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Classified in: Health, Science and technology, Business, Covid-19 virus
Subject: ERN

WuXi AppTec Achieved Strong Growth in First-Half of 2020 with China Sites Resuming Full Operations


WuXi AppTec Second-Quarter 2020 Results

Revenue Up 29.4% YoY to RMB4,044 Million
Net Profit Attributable to Owners of the Company Up 111.0% YoY to RMB1,414 Million
Diluted EPS Up 110.3% YoY to RMB0.61
Adjusted Non-IFRS Net Profit Attributable to Owners of the Company Up 43.1% YoY to RMB942 Million
Adjusted Diluted Non-IFRS EPS Up 46.4% YoY to RMB0.41

WuXi AppTec's Results for the First-Half of 2020

Revenue Up 22.7% YoY to RMB7,231 Million
Net Profit Attributable to Owners of the Company Up 62.5% YoY to RMB1,717 Million
Diluted EPS Up 60.9% YoY to RMB0.74
Adjusted Non-IFRS Net Profit Attributable to Owners of the Company Up 28.9% YoY to RMB1,519 Million
Adjusted Diluted Non-IFRS EPS Up 29.4% YoY to RMB0.66

SHANGHAI, Aug. 13, 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, is pleased to announce its reviewed financial results for the first half of 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 half 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 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 (IFRS).

Second Quarter 2020 Financial Highlights

[1] If prepared under Accounting Standard for Business Enterprises of PRC, the gross profit grew 27.7% YoY to RMB1,570 million. Gross profit margin was 38.8%, lower than the 39.4% achieved in the same period last year.

[2] Three months ended June 30, 2019 and three months ended June 30, 2020, we had a fully-diluted weighted average share count of 2,284 million and 2,302 million ordinary shares, respectively.

First Half of 2020 Financial Highlights

[3] If prepared under Accounting Standard for Business Enterprises of PRC, the gross profit grew 16.7% YoY to RMB2,668 million. Gross profit margin was 36.9%, lower than the 38.8% achieved in the same period last year.

[4] Six months ended June 30, 2019 and six months ended June 30, 2020, we had a fully-diluted weighted average share count of 2,284 million and 2,301 million ordinary shares, respectively.

First Half 2020 Business Highlights

Management Comment

Dr. Ge Li, Chairman and CEO of WuXi AppTec, said, "We achieved strong growth in the first half of 2020, in spite of the impact of COVID-19 on our China-based laboratory services in the first quarter, U.S.-based laboratory services in the second quarter, and clinical research services. Our revenue grew 22.7% year-over-year to RMB7,231 million and our adjusted Non-IFRS net profit grew 28.9% year-over-year to RMB1,519 million. Strong performance from our China-based laboratory services and CDMO/CMO services mitigated any challenges faced by our U.S.-based laboratory services and clinical research services."

"Our global enabling platform and 'Follow the Customer/Follow the Project/Follow the Molecule' strategy continued to perform very well. China-based laboratory services and CDMO/CMO services resumed full operations and achieved robust growth, attributable to increased business opportunities and improved utilization and efficiency. Our U.S.-based laboratory services, clinical research and other CRO services segments, although severely impacted by COVID-19, still realized revenue growth and our backlog continued to improve quarter-over-quarter. In regard to the Company's financial position, in August 2020 we completed the placing of new H shares, receiving approximately HK$7.29 billion in net proceeds, providing the Company with a strong balance sheet for investments, business expansion and potential M&A."

Dr. Ge Li concluded, "2020 has been a year full of challenges and opportunities. We achieved solid growth in the first half of 2020 as a result of the combined efforts of all our employees and support from our customers globally. We are determined to navigate through the challenges posed by COVID-19 in partnership with our global customers, and are committed to working alongside our customers and partners in the global healthcare community to keep the R&D and manufacturing engine humming. The fundamentals of our business remain very strong and we expect to deliver a strong second half. Looking ahead, we will continue to focus on enabling our global partners and doing the right thing for patients in order to realize our vision that 'every drug can be made and every disease can be treated.'"

