2014 Inter Interim Financ Financial Rep Report. For the six months period ending 30 J

Transcription

1 Inter Interim Financ Financial Rep Report For the six months period ending 30 J For the six months period ended 30 June 2014

2 Contents Management statement 2 Business review of the first half of Business performance at a glance 3 - Main events in the first half of Main risks and uncertainties 4 Consolidated income statement 5 Consolidated statement of comprehensive income 6 Consolidated balance sheet 7 Consolidated statement of changes in equity 8 Condensed consolidated cash flow statement 9 Selected notes 10 General information 10 Summary of significant accounting policies 10 Segment reporting 14 Other notes Income tax Contingencies Business combinations Related parties Significant events after balance sheet date Definitions 17 Review report of the statutory auditor 18 Omega Pharma 1H2013 Interim Financial Report - p. 1/18

3 Management statement The undersigned hereby declare that, to the best of their knowledge, the interim financial statements for the six-months period ended June 30, 2014, which have been prepared in accordance with the IAS 34 Interim Financial Reporting as adopted by the European Union, give a true and fair view of the equity, the financial situation and the results of Omega Pharma NV and the companies that are included in the consolidation scope. The undersigned also declare that, to the best of their knowledge, the interim financial report provides a true and fair review of the important events that have occurred during the first six months of the financial year and of the other legally required information. In the name and for the account of the Board of Directors Marc Coucke, CEO Barbara De Saedeleer, CFO 29 July 2014 Omega Pharma 1H2014 Interim Financial Report - p. 2/18

4 Business Review of the First Half of 2014 Highlights Turnover grew by 6% compared to the first six months of last year, benefitting from the good results of the Top 20 brands (increase of 8%). Double digit sales growth in France, Belgium, Germany and UK. As a consequence of the strong euro, the currency conversion impact mounted to -5.2 million versus last year. Gross margin grew by 9% from 54% on net sales to 55% as the result of an improved product mix. EBITDA* and operating profit improved to respectively 23% and 20% of net sales (last year 20% and 13%). Results show that the restructuring of the last years turned around the business and start to pay off. Net Debt** ends at million, corresponding to 2.35 times annualized EBITDA* and remaining safely within the bank covenants. Change in Net Debt** amounts to 96.5 million. Key financial figures Key financial figures for the First Half 2014 (in EUR million) 1H2014 1H2013 Year on Year Evolution Consolidated turnover % Gross Margin % EBITDA* % Operating Profit % * EBITDA: operating result before non-recurring items, increased with depreciations and amortization. ** Definitions used as applicable in the bank covenants. Omega Pharma 1H2014 Interim Financial Report - p. 3/18

5 Main events in the first half of 2014 There were no main events in the first half of Main risks and uncertainties The Group s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The interim financial report does not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the consolidated annual financial statements for the year ended December 31, 2013 of the Group. During the first semester of 2014 there have been no significant changes in the risk profile of the Group nor is the risk profile of the group expected to change in the second semester of Omega Pharma 1H2014 Interim Financial Report - p. 4/18

6 Consolidated income statement (in thousand) January-June 2014 % of Net Sales January- June 2013 % of Net Sales Net Sales % % +6% Cost of goods sold % % +4% Gross Margin % % +9% Distribution expenses % % -4% Sales and Marketing expenses % % +1% General Administrative expenses % % -2% Other operating income/expense, net % % -187% Non recurring result % % +175% Operating Profit % % +60% Finance income % 846 0% +184% Finance cost % % +3% Net Finance cost % % +3% Result before income tax % % +87% Income tax expense % % +79% Result after income tax % % +88% YoY evolution Of which attributable to the shareholders of the parent company Of which attributable to non-controlling interests Omega Pharma 1H2014 Interim Financial Report - p. 5/18

7 Consolidated statement of comprehensive income (in thousand) Fair value and other reserves Cumulative translation adjustments Retained earnings Attributable to the shareholders of the parent company Attributable to noncontrolling Interests Total equity Profit for the period Fair value gains/(losses) on cash flow hedges Fair value gains/(losses) on cash flow hedges - Tax effect Currency translation adjustments Total recognized income for the period ended 30 June (in thousand) Fair value and other reserves Cumulative translation adjustments Retained earnings Attributable to the shareholders of the parent company Attributable to noncontrolling Interests Total equity Profit for the period Fair value gains/(losses) on cash flow hedges Fair value gains/(losses) on cash flow hedges - Tax effect Currency translation adjustments Total recognized income for the period ended 30 June Omega Pharma 1H2014 Interim Financial Report - p. 6/18

