Steady as she grows

Laboratorios Farmacéuticos ROVI 27 February 2018 QuickView
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Laboratorios Farmacéuticos ROVI

Steady as she grows

FY17 results

Pharma & biotech

27 February 2018

Price

€16.15

Market cap

€808m

Net debt (€m) at 31 December 2017

2.5

Shares in issue

50.0m

Free float

11.86%

Code

ROVI

Primary exchange

Madrid

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

2.9

(2.0)

13.4

Rel (local)

10.1

(0.5)

8.3

52-week high/low

€17.2

€13.5

Business description

Laboratorios Farmacéuticos ROVI is a fully integrated Spanish speciality pharmaceutical company involved in the development, in-licensing, manufacture and marketing of small molecule and speciality biologic drugs, with a particular expertise in low molecular weight heparin (LMWH).

Next events

Biosimilar enoxaparin launch in select European countries

Ongoing

Risperidone-ISM Phase III data

2019

Analysts

Dr Susie Jana

+44 (0)20 3077 5700

Dr Daniel Wilkinson

+44 (0)20 3077 5734

Laboratorios Farmacéuticos ROVI is a research client of Edison Investment Research Limited

Laboratorios Farmacéuticos ROVI (ROVI) reported FY17 operating revenue of €275.6m (+ 4%), driven by strong growth in the toll manufacturing business (+8%). The speciality pharmaceutical business grew 3%, within which biosimilar enoxaparin reported fledgling sales of €1.5m despite only being available in Germany since September 2017. This asset remains a key driver of top-line growth in the near term and operating profit growth in the medium term. The R&D pipeline progressed in 2017 with the long-acting DORIA (schizophrenia) and letrozole (breast cancer) having entered Phase III and Phase I clinical-stage development respectively. Our revised valuation is €0.96bn.

Year end

Operating revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/16

265.2

30.3

0.58

0.18

27.8

1.1

12/17

275.6

20.3

0.40

0.12

40.4

0.7

12/18e

293.6

16.4

0.31

0.09

52.1

0.6

12/19e

314.9

27.1

0.52

0.16

31.1

1.0

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Biosimilar enoxaparin key top-line growth driver

ROVI is at a major inflection point. Its internally developed biosimilar enoxaparin (Enoxaparin Becat, EB) is the first to launch into a major European market. ROVI reported €1.5m in EB sales (€1m of which were booked in December alone in Germany). Guidance of €20-30m for 2018 EB sales seems reasonable and acceleration of sales in 2018 and 2019 will depend on growth in Germany and on launching in further European countries; we expect manufacturing capacity constraints to ease from H218 enabling further launches.

Portfolio of drugs growing ahead of the market

Flagship drug Hibor (bemiparin) grew 7% in Spain and 1% internationally. In-licensed products, Volutsa, Neparvis and the hypercholesterolemia and respiratory franchises are also driving prescription drug sales growth (+30.2%, N/A, 16.9% 17.7% respectively in 2017), offsetting mature portfolio declines.

EBITDA margin decline reflects higher R&D

Reported FY17 EBITDA of €30.5m (-22%) was a function of improved gross margin, offsetting lower non-recurring sales items and higher R&D spend on the ISM (in situ micro particle implants) pipeline. Sustainable long-term growth is dependent on successful R&D investment and we would expect a near-term fluctuation in the margin to pave the way to long-term margin expansion from 2020.

Valuation: €0.96bn or €19.1/share

We value ROVI at €0.96bn or €19.1/share versus €0.98bn or €19.6/share previously. We have increased R&D expenses in 2018-22e and lowered 2018e revenues, rolled forward our model and updated the net debt position to €2.5m (at 31 December). Our valuation is underpinned by the sales potential of biosimilar enoxaparin and the base business retaining stable, low single-digit growth rates. A stable dividend with a three-year average 35% payout ratio also adds value.

FY17 revenue growth in line with market growth

ROVI reported operating revenue of €275.6m for FY17 (+ 4%), driven by strong growth in the toll manufacturing business (+8%) and 3% growth in the speciality pharmaceutical business (FY17: €214.3m reported revenues). Highlights include:

The speciality pharmaceutical business consists of recently launched biosimilar enoxaparin (EB), the low molecular weight heparin (Hibor) and more than 30 marketed products across nine core franchises. Hibor sales in Spain grew 7% (FY17: €58.8m) and 1% in international markets (FY17: €25.1m). While Hibor sales accelerated through Q417 and we forecast 4% growth in Hibor in Spain in 2018, the major unknown is if and when competitor Techdow will submit a dossier for its biosimilar enoxaparin (Inhixa). Biosimilar enoxaparin reported fledgling sales of €1.5m despite only being available in Germany since September 2017 (€1m of which were booked in December alone in Germany).

