Hikma Pharmaceuticals Plc · LSE:HIK
Hikma Pharmaceuticals — FY2019 Earnings Presentation
33 slides from Hikma Pharmaceuticals's earnings presentation, 2020
Slide 1: 2019 Preliminary Results
Better health. Within reach. Every day. Hikma Pharmaceuticals PLC 2019 Preliminary Results
Slide 2: Disclaimer
Disclaimer Save to the extent required by law, neither Hikma Pharmaceuticals PLC nor any of its affiliates (Hikma), nor any other party, is under any duty to update or inform you of any changes to such information. In particular, it should be noted that the financial information relating to Hikma co
Slide 3: Strong Group core revenue and profit growth
Strong Group core revenue and profit growth Core1 Core Core operating Core basic Operating revenue operating profit profit margin earnings per share cash flow $2,203m $508m 23.1% 150.4¢ $472m 1 Core results are presented to show the underlying performance of the Group, excluding exceptional items an
Slide 4: Injectables
Injectables
Slide 5: Driving growth from new launches and our resilient base business
Driving growth from new launches and our resilient base business Injectables 2019 key core revenue drivers Contribution of new launches in US $890m Products launched over last 4 years contribute $832m 23% of 2019 US Injectables revenue US Injectables pipeline of 126 products1 Complex products Other
Slide 6: Benefitting from a diversified portfolio and quality operations
Benefitting from a diversified portfolio and quality operations US Injectables core revenue from top 10 products US Injectables portfolio by number of competitors $700 29% $600 $500 21% $400 59% $300 54% 46% 45% 29% $200 21% $100 $0 2016 2017 2018 2019 Top 10 All other ≤2 3-5 6-8 ≥9 Hikma Pharmaceut
Slide 7: Strong growth in MENA and Europe
Strong growth in MENA and Europe MENA and Europe Injectables revenue Growth accelerating in MENA and Europe 2016-2019 (million) $300 Continued to drive demand 254 for Remsima® and launched $250 Herzuma® in MENA 225 $200 190 174 Initiated production in our new high containment operation $150 (HCO) fa
Slide 8: Generics
Generics
Slide 9: Benefitting from operational and commercial enhancements
Benefitting from operational and commercial enhancements Commercial Operational Portfolio capabilities efficiencies optimisation • Continued to drive • Reduced cost base • Streamlined our portfolio demand for our through the consolidation to focus on higher value differentiated portfolio of our faci
Slide 10: Focusing on building a pipeline of complex products to drive future growth
Focusing on building a pipeline of complex products to drive future growth Generics pipeline Addressable market size c.$29 billion1,2 • 30 products 33% Filed • Includes naloxone nasal spray, generic Xyrem®, generic Advair Diskus® and generic Vascepa® • Potential launch dates from 2020 • 26 products
Slide 11: Strengthening our position as leading supplier of nasal sprays
Strengthening our position as leading supplier of nasal sprays Number 1 supplier of prescription nasal sprays in the US1 Naloxone Acquired two complex products from Insys – naloxone c.$2 billion nasal spray market projected to grow and epinephrine 505(b)(2)s – and complementary unit- dose nasal spra
Slide 12: Branded
Branded
Slide 13: Leveraging our leading position in MENA to drive growth
Leveraging our leading position in MENA to drive growth Maintaining our MENA-wide coverage while prioritising largest opportunities Commercial Syria excellence Tunisia Lebanon Iraq Jordan Morocco Kuwait Algeria Bahrain Libya Qatar Egypt UAE Saudi High-quality local Arabia manufacturing Oman Sudan Ye
Slide 14: Focusing R&D on key markets and therapeutic areas
Focusing R&D on key markets and therapeutic areas Pipeline by top 5 markets Pipeline by market1 Pipeline by key therapeutic area1 Adding differentiated products through licensing 9% 12% Bufomix easyhaler 23% 3% 25% 5% – In-licensed from Orion. Launched in Jordan 6% – Expect to launch in 3 addition
Slide 15: Group
Group
Slide 16: Delivering sustainable growth
Delivering sustainable growth Our focus Our priorities Deliver more from a strong foundation Growing our Ensuring full Controlling costs and existing business quality compliance improving processes Build a portfolio that anticipates future needs Building portfolio Investing in momentum specialty pro
Slide 17: Finance
Finance Khalid Nabilsi, Chief Financial Officer
Slide 18: Group financial highlights
Group financial highlights 2018 2019 % change Core1 revenue $2,076 million $2,203 million +6% Core gross profit $1,072 million $1,144 million +7% Core operating profit $460 million $508 million +10% Core EBITDA2 $549 million $593 million +8% Core net income $332 million $364 million +10% Core basic
