Hikma Pharmaceuticals PLC

Okay. Good morning, everyone. I'm Guy Featherston, Investor Relations. Before we start, I'd like to remind you that any forward-looking statements or projections made by HICMA during this call are made in good faith based on information currently available and are subject to risks and uncertainties that may cause actual results to differ materially from those projected. For further information, please see the Principal Risks and Uncertainties section in HICMA's annual report. Thank you for joining this Q&A meeting for Hikmah's 2025 full year results. Our pre-recorded presentation is available on our website and this will be a Q&A session. We're joined today by Saeed Darwaza, CEO, Mazen Darwaza, Executive Vice Chairman and Deputy CEO, Khaled Nobilsi, Deputy CEO, North America and Europe, Afrin Frederick-Stottir, President, US and Global Head of R&D, We're also joined by John Kafer, who heads up the US Injectables commercial business, and we have Arab Kirby, recently appointed Acting CFO, and Susan Ringdahl, Investor Relations, also in the room. And with that, I will hand over to Saeed.

Thank you very much, and good morning everybody, and to my old friends, hello again. The decision for me to take over as CEO again was not really a very easy decision. giving up the beach and the sun and the good life was difficult. But I really felt very strongly compelled to do this. I remember before we IPO-ed, we were discussing the ideas of IPO-ing and not IPO-ing, and my father saying, my worry is that one day the team will lose sight of the long term and start looking at short term and short term wins. This is the only thing that I'm worried about. And frankly, in many ways, this is what happened, I think. The company had sort of started looking at short-term wins and fixation on modules of the injectable and so on, and really, you know, lost track. So that's why I felt very, very strongly about coming back again. And as you know, also I had to, you know, I decided to give up the chair position to concentrate 100% for the next two years on the CEO role. I want to also remind you that last time when I came in, we had a similar situation with the RX business. The generic business was also doing not very well when I had to step in back again. And for a period of a year or so, everybody was on us saying, get rid of this division. It's weighing you down. Why are you keeping it? But we said we will do what's required. We set... reasonable targets of 100 to 130 in EBIT and we said we will fix it and here we are a few years later we're looking at that business and it has margins of close to 20% and EBIT of 200 million or so. So we've done this before and we feel, I feel, we feel that we know exactly what needs to be done. It really is not a complicated formula. It's a simple formula. You need to do the right investments. You need to get the right people, the right talent, and take quick decisions. So, as I've said this morning, my focus is very clear. So, number one, we want stability. We want these two years where people can relax and focus on what is required for them rather than worry who is going to come in and what's going to happen. So we're reassuring our people, our stakeholders, our investors, this is Hikma, is a very, very strong company. And we have a slide that shows the kegel of the last five-year growth. This company has consistently delivered growth and quite good growth. Also, I'd like to remind you all that we have EBITDA margins of 25, while many of our competitors are striving to get to 22. The second thing is agility. We want to implement a structure of quick decision making and to allow people across the board to take these decisions. We don't want the decision making to be centralized with one or a few people or the executive committee. Rather, we need to empower people across the board to take decisions. I've always said companies that empower their youngsters, their under 40 crowd, are the ones that will be here tomorrow. Those that do not will disappear. So we'll be focusing on empowering everybody across the business so that we take these decisions. And investment, we have to accelerate investment. We have to take the investments that we need to do. So one of the first things we've done is we've taken the R&D budget out of the segments. So the segment heads cannot play with the R&D budget to achieve their targets. It's now a corporate decision. We have a budget for it, which is an aggressive budget. We have spent last year building the team. As you remember, we acquired... a great team in Croatia. Hafrun joined the company three years ago now, and Hafrun has a long, long track record in R&D, and she is directly in charge of the R&D team. So the other things we need to do is hire the right people. Again, John took over as commercial head of North America or U.S. injectables and immediately said, we need to hire so many people. Well, what are you doing? We need to do this. And we said, John, go ahead and do it. And he's already hired so many people and added to the team. We also hired a supply chain. We have now a fantastic supply chain team in place that will be working to make sure that we don't have bottlenecks across the group. And we are still looking to hire some more people, like the head of CMO. We are interviewing now. We want to hire somebody that has a lot of experience in CMO because we feel very strongly that Hikma is well-planned to be a major CMO supplier. And finally, what I started by saying, the fear of my father when we went IPO, long-term growth. Focus on the long-term. And that's what we are doing now. We are focused on the long-term. We are doing the right investments. We are adding, as we said, the R&D. Budget is much higher than it was before. I think we're targeting 5% to 6% now to spend on R&D. Hiring the right people. giving the plant managers the decision to buy the right equipment when they need it, not waiting for, you know, central engineering to come before they can buy that. So all these changes that we are taking, all these changes we are implementing, I think will be excellent for the future. Then I think we have to look at the structure that we are, you know, saying. Why this new structure? Some people have said it looks too complex. In my opinion, for me at least and for the team, it's a very simple structure. The MENA team is a fantastic team, strong team that has been doing an excellent job for the last 40 years. Hikma this year was number one company in MENA, among all companies. This is a big deal. And it's the MENA team that has delivered this. Mazen and his team have been doing this. So it was a no-brainer that the injectables in the MENA report to them instead of being a distraction for the whole team. And then Europe and, let's say, North America or USA, they share many plans and they share the products. So although doing business in Europe is different, but it's the same products and the same manufacturing teams. Khaled has been with us for quite some time now, and he has shown to be doing a great job. He understands this business, and we believe that it was time for him to step up and take a strong P&L position, I am very comfortable that he will do a great job. And Hafron, since he joined the company, has just won us all. He has done such an incredible job with RX, such an incredible job with the R&D team, and hiring the right people, and getting the right things in place, and at some point we will be sharing a clear R&D strategy for everybody, We are more than comfortable that with the help of John and his team and the RX team that has already proven to be an extremely effective team, we are very confident that this is the right way to go. So, we believe it's an extremely good company. We're in a very good position. We have a strong track record, a very strong track record of growth. We will be investing heavily in the next two years. And we know that we will go back to the, moving forward, we will go back to much stronger growth than what we have shown. Although what we have done is still quite good, we believe that we will do much better than that.

Thanks. It's James Gordon from Barclays. Maybe first question just on the organisational structure you mentioned, and I do follow the logic about having people in each geography running the geography. but then at least your reporting, I believe, is still injectables, RX and branded. So might you actually just change the company and make it by the three geographies rather than the three types of division? Because ultimately, who's ultimately responsible for injectables now? Because it seems like lots of people have got responsibilities, is the first question. Maybe if I break them up?