Hikma Pharmaceuticals Plc · LSE:HIK
Hikma Pharmaceuticals — H1 2015 Earnings Presentation
32 slides from Hikma Pharmaceuticals's earnings presentation, Aug 19, 2015
Slide 1: H1 2015 Interim Results
Hikma Pharmaceuticals PLC H1 2015 Interim Results 19 August 2015
Slide 2: Disclaimer
► This document, which has been issued by Hikma Pharmaceuticals PLC (the “Company”), comprises the written materials/slides for a presentation. This document and its contents are confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or publis
Slide 3: A solid H1 performance with strong strategic momentum for future growth
A solid H1 performance with strong strategic momentum for future growth ► Acquisition of Roxane Laboratories will transform Hikma’s US business, establishing Hikma as the sixth1 largest US generics company ► Successful Integration of Bedford is delivering new approvals for US Injcetables ► Inaugural
Slide 4: Financials
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Slide 5: Consolidated P&L
Consolidated P&L Solid Group performance in H1 2015, in line with expectations $ million H1 2015 H1 2014 Change Revenue 709 738 -4% Gross profit 400 441 -9% Gross margin 56.4% 59.8% -3.4pp Operating profit 194 236 -18% Adjusted operating profit1 204 244 -16% Adjusted operating margin 28.8% 33.1% -4.
Slide 6: Branded: Good growth in revenue and profitability
Branded Good growth in revenue and profitability Revenue($ million) Adjusted1 operating profit ($ million) Constant currency Constant currency 80 301 300 67 +16% +24% 60 282 58 250 +9% 54 +7% 259 40 200 20 150 0 H1 2014 H1 2015 100 Operating margin H1 2015 50 H1 2014 H1 2015 Change Constant Chan
Slide 7: Injectables: Maintaining strong revenue and profitability
Injectables Maintaining strong revenue and profitability Revenue ($ million) Adjusted1 operating profit ($ million) 346 - 1% 344 350 160 +3% 38 35 140 146 142 300 43 40 120 268 266 100 250 80 200 60 40 150 20 100 0 H1 2014 H1 2015 50 Operating margin H1 2014 H1 2015 Change - H1 2014 H1 2015 Reported
Slide 8: Generics: Continued growth from legacy products
Generics Continued growth from legacy products and decline of specific market opportunities as expected Revenue ($ million) Adjusted1 operating profit ($ million) 85 140 75 78 128 65 120 - 58% 55 - 38% 100 45 35 33 80 25 79 15 60 5 -5 H1 2014 H1 2015 40 Operating margin 20 H1 2014 H1 2015 Change Rep
Slide 9: Cash flow
Cash flow Lower contribution from specific market opportunities Operating cash flow ($ million) ► Operating cash flow was $125 million, compared with 200 $200 million in H1 2014, reflecting the lower contribution 200 from specific market opportunities in the Generics 180 business - 38% 160 ► The pri
Slide 10: Capital expenditure
Capital expenditure Continued investment in quality and capacity for future growth Capital expenditure ($ million) ► Maintenance and expansion of our facilities 35 across the Group, including the US, Portugal, [Egypt, Jordan, Saudi Arabia, Sudan, and Tunisia] 31 31 30 5 6 ► Transferring manufacturin
Slide 11: Product related investments
Product related investments Expanding and enhancing our product portfolio Product related investments1 ($ million) R&D expenses 40 (P&L expense) ► In addition to R&D costs expensed to the P&L, we Product related continue to make product related investments that investment are capitalised on the
Slide 12: Balance sheet
Balance sheet Strong financing position Net debt position at 30 June 2015 ($ million) ► Net debt of $283 million, in line with end of 2014 500 495 - Increased cash from issuance of eurobond and cash generation in H1 2015 - Reduction in short term borrowing following 288 300 repayment of $225 million
Slide 13: Outlook for 2015
Outlook for 2015 Around 6% in constant currency, or around 2% reported if current exchange Group revenue rates prevail, reflecting the high end of our guidance range for the Generics business Growth in the low-teens in constant currency, or high single digits at current Branded exchange rates, and a
Slide 14: Branded
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Slide 15: Broadening our MENA product portfolio with leading OTC brands
Broadening our MENA product portfolio with leading OTC brands ► Agreement with Vitabiotics to market and distribute their leading nutraceutical and vitamin brands ► Exclusive rights to register, market, distribute and sell five of Vitabiotic’s leading specialist products in 15 MENA markets ► Exclusi
Slide 16: Higher value product launches and approvals across MENA and sub-Saharan Africa
