REG - Uniphar PLC - 2022 Preliminary Results
28/02/2023 07:00
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RNS Number : 2180R Uniphar PLC 28 February 2023
Uniphar plc
2022 Preliminary Results
Uniphar plc, an international diversified healthcare services business,
announces its full year results for the year ended 31 December 2022,
delivering a strong performance with EBITDA growth of 13.4%, ROCE of 17.3% and
year-end leverage of 1.0x.
FINANCIAL HIGHLIGHTS
Growth
Year ended 31 December 2022 2021 Reported Constant
€'000 €'000 % Currency(2)
%
Revenue 2,070,669 1,943,149 6.6% 6.3%
Gross profit 306,744 274,497 11.7% 10.8%
Commercial & Clinical 117,554 104,398 12.6% 11.5%
Product Access 50,178 41,318 21.4% 18.2%
Supply Chain & Retail 139,012 128,781 7.9% 7.9%
Gross profit margin (Group) 14.8% 14.1%
EBITDA(1) 98,040 86,481 13.4% 12.5%
Operating profit 53,155 45,147 17.7% 17.0%
Profit before tax excluding exceptional items 57,900 50,444 14.8% 14.0%
Net bank debt(1) (91,217) (48,297)
Basic EPS (cent) 16.7 17.8
Adjusted EPS (cent)(1) 18.4 16.2
· Gross profit growth of 11.7% (5.7% organic(3)), reflecting a strong
performance across all divisions with Supply Chain & Retail outperforming
medium-term guidance.
· EBITDA growth of 13.4% to €98.0m (2021: €86.5m). The increase in
EBITDA reflects the strong organic performance of the group, the benefit of
acquisitions, and the investment in our people and infrastructure to support
future growth.
· Adjusted EPS growth of 13.2% to 18.4 cent (2021: 16.2 cent).
· The Group continued to execute strategic and value accretive
acquisitions with four announced in 2022. Total acquisition value, including
potential deferred considerations, amounted to c.€185m for the period.
· Strong liquidity with net bank debt of €91.2m as at 31 December
2022 (2021: €48.3m), reported free cash flow conversion of 82.5% and
leverage remaining low at 1.0x underpinning the Group's disciplined approach
to capital allocation and cash conversion.
· Total dividend for the year of €4.8m (€0.017 per ordinary share)
representing an increase of 5% year-on-year, including a €1.7m interim
(€0.006 per ordinary share) dividend paid in October and a final dividend of
€3.1m (€0.011 per ordinary share) subject to approval at the AGM.
· For 2023, Uniphar expects continued organic gross profit growth
across all divisions and is well positioned to deliver on expectations.
1. Additional information is set out in Alternative Performance
Measures (APMs) section.
2. Constant currency growth is calculated by applying the prior year's
actual exchange rate to the current year's result.
3. Organic growth is calculated as the gross profit growth of the
underlying business in the period adjusting for the contribution
from prior period acquisitions and divestments to ensure a like-for-like
comparison.
STRATEGIC AND OPERATIONAL HIGHLIGHTS
· Our business performed strongly in 2022, leveraging the Group's
scale, leading market positions and diverse platforms to mitigate continued
macro-economic uncertainty and inflationary pressure.
· Strong organic gross profit growth across all divisions, with an
outperformance in Supply Chain & Retail delivering 4.1%, Commercial &
Clinical delivering 7.1% and Product Access delivering 7.0%.
· Increase in gross profit margin to 14.8% from 14.1%, driven by the
full year impact of acquisitions completed in 2021 and the Group's continued
focus on higher margin services.
· Successfully completed integration of 2021 acquisitions including
CoRRect Medical GmbH, BESTMSLs Group, E4H and Devonshire Healthcare Services,
which are delivering in line with expectations.
· During 2022, the Group announced four value accretive acquisitions.
Three completed during the year, and the fourth, McCauley Pharmacy Group,
completed on 31st January 2023:
· Commercial & Clinical Division: Inspired Health ("Inspired"),
headquartered in Boston, MA, is a healthcare insights and intelligence
consultancy. Inspired's market research expertise will enable Uniphar to
evolve its commercialisation offering to enhance its clients' competitiveness
and improve healthcare delivery.
· Product Access Division: Orspec Pharma ("Orspec"), an
Australian-headquartered company with additional hubs in Singapore and New
Zealand, specialises in the supply of unlicensed medicines and the delivery of
Expanded Access Programs across APAC. BModesto Group ("BModesto"),
headquartered in the Netherlands, is a healthcare services business focused on
improving access to pharmaceutical and healthcare products across Europe. The
BModesto and Orspec platforms further accelerates our strategy of becoming a
global leader in providing access to ethically sourced unlicensed and
difficult to source medicines and the delivery of 'Expanded Access Programs'
on a global basis.
· Supply Chain & Retail: McCauley Pharmacy Group ("McCauley"),
headquartered in Dublin, is widely recognised as a leading provider of
pharmacy and retail services in Ireland and a market leader in the delivery of
health, wellbeing, and beauty products. McCauley's expertise in this sector,
combined with its customer-focused digital platforms will further support
Uniphar's consumer business.
· New five-year banking facility completed in August 2022. Three
international banks, Barclays Bank, ING Bank and Citizens Bank joined the
existing syndicate increasing the syndicate to seven banks. This new facility
provides the platform to accelerate our ambitious growth strategy and
acquisition pipeline.
· Strong cash flow performance with reported free cash flow conversion
of 82.5%, demonstrating our continued focus on working capital management.
When adjusted for the impact of temporary timing benefits, free cash flow
conversion remains above our target range of 60-70%. Group leverage remains
low at 1.0x.
· In the Commercial & Clinical division, the diversity of the
MedTech portfolio ensured continued growth in the period. In C&C Pharma we
have established medical affairs capability across Europe with local expertise
covering Germany, Austria, Switzerland, France, Belgium, Luxembourg, Italy,
Ireland and the UK, and near term plans to add Spain and Portugal.
· Product Access was awarded a number of US Expanded Access Programs
(EAPs) representing a significant milestone in the continued geographic growth
of the division. The division continues to target double-digit organic growth
in gross profit over the medium term.
· Supply Chain & Retail division commenced a strategic investment
programme in an Irish-based distribution facility. This multi-year organic
investment in a state-of-the-art facility will unlock further operational
efficiencies and provide the infrastructure to meet growing market demands by
doubling capacity levels and enhancing the division's market leading service
offering.
· Sustainability and governance remain key objectives for the Group and
progress was made across all five sustainability pillars. This was reflected
in continued improvement in external sustainability rankings in 2022;
Sustainalytics ranks Uniphar in the 1st percentile of global healthcare
companies, our MSCI ESG rating improved to "AA" from "A", and our CDP rating
"B" from "C".
Ger Rabbette, Uniphar Group Chief Executive Officer said:
"The Group performed strongly throughout 2022, making further progress against
our financial and strategic objectives. Strong organic profit growth across
all divisions contributed to 13.4% growth in EBITDA, 13.2% growth in adjusted
EPS and a 17.3% ROCE. We also made key investments that will ensure continued,
robust growth into 2023 and beyond.
In Commercial & Clinical we further enhanced our commercial offering,
adding Medical Affairs capability in nine European markets and acquiring
Inspired Health, an innovative market research company.
In Product Access, the acquisitions of BModesto and Orspec expands our reach
in continental Europe and the APAC region and will further accelerate our
growth towards market leadership in the provision of Unlicensed Medicines and
the delivery of Expanded Access Programs globally.
In Supply Chain & Retail our strategic investment in a new distribution
facility and the acquisition of McCauley will further improve our market
leadership position and service offering.
We will continue to apply a disciplined approach to capital deployment both
organically and through M&A where such investment accelerates our
strategic plans and delivers a Return on Capital Employed within or above our
targeted range of 12% - 15% within three years.
Uniphar is an ambitious organisation, and we are confident of delivering on
expectations throughout 2023 and beyond. We remain firmly on track to achieve
our strategic objective of doubling 2018 proforma EBITDA within 5 years of
IPO."
Analyst presentation
A conference call for analysts and investors will be held at 9.00 am (GMT),
today, 28th February 2023. To register for the call please visit
www.uniphar.ie (http://www.uniphar.ie) .
The details for the conference call are as follows: Ireland: +353 (0) 153 695
84, United Kingdom: +44 (0) 20 3936 2999, United States: +1 646 664 1960, all
other locations +44 20 3936 2999.
Access code: 451907
A copy of the presentation and announcement will be available on our website
at the time of the call.
Contact details
Uniphar Group Tel: +353 (0) 1 428 7777
Allan Smylie, Head of Strategy and IR
Davy (Joint Corporate Broker, Nominated Advisor and Tel: +353 (0) 1 679 6363
Euronext Growth Listing Sponsor)
Barry Murphy
Niall Gilchrist
Lauren O'Sullivan
RBC Capital Markets (Joint Corporate Broker) Tel: +44 (0) 20 7653 4000
Jonathan Hardy
Jamil Miah
Stifel Nicolaus Europe Limited (Joint Corporate Broker) Tel: +44 (0) 20 7710 7600
Matt Blawat
Ben Maddison
Francis North
Q4 PR Tel: +353 (0) 1 475 1444
Iarla Mongey, Public Relations Advisor to Uniphar Group
About Uniphar plc
Headquartered in Dublin, Ireland, the Uniphar Group is an international
diversified healthcare services business servicing the requirements of more
than 200 multinational pharmaceutical and medical technology manufacturers
across three divisions - Commercial & Clinical, Product Access and Supply
Chain & Retail. The Group is active in Europe, North America, APAC and
MENA.
The Company's vision is to improve patient access to pharmaco-medical products
and treatments by enhancing connectivity between manufacturers and healthcare
stakeholders. Uniphar represents a strong combination of scale, growth, and
profitability.
Commercial & Clinical
In Commercial & Clinical, the Group provides outsourced sales, marketing
& distribution solutions to multinational pharmaceutical and medical
device manufacturers. Active in Ireland, the UK, Benelux, the Nordics, Germany
and the US, the Group is growing with its clients to provide pan-European
solutions, with a targeted service offering in the US. Uniphar has built fully
integrated digitally enabled customer centric solutions that are supported by
our highly experienced and clinically trained teams, leveraging our digital
technology and insights which allows us to deliver consistently exceptional
outcomes for our clients.
Product Access
In Product Access, the Group is growing two distinct service offerings: 1) "On
Demand", which are pharmacy led solutions for sourcing and supplying
unlicensed medicines to meet the needs of both retail and hospital
pharmacists; and 2) "Exclusive Access", which are manufacturer led solutions
for controlling the release of speciality medicines for specifically approved
patient populations in agreed markets. The Group currently delivers product
access solutions on a global basis.
Supply Chain & Retail
Uniphar is an established market leader in Ireland with c. 53% market share in
the wholesale/hospital market, supported by a network of 423 owned, franchised
and symbol group pharmacies. The business supports the diverse customer base
through the provision of strong service levels coupled with innovative
commercial initiatives. Supply Chain & Retail is an Irish only business
for the Group, although the manufacturer relationships and infrastructure are
also utilised for the benefit of the Commercial & Clinical and Product
Access divisions.
Cautionary statement
This announcement contains certain projections and other forward-looking
statements with respect to the financial condition, results of operations,
businesses, and prospects of the Uniphar Group. These statements are based on
current expectations and involve risk and uncertainty because they relate to
events and depend upon circumstances that may or may not occur in the future.
There are a number of factors which could cause actual results or developments
to differ materially from those expressed or implied by these projections and
forward-looking statements. Any of the assumptions underlying these
projections and forward-looking statements could prove inaccurate or incorrect
and therefore any results contemplated in the projections and forward-looking
statements may not actually be achieved. Recipients are cautioned not to place
undue reliance on any projections and forward-looking statements contained
herein. Except as required by law or by any appropriate regulatory authority,
the Uniphar Group undertakes no obligation to update or revise (publicly or
otherwise) any projection or forward-looking statement, whether as a result of
new information, future events or other circumstances.
Overview
Uniphar has again delivered a strong performance with gross profit growth of
11.7% driven by organic growth of 5.7% combined with the benefit of value
accretive acquisitions completed in 2021. Each division delivered organic
growth, with a particularly strong result from Supply Chain & Retail. We
continue to deliver on our growth strategy, building out our pan-European and
global platforms for Commercial & Clinical and Product Access
respectively, through acquisition and organic growth, while at the same time
investing in our market leading Supply Chain & Retail division.
The positive trajectory of the Group's gross profit margin continued during
the year increasing from 14.1% to 14.8% underpinned by our strategy of scaling
and expanding into higher value, higher margin businesses.
