Slide 1: Better health. Within reach. Every day.
Better health. Within reach. Every day. Hikma Pharmaceuticals PLC 2021 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 Group core revenue and profit growth
Strong Group core revenue and profit growth Strong financial performance: Core1 revenue Core Core operating Operating Core basic operating profit profit margin cash flow earnings per share $2,553m $632m 24.8% $638m 194.8¢ 1 Core results are presented to show the underlying performance of the Group,
Slide 4: Positioning Hikma for long-term success
Positioning Hikma for long-term success 2024 and beyond Driving sustainable 2021 key achievements: long-term growth ▪ Launched sterile injectable compounding business in the US Our long-term growth ▪ Signed two US biosimilar deals and expanded partnership with 2021-2023 Celltrion in MENA for first s
Slide 5: Injectables
Injectables
Slide 6: Benefitting from strong commercial capabilities across our markets
Benefitting from strong commercial capabilities across our markets US: Broad injectables portfolio capturing opportunities MENA: Improving patients’ access to biologics1 in a volatile market Volume for Hikma’s US Jordan Herzuma 90% injectables portfolio MoroccoRemsima Morocco Remsima 33% KSA Remsima
Slide 7: Investing in our capacity and expanding our capabilities to support future growth plans
Investing in our capacity and expanding our capabilities to support future growth plans We are investing to support a growing global portfolio: • Significantly upgraded our new compounding site US in the US and added automation and segregation • Added new filling lines in Cherry Hill $47 million • O
Slide 8: Building a differentiated pipeline to sustain future growth
Building a differentiated pipeline to sustain future growth Building out our pipeline Adding differentiated Executing strategic 1 of differentiated products through internal R&D 2 products through partnership 3 acquisitions Global Injectables pipeline1 Building a portfolio of highly complementary St
Slide 9: Leveraging Hikma's quality and commercial strength to tap into a growing market
Leveraging Hikma’s quality and commercial strength to tap into a growing market Launched 503B sterile compounding business Pharmacists, physicians & nurses 503B est. Hospital Why a Hikma want and need medicines in available market1 opportunity? ready-to-administer formats We have the competitive $2.
Slide 10: Generics
Generics
Slide 11: Strong capabilities and a differentiated portfolio are setting us apart from peers
Strong capabilities and a differentiated portfolio are setting us apart from peers Hikma Generics a standout among peers Key industry trends Rank Manufacturer Sales1 FY 2021 ($m) YoY % ∆ Generic retail Rx volume has recovered to pre-Covid levels… 1 Teva Generic non-injectables TRx1 2H ‘21 avg: $3,72
Slide 12: Resilient portfolio and new launches offsetting headwinds
Resilient portfolio and new launches offsetting headwinds $900 40% $820 $800 $744 35% $719 $692 $700 2021 key highlights $615 30% $604 $600 25% 22% 25% • Executed on our pipeline with key launches $500 17% 20% • Captured market opportunities supported by broad $400 13% portfolio and flexible manufac
Slide 13: Ensuring growth in a competitive market
Ensuring growth in a competitive market Specialty BD/CMO Pipeline Base business • Building a portfolio of • Establishing long-term specialty products through partnerships to bring licensing and product • Successfully launching new acquisitions products difficult-to-manufacture • Broad portfolio of c
Slide 14: Branded
Branded
Slide 15: Delivering growth across our markets supported by our strong commercial capabilities
Delivering growth across our markets supported by our strong commercial capabilities 2021 key achievements across MENA markets Algeria Egypt Jordan Tier 1 market Tier 1 market Tier 3 market +21% +4% +14% Moved in ranking Revenue growth in 2021 Revenue growth in 2021 Revenue growth in 2021 from 5th t
Slide 16: Building a pipeline of differentiated products
Building a pipeline of differentiated products Building out our pipeline of Launching differentiated products Investing in capacity and differentiated products through through partnerships expanding capabilities internal R&D Branded pipeline of 131 products1 Launched >40 products2 in last 18 months:
Slide 17: Finance
Finance Khalid Nabilsi, Chief Financial Officer
Slide 18: Group financial highlights
Group financial highlights 2020 2021 % change Core revenue $2,341 million $2,553 million +9% Core gross profit $1,213 million $1,301 million +7% Core1 operating profit $566 million $632 million +12% Core EBITDA2 $674 million $727 million +8% Core profit attributable to shareholders $408 million $450
