Table Of ContentiMProviNG LiveS...
Hikma PHarmaceuticals Plc
annual rePort 2012
Hikma PHarmaceuticals Plc annual rePort 2012
who we are...
Hikma PHarmaceuticals Plc
Since hikma was founded, it has rapidly
grown to become a successful multinational
pharmaceutical group with operations across
the Middle east and North africa, the United
States and europe. our business has a broad
product portfolio, selling a wide range of branded
and non-branded generics as well as innovative,
patented products under license. our robust
and diversifed business model has quality at
the heart of everything we do and will enable us
to maintain our track record of strong growth.
For more inFormation, visit our website
www.hikMa.coM
how & where we are 2012 contents
improving Lives
improving Lives. overview
strengthening our 02 / how we performed in 2012
leading position 04 / Chairman’s statement
in the mena region
strategiC review
See page 12
07 / BUsiness modeL
08 / groUp at a gLanCe
improving Lives...
10 / Chief exeCUtive offiCer’s review
Developing our global 17 / Key performanCe indiCators
product range in growing
therapeutic areas
BUsiness and
finanCiaL review
See page 18
21 / Branded
improving Lives... 26 / injeCtaBLes
30 / generiCs
extending our 34 / groUp performanCe
reach and diversity 38 / prinCipaL risKs and UnCertainties
through partnerships
See page 24 sUstainaBiLity
41 / e nsUring the sUstainaBiLity
of oUr BUsiness
improving Lives...
increasing the scale
of our�specialty Corporate governanCe
injectables business
56 / aBoUt this governanCe report
58 / governanCe report
See page 28 72 / Committee reports
82 / remUneration report
improving Lives... 104 / direCtors’ responsiBiLities
leveraging our
expertise and capacity
finanCiaL statements
in the us market
112 / independent aUditor’s report
113 / ConsoLidated finanCiaL
See page 32 statements
118 / n otes to the ConsoLidated
finanCiaL statements
improving Lives... 157 / Company finanCiaL statements
Building on our world-class 160 / n otes to the Company finanCiaL
manufacturing and statements
aPi sourcing capabilities 164 / sharehoLder information
iBC / p rinCipaL groUp Companies –
advisers
See page 52
Hikma PHarmaceuticals Plc / annual rePort 2012 1
how we performed in 2012
another
sUCCessfUL year
hiKma deLivered exCeLLent
revenUe and earnings growth
2012 2007–12 2012
rEvENUE rEvENUE CAgr ADjUSTED OPErATINg MArgIN
$1,108.7m +19.8% 17.5%
2012 2012 2012
PrODUCTS MArkETED OPErATINg CASH fLOw EMPLOyEES
826 $182.2m 6,649
2012 REVENUE BY SEGMENT (%) 2012 REVENUE BY REGION (%)
4 1. Branded 47.7% 1. MENA* 55.8%
3 1 2. Injectables 42.4% 3 1 2. US 36.1%
3. Generics 9.4% 3. Europe 8.1%
and the rest
4. Others 0.5% of the world
2 2
* Middle East and North Africa region (“MENA”)
2 HIkMA PHArMACEUTICALS PLC / ANNUAL rEPOrT 2012
2012 highLights
ADJUSTED1 OPERATING PROFIT
REVENUE ($ MILLION) ($ MILLION)
+20.8% +32.9%
12 1,108.7 12 193.8
11 918.0 11 145.8
PROFIT ATTRIBUTABLE TO
EBITDA2 ($ MILLION) SHAREHOLDERS ($ MILLION)
+35.9% +25.2%
12 225.2 12 100.3
11 165.7 11 80.1
DIVIDEND PER SHARE (CENTS) EARNINGS PER SHARE (CENTS)
+23.1% +23.8%
12 16.0 12 51.1
11 13.0 11 41.3
1 Before the amortisation of intangible assets (excluding software) and exceptional items
2 earnings before interest, tax, depreciation and amortisation
Hikma PHarmaceuticals Plc / annual rePort 2012 3
Chairman's statement
an exCeLLent
performanCe
we deLivered very strong growth in 2012,
with revenUe Up 21% and eps Up 24%
samih darwazah
Non-Executive Chairman
4 HIkMA PHArMACEUTICALS PLC / ANNUAL rEPOrT 2012
TOTAL SHAREHOLDER
RETURN FROM
JANUARY 2007 (%) HIKMA PHARMACEUTICALS PLC
200
+123% 150 F
PTHSAER 3M5A0CEUTICALS &
BIOTECHNOLOGY
100
50
0
-50 FTSE 250
-100
JAN 07 JAN 08 JAN 09 JAN 10 JAN 11 JAN 12 JAN 13
our robust business model continues to our us oral Generics business performed client leadership award for our sustainable
drive high growth as we leverage our diverse below our expectations in 2012, due to development initiatives, excellence in
geographic presence, broad product portfolio ongoing compliance work at our eatontown corporate governance and commitment to
and high quality manufacturing facilities. facility. towards the�end of the year, the Board local communities. We were also awarded
our business in mena grew by over initiated a review of the strategic options for Healthcare company of the Year by arabian
20% in 2012. We are seeing the results of this business, which has now been completed. Business achievement awards, where we
our steadfast commitment to the region, Following this review, remediation of the were chosen from among 900 candidates.
