TIDMHIK
RNS Number : 6734S
Hikma Pharmaceuticals Plc
13 March 2019
London, 13 March 2019 - Hikma Pharmaceuticals PLC (Hikma, Group)
(LSE: HIK) (NASDAQ Dubai: HIK) (OTC: HKMPY) (LEI:
549300BNS685UXH4JI75) (rated Ba1 Moody's / BB+ S&P, both
stable), the multinational pharmaceutical company, today reports
its preliminary audited results for the year ended 31 December
2018.
2018 core(1) results summary
-- Group core revenue of $2,076 million, up 7%
-- Group core operating profit of $460 million, up 19%
-- Core basic earnings per share of 137.8 cents, up 31%
-- Cashflow from operating activities of $430 million
-- Net debt reduced to $361 million and low leverage ratios maintained
2018 reported results summary
-- Group revenue of $2,070 million, up 7%
-- Group operating profit of $371 million
-- Basic earnings per share of 117.0 cents
-- Proposed full year dividend of 38 cents per share, up from 34 cents per share
Strategic highlights
-- Appointed new Chief Executive Officer and strengthened leadership teams across the Group
-- Leveraged our high-quality injectables manufacturing
facilities and broad product portfolio to deliver critical
medicines to our hospital customers
-- Strengthened our Generics business, by enhancing commercial
capabilities and streamlining operations
-- Reinforced our position as 'partner of choice' in MENA, adding important in-licensed products
-- Restructured our global R&D function to improve
productivity and increase returns on investment
-- Launched 122 new products across all markets, expanding our global product portfolio
-- Strengthened our pipeline through a long-term agreement with
Vectura to develop and commercialise generic versions of GSK's
Ellipta(R) products
Siggi Olafsson, Chief Executive Officer of Hikma, said:
"The Group has delivered a strong performance in 2018, with
revenue and profitability significantly ahead of our expectations
at the start of the year. We also made good strategic progress,
strengthening our management teams, growing our portfolio,
investing in our capabilities and adding new partners.
Our Injectables business continued to perform very well,
demonstrating the diversification of our portfolio, the flexibility
of our operations in responding to customer needs and our ability
to bring important products to market. The significant commercial
and operational improvements we have made enabled our Generics
business to deliver strong growth and our Branded business
continued to grow steadily.
These results show considerable progress and I am confident that
we can build on this momentum going forward."
Said Darwazah, Executive Chairman of Hikma, said
"In 2018, we have made transformational changes across our
businesses that will enable us to be more competitive and achieve
our strategic goals. I am very pleased with the progress we've made
and the strong financial performance this year. Looking ahead to
2019 and beyond, I am very optimistic for the future of Hikma. I
believe we have set ourselves the right strategic objectives and
have a strong leadership team in place to deliver sustainable
growth over the long term."
Core results Constant
2018 2017 currency(2)
$ million $ million Change change
Core revenue 2,076 1,936 7% 8%
------------ ----------- ------- -------------
Core operating profit 460 386 19% 24%
------------ ----------- ------- -------------
Core EBITDA(3) 549 468 17% 21%
------------ ----------- ------- -------------
Core profit attributable to
shareholders 332 252 32% 39%
------------ ----------- ------- -------------
Core basic earnings per share
(cents) 137.8 105.0 31% 38%
------------ ----------- ------- -------------
Reported results Constant
2018 2017 currency
$ million $ million Change change
Revenue 2,070 1,936 7% 8%
------------ ----------- ------- ----------
Operating profit/(loss) 371 (747) N/A N/A
------------ ----------- ------- ----------
EBITDA 492 488 1% 5%
------------ ----------- ------- ----------
Profit/(loss) attributable
to shareholders 282 (843) N/A N/A
------------ ----------- ------- ----------
Basic earnings/(loss) per share
(cents) 117.0 (351.3) N/A N/A
------------ ----------- ------- ----------
Enquiries
Hikma Pharmaceuticals PLC
Susan Ringdal
EVP, Strategic Planning and Global +44 (0)20 7399 2760/ +44 7776
Affairs 477050
Lucinda Baker +44 (0)20 7399 2765/ +44 7818
Deputy Director of Investor Relations 060211
Virginia Spring +44 (0)20 3892 4389/ +44 7973
Senior Investor Relations Manager 679502
FTI Consulting
Ben Atwell/Andrew Ward +44 (0)20 3727 1000
Hikma helps put better health within reach every day for
millions of people in more than 50 countries around the world. For
more than 40 years, we've been creating high-quality medicines and
making them accessible to the people who need them. Headquartered
in the UK, we are a global company with a local presence across the
United States (US), the Middle East and North Africa (MENA) and
Europe, and we use our unique insight and expertise to transform
cutting-edge science into innovative solutions that transform
people's lives. We're committed to our customers, and the people
they care for, and by thinking creatively and acting practically,
we provide them with a broad range of branded and non-branded
generic medicines. Together, our 8,400 colleagues are helping to
shape a healthier world that enriches all our communities. We are a
leading licensing partner in the MENA region, and through our
venture capital arm, are helping bring innovative health
technologies to people around the world. For more information,
please visit www.hikma.com.
A presentation for analysts and investors will be held today at
09:30 UK time at FTI Consulting, 200 Aldersgate, Aldersgate Street,
London EC1A 4HD. To join via conference call please dial: +44 (0)
20 3936 2999 (UK toll free) or +1 845 709 8568 (US toll free),
password: 078263. Alternatively, the results presentation and a
webcast recording of the event will be available on Hikma's website
at http://webcast.openbriefing.com/hikmaPR2018/. The contents of
the website do not form part of this preliminary results
announcement.
Business and financial review
The business and financial review set out below summarises the
performance of the Hikma Group and our three main business
segments, Injectables, Generics and Branded, for the year ended 31
December 2018.
Group
Constant
2018 2017 currency
$ million $ million Change change
Revenue 2,070 1,936 7% 8%
------------ ----------- ------- ----------
Core revenue 2,076 1,936 7% 8%
------------ ----------- ------- ----------
Gross profit 1,050 967 9% 10%
------------ ----------- ------- ----------
Gross margin 50.7% 49.9% 0.8pp 1.1pp
------------ ----------- ------- ----------
Core gross profit 1,072 973 10% 12%
------------ ----------- ------- ----------
Core gross margin 51.6% 50.3% 1.3pp 1.7pp
------------ ----------- ------- ----------
Operating profit/(loss) 371 (747) N/A N/A
------------ ----------- ------- ----------
Core operating profit 460 386 19% 24%
------------ ----------- ------- ----------
Core operating margin 22.2% 19.9% 2.3pp 2.9pp
------------ ----------- ------- ----------
Profit/(loss) attributable
to shareholders 282 (843) N/A N/A
------------ ----------- ------- ----------
Core profit attributable to
shareholders 332 252 32% 39%
------------ ----------- ------- ----------
Basic earnings/(loss) per share
(cents) 117.0 (351.3) N/A N/A
------------ ----------- ------- ----------
Core basic earnings per share
(cents) 137.8 105.0 31% 38%
------------ ----------- ------- ----------
Group revenue grew 7% to $2,070 million in 2018 and Group core
revenue grew 7% to $2,076 million (2017: $1,936 million),
reflecting good demand for our in-market products and new product
launches. Group gross profit was $1,050 million (2017: $967
million). As previously announced, we consolidated our Generics
manufacturing facilities and our US distribution facilities and we
restructured our Columbus facility. Excluding the related costs,
Group core gross profit grew 10% to $1,072 million (2017: $973
million), primarily due to a strong improvement in the
profitability of our Generics business. Group gross margin was
50.7% (2017: 49.9%) and core gross margin was 51.6% (2017:
50.3%).
Group operating expenses were $679 million, compared to $1,714
million in 2017. Group operating expenses in 2017 included
exceptional items of $1,084 million that arose as a result of an
impairment of the Columbus intangible assets and property, plant
and equipment. Excluding the amortisation of intangible assets
other than software and exceptional items, Group core operating
expenses were $612 million (2017: $587 million). The paragraphs
below address the Group's main operating expenses in turn.
Sales and marketing (S&M) expenses were $224 million (2017:
$236 million). Excluding the amortisation of intangible assets
other than software and exceptional items, core S&M expenses
were $191 million (2017: $188 million), up 2%. This slight increase
reflects enhanced commercial activities in the US and MENA and
investments to strengthen our sales and marketing capabilities.
General and administrative (G&A) expenses were $246 million
(2017: $239 million), up 3%, due to the cost of strengthening our
corporate functions and higher employee benefits. Net impairment
reversals on financial assets were $11 million, which related to
the release of doubtful debt provisions following collection during
the year.
R&D expenses were $147 million (2017: $121 million).
Excluding exceptional items,(4) core R&D expenses were $118
million (2017: $115 million). This reflected increased investment
in our Branded and Injectables R&D programmes, which was
partially offset by a reduction in R&D expenditure for our
Generics business following a detailed review of our R&D
pipeline in 2017. Core R&D was 6% of Group core revenue, in
line with 2017.
Other net operating expenses were $73 million (2017: $1,118
million). Excluding exceptional items, core other net operating
expenses increased to $68 million (2017: $46 million), primarily
reflecting a foreign exchange loss in 2018 compared to a gain in
2017.
The Group reported operating profit of $371 million (2017:
$(747) million). Excluding the impact of amortisation other than
software and exceptional items, Group core operating profit
increased by 19% to $460 million (2017: $386 million) and core
operating margin was 22.2% (2017:19.9%).
Group core revenue by business segment
$ million 2018 2017
Injectables 832 40% 776 40%
------ ---- ------ ----
Generics 692 33% 615 32%
------ ---- ------ ----
Branded 542 26% 536 28%
------ ---- ------ ----
Others 10 1% 9 -
------ ---- ------ ----
Total 2,076 1,936
------ ---- ------ ----
Group core revenue by region
$ million 2018 2017
MENA 656 32% 630 33%
------ ---- ------ ----
US 1,299 62% 1,201 62%
------ ---- ------ ----
Europe and ROW 121 6% 105 5%
------ ---- ------ ----
Total 2,076 1,936
------ ---- ------ ----
Injectables
$ million Constant
currency
2018 2017 Change change
Revenue 826 776 6% 6%
------ ------ -------- ----------
Core revenue 832 776 7% 7%
------ ------ -------- ----------
Gross profit 497 480 4% 4%
------ ------ -------- ----------
Core gross profit 503 480 5% 5%
------ ------ -------- ----------
Core gross margin 60.5% 61.9% (1.4)pp (1.2)pp
------ ------ -------- ----------
Operating profit 305 293 4% 5%
------ ------ -------- ----------
Core operating profit 335 315 6% 8%
------ ------ -------- ----------
Core operating margin 40.3% 40.6% (0.3)pp 0.2pp
------ ------ -------- ----------
In 2018, our global Injectables business performed well, with
core revenue up 7% to $832 million (2017: $776 million). In
constant currency, global Injectables core revenue was also up
7%.
US Injectables core revenue was $607 million, up 4% (2017: $586
million). While competition on certain products increased
significantly, strong demand from our hospital customers for our
large and diversified portfolio, recent product launches and our
flexibility in responding to market shortages enabled our US
business to deliver growth.
MENA Injectables revenue was $120 million, up 17% (2017: $103
million). In constant currency, MENA Injectables revenue increased
by 21%, reflecting a strong performance in Saudi Arabia and a
significant increase in sales of Remsima(R) , our infliximab
biosimilar product licensed from Celltrion.
European Injectables revenue was $105 million, up 21% (2017: $87
million). In constant currency, European Injectables revenue
increased by 15%, reflecting the contribution from recently
launched products and expanded capacity for our lyophilised
products.
Injectables core gross profit increased to $503 million (2017:
$480 million) and core gross margin remained relatively stable at
60.5% (2017: 61.9%), reflecting a favourable product mix. Core
operating profit, which excludes the amortisation of intangible
assets other than software and exceptional items,(5) was $335
million (2017: $315 million). Core operating margin remained
extremely strong at 40.3% (2017: 40.6%). This reflects the strong
gross margin, which more than offset increased investment in
R&D.
During the year, the Injectables business launched 15 products
in the US, 17 in MENA and 20 in Europe. We submitted 130 filings to
regulatory authorities across all markets and signed a number of
licensing agreements to add more complex products to our pipeline.
In the US, this included licensing agreements with Hansoh
Pharmaceutical Group Co., Ltd. (Hansoh), for a portfolio of
injectable oncology medicines, and Beijing Sciecure Pharmaceutical
Co., Ltd (Sciecure) for one of their niche injectable anti-viral
medicines. In MENA, we signed a licensing agreement with
Laboratorios Farmaceúticos Rovi SA (Rovi) for their enoxaparin.
