Ipsen's First Half 2006 Results.PARIS Paris, in Greek mythology Paris or Alexander, in Greek mythology, son of Priam and Hecuba and brother of Hector. Because it was prophesied that he would cause the destruction of Troy, Paris was abandoned on Mt. -- Ipsen Ipsen is a European pharmaceutical company headquartered in Paris, France. It primarily develops and markets medications used in oncology, endocrinology and the treatment of neuromuscular disorders. In 2005, Ipsen spent € 169 million—20. (Paris: IPN IPN Instant Payment Notification (PayPal) IPN Instituto Politecnico Nacional (México) IPN Infectious Pancreatic Necrosis IPN Interplanetary Internet (JPL) ) --Results in line with expectations: annual objectives maintained --Strong cash-flow generation during the period: EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 130 million --Financial flexibility strengthened, with a net cash position of EUR 193 million at 30 June June: see month. 2006 The Board of Directors of Ipsen (Paris: IPN), chaired by Jean-Luc Jean-Luc may refer to: In politics:
First half consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: results summary(1) (in EUR million unless otherwise stated) 2006 2005(2) % change 2006/2005 -------------------------- ----------- ----------- ------------------- Sales 430.6 404.1 +6.6% -------------------------- ----------- ----------- ------------------- Other revenues 46.6 45.7 +1.9% -------------------------- ----------- ----------- ------------------- Total revenues 477.2 449.8 +6.1% -------------------------- ----------- ----------- ------------------- Operating profit 108.4 115.8 (6.4)% Operating margin (as a % of sales) 25.2% 28.7% -------------------------- ----------- ----------- ------------------- Restated operating profit (3) 116.8 115.8 +0.8% Restated operating margin (as a % of sales) 27.1% 28.7% -------------------------- ----------- ----------- ------------------- Consolidated profit - attributable to the Group 88.1 89.4 (1.4)% -------------------------- ----------- ----------- ------------------- Earnings per share (EUR) (4) 1.05 1.19 (12.0)% -------------------------- ----------- ----------- ------------------- Average number of shares: -------------------------- Outstanding 84,013,049 74,936,490 On a diluted basis 84,031,717 74,936,490 -------------------------- ----------- ----------- ------------------- Net cash (debt), end of period 193.3 (153.1) -------------------------- ----------- ----------- ------------------- (1) Ipsen's auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together have performed a limited review of these financial statements. (2) The 30 June 2005 pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma income statement as shown above differs from that published in the 31 December December: see month. 2005 "Document de Base". In compliance with IFRS IFRS International Financial Reporting Standard(s) IFRS Inter Frame Relay Service IFRS Indiana Facilities Registry System 5 the Group's primary care business in Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. , divested in October October: see month. 2005, has been treated as "discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. " from 1 January January: see month. 2005, whereas in the financial statements reported for 2005 this business was treated as "discontinued operations" only from 30 September 2005. Such restated information presents comparable data over the two periods reported as at 30 June 2006. (3) In order to better assess the Group's operating performance, the restated operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for the first half of 2006 excludes an EUR 8.4 million one-off (1) One at a time. CD-ROM recorders (CD-R drives) are commonly called one-off machines because they write one CD-ROM at a time. (2) Only once. Software that is written to solve a specific problem only one time is sometimes called a one-off. expense paid in March 2006 to Inamed for the recovery of all rights related to Reloxin(R) (4) On a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis. Review of first half results For the first half of 2006, consolidated sales grew by 6.6% year-on-year. This increase was fuelled by the growth of products in targeted therapeutic areas (oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. , endocrinology endocrinology Medical discipline dealing with regulation of body functions by hormones and other biochemicals and treatment of endocrine system imbalances. In 1841 Friedrich Gustav Henle first recognized “ductless glands,” which secrete products directly into , neuromuscular neuromuscular /neu·ro·mus·cu·lar/ (-mus´ku-ler) pertaining to nerves and muscles, or to the relationship between them. neu·ro·mus·cu·lar adj. 1. disorders A
emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Countries negatively impacting sales by EUR 14.3 million over the period. Other revenues in the first half of 2006 totalled EUR 46.6 million, up 1.9% compared with EUR 45.7 million in the first half of 2005, which included EUR 10.0 million income resulting from the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of a research contract. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the first half of 2006 was EUR 108.4 million, representing 25.2% of sales, down 6.4% from a high baseline The horizontal line to which the bottoms of lowercase characters (without descenders) are aligned. See typeface. baseline - released version in 2005 (first half of 2005, EUR 115.8 million representing 28.7% of sales), when R&D and commercial costs in 2005 were particularly back-loaded in the second half of that year. Restated for an EUR 8.4 million one-off expense paid in March 2006 to Inamed for the recovery of all rights related to Reloxin(R), the Group's operating profit in the first half of 2006 stood at EUR 116.8 million, stable year-on-year despite severe price pressure in major European countries, to reach 27.1% of sales compared with 28.7% a year ago. This 1.6 points decrease in restated operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: as a percentage of sales notably includes (i) a continued improvement of 0.3 points in cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold due to a better product mix, (ii) an increase of 0.8 points in R&D expenses due to the preparation of filings for Somatuline(R) Autogel(R) and Dysport(R) in the US plus finalisation n. 1. same as finalization. Noun 1. finalisation - the act of finalizing finalization mop up, windup, completion, culmination, closing - a concluding action of the BIM BIM Building Information Modeling BIM Building Information Model BIM Bord Iascaigh Mhara (Irish Sea Fisheries Board) BIM Brussels Instituut voor Milieubeheer (Belgium) BIM Bharathidasan Institute of Management 51077 (GLP-1 analogue (electronics) analogue - (US: "analog") A description of a continuously variable signal or a circuit or device designed to handle such signals. The opposite is "discrete" or "digital". ) development programme and (iii) an increase of 0.6 points in SG&A mainly resulting from an increase in sales taxes sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. in France and in costs of certain corporate functions - notably expenses in respect of stock exchange listing requirements Listing requirements Requirements, including minimum shares outstanding, market value, and income, that are laid down by an exchange for any stock to be listed for trading. - partially offset by productivity improvements in sales and marketing expenses. The consolidated profit attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the Group amounted to EUR 88.1 million in the first half of 2006, representing 18.5% of revenues, compared with 19.9% a year earlier. The Group generated a strong EUR 130.2 million cash flow from operating activities, against EUR 62.5 million a year earlier. Cash flow in the first half of 2006 benefited from sustained activity during the period as well as from payments of milestones by Medicis under the Reloxin(R) distribution licence granted by the Group for 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. , Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and Japan in the aesthetics aesthetics (ĕsthĕt`ĭks), the branch of philosophy that is concerned with the nature of art and the criteria of artistic judgment. indication. As a result, the Group has reimbursed most of its credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities , in addition to utilising EUR 25.2 million for its investment transactions and paying out EUR 50.4 million in dividends during the half-year. Overall, the first half of 2006 showed a net increase in cash flow of EUR 24.2 million compared to a decrease of EUR 55.6 million for the same period a year ago. Financial objectives for 2006 full year The Group's performance in the first half of 2006 is consistent with management expectations and enables the Group to confirm its financial objectives set out for the full year of 2006: --Sales growth of 6.5% to 7.5% --Operating margin of 21.5% to 22.0% of sales(1)(1) --Based on the guidance issued by Tercica This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. on its 2006 financial results, and assuming completion of Ipsen's acquisition of 25% of Tercica's equity in early October 2006, Ipsen's financial statements in 2006 could also include an additional c.EUR 4 million charge(2)(2)("income/loss from associates "). Commenting on the performance in the first half of 2006, Jean-Luc Belingard, Chairman and Chief Executive Officer of Ipsen, stated: "These results confirm the soundness of Ipsen's strategic focus: strong growth in targeted therapeutic areas and strong operating margins generating strong cash-flows. This allows us to confirm our full year 2006 objectives". (1) including the negative impact of a non-recurring expense of EUR 8.4 million paid to Inamed and excluding any potential loss from associates arising from Tercica. (2) Assuming Tercica's net loss during the second half of 2006 is spread evenly between the third and fourth quarters of 2006. Regarding Ipsen's evolution since the beginning of 2006, Mr Belingard said: "We have significantly reshaped Ipsen's profile, notably by expanding its marketing reach and overall market coverage worldwide: we have gained exposure to the aesthetic aes·thet·ic or es·thet·ic adj. 1. Relating to the sensations. 