Siggi Olafsson, Chief Executive Officer of Hikma, said:
“Hikma delivered strong financial results in 2021, marking another successful year of solid growth and continued strategic momentum. Our operational strength and high quality standards ensured our ability to provide customers with a consistent supply of essential medicines in a challenging environment. I am grateful to Hikma colleagues around the world for their steadfast commitment to helping the millions of patients who rely on our medicines every day.
As we look to 2022 and beyond, I am most excited about how we are continuing to build and evolve our portfolio with important investments and new partnerships. Our Injectables business is now supplying US hospitals with sterile compounded pharmaceutical products, has expanded into Canada, and is set to grow further with the acquisition of Custopharm and our expansion into US biosimilars. Our Generics business is bringing more complex and specialty products to market, launching KloxxadoTM and generic Advair Diskus® in 2021, and with additional product launches planned for this year. Our Branded business is delivering consistent growth, with an increased focus on medications to treat chronic illnesses. We have an exciting platform that will drive continued growth and progress in the year ahead.”
Highlights:
Reported results (statutory) | 2021 $ million | 2020 $ million | Change | Constant currency change |
Revenue | 2,553 | 2,341 | 9% | 7% |
Operating profit | 582 | 579 | 1% | 3% |
Profit attributable to shareholders | 421 | 431 | (2)% | 2% |
Cashflow from operating activities | 638 | 464 | 38% | - |
Basic earnings per share (cents) | 182.3 | 182.6 | 0% | 4% |
Total dividend per share (cents) | 54.0 | 50.0 | 8% | - |
Core results (underlying)
| 2021 $ million | 2020 $ million | Change | Constant currency2 change |
Core revenue | 2,553 | 2,341 | 9% | 7% |
Core operating profit | 632 | 566 | 12% | 15% |
Core profit attributable to shareholders | 450 | 408 | 10% | 15% |
Core basic earnings per share (cents)3 | 194.8 | 172.9 | 13% | 17% |
Strong 2021 performance
- Group revenue up 9%, reflecting a good performance from all three businesses
- Core operating profit up 12%, driven by a further step up in Generics margin
- Core profit attributable to shareholders up 10%
- Reported profit attributable to shareholders down 2% and basic EPS was flat
- Strong cashflow from operating activities, up 38% to $638 million
- Continued to invest 6% of revenue in R&D, with a growing pipeline of complex and specialty products
- Maintained healthy balance sheet, with net debt of $420 million and low leverage at 0.6x net debt to core EBITDA
- Full year dividend of 54 cents per share, up from 50 cents per share in 2020
Continued momentum, with growth in all three businesses
- Injectables: Good revenue growth across all three geographies, including in the US following a strong 2020. Injectables core operating profit grew 5%, with a strong operating margin of 37.5%
- Generics: 10% revenue growth and core operating margin improvement of 300 bps to 24.6%, reflecting a good performance from recently launched products
- Branded: Revenue grew 9%, reflecting a good contribution from products used to treat chronic illnesses and core operating margin was 18.7%, down from 20.6% in 2020. Excluding the impact of currency and hyperinflation, revenue grew 5% and core operating margin was stable
Further portfolio expansion and increased investment to support growth
- Launched generic Advair Diskus® in April and are gradually growing market share, but expect competition to intensify in 2022
- Expansion of specialty product offering in the US, including the launch of KloxxadoTM 8mg naloxone nasal spray
- Positioning for future growth in Injectables with the signing of two US biosimilar agreements, the acquisition of Custopharm[4], the launch of a new US compounding business and post year-end expansion into Canada through acquisition of Teligent assets
- Further complex medicines added to Branded portfolio, including eight oral oncology products in Algeria
Share buyback
- Announcing a share buyback programme of up to $300 million to be executed during 2022
- Hikma’s strategic focus remains unchanged, prioritising the creation of further shareholder value through investing in organic and inorganic growth
- Buyback reflects the Group’s strong cash generation, balance sheet strength and the Board’s confidence in the future growth prospects of the business
- The buyback has been sized to maintain balance sheet efficiency whilst leaving significant headroom for continued investment opportunities
New environmental target
- Announcing new target to reduce Hikma’s greenhouse gas emissions by 25% by 2030
2022 outlook
- Injectables revenue growth in the low to mid-single digits, with core operating margin in the range of 35% to 37%
- Generics revenue growth in the range of 8% to 10% and core operating margin in the range of 24% to 25%
- Branded revenue expected to be in line with 2021. Excluding the impact of hyperinflation in 2021, expect Branded revenue to grow in the mid-single digits