WuXi AppTec Reports Solid First-Quarter 2020 Results
SHANGHAI, April 29, 2020 /PRNewswire/ -- WuXi AppTec Co., Ltd. (stock code: 603259.SH / 2359.HK), a company that provides a broad portfolio of R&D and manufacturing services that enable companies in the pharmaceutical, biotech and medical device industries worldwide to advance discoveries and deliver groundbreaking treatments to patients, announces its unaudited financial results for the First-Quarter 2020 ("Reporting Period").
This document serves purely as a summary and is not intended to provide a complete representation of the relevant matters. For further information, please refer to the 2020 first quarterly report and relevant announcements published on the websites of the Shanghai Stock Exchange (www.sse.com.cn) and the Stock Exchange of Hong Kong (www.hkexnews.hk), and the designated media for dissemination of the relevant information. Investors are advised to exercise caution and be aware of the investment risks in dealing in the shares of the Company.
All financials disclosed in this press release are prepared based on International Financial Reporting Standards (or "IFRS").
First-Quarter 2020 Financial Highlights
-- Revenue grew 15.1% year-over-year to RMB3,188 million, driven by solid
growth of our China-based laboratory services and US-based laboratory
services.
-- IFRS gross profit grew 3.9% year-over-year to RMB1,097 million. Gross
profit margin was 34.4%, lower than the 38.1% achieved in the same
period of 2019([2]), mainly because of: (1) the COVID-19 impact on our
Wuhan site and clinical research services business, and (2) an increase
in share-based compensation expenses.
-- Non-IFRS gross profit grew 10.3% year-over-year to RMB1,224 million.
Non-IFRS gross profit margin was 38.1% compared to 39.9% for the same
period in 2019.
-- EBITDA grew 2.7% year-over-year to RMB746 million.
-- Adjusted EBITDA grew 22.1% year-over-year to RMB1,035 million.
-- IFRS net profit attributable to owners of the Company was down 21.6%
year-over-year to RMB303 million. In First-Quarter 2020, we experienced
a RMB105 million loss from the fair value change of our investment
portfolio and a RMB84 million loss of equity pick up from our joint
ventures and associates, primarily due to a decline in stock price as of
March 31, 2020, of certain public companies in our investment portfolio.
During the same period in 2019, we reported a RMB189 million loss from
the fair value change of our investment portfolio and a RMB181 million
gain of equity pick up from our joint ventures and associates.
-- Adjusted non-IFRS net profit attributable to owners of the Company grew
10.8% year-over-year to RMB576 million.
-- Adjusted diluted non-IFRS EPS increased by 9.4% to RMB0.35 versus the
same period last year, while diluted EPS was down 25.0% to RMB0.18.([3])
[1] In the three months ended
March 31, 2019 and three months
ended March 31, 2020, we had a
fully-diluted weighted average
share count of 1,630 million and
1,638 million ordinary shares,
respectively.
[2] If prepared under Accounting
Standard for Business
Enterprises of PRC, the gross
profit grew 4.0% year-over-
year to RMB1,098 million. Gross
profit margin was 34.5%, lower
than the 38.1% achieved during
the same period in 2019.
[3] In the three months ended
March 31, 2019 and three months
ended March 31, 2020, we had a
fully-diluted weighted average
share count of 1,630 million and
1,638 million ordinary shares,
respectively.
Management Comment
Dr. Ge Li, Chairman and CEO of WuXi AppTec, said, "We achieved solid growth in the first quarter of 2020, in spite of the COVID-19 impact on our Wuhan site, which was closed for almost two months, and dramatically reduced activities in our China clinical research services business. Our revenue grew 15.1% year-over-year to RMB3,188 million and our adjusted Non-IFRS net profit grew 10.8% year-over-year to RMB576 million, which was attributable to the timely implementation of our Business Continuity Plan. We maintained and continue to be in close communication with our global customers through video conferencing."
