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Q2 PRESENTATION 25 July 2017 RECORD SALES AND EBITDA Net sales - PowerPoint PPT Presentation

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Q2 PRESENTATION 25 July 2017 RECORD SALES AND EBITDA Net sales SEKm 1,401 up 13% Profit after tax SEKm 76 (84) EBITDA SEKm 242 up 1% Operating CF SEKm 154 (139) EBITDA margin 17% vs 19% Net debt/ equity 0.6 (0.4)

  1. Q2 PRESENTATION 25 July 2017

  2. RECORD SALES AND EBITDA • Net sales SEKm 1,401 up 13% • Profit after tax SEKm 76 (84) • EBITDA SEKm 242 up 1% • Operating CF SEKm 154 (139) • EBITDA margin 17% vs 19% • Net debt/ equity 0.6 (0.4) NET SALES PER QUARTER (SEKm) EBITDA (SEKm), EBITDA MARGIN PER QUARTER AND EBITDA MARGIN LTM 1 600 300 24,0% EBITDA EBITDA % EBITDA% , LTM 1 400 250 20,0% 1 200 200 16,0% 1 000 800 150 12,0% 600 100 8,0% 400 50 4,0% 200 0 0 0,0% 2

  3. Q2 BY SEGMENT Sales 1 Sek 558 m Manufacturing Services Growth + 8 % Sterile Liquids EBITDA 2 Sek 122 m Margin 22 % Sales 1 Manufacturing Services Sek 666 m Growth + 19 % Solids & Others EBITDA 2 Sek 98 m Margin 15 % Development Sales 1 Sek 216 m Growth -3 % Technology EBITDA 2 Sek 45 m Margin 21 % 1/ Segment Net Sales includes SEKm 41 intra-group sales 2/ Segment EBI TDA does not include SEKm 23 group overhead 3

  4. STERILE LIQUIDS • High capacity utilization Net Sales and % of Total 1 • Good demand • Backlog recovery from Q1 • New Goods and Services Tax in India 39% • Expansion projects 5 5 8 SEKm • Lyophilisation expansion Wasserburg, DE • Ramp-up delayed, likely into 2018 • Ongoing lyophilisation expansion Masate, IT • On plan regarding time and costs EBITDA and % of Total 2 • Ongoing blow-fill-seal Kaysersberg, FR • On plan regarding time and costs • Sales growth + 8 % • Local currency + 3 % 1 2 2 46% • EBITDA same as LY SEKm • Start-up costs in Wasserburg, DE • Positive currency contributing 1/ % of total segment sales 2/ % of total segment EBI TDA 4

  5. SOLIDS & OTHERS Net Sales and % of Total 1 • Weak demand for new single projects • Promising opportunities for portfolios • Delays in India • Product range change in Fontaine, FR 6 6 6 • Discontinuation of less profitable contracts SEKm • Sales growth 19% 46% • Acquisition and currency effect • Organic growth negatively impacted by positive LY EBITDA and % of Total 2 one-offs • EBITDA margin 15% • LY positive one-offs 9 8 SEKm 37% 1/ % of total segment sales 2/ % of total segment EBI TDA 5

  6. DEVELOPMENT & TECHNOLOGY Net Sales and % of Total 1 • Good demand for IP and product rights • Strong trend for Erdosteine and other APIs 15% • Slower than expected growth in Development Services • Certain setbacks in the US 2 1 6 SEKm • Sales growth -3% • Local currency -6% • Thyrosafe sales -16% • EBITDA EBITDA and % of Total 2 • 21% margin, same level as LY • Global development integration 17% • North America, Europe, India • Increasing the service offering and enhancing the 4 5 position in the value chain SEKm 1/ % of total segment sales 2/ % of total segment EBI TDA 6

  7. ACQUISITIONS UPDATE Net Sales • Integration ongoing • Mitim Srl (IT), Feb 2016 • Nitin Lifesciences Ltd (IN), Apr 2016 • Cirrus Pharmaceuticals Inc (US), May 2016 1 + 1 5 6 • Kemwell AB (SE), May 2016 1 50% SEKm • Recipharm Pharmaservices Pvt Ltd (“Kemwell India”), Feb 2017 1 • Performance Completed 2017 • Nitin’s Q2 growth influenced by India’s tax reform EBITDA • Mitim’s RM supply induced Q2 backlog recovery • Recipharm Pharmaservices delay due to registrations • Opportunities 23% • Technology + 1 9 • Market SEKm • Relationship 1/ I ncluded in acquisitions Q2 LY comparison 7

  8. FINANCIALS Henrik Stenqvist (currency SEK million)

  9. Q2 P&L DEVELOPMENT Q2 2 0 1 7 Q2 2 0 1 6 Net Sales 1 401 1 235 EBITDA 242 240 EBITDA margin, % 17,3 19,3 D&A -119 -91 EBIT 123 149 Financial Items -24 -18 Profit before Tax 99 131 Tax -23 -47 Net Profit 76 84 9