EBITDA has increased by 13.4% (€11.5m) to €98.0m (2021: €86.5m),
reflecting the strong organic gross profit growth across all divisions, the
benefit of acquisitions, and the investment in our teams and our
infrastructure for further growth. This has resulted in strong growth in
adjusted EPS, increasing from 16.2 cent to 18.4 cent, delivering 13.2% growth.
ROCE outperformed our medium-term guidance in 2022 at 17.3% (2021: 17.6%),
demonstrating our disciplined approach to capital allocation and our strong
earnings growth. The investment made during 2022, both from a capital and
acquisitions perspective, will deliver further benefits and growth in the
coming years.
The Group continues to maintain its solid financial position, with a robust
Balance Sheet, and excellent liquidity evident by the strong reported free
cash flow of €80.9m reflecting a free cash flow conversion of 82.5%. When
adjusted for the impact of temporary timing benefits, free cash flow
conversion remains above our target range of 60-70%. The strong free cash flow
performance is driven by continued focus on working capital management.
With a new five-year banking facility in place and the addition of three new
international banking partners, Barclays Bank, ING Bank and Citizens Bank,
joining the existing banking syndicate during the year, the Group is in a
strong position to continue to invest in growth opportunities. Net bank debt
was €91.2m (2021: €48.3m) and leverage remained low at 1.0x, providing a
solid platform to support future growth and investment as opportunities arise.
The Group continues to focus on its strategy of building a pan-European
offering in our Commercial & Clinical division and a global offering in
our Product Access division, both of which enhance our ability to develop new
client relationships and achieve growth. In Supply Chain & Retail, our
management team have a track record of outperforming the market. We will
continue to leverage this valuable experience combined with our sophisticated
digital tools, high-tech infrastructure, and long-standing manufacturer
relationships to grow this division.
Sustainability
Uniphar recognise the importance of being an industry leader in operating in
the most sustainable and socially responsible way possible and places a high
priority on sustainability, sensitive to our impact on the planet, on our
communities and on our people. Continuous development across our five pillars
of sustainability is a key goal for the Board and the Management team.
Progress on these pillars in 2022 was reflected in continued improvement in
external sustainability rankings in 2022; Sustainalytics ranks Uniphar in the
1st percentile of global healthcare companies, our MSCI ESG rating improved to
"AA" from "A", and our CDP rating "B" from "C".
During the year Uniphar launched its Unity@Uniphar initiative, an umbrella for
inclusivity and uniting our workforce for common purposes within our business
and the communities we operate in. Under the Community pillar, as well as
facilitating and supporting many initiatives with local communities and
charities, we ran two major fund-raising initiatives, Unity for Ukraine and
Unity for Hope, working with our customers and suppliers to raise more than
€1 million in funds and medical supplies to alleviate the continued
humanitarian crisis in Ukraine and to support cancer charities around the
world respectively. Our teams also made progress under our environmental
pillar, improving our carbon foot-printing initiatives and focusing on ways to
decarbonise our business. We completed our first Scope 3 assessment,
highlighting the opportunity for a collaborative approach with our suppliers
to reduce our collective impact on the environment.
Current trading and outlook
The Group has entered the year with strong momentum and is trading in-line
with expectations. Whilst cost inflation and rising interest rates are a
challenge, we remain well positioned to deliver organic gross profit growth
across all divisions and to deliver on expectations for the full year.
The Group expects Product Access to return to double digit organic growth in
gross profit in the second half of 2023 and our medium-term divisional
guidance remains unchanged:
· Commercial & Clinical: Mid-single digit
· Product Access: Double-digit
· Supply Chain & Retail: Low-single digit
M&A will continue to play an important part in Uniphar's growth strategy,
and we will continue to have a disciplined approach and manage an active
pipeline of acquisition opportunities to add further scale and breadth to the
existing platform.
We are confident we have the strategy, the market opportunity, the platform,
the competitive edge, and the team in place to deliver on our target of
doubling 2018 pro-forma EBITDA within five years from IPO.
Acquisitions and integration update
During 2022, the Group announced four value accretive acquisitions. Three
completed during the year, and the fourth, McCauley Pharmacy Group, completed
on 31st January 2023 following approval from the Irish Competition and
Consumer Protection Commission (CCPC). These acquisitions are in line with our
growth strategy and further increase our access to the US, European and APAC
markets in addition to strengthening our digital capabilities and
infrastructure.
Commercial & Clinical
Acquisition update
The acquisition of Inspired Health adds capability in healthcare insights and
intelligence consultancy. Using innovative market research techniques,
Inspired assists its life science clients to better understand physicians,
patients, administrators, and payers. These insights are leveraged to assist
clients optimise product innovation and commercialise their assets. Inspired's
market research expertise enables Uniphar to evolve its commercialisation
offering to enhance its clients' competitiveness and improve healthcare
delivery.
Integration update
The 2021 acquisitions of CoRRect Medical, BESTMSLs Group and E4H have been
fully integrated into the Commercial & Clinical division. CoRRect
Medical specialise in the commercialisation and distribution of medical device
products in the interventional cardiology sector across Germany &
Switzerland. Uniphar have brought existing manufacturer relationships to the
German and Swiss markets and have leveraged the highly experienced CoRRect
management team and their local knowledge to launch a number of products, with
more launches to come. BESTMSLs Group provides outsourced medical affairs
services. In addition, The Doctors Channel, a digital platform, delivers
expert medical information condensed into short streaming videos. Medical
Affairs is a fast-growing market due to the increasing complexity, specialty,
and cost of emerging pharmaceutical products. E4H offers a wide range of
digital and communications solutions to the pharmaceutical industry, including
brand and strategy commercialisation, digital development, omni-channel
delivery, engagement, and data analysis. E4H enhances Uniphar's value
proposition of creating a truly differentiated omni-channel offering for
pharmaceutical clients looking to commercialise their brands across Europe.
Product Access
Acquisition update
The acquisition of Orspec adds distribution hubs in Australia, Singapore and
New Zealand. Orspec specialises in the supply of unlicensed medicines and the
delivery of Expanded Access Programs across APAC. This acquisition represents
our first entrance into the APAC region. This was followed by the acquisition
of BModesto, headquartered in the Netherlands. BModesto is focused on
improving access to pharmaceutical and healthcare products across the
Netherlands, Germany, the UK and Europe. Its service offering includes the
distribution of medicines on both an exclusive and on-demand basis, clinical
trial services, market authorisation holder and medical device distribution.
The acquisitions of Orspec and BModesto further accelerates our strategy of
becoming a global leader in providing access to ethically sourced unlicensed
and difficult to source medicines and the delivery of 'Expanded Access
Programs' on a global basis.
Integration update
We have integrated the 2021 acquisition of Devonshire Healthcare Services into
our Product Access division. Devonshire provides access to unlicensed and
difficult to source medicines across the MENA region to a broad variety of
healthcare authorities, hospitals, and overseas ministries of health.
Devonshire has enabled Uniphar to expand its global access into key hospitals
in the MENA region, for the benefit of both its On Demand and Exclusive Access
businesses.
Supply Chain & Retail
Acquisition update
McCauley Pharmacy Group, headquartered in Dublin, is widely recognised as a
leading provider of pharmacy and retail services in Ireland and a market
leader in the delivery of health, wellbeing, and beauty products. McCauley's
expertise in this sector, combined with its customer-focused digital platforms
will further support Uniphar's consumer business.
Principal Risks & Uncertainties
The Group's Risk Management Policy provides the framework to identify, assess,
monitor, and manage the risks associated with the Group's business. It is
designed to enable the Group to meet its business objectives by appropriately
managing, rather than eliminating, these risks.
2022 Highlights
The Group continues to ensure that the Risk Management Framework is integrated
in the day-to-day activities across the business. During the year ended 31
December 2022, the Group carried out the following:
· Reviewed the Group Risk Register, updating for all the key risks
facing the Group at this time;
· Expanded some existing risks to include new factors such as
climate change; and
· Continued to focus on Cybercrime related risks.
In addition to considering our current principal risks, emerging risks are
also considered as part of our overall risk management processes. Management
identifies, assesses, and manages new and emerging risks in the same way as
the Group's principal risks. Emerging risks can arise in two ways for the
Group. The risk can be newly identified as part of the ongoing risk management
process in existence across the Group; or the risk may already be identified
on the Group Risk Register, but its potential impact has changed leading to a
reassessment.
Enhanced focus has been brought to key risk areas in 2022, including
Cybercrime, Environment & Sustainability and the risk associated with
Transformational Project Execution. We continue to monitor these key areas,
and the impact they may have on the Group.
The key principal risks and uncertainties faced by the Group for the year
ended 31 December 2022 are summarised as follows:
Strategic Risks
· Brexit - The post-Brexit environment poses several risks for the
Group due to uncertainty and complexities as to the future fiscal and
regulatory landscape in the UK. This may have a negative impact on supply and
trade, however as the Group has traded through the initial Brexit uncertainty
with Brexit plans in operation, this risk is deemed stable year-on-year.
Brexit also has the potential to create market uncertainty and currency
fluctuations which could impact the translation of our UK operations into the
Group reporting currency.
· Acquisitions - Growth through acquisitions continues to remain a
key strategy for the Group. Failure to identify, complete and integrate
acquisitions successfully may directly impact the Group's projected growth.
· Economic & geopolitical risk - The global macroeconomic,
regulatory, political, and legal environment may impact the markets in which
we operate and in turn our client and supplier base. The ongoing war in
Ukraine combined with rising interest rates, unprecedented cost inflation and
supply chain challenges present increased risk for the Group. This may
adversely affect the Group's financial and operational results.
· Key personnel & succession planning - Failure to attract, retain
and develop the skills and expertise of its people may adversely impact the
Group's performance.
· Market perception & reputational risk - Failure to deliver in line
with market expectations may result in reputational damage, impacting the
Group's ability to achieve its strategic targets.
· Loss of competitive position - Failure of the Group to respond to
any changes in the environment in which it operates may result in loss of
market share, which may put pressure on profitability and margins.
· Environment & sustainability - The increasing global focus on
environmental and sustainability governance is recognised by the Group, and by
its stakeholders. Failure to appropriately assess, monitor and manage the
Group's impact on the environment and the communities in which it operates may
result in reputational damage, impacting the Group's ability to deliver
results.
· Transformational Project Execution - The Group is embarking on several
transformational projects that will provide it with the platform and capacity
to grow over the coming years. Significant transformational programmes bring
inherent risk such as the inability to manage change in the organisation or to
deliver projects within time and budget constraints.
Operational Risks
· Cybercrime - Failure to protect against the ongoing threat of a
cyber-attack could lead to a breach in security, impacting operations,
financial transactions, and sensitive information. The knock-on impact from an
attack on one of our business partners is also an area of risk for the Group.
· IT systems - Digital capabilities are a specific strategic offering
of Uniphar, interruption or downtime may have a negative impact on the Group's
operations, financial, and competitive positions.
· Business interruption - External factors such as natural disasters,
environmental hazard or industrial disputes may result in potential lost sales
and loss of customer loyalty.
· Pandemic risk - The risk from Covid-19 has subsided in recent months
but risk remains that other variants or pandemics may arise in future. Such a
pandemic could severely impact our financial results or cause supply chain
disruption that impacts the business and operations.
· Health & safety - Failure to implement and follow proper health
and safety procedures may have adverse effects on employees or patients.
· Laws, regulations & compliance - Failure to operate under any
of the stringent laws and regulations the Group is subject to could result in
financial penalties, reputational damage, and a risk to business operations.
Financial Risks
· Foreign currency - The Group's reporting currency is Euro. Exposure to
foreign currency is present in the normal course of business, together with
the Group operating in jurisdictions outside of the Eurozone.
· Treasury - The Group is exposed to liquidity, interest rate and
credit risks. The recent increases in interest rates impact the Group in
increasing interest costs against outstanding borrowings.
Operational overview
Commercial & Clinical
Growth
Year ended 31 December Reported Constant
2022 2021 currency
€'000 €'000
Revenue 306,766 299,908 2.3% 1.4%
Gross profit 117,554 104,398 12.6% 11.5%
Gross margin % 38.3% 34.8% +350bps
The Business
Commercial & Clinical provides outsourced sales, marketing, distribution
and consultancy solutions to pharmaceutical and medical device manufacturers
on a pan-European basis with a targeted service offering in the US. The
division is focused on the commercialisation of speciality products to ensure
that patients and their physicians are offered the best treatments for their
conditions. The division has two business units, MedTech and Pharma, both of
which are driven by the mission of ensuring patients have access to the
treatments they need when they need them.