Reconciliation of Non-IFRS and Adjusted Non-IFRS Net Profit Attributable to Owners of the Company[5]


RMB Million

Three
months
ended June
30, 2020

Three
months
ended June
30, 2019

Six
months
ended June
30, 2020

Six
months
ended June
30, 2019

Profit Attributable to the
owners of the Company

1,414.1

670.3

1,717.2

1,056.8

Add:





      Share-based
compensation expenses

158.7

31.0

275.3

62.7

      Convertible bonds
issuance expenses

1.3

-

2.5

-

      Fair value loss from
derivative component of
convertible bonds

502.1

-

486.8

-

      Foreign exchange
related (gains)/losses

36.1

(18.0)

20.3

81.3

     Amortization of
acquired intangible assets
from merge and acquisition

8.8

7.1

17.6

12.4

Non-IFRS Net Profit
Attributable to the Owners
of the Company

2,121.1

690.3

2,519.6

1,213.2

Add:





      Realized and
unrealized gains from
venture investments

(1,184.3)

(45.6)

(1,013.2)

(54.7)

      Realized and
unrealized share of losses
of joint ventures

5.6

14.0

12.4

20.2

Adjusted Non-IFRS net
profit attributable to the
owners of the Company

942.4

658.6

1,518.7

1,178.7


[5] If the sum of the data below is inconsistent with the total, it is caused by rounding.

 

 

Condensed Consolidated Statement of Profit or Loss[6]


RMB million

Three
months
ended
June
30, 2020

Three
months
ended
June
30, 2019

Six
months
ended
June
30, 2020

Six
months
ended
June
30, 2019

YoY
Change







Revenue 

4,043.9

3,124.9

7,231.4

5,894.4

22.7%

   Cost of services

(2,482.1)

(1,896.5)

(4,572.8)

(3,610.8)

26.6%

Gross profit

1,561.9

1,228.4

2,658.6

2,283.6

16.4%

   Other income

76.0

65.2

128.0

124.9

2.5%

   Other gains and
losses

701.5

238.1

721.8

(22.5)

NA

   Impairment losses
under expected credit
losses (ECL) model,
net of reversal

(12.1)

0.7

(8.1)

(1.2)

 

 

601.5%

   Selling and
marketing expenses  

(155.3)

(103.7)

(274.5)

(208.5)

31.6%

   Administrative
expenses 

(459.0)

(370.3)

(829.3)

(671.2)

23.5%

   Research and
development expenses

(207.5)

(131.9)

(333.4)

(243.6)

36.9%

Operating Profit

1,505.5

926.5

2,063.1

1,261.4

63.5%

   Share of profits
(losses) of associates

59.1

(114.3)

(17.9)

73.0

-124.5%

   Share of losses of
joint ventures

(5.6)

(13.9)

(12.4)

(20.2)

-38.6%

   Finance costs

(52.8)

(20.1)

(110.8)

(32.8)

238.3%

Profit before tax

1,506.1

778.1

1,922.0

1,281.5

50.0%

   Income tax expense

(83.8)

(86.7)

(194.5)

(176.5)

10.2%

Profit for the period

1,422.4

691.4

1,727.5

1,105.0

56.3%







Attributable to:






   Owners of the
Company

1,414.1

670.3

1,717.2

1,056.8

62.5%

   Non-controlling
interests

8.3

21.1

10.3

48.2

-78.6%


1,422.4

691.4

1,727.5

1,105.0

56.3%


[6] If the sum of the data below is inconsistent with the total, it is caused by rounding.