2. Relating to esthetics. market through our partnership with Medicis in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and, subject to completion, we are building with Tercica our platform to market Somatuline(R) in the US whilst preserving our profitability profile. We have also broadened our product portfolio with the addition of Increlex(R) to our endocrinology offering in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). . Last but not least,
Somatuline(R) Autogel(R) has been approved in Canada, the first time
ever one of our products has been registered in North America".Mr Belingard added: "Since December 2005, we have achieved our objectives for the period. The second half of 2006 will be another important period for Ipsen, with the expected filings of febuxostat Febuxostat is an inhibitor of xanthine oxidase currently under investigation as a potential treatment for gout.[1] References 1. ^ Stamp LK, O'Donnell JL, Chapman PT (2007). in Europe and Somatuline(R) Autogel(R) in the US in the fourth quarter. We are also progressing our discussions with potential distributors for our botulinum toxin Botulinum toxin (botulin) A neurotoxin made by Clostridium botulinum; causes paralysis in high doses, but is used medically in small, localized doses to treat disorders associated with involuntary muscle contraction and spasms, in addition to strabismus. product in aesthetic use in Europe. Furthermore, we are continuing to investigate potential acquisitions of late-stage products, as well as seeking R&D partnerships for some of our early-stage products. Going forward, we intend to continue to unfold unfold - inline our strategy, capitalizing on our R&D capabilities and our market positioning in order to grow Ipsen into a tier-1 international specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. pharmaceutical company enjoying sustained profitable growth". A review of the financial position and results in Ipsen's consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge for the half-year ended 30 June 2006 and 30 June 2005 is attached to this press release. Conferences Calls Conference call Media (in French) Ipsen will host a conference call on Wednesday Wednesday: see week. 6 September at 10.00 a.m. (Paris time). Callers should dial in approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 5 to 10 minutes prior to the start of the call. No reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. is necessary to participate in the call. The telephone number to join the conference call is +33 (0)1 71 23 04 21 . Please mention the company name (Ipsen) and our CEO's name (Jean-Luc Belingard) to the operator. No access code is necessary for the live call. A replay will be available soon after the live call. The telephone number to access the replay is +33 (0)1 71 23 02 48. The access code is 5482558#. The replay will be available for one week following the live call. Conference call Analysts and webcat (in English 1. English - (Obsolete) The source code for a program, which may be in any language, as opposed to the linkable or executable binary produced from it by a compiler. The idea behind the term is that to a real hacker, a program written in his favourite programming language is ) Ipsen will host a conference call on Wednesday 6 September at 3.00 p.m. (Paris time). A live webcast will be available at www.ipsen.com. The webcast will be archived on the Ipsen website for 3 months following the live call. Callers should dial in approximately 5 to 10 minutes prior to the start of the call. No reservation is necessary to participate in the call. The telephone numbers to join the conference call are, from France and Europe: +33 (0)1 71 23 04 21 and from the United States: +1 718 354 1362. Please mention the company name (Ipsen) and our CEO's name (Jean-Luc Belingard) to the operator. No access code is necessary for the live call. A replay will be available soon after the live call. The telephone numbers to access the replay are, from France and Europe: +33 (0)1 71 23 02 48 and from the United States: +1 718 354 1112. The access code is 9210426#. The replay will be available for one week following the live call. About Ipsen Ipsen is a European pharmaceutical group with over 20 products on the market and a total worldwide staff of nearly 4,000. The company's development strategy is based on a combination of products in targeted therapeutic areas (oncology, endocrinology and neuromuscular disorders) which are growth drivers, and primary care products which contribute significantly to its research financing. This strategy is also supported by an active policy of partnerships. The location of its four R&D centres (Paris, Boston Boston, town, England Boston, town (1991 pop. 26,495), E central England, on the Witham River. Boston's fame as a port dates from the 13th cent., when it was a Hanseatic port trading wool and wine. Having recovered from a decline in the 18th and 19th cent. , Barcelona Barcelona (bär'səlō`nə, Catalan bär'səlō`nə, Span. bär'thālō`nä), city (1990 pop. 4,738,354), capital of Barcelona prov. and chief city of Catalonia, NE Spain, on the Mediterranean Sea. , London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. ) gives the Group a competitive edge in gaining access to leading university research teams and highly qualified personnel. In 2005, Research and Development expenditure was EUR 169.0 million, i.e. 20.9% of consolidated sales, which amounted to EUR 807.1 million in the Group's pro forma accounts prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with IFRS. Nearly 700 people in R&D are dedicated to the discovery and development of innovative drugs for patient care. Ipsen's shares are traded on Segment A of Eurolist by Euronext  Euronext N.V. is a pan-European stock exchange based in Paris[1] (TM) (stock code: IPN, ISIN Isin (ĭs`ĭn), capital of an ancient Semitic kingdom of N Babylonia. The city became important after the third dynasty of Ur fell to the Elamites and the Amorites (c.2025 B.C.). The phase from c.2025–c.1763 B.C. code:
FR0010259150). For more information on Ipsen, visit our website at
www.ipsen.com.Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. The forward-looking statements and targets contained herein are based on Ipsen's management's current views and assumptions. Such statements involve known and unknown risks and uncertainties that may cause actual results, performance or events to differ materially from those anticipated herein. Ipsen expressly disclaims any obligation or undertaking to update or revise any forward-looking statements, targets or estimates contained in this press release to reflect any change in events, conditions, assumptions or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or on which any such statements are based, unless so required by applicable law. Ipsen's business is subject to the risk factors outlined in its information documents filed with the French Autorite des marches financiers. For further information : Didier Veron, Director of Public Affairs and Corporate Communications Tel.: +33 (0)1 44 30 42 38 - Fax: +33 (0)1 44 30 42 04 E-mail : didier.veron@ipsen.com David Schilansky, Investor Relations Officer Tel.: +33 (0)1 44 30 43 31 - Fax: +33 (0)1 44 30 43 21 E-mail: david.schilansky@ipsen.com 1 - Comparison of the consolidated income statement consolidated income statement An income statement that combines the income statements of two or more organizations. As with other consolidated statements, a consolidated income statement eliminates any funds owed to or due from firms within the same group. for the half-years ended 30 June 2006 and 30 June 2005 A comparison of the income statement is presented below:
30 June 2006
------------------------------------
(in thousands of % of revenues
euros)
--------------------------------------------------- ------------------
Sales 430,607 90.2 %
Other revenues 46,569 9.8 %
Total revenues 477,176 100.0 %
Cost of goods sold (88,879) -18.6 %
Research and development expenses (83,817) -17.6 %
Selling, general and
administrative expenses (188,000) -39.4 %
Other operating income and
