Clinigen : Presentation

September 17, 2020 at 04:10 am EDT

CAUTIONARY STATEMENT

This presentation contains certain statements that are neither reported financial results nor other historical information. The information contained in this presentation is not audited, is for personal use and informational purposes only and is not intended for distribution to, or use by, any person or entity in any jurisdiction in any country where such distribution or use would be contrary to law or regulation, or which would subject any member of the Clinigen Group to any registration requirement. No representation or warranty, express or implied, is or will be made in relation to the accuracy, fairness or completeness of the information or opinions made in this presentation.

Statements in this presentation reflect the knowledge and information available at the time of its preparation. Certain statements included or incorporated by reference within this presentation may constitute "forward-looking statements" in respect of the Group's operations, performance, prospects and/or financial condition. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions and actual results or events may differ materially from those expressed or implied by those statements. Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. No responsibility or obligation is accepted to update or revise any forward-looking statement resulting from new information, future events or otherwise. Nothing in this presentation should be construed as a profit forecast.

This presentation does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares in the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decision relating thereto, nor does it constitute a recommendation regarding the shares of the Company or any invitation or inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000. Past performance cannot be relied upon as a guide to future performance. Liability arising from anything in this presentation shall be governed by English Law, and neither the Company nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. Nothing in this presentation shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.

AGENDA

STRONG DELIVERY AGAINST ALL METRICS

Footnotes are provided in the appendices. Results are for the year ended 30 June.

CONTINUING STRONG TRACK RECORD OF GROWTH

65.6p

(+20%)

17.5p

22% CAGR GROWTH IN EPS

45.4p

41.3p (+10%)

(+24%)

33.4p

(+30%)

25.6p

22.8p (+12%)

(+30%)

54.4p

(+20%)

(+31%)

13.4p

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

CAGR growth covers the eight year period between IPO in FY12 and FY20.

ADAPTED STRATEGIES TO MITIGATE COVID-19 RISK

FINANCIAL HIGHLIGHTS

Year ended 30 June				% Growth

Adjusted results1	2020	2019	Reported	Constant	Organic6
	(£m)	(£m)		currency5

Gross revenue	504.3	456.9	10%	10%	4%
Net revenue2	466.2	407.0	15%	15%	8%
Gross profit3	220.0	182.3	21%	21%	10%
EBITDA4	131.0	100.8	30%	31%	13%
EBITDA4 as % of net revenue	28.1%	24.8%	+330bps
Profit before tax	108.5	88.3	23%
Earnings per share	65.6p	54.4p	20%
Dividend per share	7.61p	6.7p	14%
Operating cash flow7	94.8	89.8	6%
Net debt	311.9	252.4

Footnotes are provided in the appendices.

DIVISIONAL ANALYSIS

Year ended 30 June 2020 (£m)
	Commercial	Unlicensed	Clinical
Adjusted results1	Medicines	Medicines	Services	Central	Group
Gross revenue	156.7	197.0	162.2	(11.6)	504.3
Growth %	42%	(4)%	15%		10%

Net revenue2	156.7	158.9	162.2	(11.6)	466.2
Reported growth %	42%	2%	15%		15%
Organic6 growth %	29%	3%	1%		8%
Gross profit3	116.5	66.7	39.2	(2.4)	220.0
Reported growth %	47%	(4)%	18%		21%
Organic6 growth %	29%	(3)%	(4)%		10%
Gross profit % of net revenue	74%	42%	24%		47%

Administrative expenses	(32.2)	(32.3)	(16.6)	(7.9)	(89.0)
Administrative expenses % of net revenue	21%	20%	10%		19%

EBITDA4	84.3	34.4	22.6	(10.3)	131.0
Reported growth %	55%	(2)%	14%	(23)%	30%
Organic6 growth %	34%	(5)%	(12)%	(16)%	13%
EBITDA4 % of net revenue	54%	22%	14%		28%

Footnotes are provided in the appendices.

