TIDMUPR
RNS Number : 7835Q
Uniphar PLC
02 March 2021
Uniphar plc
2020 Preliminary Results
Uniphar plc, an international diversified healthcare services
business, announces its full year results for the year ended 31
December 2020. Delivering a strong performance and exceeding
expectations.
FINANCIAL HIGHLIGHTS
Growth
Constant
Currency
2020 2019 Reported (2)
Year ended 31 December EUR'000 EUR'000 % %
Revenue 1,823,854 1,665,283 9.5% 9.7%
Gross profit 217,252 180,602 20.3% 20.6%
Commercial & Clinical 92,193 76,754 20.1% 20.6%
Product Access 30,423 17,199 76.9% 78.5%
Supply Chain & Retail 94,636 86,649 9.2% 9.2%
Gross profit margin (Group) 11.9% 10.8%
EBITDA (1) 66,713 58,555 13.9% 14.3%
Operating profit 39,944 28,207 41.6% 42.2%
Profit before tax excluding
exceptional items 38,367 31,770 20.8% 21.2%
Net bank (debt)/cash (1) (34,419) 26,622
Basic EPS (cent) 10.6 11.5
Like for like adjusted EPS (cent)
(1) 12.6 10.0
================================== ========= ========= ======== =========
-- Strong full year 2020 results, with ROCE increasing to 18.9% from 17.3% in 2019.
-- Outperformance in the Commercial & Clinical and Product
Access divisions, delivering overall 20.3% growth in gross profit
(6.7% organic gross profit growth).
-- EBITDA growth of 13.9%, EUR66.7m (2019: EUR58.6m).
-- Adjusted EPS 12.6 cent, growth of 26% on a like for like basis.
-- Robust capital structure, with strong liquidity. Net bank
debt of EUR34.4m as at 31 December 2020 (2019: net bank cash of
EUR26.6m).
-- Dividend of EUR4.2m proposed in respect of the year ended 31
December 2020, subject to approval at the AGM.
1. Additional information in relation to Alternative Performance
Measures (APMs) are set out on pages 44 to 48.
2. Constant currency growth is calculated by applying the prior
year's actual exchange rate to the current year's result.
STRATEGIC AND OPERATIONAL HIGHLIGHTS
-- The health, safety, and wellbeing of our teams remains the
key priority during these unprecedented times.
-- Critical role played during the Covid-19 pandemic ensuring
continuity in the supply of medicines, medical devices, and related
services to the healthcare sector.
-- Gross profit growth across all trading divisions.
-- Integrated Uniphar / Durbin value proposition driving 76.9%
increase in Product Access gross profit.
-- Increase in gross margin to 11.9% from 10.8%, driven by
continued focus on higher margin services.
-- Successfully completed four acquisitions, increasing US
capabilities, retail pharmacy market share and further
strengthening our digital infrastructure:
-- Supply Chain & Retail - Acquisition of the Hickey's
Pharmacy Group further strengthening Uniphar's market share and
giving real scale in the Irish pharmacy market;
-- Product Access - Acquisition of RRD International a US-based
advisory business providing outsourced drug development services,
enhancing our regulatory expertise in targeting exclusive access
programmes (EAPs);
-- Commercial & Clinical - Acquisition of Diligent Health
Solutions a US-based healthcare communications company which
provides enhanced call centre services supporting our ability to
implement EAPs globally; and
-- Product Access - Acquisition of Innerstrength a healthcare
technology company further enhances our digital offering and
accelerates Uniphar's ability to deliver patient centric EAPs on a
global basis.
-- Continued strong cashflow performance with reported free cash
flow conversion of 111.0%, and a modest leverage of 0.6x.
-- New five-year bank facility, providing a strong base to support our growth strategy.
-- Sustainability: Implementation of sustainability framework
and governance structure, and first submission to Carbon Disclosure
Project (CDP).
Ger Rabbette, Uniphar Group Chief Executive Officer said:
"Our excellent performance in 2020 is a testament to the
dedication and commitment of our people and the continued
successful execution of our strategy. In what proved to be an
unprecedented year, we delivered reported gross profit growth
across all our divisions and achieved organic gross profit growth
of 6.7%, driven by strong momentum in our two international
divisions, Commercial & Clinical and Product Access. The
Group's robust capital structure is evidenced by our modest
leverage position of 0.6x and strong free cash flow conversion.
2020 was another important year for the Group from a strategic
perspective and we completed a number of key value-enhancing
acquisitions including RRD International and Diligent Health
Solutions in the US and Hickey's Pharmacy Group and Innerstrength
in Ireland.
As we look forward to 2021 and beyond, our people's safety and
wellbeing continues to be our number one priority. Meanwhile, we
remain very much on course with our strategy of doubling pro-forma
EBITDA within 5 years of IPO with continued strong growth in
earnings per share on a like for like basis. We are focused on:
building a pan-European platform in Commercial & Clinical and
will shortly enter Germany organically; providing a global platform
in Product Access and further growing our US expertise; and driving
market share dominance in Supply Chain & Retail.
Our medium-term guidance therefore remains unchanged and we are
confident of achieving our strategic objective of doubling
pro-forma EBITDA within 5 years of IPO."
Analyst presentation
A presentation for investors and analysts will be held by
conference call at 9am, today, 2 March 2021. To register for the
call please visit www.uniphar.ie .
A copy of the presentation and announcement will be available on
our website at the time of the call.
Contact details
Uniphar Group Tel: +353 (0) 1 428 7777
Tim Dolphin, Chief Financial Officer
Brian O'Shaughnessy, Group Director of Corporate Development
Q4 PR Tel: +353 (0) 1 475 1444
Iarla Mongey, Public Relations Advisor to Uniphar Group
Davy (Joint Corporate Broker, Nominated Advisor Tel: +353 (0) 1 679 6363
and
Euronext Growth Advisor)
Fergal Meegan
Barry Murphy
Orla Cowzer
RBC Capital Markets (Joint Corporate Broker) Tel: +44 (0) 20 7653
4000
Jonathan Hardy
Jamil Miah
Stifel Nicolaus Europe Limited (Joint Corporate Tel: + 44 (0) 20 7710
Broker) 7600
Matt Blawat
Ben Maddison
Francis North
About Uniphar plc
Headquartered in Dublin, Ireland, Uniphar plc is an
international diversified healthcare services business servicing
the requirements of more than 200 multinational pharmaceutical and
medical technology manufacturers across three divisions -
Commercial & Clinical, Product Access and Supply Chain &
Retail. With a workforce in excess of 2,600, the Group is active in
Ireland, the UK, Benelux, the Nordics and the US.
The Group's vision is to improve patient access to
pharmaco-medical products and treatments by enhancing connectivity
between manufacturers and healthcare stakeholders. Uniphar delivers
this through innovative solutions and highly experienced teams,
driving growth and profitability.
Commercial & Clinical
In Commercial & Clinical the Group provides sales, marketing
& distribution solutions to multinational pharmaceutical and
medical device manufacturers on an outsourced basis. Active in
Ireland, the UK, Benelux, the Nordics and the US, the Group is
growing with its clients to provide pan-European solutions. Uniphar
has built a fully integrated multi-channel solution that is
supported by our highly experienced and clinically trained teams
combined with the leveraging of digital technology which is our
differentiator that allows us to deliver consistently exceptional
outcomes for our clients.
Product Access
In Product Access the Group has two distinct service offerings:
1) "On Demand", which are pharmacy led solutions for sourcing and
supplying unlicensed medicines to meet the needs of both retail and
hospital pharmacists; and 2) "Exclusive Access", which are
manufacturer led solutions for controlling the release of
speciality medicines for specifically approved patient populations
in agreed markets. The Group currently delivers product access
solutions on a global basis.
Supply Chain & Retail
Uniphar is an established market leader in Ireland with c.50%
market share in the wholesale/hospital market, supported by a
network of 346 owned, franchised and symbol group pharmacies. The
business supports the diverse customer base through the provision
of strong service levels coupled with innovative commercial
initiatives. Supply Chain & Retail is an Irish only business
for the Group, although the manufacturer relationships and
infrastructure are utilised for the benefit of the international
divisions.
Cautionary statement
This announcement contains certain projections and other
forward-looking statements with respect to the financial condition,
results of operations, businesses, and prospects of Uniphar Group.
These statements are based on current expectations and involve risk
and uncertainty because they relate to events and depend upon
circumstances that may or may not occur in the future. There are a
number of factors which could cause actual results or developments
to differ materially from those expressed or implied by these
projections and forward-looking statements. Any of the assumptions
underlying these projections and forward-looking statements could
prove inaccurate or incorrect and therefore any results
contemplated in the projections and forward-looking statements may
not actually be achieved. Recipients are cautioned not to place
undue reliance on any projections and forward-looking statements
contained herein. Except as required by law or by any appropriate
regulatory authority, Uniphar Group undertakes no obligation to
update or revise (publicly or otherwise) any projection or
forward-looking statement, whether as a result of new information,
future events or other circumstances.
Overview
Uniphar's performance exceeded expectations in 2020, driven by
outperformance in our Commercial & Clinical and Product Access
divisions. We continue to deliver on our growth strategy,
broadening our geographic reach and increasing our market share
while also increasing our focus on the Group's sustainability
agenda.
We are building out our global and European platforms for
Product Access and Commercial & Clinical divisions
respectively, through acquisition and organic growth, while at the
same time investing in our Supply Chain & Retail division.
The Group completed four acquisitions during the period with two
of these based in the US. In keeping with our focus on digital
capabilities, and in a year where the world has seen increasing
reliance on digital, acquisitions in the areas of patient-centric
technologies and telehealth further enhance our ability to grow and
meet new market demands.
Acquisitions during the year were as follows:
-- Hickey's Pharmacy Group - adds 36 community pharmacies in
prime suburban locations which complements our existing footprint
and increases to 346 our Uniphar supported network;
-- RRD International - a US-based pharmaceutical advisory
business providing outsourced drug development services, enhancing
our regulatory expertise in supporting EAPs;
-- Diligent Health Solutions - a US-based healthcare
communications company which provides enhanced call centre
services, increasing our ability to implement EAPs globally;
and
-- Innerstrength - a healthcare technology company further
enhances our digital offering and accelerates Uniphar's ability to
deliver patient centric EAPs on a global basis.
Group revenues increased by 9.5% to EUR1,823.9m (2019:
EUR1,665.3m). The increase in revenues, coupled with the growth in
our gross profit margin from 10.8% to 11.9% which is due to
continued focus on higher margin opportunities, contributed to
20.3% overall growth in gross profit during the period including
6.7% organic gross profit growth. The improvement is primarily
driven by the strategy of expanding into higher growth, higher
margin businesses, with the acquisitions completed during 2019 and
2020 delivering on that strategy. Gross profit generated from
outside of Ireland increased by more than 50% in the year, with the
expansion of Commercial & Clinical's pan-European footprint,
growth in Product Access driven by the integration of Durbin and
the full year impact of prior year acquisitions.
Year on year, EBITDA has increased by EUR8.2m (13.9%) to
EUR66.7m (2019: EUR58.6m) benefiting from the increase in gross
profit as a result of the outperformance in our two international
divisions. Adjusted earnings per share amounted to 12.6 cent, an
increase of 26% on a like for like basis.
The Group's ROCE has increased in 2020, reaching 18.9% up from
17.3%, reflecting both the increase in profit in the year driven by
organic growth and strong performance from our 2019 acquisitions,
in particular Durbin, as well as the Group's strong cash
performance driven by continued tight working capital management.
The investment made during 2020, both from a capital and
acquisitions perspective, will deliver further benefits and growth
in the coming years.
The Group maintains its solid financial position, with a robust
Balance Sheet, and excellent liquidity evident by the strong
reported free cash flow conversion of 111%. The strong free cash
flow performance is driven by continued focus on working capital
management, and also reflects favourable timing impacts which are
expected to unwind in Q1 2021, which when adjusted for, brings free
cash flow conversion back to 72% which is slightly above
expectations (60% - 70%).
During the year, the Group completed a planned refinance of our
banking facilities with our existing syndicated banking partners.
The new five-year agreement with the option of a two-year extension
almost doubles the Group's available facilities, providing a
EUR150.0m revolving credit facility and a EUR90.0m uncommitted
accordion facility ensuring a strong base to support our growth
strategy. In July 2020, the Group increased its non-recourse
financing arrangement by EUR12.0m to EUR80.0m.
The Group closed 2020 with a net bank debt of EUR34.4m (2019:
net bank cash of EUR26.6m) and a modest leverage position of 0.6x,
providing a strong platform to support future growth and
investment.
The Group continues to focus on its strategy of building a
pan-European offering in our Commercial & Clinical division. In
Product Access, we will continue growth through expanding our
capabilities and access to clients globally, both of which enhance
our ability to attract new clients and grow. In Supply Chain &
Retail, we continue to leverage our high-tech infrastructure and
long-standing manufacturer relationships to grow our market
share.
Sustainability
2020 also saw an increased focus on the Group's sustainability
agenda. Whilst sustainability and responsible business have always
been at the core of what we do, we made a number of important
structural changes during 2020 to enhance the way in which we
coordinate, measure, monitor and report our sustainability efforts,
which will ensure that the sustainability agenda and priorities
form an integral part of our planning and decision-making process.
