TIDMUPR
RNS Number : 2180R
Uniphar PLC
28 February 2023
Uniphar plc
2022 Preliminary Results
Uniphar plc, an international diversified healthcare services
business, announces its full year results for the year ended 31
December 2022, delivering a strong performance with EBITDA growth
of 13.4%, ROCE of 17.3% and year-end leverage of 1.0x.
FINANCIAL HIGHLIGHTS
Growth
Constant
Currency
2022 2021 Reported (2)
Year ended 31 December EUR'000 EUR'000 % %
Revenue 2,070,669 1,943,149 6.6% 6.3%
Gross profit 306,744 274,497 11.7% 10.8%
Commercial & Clinical 117,554 104,398 12.6% 11.5%
Product Access 50,178 41,318 21.4% 18.2%
Supply Chain & Retail 139,012 128,781 7.9% 7.9%
Gross profit margin (Group) 14.8% 14.1%
EBITDA (1) 98,040 86,481 13.4% 12.5%
Operating profit 53,155 45,147 17.7% 17.0%
Profit before tax excluding
exceptional items 57,900 50,444 14.8% 14.0%
Net bank debt (1) (91,217) (48,297)
Basic EPS (cent) 16.7 17.8
Adjusted EPS (cent) (1) 18.4 16.2
================================== ========= ========= ======== =========
-- Gross profit growth of 11.7% (5.7% organic(3) ), reflecting a
strong performance across all divisions with Supply Chain &
Retail outperforming medium-term guidance.
-- EBITDA growth of 13.4% to EUR98.0m (2021: EUR86.5m). The
increase in EBITDA reflects the strong organic performance of the
group, the benefit of acquisitions, and the investment in our
people and infrastructure to support future growth.
-- Adjusted EPS growth of 13.2% to 18.4 cent (2021: 16.2 cent).
-- The Group continued to execute strategic and value accretive
acquisitions with four announced in 2022. Total acquisition value,
including potential deferred considerations, amounted to c.EUR185m
for the period.
-- Strong liquidity with net bank debt of EUR91.2m as at 31
December 2022 (2021: EUR48.3m), reported free cash flow conversion
of 82.5% and leverage remaining low at 1.0x underpinning the
Group's disciplined approach to capital allocation and cash
conversion.
-- Total dividend for the year of EUR4.8m (EUR0.017 per ordinary
share) representing an increase of 5% year-on-year, including a
EUR1.7m interim (EUR0.006 per ordinary share) dividend paid in
October and a final dividend of EUR3.1m (EUR0.011 per ordinary
share) subject to approval at the AGM.
-- For 2023, Uniphar expects continued organic gross profit
growth across all divisions and is well positioned to deliver on
expectations.
1. Additional information is set out in Alternative Performance Measures (APMs) section.
2. Constant currency growth is calculated by applying the prior
year's actual exchange rate to the current year's result.
3. O rganic growth is calculated as the gross profit growth of
the underlying business in the period adjusting for the
contribution from prior period acquisitions and divestments to
ensure a like-for-like comparison.
STRATEGIC AND OPERATIONAL HIGHLIGHTS
-- Our business performed strongly in 2022, leveraging the
Group's scale, leading market positions and diverse platforms to
mitigate continued macro-economic uncertainty and inflationary
pressure.
-- Strong organic gross profit growth across all divisions, with
an outperformance in Supply Chain & Retail delivering 4.1%,
Commercial & Clinical delivering 7.1% and Product Access
delivering 7.0%.
-- Increase in gross profit margin to 14.8% from 14.1%, driven
by the full year impact of acquisitions completed in 2021 and the
Group's continued focus on higher margin services.
-- Successfully completed integration of 2021 acquisitions
including CoRRect Medical GmbH, BESTMSLs Group, E4H and Devonshire
Healthcare Services, which are delivering in line with
expectations.
-- During 2022, the Group announced four value accretive
acquisitions. Three completed during the year, and the fourth,
McCauley Pharmacy Group, completed on 31st January 2023:
-- Commercial & Clinical Division : Inspired Health
("Inspired"), headquartered in Boston, MA, is a healthcare insights
and intelligence consultancy. Inspired's market research expertise
will enable Uniphar to evolve its commercialisation offering to
enhance its clients' competitiveness and improve healthcare
delivery.
-- Product Access Division : Orspec Pharma ("Orspec"), an
Australian-headquartered company with additional hubs in Singapore
and New Zealand, specialises in the supply of unlicensed medicines
and the delivery of Expanded Access Programs across APAC. BModesto
Group ("BModesto"), headquartered in the Netherlands, is a
healthcare services business focused on improving access to
pharmaceutical and healthcare products across Europe. The BModesto
and Orspec platforms further accelerates our strategy of becoming a
global leader in providing access to ethically sourced unlicensed
and difficult to source medicines and the delivery of 'Expanded
Access Programs' on a global basis.
-- Supply Chain & Retail : McCauley Pharmacy Group
("McCauley"), headquartered in Dublin, is widely recognised as a
leading provider of pharmacy and retail services in Ireland and a
market leader in the delivery of health, wellbeing, and beauty
products. McCauley's expertise in this sector, combined with its
customer-focused digital platforms will further support Uniphar's
consumer business.
-- New five-year banking facility completed in August 2022.
Three international banks, Barclays Bank, ING Bank and Citizens
Bank joined the existing syndicate increasing the syndicate to
seven banks. This new facility provides the platform to accelerate
our ambitious growth strategy and acquisition pipeline.
-- Strong cash flow performance with reported free cash flow
conversion of 82.5%, demonstrating our continued focus on working
capital management. When adjusted for the impact of temporary
timing benefits, free cash flow conversion remains above our target
range of 60-70%. Group leverage remains low at 1.0x.
-- In the Commercial & Clinical division, the diversity of
the MedTech portfolio ensured continued growth in the period. In
C&C Pharma we have established medical affairs capability
across Europe with local expertise covering Germany, Austria,
Switzerland, France, Belgium, Luxembourg, Italy, Ireland and the
UK, and near term plans to add Spain and Portugal.
-- Product Access was awarded a number of US Expanded Access
Programs (EAPs) representing a significant milestone in the
continued geographic growth of the division. The division continues
to target double-digit organic growth in gross profit over the
medium term.
-- Supply Chain & Retail division commenced a strategic
investment programme in an Irish-based distribution facility. This
multi-year organic investment in a state-of-the-art facility will
unlock further operational efficiencies and provide the
infrastructure to meet growing market demands by doubling capacity
levels and enhancing the division's market leading service
offering.
-- Sustainability and governance remain key objectives for the
Group and progress was made across all five sustainability pillars.
This was reflected in continued improvement in external
sustainability rankings in 2022; Sustainalytics ranks Uniphar in
the 1st percentile of global healthcare companies, our MSCI ESG
rating improved to "AA" from "A", and our CDP rating "B" from
"C".
Ger Rabbette, Uniphar Group Chief Executive Officer said:
"The Group performed strongly throughout 2022, making further
progress against our financial and strategic objectives. Strong
organic profit growth across all divisions contributed to 13.4%
growth in EBITDA, 13.2% growth in adjusted EPS and a 17.3% ROCE. We
also made key investments that will ensure continued, robust growth
into 2023 and beyond.
In Commercial & Clinical we further enhanced our commercial
offering, adding Medical Affairs capability in nine European
markets and acquiring Inspired Health, an innovative market
research company.
In Product Access, the acquisitions of BModesto and Orspec
expands our reach in continental Europe and the APAC region and
will further accelerate our growth towards market leadership in the
provision of Unlicensed Medicines and the delivery of Expanded
Access Programs globally.
In Supply Chain & Retail our strategic investment in a new
distribution facility and the acquisition of McCauley will further
improve our market leadership position and service offering.
We will continue to apply a disciplined approach to capital
deployment both organically and through M&A where such
investment accelerates our strategic plans and delivers a Return on
Capital Employed within or above our targeted range of 12% - 15%
within three years.
Uniphar is an ambitious organisation, and we are confident of
delivering on expectations throughout 2023 and beyond. We remain
firmly on track to achieve our strategic objective of doubling 2018
proforma EBITDA within 5 years of IPO."
Analyst presentation
A conference call for analysts and investors will be held at
9.00 am (GMT), today, 28th February 2023. To register for the call
please visit www.uniphar.ie .
The details for the conference call are as follows: Ireland:
+353 (0) 153 695 84, United Kingdom: +44 (0) 20 3936 2999, United
States: +1 646 664 1960, all other locations +44 20 3936 2999.
Access code: 451907
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
Allan Smylie, Head of Strategy and IR
Davy (Joint Corporate Broker, Nominated Advisor Tel: +353 (0) 1 679 6363
and
Euronext Growth Listing Sponsor)
Barry Murphy
Niall Gilchrist
Lauren O'Sullivan
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
Q4 PR Tel: +353 (0) 1 475 1444
Iarla Mongey, Public Relations Advisor to Uniphar
Group
About Uniphar plc
Headquartered in Dublin, Ireland, the Uniphar Group 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. The Group is active in Europe, North America, APAC and
MENA.
The Company's vision is to improve patient access to
pharmaco-medical products and treatments by enhancing connectivity
between manufacturers and healthcare stakeholders. Uniphar
represents a strong combination of scale, growth, and
profitability.
Commercial & Clinical
In Commercial & Clinical, the Group provides outsourced
sales, marketing & distribution solutions to multinational
pharmaceutical and medical device manufacturers. Active in Ireland,
the UK, Benelux, the Nordics, Germany and the US, the Group is
growing with its clients to provide pan-European solutions, with a
targeted service offering in the US. Uniphar has built fully
integrated digitally enabled customer centric solutions that are
supported by our highly experienced and clinically trained teams,
leveraging our digital technology and insights which allows us to
deliver consistently exceptional outcomes for our clients.
Product Access
In Product Access, the Group is growing 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. 53%
market share in the wholesale/hospital market, supported by a
network of 423 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 also utilised for the benefit of the Commercial
& Clinical and Product Access 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 the 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, the 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 has again delivered a strong performance with gross
profit growth of 11.7% driven by organic growth of 5.7% combined
with the benefit of value accretive acquisitions completed in 2021.
Each division delivered organic growth, with a particularly strong
result from Supply Chain & Retail. We continue to deliver on
our growth strategy, building out our pan-European and global
platforms for Commercial & Clinical and Product Access
respectively, through acquisition and organic growth, while at the
same time investing in our market leading Supply Chain & Retail
division.
The positive trajectory of the Group's gross profit margin
continued during the year increasing from 14.1% to 14.8%
underpinned by our strategy of scaling and expanding into higher
value, higher margin businesses.
EBITDA has increased by 13.4% (EUR11.5m) to EUR98.0m (2021:
EUR86.5m), reflecting the strong organic gross profit growth across
all divisions, the benefit of acquisitions, and the investment in
our teams and our infrastructure for further growth. This has
resulted in strong growth in adjusted EPS, increasing from 16.2
cent to 18.4 cent, delivering 13.2% growth.
