Hikma Pharmaceuticals Plc Trading Statement (1895G)
August 03 2016 - 12:18PM
UK Regulatory
TIDMHIK
RNS Number : 1895G
Hikma Pharmaceuticals Plc
03 August 2016
Trading update
London, 3 August 2016 - Hikma Pharmaceuticals PLC (Hikma or the
Group) (LSE: HIK) (NASDAQ Dubai: HIK) (OTC: HKMPY), (rated Ba1
Moody's / BB+ S&P, both stable), the fast growing multinational
pharmaceutical group, will announce its interim results on 24
August 2016. In advance of this announcement, Hikma is providing an
update on the performance of the Group in the first half of 2016
and its revised profit expectations for the full year.
Overall, the Group has performed well in the first half of 2016.
We have made considerable progress integrating the Roxane business
(now known as West-Ward Columbus), transferring the Bedford
products to our injectables manufacturing facilities and promoting
strategic products in our MENA markets. We continue to expect Group
revenue to be in the range of $2.0 billion to $2.1 billion for the
full year in constant currency, reflecting strong revenue growth
across all three business segments, including the consolidation of
ten months of revenue from West-Ward Columbus.
Generics
Revenue from our Generics business was $257 million in the first
half of 2016. Hikma's legacy Generics business contributed revenue
of $64 million compared with $79 million in H1 2015, reflecting
lower revenue from specific market opportunities as expected and
the required divestment of certain legacy products, partially
offset by steady growth in colchicine revenue. West-Ward Columbus
contributed revenue of $193 million in the first half following the
close of the acquisition on 29 February 2016. This is lower than
our previous expectations due to slower approvals for certain new
products.
For the full year, we continue to expect revenue for the
combined Generics business to be in the range of $640 million to
$670 million, including ten months of contribution from West-Ward
Columbus. The revenue impact from the delay in certain new product
approvals will be largely offset by higher contract manufacturing
revenue. This change in the mix of revenue will have an adverse
impact on profitability in 2016, which will also be impacted by
higher than expected costs resulting from the acceleration in
timing of certain pipeline-related litigation. As a result, we now
expect Generics core operating profit for the full year to be in
the range of $30 million to $40 million.
We remain confident in the quality of the West-Ward Columbus
pipeline and we continue to expect West-Ward Columbus revenue to
increase to between $700 million to $750 million in 2017 as new
product launches accelerate. Our medium term expectations remain
unchanged and we continue to expect an increase in West-Ward
Columbus' EBITDA margin to around 35%. This high level of
profitability will be achieved through new product launches from
West-Ward Columbus' differentiated pipeline and the delivery of
cost savings. In this regard, we have made good initial progress
since closing the acquisition and we expect to achieve cost savings
in the range of $35 million to $45 million by the end of 2017.
Injectables
Our global Injectables business continued to perform well in the
first half of 2016, with revenue growth of around 3% to $356
million and numerous product approvals across our markets. We
continue to expect Injectables revenue growth to be in the mid to
high-single digits for the full year in 2016. We now expect core
operating margin to be around 38%, up from our previous guidance of
36%, due to a more favourable product mix.
Branded
Branded revenue was up 1% in constant currency or down 7% on a
statutory basis to $264 million. Our strategy of focusing on higher
margin products enabled us to maintain core operating profit in
line with H1 2015 despite a significant impact from adverse
currency movements against the US dollar. As in previous years, we
expect Branded revenue to be stronger in the second half,
reflecting the usual seasonality of this business. Our guidance for
the Branded business remains unchanged. For the full year in 2016,
we continue to expect the Branded business to perform in line with
historical trends on a constant currency basis. We expect revenue
growth to be driven by our focus on strategic products and the
strength of our sales and marketing teams. We continue to expect an
improvement in Branded core operating margin driven by revenue
growth and a focus on higher margin products.
A conference call for analysts and investors will be held today
at 17:45 UK time. To join the conference call please dial: +44 (0)
203 139 4830; UK toll free: 0808 237 0030; US: +1 718 873 9077; US
Toll-Free: +1 866 928 7517. The participant pin is: 61764968#.
An audio replay of the conference call will remain available for
30 days and can be accessed by dialling: +44 (0) 203 426 2807; UK
toll free: 0808 237 0026. The conference number is: 675668#.
This announcement contains inside information.
-- ENDS --
Enquiries
Hikma Pharmaceuticals PLC
Susan Ringdal, VP Corporate Strategy and Investor Relations +44
(0)20 7399 2760/ +44 7776 477050
Lucinda Baker, Deputy Director of Investor Relations +44 (0)20
7399 2765/ +44 7818 060211
Zeena Murad, Investor Relations Manager +44 (0)20 7399 2768/ +44
7771 665277
FTI Consulting
Ben Atwell/ Matthew Cole +44 (0)20 3727 1000
About Hikma
Hikma Pharmaceuticals PLC is a fast growing multinational group
focused on developing, manufacturing and marketing a broad range of
both branded and non-branded generic and in-licensed products.
Hikma operates through three businesses: "Injectables", "Branded"
and "Generics", based principally in the United States, the Middle
East and North Africa (MENA) and Europe. In 2015, Hikma achieved
revenues of $1,440 million and profit attributable to shareholders
of $252 million.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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