molecule STAT6 program through
a strategic partnership with Gilead Sciences. The
program holds potential across multiple inflam-
matory diseases, and the partnership potentially
broadens the program outside of dermatology.
Beyond dermatology, we strengthened our Critical
Care portfolio through a partnership with Junshi
Biosciences to commercialize Loqtorzi® in Europe.
This injectable PD-1 inhibitor immunotherapy is a
strong fit for Critical Care, leveraging our commer-
cial platform and established presence in Europe-
an hospitals through our existing treatments for
cancer-associated thrombosis.
From early research to commercial assets, we
strengthened our capacity to deliver innovation
for patients with several significant partnerships
in 2025, including those with Gilead Sciences,
Boehringer Ingelheim and Junshi Biosciences.
Prepared and energized for the
next chapter of growth
In 2025, we further strengthened our financial
foundation with sustainable profitable growth and
efficiency initiatives. These gains have allowed us to
improve our profitability even as we reinvest boldly,
expanding our U.S. sales force by more than 50%
to extend the reach of our innovations and deepen
our market presence. Furthermore, with over DKK
5 billion available for value-accretive M&A, we are
proactively seeking strategic acquisitions and li-
censing opportunities to fuel future growth.
Building on our capabilities, we advanced our use of
artificial intelligence (AI) and digital technologies to
drive innovation. We launched the Innoviewer plat-
form as our innovation model's digital backbone,
integrating external data with years of digitized
in-house knowledge to power machine-assisted
asset scouting and evaluation. Combining unique
data, human expertise and automated monitoring,
Innoviewer helps uncover and create value when
sourcing new pipeline assets.
In 2025, employee engagement reached its
highest level in five years, reflecting great com-
mitment and pride in our shared purpose. Further-
more, the launch of our new leadership framework,
"How we lead LEO", equipped over 600 leaders
worldwide with shared behaviors that strengthen
collaboration, reinforce accountability and drive
our strategy forward. Together, these advances in
people, processes and performance enhance our
ability to deliver results and ensure that our culture
is a powerful competitive advantage.
As we enter 2026, we are ready to accelerate –
building on our strong brand portfolio, proven inno-
vation model and unique global platform to deliver
the next wave of growth and raise the standard of
care for patients worldwide.
We extend our sincere thanks to our shareholders
for their trust, to our partners for enabling break-
through impact, and to our colleagues for their
dedication. Most of all, we thank the patients and
caregivers who take part in our clinical trials; their
involvement is vital in turning scientific progress
into real-world benefit.
1 to 3
LEO Pharma expanded its port-
folio from one to three global
strategic brands.
Jesper Brandgaard
Chair of the
Board of Directors
Christophe Bourdon
CEO
Management's review 5LEO Pharma Annual Report 2025 → Highlights
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Sustainability statement
LEO Pharma is a global leader in medical
dermatology. We deliver innovative treatments
for skin diseases, building on a century of
experience with breakthrough medicines in
healthcare.
LEO Pharma at a glance
21%
Share of revenue,
North America, 35%
revenue growth
in 2025 (CER)
52%
Share of revenue,
Europe, 3%
revenue growth
in 2025 (CER)
27%
Share of revenue,
Rest of World, 9%
revenue growth
in 2025 (CER)
117+
LEO Pharma has been advancing
care and improving lives through
science and innovation for over a
century.
+4,000
Dedicated employees
in 30 countries
70+
Markets (31 affiliate &
42 partner markets)
+100m
Patients in treatment with
LEO Pharma products annually
● Headquarters
●
Manufacturing facility
Management's review 6LEO Pharma Annual Report 2025 → Highlights
Our business
Financial review & outlook
Corporate matters
Sustainability statement
→ Highlights
Our business
Financial review & outlook
Corporate matters
Sustainability statement
Performance highlights
Financial Sustainability
Total CO
2
e tonnes
(Scope 1 and 2, market-
based)
21,751
Adjusted EBITDA margin
DKK million/%
16%
Engagement rate
(LEO Voice survey)
85%
•
February
•
November
Free cash flow
DKK million
1,875
Gender diversity,
all managers
(men/women)
53/47%
•
Women
•
Men
Group revenue growth (CER)
DKK million/%
10%
•
Critical Care and other
•
Dermatology
•
Cash flow from M&A
•
Free cash flow (excl. M&A)
•
Adj. EBITDA
–
Adj. EBITDA margin
2023 2024 2025
2,508
2,353
2,445
9,039
10,008
10,991
11,392
12,453
13,499
2023 2024 2025
935
940
(2,490)
(52)
1,875
2023 2024 2025
23,555
22,316
21,751
2023 2024 2025
48%
52%
46%
54% 53%
47%
2023 2024 2025
78
72
76
81
85
2023 2024 2025
626
895
5%
7%
16%
2,107
Management's review 7LEO Pharma Annual Report 2025 → Highlights
Our business
Financial review & outlook
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Sustainability statement
Business model
Global innovation and
commercialization platform
driving value through
strategic partnerships
and acquisitions
The resources we rely on
More than 4,000 employees worldwide with
diverse skills and expertise.
Cutting-edge know-how in skin biology.
Natural resources, including raw materials, energy
and water to support our operations.
Strong financial resources supported by disciplined
capital allocation, enabling sustainable growth and
margin expansion.
Partnerships to advance disease understanding
and fuel innovation, working with global leaders
such as Gilead Sciences and Boehringer Ingelheim.
The value we create
Serving more than 100 million patients annually.
Providing access to more than 20 brands in more
than 70 markets.
Presented 75 congress contributions – posters,
oral sessions and late-breaking presentations –
and published 43 peer-reviewed papers in 2025.
More than 92,000 units of medicine donated to
communities in need in 2025.
Our
operations
Research and development
Advancing innovation through strategic research
and asset partnerships, leveraging decades
of dermatology expertise to deliver distinctive
clinical programs and new treatments for diseas-
es with high unmet need – including five Phase 3
studies involving over 1,490 patients in 2025.
Production
Delivering high-quality products
through six production sites, a
dedicated Product Supply team of
around 1,600 FTEs and partner-
ships with more than 15 production
and alliance partners.
Approvals and access
Managing global product registra-
tions and regulatory compliance to
secure timely approvals and opti-
mize market access.
Commercialization
Operating in over 70 markets with
a team of more than 1,000 FTEs,
including 30+ affiliate markets and
40+ partner markets.
Management's review 8LEO Pharma Annual Report 2025 → Highlights
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Sustainability statement
Advancing care through a
leading global platform
Therapeutic areas Our treatments
Dermatology
As leaders in medical dermatology, we are raising the standard of care
for skin diseases such as atopic dermatitis (AD), chronic hand eczema
(CHE) and psoriasis, as well as for generalized pustular psoriasis
(GPP), a severe and rare skin disease. We also offer a broad portfolio
of treatments for skin infections, acne, rosacea and other skin diseas-
es.
Critical Care
Our commitment to advancing patient health extends beyond der-
matology into critical care, where we deliver treatments for blood
clot-related conditions such as cancer-associated thrombosis and
rare cancers such as nasopharyngeal carcinoma (NPC). Across these
areas, we strive to make a difference for patients in hospital and spe-
cialty care.
Our strategic brands
LEO Pharma holds three strategic brands with innovative mechanisms,
unlocking treatment options for diseases with high unmet need.
Adtralza®/Adbry®
Adtralza®/Adbry® is an IL-13 biologic for moderate-to-severe AD. AD
affects 2-3% of the global population. As LEO Pharma’s first global
biologic, developed and available in 20 markets since acquiring world-
wide rights from AstraZeneca in 2016, it combines long-term safety
and efficacy data, including in hard-to-treat areas such as the head
and neck and on the hands.
Anzupgo®
Anzupgo® is a topical pan-JAK inhibitor for moderate-to-severe CHE
in adults. CHE affects 5-10% of the population, significantly impacting
daily life. As the first FDA-approved treatment specifically for CHE, it
combines a broad JAK-inhibition for complex disease with a unique
cream formulation developed by LEO Pharma. In 2014, LEO Pharma
licensed exclusive worldwide rights from Shionogi & Co., Ltd. to
develop and market delgocitinib for topical use in dermatology, except
in Japan, where the partner retains rights.
Spevigo®
Spevigo® is an IL-36RA biologic for GPP – a rare, severe, and poten-
tially life-threatening form of psoriasis affecting around 1 in 10,000
people. Added to LEO Pharma’s portfolio in September 2025 through a
partnership with Boehringer Ingelheim granting global rights, Spevigo
®
is approved for the treatment and prevention of GPP.
Our established portfolio
LEO Pharma’s established portfolio comprises over 20 standard-of-
care treatments and is the foundation of our global presence in derma-
tology. With the broadest global portfolio in medical dermatology and
proven growth, lifecycle management and reliable supply, we continue
to deliver trusted medicines such as Fucidin® for skin infections, En-
stilar® for psoriasis and Protopic® for eczema, reaching millions of
patients in 2025.
Not all LEO Pharma
products are shown;
availability and
regulatory approval
vary in each market.
Our treatments
Management's review 9LEO Pharma Annual Report 2025 → Highlights
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2025 highlights
January
• Gilead Sciences and LEO
Pharma enter strategic
partnership. Gilead Sciences
gains global rights to LEO
Pharma’s oral STAT6
program for inflammatory
diseases; deal worth up
to USD 1.7bn. LEO Pharma
retains topical rights and co-
commercialization option in
dermatology outside the U.S.
• Junshi Biosciences and
LEO Pharma announce
commercialization
partnership for Loqtorzi® in
Europe.
February
• LEO Pharma and DEBRA
Research form strategic
partnership to accelerate
therapies for epidermolysis
bullosa (EB), a severe genetic
skin disease.
March
• Continued scientific leadership
at American Academy of
Dermatology Annual Meeting
(AAD) 2025. Presented late-
breaking Phase 3 data for
delgocitinib cream in chronic
hand eczema (CHE).
April
• LEO Pharma and Parker
Institute launch academic
partnership. Three-year
collaboration to advance
dermatology research using
AI and single-cell RNA
sequencing.
May
• LEO Pharma delivers strong
Q1 2025 performance:
revenue up 10% YoY to DKK
3,373m (+9% at CER); EBITDA
margin doubled to 16%; net
profit DKK 1,742m.
July
• Anzupgo® approved by FDA in
the U.S. as the first treatment
specfically indicated for CHE.
• Strategic partnership with
Boehringer Ingelheim for
Spevigo®, a first-in-class
IL-36RA biologic, becoming
LEO Pharma's third strategic
brand upon closing of
transaction
September 30.
August
• LEO Pharma delivers solid H1
2025 performance: sustained
growth and strategic progress
in H1 2025: revenue up 6% YoY
to DKK 6,789m (+7% at CER);
EBITDA margin 21%; net profit
DKK 1,977m.
September
• LEO Pharma delivers its
largest-ever scientific program
at European Academy of
Dermatology and Venereology
(EADV) 2025: five late-
breaking presentations and
24 abstracts across multiple
indications.
• LEO Pharma closes deal for
Spevigo® following approval
from all relevant authorities.
October
• New Drug Application (NDA)
for Anzupgo® accepted for
review for adults with CHE in
China.
November
• National Institute for Health
and Care Excellence (NICE)
recommends Anzupgo® for
reimbursement in England and
Wales. First topical treatment
recommended for CHE by
NICE where corticosteroids are
inadequate.
• LEO Pharma delivers strong 9M
2025 performance: revenue up
7% YoY to DKK 10,064m (+8%
at CER); organic growth led by
North America (+27%). EBITDA
margin 21%; net profit DKK
2,036m.
• LEO Pharma announced
positive topline key results
from the 32-week analysis of
the Phase 3b ADHAND trial
as well as positive detailed
16-week data.
December
• The European Medicines
Agency (EMA) accepted for
review a label expansion
application for Anzupgo® to
include adolescent patients
ag ed 12-17.
• Submission of net-zero target
for Science Based Targets
initiative (SBTi).
June
• LEO Pharma initiates Phase
2a DELTA NEXT Trial of
delgocitinib cream in
adults with mild-to-severe
palmoplantar pustulosis (PPP).
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Sustainability statement
(DKK million)
2025
EUR million
1
2025 2024 2023 2022 2021
Income statement
Group revenue 1,809 13,499 12,453 11,392 10,641 9,957
Of which dermatology revenue 1,473 10,991 10,008 9,039 8,133 7,259
Gross profit 1,104 8,240 7,518 7,20 0 6,283 6,048
Adjusted EBITDA
2
282 2,107 895 626 (1,253) (1,731)
Non-recurring items 220 1,644 (295) (75) (321) (226)
Operating profit before depreciation and
amortization (EBITDA)
2
503 3,751 600 551 (1,574) (1,957)
Operating profit/(loss) (EBIT) 305 2,279 (1,143) (1,699) (3,311) (4,156)
Net financial items (76) (566) (814) (1,093) (782) (607)
Profit/(loss) before tax 230 1,713 (1,957) (2,792) (4,093) (4,763)
Net profit/(loss) 334 2,489 (1,776) (3,607) (4,110) (4,868)
Earnings per share (EPS)
3
0.87 6.49 (4.64) (10.67) (12.83) (17.21)
Diluted earnings per share (DEPS)
3
0.87 6.49 (4.64) (10.67) (12.83) (17.21)
Balance sheet
Investments in property, plant and equipment 34 256 258 348 590 800
Total assets 2,737 20,445 20,151 20,951 22,932 23,695
Equity 705 5,262 2,704 4,525 1,946 5,537
Net working capital
3 4
534 3,991 3,833 4,525 3,848 2,543
Net interest-bearing debt (NIBD)
3 4
1,253 9,358 11,115 10,956 14,518 10,508
Invested capital 1,925 14,380 13,637 15,115 15,912 15,697
Cash flow
Cash flow from operating activities 168 1,255 265 (1,953) (2,274) (2,498)
Cash flow from investing activities 83 620 (317) (537) (1,476) (1,371)
Free cash flow
3
251 1,875 (52) (2,490) (3,750) (3,869)
1
Applied exchange rate for DKK/EUR in 2025: 7.46 (average) and 7.47 (year-end).
2
Please refer to Note 1.3 Non-IFRS measures, page 98.
3
Please refer to Glossary, page 148.
4
Due to updated definitions of net working capitall in 2025 and net interest-bearing debt (NIBD) in 2024, previous years have been restated.
2025 2024 2023 2022 2021
Key ratios
Revenue growth 8% 9% 7% 7% (2%)
Revenue growth at CER
2
10% 10% 10% 4% (1%)
Dermatology revenue growth at CER
2
12% 12% 15% 9% 7%
Gross margin
3
61% 60% 63% 59% 61%
OPEX ratio (% of revenue) 57% 70% 78% 87% 102%
Adjusted EBITDA margin
2
16% 7% 5% (12%) (17%)
EBITDA margin
2
28% 5% 5% (15%) (20%)
EBIT margin
3
17% (9%) (15%) (31%) (42%)
Effective tax rate (45%) 9% (29%) 0% (2%)
NIBD/Adjusted EBITDA (LTM) 4.4 12.4 17.5 NM NM
People
Average number of full-time employees (FTE)
2
4,104 4,184 4,490 5,252 5,804
Number of full-time employees (FTE) at year-end 4,265 4,090 4,284 5,042 5,612
Environmental, social and governance Unit
Number of patients served Thousands 101,585 100,053 96,003 89,305 84,686
Total CO
2
e emissions
(Scope 1 and 2, market-based) tCO
2
e 21,751 22,316 23,555 24,309 23,144
Scope 3 supplier engagement % 84% 81% 83% 66% 65%
Share of renewable electricity used at
our manufacturing sites % 100% 98% 91% 91% 92%
Employee turnover rate % 16% 18% 26% 19% 20%
Rate of recordable work-related
accidents
Incidents per
million hours 1.6 N/A N/A N/A N/A
Employees completing global annual
Code of Conduct training % 100% 99% 99% 97% 96%
Gender diversity – all managers % women/men 47/53 46/54 48/52 46/54 45/55
Gender diversity – Board of Directors
without employee representatives % women/men 25/75 17/83 13/ 87 13/87 13/87
Key figures
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LEO Pharma stories – CHE
Living with chronic
hand eczema
Through the eyes of a family member, chronic
hand eczema (CHE) meant experiencing firsthand
how a loved one lay awake at night, hurting and
itching. This story offers a glimpse of the burden
CHE can bring, knowing that each patient’s
journey may look different.
The image is not associated with the patient story. The image is for illustrative purposes only.The above patient story cannot be generalized to all patient populations and may vary by patient.
LEO Pharma stories – chronic hand eczema
The patient was suddenly afflicted with a
severe rash on the palms. Within a short
time, the patient’s hands became ex-
tremely swollen and very red. The skin
peeled, tore open across the entire palms,
and incessant itching robbed the patient
of sleep. The condition quickly escalated
to a level that alarmed both laypeople and
medical staff for many months.
It is difficult to imagine how the patient
managed to cope in everyday life. The only
relief came from wearing several layers of
gloves: cotton soaked in petroleum jelly
on the inside, with rubber gloves on the
outside to avoid contact with anything.
At best, the nights allowed only a few
hours of sleep. One can imagine what this
persistent state does to the human mind:
Feeling tired all the time, finding it hard to
focus, forgetting things, losing morale, and
struggling with hand coordination – which
led to small accidents and broken items.
Relative to a CHE patient
Management's review 12LEO Pharma Annual Report 2025 → Highlights
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LEO Pharma’s strategy 14
Growth 15
Pipeline 18
Profitability 21
Unite as one team 22
Leave a legacy 24
LEO Pharma stories – GPP 26
Our business
Management's review 13LEO Pharma Annual Report 2025 Highlights
→ Our business
Financial review & outlook
Corporate matters
Sustainability statement
13Management's reviewLEO Pharma Annual Report 2025
Expanded portfolio from one to
three global strategic brands
Continued global launch of
Anzupgo®, now available in 12
markets
Adtralza®/Adbry® achieved
strong growth, available in 20
markets
Strengthened Critical Care
portfolio with addition of
Loqtorzi®
Unite as one team
Five-year high engagement score in LEO Voice
Introduced and rolled out leadership framework, "How we lead LEO," to 600+ people leaders
Leave a legacy
More than 100 million patients served
Developed a climate transition plan to substantiate our net-zero commitment
Expanded pipeline with new
late-stage development of
Anzupgo® in palmoplantar
pustulosis (PPP) and lichen
sclerosus (LS) and Spevigo® in
pyoderma gangrenosum (PG)
Advanced STAT6 program
through strategic partnership
with Gilead Sciences
Succesful Phase 3 results for
Anzupgo® in adolescents and
Adtralza®/Adbry® in hard-to-
treat areas such as hands
Operating margin more than
doubled driven by sales growth
and efficiency gains
Strongly improved net result
and return to postive net profit
Significant deleveraging
supported by substantial free
cash flow generation
Growth Pipeline Profitability
Delivering on our strategy
In 2025, LEO Pharma made strong progress
on our long‑term ambitions, strengthening our
market position, advancing our pipeline, sup‑
porting a new chapter of sustainable growth.
Medical dermatology is a rapidly growing market
characterized by high unmet need, but also a
rapid pace of innovation unlocking new treatment
options. LEO Pharma is uniquely positioned to
identify these needs and match them with innova-
tion.
Our expertise is recognized and trusted by leading
institutions across academia, patient organizations,
biotech and other pharma companies, underpin-
ning our ambition to be the preferred partner in
medical dermatology.
Driven by our focus on raising the standard of care
worldwide, our innovation model aims to leverage
our in-house expertise and global platform through
partnerships to develop and expand access to
transformative new treatments.
Our ambition goes hand in hand with our commit-
ment to responsible business practices. Sustain-
ability is embedded in LEO Pharma’s commercial
strategy, and our sustainability-related goals apply
across all products, geographies and customer
segments. This ensures that every part of our
business actively manages its impact on people,
society and the environment, making progress an
integral part of how we innovate, grow and deliver
care.
Future priorities
At LEO Pharma, we are shaping a new chapter
of sustainable growth, driven by a clear focus on
strengthening our market position, expanding our
portfolio, enhancing our capabilities and evolving
our culture. Our strategy is centered on delivering
impactful innovations, building a diversified and
profitable business, and capturing new growth
opportunities across dermatology and critical care.
By fostering a collaborative, accountable and agile
organization, we will ensure long-term leadership
and create lasting value for patients, partners and
our business.
LEO Pharma's strategy is anchored in three key
areas - growth, pipeline, and profitability - support-
ed by “Unite as one team” and “Leave a legacy,”
which drive resilience and sustainability. The next
pages show the progress and future priorities for
each of these five areas.
Our strategic achievements
LEO Pharma’s strategy
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Growth
Innovation-led
growth underpinned
by a global platform
Advancing the standard of care for patients and
driving sustainable growth is at the core of our
strategy. In recent years, we successfully ex-
panded our portfolio and accelerated growth at
constant exchange rates (CER) to double digits in
2023, 2024 and 2025.
This acceleration began with the launch of Ad-
tralza®/Adbry® in 2021, and in the past 18 months
was followed by the launch of Anzupgo® in late
2024 and the addition of Spevigo® on September
30, 2025.
The growth potential of these first-in-class inno-
vations is enabled by a global platform built on a
broad, established brand portfolio that continues
to reach more patients every year.
2025 progress
In 2025, Group revenue rose 10% at CER, powered
by strong Dermatology growth of 12% at CER.
Dermatology
Adtralza®/Adbry®
As LEO Pharma's largest strategic brand by
revenue and available in 20 countries across the
globe, Adtralza®/Adbry® was the main driver of
Group revenue growth in 2025.
The growth is underpinned by the increasing adop-
tion of the overall biologics class for the treatment
of atopic dermatitis (AD), with Adtralza®/Adbry®
benefiting from physician familiarity, as the product
has now been available in several markets for more
LEO Pharma’s growth is driven by our first‑in‑class
strategic brands, building on the resilient foundations
provided by our established brands.
than four years as the first biologic treatment for
AD specifically targeting IL-13 inhibition. Addition-
ally, the uptake of Adtralza®/Adbry® continued to
be supported by the rollout of the pre-filled pen,
flexible dosing options, and the generation of re-
al-world data supporting the long-term efficacy
and safety profile of the product.
Anzupgo®
Following its launch in Germany in 2024, Anzupgo®
is now available in 12 markets, including the U.S.,
where it received FDA approval in July and was
launched in September.
Across markets, Anzupgo® is seeing a strong re-
ception among healthcare providers and patients.
In the U.S., the number of prescribers has grown
rapidly over the first few months since its launch.
The uptake highlights both the clinical profile of
Anzupgo® and its relevance as the first and only
FDA-approved treatment option specifically indi-
cated for moderate-to-severe chronic hand eczema
(CHE) in adults.
Anzupgo® is also being well received by payers and
reimbursement authorities, ensuring broad access
for patients in recognition of the important care
provided by the product. In 2025, this included a
positive recommendation from the UK’s National
Institute for Health and Care Excellence (NICE)
announced in early November. Anzupgo® further
achieved reimbursement in several key European
markets.
Actor portrayal
A milestone year for Anzupgo®
• Products available in 12 markets across three
continents
• FDA-approval as the first and only topical
pan-JAK inhibitor
• UK NICE recommendation for reimbursement
• Initiated trial in palmoplantar pustulosis (PPP)
• Accepted for Direct Access in France as fifth-ev-
er pharmaceutical product
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Spevigo®
The addition of Spevigo® to our portfolio marks LEO
Pharma’s first entry into the rare disease space
within dermatology, a field characterized by high
unmet needs and small patient populations.
Following LEO Pharma’s agreement with
Boehringer Ingelheim to commercialize and
advance the development of Spevigo®, we are now
leveraging our dermatology platform to ensure its
availability at key centers and advance the stand-
ard of care for patients.
Established brands
LEO Pharma’s established dermatology portfolio
spanning more than 20 brands makes a fundamen-
tal difference to millions of patients worldwide.
In 2025, we pursued new ways to grow the reach
of the portfolio, including new brand campaigns,
entry into new markets, commercial partnerships
and evolving the go-to-market model in countries
by leveraging digital solutions.
Critical Care
In 2025, we entered a distribution and marketing
partnership with Junshi Biosciences to commer-
cialize Loqtorzi® (toripalimab) in Europe. Loqtorzi®
is a PD-1 monoclonal antibody indicated for naso-
pharyngeal cancer (NPC), and in some markets for
esophageal squamous cell carcinoma (ESCC). It
was first launched in Germany in January 2026,
with an initial rollout planned across Germany,
France, Italy and Spain, as well as in the UK and
Ireland. The addition of Loqtorzi® is a strategically
curated expansion of our Critical Care portfolio,
complementing our existing heparin-based antico-
agulation treatments for cancer-associated throm-
bosis and other specialty patient needs.
