Faulding -- Full Year Announcement.Business Editors Year Ended 30 June 2001 Consolidated Group Results ADELAIDE, South Australia--(BUSINESS WIRE)--Aug. 7, 2001 Faulding - A 17.5% increase in sales revenue to $2.734 billion. - A 21.1% increase in earnings before interest and tax (EBIT) to $171.9 million. - An increase of 35.4% in net profit after tax (NPAT) to $106.0 million. Adjusting for significant one off expense and revenue items results in an NPAT of $98.4 million, an increase of 25.7%. - A 33.8% increase in earnings per share from 48.8(cent)to 65.3(cent)per share. - A 12.2% increase in research and development expenditure to $77.8 million. - A partially franked (65%) final dividend of 16(cent)has been declared (June 2000 - 12(cent)), taking the full year dividend to 28(cent), an increase of 5(cent). - A 22.1% increase in return on average equity to 14.9%. Divisional Highlights - The Pharmaceuticals division has had a particularly strong year, especially in the Americas and Asia Pacific regions. Total divisional EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). increased by 29.8% to $118.5 million from $91.3 million in 2000. The Purepac oral pharmaceutical business again performed well ahead of expectations and the previous year, while two new products achieved record launch sales in Australia. - Healthcare recorded an 11.6% increase in EBIT to $77.7 million, a solid performance in a competitive trading environment and in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite dampened demand for nutraceutical nu·tra·ceu·ti·cal n. A food or naturally occurring food supplement thought to have a beneficial effect on human health. nutraceutical products in Australia.
Results by Business Unit
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Profit and Loss Sales Revenue EBIT
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$m $m
------------------ % -------------------- %
June 01 June 00 Change June 01 June 00(aa) Change
------------------ ------ -------------------- ------
Healthcare
Services 1,800.6 1,617.1 11.3 49.4 44.2 11.8
Consumer 209.7 202.5 3.6 28.3 25.4 11.4
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Total
Healthcare 2,010.3 1,819.6 10.5 77.7 69.6 11.6
Pharmaceuticals
Asia Pacific 135.3 106.3 27.3 23.5 8.5 176.5
Americas 450.9 285.0 58.2 55.1 45.0 22.4
EMEA 137.1 114.9 19.3 36.1 39.9 (9.5)
GPD/Soltec 0.6 1.0 n/m 3.8 (2.1) n/m
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Total
Pharmaceuticals 723.9 507.2 42.7 118.5 91.3 29.8
Group
Operations(a) -- -- -- (24.3) (19.0) (27.9)
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Total 2,734.2 2,326.8 17.5 171.9 141.9 21.1
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(a) For statutory reporting purposes the "cost" of the debtors
securitisation funding programme is required to be treated as a
loss on sale and included in EBIT. This cost (economically in
the nature of interest) amounted to $6.8 million in 2001
(Nil - 2000).
(aa) June 2000 comparative numbers - Soltec Research Pty Limited was
sold in March 2001. Included in the EBIT results is a
contribution of $1.5 million for the year 2000 and a
contribution of $1.2 million for the year 2001. Last year's
Soltec EBIT contribution was included in Healthcare's result.
Further EBIT of $(0.4) million has been reclassified from Group
Operations to Pharmaceuticals.
There were a number of significant one-off items in 2001 which are
identified below to provide a better comparison with the previous
year.
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EBIT Effect NPAT Effect
$m $m
----------------- --------------
Integration costs -8.0 -5.2
Soltec profit on sale +13.7 +9.0
Capital losses - tax effect
not previously booked -- +4.7
Other tax benefits, incl change
in Australian tax rate -- +4.4
Share sales (investment holdings) +3.5 +2.3
Provision for employee incentives (USA)(a) -11.5 -7.6
-------------- -----------
-2.3 +7.6
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(a) The incentives include a stock appreciation rights plan based on
the Company's share price performance which is operated in the
United States as, due to legal restrictions, the Company's
employee option and share plans are unable to operate in that
country. This provision resulted from the significant increase in
the Company's share price during the financial year.
In addition, retail pharmacy brand development costs totalling
$9.9 million were capitalised in the prior year. This capitalisation
ceased from 1 July 2000.
