Hikma Pharmaceuticals Plc · LSE:HIK
Hikma Pharmaceuticals — H1 2022 Earnings Presentation
23 slides from Hikma Pharmaceuticals's earnings presentation, 2022
Slide 1: Better health. Within reach. Every day.
Better health. Within reach. Every day. Hikma Pharmaceuticals PLC 2022 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: Resilient H1 performance supported by our strong foundation and strategic execution
Resilient H1 performance supported by our strong foundation and strategic execution Core1 Core Core operating Operating Core basic revenue operating profit profit margin cash flow earnings per share $1,213m $296m 24.4% $169m 92.1¢ 1 Core results are presented to show the underlying performance of th
Slide 4: Diversification of business enabling us to manage market headwinds
Diversification of business enabling us to manage market headwinds Branded Branded 28% 22% 1H22 1H22 revenue Injectables core operating profit Injectables by segment 44% by segment1 61% Generics Generics 27% 17% 1 Core operating profit is $296 million. Before unallocated corporate costs of $47 milli
Slide 5: Our clear path for delivering future growth
Our clear path for delivering future growth Our strategy: Deliver more from Build a portfolio that Inspire and enable a strong foundation anticipates future health needs our people Expand pipeline and invest in Expand into certain differentiated/specialty products adjacent businesses Our focus areas
Slide 6: Driving strong medium-term growth in Injectables through a broad portfolio and high-quality manufacturing capabilities
Driving strong medium-term growth in Injectables through a broad portfolio and high-quality manufacturing capabilities Leverage • Build capacity to accommodate Injectables business today: and invest in growing volumes and additional CMO our strong business • World-class, high-margin business foundat
Slide 7: Building strong momentum in Branded through commercial strength, local presence and portfolio expansion
Building strong momentum in Branded through commercial strength, our local presence and portfolio expansion • Focus on our Tier 1 markets Leverage and develop our Tier 2 and 3 Branded business today: and invest in markets • 4th largest pharmaceutical company in MENA1 our strong • Invest in our local
Slide 8: Shift towards differentiated and speciality products in Generics to return to growth
Shift towards differentiated and speciality products in Generics to return to growth in a competitive market • Continued focus on improving the bottom line through operational efficiencies Leverage Generics business today: and invest in • Leverage extensive manufacturing capabilities and capacity fo
Slide 9: Our global manufacturing capabilities differentiate us from peers
Our global manufacturing capabilities differentiate us from peers and provide flexibility to capture opportunities of revenue …to enhance our global …today we have c.6% spent on capex each year… manufacturing footprint and support a growing portfolio… best in class operations • Increasing automation
Slide 10: Our focus on building a differentiated and specialty portfolio through R&D and BD will drive future growth
Our focus on building a differentiated and specialty portfolio through R&D and BD will drive future growth Across the Group we are looking at: • Increasing complexity of the pipeline through introduction of new technologies >260 products • Improving quality of our filings for higher rate of first pa
Slide 11: Pipeline breakdown by segment
Pipeline breakdown by segment 93 Products in US Injectables 142 Products in Branded 31 Products in Generics Cardiovascular ER Liquid Vial Bag Oral Solid Anti-infectives Liquid Anti-diabetics 15% 23% 15% 15% 12% 16% Respiratory 15% 4% PFS 57% 4% 13% 16% 4% Autoimmune Nasal 6% 1% GI 2% 39% 6% 2% Lyo V
Slide 12: Finance
Finance Khalid Nabilsi, Chief Financial Officer
Slide 13: Group financial highlights
Group financial highlights 1H21 1H22 % change Revenue $1,216 million $1,213 million 0% Core1 gross profit $616 million $623 million +1% Core operating profit $309 million $296 million (4)% EBITDA2 $358 million $346 million (3)% Core net income $223 million $209 million (6)% Core basic earnings per s
Slide 14: Injectables
Injectables Revenue Core operating profit Revenue (million) (million) ● Constant currency ● Constant currency Strong growth in US, reflecting good demand for our $600 $250 portfolio, CMO and the contribution from Custopharm $538 11% 12% Good growth in Europe, reflecting demand for own $200 $500 $492
Slide 15: Branded
Branded Revenue Core operating profit Revenue (million) (million) ● Constant currency ● Constant currency Good growth across most markets, particularly in $400 $100 Algeria, Morocco and Iraq $350 9% $80 27% Strong performance in the private sector in KSA $339 $74 $300 $319 6% $60 16% Benefitting fro
Slide 16: Generics
Generics Revenue Core operating profit Revenue (million) (million) $120 Challenging competitive environment in the US resulting in low double-digit price erosion and mid- single digit volume erosion $400 $100 $400 (18)% 100 $80 Slower than expected ramp of recent launches $330 $60 (42)% $300 58 $40
Slide 17: Expanding and enhancing our product pipeline
Expanding and enhancing our product pipeline Core R&D (million) $70 $69 6% $60 $59 $50 $40 $30 of Group core revenue invested in core R&D $20 Spend in line with strategy as $10 we build a pipeline of differentiated products. $0 1H21 1H22 Hikma Pharmaceuticals PLC 17
Slide 18: Continuing to invest in the maintenance, upgrade and expansion of our facilities across the Group
Continuing to invest in the maintenance, upgrade and expansion of our facilities across the Group Capex by region ($ million) $200 100% $180 $172m Guiding to $160 $140-160m 80% $145m $140 $120 $119m 60% $107m $107m US MENA $100 Europe $80 40% Capex/revenue (%) $62m $60 $40 20% $20 $0 0% 2017 2018 20
Slide 19: Cash flow and balance sheet
Cash flow and balance sheet Debt and leverage (millions) 1551 Operating cash flow Jun-21 Jun-22 932 1.7x 777 846 Operating cash flow 224 169 1.2x 0.7x 637 685 0.9x 0.6x Operating cash flow/revenue 18% 14% 1180 0.4x 546 605 361 420 242 2017 2018 2019 2020 2021 1H22 Net debt Total debt Net debt/core E
Slide 20: 2022 full year guidance
2022 full year guidance Injectables Generics Branded ● Revenue: ● Revenue: ● Revenue growth : Mid to high-single digit growth $650 million to $675 million Low single-digits on reported basis, or mid-single digits in constant ● Core operating margin: ● Core operating margin: currency 36% to 37% Betwe
Slide 21: Slide 21
Slide 22: Consistent long-term performance driving confidence for the future
Consistent long-term performance driving confidence for the future Core revenue Core operating profit Return on invested capital (millions) (millions) (%) +7% +13% 17% CAGR CAGR Average return $632 18.6% $2,553 $566 17.0% 17.1% $2,341 $508 16.2% $2,203 15.1% $2,076 $460 $1,936 $386 22% 23% 24% 25% 2
Slide 23: A strong investment case
A strong investment case Platform for future growth and a track record of success A solid platform Increasingly diverse Excellent financial A proven track record for growth across portfolio and discipline with a strong of delivering value for all three pipeline balance sheet and shareholders and bus
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