Said Darwazah - Executive Chairman Khalid Nabilsi - Chief Financial Officer Siggi Olafsson - Chief Executive Officer Riad Mishlawi - CEO, Injectables Division

James Gordon - JP Morgan Pete Verdult - Citi Max Herrmann - Stifel, Nicolaus Patrick Chen - Morgan Stanley James Vane-Tempest - Jefferies Nicholas Keher - RBC Capital Markets

Okay. Good morning, everybody. Can you hear me well? Or is like an echo? There is. Because maybe I've two mikes on. Is this better? Okay. So thank you all for joining us. As you know I'm now the Executive Chairman of Hikma and I'm joined this morning by Khalid, our Chief Financial Officer who will be providing the financial information for you. And I'm very, very happy that Siggi Olafsson is now our new CEO. I've known Siggi now for quite some time and he's one of the few people I would trust to have him lead Hikma into the future. So I'm very, very happy that Siggi is with us. And since he's only been for what two, three weeks now and although we've made him travel all over the world in those three weeks, but we're going to give him a break so we won't ask him to do any presentation today, but he will be available later on to answer some of your questions. So with that let us start. So on Slide 4, our Group highlights; so 2017 it was a tough year we all have to agree that was a tough year for both the industry and for Hikma and our performance was impacted by the competitive environment in the United States especially for the generic business which had a significant impact on that business and the delay in approval of our generic Advair was also another challenge for us. So these headwinds had a material impact on our share price this year. As you are well all well aware and now ultimately resulted in the impairment charge we announced today related to the West-Ward Columbus business. But despite all this, we always talk about our well diversified business model, the other business has delivered a quite solid performance. The branded business delivered stable revenues and profits and the Injectables were quite resilient despite the FDA approving some new entrants into some of our top products. So the generic market continues to be challenging but I'm confident that you're now in a much strong position to weather these headwinds. We're making some transformational changes across the Group to be more competitive and ensure we can deliver long-term sustainable growth, which I will discuss in more detail as we move along. Most importantly, we're generating and this is I think extremely important we're generating record cash flow and now have a very, very strong balance sheet providing financial and strategic flexibility for us as we move forward. So once again we restore the benefit of having this diversified business model into 2017 as you can see on Slide 5. Since the 90s when we entered the US and Europe, we have seen value in having a diversified business. At times when you have experienced challenging conditions in one business this has been offset by stronger performance in the other two. This has certainly been the case this year, with Injectables and branded both delivering strong profitability. Khalid will cover this in more detail a little bit. I will now provide an overview of the strategic highlights for each business segment this year. So starting with the Injectables business on the slide. This year we've increased by almost 2% our market share by volume remaining the third largest manufacturer of generic Injectables product in US. We also saw a small increase in our market share by value. Our volume growth was driven by new launches and increased demand for certain products and by our strong position as a leading supplier to the US hospital segment. We're gradually growing our market share by value, this remains our target. This will continue as we bring more differentiated and hard to make products to the markets. On Slide 7, we maintained an exceptionally strong operating margin above 40% this resilience reflects impart the breadth of our portfolio. We have a broad portfolio of more than 80 products or more than half of our portfolio, we have two or less competitors. We're also diversified by value across our portfolio. The majority of our products contribute individually less than $5 million each. Both of these factors reduce our concentration risk, there are other benefits than having a broad portfolio. Market dynamics for example can shift creating opportunities for products which previously only made a small contribution. This was the case with glycopyrrolate which has been our top selling product for a few years now. Our diversified portfolio is supported by our strong pipeline. In 2016 and 2017 we launched 26 new molecules in the US substantially more than any other generic, injectables manufacturer. The majority of our approvals are former [indiscernible] products that we have brought back to the market. Many of these products are small in terms of contribution but they enhanced the breadth of the portfolio and can present future opportunities as discussed in the previous slides. We are around halfway through bringing back the Bedford portfolio and expect to receive regulatory approval for a further 10 to 15 products in 2018. We have a strong pipeline with more than 100 of molecules in more than 200 presentations which will help us to deliver sustainable long-term growth. In 2017, we invested in our Injectables manufacturing facilities significantly increasing our capacity for prefilled syringes, infusion bags and most importantly lyophilized products. Our pipeline is aligned to our expanded capacity and we're already seeing the benefit of this investment. In October, we launched Pantoprazole a product that is on the shortage list of the US. Pantoprazole is a lyophilized product, we're manufacturing using the additional lyo capacity we brought online in Portugal this year. We've set out here an overview of the market dynamics in the US. You can see on the top right how the Injectables market has grown over the past three years, a CAGR of 5%. The Injectables market continues to grow and while we've seen a step up in new entrants we haven't seen a dramatic increase in price