We also progressed a number of sustainability initiatives including
a Group-wide carbon foot-printing exercise and our first response
to CDP (Carbon Disclosure Project).
Current trading
The health, safety, and wellbeing of our teams continues to be
the Group's key priority. The pandemic has emphasised the critical
role Uniphar plays in the healthcare infrastructure. Our strong
manufacturer relationships, together with exclusive distribution
agreements, digitally enabled solutions, and the logistical
infrastructure created across multiple locations, have enabled the
Group to ensure continuity of services while meeting the needs of
our customers. The Group has traded in line with expectations for
the first two months, despite the challenging trading
environment.
The Group's outperformance in 2020 demonstrates the robustness
of the business model, our deep expertise across our chosen
specialities, and the diversity of the services we provide across
the three divisions. While the Covid-19 trading environment has
given rise to challenges, it has also created several opportunities
for growth. These new opportunities coupled with our investment in
digital solutions and diversity in our products and services have
helped mitigate the impact of Covid-19 on the business and has
resulted in the Group delivering overall organic gross profit
growth of 6.7% for 2020.
Cash flow management remains central to the business, and the
Group delivered reported free cash flow conversion of 111% and
remains in a strong liquidity position.
As we deliver on our strategy and on the growth we promised, the
business and management team are committed to maximising the full
potential of our recent acquisitions and delivering long-term value
for all our stakeholders.
Outlook
Building on the 2020 outperformance, we are well positioned to
deliver our 2021 plan and our medium-term guidance remains
unchanged. We remain focused on our strategy of building a
pan-European offering in our Commercial & Clinical division. In
Product Access, we will continue to drive growth through expanding
the capabilities and access to clients globally, both of which
enhance our ability to attract new clients and grow. In Supply
Chain & Retail, we continue to leverage our high-tech
infrastructure and long-standing manufacturer relationships to grow
our market share, with the acquisition of Hickey's Pharmacy Group
giving our retail pharmacy group real scale in the market.
Uniphar is well positioned to deliver organic gross profit
growth across all divisions in line with its medium-term outlook,
with the additional benefit of the full year impact of recent
acquisitions . Our medium-term divisional organic gross profit
growth guidance remains unchanged:
-- Product Access: Double digit
-- Commercial & Clinical: Mid-single digit
-- Supply Chain & Retail: Low-single digit
We are confident we have the strategy, the market opportunity,
the platform, the competitive edge, and the team in place to double
2018 pro-forma EBITDA within five years from IPO.
Acquisitions and integration update
During the year, Uniphar completed four acquisitions, these
acquisitions further increase our presence in the US market, the
retail pharmacy sector, and strengthen our digital capabilities and
infrastructure.
Commercial & Clinical
Acquisition update
In Q3 2020, Uniphar acquired Diligent Health Solutions
(Diligent), a US-based healthcare communications company, which
provides enhanced contact centre services, focused on the delivery
of medical information to patients, healthcare practitioners and
payors. The acquisition is highly complementary to Uniphar's
present capabilities and will enhance our mission to build
connectivity between our clients and key healthcare stakeholders
utilising best in class digital capabilities.
The combined business creates opportunities through the
provision of communication technologies, across both the Commercial
& Clinical and Product Access divisions. It enhances both
divisions value proposition immediately, while adding the necessary
capability to deliver EAPs globally. With this acquisition, Uniphar
further enhances its offering to Life Sciences clients as a single
solutions provider across the entire life-cycle of the product.
Integration update
The 2019 acquisitions of the EPS Group and M3 Medical are now
fully integrated into our MedTech business unit. The increased
scale in people and geographies has further positioned Uniphar as
one of the largest sales, marketing and distribution companies for
our manufacturer partners in Europe. We continue to invest in
business development resources to increase our footprint in Europe
beyond Ireland, the UK, Benelux, and the Nordics.
Product Access
Acquisition update
In 2020, we completed two acquisitions within the Product Access
division.
RRD International (RRD), acquired in Q4 of 2020, is a US-based
pharmaceutical advisory business providing outsourced strategic
consulting and execution services throughout the early stages of a
product's development. The highly experienced RRD team, which has
supported the FDA approval on a significant number of assets,
brings deep US regulatory insights which will further accelerate
our growth towards market leadership. The acquisition marks an
important strategic milestone for the Group and will support
Uniphar's delivery of US-based EAPs.
The acquisition of Innerstrength in Q1 2020 provides the Group
with th e enhanced ability to deliver digitally enabled 'patient
centric' EAPs on a global basis. The Innerstrength technology
empowers healthcare professionals to deliver unique personalised
programmes for individual patients. It gives us a platform to
broaden our support services to the pharmaceutical industry, around
patient awareness, and education to drive adherence .
Integration update
As the Group continues to progress its strategy of becoming a
leading global player in the Product Access market, Durbin
represented a key strategic acquisition for the Group in 2019. The
combined Uniphar and Durbin value proposition has been very well
received by our clients and the enhanced attractiveness of the
combined offering is evident in the 28.9% organic gross profit
growth in the Product Access division this year.
Supply Chain & Retail
Acquisition update
In Q4 2020, the Group completed the acquisition of the Hickey's
Pharmacy Group. This acquisition will allow our Supply Chain &
Retail division to leverage our high-tech scalable infrastructure,
increase the division's buying power and consolidate our position
as a leader in the Irish retail pharmacy market with 346 symbol
group and supported stores.
The acquisition of Hickey's Pharmacy Group adds 36 community
pharmacies in prime suburban locations which complement Uniphar's
existing footprint. Hickey's Pharmacy Group additional scale and
retail excellence will add to this best in class offering, which we
will continue to invest in and advance. Building on its track
record, Uniphar's experienced management team will ensure the
integration is executed effectively to achieve identified
benefits.
The Supply Chain & Retail division has demonstrated
resilience during Covid-19 which has reinforced the significance
and importance of the role that Uniphar plays in the national
healthcare infrastructure.
Integration update
During 2019, the Group completed the acquisition of 17 retail
pharmacies which are operating under the Allcare and Life brands
throughout the Republic of Ireland. These newly acquired pharmacies
are fully integrated and have performed resiliently in the period,
demonstrating the benefits which the expertise, support and
purchasing power that the Uniphar symbol group offering brings to
pharmacies under its management.
Principal Risks & Uncertainties
The Group's Risk Management Policy provides the framework to
identify, assess, monitor, and manage the risks associated with the
Group's business. It is designed to enable the Group to meet its
business objectives by appropriately managing, rather than
eliminating, these risks.
2020 Highlights
The Group continues to ensure that the risk management framework
is integrated in the day-to-day activities across the business.
During the year ended 31 December 2020, the Group carried out the
following:
-- Review of the risk management process in operation across the
business resulting in refined risk assessment methods;
-- Review of the Group Risk Register producing an updated
consolidated list of the key risks facing the Group at this time;
and
-- Enhanced focus on key risk areas in 2020 including Brexit and Covid-19 related risks.
Having completed the overall risk assessment process for the
year, the Group has determined that the risk associated with the
loss of competitive position should be separately identified as a
key risk. This risk was previously identified on the Group Risk
Register and is now recognised as a principal risk. The risk
associated with inventory losses and provisions is no longer
separately identified as a principal risk but remains on the
Group's Risk Register. Enhanced focus has been brought to key risk
areas in 2020, including Brexit and Covid-19. We continue to
monitor these key areas, and the impact they may have on the
Group.
The key principal risks and uncertainties faced by the Group are
summarised as follows:
Strategic Risks
-- Brexit - The UK left the EU in 2020, which poses several
risks for the Group due to uncertainty and complexities as to the
future fiscal and regulatory landscape in the UK. This may have a
negative impact on supply and trade. Brexit also has the potential
to create market uncertainty and currency fluctuations which could
impact the translation of our UK operations into the Group
reporting currency.
-- Acquisitions - Growth through acquisitions continues to
remain a key strategy for the Group. Failure to identify, complete
and integrate acquisitions successfully may directly impact the
Group's projected growth.
-- Economic & geopolitical risk - The global macroeconomic,
regulatory, political, and legal environment may impact the markets
in which we operate and in turn our client and supplier base. This
may adversely affect the financial and operational results of the
Group.
-- Key personnel & succession planning - Failure to attract,
retain and develop the skills and expertise of key individuals,
this may adversely impact the Group's performance.
-- Market perception & reputational risk - Failure to
deliver in line with market expectations may result in reputational
damage, impacting the Group's ability to achieve its strategic
targets.
-- Loss of competitive position - Failure of the Group to
respond to any changes in the environment in which it operates
which may result in loss of market share, which may put pressure on
profitability and margins.
Operational Risks
-- Covid-19 - Covid-19 and its implications continue to evolve
and change. Business disruption arising from further waves of the
Covid-19 virus may result in but is not limited to the following,
supply chain disruption, postponement of certain elective
surgeries, curtailment of travel and impact on staff.
-- IT systems - Digital capabilities are a specific strategic
offering of Uniphar, interruption or downtime may have a negative
impact on the Group's operations, financial, and competitive
positions.
-- Cybercrime - Failure to protect against the ongoing threat of
a cyber-attack could lead to a breach in security, impacting
operations, financial transactions, and sensitive information.
-- Business interruption - External factors such as, natural
disasters, environmental hazard or industrial disputes may result
in potential lost sales and loss of customer loyalty.
-- Health & safety - Failure to implement and follow proper
health and safety procedures may have adverse effects on employees
or patients.
-- Laws, regulations & compliance - Failure to operate under
any of the stringent laws and regulations the Group is subject to
could result in financial penalties, reputational damage, and a
risk to business operations.
Financial Risks
-- Foreign currency - The Group's reporting currency is Euro.
Exposure to foreign currency is present in the normal course of
business, together with the Group operating in jurisdictions
outside of the Eurozone.
-- Treasury - The Group is exposed to liquidity, interest rate and credit risks.
Operational overview
Commercial & Clinical
Growth
Constant
2020 2019 Reported currency
Year ended 31 December EUR'000 EUR'000 % %
Revenue 269,780 204,031 32.2% 32.8%
Gross profit 92,193 76,754 20.1% 20.6%
Gross profit margin 34.2% 37.6% (340)bps
========= ========= =========
Expertise and flexibility enable our teams deliver a strong
performance by meeting the needs of our manufacturer clients and
healthcare customers during the challenge of the pandemic.
We continued our expansion of our Commercial & Clinical
division, both geographically and through our client base in 2020.
With a workforce of over 1,200, a well invested multi-channel
platform and an ability to serve 13 countries, we were able to
deliver flexible solutions ensuring our healthcare customers
continued to get access to the information and products as
required.
Clinically trained teams, therapeutic focus and our digitally
enabled offering are our differentiators. With a continued
investment in quality recruitment, operational excellence and
business development we saw several new client wins across multiple
geographies. Despite Covid-19 having an impact on all markets in
which the Commercial & Clinical division operates, our
expertise and flexibility delivered 9.6% organic gross profit
growth across our Commercial & Clinical division, exceeding our
expectations, and emphasising our role as a trusted partner to our
clients and customers across Europe. While lockdowns saw the
cancellation of many elective procedures across Europe and the
increased activity across our health systems challenged the
traditional face to face interactions with stakeholders, by
combining clinically trained teams, strong manufacturer
relationships and established supply chain infrastructure we were
able to source, supply and educate our customers on products within
our critical care portfolio.
MedTech
Focus going into 2020 was the growth of our client base, with
the ability to leverage these relationships across multiple
geographies in Europe. Adding 15+ MedTech clients over the last 12
months we now work with over 30 clients in two or more geographies.
Highlighting our ability to move across borders, we were appointed
to represent a number of our clients in Germany and committed to
enter this important market for Q1 2021. With our therapeutic
expertise and our strong portfolio of physician led products we
will continue to focus on the growth of our MedTech offering into
key markets across Europe.
Due to the delay in certain elective procedures throughout 2020,
we have seen shifts in our sales patterns across specialties. As
health systems realigned to meet immediate needs during the
pandemic we saw strong growth in the areas of critical care,
patient monitoring and decontamination. Focusing on innovation we
signed new agencies who provide specialised equipment to carry out
comprehensive decontamination of high-use clinical environments.
Importantly this enabled Uniphar to assist our customers in
identifying potential ways of reducing turnaround times and
increasing the throughput of procedures and patients. We saw a
strong return in the level of elective procedures being carried out
in the second half of the year. With the pandemic still a focus we
continue to monitor the situation in all our markets, ensuring we
are well placed to provide ongoing solutions for both our
manufacturer clients and healthcare customers.
Driving long term success is a key focus for Uniphar, we
continue to invest heavily in our people and our teams. We have
made a number of additional appointments to our senior management
teams across the UK and Europe to drive future growth. All teams
leverage the central support services across HR, Finance, Quality
and IT to deliver consistent operational excellence, while enabling
local market expertise at a commercial level.
Pharma
Our Pharma business unit provides insight-driven, multi-channel
solutions for our pharmaceutical partners. Our approach enables our
teams to engage with healthcare professionals in a manner which is
effective in delivering clear, targeted information that helps all
healthcare stakeholders.
