Highlights
Financial highlights
- Group revenue of $895 million, up 1% in H1 2017 and up 5% in constant currency,[3] reflecting the consolidation of an additional two months of West-Ward Columbus and continued Injectables growth, partially offset by lower Branded revenue
- Group core operating profit of $176 million, in line with H1 2016 and up 3% in constant currency, with a good improvement in Generics profitability, offset by a weaker Branded performance
- Group core basic earnings per share of 45.4 cents, down 6% and down 3% in constant currency due to the issuance of 40 million new shares to Boehringer Ingelheim in H1 2016 as part of the consideration for the West-Ward Columbus acquisition
- Group operating cash flow of $225 million, up from $99 million, reinforcing our strong balance sheet
- Net debt reduced from $697 million to $633 million and healthy leverage ratios maintained
- Interim dividend of 11.0 cents per share, in line with the interim dividend for H1 2016
- We now expect 2017 Group revenue to be around $2.0 billion in constant currency after lowering our guidance for the Generics business. We now expect Generics revenue to be around $620 million and core Generics operating profit to be around $30 million in 2017
Strategic highlights
- Launched 75 products,[4] expanding and enhancing our global product portfolio
- Invested 7% of Group revenue in R&D and product-related investments, while enhancing the efficiency of our R&D programmes
- Expanded our licensing and distribution agreement with Takeda Pharmaceutical Company Limited (Takeda), adding attractive branded products to our MENA portfolio in strategic therapeutic categories
- Strengthened the management teams across our three businesses to support stronger execution and future growth
- Continuing constructive discussions with the US Food and Drug Administration (FDA) to address the questions raised in the complete response letter (CRL) received in respect of our generic version of Advair Diskus® in May 2017
Said Darwazah, Chairman and Chief Executive Officer of Hikma, said:
“The Group has delivered stable revenue and profitability in the first half of 2017 in an increasingly challenging environment.
In the US, where competition is increasing and pricing pressure is intensifying, sales in our Injectables business were resilient and we maintained our track record of strong profitability. The tougher market conditions did however continue to limit growth in our Generics business. We remain focused on executing our Generics strategy and we have strengthened the management team and further restructured the cost base to provide a robust and efficient platform to support pipeline execution and future growth. Whilst Branded revenue declined in the first half, primarily as a result of the devaluation of the Egyptian pound at the end of 2016 and shipment delays during Ramadan and Eid, we remain confident that we will deliver a much stronger performance in the second half of the year.
Across the Group, we are taking actions to deliver value from our marketed products, invest in our pipeline and enhance the efficiency of our operations, to ensure we remain well positioned for future growth.
[1] Core results are presented to show the underlying performance of the Group, excluding amortisation of intangible assets other than software and the exceptional items set out in note 4
[2] Earnings before interest, tax, depreciation and amortisation and other exceptional items set out in note 4
[3] Constant currency numbers in H1 2017 represent reported H1 2017 numbers re-stated using average exchange rates in H1 2016. A summary of the exchange rates used is provided on page 10
[4] Including all dosage forms and strengths, across all markets