[PPT] - Q4 2015 PRESENTATI ON 24 FEBRUARY 2016 1 HIGHLIGHTS THOMAS PowerPoint Presentation

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Q4 2015 PRESENTATI ON 24 FEBRUARY 2016

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HIGHLIGHTS

THOMAS ELDERED, CEO

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Net sales SEK 863 million, decrease of 1.1%
EBITDA SEK 110 million, decrease of 25%
EBITDA-margin 12.7% , decrease of 4.2% -

points

Continued strong operating cash flow
Long term supply agreement with Alcon and

acquisition in France

Initiated acquisition of Nitin Lifesciences Ltd,

India

Partnerships and strategic investments
Cost and efficiency program in Sweden
Full year profit for the period SEK 215 million,

increase of 34%

Proposed dividend SEK 1.50 per share,

increase of 20%

Equity issue SEK 276 million in Q1 2016

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26 % 59 % 15 %

2014

(1)

HIGHLIGHTS Q4

27 % 51 % 22 %

2015

(1)

D&T strong performance (in spite of less Thyrosafe)
Sterile liquids weaker than our expectations
Solids and others in line with our expectations

Development and Technology Development and Technology Sterile Liquids Sterile Liquids Solids & Other Solids & Other

(1) January-December.

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Long-term supply agreement of
phthalmic blow-fill-seal products for

Alcon

Discontinued packaging only contract

in France

Lyophilisation capacity expansion in

Wasserburg progressed according to plan

Destocking with certain customers

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MANUFACTURING SERVICES - STERILE LIQUIDS

50 100 150 200 250 300 Q1 Q2 Q3 Q4 10 20 30 40 50 60 70 Q1 Q2 Q3 Q4 2015 2014

Net sales

SEKm

EBITDA

SEKm

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Cost and efficiency program in

Swedish operations

Continued effect from major product

volume loss in France

Continued effect from discontinued

distribution

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MANUFACTURING SERVICES - SOLIDS & OTHERS

100 200 300 400 500 600 Q1 Q2 Q3 Q4 10 20 30 40 50 60 70 Q1 Q2 Q3 Q4 2015 2014

Net sales

SEKm

EBITDA

SEKm

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Development collaboration and

investment consortium in Xspray Microparticles AB

Secured long-term supply of Erdostein

to Daewong Pharmaceuticals, Korea

Exclusive scale-up and commercial

manufacture agreement with Lidds AB, including equity investment

Start-up of Israeli chemistry laboratory
Low Thyrosafe sales

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DEVELOPMENT & TECHNOLOGY

50 100 150 200 250 Q1 Q2 Q3 Q4 20 40 60 80 Q1 Q2 Q3 Q4 2015 2014

Net sales

SEKm

EBITDA

SEKm

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GROWTH INITIATIVES ON TRACK

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Growth in existing manufacturing footprint and capacity High growth in strategic important D&T Portfolio outsourcing with asset acquisitions Acquisition of CDMOs

Grow th initiatives Track record 2 0 1 5 YTD

Strengthened sales organisation 2013-14 ~ 3% annual growth (constant FX) + 6 since 2007 2014: Corvette (IT) Lusomedicamenta (PT) Capacity expansion in manufacturing Strong demand for freeze drying 100% utilization Invest EUR 32m (decided 2013) 12% share of total sales 2014

riginate from D&T projects.

16% of Group sales Development of IP portfolio + 3 since 2007 2014: Pessac (FR) Flat organic growth Sequential growth in acquired businesses 92% increase vs. 2014 (9% excluding acquisitions & Thyrosafe) 22% of Group sales Kayserberg (Alcon, FR) Projects under review OT Chemistry (SE) Nitin Lifesciences Ltd (IN) 2016 Projects under review Wasserburg expansion on track SEK 198 M in capex

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LONG-TERM OUTSOURCING CONTRACT WITH ALCON

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Sources: Company filings.

Benefits of the arrangement

Agreement with Alcon, a Novartis company
Long-term outsourcing of a range of
phthalmology products
Concurrent acquisition of a manufacturing

facility in Kaysersberg, France

Approximately 260 employees continue

employment with Recipharm

Completed December 31, 2015

Arrangement Overview

Long-term relation with important customer Alcon/ Novartis Blow-fill-seal adds to sterile technology

ffering

Potential synergies with Recipharm’s other French companies Attractive financial impact, accretive to margins, growth and EPS

Expected annual sales in excess of EUR 36 million
Expected EBITDA-margin well in line with FY2015

group average

Consideration for manufacturing asset was SEK

139 million

Key Financials / Term s

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ACQUISITION OF NITIN LIFESCIENCES

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Sources: Company filings.