8 Consolidated balance sheet (in thousand) 30 June December 2013 Non-current assets Intangible assets Of which Consolidation goodwill Property, plant and equipment Financial assets Deferred income tax assets Other non-current assets Current assets Inventories Trade receivables Other current assets Of which Income tax assets Cash and cash equivalents TOTAL ASSETS EQUITY Share capital and share premium Retained earnings Treasury shares Fair value and other reserves Cumulative translation adjustments Equity attributable to the shareholders of the parent company Equity attributable to non-controlling interests LIABILITIES Non-current liabilities Provisions Pension obligations Deferred income tax liabilities Retail Bond Borrowings (non-current financial liabilities) Other non-current liabilities Derivative financial instruments Current liabilities Borrowings (current financial liabilities) Trade payables Taxes, remuneration and social security Other current payables Derivative financial instruments TOTAL EQUITY AND LIABILITIES Omega Pharma 1H2014 Interim Financial Report - p. 7/18

9 Consolidated statement of changes in equity (in thousand) Number of shares Share capital and share premium Treasury shares Fair value & other reserve s Cumulativ e translation adjustment s Retained earnings Attributable to Shareholders of parent company Attributable to noncontrolling interests Total equity Balance at 31 December 2012 Total comprehensive income for the period ended 30 June Capital increases Non-controlling interests Balance at 30 June Balance at 31 December 2013 Total comprehensive income for the period ended 30 June Capital increases Non-controlling interests Balance at 30 June Omega Pharma 1H2014 Interim Financial Report - p. 8/18

10 Condensed consolidated cash flow statement (in thousand) January-June 2014 January-June 2013 Profit before income tax Taxes paid Adjustments for operational non-cash items Adjustments for interests and financial non-cash items Gross cash flow from operating activities Changes in working capital Total cash flow from operating activities Capital expenditure Disposals of investment goods Proceeds from divestments in existing and former holdings Cash and cash equivalents from acquisitions Investments in existing shareholdings (post payments) and in new holdings Dividends received 0 0 Total cash flow from investing activities Proceeds from the issue of share capital 0 0 Purchases of own shares 0 0 Dividend distribution -3-8 Change in debts Interests received (paid) Total cash flow from financing activities Net increase/decrease of cash flows for the period Cash and cash equivalents start of the period Gains or losses on currency exchange on liquid assets Cash and cash equivalents end of the period Total net cash flow of the period Omega Pharma 1H2014 Interim Financial Report - p. 9/18

11 Selected notes General information Omega Pharma NV (the Company ) and its subsidiaries (together the Group ) are vendors of highadded-value products and services to pharmacies and other medical sectors. The Group has activities in close to 40 countries. The Company is a limited liability company, making a public appeal on savings. The Company is incorporated and domiciled in Belgium, having its registered office at Venecoweg 26, 9810 Nazareth, with company number BE The Company s shares were listed on the regulated market Euronext Brussels until 3 February The condensed consolidated interim financial statements for the six months period ended 30 June 2014 have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union. This document should be read together with the consolidated annual accounts for the period 2013 (including the significant accounting policies) as published in the 2013 annual report, which is available on (Investor Relations section). These condensed consolidated interim financial statements have been approved for publication by the Board of Directors of July 29, They have been submitted to a limited review by the Statutory Auditor (cf. page 17). Summary of significant accounting policies The principal accounting policies applied in preparation of these consolidated interim financial report are identical to those applied in preparation of the consolidated financial statements for the year ended on December 31, A summary of the principal accounting policies can be found in Note 2 to the consolidated financial statements as included in the 2013 annual report, which can be consulted and downloaded via the following web link: Omega Pharma 1H2014 Interim Financial Report - p. 10/18