To better reflect the scope of the business, we
changed the name of the business area from
Thrombosis to Critical Care, enabling more ef-
fective use of our strong commercial platform
Fucidin®
Growing strong worldwide
for more than 60 years
In 1964, LEO Pharma entered the field of
medical dermatology with the launch of the
Fucidin® topical formulation, which quickly
became a success.
60 years on, the Fucidin® range remains a cor-
nerstone of our portfolio, with around 1 billion
tubes delivered worldwide. This enduring
success reflects its loyal customer base – pre-
scribed by generations of healthcare profes-
sionals and trusted by generations of patients
and their families.
Today, LEO Pharma’s Fucidin® portfolio includes
five topical formulations: Fucidin® ointment,
Fucidin® cream, Fucicort® cream, Fucidin® H
cream and Fucicort® lipid cream. Each ad-
dresses distinct patient needs, yet all share the
benefits of fusidic acid for use against bacterial
skin infections, notably those caused by Staph-
ylococcus aureus, including methicillin-
resistant strains (MRSA).
With 23 new markets entered in the past 10
years, the brand’s expanding reach reinforces
LEO Pharma’s position as a global leader in
medical dermatology. In response to rising
demand, the state-of-the-art and fully automat-
ed Fucidin® active pharmaceutical ingredient
(API) factory at our Ballerup site is scheduled
to launch in 2026.
23
New markets entered
in the past 10 years.
and existing sales force to deliver greater value to
healthcare providers.
Future priorities
Strategic brands
Adtralza®/ Adbry®
Among patients with AD, the adoption of advanced
biologics such as Adtralza®/Adbry® remains rela-
tively low compared to other disease areas such as
psoriasis.
As appreciation of advanced treatment options in-
creases, this provides significant opportunities for
growth, albeit in a market where more treatment
options are also becoming available.
In this evolving landscape, Adtralza®/Adbry® is
well positioned to compete, supported by strong
long-term real-world evidence, high familiarity
among healthcare professionals and long-term
safety data. It also offers differentiated clinical
evidence in high-burden areas, such as the head
and neck and AD on the hands, along with flexible
dosing options that address diverse patient needs.
Looking ahead, a key priority will be to further
substantiate and increase awareness of the robust
clinical profile for Adtralza®/Adbry®.
Anzupgo®
Anzupgo® is positioned to be a key growth driver for
LEO Pharma. As the first pan-JAK inhibitor cream
for the treatment of CHE, Anzupgo® holds great
potential to bring relief to patients with high unmet
needs. The immediate priority is to raise awareness
that this new treatment option is now available and
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to ensure that providers are trained in how they can
advance the standard of care with Anzupgo®. Fur-
thermore, we plan to make the treatment available
to patients in a number of additional markets.
In addition, the broad pan-JAK inhibition and long-
term safety data of Anzupgo® make it potentially
relevant across a wide range of indications, with
the JAK-STAT pathway playing a central role in the
pathophysiology of more than 25 dermatological
diseases. Following regulatory approval for the
treatment of CHE in multiple markets – including
the EU and the U.S. – the first clinical trials outside
of CHE are already underway to further expand
its clinical and commercial reach, dependent on
regulatory approval and market conditions. Looking
ahead, our priority is to complete the global launch
and rollout of Anzupgo®, followed by the progres-
sion of label-extension opportunities, and the
strengthening of physician and patient confidence
across new treatment settings.
Spevigo®
As LEO Pharma’s first rare disease therapy,
Spevigo® has added an important rare dermatology
dimension to our strategic portfolio. Our priority is
to fully integrate Spevigo® into our portfolio and ac-
celerate access to this treatment, ensuring vials are
available when dermatologists need them. Lever-
aging LEO Pharma’s dermatology platform, we are
strengthening its footprint in high-priority markets
such as the U.S., Japan and China and advancing
development in other indications to support long-
term growth.
Established brands
We continue to expand the reach and impact of
our established brands. Alliance markets, serviced
through LEO Pharma’s collaborations with strategic
distribution and commercial partners, are the key
growth drivers for the established brands. We aim
to fully utilize the core strengths of our commercial
operating model and leverage our deep dermatol-
ogy expertise.
We continuously optimize the portfolio to ensure
relevance and value for patients and providers,
further entrenching these established brands as
true backbone therapies for dermatologists and
general practitioners worldwide.
Critical Care
We aim to sustain and gradually grow our Critical
Care business by continuing to advance our port-
folio of heparin-based thrombosis therapies and
leverage our access to care sites to establish
Loqtorzi® as an important new therapy for patients
with nasopharyngeal carcinoma (NPC) and esoph-
ageal squamous cell carcinoma (ESCC), who often
face limited treatment options. Simultaneously, we
will continue to consider bolt-on opportunities that
clearly complement our portfolio and align with our
long-term objective of increasing profitability and
growth.
This balanced approach allows us to build on
our existing product and commercial execution
strengths while exploring opportunities for selec-
tive expansion.
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Pipeline
Bringing new
innovations to more
patients
2025 progress
2025 marked a year of accelerated pipeline mo-
mentum, with several important assets being ad-
vanced for areas of high unmet need. Our pipeline
spans label-expansion opportunities underpinned
by proven mechanisms of action and potential
next-generation therapies.
Delgocitinib (Anzupgo®), which is already approved
for moderate-to-severe chronic hand eczema
(CHE), is being investigated beyond its current in-
dication. The first late-stage program outside CHE
– targeting palmoplantar pustulosis (PPP) – was
launched in June, and will be followed by a lichen
sclerosus (LS) trial initiated in January 2026.
Spesolimab (Spevigo®), which is approved for
generalized pustular psoriasis (GPP), is in a pivotal
Phase 3 trial for pyoderma gangrenosum (PG), a
rare condition with limited treatment options.
Our early-stage STAT6 program, developed
in-house and now partnered with Gilead Sciences,
represents a potentially transformative approach
for addressing complex dermatological need.
Tralokinumab (Adtralza®/Adbry®)
In June, the ADHAND Phase 3b trial investigated
tralokinumab for the treatment of adults with mod-
erate-to-severe atopic dermatitis (AD) on the hands
who are candidates for systemic therapy. The trial
delivered positive interim results in adult patients
Our specialized focus on skin disease gives us a unique ability
to keep finding new answers for those who need us most. In 2025,
we advanced key assets within our pipeline, which includes label‑
expansion opportunities and potential next‑generation therapies.
LEO Pharma and Gilead
Sciences partner to
advance STAT6 program
In January 2025, LEO Pharma and
Gilead Sciences entered a strategic
partnership to advance LEO Phar-
ma's preclinical small molecule oral
STAT6 programs for inflammatory
diseases. The STAT6 program has
potential across multiple inflamma-
tory diseases, and the partnership
with Gilead Sciences broadens the
program beyond LEO Pharma’s stra-
tegic focus on dermatology.
Under the agreement, Gilead
Sciences will have exclusive global
rights to the oral STAT6 program,
while LEO Pharma retains the
option to co-commercialize the oral
program for dermatological indica-
tions outside the U.S. LEO Pharma
will maintain full global rights to the
topical formulations of the STAT6
program in dermatology.
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Boehringer Ingelheim
and LEO Pharma enter
into a partnership to
commercialize and further
develop Spevigo®
On July 14, 2025, Boehringer Ingelheim and
LEO Pharma announced an exclusive global
license and transfer agreement to commercial-
ize and advance the development of Spevigo®
(spesolimab).
Spevigo® is an innovative, humanized and
selective monoclonal antibody that targets
and blocks the activation of the interleukin-36
(IL-36) receptor – a key signaling pathway in the
immune system implicated in the pathogenesis
of several autoinflammatory diseases, including
generalized pustular psoriasis (GPP).
Spevigo® is available in more than 40 countries,
including the U.S., Japan, China and most Euro-
pean countries, to treat GPP flare-ups in adults.
It has also been approved for expanded indi-
cations in GPP in the EU, the U.S. and China. In
addition, Spevigo® is under investigation for the
treatment of pyoderma gangrenosum (PG).
Under the terms of the agreement, LEO Pharma
will be responsible for the commercialization
and further development of Spevigo®.
with moderate-to-severe AD on the hands, meeting
the primary and all key secondary endpoints. The full
data set was later presented at the ISAD Congress
2025 in Melbourne, Australia.
Topline 32-week final results were announced
in late November, confirming the strong interim
results and thus further strengthening safety and
efficacy data for tralokinumab in this high-burden
area of AD.
Delgocitinib (Anzupgo®)
Positive results from the DELTA TEEN and DELTA
China trials were announced in February with
delgocitinib, marking the fifth and sixth Phase 3
studies in CHE. The DELTA NEXT Phase 2a trial,
which was initiated in June, is exploring the use of
topical delgocitinib for PPP, a condition with few
treatment options.
In addition, the DELTA CARE 1 Phase 3 trial, which
was initiated in January 2026, will recruit up to
652 adult patients with LS to investigate the effi-
cacy and safety of delgocitinib cream compared to
cream vehicle.
In April, for the second year in a row, LEO Pharma
was represented with CHE data in The Lancet, a
prestigious peer-reviewed medical journal. The
Lancet, featured data from the 24-week DELTA
FORCE trial comparing the efficacy and safety of
topical delgocitinib with oral alitretinoin capsules in
severe CHE. Oral alitretinoin capsules are currently
the only approved systemic drug for severe CHE
outside the U.S.
Temtokibart
In May, LEO Pharma announced positive topline
Phase 2b results for temtokibart, an investigational
IL 22 antagonist, in adults with moderate-to-se-
vere AD. The trial met its primary endpoint, based
on the percentage change in the Eczema Area and
Severity Index (EASI) from baseline to Week 16 for
the three highest doses. Temtokibart holds poten-
tial as a novel mechanism for treating AD.
Spesolimab (Spevigo®)
Our partnership with Boehringer Ingelheim grants
LEO Pharma global commercialization and develop-
ment rights to spesolimab. This collaboration aims
to combine our expertise to maximize the treatment
impact of spesolimab on GPP and explore potential
new indications. Spesolimab is in a pivotal Phase 3
trial for PG, a serious and rare skin condition with
limited treatment options.
STAT6
Our pre-clinical STAT6 program, developed in-house
and partnered with Gilead Sciences since January
2025, represents a potentially transformative
approach for the treatment of patients with inflam-
matory diseases, and holds significant long-term
potential for addressing complex dermatological
needs.
STAT6 controls IL-4 and IL-13 signaling, which drives
diseases such as AD, asthma and chronic obstructive
pulmonary disease (COPD). Research suggests that
targeting STAT6 may help more patients, including
those not well served by current treatments, and could
offer a convenient oral option instead of injections.
The program includes both degraders and inhib-
itors, targeting a pathway validated by existing
treatments, such as Adtralza®/Adbry®, and JAK
inhibitors. These potential next-generation assets
hold the potential promise of offering the conveni-
ence of either oral or topical delivery.
Under the terms of the partnership, the STAT6
program has been transferred to Gilead Scienc-
es, which will lead the development of the oral
program, leveraging Gilead Sciences' strong exper-
tise in small molecules, while LEO Pharma retains
the option to opt in for ex-U.S. co-commercializa-
tion. LEO Pharma will lead the development of the
topical program and retain full global rights to this.
With the formation of the partnership, LEO Pharma
received a USD 250 million upfront payment with
a total potential deal value of up to USD 1.7 billion,
up to mid-teens royalties, and additional upside
through opt-in and topical opportunities.
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Our pipeline
Future priorities
Our pipeline is aligned with our strategic priorities,
bringing together external innovation and scientific
expertise to deliver impactful treatments for un-
derserved dermatology needs.
In the near term, we are focused on building a
strong late-stage pipeline and are actively pursu-
ing opportunities to expand indications, optimize
formulations and generate evidence that clearly
differentiates our portfolio.
Looking ahead, we aim to be the preferred partner
for innovation in dermatology, identifying complex
medical challenges and working with partners to
create solutions that improve the standard of care.
Strong results have established a solid platform for
accelerated growth, and our newly launched and
partnered assets are poised to deliver significant
benefits to patients worldwide.
Project Description Indications Partners Pre‑clinical Phase 1 Phase 2 Phase 3 Filing Regions
Delgocitinib
1
Topical pan-JAK inhibitor
Chronic hand eczema
Shionogi & Co., Ltd.
Global
Chronic hand eczema (adolescents) Global
Lichen sclerosus Global
Palmoplantar pustulosis Global
Tralokinumab
2
Anti-IL-13 monoclonal antibody Atopic dermatitis(pediatrics) AstraZeneca Global
Spesolimab
3
Anti-IL-36 R monoclonal antibody Pyoderma gangrenosum Boehringer Ingelheim Global
Calcipotriol and beta-
methasone dipropionate
4
Fixed-dose combination Plaque psoriasis China
2
Temtokibart Anti-IL-22RA1 monoclonal antibody Atopic dermatitis argenx Global
IL-1RAcP Anti-IL-1RAcP monoclonal antibody Inflammatory skin diseases MorphoSys Global
STAT6
5
Oral program Inflammatory skin diseases
Gilead Sciences
Global
Topical STAT6
6
Topical program Inflammatory skin diseases Global
1
Approved in the EU, US, UK, Australia, South Korea, Canada, Switzerland and the UAE for chronic hand eczema
2
Approved in the EU and U.S. and additional regions for atopic dermatitis.
3
Approved in the EU and U.S and additional regions for generalized pustular psoriasis. LEO Pharma in-licensed Spesolimab from Boehringer Ingelheim on September 30, 2025.
4
Approved in the EU and U.S. and additional regions for plaque psoriasis.
5
Partnership announced 11 January 2025: Gilead Sciences controls the global rights to oral STAT6 program and are in full control of the clinical development. LEO Pharma will have the option to co-commercialize oral programs for dermatology ex-US.
6
LEO Pharma holds an exclusive license from Gilead Sciences for STAT6 topical products in dermatology.
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Profitability
Strong financial
progress in 2025
2025 progress
In 2025, LEO Pharma delivered a step change in
financial performance, reinforcing the financial
foundation that underpins our ability to innovate
and grow.
The adjusted EBITDA margin increased to 16%,
representing a +9 percentage point improvement
on 2024. This progress reflects enhanced oper-
ating efficiency from our strategic transformation,
fueled by higher sales volumes, a favorable product
mix and the strong performance of our strategic
brands Adtralza®/Adbry® and Anzupgo®. Savings
from the restructuring program initiated in 2024
further reduced operating expenses.
The strong uplift in the adjusted EBITDA margin
was achieved despite the consolidation of costs
related to Spevigo®, primarily related to devel-
opment activities, which reduced the adjusted
EBITDA margin in 2025 by around 2 percentage
points.
Reported EBITDA improved even more strongly
than adjusted EBITDA due to a one-off payment
of DKK 1.7 billion net of transaction cost received
from Gilead Sciences.
The performance in 2025 builds on consistent
margin improvements over the last four years and
underscores strong execution on a clear strat-
egic direction. This transformation is successfully
sharpening the unique strengths and opportunities
of LEO Pharma’s global dermatology platform,
while building momentum toward a scalable fi-
nancial model with attractive M&A optionality and
leveraging the platform through partnerships.
Future priorities
In 2026, we are focused on further strengthening
the financial position of LEO Pharma, driven by
sales growth and the accelerated adoption of our
high-value, first-in-class innovations.
We will increase investment in R&D to further
accelerate our innovation pipeline, and we will
also invest in the global launch of Anzupgo® to
ensure we unlock the full potential of the product in
chronic hand ezcema.
AI drives innovation and efficiency
In 2025, LEO Pharma took important strides
forward in advancing our ability to harness artificial
intelligence (AI) and digital technologies to drive
innovation.
We launched the Innoviewer platform, serving
as a digital backbone for the innovation model at
LEO Pharma. Innoviewer integrates external data
sources with years of accumulated, digitized LEO
Pharma knowledge to power machine-assisted
asset scouting and evaluation. Leveraging unique
in-house data, human expertise and a vigilant,
automated view of external opportunities, the
platform plays a key role in uncovering and creat-
ing value and differentiation when sourcing new
assets for our pipeline.
Alongside this, we advanced the broad adoption
of generative AI across LEO Pharma, enabling em-
ployees to innovate and work more effectively, and
explored targeted AI pilots to unlock new sources
of business value.
16%
Adjusted EBITDA margin
More than doubled compared to 2024
(+7%)
Building on momentum from previous years, LEO Pharma
will maintain disciplined capital allocation, channeling
investment into high return opportunities that leverages
our global platform to fuel growth and support sustained
profitability.
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Unite as one team
Our Values
• Integrity
• Adaptability
• Customer focus
• Innovation
• Passion
Response rate
November 2025 saw record-high participation in
the LEO Voice survey.
86%
Our Winning Behaviors
• We prioritize and simplify
• We own it and are
accountable
• We collaborate and put
LEO Pharma first
Leadership development
Number of people leaders trained in "How we
lead LEO."
600+
Our Leadership Behaviors
• We are a source
of inspiration
• We develop the best teams
• We make our
ambitions happen
Leadership and
engagement propelling
us forward
2025 progress
As we move into our next growth chapter, an
engaged and motivated workforce will be the
driving force behind our success. The results of
our latest engagement survey are both a cause
for pride and a roadmap for where we can
continue to grow together.
Two engagement surveys were conducted in 2025,
allowing us to monitor employee engagement more
closely in response to the evolving organizational
landscape and changes implemented in the past
year. The first survey in May provided an early
assessment of where to focus, while a survey in
November gave a timely evaluation of the year’s
progress and initiatives.
In 2025, LEO Voice, LEO Pharma’s internal em-
ployee satisfaction survey, delivered exceptional
feedback, with improvements across all catego-
ries compared to November 2024. Our May 2025
survey showed an engagement score of 81%, an
increase of 5 percentage points compared to 2024.
In the November 2025 survey, we once again
increased the engagement score by 4 percentage
points, reaching an overall engagement score of
85%. This is the highest engagement score since
2020. Our employees know the strategy and un-
derstand the direction, reinforcing alignment, the
one-company mindset and commitment across the
workforce.
We ended on a voluntary turnover of 7.0% in 2025,
down 2.9 percentage points from 9.9% in 2024. In
fact, voluntary turnover was 13.1% in 2023, and
we have seen an uninterrupted month-over-month
decline in voluntary turnover since then.
New leadership framework
At LEO Pharma, we believe that leadership is a key
component in driving organizational development
and performance. "How we lead LEO" launched
officially in April 2025, and the framework provides
a common language and guidelines on practical
behaviors for all 600+ leaders across LEO Pharma.
With "How we lead LEO," we have established the
expected leadership behaviors that support our
values and enable our teams and organization to
develop and deliver on our strategy.
Our global HR Business Partner community has
supported local launches and facilitated training
sessions worldwide, so that every people manager
can internalize the behaviors and apply them con-
sistently, regardless of location.
Internal career growth
Talent mobility and internal career movement
are central to how we build capabilities, grow our
people and retain top talent.
In 2025, a total of 180 employees (4.4%) experi-
enced substantial changes in their roles, providing
flexibility and development opportunities.
These transitions are supported by structured devel-
opment plans, targeted assignments and clear path-
ways for managers and individual contributors alike.
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Our talent processes emphasize skill-building,
cross-functional exposure and timely feedback,
so that people can grow into new responsibilities.
We are also strengthening development support to
ensure that mobility drives both individual careers
and organizational readiness.
Future priorities
Looking ahead, our priorities are centered on build-
ing the capabilities and culture required to deliver
on our long-term ambitions. We are committed to
continuing to develop future-ready talent, strength-
en leadership at every level, and foster a resilient,
agile organization that operates seamlessly across
geographies and functions. We will ensure this by
undertaking an enterprise-wide robust organiza-
tional planning process.
Employee engagement will remain a key focus,
supported by development programs, enhanced
feedback and initiatives that build a supportive,
high-performance environment, with accountability
fostered through empowerment and clear roles and
responsibilities.
We will also keep up our focus on Winning Behav-
iors and the importance of our values, as these
concepts are key representations of our culture and
critical to sustaining our success.
In addition, we will ensure that our rewards remain
competitive and fair, and promote greater mobility
across geographies and functions, ultimately en-
suring that LEO Pharma is a true talent factory.
Looking ahead, our priorities are centered on
building the capabilities and culture required to
deliver on our long-term ambitions.
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Growing our business
responsibly
Leave a legacy
2025 progress
Sustainability is an integral part of our corporate
strategy and business practices. In 2025, we ad-
vanced initiatives that reduce our environmental
footprint, strengthen our organization and support
long-term, responsible growth. We continued to
lower Scope 1 and 2 greenhouse gas (GHG) emis-
sions across our operations while improving
overall energy efficiency. We matured our non-
discrimination activities by scaling inclusive be-
havior training and maintaining balanced gender
representation for all managers.
These achievements underscore our commitment
to embedding sustainability across all aspects of
the business, from operational efficiency and talent
development to the way we work with patients,
partners and communities.
To move sustainability from intention to action
with impact, we sought to integrate it into existing
processes and structures throughout the company.
You will therefore find sustainability in our corpo-
rate strategy, corporate policies, and product and
partnering processes, down to how we organize our
capital and evaluate future investments.
Drive meaningful impact for patients
At LEO Pharma, we focus on patients, work for pa-
tients with patients, and prioritize patients – they are
at the heart of everything we do when we seek to
address the unmet needs in medical dermatology.
We seek to leverage patient insights, bringing the
patient voice into our business from early scouting,
development and in the markets. As such, our work
evolves in a climate of integration, involvement,
support and communication.
We measure and track patient engagement across
key areas, providing clear direction on how to col-
laborate with patients in developing treatments.
Furthermore, we continue to support patient
At LEO Pharma, sustainability remains central to how we operate. In 2025,
we took important steps to reduce our environmental footprint, advance
patient care, and foster diversity and inclusion in the workplace. These efforts
underscore our commitment to responsible growth and lasting impact.
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Sustainability statement
communities and networks, whether through
grants or project-based collaborations. This
approach enables LEO Pharma to advance care
standards, reduce stigma and have a meaningful
impact on the lives of those who need it most.
In addition to LEO Pharma’s commercial activities,
we deliver vital medicine to patients in crisis situ-
ations through our global donations program. Our
long-standing partnership with International Health
Partners (IHP) enables us to donate crucially needed
health products to people in crises around the world.
Since 2013, LEO Pharma and IHP have partnered
to ship more than 400,000 units of medicine to 29
countries, reaching more than 500,000 patients.
Reducing GHG emissions
We are on an ambitious growth journey and, as part
of this, we seek to advance growth with less. We
do so by proactively addressing climate change to
minimize our environmental impact and bring down
CO
2
emissions across the value chain.
In 2025, LEO Pharma continued the electrification
of its global car fleet, expanding the plan to include
six additional countries. This transition toward a
fully electric fleet supports our 2030 climate target
of reducing Scope 1 and 2 emissions by more than
50% compared to 2019 levels.
We also introduced a new travel system designed
to encourage employees to choose more sustain-
able transportation options, while providing the
organization with detailed insights into business
travel and associated carbon emissions.
All LEO Pharma manufacturing sites now only use
electricity from 100% renewable sources, with
ongoing initiatives to reduce energy intensity across
our operations as measured by energy consumption
(MWh) per unit of production value (DKKm).
Advancing diversity and inclusion
In 2025, our commitment to fostering a diverse and
inclusive culture remained true. Building on prior
years, our diversity, equity and inclusion (DE&I)
program, Curiosity Beyond, broadened its focus
to include team composition and inclusion, moni-
toring representation and engagement to support
balanced, connected, and innovative teams.
In 2025, LEO Pharma A/S continued working toward
gender equality, committing to the United Nations
Women’s Empowerment Principles and its seven
principles. At the end of 2025, we maintained a bal-
anced representation of at least 45% of the under-
represented gender at senior and middle manage-
ment with a 55/45 and 52/48 gender distribution
within senior and middle management respectively.
To embed inclusion in everyday practice, inclusion
training was offered to all employees, and we also
advanced disability inclusion, gender equality and
LGBTQ+ inclusion, reinforcing our belief that diversity
flourishes when inclusion is present in all aspects of
our work.
As a participant in the UN Global Compact, we
remain committed to upholding and incorporating its
Ten Principles in the areas of human and labor rights,
the environment and anti-corruption.
Future priorities
As part of our work to maximize impact, we con-
tinue to make progress on our strategic priorities
and mitigate any potential and actual negative
impacts while exploring opportunities to advance
sustainability as a driver for growth, striking the
right balance between our footprint and imprint.
In 2026 and beyond, we will act on our commit-
ment to become net-zero by 2050 and continue
to bring down CO
2
emissions by actively engaging
with our business partners to identify key emission
hotspots, collaborate on strategies to effectively
reduce emissions and execute on our identified
decarbonization levers across the value chain.
While reducing, managing and mitigating our foot-
print through smarter processes, we aim to make
a lasting imprint on patients, healthcare providers
and our employees and build a positive legacy
through scientific innovation, inclusive culture and
meaningful partnerships.