expenses (8,298) -1.7 %
Restructuring costs 189 n/s
Impairment losses - -
Operating profit 108,371 22.7 %
- Income from cash and cash
equivalents 2,767
- Cost of gross financial debt (1,208)
Cost of net financial debt 1,559 0.3 %
Other interest income and expense (1,202) -0.3 %
Income tax (20,280) -4.3 %
Profit from continuing operations 88,448 18.5%
Profit from discontinued n/s
operations 33
Consolidated profit 88,481 18.5%
- Attributable to equity holders
of Ipsen S.A. 88,144
- Minority interests 337
--------------------------------------------------- ------------------
30 June 2005 30 June 2005
pro forma (1) pro forma
as reported
----------------------------------- -------------
(in % of 2006/2005 (in thousands
thousands revenues variation of euros)
of euros)
------------------------------- ----------- ------------ -------------
Sales 404,099 89.8 % 6.6 % 412,704
Other revenues 45,684 10.2 % 1.9 % 45,684
Total revenues 449,783 100.0 % 6.1 % 458,388
Cost of goods sold (84,437) -18.8 % 5.3 % (88,961)
Research and
development expenses (75,565) -16.8 % 10.9% (75,635)
Selling, general and
administrative
expenses (174,166) -38.7 % 7.9 % (177,317)
Other operating n/s n/s
income and expenses 174 174
Restructuring costs - - n/s -
Impairment losses - - n/s -
Operating profit 115,789 25.7 % -6.4% 116,649
- Income from cash
and cash equivalents 1,089 1,089
- Cost of gross
financial debt (4,378) (4,378)
Cost of net financial
debt (3,289) -0.7 % -147.4 % (3,289)
Other interest income
and expense (1,348) -0.3 % -10.8% (1,348)
Income tax (22,256) -4.9 % -8.9% (22,433)
Profit from
continuing
operations 88,896 19.8 % -0.5% 89,579
Profit from
discontinued n/s
operations 683 0.2 % -
Consolidated profit 89,579 19.9 % -1.2 % 89,579
- Attributable to
equity holders of
Ipsen S.A. 89,368 89,368
- Minority interests 211 211
------------------------------- ----------- ------------ -------------
(1) The 30 June 2005 pro forma income statement as shown above differs from that published in the 31 December 2005 "Document de Base". In compliance with IFRS 5 the Group's primary care business in Spain, divested in October 2005, has been treated as "discontinued operations" from 1 January 2005, whereas in the financial statements reported for 2005 this business was treated as "discontinued operations" only from 30 September 2005. Such restated information presents comparable data over the two half-years reported as at 30 June 2006. --Sales For the first half of 2006, consolidated sales grew by 6.6% year-on-year. This increase was fuelled by the growth of products in targeted therapeutic areas (oncology, endocrinology, neuromuscular disorders) and strong sales momentum in international markets, despite downward price pressures in Major Western European Countries negatively impacting sales by EUR 14.3 million over the period. --Other revenues In the first half of 2006, other revenues, which include royalties Not to be confused with Royal family. Royalties (sometimes, running royalties) are usage-based payments made by one party (the "licensee") to another (the "licensor") for ongoing use of an asset, most typically an intellectual property (IP) right. and milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. payments from partners and for various services, totalled EUR 46.6 million, up 1.9% year-on-year (first half of 2005, EUR 45.7 million). Other revenues break down into half-years as follows:
30 June 30 June 2006/2005
(in thousands of euros) 2006 2005 variation
pro forma Amount %
------------------------------- ---------- ----------- ------- -------
Breakdown by revenue type
- Royalties received 21,865 22,684 (819) -3.6%
- Milestone payments 4,128 60 4,068 ns
- Licensing agreements 6,717 16,033 (9,316) ns
- Other (co-promotion revenues,
recharging) 13,859 6,907 6,952 100.6 %
------------------------------- ---------- ----------- ------- -------
Total other revenues 46,569 45,684 885 1.9 %
------------------------------- ---------- ----------- ------- -------
--Royalties received mainly comprised royalties from the Kogenate(R) licence, which amounted to EUR 20.2 million for the first half of 2006 (first half of 2005, EUR 21.1 million). The first quarter of 2005 had been particularly high due to the carry-over The designation of the process by which net operating loss for one year may be applied, as provided by federal tax law, to each of several taxable years following the taxable year of such loss. of some 2004 royalties into the first half of 2005. --Milestone payments represent recognition of payments received over the life of contracts. In the first half of 2006, this income mainly comprised the milestones in relation to the Reloxin(R) and Tenstaten(R) agreements. --In the first half of 2006, licensing agreements mainly comprised the recognition of advance payments made by Roche n. 1. Rock. as a result of the BIM 51077 partnership. In the first half of 2005, income of EUR 10.0 million was recorded in connection with the termination of a research contract. --The increase in other revenues during the first half of 2006 was due to higher billings Billings, city (1990 pop. 81,151), seat of Yellowstone co., S Mont., on the Yellowstone River, in a valley surrounded by seven mountain ranges; inc. as a city 1885. for R&D services within the framework of existing partnerships as well as an increase in co-promotion Co-promotion is a marketing practice where a company in addition to its own, uses another company's sales force to promote the same brand or range of brands. The term is frequently confused with Co-marketing. See also Marketing co-operation revenues, notably related to the early termination in April 2006 of the co-promotion contract for Zoxan with Pfizer Pfizer Incorporated (NYSE: PFE) is a major research-based pharmaceutical company, which ranks number two in sales The company is based in New York City. It produces the number-one selling drug Lipitor (atorvastatin, used to lower blood cholesterol); the oral antifungal , which was initially due to expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. on 30 November November: see month. 2006. --Cost of goods sold In the first half of 2006, cost of goods sold amounted to EUR 88.9 million, representing 20.6% of sales. By comparison, in the same period of 2005, cost of goods sold amounted to EUR 84.4 million, representing 20.9% of sales. This favourable trend was mainly due to increased production volumes and a favourable product mix, despite the negative impact of price cuts during the first half of 2006. --Research and development expenses A comparison of research and development expenses for the half-years ended 30 June 2006 and 30 June 2005 is presented in the following table:
30 June 30 June 2006/2005
(In thousands of euros) 2006 2005 pro variation
forma
Amount %
------------------------------------------ ----------- ------- -------
Breakdown by expense type
- Drug-related research and
development(1) 70,645 65,613 5,032 7.7 %
- Industrial development(2) 10,218 7,518 2,700 35.9 %
- Strategic development(3) 2,954 2,434 520 21.4 %
------------------------------------------ ----------- ------- -------
Total 83,817 75,565 8,252 10.9 %
------------------------------------------ ----------- ------- -------
(1) Drug-related research and development is aimed at identifying new agents, determining their biological characteristics and developing small-scale small-scale adj. 1. Limited in scope or extent; modest: a small-scale plan. 2. Created on a small scale: manufacturing processes. Pharmaceutical development is the process through which active agents become regulatorily-approved drugs and is also used to improve existing drugs and to research new therapeutic indications for them. Patent-related costs are included in this type of expense. (2) Includes chemical, biotechnical and development-process research costs to industrialise Verb 1. industrialise - organize (the production of something) into an industry; "The Chinese industrialized textile production" industrialize alter, change, modify - cause to change; make different; cause a transformation; "The advent of the automobile may the small-scale production of agents developed by the research laboratories. (3) Includes costs incurred for research into new product licences or establishing partnership agreements. Research and development expenses increased by 10.9% to EUR 83.8 million, representing 17.6% of total revenues and 19.5% of sales for the half-year to 30 June 2006. That compares with the half-year to 30 June 2005, when research and development expenses totalled EUR 75.6 million, representing 16.8% of total revenues and 18.7% of sales. --In 2006, major research and development projects included the continuation continuation - continuation passing style of phase III clinical trials Noun 1. phase III clinical trial - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the for Somatuline(R) and Dysport(R) with a view to preparing for their filing with the Food and Drug Administration in the USA ("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. "), as well as the finalisation of the BIM 51077 development programmes agreed within the partnership with Roche. The growth in drug-related research and development expenses particularly reflects the full-period impact of the Group having strengthened its clinical development teams, starting in 2004. --In the area of industrial development, the increase during the first half of 2006 in industrial development expenses is mainly linked to costs required for the preparation for pre-approval In lending, pre-approval has two meanings: 1. The first is that a lender, via public or proprietary information, feels that a potential borrower is completely credit worthy enough for a certain credit product, and approaches the potential customer with a guarantee that inspections by the FDA in some of the Group's manufacturing sites, to prepare for future launches of Dysport(R) and Somatuline(R) in the USA. --Selling, general and administrative expenses A comparison of selling, general and administrative expenses for the half-years ended 30 June 2006 and 30 June 2005 is presented in the following table:
30 June 2006/2005
30 June 2005 variation
2006 pro
(In thousands of euros) forma Amount %
---------------------------------------------- -------- ------- ------
Breakdown by expense type
Royalties paid 15,839 14,088 1,751 12.4 %
Taxes and sales tax 7,548 5,828 1,720 29.5 %
Other sales and marketing expenses 127,221 121,578 5,643 4.6 %
---------------------------------------------- -------- ------- ------
Selling expenses 150,608 141,494 9,114 6.4 %
---------------------------------------------- -------- ------- ------
General and administrative expenses 37,392 32,672 4,720 14.4 %
---------------------------------------------- -------- ------- ------
Total 188,000 174,166 13,834 7.9 %
---------------------------------------------- -------- ------- ------
For the first half of 2006 , selling, general and administrative expenses increased by 7.9% to EUR 188.0 million, representing 43.7% of sales compared with EUR 174.2 million a year ago (representing 43.1% of sales). --Selling expenses amounted to EUR 150.6 million, or 35.0% of sales for the first half of 2006, a flat rate year-on-year (first half of 2005, EUR 141.5 million representing 35.0% of sales). Selling expenses include royalties paid to third parties on the sales of products marketed by the Group amounting to EUR 15.8 million for the first half of 2006, up 12.4% year-on-year, stemming stemming - stemmer from the sales growth of the corresponding products. Taxes and sales taxes for the first half of 2006 were up 29.5% at EUR 7.5 million, mainly due to an increase of sales tax in France to 1.76% imposed on 1 January 2006, up from 0.6% a year ago. For the first half of 2006, other sales and marketing expenses amounted to EUR 127.2 million, up 4.6% from EUR 121.6 million for the same period a year ago. This increase is significantly below the sales growth level, and reflects the success of the Group's productivity improvement programmes. --General and administrative expenses grew by 14.4% to EUR 37.4 million for the first half of 2006, representing an increase of EUR 4.7 million from a year ago. This evolution stemmed stemmed adj. 1. Having the stems removed. 2. Provided with a stem or a specific type of stem. Often used in combination: stemmed goblets; long-stemmed roses. mainly from an increase in costs of corporate functions, notably due to the stock exchange listing of the Group, as well as reinforcement reinforcement /re·in·force·ment/ (-in-fors´ment) in behavioral science, the presentation of a stimulus following a response that increases the frequency of subsequent responses, whether positive to desirable events, or of certain administrative functions of the Group related to its expansion in international markets. --Other operating income and expenses For the first half of 2006, other operating income and expenses amounted to an EUR 8.3 million expense compared with EUR 0.2 million income a year ago. In 2006, this amount essentially comprises a non-recurring payment of USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 10.0 million to Inamed for the recovery of all rights related to Reloxin(R) in the United States, Canada and Japan in accordance with the termination agreement between the Group and Inamed. --Operating profit Operating income for the first half of 2006 was EUR 108.4 million, representing 25.2% of sales, down 6.4% from a high baseline in 2005 (first half of 2005, EUR 115.8 million representing 28.7% of sales), when R&D and commercial costs were particularly back-loaded into the second half of the year. Restated for an EUR 8.4 million one-off expense paid in March 2006 to Inamed for the recovery of all rights related to Reloxin(R), the Group's operating profit in the first half of 2006 stood at EUR 116.8 million, stable year-on-year despite severe price pressure in major European countries, representing 27.1% of sales compared with 28.7% a year ago. This 1.6 points decrease in restated operating profit as a percentage of sales notably includes (i) a continued improvement of 0.3 points in cost of goods sold due to a better product mix, (ii) an increase of 0.8 points in R&D expenses due to the preparation of the filings for Somatuline(R) Autogel(R) and Dysport(R) in the US plus finalisation of the BIM 51077 (GLP-1 analogue) development programme and (iii) an increase of 0.6 points in SG&A mainly resulting from an increase in sales taxes in France and in costs of certain corporate functions - notably stock exchange listing requirements expenses - partially offset by productivity improvements in other sales and marketing expenses. Segment reporting segment reporting A type of financial reporting in which the firm discloses information by identifiable industry segments. For example, Union Pacific Corporation reports revenues, income, assets, depreciation, and capital expenditures for each of four : Operating profit by geographical ge·o·graph·ic also ge·o·graph·i·cal adj. 1. Of or relating to geography. 2. Concerning the topography of a specific region. ge region In compliance with IAS See iPlanet Application Server. 1. (computer) IAS - The first modern computer. It had main registers, processing circuits, information paths within the central processing unit, and used Von Neumann's fetch-execute cycle. 14 "Segment Reporting", the Group's primary reporting format is presented according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. geographical segment, since Ipsen operates in a single business segment, i.e. drug research and development, production and sales. Sales, revenues and operating profit for the half-years ended 30 June 2006 and 30 June 2005 are presented in the following table by geographical region:
30 June 2006 30 June 2005
pro forma
(in (in
thousands thousands
of euros) % of euros) %
---------------------------- ---------- --------- ---------- ---------
Major Western European
countries (1)
Sales 275,645 96.3 % 273,927 97.8 %
Revenues 286,345 100.0 % 280,052 100.0 %
Operating profit 113,110 39.5 % 114,745 41.0 %
---------------------------- ---------- --------- ---------- ---------
Other European countries
Sales 93,324 100.0 % 79,047 99.8 %
Revenues 93,324 100.0 % 79,218 100.0 %
Operating profit 40,372 43.3 % 29,440 37.2 %
---------------------------- ---------- --------- ---------- ---------
Rest of the World
Sales 61,638 100.0 % 51,125 100.0 %
Revenues 61,638 100.0 % 51,125 100.0 %
Operating profit 24,375 39.5 % 15,924 31.1 %
---------------------------- ---------- --------- ---------- ---------
Allocated Total
Sales 430,607 97.6 % 404,099 98.5 %
Revenues 441,307 100.0 % 410,395 100.0 %
Operating profit 177,857 40.3 % 160,109 39.0 %
---------------------------- ---------- --------- ---------- ---------
Non-Allocated Total
Revenues 35,869 100.0 % 39,388 100.0 %
Operating loss (69,486) (193.7) % (44,320) (112.5) %
---------------------------- ---------- --------- ---------- ---------
Ipsen Total
Sales 430,607 90.2 % 404,099 89.8 %
Revenues 477,176 100.0 % 449,783 100.0 %
Operating profit 108,371 22.7 % 115,789 25.7 %
---------------------------- ---------- --------- ---------- ---------
2006/2005 variation
(in thousands of
euros) %
---------------------------- -------------------- --------------------
Major Western European
countries (1)
Sales 1,718 0.6 %
Revenues 6,293 2.2 %
Operating profit (1,635) (1.4) %
---------------------------- -------------------- --------------------
Other European countries
Sales 14,277 18.1 %
Revenues 14,106 17.8 %
Operating profit 10,932 37.1 %
---------------------------- -------------------- --------------------
Rest of the World
Sales 10,513 20.6 %
Revenues 10,513 20.6 %
Operating profit 8,451 53.1 %
---------------------------- -------------------- --------------------
Allocated Total
Sales 26,508 6.6 %
Revenues 30,912 7.5 %
Operating profit 17,748 11.1 %
---------------------------- -------------------- --------------------
Non-Allocated Total
Revenues (3,519) (8.9) %
Operating loss (25,166) (56.8) %
---------------------------- -------------------- --------------------
Ipsen Total
Sales 26,508 6.6 %
Revenues 27,393 6.1 %
Operating profit (7,418) (6.4) %
---------------------------- -------------------- --------------------