In a regulated environment where face to face meetings have
become more difficult, our Pharma business units digitally enabled,
multi-channel account management teams have been able to add value
for our clients and their targeted customers. With infrastructure,
databases, and the ability to build specialist teams, our Pharma
business experienced high organic gross profit growth in 2020.
Success was driven by our teams' ability to renew contracts with
existing clients and implement new business wins at pace. The
growth of Pharma within the Commercial & Clinical division has
resulted in a change in the overall divisional gross profit margin.
Over the last 12 months, Uniphar has built and deployed several
multi-channel enabled teams across our targeted markets and
continue to successfully offer existing pharmaceutical clients
services across Ireland, the UK, Benelux and the Nordics.
The Covid-19 crisis has significantly accelerated the structural
shift towards digitally enabled communications in the healthcare
market. The acquisition of Diligent Health Solutions, with its
enhanced call centre services, brings additional capabilities to
our Commercial & Clinical division. Post-acquisition we have
seen several cross-selling opportunities, with the additional
skills sets of medical information and patient concierge services
providing value to our partners. While US-based, our focus is to
enable these service offerings across our Commercial & Clinical
and Product Access targeted geographies.
Outlook
The ability of the Commercial & Clinical division to
continue to grow through the market disruption caused by the
Covid-19 pandemic, shows the strength inherent in Uniphar's
offering. Expansion into the Benelux and the Nordics has been
successful and will continue to provide opportunities to grow our
long-standing manufacturer partnerships into new geographies. In
the medium-term, the Group is focused on identifying further Pharma
and MedTech acquisitions to build on our growing platform, serving
clients across multiple geographies
Product Access
Growth
Constant
2020 2019 Reported currency
Year ended 31 December EUR'000 EUR'000 % %
Revenue 187,505 132,245 41.8% 43.2%
Gross profit 30,423 17,199 76.9% 78.5%
Gross profit margin 16.2% 13.0% 320bps
======== ======== ========
Achieving strong growth across the board this year, we continue
to see our Product Access division deliver on its strategic
potential as a driver of growth for the Group.
Over the last 12 months, the business outperformed on
expectations, returning 28.9% organic gross profit growth. Product
Access has made significant progress towards the goal of becoming a
leading player in the global managed access market.
Providing unlicensed and speciality medicines to specific
patients in specific markets around the world, both the On Demand
and Exclusive Access business units performed ahead of expectations
in 2020. The strength of this performance was driven by the
successful integration of Durbin into the Group and the achievement
of the synergies identified at the time of its acquisition in 2019.
A combination of a highly skilled team, strong manufacturer
relationships and digital infrastructure together with Durbin's
global distribution capability has resulted in winning several key
projects over the last 12 months.
The acquisition of healthcare technology company Innerstrength
in March 2020, combined with the enhanced call centre capabilities
of Diligent Health Solutions, enhances Uniphar's ability to
implement global patient-centric managed access programmes (MAPs).
While the acquisition of RRD International, with its highly
experienced clinical team, enables our organisation to design and
run specific MAPs.
On Demand - extending global capabilities
The division's On Demand service, which provides access to
unlicensed or difficult to source medicines, continues to grow.
Benefiting from the expertise of our global sourcing team and
efficiencies delivered through our eCommerce platform, we are
focused on meeting the growing global demand for unlicensed
medicines.
The integration of Durbin further extends our reach and enables
improved procurement and global sales networks. The surge in
requirements for certain medicines, brought about by the Covid-19
pandemic has resulted in increased activity in specific therapeutic
areas. While this is positive from a business perspective, it is a
situation we continue to monitor closely.
Durbin's specialism in complex and bespoke distribution has
enabled Uniphar to meet the growing demand for the supply of
medicines and medical devices to Non-Governmental Organisations
(NGO's). Aligned with our sustainability objectives, we have
increased focus on shaping the divisional capabilities to help meet
patient needs, where supply chains can be complex and situations on
the ground difficult. We have received positive support from our
manufacturer clients and have negotiated several procurement
contracts to deliver products directly from the manufacturer to
NGO's.
Exclusive Access - patient centric offering
During 2020, the Exclusive Access business achieved significant
organic gross profit growth, contributing to the overall strong
divisional performance. Continued growth is due to the large number
of new programme wins over the last 18 months, with 15 new
exclusive access programmes won in 2020. Increased scale has
created several new business opportunities in specific therapeutic
areas with key programmes being extended into new geographies. The
impact of Covid-19 has resulted in the postponement of the
reimbursement processes on certain products, extending programme
durations beyond forecasted timelines.
Targeting primarily the post-licence, pre-reimbursement phase of
the product lifecycle, the combination of Uniphar's long standing
reputation with manufacturers and Durbin's global distribution
capability has proved attractive to the manufacturers of speciality
medicines. The integration of Innerstrength's web-based technology,
which facilitates patient education and treatment adherence, has
enhanced the development of the Group's new patient support portal
'uniphi'. Continued investment in our digital infrastructure helps
manufacturers capture real world data to assist them with the local
reimbursement processes.
Long-term success in Exclusive Access will be achieved through
our capacity to deliver services globally. The acquisition of
Durbin provided Uniphar with the distribution capability to deliver
to over 160 countries across the world. Our enhanced communication
capability through the combined acquisition of Diligent Health
Solutions and Innerstrength has allowed us to implement virtual
interactions with healthcare stakeholders internationally, enabling
Uniphar to deliver our patient centric programmes for our
manufacturer clients worldwide.
Outlook
We continue to build the platform supporting the growth of
Product Access. With our recent acquisitions we have enhanced
Uniphar's existing offering to manufacturer clients. With increased
investment in place, supported by a strong management team, we see
continued double-digit gross profit growth across the division.
Supply Chain & Retail
Growth
Constant
2020 2019 Reported currency
Year ended 31 December EUR'000 EUR'000 % %
Revenue 1,366,569 1,329,007 2.8% 2.8%
Gross profit 94,636 86,649 9.2% 9.2%
Gross profit margin 6.9% 6.5% 40bps
========= ========= ========
A strong performance delivered in 2020, underlining Uniphar's
essential role as a key part of the national health
infrastructure.
The Supply Chain & Retail division has had a strong year,
despite the significant pressure put on the pharmaceutical supply
chain, both in Ireland and globally, as a result of the Covid-19
pandemic. The normal patterns of demand were disrupted during the
year, but despite this, the pharmaceutical supply chain from
pre-wholesale through to wholesale and retail pharmacy remained
robust, and Uniphar continued to fulfil its role as a key part of
the national health infrastructure in Ireland.
Despite the pandemic, we continued to work on our strategic
objectives around providing our retail pharmacy customers with
additional services to support their profitability and moving with
them towards a 'one-pipe supply'.
In Q4 2020, we acquired the Hickey's Pharmacy Group, one of the
top five retail pharmacy brands in the Irish market. The
acquisition brings to 346 the number of pharmacies owned,
franchised, or supported by Uniphar, giving us real scale in the
Irish market.
Pre-Wholesale - delivers a strong performance
The Pre-Wholesale business delivered a strong performance again
this year, despite the pressures of both Brexit and the Covid-19
pandemic. The combination of our warehouse capacity and the
efficiency of our supply chain operations enabled us to get product
to customers and patients in even the most trying of
conditions.
In the early stages of the pandemic, the Pre-Wholesale team
supported our manufacturers to ensure continuity of supply of
specific products identified for the treatment of Covid-19. We
continue to support our manufacturers with their changing
requirements as the pandemic landscape continues to evolve.
Brexit remained a significant factor as manufacturers finalised
preparations for the end of the transition period on 31 December
2020 and the final withdrawal of the UK from the EU. In
preparation, we supported our manufacturers requirement to hold
additional stock to mitigate against any disruption of supply to
customers and patients.
The collaborative planning of our team underpinned our effective
response to these two unprecedented situations which has
strengthened our relationships with our manufacturers and customers
alike.
Wholesale - solid performance in demanding conditions
The patterns of demand in 2020 were not typical, with many of
the usual seasonal peaks and troughs made redundant by the impact
of the Covid-19 virus. At the start of the pandemic there was a
huge spike in demand as the public reacted to the first lockdown.
For a period of three weeks, the number of products picked and
packed everyday reached double the normal levels. Our warehouse
teams worked around the clock to meet that demand and demonstrated
just how robust our distribution operation is.
Our overriding aim throughout 2020 has been to keep our
colleagues safe and ensure that we could continue to do the
essential work of distributing medicines to every hospital and
pharmacy in the country. All teams that can work from home have
been doing so since mid-March 2020 and we expect this to continue.
We continue to work closely with the HSE and other key stakeholders
to secure national supply and maintain near normal service levels
to hospitals and pharmacies throughout the darkest days of the
crisis.
Our strong operational performance during the pandemic has led
to new business, as retail pharmacy customers recognise not just
the value of our offering, but the reliability of our service.
During the year, we invested c.EUR10m in a new large-scale
high-tech distribution centre in Annacotty, Co. Limerick, which is
due to come into operation in early 2021. When it is fully
operational, it will give us an additional 30% capacity which will
both ensure we have the headroom to continue to manage peaks of
activity as well as allowing us scope for growth.
Retail Pharmacy - delivering growth to our customers and
partners
2020 has been an extremely challenging year for all retail
pharmacies. As the most accessible source of health advice
throughout the pandemic, retail pharmacy teams have done an
exceptional job and have made significant changes to how they work
to help manage the extra pressure. We have been working hard to
support our community pharmacy customers and our own retail
pharmacy network.
Our symbol group offering delivers significant value to our
stakeholders and enables us to leverage our digital platforms,
drive efficiency and deliver services through community
pharmacies.
The emphasis on 2020 has been on supporting pharmacies to make
the most of digital technology in their businesses. One of the side
effects of the Covid-19 crisis has been an acceleration in the
sector's adoption of digital technologies, with most GP surgeries
moving to e-prescribing almost overnight and many customers moving
from store to online shopping. Retail pharmacies have had to adapt
quickly.
Although our community pharmacy customers had the ability to
order online for a number of years, we further enhanced this
offering with a new upgraded version of Marketplace, which is our
e-commerce hub that allows our community pharmacy customers to find
the products they need at the best price available.
We have been working with our symbol group customers to develop
and enhance the Life and Allcare consumer websites and both brands
have developed patient apps, which allow pharmacists to communicate
with their patients and strengthen the clinical, as well as the
commercial, link between customer/patient and their local Life or
Allcare pharmacy.
Both our Life and Allcare brands grew in 2020. The Hickey's
Pharmacy Group acquisition provides Uniphar with successful stores
in key suburban locations that are complementary to sites already
under Uniphar retail brands. The acquisition is also immediately
earnings accretive.
Outlook
Looking forward, it is almost certain that some changes that
occurred in the market as a result of Covid-19 will continue long
after the pandemic is under control. A key focus for 2021 will be
the integration of the Hickey's Pharmacy Group and the realisation
of the synergies in the acquisition. We see the move to digital
platforms increasing across the sector and we are continuing our
investment in digital, both within our own business and in support
of our symbol group and other customers. We expect further growth
in own brand products and the consumer business, as our symbol and
support membership grow. Our investment in our Limerick facility
will give us a second high-tech distribution centre in Ireland and
provide the operational capacity to allow us to continue to grow
market share across the division.
Financial Review
Summary financial performance
Growth
Constant
2020 2019 Reported currency
Year ended 31 December EUR'000 EUR'000 % %
IFRS measures
Revenue 1,823,854 1,665,283 9.5% 9.7%
Gross profit 217,252 180,602 20.3% 20.6%
Operating profit 39,944 28,207 41.6% 42.2%
Basic EPS (cent) 10.6 11.5
Alternative performance measures
Gross profit margin 11.9% 10.8%
EBITDA 66,713 58,555 13.9% 14.3%
Adjusted EPS (cent) 12.6 14.3
Like for like adjusted EPS (cent) 12.6 10.0
Net bank (debt)/cash (34,419) 26,622
Return on capital employed 18.9% 17.3%
Revenue
Revenue growth of 9.5% was achieved through a combination of
strong organic growth, particularly driven by the strong
performance of Commercial & Clinical and Product Access,
together with the full year impact of the 2019 acquisitions.
Gross profit
The increase in revenues, coupled with the growth in our gross
profit margin from 10.8% to 11.9%, due to improvements in our
revenue mix, contributed to 20.3% overall growth in gross profit
during the period including 6.7% organic gross profit growth. The
improvement is primarily driven by the strategy of expanding into
higher growth, higher margin sectors and businesses, with the
acquisitions completed during 2019 and 2020 delivering on that
strategy. Gross profit generated from outside of Ireland increased
by more than 50% in the year, with the expansion of the
pan-European footprint in Commercial & Clinical, growth in
Product Access driven by the integration of Durbin and also the
full year impact of prior year acquisitions.
Divisional gross profit
Growth
Year ended 31 December 2020 2019 Reported Constant
EUR'000 EUR'000 % Currency
%
Commercial & Clinical 92,193 76,754 20.1% 20.6%
Product Access 30,423 17,199 76.9% 78.5%
Supply Chain & Retail 94,636 86,649 9.2% 9.2%
========== ==========
217,252 180,602
========== ==========
EBITDA
Year on year, EBITDA has increased by EUR8.2m (13.9%) to
EUR66.7m, reflecting the increase in gross profit, partially offset
by an increase of 23.3% in operating costs in the year which is
primarily driven by the full year impact of the 2019
acquisitions.
