op condensed 2012 jaarverslag - engels 28 02 2013...
TRANSCRIPT
p. 2/16
Contents Management statement 3
Business review of the full year 2012 4
Highlights 4
Key financial figures FY2012 4
Net sales 5
Gross margin 5
Operating charges 6
Operating profitability 6
Financial result, taxes, net result 7
Main balance sheet items 7
Main events 8
Main events in 2012 8
Significant events after balance sheet date 9
Consolidated income statement (by function) 10
Consolidated statement of comprehensive income 11
Consolidated balance sheet 12
Consolidated statement of changes in equity 13
Consolidated cash flow statement 14
Statutory auditor’s statement 15
The full Annual Report will be published on the corporate website (www.omega-pharma.be) after March 15, 2013.
p. 3/16
Management statement
The financial information included in this condensed annual report is derived from the consolidated
financial statements of Omega Pharma NV, which are subject to audit by PwC Bedrijfsrevisoren. The
audit by PwC Bedrijfsrevisoren is substantially completed and has to date not revealed any material
misstatements. We hereby certify that, to the best of our knowledge, the consolidated financial
statements of Omega Pharma NV as of December 31, 2012, prepared in accordance with International
Financial Reporting Standards, as adopted by the European Union, and with the legal requirements
applicable in Belgium, give a true and fair view of the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the consolidation taken as a whole, and that the
management report includes a fair review of the development and performance of the business and the
position of the Company and the undertakings included in the consolidation taken as a whole, together
with a description of the principal risks and uncertainties that they face.
Marc Coucke, CEO Barbara De Saedeleer, CFO
28 February 2013
p. 4/16
Business review of the full year 2012
Highlights
• Turnover grew 16% year on year, benefitting from the good results of the Top 20 brands and the
contribution from the brands acquired from GSK as of June 2012. Turnover of Top 20 brands
increased by 29% and represented 48% of consolidated turnover in 2012. Strong sales performance in
France, Italy, UK/Ireland, Germany, Russia and Belgium.
• Omega Pharma secured €300 million from issuance of two series of retail bonds to fund the
acquisition of 54 European OTC brands from GSK. Integration of brands acquired from GSK ahead of
schedule.
• Continued investments in top brands, as well as in optimizing the organization in selected countries.
• Profitability: improvement of all indicators (gross margin, operating cash flow margin, operating
profit margin, net margin)
Key financial figures FY 2012
(in € million) 2012 2011 Year on Year Evolution
Consolidated Net Sales 1 041.9 900.6 +16%
Gross Margin 549.6 454.4 +21%
As percentage of Net Sales 52.7% 50.5%
EBITDA (*) 202.2 139.3 +45%
As percentage of Net Sales 19.4% 15.5%
Net Result 65.9 35.7 +85%
(*) EBITDA: operating result before non-recurring items, increased with depreciations and amortization
p. 5/16
Net sales
Integration of the brands acquired from GSK strengthens brand strategy and improves market position in key geographic markets
Consolidated net sales increased by 16%, reflecting the inclusion ―as of June 2012― of the sales from the
brands acquired from GSK. On a like-for-like basis, the net sales of OTC products continued to grow in
spite of a weak consumer confidence in Europe. This demonstrates the robustness of the underlying OTC
sales figures. The turnover from the distribution of generics in Belgium decreased by 5% and represented
17% of 2012 consolidated net sales.
The 54 OTC brands acquired from GSK provided Omega Pharma in key European OTC markets with the
critical mass it was missing before. As of 2012, Omega Pharma is now also in the United Kingdom,
Germany and Italy a prominent competitor in the respective local OTC markets. In 2012, Omega Pharma
generated net sales exceeding €50 million in seven national markets, i.e. Belgium, France, Italy, the
UK/Ireland, the Netherlands Germany and the Nordics.
The acquired brands also strengthened Omega Pharma’s position in key segments of the European OTC
market. The new brand combinations represent strong market shares in the segments of cough-and-cold-
and-allergy remedies (including nasal hygiene products), sleeping aids and natural remedies. Moreover,
this acquisition also provides Omega Pharma with a solid platform in previously unexplored major
segments of the OTC market, including pain relief products and female intimate hygiene products.
Out of the 54 acquired brands, 7 have been integrated into the group’s Top 20 ― either as the principle
brand for their segment, or in combination with an existing brand of Omega Pharma’s portfolio. The Top
20 brands generated €495.4 million of sales, i.e. 48% of the 2012 consolidated turnover of the group.
This new position enables Omega Pharma to even better explore synergies and economies of scale. The
turnover of the Top 20 brands grew with 29% versus 2011.
