Ipsen delivers strong results for the first half of 2018 with sales growth of 21.5% and upgrades its guidance for full year 2018

Sales growth of 26.7%1 for Specialty Care and 2.0%1,2 for Consumer Healthcare
Core Operating Income growth of 34.1%
Upgraded full year 2018 guidance of Group sales growth greater than 19.0%1 (versus prior guidance greater than 16.0%) and Core operating margin of around 29.0% of sales (versus prior guidance greater than 28.0%)

Paris (France), 26 July 2018 – Ipsen (Euronext: IPN; ADR: IPSEY), a global specialty-driven biopharmaceutical group, today announced financial results for the first half of 2018.

David Meek, Chief Executive Officer of Ipsen, stated: “We executed very well against our objectives in the first half of 2018. We delivered outstanding Group sales growth of 21.5% and significant core operating margin improvement, leading to upgraded guidance for the full year 2018. We also continued to increase the value proposition of Cabometyx® with approval for first-line renal cell cancer by the European Commission and the validation of the regulatory submission for second-line hepatocellular carcinoma by the EMA. In the second half of the year, we remain focused on maintaining the growth momentum of our Oncology and Neuroscience franchises and reinforcing our R&D strategy to build an innovative and sustainable pipeline.”

Upgraded Full Year 2018 guidance
Following the strong performance in the first half of 2018, the Group raises its financial targets for the full year 2018:

Group sales growth of greater than +19.0%, based on the strong momentum of the Specialty Care business. Sales growth at current exchange rates should still be negatively impacted by approximately 4.0% based on the current level of exchange rates;
Core operating margin of around 29.0% of sales

Review of the first half 2018 results
Note: Unless stated otherwise, all variations year-on-year in sales are stated excluding foreign exchange impacts.
Group sales reached €1,064.5 million, up 21.5% year-on-year.
Specialty Care sales reached €920.2 million, up 26.7%, driven by the strong growth of Somatuline® (26.1% with a continued volume growth in North America and a solid performance throughout Europe), the contribution of new products Cabometyx® and Onivyde®, as well as the good performance of Dysport® (13.0% fueled by our partner Galderma in the aesthetics market in Europe, and a strong growth in Brazil and in the U.S. therapeutics market) and Decapeptyl® (8.9% impacted by good volume growth, notably in France, Spain and Algeria).
Consumer Healthcare sales reached €144.3 million, up 2.0%2, driven by the good performance of the Smecta® brand, which grew by 3.6%.
Core Operating Income was €322.5 million, up 34.1%, driven by the strong Specialty Care sales growth and reflecting increased commercial investments for the Oncology product launches and R&D investments to support the advancement of the pipeline.
Core operating margin reached 30.3% of sales, up 4.1 points.
Core consolidated net profit was €237.1 million, compared to €169.2 million in 2017, up 40.1%, after higher financial and income tax expenses and benefitting from a lower effective tax rate due to the U.S. tax reform.
Core earning per share fully diluted grew by 40.2% to reach €2.86, compared to €2.04 in 2017.

IFRS Operating income was €269.7 million after amortization of intangible assets, the costs of relocation of the U.S. commercial affiliate to Cambridge, Massachusetts and the termination of certain R&D studies. Operating income margin at 25.3% is up 6.2 points compared to the first half of 2017.
IFRS Consolidated net profit was €197.3 million versus €125.9 million in 2017, up 56.7% after financial and income tax expenses.
IFRS Fully diluted EPS (Earning per share) was €2.38 versus €1.52 in 2017, up 56.6%.
Free cash flow reached €164.5 million, up by €69.5 million or 73.3% versus 2017, from higher operating cash flow, lower restructuring costs and higher income tax.
Closing net debt reached €438.0 million at the end of June 2018, versus €669.4 million at the end of June 2017, reflecting positive cash flow generation of the Group over the last twelve months and after payment in June 2018 of €83.0 million in dividends.

The interim financial report, with regard to regulated information, is available on the Group’s website, old.ipsen.comunder the Regulated Information tab in the Investor Relations section.

The company’s auditors performed a limited review of the accounts.

Conference call
Ipsen will hold a conference call Thursday, 26 July 2018 at 1:30 p.m. (Paris time, GMT+1). Participants should dial in to the call approximately five to ten minutes prior to its start. No reservation is required to participate in the conference call.
Standard International: +44 (0) 1452 555 566
France and continental Europe: + 33 (0) 1 76 74 24 28
UK: +44 (0) 8444 933 800
United States: 1-631-510-7498
Conference ID: 2791758
A recording will be available for seven days on Ipsen’s website.

[1] Year-on-year growth excluding foreign exchange impacts
[2] Reported sales in Consumer Healthcare down 3.9%, non-restated from the new contractual set-up of Etiasa®
[3] Excludes amortization of intangible assets (excluding software), gain or loss on disposal of fixed assets, restructuring costs, impairment losses and
other non-core items
[4] Cash and cash equivalents, less bank overdrafts, bank loans and other financial liabilities and excluding financial derivative instruments

Attachment

HY-2018-Results-announcement