 

 

Condensed Consolidated Statement of Profit or Loss (continued)[7]


RMB

Three
months
ended
June
30, 2020

Three
months
ended
June
30, 2019

Six
months
ended
June
30, 2020

Six
months
ended
June
30, 2019

YoY
Change







Weighted
average number
of ordinary
shares for the
purpose of
calculating
(express in
shares)






? Basic

2,284,251,336

2,281,010,674

2,283,360,465

2,280,549,699

0.1%

? Diluted

2,301,825,513

2,283,904,160

2,300,934,641

2,283,904,162

0.7%







Earnings per
share attributable
to ordinary equity
holders of the
parent
(expressed in
RMB per share)[8]






? Basic

0.61

0.29

0.75

0.46

63.0%

? Diluted

0.61

0.29

0.74

0.46

60.9%


[7] If the sum of the data below is inconsistent with the total, it is caused by rounding.

[8] In June 2020, pursuant e shareholders' general meeting, the Company issued 4 shares for every 10 shares
of the Company by way of capitalization of reserve. 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 2019 Profit Distribution Plan.

 

 

Condensed Consolidated Statement of Financial Position[9]


RMB million

Jun 30,

December 31,


2020

2019




Non-Current Assets



  Property, plant and equipment

8,170.1

7,666.0

  Right of use assets

1,524.1

1,564.4

  Biological assets

402.0

360.3

  Goodwill

1,369.3

1,362.2

  Other intangible assets

486.7

495.9

  Interest in associates

857.5

768.3

  Interest in joint ventures

47.6

25.2

  Deferred tax assets

307.6

262.2

  Financial assets at fair value through
    profit or loss (FVTPL)

5,762.5

4,009.1

  Other non-current assets

578.3

62.4

  Amount Due from Related Parties

0.2

0.2


19,505.9

16,576.1




Current Assets



  Inventories

1,690.5

1,208.3

  Contract costs

140.4

180.2

  Biological assets

362.9

354.0

  Amounts due from related parties

15.8

13.3

  Trade and other receivables

4,033.9

3,555.9

  Contract assets

454.7

379.4

  Income tax recoverable

1.3

6.3

  Financial assets at FVTPL

1,804.8

1,701.6

  Derivative financial instruments

13.3

36.8

  Pledged bank deposits

3.4

4.0

  Bank balances and cash 

2,848.5

5,223.3


11,369.5

12,663.0




Total Assets

30,875.4

29,239.1


[9] If the sum of the data below is inconsistent with the total, it is caused by rounding.

 

 

Condensed Consolidated Statement of Financial Position (continued)[10]


RMB million

Jun 30,

2020

December 31,

2019




Current Liabilities



  Trade and other payables

3,238.5

3,392.8

  Amounts due to related parties

20.4

24.8

  Derivative financial instruments

55.6

86.4

  Contract liabilities

1,244.6

897.1

  Borrowings

1,787.0

1,809.9

  Income tax payables

254.5

261.4

  Financial liabilities at FVTPL

43.7

19.5

  Lease liabilities

162.8

142.5


6,807.0

6,634.4




Non-Current Liabilities



Borrowings

557.7

762.4

Deferred tax liabilities

211.9

231.1

Deferred income

660.4

667.4

Lease liabilities

1,065.9

1,104.7

Convertible bonds-debt component

1,937.6

1,874.9

Convertible bonds-embedded derivative
component

789.2

298.0

Financial liabilities at FVTPL

-

24.7

Other long-term liabilities

192.5

231.8

Total Non-Current Liabilities

5,415.2

5,195.0




Total Liabilities

12,222.3

11,829.4




Net Assets

18,653.1

17,409.7




Capital and Reserves



  Share capital 

2,311.6

1,651.1

  Reserves

16,220.9

15,661.1

  Equity attributable to owners of the
Company

18,532.5

17,312.3

  Non-controlling interests

120.7

97.5

Total Equity

18,653.1

17,409.7


[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 4,000 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.

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. We further provide EBITDA and adjusted EBITDA. Neither of above 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 Non-IFRS financial measures, 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.

SOURCE WuXi AppTec


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