Focusing on higher value product launches and approvals across MENA and sub-Saharan Africa H1 product launches and approvals 23 launches 25 Immuno-supp 70 approvals CNS Derm Cardiovascular Anti-infective Anti-inflammatory 20 19 18 15 CNS Oncology CNS CNS Cardio- Anti- Cardio- CNS 10 9 infective vasc
Slide 17: Injectables
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Slide 18: Successfully growing our US market share by value
Successfully growing our US market share by value US generic Injectables market share (million eaches) US generic injectables market share ($ million) 40% 37.8% 25% 35% 20% 19.3% 30% 25% 15% 12.9% 20% 10% 8.8% 15% 13.1% 12.4% 5.6% 5.0% 10% 4.8% 6.7% 5% 4.0% 3.9% 3.6% 3.5% 5% 3.3% 3.0% 2.2% 1.7% 1.5%
Slide 19: Successfully launching Bedford products in the US market
Successfully launching Bedford products in the US market Launch plan for the first 20 Bedford products, 2015 to 2017 12 10 9 8 8 Caffeine citrate and thiotepa successfully approved in 2015 2 One further approval expected 5 6 this year 4 3 5 1 3 2 2 1 1 - 2015 2016 2017 Cherry Hill Portugal Germany 1
Slide 20: Increased focus on commercial opportunities in Europe
Increased focus on commercial opportunities in Europe ► Appointed a head of commercial operations in Europe to address additional market opportunities ► Actively registering products and establishing new distribution channels to grow our presence in Europe UK ► Leveraging our existing manufacturing
Slide 21: Driving growth in MENA, including launch of first biosimilar product
Successfully driving growth in MENA, including launch of first biosimilar product Injectables market size in MENA1 ► Restructuring of MENA injectables is driving an improved performance in 2015 ► Total of 177 sales reps dedicated to injectables sales across the region Tunisia Syria $170 m Lebanon ►
Slide 22: Generics
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Slide 23: A transformational deal, delivering our strategy for growth
A transformational deal, delivering our strategy for growth Highly complementary with Hikma’s existing US business, creating top 6 player in US generics market1 Adds broad US portfolio with 88 differentiated products across specialised segments Enhances pipeline with 89 R&D projects including 57 Par
Slide 24: Transforms Hikma's position in the US generics market
Transforms Hikma’s position in the US generics market ► Combining Roxane and Hikma creates the sixth largest company in the US generics market by revenue US generics market share (%) 21.0% 10.0% #6 #12 #20 7.9% 6.2% 4.5% 3.0% 2.7% 2.7% 2.2% 2.2% 2.1% 2.0% 1.9% 1.8% 1.7% 1.5% 1.4% 1.3% 1.3% 1.1% 1.1%
Slide 25: Impressive combined pipeline creates significant growth potential
Impressive combined pipeline creates significant growth potential Generics expected launches, 2015 to 2019 (Number of products) ► Combined pipeline of 117 products expected to launch in 2015-2019: 40 – Addressable market size of around $53 billion 14 – Signed agreements for 16 more 30 29 differentia
Slide 26: Creates a more balanced and diversified business model
Creates a more balanced and diversified business model 2014 Hikma Group revenue 2014 Hikma Group + Roxane revenue (illustrative)1 Transforms Hikma’s position in non-injectable generics Branded Injectables Generics Branded Injectables Generics 1The chart above is for illustrative purposes only. Reven
Slide 27: Summary
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Slide 28: Building a leading global provider of generic pharmaceuticals
Building a leading global provider of generic pharmaceuticals Delivering high quality, affordable medicines to patients • Leading global injectables manufacturer • Leading pharmaceutical manufacturer in MENA and emerging markets • High quality provider of non-injectable generics in the US Commercial
Slide 29: Appendix
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Slide 30: Revenue by segment and region
Revenue by segment and region H1 2015 revenue by segment H1 2015 revenue by region 40% 45% 49% 48% 1% 6% 11% Branded Injectables Generics Other MENA US Europe & ROW 29
Slide 31: Cash flow statement
Cash flow statement $ million H1 2015 H1 2014 Profit before tax and minority interest 170 219 Adjustments for non-cash items 43 40 Change in working capital (72) (14) Income tax paid (38) (60) Other 22 15 Net cash generated from operating activities 125 200 Investment in property, plant and equipmen
Slide 32: Balance sheet
Balance sheet $ million Jun-15 Dec-14 Growth $ Growth % Cash 495 288 207 72% Trade and other receivables 484 439 45 10% Other current assets 38 13 25 192% Inventories 280 273 7 3% Total current assets 1,297 1,013 284 28% Intangible assets 585 602 (17) -3% Tangible fixed assets 504 514 (10) -2% Inves
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