CASH FLOW MATERIALLY IMPROVED IN H2

131.0								Uses of cash flow
	(0.6)
								£m

								Product acquisitions	58.4
								Capex	23.0
		(34.9)						Dividend	9.2

					3.5	64.8		Acquisition & restructuring costs	4.3
			(23.9)			Other	(0.1)

				(10.3)
							Total	94.8


								Financed by:
								Free cash flow	64.8
								Increase in net debt	30.0

								Total	94.8

Adjusted	Joint	Working	Tax	Interest	Share	Free cash
EBITDA	Venture	capital	paid	paid	based	flow
					payments

FY20 operating cash flow conversion of 72% following substantially improved performance in H2 (123%) up from 16% in H1 as headwinds normalised
Cash flows funded increased dividend payment, enhanced capex levels for long term organic growth and the Proleukin deferred considerations
Net debt as at 30 June 2020 of £311.9m, (£288.4m excl. IFRS 16 adjustment) representing leverage of 2.3x (2.8x including CSM consideration of US$89.5m, as CY19 CSM EBITDA exceeded $16m)

Adjusted EBITDA excludes non-underlying items and includes the Group's share of EBITDA from its joint venture. *Leverage is calculated by dividing adjusted EBITDA of the Group for the last 12 months by net debt at the year end. Adjusted EBITDA includes the EBITDA from the businesses and assets acquired during the last 12 months, including on a pro forma basis the period prior to it becoming a member of the Group.

HEALTHY LIQUIDITY, FOCUSED ON DEBT PAYDOWN

Working capital
Net debt (pre IFRS 16)
Net debt (pre IFRS 16) inc
CSM consideration
Indicative range (as at
17 September 2020	£252m
£192m

£19m£12m

£361m

£305m

£288m

£65m

£44m

Net debt to end-FY21 at similar level to FY20 after peaking in H1 post $89.5m CSM pay out

Small degree of

working capital unwind

in FY21

H1	H2	H1	H2	H1	H2

FY19			FY20		FY21

Net debt expected to increase temporarily in H1 FY21 before reducing to be broadly similar to FY20 by end- FY21. Leverage expected to peak in H1 FY21 between 2.5x - 3.0x before reducing thereafter, with target leverage of 1.0x - 2.0x expected within 12-18 months
At the outbreak of COVID-19 management obtained enhanced 3.5x leverage covenant for June period (up from 3.0x) for prudence, with the banking syndicate supportive on a repeat of this for the next testing date
Liquidity remains at healthy levels and cash flows now focused upon debt paydown post CSM and Proleukin

deferred consideration payments

CLINICAL SERVICES: CONTINUED INVESTMENT FOR FUTURE PERFORMANCE

FY20 Highlights

New EVP appointed, further steps on integration post earnout
Direct-to-patientmodel in CSM a key differentiator leading to notable large contract wins
Major multi-year CTS contract win achieved in April 2020 with further notable client MSAs signed
Investment in digital and facility footprint (EU and US) underway to support contract wins
CSM Projects in phase 1: c.25% / phase 2: c.45% /
phase 3/4: c.30%
23 introductions made to Unlicensed Medicines

£m	2020	2019	Reported	Organic

Net revenue	162.2	141.7	15%	1%
Gross profit	39.2	33.2	18%	(4)%
EBITDA	22.6	19.8	14%	(12)%

Net revenue by region

FY19	65%	32%

CSM consideration of US$89.5m paid in H1 FY21 (representing 14.2x EBITDA)
COVID-19Q4 lowered organic gross profit by 3% -5%. Performance materially improved from June

FY20	57%	39%

	Europe	Americas

	Africa & Asia Pacific

Year-on-year comparisons referred to as 'organic' are a measure of growth on a constant currency basis, excluding the impact of business and product acquisitions. Acquisitions completed in the previous financial year are included on a like-for-like basis including the results for the acquisition where it is included in the comparable historical period. Organic growth is presented to aid the reader's understanding of the underlying performance of the business.

