Hikma Pharmaceuticals PLC (‘Hikma’ or ‘Group’), the multinational pharmaceutical company, today reports its audited results for the year ended 31 December 2024.
Riad Mishlawi, Chief Executive Officer of Hikma, said:
“It’s been another strong year for Hikma with double digit revenue growth, increased profits and a resilient margin. We continued to invest in the business to support our future progress, with a strategic acquisition alongside new partnerships and agreements. This momentum combined with our diversified portfolio, leading market positions and increasing investment in R&D, underpin our positive outlook for 2025 and confidence in the future.”
| Reported results (statutory) | 2024$ million | 2023$ million | Change | Constant currencychange |
| Revenue | 3,127 | 2,875 | 9% | 9% |
| Operating profit | 612 | 367 | 67% | 71% |
| Profit attributable to shareholders | 359 | 190 | 89% | 98% |
| Cashflow from operating activities | 564 | 608 | (7)% | – |
| Basic earnings per share (cents) | 162 | 86 | 88% | 98% |
| Total dividend per share (cents) | 80 | 72 | 11% | – |
| Core results2 (underlying) | 2024$ million | 2023$ million | Change | Constant currency1change |
| Core revenue | 3,156 | 2,875 | 10% | 10% |
| Core operating profit | 719 | 707 | 2% | 4% |
| Core EBITDA2 | 824 | 810 | 2% | 4% |
| Core profit attributable to shareholders | 495 | 492 | 1% | 5% |
| Core basic earnings per share (cents) | 224 | 223 | 0% | 4% |
STRONG FINANCIAL PERFORMANCE
· Double-digit Group core revenue growth, ahead of expectations
o Group core revenue up 10%, including contribution from Xellia acquisition (9% organic). Reported Group revenue up 9%
o Core revenue up in all three business segments – Injectables up 10%, Branded up 8% and Generics up 11%, supported by breadth of portfolio and recent launches
o Growth in all regions, led by North America
· Core Group operating profit up 2% to $719 million at a margin of 22.8% (2023: 24.6%)
o Injectables core operating profit up 5% with margin of 35.3% (2023: 36.9%). Excluding Xellia, Injectables core operating margin was 35.7%. Branded core operating profit up 11% with margin of 24.6% (2023: 23.8%)
o Generics core operating profit down 11% with margin of 16.4% (2023: 20.5%), reflecting the expected higher royalties for our authorised generic of sodium oxybate
o Group reported operating profit up 67%, reflecting an impairment reversal in our Generics business and lower operating profit in the previous year resulting from the impairment of our Sudan business and a legal settlement provision
· Strong cashflow from operating activities of $564 million (2023: $608 million)
o Good operating performance slightly offset by increased trade receivables reflecting strong sales towards the end of the year
· Robust balance sheet and high returns
o Leverage at 1.4x net debt3 to core EBITDA (31 December 2023: 1.2x)
o Return on average invested capital of 16.9%4
o Full-year dividend of 80 cents per share, up 11%, reflecting confidence in our future prospects
CONTINUED STRATEGIC PROGRESS TO DRIVE FUTURE GROWTH
· Invested to further expand and diversify portfolio
o Acquired Xellia Pharmaceuticals’ US finished dosage form business, further strengthening the Injectables business
o Agreed to acquire 17 Takeda brands licensed to Hikma, enhancing future Branded profitability
o Strengthened R&D, manufacturing and commercial capabilities
· Signed new agreements and partnerships
o Expanded our Generics contract manufacturing (CMO) business with a significant agreement with a global pharmaceutical company. Expected to start contributing meaningfully in 2027
o Entered into exclusive commercial partnership with Emergent BioSolutions in January 2025 for Kloxxado® (naloxone HCl 8mg) in the US to increase patient access to this lifesaving medicine
· Strong pipeline supporting consistency of new launches
o 132 new product launches across the business
o Launched liraglutide injection in the US, the first approved ANDA for a generic GLP-1 referencing Victoza®, helping improve patient access to this class of medications
STRONG 2025 GROUP OUTLOOK
· Group revenue growth of 4% to 6%
· Group core operating profit in the range of $730 million to $770 million, after an increase in investment in R&D of around 20% in 2025
Further information:
A pre-recorded presentation will be available at www.hikma.com at 07:00am GMT. Hikma will also hold a live Q&A webinar at 9:00am GMT, and a recording will be made available on the Company’s website.
