Better health.
Within reach.
Every day.
© Hikma Pharmaceuticals PLC
Annual Report 2025
Hikma puts better health within reach, every day. By creating
high-quality products and making them accessible to those
who need them, we are helping to shape a healthier world
that enriches all our communities.
Better health.
Within reach.
Every day.
STRATEGIC REPORT
What we do
2
Executive Chairman and CEO statement
4
Our strategy
6
Our business model
10
Investment case
12
Our progress
16
Our markets
18
Stakeholder engagement
22
Business and financial review
28
– Group
29
– Injectables
30
– Branded
32
– Hikma Rx
34
– Group performance
36
Sustainability
40
– Sustainability at Hikma
42
– TCFD disclosure
66
Risk management
80
Going concern and longer-term viability
89
Non-financial and sustainability
information statement
92
CORPORATE GOVERNANCE REPORT
Executive Chairman’s overview
96
Corporate governance at a glance
98
Board of Directors
100
Executive Committee
102
Corporate governance
103
Committee reports
107
Annual report on remuneration
132
Other statutory disclosures
150
FINANCIAL STATEMENTS
Independent auditors’ report
156
Consolidated financial statements
162
Notes to the consolidated financial
statements
167
Company financial statements
212
Notes to the Company financial
statements
213
SHAREHOLDER INFORMATION
Shareholder information
219
Cover image
Merkuba Erceg is a Senior Lab Technician at
Hikma’s Zagreb R&D hub. She helps develop
standard, complex and differentiated generic
injectable medicines.
1.
Core results are presented to show the underlying performance of the Group, excluding the exceptional items and other adjustments set out in Note 6 of the Group consolidated
financial statements
2.
Core basic earnings per share is reconciled to basic earnings per share in Note 11 of the Group consolidated financial statements
3.
We have committed to reducing Scope 1 and 2 greenhouse gas emissions (market-based) by 25% by 2030, using a 2020 baseline year. For reporting in this Annual Report, we have used
data from January to September 2025 and extrapolated to estimate quantities for October to December 2025. More information on this methodology can be found on our website. We
have restated our 2020 base year emissions footprint to take into account our Xellia acquisition, 2024 and 2023 comparatives remain unchanged. More details are available on page 59
Driving top-line growth
6% Group core revenue growth
Increasing scale
of our manufacturing
through automation
and increased capacity
Expanding our portfolio
84 products launched
Adding differentiation
to the portfolio through
acquisition and partnerships
Investing for the future
4.5% of Group core
revenue invested in R&D
for continued growth
Positive outlook
as we build on strong momentum
with a clear strategy for growth
Non-financial
highlights
Strategic
progress
Value of our
donated medicines
$2.6m
2024: $4.1m
Reduction in Scope 1 and 2
GHG emissions since 2020
3
16%
2024: 17%
Employee engagement
score (2024)
73%
Revenue
$3,349m
+7%
2024: $3,127m
Core
1
revenue
$3,349m
+6%
2024: $3,156m
Operating profit
$542m
(11)%
2024: $612m
Core operating profit
$741m
+3%
2024: $719m
Profit to shareholders
$402m
+12%
2024: $359m
Core profit to shareholders
$503m
+2%
2024: $495m
Basic earnings per share
182c
+12%
2024: 162c
Core basic earnings per share
2
228c
+2%
2024: 224c
Dividend per share
84c
+5%
2024: 80c
Financial
highlights
1
Hikma Pharmaceuticals PLC |
Annual Report 2025
Strategic report
Financial statements
Corporate governance
We bring patients across North America, MENA
and Europe a broad range of generic, specialty
and branded pharmaceutical products.
What we do
US
Germany
Croatia
Italy
Tunisia
Jordan
Egypt
Algeria
Morocco
Portugal
UK
KSA
3
1
2
4
3
1
1
1
3
5
3
1
Global reach
9,400
Employees
29
Manufacturing plants
3
R&D hubs
825+
Products
Manufacturing plants
R&D hubs
Corporate HQ
Our markets
North America
Our large manufacturing facilities in
the United States (US) supply generic
and specialty products to the US
and Canadian markets across a broad
range of therapeutic areas, including
respiratory, oncology and pain
management. We have an R&D hub
in Columbus, Ohio.
MENA
We sell branded generics and in-licensed
patented products across the Middle
East and North Africa (MENA). We have
manufacturing facilities in six MENA
countries, including US FDA-inspected
plants in Jordan and Saudi Arabia. Around
2,000 sales representatives and support
staff market our brands to healthcare
professionals across 17 markets. We also
have an R&D hub in Amman, Jordan.
Europe and Rest of World
Our injectable manufacturing
facilities in Portugal, Italy and Germany
have a range of capabilities, including
dedicated capacity for oncology
and cephalosporins. These facilities
supply injectable products to North
America, MENA and a growing number
of markets in Europe. We also have
an R&D hub in Zagreb, Croatia.
c.2,300
Employees
59.0%
Group core revenue
c.5,700
Employees
32.5%
Group core revenue
c.1,400
Employees
8.5%
Group core revenue
4
1
Following the restructuring and centralising of R&D during 2025, we now have three key R&D hubs in Columbus, Ohio, US; Zagreb Croatia; and Amman, Jordan
2
Hikma Pharmaceuticals PLC |
Annual Report 2025
$3,349m
1.
During the year, the business formerly known as Generics was renamed Hikma Rx
Segmental core revenue
2025
($m)
2024
($m)
Injectables
1,423
1,324
Branded
849
769
Hikma Rx
1,037
1,037
Other
40
26
Total
3,349
3,156
Our business segments
Injectables
We supply hospitals across our
markets with generic and specialty
injectable products, supported by
our manufacturing facilities in the
US, Europe and MENA.
Read more on page 30
Branded
We supply branded generics and
in-licensed patented products,
supported by our local manufacturing
facilities, to retail and hospital
customers across the MENA region.
Read more on page 32
Hikma Rx
1
We supply oral, respiratory and other
generic and specialty products to the
North American retail market, leveraging
our state-of-the-art manufacturing
facility in Columbus, Ohio.
Read more on page 34
Our purpose
Our values
Better health.
Within reach.
Every day.
We are one Hikma, supporting each
other, driving onwards, growing our
business and pursuing our collective
promise – to put better health within
reach, every day. At the heart of this
are our three values: innovative,
caring and collaborative.
Innovative
Caring
Collaborative
A culture of progress and belonging
Injectables
$1,423m
$3,349m
Other
$40m
Hikma Rx
$1,037m
Branded
$849m
3
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Annual Report 2025
Strategic report
Financial statements
Corporate governance
Ensuring patients have access to the
medicines they need is at the heart of
everything we do. In 2025, we continued
to invest in our people, capabilities, and
infrastructure to strengthen our ability
to deliver high-quality, affordable
medicines across the
communities we serve.
Executive Chairman and
Chief Executive Officer’s statement
Hikma celebrated the twentieth anniversary
of our listing on the London Stock Exchange
during 2025 – a milestone I’m hugely proud of.
When we listed we had six manufacturing
plants, employed fewer than 2,000 people
and generated $262 million in revenue. We
now have 29 manufacturing plants, employ
over 9,300 people and generate over $3.3
billion in revenue with enviable margins and
cash generation. But more important than the
growth we have delivered is the impact we
have had on patients, providing vital, more
affordable medicines to those who need them.
I am proud and energised to have stepped
back into the CEO role at the end of 2025.
I have a strong team around me both at a
leadership level and throughout the business
and we share a strong belief in the potential
of our business and the many exciting
opportunities ahead.
Looking back at 2025
We grew Group revenue by 7% and Group
core operating profit by 3% in 2025, in line
with market expectations. I am pleased with
what we achieved, especially in our Branded
and Hikma Rx businesses, which performed
exceptionally well. We also faced some
challenges in our Injectables business,
but I am confident that we have solid plans
in place to strengthen the long-term
foundation of the business.
Injectables
Despite facing some headwinds in the year,
the Injectables business still delivered an
impressive 9% growth in revenue. Core EBIT
margin was 31%, lower than in pervious years,
reflecting our evolving geographic mix and an
increase in products either partnered with or
produced by third parties. This dynamic will
continue into 2026, as these products are
expected to make up an increasing
percentage of Injectables revenue.
We are investing significantly in this business,
with projects across our global footprint, and
a renewed focus on R&D. Our patent-
protected, ready-to-use, room temperature
stable vancomycin bag, Tyzavan
®
, was
launched in late 2025 and we are excited for
the potential of this game-changing sepsis
treatment. The team who developed
Tyzavan
®
, based in our R&D facility in Zagreb,
is working to build a pipeline of similarly
differentiated injectable products and
we are excited to be investing behind
these opportunities.
Work on our Bedford plant continues at pace
and we continue to expect full commercial
production to commence in 2028.
Branded
Our Branded business delivered another
strong performance in 2025, growing revenue
10% and core operating profit 19%,
reinforcing its position as a leading healthcare
company and trusted partner across MENA.
I am immensely proud of this business:
Branded consistently delivers growth
at excellent margins and our reputation
and scale in the region sets us up for
continued success.
In 2025, we continued to invest in expanding
our portfolio, introducing new products to
meet the growing needs of patients and
healthcare systems in the region. We are also
launching products beyond medicines, such
as diagnostics tools, through our partnership
with Guardant Health, as we evolve into a
full-service healthcare company in MENA.
With all of this, our focus on quality,
affordability, and local partnerships remains
central to our success, enabling us to
maintain a leading position, and I am thrilled
to say that we have recently become the
largest pharmaceutical company in MENA.
2
Hikma Rx
During the year we renamed our US
non-injectables business Hikma Rx,
previously Generics. This is an important
evolution as the new name better reflects this
business’s focus on delivering high-quality,
differentiated non-injectable prescription
medicines. In 2025, Hikma Rx has continued
to be a driver of profit growth and a
cornerstone of our strategy.
We are investing in this business, expanding
our portfolio to meet the evolving needs of
patients and healthcare providers. Our base
portfolio of more complex products such
as nasal sprays and inhalers has been
performing well, and at the same time, we are
adding more complexity through targeted
R&D initiatives, particularly for complex nasal
spray and inhalation products.
Looking ahead, carrying out contract
manufacturing (CMO) services will be
increasingly important for this business as we
leverage our expertise and infrastructure to
drive revenue growth and deliver efficiency
and innovation across the segment. The fact
that we are guiding this year to core operating
margin of close to 20% is testament to the
improving quality of this business, which is
absolutely core to Hikma’s growth plans.
Group synergies and R&D
Hikma’s three businesses are each distinct
in their own way, but with many shared
attributes. Ultimately, each business is
developing, manufacturing and
commercialising life-saving medicines.
As we strive to optimise our business
performance, we are looking to capture
synergies across our global operations.
In 2025, we centralised the R&D function
under a global structure, led by our President
of Hikma Rx, Hafrun Fridriksdottir. Hafrun has
a strong background in managing global R&D
teams and has a proven record of product
approvals worldwide. Under the new
structure, we now have three main areas of
focus: Injectables; Respiratory, nasals,
semi-solids and liquids (RNSSL); and Solid
Orals, all supported by R&D Operations and
Regulatory Affairs teams. Working
collaboratively together, this new global R&D
4
Hikma Pharmaceuticals PLC |
Annual Report 2025
team will prioritise accelerating the delivery of
more high-value and increasingly complex
products across our global businesses.
We are also working to integrate AI into our
operations and have an AI Advisory Board
which oversees AI learning, digital
applications and governance.
Every stakeholder counts
From patients and healthcare professionals
to colleagues, shareholders, and the
communities we serve, we recognise that our
success depends on creating value for each
of them. We listen carefully and consider all
these stakeholders, and you can find out
more on our approach to these relationships
in the stakeholder section of this report on
pages 22 to 27.
We have also refreshed our ‘Acting
Responsibly’ framework during 2025. Access
to medicine is the guiding principle of the
framework, supported by environment,
quality and people.
At Hikma we are proud to be an incredibly
diverse company, with people from all
backgrounds contributing to our success.
We also continue to closely monitor and
focus on ensuring we have strong
representation of women throughout the
Group – you can see the detail behind this
in the corporate governance section of this
report, on page 94.
Governance updates
Our Board provides the strategic oversight,
diverse expertise, and independent
judgement needed to help guide the Group
and support our management team. By
fostering robust governance and constructive
challenge, the Board ensures that our
decisions align with our purpose and create
sustainable value for all stakeholders.
This year, the Board has had the chance to
see more of the operations of the Group,
including a strategy meeting at our Portugal
facility – an exciting opportunity for Board
members to engage with the wider business.
The Board also approved the Group Capital
Allocation Framework, which ensures we
have a disciplined strategy for deploying,
managing and returning capital in a manner
that supports long-term growth, financial
resilience and shareholder value creation.
During 2025, John Castellani and Nina
Henderson retired from the Board, having
each served for nine years. The experience,
thought and dedication they have brought to
the Board and its committees has been of
great value both to me as Chairman and
to Hikma. I thank them for their service
to the Group. Riad Mishlawi also stepped
down from the Board and as CEO at the
end of 2025.
I took over the CEO role in December and, at
the same time, we appointed Khalid Nabilsi,
CFO, to the Board of Directors. Khalid brings
over 20 years of experience at Hikma and
will be taking on broader responsibilities,
detailed below.
I intend to remain in the CEO role for around
the next two years, as we look to rebuild
confidence and execute our growth plans.
To ensure I am fully focused on the CEO role,
I am stepping down as Executive Chairman.
Victoria Hull will become Non-Executive
Chair and Douglas Hurt will become Senior
Independent Director.
Leadership changes
We are making several adjustments to
Hikma’s leadership, both to help me in the
day-to-day management of the business and
to ensure that we start moving faster and
more effectively.
We have created two new Deputy CEO
positions. Mazen Darwazah, currently
Executive Vice Chairman and President of
MENA, has been appointed Deputy CEO,
MENA, with responsibility now for all of our
activities in MENA, including MENA Injectables.
Khalid Nabilsi, currently CFO, will take on the
role of Deputy CEO, North America and
Europe and will oversee all Hikma’s activities
in North America and Europe. He will step
down as CFO.
The Board has initiated a search for a new
CFO. While the search is ongoing, Areb Kurdi,
currently VP, Group Financial Controller, will
become Acting CFO.
Hafrun Fridriksdottir, currently Global Head
of R&D and President, Hikma Rx, will add
management of our Injectables commercial
activities in North America to her
responsibilities and will become President,
North America in addition to her R&D role.
For further information on these leadership
changes, please refer to the Nomination and
Governance Committee report on page 107.
A strategy for growth
Our ambition is clear: to build on our long
history of success and ensure that Hikma
continues to deliver sustainable growth and
long-term value. We will achieve this by
investing in innovation, expanding our
capabilities, and deepening our presence
across our key markets.
2026 will be a year where we focus on
investing to deliver that growth, in particular
in our Injectables business.
We have an exceptional team at Hikma and
our people are critical to our ongoing
success. I’d like to thank all my colleagues for
their sustained efforts to ensure that Hikma
continues to grow and keeps putting better
health within reach, every day.
Said Darwazah
Executive Chairman and CEO
Injectables
42.5%
$1,423m
Branded
25.3%
$849m
Hikma Rx
31.0%
$1,037m
Other
1.2%
$40m
Total
$3,349m
Injectables
52.3%
Branded
26.5%
Hikma Rx
21.2%
1.
Core operating profit is $741 million. Before unallocated corporate costs of $97 million
and operating loss from Other business of $6 million, core operating profit contribution
from business segments is $844 million
Core revenue – 2025
Core operating profit – 2025
1
2.
Based on internal analysis using data from the following
source: IQVIA MIDAS® Monthly Value Sales data for
Algeria, Egypt, Jordan, Kuwait, Lebanon, Morocco,
Saudi Arabia, Tunisia and UAE, for the period: MAT
November 2025, reflecting estimates of real-world
activity. Copyright IQVIA. All rights reserved
5
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Annual Report 2025
Strategic report
Financial statements
Corporate governance
Our strategy
We aim to deliver consistent and profitable growth by building
a leading generics and specialty pharmaceutical company,
putting better health within reach, every day.
Our
purpose-led
strategy
People and responsibility
Diversify and
differentiate
Strive for excellence
Our strategic pillars
6
Hikma Pharmaceuticals PLC |
Annual Report 2025
Find out more about our KPIs on page 16
Find out more about our risks on page 82
Find out more about our
strategic progress on page 28
operational efficiencies and embrace new
technologies, maintaining our high quality levels
our broad portfolio and strong
commercial capabilities
KPIs
–
Core revenue
–
Core operating profit
–
Return on average
invested capital
a more differentiated pipeline
into adjacent businesses and geographies
KPIs
–
Percentage of revenue from
new business over three years
our people and cultivate a unified culture
responsibly across our local markets
and communities
KPIs
–
Employee engagement
and enablement
–
Reduction in Scope 1
and 2 emissions
Enhance
Leverage
Develop
Expand
Empower
Act
Our approach
7
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Financial statements
Corporate governance
Our new unified R&D organisation optimises our resources,
strengthens our capabilities, standardises the product
selection process across our technical platforms, accelerates
time-to-market and supports our strategic growth priorities.”
Hafrun Fridriksdottir
President, Hikma Rx and Head of Global R&D
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Annual Report 2025
Our purpose in action
Investing in R&D to drive
high-value pipeline delivery
Hikma is committed to building
a differentiated pipeline of
complex products.
Under a newly unified global R&D
organisation, we have consolidated
research capabilities into a single Group
structure with three hubs in Ohio, US,
Jordan and Croatia, specialising in
Respiratory, nasals, semi-solids and
liquids (RNSSL); Solid Orals and
Injectables. This reorganisation
optimises resources, strengthens
capabilities, standardises product
selection across technical platforms,
and accelerates time-to-market,
supporting strategic growth priorities
for our Injectables, Branded and
Hikma Rx businesses.
Complex products creating
significant market opportunities
Our pipeline focuses on both simple
and technically complex, differentiated
products addressing unmet medical
needs, for example:
We are developing a single-dose
epinephrine nasal spray for emergency
anaphylaxis treatment. With the US
epinephrine auto-injector market
forecast to be valued at approximately
$1.2 billion by 2032
1
, this innovative nasal
alternative offers substantial benefit
through improved ease of administration
and patient compliance.
Tyzavan® our reformulated vancomycin
ready-to-use injectable medicine is
another example of how we are adding
complexity to our product portfolio.
This patent-protected, ready-to-use,
room temperature stable bag addresses
critical hospital needs for treating serious
infections including septicaemia.
1.
www.pharmiweb.com/press-release/2024-06-17/epinephrine-auto-injectors-market-set-for-lifesaving-
growth-at-49-cagr-reaching-us-32-billion-by
99
approvals
84
launches
9
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Annual Report 2025
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Financial statements
Corporate governance
Hikma Rx
Branded
Injectables
Our business segments
Our resources
Better health within reach every day
Our business model
Our diversified business model allows us
to respond to the opportunities and threats
we face, while delivering for our stakeholders.
People
We have a highly skilled, diverse
and effective workforce. Through
continuous investment in the
development of our people and
by hiring new talent, we secure
our future.
Relationships
Strong relationships with
regulators, customers and health
authorities across all our markets,
and successful collaborations
with industry partners, enable
us to deliver on our purpose.
Values
Our culture of progress
and belonging is backed
by our values – innovative,
collaborative and caring.
Capabilities
We have extensive commercial,
R&D, manufacturing and distribution
capabilities across our markets,
focused on quality and efficiency.
Financial
Investment in R&D, manufacturing
facilities, partnerships and M&A
collectively enable us to expand
our product portfolio, technical
capabilities and operations.
10
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Annual Report 2025
What we do
Sustainable business
We act responsibly, advancing
health and wellbeing,
empowering our people,
protecting the environment
and building trust through
quality in everything we do.
Return on average
invested capital
We have a strong track
record of generating high
returns on our investments.
Empowering our people
By focusing on the development
of our people, we provide long
and rewarding careers for our
talented and diverse workforce.
Patient benefits
We provide patients across
our markets with high-quality
medicines.
Develop and innovate
We are developing a more differentiated
pipeline to meet the evolving needs of
patients and healthcare professionals
through investments in R&D, partnerships
and strategic acquisitions.
Market across geographies
We distribute our products through
experienced sales and marketing teams.
In the MENA region, where we have a focus
on branded products, around 2,000
representatives and support staff market
our brands to doctors and pharmacists,
while our sales teams in North America
and Europe sell to wholesalers, pharmacy
chains, governments and hospital
purchasing organisations.
Manufacture and maintain quality
Our extensive and high-quality
manufacturing capabilities are at the heart
of what we do. We have 29 plants across the
Group that supply our global markets with
a broad range of injectable, oral, respiratory
and other generic and specialty products,
including 13 US FDA-inspected plants and
12 EMA-inspected plants.
Offer a broad product portfolio
We offer a broad and differentiated
portfolio of more than 825 products.
It includes high-quality generic and
branded generic medicines, and
a growing number of in-licensed, innovative,
specialty and compounded products.
16%
Reduction in Scope 1
and 2 emissions since
base year 2020
16%
1
Return on average
invested capital
825+
Products
73%
Employee
engagement
score (2024)
69%
Employee
enablement
score (2024)
The value we create
Find out more about our KPIs on page 16
1.
See reconciliation on page 37
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Financial statements
Corporate governance
Trust, quality and agility
Innovation through partnerships
and acquisitions
A solid platform with a
unique business model
Increasingly diverse
portfolio and pipeline
A strong business model with significant opportunities
to further enhance our portfolio, drive growth and
deliver value for shareholders.
84
launches in 2025
300+
products in our pipeline
Investment case
Leading market positions
–
7th largest generic pharma company in the US
1
–
Largest pharma company in MENA
2
Expanding manufacturing footprint
29 plants across our markets, with additional
facilities being established
Global player with
local expertise
–
A broad portfolio
that is tailored to local market needs
–
Aspiration to spend to c.5% to 6% of Group revenue
on R&D
to ensure the consistent development of
new products
–
Growing presence in specialty, complex and higher-
value products
, which offer less competition and
higher margins
–
Strong momentum in new product launches
across
our markets
We are a
trusted partner
known
for our commitment to quality
and reliability of supply
We work closely with governments
and regulators to ensure highest
quality
standards
Agile supply chain, flexible manufacturing
and
leading technical capabilities
1.
IQVIA MAT November 2025, includes all generic injectable and generic non-injectable products, by sales
2.
Based on internal analysis using data from the following source: IQVIA MIDAS® Monthly Value Sales data for Algeria, Egypt, Jordan, Kuwait, Lebanon, Morocco, Saudi Arabia, Tunisia and
UAE, for the period: MAT November 2025, reflecting estimates of real-world activity. Copyright IQVIA. All rights reserved
3.
Core results are presented to show the underlying performance of the Group, excluding the exceptional items and other adjustments set out in Note 6 of the Group consolidated financial
statements. Core results are a non-IFRS measure. See page 37 for a reconciliation to reported IFRS results
4.
Core EBITDA is core operating profit before depreciation and soſtware amortisation
5.
See reconciliation on page 37
–
Enhancing our pipeline by adding innovative products
through
value-creating partnerships
–
Adding to the strength of our base business through
strategic acquisitions
Our presence and positioning
Broad portfolio and growing
investment in R&D
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Hikma Pharmaceuticals PLC |
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Our
purpose-led
strategy
Diversify and
differentiate
Strive for
excellence
People and
responsibility
Our balance sheet strength
Our strategic approach
A clear strategy for growth
Proven track record and
strong financial position
+7%
Five-year revenue
compound annual
growth rate (CAGR)
+6%
Five-year core
3
EBIT CAGR
25.5%
Core EBITDA
3,4
margin
16.0%
Return on average
invested capital
5
1.6x
net debt/core EBITDA
4
–
Enhance
operational efficiencies and embrace new
technologies, maintaining our high quality levels
–
Leverage
our broad portfolio and strong
commercial capabilities
–
Develop
a more differentiated pipeline
–
Expand
into adjacent businesses and geographies
–
Empower
our people and cultivate a unified culture
–
Act
responsibly across our local markets
and communities
–
Strong cash generation
with $436 million operating
cash flow in 2025
–
A strong balance sheet that provides financial
flexibility to support future growth.
Delivering growth
and high returns
Strategic execution driven
by our three pillars
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Financial statements
Corporate governance
Investing in manufacturing
excellence at Hikma
Our purpose in action
Manufacturing excellence sits at the
heart of Hikma’s operations. With 29
manufacturing plants across the US,
Europe and the MENA region, our global
production network represents a critical
core strength that underpins our
competitive advantage. As a global
leader with local reach, we tailor
production to meet the specific needs
of local markets while maintaining
world-class standards.
Ongoing capital investment
We have always committed significant
resources to expand manufacturing
facilities globally, while ensuring we
maintain the highest levels of quality. By
investing in our manufacturing network,
we are better able to serve hundreds of
millions of patients worldwide.
Throughout 2025, we made substantial
capital investments in manufacturing
infrastructure to enhance capabilities
and capacity.
Selected highlights
Columbus, Ohio, US
– Expanded our
Hikma Rx site to support our contract
manufacturing (CMO) business, an
increasingly important contributor
to segment growth over the medium
to long term.
Algeria
– Successfully upgraded our
existing facility to a fully-contained oral
oncology manufacturing plant,
strengthening and expanding our
oncology business in Algeria.
Tunisia
– Launched an updated
manufacturing plant to produce general
formulation medicines, expanding our
capacity to serve North African patients.
Looking ahead
We remain committed to expanding our
manufacturing footprint and advancing
technology across our global network.
In 2026, strategic investments in our
injectables facilities in the US and
Portugal will enhance capacity and
strengthen our ability to meet growing
demand in these key markets.
Manufacturing excellence is the
foundation of everything we do at Hikma.
Investing into facilities worldwide enable
us to combine cutting-edge technology
with local expertise, delivering the
high-quality medicines patients need
while driving sustainable growth
for our business.”
Khalid Nabilsi
Chief Financial Officer
14
Hikma Pharmaceuticals PLC |
Annual Report 2025
Hikma Pharmaceuticals PLC |
Annual Report 2025
Strategic report
Financial statements
Corporate governance
15
Our progress
We are delivering on our strategy and measuring
our performance with key performance indicators (KPIs).
Strategic priority
Strive for excellence
KPI
Core
1
revenue
($m)
Core
1
operating profit
($m)
Return on average
invested capital
(%)
$3,349m
$741m
16.0%
2,553
2,517
2,875
3,156
2024
2023
2022
2021
2025
3,349
632
596
707
719
2024
2023
2022
2021
2025
741
17.6
15.6
17.7
16.9
2024
2023
2022
2021
2025
16.0
Description
Total annual core revenue
generated across all businesses
Core operating profit
Core operating profit aſter tax
divided by average invested capital
(calculated as the average of the
opening and closing total equity
plus net debt
2
)
Why is it a KPI?
This measures our ability to
maximise value from our current
product portfolio across our global
markets and generate revenue
from new launches
This measures our ability to grow
revenue and maintain quality
while delivering efficiencies
and ensuring cost control
This measures our efficiency in
allocating capital to businesses
and projects
2025
performance
Group core revenue grew 6%,
reflecting good growth for
Injectables and Branded and a
solid performance from Hikma Rx
Group core operating profit grew 3%
as good performances from Branded
and Hikma Rx were partially offset by
headwinds faced in Injectables
Continue to generate high
levels of return
Link to remuneration
R
R
1.
Core results are presented to show the underlying performance of the Group, excluding the exceptional items and other adjustments set out in Note 5 in the Notes to the consolidated
financial statements
2.
Net debt includes long and short-term financial debts and lease liabilities, net of cash and cash equivalents. Net debt excludes acquired contingent liability and contingent
consideration liability
3.
The base year 2020 emissions and energy footprint was adjusted in 2025 to account for the Xellia acquisition of sites in the US and Croatia. More details can be found on page 60
4.
For reporting in this Annual Report, we have used data from January to September of 2025 and conducted an upliſting exercise to estimate quantities for October to December 2025
More information on this methodology can be found on our website
16
Hikma Pharmaceuticals PLC |
Annual Report 2025
Diversify and differentiate
People and Responsibility
New business
(%)
Employee engagement (2024)
(%)
Scope 1 and 2 (market-based)
emissions reduction
(%)
19%
1 January 2023 to 31 December 2025
73%
16%
Reduction in Scope 1 and 2
since base year 2020
Employee enablement (2024)
(%)
69%
2020
3
2025
4
Total emissions
(tCO
2
e)
155,142
130,743
% reduction
from 2020
–
16%
Hikma aims to run a global people survey
every two years. The last full people survey
was run in 2024, with the 2026 survey
underway. As such, we are reporting the
enablement and engagement percentages
from 2024. To find out more about our
engagement and enablement activities
for our people, refer to the stakeholder
engagement on page 22 and empowering
our people on page 52.
We have committed to reducing Scope 1
and 2 GHG emissions (market-based) by
25% by 2030, using a 2020 baseline year
Percentage of core revenue from new
business measured over the period.
New business includes products launched,
new contracts and new geographies
Global employee engagement
and enablement scores
Change in Scope 1 and 2 (market-based)
greenhouse gas (GHG) emissions using
a 2020 baseline
This metric measures our ability to extract
value from our global product pipeline
and new business opportunities
Engagement measures people’s pride in
working for Hikma, their willingness to
recommend Hikma as an employer and
their desire to stay long term. Enablement
measures whether people find their work
fulfilling and rewarding and whether they
feel supported to achieve their full potential
We strive to minimise our environmental
impacts and are committed to making
our operations more energy efficient
19% of revenue from new business was
a strong performance, exceeding the
threshold and max targets
We continue to make efforts to achieve our
target reduction in Scope 1 and Scope 2
GHG emissions
R
17
Hikma Pharmaceuticals PLC |
Annual Report 2025
Strategic report
Financial statements
Corporate governance
The global pharmaceutical market is expected to reach
$2.4 trillion in 2029, growing at between 5% and 8% per
annum.
1
Demographic trends and changing lifestyles are
leading to evolving healthcare needs, driving demand
for more affordable healthcare globally.
Our markets
31 million
annual cases of cancer
expected by 2050
4
+35%
projected increase in global
healthcare spending by 2029
1
The expected increases in demand
for healthcare will result in rising
healthcare costs, increasing
demand for more affordable
healthcare solutions.
An ageing population and changing
lifestyles are contributing to an
increase in the prevalence of
cardiovascular disease, diabetes,
respiratory illnesses and cancer.
The incidence of cancer, particularly
in lower-income countries,
is expected to increase rapidly,
with an estimated increase of 61%
to 30.5 million cases by 2050.
4
$220 billion
estimated impact of loss of
exclusivity by 2029
5
This will create more opportunities
for generics and biosimilars to enter
the market.
1
people aged 60 or above
expected to double by 2050
3
Scientific advances, an increasingly
health-conscious society, and
improved access to healthcare
are contributing to a rise in life
expectancy. The proportion of the
population aged over 60 is expected
to almost double from 12% in 2015
to 22% by 2050.
3
x2
2.1 billion
increase in world population
by the mid-2080s
2
Key trends
shaping the global
pharmaceutical
market:
The world’s population is projected
to reach 10.3 billion in the mid-2080s,
and with this growth will come
increased demand for medicine.
1.
IQVIA: The Global Use of Medicines 2025: Outlook to
2029. (www.iqvia.com/-/media/iqvia/pdfs/events/
presentation_global-meds-webinar_public.pdf)
2.
United Nations (population.un.org/wpp/assets/Files/
WPP2024_Key-Messages.pdf)
3.
WHO: Ageing and health (www.who.int/news-room/
fact-sheets/detail/ageing-and-health)
4. IHME (www.healthdata.org/news-events/newsroom/
news-releases/lancet-cancer-deaths-expected-rise-
over-18-million-2050-increase)
5. www.iqvia.com/insights/the-iqvia-institute/
reports-and-publications/reports/the-global-use-of-
medicines-outlook-through-2029
18
Hikma Pharmaceuticals PLC |
Annual Report 2025
The US generics market is the largest in the world,
valued at approximately $153 billion in 2024
6
.
Spending on medicines in the US is projected to
grow between 5% to 8% annually over the next four
years to 2029.
7
According to the FDA, nine out of ten
prescriptions filled in the US are for generic drugs
8
yet generics only account for 13% of prescription
drug spending
9
.
Losses of exclusivity are expected to accelerate,
paving the way for more generic and biosimilar
entrants. The US market has seen significant
growth in therapies based on glucagon-like
peptides (i.e. GLP-1) primarily through wider usage
for obesity and diabetes. Diabetes spending is
estimated to grow at 1% to 4% compound annual
growth rate (CAGR) over the next five years.
1
The
US generics market remains competitive. There
has been a higher number of competitors and
an acceleration in the FDA’s generic drug approval
process over the last decade, and the US
government is focused on lowering drug prices
through policy changes.
1
Pharmaceutical spending in Europe is projected
to grow by $85 billion to $327 billion by 2029.
1
This increased demand for medicine is driven
by increasing healthcare demand, ageing
populations, and increasing uptake of generic
medicines. Governments are supporting the growth
in demand for generics partly due to efforts to
maintain more sustainable healthcare budgets.
Over the five years to 2029, Europe will see over
$25 billion in losses of exclusivity, mostly driven
by small molecules. With shortages increasingly
prevalent in Europe, the EU is focusing on supply
security and investment policy initiatives, such
as the Critical Medicines Act.
1
The MENA pharmaceutical market is expected to
grow around 7.2% annually over the ten years to
2035.
12
This is underpinned by an ageing
population, with low and middle-income countries
experiencing the greatest change in population
distribution towards older ages.
3
This in turn is
driving increased prevalence of chronic diseases
across the region, such as cardiovascular diseases,
diabetes and respiratory diseases.
13
In Saudi Arabia, Hikma’s largest MENA market,
the pharmaceutical market is forecast to grow at
a CAGR of 10.8% between 2024 and 2029.
14
The country’s strategy is focused on localising
pharmaceutical infrastructure and easing the
market entry of drugs targeting unmet needs.
The US is our largest market, and we remain
well-placed to capture growth opportunities. We
are the seventh largest generic company by sales
(injectable and non-injectable)
10
and have four
operational US manufacturing plants supporting
our broad portfolio of products. This extensive US
domestic manufacturing base is a key differentiator
for us relative to many of our generic peers.
We have been increasing our capacity and
capabilities and have committed to $1 billion
of investment into manufacturing and R&D in
the US by 2030. Our strong product pipeline
will ensure we consistently launch new generic,
complex generic and specialty products.
We are expanding our presence in Europe. We are
well-placed to capture opportunities with our short
supply chain and strong local footprint, with
manufacturing facilities in Portugal, Italy and
Germany. We entered the French market in 2022
and the UK and Spanish markets in 2024. Growth
in recently entered markets is strong, with France
more than doubling revenue in 2025.
We have increased our lyophilisation capacity in
Italy and have ongoing expansion projects in
Portugal. We are also leveraging our new R&D
centre in Zagreb, which will be adding important
ready to use injectable products to our global
portfolio. The breadth of portfolio and having our
own European facilities is allowing us to respond
to shortages of critical medicines in Europe.
11
We have a strong and leading business in the MENA
region that continues to expand and address new
opportunities. Hikma’s structure gives us the
unique ability to leverage our global market
expertise to address each MENA market as a local
player. Our local presence in the region for over
46 years provides us with a deep understanding
of the complex regulatory environment and allows
us to benefit from government prioritisation of
local manufacturers.
We are now the largest pharmaceutical company in
the region by sales.
15
We are investing in enhancing
our pipeline and portfolio and launching more
complex and first-to-market products that are
tailored to local needs. We continue to capture
market share in growing therapeutic areas such as
diabetes and oncology. Our partnerships expand
our MENA offering and demonstrate our ability to
bring advanced healthcare solutions to the region.
Strategic response
Strategic response
Strategic response
59.0%
North America share of Group
2025 core revenue
8.5%
Europe and ROW share of Group
2025 core revenue
32.5%
MENA share of Group
2025 core revenue
The US generics
market remains the
largest in the world
Demand for generics
in European markets
continues to grow
steadily
MENA’s healthcare
trends provide clear
potential for growth
Find out more about our approach to
identify, analyse and evaluate strategic
and emerging risks
on page 82
6.
Market Data Forecast: www.marketdataforecast.com/
market-reports/us-generics-market
7.
IQVIA: Understanding the Use of Medicines in the U.S.
2025 (www.iqvia.com/insights/the-iqvia-institute/
reports-and-publications/reports/understanding-the-
use-of-medicines-in-the-us-2025)
8. FDA (www.fda.gov/drugs/buying-using-medicine-safely/
generic-drugs#:~:text=In%20the%20United%20
States%2C%209,to%20healthcare%20for%20more%20
patients)
9.
Association for American medicines (accessiblemeds.
org/wp-content/uploads/2025/01/AAM-2024-Generic-
Biosimilar-Medicines-Savings-Report.pdf)
10. IQVIA MAT November 2025. Includes all generic
injectables and generic non-injectable products
11. Medicines for Europe (www.medicinesforeurope.com/
generic-medicines/)
12. Pharma Solutions (www.pharmasolutions-int.com/
market-entry-strategies-for-international-pharma-
companies-in-mena/)
13. www.pharmasolutions-int.com/compliance-and-
quality-assurance-in-menas-pharmaceutical-market-a-
comprehensive-guide/#:~:text=Market%20
Size%2C%20Growth%2C%20and%20Future,Saudi%20
Arabia%20and%20the%20UAE
14. IQVIA Market Prognosis 2025-2029, Saudi Arabia
15. Based on internal analysis using data from the following
source: IQVIA MIDAS® Monthly Value Sales data for
Algeria, Egypt, Jordan, Kuwait, Lebanon, Morocco, Saudi
Arabia, Tunisia and UAE, for the period: MAT November
2025, reflecting estimates of real-world activity.
Copyright IQVIA. All rights reserved
19
Hikma Pharmaceuticals PLC |
Annual Report 2025
Strategic report
Financial statements
Corporate governance
Investing in MENA to expand access and drive growth
In the MENA region, where we leverage our
global expertise locally, Hikma is the largest
pharmaceutical company by sales. Today,
we have a broad portfolio of 430 products
and an extensive pipeline that is supported
by internal R&D and partnerships. In 2025,
we launched 40 new products improving
access to world-class medicines in the
region. We also introduced non-invasive
blood-based liquid biopsy technology for
colorectal cancer screening. Across our
markets, we are focused on building
leading positions in key therapy areas such
as oncology, cardiovascular, diabetes and
multiple sclerosis, while also introducing
broader healthcare solutions.
Capabilities driving success
Our success is built on trusted
relationships with healthcare professionals,
pharmacists, hospitals, and regulators
combined with deep local knowledge.
With 5,700+ colleagues and 20
manufacturing plants, we ensure reliable
supply of medicines across the region.
Our proven track record makes us the
partner of choice for global companies that
operate without a footprint in the region.
Today, we manage over 110 products
with around 60 partners who entrust us
with manufacturing, registering, and
commercialisation, reflecting confidence in
Hikma as a trusted healthcare leader in
MENA. Our R&D hub in Jordan, with two
specialised centres dedicated to innovative
product development, further strengthens
our ability to deliver tailored solutions for
long-term growth.
Expanding access through partnerships
In 2025, we diversified our partnerships
to enhance patient access:
–
Celltrion:
Expanded biosimilar access
across MENA
–
pharma&:
Exclusive oncology
licensing agreement
–
M42:
Strategic MoU to advance
diagnostics and digital tools in the UAE
–
DGI Group:
Licensing agreement to
commercialise Claritag
®
, an OTC skin
tag removal device
Engaging healthcare professionals
We hosted and sponsored several
platforms reaching 6,000+ healthcare
professionals to deepen medical
knowledge, while engaging patient
advocacy groups in areas such as multiple
sclerosis, cardiovascular disease, and
diabetes. Through our direct-to-consumer
platform Hiyat Hilweh, we continue to raise
awareness of prevalent conditions, helping
patients make better health choices. All our
events and sponsorships are carefully
overseen by the compliance function.
Hikma is the trusted partner
of choice in MENA. By
combining global expertise
with local capabilities, we
deliver innovative medicines
and technologies that
improve lives and address
the region’s health challenges.”
Mazen Darwazah
Executive Vice Chairman,
President of MENA
Our purpose in action
Selected 2025 events: advancing knowledge and raising awareness on healthcare trends and disease management across MENA
Event
Therapeutic Area(s)
Attendees
Purpose/Engagement Focus
7th Annual MENA
Cancer Forum
Oncology; Haematology
200+
Advance scientific exchange; strengthen regional
cancer network
4th Biotech Forum
Gastroenterology; Rheumatology;
Dermatology; Oncology
330+ from over 10
countries in MENA
Foster cross-specialty collaboration; strengthen
immunology and oncology leadership
PharmaNet 25
Community Healthcare; Pharmacy Practice
170+
Empower pharmacists; strengthen pharmacy engagement
Anti-Infectives
Summit
Infectious Diseases; Transplant;
Haematology/Oncology; ICU; Pulmonology
100+
Advance infection-management knowledge;
raise AMR awareness
Bleeding Management
Summit 2025
Haematology; Cardiology;
Anaesthesiology; ICU
100+
Improve bleeding-management practices;
share best practices
4th Annual GIT
Universe
Gastroenterology; Internal Medicine
110+
Provide GI and IM updates; enhance scientific writing skills
MS Forum Workshop
Multiple Sclerosis
60+
Enhance collaboration between patient society
representatives, pharmacists and HCPs
CVRM Gate
Cardiology; Diabetes
200+
Elevate scientific exchange among HCPs
to strengthen cardiology and diabetes leadership
MENA Iron
Academy 2025
Iron Deficiency; Haematology; OB/GYN;
ICU; Internal Medicine
180+
Improve iron-management practices;
promote PBM adoption
Algeria Iron Network
Iron Deficiency; Patient Blood Management
(PBM)
500+
Advance iron-deficiency diagnosis and treatment;
strengthen PBM
MENA Neurology
Expert Summit
Neurology (MS; Epilepsy; Migraine)
20+
Advance neurology care; align on awareness initiatives
TRIGER Program
Health Policy; Health Technology
Assessment (HTA); Public Health
35
Strengthen regional health policy;
improve access and efficiency
1.
Based on internal analysis by Hikma Pharmaceuticals PLC using data from the following source: IQVIA MIDAS® Monthly Value Sales data for the countries* listed below for the
period: MAT November 2025, reflecting estimates of real-world activity. Copyright IQVIA. All rights reserved. Countries included in MENA Region – Algeria, Egypt, Jordan, Kuwait,
Lebanon, Morocco, Saudi Arabia, Tunisia and UAE
20
Hikma Pharmaceuticals PLC |
Annual Report 2025
21
Strategic report
Financial statements
Corporate governance
Hikma Pharmaceuticals PLC |
Annual Report 2025
Stakeholder engagement
Our vision is of a healthier world that enriches all of our
communities. For more than 45 years, we have been
dedicated to transforming people’s lives by providing
the medicine and support that they need every day.
Our purpose of putting better health within
reach, every day, guides everything we do
now and into the future. Our teams work
diligently to stay connected to all of our
stakeholders, considering their interests and
communicating with them on a regular basis.
This helps drive the long-term sustainable
growth of our business. It also helps us better
understand their needs and informs our
day-to-day commercial and operational
decisions, our long-term investments in our
business and our people, as well as our
sustainability framework.
Stakeholders and the Board
The Directors consider their duties to
stakeholders at each Board meeting, and in
their capacity as members of the respective
Board Committees, and are committed to
promoting the success of the Group for the
benefit of all its stakeholders. Over the next
few pages, we set out how we engage with
our key stakeholders and build issues that
are important to them into our decision
making, in accordance with section 172
of the Companies Act 2006.
Read more about how we are addressing the
needs of our stakeholders by:
Investing in R&D to drive high-value pipeline
delivery, page 9
Investing in manufacturing excellence, page 14
Investing in MENA to expand access and drive
growth, page 20
Investing in strategic partnerships in the US
and MENA, page 38
Investing in the development of our people,
page 56
Patients and healthcare
professionals
Employees
refer to Sustainability at Hikma page 52
Customers
Communities and environment
refer to Sustainability at Hikma page 50
Governments and regulators
Suppliers
Investors
refer to Investment case page 12
Our stakeholders
22
Hikma Pharmaceuticals PLC |
Annual Report 2025
Healthcare professionals
and patients
Our purpose is to put better health within reach, every day for
healthcare professionals (HCPs) and their patients. We engage
with doctors, clinicians and pharmacists to better understand
their needs, helping them treat the patients they serve.
Why is it important to engage with this group and what do they
expect from us?
HCPs and patients need us to:
–
consistently provide a broad portfolio of products
–
improve access to high-quality, affordable medicines
It is essential that we align our commercial activities, operations
and R&D efforts to the changing needs of patients and HCPs.
How we engage across the Group
–
Our commercial teams meet regularly with healthcare professionals
to better understand their needs and keep them informed about
our products
–
In MENA, we run regular forums bringing together key opinion leaders, HCPs
and global research institutes to share knowledge and raise awareness of
healthcare trends and disease management
–
We meet with patient advocacy groups for diseases such as multiple sclerosis,
oncology and diabetes
How we engage at Board level
–
The Compliance, Responsibility and Ethics Committee (CREC) is responsible
for direct oversight of the Group’s approach to ethical issues associated
with HCPs and ensure the compliance function is operating effectively
–
Our management teams present to the Board at least once per year,
providing updates on how we are addressing the needs of patients
and healthcare providers across our markets
Outcomes and actions
–
Continued to partner with global innovative companies to bring treatments
and wider healthcare solutions to MENA, including Celltrion for an expanded
range of biosimilar treatments for the region
–
Through the consumer-focused platform, Hiyat Hilweh, we raise awareness
for patients on conditions and diseases most prevalent in MENA, including
hypertension and breast cancer
–
Increased manufacturing capacity for injectables in Europe by expanding our
lyophilisation capacity in Italy
–
Through our partnership with Bio-Thera in the US, we launched Starjemza™
a biosimilar referencing Stelara® (ustekinumab) Injection, bringing a more
affordable option for HCPs and patients
–
Launched Tyzavan® (vancomycin injection, USP) in the US, a critical antibiotic
used to treat sepsis in hospitals. This room-temperature stable, pre-filled,
ready to use bag will help hospitals, pharmacists, doctors, and nurses treat
patients faster, more easily, and with reduced risk
Customers
Our customers are our business partners and we are
committed to providing them with a consistent and reliable
supply of high-quality medicines. We work closely with
Group Purchasing Organisations (GPOs), hospitals, retailers,
wholesalers and other customers to build strong relationships
and enhance service levels.
Why is it important to engage with this group and what do they
expect from us?
Customers need us to:
–
offer a broad product portfolio
–
have a consistent and reliable supply of medicines
–
maintain service levels
Our commercial teams work closely with our different customers to understand
their needs, reduce drug shortages and ensure we invest in the products,
manufacturing capacity and capabilities needed to meet their requirements.
How we engage across the Group
–
We have commercial, sales and marketing teams dedicated to
our varied customer groups in North America, MENA, and Europe
–
Our customer discussions inform our pipeline decisions, in an effort
to bring them the products most in need
How we engage at Board level
–
Commercial leads present to the Board at least once a year providing updates
on our customer relationships and how we are meeting customer needs
–
As part of its strategic review process, the Board reviews information on
the generic pharmaceutical customer landscape
–
The Board periodically receives industry updates from leading
external professional groups
Outcomes and actions
–
Continued to build our portfolio to address specific growing healthcare needs
and therapeutic areas. In 2025 we had 84 new launches across our markets
–
Worked with our customers to understand their needs and how we can work
to improve service levels where required
–
Prepared our Columbus, Ohio facility in readiness for our previously
announced significant long-term contract manufacturing agreement with a
global pharmaceutical company
–
Continued to invest in domestic US capacity through our refurbishment and
upgrades to our recently acquired Bedford, Ohio facility which will house
specialised capabilities such as aseptic bag filling and lyophilisation
23
Hikma Pharmaceuticals PLC |
Annual Report 2025
Strategic report
Financial statements
Corporate governance
Stakeholder engagement
continued
Communities and
environment
Our vision is to create a healthier world that enriches all our
communities by developing high-quality medicines and making
them accessible to those who need them. We are a responsible
and sustainable company and have a duty of care towards our
communities and the environment.
Why is it important to engage with this group and what do they
expect from us?
Our communities value our efforts to:
–
improve healthcare quality and access to medicines
–
strengthen educational infrastructures
–
support local communities and people in need
–
minimise our impact on the environment
Since its inception, Hikma has been dedicated to transforming people’s lives by
providing the medicines they need and supporting the communities where we
live and work. Making positive contributions to the communities where we
operate, and providing assistance to those in need, supports long-term
sustainable growth, while positively impacting society.
We also strive to minimise our environmental impacts and are committed to
making our operations more energy efficient.
How we engage across the Group
–
We have developed collaborative partnerships and programmes to promote
positive change and address the needs of our communities. These initiatives
include increasing access to medicine, supporting education and assisting
refugees and low-income groups
–
We work internally to progress our understanding of climate-related
risks and opportunities and are working to achieve our GHG emissions
reduction target
How we engage at Board level
–
The Board, through the CREC, oversees our sustainability strategy and
monitors our progress against our ESG-related targets
–
Our Executive Vice Chairman sits on our Access to Medicine Committee,
which is co-chaired by our Executive Vice President of Corporate
Development and M&A
–
Our Executive Vice President of Strategic Planning and Global Affairs, who
reports directly to the CEO, oversees our sustainability team, with our VP of
Sustainability responsible for implementation of the Group sustainability
strategy. More information on our sustainability efforts can be found on pages
40 to 64 and on our governance and management of environment, social and
governance (ESG) issues on page 63
Outcomes and actions
–
Refreshed our Acting Responsibly framework, with input from the CREC
–
Delivered $2.6 million in medicine donations in 2025 (value based on cost
of goods)
–
Achieved a 16% reduction in Scope 1 and 2 GHG emissions since 2020
–
Prioritised water management in water-stressed locations
–
Donated over 200,000 meals to support food security initiatives
Employees
Our people have always been at the heart of everything we do.
As the driving force behind Hikma’s growth and success,
our people are our most valuable asset.
Why is it important to engage with this group and what do they
expect from us?
Our people need us to:
–
support them and provide development and growth opportunities
–
protect their health and safety
–
foster a diverse and inclusive culture
The passion and commitment of our people to our values is key to delivering our
purpose and supports our growth plans. One of our key strategic priorities is to
build a culture that inspires and enables our people, one in which they are
empowered to drive innovation and are committed to caring for customers,
patients and communities around the world.
How we engage across the Group
–
We are committed to empowering our people by offering ongoing training
and diverse learning experiences that are accessible and engaging. Our goal
is to support career growth and lifelong learning for all our people
–
Our Group-wide principles for ensuring employee health and safety
are outlined in our Group Environmental, Health and Safety Policy Statement,
which is available on our website
www.hikma.com
. We also have local policies
and procedures in place
–
We conduct people surveys and use this feedback to improve
our performance and culture
–
We have an active internal communications programme to keep
colleagues engaged and informed on Group strategy, progress,
culture, values and sustainability
How we engage at Board level
–
Laura Balan has Board-level responsibility for employee engagement. She
undertakes an active programme of engagement each year and reports
formally to the Board on her findings
–
The Board receives regular reports on engagement activities with employees,
including people surveys and events or feedback directly given by the EC
–
Board members gave direct input to the content of questions in the 2026
workforce engagement survey, with an increased focus on culture
Outcomes and actions
–
Maintained open channels of communication through regular all-employee
updates from leaders, manager-led discussions, and ongoing dialogue
around organisational changes
–
Introduced a range of wellbeing activities across our sites, including exercise
and fitness events, sports tournaments, and family connection activities such
as ‘Open Family Day’ and ‘bring your kids to work’ events
–
Supported career growth, we introduced a more transparent grading
structure, developed clearer career pathways, expanded leadership
development opportunities, and formalised a mentoring programme
–
Recognition activities and our Great Place to Work® certifications in
Egypt and KSA further reinforced pride and belonging across our teams
–
Fairness around opportunity shaped our work on updating the Group
Inclusion Policy. We refreshed the Talent Acquisition Policy and strengthened
how we embed inclusion into hiring, progression, communication,
and development
24
Hikma Pharmaceuticals PLC |
Annual Report 2025
Hikma is committed to operating and acting in
the best interests of all of our stakeholders.”
25
Hikma Pharmaceuticals PLC |
Annual Report 2025
Strategic report
Financial statements
Corporate governance
Stakeholder engagement
continued
Government and regulators
Our industry is highly regulated and we must operate
in accordance with a wide range of industry and government
policies and regulations, including those of the US FDA,
the European Medicines Agency (EMA), MENA health
authorities and other regulatory agencies across our markets.
Why is it important to engage with this group and what do they
expect from us?
Our regulators expect us to:
–
adhere to regulatory requirements
–
maintain high-quality manufacturing facilities
–
provide safe and effective medicines
Quality is in everything we do and has been since our inception. We need
to ensure that our quality systems operate in full compliance with the
requirements of international agencies as well as domestic regulatory bodies.
How we engage across the Group
–
We have strong internal pharmacovigilance, regulatory and quality teams
who ensure our quality systems operate in full compliance with the regulatory
requirements of the FDA, the EMA, MENA health authorities and other
regulatory agencies across our markets
–
We work closely with local governments and regulatory bodies to ensure
current and proposed regulations and policies support patients’ needs
and our operations
How we engage at Board level
–
The Board receives regular reports on relations with regulators, particularly
from a manufacturing quality and product approval perspective, and receives
an update on legal matters at each meeting
–
The Board oversees the Group’s risk programme and receives reports
on relevant issues, which include specific principal risks covering product
quality and safety and legal, regulatory and intellectual property
Outcomes and actions
–
Continued to engage in shaping US generic pharmaceutical policies and
legislation as a member of the Association of Accessible Medicines (AAM)
trade association
–
Engaged with US elected officials and policymakers to help educate key
members of Congress and their staff about Hikma’s position as one of the
largest US generic medicine providers, our strong and growing US
manufacturing capabilities, our broad portfolio of essential medicines and
our ability to help solve domestic drug shortages. Our goal is to develop and
maintain supportive relationships with those who are developing and
enacting legislation that strengthens the US supply of high-quality generic
medicines, including those we produce
–
In June 2025 we hosted key US government representatives at our Columbus,
Ohio site for a groundbreaking event to highlight the investment being made
by Hikma in domestic manufacturing
–
Regularly meet with governing bodies and industry regulators in MENA to
understand the unmet healthcare needs in key markets and ensure our
product portfolio addresses them
Suppliers
We have an extensive global network of suppliers who provide
us with the goods and services needed for us to deliver our
medicines. We actively engage with our suppliers to ensure
the social, ethical and environmental standards we require
are upheld.
Why is it important to engage with this group and what do we
expect from them?
We want our suppliers to:
–
uphold high ethical standards
–
operate in a responsible and sustainable manner
–
work collaboratively to build strong relationships
Our suppliers are critical to our business, and their products and expertise
support us in the delivery of high-quality medicines to patients around the
world. Working together and building strong relationships not only enables
us to deliver on our purpose but it also ensures we have a sustainable and
resilient supply chain.
Operating responsibly and ethically is vital to our long-term success,
and we work with our suppliers to ensure the social and ethical standards
we require are upheld.
How we engage across the Group
–
We conduct quality audits, in line with our Group audit policy and regulatory
requirements, prior to on-boarding new API suppliers and on a regular basis
for our current supplier base
–
We reinforce our local sourcing and procurement presence in our key supplier
markets to secure preferred access to capacity, innovation and pricing
–
We share our Supplier Code of Conduct (CoC) through our supplier
onboarding process, which sets out the standards we expect from all
our suppliers, including fundamental principles on human rights, modern
slavery and our sustainability expectations
–
We conduct initial and ongoing due diligence to assess third-party risks
and run sustainability assessments through IQ+Vitals and our Hikma
sustainability questionnaire, and regularly work with our suppliers to
improve their sustainability maturity levels
–
We engage with our suppliers to understand their commitments and
efforts to reduce GHG emissions as well as the future impact on our
Scope 3 emissions
How we engage at Board level
–
The Board receives updates on supplier issues as part of its review
of operational matters
–
The Board oversees the Group’s risk programme and receives reports
on relevant issues, which include specific principal risks covering API
and third-party risk management, and ethics and compliance
–
The CREC is responsible for direct oversight of the Group’s approach
to ethical issues associated with suppliers
Outcomes and actions
–
Introduced IQ+Vitals, a tool to enhance our ability to assess a large volume
of suppliers efficiently, enabling us to assess suppliers who cover nearly
75% of our annual procurement spend
–
Continued to refine the quality of our emissions measurements and
engage with our suppliers to better understand their commitments
to emission reductions
–
Maintained a dedicated process to identify suppliers at risk of modern
slavery, following the creation of a specialised task force
–
Embraced automation in the Supplier CoC acknowledgment process,
ensuring that our expectations are clearly communicated and understood
before commencing collaboration
26
Hikma Pharmaceuticals PLC |
Annual Report 2025
Investors
We maintain regular contact with investors to ensure
they have a thorough understanding of our business.
Our investors are largely global institutions and include
both equity and debt holders.
Why is it important to engage with this group and what do they
expect from us?
Our investors want us to:
–
deliver sustainable long-term value
–
effectively communicate our long-term strategy, financial and operational
performance and growth drivers
–
meet industry and global standards for good ESG practices
We ensure our investors have an in-depth understanding of our operations,
financial performance, growth drivers and ESG efforts. The Board receives
regular updates and feedback on these activities. This helps ensure that the
views of our investors are considered in the Board’s decision-making.
How we engage across the Group
–
We maintain regular contact with our shareholders through a comprehensive
investor relations (IR) programme of conferences, roadshows, meetings
and site visits
–
We maintain regular dialogue with our debt holders and rating agencies
–
We communicate our strategy and financial performance through
regular financial reporting and investor events, such as the Annual
General Meeting (AGM)
–
A targeted external communications programme ensures we are informing
key audiences on our strategic progress and impact on our communities
How we engage at Board level
–
The Board receives regular updates on the IR programme, including investor
feedback from the AGM, IR meetings and investor perception studies
–
The Executive Directors are informed of and participate in investor
engagement activities on a regular basis
–
The Non-Executive Directors make themselves available to meet with
investors as required in the conduct of their responsibilities (eg as Chair
of a committee) and are available to shareholders at the AGM to answer
related questions
Outcomes and actions
–
Maintained regular contact with our analysts and investors to give business
updates. We met with over 190 investors in over 250 meetings in 2025
–
Hosted a site visit for sell-side analysts and investors at our manufacturing
facility in Columbus Ohio, US, providing a deep dive into our Hikma Rx
and Injectables businesses and the opportunity to meet with the US
leadership team
–
Provided EC and Board members with third-party perception studies
to gauge investor sentiment
–
Successfully refinanced our $500m Eurobond, with an improved credit rating
of BBB from BBB- under Fitch Ratings and S&P Global Ratings, providing
confidence to investors in Hikma’s financial health
–
Engaged in multiple investor conferences and a series of fireside chats with
senior management and analysts to increase visibility and transparency
Operating responsibly and
ethically is vital to our long-term
success, and we work with our
suppliers to ensure the social
and ethical standards we
require are upheld.”
27
Hikma Pharmaceuticals PLC |
Annual Report 2025
Strategic report
Financial statements
Corporate governance
Business and financial review
A year of continued progress, with growth
across all three geographies.
Khalid Nabilsi
Chief Financial Officer
Our teams worked hard
throughout the year, launching
products, signing partnerships
and leveraging our base
business to deliver growth.”
Reported results (statutory)
2025
$ million
2024
$ million
Change
Constant
currency
1
change
Revenue
3,349
3,127
7%
6%
Operating profit
542
612
(11)%
(12)%
Profit attributable
to shareholders
402
359
12%
13%
Cashflow from
operating activities
436
564
(23)%
Basic earnings per share
(cents)
182
162
12%
13%
Total dividend per share
(cents)
84
80
5%
Core results
2
(underlying)
2025
$ million
2024
$ million
Change
Constant
currency
1
change
Core revenue
3,349
3,156
6%
5%
Core operating profit
741
719
3%
3%
Core EBITDA
3
853
824
4%
3%
Core profit attributable
to shareholders
503
495
2%
2%
Core basic earnings per share
(cents)
228
224
2%
2%
28
Hikma Pharmaceuticals PLC |
Annual Report 2025
Financial performance
Group core revenue growth of 6% to $3,349 million
–
Group core revenue up 6%. Reported Group revenue up 7%
–
Injectables core revenue up 7% (reported revenue up 9%),
Branded core revenue up 10% (reported revenue up 10%)
and Hikma Rx core revenue flat (reported revenue up 1%)
–
Growth in all three geographies – North America, MENA
and Europe
Group core operating profit growth of 3% to
$741 million at a margin of 22.1% (2024: 22.8%)
–
Group reported operating profit down 11%, primarily reflecting the
impact of a legal settlement
–
Injectables core operating profit down 6% with margin of 31.0%
(2024: 35.3%)
–
Branded core operating profit up 19% with margin of 26.4%
(2024: 24.6%)
–
Hikma Rx core operating profit up 5% with margin of 17.3%
(2024: 16.4%)
Cashflow from operating activities of $436 million
(2024: $564 million)
–
Excluding $186 million
4
in connection with one-off legal
settlements, cashflow from operating activities increased by 10%
Robust balance sheet and high returns
–
Leverage at 1.6x net debt
5
to core EBITDA (31 December 2024: 1.4x)
–
Return on average invested capital of 16.0%
6
–
Total dividend of 84 cents per share, up 5%
–
Upgraded to BBB by S&P and Fitch and successfully refinanced
our $500 million Eurobond
Strategic progress
–
Launched 84 products across our markets
–
Launched Tyzavan
®
in the US – an IP protected, room
temperature stable, ready-to-use vancomycin bag – used
for critical sepsis treatment in hospitals
–
Received approval for and launched our first biosimilar product
in the US – ustekinumab
–
Double-digit growth for Europe Injectables, driven
by both established and new markets
–
Continued successful roll out of palbociclib tablets and
dapagliflozin tablets in MENA, enhancing our strength
in oncology and diabetes treatments, respectively
–
Signed 14 deals in MENA during 2025, with 43 deals signed with
29 partners since 2023
–
Announced expanded partnership with Celltrion in MENA for
an additional six biosimilars
2026 Group outlook
–
Group revenue growth in the range of 2% to 4%
–
Group core operating profit in the range of $720 million to
$770 million
2025 financial performance
Group
Group core revenue was up 6% reflecting good growth in Injectables
and Branded, while Hikma Rx delivered revenue in line with 2024,
as expected. Group reported revenue was up 7%.
Group core gross profit grew 1% and core gross margin was 43.5%
as strong margin performance in Hikma Rx and Branded was offset
by the reduced Injectables margin.
Group core operating expenses were $716 million (2024: $729 million).
Group reported operating expenses were $899 million (2024:
$803 million).
Group core selling, general and administrative (SG&A) expenses were
flat at $566 million (2024: $568 million), reflecting growth in the
business, offset by a reduction in Hikma Rx sales and marketing spend.
Reported SG&A expenses were $743 million (2024: $671 million).
Reported research and development (R&D) expenses were $151 million
(2024: $141 million), representing 4.5% of Group core revenue
(2024: 4.5%). Growth was lower than originally planned due to delays
in project starts, particularly in Injectables. The Group has a strong
focus on R&D and aspires to spend around 5% to 6% of revenue
on R&D going forward.
Core other net operating income was $2 million (2024: $18 million
expense). Reported other net operating expense was $4 million (2024:
$11 million income). The change is in part due to reduced foreign
exchange losses.
Group core operating profit increased by 3%. Group reported
operating profit was down 11%, primarily reflecting the impact
of the legal settlement related to sodium oxybate.
1.
Constant currency changes are derived aſter reported 2025 numbers are translated
using 2024 exchange rates, excluding price increases in the business resulting from the
devaluation of currencies
2.
Core results throughout the document are presented to show the underlying
performance of the Group, excluding exceptional items and other adjustments set out in
Note 5 of the Group consolidated financial statements. Core results are a non-IFRS
measure. See page 37 for a reconciliation to reported IFRS results
3.
Core EBITDA is core operating profit before depreciation and soſtware amortisation
4. Of the $186 million, $111 million was placed into restricted cash at 31 December 2025 and
paid in January 2026 (refer to Notes 8 and 13)
5.
Group net debt is calculated as Group total debt less Group total cash. Group net debt is
a non-IFRS measure that includes short- and long-term financial debts (Notes 9 and 11),
lease liabilities, net of cash and cash equivalents. See page 37 for a reconciliation of
Group net debt
6.
Refer to page 37 for reconciliation
29
Hikma Pharmaceuticals PLC |
Annual Report 2025
Strategic report
Financial statements
Corporate governance
Hikma Pharmaceuticals PLC |
Annual Report 2025
Business and financial review
continued
Injectables
Injectables
revenue:
$1,423m
30
Hikma Pharmaceuticals PLC |
Annual Report 2025
2024
2025
$1,324m
$1,423m
2024
2025
35.3%
31.0%
We supply hospitals across our markets with generic and
specialty injectable products, supported by our manufacturing
facilities in the US, Europe and MENA.
Injectables
2025
$ million
2024
$ million
Change
Constant
currency
change
Revenue
1,423
1,306
9%
8%
Core revenue
1,423
1,324
7%
7%
Gross profit
649
668
(3)%
(4)%
Gross margin
45.6%
51.1%
(5.5)pp
(5.5)pp
Core gross profit
665
690
(4)%
(4)%
Core gross margin
46.7%
52.1%
(5.4)pp
(5.3)pp
Operating profit
367
371
(1)%
0%
Operating margin
25.8%
28.4%
(2.6)pp
(2.1)pp
Core operating profit
441
468
(6)%
(5)%
Core operating margin
31.0%
35.3%
(4.3)pp
(3.8)pp
Injectables core revenue grew 7% in 2025,
benefiting from our broad portfolio across
the three geographies, contribution from
the Xellia acquisition and recent launches.
Injectables reported revenue grew 9%.
North America sales were up 5%. While we
saw competition on certain larger products,
this was more than offset by the contribution
from the products acquired in the Xellia
acquisition
1
, as well as new launches.
In Europe and Rest of World (ROW) sales
grew 23%. We delivered good growth across
all our established and recently entered
markets. Our own products grew 30%,
driven by our expanding portfolio and ability
to address market shortages.
In MENA, sales grew 9%, supported by
the breadth of the portfolio and a strong
performance from certain products in
our biosimilar portfolio.
Injectables core gross profit was down 4%
and core gross margin contracted to 46.7%
due to product and geographic mix and
increased inventory provisions. Injectables
reported gross profit declined 3% with a
gross margin of 45.6%. A decline in sales of
certain high-value products in the US was
offset by lower-margin sales of third-party
manufactured products and good progress
in MENA, where margins are lower.
Injectables core operating profit was down
6% and core operating margin was 31.0%.
This reflects the change in gross profit and
higher foreign exchange related costs due to
the strength of the Euro versus the US dollar.
Injectables reported operating profit was flat,
with an operating margin of 25.8%. While
Injectables has a global supply chain,
including products imported from China
to the US which are subject to tariffs, this
only had a minor impact on profit in 2025
of c.$3 million.
Outlook for 2026
In 2026 we expect Injectables revenue
to grow in the low single digits. We expect
core operating margin to be in the range of
27% to 28%.
Good revenue growth
while profitability was
impacted by product
and geographic mix.”
Hikma Pharmaceuticals PLC |
Annual Report 2025
1.
Products acquired through the Xellia acquisition, which
closed on 10 September 2024, contributed $86 million of
revenue to Injectables
Core revenue
Core operating margin
31
Hikma Pharmaceuticals PLC |
Annual Report 2025
Strategic report
Financial statements
Corporate governance
Business and financial review
continued
Branded
Branded
revenue
$849m
32
Hikma Pharmaceuticals PLC |
Annual Report 2025
2024
2025
$769m
$849m
2024
2025
24.6%
26.4%
We supply branded generics and in-licensed patented
products from our local manufacturing facilities to retail
and hospital customers across the MENA region.
Branded
2025
$ million
2024
$ million
Change
Constant
currency
change
Revenue
849
769
10%
9%
Core revenue
849
769
10%
9%
Gross profit
445
402
11%
8%
Gross margin
52.4%
52.3%
0.1pp
(0.1)pp
Core gross profit
445
402
11%
8%
Core gross margin
52.4%
52.3%
0.1pp
(0.1)pp
Operating profit
227
182
25%
21%
Operating margin
26.7%
23.7%
3.0pp
2.8pp
Core operating profit
224
189
19%
15%
Core operating margin
26.4%
24.6%
1.8pp
1.5pp
Branded revenue was up 10%, as we continue
to benefit from our leading market position
and a growing and diversified portfolio of
oncology products and medicines used
to treat chronic illnesses.
Branded core and reported gross profit
grew 11%, with core and reported gross
margins of 52.4%. This reflects our high-
quality product mix driven by our shiſt
towards higher value medicines.
Branded core operating profit increased 19%
and reported operating profit increased 25%,
reflecting the strong revenue performance
and a reduction in foreign exchange related
costs when compared to 2024.
Outlook for 2026
In 2026 we expect Branded revenue to grow
in the range of 6% to 8%. We expect core
operating margin to be around 25%.
Strong profitability
driven by diversified
product mix.”
Core revenue
Core operating margin
33
Hikma Pharmaceuticals PLC |
Annual Report 2025
Strategic report
Financial statements
Corporate governance
Hikma Pharmaceuticals PLC |
Annual Report 2025
34
Business and financial review
continued
Hikma Rx
Hikma Rx
revenue
$1,037m
34
Hikma Pharmaceuticals PLC |
Annual Report 2025
2024
2025
$1,037m
$1,037m
2024
2025
16.4%
17.3%
We supply oral, respiratory and other generic and specialty
products to the North American retail market, leveraging our
state-of-the-art manufacturing facility in Columbus, Ohio.
Hikma Rx
2025
$ million
2024
$ million
Change
Revenue
1,037
1,026
1%
Core revenue
1,037
1,037
0%
Gross profit
343
346
(1)%
Gross margin
33.1%
33.7%
(0.6)pp
Core gross profit
343
357
(4)%
Core gross margin
33.1%
34.4%
(1.3)pp
Operating profit
124
167
(26)%
Operating margin
12.0%
16.3%
(4.3)pp
Core operating profit
179
170
5%
Core operating margin
17.3%
16.4%
0.9pp
Hikma Rx core revenue was flat in 2025,
reflecting expected price erosion across
the base portfolio, offset by a strong
performance on key in-market products.
Hikma Rx reported revenue grew 1%.
Hikma Rx core gross profit reduced 4%,
reflecting an increase in inventory provisions.
Hikma Rx reported gross profit reduced 1%.
Hikma Rx core operating profit increased 5%,
with lower sales and marketing costs more
than offsetting the reduction in gross profit.
The decline in sales and marketing spend
was driven by a reduction in direct spend
on specialty products. Hikma Rx reported
operating profit declined 26% following
the impairment reversal in 2024 related
to our complex respiratory portfolio.
Outlook for 2026
In 2026 we expect Hikma Rx revenue to
be broadly flat. We expect core operating
margin to be close to 20%.
Profitability is
improving as
we focus on
higher-value
business.”
Core revenue
Core operating margin
35
Hikma Pharmaceuticals PLC |
Annual Report 2025
Strategic report
Financial statements
Corporate governance
Other businesses
Other businesses, which includes our 503B compounding business,
our MENA diagnostics business, as well as Arab Medical Containers
(AMC), a manufacturer of plastic specialised medicinal sterile
containers, and International Pharmaceuticals Research Centre
(IPRC), which conducts bio-equivalency studies, contributed revenue
of $40 million in 2025 (2024: $26 million) with an operating loss of
$6 million (2024: $9 million loss).
Research and development
Our investment in R&D of $151 million and our business development
activities enable us to continue expanding the Group’s product
portfolio. We spent $9 million more in R&D than in 2024, however
this was an underspend versus our original ambitions, primarily driven
by moving R&D activity from the US to Croatia and delays to project
starts in our Injectables business. We will increase this spend and
expect to reach 5% to 6% of revenue in 2026.
During 2025, we had 84 new launches and received 99 approvals.
To ensure the continuous development of our product pipeline,
we submitted 139 regulatory filings.
2025
submissions
1
2025
approvals
1
2025
launches
1
Injectables
48
47
50
North America
10
19
26
MENA
32
10
10
Europe and ROW
6
18
14
Branded
82
45
30
Hikma Rx
9
7
4
Total
139
99
84
Net finance expense
2025
$ million
2024
$ million
Change
Constant
currency
change
Finance income
83
8
938%
938%
Finance expense
107
167
(36)%
(38)%
Net finance expense
24
159
(85)%
(87)%
Core finance income
11
8
38%
38%
Core finance expense
106
93
14%
11%
Core net finance expense
95
85
12%
8%
Reported net finance expense was $24 million, compared with
$159 million in 2024. Reported finance income includes $72 million
finance income which primarily resulted from the adjustment of
royalty payment arrangements with certain of the Group’s business
partners, as well as the revaluation of liabilities associated with future
contingent consideration payments.
Core net finance expense increased to $95 million (2024: $85 million),
primarily reflecting an increase in average borrowing and the impact
of the refinancing of the previous $500 million Eurobond.