In 2019, we expect global Injectables revenue to be in the range
of $850 million to $900 million. We expect revenue growth from new
product launches and good demand for our in-market portfolio to
more than offset continued price erosion and an easing in demand
for products on shortage. We expect core operating margin to be in
the range of 35% to 38%.
Generics
$ million 2018 2017 Change
Revenue 692 615 13%
------ -------- -------
Gross profit 279 219 27%
------ -------- -------
Core gross profit 295 225 31%
------ -------- -------
Core gross margin 42.6% 36.6% 6.0pp
------ -------- -------
Operating profit/(loss) 40 (1,082) N/A
------ -------- -------
Core operating profit 93 22 323%
------ -------- -------
Core operating margin 13.4% 3.6% 9.8pp
------ -------- -------
In 2018, our Generics business performed extremely well,
exceeding the expectations we set at the beginning of the year.
Revenue grew 13% to $692 million (2017: $615 million). While the US
retail generics market remains competitive, we benefitted from our
enhanced commercial capabilities and strengthened business
operations. Good growth from our more differentiated product
portfolio and new product launches more than offset the impact of
continued price erosion.
Generics gross profit was $279 million (2017: $219 million). As
previously announced, we consolidated our manufacturing and
distribution facilities during the year and restructured our
Columbus facility. Excluding related costs, core gross profit was
$295 million (2017: $225 million). Gross margin was 40.3% (2017:
35.6%), and core gross margin increased to 42.6% (2017: 36.6%),
reflecting an improvement in the product mix, operating leverage
and a significant reduction in overheads, partly due to closure of
our Eatontown plant.
Generics core operating profit, which excludes the amortisation
of intangible assets other than software and exceptional items,(6)
increased to $93 million (2017: $22 million). This primarily
reflects the strong improvement in gross profit. Core operating
margin was 13.4% (2017: 3.6%). On a reported basis, Generics
operating profit was $40 million compared to an operating loss of
$1,082 million in 2017 that arose as a result of an impairment of
the intangible assets and property, plant and equipment of the
Columbus business.
During the year, the Generics business launched 13 products,
including a first-to-file Paragraph IV product with market
exclusivity. We continued to invest in pipeline development,
submitting eight filings to regulatory authorities, as well as
adding products through licensing and partnership agreements. In
particular, we expanded our partnership with Vectura with an
agreement to develop and commercialise their Open, Inhale, Close
(OIC) dry powder inhaler (DPI) platform, including generic versions
of GSK's five Ellipta(R) DPI products. The generic respiratory
market is a key area of focus for us and this agreement leverages
the investment we have made and the experience we are gaining
through our generic Advair Diskus(R) development programme.
As previously announced, we initiated a repeat clinical study
for generic Advair Diskus(R) during the year. The study is
progressing well and we expect to submit a response to the FDA with
new clinical data in 2019.
We expect Generics revenue to be in the range of $650 million to
$700 million in 2019. This reflects continued price erosion on our
marketed portfolio, which we expect to be partially offset with
market share gains and new product launches. We expect our focus on
cost reduction and operational efficiencies to enable us to achieve
a core operating margin in the mid-teens.
Branded
$ million Constant
currency
2018 2017 Change change
Revenue 542 536 1% 5%
------ ------ ------- ----------
Gross profit 271 265 2% 7%
------ ------ ------- ----------
Gross margin 50.0% 49.4% 0.6pp 1.3pp
------ ------ ------- ----------
Operating profit 111 107 4% 17%
------ ------ ------- ----------
Core operating profit 117 114 3% 15%
------ ------ ------- ----------
Core operating margin 21.6% 21.3% 0.3pp 2.1pp
------ ------ ------- ----------
On a reported basis, Branded revenue was $542 million, up 1%
(2017: $536 million). On a constant currency basis before adverse
movements against the US dollar, primarily in the Sudanese pound
and the Algerian dinar, Branded revenue grew 5% to $560
million.
Egypt delivered double-digit revenue growth, reflecting strong
underlying market growth, an improvement in our product mix and new
product launches. This strong performance in Egypt more than offset
lower revenue in Saudi Arabia and Algeria. Revenue in Saudi Arabia
decreased slightly, reflecting the timing of sales. A strong
pipeline of new launches is expected to drive a return to growth in
2019. In Algeria, planned upgrades at our general formulation plant
impacted revenue growth in the first half of the year. We expect a
stronger performance in 2019 now that the plant is back on line and
manufacturing has commenced at our recently-acquired cephalosporin
facility. Our businesses in Iraq, Jordan, Libya and Sudan delivered
strong growth in constant currency during the year.
Revenue from in-licensed products represented 36% of Branded
revenue (2017: 37%). During the year, we strengthened and expanded
our partnerships, adding new in-licensed products to our portfolio.
We signed a partnership agreement with Omega Pharma Trading NV, an
affiliate of Perrigo Company PLC (Perrigo), for the exclusive right
to license and distribute more than 30 consumer healthcare products
across MENA, with the exception of current agreements in place. We
also have the right of first refusal to the full range of Perrigo's
OTC medicines in the region.
During the year, the Branded business launched 57 products and
submitted 68 filings to regulatory authorities.
Branded gross profit was $271 million, up 2% (2017: $265
million) and gross margin was 50.0% (2017: 49.4%). In constant
currency, gross profit increased by 7% and gross margin increased
to 50.7% (2017: 49.4%), reflecting the receipt of an allowance from
a supplier to compensate for changing market dynamics.
Core operating profit, which excludes the amortisation of
intangibles, was $117 million, up 3% (2017: $114 million), and core
operating margin was 21.6%. In constant currency, core operating
profit grew 15% and core operating margin increased to 23.4%, up
210 basis points. This primarily reflects the improvement in the
gross margin and the release of doubtful debt provisions following
collection during the year.
We expect Branded revenue to grow in the mid-single digits in
constant currency in 2019.
Other businesses
Other businesses, which is primarily comprised of Arab Medical
Containers, a manufacturer of plastic specialised medicinal sterile
containers, International Pharmaceuticals Research Centre, which
conducts bio-equivalency studies, Hikma Emerging Markets and Asia
Pacific FZ LLC, and the chemicals division of Hikma Pharmaceuticals
LLC (Jordan) contributed revenue of $10 million in 2018 (2017: $9
million) and an operating loss of $5 million (2017: $(4)
million).
Research and development
Our investment in R&D and business development is enabling
us to continue expanding the Group's product portfolio. During
2018, we had 122 new launches and received 136 approvals.
2018 submissions(7) 2018 approvals(8) 2018 launches(9)
Injectables
-------------------- ------------------ -----------------
US 20 14 15
-------------------- ------------------ -----------------
MENA 76 34 17
-------------------- ------------------ -----------------
Europe 34 33 20
-------------------- ------------------ -----------------
Generics 8 9 13
-------------------- ------------------ -----------------
Branded 68 46 57
-------------------- ------------------ -----------------
TOTAL 206 136 122
-------------------- ------------------ -----------------
To ensure the continuous development of our product pipeline, we
submitted 206 regulatory filings.
Net finance expense
Core net finance expense decreased 12% to $51 million (2017: $58
million), due to lower debt in the year. After recognising a
non-cash expense of $26 million, which primarily resulted from the
remeasurement of the contingent consideration related to the
Columbus business, net finance expense was $77 million. We expect
Group core net finance expense to be around $50 million in
2019.
Profit before tax
The Group reported profit before tax of $293 million (2017:
$(738) million). Core profit before tax was $408 million (2017:
$328 million).
Tax
The Group incurred a tax expense of $8 million (2017: $101
million). The reported effective tax rate was 2.7% (2017: (13.7)%),
primarily due to the recognition of previously unrecognised
deferred tax assets and favourable prior year tax rulings in the
US.
Excluding exceptional items, Group core tax expense was $73
million (2017: $72 million). The core effective tax rate decreased
to 17.9% (2017: 22.0%), primarily due to a reduction in the
effective tax rate in the US and smaller uncertain tax positions in
2018. We expect the Group core effective tax rate to be around 21%
in 2019.
Profit attributable to shareholders
Profit attributable to shareholders was $282 million, compared
with a loss of $843 million in 2017. Core profit attributable to
shareholders increased by 32% to $332 million, compared with $252
million in 2017.
Earnings per share
Core basic earnings per share increased by 31% to 137.8 cents
(2017: 105.0 cents) and core diluted earnings per share increased
by 31% to 137.2 cents (2017: 104.6 cents). Basic earnings per share
was 117.0 cents (2017: (351.3) cents). The basic loss per share in
2017 arose as a result of an impairment of the intangible assets
and property, plant and equipment of the Columbus business.
Dividend
The Board is recommending a final dividend of 26 cents per share
(approximately 20 pence per share) (2017: 23 cents per share)
bringing the total dividend for the full year to 38 cents per share
(approximately 29 pence per share) (2017: 34 cents per share,
approximately 24 pence per share). The proposed dividend will be
paid on 22 May 2019 to eligible shareholders on the register at the
close of business on 5 April 2019, subject to approval at the
Annual General Meeting on 17 May 2019.
Net cash flow, working capital and net debt
The Group generated strong operating cash flow of $430 million
(2017: $443 million). Group working capital days were down 15 days
to 210 days, primarily driven by improved cash collections and
improved supplier payment terms across the Group in 2018.
Capital expenditure was $107 million (2017: $107 million). Of
this, around $45 million was spent in the US to expand the
manufacturing capacity and capabilities of our Generics and
Injectables businesses. In MENA, around $44 million was spent on
strengthening our manufacturing capabilities in Algeria and
upgrading our facilities in Jordan, Algeria and Egypt to
manufacture new in-licensed products. In Europe, we spent
approximately $18 million, primarily on the expansion of our
manufacturing facilities in Portugal. We expect Group capital
expenditure to be in the range of $120 million to $140 million in
2019.
The Group's net debt (excluding co-development agreements and
contingent liabilities) was $361 million at 31 December 2018 (31
December 2017: $546 million).(10) The significant decrease was due
to the paydown of debt during the year. We continue to have a very
strong balance sheet with a net debt to core EBITDA ratio of
0.66x.
In January 2019, a litigation matter with an external party was
concluded in Hikma's favour and Hikma received compensation of $32
million.
Balance sheet
Net assets at 31 December 2018 were $1,697 million (31 December
2017: $1,528 million). Net current assets were $775 million (31
December 2017: $777 million).
Outlook
The Group delivered a strong financial performance in 2018 and
we made good strategic progress.
Going forward, we expect global Injectables revenue to be in the
range of $850 million to $900 million in 2019. We expect revenue
growth from new product launches and good demand for our in-market
portfolio to more than offset continued price erosion and an easing
in demand for products on shortage. We expect core operating margin
to be in the range of 35% to 38% in 2019.
We expect Generics revenue to be in the range of $650 million to
$700 million in 2019. This reflects continued price erosion on our
marketed portfolio, which we expect to partially offset with market
share gains and new product launches. We expect our focus on cost
reduction and operational efficiencies to enable us to achieve a
core operating margin in the mid-teens.
We expect Branded revenue to grow in the mid-single digits in
constant currency in 2019.
We expect Group net finance expense to be around $50 million in
2019 and the core effective tax rate to be around 21%. We expect
Group capital expenditure to be in the range of $120 million to
$140 million.
Looking beyond 2019, we expect to benefit from our continued
investment in R&D across our businesses and we will look to
fill pipeline gaps through business development.
Responsibility statement
The responsibility statement below has been prepared for the
year ended 31 December 2018. Certain parts thereof are not included
within this announcement.
We confirm to the best of our knowledge:
-- The financial statements, prepared in accordance with
International Financial Reporting Standards as adopted by the EU,
give a true and fair view of the assets, liabilities, financial
position and profit or loss of the company and the undertakings
included in the consolidation taken as a whole;
-- The business and financial review, which is incorporated into
the strategic report, includes a fair review of the development and
performance of the business and the position of the company and the
undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and
uncertainties that they face; and
-- Financial statements taken as a whole, are fair, balanced and
understandable and provide the information necessary for
shareholders to access the company's performance, business model
and strategy.
By order of the Board
Sigurdur Olafsson Khalid Nabilsi
Chief Executive Officer Chief Financial Officer
12 March 2019 12 March 2019
The Board
The Board of Directors that served during all or part of the
twelve-month period to 31 December 2018 and their respective
responsibilities can be found on the Leadership team section of
www.hikma.com.