To join via conference call please dial:
United Kingdom (Local): +44 20 3936 2999
United Kingdom (Toll-Free): +44 800 358 1035
United States (Local): +1 845 213 3398
United States (Toll-Free): +1 855 9796 654
Access Code: 292359
STRATEGIC REVIEW
It has been another strong year for Hikma. Group core revenue growth of 10% (9% reported Group revenue growth) was ahead of our upgraded expectations and Group core operating profit of $719 million was in line with upgraded guidance.
We are the seventh largest supplier of generic medicines in the US5, and the third largest supplier of generic injectable products by volume in that market6. We also maintained our position as the second largest pharmaceutical company, by sales, in the MENA region7.
We made excellent strategic progress during the year, with momentum building across our three businesses. Continued investment in R&D and business development is strengthening our differentiated pipeline and we are enhancing our manufacturing offering and commercial presence.
We also remain focused on the sustainability topics that are most material to our business, as well as those that are most relevant to our stakeholders. During 2024 we conducted a double materiality assessment, which will inform future updates to our sustainability framework and strategy.
Injectables
Our Injectables business, which manufactures and supplies generic injectable and specialty medicines to hospitals across North America, Europe and MENA, had another successful year. We delivered an impressive top-line performance, with strong revenue growth in each of our three geographies, and core operating profit growth for the division of 5%.
During the year we were successful in acquiring the US finished dosage form business of Xellia Pharmaceuticals. This acquisition will diversify and enrich our injectables portfolio and pipeline, expand our US-based manufacturing capacity, bringing complex manufacturing technologies, and support the long-term growth of the Injectables business.
We continued to broaden and diversify our portfolio, with 89 new launches across the business, including 12 in the US. On top of this, we added products through the Xellia acquisition, which also enhanced our pipeline. With our new R&D centre in Zagreb complementing our existing footprint, we are well positioned to develop more complex products over the medium term. We are also enhancing our differentiation through partnership, one example in 2024 being the launch of our first GLP-1 product in December, liraglutide.
Our MENA Injectables business remains a solid contributor to growth, with both biosimilars and our own portfolio of medicines contributing to the strong performance. In Europe, our own products grew 20% in 2024. We benefitted from our recent entries into France, the UK and Spain and our growing portfolio of products, which enabled us to respond to market shortages.. We also had a strong year for new product submissions and approvals, supporting future growth. Our CMO business performed in line with expectations, accelerating in the second half of 2024. We will continue to pursue CMO opportunities where we see value for both us and our strategic partners.
Branded
Our Branded business, which supplies branded generics and in-licensed patented products across the MENA region, had another very strong year with good growth across most of our markets. We grew revenue 8% with a strong core operating margin of 24.6%.
We have a unique business in the region, leveraging our global expertise to meet local market needs. Over the past few years, we have been investing in enhancing our pipeline and portfolio, focusing on launching more complex and first-to-market products that are tailored to local needs, such as oncology products and medicines used to treat chronic illnesses. This has been driving our growth and supporting our strong margins. We continue to make great progress and we are gaining market share in key therapeutic areas, including in diabetes and multiple sclerosis.
Generics
Generics, which supplies oral, respiratory and other generic and specialty products to the North American retail market, had an excellent year, generating over $1 billion in revenue for the first time, with margins in line with our expectations. We are delivering growth in our more complex products, we increased our market share in sodium oxybate, and our leading nasal spray franchise performed well in 2024.
Generics core operating profit was lower than the exceptionally strong result we delivered in 2023 due to the expected increase in royalties on our authorised generic of sodium oxybate.
We have strengthened our teams across this business, including the appointment of Hafrun Fridriksdottir, our new President of Generics, and a new head of Generics R&D with significant respiratory experience. With their expertise, we are sharpening our focus on R&D to ensure we are investing in the right products and executing projects effectively.