erosion. Things are more challenging for the non-injectables market, with price erosion across the industry reaching double digits in 2017. Customer consolidation into larger buying groups and accelerated FDA approvals have been two of the key drivers of this. So in this environment, we are focused on what we can control. During the year as you will see on the slide. We focused our attention on strengthening our relationships with our customers. While obvious the price of our products is very important, it is only one part of the relationship. We brought in new Head of Sales and Marketing for our generics business, he brings in unique perspective having previously been a customer of Hikma and this is helping us to tailor our offering to meet customer needs. We're starting to see benefits from this approach with our customers coming to us, asking for our help to resolve their issues. Further development of our R&D pipeline will help us to differentiate our product offering and our focus on efficiencies should help us to be more competitive on price when we need to be. We're also taking measures to improve the efficiency of the generics business. When we acquired Roxane, we committed to taking our $35 million of cost by the end of 2017. We achieved this target a year early, by the end of 2016. These savings have helped us offset greater than expected price erosion and new costs including those related to the generic Advair. We continue to look areas of cost saving and this will continue in 2018. In November, we announced that we will consolidate our manufacturing facilities in the US which we expect to complete in 2018. We'll be transferring products currently manufactured at Eatontown, our much larger facility in Columbus and our facility in Jordan. We have also decided to consolidate our warehouse and distribution facility in the US which will mean, we'll close our Memphis distribution center later on this year. So improving profitability is essential for the access of this business especially in the coming couple of years, when we expect a high level of price erosion to continue. Building a differentiated pipeline is essential to ensure sustainable growth in both revenue and profitability over the medium and long-term. This year we have strengthened the management of the generic business R&D program. Hiring a new Head of R&D, he has undertaking a detailed review of the pipeline. Following this review, we have decided to discontinue a number of products which no longer meet our return on investment criteria, while it is a significant reduction we still believe that we have a strong pipeline and our team can now focus on these highest value opportunities. We also now have capacity to add new products to our pipeline to deliver long-term growth. We're also focused on bringing first wave generics to the markets. On this slide, we thought it will be helpful to provide an overview of some of the larger paragraph for products which we have pursued through litigation. These products comprise about 40% of our pipeline. In 2017, we announced that we had reached a settlement agreement with Jazz for generic Xyrem a product with sales exceeding $1 billion annually. Commencing the 1 January, 2023 we will have the exclusive right to sell the authorized generic. While this is still far off this will still be a great opportunity. Turning to our branded business, in constant currency the MENA market continues to grow driven by strong underlying market conditions such as an ageing population and changes in lifestyle which are leading to increase in chronic diseases. The devaluation of the Egyptian pound in November 2016 continues to dampen growth in the region, in US dollar. If you exclude Egypt from the analysis however the MENA market grew by 2.3% in US dollars. In Saudi Arabia, our largest market in the MENA region our business outpaced market growth. We have a strong pipeline in Saudi Arabia which is driving our strong performance and enabling us to grow even though the pharmaceutical market remains flat. In 2017, we launched eight new molecules including six first generics. In Algeria, our second largest market in the MENA, we experienced challenging operating conditions during this year. Increased government import restrictions led to the loss of a group of our products, which in 2016 contributed to around 10% of our Algerian revenue. Despite this loss our business was still able to grow although by a small amount. To overcome this, we recently acquired a small ready-to-use oral [ph] manufacturing facility in Algeria, we expect to see the benefit of this acquisition with the return of our products to the market in the second half of 2018. In Egypt, the pharmaceutical market continues to experience significant growth and again our business has grown in double digits in constant currency. This year our team drove a strong increase in sales of some of our higher value products. We also saw an increase in our export business out of Egypt. In 2017, we reinforced our position as the partner of choice in the MENA expanding our partnership agreements with other pharmaceutical companies for their exclusive rights to distribute and market their patented products in MENA. In 2017, revenue from in-licensed products was just under 40% of total revenue for the branded business. We currently have 52 partners and more than 85 in-licensed products through partnership agreements. Increasingly, pharmaceutical companies are approaching us looking to form partnerships as we bring unique expertise and skills to the table. So let me sum up, yes we have faced a number of headwinds this year, but I believe that we're very well positioned for the future. We generated nearly $500 million in EBITDA this year and record cash flow from operations, meaning we have one of the strongest balance sheets amongst our peers and we have a clear strategy for growth. We brought in a number of experienced leaders with complementary capabilities from across the pharma industry to help us execute. Siggi is now on board and I'm confident that he's the right person to take us to the next level. I will now hand over to Khalid, who will run through the key financial highlights. Thank you.