UNLICENSED MEDICINES: FOCUS ON BD PIPELINE AND DIGITISATION

FY20 Highlights

Excellent growth in GA. Clinigen EU to maximise GA
'on-demand' opportunity established
Organic net revenue and GP growth ex-Specials of 14% and 7% respectively
Material wins within MA & GA supporting near-term outlook:
- 25 MAPs signed (net 13 since Dec): 131 MAPs. Nine of top 10 programs in oncology
- 57 exclusive products (2019: 54), with 15 agreements signed post year end
Pipeline remains healthy to support medium term outlook
- MAP pipeline of 70 products (2019: 52)
- Pipeline of 47 exclusive products (2019: 22), albeit some rotation from existing portfolio
Clinigen Direct visitors from 174 countries with
- 2,600 products. Cliniport registered users 18,625 (FY19: 15,580). Broader online service offering in FY21 to maximise structural growth opportunity
COVID-19Q4 lowered organic gross profit by 1% -3% with impact continuing into new financial year

£m	2020	2019	Reported	Organic

Net revenue	158.9	156.0	2%	3%
Gross profit	66.7	69.7	(4)%	(3)%
EBITDA	34.4	35.0	(2)%	(5)%

Net revenue by region

FY19	71%			20%


FY20	69%		26%

	Europe	Americas

	Africa & Asia Pacific

'MAPs' are Managed Access Programs. Year-on-year comparisons referred to as 'organic' are a measure of growth on a constant currency basis, excluding the impact of business and product acquisitions. Acquisitions completed in the previous financial year are included on a like-for-like basis including the results for the acquisition where it is included in the comparable historical period. Organic growth is presented to aid the reader's understanding of the underlying performance of the business.

COMMERCIAL MEDICINES: DIVERSIFIED PORTFOLIO MITIGATING RISK

FY20 Highlights

Proleukin on-label usage stabilised Q3 before COVID-19 impact. Improved performance from June
Proleukin development ongoing with revitalisation opportunities beginning to materialise
Glyco and Melatonin key drivers of organic growth

£m	2020	2019	Reported	Organic

Net revenue	156.7	110.3	42%	29%
Gross profit	116.5	79.3	47%	29%
EBITDA	84.3	54.4	55%	34%

Development pipeline refilled with c. £39m revenue opportunity to support short-medium term outlook
Licenses increased to 267 (FY19: 241) with significant Erwinase agreement signed. Hunterase NDA submission in Japan
Good growth across the Acquired Products portfolio with Foscavir stable
Foscavir generic approved in EU, mitigation strategy enacted. Ethyol supply disruption in the US expected FY21. Impact of both captured within guidance
COVID-19Q4 lowered organic gross profit by 7%-9% with impact continuing in FY21, albeit performance improving

Net revenue by region

FY19	38%	28%		34%


FY20	33%		36%	31%
	Europe				Americas

Africa & Asia Pacific

FY21 GUIDANCE

Organic net revenue

growth

H1 impact of COVID-19

and other timings

Operational leverage

Capex and deferred

consideration

Cash flow and net debt

Foreign exchange

Lower end of medium term target range of 5% - 10% due to COVID-19 and Foscavir generic. Growth expected to be H2 weighted given COVID-19 impact and timing of new programs and product shipments
Clinical Services outlook improved with H1 trending well
Unlicensed Medicines H1 to be behind prior period given COVID-19 impact on hospital demand
Commercial Medicines H1 to be behind prior period due to COVID-19, Ethyol disruption and Proleukin shipments
Operational leverage to soften in FY21 before improving in FY22
Investment in infrastructure set to continue to support growth opportunities for both Unlicensed Medicines and Commercial Medicines, Erwinase in particular
Capex expected to increase to c£20m-25m; increased spend on Proleukin product development, UL2L developments, Clinical Services footprint expansion and online services roll out
Deferred payment made for CSM in H1 FY21 of $89.5m, representing 14.2x CY19 EBITDA
Positive cash generation characteristic of Group unchanged. Temporary working capital headwinds seen in H1 FY20 continuing to unwind
Net debt expected to increase temporarily in H1 due to deferred consideration payment for CSM before reducing thereafter to end FY21 broadly similar to FY20
1% strengthening in GBP/USD FY20 average rate would decrease FY21 EBITDA by c. £1.3m
1% strengthening in GBP/EUR FY20 average rate would decrease FY21 EBITDA by c. £1.2m
Current spot rates estimated to have a negligible (0%-2%) negative impact on adjusted EBITDA

Organic growth is a measure of growth on a constant currency basis, excluding the impact of business and product acquisitions.