Cautionary statement
This preliminary announcement has been prepared solely to
provide additional information to the shareholders of Hikma and
should not be relied on by any other party or for any other
purpose.
Definitions
We use a number of non-IFRS measures to report and monitor the
performance of our business. Management uses these adjusted numbers
internally to measure our progress and for setting performance
targets. We also present these numbers, alongside our reported
results, to external audiences to help them understand the
underlying performance of our business. Our core numbers may be
calculated differently to other companies.
Adjusted measures are not substitutable for IFRS results and
should not be considered superior to results presented in
accordance with IFRS.
Core results
Reported results represent the Group's overall performance.
However, these results can include one-off or non-cash items that
mask the underlying performance of the Group. To provide a more
complete picture of the Group's performance to external audiences,
we provide, alongside our reported results, core results, which are
a non-IFRS measure. Our core results exclude the exceptional items
and other adjustments set out in note 5.
Constant currency
As the majority of our business is conducted in the US, we
present our results in US dollars. For both our Branded and
Injectable businesses, a proportion of their sales are denominated
in a currency other than the US dollar. In order to illustrate the
underlying performance of these businesses, we include information
on our results in constant currency.
Constant currency numbers in 2018 represent reported 2018
numbers re-stated using average exchange rates in 2017, excluding
price increases in the business which resulted from the devaluation
of currencies.
EBITDA
EBITDA is earnings before interest, tax, depreciation,
amortisation and impairment charges.
EBITDA
$ million 2018 2017
Reported operating profit 371 (747)
----- ------
Depreciation, amortisation and
impairment 121 1,235
----- ------
Reported EBITDA 492 488
----- ------
Research and development costs 29 -
----- ------
Contingent consideration gains - (29)
----- ------
Acquisition, integration and other
costs 28 9
----- ------
Core EBITDA 549 468
----- ------
Working capital days
We believe Group working capital days provides a useful measure
of the Group's working capital management and liquidity. Group
working capital days are calculated as Group receivable days plus
Group inventory days, less Group payable days. Group receivable
days are calculated as Group trade receivables x 365, divided by
trailing 12 months Group revenue.
Group net debt
We believe Group net debt is a useful measure of the strength of
the Group's financing position. Group net debt is calculated as
Group total debt less Group total cash. Group total debt excludes
co-development agreements and contingent liabilities.
Group net debt
$ million Dec-18 Dec-17
Bank overdrafts and loans(11) (75) (87)
------- -------
Long-term financial debts (539) (670)
------- -------
Obligations under finance leases (23) (20)
------- -------
Total debt (637) (777)
------- -------
Cash and cash equivalents 276 231
------- -------
Net debt (361) (546)
------- -------
Forward looking statements
This announcement contains certain statements which are, or may
be deemed to be, "forward looking statements" which are prospective
in nature with respect to Hikma's expectations and plans, strategy,
management objectives, future developments and performance, costs,
revenues and other trend information. All statements other than
statements of historical fact may be forward-looking statements.
Often, but not always, forward-looking statements can be identified
by the use of forward looking words such as "intends", "believes",
"anticipates", "expects", "estimates", "forecasts", "targets",
"aims", "budget", "scheduled" or words or terms of similar
substance or the negative thereof, as well as variations of such
words and phrases or statements that certain actions, events or
results "may", "could", "should", "would", "might" or "will" be
taken, occur or be achieved.
By their nature, forward looking statements are based on current
expectations and projections about future events and are therefore
subject to assumptions, risks and uncertainties that are beyond
Hikma's ability to control or estimate precisely and which could
cause actual results or events to differ materially from those
expressed or implied by the forward looking statements. Where
included, such statements have been made by or on behalf of Hikma
in good faith based upon the knowledge and information available to
the Directors on the date of this announcement. Accordingly, no
assurance can be given that any particular expectation will be met
and Hikma's shareholders are cautioned not to place undue reliance
on the forward-looking statements. Forward looking statements
contained in this announcement regarding past trends or activities
should not be taken as a representation that such trends or
activities will continue in the future.
Other than in accordance with its legal or regulatory
obligations (including under the Market Abuse Regulation ((EU) No.
596/2014) and the UK Listing Rules and the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority), Hikma does
not undertake to update the forward looking statements contained in
this announcement to reflect any changes in events, conditions or
circumstances on which any such statement is based or to correct
any inaccuracies which may become apparent in such forward looking
statements. Except as expressly provided in this announcement, no
forward looking or other statements have been reviewed by the
auditors of Hikma. All subsequent oral or written forward looking
statements attributable to Hikma or any of its members, directors,
officers or employees or any person acting on their behalf are
expressly qualified in their entirety by the cautionary statement
above. Past share performance cannot be relied on as a guide to
future performance. Nothing in this announcement should be
construed as a profit forecast.
Neither the content of Hikma's website nor any other website
accessible by hyperlinks from Hikma's website are incorporated in,
or form part of, this announcement.
Principal risks and uncertainties
The Group faces risks from a range of sources that could have a
material impact on our financial commitments and ability to trade
in the future. The principal risks are determined via robust
assessment considering our risk context by the Board of Directors
with input from executive management. The principal risks facing
the company have not materially changed over the year and they are
set out in the 2018 annual report on pages 60-62. The Board
recognises that certain risk factors that influence the principal
risks are outside of the control of management. The Board is
satisfied that these risks are being managed appropriately and
consistently with the target risk appetite. The set of principal
risks should not be considered as an exhaustive list of all the
risks the Group faces.
(1) Core results throughout the document are presented to show
the underlying performance of the Group, excluding the exceptional
items and other adjustments set out in note 5.
(2) Constant currency numbers in 2018 throughout the document
represent 2018 numbers re-stated using average exchange rates in
2017, excluding price increases in the business which resulted from
the devaluation of currencies
(3) EBITDA is earnings before interest, tax, depreciation,
amortisation and impairment charges. EBITDA is a non-IFRS measure,
see page 13 for a reconciliation to reported IFRS results
(4) In 2018, Hikma incurred $29 million of R&D costs related
to a repeat clinical endpoint study for generic Advair Diskus(R) .
In 2017, Hikma recognised a $29 million contingent consideration
gain from Boehringer Ingelheim as compensation for failure to
receive FDA approval of generic Advair Diskus(R) before 24 December
2017. To obtain approval, the FDA requires the completion of an
additional clinical endpoint study. Both the contingent
consideration and the repeat clinical study have been treated as
exceptional items. See note 5 for further information
(5) Exceptional items include the costs related to the
consolidation of our distribution facilities in the US. Refer to
note 5 for further information
(6) Exceptional items include the expenses related to a repeat
clinical endpoint study for generic Advair Diskus(R) , the
restructuring of our Columbus facility and the closure of our
Eatontown manufacturing plant. Refer to note 5 for further
information
(7) Submissions for new products includes Marketing
Authorisations, NDAs, ANDAs, supplements, line extensions, and
re-introduction of legacy products by country, submitted in
2018
(8) New product approvals includes technical approvals and
tentative approvals, line extensions, and the re-introduction of
legacy products by country, approved in 2018
(9) New product launches includes line extensions and the
re-introduction of legacy products by country, launched in 2018
(10) Group net debt is calculated as Group total debt less Group
total cash. Group net debt is a non-IFRS measure, see page 13 for a
reconciliation of Group net debt to reported IFRS results
(11) Includes obligations under finance leases
Hikma Pharmaceuticals PLC
Consolidated income statement
2018 2017
Exceptional Exceptional
items items
and other and other
2018 adjustments 2018 2017 adjustments 2017
Core (note Reported Core (note Reported
results 5) results results 5) results
Note $m $m $m $m $m $m
Revenue 3 2,076 (6) 2,070 1,936 - 1,936
Cost of sales (1,004) (16) (1,020) (963) (6) (969)
--------- ------------- ----------- --------- ------------- ----------
Gross profit 1,072 (22) 1,050 973 (6) 967
--------- ------------- ----------- --------- ------------- ----------
Sales and marketing
expenses (191) (33) (224) (188) (48) (236)
General and administrative
expenses (246) - (246) (238) (1) (239)
Net impairment
reversals on financial
assets 11 - 11 - - -
Research and development
expenses (118) (29) (147) (115) (6) (121)
Other operating
expenses (net) (68) (5) (73) (46) (1,072) (1,118)
--------- ------------- ----------- --------- ------------- ----------
Total operating
expenses (612) (67) (679) (587) (1,127) (1,714)
--------- ------------- ----------- --------- ------------- ----------
Operating profit/(loss) 4 460 (89) 371 386 (1,133) (747)
Finance income 3 - 3 2 93 95
Finance expense (54) (26) (80) (60) (26) (86)
Loss from investment
at fair value (1) - (1) - - -
Profit/(loss) before
tax 408 (115) 293 328 (1,066) (738)
Tax 6 (73) 65 (8) (72) (29) (101)
--------- ------------- ----------- --------- ------------- ----------
Profit/(loss) for
the year 335 (50) 285 256 (1,095) (839)
--------- ------------- ----------- --------- ------------- ----------
Attributable to:
Non-controlling
interests 3 - 3 4 - 4
Equity holders
of the parent 332 (50) 282 252 (1,095) (843)
--------- ------------- ----------- --------- ------------- ----------
335 (50) 285 256 (1,095) (839)
--------- ------------- ----------- --------- ------------- ----------
Earnings/(loss)
per share (cents) 8
--------- ------------- ----------- --------- ------------- ----------
Basic 137.8 117.0 105.0 (351.3)
Diluted 137.2 116.5 104.6 (349.8)
--------- ------------- ----------- --------- ------------- ----------
Hikma Pharmaceuticals PLC
Consolidated statement of comprehensive income
2017
Exceptional
2018 items
Exceptional and other
2018 items and 2018 2017 adjustments 2017
Core other adjustments Reported Core (note Reported
results (note 5) results results 5) results
Note $m $m $m $m $m $m
--------- ------------------- ---------- --------- ------------- ----------
Profit/(loss) for the
year 335 (50) 285 256 (1,095) (839)
Other comprehensive
income/(loss)
Items that may be
reclassified
subsequently to the
consolidated income
statement,
net of tax:
Currency translation
(loss)/gain (29) - (29) 20 - 20
Items that will not
be reclassified
subsequently to the
consolidated income
statement,
net of tax:
Change in fair value
of
available-for-sale
financial
assets(1) 13 - - - 2 - 2
Change in the fair value
of equity
investments (2) 7 - 7 - - -
Total comprehensive
income/(loss) for the
year 313 (50) 263 278 (1,095) (817)
Attributable to:
Non-controlling interests 1 - 1 3 - 3
Equity holders of the
parent 312 (50) 262 275 (1,095) (820)
--------- ------------------- ---------- --------- ------------- ----------
313 (50) 263 278 (1,095) (817)
--------- ------------------- ---------- --------- ------------- ----------
1. This investment was previously designated as
available-for-sale financial assets, upon transition to IFRS 9 it
has been re-categorised as Investments measured at fair value
through profit or loss (FVTPL).
2. This investment was previously classified as
available-for-sale and stated at cost (under IAS 39 cost
exemption), upon transition to IFRS 9 it has been re-categorised as
Investments measured at fair value through other comprehensive
income (FVTOCI).