Exceptional items
Exceptional costs incurred during the year of EUR4.8m are
primarily due to acquisition related costs, with these costs
partially offset by the net release of deferred contingent
consideration, following a review of the expected performance
against earn-out targets and contractual obligations. See note 3
for further details.
Earnings per share
Basic earnings per share at 10.6 cent, decreased from 11.5 cent
in 2019. The increase in underlying earnings, was offset by an
increase in the weighted average number of shares when compared to
2019.
The weighted average number of shares in 2020 was 262,436,000
compared to 183,546,000 in 2019, following our successful IPO in
July 2019. The full year dilutionary impact of the IPO on the
weighted average number of shares came through in 2020.
The Group's adjusted earnings per share for 2020 was 12.6 cent
(2019: 14.3 cent). Underlying earnings have increased by 25.1% from
EUR26.3m in 2019 to EUR32.9m in 2020 driving growth. This is offset
by an increase in the weighted average number of shares in issue
during the year as a result of the IPO.
On a like for like basis, adjusted earnings per share increased
from 10.0 cent to 12.6 cent which reflects the strong performance
in the year. This is calculated by applying the 2020 weighted
average number of shares to both years, to provide a more
meaningful comparison.
Cash flow and net bank debt
2020 delivered a strong cash performance, driven by a free cash
flow conversion of 111.0%, with the Group's net bank debt position
being EUR34.4m (2019: net bank cash of EUR26.6m).
2020 2019
Year ended 31 December EUR'000 EUR'000
Net cash inflow from operating activities 65,978 106,997
Net cash outflow from investing activities (110,326) (45,644)
Net cash (outflow)/inflow from financing activities (8,715) 42,148
Foreign currency translation movement (567) -
========= ========
(Decrease)/Increase in cash and cash equivalents
in the year (53,630) 103,501
========= ========
Movement in restricted cash 955 (210)
Cash flow from movement in borrowings (8,366) 76,211
========= ========
Movement in net bank (debt)/cash (61,041) 179,502
========= ========
The Group has remained focused on strong working capital
management, and this is reflected in the cash generated from our
operating activities of EUR66.0m. Free cash flow conversion in 2020
of 111.0% includes one off timing impacts which are expected to
unwind in early 2021. The Group's medium-term free cash flow
conversion target is 60-70%.
The net cash outflow from investing activities principally
consisted of acquisitions completed during the year of EUR57.4m,
deferred and deferred contingent consideration of EUR35.3m, and
capital investment of EUR15.8m which included a strategic
investment in a new large-scale distribution centre in Annacotty,
Co. Limerick, which is due to come into operation in early 2021 .
The Group completed four acquisitions (Hickey's Pharmacy Group, RRD
International, Diligent Health Solutions and Innerstrength), as
part of our strategy to build on our platform for Commercial &
Clinical and Product Access and increase our retail pharmacy
footprint in Supply Chain & Retail with an additional 38
pharmacies acquired during the year.
The net cash outflow from financing activities of EUR8.7m was
due to the repayment of the facility termination fee, principal
lease payments and the payment of dividends partially offset by the
proceeds from borrowings.
New bank facility
In July 2020, the Group completed a planned refinance of our
banking facilities with our existing syndicated banking partners.
The new five-year banking facility (with the option to extend by a
further two years) almost doubles the Group's available facilities
and sees the Group move from a term loan facility to a revolving
credit facility of EUR150.0m and a EUR90.0m uncommitted accordion
facility. The new facility provides a strong platform to support
the Group's growth strategy .
Taxation
The increased tax charge of EUR0.2m to EUR5.7m in 2020 is
reflective of the tax associated with both organic and acquisition
related profit growth. The effective tax rate year on year has
decreased from 17.4% to 14.9% on account of the impact of
respective under and over provisions relating to prior years.
Excluding these prior year provision adjustments, the effective tax
rate increased by 0.7% to 17.2%, reflecting increased trading in
tax jurisdictions outside of Ireland. The effective tax rate is
calculated as the income tax charge for the year as a percentage of
the profit before tax and exceptional items.
Foreign exchange
The Group's expansion into new geographies, and the continued
growth in existing geographies operating outside of the Eurozone,
results in the primary foreign exchange exposure for the Group
being the translation of local income statements and balance sheets
into Euro for Group reporting purposes.
On a constant currency basis, revenue increased by 9.7% (vs 9.5%
reported growth), gross profit increased 20.6% (vs reported growth
20.3%) and operating profit increased by 42.2% (vs 41.6% reported
growth). The re-translation of non-Euro subsidiaries to Euro has
resulted in a decrease in our operating results for 2020.
2020 2019
Average Average
GBP 0.88888 0.87756
US Dollar 1.14009 1.11949
Swedish Krona 10.48146 10.58475
=============== ========= =========
Return on capital employed (ROCE)
The Group's ROCE has increased in 2020, reaching 18.9% up from
17.3%, reflecting both the increase in profit in the year driven by
organic growth and the strong performance from our 2019
acquisitions, in particular Durbin, as well as the Group's strong
cash performance driven by continued tight working capital
management. The investment made during 2020, both from a capital
and acquisitions perspective, will deliver further benefits and
growth in the coming years.
Dividends
At the time of the IPO, the Board committed to adopting a
progressive dividend policy to reflect the expectation of future
cash flow generation and the long-term earnings potential of the
Group. Due to the Covid-19 uncertainty the Group did not pay an
interim dividend however following the positive results for the
year, the Board are proposing a final dividend of EUR4.2m. Subject
to shareholder approval at the AGM, it is proposed to pay the
dividend on 17 May 2021 to ordinary shareholders on the Company's
register on 23 April 2021.
Non-recourse financing arrangement
In July 2020, the Group increased the non-recourse financing
arrangement to EUR80.0m from EUR68.0m, which was the value of the
initial arrangement in December 2019. Under the terms of this
non-recourse agreement, the Group has transferred substantially all
credit risk and control of certain trade receivables, mainly within
Supply Chain & Retail, unlocking the cashflow value for further
reinvestment.
Group Income Statement
for the year ended 31 December 2020
Notes 2020 2020 2020 2019 2019 2019
Pre- Exceptional Total Pre- Exceptional Total
exceptional (note 3) EUR'000 exceptional (note 3) EUR'000
EUR'000 EUR'000 EUR'000 EUR'000
Revenue 2 1,823,854 - 1,823,854 1,665,283 - 1,665,283
Cost of sales (1,606,602) - (1,606,602) (1,484,681) - (1,484,681)
------------ ------------ ----------- ------------ ------------ -----------
Gross profit 217,252 - 217,252 180,602 - 180,602
Selling and distribution
costs (55,446) - (55,446) (52,214) - (52,214)
Administrative expenses (115,328) (6,775) (122,103) (88,410) (12,043) (100,453)
Other operating income 241 - 241 272 - 272
------------ ------------ ----------- ------------ ------------ -----------
Operating profit 46,719 (6,775) 39,944 40,250 (12,043) 28,207
Finance cost 4 (8,352) 1,939 (6,413) (8,480) 6,731 (1,749)
------------ ------------ ----------- ------------ ------------ -----------
Profit before tax 38,367 (4,836) 33,531 31,770 (5,312) 26,458
Income tax expense (5,720) - (5,720) (5,537) - (5,537)
------------ ------------ ----------- ------------ ------------ -----------
Profit for the financial
year 32,647 (4,836) 27,811 26,233 (5,312) 20,921
------------ ------------ ----------- ------------ ------------ -----------
Attributable to:
Owners of the parent 27,827 21,026
Non-controlling interests (16) (105)
----------- -----------
Profit for the financial
year 27,811 20,921
----------- -----------
Attributable to:
Continuing operations 27,811 20,921
----------- -----------
Profit for the financial
year 27,811 20,921
Earnings per ordinary share
(in cent):
Continuing operations 10.6 11.5
----------- -----------
Basic and diluted earnings
per share (in cent) 5 10.6 11.5
----------- -----------
Group Statement of Comprehensive Income
for the year ended 31 December 2020
Notes 2020 2019
EUR'000 EUR'000
Profit for the financial year 27,811 20,921
Other comprehensive (expense)/income
Items that may be reclassified to the Income
Statement:
Unrealised foreign currency translation adjustments (4,564) 3,815
Items that will not be reclassified to the
Income Statement:
Actuarial gain/(loss) in respect of defined
benefit pension schemes 9 303 (1,207)
Deferred tax (charge)/credit on defined benefit
pension schemes (38) 151
-------- --------
Total comprehensive income for the financial
year 23,512 23,680
-------- --------
Attributable to:
Owners of the parent 23,528 23,785
Non-controlling interests (16) (105)
-------- --------
Total comprehensive income for the financial
year 23,512 23,680
-------- --------
Attributable to:
Continuing operations 23,512 23,680
-------- --------
Total comprehensive income for the financial
year 23,512 23,680
-------- --------
Group Balance Sheet
as at 31 December 2020
ASSETS Notes 2020 2019
EUR'000 EUR'000
Non-current assets
Intangible assets 7 374,498 277,776
Property, plant and equipment 8 153,730 119,483
Financial assets - Investments in equity instruments 25 25
Deferred tax asset 4,524 4,676
Other receivables 1,097 1,132
Employee benefit surplus 9 12 -
Total non-current assets 533,886 403,092
-------- --------
Current assets
Assets held for sale 10 2,300 7,985
Inventory 115,566 97,684
Trade and other receivables 125,196 136,408
Cash and cash equivalents 60,410 114,040
Restricted cash 3,097 2,142
-------- --------
Total current assets 306,569 358,259
-------- --------
Total assets 840,455 761,351
-------- --------
EQUITY
Capital and reserves
Called up share capital presented as equity 11 21,841 21,841
Share premium 176,501 176,501
Other reserves (1,100) 3,464
Retained earnings 5,218 (20,601)
-------- --------
Attributable to owners 202,460 181,205
Attributable to non-controlling interests 75 (285)
-------- --------
Total equity 202,535 180,920
-------- --------
LIABILITIES
Non-current liabilities
Borrowings 12 95,615 66,977
Provisions 13 81,737 81,069
Employee benefit obligation 9 - 45
Lease obligations 14 107,203 82,901
Other non-current payables 4,604 545
Total non-current liabilities 289,159 231,537
-------- --------
Current liabilities
Borrowings 12 2,311 22,583
Lease obligations 14 13,334 10,083
Trade and other payables 333,116 311,228
Facility termination fee - 5,000
-------- --------
Total current liabilities 348,761 348,894
-------- --------
Total liabilities 637,920 580,431
-------- --------
Total equity and liabilities 840,455 761,351
-------- --------
Group Cash Flow Statement
for the year ended 31 December 2020
Notes 2020 2019
EUR'000 EUR'000
Operating activities
Cash inflow from operating activities 16 66,371 49,566
Proceeds from non-recourse financing 12,000 68,000
Interest paid (2,870) (3,831)
Interest paid on lease liabilities 14 (2,988) (2,637)
Corporation tax payments (6,535) (4,101)
--------- --------
Net cash inflow from operating activities 65,978 106,997
--------- --------
Investing activities
Payments to acquire property, plant and equipment
- Maintenance (6,487) (5,585)
Payments to acquire property, plant and equipment
- Strategic projects (7,832) -
Receipts from disposal of property, plant
and equipment 123 9
Payments to acquire intangible assets - Maintenance (1,412) (861)
Payments to acquire intangible assets - Strategic
projects (6) -
Receipts from disposal of assets held for
sale 10 5,685 415
Receipts from disposals/repayments of financial
assets - 5,359
Payments to acquire subsidiary undertakings (57,363) (50,533)
Cash acquired on acquisition of subsidiary
undertakings 18 7,689 6,860
Restricted cash acquired on acquisition of
subsidiary undertakings 18 1,027 -
Debt acquired on acquisition of subsidiary
undertakings 18 (16,800) -
Payment of deferred and deferred contingent
consideration (35,305) (1,403)
Receipt of deferred consideration receivable 355 95
--------- --------
Net cash outflow from investing activities (110,326) (45,644)
--------- --------
Financing activities
Issue of partly paid share capital - 17
Proceeds from calling of unpaid element of
partly paid share capital - 1,211
Proceeds from IPO equity issue - 139,391
IPO cash exceptional costs - (3,493)
IPO cash exceptional costs - recognised directly
in equity - (8,581)
Proceeds from borrowings 113,799 -
Repayments of borrowings (103,928) (6,869)
Decrease in invoice discounting facilities (1,505) (69,342)
Movement in restricted cash (955) 210
Payment of dividends 6 (1,993) -
Payment of facility termination fee 17 (5,000) (2,500)
Principal element of lease payments (9,133) (7,896)
--------- --------
Net cash (outflow)/inflow from financing activities (8,715) 42,148
--------- --------
(Decrease)/Increase in cash and cash equivalents
in the year (53,063) 103,501
Foreign currency translation of cash and cash
equivalents (567) -
--------- --------
Opening balance cash and cash equivalents 114,040 10,539
--------- --------
Closing balance cash and cash equivalents 15 60,410 114,040
--------- --------
Group Statement of Changes in Equity
for the year ended 31 December 2020
Share Share Foreign Revaluation Capital Retained Attributable Total
capital premium currency reserve redemption earnings to non- shareholders'
translation reserve controlling equity
reserve interests
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
At 1 January 2019 9,413 22,489 (1,111) 700 60 (31,990) (180) (619)
Profit for the
financial year - - - - - 21,026 (105) 20,921
Other
comprehensive
income/(expense):
Re-measurement
loss on pensions
(net of tax) - - - - - (1,056) - (1,056)
Movement in
foreign currency
translation
reserve - - 3,815 - - - - 3,815
Transactions
recognised
directly in
equity:
Issue of partly
paid share
capital 17 - - - - - - 17
Issue of fully
paid share
capital 1,211 - - - - - - 1,211
Exercise of
derivative
financial
instrument 1,503 24,318 - - - - - 25,821
Issue of share
capital 9,697 129,694 - - - (8,581) - 130,810
At 31 December
2019 21,841 176,501 2,704 700 60 (20,601) (285) 180,920
-------- -------- ------------ ----------- ----------- --------- ------------ -------------
At 1 January 2020 21,841 176,501 2,704 700 60 (20,601) (285) 180,920
Profit for the
financial year - - - - - 27,827 (16) 27,811
Other
comprehensive
(expense)/income:
Re-measurement
gain on pensions
(net of tax) - - - - - 265 - 265
Movement in
foreign currency
translation
reserve - - (4,564) - - - - (4,564)
Transactions
recognised
directly in
equity:
Non-controlling
interest on
acquisition of
subsidiary - - - - - - 96 96
Acquisition of
non-controlling
interest - - - - - (280) 280 -
Dividends paid - - - - - (1,993) - (1,993)
At 31 December
2020 21,841 176,501 (1,860) 700 60 5,218 75 202,535
-------- -------- ------------ ----------- ----------- --------- ------------ -------------
Notes to the Consolidated Financial Statements
1. General information
Basis of preparation
The 2020 financial statements have been audited, received an
unqualified audit report and have been approved by the Board of
Directors. The financial information set out in this document does
not constitute full statutory financial statements but has been
derived from the Group financial statements for the year ended 31
December 2020. The consolidated financial statements of Uniphar plc
and its subsidiaries (the 'Group') have been prepared in accordance
with International Financial Reporting Standards (IFRS) and
interpretations issued by the IFRS Interpretations Committee (IFRS
IC) applicable to companies reporting under IFRS, as adopted by the
EU. The consolidated financial statements comply with IFRS as
issued by the International Accounting Standards Board (IASB), as
adopted by the EU and as applied in accordance with the Companies
Acts 2014.
