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FOURTH QUARTER REPORT PRESENTATIONThomas Eldered, CEO
Tobias Hägglöv, CFO
3
BEST QUARTER EVERREACHING OUR TARGETS
18.5%EBITDA margin
367MSEK EBITDA
14%Sales increase
1.7
2.0
Q4 18 Q1 Q2 Q3 Q4 19
Net salesSEK bn
280
367
Q4 18 Q1 Q2 Q3 Q4 19
EBITDASEK m
Net sales of SEK 1,981 m, +14%
EBITDA SEK 367 m, +31%
EBITDA margin 18.5% (16.1)
Profit after tax SEK 90 m (-41)
Cash flow after working capital changes SEK 108 m (25)
Return on equity 6.7% (3.4)
Adj EPS SEK 2.04 (1.07)
4
STRONG BUSINESS MOMENTUMBENEFITTING FROM GLOBAL REACH AND ATTRACTIVE VALUE PROPOSITION
Strong growth in all three segments and in all geographies
Several new projects implemented in Solids & Others
Global development services continues to perform well, but negative impact from product mix and stock-outs in D&T
Underperformance in non-lyophilized injectables
Several promising new products in tech transfer with effect from next year
Recommended offer for Consort Medical Ltd, accepted after the period
STERILES & INHALATION
DEVELOPMENT & TECHNOLOGY
SOLIDS & OTHERS
SALES +14%EBITDA +17%
SALES +10%EBITDA +24%
SALES +29%EBITDA -17%
5
ITALY +16%
Brescia
Lainate
Masate
Paderno Dugnano
PORTUGAL +17%
Odivelas
Queluz
SPAIN +10%
Leganés
Parets
DOUBLE DIGIT ORGANIC GROWTHSALES GROWTH Q4 2019
USA +48%
Research Triangle Park
SWEDEN +6%
Stockholm
Höganäs
Karlskoga
Solna
Strängnäs
Uppsala
EUROPE
UK +12%
Ashton
GERMANY +10%
Wasserburg
FRANCE +8%
Fontaine
Kaysersberg
Monts
Pessac
ISRAEL +73%
Ness Ziona
INDIA +44%
BengaluruKarnal & Paonta Sahib
Manufacturing services Development services
Holmes Chapel
6
CREATING AN ADVANCED DELIVERY SYSTEMS COMPANY………….
Deep and broad
pharmaceutical expertiseInnovative device
offering
Complements Recipharm’s ambitious growth strategy
Enhances competitive position with combined scale and service offering
Creates a world leader in inhalation product technology
Enables innovative product offering
7
….. AND A TOP 5 GLOBAL CDMO
Bespak
Aesica
SEK
4bn
Steriles & Inhalation
Solids & Others
Development & Technology
SEK
7bn
Steriles & Inhalation
Solids & Others
Development & Technology
SEK 11bn
SEKbn
Combined (1)
1. Revenues rounded to nearest SEK billion for illustrative purposes2. LTM revenue figures: Last twelve months for Recipharm ending on 31 December 2019 and for Consort Medical ending on October 31, 2019
47
11
-
10
20
30
40
Competitor G Competitor F Competitor E Competitor D Competitor C Competitor B Competitor A
Th
ou
san
ds
ENHANCED SCALE
To become a top 5 global CDMO with >$1bn (>SEK 10bn) sales and increased ability to compete for global contracts with pharma companies
8
ACQUISITION OF CONSORT MEDICAL PLC
Offer documents posted December 6, 2019
Offer declared unconditional February 4, 2019 = Take-over date
Consort delisted, effect from March 6, 2019
Compulsory squeeze-out commencing February 20, 2019
As of February 19 Recipharm controls ~98% of Consort
New board of directors and top management appointed
Integration on-going
Immediate 60 day plan
Longer term implement synergies and common opportunities
£ 505 Million
Cash offer
FINANCIALSTobias Hägglöv(currency SEK million)
10
P&L DEVELOPMENT
*) Defined as Operating Cash Flow, including working capital changes and maintenance investments
Q4 2019 Q4 2018 2019 FY
Net sales 1,981 1,739 7,457
Organic 10% 8% 5%
Acquired - 12% 9%
Currency 4% 4% 3%
EBITDA 367 280 1,294
EBITDA margin 18.5% 16.1% 17.3%