Gross margin: 53% of Net Sales
Expressed as a percentage of net sales, the gross margin grew from 51% in 2011 to 53% in 2012. This is the
result of an improved product mix – i.e. more sales contribution from high-margin products and brands,
mainly those included in the Top 20 of the group, which had an average gross margin of 67%. Excluding the
distribution of generics in Belgium ―‘by definition’ characterised with a lower gross margin― the average
gross margin for the group was approximately 60%.
(in € thousand) FY2012
Gross Margin
% of Sales
FY2012
% of Sales
FY2011
Total group 549 565 52.7% 50.5%
Top 20 brands 330 448 66.7%
p. 6/16
Operating charges
Advertising & Promotion in support of Top 20 brands. Functional costs under control.
Sales and Marketing expenses ―including Advertising & Promotion (A&P)― increased by 15% to €277.2
million and represent 27% of net consolidated sales (an equal percentage as in 2011). The last few
years, Omega Pharma has consistently allocated its A&P budget largely in support of its Top 20 brands.
Approximately 40% of the 2012 consolidated A&P spent was allocated to TV advertising, which is
generally considered to be still the most effective advertising instrument for OTC products.
In 2012, Distribution expenses increased with 18% versus 2011 ― i.e. largely in line with the evolution
of the turnover. General administrative expenses, on the other hand, decreased with 8% versus 2011,
reflecting structural savings.
Operating profitability
EBITDA: 19% of Net sales.
The above-described factors led to a recurring EBITDA of €202.2 million for 2012 (19% of sales),
compared to €139.3 million for 2011 (16% of sales).
The main factors positively impacting the EBITDA were the sales growth, the improved average gross
margin and the well controlled evolution of the functional costs. This ultimately resulted in a 45%
growth of EBITDA – well ahead of sales growth.
Depreciations amortization and changes in provisions increased from €29.0 million in 2011 to €40.2
million in 2012, mainly as a consequence of the inclusion of the brands acquired from GSK mid-2012.
Non-recurring expenses amounted to €38.1 million and were largely defined by restructuring charges
and related provisions ― mainly referring to charges incurred for corporate projects (delisting,
acquisition of GSK brands, issuance of the retail bonds) and to organisational restructuring charges in
the Netherlands (plant closure), Germany (relocation of offices), Ireland (relocation of key activities to
Belgium), Belgium (relocation of Biover operations from Bruges to Nazareth) and Denmark (closing of
country office; integration of operations into the group’s Swedish organisation).
Starting from the above-mentioned recurring EBITDA this led to an Operating Result (EBIT) of €124.0
million for 2012 (12% of net sales), compared to €80.8 million for 2011 (+54% YoY).
p. 7/16
Financial result, taxes, net result
In 2012, the Financial Result amounted to €-37.9 million compared to €-29.0 million in 2011. This
evolution largely results from a higher level of average net debt in 2012 ― mainly associated with the
acquisition of the brands from GSK ― which caused an increase of the interests paid by €8.7 million.
Income taxes were €20.2 million for 2012, implying a tax rate of 24%. In 2011, income taxes amounted
to €16.0 million. Adjusting for the one-off item in 2011 ― i.e. the annulment of a tax asset in Germany
― the 2011 tax rate was 21%.
This yielded a Result after income tax of €65.9 million versus €35.7 million in 2011.
Main balance sheet elements
Net debt €756.7 million. Equity €825.4 million
On 31 December 2012, net debt amounted to €756.7 million (according to the methodology applied for
the bank covenants). On 30 June 2012 this was €658.3 million and €422.1 million on 31 December 2011.
The increase by €334.6 million versus 31 December 2011 is mainly related to the acquisitions of 54
European OTC brands from GSK (June 2012), and of the Optalidon brand (November 2012), partly offset
by the €190.0 million capital increase (June 2012). With this net debt level, Omega Pharma remains
safely within the covenants agreed upon with its credit providers.
Working capital amounted on 31 December 2012 to €97.3 million, i.e. 9% of net sales (non-annualised
for acquisitions). On 30 June 2012, the working capital reached a level of €82.1 million (9% of net sales,
not annualised for acquisitions) and at the end of the previous period (2011) this was €51.6 million (6%
of net sales, idem). The increase is mainly related to the inclusion of the OTC brands acquired from
GSK.
Intangible assets corresponded to an amount of €1,517.2 million versus €1,042.2 million at the end of
2011. This increase mainly refers to two factors. First: the acquisitions (the OTC brands of GSK,
Optalidon). A second factor refers to Omega Pharma’s enhanced efforts in the field of new product
development, which led to increased investments in R&D, brands, licenses and patents.
