Hikma Pharmaceuticals Plc · LSE:HIK
Hikma Pharmaceuticals — FY2020 Earnings Presentation
32 slides from Hikma Pharmaceuticals's earnings presentation, 2021
Slide 1: Better health. Within reach. Every day.
Better health. Within reach. Every day. Hikma Pharmaceuticals PLC 2020 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: 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: Leveraged strong Continued to develop our Focused on building a Expanded our portfolio Delivered operational foundation to meet demand pipeline through R&D and culture of progress and wi
Slide 4: Injectables
Injectables
Slide 5: Leveraging broad portfolio and flexible, high-quality operations to meet demand
Leveraging broad portfolio and flexible, high-quality operations to meet demand Impact on elective surgeries in the US1 Demand for Hikma’s COVID-19 related products 40% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 20% Diversified portfolio enabled us to respond to variability in demand for 0%
Slide 6: Expanding our US Injectables portfolio through new launches
Expanding our US Injectables portfolio through new launches Ongoing expansion of our US portfolio • Continue to invest in the Products launched growth of our portfolio since 2016 • Launched 20 products over the contributed last 18 months, including 27% propofol and nicardipine bags of 2020 US • Expe
Slide 7: Strong manufacturing capabilities positions us as a partner of choice
Strong manufacturing capabilities positions us as a partner of choice Our differentiated ...plus our focus on ...means we can meet capabilities & state of quality, efficiency customer and patient Partner of choice the art technology... and flexibility... needs. • Successful paper- • Worked closely w
Slide 8: Strengthening foothold in Europe and expanding into new markets
Strengthening foothold in Europe and expanding into new markets Revenue from own products1 +22% Other 33 launches Portugal across markets 160 products Italy filed to sustain growth Germany 2019 2020 1 Excludes contract manufacturing Hikma Pharmaceuticals PLC 8
Slide 9: Improving access to biosimilars in MENA
Improving access to biosimilars in MENA Increasing access to Remsima® across MENA markets • Supported hospitals and IV infusion Case studies: centres during COVID-19 Market size and Hikma market share increasing in KSA and Iraq • Raising awareness of biosimilars and Iraq increasing early access to b
Slide 10: Generics
Generics
Slide 11: Resilient portfolio and new launches are offsetting headwinds to drive growth
Resilient portfolio and new launches are offsetting headwinds to drive growth Impact of COVID-19 on the US market1 Our response • Prioritised high demand products due to COVID-19 while maintaining supply on the broader portfolio -3% Change in TRx -11% Change in NBRx2 • Enhanced customer focus and fl
Slide 12: Delivering on our pipeline and launching differentiated products
Delivering on our pipeline and launching differentiated products 2020 launches: • Icosapent ethyl capsules 2018 4% 10% 2020 • Rufinamide oral suspension • Generic Zortress® • Generic Afinitor® • Dicyclomine oral solution Products launched in 2H17 Products launched in 2H19 and 2018 contributed 4% and
Slide 13: Commercial and operational enhancements delivering growth
Commercial and operational enhancements delivering growth Leveraging operational and commercial enhancements Resilient business driving growth 800 25% 700 +10% 20% 600 Improving annual improvement 500 in FTE productivity service levels over 2016 – 2020 15% 400 10% -70% Significant 300 decrease in Re
Slide 14: Increasing differentiation with investment in Hikma specialty and respiratory portfolios
Increasing differentiation with investment in Hikma specialty and respiratory portfolios Building specialty portfolio Building respiratory portfolio By leveraging Mitigare® (colchicine) infrastructure, we will build a By leveraging regulatory expertise gained through durable Hikma specialty franchis
Slide 15: Branded
Branded
Slide 16: Delivering growth in Tier 1 markets and benefitting from strong commercial capabilities
