Full-Year-report January-December 2014

October - December 2014

  • Net sales amounted to SEK 873 million (573), an increase of 52% compared to same quarter last year (48% in fixed FX-rates)
  • EBITDA increased by 84% compared to same quarter last year and amounted to SEK 147 million (80)
  • Operating profit (EBIT) amounted to SEK 95 million (54), giving an operating margin of 10.9% (9.5)
  • Profit after tax amounted to SEK 49 million (12), giving a net margin of 5.6% (2.0)
  • Earnings per share amounted to SEK 1.24 (0.46), after dilution 1.18 (0.46)
  • 2014 acquisitions generated SEK 255.5 million in sales and 58.4 in EBIT excluding acquisition costs.

January - December 2014                                                  

  • Net sales amounted to SEK 2 569 million (2 125), an increase of 21% compared to last year (18% in fixed FX rates)
  • EBITDA increased by 41% compared to last year and amounted to SEK 399 million (283)
  • Operating profit (EBIT) amounted to SEK 272 million (188), giving an operating margin of 10.6% (8.9)
  • Profit after tax amounted to SEK 160 million (94), giving a net margin of 6.2% (4.4)
  • Earnings per share amounted to SEK 4.63 (3.72), after dilution 4.13 (3.66)
  • Cash flow from operating activities was SEK 254 million (180)
  • Net debt to Equity was 0.5 (0.6)
  • Proposed share dividend is SEK 1.25 per share

Key figures
Oct – Dec Change                 Jan – Dec Change
SEK million 2014 2013 in % 2014 2013 in %
Net sales 872.9 572.8 52.4 2 569.3 2 124.6 20.9
Net sales (constant FX rates) 846.1 47.7 2 496.8 17.5
EBITDA 147.4 80.2 83.9 399.3 283.0 41.1
EBIT 95.3 54.5 75.0 272.1 188.1 44.7
EBIT margin (%) 10.9 9.5 10.6 8.9
Earnings per share 1.24 0.46 4.63 3.72
Non-recurring items 16.6 4.2 19.2 6.5
Return on equity (%) 11.4 14.5
Return on operating capital (%) 12.4 17.6
Equity to assets (%) 39.4 37.6
Net debt 1 163.7 409.9
Net debt to Equity 0.5 0.6
Net debt to EBITDA 2.9 1.4

Thomas Eldered, CEO: 

“Sales in the fourth quarter were at the highest level ever for an individual quarter, even without acquisitions. The positive organic growth seen previously in the year has continued, with Recipharm thus delivering a very strong year. Our twentieth year after we founded the company in 1995 has been full of corporate activities and Recipharm is now ideally positioned to continue towards our vision and long term objectives.

During the fourth quarter we completed three important acquisitions, in Italy, Portugal and France. Combined, these acquisitions provide access to highly interesting new markets, increases technical capabilities in high demand, significantly add to our intellectual property backed business and add a number of high potential customers.  Integration into the Recipharm group is progressing according to plan and still ongoing, but we already see significant additional opportunities to explore. The acquisitions have contributed well in line with plan so far, increasing group revenue by 45% and EBITDA by 82% in the fourth quarter. We have financed these acquisitions mostly with bank financing and equity. We are comfortable with the current Net debt to EBITDA level of 2.9 and it will be reduced when the whole year EBITDA effect from the acquisitions is realized.

The Development & Technology segment performed exceptionally well, benefiting from currency tailwinds, strong demand and certain favorable non-recurring items.  Manufacturing Services, excluding acquisitions, showed weaker performance throughout the year, due to several non-recurring items as well as a discontinued distribution business. The strategically important lyophilisation capacity expansion project in Germany continued according to plan with production scheduled to begin towards the end of 2016. During the fourth quarter a major customer served notice of termination of a manufacturing contract for a range of beta-lactam products. The concerned production site in Strängnäs will continue operation also beyond this withdrawal, however at less capacity.

In the short term we expect limited organic growth and margins will be under some pressure with impact from discontinued businesses and less of favorable one-off items. We see however a positive development both in sales from new projects and in the number of quotations we offer. Following the increased share of IP backed business we foresee an increase in seasonal variation, with a relatively stronger fourth quarter and a somewhat weaker first quarter going forward. An important new regulatory requirement for pharmaceutical manufacturers is demands for traceability of single retail packages (“serialization”). We are well positioned for this and have already introduced this for some markets. We expect to invest a total of around SEK 150 million during the next three years in order to comply with these new regulations. The cost for this is expected to be covered by our customers.

Going forward, acquisitions will continue to be an important growth driver and we see several highly interesting opportunities to pursue during the coming year, in particular in new geographies. However, organic growth driven by a pipeline of projects from Development & Technology will play an increasingly important role. We will therefore increase significantly our investments in strategic collaboration, technology development as well as product development.  In addition we will continue to invest in manufacturing capabilities where we see high demand. In combination with exploring promising opportunities following completed acquisitions, we expect important contributions to organic growth from these investments in the mid- to long term”

The complete Full-Year-report is attached through the link at the end of the press release.

The company invites investors, analysts and media to a web conference (in English) on 19 February at 10:00 am CET, where CEO Thomas Eldered and CFO Björn Westberg will present and comment on the Full-Year-report as well as answer questions.

To participate in the web conference, please use the following link:

If you don’t wish to ask questions you only need to participate through the link above.

To ask questions after the presentation, please dial:
From Sweden: + 46 8 505 56 453
From Denmark: + 45 35 44 55 74
From Finland: + 358 9 8171 0490
From Norway: + 47 235 00 251
From the UK: + 44 203 009 24 55
From Germany: +49 211 971 900 76
From Switzerland: +41 225 80 29 94
From France: + 33 170750706
From Spain: +34 911 140 089
From Portugal: +35 121 06 09 104 
From USA: 1 855 228 3719 

Pin code for participants:

For more information, please visit www.recipharm.com or contact:
Thomas Eldered, VD, thomas.eldered@recipharm.com, +46 8 602 52 00
Björn Westberg, CFO, bjorn.westberg@recipharm.com, +46 8 602 46 20

This information is published in accordance with the Swedish Securities Market Act, the Swedish Financial Instruments Trading Act and/or the regulations of NASDAQ Stockholm. This information was submitted for publication on 19 February 2015, at 07:45 am CET.

About Recipharm
Recipharm is a leading CDMO (Contract Development and Manufacturing Organisation) in the pharmaceutical industry employing some 2,200 employees. Recipharm offers manufacturing services of pharmaceuticals in various dosage forms, production of clinical trial material including API and pharmaceutical product development. Recipharm manufactures more than 400 different products to customers ranging from Big Pharma to smaller research- and development companies. Recipharm’s turnover is approximately SEK 3.3 billion and the Company operates development and manufacturing facilities in Sweden, France, the UK, Germany, Spain, Italy and Portugal and is headquartered in Jordbro, Sweden. The Recipharm B-share (RECI B) is listed on Nasdaq Stockholm.

For more information on Recipharm and our services, please visit www.recipharm.com