ORGANIC NET REVENUE GROWTH

GUIDANCE AND ASSUMPTIONS

Net revenue (£m)	Assumptions

								▪ Proleukin revitalisation within new
								indications would lead to above upper
								end growth guidance achieved
								▪ Onboarding of Erwinase commencing
								in FY21 with revenues from FY22
								▪ Revenue synergies across the Group
								leading to top-end growth expectations
								▪ Continued revitalisation of Acquired
								Products portfolio
								▪ Further 'program' to 'partner' and
								regional partner agreements signed
								▪ Underlying market dynamics remaining
								positive - some impact from COVID-19
								but expected to be short term
								▪ Continued delivery from Developed
								Products pipeline
								▪ Modest expectations for lower revenue
								visibility businesses
								▪ Modest decline in UK Specials market
								▪ Material decline to Foscavir following
FY18	FY19	FY20	FY21E	FY22E	FY23E	FY24E	FY25E	generic approval in EU and expected
approval in US

Organic growth is a measure of growth on a constant currency basis, excluding the impact of business and product acquisitions. The outlook in the graph above is for indicative purposes only.
© Copyright Clinigen Group plc. All rights reserved

SCALABLE PLATFORM TAPPING INTO

UNDERSERVICED MARKETS

Supporting delivery of sustainable growth

Pharmaceutical and	Exclusive global client	Owned	Licensed
biotech clients	supply agreements	products	products

'HCPs' are Healthcare Professionals. Number of pharmaceutical and biotech clients for year ended 30 June 2020. Market size is addressable market.

GLOBAL REACH AND SCALE TO MEET MARKET NEEDS

I N T E R N AT I O N A L 14 L O C AT I O N S

C O U N T R I E S	115	E M P L O Y E E S 1,168
S U P P L I E D

'JOINING-THE-DOTS' DRIVING THE PIPELINE

'JOINING-THE-DOTS'IN PRACTICE

FULL DIGITISATION: A CRITICAL STRATEGIC FOCUS

PROLEUKIN: POTENTIAL OPPORTUNITIES

Patient numbers refer to 2019 in the US. Source: Kantar CancerMPact data and management information.

ERWINASE: MAXIMISING POTENTIAL

Indicated for paediatric patients with Acute Lymphoblastic leukaemia (ALL) who have developed hypersensitivity to E. coli-derived asparaginase
Estimated population of ALL patients eligible for Erwinase treatment of 3,500 (c.1,000 in US)
Established commercial product with 2019 sales of $177m

DOUBLE DIGIT DELIVERY; PLATFORM IN PLACE FOR ACCELERATED GROWTH

Good execution leading to strong organic growth, in spite of COVID -19
Current trading in line with market expectations
Strong pipeline of opportunities in Clinical Services and Unlicensed Medicines
Moving further to broaden online services capability
Onboarding of Erwinase and revitalisation of Proleukin set to propel long term, sustainable growth

FOOTNOTES

Adjusted results exclude amortisation of acquired intangibles and products, and other non-underlying items relating to acquisitions. Results are for the year ended 30 June.

Adjusted results exclude amortisation of acquired intangibles and products, and other non-underlying items relating to acquisitions.
Adjusted net revenue excludes Managed Access pass through revenue which varies each period dependent on the mix of programs. Adjusted net revenue is a new alternative performance measure of top line performance which is now used to manage the business as it eliminates volatility in reported revenue which can arise as a result of the mix of Managed Access Programs. Adjusted net revenue of £466.2m excludes £11.6m of intercompany sales.
Adjusted gross profit excludes the impact of exceptional charges from write down of inventories. Adjusted gross profit of £220.0m excludes £2.4m of gross profit related to intercompany sales.
Adjusted EBITDA includes the Group's share of EBITDA from its joint venture and is now shown after the adoption of IFRS 16. The Group implemented IFRS 16 'Leases' for the first time in FY20 using the modified retrospective approach. Comparatives have not been restated and therefore are not comparable to the prior year. Organic growth has been calculated excluding the impact of IFRS 16.
Constant currency growth is derived by applying the prior period's actual exchange rate to this period's result.
Year-on-yearcomparisons referred to as 'organic' are a measure of growth on a constant currency basis, excluding the impact of business and product acquisitions. Acquisitions completed in the previous financial year are included on a like-for-like basis including the results for the acquisition where it is included in the comparable historical period. Organic growth is presented to aid the reader's understanding of the underlying performance of the business. In previous reports, organic growth was calculated on a pro forma basis with the comparative period results before acquisition based on the vendors' previously reported results. The like-for-like basis now used has been necessary due to the limited reported financial information available for the products' results prior to acquisition by Clinigen. On a pro forma basis, the best estimate for organic adjusted EBITDA growth for the year ended 30 June 2020 is 12%.
Operating cash flow is net cash flow from operating activities before income taxes and interest.