demonstrated by the ongoing investment eatontown facility remains the priority, as this award was presented in recognition
we�have been making in these markets. does�bringing the facility back to pro�tability. of�Hikma’s performance and growth as
We�continue to be the leading regional at the same time, we have initiated strategic a�listed company.
manufacturer in mena and we remain focused discussions with third parties to evaluate the Board is recommending a �nal
on strengthening our presence in our key alternative options for the business. dividend of 10.0 cents per share (approximately
markets through capital expenditure and as part of our strategy of investing in� 6.7 pence per share), which will make a
acquisitions. our investment has continued in our people and in recognition of the importance dividend for the full year of 16.0 cents per
2013 with the acquisition of the egyptian of having highly trained and dedicated share, an increase of 23% on 2011.
company for Pharmaceuticals and chemical employees, we are focused on ensuring the�proposed �nal dividend will be paid on
industries (“ePci”), which adds new products that middle management take on greater 23�may�2013 to shareholders on the register
and manufacturing capabilities in egypt. responsibility and authority. in 2012, we on 19�april 2013, subject to approval by
During 2012, we made excellent launched a leadership training programme for shareholders at the annual General meeting.
progress developing our global injectables middle managers with the american university From 1 January 2007 through to the end
business. We achieved strong revenue growth of Beirut (auB) to provide them with the of 2012, we have delivered a total shareholder
and delivered transformational improvements knowledge and skills required for current and return of 123%. We are delighted with this
to our manufacturing operations, enabling a future positions within Hikma. performance, which exceeds that of the
step-change in the pro�tability of this business. as we train and empower our managers, Ftse 250 index and the Ftse Pharmaceutical
We maintained our track record of excellent we ensure that Hikma’s values continue index, which gave a total shareholder return
regulatory compliance in our injectables to be well communicated and understood of 31% and 41% respectively, over the
facilities and proved ourselves to be a reliable by all of our people. During 2012, the Board same period.
supplier of high quality injectable products initiated a�comprehensive review of our our ongoing commitment to our mena
during a challenging time in the us market. code of conduct. We have since adopted business and the investment we have made
We are encouraged by the prospects for the and published an enhanced code that in�our global injectables business means we
global injectables market and�believe our demonstrates our commitment to upholding are�well positioned to drive continued growth
injectables business is well positioned for strong the highest standards of integrity and in 2013 and beyond.
growth over the medium and long-term. transparency across the Group.
i was extremely pleased that our commitment
to our local businesses and sustainability was
recognised when we received the 2012 iFc
samih darwazah
Non-Executive Chairman
Hikma PHarmaceuticals Plc / annual rePort 2012 5
strategiC
review
a diversified BUsiness modeL
and proven strategy for
deLivering growth and
Creating sharehoLder vaLUe
6 HIkMA PHArMACEUTICALS PLC / ANNUAL rEPOrT 2012
strategiC review
BUsiness modeL
oUr aim is to improve the Lives of oUr patients
aCross oUr gLoBaL marKets
We achieve this through our robust and diversi�ed business model. By selling both innovative and generic
products�and establishing a unique and differentiated market position, we are able to drive strong and
sustainable�growth, increase patients’ access to high quality, affordable medicines and create shareholder value.
how we Create vaLUe
our aim is to... We acHieVe tHis tHrouGH our... We aim to DeliVer...
HiGH QualitY, aFForDaBle Generics
HiGH QualitY manuFacturinG Patient innoVatiVe in-licenseD ProDucts
BeneFits
BroaD r&D caPaBilities ProDucts tailoreD to Patient neeDs
improve
Lives eXPerienceD sales & marketinG teams
aCross
oUr
stronG PartnersHiPs WitH licensors
gLoBaL
marKets
DeDicateD emPloYees sustainaBle GroWtH
estaBlisHeD local Presence BFiennaenFcitisal stronG ProFitaBilitY
sHareHolDer Value
Hikma PHarmaceuticals Plc / annual rePort 2012 7
groUp at a gLanCe
what we do
& where
we deveLop, manUfaCtUre and marKet a Broad range of
Branded and non-Branded generiC pharmaCeUtiCaL prodUCts
aCross the middLe east and north afriCa, the United states
and eUrope. we are aLso a Leading LiCensing partner in the
mena region. oUr operations span over 45 CoUntries and are
CondUCted throUgh three BUsiness segments
COrE BUSINESS DIvISION: gEOgrAPHICAL ArEA:
US
generiCs
TOP PrODUCTS:
SELLINg OrAL gENErIC
PrODUCTS ACrOSS THE US Amoxicillin
Doxycycline
Isosorbide mononitrate
Methocarbamol
Prednisone
2012 rEvENUE: LUoSn ogr-aslt agnednienrgic ps rmesaernkceet in the
$
–3130.30%.7m faoncdu hs iognh qseuravliictey mlevaen lus facturing
Strong emphasis on niche products,
including controlled substances
Leveraging our effcient and lower
fcaocsitl itUieSs fiDn Ajo ardpapnro avned Smaaundui fAarcatubriaing
M ore information see page 30
41 products in 103 dosage
View our business model on page 7 forms and strengths1
8 HIkMA PHArMACEUTICALS PLC / ANNUAL rEPOrT 2012
