2018-02-22 07:45:00

Recipharm AB publishes its report for the fourth quarter and full year 2017

October - December 2017
  • Net sales amounted to SEK 1,403 million (1,333), an increase of 5.3%
  • EBITDA amounted to SEK 226 million (229) corresponding to an EBITDA margin of 16.1% (17.2)
  • Operating profit (EBIT) amounted to -160 million (121). Adjusted for non-recurring items EBIT amounted to SEK 80 million
  • Profit after tax amounted to SEK -183 million (76) corresponding to a net margin of -13.0% (5.7)
  • Earnings per share amounted to SEK -2.96 (1.09) before dilution and SEK -2.96 (1.09) after dilution. Adjusted for non-recurring items earnings per share amounted to SEK 0.83.
  • Recipharm announced the intention to end operations in two facilities in Sweden. As a consequence, non-recurring items had a SEK 240 million negative impact on EBIT and earnings before tax
January - December 2017
  • Net sales amounted to SEK 5,332 million (4,678), an increase of 14.0%
  • EBITDA amounted to SEK 730 million (749) corresponding to an EBITDA margin of 13.7% (16.0)
  • Operating profit (EBIT) amounted to -9 million (384). Adjusted for non-recurring items EBIT amounted to SEK 231 million
  • Profit after tax amounted to SEK -160 million (196) corresponding to a net margin of -3.0% (4.2)
  • Earnings per share amounted to SEK -2.70 (3.32) before dilution and SEK -2.70 (3.32) after dilution. Adjusted for non-recurring items earnings per share amounted to SEK 1.10.
  • Net debt to Equity was 0.7 (0.4)
  • Non-recurring items had a SEK 240 million negative impact on EBIT and earnings before tax
  • The Board proposes no dividend for 2017 (1.50)

Key figures            
Oct -  Jan
Dec - Dec
SEK million 2017 2016 Change 2017 2016 Change in %
in %
Net sales 1,403 1,333 +5.3 5 332 4,678 +14.0
EBITDA1/ 226 229 -1.5 730 749 -2.6
EBIT adjusted1/ 80 121 -34.2 231 384 -39.8
EBIT1/ -160 121 -231.3 -9 384 -102.5
EBITDA margin 16.1 17.2 13.7 16.0
Earnings per 0.83 1.09 1.10 3.32
share adj.1/
Earnings per -2.96 1.09 -2.70 3.32
Return on 1.6 5.0
equity, adj.
Return on -3.2 5.0
equity (%)1/
Equity per 75.7 75.7
share, adj.1/
Equity per 71.9 75.7
share 1/
Equity/assets 43.4 52.2
ratio, adj.
Equity/assets 41.5 52.2
ratio (%)1/
Net debt1/ 3,422 1,894
Net debt to 0.7 0.4
Net debt to 4.7 2.5

1/ APM: Alternative Performance Measures

Thomas Eldered, CEO:

Positive ending of eventful year
"We had a positive finish of the year, a year characterized by solid underlying demand but also delays in important projects and other issues. In the fourth quarter we recorded all-time high sales at SEK 1 403 million. While sales excluding currency and acquisition effects were flat, Development & Technology showed double-digit organic growth. All our major capex projects progressed without significant issues during the quarter. Our financial performance, excluding non-recurring items, stabilized through the quarter and the EBITDA-margin at 16.1 per cent was in line with our long-term overall financial target.

In the Sterile Liquids segment, we saw expected effects from ongoing capacity expansion projects as well as continued short supply of an important raw material. Despite this we managed to achieve flat sales and only a minor negative effect on EBITDA compared to last year, to some extent due to positive phasing effects.

Within the Solids and Others segment we have recorded several new contracts during the quarter, including the new supply agreement with Roche from our new facility in Leganés, Spain. The decision to end operations in two Swedish facilities in this segment caused an accrual of SEK 240 million for related non-recurring costs. This amount includes a provision for onerous contracts of SEK 64 million, excess leases of SEK 47 million and fixed asset impairment of SEK 35 million. Sales from these two units have gradually decreased and caused the negative organic growth for the quarter of 5 per cent in the Solids and Others segment. Also, EBITDA was negatively affected by the performance in these units.