The financial information in the consolidated financial
statements has been prepared on a basis consistent with that
adopted for the year ended 31 December 2019.
The Group's consolidated financial statements are prepared for
the year ended 31 December 2020. The consolidated financial
statements incorporate the Company and all of its subsidiary
undertakings. A subsidiary undertaking is consolidated by reference
to whether the Group has control over the subsidiary undertaking.
The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power to
direct the activities of the entity.
Uniphar plc is incorporated in the Republic of Ireland under
registration number 224324 with a registered office at 4045
Kingswood Road, Citywest Business Park, Co. Dublin, D24 V06K.
Going Concern
The Directors have made appropriate enquiries and carried out a
thorough review of the Group's forecasts, projections, and
available banking facilities, taking account of possible changes in
trading performance and considering business risk.
Uniphar plays a significant role in the healthcare sector,
ensuring continuity in the supply and distribution of much needed
medicines, medical devices, and related services.
The Group has a robust capital structure with strong liquidity
at the end of December 2020, strengthened into the future by the
new banking facility agreed in July 2020. This continues to provide
a solid platform for the Group to deal with the disruption caused
by the Covid-19 pandemic.
A number of scenarios have been considered and modelled relating
to the impact of Covid-19 on the Group. The key assumptions within
each scenario include the following:
-- Reduction in volumes in Supply Chain & Retail, with no significant reduction in costs;
-- Reduction in elective surgeries in Commercial & Clinical
due to re-prioritisation of resources in hospitals, with increase
in demand on easing of lockdown measures; and
-- No negative impact in Product Access, due to the nature of exclusive access programmes.
The scenarios considered are:
-- Increased restrictions across multiple geographies in place
to the end of Q1 2021, with moderate recovery thereafter; and
-- The impact of continuing rolling waves of lockdown
restrictions through to Q1 2022 across multiple geographies
resulting in a reduction in demand, with a slow recovery over the
following period, and no further mitigating actions taken to offset
loss of revenues.
In both of these scenarios the assessment indicates that there
is no impact on the underlying ability to comply with banking
covenants and retain sufficient liquidity to meet our financial
obligations as they fall due.
The execution of a new five-year banking facility (with the
option to extend by a further 2 years) agreed in July 2020 enhances
the liquidity position of the Group. The banking facility provides
the Group with a revolving credit facility of EUR150.0m and a
EUR90.0m uncommitted accordion facility. This new banking facility
almost doubles the Group's available facilities. The Group has a
robust capital structure, modest net bank debt of EUR34.4m at 31
December 2020 and an available unused committed facility of
EUR55.0m, in addition to a EUR90.0m uncommitted accordion
facility.
Having regard to the factors noted above, the Directors have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future, being
a period of 12 months from the date of approval of these financial
statements. As a result, the Directors consider that it is
appropriate to continue to adopt the going concern basis in
preparing the financial statements.
New Standards, Amendments, and Interpretations
The Group has applied the following standards and amendments for
the first time for their annual reporting period commencing 1
January 2020:
-- Definition of Material - amendments to IAS 1 and IAS 8;
-- Definition of a Business - amendments to IFRS 3;
-- Revised Conceptual Framework for Financial Reporting; and
-- Interest Rate Benchmark Reform - amendments to IFRS 9, IAS 39 and IFRS 7.
These amendments listed above did not have any impact on the
amounts recognised in prior periods and are not expected to
significantly affect the current or future periods.
2. Revenue
2020 2019
EUR'000 EUR'000
Revenue 1,823,854 1,665,283
--------- ---------
Segmental information
Segmental information is presented in respect of the Group's
geographical regions and operating segments. The operating segments
are based on the Group's management and internal reporting
structures.
Geographical analysis
The Group operates in two principal geographical regions being
the Republic of Ireland and the UK. The Group also operates in
other European countries and the US which are not material for
separate identification.
The following is a geographical analysis presented in accordance
with IFRS 8 "Operating Segments" which requires disclosure of
information about country of domicile (Ireland) and countries with
material revenue.
2020 2019
EUR'000 EUR'000
Ireland 1,540,380 1,476,247
UK 214,352 152,623
Rest of the World 69,122 36,413
--------- ---------
1,823,854 1,665,283
--------- ---------
Operating segments
IFRS 8 "Operating Segments" requires the reporting information
for operating segments to reflect the Group's management structure
and the way the financial information is regularly reviewed by the
Group's Chief Operating Decision Maker (CODM), which the Group has
defined as the Board of Directors.
The Group operates with three divisions, being, Commercial &
Clinical, Product Access, and Supply Chain & Retail. These
divisions align to the Group's operational and financial management
structures:
-- Commercial & Clinical provide outsourced services,
specifically sales, marketing and multichannel account management
to pharmaco-medical manufacturers, and distribution and support
services to medical device manufacturers. Uniphar offer a fully
integrated multi-channel account management solution that is
supported through market data, insights and digital programmes. We
integrate these programmes with our supply chain and distribution
capability to provide a full end to end service to
manufacturers;
-- Product Access consists of two service offerings, being: On
Demand and Exclusive Access. On Demand provides access to
pharmaco-medical products and treatments, by developing valuable
relationships and interactions between manufacturers and other
healthcare stakeholders. This business operates in both the retail
and hospital markets in both the Irish and UK markets. Exclusive
Access provides bespoke distribution partnerships to pharmaceutical
partners for key brands, with new programmes focused on speciality
pharmaceutical products. Delivering a unique patient support
programme that allows healthcare professionals to connect with
patients, on a global basis; and
-- Supply Chain & Retail provides both pre-wholesale
distribution and wholesale distribution of pharmaceutical,
healthcare and animal health products to pharmacies, hospitals and
veterinary surgeons in Ireland. Uniphar operate a network of
pharmacies under the Life, Allcare and Hickey's brands.
Additionally, through the extended Uniphar symbol group, the
business provides services and supports that help independent
community pharmacies to compete more effectively.
Operating segments results
The Group evaluates performance of the operational segments on
the basis of gross profit from operations.
2020 2020 2020 2020
Commercial Product Supply Chain Total
& Clinical Access & Retail
EUR'000 EUR'000 EUR'000 EUR'000
Revenue 269,780 187,505 1,366,569 1,823,854
Gross profit 92,193 30,423 94,636 217,252
----------- -------- ------------- ---------
2019 2019 2019 2019
Commercial Product Supply Chain Total
& Clinical Access & Retail
EUR'000 EUR'000 EUR'000 EUR'000
Revenue 204,031 132,245 1,329,007 1,665,283
Gross profit 76,754 17,199 86,649 180,602
----------- -------- ------------- ---------
The Commercial & Clinical revenue of EUR269,780,000 (2019:
EUR204,031,000) consists of revenue derived from MedTech of
EUR199,044,000 (2019: EUR157,691,000) and Pharma of EUR70,736,000
(2019: EUR46,340,000).
Assets and liabilities are reported to the Board at a Group
level and are not reported on a segmental basis.
3. Exceptional charge
2020 2019
EUR'000 EUR'000
Professional fees including acquisition costs (4,300) (5,267)
Redundancy and restructuring costs (2,596) (2,289)
Initial public offering costs - (2,432)
Acquisition integration costs (559) (629)
Settlement loss on closure of defined benefit
pension scheme (488) -
Foreign exchange revaluation of deferred contingent
consideration 1,168 (1,426)
------- --------
Exceptional charge recognised in operating profit (6,775) (12,043)
------- --------
Deferred and deferred contingent consideration 2,077 5,251
Gain on settlement of derivative financial instrument - 1,765
Refinancing costs (138) (285)
------- --------
Exceptional credit recognised in finance costs 1,939 6,731
------- --------
Total Exceptional charge (4,836) (5,312)
------- --------
Deferred and deferred contingent consideration:
Deferred and contingent consideration relates to a release of
EUR4,348,000 following a review of expected performance against
earn out and contractual targets. Additionally, a provision of
EUR1,896,000 has been recognised in respect of deferred contingent
consideration payable in relation to the EPS Group and a payment of
EUR375,000 in respect of Outcome Medical Solutions.
4. Finance cost/(income)
2020 2019
EUR'000 EUR'000
Interest on lease obligations 2,988 2,637
Interest payable on borrowings 2,878 3,871
Fair value adjustment to deferred and deferred
contingent consideration 2,112 1,725
Fair value adjustment on facility termination
fee - (122)
Amortisation of refinancing transaction fees 268 282
Net interest expense/(income) from pension scheme
liabilities (note 9) 3 (15)
Interest receivable (11) (24)
Other fair value adjustments 114 126
Finance cost before exceptional credit 8,352 8,480
------- -------
Decrease in fair value deferred contingent consideration
(note 3) (2,077) (5,251)
Exercise of derivative financial instrument (note
3) - (1,765)
Refinancing costs (note 3) 138 285
------- -------
Exceptional credit recognised in finance cost (1,939) (6,731)
------- -------
Total finance cost 6,413 1,749
------- -------
5. Earnings per share
Basic and diluted earnings per share have been calculated by
reference to the following:
2020 2019
Profit for the financial year attributable to
owners (EUR'000) 27,827 21,026
------- -------
Weighted average number of shares ('000) 262,436 183,546
------- -------
Earnings per ordinary share (in cent):
* Basic 10.6 11.5
* Diluted 10.6 11.5
------- -------
Adjusted earnings per share has been calculated by reference to
the following:
2020 2019
EUR'000 EUR'000
Profit for the financial year attributable to
owners 27,827 21,026
Exceptional charge recognised in operating profit
(note 3) 6,775 12,043
Exceptional credit recognised in finance costs
(note 3) (1,939) (6,731)
Amortisation of acquisition related intangibles 279 -
------- -------
Profit after tax excluding exceptional items 32,942 26,338
------- -------
Weighted average number of shares in issue in
the year (000's) 262,436 183,546
------- -------
Adjusted basic and diluted earnings per ordinary
share (in cent) 12.6 14.3
------- -------
The weighted average number of ordinary shares includes the
effect of 6,218,620 shares (2,582,596 on a weighted basis in the
year) granted under the LTIP that have met the share price
performance conditions but will not vest until 31 December
2024.
6. Dividends
A final dividend of EUR0.0073 per ordinary share was paid on 29
May 2020 and amounted to EUR1,993,000 in respect of the period from
IPO to 31 December 2019. There was no dividend paid during the
comparative year ended 31 December 2019.