Slide 19: Injectables
Injectables Core revenue Core operating profit Core revenue (million) (million) Strong demand for in-market products in the US $1,000 $400 $890 1% Good growth in MENA and good contribution from $900 7% $832 biosimilars $108 $300 $335 $338 $800 $105 Launched new products across all markets $146 $700
Slide 20: Generics
Generics Core revenue Core operating profit Core revenue (million) (million) $800 Strong demand for differentiated products $120 4% 33% 124 Increased competition and continued price erosion $700 $719 $100 $692 $80 93 $600 $60 $500 $40 Core operating profit $400 $20 Improved product mix $300 $0 2018
Slide 21: Branded
Branded Core revenue Core operating profit Core revenue (million) (million) ● Constant currency ● Constant currency Strong growth in our largest markets, Saudi Arabia $650 $140 and Egypt, and good growth across most other $600 10% MENA markets 8% $120 $129 $550 $583 $117 3% $100 New product launches
Slide 22: Core R&D and capital expenditure
Core R&D and capital expenditure Core R&D Capital expenditure (million) (million) $140 $126 $120 $119 $118 $107 $120 $100 $36 $45 $100 $80 US $80 $60 $63 $60 $44 $40 MENA $40 $20 $20 $18 Europe $20 $0 $0 2018 2019 2018 2019 ● Invested 6% of Group core revenue in core R&D ● Upgrading capabilities and
Slide 23: Cash flow and balance sheet
Cash flow and balance sheet Operating cash flow Net debt position (million) (million) Dec-18 Dec-19 $500 $472 Short-term financial debts1 $75 $578 $430 $450 Long-term financial debts2 $562 $107 $400 Cash, cash equivalents and $276 $443 restricted cash $350 Net debt $361 $2423 $300 \\\\\\\\\\\\\\\\\\
Slide 24: Expecting continued revenue and profit growth in 2020
Expecting continued revenue and profit growth in 2020 2020 guidance Injectables Generics Branded ● Revenue: ● Revenue: ● Revenue growth in constant low to mid-single digit growth $700 million to $750 million, currency: ● Core operating margin: including $20 million to $40 million from generic Advair
Slide 25: Appendix
Appendix
Slide 26: 2019 exceptional items and other adjustments
2019 exceptional items and other adjustments Bridge between 2019 core and reported operating profit Bridge between 2019 core and reported net income (million) (million) $(15) million $122 million $508 $1 $486 $24 $4 $493 $13 $7 $20 $34 $7 $32 $97 $364 $45 $15 $4 Core R&D Jordan MENA Intangible Conti
Slide 27: 2020 exceptional items and other adjustments
2020 exceptional items and other adjustments Bridge between 2020 core and reported operating profit Bridge between 2020 core and reported net income (million) (million) $(50) million $(50) million $50 $45 $5 $14 $14 Intangible MENA Core net Amortisation and Remeasurement Tax impact on Reported Core
Slide 28: Group core revenue by segment and region
Group core revenue by segment and region 2019 Group core revenue by segment 2019 Group core revenue by region US Injectables 61% 40% Generics 33% Other MENA EU & ROW Branded 1% 33% 6% 26% Hikma Pharmaceuticals PLC 28 Sensitivity: General
Slide 29: Core finance expense
Core finance expense 2019 core finance expense (million) $60 $52 $50 13 Other bank charges $40 17 Interest on bank $30 overdrafts, loans and Effective interest rate: leases 4.76% (excluding commitment, upfront, and amortised fees) $20 22 Interest on Eurobond ($500m) Effective interest rate: $10 6.00
Slide 30: Consolidated P&L
Consolidated P&L % constant $ million 2018 2019 % change currency change Revenue 2,070 2,207 +7% +6% Core revenue 2,076 2,203 +6% +6% Gross profit 1,050 1,148 +9% +8% Core gross profit 1,072 1,144 +7% +6% Core gross margin 51.6% 51.9% +0.3pp +0.1pp Operating profit 371 493 +33% +31% Core operating p
Slide 31: Consolidated cash flow statement
Consolidated cash flow statement $ million 2018 2019 Cash generated from operations 493 580 Income taxes paid (63) (125) Income tax received - 17 Net cash inflow from operating activities 430 472 Purchases of property, plant and equipment (107) (119) Proceeds from disposal of property, plant and equ
Slide 32: Consolidated balance sheet
Consolidated balance sheet $ million Dec-18 Dec-19 $ change % change Goodwill 279 282 3 1% Other intangible assets 487 552 65 13% Property, plant and equipment 870 912 42 5% Right-of-use assets - 50 50 100% Investment in associates and joint ventures 11 11 - - Deferred tax assets 125 243 118 94% Fin
Slide 33: Better health. Within Reach. Everyday.
Better health. Within Reach. Everyday. Hikma Pharmaceuticals PLC Sensitivity: General