We expect core net finance expense to be around $99 million to
$103 million in 2026
2
.
Tax
The Group incurred a reported tax expense of $112 million (2024:
$93 million) representing a reported effective tax rate of 21.6%
(2024: 20.4%). Excluding the tax impact of exceptional items and
other adjustments, Group core tax expense was $139 million (2024:
$138 million). The core effective tax rate was 21.5% (2024: 21.7%).
We expect the Group core effective tax rate to be around 23% in 2026.
Profit attributable to shareholders and earnings
per share
Core profit attributable to shareholders was $503 million (2024:
$495 million). Reported profit attributable to shareholders was
$402 million (2024: $359 million).
Core basic earnings per share was 228 cents (2024: 224 cents).
Reported basic earnings per share was 182 cents (2024: 162 cents).
Dividend
The Board is recommending a final dividend of 48 cents per share
(2024: 48 cents per share) bringing the total dividend for the full year
to 84 cents per share (2024: 80 cents per share). The proposed
dividend will be paid on 30 April 2026 to eligible shareholders
on the register at the close of business on 20 March 2026, subject
to approval at the Annual General Meeting on 23 April 2026.
Net cash flow, working capital and net debt
The Group generated operating cash flow of $436 million (2024: $564
million). This change primarily reflects $186 million in connection with
one-off legal settlements. Of the $186 million, $111 million was placed
into restricted cash at 31 December 2025 and paid in January 2026.
Group working capital days were 245 at 31 December 2025
(31 December 2024: 240 days).
Capital expenditure was $197 million (2024: $165 million). In North
America, $81 million was spent on capacity expansion and upgrades
across our Cherry Hill, Columbus and Beford sites. In MENA,
$82 million was spent strengthening and expanding our local
manufacturing capabilities, including for our new general formulation
plant in Tunisia and upgrading our oral oncology plant in Algeria, as
well as adding new lines in Saudi Arabia and Jordan. In Europe, we
spent $34 million adding bag capacity in Portugal and upgrading
infrastructure in Germany and Italy.
We expect Group capital expenditure for 2026 to be in the range
of $190 million to $210 million.
The Group’s total debt was $1,604 million at 31 December 2025
(31 December 2024: $1,306 million).
The Group’s cash balance at 31 December 2025 was $217 million
(31 December 2024: $188 million).
The Group’s net debt was $1,387 million at 31 December 2025
(31 December 2024: $1,118 million). We continue to have a healthy
balance sheet, with a net debt to core EBITDA ratio of 1.6x
(31 December 2024: 1.4x).
During July 2025, the Group issued a new $500 million five-year
Eurobond with a 5.125% coupon rate to refinance the previously
issued $500 million five-year Eurobond, which had a 3.25%
coupon rate and matured on 9 July 2025.
During July 2025, the Group also signed a $250 million six-year loan
agreement with International Finance Corporation (IFC), with
proceeds used for general corporate purposes.
During November 2025, the Group signed a $400 million three-year
syndicated loan arrangement, with proceeds used for general
corporate purposes.
Business and financial review
continued
1.
Pipeline projects submitted, approved and launched by country in 2025. MENA numbers
include only the five major markets (Algeria, KSA,Egypt, Morocco and Jordan)
2.
Based on the composition of the Group’s net debt portfolio as at 31 December 2025,
a one percentage point increase/decrease in interest rates would result in a $8 million
increase/decrease in net finance cost per year (2024: $6 million increase/decrease)
36
Hikma Pharmaceuticals PLC |
Annual Report 2025
Net assets
Net assets at 31 December 2025 were $2,606 million (31 December
2024: $2,321 million). Net current assets were $1,190 million
(31 December 2024: $285 million). The primary reason for the increase
in net current assets is due to the previous $500 million Eurobond
having been classified as a current liability in 2024.
Definitions
We use a number of non-IFRS measures to report and monitor the
performance of our business. Management uses these adjusted
numbers internally to measure our progress and for setting
performance targets. We also present these numbers, alongside our
reported results, to external audiences to help them understand the
underlying performance of our business. Our core numbers may be
calculated differently to other companies.
Adjusted measures are not substitutable for IFRS results and should not
be considered superior to results presented in accordance with IFRS.
Core results
Reported results represent the Group’s overall performance. However,
these results can include one-off or non-cash items which are
excluded when assessing the underlying performance of the Group.
To provide a more complete picture of the Group’s performance to
external audiences, we provide, alongside our reported results, core
results, which are a non-IFRS measure. Our core results exclude the
exceptional items and other adjustments set out in Note 6 to the
Group consolidated financial statements.
Constant currency
As the majority of our business is conducted in the US, we present our
results in US dollars. For both our Branded and Injectables businesses,
a proportion of their sales are denominated in a currency other than the
US dollar. In order to illustrate the underlying performance of these
businesses, we include information on our results in constant currency.
Constant currency changes are derived aſter reported 2025 numbers
are translated using 2024 exchange rates, excluding price increases
in the business resulting from the devaluation of currencies.
Core EBITDA
Core EBITDA is core operating profit before depreciation and soſtware
amortisation.
2025
$ million
2024
$ million
Reported operating profit
542
612
Legal settlements
72
–
Pre-operational costs
16
4
Insurance compensation in relation to
the Group’s losses in Sudan
(14)
–
Gain on extinguishment of financial liability
(6)
–
Reorganisation costs
5
11
Intangible assets amortisation other than soſtware
100
92
Impairment charges on intangible assets,
PPE and right-of-use assets
26
31
Impairment reversals on intangible assets
and property, plant and equipment
–
(60)
Provision for rebates adjustment
–
29
Core operating profit
741
719
Depreciation of property, plant and equipment
94
87
Depreciation of right-of-use assets
10
10
Soſtware amortisation
8
8
Core EBITDA
853
824
Working capital days
We believe Group working capital days provides a useful measure of
the Group’s working capital management and liquidity. Group working
capital days are calculated as Group net receivable days plus Group
net inventory days, less Group payable days. Group receivable days
are calculated as Group net trade receivables x 365, divided by
12 months Group reported revenue. Group inventory days are
calculated as Group net inventory x 365, divided by 12 months Group
reported cost of sales. Group payable days are calculated as Group
trade payables x 365, divided by 12 months Group cost of sales.
Group net debt
We believe Group net debt is a useful measure of the strength of
the Group financial position. Group net debt includes short and
long-term financial debts (Notes 22 and 26), lease liabilities, net
of cash and cash equivalents.
Group net debt
31 Dec 2025
$ million
31 Dec 2024
$ million
Short-term financial debts
(106)
(642)
Short-term leases liabilities
(8)
(11)
Long-term financial debts
(1,445)
(607)
Long-term leases liabilities
(45)
(46)
Total debt
(1,604)
(1,306)
Cash and cash equivalents
217
188
Net debt
(1,387)
(1,118)
ROIC
ROIC is calculated as core operating profit aſter tax divided by the
average invested capital (calculated as the average of the opening
and closing total equity plus net debt). This measures our efficiency in
allocating capital to profitable investments.
ROIC
2025
$ million
2024
$ million
Core operating profit
741
719
Tax on core operating profit
(145)
(158)
Core operating profit aſter tax
596
561
Net debt
1,387
1,118
Equity
2,606
2,321
Invested capital (at 31 December)
3,993
3,439
Invested capital (at 1 January)
3,439
3,185
Average invested capital
3,716
3,312
ROIC
16.0%
16.9%
37
Hikma Pharmaceuticals PLC |
Annual Report 2025
Strategic report
Financial statements
Corporate governance
Investing in strategic partnerships
driving growth in the US and MENA
Our purpose in action
In 2025, we accelerated growth through
targeted partnerships, leveraging the
complementary strengths of Hikma and
our partners to achieve faster regulatory
approvals, expanded market access,
and portfolio expansion.
Key highlights:
Bio-Thera Solutions: capturing US
autoimmune market share
FDA approval and launch of Starjemza™
(ustekinumab-hmny biosimilar) opens
access to the biologic autoimmune
treatment market. This collaboration
with Bio-Thera Solutions demonstrates
our model’s efficiency: our partner
developed the product while we provide
US market access, generating returns
from our commercial infrastructure
with minimal capital outlay.
Novugen: strategic oncology addition
for our US specialty portfolio
Acquiring Novugen’s FDA-approved
trametinib ANDA adds an important
oncology asset to our US specialty
portfolio, strengthening our competitive
position in high-value therapeutic areas.
Celltrion: scaling MENA biosimilar access
Our strengthened alliance with global
biosimilar leader Celltrion leverages our
regional infrastructure to rapidly expand
biosimilar availability across MENA.
This partnership enhances our existing
distribution network and market
relationships while meeting growing
regional demand for affordable
biologics – creating new growth
from established assets.
Value creation
For Hikma:
Portfolio growth, market
expansion, and revenue generation
with optimised capital deployment
and shared risk.
For partners:
Access to established
markets and commercial infrastructure
they could not efficiently build
independently.
For healthcare systems:
Affordable
treatment options that improve budget
sustainability while maintaining
high quality.
For patients:
Earlier access to critical
and affordable medicines.
These 2025 partnerships validate our
collaborative growth model. By identifying
partners whose capabilities complement
our market access strengths in the US and
MENA, we are driving sustainable, capital-
efficient growth while ensuring access to
affordable and high-quality medicines.”
Bassam Kanaan
Executive Vice President, Corporate Development and M&A
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Financial statements
Corporate governance
39
Hikma Pharmaceuticals PLC |
Annual Report 2025
Sustainability at Hikma
42
Sustainability reporting readiness
45
Advancing health and wellbeing
46
Empowering our people
52
Protecting the environment
58
Operating transparently and ethically
63
Sustainability
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Hikma Pharmaceuticals PLC |
Annual Report 2025
41
Hikma Pharmaceuticals PLC |
Annual Report 2025
Strategic report
Financial statements
Corporate governance
Advancing
health and
wellbeing
Empowering
our people
Protecting the
environment
Operating
transparently
and ethically
Sustainability at Hikma
Operating responsibly and sustainably is integral to our
approach. We strive to put better health within reach,
every day and to make a difference to people’s lives.
A strong sustainability strategy helps us achieve our goals, fulfil our
purpose, and ensures we remain responsive to the needs and
priorities of our key stakeholders. This section outlines how we
address our most material sustainability issues and highlights some
of the major activities, milestones, and achievements we have made
throughout the year.
Through the double materiality assessment (DMA) that we completed
in early 2025, we updated our sustainability framework which
organises our Hikma Sustainability Topics (HSTs) into four pillars.
Ensuring access
to high-quality
medicines
–
Access to medicines
–
Product quality
and patient safety
–
Social responsibility
Shaping a culture of
progress and belonging
–
Wellbeing and development
–
Inclusivity
–
Health and safety
Supporting a
healthier planet
–
GHG emissions
–
Water management
Upholding ethical
standards and acting with
integrity
–
Ethical business conduct
–
Corporate governance
–
Responsible value chain
Updating our sustainability framework
In early 2025, we conducted a DMA following the European
sustainability reporting standards (ESRS) issued by the European
Commission, as well as EFRAG IG 1: Materiality assessment
implementation guidance and EFRAG IG 2: Value chain implementation
guidance. The DMA was performed at the Group level. The DMA is the
process required by the ESRS to determine the sustainability matters
on which Hikma must report to comply with the EU Corporate
Sustainability Reporting Directive (CSRD). The sustainability matters
identified as material were subsequently used to inform updates to our
sustainability framework. More information on our sustainability
reporting readiness is available on page 45.
The process to determine the sustainability matters that are
material for Hikma consisted of an initial value chain mapping
and analysis exercise as well as a stakeholder identification and
engagement process.
An initial list of Impacts, Risks and Opportunities (IROs) was then
developed based on a preliminary set of IROs for the pharmaceutical
sector, created by pharmaceutical sector experts. This list was tailored
specifically for Hikma by incorporating insights from Hikma’s cross-
functional management team, Annual Report, Sustainability Report
and other publicly available sources. The IROs were assessed through
a scoring process for impact and financial materiality consistent with
the criteria set out in ESRS 1.
To determine which sustainability matters are material, a materiality
threshold was set. Based on this threshold, only IROs assessed as
‘Critical’ and ‘Significant’ were deemed material for reporting purposes,
in alignment with Hikma’s Enterprise Risk Management
(ERM) framework.
The results of the DMA were validated through stakeholder engagement
and internal validation sessions. The objective was to test and refine the
results and ensure they represent the views and interests of all relevant
stakeholder groups (internally and externally) and reflect the most
material matters for Hikma. We expect to refresh the DMA within the
next three years to ensure it remains relevant and accounts for the
ongoing growth, expansion and changes taking place at Hikma.
Our primary sustainability pillar is Advancing health and wellbeing,
within which fall the HSTs that were determined to be most material –
Access to medicines and Product quality and patient safety, and
Social responsibility, through which we engage with our communities
to address prevalent health, education and economic issues where
we operate.
Our sustainability framework
42
Hikma Pharmaceuticals PLC |
Annual Report 2025
Working conditions (own workforce): ESRS S1
Working conditions (operational health and
safety): ESRS S1
Inclusivity: ESRS S1
Climate change: ESRS E1
Hikma Sustainability Topics materiality matrix
Impact materiality
Low
High
Ethical business practices: ESRS G1
Access to medicines: ESRS S4
Product quality and patient safety: ESRS S4
Corporate culture: ESRS G1
Water management: ESRS E3
Impact materiality
Double materiality
Financial materiality
Financial materiality
Low
High
Double materiality assessment
Our DMA, completed in 2025, was led by our sustainability team with
significant input from leaders and teams across all functions and
geographies, and was overseen by the Board through the CREC.
The assessment considered our business model, company purpose,
upstream and downstream value chain, and key stakeholder insights.
The DMA also considered regional and sector-specific factors, the key
sustainability priorities of our peers, as well as current and anticipated
regulatory requirements. The methodology used for conducting this
DMA is aligned with the ESRS standards for the application of the EU
CSRD. Topics that are identified as material through the DMA process
are defined internally as Hikma Sustainability Topics (HSTs).
Through the DMA, we assessed the Impacts, Risks and Opportunities
(IROs) related to each sustainability topic and determined which IROs
fall within our materiality threshold, from either a financial or an impact
materiality perspective. We also took into account our unique Company
purpose and its longstanding commitment to society and philanthropy,
and so included Social responsibility activities as part of our framework
under the Advancing health and wellbeing pillar.
The materiality matrix below illustrates the HSTs that were determined
to be most material to the organisation, linking each of them to their
corresponding CSRD topics.
43
Hikma Pharmaceuticals PLC |
Annual Report 2025
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Financial statements
Corporate governance
Advancing
health and
wellbeing
Sustainability at Hikma
continued
We developed a Key Performance Indicator (KPI) framework that enables us to track and communicate our progress in relation to the
sustainability topics that are most material to our organisation. The diagram below outlines the KPIs linked with our sustainability framework,
distributed across our four pillars. Each pillar includes one pinnacle metric in bold, with multiple supporting metrics. While the pinnacle
metric represents the most prioritised metric within each pillar, the suite of metrics collectively provide an integrated and holistic
perspective on our progress towards sustainability-related Company ambitions.
Protecting the
environment
Empowering
our people
–
People voice survey
(engagement and enablement)
–
Promotion rate
–
Average hours of training per colleague
–
Lost time incidence rate
–
Code of Conduct (CoC) completion rate
–
Supplier CoC Compliance Survey
–
Suppliers monitored for ethical issues,
including modern slavery (percentage
of annual spend)
–
Suppliers screened for environmental
criteria (percentage of annual spend)
–
Scope 1 and 2 CO
2
emissions reduction
–
Financial resources allocated to
mitigate climate change
–
Total water recycled or reused
–
Water intensity metric
Operating transparently
and ethically
Scope 1 and 2 CO
2
emissions
reduction since 2020
2
16%
(2025)
People voice survey
Percentage of employees
that received CoC training
99%
(2025)
Engagement
73%
(2024)
Enablement
69%
(2024)
Sustainability metrics: how we measure our progress
1.
Based on internal analysis by Hikma Pharmaceuticals PLC using data from the following source: IQVIA Analytics Link Q4 2024 for the calendar year 2024, reflecting estimates
of real-world activity. Copyright IQVIA. All rights reserved. Methodology: Drug-treated patient values are derived by converting disease-specific volume sales for each drug
to estimated treated patient numbers, adjusted for dosing, duration and compliance, but not concomitance. The 2025 figure has not yet been calculated and will be included
in our Sustainability Report upon publication
2.
We restated our emissions baseline to account for site acquisitions. More details are available on page 60
Number of patients treated
–
Number of new product launches
–
Impact of launched medicines on patients treated
–
$ amount invested to increase production capacity
–
Social responsibility: Beneficiaries from community activities
–
$ value of charitable donations
Advancing health and wellbeing
Patients treated in 2024
1
262 million
Pinnacle metric
Pinnacle metric
Pinnacle metric
Pinnacle metric
44
Hikma Pharmaceuticals PLC |
Annual Report 2025
Sustainability reporting readiness
We continuously assess regulatory reporting requirements that are
relevant for our business and take proactive steps to ensure
compliance. Maintaining a high level of transparency around ESG
issues remains a core priority for Hikma.
Corporate Sustainability Reporting Directive (CSRD)
The CSRD introduced a harmonised sustainability reporting regime for
companies operating in the European Union. In 2025, revisions to the
European Sustainability Reporting Standards (ESRS) were considered
which amended disclosure requirements, guidance and timelines for
adoption. Hikma is actively monitoring these revisions and assessing
changes in order to ensure alignment with all current and future
reporting requirements. We expect reporting in alignment with CSRD
to become mandatory for Hikma Group in 2028, given the revised
Omnibus directive that altered timelines and requirements for
companies reporting on the framework.
UK Sustainability Reporting Standards (SRS) and IFRS Sustainability
Disclosure Standards
The UK SRS framework is currently under consultation to incorporate
revisions that will shape future sustainability disclosures. In parallel, the
UK Financial Conduct Authority (FCA) has launched a consultation
(CP26/5) proposing a shiſt from the current TCFD-aligned regime
toward mandatory sustainability reporting based on the UK
Sustainability Reporting Standards (UK SRS), which are themselves
aligned with the IFRS Sustainability Disclosure Standards. We are
closely monitoring these developments, including the FCA’s proposed
transition to UK SRS S1 and S2, and its move to enhance comparability
and reduce duplication. The UK SRS builds on the IFRS Sustainability
Disclosure Standards, drawing on TCFD principles and structure which
remain integral to our ESG reporting approach.
Global Frameworks and Stakeholder Expectations
We align our disclosures with globally recognised standards such as
GRI, SASB, and the GHG Protocol and monitor for updates and changes
to best practice reporting standards. Internally, we prioritise the
measuring of our performance related to health and safety, carbon
emissions and the management of water and waste. We are
continuously strengthening data integrity and assurance processes
to ensure these metrics are measured consistently and accurately.
In the United Arab Emirates, listed companies are required to publish
annual sustainability reports, and new regulations under Federal
Decree-Law No. 11 will mandate greenhouse gas measurement and
reporting starting in 2025. The UAE Sustainable Finance Working Group
has also introduced principles for sustainability-related disclosures to
promote alignment with international standards. This is relevant as
Hikma has Global Depositary Receipts listed on NASDAQ Dubai, the
Dubai international financial exchange. We are also monitoring
developments in California related to the Climate Corporate Data
Accountability Act and the Climate-Related Financial Risk Act to
ensure we are aligned with related requirements.
We actively monitor all relevant sustainability reporting
standards and adjust our approach to ensure alignment
with current and expected requirements.”
In 2025, we increased our solar energy generation in Hikma Salt, Jordan, which generates more than 4,700 MWh of electricity annually
45
Hikma Pharmaceuticals PLC |
Annual Report 2025
Strategic report
Financial statements
Corporate governance
Advancing health
and wellbeing
Ensuring access to high-quality medicines
CSRD alignment: IROs associated with this pillar
IRO
description
CSRD
classification
IRO
type
Value chain
classification
Through the manufacture of high-quality,
affordable medicines, Hikma is providing patients
with access to essential treatments, particularly
when addressing unmet medical needs or
underserved markets.
By focusing on patients’ needs across Hikma’s
markets, Hikma maintains a strong market
position and growth potential.
ESRS:
S4 Consumers and end-user
Sub-topic:
Social inclusion of consumers
and end-users
Sub-sub-topic:
Access to products and
services
Impact
(positive, actual)
Financial Opportunity
Own operations and
downstream (enterprise-
wide and across
downstream value chain)
Hikma leverages the strength of its
manufacturing operations to ensure the
continuous supply of medicines, while adhering
to strict product quality and patient safety
standards, supporting positive patient
outcomes and positioning Hikma as a leading
supplier across its global markets.
ESRS:
S4 Consumers and end-user
Sub-topic:
Personal safety of consumers
and/or end-users
Sub-sub-topic:
Health and safety
Impact
(positive, actual)
Financial Risk
Own operations and
downstream (enterprise-
wide and across
downstream value chain)
Access to medicines
Our purpose as a company is to produce
high-quality medicines and ensure they are
accessible to those who need them.
We achieve this by leveraging our strong
manufacturing capabilities and collaborating
with stakeholders across the healthcare
ecosystem, including healthcare professionals
(HCPs), patients, industry partners, payers,
and governments.
We recognise the importance of generic
medicines in improving access and
affordability, as well as the role of human
health in driving socio-economic progress.
Therefore, we utilise our R&D expertise,
manufacturing strength, and solid
partnerships to expand the breadth of our
product offering and the availability of our
products. We engage with industry partners,
HCPs, patients, payers, governments, and
others to make sure our medicines reach
where they are needed.
Oversight for all material sustainability topics
is held at the Board level, and this includes
access to medicine. Responsibility for the
Company sustainability strategy is embedded
within the CREC and is executed through
various functions including Commercial,
Sustainability, Quality, Research and
Development (R&D), and Pharmacovigilance.
Sustainability at Hikma
continued
Our purpose is to produce high-quality
medicines and ensure they are accessible
to those who need them.”
Pinnacle metric: Number of patients treated (2024)
262 million
46
Hikma Pharmaceuticals PLC |
Annual Report 2025
Committing to expanding access in the US
In June 2025, we announced a $1 billion
investment through 2030 to expand
our US manufacturing and R&D capabilities
for essential generic medicines. This
initiative, ‘America Leans on Hikma: Quality
Medicines Manufactured in the USA,’ builds
on more than $4 billion we have invested
over the past 15 years. Through our
investments in our facilities in Ohio and
New Jersey, we are increasing production
capacity, improving supply reliability, and
addressing critical drug shortages. These
actions demonstrate our purpose: to make
high-quality medicines accessible to those
who need them.
This investment also reflects our long-term
commitment to patients and the healthcare
system at a time when supply chain resilience
and affordability are national priorities.
Generic medicines account for the majority
of prescriptions in the US, yet shortages and
import dependencies continue to threaten
care. By onshoring production and
reinforcing our R&D capabilities, we are
reducing these risks and ensuring essential
medicines remain available and affordable.
This is how we turn our purpose into action
— working with healthcare professionals,
payers, and policymakers to deliver reliable
access to medicines that improve lives.
This investment
reflects our long-term
commitment to
patients at a time
when supply chain
resilience and
affordability are
national priorities.”
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Corporate governance
Our medicine donation programme
We donate medicines and provide aid and
relief to patients affected by natural disasters,
conflicts, and other emergencies, directing
medicines to address the critical needs of
vulnerable populations such as low-income
groups, displaced persons, and those lacking
sufficient medical coverage. We are
committed to responding to global events and
leveraging our resources to assist marginalised
groups. In 2025, we donated $2.6 million of
medicines globally. Donations are made on a
needs basis and therefore fluctuate annually
based on the amount of donation requests
received in our markets.
Medicine donations
(COGS) $m
Sustainability at Hikma
continued
Working with the IFC to improve medicine access in MENA
In 2025, we strengthened our 40-year
partnership with the International Finance
Corporation (IFC) by signing a $250 million
six-year financing agreement to expand
access to medicines across MENA. This
financing will enable us to increase local
production capacity, ensuring that patients
in the region have reliable access to
high-quality, affordable medicines, even
amid ongoing socio-economic challenges.
This agreement builds on IFC’s anchor role
in our $500 million bond issuance and on
decades of tailored support, including
financing during the COVID-19 pandemic
to maintain uninterrupted supply.
Together, we are focused on reinforcing
operational resilience, good governance and
sustainability, aligning on shared values that
prioritise governance and patient needs.
This latest commitment is a clear example of
how we are working with global partners to
strengthen health systems and address
high unmet healthcare needs across MENA.
We are working with
global partners to
address unmet
healthcare needs
across MENA.”
2025
2024
2023
$2.6m
$4.1m
$4.9m
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An emphasis on R&D to align
with evolving patient needs
Product quality
and patient safety
We uphold a strict pharmacovigilance
framework to safeguard against patient harm
and to guarantee the safe, effective use of our
products. Pharmacovigilance is monitored at
the highest levels of our business and is
included in our ERM process, which is overseen
by the EC and the Board on a regular basis.
All findings from pharmacovigilance audits
and inspections and the status of
implementing corrective and preventative
actions are discussed in quarterly
pharmacovigilance quality meetings.
To ensure the applicability, adequacy, and
effectiveness of our oversight of product
quality, we regularly monitor our worldwide
quality compliance metrics. These metrics
are monitored and addressed centrally
at a global level.
Hikma employees receive mandatory and
regular training and guidance on their role
in ensuring patient safety and reporting any
adverse events or safety concerns to the
pharmacovigilance team. Training modules
are updated regularly and available across
six languages for all colleagues.
We have globally aligned processes to identify,
assess, and communicate any changes in the
benefit-risk balance of our products and
to implement timely corrective and
preventative actions.
Our marketed products (either manufactured
by Hikma or outsourced through partners)
comply with Current Good Manufacturing
Practices (cGMPs). We implement quality
oversight on our suppliers, partners and
sub-licensors to ensure that these
stakeholders are in full compliance with
regulatory standards and Hikma requirements.
Quality agreements are in place to focus on
compliance to cGMPs and define each party’s
responsibilities. Risk-based cGMP audits are
also conducted on suppliers by our global
quality team and other reputable
third-party consultants.
In 2025, we transformed our R&D
operations into a single, unified global
organisation, integrating previously
separate teams across our Injectables,
Hikma Rx, and Branded divisions. This new
structure is built around our three core
technology platforms: Respiratory, Nasals,
Semi-solids and Liquids (RNSSL);
Injectables; and Solid Orals. The structure
is supported by global R&D operations
and regulatory affairs in order to optimise
resources, accelerate time-to-market,
and strengthen our ability to deliver
high-quality medicines efficiently.
With experienced leaders appointed
to each platform and centralised
functions providing shared services
and advanced tracking systems, we now
have greater visibility and agility across
our entire pipeline.
Our strategic focus combines strong
internal R&D capabilities with selective
partnerships to expand and enhance our
portfolio. This approach ensures we remain
responsive to evolving disease prevalence
and changing patient needs, while
continuing to innovate and scale. By
leveraging our expertise and collaborating
where it adds value, we can develop
complex medicines faster and more
efficiently, reinforcing our product portfolio
and pipeline to drive our growth and
purpose: improving access to essential
medicines for patients worldwide.
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Strategic report
Financial statements
Corporate governance
Sustainability at Hikma
continued
Providing better health
Supporting students with
intellectual disabilities in Egypt
In 2025, Hikma partnered with Misr El Kheir Foundation to
improve the Minya School for Intellectual Education in Egypt,
creating an inclusive learning environment for students with
intellectual disabilities.
The project introduced a modern computer lab with 10 desktop
computers, internet connectivity, and essential equipment,
alongside a fully equipped sensory integration room to support
cognitive and emotional development. Teachers received
specialised training on inclusive practices and effective use
of the sensory room, ensuring sustainability.
Additional support included distributing school bags and
stationery to 221 students and organising awareness
campaigns to promote inclusion, with volunteers actively
engaging in community activities. As a result, more than 1,100
students now benefit from improved resources, teachers are
empowered with new skills, and the initiative has strengthened
inclusive education within the community.
Social responsibility
Hikma’s Social Responsibility efforts are guided by three
core pillars: Providing better health, supporting education,
and helping people in need.
Through these pillars, we deliver targeted initiatives that address key
community needs while empowering our people to contribute their
time and expertise.
Our work in this area continues to strengthen community wellbeing,
enhance access to opportunities, and reinforce a shared culture of
responsibility across our global operations.
566,780
beneficiaries from community activities
8,060
Number of employee volunteering hours
3,480
Number of employee volunteers
132
total community engagement activities
$2.6m
worth of medicines donated to patients across the globe
$3.3m
charitable donations
Social responsibility highlights
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Helping people in need
Supporting food security across
our communities in the US
In 2025, Hikma strengthened its long-standing commitment
to addressing food insecurity by expanding partnerships,
deepening community engagement, and increasing direct
support to food banks across the US.
As part of this commitment, Hikma proudly reaffirmed its role
as the Fresh Food Sponsor for The Emergency Assistance
Center (TEAC). Through this sponsorship, Hikma helped ensure
that TEAC could provide families with access to fresh, nutritious
foods—an essential component for building healthier, more
resilient communities. The renewed partnership enabled
TEAC to expand the availability of produce, dairy, and other
perishable items that many families struggle to afford.
Recognising the growing need for accessible food and
healthcare, Hikma also added the Cherry Hill Free Clinic to
its network of food bank and pantry partners in 2025. This
new collaboration supports the clinic’s integrated approach
to health and wellness, allowing patients and community
members to receive not only medical care but also reliable
access to healthy foods. By supporting organisations that
combine nutrition and healthcare, Hikma amplified its social
impact beyond the traditional boundaries of food assistance.
Across all partnerships, Hikma contributed more than 200,000
meals to food banks nationwide in 2025. These donations
helped alleviate food insecurity in some of the most vulnerable
regions and supported local organisations in meeting the
increased demands created by economic pressures and
rising living costs.
Through sustained partnerships, expanded outreach, and
significant meal contributions, Hikma continues to live its
values – supporting health, dignity, and stability for the
communities it serves.
Supporting education
Expanding refugee access to higher
education and emergency support
– UNHCR partnership
Since 2021, Hikma has partnered with the United Nations High
Commissioner for Refugees (UNHCR) through the Albert
Einstein German Academic Refugee Initiative (DAFI) to support
refugee education and empowerment.
In 2025, Hikma continued its four-year commitment to the DAFI
programme, supporting 80 refugee students in Jordan, Algeria,
and Egypt. Scholars complemented their academic studies
with life skills workshops, language courses, and social inclusion
activities, building resilience and leadership skills to positively
impact their communities.
Hikma also contributed to UNHCR’s Lebanon Emergency
Appeal, funding critical humanitarian activities such as safe
shelter, healthcare, psychosocial support, and education for
refugees and vulnerable Lebanese communities. This support
ensured access to protection, legal assistance, and voluntary
and safe returns for those affected by ongoing crises.
80
refugee students in Jordan,
Algeria, and Egypt supported
by the DAFI programme
Photo credit: © UNHCR
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Annual Report 2025
Strategic report
Financial statements
Corporate governance
Shaping a culture of progress and belonging
Empowering
our people
CSRD alignment: IROs associated with this pillar
IRO
description
CSRD
classification
IRO
type
Value chain
classification
Hikma’s working environment helps provide the
conditions for the Group to attract and retain
skilled talent. It includes access to high-quality
benefits, development programmes and a
workplace with a strong corporate culture,
which in turn affect employee engagement
levels and promote stability.
ESRS:
S1 Own workforce
Sub-topic:
Working conditions
Sub-sub-topic:
Secure employment
Impact
(positive, actual)
Own operations
(enterprise-wide)
Hikma’s Health and Safety Policy Statement
ensures appropriate governance of health
and safety initiatives and the accuracy of
information to understand and safeguard
wellbeing and safety across Hikma’s operations.
ESRS:
S1 Own workforce
Sub-topic:
Working conditions
Sub-sub-topic:
Health and safety
Impact
(positive, actual)
Own operations
(enterprise-wide)
Hikma promotes equitable treatment across its
global workforce. Every Hikma employee, across
all functions and grades, has access to career
growth and development opportunities through
training and skills development programmes
and initiatives.
ESRS:
S1 Own workforce
Sub-topic:
Equal treatment and
opportunities for all
Sub-sub-topic:
Training and development
Impact
(positive, actual)
Own operations
(enterprise-wide)
Sustainability at Hikma
continued
Wellbeing and
development
We prioritise the wellbeing and
development of our people as core pillars
of our corporate culture. In 2025, we
focused on and expanded programmes
aimed at supporting the mental, physical
and emotional health of our colleagues
while fostering their personal growth.
We developed a more structured and
integrated approach to promoting
wellbeing while remaining flexible to
the local preferences of our people
as determined by regular engagement
and feedback channels.
Pinnacle metric: People voice survey (engagement and enablement)
73%, 69%
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Launching our Career Management framework
The Career Management framework is a strategic initiative launched
this year that is designed to empower people in taking ownership of
their professional growth. The framework offers a transparent,
structured approach to career development across key job families,
including R&D, Manufacturing, Engineering, Supply Chain,
Procurement, Logistics, Quality, Sales, and Marketing. It defines
and outlines the progression pathways, core competencies and
specialised skills for our colleagues to fulfil their career aspirations
while supporting organisational needs.
Programme objectives
–
Enhance Engagement: provide clarity on career paths
and growth opportunities for employees
–
Support Talent Development: define behavioural
and technical competencies for each role
–
Enable Mobility: facilitate internal movement within
the organisation
The launch marks a major step toward fostering a culture of
growth and accountability. In 2026, the framework will expand
to additional job families, reinforcing Hikma’s commitment
to continuous development.
We prioritise the wellbeing and
development of our people
as they constitute core pillars
of our corporate culture.”
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Strategic report
Financial statements
Corporate governance
At Hikma we are proud to have a workforce consisting of people
from all backgrounds contributing to our success. You can find
more information on this in the corporate governance section of
this report, on page 96.
Guided by the DMA findings, we prioritise equitable and inclusive
access to growth and development for all of our colleagues,
regardless of ethnicity, gender or other non-merit-based
characteristics. We also emphasise the economic empowerment
of our people and have established several employee resource
groups (ERGs) such as the Women’s Empowerment ERG and Black
Employees ERG that support our colleagues in achieving their
full potential.
In 2025, we updated our Global Inclusion Policy to ensure fairness
and equity across all stages of the employee experience including
hiring, promotions, succession planning, and career development.
This update reinforces our commitment to creating a workplace
where decisions are transparent and merit-based, supported
by efforts to apply inclusive practices consistently.
Inclusivity
The Multipliers and Blanchard programmes
were established to develop our people’s
leadership potential and empower people
to grow within our organisation. These
programmes, established in 2023, cultivate
our homegrown talent and support our
culture of belonging.
Multipliers programme: This programme
empowers leaders in fostering the
intelligence and creativity of their
respective teams. Through dynamic
sessions, certified content, and practical
activities, participants learn to cultivate an
environment that unlocks each team
member’s full potential. The programme
includes comprehensive assessments,
assignments, projects, coaching, and
tailored development plans.
Blanchard programme: This programme
helps leaders to tailor their leadership
approaches to be more flexible and align
with the growth stages and specific needs
of their team members. By focusing on
situational leadership, participants learn
valuable strategies for communication,
motivation, and mentorship.
Multipliers and Blanchard programmes
Sustainability at Hikma
continued
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Supporting employees whose children have disabilities
In recent years, we established programmes to address the
challenges faced by colleagues that have children with disabilities.
Our financial assistance programme supports 37 people, through
which financial aid is directed towards providing therapy, specialised
education and essential equipment. We continue to focus on
directing assistance to those colleagues living in areas
with limited government support channels.
37
people
supported by our financial assistance programme
Operational health
and safety
Our aim is to maintain or exceed industry
standards in safeguarding the health and
safety of our people. Our global health and
safety policy offers a standardised approach
to ensuring effective protocols are in place
and our people are well-informed about
health and safety guidelines. We continue
to focus on promoting the physical, mental
and emotional health of our people. We
organised mental health and mindfulness
webinars for employees, enhanced
workspaces for pregnant colleagues and
wellness days focused on nutritional and
physical awareness.
We continue to collect and refine metrics that
reflect our performance related to the health
and safety of our people. These metrics are
disclosed in our Sustainability Report and
undergo regular internal audit exercises to
ensure consistency and accuracy in data
collection and validation.
Hikma wins the United Nations ‘Governance &
Women on Boards Award’
In 2025, Hikma was recognised at the
United Nations Women’s Empowerment
Principles (UN WEPs) End of Year
Ceremony, hosted under the theme
‘Building WEP’s Momentum –
Surging Women’s Employment in Jordan
through the Private Sector.’ We have
remained signatories to the UN WEPs since
2023 and are committed to supporting
the principles within our organisation.
The event was held in Amman, Jordan and
brought together the country’s leading
private sector organisations in an engaging
forum. The award recognised Hikma as a
company that has demonstrated a strong
commitment and tangible progress towards
increasing the representation of women in
senior governance roles and on the Board.
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Strategic report
Financial statements
Corporate governance
Investing in the development of
our people for long-term growth
Our success is driven by the talent and
commitment of our people. In 2025, we
invested in programmes to strengthen
our global talent pipeline and empower
colleagues across all operations. These
efforts build a future-ready workforce
equipped to adapt to new technologies,
advance careers, and deliver better
healthcare outcomes.
With 9,400 employees worldwide, we
focus not only on enhancing technical
and leadership skills but also on creating
an environment where colleagues feel
valued, engaged, and supported in
their wellbeing.
Creating clarity through career pathways
We updated our Career Management
framework, bringing greater clarity and
consistency to roles across the
organisation. This enables colleagues to
understand growth opportunities with
clearly defined skills and experience
required for advancement.
Strengthening leadership capability
Building strong leaders at every level
remains central to Hikma’s strategy.
During the year, we continued delivering
our core leadership programmes –
Blanchard and Multipliers. A total of
149 people managers globally
participated in these programs to
strengthen their leadership and
people management capabilities.
Accelerating careers through mentorship
To support early career growth, we
launched a mentorship programme
connecting 98 colleagues with senior
leaders. This initiative strengthens
collaboration, accelerates knowledge
transfer, and helps our colleagues
shape long-term careers at Hikma.
Developing future capabilities
Guided by our AI Advisory Board, we
launched the Hikma Digital Academy,
which complements other training
programmes already active, to build
digital fluency and analytical skills.
In its first year, more than 570 people
completed 3,350+ courses, gaining
practical capabilities that improve data
use, decision-making, and efficiency.
Colleagues also completed around 75K
hours of training in other areas, an almost
15% increase versus 2024, reflecting both
our investment in continuous learning
and employees’ appetite to upskill.
We further supported 20 colleagues
through higher education programmes,
for advanced degrees and specialised
qualifications that enrich teams with
new expertise.
Our purpose in action
Our success is tied to the growth and
achievements of our people. By investing
in skills, opportunity and collaboration, we
are building a stronger, more connected
team, ready to shape healthier futures.”
Hussein Arkhagha
Chief People Officer
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Hikma Pharmaceuticals PLC |
Annual Report 2025
Strategic report
Corporate governance
Financial statements
Supporting a healthier planet
Protecting the
environment
CSRD alignment: IROs associated with this pillar
IRO
description
CSRD
classification
IRO
type
Value chain
classification
Hikma’s raw materials sourcing, manufacturing
processes, distribution activities and disposal
of medicines lead to GHG emissions which
impact climate.
ESRS:
E1 Climate change
Sub-topic:
Climate change mitigation
Impact
(negative, actual)
Upstream, own operations
and downstream (across
the value chain)
The availability of fresh water supply is critical
to Hikma’s manufacturing processes and must
be managed responsibly to ensure local
communities and ecosystems have access,
particularly in water-stressed areas such
as the Middle East.
ESRS:
E3 Water and marine resources
Sub-topic:
Water
Sub-sub-topic:
Water consumption
Impact
(negative, actual)
Financial Risk
Own operations (primarily
MENA)
Environmental sustainability targets
Target
2025 Progress
Status
Our aim for 2026
By 2030, reduce our Scope 1 and
2 emissions by 25% (baseline: 2020)
We invest in energy efficiency and renewable
energy generation, which enables us to
minimise our emissions while continuing
to grow as an organisation
Continue to pursue renewable energy and
energy efficiency solutions and explore long-term
green energy procurement opportunities where
we operate
By 2026, introduce long-term carbon
reduction targets and implement key
renewable energy projects
Identified and implemented opportunities
to improve energy efficiency and reduce
carbon emissions and identified key
renewable energy projects
Continue efforts to drive efficiency and emissions
reductions, begin implementation of key renewable
energy projects and introduce 2030+ carbon
reduction targets
By 2028, deliver key aspects of the ISO
46001 water efficiency management
system in the MENA region
Conducted site-level assessments to identify
opportunities to improve water management
Begin implementation of water stewardship
standards at relevant sites
Timeframe:
Long term
Short term
Status:
Achieved
On track
Partially achieved
Sustainability at Hikma
continued
Pinnacle metric: Scope 1 and 2 CO
2
emissions reduction since 2020
(16)%
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We pursue long-term, feasible
opportunities to reduce our emissions
footprint. In our European facilities, we
source our electricity from green sources.
In Jordan, we have established onsite
renewable energy generation that
constitutes 15% of our electricity
consumption in the country. In addition, we
have onsite renewable energy generation
in Morocco, Portugal and Saudi Arabia;
with our onsite renewable energy capacity
increasing 354% between 2021 and 2025.
We intend to expand onsite capacity in
future years, in line with achieving our
2030 emissions reduction target.
We continuously
pursue opportunities
to reduce our
emissions footprint.”
Measures to mitigate our impact
on climate change
GHG emissions
Our emissions reduction target
In 2021, we put in place a target to reduce our
Scope 1 and 2 GHG emissions by 25% by
2030, using a 2020 baseline. The target was
developed using the absolute contraction
approach and is in line with the Paris Climate
Agreement’s well-below 2°C scenario.
Our emissions profile
and performance
We use 2020 as our baseline year for our
carbon footprint and emissions recalculation
policy. To accurately track progress toward
our carbon reduction targets, we adjust our
base year emissions inventory and the most
recent reporting year to account for
significant structural changes. A significant
change is defined as an increase or decrease
in base year emissions (tCO
2
e) of more than
5% from any source.
In Q4 2024, we acquired two sites through
the Xellia Pharmaceuticals acquisition, one
in Bedford, US and the other in Croatia.
At that time, activity data was not available,
and neither site was fully operational. We
included an estimate of both sites’ full-year
emissions in our 2024 carbon footprint based
on the sites’ floor area (~3,547 tCO
2
e based
on three months of available data), as
otherwise these emissions would not have
been reported anywhere else. We did not
adjust the base year because the estimate
of the new sites’ emissions was less than 5%
of the base year total.
In 2025, aſter ramping up activity at the sites,
we calculated these sites’ emissions and
used the same activity data to estimate
both sites’ emissions in 2020 as if they were
operating at the same level of activity. This
allows us to compare our 2025 emissions
with our base year emissions on a like-for-like
basis. The estimated 2020 emissions exceed
5% of the base year emissions on this
like-for-like basis and therefore justify
a restatement of our baseline emissions.
As this scenario was not previously
anticipated in our reporting criteria, we have
updated these to further clarify conditions
for any base year restatement. We have
determined that the emissions footprint of
an acquisition or the change of ownership of
an asset or assets shall be incorporated into
our emissions inventory within one reporting
year following the transaction’s completion.
This more clearly defines when and how to
add estimated emissions totals to the base
year and most recent years (ie when a full
year of data is available).
As a result of adding the new sites to the base
year, our 2020 emissions will increase by
approximately 10,243 tCO
2
e. In 2025, the
same sites’ emissions are estimated to be
9,193 tCO
2
e (with the difference due primarily
to evolving emissions factors).
In 2025, our Scope 1 and 2 emissions
(market-based) measured 130,742 tonnes of
carbon dioxide equivalent (tCO
2
e). Compared
to our base year of 2020, we have reduced our
emissions by 16%.
Going forward, we will pursue opportunities
to increase energy efficiency through new
machinery and improved operational
processes.
We also aim to continue the development of
renewable energy generation at our sites and
the purchase of electricity from green sources
where feasible, viable options exist.
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Strategic report
Financial statements
Corporate governance
GHG emissions (tCO
2
e)
2020
1
(base year)
2025
2
2024
2023
Scope 1 – Combustion of fuel and operation of facilities
51,812
46,742
38,468
43,830
Scope 2 (market-based) – Electricity
103,330
84,001
81,804
79,897
Total Scope 1 and 2 emissions (market-based)
155,142
130,743
120,272
123,727
Year-on-year change in Scope 1 and 2 emissions (market-based)
N/A
9%
(2)%
3%
Change in Scope 1 and 2 emissions (market based) since base year 2020
N/A
(16)%
(29)%
(25)%
Scope 2 (location-based) – Electricity
100,752
92,575
87,237
83,536
GHG emissions
(tCO
2
e)
2025
2
130,743
46,742
84,001
2024
120,272
2023
123,727
2020
1
(base year)
155,142
38,468
81,804
79,897
51,812
103,330
43,830
Scope 1
Scope 2
1.
The base year 2020 emissions and energy footprint was adjusted in 2025 to account for the Xellia acquisition of sites in the US and Croatia. Emissions restatements that are conducted to
account for site acquisitions are applied when the acquired emissions makes up more than 5% of the total emissions footprint. This is in line with our reporting criteria and the GHG
Protocol. The amount of 10,243 tCO
2
e and 21,737 MWh was therefore added to the 2020 baseline year. No restatements were made for other comparative years (2023 and 2024)
2.
Our 2025 reported figures for energy and emissions are based on actual consumption for Q1–Q3 and a Q4 estimation, as per the methodology in our reporting criteria. Full year emissions
are published in Q2 2026 in our Sustainability Report 2025
Energy consumption (MWh)
2020
(base year)
2025
2024
2023
UK
ROW
Total
UK
ROW
Total
UK
ROW
Total
UK
ROW
Total
Electricity
129
222,619
222,748
168
250,802
250,970
168
229,038
229,206
168
217,876
218,044
Fuels
3
871
240,396
241,267
69
232,118
232,187
712
191,667
192,378
21
213,367
213,388
3.
In 2025, we used actual data to determine energy consumption from fuels while in previous years, based on availability of invoices, we used estimations of varying methodology
Emissions intensity by revenue
4
(tCO
2
e/$m revenue)
2025
2024
2023
Scope 1 and 2 emissions (market-based)/revenue
39.0
38.1
43.1
Scope 1 and 2 emissions (location-based)/revenue
41.6
39.8
49.5
4.
Emissions intensity is calculated using Group-wide core revenue ($m)
– Revenue 2023: 2,875
– Revenue 2024: 3,156
– Revenue 2025: 3,349
Sustainability at Hikma
continued
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UK emissions
The Group operates one location within the
UK, where we are listed, which is an office
building that is managed by a third party.
During the year, the UK site consumed
237 MWh of energy, which is equivalent
to 84 tCO
2
e. The energy consumption is
measured by meter readings provided by
the managing agent and relates to electricity
and gas used for heating, cooling and general
office power.
Reported fuel use between 2020 and 2025 for
the UK was an estimate that was developed
based on employee headcount. The Group
does not provide transport within the UK
other than via private hire vehicles for which
consumption data is not available.
UK emissions (as a percentage of Group Scope 1 and 2 emissions)
0.06%
Improving water efficiency at our
Morocco facility
Water management is one of our main environmental focus areas
due to its importance to our manufacturing process and the
water scarcity issues prevalent in many of our operating
locations. In 2025, we completed several projects in Morocco
that improve how we use and manage water at our facility. We
implemented a water reuse initiative whereby rejected purified
water is treated and reused for irrigation and maintenance.
This initiative saves more than 7,500 cubic metres annually.
We also significantly increased our water storage capacity,
improving water security, mitigating supply risks and reinforcing
our business resilience. Increasing our water reserve capacity
from 60 cubic metres to 750 cubic metres at our site strengthens
the reliability of water access at our production facility.
7,500
cubic metres saved annually
Hikma AMC facility in Jordan wins
Green Factory Award
Our AMC facility in Jordan was awarded the Green Factory Award
in 2025. The award was established by the Jordan Chamber
of Industry (JCI) in cooperation with the German Agency for
International Cooperation (GIZ) to encourage environmentally
responsible business practices and lay the groundwork for the
country's transition to a green economy. AMC’s progress in
adopting energy-saving production methods, waste reduction
and increased use of eco-friendly materials all contributed
to receiving the 2025 award.
The Hikma AMC facility adopted
energy-saving measures
and increased the use of
eco-friendly materials.”
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Financial statements
Corporate governance
GHG emissions, Scope 3
(tCO
2
e)
2
024
861,756
31,683
8,401
8,193
2,079
42,089
32,081
8,247
681,720
713,855
47,263
38,800
32,995 6,766
2
023
836,008
10,241
3,105
2
025
827,185
35,654
8,387
59,485
8,348
1,781
30,246
29,295
12,153
614,451
57,631
Purchase of goods and services
Capital goods
Employee commuting
Fuel and energy related activities not included in Scope 1 and 2
Upstream transportation and distribution
Use of sold products
Waste generated in operations (including water)
Business travel
End of life treatment of sold products
Scope 3 emissions
We began measuring our indirect, Scope 3
emissions in 2021, prioritising the oversight
of emissions most relevant to our business.
We continue to refine the quality of our
emissions measurements and engage with
our suppliers to better understand their
commitments to emission reductions.
We continue to improve oversight of emissions
generated through our value chain and
are taking measures to include emissions
categories that are relevant but not
yet calculated. We expect to determine all
categories’ relevance by the end of 2026.
GHG emissions, Scope 3 (tCO
2
e)
Scope 3
category
Category
description
Notes
2025
2024
2023
1
Purchase of goods and services
614,451
681,720
713,855
2
Capital goods
57,631
47,263
38,800
3
Fuel and energy related activities not included in Scope 1
or Scope 2
35,654
31,683
30,246
4
Upstream transportation and distribution
29,295
32,081
32,995
5
Waste generated in operations (including water)
1,781
2,079
3,105
6
Business travel
8,348
8,193
6,766
7
Employee commuting
8,387
8,401
10,241
8
Upstream leased assets
not relevant
–
–
–
9
Downstream transportation and distribution
relevant, not yet calculated
–
–
–
10
Processing of sold products
not relevant
–
–
–
11
Use of sold products
59,485
42,089
–
12
End of life treatment of sold products
12,153
8,247
–
13
Downstream leased assets
not relevant
–
–
–
14
Franchises
not relevant
–
–
–
15
Investments
not relevant
–
–
–
Total
827,185
861,756
836,008
Water and waste
management
The management of our water consumption
and waste generation are core components
of our sustainability strategy. Water use is
essential to the manufacturing process for
pharmaceuticals, particularly injectable
products. Moreover, many of the locations
where we operate, primarily those in MENA,
have water scarcity issues. These
considerations were reflected in our DMA and
in water screening exercises conducted in
previous years. In order to manage these risks
and dependencies, we are prioritising water
management and efficiency, particularly in
locations where water scarcity and water
security issues are highest.
We have in place formal ambitions to identify
gaps and opportunities for efficient water use
in the region, and an ambition to set water-
related targets for sites in MENA that impact
water consumption, reuse, and alignment with
best practices.
We are continuously improving data quality
around waste management and exploring
opportunities to reduce environmental
impacts related to waste incineration and
other treatment methods.
Sustainability at Hikma
continued
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Governance of sustainability
Board of Directors – CREC
Overarching oversight of sustainability
Executive Committee
Leadership and alignment of sustainability with corporate strategy
Sustainability team
Executive Sponsor-led:
Steer and coordination
ESG Committee:
Access to Medicine
ESG Committee:
Environmental Sustainability
Global functions and
site management teams
Employee networks
Upholding ethical standards and acting with integrity
Operating transparently
and ethically
CSRD alignment: IROs associated with this pillar
IRO
description
CSRD
classification
IRO
type
Value chain
classification
Hikma’s corporate culture focuses on the values
of caring, collaboration and innovation, which
are integrated into all aspects of the Group’s
operations, affecting financial performance.
ESRS:
G1 Business conduct
Sub-topic:
Corporate culture
Impact
(positive, actual)
Financial Opportunity
Upstream, own
operations and
downstream
(across the
value chain)
Ethical conduct to ensure vigilance against
corruption or bribery is essential for Hikma,
as a pharmaceutical company, to uphold its
reputation and protect itself from financial losses.
ESRS:
G1 Business conduct
Sub-topic:
Corruption and bribery
Sub-sub-topic: Incidents
Financial Risk
Upstream, own
operations and
downstream
(across the
value chain)
Ethical business conduct
Conducting business with ethics and integrity
is a shared responsibility for everyone at
Hikma and is fundamental to our corporate
culture and how we do business. We are
committed to upholding the highest ethical
standards in all facets of our business and
across our value chain.
Our CoC provides an overview of the legal,
regulatory and ethical requirements and
expectations for our people, partners and
those that we do business with. Our CoC is
available in seven languages and shared with
all colleagues. Our colleagues, officers and
directors are trained on the CoC as part of
their induction and are provided refresher
training periodically. The completion rate
for our CoC training in 2025 was 99%.
Corporate governance
The CREC promotes and oversees our
commitments to business integrity,
compliance, communities, ethical
conduct, and key aspects of Hikma’s
sustainability strategy.
Pinnacle metric: CoC training completion rate
99%
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Corporate governance
Responsible value chain
We are fully committed to working closely with
our suppliers and downstream stakeholders
to ensure that our sustainability strategy
is deeply integrated across every part of
our value chain.
Our approach involves actively engaging
with suppliers to enhance their social and
environmental sustainability practices,
fostering greater awareness and action on
key issues throughout the supply chain.
Our Supplier CoC continues to be the
cornerstone of our supplier onboarding
process, ensuring that all suppliers comply
with relevant laws, maintain high-quality
standards, and operate with integrity. This
commitment is key to fostering trust and
transparency throughout our supply chain.
The Code outlines critical areas including
regulatory compliance, labour rights (with
a focus on preventing modern slavery),
product quality assurance, and environmental
sustainability. By adhering to these principles,
we actively manage risks related to fraud,
contamination, and non-compliance,
safeguarding the integrity of our operations.
The Supplier CoC is publicly available on our
website for full transparency.
To ensure that all our suppliers – both new and
existing – meet these standards, we utilise
a comprehensive assessment process via our
third-party platform, Moody’s. This platform
evaluates suppliers based on a set of risk
criteria, categorising them according to
their risk level.
Suppliers identified as high-risk undergo more
rigorous due diligence to ensure they meet our
ethical standards. We continuously monitor
these suppliers to stay proactive against
reputational, compliance, and other risks,
including sanctions, negative media attention,
and potential political affiliations. This
real-time monitoring is integrated seamlessly
into our broader risk management framework,
combining our supplier portal, Moody’s risk
data, and EcoVadis’s sustainability rating tool.
This integrated system enables us to maintain
transparency and uphold our due diligence
processes across our entire supply chain.
In 2025, we significantly advanced our supplier
screening capabilities with the introduction
of IQ+Vitals, a tool that enhances our ability
to assess a larger volume of suppliers
efficiently. We were able to extend our due
diligence coverage to nearly 75% of our total
spend. With IQ+Vitals, we could identify and
flag high-risk suppliers more quickly, enabling
us to take swiſt action. For those flagged as
high-risk, we issued tailored questionnaires
and engaged directly with the suppliers to
address and mitigate any identified risks.
This proactive engagement ensures that we
are not only identifying potential vulnerabilities
We are fully committed to working closely with
our suppliers and downstream stakeholders
to ensure a responsible value chain.”
but also working collaboratively with our
suppliers to resolve them, further
strengthening the integrity of our supply chain.
Our Modern Slavery Task Force, which
includes experts from procurement, legal,
and compliance, leads a proactive, risk-based
approach to assess and reduce the risk of
any form of modern slavery across our
supply chain.
During 2025, we expanded the range of
supplier categories assessed as having
potential exposure to modern slavery risks.
This enhanced scope was supported by
additional, targeted modern slavery
questionnaires, complemented by insights
from EcoVadis evaluations and the IQ+Vitals
screening tool. These combined mechanisms
enabled deeper visibility into supplier
practices and risk profiles.
Where potential risks were identified,
we engaged constructively with suppliers –
and through this collaborative approach,
we addressed areas of concern, reinforced
expectations, and confirmed that any
identified risks were mitigated. This ongoing
engagement reflects our commitment to
continuous improvement and to upholding
the highest standards of ethical conduct
across our supply chain.
In 2025, we engaged our top 200 suppliers
through a compliance survey. The survey
measured suppliers’ perceptions of Hikma’s
ethical business practices and their alignment
with our Supplier CoC, strengthening oversight
and engagement with our key suppliers.
Looking forward, we will continue to refine and
implement our approach, ensuring it evolves
in line with emerging best practices and
legal requirements.
Sustainability at Hikma
continued
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Financial statements
Corporate governance
TCFD disclosure
This section includes disclosures that are consistent with the
requirements outlined within the Task Force on Climate-related
Financial Disclosures (TCFD) as well as the mandatory reporting
requirements set out in the Companies Act relating to
Climate-related Financial Disclosures (CFD).
As a UK-listed company, and in accordance with UK Listing Rule (UKLR) 6.6.6(8), this section summarises our progress as of 31 December 2025
against the four TCFD pillars and 11 TCFD recommendations. Our approach follows the TCFD’s All Sector Guidance. Data and records that
support these disclosures are retained in accordance with the UK Financial Conduct Authority requirements for listed entities. Our disclosures
are fully consistent with nine of the TCFD recommendations and partially consistent with two recommendations, as set out on pages 66 to 68,
recognising that we will continue to improve and refine our implementation of the recommendations. Our TCFD and CFD disclosures have
supported the awareness and integration of climate-related issues into our broader business strategy.
Compliance statement and index table
Consistency:
Consistent
Work in progress
Disclosure
Consistency
Status
Reference
Governance
a)
Describe the board’s oversight of
climate-related risks and opportunities
–
The Board has ultimate responsibility for Hikma’s
Sustainability strategy and monitors the impact of climate
change on the Group and the Group’s impact on the
environment. Climate-related risks are considered by
the Board and are included in the ERM programme. The Board
also reviews progress in relation to the metrics and targets
defined for climate-related risks and opportunities
–
The Board, through the Compliance, Responsibility and Ethics
Committee (CREC) receives ESG-related updates from the
EVP Strategic Planning and Global Affairs – a member of the
EC – and the VP of Sustainability, including climate-related
risks and opportunities, progress against environment-related
targets, and any changes in risk status
Page 70
b)
Describe management’s role
in assessing and managing
climate-related risks and opportunities
–
Hikma’s VP Sustainability leads the Group’s assessment of
climate-related risks and opportunities and manages these
through the cross-functional TCFD Working Group, which
includes relevant internal stakeholders
–
The VP of Sustainability also oversees the implementation
of the Group sustainability strategy
–
The Environmental Sustainability Committee, chaired by two
EC members including our Chief Executive Officer, oversees
our climate-related action plans
Page 70
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Disclosure
Consistency
Status
Reference
Strategy
a)
Describe the climate-related risks
and opportunities the organisation
has identified over the short, medium,
and long term
Through climate scenario analyses (CSA), Hikma has identified
and assessed climate-related risks associated with carbon
pricing, energy pricing, water stress, and physical impacts on our
facilities, such as floods and storms. Hikma has also evaluated
climate-related opportunities, including conducting a CSA
that assessed the financial opportunity of increasing onsite
renewable energy capacity within our facilities.
Page 73
b)
Describe the impact of
climate-related risks and
opportunities on the business,
strategy, and financial planning
–
The financial impact of climate-related risks has been
considered over three separate time horizons to 2050
–
Until 2030, which we consider to be short term for the
purpose of climate-related risk analyses, the financial impact
is not material under all risk and scenarios analysed
–
Beyond 2030 and 2040, the upper bound of financial impacts
from carbon pricing and extreme weather may be material
under specific long-term scenarios. However, once the velocity
and likelihood of these risks are considered within our risk
management process, the risks do not meet our financial
materiality threshold as per the definition on page 158
–
We incorporate climate-related risks and opportunities into
our business strategy and financial planning by budgeting
for energy and water-use efficiency, increasing renewable
energy capacity, and working with third-party advisers
and consultants
Pages 71,
74–78
c)
Describe the resilience of the
organisation’s strategy, considering
different climate-related scenarios,
including a 2°C or lower scenario
The results of our CSA show that climate change is not expected
to have a material impact on the Group’s financial viability on
a short-term time horizon to 2030 under all climate scenarios
analysed. Our CSA, longer-term viability statement and
impairment tests are aligned through common scenario inputs.
Given the limited expectations for climate-related financial
impacts, and when velocity and likelihood of risk have been
considered, the Group believes that its strategy is robust and
will be resilient to climate change in the short-, medium- and
long-term time horizons.
Pages
74–78
Risk Management
a)
Describe processes for identifying
and assessing climate-related risks
–
We regularly review and update our climate-related risk
and opportunities register including input from business
stakeholder workshops, peer review benchmarking, our risk
management programme, and other sources
–
The TCFD Working Group assessed risks and opportunities
from the updated risks register in terms of likelihood, velocity,
and impact at Group level
–
Relevant climate-related risks and opportunities are assessed
through climate scenario analysis. Physical risks are assessed
across all sites, this will include the new locations from our
Xellia acquisition when the CSA is next updated
Pages
71–73
b)
Describe processes for managing
climate-related risks
Climate-related risks are identified, assessed, and managed
by teams across the organisation, steered by our Sustainability
function. The risk score and our risk appetite determine the level
of escalation and monitoring within Hikma’s risk management
framework, with significant risks being escalated into our
ERM process.
Pages
71–73
c)
Describe how processes for
identifying, assessing and managing
climate-related risk are integrated
into overall risk management
We regularly assess climate-related risks and review TCFD
alignment as part of our ERM process, where climate change
is characterised as an Emerging Risk.
Pages
71–73
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Financial statements
Corporate governance
Disclosure
Consistency
Status
Reference
Metrics and targets
a)
Disclose metrics used to assess
climate-related risks and opportunities
in line with strategy and risk
management process
Metrics used to assess our climate-related risks and
opportunities include Scope 1, 2 and 3 emissions, electricity
consumption, emissions intensity, water consumption and
waste generation among others.
Page 60
b)
Disclose Scope 1, Scope 2 and Scope 3
GHG emissions and related risk
We disclose details of our Scope 1 and 2 and nine relevant
categories in Scope 3 GHG emissions.
Five Scope 3 categories have been determined to be not relevant.
One category (Cat 9) is determined to be relevant but not yet
calculated and we are working to introduce disclosures for these
categories in our 2026 carbon footprint.
Pages 60,
62
c)
Describe targets used to manage
climate-related risks and opportunities
and performance against targets
Increasing energy costs and carbon pricing presents potential risks
to our business.
We manage our climate-related risks, opportunities and
performance against the following Scope 1 and 2 and
water-related targets:
–
Reduce our Scope 1 and 2 GHG emissions by 25% by 2030,
using a 2020 baseline
–
By 2026, introduce further carbon reduction targets and
implement key renewable energy projects
–
By 2027, deliver key aspects of the ISO 46001 Water Efficiency
Management System in the MENA region
We currently do not have Scope 3 targets in place but proactively
engage with our key suppliers to raise awareness about
sustainability. We are working to improve our understanding of
emissions in our value chain and have an ambition to introduce
Scope 3 targets in the medium term. We will consider this
disclosure as consistent once a Scope 3 target has been set
and established.
In addition, we are actively engaging with our value chain partners
to partially mitigate the impact of carbon cost pass-through in
the future.
Page 58
Key improvements in 2025
–
Introduced calculations for two relevant
Scope 3 categories (Category 11: Use of
Sold Products and Category 12: End of Life
Treatment of Sold Products) to our 2025
carbon footprint reporting which were not
previously calculated
Key improvements planned
for the next two years
–
We will continue to assess the remaining
Scope 3 categories that are considered to
be relevant. Calculations are ongoing for
Category 9 and are planned to be included
in our 2026 carbon footprint
–
We plan to refresh our Climate Scenario
Analysis (CSA) in 2027. This is in line with
best practice to update the analysis every
three years to ensure it remains relevant in
light of evolving climate science, policy
changes, and business context
–
As part of the updated CSA we will include
physical risks analysis for the new locations
from the Xellia acquisition – these new
sites did not trigger an immediate update
from our previous CSA since the locations
closely align with current operations
already covered within the analysis
TCFD disclosure
continued
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Trigger points
In line with good risk management practice, the TCFD Technical Guidance recommends that a CSA programme should be re-assessed when
the context of the organisation changes.
The following ‘trigger points’ have been adapted from TCFD Technical Guidance. These trigger points were assessed by Hikma as part of the
CSA Programme in 2024 and have been reviewed again in 2025.
Trigger point
Assessment
1.
Key location changes in a company’s portfolio. If companies
expand into new regions, they are likely to encounter novel
physical and transition risks.
In September 2024, Hikma acquired Xellia’s US-based
finished dosage form business and related assets, including a
manufacturing site in Bedford (OH), an R&D centre in Zagreb
(Croatia) and a commercial office in Chicago (IL). These facilities
will be included in future CSA assessments, however an immediate
assessment of physical risks for these locations was not deemed
necessary as they largely align with site locations already included
within our assessments.
2.
Release of updated climate scenarios and models which may
impact the projections of risks and opportunities.
N/A
3.
Developments in climate-related policies previously unforeseen
during the original climate scenario analysis process.
N/A
4.
Changes to company’s strategies or operations leading to
changes in the materiality of climate risks and opportunities
to the business.
There have not been any significant changes to the
Group’s strategy or operations that change the exposure to
climate-related risks in 2025. This includes the acquisition of
Xellia already mentioned.
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Corporate governance
Governance
Board level oversight
Our Board of Directors, led by the Chairman
of the Board, oversees our environmental
sustainability strategy and considers
climate-related matters throughout the year.
Our EVP Strategic Planning and Global Affairs
and VP of Sustainability provide ESG-related
updates to the Board, including climate-
related risks and opportunities, progress
against environment-related targets, and
any changes in risk status. This occurs in
scheduled bi-annual presentations and
in more regular updates to the Board’s
Compliance, Ethics and Responsibility
Committee (CREC). ESG-related initiatives
have been included in our five-year capital
expenditure business plan, overseen by the
Board. The Board has ultimate responsibility
for the Group’s approach to risk management
and internal control and climate related risks
are included in our ERM process. The Audit
Committee (the Committee) oversees risk
management and internal control activities
with delegated authority from the Board
(see Risk Management section, page 80).
The TCFD Working Group presented the
findings from the TCFD work this year to
the Committee. A general progress report
is sent to the Chairman of the Board three
times a year. The report includes a section
on TCFD-related projects progress and
environmental impact reporting.
The Remuneration Committee linked
environment-related targets to the three-year
Long-term Incentive Plan (LTIP) and the
annual bonus award for the Executive
Chairman, the Executive Vice Chairman
of the Board and the CEO. The targets were
related to emissions reduction and approach
to water stewardship. More information
on metrics linked to executive remuneration
can be found at pages 138 and 139.
Management level leadership
Our EVP Strategic Planning and Global
Affairs, who reports directly into our CEO,
heads up the TCFD Working Group that
started in 2021 and consists of senior
representatives from Group Risk
Management, Procurement, Finance,
Sustainability and Investor Relations.
This group leads our internal
cross-functional efforts to integrate the
TCFD recommendations into our business
and meets on a regular basis.
Our VP of Sustainability, who reports to
our EVP of Strategic Planning and Global
Affairs, sets the sustainability strategy
and the alignment of TCFD findings and
recommendations with the broader
corporate strategy.
Our crisis and continuity teams work closely
with members of the TCFD Working Group
and provide insight into the potential impact
of climate-related risks on our operations. In
addition, external consultants help progress
our understanding of Hikma’s climate-related
risks and opportunities. The Environmental
Sustainability Committee, chaired by two
EC members, meets more than annually
to review metrics, progress against TCFD
recommendations and our targets and
oversees the development of action plans.
We continue to focus on strengthening our
ESG governance, including climate change,
at all levels of the organisation.
Sustainability, risks and opportunities, and TCFD governance
Board
Oversight of Group sustainability strategy, risk and opportunity management,
and TCFD consistency
Executive Committee
Leadership in implementing sustainability strategy, risk and opportunity
management, and TCFD consistency
Sustainability management team
Led by the VP of Sustainability,
oversees sustainability matters and
the identification of climate related
risks and opportunities
TCFD Working Group
Cross functional working group that
includes senior leaders in Finance,
Risk, Sustainability, Procurement,
Legal and Investor Relations teams
Finance team
Site management and
operational teams
Risk management team
Investor relations team
Crisis and continuity management
Procurement team
TCFD disclosure
continued
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1.
For more information on CSA guidance, refer to Task Force on Climate-related Financial Disclosures Guidance on Scenario Analysis for Non-Financial Companies (2020), https://assets.
bbhub.io/company/sites/60/2020/09/2020-TCFD_Guidance-Scenario-Analysis-Guidance.pdf
Risk management
Process for identifying and assessing
climate-related risks
We conduct risk identification and
assessment exercises as part of the ERM
process with all risk owners across the
business (see page 83 for details on our risk
processes). The outcomes of these reviews
feed into the TCFD Working Group’s
assessment of the most relevant climate-
related risks for Hikma. The TCFD Working
Group monitors relevant current and
emerging regulation, market risks,
reputational risks, technology risks and
acute and chronic physical risks.
The Board has overall responsibility for
Climate-Related Risks and Opportunities
(CRROs), while the EC provides leadership
in managing them. The Sustainability
management team, led by the VP of
Sustainability, oversees sustainability matters
and the identification of climate related risks
and opportunities. The TCFD Working
Group is a cross-functional group that
includes senior leaders in Finance, Risk,
Sustainability, Procurement, Legal and
Investor Relations teams.
The VP of Sustainability oversees the
identification, assessment and management
of CRROs, and works with other functions
including the Risk Management team to
integrate them into the Group’s overall risk
management process. Updates to CRROs
are considered on an annual basis.
CSA methodology
To regularly assess Hikma’s climate-related
risks and opportunities over the short,
medium and long term, we conduct Climate
Scenario Analysis (CSA) including financial
impact assessment with support from
third-party experts. These exercises assess
a range of potential climate-related risks
and opportunities across multiple different
climate scenarios and time horizons drawing
on public reference projections for changes
to the climate system, socio-economic
pathways, energy market dynamics,
technological progress and financial risks.
Since initiating CSA in 2021, we have
continuously refined our approach, including
the refinement of our climate scenario
narratives in 2023 as informed by climate
projections, per the figure below.
Our CSA methodology undergoes annual
review to ensure robustness and relevance.
In recent years, we have expanded the
geographic boundary to assess the water
stress risk of some of our larger facilities
including in Columbus (OH, US), Morocco,
Portugal and Tunisia. We also assessed and
quantified the opportunity of developing
onsite renewable energy solutions at our
facilities. In 2024, an independent review of
our CSA work and our efforts to align with the
TCFD recommendations concluded that
we have a well-developed TCFD response
with year-on-year improvement and clear
management processes to assess climate-
related risk. The outcomes of this review are
provided in the below table, showing for each
step of the CSA as per TCFD guidance
1
,
the consistency of approach with TCFD
guidelines, and how we plan to improve this
in future where relevant. These efforts remain
integral to our climate risk strategy in 2025,
as we build on previous work to deepen
understanding of our climate-related risks
and opportunities to support decision-
making across the business.
Time horizons used for CSA
Term
Years
Financial alignment
Short term
2023–2030
Include five-year Business Plan and three-year Long-term Viability Statement (LTVS)
Medium term
2031–2040
Next 8–16 years, asset life of equipment
Long term
2041–2050
Next 17–26 years, asset lifetime of properties and facilities
Climate scenario narratives
Low Carbon world (~1.5°C)
Orderly
This is a ‘Net Zero by 2050’ aligned
scenario where global temperature
rise is
limited to 1.5°C warming. The
transition is smooth and immediate
.
Transition risks are likely to
be experienced associated with
the transition to a green economy
however, physical risks will be reduced.
Low Carbon world (~1.5–2°C)
Disorderly
This is a ‘Net Zero by 2050’ aligned
scenario where global temperature rise
is limited to
1.5°C but the transition is
divergent and/or delayed
.
Significant transition risks
are likely
to be experienced associated with the
transition; however, physical risks will
be reduced.
High Carbon world (~3–4°C)
This is a ‘business-as-usual’ scenario
where global
temperatures rise to
3–4°C
above pre-industrial levels.
Climate policies are not sufficient
to achieve official commitments and
physical risks considerably increase
resulting in catastrophic impacts.
The Low Carbon world – Disorderly transition is considered the most relevant scenario to Hikma and those scenario assumptions have
been used in financial statement preparations for alignment.
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Financial statements
Corporate governance
Step in TCFD CSA guidance
Consistency
Key improvements and next steps
Engaging stakeholders
Consistent
We will continue to engage and inform key stakeholders about any current
and future developments in our CSA approach, and to ensure that our
stakeholders understand the purpose of the CSA process, the key steps
conducted, and the outcomes.
Problem definition
Consistent
We conducted qualitative workshops to ensure our focal question was
relevant to our business strategy and priorities, and linked to our CSA work.