12 The following new standards, amendments to standards and interpretations are mandatory for the first time for the financial year beginning 1 January 2014: IAS 27 Revised Separate financial statements, effective for annual periods beginning on or after 1 January The revised standard includes the provisions on separate financial statements that are left after the control provisions of IAS 27 have been included in the new IFRS 10. IAS 28 Revised Investments in associates and joint ventures, effective for annual periods beginning on or after 1 January The revised standard now includes the requirements for joint ventures, as well as associates, to be equity accounted following the issue of IFRS 11. IFRS 10 Consolidated financial statements, effective for annual periods beginning on or after 1 January The new standard builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements. IFRS 11 Joint arrangements, effective for annual periods beginning on or after 1 January The new standard focuses on the rights and obligations rather than the legal form. Proportional consolidation is no longer allowed. IFRS 12 Disclosure of interests in other entities, effective for annual periods beginning on or after 1 January This is a new standard on disclosure requirements for all forms of interests in other entities. Amendments to IFRS 10 Consolidated financial statements, IFRS 11 Joint arrangements and IFRS 12 Disclosure of interests in other entities. The amendments clarify the transition guidance in IFRS 10, and provide additional transition relief (for example by limiting the requirement to provide adjusted comparative information to only the preceding comparative period or, for disclosures related to unconsolidated structured entities, removing the requirement to present comparative information for periods before IFRS 12 is first applied). These amendments will be effective for annual periods beginning on or after 1 January 2014 which is aligned with the effective date of IFRS 10, 11 and 12. Amendments to IAS 32 Offsetting financial assets and financial liabilities, effective for annual periods beginning on or after 1 January The amendments clarify some of the requirements for offsetting financial assets and financial liabilities on the statement of financial position. Amendments to IAS 36 Impairment of assets, effective for annual periods beginning on or after 1 January The IASB made consequential amendments to the disclosure requirements of IAS 36 when it issued IFRS 13. One of the amendments was drafted more widely than intended. This limited scope amendment corrects this and introduces additional disclosures about fair value measurements when there has been impairment or a reversal of impairment. Omega Pharma 1H2014 Interim Financial Report - p. 11/18

13 Amendments to IAS 39 Financial instruments: Recognition and measurement, effective for annual periods beginning on or after 1 January These amendments provide relief from discontinuing hedge accounting when novation of a derivative designated as a hedging instrument meets certain criteria. Similar relief will be included in IFRS 9 Financial instruments. Amendments to IFRS 10 Consolidated financial statements, IFRS 12 Disclosure of interests in other entities and IAS 27 Separate financial statements for investment entities. Effective for annual periods beginning on or after 1 January The amendments give an exemption to entities that meet an investment entity definition and which display certain characteristics to account for its subsidiaries at fair value. The following new standards, amendments to standards and interpretations have been issued and have been endorsed by the European Union, but are not mandatory for the first time for the financial year beginning 1 January 2014: IFRIC 21 Levies, effective for annual periods beginning on or after 17 June IFRIC 21 sets out the accounting for a liability to pay a levy if that liability is within the scope of IAS 37. It also addresses the accounting for a liability to pay a levy whose timing and amount is certain. The following new standards and amendments to standards have been issued, but are not mandatory for the first time for the financial year beginning 1 January 2014 and have not been endorsed by the European Union: IFRS 9 Financial instruments, effective for annual periods beginning on or after 1 January The standard addresses the classification, measurement and derecognition of financial assets and financial liabilities. IFRS 14 Regulatory deferral accounts, effective for annual periods beginning on or after 1 January It concerns an interim standard on the accounting for certain balances that arise from rate regulated activities. IFRS 14 is only applicable to entities that apply IFRS 1 as first-time adopters of IFRS. It permits such entities, on adoption of IFRS, to continue to apply their previous GAAP accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral accounts. The interim standard also provides guidance on selecting and changing accounting policies (on first time adoption or subsequently) and on presentation and disclosure. Amendment to IAS 19 Defined benefit plans, effective for annual periods beginning on or after 1 July The amendment seeks clarification for the accounting of employee contributions set out in the formal terms of a defined benefit plan. Omega Pharma 1H2014 Interim Financial Report - p. 12/18

14 Amendment to IFRS 9 financial instruments on general hedge accounting, effective for annual periods beginning on or after 1 January The amendment incorporates the new general hedge accounting model which will allow reporters to reflect risk management activities in the financial statements more closely as it provides more opportunities to apply hedge accounting. These amendments also impact IAS 39 and introduce new disclosure requirements for hedge accounting, thereby impacting IFRS 7, irrespective of the fact whether hedge accounting requirements under IFRS 9 or IAS 39 are used. Amendment to IFRS 11 'Joint arrangements' on acquisition of an interest in a joint operation, effective for annual periods beginning on or after 1 January This amendment adds new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business. The amendments specify the appropriate accounting treatment for such acquisitions. Amendment to IAS 16 'Property, plant and equipment' and IAS 38 'Intangible assets' on depreciation and amortisation, effective for annual periods beginning on or after 1 January In this amendment the IASB has clarified that the use of revenue-based methods to calculate the depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset. The IASB has also clarified that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset. IFRS 15 Revenue from contracts with customers. The IASB and FASB have jointly issued a converged standard on the recognition of revenue from contracts with customers. The standard will improve the financial reporting of revenue and improve comparability of the top line in financial statements globally. Companies using IFRS will be required to apply the revenue standard for annual periods beginning on or after 1 January 2017, subject to EU endorsement. Omega Pharma 1H2014 Interim Financial Report - p. 13/18