The increase under property, plant and equipment refers to the inclusion of the Herrenberg
manufacturing site (Germany), which was part of the transaction with GSK.
Equity increased from €633.2 million to €825.4 million, principally as a result of the €190 million capital
increase implemented in June 2012 in the framework of the transaction with GSK.
The changes in Liabilities reflect the increased utilisation of existing credit facilities and the issuance of
two series of retail bonds, for financing the transaction with GSK. Net debt amounted to €756.7 million.
p. 8/16
Main events
Main events in 2012
• Following the initial acceptance period for the takeover bid, launched by Couckinvest NV (now
named Omega Pharma Invest NV) on 2 September 2011, the bid was reopened from 27 December
2011 until and including 6 January 2012. After the reopening, Couckinvest held or controlled 97.10%
of all shares outstanding, thus triggering a squeeze-out which ran from 16 January until and including
3 February 2012. After the payment (17 February 2012) for the shares tendered in the squeeze-out
Couckinvest held/controlled 99.26% of all shares outstanding. All remaining warrants were also
acquired at that time. All shares not acquired or tendered on 3 February 2012 are deemed
transferred to Couckinvest NV by operation of law, with consignation of the funds necessary for the
payment of their price to the Belgian Deposit and Consignation Office where these funds will be held
available for a period of thirty years. As a consequence of the successful takeover bid, the Omega
Pharma shares were delisted from NYSE/Euronext Brussels. The last listing day was 3 February
2012.
• 15 March 2012. Omega Pharma announced that it had reached an agreement with GSK for the
takeover of the formerly identified ‘non-core’ OTC-brands of GSK in Europe for the amount of €470
million (GBP 398 million) in cash. The acquired brands are amongst others Lactacyd, Abtei,
Solpadeine, Zantac, Nytol and Beconase and represented in 2011 a turnover of more than €200
million. The transaction was largely completed in June 2012. As a part of the agreement, Omega
Pharma took over the production plant in Herrenberg (Germany) on 1 July 2012. Several brands of
the acquisition are produced in Herrenberg.
• 24 April 2012. Omega Pharma announced that it made a public offer in Belgium and the Grand-Duchy
of Luxembourg for two series of retail bonds for an expected total minimum amount of €25 million
each and a combined expected total minimum amount of €100 million. The fixed rate for the bonds
due 2017 is 4.500%, and 5.000% for the bonds due 2019. It was mentioned that the bonds were
intended to finance part of the acquisition by Omega Pharma of an important portfolio of European
OTC brands from GSK. On 26 April 2012, Omega Pharma announced that this public offer had been
closed after the first day of the subscription period because the combined expected total maximum
amount of €300 million was largely achieved. The total issue amount was €300 million of which €180
million for the 5 year bond and €120 million for the 7 year bond. The total amount of subscriptions
received by the Joint Lead Managers was significantly higher than the total issue amount. The issue
date was 23 May 2012. The bonds are listed on the Luxembourg Stock Exchange.
• 31 May 2012. Omega Pharma reached agreement with the South-African company CAVI Brands
(Proprietary) Limited to create a 51/49 joint venture, named OmegaLabs. The joint venture became
operational early July with the launch of Wartner, Silence, Predictor and a number of other Omega
Pharma brands.
p. 9/16
• 29 June 2013. Omega Pharma’s capital structure was strengthened by a capital injection of
€190,000,000.00 through the issuing of 5,277,778 new shares. On the balance sheet, €3,586,777.93 is
recognized as Share Capital and the remaining €186,413,122.07 as Share Premium.
• 24 September 2012. Omega Pharma entered into a co-branding agreement with Kwizda Pharma to
market, distribute and sell the BronchoStop cough products in 13 Western European Markets. Under
the agreement, Omega will exclusively market, distribute and sell Kwizda Pharma`s BronchoStop
brand of cough products under its umbrella brand label in the UK, Ireland, France, Belgium, the
Netherlands, Luxembourg, Spain, Portugal, Italy, Norway, Denmark, Sweden and Finland. This co-
branding collaboration opens access for BronchoStop into Western Europe and allows Omega Pharma
to further expand its market position in the cough market.
• 15 November 2012. Omega Pharma closed the acquisition of the OTC brand Optalidon. The brand for
pain relief products has a strong market position in Italy and is also marketed in Spain and Belgium.
The acquisition of Optalidon further strengthens Omega Pharma’s portfolio for the European pain
relief market segment, which already includes Solpadeine, a leading brand in its segment in the UK.