Assessing context and identifying
driving forces and uncertainties
Consistent
We conducted a workshop engaging key stakeholders to identify our
key business drivers and review the list of identified climate-related risks
and opportunities.
We conducted a quantitative analysis of energy pricing risk aſter it was
flagged through the workshop as a potential missing risk.
Understanding and describing scenario
outcomes/pathways and writing
qualitative scenario narratives
Consistent
We produced robust scenario narratives for three separate future
climate scenarios: Orderly Transition, Disorderly Transition and
High Carbon Scenario.
We will continue to utilise these narratives to effectively inform stakeholders
across the business about identified climate risks and opportunities.
Quantification of risks, opportunities and
financial impacts
Consistent
We work with third-party experts to review applied models and identify/
implement improvements, as well as to review the materiality of risks and
opportunities and update accordingly.
Checking quality and avoiding pitfalls
Consistent
We work with third-party experts to conduct annual health checks of our
CSA work and integrate recommendations and findings accordingly.
We periodically update our CSA work and refine the scenarios and models
used and integrate the findings into our overall strategy.
Strategic management using scenarios
Consistent
We assess the strategic relevance of risks that have not currently undergone
quantitative modelling and ensure continuous monitoring and assessment
of external environment and resilience strategies.
Disclosure
Consistent
We include the following in our annual disclosures:
–
Explanation of how identified risks and opportunities were prioritised
–
Clearly defined conditions for risk and opportunity assessment,
including clear time horizons, likelihood and magnitude
–
Disclosure of financial impacts of risks from the quantitative modelling
–
Details of the climate scenarios used
–
Disclosure of all time frames considered
–
Explanation of how CSA results are integrated into our strategy
and how our strategy may change to accommodate risks and
opportunities identified
Integrating risk management processes
Climate-related risks are identified, assessed,
and managed by teams across the
organisation. Our risk management
framework (see page 82) provides a structure
for significant risks to be escalated and
integrated into our ERM process.
Examples of how climate-related risks are
managed and integrated into existing risk
management activities include:
–
Longer-term viability assessment:
environment and climate change related
risks are included in the assessment
(see page 90)
–
Crisis and continuity management
programme: site assessments of physical
risks and controls are undertaken
(see page 88)
–
TCFD alignment is considered as part
of the ‘Reputation’ principal risk
–
Climate change occurrence is monitored
as an emerging risk
TCFD disclosure
continued
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Strategy
Risks and opportunities identified
Through our risk management framework
as set out in the Risk Management section
of this report, the below climate-related
risks (four risks) and opportunities (one
opportunity), were selected from our
climate-related risk register of 16 risks
and opportunities as the most relevant
for further analysis based on materiality
assessed through qualitative assessment
and stakeholder engagement.
Physical risks
–
Impact of extreme weather events,
specifically the impact of severe floods
and storms
–
Impact of chronic changes to the natural
environment, specifically the impact of
increased water stress
Transition risks
–
Impact of carbon pricing, including carbon
pricing mechanisms, carbon pass-through
costs in the supply chain and the increased
cost of raw materials
–
Impact of energy pricing
Climate-related opportunities
–
Impact of pursuing renewable energy
solutions globally, including through
generation, power purchasing
agreements, and an active energy
supply management strategy
Basis for determining materiality of
climate-risks and opportunities
To assess the relevant climate-related risks
and opportunities, the financial impact
assessment of the Climate Scenario Analysis,
as per the methodology outlined in the Risk
Management section, are integrated into our
Enterprise Risk Management system. We
then apply a risk scoring matrix that
considers likelihood, velocity of risks (the
timescale for the risk impact to be felt),
financial impact, and a wide variety of
possible impacts including, but not limited to,
delivery of strategic objectives, patient safety,
product quality, reputation, continuity
of supply, management time and effort to
remediate. Once these factors are applied,
the resulting risk scores and financial impacts
are considered against our determined
financial materiality benchmark used in
reporting, set at 5% of core profit before tax.
In the most recent assessment based on
2024 financial data, this threshold was
$31 million. In the context of this climate
risk assessment approach, the CSA results
do not exceed our climate-related financial
materiality threshold under all risks and
scenarios analysed. While the upper bound
of financial impact from carbon pricing and
extreme weather events do exceed the
threshold in the long-term under specific
scenarios, aſter applying the scoring for their
likelihood and velocity, their assessed
materiality is significantly reduced and falls
below the threshold. We will continue to
monitor all relevant climate risks, and update
materiality assessments to account for
changes to impact, likelihood or velocity,
ensuring mitigation measures are appropriate
to ensure our long term resilience to
climate-related risks.
The climate projections, scenarios and time
frames used to assess each of the relevant
climate-related risks and opportunities are
outlined in the following table.
Associated climate scenario narrative
Risks
Climate Projections
1
Low carbon
world
Orderly
Low carbon
world
Disorderly
High
carbon
world
Timeline
Last
assessed
Physical risks
Impact of
storms
–
NOAA and Bank of England 1.5°C, 2°C, 4°C,
based off various NGFS Scenarios
–
Y
Y
2030,
2040,
2050
2021
Impact of
floods
–
IPCC RCP4.5 (~2.4°C), IPCC RCP8.5 (4°C)
–
Y
Y
2030,
2040,
2050
2023
Impact of
water stress
–
IPCC RCP 1.9, IPCC RCP 2.6, IPCC RCP 7.0, IPCC RCP 8.5
–
Aqueduct Water Risk Atlas 4.0
Y
Y
Y
2030,
2040,
2050
2024
Transition risks and opportunities
Impact of
carbon pricing
–
IEA APS, IEA NZE, IEA STEPS
Y
Y
Y
2030,
2040,
2050
2023
Impact of
energy pricing
–
EnerData EnerFuture database (EnerBase, EnerBlue,
EnerGreen)
2
Y
Y
Y
2030,
2040,
2050
2023
Impact of
pursuing
Renewable
Energy (RE)
opportunities
Y
Y
Y
2030,
2040,
2050
2024
1.
CBES = Climate Biennial Exploratory Scenario, IEA = International Energy Agency, IPCC = Intergovernmental Panel on Climate Change, NGFS = Network for Greening the Financial System,
NOAA = National Oceanic and Atmospheric Administration, RCP= Representative Concentration Pathways, NZ= Net-zero, NZE=Net-zero emissions, APS=Announced Pledges Scenario,
STEPS= Stated Policies Scenario
2.
EnerData provides climate scenario specific energy pricing projections
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Corporate governance
CSA results for relevant climate-related risks and opportunities
The CSA results for each of the climate-related risks and opportunities that are most relevant to Hikma, are summarised below. This includes the
financial impacts (costs shown reflect prices at the time of analysis without adjustment for inflation), timeframes, calculation basis and Hikma’s
level of resilience for each risk and opportunity. These findings are the results of the latest CSA exercise undertaken for each risk and
opportunity, more details of which can be found in the Risk Management section of this report.
Financial impact – range across scenarios
2030: Short term
2040: Medium term
2050: Long term
Climate scenario narratives used
1. Transition risks
Impact of carbon pricing
Reflected as potential increase in
procurement costs in assessed
categories due to carbon fee, if
unmitigated (not cumulative, annual)
$3m – $10m
$7m – $40m
$8m – $76m
Low Carbon world – Orderly transition
Low Carbon world – Disorderly transition
High Carbon world
How did we calculate the potential financial impact of carbon pricing?
We used SE Advisory Services’ Carbon and Energy Pricing Tool, which is informed by academic research, CDP data, and publicly available
carbon price projections from the International Energy Agency. Cost exposure is calculated based on projected carbon and energy prices,
combined with Hikma’s projected consumption of relevant goods and services.
How would this risk affect operations and financial planning?
Direct emissions from Hikma’s purchased goods and services will be regulated by (future) carbon pricing mechanisms, climate regulation
and carbon tax. Carbon pass-through costs from third parties in our supply chain, who are subject to carbon pricing (such as transport,
distribution suppliers) will have an indirect impact on our cost base. Raw materials and packaging costs may increase due to climate-related
constraints on plastics, labour and energy. We incorporated the following categories in our analysis: finished and semi-finished goods,
upstream transport, energy, API, packaging, excipients, and intermediates.
Our diverse global presence (North America, Europe, MENA) sees varying degrees of sustainability advancement in our manufacturing
countries, which necessitates constant monitoring and agile adaptation to evolving market conditions. It is anticipated that European
operations face a higher risk from carbon pricing due to the expansion of the EU Emissions Trading System framework, however other
regions such as China and MENA may also become exposed.
In the short term, increasing carbon prices do not exceed Hikma’s materiality threshold in the context of climate-related risk under all
scenarios analysed. In the medium and long-term, while the potential financial impact from carbon pricing does exceed the threshold under
the Low Carbon world – Orderly transition scenario, aſter the consideration of velocity and likelihood is applied through our Enterprise Risk
Management process, this risk is not considered material. This assessment reflects both the likelihood of the Low Carbon Orderly transition
scenario, which is deemed to be low, as well as the medium to longer-term horizon which allows Hikma significant time to implement
measures to address the risk should it materialise.
How are we managing this risk?
We routinely look at ways to manage our procurement costs and offset price increases. Our sustainable procurement programme aims to
better understand the carbon impact of purchased goods and services. As a key mitigation strategy, we engage with key material suppliers
to understand their carbon reduction objectives and the activities they are undertaking to move to renewable energy and increase energy
efficiency in their operations. Through supplier engagement, we expect to be able to partially mitigate the impact of carbon cost pass-
through in the future. In addition, our expansion of renewable electricity opportunities across our facilities globally also supports the
mitigate of carbon pricing risk longer term by reducing emissions associated with electricity consumption. In our CSA, we calculated
different potential mitigation scenarios, where the impact of carbon pricing would be constrained. While current exposure is low, it
is expected that carbon costs will increase over the coming decade as more countries establish carbon prices. We continue to
monitor developments.
What is our level of resilience to this risk?
We consider our level of resilience to the risk of carbon pricing over the short, medium and long term to be high. This is based on robust
governance structure that includes Executive-level leadership in environmental sustainability and Board-level responsibility of the issue.
Moreover, we have in place Group-wide targets and teams at the site level to identify and capitalise on relevant opportunities that emerge.
TCFD disclosure
continued
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Financial impact – range across scenarios
2030: Short term
2040: Medium term
2050: Long term
Climate scenario narratives used
2. Transition risks
Impact of energy pricing
Reflected as potential increase in
procurement costs in assessed
categories due to carbon fee, if
unmitigated (not cumulative, annual)
$3m – $12m
$7m – $19m
$14m – $25m
Low Carbon world – Orderly transition
Low Carbon world – Disorderly transition
High Carbon world
How did we calculate the potential financial impact of energy pricing?
We used SE Advisory Services’ Carbon and Energy Pricing Tool, which is informed by price projections from the EnerData EnerFuture database.
Cost exposure is calculated based on projected energy prices, combined with Hikma’s projected consumption of electricity and natural gas.
How would this risk affect operations and financial planning?
It is not certain that Hikma will face increasing energy costs over time, as governments have not pledged to implement policies directly
intended to increase the cost of electricity and natural gas. However, limiting factors such as increasing energy demand because of
population growth, technology and renewable energy investment, in combination with interrupted supply because of natural disasters,
conflicts and limited metals may increase energy pricing in our value chain. The financial impact relates to the potential change in Hikma’s
energy cost from a 2022 baseline, reflecting an increase in energy cost for electricity and natural gas at our manufacturing sites and offices.
In both Low Carbon world scenarios, electricity prices rise through 2030 but tend to fall sharply aſterwards, counterbalancing the impact
of increased consumption. To further improve the modelling, transition to lower carbon energies should be included, as well as increased
on-site generation capacity, which would reduce consumption and cost exposure.
How are we managing this risk?
Hikma is continuously evaluating opportunities to transition to renewable energy in each of our three regions (North America, Europe,
MENA). To date, we have onsite solar capacity in Jordan, Kingdom of Saudi Arabia (KSA), Morocco and Portugal; and are considering further
solar installations in Jordan and Cherry Hill, US. Opportunities differ in potential, depending on the maturity of the markets that we operate
in and the required financial investments. Where price increases might occur, Hikma may choose to accelerate site and country-specific
adjustments to substitute natural gas for electricity and vice-versa, based on the relative price of available energy sources. Future modelling
should account for this possibility.
What is our level of resilience to this risk?
We consider our level of resilience to the risk of energy pricing over the short, medium and long term to be high. This is based on our robust
governance structure that includes Executive-level leadership in environmental sustainability and Board-level responsibility of the issue.
Moreover, we have in place Group-wide targets and teams at the site level to identify and capitalise on relevant opportunities that emerge.
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Financial impact – range across scenarios
2030: Short term
2050: Long term
Climate scenario narratives used
3. Physical risks
Increased frequency of extreme
weather events, in particular the
impact of severe floods and storms
Reflected as potential event cost,
including inventory loss & operational
disruption caused by extreme weather
event (not cumulative, one-off events
or annual)
No impact
anticipated
$9 – 65m
– one-off
(storms)
$1 – 3.4m –
annual (storms)
$14m
– one-off
(floods)
Low Carbon world – Disorderly transition
High Carbon world
How did we calculate the potential financial impact of storms?
To calculate the potential financial impact of severe storms, we used data from the ThinkHazard database, the National Hurricane Centre
and the National Oceanic and Atmospheric Administration portal to determine climate-related risk exposure baselines at Hikma’s key
operational sites (identified either by sales or climate risk exposure). A financial impact matrix was developed with degrees of asset and
inventory loss or damage, and the length of operational shutdown was assumed based on the qualitative and quantitative narrative for each
storm category in the Saffir-Simpson Hurricane Wind Scale. The one-off financial impact figures for storms represents the aggregate impact
of potential storm events across all key operational site assessed, where the upper limit represents the total combined impact of the worst
possible storm event occurring at each of Hikma’s key operational sites. The financial impact of storms was also calculated on an annual
basis through to 2050, which provides a much lower impact value when compared to the one-off event analysis.
How did we calculate the potential financial impact of floods?
Hikma sites and key supplier sites were screened for both pluvial and coastal flood risk using the Aqueduct Flood Hazard Maps. In addition,
a 15 km radius around Hikma sites was screened for indirect pluvial flooding risk. Financial modelling was conducted using operational
disruption and loss from inundation at the facility. The potential financial impact refers to a one-off event with the most material impacts
describing a 1/1000 flood event at Hikma’s vulnerable sites. The impacts of such an event are largely consistent across all climate scenarios
analysed and fall below Hikma’s materiality threshold.
How would this risk affect operations and financial planning?
Extreme weather events impacting our facilities might cause interrupted manufacturing or supply of key resources. They may impact
national infrastructure and could lead to power outages, restrictions on access for the supply chain and workforce leading to downtime, lost
sales, fines and ultimately reputational damage. Extreme weather events may also impact critical suppliers leading to downtime, lost sales,
fines, and reputational damage. While no sites were identified with direct exposure to inundation risk, more research is needed to assess the
indirect inundation risk.
We conducted an analysis of the financial impact of an extreme storm impacting a site in the US. Through this analysis, we concluded that
the potential financial implications of physical risks under the worst-case scenario High Carbon world (for extreme weather events) are
anticipated to remain minimal through at least 2030. In the longer term, out to 2050, there is increased risk from extreme weather events
particularly in a High Carbon scenario. The potential financial impacts for such one-off events do exceed the materiality threshold for Hikma
when potential impact at all vulnerable sites is combined. However, aſter velocity (timescale) and likelihood of such events are considered
through our Enterprise Risk Management process, this risk does not meet our materiality threshold. Nonetheless we will continue to
monitor these risks and actively introduce mitigation measure as required to minimise potential financial impacts due to extreme weather as
much as possible.
How are we managing this risk?
With the insights from our modelling and understanding that these risks are not significant to our sites at this stage, we will continue to
engage with our operational facilities teams in the highest risk regions to ensure our business continuity and recovery processes are fit
for purpose.
What is our level of resilience to this risk?
The findings of our long-term viability analysis for extreme weather indicates that our broad geographical footprint provides us with a robust
level of resilience for extreme weather events in one location.
TCFD disclosure
continued
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Financial impact – range across scenarios
2030: Short term
2050: Long term
Climate scenario narratives used
4. Physical risks
Impact of water stress
Reflecting both potential change
to total water cost and loss from
production downtime (not cumulative,
annual)
$1.2m – $1.3m
$3.6m – $5.5m
Low Carbon world – Disorderly transition
Low Carbon world – Orderly transition
High Carbon world
How did we calculate the potential financial impact of water stress?
Water stress is the ratio of total water withdrawals against available renewable surface and groundwater supplies. Increased water stress is
a risk when reduced water availability impacts Hikma’s operational requirements. This risk was quantified by modelling the potential future
cost of water and potential EBIT loss due to production downtime because of water rationing. Total future water costs in our CSA consist
of municipal water supply costs and water tanker costs (including fuel price projections). We assumed that the cost of municipal and tanker
water change proportionally to water stress and a production site’s water consumption will increase proportionally to the growth rate.
At the same time, the number of days with a lack of access to water supply increases proportionally to the degree of water stress and the
site’s water storage mitigation. All total costs are based off future water consumption projected using the Hikma production growth rate.
How would this risk affect operations and financial planning?
Given that water is used for cleaning in our manufacturing processes, we consider water stress a risk. Water stress is likely to increase in
the future due to increases in demands for water from growing populations and industry and from a decrease in fresh water supply due to
climate change. Shortage and potential rationing of water could lead to disrupted operations and financially impact Hikma both through
increased cost of water supply and from loss of EBIT from production downtime. Only direct and tangible financial impacts have been
assessed in the 2023 and 2024 CSAs. Other consequences such as impacts on the workforce, increased political unrest or conflict, and
impacts to third parties have not been assessed, but Hikma acknowledges them. Our CSA initially focused on four countries (Jordan, Saudi
Arabia, Algeria and Egypt) in 2023, and expanded its focus to include Columbus (OH, USA), Morocco, Portugal and Tunisia. This ensured
that all countries that we determined as water stressed are included in our analysis (Algeria, Egypt, Jordan, Morocco, Saudi Arabia and
Tunisia). The analyses show that Hikma faces potential water stress in both baseline and future projection scenarios, resulting in increased
water costs and potential loss of EBIT due to production downtime. At this stage, impact figures are not currently material and are partially
mitigated by storage capacity.
How are we managing this risk?
To mitigate the risk of water shortage, we hold onsite storage capacity and have multiple water supply options at many sites. Other
mitigation actions include implementing water reduction and saving initiatives on site. Our executive remuneration and both short-term
and long-term incentive goals support good water management at all Hikma’s sites in MENA (where water stress is most apparent) by
establishing water management systems, processes and targets, and implementing opportunities for efficient water use. More information
on metrics linked to Executive Remuneration can be found at .
What is our level of resilience to this risk?
We consider our organisation to have a high level of resilience on this issue due to our robust governance of environmental sustainability,
our management of water-related issues at the global, regional and site levels and our focus on water-related goals and targets to drive more
efficient consumption in water-scarce regions.
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Corporate governance
Financial impact – range across scenarios
2030: Short term
2040: Medium term
2050: Long term
Climate scenario narratives used
5. Climate-related opportunity
Impact of pursuing renewable energy
(RE) solutions
Reflected as the potential financial
benefit for Hikma to generate
its electricity through onsite RE
generation and RE-based Power
Purchasing Agreements (PPAs),
(cumulative 2030–2050, not annual)
$85m – $109m
$176m – $213m
$244m – $267m
Low Carbon world – Disorderly transition
Low Carbon world – Orderly transition
High Carbon world
How did we calculate the potential financial impact of pursuing RE solutions?
The analysis focused on answering the question: ‘What would be the financial benefit for Hikma to pursue RE solutions through onsite
electricity generation, as opposed to continuing to purchase electricity from the grid?’ To answer this question, we compared the cost of
onsite RE generation with the projected cost of electricity under different scenarios. We conducted a comparative analysis using scenario-
specific energy consumption and cost data from previous carbon and energy pricing analyses for 24 sites, including only sites with over
one GWh of annual consumption. These figures were compared with a technology-specific Levelised Cost of Electricity (LCOE)
1
for
developing solar and wind (onshore and offshore) capacity across the countries of the 24 prioritised sites. The difference indicates the
potential cost savings in three scenarios across short-, medium- and long-term. The figures represent estimates based on desktop research
that utilised various assumptions to generate estimated savings over the relevant time horizons.
How would this opportunity affect operations and financial planning?
As most of our energy consumption is sourced from electricity, our previous analyses on carbon and energy pricing shows that the
development of onsite RE capacity is an opportunity. Of this capacity, onsite solar generation has the largest savings potential. To date,
we have onsite solar capacity in Jordan, KSA and Portugal; and are considering further solar installations in Jordan and Cherry Hill, US.
How are we managing this opportunity?
In 2024, we expanded solar generation in our Salt facility which also provides our MENA Head Office in Amman with green electricity through
wheeling
2
. We also installed solar generation in the Kingdom of Saudi Arabia (KSA) and Morocco. For more details on the actions we have taken
and are taking to increase renewable energy consumption and generation, please see the ‘Protecting the Environment’ section on page 58.
Resilience of our strategy
The results of our CSA show that climate change is not expected to have a material impact on the Group’s strategy or financial viability for
the time horizon to 2030. Beyond 2030, the upper bound of financial impact from carbon pricing and extreme weather events do exceed
the threshold for financial materiality in the long-term under specific scenarios. However, once the timescale over which these risks could
materialise (their velocity), as well as their likelihood (for example a 1 in 1000-year flood across all vulnerable sites) is considered, their
assessed materiality is significantly reduced and falls below our threshold. Nonetheless, we continue to implement measures which
support the mitigation of these risks including supplier engagement to reduce carbon cost pass-through of carbon pricing, as well as
ensuring our business continuity and recovery processes are fit for purpose in regions exposed to extreme weather events. As such,
we consider our current level of resilience to all climate-related risks analysed to be high over the short, medium and long term. We will
continue to monitor all relevant climate risks, and update materiality assessments to account for changes to impact, likelihood or velocity,
ensuring mitigation measures are appropriate to ensure our long-term resilience to climate-related risks.
The outcomes from our Double Materiality Assessment (DMA) that was completed in 2025 (see page 42) evaluated shorter time horizons
compared to the CSA that looked at longer time horizons. As such, our assessment of the impact of climate change from our CSA work
aligns with the DMA in the short-term, as climate change was found not to be financially materiality for the Company through to 2030.
However, water management was determined to be impact and financially material under the DMA, whereas the financial impact of water
stress was not found to be material through the CSA. This is due to the DMA also considering the value chain and reputational
considerations of water stress in local communities, while the CSA focused solely on a specific consideration of incremental water costs in
MENA due to water rationing resulting from water stress. The results of both analyses support Hikma’s ongoing assessment of risks and
therefore are key to ensuring the long-term resilience of our strategy.
Our CSA, longer-term viability statement and impairment tests are aligned through common scenario inputs. We will continue to
strengthen our monitoring metrics and understand where we need to improve our mitigation controls. Our model inputs in the CSA do not
include mitigating actions on the part of Hikma, our suppliers, governments, or others, and cover time horizons well beyond our current
business planning. We recognise that climate-related risks and opportunities will continue to develop over a significantly longer period and
believe that we will be able to adapt our strategy and respond appropriately to emerging climate-related risks and opportunities that could
have a material impact on the Group. We recognise that even with measures in place for mitigation and adaption, climate-related risks
cannot be fully mitigated, and some residual risk will remain. However, we will continue to identify and mitigate our material risks as far
as possible and will build clear action plans and ownership to address any gaps and ensure our long-term resilience.
1.
The LCOE is the discounted lifetime cost of building and operating a generation asset, expressed as a cost per unit of electricity generated (£/MWh). It covers all relevant costs faced by
the generator, including predevelopment, capital, operating, fuel, and financing costs. This is sometimes called a life-cycle cost, which emphasises the ‘cradle to grave’ aspect of the
definition – Source: UK Government Department for Energy Security and Net Zero; https://assets.publishing.service.gov.uk/media/6556027d046ed400148b99fe/electricity-generation-
costs-2023.pdf
2.
Wheeling refers to the transportation of energy from a generation site to a user through the existing municipal grid
TCFD disclosure
continued
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Metrics and targets
As we continue to grow, we remain dedicated to minimising our environmental footprint. We are actively measuring and managing our energy
and water consumption and are regularly reviewing opportunities to improve efficiency. We acknowledge the environmental impact of
manufacturing and delivering medicines and are committed to the efficient and responsible management of energy, water, and waste within
our organisation and throughout our value chain. To sustain our success, it is crucial that we manage resources responsibly and consider the
long-term environmental impacts in the places where we do business.
Metrics to assess climate-related risks and opportunities
We monitor our Scope 1, Scope 2 and relevant Scope 3 emissions, as well as metrics related to the consumption of energy. This data is included
in the Sustainability section (pages 60 and 62). We will continue to develop our methodology for calculating our Scope 3 emissions categories
that are relevant but not yet calculated. The development of onsite RE capacity presents an opportunity for our business and we monitor the
percentage of RE-sourced energy, both onsite and purchased. In addition, as part of the ‘Reputation’ principal risk (see page 86), we monitor
our performance against external ESG ratings.
Executive Remuneration
We have adopted carbon and water-related targets as part of management’s yearly bonus and Long-Term Incentive Plan (LTIP). More details
can be found in the Annual report remuneration section on page 118.
The table below indicates the metrics we have in place that are linked to our climate-related risks and improve our understanding of the impacts
of these risks. More details on the progress against our targets is available in the Sustainability section.
Transition risks
Targets
Relevant metrics
Impact of carbon pricing
Reduce Scope 1 and 2 GHG emissions by 25%
by 2030, using a 2020 baseline
See page 60 for more information on our
2030 target and progress achieved to date
–
Our ambition by 2026, is to introduce
further carbon reduction targets and
initiate key renewable energy projects
–
Absolute emissions Scope 1, 2
(Location-based and market-based)
–
Emissions intensity (revenue and
headcount) Scope 1, 2 (Location-based
and market-based)
–
Absolute emissions Scope 3 in category
1 (purchased goods and services) and
category 4 (upstream transportation
Impact of energy pricing
No target set
–
Absolute energy consumption
–
Energy consumption mix
–
Percentage renewable energy
generated/purchased
Physical risks
Targets
Relevant metrics
Increased frequency of
extreme weather events
No target set
–
Proportion of facilities in an area subject
to flooding or storms
–
Number of sites with business
continuity plans that cover impact
of severe weather events
Impact of water stress
Achieve good water management at Hikma’s
MENA sites.
Our 2027 target is to deliver key aspects of
the ISO 46001 Water Efficiency Management
System in the MENA region
See page 138 and 139 for more information on
our target and progress achieved to date
–
Change in m
3
water withdrawal
–
Change in m
3
water consumption in
countries with high water stress
–
Change in m
3
water discharge
–
Change in m
3
water treatment
–
Progress of water efficiency measures
–
Water consumption intensity
Water consumption metrics will be provided
in our upcoming Sustainability Report 2025.
Opportunities
Targets
Relevant metrics
Energy cost opportunity
No target set
–
Cost of standard electricity and fuels
–
Cost of renewable solutions
We are committed to continuously evaluating our environmental impacts and to implementing mitigations and capitalising on opportunities. In
2026, we will continue to enhance and refine the metrics we use to monitor risks and opportunities and expand the robustness of our analyses.
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Corporate governance
Risk management framework
82
Risk management activities
83
Case study: Strategic opportunity
84
Principal risks and uncertainties
84
Going concern and longer-term viability
89
Risk
management
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Financial statements
Corporate governance
Risk management
and compliance processes. The approach
enables us to fulfil our obligations and
provides assurance that our activities
are appropriately controlled.
Risk appetite
The Board determines the nature and extent
of the principal risks it is willing to take and
communicates this through the Group
risk appetite.
The risk appetite sets out how management
is expected to manage risk, including clear
limits and tolerances on risk exposure for
each of the principal risks. It forms the
foundation of the ERM framework and guides
management decision-making across the
Group. The risk appetite is reviewed twice
a year at Board level and is monitored by
management on an ongoing basis.
Risk governance
The Board has ultimate responsibility for
the Group’s approach to risk management
and internal control. The Audit Committee
oversees risk management and internal
control activities with delegated authority
from the Board.
The Audit Committee reviews the principal
and material risks facing the Group,
considering different sources of assurance,
including executive management, internal
audit, and external audit. The Chair of the
Audit Committee is a standing member of
the Compliance, Responsibility and Ethics
Committee (CREC) to ensure connection
Risk management
framework
Risk context
Our purpose is to put better health within
reach, every day for healthcare professionals
and their patients. We bring patients across
North America, MENA and Europe a broad
range of generic, specialty and branded
pharmaceutical products.
The future is uncertain and carries risks for
our business. These risks may be threats or
opportunities related to our strategy and
delivery of our goals, our activities and
processes, the expectations of our
stakeholders, or our key relationships
and dependencies.
Find out more about the internal and external
context for risk management for the Group
in the ‘Our strategy’ (pages 6–7),
‘Our business model’ (pages 10–11),
‘Our markets’ (pages 18–19) and ‘Our
stakeholders’ (pages 22–27) sections of
this report.
Risk strategy
Effective management of risk is fundamental
for the long-term success of the Group.
We operate an Enterprise Risk Management
(ERM) framework to ensure that we are
comprehensive and structured in our
approach. The framework enables a thorough
view of our risk exposure to be developed,
which informs our decision-making and
improves our strategic, tactical, operational
between the Board Committees with primary
risk oversight responsibilities.
1
Internal audit provides independent
assurance of the Group’s internal control
environment. For more details on our internal
audit approach see page 115.
The Group Risk Management function
enables and drives effective risk
management practices, guides global risk
owners in assessing and reporting their risks,
coordinates emerging risk assessments, and
establishes connections and partnerships
across the organisation to promote and
develop a responsible risk culture.
Compliance and Internal Control and
Assurance functions with professional
expertise in managing risk and internal
control in specialist areas are in place
across the organisation.
The CEO and Executive Committee have
direct ownership of risk management for
the Group. Risk management accountability
is fully embedded within their executive
responsibilities.
As part of the risk governance framework,
Executive Committee and Leadership
Council members, and other senior
executives are assigned responsibility for
specific principal risks. Together, they
coordinate risk management activities across
the organisation to manage risk exposure
in line with the risk appetite.
In 2025, we aligned risk assessments more closely
with business objectives to better manage threats
and take advantage of opportunities.
Risk management and internal control across the organisation
Complementary management units perform and provide assurance over risk management and internal control through standards,
accountability and oversight. Independent and external assessments are additional sources of information for management.
Compliance and
internal control
Corporate Compliance
Quality Compliance
Group Risk Office
Internal controls
and assurance
Other compliance teams
Front-line
management
Operational activity
Management reviews
Executive
accountability
Executive Committee
Global risk owners
External advisers
Independent
assurance
Internal audit
External assessments
External audit
Board
oversight
Board of Directors
Audit Committee
Compliance,
Responsibility
and Ethics Committee
1.
Full committee terms of reference are available on
www.hikma.com
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Risk management
activities
Risk management activities occur at all levels
of the organisation. The ERM framework
provides structure for these activities to
ensure consistency of approach, consolidation,
alignment to the risk appetite and monitoring
of our risk exposure across the Group.
The Group Risk Management function
coordinates regular risk assessments to
review management of risks we already know
about, and to identify, analyse and evaluate
new and emerging risks. These assessments
are consolidated through the Group Risk
Management function and reported to
the Executive Committee by the global
risk owners.
Compliance and internal control functions,
and internal audit, also conduct regular
formalised risk assessments in relation
to their mandates.
Summarised reports and key outcomes
of risk assessments are reviewed by
management teams, the Audit
Committee and Board.
In addition to these core reporting processes,
various other risk management activities
occurred during the year.
Risk management in practice
Our ability to effectively manage risk enables
delivery of our objectives. To ensure we are
action-oriented in managing threats and
opportunities we categorise our risks
considering significance of exposure and
the opportunity for management action.
An example of risk management in practice
is seen in the case study on the next page.
Strategic risks
Group-level strategic risk assessments are
conducted by the Executive Committee
and Board of Directors. A formal review is
conducted on an annual basis to consider
threats and opportunities related to our
strategy from internal and external
perspectives and over various time horizons.
Emerging risks
Emerging risks are those that are newly
identified and have the potential to become
significant risks for the Group, those that
may already be well known but are rapidly
changing, or those that are developing over a
longer term that may have significant impact
on our ability to achieve our objectives.
Oſten driven by forces outside our control,
emerging risks may be mitigated by existing
control frameworks but are assessed to
determine if any aspects fall outside current
processes or if the controls in place may
become inadequate as the risk develops.
Our approach involves establishing
cross-functional teams to assess the threats
and opportunities, recognising these may
develop over an extended timeframe. The
risk assessment methods deployed vary and
may involve engaging with external experts,
scenario modelling, engagement with
existing risk mitigation programmes, and
development of new risk mitigation and
control strategies that will be sustainable
over the longer term.
We scan for emerging risks in a wide array
of domains, including economics and
geopolitics, social and demographic,
technology, legal and regulatory, environment
and sustainability, global and local workforce,
and business and competitive environment.
We focus our emerging risk assessments and
monitoring according to likelihood, impact
and velocity.
Examples of emerging risks that are most
closely monitored include geopolitical
instability, development of artificial
intelligence, uncertainty related to global
trade policies, evolving regulatory
requirements, and physical and transitional
climate change-related risks and
opportunities, see TCFD section on pages
66–79 for more details.
Internal control activities
In 2025, we revised our internal control
framework in preparation for the
implementation of the UK Corporate
Governance Code (the Code) Provision
29 requirements for a declaration of
effectiveness of the material controls at
31 December 2026.
Overseen by the Audit Committee the
Internal Controls and Assurance function
advanced the Group’s programme of controls
to manage its material risks. Control
frameworks, standard operating procedures
and related policies were formalised and
embedded across the organisation.
The Internal Control and Assurance team
reinforced the rigour of documentation
standards expected when operating
these controls.
Other compliance and internal control
functions across the Group develop and
manage internal control systems, frameworks
and processes for their areas of focus as part
of risk mitigation strategies, to meet internal
and external expectations, and to ensure
compliance with regulatory requirements.
Priorities for 2026
In 2026 we will continue to develop
connections and partnerships between
compliance and internal control functions,
and external parties to provide greater
assurance for the Group.
In line with Provision 29 of the Code, a
risk-based testing programme is being
launched in 2026 to provide rolling assurance
over the effectiveness of material controls.
This programme will consolidate assurance
outcomes and will support the Board’s annual
review and declaration on the effectiveness
of Hikma’s risk management and internal
control framework.
We will continue to develop sustainability
and climate-related risk assessments, drive
integration with business planning processes,
and ensure alignment for existing and
upcoming regulations, see the ‘Sustainability
reporting readiness’ section on page 45
for more details.
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Financial statements
Corporate governance
Risk management
continued
Strategic opportunity
Targeted investment across the
manufacturing and supply network
represents a strategic opportunity
to strengthen access to key markets
with localisation requirements, expand
capacity for both our own drug
manufacturing and CMO partnerships,
improve access to medicines, and
increase supply-chain resilience.
The strength of our balance sheet enables
us to deploy capital in these infrastructure
investments, aligned to our capital
allocation framework, supporting
long-term growth and competitiveness.
Over the period 2021–2025 the Group
invested more than $800m through
capital expenditure.
The Group’s overall efficiency in converting
capital into returns is reflected in a 5-year
core ROIC of 16.5%.
Strategic assessment
Strategic operational infrastructure
investment opportunities are assessed
through an iterative process involving the
Board, Executive Committee, and
cross-functional teams. This includes
collaboration across global engineering,
operations, CMO partnerships, and
commercial to ensure alignment between
strategic objectives, operational feasibility,
and market needs.
Progress
Progress has been delivered over multiple
planning and investment cycles, resulting
in a phased portfolio of operational
investments. Initiatives are progressing
at different stages of maturity across
MENA (Tunisia, Algeria, KSA), Europe
(Portugal, Italy), and the United States
(Bedford, Columbus), supporting both
near-term capacity needs and
longer-term network resilience.
Vision
Through this strategy and its execution, we
are building a manufacturing network that
is more resilient to disruption and provides
us with opportunities. Balancing local
production with scalable capacity enables
us to adapt to changing demand, support
supply continuity during shortages, and
be agile to take advantage of commercial
opportunities. Ongoing investment and
optimisation strengthen resilience,
meet market access requirements, and
support sustained access to medicines
across regions.
Managing strategic risk with investment
in operational infrastructure
Principal risks and uncertainties
The Group faces risks from a range of sources
that could have a material impact on our
financial commitments and ability
to trade in the future.
The Board performs robust assessments of
strategic, operating and emerging risks for
the Group, considering our risk context,
and input from executive management.
In 2025, we mitigated risks related to internal
changes with CEO and senior leadership
transitions, and restructuring of the
R&D function.
We managed external macroeconomic and
geopolitical volatility by diversifying our
direct materials sourcing, and managing
our inventory levels to mitigate cost and
lead time pressures.
The Board determined that the principal risks
facing the Group have not materially changed
over the year and that there are no new
principal risks to be added.
During the year, the Group refined certain
principal risk names and descriptions to
enhance clarity and alignment with
underlying risk drivers. These refinements
do not represent changes to the Group’s risk
profile. The principal risk ‘Market dynamics
and commercial environment’ was formerly
described as ‘Industry dynamics’, and the
principal risk ‘Crisis and business disruption’
was formerly described as ‘Crisis and
continuity management’.
The set of principal risks should not be
considered as an exhaustive list of all the
risks the Group faces. Certain risk factors are
outside the control of management.
The Board recognises that the principal risks
are dynamic and that management of these
risks must be continuous as the risk
environment changes.
The Board defines qualitative and
quantitative conditions related to each
principal risk which establishes the risk
appetite, and alignment to these conditions
are monitored throughout the year.
Through this process the Board is satisfied
that the principal risks are being managed
appropriately and consistently within
the Group’s target risk appetite.
Effective management of these risks is
directly linked to the performance of our
strategic KPIs (see pages 16–17) and the
delivery of the strategic priorities outlined on
pages 6–7.
The principal risks are set out below with
examples of management actions that help
to control the risk; the actions described do
not include all actions taken by management.
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Market dynamics and commercial environment
Risk description
Management actions
Changes in competitive dynamics,
pricing and reimbursement
environments, regulatory and policy
interventions, macroeconomic and
geopolitical conditions, societal
expectations, and shiſts within the
pharmaceutical value chain may
adversely affect the commercial
viability of the Group’s markets and
business models. The Group’s
ability to execute and adapt its
commercial strategy in response
to these changes may also
impact performance.
–
Rebranded Generics segment to Hikma Rx to reflect its focus on providing differentiated and
complex (Rx) medicines
–
Continued to prepare for significant new long-term contract manufacturing agreement
in Hikma Rx business
–
Developed and launched key differentiated injectable product (Tyzavan®)
–
Continued to develop partnerships and secure contract manufacturing business, see pages 14
and 20
–
Accelerated growth in Europe in new and established markets by addressing shortage situations
to increase diversification of segment
–
Progressed validation phases of new manufacturing plants in Morocco, Algeria and Tunisia to
enhance production capacity
–
Initiated construction phase of new facility in KSA
–
Diversifying Branded product offering to address demand related to chronic diseases
Product pipeline
Risk description
Management actions
The selection, development,
registration, and successful
commercialisation of new products
aligned with market needs,
regulatory requirements, and the
Group’s strategy are subject to
scientific, regulatory, commercial,
and execution uncertainties that
may affect future growth and
competitive performance.
–
Transformed R&D into a global function based on technology platform, see page 49 for
further details
–
Globalised and standardised product selection process to improve allocation of capital
–
Embedded centralised processes for nitrosamines, extractables and leachables testing
and remediation
–
Focus in Injectables on growth areas of specialty (e.g. Ready-to-use / ready-to-administer),
peptides/polypeptides and oligonucleotides, and 2-phase systems (e.g. suspensions,
emulsions, long-acting injectables)
–
Developed capabilities internally and through partnerships to advance respiratory , nasal,
semi-solid and liquids pipeline execution
–
Continued to develop pipeline portfolio serving MENA market by introducing more diabetes,
oncology, GI and CNS products
People
Risk description
Management actions
The ability to attract, develop, retain,
and effectively deploy talent,
leadership, organisational
structures, and governance
processes is critical to business
performance, strategic execution,
and the long-term success of
the Group.
–
Managed transition of senior leaders and executed succession plans across the different
regions and functions
–
Supported in the reorganisation of R&D to become a global function, enhancing collaboration
and achieving synergies across the Group
–
Developed a Career Management framework for core functions that provides clear pathways
for professional growth, outlining required qualifications to empower colleagues to own
their development
–
Launched and expanded a mentoring programme to enable continuous and proactive efforts
to foster a growing mentoring culture within Hikma, and facilitate knowledge exchange between
mentors and mentees, see page 56
–
Optimised US and Europe operating models to strengthen efficiency and accountability
between central functions and local sites
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Financial statements
Corporate governance
Reputation
Risk description
Management actions
The reputation of the Group
depends on building and
maintaining trusted relationships
with our stakeholders. Adverse
events, changing expectations, or
misalignment between stakeholder
perceptions and business activities
may affect relationships, regulatory
confidence, and long-term value.
–
Communicated on a regular basis with investors and analysts with over 250 engagements,
through investor relations calls, meet with management events, including site visit to
manufacturing facility in Columbus, Ohio, and at conferences
–
Continued to communicate our progress against our business strategy and acting responsibility
framework, leveraging our digital communication channels to engage external and internal
stakeholders
–
Improved our MSCI ESG rating and maintained our scores across other indices
–
Continued to develop sustainability reporting capabilities to meet upcoming
regulatory requirements
–
Hosted key US government representatives at our Columbus, Ohio site to highlight the
investment being made by Hikma in domestic manufacturing
–
Provided Executive Committee and Board members with third-party perception studies
to gauge investor sentiment
Ethics and compliance
Risk description
Management actions
Maintaining a culture underpinned
by ethical decision-making, with
appropriate internal controls to
ensure that staff and third parties
comply with our Code of Conduct,
associated policies and procedures,
as well as all applicable legislation,
is fundamental to the Group.
–
Rolled out updated conflict of interest process
–
Implemented enhanced compliance programme for engagement with healthcare professionals
(HCPs) and healthcare institutions (HCIs)
–
Further enhanced third-party due diligence systems and processes
–
Continued to develop modern slavery and human rights controls in partnership with
Procurement, Legal and HR functions
–
Strengthened the speak up line, grievance mechanisms, and investigation policies and
procedures in line with evolving regulatory requirements and whistleblowing acts
Information and cyber security, technology and infrastructure
Risk description
Management actions
Ensuring the integrity,
confidentiality, availability and
resilience of data, securing
information stored and/or processed
internally or externally from cyber
and non-cyber threats, while
maintaining and developing
technology systems that enable
business processes and
infrastructure that supports the
organisation effectively is critical to
the secure and effective operation
of the Group.
–
Continued to monitor opportunities and threats related to artificial intelligence (AI) and machine
learning (ML) systems through AI Advisory Board
–
Developed additional cyber resilience measures for alternative communications in the event
of system disruption
–
Completed external assessment of information security maturity aligned to the industry-
standard National Institute of Standards and Technology (NIST) cyber security framework and
the Capability Maturity Model Integration (CMMI) maturity model, improving maturity score by
18% from prior assessment
–
Continued to enhance cyber security detection and response capabilities
–
Further strengthened protection of operating technology environments
–
Ran externally facilitated cyber exercise with the Leadership Council and senior management
–
Continued progress with IT Continuity assessments and disaster recovery preparedness
Risk management
continued
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Legal, regulatory and intellectual property
Risk description
Management actions
The requirements of, and changes
in, laws, regulations, enforcement
priorities, litigation exposures,
sanctions regimes, contractual
obligations, and intellectual property
frameworks may affect the Group’s
operational flexibility, financial
performance, strategic initiatives,
shareholder value, business
integrity, and reputation.
–
Concluded settlement of the vast majority of opioid-related lawsuits and continued to defend
remaining lawsuits in North America, see page 191
–
Finalised settlements that resolved all outstanding claims and lawsuits related to an alleged
anticompetitive agreement with Jazz Pharmaceuticals related to Hikma’s authorized generic
sodium oxybate product
–
Monitored and managed litigations, disputes, and investigations related to our global
operations, including those that are material to the Group, see page 207
–
Continuous monitoring and assessment of developments in global legal and regulatory
landscape and potential impacts on the Group
–
Continued to secure, maintain, and enforce patents and other intellectual property where
appropriate to protect the Group’s proprietary assets
–
Strengthened corporate governance practices to ensure transparency, accountability, and
ethical conduct within the organisation
–
Provided legal support and oversight for successful product acquisitions and other strategic
transactions, ensuring they are completed smoothly and in compliance with all
legal requirements
–
Launched and delivered regular colleague training on legal and compliance topics, including
economic trade sanctions and modern slavery and human trafficking, to raise awareness,
ensure regulatory compliance, and promote ethical and responsible conduct across
the organization
Inorganic growth
Risk description
Management actions
The identification, valuation,
and execution of acquisitions,
divestments, licensing, or other
business development activities
are subject to strategic, financial,
operational, and integration
uncertainties that may affect
long-term value creation.
–
Closed the acquisition of the rights to a portfolio of Takeda brands for the MENA region and
began implementing the integration plan
–
Identified a range of business development and investment opportunities to achieve
Hikma growth strategy
–
Extensive due diligence of each opportunity with external support for risk assessment,
valuation, and execution of transactions
–
Extensive Board engagement to review opportunities proposed by the Executive Committee
to ensure strategic alignment
–
Post-acquisition performance (financial and non-financial) monitored closely to ensure
integration and delivery on business plan
–
Post-transaction reviews highlighted opportunities to improve effectiveness of processes
–
Continue to grow our pipeline through business development (BD) and enhance the
effectiveness of BD teams by adding additional resources
–
Global product selection integrates in-house and external development for
pipeline opportunities
–
Announced expanded partnership with Celltrion in MENA for a further six biosimilars
Active pharmaceutical ingredient (API) and third-party risk management
Risk description
Management actions
Maintaining the availability of supply,
quality and competitiveness of API
purchases and ensuring effective
understanding and control of
third-party risks are fundamental
to the Group.
–
Reviewed our supply chains and sourcing options based on geopolitical constraints and
renegotiated with our suppliers in response to US tariffs to minimise impact on patients
–
Increased % of API covered by alternate sources
–
Improved our business intelligence to identify opportunities for cost reductions
–
Continued to increase our numbers of suppliers under strategic partnership
–
Continued to enhance third-party management system with automation of Supplier Code of
Conduct acknowledgement, ongoing third-party risk monitoring, and introduction of IQ+Vitals,
a tool to enhance our ability to perform sustainability assessments with nearly 75% of our
annual procurement spend now covered
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Corporate governance
Crisis and business disruption
Risk description
Management actions
The Group may be affected by
sudden disruptions and gradual
change, including natural
catastrophe, economic turmoil,
cyber event, operational issue,
conflict, security, health and safety,
pandemic, political crisis, and
regulatory intervention. Effectively
developing, maintaining and
adapting capabilities and processes
to anticipate, prepare for, respond
and adapt to such events, is vital to
ensure resilience of the organisation.
–
Managed external macroeconomic and geopolitical volatility by diversifying our direct materials
sourcing, and inventory levels to mitigate cost and lead time pressures.
–
Tested response plans in light of events (e.g. Middle East tensions impacting logistics, Iberia
power outage, operational events) and training scenarios
–
Updated Group and local crisis management plans and guides for specific scenarios
–
Reviewed and refreshed business impact analyses and business continuity plans for all
operational facilities, incorporating assessments of climate change-related threats
–
Engaged with insurance providers to align business continuity planning with underwriter
risk analysis
–
Strengthened integration with IT Continuity and Disaster Recovery programme to increase
business resilience to technology-related disruption, including development of alternate
operating procedures programme
–
Reviewed and upgraded site emergency response arrangements and capabilities across
our facilities
Product quality and safety
Risk description
Management actions
Maintaining compliance with current
Good Practices for Manufacturing
(cGMP), Laboratory (cGLP), Clinical
(cGCP), Compounding (cGCP),
Distribution (cGDP) and
Pharmacovigilance (cGVP) by staff,
and all relevant third parties involved
in these processes is fundamental
for the Group.
–
Hikma Quality Council provides oversight and shares best practice across the Group including
regulatory intelligence
–
Drove a strong quality and safety culture across the organisation through global initiatives,
reinforced by regular communications from senior executives
–
Ensured continuous monitoring and assessment of quality and safety risks and quality critical
incidents via the Group wide Notification to Management process
–
Ongoing oversight of cGMP compliance of Hikma facilities as well as third parties supplying
finished goods, APIs, raw materials, packaging components and other GMP services
–
Maintained robust governance and quality oversight of Pharmacovigilance (PV) through cross
functional Drug Safety and PV Quality Committees including adapting to newly introduced and
enhanced regulatory requirements while sustaining a strong track record of successful routine
regulator PV inspections
–
Strategically in sourced key PV activities to build internal capability, reduce external
dependency, and ensure continuous global product safety surveillance, enabling early
detection of emerging risks or changes to the overall risk-benefit balance
–
Enhanced the global PV quality management system through expanded use of validated
systems, supported by structured, automated training curricula for PV team members,
improving standardisation, efficiency, and regulatory compliance
Financial control and reporting
Risk description
Management actions
Effectively managing income,
expenditure, assets and liabilities,
liquidity, exchange rates, tax
uncertainty, debtor and related
activities, and reporting accurately,
in a timely manner, and in
compliance with statutory
requirements and accounting
standards is fundamental to
the Group.
–
Launched the Hikma group controls programme to mitigate material risks and established
internal systems for reporting on minimum standard set of controls for finance and related
processes to enable disclosure against Provision 29 of the Code, see page 111
–
Further formalised the Fraud detection and prevention programme
–
Expanded shared service centre for core finance processes
–
Refinanced through debt market and loan agreements to maintain balance sheet strength,
see page 193
–
Successfully refinanced our $500m Eurobond, with an improved credit rating of BBB from
BBB- under Fitch Ratings and S&P Global Ratings, providing confidence to investors in Hikma’s
financial health
–
Approved the Group Capital Allocation Framework to provide a transparent framework for
shareholder returns and align capital decisions with long-term strategic goals
Risk management
continued
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Going concern and longer-term viability
In accordance with the UK Corporate Governance Code Provisions
30–31 and other regulatory disclosure requirements, going concern
and longer-term viability assessments are provided.
Assessment of position and prospects
The Group’s current and forecast financial positions are used
to assess the going concern position and longer-term viability.
The position and prospects of the Group are assessed at
Executive Committee meetings and at the end of the financial year.
The assessments consider strategic and operational updates,
principal and emerging risks, financial reporting and forecasting from
the Chief Financial Officer, and the business plan. The business plan
and forecasts are developed to reflect our current position, specific
risks and uncertainties facing the business, and known changes to
our organisation and business model.
The Executive Committee assesses the future strategic positioning
of Hikma as a company in the context of the changing business
environment. Aspects of this analysis are shown in ‘Our markets’
(see pages 18–19).
These various assessments are presented to the Audit Committee
and Board of Directors for independent scrutiny of management’s
assumptions and modelling approach. The Board also receives
regular updates on operational, strategic and financial matters
from executives.
Financial position
The financial position of the Group as at 31 December 2025 was:
–
net cash flow from operating activities in the year was $436 million
–
overall net debt was $1,387 million (1.6 times core EBITDA)
–
available borrowing capacity was $1,050 million of committed
undrawn long-term facilities (see Note 30 of the Group
consolidated financial statements on page 195). These facilities
are well-diversified across the subsidiaries of the Group and are
with a number of financial institutions
Covenants on major financial debt arrangements are suspended
while the Group retains its investment grade status from two rating
agencies. As of 31 December 2025 the Group’s investment grade
rating was affirmed by S&P and Fitch, with an upgraded rating
compared to prior years.
Future prospects
The Group’s base case forecasts take into account reasonably
possible changes in trading performance, including those that
may arise related to various inflationary effects, currency volatility,
facility renewal sensitivities, and maturities of long-term debt.
Assumptions
Financial modelling for the business plan and the going concern
and viability assessments is subject to assumptions related to:
–
launch and commercialisation of new products
–
market share and product demand rates
–
maintenance of certain product prices
–
political and social stability
–
ability to increase operational efficiency and reduce central costs
–
effective tax rate being within the current guidance range
–
ability to refinance existing debt upon maturity (for longer-
term viability)
Going concern
For the purposes of assessing the going concern position, the base
case and a forecast including severe but plausible downside risks
were analysed over a period longer than 12 months from the date
of signing the financial statements.
The analysis shows that Hikma is well-placed to manage its business
and financial risks successfully despite current uncertainties and
confirms that the going concern basis should be used in preparing
the financial statements.
The Directors reviewed and challenged management’s forecasts,
downside assumptions and mitigation strategies, and believe that the
Group is adequately placed to manage its business and financing
risks successfully.
The Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for a period
longer than 12 months from the date of signing the financial
statements and therefore continue to adopt the going concern basis
in preparing the financial statements, with no material uncertainties.
Severe but plausible downside
risk scenarios are used to test
the viability of the Group.”
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Financial statements
Corporate governance
Longer-term viability
Viability period
The longer-term viability of the Group is assessed for a period longer
than for the going concern analysis.
The Directors determined that a three-year period, ending on
31 December 2028, constitutes an appropriate period over which
to provide its viability statement.
This is the timeframe for acquisitions and business development
opportunities to become integrated into the business, and for pipeline
products to contribute as marketed products. Forecasts are more
accurate in the near term than in the long term and this limitation
also applies to our viability assessments.
Stress testing, modelling and sensitivity analysis
The Group’s strategic objectives, principal risks (PR), assessments
of longer-term emerging risks (ER), management input, real-world
examples and the financial modelling assumptions set out above
were used to develop severe but plausible risk scenarios that could
adversely impact the business.
Certain risk scenarios were not considered financially material for the
purposes of this assessment. This included a scenario involving
climate-change-related risks of disruption from extreme weather
events affecting certain Group facilities, resulting in property damage
and business interruption (see also our disclosures related to climate
change on pages 66–79).
The following scenarios were assessed as severe but plausible, with
additional realistic but extremely severe adjustments applied for
sensitivity analysis.
Longer-term viability scenarios
–
Scenario 1:
Market dynamics and commercial environment (PR):
Potential significant levels of price erosion over and above business
plan assumptions
–
Scenario 2:
Market dynamics and commercial environment (PR):
Potential significant adverse performance of strategic products
due to competitive threats
–
Scenario 3:
Product pipeline (PR): Potential extensive delays to
product launches
–
Scenario 4:
Ethics and compliance (PR): The implications of a
systemic failure of the corporate compliance programme leading
to a regulator investigation were explored, including reputational
impact, fines and legal fees, loss of sales, remediation expenses,
and additional compliance costs
–
Scenario 5:
Product quality and safety (PR): A prolonged regulator-
imposed restriction of a major US FDA-inspected manufacturing
site was modelled, factoring in loss of sales and remediation
expenses, as well as a reduction to operating costs
–
Scenario 6:
Crisis and business disruption (PR): Escalation and
development of situations of political and social instability in MENA
markets were assessed with loss of sales recognised
–
Scenario 7:
API and third-party risk management (PR): Significant
disruptions to our raw and packaging materials supply chain
were modelled
–
Scenario 8:
Information and cyber security, technology and
infrastructure (PR): Impacts of a ransomware attack affecting
endpoints and ERP systems were modelled with potential
loss of sales, general business interruption, and response
and remediation costs
–
Scenario 9
: Legal, regulatory and intellectual property (PR):
Potential for financial loss as a result of ongoing legal proceedings,
see page 207
Longer-term viability analysis
The consequences of each of these severe but plausible risk
scenarios were modelled over the forecast period and the impacts
on EBITDA, ability to meet our debt obligations, and cash flow
were determined.
A combined scenario of additional price erosion (Scenario 1),
significant adverse performance of key products (Scenario 2) and
extensive launch delays (Scenario 3), in line with the going concern
assessment assumptions, was also Combinations of these scenarios
occurring were also assessed for this exercise.
The analysis shows that although the scenarios are severe, they
do not threaten the viability of Hikma. Headroom was comfortably
maintained throughout the viability period for each of the risk
scenarios and scenario combinations.
The analysis did not rely on management actions that could be taken
in the circumstances to reduce the impact and consequences of the
risk events. Such actions, the ongoing implementation of the
Enterprise Risk Management (ERM) programme and other risk
mitigation initiatives, and investment in infrastructure and change
initiatives are anticipated to continue to enhance organisational
resilience and support longer-term viability.
The outcome of these various quantitative and qualitative
assessments leads management to believe that Hikma is resilient
to downside risk scenarios over the three-year period. This is largely as
a result of our financial position (in particular our strong balance sheet
and low levels of debt) and is supported by the fact that our business
is well-diversified through geographic spread, product diversity, and
large customer and supplier bases. Further details are provided in the
‘Our strategy’ (pages 6–7), ‘Our business model’ (pages 10–11),
and ‘Our markets’ (pages 18–19) sections of this report.
The Directors reviewed and challenged management’s longer-term
viability analysis and confirm that they have a reasonable expectation
that Hikma will be able to continue in operation and meet its liabilities
as they fall due and over the viability period.
Our assessments show
that Hikma is resilient to
downside risk scenarios.”
Risk management
continued
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Corporate governance
Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
The table below summarises our position on matters relevant to the Non-Financial Reporting Directive, in line with the requirements of sections
414CA and 414CB of the Companies Act 2006. All references made are to publicly accessible information.
Summary
Further information and policies
Our business model
–
Our diversified business model allows us to respond to the
many opportunities and risks we face, while delivering value
for our stakeholders
–
Our business model, pages 10–11
Principal risks
–
Our risk management framework is designed to ensure we
take a comprehensive view of risk. This includes financial
and non-financial risks that may impact our business
and stakeholders
–
Risk management, pages 82–83
Environmental
matters
–
We are committed to making our operations more energy
efficient and environmentally responsible
–
We continue to improve the way we monitor our impacts,
pursuing projects that reduce our environmental footprint
–
We have put in place a target to reduce our Scope 1 and 2 GHG
emissions by 25% by 2030, using a 2020 baseline
–
We are aligning our internal processes and our public disclosures
to be consistent with the Task Force on Climate-related Financial
Disclosures (TCFD) recommendations
–
We are aligned with the disclosure requirements of Climate
Related Financial Disclosures (CFD) as articulated in the
Companies Act
–
Board-level oversight of environmental sustainability
–
Environmental matters are incorporated in our risk
management framework
–
We promote environmental sustainability in our supply chain
–
Protecting the environment, pages 58–62
–
TCFD, pages 66–79
–
Supplier Code of Conduct
1
Employees
–
Our employees have always been at the heart of everything we
do. As the driving force behind Hikma’s growth and success,
our people are our most valuable asset
–
We are committed to investing in the development
of our workforce and in protecting their health and safety
–
We have 9,400 employees across North America, MENA,
Europe and ROW
–
Stakeholder engagement: employees, pages 22–27
–
Empowering our people, pages 52–56
–
Code of Conduct
1
–
Upholding ethical standards and acting with integrity,
pages 63–64
–
Group Environmental, Health and Safety
Policy Statement
1
–
Principal risk: People, page 85
1.
Our public policies, codes and statements are available on
www.hikma.com
Non-financial and sustainability information statement
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Summary
Further information and policies
Social matters
–
In all of our markets, we work to meet social needs locally and
improve lives. We have developed programmes in key areas
to address social challenges:
–
providing better health
–
supporting education
–
helping people in need
–
Where our activities relate to other social matters, we seek
to understand the perspective of all stakeholders, determine
our role and make clear our position based on our values
and purpose
–
Stakeholder engagement, pages 22–27
–
Advancing health and wellbeing, pages 46–51
–
Product quality and safety, page 49
–
Addressing drug shortages in the US
1
–
Animal testing position
1
–
Principal risk: Reputation, page 86
–
Access to medicines, pages 46–48
–
Tax strategy statement
1
Respect for
human rights
–
We respect and uphold the principles of the Universal
Declaration of Human Rights both within Hikma and across
our value chain
–
We object in the strongest possible terms to the use of any
of our products for the purpose of capital punishment
–
Upholding ethical standards and acting with
integrity, pages 63–64
–
Code of Conduct
1
–
Supplier Code of Conduct
1
–
Modern Slavery Act Policy Statement
1
–
Use of products in capital punishment
1
–
Principal risk: Reputation, page 86
Anti-bribery
and corruption
–
Our Compliance, Responsibility and Ethics Committee (CREC)
leads our efforts to strengthen anti-bribery and corruption
policies and manage associated risks
–
As a publicly-listed company on the London Stock Exchange, we
abide by the regulations of the UK Listing Authority. We operate
in compliance with the UK Bribery Act 2010, the Foreign Corrupt
Practices Act as well as local laws and regulations
–
Upholding ethical standards and acting with
integrity, pages 63–64
–
Code of Conduct
1
–
Supplier Code of Conduct
1
–
Speak up channels
1
–
Principal risk: Ethics and compliance, page 86
–
CREC report, pages 116–117
Non-financial KPIs
–
We monitor the position, performance and impact of Hikma
across a wide range of financial and non-financial KPIs.
Non-financial KPIs are used to measure progress towards our
strategic priorities (pages 16–17), our exposure to risks (pages
84–88), and are in place in other areas throughout the
organisation as part of Hikma’s long-term sustainable growth
strategy and our commitment to helping people and improving
the communities in which we operate
–
GHG emissions reduction target, page 58
–
Protecting the environment, pages 58–62
–
Employee engagement and enablement, page 17
–
Audit Committee report, pages 111–115
–
CREC report, pages 116–117
–
Diversity disclosures, page 99
The Strategic report was approved by the Board of Directors and signed on its behalf by:
Said Darwazah
Executive Chairman and CEO
25 February 2026
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Strategic report
Financial statements
Corporate governance
Executive Chairman’s overview
96
Corporate governance at a glance
98
Leadership
100
Corporate governance
103
Nomination and Governance
Committee report
107
Audit Committee report
111
Compliance, Responsibility and
Ethics Committee report
116
Remuneration Committee report
118
Directors’ Remuneration Policy
122
Annual report on remuneration
132
Other statutory disclosures
150
Corporate
governance
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95
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Annual Report 2025
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Strategic report
Corporate governance
Financial statements
We are committed to transparency in
corporate governance reporting and
work hard as a Board to provide strong
and stable leadership, supported by
our corporate governance framework.
Executive Chairman’s overview
Dear Shareholders
The Board has focused on providing strong
and stable leadership in 2025, navigating
changes to the Board and Executive
Committee, while not losing slight of our
strategic objectives to ensure Hikma delivers
a solid financial performance. Looking to the
future, the Board has a renewed focus on
succession planning, actions for continuous
improvement and preparations for future
reporting requirements in relation to internal
controls and the evolving landscape for
sustainability reporting.
Board and leadership changes
On 15 December 2025, we announced that
Riad Mishlawi had stepped down as CEO and
from Hikma’s Board of Directors by mutual
agreement. In order to ensure continuity in
the delivery of Hikma’s strategy, the Board
agreed that I, as Executive Chairman and
former CEO, would step in and assume all
CEO responsibilities. In addition, Khalid
Nabilsi, Hikma’s CFO of 15 years, joined
Hikma’s Board of Directors to further
strengthen the Group’s focus on delivering
its strategic plans and to take on additional
operational management responsibilities.
As at the date of this report, the Board
approved further changes to Hikma’s Board
and leadership. These changes will take
effect from 26 February 2026 and are
designed to assist me with the day to day
management of the business, and enhance
accountability and agility in relation to
strategic decision-making.
Further detail can be found on pages 5
and 107.
Succession planning and
Board composition
A key priority for the Board in 2025 was to
review Board and committee composition,
following the departure of two independent
Non-Executive Directors in 2025. John
Castellani reached nine years of service in
March 2025 and retired from the Board at the
2025 AGM on 24 April 2025. Nina Henderson
reached nine years of service in October
2025 and retired from the Board on
31 December 2025. I thank John and Nina
for their significant contributions to Hikma’s
Board over the past nine years and wish
them all the best for the future.
As disclosed in our 2024 Annual Report, the
following appointments took effect from
24 April 2025:
–
Deneen Vojta succeeded John Castellani
as Chair of the Compliance, Responsibility
and Ethics Committee (CREC)
–
Cynthia Flowers succeeded
Nina Henderson as Chair of the
Remuneration Committee
–
Laura Balan succeeded Nina
Henderson as the designated
independent Non-Executive Director
for workforce engagement
The Nomination and Governance Committee
supported the Board in this endeavour with
a detailed review of Board and committee
composition, including independence,
skills, experience, tenure and external
commitments, and approved the following
appointments, effective 1 May 2025:
–
Cynthia Flowers was appointed as a
member of the CREC
–
Victoria Hull was appointed as a member
of the Remuneration Committee
Further information is included in the
Nomination and Governance Committee
report on page 108.
Corporate governance
During 2025, we strengthened our
governance framework by conducting a
detailed review of the matters reserved to
the Board and the terms of reference for each
Board Committee. The approved changes
clarified responsibilities between committees,
ensured consistency between committee
terms of reference and the matters reserved
to the Board, and reflected recent
developments to statutory requirements and
best practice. The updated documents can
be found on our website
www.hikma.com
.
In early 2026, the Board also undertook a
review of Hikma’s Delegation of Authority
framework to strengthen our internal controls
and ensure that no one individual had
unfettered powers of decision-making in
light of the changes to our leadership team.
Inclusion and diversity
As a Board, we embrace diversity in all forms
and believe that different perspectives and
opinions enhance decision-making. Our
Board Diversity Policy sets the approach to
the diversity of Hikma’s Board and its
Committees in line with the gender and
ethnic diversity objectives set by the UK
Listing Rules, the FTSE Women Leaders
Review and the Parker Review. We are proud
to report that Hikma continues to meet all
objectives set for diversity under the Board
Diversity Policy. The Board Diversity Policy is
available on our website at
www.hikma.com
and information on Board diversity is
included on pages 99 and 151.
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This year the Board celebrated the twentieth
anniversary of the Company’s listing on
the London Stock Exchange, an important
milestone for Hikma and an opportunity
to recognise the growth and impact
we have delivered.”
We are equally committed to supporting
inclusion and diversity beyond the
boardroom. We are pleased to report an
increase in the representation of women in
senior leadership roles over the past year and
are proud of the high level of ethnic diversity
among the senior management population.
Information on our senior management and
wider workforce diversity is included on page
99 and information on our broader inclusion
initiatives is included on page 54. Further
information on the Board’s oversight of
diversity is included in the Nomination and
Governance Committee report on page 110.
Workforce engagement
Our people are core to Hikma’s growth
aspirations and delivery of our strategy.
To enhance the Board’s understanding
of our colleagues’ perspectives, Laura
Balan is our designated independent
Non-Executive Director for workforce
engagement, as defined under Provision 5
of the UK Corporate Governance Code.
Laura has undertaken an active programme
of engagement this year which has
contributed to ensuring that workforce
perspectives are considered in Board and
committee decision-making, and that the
Board, outside of our Executive Directors, is
visible among our colleagues. In 2025, the
engagement programme was organised in
conjunction with the CEO and Laura formally
reported to the Board on her observations.
As an aspect of her engagement activities,
Laura listens to the workforce’s views
on career progression, learning and
development, technology and reward.
In 2025, Non-Executive Directors visited
Hikma sites and engaged with the
workforce, including:
–
participation in the senior leaders forum
in Amman (Jordan)
–
visits to manufacturing facilities and
offices in Amman (Jordan) and Milan (Italy).
During these visits, Non-Executive
Directors were able to meet with local
management and the wider workforce,
and tour manufacturing facilities
–
a visit to our site in Sintra, Portugal for the
annual Board strategy meeting, during
which four of our independent Non-
Executive Directors took part in a
workshop with key colleagues based
in Portugal to gain insights on career
progression and development, and their
understanding and ownership of strategic
priorities. The Board also held a dinner
with local management as an opportunity
for more informal engagement
Further detail on our workforce engagement
activities and outcomes is included in our
Section 172 statement on page 22.
Stakeholder engagement
In the lead-up to the 2025 AGM, Hikma
undertook a detailed shareholder
consultation exercise to gain feedback on
the Rule 9 Waivers sought at the 2025 AGM.
The aim of the consultation process was to
explain the purpose of the Rule 9 Waivers and
address any concerns. Following feedback
from shareholders, we developed an FAQ
document which is available on our website
at
www.hikma.com
. I am pleased to report
that all resolutions put to shareholders at our
2025 AGM were passed with 90% or more
votes in favour.
In addition to the shareholder consultation
relating to the Rule 9 Waivers, the Board
undertakes significant efforts to understand
and, in taking decisions, consider the
interests and perspectives of all of our
stakeholders, including customers, suppliers,
colleagues, regulators, investors and the
communities in which we operate. Further
details, including examples of the outcomes
and actions from our stakeholder engagement
activities, are included in our Section 172
statement on pages 22 to 27. Information
on our Supplier Code of Conduct is included
on page 116.
Looking ahead
On behalf of the Board, we look forward to
building on the progress of 2025 to create
long-term sustainable growth for the benefit
of all stakeholders in 2026 and beyond.
Said Darwazah
Executive Chairman and CEO
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Corporate governance
Financial statements
Strategic report
Corporate governance at a glance
The Board delegates some of its powers to the CEO and operates
with the assistance of five committees.
The Board is responsible for establishing the Group’s purpose,
values and strategy, and ensuring these are aligned with its culture.
The Board maintains a list of matters that can only be approved by
the Board. The matters reserved to the Board and terms of reference
for each committee can be found on our website at
www.hikma.com
.
The Board
See pages 103 – 106 for corporate governance
See pages 100 – 101 for Director biographies
CEO
Executive Committee
See page 102
Nomination and
Governance
Committee
See pages 107 – 110
Audit Committee
See pages 111 – 115
Compliance,
Responsibility
and Ethics
Committee
See pages 116 – 117
Remuneration
Committee
See pages 118 – 119
Disclosure
Committee
See our website
www.hikma.com
Governance framework
The Board delegates certain matters to its committees to assist it in
discharging its responsibilities. Committee reports can be found on
pages 107 to 119.
The Board delegates responsibility for running the business and
executing the strategy to the CEO, who is supported in this role by
the Executive Committee. Biographies for our Executive Committee
members can be found on page 102.
Board composition
31 December
2025
1 January
2026
Executive Chairman and CEO
10%
11%
Other Executive Directors
20%
22%
Non-Independent Non-Executive Directors
10%
11%
Independent Non-Executive Directors
60%
56%
31 December 2025
1 January 2026
In compliance with Provision 11 of the Code, when excluding the
Chairman, the Independent Non-Executive Directors represent
67% of the Board as at 31 December 2025 and 63% of the Board
as at 1 January 2026 following the retirement of Nina Henderson.
Independent Director tenure
(as at 31 December 2025)
Number
%
0–3 years
3
50%
4–6 years
2
33%
7–9 years
1
17%
Board skills and experience
Number of Directors who have significant and current experience
Number of other Directors with experience
Governance
ESG
International
Regulatory and political
Pharmaceutical
Manufacturing
Sales
Business ethics and integrity
Cyber security
Commercial
Listed environment
Finance
Strategy and risk
Total
3
7
10
3
7
10
4
6
10
4
6
10
5
5
10
4
6
10
4
6
10
8
2
10
8
2
10
6
4
10
1
9
10
3
7
10
5
5
10
4
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Diversity
1
(as at 31 December 2025)
Ethnicity
Gender
Board
2
Senior management
3
Board
Senior management
3
1
2
3
4
5
Minority ethnic
4 ( 40%)
1. White/Caucasian
23 (30%)
Women
5 (50%)
Women
26 (34%)
White
6 ( 60%)
2. Minority ethnic
30 (39%)
Men
5 (50%)
Men
51 (66%)
3. Prefer not to say
2 (3%)
4. Did not respond
11 (
14
%)
5. Unknown
4
11 (
14
%)
Executive Committee
2
Executive Committee
Group
Minority ethnic
4 (50%)
Women
3 (38%)
Women
3,409 (35%)
White
4 (50%)
Men
5 (62%)
Men
6,185 (64%)
Prefer not to say
99 (1%)
UK senior management
As required by the Parker Review, the composition of our senior
management team working in the UK is 79% White/Caucasian and
14% Minority ethnic. 7% did not respond to the survey.
Hikma subsidiary company directors
As required by the Companies Act 2006, the composition of our
subsidiary company boards is 43 men (77%) and 13 women (23%).
1.
Diversity data collection is conducted in compliance with applicable laws and regulations
2.
Relates to Board and Executive Committee members who identify with one of the relevant categories under UK Listing Rule 6, Annex 1
3.
Senior management refers to senior direct reports to the Executive Chairman and CEO, and the senior leaders who report directly to them (excluding administrative roles)
4.
