Hikma Pharmaceuticals Plc · LSE:HIK
Hikma Pharmaceuticals — FY2018 Earnings Presentation
31 slides from Hikma Pharmaceuticals's earnings presentation, 2019
Slide 1: 2018 Preliminary Results
Better health. Within reach. Every day. Hikma Pharmaceuticals PLC 2018 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: Strong revenue and profit growth
Strong revenue and profit growth Core1 Core Core operating Core basic Operating revenue operating profit profit margin earnings per share cash flow $2,076m $460m 22.2% 137.8¢ $430m 1 Core results are presented to show the underlying performance of the Group, excluding exceptional items and other adj
Slide 4: Injectables
Injectables
Slide 5: Large product portfolio and flexible manufacturing enabling us to respond to customers' needs
Large product portfolio and flexible manufacturing enabling us to respond to customers’ needs US generic injectables market share1 (eaches million) 450 400 MAT December 2017 MAT December 2018 350 300 250 200 150 100 “By working together with us and US government agencies, Hikma was able to 50 ramp-u
Slide 6: Delivering revenue growth in the US despite significant headwind
Delivering revenue growth in the US despite significant headwind US Injectables core revenue by product type US Injectables products by revenue contribution 2018 (million) 2018 $ 700 $607 $607 $ 600 $586 6 products $ 500 69 11 $ 400 products products $ 300 ~35% $ 200 ~30% 18 products $ 100 ~10% $0 2
Slide 7: Strong growth in MENA and Europe expected to continue
Strong growth in MENA and Europe expected to continue MENA and Europe Injectables revenue 2014-2018 (million) $250 18% • Growth accelerating in MENA and Europe $200 • Focused on growing product portfolio in 2018 $150 – 17 product launches in MENA – 20 product launches in Europe $225 $100 • Additiona
Slide 8: Generics
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Slide 9: Leveraging differentiated portfolio to deliver growth in challenging market
Leveraging differentiated portfolio to deliver growth in challenging market Price erosion1 US retail generic sales by manufacturer1 2014-2018 (price per unit) 2018 20% Rank Company Sales ($ million) YOY growth (%) 15% 10% 1 Teva 5,369 (23%) 5% 2 Mylan 3,973 (26%) 0% 2014 2015 2016 2017 2018 3 Sandoz
Slide 10: Benefitting from commercial and operational enhancements
Benefitting from commercial and operational enhancements ● Continue to focus on cost reduction initiatives ● Further strengthen our pipeline ● Identify business development opportunities to fill pipeline gaps ● Submit response to the FDA with new clinical data for our generic Advair Diskus® submissi
Slide 11: Branded
Branded
Slide 12: Adopting a more focused approach to markets, aligning resources with size of opportunity
Adopting a more focused approach to markets, aligning resources with size of opportunity SYRIA TUNISIA IRAQ LEBANON 2018 strategic highlights JORDAN ● Introduced tiered approach to align resources MOROCCO ALGERIA KUWAIT with largest market opportunities BAHRAIN LIBYA QATAR ● Acquired cephalosporin f
Slide 13: Strengthening our pipeline and leveraging position as 'partner of choice'
Strengthening our pipeline and leveraging position as ‘partner of choice’ Near-term priorities ● Finalise exit of markets outside of MENA ● Undertake pipeline review to ensure prioritisation of largest opportunities ● Expand existing partnerships and sign new agreements ● Complete construction of or
Slide 14: Delivering sustainable growth
Delivering sustainable growth Hikma Pharmaceuticals PLC 14
Slide 15: Finance
Finance Khalid Nabilsi, Chief Financial Officer
Slide 16: Group financial highlights
Group financial highlights 2017 2018 % change Core1 revenue $1,936 million $2,076 million +7% Core gross profit $973 million $1,072 million +10% Core operating profit $386 million $460 million +19% Core EBITDA2 $468 million $549 million +17% Core profit attributable to shareholders $252 million $332
Slide 17: Injectables