Thank you, Said. Good morning everyone. I'll start with a quick overview of our performance in 2017. The revenue was $1.936 million down 1% despite challenging conditions in the US. Core operating profit was $386 million down 8% and core net income was $252 million down 9%. On a reported basis, we incurred an operating loss of $747 million due to the impairment of the West-Ward Columbus business which I will discuss in more details in just a bit. Core basic EPS was 105.0 cents per share down from 118.5 cents in 2016. The board is recommending a final dividend of $0.23 per share bringing the total dividend for the full year to $0.34 per share slightly ahead of the dividend paid 2016. Turning to injectables. Despite increased competition on certain high value products in our portfolio Injectables revenue was $776 million down just 1% from last year. US revenue decreased by 3% reflecting the increases in competition and a reduction in contract manufacturing. This was offset by strong growth in MENA and Europe. As expected MENA sales accelerated in the second half of the year across all markets reaching $103 million an increase of 13% or 23% in constant currency. In Europe, revenue increased 5% reflecting a good performance in Italy and Portugal partially offset by lower sales in Germany due to expected changes in government regulations. We maintained a very strong operating margin above 40%, demonstrating the strength and breadth of our product portfolio. We're guiding to injectable revenue of between $750 million and $800 million in 2018. We expect increased competition in the US will be offset by new launches and continued growth in the MENA and Europe. As we stated back in November, we expect core operating margin to return to more normalized levels in the low-to-mid 30s reflecting increased competition and a change in product mix. Generics, revenue was $615 million in 2017 up 2% from $604 million in 2016. In 2017, generic revenue included 12 months from West-Ward Columbus compared with 10 months in 2016. As Said highlighted, we faced significant headwinds during the year primarily due to customer consolidation and greater competition following an increase in generic drug approvals by the US FDA which resulted in greater than expected price and volume erosion. The generic business reported an operating loss of approximately $1.1 billion in 2017 due to an impairment charge, we took an initial impairment in the first half of $35 million primarily related to the West-Ward Columbus pipeline. In the second half of the year, as pricing pressure increased due to customer consolidation and the pace of FDA approvals accelerated will reduce our expectation for the West-Ward Columbus market portfolio and pipeline resulting in an additional impairment primarily related to West-Ward Columbus of $1.70 billion. Core generic operating profit was $22 million compared with $35 million in 2016, core operating margin was 3.6% compared with the 5.8% in 2016. In 2018, we expect generic revenues will be in the range of $550 million to $600 million. We expect core generic operating margin in the low single digits before adjusting for lower depreciation related to the impairment taken in 2017. Branded. Branded revenue was $536 million down from $556 million in 2016. In constant currency, branded revenues were up 2%. Except in Sudan we have seen currencies begin to stabilize in the MENA, the impact of negative movements was substantially less this year than in 2016. The growth on a constant currency basis reflected a strong acceleration in sales in the second half of the year particularly in Egypt, the GCC and Sudan partially offset by more challenging operating conditions in other markets. Growth was supported by new launches which contributed around $20 million in 2017. In constant currency, core operating profit grew 10% and core operating margin increased to 21.8%. this improvement in profitability reflects the benefits of more stable exchange rates in 2017 compared to 2016. In 2018, we expect branded revenue growth in the mid-single digits in constant currency as we benefit from new launches of our branded generics and in-licensed products across our key markets. As in 2017, we expect a stronger second half reflecting the usual seasonality of this business. Cash flows. Group operating cash flow was $443 million, a record for the Group. And significantly up from $293 million in 2016. The Group working capital days were 225 days at December 2017 down from 240 days at December 2016 primarily driven by an improvement in the US following the integration of West-Ward Columbus. CapEx. Capital expenditure was $107 million in 2017 down from $122 million, more than half of the Group CapEx was invested in the US to maintain and expand the manufacturing capacity and capabilities of our injectable and generic businesses. We also made investments to maintain and upgrade our facilities across number of our MENA markets. In Europe, we continue to invest in our Portuguese manufacturing side significantly increasing the capacity in 2017 and progressing the construction of a dedicate oncology facility. In 2018, we expect Group CapEx to be in the range of $120 million to $140 million. There has been a significant reduction in R&D expenditure following a detailed review of our generic business R&D program which reprioritize the high value of products and identify the opportunities for cost saving and efficiencies. Including the product related investments that we capitalized, the combined core R&D investment was $122 million around 6% of Group revenue down from 7% in 2016. Our balance sheet remains very strong, during 2017 net debt reduced to $546 million from $698 million. The decrease in net debt from December 2016 reflects the increase in cash flow from operations. We maintained our healthy leverage ratios ending the year at 1.2 times net debt to core EBITDA. We expect net finance expense to be around $55 million in 2018. Finally the outlook for 2018, this slide is for your reference and provides a summary of the outlook for each of our business segments which I've just run through. I will now hand over to our new CEO, Siggi Olafsson. He'll say a few words.