We are also working to maintain and enhance our manufacturing strength. Importantly, we are delivering our strategy to grow our CMO offering for this business. We signed a new contract in 2024 with a global pharmaceutical company, which we expect to start contributing meaningfully in 2027. This will help support medium-term revenue growth and profitability for Generics, while improving utilisation of our Columbus, Ohio facility.
We have also focused on maximising the potential of our specialty products and post-year end, signed a partnership agreement with Emergent BioSolutions to market our Kloxxado® naloxone nasal spray. This partnership combines Hikma’s excellent nasal spray manufacturing capabilities with Emergent’s well-established naloxone HCl nasal spray commercial expertise and strong stakeholder engagement.
2025 Outlook
We are confident that we are well placed to deliver another year of growth in 2025.
We expect Group revenue to grow in the range of 4% to 6%. We expect core operating profit to be in the range of $730 million to $770 million, after an increase in investment in R&D of around 20% in 2025 across our three segments to support the development of our global pipeline, underpinning medium to long term growth.
We expect Injectables revenue to grow in the range of 7% to 9% and for core operating margin to be in the mid-30s, reflecting the full year impact of the Xellia acquisition and our evolving product and geographic mix. We will continue to launch new products, leverage our high-quality manufacturing capabilities and expand in recently entered markets.
We expect Branded revenue to grow 6% to 7% in constant currency. We expect core operating margin to be close to 25%. We remain focused on growth across the MENA region and will continue to launch products and sign partnerships, bringing more chronic medications to patients.
We expect Generics revenue to be broadly flat, with a good performance from some of our more differentiated products offsetting price erosion on the base business. We will be investing more into R&D during 2025 to ensure the pipeline is well placed to support medium to long term growth and are pleased to be able to guide to core operating margin for Generics to be around 16%.
We expect Group core net finance expense to be between $90 million to $95 million, reflecting the current interest rate environment and an increase in borrowing related to the Xellia acquisition. We expect the core effective tax rate to be around 22%.
We expect Group capital expenditure to be in the range of $170 million to $190 million.
FINANCIAL REVIEW
The financial review set out below summarises the reported and core8 performance of the Hikma Group and our three main business segments, Injectables, Branded and Generics for the year ended 31 December 2024.
Group
| 2024$ million | 2023$ million | Change | Constant currencychange | |
| Revenue | 3,127 | 2,875 | 9% | 9% |
| Core revenue | 3,156 | 2,875 | 10% | 10% |
| Gross profit | 1,415 | 1,390 | 2% | 2% |
| Gross margin | 45.3% | 48.3% | (3.0)pp | (3.2)pp |
| Core gross profit | 1,448 | 1,407 | 3% | 3% |
| Core gross margin | 45.9% | 48.9% | (3.0)pp | (3.2)pp |
| Operating profit | 612 | 367 | 67% | 71% |
| Operating margin | 19.6% | 12.8% | 6.8pp | 7.3pp |
| Core operating profit | 719 | 707 | 2% | 4% |
| Core operating margin | 22.8% | 24.6% | (1.8)pp | (1.3)pp |
| Core EBITDA | 824 | 810 | 2% | 4% |
| Core EBITDA margin | 26.1% | 28.2% | (2.1)pp | (1.6)pp |
Group core revenue was up 10% reflecting strong growth across all three businesses. Excluding the Xellia acquisition, Group core revenue grew 9%, ahead of our guidance range of 6% to 8%. Group reported revenue, which is stated after a $29 million provision relating to rebate adjustments following a change in prior years estimates in the US, was up 9%.
Group core gross profit grew 3% and core gross margin was 45.9%. The expected reduction in Generics profitability relating to higher royalties on our authorised generic of sodium oxybate was more than offset by a strong performance across the broader Generics portfolio as well as Injectables and Branded.
Group reported operating expenses were $803 million (2023: $1,023 million). Group core operating expenses were $729 million (2023: $700 million).
