Full Year report January - December 2015

October - December 2015

  • Net sales amounted to SEK 863 million (873), a decrease of 1%
  • EBITDA amounted to SEK 110 million (147) giving an EBITDA margin of 12.7% (16.9)
  • Operating profit (EBIT) amounted to SEK 48 million (95)
  • Profit after tax amounted to SEK 26 million (49), giving a net margin of 3.0% (5.6)
  • Earnings per share amounted to SEK 0.56 (1.24), after dilution 0.56 (1.18)

January - December 2015

  • Net sales amounted to SEK 3 389 million (2 569), an increase of 32%
  • EBITDA increased by 28% and amounted to SEK 510 million (399) giving an EBITDA margin of 15.0% (15.5)
  • Operating profit (EBIT) amounted to SEK 274 million (272)
  • Profit after tax amounted to SEK 215 million (160), giving a net margin of 6.3% (6.2), including a financial investment capital gain of SEK 36.3 million
  • Earnings per share amounted to SEK 4.72 (4.63), after dilution 4.72 (4.13)
  • Cash flow from operating activities was SEK 429 million (254)
  • Net debt to EBITDA was 2.3 (2.9)
  • Proposed share dividend is SEK 1.50 (1.25) per share
Key figures
   Oct - Dec    Change    Jan - Dec    change
SEK million 2015 2014 in % 2015 2014 in %
Net sales 863 873 -1.1 3 389 2 569 31.9
Net sales (constant FX rates) 858 -1.7 3 344       30.2
EBITDA 110 147 -25.4 510 399 27.7
EBIT 48 95 -49.1 274 272 0.8
EBITDA margin (%) 12.7 16.9 15.0 15.5
Earnings per share 0.56 1.24 4.72 4.63
Return on equity (%) 8.8 11.4
Return on operating capital (%)  7.6 12.4
Equity to assets (%) 48.1 39.4
Net debt 1 183 1 164
Net debt to Equity 0.4 0.5
Net debt to EBITDA 2.3 2.9

Thomas Eldered, CEO:

“Customer demand developed in-line with our expectations during the quarter, with the exception of Sterile Liquids, which saw both the effects of a discontinued packaging-only contract and destocking with certain customers. Sales declined by 1%, driven mainly by lower sales volumes in Sterile Liquids and of the volatile tender product Thyrosafe, almost offset by increases from acquisitions and Development&Technology. Signing of new manufacturing agreements reached record levels and generated a healthy pipeline of new projects with significant potential in all segments.

Lower sales volumes together with an unfavourable product mix and a discontinued distribution business had a material impact on profit and margins. Acquisition related costs and the start-up of our Israeli development laboratory had further negative impact. In addition, SEK 15.0 million for the Cost and Efficiency Program in Sweden was charged in the quarter. EBITDA for the full year increased by 28%, but EBITDA for the quarter declined driven by a combination of temporary effects or non-recurring costs, and more long-term effects. We expect the Cost and Efficiency Program in combination with other measures, to contribute to a sequential increase in EBITDA quarter by quarter going forward.

I’m pleased to report continued strong cash flow and reduced working capital. Due to the December 31 completion and payment of the factory purchase in Kaysersberg, France the net debt to EBITDA ratio increased to 2.3. Deliveries under the new contract from this factory will commence already from the beginning of 2016 and this contract is expected to generate sales in excess of EUR 36 million while also contributing to increased margins. After the quarter we have received approval from Indian authorities of the acquisition of a majority stake in the Indian company Nitin Lifesciences Ltd. Completion is expected at April 1, 2016.

With the closing of the Indian acquisition we anticipate to reach our growth objective to double sales years ahead of plan. In order to reflect the rapid growth since the IPO in 2014, market conditions, consolidation opportunities and the competitive landscape the Group’s financial objectives have been adjusted. The new objectives are to reach sales of at least SEK 8 billion by 2020, to have an EBITDA margin of at least 16% and to have a net debt to equity ratio less than 0.8. Our objective that 30-50% of profit after tax should be distributed as dividend to shareholders remains unchanged.

This concludes 2015, a year of giant forward leap for Recipharm. After the quarter we made an equity issue of SEK 276 million which provides financial flexibility also after closing of the Indian acquisition. Today I will be pleased to announce completion of the acquisition of Italian company Mitim srl. We intend to do further important transactions during 2016. Considering our good position in the market, opportunities from reshaping activities, subsequent capacity expansion in lyophilisation and expansion into new geographies, I and my team feel great optimism and we are confident that we will continue to gain market share and reach our financial objectives.”

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 with a presentation (in English) on February 24 at 10:00 am CET where CEO Thomas Eldered and CFO Björn Westberg will present and comment on the interim report and answer questions.

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

Pin code for participants:

Questions may be submitted by dialing below telephone numbers or by typing them in the Q&A box during the conference. If you don’t wish to ask questions by telephone you only need to participate through the link above.

Please note that there are new phone numbers from the ones stated in the invitation sent out on the 22nd February.

From Sweden: + 46 8 505 963 06
From Denmark: + 45 8233 31 47
From Finland: + 358 9 8171 0317
From Norway: + 47 235 00 559
From the UK: + 44 203 139 48 30
From Germany: +49 30 211 510 067
From Switzerland: +41 44 5800083
From France: + 33 29092 0977
From Spain: +34 911 143 608
From Portugal: +35 800 855 623
From Italy: +39 2 3604 67 98
From the USA: +1 718 873 90 77
From India: + 91 226187 51 03

For more information, please visit www.recipharm.com or contact:
Thomas Eldered, CEO, +46 8 602 52 10
Björn Westberg, CFO, ir@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 24 February 2016 at 07:45 am CET.

About Recipharm
Recipharm is a leading CDMO (Contract Development and Manufacturing Organisation) in the pharmaceutical industry employing some 2,500 employees. Recipharm offers manufacturing services of pharmaceuticals in various dosage forms, production of clinical trial material including API and pharmaceutical product development. Recipharm manufactures several hundred different products to customers ranging from Big Pharma to smaller research- and development companies. Recipharm’s turnover is approximately SEK 3.4 billion and the Company operates development and manufacturing facilities in Sweden, France, the UK, Germany, Spain, Italy, Portugal and Israel 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