(1) France, Spain, Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. , Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). and the UK --In the Major Western European countries, sales for the first half of 2006 grew by only 0.6% year-on-year. This mainly reflects government measures imposing price cuts, together with the impact of the Tenstaten(R) agreement with Recordati in France. Moreover, in the first half of 2006, sales taxes increased by nearly EUR 2 million year-on-year, mainly in France. As a result, the operating profit declined by 1.4% to EUR 113.1 million for the first half of 2006, representing 39.5% of revenues, against EUR 114.7 million a year ago, representing 41.0% of revenues. --In Other European countries, which include other Western European countries and Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. countries, the operating profit for the period increased by 37.1% to EUR 40.4 million, compared with EUR 29.4 million a year earlier. This good performance was achieved due to (i) a strong 18.1% sales increase despite a EUR 3.3 million impact of price reductions, (ii) a reduction in sales taxes and commissions in some countries and (iii) the absence of non-recurring expenses in the first half of 2006, which had impacted the first half of 2005. As a result, operating profit in the region for the first half of 2006 represents 43.3% of revenues, against 37.2% a year ago. --In the Rest of the World, most of the Group's products are marketed by third-party distributors Third-Party Distributor The name given to institutions that sell or distribute mutual funds to investors for fund management companies without direct relation to the fund itself. and agents, except in China and South Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. , where Ipsen has a direct presence. For the first half of 2006, operating profit sharply increased to EUR 24.4 million, up 53.1% year-on-year (first half of 2005, EUR 15.9 million) due to a strong 20.6% increase in sales, while costs have not increased at the same pace. Non-allocated operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the first half of 2006 totalled EUR 69.5 million, against a loss of EUR 44.3 million a year ago. For the first half of 2006, the non-allocated operating loss included: --revenues of EUR 35.9 million against EUR 39.4 million a year earlier. This decrease is explained by (i) the negative impact of lesser royalties generated by the Kogenate(R) license, (ii) an income received in May 2005 related to the termination of a research agreement and (iii) in the first half of 2006, the positive impact of the recognition of milestones in connection with the Reloxin(R) agreement in addition to higher billings for R&D services in existing partnerships. --research and development expenses of EUR 75.4 million, up from EUR 68.0 million a year ago. --selling, general & administrative expenses of EUR 21.8 million, compared with EUR 16.9 million a year ago. This increase results in particular from a reinforcement of some of the Group's corporate functions. --other expense of EUR 8.1 million, mainly comprising the indemnity Recompense for loss, damage, or injuries; restitution or reimbursement. An indemnity contract arises when one individual takes on the obligation to pay for any loss or damage that has been or might be incurred by another individual. paid to Inamed as shown above, compared with other income of EUR 1.2 million recorded a year ago. Cost of net financial debt For the first half of 2006, the cost of net financial debt showed an income of EUR 1.6 million against an expense of EUR 3.3 million a year earlier. This positive trend mainly reflects the strong improvement in the cash position due to the capital increase in December 2005 and the cash received in 2006 from partnerships. --Income tax For the first half of 2006, the Group's effective tax rate amounted to 18.7% of pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta profit from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , compared with 20.0% a year earlier. The Group's effective tax rate benefited in 2006 from the non-recurring tax impact of the use of UK capital losses carried forward for a total of EUR 6.9 million.. Due to uncertainty of recovery of those capital losses, no deferred tax assets had previously been recognized whereas, in 2006, the capital gain deriving de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from the Reloxin(R) agreement with Medicis enabled capital losses to be offset in the period. Excluding this non-recurring impact, the Group's tax rate would have been 25.0% for the half-year to 30 June 2006. A year ago, the Group's effective tax rate had benefited from the non-recurring impacts of recognizing net deferred tax assets and utilizing previously unrecognized tax loss carry forwards in UK and Dutch subsidiaries, since their profitability had improved. Excluding these non-recurring impacts, the Group's effective tax rate for the half-year to 30 June 2005 would have been 24.9%, in line with the first half of 2006. --Profit from continuing operations As a result of the items noted above, profit from continuing operations for the first half of 2006 declined by 0.5% to EUR 88.5 million, against EUR 88.9 million a year earlier. Thus profit from continuing operations represented 18.5% of revenues, compared with 19.8% for the first half of 2005. --Profit from discontinued operations Profit from discontinued operations relates to toll-manufacturing for Spain-based FAES FAES Foundation for Advanced Education in the Sciences (National Institutes of Health) FAES Flame Atomic Emission Spectroscopy FARMA FARMA National Farmers' Retail & Markets Association (Great Britain) , who acquired the Group's primary care business in Spain in October 2005. This activity, presented as "discontinued operations" as from 1 January 2005, will be undertaken until early 2007. For the first half of 2006, net profit was not significant and amounted to EUR 0.7 million for the same period a year ago. --Consolidated profit As a result of the items noted above, consolidated profit declined by 1.2% to EUR 88.5 million (EUR 88.1 million attributable to equity holders of Ipsen S.A.) in the first half of 2006, against EUR 89.6 million (EUR 89.4 million attributable to equity holders of Ipsen S.A.) a year earlier. Consolidated profit represented 18.5% of revenues for the half-year to 30 June 2006, compared with 19.9% a year earlier. --Milestones received in cash during the period but not yet recognised as revenues in the Group's income statement For the half-year ended 30 June 2006, the total milestones received in cash by the Group but not yet recognised as revenues in its consolidated income statement amounted to EUR 94.3 million, against EUR 5.0 million for the half-year to 30 June 2005. These payments will be recognized in the Group's income statement as revenues going forward as follows :
(in EUR million) Milestones received in cash but
not yet recognized as
revenues for the half-year
periods ended :
------------------------------------- --------------------------------
June 30, 2006 June 30, 2005
------------------------------------- ------------------ -------------
Total
These will be recognized as revenues
in the future as follows: 94.3 5.0
------------------------------------- ------------------ -------------
In the second half of 2006 4.0 2.4
In 2007 8.0 1.1
In 2008 and beyond 82.3 1.5
------------------------------------- ------------------ -------------
After 30 June 2006, other milestones have been received in cash for a total of EUR 73.6 million in the context of Roche's opt-in To purposefully accept some situation or condition ahead of time. For example, to opt-in to an e-mail campaign means that you want to receive periodic newsletters or information, which may include advertising from the publisher or third parties. for BIM 51077, as well as an additional payment by Medicis within the framework of the Reloxin(R) distribution agreement for the United States, Canada and Japan. In the future, these additional payments will be recognized as revenues in the Group's accounts as follows: EUR 2.6 million in the second half of 2006, EUR 5.5 million in 2007, and EUR 65.5 million in 2008 and beyond. These amounts are additional to the amounts shown in the table above. 2 - CASH FLOW AND CAPITAL FOR THE HALF-YEARS ENDED 30 JUNE 2006 AND 30 JUNE 2005 The consolidated cash flow statement shows a net increase in cash flow of EUR 24.2 million for the first half of 2006, before currency impact, compared to a decrease of EUR 55.6 million for the same period a year ago. In the first half of 2006, the Group generated a strong EUR 130.2 million cash flow from operating activities, against EUR 62.5 million a year earlier. The cash position as at 30 June 2006 benefited from sustained activity during the period as well as from the payment of a EUR 75.5 million (USD90.1 million) milestone by Medicis under the Reloxin(R) distribution licence granted by the Group for the United States, Canada and Japan in the aesthetics indication. Under that same contract, the Group also received from Medicis during the first half of 2006 a down payment of EUR 10 million on the extra payment of USD35 million due from Medicis after the end of negotiations on a potential extension of its distribution activities in Europe. As a result, the Group has reimbursed most of its credit facilities, while keeping open the option of re-using them (for a total of EUR 241.2 million as of 30 June 2006). The Group utilised EUR 25.2 million for its investment transactions and paid out EUR 50.4 million in dividends during the half-year to 30 June 2006. Cash derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: activities amounted to EUR 1.6 million for the period (half-year to 30 June 2005 : nil). ANALYSIS OF THE CASH FLOW STATEMENTS FOR THE HALF-YEARS TO 30 JUNE 2006 AND 30 JUNE 2005