STRONG TRACK RECORD OF GROWTH

	Adjusted net revenue		Adjusted EBITDA	CSM
	PRODUCT	CORPORATE			iQone
ACQUISITIONS	ACQUISITIONS

PROLEUKIN

41% CAGR GROWTH IN NET REVENUE

54% CAGR GROWTH IN EBITDA

IMUKIN£466M (ROW)

QUANTUM £407M

LINK

TOTECT

IMMC

£301M

£266M £271M

				SAVENE	IDIS

			CARDIOXANE	ETHYOL	£164M
GROUP
	LIST
FORMED		£116M	£116M
	ON AIM

FOSCAVIR		£81M
£15M	£34M


FY10	FY11	FY12	FY13	FY14	FY15	FY16	FY17	FY18	FY19	FY20

PHASE 1: 2010 - 14		PHASE 2: 2015 - 18		PHASE 3: 2018 onwards

Consolidation of initial business,	Build infrastructure,		Global positioning, differentiation
		of businesses, genuine lifecycle
acquisition of additional products	development of global vision
		partnership

Footnotes are provided in the appendices. CAGR growth covers the ten year period between FY10 and FY20.

ORGANIC SUMMARY

Net revenue by operation

	Year ended 30 June	2019	FX impact	Acquisitions	Organic	2020	Reported	Constant	Organic
		£m	£m	£m	£m	£m		currency

	Commercial Medicines	110.3	(0.9)	15.2	32.1	156.7	42%	42%	29%
	Unlicensed Medicines	156.0	(1.1)	0.0	4.0	158.9	2%	3%	3%
	Clinical Services	141.7	1.1	18.7	0.7	162.2	15%	14%	1%
	Eliminations	(1.0)	(0.2)	(4.1)	(6.3)	(11.6)

		407.0	(1.1)	29.8	30.5	466.2	15%	15%	8%

EBITDA by operation

	Year ended 30 June	2019	FX impact	Acquisitions	Organic	2020	Reported	Constant	Organic
		£m	£m	/ IFRS 16	£m	£m		currency
				£m

	Commercial Medicines	54.4	0.1	11.6	18.2	84.3	55%	55%	34%
	Unlicensed Medicines	35.0	(0.5)	1.7	(1.8)	34.4	(2)%	1%	(5)%
	Clinical Services	19.8	0.4	4.7	(2.3)	22.6	14%	13%	(12)%
	Central costs	(8.4)	(0.6)	-	(1.3)	(10.3)	(23)%	(23)%	(16)%
		100.8	(0.6)	18.0	12.8	131.0	30%	31%	13%

Adjusted results exclude amortisation of acquired intangibles and products, and other non-underlying items relating to acquisitions. Adjusted net revenue excludes Managed Access pass through revenue which varies each period dependent on the mix of programs. Adjusted net revenue is a new alternative performance measure of top line performance which is now used to manage the business as it eliminates volatility in reported revenue which can arise as a result of the mix of Managed Access Programs. Adjusted net revenue of £466.2m excludes £11.6m of intercompany sales. Adjusted EBITDA includes the Group's share of EBITDA from its joint venture and is now shown after the adoption of IFRS 16. The Group implemented IFRS 16 'Leases' for the first time in FY20 using the modified retrospective approach. Comparatives have not been restated and therefore are not comparable to the prior year. Organic growth has been calculated excluding the impact of IFRS 16. Constant currency growth is derived by applying the prior period's actual exchange rate to this period's result. Year-on-year comparisons referred to as 'organic' are a measure of growth on a constant currency basis, excluding the impact of business and product acquisitions. Acquisitions completed in the previous financial year are included on a like-for-like basis including the results for the acquisition where it is included in the comparable historical period. Organic growth is presented to aid the reader's understanding of the underlying performance of the business. In previous reports, organic growth was calculated on a pro forma basis with the comparative period results before acquisition based on the vendors' previously reported results. The like-for-like basis now used has been necessary due to the limited reported financial information available for the products' results prior to acquisition by Clinigen. On a pro forma basis, the best estimate for organic adjusted EBITDA growth for the year ended 30 June 2020 is 12%.