"For the three months ended March 31, 2020, we added over 240 new customers, including 128 global customers, and our number of active customers continued to exceed 3,900. We also continued to make progress across all business segments. As of March 31, 2020, our small molecule CDMO/CMO pipeline has grown to more than 1,000 active projects, including 42 projects in Phase III clinical trials and 22 in commercial manufacturing, and our cell and gene therapies CDMO business provided services for 35 clinical stage projects, including 24 projects in Phase I and 11 projects in Phase II/III. During the Reporting Period, our success-based drug discovery unit filed INDs for 6 new-chemical-entities for our customers and obtained 5 CTAs. As of March 31, 2020, we have cumulatively submitted 91 new-chemical-entities IND filings for our customers and obtained 62 CTAs."
Dr. Ge Li concluded, "The fundamentals of our business remain very strong. Our laboratories and facilities in China are fully operational and we expect to deliver a strong second quarter. Due to the spread of COVID-19 in the United States, our US operations will be negatively impacted in the second quarter, however, we expect the continued implementation of our Business Continuity Plan to mitigate some of this impact. We are determined to navigate through the COVID-19 crisis in partnership with our global customers, and to assume an even greater responsibility for keeping the R&D and manufacturing engine humming. We are confident that we will win back 2020 and deliver another year of strong growth."
First-Quarter 2020 Adjusted Non-IFRS Results
-- First-Quarter 2020 adjusted non-IFRS net profit attributable to owners
of the Company grew 10.8% year-over-year to RMB576 million. This adjusts
for share-based compensation expenses, listing expenses and convertible
bonds issuance expenses, fair value gain or loss from conversion option
of convertible bonds, foreign exchange-related effects, amortization of
intangible assets acquired in business combinations, realized/unrealized
gains or losses from our venture investments and realized/unrealized
gains or losses from our joint ventures.
Reconciliation of Non-IFRS and Adjusted Non-IFRS Net Profit Attributable
to Owners of the Company
[4]
RMB Million 2020Q1 2019Q1
--- ---
Profit Attributable to the owners of the Company 303 386
---
Add:
---
Share-based compensation expenses 117 32
---
Listing expenses and issuance expenses of 1 -
convertible bonds
---
Fair value gains from derivative component of (15) -
convertible bonds
---
Foreign exchange related (gains)/losses (16) 99
---
Amortization of intangible assets acquired in 9 5
business combinations
---
Non-IFRS Net Profit Attributable the owners of the 399 523
Company
---
Add:
---
Realized and unrealized (gains)/losses from 171 (9)
venture investments
---
Realized and unrealized share of losses from 7 6
joint ventures
---
Adjusted non-IFRS net profit attributable to the 576 520
owners of the Company
---
[4] If the sum of the data below is inconsistent with the total, it is caused by rounding.
EBITDA[5]
RMB Million
Three Months
Three Months
Ended March Ended March
31, 2020 31, 2019
--- ---
Profit before tax 416 503
---
Add:
---
Interest expense 58 13
---
Depreciation and amortization 272 210
---
EBITDA 746 726
---
% EBITDA margin 23.4% 26.2%
---
Add:
---
Share-based compensation expenses 142 38
---
Listing expenses and issuance expenses 2 -
of convertible bonds
---
Fair value gain from derivative component (15) -
of convertible bonds
---
Foreign exchange related (gains)/losses (17) 115
---
Realized and unrealized (gains)/losses 171 (9)
from venture investments
---
Realized and unrealized share of losses 7 6
from joint ventures
---
Adjusted EBITDA 1,035 876
---
% Adjusted EBITDA margin 32.5% 31.6%
---
[5] If the sum of the data below is inconsistent with the total, it is caused by rounding.
