Recipharm reports record sales increase in second quarter of 2016

New contracts and acquisitions have a positive impact during the first half of the year

Swedish CDMO Recipharm recorded an all-time high sales increase of 42% in the second quarter and for the first time had sales in excess of SEK1bn, even without the SEK231m contribution from recent acquisitions.

Operating profit reached SEK150m (SEK98m) and profit after tax was SEK84m, giving a net margin of 6.8%.

Sales growth during the second quarter, excluding acquisitions, was 16% in local currencies, helped by a new contract in Kayserberg, France.

EBITDA for the quarter increased 54% to SEK240m and EBITDA margin increased sequentially to 19.4%, the highest quarterly margin ever for Recipharm. Excluding acquisitions completed during the last 12 months, EBITDA still reached an all-time high for a quarter.

The implementation of a cost and efficiency programme in the firm's Swedish operations also started to have a positive impact on EBITDA in this quarter, the firm said.

The firm's sales increased in the first half by 27%, to SEK2.23bn (SEK1.74bn). Operating profit amounted to SEK218m (SEK198m). Profit after tax was SEK108m (SEK189m: last year included a financial capital gain of SEK46.6m), giving a net margin of 4.9% (10.9% in the previous year).

Thomas Eldered: Completed acquisitions performed according to our expectations

Chief Executive Thomas Eldered said during the second quarter Recipharm continued to take important steps to strengthen its position and to support achievement of its long-term targets.

'Completed acquisitions during the quarter of Indian Nitin Lifesciences, Swedish Kemwell and US Cirrus Pharmaceuticals, together with Italian Mitim, acquired in February, performed according to our expectations and integration activities progressed in-line with plan,' he said.

'Together with the acquisition of Kemwell’s pharmaceutical business in India, with expected authority approvals in Q4 this year, we have now strengthened our synergistic business model and will align development and manufacturing services globally.'

He said the firm continues to make expansion investments in the Sterile Liquids segment, to meet the strong demand it anticipates for its lyophilisation services and blow-fill-seal technology.

Going forward, Eldered said he expects the firm's growth-driving strategies, including executing on further acquisition opportunities, to continue to deliver.

'The markets we operate in remain competitive but at the same time providing both growth and many opportunities,' he said. 'With our global reach and attractive value proposition to our customers I’m confident that we will reach our long-term growth targets set to 2020.'

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