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FIRST QUARTER REPORT PRESENTATIONThomas Eldered, CEO
Tobias Hägglöv, CFO
3
FIRST QUARTER EVER WITH SALES SEK 1.8+ BNBENEFITTING FROM GLOBAL REACH AND COMPETITIVE VALUE PROPOSITION
• Net sales of SEK 1,812 m, total increase 20%
• EBITDA SEK 291 m (250)
• EBITDA margin 16.1% (16.5)
• Cash flow after working capital changes SEK 218 m (47)
• Return on equity 4.1% (2.5)
• EPS SEK 1.17 (0.70)
16.1%EBITDA margin
291MSEK EBITDA
20%Sales increase
1.5
1.8
Q1 Q2 Q3 Q4 Q1 19
Net salesSEK bn
250
291
Q1 Q2 Q3 Q4 Q1 19
EBITDASEK m
+20% +17%
SALES +42%
STERILES & INHALATION: good demand for inhalation products and continued ramp-up in recently expanded capacities. Planned shutdownand temporary technical and supply issues still had impact butimproving.Organic net sales growth flat
SOLIDS & OTHERS: good demand from new solids contracts. Softer demand for certain semi-solids and oral betalactams. Several additional new projects in tech-transfer. Organic net sales growth +5%
SALES +8%
DEVELOPMENT & TECHNOLOGY performing well. Exceptional API business and increased efficiency in global development business. Royalty income decreased and own product rights suffered from short supply of products, partly offset by improved distribution and increased prices. Organic net sales growth +4%
SALES +8%
7
SERIALISATION FROM RECIPHARM
• Total capex MEUR 35, finalised in Q1
• All 15 manufacturing sites operational
• Implemented for EU from February 2019
8
ITALY -3%
Brescia
Lainate
Masate
Paderno Dugnano
PORTUGAL +18%
Odivelas
Queluz
SPAIN +64%
Leganés
Parets
STABLE TOTAL REVENUES ON HIGH LEVEL IN THE QUARTERSALES GROWTH EXCLUDING ACQUISITIONS
USA +180%
Research Triangle Park
SWEDEN -12%
Stockholm
Höganäs
Karlskoga
Solna
Strängnäs
Uppsala
EUROPE
UK -57%
Ashton
GERMANY +7%
Wasserburg
FRANCE +5%
Fontaine
Kaysersberg
Monts
Pessac
ISRAEL +61%
Ness Ziona
INDIA +14%
BengaluruKarnal & Paonta Sahib
Manufacturing services Development services
[Holmes Chapel ]
FINANCIALSTobias Hägglöv(currency SEK million)
10
P&L DEVELOPMENT
*) Defined as Operating Cash Flow, including working capital changes and maintenance investments
Q1 2019 Q1 2018 2018 FY
Net sales 1,812 1,513 6,374
Organic 2% 9% 12%
Acquired 14% 2% 4%
Currency 4% 3% 4%
EBITDA 291 250 987
EBITDA margin 16.1% 16.5% 15.5%
Free Cash flow*) 168 -16 63
Earnings per share 1.17 0.70 2.43
IFRS 16 effect EBITDA 23
IFRS 16 effect EBITDA margin 1.2%-pts
11
IFRS 16 IMPACT
mSEK Q1 2019
Financial net debt +295
EBITDA, Group +23
Steriles & Inhalation +4
Solids & Others +6
Development & Technology +4
Discontinued operations +7
Other +1
Depreciation, Group -21
EBIT, Group +2
12
EBITDA BRIDGE Q1 Y-O-Y
MSEK
250
+35 -19 +32-1 -6
291
0
50
100
150
200
250
300
350
EBITDA Q1 2018 Steriles &
Inhalation
Solids & Others Development &
Technology
Discontinued
operations
