Revenue Up 28.5% Year-over-Year to RMB16,535 Million
Net Profit Attributable to Owners of the Company Up 59.6% Year-over-Year to RMB2,960 Million
Diluted EPS Up 56.3% Year-over-Year to RMB1.25
Adjusted Non-IFRS Net Profit Attributable to Owners of the Company Up 48.1% Year-over-Year to RMB3,565 Million
Adjusted Diluted Non-IFRS EPS Up 45.2% Year-over-Year to RMB1.51[1]
SHANGHAI, March 30, 2021 /PRNewswire/ -- WuXi AppTec (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 audited annual results for the year ended December 31, 2020 ("Reporting Period").
All financials disclosed in this press release are prepared based on International Financial Reporting Standards (or "IFRSs"), in currency of RMB.
2020 Financial Highlights
- Our China-based laboratory services revenue grew 32.0% to RMB8,546 million.
- Our CDMO services revenue grew 40.8% to RMB5,282 million.
- Our U.S.-based laboratory services declined 3.0% to RMB1,517 million, largely due to the impact of COVID-19 and clients' project delays.
- Our clinical research and other CRO services revenue grew 10.0% to RMB1,169 million.
[1] Full-year 2019 and 2020, we had a fully-diluted weighted average share count of 2,287,088,730 and 2,348,623,012 ordinary shares, respectively. |
[2] If prepared under Accounting Standard for Business Enterprises of PRC, the gross profit grew 25.3% year-over-year to RMB6,282 million. Gross profit margin was 38.0%. |
2020 Business Highlights
- Our global platform continued to enable innovation worldwide. During the Reporting Period, our overseas customers contributed RMB12,390 million in revenue, representing a year-over-year growth of 25.1%. Our China-based customers contributed RMB4,145 million in revenue, representing a year-over-year growth of 39.8%.
- We continued to expand our customer base and retain existing customers. During the Reporting Period, our existing customers contributed RMB15,504 million in revenue, representing a year-over-year growth of 32.1%. Our newly added customers in 2020 contributed RMB1,032 million in revenue.
- We continued to execute our "long-tail" strategy and increase our support to large global pharmaceutical companies. During the Reporting Period, our global "long-tail" customers and China-based customers contributed RMB11,108 million in revenue, representing a year-over-year growth of 28.3%. Top 20 global pharmaceutical companies contributed RMB5,427 million in revenue, representing a year-over-year growth of 28.8%.
- We continued to increase customer conversion and enhance synergies across our platforms. During the Reporting Period, customers using services from more than one of our business units contributed RMB14,352 million in revenue, representing a year-over-year growth of 27.6%.
China-based Laboratory Services: early adoption of business continuity plan; turning challenges into new opportunities
CDMO Services: accelerated growth offsets early COVID-19 impact during the first quarter of 2020
US-based Laboratory Services: long term commitment to build capability and capacity despite pandemic impacts
- Our laboratories and facilities in the U.S. provided services for 36 clinical stage projects, including 24 projects in Phase I clinical trials and 12 projects in Phase II/III clinical trials.
- We expanded our plasmid manufacturing facility, providing integrated services from bacteria banking, process development, research manufacturing and commercial manufacturing to our global customers. We also launched our fully integrated Closed Process CAR-T Cell Therapy Platform, AAV adherent manufacturing platform and AAV Vector Suspension Platform in both U.S. and China, enabling our customers to accelerate the timeline for cell and gene therapy development, manufacturing and release.
- In our Medical Device segment, the EU Medical Device Regulation changes and the adoption of chemical characterization are driving growth. This growth has also been fueled by our investment in industry leading capabilities and expansion within the China market.
Clinical Research CRO/SMO Services: maintained growth and achieved strong backlog momentum despite impact of the pandemic
- Our clinical development services (CDS) backlog increased approximately 48% on a year-over-year basis and our site management organization (SMO) backlog increased approximately 41% on a year-over-year basis.
- Our CDS team provided services to more than 130 projects for our clients in China and the U.S. and completed the registration trials for 6 products, including a first-in-class drug for the treatment of type II diabetes and a global customer's new drug for the treatment of pulmonary arterial hypertension, which obtained FDA approval. Our biometrics business has maintained strong momentum and achieved strong growth in both the U.S. and China.