Ethnic diversity data excludes our colleagues in France, Portugal, Germany, Spain, Italy and Croatia due to local GDPR and labour law issues
Attendance
Board
(7 scheduled and
5 adhoc meetings)
Nomination and
Governance Committee
(3 scheduled meetings)
Audit Committee
(5 scheduled meetings)
Compliance,
Responsibility
and Ethics Committee
(4 scheduled meetings)
Remuneration Committee
(6 scheduled and
2 adhoc meetings)
Directors
Meetings
attended
Attendance
Meetings
attended
Attendance
Meetings
attended
Attendance
Meetings
attended
Attendance
Meetings
attended
Attendance
Said Darwazah
1
11/12
92%
–
–
–
–
Riad Mishlawi
8/9
89%
–
–
4/4
100%
–
Mazen Darwazah
1
11/12
92%
3/3
100%
–
4/4
100%
–
Victoria Hull
2
12/12
100%
3/3
100%
5/5
100%
–
4/4
100%
Ali Al-Husry
12/12
100%
–
–
–
–
John Castellani
3
1/2
50%
–
1/2
50%
1/2
50%
2/4
50%
Nina Henderson
4
12/12
100%
2/2
100%
2/2
100%
2/2
100%
4/4
100%
Cynthia Flowers
5
12/12
100%
3/3
100%
5/5
100%
2/2
100%
8/8
100%
Douglas Hurt
12/12
100%
3/3
100%
5/5
100%
4/4
100%
8/8
100%
Laura Balan
12/12
100%
–
5/5
100%
–
8/8
100%
Dr Deneen Vojta
12/12
100%
3/3
100%
–
4/4
100%
–
Board Chair
Committee Chair
1.
Said Darwazah and Mazen Darwazah were unable to attend an adhoc meeting of the Board due to an urgent personal matter
2.
Victoria Hull joined the Remuneration Committee on 1 May 2025
3.
John Castellani retired from the Board and all Committees on 24 April 2025. John was unable to attend the Board and Committee meetings in February due to a personal matter
4.
Nina Henderson stepped down as Chair of the Remuneration Committee and as a member of the Nomination and Governance, Audit and Compliance, Responsibility and Ethics
Committees on 24 April 2025
5.
Cynthia Flowers joined the Compliance, Responsibility and Ethics Committee on 1 May 2025
Where a Director was unable to attend a meeting, comments on the business of the meeting were shared with the Chair in advance of the meeting.
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Corporate governance
Financial statements
Strategic report
Leadership – Board of Directors
1
Appointed:
1 July 2007
(joined Hikma in 1981)
Nationality:
Jordanian
Experience:
Said has served as Executive
Chairman of Hikma Pharmaceuticals PLC since
2014. Said joined Hikma in 1981 and brings over
40 years of leadership experience. He served as
CEO of Hikma Pharmaceuticals PLC (2007–2018,
2022–2023, 2025–current) and as Chairman and
CEO of Hikma’s Group holding company
(1994–2003). Said has previously served as Minister
of Health for Jordan, Chairman of Jordan University
of Science and Technology, and as a board member
of Central Bank of Jordan, American University of
Beirut, Babson College, and INSEAD.
Qualifications:
Industrial Engineering degree from
Purdue University, MBA from INSEAD.
Other appointments:
Chairman of Royal Jordanian
Airlines and the Queen Rania Foundation,
Chairman and Founder of the Health Care
Accreditation Council Jordan. Vice Chairman
of Capital Bank, Jordan. Trustee of the American
University of Beirut.
Appointed:
15 December 2025
(joined Hikma in 2001)
Nationality:
Jordanian
Experience:
Khalid was appointed as Chief
Financial Officer in 2011 and is responsible for
Group finance, including reporting and capital
management. Recognising Khalid’s long service
as Chief Financial Officer, he was appointed
to the Board of Hikma to strengthen the Group’s
focus on delivering its strategic plans and to take
on additional operational management
responsibilities. Khalid has held several leadership
positions within Hikma’s financial functions during
23 years with Hikma, including VP Finance.
Qualifications:
Certified Public Accountant.
MBA from the University of Hull.
Other appointments:
Non-Executive Director
of Capital Bank, Jordan.
Appointed:
1 November 2022 as Non-Executive
Director (Senior Independent Director from
28 April 2023)
Nationality:
British
Experience:
Victoria joined the Board as a
Non-Executive Director in November 2022 and
became Senior Independent Director in April 2023.
Victoria has extensive senior executive experience
across a broad range of business, legal, commercial
and governance matters and strong international
experience. In her executive career, Victoria was an
Executive Director and General Counsel of Invensys
plc and Telewest Communications plc. Victoria is a
solicitor and began her career at Clifford Chance
LLP. Victoria also served as Senior Independent
Director of Ultra Electronics plc, and was previously
Non-Executive Director and Chair of the
Remuneration Committee at Network
International Holdings plc.
Qualifications:
Solicitor, LLB (Hons) in Law from
the University of Southampton.
Other appointments:
Non-Executive Director
and Chair of the Remuneration Committee of
IQE plc, IMI plc and Serco Group plc.
Appointed:
14 October 2005
(joined Hikma in 1981)
Nationality:
Jordanian
Experience:
Ali joined Hikma as Director of Hikma
Pharma Limited and held various management and
leadership roles within the Group before stepping
into an advisory role in 1995. Ali brings great
financial experience to the Board as well as an
in-depth knowledge of the MENA region and Hikma
Pharmaceuticals. Ali was a founder of Capital Bank,
Jordan, and served as its CEO until 2007.
Qualifications:
Mechanical Engineering degree
from the University of Southern California, MBA
from INSEAD.
Other appointments:
Director of Endeavour Jordan,
Capital Bank, Jordan, and DASH Ventures Limited.
1. Said Darwazah
Executive Chairman and CEO
2. Mazen Darwazah
N
Executive Vice Chairman, President of MENA
C
3. Khalid Nabilsi
Chief Financial Officer
4. Victoria Hull
N
R
Senior Independent Director
A
5. Ali Al-Husry
Non-Executive Director
Appointed:
1 June 2019
Nationality:
American
Experience:
Cynthia brings detailed knowledge of
the pharmaceutical and biotechnical sectors and
healthcare practitioner experience to the Board.
Cynthia was President and CEO of the North
American divisions of the global pharmaceutical
companies Ipsen and Eisai, and also held general
management positions at Amgen and Johnson
& Johnson. For nearly a decade, Cynthia served on
the Women’s Leadership Advisory Board at Harvard
University’s Kennedy School of Government.
Qualifications:
BSN from the University of Delaware
and Executive MBA from Wharton School at the
University of Pennsylvania.
Other appointments:
Non-Executive Director of
Lisata Therapeutics Inc. and Relevate Health Inc.
Chief Executive Officer of OMEZA Holdings Inc.
6. Cynthia Flowers
C
N
R
Independent Non-Executive Director
A
Appointed:
8 September 2005
(joined Hikma in 1985)
Nationality:
Jordanian
Experience:
Mazen is responsible for the strategic
and operational direction of the business across
the MENA region. During his 40 years of service
at Hikma, Mazen has held an extensive range
of positions within the Group. He has previously
served as the President of the Jordanian
Association of Manufacturers of Pharmaceuticals
and Medical Appliances.
Qualifications:
BA in Business Administration
from the Lebanese American University,
Advanced Management Plan from INSEAD.
Other appointments:
Senator in the
Jordanian Senate. Trustee of Birzeit University
and King’s Academy. Member of HM King
Abdullah’s Economic Policy Council. Board
Director at Rakuten Medical Inc.
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Appointed:
1 May 2020
Nationality:
British
Experience:
Douglas brings significant financial
experience, having served as Finance Director of
IMI PLC from 2006 to 2015. Prior to this, he held a
number of senior finance and general management
positions at GlaxoSmithKline PLC, previously having
worked at Price Waterhouse. His career has
included several years working in the US as a Chief
Financial Officer and significant experience in
European businesses as an Operational and
Regional Managing Director. Douglas previously
served as Senior Independent Director and
Chairman of the Audit Committee of Tate & Lyle plc
and Vesuvius PLC, Chairman of Countryside
Partnerships PLC, and Non-Executive Director
and Chair of the Audit Committee of the British
Standards Institution.
Qualifications:
Chartered Accountant and a
Fellow of the ICAEW, MA (Hons) in Economics
from Cambridge University.
Other appointments:
None.
7. Douglas Hurt
A
C
N
R
Independent Non-Executive Director
Appointed:
1 October 2022
Nationality:
Romanian and British
Experience:
Laura brings a deep understanding
of international business, the pharmaceutical
industry globally, key sector trends and dynamics.
Laura is a retired partner of The Capital Group
Companies, the US investment manager, where
she was an investment analyst for 17 years, covering
the European healthcare and pharmaceutical
industries. Prior to this, Laura held associate and
analyst roles at The Goldman Sachs Group Inc,
where she focused on European healthcare and
pharmaceutical investment research.
Qualifications:
CFA Charterholder, BA (Hons)
in International Business from the Academy of
Economic Studies in Bucharest, Romania.
Other appointments:
Trustee and Chair of the
Finance, Audit & Risk Committee of the Charter
Schools Educational Trust.
8. Laura Balan
A
R
Independent Non-Executive Director
Other Directors who
served during 2025
John Castellani
Independent Non-Executive Director
John Castellani retired from the Board
on 24 April 2025.
Riad Mishlawi
Chief Executive Officer
Riad Mishlawi stepped down from the Board
on 15 December 2025.
Nina Henderson
Independent Non-Executive Director
Nina Henderson retired from the Board on
31 December 2025.
Company Secretary
Helen Middlemist
Appointed:
1 January 2024
(joined Hikma in 2022)
Role:
Helen is responsible for advising on
relevant law, regulation and best practice
in relation to Hikma’s listing on the London
Stock Exchange.
Appointed:
1 November 2022
Nationality:
American
Experience:
Deneen is a healthcare executive
with extensive experience in clinical medicine,
scientific research, insurance and care delivery.
Deneen is the Executive Vice President (EVP),
Healthcare Quality and Affordability for Blue Shield
California. Previously she served as EVP, Research
and Development for UnitedHealth Group (UHG)
and as Founder and CEO of MYnetico, which was
acquired by UHG. She also served as Chief Medical
Officer of Jefferson Health Northeast and Health
Partners of Philadelphia. In 2022, Deneen was
named a Modern Healthcare’s Top Innovator,
in 2014, she was an Emmy® Award winner and in
2013, a CES® Innovation Design & Engineering
Innovation Honoree.
Qualifications:
MD from the Temple University
School of Medicine, BS in Behavioral Neuroscience
from the University of Pittsburgh.
Other appointments:
EVP for Healthcare Quality
and Affordability at Blue Shield of California.
Member of the Advisory Board of The Center
for Health Incentives & Behavioral Economics
at Penn Medicine.
9. Dr Deneen Vojta
C
N
Independent Non-Executive Director
Key:
A
Audit Committee
C
Compliance, Responsibility
and Ethics Committee
N
Nomination and
Governance Committee
R
Remuneration Committee
Committee Chair
1.
The biographies on this page reflect the roles and
responsibilities of the Board as at the date of this
report (25 February 2026). Please refer to our website,
www.hikma.com
, for updated roles and responsibilities
which reflect the leadership changes effective
26 February 2026
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Corporate governance
Financial statements
Strategic report
1
2
3
7
8
9
4
5
6
Leadership – Executive Committee
1
Joined:
2016
Nationality:
American
Role:
Julie has served as Senior Vice President,
Corporate Quality Compliance/Health and Safety
since February 2024. Julie joined Hikma through
the 2016 acquisition of Roxane Laboratories and
most recently served as Vice President, Quality,
for Hikma’s Generics business. Prior to that, she
served in various leadership roles with Hikma and
predecessor companies at Hikma’s Columbus,
Ohio, generics manufacturing facility.
Qualifications:
Bachelor of Science degree in
Biochemical Engineering from Purdue University.
Joined:
2024
Nationality:
Icelandic and American
Role:
Hafrun joined Hikma in April 2024 as
President of Hikma Rx. In 2025, Hafrun took on
additional responsibilities leading Hikma’s new
global R&D organisation. Prior to joining Hikma,
Hafrun held senior executive roles at leading
global pharmaceutical companies including
Alvotech, Teva Pharmaceuticals, Allergan
and Actavis, and most recently has served
in advisory and board roles for several biotech
and mid-sized pharma companies.
Qualifications:
MS Degree in Pharmacy and a PhD
in Physical Pharmacy from the University of Iceland.
7. Julie Hill
Senior Vice President, Corporate
Quality Compliance/Health and Safety
8. Dr Hafrun Fridriksdottir
Executive Vice President,
Hikma Rx and Global Head of R&D
Joined:
2018
Nationality:
American
Role:
Sam was appointed Group General Counsel
in September 2023. He is responsible for the
Company’s global legal, intellectual property,
litigation, and transactional functions, and advises
the Board and Executive Committee on legal risk,
corporate governance, and strategic matters
across Hikma’s international operations.
Sam has extensive experience in the
pharmaceutical and life sciences sector. Prior
to joining Hikma, he was a partner at Winston
& Strawn, where he advised multinational
pharmaceutical and biotechnology companies
on complex litigation and transactions.
Qualifications:
Sam holds a BA in Biological
Sciences from the University of Chicago and a
J.D.,
magna cum laude
, from Loyola University
School of Law. He is a licensed attorney in the US
and admitted as a Solicitor of England and Wales.
9. Sam Park
Group General Counsel
1. Said Darwazah
Executive Chairman and Chief Executive Officer
For biographical details, see page 100
2. Mazen Darwazah
Executive Vice Chairman, President of MENA
For biographical details, see page 100
3. Khalid Nabilsi
Chief Financial Officer
For biographical details, see page 100
4. Hussein Arkhagha
Chief People Officer
Joined:
2001
Nationality:
Jordanian
Role:
Hussein was appointed as Chief People
Officer in September 2023. He is responsible for
the Human Resources department and overseeing
the Legal and Company Secretarial departments.
Hussein has been a standing member of the
Executive Committee since 2017. Hussein has
held several executive positions during 25 years
at Hikma, including Chief Counsel and Company
Secretary, General Counsel, Head of Legal/MENA,
Head of Shareholders’ Department and Head
of Tax.
Qualifications:
Hussein holds a Master’s degree
in International Business Law from the University
of Manchester, under the UK Chevening
Scholarship Programme.
Joined:
2001
Nationality:
Jordanian
Role:
Bassam was appointed EVP, Corporate
Development and M&A in 2014 and has Group-level
responsibility for strategic development,
acquisitions, and alliances. He also has oversight
of the IT function, Global Procurement and Hikma
Ventures. Bassam has held several executive
positions during 24 years with Hikma, including
Chief Financial Officer in the period from 2001
to 2012, and President & COO for MENA and EU
from 2012 to 2014. Bassam played a leading role
in preparing for Hikma’s IPO in 2005 and in its
subsequent M&A activity.
Qualifications:
US Certified Public Accountant,
Chartered Financial Analyst, BA from Claremont
McKenna. International Executive MBA from
Northwestern University.
Joined:
2005
Nationality:
American
Role:
Susan has served as EVP, Strategic Planning
and Global Affairs since 2012 and is responsible
for strategic planning, investor relations, corporate
communications, and sustainability. Prior to joining
Hikma, Susan worked for Alliance Unichem and
Morgan Stanley.
Qualifications:
BA in History from Cornell
University. MBA from London Business School.
5. Bassam Kanaan
Executive Vice President,
Corporate Development and M&A
6. Susan Ringdal
Executive Vice President,
Strategic Planning and Global Affairs
1.
The biographies on this page reflect the roles and
responsibilities of the Executive Committee as at the
date of this report (25 February 2026). Please refer
to our website,
www.hikma.com
, for updated roles
and responsibilities which reflect the leadership
changes effective 26 February 2026
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Corporate governance
UK Corporate Governance Code compliance
Hikma is committed to high standards of
corporate governance and we work hard to
apply the Principles of the UK Corporate
Governance Code (the Code) and the
Markets Law of the Dubai Financial Services
Authority (the Markets Law). The Code and
associated guidance are available to view on
the Financial Reporting Council’s website
at
www.frc.org.uk
.
The report on pages 94 to 153 describes how
the Board has applied the Code and Markets
Law throughout the year ended 31 December
2025. Other than Provisions 9 and 19, as
referred to in the following sections, Hikma
has complied with all Provisions of the Code
throughout the year. With effect from the
date of the implementation of the Board and
leadership changes outlined in this report,
Hikma will comply fully with all Provisions
of the Code.
The Board acknowledges that Said
Darwazah’s position as Executive Chairman
through 2025, combined role as Executive
Chairman and CEO from December 2025 to
February 2026, and his overall tenure are
departures from Provisions 9 and 19 of the
Code. The background to this role, rationale
and safeguards to support our governance
structure are summarised below.
Joint role of Executive Chairman and CEO
When Riad Mishlawi stepped down as CEO
on 15 December 2025, the Board agreed
that Said Darwazah, as former CEO,
would step in and assume all CEO
responsibilities in addition to his
Executive Chairman responsibilities.
Recognising the importance of robust
governance arrangements during this time,
we reviewed our delegation of authority
framework to strengthen our internal controls
and ensure that no one individual had
unfettered powers of decision-making.
Executive Chairman
The Executive Chairman role was created in
February 2018, following the appointment of
a new CEO. Previously, Said Darwazah was
the Executive Chairman and CEO. The Board
continues to consider that it is important
to retain corporate memory, important
relationships and the culture of the
organisation, and views the retention of
Said’s services as valuable in developing
Hikma’s strategy.
The Board consulted shareholders prior to
Said’s appointment as Executive Chairman
and CEO in May 2014 and following the
change to the position of Executive
Chairman in February 2018. Our shareholders
continue to voice their support for Said as
Executive Chairman in individual investor
meetings and in voting behaviour at the AGM,
with 96.6% of shareholders voting in favour
of Said’s re-election at the 2025 AGM.
Rationale
The Board is focused on the commercial
success of Hikma and believes that the
position of Executive Chairman has served
Hikma in the following ways:
–
Continuity of strategy:
Said has been
a driving force behind the strategic
success of the business since 2007 and
the Board believes that it is important
for the continued success of the Group
that he remains in a strategic role. The
Executive Chairman’s role is to develop
the Group’s strategy in conjunction
with the CEO
–
Profile:
the Executive Chairman position
is highly visible inside and outside Hikma,
providing leadership to the Board and
management of the Group, acting as an
ambassador with business partners and
advisers to the organisation
–
Shareholder support:
on a rolling five-year
basis, shareholder votes have been in
favour of the Executive Chairman’s
re-election at the Annual General Meeting
(AGM), with an average vote of 96%
in favour
–
Stakeholder engagement:
a significant
number of Hikma’s key political and
commercial relationships across the
MENA region, Asia and some continental
European countries are built on the
long-term trust and respect for the
Darwazah family, which have been
enhanced by the Executive Chairman
role. During 2025 the Executive Chairman
undertook an active programme of
stakeholder engagement activities.
He accompanied the CEO and CFO to
the Jefferies Global Healthcare Conference
in London, meeting with investors, advisers
and partners to discuss Hikma’s strategy
and hear more from them. He hosted
meetings, alongside the Senior
Independent Director, with several of
Hikma’s largest shareholders following the
departure of the previous CEO. He spent
time in Jordan meeting with key officials,
including the US Ambassador to Jordan.
The Executive Chairman also attended
the London Stock Exchange, alongside
colleagues and advisers to celebrate
the 20th anniversary of Hikma’s listing
on the exchange
Safeguards
The Board continued to operate the following
enhanced governance controls to support
the Executive Chairman role:
–
Governance structure review:
the
independent Non-Executive Directors
meet aſter every Board meeting in a private
session chaired by the Senior Independent
Director. They also undertake an annual
review of the appropriateness of the
governance structure, the division of
responsibilities between the Executive
Chairman and the CEO, safeguards and
shareholder views. During their 2025
meeting, the independent Non-Executive
Directors reviewed the succession plan,
stakeholder views and the effectiveness
of the governance controls in place
to support the Executive Chairman role
–
Senior Independent Director role:
with
an Executive Chairman in role, the Senior
Independent Director has an enhanced
role at Hikma. The Senior Independent
Director is the Chair of the Nomination and
Governance Committee and takes joint
responsibility, with the Executive
Chairman, for succession planning, the
annual Board performance review, setting
the Board agenda, and agreeing action
points and the minutes of the meetings
–
Committee Chair roles:
the Chairs of
the Board Committees and the Director
responsible for workforce engagement
undertake a significant amount of work
in the discharge of their responsibilities
–
Transparency and engagement:
Hikma
has always had the highest regard for
shareholders, with several of the original
investors from before listing still investing
and supporting Hikma today. Over the
20 years since flotation Hikma has
maintained the highest standards of
shareholder engagement, which reflects
the importance placed in maintaining
strong investor relations and governance
Should shareholders require any further
information relating to these matters,
questions may be directed to the
Company Secretary.
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Corporate governance
Financial statements
Strategic report
Culture
Our values
Hikma’s culture is embedded across the
business through the Company’s values,
innovative, caring and collaborative.
Our values build on our founder’s vision
of Hikma as a company with high ethical
standards, where our people thrive in a
supportive environment.
These values were introduced in 2020,
following engagement with our workforce
and a thorough review of our culture by
the Board.
In the boardroom, we are reminded of our
values regularly and are guided by them
when making decisions and engaging with
the Executive Committee and the wider
workforce. Read more about our values
at
www.hikma.com
.
Further information on the Group’s activities
as they relate to culture is available on
pages 17, 24, 52 to 56 and 63 to 64.
Our values
We are
Innovative
We are
Caring
We are
Collaborative
Indicators of culture reviewed by the Board
and its Committees
–
reviewing the volume and nature of
whistleblowing reports and outcome
of any investigations
–
internal audit reports and findings, as
attitudes to regulators and internal audit
can give an early indication of potential
culture-related issues
–
feedback reports on workforce
engagement activities
–
monitoring compliance with our Code
of Conduct
–
reports from the Compliance,
Responsibility and Ethics Committee
–
results of our biennial workforce
engagement surveys
–
first-hand experience from engagement
with the workforce during site visits
UK Corporate Governance Code
In light of the updated requirement under
the 2024 UK Corporate Governance Code
in relation to how the Board assesses and
monitors how culture has been embedded,
the Board has initiated an enhanced
programme of monitoring, including:
–
Board approval of the 2026 plan of
workforce engagement activities by Laura
Balan as the designated Non-Executive
Director for workforce engagement
–
an increased focus on culture in the
workforce engagement survey planned for
2026, with direct input from Board
members on the content of questions
Independence
The Board reviews the independence of each
of its Non-Executive Directors during the year
as part of the annual corporate governance
review and succession planning process,
which includes consideration of progressive
refreshment of the Board. We are committed
to ensuring that the Board comprises a
majority of independent Non-Executive
Directors, who objectively challenge
management, balanced against continuity
on the Board. This is also important to meet
the independence requirements of the
Board Committees.
The Board considers Victoria Hull, Cynthia
Flowers, Douglas Hurt, Laura Balan and
Dr Deneen Vojta to be independent as
at the date of this report. These individuals
have extensive experience of international
pharmaceutical, financial, corporate
governance and regulatory matters,
bring strong independent oversight,
continue to demonstrate independence
and were not associated with Hikma prior
to joining the Board.
The Board does not view Ali Al-Husry as
an independent Director. This is due to the
length of his association with Hikma, having
held an executive position with Hikma prior
to listing, and his involvement with Darhold
Limited, Hikma’s largest shareholder.
However, Ali continues to bring to the
Board broad corporate finance experience,
in-depth awareness of the Group’s history,
and a detailed knowledge of the MENA
region, which is an important and
specialist part of the Group’s business.
Corporate governance
continued
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To demonstrate our commitment to transparent corporate
governance reporting, we have updated our disclosure on key
Board activities to more explicitly link Board activities, decisions
and their outcomes to Hikma’s strategy and objectives.
Key Board activities in 2025
Strategic pillars:
Business and strategy
Link to
strategic priorities
Renamed the Generics business to Hikma Rx to reflect its focus on providing differentiated and complex
prescription (Rx) medicines
Considered opportunities to enhance operational efficiencies and oversaw the consolidation of our R&D
organisation into a single, unified global organisation, allowing Hikma to optimise our resources, strengthen
our capabilities, accelerate time-to-market, and support our strategic growth priorities
Evaluated the progress of the integration of the strategic acquisition of parts of Xellia Pharmaceuticals
to strengthen the Injectables business
Monitored the delivery of a significant new long-term CMO contract with a global pharmaceutical company.
Our CMO business is key to our Hikma Rx strategy, supporting stronger revenue growth and profitability,
while improving the utilisation of our Columbus, Ohio site
Approved a settlement agreement that resolves all of Hikma’s Xyrem® (sodium oxybate) antitrust cases in the US.
This settlement is not an admission of wrongdoing or liability
Held the annual two-day strategy meeting in Portugal, during which the Board visited the Hikma offices and
manufacturing facility, and discussed the Group strategy, progress and future plans for growth
Reviewed and approved the five-year business plan, capital expenditure plan and budget for 2026
Reviewed business development opportunities throughout the year
Performance, risk and operations
Link to
strategic priorities
Received reports from the CEO and CFO at each meeting which included progress against strategic objectives,
financial performance and key areas of focus
Monitored key legal matters which were summarised by the Group General Counsel in regular legal reports
Received updates from management on quality compliance, health and safety, pharmacovigilance
and regulatory affairs
Reviewed the Group risk report and approved the principal risks and risk appetite, and the emerging risks
Received and discussed the annual update on cyber security
Approved the Group Capital Allocation Framework to provide a transparent framework for shareholder returns
and align capital decisions with long-term strategic goals
Approved the annual statements on Modern Slavery and Tax Strategy, which are available on our website at
www.hikma.com
Approved the issuance of a $500 million five-year Eurobond, refinancing the previously issued
$500 million five-year Eurobond, and the arrangement of new loan facilities to secure the Group’s
ongoing financing requirements
Strive for
excellence
People and
responsibility
Diversify and
differentiate
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Corporate governance
Financial statements
Strategic report
Key Board activities in 2025
continued
Stakeholder focus
Link to
strategic priorities
Received an update on the results of the Hikma AI Innovation Competition 2024, a competition inviting Hikma
colleagues to submit proposals for AI solutions to business challenges, and reviewed submissions received by
the competition finalists
Approved a final dividend for the year ended 31 December 2024 of 48 cents per share, which resulted in an
increased total dividend of 80 cents per share for the full year 2024 (2023: 72 cents per share). The expected
full-year dividend for 2025 is 84 cents per share
Received and evaluated reports from the designated Non-Executive Director for workforce engagement
on feedback from our people during visits to Hikma sites in Italy and Portugal, and reviewed programmes
within the People function and planned actions to address the feedback received
Undertook a well-received engagement programme with investors regarding the Rule 9 Waivers, resulting
in a significant improvement in our voting outcome at the 2025 AGM
More information on stakeholder engagement activities and outcomes is included in our Section 172 statement on pages 22 to 27.
Corporate governance and succession planning
Link to
strategic priorities
Approved organisational and leadership changes, as set out on pages 5, 107 and 108
Planned and completed the 2025 Board performance review. More information on the process, insights and
outcomes of the Board performance review can be found on page 108
Approved updates to the matters reserved to the Board, which is available on our website at
www.hikma.com
Monitored the orderly handover of responsibilities for the Chairs of the Remuneration and Compliance,
Responsibility and Ethics Committees and the designated independent Non-Executive Director for
workforce engagement
Oversaw the interim plans for continuity of leadership for the Injectables business, following the departure of
the President of Injectables and the CEO
Received reports from Committee Chairs on the work of the Board Committees
Approved the register of Directors’ external commitments at each Board meeting
Strategic
pillars:
Corporate governance report
continued
Strive for
excellence
People and
responsibility
Diversify and
differentiate
106
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Annual Report 2025
Dear Shareholders
The Nomination and Governance Committee (NGC or the Committee)
has continued to play a key role in the oversight of the Group’s
governance arrangements and succession planning.
Succession
The Committee oversees succession for both Executive and
Non-Executive Directors and reviews the succession plans for
these roles. Below Board level, the Committee is responsible for
ensuring that appropriate arrangements are in place for senior
positions, including the Executive Committee.
Executive
On 15 December 2025, Riad Mishlawi stood down as CEO and from
Hikma’s Board of Directors by mutual agreement. In order to ensure
continuity in the delivery of Hikma’s strategy, the Board agreed that
Said Darwazah, Hikma’s Executive Chairman and former CEO, would
step in and assume all CEO responsibilities. In making this
recommendation, the Committee noted that Said had served as CEO
on two previous occasions and, in his role as Executive Chairman
(since 2014), is well placed to step in and serve as CEO. In addition,
Khalid Nabilsi, Hikma’s CFO of 15 years, joined Hikma’s Board of
Directors to further strengthen management presence on the Board.
Additionally the Committee recommended and the Board
subsequently approved, effective 26 February 2026, that Said
Darwazah step down as Executive Chairman. This will allow Said to
focus exclusively on the CEO role for the next two years, providing
stability, and enhancing accountability and agility in relation to strategic
decision-making. Separating the Chair and CEO roles affirms Hikma’s
commitment to corporate governance, achieving compliance with
provisions of the UK Corporate Governance Code (the Code) in relation
to the division of responsibilities between the Chair and the CEO.
To assist Said in the day-to-day leadership of the business, two
Deputy CEO roles have been established. Mazen Darwazah will
become Deputy CEO, MENA, responsible for all the Group’s activities
in the MENA region, he will also maintain his role as Executive Vice
Chairman. Khalid Nabilsi will become Deputy CEO, North America &
Europe and will oversee all Hikma’s activities in North America and
Europe. Areb Kurdi (currently VP Finance, Group Financial Controller)
will become Acting CFO, reporting to the CEO. The Committee has
appointed an external search firm to undertake a search for a
permanent CFO.
Non-Executive
The Committee recommended and the Board subsequently approved
that, during Said’s tenure as CEO, I will step in as Non-Executive Chair
of Hikma. In making this recommendation the Committee noted my
current position as Senior Independent Director, an enhanced role at
Hikma (see page 103 for further detail) which has numerous
responsibilities in common with a typical Non-Executive Chair.
The Committee considered my tenure and experience as a well-
established Non-Executive Director of UK listed companies, including
IMI plc and Serco Group plc, and previous roles at Network
International Holdings plc and Ultra Electronics plc. The Committee
also considered the demands of the Non-Executive Chair role
alongside my other appointments and my independence. Following
my appointment as Non-Executive Chair, I will resign as a member of
the Audit Committee, in line with the recommendations of the Code.
In addition to his current role as Chair of the Audit Committee,
Douglas Hurt will take up the role of Senior Independent Director. The
Committee noted that Douglas is well placed to take on this role, given
his experience as a Non-Executive Director of UK listed companies,
which includes previous Senior Independent Director roles held at
Vesuvius Plc, Tate & Lyle Plc and Countryside Partnerships Plc, his
overall tenure as an independent Non-Executive Director of Hikma
and current position as Chair of Hikma’s Audit Committee.
Nomination and Governance Committee
Activities in 2025
–
Recommended the appointment of Said Darwazah as CEO
following the departure of Riad Mishlawi
–
Recommended the appointment of Khalid Nabilsi as an
Executive Director of Hikma
–
Reviewed and updated the Board skills matrix to inform
future Non-Executive Director recruitment
–
Approved updates to key governance policies and
recommended changes to the matters reserved to the
Board to strengthen Hikma’s internal governance framework
–
Reviewed, with the Chief People Officer, the progress made
on succession and development plans for the Executive
Committee and certain senior roles
–
Conducted an internally facilitated Board performance
review to evaluate the effectiveness of the Board and
its Committees
Priorities for 2026
–
Complete the recruitment of a Chief Financial Officer to
succeed Khalid Nabilsi and strengthen the executive
leadership team
–
Monitor, embed and support recent Board and executive
leadership changes
–
Commence the recruitment of additional independent
Non-Executive Directors to further enhance
Board independence, diversity of thought and
governance oversight
–
Continue to refine succession planning for the Executive
Committee and senior management
Victoria Hull
Chair, Nomination and
Governance Committee
and Senior Independent Director
Letter from the Chair
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Corporate governance
Financial statements
Strategic report
As a result of the above changes, we will be taking steps to refresh the
Board with the recruitment of additional independent Non-Executive
Directors in 2026. During this process, the Committee will be mindful
of the Board skills matrix, which we reviewed and updated in 2025
and can be found on page 98. The skills matrix was mapped against
Hikma’s strategic priorities to identify key skills and experience
required to support the delivery of the strategy and inform future
Non-Executive Director recruitment.
As approved by the Board in February 2024, the following changes
took effect from the 2025 Annual General Meeting (AGM) on
24 April 2025:
–
Deneen Vojta succeeded John Castellani as Chair of the
Compliance, Responsibility and Ethics Committee (CREC)
–
Cynthia Flowers succeeded Nina Henderson as Chair of the
Remuneration Committee
–
Laura Balan succeeded Nina Henderson as the designated
independent Non-Executive Director for workforce engagement
Senior management
During 2025 and following a detailed review of succession plans for
the Executive Committee and key senior management roles in 2024,
the Committee received updates from the Chief People Officer on
senior management succession plans below Board level.
Board performance review
In line with the Code we undertake a formal and rigorous annual
evaluation of performance of the Board, its committees, the Chairman
and individual Directors. We operate a three-year cycle for our Board
performance review (BPR) with an external review in year one, followed
by internal reviews in years two and three. Our last external evaluation
took place in 2024, so in 2025, Hikma undertook an internal BPR.
Process
The 2025 BPR was led by myself, as Senior Independent Director
(SID), with the support of the Group Company Secretary. We adopted
a hybrid approach comprising:
–
individual meetings with the Executive Chairman and each
independent Non-Executive Director, providing an opportunity
for two-way dialogue focusing on the quality of the conversation
in the Board and Committee meetings
–
a facilitated discussion with all Board members, led by the Senior
Independent Director and supplemented by a briefing paper with
suggested topics and questions to aid the discussion. The Board
followed up on actions from the 2024 BPR, discussed the
performance of the Board and its committees in 2025, and agreed
an action plan for 2026 which is set out in the following paragraphs
Insights from 2025
The individual conversations between the Executive Chairman and
each independent Non-Executive Director were viewed as a valuable
opportunity for informal feedback and a two-way dialogue on the
quality of the conversation in the Board and committee meetings.
The insights and feedback received have provided an opportunity for
reflection and collaboration to continuously improve the collective
workings of the Board.
During the facilitated discussion, the Board considered:
–
our approach to succession planning, people and development
–
enhancements to the Board’s processes for assessing and
monitoring culture and how the desired culture has been embedded
–
the cadence of strategic updates to supplement the annual
strategy meeting and test assumptions and track progress on our
strategy throughout the year
–
insights from the individual meetings with the Executive Chairman
–
the importance of the external perspective on Hikma’s operations
–
the continued strength of boardroom dynamics and engagement
with management
Action plan for 2026
The Board noted key findings and agreed the following actions
for 2026:
Key finding
Actions
Strategic
updates
Building on the work undertaken in 2025,
further enhancements to strategic reports
and timing of those reports were agreed
Succession
planning
The Committee would continue to monitor the
progress of succession planning and provide
regular updates to the Board
Culture
monitoring
Enhance processes to assess and monitor
culture and how the desired culture has
been embedded
Progress against actions from 2024
In 2024, Hikma undertook an externally facilitated performance
review. That review highlighted a constructive atmosphere in
the boardroom, positive engagement between Executives and
Non-Executives, and a collective willingness to strengthen the
Board’s impact.
Good progress has been made against the actions identified as
part of the 2024 BPR, with all items listed in our 2024 Annual Report
now closed.
Executive Chairman performance review
The Executive Chairman and I meet regularly to discuss matters
including Board succession planning, the performance of the Board
and how his role helps deliver and enhance that performance. This
builds on discussions that I hold with the independent Non-Executive
Directors as a group and commentary received through the BPR
and other stakeholder engagement processes. The Remuneration
Committee is an important input to this process as it assesses the
Executive Chairman’s performance as part of the determination
of performance-based compensation.
Director performance reviews
The Executive Chairman, having taken into account the comments
from the Board performance review and discussions with the SID,
reviewed the performance of each of the Directors during the year
and concluded that each Director contributes effectively to the Board,
brings particular areas of skill and experience, which ensures the
Board as a whole has the right capabilities and devotes sufficient time
to their role. The Committee has concluded that the relevant Directors
be recommended to shareholders for re-election at the 2026 AGM.
Nomination and Governance Committee
continued
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Tenure
We anticipate that independent Non-Executive Directors will generally
serve for a period of up to nine years or, if required to facilitate
an orderly transfer of responsibilities, no later than the next AGM of
the Company following the ninth anniversary of their appointment.
All appointments are formally reviewed aſter three years and again
at six years.
In 2025, the Committee approved the reappointment of four
Non-Executive Directors, each of whom had reached the end
of their current three-year term:
–
Cynthia Flowers
–
Laura Balan
–
Victoria Hull
–
Deneen Vojta
The Committee determined that each of the above Directors had
contributed meaningfully to Board and Committee discussions and
demonstrated a strong commitment to their roles. They continue to
bring valuable skills and experience to the Board. Furthermore, each
Director remains independent in character and judgement, and there
are no relationships or circumstances that are likely to affect, or could
appear to affect, their independence.
Each Director will stand for re-election at the 2026 AGM. The position
of each Director was reviewed during the year as part of the
consideration of succession arrangements, independence issues,
the annual governance structure review, the BPR and the ongoing
dialogue between the Executive Chairman and the SID.
Time commitment
The Committee continues to review the external commitments
of each Director with a view to ensuring that the benefits of the
additional experience from their external commitments are not
outweighed by reductions in their commitment to Hikma. The
Directors achieve excellent attendance and spend significant time
delivering their responsibilities. Accordingly, the Committee considers
that there is currently an appropriate balance. The Committee will
continue to monitor the situation.
Hikma’s inclusive workplace welcomes different
cultures, perspectives and experiences from
across the globe.”
Board composition
During the year, the Committee reviewed the composition of the
Board and its committees. This review included consideration
of the skills and attributes of each member, the balance between
constructive challenge and empowerment of the executive,
the results of the 2025 BPR and the current and desired levels
of perspectives and experiences in the Boardroom.
In accordance with the Committee’s Terms of Reference and its
authority delegated by the Board, the Committee approved the
following appointments, effective 1 May 2025:
–
Cynthia Flowers was appointed as a member of the CREC.
As Chair of the Remuneration Committee, the Committee felt
that Cynthia should receive updates in relation to Hikma’s
sustainability programme (which is overseen by the CREC),
which oſten forms part of the target setting process for variable
remuneration to Executive Directors
–
Victoria Hull was appointed as a member of the Remuneration
Committee. As SID, Victoria is a key point of contact for
shareholders when discussing executive remuneration
Skills and experience
The Board believes it is important for Directors to demonstrate the
highest level of integrity, a challenging and constructive style and
have significant international experience at an executive level. The
Committee regularly considers whether there may be gaps in fulfilling
the specific and in-depth experience that the Board requires as
a whole, which focuses on the following areas:
–
strategy, finance, culture and leadership
–
business environment in the US, Europe and the MENA region
–
pharmaceutical manufacturing and distribution
–
development of new healthcare capabilities
–
listing regulations, investor perceptions and governance
Hikma supports Directors in their continued professional
development. As the Directors are highly experienced, their training
needs tend to be related to either ensuring awareness of changes
in the business, political and regulatory environments, or bespoke
training on particular areas for development. Therefore, Hikma
provides financial support for specific training requests and ensures
that Directors are briefed by internal and external advisers on
a regular basis.
During the year, the Board received briefings on matters
including the pharmaceutical competitive environment,
healthcare business development activity, external stakeholder
perspectives, market sentiment, cyber security and crisis
management, business intelligence, capital markets, emerging
risks and regulatory developments.
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Corporate governance
Financial statements
Strategic report
1.
Senior management refers to senior direct reports to the Executive Chairman and CEO,
and the senior leaders who report directly to them (excluding administrative roles)
Nomination and Governance Committee
continued
Inclusion and diversity
The Board Diversity Policy, which applies to the Board and its
committees, sets out the Board’s ongoing commitment to ensure
that the Board and its committees are an inclusive place that
welcomes different cultures, perspectives, and experiences
from across the globe. In 2025, the Committee approved
minor amendments to the Board Diversity Policy, which is available
at
www.hikma.com
.
Information on Board, Executive Committee and senior management
diversity is summarised on page 99 and included in the prescribed
format required under the UK Listing Rules on page 151. Hikma
supports the recommendations of the Parker Review and the FTSE
Women Leaders Review in relation to Board diversity and has adopted
the objectives for Board diversity set by both reviews.
At a Group level, Hikma’s objective is to ensure that it has an inclusive
workplace that welcomes different cultures, perspectives and
experiences from across the globe. Hikma is committed to attracting,
retaining and developing talented people, irrespective of their race,
colour, religion, age, sex, sexual orientation, gender identity, marital
status, national origin, present or past history of mental or physical
disability and any other factors either protected from consideration
by law or not related to a person’s ability to perform the relevant role.
This statement is included in our Code of Conduct and communicated
to all colleagues.
One of the pillars of the Group’s strategy is ‘people and responsibility’.
The Group’s approach to our people’s progress, belonging, succession
and appointments are a core part of this pillar. The Committee
monitors the diversity metrics which are detailed on page 99. Hikma
has successful empowerment and talent development programmes
to help all of our people make the most of their potential, for more
information please see pages 53 to 56. Further detail on workforce
diversity is provided on page 99.
The Group’s talent acquisition policies for the three most senior
staff grades require a balanced list of candidates to support our
diversity goals.
Ethnicity
The Board considers that it has demonstrated strong ethnic diversity
since the formation of Hikma and has four Directors from ethnic
minority backgrounds (when assessed against UK ONS criteria),
representing 44% of the Board, including the Executive Chairman and
CEO, at the date on which this report is signed (40% as at 31
December 2025). The Board has adopted and meets the objectives
set by the Parker Review and UK Listing Rules.
In considering the Parker Review’s 2024 voluntary recommendation
for FTSE 350 companies to set themselves a target for the percentage
of the UK senior management team who self-identify as being from
an ethnic minority by 2027, the Committee decided not to set an
ethnic diversity target for its UK senior management team for the
following reasons:
–
Hikma has a diverse geographic footprint and a global workforce
with high levels of diversity (39% of our global senior management
1
population self-identify as being from an ethnic minority)
–
There is a small UK workforce, accounting for c.18% of the senior
management
1
population
In order to demonstrate focus on the issues raised by the Parker
Review in relation to senior management ethnic diversity, Hikma
reaffirmed its commitment to:
–
Monitoring senior management
1
ethnic diversity across our global
operations on an annual basis, using a voluntary survey to collect
data. The survey contained an expanded list of ethnicities sensitive
to Hikma’s workforce, and individuals had the option to respond by
selecting ‘prefer not to say’
–
Providing enhanced ethnic diversity disclosures by continuing to
report on the ethnic diversity of our global senior management
1
population, in addition to the UK senior management population
requested by the Parker Review. The enhanced disclosures can
be found on page 99
Gender
Since its founding, Hikma has actively promoted inclusion across
its operations. Our Board has good gender diversity with women
representing 44% of the Board at the date on which this report
is signed (50% as at 31 December 2025). The Board has adopted
and meets the objectives set by the FTSE Women Leaders Review
and diversity-related disclosures under the UK Listing Rules to have
at least 40% of Board members identifying as women and that at least
one of the senior Board positions (Chair, CEO, CFO or SID) is held
by a woman.
The Board also supports the voluntary target set by the FTSE Women
Leaders Review, to increase the diversity of the senior management
team
1
. Information on our senior management
1
gender diversity is
included on page 99.
Governance review
As in previous years, the Committee undertook the annual review of
the Group’s governance arrangements in conjunction with the Group
Company Secretary. This year the exercise included a review of the
structure and composition of the Board and its committees, Board
succession planning, and the BPR. The Committee also received a
regulatory update in relation to corporate governance and reporting,
and reviewed and approved updates to the terms of reference for
each Board Committee. Our governance framework can be found on
page 98, and further information on Hikma’s Board, committees and
corporate governance practices is available at
www.hikma.com
.
For and on behalf of the Nomination and Governance Committee.
Victoria Hull
Chair, Nomination and Governance Committee
and Senior Independent Director
25 February 2026
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Audit Committee
Dear Shareholders
The Audit Committee (the Committee) has spent considerable time
in 2026 overseeing enhancements to Hikma’s internal controls.
In addition to our routine responsibilities for financial reporting
integrity and audit oversight, we:
–
prepared for reporting against Provision 29 of the Code by
launching a Group Controls Programme that maps material risks
to control sets and catalogues assurance sources across
management, internal controls & assurance (IC&A), internal
audit and external assurance
–
oversaw the fraud prevention and detection programme in
readiness for the new offence of failure to prevent fraud under the
ECCTA that came into effect in September 2025, including targeted
control testing and leadership engagement
–
conducted a review of the treasury function, covering the policy
framework (including currency, liquidity, credit and FX policies),
technology and controls, intercompany loans and dividends,
strengthening our understanding of the control environment
and informing areas for continued monitoring in 2026
–
reviewed the results of an external quality assessment of our
internal audit function and agreed a set of enhancements which
are being implemented
Audit Committees and External Audit:
Minimum Standard
The Committee confirms that it complies with the obligations set
out under the Audit Committees and the External Audit: Minimum
Standard (the Minimum Standard), published by the Financial
Reporting Council (FRC) in May 2023. Disclosures in line with the
reporting obligations are included within this Committee report on
pages 111 to 115 and an explanation of the entity’s accounting policies
can be found on pages 167 to 172.
External audit
The external audit was undertaken by PricewaterhouseCoopers LLP
(PwC). We believe the independence and objectivity of the external
auditor and the effectiveness of the audit process are safeguarded
and strong. The Company has complied with the Statutory Audit
Services Order for the financial year under review. The Committee
recommends the re-appointment of PwC for 2026.
Effectiveness
During the year, the Committee reviewed the work of PwC and
concluded that they provided an effective audit, were appropriately
challenging, had constructive relationships with the relevant parties
and that the senior statutory auditor provided clear and constructive
leadership to the audit team. Management also conducted a formal
review of audit quality and effectiveness using a survey where
feedback was provided by Committee members and management.
The key outcomes were summarised and considered by the
Committee in their assessment of the auditor.
As part of this review the Committee examined the following areas:
–
Audit quality and technical capabilities:
the Committee
considered that the external auditor both identified the appropriate
risks to inform their audit work in respect of the financial statements
and associated disclosures for the year ended 31 December 2025
and demonstrated a high level of expertise. The Committee
provided feedback on the auditor’s performance as part of its
regular meetings with them without management present. The
Committee also took into account the reports of the FRC, including
the Audit Quality Inspection Supervision report, and continues to
believe that there is an open and appropriately challenging
relationship between the audit leadership team, the Committee
and management.
Douglas Hurt
Chair, Audit Committee
Letter from the Chair
Activities in 2025
–
Launched the Hikma Group Controls Programme to mitigate
material risks and prepare for the additional reporting
requirements under Provision 29 of the UK Corporate
Governance Code (the Code)
–
Approved the fraud prevention and detection programme
charter in alignment with the new offence of failure to
prevent fraud introduced under the Economic Crime
and Corporate Transparency Act (ECCTA)
–
Conducted an external assessment of the effectiveness
of Hikma’s internal auditor in line with new Global Internal
Audit Standards published by The Chartered Institute of
Internal Auditors (IIA)
–
Strengthened the governance of internal audit procedures
by approving the updated internal audit charter
and mandate
–
Reviewed the Group’s treasury policies, procedures and
internal controls
–
Reviewed the product pricing model for the US business
Priorities for 2026
–
Oversee the process to meet disclosure requirements under
the EU Corporate Sustainability Reporting Directive (CSRD)
–
Continue to implement enhancements to our internal controls
–
Continue to oversee the work underway to implement the
IIA’s new global standards for Hikma and complete the
recommended actions following the external assessment
of Hikma’s internal auditor
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Corporate governance
Financial statements
Strategic report
Audit Committee
continued
–
Independence:
the Committee regularly reviews the independence
safeguards of the auditor and remains satisfied that auditor
independence has not been compromised. During the year,
the Committee received reports on the application of its policies
on the provision of non-audit services and employment of former
employees of the external auditor. The Committee is satisfied
that the auditor is independent
–
Challenge and judgement:
the Committee considers that PwC
provide appropriate challenge to the management team which
results in the Group’s accounting and key judgements being fully
considered and supported. The Committee believes that PwC have
demonstrated well-considered and clear-sighted judgement in the
matters on which they have provided opinion and that they have
been open to an appropriate level of challenge and debate.
Examples of PwC’s professional scepticism and challenge, as noted
by the Committee, include their in-depth audit and challenge of the
classification and treatment of the Group’s exceptional items and
other adjustments and the assumptions used in the impairment
review exercise
–
Non-audit services:
the Committee’s policy on non-audit services
is available on our website
www.hikma.com
. The Committee has
discretion to grant exceptions to this policy where it considers that
exceptional circumstances exist and that independence can be
maintained, while having due regard to the FRC’s ethical standards
for auditors, meaning that non-audit fees will be capped at 70%
of the average audit fees paid in the previous three consecutive
financial years. In 2025, PwC provided assurance services related to
the interim review and other non-audit services with a total value of
$771,000 (2024: $519,000). These services are within the ordinary
course of services provided by the auditor
The Committee confirms that the statutory audit services for the
financial year under review were conducted in compliance with the
Competition and Markets Authority Order, and competitive audit
tender processes were undertaken in 2015 and 2024.
Auditor’s fee
$3.3m
PwC
Audit-related fees
Other non-audit services
1.
Amounts have been restated to reflect final amounts billed in relation to 2024
1 Jan –
31 Dec 2025
$3.3m
$0.7m
17.5%
82.5%
1 Jan –
31 Dec 2024
(restated)
1
$3.7m
$0.5m
11.9%
88.1%
Audit tendering
PwC was originally appointed as external auditor in May 2016 following
a competitive tender process in 2015 therefore the current Annual
Report is the tenth report that they have audited. In accordance with
audit tendering guidelines and as reported in our 2024 Annual Report,
the Committee undertook a formal competitive tender during 2024
and PwC was reappointed as external auditor from the conclusion of
the 2025 AGM. PwC rotated the senior statutory auditor in 2019 and
in 2022, when Mr Nigel Comello was appointed.
Position and prospects
During the year, management undertook an annual review of the
Company’s strategic direction and an extensive assessment of the
Group’s short- and medium-term prospects, including the budget for
2026 and the five-year business plan, respectively. Management
presented and received the Board’s approval and commentary on the
full strategy, budget and five-year business plan. Having taken into
account how the Group has responded to the changing business and
regulatory environment, the business plan, the principal risks and
uncertainties facing the Group and other relevant information, the
Committee has concluded that the Group continues to have
attractive prospects for the future.
Going concern and longer-term viability
The Committee considered the going concern position as detailed
on page 89 and the longer-term viability assessment as detailed on
page 90. The Committee gave careful consideration to the period of
assessment used for the viability statement and concluded the
time period of three years remained appropriate.
Having reviewed and challenged the downside assumptions, forecasts
and mitigation strategy of management, the Committee believes that
the Group is adequately placed to manage its business and financing
risks successfully and has a reasonable expectation that the Group
has adequate resources to continue in operation and meet its
liabilities as they fall due and over the viability period. The Committee
was comfortable with recommending to the Directors that they adopt
the going concern basis in preparing the financial statements.
Ensuring the integrity of financial
reporting and providing oversight
of our systems for internal control
and risk management.”
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Significant matters related to the financial statements
As part of its work reviewing the financial statements of the Group and the report of the auditor, the Committee considered and discussed the
following important financial matters:
Matters considered in relation
to the financial statements
The Committee’s review and actions
Impairment review
Management conducted an impairment review of intangible assets, right-of-use assets, and property,
plant, and equipment. This resulted in a recommended impairment charge of $15 million for individual
intangible assets, $10 million for property, plant, and equipment and $1 million for right-of-use assets.
The Committee reviewed management’s approach and recommendations and concluded that the
proposals were appropriate. More information can be found in Notes 13, 14 and 15 on pages 183 to 187.
Revenue recognition
The Committee reviewed the Group’s revenue recognition policies and their application by
management. This included assessing the model used to estimate chargebacks, in-channel
inventories, and chargeback rates. The Committee also evaluated deductions for customer
rebates, returns and government rebates and approved the disclosures on year-end estimates
and their sensitivity to assumption changes.
More information on revenue recognition can be found in Notes 2 and 3 on pages 168 and 172.
Exceptional items and other
adjustments
Management presents core results to monitor performance, set targets, and assess progress. Core
results are a non-IFRS measure which exclude exceptional items and other adjustments. These
figures are also presented alongside reported results to external audiences, providing a clearer view
of the Group’s underlying performance, a more complete picture of its results, and enhanced
comparability of consolidated financial statements. Exceptional items and other adjustments for
the year are detailed in Note 6 on pages 177 to 178.
The Committee assessed management’s presentation of non-core items and concluded that the
classification and proposed disclosures for non-IFRS items were appropriate and in accordance
with Hikma’s policy.
Taxation
Hikma’s worldwide operations are highly integrated and involve a number of cross-border supply
chains, which results in judgement being required to estimate the potential tax liabilities in different
jurisdictions. The Committee took advice from professional services firms and management in
assessing the reasonableness of the Group’s provisions for uncertain tax positions, which amounted
to $38 million, and in reviewing the deferred tax assets in key markets, which amounted to
$307 million. More information can be found in Note 10 on pages 179 to 181.
The Committee reviewed the appropriateness of the disclosures in the Annual Report, and the Board
reviewed and approved the Group’s tax strategy statement, which is available on our website at
www.hikma.com
.
Fair, balanced and understandable reporting
Hikma is committed to clear and transparent disclosure and seeks
to continuously improve the clarity of its reporting. The Company
received a no-response letter from the FRC following its review of the
Group’s 2024 Annual Report. The Committee considered the outcome
of this review and, together with the Board, was satisfied that the
disclosures in this Annual Report address the matters suggested by
the FRC to improve future reporting where applicable.
1
During the year, the Committee reviewed its terms of reference and
formally incorporated the Committee’s responsibility to oversee the
integrity of non-financial reporting, including ESG data required by
CSRD and other reporting standards.
At the request of the Board, the Committee considers whether
Hikma’s Annual Report is fair, balanced and understandable and
that the narrative is consistent with the financial information.
The Committee’s assessment is underpinned by a comprehensive
review process, supported by a statement from the Reporting
Committee and a review by the Executive Committee.
The Reporting Committee is comprised of representatives from
Finance, Investor Relations, Risk, Reward, Sustainability and Company
Secretariat and is supported by divisional and functional heads,
as required.
The Reporting Committee’s activities include:
–
initiating the review process for the Annual Report significantly
before the year-end, considering external developments, issuing
guidance to contributors and identifying areas for improvement
–
obtaining input from external advisers, including the external and
internal auditors, corporate reporting advisers, corporate brokers
and public relations advisers
–
undertaking several multi-functional reviews of the disclosures
as a whole prior to the publication of the Annual Report to ensure
consistency and accuracy across the document as a whole
–
overseeing an extensive verification process to ensure the
accuracy of disclosures
Each member of the Audit Committee is satisfied that the 2025
Annual Report is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group’s
position, performance, business model and strategy, and has
recommended the adoption of the Report and Accounts to the Board.
1.
The Committee notes the inherent limitations of the FRC’s review, that the review is
based solely on the Annual Report and Accounts and does not benefit from detailed
knowledge of Hikma or an understanding of the underlying transactions entered into,
and that no assurance is provided that the Annual Report and Accounts are correct in
all material respects. The Committee acknowledges that the FRC’s role is not to verify
the information provided to it but to consider compliance with reporting requirements.
The letter was written on the basis that the FRC (which includes its officers, employees
and agents) accepts no liability for reliance on it by the Company or any third party,
including but not limited to investors and shareholders
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Corporate governance
Financial statements
Strategic report
Audit Committee
continued
Verification
The qualitative disclosures in the Annual Report are subject to adviser
review, internal review and external audit processes. Our internal
teams have also provided additional verification and support in
respect of each material statement of fact, which assisted the
Committee in its determination that the report and financial
statements taken as a whole are fair, balanced and understandable.
Reporting controls
Hikma’s key controls and risk management systems relating to the
financial reporting process include the enterprise resource planning
system, the processes in the ‘Fair, balanced and understandable’ and
‘Verification’ sections described earlier in this letter, the review of the
financial statements and disclosures that is undertaken by the
Executive Committee, and detailed internal financial control
processes necessitating the verification of financial records at a local,
regional and Group level.
Risk management and internal control
The Board is ultimately responsible for ensuring that Hikma’s systems
of internal controls and risk management processes are effective
and has delegated responsibility for reviewing their effectiveness
to the Committee.
Risk management
The Committee has continued to oversee the operation of the Group’s
Enterprise Risk Management (ERM) framework. The framework
ensures the identification, evaluation and monitoring of the Group’s
risks, including the principal risks, alignment with the risk appetite, and
mitigation of areas of risk exposure. Management escalated certain
risks that materialised during the year for Board attention and
oversight, for example changing global trade tariffs, pipeline launch
timelines, revenue from new business and non-financial reporting
requirements. Such instances serve to ensure that there is adequate
oversight of the relevant risk mitigation programmes.
The Board continued to exercise oversight of cyber risks during the
year, including presentations from management on IT continuity and
disaster recovery, enhancements to security systems, new security
services, penetration test activities, and increasing cadence of
awareness and training activities. An external maturity assessment
aligned to the industry-standard National Institute of Standards and
Technology (NIST) cyber security framework and the Capability
Maturity Model Integration (CMMI) maturity model was conducted in
Q2 2025 by NCC Group. The conclusion of the assessment was that
our maturity score had increased by 18% from the prior assessment. In
addition, an externally facilitated cyber exercise was run with
members of the Leadership Council and senior management to raise
awareness of threats and existing controls, and to test processes and
procedures to respond and recover from potential disruptive events.
Further information on Hikma’s management of cyber risks,
associated assessments and certifications is included on page 86.
As in previous years, management and the Board have undertaken
a robust assessment of the Group’s emerging risks as well as the
annual review of the principal risks. The Committee and the Board
have considered the principal risks facing the Group and have
decided that only minor refinements were required in the year under
review. The Board and management have also reviewed the appetite
for those principal risks and have concluded that it remains
appropriate. Further information regarding the Group’s risk
management activities is available in the risk management section on
pages 80 to 90.
Internal control
In preparation to report against Provision 29 of the Code from
1 January 2026, Hikma has revised its internal control framework.
During 2025, the IC&A team advanced the Group controls programme
and provided regular status updates to the Committee, who reviewed
and endorsed the material risks and corresponding controls.
To mitigate material risks, control frameworks, standard operating
procedures and related policies were formalised and embedded
across the organisation. The IC&A team reinforced the requisite
documentation standards expected when operating these controls.
Looking ahead, a risk-based testing programme is being launched in
2026 to provide rolling assurance over the effectiveness of material
controls. This programme will consolidate assurance outcomes from
all lines of defence, and will support the Board’s annual review and
declaration on the effectiveness of Hikma’s risk management and
internal control framework.
The Committee will continue to receive regular updates on
programme progress, oversee management’s mitigation of material
risks, and challenge the completeness and robustness of the risk and
control framework.
The key elements of our internal control framework are as follows:
–
a documented and disseminated reporting structure with clear
policies, procedures, authorisation limits, segregation of duties
and delegated authorities
–
written policies and procedures for functional areas with specific
responsibility allocated to individual managers
–
a comprehensive system of internal financial reporting that includes
regular comparison of results against budget and forecast and
a review of KPIs, each informed by management commentary
–
an established process for reviewing the financial performance
and providing support to Hikma companies and associates
together with direct support from Hikma’s finance function
–
annual budgets, updated forecasts and medium-term business
plans for Hikma that identify risks and opportunities and that
are reviewed and, where appropriate, approved by the Board
–
a defined process for controlling capital expenditure which
is detailed in the governance framework
Effectiveness
The Board is satisfied that Hikma’s systems for internal control are
in accordance with the FRC’s guidance, and have been in place
throughout the year under review and up to the date of approval of
the Annual Report and Accounts. The Board reviews the effectiveness
of these systems at least annually as part of the processes for the
Annual Report, and throughout the year when reviewing internal
controls and assurance testing outcomes as well as risk management
and internal audit reports. The Board has not identified any material
weaknesses. In making this assessment, the Board takes into account:
–
Internal audit:
the Committee receives regular reports from the
internal auditors and other third-party experts who review relevant
parts of the Group business operations, assess Hikma’s processes,
identify areas for improvement, monitor progress, and undertake
their own assessment of the risks facing Hikma
–
Internal controls and assurance:
the Committee receives regular
reports from the IC&A team, who provide assurance over various
parts of the business following a risk-based testing plan. The team
assesses Hikma’s processes, identifies areas for improvement, and
monitors remediation progress
–
Risk management:
the ERM framework provides a structure for risk
management activities to occur at all levels of the organisation,
including management of principal risks and uncertainties (detailed
on pages 84 to 88) and emerging risks. Risk reporting processes
ensure the Executive Committee and the Board are engaged in
the design and implementation of new control initiatives and
provide oversight of existing programmes
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–
Financial performance:
Hikma’s financial performance and
forecasting reports are reviewed by the Board to aid the
understanding of the underlying performance of the business,
deviations from expectations and management’s operational
challenges and responses
–
Ethics:
business integrity and ethics procedures and controls that
are led by the Compliance, Responsibility and Ethics Committee
(CREC). To ensure consistency and awareness between these
committees’ responsibilities, the Audit Committee Chair is
a standing member of the CREC
–
Governance:
our overall approach to corporate governance,
including compliance with the Code, is led by the Nomination and
Governance Committee
–
External auditor:
the regular and confidential dialogue with the
external auditor
During the year, the Committee also received updates from Hikma’s
IC&A team on:
–
the fraud prevention and detection programme, which builds on
existing practices and policies and further supports the Group’s
internal control environment with formalised controls. The
programme was launched to ensure compliance with the newly
legislated criminal offence of failure to prevent fraud, which came
into force on 1 September 2025
–
the results of internal assurance of controls
The Committee is responsible for the prevention of the financial crime
framework at Hikma, therefore as part of the review of the
Committee’s terms of reference, the responsibility to approve the
Failure to Prevent the Facilitation of Tax Evasion (FTP) Policy was
moved to the Committee from the CREC.
The Committee also maintains a programme of in-depth reviews into
specific financial and operational areas of the business. These reviews
allow the Committee to meet key members of the management team
and provide independent challenge. During 2025, the Treasury team
presented a deep dive on their organisational structure, mandate,
strategy, policies, processes, systems and controls. The Committee
deliberated with management and the Treasury team during the
presentation, gaining comfort in relation to the general control
environment surrounding the Treasury function of the Group, in
addition to the various assurance activities undertaken by internal
audit and internal controls and assurance.
Internal audit
During the year, the Committee appointed a new Chief Audit
Executive overseeing internal audit within Hikma in line with the IIA’s
Global Internal Audit Standards. Internal audit activities remain
outsourced to EY and the function maintains its independence.
There is a regular programme of interaction between the Internal
Audit function and the Committee.
During the year, and in accordance with the IIA’s Global Internal Audit
Standards, the Committee commissioned the IIA to perform an
external quality assessment of Hikma’s Internal Audit function. The IIA
presented its report to the Committee and the Internal Audit function
has begun implementing the recommended improvements, with
progress reported to the Committee on a regular basis.
EY assess each facility and the Group’s major processes on a rolling
three-year assessment cycle. For major sites, assessments are more
frequent. Management is required to respond to findings within an
agreed time period and ensure mitigation or remediation of all
high-risk findings within six months.
The Committee monitored progress on the internal audit programme
for 2025, reviewed findings and monitored management’s response to
recommended actions, and reviewed and approved the plan for 2026.
EY and management work closely together to deliver the internal audit
plan, develop action plans for points raised, and ensure that the
Committee receives appropriate and timely information. The
Committee also received updates on the IIA’s new Global Internal
Audit Standards which were published in January 2024 and became
effective in January 2025, to ensure Hikma’s timely compliance.
The Committee also assessed the effectiveness of the Internal Audit
function by reviewing its reports, progress against the 2025 plan
and meeting with internal audit without management present.
The Committee considers that EY bring significant pharmaceutical
and MENA market experience which is complemented by the
experience of other third-party experts where required and
concluded that EY continue to perform an effective internal
audit programme and remain independent.
Membership of the Committee
The Committee comprises solely independent Non-Executive
Directors, who as a whole, have competence and experience relevant
to Hikma’s business and the industry in which it operates. I am
considered by the Board to have significant recent and relevant
financial experience chiefly related to my work with other audit
committees, having been a finance director of another listed entity
and having held senior financial positions in other entities.
Biographical details of the Committee members can be found on
pages 100 and 101. The Board is satisfied that the Committee has
the resources and expertise to fulfil its responsibilities.
As Chair of the Audit Committee, I remain available to shareholders
and stakeholders should they wish to discuss any matters within this
report or under the Committee’s area of responsibility whether at the
AGM or by writing to the Company Secretary.
For and on behalf of the Audit Committee.
Douglas Hurt
Chair, Audit Committee
25 February 2026
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Corporate governance
Financial statements
Strategic report
Compliance, Responsibility
and Ethics Committee
Dear Shareholders
I am pleased to be writing to you for the first time as Chair of the
Compliance, Responsibility and Ethics Committee (CREC or the
Committee). Since my appointment to Hikma’s Board in 2022, I have
taken a keen interest in Hikma’s sustainability programme and its
impact on broader stakeholders. I’d like to thank John Castellani for his
long-standing contribution before he stepped down from the Board at
the 2025 AGM.
During 2025, the Committee continued to promote and oversee our
commitments to business integrity, compliance, sustainability,
communities and ethical conduct. This report focuses on the matters
that the Committee addressed during the year. Further details
related to the structure of our compliance, responsibility and ethics
programme are available on our website at
www.hikma.com
.
The Chair of the Audit Committee is a standing member of the CREC
and I attend discussions at Audit Committee meetings which relate to
ESG assurance and reporting. This ensures that any relevant issues
are considered by the right people within our governance structure.
Hikma’s compliance programme
ABC compliance
Our ABC compliance programme continues to perform in a highly
effective manner. The ABC programme has strong support from the
Board, the CREC and the Executive Chairman and CEO. The Chief
Compliance Officer reports directly to the Committee and the
Executive Chairman and CEO.
Commitment to integrity
The Committee and the Board are very proud of Hikma’s
commitment to high standards of business integrity. It includes
the Board’s long-standing, zero-tolerance approach to bribery and
corruption which has been demonstrated in numerous instances,
including being a member of the World Economic Forum’s Partnering
Against Corruption Initiative.
During the year, the Committee reviewed the Board Conflict of Interest
Policy and recommended it to the Nomination and Governance
Committee for approval, and reviewed Hikma’s procedures for the
oversight and approval of related party transactions.
Codes of Conduct
The Committee continues to oversee the development and promotion
of Hikma’s Code of Conduct, which embodies the important moral
and ethical values that are critical to the Group’s success. The Code of
Conduct guides all the Committee’s activities and is the key reference
point for all our colleagues.
Our Supplier Code of Conduct reinforces our commitment to
integrity and transparency in all our business dealings, as it sets
out the highest ethical standards we expect from all our suppliers.
The Codes of Conduct referred to above can be found at
www.hikma.com/who-we-are/codes-and-standards
Speak up
The Committee receives regular reports on issues identified through
our speak up channels, which provide both internal and external
stakeholders a resource to raise concerns about suspected
misconduct confidentially and anonymously. Our procedures require
that all reports received via our speak up channels are investigated by
senior and independent employees.
Deneen Vojta
Chair, Compliance,
Responsibility and
Ethics Committee
Letter from the Chair
Activities in 2025
–
Supported the transition of the Committee Chair following
the retirement of John Castellani at the end of the 2025 AGM
–
Continued to monitor Anti-Bribery and Corruption
(ABC) compliance developments, our speak up programme
and business integrity, supported by regular reports from
independent third parties
–
Approved Hikma’s refreshed sustainability framework and
clarified responsibilities for sustainability oversight and
reporting among the Board Committees, including updates
to the Committee terms of reference
–
Monitored the delivery of our social responsibility programme
Priorities for 2026
–
Continue to oversee the development of Hikma’s
sustainability framework, including the development
of targets and key performance indicators
–
Continue to monitor and strengthen our compliance
framework, policies and procedures, including
compliance with updated guidance on modern slavery
Doing the right thing by
conducting business with
integrity, transparency
and in accordance with the law.”
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The Committee is satisfied that all speak up reports raised in 2025
were investigated and appropriately addressed, and that our speak
up procedures remain effective and compliant with applicable laws.
The overall level of speak up reports received is within the normal
range for an organisation of our size.
Speak up matters are reported and considered as necessary, as part
of my regular reports to the Board.
Training
During the year, we continued to oversee training programmes for the
Code of Conduct, ABC, speak up, anti-money laundering, failure to
prevent the facilitation of tax evasion, data privacy and protection,
antitrust and related matters, both virtually and in person. Hikma has
launched expanded training programmes on trade sanctions and
modern slavery and human trafficking which have been undertaken
by colleagues whose roles require in-depth training on these matters.
Internal auditing and monitoring
The Committee receives regular updates on the monitoring
programme conducted by the Hikma Compliance team. In addition,
the Committee retains independent third parties to conduct periodic
and recurring audits of our governance and transparency and the
compliance programme and related activities.
Ethics
Social Responsibility
The Committee oversaw, encouraged and supported the social
responsibility programme, which is clearly linked to our founder’s
desire to improve lives, particularly through health and educational
development opportunities for the least privileged. The sustainability
section of this Annual Report provides a detailed assessment of
our efforts in relation to social responsibility and is available on
pages 40 to 79.
Ethical issues
The Committee oversaw Hikma’s response to ethical issues arising
during the year. There are no matters to report.
Modern slavery
Hikma is committed to taking the required actions to identify, prevent
and mitigate modern slavery in the form of forced or compulsory
labour and human trafficking in any of its businesses, operations
or supply chains across the globe.
To enhance oversight, risk assessment, and due diligence efforts in
preventing and addressing modern slavery risks in our supply chain,
Hikma’s Modern Slavery Task Force (MS Task Force), comprising
members from the Legal, Procurement, People (Human Resources)
and Compliance teams, collaborates to review and enhance our risk
assessment and due diligence process, ensure their effective
implementation, and develop clear strategies for addressing potential
instances of modern slavery, should they arise.
Key measures undertaken this year in support of this goal include:
–
enhancing third-party due diligence processes and procedures
to improve identification of modern slavery risks within our
supply chain
–
continuing our partnership with EcoVadis, a leader in
sustainability ratings, to assess our main supplier base for any
risk of modern slavery or human rights abuses
–
raising awareness of modern slavery risks across our workforce by
conducting multiple trainings and workshops
–
engaging with supply chain partners and the operational part of
our business if and when any risk of modern slavery is identified
Hikma’s modern slavery statement is available at
www.hikma.com
.
Sustainability
In 2025, the Committee reviewed the results of an externally
facilitated double materiality assessment and approved Hikma’s
revised sustainability framework. The Committee received regular
updates on Hikma’s sustainability strategy and related activities,
including those related to water management, emissions and driving
a sustainable supply chain. A particular focus during the year was
the approach to meeting Hikma’s 2030 carbon reduction goals and
providing input to the various projects and initiatives required. The
Committee also monitored developments in reporting and disclosure
requirements and received updates on our preparations to report
against the Corporate Sustainability Reporting Directive (CSRD).
More information on our sustainability activities can be found on
pages 40 to 79.
Regulations
The General Counsel attends all Committee meetings and reports to
the CREC on relevant matters that arise, including pertinent changes
to the regulatory landscape.
Antitrust, anti-money laundering (AML) and trade sanctions
The General Counsel oversees Hikma’s compliance with the
antitrust, AML and trade sanctions legislation, among other matters.
The General Counsel has created procedures for the management
of these matters which are reviewed and approved by the CREC.
Criminal Finances Act and the Economic Crime and Corporate
Transparency Act (ECCTA)
The General Counsel, in collaboration with other departments, is
responsible for ensuring compliance with the Criminal Finances Act
and the ECCTA. At the end of 2025, the terms of reference for each
Board Committee were reviewed and the responsibility to approve the
Failure to Prevent the Facilitation of Tax Evasion (FTP) Policy was
moved from the Committee to the Audit Committee, which is
responsible for the prevention of the financial crime framework at
Hikma. The Audit Committee will coordinate investigations or
violations related to FTP with the Committee.
Data protection
The General Counsel is responsible for Hikma’s data protection
policies which are designed to ensure compliance with all
applicable legislation.
Related party transactions
During the year, the Committee reviewed our procedures on related
party transactions. All related party transactions are reviewed and
approved in accordance with applicable laws.
I remain available to discuss with shareholders any matter within this
report or under the Committee’s area of responsibility, by writing to
the Company Secretary.
For and on behalf of the Compliance, Responsibility and
Ethics Committee.
Deneen Vojta
Chair, Compliance, Responsibility and Ethics Committee
25 February 2026
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Corporate governance
Financial statements
Strategic report
Wider employee population
The Committee continued to consider the wider workforce context in
its decision‑making, engaging directly with employees through site
visits across the Group to gain firsthand insight into workplace culture
and priorities. These interactions helped ensure our remuneration
approach remains transparent, responsive and aligned with our
broader reward philosophy. We supported the further development
of the Group’s career and talent framework to strengthen growth,
development and retention, ensuring coherence between executive
reward and the broader employee experience.