Consolidated Statement of Profit or Loss and Other Comprehensive Income
[6]
RMB million
Three Months
Three Months
YoY
Ended March Ended March Change
31, 2020 31, 2019
Revenue 3,188 2,769 15.1%
Cost of services (2,091) (1,714) 22.0%
Gross profit 1,097 1,055 3.9%
Other income 52 60 -13.0%
Other gains and losses 20 (261) -107.8%
Impairment losses under expected credit 4 (2) -316.5%
losses ("ECL") model, net of reversal
Selling and marketing expenses (119) (105) 13.7%
Administrative expenses (370) (301) 23.0%
Research and development expenses (126) (112) 12.7%
Operating Profit 558 335 66.5%
Share of profits (losses) of associates (77) 187 -141.1%
Share of losses of joint ventures (7) (6) 8.4%
Finance costs (58) (13) 356.8%
Profit before tax 416 503 -17.4%
Income tax expense (111) (90) 23.3%
Profit for the period 305 414 -26.2%
Other comprehensive income (expense)
for the period
Items that may be reclassified
subsequently to profit or loss:
Exchange differences on translation of 34 (60) -156.0%
financial statements of foreign operations
hedging instrument designated in cash (28) 80 -134.2%
flow hedges
Other comprehensive income for the period, 6 20 -68.2%
net of income tax
Total comprehensive income for the period 311 433 -28.1%
[6] If the sum of the data below is inconsistent with the total, it is caused by rounding.
Consolidated Statement of Profit or Loss and Other Comprehensive Income (continued)[7]
RMB million
Three Months
Three Months
YoY
Ended March Ended March Change
31, 2020 31, 2019
Profit for the period attributable to:
Owners of the Company 303 386 -21.6%
Non-controlling interests 2 27 -92.4%
305 414 -26.2%
Total comprehensive income for the
period attributable to:
Owners of the Company 310 402 -22.9%
Non-controlling interests 2 32 -94.8%
311 433 -28.1%
Weighted average number of ordinary
shares for the purpose of calculating
(express in million shares)
- Basic 1,629 1,629 0.0%
- Diluted 1,638 1,630 0.5%
Earnings per share attributable to
ordinary equity holders of the parent
(expressed in RMB per share)[8]
- Basic 0.19 0.24 -20.8%
- Diluted 0.18 0.24 -25.0%
[7] If the sum of the data below is inconsistent with the total, it is caused by rounding.
[8] In July 2019, pursuant to the 2018 Profit Distribution Plan considered and approved by the
shareholders' general meeting, the Company issued 4 shares for every 10 shares of the
Company by way of capitalization of reserves. In accordance with the regulations of the China
Securities Regulatory Commission, the Company has adjusted the basic earnings per share
and diluted earnings per share for the comparative period according to the 2018 Profit
Distribution Plan.
Consolidated Statement of Financial Position
[9]
RMB million March 31,
December 31,
2020 2019
Non-current Assets
Property, plant and equipment 7,675 7,666
Right of use assets 1,562 1,564
Biological Assets 362 360
Goodwill 1,370 1,362
Other intangible assets 497 496
Interest in associates 748 768
Interest in joint ventures 22 25
Deferred tax assets 256 262
Financial assets at fair value through profit 4,681 4,009
or loss ("FVTPL")
Other non-current assets 62 62
Amount Due from Related Parties -
17,235 16,576
Current Assets
Inventories 1,480 1,208
Contract costs 147 180
Biological assets 356 354
Amounts due from related parties 7 13
Trade and other receivables 3,439 3,556
Contract assets 400 379
Income tax recoverable 1 6
Financial assets at FVTPL 1,300 1,702
Derivative financial instruments 8 37
Pledged bank deposits 5 4
Bank balances and cash 5,853 5,223
12,996 12,663
Total Assets 30,231 29,239
[9] If the sum of the data below is inconsistent with the total, it is caused by rounding.