ROCE outperformed our medium-term guidance in 2022 at 17.3%
(2021: 17.6%), demonstrating our disciplined approach to capital
allocation and our strong earnings growth. The investment made
during 2022, both from a capital and acquisitions perspective, will
deliver further benefits and growth in the coming years .
The Group continues to maintain its solid financial position,
with a robust Balance Sheet, and excellent liquidity evident by the
strong reported free cash flow of EUR80.9m reflecting a free cash
flow conversion of 82.5%. When adjusted for the impact of temporary
timing benefits, free cash flow conversion remains above our target
range of 60-70%. The strong free cash flow performance is driven by
continued focus on working capital management.
With a new five-year banking facility in place and the addition
of three new international banking partners, Barclays Bank, ING
Bank and Citizens Bank, joining the existing banking syndicate
during the year, the Group is in a strong position to continue to
invest in growth opportunities. Net bank debt was EUR91.2m (2021:
EUR48.3m) and leverage remained low at 1.0x, providing a solid
platform to support future growth and investment as opportunities
arise.
The Group continues to focus on its strategy of building a
pan-European offering in our Commercial & Clinical division and
a global offering in our Product Access division, both of which
enhance our ability to develop new client relationships and achieve
growth. In Supply Chain & Retail, our management team have a
track record of outperforming the market. We will continue to
leverage this valuable experience combined with our sophisticated
digital tools, high-tech infrastructure, and long-standing
manufacturer relationships to grow this division.
Sustainability
Uniphar recognise the importance of being an industry leader in
operating in the most sustainable and socially responsible way
possible and places a high priority on sustainability, sensitive to
our impact on the planet, on our communities and on our people.
Continuous development across our five pillars of sustainability is
a key goal for the Board and the Management team. Progress on these
pillars in 2022 was reflected in continued improvement in external
sustainability rankings in 2022; Sustainalytics ranks Uniphar in
the 1st percentile of global healthcare companies, our MSCI ESG
rating improved to "AA" from "A", and our CDP rating "B" from
"C".
During the year Uniphar launched its Unity@Uniphar initiative,
an umbrella for inclusivity and uniting our workforce for common
purposes within our business and the communities we operate in.
Under the Community pillar, as well as facilitating and supporting
many initiatives with local communities and charities, we ran two
major fund-raising initiatives, Unity for Ukraine and Unity for
Hope, working with our customers and suppliers to raise more than
EUR1 million in funds and medical supplies to alleviate the
continued humanitarian crisis in Ukraine and to support cancer
charities around the world respectively. Our teams also made
progress under our environmental pillar, improving our carbon
foot-printing initiatives and focusing on ways to decarbonise our
business. We completed our first Scope 3 assessment, highlighting
the opportunity for a collaborative approach with our suppliers to
reduce our collective impact on the environment.
Current trading and outlook
The Group has entered the year with strong momentum and is
trading in-line with expectations. Whilst cost inflation and rising
interest rates are a challenge, we remain well positioned to
deliver organic gross profit growth across all divisions and to
deliver on expectations for the full year.
The Group expects Product Access to return to double digit
organic growth in gross profit in the second half of 2023 and our
medium-term divisional guidance remains unchanged:
-- Commercial & Clinical: Mid-single digit
-- Product Access: Double-digit
-- Supply Chain & Retail: Low-single digit
M&A will continue to play an important part in Uniphar's
growth strategy, and we will continue to have a disciplined
approach and manage an active pipeline of acquisition opportunities
to add further scale and breadth to the existing platform.
We are confident we have the strategy, the market opportunity,
the platform, the competitive edge, and the team in place to
deliver on our target of doubling 2018 pro-forma EBITDA within five
years from IPO.
Acquisitions and integration update
During 2022, the Group announced four value accretive
acquisitions. Three completed during the year, and the fourth,
McCauley Pharmacy Group, completed on 31st January 2023 following
approval from the Irish Competition and Consumer Protection
Commission (CCPC). These acquisitions are in line with our growth
strategy and further increase our access to the US, European and
APAC markets in addition to strengthening our digital capabilities
and infrastructure.
Commercial & Clinical
Acquisition update
The acquisition of Inspired Health adds capability in healthcare
insights and intelligence consultancy. Using innovative market
research techniques, Inspired assists its life science clients to
better understand physicians, patients, administrators, and payers.
These insights are leveraged to assist clients optimise product
innovation and commercialise their assets. Inspired's market
research expertise enables Uniphar to evolve its commercialisation
offering to enhance its clients' competitiveness and improve
healthcare delivery.
Integration update
The 2021 acquisitions of CoRRect Medical, BESTMSLs Group and E4H
have been fully integrated into the Commercial & Clinical
division. CoRRect Medical specialise in the commercialisation and
distribution of medical device products in the interventional
cardiology sector across Germany & Switzerland. Uniphar have
brought existing manufacturer relationships to the German and Swiss
markets and have leveraged the highly experienced CoRRect
management team and their local knowledge to launch a number of
products, with more launches to come. BESTMSLs Group provides
outsourced medical affairs services. In addition, The Doctors
Channel, a digital platform, delivers expert medical information
condensed into short streaming videos. Medical Affairs is a
fast-growing market due to the increasing complexity, specialty,
and cost of emerging pharmaceutical products. E4H offers a wide
range of digital and communications solutions to the pharmaceutical
industry, including brand and strategy commercialisation, digital
development, omni-channel delivery, engagement, and data analysis.
E4H enhances Uniphar's value proposition of creating a truly
differentiated omni-channel offering for pharmaceutical clients
looking to commercialise their brands across Europe.
Product Access
Acquisition update
The acquisition of Orspec adds distribution hubs in Australia,
Singapore and New Zealand. Orspec specialises in the supply of
unlicensed medicines and the delivery of Expanded Access Programs
across APAC. This acquisition represents our first entrance into
the APAC region. This was followed by the acquisition of BModesto,
headquartered in the Netherlands. BModesto is focused on improving
access to pharmaceutical and healthcare products across the
Netherlands, Germany, the UK and Europe. Its service offering
includes the distribution of medicines on both an exclusive and
on-demand basis, clinical trial services, market authorisation
holder and medical device distribution. The acquisitions of Orspec
and BModesto further accelerates our strategy of becoming a global
leader in providing access to ethically sourced unlicensed and
difficult to source medicines and the delivery of 'Expanded Access
Programs' on a global basis.
Integration update
We have integrated the 2021 acquisition of Devonshire Healthcare
Services into our Product Access division. Devonshire provides
access to unlicensed and difficult to source medicines across the
MENA region to a broad variety of healthcare authorities,
hospitals, and overseas ministries of health. Devonshire has
enabled Uniphar to expand its global access into key hospitals in
the MENA region, for the benefit of both its On Demand and
Exclusive Access businesses.
Supply Chain & Retail
Acquisition update
McCauley Pharmacy Group, headquartered in Dublin, is widely
recognised as a leading provider of pharmacy and retail services in
Ireland and a market leader in the delivery of health, wellbeing,
and beauty products. McCauley's expertise in this sector, combined
with its customer-focused digital platforms will further support
Uniphar's consumer business.
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.
2022 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 2022, the Group carried out the
following:
-- Reviewed the Group Risk Register, updating for all the key
risks facing the Group at this time;
-- Expanded some existing risks to include new factors such as climate change; and
-- Continued to focus on Cybercrime related risks.
In addition to considering our current principal risks, emerging
risks are also considered as part of our overall risk management
processes. Management identifies, assesses, and manages new and
emerging risks in the same way as the Group's principal risks.
Emerging risks can arise in two ways for the Group. The risk can be
newly identified as part of the ongoing risk management process in
existence across the Group; or the risk may already be identified
on the Group Risk Register, but its potential impact has changed
leading to a reassessment.
Enhanced focus has been brought to key risk areas in 2022,
including Cybercrime, Environment & Sustainability and the risk
associated with Transformational Project Execution. 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 for
the year ended 31 December 2022 are summarised as follows:
Strategic Risks
-- Brexit - The post-Brexit environment 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, however as the Group has traded through
the initial Brexit uncertainty with Brexit plans in operation, this
risk is deemed stable year-on-year. 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. The
ongoing war in Ukraine combined with rising interest rates,
unprecedented cost inflation and supply chain challenges present
increased risk for the Group. This may adversely affect the Group's
financial and operational results.
-- Key personnel & succession planning - Failure to attract,
retain and develop the skills and expertise of its people 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 may
result in loss of market share, which may put pressure on
profitability and margins.
-- Environment & sustainability - The increasing global
focus on environmental and sustainability governance is recognised
by the Group, and by its stakeholders. Failure to appropriately
assess, monitor and manage the Group's impact on the environment
and the communities in which it operates may result in reputational
damage, impacting the Group's ability to deliver results.
-- Transformational Project Execution - The Group is embarking
on several transformational projects that will provide it with the
platform and capacity to grow over the coming years. Significant
transformational programmes bring inherent risk such as the
inability to manage change in the organisation or to deliver
projects within time and budget constraints.
Operational Risks
-- 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. The
knock-on impact from an attack on one of our business partners is
also an area of risk for the Group.
-- 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.
-- Business interruption - External factors such as natural
disasters, environmental hazard or industrial disputes may result
in potential lost sales and loss of customer loyalty.
-- Pandemic risk - The risk from Covid-19 has subsided in recent
months but risk remains that other variants or pandemics may arise
in future. Such a pandemic could severely impact our financial
results or cause supply chain disruption that impacts the business
and operations.
-- 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. The recent increases in interest rates impact the
Group in increasing interest costs against outstanding
borrowings.
Operational overview
Commercial & Clinical
Growth
2022 2021 Constant
Year ended 31 December EUR'000 EUR'000 Reported currency
Revenue 306,766 299,908 2.3% 1.4%
Gross profit 117,554 104,398 12.6% 11.5%
Gross margin % 38.3% 34.8% +350bps
========= =========
The Business
Commercial & Clinical provides outsourced sales, marketing,
distribution and consultancy solutions to pharmaceutical and
medical device manufacturers on a pan-European basis with a
targeted service offering in the US. The division is focused on the
commercialisation of speciality products to ensure that patients
and their physicians are offered the best treatments for their
conditions. The division has two business units, MedTech and
Pharma, both of which are driven by the mission of ensuring
patients have access to the treatments they need when they need
them.
Highlights
Commercial & Clinical delivered a strong performance in 2022
with organic gross profit growth of 7.1% reinforcing our role as a
trusted partner to our clients and customers. The result in 2022
builds on strong growth in the division in prior years. The
acquisition of Inspired Health, a US based healthcare insights
consultancy business enables the Pharma business unit to evolve its
commercialisation offering to enhance its clients' competitiveness
and improve healthcare delivery. The MedTech business unit
continues to focus on providing fully integrated solutions for our
clients who are bringing innovative medical technologies, including
robotic surgery solutions, to the market.
Key performance highlights include:
-- Gross profit growth of 12.6% achieved across the division, of
which 7.1% was organic. Both MedTech and Pharma delivering double
digit gross profit growth.
-- Gross profit generated from outside Ireland represents c.60%
of the divisional gross profit.
