Interim Report, January-March 2016

January-March 2016

  • Net sales reached SEK 4,315 million (4,583), corresponding to a decrease of 6% and an organic sales development of -2%, compared with the previous year.
  • EBITDA, excluding non-recurring items, was SEK 1,256 million (1,403), corresponding to a margin of 29.1% (30.6).
  • Non-recurring items related to the Mylan offer had a SEK 121 million negative impact on earnings before tax.
  • Profit after tax amounted to SEK 291 million (226).
  • Earnings per share reached SEK 0.80 (0.62). Excluding non-recurring items, earnings per share totaled SEK 0.46 (0.59).
  • Cash earnings per share amounted to SEK 0.90 (0.74). Excluding non-recurring items cash earnings per share totaled SEK 1.36 (1.94).
Webcast presentation of the report on May 3 at 10:00 a.m. The presentation can be accessed at www.meda.se/eng/investerare, where a recorded version will also be available until the next interim report. For further inquiries, please contact: Paula Treutiger, VP Corporate Communications & Sustainability, paula.treutiger@meda.se, +46 733-666 599.


CEO statement

2016 is developing in accordance with our plans.

Emerging Markets continued to show solid performance during the quarter. Strong sales in Eastern Europe, Turkey, Middle East and Mexico outweighed lower sales in parts of Asia where we saw an impact mainly related to fluctuations in distributor buying patterns in the quarter. Sales for Emerging Markets amounted to SEK 810 million in Q1.

Sales for our Western European business were varied in the first quarter. Most countries showed a good development and sales were supported by major products such as Dymista and Betadine. As expected, sales were lower in Germany than last year while Southern Europe (Spain, Portugal and Italy) and the Nordic markets performed strongly.

One of the most positive notes for this quarter was Italy, where we saw some of the firsts signs of a turn around with positive effects on Cx sales, particularly with Saugella and Armolipid. As you may recall in our last quarter’s report we called out some problems that we ran into with the Italian operations, and we stated that we would take measure to sort out those issues. We have and will continue to do so, but I am particularly pleased with the Cx business’ turnaround in Italy which is again showing growth of 9% compared to last year’s first quarter.

We are also finally seeing some impact from our repositioning efforts for CB12 – growing sales by 6%. Armolipid, the Cx-product which we intend to expand internationally, has also realized a strong sales increase with 33%. All in all sales in Western Europe amounted to SEK 2,801 million in the quarter.

In the US our promoted growth products continued on a positive track especially with Dymista showing growth in the market of 13% according to IMS compared to the same period last year. This was offset as expected by the natural disruption associated with the potential sale of this division last fall, a tougher comparison for products like Felbatol, the expected negative impact from lower royalties this quarter from Valeant due to the specific terms in our contract which halved our revenues this quarter as compared to last year, and lastly from additional generic competition on four of our existing products. Sales for the US in the quarter totaled SEK 669 million.

Overall our promoted growth products globally showed a growth of 6% compared to the same period last year.

In total, sales for the first quarter amounted to SEK 4,315 million and EBITDA excluding non-recurring items to SEK 1,256 million corresponding to an EBITDA margin of 29.1%. Free cash flow excluding non-recurring items for the quarter was SEK 496 million.

Bottom line, we will continue to execute against our business plan targets as we are hopeful to see more continued recovery in Italy, and expect the US to improve throughout the year.

And now with this attractive offer from Mylan pending, 2016 will prove to be an exciting year for Meda and its stakeholders. Not only does the offer from Mylan create new opportunities for our company and its employees, but also insures our position as a leading European specialty pharma company.

Jörg-Thomas Dierks

Group President and CEO

The company’s auditors did not review this interim report.

 

Forward-looking statement

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 May 3, 2016 at 8:00 AM.

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Meda is one of Europe's leading specialty pharma companies, with focus on marketing and market-adapted product development. Long-term partnerships and acquisitions are fundamental factors in its strategy.

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