In the portfolio of in-licensed products, Volutsa (benign prostate hyperplasia, in-licensed from Astellas) grew 30.2% to €9.0 in FY17, and Neparvis (heart failure, in-licensed from Novartis and launched in Spain in December 2016) posted €4.7m in FY17. Growth in the respiratory and cholesterol franchises (17.7% and 16.9% respectively in 2017) also helped offset the slowdown in off-patent/mature products.

ROVI expects mid-single digit growth in operating revenues for 2018. This guidance includes €20-30m EB sales, which seems reasonable. Acceleration of EB sales in 2018 and 2019 will depend on growth in Germany (one of the largest enoxaparin markets in Europe by value) and on launching in further countries in Europe.

We have reduced our FY18 operating revenue forecast to €293.6 vs €294.7m. Our forecasts for biosimilar enoxaparin remain unchanged at €26.7m in 2018.

Higher volumes of injectable sales in the toll manufacturing business (+13.2%) and Hibor units positively affected the mix and, as a consequence, ROVI reported a 230bp improvement in gross margin.

Reported EBITDA decreased to €30.5m in FY17 (-22%), leading to a lower EBITDA margin of 11.1% vs 14.8% in 2016. However, in the comparable period in 2016, the P&L benefited from €4.0m in non-recurring revenue (as a result of the creation of a JV between ROVI and Enervit for the distribution of nutritional products in Spain and Portugal). 2017 saw a significant rise in R&D expenses (62%) to €28.3m to support investment in portfolio products Risperidone-ISM and Letrozole ISM, which entered Phase III and Phase I clinical trials respectively. Excluding the R&D expenses in 2017 and 2016 and the impact of the non-recurring revenues in 2016, EBITDA for the ‘ongoing business’ as reported by ROVI increased by 11% to €58.7m (€52.8m in 2016).

Investors should focus on longer-term margin growth prospects

While measuring EBITDA for the ‘ongoing business’ helps to see the profitability (and growth) of the underlying business as it stands currently, fluctuations in R&D and SG&A costs are likely to vary as management looks to maximise return on internal investment by investing in R&D and SG&A as necessary and should be seen as part and parcel of the business. ROVI has given guidance for R&D expenses (October 2017 DORIA presentation) in the region of €32m pa in 2018-19 and $22m in 2020 and 2021 to support clinical trials for Risperidone-ISM and Letrozole ISM.

EB is a product of the R&D invested by ROVI and the ramp-up of enoxaparin sales has longer-term positive implications for gross margin and EBITDA development, mainly through operational leverage. Enoxaparin could be a high-margin product (similar to Hibor) and, although ROVI does not disclose divisional margins, we believe gross margins of around 65-75% for enoxaparin and Hibor are not unreasonable assumptions. Furthermore, after the costs of the initial launch period are met, we do not believe total SG&A for the group will grow in line with sales, given enoxaparin will not require the same level of marketing support as a branded product. In the near term, operating margins will be affected by the increased R&D spend relating to the Phase III risperidone and Phase I letrozole trials. We note that our forecasts peak sales of €76.2m (2025) for Risperidone-ISM are conservative.

We expect operating margins to further decrease in 2018 (from 10.7% in 2016 and 6.9% in 2017) to 4.6% in 2018, mainly due to higher R&D expenses but also to the increase in SG&A to support new product launches. We anticipate margin growth from 2019 to 7.7%, mainly due to operational leverage as we still anticipate c €32m in R&D costs in 2019. We forecast an absolute 1.3% improvement in operating margin from 10.7% in 2016 to 12.0% in 2020; margins should continue to ramp up beyond this period as the operational leverage from enoxaparin sales starts to flow through to the P&L, while R&D levels will decrease to €22m pa in 2020-21.

Enoxaparin Becat commercial strategy

ROVI has set out a clear strategy to launch a biosimilar enoxaparin into key countries in the EU ex Spain. As expected, the first launch in Germany has occurred. As of 31 December 2017, national registration approval has been granted in 13 out of the 26 countries (Germany, France, the UK, Italy, Norway, Sweden, Austria, Hungary, Slovenia, Estonia, Latvia, Slovakia and Bulgaria). The national phase of the decentralised procedure (DCP) in the rest of the 26 countries in the EU (excluding Lithuania) is expected to be completed, with marketing authorisation granted at local country level in 2018. We forecast launch in the UK, Italy and France within 18 months. Launch timings are dependent on capacity coming online; ROVI will have limited initial capacity over the next 12 months as manufacturing lines are gradually approved by the regulators.