Executive leadership changes
On 15 December 2025 we announced that Riad Mishlawi stepped
down as CEO, with Said Darwazah, Executive Chairman, assuming the
role of CEO. To support a structured transition, the Board appointed
Khalid Nabilsi, CFO, to the Board as an Executive Director with effect
from the same date. The Committee considered the remuneration
implications in line with Policy, including any loss‑of‑office payments
and treatment of in‑flight incentives for the former CEO and the
ongoing package for the CFO. No additional remuneration was
given to the Executive Chairman upon appointment as CEO. The
Committee updated the CFO’s remuneration arrangements to ensure
full alignment with the Policy, including the deferral of a portion of any
bonus into shares, reinforcing the link between reward and long‑term
shareholder value. Further details are provided on page 119.
As outlined on page 5, effective 26 February 2025, Said Darwazah will
step down from his Executive Chairman role to focus fully on his CEO
responsibilities. No remuneration changes will take effect on this date,
with any updates already reflected in the 2026 base pay review.
Victoria Hull will be appointed Non‑Executive Chair and will receive a
fee of £370,000. Douglas Hurt will be appointed Senior Independent
Director and receive the associated fee. Khalid Nabilsi will become
Deputy CEO, North America and Europe, and Mazen Darwazah
Deputy CEO, MENA, in addition to his role as Executive Vice
Chairman. There will be no remuneration changes for either role as
of 26 February 2025, with the 2026 base pay increases and Khalid’s
Board‑appointment changes already disclosed elsewhere.
Executive Directors 2026 salary review
We conducted a comprehensive assessment of Executive Director
salaries with a focus on market competitiveness and strategic
alignment. The benchmarking peer group was refreshed to ensure it
continues to reflect Hikma’s scale, geographic footprint and
complexity. The peer group looks at both global pharmaceutical peers
and FTSE peers of a similar size. Following this review, modest salary
increases were approved for Executive Directors, set below the
average increases awarded to the wider employee population. This
balances market competitiveness with restraint and remains aligned
with our remuneration philosophy and shareholder expectations.
Arrangements for the former Chief Executive Officer
As announced in December 2025, aſter 30 years at Hikma and just
over two years as CEO Riad Mishlawi stepped down as CEO and as an
Executive Director on 15 December 2025 by mutual agreement. He will
remain an employee until 14 December 2026 and will receive the same
salary and benefits as he received in 2025 (excluding housing)
through to 14 December 2026. A one‑off statutory payment of €250k
was made as legally required under the Portuguese Labour Code in
relation to his termination from Hikma Farmaceutica (Portugal) SA.
Mr Mishlawi was eligible for an annual bonus for 2025 and, aſter
detailed consideration, the Committee applied discretion to adjust
the formulaic outcome of the bonus downwards to an award of 10% of
maximum, of which 50% will be paid in cash and 50% will be deferred
into shares. Deferred bonus awards previously granted to him will
continue to vest under their original terms. He will not be eligible for
a bonus in respect of 2026.
Dear Shareholders
On behalf of the Remuneration Committee (the Committee), I am
pleased to present the 2025 Directors’ Remuneration Report. This is
my first letter as Committee Chair, following my appointment and the
handover from Nina Henderson, to whom the Board and I extend our
thanks for her stewardship. This letter summarises the Committee’s
key decisions and outcomes during the year, the context for those
decisions, and our priorities for the year ahead.
Hikma’s Remuneration Policy
The Committee ensures that Hikma’s Remuneration Policy (Policy)
continues to support the execution of the Group’s strategy, drive
long‑term sustainable performance and align leadership reward with
shareholder value. At the 2025 AGM, shareholders strongly supported
the implementation of the Policy (99.55% in favour) continuing the
trend of high shareholder support (the current Policy was approved
with 98.24% in favour at the 2023 AGM).
In line with the triennial cycle, the Committee conducted a full review
of the Policy. Having considered strategic priorities and stakeholder
feedback, we concluded that the existing framework remains
appropriate, with performance awards linked to delivery of the
business plan and corporate strategy. No changes are proposed for
2026 and the existing Policy will be submitted for shareholder
approval at the 2026 AGM. We will continue to consider our evolving
strategic priorities and monitor market developments, regulation
and investor guidance, and will consult with shareholders should
changes be contemplated in the future.
Committee’s activities during the year
Throughout the year, the Committee focused on ensuring that
outcomes reflect performance and that executive interests remain
aligned with those of shareholders and wider stakeholders. No malus
or clawback provisions were exercised during the year. We reviewed
incentive outcomes against pre‑set financial, strategic and ESG
objectives; reassessed the composition and relevance of the
benchmarking peer group for Executive Directors; updated our
Terms of Reference; and considered wider workforce pay, engagement
insights and stakeholder expectations. The Committee also
determined the leaving arrangements for the former Chief Executive
Officer (CEO), ensuring these were in line with the Policy, and
established the Chief Financial Officer’s (CFO) remuneration upon
appointment to the Board.
Remuneration Committee
Cynthia Flowers
Chair, Remuneration
Committee
Letter from the Chair
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The Committee also exercised its discretion in relation to his LTIP
awards. His 2023 LTIP award will continue to vest subject to original
performance conditions and timing. The 2024 LTIP award will be time
pro‑rated for service during the performance period and will vest
subject to performance in the normal manner. His 2025 LTIP award will
lapse and he will not receive an LTIP award in 2026 and post‑cessation
shareholding requirements will apply for two years. The Committee
considers these outcomes to be fair and reflective of his contribution
to Hikma over recent years.
2025 performance outcomes
Annual bonus
Bonus outcomes for the year reflect performance against financial
and strategic objectives. In addition to formulaic results, the
Committee applied a holistic assessment to confirm that payments
were appropriate and justified. The Committee exercised its discretion
to the departing CEO’s bonus as described above.
Financial outcomes
During 2025 the Group delivered performance across all three
businesses, including Group core revenue of $3,349m (2024: $3,156m)
and core operating profit of $741m (2024: $719m). Both results are
within the guidance we issued to the market, notwithstanding that we
tightened our core operating profit range in 2025 to $730m to $750m
(previously $730m to $770m).
Variations in performance between the Group and MENA are
appropriately reflected in the bonus outcomes, for the Executive
Chairman and Executive Vice Chairman.
Strategic outcomes
Objectives for the Executive Chairman included strengthening
leadership and establishing a Strategic Execution function to drive
delivery of key priorities. While progress was made in these areas,
further development is required to achieve the Board’s expectations.
Additional objectives for the Executive Vice Chair related to global
R&D, portfolio optimisation and returns on major investments in
MENA; these were completed in the year. The Executive Directors
collectively set the strategic direction for carbon reduction and
commenced delivery of supporting programmes demonstrating
Hikma’s commitment to protecting the environment.
The formulaic outcome results in a bonus outcome of 45.6% of
maximum for the Executive Chairman and 73.3% of maximum for the
Executive Vice Chairman. Half of these amounts will be deferred into
shares in line with the Policy. The Committee considered the formulaic
outturn in the context of the external environment and shareholder
experience, and considered the outcome to be fair and therefore did
not exercise discretion to vary the amounts for the Executive
Directors. As mentioned above, the Committee exercised discretion
to reduce the vesting of the former CEO’s bonus down from 49.9% to
10% of maximum.
2025 bonus outcomes
The total 2025 incentive payments, as a percentage of maximum,
for the Executive Directors are summarised in the following table.
The Committee exercised its discretion to reduce the former CEO
outcome and as a result, the payments correlate well to the Group’s
performance and shareholder returns. The CFO did not receive a
bonus for the period from his appointment to the Board on
15 December to the end of the year for either his CFO or Board role.
2025
2024
Cash and deferred shares
Cash and deferred shares
Executive Chairman
45.6%
73.4%
Former CEO
1
10.0%
74.2%
Executive Vice Chairman
73.3%
77.8%
1.
Reduced from 49.9% to 10% at the discretion of the Committee
Details of the calculation of these payments are included on pages
135 to 137. These amounts will be delivered as 50% cash and 50%
deferred into shares for a period of three years. Malus and clawback
provisions apply.
2023 Long term incentive (LTI) vesting
The long‑term incentives granted in 2023 had a performance period
from 1 January 2023 to 31 December 2025. In 2025, the Committee
reviewed the performance measures and replaced the diversity
metric with a succession‑planning metric. This refinement better
supports leadership continuity and reflects the evolving US
environment around DEI‑linked incentives – an important
consideration given our US revenue exposure. The Committee
confirmed that, had the previous metric been retained, vesting
outcomes would have been broadly similar; the change therefore
does not disproportionately benefit Executive Directors
and maintains a focus on leadership pipeline and long‑term
talent readiness.
The awards will vest in 2026 at 62.56% of maximum. Further details
are on page 138.
Remuneration Policy 2026 implementation
When setting targets for the annual bonus and LTIP, the Committee
applies a structured approach. We start with the annual and
multi‑year business plans and test these against multiple reference
points – previous award trajectories, expectations across global
pharmaceutical and FTSE comparators and analyst forecasts – to
ensure measures are stretching, balanced and aligned to sustainable
long‑term value creation.
Operation of 2026 annual bonus
For 2026, the annual bonus will be assessed using a balanced
scorecard with 80% based on financial measures and 20% based on
strategic priorities. Financial measures will focus on revenue and
profit; strategic measures will capture delivery against initiatives that
support the Group’s strategy. For Executive Directors, 50% of any
bonus earned will be paid in cash and 50% deferred into shares for
three years. The maximum opportunity remains 200% of base salary
for the Executive Chairman and Executive Vice Chairman and 175%
for the Deputy CEO, US and Europe. Further detail on measures and
targets is provided on page 146.
Long-term Incentive Plan (LTIP) 2026 grants
Performance Share Plan (PSP) awards of a maximum 300% of base
salary for the Executive Chairman and Executive Vice Chairman and
250% for the Deputy CEO, US and Europe will be granted and subject
to performance conditions measured from 1 January 2026 against:
Relative TSR versus the FTSE 50–150 (excluding investment trusts)
(20%); business development and portfolio expansion (30%);
compound annual core EPS growth (30%); and strategic measures
(20%). Further details are on page 147.
Concluding remarks
The Committee remains focused on ensuring that Hikma’s
remuneration framework supports strategy delivery, reflects
performance and aligns the interests of leaders, shareholders and the
wider workforce. We will continue to prioritise strong governance, clear
disclosure and active engagement as we navigate the year ahead.
On behalf of the Committee, I would like to thank shareholders for
their continued support and constructive dialogue, and I look forward
to building on this partnership in 2026.
Cynthia Flowers
Chair, Remuneration Committee
25 February 2026
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Annual Report 2025
Corporate governance
Financial statements
Strategic report
Mazen Darwazah
5,246
32.3%
19.3%
48.4%
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1,000
0
Said Darwazah
6,541
32.4%
48.7%
18.9%
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1,000
0
21.3%
32.4%
Khalid Nabilsi
4,379
46.3%
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1,000
0
Fixed
Annual Bonus
LTIP
59%
7%
Riad Mishlawi
3,116
34%
2,000
3,000
4,000
1,000
0
100%
Khalid Nabilsi
44
2,000
3,000
4,000
1,000
0
Mazen Darwazah
3,256
37%
31%
32%
2,000
3,000
4,000
1,000
0
Said Darwazah
3,078
31%
30%
40%
2,000
3,000
4,000
1,000
0
Fixed
Annual Bonus
LTIP
Said Darwazah
% Achievement of max
46%
Pay out
$948,072
Mazen Darwazah
% Achievement of max
73%
Pay out
$1,217,045
Riad Mishlawi
% Achievement of max
10%
Pay out
$240,000
Achieved
Lapsed
Remuneration at a glance
2025 single remuneration figure ($m)
2025 annual bonus outcome
Element
Said Darwazeh
Mazen Darwazeh
Riad Mishlawi
B
Shares granted
31,679
36,171
36,371
Shares vested
100%
100%
100%
Value
912,495
1,041,884
1,047,645
C
Shares granted
18,420
14,844
18,691
Shares vested
100%
100%
100%
Value
500,523
403,353
507,887
Total value of
shares vested
1,413,018
1,445,237
1,555,532
1.
Fixed pay includes base pay, bonus and benefits
2.
The figures for Khalid represent the amounts received from his date of
appointment to the Board on 15 December 2025 to the end of the year
1.
Fixed pay includes salary for 2026 and a 10% pension contribution.
Benefits are based on the 2025 figure
2025 vesting outcomes
2026 single remuneration opportunity ($m)
During 2025, share awards vested under the prior Remuneration Policy
(EIP) under which performance criteria had to be met before
an award was granted. Element B is attributed to earnings in 2025;
Element C was attributed to earnings in the year of grant (2022).
See page 133 for details.
The performance outcome for the annual bonus reflects the business
performance and shareholder experience for the year. Maximum
achievement is 200% of salary. Delivery of the award is 50% in cash
and 50% in shares (subject to a three year holding period). Malus and
clawback provisions apply.
The following charts show the potential projected remuneration
available for 2026 at maximum opportunity (excluding the impact
of share price appreciation).
The chart below shows the remuneration outcome for the Executive
Directors for 2025 illustrating the significant proportion of remuneration
delivered as variable pay.
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0
1
2
3
4
5
6
0
100
200
300
400
500
600
Average total pay to
Executive Directors
($m)
TSR from 1 January 2014
Average Executive Director pay
Hikma Pharmaceuticals PLC TSR
2017 2018 2019 2020 2021 2022 2023 2024
2025
FTSE 100 TSR
FTSE 350 Pharmaceuticals & Biotechnology TSR
2016
2015
3.7
2.7
3.1
4.4
4.6
3.7
4.3
4.3
3.2
4.9
6.0
0
5
10
15
20
25
30
35
40
Executive Director
shareholding value
($m)
Share price
($)
Executive Director shareholding
Share price (as at year-end in US dollars)
2019
2018
2020
2021
2022
2023
2024
2025
680
782
591
21.89
26.40
34.43
30.03
422
515
571
18.75
22.77
24.95
619
20.89
551
0
100
200
300
400
500
600
700
800
Executive Director pay
($m)
Average employee cost
($)
Executive Director pay
Average employee cost
2017
2018
2019
2020
2021
2022
2023
2024
2025
55,862
53,727 53,625
62,622
53,796
62,932 63,455
65,428
0
10,000
20,000
30,000
40,000
50,000
60,000
0
1
2
3
4
5
6
67,167
3.7
2.7
3.1
4.4
4.6
3.7
4.3
4.3
3.2
Shareholder experience
TSR and total Executive pay
Value of Executive holdings
Wider workforce
Executive Director shareholding
Employee cost and average executive pay ($m)
The table below shows the alignment of executive pay to
TSR performance.
The Executive Directors’ shareholdings are significantly above the
required minimum, demonstrating their strong commitment to the Group
and alignment with shareholder interests. This substantial investment
reflects their confidence in the Group’s future and reinforces the linkage
between executive remuneration and long‑term shareholder value.
Shareholding
requirement
$000
Number
of shares
required
Current
shareholding
Actual holding
as a % of
requirement
Said
Darwazah
3,120
149,354 17,566,790
11,762%
Mazen
Darwazah
2,490
119,196
11,149,025
9,354%
Riad
Mishlawi
3,600
172,331
197,525
115%
Khalid
Nabilsi
2,383
114,089
462,164
405%
The Committee is committed to maintaining a fair and proportionate
approach to Executive Director pay. In line with this, the remuneration
of the Executive Directors remains closely aligned with the average
employee cost, ensuring that pay is balanced and reflects the broader
experience of all employees within the Group.
Hikma’s Executive Directors have substantial equity interests,
which strongly aligns their long‑term interests with shareholders.
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Financial statements
Strategic report
Remuneration Policy
Directors’ Remuneration Policy
This section of the Report sets out our Directors’ Remuneration Policy (the Policy) which was approved with 98.24% in favour at the 2023 AGM.
Following a review of the existing framework, the Remuneration Committee concluded that the current policy remains appropriate and aligned
with our strategic objectives. We are proposing to roll over our existing policy without change.
Subject to shareholder approval, the Policy will continue to take effect from the conclusion of the 2026 AGM on 23 April 2026 and apply to
Directors’ remuneration for the 2026 financial year.
Core Principles
The Remuneration Committee (the Committee) aims to ensure that the remuneration for the Executive Directors:
–
Aligns rewards with the experience of shareholders
–
Has sufficient flexibility to recruit, motivate and retain the high calibre executives needed to drive the business forward in all the markets
in which it operates
–
Focuses on long‑term sustainable performance
–
Rewards the successful delivery of Hikma’s strategy in line with its core values
–
Aligns with the approach to remuneration for the wider employees population
Rationale
The Policy is designed to:
–
Incorporate an element of longer‑term performance and investor focused metrics, aligning executive remuneration more closely with
the shareholder experience and the successful delivery of Hikma’s strategy
–
Align Hikma’s remuneration structure with peers
–
Provide more flexibility to recruit US based executives if needed
–
Focus on measures that are central to creating long‑term shareholder value
–
Include ESG specific measures
–
Be bolstered with stretching targets and a robust target setting process
The Policy is presented below
Purpose and link to strategy
Operation
Maximum opportunity
Performance metrics
Fixed Remuneration
Base salary
Provides a base level of
remuneration to support
recruitment and retention of
Directors with the necessary
experience and expertise to
deliver the Group’s strategy.
Base salaries for Executive
Directors are reviewed annually
by the Committee and changes,
if any, normally take effect from
1 January.
Salaries are set with reference to:
–
pay increases for the
general workforce
–
salaries in peer companies
from the global
pharmaceutical sector and
UK listed companies
–
company performance
and affordability
Salaries for individuals who are
recruited or promoted to the
Board may be (but are not
required to be) set below market
levels at the time of appointment,
with the intention of bringing the
base salary levels in line with the
market as the individual becomes
established in their role.
Whilst there is no maximum
salary, any increase will generally
be no higher than the average
increase for the wider workforce.
A higher increase may be made
for example where there is a
material change in role or
responsibilities, promotion, where
there needs to be an adjustment
to reflect an individuals increased
experience in the role, when pay
is materially behind market
competitive levels, or in
exceptional circumstances, with
the rationale clearly explained in
the next report to shareholders.
Not applicable.
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Purpose and link to strategy
Operation
Maximum opportunity
Performance metrics
Benefits
An appropriate package of
market competitive benefits
to ensure executives are
rewarded and focused.
Benefits may include, but are
not limited to:
– healthcare
–
school fees
–
company cars/transport (or
cash allowance)
–
life insurance
–
relocation: when relocation
is required by the Company
–
tax equalisation: where the
director becomes tax resident
in a jurisdiction as a result of
the role and to the extent that
additional taxes are paid and
related advisory fees.
As the Company operates
internationally it may be
necessary for the Committee
to provide special benefits or
allowances, for example (but not
limited to) benefits customarily
included in the country where
the Executive Director resides.
These would be disclosed to
shareholders in the annual report
on remuneration for the year in
which the benefit or allowances
were paid.
The value of benefit is based on
the cost to the Company and
there is no predetermined
maximum limit. The range and
value of the benefits offered
are reviewed periodically.
Not applicable.
Pension (or cash allowance)
An appropriate level of pension
contribution to ensure executives
are provided with a retirement
standard commensurate with
their role, whilst being in line
with the wider workforce.
The Company operates defined
contribution arrangements in
its main operational jurisdictions
and executives participate in
these arrangements. A cash
supplement in lieu of pension
may be paid provided the total
pension payment does not
exceed the maximum opportunity.
The maximum pension cash
allowance (or pension
contribution as appropriate)
in line with the predominant
pension contribution made
for the wider global workforce
which is currently 10% of salary.
Not applicable.
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Purpose and link to strategy
Operation
Maximum opportunity
Performance metrics
Performance Related Variable Remuneration
Short – Term Incentives
To provide alignment between
the successful delivery of the
short‑term annual strategic
business priorities and reward.
Executive Directors are eligible to
participate in an Annual Bonus
Plan under which annual bonus
is earned subject to the
achievement of performance
over the financial year against
targets set by the Committee at
the start of each financial year.
No bonus is payable for
performance below threshold
level, 25% for threshold and up
to 50% of maximum pays out
for on‑target performance.
Half of any bonus will normally
be deferred into an award over
shares, typically for a period of
three years. Dividend equivalents
may be accrued on deferred
shares based on dividends paid
to shareholders during the
vesting period. These may
accrue either in cash or shares
on a reinvestment basis.
Malus and clawback
provisions apply.
Maximum of 200% of salary
Performance measures and
weightings are reviewed annually
to ensure they continue to
support the achievement
of the Company’s key
strategic priorities.
Annual bonus financial targets
are set with reference to
internal plans and analyst
consensus forecasts.
The Committee has discretion
to adjust formulaic outcomes if
they are not considered to be
representative of the overall
financial performance of the
Group. Any adjustments applied
will be explained in the relevant
annual report on remuneration.
Long-Term Incentive Plan (LTIP)
To incentivise and reward
participants over the long‑term
for sustained delivery of the
business strategy and
shareholder value.
Provides longer term alignment
with the shareholder experience.
Performance share awards
may be granted. In usual
circumstances awards vest aſter
a three‑year period, subject to
the achievement of performance
targets measured over three
financial years.
Normally, vested shares are
subject to a holding period of
two years (shares may be sold
at vesting to satisfy any tax‑
related liabilities).
25% of the award value will vest
for threshold performance and
62.5% of the award value will
vest for target performance.
Dividend equivalents may be
accrued on the shares earned
from LTIP awards based on
dividends paid to shareholders
during the vesting period. In line
with the LTIP rules, dividend
equivalents may also accrue
during any applicable post‑
vesting holding period. These
may accrue either in cash or
shares on a reinvestment basis.
Malus and clawback
provisions apply.
The maximum face value of
awards relating to a financial year
of the Company will be 300%
of base salary.
Performance is measured over
three financial years.
LTIP targets are set with reference
to a range of relevant reference
points which may include
internal plans and analysts’
consensus forecasts.
The Committee has discretion
to adjust formulaic outcomes if
they are not considered to be
representative of the overall
financial performance of the
Group. Any adjustments applied
will be explained in the relevant
annual report on remuneration.
Remuneration Policy
continued
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Purpose and link to strategy
Operation
Maximum opportunity
Performance metrics
Shareholding policy
To provide alignment between
the interests of Executive
Directors and shareholders
over the longer term.
In-employment
shareholding policy
Shareholding guidelines for
all Executive Directors will be
at least 300% of salary.
Executive Directors are expected
to build up their shareholding
guideline within a 5‑year period
from their date of appointment
to the Board.
Post-cessation
shareholding policy
All Executive Directors will be
required to hold the lower of
(i) their shareholding at the date
of termination of employment;
or (ii) shares equivalent to the
minimum share ownership
guideline at that date, for a period
of two years post‑employment.
Not applicable.
Not applicable.
Notes to the Remuneration Policy table
Malus and clawback
Annual bonus and LTIP awards are subject to malus and clawback provisions that protect the Company and shareholders. Under these
provisions (including a deferred element) the Committee can reduce or cancel awards under the annual bonus and LTIP that have not yet
vested (malus) and recover the value of an award that has vested or been paid (clawback). Malus can be applied to an alternative unvested
award to satisfy the clawback of a vested award.
The Committee may apply malus and/or clawback to annual bonus and LTIP awards in circumstances which include (without limitation):
–
a material misstatement in the published results of the Group or one of its members
–
an error in assessing any applicable performance condition or target and/or the number of shares subject to an award
–
the assessment of any applicable performance condition or target and/or the number of shares subject to an award being based
on inaccurate or misleading information
–
gross misconduct on the part of the Executive Director concerned
–
an unreasonable failure to protect the interests of employees or customers of the Group
–
a breach by the Executive Director concerned of any restrictive, confidentiality or non‑disparagement covenants or other similar
undertakings contained in any agreement between the Company and the Executive Director
–
where, as a result of an appropriate review of accountability, the Committee determines that the Executive Director has caused wholly or
in part a material loss for the Group as a result of (i) reckless, negligent or wilful actions or omissions; or (ii) inappropriate values or behaviour
–
a Group member being censured by a regulatory body or suffers, in the Committee’s opinion, a significant detrimental impact on
its reputation
–
the Company or entities representing a material proportion of the Group becomes insolvent or otherwise suffers a corporate failure
–
participant having deliberately misled management, the Board, or the investor community
All of these malus and clawback provisions are applicable to annual bonus and LTIP awards. The following table summarises the normal
application of malus and clawback in respect of the incentive plans:
Application to
annual bonus
Cash bonus
Deferred share award
Clawback available for three years from date of payment
Malus/clawback available for five years from date of award
Application to LTIP
Three‑year vesting period
Two‑year holding period
Malus/clawback available for six years from date of award
Hikma’s malus and clawback provisions are designed to match the multi year timeframe over which risks typically emerge in the pharmaceuticals
sector, including post authorisation regulatory obligations and pharmacovigilance processes that can reveal issues aſter product launch.
These extended periods also reflect the long lifecycle of complex products, where manufacturing changes, safety signals and compliance
findings may arise well aſter initial awards are granted. In line with the 2024 UK Corporate Governance Code, the Committee considers these
timelines proportionate to Hikma’s global footprint and regulatory environment, ensuring appropriate accountability and shareholder protection
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Service contracts
The Committee’s policy for service contracts is:
–
a maximum 12‑month notice period applies. The Committee may in exceptional circumstances arising on recruitment allow a longer
notice period, which would in any event reduce to 12 months following the first year of employment
–
there are no contractual arrangements that would:
–
constitute liquidated damages clauses
–
guarantee a pension with limited or no abatement on severance or early retirement
–
provide for compensation for loss of office or employment that occurs because of a takeover bid
–
Service contracts can be viewed by shareholders either at the AGM or at the Company’s offices. The Company Secretary will
make arrangements upon request
Recruitment remuneration
The Committee’s normal approach to internal and external recruitment is to pay no more than is necessary to attract candidates
of the appropriate calibre and experience needed for the role from the international market in which the Company competes.
The Committee will have regard to guidelines and shareholder sentiment regarding one‑off or enhanced short‑term or long‑term incentive
payments made on recruitment and the appropriateness of any performance measures associated with an award.
The table below summarises the adjustments to the Policy with respect to recruitment of Executive Directors. Other than these potential
adjustments, other package elements would be in accordance with the main Policy elements.
Component
Policy
Maximum level
of variable
remuneration
In exceptional circumstances, solely for the year of recruitment, the maximum level of variable remuneration
available may be increased by 150% of salary to 650%.
Share buy‑outs/
replacement awards
The Committee’s policy is to not provide share buy‑outs as a matter of course. However, should the Committee
determine that the individual circumstances of recruitment justify the provision of a buy‑out, any awards will
have regard to the terms and value of the arrangements that will be forfeited on cessation of a Director’s previous
employment and will be calculated taking into account the following:
–
the proportion of the performance period completed on the date of the Director’s cessation of employment
–
the performance conditions attached to the vesting of these incentives and the likelihood of them
being satisfied
–
any other terms and conditions having a material effect on their value (lapsed value)
Any such compensation will be subject to clawback if the Director leaves the Company voluntarily within a fixed
time period determined by the Committee.
Where possible, the Committee will use existing share‑based plans to grant such awards. However, in the event
that these are not appropriate, the Committee retains the discretion to use the exception in Listing Rule 9.4.2
for the purpose of making an award to compensate the individual for amounts forfeited upon leaving a
previous employer.
Remuneration Policy
continued
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Payment for loss of office
When considering termination payments, the Remuneration Committee takes account of the best interests of Hikma and the individual’s
circumstances, including the reasons for termination, contractual obligations and the rules governing certain items of remuneration
(e.g., incentive plan rules). The Remuneration Committee will ensure that there are no unjustifiable payments for failure on termination of
employment. On an Executive Director ceasing to hold office, the Company will announce an out‑going Executive Director’s remuneration
arrangements in accordance with applicable legal requirements.
Component
Approach
Application of Remuneration Committee discretion
General
The Committee’s policy in relation to leavers can be
summarised as follows:
–
the Committee will honour Executive Directors’
contractual entitlements
–
if a contract is to be terminated, the Committee will
determine such mitigation as it considers fair and
reasonable in each case
–
if, in the normal course of events, the Executive Director
works their notice period (12 months for existing Executive
Directors) they will receive contractual compensation
payments and benefits during this time
–
in the event of the termination of an executive’s contract
and Hikma requesting the executive to cease working
immediately, the Company may make a payment in lieu of
notice equivalent to salary, pension entitlements and value
of other benefits and, on a discretionary basis and only
where it is in Hikma’s interest, a pro‑rated performance
related bonus
–
in the event of termination for gross misconduct, neither
notice nor payment in lieu of notice will be given and the
executive will cease to perform services immediately
The Company may make additional payments
where such payments are made in good faith
in discharge of an existing legal obligation
(including statutory payments that are
required in any relevant jurisdiction) or by way
of damages for breach of such an obligation;
by way of settlement or compromise of any
claim arising in connection with the
termination of an Executive Director’s office or
employment; for agreeing to non‑compete,
non‑solicitation and confidentiality clauses;
for insurance cover for a specified period
following the termination date, outplacement
services, legal fees or repatriation assistance.
Discretion to make payments in lieu of notice.
Annual bonus
Under the rules of the Annual Bonus Plan there is no
entitlement to a bonus payment if termination occurs before
the normal bonus payment date but the Committee may
exercise its discretion to pay a bonus depending on the
circumstances of the departure. If any bonus is payable it will
be made in such proportions of cash and shares, and subject to
such deferral arrangements, as the Committee may determine
and will usually be time pro‑rated to take account of the
proportion of the financial year that has elapsed on the date
the Executive Director ceases active service.
The Committee may use its discretion to:
–
determine an entitlement to
a bonus payment
–
determine that an Executive Director
is treated as ceasing employment on
the day they give or receive notice
–
disapply time pro‑rating for a good leaver
when determining any bonus payment
–
determine any applicable
deferral arrangements.
An explanation will be provided to
shareholders of the basis of any
application of discretion.
Annual bonus
(deferred shares)
The treatment of unvested deferred bonus awards on the
cessation of employment is governed by the rules of the
Deferred Bonus Plan:
–
Unvested deferred bonus awards held by a ‘good leaver’
1
will vest on the normal vesting date unless the Committee
exercises its discretion to allow vesting to be accelerated to
the date of cessation of employment or another date
–
If the relevant individual ceases employment by reason
of limb b) or c) of the definition of ‘good leaver’
1
, the
Committee may decide that their deferred bonus awards
will, instead of vesting, be exchanged for equivalent awards
over another company’s shares
–
If an individual is not a ‘good leaver’, any unvested deferred
bonus awards will lapse
–
Special rules apply in the case of death
–
Save as summarised above, awards will continue to be
subject to their original terms, including malus, clawback
and holding periods, but the Committee has discretion to
accelerate the release of awards for leavers.
Deferred bonus awards held by a ‘good leaver’
1
will normally vest and be released at the usual
time, but the Committee may use its discretion
to accelerate vesting and release of awards.
An explanation will be provided to
shareholders of the basis of any application
of discretion.
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Component
Approach
Application of Remuneration Committee discretion
LTIP
The treatment of LTIP awards on the cessation of employment
is governed by the rules of the Long Term Incentive Plan:
–
Awards held by a ‘good leaver’
1
will normally vest, to the
extent determined by the Committee under the rules
and time pro‑rated to take account of the proportion of
the performance period that has elapsed, on the normal
vesting date, unless the Committee exercises its discretion
to allow vesting to be accelerated to the date of cessation
of employment or another date and/or to disapply time
pro‑rating
–
If the relevant individual ceases employment by reason
of limb b) or c) of the definition of ‘good leaver’
1
, the
Committee may decide that their LTIP awards will,
instead of vesting, be exchanged for equivalent awards
over another company’s shares
–
If an individual is not a ‘good leaver’, any unvested LTIP
awards will lapse
–
Special rules apply in the case of death.
–
Save as summarised above awards will continue to be
subject to their original terms, including malus, clawback
and holding periods, but the Committee has discretion
to accelerate the release of awards for leavers.
Where an Executive Director is determined
to be a ‘good leaver’
1
awards will normally
vest and be released at the usual time,
subject to the relevant performance targets,
and pro‑rated for time served during
the performance period. However, the
Committee may use its discretion to
disapply time pro‑rating.
An explanation will be provided to
shareholders on the basis of any application
of discretion.
1.
An individual will be treated as a ‘good leaver’ under the rules of the Deferred Bonus Plan and the Long‑Term Incentive Plan if the termination of their employment is because of:
a.
ill‑health, injury or disability to satisfaction of Committee;
b.
the employing company ceasing to be under the control of the Company;
c.
a transfer of the undertaking, or part of the undertaking, in which the participant works to a person which is neither under the control of the Company nor a Group company; or
d.
any other reason at the discretion of the Committee.
Change in control
Component
Approach
Application of Remuneration Committee discretion
Annual bonus
The treatment of bonus is governed by the rules
of the Annual Bonus Plan and the Deferred Bonus Plan.
The Committee may determine that bonus awards for the
year during which the change of control occurs may either
continue to be determined on the basis of the whole year
or may be pro‑rated to the date of the change of control.
Any unvested deferred bonus awards will normally vest early
on the relevant corporate event.
The Committee will use its discretion to treat
the calculation of bonuses differently if there
are good reasons for doing so.
LTIP
The treatment of unvested LTIP awards is governed by the rules
of the Long Term Incentive Plan. Any unvested LTIP awards will
normally vest early on the relevant corporate event to the
extent determined by the Committee in accordance with the
rules of the LTIP, having regard to performance assessed on
such basis as the Committee considers appropriate in the
circumstances and (unless the Committee decides otherwise)
time pro‑rating.
Vested awards subject to a holding period will be released early.
The Committee will use its discretion to treat
the calculation of unvested share awards
differently if there are good reasons for
doing so.
Legacy arrangements
The Committee reserves the right to make any remuneration payments and/or payments for loss of office, including the exercise of any
discretions available to it in connection with such payments (notwithstanding that they are not in line with this policy), where the terms
of payment were agreed:
–
before the date the Company’s first Remuneration Policy came into effect
–
before this policy was approved and implemented, provided that the terms of the payment were consistent with the Remuneration Policy
in force at the time they were agreed
–
at a time when the relevant individual was not a Director of the Company and, in the opinion of the Committee, the payment is not
in consideration for the individual becoming a Director of the Company
Details of any such payments will be set out in the applicable annual report on remuneration as they arise.
For these purposes ‘payments’ includes the Committee satisfying awards of variable remuneration and, in relation to an award over shares,
the terms of the payment are ‘agreed’ at the time the award is granted.
Remuneration Policy
continued
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Remuneration Committee discretion
The Committee retains discretion in the operation and administration of the Remuneration Policy, noting that no material changes will
be made to the advantage of the Executive Directors without obtaining shareholder approval. Any use of discretion and how it was exercised
will be disclosed, where relevant, in the annual report on remuneration.
This includes (but is not limited to) the following:
–
the Executive Directors’ participation in the Company’s incentive plans
–
the timing of awards including grant, vesting and release dates
–
the form and size of awards and vesting levels within the limits set out in this policy
–
the performance measures and weighting for annual bonus and LTIP awards within the terms set out in this policy
–
the adjustment of formulaic outcomes of incentive awards where the outcomes are not reflective of overall Company performance
or aligned with shareholder and/or wider stakeholder experience
–
the settlement of any share awards in cash in exceptional circumstances where permitted by the relevant share plan rules
–
the determination of good leaver status and treatment of unvested awards in line with this policy and incentive plan rules
–
the extent to which malus and clawback should apply to any award
–
the treatment of awards in the case of a change of control, including the vesting level of LTIP awards or if awards will, instead of vesting
early, be exchanged for, or replaced with, equivalent awards over shares in another company
–
the treatment of awards in the case of a demerger or certain other corporate events including a rights issue, corporate restructuring or the
issue of special dividends, in which circumstances the Committee may, if it considers that the relevant event would materially affect the
value of the Company’s shares, adjust deferred bonus and LTIP awards or decide that they will vest and be released early
–
the amendment or replacement of performance measures and targets where it reasonably considers it appropriate to do so, provided that
the amended conditions are not materially less challenging
Differences between the policies for Executive Directors and employees, consideration of shareholder views
and consideration of conditions elsewhere in the Group
Employees were not directly consulted on the executive remuneration policy. All employees receive a salary, pension, and medical insurance
on a similar basis to the Executive Directors. Additionally, all employees participate in a cash bonus scheme, which is similar to the cash element
of the annual bonus. The Committee reviews detailed internal and summary benchmarking data and is satisfied that the level of remuneration
is proportionate across the employee grades.
Remuneration Policy table for the Chair and Non-Executive Directors
The Chair and Non‑Executive Directors’ (NEDs) fees are set by the Board under the direction of the Executive Directors having considered the:
–
pay practice in FTSE and sector peers
–
extensive travel required to undertake the role
–
significant guidance and support required from the NEDs
The Chair and NEDs do not participate in the Group’s pension or incentive arrangements. The annual fees payable to newly recruited NEDs will
follow the policy for fees payable to existing NEDs, whose fees comprise:
Component
Approach
Application of Remuneration Committee discretion
Basic fee
The Chair receives a fixed fee inclusive of all responsibilities.
Other NEDs receive an underlying fee for undertaking the duties
of a Director of Hikma, chiefly relating to Board, strategy, and
shareholder meetings. Provides a level of fees to support
recruitment and retention of the Chair and NEDs with the
necessary experience.
Whilst there is no maximum, the
practice is to remain within the
parameters of FTSE peers.
Committee
membership fee
A composite fee for taking additional responsibilities in relation to
Committee membership. Usually, NEDs are members of at least
three committees.
Committee
Chair/employee
engagement fee
The Committee Chairs undertake additional responsibilities in leading
a committee and are expected to act as a sounding board for the
executive that reports to the relevant committee. The Director
responsible for employee engagement receives a similar fee due to
the additional requirements of that role. The chairmanship fee is paid
in addition to the membership fee.
Expenses
The Company pays expenses incurred wholly in relation to the
position of the Chair and NEDs and ensures that Directors do not
incur a tax liability as a result. The Company retains discretion
to provide for an allowance structure as an alternative to the
latter payment.
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Strategic report
Illustrations of application of Remuneration Policy
The following charts show the potential projected total remuneration available for 2026 at four levels of performance: minimum, target,
maximum and maximum with assumed share price appreciation of 50% (in accordance with the Code). The impact of potential share price
appreciation is omitted from the other three scenarios:
Said Darwazah
2026
Target
Maximum
Equity
growth
Minimum
1,238
100%
1,238
1,989
46.4%
1,061
24.7%
1,238
28.9%
4,288
3,182
48.6%
2,122
32.4%
1,238
18.9%
6,541
3,182
39.1%
1,591
19.6%
2,122
26.1%
1,238
15.2%
8,132
0
Total remuneration $000
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Mazen Darwazah
2026
Target
Maximum
Equity
growth
Minimum
1,013
100%
1,013
1,587
46%
847
24.6%
1,013
29.4%
3,447
2,540
48.4%
1,693
32.3%
1,013
19.3%
5,246
2,540
39%
1,270
19.5%
1,693
26%
1,013
15.5%
6,516
Total remuneration $000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Khalid Nabilsi
2026
Target
Maximum
Equity
growth
Minimum
935
100%
935
1,266
43.5%
709
24.4%
935
32.1%
2,910
2,026
46.3%
1,418
32.4%
935
21.3%
4,379
2,026
37.6%
1,013
18.8%
1,418
26.3%
935
17.3%
5,392
Total remuneration $000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Fixed pay
Annual Bonus
LTIP
LTIP – share price appreciation Commuting
Remuneration Policy
continued
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The scenarios in the graphs are as follows:
–
fixed pay includes salary, benefits, and pension. The numbers are based on the base salary for 2026, the cost of benefits provided in 2025
and a pension contribution of 10% of base salary
–
annual bonus is shown as a percentage of base salary, with minimum, target and maximum shown as 0%, 50% and 100% respectively
of maximum opportunity
–
LTIP is shown as a percentage of base salary, with minimum, target and maximum performance shown as 0%, 62.5% and 100% of maximum
opportunity respectively
–
share price appreciation has been calculated as a 50% increase in the value of the LTIP between the date of grant and vesting
–
no dividend accrual has been incorporated in the values relating to the LTIP
Assessment of incentive outcomes
A comprehensive evaluation of the Group’s and Executive Directors’ performance ensuring the annual bonus payout and long‑term incentive
vesting are appropriate and justified.
The quality of earnings
The Committee will review the results to ensure they accurately reflect underlying performance
and take into account any exceptional items.
Executive Director leadership
The Committee carries out a formal evaluation of the CEO
Overall Group performance
This includes factors such as market share, competitor benchmarking, sustainability, people and culture,
strategic progress, stakeholder engagement, and analyst feedback.
The impact on shareholder value
The Committee considers absolute and relative shareholder return over the relevant periods including dividend payment(s)
Consider any other internal and external inputs
This includes factors such as reputation or risk‑related issues, changes in accounting standards, and input from the CRE Committee,
Audit Committee, and management functions. The Committee will also consider the impact of any external factors.
Outcome consistencies
Consider whether bonus and LTIP outcomes are consistent with performance criteria. The Committee does
not apply discretion unless there are exceptional circumstances.
Final Annual bonus and LTIP outcomes
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Corporate governance
Financial statements
Strategic report
Single total figure (audited)
The following table shows a single figure of remuneration¹ in respect of qualifying services for the 2025 financial year, together with the
comparable figures for 2024.
Director
Year
Fixed pay
Variable pay
Total
Salary
Benefits
Pension
Total fixed
Bonus and
Deferred
Shares)
Shares
vested (EIP
element B)
2,3
Total
variable
Said Darwazah
2025
1,040,000
107,917
69,138
1,217,055
948,072
912,495
1,860,567
3,077,622
2024
1,018,000
82,678
65,962
1,166,640
1,494,844
876,138
2,370,982
3,537,622
Mazen Darwazah
2025
830,000
99,747
66,850
996,596
1,217,045
1,041,884
2,258,929
3,255,526
2024
806,787
97,179
64,895
968,861
1,255,936
677,912
1,933,848
2,902,709
Riad Mishlawi
4
2025
1,147,397
576,747
114,740 1,838,884
229,479
1,047,645
1,277,124
3,116,008
2024
1,000,000
362,839
100,000
1,462,839
1,485,079
558,749
2,043,828
3,506,667
Khalid Nabilsi
5
2025
37,741
2,221
3,579
43,541
N/A
N/A
–
43,541
2024
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1.
All figures are in (USD)
2.
Share price at vesting date in 2025 was $28.80 (£21.40) and foreign exchange rate of $1.346 to £1
3.
The EIP was applicable for the period 2020–2022 and full details are provided on pages 79 to 84 of the 2019 Annual Report. The current Policy was approved at the AGM held
on 28 April 2023 and applied from 28 April 2023
4.
Riad Mishlawi stepped down as CEO on the 15 December 2025. The 2025 salary and benefits represent amounts received from the start of the year until 15 December 2025.
Details of pay and benefits received aſter this date can be found in the Payment for loss of office section on page 144
5.
Khalid Nabilsi was appointed to the Board on the 15 December 2025. The 2025 salary represents his pro‑rated base pay of $810,330 from that date to the end of the year. No bonus
was paid for the period from his appointment to the Board to the year end
Salary
Please see Chair’s letter (page 118) for commentary on salaries. The application of benefits remains unchanged and pensions are aligned
with the wider workforce under the Directors Remuneration Policy.
Executive Director
Individual
Salary
Change
2026
2025
%
Executive Chairman
Said Darwazah
$1,060,800
$1,040,000
2.0%
Former CEO
Riad Mishlawi
–
$1,200,000
n/a
Executive Vice Chairman
Mazen Darwazah
$846,600
$830,000
2.0%
CFO
1
Khalid Nabilsi
$810,330
$37,741
2.0%
1.
Khalid Nabilsi was appointed to the Board on 15 December 2025 and his base pay increased by 2% to $810,330
Benefits (audited)
Said Darwazah received transportation benefits of $79,774 (2024 $57,040) and medical benefits of $28,143 (2024: $25,638). Mazen Darwazah
received transportation benefits of $71,604 (2024: $71,604) and medical benefits of $28,143 (2024: $25,575). Social security payments made
in Jordan, that are required to be paid by Jordanian law, are not considered to be a benefit. Riad Mishlawi received a transportation allowance of
$73,621 (2024: $60,568) medical benefits of $48,097 (2024: $26,926). In 2023 he was asked to relocate to the US for a period of 2 years and
received housing support of $232,029 and tax equalisation support of $211,499. Interest on quasi loans of $7,022 and $4,479 in relation to assets
available for private use have been included in the total benefits figure. Khalid Nabilsi received transportation benefits of $1,183 and medical
benefits of $1,038. Social security payments made in Jordan, that are required to be paid by Jordanian law, are not considered to be a benefit.
Pension (audited)
Said Darwazah, Mazen Darwazah and Khalid Nabilsi have global roles and are paid in a number of locations. Pension contributions are only
made on the proportion of salary received in Jordan, where they participate in the Hikma Pharmaceutical Defined Contribution Retirement
Benefit Plan (the Jordan Benefit Plan) on the same basis as other employees. Under the Jordan Benefit Plan, Hikma matches employee
contributions made, up to a maximum of 10% of applicable salary. Riad Mishlawi received a cash allowance of 10% of base salary in lieu
of pension.
Annual report on remuneration
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Vested share awards (audited)
During 2025, the share awards in the following tables vested for Executive Directors under the prior Remuneration Policy. Under the EIP,
performance criteria had to be met before an award was granted. There were three award types under the EIP which are treated in the following
manner in respect of the single remuneration figure on page 132.
–
Element A – a cash bonus that is payable immediately and attributed to the earnings for the performance year. 2022 was the last payment
of Element A of the EIP
–
Element B – an award of shares that vests two years aſter grant subject to there being no forfeiture events and is attributed to the earnings
in respect of the year in which it vests (i.e. two years aſter being granted)
–
Element C – an award of shares that vests three years aſter grant and, due to their being no further performance requirements, is attributed
to the earnings for the performance year in the same manner as Element A
The tables below detail share awards (Elements B and C) vesting during the year ended 31 December 2025.
Said Darwazah – EIP
EIP element
Maximum number
of shares capable
of vesting
% Shares vesting
Forfeiture
Number of
shares vested
Total value
of vested shares
2
Element B
3
31,679
100%
Nil
31,679
$912,495
Element C
18,420
100%
N/A
18,420
$500,523
Total
50,099
50,099
$1,413,018
Mazen Darwazah – EIP
EIP element
Maximum number
of shares capable
of vesting
% Shares vesting
Forfeiture
Number of
shares vested
Total value
of vested shares
Element B
3
36,171
100%
Nil
36,171
$1,041,884
Element C
14,844
100%
N/A
14,844
$403,353
Total
51,015
51,015
$1,445,237
Riad Mishlawi – EIP
1
EIP element
Maximum number
of shares capable
of vesting
% Shares vesting
Forfeiture
Number of
shares vested
Total value
of vested shares
Element B
3
36,371
100%
Nil
36,371
$1,047,645
Element C
18,691
100%
N/A
18,691
$507,887
Total
55,062
74,952
$1,555,532
1.
The shares that vested for Riad Mishlawi were in respect of grants made before appointment as CEO
2.
Share price at vesting date was $ 27.17 ( £21.60 and foreign exchange rate of $ 1.258 to £1) for element C, and $28.80 (£ 21.40 and foreign exchange rate of $ 1.346 to £1) for element B
3.
Element B shares are attributed to earnings in respect of the year of vest and are included in the single remuneration figure on page 132
Policy deviation
During 2025, the Committee has not deviated from the Remuneration Policy approved by shareholders at the AGM on 28 April 2023.
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Corporate governance
Financial statements
Strategic report
2025 annual bonus performance outcome: (audited)
Readers are directed to the commentary on business performance that is included in the Chair’s letter on pages 118 to 119.
The section sets out the performance conditions and targets for 2025 and their level of satisfaction for each Executive Director.
Performance conditions – rationale and measurement
The Executive Directors shared a number of common performance conditions as detailed below. Additional individual performance conditions
are detailed for each Executive Director in their respective sections along with their weighting.
Financial measures
– Core revenue
Historically, the pricing of generic pharmaceutical products has decreased with time. The Committee is cognisant that this could lead to
declining revenue over the longer term, which could ultimately result in a declining business overall. By ensuring that a significant proportion of
performance remuneration is based on revenue, the Committee is able to ensure that the Executive Directors are focused on mitigating pricing
declines by maximising the potential of the in‑market portfolio, launching new products, and developing the pipeline.
Ultimately, the COP is a key measure of value to Hikma’s shareholders. Given the highly competitive business environment in which Hikma
operates, the Executive Directors must focus continuously on optimising Hikma’s cost base.
Strategic measures
– Sustainability
The Board remains mindful of Hikma’s environmental impact and therefore the Executive Directors were collectively tasked with driving cost
effective near‑term renewable energy projects, researching Hikma’s medium term renewable capacity, and setting the long‑term strategic
direction for carbon reduction for Hikma.
Annual report on remuneration
continued
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Performance conditions – satisfaction
Executive Chairman
Weight
Threshold
50% of salary awarded
Target
100% of salary awarded
Maximum
200% of salary awarded
Results
Achievement
% of
salary
Financial
Core revenue
30%
Target ‑10%
$2,991m
Target
$3,323m
Target +10%
$3,656m
3,349m
Target to
maximum
32.3%
Core operating
profit (COP)
50%
Target ‑10%
$682m
Target
$758m
Target +10%
$834m
741m
Threshold
to target
38.8%
Strategic
Enhancing
Strategic
Execution
10%
Strategy executed
Threshold plus
governance improved
and leadership
strengthened
Target plus R&D capability
maximised
Threshold
5.0%
Sustainability
10%
Advanced Hikma’s decarbonisation agenda by completing the Qastal 1MWp solar
installation ahead of schedule, securing continued renewable energy procurement,
and finalising its long‑term carbon‑reduction strategy. A feasibility study for
a large‑scale PV project in Jordan was also completed, strengthening the pipeline
of future emissions‑reduction initiatives.
Target to
maximum
15.0%
Total
100%
Acceptable
Good
Excellent
91.2%
Performance outcome
The above performance results in performance remuneration under the new Policy as follows (audited):
Participant
Calculation
Receive
Executive
EIP Element
Salary
Maximum
potential
(% of salary)
Application
% of salary
Value of bonus/
shares
Receive
Executive
Chairman
Cash bonus
1,040,000
100%
45.6%
$474,036
Cash now (March 2026)
Deferred
shares
100%
45.6%
$474,036
Shares deferred for a period 3 years
Total
200%
91.2%
$948,072
Note. All shares vesting are subject to continued employment and a holding period aſter vesting. These shares may not be sold until 5 years aſter grant.
Executive Chairman (audited)
In addition to the common performance conditions set out on the
previous page the Executive Chairman was set the following:
– Enhancing strategic execution
The Executive Chairman was required to:
–
strengthen leadership through appointments into key roles
–
improve strategic execution by putting in place resource and
processes to drive delivery of strategic projects.
–
identify and maximise synergies across R&D
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Financial statements
Strategic report
Performance conditions – satisfaction
Executive Vice Chairman
Weight
Threshold
50% of salary awarded
Target
100 % of salary awarded
Maximum
200% of salary awarded
Results
Achievement
% of
salary
Financial
Core revenue
12%
Target ‑10%
$2,991m
Target
$3,323m
Target +10%
$3,656m
$3,349m
Target to
maximum
12.9%
Core operating
profit (COP)
18%
Target ‑10%
$682m
Target
$758m
Target +10%
$834m
$741m
Threshold
to target
14.0%
MENA revenue
20%
Target ‑10%
$939m
Target
$1,043m
Target +10%
$1,148m
$1,088m
Target to
maximum
28.5%
MENA COP
30%
Target ‑10%
$213m
Target
$236m
Target +10%
$260m
$259m
Target to
maximum
58.7%
Strategic
Globalisation
of R&D
5%
No plan to
centralise labs
Detailed project plan to
centralise labs in place
Plan executed
Maximum
10.0%
Synergies
across business
segments
5%
Transfer of one
technology from the
US to MENA
Transfer of two
technologies from the
US to MENA
Complete the method and
process transfer of at least two
technologies from US to MENA
Maximum
10.0%
ROI of MENA
expansions
5%
ROI assessments for
70% of expansion
projects in MENA
over $5 million
ROI assessments for
100% of expansion
projects in MENA
over $5 million
ROI assessments for 100% of
expansion projects in MENA
over $5 million with clear
progress on actions
Target
5.0%
Sustainability
5%
Advanced Hikma’s decarbonisation agenda by completing the Qastal 1MWp solar
installation ahead of schedule, securing continued renewable energy procurement, and
finalising its long‑term carbon‑reduction strategy. A feasibility study for a large‑scale
PV project in Jordan was also completed, strengthening the pipeline of future
emissions‑reduction initiatives.
Target to
maximum
7.5%
Total
100%
Acceptable
Good
Excellent
146.6%
Performance outcome
The above performance results in performance remuneration under the new Policy as follows (audited):
Participant
Calculation
Receive
Executive
EIP Element
Salary
Maximum
potential
(% of salary)
Application
% of salary
Value of bonus/
shares
Receive
Executive
Vice Chairman
Cash bonus
830,000
100%
73.3%
$608,522
Cash now (March 2026)
Deferred
shares
100%
73.3%
$608,522
Shares deferred for a period 3 years
Total
200%
146.6%
$1,217,045
Note. All shares vesting are subject to continued employment and a holding period aſter vesting. These shares may not be sold until 5 years aſter grant.
Executive Vice Chairman (audited)
In addition to the common performance conditions set out on
page 134, the Executive Vice Chairman was set the following
performance conditions:
Financial measures
– MENA revenue and COP
The Executive Vice Chairman is responsible for this region. The
Committee considered financial metrics to be the best method
of ensuring delivery of the strategy that could be measured in an
objective manner that is readily understandable by investors.
Measured by audited MENA revenue compared to target MENA
revenue for the year ended 31 December 2025 and by audited
MENA COP compared to target MENA COP for the year ended
31 December 2025.
Strategic measures
– Globalisation of R&D
To maximise synergies across R&D, the Executive Vice Chairman
was required to deliver centralised R&D capability across the Group.
Measured by the capability to provide centralised extractable and
leachable testing services for the Group.
– Synergies across business segments
The Executive Vice Chairman was asked to complete the transfer of at
least two technologies from the USA to Jordan to optimise utilisation
of production capacity and capability. Measured by the number of
technologies transferred
– ROI of MENA Expansions
To support value creation in the region, the Executive Vice Chairman
was set the objective of assessing the ROI of all projects above
an investment value of $5m and to track progress against these.
Measured by the proportion of assessments carried out and the
achievement of key milestones.
Annual report on remuneration
continued
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Performance conditions – satisfaction
Former CEO
Weight
Threshold
50% of salary awarded
Target
100% of salary awarded
Maximum
200% of salary awarded
Results
Achievement
% of
salary
Financial
Core revenue
30%
Target ‑10%
$2,991m
Target
$3,323m
Target +10%
$3,656m
$3,349
Target to
maximum
32.3%
Core operating
profit (COP)
50%
Target ‑10%
$682m
Target
$758m
Target +10%
$834m
$741m
Threshold
to Target
38.8%
Strategic
Enhancing
Strategic
Execution
8%
Strategy executed
Threshold plus
governance improved
and leadership
strengthened
Target plus R&D
capability maximised
Threshold
8.0%
1%
Transfer of one
technology from
the US to MENA
Transfer of two
technologies from
the US to MENA
Complete the method and
process transfer of at least two
technologies from US to MENA
Maximum
2.0%
1%
Compounding
business plan
in place and
2025 revenue
growth <10%
Compounding business
plan in place and
2025 target revenue
growth achieved
of 20%
Compounding business
plan in place and maximum
2025 revenue growth
achieved of 40%
Target
1.0%
Globalisation
of R&D
2.5%
No plan to
centralise labs
Detailed project plan to
centralise labs in place
Plan executed
Maximum
5.0%
2.5%
R&D operations
continue to
function separately
Project plan in place
to centralise selected
R&D functions
Project plan executed
Maximum
5.0%
Sustainability
5%
Advanced Hikma’s decarbonisation agenda by completing the Qastal 1MWp solar installation
ahead of schedule, securing continued renewable energy procurement, and finalising its
long‑term carbon‑reduction strategy. A feasibility study for a large‑scale PV project in Jordan
was also completed, strengthening the pipeline of future emissions‑reduction initiatives.
Target to
maximum
7.5%
Total
100%
Acceptable
Good
Excellent
99.7%
Performance outcome
The Remuneration Committee exercised its discretion to adjust the formulaic outcome above downwards to an award of 20% of target (audited):
Participant
Calculation
Receive
Executive
Policy element
Salary
Maximum
potential
(% of salary)
Application
% of salary
Value of bonus/shares
Receive
CEO
Cash bonus
$1,200,000
100%
10%
$120,000
Cash now (March 2026)
Deferred
shares
100%
10%
$120,000
Shares deferred for a period of 3 years
Total
200%
20%
$240,000
Note. All shares vesting are subject to continued employment and a holding period aſter vesting. These shares may not be sold until 5 years aſter grant.
Former CEO (audited)
In addition to the common performance conditions set
out on page 134, the former CEO was set the following
performance conditions:
Strategic Measures
– Execution of the approved Group strategy
To support this, the former CEO was tasked with:
–
enhancing strategy execution by putting in place resource and
processes to drive delivery of strategic projects. Measured
by the establishment of capability and processes.
–
maximising operational efficiencies by transferring at least
two technologies from the USA to Jordan
–
implementing the compounding business plan measured
by the delivery of over 40% revenue growth in 2025.
– Globalisation of R&D
To maximise synergies across R&D, the CEO was required to deliver
centralised R&D capability across the Group. Measured by the
capability to provide centralised extractable and leachable testing
services for the Group.
Aſter detailed consideration, the Committee applied discretion to
adjust the formulaic outcome of the bonus downwards from 99.7%
to 20% of target resulting in an award that it considered more
appropriately reflected the Executive’s contribution over the period.
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Corporate governance
Financial statements
Strategic report
2023 Long-term incentive award vesting in respect of performance period 2023 to 2025 (audited)
The performance measures applying to awards granted in 2023 are set out below.
The Committee reviewed the LTIP performance measures in 2025 and replaced the original diversity metric with a succession‑planning metric
as highlighted in the Chair’s letter on page 119. The Committee is satisfied that, had the previous metric been retained, vesting outcomes would
have been broadly similar; the change therefore did not disproportionately benefit Executive Directors.
Measure
Rationale
Weighting
Threshold
Target
Maximum
Results
Achievement
Achievement
percentage
%
Core compound
EPS growth for
1 January 2023 to
31 December 2025
Alignment with
shareholders return
30%
5%
8%
11%
8%
Target
18.75%
Percentage of revenue
from new business
over 3 years
Developing revenue
from new business is a
key element of Hikma’s
business plan
30%
13%
16%
19%
19%
Maximum
30.00%
Relative TSR performance
compared to FTSE 50–150
(excluding investment trusts)
Alignment with
shareholders return
20%
Median
–
Upper
Quartile
Below
Median
Below
Threshold
0.00%
Succession planning
1
Ensure long‑term
leadership continuity
and strengthen future
organisational capability
10%
40%
65%
80%
67%
Target to
Maximum
7.56%
Achieve good water
management at all
Hikma’s sites in MENA
Hikma has significant
operations in water
stressed countries
in MENA.
10%
Target
6.25%
Total achievement
62.56%
Value of 2023 LTIP awards to vest in 2026
Director
Ordinary
Shares granted
Performance
outcome
Shares vesting
Shares lapsing
Said Darwazah
132,783
62.56%
83,069
49,714
Mazen Darwazah
105,233
62.56%
65,834
39,399
Riad Mishlawi
87,602
62.56%
54,804
32,798
Khalid Nabilsi
74,699
62.56%
46,732
27,967
Annual report on remuneration
continued
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Long-term incentive awards made during the year ended 31 December 2025 (audited)
On 9 April 2025, Said Darwazah and Mazen Darwazah and Riad Mishlawi received awards of performance shares under the Hikma
Pharmaceuticals plc Long‑Term Incentive Plan 2023 as a percentage of salary as outlined below. The three‑year period over which
performance will be measured is 1 January 2025 to 31 December 2027.
The performance measures for these awards are outlined below:
Measure
Rationale
Weighting
Threshold
Target
Maximum
Core compound EPS growth for
1 January 2025 to 31 December 2027
Alignment with
shareholders’ return
35%
5%
8%
11%
Percentage of revenue from
new business over 3 years
Developing revenue from new
business is a key element
of Hikma’s business plan
35%
13%
16%
20%
Relative TSR performance
compared to FTSE 50–150
(excluding investment trusts)
Alignment with
shareholders’ return
20%
Median
–
Upper Quartile
Sustainability
Good water stewardship measured by
attainment of key aspects of the ISO
46001 Water Efficiency Management
System in all manufacturing locations
verified by an independent third party
Recognition of Hikma’s
environmental impact,
particularly in regions
facing water stress
10%
Foundational
requirements
delivered at all
sites
Threshold
plus all MENA
sites deliver
targets and
measurements
and data
Target
extended to all
sites
Details of the value of these awards
1
are shown in the table below:
Executive Director
Date of grant
Award made
Grant price
2
Face value
Face value
as % salary
Said Darwazah
9 April 2025
128,501
$24.28
$3,120,004
300%
Mazen Darwazah
9 April 2025
148,270
$24.28
$2,490,011
300%
Riad Mishlawi
9 April 2025
102,554
$24.28
$3,599,996
300%
Khalid Nabilsi
3
9 April 2025
73,620
$24.28
$1,787,494
225%
1.
No award vests for performance below threshold, 25% at threshold and 62.5% at target
2.
The share price was determined by the average closing price in the five business days preceding the grant date
3.
This award was made prior to Khalid Nabilsi’s appointment to the Boar
The proportion of the awards outlined above that will vest will depend on the achievement against the performance objectives and their
continued employment. The final value that vests may be zero if the threshold performance for each of the objectives is not achieved.
The vesting outcome of the awards will be disclosed in the 2027 Annual Report.
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Corporate governance
Financial statements
Strategic report
Outstanding share awards (audited)
Hikma continued to operate the EIP with the final award being made in May 2023. The first award under the new LTIP was made on 30 May 2023.
The outstanding share awards in respect of each of the Executive Directors are:
Participant
Share scheme
Quantum
Director
Scheme
description
1,3
Type of interest
Date
of award
Date of vesting
% Salary
Shares (max)
Face value
Said
Darwazah
EIP Element C
Conditional award
30‑May‑23
30‑May‑26
35%
19,761
$364,393
LTIP 2023
2
Conditional award
30‑May‑23
30‑May‑26
235%
132,783
$2,448,519
LTIP 2024
4
Conditional award
09‑Apr‑24
09‑Apr‑27
294%
129,792
$3,054,006
Deferred
Shares 2024
4,6
Conditional award
09‑Apr‑24
09‑Apr‑27
79%
34,884
$820,821
LTIP 2025
5
Conditional award
09‑Apr‑25
09‑Apr‑28
300%
128,501
$3,120,004
Deferred
Shares 2025
5,7
Conditional award
09‑Apr‑25
09‑Apr‑28
72%
30,783
$747,411
Total
476,504
2024: 367,319
$10,555,154
$7,816,211
Riad
Mishlawi
EIP Element C
Conditional award
30‑May‑23
30‑May‑26
47%
30,749
$567,012
LTIP 2023
2
Conditional award
30‑May‑23
30‑May‑26
116%
75,339
$1,389,251
LTIP 2023
2,8
Conditional award
31‑Aug‑23
31‑Aug‑26
19%
12,263
$226,130
LTIP 2024
4 9
Conditional award
09‑Apr‑24
09‑Apr‑27
250%
71,543
$3,000,004
Deferred
Shares 2024
4,6
Conditional award
09‑Apr‑24
09‑Apr‑27
23%
11,777
$277,113
LTIP 2025
5
Conditional award
09‑Apr‑25
09‑Apr‑28
300%
Lapsed
$3,599,996
Deferred
Shares 2025
5,7
Conditional award
09‑Apr‑25
09‑Apr‑28
62%
30,582
$742,531
Total
232,253
2024: 312,687
$9,802,037
$6,682,519
Mazen
Darwazah
EIP Element C
Conditional award
30‑May‑23
30‑May‑26
46%
20,650
$380,786
LTIP 2023
2
Conditional award
30‑May‑23
30‑May‑26
234%
105,233
$1,940,497
LTIP 2024
4
Conditional award
09‑Apr‑24
09‑Apr‑27
292%
102,863
$2,420,366
Deferred
Shares 2024
4,6
Conditional award
09‑Apr‑24
09‑Apr‑27
82%
28,926
$680,629
LTIP 2025
5
Conditional award
09‑Apr‑25
09‑Apr‑28
300%
102,554
$2,490,011
Deferred
Shares 2025
5,7
Conditional award
09‑Apr‑25
09‑Apr‑28
76%
25,864
$627,978
Total
386,090
2024: 308,687
8,540,267
$6,527,911
Khalid
Nabilsi
10
EIP Element C
Conditional award
30‑May‑23
30‑May‑26
52%
22,209
$409,534
LTIP 2023
2
Conditional award
30‑May‑23
30‑May‑26
173%
74,699
$1,377,450
LTIP 2024
4
Conditional award
09‑Apr‑24
09‑Apr‑27
221%
74,477
$1,752,444
LTIP 2025
5
Conditional award
09‑Apr‑25
09‑Apr‑28
225%
73,620
$1,787,494
Total
$245,005
2024: N/A
$5,326,922
2024: $N/A
1.
The performance criteria for Element C of the EIP are assessed before a grant is considered
2.
The face value is calculated as the monetary value of the award at the point of grant converted to the number of shares using the 30‑day average share price to the 31 December
of the performance year. The 30 day average share price used for awards granted in 2023 was $18.44(£15.15). The actual value received by Executive Directors under the share
incentive arrangements is dependent upon the share price of Hikma at the time of vesting and the satisfaction of performance criteria
3.
The minimum value of the awards at vesting will be the share price on the day of vesting multiplied by the number of shares vesting. If the Executive Director leaves employment
during the vesting period, the normal position is that zero shares vest
4.
The face value was determined by the average closing price in the five business days preceding the grant date, $23.53(£18.64)
5. The face value was determined by the average closing price in the five business days preceding the grant date, $24.28(£18.81)
6.
The deferred shares granted in 2024 relate to the 50% of the 2023 annual bonus deferred into shares
7.
The deferred shares granted in 2025 relate to the 50% of the 2024 annual bonus deferred into shares. Khalid Nabilsi did not have deferred shares prior to his appointment to the Board.
8.
The LTIP award granted to Riad Mishlawi on 31 August 2023 represented an exceptional award on his appointment to the position of CEO
9.
The original grant to Riad of 124,497 shares has been prorated to 15 December 2025 when he stepped down as CEO. 55,954 shares lapsed
10. The LTIP awards granted to Khalid Nabilsi were prior to his appointment to the Board
Annual report on remuneration
continued
140
Hikma Pharmaceuticals PLC |
Annual Report 2025
The applicable share prices for Hikma during the period under review were:
Date
Market price
(Closing price)
1 January 2025
2,014p
31 December 2025
1,550p
2025 Range (low to high)
1,503p to 2,340p
25 February 2026
1,652p
Dilution
In accordance with the guidelines set out by the Investment Association applicable in 2025, Hikma can issue a maximum of 10% of its issued
share capital in a rolling ten‑year period to employees under all its share plans and a maximum of 50% of this (representing 5% of issued share
capital) for discretionary share plans. The following table summarises the current level of dilution resulting from Hikma’s share plans since 2016:
Type of plan
Granted in a
rolling ten‑year
period
Granted during
the year
Discretionary Share Plans (5% Limit)
2.87%
0.68%
Director share interests (audited)
Said Darwazah, Mazen Darwazah and Ali Al‑Husry are Directors and shareholders of Darhold Limited. Darhold holds 60,000,000 Ordinary
Shares in Hikma. The table below breaks down their shareholdings in Hikma by shares effectively owned through Darhold and shares held
personally or by connected people as at 31 December 2025. The cancellation and issuance of shares in Darhold and Hikma, as well as changes
in the number of Hikma shares held by Darhold, can lead to a degree of variation in the ‘Effective Hikma shares’.
Darhold
Personal
Director
Interest in
Darhold
Effective
Hikma shares
Shares
(incl. connected
people)
Total
shareholding
Said Darwazah
1
26.76%
16,059,224
1,507,566
17,566,790
Mazen Darwazah
2
15.50%
9,301,788
1,847,237
11,149,025
Ali Al‑Husry
3
8.32%
4,993,601
1,215,875
6,209,476
1.
Said Darwazah holds his shares in Darhold Limited through a family trust
2.
Mazen Darwazeh holds his shares in Darhold Limited through a family trust
3.
Ali Al‑Husry holds his shares in Hikma and Darhold Limited through a family trust
The share price used to calculate whether the shareholding requirements have been met is the price on 31 December 2025 of £15.50 and foreign
exchange rate of $1.3477 to £1 on the same date.
The following table sets out details of the Directors’ shareholdings in Hikma as at 31 December 2025 and, where there are shareholding
requirements, whether these have been met:
Ownership requirements
Total
Scheme Interests
Total
Director
Percentage
of salary
Number
of shares
Requirement
fulfilled?
Shares
owned
2
Awards subject
to performance
conditions
3
Awards not subject
to performance
conditions
6
Share
interests
Said Darwazah
1
300%
149,354
Yes
17,566,790
391,076
85,428
18,043,294
Riad Mishlawi
8
300%
172,331
Yes
197,525
159,145
73,108
429,778
Mazen Darwazah
2
300%
119,196
Yes
11,149,025
310,650
75,440
11,535,115
Khalid Nabilsi
300%
114,089
Yes
462,164
222,796
22,209
707,169
Ali Al‑Husry
4
N/A
N/A
N/A
6,209,476
N/A
N/A
6,209,476
John Castellani
5
N/A
N/A
N/A
3,500
N/A
N/A
3,500
Nina Henderson
7
N/A
N/A
N/A
7,100
N/A
N/A
7,100
Cynthia Flowers
N/A
N/A
N/A
1,100
N/A
N/A
1,100
Douglas Hurt
N/A
N/A
N/A
4,500
N/A
N/A
4,500
Deneen Vojta
N/A
N/A
N/A
1,000
N/A
N/A
1,000
Laura Balan
N/A
N/A
N/A
3,500
N/A
N/A
3,500
Victoria Hull
N/A
N/A
N/A
5,991
N/A
N/A
5,991
1.
Said Darwazah holds his shares in Darhold Limited through a family trust, in which he has a beneficial interest
2.
Mazen Darwazah holds his shares in Darhold Limited through a family trust, in which he has a beneficial interest
3.
This includes the LTIPs under the 2023 Remuneration Policy
4.
Ali Al‑Husry holds his shares in Hikma and Darhold Limited through a family trust, in which he has a beneficial interest
5. John Castellani stepped down from the Board on 24 April 2025
6. This includes element C awards made under the EIP (see page 133) and deferred shares under the annual bonus plan of the current remuneration policy
7.
Nina Henderson stepped down from the Board on 31 December 2025
8.
Riad Mishlawi stepped down as CEO on 15 December 2025
There have been no changes in the interests of the Directors in the shares of Hikma between 31 December 2025 and the date of this report.
141
Hikma Pharmaceuticals PLC |
Annual Report 2025
Corporate governance
Financial statements
Strategic report
Director share interests (audited) continued
The following table sets out the changes in the share interests of Directors during the year under review and up to the date of this report.
Other than as detailed in the table, the Directors’ share interests in Hikma did not change during the period.
Director
Date
Event
Number of shares
Said Darwazah
25/02/2025
Vesting of 2022 EIP Element C. Retained all Shares
18,420
Said Darwazah
30/05/2025
Vesting of 2023 EIP Element B. Retained all Shares
31,679
Said Darwazah
11/06/2025
Market Purchase of shares
400,000
Said Darwazah
11/07/2025
Market Purchase of shares
130,000
Said Darwazah
06/11/2025
Hikma holding through a family trust
50,000
Said Darwazah
19/12/2025
Hikma holding through a family trust
25,000
Riad Mishlawi
25/02/2025
Vesting of 2022 EIP Element C. Retained all Shares
18,691
Riad Mishlawi
28/02/2025
Vesting of 2016 EIP Element B. Retained all Shares
19,890
Riad Mishlawi
06/05/2025
Dividend reinvestment
1,454
Riad Mishlawi
30/05/2025
Vesting of 2023 EIP Element B. Retained all Shares
36,371
Riad Mishlawi
22/09/2025
Dividend reinvestment
1,680
Mazen Darwazah
25/02/2025
Vesting of 2022 EIP Element C. Retained all Shares
14,844
Mazen Darwazah
30/05/2025
Vesting of 2023 EIP Element B. Retained all Shares
36,171
Mazen Darwazah
11/06/2025
Market Purchase of shares
115,000
Mazen Darwazah
08/08/2025
Market Purchase of shares
200,000
Mazen Darwazah
17/09/2025
Market Purchase of shares
14,000
Mazen Darwazah
06/11/2025
Hikma holding through a family trust
50,000
Mazen Darwazah
19/12/2025
Hikma holding through a family trust
25,000
Khalid Nabilsi
25/02/2025
Vesting of 2022 EIP Element C.