Hikma Pharmaceuticals PLC
Consolidated balance sheet
2018 2017
Note $m $m
Non-current assets
Goodwill 9 279 282
Other Intangible assets 9 487 503
Property, plant and equipment 10 870 828
Investment in associates and joint ventures 11 6
Deferred tax assets 125 135
Financial and other non-current assets 57 60
------- -------
1,829 1,814
------- -------
Current assets
Inventories 11 528 488
Income tax receivable 74 53
Trade and other receivables 12 731 707
Collateralised and restricted cash - 4
Cash and cash equivalents 276 227
Other current assets 13 59 95
------- -------
1,668 1,574
------- -------
Total assets 3,497 3,388
======= =======
Current liabilities
Bank overdrafts and loans 16 74 86
Trade and other payables 14 465 365
Income tax provision 68 82
Other provisions 23 26
Other current liabilities 15 263 238
------- -------
893 797
------- -------
Net current assets 775 777
------- -------
Non-current liabilities
Long-term financial debts 17 539 670
Obligations under finance leases 23 20
Deferred tax liabilities 16 49
Other non-current liabilities 18 329 324
------- -------
907 1,063
------- -------
Total liabilities 1,800 1,860
======= =======
Net assets 1,697 1,528
======= =======
Equity
Share capital 40 40
Share premium 282 282
Other reserves (217) (190)
Retained earnings 1,580 1,382
------- -------
Equity attributable to equity holders of the parent 1,685 1,514
Non-controlling interests 12 14
------- -------
Total equity 1,697 1,528
------- -------
Hikma Pharmaceuticals PLC
Consolidated statement of changes in equity
Equity
attributable
Merger to equity
and Total shareholders
revaluation Translation Own other Retained Share Share of the Non-controlling Total
reserves reserve shares reserves earnings capital premium parent interests equity
$m $m $m $m $m $m $m $m $m $m
------------ ------------ ------- --------- --------- -------- -------- ------------- ---------------- -------
Balance at
1 January
2017 1,077 (248) (1) 828 1,246 40 282 2,396 15 2,411
Loss for the
year(1) (1,039) - - (1,039) 196 - - (843) 4 (839)
Change in fair
value of
available-for-sale
financial
assets (2)
(note 13) - - - - 1 - - 1 - 1
Currency
translation
gain/(loss) - 21 - 21 - - - 21 (1) 20
------------ ------------ ------- --------- --------- -------- -------- ------------- ---------------- -------
Total comprehensive
(loss)/income
for the
year (1,039) 21 - (1,018) 197 - - (821) 3 (818)
Cost of
equity-settled
employee share
scheme - - - - 22 - - 22 - 22
Dividends on
ordinary
Shares (note
7) - - - - (79) - - (79) (2) (81)
Adjustment
arising from
change in
non-controlling
interests - - - - (4) - - (4) (2) (6)
------------ ------------ ------- --------- --------- -------- -------- ------------- ---------------- -------
Total transactions
with
owners, recognised
directly in
equity
Balance at
31 December
2017 and 1
January 2018
as previously
reported 38 (227) (1) (190) 1,382 40 282 1,514 14 1,528
------------ ------------ ------- --------- --------- -------- -------- ------------- ---------------- -------
Impact of IFRS
9(3) - - - - (3) - - (3) - (3)
Impact of IFRS
15(3) - - - - (25) - - (25) - (25)
------------ ------------ ------- --------- --------- -------- -------- ------------- ---------------- -------
Balance at
1 January
2018 as adjusted 38 (227) (1) (190) 1,354 40 282 1,486 14 1,500
------------ ------------ ------- --------- --------- -------- -------- ------------- ---------------- -------
Profit for
the year - - - - 282 - - 282 3 285
Change in the
fair value
of equity
investments
at
fair value
through other
comprehensive
income 4 - - - - 7 - - 7 - 7
Currency
translation
loss - (27) - (27) - - - (27) (2) (29)
------------ ------------ ------- --------- --------- -------- -------- ------------- ---------------- -------
Total comprehensive
income/(loss)
for the
year - (27) - (27) 289 - - 262 1 263
Total transactions
with
owners, recognised
directly in
equity
Cost of
equity-settled
employee share
scheme - - - - 21 - - 21 - 21
Dividends on
ordinary
Shares (note
7) - - - - (84) - - (84) (3) (87)
Balance at
31 December
2018 38 (254) (1) (217) 1,580 40 282 1,685 12 1,697
============ ============ ======= ========= ========= ======== ======== ============= ================ =======
1. In 2017 a loss of $1,039 million have been allocated from
retained earnings to the merger and revaluation reserves in
relation to the Columbus business impairment. (note 5, 9 and
10)
2.This investment was previously designated as
available-for-sale financial assets, upon transition to IFRS 9 it
has been re-categorised as FVTPL
3.The Group adopted IFRS 9 and IFRS 15 from 1 January 2018.
(note 1,3 and 15)
4.This investment was previously classified as
available-for-sale and stated at cost (under IAS 39 cost
exemption), upon transition to IFRS 9 it has been re-categorised as
Investments at FVTOCI
Hikma Pharmaceuticals PLC
Consolidated cash flow statement
2018 2017
Note $m $m
---------------------- -------
Cash flows from operating activities
Cash generated from operations 20 493 546
Income taxes paid (63) (103)
---------------------- -------
Net cash inflow from operating activities 430 443
Cash flow from investing activities
Purchases of property, plant and equipment (107) (107)
Proceeds from disposal of property, plant and equipment 13 4
Purchase of intangible assets (32) (44)
Cash (paid)/received from investment in joint ventures (4) 2
Investment in financial and other non-current assets, net 4 (2)
Investments at fair value through other comprehensive income (2017: available
for
sale investment) (4) (8)
Acquisition of business undertakings net of cash acquired 1 3
Contingent consideration adjustment 30 -
Finance income 3 1
====================== =======
Net cash outflow from investing activities (96) (151)
---------------------- -------
Cash flow from financing activities
Decrease in collateralised and restricted cash 3 3
Proceeds from issue of long-term financial debts(1) 93 349
Repayment of long-term financial debts(1) (224) (401)
Proceeds from short-term borrowings(2) 138 323
Repayment of short-term borrowings(2) (148) (349)
Dividends paid (84) (79)
Dividends paid to non-controlling shareholders of subsidiaries (3) (2)
Interest paid (51) (57)
Purchase of non-controlling interest in subsidiary - (6)
Payment from co-development and earnout payment agreement, net (2) (1)
====================== =======
Net cash outflow from financing activities (278) (220)
Net increase in cash and cash equivalents 56 72
---------------------- -------
Cash and cash equivalents at beginning of year 227 155
---------------------- -------
Foreign exchange translation movements (7) -
====================== =======
Cash and cash equivalents at end of year 276 227
====================== =======
1.These cash flows relate to long-term financial debts (note 17)
and the movements above reconcile to the movement per the note. In
the prior year, the movement reconciled to the note after including
a non-cash movement of $1 million in respect of unfavourable
translation differences.
2.These cash flows relate to bank overdraft and loans (note 16)
and the movements above reconcile to the movement per the note
after including a non-cash movement of $2 million (2017: $5
million) in respect of favourable translation differences.
Hikma Pharmaceuticals PLC
Notes to the consolidated financial statements
1. Accounting policies
General information
Hikma Pharmaceuticals PLC is a public limited liability company
incorporated and domiciled in England and Wales under the Companies
Act 2006.
The Group's principal activities are the development,
manufacture, and marketing of a broad range of branded and
non-branded generic pharmaceuticals products across the US, the
Middle East and North Africa (MENA) and Europe. Hikma is also a
leading licensing partner in MENA.
Basis of preparation
The Group consolidated financial statements are prepared in
accordance with:
i) EU endorsed International Financial Reporting Standards
(IFRS) and interpretations of the International Financial Reporting
Standards Interpretations Committee and those parts of the
Companies Act 2006 as applicable to companies using IFRS.
(ii) International Financial Reporting Standards as issued by
the International Accounting Standards Board (IASB).
The consolidated financial statements have been prepared under
the historical cost convention, except for the revaluation to fair
value of certain financial assets and liabilities.
The accounting policies included in this note have been applied
consistently other than where new policies have been adopted.
The Group's previously published consolidated financial
statements were also prepared in accordance with IFRSs issued by
the IASB and also in accordance with IFRSs adopted for use in the
European Union.
The presentation and functional currency of the Group is the US
dollar as the majority of the Group's business is conducted in US
dollars.
Adoption of new and revised standards
The following new and revised standards and interpretations have
been adopted in the current year. Several other amendments and
interpretations apply for the first time in 2018, but do not have
an impact on the consolidated financial statements of the Group,
but may impact the accounting for future transactions and
arrangements.
IFRS 9 Financial Instruments
--------------------- --------------------------------------
IFRS 15 Revenue from Contracts with Customers
--------------------- --------------------------------------
IFRS 15 (Amendments) Revenue from Contracts with Customers
--------------------- --------------------------------------
The following standards and interpretations have not been
applied in these consolidated financial statements because while in
issue, these are not yet effective:
IFRS 16 Leases
--------- ---------------------------------------
IFRIC 23 Uncertainty over income tax treatments
--------- ---------------------------------------
IFRS 15
IFRS 15 'Revenue from Contracts with Customers' is effective for
accounting periods beginning on or after 1 January 2018 and
replaces IAS 18 'revenue'. It provides enhanced detail on the
principle of recognising revenue to reflect the transfer of goods
and services to customers at a value which the Company expects to
be entitled to receive. The standard also updates revenue
disclosure requirements.
The key revenue recognition policy impacted under IFRS 15 is the
accounting of free goods. Previously, free goods were recorded only
at cost, within cost of sales and no transaction price was
allocated to the free goods revenue. Under IFRS 15 an option to
acquire additional goods or services gives rise to a separate
performance obligation, if the option provides a material right to
the customer that customer would not receive without entering into
that contract. The standard requires management to estimate the
transaction price to be allocated to the separate performance
obligations, to defer revenue and to recognise a contract liability
for the performance obligations that will be satisfied in the
future. The Group recognises revenue for the option when those
future goods or services are transferred to the customer.
The Group has adopted IFRS 15 applying modified retrospective
approach on 1 January 2018 with a cumulative adjustment as an
increase to other current liabilities of $27 million (contract
liability), reflecting the free goods obligations outstanding as at
1 January 2018, an increase of trade receivables by $1 million,
decrease in the income tax provision by $1 million and the
corresponding net adjustment to decrease retained earnings by $25
million. There is no restatement to prior periods as permitted in
the transition rules for IFRS 15. The impact of IFRS 15 on the
consolidated financial statements for 31 December 2018.
IFRS 9
IFRS 9 'Financial Instruments' replaces IAS 39 'Financial
Instruments: Recognition and Measurement' and is effective for
annual periods beginning on or after 1 January 2018, bringing
aspects of the accounting for financial instruments:
classification, measurement and impairment.
(a) Classification and measurement
The principal impact is that the portfolio investments (quoted
securities portfolio) previously, designated as available for sale
financial assets have been re-categorised on initial application as
Investments FVTPL. For further details see note 13, of the
consolidated financial statements. The Group recorded the fair
value movements for such investments through of the consolidated
income statement for the year ended 31 December 2018.
Equity instruments are normally measured at fair value through
profit or loss. However, on initial recognition, the Group may make
irrevocable election (on instrument-by-instrument basis) to present
in other comprehensive income subsequent changes in the fair value
of equity instrument not held for trading.
The fair value movements on investments in unlisted equity
instrument (i.e. the Group's venture capital investments) are
recorded in other comprehensive income. This category only includes
equity instruments, which the Group intends to hold for the
foreseeable future. The Group has irrevocably elected (on
instrument-by-instrument basis) to classify these equity
investments as measured at FVTOCI upon transition to IFRS 9.
Previously, the investments in unlisted shares that were not
held for trading were stated at cost, less a provision for any
impairment loss (under IAS 39 cost exemption). At transition date,
the investments in unlisted shares ($16 million) are re-classed as
financial assets measured at FVTOCI.
(b) Impairment
The adoption of IFRS 9 has changed the Group's accounting for
impairment losses for financial assets by replacing IAS 39's
incurred loss approach with a forward-looking expected credit loss
(ECL) approach. IFRS 9 requires the Group to record an allowance
for ECLs for all loans and other debt financial assets not held at
FVTPL.
The Group has adopted IFRS 9 retrospectively, but with certain
permitted exceptions. As a result, prior year results are also not
restated, but a cumulative adjustment as a decrease in trade
receivables and a corresponding adjustment to decrease equity at 1
January 2018 by $3 million.
The adoption of the ECL requirements of IFRS 9 resulted in an
increase in impairment allowance of the Group's debt financial
assets.
The other changes introduced in IFRS 9 have not had a
significant impact on the Group.
IFRS 16
IFRS 16 was issued in January 2016 and it replaces IAS 17
'Leases', IFRIC 4 'Determining whether an Arrangement Contains a
Lease', SIC-15 'Operating Leases-Incentives' and SIC-27 'Evaluating
the Substance of Transactions Involving the Legal form of a
Lease'.
IFRS 16 sets out the principles for the recognition,
measurement, presentation and disclosure of leases and requires
lessees to account for all leases under a single on-balance sheet
model similar to the accounting for finance leases under IAS 17.
The standard includes two recognition exemptions for lessees -
leases of 'low-value' assets (e.g. personal computers) and
short-term leases (i.e. leases with a lease term of 12 months or
less). At the commencement date of a lease, a lessee will recognise
a liability to make lease payments (i.e. the lease liability) and
an asset representing the right to use the underlying asset during
the lease term (i.e. the right-of-use asset). Lessees will be
required to separately recognise the interest expense on the lease
liability and the depreciation expense on the right-of-use
asset.