- Our SMO team assisted in the market approval of 17 products for our customers, including the approval of a surgical implant for the treatment of glaucoma under real world evidence, the first bevacizumab biosimilar in China, and the first Chinese company's trastuzumab biosimilar in the EMA.
Expanded Capabilities Via Strategic Acquisitions
Continuous improvement in ESG performance
At the center of WuXi AppTec's Environmental, Social and Governance (ESG) strategy is its vision that "every drug can be made and every disease can be treated." In 2020, facing the sudden COVID-19 outbreak, we immediately took action to ensure the health and safety of our employees, and quickly launched our business continuity plan to sustain our support for the discovery and development of partners' innovative new drugs. We also formed a collaborative international alliance with industry partners and hosted a series of COVID-19 forums; helping to strengthen global collaboration and bring COVID-19 treatments to patients faster.
Throughout the year, we further rooted ESG initiatives in every aspect of our strategy and operations. We established an ESG Committee and established a series of policies intended to bring clarity and direction to our efforts, further enhancing our robust governance structure. On the environmental side, we promoted energy conservation and emissions reduction through technological upgrades and energy management, and we pushed forward green chemistry through biocatalysts and flow chemistry. Our greenhouse gas emissions fell by 6% from 2019. In tandem, we reiterated our commitment to an inclusive and diverse workplace that fosters collaboration among, and professional development for, all WuXi AppTec employees. As a result, by the end of 2020, the number of female employees increased to 53% of our workforce. We have been awarded "Employer Excellence of China" for six consecutive years and one of the "Most Attractive Employers in China" twice in a row. These efforts have been recognized for good ESG performance by various ESG rating agencies around the world.
Management Comment
Dr. Ge Li, Chairman and CEO of WuXi AppTec, said, "2020 presented unique challenges as the sudden outbreak of COVID-19 dramatically impacted all of us personally and professionally. The power of our geographically-diverse and comprehensive service platform truly came to bear, enabling us to turn the enormous challenges brought on by COVID-19 into new opportunities to support our customers and the patients we all serve. The continued strength of our operating platform once again proved not only to our customers, but also to the broader market the resilience of our business model. Over our twenty year history, WuXi AppTec has earned a solid reputation via our track record of continuously delivering stable and outstanding results for our stakeholders."
"Thanks to the combined efforts of all our employees and strong support from our global customers, we overcame the impact of the COVID-19 pandemic and continued to meet customer demand and project schedules. Through early implementation of our business continuity plans, we managed to ensure the health of our employees whilst continuing to operate safely. This allowed us to leverage our global presence and comprehensive capabilities to meet project delivery timelines and capture new business opportunities. During the Reporting Period, our revenue increased 28.5% over the prior year to RMB16,535 million and our adjusted Non-IFRS net profit attributable to owners of the Company increased 48.1% to RMB3,565 million."
"Relentlessly executing our 'Follow the Customer / Follow the Project / Follow and Win the Molecule' strategy, the power of our integrated business model allowed us to achieve remarkable results. During the Reporting Period, we added over 1,300 new customers and our total number of active customers now exceeds 4,200. Our China-based laboratory services and CDMO services realized robust growth and we gained market share across different business units. At our U.S.-based laboratories and clinical research services, we strengthened our capabilities and increased our backlog to support future growth. Meanwhile, we also continued to invest in building new capabilities and capacity globally. In early 2021, we acquired OXGENE, a pioneering United Kingdom-based cell and gene therapies contract research and development organization. We also announced the acquisition of a drug product manufacturing facility in Couvet, Switzerland. We believe these investments and geographic diversification will enable us to sustain our long-term growth objectives."
Dr. Ge Li concluded, "The fundamentals of our business remain very strong. Looking ahead, we will further increase investment in our R&D service capabilities and in our capacity of new modalities, in keeping with the industry trend and to better enable our customers in bringing innovative medicines to patients in need - realizing our vision that 'every drug can be made and every disease can be treated.'"