Highlights
Commercial & Clinical delivered a strong performance in 2022 with organic
gross profit growth of 7.1% reinforcing our role as a trusted partner to our
clients and customers. The result in 2022 builds on strong growth in the
division in prior years. The acquisition of Inspired Health, a US based
healthcare insights consultancy business enables the Pharma business unit to
evolve its commercialisation offering to enhance its clients' competitiveness
and improve healthcare delivery. The MedTech business unit continues to focus
on providing fully integrated solutions for our clients who are bringing
innovative medical technologies, including robotic surgery solutions, to the
market.
Key performance highlights include:
· Gross profit growth of 12.6% achieved across the division, of
which 7.1% was organic. Both MedTech and Pharma delivering double digit gross
profit growth.
· Gross profit generated from outside Ireland represents c.60% of
the divisional gross profit.
· Increase in the number of manufacturers represented in more than
one geography to 77 (2021: 67).
· Medical affairs capability established in nine markets across
Europe.
· Completion of the acquisition of Inspired Health which broadens
our service offering into market research and insights.
MedTech
The Commercial & Clinical MedTech business unit offers a fully integrated
solution for our clients in sales, marketing and distribution of medical
devices across interventional cardiology/radiology, orthopaedics,
ophthalmology, minimally invasive surgery, diagnostic imaging and critical
care.
The strength of the MedTech business unit is in the diversity of our portfolio
across market leading and innovative brands and the depth of relationships
with customers and manufacturers. The business continues to focus on bringing
the latest MedTech innovation to customers with robotic surgical technology
being a focus area in 2022. Robotic technology is increasingly being
recognised for its precision and accuracy in surgery that can result in
improved patient outcomes with resulting efficiencies for healthcare
providers. Our clients rely on the expertise of our teams to support them in
transitioning to new technologies and ensuring they are achieving the optimum
benefits from the products we supply. Many of our teams are clinically trained
and our clients trust these peer-to-peer relationships when making investment
decisions.
Relationships are at the centre of MedTech and the business focusses on
expanding relationships with manufacturers across multiple geographies. This
drives the geographic growth of the division and the business is now active in
15 markets and we represent 77 manufacturers across more than one geography
(67 in 2021). In late 2022 the division commenced development of a US based
facility in North Carolina. Due to become operational in mid-2023, the
facility will provide distribution and support services to clients in the US.
Pharma
The Pharma business unit supports pharmaceutical partners in driving the
commercialisation of their products by leveraging data, insights and marketing
solutions to deliver targeted omni-channel programmes. The pharmaceutical
industry is dynamic and constantly changing as manufacturers develop
innovative therapies and seek new methods of commercialising them.
The Pharma industry has traditionally focussed on in-person engagement with
healthcare professionals (HCPs) as the principal means of communication. The
Covid-19 pandemic forced a rapid rethink in the sales and marketing strategies
of pharma companies as in-person engagement was no longer possible. Our Pharma
business unit has supported our clients with digital engagement solutions in
recent years and it is now clear that the future is a hybrid of digital and
in-person engagement. HCPs are increasingly seeking information that is
customised to their interests, delivered in a convenient medium at a time of
their choice rather than mass marketing.
Uniphar's Pharma business unit has built the capability in recent years to
support our clients in this changed environment. Our BestMSLs business offers
expert medical information condensed into short streaming videos through The
Doctors Channel and hosts immersive three-dimensional events online through
The Island platform. The 2021 acquisition of E4H has further enhanced our
ability to deliver targeted digital marketing content. The Pharma business
unit offers a truly differentiated omni-channel solution to clients to enable
them to achieve the commercialisation objectives.
We have also recently established a medical affairs capability across Europe
with local expertise covering Germany, Austria, Switzerland, France, Belgium,
Luxembourg, Italy, Ireland and the UK, and near-term plans to add Spain and
Portugal. This experienced team has launch experience in Rare Disease,
Immunology, Oncology, Haematology, Neurology, Vaccines and Paediatrics and
will support clients launching therapies in European markets that address
unmet needs and deliver the best quality of care for patients.
The acquisition of Inspired Health in 2022 increases Uniphar's capability to
offer market research and commercialisation insights to pharmaceutical and
MedTech manufacturers and further deepens our presence in the strategically
important US market. Inspired Health uses innovative market research
techniques to assist its clients to better understand physicians, patients,
administrators and payors. The acquisition enhances Uniphar's
commercialisation offering to clients and complements our recent US
acquisitions of BestMSLs, Diligent Health Solutions and RRD International.
Outlook
The strong performance of the Commercial & Clinical division demonstrates
the inherent strength of its product offering and the diversity of its
portfolio. The division continues to focus on growing our long-standing
manufacturer relationships into new geographies. Innovation plays an important
role in the continued growth of the division and supporting the deployment of
surgical robotics will drive future growth in MedTech while digital engagement
technologies and consultancy services provide growth opportunities in the
Pharma business unit.
Product Access
Growth
Year ended 31 December 2022 2021 Reported Constant
€'000 €'000 currency
Revenue 206,868 157,152 31.6% 30.0%
Gross profit 50,178 41,318 21.4% 18.2%
Gross profit margin 24.3% 26.3% -200bps
The Business
The Product Access division is focused on ensuring equitable access to
medicines for patients. We partner with manufacturers to provide global reach
and world class execution to get their medicines to the patients that need
them, with many of these being early stage, high tech or otherwise difficult
to source medicines. Our deep industry knowledge and experience coupled with
our digital capabilities enables us to navigate the complex regulatory,
logistical and clinical challenges to get medicines to wherever they are
needed around the world. The Product Access division has two business units,
On Demand and Exclusive Access.
Highlights
Product Access delivered strong gross profit growth of 21.4% in 2022, of which
7.0% was organic. The division made continued progress across several
strategic initiatives. The acquisitions of Orspec Pharma and BModesto
significantly broadens our geographic reach and capability into continental
Europe and APAC. In Exclusive Access, wins in the US and in innovative areas
such as cell and gene therapies reinforce our market leading proposition.
Key performance highlights include:
· 21.4% gross profit growth achieved across the division.
· 10 new exclusive agreements (EAPs) onboarded in the year.
· A number of US EAPs awarded during 2022 representing a
significant milestone in the division's geographic expansion.
· Completion of the acquisitions of Orspec Pharma and BModesto
Group significantly expanding our geographic reach and capability.
On Demand
The On Demand business is a leading supplier of unlicensed and difficult to
source medicines to healthcare providers globally. The increase in the
geographic footprint of the business continued in 2022. The acquisition of
BModesto Group, which expands our reach in continental Europe, the acquisition
of Orspec Pharma, which provides access to the APAC markets, in addition to
the 2021 acquisition of Devonshire Healthcare services, which gives us direct
access to MENA, provides a platform to continue the global growth strategy.
The business was well positioned to respond to the global supply chain
challenges experienced in 2022 that resulted in certain medicines being in
short supply. We worked across multiple geographies and leveraged
relationships with manufacturers to ensure continuity of supply during 2022.
BModesto Group will play an important role in further scaling our European
presence and the acquisition gives us a well-located facility in the
Netherlands from which to supply mainland Europe. The BModesto Group provides
a wide range of services including the distribution of medicines on both an
exclusive and on-demand basis, clinical trial services, market authorisation
holder and medical device distribution. The acquisition of Orspec Pharma,
headquartered in Australia, provides the Group with its first physical
presence in Asia Pacific. Orspec Pharma specialises in the supply of
unlicensed medicines and the delivery of EAP's across the Asia region from its
locations in Australia, New Zealand and Singapore.
Exclusive Access
Expanded Access Programs (EAPs) are increasingly being seen as a valuable step
in the drug approval and commercialisation process to both manufacturers and
patients. Patients gain access to innovative medicines that may not be
available to them through other routes enabling better patient outcomes. EAPs
are used to obtain greater knowledge and understanding of the patient,
medicine and market while enabling the manufacturer to refine and target their
commercialisation strategy.
Uniphar's unique combination of innovative technology, global distribution
capabilities and passionate and experienced people make us a compelling
proposition in global EAP delivery. The Uniphi technology platform has been
developed in recent years and combines patient enrolment with personalised
patient education.
The Exclusive Access business unit has performed well during 2022 and builds
on the momentum achieved in prior years. Investments in the division in recent
years have expanded the capabilities we offer our clients and we have built a
strong reputation in therapeutic areas such as Gene Therapy, Oncology,
Neurology and CAR T-cell Therapy and Transplant.
Winning multiple US-based Expanded Access Programs represents a significant
milestone in the division's continued geographic growth. While the bulk of
growth continues to be from emerging and mid-size biotech firms, the division
continues to focus on attracting EAPs from innovators of all sizes as our
reputation for operational excellence and investment in scalable
infrastructure continues to grow in the market.
Outlook
Covid-19 disruption over the last three years has led to short-term product
development headwinds, product launch deferrals and business development
interruption. While these factors have been a challenge, drug development
pipelines remain strong and will ultimately result in additional opportunities
for the division in the medium term. The division is targeting a return to
double digit organic growth in gross profit in the second half of 2023. Our
recent acquisitions give us a stronger and enlarged On Demand business and
also enhances the attractiveness of our EAP offering by expanding our global
reach. The strength of our integrated model is in our ability to leverage
relationships and infrastructure in other business areas and for other
customers. The acquisitions completed in the year offer considerable
cross-selling opportunities with other business areas. We see 2023 as a year
of continued development of our On Demand and Exclusive Access offerings with
continued investment in digital technology and scalable infrastructure.
Supply Chain & Retail
Growth
Year ended 31 December 2022 2021 Reported Constant
€'000 €'000 currency
Revenue 1,557,035 1,486,089 4.8% 4.8%
Gross profit 139,012 128,781 7.9% 7.9%
Gross profit margin 8.9% 8.7% +20bps
The Business
The Supply Chain & Retail division ensures critical medications are
supplied to pharmacies and hospitals in Ireland every day through an
efficient, timely and secure supply chain. The Supply Chain & Retail
division comprises of our pre-wholesale and wholesale pharmaceutical
distribution business together with a vertically integrated retail offering.
Our Retail offering has c.1,850 community pharmacy customers of which 386
(prior to the acquisition of McCauley Pharmacy Group) are owned, franchised or
supported pharmacies. Uniphar holds c.53% of the wholesale market share and
c.60% hospital market share and is an essential component of the national
health infrastructure in Ireland.
Highlights
The Supply Chain & Retail division delivered an outstanding performance in
2022 with growth achieved in both volume and market share. The proposed
acquisition of Navi Group, which was announced in 2021, will no longer proceed
to completion as it has not been cleared by the CCPC. Navi Group has been a
longstanding partner of Uniphar and both parties will continue to work closely
together to support our shared base of independent community pharmacies. The
acquisition of the McCauley Pharmacy Group, completed in January 2023, further
enhances our presence in the Irish retail market.
Key performance highlights include:
· 7.9% growth in gross profit of which 4.1% is organic growth.
· Commencement of development of our new state-of-the-art
distribution centre in Dublin.
· Acquisition of the McCauley Pharmacy Group completed in January
2023.
· 7% growth in consumer product offering with our agency brands and
own brands performing strongly.
Wholesale
The Wholesale business delivered a very strong performance in the year, with
the main business activity continuing to be centred around the provision of
prescription and OTC (Over the Counter) products to meet the core demand from
our pharmacy customers. Our consumer products offering continued to grow with
the ongoing expansion and development of the range of products and brands
available, which is an important element in offering our customers a "one stop
shop" for all their pharmacy needs.
Shortages of medicines proved to be a challenge during 2022 across Europe as
manufacturers experienced supply chain disruption and unprecedented
inflationary pressures. Product shortages cause operational challenges for
wholesalers as safety stock levels reduced and demand needed to be fairly
allocated. Whilst we are dependent on manufacturers to supply product, our
operational infrastructure proved capable of rapidly delivering product into
the system as quickly and fairly as possible.
During 2022, we commenced investment in a new state-of-the-art distribution
facility in Dublin that will double existing capacity levels. This expanded
capacity will enable us to deliver on our Pharmacy of the Future strategy and,
together with investment in innovative digital solutions, will accelerate our
ability to support our customers to achieve a fully connected pharmacy.
Pre-wholesale
Our pre-wholesale distribution business is a trusted partner of key principal
manufacturers who benefit from our innovative solutions tailored to their
business needs. Growth was achieved in the year from a combination of both
underlying market and business growth. We are supporting our manufacturer
partners in navigating the ongoing Brexit impacts such as new routes to
market. For products continuing to be imported from the UK, we work in
partnership with the manufacturers to ensure the relevant licences and
procedures are in place to ensure the smooth flow of products.