Lessees will be also required to remeasure the lease liability
upon the occurrence of certain events (e.g. a change in the lease
term, a change in future lease payments resulting from a change in
an index or rate used to determine those payments). The lessee will
generally recognise the amount of the remeasurement of the lease
liability as an adjustment to the right-of-use asset.
IFRS 16 also requires lessees and lessors to make more extensive
disclosures than under IAS 17.
IFRS 16 is effective for annual periods beginning on or after 1
January 2019.
Early application is permitted. A lessee can choose to apply the
standard using either a full retrospective or a modified
retrospective approach. The standard's transition provisions permit
certain reliefs, it is currently anticipated that the standard will
be adopted on a modified retrospective approach.
In 2018, the Group has assessed the potential effect of IFRS 16
on its consolidated financial statements. The Group expects to
recognise lease liabilities of approximately $49 million on 1
January 2019, right-of-use assets of $46 million (after an
adjustment for accrued rent of $3 million recognised as at 31
December 2018).
IFRIC 23
IFRIC 23 'Uncertainty over income tax treatments' was issued in
June 2017 and will be implemented by the Group from 1 January 2019.
The interpretation clarifies that if it is considered probable that
a tax authority will accept an uncertain tax treatment, the tax
charge should be calculated on that basis. If it is not considered
probable, the effect of the uncertainty should be estimated and
reflected in the tax charge. In assessing the uncertainty, it is
assumed that the tax authority will have full knowledge of all
information related to the matter.
The Group has assessed the potential impact of the new
interpretation and believes the application of IFRIC 23 on 1
January 2019 will not result in a material change to the provisions
held for uncertain tax positions.
2. Going concern
The Directors have, at the time of approving the consolidated
financial statements, a reasonable expectation that the Company and
the Group have adequate resources to continue in operational
existence and therefore considered the going concern basis as
appropriate. Therefore, they continue to adopt the going concern
basis of accounting in preparing the consolidated financial
statements
3. Revenue from contracts with customers
Business and geographical markets:
The following table provides an analysis of the Group's sales by
segment and geographical market, irrespective of the origin of the
goods/services:
Branded Injectables Generics Others Total
Year ended 31 December 2018 $m $m $m $m $m
------------------------------ -------- ------------ --------- ------- ------
United States - 601 692 - 1,293
Middle East and North Africa 531 120 - 5 656
Europe and Rest of the World 11 100 - 5 116
United Kingdom - 5 - - 5
------------------------------ -------- ------------ --------- ------- ------
542 826 692 10 2,070
------------------------------ -------- ------------ --------- ------- ------
Branded Injectables Generics Others Total
Year ended 31 December 2017 $m $m $m $m $m
------------------------------ -------- ------------ --------- ------- ------
United States - 586 615 - 1,201
Middle East and North Africa 523 102 - 5 630
Europe and Rest of the World 13 86 - 4 103
United Kingdom - 2 - - 2
------------------------------ -------- ------------ --------- ------- ------
536 776 615 9 1,936
------------------------------ -------- ------------ --------- ------- ------
The top selling markets in 2018 are as below:
2018 2017
$m $m
--------------- ------- -------
United States 1,293 1,201
Saudi Arabia 170 157
Egypt 97 75
--------------- ------- -------
1,560 1,433
--------------- ------- -------
Included in revenue arising in the Generics and Injectables
segments is revenue of approximately $309 million (2017: $301
million) which arose from the Group's largest customer which is
located in the US.
Contract balances:
2018 2017
$m $m
-------------------------------- -------------- --------------
Trade receivables (note 12) 654 650
Contract liabilities (note 15) 151 127
-------------------------------- -------------- --------------
Trade receivables are non-interest bearing. Typical credit terms
in the US range from 30 to 90 days, in Europe from 30 to 120 days,
and in MENA from 180 to 360 days.
Contract liabilities mainly relate to returns provisions and
free goods balances. The movement in the year is mainly due to the
increase in contract liability offset by the settlement of free
goods liability of $28 million in relation to a customer account
receivable balance.
There was nominal amount of revenue recognised in the year in
relation to the contract liability balance recognised at the
beginning of the year.
4. Business segments
For management reporting purposes, the Group is organised into
three principal operating divisions - Injectables, Generics and
Branded. These divisions are the basis on which the Group reports
its segmental information.
Core operating profit, defined as 'segment result', is the
principal measure used in the decision-making and resource
allocation process of the chief operating decision maker, who is
the Group's Chief Executive Officer.
Information regarding the Group's operating segments is reported
below:
Injectables 2018 2017
Exceptional Exceptional
items items
and other and other
2018 adjustments 2018 2017 adjustments 2017
Core (note Reported Core (note Reported
results 5) results results 5) results
$m $m $m $m $m $m
--------- ------------- ---------- --------- ------------- ----------
Revenue 832 (6) 826 776 - 776
Cost of sales (329) - (329) (296) - (296)
--------- ------------- ---------- --------- ------------- ----------
Gross profit 503 (6) 497 480 - 480
--------- ------------- ---------- --------- ------------- ----------
Total operating expenses (168) (24) (192) (165) (22) (187)
--------- ------------- ---------- --------- ------------- ----------
Segment result 335 (30) 305 315 (22) 293
--------- ------------- ---------- --------- ------------- ----------
Generics 2018 2017
Exceptional Exceptional
items items
and other and other
2018 adjustments 2018 2017 adjustments 2017
Core (note Reported Core (note Reported
results 5) results results 5) results
$m $m $m $m $m $m
--------- ------------- ---------- --------- ------------- ----------
Revenue 692 - 692 615 - 615
Cost of sales (397) (16) (413) (390) (6) (396)
--------- ------------- ---------- --------- ------------- ----------
Gross profit 295 (16) 279 225 (6) 219
--------- ------------- ---------- --------- ------------- ----------
Total operating expenses (202) (37) (239) (203) (1,098) (1,301)
--------- ------------- ---------- --------- ------------- ----------
Segment result 93 (53) 40 22 (1,104) (1,082)
--------- ------------- ---------- --------- ------------- ----------
Branded 2018 2017
Exceptional Exceptional
items items
and other and other
2018 adjustments 2018 2017 adjustments 2017
Core (note Reported Core (note Reported
results 5) results results 5) results
$m $m $m $m $m $m
--------- ------------- ---------- --------- ------------- ----------
Revenue 542 - 542 536 - 536
Cost of sales (271) - (271) (271) - (271)
--------- ------------- ---------- --------- ------------- ----------
Gross profit 271 - 271 265 - 265
--------- ------------- ---------- --------- ------------- ----------
Total operating expenses (154) (6) (160) (151) (7) (158)
--------- ------------- ---------- --------- ------------- ----------
Segment result 117 (6) 111 114 (7) 107
--------- ------------- ---------- --------- ------------- ----------
Others 2018 2018 2017
Core Exceptional Exceptional
results items items
and other and other
adjustments 2018 2017 adjustments 2017
(note Reported Core (note Reported
5) results results 5) results
$m $m $m $m $m $m
--------- ------------- ---------- --------- ------------- ----------
Revenue 10 - 10 9 - 9
Cost of sales (7) - (7) (6) - (6)
--------- ------------- ---------- --------- ------------- ----------
Gross profit 3 - 3 3 - 3
--------- ------------- ---------- --------- ------------- ----------
Total operating expenses (8) - (8) (7) - (7)
--------- ------------- ---------- --------- ------------- ----------
Segment result (5) - (5) (4) - (4)
--------- ------------- ---------- --------- ------------- ----------
'Others' mainly comprises Arab Medical Containers LLC,
International Pharmaceutical Research Center LLC, Hikma Emerging
Markets and Asia Pacific FZ LLC, and the chemicals division of
Hikma Pharmaceuticals LLC (Jordan).
Group 2018 2017
Exceptional Exceptional
items items
and other and other
2018 adjustments 2018 2017 adjustments 2017
Core (note Reported Core (note Reported
results 5) results results 5) results
$m $m $m $m $m $m
--------- ------------- ---------- --------- ------------- ----------
Segment result 540 (89) 451 447 (1,133) (686)
Unallocated expenses (80) - (80) (61) - (61)
--------- ------------- ---------- --------- ------------- ----------
Operating profit/(loss) 460 (89) 371 386 (1,133) (747)
--------- ------------- ---------- --------- ------------- ----------
Finance income 3 - 3 2 93 95
Finance expense (54) (26) (80) (60) (26) (86)
Loss from investment
at fair value
through profit or loss (1) - (1) - - -
--------- ------------- ---------- --------- ------------- ----------
Profit/(loss) before
tax 408 (115) 293 328 (1,066) (738)
--------- ------------- ---------- --------- ------------- ----------
Tax (73) 65 (8) (72) (29) (101)
--------- ------------- ---------- --------- ------------- ----------
Profit/(loss) for the
year 335 (50) 285 256 (1,095) (839)
========= ============= ========== ========= ============= ==========
Attributable to:
Non-controlling interests 3 - 3 4 - 4
Equity holders of the
parent 332 (50) 282 252 (1,095) (843)
--------- ------------- ---------- --------- ------------- ----------
335 (50) 285 256 (1,095) (839)
--------- ------------- ---------- --------- ------------- ----------
Unallocated corporate expenses mainly comprise employee costs,
third-party professional fees, IT costs, travel expenses, rent
expenses and donations.
5. Exceptional items and other adjustments
Exceptional items and other adjustments are disclosed separately
in the consolidated income statement to assist in understanding the
Group's core performance.
2018 2017
$m $m
Exceptional items
Research and development cost (29) -
Contingent consideration gain - 29
Acquisition, integration and other costs (30) (26)
Impairment of the Columbus business goodwill - (407)
Impairment of product related intangible assets,
software, property, plant and
equipment and others - (681)
----- ---------
Exceptional items included in operating profit/(loss) (59) (1,085)
----- ---------
Tax benefit associated with prior year impairment
loss for which a tax benefit is recognised 43 -
Prior year favourable US tax ruling 13 -
US tax reform bill - (49)
----- ---------
Exceptional items included in profit/(loss) (3) (1,134)
----- ---------
Other adjustments
Intangible amortisation other than software (30) (48)
Remeasurement of contingent consideration,
financial liability and asset, (net) (26) 67
----- ---------
Exceptional items and other adjustments (59) (1,115)
----- ---------
Tax effect 9 20
----- ---------
Impact on profit/(loss) for the year (50) (1,095)
===== =========
In reference to the exceptional items and other adjustments
policy, the details are presented below:
Exceptional items:
- During 2018, Hikma incurred $29 million of research and
development costs related to a repeat clinical endpoint study for
generic Advair Diskus(R). In 2017, Hikma recognised a $29 million
contingent consideration gain from Boehringer Ingelheim as
compensation for failure to receive FDA approval of generic Advair
Diskus(R) before 24 December 2017. To obtain approval, the FDA
requires the completion of an additional clinical endpoint study.
Both the compensation and the repeat clinical study cost have been
treated as exceptional items.
- Integration and other costs were incurred in relation to the
restructuring of the Columbus manufacturing facility and the
closure of the Eatontown manufacturing facility, in addition to the
consolidation of the distribution centre in the US, of which $6
million is included in revenue, $16 million is included in cost of
sales, $2 million in sales and marketing, $1 million in general and
administrative and $5 million in other operating expenses.
- Tax benefit associated with prior year impairment loss
recognised in 2018 (note 6).
-The prior year favourable US tax ruling relates to the benefit
associated with a change in the tax reporting for chargebacks in
the US.
In previous periods, exceptional items and other adjustments
were related to the following:
- acquisition, integration and other costs were incurred in
relation to the acquisition of the Columbus business and disposal
the Eatontown plant and were included in the cost of sales, general
and administrative expenses, sales and marketing expenses, research
and development expenses and other operating expenses (notes
10).
- impairment of the Columbus business goodwill related to the
unfavourable industry developments in the US generics industry in
the second half of 2017 and was included in other operating
expenses (note 9).
- impairment of product related intangible assets, property,
plant and equipment and others, related to the impairment of assets
of the Columbus business, including product rights, in process
R&D, software and property, plant and equipment, and was
included in other operating expenses (notes 9 and 10). In addition,
impairment of other product-related intangible assets of $4 million
which was included in research and development expenses (note
9).
- Contingent consideration gain represents a compensation
received from Boehringer Ingelheim for failure to receive FDA
approval of generic Advair Diskus(R) before 24 December 2017 (note
13).
- US tax reform bill represents the estimated impact on the US
deferred tax asset of lowering the US federal tax rate which was
signed in December 2017 and effective from 1st January 2018 (note
6).