ROVI has 20 years of expertise in the low molecular weight heparin (LMWH) market and, apart from Sanofi, no other company has this level of experience in Europe. ROVI’s vertically integrated manufacturing process is a competitive advantage. It owns the IP/registration dossier on its biosimilar enoxaparin, has a full API manufacturing process production, filing and packaging) and has the distribution structure in place. Its vertical integration across the board reduces the cost structure for its biosimilar enoxaparin. ROVI will manufacture the API, and fill and package its biosimilar enoxaparin. ROVI has therefore been investing significant capex (€19.9m in 2017, €18.1m in 2016) to increase capacity in all its plants, including its San Sebastian de los Reyes plant (approved by authorities in Europe) and Julian Camarillo plant (approved by authorities in Europe, the US, Korea, Brazil and Gulf countries) ahead of a potential launch. ROVI acquired the San Sebastian de Los Reyes plant for a €4m investment (in 2015). This investment increases the annual production capacity by 120 million syringes.

ROVI already has a strong presence in the Spanish heparin market (with Hibor) and the launch of biosimilar enoxaparin outside Spain will further substantiate its heparin portfolio. While ROVI expects to continue promoting Hibor in Spain (and Portugal) in the near term (patent expiry in October 2019), there is less visibility beyond that point as the strategy ROVI employs will be dependent on the evolution of the Spanish LMWH market and whether competitors (including Techdow) launch any competing biosimilar enoxaparin, Sanofi’s pricing tactics and whether Hibor’s competitive profile holds.

Forecast €160m peak sales in Europe alone

Ultimately, the factors determining ROVI’s success in each individual market in Europe, the US and the rest of the world will be a function of pricing, the number of new entrants, potential for interchangeability, growth in existing patient demographics and the potential for non-anticoagulant indications. Unit growth drivers include an increasing prevalence of thromboembolic diseases worldwide related to demographics and growing underlying patient numbers (both surgical and medical). Non-anticoagulant indications represent upside.

ROVI will stagger the European launch schedule, partly determined by near-term capacity constraints as mentioned above. We forecast launch in the UK and Italy in 2018 and France in 2019, while we assume launch in Spain in 2020. We have focused on modelling launches in the key European markets in the near term. However, ROVI’s actual launch into each country could vary in timing versus our assumptions. In Europe we assume ROVI will launch its biosimilar enoxaparin at a price discount to Lovenox/Clexane and can achieve a peak penetration of 20%. We assume competitor biosimilars will launch not long after ROVI. We note that Chinese pharmaceutical company, Shenzhen Techdow Pharmaceutical (Techdow), has launched its biosimilar enoxaparin (Inhixa) in Germany and the UK.

ROVI intends to launch the product in emerging markets through partners. Lovenox sales in these markets were €0.5bn in 2017 (source: Sanofi 2017 annual report). We assume a 25% royalty rate on sales in these markets (based on 20% penetration and at a price discount to current Lovenox/Clexane pricing). ROVI would likely receive upfront payments as part of any licensing deal; we have not factored this into our model or valuation. We forecast total peak sales of €160.2m, which include Europe and the international opportunity ex-US. In the US market, ROVI is in advanced discussions with a partner. Once an agreement has been announced, the enoxaparin dossier will need to be resubmitted. Given the lack of visibility on the timing and launch ahead of a partnering agreement, we currently assume no sales for the US opportunity.

Valuation

We revise our valuation of ROVI to €0.96bn or €19.1/share from €0.98bn or €19.6/share previously. The main changes to our forecasts are increased R&D expenses in 2018-19 to €32m pa and to $22m in 2020 and 2021 to support clinical trials for Risperidone-ISM and Letrozole ISM, which entered Phase III and Phase I trials respectively in 2017. While our 2018 forecast for biosimilar enoxaparin remains unchanged at €26.6m, we have tweaked sales assumptions for the prescription drug pharmaceuticals portfolio.