The Directors have proposed a final dividend of EUR0.015 per
ordinary share, subject to approval at the AGM. This results in a
total shareholder dividend of EUR4.2m in respect of the year ended
31 December 2020. If approved, the proposed dividend will be paid
on 17 May 2021 to ordinary shareholders on the Company's register
on 23 April 2021. This dividend has not been provided for in the
Balance Sheet at 31 December 2020, as there was no present
obligation to pay the dividend at year end.
7. Intangible assets
Computer Trademark Goodwill Technology Brand name Total
software EUR'000 EUR'000 asset EUR'000 EUR'000
EUR'000 EUR'000
Cost
At 1 January 2020 33,109 153 291,253 - - 324,515
Foreign exchange
movement (7) - (5,096) - - (5,103)
Acquisitions (note
18) - - 90,835 723 11,238 102,796
Additions 1,418 - - - - 1,418
Disposals/retirements (4,352) - - - - (4,352)
--------- --------- -------- ---------- ---------- --------
At 31 December 2020 30,168 153 376,992 723 11,238 419,274
--------- --------- -------- ---------- ---------- --------
Amortisation
At 1 January 2020 27,939 91 18,709 - - 46,739
Amortisation 2,058 31 - 188 91 2,368
Disposals/retirements (4,331) - - - - (4,331)
--------- --------- -------- ---------- ---------- --------
At 31 December 2020 25,666 122 18,709 188 91 44,776
--------- --------- -------- ---------- ---------- --------
Net book amounts
At 31 December 2019 5,170 62 272,544 - - 277,776
--------- --------- -------- ---------- ---------- --------
At 31 December 2020 4,502 31 358,283 535 11,147 374,498
--------- --------- -------- ---------- ---------- --------
8. Property, plant and equipment, and right-of-use assets
Freehold Leasehold Plant and Fixtures Computer Motor Instruments Total
land and improvements equipment and equipment vehicles
buildings fittings
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Cost
At 1 January 2020 100,119 8,428 22,076 8,131 5,200 5,744 3,490 153,188
Foreign exchange
movement (468) (35) (119) (112) (48) (98) - (880)
Additions 4,013 374 9,963 1,986 750 3,747 1,457 22,290
Acquisitions (note 18) 26,886 1,063 - 2,422 534 31 - 30,936
Disposals/retirements (339) (96) (2,639) (930) (816) (1,944) (1,100) (7,864)
Reclassification - 42 - 29 (71) - - -
At 31 December 2020 130,211 9,776 29,281 11,526 5,549 7,480 3,847 197,670
---------- ------------ ---------- ----------- ---------- --------- ----------- -------
Accumulated
depreciation
At 1 January 2020 7,631 1,259 14,138 3,852 3,704 1,988 1,133 33,705
Foreign exchange
movement (24) (21) (36) (38) (19) (39) - (177)
Charge for the year 7,696 798 2,802 1,357 630 2,725 1,618 17,626
Disposals/retirements (230) (96) (2,600) (930) (808) (1,535) (1,015) (7,214)
Reclassification - 21 - (3) (18) - - -
---------- ------------ ---------- ----------- ---------- --------- ----------- -------
At 31 December 2020 15,073 1,961 14,304 4,238 3,489 3,139 1,736 43,940
---------- ------------ ---------- ----------- ---------- --------- ----------- -------
Net book amounts
At 31 December 2019 92,488 7,169 7,938 4,279 1,496 3,756 2,357 119,483
---------- ------------ ---------- ----------- ---------- --------- ----------- -------
At 31 December 2020 115,138 7,815 14,977 7,288 2,060 4,341 2,111 153,730
---------- ------------ ---------- ----------- ---------- --------- ----------- -------
Reconciliation to
Balance Sheet
Property, plant &
equipment 5,171 7,815 14,050 7,288 2,060 134 2,111 38,629
Right-of-use assets 109,967 - 927 - - 4,207 - 115,101
---------- ------------ ---------- ----------- ---------- --------- ----------- -------
Net book value at 31
December 2020 115,138 7,815 14,977 7,288 2,060 4,341 2,111 153,730
---------- ------------ ---------- ----------- ---------- --------- ----------- -------
Included in property, plant and equipment are assets under
construction to the net book value of EUR8,600,000 (2019:
EUR244,000). Depreciation has not commenced on these assets.
9. Employee benefit surplus/(obligations)
The pension entitlements of employees, including Executive
Directors, arise under one defined benefit scheme and three defined
contribution schemes and are secured by contributions by the Group
to separate trustee administered pension funds in the Republic of
Ireland. The trustees are responsible for the management and
governance of the plans including compliance with all relevant laws
and regulations. The benefits provided by the defined benefit plan
is no longer linked to future salary inflation due to the accrual
of pension benefit ceasing on the scheme in prior years.
Contributions to the Whelehan Group Pension Scheme were terminated
in October 2019, and the scheme was wound up effective in January
2020. The assets of the scheme were distributed in line with
members chosen options and no assets or liabilities remain. Any
former members of these schemes still employed by the Group were
offered membership of the Uniphar Group Retirement Benefits Scheme
for future service benefits.
The defined benefit schemes are:
-- The Cahill May Roberts Limited Contributory Pension Plan; and
-- The Whelehan Group Pension Scheme (wound up in January 2020).
The pension charge for the year is EUR4,219,000 (2019:
EUR2,922,000) comprising current service cost of EURnil (2019:
EUR44,000) and defined contribution scheme costs of EUR4,219,000
(2019: EUR2,878,000). The net finance cost resulting from the
scheme surplus/deficit is EUR3,000 (2019 income: EUR15,000).
Financial instruments held by the defined benefit schemes
At 31 December 2020 the scheme assets were invested in a
diversified portfolio that consisted primarily of equity and debt
securities. Scheme assets do not include any of Uniphar plc's own
financial instruments, nor any property occupied by Uniphar plc.
The fair value of the scheme assets at the Balance Sheet date are
shown as follows:
2020 2019
EUR'000 EUR'000
Equities - Investments in quoted active markets 2,573 4,954
Bonds - Investments in quoted active markets 6,855 15,127
Cash 70 301
Other 2,199 2,128
----------- -----------
Fair value of the scheme assets 11,697 22,510
----------- -----------
Principal actuarial assumptions at the Balance
Sheet date
The main financial assumptions used were:
2020 2019
Rate of increase in pensionable salaries 0.0% - 2.5% 0.0% - 2.5%
Rate of increase in pensions in payment 0.0% 0.0%
Discount rate 0.7% 0.9%
Inflation rate 1.2% 1.4%
----------- -----------
Investigations have been carried out within the past three years
into the mortality experience of the Group's major schemes. These
investigations concluded that the current mortality assumptions
include sufficient allowance for future improvements in mortality
rates. The assumed life expectations on retirement at age 65 are
21.8 (2019: 21.7) years for males and 24.2 (2019: 24.1) years for
females.
The following amounts at the Balance Sheet dates were measured
in accordance with the requirements of IAS 19:
2020 2019
EUR'000 EUR'000
Present value of scheme liabilities (11,685) (22,555)
Fair value of scheme assets 11,697 22,510
-------- --------
Pension asset/(liability) resulting from employee
benefit obligation 12 (45)
-------- --------
Pension Pension Pension
assets liabilities surplus
EUR'000 EUR'000 EUR'000
Movement in scheme assets and liabilities
At 1 January 2020 22,510 (22,555) (45)
Settlement loss - (488) (488)
Employer contributions paid 245 - 245
Interest on scheme liabilities - (104) (104)
Interest on scheme assets 101 - 101
Actuarial gain/(loss) in current year 638 (335) 303
Benefits (paid)/settled (11,797) 11,797 -
-------- ------------ --------
At 31 December 2020 11,697 (11,685) 12
-------- ------------ --------
10. Assets held for sale
Properties Other assets Total
EUR'000 EUR'000 EUR'000
At 1 January 2020 3,585 4,400 7,985
Disposals (1,285) (4,400) (5,685)
---------- ------------ -------
At 31 December 2020 2,300 - 2,300
---------- ------------ -------
During 2020, the Group disposed of EUR1,285,000 (2019:
EUR415,000) of properties which were previously held for sale. The
remaining properties held for sale are available for immediate sale
in their present condition subject to terms that are usual and
customary for properties of this nature. The individual properties
are being actively marketed and the Group is committed to its plan
to sell these properties in an orderly manner.
The other assets related to certain business assets acquired as
part of the acquisition of M3 Medical Limited. These assets were
disposed of in February 2020 for an amount equal to their carrying
value, and the deferred contingent consideration attributable to
the sale of these assets was paid.
11. Called up share capital presented as equity
2020
EUR'000
Authorised:
453.2 million (2019: 300.0 million) ordinary shares of 8c
each 36,256
16.0 million (2019: 16.0 million) "A" ordinary shares of
8c each 1,280
-------
37,536
-------
Movement in the year in issued share capital presented as
equity
Allotted, called up and fully paid ordinary shares
At 1 January - 273,015,254 ordinary shares of 8c each 21,841
At 31 December - 273,015,254 ordinary shares of 8c each 21,841
-------
Total allotted share capital:
At 31 December - 273,015,254 (2019: 273,015,254) ordinary
shares 21,841
---------
In May 2020, following the passing of a resolution at the AGM,
the authorised share capital of the Company was increased from
EUR25,280,000 divided into 300,000,000 ordinary shares of 8c each
and 16,000,000 "A" ordinary shares of 8c each, to EUR37,536,000
divided into 453,205,300 ordinary shares of 8c each and 16,000,000
"A" ordinary shares of 8c each.
12. Borrowings
Bank loans are repayable in the following periods after 31
December:
2020 2019
EUR'000 EUR'000
Amounts falling due within one year 2,311 22,583
Amounts falling due between one and five years 95,615 66,977
-------- --------
97,926 89,560
-------- --------
The Group's total bank loans at 31 December 2020 were
EUR97,926,000 (2019: EUR89,560,000). Borrowings under invoice
discounting facilities as at the Balance Sheet date were EURnil
(2019: EUR1,505,000). Bank loans falling due within one year
include EUR2,300,000 (2019: EUR3,585,000) of loans arising on the
acquisition of Bradley's Pharmacy Group which are secured by
properties acquired on the acquisition which are classified as held
for sale. Following the disposal of these properties these loans
are required to be repaid (note 10).
The Group entered into a new facility on 2 July 2020. The total
loan value of the revolving credit facility available for use
within this agreement is EUR150,000,000, with an additional
uncommitted accordion facility of EUR90,000,000. This facility runs
for 5 years to 2025 with an option to extend by a further 2 years,
with repayment of all loans on termination of the facility
currently at 2 July 2025.
At 31 December, the Group's revolving credit facility loans in
use were subject to an interest rate of Euribor +1.5% (2019: the
Group's term loans were subject to Euribor +2%) and the invoice
discount funding were subject to interest rates of Prime +1.75%
(2019: Prime +1.75%).
Bank security
Bank overdrafts (including invoice discounting) and bank loans
of EUR97,926,000 (2019: EUR89,560,000) are secured by cross
guarantees and fixed and floating charges from the Company and
certain subsidiary undertakings.
Of the total facilities, invoice discounting with recourse to
the Company, are secured by way of assignment of book debts to the
bank. At the Balance Sheet date EURnil (2019: EUR1,505,000) of
invoice discounting facilities were utilised by the Group.
13. Provisions
Deferred Lease Warranty Total
contingent dilapidation provision
consideration
EUR'000 EUR'000 EUR'000 EUR'000
At 1 January 2020 80,811 213 45 81,069
Charge to Income Statement 1,896 - 8 1,904
Unwinding of discount 2,026 - - 2,026
Arising on acquisition 31,777 360 - 32,137
Utilised during the year (28,491) (50) - (28,541)
Released during the year (4,348) - - (4,348)
Foreign currency movement (2,507) - (3) (2,510)
-------------- ------------- ---------- --------
At 31 December 2020 81,164 523 50 81,737
-------------- ------------- ---------- --------
Deferred contingent consideration
Deferred contingent consideration represents the present value
of deferred contingent acquisition consideration which would become
payable based on pre-defined profit thresholds being met. During
the year payments of EUR28,491,000 were made in respect of prior
year acquisitions. Deferred contingent consideration of
EUR4,348,000 in respect of prior year acquisitions was released in
the year following a review of expected performance against
earn-out targets. As part of this review, separately an increase of
EUR1,896,000 was also made in respect of prior period
acquisitions.
Lease dilapidation
The lease dilapidation provision covers the cost of reinstating
certain Group properties at the end of the lease term. This is
based on the terms of the individual leases which set out the
conditions relating to the return of property. The timing of the
outflows will match the ending of the relevant leases with various
dates up to 2042.
Warranty provision
The warranty provision relates to a product warranty provided to
customers on certain medical devices. The estimated cost of the
warranty is provided for upon recognition of the sale of the
product. The costs are estimated based on actual historical
experience of expenses incurred and on estimated future expenses
related to current sales and are updated periodically. Actual
warranty costs are charged against the warranty provision.
14. Leases
(i) Amounts recognised in the Balance Sheet
As at 31 December, the Balance Sheet shows the following amounts
relating to leases:
2020 2019
EUR'000 EUR'000
Right-of-use assets:
Buildings 109,967 87,334
Plant and equipment 927 1,054
Motor vehicles 4,207 3,590
------- -------
Net book value of right-of-use assets 115,101 91,978
------- -------
Lease liabilities:
Current 13,334 10,083
Non-current 107,203 82,901
------- -------
Total lease liabilities 120,537 92,984
------- -------
Right-of-use assets are included in the line 'Property, plant
and equipment' on the Balance Sheet, and are presented in note
8.