Other adjustments:
Remeasurement of contingent consideration, financial liability
and asset represents the net difference resulting from the
valuation of the liabilities and assets associated with the future
contingent payments receivables in respect of the Columbus business
acquisition and the financial liability in relation to the
co-development earnout payment agreement in respect of certain
generic injectable products that were acquired from Boeringher
Ingelheim (note 13,15 and 18). The remeasurement is included in
finance expense/income.
6. Tax
2018 2017
Exceptional Exceptional
items items
and other and other
2018 adjustments 2018 2017 adjustments 2017
Core (note Reported Core (note Reported
results 5) results results 5) results
$m $m $m $m $m $m
-------------- ---------------------- -------------- -------------- ------------------ --------------
Current tax:
Domestic
tax 1 - 1 2 - 2
Foreign tax 36 (9) 27 48 (20) 28
Deferred tax
Current year 39 (43) (4) 22 49 71
Adjustment
to prior
year (3) (13) (16) - - -
-------------- ---------------------- -------------- -------------- ------------------ --------------
73 (65) 8 72 29 101
-------------- ---------------------- -------------- -------------- ------------------ --------------
UK corporation tax is calculated at 19.00% (2017: 19.25%) of the
estimated assessable profit made in the UK for the year.
The Group incurred a tax expense of $8 million (2017: $101
million). The effective tax charge rate is 2.7%, (2017: credit
13.7%). The reported effective tax rate is lower than the statutory
rate mainly due to the tax benefit associated with the impairment
loss incurred in the prior year, for which a current year deferred
tax benefit is being recognised.
Taxation for all jurisdictions is calculated at the rates
prevailing in the respective jurisdiction.
The charge for the year can be reconciled to profit/(loss)
before tax per the consolidated income statement as follows:
2018 2017
$m $m
------ -------
Profit/(loss) before tax 293 (738)
Tax at the UK corporation tax rate of 19.00%
(2017: 19.25%) 56 (142)
Profits taxed at different rates 14 13
Permanent differences
- Non-taxable income (14) (13)
- Non-deductible expenditures 2 6
- Adjustment on intercompany inventory 1 (7)
- Other - (7)
- Impairment of goodwill - 78
State and local taxes 4 (4)
Temporary differences
- Tax losses and other deductible temporary
differences for which no benefit is recognised 8 119
- Prior year favourable US tax ruling (13) -
- Tax benefit associated with losses incurred (43) -
in a prior year for which a current benefit
is recognised
- Tax rate changes (US tax reform) - 49
- Other deductible temporary differences for (3) -
with no benefits is recognised
Change in provision for uncertain tax positions (2) 7
Unremitted earnings 4 2
Prior year adjustments (6) -
------------------------------------------------- ------ -------
Tax expense for the year 8 101
------------------------------------------------- ------ -------
Profits taxed at different tax rates relates to profits arising
in overseas jurisdictions where the tax rate differs from the UK
statutory rate.
Permanent differences relate to items which are non-taxable or
for which no tax relief is ever likely to be due. The major items
are differences in GAAP between IFRS and local territory GAAP,
expenses and income disallowed where they are covered by statutory
exemptions, foreign exchange differences in some territories and
statutory reliefs such as R&D and manufacturing tax
credits.
Temporary differences for which no benefit is recognised
includes items on which it is not possible to book deferred tax and
comprise mainly unrecognised tax losses. Management has not
recognised a benefit for the losses on the basis that there are
insufficient forecasted taxable profits in the foreseeable
future.
The change in provision for uncertain tax positions relates to
the provisions the Group holds in the event of a revenue authority
successfully taking an adverse view of the positions adopted by the
Group in 2018 and primarily relates to a transfer pricing
adjustment. This category also includes adjustments (favourable or
adverse) in respect of uncertain tax positions following agreement
of the tax returns with the relevant tax authorities.
The prior year favourable US tax ruling relates to the benefit
associated with a change in tax reporting for chargebacks in the
US.
Prior year adjustments include differences between the tax
liability recorded in the tax returns submitted for previous years
and estimated tax provision reported in a prior period's
consolidated financial statements.
US tax reform
In 2017, the impact of the US Tax Cuts and Jobs Act of 2017 was
restricted to the reduction of the US deferred tax asset, as a
result of the fall in the federal corporate income tax rate from
35% to 21%, by $49 million (note 5).
US deferred tax assets recognition
In 2017, management did not recognise a tax benefit associated
with the impairment of certain assets of the Columbus business on
the basis that there were insufficient forecasted taxable profits
in the foreseeable future. In 2018, as a result of positive changes
to the US business model due to internal reorganisation which
increased the US taxable profit principally in relation to our
Injectables business, management determined that it is now more
likely than not that such tax benefit is realisable from forecasted
taxable profits in the foreseeable future.
State Aid
The Group is monitoring developments in relation to the EU's
State Aid investigations, in particular, the EU Commission's
announcement in October 2017 that it will be opening a State Aid
investigation into the Group Financing Exemption of the UK's
Controlled Foreign Company (CFC) legislation. This exemption was
introduced by the UK Government in 2013. In common with other
UK-based international companies that have arrangements in line
with the UK's current CFC legislation, Hikma is potentially
affected by the outcome of this investigation. The Group does not
currently consider any provision is required in relation to EU
State Aid. As with all uncertain tax positions, the assessment of
risk is subjective and involves significant management judgement.
The judgement is based on management's understanding of
legislation, experience and professional advice taken on the
matters.
Publication of tax strategy
In line with the UK requirement for large UK businesses to
publish their tax strategy. Hikma's tax strategy has been made
available on the Group's website.
7. Dividends
2018 2017
$m $m
----- -----
Amounts recognised as distributions to equity
holders in the year:
Final dividend for the year ended 31 December
2017 of 23.0 cents (2016: 22.0 cents) per
share 55 53
Interim dividend for the year ended 31 December
2018 of 12.0 cents (2017: 11.0 cents) per
share 29 26
----- -----
84 79
----- -----
The proposed final dividend for the year ended 31 December 2018
is 26.0 cents (2017: 23.0 cents).
The proposed final dividend is subject to approval by
shareholders at the Annual General Meeting on 17 May 2019 and has
not been included as a liability in these consolidated financial
statements. Based on the number of shares in issue at 31 December
2018 (241,455,394), the unrecognised liability is $63 million.
8. Earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing the
profit attributable to equity holders of the parent by the weighted
average number of ordinary shares. Diluted EPS is calculated by
dividing the profit attributable to ordinary equity holders by the
weighted average number of the Ordinary Shares outstanding during
the year plus the weighted average number of Ordinary Shares that
would be issued on conversion of all dilutive potential Ordinary
Shares into ordinary shares. The number of Ordinary Shares used for
the basic and diluted calculations is shown in the table below.
Core basic earnings per share and core diluted earnings per share
are intended to highlight the core results of the Group before
exceptional items and other adjustments.
2017
Exceptional
2018 items
Exceptional and other
2018 items and 2018 2017 adjustments 2017
Core other adjustments Reported Core (note Reported
results (note 5) results results 5) results
$m $m $m $m $m $m
--------- ------------------- ---------- --------- ------------- ----------
Earnings/(loss) for
the purposes of
basic and diluted
earnings per
share being net profit
attributable
to equity holders
of the parent 332 (50) 282 252 (1,095) (843)
--------- ------------------- ---------- --------- ------------- ----------
2018 2017
Number Number
Number of shares 'm 'm
------- -------
Weighted average number of Ordinary Shares
for the purposes of basic earnings per share 241 240
Effect of dilutive potential Ordinary Shares:
Share-based awards 1 1
------- -------
Weighted average number of Ordinary Shares
for the purposes of diluted earnings per share 242 241
------- -------
2018 2018 2017 2017
Reported Reported
Core Earnings Earnings Core Earnings Earnings
per share per share per share per share
Cents Cents Cents Cents
-------------- ----------- -------------- -----------
Basic 137.8 117.0 105.0 (351.3)
-------------- ----------- -------------- -----------
Diluted 137.2 116.5 104.6 (349.8)
-------------- ----------- -------------- -----------
9. Goodwill and Other intangible assets
The changes in the carrying value of goodwill and other
intangible assets for the years ended 31 December 2018 and 31
December 2017 are as follows:
Other
Product-related identified
Goodwill intangibles Software intangibles Total
$m $m $m $m $m
--------- ---------------- --------- ------------- ---------
Cost
Balance at 1 January
2017 683 1,006 87 106 1,882
Additions - 7 31 1 39
Translation adjustments 7 2 - 4 13
------------------------------ --------- ---------------- --------- ------------- ---------
Balance at 1 January
2018 690 1,015 118 111 1,934
------------------------------ --------- ---------------- --------- ------------- ---------
Additions - - 12 21 33
Acquisition of subsidiaries - 1 - - 1
Translation adjustments (3) (1) - (2) (6)
------------------------------ --------- ---------------- --------- ------------- ---------
Balance at 31 December
2018 687 1,015 130 130 1,962
------------------------------ --------- ---------------- --------- ------------- ---------
Amortisation
Balance at 1 January
2017 (1) (87) (28) (47) (163)
Charge for the year - (41) (11) (7) (59)
Impairment (note 5) (407) (505) (12) - (924)
Translation adjustments - - - (3) (3)
------------------------------ --------- ---------------- --------- ------------- ---------
Balance at 1 January
2018 (408) (633) (51) (57) (1,149)
------------------------------ --------- ---------------- --------- ------------- ---------
Charge for the year - (22) (10) (8) (40)
Impairment - (4) (5) - (9)
Translation adjustments - 1 - 1 2
------------------------------ --------- ---------------- --------- ------------- ---------
Balance at 31 December
2018 (408) (658) (66) (64) (1,196)
------------------------------ --------- ---------------- --------- ------------- ---------
Carrying amount
------------------------------ --------- ---------------- --------- ------------- ---------
At 31 December 2018 279 357 64 66 766
------------------------------ --------- ---------------- --------- ------------- ---------
At 31 December 2017 282 382 67 54 785
------------------------------ --------- ---------------- --------- ------------- ---------
Amortisation of all intangible assets with finite useful lives
is charged on a straight-line basis in which $1 million is included
in the cost of sales, $30 million in sales and marketing expenses
and $9 million in general and administrative expenses.
In 2018, the Group recorded a total intangible impairment charge
of $9 million, of which $5 million related to software and $4
million for to product related intangibles. $7 million of the
impairment charge is included within other operating expenses.
In 2017, the Group recorded a total intangible impairment charge
of $924 million related to goodwill of $407 million,
product-related intangibles of $505 million and software of $12
million. Of this amount $920 million relates to the impairment of
the intangible assets related to the Columbus business. As a result
of this impairment the Generics business goodwill was written off
to $nil.
Goodwill
Goodwill acquired in a business combination is allocated at
acquisition to the CGUs that are expected to benefit from that
business combination. The carrying amount of goodwill has been
allocated as follows:
As at 31 December
--------------------
2018 2017
$m $m
--------- ---------
Branded 166 169
Injectables 113 113
--------- ---------
Total 279 282
--------- ---------
In accordance with the Group policy, goodwill is tested annually
for impairment during the fourth quarter or more frequently if
there are indications that goodwill may be impaired.
Details related to the discounted cash flow models used in the
impairment tests of the CGUs are as follows:
Valuation basis Higher of fair value less
costs to sell and value
in use
----------------------------------------- -------------------------------------- -----------------------------
Key assumptions Sales growth
rates
Profit margins
Terminal growth
rate
Discount rate
----------------------------------------- ----------------- ------------------- -----------------------------
Determination of assumptions Growth rates are internal forecasts based on both
internal and external market information
Margins reflect past experience, adjusted for
expected changes
Terminal growth rates based on management's estimate
of future long-term average growth rates
Discount rates based on Group WACC, adjusted where
appropriate
----------------------------------------- ---------------------------------------------------------------------
Period of specific projected cash flows 5 years
----------------------------------------- ----------------- ------------------- -----------------------------
Terminal growth rate and discount rate Terminal growth Pre-tax discount Post-tax
rate (perpetuity) rate discount
rate
----------------- ------------------- ----------------- ----------
Branded 2% 16.3% 14.1%
Injectables 2% 13.1% 11.1%
----------------------------------------------------------- ------------------- ----------------- ----------
CGUs: The Group also performed its annual goodwill impairment
test on a quantitative basis for the Branded and Injectables CGUs.
The Group conducted a sensitivity analysis on the impairment of
each CGU's carrying value. Although the Directors have concluded
sufficient headroom(1) exists for all of the CGUs, there is a
possibility that changes to the key assumptions could result in
impairment. The Group has performed sensitivity analysis on the key
assumptions affecting the valuation of the Branded and Injectables
CGUs and have has determined that sufficient headroom exists.