• 27 November 2012. Omega Pharma Invest, the company that holds the shares of Omega Pharma,
announced that it made a public offer in Belgium and the Grand-Duchy of Luxembourg for a retail
bond for an expected minimum amount of €200 million and a maximum amount of €300 million. The
fixed rate for the bonds, due 2017, is 5.125%. On 30 November 2012, the first day of the subscription
period, the public offer was closed because the maximum amount of €300 million was largely
achieved. The bonds were issued and accepted for trading on Luxembourg Stock Exchange on 12
December 2012.
Significant events after balance sheet date
• On 1 January 2013, Omega Pharma gained full ownership of Naturoteek, a Belgium company that
markets three key brands: Buurmans (a food supplement range for the Dutch market), Vitafytea (a
high-quality food supplement range, often recommended by physicians, for the Belgian market) and
Etixx (the number one on the Belgian market for sports nutrition products and food supplements for
professional and amateur athletes.
• On 31 January 2013, it was announced that Omega Pharma remains for at least five additional
years the exclusive distributor in Belgium of the generic medicines of Eurogenerics (EG), a
subsidiary of Stada. Omega Pharma already distributes the EG products on the Belgian market since
1999.
• On 28 February 2013, Omega Pharma announced the acquisition of Arterin, Belgian market leader in
natural food supplements for managing the cholesterol level.
p. 10/16
Consolidated income statement
(in € thousand ) 2012 % of Net Sales
2011 % of Net Sales
∆ % 2012/2011
Net Sales 1 041 940 100% 900 551 100% +16%
Cost of goods sold -492 375 47% -446 154 50% +10%
Gross Margin 549 565 53% 454 397 50% +21%
Distribution expenses -63 198 -6% -53 746 -6%
Sales and Marketing expenses -277 216 -27% -241 576 -27%
General Administrative expenses -46 376 -4% -50 544 -6%
Other operating income/expense, net -743 0% 1 683 0%
Non recurring expenses -38 051 -4% -29 453 -3%
Operating Profit 123 986 12% 80 761 9% +54%
Finance income 5 742 2 524
Finance cost -43 672 -31 559
Net Finance cost -37 930 -29 035 +31%
Result before income tax 86 055 51 726 +66%
Income tax expense -20 194 -16 035
Result after income tax 65 861 35 691 +85%
Of which attributable to the shareholders of the parent company
66 037 35 940
Of which attributable to non-controlling interests
-176 -249
Additional information: connection to the operating result before interests, income tax, depreciations and amortization (EBITDA)
Operating Profit (EBIT) 123 986 12% 80 761 9%
Depreciations and Amortization 40 153 4% 29 042 3%
EBITDA 164 139 16% 109 803 12%
p. 11/16
Consolidated statement of comprehensive income
At 31 December 2012
(in € thousand)
Fair value and other reserves
Cumulative translation
adjustments
Retained earnings
Total equity
Attributable to non-
controlling Interests
Attributable to the share-
holders of the parent company
Profit for the period 65 861 65 861 176 66 037
Fair value gains/(losses) on cash flow hedges
-6 396 -6 396 -6 396
Fair value gains/(losses) on cash flow hedges - Tax effect
2 175 2 175 2 175
Currency translation adjustments
1 685 1 685 1 685
Total recognized income for the period ended 31 December 2012
-4 221 1 685 65 861 63 325 176 63 501
At 31 December 2011
(in € thousand)
Fair value and other reserves
Cumulative translation
adjustments
Retained earnings
Total equity
Attributable to non-
controlling Interests
Attributable to the share-
holders of the parent company
Profit for the period 35 691 35 691 249 35 940
Fair value gains/(losses) on cash flow hedges
-5 622 -130 -5 752 -5 752
Fair value gains/(losses) on cash flow hedges - Tax effect
1 911 1 911 1 911
Currency translation adjustments
187 187 187
Total recognized income for the period ended 31 December 2011
-3 711 187 35 561 32 037 249 32 286
p. 12/16
Consolidated Balance Sheet
(in € thousand) 31 December
2012 31 December
2011
Non-current assets 1 640 536 1 137 140
Intangible assets 1 517 156 1 042 155
Of which consolidation goodwill 570 402 554 820
Property, plant and equipment 72 378 49 047
Financial assets 1 940 1 940
Deferred income tax assets 38 894 34 466
Other non-current assets 10 168 9 532
Current assets 452 602 356 992
Inventories 148 024 127 444
Trade receivables 221 661 154 200
Other current assets 43 040 37 291
Of which income tax assets 5 447 5 228
Cash and cash equivalents 39 877 38 057
Assets held for sale 1 977 1 575
TOTAL ASSETS 2 095 115 1 495 707