FOREIGN CURRENCY ANALYSIS

Split by currency

	AUD	AUD	GBP	Other
		AUD

ZAR		ZAR		ZAR
	GBP

NET	GROSS	USD	EUR	ADMIN
REVENUE	PROFIT	EXPENSES	GBP

EUR

USD	EUR	USD

FOREIGN CURRENCY RATES DURING THE

YEAR

FX rates

		30 June					Average

FX Rates	2019	2020	Change	FX Rates	2019	2020	Change

USD / GBP	1.27	1.23	(3)%	USD / GBP	1.29	1.26	(3)%
EUR / GBP	1.12	1.10	(2)%	EUR / GBP	1.13	1.14	1%
ZAR / GBP	17.83	21.37	20%	ZAR / GBP	18.34	19.74	8%
AUD / GBP	1.81	1.79	(1)%	AUD / GBP	1.81	1.88	4%

ADJUSTMENTS TO PROFIT RELATE TO

AMORTISATION AND ACQUISITIONS

Reconciliation of adjusted PBT to reported PBT

Year ended 30 June	2020	2019
	£m	£m

Adjusted profit before tax	108.5	88.3
		AMORTISATION
Adjustments

			Relating to acquired intangibles (£30.4m)
Amortisation of acquired intangibles and products	(45.4)	(37.8)		and product licenses (£15.0m)


	(0.5)			RESTRUCTURING COSTS
Acquisition costs	(5.4)
		Relating to redundencies as well as


Restructuring costs	(2.8)	(6.4)		preparation for Brexit

Increase in the fair value of contingent consideration	(11.8)	(21.4)		CONTINGENT CONSIDERATION
	(9.1)			Relating to CSM
Impairment of assets related to acquired products	(21.4)


Impairment of investment in Joint Venture	(5.9)	(21.4)		IMPAIRMENT OF ASSETS

		Relating to Totect IP and inventory and

FX revaluation on deferred consideration	(2.0)	(0.4)		excess Foscavir API



Unwind of discount on deferred consideration	(8.1)	(4.2)		IMPAIRMENT OF JV

		Relating to JV in South Africa following

Tax on joint venture in South Africa	(0.3)	(0.4)		assessment of likely future profitability

Total adjustments	(85.9)	(76.0)

Reported profit before tax	22.6	12.3

EFFECTIVE TAX RATE OF 19.8%

Taxation

Year ended 30 June	2020	2019

	Reported	Adjusted		Reported	Adjusted
£m	£m	£m		£m	£m

Profit before tax	22.6	108.5	12.3	88.3
Taxation	(8.9)	(21.5)	(7.1)	(17.7)

Profit after taxation	13.7	87.0	5.2	70.6

Effective tax rate		19.8%			20.0%

Given the increasing proportion of ex-UK activity, the Group expects the ETR to increase c. 50-100bps in FY21

ADJUSTED EARNINGS PER SHARE UP 20%

Basic earnings per share

Year ended 30 June	2020	2019	Change

Adjusted earnings	£87.0m	£70.6m	23%

Weighted average number of shares	132.7m	129.8m	2%
Adjusted basic earnings per share	65.6p	54.4p	20%
Reported basic earnings per share	10.3p	4.0p

Memo
Shares in issue at 30 June 2020	132.9m

Adjusted results exclude amortisation of acquired intangibles and products, and other non-underlying items relating to acquisitions.

DIVIDEND

Year ended 30 June	2020	2019	Change

Interim dividend	2.15p	1.95p	10%
Final dividend	5.46p	4.75p	15%

Total dividend	7.61p	6.7p	14%
Represents cash payment of	£10.1m	£8.9m

The final dividend will be payable on 2 December 2020 to shareholders on the register on 6 November 2020

NET DEBT AT £311.9M (2.3X ADJUSTED EBITDA)

Balance sheet analysis

	30 Jun	30 Jun
	2020	2019
	£m	£m
	GOODWILL & INTANGIBLES

Goodwill & intangibles	788.3	811.9
		£376.1m relates to goodwill, £208.4m to products,
Property, plant & equipment	33.8	13.6	£172.5m relates to acquisitions and £24.6m to software

	INVESTMENT IN JOINT VENTURE
Investment in joint venture	-	6.5
		Acquired as part of the Link Healthcare acquisition
Net deferred tax liability	(26.4)	(38.3)	('Novagen'). Fully impaired during the year.