Additions to the right-of-use assets during the year ended 31
December 2020 were EUR7,948,000 (2019: EUR3,464,000).
Lease liabilities are presented separately on the face of the
Balance Sheet.
(ii) Amounts recognised in the Income Statement:
The Income Statement shows the following amounts relating to
leases:
2020 2019
EUR'000 EUR'000
Depreciation charge of right-of-use assets:
Buildings 7,521 6,291
Plant and equipment 556 516
Motor vehicles 2,663 2,671
------- -------
10,740 9,478
------- -------
Interest on lease obligations (note 4) 2,988 2,637
------- -------
15. Analysis of net debt
2020 2019
EUR'000 EUR'000
Cash and cash equivalents 60,410 114,040
Restricted cash 3,097 2,142
--------- --------
63,507 116,182
--------- --------
Bank loans repayable within one year (2,311) (22,583)
Bank loans payable after one year (95,615) (66,977)
--------- --------
Bank loans (97,926) (89,560)
--------- --------
Net bank (debt)/cash (34,419) 26,622
--------- --------
Current lease obligations (13,334) (10,083)
Non-current lease obligations (107,203) (82,901)
--------- --------
Lease obligations (120,537) (92,984)
--------- --------
Net debt (154,956) (66,362)
--------- --------
16. Reconciliation of operating profit to cash flow from
operating activities
2020 2019
EUR'000 EUR'000
Operating profit before operating exceptional
items 46,719 40,250
Cash related exceptional items (10,761) (7,075)
-------- --------
35,958 33,175
Depreciation 17,626 15,911
Amortisation of intangible assets 2,368 2,394
Increase in inventory (11,868) (14,889)
Decrease/(increase) in receivables 8,789 (17,656)
Increase in payables 13,554 30,424
Foreign currency translation adjustments (56) 207
-------- --------
Cash inflow from operating activities 66,371 49,566
-------- --------
17. Financial instruments
Financial instruments by category
The accounting policies for financial instruments have been
applied to the line items below:
Financial Financial Total Fair
assets at assets at value
FVOCI* amortised
cost
EUR'000 EUR'000 EUR'000 EUR'000
Financial assets
31 December 2020:
Investments in equity instruments 25 - 25 25
Trade and other receivables
** - 117,843 117,843 117,894
Deferred consideration receivable - 633 633 654
Cash and cash equivalents - 60,410 60,410 60,410
Restricted cash - 3,097 3,097 3,097
---------- ---------- ------- -------
25 181,983 182,008 182,080
---------- ---------- ------- -------
* Fair value through other comprehensive income.
** Excluding prepayments and accrued income.
Financial Financial Total Fair
liabilities liabilities value
at at
FVTPL*** amortised
cost
EUR'000 EUR'000 EUR'000 EUR'000
Financial liabilities
31 December 2020:
Borrowings - 97,926 97,926 105,708
Deferred acquisition consideration - 4,461 4,461 4,625
Trade and other payables **** - 208,569 208,569 208,569
Deferred contingent consideration 81,164 - 81,164 81,164
Lease liabilities - 120,537 120,537 120,537
81,164 431,493 512,657 520,603
------------ ------------ ------- -------
*** Fair value through profit and loss.
**** Excluding non-financial liabilities.
Measurement of fair values
In the preparation of the financial statements, the Group
finance department, which reports directly to the Chief Financial
Officer (CFO), reviews and determines the major methods and
assumptions used in estimating the fair values of the financial
assets and liabilities which are set out below:
Investments in equity instruments
Investments in equity instruments are measured at fair value
through other comprehensive income (FVOCI).
Long-term receivables
The fair value of long-term receivables is determined by
discounting future cash flows at market rates of interest at the
period end.
Trade and other receivables/trade and other payables
For receivables and payables with a remaining life of less than
12 months or demand balances, the carrying value less impairment
provision where appropriate, is deemed to reflect fair value.
Cash and cash equivalents, including short-term bank
deposits
For short term bank deposits and cash and cash equivalents, all
of which have a remaining maturity of less than three months, the
carrying amount is deemed to reflect fair value.
Interest-bearing loans and borrowings
For floating rate interest-bearing loans and borrowings with a
contractual repricing date of less than 6 months, the nominal
amount is deemed to reflect fair value. For loans with repricing
dates of greater than 6 months, the fair value is calculated based
on the present value of the expected future principal and interest
cash flows discounted at appropriate market interest rates (level
2) effective at the Balance Sheet date and adjusted for movements
in credit spreads.
Deferred acquisition consideration
Discounted cash flow method was used to capture the present
value of the expected future economic benefits that will flow out
of the Group arising from the deferred acquisition
consideration.
Deferred contingent consideration
The fair value of the deferred contingent consideration is
calculated by discounting the expected future payment to the
present value. The expected future payment represents the deferred
contingent acquisition consideration which would become payable
based on pre-defined profit thresholds being met and is calculated
based on management's best estimates of the expected future cash
outflows using current budget forecasts. The provision for deferred
contingent consideration is principally in respect of acquisitions
completed from 2015 to 2020.
The significant unobservable inputs are:
-- Pre-defined profit thresholds which have not been disclosed
due to their commercial sensitivities; and
-- Risk adjusted discount rate of between 2% and 3% (2019: 3%).
For the fair value of deferred contingent consideration, a 1%
increase in the risk adjusted discount rate at 31 December 2020,
holding the other inputs constant would reduce the fair value of
the deferred contingent consideration by EUR1.6m. A 1% decrease in
the risk adjusted discount rate would result in an increase of
EUR1.6m in the fair value of the deferred contingent
consideration.
Facility termination fee
As part of the funding of the acquisition of Cahill May Roberts
in 2013, a share warrant was issued to participating banks,
granting the right to subscribe for 10% of the entire fully diluted
issued share capital of the Company at the time of subscription, at
any time up until 30 June 2017. During 2017, the share warrant
holders surrendered all of their equity rights in return for an
agreed facility termination fee payable by the Company of
EUR10,000,000. In January 2020, a payment of EUR5,000,000 was made
in final settlement of the facility termination fee. At 31 December
2019, the facility termination fee had a carrying value and
respective fair value of EUR5,000,000.
Fair value hierarchy
The following table sets out the fair value hierarchy for
financial instruments which are measured at fair value.
Level 1 Level 2 Level 3 Total
EUR'000 EUR'000 EUR'000 EUR'000
Recurring fair value measurements
At 31 December 2020
Investments in equity instruments - - 25 25
Deferred contingent consideration - - (81,164) (81,164)
------- ------- -------- --------
- - (81,139) (81,139)
------- ------- -------- --------
There were no transfers between the fair value levels for
recurring fair value measurements during the period. The Group's
policy is to recognise transfers into and transfers out of fair
value hierarchy levels as at the end of the reporting period.
Level 1: The fair value of financial instruments traded in
active markets is based on quoted market prices at the end of the
reporting period. The quoted market price used for financial assets
held by the Group is the current bid price. These instruments are
included in level 1.
Level 2: The fair value of financial instruments that are not
traded in an active market is determined using valuation techniques
which maximise the use of observable market data and rely as little
as possible on entity-specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument
is included in level 2.
Level 3: If one or more of the significant inputs is not based
on observable market data, the instrument is included in level
3.
Fair value measurements using significant unobservable inputs
(level 3)
The following table presents the changes in level 3 items for
the year ended 31 December 2020:
Shares in Facility Deferred Total
unlisted termination contingent
companies fee consideration
EUR'000 EUR'000 EUR'000 EUR'000
At 1 January 2020 25 (5,000) (80,811) (85,786)
Payments - 5,000 28,491 33,491
Charge to Income Statement* - - (1,896) (1,896)
Unwinding of discount* - - (2,026) (2,026)
Arising on acquisition - - (31,777) (31,777)
Release* - - 4,348 4,348
Foreign currency movement - - 2,507 2,507
---------- ------------ -------------- --------
At 31 December 2020 25 - (81,164) (81,139)
---------- ------------ -------------- --------
* These amounts have been credited/(charged) to the Income
Statement in finance income/costs.
Financial risk management
The Group's operations expose it to various financial risks. The
Group has a risk management programme in place which seeks to limit
the impact of these risks on the financial performance of the Group
and it is the Group's policy to manage these risks in a
non-speculative manner.
The Group has exposure to the following risks from its use of
financial instruments: credit risk, liquidity risk, currency risk,
interest risk and price risk. The consolidated financial statements
do not include all financial risk management information and
disclosures required in the annual financial statements; they
should be read in conjunction with the Group's Annual Report.
In December 2019, the Group entered into a receivables purchase
arrangement with two of its banking partners. Under the terms of
this non-recourse agreement, the Group has transferred
substantially all credit risk and control of certain trade
receivables. In July 2020, the non-recourse financing arrangement
increased by an additional EUR14,118,000 with the total amount of
the facility being EUR94,118,000 (2019: EUR80,000,000). The Group
has recognised an asset within trade and other receivables of
EUR14,118,000 (2019: EUR12,000,000), being the fair value of the
amount receivable from the financial institutions, representing 15%
of the trade receivables transferred to the financial institutions
in accordance with the terms of the receivables purchase
arrangement. The execution of this agreement resulted in an
operating cash inflow of EUR12,000,000 (2019: EUR68,000,000) for
the Group during the year ended 31 December 2020. Total interest
expense associated with this receivables purchase agreement during
the year ended 31 December 2020 was EUR1,203,000 (2019:
EUR31,000).
18. Acquisitions of subsidiary undertakings and business
assets
A key strategy of the Group is to expand into higher growth,
higher margin sectors and businesses. In line with this strategy,
the Group completed the following acquisitions during the financial
year:
-- Innerstrength Limited
The Group acquired an 82.3% controlling interest of the issued
share capital of Innerstrength Limited in March 2020 for
consideration of EUR2,675,000, of which EUR1,685,000 is deferred
and contingent on agreed targets being met and the exercise of the
put and call option over the non-controlling interest.
Innerstrength Limited operates in Ireland, in the technology
market, enabling healthcare professionals to deliver personalised
education to patients who are currently living with chronic
conditions.
-- Marie O'Brien Limited
The Group acquired 100% of the issued share capital of Marie
O'Brien Limited, in July 2020 for consideration of EUR1,377,000 of
which EUR166,000 is deferred. Marie O'Brien Limited currently
operates an independent retail pharmacy in Ireland.
-- Diligent Health Solutions, LLC
The Group acquired 100% of membership interests of Diligent
Health Solutions, LLC in September 2020 for consideration of
EUR21,142,000 of which EUR13,813,000 is deferred and contingent on
agreed targets being met. Diligent Health Solutions, LLC is a
US-based healthcare communications provider.
-- Bunclody Pharmacy Limited
The Group acquired 100% of the issued share capital of Bunclody
Pharmacy Limited, in September 2020 for consideration of
EUR819,000. Bunclody Pharmacy Limited currently operates an
independent retail pharmacy in Ireland.
-- Hickey's Pharmacy Group
The Group acquired 100% of the ordinary share capital of
Drishlawn Group Holdings Limited, incorporated in the Isle of Man
and Hickey's Pharmacy Group Holdings Limited incorporated in
Ireland in November 2020, which are collectively the holdings
companies of the Hickey's Pharmacy Group for consideration of
EUR43,556,000, of which EUR3,652,000 is deferred consideration.
-- RRD International, LLC
The Group acquired 100% of the membership interests of RRD
International, LLC in November 2020 for consideration of
EUR21,553,000, of which EUR16,279,000 is deferred and contingent on
agreed targets being met. RRD International, LLC is a US-based
pharmaceutical advisory group providing outsourced strategic
consulting and execution services throughout the early stages of
product development.
Goodwill is attributable to the future economic benefits arising
from assets which are not capable of being individually identified
and separately recognised. The significant factors giving rise to
the goodwill include the value of the teams within the businesses
acquired, the enhancement of the competitive position of the Group
in the marketplace and the strategic premium paid by Uniphar Group
to create the combined Group.
The fair value of the deferred and contingent consideration
recognised at the date of acquisition is calculated by discounting
the expected future payment to present value at the acquisition
date. In general, for deferred contingent consideration to become
payable, pre-defined profit thresholds must be exceeded. On an
undiscounted basis, the future payments for which the Group may be
liable in respect of acquisitions completed in the current year
range from EUR4.0m to EUR64.4m.
The initial assignment of fair values to net assets acquired has
been performed on a provisional basis in respect of the
acquisitions completed during 2020, due to their recent acquisition
dates. Separately identifiable intangible assets were identified in
the initial assessment of the fair value of the net assets acquired
for Hickey's Pharmacy Group and Innerstrength Limited. The Group
has 12 months from the date of acquisition to finalise the fair
value of the assets/liabilities acquired, and any amendments to
these fair values within the twelve-month period from the date of
acquisition will be disclosable in the 2021 Annual Report as
stipulated by IFRS 3, Business Combinations.
