WuXi AppTec Announces Strong First-Quarter 2019 Results
SHANGHAI, April 29, 2019 /PRNewswire/ -- WuXi AppTec Co., Ltd. (stock code: 603259.SH / 02359.HK), a leading global pharmaceutical and medical device open-access capability and technology platform company with global operations, announces its financial results for first quarter 2019.
All financials disclosed in this press release are prepared in accordance with International Financial Reporting Standards (or "IFRS").
The 2019 First Quarterly Report of the Company has not been audited.
Financial Highlights
-- Strong revenue growth of 29.3% year-over-year to RMB2,769 million.
-- Gross profit grew 27.2% year-over-year to RMB1,055 million. Gross profit
margin was 38.1%.([2])
-- Net profit attributable to owners of the Company increased 33.0%
year-over-year to RMB386 million.
-- Adjusted non-IFRS net profit attributable to owners of the Company grew
28.3% year-over-year to RMB519 million.
-- Diluted EPS and adjusted non-IFRS EPS increased by 6.5% and 4.7%,
respectively.([3])
Management Comment
"We are off to a solid start in 2019 with strong growth momentum," said Dr. Ge Li, Chairman and CEO of WuXi AppTec. "Our strong revenue growth was broad-based across all business segments, especially our clinical research and other CRO services. While achieving good revenue growth, we continuously invested in new capabilities and capacities, including talent, laboratories, manufacturing facilities and technologies."
"In the first quarter of 2019, our subsidiary WuXi STA's new drug product manufacturing facility in Shanghai, since its inception at the end of 2018, has passed its first GMP inspection by the European Medical Products Agency (MPA). In addition, three of our Laboratory Testing Division's facilities, Drug Safety Testing, Bioanalytical Services and Medical Device Testing, completed regulatory inspections by the US FDA (Food and Drug Administration), OECD (Organization for Economic Co-operation and Development), and CNAS (China National Accreditation Service for Conformity Assessment), all with excellent results. Moreover, our newly built Qidong research and development center began operation, and will become an extension of our Shanghai headquarter in the future."
"We believe these investments will build on our solid foundation sustaining our growth. At WuXi AppTec, we will continue to relentlessly enhance our platform with the most comprehensive and cutting-edge technologies so we can fulfill our dream that 'every drug can be made and every disease can be treated'." Dr. Li concluded.
First-Quarter 2019 Results
-- First-quarter 2019 revenue increased 29.3% year-over-year to RMB2,769
million. We experienced strong revenue growth across all business
segments, especially for our clinical research and other CRO services.
-- First-quarter 2019 gross profit increased 27.2% year-over-year to
RMB1,055 million. Gross profit margin was 38.1%, slightly lower than
38.7% in first-quarter 2018[4] primarily given we continued to enhance
capabilities and build capacity. We also paid more incentives, including
share-based compensation, to our employees, to sustain talent.
-- First-quarter 2019 net profit attributable to owners of the Company
increased 33.0% year-over-year to RMB386 million. We experienced
significant synergies across business segments and increased customer
conversion rate by fully leveraging the strength of our "integrated
end-to-end" R&D services platform.
First-Quarter 2019 Non-IFRS Results
-- First-quarter 2019 non-IFRS net profit attributable to owners of the
Company increased 32.0% year-over-year to RMB523 million. This adjusts
for RMB32 million share-based payments, RMB99 million foreign
exchange-related effects and RMB5 million amortization of intangible
assets acquired.
First-Quarter 2019 Adjusted Non-IFRS Results
-- Excluding a further RMB10 million realized and unrealized gains from our
venture investments and RMB6 million losses from our joint ventures,
first-quarter 2019 adjusted non-IFRS net profit attributable to owners
of the Company increased 28.3% year-over-year to RMB519 million.
[1] As of Mar 31, 2018 and Mar
31, 2019, we had 938 million
and 1,170 million ordinary
shares, respectively.
[2] If prepared under Accounting
Standard for Business
Enterprises of PRC, the gross
profit grew 26.1% year over
year to RMB1,056 million. Gross
profit margin was 38.1%.
[3] As of Mar 31, 2018 and Mar
31, 2019, we had 938 million
and 1,170 million ordinary
shares, respectively.
[4] If prepared under Accounting
Standard for Business
Enterprises of PRC, first-
quarter 2019 gross profit
increased 26.1% year-over-
year to RMB1,056 million. Gross
profit margin was 38.1%,
slightly lower than 39.1% in
first-quarter 2018.
()
Reconciliation of Non-IFRS and Adjusted Non-IFRS Net Profit
Attributable to Owners of the Company
[5]
RMB million Quarter Quarter
ended ended
31/3/2019 31/3/2018
Profit Attributable to Owners of the 386 291
Company
Add: 136 105
Share-based compensation expense 32 7
Listing expenses - 1
Foreign exchange gain or losses 99 93
Amortization of acquired intangible 5 4
assets from merge and acquisition
Non-IFRS profit attributable to 523 396
Owners of the Company
Add? (4) 9
Realized and unrealized gains or (10) 5
losses from venture investments
Realized and unrealized share of 6 4
losses of joint ventures
Adjusted Non-IFRS net profit 519 405
attributable to owners of the
Company
[5] If the sum of the data below is inconsistent with the total, it is caused by rounding.