	NET WORKING CAPITAL

Net working capital	46.7	12.2	Increase due to purchase and supply of Proleukin,
			investment in inventories in AAA and temporary working
Corporation tax	(3.7)	(7.3)	capital headwinds as a result of the ERP implementation

Deferred consideration	(81.1)	(109.6)	DEFERRED CONSIDERATION
		CSM (£72.6m), iQone (£6.9m) and QM Specials (£1.6m)

Derivative financial instruments	(0.1)	1.8


	757.5	690.8

Net debt

Net assets

(311.9) (252.4)

445.6 438.4

NET DEBT

Increase due to spend on acquisitions.

Bank facilities extended by £55m to £430m in February 2020

AMORTISATION

Year ended 30 June	2020	2019	Change

Software	£4.2m	£1.1m	>100%
Internally developed product licenses	£0.5m	£0.4m	25%

Amortisation included in adjusted results	£4.7m	£1.5m	>100%
Acquired intangibles on business combinations	£30.4m	£31.1m	(2)%
Acquired product licenses	£15.0m	£6.7m	>100%

Total amortisation	£50.1m	£39.3m	27%

Adjusted results include amortisation on software and internally developed IP.

IFRS 16 IMPACT

Estimated impact on P&L

£m	FY19	FY20	FY21	FY22

Administrative expenses	3.7	4.0	3.9	3.7

EBITDA	3.7	4.0	3.9	3.7
Depreciation	(3.2)	(3.4)	(3.8)	(3.5)

Operating profit	0.5	0.6	0.1	0.2
Finance costs	(0.5)	(0.6)	(0.7)	(0.6)

Profit before tax	0.0	0.0	(0.6)	(0.4)

Estimated impact on balance sheet

£m	FY19	FY20	FY21	FY22

Total assets	18.3	21.2	16.9	13.0
Total liabilities	(20.5)	(23.5)	(19.9)	(16.5)

Net assets	(2.2)	(2.3)	(3.0)	(3.5)

CAPITAL ALLOCATION FRAMEWORK

Formalisation of capital

allocation policy

Aim to prioritise use of cash and maximise shareholder value

Four principles within the

framework

Reinvest for organic	Maintain a progressive
growth	dividend policy

Maintain strong

balance sheet whilst building global scale and capabilities

To paydown and maintain	Maintain acquisitions in
net debt within a range of	line with the Group's
1-2.0x EBITDA on an	strategy with a disciplined
ordinary basis	approach to valuation

STRATEGY FOR GROWTH

Global market leader in specialist supply, labelling, packaging, distribution and management of quality-assured comparator medicines and services to clinical trials and Investigator Initiated Trials (IITs)

Three strategic pillars:

Establish Clinigen with customer compounds earlier in lifecycle (phase I/II)
Improve visibility and quality of profit generation through diversification of customer base, longer term contracts and exclusive supply arrangements
Present product opportunities to the Unlicensed Medicines division

Global leader in ethically sourcing and supplying unlicensed medicines to HCPs through Managed Access Programs (MAPs) or via Global Access

Three strategic pillars:

Prioritise and develop a deep, rich pipeline based on industry trends and innovation
Deliver a world class customer service to enable patients to get hard to access medicines
Convert Managed Access Programs (MAPs) to Global Access (GA) exclusive programs

Revitalisation of acquired medicines. Drive regional licensing agreements. Launch developed medicines from UL2L pipeline

Three strategic pillars:

Acquire and revitalise niche hospital-only and critical care products through our own infrastructure or with partners
Be the licensing partner of choice for Pharma in core and non-core territories through geographic expansion
Develop and launch licensed products from unlicensed product opportunities

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Clinigen Group plc published this content on 17 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 September 2020 08:09:02 UTC

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