17,003
Khalid Nabilsi
30/05/2025
Vesting of 2023 EIP Element B.
28,833
Laura Balan
22/08/2025
Market Purchase of shares
3,500
Victoria Hull
08/04/2025
Market Purchase of shares
2,777
Victoria Hull
07/11/2025
Market Purchase of shares
3,214
Scheme interests (audited)
The following table sets out details of the ‘scheme interests’ of the Directors. Element C of the EIP has been included because they have service
conditions in excess of one year.
Type of interest
Share interests with
performance measures
Director
Shares
Share options
Yes
No
Said Darwazah
476,504
–
391,076
85,428
Riad Mishlawi
1
232,253
–
159,145
73,108
Mazen Darwazah
386,090
–
310,650
75,440
Khalid Nabilsi
2
245,005
–
222,796
22,209
All other directors
–
–
–
–
1.
Riad Mishlawi stepped down as CEO on 15 December 2025
2.
Khalid Nabilsi was appointed Executive Director with effect from 15 December 2025
Annual report on remuneration
continued
142
Hikma Pharmaceuticals PLC |
Annual Report 2025
Total shareholder return
Over the 10‑year period to 31 December 2025, Hikma’s TSR trailed the FTSE comparator and the sector peer groups. The Committee has
reflected this in its assessment of 2025 incentive outcomes and in the calibration of forward‑looking performance measures.
0
100
200
300
31 Dec
2015
TSR (Rebased to 100)
30 Dec
2016
29 Dec
2017
25 Dec
2020
28 Dec
2018
27 Dec
2019
31 Dec
2021
30 Dec
2022
29 Dec
2023
27 Dec
2024
31 Dec
2025
133%
176%
(17%)
Hikma Pharmaceuticals PLC
FTSE 100
FTSE 350 / Pharmaceuticals and Biotechnology - SEC
Remuneration table
The following table sets out the total remuneration, including amounts vesting under short‑term and long‑term incentive plans, for each
financial period in respect of the Directors holding the positions of Executive Chairman and CEO. The total figures for the financial years 2017
and 2016 are higher than would otherwise be the case due to a change of incentive plan. In accordance with the Regulations, the 2017 and 2016
totals include LTIPs vesting during the relevant period (which were granted three years before) and Element C of the EIP which was granted in
respect of the relevant period. The Regulations require Element C to be treated in a similar way to the annual bonus, although it is an award of
shares that will vest three years aſter grant.
Said Darwazah — Executive Chairman
Riad Mishlawi— Chief Executive Officer
Year
Total
Bonus as
% max
1
Deferred share
awards as
% max
2
Total
Bonus as
% max
1
Deferred share
awards as
% max
2
2025
$3,077,622
46%
46%
$3,116,008
10%
10%
2024
$3,537,622
73%
73%
$3,506,667
74%
74%
2023
$3,573,139
81%
81%
$1,552,833
83%
83%
2022
$3,402,078
37%
38%
N/A
N/A
N/A
2021
$4,586,119
62%
67%
N/A
N/A
N/A
2020
$4,059,653
73%
77%
N/A
N/A
N/A
2019
$4,448,934
74%
78%
N/A
N/A
N/A
2018
$4,501,217
88%
90%
N/A
N/A
N/A
2017
$3,538,646
0%
0%
N/A
N/A
N/A
2016
$6,308,238
71%
68%
N/A
N/A
N/A
1.
For the years 2016–2022 the ‘Bonus as % max’ column comprises cash under Element A of the EIP paid immediately and shares under Element C of the EIP that are released three years
aſter grant. For the years 2023–2025 the figure comprises the cash element of the annual bonus
2.
For the years 2014–2022 the ‘deferred share award as % max’ column includes Element B of the EIP, shares that vest in two years from the date of grant provided that the Executive
remains in employment and forfeiture events have not occurred. For the years 2023–2025 the figure comprises the shares element of the annual bonus deferred for 3 years
143
Hikma Pharmaceuticals PLC |
Annual Report 2025
Corporate governance
Financial statements
Strategic report
Non-Executive Directors (audited)
In December 2022, the Executive Directors reviewed the fees paid to Non‑Executive Directors and made a number of changes that came
into effect from 1 January 2023, the full details of which can be found on page 121 of the Annual Report 2022. In January 2026, the Executive
Directors reviewed the fees paid to non‑Executive Directors. The conclusion of the review was that the base fee should remain unchanged at
£90,500 but the annual fees for the Senior Independent Director increased to £25,000 (£15,000 2025), Audit Committee Chair increased to
£25,500 (£20,000 2025), the Remuneration Committee Chair increased to £25,000 (£20,000 2025), Nomination and Governance Chair to
£18,000 (£15,000 2025), the Compliance, Responsibility and Ethics Committee Chair to £25,000 (£15,000 2025) and the Workforce
Engagement Lead increased to £15,000 (£10,000 2025). These fee increases followed a benchmarking exercise to ensure Non‑Executive
Director remuneration was in line with market practice and took effect from 1 January 2026.
On 26 February 2026, Victoria Hull was appointed to the position of Non‑Executive Chair. Aſter an external benchmarking review of FTSE 100
revenue aligned peers, the Committee agreed to set her total fee inclusive of all committee responsibilities at £370,000.
Fee (all elements)
$
Taxable benefits
1
$
Total
$
Name
Board position
2025
2024
2025
2024
2025
2024
Ali Al‑Husry
Non‑Executive Director
119,349
115,632
1,435
1,329
120,784
116,961
John Castellani
2
Independent Director
48,625
147,574
10,541
17,573
59,166
165,147
Nina Henderson
3
Independent Director
136,341
166,740
13,616
10,930
149,957
177,670
Cynthia Flowers
4
Independent Director and
Remuneration Committee Chair
150,696
128,409
9,266
2,816
159,962
131,225
Douglas Hurt
Independent Director and
Audit Committee Chair
158,912
153,963
–
–
158,912
153,963
Laura Balan
5
Independent Director and
designated Director for workforce
engagement
141,701
128,409
–
–
141,701
128,409
Victoria Hull
Senior Independent Director
and Nomination and Governance
Committee Chair
172,099
166,740
–
420
172,099
167,160
Deneen Vojta
Independent Director and CREC
Chair
146,198
128,409
10,406
15,776
156,604
144,185
1.
‘Taxable benefits’ includes certain accommodation expenses for Non‑Executive Directors that are wholly related to their attendance at Board meetings and are in accordance with
normal Hikma expense policy
2.
John Castellani was an Independent Director and CREC Committee Chair until his retirement on 24 April 2025
3.
Nina Henderson was Remuneration Committee Chair and Workforce Engagement Lead until 24 April 2025, and was Independent Director until she stepped down on 31 December 2025
4.
Cynthia Flowers became Remuneration Committee Chair effective 25 April 2025
5.
Laura Balan became the designated Director for Workforce Engagement effective 25 April 2025
6.
Deneen Vojta became CREC Chair on 25 April 2025
Payments to past Directors (audited)
There were no payments made to past Directors during 2025.
Payments for loss of office (audited)
During the year, Riad Mishlawi stepped down as CEO and as an Executive Director by mutual agreement with effect from 15 December 2025
with employment ending on 14 December 2026. During this notice period, he will remain on garden leave. He will receive his normal contractual
remuneration and normal benefits and allowances during this period with the exception of housing which was paid until the end of December
2025. In determining the payments made in connection with his loss of office the Committee considered the terms of his service agreement and
the circumstances of his departure. All payments were limited strictly to statutory and contractual entitlements and to awards treated in line
with the rules of the Company’s incentive plans.
Details of the remuneration arrangements for the former CEO following cessation of employment, which were approved by the Remuneration
Committee and are in accordance with the Directors’ Remuneration Policy, are set out below.
Salary and benefits
The following payments were made for the period from 15 December 2025 to the end of the year: Salary $52,603, Bonus $10,520, assignment
expenses $9,600, transportation allowance $3,375, medical benefits $2,205, housing $10,637 relocation support $6,410 and tax equalisation
$9,696. Riad will continue to receive salary and benefits, excluding housing, as normal for the remainder of his contractual notice period to 14
December 2026 on the same terms and conditions that are currently in effect. This includes base pay, private medical cover, life assurance, car
allowance, relocation and tax return support until 14 December 2026.
Pension contributions
Pension contributions for the period from 15 December 2025 to the end of the year totalled £5,260. Pension contributions will continue to paid
up to the cessation date of 14 December 2026.
Statutory payments
A payment of € 250,280 in relation to the termination of his employment and directorship of Hikma Farmacéutica (Portugal) S.A in accordance
with the Portuguese Labor Code.
Annual report on remuneration
continued
144
Hikma Pharmaceuticals PLC |
Annual Report 2025
Annual Bonus
For the 2025 financial year, the Committee exercised discretion to adjust the formulaic outcome downwards to an award 20% of the target
bonus, amounting to $240,000. 50% of this amount is payable in cash at the normal payment date, with the remaining 50% deferred into
the Deferred Bonus Plan (DBP). The Executive is not eligible for a bonus in respect of the 2026 financial year or any future periods.
Long Term Incentive Arrangements
The Committee exercised its discretion to treat outstanding awards as follows:
2023 LTIP Award
Vesting will occur at the normal time, subject to achieving the relevant performance conditions, assessed at the time of vesting. Dividend
equivalents will be paid at vesting.
2024 LTIP Award
Vesting will occur at the normal time, subject to achieving the relevant performance conditions assessed at time of vesting, and subject to time
pro‑rating to reflect the period employed during the performance period. Dividend equivalents will be paid at vesting.
The Company’s malus and clawback Policy will continue to apply.
2025 LTIP Award
Lapsed in full and will not vest.
Deferred Bonus Plan (DBP)
The 2024 and 2025 DBP awards will continue in accordance with the DBP rules and vest at their original vesting dates, subject to malus and
clawback.
Executive Incentive Plan (EIP)
The 2023 EIP award will continue and will vest in the ordinary course on 30 May 2026, subject to plan rules. Dividend equivalents apply.
Shareholding Requirements and Holding Periods
All vested awards remain subject to applicable post vesting holding periods and to malus and clawback provisions.
The Executive is required to comply with the Company’s two year post employment shareholding requirement, retaining shares equal to 300%
of salary as permitted by the Policy The Executive will receive a contribution of up to £20,500 plus VAT for legal fees incurred in connection with
agreeing his departure terms.
The Remuneration Committee is satisfied that the payments made were fair, proportionate and fully aligned with the approved Policy, and that
no payments were made which would reward under‑performance or failure.
Terms of appointment and service
Service contracts
The details of the service contracts of the Executive Directors of Hikma in force at the end of the year under review are available for inspection
at Hikma’s registered office at 1 New Burlington Place, London W1S 2HR , were:
Executive Director
Notice period
Contract date
Unexpired term of contract
Potential termination payment
Said Darwazah
12 months
1 July 2007
Rolling contract
12 months’ salary and benefits
Riad Mishlawi
12 months
11 April 2023
Rolling contract
12 months’ salary and benefits
Mazen Darwazah
12 months
25 May 2006
Rolling contract
12 months’ salary and benefits
Khalid Nabilsi
1
12 months
15 December 2025
Rolling contract
12 months’ salary and benefits
1.
The contract for Khalid Nabilsi for his appointment to Executive Director will be effective 15 December 2025 and is under negotiation
The Executive Directors are not appointed for a specified term and, therefore, do not have an outstanding term that requires disclosure.
Letters of appointment
The Non‑Executive Directors have letters of appointment with Hikma, not service contracts, which are available for inspection at Hikma’s
registered office at 1 New Burlington Place, London W1S 2HR. Appointments are made for a period of 36 months and then reviewed.
Non‑Executive Director
Date of appointment
Notice period
Ali Al‑Husry
14 October 2005
1 month
John Castellani
1
1 March 2016
1 month
Nina Henderson
2
1 October 2016
1 month
Cynthia Flowers
1 June 2019
1 month
Douglas Hurt
1 May 2020
1 month
Laura Balan
1 October 2022
1 month
Victoria Hull
1 November 2022
1 month
Deneen Vojta
1 November 2022
1 month
1. John Castellani was an Independent Director and CREC Committee Chair until his retirement on 24 April 2025
2. Nina Henderson was Remuneration Committee Chair and Workforce Engagement Lead until 24 April 2025, and was Independent Director until she stepped down on 31 December 2025
Hikma complies with the Code requirement that all Directors be subject to election or annual re‑election by shareholders.
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Corporate governance
Financial statements
Strategic report
External appointments
Hikma recognises that Executive Directors may be invited to take up non‑executive directorships or public sector and not‑for‑profit
appointments, and that these can broaden the experience, network and knowledge of the Director, from which Hikma can benefit.
Executive Directors may accept external appointments as long as they do not lead to a conflict of interest and are allowed to retain any fees.
During the year under review, Said Darwazah received fees of $NIL (2024: $4,100) and Khalid Nabilsi received fees of $63,200 (2024: $N/A).
There were no other fees paid to Executive Directors relating to external appointments. External appointments are detailed in their Director
profiles on page 100.
Implementation of Policy
In February 2026, the Remuneration Committee reviewed the base salaries for Executive Directors and agreed an increase of 2% for the
Executive Chairman and 2% for the Executive Vice Chairman.
On appointment of the CFO to the Board on 15 December 2025, the Committee considered the responsibilities of the CFO role, internal
relativities and relevant market benchmarks in determining the package. The CFO’s base salary was increased by 2% to $810,330 and his
maximum bonus opportunity increased to 175% of salary and his maximum LTIP opportunity to 250%. These arrangements are consistent
with the Policy. Pension and benefits are aligned to those available to the wider workforce in his home market, and the CFO is subject to the
Company’s Executive Director shareholding and post‑cessation guidelines. His service contract will contain standard terms, including a
12‑month notice period.
Annual bonus design for year ending 31 December 2026
The measures and targets for the annual bonus plan will be reviewed annually by the Committee and those agreed for 2026 are:
Area
Description
Rationale
Weighting
Executive
Chairman
Executive
Vice
Chairman
and Deputy
CEO, MENA
Deputy
CEO, North
America and
Europe
Financial
Group/Division
Revenue
Historically, the pricing of generic pharmaceutical products has decreased
with time. The Committee recognises that this could lead to declining
revenue over the longer term, which could ultimately result in a declining
business overall.
By ensuring that a significant proportion of performance remuneration is
based on revenue, the Committee is able to ensure that the Executive
Directors are focused on mitigating pricing declines by maximising the
potential of the in‑market portfolio, launching new products, and
developing the pipeline.
30%
30%
30%
Group Core/
Divisional EBIT
Ultimately, core operating profit is a key measure of value to Hikma’s
shareholders. Given the highly competitive business environment in
which Hikma operates, the Executive Directors must focus continuously
on optimising Hikma’s cost base.
50%
50%
50%
Strategic
Pipeline
development
To continue Hikma’s growth the Executive Directors have been set
a number of targets regarding pipeline development. These will be
disclosed in the 2026 Annual Report
8%
8%
8%
Compliance and
governance
Strengthen accountability for governance, compliance, financial controls,
risk management, and the development of a positive speak‑up culture
6%
6%
6%
Engagement and
culture
Enhance our organisational culture by improving employee confidence in
ethical conduct, wellbeing support, and senior leadership
6%
6%
6%
1.
The financial weightings for the Executive Vice Chairman are 12% Group Revenue,18% Group Core EBIT, 20% MENA Revenue and 30% MENA Core EBIT
2.
The financial weightings for the Deputy CEO, North America and Europe are 12% Group Revenue, 18% Group Core EBIT, 20% North America and Europe revenue and 30% North America
and Europe Core EBIT
The Committee has discretion to adjust the pay out to reflect the underlying business performance and any other relevant factors. Details of
the financial and strategic targets for the year ended 31 December 2026 will be disclosed retrospectively in next year’s Annual Report on
remuneration, by which time the Board will no longer deem them commercially sensitive.
Annual report on remuneration
continued
146
Hikma Pharmaceuticals PLC |
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Long term incentive awards to be made in year ending 31 December 2026
The Committee intends to issue a Performance Share Plan (PSP) award to the Executive Directors. Under the Policy long‑term incentive
measures will be reviewed annually by the Committee and will be designed to drive Hikma business strategy and align with the delivery of
value to shareholders. It is proposed that the following targets will be set for the 2025 award and measure over the period 1 January 2025 to
31 December 2027:
Measure
Rationale
Weighting
Threshold
Target
Maximum
Core compound EPS growth
for 1 January 2025 to 31 December 2027
1
Alignment with shareholders’ return
30%
3%
6%
8%
Percentage of revenue from new business
over 3 years
Developing revenue from new business is
a key element of Hikma’s business plan
30%
15%
19%
21%
Relative TSR performance compared to
FTSE 50–150 (excluding investment trusts)
Alignment with shareholder’s return
20%
Median
–
Upper
quartile
Sustainability
To continue focus on Scope 1 and 2 CO
2
emissions, delivering a reduction from
2020 baseline
20%
Progress against CO
2
emissions
targets
It is proposed that a PSP share award of 300% is made to the Executive Chairman and Executive Vice Chairman and Deputy CEO, MENA and
that a PSP share award of 250% to the Deputy CEO, North America and Europe subject to the measures in the above table.
Shareholder approval
Annual report on remuneration (24 April 2025 AGM)
Annual report on remuneration (25 April 2024 AGM)
Remuneration Policy (28 April 2023 AGM)
Votes available
167,248,483
Votes cast
166,060,266
For
99.55%
Against
0.45%
Withheld
1,188,217
Votes available
183,621,063
Votes cast
183,617,785
For
91.44%
Against
8.56%
Withheld
3,278
Votes available
174,909,661
Votes cast
174,905,422
For
98.24%
Against
1.76%
Withheld
4,239
147
Hikma Pharmaceuticals PLC |
Annual Report 2025
Corporate governance
Financial statements
Strategic report
Director and average employee compensation change
The table below shows the percentage change in the Executive Directors and Non‑Executive Directors , benefits and bonus for the five years
between 2021 and 2025 compared with the percentage change in the average of each of those components of pay for employees (excluding
the Executive Directors).
Director and
average employee
compensation
change – salary
1
Salary
Benefits
Bonus
Average percentage change
Average percentage change
Average percentage change
2020–
2021
2021–
2022
2022–
2023
2023–
2024
2024–
2025
2020–
2021
2021–
2022
2022–
2023
2023–
2024
2024–
2025
2020–
2021
2021–
2022
2022–
2023
2023–
2024
2024–
2025
Said Darwazah
0%
0%
0%
0%
2%
(21)%
(3)%
40%
10%
31%
(17)%
(40)%
73%
(9)%
(37)%
Riad Mishlawi
2
N/A
N/A
N/A
200%
20%
N/A
N/A
N/A
99%
40%
N/A
N/A
N/A
168%
(85)%
Mazen Darwazah
5%
4%
3%
0%
3%
(30)%
(52)%
113%
45%
3%
(6)%
(15)%
30%
(8)%
(2)%
Khalid Nabilsi
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Ali Al‑Husry
3
5%
(8)%
3%
3%
3%
(64)% (100)%
0%
(69)%
10%
N/A
N/A
N/A
N/A
N/A
John Castellani
3,5
5%
(8)%
7%
3%
(67)%
(30)%
135%
(11)%
5%
(39)%
N/A
N/A
N/A
N/A
N/A
Nina Henderson
3 6
5%
(3)%
13%
3%
(18)%
(30)%
(41)%
96%
(26)%
27%
N/A
N/A
N/A
N/A
N/A
Cynthia Flowers
3
5%
(8)%
3%
3%
17%
(29)%
(24)%
45%
(72)%
236%
N/A
N/A
N/A
N/A
N/A
Douglas Hurt
3
86%
(8)%
3%
3%
3%
0%
0%
0%
0%
0%
N/A
N/A
N/A
N/A
N/A
Laura Balan
3,4
0%
0%
76%
3%
10%
0%
0%
0%
0%
0%
N/A
N/A
N/A
N/A
N/A
Victoria Hull
3,4
0%
0%
86%
12%
3%
0%
0%
0%
422%
(100)%
N/A
N/A
N/A
N/A
N/A
Deneen Vojta
3,4
0%
0%
84%
3%
14%
0%
0%
(16)%
629%
(33%)
N/A
N/A
N/A
N/A
N/A
Employees ($m)
4%
3%
1%
9%
6%
7%
3%
1%
11%
10%
9%
(10)%
20%
(13)%
10%
Growth in number
of Employees
0%
1%
2%
4%
3%
0%
1%
2%
4%
3%
0%
1%
2%
4%
3%
Average per
Employee
4%
2%
(1)%
5%
3%
0%
8%
(1)%
7%
7%
0%
(3)%
18%
(16)%
6%
Average per the
listed parent
Company
Employee
16%
11%
(29)%
36%
7%
(54)%
(39)%
6%
58%
5%
18%
(16)%
(18)%
49%
23%
1.
The current Remuneration Policy was introduced on 28 April 2023. NED fees are paid in GBP and reported in USD so an element of changes will be as a result of exchange rate differences
2.
Riad Mishlawi was appointed as CEO with effect from 1 September 2023 and therefore comparative figures are not provided
3.
Non Executive Directors do not participate in the bonus plan
4.
These NEDs were appointed during 2022
5. John Castellani stepped down on 24 April 2025
6.
Nina Henderson stepped down on 31 December 2025
Hikma’s pay review, which took effect from 1 January 2025, awarded average percentage increases in wages and salaries of 4.7% (2024: 4.5%)
for existing employees (with certain exceptions for jurisdictions experiencing very high inflation). The nature and level of benefits to employees
in the year ended 31 December 2025 were broadly similar to those in the previous year (2024: unchanged).
UK gender and CEO pay ratios
Hikma has 28 employees employed in the UK and, as a result, is exempt from gender pay and average employee: CEO pay disclosure
requirements. The small number of employees and significant diversity of roles and seniority in the UK makes meaningful gender pay
comparisons in the UK difficult. The ratio of total CEO pay to the average Group employee is 15:1 using a simple average methodology.
Hikma is committed to paying fairly and not discriminating on gender or other grounds.
Relative importance of spend on pay
The following table sets out the total amount spent in 2024 and 2025 on remuneration of Hikma’s employees and major distributions
to shareholders.
Distribution expense
2024
2025
% change
from 2024
to 2025
Employee
$654 million
$692 million
5.8%
Distributions to shareholders
1
$175 million
$185 million
5.9%
1.
The Group purchased 12,833,233 shares during 2020 at a cost of $292 million, which is excluded from the distributions to shareholders in accordance with the regulations. Those shares
are held in treasury and do not receive dividends
Annual report on remuneration
continued
148
Hikma Pharmaceuticals PLC |
Annual Report 2025
Committee membership and attendance
Members and attendance
Member
Meetings
Attendance
Nina Henderson
4
4
John Castellani
4
2
Cynthia Flowers (Chair)
8
8
Douglas Hurt
8
8
Laura Balan
8
8
Victoria Hull
4
4
Where a Director was unable to attend a meeting, their comments on the business of the meeting were shared with the Chair in advance of
the meeting.
Advice and support
The Committee is supported by senior management (the CEO, CPO, VP Total Reward and the Company Secretary) on matters relating to policy,
performance and remuneration, while ensuring that no Director is involved in decisions regarding their own remuneration. During the year, the
Committee continued to receive independent advice from Willis Towers Watson (WTW) in relation to market practice, UK corporate governance
requirements, incentive design and target setting. Fees paid to WTW for the year totalled $52,619 (2024: $112,769). The Committee is satisfied
that the WTW team providing remuneration advice do not have connections with Hikma that may impair their independence.
As part of good governance and in line with best practice, the Committee conducted a request‑for‑proposal process during the year to review
its remuneration adviser arrangements. Following this process, Farient Advisors Ltd was appointed as the Committee’s new independent
adviser, reflecting their strong credentials in executive remuneration, FTSE pay governance, and shareholder‑aligned incentive design. Fees
paid to Farient Advisors Ltd for the period totalled $101,776. The Committee is satisfied that the Farient team has no connections with Hikma
that could impair their independence.
Closing statement
We have continued to develop our approach to remuneration reporting this year and the Committee hopes that this has aided your
understanding of our Remuneration Policy and practices. Please do not hesitate to contact me if you have any questions or observations.
For and on behalf of the Remuneration Committee.
Cynthia Flowers
Chair of the Remuneration Committee
25 February 2026
149
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Annual Report 2025
Corporate governance
Financial statements
Strategic report
Other statutory disclosures
Directors’ report and Strategic report
The Directors’ report and Strategic report for the year ended
31 December 2025 comprise pages 94 to 153 and pages 1 to 93.
This report forms the management report for the purposes of the
Disclosure and Transparency Rules. Readers are asked to cross refer
to the other sections of the Annual Report to the extent necessary
to meet Hikma’s reporting obligations as follows (statements that
are not applicable have been excluded):
–
Likely future developments of Hikma: Strategic report
and the Business and financial review, pages 1 to 38
–
Related party transactions: Note 37 to the Group
financial statements, page 208
–
Going concern statement: Risk management report, page 89
–
Longer-term viability statement: Risk management report, page 90
–
Greenhouse gas emissions: Sustainability report, pages 59 to 62
–
Financial instruments and risk: Notes 2 and 30 to the Group
financial statements, pages 172 and pages 195 to 198
–
Stakeholder and S.172 Statement, pages 22 to 27
For the purposes of UK Listing Rule 6.6.1, shareholders are directed
in accordance with the following table to notes in the consolidated
financial statements:
Item
Reference
Interest capitalised and associated
tax relief
See Notes 10 and 14
on pages 186 and
179 to 181
Publication of unaudited
financial information
None
Details of long-term incentive schemes
See Note 34
on pages 201 to 205
Waiver of emoluments by Directors
None
Allotment of securities for cash,
including by major subsidiaries
None
Controlling entities/parent
undertakings of Hikma
None
Contracts of significance with
a material interest of a Director
or controlling shareholders
None
Services provided to Hikma by
controlling shareholders
None
Arrangements by which shareholders have
agreed to waive current or future dividends
See Note 29
on page 194
Controlling shareholder agreements
and associated obligations
Hikma does not
have any controlling
shareholders within
the meaning of the
UK Listing Rules
Principal activity
The principal activities of Hikma are the development, manufacture
and marketing of a broad range of generic, branded and in-licensed
pharmaceutical products. Hikma’s pharmaceutical operations are
conducted through three business segments: Injectables, Branded
and Rx. The majority of Hikma’s operations are in the MENA region,
North America and Europe. The Company does not have overseas
branches within the meaning of the Companies Act 2006 (the Act).
Hikma’s net sales, gross profit and segmental results are shown
by business segment in Note 5 to the Group financial statements
on pages 175 and 176.
Results
The reported profit attributable to shareholders of Hikma
Pharmaceuticals PLC for the year in 2025 was $402 million
(2024: $359 million).
Dividend
The Board is recommending a final dividend of 48 cents per share
(2024: 48 cents per share) bringing the total dividend for the full year
to 84 cents per share (2024: 80 cents per share). The proposed
dividend will be paid on 30 April 2026 to eligible shareholders on
the register at the close of business on 20 March 2026, subject
to approval at the Annual General Meeting on 23 April 2026.
Post-balance sheet events
On 25 February 2026, the Board authorised management to
undertake a share buyback with a value up to $250 million.
Creditor payment policy
Hikma’s policy, which is also applied by all subsidiaries and will
continue in respect of the 2026 financial year, is to settle terms
of payment with all suppliers when agreeing the terms of each
transaction and to ensure that we abide by those terms of payment.
Trade creditors of Hikma at 31 December 2025 were equivalent to
77 days’ purchases (2024: 76 days), based on Group trade payables
multiplied by 365, divided by trailing 12 months’ Group cost
of goods sold.
Political donations
Hikma’s policy prohibits the payment of political donations and
expenditure within the meaning of the Act. No payments were
made in 2025.
Research and development
Hikma’s investment in research and development (R&D) during 2025
represented 4.5% of Group revenue (2024: 4.5%). Further details
on Hikma’s R&D activities can be found on pages 9, 36 and 49.
Significant contracts
Due to the nature of Hikma’s business, members of Hikma are party
to agreements that could alter or be terminated upon a change of
control of Hikma following a takeover. However, none of these
agreements is individually deemed to be significant in terms of its
potential impact on the business of Hikma taken as a whole. The
Directors are not aware of any agreements between Hikma and its
Directors or employees that provide for compensation for loss of
office or employment that occurs because of a takeover bid. There are
no persons with whom Hikma has contractual or other arrangements,
who are deemed to be essential to the business of Hikma.
150
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Annual Report 2025
Directors
The Company’s Articles of Association (Articles) regulate the
appointment and removal of directors, as does the Companies Act
2006 and related legislation. Directors may be appointed by an
ordinary resolution passed by shareholders or by a resolution
of the Board.
It is the Board’s policy that all Directors should seek election or
re-election on an annual basis. Accordingly, Said Darwazah, Mazen
Darwazah, Victoria Hull, Ali Al-Husry, Cynthia Flowers, Douglas Hurt,
Laura Balan and Deneen Vojta will seek re-election at the 2026 AGM
and Khalid Nabilsi will seek election at the 2026 AGM.
Powers of the Directors
The powers of the Directors are determined by the Articles, the Code
and other relevant UK legislation. The Articles give the Directors the
power to appoint and remove Directors. The power to buy back, issue
and allot shares contained in the Articles is subject to shareholder
approval at each AGM. The Articles, which are available on the
website, may only be amended by special resolution of
the shareholders.
Indemnities and insurance
Hikma maintains an appropriate level of Directors’ and Officers’
insurance. The Directors benefit from qualifying third-party
indemnities made by Hikma that were in force during the year and
as at the date of signing this report. These indemnities are uncapped
in amount in relation to losses and liabilities that Directors may incur
to third parties in the course of the performance of their duties.
Workforce engagement
Laura Balan is the designated Non-Executive Director to engage with
the workforce under the UK Corporate Governance Code (the Code)
and has undertaken various workforce engagement activities,
as described on pages 24, 97 and 104. Hikma continued to operate
its existing workforce engagement mechanisms which include
intra-Group communications, social networking, an open door policy
for legitimate union representatives and the operation of share
incentive arrangements. Hikma does not discriminate against
a potential employee on grounds of disability and will make
reasonable adjustments to employ and develop disabled people.
Stakeholder engagement
Further information on the Board’s engagement with stakeholders
is detailed in our Section 172 Statement on pages 22 to 27.
Diversity disclosures pursuant to UK Listing Rule 6.6.6R
The UK Listing Rules require listed companies to state whether
they have met certain targets on board diversity and disclose in
a prescribed format information on the diversity of their board
and executive committee. The information in the table below is at
31 December 2025, which is the date selected as the reference date
within Hikma’s accounting period. The targets set out in the UK Listing
Rules are that:
–
at least 40% of the individuals on its board of directors are women
–
at least one of the following senior positions on its board of
directors is held by a woman (the Chair, SID, CEO or CFO)
–
at least one individual on its board of directors is from a minority
ethnic background
As at the reference date, the Board of Hikma meets all three
targets above.
Gender diversity
Number
of Board
members
Percentage
of the Board
Number of
senior
positions
on the Board
(CEO, CFO,
SID and
Chair)¹
Number
in Executive
Management
Percentage
of Executive
Management
Men
5
50%
2
5
62%
Women
5
50%
1
3
38%
Not specified/
prefer not to
say
–
–
–
–
–
Ethnic background
diversity
Number
of Board
members
Percentage
of the Board
Number of
senior
positions
on the Board
(CEO, CFO,
SID and
Chair)¹
Number
in Executive
Management
Percentage
of Executive
Management
White British
or other White
(including
minority-white
groups)
6
60%
1
4
50%
Mixed/Multiple
ethnic groups
–
–
–
–
–
Asian/Asian
British
–
–
–
–
–
Black/African/
Caribbean/
Black British
–
–
–
–
–
Other ethnic
group
4
40%
2
4
50%
Not specified/
prefer not to say
–
–
–
–
–
1.
The roles of CEO and Chair are currently held by one individual
Between 31 December 2025 and 25 February 2026, being the date at
which this report was signed, Nina Henderson stepped down from the
Board and Sam Park was appointed to the Executive Committee.
These changes do not affect Hikma’s ability to meet any of the targets
detailed above. Each member of the Board or Executive Management
has confirmed their gender and ethnic background to the Company
Secretary and the above data has been collated from those records.
151
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Annual Report 2025
Corporate governance
Financial statements
Strategic report
Other statutory disclosures
continued
Pre-emptive issue of shares
During the year under review, and in the period since the date of
Hikma’s Initial Public Offering on 1 November 2005, Hikma did not
issue any shares pursuant to an authority given by shareholders
at an AGM to issue shares for cash on a non-pre-emptive basis,
other than in respect of the placing undertaken on 17 January 2008.
Substantial shareholdings
As at 31 December 2025, Hikma had been notified pursuant
to sections 89A to 89L of the Financial Services and Markets Act
2000 and Rule 5 of the Disclosure and Transparency Rules of the
UKLA of the following interests in the voting rights attaching to the
share capital of Hikma:
Name of shareholder
Number of Shares
Percentage held
1
Darhold Limited
2
60,000,000
27.04%
Boston Partners FKA Robeco
Investment Management, Inc.
13,666,938
6.16%
Wellington Management Group LLP
11,556,882
5.21%
BlackRock Group
10,003,617
4.51%
1.
The percentages detailed relate to voting rights in the Company. Therefore, the Treasury
Shares have been excluded from the denominator for this calculation
2. Said Darwazah, Mazen Darwazah and Ali Al-Husry, each being a Director and shareholder
of Hikma, are shareholders and Non-Executive Directors of Darhold Limited. See page 141
for details of their interests in Darhold Limited
Between 31 December 2025 and 25 February 2026, being the date at
which this report is signed, no changes in substantial shareholdings
were notified to Hikma.
Annual General Meeting
The AGM of Hikma will be held at Sofitel St James, 6 Waterloo Place,
London SW1Y 4AN on Thursday 23 April 2026, starting at 11.00 am.
The Notice convening the meeting is given in a separate document
accompanying this document, and includes a commentary on the
business of the AGM, explains how shareholders can take part
and includes notes to help shareholders exercise their rights
at the meeting.
Hikma provides for the vote on each resolution to be by poll rather
than by show of hands. This provides for greater transparency and
allows the votes of all shareholders to be counted, including those
cast by proxy. The level of proxies lodged for each resolution is
projected onto a screen as each resolution is put to the meeting.
A ‘vote withheld’ explanation is included in the Notice.
Electronic communications
Hikma’s preference is to communicate through Hikma’s website,
rather than in paper form. Shareholders are encouraged to visit the
website to access Hikma’s Annual Reports and half-year and final
results presentations. Shareholders who wish to receive paper
communications can elect to do so using MUFG’s Investor Centre
(
www.hikmashares.com
) or through Hikma’s Registrar, MUFG
Corporate Markets.
Equity
Capital structure
Details of the issued share capital, together with movements in
the issued share capital during the year, can be found in Note 29
to the Group financial statements on page 194. Hikma has one class
of Ordinary Shares of 10 pence each (Shares) which carries no right
to fixed income. Each share carries the right to one vote at general
meetings of Hikma.
As at 31 December 2025:
Type
Nominal value
In issue
Issued
during
the year
Cancelled
during
the year
Shares
10 pence
234,719,686
–
–
No shares were issued by the Company during the year.
There are no specific restrictions on the size of a holding or on the
transfer of shares, which are both governed by the general provision in
Hikma’s Articles of Association (the Articles) and prevailing legislation.
The Directors are not aware of any agreements between holders of
Hikma’s shares that may have resulted in restrictions on the transfer
of securities or on voting rights. No person has any special rights with
regard to the control of Hikma’s share capital and all issued shares
are fully paid.
Share buyback
At the Annual General Meeting (AGM) on 24 April 2025, shareholders
gave the Directors authority to purchase shares from the market up to
a limit of 22,188,645 Ordinary Shares, being 10% of the Company’s
issued Ordinary Share capital (excluding treasury shares) as at
4 March 2025. This authority expires at the earlier of 24 July 2026
or the 2026 AGM, which is scheduled for 23 April 2026. During 2025,
no Ordinary Shares were purchased by the Company.
Below is a summary of share buyback activity undertaken by the
Company prior to 2025.
During 2022, the Company purchased and cancelled 12,499,670
Ordinary Shares.
During 2020, the Company purchased 12,833,233 Ordinary Shares
from Boehringer Ingelheim (the ‘Treasury Shares’). The Treasury
Shares are held in treasury and, accordingly, do not receive
dividends and do not exercise voting rights.
Share issuance
At the AGM on 24 April 2025, the Directors were authorised to issue
relevant securities up to an aggregate nominal amount of £7,396,215
and to be empowered to allot equity securities for cash on a non-pre-
emptive basis up to an aggregate nominal amount of £4,437,730 at any
time up to the earlier of the date of the 2026 AGM or 24 July 2026. The
Directors propose to renew these authorities at the 2026 AGM for a
further year. In the year ahead, other than in respect of Hikma’s
obligations to satisfy rights granted to employees under its various
share-based incentive arrangements, the Directors have no present
intention of issuing any additional share capital of Hikma.
Details of the employee share schemes are set out in Note 34 to
the Group financial statements on pages 201 to 205. As at 31
December 2025, the Hikma Pharmaceuticals Employee Benefit Trust
(EBT) held 1,779,538 shares. The EBT has waived its entitlement to
a dividend. Other than the EBT and the Treasury Shares, no other
shareholder has waived the right to a dividend.
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Statement of directors’ responsibilities in respect
of the financial statements
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law the Directors have prepared the
Group financial statements in accordance with UK-adopted
international accounting standards and the Company financial
statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 101 ‘Reduced Disclosure Framework’, and applicable
law). In preparing the Group financial statements, the Directors have
also elected to comply with International Financial Reporting
Standards issued by the International Accounting Standards Board
(IFRSs as issued by IASB).
Under company law, directors must not approve the financial
statements unless they are satisfied that they give a true and fair view
of the state of affairs of the Group and Company and of the profit or
loss of the Group for that period. In preparing the financial statements,
the Directors are required to:
–
select suitable accounting policies and then apply them consistently
–
state whether applicable UK-adopted international accounting
standards and IFRSs issued by IASB have been followed for the
Group financial statements and United Kingdom Accounting
Standards, comprising FRS 101, have been followed for the
Company financial statements, subject to any material departures
disclosed and explained in the financial statements
–
make judgements and accounting estimates that are reasonable
and prudent
–
prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Group and Company will
continue in business
The Directors are responsible for safeguarding the assets of the
Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s and
Company’s transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Company and enable
them to ensure that the financial statements and the Directors’
Remuneration Report comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the
Company’s website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
Directors’ confirmations
The Directors consider that the Annual Report and Accounts, taken
as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s and
Company’s position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed in the
Directors’ Report confirm that, to the best of their knowledge:
–
the Group financial statements, which have been prepared in
accordance with UK-adopted international accounting standards
and IFRSs issued by IASB, give a true and fair view of the assets,
liabilities, financial position and profit of the Group
–
the Company financial statements, which have been prepared
in accordance with United Kingdom Accounting Standards,
comprising FRS 101, give a true and fair view of the assets,
liabilities and financial position of the Company
–
the Annual Report includes a fair review of the development and
performance of the business and the position of the Group and
Company, together with a description of the principal risks and
uncertainties that it faces
In the case of each Director in office at the date the Directors’ report
is approved:
–
so far as the Director is aware, there is no relevant audit information
of which the Group’s and Company’s auditors are unaware; and
–
they have taken all the steps that they ought to have taken as a
Director in order to make themselves aware of any relevant audit
information and to establish that the Group’s and Company’s
auditors are aware of that information
The Directors’ report was approved by the Board of Directors and
signed on its behalf by:
Said Darwazah
Executive Chairman and CEO
25 February 2026
Khalid Nabilsi
Chief Financial Officer
25 February 2026
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Corporate governance
Financial statements
Strategic report
Independent auditors’ report
to the members of Hikma
Pharmaceuticals PLC
156
Consolidated income statement
162
Consolidated statement of
comprehensive income
163
Consolidated balance sheet
164
Consolidated statement
of changes in equity
165
Consolidated cash flow statement
166
Notes to the consolidated
financial statements
167
Company balance sheet
212
Company statement of changes
in equity
213
Notes to the Company
financial statements
214
Financial
statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
154
Corporate governance
Financial statements
Strategic report
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Report on the audit of the financial
statements
Opinion
In our opinion:
–
Hikma Pharmaceuticals PLC’s Group financial statements and
Company financial statements (the “financial statements”) give a
true and fair view of the state of the Group’s and of the Company’s
affairs as at 31 December 2025 and of the Group’s profit and the
Group’s cash flows for the year then ended;
–
the Group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards as
applied in accordance with the provisions of the Companies Act
2006;
–
the Company financial statements have been properly prepared in
accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, including FRS 101
“Reduced Disclosure Framework”, and applicable law); and
–
the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual
Report, which comprise:
–
the Consolidated and Company balance sheets as at
31 December 2025;
–
the Consolidated income statement for the year then ended;
–
the Consolidated statement of comprehensive income for the year
then ended;
–
the Consolidated and Company statements of changes in equity for
the year then ended;
–
the Consolidated cash flow statement for the year then ended; and
–
the notes to the financial statements, comprising material
accounting policy information and other explanatory information.
Our opinion is consistent with our reporting to the Audit Committee.
Separate opinion in relation to IFRSs as issued by the
IASB
As explained in note 2 to the financial statements, the Group, in
addition to applying UK-adopted international accounting standards,
has also applied international financial reporting standards (IFRSs) as
issued by the International Accounting Standards Board (IASB).
In our opinion, the Group financial statements have been properly
prepared in accordance with IFRSs as issued by the IASB.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities
for the audit of the financial statements section of our report. We
believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the
ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as
applicable to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit
services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in Note 32, we have provided no non-audit
services to the Company or its controlled undertakings in the period
under audit.
Our audit approach
Overview
Audit scope
–
Our audit included full scope audits of four components, an audit of
specific financial statement line items of one additional component
and audit procedures performed centrally over certain specific
material balances at locations around the Group and over central
consolidation and adjustment entities. Full scope components
account for 79% of revenue and 76% of core profit before tax.
Key Audit Matters
–
Valuation and accuracy of gross to net rebates and returns
adjustments in the US (Group)
–
Recoverability of the carrying amounts in respect of investments in
subsidiaries (Company)
Materiality
–
Overall Group materiality: $32 million (2024: $31 million) based on
5% of core profit before tax.
–
Overall Company materiality: $37 million (2024: $38 million) based
on 1% of total assets.
–
Performance materiality: $24 million (2024: $23 million) (Group) and
$27.5 million (2024: $28.5 million) (Company).
The scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional
judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest
effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters, and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The valuation of acquired intangible assets as part of the Xellia
business combination (Group) is no longer a key audit matter as this
related to a one-off transaction that occurred in 2024. The
determination of the recoverable amount of the Complex Respiratory
and Hikma Rx Cash Generating Units (CGUs) (Group) is no longer a
key audit matter as there are no impairment or impairment reversal
triggers for the Complex Respiratory CGU, and the level of headroom
for the Hikma Rx CGU is not sensitive to reasonably possible changes
in key assumptions in the current year. Otherwise, the key audit
matters below are consistent with last year.
Independent auditors’ report to the
members of Hikma Pharmaceuticals PLC
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Key audit matters
How our audit addressed the key audit matters
Valuation and accuracy of gross to net rebates and returns
adjustments in the US (Group)
Management is required to make estimates in respect of revenue
recognition, specifically the level of returns and rebates to be
realised against the Group’s revenue. The Group recorded
significant revenue deductions for the year ended 31 December
2025 and determined provisions for indirect rebates and other
allowances of $188 million, refund liability of $152 million and
chargebacks and other allowances of $320 million. We have
identified our significant risk to be focused on the indirect rebates
and other allowances, refund liabilities and other allowances within
Trade and other receivables specific to the US business. In
aggregate, these estimates are complex, material to the financial
statements and require significant estimation by the directors to
establish an appropriate provision and accordingly this was
determined to be a key audit matter.
Refer to the Audit Committee review of significant matters related
to the financial statements, accounting policies (note 2), critical
accounting judgements and key sources of estimation uncertainty
(note 3), trade and other receivables (note 19) and other current
liabilities (note 25) in the Group financial statements.
We considered the Group’s processes for making estimates in this
area and performed the following procedures:
–
we assessed the revenue recognition policy and design and
implementation of applicable controls in place around the rebates
and returns process;
–
we tested refunds, rebate payments and credit memos throughout
the year by agreeing selected transactions back to the underlying
source documentation including customer claims and settlement
information;
–
we confirmed channel inventory with major wholesalers or
performed alternative procedures where confirmations were not
received;
–
we tested management’s process and assessed the
reasonableness of the refund liability by utilising historical sales,
return rates, new product launches, entrance of new competitors,
changes to contract terms and specific information related to credit
memos in process of being issued which has been applied to the
products which could be returned to the company six months prior
to expiry or up to 12 months subsequent to expiry; and
–
we considered the historical accuracy of the Group’s estimates in
previous years and the effect of any adjustments to prior years’
provision in the current year’s results.
Based on the procedures performed, we did not identify any material
differences between our independent expectations and the balances
recorded. We also evaluated the disclosures in note 2, note 3, note 19
and note 25 which we consider to be appropriate.
Recoverability of the carrying amounts in respect of investments
in subsidiaries (Company)
The investments in subsidiaries of $3,298 million (2024:
$3,291 million) are held at cost less accumulated impairment in the
Company balance sheet at 31 December 2025. An impairment
charge of $4 million was recognised this year.
Investments are tested for impairment if impairment indicators
exist. If such indicators exist, the recoverable amounts of
investments in subsidiaries are estimated in order to determine the
extent of the impairment loss, if any. Any such impairment loss is
recognised in the income statement.
The impairment assessment was identified as a key audit matter
due to the size of the underlying investment carrying values at 31
December 2025. Impairment indicators were identified in
connection with certain investments in subsidiaries due to the
carrying value of investments exceeding the net assets of the
underlying subsidiaries.
As a result, the recoverable amount of the investments
was determined, being the higher of fair value less cost of disposal
or the value in use, in order to determine the headroom over
carrying values, if any.
The determination of the recoverable amount requires the
application of management judgement and involves estimation,
particularly in determining the key assumptions to be applied in
preparing cash flow projections.
Refer to accounting policies (note 2) and Investment in subsidiaries
(note 3) in the Company financial statements.
We performed the following audit procedures in relation to the
carrying amounts of investments in subsidiaries:
–
we evaluated management’s assessment of whether any indicators
of impairment existed by comparing the carrying values of
investments in subsidiaries with the net assets of the underlying
subsidiaries at 31 December 2025;
–
for investments where the net assets were lower than the carrying
values, we assessed the recoverable amounts by reference to the
value in use of the investments compared to carrying values at 31
December 2025;
–
where applicable, we verified that the recoverable amounts of
investments utilised the relevant recoverable amounts of the
related CGUs tested for goodwill impairment purposes, leveraging
the work undertaken as part of the Group audit; and
–
we separately evaluated the difference between the carrying value
of the Company’s investments in subsidiaries and the Group’s
market capitalisation.
Based on the procedures performed, we noted no material issues
arising from our work.
We also evaluated the disclosures in note 2 and note 3 and consider
these to be appropriate.
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Corporate governance
Financial statements
Strategic report
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial statements
as a whole, taking into account the structure of the Group and the
Company, the accounting processes and controls, and the industry in
which they operate.
As at 31 December 2025, Hikma Pharmaceuticals PLC had 58
subsidiaries and one joint venture as part of the Group. These entities
most commonly operate solely in one segment but in some certain
instances operate across two. Each component submits a Group
reporting package to Hikma’s central accounting team including its
income statement and balance sheet prepared under Group
accounting policies which are in accordance with the accounting
standards.
In selecting the components that are in scope this year and
establishing the overall approach to the Group audit, we determined
the type of work that needed to be performed by us, as the Group
engagement team, or component auditors in other PwC network firms
operating under our instruction, to ensure that we had sufficient
coverage from our audit work over each relevant line of the Group
financial statements and in accordance with ISA (UK) 600 Revised.
Where the work was performed by our component auditors, we
determined the level of involvement we needed to have in their audit
work in order to be able to conclude whether sufficient appropriate
audit evidence had been obtained as a basis for our opinion on the
Group financial statements as a whole. We instructed component
teams in the US, Jordan, Saudi Arabia and Algeria to audit reporting
packages of certain entities in these territories and report to us the
results of their work. Certain individual balances for the US were
audited by our component team based in Jordan. We also engaged
our component team in Portugal to perform an audit over specific
balances. In addition to instructing and reviewing the reporting from
our component audit teams, we conducted file reviews and
participated in key meetings with local management both remotely
and in person. We had regular dialogue with component teams
throughout the year and performed site visits to the US and Jordan. In
addition to the work performed by our component teams, central
audit procedures were performed by the Group engagement team in
relation to specific material balances not covered by component
auditors. The Group consolidation and related central consolidation
and other adjustments, financial statement disclosures and corporate
functions were also audited by the Group engagement team. This
included our work over central taxation adjustments and valuation of
goodwill and intangible assets. Taken together, audit work over the full
scope components and central procedures performed covered
approximately 79% of the Group’s revenue and 76% of the Group’s
core profit before tax. In addition to the audit procedures noted
above, we also performed disaggregated analytical review procedures
over certain of the Group’s smaller and lower risk components that
were not directly included in our Group audit scope. This provided the
evidence we needed for our opinion on the consolidated financial
statements, taken as a whole. We also performed a full scope audit of
the Company to a separate Company standalone materiality.
The impact of climate risk on our audit
As explained in the Sustainability section within the Strategic report,
the Group is mindful of its impact on the environment and is focused
on ways to reduce climate related impacts. In planning and executing
our audit we have considered the Group’s risk assessment process to
identify and model the potential impact of climate change on the
financial statements and further engaged with our own sustainability
experts. Based on this, we understand that the most relevant
climate-related risks to the Group could be a potential impact of
increases in input costs for energy intensive supplies such as active
pharmaceutical ingredients and packaging materials due to carbon
pricing and the impact of potential storm events. This would impact
the financial statement line items and estimates associated with
future cash flows since the impact of climate change is expected to
become more notable in the medium to long term. The key areas
impacted include recoverability of goodwill, intangible assets and
deferred tax assets. We note that management’s assessment is that
the impact on Hikma is currently not financially material in the
short-term, nevertheless, we have continued to assess managements
forecasts to ensure it reflects the impact of climate change and any
climate change related commitments in the cash flows particularly in
the context of the Group’s target to reduce Scope 1 and 2 GHG
emissions by 25% by 2030. Our work did not identify any material
impact on our audit for the year ended 31 December 2025.
Materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to
determine the scope of our audit and the nature, timing and extent of
our audit procedures on the individual financial statement line items
and disclosures and in evaluating the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for
the financial statements as a whole as follows:
Financial statements –
Group
Financial statements –
Company
Overall materiality
$32 million (2024:
$31 million).
$37 million (2024:
$38 million).
How we determined
it
Based on 5% of
core profit before
tax
Based on 1% of
total assets
Rationale for
benchmark applied
The Group’s
principal measure
of earnings is core
results.
Management
believes that it
reflects the
underlying
performance of the
Group and is a
meaningful
measure of the
Group’s
performance to
stakeholders.
The Company’s
principal activity is
to hold the Group’s
investments and
perform treasury
functions on behalf
of the Group.
For each component in the scope of our Group audit, we allocated a
materiality that is less than our overall Group materiality. The range of
materiality allocated across components was between $12 million and
$28.5 million. Certain components were audited to a local statutory
audit materiality that was also less than our overall Group materiality.
Report on the audit of the financial statements
continued
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We use performance materiality to reduce to an appropriately low
level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically,
we use performance materiality in determining the scope of our audit
and the nature and extent of our testing of account balances, classes
of transactions and disclosures, for example in determining sample
sizes. Our performance materiality was 75% (2024: 75%) of overall
materiality, amounting to $24 million (2024: $23 million) for the Group
financial statements and $27.5 million (2024: $28.5 million) for the
Company financial statements.
In determining the performance materiality, we considered a number
of factors – the history of misstatements, risk assessment and
aggregation risk and the effectiveness of controls – and concluded
that an amount at the upper end of our normal range was appropriate.
We agreed with the Audit Committee that we would report to them
misstatements identified during our audit above $1.5 million (Group
audit) (2024: $1.5 million) and $1.9 million (Company audit) (2024:
$1.9 million) as well as misstatements below those amounts that,
in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group’s and the
Company’s ability to continue to adopt the going concern basis of
accounting included:
–
agreeing the underlying cash flow projections to board approved
forecasts, assessing how these forecasts are compiled, and
assessing the accuracy of management’s forecasts;
–
evaluating the key assumptions within management’s forecasts;
–
considering liquidity and available financial resources;
–
verifying the suspension of loan covenants due to maintaining an
investment-grade rating where relevant by reviewing the relevant
agreements and validating the credit rating with external ratings
agencies; and
–
assessing whether the severe but plausible downside scenario
prepared by management appropriately considered the principal
risks facing the business.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group’s and the
Company’s ability to continue as a going concern for a period of at
least twelve months from when the financial statements are
authorised for issue.
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be
predicted, this conclusion is not a guarantee as to the Group’s and the
Company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK
Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the directors’ statement in the financial
statements about whether the directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of this
report.
Reporting on other information
The other information comprises all of the information in the Annual
Report other than the financial statements and our auditors’ report
thereon. The directors are responsible for the other information. Our
opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or,
except to the extent otherwise explicitly stated in this report, any form
of assurance thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an
apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a
material misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we have
performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing
to report based on these responsibilities.
With respect to the Strategic report and Directors’ report, we also
considered whether the disclosures required by the UK Companies
Act 2006 have been included.
Based on our work undertaken in the course of the audit, the
Companies Act 2006 requires us also to report certain opinions and
matters as described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the
audit, the information given in the Strategic report and Directors’
report for the year ended 31 December 2025 is consistent with the
financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the Group and
Company and their environment obtained in the course of the audit,
we did not identify any material misstatements in the Strategic report
and Directors’ report.
Directors’ Remuneration
In our opinion, the part of the Annual report on remuneration to be
audited has been properly prepared in accordance with the
Companies Act 2006.
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Corporate governance
Financial statements
Strategic report
Corporate governance statement
The Listing Rules require us to review the directors’ statements in
relation to going concern, longer-term viability and that part of the
corporate governance statement relating to the Company’s
compliance with the provisions of the UK Corporate Governance Code
specified for our review. Our additional responsibilities with respect to
the corporate governance statement as other information are
described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial
statements and our knowledge obtained during the audit, and we
have nothing material to add or draw attention to in relation to:
–
The directors’ confirmation that they have carried out a robust
assessment of the emerging and principal risks;
–
The disclosures in the Annual Report that describe those principal
risks, what procedures are in place to identify emerging risks and an
explanation of how these are being managed or mitigated;
–
The directors’ statement in the financial statements about whether
they considered it appropriate to adopt the going concern basis of
accounting in preparing them, and their identification of any
material uncertainties to the Group’s and Company’s ability to
continue to do so over a period of at least twelve months from the
date of approval of the financial statements;
–
The directors’ explanation as to their assessment of the Group’s
and Company’s prospects, the period this assessment covers and
why the period is appropriate; and
–
The directors’ statement as to whether they have a reasonable
expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the period of its
assessment, including any related disclosures drawing attention to
any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term
viability of the Group and Company was substantially less in scope
than an audit and only consisted of making inquiries and considering
the directors’ process supporting their statement; checking that the
statement is in alignment with the relevant provisions of the UK
Corporate Governance Code; and considering whether the statement
is consistent with the financial statements and our knowledge and
understanding of the Group and Company and their environment
obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
–
The directors’ statement that they consider the Annual Report,
taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess the
Group’s and Company’s position, performance, business model
and strategy;
–
The section of the Annual Report that describes the review of
effectiveness of risk management and internal control systems; and
–
The section of the Annual Report describing the work of the Audit
Committee.
We have nothing to report in respect of our responsibility to report
when the directors’ statement relating to the Company’s compliance
with the Code does not properly disclose a departure from a relevant
provision of the Code specified under the Listing Rules for review by
the auditors.
Responsibilities for the financial statements
and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities
in respect of the financial statements, the directors are responsible for
the preparation of the financial statements in accordance with the
applicable framework and for being satisfied that they give a true and
fair view. The directors are also responsible for such internal control as
they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Group’s and the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or the Company or to
cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that
includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with
laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in
respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is
detailed below.
Report on the audit of the financial statements
continued
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Based on our understanding of the Group and industry, we identified
that the principal risks of non-compliance with laws and regulations
related to patent protection, product safety (including but not limited
to the United States Food and Drug Administration regulations),
competition and antitrust laws, pricing practices and legislation, and
anti-bribery and corruption legislation (including but not limited to the
Foreign Corrupt Practices Act), and we considered the extent to which
non-compliance might have a material effect on the financial
statements. We also considered those laws and regulations that have
a direct impact on the financial statements such as applicable tax
legislation, the Companies Act 2006 and Listing Rules of the Financial
Conduct Authority (FCA). We evaluated management’s incentives and
opportunities for fraudulent manipulation of the financial statements
(including the risk of override of controls), and determined that the
principal risks were related to posting inappropriate journal entries to
manipulate financial results and management bias in accounting
estimates. The Group engagement team shared this risk assessment
with the component auditors so that they could include appropriate
audit procedures in response to such risks in their work. Audit
procedures performed by the Group engagement team and/or
component auditors included:
–
making enquiries of management and the Group’s legal counsel,
including consideration of known or suspected instances of
non-compliance with laws and regulations and fraud;
–
assessing matters reported on the Group’s whistleblowing hotline
and results of management’s investigation of such matters;
–
challenging assumptions and judgements made by management in
its significant accounting estimates or judgements as a whole and
assessing whether there has been any management bias in
aggregate; and
–
identifying and testing journal entries, in particular any journal
entries posted with unusual account combinations.
There are inherent limitations in the audit procedures described
above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to
events and transactions reflected in the financial statements. Also,
the risk of not detecting a material misstatement due to fraud is higher
than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations of
certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number
of items for testing, rather than testing complete populations. We will
oſten seek to target particular items for testing based on their size or
risk characteristics. In other cases, we will use audit sampling to
enable us to draw a conclusion about the population from which the
sample is selected.
A further description of our responsibilities for the audit of the
financial statements is located on the FRC’s website at: www.frc.org.
uk/auditorsresponsibilities. This description forms part of our auditors’
report.
Use of this report
This report, including the opinions, has been prepared for and only for
the Company’s members as a body in accordance with Chapter 3 of
Part 16 of the Companies Act 2006 and for no other purpose. We do
not, in giving these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or
into whose hands it may come save where expressly agreed by our
prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in
our opinion:
–
we have not obtained all the information and explanations we
require for our audit; or
–
adequate accounting records have not been kept by the Company,
or returns adequate for our audit have not been received from
branches not visited by us; or
–
certain disclosures of directors’ remuneration specified by law are
not made; or
–
the Company financial statements and the part of the Annual
report on remuneration to be audited are not in agreement with the
accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
We were first appointed by the Company for the financial year ended
31 December 2016. Our uninterrupted engagement covers 10 financial
years.
Other matter
The Company is required by the Financial Conduct Authority
Disclosure Guidance and Transparency Rules to include these
financial statements in an annual financial report prepared under the
structured digital format required by DTR 4.1.15R – 4.1.18R and filed on
the National Storage Mechanism of the Financial Conduct Authority.
This auditors’ report provides no assurance over whether the
structured digital format annual financial report has been prepared in
accordance with those requirements.
Nigel Comello (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
25 February 2026
161
Hikma Pharmaceuticals PLC |
Annual Report 2025
Corporate governance
Financial statements
Strategic report
162
Hikma Pharmaceuticals PLC |
Annual Report 2025
Consolidated income statement
For the year ended 31 December 2025
2025
Core
results
2025
Exceptional
items and other
adjustments
(Note 6)
2025
Reported
results
2024
Core
results
2024
Exceptional
items and other
adjustments
(Note 6)
2024
Reported
results
Note
$m
$m
$m
$m
$m
$m
Revenue
4
(29 )
Cost of sales
(1,892 )
(16 )
(1,908 )
(1,708 )
(4 )
(1,712 )
Gross profit/(loss)
(16 )
(33 )
Selling, general and administrative expenses
(566 )
(177 )
(743 )
(568 )
(103 )
(671 )
Impairment loss on financial assets, net
(1 )
(1 )
(2 )
(2 )
Research and development expenses
(151 )
(151 )
(141 )
(141 )
Other operating expenses
7
(9 )
(26 )
(35 )
(21 )
(31 )
(52 )
Other operating income
7
Total operating expenses
(716 )
(183 )
(899 )
(729 )
(74 )
(803 )
Operating profit/(loss)
5
(199 )
(107 )
Finance income
8
Finance expense
9
(106 )
(1 )
(107 )
(93 )
(74 )
(167 )
Gain from investment at fair value through
profit or loss (FVTPL)
Group's share of profit of joint venture
16
Profit/(loss) before tax
(128 )
(181 )
Tax
10
(139 )
(112 )
(138 )
(93 )
Profit/(loss) for the year
(101 )
(136 )
Attributable to:
Non-controlling interests
Equity holders of the parent
(101 )
(136 )
Earnings per share (cents)
Basic
11
Diluted
11
163
Hikma Pharmaceuticals PLC |
Annual Report 2025
Corporate governance
Financial statements
Strategic report
Consolidated statement of
comprehensive income
For the year ended 31 December 2025
2025
2024
Note
$m
$m
Profit for the year
Other comprehensive income/(expense)
Items that may subsequently be reclassified to the consolidated income statement:
Currency translation movement
(55 )
Items that will not subsequently be reclassified to the consolidated income statement:
Change in investments at fair value through other comprehensive income (FVTOCI)
17
(13 )
(6 )
Remeasurement of post-employment benefit obligations
24
(2 )
(1 )
Total other comprehensive income/(expense) for the year
(62 )
Total comprehensive income for the year
Attributable to:
Non-controlling interests
Equity holders of the parent
164
Hikma Pharmaceuticals PLC |
Annual Report 2025
Consolidated balance sheet
At 31 December 2025
2025
2024
Note
$m
$m
Non-current assets
Goodwill
13
Other intangible assets
13
Property, plant and equipment
14
Right-of-use assets
15
Investment in joint venture
16
Deferred tax assets
10
Other non-current assets
17
Current assets
Inventories
18
Income tax recoverable
Trade and other receivables
19
Cash and cash equivalents
20
Other current assets
21
Total assets
Current liabilities
Short-term financial debts
22
Lease liabilities
15
Trade and other payables
23
Income tax payable
Provisions
24
Other current liabilities
25
Net current assets
Non-current liabilities
Long-term financial debts
26
Lease liabilities
15
Deferred tax liabilities
10
Provisions
24
Other non-current liabilities
28
Total liabilities
Net assets
Equity
Share capital
29
Share premium
Other reserves
(285 )
(374 )
Retained earnings
Equity attributable to equity holders of the parent
Non-controlling interests
Total equity
The consolidated financial statements of Hikma Pharmaceuticals PLC, registered number 5557934, on pages 162 to 211 were approved by the Board of
Directors on 25 February 2026 and signed on its behalf by:
Said Darwazah
Executive Chairman and CEO
25 February 2026
Khalid Nabilsi
Chief Financial Officer
165
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Annual Report 2025
Corporate governance
Financial statements
Strategic report
Consolidated statement of
changes in equity
For the year ended 31 December 2025
Other reserves
Share
capital
(Note 29)
Share
premium
Merger and
revaluation
reserves
Translation
reserve
Capital
redemption
reserve
Employee
benefit
trust (EBT)
reserve
(Note 29)
Total other
reserves
Retained
earnings
Equity
attributable
to equity
holders of the
parent
Non-
controlling
interests
Total
equity
Notes
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
Balance at
1 January 2024
(319 )
(282 )
Profit for the year
Change in investments
at fair value through
other comprehensive
income (FVTOCI)
17
(6 )
(6 )
(6 )
Remeasurement of
post-employment
benefit obligations
24
(1 )
(1 )
(1 )
Currency translation
movement
(55 )
(55 )
(55 )
(55 )
Total comprehensive
income for the year
(55 )
(55 )
Cost of equity-settled
employee share scheme
33, 34
Deferred tax on equity-
settled employee share
scheme
Purchase of shares held
in employee benefit trust
(EBT)
(38 )
(38 )
(38 )
(38 )
Exercise of
equity-settled
employee share scheme
(1 )
Dividends paid
12
(175 )
(175 )
(3 )
(178 )
Balance at
31 December 2024 and
1 January 2025
(374 )
(37 )
(374 )
Profit for the year
Change in investments
at fair value through
other comprehensive
income (FVTOCI)
17
(13 )
(13 )
(13 )
Remeasurement of
post-employment
benefit obligations
24
(2 )
(2 )
(2 )
Currency translation
movement
Total comprehensive
income for the year
Cost of equity-settled
employee share scheme
33, 34
Purchase of shares held
in employee benefit trust
(EBT)
(36 )
(36 )
(36 )
(36 )
Exercise of
equity-settled
employee share scheme
(31 )
Dividends paid
12
(185 )
(185 )
(3 )
(188 )
Balance at
31 December 2025
(280 )
(42 )
(285 )
166
Hikma Pharmaceuticals PLC |
Annual Report 2025
Consolidated cash flow statement
For the year ended 31 December 2025
2025
2024
Notes
$m
$m
Cash flow from operating activities
Profit before tax
Depreciation, amortisation and impairment
13, 14, 15
Finance income and expense
8, 9
Cost of equity-settled employee share scheme
33, 34
Gain from investment at fair value through profit or loss (FVTPL)
(1 )
(1 )
Loss on disposal of property, plant and equipment
Foreign exchange loss, net
Group's share of profit of joint venture
16
(1 )
Loss on sale of assets held for sale
Change in other non-current assets
(21 )
Change in inventories
(86 )
(112 )
Change in trade and other receivables
(97 )
(144 )
Change in other current assets
(122 )
Change in trade and other payables
Change in provisions
(3 )
(1 )
Change in other current liabilities
Change in other non-current liabilities
Cash generated from operations
Income taxes paid
(126 )
(125 )
Income taxes received
Net cash inflow from operating activities
Cash flow from investing activities
Purchase of property, plant and equipment
(197 )
(165 )
Purchase of intangible assets
(120 )
(70 )
Additions to investments at FVTOCI
31
(3 )
(2 )
Payments of contingent consideration liabilities
(75 )
(12 )
Interest income received
Dividends from joint venture
16
Acquisition of business, net of cash acquired
(150 )
Cash receipt related to assets held for sale
Net cash outflow from investing activities
(388 )
(381 )
Cash flow from financing activities
Proceeds from issue of long-term financial debts
27
Repayment of long-term financial debts
27
(2,093 )
(536 )
Proceeds from short-term financial debts
27
Repayment of short-term financial debts
27
(357 )
(411 )
Repayment of lease liabilities
15
(11 )
(21 )
Dividends paid
12
(185 )
(175 )
Distributions to non-controlling interests
(3 )
(3 )
Interest and bank charges paid
(83 )
(84 )
Purchase of shares held in employee benefit trust (EBT)
(36 )
(38 )
Upfront fees and Eurobond transaction costs
27
(8 )
Decrease in restricted cash
Payments of co-development and earnout payment agreement
(1 )
Net cash outflow from financing activities
(25 )
(188 )
Net increase/(decrease) in cash and cash equivalents
(5 )
Cash and cash equivalents at beginning of year
20
Foreign exchange translation movements
(12 )
Cash and cash equivalents at end of year
20
Strategic report
Corporate governance
Financial statements
Notes to the consolidated
financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
167
The following amendment to accounting standard has been issued
and is effective for annual periods beginning on 1 January 2025.
IAS 21 (Amendments) |
Lack of Exchangeability |
This amendment had no significant impact on the consolidated
financial statements but may impact the accounting for future
transactions and arrangements.
The following new accounting standards and amendments to accounting
standards that had been issued but were not mandatory for annual
reporting periods ending on 31 December 2025 were not early adopted.
IFRS 9 and IFRS 7 |
Classification and Measurement of |
(Amendments) |
Financial Instruments |
Effective 1 January 2026 |
|
IFRS 9 and IFRS 7 |
Contracts referencing Nature-dependent |
(Amendments) |
Electricity |
Effective 1 January 2026 |
|
IAS 21 (Amendments) |
Translation to a Hyperinflationary |
Effective 1 January 2027 |
Presentation Currency |
IFRS 19 (Standard) |
Subsidiaries without Public |
Effective 1 January 2027 |
Accountability: Disclosures |
IFRS 18 (Standard) |
Presentation and Disclosure in Financial |
Effective 1 January 2027 |
Statements |
A nnual Improvements to |
– IFRS 1 First-time Adoption of |
IFRS Accounting |
International Financial Reporting |
Standards—Volume 11 |
Standards |
Effective 1 January 2026 |
– IFRS 7 Financial Instruments: Disclosures |
– Guidance on implementing IFRS 7 |
|
Financial Instruments: Disclosures |
|
– IFRS 9 Financial Instruments |
|
– IFRS 10 Consolidated Financial |
|
Statements |
|
– IAS 7 Statement of Cash Flows |
The Group is currently assessing the implications of applying the
new standards and amendments on the Group’s consolidated
incorporated and domiciled in England and Wales
Act 2006. The address of the registered office is stated on page 220.
commercialisation of a broad range of generic, specialty and branded
Hikma Pharmaceuticals PLC’s consolidated financial statements have
been prepared in accordance with:
i.
UK-adopted International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable to companies
reporting under those standards.
ii.
International Financial Reporting Standards as issued by the
International Accounting Standards Board (‘IFRS Accounting
Standards’).
The consolidated financial statements have been prepared under the
historical cost convention, except for the revaluation to fair value of
certain financial assets and liabilities.
The accounting policies included in this note have been applied
consistently other than where new policies have been adopted.
The presentational currency of the Group’s consolidated financial
statements is the US dollar, as the majority of the Group’s business
The Directors believe that the Group is well diversified due to its
geographic spread, product diversity and large customer and supplier
base. Taking into account the Group’s current position and its principal
risks for a period longer than 12 months from the date of signing the
consolidated financial statements, a going concern analysis has been
prepared using realistic scenarios, applying a severe but plausible
downside which demonstrates that the Group would maintain sufficient
liquidity headroom. Therefore, the Directors believe that the Group and
its subsidiaries are adequately placed to manage their business and
financing risks successfully, despite the current uncertain economic
outlook. Having assessed the principal risks, the Directors considered it
appropriate to adopt the going concern basis of accounting in preparing
the consolidated financial statements. (see page 89).
Where relevant, covenants on major financial debt arrangements are
suspended while the Group retains its investment grade status from two
rating agencies. During the year ended 31 December 2025, the Group’s
The consolidated financial statements incorporate the results of Hikma
Pharmaceuticals PLC (the Company) and entities controlled by the
Company (together, the Group).
All subsidiaries and the Company’s financial statements are consolidated
The acquisition of subsidiaries is accounted for using the acquisition
method. All identifiable assets, liabilities and contingent liabilities
acquired are measured at fair value on the acquisition date. All
acquisition-related costs are recognised in the consolidated income
statement as incurred.
The consideration is measured at the aggregate fair values of assets
given, liabilities incurred or assumed, and equity instruments issued by
the Group in exchange for control of the acquiree, at the acquisition date.
Where applicable, this consideration may include the fair value of assets
or liabilities resulting from a contingent consideration arrangement.
Contingent consideration classified as an asset or liability is a financial
instrument and, within the scope of IFRS 9 ‘Financial Instruments’, is
measured at fair value, with changes in fair value recognised in the
consolidated income statement in line with IFRS 9.
Notes to the consolidated financial statements
continued
2. Accounting policies
continued
168
Hikma Pharmaceuticals PLC |
Annual Report 2025
Subsequent changes to those fair values can only affect the measurement
of goodwill, where they occur during the ‘measurement period’ and are
as a result of additional information becoming available about facts and
circumstances that existed at the acquisition date. All other changes are
dealt with in accordance with relevant IFRS Accounting Standards. This will
usually mean that changes in the fair value of consideration are recognised
in the consolidated income statement.
Goodwill arising on acquisition is recognised as an asset and initially
measured at cost, being the excess of the aggregate of consideration,
non-controlling interest and any fair value of previously held equity
interest over the fair values of the identifiable net assets acquired. If, after
reassessment, the Group’s interest in the net fair value of the acquiree’s
identifiable assets, liabilities and acquired contingent liabilities exceeds
the cost of the consideration, the gain is recognised immediately in the
consolidated income statement.
The non-controlling interest in the acquiree is initially measured at the
non-controlling interest’s proportion of the net fair value of the assets,
liabilities and acquired contingent liabilities recognised.
If the initial accounting for a business combination is incomplete by the
end of the reporting period in which the combination occurs, the Group
reports provisional amounts for the items for which the accounting is
incomplete. Those provisional amounts are adjusted during the
measurement period, or additional assets or liabilities are recognised,
to reflect new information obtained about facts and circumstances that
existed as of the acquisition date that, if known, would have affected the
amounts recognised as of that date.