Specifically, an evaluation of the valuation of the CGUs was made
assuming an increase of 1% in the discount rate, or a 5% decline in
the forecasted net sales, or a 5% decline in the gross margins in
the terminal year, or a 1% decline in the terminal growth rate and
in all cases sufficient headroom exists.
Whilst there is some uncertainty regarding the short-term impact
of the political events in MENA region, the Group does not consider
that the likelihood of impairment losses in the long term has
increased.
1. Headroom is defined as the excess of the higher of fair value
less costs to sell and value in use, compared to the carrying value
of a CGU.
Other Intangible Assets
Other intangible assets with a net book value of $487 million at
31 December 2018 (2017: $503 million) consists of in-process
research and development (IPR&D) of $236 million (2017: $223
million), product rights of $125 million (2017: $159 million) and
other intangible assets of $126 million (2017: $121 million).
In-Process Research and Development (IPR&D)
As of 31 December 2018, the Group performed its annual review of
IPR&D. The result of this testing is an impairment charge of $4
million.
Product Rights
Whenever impairment indicators are identified for definite life
intangible assets, Hikma reconsiders the asset's estimated life,
calculates the undiscounted value of the assets or asset group's
cash flows and compares such value against the asset's or asset
group's carrying amount. If the carrying amount is greater, Hikma
records an impairment loss for the excess of book value over
valuation based on the discounted cash flows by applying an
appropriate discount rate that reflects the risk factors associated
with the cash flow streams. The more significant estimates and
assumptions inherent in the estimate of the recoverable amount of
identifiable intangible assets include all assumptions associated
with forecasting product profitability. As at 31 December 2018,
management did not identify any impairment indicators.
Software
Software intangibles mainly represent the Enterprise Resource
Planning solutions that are being implemented in different
operations across the Group in addition to other software
applications. The software has an average estimated useful life
that varies from three to ten years.
In 2018, the Group recorded an impairment charge of $5 million
related to software.
Customer relationships
Customer relationships represent the value attributed to
existing direct customers that the Group acquired on the
acquisition of subsidiaries. The customer relationships have an
average estimated useful life of 15 years.
Trade name
Trade names were mainly recognised on the acquisition of Hikma
Germany GmbH (Germany) and Promopharm with estimated useful lives
of ten years.
Marketing rights
Marketing rights are amortised over their useful lives
commencing in the year in which the rights are ready for use with
estimated useful lives that vary from two to ten years.
As at 31 December 2018, the Group had entered into definitive
contractual commitments for the acquisition of intangible assets of
$4 million (2017: $5 million).
10. Property, plant and equipment
Vehicles, Projects
Land Machinery Fixtures under
and buildings and equipment and equipment construction Total
Cost $m $m $m $m $m
----------------------------- --------------- --------------- --------------- -------------- -------
Balance at 1 January
2017 530 539 98 192 1,359
Additions 2 7 8 95 112
Adjustments to opening
balance 2 1 1 - 4
Disposals (1) (4) (2) (2) (9)
Transfers 52 64 7 (123) -
Translation adjustment 7 12 2 2 23
----------------------------- --------------- --------------- --------------- -------------- -------
Balance at 1 January
2018 592 619 114 164 1,489
----------------------------- --------------- --------------- --------------- -------------- -------
Additions 8 15 6 100 129
Acquisition of subsidiaries 7 5 - - 12
Disposals (33) (22) (4) (3) (62)
Transfers 6 18 2 (26) -
Translation adjustment (6) (8) (1) (4) (19)
----------------------------- --------------- --------------- --------------- -------------- -------
Balance at 31 December
2018 574 627 117 231 1,549
----------------------------- --------------- --------------- --------------- -------------- -------
Accumulated depreciation
Balance at 1 January
2017 (84) (242) (57) (7) (390)
Charge for the year (21) (45) (11) - (77)
Adjustments to opening
balance (2) (1) (1) - (4)
Disposals - 1 2 - 3
Impairment (note 5) (86) (84) (5) (6) (181)
Translation adjustment (3) (8) (1) - (12)
----------------------------- --------------- --------------- --------------- -------------- -------
Balance at 1 January
2018 (196) (379) (73) (13) (661)
----------------------------- --------------- --------------- --------------- -------------- -------
Charge for the year (19) (38) (12) - (69)
Disposals 19 23 4 - 46
Impairment (note 5) - (3) - - (3)
Translation adjustment 2 5 1 - 8
----------------------------- --------------- --------------- --------------- -------------- -------
Balance at 31 December
2018 (194) (392) (80) (13) (679)
----------------------------- --------------- --------------- --------------- -------------- -------
Carrying amount
----------------------------- --------------- --------------- --------------- -------------- -------
At 31 December 2018 380 235 37 218 870
----------------------------- --------------- --------------- --------------- -------------- -------
At 31 December 2017 396 240 41 151 828
----------------------------- --------------- --------------- --------------- -------------- -------
Land is not subject to depreciation.
A depreciation amount of $55 million is included within the cost
of sales, $2 million in sales and marketing expenses, $7 million in
general and administrative expenses and $5 million in research and
development expenses.
In 2018, the Group reported an impairment charge of $3 million,
of which $2 million related to the closure of Eatontown (note
5).
The net book value of the Group's property, plant and equipment
includes an amount of $2 million (2017: $6 million) in respect of
assets held under finance lease.
As at 31 December 2018, the Group had pledged property, plant
and equipment with a carrying value of $8 million (2017: $11
million) as collateral for various long-term loans. This amount
includes both specific items around the Group and the net property,
plant and equipment of the Group's businesses in Germany and
Tunisia (2017: Germany, Tunisia and Egypt).
As at 31 December 2018, the Group had entered into contractual
commitments for the acquisition of property, plant and equipment
amounting to $27 million (2017: $12 million).
11. Inventories
As at 31 December
----------------------
2018 2017
---------------------------
$m $m
--------------------------- --------- ---------
Finished goods 135 135
Work-in-progress 83 63
Raw and packing materials 253 234
Goods in transit 32 33
Spare parts 25 23
--------------------------- --------- ---------
528 488
--------------------------- --------- ---------
Inventories are stated net of provisions as follows:
As at 31 December 2017 Additions Utilisation As at 31 December 2018
$m $m $m $m
------------------------------ ----------------------- ---------- ------------ -----------------------
Provisions against inventory 81 62 (71) 72
------------------------------ ----------------------- ---------- ------------ -----------------------
12. Trade and other receivables
As at 31 December
--------------------
2018 2017
$m $m
------------------------------- -------- ----------
Trade receivables 654 650
Prepayments 57 41
VAT and sales tax recoverable 17 13
Employee advances 3 3
------------------------------- -------- ----------
731 707
=============================== ======== ==========
The fair values of receivables are estimated to be equal to the
carrying amounts.
Trade receivables are stated net of provisions for chargebacks
and doubtful debts as follows:
As at
31 December
2017
and 1
As at January Additions/ As at
31 December IFRS 2018 (releases), Translation 31 December
2017 9 impact (adjusted) net Utilisation adjustments 2018
$m $m $m $m $m $m $m
----------------- ------------- ---------- ------------- ------------- ------------ ------------- -------------
Chargebacks and
other
allowances 238 - 238 1,861 (1,863) - 236
Doubtful debts 67 3 70 (11) (2) (1) 56
----------------- ------------- ---------- ------------- ------------- ------------ ------------- -------------
305 3 308 1,850 (1,865) (1) 292
----------------- ------------- ---------- ------------- ------------- ------------ ------------- -------------
13. Other current assets
As at 31 December
--------------------
2018 2017
$m $m
------------------------------------------ ------- -----------
Price adjustment receivable 20 61
Investment at FVTPL (2017: available for
sale investments) 21 22
Others 18 12
------------------------------------------
59 95
========================================== ======= ===========
Price adjustment receivable represents the current portion of
the contingent receivable in relation to the Columbus business
acquisition, whereby as part of the acquisition, the Group will be
reimbursed for certain contingent payments in respect of milestones
and other conditions based on future events. During the year, the
Group received $45 million reimbursement (2017: $3 million) in
cash. The non-current portion of price adjustment receivable is
included within other non-current assets.
Investment at FVTPL represents the agreement the Group entered
into with an asset management firm in 2015 to manage a $20 million
portfolio of underlying debt instruments. The investment comprises
a portfolio of assets that are managed by an asset manager and is
measured at fair value; any changes in fair value go through
consolidated income statement. This asset is classified as level 1
as it uses quoted prices in active markets.
14. Trade and other payables
As at 31 December
-----------------------------
2018 2017
$m $m
------------------ ------ ---------------------
Trade payables 263 218
Accrued expenses 185 134
Other payables 17 13
------------------ ------ ---------------------
465 365
================== ====== =====================
The fair value of payables are estimated to be equal to the
carrying amount.
Other payables mainly comprise employees' provident fund
liability of $7 million (31 December 2017: $4 million), which
mainly represents the outstanding contributions to the Hikma
Pharmaceuticals Ltd (Jordan) retirement benefit plan, on which the
fund receives 3.5% interest.
15. Other current liabilities
As at 31 December
--------------------
2018 2017
$m $m
-------------------------------------- --------- ---------
Contract liability(1) 151 127
Co-development and earnout payment 2 3
Supply manufacturing agreement 18 9
Obligations under finance leases 1 1
Indirect rebate and other allowances 65 67
Others 26 31
-------------------------------------- --------- ---------
263 238
====================================== ========= =========
1. The 2018 balance includes the IFRS 15 impact of $27 million
(note 1).
Contract liability: The Group allows customers to return
products within a specified period prior to and subsequent to the
expiration date. In addition, free goods are issued to customers as
sale incentives, reimbursement of agreed upon expenses incurred by
the customer or as compensation for expired or returned goods.
Co-development and earn out payment agreement: The liability
mainly relates to the present value of future payments on a
co-development and earn out agreement. As part of this agreement,
milestone payments dependent on successful clinical development of
defined products are received by the Group. In return of receiving
such milestone payments, the Group has agreed to pay the
contracting party a certain percentage of future sales of those
products. As at 31 December 2018, the liability associated with
these earn out payments was adjusted to reflect the present value
of the expected future cash outflows and the difference is
presented as a finance expense. This balance represents the current
portion of the liability and the non-current portion is disclosed
in note 18.
Supply manufacturing agreement: As part of the acquisition of
the Columbus business, the Group entered into supply and
manufacturing contracts with the seller, Boehringer Ingelheim. This
balance represents the current portion of the liability and the
non-current portion is disclosed in note 18.
Indirect rebate and other allowances: represent rebates granted
to healthcare authorities and others parties under contractual
arrangements with certain customers.
16. Bank overdrafts and loans
As at 31 December
---------------------------
2018 2017
$m $m
------------------------------------------ ----- --------------------
Bank overdrafts - 10
Import and export financing 58 48
Short-term loans 7 1
Current portion of long-term loans (note
17) 9 27
------------------------------------------ ----- --------------------
74 86
========================================== ===== ====================
2018 2017
% %
------------------------------------------ ----- ----------------------
The weighted average interest rates paid
are as follows:
Bank overdrafts 5.31 4.55
Bank loans (including the non-current
bank loans) 4.48 3.65
Eurobond 4.25 4.25
Import and export financing 5.45 4.58
------------------------------------------ ----- ----------------------
Import and export financing represents short-term financing for
the ordinary trading activities of the Group.
17.Long-term financial debts
As at 31 December
------------------------------------------ ------------------------------
2018 2017
$m $m
------------------------------------------ ----- -----------------------
Long-term loans 51 201
Long-term borrowings (Eurobond) 497 496
Less: current portion of long-term loans (9) (27)
------------------------------------------ ----- -----------------------
Long-term financial loans 539 670
------------------------------------------ ----- -----------------------
Breakdown by maturity:
Within one year 9 27
In the second year 509 139
In the third year 8 520
In the fourth year 8 4
In the fifth year 9 2
In the sixth year 5 5
------------------------------------------ ----- -----------------------
548 697
------------------------------------------ ----- -----------------------
Breakdown by currency:
US Dollar 514 673
Euro 17 12
Algerian Dinar 16 -
Saudi Riyal - 1
Egyptian Pound - 9
Tunisian Dinar 1 2
------------------------------------------ ----- -----------------------
548 697
------------------------------------------ ----- -----------------------
The loans are held at amortised cost.