-- Increase in the number of manufacturers represented in more
than one geography to 77 (2021: 67).
-- Medical affairs capability established in nine markets across Europe.
-- Completion of the acquisition of Inspired Health which
broadens our service offering into market research and
insights.
MedTech
The Commercial & Clinical MedTech business unit offers a
fully integrated solution for our clients in sales, marketing and
distribution of medical devices across interventional
cardiology/radiology, orthopaedics, ophthalmology, minimally
invasive surgery, diagnostic imaging and critical care.
The strength of the MedTech business unit is in the diversity of
our portfolio across market leading and innovative brands and the
depth of relationships with customers and manufacturers. The
business continues to focus on bringing the latest MedTech
innovation to customers with robotic surgical technology being a
focus area in 2022. Robotic technology is increasingly being
recognised for its precision and accuracy in surgery that can
result in improved patient outcomes with resulting efficiencies for
healthcare providers. Our clients rely on the expertise of our
teams to support them in transitioning to new technologies and
ensuring they are achieving the optimum benefits from the products
we supply. Many of our teams are clinically trained and our clients
trust these peer-to-peer relationships when making investment
decisions.
Relationships are at the centre of MedTech and the business
focusses on expanding relationships with manufacturers across
multiple geographies. This drives the geographic growth of the
division and the business is now active in 15 markets and we
represent 77 manufacturers across more than one geography (67 in
2021). In late 2022 the division commenced development of a US
based facility in North Carolina. Due to become operational in
mid-2023, the facility will provide distribution and support
services to clients in the US.
Pharma
The Pharma business unit supports pharmaceutical partners in
driving the commercialisation of their products by leveraging data,
insights and marketing solutions to deliver targeted omni-channel
programmes. The pharmaceutical industry is dynamic and constantly
changing as manufacturers develop innovative therapies and seek new
methods of commercialising them.
The Pharma industry has traditionally focussed on in-person
engagement with healthcare professionals (HCPs) as the principal
means of communication. The Covid-19 pandemic forced a rapid
rethink in the sales and marketing strategies of pharma companies
as in-person engagement was no longer possible. Our Pharma business
unit has supported our clients with digital engagement solutions in
recent years and it is now clear that the future is a hybrid of
digital and in-person engagement. HCPs are increasingly seeking
information that is customised to their interests, delivered in a
convenient medium at a time of their choice rather than mass
marketing.
Uniphar's Pharma business unit has built the capability in
recent years to support our clients in this changed environment.
Our BestMSLs business offers expert medical information condensed
into short streaming videos through The Doctors Channel and hosts
immersive three-dimensional events online through The Island
platform. The 2021 acquisition of E4H has further enhanced our
ability to deliver targeted digital marketing content. The Pharma
business unit offers a truly differentiated omni-channel solution
to clients to enable them to achieve the commercialisation
objectives.
We have also recently established a medical affairs capability
across Europe with local expertise covering Germany, Austria,
Switzerland, France, Belgium, Luxembourg, Italy, Ireland and the
UK, and near-term plans to add Spain and Portugal. This experienced
team has launch experience in Rare Disease, Immunology, Oncology,
Haematology, Neurology, Vaccines and Paediatrics and will support
clients launching therapies in European markets that address unmet
needs and deliver the best quality of care for patients.
The acquisition of Inspired Health in 2022 increases Uniphar's
capability to offer market research and commercialisation insights
to pharmaceutical and MedTech manufacturers and further deepens our
presence in the strategically important US market. Inspired Health
uses innovative market research techniques to assist its clients to
better understand physicians, patients, administrators and payors.
The acquisition enhances Uniphar's commercialisation offering to
clients and complements our recent US acquisitions of BestMSLs,
Diligent Health Solutions and RRD International.
Outlook
The strong performance of the Commercial & Clinical division
demonstrates the inherent strength of its product offering and the
diversity of its portfolio. The division continues to focus on
growing our long-standing manufacturer relationships into new
geographies. Innovation plays an important role in the continued
growth of the division and supporting the deployment of surgical
robotics will drive future growth in MedTech while digital
engagement technologies and consultancy services provide growth
opportunities in the Pharma business unit.
Product Access
Growth
2022 2021 Constant
Year ended 31 December EUR'000 EUR'000 Reported currency
Revenue 206,868 157,152 31.6% 30.0%
Gross profit 50,178 41,318 21.4% 18.2%
Gross profit margin 24.3% 26.3% -200bps
========== ==========
The Business
The Product Access division is focused on ensuring equitable
access to medicines for patients. We partner with manufacturers to
provide global reach and world class execution to get their
medicines to the patients that need them, with many of these being
early stage, high tech or otherwise difficult to source medicines.
Our deep industry knowledge and experience coupled with our digital
capabilities enables us to navigate the complex regulatory,
logistical and clinical challenges to get medicines to wherever
they are needed around the world. The Product Access division has
two business units, On Demand and Exclusive Access.
Highlights
Product Access delivered strong gross profit growth of 21.4% in
2022, of which 7.0% was organic. The division made continued
progress across several strategic initiatives. The acquisitions of
Orspec Pharma and BModesto significantly broadens our geographic
reach and capability into continental Europe and APAC. In Exclusive
Access, wins in the US and in innovative areas such as cell and
gene therapies reinforce our market leading proposition.
Key performance highlights include:
-- 21.4% gross profit growth achieved across the division.
-- 10 new exclusive agreements (EAPs) onboarded in the year.
-- A number of US EAPs awarded during 2022 representing a
significant milestone in the division's geographic expansion.
-- Completion of the acquisitions of Orspec Pharma and BModesto
Group significantly expanding our geographic reach and
capability.
On Demand
The On Demand business is a leading supplier of unlicensed and
difficult to source medicines to healthcare providers globally. The
increase in the geographic footprint of the business continued in
2022. The acquisition of BModesto Group, which expands our reach in
continental Europe, the acquisition of Orspec Pharma, which
provides access to the APAC markets, in addition to the 2021
acquisition of Devonshire Healthcare services, which gives us
direct access to MENA, provides a platform to continue the global
growth strategy. The business was well positioned to respond to the
global supply chain challenges experienced in 2022 that resulted in
certain medicines being in short supply. We worked across multiple
geographies and leveraged relationships with manufacturers to
ensure continuity of supply during 2022.
BModesto Group will play an important role in further scaling
our European presence and the acquisition gives us a well-located
facility in the Netherlands from which to supply mainland Europe.
The BModesto Group provides a wide range of services including the
distribution of medicines on both an exclusive and on-demand basis,
clinical trial services, market authorisation holder and medical
device distribution. The acquisition of Orspec Pharma,
headquartered in Australia, provides the Group with its first
physical presence in Asia Pacific. Orspec Pharma specialises in the
supply of unlicensed medicines and the delivery of EAP's across the
Asia region from its locations in Australia, New Zealand and
Singapore.
Exclusive Access
Expanded Access Programs (EAPs) are increasingly being seen as a
valuable step in the drug approval and commercialisation process to
both manufacturers and patients. Patients gain access to innovative
medicines that may not be available to them through other routes
enabling better patient outcomes. EAPs are used to obtain greater
knowledge and understanding of the patient, medicine and market
while enabling the manufacturer to refine and target their
commercialisation strategy.
Uniphar's unique combination of innovative technology, global
distribution capabilities and passionate and experienced people
make us a compelling proposition in global EAP delivery. The Uniphi
technology platform has been developed in recent years and combines
patient enrolment with personalised patient education.
The Exclusive Access business unit has performed well during
2022 and builds on the momentum achieved in prior years.
Investments in the division in recent years have expanded the
capabilities we offer our clients and we have built a strong
reputation in therapeutic areas such as Gene Therapy, Oncology,
Neurology and CAR T-cell Therapy and Transplant.
Winning multiple US-based Expanded Access Programs represents a
significant milestone in the division's continued geographic
growth. While the bulk of growth continues to be from emerging and
mid-size biotech firms, the division continues to focus on
attracting EAPs from innovators of all sizes as our reputation for
operational excellence and investment in scalable infrastructure
continues to grow in the market.
Outlook
Covid-19 disruption over the last three years has led to
short-term product development headwinds, product launch deferrals
and business development interruption. While these factors have
been a challenge, drug development pipelines remain strong and will
ultimately result in additional opportunities for the division in
the medium term. The division is targeting a return to double digit
organic growth in gross profit in the second half of 2023. Our
recent acquisitions give us a stronger and enlarged On Demand
business and also enhances the attractiveness of our EAP offering
by expanding our global reach. The strength of our integrated model
is in our ability to leverage relationships and infrastructure in
other business areas and for other customers. The acquisitions
completed in the year offer considerable cross-selling
opportunities with other business areas. We see 2023 as a year of
continued development of our On Demand and Exclusive Access
offerings with continued investment in digital technology and
scalable infrastructure.
Supply Chain & Retail
Growth
2022 2021 Constant
Year ended 31 December EUR'000 EUR'000 Reported currency
Revenue 1,557,035 1,486,089 4.8% 4.8%
Gross profit 139,012 128,781 7.9% 7.9%
Gross profit margin 8.9% 8.7% +20bps
========== ==========
The Business
The Supply Chain & Retail division ensures critical
medications are supplied to pharmacies and hospitals in Ireland
every day through an efficient, timely and secure supply chain. The
Supply Chain & Retail division comprises of our pre-wholesale
and wholesale pharmaceutical distribution business together with a
vertically integrated retail offering. Our Retail offering has
c.1,850 community pharmacy customers of which 386 (prior to the
acquisition of McCauley Pharmacy Group) are owned, franchised or
supported pharmacies. Uniphar holds c.53% of the wholesale market
share and c.60% hospital market share and is an essential component
of the national health infrastructure in Ireland.
Highlights
The Supply Chain & Retail division delivered an outstanding
performance in 2022 with growth achieved in both volume and market
share. The proposed acquisition of Navi Group, which was announced
in 2021, will no longer proceed to completion as it has not been
cleared by the CCPC. Navi Group has been a longstanding partner of
Uniphar and both parties will continue to work closely together to
support our shared base of independent community pharmacies. The
acquisition of the McCauley Pharmacy Group, completed in January
2023, further enhances our presence in the Irish retail market.
Key performance highlights include:
-- 7.9% growth in gross profit of which 4.1% is organic growth.
-- Commencement of development of our new state-of-the-art distribution centre in Dublin.
-- Acquisition of the McCauley Pharmacy Group completed in January 2023.
-- 7% growth in consumer product offering with our agency brands
and own brands performing strongly.
Wholesale
The Wholesale business delivered a very strong performance in
the year, with the main business activity continuing to be centred
around the provision of prescription and OTC (Over the Counter)
products to meet the core demand from our pharmacy customers. Our
consumer products offering continued to grow with the ongoing
expansion and development of the range of products and brands
available, which is an important element in offering our customers
a "one stop shop" for all their pharmacy needs.