So Said said I didn't have to talk so Khalid surprised me. It's a good start, so first of all great to see you all. Some faces I've known from my previous companies I've worked with. Other new faces I'm looking forward to meet. Just want to say I've known Said and the family for long time, we met more than 10 years ago. We've had good relationships through the years. And I've admired Hikma throughout the years as a competitor in a way. Seeing how the company has been built over the 40 years from small Jordanian-based maybe not so in similar to my Actavis history which we started from a small base in Iceland and currently is Allergan in the US. So exciting company for me to join. I saw the opportunity, the ingredient. You saw the results here today. Strong balance sheet, any opportunity, diversified businesses into three regions when you have headwind in one, you can grow the other two. That excited me about joining. It's a company I think we can continue to grow, it really is a gem. We have a geographical footprint that nobody else has in the MENA region. We have a pipeline which we want to improve even further than we have today. We have a US generic footprint and hopefully the headwind will slow down over period of time and then it's good to have a strong business and our injectable business is showing amazing results, very proud of the injectable business what you saw here. So with all these things it's a pleasure and an honor for me to come in as a CEO at times like this and I'm looking forward to work with you all and happy to answer any questions. Thank you. Q - James Gordon: James Gordon from JP Morgan, a couple of questions please. One was just on revenue, so clearly you've given a 2018 outlook and talked about long-term growth outlook. Are you confident 2018 is the flow in terms of Injectables and non-injectables revenues? Should we definitely return to growth in 2019? Or is it still uncertain in light of the potential headwinds? The second question was just on cost savings and there was the nice chart about cost savings. Can you elaborate how much cost savings benefit we're already going to get in 2018 and how much is it incremental for 2019 at all? And then just the third question would be, contrasting Hikma, Siggi to your previous employer just how does the efficiency compared at the moment, in other areas you can see where Hikma is less efficient where there could be even more cost saving potential?

I'll take the first one. So this year we gave a wider range so to give a flow minimum and maximum for where we see, each of our segments. Now in terms of on a group level, if you look into this and put all these ranges into the group. You will be in the range of $1.85 billion to close to $2 billion and this is why we haven't given any guidance on the group. We believe that our guidance is fair and hopefully during the year we'll be narrowing down the range. In terms of cost savings, we have already taken down around 200 employees, as in the results of the natural attrition and reduction in layer of management in Roxane. However as we announced in November we're consolidating our operations in - in the legacy business and with the Roxane and this will results with further cost savings into 2018. We are not quantifying the number, but of course this will result in a good cost saving which is reflected in our guidance given that we have price erosion, lower sales, but we'll continue to have profits in 2018. Now in terms of future plans, of course Siggi has been here for three weeks and of course there will be some additional ways of how to drive efficiency.

One part of the first question was just, whether we're at the floor in 2018 on revenues for Injectables and non-injectables? Or with some of the headwinds you mentioned, is it possible that you don't actually return to very strongly in 2019 or are you now confident that 2019 will be revenue growth?

We still have not given any guidance in 2019, but we have many products that will come to the market which will help to offset that.

Yes we're as we've said before for the Injectables we've invested significantly in increasing capacity. There's huge capacity increase that is being put in Portugal. We're still waiting for how many leg of lines.

Close to four.

We're approved and we're waiting for another four. So there are a lot of capacity. The pipeline is coming through. Demand is increasing and we believe that our aggressive push into capacity is being rewarded by immediately being picked up, whenever the line is ready, immediately we fill it up with products.

Maybe a little bit on the, can you hear on the microphone? So quickly on the, have we reached the bottom on the US generic parts assignments from injectables. The good thing is obviously there's a short time reviewing the plan, we assume same price erosion in 2018 as it happened 2017, we're not assuming it's going to get any better this year, but basically staying the same. With regard to 2019 and we're not to going to guide on 2019 of course, but it's difficult to see it's going to be, I personally believe that price erosion is cyclic and how long the cycle is, it depends on the little bit on the environment. So it's now been about 18 months. We've had this headwind, we're forecasting it for another 12 months and forecast through 2019 yet I need to learn the numbers, learn the business, learn other things. But I believe that, with US generic business we're important part of the strategy of Hikma going forward. Your last question about comparing the Hikma business efficiency versus my previous companies. It's a little bit like comparing apples and oranges because it's based on where you're operating, it's based on how many plants you have, how efficient they are? I think about efficiency from three points. Is the cost of goods sold, which we have both really efficient plants. It's - I managed to see in Jordan and maybe our opportunity in the Roxane plant it's one of the most beautiful plants that I've ever visited. But we need to fill it up with more products and we knew that coming in. so I think there's opportunity in the cost of goods sold that will take time of course, but I feel we have the ideal scenario where we have a high quality relatively low correspond in global and the high quality bigger technically capable plant in Columbus, Ohio which we need to give more volume. The second part, I think we're going to think about this the product mix. First the product mix that we're offering especially on the huge scale, if it's in business say our infrastructure and that's something obviously after three weeks I haven't looked at. But I feel that we can take in a little bit more off more challenging products because at the end of the day, we're high quality company that's capable to develop product that not many of the companies can do. I feel we can differentiate our portfolio little bit more than we're doing today. On the last part of efficiency is the cost of the operation. Our sales and marketing [indiscernible]. Since our marketing is usually very similar of all generic companies you know that. The analyst you can pretty much see, it's not a big sales cost you need to the US generic business, this is the account management when you have the top three customers or 80% of the volume as you've known in the market and then appropriately overall in the market, you don't need to have 100 of sales reps on the street. But what Hikma has, that differentiates from others and this is one of my first impressions from beginning, is that the service level that the company is offering. So even though maybe relatively small to my previous companies, the service level and how I think Hikma feels about the customers, the patients and the doctors. It's outstanding and I want to maintain that while focusing on these three opportunities for efficiencies.