Reported selling, general and administrative (SG&A) expenses were $671 million (2023: $767 million). This change reflects the provision taken in 2023 related to a legal settlement. Core SG&A expenses were $568 million (2023: $544 million), up 4%, reflecting higher employee benefits, legal expenses and continued investment in sales and marketing in the US.
Reported and core research and development (R&D) expenses were $141 million (2023: $149 million), representing 4.5% of Group core revenue (2023: 5.2%).
Reported other net operating income was $11 million (2023: $75 million expense). This change primarily reflects the impairment reversal related to our complex respiratory portfolio in 2024, as well as the impact in 2023 relating to the impairment charge taken on our Sudanese business. Core other net operating expenses were $18 million (2023: $4 million), primarily comprising foreign exchange-related costs in Egypt.
Group reported operating profit grew 67% and Group core operating profit increased by 2%, with a core operating margin of 22.8%.
Group core revenue by business segment
| 2024$ million | 2023$ million | |||
| Injectables | 1,324 | 42.0% | 1,203 | 41.8% |
| Branded | 769 | 24.4% | 714 | 24.8% |
| Generics | 1,037 | 32.9% | 937 | 32.6% |
| Others | 26 | 0.8% | 21 | 0.7% |
| Total | 3,156 | 2,875 | ||
Group core revenue by region
| 2024$ million | 2023$ million | |||
| North America | 1,940 | 61.5% | 1,749 | 60.8% |
| MENA | 985 | 31.2% | 909 | 31.6% |
| Europe and ROW | 231 | 7.3% | 217 | 7.5% |
| Total | 3,156 | 2,875 | ||
Injectables
| 2024$ million | 2023$ million | Change | Constant currency change | |
| Revenue | 1,306 | 1,203 | 9% | 9% |
| Core revenue | 1,324 | 1,203 | 10% | 10% |
| Gross profit | 668 | 655 | 2% | 2% |
| Gross margin | 51.1% | 54.4% | (3.3)pp | (3.3)pp |
| Core gross profit | 690 | 657 | 5% | 5% |
| Core gross margin | 52.1% | 54.6% | (2.5)pp | (2.6)pp |
| Operating profit | 371 | 358 | 4% | 4% |
| Operating margin | 28.4% | 29.8% | (1.4)pp | (1.3)pp |
| Core operating profit | 468 | 444 | 5% | 6% |
| Core operating margin | 35.3% | 36.9% | (1.6)pp | (1.4)pp |
Injectables core revenue grew 10% in 2024, benefiting from our broad portfolio across the three geographies, contribution from the Xellia acquisition and recent launches, including liraglutide injection, our generic GLP-1 product in the US. Excluding the Xellia impact, organic core revenue growth was 8%, at the top end of our guidance range. Injectables reported revenue grew 9%, which is stated after an $18 million provision relating to rebate adjustments following a change in prior years estimates in the US.
In North America we benefited from good demand for our broad portfolio, recent launches and growth in Canada, supported by $24 million sales contribution from the Xellia acquisition, which closed in September.
In Europe and rest of the world (ROW) we delivered good growth across all our established and recently entered markets. Our own products grew 20%, driven by our expanding portfolio and ability to address market shortages. Our CMO business performed in line with expectations, accelerating in the second half.
In MENA we saw strong growth across most of our markets, supported by new launches and good demand across our broad portfolio.
Injectables core gross profit grew 5% and core gross margin contracted due to product mix, which includes the slightly dilutive impact of the Xellia acquisition and an increased contribution from partnered products.
Injectables reported operating profit grew 4%. Injectables core operating profit grew 5% and core operating margin was 35.3%. This reflects the change in gross profit. Excluding Xellia, Injectables core operating margin was 35.7%.
During the year, the Injectables business had 20 launches in North America, 16 in MENA and 53 in Europe and ROW. We submitted 137 filings to regulatory authorities across all markets.