30 June 30 June
2006 2005
(in thousands of euros) pro forma
------------------------------------------------ ---------- ----------
- Cash flow before variation in working
capital requirements 89,558 98,302
- (Increase) decrease in working capital
requirements for operations 40,616 (35,775)
-- Net cash flow generated by operating
activities 130,174 62,527
-- Net cash flow used in investment activities (25,204) (29,741)
-- Net cash flow used in financing activities (82,358) (88,416)
-- Net cash flow provided by discontinued
activities 1,604 -
Increase (decrease) in cash flow for the half-
year 24,216 (55,630)
Cash and cash equivalents at beginning of year 200,564 92,763
Impact of pro forma treatment - (5,583)
Impact of foreign exchange variations (17) 192
------------------------------------------------ ---------- ----------
Cash and cash equivalents at end of half-year 224,763 31,742
------------------------------------------------ ---------- ----------
Net cash flow generated by operating activities During the first half of 2006, cash flow before changes in working capital totalled EUR 89.6 million against EUR 98.3 million for the same period a year ago. This reflects an increase in deferred tax assets mainly due to the deferred tax asset recognized on the milestone of USD90.1 million received from Medicis. Working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. for operating activities declined EUR 40.6 million for the first half of 2006 against an increase of EUR 35.8 million a year ago. This evolution is linked to the following : --The balance between current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. and current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. represents a debt which increased by EUR 58.4 million during the first half of 2006. This increase resulted notably from the collection of payments received from Medicis out of which EUR 83.8 million had not yet been recognised as revenues as at 30 June 2006. This impact has been partially offset by the decrease of other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. and liabilities (linked in particular to partnerships and insurance premiums). --An increase in inventories of EUR 3.4 million and in trade receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed of EUR 30.4 million, mainly resulting from business growth and from the modification A change or alteration in existing materials. Modification generally has the same meaning in the law as it does in common parlance. The term has special significance in the law of contracts and the law of sales. of the payment terms of certain customers in France, were added to the decrease in trade payables Payables Related: Accounts payable of EUR 18.1 million, partly due to the payment during the period of IPO-related fees accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. in 2005 and to an invoicing in·voice n. 1. A detailed list of goods shipped or services rendered, with an account of all costs; an itemized bill. 2. The goods or services itemized in an invoice. tr.v. level from suppliers which was lower than in the fourth quarter of 2005. --Conversely, tax payable increased by EUR 34.1 million, comprising EUR 12.6 million for the taxation resulting from the Medicis payment and EUR 16.7 million in respect of the balance of tax payable related to Group affiliates in France for the first half of 2006. As a result of the above, net cash flow generated by operating activities amounted to EUR 130.2 million for the first half of 2006 against EUR 62.5 million a year ago. Net cash flow used in investment activities Net cash flow used in investment activities amounted to EUR 25.2 million for the first half of 2006 (first half of 2005, EUR 29.7 million). This comprised mainly fixed asset acquisitions, net of disposals, of EUR 14.4 million, against EUR 15.3 million a year ago, as well as a EUR 7.0 million increase in working capital requirements linked to investment activities for the period, compared with an increase of EUR 14.6 million a year ago. Additionally, the Group utilised EUR 2.1 million in the first half of 2006 to fund its liquidity contract on Ipsen shares. During the first half of 2006, tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. fixed asset acquisitions totalled EUR 14.2 million, mostly consisting of capital expenditure required to maintain the Group's industrial facilities, namely EUR 3.6 million for industrial buildings and fittings fit·ting adj. Being in keeping with a situation; appropriate. n. 1. The act of trying on clothes whose fit is being adjusted. 2. A small detachable part for a machine or apparatus. 3. and EUR 4.7 million for machinery, mainly at the Dreux Dreux (drö), town (1990 pop. 35,866), Eure-et-Loir dept., N central France. It is an industrial center where foundry products, boilers, metal products, radio and television equipment, and chemicals are manufactured. and Wrexham Wrexham (rĕk`səm), Welsh Wrescam, town (1981 pop. 39,929) and county borough, 193 sq mi (499 sq km), NE Wales. It lies in the coal field of N Wales. production sites. The increase of EUR 7.0 million for working capital in investing activities during the first half of 2006 is mostly due to the payment during the period of liabilities recorded in 2005 in France. Net cash flow used in financing activities In the half-year to 30 June 2006, net cash flow used in financing activities totalled EUR 82.4 million against EUR 88.4 million a year ago. Following payments received from Medicis, EUR 31.1 million of the Group's credit facilities has been repaid, thus reducing the overdraft A check that is drawn on an account containing less money than the amount stated on the check. The term overdraft is also used in reference to the condition that exists when vouchers as at 30 June 2006 to EUR 6.6 million. In the half-year to 30 June 2005, repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of credit facilities amounted to EUR 70.0 million. The Group still has the option to utilise fully these credit facilities. In the first half of 2006, the Group paid out EUR 50.4 million in dividends, compared with EUR 29.3 million in the same period of 2005. Net cash flow from discontinued activities In the half-year to 30 June 2006, net cash flow from discontinued activities amounted to EUR 1.6 million (half-year to 30 June 2005: nil), resulting from the decrease in working capital requirements linked to primary care activities in Spain, which were divested in October 2005. ANALYSIS OF NET CASH At 30 June 2006, the Group's net cash(1) was EUR 193.3 million, compared with EUR 138.3 million net cash as at 31 December 2005. The Group has four-year credit facilities totalling EUR 241.2 million, out of which only EUR 6.6 million was in use at 30 June 2006, compared with a EUR 37.8 million utilisation as at 31 December 2005. The covenants included in the loan agreements, namely net debt to equity and net debt to EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (2), are irrelevant Unrelated or inapplicable to the matter in issue. Irrelevant evidence has no tendency to prove or disprove any contested fact in a lawsuit. irrelevant adj. in respect of the current positive net cash situation. 3 - SHAREHOLDING STRUCTURE On the basis of available information, Ipsen believes that its shareholding structure as at 30 June 2006 breaks down as follows. On an outstanding basis: Shares held In % ----------------------------------------------------------- ---------- Mayroy 62,162,828 74.0% Board members 14,345 0.0% Employees 1,076,830 1.3% Treasury shares 14,791 0.0% Public 20,755,889 24.7% ----------------------------------------------------------- ---------- Total 84,024,683 100.0% ----------------------------------------------------------- ---------- On the same basis, after full exercise of stock options and bonus shares, Ipsen's shareholding structure would break down as follows: Shares held In % ------------------------------------------- --------------- ---------- Mayroy 60,506,884 71.7% Board members 14,345 0.0% Employees 3,082,774 3.7% Treasury shares 14,791 0.0% Public 20,755,889 24.6% ------------------------------------------- --------------- ---------- Total 84,374,683 100.0% ------------------------------------------- --------------- ---------- (1) Net cash: cash and cash equivalents minus bank overdrafts, bank borrowings and other financial liabilities plus or minus derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. financial instruments (2) EBITDA: Earnings before interest, tax, depreciation and amortisation Noun 1. amortisation - the reduction of the value of an asset by prorating its cost over a period of years amortization reduction, step-down, diminution, decrease - the act of decreasing or reducing something 2.
