Financial information

Summary

On 16 April 2013, Actelion announced its financial results for the first three months of 2013. With total net revenues of CHF 433.2 million (3M 2012: CHF 417.5 m) and operating expenses of CHF 309.2 million (3M 2012: CHF 350.3 m), the company reported a first three months 2013 operating profit of CHF 124.0 million (3M 2012: CHF 67.1 m).

For the same period, Actelion reported a core earnings of CHF 168.5 million, an increase of 43 percent compared to first three months of 2012. Core earnings are defined as product sales minus Non-GAAP operating expenses. In local currencies, Core Earnings increased by 44 percent. Adjusted (non-US GAAP) diluted earnings per share for the first three months of 2013 were CHF 1.26 compared to CHF 0.80 during the same period last year.

On a US GAAP basis, net income for the first three months 2013 was CHF 97.9 million (3M 2012: CHF 45.1 m). Fully diluted earnings per share on a US GAAP basis for the same period were CHF 0.85, compared to CHF 0.38 for the first three months of 2012.

CHF million

Core Earnings Chart

In order to better compare the company's underlying performance, Actelion reports core earnings as product sales minus cash operating expenses, as well as other items that may distort comparison.

Core earnings for the first quarter of 2013 amounted to CHF 168.5 million compared to CHF 117.6 million during same period in 2012. This represents an increase of 44% in local currencies.

In CHF million

	Q1 2013	Q1 2012
Product sales	432.8	415.8
Core operating expenses	264.3	298.2
Core earnings (ex DDP)	168.5	117.6
Movement in doubtful debt provisions	0.1	(10.1)
Contract revenues	0.4	1.6
Stock option expenses	(13.6)	(12.6)
Amortization and depreciation	(18.6)	(20.4)
Arbitration settlement	(12.9)
Auxilium milestone payment	-	(9.1)
US GAAP Operating Income	124.0	67.1

Core EPS calculation	Q1 2013	Q1 2012
Core earnings	168.5	117.6
Non-GAAP financial result	0.8	(4.1)
Adjusted income before tax	169.3	113.5
Tax	(25.1)	(18.2)
Adjusted net income	144.2	95.4
No of shares in calculation	114.9	118.9
Core EPS (in CHF)	1.26	0.80

* DDP - doubtful debt provisions

CHF million

Net revenues

Product sales for the first three months of 2013 were CHF 432.8 million (3M 2012: CHF 415.8 m), an increase of 5 % in local currencies. Contract revenues for the first three months of 2013 amounted to CHF 0.4 million compared to CHF 1.6 million during the first quarter of 2012.

CHF million

Operating expenses

Total operating expenses for the first quarter 2013 were CHF 309.2 million compared to CHF 350.3 million for the first quarter of 2012, a decrease of 12%. In Q1 2013, the company incurred a CHF 12.9 million charge from an arbitration proceeding. Given the non-recurrent character of this charge, it has not been included in the calculation of core earnings.

Research and Development (R&D) expenses in the first quarter of 2013 were down 29% to CHF 92.4 million (Q1 2012: CHF 129.9 m). R&D expenses are expected to increase later in the year, in-line with the initiation of two new Phase III programs.

Non-GAAP R&D expenses for the same period, which excludes stock-based compensation expense and amortization and depreciation were down 24% in local currencies at CHF 80.4 million compared to CHF 106.7 million in the first quarter 2012 (Q1 2012 also excludes a payment made to Auxilium).

Selling, General and Administrative expenses (SG&A) for the first quarter of 2013 were CHF 145.6 million (Q1 2012: CHF 161.9 m), representing a decrease of 10%. SG&A expenses are expected to increase later in the year, in-line with the market introduction for macitentan (Opsumit), currently under regulatory review in the United States, the European Union as well as in Canada and Switzerland.

Non-GAAP SG&A expenses for the first quarter of 2013, which excludes stock-based compensation expense, amortization and depreciation and impact of doubtful debt provisions, were CHF 134.8 million compared to CHF 142.7 million in the first quarter 2012, a decrease of 4% on a local currency basis.

CHF million

Operating income

Operating income for the first quarter 2013 was CHF 124.0 million compared to CHF 67.1 million for the same period in 2012, an increase of 85%. In local currencies operating income increased by 86%.

Financial information

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