The acquisition of Hickey's Pharmacy Group has been determined
to be a substantial transaction and separate disclosure of the fair
values of the identifiable assets and liabilities has therefore
been made. None of the remaining business combinations completed
during the period were considered sufficiently material to warrant
separate disclosure of the fair values attributable to those
combinations.
The provisional fair value of the assets and liabilities
acquired as part of the acquisitions completed during the financial
year are set out below:
Hickey's Others Total
EUR'000 EUR'000 EUR'000
ASSETS
Non-current assets
Intangible assets 11,238 723 11,961
Property, plant and equipment 28,539 2,397 30,936
39,777 3,120 42,897
-------- ------- -------
Current assets
Inventory 5,832 181 6,013
Trade and other receivables 5,509 4,765 10,274
Cash and cash equivalents 5,928 1,761 7,689
Restricted cash - 1,027 1,027
-------- ------- -------
17,269 7,734 25,003
-------- ------- -------
Total assets 57,046 10,854 67,900
-------- ------- -------
LIABILITIES
Non-current liabilities
Lease liabilities 24,223 1,337 25,560
Provisions 360 - 360
Other non-current liabilities - 536 536
Deferred tax liabilities 697 - 697
-------- ------- -------
25,280 1,873 27,153
-------- ------- -------
Current liabilities
Lease liabilities 3,847 648 4,495
Bank borrowings 16,800 - 16,800
Trade and other payables 12,379 6,690 19,069
-------- ------- -------
33,026 7,338 40,364
-------- ------- -------
Total liabilities 58,306 9,211 67,517
-------- ------- -------
Identifiable net assets/(liabilities) acquired (1,260) 1,643 383
-------- ------- -------
Non-controlling interest arising on acquisition - (96) (96)
-------- ------- -------
Group share of net assets acquired (1,260) 1,547 287
Goodwill arising on acquisition 44,816 46,019 90,835
-------- ------- -------
Consideration 43,556 47,566 91,122
-------- ------- -------
The gross contractual value of the trade and other receivables
as at the respective dates of acquisition amounted to EUR10.3m. The
fair value of these receivables is estimated at EUR10.3m (all of
which is expected to be recoverable).
The acquisitions completed in 2020 have contributed EUR10.0m to
revenue and EUR4.5m of gross profit for the period since the date
of acquisition. The proforma revenue and operating profit for the
Group for the period ended 31 December 2020 would have been
EUR1,895m and EUR46.1m respectively had the acquisitions been
completed at the start of the current reporting period.
In 2020, the Group incurred acquisition costs of EUR4.3m (2019:
EUR5.0m). These have been included in administrative expenses in
the Group Income Statement.
2019 Acquisitions
The initial assessment of the fair values of the major classes
of assets acquired and liabilities assumed in respect of the
acquisitions which were completed in 2019 was performed on a
provisional basis. The fair values attributable to the assets and
liabilities of these acquisitions have now been finalised. The
amendments to these fair values were made to the comparative
figures during the subsequent reporting window within the
measurement period imposed by IFRS 3. The provisional fair value of
these assets and liabilities recorded at 31 December 2019, together
with the adjustments made in 2020 to those carrying values to
arrive at the final fair values are detailed in the Annual
Report.
19. Post balance sheet events
On 26 January 2021, the Board approved the establishment of a
new share option scheme with a reserve of 2.5% of the issued share
capital of the Company. Existing participants in the current Group
LTIP (including executive directors) shall not be eligible for the
grant of options under this scheme which is intended to incentivise
key senior management who were not eligible for participation in
the existing Group LTIP.
There have been no other material events subsequent to 31
December 2020 that would require adjustment to or disclosure in
this report.
20. Comparative amounts
The comparative amounts have been updated for amendments to the
fair value of assets and liabilities acquired during 2019, these
amendments were within the measurement period imposed by IFRS
3.
21. Approval by the Board of Directors
The preliminary results announcement was approved by the Board
of Directors on 1 March 2021.
Additional Information
ALTERNATIVE PERFORMANCE MEASURES
The Group reports certain financial measurements that are not
required under IFRS. These key alternative performance measures
(APMs) represent additional measures in assessing performance and
for reporting both internally, and to shareholders and other
external users. The Group believes that the presentation of these
APMs provides useful supplemental information which, when viewed in
conjunction with IFRS financial information, provides stakeholders
with a more meaningful understanding of the underlying financial
and operating performance of the Group and its divisions. These
measurements are also used internally to evaluate the historical
and planned future performance of the Group's operations.
None of these APMs should be considered as an alternative to
financial measurements derived in accordance with IFRS. The APMs
can have limitations as analytical tools and should not be
considered in isolation or as a substitute for an analysis of
results as reported under IFRS.
The principal APMs used by the Group, together with
reconciliations where the APMs are not readily identifiable from
the financial statements, are as follows:
Definition Why we measure it
EBITDA Earnings before exceptional EBITDA provides management
items, net finance expense, with an assessment of the underlying
& income tax expense, depreciation, trading performance of the
and intangible assets amortisation. Group and excludes transactions
that are not reflective of
Adjusted Earnings before exceptional the ongoing operations of the
EBITDA items, net finance expense, business, allowing comparison
income tax expense, depreciation, of the trading performance
and intangible assets amortisation, of the business across periods
adjusted for the impact of and/or with other businesses.
IFRS 16 and the pro-forma
EBITDA of acquisitions. Adjusted EBITDA is used for
leverage calculations.
===================================== ========================================
Net bank Net bank (debt)/cash represents Net bank (debt)/cash is used
(debt)/cash the net total of current by management as it gives a
and non-current borrowings, summary of the Group's current
cash and cash equivalents, leverage which management will
and restricted cash as presented consider when evaluating investment
in the Group Balance Sheet. opportunities, potential acquisitions,
and internal resource allocation.
===================================== ========================================
Net debt Net debt represents the total Net debt is used by management
of net bank (debt)/cash, as it gives a complete picture
plus current and non-current of the Group's debt including
lease obligations as presented the impact of lease liabilities
in the Group Balance Sheet. recognised under IFRS 16.
===================================== ========================================
Leverage Net bank (debt)/cash divided Leverage is used by management
by adjusted EBITDA for the to evaluate the group's ability
period. to cover its debts. This allows
management to assess the ability
for the company to use debt
as a mechanism to facilitate
growth.
===================================== ========================================
Adjusted This comprises of profit Adjusted EPS is used to assess
earnings for the financial period the after-tax underlying performance
per share attributable to owners of of the business in combination
the parent as reported in with the impact of capital
the Group Income Statement structure actions on the share
before exceptional items base. This is a key measure
(if any) and amortisation used by management to evaluate
of acquisition related intangibles, the businesses operating performance,
divided by the weighted average generate future operating plans,
number of shares in issue and make strategic decisions.
in the period.
===================================== ========================================
Like for Like for like adjusted earnings Like for like adjusted EPS
Like adjusted per share is calculated for is used to assess the after
earnings both the current and prior tax underlying performance
per share period by dividing the profit of the business assuming a
of the relevant period attributable constant share base.
to owners of the parent as
reported in the Group Income
Statement before exceptional
items (if any) and amortisation
of acquisition related intangibles,
by the weighted average number
of shares in issue in the
current period.
===================================== ========================================
Free cash Free cash flow conversion Free cash flow represents the
flow conversion calculated as EBITDA, less funds generated from the Group's
investment in working capital, ongoing operations. These funds
less maintenance capital are available for reinvestment,
expenditure, less foreign and for future acquisitions
exchange translation adjustment, as part of the Group's growth
divided by EBITDA. strategy. A high level of free
cash flow conversion is key
to maintaining a strong, liquid
balance sheet.
===================================== ========================================
Return on ROCE is calculated as the This measure allows management
capital 12 months rolling operating to monitor business performance,
employed profit before the impact review potential investment
of exceptional costs and opportunities and the allocation
amortisation of acquisition of internal resources.
related intangibles, expressed
as a percentage of the adjusted
average capital employed
for the same period. The
average capital employed
is adjusted to ensure the
capital employed of acquisitions
completed during the period
are appropriately time apportioned.
===================================== ========================================
EBITDA
2020 2019
EUR'000 EUR'000
Operating profit Income Statement 39,944 28,207
Exceptional charge recognised in operating profit Note 3 6,775 12,043
Depreciation Note 8 17,626 15,911
Amortisation Note 7 2,368 2,394
-------- --------
EBITDA 66,713 58,555
-------- --------
Adjust for the impact of IFRS 16 (12,121) (10,533)
Pro-forma EBITDA of acquisitions 6,923 246
-------- --------
Adjusted EBITDA 61,515 48,268
-------- --------
Net bank (debt)/cash
2020 2019
EUR'000 EUR'000
Cash and cash equivalents Balance Sheet 60,410 114,040
Restricted cash Balance Sheet 3,097 2,142
Bank loans repayable within one year Balance Sheet (2,311) (22,583)
Bank loans payable after one year Balance Sheet (95,615) (66,977)
-------- --------
Net bank (debt)/cash (34,419) 26,622
-------- --------
Net debt
2020 2019
EUR'000 EUR'000
Net bank (debt)/cash Alternative Performance Measures (34,419) 26,622
Current lease obligations Balance Sheet (13,334) (10,083)
Non-current lease obligations Balance Sheet (107,203) (82,901)
--------- --------
Net debt (154,956) (66,362)
--------- --------
Leverage
2020 2019
EUR'000 EUR'000
Net bank (debt)/cash Alternative Performance Measures (34,419) 26,622
Adjusted EBITDA Alternative Performance Measures 61,515 48,268
-------- -------
Leverage (times) (0.6) 0.6
-------- -------
Adjusted earnings per share
2020 2019
EUR'000 EUR'000
Adjusted earnings per share has been calculated by reference to the following:
Profit for the financial year attributable to owners 27,827 21,026
Amortisation of acquisition related intangibles 279 -
Exceptional charge recognised in operating profit (note 3) 6,775 12,043
Exceptional credit recognised in finance costs (note 3) (1,939) (6,731)
------- -------
Profit after tax excluding exceptional items 32,942 26,338
Weighted average number of shares in issue in the year (000's) 262,436 183,546
------- -------
Adjusted basic and diluted earnings per ordinary share (in cent) 12.6 14.3
------- -------
Like for like weighted average number of shares (000's) 262,436 262,436
------- -------
Like for like adjusted earnings per ordinary share (in cent) 12.6 10.0
------- -------
Free cash flow conversion
2020 2019
EUR'000 EUR'000
EBITDA 66,713 58,555
Increase in inventory Note 16 (11,868) (14,889)
Decrease/(increase) in receivables Note 16 8,789 (17,656)
Increase in payables Note 16 13,554 30,424
Foreign currency translation adjustments Note 16 (56) 207
Payments to acquire property, plant and equipment - Maintenance Cash Flow Statement (6,487) (5,585)
Payments to acquire intangible assets -
Maintenance Cash Flow Statement (1,412) (861)
-------- --------
Free cash flow 69,233 50,195
-------- --------
Adjustment for settlement of acquired financial
liabilities* 4,788 -
-------- --------
74,021 50,195
-------- --------
EBITDA 66,713 58,555
-------- --------
Free cash flow conversion 111.0% 85.7%
-------- --------
*The adjustment to free cash flow ensures that payments made
after an acquisition to settle loans with former shareholders of
acquired companies, or other similar financial liabilities, are
excluded from the movement in payables in the free cash flow
conversion calculation.
Return on capital employed
2020 2019 2018
EUR'000 EUR'000 EUR'000
Rolling 12 months operating profit 39,944 28,207
Adjustment for exceptional costs 6,775 12,043
Acquisition related intangible amortisation 279 -
--------- ----------
Adjusted 12 months rolling operating
profit 46,998 40,250
--------- ----------
Total equity 202,535 180,920 (619)
Net bank debt/(cash) 34,419 (26,622) 152,880
Derivative financial instruments - - 27,586
Facility termination fee - 5,000 7,622
Deferred contingent consideration 81,164 80,811 51,811
Deferred consideration payable 4,461 7,394 5,566
--------- ---------- ----------
Total capital employed 322,579 247,503 244,846
--------- ---------- ----------
Average capital employed 285,041 246,175
Adjustment for acquisitions (note A /
B below) (36,302) (13,724)
--------- ----------
Adjusted average capital employed 248,739 232,451
--------- ----------
Return on capital employed 18.9% 17.3%
--------- ----------
Note A: Adjustment for acquisitions (2020) Capital Completion Adjustment
employed Date
EUR'000 EUR'000
Hickey's Pharmacy Group 54,428 Nov 2020 (22,678)
Other acquisitions completed during 2020 47,255 Various (13,624)
----------
Adjustment for acquisitions (36,302)
----------
Note B: Adjustment for acquisitions (2019) Capital Completion Adjustment
employed Date
EUR'000 EUR'000
Durbin Group 41,856 July 2019 (3,488)
Other acquisitions completed during 2019 37,885 Various (10,236)
----------
Adjustment for acquisitions (13,724)
----------
The adjustment ensures that the capital employed of acquisitions
completed during the period are appropriately time apportioned. The
adjustment includes cash consideration, deferred and deferred
contingent consideration, debt acquired, cash acquired, and any
cash impact of shareholder loans or other similar financial
liabilities repaid post acquisition.
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