  10. MANUFACTURING SERVICES – STERILE LIQUIDS 580 SALES BRIDGE, APRIL – JUNE 560 540 Sales, SEKm Sales, % 520 2 0 1 6 515.3 500 Currency + 27.6 + 5.4 480 Acquisitions 0.0 0.0 460 440 Organic growth + 15.5 + 3.0 420 Total + 43.1 + 8.4 400 2 0 1 7 5 5 8 .4 Q2 2016 Currency Organic growth Q2 2017 EBITDA BRIDGE, APRIL –JUNE 140 120 SEKm EBI TDA 100 2 0 1 6 122.0 Currency + 5.8 80 Acquisitions 0.0 60 Other -5.8 40 Total 0.0 20 2 0 1 7 1 2 2 .0 0 Q2 2016 Currency Other Q2 2017 10

  11. MANUFACTURING SERVICES – SOLIDS & OTHERS 750 SALES BRIDGE, APRIL – JUNE 700 650 Sales, SEKm Sales, % 2 0 1 6 561.4 600 Currency + 7.6 + 1.3 550 Acquisitions + 145.3 + 25.9 Retroactive prices -10.6 -1.9 500 Other -37.3 -6.6 450 Total + 105.1 + 18.7 2 0 1 7 6 6 6 .5 400 Q2 2016 Currency Acquisitions Retroactive Other Q2 2017 prices EBITDA BRIDGE, APRIL –JUNE 140 SEKm EBI TDA 120 95.1 2 0 1 6 100 + 1.6 Currency 80 + 19.1 Acquisitions 60 -10.6 Retroactive prices -6.9 40 Other + 3.2 Total 20 9 8 .3 2 0 1 7 0 Q2 2016 Currency Acquisitions Retroactive Other Q2 2017 prices 11

  12. DEVELOPMENT & TECHNOLOGY 300 SALES BRIDGE, APRIL – JUNE 250 Sales, SEKm Sales, % 222,4 200 2 0 1 6 Currency 6,2 2,8 150 Acquisitions 18 8,1 Thyrosafe tender -35,3 -15,9 100 Other 5,1 2,3 50 Total -6 -2,7 2 0 1 7 2 1 6 ,4 0 Q2 2016 Currency Acquisitions Thyrosafe Other Q2 2017 tender EBITDA BRIDGE, APRIL –JUNE 50 45 SEKm EBI TDA 40 2 0 1 6 4 5 ,6 35 Currency 1,6 30 Acquisitions 0,2 25 20 Product mix and dev. services -2,8 15 Total -1,1 10 2 0 1 7 4 4 ,5 5 0 Q2 2016 Currency Acquisitions Product mix Q2 2017 and dev. serv. 12

  13. + 13% INCREASE IN Q2 NET SALES 1500 1450 3 2 1 5 6 1400 1 4 0 1 1350 1300 1250 4 1 1 2 3 5 1200 1150 1100 1050 1000 Q2 2016 Currency Acquisitions Organic Q2 2017 13

  14. CASH FLOW BY QUARTER SEKm Q1-17 Q2-17 YTD Operating Cash Flow 81,2 191,6 272,8 Total W. c. change -106,0 -37,9 -143,9 Operating cash flow after w.c. -24,8 153,7 128,9 Maintenance capex -64,6 -69,8 -134,4 Free cash flow -89,4 83,9 -5,5 Expansion capex -1 035,6 -128,0 -1 163,6 Cash flow after investment activities -1 125,0 -44,1 -1 169,1 • Strong Free cash flow for the quarter • A period of large expansion capex during 2017 14

  15. CONCLUDING REMARKS Thomas Eldered

  16. BECOMING A GLOBAL LEADER Sek 5.2 bn 2017Q2 LTM Sales ~ 27% CAGR 1 since 2013 Sek 774 m 2017Q2 LTM EBITDA 2 ~ 32% CAGR 1 since 2013 8 Acquisitions 2 Asset/ portfolio 1 Green-field since 2013 Attractive Founded in Listed 500+ 400+ 5000 20+ 100+ value Sweden company Products Customers Employees Locations Markets proposition 1995 since 2014 1/ As reported 16 2/ EBI T + depreciations + amortizations

  17. DRIVING ABOVE-MARKET PERFORMANCE • Integration of completed acquisitions • Benefit from commercial and cost synergies • Start supply serialised products to the US • Prepare commercial supply from expanded lyophilisation capacity in Germany • Create a global comprehensive development services offering • Leverage our sales and business development organisation, in the US, Europe and India • Review and optimize footprint • Execute on accretive acquisition opportunities 17

  18. ON TRACK TO REACH OUR LONG-TERM TARGETS 8.0bn 8,0 Financial targets Status 7,0  + 13% Q2 6,0 At least SEK 8bn in  + 23% ÝTD + 35% sales by 2020 + 38%  5,0 + 35% LTM 4,0 + 32%  17% Q2 EBITDA margin at + 21% 3,0 least 16%  15% YTD 2.1bn  2,0 15% LTM 1,0  0.6 end of Q2 Net debt to equity ratio 0,0 of less than 0.8 2013 2014 2015 2016 Q2LTM 2020 18

  19. Q&A

  20. CONTACT INFORMATION Henrik Stenqvist Thomas Eldered CFO & EVP CEO & Managing Director + 46 (0)8 602 52 00, ir@recipharm.com + 46 (0)8 602 52 00 20

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