Normalising for the significant one-off items in 2001 and the
capitalised expenses in 2000, the relative performance can be
summarised as follows:
-----------------------------------------
June 01 June 00 Change
$m Actual Actual %
----------------------------------------------------------------------
Group EBIT 176.4 132.0 +33.6
Interest (35.0) (26.2) +33.6
----------------------------------------------------------------------
Net Profit before Tax 141.4 105.8 +33.6
Tax and minorities (43.0) (37.4) +15.0
----------------------------------------------------------------------
Net Profit after Tax 98.4 68.4 +43.9
----------------------------------------------------------------------
Adjusted eps (cps) 60.6 42.6 +42.4
----------------------------------------------------------------------
Pharmaceuticals Division As announced in June 2000, Faulding's worldwide oral and injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. pharmaceutical businesses commenced operation as a single division, Faulding Pharmaceuticals, from 1 July 2000. A head office for the division was established in New Jersey, USA and it is now organised and reporting on a regional basis. The Pharmaceuticals division's result was driven by strong demand throughout the world for its increasing range of quality generic products and its reinvigorated re·in·vig·o·rate tr.v. re·in·vig·o·rat·ed, re·in·vig·o·rat·ing, re·in·vig·o·rates To give new life or energy to. re brand franchise. Sales revenues were also boosted by a much lower Australian dollar Noun 1. Australian dollar - the basic unit of money in Australia and Nauru dollar - the basic monetary unit in many countries; equal to 100 cents exchange rate, in particular against the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. dollar which averaged approximately 17% higher than last year. However, the full benefit of the lower exchange rate on EBIT was constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. by the Group's hedging programme. Net foreign exchange losses from all sources, including the hedging programme, amounted to $17.9 million before tax (June 2000 - profit $1.5 million before tax). Americas The Americas region recorded an increase in EBIT of 22.4% to $55.1 million with Purepac remaining the major contributor. This result has been driven by continued strong sales of diltiazem where the Company has achieved a 24% market share in a stable pricing environment, and of spironolactone spironolactone /spir·o·no·lac·tone/ (spi?rah-no-lak´ton) one of the spirolactones, an aldosterone inhibitor that blocks the aldosterone-dependent exchange of sodium and potassium in the distal tubule, thus increasing excretion of sodium , lorazepam lorazepam /lor·a·ze·pam/ (lor-az´e-pam) a benzodiazepine used as an antianxiety agent, sedative-hypnotic, preanesthetic medication, and anticonvulsant. lor·az·e·pam n. and phentermine phentermine /phen·ter·mine/ (fen´ter-men) a sympathomimetic amine related to amphetamine, used as an anorectic either as the hydrochloride salt or as the base complexed with an ion exchange resin. . In the case of phentermine, the Company has benefited from an increasing price in a mature but growing market. Purepac launched four oral generic products during the year and currently has a further twelve products on file with the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. . These products had a total brand sales value of US$6.4 billion in calendar 2000. On 18 April 2001, Purepac received a warning letter from the Food & Drug Administration (FDA) in the United States identifying certain deviations from Good Manufacturing Practice Good Manufacturing Practice or GMP (also referred to as 'cGMP' or 'current Good Manufacturing Practice') is a term that is recognized worldwide for the control and management of manufacturing and quality control testing of foods and pharmaceutical products. regulations observed during an audit of its facility in Elizabeth, New Jersey Elizabeth is a city in Union County, New Jersey, in the United States. As of the 2000 census, the city had a total population of 120,568, making it New Jersey's fourth largest city (by population). The population of Elizabeth was 126,179, as of the Census Bureau's 2006 estimate. . The Company has responded to all of the issues raised by the FDA and is confident that it has taken all steps necessary to satisfy it. A formal reinspection is required before the warning letter can be lifted. It is expected to occur within the next two weeks. The status of Purepac's gabapentin product has not changed materially since announcement of the Company's half year results in March. Summary judgment is awaited a·wait v. a·wait·ed, a·wait·ing, a·waits v.tr. 1. a. To wait for. See Synonyms at expect. b. on the "submarine submarine, naval craft capable of operating for an extended period of time underwater. Submarines are almost always warships, although a few are used for scientific or business purposes (see also submersible). " `482 chloride chloride (klōr`īd, klôr`–), chemical compound containing chlorine. Most chlorides are salts that are formed either by direct union of chlorine with a metal or by reaction of hydrochloric acid (a water solution of hydrogen chloride) patent while resolution of the so-called D-43 labelling exclusivity remains an impediment A disability or obstruction that prevents an individual from entering into a contract. Infancy, for example, is an impediment in making certain contracts. Impediments to marriage include such factors as consanguinity between the parties or an earlier marriage that is still valid. to a tentative tentative, adj not final or definite, such as an experimental or clinical finding that has not been validated. approval. The FDA has issued draft guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. which, if implemented, would remove this impediment. In any event, this exclusivity expires in March 2002 Faulding