We roll forward our DCF model in time and update for net debt of €2.5m at 31 December. We use a three-stage DCF valuation; we utilise our sales and P&L model out to 2026, from 2027 to 2030 we apply a transition growth rate (reflecting that the company is growing at a high rate during our forecast period) and, finally, we apply a 2.0% terminal growth rate (terminal value represents 60% of our total ROVI valuation). Our standard discount rate assumption for companies with approved products and minimal development risk is 10%. We use a 15% tax rate from 2030. The current tax rate is c 8%, but over time this is expected to normalise to a mid-teens percentage.

Exhibit 1: Three-stage DCF valuation

(€m)

Sum of DCF for forecast period to 2025

318

Sum of DCF for growth 2026 to 2030 (transition period)

166

Terminal value

474

Enterprise value

958

Net cash/(debt) at 31 December 2017

(2.5)

Value of equity

955.3

Value per share

€19.1

Discount rate

10%

Terminal growth rate

2.0%

Number of shares outstanding (m)

50

Sum of DCF for forecast period to 2025

Sum of DCF for growth 2026 to 2030 (transition period)

Terminal value

Enterprise value

Net cash/(debt) at 31 December 2017

Value of equity

Value per share

Discount rate

Terminal growth rate

Number of shares outstanding (m)

(€m)

318

166

474

958

(2.5)

955.3

€19.1

10%

2.0%

50

Source: Edison Investment Research

For biosimilar enoxaparin in Europe and international (ex-US) markets, our peak sales forecasts include in-market sales in the four major countries (the UK, Germany, France and Italy), initially with a launch in Spain in 2020 after Hibor’s patent expires in October 2019. We model a decline in Hibor sales post patent expiration. We also include a modest revenue growth contribution from in-licensed products and the toll manufacturing business (growing by 2% a year) until 2020. Our peak sales estimate for Risperidone-ISM is €76.2m. We assume launch in 2021 in Europe. Our sales forecasts are risk-adjusted (we assume 90% probability of success given its Phase III status and position as a new formulation of a widely available drug). Our Risperidone-ISM peak sales are conservative and have yet to be updated post the DORIA presentation.

Exhibit 2: Total pharmaceutical revenue including key franchises

Source: Edison Investment Research

Valuation sensitivity to biosimilar enoxaparin

As described in our initiation report, Ace of Spain, the potential market for biosimilar enoxaparin is significant in Europe and in international markets (ex-US), with our peak sales forecasts based on assumed penetration rates that we believe are achievable. How the market transpires will depend on the number of new entrants, pricing and underlying volume growth. Unit growth in the LMWH market is increasing, and use in other non-anticoagulant indications could drive upside to our forecasts. However, more than three or four other biosimilar entrants could put pressure on pricing in the market and thus on our 20% peak penetration assumptions. We note that, all other things being equal, a 5% increase or decrease in peak market share (equivalent to €30m in peak sales) and the trajectories required to reach that, would generates a c €3/share increase or decrease in our valuation, respectively.

Financials

ROVI reported 4% growth in operating revenue to €275.6m in 2017 (vs 8% to €265.2m in 2016, aided by strong growth in the toll manufacturing business. The prescription-based pharmaceutical products business posted 3% growth in sales in 2017. Total revenue (which includes recognition of government grants on non-financial assets at €1.8.m) was reported at €277.4m in 2017 (vs €266.7m in 2016).

For FY18, ROVI has guided to mid-single digit revenue growth in operating revenue, which includes a €20-30m contribution from EB. We forecast 6.5% growth in operating revenues in 2018 to €293.6m, and our forecast includes a €26.7m contribution for biosimilar enoxaparin. For 2019 and 2020 we forecast operating revenues of €314.9m and €335.0m, respectively. We expect both years to benefit from the ongoing enoxaparin roll out and growth in the newer in-licensed portfolio to offset loss of sales in off-patent products. We forecast Hibor growth to 2018 but a decline in sales from 2019, following increased competition from enoxaparin biosimilars and lower-priced Lovenox.

We forecast 2018 operating profit of €13.6m, translating to a large dip in operating margin to 4.6%, as we expect operating costs in 2018 to be affected by higher R&D costs relating to the ISM portfolio and enoxaparin-related launch costs (we increase R&D expense from €26m to €32m and SG&A from €109mn to €116mn). Gross margins increased (60.7% in 2017 vs 58.3% in 2016). Given the product mix of the business, we would expect some volatility at the gross margin level from year to year (the proprietary heparins are higher-margin than in-licensed products). However, as enoxaparin sales ramp up and account for a higher proportion of overall sales, this should translate to a steady growth in gross margins, with the caveat being pricing. In the longer term we expect operational leverage from the fully vertically integrated LMWH manufacturing and distribution business to aid margin expansion.