Delivering growth in Tier 1 markets and benefitting from strong commercial capabilities Branded tier 1 markets 2020 revenue Algeria 2020 key highlights Saudi Arabia Egypt Algeria Strong recovery following Improved management of challenges in 2019 due to commercial strategy and +6% +7% +31% political
Slide 17: Launching differentiated products to deliver affordable medicines to patients
Launching differentiated products to deliver affordable medicines to patients 2020 key launches Sclera® • Multiple sclerosis product • Launched in Algeria • Reagila® (cariprazine) is a novel antipsychotic product licensed from Gedeon Richter Bufomix • Expanded on our respiratory portfolio through •
Slide 18: Finance
Finance Khalid Nabilsi, Chief Financial Officer
Slide 19: Group financial highlights
Group financial highlights 2019 2020 % change Core1 revenue $2,203 million $2,341 million +6% Core gross profit2 $1,095 million $1,213 million +11% Core operating profit $508 million $566 million +11% Core EBITDA3 $593 million $674 million +14% Core net income $364 million $408 million +12% Basic ea
Slide 20: Injectables
Injectables Core revenue Core operating profit Core revenue (million) (million) ● Constant currency ● Constant currency Strong demand for in-market products in US driven by $1,200 COVID-19, particularly in 1H20 $400 14% Good growth in MENA, reflecting good demand for our $977 $377 $1,000 portfolio a
Slide 21: Generics
Generics Core revenue Core operating profit Core revenue (million) (million) $800 $180 Good demand for differentiated products 3% $160 30% 161 Strong contribution from new launches $700 $744 $719 $140 $120 Accelerated price erosion in 2H20 $600 124 $100 $80 $500 $60 Core operating profit $40 $400 $2
Slide 22: Branded
Branded Core revenue Core operating profit Core revenue (million) (million) ● Constant currency ● Constant currency Good growth in Saudi Arabia and Egypt and strong $650 $160 recovery in Algeria 5% $600 $140 11% $613 $583 New product launches across all markets $550 5% $120 $129 $126 (2)% $500 $100
Slide 23: Core R&D and capital expenditure
Core R&D and capital expenditure Core R&D Cash capital expenditure (million) (million) $172 $180 $140 $137 $160 $120 $126 $140 $119 $89 $100 $120 US $80 $100 $36 $80 $60 $67 $60 $63 MENA $40 $40 $20 $20 Europe $20 $16 $0 $0 2019 2020 2019 2020 ● Invested 6% of Group core revenue in core R&D ● Upgrad
Slide 24: Cash flow and balance sheet
Cash flow and balance sheet Debt and leverage (millions) 2020 key highlights 860 932 • Raised $500 million 5 year Eurobond with annual coupon of 3.25% 777 • Achieved investment grade status from Standard & Poor’s and Fitch • Signed a new $200 million loan facility with the International Finance Corp
Slide 25: 2021 guidance
2021 guidance Injectables Generics Branded ● Revenue: ● Revenue: ● Revenue growth in constant mid-single digits $770 million to $810 million currency: ● Core operating margin: ● Core operating margin: mid-single digits 37% to 38% c.20% Net finance expense Capital expenditure Tax ● Net finance expens
Slide 26: Slide 26
Slide 27: 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 27
Slide 28: Appendix
Appendix
Slide 29: 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) $13 million $23 million $566 $579 $3 431 $42 $11 $62 $23 $13 $15 $408 $13 Core MENA Intangible Assets write Jordan Impairment Repor
Slide 30: 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) $(60) million $(52) million $60 $60 $7 $15 Core Intangible Reported Core net Amortisation and Remeasurement Tax impact on
Slide 31: Group core revenue by segment and region
Group core revenue by segment and region 2020 Group core revenue by segment 2020 Group core revenue by region US Injectables 60% 42% Generics 32% Other MENA EU & ROW Branded 0% 33% 7% 26% Hikma Pharmaceuticals PLC 31
Slide 32: Core finance expense
Core finance expense 2020 core finance expense (million) $60 $54 $50 13 Other bank charges, including commissions and factoring $40 $30 Effective interest rate: 26 4.02% Interest on loans $20 Effective interest rate: $10 15 Interest and fees on 4.51% (including commitment and amortised upfront fees)