Interim Report, January-June 2015

January-June 2015[1]

Second quarter 2015[1]

1)      For information about non-recurring effects, see page 72)      Recalculation of comparative figures to consider the bonus issue element in the 2014 new share issue.
Webcasted presentation of the report on July 23 at 10:00 AM.
 The presentation can be accessed at www.meda.se/sv/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 second quarter marked solid underlying progress in a number of areas. Sales strengthened to SEK 5,152 million, 38% (CER) higher than last year and 2% higher on a pro forma organic basis. Both our growth business and base business progressed well organically, up about 4% and 2%, respectively. I am pleased that the business is continuing to develop in line with our plans.

Three quarters following closing of the transaction the integration of Rottapharm is largely complete. There are only a few more steps left to be taken in terms of merging the organizations, which we intend to carry out in the second half of 2015. Year to date, we have reduced operating costs by around SEK 500 million in the business. Hence, we remain well on track as regards achieving targeted synergies. Our focus going forward is to exploit sales and manufacturing synergies and initially we are aiming to take advantage of the new platform in Southeast Asia.

Sales in the Rx product area (prescription drugs) reached SEK 3,199 million in Q2, corresponding to 16% growth (CER) compared to Q2 last year. Sales growth rebounded for several of our prioritized products resulting in pro forma organic growth of 3% in Q2. Dymista which was impacted by wholesaler reductions in Q1 in the US returned to healthy growth of 25%. This is despite a weak allergy season in the US which peaked early. Importantly, the successful roll-out of Dymista in Europe continues. We recorded strong market share development in several European countries, including Germany, Italy and the Nordics. As expected, Tambocor in France and Astepro in the US are still on the decline due to generic competition, but not at the same pace as in Q1 and we expect the decline to continue to level out throughout the rest of the year. An important contributor to growth in the quarter is Elidel which grew by 64% in Q2. We are now back to normal supply and stock levels.

The Cx/OTC product area (non-prescription products) reached SEK 1,833 million in sales in Q2, corresponding to 106% growth (CER) compared to Q2 last year. On a pro forma organic basis, growth was 1%. While the full impact of the new CB12 marketing campaign has yet to materialize, several of the former Rottapharm products such as Legalon 25%, Armolipid 59% and Saugella 10% performed strongly.

I am also pleased to see that EBITDA continues to strengthen, reflecting the improved sales and lower operating costs resulting from the measures that have been taken. All in all, this resulted in record high quarterly EBITDA, up 74% (CER). Furthermore, the EBITDA margin expanded 7%-points to 34.5% in the quarter.

We are on the right track and the second quarter is a testament to our progress. However, we will need to take into account the fact that our business is seasonal, due in part to wholesaler buying patterns. Our focus for 2015 is unchanged – ­exploit synergies, generate cash flow and build our M&A pipeline. We maintain our guidance for 2015.

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 July 23, 2015 at 8:00 AM.


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