Thanks. Pete Verdult, Citi. Just a question for each of you. Siggi I realize you're in the job for 18 days so asking about your strategy probably little bit premature, but any - you alluded to a bit, but anymore but could you elaborate a bit more on the first impressions both positive and negative that you've seen and maybe given your experience, how do you see the US generics industry evolving. How do you see it playing out? I realize you haven't got a crystal ball, but just any thoughts you think how interestingly it's going to play out over the next couple of years. Khalid, previously everyone's been very focused on injectable margin because of glycol, neo and [indiscernible]. I think before you said the underlying margin for injectables you excluded those products was low 30s. Is that still the case? If you would take those products out, what would the underlying business?

This is what we've guided to you.

Okay, fine. And then lastly for you Said. Talking about the MENA market.

Thank you for remembering me.

Saving the best for last. I'm just going from - you can't blame me going from left to right. So on the MENA business you're talking about the underlying market growing at 7%, you're only growing at mid single-digit but your market share is less than 5%. So I realized the FX is crowding the underlying margin, but can you talk about how you see that MENA business evolving, if we, are in situation with more stable FX, can you get to a situation where you can grow ahead of the market, where do you see margins going?

If you guys allow me to start, my memory attention span is not that long these days. I think in MENA we have fantastic opportunities ahead of us. We have been investing; I mean we said before we invest significantly in bringing in outside helpers like McKenzie [ph] and someone to help us with efficiencies of the plants. And I think we have been targeting best practices in our plants and best efficiencies and we started with some and we're rolling through the other. So in terms of overheads we've managed to control the overheads and we believe we can do even better as we move forward to control and increase output. We have also historically the promotion business, the marketing business are typically pharmacists that are trained in promotion. The last four or five years we've been adding to the marketing and sales team fuel marketers people that have digital marketing experience, consumer market experience, telecom market experience. So we're creating a team that will be much more digitalized in terms of the promotion and we believe that the doctors in the regions are becoming more and more sophisticated and more digital. So we are very well positioned to be one of the leaders in our region to provide this. Where we believe with the same amount of reps, by using more digital techniques we can reach many, many more doctors thereby increasing the opportunities for prescription and it is still a market driven by prescriptions, physicians writing your products. So these two and I've something and third thing that we're seeing and we've talked about this before but now we're seeing at much more as the region becomes more and more difficult to business in, as the currencies continue to fluctuate, we're seeing a lot more appetite and the attention from not just smaller pharma companies but even some of the bigger pharma companies are saying, can we do something together where they concentrate on certain products and then they give us the other products to promote, so again big opportunities here. So I'm very, very optimistic about the MENA and what we have been doing over the last few years preparing and the opportunities we have now, I think are very. I'm looking forward to that and I think we can increase both the volume and the margins as we move forward.