The measurement period is the period from the date of acquisition
to the date the Group obtains complete information about facts and
circumstances that existed as of the acquisition date and is subject
Revenue is recognised in the consolidated income statement when
control of the goods or services are transferred to the customer at an
amount that reflects the consideration to which the Group expects to
be entitled in exchange for those goods or services. The point at which
control passes is determined by each customer arrangement, but
generally occurs on delivery to the customer.
The Group has generally concluded that it acts as principal in its revenue
arrangements because it typically controls the goods before the transfer
to the customer.
The Group manufactures certain medicines on behalf of customers.
In most cases, control is transferred to the customer over time, as these
medicines have no alternative use, and the Group has an enforceable
right to payment for performance completed to date. For the majority
of these arrangements, progress towards satisfying the Group’s
performance obligations is measured based on the units of product
approved by the quality control department.
Revenue represents the amounts receivable after the deduction of
discounts, value added tax, other sales taxes, allowances given,
provisions for chargebacks, accruals for estimated future rebates,
returns and price adjustments. The methodology and assumptions used
to estimate rebates and returns are monitored and adjusted regularly in
light of contractual and historical information.
The Group applies the practical expedient and does not adjust the
transaction price for the effects of a significant financing component
when, at contract inception, the period between the transfer of the
promised goods or services to the customer and payment by the
customer is expected to be one year or less. As the Group does not
expect to have contracts where this period exceeds one year, transaction
prices are not adjusted for the time value of money.
Variable consideration
Revenue includes variable consideration arising from chargebacks, returns,
rebates, and other gross to net adjustments, which are estimated at the
time of sale based on contractual terms, historical experience and current
market conditions. Given the inherent uncertainty in the final settlement
of these arrangements, the Group applies a constraint to the estimation
of variable consideration to ensure that revenue is recognised only to the
extent that it is highly probable that a significant reversal will not occur
when the uncertainty is resolved. This is achieved through the use of
In the US, the Group sells its products directly to wholesale distributors,
generic distributors, retail pharmacy chains and mail-order pharmacies.
The Group also sells its products indirectly to independent pharmacies,
managed care organisations, hospitals, and group purchasing
organisations, collectively referred to as ‘indirect customers’. The Group
enters into agreements with its indirect customers to establish pricing
for certain products. The indirect customers then independently
select a wholesaler from which they purchase the products at agreed-upon
prices. The Group will provide credit to the wholesaler for the difference
between the agreed-upon price with the indirect customer and the
wholesaler’s invoice price. This credit is called a chargeback. The provision
for chargebacks is based on historical sell-through levels by the Group’s
wholesale customers to the indirect customers, and anticipated future sales
trends. As sales are made to large wholesale customers, the Group
continually monitors the provision for chargebacks and makes adjustments
when it believes that actual chargebacks may differ from estimated
The Group has a product return policy that allows customers to return
the product within a specified period prior to and subsequent to the
expiration date. Provisions for returns are recognised as a reduction of
revenue in the period in which the underlying sales are recognised. The
Group estimates its provision for returns based on historical experience,
representing management’s best estimate. While such experience has
enabled reasonable estimations in the past, history may not always be an
accurate indicator of future returns. The Group continually monitors the
provisions for returns and makes adjustments when it believes that actual
product returns may differ from established reserves (see Note 25 for
In the US, rebates are granted to wholesaler distributors and direct
customers. Rebates are also granted to healthcare authorities and certain
indirect customers under contractual arrangements. Products sold in the
US are covered by various programmes (such as Medicaid) under which
products are sold at a discount. The Group estimates its provision for
rebates based on current contractual terms and conditions as well as
historical experience, changes to business practices and credit terms.
While such experience has enabled reasonable estimations in the past,
history may not always be an accurate indicator of future rebate liabilities.
The Group continually monitors the provisions for rebates and makes
adjustments when it believes that actual rebates may differ from
established reserves. (see Notes 19 and 25 for rebates sensitivity analysis).
Strategic report
Corporate governance
Financial statements
2. Accounting policies
continued
Hikma Pharmaceuticals PLC |
Annual Report 2025
169
Performance obligation
Free goods
Free goods are issued to certain customers as an alternative to discounts.
These free goods give rise to a separate performance obligation, which
requires management to allocate the transaction price to the original
goods and the related free goods. Revenue for free goods is recognised
when they are transferred to the customer and a contract liability is
recognised when the free goods are due but not yet transferred to
the customer.
Contract manufacturing services
Contract manufacturing services that include commitments by the
Group to make facility space and equipment available may be deemed
to include lease components which are evaluated under IFRS 16 ‘Leases’.
For arrangements that contain both lease and non-lease components,
consideration in the contract is allocated on a relative standalone selling-
price basis of each performance obligation. Revenue for these performance
obligations are recognised when they are satisfied, and a contract liability is
(Note 34)
At the Company’s discretion and subject to the achievement of Group
and personal performance criteria in the prior year, employees
(including Executive Directors) of the Group receive restricted share-
based awards, whereby employees render their services in exchange
for shares or rights over shares (equity-settled transactions).
Additionally, a share-based award was introduced to Executive Directors
under the 2023 Remuneration Policy, which represents a performance
share plan with performance measured over certain non-market and
market conditions in future years.
The cost of share-based payment transactions with employees for
restricted awards is measured based on the fair value at the grant date.
Fair value is determined using the share price at the grant date, discounted
for dividends, except for awards granted to Executive Directors, where no
adjustment is made since participants receive dividends during the vesting
period in the form of additional shares. The cost of these share-based
payments is recognised on a straight-line basis over the performance year
and the vesting period, with a corresponding increase in equity.
The cost of share-based payments’ transactions with Executive Directors
for the performance awards is measured by reference to the fair value at
the date at which the share-based payments are granted. Fair value is
determined based on the Monte Carlo methodology for the market
condition portion. For non-market conditions, fair value is determined
based on the share price at the date of the grant, no discounting for
dividend yield is applied as participants will receive the benefit of
dividends paid during the vesting period in the form of additional shares.
The cost is recognised, together with a corresponding increase in equity,
on a straight-line basis over the vesting period after the grant date.
The Group revises its estimate of the number of equity instruments
expected to vest, and the impact of the revision on the original estimates
(except for the portion related to a market vesting condition). The impact,
if any, is recognised in the consolidated income statement, such that the
cumulative expense reflects the revised estimate, with a corresponding
adjustment to equity reserves.
The dilutive effect of outstanding share-based payments is reflected in the
computation of diluted earnings per share.
The Group provides funding to the employee benefit trust (EBT) to acquire
Company shares, fulfilling its obligation to deliver shares when awards vest.
Shares held by the EBT are deducted from other reserves, with a
corresponding transfer to retained earnings upon their delivery to satisfy
(Note 10)
The Group provides for income tax according to the laws and regulations
prevailing in the countries where the Group operates. Furthermore, the
Group computes and records deferred tax assets and liabilities according
to IAS 12 ‘Income Taxes’.
The tax expense represents the sum of the current tax in the current
period and deferred tax.
Current income tax
Current income tax assets and liabilities are measured at the amount
expected to be recovered from or paid to the taxation authorities within
one year.
The current tax incurred in the period is based on taxable profit for the
year and prior year movement accounted for in the current year. Taxable
profit differs from net profit as reported in the consolidated income
statement because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are
never taxable or deductible. The Group’s tax incurred is calculated using
tax rates that have been enacted or substantively enacted by the
consolidated balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities in the
consolidated financial statements and the corresponding tax bases used
in the computation of taxable profit and is accounted for using the
consolidated balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and deferred
tax assets are recognised to the extent that it is probable that taxable
profits will be available against which deductible temporary differences
will reverse. To the extent the temporary difference arises from goodwill
or from the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither the taxable
profit nor the accounting profit and at the time of the transaction does
not give rise to equal taxable and deductible temporary differences, no
deferred tax is provided.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries, and interests in joint ventures,
except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse
in the foreseeable future. Deferred tax is calculated at the tax rates that
are expected to apply in the period when the liability is settled, or the
asset is realised. Deferred tax is charged or credited in the consolidated
income statement, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt within equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax assets and
liabilities on a net basis.
The carrying amount of deferred tax assets is reviewed at each
consolidated balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all
or part of the asset to be recovered.
Notes to the consolidated financial statements
continued
2. Accounting policies
continued
170
Hikma Pharmaceuticals PLC |
Annual Report 2025
Mandatory temporary exception
The Group has applied the temporary exception issued by the IASB in
May 2023 from the accounting requirements for deferred taxes in IAS 12.
Accordingly, the Group neither recognises nor discloses information about
deferred tax assets and liabilities related to Pillar Two income taxes.
Uncertain tax position
In line with IFRIC 23, if it is considered probable that a tax authority will
accept an uncertain tax treatment, the tax charge should be calculated
on that basis. If it is not considered probable, the effect of the uncertainty
should be estimated and reflected in the tax charge. In assessing the
uncertainty, it is assumed that the tax authority will have full knowledge
(Note 6)
We use a number of non-IFRS measures to report and monitor the
performance of our business. Management uses these adjusted numbers
internally to measure our progress and for setting performance targets.
We also present these numbers, alongside our reported results, to
external audiences to help them understand the underlying performance
of our business. Our adjusted numbers may be calculated differently to
other companies.
Adjusted measures are not substitutable for IFRS numbers and should
not be considered superior to results presented in accordance with IFRS
Reported results represent the Group’s overall performance. However,
these results can include one-off or non-cash items that mask the
underlying performance of the Group. To provide a more complete
picture of the Group’s performance and to improve comparability of our
consolidated financial statements to external audiences, alongside our
reported results, we provide core results, which are a non-IFRS measure.
We represent and discuss our Group and segmental financials reconciled
between reported and core results. This presentation allows for full
visibility and transparency of our financials so that shareholders are able
to clearly assess the performance factors of the Group.
Core results mainly exclude:
–
Amortisation of intangible assets other than software
–
Impairment charge/reversal of intangible assets, property, plant
and equipment and right-of-use assets
–
Finance income and expense resulting from remeasurement
and unwinding of contingent consideration and co-development
earnout payment agreement financial liabilities
–
Items which management believes to be exceptional in nature by
virtue of their size or incidence, or have a distortive effect on current
year earnings, including but not limited to costs associated with
business combinations, one-off gains and losses on disposal of
businesses, legal expenses, reorganisation costs and any
exceptional items related to tax such as significant tax
benefit/expense associated with previously unrecognised deferred
tax assets/liabilities
Our core results exclude the exceptional items and other adjustments
(Note 13)
Intangible assets are measured at cost, less any accumulated
amortisation and impairment losses.
Intangible assets, other than goodwill, are amortised on a straight-line
basis and the expense is recognised in the selling, general and
administrative expenses.
Judgement is used to assess the degree of certainty attached to the flow
of future economic benefits that are attributable to the use of the asset
on the basis of the evidence available at the time of initial recognition,
giving greater weight to external evidence.
Expenditures on research and development activities,
including activities
provided by third-party Contract Research Organisations (CROs) on the
Group’s behalf, are charged to the consolidated income statement, except
only when the criteria for recognising an internally generated intangible
asset are met, which is usually when approval from the relevant regulatory
authority is considered probable.
The Group also enters into in-licensing arrangements with third parties
for new research and development projects, which may include upfront,
milestone, and royalty payments. The nature of these payments is
assessed to determine whether they represent pass-through
reimbursements of research and development costs or consideration for
the transfer of intellectual property. Payments that represent
consideration for research and development activities and do not meet
the recognition criteria for intangible assets are expensed as incurred.
Upfront and other payments that relate to achievement of verifiable
regulatory outcomes and transfer of intellectual property are capitalised
as intangible assets.
Product-related intangibles:
(i)
Product files and in-licensed products recognised through
acquisitions and partnerships are amortised over their useful
economic lives once the asset is ready for use
(ii) In-process product files recognised on acquisition are amortised
over the useful economic life once the asset is ready for use
(c)
Purchased software:
is amortised over the useful economic life when
the asset is ready for use
Other identified intangibles are:
(d)
Customer relationships:
represent the value attributed to the long-
term relationships held with existing customers that the Group
acquired on business combinations. Customer relationships are
amortised over their useful economic lives
(e)
Trade names:
are amortised over their useful lives from the date
of acquisition
(f)
Marketing rights:
are amortised over their useful lives commencing
in the year in which the rights first generate sales
Strategic report
Corporate governance
Financial statements
2. Accounting policies
continued
Hikma Pharmaceuticals PLC |
Annual Report 2025
171
(Note 14)
depreciated on a straight-line basis except for land.
The normal expected useful lives of the major categories of Property,
plant and equipment are:
Buildings |
20 to 50 years |
Machinery and equipment |
3 to 20 years |
Vehicles, fixtures and equipment |
3 to 13 years |
A unit of production method of depreciation for machinery and
equipment is applied during the start-up phase of operations, as this
reflects the expected pattern of consumption of the future economic
benefits embodied in the assets. When these assets reach normal
capacity utilisation under normal circumstances, a straight-line method
of depreciation is applied.
Projects under construction are carried at cost, less any recognised
impairment loss. Depreciation of these assets, on the same basis as other
property, plant and equipment assets, commences when the assets are
ready for their intended use.
Any additional costs that extend the useful life of property, plant and
and equipment
At the same time each year, the Group carries out an impairment review
for goodwill and intangible assets that are not yet ready for use as follows:
(a) Goodwill is allocated to cash-generating units (CGUs). These CGUs
are tested for impairment annually, or more frequently when there is
an indication that the unit may be impaired. If the recoverable amount
of the CGU is less than its carrying amount, the impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated
to the unit and then to the other assets of the unit pro rata on the
basis of the carrying amount of each asset in the unit. An impairment
loss recognised for goodwill is not reversed in subsequent periods
(b) Intangible assets that are not yet ready for use are not subject to
amortisation and are tested annually for impairment or more
frequently if events or changes in circumstances indicate that they
might be impaired
Where applicable, the Group carries forward and uses the most recent
detailed calculation of a cash-generating unit’s recoverable amount
made in a preceding period, provided all of the following criteria are met:
–
The assets and liabilities making up the unit have not changed
significantly since the last recoverable amount calculation
–
The prior calculation indicated that the recoverable amount
exceeded the carrying amount of the unit by a substantial margin,
reflecting significant headroom
–
An analysis of events and changes in circumstances since the last
calculation indicates that the likelihood of the current recoverable
amount being lower than the carrying amount is remote
The Group also reviews the carrying amounts of property, plant and
equipment and intangible assets that are subject to depreciation and
amortisation to determine whether there is any indication that those assets
are impaired. If such indication exists, the recoverable amount of the asset
is estimated to determine the extent of the impairment loss (if any).
If the recoverable amount of an asset (or CGU) is lower than its carrying
amount, the asset (or CGU) is written down to its recoverable amount.
The resulting impairment loss is recognised immediately in the
consolidated income statement.
A previously recognised impairment loss is reversed only where there has
been a sustained and discrete change in the assumptions and indicators
associated with previous impairment losses. In such cases, the carrying
amount of the asset is increased to its revised recoverable amount. The
reversal is limited so that the carrying amount does not exceed the
carrying amount that would have been determined had no impairment
loss been recognised in prior years. Any reversal of impairment is
recognised immediately in the consolidated income statement.
The recoverable amount of an asset or a cash-generating unit is the
(Note 15)
In accordance with IFRS 16, the Group applies a single recognition and
measurement approach for all leases, except for short-term leases and
leases of low-value assets. The Group recognises lease liabilities to make
lease payments and right-of-use assets representing the right to use the
underlying assets:
–
Right-of-use assets: The Group recognises right-of-use assets at
the commencement date of the lease (i.e. the date the underlying
asset is available for use). Right-of-use assets are measured at cost,
less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made
at or before the commencement date less any lease incentives
received. Unless the Group is reasonably certain of obtaining
ownership of a leased asset at the end of the lease term, the
recognised right-of-use assets are depreciated on a straight-line
basis over the shorter of its estimated useful life and the lease term
–
Lease liabilities: at the commencement date of the lease, the Group
recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments
include fixed payments, less any lease incentives receivable,
variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees. The
lease payments also include the exercise price of a purchase option,
payments for optional extension periods and payments of penalties
for terminating a lease when these options are reasonably certain to
be exercised by the Group. The discount rate used to calculate the
lease liabilities is the incremental borrowing rate (IBR). The Group
estimates the IBR using observable inputs (such as market interest
rates) when available and is required to make certain entity-specific
estimates (such as the subsidiary’s stand-alone credit profile)
–
Short-term leases and leases of low-value assets: the Group applies
the short-term lease recognition exemption to its short-term leases
of machinery and equipment (i.e. those leases that have a lease
term of 12 months or less from the commencement date and do not
contain a purchase option). It also applies the lease of low-value
assets recognition exemption to leases of office equipment that are
considered of low value (below $5,000). Lease payments on short-
term leases and leases of low-value assets are recognised as an
Notes to the consolidated financial statements
continued
2. Accounting policies
continued
172
Hikma Pharmaceuticals PLC |
Annual Report 2025
(Note 18)
Inventories are stated at the lower of cost and net realisable value.
Purchased products are stated at acquisition costs including all
additional attributable costs incurred in bringing each product to its
present location and condition. The costs of own-manufactured products
comprise direct materials and, where applicable, direct labour costs and
any overheads that have been incurred in bringing the inventories to their
present location and condition. In the consolidated balance sheet,
inventory is primarily valued at historical cost determined on a moving
average basis, and this value is used to determine the cost of sales in the
consolidated income statement.
Inventory write-downs are recognised in cost of sales for launched or
approved products and in research and development expenses for
(Note 24)
Provisions are recognised when the Group has a present obligation (legal
or constructive) as a result of a past event, it is probable that an outflow of
resources will be required to settle the obligations and a reliable estimate
Financial assets and financial liabilities are recognised on the Group’s
consolidated balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
The Group classifies its financial assets in the following
measurement categories:
(Note 21)
Include debt instruments and investment portfolios held by the Group that
are traded in an active market and are designated as being measured at fair
value through profit or loss. Gains and losses arising from changes in fair
(ii) Financial assets at fair value through other comprehensive income
(FVTOCI)
(Note 17)
The Group irrevocably chooses to designate certain investments in
equity instruments as financial assets at FVTOCI as they are mainly
venture capital investments and are not held for trading. Unrealised
gains and losses are recognised in other comprehensive income.
Upon disposal of an equity investment, the cumulative gains or losses
previously recognised in other comprehensive income are transferred
directly to retained earnings. Investments in unlisted shares are
measured using a level 3 fair value which is based on cost and adjusted
as necessary for impairment and revaluations with reference to relevant
available information and recent financing rounds. For investments in
listed shares, fair value is readily determinable under level 1 valuation.
(see Note 31)
(iii) Financial assets at amortised cost
Trade receivables, loans, and other receivables that have fixed or
determinable payments that are not quoted in an active market are
classified as ‘financial assets at amortised cost’.
For trade receivables and contract assets, the Group applies a simplified
approach in calculating expected credit loss. Therefore, the Group does
not track changes in credit risk, but instead recognises a loss allowance
based on lifetime expected credit losses at each reporting date.
The Group has established a provision matrix that is based on its
historical credit loss experience, adjusted for forward-looking factors
Financial liabilities are classified as either financial liabilities at FVTPL
or financial debts at amortised cost, representing loans and borrowings.
The classification depends on the nature and purpose of the financial
liabilities and is determined at the time of initial recognition.
(Notes 25 and 28)
Financial liabilities at FVTPL comprise contingent consideration arising
from business combinations in the form of contractual liabilities to make
milestone payments that are dependent on the achievement of certain
regulatory approvals; and payments based on future sales of
certain products.
These financial liabilities are recorded under other current liabilities
(ii) Financial debts
Financial debts are initially measured at fair value, net of transaction
costs and subsequently measured at amortised cost using the effective
The Company recognises a liability to pay a dividend when the
distribution is authorised and no longer at the discretion of the Company.
In accordance with the laws of the United Kingdom, a final dividend is
recognised when it is approved by the majority of shareholders and an
sources of estimation uncertainty
In the application of the Group’s accounting policies, which are described
in Note 2, the Directors are required to make judgements and estimates
about the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates are based on historical
experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if
the revision affects only that period or in the period of the revision and
future periods if the revision affects both current and future periods.
The Group’s Directors believe that the following accounting policies that
involve Directors’ judgements and estimates are the most critical and
might result in a material adjustment to the carrying amounts of assets
and liabilities within the next financial year.
Revenue recognition estimate
(Notes 4 and 5)
The Group’s revenue recognition policies require Directors to estimate
the net selling prices, including variable consideration from chargebacks,
product returns, rebates, and other adjustments. These estimates vary
by product arrangement and buying group and are based on historical
experience and current market conditions.
Given the inherent uncertainty in the underlying assumptions, these
estimates are considered critical, and collectively, might result in a material
adjustment, as the ultimate settlement of these arrangements may differ
from the initial estimates. In determining this, the Group applies a constraint
to the variable consideration and recognises revenue only to the extent that
it is highly probable that a significant reversal will not occur, using
appropriately prudent assumptions. Accordingly, the risk of a material
downward adjustment to revenue is considered low. Refer to Notes 19
and 25 for sensitivity analysis.
Strategic report
Corporate governance
Financial statements
3. Critical accounting judgements and key
sources of estimation uncertainty
continued
Hikma Pharmaceuticals PLC |
Annual Report 2025
173
Chargebacks
Critical estimates
The key inputs and assumptions used in estimating this provision include
estimates of chargeback rates, as informed by historical chargeback
activity, expected chargeback rates for new products, and anticipated
future sales trends.
Returns
Critical estimates
The key inputs and assumptions used in estimating this provision include
the estimated portion of revenue subject to returns, as informed by
historical return patterns and specific factors such as product dating
and expiration, new product launches, competitive activity, and changes
in contractual terms.
Rebates
Critical estimates
The key inputs and assumptions used in estimating this provision include
estimates of rebates rates, as informed by historical relationships
between rebates and revenue, past payment experience, changes in
regulations, and anticipated future sales trends.
Intangible assets – impairment testing
(Note 13)
Critical judgements
–
Determining whether an impairment indication has occurred for
individual intangible assets or group of assets. In such case, the
Group performs an assessment to determine if the recoverable
value of the intangible asset or group of assets is less than its
carrying amount
–
Determining expected launch dates for pipeline products
–
For previously impaired assets, an assessment is made at each
reporting date to determine whether there is an indication that
previously recognised impairment losses no longer exist or have
decreased. if such indication exists, the Group estimates the asset’s
or CGU’s recoverable amount. A previously recognised impairment
loss is reversed only where there has been a sustained and discrete
change in the assumptions and indicators associated with previous
impairment losses
Critical estimates
–
Estimating revenue and cash flow forecasts (including market size,
estimated market share, number of competitors, net selling prices
and profit margins for marketed and pipeline products)
–
Estimating a discount rate and specific risk premiums
–
Estimating an appropriate growth rate beyond the forecast period
As a result of the annual impairment trigger assessment and impairment
testing for intangible assets, an impairment charge of $15 million has
been identified in relation to intangible assets (Notes 6 and 13).
Taxation
(Note 10)
Tax and transfer pricing audit risk
Critical judgement
In common with most international organisations, the Group is subject
to tax and transfer pricing audits from tax authorities from time to time.
Where an outflow of funds is believed to be probable and a reliable
estimate of the outcome of the dispute can be made, management
provides for its best estimate of the liability in line with IFRIC 23 principles.
These estimates take into account the specific circumstances of each
dispute and relevant external advice, and are inherently judgemental in
nature and could change substantially over time as new facts emerge
and each dispute progresses. The Group regularly takes professional
advice to ensure the risks are appropriately analysed and managed with
any ultimate potential liability being adequately provided, and continues
to invest in its financial systems to improve the quality of the Group’s
financial data which reduces the risk of an adverse tax authority audit.
As at 31 December 2025, the Group’s uncertain tax positions, excluding
advanced payments amounted to $38 million (2024: $54 million)
(Note 10). While it is not practical to provide a sensitivity analysis due
to the number of uncertain tax positions held and the number of
jurisdictions to which these relate, the Group reviews material uncertain
tax positions on an individual basis and believes that it has accounted
for an adequate provision for the liabilities likely to arise from open
assessments and audits and continues to re-evaluate existing uncertain
positions to determine if a change in facts and circumstances has
occurred that would make it necessary to adjust.
Contingent liabilities
Critical judgement
The Group is often involved in a number of legal and administrative
proceedings, as well as investigations, in the ordinary course of its
business, including disputes and investigations relating to employment
matters, product liability, commercial disputes, pricing, sales and
marketing practices, infringement of IP rights, the validity of certain
patents and competition laws which may result in a possible obligation
depending on whether some uncertain future event occurs.
Assessments as to whether to recognise provisions, and of the amounts
concerned, usually involve a series of complex judgements about future
events and can rely heavily on estimates and assumptions. Often these
issues are subject to substantial uncertainties and, therefore, the
probability of a loss, if any, being sustained and/or an estimate of the
amount of any loss is impracticable to ascertain. It is the Group’s policy
to provide for amounts related to these legal matters if it is probable that
a liability has been incurred and an amount is reasonably estimable.
A contingent liability is not provided for but is disclosed in Note 36 if:
–
payment is not probable, but more than remote, where the Group
denies having engaged in conduct that would give rise to liability
with respect to these lawsuits and is vigorously pursuing defence
of legal proceedings, or
–
Notes to the consolidated financial statements
174
Hikma Pharmaceuticals PLC |
Annual Report 2025
continued
Business and geographical markets
The following tables provide an analysis of the Group’s reported revenue by segment and geographical market, irrespective of the origin of the
goods/services:
Injectables |
Hikma Rx |
Branded |
Others |
Total |
|
Y ear ended 31 December 2025 |
$m |
$m |
$m |
$m |
$m |
North America |
924 |
1,037 |
– |
15 |
1,976 |
Middle East and North Africa |
234 |
– |
839 |
16 |
1,089 |
Europe and rest of the world |
251 |
– |
10 |
9 |
270 |
United Kingdom |
14 |
– |
– |
– |
14 |
1,423 |
1,037 |
849 |
40 |
3,349 |
Injectables |
Hikma Rx |
Branded |
Others |
Total |
|
Year ended 31 December 2024 |
$m |
$m |
$m |
$m |
$m |
North America |
877 |
1,026 |
– |
8 |
1,911 |
Middle East and North Africa |
214 |
– |
759 |
12 |
985 |
Europe and rest of the world |
202 |
– |
10 |
6 |
218 |
United Kingdom |
13 |
– |
– |
– |
13 |
1,306 |
1,026 |
769 |
26 |
3,127 |
The top selling markets are shown below:
2025 |
2024 |
|
$m |
$m |
|
United States |
1,950 |
1,887 |
Saudi Arabia |
331 |
301 |
Algeria |
229 |
213 |
2,510 |
2,401 |
In 2025, included in revenue arising from the Hikma Rx and Injectables segments are sales the Group made to three wholesalers in the US, each
accounting for equal to or greater than 10% of the Group’s revenue, contributing to $402 million (12%), $391 million (12%) and $354 million (11%).
In 2024, they contributed to $424 million (14%), $364 million (12%) and $307 million (10%), respectively.
The following table provides contract balances related to revenue:
2025 |
2024 |
|
$m |
$m |
|
Net trade receivables (Note 19) |
997 |
896 |
Deferred income (Notes 25 and 28) |
113 |
58 |
Refund liability (Note 25) |
152 |
151 |
Indirect rebates and other allowances (Note 25) |
188 |
173 |
Strategic report
Corporate governance
Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
175
For management reporting purposes, the Group is organised into three principal operating divisions – Injectables, Branded and Hikma Rx.
These divisions are the basis on which the Group reports its segmental information. (See business and financial review section on page 28 for more
details on the business segments performance).
Core operating profit/(loss), defined as ‘segment profit/(loss)’, is the principal measure used in the decision-making and resource allocation process of
the chief operating decision maker, who is the Group’s Chief Executive Officer. Information regarding the Group’s operating segments is reported below:
2025 |
2024 |
|||||
Exceptional items |
Exceptional items |
|||||
2025 |
and other |
2025 |
2024 |
and other |
2024 |
|
Core |
adjustments |
Reported |
Core |
adjustments |
Reported |
|
results |
(Note 6) |
results |
results |
(Note 6) |
results |
|
Injectables |
$m |
$m |
$m |
$m |
$m |
$m |
Revenue |
1,423 |
– |
1,423 |
1,324 |
(18) |
1,306 |
Cost of sales |
(758) |
(16) |
(774) |
(634) |
(4) |
(638) |
Gross profit/(loss) |
665 |
(16) |
649 |
690 |
(22) |
668 |
Operating expenses |
(224) |
(58) |
(282) |
(222) |
(75) |
(297) |
Segment profit |
441 |
(74) |
367 |
468 |
(97) |
371 |
A dd back: depreciation and amortisation |
35 |
52 |
87 |
34 |
51 |
85 |
A dd back: impairment charges |
– |
9 |
9 |
– |
17 |
17 |
Segment profit before depreciation, amortisation and impairment |
476 |
(13) |
463 |
502 |
(29) |
473 |
2025 |
2024 |
|||||
Exceptional items |
Exceptional items |
|||||
2025 |
and other |
2025 |
2024 |
and other |
2024 |
|
Core |
adjustments |
Reported |
Core |
adjustments |
Reported |
|
results |
(Note 6) |
results |
results |
(Note 6) |
results |
|
Branded |
$m |
$m |
$m |
$m |
$m |
$m |
Revenue |
849 |
– |
849 |
769 |
– |
769 |
Cost of sales |
(404) |
– |
(404) |
(367) |
– |
(367) |
Gross profit |
445 |
– |
445 |
402 |
– |
402 |
Operating expenses |
(221) |
3 |
(218) |
(213) |
(7) |
(220) |
Segment profit |
224 |
3 |
227 |
189 |
(7) |
182 |
A dd back: depreciation and amortisation |
34 |
10 |
44 |
30 |
6 |
36 |
A dd back: impairment charges |
– |
1 |
1 |
– |
1 |
1 |
Segment profit before depreciation, amortisation and impairment |
258 |
14 |
272 |
219 |
– |
219 |
2025 |
2024 |
|||||
Exceptional items |
Exceptional items |
|||||
2025 |
and other |
2025 |
2024 |
and other |
2024 |
|
Core |
adjustments |
Reported |
Core |
adjustments |
Reported |
|
results |
(Note 6) |
results |
results |
(Note 6) |
results |
|
Hikma Rx |
$m |
$m |
$m |
$m |
$m |
$m |
Revenue |
1,037 |
– |
1,037 |
1,037 |
(11) |
1,026 |
Cost of sales |
(694) |
– |
(694) |
(680) |
– |
(680) |
Gross profit/(loss) |
343 |
– |
343 |
357 |
(11) |
346 |
Operating expenses |
(164) |
(55) |
(219) |
(187) |
8 |
(179) |
Segment profit |
179 |
(55) |
124 |
170 |
(3) |
167 |
A dd back: depreciation and amortisation |
31 |
38 |
69 |
29 |
35 |
64 |
A dd back: impairment charges/(reversal) |
– |
15 |
15 |
– |
(47) |
(47) |
Segment profit before depreciation, amortisation and impairment |
210 |
(2) |
208 |
199 |
(15) |
184 |
2025 |
2024 |
|||||
Exceptional items |
Exceptional items |
|||||
2025 |
and other |
2025 |
2024 |
and other |
2024 |
|
Core |
adjustments |
Reported |
Core |
adjustments |
Reported |
|
results |
(Note 6) |
results |
results |
(Note 6) |
results |
|
Others¹ |
$m |
$m |
$m |
$m |
$m |
$m |
Revenue |
40 |
– |
40 |
26 |
– |
26 |
Cost of sales |
(36) |
– |
(36) |
(27) |
– |
(27) |
Gross profit/(loss) |
4 |
– |
4 |
(1) |
– |
(1) |
Operating expenses |
(10) |
– |
(10) |
(8) |
– |
(8) |
Segment loss |
(6) |
– |
(6) |
(9) |
– |
(9) |
A dd back: depreciation and amortisation |
5 |
– |
5 |
4 |
– |
4 |
Segment loss before depreciation, amortisation and impairment |
(1) |
– |
(1) |
(5) |
– |
(5) |
1.
Includes the 503B compounding business, the MENA diagnostics business, as well as Arab Medical Containers (AMC), a manufacturer of plastic specialised medicinal sterile containers, and International
Pharmaceuticals Research Centre (IPRC), which conducts bio-equivalency studies.
Notes to the consolidated financial statements
continued
5. Business segments
continued
176
Hikma Pharmaceuticals PLC |
Annual Report 2025
2025 |
2024 |
|||||
Exceptional items |
Exceptional items |
|||||
2025 |
and other |
2025 |
2024 |
and other |
2024 |
|
Core |
adjustments |
Reported |
Core |
adjustments |
Reported |
|
results |
(Note 6) |
results |
results |
(Note 6) |
results |
|
Group |
$m |
$m |
$m |
$m |
$m |
$m |
Segments' profit/(loss) |
838 |
(126) |
712 |
818 |
(107) |
711 |
Add back: segments' depreciation, amortisation |
||||||
and impairment |
105 |
125 |
230 |
97 |
63 |
160 |
Segments' profit/(loss) before depreciation, |
||||||
amortisation and impairment |
943 |
(1) |
942 |
915 |
(44) |
871 |
Unallocated expenses (excluding depreciation, |
||||||
amortisation and impairment) 1 |
(90) |
(72) |
(162) |
(91) |
– |
(91) |
Operating profit/(loss) before depreciation, |
||||||
amortisation and impairment |
853 |
(73) |
780 |
824 |
(44) |
780 |
Segments' depreciation, amortisation and impairment |
(105) |
(125) |
(230) |
(97) |
(63) |
(160) |
Unallocated depreciation and amortisation |
(7) |
– |
(7) |
(8) |
– |
(8) |
Unallocated impairment charges |
– |
(1) |
(1) |
– |
– |
– |
Operating profit/(loss) |
741 |
(199) |
542 |
719 |
(107) |
612 |
Finance income |
11 |
72 |
83 |
8 |
– |
8 |
Finance expense |
(106) |
(1) |
(107) |
(93) |
(74) |
(167) |
Gain from investment at fair value through profit or loss |
||||||
(FVTPL) |
1 |
– |
1 |
1 |
– |
1 |
Group's share of profit of joint venture |
– |
– |
– |
1 |
– |
1 |
Profit/(loss) before tax |
647 |
(128) |
519 |
636 |
(181) |
455 |
Tax |
(139) |
27 |
(112) |
(138) |
45 |
(93) |
Profit/(loss) for the year |
508 |
(101) |
407 |
498 |
(136) |
362 |
Attributable to: |
||||||
Non-controlling interests |
5 |
– |
5 |
3 |
– |
3 |
Equity holders of the parent |
503 |
(101) |
402 |
495 |
(136) |
359 |
1.
Unallocated expenses (excluding depreciation, amortisation and impairment) primarily comprise employee costs, legal settlements (Note 6), professional fees and IT expenses. The increase compared
to the prior year is mainly attributable to legal settlements (Note 6)
The following table provides an analysis of the Group’s non-current assets
2
by geographic area:
2025 |
2024 |
|
$m |
$m |
|
North America |
||
US |
1,470 |
1,518 |
Canada |
29 |
30 |
1,499 |
1,548 |
|
Middle East and North Africa |
||
Jordan |
336 |
344 |
Algeria |
148 |
125 |
Morocco |
103 |
92 |
United Arab Emirates |
99 |
21 |
Saudi Arabia |
87 |
75 |
Others |
85 |
72 |
858 |
729 |
|
Europe and rest of the world |
||
Portugal |
180 |
147 |
Germany |
48 |
40 |
Italy |
33 |
24 |
Others |
35 |
17 |
296 |
228 |
|
United Kingdom |
3 |
7 |
2,656 |
2,512 |
2.
Strategic report
Corporate governance
Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
177
Exceptional items and other adjustments are disclosed separately in the consolidated income statement to assist in the understanding of the
Group’s core performance. Exceptional items and other adjustments have been recognised in accordance with our accounting policy outlined
in Note 2; the details are presented below:
Impact on profit |
||||||||
Injectables |
Branded |
Hikma Rx |
Unallocated |
Total |
Tax effect |
for the year |
||
2025 |
$m |
$m |
$m |
$m |
$m |
$m |
$m |
|
Legal settlements |
SG&A |
– |
– |
– |
(72) |
(72) |
17 |
(55) |
Pre-operational costs |
Cost of sales |
(16) |
– |
– |
– |
(16) |
4 |
(12) |
Insurance compensation in relation to the |
||||||||
Group’s losses in Sudan |
Other operating income |
– |
14 |
– |
– |
14 |
(3) |
11 |
Gain on extinguishment of financial liability |
Other operating income |
6 |
– |
– |
– |
6 |
(1) |
5 |
Reorganisation costs |
SG&A |
(3) |
– |
(2) |
– |
(5) |
1 |
(4) |
Intangible assets amortisation other |
||||||||
than software |
SG&A |
(52) |
(10) |
(38) |
– |
(100) |
20 |
(80) |
Impairment charges on intangible assets, |
||||||||
property, plant and equipment and right- |
Other operating |
|||||||
of-use assets |
expenses |
(9) |
(1) |
(15) |
(1) |
(26) |
6 |
(20) |
Remeasurement of contingent |
||||||||
consideration liabilities |
Finance income |
– |
– |
– |
72 |
72 |
(17) |
55 |
Unwinding of contingent |
||||||||
consideration liability |
Finance expense |
– |
– |
– |
(1) |
(1) |
– |
(1) |
Exceptional items and other adjustments |
(74) |
3 |
(55) |
(2) |
(128) |
27 |
(101) |
–
Legal settlements: The Group reached an agreement to resolve all antitrust lawsuits brought against Hikma Pharmaceuticals USA Inc. by third-
parties in the US who have purchased or been billed for Xyrem® (Sodium Oxybate). The agreed-upon settlement is not an admission of
wrongdoing or legal liability. The Group settled a total of approximately $72 million to cover for all related cases in July 2025. These matters have
been previously disclosed as contingent liabilities
–
Pre-operational costs: $16 million related to the manufacturing plant acquired through the Xellia business combination in September 2024.
These costs are incurred during the pre-operational phase and primarily relate to operational readiness, routine maintenance, and the
recruitment and training of personnel. These activities are projected to conclude at the end of 2027, at which point the facility is expected to be
fully operational. The estimated cost for 2026 is approximately $18 million. Commissioning and refurbishment activities are ongoing, and costs
that are directly attributable to bringing the plant to the condition necessary for its intended use are capitalised in accordance with IAS 16.
–
Insurance compensation in relation to the Group’s losses in Sudan of $14 million (Note 7)
–
Gain on extinguishment of financial liability: $6 million resulting from a settlement agreement that reduced a financial liability related to the
acquisition of a product-related intangible asset that was previously impaired
–
Reorganisation costs: $5 million of reorganisation costs related to a global restructuring program that started in 2024. This program delivers
efficiencies across various Group functions, including R&D, benefitting from the integration of the Xellia business
–
Intangible assets amortisation other than software of $100 million (Note 13)
–
Impairment charges: $26 million of which $15 million are related to intangible assets which mainly comprised $13 million of product-related
intangible assets following the discontinuation of pipeline products, $10 million related to property, plant and equipment associated with
discontinued projects and $1 million related to right-of-use assets (Notes 7, 13, 14 and 15)
–
Remeasurement of contingent considerations liabilities: $72 million represents finance income which primarily resulted from the adjustment
of royalty payment arrangements with certain of the Group's business partners, as well as the revaluation of liabilities associated with future
contingent consideration payments recognised through business combinations (Notes 8, 25, 28 and 31)
–
Unwinding of contingent consideration liability: $1 million represents the finance expense resulting from the unwinding of contingent
consideration liability recognised through business combinations (Notes 9, 25, 28 and 31)
Tax effect
–
This represents the tax effect on pre-tax exceptional items and other adjustments which is calculated based on the applicable tax rate in each
applicable jurisdiction
Notes to the consolidated financial statements
continued
6. Exceptional items and other adjustments
continued
178
Hikma Pharmaceuticals PLC |
Annual Report 2025
In the previous year, exceptional items and other adjustments were related to the following:
Impact on profit |
||||||||
Injectables |
Branded |
Hikma Rx |
Unallocated |
Total |
Tax effect |
for the year |
||
2024 |
$m |
$m |
$m |
$m |
$m |
$m |
$m |
|
Provision for rebates adjustment |
Revenue |
(18) |
– |
(11) |
– |
(29) |
7 |
(22) |
Pre-operational costs |
Cost of sales |
(4) |
– |
– |
– |
(4) |
1 |
(3) |
Reorganisation costs |
SG&A |
(7) |
– |
(4) |
– |
(11) |
2 |
(9) |
Intangible assets amortisation other |
||||||||
than software |
SG&A |
(51) |
(6) |
(35) |
– |
(92) |
25 |
(67) |
Impairment reversals on intangible assets |
||||||||
and property, plant and equipment |
Other operating income |
– |
– |
60 |
– |
60 |
(14) |
46 |
Impairment charges on intangible assets |
||||||||
and property, plant and equipment |
Other operating expenses |
(17) |
(1) |
(13) |
– |
(31) |
7 |
(24) |
Remeasurement of contingent |
||||||||
consideration and other financial liability |
Finance expense |
– |
– |
– |
(71) |
(71) |
16 |
(55) |
Unwinding of contingent consideration and |
||||||||
other financial liability |
Finance expense |
– |
– |
– |
(3) |
(3) |
1 |
(2) |
Exceptional items and other adjustments |
(97) |
(7) |
(3) |
(74) |
(181) |
45 |
(136) |
–
Provision for rebates adjustment: $29 million represents a change in historical estimates in relation to prior years rebates
–
Pre-operational costs: $4 million of costs incurred during the pre-operational phase of the manufacturing plant acquired through the Xellia
business combination.
–
Reorganisation costs: $11 million of reorganisation costs related to a global restructuring program. This program will improve efficiencies across
various Group functions, including R&D activities benefitting from the integration of the Xellia business
–
Intangible assets amortisation other than software of $92 million (Note 13)
–
Impairment reversals: $60 million related to complex respiratory CGU, primarily driven by improved performance and sustained forecasted
profitability. Of this amount, $44 million was allocated to intangible assets and $16 million to property, plant and equipment (Notes 7, 13 and 14)
–
Impairment charges: $22 million impairment on intangible assets mainly comprises $14 million related to marketing rights following the
termination of business development contracts and $8 million related to a product-related intangible asset due to the discontinuation of a
pipeline product (Notes 7 and 13). Additionally, there were impairment charges on property, plant and equipment of $9 million mainly related
to machinery and equipment associated with discontinued projects (Notes 7 and 14)
–
Remeasurement of contingent consideration and other financial liability: $71 million represents the finance expense resulting from the valuation
of the liabilities associated with the future contingent payments in respect of contingent consideration recognised through business
combinations (Notes 9, 25, 28 and 31)
–
Unwinding of contingent consideration and other financial liability: $3 million represents the finance expense resulting from the unwinding
2025 |
2024 |
|||||
Exceptional items |
Exceptional items |
|||||
2025 |
and other |
2025 |
2024 |
and other |
2024 |
|
Core |
adjustments |
Reported |
Core |
adjustments |
Reported |
|
results |
(Note 6) |
results |
results |
(Note 6) |
results |
|
Other operating expenses |
$m |
$m |
$m |
$m |
$m |
$m |
Impairment charges (Notes 6, 13, 14 and 15) |
– |
26 |
26 |
– |
31 |
31 |
Foreign exchange loss, net |
7 |
– |
7 |
16 |
– |
16 |
Others |
2 |
– |
2 |
5 |
– |
5 |
9 |
26 |
35 |
21 |
31 |
52 |
2025 |
2024 |
|||||
Exceptional items |
Exceptional items |
|||||
2025 |
and other |
2025 |
2024 |
and other |
2024 |
|
Core |
adjustments |
Reported |
Core |
adjustments |
Reported |
|
results |
(Note 6) |
results |
results |
(Note 6) |
results |
|
Other operating income |
$m |
$m |
$m |
$m |
$m |
$m |
Insurance compensation in relation to the Group’s |
||||||
losses in Sudan (Note 6) |
– |
14 |
14 |
– |
– |
– |
Gain on extinguishment of financial liability (Note 6) |
– |
6 |
6 |
– |
– |
– |
Impairment reversals (Notes 6, 13 and 14) |
– |
– |
– |
– |
60 |
60 |
Others |
11 |
– |
11 |
3 |
– |
3 |
11 |
20 |
31 |
3 |
60 |
63 |
Strategic report
Corporate governance
Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
179
2025 |
2024 |
|||||
Exceptional items |
Exceptional items |
|||||
2025 |
and other |
2025 |
2024 |
and other |
2024 |
|
Core |
adjustments |
Reported |
Core |
adjustments |
Reported |
|
results |
(Note 6) |
results |
results |
(Note 6) |
results |
|
$m |
$m |
$m |
$m |
$m |
$m |
|
Remeasurement of contingent consideration liabilities |
||||||
(Notes 6, 25, 28 and 31) |
– |
72 |
72 |
– |
– |
– |
Interest income |
6 |
– |
6 |
8 |
– |
8 |
Others |
5 |
– |
5 |
– |
– |
– |
11 |
72 |
83 |
8 |
– |
8 |
2025 |
2024 |
|||||
Exceptional items |
Exceptional items |
|||||
2025 |
and other |
2025 |
2024 |
and other |
2024 |
|
Core |
adjustments |
Reported |
Core |
adjustments |
Reported |
|
results |
(Note 6) |
results |
results |
(Note 6) |
results |
|
$m |
$m |
$m |
$m |
$m |
$m |
|
Interest on borrowings |
82 |
– |
82 |
72 |
– |
72 |
Bank commissions and charges |
14 |
– |
14 |
13 |
– |
13 |
Net foreign exchange loss |
4 |
– |
4 |
5 |
– |
5 |
Lease accretion of interest (Note 15) |
3 |
– |
3 |
3 |
– |
3 |
Unwinding and remeasurement of contingent |
||||||
consideration and other financial liabilities |
||||||
(Notes 6, 25, 28 and 31) |
– |
1 |
1 |
– |
74 |
74 |
Others |
3 |
– |
3 |
– |
– |
– |
106 |
1 |
107 |
93 |
74 |
167 |
2025 |
2024 |
|||||
Exceptional items |
Exceptional items |
|||||
2025 |
and other |
2025 |
2024 |
and other |
2024 |
|
Core |
adjustments |
Reported |
Core |
adjustments |
Reported |
|
results |
(Note 6) |
results |
results |
(Note 6) |
results |
|
$m |
$m |
$m |
$m |
$m |
$m |
|
Current tax |
||||||
Current year |
140 |
(19) |
121 |
142 |
(2) |
140 |
Adjustment to prior years |
4 |
– |
4 |
18 |
– |
18 |
Deferred tax |
||||||
Current year |
(5) |
(8) |
(13) |
1 |
(43) |
(42) |
Adjustment to prior year |
– |
– |
– |
(23) |
– |
(23) |
139 |
(27) |
112 |
138 |
(45) |
93 |
The Group incurred a tax expense of $112 million (2024: $93 million); the reported and core effective tax rates are 21.6% and 21.5% respectively
(2024: 20.4% and 21.7% respectively). The reported effective tax rate is lower than the standard rate primarily due to the earnings mix.
Notes to the consolidated financial statements
continued
10. Tax
continued
180
Hikma Pharmaceuticals PLC |
Annual Report 2025
The charge for the year can be reconciled to profit before tax per the consolidated income statement as follows:
2025 |
2024 |
|
$m |
$m |
|
Profit before tax |
519 |
455 |
Tax at the UK corporation tax rate of 25% (2024: 25%) |
130 |
114 |
Effect of rates different than the UK rate |
(28) |
(32) |
Change in uncertain tax positions |
(8) |
(2) |
Permanent differences |
4 |
6 |
Other local taxes and reliefs |
9 |
5 |
Pillar 2 Top up Tax |
3 |
7 |
Prior year adjustments |
4 |
(5) |
Movement in recognition of deferred taxes |
(2) |
(1) |
Unremitted earnings |
– |
1 |
Tax expense for the year |
112 |
93 |
The change in the uncertain tax positions relates to the balance the Group holds in the event a revenue authority successfully takes an adverse view
of the positions adopted by the Group in 2025 and prior years. As at 31 December 2025, the Group’s uncertain tax positions, excluding advanced
payments, amounted to $38 million (2024: $54 million). In 2025, the total movement on the uncertain tax positions was $16 million. Of this amount,
$8 million was released to the consolidated income statement due to resolution of tax audits, and $8 million relates to agreed-upon settlement. If all
identifiable areas of uncertainty were audited and all areas resulted in an adverse outcome, management does not believe any material additional tax
would be payable beyond what is provided.
Global minimum tax – Pillar Two
Pillar Two legislation has been enacted, or substantively enacted, in certain jurisdictions where the Group operates. The legislation became effective
for the Group’s financial year beginning 1 January 2024. The Group is in scope of the enacted or substantively enacted legislation and has performed
an assessment of the Group’s potential exposure to Pillar Two income taxes for the year ended on 31 December 2025.
The assessment of the potential exposure to Pillar Two income taxes is based on the most recent information available regarding the financial
performance of the constituent entities in the Group. The potential exposure comes from the constituent entities (mainly operating subsidiaries)
in these jurisdictions where the expected Pillar Two effective tax rate is below 15%. The top up tax has been calculated in accordance with the OECD
guidance and has been included in the tax amounts disclosed above. We estimate that the total Pillar Two top up tax to be $3 million (2024: $7 million).
The Group is continuing to assess the impact of the Pillar Two income taxes legislation and related updates on its future financial performance.
Recognition of deferred tax assets
The recognition of deferred tax assets is based on the current forecast of taxable profits arising in the jurisdiction in which the deferred tax asset arises,
including taxable amounts expected to arise from the reversal of deferred tax liabilities. This exercise is reviewed each year and, to the extent forecasts
change, an adjustment to the recognised deferred tax asset may be made.
Recognition of deferred tax assets is driven by the Group’s ability to utilise the deferred tax asset which is reliant on forecast taxable profits arising in
the jurisdiction in which losses are incurred.
Deferred tax assets and liabilities have been offset only where it is appropriate to do so. The following is the analysis of the deferred tax balances
(after offset) for financial reporting purposes:
| As at 31 December |
||
2025 |
2024 |
|
$m |
$m |
|
Deferred tax assets |
307 |
293 |
Deferred tax liabilities |
(16) |
(18) |
291 |
275 |
|
Strategic report
Corporate governance
Financial statements
10. Tax
continued
Hikma Pharmaceuticals PLC |
Annual Report 2025
181
The table below represents the deferred tax movement in 2025 and 2024:
Returns and |
Other |
||||||
inventory-related |
Intangible |
provisions |
Unremitted |
Research and |
|||
provision |
assets 1 |
and accruals |
earnings |
Development |
Others |
Total |
|
$m |
$m |
$m |
$m |
$m |
$m |
$m |
|
Balance at 1 January 2024 |
90 |
54 |
59 |
(3) |
– |
1 |
201 |
Credit/(charge) to income |
16 |
20 |
(1) |
(1) |
13 |
18 |
65 |
Equity adjustment |
– |
– |
– |
– |
– |
1 |
1 |
Currency translation impact |
(1) |
1 |
(1) |
– |
– |
9 |
8 |
Reclassification |
– |
– |
– |
– |
29 |
(29) |
– |
Balance at 31 December 2024 and |
|||||||
1 January 2025 |
105 |
75 |
57 |
(4) |
42 |
– |
275 |
Credit/(charge) to income |
4 |
(10) |
(2) |
– |
6 |
15 |
13 |
Currency translation impact |
– |
– |
1 |
– |
– |
2 |
3 |
Balance at 31 December 2025 |
109 |
65 |
56 |
(4) |
48 |
17 |
291 |
1.
Intangibles category includes items related to contingent liabilities
The Group has a potential deferred tax asset of $480 million (2024: $457 million) of which $307 million (2024: $293 million) has been recognised.
The unrecognised deferred tax asset comprises of tax losses, short term timing differences and non-refundable tax credits.
No deferred tax asset has been recognised on gross temporary differences totalling $287 million (2024: $273 million), with a tax effect of $60 million
mainly due to the unpredictability of the related future profit streams. Of these gross temporary differences, $230 million (2024: $205 million) relate
to losses, of which $192 million are UK losses that don’t expire. No deferred tax is recognised against the losses due to significant uncertainty regarding
future taxable income forecasts in the relevant jurisdictions. None of the non-UK losses are expected to expire in 2026. The remaining $57 million
represent other short-term temporary differences that relate to multiple jurisdictions.
In addition, there has been no change to the position of the Cantonal tax credits in Switzerland of $114 million (CHF90 million) granted in 2024. These
Swiss non-refundable tax credits can be utilised over a 10-year period from the fiscal year 2024 until they expire in 2033. We continue not to recognise
a deferred tax asset on this item.
During the year, there has been no movement on the deferred tax liability recognised on temporary differences relating to the unremitted earnings
of overseas subsidiaries (2024: $1 million increase). No deferred tax liability has been recognised on the remaining unremitted earnings of $578 million
(2024: $499 million), as the Group is able to control the timing of the reversal of these temporary differences and it is probable that they will not reverse
in the foreseeable future.
Mandatory temporary exception
The Group has applied the temporary exception issued by the IASB in May 2023 from the accounting requirements for deferred taxes in IAS 12.
Notes to the consolidated financial statements
continued
182
Hikma Pharmaceuticals PLC |
Annual Report 2025
Basic EPS is calculated by dividing the profit attributable to equity holders of the parent by the weighted average number of Ordinary Shares in free
issue during the year after deducting Treasury shares and shares held in the employee benefit trust (EBT) (Note 29). Treasury shares have no right to
receive dividends, and the employee benefit trust (EBT) has waived its entitlement to dividends. However, while the voting rights attached to treasury
shares are not exercisable, shares in the EBT retain their voting rights.
Diluted EPS is calculated after adjusting the weighted average number of Ordinary Shares used in the basic EPS calculation for the conversion of all
potentially dilutive Ordinary Shares.
Core basic and diluted EPS are intended to highlight the core results of the Group before exceptional items and other adjustments.
2025 | 2024 | |||||
Exceptional items | Exceptional items | |||||
2025 | and other | 2025 | 2024 | and other | 2024 | |
Core | adjustments | Reported | Core | adjustments | Reported | |
results | (Note 6) | results | results | (Note 6) | results | |
$m | $m | $m | $m | $m | $m | |
Profit attributable to equity holders of the parent | 503 | (101) | 402 | 495 | (136) | 359 |
The weighted average number of ordinary shares in free issue used in calculating basic and diluted EPS is shown below:
2025 | 2024 | |
Number | Number | |
Basic EPS | 220,587,683 | 221,333,249 |
Effect of potentially dilutive Ordinary Shares from share-based awards | 2,096,488 | 2,160,072 |
Diluted EPS | 222,684,171 | 223,493,321 |
The basic and diluted EPS are as follows:
2025 | 2025 | 2024 | 2024 | |
Core | Reported | Core | Reported | |
Cents | Cents | Cents | Cents | |
Basic EPS | 228 | 182 | 224 | 162 |
Diluted EPS | 226 | 181 | 221 | 161 |
The amounts recognised as distributions to equity holders in the year were as follows:
Paid in | Paid in | |
2025 | 2024 | |
$m | $m | |
Final dividend for the year ended 31 December 2024 of 48 cents (31 December 2023: 47 cents) per share | 106 | 104 |
Interim dividend during the year ended 31 December 2025 of 36 cents (31 December 2024: 32 cents) per share | 79 | 71 |
185 | 175 |
The proposed final dividend for the year ended 31 December 2025 is 48 cents (2024: 48 cents).
The proposed final dividend is subject to approval by shareholders at the Annual General Meeting on 23 April 2026 and has not been included as a
liability in these consolidated financial statements. Based on the number of shares in free issue at 31 December 2025 (220,106,915), the final dividend
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Corporate governance
Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
183
The changes in the carrying value of goodwill and other intangible assets for the years ended 31 December 2025 and 31 December 2024 are as follows:
Goodwill |
Other intangible assets |
||||
Product-related |
Other identified |
||||
intangibles |
Software |
intangibles |
Total |
||
$m |
$m |
$m |
$m |
$m |
|
Cost |
|||||
Balance at 1 January 2024 |
796 |
1,422 |
138 |
317 |
2,673 |
Additions |
– |
24 |
– |
49 |
73 |
Translation adjustments |
(8) |
(7) |
(1) |
(2) |
(18) |
Business combination |
2 |
73 |
– |
– |
75 |
Balance at 31 December 2024 and 1 January 2025 |
790 |
1,512 |
137 |
364 |
2,803 |
Additions |
– |
104 |
2 |
17 |
123 |
Disposals |
– |
– |
(1) |
– |
(1) |
Translation adjustments |
11 |
2 |
– |
6 |
19 |
Balance at 31 December 2025 |
801 |
1,618 |
138 |
387 |
2,944 |
Accumulated amortisation and impairment |
|||||
Balance at 1 January 2024 |
(408) |
(878) |
(107) |
(180) |
(1,573) |
Charge for the year |
– |
(72) |
(8) |
(20) |
(100) |
Impairment reversal |
– |
44 |
– |
– |
44 |
Impairment charge |
– |
(8) |
– |
(14) |
(22) |
Translation adjustments |
– |
2 |
– |
2 |
4 |
Balance at 31 December 2024 and 1 January 2025 |
(408) |
(912) |
(115) |
(212) |
(1,647) |
Charge for the year |
– |
(80) |
(8) |
(20) |
(108) |
Disposals |
– |
– |
1 |
– |
1 |
Impairment charge |
– |
(13) |
– |
(2) |
(15) |
Translation adjustments |
– |
(1) |
– |
(4) |
(5) |
Balance at 31 December 2025 |
(408) |
(1,006) |
(122) |
(238) |
(1,774) |
Carrying amount |
|||||
At 31 December 2025 |
393 |
612 |
16 |
149 |
1,170 |
At 31 December 2024 |
382 |
600 |
22 |
152 |
1,156 |
Of the total intangible assets other than goodwill, $137 million (2024: $157 million) are not yet available for use.
Goodwill
Goodwill is allocated from the acquisition date to the CGUs that are expected to benefit from the synergies of the business combination. The carrying
amount of goodwill has been allocated as follows:
| As at 31 December |
||
2025 |
2024 |
|
$m |
$m |
|
Injectables |
231 |
227 |
Branded |
162 |
155 |
Total |
393 |
382 |
In accordance with the Group policy, goodwill is tested annually for impairment during the fourth quarter or more frequently if there are indicators that
goodwill may be impaired. The impairment test was performed by calculating the recoverable amount of the CGUs to which the goodwill is allocated,
based on discounted cash flows by applying an appropriate discount rate that reflects the risk factors associated with the cash flows under which
these CGUs sit. These values are then compared to the carrying value of the CGUs to determine whether an impairment is required.
Notes to the consolidated financial statements
continued
13. Goodwill and other intangible assets
continued
184
Hikma Pharmaceuticals PLC |
Annual Report 2025
CGUs impairment testing
Details related to the discounted cash flow models used in the impairment tests of the CGUs are as follows:
Valuation basis, terminal growth rate | Terminal growth rate | ||||||
| and discount rate | (perpetuity) | Discount rate | |||||
Valuation basis | 2025 | 2024 | 2025 | 2024 | |||
Injectables | VIU | 2.5% | 2.5% | 12.6% | 12.6% | Pre−tax | |
Branded | VIU | 2.4% | 2.4% | 14.3% | 14.3% | Pre−tax | |
Hikma Rx | VIU | 1.0% | 1.0% | 12.8% | 10.7% | Pre−tax | |
Complex respiratory | n/a | – | – 1 | n/a | 8.1% | Post-tax | |
| Key assumptions | – Revenue and cash flow forecasts (including market size, estimated market share, number of | ||||||
competitors, net selling prices and profit margins for marketed and pipeline products) | |||||||
– Expected launch dates for pipeline products | |||||||
– Terminal growth rates | |||||||
– Discount rates | |||||||
Determination of assumptions | – Growth rates are internal forecasts based on both internal and external market information, | ||||||
informed by historical experience and management’s best estimates of the future | |||||||
– Margins reflect past experience, adjusted for expected changes in the future | |||||||
– Establishing the launch date and probability of a successful product approval for | |||||||
pipeline products | |||||||
– Terminal growth rates are based on the Group’s experience in its markets | |||||||
– Discount rates for each CGU are derived from specific regions/countries | |||||||
Period of specific projected cash flows | 5 years | ||||||
1.
In 2024, the majority of projected cash flows for the Complex respiratory CGU extended over a seven-year period
Complex respiratory CGU
The Group carried out an impairment trigger assessment for the Complex Respiratory CGU. Based on this assessment, no indicators of impairment
or reversal of previous impairments were identified for the CGU during the period.
In 2024, the Group evaluated the recoverable amount of the CGU using a fair value less costs of disposal (FVLCD) model, being the higher value
compared to value in use (VIU). The evaluation yielded a recoverable amount of $127 million, which resulted in an impairment reversal of $60 million,
with $44 million allocated to intangible assets and $16 million to property, plant and equipment on a pro rata basis.
Injectables and Branded CGUs
In accordance with IAS 36, the Group conducted its annual impairment test for the Injectables and Branded CGUs by carrying forward the most recent
detailed calculations of their recoverable amounts from 2023 and 2024, respectively. This approach was considered appropriate as the assets and
liabilities of the CGUs have not changed significantly since the most recent recoverable amount calculations, and the previous calculations indicated
that the recoverable amount significantly exceeded the carrying amount for both CGUs. Additionally, an analysis of events and changes in
circumstances since the prior assessments indicated that the likelihood of the current recoverable amount being lower than the carrying amount for
both CGUs is remote.
Hikma Rx CGU
The Group conducted its annual impairment test for the Hikma Rx CGU, as it includes material intangible assets not yet available for use. The valuation
did not result in any impairment for the CGU and indicated that sufficient headroom exists even under reasonable changes in key assumptions.
In 2024, the Group conducted an impairment test for the Hikma Rx CGU, and the valuation did not result in any impairment for the CGU.
The Group monitors the development of climate-related risks and assessed the qualitative and quantitative impact which is not expected to have
a material impact on the consolidated financial statements nor the recoverable amount of the CGUs (See pages 66 to 79).
Strategic report
Corporate governance
Financial statements
13. Goodwill and other intangible assets
continued
Hikma Pharmaceuticals PLC |
Annual Report 2025
185
Product-related intangible assets
Product rights not yet available for use
Product rights not yet available for use amounts to $94 million (2024: $84 million); no amortisation has been charged against them. The Group
performs an impairment review of these assets annually. The result of this test was an impairment charge of $7 million in the Injectables segment
and $6m in the Hikma Rx segment due to the discontinuation of pipeline products (2024: $8 million in the Injectables segment).
Product rights
Product rights consist of marketed products of $518 million (2024: $516 million) which include two products in the injectables CGU valued at
$107 million (2024: $118 million) and $48 million (2024: $52 million) with a remaining useful life of ten years and fourteen years, respectively. Product
rights also include a product in the Complex respiratory CGU valued at $104 million (2024: $120 million) with a remaining useful life of six years.
The product rights have an average estimated useful life of twelve years.
Software
Software intangibles mainly represent the Enterprise Resource Planning solutions that are implemented in different operations across the Group in
addition to other software applications, of which $1 million is not yet available for use (2024: $1 million). The software has an average estimated useful
life that varies from three to ten years.
As at 31 December 2025, no impairment charge was identified (2024: $nil).
Other identified intangibles
Other identified intangibles comprise marketing rights, customer relationships and trade names of $149 million (2024: $152 million) of which $42 million
represent assets not yet available for use (2024: $72 million). The Group performs an impairment review of other identified intangible assets that are
not yet available for use annually, and performs impairment trigger assessment for assets in use. The result of this test was an impairment charge of
$2 million in the Injectables segment due to the discontinuation of a marketing rights contract (2024: $14 million).
Marketing rights
Marketing rights are amortised over their useful lives commencing in the year in which the rights are ready for use with estimated useful lives varying
from two to ten years.
Customer relationships
Customer relationships represent the value attributed to existing direct customers that the Group acquired on business combinations. The customer
relationships have an average estimated useful life of fifteen years.
Trade names
Notes to the consolidated financial statements
continued
186
Hikma Pharmaceuticals PLC |
Annual Report 2025
Land and |
Machinery and |
Vehicles, fixtures |
Projects under |
||
buildings |
equipment |
and equipment |
construction |
Total |
|
$m |
$m |
$m |
$m |
$m |
|
Cost |
|||||
Balance at 1 January 2024 |
797 |
894 |
148 |
272 |
2,111 |
Additions |
6 |
21 |
10 |
133 |
170 |
Disposals |
(1) |
(16) |
(5) |
– |
(22) |
Transfers |
12 |
31 |
10 |
(53) |
– |
Business combination |
52 |
1 |
– |
62 |
115 |
Translation adjustment |
(15) |
(21) |
(6) |
(5) |
(47) |
Balance at 31 December 2024 and 1 January 2025 |
851 |
910 |
157 |
409 |
2,327 |
Additions |
7 |
25 |
11 |
153 |
196 |
Disposals |
– |
(7) |
(6) |
– |
(13) |
Transfers |
52 |
41 |
12 |
(105) |
– |
Translation adjustment |
23 |
26 |
4 |
11 |
64 |
Reclassification |
– |
(7) |
– |
9 |
2 |
Balance at 31 December 2025 |
933 |
988 |
178 |
477 |
2,576 |
Accumulated depreciation and impairment |
|||||
Balance at 1 January 2024 |
(278) |
(546) |
(124) |
(67) |
(1,015) |
Charge for the year |
(24) |
(48) |
(15) |
– |
(87) |
Disposals |
1 |
16 |
5 |
– |
22 |
Impairment reversal |
1 |
15 |
– |
– |
16 |
Impairment charges |
(1) |
(3) |
– |
(5) |
(9) |
Translation adjustment |
7 |
13 |
4 |
– |
24 |
Balance at 31 December 2024 and 1 January 2025 |
(294) |
(553) |
(130) |
(72) |
(1,049) |
Charge for the year |
(27) |
(52) |
(15) |
– |
(94) |
Disposals |
– |
6 |
5 |
– |
11 |
Impairment charges |
– |
(2) |
– |
(8) |
(10) |
Translation adjustment |
(8) |
(17) |
(3) |
– |
(28) |
Reclassification |
– |
(7) |
14 |
(9) |
(2) |
Balance at 31 December 2025 |
(329) |
(625) |
(129) |
(89) |
(1,172) |
Carrying amount |
|||||
At 31 December 2025 |
604 |
363 |
49 |
388 |
1,404 |
At 31 December 2024 |
557 |
357 |
27 |
337 |
1,278 |
Land is not subject to depreciation.
None of the Group's property, plant and equipment are pledged as collateral for long-term loans as at 31 December 2025 (2024: $nil).
As at 31 December 2025, the Group had entered into contractual commitments for the acquisition of property, plant and equipment amounting to
$96 million (2024: $79 million).
During the year ended 31 December 2025, $5 million of borrowing costs have been capitalised (2024: $3 million).
In 2025, the Group recognised an impairment charge of $10 million in relation to machinery and equipment associated with discontinued projects
mainly within the Hikma Rx CGU (Notes 6 and 7). In 2024, the Group recognised an impairment charge of $9 million mainly in relation to machinery
and equipment associated with discontinued projects and impairment reversal of $16 million mainly related to machinery and equipment within the
Strategic report
Corporate governance
Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
187
The carrying amounts of right-of-use assets recognised and the movements during the year were as follows:
Buildings |
Vehicles |
Total |
|
$m |
$m |
$m |
|
At 1 January 2024 |
40 |
5 |
45 |
Additions |
3 |
8 |
11 |
Business combination |
2 |
– |
2 |
Depreciation expense |
(6) |
(4) |
(10) |
Balance at 31 December 2024 and 1 January 2025 |
39 |
9 |
48 |
Additions |
6 |
2 |
8 |
Retirements |
(1) |
– |
(1) |
Depreciation expense |
(7) |
(3) |
(10) |
Impairment charge |
(1) |
– |
(1) |
Balance at 31 December 2025 |
36 |
8 |
44 |
The carrying amounts of lease liabilities and the movements during the year were as follows:
2025 |
2024 |
|
$m |
$m |
|
At 1 January |
57 |
66 |
Additions |
8 |
11 |
Business combination |
– |
2 |
Accretion of interest (Note 9) |
3 |
3 |
Retirements |
(1) |
(1) |
Repayments |
(14) |
(24) |
Balance at 31 December |
53 |
57 |
Current |
8 |
11 |
Non-current |
45 |
46 |
The following is the maturity analysis of lease liabilities:
2025 |
2024 |
|
$m |
$m |
|
Breakdown by maturity: |
||
Within one year |
8 |
11 |
In the second year |
6 |
7 |
In the third year |
5 |
5 |
In the fourth year |
4 |
4 |
In the fifth year |
3 |
3 |
In the sixth year |
2 |
2 |
Thereafter |
25 |
25 |
53 |
57 |
At 31 December 2025, lease liabilities included optional extension periods amounting to $20 million on a discounted basis (2024: $19 million).
The following are the amounts recognised in the consolidated income statement:
2025 |
2024 |
|
$m |
$m |
|
Depreciation expense of right-of-use assets |
(10) |
(10) |
Impairment of right-of-use assets |
(1) |
– |
Interest expense on lease liabilities |
(3) |
(3) |
Expense relating to short-term leases |
(6) |
(4) |
Total amount recognised in the consolidated income statement |
(20) |
(17) |
Notes to the consolidated financial statements
continued
188
Hikma Pharmaceuticals PLC |
Annual Report 2025
The Group’s share in Hubei Haosun Pharmaceutical Co., Ltd. was 49% at 31 December 2025 (2024: 49%) with an investment balance of $11 million at
31 December 2025 (2024: $11 million). The Group’s share of the profit for the year ended 31 December 2025 was $0.3 million (2024: $1.2 million) and
dividends received were $1 million (2024: $nil).
Summarised financial information in respect of the Group’s interests in Hubei Haosun Pharmaceutical Co., Ltd. is set out below:
| As at 31 December |
||
2025 |
2024 |
|
$m |
$m |
|
Total assets |
24 |
25 |
Total liabilities |
(5) |
(5) |
Net assets |
19 |
20 |
Group's share of net assets of joint venture |
9 |
10 |
For the |
For the |
|
year ended |
year ended |
|
31 December |
31 December |
|
2025 |
2024 |
|
$m |
$m |
|
Total revenue |
6 |
8 |
Net profit |
1 |
2 |
Group's share of profit of joint venture |
– |
1 |
| As at 31 December |
||
2025 |
2024 |
|
$m |
$m |
|
Investments at FVTOCI |
40 |
51 |
Advance payment related to non-financial assets |
19 |
19 |
Long-term prepayments |
8 |
– |
Other financial assets |
25 |
14 |
92 |
84 |
|
Investments at FVTOCI
include investments which are not held for trading and which the Group irrevocably designated as measured at fair value
through other comprehensive income.
During the year, the Group increased its investment in four existing ventures by $3 million.
The total portfolio as at 31 December 2025 includes investments in unlisted shares without readily determinable fair values that fall under level 3
valuation (Note 31). The fair value is estimated by management based on the cost of investment and adjusted as necessary for impairment and
revaluations with reference to relevant available information and recent financing rounds.
During the year, the total change in fair value was a net loss of $13 million (2024: $6 million net loss) recognised as other comprehensive expense.
Advance payment related to non-financial assets
represents cash paid in advance that will be mainly utilised against the future acquisition of product
licences, materials or finished products.
Other financial assets
Strategic report
Corporate governance
Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
189
| As at 31 December |
||
2025 |
2024 |
|
$m |
$m |
|
Finished goods |
510 |
409 |
Work-in-progress |
137 |
113 |
Raw and packing materials |
466 |
490 |
Goods in transit |
66 |
36 |
Spare parts |
59 |
52 |
Provisions against inventory |
(132) |
(114) |
1,106 |
986 |
|
The movements in the provisions against inventory are as follows:
Translation |
As at |
||||
As at 1 January |
Additions |
Utilisation |
adjustments |
31 December |
|
$m |
$m |
$m |
$m |
$m |
|
Provisions against inventory in 2025 |
114 |
96 |
(79) |
1 |
132 |
Provisions against inventory in 2024 |
111 |
51 |
(41) |
(7) |
114 |
The cost of inventory recognised as an expense within cost of sales in the consolidated income statement was $1,869 million (2024: $1,671 million),
| As at 31 December |
||
2025 |
2024 |
|
$m |
$m |
|
Gross trade receivables |
1,393 |
1,362 |
Chargebacks and other allowances |
(320) |
(391) |
Expected credit loss allowance |
(76) |
(75) |
Net trade receivables |
997 |
896 |
VAT and sales tax recoverable |
55 |
44 |
Other receivables |
9 |
9 |
Net trade and other receivables |
1,061 |
949 |
The fair value of receivables is estimated to be not significantly different from the respective carrying amounts.