Slide 19: Injectables
Injectables Core revenue Core operating profit Core revenue (million) (million) ● Constant currency ● Constant currency Good demand for our products in the US $1,200 $1,053 $400 6% Good growth in MENA, reflecting good demand for our 8% $395 portfolio and biosimilars $977 $377 $1,000 5% $181 $300 Goo
Slide 20: Generics
Generics Core revenue Core operating profit Core revenue (million) (million) $900 Good demand for differentiated products $200 10% 25% 202 Strong contribution from new launches $800 $820 $150 161 Increased competition on certain products $700 $744 $600 $100 $500 Core operating profit $50 $400 Improv
Slide 21: Branded
Branded Core revenue Core operating profit Core revenue (million) ● Constant currency (million) ● Hyperinflation impact Good growth across most of our markets, $750 on sales $140 ● Constant currency 5% particularly Algeria $700 $669 $120 $650 9% $31 $126 $125 Good demand for chronic medications (1)%
Slide 22: Core R&D and capital expenditure
Core R&D and capital expenditure Core R&D Cash capital expenditure (million) (million) $180 $172 $140 $143 $160 $145 $137 $120 $140 $89 $100 $120 US $56 $80 $100 $80 $60 $66 $60 $67 MENA $40 $40 $20 $20 Europe $16 $23 $0 $0 2020 2021 2020 2021 ● Invested 6% of Group core revenue in core R&D ● Upgrad
Slide 23: Cash flow and balance sheet
Cash flow and balance sheet Debt and leverage (millions) Capital allocation 932 • To reflect the strong cash generation, balance sheet strength and 777 the Board’s confidence in the Group’s outlook, we announced today 846 a share buyback programme of up to $300 million to be executed during 2022 • W
Slide 24: 2022 guidance
2022 guidance Injectables1 Generics2 Branded ● Revenue: ● Revenue: ● Revenue growth in constant Low to mid-single digit 8% to 10% growth currency: growth ● Core operating margin: Mid-single digit growth ● Core operating margin: 24% to 25% excluding the impact of hyperinflation in 2021 35% to 37% Net
Slide 25: Slide 25
Slide 26: Delivering strong organic growth
Delivering strong organic growth Core revenue Core EBITDA Operating cash flow (millions) (millions) (millions) +7% CAGR +12% CAGR $638 $727 $2,553 $674 $2,341 $593 $472 $464 $2,203 $549 $443 $430 $2,076 $1,936 $468 27% 29% 28% 24% 26% 7% 9% 6% 6% -1% 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
Slide 27: A strong investment case
A strong investment case Platform for future growth and a track record of success Excellent financial A proven track A solid platform Increasingly diverse discipline with a record of delivering for growth across portfolio and strong balance pipeline value for all three sheet and shareholders and a b
Slide 28: Appendix
Appendix
Slide 29: Group reported financial highlights
Group reported financial highlights 2020 2021 % change Revenue $2,341 million $2,553 million +9% Gross profit $1,201 million $1,301 million +8% Operating profit $579 million $582million +1% EBITDA1 $670 million $727 million +9% Profit attributable to shareholders $431 million $421 million (2)% Basic
Slide 30: The impact of hyperinflation
The impact of hyperinflation Impact on Branded business P&L excluding Hyperinflation impact P&L including hyperinflation ($m) ($m) hyperinflation ($m) Core revenue 638 31 669 Cost of sales (327) (14) (341) Core gross profit 311 17 328 Loss on net monetary assets - (16) (16) Total operating expenses
Slide 31: 2021 exceptional items and other adjustments
2021 exceptional items and other adjustments Bridge between 2021 core and reported operating profit Bridge between 2021 core and reported net income (million) (million) $(50) million $(29) million $632 $13 $450 $582 $73 $13 $5 $421 $24 $60 $50 $29 Intangible Intangible Amortisation and Remeasurement
Slide 32: Group core revenue by segment and region
Group core revenue by segment and region 2021 Group core revenue by segment 2021 Group core revenue by region US Injectables 59% 41% Generics 32% Other MENA EU & ROW Branded 0% 33% 8% 26% Hikma Pharmaceuticals PLC 32
Slide 33: Core finance expense
Core finance expense 2021 core finance expense (million) $60 $56 Other bank charges, including $50 13 commissions and factoring $40 $30 25 Effective interest rate: Interest on loans 3.86% $20 Effective interest rate: $10 18 Interest and fees on 4.71% (including commitment and amortised upfront fees)
Slide 34: Acting responsibly
Acting responsibly Advancing health Empowering Protecting the Building trust through and wellbeing our people environment quality in everything we do Providing better healthcare Shaping an inclusive culture Minimising our Upholding ethical standards and supporting our where everyone can thrive impac