So let me connect, so the first impression so as you mentioned three weeks I've been flying to different sites. I visited all the US sites. I've spent last week in Oman [ph]. Going in weekend I've to go still I haven't seen that but I have to say the first impression is great. The ingredients in the company are quite amazing. There's still, is a very strong entrepreneurial spirit in the company. People really are committed to the company of building it, you feel it, everybody though no matter if it is in Columbus, in Eatontown or in Oman [ph] or London. So it's very big culture that Hikma has, I think probably one thing I would like to get more out of the first review is, I would love to get more out of the pipeline. What I mean by that is, we're investing like the best in class of our peers. We're investing 6% to 7% of our revenue into R&D. we have really, really good people. I've been impressed with all the R&D people I've met. I've met from all the key sides. I met them. But for us to launch maybe only six to eight products per year and the pricing environment we have in the US, if want to continue the growth, just probably notch it up and I don't think we need to invest more. We need to get more efficiency, more output out of the R&D and maybe a little bit more focusing on differentiate portfolio because we have the ingredients, we have the expertise to deliver the most technically challenging products out there. So probably, first impression is to look over steering in that direction. I think I mentioned in the previous answer I've been impressed all over the world around the service level. How we think about the pharmacists, the doctors, the patients that is a key ingredient. And maybe the last point, I have the opportunity to last Thursday to get a review of the MENA business that's probably the business I was the least familiar with. Seeing individual market reviewing the kind of opportunity and I'm really excited about that part. So overall a great first 15 days, but I need to take a maybe a few more months to get what we need to be directing the business. On the US business, I'm an optimist, the US business has been a long time there and it's not ready for anyone. It's not ready for anyone. But sometimes in the length of applying, one-eyed man can be a king, and that's what we did here because our customers are looking for three things. They're looking for top quality. They're looking for the best service level and they're looking for price in the reverse order. It is the problem. We are really, really good in quality. We're really good in service and we need to be really, really good in price to be able to compete in the market. I think what we have is something special. I like the business due to the size. In my previous line, I had $6 billion headache in the US. Now it's only $600 million. So it is the right size, it's a differentiated business. I think we have the right team. The team has been - additional people have been added over the last month. We have a great knowledge. We always need to do better. We need to look at all the items I mentioned in the previous questions, but I'm an optimist for the market. I probably will not drive double-digit growth on a global level for Hikma in the next few years, but that's what why we have a differentiated being an Injectables brands at the same time. But I think US is still the biggest market. [Technical difficultly] generics, but also on the other side. There's 213 companies in the US offering generics. So you really have to stand out. You have to offer something special to be able to standout and I think Hikma can do that going forward.

It's Max Herrmann from Stifel. A couple of questions. Firstly, you presented I think you've done this before in Injectables market in the US volumes I guess each [ph] as versus sales, and there's clearly a differentiation in Hikma compared with, I guess, Mylan and some of the others in terms of - you've got higher volumes. But maybe some of those products in the higher price range, which is giving you the difference in volumes versus sales. So I just wondered is there a different portfolio that you could move to? Or is there are other areas to actually narrow that gap, I guess? And then secondly, just Siggi, you mentioned obviously, the potential to get more out of the R&D pipeline. I guess one of the elements of that has been significant investment in the respiratory area where we haven't yet seen any of the fruits from our investment. I guess does that mean it's not an issue of getting more out of the R&D pipeline, it's actually the elements of that pipeline at the moment have yet to bear fruit.

I'll start with the Injectables and maybe Riad, you can jump in, if there's something else you'd like to add. We've done three things for injectables. First of all, we've increased capacity for top line products like the lyophilized products and by definition, they're more expensive. So as the FDA approves all of our lyo lines and we're seeing our lyo products also being approved. Automatically it means we'll be start going up into more expensive for higher end products. The other thing what we've done is, we have concentrated tremendously on the cost, on the efficiencies and the facilities we talked about this before many times. The facilities we have in Portugal are extremely, extremely efficient. The cost of unit in Portugal is about a third of what it is in Cherry Hill. We believe that it is competitive with the rest Indian companies and by far cheaper than the best American companies. So by having this low, high efficiency and low cost that helps our low end products to continue to compete and grow and as we go there are opportunities here and there to improve the margins on these products. Thirdly, is the pipeline obviously most important is the new products and you've been saying we're getting the approvals like Pantoprazole and some other products that will be coming in, which are higher end products. So we believe that we can continue to grow the business both in terms of units but also increase the average selling price of every unit that we sell.

Only thing I would add in order to put forward, is investing in delivery system.

Yes.

So we're investing lot in [technical difficultly] put a lot of money to create new [technical difficultly]. Everybody [technical difficultly] shall I repeat? I was just saying. We invested a lot in delivery systems ready-to-use, we think the market is trending to go that way with the compounding business now being very, very strong in the United States. So hospitals, pharmacists, they prefer to have ready-to-use products and we're now investing a lot and building that capacities. We have a lot to capacity, prefilled syringes and we built up our capacity also in IV bags.

Maybe your point the last thing on the injectables. When you're comparing volumes and value, there's a direct relationship between value and technical challenges in developing that. With everything I've seen, I think we plan in the future the ones more technically challenging products on profit there's been some prefilled syringes in that. So in terms of respiratory and the pipeline, it's the best that's yet to come that's absolutely right. I'm excited about [indiscernible], there are challenges that we've spoken to the market about, pursue but there's challenges for everybody. This is not an easy product. This is very challenging product. If we DK [ph] study clinical endpoint study FDA hasn't been comfortable in approving anyone. So I think that speaks also about the quality of what the people we have, we have knowledge and capability. Obviously we need to wait for the final approval, but I feel that what we've seen and the introduction, we're on the right track. It could take a little bit time but we're on the right track. In terms of the pipeline, I think you saw 16 products on the slide that Said showed today. I think we wanted to give you a little bit of snapshot, what I've seen. There's obviously there's much more products in the pipeline, but I think - the more focus we give on the pipeline, I think the more we get out because we really have the investment, we have the people, we have the technology, we have the equipments, we have beautiful facility in Columbus and in Bedford, we really have the ingredients to doing more than we're doing today, that is not the criticism what we have today. Today is really good and but I just want more of the good thing.