A new four-year IPHA (Irish Pharmaceutical Healthcare Association) agreement
came into effect in 2022 and brought with it market price changes across our
client manufacturer portfolios as we see the growing penetration of biosimilar
products and specific manufacturer products going off patent.
We enter 2023 in a strong position with contract renewals completed with a
number of our long-standing manufacturers and new business opportunities being
progressed with some key client partners.
Retail
2022 has been a strong year for our retail pharmacy business despite the
inflationary challenges being experienced. Across our three retail brands the
business has enjoyed strong volume growth in both dispensed items and consumer
retail with Over The Counter volume in particular being exceptionally strong
during 2022.
One of the biggest challenges for the sector as a whole has been staffing with
pharmacists, technicians and retail staff being difficult to recruit and
retain, with a consequential impact on pharmacist locum costs being a
particular challenge. Despite this, our retail stores continued to deliver for
their customers, supporting them with courtesy, expertise and kindness. In
recognition of this tremendous work within the community all three retail
brands received a number of national retail awards throughout 2022.
In September 2022, Uniphar announced the acquisition of the McCauley Pharmacy
group, with the acquisition completing in January 2023. McCauley's have been a
close partner of the Group for over 50 years and this strategic investment
will add 37 retail pharmacies to the Uniphar network bringing with it a market
leading retail chain along with a growing online business. The McCauley
Pharmacy Group is widely regarded as a leading brand across health, wellbeing
and beauty, and their expertise and advanced digital offering will complement
our fast-growing consumer business in the Supply Chain & Retail division.
Outlook
This division offers significant benefits to the Group's overall capabilities
through our high-tech distribution facilities, our scalable digital
infrastructure, our long-standing manufacturer relationships and our highly
skilled people, who have deep insights into the healthcare eco-system. The
acquisition of the McCauley Pharmacy Group and the development of our new
Dublin distribution facility will create the platform and capacity for the
division to facilitate growth in the future. While the division is present in
Ireland today, the Group continues to review other markets where the
successful Irish model may be replicable.
Summary financial performance
Growth
Year ended 31 December 2022 2021 Reported Constant
€'000 €'000 currency
IFRS measures
Revenue 2,070,669 1,943,149 6.6% 6.3%
Gross profit 306,744 274,497 11.7% 10.8%
Operating profit 53,155 45,147 17.7% 17.0%
Basic EPS (cent) 16.7 17.8
Alternative performance measures
Gross profit margin 14.8% 14.1%
EBITDA 98,040 86,481 13.4% 12.5%
EBITDA % 4.7% 4.5%
Adjusted EPS (cent) 18.4 16.2
Net bank debt (91,217) (48,297)
Return on capital employed 17.3% 17.6%
Revenue
Revenue exceeded €2bn increasing by 6.6% in the year (6.3% constant
currency). The increase was evident across all three divisions and further
supported by acquisitions in each of the divisions, with a particularly strong
performance in the Supply Chain & Retail division.
Gross profit
Gross profit growth of 11.7% (10.8% constant currency) was achieved in the
year through a mix of 5.7% organic growth in addition to the contribution from
acquisitions. Growth was achieved across each of the divisions with a
particularly strong performance in the Supply Chain & Retail division
driven by strong market demand. The Commercial & Clinical division's
result was driven by a strong demand for MedTech products, while Product
Access delivered a solid performance in a market that is still recovering from
the impacts of the pandemic. Gross profit margin has increased from 14.1% to
14.8% reflecting a shift towards higher margin sectors and businesses. In
2022, 32% (2021: 32%) of the Group's gross profit was generated outside of
Ireland reflecting the ongoing expansion of the Group's Commercial &
Clinical and Product Access divisions into new regions.
Divisional gross profit
Growth
Year ended 31 December 2022 2021 Reported Constant Organic
€'000 €'000 Currency
Commercial & Clinical 117,554 104,398 12.6% 11.5% 7.1%
Product Access 50,178 41,318 21.4% 18.2% 7.0%
Supply Chain & Retail 139,012 128,781 7.9% 7.9% 4.1%
306,744 274,497 11.7% 10.8% 5.7%
EBITDA
EBITDA increased by €11.5m to €98.0m which represents growth of 13.4% in
the year (constant currency 12.5%). 2022 saw unprecedented global inflationary
challenges, the EBITDA growth reflects not only organic gross profit growth
and the impact of recent acquisitions but also strong cost management to
ensure the business remains competitive.
Exceptional items
Pre-tax exceptional items in the year amounted to a charge of €3.2m before
tax (2021: €5.4m credit). This includes costs of €16.4m primarily relating
to acquisition, integration, redundancy, and restructuring costs. This was
offset by a release of deferred contingent consideration of €12.1m following
a review of the expected performance against earn-out targets and contractual
obligations and a further €1.4m relating to a revision in discount rates
associated with deferred contingent consideration to reflect the present value
of the future contingent liabilities. In addition there was the release of
refinancing costs relating to the 2020 banking facility of €0.3m. Further
details can be found on Note 4 in the financial statements.
Earnings per share
Basic earnings per share reduced from 17.8 cent to 16.7 cent in 2022. The
decrease is primarily as a result of an increase in exceptional costs in 2022
when compared to 2021. The weighted average number of shares marginally
increased in 2022 reflecting the impact of LTIP shares on which performance
conditions were satisfied.
Adjusted earnings per share is calculated after adjusting for amortisation of
acquisition related intangibles and exceptional costs. The Group's adjusted
earnings per share for 2022 was 18.4 cent (2021: 16.2 cent). Underlying
earnings have increased by 14.3% from €43.8m in 2021 to €50.1m in 2022.
This was partially offset by a 1.1% impact of an increase in the weighted
average number of shares in issue compared to 2021.
Cash flow and net bank debt
The Group delivered a strong cash performance during the year, with a free
cash flow conversion of 82.5% and a net bank debt position of €91.2m (2021:
€48.3m).
Year ended 31 December 2022 2021
€'000 €'000
Net cash inflow from operating activities 82,831 52,177
Net cash outflow from investing activities (106,332) (49,658)
Net cash inflow from financing activities 50,405 13,259
Foreign currency translation movement (1,225) 1,837
Increase in cash and cash equivalents in the year 25,679 17,615
Movement in restricted cash - (3,097)
Non-cash movement in borrowings 14,423 350
Cash flow from movement in borrowings (83,022) (28,746)
Movement in net bank debt (42,920) (13,878)
The Group continues to maintain a strong focus on working capital management
and this is reflected in the cash generated from operating activities of
€82.8m. Free cash flow conversion for the period was 82.5% which exceeds the
medium-term free cash flow conversion target of 60-70%.
The net cash outflow from investing activities of €106.3m principally
consisted of acquisitions completed during the year of €67.2m (net of cash
acquired), capital investment of €19.9m, deferred and deferred contingent
consideration payments of €9.3m and repayment of debt acquired on
acquisition of €9.4m.
The net cash inflow from financing activities of €50.4m was due to a net
increase in borrowings offset by principal lease payments and the payment of
dividends.
Debt refinancing
The Group refinanced its debt facility in August 2022 and entered a new five
year arrangement (with two options to extend by a further one year) which more
than doubled the revolving credit facility to €400m with an additional
uncommitted accordion facility of €150m. Three new international banks
Barclays bank, ING Bank and Citizens bank joined the existing syndicate with a
total of seven participating banks in the renewed facility. Net bank debt was
€91.2m (2021: €48.3m) at year end and leverage remained low at 1.0x. The
expanded facility combined with the low leverage provides the Group with the
platform to support future growth and investment.
Taxation
The Group's tax charge has increased by €1.3m to €9.0m driven largely by
the growth in pre-exceptional profits of the Group. The effective tax rate
before exceptional items has increased from 16.8% to 17.4% reflective of the
contribution of profits from higher tax jurisdictions outside of Ireland. The
effective tax rate is calculated as the pre-exceptional income tax charge for
the year as a percentage of the profit before tax and exceptional items.
Currency exposure
The Group continues to expand into new geographies which, together with the
continued growth in existing geographies outside of the Eurozone results in a
foreign exchange exposure for the Group being the translation of local income
statements and balance sheets into Euro for consolidation purposes.
On a constant currency basis, revenue increased by 6.3% vs 6.6% reported
growth, gross profit increased 10.8% vs 11.7% reported growth and operating
profit increased by 17.0% vs 17.7% reported growth.
2022 2021
Average Average
GBP 0.852 0.860
US Dollar 1.051 1.182
Swedish Krona 10.623 10.145
Return on capital employed (ROCE)
Group ROCE in 2022 of 17.3% (2021: 17.6%) is slightly lower than prior year
reflecting the impact of prior and current year acquisitions as the Group
continues to expand into new geographies and higher value businesses. The
investments made during 2022 are performing well and will deliver further
benefits and growth in the coming years.
Details on how this was calculated are included in the APMs section.
Dividends
The Board remains committed to a progressive dividend policy as stated at the
time of the IPO. The Directors are proposing a final dividend of €3.1m
(€0.011 per ordinary share), subject to approval at the Company's AGM. It is
proposed to pay the dividend on 16 May 2023 to ordinary shareholders on the
Company's register at 5pm on 21 April 2023. Together with the interim dividend
of €1.7m (€0.006 per ordinary share) paid in October 2022 this brings the
total dividend for the year to €4.8m (€0.017 per ordinary share)
representing an increase of 4.8% on 2021.