Shortages of medicines proved to be a challenge during 2022
across Europe as manufacturers experienced supply chain disruption
and unprecedented inflationary pressures. Product shortages cause
operational challenges for wholesalers as safety stock levels
reduced and demand needed to be fairly allocated. Whilst we are
dependent on manufacturers to supply product, our operational
infrastructure proved capable of rapidly delivering product into
the system as quickly and fairly as possible.
During 2022, we commenced investment in a new state-of-the-art
distribution facility in Dublin that will double existing capacity
levels. This expanded capacity will enable us to deliver on our
Pharmacy of the Future strategy and, together with investment in
innovative digital solutions, will accelerate our ability to
support our customers to achieve a fully connected pharmacy.
Pre-wholesale
Our pre-wholesale distribution business is a trusted partner of
key principal manufacturers who benefit from our innovative
solutions tailored to their business needs. Growth was achieved in
the year from a combination of both underlying market and business
growth. We are supporting our manufacturer partners in navigating
the ongoing Brexit impacts such as new routes to market. For
products continuing to be imported from the UK, we work in
partnership with the manufacturers to ensure the relevant licences
and procedures are in place to ensure the smooth flow of
products.
A new four-year IPHA (Irish Pharmaceutical Healthcare
Association) agreement came into effect in 2022 and brought with it
market price changes across our client manufacturer portfolios as
we see the growing penetration of biosimilar products and specific
manufacturer products going off patent.
We enter 2023 in a strong position with contract renewals
completed with a number of our long-standing manufacturers and new
business opportunities being progressed with some key client
partners.
Retail
2022 has been a strong year for our retail pharmacy business
despite the inflationary challenges being experienced. Across our
three retail brands the business has enjoyed strong volume growth
in both dispensed items and consumer retail with Over The Counter
volume in particular being exceptionally strong during 2022.
One of the biggest challenges for the sector as a whole has been
staffing with pharmacists, technicians and retail staff being
difficult to recruit and retain, with a consequential impact on
pharmacist locum costs being a particular challenge. Despite this,
our retail stores continued to deliver for their customers,
supporting them with courtesy, expertise and kindness. In
recognition of this tremendous work within the community all three
retail brands received a number of national retail awards
throughout 2022.
In September 2022, Uniphar announced the acquisition of the
McCauley Pharmacy group, with the acquisition completing in January
2023. McCauley's have been a close partner of the Group for over 50
years and this strategic investment will add 37 retail pharmacies
to the Uniphar network bringing with it a market leading retail
chain along with a growing online business. The McCauley Pharmacy
Group is widely regarded as a leading brand across health,
wellbeing and beauty, and their expertise and advanced digital
offering will complement our fast-growing consumer business in the
Supply Chain & Retail division.
Outlook
This division offers significant benefits to the Group's overall
capabilities through our high-tech distribution facilities, our
scalable digital infrastructure, our long-standing manufacturer
relationships and our highly skilled people, who have deep insights
into the healthcare eco-system. The acquisition of the McCauley
Pharmacy Group and the development of our new Dublin distribution
facility will create the platform and capacity for the division to
facilitate growth in the future. While the division is present in
Ireland today, the Group continues to review other markets where
the successful Irish model may be replicable.
Summary financial performance
Growth
2022 2021 Constant
Year ended 31 December EUR'000 EUR'000 Reported currency
IFRS measures
Revenue 2,070,669 1,943,149 6.6% 6.3%
Gross profit 306,744 274,497 11.7% 10.8%
Operating profit 53,155 45,147 17.7% 17.0%
Basic EPS (cent) 16.7 17.8
Alternative performance
measures
Gross profit margin 14.8% 14.1%
EBITDA 98,040 86,481 13.4% 12.5%
EBITDA % 4.7% 4.5%
Adjusted EPS (cent) 18.4 16.2
Net bank debt (91,217) (48,297)
Return on capital employed 17.3% 17.6%
============================ ========== ========== =========== ===========
Revenue
Revenue exceeded EUR2bn increasing by 6.6% in the year (6.3%
constant currency). The increase was evident across all three
divisions and further supported by acquisitions in each of the
divisions, with a particularly strong performance in the Supply
Chain & Retail division.
Gross profit
Gross profit growth of 11.7% (10.8% constant currency) was
achieved in the year through a mix of 5.7% organic growth in
addition to the contribution from acquisitions. Growth was achieved
across each of the divisions with a particularly strong performance
in the Supply Chain & Retail division driven by strong market
demand. The Commercial & Clinical division's result was driven
by a strong demand for MedTech products, while Product Access
delivered a solid performance in a market that is still recovering
from the impacts of the pandemic. Gross profit margin has increased
from 14.1% to 14.8% reflecting a shift towards higher margin
sectors and businesses. In 2022, 32% (2021: 32%) of the Group's
gross profit was generated outside of Ireland reflecting the
ongoing expansion of the Group's Commercial & Clinical and
Product Access divisions into new regions.
Divisional gross profit
Growth
========== ==========
Year ended 31 2022 2021 Constant
December EUR'000 EUR'000 Reported Currency Organic
Commercial &
Clinical 117,554 104,398 12.6% 11.5% 7.1%
Product Access 50,178 41,318 21.4% 18.2% 7.0%
Supply Chain
& Retail 139,012 128,781 7.9% 7.9% 4.1%
---------- ----------
306,744 274,497 11.7% 10.8% 5.7%
---------- ----------
EBITDA
EBITDA increased by EUR11.5m to EUR98.0m which represents growth
of 13.4% in the year (constant currency 12.5%). 2022 saw
unprecedented global inflationary challenges, the EBITDA growth
reflects not only organic gross profit growth and the impact of
recent acquisitions but also strong cost management to ensure the
business remains competitive.
Exceptional items
Pre-tax exceptional items in the year amounted to a charge of
EUR3.2m before tax (2021: EUR5.4m credit). This includes costs of
EUR16.4m primarily relating to acquisition, integration,
redundancy, and restructuring costs. This was offset by a release
of deferred contingent consideration of EUR12.1m following a review
of the expected performance against earn-out targets and
contractual obligations and a further EUR1.4m relating to a
revision in discount rates associated with deferred contingent
consideration to reflect the present value of the future contingent
liabilities. In addition there was the release of refinancing costs
relating to the 2020 banking facility of EUR0.3m. Further details
can be found on Note 4 in the financial statements.
Earnings per share
Basic earnings per share reduced from 17.8 cent to 16.7 cent in
2022. The decrease is primarily as a result of an increase in
exceptional costs in 2022 when compared to 2021. The weighted
average number of shares marginally increased in 2022 reflecting
the impact of LTIP shares on which performance conditions were
satisfied.
Adjusted earnings per share is calculated after adjusting for
amortisation of acquisition related intangibles and exceptional
costs. The Group's adjusted earnings per share for 2022 was 18.4
cent (2021: 16.2 cent). Underlying earnings have increased by 14.3%
from EUR43.8m in 2021 to EUR50.1m in 2022. This was partially
offset by a 1.1% impact of an increase in the weighted average
number of shares in issue compared to 2021.
Cash flow and net bank debt
The Group delivered a strong cash performance during the year,
with a free cash flow conversion of 82.5% and a net bank debt
position of EUR91.2m (2021: EUR48.3m).
2022 2021
Year ended 31 December EUR'000 EUR'000
Net cash inflow from operating activities 82,831 52,177
Net cash outflow from investing activities (106,332) (49,658)
Net cash inflow from financing activities 50,405 13,259
Foreign currency translation movement (1,225) 1,837
--------- --------
Increase in cash and cash equivalents in the
year 25,679 17,615
--------- --------
Movement in restricted cash - (3,097)
Non-cash movement in borrowings 14,423 350
Cash flow from movement in borrowings (83,022) (28,746)
--------- --------
Movement in net bank debt (42,920) (13,878)
--------- --------
The Group continues to maintain a strong focus on working
capital management and this is reflected in the cash generated from
operating activities of EUR82.8m. Free cash flow conversion for the
period was 82.5% which exceeds the medium-term free cash flow
conversion target of 60-70%.
The net cash outflow from investing activities of EUR106.3m
principally consisted of acquisitions completed during the year of
EUR67.2m (net of cash acquired), capital investment of EUR19.9m,
deferred and deferred contingent consideration payments of EUR9.3m
and repayment of debt acquired on acquisition of EUR9.4m.
The net cash inflow from financing activities of EUR50.4m was
due to a net increase in borrowings offset by principal lease
payments and the payment of dividends.
Debt refinancing
The Group refinanced its debt facility in August 2022 and
entered a new five year arrangement (with two options to extend by
a further one year) which more than doubled the revolving credit
facility to EUR400m with an additional uncommitted accordion
facility of EUR150m. Three new international banks Barclays bank,
ING Bank and Citizens bank joined the existing syndicate with a
total of seven participating banks in the renewed facility. Net
bank debt was EUR91.2m (2021: EUR48.3m) at year end and leverage
remained low at 1.0x. The expanded facility combined with the low
leverage provides the Group with the platform to support future
growth and investment.
Taxation
The Group's tax charge has increased by EUR1.3m to EUR9.0m
driven largely by the growth in pre-exceptional profits of the
Group. The effective tax rate before exceptional items has
increased from 16.8% to 17.4% reflective of the contribution of
profits from higher tax jurisdictions outside of Ireland. The
effective tax rate is calculated as the pre-exceptional income tax
charge for the year as a percentage of the profit before tax and
exceptional items.
Currency exposure
The Group continues to expand into new geographies which,
together with the continued growth in existing geographies outside
of the Eurozone results in a foreign exchange exposure for the
Group being the translation of local income statements and balance
sheets into Euro for consolidation purposes.
On a constant currency basis, revenue increased by 6.3% vs 6.6%
reported growth, gross profit increased 10.8% vs 11.7% reported
growth and operating profit increased by 17.0% vs 17.7% reported
growth.
2022 2021
Average Average
GBP 0.852 0.860
US Dollar 1.051 1.182
Swedish Krona 10.623 10.145
=============== ======== ========
Return on capital employed (ROCE)
Group ROCE in 2022 of 17.3% (2021: 17.6%) is slightly lower than
prior year reflecting the impact of prior and current year
acquisitions as the Group continues to expand into new geographies
and higher value businesses. The investments made during 2022 are
performing well and will deliver further benefits and growth in the
coming years.
Details on how this was calculated are included in the APMs
section.
Dividends
The Board remains committed to a progressive dividend policy as
stated at the time of the IPO. The Directors are proposing a final
dividend of EUR3.1m (EUR0.011 per ordinary share), subject to
approval at the Company's AGM. It is proposed to pay the dividend
on 16 May 2023 to ordinary shareholders on the Company's register
at 5pm on 21 April 2023. Together with the interim dividend of
EUR1.7m (EUR0.006 per ordinary share) paid in October 2022 this
brings the total dividend for the year to EUR4.8m (EUR0.017 per
ordinary share) representing an increase of 4.8% on 2021.