Laboratories continues to grow as a result of the increasing demand for its patent protected, branded product Kadian(R) (morphine morphine, principal derivative of opium, which is the juice in the unripe seed pods of the opium poppy, Papaver somniferum. It was first isolated from opium in 1803 by the German pharmacist F. W. A. sulphate sulphate: see sulfate. sustained release Sustained-release (SR), extended-release (ER, XR, or XL), time-release or timed-release, controlled-release (CR), or continuous-release (CR or Contin capsules). Sales of this increasingly profitable product continue to perform well in excess of previous achievements, with net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of US$11.2 million for 2001, rising from 2000 sales of US$4.8 million. Serax(R) is operating as a useful support product for the Company's branded sales representatives, while the technology transfer associated with the FUDR FUDR, FUdR floxuridine. FUDR see floxuridine. branded product, acquired earlier this year, is expected to be completed for launch early in calendar 2002. Coupled with increasing sales of the company's Doryx(R) product through Warner Chilcott Warner Chilcott (formerly Galen) is a Northern Irish pharmaceutical company. It is primarily focused on two core therapeutic areas: women’s healthcare and dermatology. The company has 930 employees in Ireland, the UK, USA and Puerto Rico. in the United States, which is captured in the results for the Asia Pacific region, this result demonstrates the effectiveness of the work being undertaken to build on Faulding's heritage of branded products. The sales and EBIT position relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc injectable products in the Americas region improved significantly from the previous year. Increases were a result of integration-related cost savings, a strong performance in Canada and the launch of new products. These were offset by intense competition leading to severe price erosion in the United States, and by capacity constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. at the Mulgrave plant. EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. In the EMEA region, EBIT declined by 9.5% from the previous year to $36.1m, reflecting lower sales in the UK (after adjusting for exchange rate effects). Capacity constraints at Mulgrave were also a factor here. Margins are generally being sustained in the UK. Strong results were achieved in the Middle East in particular and in Ireland. Italy also continues to show encouraging growth as new products are launched and generics are increasingly accepted in that country. The signing of the licence agreement with NaPro Biotherapeutics, obtaining rights to distribute and sell paclitaxel paclitaxel /pac·li·tax·el/ (pak?li-tak´sel) an antineoplastic that promotes and stabilizes polymerization of microtubules, isolated from the Pacific yew tree (Taxus brevifolia); throughout Europe, is a vital step underpinning un·der·pin·ning n. 1. Material or masonry used to support a structure, such as a wall. 2. A support or foundation. Often used in the plural. 3. Informal The human legs. Often used in the plural. the region's growth prospects in the future. Launch of the product is expected to commence during the 2003/04 financial year. Asia Pacific The Pharmaceuticals division's Asia Pacific region recorded an increase in EBIT from the previous year of 176.5% to $23.5 million, resulting from a strong sales performance and an increased gross margin. This significant growth has been driven by contract manufacturing of paclitaxel, continued growth of Doryx(R) sales to Warner Chilcott and the early and successful launches of both propofol and pamidronate in Australia. Both propofol and pamidronate are among the top ten selling drugs in hospitals in Australia This is a list of major hospitals in Australia. New South Wales Public hospitals in New South Wales are organised into eight Area Health Services plus The Children's Hospital at Westmead. and Faulding has captured 20% and more than 30% market shares since launch in April 2001 and October 2000 respectively. The business in China was profitable this year, contributing EBIT of just over $1.0m. The facility in Foshan, China achieved GMP GMP (guanosine monophosphate): see guanine. status during the course of the year. The GPD/Soltec line item in the results breakdown includes the trading results for Soltec until its divestment divestment to strip one's investment from an entity. in March 2001, together with the subsequent net profit on sale. "GPD gpd abbr. gallons per day " refers to the research and development costs associated with the global proprietary drug development function, centred in Salisbury, South Australia Salisbury (pronounced IPA: /ˈsɔːlzbəri/; located at ) is a suburb in the north of Adelaide, South Australia. . The majority of these resources are dedicated to a collaborative research project with CSIRO CSIRO Commonwealth Scientific & Industrial Research Organization (Australia) developing a treatment for prostate cancer prostate cancer, cancer originating in the prostate gland. Prostate cancer is the leading malignancy in men in the United States and is second only to lung cancer as a cause of cancer death in men. . Capacity constraints at Purepac are being alleviated al·le·vi·ate tr.v. al·le·vi·at·ed, al·le·vi·at·ing, al·le·vi·ates To make (pain, for example) more bearable: a drug that alleviates cold symptoms. See Synonyms at relieve. by upgrades of the Elizabeth plant and development of the plant acquired at Piscataway, New Jersey. Commercial packaging for shipment is expected to commence from Piscataway by September 1st of this year. Capacity to produce 50% more oral pharmaceuticals will be in place by June 2002. Additional anti-neoplastic filling facilities, in train for some time now and required to alleviate Alleviate To make something easier to be endured. Mentioned in: Kinesiology, Applied capacity constraints at the Mulgrave plant, are expected to be operational by October 2001. Capital expenditure on these facilities remains on target and within budget. Faulding Healthcare Faulding Healthcare has continued to maintain and deliver growth from leading positions in the markets in which it operates. Healthcare Services Healthcare Services increased EBIT by 11.8%. This result was driven primarily by Pharmaceutical Benefits Scheme (PBS PBS in full Public Broadcasting Service Private, nonprofit U.S. corporation of public television stations. PBS provides its member stations, which are supported by public funds and private contributions rather than by commercials, with educational, cultural, ) led sales growth. The retail strategy is producing rewards from both increased franchise and service-related income and from the increasing importance of the division's branded pharmacies This article is a list of major pharmacies (also known as chemists and drugstores) by country. Australia Pharmacies in Australia are mostly independently-owned by pharmacists, often operated as franchises of retail brands offered by the three major to the growing distribution business. Membership of the Company's retail brands remains stable. The division's information technology and knowledge management platforms have been enhanced greatly during the year, through both acquisition and development. This is considered to be a primary offering to pharmacists This is a list of notable pharmacists.
The Ethical Category Development business, which registers and distributes oral generic products in Australia, continues to show positive progress. Thirty five drug molecules have now been registered and it is expected that a sufficiently broad product offering will be registered and available by August 2002. Consumer Healthcare Consumer increased EBIT by 11.4%. This result was achieved despite sales growth of only 3.6%, resulting from the depressed nutraceuticals, or vitamins, minerals and supplements (VMS (1) (Virtual Memory System) A multiuser, multitasking, virtual memory operating system for the VAX series from Digital. VMS applications run on any VAX from the MicroVAX to the largest unit. See OpenVMS. ), market, in turn brought on by the implementation of the GST GST abbr. Greenwich sidereal time GST (in Australia, New Zealand, and Canada) Goods and Services Tax (where previously there was no tax). Management has focussed on long term productivity or efficiency gains to achieve this solid year on year increase in EBIT. Moves to integrate the supply chain for the VMS business have ensured that significant cost savings continue to be realised. This integration process is on track for completion by January 2002. Industry and company sales data provide some confidence that the tough trading conditions affecting VMS may be easing. The Banta(R) range of sunscreens Sunscreens Definition Sunscreens are products applied to the skin to protect against the harmful effects of the sun's ultraviolet (UV) rays. Purpose Everyone needs a little sunshine. was successfully launched this year with market share peaking at 5.8%, which exceeded expectations. This launch did not affect the leading market share of the Company's Banana Boat(R) franchise, which remained at approximately 20%. In the soap and personal wash categories, the business has successfully integrated the acquisition of machinery from Campbell Brothers into our Shepparton plant and has maintained the number one position in the multi-pack category. Sales, including contract sales, continued to grow steadily. These categories were also instrumental in mitigating mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. the results from the downturn in VMS products. Group Cashflow The Group's operating cashflow increased to $158.2 million (June 2000 - $154.1 million) after adjusting for cash received under the securitisation funding programme. This cashflow included a negative impact of $40 million when compared to last year, as a result of higher income tax payments driven by higher US profits and the acceleration of company tax instalments in Australia. Investing cashflow was substantially higher due to record capital expenditure, primarily on the manufacturing facilities at Elizabeth and Piscataway, New Jersey and at Mulgrave, Victoria Mulgrave is a suburb in Melbourne, Victoria, Australia. The local government area is the City of Monash. The suburb takes its name from Mulgrave Castle in the County of York. . This investment was partially funded from asset sales totalling approximately $35.5 million (Soltec sale proceeds - $32 million) during the second half of the year as management continued to focus on core operations and increasing return on funds to shareholders. Faulding is a worldwide health and personal care company, listed on the Australian Stock Exchange Australian Stock Exchange (ASX) Australia's major securities market, formed when the six state stock exchanges (Adelaide, Brisbane, Hobart, Melbourne, Perth, and Sydney stock exchanges) were merged in 1987. . Faulding's principal businesses are generic oral and injectable pharmaceuticals, consumer health products, the provision of distribution and retail management services to pharmacies and logistics management Logistics Management is that part of Supply Chain Management that plans, implements, and controls the efficient, effective, forward, and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet services to hospitals. KADIAN, SERAX, DORYX and BANTA are registered trade marks TRADE MARKS. Signs, writings or tickets put upon manufactured goods, to distinguish them from others. 2. It seems at one time to have been thought that no man acquired a right in a particular mark or stamp. 2 Atk. 484. of F H Faulding & Co Limited and its controlled entities. BANANA BOAT is a registered trade mark of Sun Pharmaceuticals Corporation used under licence.