Branded
| 2024$ million | 2023$ million | Change | Constant currency change | |
| Revenue | 769 | 714 | 8% | 9% |
| Core revenue | 769 | 714 | 8% | 9% |
| Gross profit | 402 | 351 | 15% | 15% |
| Gross margin | 52.3% | 49.2% | 3.1pp | 2.6pp |
| Core gross profit | 402 | 366 | 10% | 10% |
| Core gross margin | 52.3% | 51.3% | 1.0pp | 0.5pp |
| Operating profit | 182 | 95 | 92% | 108% |
| Operating margin | 23.7% | 13.3% | 10.4pp | 12.1pp |
| Core operating profit | 189 | 170 | 11% | 20% |
| Core operating margin | 24.6% | 23.8% | 0.8pp | 2.4pp |
Our Branded business performed very well in 2024, with good growth across most of our markets. Revenue was up 8%, at the top of our guidance range, as we benefited from a growing and diversified portfolio of oncology products and medicines used to treat chronic illnesses.
Branded reported gross profit grew 15% and core gross profit grew 10%, with core gross margin improving by a percentage point. This reflects an improving product mix driven by our shift towards higher value medicines.
Branded reported operating profit increased significantly, reflecting the impact of the $69 million impairment charge and cost in relation to halting our operations in Sudan in 2023. Core operating profit grew 11% and core operating margin expanded to 24.6%. This reflects the improvement in core gross profit, which more than offset the negative foreign exchange impact related to the currency devaluation in Egypt.
During the year, the Branded business had 36 launches and submitted 59 filings to regulatory authorities. Revenue from in-licensed products represented 27% of Branded revenue (2023: 29%).
Generics
| 2024$ million | 2023$ million | Change | |
| Revenue | 1,026 | 937 | 9% |
| Core revenue | 1,037 | 937 | 11% |
| Gross profit | 346 | 387 | (11)% |
| Gross margin | 33.7% | 41.3% | (7.6)pp |
| Core gross profit | 357 | 387 | (8)% |
| Core gross margin | 34.4% | 41.3% | (6.9)pp |
| Operating profit | 167 | 147 | 14% |
| Operating margin | 16.3% | 15.7% | 0.6pp |
| Core operating profit | 170 | 192 | (11)% |
| Core operating margin | 16.4% | 20.5% | (4.1)pp |
Generics core revenue grew 11% in 2024, ahead of our guidance, driven by good demand across our differentiated portfolio, particularly for our respiratory products. Generics reported revenue grew 9%, which is stated after an $11 million provision relating to rebate adjustments following a change in prior years estimates.
The decrease in Generics reported and core gross profit and the lower core gross margin of 34.4% was primarily due to the higher royalties on our authorised generic of sodium oxybate, when compared to last year. This was partially offset by an improvement in product mix across the base business.
Generics core operating profit decreased, reflecting the reduction in gross profit, which was partially offset by lower sales and marketing costs. Reported operating profit includes the impairment reversal related to our complex respiratory portfolio.
In 2024, the Generics business launched seven products and had a record number of product submissions, with ten filings submitted to regulatory authorities, as we continue to work on further enhancing our pipeline and building differentiation in our product portfolio.
Other businesses
Other businesses, which includes our 503B compounding business, as well as Arab Medical Containers (AMC), a manufacturer of plastic specialised medicinal sterile containers, and International Pharmaceuticals Research Centre (IPRC), which conducts bio-equivalency studies, contributed revenue of $26 million in 2024 (2023: $21 million) with an operating loss of $9 million (2023: $9 million loss). We are making good progress in growing our compounding business and continue to invest in building our manufacturing and commercial compounding capabilities.
Research and development
Our investment in R&D of $141 million and our business development activities enable us to continue expanding the Group’s product portfolio. During 2024, we had 132 new launches and received 136 approvals. To ensure the continuous development of our product pipeline, we submitted 206 regulatory filings.
| 2024 submissions9 | 2024 approvals10 | 2024 launches10 | |
| Injectables | 137 | 86 | 89 |
| North America | 18 | 18 | 20 |
| MENA | 25 | 16 | 16 |
| Europe & ROW | 94 | 52 | 53 |
| Branded | 59 | 43 | 36 |
| Generics | 10 | 7 | 7 |
| Total | 206 | 136 | 132 |
Net finance expense
| 2024$ million | 2023$ million | Change | Constant currency change | |
| Finance income | 8 | 7 | 14% | 14% |
| Finance expense | 167 | 95 | 76% | 73% |
| Net finance expense | 159 | 88 | 81% | 77% |
| Core finance income | 8 | 7 | 14% | 14% |
| Core finance expense | 93 | 90 | 3% | 0% |
| Core net finance expense | 85 | 83 | 2% | (1)% |
Reported net finance expense increased to $159 million primarily due to the remeasurement of contingent consideration related to business combinations. Core net finance expense increased to $85 million (2023: $83 million), reflecting borrowing to finance the Xellia acquisition.