Group Income Statement
for the year ended 31 December 2022
2022 2022 2022 2021 2021 2021
Pre- Exceptional Pre- Exceptional
exceptional (note 3) Total exceptional (note 3) Total
Notes EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Revenue 2 2,070,669 - 2,070,669 1,943,149 - 1,943,149
Cost of sales (1,763,925) - (1,763,925) (1,668,652) - (1,668,652)
------------ ------------ ----------- ------------ ------------ -----------
Gross profit 306,744 - 306,744 274,497 - 274,497
Selling and distribution
costs (70,055) - (70,055) (60,712) - (60,712)
Administrative expenses (167,275) (16,415) (183,690) (154,471) (14,404) (168,875)
Other operating income 156 - 156 237 - 237
------------ ------------ ----------- ------------ ------------ -----------
Operating profit 69,570 (16,415) 53,155 59,551 (14,404) 45,147
Finance (cost)/income 4 (11,670) 13,191 1,521 (9,107) 19,761 10,654
------------ ------------ ----------- ------------ ------------ -----------
Profit before tax 57,900 (3,224) 54,676 50,444 5,357 55,801
Income tax expense (10,076) 1,106 (8,970) (8,456) 777 (7,679)
------------ ------------ ----------- ------------ ------------ -----------
Profit for the financial
year 47,824 (2,118) 45,706 41,988 6,134 48,122
------------ ------------ ----------- ------------ ------------ -----------
Attributable to:
Owners of the parent 45,587 48,077
Non-controlling interests 119 45
----------- -----------
Profit for the financial
year 45,706 48,122
----------- -----------
Attributable to:
Continuing operations 45,706 48,122
----------- -----------
Profit for the financial
year 45,706 48,122
Earnings per ordinary share
(in cent):
Continuing operations 16.7 17.8
----------- -----------
Basic and diluted earnings
per share (in cent) 5 16.7 17.8
----------- -----------
Group Statement of Comprehensive Income
for the year ended 31 December 2022
2022 2021
EUR'000 EUR'000
Profit for the financial year 45,706 48,122
Other comprehensive income
Items that may be reclassified to the Income
Statement:
Unrealised foreign currency translation adjustments (3,356) 6,464
Items that will not be reclassified to the
Income Statement:
Actuarial loss in respect of defined benefit
pension schemes - (9)
Total comprehensive income for the financial
year 42,350 54,577
-------- --------
Attributable to:
Owners of the parent 42,231 54,532
Non-controlling interests 119 45
-------- --------
Total comprehensive income for the financial
year 42,350 54,577
-------- --------
Attributable to:
Continuing operations 42,350 54,577
-------- --------
Total comprehensive income for the financial
year 42,350 54,577
-------- --------
Group Balance Sheet
as at 31 December 2022
2022 2021
ASSETS Notes EUR'000 EUR'000
Non-current assets
Intangible assets - goodwill 7 482,981 423,643
Intangible assets - other assets 7 24,459 22,968
Property, plant and equipment, and right-of-use
assets 8 166,628 152,491
Financial assets - Investments in equity instruments 25 25
Deferred tax asset 9,020 1,734
Other receivables 509 388
Total non-current assets 683,622 601,249
--------- --------
Current assets
Inventory 157,656 112,407
Trade and other receivables 164,212 151,778
Cash and cash equivalents 103,704 78,025
Assets held for sale 10 1,600 1,600
--------- --------
Total current assets 427,172 343,810
--------- --------
Total assets 1,110,794 945,059
--------- --------
EQUITY
Capital and reserves
Called up share capital presented as equity 11 21,841 21,841
Share premium 176,501 176,501
Share based payment reserve 718 183
Other reserves 2,008 5,364
Retained earnings 88,476 47,555
--------- --------
Attributable to owners 289,544 251,444
Attributable to non-controlling interests 239 120
--------- --------
Total equity 289,783 251,564
--------- --------
LIABILITIES
Non-current liabilities
Borrowings 12 187,431 124,601
Provisions 13 94,060 90,401
Lease obligations 14 105,919 104,720
Total non-current liabilities 387,410 319,722
--------- --------
Current liabilities
Borrowings 12 7,490 1,721
Lease obligations 14 14,315 14,358
Trade and other payables 407,206 357,694
Corporation tax 4,590 -
Total current liabilities 433,601 373,773
--------- --------
Total liabilities 821,011 693,495
--------- --------
Total equity and liabilities 1,110,794 945,059
--------- --------
Group Cash Flow Statement
for the year ended 31 December 2022
2022 2021
Notes EUR'000 EUR'000
Operating activities
Cash inflow from operating activities 16 82,704 68,376
Proceeds from non-recourse financing 15,000 -
Payment of deferred contingent consideration - (1,250)
Interest paid (5,197) (3,118)
Interest paid on lease liabilities 14 (3,644) (3,772)
Corporation tax payments (6,032) (8,059)
--------- --------
Net cash inflow from operating activities 82,831 52,177
--------- --------
Investing activities
Payments to acquire property, plant and equipment
- Maintenance (8,299) (8,795)
Payments to acquire property, plant and equipment
- Strategic projects (5,657) (1,730)
Receipts from disposal of property, plant
and equipment 128 35
Payments to acquire intangible assets - Maintenance (3,448) (3,904)
Payments to acquire intangible assets - Strategic
projects (2,517) -
Receipts from disposal of assets held for
sale 10 - 350
Payments to acquire subsidiary undertakings
(net of cash acquired) (67,248) (26,567)
Repayment of debt acquired on acquisition
of subsidiary undertakings (9,420) (352)
(Payments)/receipts on prior year acquisitions (937) 3,428
Payment of deferred and deferred contingent
consideration (9,282) (12,323)
Receipt of deferred consideration receivable 348 200
--------- --------
Net cash outflow from investing activities (106,332) (49,658)
--------- --------
Financing activities
Proceeds from borrowings 98,174 42,692
Repayments of borrowings (19,769) (13,946)
Decrease in invoice discounting facilities (9,806) -
Movement in restricted cash - 3,097
Payment of dividends (4,666) (5,731)
Principal element of lease payments (13,192) (12,853)
Acquisition of further equity in subsidiaries (336) -
--------- --------
Net cash inflow from financing activities 50,405 13,259
--------- --------
Increase in cash and cash equivalents in the
year 26,904 15,778
Foreign currency translation of cash and cash
equivalents (1,225) 1,837
Opening balance cash and cash equivalents 78,025 60,410
--------- --------
Closing balance cash and cash equivalents 15 103,704 78,025
--------- --------
Group Statement of Changes in Equity
for the year ended 31 December 2022
Share Share Share Foreign Revaluation Capital Retained Attributable Total
capital premium based currency reserve redemption earnings to non- shareholders'
payment translation reserve controlling equity
reserve reserve interests
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
At 1 January 2021 21,841 176,501 - (1,860) 700 60 5,218 75 202,535
Profit for the
financial year - - - - - - 48,077 45 48,122
Other
comprehensive
income/(expense):
Re-measurement
loss on pensions
(net of tax) - - - - - - (9) - (9)
Movement in
foreign currency
translation
reserve - - - 6,464 - - - - 6,464
Transactions
recognised
directly in
equity:
Movement in share
based payment
reserve - - 183 - - - - - 183
Dividends paid - - - - - - (5,731) - (5,731)
At 31 December
2021 21,841 176,501 183 4,604 700 60 47,555 120 251,564
------- ------- ------- ----------- ----------- ---------- -------- ------------ -------------
At 1 January 2022 21,841 176,501 183 4,604 700 60 47,555 120 251,564
Profit for the
financial year - - - - - - 45,587 119 45,706
Other
comprehensive
income/(expense):
Movement in
foreign currency
translation
reserve - - - (3,356) - - - - (3,356)
Transactions
recognised
directly in
equity:
Movement in share
based payment
reserve - - 535 - - - - - 535
Dividends paid - - - - - - (4,666) - (4,666)
At 31 December
2022 21,841 176,501 718 1,248 700 60 88,476 239 289,783
------- ------- ------- ----------- ----------- ---------- -------- ------------ -------------
Notes to the Consolidated Financial Statements
1. General information
Basis of preparation
The 2022 financial statements have been audited, with 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 2022. In accordance with the AIM and Euronext Growth Rules
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 2022.
The Group's consolidated financial statements are prepared for
the year ended 31 December 2022. 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.
The statutory financial statements will be filed with the
Companies Registration Office in line with the Annual Return
date.
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.
The Group has a robust capital structure with strong liquidity,
supported into the future by the banking facility with a remaining
term extending to August 2027 (with two options to extend by a
further one year). The Group renewed and expanded its banking
facility during 2022 to provide it with the platform to fund
continued growth.
Having regard to the factors outlined above and noting the
financial impact of the recently announced acquisitions, 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 2022:
-- Amendments to IFRS3, 'Business combinations' reference to the conceptual framework
-- Amendments to IAS 16, 'Property, plant and equipment' proceeds before intended use
-- Amendments to IAS 37, 'Provisions, contingent liabilities and
contingent assets' cost of fulfilling a contract
-- Annual improvements to IFRS standards 2018-2020
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.
The following accounting standards and interpretations have been
published that are not mandatory for 31 December 2022 reporting
periods and have not been early adopted by the Group:
-- Amendments to IAS 1, 'Presentation of financial statements',
on classification of liabilities
-- Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting Policies
-- Amendments to IAS 8, Definition of Accounting Estimate
-- Amendments to IAS 12, Deferred tax related to assets and
liabilities arising from a single transaction
-- IFRS 17 Insurance Contracts
-- Amendments to IFRS 16, Lease Liability in a Sale and Leaseback
-- Amendments to IAS 1, Non-current Liabilities with Covenants
These standards are not expected to have a material impact in
the current or future reporting periods and on foreseeable future
transactions
2. Revenue
2022 2021
EUR'000 EUR'000
Revenue 2,070,669 1,943,149
--------- ---------
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
several European countries, the US and the Asia Pacific region
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.
2022 2021
EUR'000 EUR'000
Ireland 1,765,064 1,672,158
UK 142,157 161,714
Rest of the World 163,448 109,277
--------- ---------
2,070,669 1,943,149
--------- ---------
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 digitally enabled customer centric 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 the Irish, UK, European, APAC and MENA
markets. Exclusive Access provides bespoke distribution
partnerships to pharmaceutical partners around key brands, with new
programs focused on speciality pharmaceutical products. Delivering
a unique patient support program that allows healthcare
professionals to connect with patients, on a global basis; and
-- Supply Chain & Retail provides both pre-wholesale 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.
2022 2022 2022 2022
Commercial Product Supply Chain Total
& Clinical Access & Retail
EUR'000 EUR'000 EUR'000 EUR'000
Revenue 306,766 206,868 1,557,035 2,070,669
Gross profit 117,554 50,178 139,012 306,744
----------- -------- ------------- ---------
2021 2021 2021 2021
Commercial Product Supply Chain Total
& Clinical Access & Retail
EUR'000 EUR'000 EUR'000 EUR'000
Revenue 299,908 157,152 1,486,089 1,943,149
Gross profit 104,398 41,318 128,781 274,497
----------- -------- ------------- ---------
The Commercial & Clinical revenue of EUR306,766,000 (2021:
EUR299,908,000) consists of revenue derived from
MedTech of EUR233,203,000 (2021: EUR208,137,000) and Pharma of
EUR73,563,000 (2021: EUR91,771,000).
