Corporate

Hikma Pharmaceuticals Interim Results

London, 19 August 2015 – Hikma Pharmaceuticals PLC (“Hikma”) (LSE: HIK) (NASDAQ Dubai: HIK) (OTC: HKMPY), the fast growing multinational pharmaceutical group, today reports its interim results for the six months ended 30 June 2015.

Hikma delivers solid H1 performance in line with expectations and excellent strategic progress

Group on track to achieve guidance for 2015

Strategic acquisition and strong recovery in MENA create momentum for future growth

H1 2015 financial highlights

  • Group revenue of $709 million, in line with H1 2014 in constant currency1, or down 4% on a reported basis, with good performances from Branded and Injectables, offset by the expected decline in specific market opportunities in Generics
  • Full year Group revenue guidance maintained at around 6% growth in constant currency, or 2% on a reported basis
  • Group adjusted operating profit of $204 million, compared with $244 million in H1 2014,
  • Basic EPS of 67.3 cents per share, down 21%
  • Interim dividend of 11.0 cents per share, in line with total dividend paid in H1 2014

H1 2015 strategic highlights

  • Roxane acquisition will transform Hikma’s US business, establishing Hikma as the sixth2 largest US generics company
  • Successful integration of Bedford is delivering new approvals for US Injectables
  • Inaugural bond issue raised $500 million, providing financial flexibility to support future growth
  • Partnership with Vitabiotics, announced today, broadens Hikma’s MENA portfolio with leading OTC brands
  • New product introductions across all countries and markets – launched 40 products and received 118 product approvals, expanding and enhancing Hikma’s global product portfolio

H1 2015 business segment highlights

Branded

  • Branded revenue of $282 million, up 16% in constant currency, or 9% on a reported basis, with a good performance in most markets and a strong recovery in Algeria
  • Branded adjusted operating profit of $58 million, up 24% in constant currency, or 7% on a reported basis
  • On track to deliver full year guidance of high single digit revenue growth, or low-teens in constant currency, and an improvement in adjusted operating margin

Injectables

  • Global Injectables revenue of $344 million, in line with H1 2014, as expected, due to continued success in capturing specific market opportunities
  • Injectables adjusted operating margin remains extremely strong at 42.4%, compared with 41.0% in H1 2014
  • Continue to expect full year revenue in line with 2014 and a robust adjusted operating margin of around 35%

Generics

  • Generics revenue of $79 million, down 38%, reflects the expected decline in specific market opportunities
  • Generics adjusted operating profit of $33 million, with an adjusted operating margin of 41.8%
  • Expect full year revenue to be in the range of $175 million to $200 million depending on the growth of colchicine sales over the second half of the year

Said Darwazah, Chief Executive Officer of Hikma, said:

“We have had an excellent start to the year.  Our financial results are in line with expectations and we are making strong strategic progress across the Group.

The acquisition of Roxane, agreed in July, will transform our business in the US, adding complementary and well differentiated products, an attractive pipeline, proven R&D capabilities and greater overall scale.  It also provides an excellent opportunity to expand our product portfolio in other markets, particularly the MENA region.

Bedford is now well integrated, we have launched the first of their generic injectable products and we are confident that we will continue to bring a steady stream of these products back to the market.  The addition of Bedford and Roxane to our US businesses will enable us to capture growth opportunities in more specialised segments of the US generics market. 

Our businesses in MENA are performing very well and we are strongly positioned for continued growth.  Our partnership with Vitabiotics, announced today, will leverage our marketing and sales capabilities in MENA and broaden our product portfolio, and is a great example of how we are implementing our growth strategy in the region.

We have taken important strategic steps this year and we are very excited about the opportunities these bring to the Group.  Across our geographies, we have strong market positions, we are executing well and we are very confident in the outlook for 2015 and beyond.”

Group financial highlights

Summary P&L
$ million
H1 2015 H1 2014 Change
Revenue 709 738 -4%
Gross profit 400 441 -9%
Gross margin 56.4% 59.8% -3.4pp
       
Operating profit 194 236 -18%
Adjusted operating profit3 204 244 -16%
Adjusted operating margin 28.8% 33.1% -4.3pp
       
EBITDA4 227 269 -16%
       
Profit attributable to shareholders 134 169 -21%
Adjusted profit attributable to shareholders3 142 176 -19%
       
Basic earnings per share (cents) 67.3 85.4 -21%
Adjusted basic earnings per share (cents)3 71.4 88.9 -20%
       
Dividend per share (cents) 11.0 7.0 +57%
Special dividend per share (cents) -- 4.0 -100%
Total dividend per share (cents) 11.0 11.0 --
       
Net cash flow from operating activities 125 200 -38%

1. Constant currency numbers in H1 2015 represent reported H1 2015 numbers re-stated using average exchange rates in H1 2014

2. IMS Healthcare, MAT sales value May 2015, adjusted to reflect recent M&A activity Before the amortisation of intangible assets (excluding software) and exceptional items, as set out in note 4 to the condensed set of financial statements

3. Earnings before interest, tax, depreciation and amortisation.

4. EBITDA is stated before impairment charges and share of results from associated companies