Group Income Statement
for the year ended 31 December 2022
2022 2022 2022 2021 2021 2021
Pre- Exceptional Pre- Exceptional
exceptional (note 3) Total exceptional (note 3) Total
Notes €'000 €'000 €'000 €'000 €'000 €'000
Revenue 2 2,070,669 - 2,070,669 1,943,149 - 1,943,149
Cost of sales (1,763,925) - (1,763,925) (1,668,652) - (1,668,652)
Gross profit 306,744 - 306,744 274,497 - 274,497
Selling and distribution costs (70,055) - (70,055) (60,712) - (60,712)
Administrative expenses (167,275) (16,415) (183,690) (154,471) (14,404) (168,875)
Other operating income 156 - 156 237 - 237
Operating profit 69,570 (16,415) 53,155 59,551 (14,404) 45,147
Finance (cost)/income 4 (11,670) 13,191 1,521 (9,107) 19,761 10,654
Profit before tax 57,900 (3,224) 54,676 50,444 5,357 55,801
Income tax expense (10,076) 1,106 (8,970) (8,456) 777 (7,679)
Profit for the financial year 47,824 (2,118) 45,706 41,988 6,134 48,122
Attributable to:
Owners of the parent 45,587 48,077
Non-controlling interests 119 45
Profit for the financial year 45,706 48,122
Attributable to:
Continuing operations 45,706 48,122
Profit for the financial year 45,706 48,122
Earnings per ordinary share (in cent):
Continuing operations 16.7 17.8
Basic and diluted earnings per share (in cent) 5 16.7 17.8
Group Statement of Comprehensive Income
for the year ended 31 December 2022
2022 2021
€'000 €'000
Profit for the financial year 45,706 48,122
Other comprehensive income
Items that may be reclassified to the Income Statement:
Unrealised foreign currency translation adjustments (3,356) 6,464
Items that will not be reclassified to the Income Statement:
Actuarial loss in respect of defined benefit pension schemes - (9)
Total comprehensive income for the financial year 42,350 54,577
Attributable to:
Owners of the parent 42,231 54,532
Non-controlling interests 119 45
Total comprehensive income for the financial year 42,350 54,577
Attributable to:
Continuing operations 42,350 54,577
Total comprehensive income for the financial year 42,350 54,577
Group Balance Sheet
as at 31 December 2022
2022 2021
ASSETS Notes €'000 €'000
Non-current assets
Intangible assets - goodwill 7 482,981 423,643
Intangible assets - other assets 7 24,459 22,968
Property, plant and equipment, and right-of-use assets 8 166,628 152,491
Financial assets - Investments in equity instruments 25 25
Deferred tax asset 9,020 1,734
Other receivables 509 388
Total non-current assets 683,622 601,249
Current assets
Inventory 157,656 112,407
Trade and other receivables 164,212 151,778
Cash and cash equivalents 103,704 78,025
Assets held for sale 10 1,600 1,600
Total current assets 427,172 343,810
Total assets 1,110,794 945,059
EQUITY
Capital and reserves
Called up share capital presented as equity 11 21,841 21,841
Share premium 176,501 176,501
Share based payment reserve 718 183
Other reserves 2,008 5,364
Retained earnings 88,476 47,555
Attributable to owners 289,544 251,444
Attributable to non-controlling interests 239 120
Total equity 289,783 251,564
LIABILITIES
Non-current liabilities
Borrowings 12 187,431 124,601
Provisions 13 94,060 90,401
Lease obligations 14 105,919 104,720
Total non-current liabilities 387,410 319,722
Current liabilities
Borrowings 12 7,490 1,721
Lease obligations 14 14,315 14,358
Trade and other payables 407,206 357,694
Corporation tax 4,590 -
Total current liabilities 433,601 373,773
Total liabilities 821,011 693,495
Total equity and liabilities 1,110,794 945,059
Group Cash Flow Statement
for the year ended 31 December 2022
2022 2021
Notes €'000 €'000
Operating activities
Cash inflow from operating activities 16 82,704 68,376
Proceeds from non-recourse financing 15,000 -
Payment of deferred contingent consideration - (1,250)
Interest paid (5,197) (3,118)
Interest paid on lease liabilities 14 (3,644) (3,772)
Corporation tax payments (6,032) (8,059)
Net cash inflow from operating activities 82,831 52,177
Investing activities
Payments to acquire property, plant and equipment - Maintenance (8,299) (8,795)
Payments to acquire property, plant and equipment - Strategic projects (5,657) (1,730)
Receipts from disposal of property, plant and equipment 128 35
Payments to acquire intangible assets - Maintenance (3,448) (3,904)
Payments to acquire intangible assets - Strategic projects (2,517) -
Receipts from disposal of assets held for sale 10 - 350
Payments to acquire subsidiary undertakings (net of cash acquired) (67,248) (26,567)
Repayment of debt acquired on acquisition of subsidiary undertakings (9,420) (352)
(Payments)/receipts on prior year acquisitions (937) 3,428
Payment of deferred and deferred contingent consideration (9,282) (12,323)
Receipt of deferred consideration receivable 348 200
Net cash outflow from investing activities (106,332) (49,658)
Financing activities
Proceeds from borrowings 98,174 42,692
Repayments of borrowings (19,769) (13,946)
Decrease in invoice discounting facilities (9,806) -
Movement in restricted cash - 3,097
Payment of dividends (4,666) (5,731)
Principal element of lease payments (13,192) (12,853)
Acquisition of further equity in subsidiaries (336) -
Net cash inflow from financing activities 50,405 13,259
Increase in cash and cash equivalents in the year 26,904 15,778
Foreign currency translation of cash and cash equivalents (1,225) 1,837
Opening balance cash and cash equivalents 78,025 60,410
Closing balance cash and cash equivalents 15 103,704 78,025
Group Statement of Changes in Equity
for the year ended 31 December 2022
Share Share Share Foreign Revaluation Capital Retained Attributable Total
capital premium based currency reserve redemption earnings to non- shareholders'
payment translation reserve controlling equity
reserve reserve interests
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
At 1 January 2021 21,841 176,501 - (1,860) 700 60 5,218 75 202,535
Profit for the financial year - - - - - - 48,077 45 48,122
Other comprehensive income/(expense):
Re-measurement loss on pensions (net of tax) - - - - - - (9) - (9)
Movement in foreign currency translation reserve - - - 6,464 - - - - 6,464
Transactions recognised directly in equity:
Movement in share based payment reserve - - 183 - - - - - 183
Dividends paid - - - - - - (5,731) - (5,731)
At 31 December 2021 21,841 176,501 183 4,604 700 60 47,555 120 251,564
At 1 January 2022 21,841 176,501 183 4,604 700 60 47,555 120 251,564
Profit for the financial year - - - - - - 45,587 119 45,706
Other comprehensive income/(expense):
Movement in foreign currency translation reserve - - - (3,356) - - - - (3,356)
Transactions recognised directly in equity:
Movement in share based payment reserve - - 535 - - - - - 535
Dividends paid - - - - - - (4,666) - (4,666)
At 31 December 2022 21,841 176,501 718 1,248 700 60 88,476 239 289,783
Notes to the Consolidated Financial Statements
1. General information
Basis of preparation
The 2022 financial statements have been audited, with an unqualified audit
report and have been approved by the Board of Directors. The financial
information set out in this document does not constitute full statutory
financial statements but has been derived from the Group financial statements
for the year ended 31 December 2022. In accordance with the AIM and Euronext
Growth Rules the consolidated financial statements of Uniphar plc and its
subsidiaries (the 'Group') have been prepared in accordance with International
Financial Reporting Standards (IFRS) and interpretations issued by the IFRS
Interpretations Committee (IFRS IC) applicable to companies reporting under
IFRS, as adopted by the EU. The consolidated financial statements comply with
IFRS as issued by the International Accounting Standards Board (IASB), as
adopted by the EU and as applied in accordance with the Companies Acts 2014.
The financial information in the consolidated financial statements has been
prepared on a basis consistent with that adopted for the year ended 31
December 2022.
The Group's consolidated financial statements are prepared for the year ended
31 December 2022. The consolidated financial statements incorporate the
Company and all of its subsidiary undertakings. A subsidiary undertaking is
consolidated by reference to whether the Group has control over the subsidiary
undertaking. The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of
the entity.
Uniphar plc is incorporated in the Republic of Ireland under registration
number 224324 with a registered office at 4045 Kingswood Road, Citywest
Business Park, Co. Dublin, D24 V06K.
The statutory financial statements will be filed with the Companies
Registration Office in line with the Annual Return date.
Going Concern
The Directors have made appropriate enquiries and carried out a thorough
review of the Group's forecasts, projections, and available banking
facilities, taking account of possible changes in trading performance and
considering business risk.
The Group has a robust capital structure with strong liquidity, supported into
the future by the banking facility with a remaining term extending to August
2027 (with two options to extend by a further one year). The Group renewed and
expanded its banking facility during 2022 to provide it with the platform to
fund continued growth.
Having regard to the factors outlined above and noting the financial impact of
the recently announced acquisitions, the Directors have a reasonable
expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future, being a period of 12 months from the
date of approval of these financial statements. As a result, the Directors
consider that it is appropriate to continue to adopt the going concern basis
in preparing the financial statements.
New Standards, Amendments, and Interpretations
The Group has applied the following standards and amendments for the first
time for their annual reporting period commencing 1 January 2022:
· Amendments to IFRS3, 'Business combinations' reference to the
conceptual framework
· Amendments to IAS 16, 'Property, plant and equipment' proceeds before
intended use
· Amendments to IAS 37, 'Provisions, contingent liabilities and
contingent assets' cost of fulfilling a contract
· Annual improvements to IFRS standards 2018-2020
These amendments listed above did not have any impact on the amounts
recognised in prior periods and are not expected to significantly affect the
current or future periods.
The following accounting standards and interpretations have been published
that are not mandatory for 31 December 2022 reporting periods and have not
been early adopted by the Group:
· Amendments to IAS 1, 'Presentation of financial statements', on
classification of liabilities
· Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of
Accounting Policies
· Amendments to IAS 8, Definition of Accounting Estimate
· Amendments to IAS 12, Deferred tax related to assets and
liabilities arising from a single transaction
· IFRS 17 Insurance Contracts
· Amendments to IFRS 16, Lease Liability in a Sale and Leaseback
· Amendments to IAS 1, Non-current Liabilities with Covenants
These standards are not expected to have a material impact in the current or
future reporting periods and on foreseeable future transactions
2. Revenue
2022 2021
€'000 €'000
Revenue 2,070,669 1,943,149
Segmental information
Segmental information is presented in respect of the Group's geographical
regions and operating segments. The operating segments are based on the
Group's management and internal reporting structures.
Geographical analysis
The Group operates in two principal geographical regions being the Republic of
Ireland and the UK. The Group also operates in several European countries, the
US and the Asia Pacific region which are not material for separate
identification.
The following is a geographical analysis presented in accordance with IFRS 8
"Operating Segments" which requires disclosure of information about country of
domicile (Ireland) and countries with material revenue.
2022 2021
€'000 €'000
Ireland 1,765,064 1,672,158
UK 142,157 161,714
Rest of the World 163,448 109,277
2,070,669 1,943,149
Operating segments
IFRS 8 "Operating Segments" requires the reporting information for operating
segments to reflect the Group's management structure and the way the financial
information is regularly reviewed by the Group's Chief Operating Decision
Maker (CODM), which the Group has defined as the Board of Directors.
The Group operates with three divisions, being, Commercial & Clinical,
Product Access, and Supply Chain & Retail. These divisions align to the
Group's operational and financial management structures:
· Commercial & Clinical provide outsourced services,
specifically sales, marketing and multichannel account management to
pharmaco-medical manufacturers, and distribution and support services to
medical device manufacturers. Uniphar offer a fully integrated digitally
enabled customer centric solution that is supported through market data,
insights and digital programmes. We integrate these programmes with our supply
chain and distribution capability to provide a full end-to-end service to
manufacturers;
· Product Access consists of two service offerings, being: On
Demand and Exclusive Access. On Demand provides access to pharmaco-medical
products and treatments, by developing valuable relationships and interactions
between manufacturers and other healthcare stakeholders. This business
operates in both the retail and hospital markets in the Irish, UK, European,
APAC and MENA markets. Exclusive Access provides bespoke distribution
partnerships to pharmaceutical partners around key brands, with new programs
focused on speciality pharmaceutical products. Delivering a unique patient
support program that allows healthcare professionals to connect with patients,
on a global basis; and
· Supply Chain & Retail provides both pre-wholesale and
wholesale distribution of pharmaceutical, healthcare and animal health
products to pharmacies, hospitals and veterinary surgeons in Ireland. Uniphar
operate a network of pharmacies under the Life, Allcare and Hickey's brands.
Additionally, through the extended Uniphar symbol group, the business provides
services and supports that help independent community pharmacies to compete
more effectively.
Operating segments results
The Group evaluates performance of the operational segments on the basis of
gross profit from operations.
2022 2022 2022 2022
Commercial Product Supply Chain Total
& Clinical Access & Retail
€'000 €'000 €'000 €'000
Revenue 306,766 206,868 1,557,035 2,070,669
Gross profit 117,554 50,178 139,012 306,744
2021 2021 2021 2021
Commercial Product Supply Chain Total
& Clinical Access & Retail
€'000 €'000 €'000 €'000
Revenue 299,908 157,152 1,486,089 1,943,149
Gross profit 104,398 41,318 128,781 274,497
The Commercial & Clinical revenue of €306,766,000 (2021: €299,908,000)
consists of revenue derived from
MedTech of €233,203,000 (2021: €208,137,000) and Pharma of €73,563,000
(2021: €91,771,000).
Assets and liabilities are reported to the Board at a Group level and are not
reported on a segmental basis.
3. Exceptional income/(charge)
2022 2021
€'000 €'000
Professional fees including acquisition costs (6,607) (3,339)
Redundancy and restructuring costs (6,165) (4,610)
Acquisition integration costs (3,337) (2,295)
Settlement loss on closure of defined benefit pension scheme - (211)
Foreign exchange revaluation of deferred contingent consideration - (1,373)
Cessation of supplier contracts - recovery/(inventory write off) 115 (1,754)
Other exceptional costs (421) (822)
Exceptional charge recognised in operating profit (16,415) (14,404)
Decrease in deferred contingent consideration 12,030 19,761
Decrease in deferred acquisition consideration 109 -
Change in discount rates on deferred contingent consideration 1,405 -
Refinancing costs impairment (353) -
Exceptional credit recognised in finance cost 13,191 19,761
Exceptional credit recognised in income tax 1,106 777
Total exceptional (charge)/income (2,118) 6,134
Professional fees including acquisition costs
Professional fees including acquisition costs relate to costs incurred in
relation to acquisitions and include third party fees.
Redundancy & Restructuring:
Redundancy and restructuring costs are primarily redundancy and ex gratia
termination costs arising on reorganisations and recent acquisitions.
Acquisition integration costs:
Acquisition integration costs relate to professional fees incurred on the
integration of recent acquisitions into the expanded Group and payments made
to staff agreed as part of the RRD International acquisition which are not
classified as consideration.
Cessation of supplier contracts:
Cessation of specific MedTech supplier contracts in 2021 relating to the
supply of PPE and decontamination equipment giving rise to inventory write
offs. A portion of this write off was recovered in 2022 resulting in a credit
to the Income Statement.
Deferred and deferred contingent consideration:
Deferred contingent consideration relates to a release of €12,030,000
following a review of expected performance against earn out contractual
targets in relation to Diligent Health Solutions (€6,530,000) and EPS Group
(€5,500,000).
In the prior year, deferred contingent consideration relates to a release of
€21,739,000 following a review of expected performance against earn out
contractual targets in relation to the Durbin Group, and a release of
€2,853,000 due to the completion of the earnout period and contractual terms
in relation to the Sisk Healthcare Group. In addition, a provision of
€4,831,000 has been recognised in respect of increased deferred contingent
consideration payable in relation to the EPS Group.