In the Development & Technology segment we saw organic growth of 15 per cent as we continue to focus on supporting sales from our IP and product rights as well increasing our efforts in development services. We delivered an organic increase in EBITDA of 69 per cent and the EBITDA margin was 26 per cent. Part of the improvement was due to temporary supply shortages for competitors.

Operating cash flow was good but decreased SEK 10 million due to year-end increases in working capital. Capital expenditures was SEK 199 million with a significant part being expansion in lyophilisation and blow-fill-seal capacity and serialisation capability. These expansion projects progressed well during the quarter, and all have yet to deliver sales. Our net debt to equity ratio, now at 0.7, is still below our target of maximum 0.8.

The Board will propose no dividend to the AGM. The Board believes that it is prudent to follow our dividend policy. However, the Board expresses confidence in our ongoing activities, and has the ambition to return to dividends in line with increased profit going forward.

We have made heavy investments to take leadership in selected markets and we continue to work hard to deliver on our strategies to meet our targets. The customer response we see to our value proposition is increasingly positive and entering 2018 we are positioned to benefit from attractive trends in the market as well as opportunities in the industry.

Our expansion projects will start to deliver towards the end of the first quarter and we will see a gradual ramp-up during the next 4-6 quarters. As projects finish we will see less capex and supported by increased profit, leverage will gradually decrease. Ending operations in the two Swedish facilities is painful. However, with the addition of a modern well invested facility in Spain and competitive operations in India we will get a streamlined and efficient structure, well suited to support our demanding customers' needs globally. I am confident that we will reach our SEK 8 billion sales target by 2020 and have an EBITDA-margin target of at least 16 per cent."

The complete Full Year report is attached through the link at the end of the press release.

The company invites investors, analysts and media to a web conference (in English) on 22 February at 10:00 am CET, where CEO Thomas Eldered and CFO Henrik Stenqvist will present and comment on the report as well as answer questions.  

To participate in the web conference, please use the below link:


From Sweden: +46 8 566 426 51
From Denmark: +45 354 455 77
From Norway: +47 235 00 243
From the UK: +44 333 300 08 04
From Germany: +49 691 380 34 30
From Switzerland: +41 225 809 034
From France: + 33 170 750 711
From Portugal: +351 210 609 105
From India: +91 226 187 51 27
From Italy: +39 023 601 38 21
From Israel: +972 372 076 79
From the USA: +1 631 913 14 22 

Pin code for participants:

For more information, please visit www.recipharm.com or contact:
Thomas Eldered, CEO, +46 8 602 52 00
Henrik Stenqvist, CFO, ir@recipharm.com,+46 8 602 52 00

This information is information that Recipharm AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. This information was submitted for publication on 22 February 2018 at 07:45 am CET.  

About Recipharm
Recipharm is a leading Contract Development and Manufacturing Organisation (CDMO) in the pharmaceutical industry employing around 5 000 employees. Recipharm offers manufacturing services of pharmaceuticals in various dosage forms, production of clinical trial material and APIs, and pharmaceutical product development. Recipharm manufactures several hundred different products to customers ranging from big pharma to smaller research and development companies. Recipharm's turnover is approximately SEK 5.0 billion and the Company operates development and manufacturing facilities in France, Germany, India, Israel, Italy, Portugal, Spain, Sweden, the UK and the US and is headquartered in Stockholm, Sweden. The Recipharm B-share (RECI B) is listed on Nasdaq Stockholm.
For more information on Recipharm and our services, please visit www.recipharm.com 

Recipharm AB (publ)

Corporate identity number 556498-8425
Address Box 603, SE-101 32 Stockholm, Sweden, Telephone +46 8 602 52 00

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