Hikma Pharmaceuticals PLC · LSE:HIK
Hikma Pharmaceuticals — H1 2013 Earnings Presentation
33 slides from Hikma Pharmaceuticals's earnings presentation, Aug 21, 2013
Slide 1: Hikma Pharmaceuticals PLC H1 2013 Interim Results
Hikma Pharmaceuticals PLC H1 2013 Interim Results 21 August 2013
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, presentation. reproduced redistributed or passed onon, directly or indirectly, ind
Slide 3: H1 2013 highlights
H1 2013 highlights ► Strong Group performance reflects the benefit of our diversified business model ► Improving profitability in the Branded business driven by our focus on strategic products, enhanced sales and marketing activities and operational efficiencies ► Good top line growth and profitabil
Slide 4: Consolidated P&L: Strong Group performance in H1 2013
Consolidated P&L Strong Group performance in H1 2013 $ million H1 2013 H1 2012 Change Revenue 638.3 532.3 +19.9% Gross profit 353.3 234.1 +50.9% Gross margin 55.3% 44.0% +11.3pp Operating profit 144.0 75.1 +91.8% Adjusted operating profit1, 2 189.1 83.7 +125.8% Adjusted operating margin 29.6% 15.7%
Slide 5: Branded: Strong improvement in underlying profitability
Branded Strong improvement in underlying profitability Revenue($ million) Adjusted1 operating profit ($ million) 60 +10.6% 250 58.1 256.8 248.8 + 3.2% 52.6 growth g 40 200 150 20 100 0 H1 2012 H1 2013 Operating margin 50 H1 2013 H1 2012 H1 2013 Change Constant Change Currency 0 H1 2012 H1 2013 Repor
Slide 6: Injectables: Good revenue growth and significant improvement in profitability
Injectables Good revenue g growth and significant g improvement p in p profitability b y Revenue ($ million) Adjusted1 operating profit ($ million) 246.6 70 250 + 9.5% 70.6 225.2 41.1 +37.9% 60 37 0 37.0 200 + 10.6% 50 40.1 51.2 51.6 40 - 22.3% 22 3% 165 4 165.4 150 30 136.6 20 100 10 0 + 21.1% H1 2
Slide 7: Generics: Doxycycline opportunity drives profitability
Generics Doxycycline y y opportunity pp y drives p profitabilityy and covers remediation Revenue ($ million) Adjusted1 operating profit ($ million) 85 82.2 75 132.0 $32.8 120 million of 65 remediation 55 100 + 136.6% and one-off 45 costs 80 35 25 60 15 55.8 40 5 H1 2012 -5 H1 2013 (3.3) 20 O Operati
Slide 8: Cash flow
Cash flow Strong cash flow reflects exceptional profitability of doxycycline Operating cash flow ($ million) ■ Operating cash flow increased by $88.9 million to $136.0 million 140 136.0 ■ Sales of doxycycline generated exceptionally strong cash flows and reduced receivable days 120 100 H1 2012 H1 20
Slide 9: Capital expenditure
Capital expenditure Investing in quality and capacity for future growth Capital expenditure ($ million) ■ Maintenance and equipment additions across our MENA facilities, including Jordan, Egypt, Tunisia 30 and Saudi Arabia 26 1 26.1 - 1.7% 25.6 25 ■ Investment in quality and efficiency in Europe and
Slide 10: Balance sheet: Strong financing position
Balance sheet Strong g financing gpposition position at 30 June 2013 (($ million)) Net debt p ■ Net N t debt d bt off $357.0 $357 0 million, illi reflecting fl ti significant i ifi t pay down of long-term borrowings 190 178.3 124.3 90 ■ Expecting full year financing expense of around Short-term Long
Slide 11: Summary: Outlook for 2013
Summary Outlook for 2013 3 ► Group revenue growth of around 20% ► Branded revenue growth of 11% in constant currency, or 7% after the impact of currency movements ► Branded adjusted operating margin in line with 2012 ► Low double-digit Injectables revenue growth ► Generics revenue of $230 million, m
Slide 12: Branded
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Slide 13: Strong momentum in new product launches
Strong momentum in new product launches Recent Branded product launches by country* H1 2013: 34 products launched H1 2013 launches 2012: 47 products launched 2012 launches 2011: 40 p products launched 35 2011 launches 2 CNS 30 3 CNS 25 4 Cardiovascular 10 20 11 3 CNS 15 2 Cardiovascular 9 1 Systemic
Slide 14: Benefiting from enhanced sales and marketing activities
Benefiting from enhanced sales and marketing activities Optimising sales force Increasing productivity and Enhancing doctor efficiency Maximising the potential of our MENA relationships product portfolio and new launches Implementing new Improving data monitoring incentivisation structure 13
Slide 15: Focusing on operational efficiencies to improve profitability
Focusing on operational efficiencies to improve profitability Manufacturing Transferring Investing in Improving supply Better monitoring process production to local capacity and chain management of operational KPIs improvements facilities quality ► Driving API and ► Operational ► Enhanced ► Ongoing
Slide 16: Injectables
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Slide 17: Leveraging our global Injectables footprint
Leveraging our global Injectables footprint EUROPE CAPABILITIES Vials, ampoules, bags, cytotoxics, pre- A broad portfolio across a filled syringes range of product types and MANUFACTURING: US FDA, EU and MENA approved therapeutic areas manufacturing facilities in Portugal, Italy and Germany COMPETIT