Change in discount rates on deferred contingent consideration
The deferred contingent consideration liability at 31 December 2022 has been
revised using updated discount rates reflecting an increase in the discount
rate applied to compute the present value of the liability resulting in a
credit of €1,405,000 to the Income Statement.
Refinancing costs
The Group entered a new and enlarged borrowing facility in August 2022 ahead
of the expiration of the previous facility. As the previous facility has been
superseded, the remaining fees capitalised in respect of it have been charged
to the Income Statement in the year.
4. Finance cost/(income)
2022 2021
€'000 €'000
Interest on lease obligations 3,644 3,772
Interest payable on borrowings and non-recourse financing 5,646 3,154
Fair value adjustment to deferred and deferred contingent consideration 2,137 1,915
Amortisation of refinancing transaction fees 339 303
Interest receivable (96) (37)
Finance cost before exceptional credit 11,670 9,107
Decrease in fair value deferred contingent consideration (note 3) (13,544) (19,761)
Refinancing costs (note 3) 353 -
Exceptional credit recognised in finance cost (13,191) (19,761)
Total finance (income)/cost (1,521) (10,654)
Finance costs do not include capitalised borrowing costs of €66,000 (2021:
€nil) on qualifying assets (note 7 and 8). Interest is capitalised at the
Group's weighted average interest rate for the period 2.1% (2021: nil).
5. Earnings per share
Basic and diluted earnings per share have been calculated by reference to the
following:
2022 2021
Profit for the financial year attributable to owners (€'000) 45,587 48,077
Weighted average number of shares ('000) 272,557 269,752
Earnings per ordinary share (in cent):
- Basic 16.7 17.8
- Diluted 16.7 17.8
Adjusted earnings per share has been calculated by reference to the following:
2022 2021
€'000 €'000
Profit for the financial year attributable to owners 45,587 48,077
Exceptional charge recognised in operating profit (note 3) 16,415 14,404
Exceptional credit recognised in finance costs (note 3) (13,191) (19,761)
Exceptional credit recognised in income tax (1,106) (777)
Tax credit on acquisition related intangibles (329) (207)
Amortisation of acquisition related intangibles 2,708 2,063
Profit after tax excluding exceptional items 50,084 43,799
Weighted average number of shares in issue in the year (000's) 272,557 269,752
Adjusted basic and diluted earnings per ordinary share (in cent) 18.4 16.2
The weighted average number of ordinary shares includes the effect of
6,543,620 shares (2022: 2,822,264 on a weighted basis) (2021: 6,218,620 shares
(3,663,023 on a weighted basis)) granted under the LTIP that have met the
share price performance conditions, but will not vest until 31 December 2024.
There is no impact on the weighted average number of ordinary shares granted
under new senior management share option schemes in the year (2021: 16,964
shares).
6. Dividends
The Directors have proposed a final dividend of €3.1m (€0.011 per ordinary
share), subject to approval at the AGM. This results in a total shareholders
dividend of €4.8m (€0.017 per ordinary share) in respect of the year ended
31 December 2022 as the Board declared and paid a 2022 interim dividend of
€1.7m (€0.006 per ordinary share). If approved, the proposed dividend will
be paid on 16 May 2023 to ordinary shareholders on the Company's register on
21 April 2023. This dividend has not been provided for in the Balance Sheet at
31 December 2022, as there was no present obligation to pay the dividend at
year end.
A final dividend of €3.0m (€0.011 per ordinary share) relating to 2021 was
paid in May 2022.
7. Intangible assets
Computer Trademark & licences Goodwill Technology asset Brand name Customer Relationships Total
software €'000 €'000 €'000
€'000 €'000 €'000 €'000
Cost
At 1 January 2022 36,180 153 442,352 2,914 11,238 3,126 495,963
FX movement (36) - (1,509) 133 - 196 (1,216)
Acquisitions (note 18) 328 36 60,847 - - - 61,211
Additions 5,965 - - - - - 5,965
Disposals/retirements (490) - - - - - (490)
At 31 December 2022 41,947 189 501,690 3,047 11,238 3,322 561,433
Amortisation
At 1 January 2022 28,127 153 18,709 419 1,215 729 49,352
FX movement (9) - - (10) - 36 17
Amortisation 2,405 1 - 910 1,124 674 5,114
Disposals/retirements (490) - - - - - (490)
At 31 December 2022 30,033 154 18,709 1,319 2,339 1,439 53,993
Net book amounts
At 31 December 2021 8,053 - 423,643 2,495 10,023 2,397 446,611
At 31 December 2022 11,914 35 482,981 1,728 8,899 1,883 507,440
Intangible assets 10,775 35 482,981 1,728 8,899 1,883 506,301
Right-of-use assets 1,139 - - - - - 1,139
At 31 December 2022 11,914 35 482,981 1,728 8,899 1,883 507,440
Included in the cost of additions for 2022 is €9,000 (2021: €nil) incurred
in respect of borrowing cost capitalised into Computer Software.
8. Property, plant and equipment, and right-of-use assets
Freehold Leasehold Plant and Fixtures and Computer Motor Instruments Total
land and improvements equipment fittings equipment vehicles
buildings
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Cost
At 1 January 2022 135,705 14,149 29,620 13,045 7,099 8,336 5,012 212,966
Foreign exchange movement (409) (37) (122) (119) (6) (103) - (796)
Additions 5,951 2,084 11,260 2,378 956 2,059 2,121 26,809
Acquisitions (note 18) 10,195 - 661 312 18 489 - 11,675
Disposals/retirements (1,770) (13) (1,757) (1,424) (1,325) (2,956) (565) (9,810)
At 31 December 2022 149,672 16,183 39,662 14,192 6,742 7,825 6,568 240,844
Accumulated depreciation
At 1 January 2022 24,930 3,139 15,843 5,847 4,271 4,052 2,393 60,475
Foreign exchange movement (150) (24) (100) (82) (15) (53) - (424)
Charge for the year 11,334 1,520 3,396 1,884 1,116 2,487 1,619 23,356
Disposals/retirements (1,557) (13) (1,742) (1,404) (1,275) (2,635) (565) (9,191)
At 31 December 2022 34,557 4,622 17,397 6,245 4,097 3,851 3,447 74,216
Net book amounts
At 31 December 2021 110,775 11,010 13,777 7,198 2,828 4,284 2,619 152,491
At 31 December 2022 115,115 11,561 22,265 7,947 2,645 3,974 3,121 166,628
Property, plant & equipment 7,847 11,561 21,987 7,947 2,645 533 3,121 55,641
Right-of-use assets 107,268 - 278 - - 3,441 - 110,987
Net book value at 31 December 2022 115,115 11,561 22,265 7,947 2,645 3,974 3,121 166,628
Included in property, plant and equipment are assets under construction with a
net book value of €10,708,000 (2021: €1,555,000). Depreciation has not
commenced on these assets.
Included in the cost of additions for 2022 is €57,000 (2021: €nil)
incurred in respect of borrowing costs capitalised into assets
9. Employee benefit surplus
The remaining defined benefit plan was wound up in March 2021, the pension
entitlements of employees, including Executive Directors, now arise under a
number of defined contribution schemes and are secured by contributions by the
Group to separate trustee administered pension funds. In 2021, a settlement
loss of €211,000 was recognised on the closure of the Cahill May Roberts
Group Pension Scheme. The assets of the scheme were distributed in line with
members chosen options and no assets or liabilities remain.
The defined benefit scheme was:
· The Cahill May Roberts Limited Contributory Pension Plan (wound up in
March 2021)
The pension charge for the year is €4,058,000 (2021: €4,313,000) which
relates to the defined contribution schemes.
10. Assets held for sale
Properties Total
€'000 €'000
At 1 January 2022 1,600 1,600
At 31 December 2022 1,600 1,600
During 2022, the Group disposed of €nil (2021: €350,000) of property which
were previously held for sale. There was no impairment on the value of the
remaining property (2021: €350,000) nor was there a corresponding write down
of the associated bank borrowings (2021: €350,000). The remaining property
held for sale is available for immediate sale in its present condition subject
to terms that are usual and customary for property of this nature. The
property is being actively marketed and the Group is committed to its plan to
sell this property in an orderly manner.
11. Called up share capital presented as equity
2022
€'000
Authorised:
453.2 million (2021: 453.2 million) ordinary shares of 8c each 36,256
16.0 million (2021: 16.0 million) "A" ordinary shares of 8c each 1,280
37,536
Movement in the year in issued share capital presented as equity
Allotted, called up and fully paid ordinary shares
At 1 January - 273,015,254 ordinary shares of 8c each 21,841
At 31 December - 273,015,254 ordinary shares of 8c each 21,841
Total allotted share capital:
At 31 December - 273,015,254 (2021: 273,015,254) ordinary shares 21,841
There have been no changes to the authorised or issued share capital in either
2022 or 2021.
12. Borrowings
Bank loans are repayable in the following periods after 31 December:
2022 2021
€'000 €'000
Amounts falling due within one year 7,490 1,721
Amounts falling due between one and five years 187,431 124,601
194,921 126,322
The Group's total bank loans at 31 December 2022 were €194,921,000 (2021:
€126,322,000). Borrowing under invoice discounting (recourse) as at the
balance sheet date was €5,890,000 (2021: €Nil). Bank loans falling due
within one year include €1,600,000 (2021: €1,600,000) of loans arising on
the acquisition of Bradley's Pharmacy Group which are secured by properties
acquired on the acquisition which are classified as held for sale. Following
the disposal of these properties these loans are required to be repaid (note
10).
The Group entered into a new facility in August 2022. The total loan value of
the revolving credit facility available for use within this agreement is
€400,000,000, with an additional uncommitted accordion facility of
€150,000,000. This facility runs for five years to 2027 with two options to
extend by a further one year with repayment of all loans on termination of the
facility in August 2027.
At 31 December 2022, the Group's revolving credit facility loans in use were
at an interest margin of +1.5% (2021: +1.5%) on inter-bank interest rates
(EURIBOR, GBP SONIA and USD SOFR).
Bank security
Bank overdrafts (including invoice discounting) and bank loans of
€194,921,000 (2021: €126,322,000) are secured by cross guarantees and
fixed and floating charges from the Company and certain subsidiary
undertakings.
13. Provisions
Deferred Lease Warranty Other Total
contingent dilapidation provision
consideration
€'000 €'000 €'000 €'000 €'000
At 1 January 2022 88,918 523 77 883 90,401
Recognised during the year - - 64 1,665 1,729
Unwinding of discount 2,073 - - - 2,073
Arising on acquisition 17,519 - - - 17,519
Utilised during the year (5,127) - - (952) (6,079)
Released during the year (12,030) (35) - - (12,065)
Change in discount rate (1,405) - - - (1,405)
Foreign currency movement 1,850 - (8) 45 1,887
At 31 December 2022 91,798 488 133 1,641 94,060
Deferred contingent consideration
Deferred contingent consideration represents the present value of deferred
contingent acquisition consideration which would become payable based on
pre-defined profit thresholds being met. During the year payments of
€5,127,000 (2021: €13,283,000) were made in respect of prior year
acquisitions. Deferred contingent consideration of €12,030,000 (2021:
€24,592,000) in respect of prior year acquisitions were released in the year
following a review of expected performance against earn-out targets. The
discount rates used to discount the provisions to present value were updated
at 31 December 2022 resulting in a credit of €1,405,000 being recognised as
an exceptional item in the 2022 Income Statement (2021: €nil). Further
details on the measurement of deferred contingent consideration is provided in
note 17.
Lease dilapidation
The lease dilapidation provision covers the cost of reinstating certain Group
properties at the end of the lease term. This is based on the terms of the
individual leases which set out the conditions relating to the return of
property. The timing of the outflows will match the ending of the relevant
leases with various dates up to 2049.
Warranty provision
The warranty provision relates to a product warranty provided to customers on
certain medical devices. The estimated cost of the warranty is provided for
upon recognition of the sale of the product. The costs are estimated based on
actual historical experience of expenses incurred and on estimated future
expenses related to current sales and are updated periodically. Actual
warranty costs are charged against the warranty provision.
Other
Other provisions relate to a management retention bonus payable in relation to
the acquisition of RRD International, LLC in 2020.
14. Leases
(i) Amounts recognised in the Balance Sheet
As at 31 December, the Balance Sheet shows the following amounts relating to
leases:
2022 2021
€'000 €'000
Right-of-use assets:
Buildings 107,268 105,766
Plant and equipment 278 686
Motor vehicles 3,441 4,196
Computer software 1,139 1,519
Net book value of right-of-use assets 112,126 112,167
Lease liabilities:
Current 14,315 14,358
Non-current 105,919 104,720
Total lease liabilities 120,234 119,078
Right-of-use assets are included in the lines 'Intangible assets' and
'Property, plant and equipment, and right-of-use assets' on the Balance Sheet,
and are presented in notes 7 and 8.