Assets and liabilities are reported to the Board at a Group
level and are not reported on a segmental basis.
3. Exceptional income/(charge)
2022 2021
EUR'000 EUR'000
Professional fees including acquisition costs (6,607) (3,339)
Redundancy and restructuring costs (6,165) (4,610)
Acquisition integration costs (3,337) (2,295)
Settlement loss on closure of defined benefit
pension scheme - (211)
Foreign exchange revaluation of deferred contingent
consideration - (1,373)
Cessation of supplier contracts - recovery/(inventory
write off) 115 (1,754)
Other exceptional costs (421) (822)
Exceptional charge recognised in operating profit (16,415) (14,404)
-------- --------
Decrease in deferred contingent consideration 12,030 19,761
Decrease in deferred acquisition consideration 109 -
Change in discount rates on deferred contingent
consideration 1,405 -
Refinancing costs impairment (353) -
-------- --------
Exceptional credit recognised in finance cost 13,191 19,761
-------- --------
Exceptional credit recognised in income tax 1,106 777
-------- --------
Total exceptional (charge)/income (2,118) 6,134
-------- --------
Professional fees including acquisition costs
Professional fees including acquisition costs relate to costs
incurred in relation to acquisitions and include third party
fees.
Redundancy & Restructuring:
Redundancy and restructuring costs are primarily redundancy and
ex gratia termination costs arising on reorganisations and recent
acquisitions.
Acquisition integration costs:
Acquisition integration costs relate to professional fees
incurred on the integration of recent acquisitions into the
expanded Group and payments made to staff agreed as part of the RRD
International acquisition which are not classified as
consideration.
Cessation of supplier contracts:
Cessation of specific MedTech supplier contracts in 2021
relating to the supply of PPE and decontamination equipment giving
rise to inventory write offs. A portion of this write off was
recovered in 2022 resulting in a credit to the Income
Statement.
Deferred and deferred contingent consideration:
Deferred contingent consideration relates to a release of
EUR12,030,000 following a review of expected performance against
earn out contractual targets in relation to Diligent Health
Solutions (EUR6,530,000) and EPS Group (EUR5,500,000).
In the prior year, deferred contingent consideration relates to
a release of EUR21,739,000 following a review of expected
performance against earn out contractual targets in relation to the
Durbin Group, and a release of EUR2,853,000 due to the completion
of the earnout period and contractual terms in relation to the Sisk
Healthcare Group. In addition, a provision of EUR4,831,000 has been
recognised in respect of increased deferred contingent
consideration payable in relation to the EPS Group.
Change in discount rates on deferred contingent
consideration
The deferred contingent consideration liability at 31 December
2022 has been revised using updated discount rates reflecting an
increase in the discount rate applied to compute the present value
of the liability resulting in a credit of EUR1,405,000 to the
Income Statement.
Refinancing costs
The Group entered a new and enlarged borrowing facility in
August 2022 ahead of the expiration of the previous facility. As
the previous facility has been superseded, the remaining fees
capitalised in respect of it have been charged to the Income
Statement in the year.
4. Finance cost/(income)
2022 2021
EUR'000 EUR'000
Interest on lease obligations 3,644 3,772
Interest payable on borrowings and non-recourse
financing 5,646 3,154
Fair value adjustment to deferred and deferred
contingent consideration 2,137 1,915
Amortisation of refinancing transaction fees 339 303
Interest receivable (96) (37)
Finance cost before exceptional credit 11,670 9,107
-------- -----------
Decrease in fair value deferred contingent consideration
(note 3) (13,544) (19,761)
Refinancing costs (note 3) 353 -
-------- -----------
Exceptional credit recognised in finance cost (13,191) (19,761)
-------- -----------
Total finance (income)/cost (1,521) (10,654)
-------- -----------
Finance costs do not include capitalised borrowing costs of
EUR66,000 (2021: EURnil) on qualifying assets (note 7 and 8).
Interest is capitalised at the Group's weighted average interest
rate for the period 2.1% (2021: nil).
5. Earnings per share
Basic and diluted earnings per share have been calculated by
reference to the following:
2022 2021
Profit for the financial year attributable to
owners (EUR'000) 45,587 48,077
------- -------
Weighted average number of shares ('000) 272,557 269,752
------- -------
Earnings per ordinary share (in cent):
* Basic 16.7 17.8
* Diluted 16.7 17.8
------- -------
Adjusted earnings per share has been calculated by reference to
the following:
2022 2021
EUR'000 EUR'000
Profit for the financial year attributable to
owners 45,587 48,077
Exceptional charge recognised in operating profit
(note 3) 16,415 14,404
Exceptional credit recognised in finance costs
(note 3) (13,191) (19,761)
Exceptional credit recognised in income tax (1,106) (777)
Tax credit on acquisition related intangibles (329) (207)
Amortisation of acquisition related intangibles 2,708 2,063
-------- --------
Profit after tax excluding exceptional items 50,084 43,799
-------- --------
Weighted average number of shares in issue in
the year (000's) 272,557 269,752
-------- --------
Adjusted basic and diluted earnings per ordinary
share (in cent) 18.4 16.2
-------- --------
The weighted average number of ordinary shares includes the
effect of 6,543,620 shares (2022: 2,822,264 on a weighted basis)
(2021: 6,218,620 shares (3,663,023 on a weighted basis)) granted
under the LTIP that have met the share price performance
conditions, but will not vest until 31 December 2024. There is no
impact on the weighted average number of ordinary shares granted
under new senior management share option schemes in the year (2021:
16,964 shares).
6. Dividends
The Directors have proposed a final dividend of EUR3.1m
(EUR0.011 per ordinary share), subject to approval at the AGM. This
results in a total shareholders dividend of EUR4.8m (EUR0.017 per
ordinary share) in respect of the year ended 31 December 2022 as
the Board declared and paid a 2022 interim dividend of EUR1.7m
(EUR0.006 per ordinary share). If approved, the proposed dividend
will be paid on 16 May 2023 to ordinary shareholders on the
Company's register on 21 April 2023. This dividend has not been
provided for in the Balance Sheet at 31 December 2022, as there was
no present obligation to pay the dividend at year end.
A final dividend of EUR3.0m (EUR0.011 per ordinary share)
relating to 2021 was paid in May 2022.
7. Intangible assets
Computer Trademark Goodwill Technology Brand name Customer Total
software & licences asset Relationships
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Cost
At 1 January 2022 36,180 153 442,352 2,914 11,238 3,126 495,963
FX movement (36) - (1,509) 133 - 196 (1,216)
Acquisitions (note
18) 328 36 60,847 - - - 61,211
Additions 5,965 - - - - - 5,965
Disposals/retirements (490) - - - - - (490)
At 31 December
2022 41,947 189 501,690 3,047 11,238 3,322 561,433
--------- ----------- -------- ---------- ---------- -------------- --------
Amortisation
At 1 January 2022 28,127 153 18,709 419 1,215 729 49,352
FX movement (9) - - (10) - 36 17
Amortisation 2,405 1 - 910 1,124 674 5,114
Disposals/retirements (490) - - - - - (490)
At 31 December
2022 30,033 154 18,709 1,319 2,339 1,439 53,993
--------- ----------- -------- ---------- ---------- -------------- --------
Net book amounts
At 31 December
2021 8,053 - 423,643 2,495 10,023 2,397 446,611
--------- ----------- -------- ---------- ---------- -------------- --------
At 31 December
2022 11,914 35 482,981 1,728 8,899 1,883 507,440
--------- ----------- -------- ---------- ---------- -------------- --------
Intangible assets 10,775 35 482,981 1,728 8,899 1,883 506,301
Right-of-use assets 1,139 - - - - - 1,139
--------- ----------- -------- ---------- ---------- -------------- --------
At 31 December
2022 11,914 35 482,981 1,728 8,899 1,883 507,440
--------- ----------- -------- ---------- ---------- -------------- --------
Included in the cost of additions for 2022 is EUR9,000 (2021:
EURnil) incurred in respect of borrowing cost capitalised into
Computer Software.
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 2022 135,705 14,149 29,620 13,045 7,099 8,336 5,012 212,966
Foreign exchange
movement (409) (37) (122) (119) (6) (103) - (796)
Additions 5,951 2,084 11,260 2,378 956 2,059 2,121 26,809
Acquisitions (note 18) 10,195 - 661 312 18 489 - 11,675
Disposals/retirements (1,770) (13) (1,757) (1,424) (1,325) (2,956) (565) (9,810)
At 31 December 2022 149,672 16,183 39,662 14,192 6,742 7,825 6,568 240,844
---------- ------------ ---------- ----------- ---------- --------- ----------- -------
Accumulated
depreciation
At 1 January 2022 24,930 3,139 15,843 5,847 4,271 4,052 2,393 60,475
Foreign exchange
movement (150) (24) (100) (82) (15) (53) - (424)
Charge for the year 11,334 1,520 3,396 1,884 1,116 2,487 1,619 23,356
Disposals/retirements (1,557) (13) (1,742) (1,404) (1,275) (2,635) (565) (9,191)
At 31 December 2022 34,557 4,622 17,397 6,245 4,097 3,851 3,447 74,216
---------- ------------ ---------- ----------- ---------- --------- ----------- -------
Net book amounts
At 31 December 2021 110,775 11,010 13,777 7,198 2,828 4,284 2,619 152,491
---------- ------------ ---------- ----------- ---------- --------- ----------- -------
At 31 December 2022 115,115 11,561 22,265 7,947 2,645 3,974 3,121 166,628
---------- ------------ ---------- ----------- ---------- --------- ----------- -------
Property, plant &
equipment 7,847 11,561 21,987 7,947 2,645 533 3,121 55,641
Right-of-use assets 107,268 - 278 - - 3,441 - 110,987
---------- ------------ ---------- ----------- ---------- --------- ----------- -------
Net book value at 31
December 2022 115,115 11,561 22,265 7,947 2,645 3,974 3,121 166,628
---------- ------------ ---------- ----------- ---------- --------- ----------- -------
Included in property, plant and equipment are assets under
construction with a net book value of EUR10,708,000 (2021:
EUR1,555,000). Depreciation has not commenced on these assets.
Included in the cost of additions for 2022 is EUR57,000 (2021:
EURnil) incurred in respect of borrowing costs capitalised into
assets
9. Employee benefit surplus
The remaining defined benefit plan was wound up in March 2021,
the pension entitlements of employees, including Executive
Directors, now arise under a number of defined contribution schemes
and are secured by contributions by the Group to separate trustee
administered pension funds. In 2021, a settlement loss of
EUR211,000 was recognised on the closure of the Cahill May Roberts
Group Pension Scheme. The assets of the scheme were distributed in
line with members chosen options and no assets or liabilities
remain.
The defined benefit scheme was:
-- The Cahill May Roberts Limited Contributory Pension Plan (wound up in March 2021)
The pension charge for the year is EUR4,058,000 (2021:
EUR4,313,000) which relates to the defined contribution
schemes.