We expect core net finance expense to be around $90 million to $95 million in 202510.
Tax
The Group incurred a reported tax expense of $93 million (2023: $89 million) and a reported effective tax rate of 20.4% (2023: 31.7%). Excluding the tax impact of exceptional items and other adjustments, Group core tax expense was $138 million (2023: $131 million). The core effective tax rate was 21.7% (2023: 20.9%).
We expect the Group core effective tax rate to be around 22% in 2025.
Profit attributable to shareholders and earnings per share
Reported profit attributable to shareholders was $359 million (2023: $190 million). Core profit attributable to shareholders was $495 million (2023: $492 million). Reported basic earnings per share was 162 cents (2023: 86 cents). Core basic earnings per share was 224 cents (2023: 223 cents).
Dividend
The Board is recommending a final dividend of 48 cents per share (2023: 47 cents per share) bringing the total dividend for the full year to 80 cents per share (2023: 72 cents per share). The proposed dividend will be paid on 1 May 2025 to eligible shareholders on the register at the close of business on 21 March 2025, subject to approval at the Annual General Meeting on 24 April 2025.
Net cash flow, working capital and net debt
The Group generated operating cash flow of $564 million (2023: $608 million). This change primarily reflects increased trade receivables reflecting strong sales towards the end of the year.
Group working capital days were 240 at 31 December 2024. Compared to the position on 31 December 2023, Group working capital days decreased by three days from 243 days.
Capital expenditure was $165 million (2023: $169 million). In the US, $49 million was spent on upgrades, new technologies and capacity expansion across our Cherry Hill and Columbus sites. In MENA, $80 million was spent strengthening and expanding our local manufacturing capabilities, including for general formulations in Tunisia and Algeria, as well as strengthening our oral oncology capabilities in Algeria. In Europe, we spent $36 million enhancing our manufacturing capabilities, including adding lyophilisation capacity in Portugal.
We expect Group capital expenditure to be in the range of $170 million to $190 million in 2025.
The Group’s total debt was $1,306 million at 31 December 2024 (31 December 2023: $1,191 million).
The Group’s cash balance at 31 December 2024 was $188 million (31 December 2023: $215 million).
The Group’s net debt was $1,118 million at 31 December 2024 (31 December 2023: $976 million). We continue to have a healthy balance sheet, with a net debt to core EBITDA ratio of 1.4x (31 December 2023: 1.2x).
Net assets
Net assets at 31 December 2024 were $2,321 million (31 December 2023: $2,209 million). Net current assets were $285 million (31 December 2023: $761 million). This primarily reflects the reclassification of the five-year Eurobond, which matures on 9 July 2025, as short-term financial debt.
The Board
The Board of Directors that served during the twelve-month period to 31 December 2024 and their respective responsibilities can be found on the Leadership team section of www.hikma.com.
Cautionary statement
This preliminary announcement has been prepared solely to provide additional information to the shareholders of Hikma and should not be relied on by any other party or for any other purpose.
Definitions
We use a number of non-IFRS measures to report and monitor the performance of our business. Management uses these adjusted numbers internally to measure our progress and for setting performance targets. We also present these numbers, alongside our reported results, to external audiences to help them understand the underlying performance of our business. Our core numbers may be calculated differently to other companies.
Adjusted measures are not substitutable for IFRS results and should not be considered superior to results presented in accordance with IFRS.
