MEDA: Year-end Report, January-December 2014

Regulatory News:

MEDA: (STO:MEDAA)(Pink Sheets:MDABY)

January-December 2014[1]

• Net sales reached SEK 15,352 million (13,114), corresponding to an increase of 12% at fixed exchange rates compared to previous year.
• EBITDA, excluding non-recurring effects, was SEK 4,700 million (3,734), yielding a 30.6% margin (28.5).
• Non-recurring effects had a SEK 950 million impact on earnings before tax.
• Profit after tax amounted to SEK 402 million (805).
• Earnings per share reached SEK[2]1.23 (2.57). Excluding non-recurring effects, earnings per share totaled SEK 3.64 (2.57).
• Cash earnings per share amounted to SEK[2] 8.97 (8.57). Excluding non-recurring effects cash earnings increased by 8% to SEK 9.28 (8.57).
• Proposed dividend per share: SEK 2,50 (2.50).

Fourth quarter 2014[1]

• Consolidated net sales reached SEK 5,154 million (3,450), corresponding to an increase of 41% at fixed exchange rates compared to previous year.
• EBITDA, excluding non-recurring effects, was SEK 1,754 million (1,015), yielding a 34.0% margin (29.4).
• Non-recurring effects had a SEK 960 million impact on earnings before tax.
• Profit/loss after tax amounted to SEK -275 million (258).
• Earnings per share reached SEK[2]-0.93 (0.81). Excluding non-recurring effects, earnings per share totaled SEK 1.46 (0.81).
• Cash earnings per share reached to SEK[2] 2.86 (2.32). Excl non-recurring effects cash earnings per share rose by 32% to SEK 3.07 (2.32).

[1] For information about non-recurring effects, see page 7

[2] Recalculated to consider the bonus issue element in the 2014 new share issue

Webcasted presentation of the report on February 11 at 10:30 a.m. The presentation can be accessed at www.meda.se/sv/investerare, where a recorded version will also be available until the next interim report.

CEO statement

2014 was an exciting year for Meda. In October we completed the acquisition of Rottapharm, our largest acquisition to date and an important milestone. It is a transformational acquisition that propels us to a leading position in European specialty pharma by increasing our scale, reach and profitability potential. The integration process, initiated in the fourth quarter, is well under way and totally in line with our plans. In the fourth quarter we incurred SEK 631 million of non-recurring restructuring costs reflecting the measures taken. We have a long history of speedy and successful integration of acquired companies and are confident that we can meet expectations and reach cost synergies of SEK 900 million. The integration efforts will continue during the first half of 2015 and we expect to see a gradual impact of positive synergy effects already in that period.

For the fourth quarter we reached sales of SEK 5.2 billion implying full year sales of SEK 15.4 billion. Sales of Rottapharm products were traditionally strong for the fourth quarter. EBITDA adjusted for non-recurring items amounted to SEK 1,754 million leading to an EBITDA margin of 34%. For full year 2014 EBITDA reached SEK 4,700 million adjusted for non-recurring items, corresponding to an EBITDA margin of 31%. I am very satisfied that we have reached our targets for the full year at the same time as we have been in the phase of execution of the extensive integration process of Rottapharm.

Our prescription product area – Rx – currently makes up 60% of total sales and grew by 20% in Q4 as a result of the addition of the new Rottapharm products. Dymista continued to be a major contributor to growth in the quarter. Dymista showed steady growth in most markets where it has been launched. In line with our expectations the product reached the position as Meda’s top-selling brand in Q4 with sales of SEK 224 million. We are launching Dymista in more markets, both in Europe and in Emerging Markets during 2015.

The manufacturing problems we experienced with Elidel in 2014 seem to be coming to an end. Our manufacturing site in Mérignac, France, is manufacturing without constraints and our third-party manufacturer also resumed manufacturing of Elidel in January this year. The supply situation will gradually improve on a global basis and with both manufacturing sites running we expect to come back to a normal supply situation within the first half of 2015.

The importance of non-prescription products (Cx and OTC) have increased as a result of the Rottapharm acquisition. Due to the acquisition sales doubled in Q4 and the category now accounts for 36% of sales. We saw that the good development of CB12 continued with a 45% increase in fixed exchange rates in the last quarter of 2014.

As part of the financing of the Rottapharm acquisition we carried out a preferential rights issue during the fourth quarter. The rights issue was fully subscribed and gave Meda proceeds of around 2 billion SEK. This will strengthen Meda´s financial position and I am confident that we, due to our continued strong cash flows will be back at a debt level that allows for further major acquisitions already in 2016. For the full year 2014 Meda generated a free cash flow of SEK 2,901 million, corresponding to 8.97 SEK per share.

We are in a good position to continue to develop Meda into a world-leading specialty pharma company. 2015 will be a year that will be characterized by the integration process. Our focus is to leverage the combined product offerings and reach targeted synergies. For 2015, we expect sales of around SEK 20 billion (assuming current exchange rates) and an improved EBITDA margin compared to 2014.

Jörg-Thomas Dierks

CEO

The company’s auditors did not review this year-end report.

Forward-looking statement This report is not an offer to sell or a solicitation to buy shares in Meda. This report also contains certain forward-looking statements with respect to certain future events and Meda’s potential financial performance. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts and may sometimes include words such as "may”, "will”, "seek”, "anticipate”, "expect”, "estimate”, "intend”, "plan”, "forecast”, "believe”, or other words of similar meaning. These forward-looking statements reflect the current expectations on future events of the management at the time such statements are made, but are made subject to a number of risks and uncertainties. In the event such risks or uncertainties materialize, Meda’s results could be materially affected. The risks and uncertainties include, but are not limited to, risks associated with the inherent uncertainty of pharmaceutical research and product development, manufacturing and commercialization, the impact of competitive products, patents, legal challenges, government regulation and approval, Meda’s ability to secure new products for commercialization and/or development, and other risks and uncertainties detailed from time to time in Meda AB’s interim or annual reports, prospectuses, or press releases. Listeners and readers are cautioned that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statement. Meda does not intend or undertake to update any such forward-looking statements.

Meda AB discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication on February 11, 2015, at 08:00 CET.

Meda AB Pipers väg 2A, Box 906, 170 09 Solna, Sweden, Tel: +46 8-630 19 00, Fax: +46 8-630 19 50, E-mail: info@meda.se, www.meda.se, Corp. ID: 556427-2812

This information was brought to you by Cision http://news.cision.com