WE ARE
ALLIANCE
Alliance Pharma plc
Annual Report and Accounts 2022
CONTENTS
AN ALLIANCE OF PEOPLE, PARTNERS AND BRANDS, WORKING TOGETHER TO ACHIEVE MORE
How we report to our stakeholders
Annual Report
View our report online at alliancepharmaceuticals. com/annualreport22
Online Sustainability Report
Online sustainability report at alliancepharmaceuticals. com/sustainability
Our website
Visit our main site for further information at alliancepharmaceuticals.com
Company Overview
Who We Are 01
2022 Performance Overview 02
2022 A Year in Review 03
Purpose, Vision, Strategy, Values 04
Strategic Report
Chief Executive's Review 06
Market Overview 09
Our Strategy 12 Spotlight on…
Marketing excellence 18
Innovation and development 20
ScarAway™ and Kelo-Cote™
US acquisition 22
Culture, people and values 24
Key Performance Indicators 27
Sustainability 29 Spotlight on…
Managing our packaging estate 31
Developing our response
to climate change 33
TCFD 35
Stakeholder Engagement 40
Financial Review 42
Principal Risks and Uncertainties 47
Governance
Chair's Introduction 57
Our Governance Structure 60
Board of Directors 61
Governance 63
Nomination Committee Report 69
Audit and Risk Committee Report 72
Remuneration Committee Report 77
ESG Committee Report 86
Directors' Report 88
Financial Statements
Independent Auditor's Report 93
Consolidated Income Statement 102
Consolidated Statement of
Comprehensive Income 103
Consolidated Balance Sheet 104
Company Balance Sheet 105
Consolidated Statement of Changes
in Equity 106
Company Statement of Changes in Equity 107
Consolidated and Company Cash
Flow Statements 108
Notes to the Financial Statements 109
Additional Information
Unaudited Information 148
Five Year Summary 149
Advisers and Key Service Providers 150
Cautionary Statement 151
Glossary 152
WHO WE ARE
WE ARE ALLIANCE
Who We Are 01
2022 Performance Overview 02
2022 A Year in Review 03
Purpose, Vision, Strategy, Values 04
An international consumer healthcare company, empowering people to make a positive difference to their health and wellbeing, through making our trusted and proven brands available around the world.
A TEAM OF | BASED IN |
285 | 8 |
TALENTED PEOPLE | STRATEGIC LOCATIONS |
as at 31 December 2022 |
Working together to deliver value for our stakeholders through maximising the value of our brands.
INVESTING IN OUR PRIORITY BRANDS AND CHANNELS
INNOVATING TO ENSURE OUR BRANDS REMAIN
EXTENDING THE GEOGRAPHIC REACH
Outsourcing capital-intensive activities, such as manufacturing and logistics, to allow us to focus on what we do best.
2022 PERFORMANCE OVERVIEW
SEE-THROUGH REVENUE*
Who We Are 01
2022 Performance Overview 02
2022 A Year in Review 03
Purpose, Vision, Strategy, Values 04
£172.0m +1%
(2021: £169.6m)
UNDERLYING PROFIT BEFORE TAX*
£30.3m -28%
(2021: £42.2m)
UNDERLYING BASIC EPS*
4.28p -33%
(2021: 6.39p)
STATUTORY REVENUE
£167.4m +3%
REPORTED PROFIT BEFORE TAX
£5.2m -71%
REPORTED BASIC EPS
0.17p -88%
(2021: £163.2m)
(2021: £18.2m)
(2021: 1.37p)
FREE CASH FLOW* | NET DEBT* |
£15.8m -48% | £102.0m +17% |
(2021: £30.2m) | (2021: £87.0m) |
* Non-IFRS Alternative Performance Measures ('APMs'), (see note 31).
See-through revenue includes all sales from Nizoral™ as if they had been invoiced by Alliance as principal. For statutory accounting purposes the product margin relating to Nizoral™ sales made on an agency basis is included within Revenue, in line with IFRS 15.
2022 A YEAR IN REVIEW
Whilst trading performance in 2022 was not as strong as had been anticipated at the start of the Year, Alliance successfully completed a highly strategic acquisition of ScarAway™ and the rights to Kelo-Cote™ in the US in March and delivered the first new product launch from its innovation and development platform. The Group has robust plans in place to support a return to growth in 2023
› Consumer Healthcare see-through revenue1 up 3% to £125.2m (2021: £121.8m) (down 3% CER2) with 16% growth in Other Consumer brands partially offsetting softer performance in key brands.
› Revenue growth impacted by lockdown in China, associated temporary business-to-business ('B2B') disruption to the supply chain, slower recovery in B2B demand for Kelo-Cote™ and a one-off destocking effect, but boosted by the US acquisition and FX gains.
› Prescription Medicines performance stable, with revenues of £46.8m (2021: £47.8m), down 2% CER2.
› Underlying PBT declined 28% largely due to less favourable product mix with a lower proportion of Kelo-Cote™ and Amberen™ sales. Reported PBT declined 71% due to higher non-cash impairment charges of £18.2m, including £12.0m for Amberen.
› Free cash flow was lower by 48% at £15.8m, primarily reflecting the timing of sales and cash receipts. Cash from operations declined by 45% to £24.9m.
› Following the highly strategic US acquisition for $19.4m (£14.8m), net debt increased to £102.0m moving Group leverage to 2.57 times at 31 December 2022 (1.73 times at 31 December 2021).
› Integration of the US acquisition completed in just four months, successfully leveraging our established infrastructure, with revenues in line with expectations.
› Last remaining NizoralTM marketing authorisations transferred from Johnson & Johnson ('J&J') to Alliance in both China and Vietnam; new top-tier Chinese distributor appointed and manufacturing supply consolidation progressing well, which will result in improvements in cost efficiencies in the near future.
1 Non-IFRS Alternative Performance Measure ('APM'), (see note 31).
See-through revenue includes all sales from Nizoral™ as if they had been invoiced by Alliance as principal. For statutory accounting purposes the product margin relating to Nizoral™ sales made on an agency basis is included within Revenue, in line with IFRS 15.
2 Constant exchange rates.
›See our Spotlight on ScarAway™ and Kelo-CoteTM US acquisition on page 22
›See the Chief Executive's Review on page 06
› First new product launched from our innovation and development programme - Kelo-Cote™ Kids.
See our Spotlight on innovation and development on page 20
› Scope 1 and 2 emissions target set to achieve net zero in 2030, with an interim reduction of 65% by 2025.
See our Spotlight on developing our response to climate change on page 33
› Re-certified as a Great Place To Work® (GPTW) in the UK, China and Singapore with new certifications in the US and France and a Trust Index© rating of 79% (2021: 76%).
See our Spotlight on culture, people & values on page 24
› Updated and refined our Purpose, Vision and Strategy to better align with the evolving dynamics of the consumer healthcare market.
See Our Strategy on page 12
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Disclaimer
Alliance Pharma plc published this content on 21 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 March 2023 10:07:11 UTC.