15 Segment reporting During the first half of 2014, the segment reporting has not changed compared to the first six months ended 30 June The segment results for the period ended June 30, 2013 are as follows: (in thousand) Total turnover Inter-segment turnover Net turnover Operating result of the segment Western Europe Belgium France Emerging Markets Not allocated Total Omega Pharma Net Finance cost Result before income tax The segment results for the period ended June 30, 2014 are as follows: (in thousand) Total turnover Inter-segment turnover Net turnover Operating result of the segment Western Europe Belgium France Emerging Markets Not allocated Total Omega Pharma Net Finance cost Result before income tax Omega Pharma 1H2014 Interim Financial Report - p. 14/18

16 Other notes 1. Income tax The amount of the income taxes is a management estimate and is based on an expected average effective tax rate of 17.6% for the entire accounting period Contingencies During the first six months of 2014 no material changes occurred to the situation as described in Note 7.1 of the 2013 annual report. 3. Business combinations During the first half 2014, Omega Pharma acquired a number of companies: Ymea BV, a Dutch company and owner of the Ymea brand A few small companies with minor impact on the balance sheet (below materiality level). All transactions are accounted for as business combinations. In conformity with IFRS 3, the purchase price allocation and the goodwill calculation were done on a preliminary basis and may still be modified within twelve months following the acquisition date. Omega Pharma 1H2014 Interim Financial Report - p. 15/18

17 Ymea Others 1H2014 (in thousand) Book value Fair value adjustments Book value Book value Fair value adjustments Fair value Book value Fair value adjustm ents Fair value Non-current assets Intangible assets Property, plant and equipment Other non-current assets Deferred tax assets Current assets Cash and cash equivalents Other current assets Non-current liabilities Deferred tax liabilities Other non-current liabilities Current liabilities Net assets acquired Goodwill Total consideration Related parties Related parties refer to the members of the Executive Committee and the non-executive members of the Board of Directors. The remuneration of the members of the Executive Committee and the non-executive members of the Board of Directors is determined on an annual basis, for which reason no further details are included in this interim financial report. Omega Pharma 1H2014 Interim Financial Report - p. 16/18

18 5. Significant events after balance sheet date There were no significant events after balance sheet date. 6. Definitions EBITDA is defined as earnings before net finance cost, income taxes, depreciations and amortization have been deducted. This non-gaap measure has been included in the financial statements since management believes that it is widely used by certain investors, securities analysts and other interested parties as supplemental measure of performance and liquidity. For the same reason as stated above for EBITDA, management has disclosed non-recurring expenses. Non-recurring expenses are defined as those items that are considered by management to be non-recurring or unusual because of their nature. The non-recurring expenses relate to: Acquisition costs; Restructuring costs; Factory or site closure costs; Business restructuring costs. Omega Pharma 1H2014 Interim Financial Report - p. 17/18

19 Review report of the statutory auditor Report of the statutory auditor on the review of the consolidated condensed interim financial statements of Omega Pharma NV for the period ended 30 June 2014 Introduction We have reviewed the accompanying condensed consolidated interim financial statements of Omega Pharma NV ( the Company ) and its subsidiaries (jointly the Group ), as of and for the six-month period ended 30 June 2013, consisting of the interim consolidated balance sheet, the related consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and condensed consolidated cash flow statement for the six month period then ended, as well as the selected explanatory notes, with a balance sheet total of KEUR 2,195,551 and a profit for the period, attributable to the shareholders of the Group, of KEUR 88,258. The board of directors is responsible for the preparation and fair presentation of these consolidated condensed interim financial statements in accordance with IAS 34 as adopted by the European Union. Our responsibility is to express a conclusion on these consolidated interim financial statements based on our review. Scope of the review We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated condensed financial statements is not prepared, in all material respects, in accordance with IAS 34, as adopted by the European Union. Ghent, 31 July 2014 PwC Bedrijfsrevisoren BCVBA Represented by Peter Opsomer* Bedrijfsrevisor *Peter Opsomer BVBA Represented by Peter Opsomer Omega Pharma 1H2014 Interim Financial Report - p. 18/18

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