Patrick Chen from Morgan Stanley. So I've three questions, first on branded margins. In 2016, you had about 26% margins on constant currency and this year you had 21.8%. Can you give us some color as to why we saw that decrease in margins? Second on generic margins, is it fair to assume that the 35% medium term EBITDA margins is no longer valid, invested case. Can you give a bit of color what you expect medium term for the generics business? And third for Siggi, at some point you talked about in your opening remarks. If there's headwinds in one geography, then you can grow at the other two. What type of opportunities do you see in the EU and in the MENA business? And do you have any sort of preference or any philosophy or organic versus inorganic growth there? Thanks.

I'll start on the branded margins. So when we say constant currency, we use constant currency for the year that precedes the currency year. So we take the average for 2016 and implement these and translate the financials base on 2016 financials in order to come up with a constant currency. Now if we want to compare apple to apple, we cannot say last year constant currency is compared to this year constant currency because last year it depends on the year before 2015, where the Egyptian pound was higher, I'll give you an example. If our sales in Egypt were $100 million, suddenly they're $50 million, if our profits were $30 million suddenly they're $15 million. This year it was a different comparison between 2017 and 2018 because the devaluation took place in November of 2016. So it's not the right comparison to compare the constant of this year with the constant of last year, but maybe we can take your through offline on this. In terms of the generic margin, of course the 35% now given what we have taken and changed our expectation for that generic business, this definitely will change and it all depends on the approval of - and time of when we're going to launch generic Advair, of course generic Advair will have high contribution to the margin, but we're not giving further guidance on the medium term at the time being.

So with regards to opportunities outside of US. I think the team has been amazing. First of all in MENA, what I saw there the agreement they have on biosimilars that was mentioned in the introductory remarks from Said. I think we are the ideal partner to be able, we have over 2,000 people in sales in the MENA region. We have an infrastructure to handle any brand product, biologic or anything like that. And we're seeing that, outside management. We're sought after partner because we're first class marketer in this region and I feel this is a growth opportunity to us. We're seeing this more and more in the both other companies big and small are looking forward to market their product, where they don't want to set operations in this region and we being in the top five in most of the markets, in all the key markets. It really helps us, yes we can differentiate and other things. We're taking more of Injectables projects in to the MENA, this always a localization, but what Hikma has done and I had admired and before I joined the company is, Hikma has reactively an invested in manufacturing plants where localization happens and many of the global companies, they leave the market. They give up on these markets where Hikma has really focused in being a local company and operate locally even though we're a global company. So I think we have a very bright future in the MENA region. With regards to Europe, we and - have been talking about there might be opportunities in some markets especially for injectable products. Many of the Nordic markets is like the markets in Dutch market, the German market, this [indiscernible] market we'll have to go further in Germany. The Dutch market has a very low injectable price. The Nordic market still has a reasonable price for injectable. There's still not that many approved in that market, so we need to be selective where we grow in, if we want to do this, simply adding further market in the first few weeks. I don't think Europe is out of the picture per se, with the portfolio that we have probably the first focus would be on the injectables part. James Vane-Tempest: James Vane-Tempest from Jefferies. Three questions if I can please. R&D cost came down has highlighted around $120 million for the rationalized pipeline. Just curious as the rationalization of that pipelines complete and how we should think about R&D spend for this year. Secondly on the guidance side, you've given branded revenue guidance and but I didn't see comment on margin guidance for that division, so how we should think about profitability?

Can you raise your voice? James Vane-Tempest: Yes, so branded margin guidance and the $55 million net interest expense, is that core? And are there any non-core interest charges expects while we've had for the past few years? And then finally on the strengths of balance sheet, what kind of opportunities can look at going forward and how you're thinking about capital allocation? Thank you.

Okay, so on the R&D as we've mentioned we went into our portfolio and we looked into the return on investments of each of our products that we have, so it was more of a focus R&D strategy where we want to rationalize R&D and this is how we brought [ph] it downward. Now as Siggi just mentioned, we want to be selective on the projects that we're going to bring and of course it's going to be, one of our key investments, how to grow the business. I'm not sure, whether you want to say.

