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THIRD QUARTER REPORT PRESENTATIONThomas Eldered, CEOTobias Hägglöv, CFO
3
BEST THIRD QUARTER EVERACCELERATING TOWARDS OUR TARGETS
• Net sales of SEK 1,797 m, +26%• EBITDA SEK 282 m, +87%• EBITDA margin 15.7% (10.6)• Profit after tax SEK 81 m (-9)• Cash flow after working capital changes SEK 224 m, +30%• Return on equity 5.9% (2.8)• EPS SEK 1.19 (-0.37)
15.7%EBITDA margin
282MSEK EBITDA
26%Sales increase
1.4
1.8
Q3 Q4 Q1 19 Q2 Q3
Net salesSEK bn
151
282
Q3 Q4 Q1 19 Q2 Q3
EBITDASEK m
4
BUSINESS MOMENTUM INCREASINGBENEFITTING FROM GLOBAL REACH AND ATTRACTIVE VALUE PROPOSITION
• Strong growth in all three segments and in all geographies
• Several new projects implemented in Solids & Others
• Global development services continues to perform well, material contribution to D&T
• Continued good performance in newly acquired operations in Holmes Chapel, benefitting also from Brexit stock building
• Ramp-up of recently expanded capacities continues
• Serialisation fully implemented
• Underperformance in non-lyophilized injectables
• End of operations in two facilities (UK+SE) progressing as planned
• Offer log to current and new customers at record levels
• Several promising new products in tech transfer with effect from next year
STERILES & INHALATION
DEVELOPMENT & TECHNOLOGY
SOLIDS & OTHERS
SALES +42%EBITDA +54%
SALES +18%EBITDA +93%
SALES +19%EBITDA +125%
5
ITALY +17%
Brescia
Lainate
Masate
Paderno Dugnano
PORTUGAL +21%
Odivelas
Queluz
SPAIN +29%
Leganés
Parets
DOUBLE DIGIT ORGANIC GROWTHSALES GROWTH Q3 2019 EXCLUDING ACQUISITIONS
USA +0%
Research Triangle Park
SWEDEN +3%
Stockholm
Höganäs
Karlskoga
Solna
Strängnäs
Uppsala
EUROPE
UK -59%
Ashton
GERMANY +8%
Wasserburg
FRANCE +14%
Fontaine
Kaysersberg
Monts
Pessac
ISRAEL +99%
Ness Ziona
INDIA +14%
BengaluruKarnal & Paonta Sahib
Manufacturing services Development services
Holmes Chapel
6
NEW PARTNERSHIP IN INDIAEXPANSION OF SCOPE AND CAPABILITIES
• Event after the period end• Long-term partnership with Indian Sobti family• Nichepharm Lifesciences Pvt Ltd is building a new
injectable dose form manufacturing facility in Dehradun• Expected to comply with important international
regulatory requirements• Fully operational 2022• Investment SEK 110 m for 8%, option to acquire further
16% 2021 • Will provide access to high quality injectables
manufacturing capacity with attractive cost-level
FINANCIALSTobias Hägglöv, CFO
8
P&L DEVELOPMENT
*) Defined as Operating Cash Flow, including working capital changes and maintenance investments
MSEK Q3 2019 Q3 2018 2018 FY
Net sales 1,797 1,421 6,374
Organic 11% 12% 12%
Acquired 13% - 4%
Currency 3% 6% 4%
EBITDA 282 151 987
EBITDA margin 15.7% 10.6% 15.5%
Free Cash flow*) 128 154 63
Earnings per share (adjusted) 1.19 -0.37 2.73
IFRS 16 effect EBITDA 24
IFRS 16 effect EBITDA margin 1.3%-pts
9
EBITDA BRIDGE Q3 Y-O-Y
MSEK
307 354307
0
50
100
150
200
250
300
350
EBITDA Q3 2018 Steriles &Inhalation
Solids & Others Development &Technology
Discontinuedoperations
Other EBITDA Q3 2019
282
+36
151
+57
+/-0 -10+37
+47
10
MANUFACTURING SERVICES – STERILES & INHALATION
EBITDA BRIDGE, JUL – SEP
SALES BRIDGE, JUL – SEP
MSEK EBITDA2018 105
Currency 3
Acquisitions 58
Accounting standards (IFRS 16) 5
Organic -9
Total 57
2019 162
Sales, MSEK Sales, %2018 607
Currency 21 3
Acquisitions 180 30
Organic 57 9
Total 257 42
2019 865 400
500
600
700
800
900
Q3 2018 Currency Acquisitions Organicgrowth
Q3 2019
0
40
80
120
160
200
11
MANUFACTURING SERVICES – SOLIDS & OTHERS
SALES BRIDGE, JUL – SEP
EBITDA BRIDGE, JUL – SEP
Sales, MSEK Sales, %2018 567
Currency 15 3
Acquisitions - -
Organic 86 15
Total 101 18
2019 668
MSEK EBITDA
2018 51
Currency 3
Acquisitions -
Accounting standards (IFRS 16) 6
Organic 38
Total 47
2019 98
400
450
500
550
600
650
700
Q3 2018 Currency Organic growth Q3 2019
0
20
40
60
80
100
120
Q3 2018 Currency IFRS - 16 Organic Q3 2019
12
DEVELOPMENT & TECHNOLOGY
SALES BRIDGE, JUL – SEP
EBITDA BRIDGE, JUL – SEP
Sales, MSEK Sales, %
2018 206
Currency 6 3
Acquisitions - -
Organic 33 16
Total 39 19
2019 245
MSEK EBITDA
2018 30
Currency 1
Acquisitions -
Accounting standards (IFRS 16) 4
Organic 32
Total 37
2019 66
0
50
100
150
200
250
300
Q3 2018 Currency Organic growth Q3 2019
0
10
20
30
40
50
60
70
Q3 2018 Currency IFRS - 16 Organic Q3 2019
13
Q3 CASH FLOW
MSEK Q3 2019 Q3 2018 2019 YTD 2018 YTD
Operating Cash Flow 227 -47 690 402
Total NWC changes -4 219 10 -64
Maintenance capex & other -96 -18 -234 -166
Free cash flow 128 154 466 180
Expansion capex -18 -44 -54 -127
Business combinations - - -64 -307
Divestments 21 23 21 86
Cash flow after investing activities 131 133 370 -176
Net Debt/EBITDA 3.2 3.4 3.2 3.4
IFRS 16 effect on Net Debt/EBITDA 0.03 0.03
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
14.4%1 Q3
15.7%1 YTD Q3 2019
15.8%1 LTM Q3
0.7 Q3
+26% Q3
+20% LTM Q3
Dividend 30-50% of net profit
SEK 1.25 2018
Note 1. Excluding IFRS 16 effect
6.4bn
8.0bn
LTM Sales/Quarter
16
SUMMARY – ACCELERATING 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 26%, EBITDA growth 87%• Double digit organic growth• Strong cash flow and reduced capex• Improved ROCE, ROE and EPS• Promising project pipe-line• Accretive acquisition opportunities
1.4
1.8
Q3 Q4 Q1 19 Q2 Q3
Net salesSEK bn
151
282
Q3 Q4 Q1 19 Q2 Q3
EBITDASEK m
15.7%EBITDA margin
282MSEK EBITDA
26%Sales increase
Q&A
18
CONTACT INFORMATION
Thomas Eldered
CEO & Managing Director
+46 (0)8 602 52 10
Tobias Hägglöv
CFO & EVP
+46 (0)8 602 52 00, [email protected]