Strategic Rationale of the Acquisition

Rapidly growing Indian CMO specialized in

injectables manufacturing

Offers liquid ampoules, liquid vials, sterile dry

powder (beta lactam& non beta lactam), multidose-eye/ ear drops and lyophilized vials

Sales predominantly in India, with growing

export share to currently 11 countries

Approximately 500 employees
Established in 1994

Nitin Lifesciences - Business Overview

Recipharm Standalone Recipharm + Nitin

Significant presence in expanding Indian market and platform for further growth in emerging markets Strengthens position in Steriles with a broad small volume parenteral portfolio Acquisition of a high quality customer base in India and globally Attractive financial impact as acquisition is accretive to margins, growth and EPS

Acquisition of 74% with option for remaining 26%
Purchase price: INR 6,712m (SEK 824m)
Valuation: 12.2x EV/ LTM EBITDA
Preliminary 2015 sales INR 2,946m (SEK 365m)
Preliminary 2015 EBITDA INR 747m (SEK 93m)
Preliminary EBITDA-margin 25%
Completion planned to April 1, 2016

Key Financials / Term s Recipharm ’s Em erging Markets Footprint

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ACQUISITION OF MITIM SRL (ITALY) To be presented later

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FINANCIALS

BJÖRN WESTBERG, CFO

(CURRENCY SEK MILLION)

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P&L DEVELOPMENT

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Q4 YTD

2015 2014 Net Sales 862,9 872,9 EBITDA 111,1 147,3

12,9% 16,9%

D&A

59,1
52,0

EBIT 52,0 95,3 Financial items

5,1
40,6

Profit before tax 46,9 54,7 Tax

17,5
5,7

Net profit 29,4 49,0

2015 2014 Net Sales 3389,4 2569,3 EBITDA 509,8 399,3

15,0% 15,5%

D&A

235,6
127,2

EBIT 274,2 272,1 Financial items 35,4

56,0

Profit before tax 309,6 216,1 Tax

94,6
55,9

Net profit 215,1 160,2

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MANUFACTURING SERVICES – STERILE LIQUIDS

Sales Q4

2014 240 Acquisitions + 7 Others (Disc. packaging FR & destocking) -31 2015 216

EBITDA Q4

2014 64 Acquisitions + 4 Others (lower sales & product mix)

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2015 49

Sales Full year

2014 713 Aquisitions + 260 FX effect + 17 Others

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2015 (+ 34% ) 957

EBITDA Full year

2014 158 Acquisitions + 65 FX effect + 5 Retroactive price increase Q1-14

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Others

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2015 221 EBITDA margin 23.1% (22.1)

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MANUFACTURING SERVICES – SOLIDS AND OTHERS

Sales Q4

2014 491 Acquisition effect (8% ) + 40 FX effect + 6 Distribution services

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Large product - competition in FR

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Others (almost no Thyrosafe) -9 2015 514

EBITDA Q4

2014 61 Acquisition effect

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Cost and efficiency program

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Others (Lower sales & product mix) + 2 2015 39

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Sales Full year

2014 1 578 Aquisitions + 289 FX effect + 31 Distribution services

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Large product – competition in FR

51

Others + 4 2015 1 832

EBITDA Full year

2014 198 Acquisitions + 27 Inventory effect Q1 2014

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One-off internal services 2014

22

Others (Lower sales, product mix)

75

2015 117 EBITDA margin 6.4 (12.6)

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DEVELOPMENT & TECHNOLOGY

Sales Q4

2014 182 Acquisitions + 25 Tender product

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Royalty (reclassified)

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Others + 8 2015 183

EBITDA Q4

2014 36 Acquisitions + 6 Others + 3 2015 45

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Sales Full year

2014 399 Aquisitions + 385 FX effect + 3 Tender product

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Royalty (reclassified)

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Others + 36 2015 767

EBITDA Full year

2014 101 Acquisitions + 102 Others + 19 2015 222 EBITDA margin 28.9 (25.2)

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750 800 850 900

1% CHANGE IN Q4 NET SALES

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3.2%

0.6% 4.6%

1/ 1/ Currency translation effect 2/ Reclassification Royalty (Q4 2014 part of Other operating revenue) 3/ Soldis and Others product facing increased competition in France

8 7 3

785

1.5%
1.1%

785

2/

785

3/

0.5%

8 6 3

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2015 PERFORMANCE

17 1) Net working capital is calculated as I nventory + AR + Prepaid exp&Accr I nc - AP-Accr exp&Prepaid I nc

KPI s 2015 2014 Net Sales (12M) 3 389 2 569 EBITDA (12M) 510 399 EBITDA margin (12M %) 15.0 15.5 Earnings per share (SEK) 4.72 4.63 Ret urn on equit y (%) 8.8 11.4 ROOC (%) 7.6 12.4 Equit y t o asset s (%) 48.1 39.4 Net working capit al t o Sales (%) 18.1 27.3 Net debt (SEKm) 1 183 1 164 Equit y 2 740 2 131 Capit al Employed 3 923 3 295 Net debt t o Equit y 0.4 0.5 Net debt t o EBITDA 2.3 2.9

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REVISED LONG TERM OBJECTIVES

Annual sales should exceed SEK 8 billion by 2020
EBITDA margin should be higher than 16%
Net debt to equity should be less than 0.8
Dividend pay out should be 30-50% of profit after tax (unchanged)

Proposed dividend for 2015 SEK 1.50 per share (1.25), an increase of 20%

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CONTACT INFORMATION

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