Slide 18: Investing to further enhance the value of our US Injectables business
Investing to further enhance the value of our US Injectables business ► Creating opportunities for pricing and volume gains M i i i portfolio Maximising tf li value l ► Driving profitability through focus on higher value products Strengthening GPO ► Continuing track record of high quality and reliab
Slide 19: Differentiated products will help drive sustainable revenue growth in US Injectables
Differentiated products will help drive sustainable revenue growth in US Injectables We are successfully delivering our pipeline of differentiated products US argatroban market Dec-12 to Jun-13 ($ million) US phenylephrine market, Dec-12 to Jun-13 ($ million) $9.0 $4.0 $8.0 $3.5 $7.0 $3.0 $6.0 $2.5
Slide 20: Successfully growing our US market share by value
Successfully growing our US market share by value US generic Injectables market share (million eaches) US generic injectables market share ($ million) 500 1,200 15.7% 34.2% 450 13.5% 1,000 400 11.2% 350 800 300 9.5% 250 16.7% 600 15.2% 7.0% 6.5% 200 400 150 4.3% 3.9% 3.3% 100 2.6% 2.4% 5.3% 4.6% 200
Slide 21: New products will drive growth in MENA Injectables
New products will drive growth in MENA Injectables Marketed Injectables products in MENA and launches in the last 18 months* Lebanon 40 S i Syria Tunisia 6 launches Iraq 5 Jordan 34 Morocco 75 2 launches Algeria 3 launches 25 Jorda 22 n Kuwait Libya 40 Egypt Bahrain & Qatar 1 launch 5 Saudi Arabia 2
Slide 22: Growing our European business through new products and contract manufacturing
Growing our European business through new products and contract manufacturing EU own product revenue ($ million) EU contract manufacturing revenue($ million) + 10.9% + 10.0% H1 2012 H1 2013 H1 2012 H1 2013 ► Continuing to deliver strong revenue growth ► Growth reflects the transitioning of contracts
Slide 23: Investing to develop our global Injectables portfolio
Investing to develop our global Injectables portfolio ► Broadens in-house R&D capabilities Developing new R&D partnerships ► Enables expansion into new therapeutic areas and delivery technologies ► Accelerates new product development ► Eliminates interruption of commercial production Establishing de
Slide 24: Generics
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Slide 25: Changing regulatory environment is impacting companies throughout the industry
Changing regulatory environment is impacting companies throughout the industry FDA warning letters: 2004 to 2011 2000 1800 1720 1600 1400 1200 1000 800 725 673 600 535 538 471 474 445 400 200 0 2004 2005 2006 2007 2008 2009 2010 2011 Source: Duane Morris “Successfully Responding to FDA inspections (
Slide 26: Good progress completing remediation of Eatontown facility
Good progress completing remediation of Eatontown facility ► Voluntarily ceased production (November/ December 2012) Undertaken extensive ► Recalled 47 lots of products compliance work ► Purchased forensic laboratory y instrumentation for spot p identification ► Relocated several people from corpora
Slide 27: Benefiting from exceptional sales of doxycycline
Benefiting from exceptional sales of doxycycline ► US market value of doxycycline-hyclate has grown from $11 million in December 2012 to $103 million in June 2013 ► Hikma has been well-positioned to benefit from the favourable pricing Doxycycline-hyclate sales in US market, Dec-12 to Jun-13 ($ milli
Slide 28: Group
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Slide 29: Continuing our strong track record of growth
Continuing our strong track record of growth Group revenue ($ million) Acquired q Baxter’s Multi Source Injectables j ((US)) in May y 2011 Acquired q EPCI in Egypt gyp Acquired 94.1% of Promopharm in Morocco Acquired Elie Pharmaceuticals in Sudan Acquired minority stake in Unimark (India) and Haosun
Slide 30: Appendix
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Slide 31: Revenue by segment and region
Revenue by segment and region H1 2013 revenue by segment H1 2013 revenue by region 40.2% 45 9% 45.9% 38.6% 46.6% 0.5% 7 5% 7.5% 20.7% Branded Injectables Generics Other MENA US Europe & ROW 30
Slide 32: Cash flow statement
Cash flow statement $ million H1 2013 H1 2012 Profit before tax and minority interest 111.6 57.8 Adjustments for non-cash items 57.4 33.6 Change in working capital (18.3) (48.3) Income tax paid (32.0) (14.3) Other 17.3 18.3 Net cash generated from operating activities 136.0 47.1 I Investment t t in
Slide 33: Balance sheet
Balance sheet $ million H1 2013 H1 2012 Growth $ Growth % Cash 124.3 121.0 3.3 2.7% Trade and other receivables 389.5 343.9 45.6 13.3% Other current assets 3.2 2.7 0.6 23.1% Inventories 273.0 271.9 1.1 0.0% Total current assets 790.0 739.5 50.5 6.8% Intangible assets 435.3 426.7 11.4 2.0% Tangible f
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