Injectables Core revenue Core operating profit Core revenue (million) (million) Strong demand for in-market products in US $900 $400 $832 Responded to supply shortages in US $776 7% 6% $800 105 $300 $335 $315 Grew Remsima® sales in MENA $87 $700 $120 $103 Launched new products across all markets $60
Slide 18: Generics
Generics Core revenue Core operating profit Core revenue (million) (million) Enhanced commercial and business operations $700 $100 13% $692 $90 Good demand for differentiated products $80 $600 $615 $70 New product launches $500 $60 323% Continued price erosion $50 93 $40 $400 $30 $20 Core operating
Slide 19: Branded
Branded Core revenue Core operating profit Core revenue (million) (million) ● Constant currency ● Constant currency Strong growth in Egypt, Iraq, Jordan, Libya and Sudan $140 $131 in constant currency $600 $560 15% $550 5% $120 New product launches across all markets $117 $500 $536 1% $542 $100 $114
Slide 20: Core R&D and capital expenditure
Core R&D and capital expenditure Core R&D Capital expenditure (million) (million) $140 $140 $120 $8 $120 $107 $107 $100 $100 $80 $45 $80 $67 $60 $115 $118 $60 $40 $40 $44 $25 $20 $20 $15 $18 $0 $0 2017 2018 2017 2018 US MENA Europe ● Invested 6% of Group revenue in core R&D ● Expanding capacity and
Slide 21: Cash flow and balance sheet
Cash flow and balance sheet Operating cash flow Net debt position (million) (million) Dec-17 Dec-18 $500 Short-term financial debts1 $87 $75 $450 $443 $430 Long-term financial debts $690 $562 $400 Cash and cash equivalents $231 $276 $350 Net debt $546 $361 $300 Net debt/core EBITDA 1.17x 0.66x $250
Slide 22: 2019 guidance
2019 guidance Injectables Generics Branded ● Revenue: ● Revenue: ● Revenue growth in constant $850 million to $900 million $650 million to $700 million currency: ● Core operating margin: ● Core operating margin: mid-single digits 35% to 38% mid-teens Net finance expense Capital expenditure Tax ● Net
Slide 23: Appendix
Appendix
Slide 24: 2018 exceptional items and other adjustments
2018 exceptional items and other adjustment Bridge between 2018 core and reported operating profit Bridge between 2018 core and reported net income (million) (million) $89 million $50 million $460 $29 $30 $371 $30 $332 $282 $9 $89 $26 $56 Core operating Generic Advair Acquisition, Intangible Reporte
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) $9 million $16 million $10 $31 $32 $10 $16 $10 Core operating Generic Advair Intangible Legal Reported Core net income Amortisation
Slide 26: Group core revenue by segment and region
Group core revenue by segment and region 2018 Group core revenue by segment 2018 Group core revenue by region 26% 40% 32% 62% 1% 33% 6% Branded Injectables Generics Other MENA US Europe & ROW Hikma Pharmaceuticals PLC 26
Slide 27: Core finance expense
Core finance expense 2018 core finance expense (million) $60 $54 Other bank charges, including $50 13 commissions and factoring $40 Interest on bank overdrafts $30 19 and loans Effective interest rate: 4.46% $20 Effective interest rate: 22 Interest and fees on 5.68% $10 Eurobond ($500m) (including c
Slide 28: Consolidated P&L
Consolidated P&L % constant $ million 2017 2018 % change currency change Revenue 1,936 2,070 +7% +8% Core revenue 1,936 2,076 +7% +8% Gross profit 967 1,050 +9% +10% Core gross profit 973 1,072 10% 12% Core gross margin 50.3% 51.6% +1.3pp +1.7pp Operating profit/(loss) (747) 371 N/A N/A Core operati
Slide 29: Cash flow statement
Cash flow statement $ million 2017 2018 Cash flows from operating activities 546 493 Income taxes paid (103) (63) Net cash inflow from operating activities 443 430 Purchases of property, plant and equipment (107) (107) Proceeds from disposal of property, plant and equipment 4 13 Purchase of intangib
Slide 30: Balance sheet
Balance sheet $ million Dec-17 Dec-18 $ change % change Goodwill 282 279 (3) (1%) Other intangible assets 503 487 (16) (3%) Property, plant and equipment 828 870 42 5% Investment in associates and joint ventures 6 11 5 83% Deferred tax assets 135 125 (10) (7%) Financial and other non-current assets
Slide 31: Better health. Within Reach. Everyday.
Better health. Within Reach. Everyday. Hikma Pharmaceuticals PLC