10. Assets held for sale
Properties Total
EUR'000 EUR'000
At 1 January 2022 1,600 1,600
At 31 December 2022 1,600 1,600
---------- -------
During 2022, the Group disposed of EURnil (2021: EUR350,000) of
property which were previously held for sale. There was no
impairment on the value of the remaining property (2021:
EUR350,000) nor was there a corresponding write down of the
associated bank borrowings (2021: EUR350,000). The remaining
property held for sale is available for immediate sale in its
present condition subject to terms that are usual and customary for
property of this nature. The property is being actively marketed
and the Group is committed to its plan to sell this property in an
orderly manner.
11. Called up share capital presented as equity
2022
EUR'000
Authorised:
453.2 million (2021: 453.2 million) ordinary shares of 8c
each 36,256
16.0 million (2021: 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 (2021: 273,015,254) ordinary
shares 21,841
---------
There have been no changes to the authorised or issued share
capital in either 2022 or 2021.
12. Borrowings
Bank loans are repayable in the following periods after 31
December:
2022 2021
EUR'000 EUR'000
Amounts falling due within one year 7,490 1,721
Amounts falling due between one and five years 187,431 124,601
-------- --------
194,921 126,322
-------- --------
The Group's total bank loans at 31 December 2022 were
EUR194,921,000 (2021: EUR126,322,000). Borrowing under invoice
discounting (recourse) as at the balance sheet date was
EUR5,890,000 (2021: EURNil). Bank loans falling due within one year
include EUR1,600,000 (2021: EUR1,600,000) 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 in August 2022. The total
loan value of the revolving credit facility available for use
within this agreement is EUR400,000,000, with an additional
uncommitted accordion facility of EUR150,000,000. This facility
runs for five years to 2027 with two options to extend by a further
one year with repayment of all loans on termination of the facility
in August 2027.
At 31 December 2022, the Group's revolving credit facility loans
in use were at an interest margin of +1.5% (2021: +1.5%) on
inter-bank interest rates (EURIBOR, GBP SONIA and USD SOFR).
Bank security
Bank overdrafts (including invoice discounting) and bank loans
of EUR194,921,000 (2021: EUR126,322,000) are secured by cross
guarantees and fixed and floating charges from the Company and
certain subsidiary undertakings.
13. Provisions
Deferred Lease Warranty Other Total
contingent dilapidation provision
consideration
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
At 1 January 2022 88,918 523 77 883 90,401
Recognised during the
year - - 64 1,665 1,729
Unwinding of discount 2,073 - - - 2,073
Arising on acquisition 17,519 - - - 17,519
Utilised during the year (5,127) - - (952) (6,079)
Released during the year (12,030) (35) - - (12,065)
Change in discount rate (1,405) - - - (1,405)
Foreign currency movement 1,850 - (8) 45 1,887
-------------- ------------- ---------- ------- --------
At 31 December 2022 91,798 488 133 1,641 94,060
-------------- ------------- ---------- ------- --------
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 EUR5,127,000 (2021: EUR13,283,000) were made
in respect of prior year acquisitions. Deferred contingent
consideration of EUR12,030,000 (2021: EUR24,592,000) in respect of
prior year acquisitions were released in the year following a
review of expected performance against earn-out targets. The
discount rates used to discount the provisions to present value
were updated at 31 December 2022 resulting in a credit of
EUR1,405,000 being recognised as an exceptional item in the 2022
Income Statement (2021: EURnil). Further details on the measurement
of deferred contingent consideration is provided in note 17.
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 2049.
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.
Other
Other provisions relate to a management retention bonus payable
in relation to the acquisition of RRD International, LLC in
2020.
14. Leases
(i) Amounts recognised in the Balance Sheet
As at 31 December, the Balance Sheet shows the following amounts
relating to leases:
2022 2021
EUR'000 EUR'000
Right-of-use assets:
Buildings 107,268 105,766
Plant and equipment 278 686
Motor vehicles 3,441 4,196
Computer software 1,139 1,519
------- -------
Net book value of right-of-use assets 112,126 112,167
------- -------
Lease liabilities:
Current 14,315 14,358
Non-current 105,919 104,720
------- -------
Total lease liabilities 120,234 119,078
------- -------
Right-of-use assets are included in the lines 'Intangible
assets' and 'Property, plant and equipment, and right-of-use
assets' on the Balance Sheet, and are presented in notes 7 and
8.
Additions to the right-of-use assets during the year ended 31
December 2022 were EUR7,961,000 (2021: EUR9,519,000).
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:
2022 2021
EUR'000 EUR'000
Depreciation/amortisation charge on right-of-use
assets:
Buildings 11,131 10,657
Plant and equipment 414 548
Motor vehicles 2,434 2,660
------- -------
Right-of-use assets depreciation charge 13,979 13,865
------- -------
Computer software 380 380
------- -------
Right-of-use assets amortisation charge 380 380
------- -------
Interest on lease obligations (note 4) 3,644 3,772
Principal repayments 13,192 12,853
------- -------
Total cash outflow in respect of leases 16,836 16,625
------- -------
15. Analysis of net debt
2022 2021
EUR'000 EUR'000
Cash and cash equivalents 103,704 78,025
103,704 78,025
--------- ---------
Bank loans repayable within one year (7,490) (1,721)
Bank loans payable after one year (187,431) (124,601)
--------- ---------
Bank loans (194,921) (126,322)
--------- ---------
Net bank debt (91,217) (48,297)
--------- ---------
Lease obligations (120,234) (119,078)
Net debt (211,451) (167,375)
--------- ---------
16. Reconciliation of operating profit to cash flow from
operating activities
2022 2021
EUR'000 EUR'000
Operating profit before operating exceptional
items 69,570 59,551
Cash related exceptional items (7,768) (9,072)
-------- --------
61,802 50,479
Depreciation 23,356 22,225
Amortisation of intangible assets 5,114 4,705
(Increase)/decrease in inventory (15,130) 3,726
Decrease/(increase) in receivables 2,934 (26,169)
Increase in payables 2,700 13,205
Share based payment expense 535 183
Foreign currency translation adjustments 1,393 22
-------- --------
Cash inflow from operating activities 82,704 68,376
-------- --------
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 2022:
Investments in equity instruments 25 - 25 25
Trade and other receivables
** - 146,814 146,814 146,823
Deferred consideration receivable - 100 100 100
Cash and cash equivalents - 103,704 103,704 103,704
25 250,618 250,643 250,652
---------- ---------- ------- -------
* 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 2022:
Borrowings - 194,921 194,921 194,921
Deferred acquisition consideration - 523 523 523
Trade and other payables **** - 236,238 236,238 236,238
Deferred contingent consideration 91,798 - 91,798 91,798
Lease liabilities - 120,234 120,234 120,234
91,798 551,916 643,714 643,714
------------ ------------ ------- -------
*** 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).
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 2022.
The significant unobservable inputs are:
-- Expected future profit forecasts which have not been
disclosed due to their commercial sensitivities; and
-- Risk adjusted discount rate of between 2.5% and 4% (2021: 2% and 3%).
For the fair value of deferred contingent consideration, a 1%
increase in the risk adjusted discount rate at 31 December 2022,
holding the other inputs constant would reduce the fair value of
the deferred contingent consideration by EUR1.5m. A 1% decrease in
the risk adjusted discount rate would result in an increase of
EUR1.5m in the fair value of the deferred contingent
consideration.
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 2022
Investments in equity instruments - - 25 25
Deferred contingent consideration - - (91,798) (91,798)
------- ------- -------- --------
- - (91,773) (91,773)
------- ------- -------- --------
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 2022:
Shares in Deferred Total
unlisted contingent
companies consideration
EUR'000 EUR'000 EUR'000
At 1 January 2022 25 (88,918) (88,893)
Utilised during the year - 5,127 5,127
Changes in discount rate* - 1,405 1,405
Unwinding of discount* - (2,073) (2,073)
Arising on acquisition - (17,519) (17,519)
Released during the year * - 12,030 12,030
Foreign currency movement - (1,850) (1,850)
---------- -------------- --------
At 31 December 2022 25 (91,798) (91,773)
---------- -------------- --------
* These amounts have been credited/(charged) to the Income
Statement in finance (income)/costs.
Deferred contingent consideration is provided based on
management's assessment of the fair value of the liability taking
into account the expected profitability of the acquisition. The
maximum amount of additional Deferred contingent consideration not
provided for in the financial statements is EUR60,300,000 assuming
the acquisitions satisfy all performance conditions as set out in
their acquisition.
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. These 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.
Under the terms of the invoice discounting non-recourse
agreement, the Group has transferred substantially all credit risk
and control of certain trade receivables. The balance of the
facility as at 31 December 2022 is EUR111,765,000 (2021:
EUR94,118,000). During the year ended 31 December 2022, the Group
increased its non-recourse facility by EUR15,000,000 (2021:
EURnil). The Group has recognised an asset within trade and other
receivables of EUR16,765,000 (2021: EUR14,118,000), 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. Total interest expense associated
with this receivables purchase agreement during the year ended 31
December 2022 was EUR1,866,000 (2021: EUR1,296,000).
18. Acquisitions of subsidiary undertakings and business
assets
A key strategy of the Group is to expand into higher growth
sectors and extend the capabilities the Group can offer our
clients. In line with this strategy, the Group completed the
following acquisitions during the financial year:
-- Chansey Holdings Limited & Edenmore Pharmacy Limited
The Group acquired 100% of the ordinary share capital of Chansey
Holdings Limited & Edenmore Pharmacy Limited in January 2022
for consideration of EUR4,356,000. Chansey Holdings Limited &
Edenmore Pharmacy Limited currently operates three independent
retail pharmacies in Ireland.
-- Boxted Limited
The Group acquired 100% of the ordinary share capital of Boxted
Limited in February 2022 for consideration of EUR1,716,000. Boxted
Limited currently operates an independent retail pharmacy in
Ireland.
-- Dr Hauschka Limited
The Group acquired 100% of the ordinary share capital of Dr
Hauschka Limited in March 2022 for consideration of EUR1,541,000.
Dr Hauschka Limited is a distributor of skincare products to
pharmacies and health stores in Ireland.
-- Lanesra Pharmacy Limited
The Group acquired 100% of the ordinary share capital of Lanesra
Pharmacy Limited in May 2022 for consideration of EUR4,339,000.
Lanesra Pharmacy Limited currently operates an independent retail
pharmacy in Ireland.
-- Mainarch Limited
The Group acquired 100% of the ordinary share capital of
Mainarch Limited in June 2022 for consideration of EUR1,980,000.
Mainarch Limited currently operates an independent retail pharmacy
in Ireland.
-- Orpsec Pharma Group
The Group acquired 100% of the ordinary share capital of Orspec
Pharma Pty Limited in August 2022 for consideration of EUR6,664,000
of which EUR454,000 is deferred and EUR3,836,000 is deferred and
contingent on agreed targets being met. Orspec Pharma, an Australia
headquartered company, supplies pharmaceutical products across the
Asia Pacific region with locations in Australia, New Zealand and
Singapore.
