WuXi AppTec Reports Third-Quarter 2019 Results

SHANGHAI, Oct. 30, 2019 /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 financial results for the third quarter and nine months ended September 30, 2019 ("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 2019 third 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 "IFRSs").

The 2019 Third-Quarter Report of the Company has not been audited.

Third-Quarter 2019 Financial Highlights

• Accelerated revenue growth of 34.7% year-over-year to RMB 3,384 million, which was broad-based across all our business segments.
• Gross profit grew 31.5% year-over-year to RMB 1,377 million. Gross profit margin was 40.7%.^[3]
• EBITDA grew 22.0% Year-Over-Year to RMB 1,155 million.
• Adjusted EBITDA grew 51.6% Year-Over-Year to RMB 1,107 million.
• Adjusted non-IFRS net profit attributable to owners of the Company grew 50.2% year-over-year to RMB 664 million.
• Net profit attributable to owners of the Company grew 7.9% year-over-year to RMB 708 million. Net profit growth rate was slower than revenue growth rate due to RMB 227 million decrease in fair value gain of our investment portfolio from RMB 237 million in the third quarter of 2018 to RMB 10 million in the same period this year.
• Adjusted diluted non-IFRS EPS increased by 36.7% versus the same period last year while diluted EPS was down 4.4%.^[4]

Year-to-Date 2019 Financial Highlights

• Accelerated revenue growth of 34.1% year-over-year to RMB 9,279 million.
• Gross profit grew 30.6% year-over-year to RMB 3,660 million. Gross profit margin was 39.5%.^[5]
• EBITDA grew 7.3% Year-Over-Year to RMB 2,914 million.
• Adjusted EBITDA grew 41.0% Year-Over-Year to RMB 3,006 million.
• Adjusted non-IFRS net profit attributable to owners of the Company grew 38.0% year-over-year to RMB 1,842 million.
• Net profit attributable to owners of the Company was lower 8.5% year-over-year to RMB 1,765 million, due to a RMB 45 million loss from changes in fair value of our investment portfolio for the first nine months of 2019, versus a RMB 669 million gain in the same period last year.
• Adjusted diluted non-IFRS EPS increased by 17.7% versus the same period last year while diluted EPS was down 22.5%.^[6]

Management Comment

Mr. Edward Hu, Co-CEO of WuXi AppTec, said, "Our growth continued to accelerate for the third quarter of 2019. In addition, we continue to focus on customer development and business conversion with a strategy of following the projects and following the molecules, leveraging synergies across all our business segments. For the nine months ended September 30, we have gained over 900 new customers and our number of active customers now exceed 3,700."

Mr. Edward Hu further commented, "During the Reporting Period, our success-based drug discovery unit filed INDs for 16 new-chemical-entities for domestic customers with the China National Medical Products Administration and obtained 20 CTAs. As of September 30, 2019, we have cumulatively submitted 71 new-chemical-entity IND filings with the NMPA for our customers and obtained 54 CTAs. As of September 30, 2019, our small molecule CDMO/CMO pipeline has grown to more than 900 active projects, including 40 projects in Phase III clinical trials and 17 in commercial manufacturing, and our cell and gene therapies CDMO business provided services for 33 clinical stage projects, including 24 projects in Phase I and 9 projects in Phase II/III. In September 2019, we also completed the issuance of USD 300 million zero-coupon convertible bonds, providing the Company with a strong balance sheet for investments, business expansion and potential M&A."

Dr. Ge Li, Chairman and CEO of WuXi AppTec, stated, "Our business model and the platform we have built continue to perform well. We continue to invest in new capabilities and capacities and believe these investments will allow the company to sustain our long term growth. We will continue to focus on enabling global partners and assisting them to bring the best medicines to patients in need, and to realize our vision that 'every drug can be made and every disease can be treated'."

Third-Quarter 2019 IFRS Results

• Revenue increased 34.7% year-over-year to RMB 3,384 million.
• Gross profit increased 31.5% year-over-year to RMB 1,377 million. Gross profit margin was 40.7%, slightly lower than 41.7% in the three months ended September 30, 2018.^[7]
• EBITDA increased 22.0% Year-Over-Year to RMB 1,155 million.
• Net profit attributable to owners of the Company increased 7.9% year-over-year to RMB 708 million. Net profit growth rate was slower than revenue growth rate, mainly due to a RMB 10 million gain in fair value of our investment portfolio for the third quarter of 2019, compared with a RMB 237 million gain in the same period last year which was primarily due to Hua Medicine and Unity Biotechnology stock price change after the IPO. Excluding the impact of changes in fair value of our investment portfolio, the net profit attributable to owners of the Company in the current period increased by 66.4% compared with the same period last year.

Third-Quarter 2019 Non-IFRS Results

• Third-Quarter 2019 non-IFRS net profit attributable to owners of the Company increased 9.9% year-over-year to RMB 739 million. This adjusts for share-based compensation expenses, listing expenses and convertible bonds issuance expenses, distribution expenses for convertible bonds, foreign exchange-related effects and amortization of intangible assets acquired in business combinations.

Third-Quarter 2019 Adjusted Non-IFRS Results

• Excluding realized/unrealized gains or losses from our venture investments and realized/unrealized gains or losses from our joint ventures, Third-Quarter 2019 adjusted non-IFRS net profit attributable to owners of the Company increased 50.2% year-over-year to RMB 664 million.

Year-to-Date 2019 IFRS Results

• Revenue increased 34.1% year-over-year to RMB 9,279 million.
• Gross profit increased 30.6% year-over-year to RMB 3,660 million. Gross profit margin was 39.5%, slightly lower than 40.5% in the nine months ended September 30, 2018.^[8]
• EBITDA increased 7.3% Year-Over-Year to RMB 2,914 million.
• Net profit attributable to owners of the Company decreased 8.5% year-over-year to RMB 1,765 million, mainly due to a RMB 45 million loss in fair value of our investment portfolio for the first nine months of 2019, compared with a RMB 669 million gain in the same period last year which was primarily due to Hua Medicine and Unity Biotechnology stock price change after the IPO. Excluding the impact of changes in fair value of our investment portfolio, the net profit attributable to owners of the Company in the current period increased by 43.7% compared with the same period last year.

Year-to-Date 2019 Non-IFRS Results

• Year-to-Date 2019 non-IFRS net profit attributable to owners of the Company decreased 3.9% year-over-year to RMB 1,952 million. This adjusts for share-based compensation expenses, listing expenses and convertible bonds issuance expenses, distribution expenses for convertible bonds, foreign exchange-related effects and amortization of intangible assets acquired in business combinations.

Year-to-Date 2019 Adjusted Non-IFRS Results

• Excluding realized/unrealized gains or losses from our venture investments and realized/unrealized gains or losses from our joint ventures, Year-to-Date 2019 adjusted non-IFRS net profit attributable to owners of the Company increased 38.0% year-over-year to RMB 1,842 million.

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 3,700 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, and unforeseeable international tension. 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 and convertible bonds issuance expenses, 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.

SOURCE WuXi AppTec

Related Links

http://www.wuxiapptec.com