Beyond serving more than 100 million people, we
plan to advance our efforts to address access bar-
riers and define what access to health looks like for
LEO Pharma.
People development is a key priority for us, and in
2026, we will continue to focus on fostering an in-
clusive and psychologically safe work environment
with a high emphasis on promoting development
plans and facilitating capability building to create a
space where everyone can thrive.
From early discovery to delivering care to patients,
each function at LEO Pharma plays a unique and
critical role in helping us reduce our footprint,
identify synergies and amplify our positive imprint.
Guided by integrity, transparency and focus, we
continue to integrate sustainability into our busi-
ness strategy, to strengthen resilience and create
long-term value for patients and society. Every
decision we make today brings us closer to leaving
a meaningful legacy for future generations, creat-
ing impact far beyond the skin.
Continuing our journey toward net-zero
We set and submitted our net-zero target in
alignment with the Science Based Target ini-
tiative (SBTi) standard, building on our 2030
climate targets and commitment to achieving
net-zero by 2050. This ongoing project includes
the development of a comprehensive net-zero
transition plan covering Scope 1, 2 and 3 emis-
sions, further reinforcing our commitment to
responsible and sustainable growth.
Every decision we make today
brings us closer to leaving a
meaningful legacy for future
generations, creating impact
far beyond the skin.
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Corporate matters
Sustainability statement
LEO Pharma stories – GPP
My doctor is my
‘life saver’
LEO Pharma stories – generalized pustular psoriasis
Having lived with generalized pustular psoriasis (GPP)
almost her whole life, Kanya has learned the value of
finding solutions in partnership with her doctor.
I was diagnosed with generalized pustular psoriasis (GPP) at the
young age of three. My amazing mom guided me through every step,
from getting a diagnosis to selecting doctors, to establishing ongoing
care. She showed me how important partnership is when living with a
rare disease, and she was by my side for every challenge.
My mom’s example has never been lost on me, even now that I’m a
36-year-old nurse who deeply understands GPP.
As an adult, I’ve been fortunate to have an amazing partnership with
my doctor, who, like mom, has handled the ups and downs of my
journey with care. He has helped me make well-informed decisions
and gain greater control over this disease.
Our partnership began about 14 years ago, during one of my most
challenging moments. I was in nursing school and had been hospital-
ized multiple times. At times, I was physically debilitated by my GPP
– finding it hard to walk or even have the energy to move.
Then I met my doctor, and he helped me manage my treatment plan
over time. He became an equal champion of my health.
I affectionately call him my ‘life saver,’
not just because his management of my
care took me from being hospitalized
to healthy enough to graduate nursing
school, but because he kept advocating
for improvement and encouraged me to
not accept the status quo.
Over the years, my doctor followed the scientific advancements for
GPP and proactively shared research updates with me. I was educat-
ed and aware of potential options for my future. With GPP symptoms
always ‘there’ – sometimes in the background, sometimes more
present – we didn’t shy away from trying new approaches; he was just
as passionate and focused as I was on improving my reality.
Today, in partnership with my doctor, I feel more in control of my GPP
and prepared to handle challenges that may arise. By sharing my story,
I want to provide hope for others – find a doctor who truly feels like a
teacher, someone who will walk this path hand in hand with you and
champion your needs. You deserve it.
Kanya, 36 years old
Kanya has been living with GPP since the age of three.
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Sustainability statement
In 2025, LEO Pharma delivered another year of
strong sales growth and more than doubled ad-
justed EBITDA, supporting a return to positive net
profit and free cash flow. The addition of Spevigo®
to the portfolio, alongside the ongoing global roll-
out of Anzupgo®, has further strengthened LEO
Pharma’s growth potential going into 2026.
Income statement
Revenue
Revenue increased by 8% to DKK 13,499 million
in 2025. This reflected organic growth of 9% and a
one-percentage-point inorganic contribution from
the consolidation of revenues from Spevigo® since
September 30, 2025, resulting in revenue growth
of 10% at constant exchange rates (CER). Exchange
rate developments had a 2-percentage-point neg-
ative effect on reported revenue growth, due to the
appreciation of the DKK versus the USD, CAD and
CNY, among others.
Financial review
& outlook
In 2025, LEO Pharma delivered strong operational
performance, fueled by innovation‑driven growth and
financial discipline supporting significantly improved
profitability.
Revenue by product category
Dermatology
Revenue grew by 10% to DKK 10,991 million in
2025, reflecting growth of 12% at CER, including
organic growth of 10% driven by strong perfor-
mance in the strategic dermatology brands port-
folio, in addition to steady growth from the estab-
lished dermatology brands portfolio.
Strategic dermatology brands revenue grew by 48%
(CER) in 2025, reflecting organic growth of 40%
and an 8-percentage-point inorganic contribution
from the addition of Spevigo® to the portfolio in the
final quarter of the year. Among the three strategic
dermatology brands, Adtralza®/Adbry® remained
the main driver of growth in 2025, led by increased
uptake in the U.S., Japan and several other markets.
Additionally, Anzupgo® made an increasing contri-
bution to growth over the course of the year, par-
ticularly following the launch of the product in the
U.S. in September 2025.
Beyond Adtralza®/Adbry®, Anzupgo®, and Spevigo®,
the established dermatology brands portfolio
delivered combined revenue growth of 2% (CER)
in 2025. Growth was broad-based, with all three
regions contributing, even as continued weak
demand in China detracted from overall growth
for the year. Within the established dermatology
brands portfolio, growth was led by the Fucidin®
range, Skinoren® and Protopic®, among several
other brands also contributing to growth.
Critical Care
Revenue declined by 1% (CER) compared to 2024,
due to a reversal of prior-year sales discounts
that had a significant positive impact on reported
revenues for Critical Care in 2024. Excluding this
discount reversal, which had no impact on report-
ed revenues in 2025, Critical Care revenues grew
by 2%, driven by Germany, the UK, Canada, and
several distributor markets. For 2025, Critical Care
revenues were entirely driven by thrombosis prod-
ucts ahead of the launch of Loqtorzi® in January
2026.
Other
Revenue from contract manufacturing of divested
products amounted to DKK 228 million in 2025, up
from DKK 141 million in 2024, reflecting adjusted
contracting terms.
Revenue by region
Geographically, North America was the fast-
est-growing region in 2025, with revenue increas-
ing 35% (CER) compared to 2024. Continued
strong growth for Adbry® in the U.S. was the main
driver of the regional sales increase in 2025. The
addition of Spevigo® to the portfolio on 1 October
2025 and the launch of Anzupgo® in the U.S.
and Canada during the second half of 2025 also
contributed significantly to the increase. In addi-
tion, revenue growth was positively impacted by
gross-to-net revenue adjustments related to prior
periods.
In Europe, revenue increased by 3% (CER), driven
by Italy, Poland and Germany. Across the region,
revenue growth was driven by Anzupgo® and Ad-
tralza®. The addition of Spevigo® to the portfolio
also made a small positive contribution, while
revenues in the region for the rest of the portfolio
were in line with 2024.
The Rest of World region delivered revenue growth
of 9% (CER) in 2025, driven by Japan, Saudi Arabia
and Korea, as well as broad-based growth across
distributor markets, while China significantly
reduced the regional growth rate due to challeng-
ing market conditions. Outside of China, regional
growth in 2025 was in the double digits, led by
strong growth across the established dermatology
brands portfolio, along with solid growth for Ad-
tralza® and the Critical Care portfolio.
Gross profit
Gross profit increased by 10% to DKK 8,240 million
in 2025, resulting in a gross margin of 61%, up one
percentage point from 2024. The margin expansion
was driven by increased volumes and a favorable
sales mix from the faster growth of the strategic
brands portfolio, partially offset by non-recurring
Management's review 28LEO Pharma Annual Report 2025 Highlights
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Sustainability statement
items related to the planned closing of a manufac-
turing line.
Operating expenses (OPEX)
In 2025, OPEX amounted to DKK 7,702 million,
excluding other operating income and expenses,
representing an 11% reduction from the previous
year, driven by restructuring initiatives implement-
ed in 2024. The OPEX cost ratio for 2025 declined
to 57%, compared to 70% in 2024, reflecting
savings from efficiency initiatives implemented in
2024, the timing of clinical trial activities and in-
creased revenues.
Sales and distribution costs
Sales and distribution costs increased by 1% in
2025 to DKK 4,956 million, corresponding to 37%
of revenue compared to 40% in 2024. Higher
sales drove the improvement in cost efficiency.
Savings from restructuring initiatives implemented
in 2024 were re-invested in the ongoing launch of
Anzupgo®, including a significant expansion of LEO
Pharma’s U.S. sales force during the second half of
2025, and in supporting the addition of Spevigo® to
the portfolio.
Research and development costs
Research and development (R&D) costs amount-
ed to DKK 1,396 million in 2025, a reduction of
DKK 874 million compared to 2024. The decrease
reflected savings from restructuring initiatives
implemented in 2024 and the transfer of cost
responsibility for the oral STAT6 program to Gilead
Sciences. R&D costs in 2025 included impairment
charges of DKK 11 million, compared to DKK 209
million in 2024. Additionally, R&D costs in 2025
benefited from the timing of clinical trial activities.
Administrative costs
Administrative costs for 2025 amounted to DKK
1,350 million, a reduction of DKK 132 million com-
pared to 2024, driven by savings from restructuring
initiatives implemented in 2024. As a percentage
of revenue, administrative costs declined to 10% in
2025, down from 12% in 2024.
Other operating income, net
Other operating income of DKK 1,741 million in
2025 was primarily driven by the USD 250 million
upfront payment received from Gilead Sciences in
January, relating to the strategic partnership for the
STAT6 program, partially offset by transaction-re-
lated costs.
Adjusted EBITDA
Operating profit before depreciation and amor-
tization, excluding non-recurring items (adjusted
EBITDA), amounted to DKK 2,107 million in 2025,
up 135% compared to 2024. This represents a
9-percentage-point improvement in the adjust-
ed EBITDA margin, reaching 16% for 2025. The
margin improvement was driven by sales growth,
an improved gross margin and reduced operating
expenses.
Non-recurring items
Non-recurring items excluded from adjusted
EBITDA amounted to income of DKK 1,644 million
in 2025, reflecting the upfront payment received
from Gilead Sciences, net of transaction costs and
other non-recurring items. In 2024, non-recurring
items constituted an expense of DKK 295 million.
Depreciation and amortization
Depreciation and amortization for 2025 totaled
DKK 1,472 million, equivalent to 11% of revenue,
compared to 14% in 2024. This included net im-
pairments of DKK 49 million, compared to DKK 246
million in 2024.
EBIT
The operating profit (EBIT) for 2025 improved by
DKK 3,422 million compared to 2024, reaching
DKK 2,279 million, including non-recurring items.
Excluding non-recurring items, the underlying
operating profit increased by DKK 1,483 million,
driven by revenue growth, an improved gross
margin and reduced operating expenses resulting
from restructuring initiatives implemented in 2024.
Net financials
Financial items amounted to a net expense of DKK
566 million for 2025, compared to DKK 814 million
in 2024. The decrease was mainly due to reduced
net interest expenses, driven by lower interest
rates and declining net interest-bearing debt. Ad-
ditionally, financial items benefited from gains on
currency hedging contracts.
Income tax
Income tax for 2025 was a net income of DKK 776
million, compared to DKK 181 million in 2024. This
corresponded to a negative effective tax rate of
(45)% in 2025, compared to 9% in 2024.
The tax income was primarily driven by a DKK
1,043 million positive valuation allowance related
to the deferred tax asset, which includes the re-
valuation of the deferred tax asset and other cur-
rent-year changes in LEO Pharma A/S. The revalu-
ation reflects an increased expectation of taxable
income in the coming years. In addition, prior-year
adjustments amounted to DKK 113 million, result-
ing from the recognition of deferred tax assets in
affiliates. Excluding the revaluations and prior-year
adjustments, the effective tax rate for 2025 was
22%.
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Sustainability statement
Net profit
Net profit amounted to DKK 2,489 million in 2025,
up DKK 4,265 million compared to 2024. The
increase reflected improved underlying operating
profitability, reduced interest expenses, the upfront
payment related to the STAT6 partnership, and a
favorable impact from the revaluation of the de-
ferred tax asset.
Cash flow statement
Cash flow from operating activities
Operating activities generated a net cash inflow
of DKK 1,255 million in 2025, driven primarily by
the positive operating result, partially offset by
changes in working capital. This reflected an in-
crease in trade receivables due to increased sales
and a decrease in trade payables impacted by
timing, including significant one-off payments for
product supply purchases made in 2024.
Cash flow from operating activities excludes the
gain on the sale of assets related to the USD 250
million upfront payment received from Gilead
Sciences. Compared to 2024, cash flow from oper-
ating activities improved by DKK 990 million, driven
by the improved operating result and a decrease in
paid net interest and taxes, partly offset by move-
ments in working capital.
Cash flow from investing activities
Investing activities generated a net cash inflow of
DKK 620 million in 2025 (2024: outflow of DKK 317
million), including net proceeds from M&A-related
activities of DKK 935 million. These net proceeds
were driven by the USD 250 million upfront
payment received from Gilead Sciences, the EUR
90 million upfront payment made to Boehringer
Ingelheim, the EUR 15 million upfront payment
made to Junshi Biosciences and related transac-
tion costs.
Free cash flow
As a result, free cash flow increased from a net
outflow of DKK 52 million in 2024 to a net inflow of
DKK 1,875 million in 2025. Excluding net proceeds
of DKK 935 million from M&A-related activities,
free cash flow amounted to a net inflow of DKK 940
million in 2025, mainly reflecting higher cash flow
from operating activities.
Balance sheet
As of December 31, 2025, total assets amounted
to DKK 20,445 million, up from DKK 20,151 million
as of December 31, 2024.
The increase was mainly due to a net increase in
non-current assets, partly offset by a net decrease
in current assets.
Non-current assets
Non-current assets as of December 31, 2025
amounted to DKK 12,162 million, representing
a DKK 685 million increase since December 31,
2024, reflecting the increase in deferred tax assets
and the acquisition of Spevigo®, offset by ordinary
amortization of intangible assets.
Net working capital
Net working capital stood at DKK 3,991 million as
of December 31, 2025, up from DKK 3,833 million
as of December 31, 2024. The increase in net
working capital was the result of higher trade re-
ceivables and a decrease in trade payables, partly
offset by a decrease in inventories.
NIBD and available liquidity
Net interest-bearing debt (NIBD) was DKK 9,358
million as of December 31, 2025, compared to DKK
11,115 million as of December 31, 2024. The lev-
erage ratio, calculated as NIBD divided by adjusted
EBITDA, stood at 4.4x as of December 31, 2025,
compared to 12.4x as of December 31, 2024.
The reduction in net interest-bearing debt was
driven by free cash flow generated in 2025, which
enabled the repayment of loans and other debt to
credit institutions.
Available liquidity, in the form of cash holdings and
unused credit facilities, increased to DKK 5,768
million as of December 31, 2025, compared to DKK
4,147 million as of December 31, 2024.
Equity
Equity stood at DKK 5,262 million at the end of
2025, up from DKK 2,704 million as of December
31, 2024. The increase of DKK 2,558 million was
primarily due to the net profit for the period of DKK
2,489 million. Other movements included other
comprehensive income of DKK 27 million and an
increase related to share-based payments.
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Sustainability statement
Outlook
Follow-up on 2025 outlook
The financial performance in 2025 was in line with
the most recent outlook, which was updated in
November following the publication of the 9M 2025
results to reflect the consolidation of Spevigo®
in the final quarter of the year. Revenue growth
of 10% (CER) matched the high end of the most
recent outlook of 8-10%. The adjusted EBITDA
margin of 16% was in line with the most recent
outlook of 15-17%.
Compared to the initial outlook provided in the
2024 Annual Report, which anticipated organic
revenue growth of 6-9% and an adjusted EBITDA
margin of 15-18%, actual 2025 performance was
at the high end of both ranges when excluding rev-
enues and investments related to Spevigo®.
Additionally, LEO Pharma delivered a positive net
result and positive free cash flow, both significant-
ly improved on 2024 and in line with the outlook
provided in the 2024 Annual Report, which was
maintained throughout the year.
2026 outlook
Revenue growth in 2026 is expected to be 8-11%
(CER). Based on current exchange rates versus
the Danish krone (at February 12, 2026), revenue
growth reported in DKK is expected to be around 2
percentage points lower than at CER.
Growth at constant exchange rates includes ex-
pected organic growth of 5-8% (CER) and a contri-
bution of 3 percentage points from the consolida-
tion of the prior-year sales level for Spevigo in the
first three quarters of the year. Organic growth is
expected to be driven by the ongoing global rollout
of Anzupgo® and increased uptake of Spevigo®,
particularly in the U.S.
The adjusted EBITDA margin is expected to
improve to 16-19% in 2026, up from 16% in 2025,
driven by sales growth and gross margin expan-
sion, partially offset by commercial investments in
support of the global rollout of Anzupgo® and ac-
celeration of Spevigo® as well as increased invest-
ments in R&D. The outlook for the adjusted EBITDA
margin further reflects an adverse impact from
currency developments versus 2025.
Excluding non-recurring items, pre-tax profit is ex-
pected to grow faster than adjusted EBITDA for the
year, reflecting reduced depreciation and amortiza-
tion expenses and lower net interest costs. Report-
ed net profit is expected to be positive for the year.
Free cash flow (excluding M&A) is expected to
exceed DKK 1 billion in 2026 with improved cash
flow from operating activities.
LEO Pharma is closely monitoring risks and uncer-
tainties that could potentially impact the outlook,
including policy initiatives on trade and tariffs. All
U.S. tariffs currently in effect are reflected in the
outlook.
The above outlook is subject to these and other
risks and uncertainties. Additional factors that
could significantly alter the outlook include, but
are not limited to, the impact of potential BD/M&A
activities, changes in the geopolitical and macro-
economic environment, significant demand shifts
and/or price reforms in key markets such as the
U.S. and China, regulatory changes or delays,
supply disruptions, and fluctuations in currencies,
raw materials and other input costs.
Financial guidance 2026
8-11%
Group revenue growth (CER)
16-19%
Adjusted EBITDA margin
Forward-looking statements
This annual report may contain forward-looking statements, related to future operating, financial and sustainability
performance and results, as well as business-related events. Such statements are subject to risks, uncertainties
and assumptions, both general and specific, and actual results may differ materially from those contemplated, ex-
pressed or implied by any forward-looking statement.
Various factors may affect future results, some of which are beyond LEO Pharma’s control, including, but not limited
to: interest rate and exchange rate fluctuations, changes in the geopolitical and macroeconomic environment, signif-
icant demand shifts and/or price reforms in key markets, introduction of competing products, exposure to product li-
ability, supply disruptions, developments in raw material and other input costs, and changes in laws and regulations,
including on reimbursement.
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Sustainability statement
Management's review 33LEO Pharma Annual Report 2025 Highlights
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Financial review & outlook
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Sustainability statement
Management's review 34LEO Pharma Annual Report 2025 Highlights
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Sustainability statement
Chair Vice Chair
Management's review 35LEO Pharma Annual Report 2025 Highlights
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Financial review & outlook
→ Corporate matters
Sustainability statement
Management's review 36LEO Pharma Annual Report 2025 Highlights
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Sustainability statement
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Sustainability statement
Strategic competencies Functional competencies
Board member External innovation Development Go-to-market strategy Product supply Finance Legal & risk management ESG
Jesper Brandgaard ● ● ● ● ●
Paul Navarre ● ● ● ● ●
Lars Green ● ● ● ● ● ●
Peter Haahr ● ● ● ● ●
Liisa Hurme ● ● ● ● ● ●
Mark Levick ● ● ● ● ●
Raj Shah ● ● ● ●
Elisabeth Svanberg ● ● ● ●
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→ Corporate matters
Sustainability statement
See more on our website ↗
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Sustainability statement
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Financial review & outlook
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Sustainability statement
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Financial review & outlook
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Sustainability statement
to address them. In the sustainability statement
Management's review 42LEO Pharma Annual Report 2025 Highlights
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→ Corporate matters
Sustainability statement
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Sustainability statement
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Sustainability statement
General disclosures 48
Sustainability governance 49
Stakeholder engagement 51
Double materiality assessment 52
Transparent reporting is the foundation
of trust between our business and
our stakeholders. It strengthens our
accountability and ensures we can create
a positive impact far beyond the skin.
Philip Eickhoff, Chief Financial Officer
→ General information
Environmental information
Social information
Governance information
Appendix
Highlights
Our business
Financial review & outlook
Corporate matters
→ Sustainability statement
LEO Pharma Annual Report 2025 47Management's review
1
Compliance with the statutory disclosure pursuant to section 99d of the Danish Financial Statements Act is covered under the Corporate matters section.
1
Management's review 48LEO Pharma Annual Report 2025 → General information
Environmental information
Social information
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Appendix
Highlights
Our business
Financial review & outlook
Corporate matters
→ Sustainability statement
Management's review 49LEO Pharma Annual Report 2025 → General information
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Appendix
Highlights
Our business
Financial review & outlook
Corporate matters
→ Sustainability statement
Management's review 50LEO Pharma Annual Report 2025 → General information
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Highlights
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→ Sustainability statement
Management's review 51LEO Pharma Annual Report 2025 → General information
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Highlights
Our business
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→ Sustainability statement
Management's review 52LEO Pharma Annual Report 2025 → General information
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Highlights
Our business
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→ Sustainability statement
Management's review 53LEO Pharma Annual Report 2025 → General information
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Highlights
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→ Sustainability statement
Management's review 54LEO Pharma Annual Report 2025 → General information
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Highlights
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Financial review & outlook
Corporate matters
→ Sustainability statement
Climate change 56
Pollution 63
Water 66
Waste 67
EU Taxonomy 69
Management's review 55LEO Pharma Annual Report 2025 Highlights
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Financial review & outlook
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→ Sustainability statement
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→ Environmental information
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Appendix
Management's review 56LEO Pharma Annual Report 2025 Highlights
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→ Environmental information
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Appendix
1,000 tCO₂e
Management's review 57LEO Pharma Annual Report 2025 Highlights
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Appendix
* Limited assurance is provided for the 2025 period.
Management's review 58LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
General information
→ Environmental information
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Appendix
* Limited assurance is provided for the 2025 period.
Management's review 59LEO Pharma Annual Report 2025 Highlights
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Financial review & outlook
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→ Sustainability statement
General information
→ Environmental information
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Appendix
Accounting policies
Management's review 60LEO Pharma Annual Report 2025 Highlights
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Appendix
Management's review 61LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
General information
→ Environmental information
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Appendix
Accounting policies
Management's review 62LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
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→ Environmental information
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Appendix
Management's review 63LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
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→ Environmental information
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Appendix
Accounting policies
* Limited assurance is provided for the 2025 period.
Management's review 64LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
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→ Environmental information
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Appendix
Accounting policies
Management's review 65LEO Pharma Annual Report 2025 Highlights
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→ Environmental information
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Accounting policies
* Limited assurance is provided for the 2025 period.
Management's review 66LEO Pharma Annual Report 2025 Highlights
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Environmental information
* Limited assurance is provided for the 2025 period.
Management's review 67LEO Pharma Annual Report 2025 Highlights
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→ Environmental information
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Appendix
Accounting policies
Management's review 68LEO Pharma Annual Report 2025 Highlights
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Management's review 69LEO Pharma Annual Report 2025 Highlights
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Accounting policies
* Limited assurance is provided for the 2025 period.
Management's review 70LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
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Appendix
2025 highlights
Thousand of units donated
92+
Adjusted gender pay gap
1.6%
Patients 72
Own workforce 75
Workers in the value chain 81
Management's review 71LEO Pharma Annual Report 2025 Highlights
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→ Social information
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Appendix
Management's review 72LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
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→ Social information
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Appendix
Management's review 73LEO Pharma Annual Report 2025 Highlights
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Financial review & outlook
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→ Sustainability statement
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→ Social information
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Appendix
* Limited assurance is provided for the 2025 period.
Management's review 74LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
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→ Social information
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Appendix
Management's review 75LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
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Environmental information
→ Social information
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Appendix
Accounting policies
* Limited assurance is provided for the 2025 period.
Management's review 76LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
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→ Social information
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Appendix
* Limited assurance is provided for the 2025 period.
1
We adhere to the guidance from the Danish Business Authority on target figures for the gender composition of managers.
Management's review 77LEO Pharma Annual Report 2025 Highlights
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Appendix
Accounting policies
* Limited assurance is provided for the 2025 period.
Management's review 78LEO Pharma Annual Report 2025 Highlights
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Financial review & outlook
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→ Sustainability statement
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Environmental information
→ Social information
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Appendix
Accounting policies
Management's review 79LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
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Environmental information
→ Social information
Governance information
Appendix
Accounting policies
Accounting policies
* Limited assurance is provided for the 2025 period.
