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SECOND QUARTER REPORT PRESENTATIONThomas Eldered, CEO
Tobias Hägglöv, CFO
3
ALL-TIME-HIGH SALES CONTINUED SEQUENTIAL PERFORMANCE IMPROVEMENTSTEADY PROGRESS TOWARDS OUR TARGETS
• Net sales of SEK 1,867 m, +10%
• EBITDA SEK 354 m, +15%
• EBITDA margin 19.0% (18.1)
• Profit after tax SEK 94 m, +38%*
• Cash flow after working capital changes SEK 259 m (119)
• Return on equity 4.1% (2.2*)
• EPS SEK 1.38 (1.13), +22%*
19.0%EBITDA margin
354MSEK EBITDA
10%Sales increase
1.7
1.9
Q2 Q3 Q4 Q1 19 Q2
Net salesSEK bn
307
354
Q2 Q3 Q4 Q1 19 Q2
EBITDASEK m
+10%+15%
* APM. 2018 adjusted for non-recurring items, including divestment of Thyrosafe
4
BUSINESS MOMENTUM INCREASINGBENEFITTING FROM GLOBAL REACH AND ATTRACTIVE VALUE PROPOSITION
• Good and increasing demand for inhalation and lyophilization technologies
• Good performance in newly acquired operations in Holmes Chapel
• Ramp-up of recently expanded capacities continues
• Serialisation nearly fully implemented
• Underperformance in non-lyophilized injectables and oral solids
• Global development services continues to improve and contribute
• End of operations in two facilities (UK+SE) progressing as planned
• Record value of offers to current and new customers
• Several promising new products in tech transfer
STERILE LIQUIDS
DEVELOPMENT & TECHNOLOGY
SOLIDS & OTHERS
SALES +32%EBITDA MARGIN 19.4%
SALES -4%EBITDA MARGIN 17.9%
SALES +3%EBITDA MARGIN 33.4%
5
STEADY PROGRESS IN ALL SEGMENTSPERFORMANCE ON A 12 MONTHS BASIS
Development & Technology
Steriles & Inhalation Solids & Others
Sales SEK 963mGrowth +2%
EBITDA SEK 254mMargin 26.3% (24.0%)
Sales SEK 2,698m Growth +12%
EBITDA SEK 403mMargin 14.9% (14.8%)
Sales SEK 3,001mGrowth +34%
EBITDA SEK 568mMargin 18.9% (18.7%)
LTM
Q2 2
019
6
ITALY -2%
Brescia
Lainate
Masate
Paderno Dugnano
PORTUGAL +11%
Odivelas
Queluz
SPAIN +30%
Leganés
Parets
STABLE TOTAL REVENUES ON HIGH LEVELSALES GROWTH H1 2019 EXCLUDING ACQUISITIONS
USA +100%
Research Triangle Park
SWEDEN -13%
Stockholm
Höganäs
Karlskoga
Solna
Strängnäs
Uppsala
EUROPE
UK -43%
Ashton
GERMANY +9%
Wasserburg
FRANCE 0%
Fontaine
Kaysersberg
Monts
Pessac
ISRAEL +80%
Ness Ziona
INDIA +10%
BengaluruKarnal & Paonta Sahib
Manufacturing services Development services
[Holmes Chapel ]
FINANCIALSTobias Hägglöv, CFO
8
P&L DEVELOPMENT
*) Defined as Operating Cash Flow, including working capital changes and maintenance investments
SEKm Q2 2019 Q2 2018 2018 FY
Net sales 1,867 1,701 6,374
Organic -4% 17% 12%
Acquired 11% - 4%
Currency 2% 4% 4%
EBITDA 354 307 987
EBITDA margin 19.0% 18.1% 15.5%
Free Cash flow*) 171 39 63
Earnings per share (adjusted) 1.38 1.13 2.73
IFRS 16 effect EBITDA 23
IFRS 16 effect EBITDA margin 1.2%-pts
9
EBITDA BRIDGE Q2 Y-O-Y
