Hikma Pharmaceuticals Plc · LSE:HIK
Hikma Pharmaceuticals — H1 2021 Earnings Presentation
28 slides from Hikma Pharmaceuticals's earnings presentation, 2021
Slide 1: 2021 Interim Results
Better health. Within reach. Every day. Hikma Pharmaceuticals PLC 2021 Interim 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: Continued strategic progress and strong Group core revenue and profit growth
Continued strategic progress and achieved strong Group core revenue and profit growth Ongoing strategic progress: Resilient broad portfolio Continued to develop our Expanded our portfolio Continued to engage with the communities delivering results across pipeline through R&D and with successful new
Slide 4: Injectables
Injectables
Slide 5: The US market continues to face some volatility
The US market continues to face some volatility Diagnosis visit gap1 • Patients are being cautious to 140M enter hospitals 120M The Diagnosis Visit Gap • Fewer diagnostic tests were -978M 100M Total Gap of Diagnosis 80M Visits in 2020 administered in 2020 and this 60M (Unique patient-provider diagno
Slide 6: Benefitting from broad portfolio and flexible manufacturing
Benefitting from broad portfolio and flexible manufacturing US Injectables revenue by competition and revenue contribution1 119 products Market leader for 58% of these products 35% 2 competitors in our portfolio Top 3 for 81% of these products Sole player 2% 28% 3-5 competitors Top 3 for 52% 11 of t
Slide 7: Strong growth in MENA and Europe supporting overall Injectable segment
Strong growth in MENA and Europe supporting overall Injectable segment MENA +12% $77 million • Broad portfolio and reach across 5 year CAGR 1H21 markets allowing us to fill market gaps United States • Significant sales force $318 million • Partner of choice 1H21 +4% Europe 5 year CAGR +17% $97 milli
Slide 8: Generics
Generics
Slide 9: Strength and resilience of this business is delivering results
Strength and resilience of this business is delivering results Strong foundation • Continued to drive demand for our differentiated portfolio • Manufacturing flexibility enabling us to capture market opportunity Expanding portfolio • Successfully launching new products • Increasing differentiation b
Slide 10: Strong commercial capabilities enabling us to capture market share
Strong commercial capabilities enabling us to capture market share Gradual increase in icosapent ethyl market share1 Good progress with generic Advair Diskus® launch 100.0% 100.0% We secured strategic business and are confident 90.0% 94.2% 92.2% 91.0% in our ability to achieve target market share 88
Slide 11: Leveraging our position as a leading supplier of nasal sprays in the US
Leveraging our position as a leading supplier of nasal sprays in the US Naloxone HCl market overview1 100% 90% 30% 38% Retail • Increasing access to important 80% medication through retail and government business 70% • Building Hikma Community Health as a vehicle for broad education 60% initiatives
Slide 12: Branded
Branded
Slide 13: Delivering growth in Tier 1 markets and benefitting from strong commercial capabilities
Delivering growth in Tier 1 markets and benefitting from strong commercial capabilities Selected MENA markets by size2 Tier 1 Saudi Arabia Iraq +9% • Benefitted from the flexibility of our manufacturing and commercial operations Tier 2 UAE Saudi • Resilient performance from broad portfolio Arabia Eg
Slide 14: Finance
Finance Khalid Nabilsi, Chief Financial Officer
Slide 15: Group financial highlights
Group financial highlights 1H20 1H21 % change Core1 revenue $1,132 million $1,216 million +7% Core gross profit $577 million $616 million +7% Core operating profit $284 million $309 million +9% Core EBITDA2 $328 million $358 million +9% Core net income $205 million $223 million +9% Basic earnings pe
Slide 16: Injectables
Injectables Core revenue Core operating profit Core revenue (million) (million) ● Constant currency ● Constant currency Good growth in MENA, reflecting good demand for our $600 $250 portfolio and biosimilars (5)% $200 Strong growth in Europe, reflecting good demand for $500 $485 1% $492 $204 contrac
Slide 17: Generics
Generics Core revenue Core operating profit Core revenue (million) (million) $120 Good demand for differentiated products $400 8% $100 Strong contribution from new launches $400 39% 100 $369 $80 Increased competition on certain products $60 72 $300 $40 Core operating profit $20 $200 Improved product
Slide 18: Branded
Branded Core revenue Core operating profit Core revenue (million) (million) ● Constant currency ● Constant currency Good growth in Tier 1 and other markets $350 $80 Benefitting from our local presence in Algeria 17% $319 47% $300 $60 $64 16% Continued demand in Egypt for COVID-19 related $275 25% pr
Slide 19: Core R&D and capital expenditure
Core R&D and capital expenditure Core R&D Cash capital expenditure (million) (million) $70 $80 $66 $65 $60 $62 $59 $60 $50 US $26 $40 $38 $40 $30 $29 MENA $20 $20 $22 $10 Europe $6 $10 $0 $0 1H20 1H21 1H20 1H21 ● Invested 5% of Group core revenue in core R&D ● Upgrading, expanding packaging and addi
Slide 20: Cash flow and balance sheet
Cash flow and balance sheet Debt and leverage (millions) 860 932 932 777 Operating cash flow 637 685 Jun-20 Jun-21 1.4x 1.2x Operating cash flow 292 224 0.7x Operating cash flow/core 0.9x 26% 18% 0.9x revenue 697 0.4x 546 605 606 361 242 2016 2017 2018 2019 2020 1H21 Net debt Total debt Net debt/cor
Slide 21: Raised 2021 guidance
Raised 2021 guidance Injectables Generics Branded ● Revenue: ● Revenue: ● Revenue growth in constant mid-single digits $810 million to $830 million currency: ● Core operating margin: ● Core operating margin: mid-single digits 37% to 38% 22% to 24% Net finance expense Capital expenditure Tax ● Net fi
Slide 22: Slide 22
Slide 23: Hikma is well positioned to deliver sustainable growth
Hikma is well positioned to deliver sustainable growth Three global Diversified Businesses revenue stream Strategic financial Manufacturing sites with close flexibility proximity to key markets Little product Lifelong commitment concentration to quality Hikma Pharmaceuticals PLC 23
Slide 24: Appendix
Appendix
Slide 25: 1H21 exceptional items and other adjustments
1H21 exceptional items and other adjustments Bridge between 1H21 core and reported operating profit Bridge between 1H21 core and reported net income (million) (million) $17 million $25 million $326 $309 $17 $9 248 $29 $46 $223 $17 Core operating Intangible Impairment Reported Amortisation and Unwind
Slide 26: 2021 expected exceptional items and other adjustments
2021 expected exceptional items and other adjustments Bridge between 2021 core and reported operating profit Bridge between 2021 core and reported net income (million) (million) $(14) million $5 million $1 $60 $46 $14 $21 Core Intangible Impairment Reported Core net Amortisation and Remeasurement Ta
Slide 27: Group core revenue by segment and region
Group core revenue by segment and region 1H21 Group core revenue by segment 1H21 Group core revenue by region US Injectables 59% 41% Generics 33% Other MENA EU & ROW Branded 0% 33% 8% 26% Hikma Pharmaceuticals PLC 27 Confidential
Slide 28: Core finance expense
Core finance expense 1H21 core finance expense (million) $30 $25 $25 Other bank charges, including 5 commissions and factoring $20 $15 Effective interest rate: 12 3.77% Interest on loans $10 Effective interest rate: $5 8 Interest and fees on 4.41% (including commitment and amortised upfront fees) Eu
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