Management's review 80LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
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→ Social information
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Appendix
Social information
Management's review 81LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
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→ Social information
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Appendix
Management's review 82LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
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→ Social information
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Appendix
Management's review 83LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
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→ Governance information
Appendix
Management's review 84LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
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→ Governance information
Appendix
Management's review 85LEO Pharma Annual Report 2025 Highlights
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Financial review & outlook
Corporate matters
→ Sustainability statement
General information
Environmental information
Social information
→ Governance information
Appendix
Accounting policies
Accounting policies
Management's review 86LEO Pharma Annual Report 2025 Highlights
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Financial review & outlook
Corporate matters
→ Sustainability statement
General information
Environmental information
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→ Governance information
Appendix
1
Please refer to Composition of the Board of Directors table, page 35.
2
Please refer to Composition of the Global Leadership Team table, page 39.
Accounting policies
Management's review 87LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
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→ Governance information
Appendix
Management's review 89LEO Pharma Annual Report 2025 Highlights
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→ Sustainability statement
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Environmental information
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Governance information
→ Appendix
Consolidated
financial
statements
Income statement 91
Statement of comprehensive income 91
Balance sheet 92
Statement of changes in equity 93
Cash flow statement 94
Notes 95
90LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Income statement
January 1 - December 31
Consolidated financial statements
(DKK million) Note 2025 2024
Revenue 2.1 13,499 12,453
Cost of sales 2.2, 3.1, 3.2, 4.2 (5,259 ) (4,935 )
Gross profit 8,240 7,518
Sales and distribution costs 2.2, 3.1, 3.2, 3.3 (4,956 ) (4,922 )
Research and development costs 2.2, 3.1, 3.2 (1,396 ) (2,270 )
Administrative costs 2.2, 3.1, 3.2 (1,350 ) (1,482 )
Other operating income, net 2.3 1,741 13
Operating profit/(loss) (EBIT) 2,279 (1,143 )
Financial income 5.1 122 132
Financial expenses 5.1 (688 ) (946 )
Profit/(loss) before tax 1,713 (1,957 )
Income tax 2.4 776 181
Net profit/(loss) 2,489 (1,776 )
(DKK million) Note 2025 2024
Net profit/(loss) 2,489 (1,776 )
Other comprehensive income
Remeasurement of defined benefit plans 3.4 (12 ) 27
Tax 2.4 (5 ) (4 )
Items that will not be reclassified subsequently to
the income statement (17 ) 23
Foreign exchange adjustments, subsidiaries (28 ) (31 )
Fair value adjustment of cash flow hedges 5.3 128 (117 )
Cash flow hedges reclassified to financial expenses 5.3 (36 ) (5 )
Tax 2.4 (20 ) 27
Items that may be reclassified subsequently to
the income statement 44 (126 )
Total other comprehensive income/(loss) after tax 27 (103 )
Total comprehensive income/(loss) 2,516 (1,879 )
Statement of comprehensive income
January 1 - December 31
91LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Balance sheet
at December 31
Consolidated financial statements
(DKK million) Note 2025 2024
Assets
Goodwill 3.1 192 192
Intangible assets 3.1 4,548 4,750
Property, plant and equipment 3.2 4,367 4,445
Right-of-use assets 3.3 212 208
Deferred tax assets 2.4 2,491 1,482
Pensions 3.4 239 206
Other financial assets 113 194
Non-current assets 12,162 11,477
Inventories 4.2 4,050 4,973
Trade receivables 4.1 3,041 2,368
Tax receivables 337 553
Other receivables 620 553
Cash and cash equivalents 5.2 235 227
Current assets 8,283 8,674
Assets 20,445 20,151
(DKK million) Note 2025 2024
Equity and liabilities
Share capital 384 383
Reserves (326 ) (370 )
Retained earnings 5,204 2,691
Equity 5.5 5,262 2,704
Loans and credit institutions 5.2, 5.4 8,470 10,414
Deferred tax liabilities 2.4 44 37
Pensions 3.4 61 75
Provisions 4.4 295 307
Lease liabilities 3.3 168 164
Tax payables 32 65
Other non-current liabilities 5.4 285 464
Non-current liabilities 9,355 11,526
Loans and credit institutions 5.2, 5.4 889 502
Trade payables 1,017 1,440
Provisions 4.4 980 1,164
Lease liabilities 3.3 66 82
Tax payables 173 112
Other payables 4.3 2,703 2,621
Current liabilities 5,828 5,921
Liabilities 15,183 17,447
Equity and liabilities 20,445 20,151
92LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
2025 2024
Reserves Reserves
(DKK million) Note
Share
capital
Currency
translation
Cash flow
hedges
Retained
earnings Total
Share
capital
Currency
translation
Cash flow
hedges
Retained
earnings Total
Equity at January 1 383 (295 ) (75 ) 2,691 2,704 383 (264 ) 20 4,386 4,525
Comprehensive income
Net profit/(loss) - - - 2,489 2,489 - - - (1,776 ) (1,776 )
Remeasurement of defined benefit plans - - - (12 ) (12 ) - - - 27 27
Adjustment of cash flow hedges - - 92 - 92 - - (122 ) - (122 )
Foreign exchange adjustments, subsidiaries - (28 ) - - (28 ) - (31 ) - - (31 )
Tax on other comprehensive income - - (20 ) (5 ) (25 ) - - 27 (4 ) 23
Other comprehensive income/(loss) - (28 ) 72 (17 ) 27 - (31 ) (95 ) 23 (103 )
Total comprehensive income/(loss) - (28 ) 72 2,472 2,516 - (31 ) (95 ) (1,753 ) (1,879 )
Transactions with owners
Capital increase 1 - - (1 ) 0 0 - - 29 29
Purchase of treasury shares 5.5 - - - (7 ) (7 ) - - (9 ) (9 )
Sale of treasury shares - - - 4 4 - - - 0 0
Share-based payment 6.2 - - - 45 45 - - - 38 38
Total transactions with owners 1 - - 41 42 - - - 58 58
Equity at December 31 384 (323 ) (3 ) 5,204 5,262 383 (295 ) (75 ) 2,691 2,704
Statement of changes in equity
January 1 - December 31
Consolidated financial statements
93LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
-
Cash flow statement
January 1 - December 31
Consolidated financial statements
(DKK million) Note 2025 2024
Operating profit/(loss) 2,279 (1,143 )
Adjustment for depreciation, amortization and impairment 3.1, 3.2, 3.3 1,472 1,742
Adjustment for (gain)/loss on sale of non-current assets (1,739 ) (3 )
Adjustment for other non-cash operating items 6.5 (10 ) 322
Changes in working capital 6.5 (150 ) 474
Interest etc., received 24 91
Interest etc., paid (597 ) (857 )
Income tax, paid 2.4 (24 ) (361 )
Cash flow from operating activities 1,255 265
Investments in intangible assets 3.1 (870 ) (61 )
Investments in property, plant and equipment 3.2 (256 ) (259 )
Proceeds from sale of intangible assets 1,739 -
Proceeds from sale of property, plant and equipment 8 3
Investments in other securities (1 ) -
Cash flow from investing activities 620 (317 )
Cash flows from operating and investing activities (free cash flow) 1,875 (52 )
(DKK million) Note 2025 2024
Proceeds from loans 5.2 950 1,170
Repayment of loans 5.2 (2,910 ) (1,160 )
Overdraft facilities 5.2 387 220
Other financing arrangements (209 ) (61 )
Proceeds from issue of shares 5.5 - 29
Purchase of treasury shares 5.5 (7 ) (9 )
Sale of treasury shares 5.5 4 0
Repayment of lease liabilities 3.3, 5.2 (93 ) (110 )
Cash flow from financing activities (1,878 ) 79
Net cash flow (3 ) 27
Cash and cash equivalents at January 1 227 216
Foreign exchange adjustments 11 (16 )
Cash and cash equivalents at December 31 235 227
94LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
1 Basis of reporting
1.1 Basis of preparation 96
1.2 Accounting policies 97
1.3 Non-IFRS measures 98
2 Operating profit and tax
2.1 Revenue and segment information 99
2.2 Employee costs 100
2.3 Other operating income and expenses 100
2.4 Tax 101
3 Invested capital
3.1 Goodwill and intangible assets 104
3.2 Property, plant and equipment 107
3.3 Leases 108
3.4 Pensions 110
4 Operating assets and liabilities
4.1 Trade receivables 112
4.2 Inventories 113
4.3 Other payables 113
4.4 Provisions 114
5 Capital structure and financing
5.1 Financial income and expenses 115
5.2 Financial risks 115
5.3 Derivative financial instruments 119
5.4 Financial assets and liabilities by category 121
5.5 Equity 122
6 Other disclosures
6.1 Management remuneration 123
6.2 Share-based payment 124
6.3 Guarantees, contingencies and commitments 126
6.4 Fees to statutory auditors 126
6.5 Other cash flow specifications 126
6.6 Related party transactions 127
6.7 Events after the balance sheet date 127
6.8 Company overview 128
Notes
Consolidated financial statements
95LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 1.1 Basis of preparation
Section 1 Basis of reporting
The consolidated financial statements comprise the
Parent Company and its subsidiaries (together referred to
as the "Group" or "LEO Pharma").
The consolidated financial statements have been prepared
in accordance with IFRS Accounting Standards (IFRS) as
adopted by the EU, and the additional requirements of the
Danish Financial Statements Act for Class C (large) compa-
nies.
The consolidated financial statements are presented in
Danish kroner (DKK), which is also the functional currency
of the Parent Company. The presentation is in million,
unless otherwise stated.
Global market and climate uncertainties
Management continuously monitors the overall geopolitical
environment, supply chain conditions and macroeconomic
indicators, including inflation rates, interest rate devel-
opments and foreign exchange movements, which could
influence LEO Pharma’s financial performance. In addition,
developments in global trade policy, such as changes in
import/export regulations, imposition or removal of tariffs,
and regional trade agreements, are assessed for potential
impact on the Group's procurement costs and market
access. The Group also evaluates the potential implications
of climate-related events and evolving environmental reg-
ulations for operations and supply chains. Consistent with
the 2025 statements, Management confirms that, to date,
these global market and climate uncertainties have not
had a significant adverse effect on LEO Pharma’s activities.
LEO Pharma remains vigilant and proactive in identifying,
assessing and mitigating such risks as part of the Group's
ongoing commitment to sustainable growth and value cre-
ation.
Application of materiality
In the preparation of the consolidated financial state-
ments, LEO Pharma aims to focus on information that is
material and relevant to the users of the consolidated
financial statements. The consolidated financial state-
ments are the result of aggregating large numbers of
transactions into classes of similar items, according to
their nature or function. If a line item is not individually
material, it is aggregated with other items of a similar
nature in the consolidated financial statements or in the
notes.
Key accounting estimates and judgments
The preparation of the consolidated financial statements
requires Management to apply accounting policies involv-
ing judgments, estimates and assumptions that impact
the reported amounts of assets, liabilities, income and
expenses, and related disclosures, and affect the appli-
cation of the accounting policies. Judgments represent
decisions made in applying accounting policies, while
estimates involve measurement uncertainties requiring
assumptions about future events. Estimates and under-
lying assumptions are reviewed regularly and updated as
necessary; changes are recognized prospectively in the
current and future periods.
The areas described in the following table represent the
key judgments and sources of estimation uncertainty that
have the most significant effect on amounts recognized in
the consolidated financial statements:
Note Key accounting estimates and judgments
Estimate/
judgment Potential impact
2.4 Tax Valuation of deferred tax assets
Recoverability of deferred tax assets
Estimate
Judgment
High
3.1 Goodwill and
intangible assets
Useful lives and valuation of intangible assets
Impairment testing of intangible assets
Estimate
Judgment
High
4.2 Inventories Cost of inventories and write-downs for obsolete,
damaged, unsalable or nearly expired items
Estimate Medium
4.4 Provisions Estimated sales deductions (mainly in the US market) Estimate Medium
Key accounting estimates
Key accounting estimates are derived from quanti-
tative and qualitative factors that may significantly
affect the measurement of assets and liabilities in
the reporting period.
Such estimates are based on historical experience
and assumptions that Management considers
reasonable under the current circumstances.
Actual outcomes may differ from these estimates
as conditions change or more precise information
becomes available.
Example: Estimating the useful life of intangible
assets requires consideration of contractual terms,
expected market conditions, technological devel-
opments and other economic factors.
Key accounting judgments
Key accounting judgments are decisions made by
Management in applying the Group’s accounting
policies that can significantly affect the amounts
recognized in the consolidated financial state-
ments.
Judgments are typically made based on the guid-
ance in applicable IFRS standards, supported by
the best information available at the time.
Example: Determining if there are any indications
of impairment for intangible assets requires judg-
ment in evaluating market conditions, technologi-
cal developments and regulatory changes.
96LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 1.2 Accounting policies
Section 1 Basis of reporting
Material accounting policies
LEO Pharma’s material accounting policies are described
in the individual notes to the consolidated financial state-
ments.
Consolidation
The consolidated financial statements include the finan-
cial statements of the Parent Company, LEO Pharma A/S,
and all subsidiaries over which LEO Pharma A/S exercises
control at December 31, 2025. Control exists when the
Group is exposed to, or has rights to, variable returns from
its involvement with the subsidiary and has the ability to
affect those returns through its power over the entity. The
consolidated financial statements are prepared by com-
bining the financial statements of the Parent Company
and its subsidiaries line-by-line, followed by elimination of
intercompany transactions, balances, shareholdings and
unrealized profits arising from intragroup transactions.
The financial statements of all subsidiaries are prepared
in accordance with the Group’s accounting policies.
Foreign currency translation
Each company in the Group measures its transactions
in its functional currency, defined as the currency of its
primary economic environment. Transactions in foreign
currencies are translated into the functional currency at
the exchange rates prevailing on the transaction date.
Receivables, payables and other monetary assets and li-
abilities denominated in foreign currencies are translated
into the functional currency at the exchange rate on the
reporting date, with exchange differences recognized in
financial income or financial expenses in the consolidated
income statement.
In the consolidation of foreign subsidiaries with a func-
tional currency other than DKK, income and expenses are
translated into DKK at the exchange rates on the transac-
tion date. The previous month-end exchange rate is used
as the exchange rate at the transaction date to the extent
that this does not significantly distort the presentation
of the underlying transactions. Assets and liabilities are
translated at the closing rate at the reporting date. Ex-
change differences arising from the translation of opening
equity balances and income statements at different rates
are recognized in other comprehensive income. Likewise,
adjustments to balances with foreign entities that are
considered part of the net investment in the subsidiary
are recognized within a separate translation reserve in
other comprehensive income in the consolidated financial
statements.
Cash flow statement
The consolidated cash flow statement is prepared using
the indirect method and is based on operating profit or
loss. The statement shows cash flows from operating,
investing and financing activities as well as cash and cash
equivalents at the beginning and end of the year.
Cash flows from operating activities are calculated by
adjusting operating profit or loss for non-cash items such
as depreciation, amortization and impairment losses,
together with changes in working capital, which comprises
inventories, trade receivables, trade payables and other
operating items.
Cash flows from investing activities comprise payments
related to the acquisition and disposal of intangible assets
and property, plant and equipment, as well as net invest-
ments in securities.
Cash flows from financing activities comprise the raising
and repayment of current and non- current debt and trans-
actions with shareholders. Cash and cash equivalents
consist solely of cash at bank and in hand.
Implementation of new and amended standards
and interpretations
Effective January 1, 2025, LEO Pharma implemented all
new or amended accounting standards and interpreta-
tions, issued by the International Accounting Standards
Board (IASB) and endorsed by the EU. Amendments to
IAS 21 Lack of Exchangeability concerning how to assess
whether a currency is exchangable, and how to determine
the exchange rate when it is not; had no material impact
on the disclosures or the amounts reported in the consoli-
dated financial statements.
New and revised IFRS issued, but not yet effective,
that are relevant to the Group
IASB has issued new or amended accounting standards
and interpretations that have not yet become effective:
In 2024, the IASB issued IFRS 18 Presentation and
Disclosure in Financial Statements, which will replace
IAS 1 Presentation of Financial Statements and amend
IAS 7 Statement of Cash Flows for annual periods begin-
ning on or after January 1, 2027. The standard introduces
a revised structure for the income statement, requiring
presentation of income and expenses separate from op-
erating activities, investing activities and financing activi-
ties, as well as disclosure requirements for management
defined performance measures and enhanced guidance
on aggregation and disaggregation of items in the finan-
cial statements.
LEO Pharma expects to adopt the IFRS standards and in-
terpretations when they become mandatory.
LEO Pharma is currently assessing the full impact of
IFRS 18 on the presentation of the primary consolidated
financial statements and related notes as well as disclo-
sure of management defined performance measures. The
preliminary assessment is that the adoption of IFRS 18 is
expected to change the structure and presentation of the
income statement and to introduce additional disclosure
requirements. In line with IFRS 18 requirements, goodwill
is presented as a separate line item in the balance sheet
in the 2025 Annual Report. IFRS 18 does not change LEO
Pharma's accounting policies on recognition and meas-
urement and accordingly is not expected to have any
impact on the Group's consolidated equity or net results.
97LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 1.3 Non-IFRS measures
Section 1 Basis of reporting
The Financial review & outlook section include financial
performance measures that are not defined according
to IFRS Accounting Standards. These measures are con-
sidered to provide relevant information to stakeholders.
Since other companies might calculate these differently
from LEO Pharma, they may not be comparable to the
measures calculated by other companies. These financial
measures should therefore not be considered a replace-
ment for performance measures as defined under IFRS,
but rather as supplementary information.
The following non-IFRS measures are presented in the
Annual Report, and "Reported" refers to the amounts pre-
sented in the income statement in accordance with IFRS
Accounting Standards.
Revenue growth at constant exchange rates (CER)
(%) and organic growth
Revenue growth at constant exchange rates (CER)
excludes the effect of changes in exchange rates when
comparing revenue for the current year with revenue in the
prior year. The revenue for the current year is recalculated
using the average exchange rates in the prior year and then
compared with the reported revenue in the prior year.
Organic revenue growth is a measure of growth ex-
cluding the impact of acquisitions and divestments and
the effect of change in exchange rates when comparing
revenue for the current year with the revenue in the prior
year. Revenue growth is derived from the existing busi-
ness, including pro-forma sales from acquisitions in the
prior year and excluding revenue from divested business
in the prior year, if any.
(DKK million) 2025 2024
Reported revenue 13,499 12,453
Effect of exchange rates 196 143
Revenue at prior year's exchange rates (calc.) 13,695 12,596
Prior year's reported revenue 12,453 11,392
Revenue growth at constant exchange rates (CER) 10% 11%
Prior year's revenue, incl. proforma M&A 12,574 11,392
Organic revenue growth 9% 11%
(DKK million) 2025 2024
Reported revenue, dermatology (refer to Note 2.1 Revenue and segment information) 10,991 10,008
Effect of exchange rates 190 146
Dermatology revenue at prior year's exchange rates (calc.) 11,181 10,154
Prior year's reported dermatology revenue 10,008 9,039
Dermatology revenue growth at constant exchange rates (CER) 12% 12%
EBITDA and EBITDA margin (%)
EBITDA is the reported operating profit/(loss), adjusted
for depreciation, amortization and impairment, and there-
fore presents the earnings before financial income and ex-
penses, tax, depreciation, amortization and impairment.
EBITDA margin is EBITDA as a percentage of reported
revenue.
(DKK million) 2025 2024
Reported operating profit/(loss) (EBIT) 2,279 (1,143)
Depreciation, amortization and impairment 1,472 1,743
EBITDA 3,751 600
Reported revenue 13,499 12,453
EBITDA margin 28% 5%
Adjusted EBITDA and adjusted EBITDA margin (%)
Adjusted EBITDA is considered to best reflect the Group's
underlying operational profitability, as it excludes the
impact from significant non-recurring items that Man-
agement assesses are not representative of the ordinary
course of the business.
To arrive at adjusted EBITDA, EBITDA is adjusted for sig-
nificant transformation and restructuring costs, capital
transaction costs, M&A including integration costs and
other material non-recurring income or expenses. Adjust-
ed EBITDA margin is adjusted EBITDA as a percentage of
reported revenue.
(DKK million) 2025 2024
EBITDA 3,751 600
Gain from sale of assets (net), "STAT6 Program" (1,739) -
Integration costs, Spevigo® 53 -
Restructuring programs - 274
Other non-recurring items, net 42 21
Adjusted EBITDA 2,107 895
Reported revenue 13,499 12,453
Adjusted EBITDA margin 16% 7%
The above non-recurring items for 2025 are reflected in the consolidated income statement as follows: a gain of DKK 1,739m
recognized under other operating income, net of DKK 54m under cost of sales, DKK 15m under sales and distribution costs,
DKK 12m under research and development costs and DKK 14m under administrative costs.
98LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 2.1 Revenue and segment information
Section 2 Operating profit and tax
LEO Pharma is a global medical dermatology company
advancing innovative treatments for skin health. Head-
quartered in Denmark, the company serves patients
worldwide.
LEO Pharma's Registered Executive Management, as the
Chief Operating Decision Maker, reviews the business
performance and allocates resources to the Group as a
whole, based on internal reporting. As such, LEO Pharma
is considered a single operating segment, and the finan-
cial information presented in these consolidated financial
statements is consistent with the information reviewed by
Management.
In the table below, the geographical regions correspond
to LEO Pharma’s main markets, while the product split
by portfolio reflects the Group’s internal management
perspective.
(DKK million) 2025 2024
Revenue by region
Europe 7,022 6,836
North America 2,897 2,234
Rest of World 3,580 3,383
Total 13,499 12,453
Revenue by portfolio
Dermatology 10,991 10,008
Strategic brands 3,023 2,091
Established brands 7,968 7,9 17
Critical Care 2,280 2,304
Other 228 141
Total 13,499 12,453
Revenue recognized in 2025 includes adjustments arising
from changes in the transaction price of performance
obligations satisfied in previous years. These adjustments
primarily relate to the reversal of provisions for sales de-
ductions and revised estimates of product returns. While
such changes are reflected in reported revenue for the
year, their impact on the Group’s overall revenue is not
significant.
In 2025, the U.S. was the only country where revenue
from external customers based on location exceeded
10% of the Group’s total net revenue, amounting to DKK
2,164m (2024: DKK 1,454m). Revenue from external
customers located in the Group’s country of domicile,
Denmark, amounted to DKK 47m (2024: DKK 48m).
Revenue arising from Japan, Australia, New Zealand,
South Korea, Hong Kong, Singapore and Taiwan is in-
cluded in Rest of World, and represents 7.6% of the total
revenue. During the year, no individual customer contrib-
uted 10% or more to the Group’s total net revenue. The
specification of non-current assets by country of location
is presented below:
(DKK million) 2025 2024
Non-current assets* by country of location
Denmark 7,257 7, 504
Ireland 964 972
Other countries 1,098 1,119
Total 9,319 9,595
* Non-current assets consist of goodwill, intangible assets, property, plant and equipment, and right-of-use assets.
Accounting policies
Revenue comprises sale of goods, primarily from own
production, and to a lesser extent from sales-based
royalties.
Sale of goods
Revenue from sale of goods is recognized when cus-
tomers obtain control of the goods, which is typically
at the time of delivery.
Sales deductions and product returns
Revenue recognized at the time control of goods is
transferred to the customer is reduced for expected
sales deductions and product returns. Such adjust-
ments are estimated based on historical experience,
contractual terms and other relevant factors specific to
the product, customer and market.
Sales deductions may include rebates, chargebacks,
discounts and other sales-related incentives. Estimat-
ed amounts are recognized as a reduction of revenue,
with a corresponding refund liability recorded in pro-
visions or other payables, depending on the nature of
the deduction (please refer to Note 4.4 Provisions).
Product returns are estimated based on past return
patterns and anticipated future activity. Estimated
amounts are recognized as a reduction of revenue, with
a corresponding refund liability recorded in provisions
or other payables, depending on the nature of the ex-
pected return (please refer to Note 4.4 Provisions).
Sales‑based royalties
Sales-based royalties from outlicensed products and
milestone payments are recognized when the sale
occurs.
99LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 2.2 Employee costs Note 2.3 Other operating income and expenses
Section 2 Operating profit and tax
(DKK million) 2025 2024
Wages and salaries 2,827 3,120
Pensions 220 243
Share-based payment 47 44
Social security costs 357 337
Other employee costs 204 210
Total employee costs 3,655 3,954
Of which capitalized as intangible assets (11) (22)
Total employee costs in the income statement 3,644 3,932
Employee costs are included in:
Cost of sales and change in employee costs included in inventories 782 739
Sales and distribution costs 1,870 2,022
Research and development costs 442 607
Administrative costs 550 564
Total employee costs 3,644 3,932
Average number of full-time employees 4,104 4,184
In 2024, an announced restructuring program impacted
the total employee costs by DKK 265m.
Please also refer to Note 6.1 Management remuneration
and Note 6.2 Share-based payment.