Consolidated Statement of Financial Position (continued)
[10]
RMB million March 31,
December 31,
2020 2019
Current Liabilities
Trade and other payables 3,420 3,393
Amounts due to related parties 24 25
Derivative financial instruments 112 86
Contract liabilities 1,054 897
Borrowings 2,213 1,810
Income tax payables 299 261
Financial liabilities at FVTPL 20 20
Lease liabilities 164 143
7,305 6,634
Non-current Liabilities
Borrowings 667 762
Convertible bonds - debt component 1,922 1,875
Convertible bonds-embedded derivative 287 298
component
Deferred tax liabilities 179 231
Deferred income 661 667
Other long-term liabilities 233 232
Financial liabilities at FVTPL 25 25
Lease liabilities 1,101 1,105
5,075 5,195
Total Liabilities 12,381 11,829
Net Assets 17,851 17,410
Capital and Reserves
Share capital 1,651 1,651
Reserves 16,100 15,661
Equity attributable to owners of the Company 17,751 17,312
Non-controlling interests 100 97
17,851 17,410
[10] If the sum of the data below is inconsistent with the total, it is caused by rounding.
About WuXi AppTec
WuXi AppTec provides a broad portfolio of R&D and manufacturing services that enable companies in the pharmaceutical, biotech and medical device industries worldwide to advance discoveries and deliver groundbreaking treatments to patients. As an innovation-driven and customer-focused company, WuXi AppTec helps our partners improve the productivity of advancing healthcare products through cost-effective and efficient solutions. With industry-leading capabilities such as R&D and manufacturing for small molecule drugs, cell and gene therapies, and testing for medical devices, WuXi AppTec's open-access platform is enabling more than 3,900 collaborators from over 30 countries to improve the health of those in need - and to realize our vision that "every drug can be made and every disease can be treated." Please visit: http://www.wuxiapptec.com
Forward-Looking Statements
This press release may contain certain "forward-looking statements" which are not historical facts, but instead are predictions about future events based on our beliefs as well as assumptions made by and information currently available to our management. Although we believe that our predictions are reasonable, future events are inherently uncertain and our forward-looking statements may turn out to be incorrect. Our forward-looking statements are subject to risks relating to, among other things, the ability of our service offerings to compete effectively, our ability to meet timelines for the expansion of our service offerings, our ability to protect our clients' intellectual property, unforeseeable international tension, competition, the impact of emergencies and other force majeure. Our forward-looking statements in this press release speak only as of the date on which they are made, and we assume no obligation to update any forward-looking statements except as required by applicable law or listing rules. Accordingly, you are strongly cautioned that reliance on any forward-looking statements involves known and unknown risks and uncertainties. All forward-looking statements contained herein are qualified by reference to the cautionary statements set forth in this section. All information provided in this press release is as of the date of this press release and are based on assumptions that we believe to be reasonable as of this date, and we do not undertake any obligation to update any forward-looking statement, except as required under applicable law.
Use of Non-IFRS and Adjusted Non-IFRS Financial Measures
We provide Non-IFRS gross profit, exclude the impact in revenue and cost from effective hedge accounting, share-based compensation expenses and amortization of intangible assets acquired in business combinations, and Non-IFRS net profit attributable to owners of the Company, which exclude share-based compensation expenses, listing expenses and issuance expenses of convertible bonds, fair value gain or loss from derivative component of convertible bonds, foreign exchange-related gains or losses and amortization of intangible assets acquired in business combinations. We also provide adjusted Non-IFRS net profit attributable to owners of the Company and earnings per share, which further exclude realized and unrealized gains or losses from our venture investments and joint ventures. Neither is required by, or presented in accordance with IFRS. We believe that the adjusted financial measures used in this press release are useful for understanding and assessing our core business performance and operating trends, and we believe that management and investors may benefit from referring to these adjusted financial measures in assessing our financial performance by eliminating the impact of certain unusual, non-recurring, non-cash and non-operating items that we do not consider indicative of the performance of our core business. Such adjusted Non-IFRS net profit attributable to owners of the Company, the management of the Company believes, is widely accepted and adopted in the industry the Company is operating in. However, the presentation of these adjusted Non-IFRS financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS. You should not view adjusted results on a stand-alone basis or as a substitute for results under IFRS, or as being comparable to results reported or forecasted by other companies.
View original content:http://www.prnewswire.com/news-releases/wuxi-apptec-reports-solid-first-quarter-2020-results-301049165.html
SOURCE WuXi AppTec