CONSOLIDATED GROUP FINANCIAL SUMMARY
----------------------------------------------------------------------
June 01 June 00
$000 $000 Change
----------------------------------------------------------------------
Sales Revenue ($m) 2,734.2 2,326.8 17.5%
Earnings before interest, tax and
abnormals ($m) 171.9 141.9 21.1%
Operating profit before tax and
abnormals ($m) 142.7 115.2 23.9%
Group net profit after tax and
abnormals ($m) 106.0 78.3 35.4%
Return on funds (Group net
profit after tax/average equity) 14.9% 12.2% 22.1%
Earnings per share after tax (cents) 65.3(cent) 48.8(cent) 33.8%
Dividends per share (cents) 28.0(cent) 23.0(cent) 21.7%
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CONSOLIDATED GROUP FINANCIAL SUMMARY
----------------------------------------------------------------------
June 01 June 00
Cash Flow $000 $000 Change
----------------------------------------------------------------------
Operating Cash Flow(a) 185.7 244.1 (23.9%)
Investing Cash Flow (182.6) (155.0) 17.8%
Financing Cash Flow 14.2 (67.7) 120.9%
Net Cash Flow 17.3 21.4 (19.2%)
----------------------------------------------------------------------
----------------------------------------------------------------------
June 01 June 00
Balance Sheet $000 $000 Change
----------------------------------------------------------------------
Net Current Assets 205.1 164.3 24.8%
Fixed Assets 428.9 336.0 27.6%
Other Net Assets 24.7 23.8 3.8%
Intangibles 234.2 217.1 7.9%
Goodwill 148.7 163.4 (9.0%)
Financed by:
Net Debt 288.9 229.5 25.9%
Shareholders' Funds 752.7 675.1 11.5%
Gearing 38.4% 34.0% 12.9%
----------------------------------------------------------------------
(a) June 2000 includes $90 million receipt from the activation of
the debtors securitisation funding programme compared to $27.5
million received in 2001.
CONSOLIDATED GROUP FINANCIAL SUMMARY
Intangible Assets
----------------------------------------------------------------------
Opening Closing
Balance Balance
$m July Additions/ June
2000 Disposals(a) Amortisation FX 2001
----------------------------------------------------------------------
Brand Names 178 2 -- 4 184
R&D 24 -- (4) -- 20
Patents, rights
& trademarks 15 18 (4) 1 30
Goodwill 163 (9) (11) 6 149
----------------------------------------------------------------------
Total 380 11 (19) 11 383
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(a) Includes acquisition of Campbell Brothers, Minfos and Amfac;
purchase of the NaPro licence for paclitaxel and disposal of Soltec.
Property, Plant and Equipment
----------------------------------------------------------------------
Opening Closing
Balance Balance
July Additions/ June
$m 2000 Disposals(a) Depreciation FX 2001
----------------------------------------------------------------------
Land 22 5 -- 1 28
Buildings 118 8 (5) 10 131
Plant
& Equipment 196 95 (30) 9 270
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Total 336 108 (35) 20 429
Healthcare 120 29 (11) -- 138
Pharmaceuticals 203 79 (23) 20 279
Corporate 13 -- (1) -- 12
----------------------------------------------------------------------
CONSOLIDATED GROUP FINANCIAL SUMMARY
Return on Funds by Division
----------------------------------------------------------------------
Funds Employed (Average) 2000 2001 Change
----------------------------------------------------------------------
Healthcare 560 611 51
Pharmaceuticals 445 547 102
Other 24 (81) (105)
----------------------------------------------------------------------
Total 1,029 1,077 48
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-------------------------------------------------------
ROFE(a) 2000 2001
-------------------------------------------------------
Healthcare 12.4% 12.7%
Pharmaceuticals 20.5% 21.7%
-------------------------------------------------------
Total 15.6% 18.2%
-------------------------------------------------------
(a) EBIT/Average Funds Employed
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