Hikma Pharmaceuticals Plc · LSE:HIK
Hikma Pharmaceuticals — H1 2019 Earnings Presentation
31 slides from Hikma Pharmaceuticals's earnings presentation, 2019
Slide 1: Hikma Pharmaceuticals PLC 2019 Interim Results
Better health. Within reach. Every day. Hikma Pharmaceuticals PLC 2019 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: Strong Group revenue and profit growth
Strong Group revenue and profit growth Core1 Core Core operating Core basic Operating revenue operating profit profit margin earnings per share cash flow $1,043m $246m 23.6% 72.7¢ $187m 1 Core results are presented to show the underlying performance of the Group, excluding exceptional items and othe
Slide 4: Injectables
Injectables
Slide 5: Resilient portfolio and new launches are offsetting headwinds to drive growth
Resilient portfolio and new launches are offsetting headwinds to drive growth US Injectables core revenue by product type Partnering with Civica Rx (million) $350 5-year agreement to manufacture and Total1 supply Civica’s growing membership of $300 US health systems (900+ hospitals) $250 Base portfo
Slide 6: Developing a pipeline of differentiated products to drive future growth
Developing a pipeline of differentiated products to drive future growth Ongoing expansion of our US Injectables portfolio1 US Injectables pipeline of 125 products3 Complex products Other 103 products across c.14 therapeutic categories2 Projects 103 97 69 89 Development 72 67 55 14 59 Submissions 56
Slide 7: Investing in our portfolio and manufacturing capabilities for MENA and Europe
Investing in our portfolio and manufacturing capabilities for MENA and Europe Herzuma® Truxima® Remsima® $180m 1 market •Biosimilar to Herceptin ® $100m 1 •Expect to launch in market 4 markets by end of 2020 $45m market1 •Biosimilar to Rituxan ® •Expect to launch in 4Q19 Initiated production in our
Slide 8: Generics
Generics
Slide 9: Our differentiated product portfolio and enhanced commercial capabilities are delivering growth
Our differentiated product portfolio and enhanced commercial capabilities are delivering growth Volumes in US non-injectables market are stable Generics portfolio by number of generic competitors1 (eaches) 6% 15% 24% 4% ≤2 3-5 2% 6-8 0% 33% ≥9 28% -2% 2015 2016 2017 2018 2019 YTD Price erosion appea
Slide 10: Developing a pipeline of complex products to drive future growth
Developing a pipeline of complex products to drive future growth Pipeline by dosage form Our disclosed Generics Paragraph IV pipeline (as at July 2019) Current Product PIV status US market size ($m)1 6% Afinitor® Settled 806 Novartis 6% Fetzima® Active litigation 103 Allergan 38% Tarceva® 14% Genent
Slide 11: Branded
Branded
Slide 12: Launching differentiated products and adding new partnerships
Launching differentiated products and adding new partnerships 1H19 key launches in core markets 1H19 partnerships Exclusive license agreement to commercialise cariprazine, a novel antipsychotic, in certain MENA markets Exclusive license, supply and distribution agreement for Saudi Arabia intravenous
Slide 13: Group
Group
Slide 14: Delivering sustainable growth
Delivering sustainable growth Deliver more • Driving strong organic growth from a strong • Achieving cost savings and efficiencies foundation • Leveraging our high-quality operations Inspire and • Strengthening our commercial teams and Group functions Better health. enable our • Focusing on initiati
Slide 15: Finance
Finance Khalid Nabilsi, Chief Financial Officer
Slide 16: Group financial highlights
Group financial highlights 1H18 1H19 % change Core1 revenue $979 million $1,043 million +7% Core gross profit $495 million $544 million +10% Core operating profit $214 million $246 million +15% Core EBITDA2 $252 million $287 million +14% Core net income $148 million $176 million +19% Basic earnings
Slide 17: Injectables
Injectables Core revenue Core operating profit Core revenue (million) (million) Strong demand for in-market products in US $450 $200 4% $428 $410 (3)% Good growth in MENA, particularly Saudi Arabia $400 $51 and Egypt $51 $173 $167 $350 $60 Launched new products across all markets $51 $300 $100 Incre
