Interim Report, January-September 2015

January-September 2015[1]

  • Net sales reached SEK 14,629 million (10,198), corresponding to an increase of 43%, 34% at constant exchange rates compared to the previous year.
  • EBITDA, excluding non-recurring items, was SEK 4,856 million (2,946), corresponding to an increase of 65%, and a margin of 33.2% (28.9).
  • Non-recurring items had a SEK 677 million negative impact on earnings before tax.
  • Profit after tax amounted to SEK 781 million (677).
  • Earnings per share reached SEK 2.14 (2.15)[2]. Excluding non-recurring items, earnings per share totaled SEK 3.03 (2.17).
  • Cash earnings per share amounted to SEK 4.95 (6.11)[2]. Excluding non-recurring items cash earnings per share totaled SEK 7.49 (6.21).
  • Full year forecast: “Meda expects sales for full-year 2015 to reach just below SEK 20 billion with an EBITDA margin around 32% (excluding non-recurring items)”.

Third quarter 2015[1]

  • Net sales reached SEK 4,894 million (3,356), corresponding to an increase of 46%, 39% at constant exchange rates compared to the previous year.
  • EBITDA, excluding non-recurring items, was SEK 1,673 million (980), corresponding to an increase of 71%, yielding a 34.2% margin (29.2).
  • Non-recurring items had a SEK 369 million negative impact on earnings before tax.
  • Profit after tax amounted to SEK 163 million (174).
  • Earnings per share reached SEK 0.45 (0.55)[2]. Excluding non-recurring items, earnings per share totaled SEK 1.10 (0.69).
  • Cash earnings per share amounted to SEK 3.38 (2.12)[2]. Excluding non-recurring items cash earnings per share totaled SEK 3.57 (2.22).
1)      For information about non-recurring items, see page 7
2)      Recalculation of comparative figures to consider the bonus issue element in the 2014 new share issue.
Webcasted presentation of the report on November 5 at 10:00 AM.
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

The third quarter reconfirms our strategy focusing on growth products, optimized base business and acquisitions. Sales rose to SEK 4,894 million in the quarter, with organic growth of 4%. Increased sales were driven by a strong performance in our growth business which was up 16% whereas our base business was in line with last year at constant exchange rates. While the non-prescription products CB12 and Saugella failed to live up to expectations, several of our prioritized products showed double digit growth, e.g. Dona (42%), Dymista (26%), and Elidel (77%).

Despite turbulence and uncertainty in several emerging markets such as Russia, CIS and to some extent China, Emerging Markets returned to double digit growth in the quarter. In the short term, I do not foresee major improvements to market conditions in Russia, while Greater China is expected to continue to perform well. In addition, the Middle East and our recently added markets in Southeast Asia showed strong growth in the quarter and we remain confident about the potential of the Southeast Asian region.

Western Europe had a mixed performance in the quarter. Sales development in France continues to be hampered by generic competition on Tambocor while market performance in Italy was weak. The UK was held back by a very strong Q2. On the positive side, there was strong development in the Nordic markets in particular. Dymista continues its growth trajectory in the region with improved market shares resulting in a growth of 86% in the quarter.

We recorded a strong development in the US in the quarter. The negative impact from generic competition on Astepro that we have seen in previous quarters has now faded. The US base product portfolio performed well reflecting strong growth for Felbatol. Felbatol sales were fueled by positive rebate adjustments in addition to underlying volume growth. Dymista continued to gain market share, supporting the overall performance in the US.

As communicated previously, the integration of the Rottapharm business into our operating units has been successfully achieved. We now operate as one Meda in all markets. As a result, we have seen a boost in EBITDA and improved profitability of 5 percentage points, leading to an EBITDA margin of 34% in the quarter, excluding non-recurring items.

Free cash flow generation recorded a quarterly all-time high in Q3. I am pleased to see that our cash conversion bounced back to a reassuring 78% of EBITDA after a weaker Q2. This confirms our ability and commitment to deleverage the business and prepare for the next stage in building Meda.

For the fourth quarter we foresee continued weaker market performance in Italy than planned. On a group level, we expect sales of just below SEK 20 billion for the full year 2015. With regards to profitability, the fast achievement of synergies from the Rottapharm acquisition has translated into strong EBITDA numbers during the first nine months of the year. This is encouraging and we therefore plan for an EBITDA margin around 32% for the full year 2015, excluding non-recurring items.

Jörg-Thomas Dierks

Group President and CEO

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 November 5, 2015 at 8:00 AM.

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