(DKK million) 2025 2024
Gain on sale of non-current assets 1,742 5
Other income 2 35
Other operating income 1,744 40
Loss on sale of non-current assets (3) (2)
Other expenses 0 (25)
Other operating expenses (3) (27)
Other operating income, net 1,741 13
Other operating income and expenses comprise items of
a secondary nature to the Group’s primary activities, i.e.
gains and losses on sale of intellectual property rights and
on sale of property, plant and equipment.
Gain on sale of assets includes DKK 1,739m net gain from
sale of assets related to the upfront payment from the
strategic partnership with Gilead Sciences entered into on
January 11, 2025.
100LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 2.4 Tax
Section 2 Operating profit and tax
Income tax for the year
(DKK million) 2025 2024
Current tax (255) (93)
Change in deferred tax 893 364
Prior-year adjustments, current tax (13) (14)
Prior-year adjustments, deferred tax 126 (53)
Total tax income/(expense) for the year 751 204
Tax for the year is included in:
Tax on profit/(loss) for the year 776 181
Tax in other comprehensive income (25) 23
Total tax income/(expense) for the year 751 204
For specification of tax in other comprehensive income,
please refer to the statement of changes in equity.
The Group has recognized an uncertain tax position of
DKK 60m in 2025 (2024: DKK 0m).
LEO Group Tax Policy
LEO Pharma is committed to responsible and transparent
tax practices, ensuring compliance with all applicable
laws and regulations. The Tax Policy guides the approach
to corporate taxes, reflecting a dedication to ethical busi-
ness conduct and sustainable value creation. For more
information, please visit the Tax Policy on LEO Pharma's
website (Link: https://www.leo-pharma.com/who-we-are/
position-and-views ).
The Parent Company is utilizing Denmark's 108% "Super
Deduction" for R&D costs for the fiscal year 2025. This
incentive provides valuable support for the Group's con-
tinued focus on innovation, which remains a key priority
for LEO Pharma. Similarly, R&D tax credits are applied
in other LEO Pharma entities, all in accordance with the
Group's Tax Policy.
Reconciliation of the Group's effective tax rate relative to the Danish corporate income tax rate
2025 2024
DKK million % DKK million %
Profit/(loss) before tax 1,713 (1,957)
Calculated tax, 22% (Danish corporate income tax) (377) 22.0% 430 22.0%
Tax effect of:
Differences in the income tax rates of foreign subsidiaries
compared to the Danish corporate income tax rate 94 (5.5)% 83 4.2%
Non-deductible expenses/non-taxable income
and other permanent differences (116) 6.8% 50 2.5%
Other taxes 6 (0.3)% (3) (0.2)%
Change in deferred tax as a result of change in
income tax rates 13 (0.8)% 7 0.4%
Change in valuation of net deferred tax assets 1,043 (60.9)% (319) (16.3)%
Prior-year tax adjustments 113 (6.6)% (67) (3.4)%
Effective tax/tax rate for the year 776 (45.3)% 181 9.2%
Pillar II
In 2023, the Danish Ministry of Taxation adopted the EU
Minimum Tax Directive (Pillar II) in Danish national legis-
lation, effective January 1, 2024. Under this legislation,
the Group is liable to pay top-up tax for the difference
between its GloBE effective tax rate in each jurisdiction
and the 15% minimum rate. The Group has estimated that
the GloBE effective tax rates exceed 15% in all jurisdic-
tions in which it operates except for Ireland, due to their
low corporate income tax rate. Considering the impact of
specific adjustments in the GloBE income calculation, the
top-up tax provision is estimated to be DKK 30m (2024:
DKK 0m), which has been recognized as non-current tax
payable in the balance sheet. The determination is based
on the consolidated financial statements for 2025.
101LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 2.4 Tax (continued)
Section 2 Operating profit and tax
Deferred tax 2025 2024
(DKK million)
Balance at
January 1
Exchange rate
adjustment
Prior-year
adjustments
Current-year
movements
Balance at
December 31
Balance at
January 1
Exchange rate
adjustment
Prior-year
adjustments
Current-year
movements
Balance at
December 31
Intangible assets 1,462 - (13) (48) 1,401 1,158 0 (7) 311 1,462
Property, plant and equipment 668 - 29 23 720 631 0 (1) 38 668
Inventories 531 (15) 13 (5) 524 592 1 (4) (58) 531
Provisions 225 (1) 81 55 360 200 2 12 11 225
Other items 100 1 (9) (67) 25 59 4 11 26 100
Special tax credits 234 (2) 41 (133) 140 203 - 6 25 234
Tax loss carryforwards 2,616 - (16) 25 2,625 2,312 0 (26) 330 2,616
Valuation allowances on deferred tax assets (4,391) - - 1,043 (3,348) (4,028) - (44) (319) (4,391)
Total temporary differences 1,445 (17) 126 893 2,447 1,127 7 (53) 364 1,445
Deferred tax assets 1,482 (18) 124 903 2,491 1,157 9 (54) 370 1,482
Deferred tax liabilities 37 (1) (2) 10 44 30 2 (1) 6 37
Deferred tax assets/(tax liabilities) 1,445 (17) 126 893 2,447 1,127 7 (53) 364 1,445
In prior years, deferred tax was recognized in jurisdictions
where it was assessed to be material, in line with the
applicable policy at the time. As of 2025, deferred tax will
be recognized across all jurisdictions to align with a more
refined and comprehensive approach.
Deferred tax assets primarily represent tax loss carryfor-
wards (TLCF) and other temporary tax differences across
the Group. A significant portion of the Group’s deferred
tax assets resides with the Parent Company, stemming
equally from accumulated TLCF and other tax assets. The
unused TLCF and the other tax assets related to Parent
Company do not have an expiration date.
As of 31 December 2025, net deferred tax assets totaling
DKK 2,447m (2024: DKK 1,445m) have been recognized,
based on expected utilization of the deferred tax assets in
the near future, which is re-evaluated on a yearly basis.
The stated valuation allowance represents the unrecog-
nized deferred tax assets, which relate solely to Parent
Company and amount to DKK 3,348m (2024: DKK 4,391m)
as of 31 December 2025. The recognized deferred tax
assets in the Parent Company amount to DKK 1,650m
(2024: DKK 746m) and hence the value of the total de-
ferred tax assets in the Parent Company amounts to DKK
4,998m as of 31 December 2025 (2024: DKK 5,137m).
In 2025, the Group achieved a positive net financial result.
This development is the result of a transformation that
LEO has pursued over the last years. A continued positive
development is forecasted for the coming years, driven by
continued revenue growth, supported by recent strategic
product launches, as well as general expectations regard-
ing future operating and taxable profits. As a result, an in-
creased deferred tax asset of DKK 904m was recognized
in the Parent Company.
Management assesses all relevant evidence, both positive
and negative, to determine the recognition of deferred
tax assets. This includes evaluating the likelihood of
generating sufficient future taxable profits based on his-
torical performance, profit forecasts and external factors.
Sensitivity analyses highlight the Group’s forward-looking
growth assumptions as critical, while other inputs are less
sensitive or significant to the recognition of deferred tax
assets. The judgment and key estimates are attributable
to the Parent Company, that holds these assets.
Tax value of unrecognized tax assets
(DKK million) 2025 2024
Tax loss carryforwards 2,625 2,616
Other tax assets 723 1,775
Unrecognized tax assets at December 31 3,348 4,391
102LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 2.4 Tax (continued)
Section 2 Operating profit and tax
Key accounting judgments
Judgment is made concerning the recoverability of
deferred tax assets and whether to recognize deferred
tax assets in relation to tax loss carryforwards.
The Group records uncertain tax positions in accord-
ance with IAS 12 Income Taxes using the 2-step test
whereby (1) LEO Pharma determines whether it is
probable that the tax positions will be accepted by
the relevant taxing authorities, and (2) for those tax
positions that are not probable that a tax authority will
accept in full the position, the Group recognizes uncer-
tain tax position using either the most likely amount or
the expected value, depending on specific facts and
circumstances.
Key accounting estimates
Significant assumptions regarding the valuation of the
recognized deferred tax assets are both the ability to
meet the objectives in the strategy for the next five
years and the return on the investment portfolio within
the joint taxation group. The return on the investment
portfolio is sensitive to general market fluctuations.
Management’s estimate of future income according
to forecasts, strategy and initiatives scheduled for the
coming years forms the basis for estimating the utili-
zation of the deferred tax assets in future periods. A
forecast period of five years is applied to the estimat-
ed utilization of deferred tax assets for LEO Pharma
A/S and the companies under the joint taxation
scheme.
Accounting policies
Income tax
Income tax for the year, which consists of the year’s
current tax, the change in deferred tax and adjust-
ments in respect of previous years, is recognized in the
income statement at the amount that can be attribut-
ed to the profit/(loss) for the year and in other compre-
hensive income at the amount that can be attributed
to items in other comprehensive income.
The change in deferred tax as a result of changed
income tax rates or tax rules is recognized in the
income statement. Interest on tax cases that are
ongoing or have been settled during the year is recog-
nized under financial items in the income statement.
Current tax for the year is calculated on the basis of
the income tax rates in the respective countries and
rules enacted at the balance sheet date. The Parent
Company, the Danish subsidiary and LEO Holding A/S
are jointly taxed.
Deferred tax
Deferred tax is recognized on all temporary differ-
ences between the carrying amounts of assets and
liabilities and their tax bases, except for temporary
differences arising on initial recognition of a transac-
tion that is not a business combination, and where the
temporary difference ascertained at the time of initial
recognition affects neither the financial result nor the
taxable income.
Deferred tax is measured on the basis of the income
tax rates and tax rules substantially enacted in the re-
spective countries at the balance sheet date.
Deferred tax assets, including the tax assets on tax
loss carryforwards, are recognized in the balance
sheet at the value at which the assets are expected to
be utilized.
Deferred tax assets and liabilities are offset if the
Group has a legal right to offset these and intends to
settle these on a net basis, or to realize the assets and
settle the liabilities simultaneously.
103LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 3.1 Goodwill and intangible assets
Section 3 Invested capital
Intellectual property rights
At December 31, 2025, intellectual property rights
comprise the following individually significant intangible
assets:
• Dermatology portfolio (mainly Skinoren®, Advantan®,
Travocort® and Travogen®) at a carrying amount of DKK
2,261m (2024: DKK 2,527m) and with a remaining
useful life of 8.5 years.
• Tralokinumab at a carrying amount of DKK 704m (2024:
DKK 790m) and with a remaining useful life of 8 years.
• Spevigo® at a carrying amount of DKK 670m (2024: N/A)
and with a remaining useful life of 15 years.
During 2025, LEO Pharma completed an asset purchase
transaction with Boehringer Ingelheim and obtained an
exclusive global license to commercialize and advance the
development of Spevigo®. An amount of DKK 682m was
recognized based on the upfront payment and directly
attributable transaction costs. The asset is amortized on
a straight-line basis under sales and distribution costs in
the income statement. Additional contingent milestone
and tiered royalty payments will be recognized when the
relevant conditions are met.
Software
Software comprises purchased and internally developed
software.
Development projects and software in progress
Development projects and software in progress comprise
development projects, DKK 10m (2024: DKK 0m), and
software in progress, DKK 54m (2024: DKK 23m).
2025 2024
(DKK million) Goodwill
Intellectual
property rights Software
Develop ment
projects and
software in
progress Total Goodwill
Intellectual
property rights Software
Develop ment
projects and
software in
progress Total
Cost at January 1 192 14,163 2,534 126 17,0 15 192 14,069 2,885 209 17,355
Exchange rate adjustment - 1 - - 1 - (6) - - (6)
Additions - 826 - 44 870 - - - 158 158
Disposals - - (183) - (183) - - (388) (104) (492)
Transfers - - 3 (3) - - 100 37 (137) -
Cost at December 31 192 14,990 2,354 167 17,703 192 14,163 2,534 126 17,015
Amortization and impairment at January 1 - (10,325) (1,645) (103) (12,073) - (9,568) (1,679) (9) (11,256)
Exchange rate adjustment - (1) - - (1) - 2 - - 2
Amortization - (720) (333) - (1,053) - (748) (350) - (1,098)
Disposals - - 183 - 183 - - 388 104 492
Impairment - - (50) - (50) - (11) (4) (198) (213)
Impairment reversal - 31 - - 31 - - - - -
Amortization and impairment at December 31 - (11,015) (1,845) (103) (12,963) - (10,325) (1,645) (103) (12,073)
Carrying amount at December 31 192 3,975 509 64 4,740 192 3,838 889 23 4,942
104LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 3.1 Goodwill and intangible assets (continued)
Section 3 Invested capital
Impairment testing
Goodwill
LEO Pharma is considered as a single identifiable group
of assets that generates independent cash inflows, as
Management makes decisions and assesses business
performance at consolidated level.
In 2025, the recoverable amount of LEO Pharma as a
single cash-generating unit (CGU) was based on a method
of assessing the fair value less cost of disposal. The fair
value of LEO Pharma is based on the actual valuation of
the enterprise value of LEO Pharma compared with the
carrying amount of equity. Management has not identified
any goodwill impairment at December 31, 2025.
Intellectual property rights and software
When preparing the impairment tests by using the dis-
counted future cash flows to determine the recoverable
amount of an asset, Management consideres the potential
impact of reasonably possible changes in the key assump-
tions applied.
2025: Reversal of impairment of IP rights of DKK 31m,
recognized under sales and distribution costs in the
income statement, relates to the tralokinumab asset,
which was impaired in 2023. The expected future cash
flows have been reassessed to reflect the current market
conditions and changes in Management's expectation for
the strategy.
Impairment of software of DKK 50m mainly relates to
software no longer in use of which DKK 33m was recog-
nized under sales and distribution costs, DKK 11m under
research and development costs and DKK 6m under ad-
ministrative costs in the income statement.
2024: No individually material impairment losses, or re-
versals of previously recognized impairment losses, were
recognized, based on the impairment test.
Development projects and software in progress
The Group performs annual impairment tests on single
internal assets in progress and acquired development
assets that are not yet commercialized. The recoverable
amount of intellectual property rights and development
projects is based on the value in use of the discounted ex-
pected future cash flows. The recoverable amounts of the
specific assets are compared with the carrying amount.
2025: No individually material impairment losses, or re-
versals of previously recognized impairment losses, were
recognized, based on the impairment test.
2024: Impairment losses recognized on development
projects amounted to DKK 198m and primarily related
to discontinuation of the TMB-001 development project
at DKK 104m which was terminated. Other impairment
losses on development projects amounted to DKK 94m
and related to discontinuation of various development
projects.
The impairment losses of DKK 198m were recognized
under research and development costs. No reversals of
impairment losses from prior periods were recognized in
2024.
Research and development costs
In 2025, research and development costs recognized in
the income statement amounted to DKK 1,396m (2024:
DKK 2,270m), including impairment losses of DKK 11m
(2024: DKK 198m).
Specification of amortization
(DKK million) 2025 2024
Cost of sales 10 31
Sales and distribution costs 748 769
Research and development costs 66 55
Administrative costs 229 243
Total 1,053 1,098
Accounting policies
Intellectual property rights and software
Intangible assets acquired separately are initially rec-
ognized at cost. After initial recognition, such assets
are measured at cost less accumulated amortization
and, where applicable, accumulated impairment
losses. Identifiable intangible assets acquired in a
business combination are initially recognized at fair
value at the acquisition date.
Sales milestone payments relating to acquired intangi-
ble assets are recognized as a liability and capitalized
as part of the asset’s cost only when the triggering
event has occurred. The additional cost is amortized
prospectively over the remaining useful life of the
asset, with the expense classified consistently with
the asset’s underlying function (e.g, sales and distri-
bution costs for the Spevigo® license or cost of sales if
linked directly to production rights).
Amortization of acquired or internally developed
intellectual property rights is provided on a straight-
line basis over the expected useful life of the assets
and recognized in sales and distribution costs in the
income statement. Costs relating to the maintenance
of patents etc. are expensed in the income statement
as incurred.
105LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 3.1 Goodwill and intangible assets (continued)
Section 3 Invested capital
Software purchased or internally developed is amor-
tized on a straight-line basis over its expected useful
life. Amortization and any impairment losses are rec-
ognized in the income statement within the relevant
functional expense categories, reflecting the area of
the business that uses the asset (e.g., cost of sales,
sales and distribution costs, research and develop-
ment costs or administrative costs).
The expected useful lives are as follows:
Intellectual property rights 5-15 years
Software 3-10 years
Development projects and software in progress
Acquired or internal development projects and soft-
ware in progress are recognized as intangible assets if
the recognition criteria are met:
• The projects are clearly defined and identifiable.
• The Group intends to use the projects once com-
pleted.
• The future earnings from the projects are expected
to cover the development and administrative costs.
• The cost can be reliably measured.
Regulatory milestone payments related to acquired
clinical intellectual rights are added to the cost of the
asset when it becomes probable that the milestone
will be reached under the cost accumulation method,
provided that the criteria for recognition outlined
above are met.
Research costs are expensed in the income statement.
Consistent with industry practice, internal and subcon-
tracted development costs are expensed as incurred,
due to significant regulatory uncertainties inherent in
developing new products. Once marketing approval
by a regulatory authority is obtained or considered
highly probable, development costs are capitalized as
intangible assets.
Development projects are not amortized, as the assets
are not available for use.
The costs of software in progress include direct sal-
aries, materials and other direct costs attributable to
the development activities.
Impairment testing
Goodwill, development projects and software in pro-
gress are tested for impairment annually or if there are
indications of impairment during the year. Other intan-
gible assets are tested for impairment when an indica-
tion of impairment is identified. If an indication of im-
pairment is identified, the carrying amount is written
down to the recoverable amount, which is the higher of
fair value less costs of disposal and value in use.
Development projects are assessed on an ongoing
basis taking due account of development progress,
expected approvals and commercial utilization.
When assessing value in use, the estimated future
cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks
specific to the asset for which the estimates of future
cash flows have not been adjusted.
Research and development costs
Research and development costs comprise internal
and external costs related to studies, employee costs,
materials, costs for subcontracted development ac-
tivities, depreciation, amortization, impairment losses
and other directly attributable costs.
Accounting policies (continued)
Key accounting judgments
Impairment testing, indicators
Management makes judgments to assess if there are
any indications of impairment. To identify indications
of impairment, Management considers amongst
others the following events:
• Changes in patent and license rights
• Changes in expected future cash inflows to and out-
flows from the Group
• Research and development results
• Technological changes
• Development of competing products
Key accounting estimates
Valuation of intangible assets
To determine the recoverable amount of intangible
assets, the future cash flows are discounted to present
value by applying a discount rate that reflects the risks
associated with the cash flow. The expected future
cash flows are based on budgets and target plans
for the patent period or other applicable period for
marketable products. The budgets and target plans
are based on Management’s expectations of current
market conditions and future growth expectations. Key
factors estimated in the valuation include discount and
growth rates and working capital.
Estimated useful life
The useful life and amortization period are estimated
individually in each case and are initially assessed
when the assets are acquired or brought into use. The
main factors considered are contractual terms that
may limit the useful life, the useful life of other assets
to which the intangible asset may relate and economic
factors. Management assesses intangible assets for
changes in useful life on an annual basis.
106LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 3.2 Property, plant and equipment
Section 3 Invested capital
2025 2024
(DKK million)
Land and
buildings
Plant and
machinery
Other fixtures
and fittings,
tools and
equipment
Assets under
construction Total
Land and
buildings
Plant and
machinery
Other fixtures
and fittings,
tools and
equipment
Assets under
construction Total
Cost at January 1 2,598 3,411 494 2,437 8,940 2,672 3,271 544 2,355 8,842
Exchange rate adjustment (2) 3 (4) - (3) 4 1 2 0 7
Additions 4 6 42 204 256 2 6 14 236 258
Disposals (38) (499) (36) - (573) (85) (11) (71) - (167)
Transfers 700 1,656 97 (2,453) - 5 144 5 (154) -
Cost at December 31 3,262 4,577 593 188 8,620 2,598 3,411 494 2,437 8,940
Depreciation and impairment at January 1 (1,658) (2,454) (383) - (4,495) (1,665) (2,267) (394) - (4,326)
Exchange rate adjustment 2 1 2 - 5 (2) (1) (0) - (3)
Disposals 35 495 36 - 566 85 11 71 - 167
Depreciation (68) (186) (45) - (299) (65) (197) (48) - (310)
Impairment (4) (16) (10) - (30) (11) - (12) - (23)
Depreciation and impairment at December 31 (1,693) (2,160) (400) - (4,253) (1,658) (2,454) (383) - (4,495)
Carrying amount at December 31 1,569 2,417 193 188 4,367 940 957 111 2,437 4,445
Transfers of assets under construction mainly relate to a
new manufacturing facility in Ballerup, Denmark, at a car-
rying amount of DKK 1,909m and expansion of an existing
facility in Ireland at a carrying amount of DKK 456m.
As at December 31, 2025, assets at the Ballerup site were
pledged as collateral for loans. The carrying amount of
these assets was DKK 2,432m (2024: DKK 2,549m).
For capital commitments, please refer to Note 6.3 Guar-
antees, contingencies and commitments.
107LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 3.2 Property, plant and equipment (continued)
Note 3 Invested capital
Specification of depreciation and impairment
(DKK million) 2025 2024
Cost of sales 266 250
Sales and distribution costs 9 23
Research and development costs 14 31
Administrative costs 40 29
Total 329 333
Note 3.3 Leases
LEO Pharma mainly leases offices and cars.
Lease contracts are negotiated on an individual basis and
contain a wide range of different terms and conditions.
Lease contracts are typically signed for fixed periods. If
a rental contract includes an extension option for LEO
Pharma, Management assesses whether it is reasonably
certain that the extension option will be utilized.
Right-of-use assets
2025 2024
(DKK million) Properties Cars etc. Total Properties Cars etc. Total
Carrying amount
at January 1 135 73 208 235 71 306
Exchange rate
adjustment (7) (2) (9) 3 - 3
Additions 28 45 73 16 42 58
Remeasurements 11 - 11 (38) - (38)
Disposals - - - (22) 0 (22)
Depreciation (36) (35) (71) (48) (40) (88)
Impairment - - - (11) - (11)
Carrying amount
at December 31 131 81 212 135 73 208
Accounting policies
For self-constructed assets, cost comprises the direct
costs of materials, subsuppliers and salaries etc. The
total cost of an asset is broken down into components
that are depreciated separately if the expected useful
life of the individual components is not the same.
If the recoverable amount of an asset is estimated to
be less than the carrying amount, an impairment is
recognized. Impairment losses are recognized in the
respective function that the asset belongs to on rec-
ognition, such as cost of sales, sales and distribution
costs, research and development costs and admini-
trative costs.
Depreciation is provided on a straight-line basis over
the expected useful life. The useful life is reassessed
once a year to ascertain that the depreciation profile
reflects the expected useful life and future residual
value of the assets. Land is not depreciated.
The expected useful lives are as follows:
Buildings 10-50 years
Plant and machinery 5-15 years
Other fixtures and fittings,
tools and equipment 3-10 years
Leasehold improvements are depreciated over the
term of the leased assets.
108LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Section 3 Invested capital
Lease liabilities
(DKK million) 2025 2024
Current liabilities 66 82
Non-current liabilities 168 164
Total 234 246
For a contractual maturity analysis of lease liabilities,
please refer to Note 5.2 Financial risks, contractual matu-
rity analysis for financial liabilities.
Lease liabilities impacted the cash flow by DKK 104m
(2024: DKK 120m), of which DKK 11m (2024: DKK 10m)
impacted the operating cash flow and DKK 93m (2024:
DKK 110m) impacted the cash flow from financing activ-
ities.
Amounts expensed in the income statement
(DKK million) 2025 2024
Other operating income, net - 6
Depreciation of right-of-use assets (71) (99)
Interest expense on lease liabilities (11) (10)
Total (82) (103)
Variable lease payments, short-term leases and leases of
low-value assets were not material in 2025 or 2024.
Depreciation is included in sales and distribution costs in
the income statement.
Note 3.3 Leases (continued)
Accounting policies
On initial recognition, right-of-use assets correspond
to the lease liability recognized, adjusted for any lease
prepayments, and including dismantling and restora-
tion costs. The lease payments include fixed payments
less any lease incentives receivable and variable
lease payments. Variable lease payments that are not
included in the measurement of the lease liability are
recognized as expenses in the income statement.
The lease payments are discounted using the interest
rate implicit in the contract if the rate can be deter-
mined, or otherwise using LEO Pharma's incremental
borrowing rate that the entities would have to pay
to borrow the funds necessary to obtain assets with
similar characteristics to the leased assets, in a similar
economic environment and with similar terms and
conditions.
For contracts with a rolling term (evergreen leases),
the lease term is estimated at five years. Properties
of strategic importance are estimated based on the
time frame necessary to vacate the premises. The
estimated lease term is reassessed at each reporting
date or in case of a significant event or a significant
change in circumstances that is within the control of
LEO Pharma.
Depreciation follows the straight-line method over the
lease term.