Long-term loans amounting to $1 million (31 December 2017: $2
million) are secured on certain property, plant and equipment.
Included in the table above are the following major arrangements
entered into by the Group:
a) A $500 million (carrying value of $497 million, and fair
value of $496 million) 4.25% Eurobond due in April 2020 with the
rating of (BB+/Ba1). The proceeds were used to refinance existing
debt and to finance part of the cash consideration of the Columbus
business acquisition.
b) A syndicated revolving credit facility of $1,175 million was
entered into on 27 October 2015. The facility has an outstanding
balance of $nil at 31 December 2018, (with a fair value of $nil)
(2017: $112 million with a fair value of $112 million) and a $1,175
million unused available limit (2017: $1,063), $1,000 million of
the facility matures on 24 December 2021 and the remainder matures
on 24 December 2019. The facility can be used for general corporate
purposes.
c) A ten-year $150 million loan from the International Finance
Corporation was entered into on 21 December 2017. There was no
utilisation of the loan as at 31 December 2018. Quarterly equal
repayments of the long-term loan will commence on 15 March 2021.
The loan will be used in the MENA region and in other World Bank
countries of operation for its general corporate purposes. The
facility matures on 15 December 2027.
18. Other non-current liabilities
As at 31 December
-----------------------------
2018 2017
$m $m
------------------------------------------ ----- ----------------------
Contingent consideration 204 178
Contingent liability 109 109
Supply manufacturing agreement (note 15) 4 25
Co-development and earnout payment (note
15) 7 8
Others 5 4
------------------------------------------
329 324
------------------------------------------ ===== ======================
Contingent consideration and contingent liability represent a
contractual liability to make payments to thirds parties in the
form of milestone payments that depend on the achievement of
certain US FDA approval milestones; and royalty payments based on
future sales of certain products that are currently under
development.
19. Share capital
Issued and fully paid - included in shareholders' equity:
2018 2017
Number $m Number $m
---------------------------------- ------------- ---- ------------- ----
At 1 January 240,678,894 40 239,954,532 40
Issued during the year (ordinary
shares of 10p each) 776,500 - 724,362 -
---------------------------------- ------------- ---- ------------- ----
At 31 December 241,455,394 40 240,678,894 40
---------------------------------- ------------- ---- ------------- ----
20. Net cash generated from operating activities
2018 2017
---------------------------------------------------------
$m $m
--- --- ----------------------------------------------- -------- --------
Profit/(Loss) before tax 293 (738)
Adjustments for:
Depreciation, amortisation, impairment,
and write-down of:
Property, plant and equipment 72 258
Intangible assets 49 983
Loss from investment at fair value through 1 -
profit or loss
Loss on disposal of property, plant and equipment 3 3
Movement on provisions (3) (1)
Cost of equity-settled employee share scheme 21 22
Finance income (3) (95)
Interest and bank charges 80 86
Foreign exchange loss/(gain) 5 (4)
--------------------------------------------------------- -------- --------
Cash flow before working capital 518 514
--------------------------------------------------------- -------- --------
Change in trade and other receivables (41) 52
Change in other current assets (5) (28)
Change in inventories (51) (31)
Change in trade and other payables 88 15
Change in other current liabilities 7 31
Change in other non-current liabilities (23) (7)
--------------------------------------------------------- -------- --------
Cash generated from operations 493 546
--------------------------------------------------------- -------- --------
21. Fair Value of Financial Assets and Liabilities
The fair value of financial assets and liabilities is included
at the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced
or liquidation sale.
The following financial assets/liabilities are presented at
their carrying value which approximates to their fair value:
- cash and cash equivalents - due to the short-term maturities
of these financial instruments and given that generally they have
negligible credit risk, management considers the carrying amounts
to be not significantly different from their fair values
- short-term loans and overdrafts - approximates to their fair
value because of the short maturity of these instruments
- long-term loans-loans with variable rates are re-priced in
response to any changes in market rates and so management considers
the carrying amount to be not significantly different from their
fair market value
- loans with fixed rates relate to the $500 million Eurobond
accounted through amortised cost. The fair value is determined with
reference to quoted price in an active market on the consolidated
balance sheet date (note 17)
- receivables and payables - the fair values of receivables and
payables are estimated to be equal to the respective carrying
amounts;
- lease obligations - are valued at the present value of the
minimum lease payments
Management classifies items that are recognised at fair value
based on the level of inputs used in their fair value determination
as described below:
- Level 1: Quoted prices in active markets for identical assets
or liabilities
- Level 2: Inputs that are observable for the asset or
liability
- Level 3: Inputs that are not based on observable market
data
Financial assets and liabilities that fall under Level 1
are:
- Investment at fair value through profit or loss amounted to
$21 million (note 13).
Financial assets and liabilities that fall under Level 3
are:
- Co-development and earnout payment liabilities
- Contingent consideration asset and liability resulting from
the acquisition of the Columbus business
- Investment at fair value through other comprehensive
income
The following table presents the changes in Level 3 items for
the period ended 31 December 2018 and the year ended 31 December
2017:
Financial Financial
asset liability
Balance at 1 January 2017 39 258
Additions 29 -
Release (3) (3)
Remeasurement through income statement
(note 5) 2 (65)
----------------------------------------- ---------- -----------
Balance at 31 December 2017 and 1
January 2018 67 190
----------------------------------------- ---------- -----------
Restatement on adoption of IFRS 9(1) 16 -
---------------------------------------- ---------- -----------
Balance at 1 January 2018 (adjusted) 83 190
---------- -----------
Received/settlement (45) (2)
Remeasurement through income statement
(note 5) - 26
Additions 4 -
Fair value adjustments recognised 7 -
in equity
---------------------------------------- ---------- -----------
Balance at 31 December 2018 49 214
----------------------------------------- ---------- -----------
1. As per IFRS 9 available-for-sale investments stated at cost
(under IAS 39 cost exemption) have been re-classified to
investments at FVTOCI
22. Business Combinations
Acquisition of Geber health
On 12 March 2018, Hikma signed an asset purchase agreement with
EURL Geber Health. The overall cash consideration for the tangible
and intangible assets amounted to $13 million.
This acquisition has been accounted for as per IFRS 3 'business
combination' where a set of activities and assets that is capable
of being conducted and managed for the purpose of providing a
return exists.
The assets acquired included an oral general formulation
facility located in Algeria. Hikma has converted this facility into
an oral cephalosporin facility in order to locally manufacture its
cephalosporin portfolio for the Algerian market.
The fair value of the assets acquired included property, plant
and equipment of $12 million and intangible assets of $1
million.
There was insignificant goodwill as a result of this
acquisition.
From the date of acquisition, Geber Health contributed $4
million of revenue and $0.4 million to profit before tax of the
Group.
If the acquisition of Geber health had been completed on the
first day of the financial year, the Group's revenues for the year
would have been approximately USD $2,073 million and the Group's
profit before tax would have been approximately USD $294
million.
23. Related party balances and transactions
Transactions between Hikma and its subsidiaries (together, the
Group) have been eliminated on consolidation and are not disclosed
in this note. Transactions between the Group and its associates,
joint ventures and other related parties are disclosed below.
Trading transactions:
During the year ended 31 December 2018, the Group entered into
the following transactions with related parties:
Boehringer Ingelheim (BI): is a related party of Hikma because
BI owns 16.6% (2017: 16.6%) of the share capital of Hikma, controls
11.8% (2017: 11.8%) of the voting capital of Hikma, has the right
to appoint a director of Hikma and a senior executive of BI holds a
directorship of Hikma. The Group total sales to BI amounted to
$66.6 million (2017: $79.1 million) and the Group total purchases
from BI amounted to $5.1 million (2017: $10.6 million). As at the
year end, the amount owed from BI to the Group was $18.1 million
(2017: $43.8 million). Additionally, balances arising from the
acquisition of the Columbus business from BI relating to contingent
consideration are disclosed in note 13,15 and 18.
Capital Bank, Jordan: is a related party of Hikma because one
director of Hikma is the founder and former Chief Executive Officer
of Capital Bank. At the year end, total cash balance at Capital
Bank was $7.5 million (2017: $11.8 million) and utilisation of
facilities granted by Capital Bank to the Group amounted to $nil
(2017: $nil). The interest income is within the market range.
Darhold Limited (Darhold): is a related party of Hikma because
three directors of Hikma jointly constitute the majority of
directors and shareholders (with immediate family members) in
Darhold and because Darhold owns 24.85% (2017: 24.93%) of the share
and voting capital of Hikma. Other than dividends (as paid to all
shareholders), there were no transactions between the Group and
Darhold Limited during the year.
Hikmacure Limited (Hikmacure): is a related party of Hikma
because Hikmacure is a 50:50 joint venture (JV) with MIDROC
Pharmaceuticals Limited ('MIDROC'). Hikma and MIDROC have invested
in Hikmacure in equal proportions of $2.5 million each in cash
(2017: $2.5 million). During 2017, Hikma and MIDROC agreed not to
proceed with and to liquidate the venture.
HMS Holdings SAL (HMS): is a related party of Hikma because HMS
is owned by the family of two directors of Hikma. Other than
dividends (as paid to all shareholders), there were no transactions
between the Group and HMS during the year.
Hubei Haosun Pharmaceutical Co Ltd (Haosun): is a related party
of Hikma because the Group holds a 49% interest in the joint
venture (JV) with Haosun (2017: 30.1%). During 2018, total
purchases from Haosun were $2.3 million (2017: $1.4 million). At 31
December 2018, the amount owed from Haosun to the Group amounted to
$0.2 million (2017: $1.6 million). During the year Hikma acquired
an additional stake in Haosun bringing the total ownership to
49%.
Labatec Pharma (Labatec): is a related party of the Group
because Labatec is owned by the family of two directors of Hikma.
During 2018, total Group sales to Labatec amounted to $2.9 million
(2017: $1.8 million). As at the year end, the amount owed by
Labatec to the Group was $0.3 million (2017: $0.3 million).
24. Contingent liabilities
A contingent liability existed at the consolidated balance sheet
date in respect of external guarantees and letters of credit
totaling $53 million (31 December 2017: $47 million), arising in
the normal course of business. No provision for these liabilities
has been made in these consolidated financial statements.
In 2018, the Group received a civil investigative demand from
the US Department of Justice requesting information related to
products, pricing and related communications. In 2017, the Group
had received a subpoena from a US state attorney general and a
subpoena from the US Department of Justice. Hikma is still
cooperating with all such demands, and management still does not
believe that sufficient evidence exists at this point to make any
provision.
25. Subsequent Events
Acquisition of Medlac
On 2 January 2019, the Group acquired 100% of the share capital
of Medlac Pharma Italy Co Ltd. (Medlac), an injectable
manufacturing company in Vietnam. The total consideration amount
includes initial upfront cash payment of $8 million and is not
expected to exceed $17 million. The consideration includes deferred
and contingent consideration payable on successful achievement of
certain conditions and milestones. The acquisition includes an
injectable facility, adjacent vacant land, Medlac's product
portfolio of 23 injectables products, its pipeline and all
employees.
The fair value and purchase price allocation of the acquired
assets and liabilities will be disclosed in the financial
statements for the interim period ending 30 June 2019.
Legal settlement
On 13 January 2019, a litigation matter with an external party
was concluded in Hikma's favour and Hikma was entitled to receive a
compensation of $32 million. The settlement amount was received on
13 February 2019 and this will be recognised in the financial
statements.
26. Foreign exchange currencies
The currencies that have a significant impact on the Group
accounts and the exchange rates used are as follows:
Period-end rates Average rates
2018 2017 2018 2017
---------------------- ----------- ----------- ----------- -----------
US dollar /Euro 0.8719 0.8319 0.8442 0.8848
US dollar /Sudanese
pound 47.6190 20.0000 32.6797 16.9779
US dollar /Algerian
dinar 118.3304 114.9402 116.6424 110.9802
US dollar /Saudi
riyal 3.7495 3.7495 3.7495 3.7495
US dollar /Pound
sterling 0.7839 0.7379 0.7464 0.7755
US dollar /Jordanian
dinar 0.7090 0.7090 0.7090 0.7090
USD/Egyptian Pound 17.8571 17.7936 17.7936 17.8891
USD/Japanese yen 109.5600 112.7800 110.2800 112.1826
USD/Moroccan dirham 9.5655 9.3574 9.3836 9.6800
USD/Tunisian dinar 2.9940 2.4839 2.6469 2.4194
USD/Lebanese pound 1,507.5000 1,507.5000 1,507.5000 1,507.5000
----------- ----------- ----------- -----------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR SFDSSDFUSEFD
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