Interim Report, January-June 2016
- Net sales reached SEK 9,330 million (9,735), corresponding to a decrease of 4% and a flat organic sales development compared with the previous year.
- EBITDA, excluding non-recurring items, was SEK 2,832 million (3,183), corresponding to a margin of 30.4% (32.7).
- Non-recurring items related to the Mylan offer had a SEK 309 million negative impact on earnings before tax.
- Profit after tax amounted to SEK 589 million (618).
- Earnings per share reached SEK 1.61 (1.69). Excluding non-recurring items, earnings per share totaled SEK 1.65 (1.93).
- Cash earnings per share amounted to SEK 3.38 (1.57). Excluding non-recurring items cash earnings per share totaled SEK 4.03 (3.92).
Second quarter 2016
- Net sales reached SEK 5,015 million (5,152), corresponding to a decrease of 3% and an organic growth of 2% compared with the previous year.
- EBITDA, excluding non-recurring items, was SEK 1,576 million (1,780), corresponding to a margin of 31.4% (34.5).
- Non-recurring items related to the Mylan offer had a SEK 188 million negative impact on earnings before tax.
- Profit after tax amounted to SEK 298 million (392).
- Earnings per share reached SEK 0.81 (1.07). Excluding non-recurring items, earnings per share totaled SEK 1.19 (1.34).
- Cash earnings per share amounted to SEK 2.48 (0.83). Excluding non-recurring items cash earnings per share totaled SEK 2.67 (1.98).
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The second quarter of 2016 was another promising quarter for Meda and our performance for the year-to-date through June developed fully in line with our expectations and financial plans. Overall, our growth businesses increased by 9% in the second quarter, contributing to a solid organic growth rate of 2% for the whole group. This growth was driven by resilient sales from our ongoing business, supported by several of our key growth products within the Rx-product area. We also saw particularly strong performance from our Cx-franchise and Emerging Markets business. As expected, our growth was slightly offset by reduced royalties from our agreement with Valeant, as well as the divestment of the Euromed manufacturing site.
Looking at our regions, our US business saw considerable improvement over the previous quarter, with sales totaling SEK 751 million. We continued to be encouraged by the performance of our top 25 products, which grew by 5% at CER. Our newly established affiliate in Canada also contributed very positively. This strength too was offset by the anticipated negative impact from reduced royalty revenue from outlicensed dermatology products.
Sales for Western Europe totaled SEK 3,197 million, with mixed performance across the region. While we saw strong performance in the Nordics, France, the UK and Italy continued to put some pressure on top line performance. We also continued to see strong performance from key products, especially Dymista, which continued to increase sales and acceptance, and position itself in the #1 or #2 position in several European markets. We also saw convincing growth from EpiPen® Auto-Injector, Saugella and Armolipid in the quarter. While Italy continues to be impacted by our restructuring of this business, we are confident that the actions we are taking will establish a strong platform for the future.
Emerging Markets reported exceptionally strong performance during the quarter, with sales of SEK 1,016 million, corresponding to 15% growth at CER. Key markets such as Greater China, Russia and Turkey performed particularly well, largely driven by our Cx-franchise. Sales of Dona stood out in the region with a growth rate of 131% at CER.
In all, we delivered strong sales for the second quarter of SEK 5,015 million and EBITDA excluding non-recurring items of SEK 1,577 million, representing an EBITDA margin of 31.4%. Free cash flow excluding non-recurring items for the quarter improved to SEK 975 million. Again, this performance was in line with our expectations.
Finally, we remain extremely enthusiastic about Mylan’s public offer for Meda. The combination of our business is a natural fit, and provides compelling industrial logic. We expect that within Mylan much more can be done with our very attractive businesses and products as part of their global platform. We also expect our businesses in the U.S. and Europe to be far stronger, as we benefit from greater scale and diversity, and to be able to accelerate our growth in Emerging markets.
The acceptance period for the offer runs up to and including 29 July, and Mylan has stated that it expects the transaction to close during the third quarter.
Group President and CEO
The company’s auditors did not review this interim report.
This report is not an offer to sell or a solicitation to buy shares in Meda. This report also contains certain forward-looking statements with respect to certain future events and Meda’s potential financial performance. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts and may sometimes include words such as “may”, “will”, “seek”, “anticipate”, “expect”, “estimate”, “intend”, “plan”, “forecast”, “believe”, or other words of similar meaning. These forward-looking statements reflect the current expectations on future events of the management at the time such statements are made, but are made subject to a number of risks and uncertainties. In the event such risks or uncertainties materialize, Meda’s results could be materially affected. The risks and uncertainties include, but are not limited to, risks associated with the inherent uncertainty of pharmaceutical research and product development, manufacturing and commercialization, the impact of competitive products, patents, legal challenges, government regulation and approval, Meda’s ability to secure new products for commercialization and/or development, and other risks and uncertainties detailed from time to time in Meda AB’s interim or annual reports, prospectuses, or press releases. Listeners and readers are cautioned that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statement. Meda does not intend or undertake to update any such forward-looking statements.
Meda AB discloses the information provided herein pursuant to the Securities Market Act and/or the Financial Instruments Trading Act. This information was submitted for publication on July 21, 2016 at 8:00 AM.