The Group applies the short-term lease recognition
exemption to lease contracts that, at the commence-
ment date, have a lease term of 12 months or less for
all classes of underlying assets, and the exemption
for lease contracts for which the underlying asset is of
low value. Lease payments on short-term leases and
leases of low-value assets are recognized as expenses
on a straight-line basis over the lease term.
109LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 3.4 Pensions
Section 3 Invested capital
The Group operates a number of pension plans with different characteristics for certain groups of employees in various
countries. The vast majority of these pension plans are defined contribution plans.
2025 2024
(DKK million)
Present value of
pension obligations
Fair value of plan
assets Net obligations
Present value of
pension obligations
Fair value of plan
assets Net obligations
Value at January 1 1,374 1,505 (131) 1,446 1,514 (68)
Effect of exchange rate adjustment (36) (30) (6) 25 32 (7)
Current and past service costs (11) - (11) 2 - 2
Interest on obligation/asset 55 63 (8) 53 57 (4)
Total amount recognized in the income statement 8 33 (25) 80 89 (9)
Actuarial (gains)/losses on changes in demographic assumptions (51) - (51) (6) - (6)
Actuarial (gains)/losses on changes in financial assumptions (4) - (4) (78) - (78)
Actuarial (gains)/losses on experience adjustments 18 - 18 (4) - (4)
Return on plan assets - (49) 49 - (61) 61
Total amount recognized in other comprehensive income (37) (49) 12 (88) (61) (27)
Benefits paid to employees (77) (67) (10) (64) (61) (3)
Employer contributions - 24 (24) - 24 (24)
Value at December 31 1,268 1,446 (178) 1,374 1,505 (131)
Recognized as
Non-current assets 239 206
Non-current liabilities 61 75
Total (178) (131)
110LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Defined contribution plans
Defined contribution plans are externally funded through
payments of premiums to insurance companies and
pension funds that are legally separate from the Group.
The Group’s responsibility to current or former employees
is limited to the payment of the premium.
Defined benefit plans
For defined benefit plans, the Group is responsible for the
pension obligation to the employees, which exposes the
Group to actuarial risks, such as mortality, interest rate
and salaries. The plans entitle the employees to an annual
pension on retirement based on service and salary level
up to retirement.
The Group operates defined benefit plans in a few coun-
tries, of which the most significant are in Ireland and the
UK.
The plans in Ireland and the UK are funded and constitut-
ed under a trust, the assets of which are legally separated
from those of the Group. Under the UK scheme-funding
regime, the trustees are required to undertake regular
scheme-funding valuations for the plans and to establish
a schedule of contributions and a recovery plan if there is
a shortfall.
Financial assets totalling DKK 148m (2024: DKK 145m)
have been pledged as collateral for the pension fund in
Ireland (please refer to Note 5.4 Financial assets and lia-
bilities by category).
Key assumptions and sensitivity analysis
The most significant assumptions used in the calculation
of the obligation concerning defined benefit plans are the
discount rates.
The average discount rate applied is 4.5% (2024: 4.1%).
(DKK million) 2025 2024
Sensitivity analysis
Decrease of 0.5% in discount rate 79 93
Increase of 0.5% in discount rate (78) (86)
Note 3.4 Pensions (continued)
Section 3 Invested capital
Accounting policies
Defined contribution plans
Payments to defined contribution plans are recognized
in the income statement in the period to which they
relate, and any amounts payable are recognized as
other payables under current liabilities in the balance
sheet.
Defined benefit plans
Under defined benefit plans, the Group has an obliga-
tion to pay a defined benefit on retirement. The actu-
arially calculated present value of pension obligations
less the fair value of any plan assets is recognized
under pensions in the balance sheet.
The present value is calculated on the basis of as-
sumptions relating to future developments in salary,
interest rates, inflation, mortality and other factors.
The present value is calculated solely for the benefits
to which the employees have earned a right through
their employment in the Group. Plan assets are rec-
ognized to the extent that the Group is able to obtain
future economic benefits in the form of reimburse-
ment from the pension scheme or reduction of future
payments. Pension costs for the year are recognized
in the income statement on the basis of actuarial es-
timates and financial expectations at the beginning of
the year. Actuarial gains and losses are recognized in
other comprehensive income. Past service costs are
recognized in the income statement as incurred.
The value of the defined benefit plans is based on val-
uations from external actuaries. The valuation is based
on a number of actuarial assumptions, including dis-
count rates, expected return on plan assets, expected
growth in wages and salaries, mortality and retirement
benefits. The discount rate is the most significant
assumption used in the calculation of the obligation
concerning defined benefit plans.
111LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 4.1 Trade receivables
Section 4 Operating assets and liabilities
Trade receivables arise primarily from sale of goods
produced in-house and sales-based royalty income. The
amounts due from customers include the net value of
products sold, taking into account commercial discounts
and chargebacks as contractually agreed compensation
to LEO Pharma's contract partners, as well as credit notes
for returned products as per contractual agreements.
LEO Pharma’s contracts with customers have initial
payment terms that range from 45 to 90 days.
The factoring program was closed during the year and no
trade receivables are subject to factoring at December
31, 2025.
(DKK million) 2025 2024
Trade receivables 3,073 2,400
Allowances for expected credit loss (32) (32)
Trade receivables at December 31 3,041 2,368
Movements in write-downs, which are included in trade receivables
(DKK million) 2025 2024
Write-downs at January 1 32 31
Additions 36 15
Realized loss (9) 0
Reversals (27) (14)
Write-downs at December 31 32 32
The table below details the risk profile for trade receiva-
bles. The Group’s historical credit losses do not show dif-
ferent patterns for different customer segments. Histori-
cal credit losses are assessed by country of incorporation.
Maturity analysis of trade receivables
(DKK million)
Expected
credit loss
rate
Gross
carrying
amount
Write-
downs
Carrying
amount
2025
Not due 0% 2,720 (5) 2,715
1-90 days past due 1% 224 (1) 223
91-180 days past due 1% 67 0 67
181-360 days past due 22% 32 (14) 18
More than 360 days past due 38% 30 (12) 18
Trade receivables at December 31 3,073 (32) 3,041
2024
Not due 0% 2,184 0 2,184
1-90 days past due 1% 136 (1) 135
91-180 days past due 1% 32 0 32
181-360 days past due 36% 23 (9) 14
More than 360 days past due 88% 25 (22) 3
Trade receivables at December 31 2,400 (32) 2,368
Accounting policies
On initial recognition, trade receivables are measured
at fair value, and subsequently at amortized cost,
which usually corresponds to the nominal value less
write-downs to counter the risk of losses. Write-downs
are calculated using the "lifetime expected credit
losses" method.
Write-downs are recognized in the income statement
under sales and distribution costs.
112LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 4.2 Inventories
Section 4 Operating assets and liabilities
(DKK million) 2025 2024
Raw materials and consumables 993 1,260
Work in progress 1,627 2,158
Finished goods and goods for resale 1,430 1,555
Total inventories, net 4,050 4,973
The above includes write-downs at December 31 (429) (283)
Cost of goods sold included under cost of sales 4,659 4,383
In 2025, inventory write-downs mainly relate to excess and obsolete finished goods and active pharmaceutical ingredients
(API), recognized as an expense under cost of sales in the income statement.
Key accounting estimates
Cost of inventories
Management uses the standard cost method to
measure cost and performs a yearly assessment to
determine if this results in approximate cost. The
standard cost is adjusted if there are significant
deviations.
Indirect production overheads are calculated on the
basis of relevant assumptions concerning capacity
utilization, production time and other relevant factors
and allocated on the basis of the normal production
capacity.
Accounting policies
Inventories are measured at the lower of cost and net
realizable value, and are assigned using the first-in,
first-out (FIFO) cost formula.
Finished goods and work in progress comprise the
cost of raw materials, consumables, direct labor and
indirect production costs. Indirect production costs
comprise indirect consumables and labor, as well
as maintenance and depreciation of the machinery,
factory buildings and equipment used in the manufac-
turing process, and the costs of factory administration
and management.
The net realizable value of inventories is calculated as
the sales price less the costs of completion and the
expenses incurred to effect the sale allowing for mar-
ketability, obsolescence and development in expected
sales price. Obsolete goods, including slow-moving
goods, are written down in the period in which the im-
pairment is identified.
Accounting policies
Other payables include liabilities that are settled on
an ongoing basis and due less than one year from the
balance sheet date.
Other payables include amounts owed to employees,
amounts owed for the purchase of research and devel-
opment projects, accrued clinical trial expenses, sales
deductions related to customer programs and accrued
interest. They also include preregistered returns
where the absolute amounts are known.
Note 4.3 Other payables
(DKK million) 2025 2024
Employee-related 725 734
Sales deductions 614 490
Accrued clinical trial expenses 406 241
Royalties 106 74
Public authorities 80 80
Financial derivatives 50 113
Deferred revenue 36 184
Other accruals and payables 686 705
Total 2,703 2,621
Key accounting estimates (continued)
Inventory write‑down
Inventory write-down involves assessing the value of
inventory to ensure it is reported at the lower of cost
and net realizable value. This estimate requires sig-
nificant assumptions and analysis, which entails the
Group considering market conditions, product demand
and potential obsolescence. Inventory write-downs
include items that became obsolete, damaged or un-
salable, including those no longer used in production
or nearing expiration.
113LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 4.4 Provisions
Section 4 Operating assets and liabilities
(DKK million)
Sales
deductions
Product
returns
Employee-
related
provisions
Other
provisions
2025
Total
2024
Total
Provisions at January 1 773 253 307 138 1,471 1,056
Exchange rate adjustment (71) (26) (2) (3) (102) 36
Additions 1,846 112 111 29 2,098 2,427
Utilization (1,531) (37) (182) (67) (1,817) (1,701)
Reversals (306) (23) (25) (21) (375) (347)
Transfer - - 3 (3) - -
Provisions at December 31 711 279 212 73 1,275 1,471
Of which classified as:
Current liabilities 711 122 92 55 980 1,164
Non-current liabilities - 157 120 18 295 307
Sales deductions and product returns are expected to be
settled within a period of 1-2 years from delivery of the
related products.
Key accounting estimates
Provisions for sales deductions
Provisions for sales deductions represent estimates
of the related obligations. Management’s estimate of
sales discounts and rebates is based on a calculation
that includes a combination of historical utilization
data and expectations in relation to the development
in sales and rebate rates. Furthermore, specific cir-
cumstances regarding the different programs are
considered.
Sales discounts and rebates are predominantly issued
in the U.S. in connection with various commercial
arrangements, managed healthcare organizations,
co-pay arrangements, and government programs such
as Medicaid and Medicare. Estimates for these pro-
grams are most at risk of material adjustment because
of the extensive time delay between recording the
provision and its final settlement.
Accounting policies
Provisions are recognized when the Group has a legal
or a constructive obligation as a result of past events
and it is probable that there may be an outflow of
economic resources to settle the obligation. Provisions
are measured at the best estimate of the expenditure
required to settle the obligation at the balance sheet
date, discounted to present value where the effect of
the time value of money is material.
Provisions mainly consist of sales deductions, product
returns, restructuring, legal disputes and onerous
contracts.
Provisions for unsettled sales deductions and product
returns where the timing and amount are uncertain
are recognized at the time the related revenue is rec-
ognized.
Sales deductions and returns where absolute amounts
are known are recognized as other payables.
Provisions for restructuring mainly include employee-
related costs. These are recognized when a construc-
tive obligation exists, detailed restructuring plans are
in place and a valid expectation of those affected has
been raised.
Other provisions consist of provisions for legal dis-
putes, onerous contracts and non-employee-related
restructuring provisions.
114LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 5.1 Financial income and expenses
Section 5 Capital structure and financing
Note 5.2 Financial risks
LEO Pharma is exposed to several financial risks arising
from its worldwide operating, investing and financing
activities, including foreign exchange risk, liquidity risk,
interest rate risk and credit risk. Financial risk manage-
ment is conducted by the Group's treasury department in
accordance with objectives and policies approved by the
Board of Directors. The treasury policies cover funding,
trade credit, foreign exchange and interest risks, and were
updated in 2025 with regard to foreign exchange exposure
and related hedging activities. The Group uses derivative
financial instruments to hedge certain exposures, and the
use of derivatives for speculative purposes is prohibited.
Financial risks & exposures Risk management policies Mitigating actions in 2025 Risk
Foreign exchange risk
Based on the Group's revenue and
cost structure, the primary foreign
exchange exposures are related to
USD, CAD, CNY and GBP.
On a standalone basis, EUR rep-
resents a significant exposure
in terms of transaction volume,
without material impact on the
Group's risk exposure.
External financing is denominated
in DKK.
The Group's hedging policy for
foreign exchange rates defines
hedging of financial and commer-
cial FX risks to reduce the poten-
tial adverse short-term (up to 15
months) impact of FX fluctuation
on operational cash flow.
Ongoing hedge of substantial
proportions of expected net
cash flow in foreign currencies to
secure the EBITDA contribution
of the material currencies for
the next 15 months.
Review of minor currencies.
Low
Liquidity risk
Loans and credit facilities.
Loan covenant on EBITDA adjust-
ed for certain items.
The Group's funding policy regu-
lates minimum available liquidity
and potential refunding processes
for loan facilities.
Diversified funding portfolio (syn-
dicated, mortgage, bank loans).
Sufficient and increasing head-
room.
Low-
Medium
Interest rate risk
Net interest-bearing debt (NIBD).
The main loans and credit facilities
are regulated at floating interest
rates.
The Group's interest hedging
policy defines the fixed interest
duration on future NIBD and
reduces the risk of volatile interest
expenses.
Portfolio of interest rate swaps. Low
Credit risk
The exposure arises primarily from
trade receivables.
The Group's credit policy defines
credit terms for sales.
Credit management is governed by
treasury.
Credit rating of customers.
Regular monitoring of trade
receivables.
Low
In 2025, the Group's interest expenses decreased, pri-
marily due to positive cash generation from operating and
investing activities, which reduced funding requirements.
Interest expenses on financial liabilities measured at am-
ortized cost amounted to DKK 486m (2024: DKK 744m).
Financial income and expenses
(DKK million) 2025 2024
Interest income 24 32
Gain arising on forward foreign exchange contracts 78 61
Interest hedges - 22
Foreign exchange gain, net 9 -
Other financial income 11 17
Financial income 122 132
Interest expenses, credit institutions 475 734
Interest expense on lease liabilities 11 10
Interest hedges 26 -
Fair value adjustment of cash-settled share-based incentives 36 25
Foreign exchange loss, net - 69
Other financial expenses 140 108
Financial expenses 688 946
Accounting policies
Financial income and expenses comprise interest,
realized and unrealized exchange rate adjustments,
fair value adjustment of cash-settled share-based
incentive programs, fair value adjustments of financial
assets and liabilities, and other financial income and
expenses.
Fair value adjustments of currency derivatives reclas-
sified from other comprehensive income and fair value
adjustments recognized for fair value hedges are pre-
sented under gain arising on forward foreign exchange
contracts in financial income or loss arising on forward
foreign exchange contracts in financial expenses.
Interest income and interest expenses on financial
assets and liabilities are recognized using the effective
interest method.
115LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 5.2 Financial risks (continued)
Section 5 Capital structure and financing
Liquidity risk
The Group maintains a financial reserve to cover contrac-
tual obligations, and holds sufficient liquidity reserves and
available resources to explore investment opportunities.
Liquidity reserves
The Group's liquidity reserves at December 31
(DKK million) 2025 2024
Cash and cash equivalents 235 227
Unused financing facilities 5,533 3,920
Total 5,768 4,147
Financing facilities
The Group's syndicated facility agreement, which expires
on January 1, 2029, includes loan covenant terms linked
to financial metrics based on EBITDA for selected busi-
ness areas. Compliance is measured quarterly. As at De-
cember 31, 2025 the carrying amount of loans subject to
this covenant was DKK 7,120m (2024: DKK 8,678m).
LEO Pharma has complied with all covenant requirements
throughout the year with significant headroom to the ap-
plicable thresholds.
Based on the Group's financial plans and strategy for the
coming year, Management does not anticipate any difficul-
ties in meeting the covenant requirements for the next 12
months, as headroom remains significant and is expected
to increase further.
Foreign exchange risk
LEO Pharma is exposed to foreign exchange risk related to
commercial transactions, primarily in USD, CAD, CNY and
GBP. The Group's policy is to minimize this exposure by
matching inflows and outflows, and by hedging a propor-
tion of the unmatched flow, balance and cash positions
denominated in foreign currencies according to the Treas-
ury Policy.
The Group primarily uses FX forward contracts to hedge
cash flows and foreign currency balance sheet items.
Cash flow hedges are made on a 15-month rolling basis.
LEO Pharma designates foreign exchange derivatives as
either cash flow or fair value hedges. Please refer to Note
5.3 Derivative financial instruments.
Sensitivity analysis for foreign exchange risk
The sensitivity analysis below illustrates the potential
impact on LEO Pharma's income statement and equity of
fluctuations in the key currencies to which LEO Pharma
is significantly exposed at the balance sheet date. The
sensitivity analysis is based on a 5% increase in the key
currencies, with all other variables, including interest
rates, held constant. It covers cash and cash equivalents,
current receivables, trade payables, current and non-cur-
rent loans, intercompany balances and forward exchange
rate contracts as at December 31.
Foreign currency sensitivity analysis
Sensitivity of an immediate 5% increase in key currencies on December 31, versus DKK:
2025 2024
Profit or
loss Equity
Profit or
loss Equity
USD (7) (30) (11) -
CAD (1) (22) 0 (29)
CNY 0 (20) (3) (38)
GBP (1) (16) (6) (15)
An immediate decrease of 5% would have the opposite impact.
116LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 5.2 Financial risks (continued)
Section 5 Capital structure and financing
Borrowing proceeds
2025 2024
(DKK million)
Borrowings,
January 1 Proceeds Repayments
Other non-cash
items
Borrowings,
December 31
Borrowings,
January 1 Proceeds Repayments
Other non-cash
items
Borrowings,
December 31
Loans and overdraft facilities 10,916 1,337 (2,910) 16 9,359 10,669 1,390 (1,160) 17 10,916
Lease liabilities 246 - (93) 81 234 325 - (110) 31 246
Total borrowings 11,162 1,337 (3,003) 97 9,593 10,994 1,390 (1,270) 48 11,162
Of which classified as:
Current liabilities 955 584
Non-current liabilities 8,638 10,578
Other non-cash items for loans and overdraft facilities mainly comprise amortization of costs and fees that are directly attributable to recognition of loans and minor exchange rate adjustments.
Contractual maturity analysis for financial liabilities
2025 2024
(DKK million)
Contractual
amount
Less than
1 year 1-5 years
More than
5 years
Contractual
amount
Less than
1 year 1-5 years
More than
5 years
Loans and credit institutions 10,589 350 7,920 2,319 13,683 531 10,574 2,578
Lease liabilities 260 75 155 30 262 89 149 24
Trade and other payables 3,554 3,554 - - 3,685 3,685 - -
Other non-current liabilities - - - - 180 - - 180
Total non-derivative financial liabilities 14,403 3,979 8,075 2,349 17,810 4,305 10,723 2,782
Derivative financial liabilities 50 35 15 - 113 66 47 -
Total financial liabilities at December 31 14,453 4,014 8,090 2,349 17,923 4,371 10,770 2,782
The maturity analysis is based on non-discounted contractual cash flows, including interest. Future interest payments are determined based on market expectations at December 31.
The analysis assumes that derivatives will be settled according to their contractual terms.
117LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 5.2 Financial risks (continued)
Section 5 Capital structure and financing
Interest rate risk
LEO Pharma`s major non-current loan related to the syn-
dicated facility has a floating interest rate. Fluctuations in
interest rates pose a risk for financial expenses. To mitigate
the interest rate risk, LEO Pharma enters into interest rate
swaps and collars as hedge instruments, subject to the
Treasury Policy. The weighted average effective interest
rate, including the hedging instruments, for the utilized
syndicated facility was 4.37% (2024: 5.56%). LEO Pharma
designates the hedging instruments for interest rate risk
as cash flow hedges. No ineffectiveness was observed in
2025 or 2024. The interest rates on mortgage loans will
be renewed in the period from 2026 to 2028.
Sensitivity analysis for interest rate risk
A 1 percentage point increase in floating interest rates
would result in a net increase in interest expenses in the
income statement for the year of DKK 19m (2024: DKK
19m) and increase other comprehensive income by DKK
101m (2024: DKK 102m). The calculation applied in the
sensitivity analysis is based on LEO Pharma's interest-
bearing debt and the change in fair value of the interest
hedging instruments as at December 31.
Interest-bearing loans with banking partners
(DKK million) Currency
Expiry of
commit-
ment Fixed/floating
Weighted
avg. effective
interest rate
(%)
Amortized
cost
Nominal
value Fair value
2025
Syndicated facility DKK 2029 Floating 4.37 7,120 7,16 4 7,16 4
Mortgage loans DKK 2038 Fixed 3-5 years 4.64 1,188 1,200 1,241
Mortgage loans DKK 2042 Fixed 3-5 years 4.54 1,051 1,065 1,085
Total 9,359 9,429 9,490
2024
Syndicated facility DKK 2029 Floating 5.56 8,678 8,737 8,737
Mortgage loans DKK 2038 Fixed 3-5 years 4.64 1,188 1,200 1,253
Mortgage loans DKK 2042 Fixed 3-5 years 4.54 1,050 1,065 1,093
Total 10,916 11,002 11,083
The weigheted average effective interest rate in the above table includes the effect on hedging.
Net interest-bearing debt (NIBD)
The net interest-bearing debt (NIBD) is the interest-
bearing liabilities less cash and cash equivalents.
(DKK million) 2025 2024
Loans and credit facilities 9,359 10,916
Lease liabilities 234 246
Other non-current liabilities, interest-bearing - 180
Cash and cash equivalents (235) (227)
Net interest-bearing debt (NIBD) 9,358 11,115
Other non-current liabilities of DKK 285m (2024: DKK 464m) in the consolidated balance sheet include DKK 0m (2024: DKK
180m) interest-bearing and DKK 285m (2024: DKK 284m) non-interest-bearing liabilities.
Credit risk
Credit risk primarily refers to the potential losses or reduc-
tion in cash flow in the event that customers are unable to
fulfill their obligations in a timely manner. LEO Pharma´s
trade receivables are spread across many counterparties
and customers, and the Group therefore has no significant
concentration of credit risk. Historically, realized losses on
trade receivables have been insignificant. Please refer to
Note 4.1 Trade receivables.
A financial counterparty risk also arises when entities
within the Group hold deposits at financial institutions. To
mitigate this risk, surplus cash positions in the subsidiar-
ies are centralized by treasury and held in the current ac-
counts of subsidiaries. If a financial institution has a rating
below Investment grade, treasury adopts a stricter policy
of maintaining the lowest possible bank balance.
Transactions involving derivative financial instruments are
exclusively conducted with banks that participate in the
Group's syndicated loan facility.
118LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 5.3 Derivative financial instruments
Section 5 Capital structure and financing
Foreign exchange contracts
LEO Pharma manages foreign currency risk on highly
probable forecast sales and purchases using a layered
hedging strategy. This involves covering approximately
80% of the net exposure for the nearest quarter, with the
hedge ratio gradually reduced to about 25% for exposures
five quarters ahead.
Cash flow hedges
The designated financial contracts are expected to impact
the income statement over the next 15 months as the
cash flow hedges mature and amounts are reclassified
from other comprehensive income to financial income or
financial expenses. LEO Pharma performs both quantita-
tive and qualitative assessments of the effectiveness of
its cash flow hedges. The value of the hedged items is ex-
pected to move systematically in the opposite direction to
the value of the hedging instruments. Hedge effectiveness
is assessed on both a retrospective and prospective basis.
No ineffectiveness was observed in 2025 or 2024.
Fair value hedges
LEO Pharma applies fair value hedge accounting to mit-
igate exposure to changes in the fair value of recognized
assets and liabilities attributable to foreign currency risk.
In 2025, a fair value gain on forward foreign exchange
contracts of DKK 16m was recognized in the income
statement under financial income (2024: DKK 78m).
Future impacts will depend on market exchange rate
movements, with fair value adjustments being recognized
directly in profit or loss as they occur.
Interest rate hedges
As described in Note 5.2 ‘Financial risks,’ LEO Pharma
has entered into hedging arrangements to mitigate the
exposure to floating interest rate risk arising from its syn-
dicated loan facility.
To mitigate the currency risks described in Note 5.2 Finan-
cial risks, LEO Pharma has entered into FX forward con-
tracts as hedging instruments, maturing within 15 months
from the balance sheet date.
Interest rate hedges 2025 2024
(DKK million)
Notional
value,
interest
hedge
Average
fixed interest
rate
Fair value,
assets/
(liabilities)
Notional
value,
interest
hedge
Average
fixed interest
rate
Fair value,
assets/
(liabilities)
Cash flow hedges
Interest rate swap 6,850 2.60% (28) 4,250 2.94% (62)
Collar 2,000 2.13%-3.69% (2) 5,000 1.75%-3.73% (13)
Total (30) (75)
Notional value of interest hedges includes the value of interest rate swaps with forward start and, following the expiry of
active contracts, amounts to DKK 3,600m as at December 31, 2025 (2024: DKK 2,500m for interest rate swap and collar).