Additions to the right-of-use assets during the year ended 31 December 2022
were €7,961,000 (2021: €9,519,000).
Lease liabilities are presented separately on the face of the Balance Sheet.
(ii) Amounts recognised in the Income Statement:
The Income Statement shows the following amounts relating to leases:
2022 2021
€'000 €'000
Depreciation/amortisation charge on right-of-use assets:
Buildings 11,131 10,657
Plant and equipment 414 548
Motor vehicles 2,434 2,660
Right-of-use assets depreciation charge 13,979 13,865
Computer software 380 380
Right-of-use assets amortisation charge 380 380
Interest on lease obligations (note 4) 3,644 3,772
Principal repayments 13,192 12,853
Total cash outflow in respect of leases 16,836 16,625
15. Analysis of net debt
2022 2021
€'000 €'000
Cash and cash equivalents 103,704 78,025
103,704 78,025
Bank loans repayable within one year (7,490) (1,721)
Bank loans payable after one year (187,431) (124,601)
Bank loans (194,921) (126,322)
Net bank debt (91,217) (48,297)
Lease obligations (120,234) (119,078)
Net debt (211,451) (167,375)
16. Reconciliation of operating profit to cash flow from operating activities
2022 2021
€'000 €'000
Operating profit before operating exceptional items 69,570 59,551
Cash related exceptional items (7,768) (9,072)
61,802 50,479
Depreciation 23,356 22,225
Amortisation of intangible assets 5,114 4,705
(Increase)/decrease in inventory (15,130) 3,726
Decrease/(increase) in receivables 2,934 (26,169)
Increase in payables 2,700 13,205
Share based payment expense 535 183
Foreign currency translation adjustments 1,393 22
Cash inflow from operating activities 82,704 68,376
17. Financial instruments
Financial instruments by category
The accounting policies for financial instruments have been applied to the
line items below:
Financial Financial Total Fair
assets at assets at value
FVOCI* amortised
cost
€'000 €'000 €'000 €'000
Financial assets
31 December 2022:
Investments in equity instruments 25 - 25 25
Trade and other receivables ** - 146,814 146,814 146,823
Deferred consideration receivable - 100 100 100
Cash and cash equivalents - 103,704 103,704 103,704
25 250,618 250,643 250,652
* Fair value through other comprehensive income.
** Excluding prepayments and accrued income.
Financial Financial Total Fair
liabilities at liabilities at value
FVTPL*** amortised
cost
€'000 €'000 €'000 €'000
Financial liabilities
31 December 2022:
Borrowings - 194,921 194,921 194,921
Deferred acquisition consideration - 523 523 523
Trade and other payables **** - 236,238 236,238 236,238
Deferred contingent consideration 91,798 - 91,798 91,798
Lease liabilities - 120,234 120,234 120,234
91,798 551,916 643,714 643,714
*** Fair value through profit and loss.
**** Excluding non-financial liabilities.
Measurement of fair values
In the preparation of the financial statements, the Group finance department,
which reports directly to the Chief Financial Officer (CFO), reviews and
determines the major methods and assumptions used in estimating the fair
values of the financial assets and liabilities which are set out below:
Investments in equity instruments
Investments in equity instruments are measured at fair value through other
comprehensive income (FVOCI).
Trade and other receivables/trade and other payables
For receivables and payables with a remaining life of less than 12 months or
demand balances, the carrying value less impairment provision where
appropriate, is deemed to reflect fair value.
Cash and cash equivalents, including short-term bank deposits
For short-term bank deposits and cash and cash equivalents, all of which have
a remaining maturity of less than three months, the carrying amount is deemed
to reflect fair value.
Interest-bearing loans and borrowings
For floating rate interest-bearing loans and borrowings with a contractual
repricing date of less than 6 months, the nominal amount is deemed to reflect
fair value. For loans with repricing dates of greater than 6 months, the fair
value is calculated based on the present value of the expected future
principal and interest cash flows discounted at appropriate market interest
rates (level 2) effective at the Balance Sheet date and adjusted for movements
in credit spreads.
Deferred acquisition consideration
Discounted cash flow method was used to capture the present value of the
expected future economic benefits that will flow out of the Group arising from
the deferred acquisition consideration.
Deferred contingent consideration
The fair value of the deferred contingent consideration is calculated by
discounting the expected future payment to the present value. The expected
future payment represents the deferred contingent acquisition consideration
which would become payable based on pre-defined profit thresholds being met
and is calculated based on management's best estimates of the expected future
cash outflows using current budget forecasts. The provision for deferred
contingent consideration is principally in respect of acquisitions completed
from 2015 to 2022.
The significant unobservable inputs are:
· Expected future profit forecasts which have not been disclosed
due to their commercial sensitivities; and
· Risk adjusted discount rate of between 2.5% and 4% (2021: 2% and
3%).
For the fair value of deferred contingent consideration, a 1% increase in the
risk adjusted discount rate at 31 December 2022, holding the other inputs
constant would reduce the fair value of the deferred contingent consideration
by €1.5m. A 1% decrease in the risk adjusted discount rate would result in
an increase of €1.5m in the fair value of the deferred contingent
consideration.
Fair value hierarchy
The following table sets out the fair value hierarchy for financial
instruments which are measured at fair value.
Level 1 Level 2 Level 3 Total
€'000 €'000 €'000 €'000
Recurring fair value measurements
At 31 December 2022
Investments in equity instruments - - 25 25
Deferred contingent consideration - - (91,798) (91,798)
- - (91,773) (91,773)
There were no transfers between the fair value levels for recurring fair value
measurements during the period. The Group's policy is to recognise transfers
into and transfers out of fair value hierarchy levels as at the end of the
reporting period.
Level 1: The fair value of financial instruments traded in active markets is
based on quoted market prices at the end of the reporting period. The quoted
market price used for financial assets held by the Group is the current bid
price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an
active market is determined using valuation techniques which maximise the use
of observable market data and rely as little as possible on entity-specific
estimates. If all significant inputs required to fair value an instrument are
observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable
market data, the instrument is included in level 3.
Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in level 3 items for the year ended
31 December 2022:
Shares in Deferred Total
unlisted contingent
companies consideration
€'000 €'000 €'000
At 1 January 2022 25 (88,918) (88,893)
Utilised during the year - 5,127 5,127
Changes in discount rate* - 1,405 1,405
Unwinding of discount* - (2,073) (2,073)
Arising on acquisition - (17,519) (17,519)
Released during the year * - 12,030 12,030
Foreign currency movement - (1,850) (1,850)
At 31 December 2022 25 (91,798) (91,773)
* These amounts have been credited/(charged) to the Income Statement in
finance (income)/costs.
Deferred contingent consideration is provided based on management's assessment
of the fair value of the liability taking into account the expected
profitability of the acquisition. The maximum amount of additional Deferred
contingent consideration not provided for in the financial statements is
€60,300,000 assuming the acquisitions satisfy all performance conditions as
set out in their acquisition.
Financial risk management
The Group's operations expose it to various financial risks. The Group has a
risk management programme in place which seeks to limit the impact of these
risks on the financial performance of the Group and it is the Group's policy
to manage these risks in a non-speculative manner.
The Group has exposure to the following risks from its use of financial
instruments: credit risk, liquidity risk, currency risk, interest risk and
price risk. These consolidated financial statements do not include all
financial risk management information and disclosures required in the annual
financial statements; they should be read in conjunction with the Group's
Annual Report.
Under the terms of the invoice discounting non-recourse agreement, the Group
has transferred substantially all credit risk and control of certain trade
receivables. The balance of the facility as at 31 December 2022 is
€111,765,000 (2021: €94,118,000). During the year ended 31 December 2022,
the Group increased its non-recourse facility by €15,000,000 (2021: €nil).
The Group has recognised an asset within trade and other receivables of
€16,765,000 (2021: €14,118,000), being the fair value of the amount
receivable from the financial institutions, representing 15% of the trade
receivables transferred to the financial institutions in accordance with the
terms of the receivables purchase arrangement. Total interest expense
associated with this receivables purchase agreement during the year ended 31
December 2022 was €1,866,000 (2021: €1,296,000).
18. Acquisitions of subsidiary undertakings and business assets
A key strategy of the Group is to expand into higher growth sectors and extend
the capabilities the Group can offer our clients. In line with this strategy,
the Group completed the following acquisitions during the financial year:
· Chansey Holdings Limited & Edenmore Pharmacy Limited
The Group acquired 100% of the ordinary share capital of Chansey Holdings
Limited & Edenmore Pharmacy Limited in January 2022 for consideration of
€4,356,000. Chansey Holdings Limited & Edenmore Pharmacy Limited
currently operates three independent retail pharmacies in Ireland.
· Boxted Limited
The Group acquired 100% of the ordinary share capital of Boxted Limited in
February 2022 for consideration of €1,716,000. Boxted Limited currently
operates an independent retail pharmacy in Ireland.
· Dr Hauschka Limited
The Group acquired 100% of the ordinary share capital of Dr Hauschka Limited
in March 2022 for consideration of €1,541,000. Dr Hauschka Limited is a
distributor of skincare products to pharmacies and health stores in Ireland.
· Lanesra Pharmacy Limited
The Group acquired 100% of the ordinary share capital of Lanesra Pharmacy
Limited in May 2022 for consideration of €4,339,000. Lanesra Pharmacy
Limited currently operates an independent retail pharmacy in Ireland.
· Mainarch Limited
The Group acquired 100% of the ordinary share capital of Mainarch Limited in
June 2022 for consideration of €1,980,000. Mainarch Limited currently
operates an independent retail pharmacy in Ireland.
· Orpsec Pharma Group
The Group acquired 100% of the ordinary share capital of Orspec Pharma Pty
Limited in August 2022 for consideration of €6,664,000 of which €454,000
is deferred and €3,836,000 is deferred and contingent on agreed targets
being met. Orspec Pharma, an Australia headquartered company, supplies
pharmaceutical products across the Asia Pacific region with locations in
Australia, New Zealand and Singapore.
· Inspired Health
The Group acquired 100% of the membership interests of Inspired Insight, LLC
in September 2022 for a consideration of €25,504,000 of which €7,087,000
is deferred and contingent on agreed targets being met. Inspired Health, a
United States based company, is an innovation, sales and marketing consultancy
business inspired by insight and data.
· BModesto Group
The Group acquired 85% of the ordinary share capital of BModesto Vastgoed B.V.
in November 2022 and, on the same date, entered into a put and call option
which would enable the Group to acquire the remaining 15% stake in exchange
for cash consideration. This has been accounted under the anticipated
acquisition method with the combined 100% recognised as acquired from November
2022. Acquisition consideration recognised amounted to €41,901,000 of which
€6,596,000 is payable based on agreed targets being met in respect of the
put and call option on the remaining 15% shareholding. BModesto Group, a
Netherlands headquartered company, provides a range of services to healthcare
companies, pharmacies and hospitals including pharmaceutical product supply,
clinical trial services and medical device distribution.
· Young's Pharmacy
The Group acquired the trade and assets of Young's Pharmacy in December 2022
for consideration of €1,363,000. Young's Pharmacy operates as an independent
retail pharmacy in Ireland.
Goodwill is attributable to the future economic benefits arising from assets
which are not capable of being individually identified and separately
recognised. The significant factors giving rise to the goodwill include the
value of the teams within the businesses acquired, the enhancement of the
competitive position of the Group in the marketplace and the strategic premium
paid by Uniphar Group to create the combined Group.
The fair value of the deferred and contingent consideration recognised at the
date of acquisition is calculated by discounting the expected future payment
to present value at the acquisition date. In general, for deferred contingent
consideration to become payable, pre-defined profit thresholds must be
exceeded. On an undiscounted basis, the future payments for which the Group
may be liable in respect of acquisitions completed in the current year range
from €0.4m to €48.9m.
The initial assignment of fair values to net assets acquired has been
performed on a provisional basis in respect of the acquisitions completed
during 2022, due to their recent acquisition dates. The Group has 12 months
from
the date of acquisition to finalise the fair value of the assets/liabilities
acquired, and any amendments to these fair values within the twelve-month
period from the date of acquisition will be disclosable in the 2023 Annual
Report as stipulated by IFRS 3, Business Combinations.
The acquisitions completed in 2022 have contributed €61.4m to revenue and
€11.2m of gross profit for the year since the date of acquisition. The
proforma revenue and operating profit for the Group for the year ended 31
December 2022 would have been €2,360m and €63m respectively had the
acquisitions been completed at the start of the current reporting year.