We expect operating margins to further decrease in 2018 (from 10.7% in 2016 and 6.9% in 2017) to 4.6% in 2018, mainly due to higher R&D expenses but also to the small increase in SG&A to support new product launches. We anticipate margin growth from 2019 to 7.7% mainly due to operational leverage as we still anticipate c €32m in R&D costs in 2019. We forecast an absolute 1.3% improvement in operating margin from 10.7% in 2016 to 12.0% in 2020; margins should continue to ramp up beyond this period as the operational leverage from enoxaparin sales starts to flow through to the P&L, while R&D levels will decrease to €22m pa in 2020-21.

The effective tax rate of 1.6% in FY17 (6.4% in 2016) reflects the deduction of existing R&D expenses and the capitalisation of tax losses from Frosst Ibérica (as of 31 December 2017, Frosst Ibérica tax losses amounted to €35.1m, of which €1.5m was used to offset 2017 income tax liability). ROVI expects to maintain a mid-single digit effective tax rate for the foreseeable future.

Over the last few years ROVI has been investing heavily in manufacturing capex ahead of its enoxaparin launch and also to increase capacity at its three manufacturing plants. Of the €19.9m capex spent in 2017 (€18.1m in 2016), c 34% related to maintenance capex.

ROVI maintains a low leveraged capital structure. At 31 December 2017 ROVI’s debt position of €43.2m consisted of €30.9m in bank borrowings (long-term debt) and €12.3m in government debt (at 0% interest). At 31 December 2017 ROVI’s net debt was €2.5m (we do not include financial assets available for sale in our calculation of net debt).

In December 2017 ROVI announced a loan of up to €45m from the European Investment Bank (EIB). This funding is to support ROVI’s investments in research, development and innovation (R&D&i), which concentrate on technologies for the administration and prolonged release of drugs. ROVI can access the €45m during a period of 24 months starting from the contract date. However, it should be noted that ROVI has no commitment to draw down the loan. The EIB loan has a maturity date of 2029, there is a three-year grace period under the terms and conditions, and financial conditions (ie applicable interest rates, repayment periods, etc.) are favourable to ROVI (exact terms are undisclosed). We have not included the €45m in our forecasts as we have no certainty on whether some or all of it will be withdrawn, or on the timing.

Exhibit 3: Financial summary

Accounts: IFRS, Year-end: December, €m

 

2014

2015

2016

2017

2018e

2019e

PROFIT & LOSS

Hibor revenue

 

72.7

75.1

79.7

83.9

86.3

82.6

Enoxaparin revenue

 

0.0

0.0

0.0

1.5

26.7

44.5

Other (Pharma & Manufacturing)

 

165.4

170.9

185.5

190.3

180.7

187.8

Operating revenues

 

238.0

246.0

265.2

275.6

293.6

314.9

Cost of sales

 

(94.6)

(97.1)

(112.0)

(110.2)

(120.4)

(127.5)

Gross profit

 

143.5

148.9

153.1

165.5

173.2

187.4

Gross margin %

 

60.3%

60.5%

57.8%

60.0%

59.0%

59.5%

SG&A (expenses)

 

(97.8)

(101.7)

(101.9)

(108.5)

(116.6)

(119.7)

R&D costs

 

(12.0)

(16.5)

(17.5)

(28.3)

(32.0)

(32.0)

Other income/(expense)

 

2.9

1.0

5.6

1.8

1.8

1.8

EBITDA (reported)

 

36.6

31.8

39.3

30.5

26.4

37.5

Depreciation and amortisation

 

(8.9)

(10.0)

(11.0)

(11.5)

(12.8)

(13.5)

Normalised Operating Income

 

29.2

23.8

30.7

21.8

17.1

27.4

Reported Operating Income

 

27.7

21.8

28.3

19.0

13.6

24.0

Operating Margin %

 

11.6%

8.9%

10.7%

6.9%

4.6%

7.6%

Finance income/(expense)

 

(2.1)

(0.9)

(0.5)

(0.9)

(0.7)

(0.3)

Exceptionals and adjustments

 

0.0

0.0

0.0

0.0

0.0

0.0

Normalised PBT

 

27.1

22.9

30.3

20.3

16.4

27.1

Reported PBT

 

25.6

20.9

27.9

17.5

12.9

23.6

Income tax expense (includes exceptionals)

 

(1.5)

(1.1)

(1.8)

(0.3)

(0.7)