Core results
Reported results represent the Group’s overall performance. However, these results can include one-off
or non-cash items which are excluded when assessing the underlying performance of the Group. To
provide a more complete picture of the Group’s performance to external audiences, we provide, alongside our reported results, core results, which are a non-IFRS measure. Our core results exclude the exceptional items and other adjustments set out in Note 5.
Constant currency
As the majority of our business is conducted in the US, we present our results in US dollars. For both our Branded and Injectables businesses, a proportion of their sales are denominated in a currency other than the US dollar. In order to illustrate the underlying performance of these businesses, we include information on our results in constant currency.
Constant currency numbers in 2024 represent reported 2024 numbers translated using 2023 exchange rates, excluding price increases in the business resulting from the devaluation of currencies.
Core EBITDA
Core EBITDA is earnings before interest, tax, depreciation, amortisation, adjusted for exceptional items and other adjustments (Note 5).
| 2024$ million | 2023$ million | |
| Reported operating profit | 612 | 367 |
| Depreciation and impairment charges in relation to property, plant and equipment | 96 | 110 |
| Impairment reversals on property, plant and equipment | (16) | – |
| Amortisation and impairment charges in relation to intangible assets | 122 | 131 |
| Impairment reversal on intangible assets | (44) | – |
| Depreciation and impairment charges in relation to right-of-use assets | 10 | 18 |
| Reorganisation costs | 11 | – |
| Pre-production set-up costs | 4 | – |
| Provision for rebates adjustment | 29 | – |
| Provision related to expected North America opioid legal settlement | – | 129 |
| Provision against inventory related to halted operations in Sudan | – | 17 |
| Impairment charge on financial assets | – | 29 |
| Impairment charge on other current assets | – | 2 |
| Cost from halted operations in Sudan | – | 7 |
| Core EBITDA | 824 | 810 |
Working capital days
We believe Group working capital days provides a useful measure of the Group’s working capital management and liquidity. Group working capital days are calculated as Group receivable days plus Group inventory days, less Group payable days. Group receivable days are calculated as Group trade receivables x 365, divided by 12 months Group revenue. Group inventory days are calculated as Group inventory x 365, divided by 12 months Group cost of sales. Group payable days are calculated as Group trade payables x 365, divided by 12 months Group cost of sales.
Group net debt
We believe Group net debt is a useful measure of the strength of the Group financial position. Group net debt includes short and long-term financial debts (Notes 10 and 13), lease liabilities, net of cash and cash equivalents and restricted cash.
| Group net debt | 31 Dec 2024$ million | 31 Dec 2023$ million |
| Short-term financial debts | (642) | (150) |
| Short-term leases liabilities | (11) | (11) |
| Long-term financial debts | (607) | (975) |
| Long-term leases liabilities | (46) | (55) |
| Total debt | (1,306) | (1,191) |
| Cash and cash equivalents | 188 | 205 |
| Restricted cash | – | 10 |
| Net debt | (1,118) | (976) |
ROIC
ROIC is calculated as core operating profit after tax divided by the average invested capital (calculated as the average of the opening and closing total equity plus net debt). This measures our efficiency in allocating capital to profitable investments.
| ROIC$ million | 2024 | 2023 |
| Core operating profit | 719 | 707 |
| Total tax | (158) | (144) |
| Core operating profit after tax | 561 | 563 |
| Net debt | 1,118 | 976 |
| Equity | 2,321 | 2,209 |
| Invested capital (at 31 December) | 3,439 | 3,185 |
| Invested capital (at 1 January) | 3,185 | 3,161 |
| Average invested capital | 3,312 | 3,173 |
| ROIC | 16.9% | 17.7% |
Forward looking statements
This announcement contains certain statements which are, or may be deemed to be, “forward looking statements” which are prospective in nature with respect to Hikma’s expectations and plans, strategy, management objectives, future developments and performance, costs, revenues and other trend information. All statements other than statements of historical fact may be forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward looking words such as “aims“, “anticipates“, “believes“, “budget“, “estimates“, “expects“, “forecasts“, “goals“, “intends“, “objectives“, “outlook“, “plan“, “project“, “risks“, “seek” “scheduled”, “targets” or words or terms of similar substance or the negative thereof, as well as variations of such words and phrases or statements that certain actions, events or results “could“, “may“, “might“, “probably“, “should“, “will” or “would” be taken, occur or be achieved.