ANNEX 1
RESUME CONSOLIDATED INCOME STATEMENT
30 June
(in thousand of euros) 30 June 2005 30 June
2006 Pro forma 2005 (1)
(1)
---------------------------------------- --------- --------- ---------
---------------------------------------- --------- --------- ---------
Sales 430,607 404,099 385,694
---------------------------------------- --------- --------- ---------
Other revenues 46,569 45,684 39,992
---------------------------------------- --------- --------- ---------
Total Revenues 477,176 449,783 425,686
---------------------------------------- --------- --------- ---------
Cost of goods sold (88,879) (84,437) (90,227)
---------------------------------------- --------- --------- ---------
Research and Development expenses (83,817) (75,565) (74,110)
---------------------------------------- --------- --------- ---------
Selling expenses (150,608) (141,494) (138,627)
---------------------------------------- --------- --------- ---------
General and administrative expenses (37,392) (32,672) (30,682)
---------------------------------------- --------- --------- ---------
Other operating income and expenses (8,298) 174 1,919
---------------------------------------- --------- --------- ---------
Restructuring cost 189 - -
---------------------------------------- --------- --------- ---------
Impairment losses - - -
---------------------------------------- --------- --------- ---------
Operating income 108,371 115,789 93,959
---------------------------------------- --------- --------- ---------
- Cash ans cash equivalent 2,767 1,089 450
---------------------------------------- --------- --------- ---------
- Cost of financial debt (1,208) (4,378) (4,211)
---------------------------------------- --------- --------- ---------
Net cost of financial debt 1,559 (3,289) (3,761)
---------------------------------------- --------- --------- ---------
Other financial income and expenses (1,202) (1,348) (1,007)
---------------------------------------- --------- --------- ---------
Income taxes (20,280) (22,256) (20,400)
---------------------------------------- --------- --------- ---------
---------------------------------------- --------- --------- ---------
Net profit continuing operations 88,448 88,896 68,791
---------------------------------------- --------- --------- ---------
---------------------------------------- --------- --------- ---------
Discontinued operations (1) 33 683 683
---------------------------------------- --------- --------- ---------
---------------------------------------- --------- --------- ---------
Net profit from continuing operation 88,481 89,579 69,474
---------------------------------------- --------- --------- ---------
- attributable to equity holders of the
parent 88,144 89,368 62,075
---------------------------------------- --------- --------- ---------
- minority interest 337 211 7,399
---------------------------------------- --------- --------- ---------
---------------------------------------- --------- --------- ---------
Basic earnings per share, continuing
operations (in euros) 1.049 1.183 1.048
---------------------------------------- --------- --------- ---------
Diluted earnings per share, continuing
operations (in euros) 1.049 1.183 1.048
---------------------------------------- --------- --------- ---------
---------------------------------------- --------- --------- ---------
Basic earnings per share, discontinuing
operations (in euros) 0.000 0.009 0.011
---------------------------------------- --------- --------- ---------
Diluted earnings per share,
discontinuing operations (in euros) 0.000 0.009 0.011
---------------------------------------- --------- --------- ---------
---------------------------------------- --------- --------- ---------
Basic earnings per share (in euros) 1.049 1.192 1.059
---------------------------------------- --------- --------- ---------
Diluted earnings per share (in euros) 1.049 1.192 1.059
---------------------------------------- --------- --------- ---------
(1) In accordance with IFRS 5, the 2005 income statement has been restated to provide comparable data for the periods presented ANNEX an·nex tr.v. an·nexed, an·nex·ing, an·nex·es 1. To append or attach, especially to a larger or more significant thing. 2. 2 RESUME CONSOLIDATED BALANCE SHEET consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm.