The provisional fair value of the assets and liabilities acquired as part of
the acquisitions completed during the financial year are set out
below:
BModesto Others Total
€'000 €'000 €'000
ASSETS
Non-current assets
Intangible assets 364 - 364
Property, plant and equipment 4,089 366 4,455
Property, plant and equipment - Right of use assets 1,118 6,102 7,220
Deferred tax asset 207 6,550 6,757
5,778 13,018 18,796
Current assets
Inventory 28,821 1,298 30,119
Trade and other receivables 27,853 3,337 31,190
Cash and cash equivalents - 3,295 3,295
56,674 7,930 64,604
Total assets 62,452 20,948 83,400
LIABILITIES
Non-current liabilities
Lease liabilities 874 5,447 6,321
874 5,447 6,321
Current liabilities
Lease liabilities 243 656 899
Trade and other payables 19,264 4,220 23,484
Bank loans 23,570 273 23,843
43,077 5,149 48,226
Total liabilities 43,951 10,596 54,547
Identifiable net assets acquired 18,501 10,352 28,853
Non-controlling interest arising on acquisition - - -
Group share of net assets acquired 18,501 10,352 28,853
Goodwill arising on acquisition 23,400 37,447 60,847
Consideration 41,901 47,799 89,700
The acquisition in the 2022 financial year of BModesto Group has been
determined to be a substantial transaction and separate disclosure of the fair
values of the identifiable assets and liabilities has therefore been made.
None of the remaining business combinations completed during the period were
considered sufficiently material to warrant separate disclosure of the fair
values attributable to those combinations.
The gross contractual value of the trade and other receivables as at the
respective dates of acquisition amounted to €31.8m. The fair value of these
receivables is €31.2m, all of which is expected to be recoverable, and is
inclusive of an aggregate impairment provision of €0.6m. In 2022, the Group
incurred acquisition costs of €6.6m (2021: €3.3m). These have been
included in administrative expenses in the Group Income Statement.
2021 Acquisitions
The initial assessment of the fair values of the major classes of assets
acquired and liabilities assumed in respect of the acquisitions which were
completed in 2021 was performed on a provisional basis. The fair values
attributable to the assets and liabilities of these acquisitions have now been
finalised. The amendments to these fair values were made to the comparative
figures during the subsequent reporting window within the measurement period
imposed by IFRS 3. The provisional fair value of these assets and liabilities
recorded at 31 December 2021, together with the adjustments made to those
carrying values to arrive at the final fair values are detailed in the Annual
Report.
19. Post balance sheet events
On 31 January 2023, the Group acquired 100% of the issued share capital of LXV
Remedies Holdings Limited which trades as the McCauley's Pharmacy Group. This
acquisition was announced in September 2022 but was subject to clearance by
the Competition and Consumer Protection Commission (CCPC) at 31 December 2022.
McCauley Pharmacy Group is a leading provider of pharmacy and retail services
in Ireland and comprises 37 retail pharmacies at the time of acquisition. Due
to the short time frame between the completion date of the acquisition of
McCauley's Pharmacy Group, and the date of issuance of this report, it was not
possible to reliably estimate the fair value of assets and liabilities or the
goodwill amount associated with the completed acquisition. This acquisition
will be accounted for as an acquisition in the 2023 financial statements.
There have been no other material events subsequent to 31 December 2022 that
would require adjustment to or disclosure in this report.
20. Comparative amounts
The comparative amounts have been updated for amendments to the fair value of
assets and liabilities acquired during 2021, these amendments were within the
measurement period imposed by IFRS 3.
21. Approval by the Board of Directors
The preliminary results announcement was approved by the Board of Directors on
27 February 2023.
Additional Information
ALTERNATIVE PERFORMANCE MEASURES
The Group reports certain financial measurements that are not required under
IFRS. These key alternative performance measures (APMs) represent additional
measures in assessing performance and for reporting both internally, and to
shareholders and other external users. The Group believes that the
presentation of these APMs provides useful supplemental information which,
when viewed in conjunction with IFRS financial information, provides
stakeholders with a more meaningful understanding of the underlying financial
and operating performance of the Group and its divisions. These measurements
are also used internally to evaluate the historical and planned future
performance of the Group's operations.
None of these APMs should be considered as an alternative to financial
measurements derived in accordance with IFRS. The APMs can have limitations as
analytical tools and should not be considered in isolation or as a substitute
for an analysis of results as reported under IFRS.
The principal APMs used by the Group, together with reconciliations where the
APMs are not readily identifiable from the financial statements, are as
follows:
Definition Why we measure it
EBITDA Earnings before exceptional items, net finance expense, income tax expense, EBITDA provides management with an assessment of the underlying trading
depreciation, and intangible assets amortisation. performance of the Group and excludes transactions that are not reflective of
the ongoing operations of the business, allowing comparison of the trading
performance of the business across periods and/or with other businesses.
&
Earnings before exceptional items, net finance expense, income tax expense,
depreciation, and intangible assets amortisation, adjusted for the impact of
IFRS 16 and the pro-forma EBITDA of acquisitions. Adjusted EBITDA is used for leverage calculations.
Adjusted EBITDA
Net bank debt Net bank debt represents the net total of current and non-current borrowings, Net bank debt is used by management as it gives a summary of the Group's
cash and cash equivalents, and restricted cash as presented in the Group current leverage which management will consider when evaluating investment
Balance Sheet. opportunities, potential acquisitions, and internal resource allocation.
Net debt Net debt represents the total of net bank debt, plus current and non-current Net debt is used by management as it gives a complete picture of the Group's
lease obligations as presented in the Group Balance Sheet. debt including the impact of lease liabilities recognised under IFRS 16.
Leverage Net bank debt divided by adjusted EBITDA for the period. Leverage is used by management to evaluate the group's ability to cover its
debts. This allows management to assess the ability for the company to use
debt as a mechanism to facilitate growth.
Adjusted Operating Profit This comprises of operating profit as reported in the Group Income Statement Adjusted operating profit is used to assess the underlying operating
before amortisation of acquired intangible assets and exceptional items (if performance excluding the impact of non-operational items. This is a key
any). measure used by management to evaluate the businesses operating performance.
Adjusted earnings per share This comprises of profit for the financial period attributable to owners of Adjusted EPS is used to assess the after-tax underlying performance of the
the parent as reported in the Group Income Statement before exceptional items business in combination with the impact of capital structure actions on the
(if any) and amortisation of acquisition related intangibles, divided by the share base. This is a key measure used by management to evaluate the
weighted average number of shares in issue in the period. businesses operating performance, generate future operating plans, and make
strategic decisions.
Like for Like adjusted earnings per share Like for like adjusted earnings per share is calculated for both the current Like for like adjusted EPS is used to assess the after-tax underlying
and prior period by dividing the profit of the relevant period attributable to performance of the business assuming a constant share base.
owners of the parent as reported in the Group Income Statement before
exceptional items (if any) and amortisation of acquisition related
intangibles, by the weighted average number of shares in issue in the current
period.
Free cash flow conversion Free cash flow conversion calculated as EBITDA, less investment in working Free cash flow represents the funds generated from the Group's ongoing
capital, less maintenance capital expenditure, less foreign exchange operations. These funds are available for reinvestment, and for future
translation adjustment, divided by EBITDA. acquisitions as part of the Group's growth strategy. A high level of free cash
flow conversion is key to maintaining a strong, liquid Balance Sheet.
Return on capital employed ROCE is calculated as the 12 months rolling operating profit before the impact This measure allows management to monitor business performance, review
of exceptional costs and amortisation of acquisition related intangibles, potential investment opportunities and the allocation of internal resources.
expressed as a percentage of the adjusted average capital employed for the
same period. The average capital employed is adjusted to ensure the capital
employed of acquisitions completed during the period are appropriately time
apportioned.
EBITDA
2022 2021
€'000 €'000
Operating profit Income Statement 53,155 45,147
Exceptional charge recognised in operating profit Note 3 16,415 14,404
Depreciation Note 8 23,356 22,225
Amortisation Note 7 5,114 4,705
EBITDA 98,040 86,481
Adjust for the impact of IFRS 16 (16,837) (16,625)
Pro-forma EBITDA of acquisitions 10,167 1,847
Adjusted EBITDA 91,370 71,703
Net bank debt
2022 2021
€'000 €'000
Cash and cash equivalents Balance Sheet 103,704 78,025
Bank loans repayable within one year Balance Sheet (7,490) (1,721)
Bank loans payable after one year Balance Sheet (187,431) (124,601)
Net bank debt (91,217) (48,297)
Net debt
2022 2021
€'000 €'000
Net bank debt Alternative Performance Measures (91,217) (48,297)
Current lease obligations Balance Sheet (14,315) (14,358)
Non-current lease obligations Balance Sheet (105,919) (104,720)
Net debt (211,451) (167,375)
Leverage
2022 2021
€'000 €'000
Net bank debt Alternative Performance Measures (91,217) (48,297)
Adjusted EBITDA Alternative Performance Measures 91,370 71,703
Leverage (times) 1.0 0.7
Adjusted operating profit
2022 2021
€'000 €'000
Operating profit Income Statement 53,155 45,147
Amortisation of acquisition related intangibles 2,708 2,063
Exceptional charge recognised in operating profit Note 3 16,415 14,404
Adjusted operating profit 72,278 61,614
Adjusted earnings per share
2022 2021
€'000 €'000
Adjusted earnings per share has been calculated by reference to the following:
Profit for the financial year attributable to owners 45,587 48,077
Exceptional charge recognised in operating profit (note 3) 16,415 14,404
Exceptional credit recognised in finance costs (note 3) (13,191) (19,761)
Exceptional credit recognised in income tax (note 3) (1,106) (777)
Amortisation of acquisition related intangibles 2,708 2,063
Tax credit on acquisition related intangibles (329) (207)
Profit after tax excluding exceptional items 50,084 43,799
Weighted average number of shares in issue in the year (000's) 272,557 269,752
Adjusted basic and diluted earnings per ordinary share (in cent) 18.4 16.2
Like for like weighted average number of shares (000's) 272,557 272,557
Like for like adjusted earnings per ordinary share (in cent) 18.4 16.1
Free cash flow conversion
2022 2021
€'000 €'000
EBITDA APMs 98,040 86,481
(Increase)/decrease in inventory Note 16 (15,130) 3,726
Decrease/(increase) in receivables Note 16 2,934 (26,169)
Increase in payables Note 16 2,700 13,205
Share based payment expense Note 16 535 183
Foreign currency translation adjustments Note 16 1,393 22
Payments to acquire property, plant and equipment - Maintenance Cash Flow Statement (8,299) (8,795)
Payments to acquire intangible assets - Cash Flow Statement (3,448) (3,904)
Maintenance
Free cash flow 78,725 64,749
Adjustment for settlement of acquired financial 2,138 1,513
liabilities*
80,863 66,262
EBITDA 98,040 86,481
Free cash flow conversion 82.5% 76.6%
*The adjustment to free cash flow ensures that payments made after an
acquisition to settle loans with former shareholders of acquired companies, or
other similar financial liabilities, are excluded from the movement in
payables in the free cash flow conversion calculation.
Return on capital employed
2022 2021 2020
€'000 €'000 €'000
Rolling 12 months operating profit 53,155 45,147
Adjustment for exceptional costs 16,415 14,404
Acquisition related intangible amortisation 2,708 2,063
Adjusted 12 months rolling operating profit 72,278 61,614
Total equity 289,783 251,564 202,535
Net bank debt/(cash) 91,217 48,297 34,419
Deferred contingent consideration 91,798 88,918 86,195
Deferred consideration payable 523 4,295 4,461
Total capital employed 473,321 393,074 327,610
Average capital employed 433,198 360,342
Adjustment for acquisitions (note A / B below) (15,552) (9,384)
Adjusted average capital employed 417,646 350,958
Return on capital employed 17.3% 17.6%
Note A: Adjustment for acquisitions (2022) Capital Completion Adjustment
employed Date
€'000 €'000
BModesto Group 41,901 November 2022 (13,967)
Other acquisitions completed during 2022 47,464 Various (1,585)
Adjustment for acquisitions during 2022 (15,552)
Note B: Adjustment for acquisitions (2021) Capital Completion Adjustment
employed Date
€'000 €'000
BESTMSLs Group 22,966 July 2021 (1,914)
Other acquisitions completed during 2021 18,967 Various (7,470)
Adjustment for acquisitions (9,384)
The adjustment ensures that the capital employed of acquisitions completed
during the period are appropriately time apportioned. The adjustment includes
cash consideration, deferred and deferred contingent consideration, debt
acquired, cash acquired, and any cash impact of shareholder loans or other
similar financial liabilities repaid post-acquisition.
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