The interest rate swaps and collars outstanding as at December 31, 2025 are denominated in DKK and mature between
2026 and 2030.
Foreign exchange contracts 2025 2024
(DKK million)
Average
hedge rate
Contract
amount, net*
Fair value,
assets/
(liabilities)
Average
hedge rate
Contract
amount, net*
Fair value,
assets/
(liabilities)
Cash flow hedges
USD 6.31 596 3 N/A N/A N/A
CAD 4.68 451 6 4.96 572 2
CNH 0.93 399 9 0.96 749 (12)
Other currencies, net N/A 560 9 N/A 934 (11)
Fair value hedges
USD 6.34 (342) (2) 6.90 (985) 30
Other currencies, net N/A (505) 12 N/A (463) 2
Foreign exchange contracts
at December 31 37 11
* Positive contract amounts represent a sale of currencies versus DKK, and negative contract amounts represent a purchase.
119LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 5.3 Derivative financial instruments (continued)
Section 5 Capital structure and financing
Fair value adjustment
(DKK million) 2025 2024
Cash flow hedge - foreign exchange
Fair value adjustment for the year recognized in other comprehensive income 110 (34)
Reclassified from equity to the income statement, financial (income) / expenses (62) 17
Cash flow hedge - interest rate
Fair value adjustment for the year recognized in other comprehensive income 18 (83)
Reclassified from equity to the income statement, financial (income) / expenses 26 (22)
Fair value hedge - foreign exchange
Recognized in the income statement, financial (income) / expenses (16) (78)
Cash flow and fair value hedges recognized in the income statement, (income) / expenses (52) (83)
Accounting policies
Derivative financial instruments
Derivative financial instruments are used to manage
the exposure to interest rate and foreign exchange
risk. On initiation of the contract, LEO Pharma des-
ignates each derivative financial contract as either a
hedge of the fair value of a recognized asset or liability
(fair value hedge) or as a hedge of a future transaction
(cash flow hedge).
All contracts are initially recognized at fair value and
subsequently remeasured at fair value at the end of
the reporting period. The resulting gain or loss is rec-
ognized in the income statement immediately, unless
the derivative is designated and effected as a cash
flow hedging instrument. In this case, the timing of
recognition in the income statement depends on the
nature of the hedge relationship; please refer to Hedge
accounting below.
Forward foreign exchange contract assets and liabili-
ties are presented as either other receivables or other
payables in the balance sheet.
Hedge accounting
The fair value adjustment of qualifying hedging instru-
ments is recognized in the income statement when
the hedging instrument is designated as a fair value
hedge. Value adjustments of the effective part of cash
flow hedges are recognized in equity through other
comprehensive income. The cumulative value ad-
justment of these contracts is reclassified from other
comprehensive income to financial income/financial
expenses in the income statement.
Discontinuation of hedge accounting
When a hedging instrument expires or is terminated
but the hedge still meets the criteria for hedge ac-
counting, any cumulative gain or loss existing in equity
at that time remains in equity and is reclassified to
financial income/financial expenses when the forecast
transaction is ultimately recognized in the income
statement.
If a forecast transaction is no longer expected to
occur, the cumulative gain or loss that was reported in
equity is immediately reclassified to the income state-
ment under financial income or financial expenses.
120LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 5.4 Financial assets and liabilities by category
Section 5 Capital structure and financing
The financial assets and liabilities presented in the balance sheet can be categorized as follows:
(DKK million) 2025 2024
Financial assets
Cash and bank balances 235 227
Trade and other receivables 3,537 2,682
Other financial assets 27 99
Financial assets at amortized cost 3,799 3,008
Other financial assets 86 95
Derivative instruments in designated fair value hedging relationship 21 39
Financial assets at fair value through profit or loss 107 134
Derivative instruments in designated cash flow hedging relationship 36 10
Financial assets at fair value through other comprehensive income 36 10
Total financial assets 3,942 3,152
(DKK million) 2025 2024
Financial liabilities
Trade and other payables 3,554 3,685
Bank loans (current and non-current) 7,120 8,678
Mortgage loans 2,239 2,238
Lease liabilities (current and non-current) 234 246
Other non-current liabilities 285 464
Financial liabilities at amortized cost 13,432 15,311
Derivative instruments in designated fair value hedging relationship 11 7
Financial liabilities at fair value through profit or loss 11 7
Derivative instruments in designated cash flow hedging relationship 39 106
Financial liabilities at fair value through other comprehensive income 39 106
Total financial liabilities 13,482 15,424
Fair value hierarchy
At the end of 2025, LEO Pharma held bonds with a fair
value of DKK 86m (2024: DKK 95m) classified as other
financial assets and measured at fair value using level 1
inputs based on quoted market prices. The valuation is
based on the most recent transaction price, adjusted for
subsequent changes in market conditions.
Derivative instruments are measured at fair value based
on observable input (level 2 input). Forward foreign ex-
change contracts, interest rate swaps, currency swaps
and unlisted bonds are measured according to generally
accepted valuation techniques, where market-based
parameters are used to measure the fair value. For bank
loans and mortgage loans measured at amortized cost,
the carrying amounts approximate fair value (level 2
input). Please refer to Note 5.2 Financial risks.
Leo Pharma has no financial instruments measured at fair
value based on non-observable data (level 3 input).
Pledged financial assets
At 31 December 2025, bonds with a fair value of
DKK 86 million (2024: DKK 95 million), classified as
other financial assets, together with security deposits of
DKK 62 million (2024: DKK 50 million) recognised in other
receivables, were pledged as collateral for the Group’s
pension fund in Ireland.
Accounting policies
Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial lia-
bilities at fair value through profit and loss) are added
to or deducted from the fair value of the financial
assets or financial liabilities on initial recognition.
Financial assets
Financial securities in LEO Pharma primarily consist of
bonds. Investments in bonds are subsequently meas-
ured at fair value through profit and loss.
Financial liabilities
LEO Pharma's liabilities to credit institutions and
banks are recognized at the borrowing date at fair
value of the proceeds received less transaction costs
paid. Subsequently, the financial liabilities are meas-
ured at amortized cost, corresponding to the capital-
ized amount calculated using the effective interest
rate. The difference between the proceeds and the
nominal value is recognized in the income statement
over the duration of the loan.
121LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 5.5 Equity
Section 5 Capital structure and financing
The Board of Directors and Global Leadership Team regu-
larly review LEO Pharma's capital and debt structure. The
overall goal is to maintain a balance between debt and
equity that ensures financial stability and optimizes the
Group's cost of capital.
2025
The share capital comprises 383,582,682 shares at a
nominal value of DKK 1. The share capital is divided into
155,343,654 A-shares and 228,239,028 B-shares. Each
A-share carries 10 votes and each B-share carries 1 vote.
During 2025, a capital increase was recognized related
to share-based payment. The capital increase was due to
exercise of vested B-shares under LEO Pharma's Employ-
ee Share Purchase Plan. Please refer to Note 6.2 Share-
based payment.
No shares or shareholders have any additional special
rights.
2024
The share capital comprised 383,328,975 shares at a
nominal value of DKK 1. The share capital was divided into
155,343,654 A-shares and 227,985,321 B-shares. Each
A-share carried 10 votes and each B-share carried 1 vote.
During 2024, a capital increase was recognized related
to share-based payments. The capital increase was due
to subscription of new B-shares under LEO Pharma's
Employee Share Purchase Plan. Please refer to Note 6.2
Share-based payment.
No shares or shareholders had any additional special
rights.
Share capital
Number of shares A-shares B-shares Total
2025
Share capital at January 1 155,343,654 227,98 5,321 383,328,975
Capital increase - 253,707 253,707
Share capital at December 31 155,343,654 228,239,028 383,582,682
2024
Share capital at January 1 155,343,654 227,700, 233 383,043,887
Capital increase - 285,088 285,088
Share capital at December 31 155,343,654 227,985,321 383,328,975
Treasury shares
Number of shares 2025 2024
Treasury shares at January 1 214,995 123,745
Additions 66,484 91,308
Disposals (25,537) (58)
Treasury shares at December 31 255,942 214,995
Acquisition of treasury shares relates to employee shares bought back from employees no longer working at LEO Pharma.
Total acquired treasury shares during the year amounted to DKK 7m (2024: DKK 9m). As at December 31, the total holding
of treasury shares amounted to 0.07% (2024: 0.06%) of the total share capital.
Earnings per share (EPS/DEPS)
Weighted average 2025 2024
Net profit/(loss) (DKK million) 2,489 (1,776)
Number of outstanding shares, excluding treasury shares (million) 383 383
Dilutive effect of outstanding warrants (million) - -
Number of shares, diluted (million) 383 383
Earnings per share (DKK) 6.49 (4.64)
Earnings per share, diluted (DKK) 6.49 (4.64)
Outstanding warrants did not have a dilutive effect on the outstanding shares in the calculation of DEPS in 2025 or 2024.
The required conditions for equity settlement were not met at the reporting date. Please refer to Note 6.2 Share-based
payment.
122LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 6.1 Management remuneration
Section 6 Other disclosures
Remuneration of the Board of Directors and the Global Leadership Team
(DKK million) Salaries Bonus Pensions
Share-based
payments
Total remuneration
excluding severance
payments
Severance
payments
Total remuneration
after severance
payments
2025
CEO 7.8 8.6 1.2 2.9 20.5 - 20.5
CFO 5.6 3.8 0.8 1.3 11.5 - 11.5
Total Registered Executive Management 13.4 12.4 2.0 4.2 32.0 - 32.0
Other members of the Global Leadership Team 27.6 19.0 5.4 12.8 64.8 3.1 67.9
Board of Directors
Jesper Brandgaard 1.3 - - - 1.3 - 1.3
Paul Navarre 1.0 - - - 1.0 - 1.0
Lars Green 0.6 - - - 0.6 - 0.6
Jannie Kogsbøll 0.4 - - - 0.4 - 0.4
Henrik Bo Andersson 0.4 - - - 0.4 - 0.4
Franck Maréno 0.4 - - - 0.4 - 0.4
Elisabeth Svanberg 0.7 - - - 0.7 - 0.7
Signe Maria Christensen 0.5 - - - 0.5 - 0.5
Raj Shah
1
- - - - - - -
Peter Haahr
2
- - - - - - -
Mark Levick 0.5 - - - 0.5 - 0.5
Liisa Hurme 0.4 - - - 0.4 - 0.4
Total Board of Directors 6.2 - - - 6.2 - 6.2
Total 47.2 31.4 7.4 17.0 103.0 3.1 106.1
2024
CEO 7.4 12.3 1.1 1.4 22.2 - 22.2
CFO 5.4 6.1 0.8 0.5 12.8 - 12.8
Other members of the Global Leadership Team 21.8 24.4 3.1 12.2 61.5 6.4 67.9
Board of Directors 5.0 - - - 5.0 - 5.0
Total 39.6 42.8 5.0 14.1 101.5 6.4 107.9
1
Raj Shah is a representative from Nordic Capital and does not receive any remuneration for his Board membership.
2
Peter Haahr is a representative from the LEO Foundation and does not receive any remuneration for his Board membership.
123LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
LEO Pharma offered all employees the opportunity to par-
ticipate in share-based incentive programs; programs cov-
ering all employees (Employee Share Purchase Plan) and
programs for selected members of Management (Manage-
ment Incentive Program and Long-term Incentive Plans).
The intrinsic value at December 31, 2025 of the liability
related to vested phantom shares and warrants was DKK
250m (2024: DKK 208m). Total expenses recognized in
2025 for share-based payment transactions in the income
statement amounted to DKK 83m (2024: DKK 69m), of
which DKK 36m was fair value adjustments of the cash-set-
tled programs recognized under financial expenses (2024:
DKK 25m). The total cost of DKK 45m (2024: DKK 38m)
arose from equity-settled share-based payment transac-
tions.
Note 6.2 Share-based payment
Section 6 Other disclosures
Note 6.1 Management remuneration (continued)
For a list of members of the Board of Directors and Global
Leadership Team, please refer to Corporate matters:
Board of Directors and Global Leadership Team, in Man-
agement's review.
Global Leadership Team
Salaries include base salaries and various allowances
for car, internet etc. Bonus includes short- and long-term
incentives and extraordinary one-off bonuses. The share-
based incentive program is linked to successful transfor-
mation of the company and an IPO.
Fair value remeasurement of financial liabilities from
historical programs (2021-2023) for key management,
including Global Leadership Team, amounted to DKK 6m
(2024: DKK 20m). The total fair value remeasurement of
financial liabilities, including employees other than Global
Leadership Team, is included in Note 5.1 Financial income
and expenses.
Board of Directors
Members of the Board of Directors receive fixed remuner-
ation. In 2025, members of the Board of Directors neither
purchased nor were awarded any warrants as part of the
Management Incentive Program (2024: DKK 0m).
Employee Share Purchase Plan
(ESPP and EPSPP)
The Group launched voluntary employee share-based
programs in both 2022 and 2024, giving all employees
with permanent contracts the opportunity to buy shares in
LEO Pharma A/S ("employee shares"). In 2025, 289,533
matching shares vested from the 2022 program. The re-
maining part of the 2022 program and the 2024 program
vest upon the conditions below. To participate in the plan,
the employees were required to invest 3% of their base
salary over 12 months into shares. In addition, employees
receive the right to an additional matching share for each
employee share bought, subject to continued employment,
vesting toward a potential public listing. A further require-
ment for vesting is the LEO Pharma share having a fair value
of at least the same as at the time of the employees' sub-
scription (2022 program: at least 1.5 times). In the event of
non-listing, the shares vest after eight years of continued
employment (2022 program: 10 years) and will be cash-
settled. Management considers it more likely than not that
a listing will be completed within the vesting period and
thus considers matching shares that would otherwise not
be cash-settled as equity-settled programs.
2024: The fair value of granted awards is estimated using
a binomial valuation model that incorporates market
conditions and the terms and conditions upon which the
awards were granted, excluding vesting conditions. The
inputs used to measure the average fair value of DKK 92.33
at the grant date for ESPP and EPSPP programmes were:
expected volatility (weighted average) of 28.4%, expected
life (weighted average) of 3 years, a risk-free interest rate
ranging from 1.78% and 2.17%, and no dividends.
The programs are split into both equity-settled programs
(ESPP) and cash-settled programs (EPSPP); the latter are
used where there are local restrictions on employee shares
or equity-settled programs. Both types follow the same
vesting conditions, vesting periods, requirements etc.
Reconciliation of outstanding employee awards
2025 2024
Number of matching shares
ESPP
(equity-
settled)
EPSPP
(cash-
settled)
ESPP
(equity-
settled)
EPSPP
(cash-
settled)
Outstanding at January 1 811,013 64,284 617,175 40,075
Granted - - 297,960 29,024
Exercised (270,980) (18,553) - -
Forfeited (34,400) (2,546) (104,122) (4,815)
Outstanding at December 31 505,633 43,185 811,013 64,284
Weighted average remaining contractual life (years) 1 1 2 2
Liability at December 31 (DKK million) N/A 4 N/A 4
Note 6.2 Share-based payment (continued)
124LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 6.2 Share-based payment (continued)
Section 6 Other disclosures
Management Incentive Program
(MIP & MIP Phantom)
Part of Management received warrants as part of their
long-term incentive program. They must remain employed
by the Group until the vesting date, which is the earlier of
a public listing and seven years after the grant date. The
market condition of the warrants stipulates a fair value
increase in LEO Pharma shares to at least 1.5 times the
subscription price. Further, the total number of vested
warrants is capped at three times the subscription value.
In the event of non-listing, the warrants become exercisa-
ble after seven years and will be cash-settled.
Management considers it more likely than not that a listing
will be completed within the vesting period and thus con-
siders warrants that would otherwise not be cash-settled
as equity-settled programs.
The programs are split into both equity-settled programs
(MIP) and cash-settled programs (MIP Phantom); the
latter are used where there are local restrictions on em-
ployee shares or equity-settled programs. Both types
follow the same vesting conditions, vesting periods, re-
quirements etc.
2024: The fair value of awards granted in 2024 was es-
timated using a binomial valuation model incorporating
market conditions and the relevant terms and conditions.
Expected volatility was based on an evaluation of the his-
torical volatility of comparable companies’ share prices,
calculated as the standard deviation of weekly returns
over a five-year period. The expected term of the instru-
ments was determined based on projected exit dates,
probabilities and estimates assessed by management.
Key assumptions used in calculating the fair value of the
awards included: a fair value at grant date ranging from
43.26 to 44.45 DKK/share, an expected volatility (weight-
ed average) of 28.4%, an expected life (weighted average
in years) of 3, and a risk-free interest rate between 1.78%
and 2.17%.
Reconciliation of outstanding Management awards (MIP & MIP Phantom)
2025 2024
Number of warrants
Average
exercise price
(EUR)
MIP
(equity-
settled)
MIP
Phantom
(cash-
settled)
MIP
(equity-
settled)
MIP
Phantom
(cash-
settled)
Outstanding at January 1 6.42 6,590,441 4,796,184 6,252,300 5,017,258
Prior-year adjustments 6.42 (66,620) 13,272 - -
Granted 6.42 - - 750,000 -
Forfeited 6.42 (155,803) - (411,859) (221,074)
Outstanding at December 31 6.42 6,368,018 4,809,456 6,590,441 4,796,184
Number exercisable at December 31 - - - -
Weighted average remaining contractual life (years) 1 1 2 2
Liability at December 31 (DKK million) N/A 260 N/A 225
Long-term incentive plans (LTIP)
In 2025, long-term incentive plans (LTIP) were granted
to Global Leadership Team and certain key employees of
the Group using performance share units (PSUs) as well
as restricted share units (RSUs). The granted LTIPs are
considered equity-settled.
The LTIPs granted in 2025 have a three-year perfor-
mance period, subject to continued employment with
LEO Pharma, after which vested PSUs and RSUs are con-
verted into shares in LEO Pharma A/S. At the start of the
performance period for the PSUs, the Board established
non-market performance KPIs, which determine the total
number of vested PSUs. These targets define thresholds
for on-target and maximum performance levels. The
targets include revenue growth, adjusted EBITDA margin
and return on invested capital. If the total value of the
vested PSUs or RSUs exceeds a maximum threshold of
four times the initial grant value, the number of PSUs and
RSUs that actually vest will be reduced as necessary to
reach the maximum threshold.
During 2025, 581,262 PSUs and 50,318 RSUs were
granted. The total fair value at grant is recognized as an
expense over the performance period and will subse-
quently be revised during the vesting period to reflect the
number of PSUs and RSUs expected to vest, based on
actual performance against the target KPIs.
The total fair value at grant was DKK 71m, and is de-
termined as the estimated fair value of a share in LEO
Pharma A/S using a discounted cash flow valuation model,
adjusted for the fair value of the cap on the number of
PSUs and RSUs expected to vest. The fair value of the
granted instrument (PSUs and RSUs) should not be mis-
taken for the fair value of the underlying share in LEO
Pharma A/S. The calculation of the PSU/RSU fair value in-
cluded the expected volatility of 26.7%, risk-free interest
rate of 1.8% and expected lifespand of 3 years.
The determination of the fair value of the cap at the grant
date takes into consideration probable performance levels
and is calculated using a Black-Scholes valuation model.
No dividends are expected during the vesting period.
Accounting policies
For equity-settled share-based payment arrange-
ments, the warrants and shares granted are measured
at fair value at grant date and recognized as employee
costs over the vesting period with a corresponding
entry in equity reserves. On initial recognition, an es-
timate is made of the number of awards expected to
vest. Subsequently, the amount recognized is adjusted
to reflect the number of awards for which the service
and non-market performance conditions are expected
to be met and awards expected to vest.
For cash-settled share-based payment arrangements,
the awards measured at grant value are recognized
as employee costs over the vesting period against a
liability in the balance sheet. The liability is remeas-
ured at each reporting date and ultimately at settle-
ment date at fair value. Any changes in the liability
as a result of the remeasurement to fair value are
recognized in the income statement under financial
expenses.
125LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 6.3 Guarantees, contingencies and commitments
Section 6 Other disclosures
Guarantees
The majority of the guarantees in LEO Pharma pertain to
performance guarantees related to tender sales. The total
guarantee commitments for LEO Pharma amount to DKK
68m at December 31, 2025 (2024: DKK 110m).
Contractual obligations and commitments
LEO Pharma's contractual obligations, not recognized in
the consolidated financial statements, mainly comprise
milestone payments for the development of new products
related to acquisition of intellectual property rights. At
December 31, 2025, potential future research and de-
velopment milestone payments and commitments under
collaboration amount to DKK 978m (2024: DKK 92m).
The timing of these payments is uncertain, as part of the
obligations depends on the achievement of specific devel-
opment and regulatory milestones.
Commercial sales milestones, royalties and other
sales-based payments are excluded from contractual
obligations, as they are contingent on future sales perfor-
mance.
Commitments for intangible assets other than research
and development milestones and collaborations relate to
software and amount to DKK 113m (2024: DKK 92m).
Commitments relating to property, plant and equipment
amount to DKK 12m at December 31, 2025 (2024:
DKK 39m) and relate primarily to manufacturing sites.
LEO Pharma has agreements with contract manufacturing
organizations (CMOs) for the supply of active pharma-
ceutical ingredients (APIs) and other materials, based on
demand forecasts provided by the Group. If actual market
demand falls below forecasted volumes, the Group may
be obligated to pay for surplus materials or excess ca-
pacity reservation fees. Management regularly reviews
and updates demand forecasts, and when inventory or
reserved capacity at CMOs is expected to exceed usage, a
provision is recognized.
Pending lawsuits
At the end of 2025, there are pending lawsuits filed by and
against LEO Pharma concerning rights and claims related
to products in LEO Pharma’s portfolio. LEO Pharma cur-
rently does not expect these or other pending cases to
have any significant effect on the Group’s financial posi-
tion.
LEO Pharma is involved in a number of legal proceedings.
In the opinion of Management, the outcome of these
proceedings is not currently assessed to have a material
impact on the financial position or cash flows. Such pro-
ceedings may, however, develop over time, and new pro-
ceedings may occur that could have a material impact on
LEO Pharma’s financial position and/or cash flows.
Tax
As a global business, LEO Pharma will from time to time
have tax audits, and engages in discussions with tax au-
thorities in various jurisdictions on a range of tax matters,
transfer pricing and indirect taxes.
Note 6.4 Fees to statutory auditors
Note 6.5 Other cash flow specifications
(DKK million) 2025 2024
Statutory audit 8 8
Other assurance services 2 0
Tax advisory services 2 4
Other services 3 1
Total 15 13
LEO Pharma’s Audit Committee pre-approves use of non-audit services from statutory auditors and pursues a 1:1 ratio
between total non-audit cost and total statutory audit cost.
(DKK million) 2025 2024
Other non-cash adjustments
Change in provisions (196) 415
Change in provision for defined benefit plans (47) (63)
Change in inventory write-downs 146 (93)
Change in provision for bad debt - 1
Share-based payment 9 14
Other non-cash items 78 48
Total (10) 322
Change in working capital
Change in inventories 777 (15)
Change in receivables, prepaid expenses etc. (586) (180)
Change in trade payables and other payables (341) 669
Total (150) 474
126LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Section 6 Other disclosures
Note 6.6 Related party transactions
Transactions with related parties
(DKK million) 2025 2024
LEO Foundation
Other income 0 0
LEO Holding A/S
Tax settlement 332 171
Board of Directors
Reimbursement of travel expenses etc. (1) (1)
Purchase of B-shares 1 -
Consultancy fees (6) (1)
LEO Pharma A/S's controlling owner, LEO Holding A/S,
and the ultimate parent of the Group, the LEO Foundation,
own 81.1% of the outstanding share capital (95.9% of the
votes). Nordic Capital, through Cidron Savanna 4 SARL,
owns 18.7% of the outstanding share capital, represent-
ing 4.0% of the voting rights.
The LEO Pharma Group is included in the consolidated
financial statements of the LEO Foundation.
LEO Pharma owns 22% of the voting shares in Skinvision
B.V. The investment is classified as an associate in the
consolidated financial statements. There were no transac-
tions with Skinvision B.V. in 2025 or 2024.
LEO Pharma A/S' related parties also comprise the
members of the LEO Foundation’s Board of Trustees and
Executive Board, and of LEO Pharma A/S’ and LEO Holding
A/S’ Board of Directors and Global Leadership Team, as
well as close relatives of these persons.
Fair value remeasurement (non-cash) of financial liability
arising from historical granted programs from 2021 and
2022 to key management personnel including Global
Leadership Team totals DKK 16m (2024: DKK 0m). The
impact is due to fair-value remeasurement of the manage-
ment incentive program reflecting higher valuation of the
company.
