Interim Report, January-September 2014
January-September 2014
- Net sales reached SEK 10,198 million (9,664), corresponding to an increase of 6% and an organic growth[1] of 3% compared to previous year.
- EBITDA amounted to SEK 2,978 million (2,719), corresponding to a 29.2% margin (28.1).
- Operating profit amounted to SEK 1,283 million (1,087).
- Profit after tax amounted to SEK 677 million (547).
- Earnings per share reached SEK 2.24 (1.82).
- Cash earnings per share amounted to SEK 6.34 (6.48).
- Forecast for full-year 2014
“Meda expect sales for full-year 2014 to reach SEK 15 billion and that the EBITDA margin will improve slightly compared to full-year 2013” (excluding integration costs and other costs associated with the acquisition of Rottapharm)
Third quarter 2014
- The Group’s net sales reached SEK 3,356 million (3,186), corresponding to an increase of 5% and an organic growth[1] of 1% compared to the previous year.
- EBITDA was SEK 975 million (874), yielding a 29.1% margin (27.4).
- Operating profit totaled SEK 395 million (322).
- Profit after tax amounted to SEK 174 million (147).
- Earnings per share reached SEK 0.58 (0.48).
- Cash earnings per share amounted to SEK 2.20 (2.67).
| 1) Organic growth: Sales growth adjusted for currency effects, acquisitions, disposals, discontinued products and revenues from the cooperation agreement with Valeant. |
CEO statement
On October 10 Meda accomplished its largest acquisition so far – Rottapharm – and in so doing paved the way for continued growth. The integration process has begun and is progressing as planned. Despite the focus on the Rottapharm acquisition, the organization has once again succeeded in delivering a good quarter in which the EBITDA margin increased to 29%, compared with 27% for the same period last year.
Dymista performed well in the third quarter. The exclusivity period that is granted by the Food and Drug Administration in the US to a patented drug expires for Dymista in May 2015. We are therefore seeing increased activity among generic companies with regard to registration applications for copies of Dymista. Meda will defend Dymista and its intellectual property rights with full force. We believe that Dymista has robust patent protection in the US, which extends up until 2026.
Growth for Emerging markets abated in the third quarter, partly owing to normal fluctuation but also as a result of the interruption in production of Elidel, which is affecting performance in the Middle East, for example. Russia displayed weaker development in the third quarter following an extremely strong second quarter. Markets that performed particularly well during the quarter include Turkey, Mexico, South Africa and the Balkans.
The US continues to struggle with price pressure and generic competition on the older product portfolio and Astepro. Despite the positive trend for Dymista, organic growth amounted to -9% in Q3. This decline is largely related to Astepro, which continued to feel the impact of generics in the market.
Western Europe has experienced a healthy trend during the quarter. Organic growth was 4%, fueled by Sweden, Germany and the UK. Dymista and SB12 are the main contributors to this positive development. We are confident about the trend in southern areas of Europe such as Spain and Portugal, which are displaying stable growth.
Since the second quarter there have been production problems with Elidel, which have affected both sales and organic growth. As already announced we have started to shift over production to our own site in Merignac, and production has resumed in October. This means that we have gradually begun supplying the market with Elidel, but it is still too early to assess when we will be able to deliver at full capacity.
The acquisition of Rottapharm was completed on 10 October after the necessary permits were obtained from the competition authorities. The organization is now focused on implementing integration plans at all levels in the company, and we are determined to deliver the established synergy objectives for the combined company.
Following consolidation of the Rottapharm acquisition, we expect sales for full-year 2014 to reach SEK 15 billion and that the EBITDA margin will improve slightly compared to full-year 2013 (excluding integration costs and other costs associated with the acquisition of Rottapharm).
Dr. Jörg-Thomas Dierks
CEO
Webcasted presentation of the report on November 6 at 10:30 a.m.
The presentation can be accessed at www.meda.se/sv/investerare, where a recorded version will also be available until release of the next interim report.
For further inquiries, please contact:
Paula Treutiger, VP Corporate Communications & Sustainability, paula.treutiger@meda.se, +46 733-666 599.
Meda AB discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication on November 6, 2014, at 08:00 CET.