Free Cash flow*) -93 -121 374
Earnings per share (adjusted) 2.04 1.07 5.78
IFRS 16 effect EBITDA 23
IFRS 16 effect EBITDA margin 1.2%-pts
11
EBITDA BRIDGE Q4 Y-O-Y
MSEK
307 354307
0
50
100
150
200
250
300
350
400
EBITDA Q4 2018 Steriles &Inhalation
Solids & Others Development &Technology
Discontinuedoperations
Other EBITDA Q4 2019
367
280
+57
+6
-9
+32
+47
+25
+33
12
MANUFACTURING SERVICES – STERILES & INHALATION
EBITDA BRIDGE, OCT – DEC
SALES BRIDGE, OCT – DEC
SEK million EBITDA
2018 151
Currency 8
Acquisitions -
Accounting standards (IFRS 16) 4
Organic 13
Total 25
2019 177
Sales, MSEK Sales, %
2018 743
Currency 37 5
Acquisitions - -
Organic 68 9
Total 105 14
2019 847400
500
600
700
800
Q4 2018 Currency Organic growth Q4 2019
100
120
140
160
180
Q4 2018 Currency IFRS - 16 Organic Q4 2019
13
MANUFACTURING SERVICES – SOLIDS & OTHERS
SALES BRIDGE, OCT – DEC
EBITDA BRIDGE, OCT – DEC
Sales, MSEK Sales, %
2018 729
Currency 21 3
Acquisitions - -
Organic 53 7
Total 74 10
2019 803
SEK million EBITDA
2018 135
Currency 4
Acquisitions -
Accounting standards (IFRS 16) 6
Organic 22
Total 33
2019 168
400
500
600
700
800
Q4 2018 Currency Organic growth Q4 2019
100
120
140
160
Q4 2018 Currency IFRS - 16 Organic Q4 2019
14
DEVELOPMENT & TECHNOLOGY
SALES BRIDGE, OCT – DEC
EBITDA BRIDGE, OCT – DEC
Sales, MSEK Sales, %
2018 211
Currency 8 4
Acquisitions - -
Organic 53 25
Total 61 29
2019 271
SEK million EBITDA
2018 50
Currency 1
Acquisitions -
Accounting standards (IFRS 16) 4
Organic -13
Total -9
2019 42
100
140
180
220
260
Q4 2018 Currency Organic growth Q4 2019
30
35
40
45
50
55
Q4 2018 Currency IFRS - 16 Organic Q4 2019
15
Q4 CASH FLOW
mSEK Q4 2019 Q4 2018 2019 YTD 2018 YTD
Operating Cash Flow 180 245 870 648
Total NWC changes -72 -220 -62 -284
Maintenance capex & other -200 -146 -434 -312
Free cash flow -93 -121 374 51
Expansion capex -15 -34 -69 -161
Business combinations -180 -447 -244 -754
Divestments - 4 21 90
Cash flow after investing activities -288 -598 81 -774
Net Debt/EBITDA 3.2 3.8 3.2 3.8
IFRS 16 effect on Net Debt/EBITDA -0.04 -0.04
16
NEW SEGMENTS FROM Q1, 2020
Steriles
Development & Licensing
Solids & Others
Advanced Delivery Systems
CONCLUDING REMARKSThomas ElderedCEO
18
REACHING OUR TARGETS
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2020
Note 1. Excluding IFRS 16 effectNote 2. Proposal
6.4bn
8.0bn
LTM Sales/Quarter Current status Financial targets
At least SEK 8 billion sales by 2020
8 bn+14% Q4
+17% 2019
EBITDA margin at least 16%>16%
17.3%1 Q4
16.1%1 2019
Net debt to equity ratio less than 0.8<0.80.7 Q4
Dividend 30-50% of net profit30-50%SEK 1.602 2019
19
NEW FINANCIAL TARGETS
SALES
PREVIOUS
SEK8 BNBy 2020
NEW
LONG-TERM GROWTH OF
≥11%CAGR
MARGINPREVIOUS
EBITDA16%
NEW
EBITA ≥12%
CAPITALEFFICIENCY
NEW
RETURN ON OPERATING
CAPITAL
≥10%
PREVIOUS
ND/EQ<0.8
Note. All measures are Alternative Performance Measures
20
SUMMARY 2019CREATING A PLATFORM FOR FURTHER ACCRETIVE GROWTH
17.3%EBITDA margin
1294MSEK EBITDA
17%Sales increase
Well invested in attractive, high demand areas
Growing demand from current and new customers
Good organic growth and expanding margins
Strong cash flow, reduced capex and lower leverage
Improved ROCE, ROE and EPS
Transformational acquisition of Consort Medical Ltd
Advanced delivery systems and a top 5 Global CDMO
21
22
Q&A
23
CONTACT INFORMATION
Thomas Eldered
CEO & Managing Director
+46 (0)8 602 52 10
Tobias Hägglöv
CFO & EVP
+46 (0)8 602 52 00, [email protected]