I don't think that's fair. Coming in obviously about the patent with regards to the R&D rationalization it's what every company is doing, is to see what is the best internal investment, the reason why I felt could take the R&D investment down or simply they didn't feel the pipeline fasting up to compensate throughout the rationalization, that's why the investment was around 6%. But 6% investment in R&D is in line with the best of our peers. And so I felt the company coming in, have made the right calls on the pipeline. Will give us a stronger pipeline going forward because we feel that resources to do new products, new opportunities more challenging products exactly in line with the strategy [indiscernible].

In terms of branded margin, usually we give a guidance for two of our segment, so we don't give like three segments. So if you look into the branded is more of a stable margin, so it's nothing like - we can't talk more about. In terms of interest, interest we had $55 million of core interest. There will be some elements as a result of it, timing translated to the milestone payments. But I would rely on the core element for [indiscernible]. James Vane-Tempest: [Technical difficultly]

You've started already as expected Jim. So I think just to state the obvious it is great to come in a company with this kind of balance sheet. I've seen it a lot worse in my life. Just to state the obvious and even worse in 2008 to 2010 when [technical difficultly] and we were in the leverage buyout where we have a very, very significant challenges [technical difficultly] on the balance sheet. So it's a breadth of fresh air for me to come into this situation. I think we will look at both inorganic and organic growth. It's a little bit [indiscernible] to say how we're going to use this strong balance sheet going forward also need to planning, in order to use the - I've to say for me personally, this is one of the reasons why Hikma also [technical difficultly] management of the balance sheet and the strength of the balance sheet both in terms of the rapid cash flow over $440 million, think about that we have as more last year and secondly the lower debt that we have on the balance sheet. This is an amazing balance sheet and compared to some of our peers without mentioning any names. I think we have the flexibility that some of them don't have to look forward to both organic and inorganic growth.

Quickly to add, historically we have been a company that has done a lot of acquisitions obviously over the years, so we have that kind of experience and of course Siggi's background has a very similar one. So I think when you put all our resources together, with this flexibility we have, with this ability to freeze the borrowing by another whatever we never agree Khalid and I on much. But I think it gives us a lot of opportunity and we're in a very unique position to be in that and that opportunity. So as we work together and work closer together and we define our long-term strategy, we're in a very nice position and we have experienced and Siggi has experienced, so hopefully we can do some good things as we move on.

Nick Keher from RBC, just got two questions, please. First of all on generic Advair quite specific here I've got. Now you're redoing the trial, do you expect to make any major changes to first call itself besides the number of patients going in. And then secondly just on the generic pipeline opportunities say $30 billion that you got to go for, does that actually influence how much business you can win in the branded region considering you'll be making generics and whether people's products you might be looking to sell in that region and how did you manage that relationship? Thank you.

I'll just say on the R&D and the investment. I think we have, we always said we have three businesses. So our focus is just to grow the three businesses. Whether the generic, the branded and the injectable. So the capital allocation that regard us to focus on how to grow each segments individually. In terms of Advair do you want to?

So on Advair, we're not going to discuss the details or the protocols or anything as we said. We're within weeks, so we could be in the first patients into the new trial. We're taking the advice from the FDA to build that trial, but that's where we want to leave it, its clinical endpoint study. There is no [indiscernible] trials, that we need to do, but we take the advice from the FDA and we feel in the next two weeks we can start [technical difficultly] first patients in the trial and as we said in our press release as early as we can in 2019, we want to submit the result of it.

Sorry, just a follow-up on that one, then. Is it just a powering issue, you had during the original study?

We haven't given out what the issues were. I think I can say because they haven't trained me what I can say and what I can't say. I think there is misalignment between the company and that's why we approached the FDA how to interpret the guidance that the FDA issued on the approval. I think, that's as far as I can go, the interpretation of the guidance was difference for our submission versus how the FDA, now interprets the guidance.

Thank you.

Pete Verdult, Citi. Just a follow-up on that Siggi, so don't hit me on this. But just pretty question. I mean you've spent a lot of time today talking about the capabilities you have in R&D, yet you have ended up in a process dispute with the FDA on this clinical endpoint study now. It seems again I'm not the expert here. But from the guidelines they've given six week study, multi-dose placebo controlled. You're not going to go into detail but I suppose I'm just trying to work out, how you could end up missing - having a misinterpretation of the guidelines and what they want? So anything you could, if you're waiting to help, that would be help.

I think the only thing I can say is, the three companies that have submitted FDA, the three companies that have complete response. So I think all companies I think the being good in [technical difficultly] and reading guidance. And so I think this is basically it's a very challenging product. I have a full respect for the other two companies very capable, decent, development product. I think they're one of the best in the [technical difficultly], but there is always these are guidance problems, you have to remember these are guidance documents, these are not regulations. So implication within the guidance, so it's a bit long guidance recommending the interpretation is always happening when we follow regulatory guidance.

Do we have any calls? Anybody. Well thank you very much, everybody. We appreciate you being with us today. Thank you.