2020 IFRS Results
[3] If prepared under Accounting Standard for Business Enterprises of PRC, 2020 gross profit increased 25.3% year-over-year to RMB6,282 million. Gross profit margin was 38.0%, slightly lower than the 39.0% achieved in 2019. |
2020 Non-IFRS Results
2020 Adjusted Non-IFRS Results
Reconciliation of Non-IFRS and Adjusted Non-IFRS Net Profit Attributable to Owners |
|||
RMB Million |
Year Ended |
Year Ended |
|
Profit Attributable to the owners of the |
2,960.2 |
1,854.6 |
|
Add: |
|||
Share-based compensation |
587.8 |
161.2 |
|
Issuance expenses of convertible |
4.9 |
4.4 |
|
Fair value losses from derivative |
1,349.4 |
98.1 |
|
Foreign exchange related losses |
286.0 |
114.6 |
|
Amortization of intangible assets |
35.6 |
27.9 |
|
Goodwill impairment |
44.4 |
- |
|
Non-IFRS Net Profit Attributable the |
5,268.3 |
2,260.8 |
|
Add: |
|||
Realized and unrealized |
(1,716.9) |
107.4 |
|
Realized and unrealized share of |
13.9 |
39.3 |
|
Adjusted non-IFRS net profit attributable |
3,565.3 |
2,407.4 |
|
[4] If the sum of the data below is inconsistent with the total, it is caused by rounding. |
EBITDA [5] |
||
RMB Million |
Year Ended |
Year Ended |
Profit before tax |
3,369.4 |
2,337.0 |
Add: |
||
Interest expense |
196.0 |
128.0 |
Depreciation and amortization |
1,136.0 |
963.4 |
EBITDA |
4,701.4 |
3,428.4 |
% EBITDA margin |
28.4% |
26.6% |
Add: |
||
Share-based compensation expenses |
713.8 |
195.2 |
Issuance expenses of convertible |
6.6 |
5.9 |
Fair value losses from derivative |
1,349.4 |
98.1 |
Foreign exchange related losses |
337.0 |
140.4 |
Goodwill impairment |
44.4 |
- |
Realized and unrealized (gains)/losses |
(1,716.9) |
107.4 |
Realized and unrealized share of |
13.9 |
39.3 |
Adjusted EBITDA |
5,449.4 |
4,014.5 |
% Adjusted EBITDA margin |
33.0% |
31.2% |
[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 |
Year Ended |
Year Ended |
Year-over- |
Revenue |
16,535.4 |
12,872.2 |
28.5% |
Cost of services |
(10,280.4) |
(7,866.1) |
30.7% |
Gross profit |
6,255.0 |
5,006.1 |
24.9% |
Other income |
326.3 |
249.5 |
30.8% |
Other gains and losses |
283.2 |
(188.8) |
250.0% |
Impairment losses under expected credit |
(12.6) |
(43.2) |
-70.7% |
Impairment losses of goodwill, net of reversal |
(44.3) |
- |
100% |
Selling and marketing expenses |
(588.5) |
(438.5) |
34.2% |
Administrative expenses |
(1,869.7) |
(1,509.0) |
23.9% |
Research and development expenses |
(693.3) |
(590.4) |
17.4% |
Operating Profit |
3,656.2 |
2,485.7 |
47.1% |
Share of (losses) / profits of associates |
(76.8) |
18.6 |
-513.3% |
Share of (losses) / profits of joint ventures |
(13.9) |
(39.3) |
-64.6% |
Finance costs |
(196.0) |
(128.0) |
53.1% |
Profit before tax |
3,369.4 |
2,337.0 |
44.2% |
Income tax expense |
(383.1) |
(425.6) |
-10.0% |
Profit for the year |
2,986.3 |
1,911.4 |
56.2% |
Profit for the year attributable to: |
|||
Owners of the Company |
2,960.2 |
1,854.6 |
59.6% |
Non-controlling interests |
26.0 |
56.9 |
-54.2% |
2,986.3 |
1,911.4 |
56.2% |
|
[6] If the sum of the data below is inconsistent with the total, it is caused by rounding. |
Consolidated Statement of Profit or Loss (continued)[7] |
|||
Year Ended |
Year Ended |
Year-over- |
|
Weighted average number of ordinary |