SEKm
307 354307
0
50
100
150
200
250
300
350
400
EBITDA Q2 2018 Steriles &Inhalation
Solids & Others Development &Technology
Discontinuedoperations
Other EBITDA Q2 2019
354
+36
307
-13 +18+/-0 +6
10
MANUFACTURING SERVICES – STERILES & INHALATION
EBITDA BRIDGE, APRIL – JUNE
SALES BRIDGE, APRIL – JUNE
SEKm EBITDA
2018 129
Currency 4
Acquisitions 35
Accounting standards (IFRS 16) 4
Organic -7
Total 36
2019 165
SEKm Sales %
2018 642
Currency 20 3
Acquisitions 186 29
Organic -1 0
Total 205 32
2019 848400
500
600
700
800
Q2 2018 Currency Acquisitions Organicgrowth
Q2 2019
0
40
80
120
160
200
Q2 2018 Currency Acquisitions IFRS - 16 Organic Q2 2019
11
MANUFACTURING SERVICES – SOLIDS & OTHERS
SALES BRIDGE, APRIL – JUNE
EBITDA BRIDGE, APRIL – JUNE
SEKm Sales %
2018 742
Currency 15 2
Acquisitions - -
Organic -47 -6
Total -32 -4
2019 710
SEKm EBITDA
2018 140
Currency 3
Acquisitions -
Accounting standards (IFRS 16) 6
Organic -23
Total -13
2019 127
400
500
600
700
800
Q2 2018 Currency Organic growth Q2 2019
0
40
80
120
160
Q2 2018 Currency IFRS - 16 Organic Q2 2019
12
DEVELOPMENT & TECHNOLOGY
SALES BRIDGE, APRIL – JUNE
EBITDA BRIDGE, APRIL – JUNE
SEKm Sales %
2018 261
Currency 7 2
Acquisitions - -
Organic 1 0
Total 7 3
2019 269
SEKm EBITDA
2018 72
Currency 2
Acquisitions -
Accounting standards (IFRS 16) 4
Organic 12
Total 18
2019 90
0
100
200
300
Q2 2018 Currency Organic growth Q2 2019
0
20
40
60
80
100
Q2 2018 Currency IFRS - 16 Organic Q2 2019
13
Q2 CASH FLOW
SEKm Q2 2019 Q2 2018 2019 YTD
Operating Cash Flow 245 265 463
Total NWC changes 14 -146 13
Maintenance capex & other -88 -80 -138
Free cash flow 171 39 339
Expansion capex -22 -48 -36
Business combinations -64 - -64
Divestments - 59 -
Cash flow after investing activities 84 50 239
Net Debt/EBITDA 3.7 3.8 3.7
IFRS 16 effect on Net Debt/EBITDA 0.1
CONCLUDING REMARKSThomas ElderedCEO
15
WELL ON TRACK TO REACH 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
Financial targets
At least SEK 8bn sales by 2020
EBITDA margin at least 16%
Net debt to equity ratio less than 0.8
Status
✓ 17.8%1 Q2
✓ 16.3%1 H1 2019
▪ 15.8%1,2 LTM Q2
✓ 0.7 Q1
▪ +10% Q2
▪ +18% LTM Q2
Dividend 30-50% of net profit
✓ SEK 1.25 2018
Note 1. Excluding IFRS 16 effectNote 2. Continuing operations
6.4bn
8.0bn
LTM Sales/Quarter
16
SUMMARY – STEADY PROGRESS TOWARDS OUR TARGETSBENEFITTING FROM GLOBAL REACH AND COMPETITIVE VALUE PROPOSITION
• Well invested in attractive, high demand areas
• Growing demand from current and new customers
• Sales growth 10%, EBITDA growth 15%
• Organic growth set to improve
• Strong cash flow and reduced capex
• Improved ROCE, ROE and EPS
• Promising project pipeline
19.0%EBITDA margin
354MSEK EBITDA
10%Sales increase
Q&A
18
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]