(1.2)

Normalised net income

 

25.6

21.8

28.5

20.0

15.7

25.9

Reported net income

 

24.1

19.8

26.1

17.2

12.3

22.4

Basic average number of shares, m

 

49.8

49.5

49.0

50.0

50.0

50.0

Basic EPS (€)

 

0.48

0.40

0.53

0.34

0.25

0.45

Normalised EPS (€)

 

0.51

0.44

0.58

0.40

0.31

0.52

Dividend per share (€)

 

0.17

0.14

0.18

0.12

0.09

0.16

 

 

 

 

 

 

 

 

BALANCE SHEET

 

Property, plant and equipment

 

73.6

81.8

82.8

89.1

95.6

102.6

Goodwill

 

0.0

0.0

0.0

0.0

0.0

0.0

Intangible assets

 

17.2

18.9

24.9

27.1

27.1

23.7

Other non-current assets

 

8.5

9.1

13.1

14.1

14.1

14.1

Total non-current assets

 

99.3

109.8

120.8

130.2

136.8

140.3

Cash and equivalents

 

26.7

29.3

41.4

40.7

35.9

39.8

Inventories

 

67.6

63.9

67.4

75.5

69.3

69.9

Trade and other receivables

 

63.7

57.0

53.8

49.7

56.3

56.1

Other current assets

 

4.1

3.9

4.5

2.2

2.2

2.2

Total current assets

 

162.0

154.1

167.1

168.2

163.7

168.0

Non-current loans and borrowings

 

32.0

32.6

20.8

27.0

22.4

20.7

Other non-current liabilities

 

8.7

7.2

7.2

6.4

5.9

5.3

Total non-current liabilities

 

40.7

39.8

28.0

33.5

28.2

26.0

Trade and other payables

 

55.0

45.7

59.9

52.9

63.9

62.3

Current loans and borrowings

 

4.3

10.1

13.0

16.2

4.7

1.6

Other current liabilities

 

2.8

3.3

3.6

4.1

4.1

4.1

Total current liabilities

 

62.1

59.2

76.4

73.2

72.6

68.0

Equity attributable to company

 

158.5

164.8

183.4

191.7

199.7

214.2

 

 

 

 

 

 

 

 

CASH FLOW STATEMENT

 

Profit before tax

 

25.6

20.9

27.9

17.5

12.9

23.6

Depreciation and amortisation

 

8.9

10.0

11.0

11.5

12.8

13.5

Share based payments

 

0.0

0.0

0.0

0.0

0.0

0.0

Other adjustments

 

2.5

(1.1)

(2.7)

(1.2)

0.7

0.3

Movements in working capital

 

(7.4)

2.3

12.7

(9.8)

10.0

(2.5)

Interest paid / received

 

(2.7)

(0.6)

0.0

0.0

(1.1)

(0.7)

Income taxes paid

 

(3.9)

(2.0)

(3.4)

0.1

(0.7)

(1.2)

Cash from operations (CFO)

 

23.0

29.4

45.5

18.0

34.7

33.0

Capex

 

(25.1)

(19.9)

(18.1)

(19.9)

(19.4)

(17.1)

Acquisitions & disposals net

 

0.0

0.0

0.0

0.0

0.0

0.0

Other investing activities

 

16.6

0.6

1.7

0.7

0.4

0.4

Cash used in investing activities (CFIA)

 

(8.5)

(19.3)

(16.3)

(19.2)

(19.0)

(16.7)

Net proceeds from issue of shares

 

(2.0)

(5.1)

(0.5)

0.5

0.0

0.0

Movements in debt

 

2.7

5.9

(9.7)

9.0

(16.2)

(4.7)

Other financing activities

 

(8.0)

(8.3)

(6.9)

(9.0)

(4.3)

(7.9)

Cash from financing activities (CFF)

 

(7.3)

(7.6)

(17.1)

0.5

(20.5)

(12.5)

Cash and equivalents at beginning of period

 

19.4

26.7

29.3

41.4

40.7

35.9

Increase/(decrease) in cash and equivalents

 

7.3

2.6

12.1

(0.7)

(4.8)

3.8

Cash and equivalents at end of period

 

26.7

29.3

41.4

40.7

35.9

39.8

Net (debt) cash

 

(9.6)

(13.5)

7.6

(2.5)

8.9

17.4

Source: Company accounts, Edison Investment research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Lbos Farmacéuticos ROVI and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Limited (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Lbos Farmacéuticos ROVI and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Limited (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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