|||
– Basic |
2,327,839,704 |
2,281,036,867 |
2.1% |
– Diluted |
2,348,623,012 |
2,287,088,730 |
2.7% |
Earnings per share attributable to |
|||
– Basic |
1.27 |
0.81 |
56.8% |
– Diluted |
1.25 |
0.80 |
56.3% |
[7] If the sum of the data below is inconsistent with the total, it is caused by rounding. |
|||
[8] In 2020, pursuant to the 2019 Profit Distribution Plan considered and approved by the shareholders' general |
Consolidated Statement of Financial Position[9] |
||
RMB Million |
December 31, |
December 31, |
2020 |
2019 |
|
Non-current Assets |
||
Property, plant and equipment |
10,137.1 |
7,666.0 |
Right of use assets |
1,519.9 |
1,564.4 |
Biological assets |
418.9 |
360.3 |
Goodwill |
1,391.8 |
1,362.2 |
Other intangible assets |
585.3 |
495.9 |
Interest in associates |
712.3 |
768.3 |
Interest in joint ventures |
52.5 |
25.2 |
Deferred tax assets |
300.9 |
262.2 |
Financial assets at fair value through profit or |
6,717.2 |
4,009.1 |
Other non-current assets |
1,395.6 |
62.4 |
Amount Due from Related Parties |
0.4 |
0.2 |
23,231.8 |
16,576.1 |
|
Current Assets |
||
Inventories |
1,933.8 |
1,208.3 |
Biological assets |
501.7 |
354.0 |
Contract costs |
250.3 |
180.2 |
Amounts due from related parties |
56.9 |
13.3 |
Trade and other receivables |
4,337.9 |
3,555.9 |
Contract assets |
542.0 |
379.4 |
Income tax recoverable |
19.1 |
6.3 |
Financial assets at FVTPL |
4,617.7 |
1,701.6 |
Derivative financial instruments |
562.8 |
36.8 |
Pledged bank deposits |
9.1 |
4.0 |
Bank Balances and Cash |
10,228.1 |
5,223.3 |
23,059.3 |
12,663.0 |
|
Total Assets |
46,291.2 |
29,239.1 |
[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 |
December 31, 2020 |
December 31, 2019 |
Current Liabilities |
||
Trade and other payables |
4,550.3 |
3,392.8 |
Amounts due to related parties |
23.8 |
24.8 |
Derivative financial instruments |
0.9 |
86.4 |
Contract liabilities |
1,581.0 |
897.1 |
Borrowings |
1,230.0 |
1,809.9 |
Income tax payables |
340.4 |
261.4 |
Financial liabilities at FVTPL |
16.5 |
19.5 |
Lease liabilities |
177.4 |
142.5 |
7,920.3 |
6,634.4 |
|
Non-current Liabilities |
||
Borrowings |
- |
762.4 |
Convertible bonds-debt component |
1,819.0 |
1,874.9 |
Convertible bonds-embedded derivative |
1,582.1 |
298.0 |
Deferred tax liabilities |
283.0 |
231.1 |
Deferred income |
682.0 |
667.4 |
Other long-term liabilities |
219.1 |
231.8 |
Financial liabilities at FVTPL |
- |
24.7 |
Lease liabilities |
1,067.1 |
1,104.7 |
Total Non-current liabilities |
5,652.3 |
5,195.0 |
Total Liabilities |
13,572.7 |
11,829.4 |
Net Assets |
32,718.5 |
17,409.7 |
Capital and Reserves |
||
Share capital |
2,441.7 |
1,651.1 |
Reserves |
30,052.1 |
15,661.1 |
Equity attributable to owners of the |
32,493.7 |
17,312.3 |
Non-controlling interests |
224.7 |
97.5 |
Total Equity |
32,718.5 |
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 4,200 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, issuance expenses of convertible bonds, fair value gain or loss from derivative component of convertible bonds, foreign exchange-related gains or losses, amortization of intangible assets acquired in business combinations and goodwill impairment. 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.