30 June 31
(in thousand of euros) 2006 December
2005
------------------------------------------------- ---------- ---------
ASSET
------------------------------------------------- ---------- ---------
Goodwills 188,836 188,836
------------------------------------------------- ---------- ---------
Other intangible assets, net 38,949 39,800
------------------------------------------------- ---------- ---------
Property, plant and equipment, at cost 186,058 187,769
------------------------------------------------- ---------- ---------
Equity investments 2,260 2,656
------------------------------------------------- ---------- ---------
Other non-current assets 4,485 2,671
------------------------------------------------- ---------- ---------
Non-current financial assets 6,745 5,327
------------------------------------------------- ---------- ---------
Deferred tax assets 48,621 13,096
------------------------------------------------- ---------- ---------
Total non-current assets 469,209 434,828
------------------------------------------------- ---------- ---------
Inventories 77,738 74,390
------------------------------------------------- ---------- ---------
Trade receivables 194,371 164,681
------------------------------------------------- ---------- ---------
Current tax assets 1,532 10,951
------------------------------------------------- ---------- ---------
Other current assets 56,253 42,966
------------------------------------------------- ---------- ---------
cash and cash equivalent 226,155 202,034
------------------------------------------------- ---------- ---------
Total current assets 556,049 495,022
------------------------------------------------- ---------- ---------
Non current assets classified as held for sale 6,052 12,659
------------------------------------------------- ---------- ---------
TOTAL ASSETS 1,031,310 942,509
------------------------------------------------- ---------- ---------
SHAREHOLDER'S EQUITY AND LIABILITIES
------------------------------------------------- ---------- ---------
Share capital 84,025 84,025
------------------------------------------------- ---------- ---------
Share premiums and consolidated reserves 505,702 420,591
------------------------------------------------- ---------- ---------
Profit of the Year 88,144 119,230
------------------------------------------------- ---------- ---------
Cumulative translation reserve (5,176) (4,080)
------------------------------------------------- ---------- ---------
Shareholders' equity attributable to equity
holder of the parent 672,695 619,766
------------------------------------------------- ---------- ---------
Minority interest 1,478 1,334
------------------------------------------------- ---------- ---------
Total Shareholders' equity 674,173 621,100
------------------------------------------------- ---------- ---------
Retirement benefit obligations 8,335 8,032
------------------------------------------------- ---------- ---------
Long-term provisions 9,599 8,266
------------------------------------------------- ---------- ---------
Bank loans 6,621 37,751
------------------------------------------------- ---------- ---------
Other financial liabilities 16,245 15,508
------------------------------------------------- ---------- ---------
Deferred tax liabilities 1,604 1,358
------------------------------------------------- ---------- ---------
Other non-current liabilities 87,079 -
------------------------------------------------- ---------- ---------
Total non-current equivalent 129,483 70,915
------------------------------------------------- ---------- ---------
Short-term provisions 3,138 3,309
------------------------------------------------- ---------- ---------
Bank loans 6,350 7,074
------------------------------------------------- ---------- ---------
Financial liabilities 2,286 1,760
------------------------------------------------- ---------- ---------
Trade payables 88,641 107,045
------------------------------------------------- ---------- ---------
Current tax liabilities 26,916 2,223
------------------------------------------------- ---------- ---------
Other current liabilities 89,522 113,525
------------------------------------------------- ---------- ---------
Bank overdrafts 1,392 1,470
------------------------------------------------- ---------- ---------
Total current liabilities 218,245 236,406
------------------------------------------------- ---------- ---------
Liabilities directly associated with non-current
assets classified as held for sale 9,409 14,088
------------------------------------------------- ---------- ---------
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 1,031,310 942,509
------------------------------------------------- ---------- ---------
ANNEX 3
RESUME CONSOLIDATED STATEMENT OF CASH FLOW
30 June
30 June 2005 30June2005
(in thousand of 'euros) 2006 Pro (1)
forma
(1)
----------------------------------------- -------- -------- ----------
Profit for the period 88,481 89,579 69,474
----------------------------------------- -------- -------- ----------
Profit from discontinued operations (33)
----------------------------------------- -------- -------- ----------
Profit from continuing operations 88,448
----------------------------------------- -------- -------- ----------
Non-cash and non-operating items : - -
----------------------------------------- -------- -------- ----------
- Depreciation, amortization and
impairment losses 19,068 14,167 12,433
----------------------------------------- -------- -------- ----------
- Increase/(decrease) in faire value of
Financial Instruments (264) 436 436
----------------------------------------- -------- -------- ----------
- impairment of goodwill - - -
----------------------------------------- -------- -------- ----------
- Net gains or losses on disposal of non-
current assets (139) 31 14
----------------------------------------- -------- -------- ----------
- Share of investment grant included in
profit and loss (60) (54) -
----------------------------------------- -------- -------- ----------
- Exchange difference 565 (224) (589)
----------------------------------------- -------- -------- ----------
- Change in deferred taxes (20,090) (6,902) (6,994)
----------------------------------------- -------- -------- ----------
- Cost of stock options 1,994 1,269 1,269
----------------------------------------- -------- -------- ----------
- Profit/Loss coming down from own
capital shares disposal 29 - -
----------------------------------------- -------- -------- ----------
- Other transactions of a non-cash nature 7 - -
----------------------------------------- -------- -------- ----------
cash flow from operating activities
before changes in working capital 89,558 98,302 76,043
----------------------------------------- -------- -------- ----------
- (Increase) / decrease in inventories (3,378) (3,810) (6,595)
----------------------------------------- -------- -------- ----------
- (Increase) / decrease in tradre
receivables (30,361) (14,598) (11,786)
----------------------------------------- -------- -------- ----------
- (Decrease) / increase in trade
payables (18,115) (10,374) (11,516)
----------------------------------------- -------- -------- ----------
- net change in income tax liability 34,077 2,563 1,316
----------------------------------------- -------- -------- ----------
- Net change in other operating assets
and liabilities 58,393 (9,556) (7,096)
----------------------------------------- -------- -------- ----------
Variation du besoin en fonds de roulement
lie a l'activite 40,616 (35,775) (35,677)
----------------------------------------- -------- -------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 130,174 62,527 40,366
----------------------------------------- -------- -------- ----------
Acquisition of property, plant &
equipment (14,202) (13,482) (12,720)
----------------------------------------- -------- -------- ----------
Acquisitions of intangible assets (1,473) (2,351) (1,318)
----------------------------------------- -------- -------- ----------
Payments to post-employment benefit plans (1,085) - -
----------------------------------------- -------- -------- ----------
Proceeds from disposal of intangible
assets and property, plant and equipment 1,295 503 475
----------------------------------------- -------- -------- ----------
Acquisition of investments in non-
consolidated companies (40) - -
----------------------------------------- -------- -------- ----------
Own capital shares (385) - -
----------------------------------------- -------- -------- ----------
Impact of changes in the scope of
consolidation - - (51,650)
----------------------------------------- -------- -------- ----------
Other cash-flow related to investing
activities (2,301) 178 129
----------------------------------------- -------- -------- ----------
Change in working capital related to
investing activities (7,013) (14,589) (13,743)
----------------------------------------- -------- -------- ----------
NET CASH USED IN INVESTING ACTIVITIES (25,204) (29,741) (78,827)
----------------------------------------- -------- -------- ----------
Additional long-term borrowings - 11,714 11,712
----------------------------------------- -------- -------- ----------
Repayment of long-term borrowings (31,083) (70,015) (80,995)
----------------------------------------- -------- -------- ----------
Net change in short-term borrowings (724) (648) (648)
----------------------------------------- -------- -------- ----------
Capital increase - - 124,528
----------------------------------------- -------- -------- ----------
Increase of share premiums - - 29,478
----------------------------------------- -------- -------- ----------
Dividends paid by Ipsen S.A. (50,407) (29,303) (29,303)
----------------------------------------- -------- -------- ----------
Dividends paid by subsidiaries to
minority interest (158) (24) (24)
----------------------------------------- -------- -------- ----------
Change of working capital related to
financing activities 14 (140) (2,427)
----------------------------------------- -------- -------- ----------
NET CASH PROVIDED/(USED) IN FINANCING
ACTIVITIES (82,358) (88,416) 52,321
----------------------------------------- -------- -------- ----------
Reported change in cash and cash
equivalent 1,604 - -
----------------------------------------- -------- -------- ----------
THEORETICAL CHANGE IN CASH AND CASH
EQUIVALENT 24,216 (55,630) 13,860
----------------------------------------- -------- -------- ----------
Impact of pro forma restatements - (5,583) -
----------------------------------------- -------- -------- ----------
CHANGE IN CASH AND CASH EQUIVALENTS 24,216 (61,213) 13,860
----------------------------------------- -------- -------- ----------
----------------------------------------- -------- -------- ----------
CASH AND CASH EQUIVALENT AT THE BEGINNING
OF THE YEAR 200,564 92,763 17,742
----------------------------------------- -------- -------- ----------
lmpact of exchange rate fluctuations (17) 192 140
----------------------------------------- -------- -------- ----------
Cash and cash equivalent at the end of
the year 224,763 31,742 31,742
----------------------------------------- -------- -------- ----------
(1) According to IFRS 5, since the Balance sheet as at 30 June 2005 has not been adjusted, the consolidated statement of cash flow at 30 June 2005 has not been adjusted either. |
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