EQUITY 825 381 633 215
Share capital and share premium 557 706 367 706
Retained earnings 393 312 388 475
Treasury shares -118 730 -118 730
Fair value and other reserves -7 193 -2 972
Cumulative translation adjustments 424 -1 261
Equity attributable to the shareholders of the parent company 825 519 633 218
Equity attributable to non-controlling interests -138 -3
LIABILITIES 1 269 734 862 492
Non-current liabilities 908 719 549 417
Provisions 3 138 4 675
Pension obligations 7 992 5 589
Deferred income tax liabilities 99 435 86 595
Retail Bond 300 000
Borrowings (non-current Financial liabilities) 480 649 442 112
Other non-current liabilities 1 300 1 522
Derivative financial instruments 16 205 8 924
Current liabilities 361 015 313 075
Borrowings (current Financial liabilities) 12 730 15 105
Trade payables 272 351 230 038
Taxes, remuneration and social security 46 896 49 875
Other current payables 29 038 17 673
Derivative financial instruments 384
TOTAL EQUITY AND LIABILITIES 2 095 115 1 495 707
p. 13/16
Consolidated statement of changes in equity
IFRS (in € thousand)
Number of shares
Share capital
and share premium
Treasury shares
Fair value & other reserves
Cumulative translation adjustments
Retained earnings
Attribut-able to Share-
holders of parent
company
Attribut-able to non-
controlling interests
Total equity
Amount 31 December 2010
23 351 086 366 941 -24 144 739 -1 448 376 016 718 104 170 718 274
Total comprehensive income for the period ended 31 Dec. 2011
0 -3 711 187 35 810 32 286 -249 32 037
Capital increases
Employee share options scheme
29 288 765 765 765
Treasury shares -2 738 645 -94 586 -94 586 -94 586
Dividend on treasury shares 880 880 880
Dividend -24 231 -24 231 -24 231
Non-controlling interests 76 76
Amount 31 December 2011
20 641 729 367 706 -118 730 -2 972 -1 261 388 475 633 218 -3 633 215
Total comprehensive income for the period ended 31 Dec. 2012
0 -4 221 1 685 66 037 63 501 -176 63 325
Capital increases 5 277 778 190 000 190 000 190 000
Employee share options scheme
Treasury shares
Dividend on treasury shares
Dividend -61 200 -61 200 -61 200
Non-controlling interests 41 41
Amount 31 December 2012
25 919 507 557 706 -118 730 -7 193 424 393 312 825 519 -138 825 381
p. 14/16
Consolidated cash flow statement
(in € thousand) 2012 2011
Profit before income tax 86 055 51 726
Taxes paid -16 639 -9 500
Adjustments for operational non-cash items 39 168 37 318
Adjustments for interests and financial non-cash items 35 790 22 209
Gross cash flow from operating activities 144 374 101 752
Changes in operating working capital -45 727 10 449
Changes in working capital related to changes in scope and other -10 523 -16 130
Total cash flow from operating activities 88 124 96 071
Capital expenditure -530 284 -50 155
Disposals of investment goods 612 20 323
Cash and cash equivalents from acquisitions 34 606
Investments in existing shareholdings (post payments) and in new holdings -410 -25 250
Dividends received 0 0
Total cash flow from investing activities -530 048 -54 475
Proceeds from the issue of share capital 190 000 764
Purchases of own shares 0 -94 532
Dividend distribution -61 299 -23 901
Proceeds from borrowings 340 701 385 043
Repayment of borrowings -5 185 -287 058
Interests received (paid) -20 897 -17 534
Total cash flow from financing activities 443 320 -37 217
Net increase/decrease of cash flows for the period 1 396 4 379
Cash and cash equivalents – start of the period 38 057 33 823
Gains or losses on currency exchange on liquid assets 425 -145
Cash and cash equivalents – end of the period 39 878 38 057
Total net cash flow of the period 1 396 4 379
p. 15/16
Statutory auditor’s statement
The statutory auditor, PricewaterhouseCoopers Bedrijfsrevisoren BCVBA, represented by Peter Opsomer
BV BVBA, represented by Peter Opsomer, has confirmed that the audit of the consolidated balance
sheet, consolidated income statement and consolidated cash flow statement, which is substantially
completed, has to date not revealed any material misstatements. The statutory auditor has also
confirmed that the accounting data included in the enclosed document do not include any material
inconsistencies with the consolidated balance sheet, consolidated income statement and consolidated
cash flow statement from which the document has been derived.
Ghent, 28 February 2013
The statutory auditor PwC Bedrijfsrevisoren bcvba Represented by Peter Opsomer BVBA Represented by Peter Opsomer, Partner
p. 16/16