In 2025, Board of Directors' consultancy fees include DKK
5m for Mark Levick as interim Head of Development for a
period of time until Sophie Lamle joined LEO Pharma in
December 2025. In addition, the Chairman, through his
private consultancy firm JBR Counselling A/S, received
DKK 1m in 2025 for IPO advisory services to LEO Pharma.
This consultancy arrangement expires in connection with
an IPO of LEO Pharma.
Please refer to Note 6.1 Management remuneration and
Note 6.2 Share-based payment regarding other transac-
tions with the Board of Directors.
Note 6.7 Events after the balance sheet date
No significant events have occurred after the balance
sheet date.
127LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Note 6.8 Company overview
Section 6 Other disclosures
Country
Share of
ownership (%) Activities Country
Share of
ownership (%) Activities
Sales and distribution
Production
Marketing & services
Other
Parent Company
LEO Pharma A/S Denmark
Subsidiaries
SARL LEO Pharma
1
Algeria 100
LEO Pharma Pty Ltd Australia 100
LEO Pharma GmbH Austria 100
LEO Pharma N.V. Belgium 100
LEO Pharma LTDA Brazil 100
LEO Pharma Inc. Canada 100
LEO Pharma Consultancy Company Ltd. China 100
LEO Pharma Trading Company Ltd. China 100
LEO Pharma s.r.o. Czech Republic 100
Løvens Kemiske Fabriks Handelsaktieselskab Denmark 100
LEO Pharma OY Finland 100
Laboratoires LEO S.A.S France 100
LEO Pharma GmbH Germany 100
LEO Pharmaceutical Hellas S.A. Greece 100
DKLEO Pharma Private Limited
1
India 100
LEO Laboratories Ltd. Ireland 100
Wexport Ltd. Ireland 100
LEO Pharma Holding Ltd. Ireland 100
LEO Pharma Manufacturing Italy S.R.L. Italy 100
LEO Pharma S.p.A. Italy 100
LEO Pharma K.K. Japan 100
LEO Pharmaceuticals, S. de R.L. de C.V. Mexico 100
LEO Pharma LLC
1
Morocco 100
LEO Pharma BV Netherlands 100
LEO Pharma Ltd. New Zealand 100
LEO Pharma AS Norway 100
LEO Pharma Sp. z o.o. Poland 100
LEO Pharma Global Business Service Center Sp. z o.o. Poland 100
LEO Farmacêuticos Lda. Portugal 100
LEO Pharmaceutical Products LLC Russia 100
LEO Pharma Yuhan Hoesa South Korea 100
Laboratorios LEO Pharma S.A. Spain 100
LEO Pharma AB Sweden 100
LEO Pharmaceutical Products Sarath Ltd. Switzerland 100
LEO Laboratories Ltd. United Kingdom 100
LEO Pharma Inc. USA 100
Timber Pharmaceuticals Inc. USA 100
LEO US Holding Inc. USA 100
Associates
SkinVision B.V. Netherlands 22
1
Under liquidation.
128LEO Pharma Annual Report 2025 Financial statements → Consolidated financial statements
Statements and reports
Parent Company financial statements
Statements
and reports
Statement of the Board of Directors
and Executive Management 130
Independent Auditor's report 131
Independent auditor's limited assurance
report on selected disclosures in
the sustainability statement 133
129LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
→ Statements and reports
Parent Company financial statements
Statement of the Board of Directors and Executive Management
Registered Executive Management:
Board of Directors:
130LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
→ Statements and reports
Parent Company financial statements
Independent Auditor's report
131LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
→ Statements and reports
Parent Company financial statements
CVR No. 3396 355 6
Identification No
(MNE) mn e25299
Identification No
(MNE) mne3453 2
132LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
→ Statements and reports
Parent Company financial statements
133LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
→ Statements and reports
Parent Company financial statements
Independent auditor's limited assurance report on selected disclosures in the sustainability statement
Business Registration No. 33 96 35 56
Identification No
(MNE) mn e25299
Identification No
(MNE) mne3453 2
134LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
→ Statements and reports
Parent Company financial statements
Parent
Company
financial
statements
Income statement 135
Balance sheet 136
Statement of changes in equity 137
Notes 138
135LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
Statements and reports
→ Parent Company financial statements
Consolidated financial statements
Statements
→ Parent Company financial statements
Income statement
January 1 - December 31
Parent Company financial statements
(DKK million) Note 2025 2024
Revenue 2.1 11,497 13,298
Cost of sales 2.2, 3.1, 3.2 (8,103) (9,359)
Gross profit 3,394 3,939
Sales and distribution costs 2.2, 3.1, 3.2 (2,656) (4,038)
Research and development costs 2.2, 3.1, 3.2 (1,231) (2,102)
Administrative costs 2.2, 3.1, 3.2 (871) (880)
Other operating income, net 2.3 1,743 2
Operating profit/(loss) (EBIT) 379 (3,079)
Income from investments in subsidiaries 3.3 1,676 1,256
Financial income 5.1 156 253
Financial expenses 5.1 (711) (925)
Profit/(loss) before tax 1,500 (2,495)
Income tax 2.4 973 694
Net profit/(loss) 2.5 2,473 (1,801)
136LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
Statements and reports
→ Parent Company financial statements
Balance sheet
at December 31
Parent Company financial statements
(DKK million) Note 2025 2024
Assets
Goodwill 3.1 111 123
Intangible assets 3.1 4,468 4,663
Property, plant and equipment 3.2 2,551 2,598
Investments in subsidiaries 3.3 5,190 5,456
Deferred tax assets 2.4 1,650 746
Pensions 19 11
Other financial assets 102 194
Non-current assets 14,091 13,791
Inventories 4.1 2,470 2,982
Loans to subsidiaries 670 1,478
Trade receivables 639 604
Receivables from subsidiaries 1,033 554
Tax receivables 123 398
Other receivables 314 215
Prepaid expenses 89 148
Cash 23 16
Current assets 5,361 6,395
Assets 19,452 20,186
(DKK million) Note 2025 2024
Equity and liabilities
Share capital 384 383
Net revaluation, subsidiaries 3,777 4,048
Reserves 518 562
Retained earnings 505 (2,351)
Equity 5,184 2,642
Loans and credit institutions 5.2 8,470 10,414
Provisions 4.3 49 70
Tax payables 1 65
Other non-current liabilities 5.2 217 389
Non-current liabilities 8,737 10,938
Loans and credit institutions 5.2 802 406
Trade payables 490 801
Provisions 4.3 75 114
Loans from subsidiaries 1,894 1,266
Payables to subsidiaries 854 2,639
Tax payables 125 65
Other payables 4.2 1,291 1,315
Current liabilities 5,531 6,606
Liabilities 14,268 17,544
Equity and liabilities 19,452 20,186
137LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
Statements and reports
→ Parent Company financial statements
Parent Company financial statements
2025 2024
Reserves Reserves
(DKK million)
Share
capital
Net
revaluation,
subsidiaries
Cash flow
hedges
Develop ment
projects
Retained
earnings Total
Share
capital
Net
revaluation,
subsidiaries
Cash flow
hedges
Develop ment
projects
Retained
earnings Total
Equity at January 1 383 4,048 (75) 637 (2,351) 2,642 383 2,877 20 895 313 4,488
Net profit/(loss) - 1,676 - - 797 2,473 - 1,256 - - (3,057) (1,801)
Foreign exchange adjustment, subsidiaries - (28) - - - (28) - (31) - - - (31)
Dividend received from subsidiaries - (1,887) - - 1,887 - - (51) - - 51 -
Other movements in subsidiaries - (11) - - 11 - - (29) - - 29 -
Capitalized development costs, net - - - (116) 116 - - - - (258) 258 -
Adjustment of cash flow hedges - - 92 - - 92 - - (122) - - (122)
Remeasurement of defined benefit obligations - (17) - - 5 (12) - 31 - - (4) 27
Tax on changes in equity - (4) (20) - (1) (25) - (5) 27 - 1 23
Transactions with owners
Capital increase 1 - - - (1) 0 0 - - - 29 29
Purchase of treasury shares - - - - (7) (7) - - - - (9) (9)
Sale of treasury shares - - - - 4 4 - - - - 0 0
Share-based payment - - - - 45 45 - - - - 38 38
Total transactions with owners 1 - - - 41 42 0 - - - 58 58
Equity at December 31 384 3,777 (3) 521 505 5,184 383 4,048 (75) 637 (2,351) 2,642
Statement of changes in equity
January 1 - December 31
138LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
Statements and reports
→ Parent Company financial statements
4 Operating assets and liabilities
4.1 Inventories 145
4.2 Other payables 145
4.3 Provisions 145
5 Capital structure and financing
5.1 Financial income and expenses 146
5.2 Loans and credit institutions, and other
non-current liabilities 146
6 Other disclosures
6.1 Guarantees, contingencies and commitments 147
6.2 Events after the balance sheet date 147
1 Basis of reporting
1.1 Basis of preparation 140
2 Operating profit and tax
2.1 Revenue 141
2.2 Employee costs 141
2.3 Other operating income 141
2.4 Tax 141
2.5 Proposed distribution of net profit/(loss) 141
3 Invested capital
3.1 Goodwill and intangible assets 142
3.2 Property, plant and equipment 143
3.3 Investments in subsidiaries 144
Notes
Parent Company financial statements
139LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
Statements and reports
→ Parent Company financial statements
Note 1.1 Basis of preparation
Section 1 Basis of reporting
Basis of preparation
The Parent Company’s financial statements are presented
in accordance with the Danish Financial Statements Act
for companies in reporting class C (large).
Accounting policies
The accounting policies of the Parent Company are con-
sistent with the accounting policies of the Group, except
for IFRS 16 Leases and the treatment of goodwill. In addi-
tion, the policies described below have been implemented
for the Parent Company. The accounting policies are un-
changed from last year.
General information
In accordance with the exemption clauses in section 86(4)
and section 96(3) of the Danish Financial Statements Act,
no separate cash flow statement or disclosure of audit fee
has been prepared for the Parent Company.
Goodwill
Goodwill is measured at cost less accumulated amorti-
zation and impairment. Amortization is calculated using
the straight-line method over the expected useful life,
estimated at 15 years. This estimate was based on the
estimated useful lives of the other assets acquired in the
transaction.
Investments in subsidiaries
In the Parent Company’s financial statements, invest-
ments in subsidiaries and associates are recognized
according to the equity method. The share of the results
of subsidiaries less unrealized intra-group gains is rec-
ognized in the Parent Company’s income statement. Net
revaluation of investments in subsidiaries exceeding the
dividend declared by such companies is recognized in
equity as reserve for net revaluation according to the
equity method.
Tax
The Parent Company, the Danish subsidiary and LEO
Holding A/S are jointly taxed. The Parent Company and
its Danish subsidiary settle the tax with the owner and
administration company, LEO Holding A/S. The current
Danish tax is allocated between the jointly taxed compa-
nies in proportion to their taxable income.
Equity reserve for development costs
The reserve for internal development costs comprises
capitalized development costs. This reserve cannot be
used for dividends or distributions or to cover losses. If
the recognized development costs are sold or otherwise
excluded from the company’s operations, the reserve will
be dissolved and transferred directly to the distributable
reserves under equity. If the recognized development
costs are written down, the part of the reserve corre-
sponding to the write-down of the development costs
will be reversed. If a write-down of development costs is
subsequently reversed, the reserve will be re-established.
The reserve is reduced by amortization of capitalized de-
velopment costs on an ongoing basis.
Leases
Leases under which substantially all risks and rewards
of ownership are transferred to the Parent Company are
classified as finance leases, while all other leases are
classified as operating leases. No finance leases have
been recognized in the Parent Company’s financial state-
ments. Payments under operating leases are recognized
in the income statement on a straight-line basis over the
lease term.
140LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
Statements and reports
→ Parent Company financial statements
Note 2.1 Revenue
Section 2 Operating profit and tax
(DKK million) 2025 2024
Europe 6,932 8,595
North America 1,896 2,319
Rest of World 2,669 2,384
Total by region 11,497 13,298
Products 10,958 12,897
Sales-based royalties 539 401
Total by category 11,497 13,298
Note 2.2 Employee costs
(DKK million) 2025 2024
Wages and salaries 1,024 1,112
Pensions 97 108
Share-based payment 17 32
Social security expenses 7 9
Other employee expenses 30 31
Total employee costs 1,175 1,292
Of which capitalized as intangible assets (10) (19)
Total employee costs in the income statement 1,165 1,273
Employee costs included in:
Cost of sales and change in employee costs included in inventories 328 276
Sales and distribution costs 214 163
Research and development costs 293 314
Administrative costs 330 520
Total 1,165 1,273
Average number of full-time employees 1,045 1,189
Please also refer to Note 2.2 Employee costs, Note 6.1 Management remuneration and Note 6.2 Share-based payment in
the consolidated financial statements.
Note 2.4 Tax
(DKK million) 2025 2024
Current tax for the year 121 349
Change in deferred tax 904 373
Prior-year adjustments, current tax (73) -
Total tax income/(expense) for the year 952 722
Tax for the year is included in:
Tax on profit/(loss) for the year 973 694
Tax on changes in equity (21) 28
Deferred tax assets at January 1 746 373
Deferred tax on other comprehensive income (11) 5
Deferred tax on profit for the year 915 368
Deferred tax assets at December 31 1,650 746
Please refer to Note 2.4 Tax in the consolidated financial statements.
Note 2.5 Proposed distribution of net profit/(loss)
(DKK million) 2025 2024
Net revaluation 1,676 1,256
Retained earnings 797 (3,057)
Total 2,473 (1,801)
Note 2.3 Other operating income
Other operating income includes DKK 1,739m net gain from sale of assets related to the upfront payment from the strategic
partnership with Gilead Sciences entered into on January 11, 2025. Please refer to Note 2.3 Other operating income and
expenses in the consolidated financial statements.
141LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
Statements and reports
→ Parent Company financial statements
Note 3.1 Goodwill and intangible assets
Section 3 Invested capital
2025 2024
(DKK million) Goodwill
Intellectual
property rights Software
Develop ment
projects and
software in
progress Total Goodwill
Intellectual
property rights Software
Develop ment
projects and
software in
progress Total
Cost at January 1 192 14,012 2,534 121 16,859 192 13,912 2,885 209 17,198
Additions - 825 - 42 867 - - - 153 153
Disposals - - (183) - (183) - - (388) (104) (492)
Transfers - - 3 (3) - - 100 37 (137) -
Cost at December 31 192 14,837 2,354 160 17,543 192 14,012 2,534 121 16,859
Amortization and impairment at January 1 (69) (10,256) (1,645) (103) (12,073) (56) (9,519) (1,679) (9) (11,263)
Amortization (12) (710) (333) - (1,055) (13) (737) (350) - (1,100)
Disposals - - 183 - 183 - - 388 104 492
Impairment - - (50) - (50) - - (4) (198) -
Impairment reversals - 31 - - 31 - - - - (202)
Amortization and impairment at December 31 (81) (10,935) (1,845) (103) (12,964) (69) (10,256) (1,645) (103) (12,073)
Carrying amount at December 31 111 3,902 509 57 4,579 123 3,756 889 18 4,786
(DKK million) 2025 2024
Amortization is specified as follows:
Cost of sales 9 31
Sales and distribution costs 738 759
Research and development costs 66 54
Administrative costs 242 256
Total 1,055 1,100
Please refer to Note 3.1 Goodwill and intangible assets in the consolidated financial statements.
142LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
Statements and reports
→ Parent Company financial statements
Note 3.2 Property, plant and equipment
Section 3 Invested capital
2025 2024
(DKK million)
Land and
buildings
Plant and
machinery
Other fixtures
and fittings,
tools and
equipment
Assets under
construction Total
Land and
buildings
Plant and
machinery
Other fixtures
and fittings,
tools and
equipment
Assets under
construction Total
Cost at January 1 1,209 1,421 325 1,855 4,810 1,209 1,407 379 1,767 4,762
Additions - 1 13 88 102 - - 3 102 105
Disposals (1) (19) (16) - (36) - - (57) - (57)
Transfers 303 1,543 79 (1,925) - - 14 - (14) -
Cost at December 31 1,511 2,946 401 18 4,876 1,209 1,421 325 1,855 4,810
Depreciation and impairment at January 1 (770) (1,170) (272) - (2,212) (745) (1,083) (295) - (2,123)
Disposals 1 16 15 - 32 - - 57 - 57
Depreciation (26) (86) (20) - (132) (25) (87) (24) - (136)
Impairment - (3) (10) - (13) - - (10) - (10)
Depreciation and impairment at December 31 (795) (1,243) (287) - (2,325) (770) (1,170) (272) - (2,212)
Carrying amount at December 31 716 1,703 114 18 2,551 439 251 53 1,855 2,598
(DKK million) 2025 2024
Depreciation and impairment are specified as follows:
Cost of sales 116 111
Sales and distribution costs 1 1
Research and development costs 10 25
Administrative costs 18 9
Total 145 146
Transfers of assets under construction mainly relate to
a new manufacturing facility in Ballerup, Denmark, at a
carrying amount of DKK 1,909m (2024: assets under con-
struction of DKK 1,843m).
Assets pledged as collateral for loans amounted to DKK
2,388m (2024: DKK 2,502m).
143LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
Statements and reports
→ Parent Company financial statements
Note 3.3 Investments in subsidiaries
Section 3 Invested capital
(DKK million) 2025 2024
Cost at January 1 1,408 1,379
Additions 0 19
Disposals (0) (2)
Other movements 5 12
Cost at December 31 1,413 1,408
Value adjustment at January 1 4,048 2,877
Exchange rate adjustment (28) (31)
Share of profit/(loss) 1,676 1,256
Dividend (1,887) (51)
Other movements (32) (3)
Value adjustment at December 31 3,777 4,048
Carrying amount at December 31 5,190 5,456
144LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
Statements and reports
→ Parent Company financial statements
Note 4.1 Inventories
Note 4.2 Other payables
Section 4 Operating assets and liabilities
(DKK million) 2025 2024
Raw materials and consumables 662 821
Work in progress 876 1,266
Finished goods and goods for resale 932 895
Total 2,470 2,982
(DKK million) 2025 2024
Accrued clinical trial expenses 406 241
Employee-related 195 196
Sales deductions 125 120
Royalties 106 74
Financial derivatives 50 113
Deferred revenue 31 150
Public authorities 9 13
Other accruals and payables 369 408
Total 1,291 1,315
Note 4.3 Provisions
(DKK million)
Employee-
related
provisions
Other
provisions
Sales
deductions
2025
Total
2024
Total
Provisions at January 1 74 105 5 184 116
Exchange rate adjustment (3) - - (3) 1
Additions 52 3 - 55 194
Utilization (47) (55) - (102) (110)
Reversals - (5) (5) (10) (21)
Transfer - - - - 4
Provisions at December 31 76 48 - 124 184
Of which classified as:
Current liabilities 27 48 - 75 114
Non-current liabilities 49 - - 49 70
Provisions at December 31 76 48 - 124 184
145LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
Statements and reports
→ Parent Company financial statements
Note 5.1 Financial income and expenses Note 5.2 Loans and credit institutions, and other non-current
liabilities
Section 5 Capital structure and financing
(DKK million) 2025 2024
Interest income, related parties 37 134
Other interest income 22 29
Gain arising on forward foreign exchange contracts 78 61
Interest hedges - 22
Foreign exchange gain, net 18 -
Other financial income 1 7
Financial income 156 253
Interest expenses, related parties 71 32
Interest expenses, credit institutions 473 732
Interest hedges 26 -
Fair value adjustment of cash-settled share-based incentives 26 25
Foreign exchange losses, net - 62
Other financial expenses 115 74
Financial expenses 711 925
Other financial expenses primarily comprise commitment
fees related to the syndicated facility agreement.
(DKK million) 2025 2024
Bank loans 7,0 33 8,582
Mortgage loans 2,239 2,238
Other non-current liabilities 217 389
Total 9,489 11,209
Falling due:
In less than one year 34 22
Between one and five years 6,999 8,561
After five years 2,456 2,626
Total 9,489 11,209
For financial risks, please refer to Note 5.2 Financial risks
in the consolidated financial statements.
For disclosures on assets measured at fair value, please
refer to Note 5.4 Financial assets and liabilities by catego-
ry in the consolidated financial statements.
146LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
Statements and reports
→ Parent Company financial statements
Note 6.1 Guarantees, contingencies and commitments
Section 6 Other disclosures
Guarantees
The total guarantee commitment for the Parent Company
at December 31, 2025 amounts to DKK 340m (2024: DKK
361m), including guarantees issued to subsidiaries of DKK
282m (2024: DKK 304m), of which DKK 257m relates to
pension obligations (2024: DKK 270m).
In addition to the guarantees for subsidiaries, the Parent
Company has issued guarantees related to various com-
mercial activities, including for tenders.
Contractual obligations and commitments
LEO Pharma A/S´s contractual obligations not recognized
in the consolidated financial statements mainly comprise
milestone payments for the development of new products
related to the acquisition of intellectual property rights.
At December 31, 2025, potential future research and de-
velopment milestone payments and commitments under
collaboration amount to DKK 978m (2024: DKK 92m).
The timing of these payments is uncertain, as parts of the
obligations depends on the achievement of specific devel-
opment and regulatory milestones.
Commercial sales milestones, royalties and other
sales-based payments due after marketing approval are
excluded from contractual obligations, as they are contin-
gent on future sales performance.
Commitments for intangible assets other than R&D
milestones and collaborations is related to software and
amount to DKK 113m (2024: DKK 92m).
LEO Pharma A/S has agreements with contract manufac-
turing organizations (CMOs) for the supply of active phar-
maceutical ingredients (APIs) and other materials, based
on demand forecasts provided by the company. If actual
market demand falls below the forecasted volumes, LEO
Pharma A/S may be obligated to pay for surplus materials
or excess capacity reservation fees. Management regu-
larly reviews and updates demand forecasts, and when
inventory or reserved capacity at CMOs is expected to
exceed usage, a provision is recognized.
Pending lawsuits
At December 31, 2025, there are pending lawsuits filed
by and against LEO Pharma A/S concerning rights and
claims related to products in LEO Pharma’s portfolio. LEO
Pharma A/S currently does not expect the pending cases
to have any significant effect on the Parent Company’s
financial position.
LEO Pharma A/S is involved in a number of legal pro-
ceedings. In the opinion of Management, the outcome of
these proceedings will not have a material impact on the
financial position or cash flows. Such proceedings will,
however, develop over time, and new proceedings may
occur that could have a material impact on LEO Pharma’s
financial position and/or cash flows.
Note 6.2 Events after
the balance sheet date
No significant events have occurred after the balance
sheet date.
Tax
The Parent Company is jointly taxed with its Danish
subsidiary and its owner, LEO Holding A/S. The Parent
Company is jointly and severally liable together with the
other companies in the joint taxation scheme for Danish
corporate taxes and withholding taxes on dividends, inter-
est and royalties.
As a global business, LEO Pharma will from time to time
have tax audits and discussions with tax authorities in
various countries concerning tax matters. For a descrip-
tion of uncertain tax positions, please refer to Note 2.4
Tax in the consolidated financial statements.
Operating lease obligations
LEO Pharma A/S has lease obligations of DKK 30m at
December 31, 2025 (2024: DKK 33m), of which DKK 26m
is related to lease of office premises from a subsidiary
(2024: DKK 25m).
147LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
Statements and reports
→ Parent Company financial statements
Glossary
Financial terms used in the Annual Report
Adjusted EBITDA and adjusted EBITDA margin (%)
Please refer to Note 1.3 Non-IFRS measures.
Average number of full-time employees (FTE)
Calculated as the average of the number of permanent
employees at the end of each month.
Earnings Per Share (EPS) / Diluted Earnings Per
Share (DEPS)
Please refer to Note 5.5 Equity.
EBITDA and EBITDA margin (%)
Please refer to Note 1.3 Non-IFRS measures.
Effective tax rate (%)
Income tax as a percentage of profit/(loss) before tax.
Free cash flow
Please refer to the cash flow statement.
Global Leadership Team
Please refer to Corporate matters, Global Leadership
Team in Management's review.
Gross margin (%)
Reported gross profit as a percentage of revenue.
Net interest-bearing debt (NIBD)
Please refer to Note 5.2 Financial risks.
Net working capital
Inventories, trade receivables and other receivables less
trade payables and other payables.
Operating net working capital
Inventories and trade receivables (before provision for
bad debt) less trade payables.
Operating profit/(loss) (EBIT) / EBIT margin (%)
Earnings before financial income and expenses and tax /
earnings before financial income and expenses and tax in
percentage of revenue.
OPEX ratio (%)
Operating expenses excluding other operating income, net
as percentage of revenue.
Organic revenue growth (%)
Please refer to Note 1.3 Non-IFRS measures.
148LEO Pharma Annual Report 2025 Financial statements Consolidated financial statements
Statements and reports
→ Parent Company financial statements
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