Slide 18: Generics
Generics Core revenue Core operating profit Core revenue (million) (million) $400 $100 Strong demand for differentiated products $90 11% Recent product launches $368 $80 $70 $332 Increased competition and continued price erosion $300 $60 71 137% $50 $40 $30 Core operating profit $20 30 $200 $10 High
Slide 19: Branded
Branded Core revenue Core operating profit Core revenue (million) (million) ● Constant currency ● Constant currency Strong growth in Egypt, Iraq, Morocco, $300 $60 Saudi Arabia, Sudan and UAE $50 11% $246 New product launches across all markets $250 6% $49 $40 $45 9% $242 Lower sales in Algeria due
Slide 20: Core R&D and capital expenditure
Core R&D and capital expenditure Core R&D Capital expenditure (million) (million) $70 $60 $53 $60 $8 $48 $28 $50 $58 $12 $40 US $40 $47 $23 $30 $20 $16 MENA $20 $10 $13 $9 Europe $0 $0 1H18 1H19 1H18 1H19 ● Invested 6% of Group core revenue in core R&D ● Upgrading capabilities and adding new technol
Slide 21: Cash flow and balance sheet
Cash flow and balance sheet Operating cash flow Net debt position (million) (million) Dec-18 Jun-19 $200 $185 $187 Short-term financial debts1 $75 $591 Long-term financial debts $562 $104 $150 Cash and cash equivalents $276 $334 Net debt $361 $3612 Net debt/core EBITDA 0.66x 0.62x \\\\\\\\\\\\\\\\\\
Slide 22: Raising 2019 guidance
Raising 2019 guidance Injectables Generics Branded ● Revenue: ● Revenue: ● Revenue growth in constant $870 million to $900 million $690 million to $720 million currency: ● Core operating margin: ● Core operating margin: mid-single digits 36% to 38% 16% to 18% Net finance expense Capital expenditure
Slide 23: Appendix
Appendix
Slide 24: 1H19 exceptional items and other adjustments
1H19 exceptional items and other adjustments Bridge between 1H19 core and reported operating profit Bridge between 1H19 core and reported net income (million) (million) $(8) million $9 million $246 $14 $4 $238 $8 $185 $176 $15 $5 $8 $3 $12 $7 $32 $17 Core R&D Jordan MENA Intangible Contingent Procee
Slide 25: 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) $(22) million $25 million $5 $16 $14 $3 $4 $22 $45 $32 $7 $32 $3 Core R&D Jordan MENA Intangible Contingent Legal Integration Repor
Slide 26: Group core revenue by segment and region
Group core revenue by segment and region 1H19 Group core revenue by segment 1H19 Group core revenue by region US 66% Injectables Generics 41% 35% Other MENA EU & ROW Branded 1% 29% 5% 23% Hikma Pharmaceuticals PLC 26
Slide 27: Core finance expense
Core finance expense 1H19 core finance expense (million) $30 $25 $25 6 Other bank charges, including commissions and factoring $20 8 Interest on bank overdrafts $15 and loans Effective interest rate: 4.62% $10 11 Interest and fees on Eurobond ($500m) Effective interest rate: $5 5.74% (including comm
Slide 28: Consolidated P&L
Consolidated P&L % constant $ million 1H18 1H19 % change currency change Revenue 979 1,047 +7% +8% Core revenue 979 1,043 +7% +7% Gross profit 490 548 +12% +12% Core gross profit 495 544 +10% +11% Core gross margin 50.6% 52.2% +1.6pp +1.5pp Operating profit 174 238 +37% +37% Core operating profit 21
Slide 29: Consolidated cash flow statement
Consolidated cash flow statement $ million 1H18 1H19 Cash generated from operating activities 206 211 Income taxes paid (21) (41) Income tax received - 17 Net cash inflow from operating activities 185 187 Purchases of property, plant and equipment (53) (48) Proceeds from disposal of property, plant
Slide 30: Consolidated balance sheet
Consolidated balance sheet $ million Dec-18 Jun-19 $ change % change Goodwill 279 281 2 1% Other intangible assets 487 520 33 7% Property, plant and equipment 870 863 (7) (1)% Right-of-use assets - 49 49 N/A Investment in associates and joint ventures 11 12 1 9% Deferred tax assets 125 134 9 7% Fina
Slide 31: Hikma Pharmaceuticals PLC
hikma. Better health. Within Reach. Everyday.
Hikma Pharmaceuticals — H1 2019 Earnings Presentation on 6ix