By their nature, forward looking statements are based on current expectations and projections about future events and are therefore subject to assumptions, risks and uncertainties that are beyond Hikma’s ability to control or estimate precisely and which could cause actual results or events to differ materially from those expressed or implied by the forward looking statements. In particular, these include statements relating to future actions, product authorisations, future performance or results of current and anticipated products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, dividend payments and financial results. Where included, such statements have been made by or on behalf of Hikma in good faith based upon the knowledge and information available to the Directors on the date of this announcement. Accordingly, no assurance can be given that any particular expectation will be met and Hikma’s shareholders are cautioned not to place undue reliance on the forward-looking statements. Forward looking statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future.
Other than in accordance with its legal or regulatory obligations (including under the UK Market Abuse Regulation and the UK Listing Rules and the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority), Hikma does not undertake to update the forward looking statements contained in this announcement to reflect any changes in events, conditions or circumstances on which any such statement is based or to correct any inaccuracies which may become apparent in such forward looking statements. Except as expressly provided in this announcement, no forward looking or other statements have been reviewed by the auditors of Hikma. Any forward looking statement above and all subsequent oral or written forward looking statements attributable to Hikma or any of its members, directors, officers or employees or any person acting on their behalf are expressly qualified in their entirety by this cautionary statement. Past share performance cannot be relied on as a guide to future performance. Nothing in this announcement should be construed as a profit forecast.
Neither the content of Hikma’s website nor any other website accessible by hyperlinks from Hikma’s website are incorporated in, or form part of, this announcement.
Principal risks and uncertainties
The Group faces risks from a range of sources that could have a material impact on our financial commitments and ability to trade in the future. The principal risks are determined via robust assessment considering our risk context by the Board of Directors with input from executive management. The principal risks facing the company have not materially changed over the year, and are set out in the 2024 annual report on pages 80 – 88, which will be available in March 2025. The Board recognises that certain risk factors that influence the principal risks are outside of the control of management. The Board is satisfied that the principal risks are being managed appropriately and consistently with the target risk appetite. The set of principal risks should not be considered as an exhaustive list of all the risks the Group faces.
1 Constant currency numbers in 2024 represent reported 2024 numbers translated using 2023 exchange rates, excluding price increases in the business resulting from the devaluation of currencies
2 Core results throughout the document are presented to show the underlying performance of the Group, excluding exceptional items and other adjustments set out in Note 5 of this release. Core results are a non-IFRS measure. See page 14 for a reconciliation to reported IFRS results
3 Group net debt is calculated as Group total debt less Group total cash. Group net debt is a non-IFRS measure that includes short and long-term financial debts (Notes 10 and 13), lease liabilities, net of cash and cash equivalents and restricted cash, if any. See page 15 for a reconciliation of Group net debt
4 Refer to page 15 for reconciliation
5 IQVIA MAT November 2024, includes all generic injectable and generic non-injectable products by sales
6 IQVIA MAT November 2024, generic injectable volumes by eaches, excluding branded generics and Becton Dickinson
7 Based on internal analysis by using data from the following source: IQVIA MIDAS® Monthly Value Sales data for Algeria, Egypt, Jordan, Kuwait, Lebanon, Morocco, Saudi Arabia, Tunisia and UAE, for the period: calendar year 2024, reflecting estimates of real-world activity. Copyright IQVIA. All rights reserved.
8 Core results throughout the document are presented to show the underlying performance of the Group, excluding exceptional items and other adjustments set out in Note 5 of the consolidated financial statements set out in this release. Core results are a non-IFRS measure
9 Pipeline projects submitted, approved and launched by country in 2024. MENA numbers include only the five major markets (Algeria, KSA,
Egypt, Morocco and Jordan)
10 Based on the composition of the Hikma Pharmaceuticals Plc’s net debt portfolio as at 31 December 2024, a one percentage point increase/decrease in interest rates would result in a $6 million increase/decrease in net finance cost per year (2023: $3 million increase/decrease)