()
Consolidated Statement of Profit or Loss
[6]
RMB million
Quarter
Quarter
YoY
ended ended Change
31/3/2019
31/3/2018
Revenue 2,769 2,142 29.3%
Cost of services (1,714) (1,312) 30.6%
Gross profit 1,055 829 27.2%
Other income 60 20 199.8%
Other gains and losses (261) (108) 141.8%
Impairment losses under expected credit (2) 1 -309.0%
losses ("ECL") model
Impairment losses, net of reversal -
Selling and marketing expenses (105) (73) 43.6%
Administrative expenses (301) (204) 47.6%
Research and development expenses (112) (69) 61.9%
Operating Profit 335 396 -15.5%
Share of profits (losses) of associates 187 (6) -3165.9%
Share of losses of joint ventures (6) (4) 70.6%
Finance costs (13) (21) -38.5%
Profit before tax 503 366 37.5%
Income tax expenses (90) (62) 45.3%
Profit for the year 414 304 35.9%
Profit for the year attributable to:
Owners of the Company 386 291 33.0%
Non-controlling interests 27 14 99.6%
414 304 35.9%
Weighted average number of ordinary
shares for the purpose of calculating
(express in shares)
- Basic 1,163,307,960 937,787,000 24.0%
- Diluted 1,164,499,919 937,787,000 24.2%
Earnings per share
(express in RMB per shares)
- Basic 0.33 0.31 6.5%
- Diluted 0.33 0.31 6.5%
[6] If the sum of the data below is inconsistent with the total, it is caused by rounding.
()
Consolidated Statement of Financial Position
[7]
RMB million 2019/3/31
2018/12/31
Non-current Assets
Property, plant and equipment 6,275 6,058
Goodwill 1,137 1,144
Other intangible assets 352 348
Prepaid lease payments 271 272
Interests in associates 834 619
Interests in joint ventures 31 37
Deferred tax assets 240 250
Financial assets at fair value through profit 1,905 2,079
or loss ("FVTPL")
Other non-current assets 191 47
Right-of-use assets 685 -
Total Non-current Assets 11,921 10,854
Current Assets
Inventories 866 855
Contract costs 116 98
Amounts due from related parties 12 14
Trade and other receivables 2,719 2,499
Contract assets 345 385
Prepaid lease payments 6 6
Income tax recoverable 9 34
Financial assets at FVTPL 2,583 2,125
Derivative financial instruments 73 37
Pledged bank deposits 3 3
Bank balances and cash 5,111 5,758
Total Current Assets 11,844 11,813
[7] If the sum of the data below is inconsistent with the total, it is caused by rounding.
Consolidated Statement of Financial Position (continued)
[8]
RMB million
2019/3/31
2018/12/31
Current Liabilities
Trade and other payables 2,247 2,611
Amounts due to related parties 12 12
Derivative financial instruments 61 153
Contract liabilities 628 682
Borrowings 240 120
Income tax payables 252 184
Rental liabilities-current 39 -
Total Current Liabilities 3,479 3,762
Non-current Liabilities
Borrowings 15 15
Deferred tax liabilities 120 112
Deferred income 410 419
Rental liabilities 742 -
Provision 14 -
Other long-term liabilities 96 194
Total Non-current liabilities 1,397 740
Total Liabilities 4,876 4,502
Net Assets 18,888 18,165
Capital and Reserves
Share capital 1,170 1,165
Reserves 17,216 16,523
Equity attributable to owners of the 18,386 17,688
Company
Non-controlling interests 502 477
Total Equity 18,888 18,165
[8] If the sum of the data below is inconsistent with the total, it is caused by rounding.
About WuXi AppTec
WuXi AppTec is a leading global pharmaceutical and medical device open-access capability and technology platform company with global operations. As an innovation-driven and customer-focused company, WuXi AppTec provides a broad and integrated portfolio of services to help our worldwide customers and partners shorten the discovery and development time and lower the cost of drug and medical device R&D through cost-effective and efficient solutions. With its industry-leading capabilities such as small molecule drug R&D and manufacturing, cell therapy and gene therapy R&D and manufacturing, drug R&D and medical device testing, WuXi platform is enabling more than 3,500 innovative collaborators from more than 30 countries to bring innovative healthcare products to patients, and to fulfill WuXi's dream that "every drug can be made and every disease can be treated."
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, and our ability to protect our clients' intellectual property. 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.
Use of Non-IFRS and Adjusted Non-IFRS Financial Measures
We provide non-IFRS net profit attributable to owners of the Company and earnings per share, which exclude share-based compensation expenses, listing expenses for offering of our A shares and H shares, foreign exchange-related gains or losses and amortization of intangible assets acquired in business combinations. We further provide an adjusted non-IFRS net profit attributable to owners of the Company and earnings per share, which 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 and non-recurring items that we do not consider indicative of the performance of our core business. 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.
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SOURCE WuXi AppTec