-- Inspired Health
The Group acquired 100% of the membership interests of Inspired
Insight, LLC in September 2022 for a consideration of EUR25,504,000
of which EUR7,087,000 is deferred and contingent on agreed targets
being met. Inspired Health, a United States based company, is an
innovation, sales and marketing consultancy business inspired by
insight and data.
-- BModesto Group
The Group acquired 85% of the ordinary share capital of BModesto
Vastgoed B.V. in November 2022 and, on the same date, entered into
a put and call option which would enable the Group to acquire the
remaining 15% stake in exchange for cash consideration. This has
been accounted under the anticipated acquisition method with the
combined 100% recognised as acquired from November 2022.
Acquisition consideration recognised amounted to EUR41,901,000 of
which EUR6,596,000 is payable based on agreed targets being met in
respect of the put and call option on the remaining 15%
shareholding. BModesto Group, a Netherlands headquartered company,
provides a range of services to healthcare companies, pharmacies
and hospitals including pharmaceutical product supply, clinical
trial services and medical device distribution.
-- Young's Pharmacy
The Group acquired the trade and assets of Young's Pharmacy in
December 2022 for consideration of EUR1,363,000. Young's Pharmacy
operates as an independent retail pharmacy in Ireland.
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 EUR0.4m to EUR48.9m.
The initial assignment of fair values to net assets acquired has
been performed on a provisional basis in respect of the
acquisitions completed during 2022, due to their recent acquisition
dates. 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 2023 Annual Report as stipulated by IFRS
3, Business Combinations.
The acquisitions completed in 2022 have contributed EUR61.4m to
revenue and EUR11.2m of gross profit for the year since the date of
acquisition. The proforma revenue and operating profit for the
Group for the year ended 31 December 2022 would have been EUR2,360m
and EUR63m respectively had the acquisitions been completed at the
start of the current reporting year.
The provisional fair value of the assets and liabilities
acquired as part of the acquisitions completed during the financial
year are set out below:
BModesto Others Total
EUR'000 EUR'000 EUR'000
ASSETS
Non-current assets
Intangible assets 364 - 364
Property, plant and equipment 4,089 366 4,455
Property, plant and equipment - Right of
use assets 1,118 6,102 7,220
Deferred tax asset 207 6,550 6,757
5,778 13,018 18,796
-------- --------
Current assets
Inventory 28,821 1,298 30,119
Trade and other receivables 27,853 3,337 31,190
Cash and cash equivalents - 3,295 3,295
-------- -------- --------
56,674 7,930 64,604
-------- -------- --------
Total assets 62,452 20,948 83,400
-------- -------- --------
LIABILITIES
Non-current liabilities
Lease liabilities 874 5,447 6,321
874 5,447 6,321
-------- --------
Current liabilities
Lease liabilities 243 656 899
Trade and other payables 19,264 4,220 23,484
Bank loans 23,570 273 23,843
-------- -------- --------
43,077 5,149 48,226
-------- -------- --------
Total liabilities 43,951 10,596 54,547
-------- -------- --------
Identifiable net assets acquired 18,501 10,352 28,853
-------- -------- --------
Non-controlling interest arising on acquisition - - -
-------- -------- --------
Group share of net assets acquired 18,501 10,352 28,853
Goodwill arising on acquisition 23,400 37,447 60,847
-------- -------- --------
Consideration 41,901 47,799 89,700
-------- -------- --------
The acquisition in the 2022 financial year of BModesto 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 gross contractual value of the trade and other receivables
as at the respective dates of acquisition amounted to EUR31.8m. The
fair value of these receivables is EUR31.2m, all of which is
expected to be recoverable, and is inclusive of an aggregate
impairment provision of EUR0.6m. In 2022, the Group incurred
acquisition costs of EUR6.6m (2021: EUR3.3m). These have been
included in administrative expenses in the Group Income
Statement.
2021 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 2021 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 2021, together
with the adjustments made to those carrying values to arrive at the
final fair values are detailed in the Annual Report.
19. Post balance sheet events
On 31 January 2023, the Group acquired 100% of the issued share
capital of LXV Remedies Holdings Limited which trades as the
McCauley's Pharmacy Group. This acquisition was announced in
September 2022 but was subject to clearance by the Competition and
Consumer Protection Commission (CCPC) at 31 December 2022. McCauley
Pharmacy Group is a leading provider of pharmacy and retail
services in Ireland and comprises 37 retail pharmacies at the time
of acquisition. Due to the short time frame between the completion
date of the acquisition of McCauley's Pharmacy Group, and the date
of issuance of this report, it was not possible to reliably
estimate the fair value of assets and liabilities or the goodwill
amount associated with the completed acquisition. This acquisition
will be accounted for as an acquisition in the 2023 financial
statements.
There have been no other material events subsequent to 31
December 2022 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 2021, 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 27 February 2023.
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 represents Net bank debt is used by management
debt the net total of current as it gives a summary of the
and non-current borrowings, Group's current leverage which
cash and cash equivalents, management will consider when
and restricted cash as presented evaluating investment opportunities,
in the Group Balance Sheet. potential acquisitions, and
internal resource allocation.
===================================== =======================================
Net debt Net debt represents the total Net debt is used by management
of net bank debt, plus current as it gives a complete picture
and non-current lease obligations of the Group's debt including
as presented in the Group the impact of lease liabilities
Balance Sheet. recognised under IFRS 16.
===================================== =======================================
Leverage Net bank debt divided by Leverage is used by management
adjusted EBITDA for the period. to evaluate the group's ability
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 operating Adjusted operating profit is
Operating profit as reported in the used to assess the underlying
Profit Group Income Statement before operating performance excluding
amortisation of acquired the impact of non-operational
intangible assets and exceptional items. This is a key measure
items (if any). used by management to evaluate
the businesses operating performance.
===================================== =======================================
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-tax
earnings both the current and prior underlying performance of the
per share period by dividing the profit business assuming a constant
of the relevant period attributable 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 ROCE is calculated as the This measure allows management
on 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
2022 2021
EUR'000 EUR'000
Operating profit Income Statement 53,155 45,147
Exceptional charge recognised in operating profit Note 3 16,415 14,404
Depreciation Note 8 23,356 22,225
Amortisation Note 7 5,114 4,705
-------- --------
EBITDA 98,040 86,481
-------- --------
Adjust for the impact of IFRS 16 (16,837) (16,625)
Pro-forma EBITDA of acquisitions 10,167 1,847
-------- --------
Adjusted EBITDA 91,370 71,703
-------- --------
Net bank debt
2022 2021
EUR'000 EUR'000
Cash and cash equivalents Balance Sheet 103,704 78,025
Bank loans repayable within one year Balance Sheet (7,490) (1,721)
Bank loans payable after one year Balance Sheet (187,431) (124,601)
--------- ---------
Net bank debt (91,217) (48,297)
--------- ---------
Net debt
2022 2021
EUR'000 EUR'000
Net bank debt Alternative Performance Measures (91,217) (48,297)
Current lease obligations Balance Sheet (14,315) (14,358)
Non-current lease obligations Balance Sheet (105,919) (104,720)
--------- ---------
Net debt (211,451) (167,375)
--------- ---------
Leverage
2022 2021
EUR'000 EUR'000
Net bank debt Alternative Performance Measures (91,217) (48,297)
Adjusted EBITDA Alternative Performance Measures 91,370 71,703
-------- --------
Leverage (times) 1.0 0.7
-------- --------
Adjusted operating profit
2022 2021
EUR'000 EUR'000
Operating profit Income Statement 53,155 45,147
Amortisation of acquisition related intangibles 2,708 2,063
Exceptional charge recognised in operating profit Note 3 16,415 14,404
------- -------
Adjusted operating profit 72,278 61,614
------- -------
Adjusted earnings per share
2022 2021
EUR'000 EUR'000
Adjusted earnings per share has been calculated by reference to the following:
Profit for the financial year attributable to owners 45,587 48,077
Exceptional charge recognised in operating profit (note 3) 16,415 14,404
Exceptional credit recognised in finance costs (note 3) (13,191) (19,761)
Exceptional credit recognised in income tax (note 3) (1,106) (777)
Amortisation of acquisition related intangibles 2,708 2,063
Tax credit on acquisition related intangibles (329) (207)
-------- --------
Profit after tax excluding exceptional items 50,084 43,799
Weighted average number of shares in issue in the year (000's) 272,557 269,752
-------- --------
Adjusted basic and diluted earnings per ordinary share (in cent) 18.4 16.2
-------- --------
Like for like weighted average number of shares (000's) 272,557 272,557
-------- --------
Like for like adjusted earnings per ordinary share (in cent) 18.4 16.1
-------- --------
Free cash flow conversion
2022 2021
EUR'000 EUR'000
EBITDA APMs 98,040 86,481
(Increase)/decrease in inventory Note 16 (15,130) 3,726
Decrease/(increase) in receivables Note 16 2,934 (26,169)
Increase in payables Note 16 2,700 13,205
Share based payment expense Note 16 535 183
Foreign currency translation adjustments Note 16 1,393 22
Payments to acquire property, plant and equipment - Maintenance Cash Flow Statement (8,299) (8,795)
Payments to acquire intangible assets -
Maintenance Cash Flow Statement (3,448) (3,904)
-------- --------
Free cash flow 78,725 64,749
-------- --------
Adjustment for settlement of acquired financial
liabilities* 2,138 1,513
-------- --------
80,863 66,262
-------- --------
EBITDA 98,040 86,481
-------- --------
Free cash flow conversion 82.5% 76.6%
-------- --------
* 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
2022 2021 2020
EUR'000 EUR'000 EUR'000
Rolling 12 months operating profit 53,155 45,147
Adjustment for exceptional costs 16,415 14,404
Acquisition related intangible amortisation 2,708 2,063
Adjusted 12 months rolling operating
profit 72,278 61,614
--------- ----------
Total equity 289,783 251,564 202,535
Net bank debt/(cash) 91,217 48,297 34,419
Deferred contingent consideration 91,798 88,918 86,195
Deferred consideration payable 523 4,295 4,461
--------- ---------- ----------
Total capital employed 473,321 393,074 327,610
--------- ---------- ----------
Average capital employed 433,198 360,342
Adjustment for acquisitions (note A /
B below) (15,552) (9,384)
--------- ----------
Adjusted average capital employed 417,646 350,958
--------- ----------
Return on capital employed 17.3% 17.6%
--------- ----------
Note A: Adjustment for acquisitions Capital Completion Adjustment
(2022) employed Date
EUR'000 EUR'000
November
BModesto Group 41,901 2022 (13,967)
Other acquisitions completed during 2022 47,464 Various (1,585)
----------
Adjustment for acquisitions during 2022 (15,552)
----------
Note B: Adjustment for acquisitions Capital Completion Adjustment
(2021) employed Date
EUR'000 EUR'000
BESTMSLs Group 22,966 July 2021 (1,914)
Other acquisitions completed during 2021 18,967 Various (7,470)
----------
Adjustment for acquisitions (9,384)
----------
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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END
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February 28, 2023 02:00 ET (07:00 GMT)
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