Other EBITDA Q1 2019
13
MANUFACTURING SERVICES – STERILES & INHALATION
EBITDA BRIDGE, JANUARY – MARCH
SALES BRIDGE, JANUARY – MARCH
SEK million EBITDA
2018 111
Currency 4
Acquisitions 49
Accounting standards (IFRS 16) 4
Organic -22
Total 35
2019 146
Sales, MSEK Sales, %
2018 564
Currency 24 4
Acquisitions 216 38
Organic -1 0
Total 239 42
2019 803400
450
500
550
600
650
700
750
800
850
Q1 2018 Currency Acquisitions Organic
growth
Q1 2019
0
20
40
60
80
100
120
140
160
180
14
MANUFACTURING SERVICES – SOLIDS & OTHERS
SALES BRIDGE, JANUARY – MARCH
EBITDA BRIDGE, JANUARY – MARCH
Sales, MSEK Sales, %
2018 642
Currency 20 3
Acquisitions - -
Organic 29 5
Total 49 8
2019 692
SEK million EBITDA
2018 109
Currency 4
Acquisitions -
Accounting standards (IFRS 16) 6
Organic -29
Total -19
2019 90
400
450
500
550
600
650
700
750
Q1 2018 Currency Organic growth Q1 2019
0
20
40
60
80
100
120
140
Q1 2018 Currency IFRS - 16 Organic Q1 2019
15
DEVELOPMENT & TECHNOLOGY
SALES BRIDGE, JANUARY – MARCH
EBITDA BRIDGE, JANUARY – MARCH
Sales, MSEK Sales, %
2018 257
Currency 10 4
Acquisitions - -
Organic 11 4
Total 21 8
2019 278
SEK million EBITDA
2018 53
Currency 3
Acquisitions -
Accounting standards (IFRS 16) 4
Organic 26
Total 33
2019 86
0
50
100
150
200
250
300
Q1 2018 Currency Organic growth Q1 2019
0
10
20
30
40
50
60
70
80
90
100
Q1 2018 Currency IFRS - 16 Organic Q1 2019
16
Q1 CASH FLOW
mSEK Q1 2019 Q1 2018 2018 FY
Operating Cash Flow 218 184 648
Total NWC changes 0 -137 -284
Maintenance capex & other -50 -64 -301
Free cash flow 168 -16 63
Expansion capex -14 -35 -161
Business combinations - -307 -754
Divestments - - 78
Cash flow after investing activities 154 -358 -774
Net Debt/EBITDA 3.9 4.7 3.8
IFRS 16 effect Net Debt/EBITDA 0.2
CONCLUDING REMARKSThomas ElderedCEO
18
WELL ON TRACK TO REACH OUR TARGETS
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
2013 2014 2015 2016 2017 2018 LTM Q1
+20%
2.1bn+21%
+32%
+38%
8.0bn
Financial targets
At least SEK 8bn sales by 2020
EBITDA margin at least 16%
Net debt to equity ratio less than 0.8
Status
▪ 16.1%1 Q1
▪ 15.4%2 LTM Q1
✓ 0.71 Q1
▪ +20% Q1
▪ +21% LTM Q1
Dividend 30-50% of net profit
+14%
✓ SEK 1.25 proposal
Note 1. Including IFRS 16 effectNote 2. EBITDA-margin continuing operations was 17.0%
19
SUMMARY – WELL ON TRACK TOWARDS OUR TARGETSBENEFITTING FROM GLOBAL REACH AND COMPETITIVE VALUE PROPOSITION
• Well invested in attractive, high demand areas
• Sales growth 20%
• Organic growth in continuing operations 3%
• Strong cash flow and reduced capex
• Improved ROCE and ROE
• EPS +67%
• Promising project pipe-line
16.1%EBITDA margin
291MSEK EBITDA
20%Sales increase
1.5
1.8
Q1 Q2 Q3 Q4 Q1 19
Net salesSEK bn
250
291
Q1 Q2 Q3 Q4 Q1 19
EBITDASEK m
+20% +17%
Q&A
21
CONTACT INFORMATION
Thomas Eldered
CEO & Managing Director
+46 (0)8 602 52 00
Tobias Hägglöv
CFO & EVP
+46 (0)8 602 52 00, [email protected]