The movement in chargebacks and other allowances and expected credit loss allowance is as follows:
As at |
|||||
31 December 2024 |
Translation |
As at |
|||
and 1 January 2025 |
Additions, net |
Utilisation |
adjustments |
31 December 2025 |
|
$m |
$m |
$m |
$m |
$m |
|
Chargebacks and other allowances |
391 |
2,596 |
(2,667) |
– |
320 |
Expected credit loss allowance |
75 |
1 |
– |
– |
76 |
466 |
2,597 |
(2,667) |
– |
396 |
As at |
|||||
31 December 2023 |
As at |
||||
and 1 January |
Translation |
31 December |
|||
2024 |
Additions, net |
Utilisation |
adjustments |
2024 |
|
$m |
$m |
$m |
$m |
$m |
|
Chargebacks and other allowances |
352 |
2,758 |
(2,719) |
– |
391 |
Expected credit loss allowance |
81 |
2 |
– |
(8) |
75 |
433 |
2,760 |
(2,719) |
(8) |
466 |
More details on the Group’s policy for credit and concentration risk are provided in Note 30.
Notes to the consolidated financial statements
continued
19. Trade and other receivables
continued
190
Hikma Pharmaceuticals PLC |
Annual Report 2025
At 31 December 2025, the provision balance relating to chargebacks amounted to $212 million (2024: $273 million). Based on the conditions existing
at the balance sheet date, a decrease by one hundred basis-points in the overall chargeback rate of 58% (2024: 57%) would reduce the provision by
approximately $4 million (2024: approximately $5 million).
At 31 December 2025, the provision balance relating to customer rebates amounted to $38 million (2024: $45 million). Based on the conditions
existing at the balance sheet date, a decrease by fifty basis-points in the rebates rate of 3.8% (2024: 4.4%) would reduce the provision by
| As at 31 December |
||
2025 |
2024 |
|
$m |
$m |
|
Cash at banks and on hand 1 |
157 |
127 |
Time deposits |
43 |
59 |
Money market deposits |
17 |
2 |
217 |
188 |
|
1.
In 2025, cash at banks included $76 million placed in interest-bearing accounts (2024: $24 million)
Money market deposits comprise investment in funds at FVTPL that are subject to insignificant risk of changes in fair value and can be readily
| As at 31 December |
||
2025 |
2024 |
|
$m |
$m |
|
Restricted cash |
111 |
– |
Prepayments |
87 |
73 |
Investment at FVTPL |
26 |
25 |
Others |
17 |
18 |
241 |
116 |
|
Restricted cash
represents cash held in restricted accounts for legal settlements, with a corresponding provision at 31 December 2025 (Note 24).
Of this amount, a total of $110 million was subsequently paid in January 2026.
Investment at FVTPL
comprise a portfolio of debt instruments that are managed by an asset manager and which the Group designated as measured
at fair value through profit or loss. These assets are classified as level 1 as they are based on quoted prices in active markets (Note 31).
Others
Strategic report
Corporate governance
Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
191
| As at 31 December | ||
2025 | 2024 | |
$m | $m | |
Short-term borrowings | 14 | 21 |
Current portion of long-term borrowings (Note 26) | 92 | 621 |
106 | 642 | |
In 2025, the weighted average interest rate incurred for short-term borrowings was 11.1% (2024: 9.1%).
In 2024, the current portion of long-term borrowings comprised the previous Eurobond, which matured and was repaid in July 2025. Subsequently,
a new Eurobond was issued in July 2025 with a maturity date of July 2030. This new Eurobond is presented under long-term borrowings as at
| As at 31 December | ||
2025 | 2024 | |
$m | $m | |
Trade payables | 400 | 358 |
Accrued expenses | 292 | 266 |
Other payables | 23 | 26 |
715 | 650 | |
Provision for | |||
end of service | Provision for | ||
indemnity | legal settlements | Total | |
$m | $m | $m | |
Balance at 1 January 2024 | 30 | 129 | 159 |
Additions | 3 | – | 3 |
Remeasurement of post-employment benefit obligations 1 | 1 | – | 1 |
Settlements | (5) | – | (5) |
Balance at 31 December 2024 and 1 January 2025 | 29 | 129 | 158 |
Additions | 5 | 72 | 77 |
Unwinding of post-employment benefit obligations | 1 | – | 1 |
Remeasurement of post-employment benefit obligations 1 | 2 | – | 2 |
Settlements | (4) | (75) | (79) |
Balance at 31 December 2025 | 33 | 126 | 159 |
1.
The remeasurement is due to actuarial valuations and changes in actuarial assumptions, and is recognised in other comprehensive expense
2025 | 2024 | |
$m | $m | |
Due within one year | 119 | 122 |
Due after more than one year | 40 | 36 |
159 | 158 |
Provisions are often subject to uncertainty regarding the timing and settlement amounts. When a settlement is reached and the uncertainty is
resolved, these amounts are not classified to trade and other payables and remain classified within provisions. This is to provide more transparent
disclosure of subsequent movements. The remaining balance at 31 December 2025 includes $111 million that was placed into restricted cash, of which
a total of $110 million was agreed for settlement and subsequently paid in January 2026 (Note 21).
The addition of $72 million in the provision for legal settlements is related to an agreement reached to settle all antitrust lawsuits brought against
Hikma Pharmaceuticals USA Inc. by third-parties in the US who have purchased or been billed for Xyrem® (Sodium Oxybate). The agreed-upon
settlement is not an admission of wrongdoing or legal liability the Sodium Oxybate settlement. This provision was settled during the year (Note 6).
Provision for end of service indemnity relates to employees of certain Group subsidiaries and includes immaterial amounts for defined benefit plans.
Notes to the consolidated financial statements
continued
192
Hikma Pharmaceuticals PLC |
Annual Report 2025
| As at 31 December |
||
2025 |
2024 |
|
$m |
$m |
|
Indirect rebates and other allowances |
188 |
173 |
Refund liability |
152 |
151 |
Deferred income (Note 28) |
55 |
28 |
Acquired contingent liability (Note 28) |
24 |
20 |
Contingent consideration liabilities (Notes 6, 28 and 31) |
– |
85 |
Others |
12 |
18 |
431 |
475 |
|
Indirect rebates and other allowances:
mainly represent rebates granted to healthcare authorities and certain indirect customers under contractual
arrangements. At 31 December 2025, the provision balance relating to the indirect rebates amounted to $110 million (2024: $100 million). Based on the
conditions existing at the balance sheet date, a decrease by fifty basis-points in the rebates rate of 5.4% (2024: 4.9%) would reduce the provision by
approximately $10 million (2024: approximately $10 million).
Refund liability
reflects provisions for product returns, where the Group allows customers to return products within a specified period prior to
and subsequent to the expiration date. Based on the conditions existing at the balance sheet date, a decrease by fifteen basis-points in the returns
and allowanced rate of 1.3% (2024: 1.4%) would reduce the provision by approximately $17 million (2024: approximately $16 million).
Deferred income
mainly includes contract liabilities related to the Group's obligations for contract manufacturing services, for which payment has
been received or is receivable. It also includes contract liabilities for free goods owed to certain customers as an alternative to discounts and deferred
lease income arising from the lease component within contract manufacturing services.
As at 31 December 2025, total deferred income amounted to $113 million (2024: $58 million). Of this, the current portion was $55 million (2024: $28 million),
which comprised $47 million in contract liabilities (2024: $28 million) and $8 million in deferred lease income (2024: $nil). The non-current portion
amounted to $58 million (2024: $30 million), which comprised $24 million in contract liabilities (2024: $13 million) and $34 million in deferred lease income
(2024: $17 million).
During the year, revenue of $27 million (2024: $21 million) was recognised as performance obligations were satisfied.
The movement for indirect rebates and other allowances, refund liability and deferred income for the years ended 31 December 2025 and 2024 was
as follows:
Indirect rebates and |
||||
other allowances |
Refund liability |
Deferred income |
Total |
|
$m |
$m |
$m |
$m |
|
Balance at 1 January 2024 |
145 |
158 |
21 |
324 |
Additions |
334 |
55 |
58 |
447 |
Utilisations |
(306) |
(61) |
(21) |
(388) |
Translation adjustment |
– |
(1) |
– |
(1) |
Balance at 31 December 2024 and 1 January 2025 |
173 |
151 |
58 |
382 |
Additions |
350 |
42 |
82 |
474 |
Utilisations |
(336) |
(42) |
(27) |
(405) |
Translation adjustment |
1 |
1 |
– |
2 |
Balance at 31 December 2025 |
188 |
152 |
113 |
453 |
2025 |
2024 |
|
$m |
$m |
|
Current |
395 |
352 |
Non-current (Note 28) |
58 |
30 |
453 |
382 |
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Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
193
| As at 31 December | ||
2025 | 2024 | |
$m | $m | |
Long-term borrowings | 1,537 | 1,228 |
Less: current portion (Note 22) | (92) | (621) |
1,445 | 607 | |
Breakdown by maturity: | ||
Within one year | 92 | 621 |
In the second year | 125 | 118 |
In the third year | 561 | 129 |
In the fourth year | 157 | 117 |
In the fifth year | 554 | 242 |
In the sixth year | 48 | 1 |
1,537 | 1,228 | |
Breakdown by currency: | ||
US dollar | 1,440 | 1,156 |
Algerian dinar | 45 | 31 |
Jordanian dinar | 24 | 7 |
Moroccan dirham | 21 | 23 |
Tunisian dinar | 6 | 2 |
Euro | 1 | 9 |
1,537 | 1,228 | |
In 2025, the weighted average interest rate incurred for long-term borrowings was 5.1% (2024: 5.1%).
The financial debts are held at amortised cost. Major financial debt arrangements include:
a)
A $1,150 million syndicated revolving credit facility that matures on 4 January 2029. At 31 December 2025, the facility had a carrying value of
$100 million (2024: $240 million) and a fair value of $100 million (2024: $240 million) and an unutilised amount of $1,050 million (2024: $910 million).
The facility can be used for general corporate purposes
b)
A new $500 million 5.125%, five-year Eurobond with a rating of BBB (S&P & Fitch) that matures on 8 July 2030. At 31 December 2025, the facility
had a carrying value of $495 million and a fair value of $505 million. This bond was issued to refinance the previous $500 million, 3.25% Eurobond
that matured in July 2025
c
A new $400 million three-year syndicated loan facility that matures on 6 November 2028. At 31 December 2025, the facility had a carrying value of
$398 million and a fair value of $398 million. The proceeds were partially used to settle the previous $400 million five-year syndicated loan facility,
which had an outstanding balance of $162 million at 31 December 2024, the remaining proceeds were used for general corporate purposes
d)
A new $250 million six-year loan facility from the International Finance Corporation that matures on 15 July 2031. At 31 December 2025, the facility
had a carrying value of $247 million and a fair value of $247 million. The proceeds were used for general corporate purposes
e)
A $200 million eight-year loan facility from the International Finance Corporation and Managed Co-lending Portfolio program that matures
on 15 September 2028. At 31 December 2025, the facility had a carrying value of $153 million (2024: $185 million) and a fair value of $153 million
(2024: $185 million). The proceeds were used for general corporate purposes
f)
A $150 million ten-year loan facility from the International Finance Corporation that matures on 15 December 2027. At 31 December 2025,
the facility had a carrying value of $43 million (2024: $63 million) and a fair value of $41 million (2024: $61 million). The proceeds were used
for general corporate purposes
Where relevant, covenants on major financial debt arrangements are suspended while the Group retains its investment-grade status. As of
31 December 2025, the carrying value of long-term debt subject to covenants was immaterial, and the Group was in full compliance with those
respective covenants. Covenants that must be complied with after the reporting date do not affect the classification of the related borrowings
Notes to the consolidated financial statements
continued
194
Hikma Pharmaceuticals PLC |
Annual Report 2025
2025 |
2024 |
|
$m |
$m |
|
Interest-bearing loans and borrowings (Notes 22 and 26) |
||
Balance at 1 January |
1,249 |
1,125 |
Proceeds from issue of long-term financial debts |
2,402 |
684 |
Proceeds from issue of short-term financial debts |
349 |
387 |
Repayment of long-term financial debts |
(2,093) |
(536) |
Repayment of short-term financial debts |
(357) |
(411) |
Upfront fees and Eurobond transaction costs |
(8) |
– |
Amortisation of upfront fees |
3 |
3 |
Foreign exchange translation movements |
6 |
(3) |
Balance at 31 December |
1,551 |
1,249 |
Lease liabilities (Note 15) |
||
Balance at 1 January |
57 |
66 |
Additions |
8 |
11 |
Business combination |
– |
2 |
Accretion of interest |
3 |
3 |
Retirements |
(1) |
(1) |
Repayment of lease liabilities |
(14) |
(24) |
Balance at 31 December |
53 |
57 |
Total Debt |
1,604 |
1,306 |
Less: cash and cash equivalents (Note 20) |
(217) |
(188) |
Net debt 1 |
1,387 |
1,118 |
1.
Net debt includes long and short-term financial debts and lease liabilities, net of cash and cash equivalents. Net debt excludes acquired contingent liability and contingent consideration liability
| As at 31 December |
||
2025 |
2024 |
|
$m |
$m |
|
Deferred income (Note 25) |
58 |
30 |
Contingent consideration liability (Notes 6, 25 and 31) |
7 |
68 |
Acquired contingent liability (Note 25) |
1 |
29 |
66 |
127 |
|
Issued and fully paid – included in shareholders’ equity:
2025 |
2024 |
|
Number of shares at 1 January |
234,719,686 |
233,914,604 |
Shares issued for employees share scheme |
– |
805,082 |
Number of shares at 31 December |
234,719,686 |
234,719,686 |
Balance at 31 December (in $m) |
40 |
40 |
As at 31 December 2025, 12,833,233 of the issued share capital were held as treasury shares (2024: 12,833,233), and 1,779,538 shares were held in the
employee benefit trust (EBT) (2024: 1,455,190). Treasury shares have no right to receive dividends, and the EBT has waived its entitlement to dividends.
While the voting rights attached to treasury shares are not exercisable, shares held in the EBT retain their voting rights. A total of 220,106,915 shares were
in free issue (2024: 220,431,263).
In 2025, there was no newly issued share capital as the EBT purchased shares to satisfy the vested share awards under the share-based compensation
schemes (2024: 805,082).
Shares held in the EBT were acquired using funds provided by the Group to fulfil its obligation to deliver shares when employees exercise their awards.
These shares are deducted from other reserves, with a corresponding transfer to retained earnings when utilised for the exercise of share awards. During
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Corporate governance
Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
195
The Group manages its capital and monitors its liquidity to have reasonable assurance that the Group will be able to continue as a going concern and
deliver its growth strategy objectives, while reducing its cost of capital and maximising the return to shareholders through the optimisation of the debt
and equity mix. The Group regularly reviews the capital structure by considering the level of available capital and the short to medium-term strategic
plans concerning future capital spend, as well as the need to meet dividends, capital allocation priorities, and borrowing ratios.
The Group defines capital as equity plus net debt which includes long and short-term financial debts (Notes 22 and 26), lease liabilities (Note 15), net
of cash and cash equivalents (Note 20). Group net debt excludes acquired contingent liability and contingent consideration liability (Notes 25 and 28).
During the year, the Group continued its strategy of obtaining debt financing at both the Group level and at the operating entities level. This enables
the Group to borrow at competitive rates and to build relationships with local, regional and international banks and is therefore deemed to be the most
effective means of raising finance, while maintaining the balance between borrowing cost, asset and liability management, and consolidated balance
sheet currency risk management.
In order to monitor the available net funds, management reviews financial capital reports on a monthly basis, in addition to the continuous review by
the Group treasury function.
Cash management
The Group manages the deployment of cash balances to predefined limits approved by the Board of Directors under the cash/risk management
policy. Per the policy, the Group’s excess cash should be held with highly rated global and regional financial institutions. The aim of the policy is to
mitigate the risk of holding cash in certain currencies, countries and financial institutions, through specific thresholds. The Group reviews the policy
periodically to meet its risk appetite.
The maturity analysis of the future contractual cash flows in relation to the Group’s financial liabilities is as follows:
Less than | One to five | More than | ||
one year | years | five years | Total | |
2025 | $m | $m | $m | $m |
Interest-bearing long-term borrowings (Note 26) | 149 | 1,539 | 49 | 1,737 |
Interest-bearing short-term borrowings (Note 22) | 15 | – | – | 15 |
Interest-bearing lease liabilities (Note 15) | 10 | 21 | 36 | 67 |
Trade and other payables (Note 23) | 715 | – | – | 715 |
Contingent consideration (Note 28) | – | – | 10 | 10 |
889 | 1,560 | 95 | 2,544 |
Less than | One to five | More than | ||
one year | years | five years | Total | |
2024 | $m | $m | $m | $m |
Interest-bearing long-term borrowings (Note 26) | 677 | 683 | 2 | 1,362 |
Interest-bearing short-term borrowings (Note 22) | 22 | – | – | 22 |
Interest-bearing lease liabilities (Note 15) | 14 | 26 | 38 | 78 |
Trade and other payables (Note 23) | 650 | – | – | 650 |
Contingent consideration (Notes 25 and 28) | 86 | 82 | 8 | 176 |
1,449 | 791 | 48 | 2,288 |
The Group regularly monitors all cash, cash equivalents and debt to maintain liquidity needs. This is done by analysing debt headroom and expected
cash flows. The Group seeks to be proactive in its liquidity management to avoid any adverse liquidity effect.
At 31 December 2025, the Group had undrawn facilities of $1,415 million (2024: $1,297 million). Of these facilities, $1,050 million (2024: $924 million)
were committed long-term facilities.
Notes to the consolidated financial statements
continued
30. Financial policies for risk management and their objectives
continued
196
Hikma Pharmaceuticals PLC |
Annual Report 2025
The Group’s principal financial assets are cash and cash equivalents, trade and other receivables and investments.
The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the consolidated balance sheet are net of allowances
for expected credit loss, chargebacks, and other allowances. A provision for impairment is made based on expected credit loss which is estimated
based on previous experience, current events and forecasts of future conditions. A loan or receivable is considered impaired when there is no
reasonable expectation of recovery, or when a debtor fails to make a contractual payment for a specific period which varies based on the type of
debtor and the market in which they operate.
During the year ended 31 December 2025, the Group’s largest two customers in the MENA region represented 6.5% of Group revenue (2024: 6.5%),
5.0% from one customer in Saudi Arabia (2024: 5.0%), and 1.5% from one customer in Algeria (2024: 1.5%). At 31 December 2025, the net receivables
due from all customers based in Saudi Arabia and Algeria were $97 million and $88 million respectively (2024: $79 million and $63 million respectively).
During the year ended 31 December 2025, three key US wholesalers represented 34% of Group revenue (2024: 35%). At 31 December 2025, the amount
of net receivables due from all US customers was $532 million (2024: $522 million).
Trade receivable exposures are monitored consistently as they arise. Credit limits are set as deemed appropriate for the customer, based on a number
of qualitative and quantitative factors related to the creditworthiness of a particular customer. The Group is exposed to a variety of customers ranging
from government-backed agencies and large private wholesalers to privately owned pharmacies, and the underlying local economic risks vary across
the Group. In line with local market practice, customers in the MENA region are offered relatively long payment terms compared to customers in
Europe and North America. Typical credit terms in North America range from 30 to 90 days, in Europe 30 to 120 days, and in MENA 180 to 360 days.
The Group manages this risk through the implementation of stringent credit policies, procedures, the use of trade finance instruments and certain
credit insurance agreements.
The following table provides a summary of the age of trade receivables (Note 19):
| Past due |
||||||
Not past due on |
Less than |
Between 91 and |
Between 181 and |
|||
the reporting date |
90 days |
180 days |
360 days |
Over one year |
Total |
|
At 31 December 2025 |
$m |
$m |
$m |
$m |
$m |
$m |
Expected credit loss rate |
0.1% |
0.2% |
19.5% |
18.6% |
65.3% |
5.4% |
Gross trade receivables as at 31 December 2025 |
1,184 |
62 |
21 |
26 |
100 |
1,393 |
Expected credit loss allowance |
(1) |
– |
(4) |
(5) |
(66) |
(76) |
Chargebacks and other allowances |
(320) |
– |
– |
– |
– |
(320) |
Net trade receivables |
863 |
62 |
17 |
21 |
34 |
997 |
| Past due |
||||||
Not past due on |
Less than |
Between 91 |
Between 181 |
|||
the reporting date |
90 days |
and 180 days |
and 360 days |
Over one year |
Total |
|
At 31 December 2024 |
$m |
$m |
$m |
$m |
$m |
$m |
Expected credit loss rate |
0.1% |
0.6% |
18.5% |
14.8% |
77.0% |
5.5% |
Gross trade receivables as at 31 December 2024 |
1,157 |
62 |
26 |
34 |
83 |
1,362 |
Expected credit loss allowance |
(1) |
– |
(5) |
(5) |
(64) |
(75) |
Chargebacks and other allowances |
(391) |
– |
– |
– |
– |
(391) |
Net trade receivables |
765 |
62 |
21 |
29 |
19 |
896 |
Strategic report
Corporate governance
Financial statements
30. Financial policies for risk management and their objectives
continued
Hikma Pharmaceuticals PLC |
Annual Report 2025
197
The Group is exposed to foreign exchange and interest rate risks. The Group’s objective is to reduce, where it is appropriate to do so, fluctuations
in earnings and cash flow associated with changes in interest rates and foreign currency rates. Management actively monitors these exposures to
Interest rate risk
The interest rate profile of the Group’s interest-bearing financial assets and liabilities is set out below:
| As at 31 December 2025 |
As at 31 December 2024 |
|||||
Fixed rate |
Floating rate |
Total |
Fixed rate |
Floating rate |
Total |
|
$m |
$m |
$m |
$m |
$m |
$m |
|
Financial liabilities |
||||||
Interest-bearing loans and borrowings (Notes 22 and 26) |
582 |
969 |
1,551 |
597 |
652 |
1,249 |
Lease liabilities (Note 15) |
53 |
– |
53 |
57 |
– |
57 |
Financial assets |
||||||
Interest-bearing cash and cash equivalents (Note 20) |
– |
136 |
136 |
– |
85 |
85 |
An interest rate sensitivity analysis assumes an instantaneous one percentage point change in interest rates in all currencies from their levels at
31 December 2025 with all other variables held constant. Based on the composition of the Group’s net debt portfolio as at 31 December 2025, a
one percentage point increase/decrease in interest rates would result in a $8 million increase/decrease in net finance cost per year (2024: $6 million
increase/decrease).
The Group uses the US dollar as its reporting currency and is therefore exposed to foreign exchange movements primarily in the Euro, Algerian dinar,
Egyptian pound, Tunisian dinar and Moroccan dirham. Consequently, where appropriate, the Group may enter into various contracts, which change
in value as foreign exchange rates change, to hedge against the risk of movement in foreign-denominated assets and liabilities. Due to the lack of open
currency markets, the Algerian dinar, the Tunisian dinar, the Moroccan dirham and the Egyptian pound cannot be hedged at reasonable cost. Where
possible, the Group uses financing facilities denominated in local currencies to mitigate the risks. Movements in the Jordanian dinar and the Saudi riyal
had no impact on the consolidated income statement as these currencies are pegged against the US dollar.
Currency risks, as defined by IFRS 7, arise on account of financial instruments being denominated in a currency that is other than the functional
currency of an entity and being of a monetary nature.
The currencies that have a significant impact on the Group’s consolidated financial statements and the exchange rates used are as follows:
| Year-end rates |
Average rates |
|||
2025 |
2024 |
2025 |
2024 |
|
US dollar /Euro |
0.851 |
0.965 |
0.884 |
0.924 |
US dollar /Algerian dinar |
129.560 |
135.743 |
131.555 |
134.037 |
US dollar /Saudi riyal |
3.750 |
3.750 |
3.750 |
3.750 |
US dollar /Pound sterling |
0.742 |
0.799 |
0.758 |
0.783 |
US dollar /Jordanian dinar |
0.709 |
0.709 |
0.709 |
0.709 |
US dollar /Egyptian pound |
47.604 |
50.771 |
49.142 |
45.309 |
US dollar /Moroccan dirham |
9.128 |
10.111 |
9.351 |
9.940 |
US dollar /Tunisian dinar |
2.901 |
3.185 |
3.001 |
3.117 |
Notes to the consolidated financial statements
continued
30. Financial policies for risk management and their objectives
continued
198
Hikma Pharmaceuticals PLC |
Annual Report 2025
The net foreign currency exposures for the years ended 31 December 2025 and 2024 were as follows:
| Financial assets/(liabilities) | |||
US dollar | Euro | Others¹ | |
2025 | $m | $m | $m |
Functional currency of entity: | |||
– Jordanian dinar | 190 | (4) | (8) |
– Euro | 61 | – | 2 |
– Algerian dinar | (14) | – | – |
– Saudi riyal | (32) | (19) | – |
– Egyptian pound | (47) | (2) | – |
– Tunisian dinar | 1 | 2 | – |
– Moroccan dirham | (20) | (7) | – |
– US Dollar | – | (4) | 7 |
139 | (34) | 1 | |
| Financial assets/(liabilities) | |||
US dollar | Euro | Others¹ | |
2024 | $m | $m | $m |
Functional currency of entity: | |||
– Jordanian dinar | 141 | 7 | 3 |
– Euro | 24 | – | – |
– Algerian dinar | (15) | – | – |
– Saudi riyal | 15 | (9) | – |
– Egyptian pound | (32) | (8) | – |
– Tunisian dinar | – | 2 | – |
– Moroccan dirham | (15) | (6) | – |
– US Dollar | – | 1 | 13 |
118 | (13) | 16 | |
1.
Others include Saudi Riyal, Jordanian Dinar, Egyptian Pound, Japanese Yen, Pound Sterling, Swiss Franc and UAE Dirham
A sensitivity analysis based on a 10% movement in foreign exchange rates would result in a $11 million (2024: $12 million) movement in foreign
exchange loss/gain on the Group results.
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Corporate governance
Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
199
The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale.
The carrying values of the following financial assets/liabilities are not significantly different from their fair values, as explained below:
–
Cash and cash equivalents – due to the short-term maturities of these financial instruments and given that generally they have negligible credit
risk, management considers the carrying amounts not to be significantly different from their fair values
–
Restricted cash (Note 21) – the fair value of restricted cash is not considered to be significantly different from the carrying value
–
Other financial assets (Note 17) – mainly represent long-term receivables and up-front fees carried at amortised cost, of which the fair value is
estimated not to be significantly different from the respective carrying amounts
–
Receivables and payables – the fair values of receivables and payables are estimated not to be significantly different from the respective
carrying amounts
–
Short-term loans and overdrafts approximate to their fair value because of the short maturity of these instruments
–
Long-term loans – loans with variable rates are re-priced in response to any changes in market rates and so management considers their carrying
values not to be significantly different from their fair values
–
Provisions – where settlement has been agreed but not yet paid, such balances remain within provisions, rather than reclassified to trade and
other payables, to provide transparent disclosure of movements. The remaining balance at 31 December 2025 includes $110 million that was
agreed for settlement and subsequently paid in January 2026 (Note 24). The fair value of this agreed settlement amount is not estimated to be
different from its carrying amount
Loans with fixed rates relate mainly to:
–
$500 million 5.125%, five-year Eurobond with a carrying value of $495 million at 31 December 2025 and fair value of $505 million, accounted for
at amortised cost. The fair value is determined with reference to a quoted price in an active market as at the balance sheet date (a level 1 fair
value) (Note 26)
–
A ten-year $150 million loan from the International Finance Corporation with a carrying value of $42 million at 31 December 2025 and a fair value
of $41 million. Fair value is estimated by discounting future cash flows using the current rates at which similar loans would be made to borrowers
with similar credit ratings and for the same remaining maturities of such loans (a level 2 fair value)
Management classifies items that are recognised at fair value based on the level of the inputs used in their fair value determination as described below:
–
Level 1:
Quoted prices in active markets for identical assets or liabilities
–
Level 2:
Inputs that are observable for the asset or liability
–
Level 3:
Inputs that are not based on observable market data
The following financial assets/liabilities are presented at their fair value:
Level 1 |
Level 2 |
Level 3 |
Total |
|
At 31 December 2025 |
$m |
$m |
$m |
$m |
Financial assets |
||||
Investment at FVTPL (Note 21) |
26 |
– |
– |
26 |
Money market deposit (Note 20) |
17 |
– |
– |
17 |
Investments in unlisted shares at FVTOCI (Note 17) |
– |
– |
40 |
40 |
Total financial assets |
43 |
– |
40 |
83 |
Financial liabilities |
||||
Contingent consideration liability (Note 28) |
– |
– |
7 |
7 |
Total financial liabilities |
– |
– |
7 |
7 |
Level 1 |
Level 2 |
Level 3 |
Total |
|
At 31 December 2024 |
$m |
$m |
$m |
$m |
Financial assets |
||||
Investment at FVTPL (Note 21) |
25 |
– |
– |
25 |
Money market deposit (Note 20) |
2 |
– |
– |
2 |
Investments in listed shares at FVTOCI (Note 17) |
1 |
– |
– |
1 |
Investments in unlisted shares at FVTOCI (Note 17) |
– |
– |
50 |
50 |
Total financial assets |
28 |
– |
50 |
78 |
Financial liabilities |
||||
Contingent consideration liabilities (Notes 25 and 28) |
– |
– |
153 |
153 |
Total financial liabilities |
– |
– |
153 |
153 |
Investments in unlisted shares at FVTOCI
represent investments in start-ups, measured at cost and adjusted for impairment and revaluations based
on relevant available information and recent financing rounds.
Notes to the consolidated financial statements
continued
31. Fair value of financial assets and liabilities
continued
200
Hikma Pharmaceuticals PLC |
Annual Report 2025
The following table presents the changes in Level 3 items for the years ended 31 December 2025 and 2024:
Financial | Financial | |
assets | liabilities | |
$m | $m | |
At 1 January 2024 | 53 | 42 |
Settled | – | (13) |
Remeasurement of contingent consideration and other financial liability recognised in finance expense | – | 71 |
Unwinding of contingent consideration and other financial liability recognised in finance expense | – | 3 |
Contingent consideration related to business combination in the period | – | 50 |
Change in fair value of investments at FVTOCI | (5) | – |
Additions of investments at FVTOCI | 2 | – |
Balance at 31 December 2024 and 1 January 2025 | 50 | 153 |
Settled | – | (75) |
Remeasurement of contingent consideration liabilities recognised in finance income | – | (72) |
Unwinding of contingent consideration liability recognised in finance expense | – | 1 |
Change in fair value of investments at FVTOCI | (13) | – |
Additions of investments at FVTOCI | 3 | – |
Balance at 31 December 2025 | 40 | 7 |
The Group auditor’s remuneration on a worldwide basis is as follows:
2024 | ||
2025 | (restated) 1 | |
$m | $m | |
Fees to the company's auditor and its associates for the audit of the parent company and consolidated financial statements | 2.6 | 3.0 |
Fees to the company's auditor and its associates for the audit of the financial statements of the Group's subsidiaries | 0.7 | 0.7 |
Total audit fees | 3.3 | 3.7 |
Audit-related assurance services | 0.3 | 0.3 |
Other non-audit fees | 0.4 | 0.2 |
Total audit and non-audit fees | 4.0 | 4.2 |
1.
Amounts have been restated to reflect final amounts billed in relation to 2024
Audit-related assurance services relate to review procedures in respect of the interim financial information. In 2025, other non-audit fees represented
other assurance services in connection with the Eurobond offering, the Group’s sustainability report and new regulatory requirement in Morocco.
Additionally, nominal non-audit fees were charged in both years related to subscriptions to a technical accounting portal.
A description of the work of the Audit Committee is set out in the Audit Committee report on pages 111 to 115 and includes an explanation of how
The average monthly number of employees (including Executive Directors) was:
2025 | 2024 | |
Number | Number | |
Production | 5,696 | 5,545 |
Sales, general and administration | 3,353 | 3,224 |
Research and development | 554 | 539 |
9,603 | 9,308 |
Strategic report
Corporate governance
Financial statements
33. Staff costs
continued
Hikma Pharmaceuticals PLC |
Annual Report 2025
201
The aggregate remuneration comprised the following:
2025 |
2024 |
|
$m |
$m |
|
Wages, salaries and bonuses |
485 |
452 |
Health insurance |
48 |
47 |
Social security costs |
47 |
45 |
Car and housing allowances |
28 |
24 |
Share-based payments (Note 34) |
23 |
27 |
Post-employment benefits |
17 |
16 |
End of service indemnity |
15 |
18 |
Other costs and employee benefits |
29 |
25 |
692 |
654 |
Long-term incentive plan (LTIP)
The 2023 Long-Term Incentive Plan (LTIP) was introduced under the 2023 Remuneration Policy and was approved by shareholders at the
2023 Annual General Meeting. Under the LTIP, the Company grants performance awards and restricted deferred bonus awards to Executive Directors
of the Group, along with restricted awards for management.
Three-year LTIP performance awards
The three-year LTIP performance awards are conditional grants to the Executive Directors of the Group that are dependent on certain non-market
and market conditions with a vesting period of three years from the grant date and are then subject to a two-year holding period.
The fair value per share is the face value of shares on the date of grant for non-market conditions. For market conditions, valuation is based on the
Monte Carlo methodology. No discounting for dividend yield is applied as participants will receive the benefit of dividends paid during the vesting
period in the form of additional shares.
The cost is recognised, together with a corresponding increase in equity, on a straight-line basis over the vesting period after the grant date. The cost for the
year was $7 million (2024: $7 million) and has been recorded in the consolidated income statement as part of selling, general and administrative expenses.
Details of the outstanding grants under this plan are shown below:
2025 |
2024 |
2023 |
|||
grants |
grants |
grants |
2023 grants |
Total |
|
9 April |
9 April |
31 Aug |
30 May |
Number |
|
Y ear 2025 |
|||||
Beginning balance |
– |
745,548 |
28,717 |
588,711 |
1,362,976 |
Granted during the year |
752,000 |
– |
– |
– |
752,000 |
Dividends equivalent during the year |
12,124 |
25,639 |
989 |
20,245 |
58,997 |
Forfeited during the year |
(204,003) |
(113,709) |
(16,616) |
– |
(334,328) |
Outstanding at 31 December |
560,121 |
657,478 |
13,090 |
608,956 |
1,839,645 |
Exercisable at 31 December |
– |
– |
– |
– |
– |
Weighted average remaining contractual life (years) |
2.27 |
1.27 |
0.67 |
0.41 |
1.29 |
Y ear 2024 |
|||||
Beginning balance |
– |
27,829 |
608,514 |
636,343 |
|
Granted during the year |
788,967 |
– |
– |
788,967 |
|
Dividends equivalent during the year |
8,661 |
888 |
18,220 |
27,769 |
|
Forfeited during the year |
(52,080) |
– |
(38,023) |
(90,103) |
|
Outstanding at 31 December |
745,548 |
28,717 |
588,711 |
1,362,976 |
|
Exercisable at 31 December |
– |
– |
– |
– |
|
Weighted average remaining contractual life (years) |
2.27 |
1.67 |
1.41 |
1.89 |
|
Fair value of each share at grant date $ |
21.00 |
20.62 |
27.06 |
21.13 |
|
The share price at grant date $ |
22.66 |
22.96 |
27.74 |
22.32 |
Notes to the consolidated financial statements
continued
34. Share-based payments
continued
202
Hikma Pharmaceuticals PLC |
Annual Report 2025
LTIP deferred bonus awards
Under this scheme, 50% of the annual bonus is deferred into an award to the Executive Directors of the Group over shares for a vesting period of three
years. Awards are subject to the achievement of Group and individual KPIs in the prior year.
The cost of share-based payments for these share awards is measured by reference to the fair value at the date at which the awards are granted. Fair
value is determined based on the share price as at the date of grant. No discounting for dividend yield is applied as participants will receive the benefit
of dividends paid during the vesting period in the form of additional shares. The cost is recognised, together with a corresponding increase in equity,
on a straight-line basis over the year of performance and the vesting period after the grant date.
The cost of the deferred bonus awards of $2 million (2024: $1 million) has been recorded in the consolidated income statement as part of selling,
general and administrative expenses.
Details of the outstanding grants under this plan are shown below:
2025 grants | 2024 grants | Total | |
9 April | 9 April | Number | |
Y ear 2025 | |||
Beginning Balance | – | 76,550 | 76,550 |
Granted during the year | 87,229 | – | 87,229 |
Dividends equivalent during the year | 1,406 | 2,633 | 4,039 |
Outstanding at 31 December | 88,635 | 79,183 | 167,818 |
Exercisable at 31 December | – | – | – |
Weighted average remaining contractual life (years) | 2.27 | 1.27 | 1.80 |
Y ear 2024 | |||
Beginning Balance | – | – | |
Granted during the year | 75,587 | 75,587 | |
Dividends equivalent during the year | 963 | 963 | |
Outstanding at 31 December | 76,550 | 76,550 | |
Exercisable at 31 December | – | – | |
Weighted average remaining contractual life (years) | 2.27 | 2.27 | |
Fair value of each share at grant date $ | 22.66 | 22.96 | |
The share price at grant date $ | 22.66 | 22.96 |
Strategic report
Corporate governance
Financial statements
34. Share-based payments
continued
Hikma Pharmaceuticals PLC |
Annual Report 2025
203
Two-year LTIP restricted awards
Under this award, the Group makes grants of conditional awards to management across the Group for a period of two years. Awards are dependent
on the achievement of individual and Group KPIs one year prior to the grant.
The cost of share-based payments for these share awards is measured by reference to the fair value at the date at which the awards are granted.
Fair value is determined based on the share price as at the date of grant discounted by dividend yield. This cost is recognised, together with a
corresponding increase in equity, on a straight-line basis over the year of performance and the vesting period after the grant date.
The cost of the two-year LTIP awards of $12 million (2024: $11 million) has been recorded in the consolidated income statement as part of selling,
general and administrative expenses.
Details of the outstanding grants under this plan are shown below:
2025 grants | 2024 grants | Total | |
9 April | 9 April | Number | |
Y ear 2025 | |||
Beginning Balance | – | 853,849 | 853,849 |
Granted during the year | 796,672 | – | 796,672 |
Forfeited during the year | (46,027) | (75,259) | (121,286) |
Outstanding at 31 December | 750,645 | 778,590 | 1,529,235 |
Exercisable at 31 December | – | – | – |
Weighted average remaining contractual life (years) | 1.27 | 0.27 | 0.76 |
Y ear 2024 | |||
Beginning Balance | – | – | |
Granted during the year | 922,023 | 922,023 | |
Exercised during the year | (1,633) | (1,633) | |
Forfeited during the year | (66,541) | (66,541) | |
Outstanding at 31 December | 853,849 | 853,849 | |
Exercisable at 31 December | – | – | |
Weighted average remaining contractual life (years) | 1.27 | 1.27 | |
Fair value of each share at grant date $ | 21.44 | 21.75 | |
The share price at grant date $ | 22.66 | 22.96 | |
Expected dividend yield % | 2.80% | 2.74% |
Notes to the consolidated financial statements
continued
34. Share-based payments
continued
204
Hikma Pharmaceuticals PLC |
Annual Report 2025
Executive incentive plan
The 2014 Executive Incentive Plan (EIP) was approved by shareholders at the 2014 Annual General Meeting. The EIP is a combined cash bonus
(element A), deferred shares (element B) and restricted shares (element C) scheme. In 2023, this plan was replaced by the 2023 Long-Term Incentive
Plan (LTIP).
Under the EIP, the Company made grants of conditional awards under element B and element C to senior management and Executive Directors of the
Group. Awards were dependent on the achievement of individual and Group KPIs over one year prior to grant. Element B share awards had a two-year
vesting period, and were then subject to a two-year holding period during which they were subject to forfeiture conditions. Element C share awards have
a three-year vesting period but are not subject to a forfeiture condition.
The cost of the EIP of $2 million (2024: $6 million) has been recorded in the consolidated income statement as part of selling, general and
administrative expenses and research and development expenses.
The fair value per share is the face value of share on the date of grant less the present value of dividends expected to be paid during the vesting period.
The weighted average exercise share price for 2025 is $28.14.
Details of the outstanding grants under this plan are shown below:
2023 | 2023 | 2022 | 2022 | 2021 | 2018 | 2017 | 2016 | ||
grants | grants | grants | grants | grants | grants | grants | grants | Total | |
30 May | 30 May | 25 Feb | 25 Feb | 25 Feb | 16 May | 13 Apr | 17 March | Number | |
Y ear 2025 | |||||||||
Beginning balance | 145,545 | 555,439 | 102,956 | – | – | 14,257 | 27,508 | 38,350 | 884,055 |
Exercised during the year | – | (542,831) | (102,956) | – | – | (14,257) | (27,508) | (38,350) | (725,902) |
Forfeited during the year | – | (12,608) | – | – | – | – | – | – | (12,608) |
Outstanding at 31 December | 145,545 | – | – | – | – | – | – | – | 145,545 |
Exercisable at 31 December | – | – | – | – | – | – | – | – | – |
Weighted average remaining contractual life (years) | 0.41 | – | – | – | – | – | – | – | 0.41 |
Y ear 202 4 | |||||||||
Beginning balance | 153,847 | 583,295 | 115,361 | 399,252 | 100,442 | 14,257 | 27,508 | 38,350 | 1,432,312 |
Exercised during the year | (2,558) | (15,218) | (9,013) | (391,377) | (100,442) | – | – | – | (518,608) |
Forfeited during the year | (5,744) | (12,638) | (3,392) | (7,875) | – | – | – | – | (29,649) |
Outstanding at 31 December | 145,545 | 555,439 | 102,956 | – | – | 14,257 | 27,508 | 38,350 | 884,055 |
Exercisable at 31 December | – | – | – | – | – | 14,257 | 27,508 | 38,350 | 80,115 |
Weighted average remaining contractual life (years) | 1.41 | 0.41 | 0.15 | – | – | 3.38 | 2.36 | 1.21 | 0.69 |
Fair value of each share at grant date $ | 21.30 | 21.30 | 25.00 | 25.38 | 31.71 | 18.45 | 23.52 | 26.21 | |
The share price at grant date $ | 22.32 | 22.32 | 26.14 | 26.14 | 33.09 | 19.09 | 23.98 | 26.98 | |
Expected dividend yield % | 2.36% | 2.36% | 1.50% | 1.50% | 1.43% | 1.71% | 0.97% | 0.71% |
Strategic report
Corporate governance
Financial statements
34. Share-based payments
continued
Hikma Pharmaceuticals PLC |
Annual Report 2025
205
Management incentive plan
The 2009 Management Incentive Plan (MIP) was approved by shareholders at the 2010 Annual General Meeting and the 2018 MIP was approved by
shareholders at the 2018 Annual General Meeting. Under the MIP, the Company made grants of conditional awards to management across the Group
below senior management level. Awards were dependent on the achievement of individual and Group KPIs one year prior to grant and a two-year
vesting period. This plan was replaced by the 2023 Long-Term Incentive Plan (LTIP).
In 2025, no cost has been recorded in the consolidated income statement against the MIP incentive plan (2024: $3 million)
The fair value per share is the face value of shares on the date of grant less the present value of dividends expected to be paid during the vesting period.
The weighted average exercise share price for 2025 is $28.76.
Details of the outstanding grants under this plan are shown below:
2023 |
2022 |
2018 |
||
grants |
grants |
grants |
Total |
|
30 May |
25 Feb |
16 May |
Number |
|
Y ear 2025 |
||||
Beginning balance |
470,394 |
1,928 |
707 |
473,029 |
Exercised during the year |
(447,115) |
(1,928) |
(707) |
(449,750) |
Forfeited during the year |
(23,279) |
– |
– |
(23,279) |
Outstanding at 31 December |
– |
– |
– |
– |
Y ear 2024 |
||||
Beginning balance |
545,683 |
327,434 |
707 |
873,824 |
Exercised during the year |
(16,550) |
(313,101) |
– |
(329,651) |
Forfeited during the year |
(58,739) |
(12,405) |
– |
(71,144) |
Outstanding at 31 December |
470,394 |
1,928 |
707 |
473,029 |
Exercisable at 31 December |
1,958 |
1,928 |
707 |
4,593 |
Weighted average remaining contractual life (years) |
0.41 |
0.08 |
3.38 |
0.41 |
Fair value of each share at grant date $ |
21.3 |
25.38 |
18.45 |
|
The share price at grant date $ |
22.32 |
26.14 |
19.09 |
|
Expected dividend yield % |
2.36% |
1.50% |
1.71% |
Notes to the consolidated financial statements
continued
206
Hikma Pharmaceuticals PLC |
Annual Report 2025
The Group has defined contribution retirement plans in four of its subsidiaries: Hikma Pharmaceuticals PLC – United Kingdom, Hikma Pharmaceuticals
LLC, Arab Pharmaceutical Manufacturing PSC and Hikma Pharmaceuticals USA Inc. The details of each contribution plan are as follows:
Hikma Pharmaceuticals PLC
Hikma Pharmaceuticals PLC has a defined contribution pension plan available for staff working in the United Kingdom whereby Hikma
Pharmaceuticals PLC contributes 10% of basic salary. Employees are immediately entitled to 100% of the contributions, accessible only upon
retirement. Hikma Pharmaceuticals PLC contributions for the year ended 31 December 2025 were $0.4 million (2024: $0.3 million).
Hikma Pharmaceuticals LLC
Hikma Pharmaceuticals LLC has an employee savings plan whereby Hikma Pharmaceuticals LLC fully matches employees’ contributions, which are
fixed at 10% of basic salary. Employees are entitled to 100% of Hikma Pharmaceuticals LLC contributions after three years of employment with the
Company. Hikma Pharmaceuticals LLC contributions for the year ended 31 December 2025 were $3.8 million (2024: $3.7 million).
Arab Pharmaceutical Manufacturing PSC
Arab Pharmaceuticals Manufacturing PSC has an employee savings plan whereby Arab Pharmaceuticals Manufacturing PSC fully matches employees’
contributions, which are fixed at 10% of basic salary. Employees are entitled to 100% of Arab Pharmaceuticals Manufacturing PSC contributions after
three years of employment with the Company. Arab Pharmaceuticals Manufacturing PSC contributions for the year ended 31 December 2025 were
$0.6 million (2024: $0.6 million).
Hikma Pharmaceuticals USA Inc.:
401(k) Retirement Plan
Hikma Pharmaceuticals USA Inc. has a 401(k)-defined contribution plan, which allows all eligible employees to defer a portion of their income through
contributions to the plan. Eligible employees can begin contributing to the plan after being employed for 90 days. Employees can defer up to 95% of
their eligible income into the plan, not to exceed $23,500 (2024: $23,000), not including catch-up contributions available to eligible employees as
outlined by the Internal Revenue Service. The company matches the employees’ eligible contribution dollar-for-dollar on the first 6% of eligible pay
contributed to the plan. Employer contributions vest 50% after two years of service and 100% after three years of service. Employees are considered to
have completed one year of service for the purposes of vesting upon the completion of 1,000 hours of service at any time during a plan year. Employer
contributions to the plan for the year ended 31 December 2025 were $9 million (2024: $8 million). The assets of this plan are held separately from those
of the Group. The only obligation of the Group with respect to this plan is to make specified contributions.
Deferred Compensation Plan
Hikma Pharmaceuticals USA Inc. has a defined contribution pension plan available for senior management personnel working in the United States
whereby Hikma Pharmaceuticals USA Inc. contributes 10% of basic salary and eligible employees can defer up to 50% of their base salary and 100% of
their variable compensation. Eligible employees are entitled to 100% of the contributions after completing 5 years of service after they become eligible
Strategic report
Corporate governance
Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
207
Standby letters of credit and letters of guarantees
A contingent liability existed at the balance sheet date in respect of standby letters of credit and letters of guarantees totalling $42 million
(2024: $49 million) arising in the normal course of business. No provision for these liabilities has been made in these consolidated financial statements.
A contingent liability existed at the balance sheet date for standby letters of credit totalling $10 million (2024: $14 million) for potential stamp duty
obligations that may arise from the repayment of loans by intercompany guarantors. It’s not probable that any repayment will be made by the
intercompany guarantors.
Legal proceedings
The Group is often involved in a number of legal proceedings in the ordinary course of its business, including litigation relating to employment matters,
product liability, commercial disputes, pricing, sales and marketing practices, infringement of IP rights, the validity of certain patents and competition laws.
Most of the claims involve highly complex issues. Often these issues are subject to substantial uncertainties and, therefore, the probability of a loss
being sustained and/or an estimate of the amount of any loss is impracticable to ascertain. It is the Group’s policy to provide for amounts related to
these legal matters if it is probable that a liability has been incurred and an amount is reasonably estimable.
In the proceedings noted herein, the Group currently believes it has meritorious defences and intends to vigorously defend itself. From time to time,
however, the Group may settle or otherwise resolve these matters on terms and conditions that it believes to be in its best interest. Litigation outcomes
and contingencies are unpredictable and excessive verdicts can occur. Any legal proceeding, regardless of the merits, might result in substantial costs
to defend or settle or otherwise negatively affect our business.
–
In Re Generic Pharmaceuticals Pricing Antitrust Litigation. Starting in 2016, more than 30 complaints have been filed against Group entities in the
United States on behalf of putative classes of direct and indirect purchasers of generic drug products, as well as several individual direct action
retailer and third-party payor plaintiffs. These complaints allege that more than forty generic pharmaceutical defendants, including the Group
entities, engaged in conspiracies to fix, increase, maintain and/or stabilise the prices and market shares of certain generic drug products during
the periods of approximately 2010 to 2016. The plaintiffs seek unspecified treble monetary damages, which can be imposed jointly and severally
with other defendants and can be significantly higher than the profits Hikma made on the alleged drug products, and equitable injunctive relief
under federal and state antitrust and consumer protection laws. The lawsuits have been consolidated in a multidistrict litigation (MDL) in the
United States District Court for the Eastern District of Pennsylvania (In re Generic Pharmaceuticals Pricing Antitrust Litigation, No. 2724, (E.D.
Pa.)). Hikma is one of nineteen defendants in a bellwether trial scheduled for September 2026. At this point in the proceedings, the Group does
not believe sufficient evidence exists and is impracticable to make a reasonable estimate of any potential liability.
–
Amarin Pharma Inc. v. Hikma Pharmaceuticals PLC. In November 2020, Amarin Pharmaceuticals filed a patent infringement lawsuit against
certain Group entities in the United States District Court for the District of Delaware (No. 20-cv-1630) alleging that Hikma’s sales, distribution
and marketing of its generic icosapent ethyl product infringe three Amarin patents that describe certain methods of using icosapent ethyl.
Amarin sought an injunction barring Hikma from selling its generic product as well as unspecified damages. Hikma’s product is not approved for
the alleged patented methods but rather is approved only for a different indication not covered by any valid patents. In January 2022 the district
court dismissed the lawsuit, and Amarin appealed the court’s ruling to the United States Court of Appeals for the Federal Circuit. On 25 June
2024, the Federal Circuit reversed the district court’s decision, held that Amarin has plausibly pleaded a potential claim for induced infringement,
and remanded the case for further proceedings at the district court. A trial in the district court was scheduled to begin on 8 September 2026, but
on 16 January 2026, the United States Supreme Court accepted Hikma’s petition to consider whether the case should have been dismissed.
Accordingly, further proceedings in the trial court have been stayed pending the outcome of the Supreme Court case. At this point, the Group
Notes to the consolidated financial statements
continued
208
Hikma Pharmaceuticals PLC |
Annual Report 2025
Transactions between the Company and its subsidiaries have been eliminated on consolidation and are not disclosed in this Note. Transactions
between the Group and its joint venture and other related parties are disclosed below.
Trading transactions
During the year ended 31 December 2025, the Group entered into the following transactions with related parties:
Darhold Limited (Darhold):
is a related party of Hikma because three Directors of Hikma jointly constitute the majority of directors and shareholders
(with immediate family members) in Darhold and because Darhold owns 25.56% (2024: 25.56%) of the share capital and 27.04% (2024: 27.04%) of the
voting capital of Hikma. Other than dividends (as paid to all shareholders), there were no transactions between the Group and Darhold Limited during
the year.
Hubei Haosun Pharmaceutical Co., Ltd.:
is a related party of Hikma because the Group holds an interest of 49% in the joint venture (JV) with Haosun
(2024: 49%). During the year, total direct purchases from Haosun were $0.3 million (2024: $3.2 million). In addition, in certain countries the Group
purchases from Haosun indirectly. During the year total indirect purchases from Haosun were $0.7 million (2024: $0.7 million).
Labatec Pharma (Labatec):
is a related party of the Group because Labatec is owned by the family of two Directors of Hikma. During the year, total Group
sales to Labatec amounted to $2.3 million (2024: $2.9 million), and total Group purchases amounted to $2.8 million (2024: $1.7 million). At 31 December
2025, the net amount owed by Labatec to the Group was $0.7 million (2024: $0.8 million).
Transactions with the former CEO
For the period from December 2022 to December 2025, one of the Group’s subsidiaries entered into an arrangement with a family member of the
former CEO for the use of a vacant building located on company-owned land. No consideration was charged under this arrangement. The former
CEO also had short term quasi-loan arrangements during 2024 and 2025, under which gross withdrawals of $62,000 and $358,000 were made in
each year, respectively. The outstanding balance at each year-end was $nil.
The remuneration of the key management personnel (comprising the Executive Directors, Non-Executive Directors and the senior management
as set out in the corporate governance report) of the Group is set out below in aggregate for each of the categories specified in IAS 24 ‘Related Party
Disclosures’. Further information about the remuneration of the individual Directors is provided in the audited part of the Remuneration Committee
report on pages 118 to 149.
2025 |
2024 |
|
$m |
$m |
|
Short-term employee benefits |
14.8 |
15.2 |
Share-based payments |
9.5 |
10.7 |
Other benefits |
1.5 |
1.7 |
25.8 |
27.6 |
Strategic report
Corporate governance
Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
209
The subsidiaries and joint venture of Hikma Pharmaceuticals PLC are as follows:
| Owned by the Group |
||||
Ownership % |
Ownership% |
|||
Ordinary Shares |
Ordinary Shares |
|||
At 31 December |
At 31 December |
|||
Company’s name |
Incorporated in |
Address of the registered office |
2025 |
2024 |
Zone d’Activité, Propriété N° 379 Section N° 04 Staoueli, |
||||
Al Jazeera Pharmaceutical Industry S.A.R.L |
Algeria |
Algeria |
99% |
99% |
Algerie Industrie Mediterraneene Du Medicament S.A.R.L. |
Algeria |
Zone d’Activité 16/15 Staoueli, Algeria |
91% |
91% |
Hikma Pharma Algeria S.A.R.L. |
Algeria |
Zone d’Activité 16/15 Staoueli, Algeria |
100% |
100% |
Zone d’Activité El Boustane N° 78, Sidi Abdellah, Al |
||||
SPA Al Dar Al Arabia pour la Fabrication de Médicaments |
Algeria |
Rahmania, Algeria |
100% |
100% |
5995 Avebury Rd, Suite 804, Mississauga, ON L5R 3P9, |
||||
Hikma Canada Limited |
Canada |
Canada |
100% |
100% |
No 20 Juxian Road, Gedian Economic and Technology |
||||
Hubei Haosun Pharmaceutical Co., Ltd. 1 |
China |
Development Area, Hubei, China |
49% |
49% |
Hikma d.o.o. |
Croatia |
Slavonska avenija 24/6 Zagreb (Grad Zagreb), Croatia |
100% |
100% |
6th of October City, 2 nd Industrial Zone, Plot No.(1), |
||||
Hikma Pharma S.A.E |
Egypt |
Giza – Egypt |
100% |
100% |
6th of October City, 2 nd Industrial Zone, Plot No.(1), |
||||
Hikma Pharmaceuticals Industries S.A.E |
Egypt |
Giza – Egypt |
100% |
100% |
6th of October City, 2 nd Industrial Zone, Plot No.(1), |
||||
Hikma Specialised Pharmaceuticals (S.A.E) |
Egypt |
Giza – Egypt |
98% |
98% |
6th of October City, 2 nd Industrial Zone, Plot No.(1), |
||||
Hikma for Importation Co. LLC |
Egypt |
Giza – Egypt |
100% |
100% |
105 Rue Marcel Dassault, 92100 – Boulogne Billancourt – |
||||
Hikma France |
France |
France |
100% |
100% |
Hikma Pharma GmbH |
Germany |
Lochhamer Strasse 13, 82152, Martinsried, Germany |
100% |
100% |
Schiffgraben 23, DE-38690, Goslar, OT Vienenburg, |
||||
Thymoorgan Pharmazie GmbH |
Germany |
Germany |
100% |
100% |
207, B Wing, Gala Quest Building, Paranjape B Scheme |
||||
Road No. 1, Subhash Road, Vile Parle East Mumbai, |
||||
Hikma Services India Private Limited |
India |
Maharashtra, 400057, India |
100% |
100% |
Hikma Italia S.p.A |
Italy |
Viale Certosa 10, 27100, Pavia, Italy |
100% |
100% |
Hikma Pharma Limited* 2 |
Jersey |
47 Esplanade, St Helier, JE1 0BD, Jersey |
100% |
100% |
Arab Medical Containers LLC |
Jordan |
P.O. Box 80, Sahab Industrial Estate, 11512, Jordan |
100% |
100% |
Arab Pharmaceutical Manufacturing PSC |
Jordan |
Al Buhaira – Salt, P.O. Box 42, Jordan |
100% |
100% |
Business Park Development Zone |
||||
Hikma International Pharmaceuticals LLC (Exempt) |
Jordan |
Building No. (5), 4th Floor, Amman , Jordan |
100% |
100% |
Bayader Wadi Al-Seer, Industrial Area, Saleem Bin Al- |
||||
Hikma International Ventures and Development LLC |
Hareth Street, Building 21, P.O. Box 182400, Amman, |
|||
(Exempt) |
Jordan |
11118, Jordan |
100% |
100% |
Bayader Wadi Al-Seer, Industrial Area, Saleem Bin Al- |
||||
Hareth Street, Building 21, P.O. Box 182400, Amman, |
||||
Hikma Investment LLC* |
Jordan |
11118, Jordan |
100% |
100% |
Bayader Wadi Al-Seer, Industrial Area, Saleem Bin Al- |
||||
Hareth Street, Building 21, P.O. Box 182400, Amman, |
||||
Hikma Pharmaceuticals LLC |
Jordan |
11118, Jordan |
100% |
100% |
Al-Mushatta – Al Qastal Free Zone |
||||
Hikma Pharmaceuticals LLC (Jordan) (FREE ZONE) |
Jordan |
P.O. Box 182400 11118 Amman, Jordan |
100% |
100% |
P.O. Box 963166, 1 Queen Rania Street, Sport City Circle, |
||||
International Pharmaceutical Research Centre LLC |
Jordan |
Amman, 11196, Jordan |
51% |
51% |
Bayader Wadi Al-Seer, Industrial Area, Saleem Bin Al- |
||||
Hareth Street, Building 21, P.O. Box 182400, Amman, |
||||
Sofia Travel and Tourism |
Jordan |
11118, Jordan |
100% |
100% |
Riyadh Gallery, Olaya Street, P.O. Box 106229, Riyadh, |
||||
Al Jazeera Pharmaceutical Industries Ltd 2 |
KSA |
11666, Saudi Arabia |
100% |
100% |
The Regional Headquarters Company for Hikma |
||||
Pharmaceuticals for the Headquarters of Foreign |
3005, Imam Saud bin Abdulaziz bin Mohammed Road, |
|||
Companies 2 |
KSA |
7815 Riyadh 12262, Saudi Arabia |
100% |
100% |
Hikma Pharma Industry |
KSA |
7709, Al Munisf, 3637, Riyadh, Saudi Arabia |
100% |
100% |
Notes to the consolidated financial statements
continued
38. Subsidiaries and joint venture
continued
210
Hikma Pharmaceuticals PLC |
Annual Report 2025
| Owned by the Group |
||||
Ownership % |
Ownership % |
|||
Ordinary Shares |
Ordinary Shares |
|||
Company’s name |
Incorporated in |
Address of the registered office |
At 31 December 2025 |
At 31 December 2024 |
Société de Promotion Pharmaceutique du Maghreb |
Zone Industrielle du Sahel, Rue N. 7, Had Soualem, |
|||
(Promopharm S.A.) |
Morocco |
Province de Settat, Morocco |
94% |
94% |
Hikma Pharma Benelux B.V |
Netherlands |
Atoomweg 12, 1627 LE Hoorn, Netherlands |
100% |
100% |
Estrada Rio Da Mo no.8, 8ª, 8B-Fervenca, 2705-906, |
||||
Hikma Farmaceutica, (Portugal) S.A |
Portugal |
Terrugem SNT, Portugal |
100% |
100% |
Estrada Nacional 9, Fervença, São João das Lampas e |
||||
Lifotec Farmaceutica S.G.P.S S.A* |
Portugal |
Terrugem, Sintra, Portugal |
100% |
100% |
Hikma Care for Medicines and Medical Supplies |
||||
Company |
Palestine |
Mahatma Ghandi Street, Betunia Ramallah, Palestine |
51% |
51% |
Hikma Pharmaceuticals |
Palestine |
West Bank Al Birah, Ramallah |
100% |
100% |
Calle Anabel Segura no.11, Edificio A, planta 1a, oficina 2, |
||||
Hikma Espana S.L |
Spain |
28108 – Alcobendas, Madrid, Spain |
100% |
100% |
Khartoum State, Buri Al Lamab Area, Block (9), Building |
||||
Pharma Ixir Co. Ltd |
Sudan |
No. (98), Sudan |
51% |
51% |
Port Sudan, Red Sea State, South Transit District, |
||||
Savannah Pharmaceutical Industries Co. Ltd |
Sudan |
Building No. (57), Block No. (1/Z), Sudan |
100% |
100% |
Eurohealth International S.A.R.L. 2 |
Switzerland |
Rue des Battoirs 7, 1205 Genève, Switzerland |
100% |
100% |
14 Rue 8609 – Zone Industrielle Charguia I – Tunis |
||||
APM Tunisie S.A.R.L. |
Tunisia |
Carthage 2035 |
100% |
100% |
STE D’Industrie Pharmaceutique Ibn Al Baytar* |
Tunisia |
11 Rue 8610 Charguia 1-2035 Tunis-Carthage, Tunisia |
100% |
100% |
Avenue Habib Bourguiba, Sidi Thabet, 2020 Ariana, |
||||
STE Medicef |
Tunisia |
Tunisia |
100% |
100% |
United Arab |
Premises 202-204, Floor 2, Building 26, Dubai Health |
|||
Hikma Emerging Markets and Asia Pacific FZ-LLC 2 |
Emirates |
Care City, United Arab Emirates |
100% |
100% |
United Arab |
Office No. FZJOB1020, Jebel Ali Free Zone, Dubai, |
|||
Hikma International Trading Limited 2 |
Emirates |
United Arab Emirates |
100% |
100% |
United Arab |
Office No. FZJOB1020 Jebel Ali Free Zone, Dubai |
|||
Hikma MENA FZE* 2 |
Emirates |
United Arab Emirates |
100% |
100% |
Premises No. DSP-HQSOU-VD-F13-284, Thirteenth |
||||
United Arab |
Floor, Dubai Science Park – South Tower, Dubai, |
|||
Hikma Healthcare FZ-LLC 2 |
Emirates |
United Arab Emirates |
100% |
– |
United |
1 New Burlington Place, London, W1S 2HR, United |
|||
Hikma UK Limited* 2 |
Kingdom |
Kingdom |
100% |
100% |
United |
1 New Burlington Place, London, W1S 2HR, United |
|||
Hikma Ventures Limited 2 |
Kingdom |
Kingdom |
100% |
100% |
United |
1 New Burlington Place, London, W1S 2HR, United |
|||
West-Ward Holdings Limited* |
Kingdom |
Kingdom |
100% |
100% |
United |
1 New Burlington Place, London, W1S 2HR, United |
|||
Hikma Pharmaceuticals International Limited* |
Kingdom |
Kingdom |
100% |
100% |
Eurohealth (U.S.A.) Inc |
United States |
200 Connell Drive, Berkeley Heights, NJ 07922 |
100% |
100% |
Hikma Speciality USA, Inc. |
United States |
1900 Arlingate Lane, Columbus, Ohio 43228 |
100% |
100% |
Hikma Labs Inc. |
United States |
1809 Wilson Road, Columbus, Ohio 43228 |
100% |
100% |
West-Ward Columbus Inc. |
United States |
1809 Wilson Road, Columbus, Ohio 43228 |
100% |
100% |
Hikma Injectables USA, Inc. |
United States |
36 Stults Road, Dayton, New Jersey 08810 |
100% |
100% |
Hikma Pharmaceuticals USA Inc. |
United States |
200 Connell Drive, Berkeley Heights, NJ 07922 |
100% |
100% |
Hikma Finance USA LLC |
United States |
200 Connell Drive, Berkeley Heights, NJ 07922 |
100% |
100% |
TACCA, LLC |
United States |
200 Connell Drive, Berkeley Heights, NJ 07922 |
90% |
90% |
Pytrione LLC |
United States |
200 Connell Drive, Berkeley Heights, NJ 07922 |
84% |
84% |
1.
The investment in joint venture is accounted for using the equity method (Note 16)
2. Owned by Hikma Pharmaceuticals PLC (‘the Company’)
The investments in subsidiaries are all stated at cost in Hikma Pharmaceuticals PLC and are consolidated in line with IFRS 10.
The Group’s subsidiaries principally operate in trading pharmaceuticals products and associated goods and services, except for Sofia Travel and
Tourism subsidiary which coordinates employees’ travel arrangements.
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Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
211
Share buyback
On 26 February 2026, Hikma announced a share buyback programme of up to $250 million to be executed during 2026. The buyback has been sized
212
Hikma Pharmaceuticals PLC |
Annual Report 2025
Company balance sheet
At 31 December 2025
2025
2024
Note
$m
$m
Non-current assets
Investments in subsidiaries
3
3,298
3,291
Due from subsidiaries
4
45
39
Intangible assets
3
4
Other non-current assets
1
2
Right-of-use asset
–
2
Property, plant and equipment
–
1
3,347
3,339
Current assets
Trade and other receivables
5
230
346
Due from subsidiaries
4
68
69
Cash and cash equivalents
6
24
40
Other current assets
7
33
31
355
486
Total assets
3,702
3,825
Current liabilities
Short-term financial debts
8
51
84
Due to subsidiaries
9
29
28
Income tax provision
9
2
Lease liability
1
2
Other current liabilities
22
22
112
138
Net current assets
243
348
Non-current liabilities
Long-term financial debts
8
344
288
Due to subsidiaries
9
71
75
Lease liability
–
1
415
364
Total liabilities
527
502
Net assets
3,175
3,323
Equity
Share capital
11
40
40
Share premium
282
282
Other reserves
(40)
(35)
Profit for the year
12
50
164
Retained earnings
2,843
2,872
Total equity
3,175
3,323
The financial statements of Hikma Pharmaceuticals PLC, registered number 5557934, on pages 212 to 218 were approved by the Board of Directors on
25 February 2026 and signed on its behalf by:
Said Darwazah
Executive Chairman and CEO
25 February 2026
Khalid Nabilsi
Chief Financial Officer
Strategic report
Corporate governance
Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
213
Company statement of
changes in equity
Other reserves
Share
capital
Share
premium
Capital
redemption
reserve
Employee
benefit trust
(EBT) reserve
(Note 11)
Total other
reserves
Retained
earnings
Total
Note
$m
$m
$m
$m
$m
$m
$m
Balance at 1 January 2024
40
282
2
–
2
3,021
3,345
Profit for the year
12
–
–
–
–
–
164
164
Total comprehensive income for the year
–
–
–
–
–
164
164
Cost of equity-settled employee share scheme
–
–
–
–
–
27
27
Purchase of shares held in employee benefit
trust (EBT)
–
–
–
(38)
(38)
–
(38)
Exercise of equity-settled employee share
scheme
–
–
–
1
1
(1)
–
Dividends paid
–
–
–
–
–
(175)
(175)
Balance at 31 December 2024 and
1 January 2025
40
282
2
(37)
(35)
3,036
3,323
Profit for the year
12
–
–
–
–
–
50
50
Total comprehensive income for the year
–
–
–
–
–
50
50
Cost of equity settled employee share scheme
–
–
–
–
–
23
23
Purchase of shares held in employee benefit
trust (EBT)
–
–
–
(36)
(36)
–
(36)
Exercise of equity-settled employee
share scheme
–
–
–
31
31
(31)
–
Dividends paid
–
–
–
–
–
(185)
(185)
Balance at 31 December 2025
40
282
2
(42)
(40)
2,893
3,175
At 31 December 2025, the Company had retained earnings available for distribution of $1,846 million, which is determined with reference to the
Companies Act 2006 and to the guidance issued by the Institute of Chartered Accountants in England and Wales in 2017.
For the proposed final dividend for the year ended 31 December 2025, see Note 12 to the Group consolidated financial statements.
Notes to the Company
financial statements
214
Hikma Pharmaceuticals PLC |
Annual Report 2025
1. Adoption of new and revised standards
The impact of the new and revised standards on the Company is consistent with that on the Group. Details are given in Note 1 to the Group
consolidated financial statements.
2. Significant accounting policies
Basis of accounting
The Company financial statements have been prepared in accordance with FRS 101.
As permitted by FRS 101, the Company has taken advantage of the following exemptions from the requirements of IFRS Accounting Standards
as below:
–
Paragraph 10(d) of IAS 1 ‘Presentation of Financial Statements’ (statement of cash flows)
–
Paragraph 16 of IAS 1 ‘Presentation of Financial Statements’ (statement of compliance with all IFRS Accounting Standards)
–
Paragraph 38A of IAS 1 ‘Presentation of Financial Statements’ (requirements for minimal of two primary statements, including cash flow
statements)
–
Paragraph 45(b) and 46 to 52 of IFRS 2 ‘Share-based Payment’
–
Paragraph 111 of IAS 1 ‘Presentation of Financial Statements’ (cash flow statement information)
–
Paragraphs 134 to 136 of IAS 1 'Presentation of Financial Statements' (capital disclosures)
–
IFRS 7 ‘Financial Instruments: Disclosure’
–
Paragraph 17 of IAS 24 ‘Related Parties Disclosures’
–
Paragraph 30 and 31 of IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’
–
IAS 7 ‘Statement of Cash Flow’
–
Paragraphs 91 to 99 of IFRS 13 'Fair Value Measurement'
No individual profit and loss account is prepared as provided by section 408 of the Companies Act 2006.
The Company financial statements have been prepared under the historical cost basis, except for the revaluation to fair value of certain financial
assets and liabilities. The principal accounting policies adopted are the same as those set out in Note 2 to the Group consolidated financial statements
with the addition of the policies noted below.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less, where appropriate, provision for impairment. The carrying value of investments is reviewed
for impairment when there is an indication that the investment might be impaired. Any provision resulting from an impairment review is charged
to the Company profit and loss. Testing for impairment requires making estimates for the valuation of the investments.
Financial assets at amortised cost
Trade receivables acquired from subsidiaries through an intercompany factoring arrangement and intercompany receivables are classified
as financial assets at amortised cost and are measured at amortised cost using the effective interest method less any expected credit loss.
The Company applies a general approach in calculating expected credit loss for the intercompany receivables. At the reporting date, all outstanding
balances were considered to have low credit risk; therefore, the general approach using a 12-month probability of default was applied when assessing
expected credit loss on a 12-month period basis. The Company applies a simplified approach for the intercompany factoring arrangement.
Share-based payments
Equity-settled employee share schemes are accounted for in accordance with IFRS 2 ‘Share based payment’. The current charge relating to the
subsidiaries’ employees is recharged to the respective subsidiary.
The Company provides funding to the employee benefit trust (EBT) to acquire Company shares, fulfilling its obligation to deliver shares when employees,
including those within the Company’s subsidiaries, exercise their awards. Shares held by the EBT are deducted from other reserves, with a corresponding
transfer to retained earnings upon their delivery to satisfy exercise of share awards.
There are no critical judgements and estimates involved in applying the above accounting policies, that may have a significant risk of resulting in a
material adjustment to the carrying amount of assets and liabilities within the next financial year.
The presentational and functional currency of Hikma Pharmaceuticals PLC is the US dollar as the majority of the Company’s transactions are
conducted in US dollars.
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Corporate governance
Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
215
3. Investments in subsidiaries
The details of investment in subsidiaries are stated in Note 38 to the Group’s consolidated financial statements.
The following table provides the movement of the investments in subsidiaries:
2025
2024
$m
$m
Beginning balance
3,291
3,303
Additions
11
–
Impairment charges
(4)
(12)
Ending balance
3,298
3,291
The additions for the year reflects capital injections to Hikma Ventures Limited, The Regional Headquarters Company for Hikma Pharmaceuticals for
the Headquarters of Foreign Companies, and Hikma Healthcare FZ-LLC. The impairment charges are related to the investment in Hikma Ventures
Limited, driven by a decline in its net asset value.
4. Due from subsidiaries
Non-current
As at 31 December
2025
2024
$m
$m
Hikma UK Limited
22
19
Hikma Pharma Industry
20
20
Hikma Emerging Markets and Asia Pacific FZ-LLC
4
4
Al Jazeera Pharmaceuticals Industries Ltd
3
–
Less: provision for expected credit loss
(4)
(4)
45
39
As at 31 December
2025
2024
Current
$m
$m
Hikma Pharmaceuticals USA Inc.
27
49
Hikma MENA FZE
11
–
Hikma Emerging Markets and Asia Pacific FZ-LLC
8
7
Al Jazeera Pharmaceuticals Industries Ltd
7
2
Arab Pharmaceutical Manufacturing PSC
6
4
Hikma Pharma S.A.E
2
2
Others
15
12
Less: provision for expected credit loss
(8)
(7)
68
69
5. Trade and other receivables
As at 31 December
2025
2024
$m
$m
Trade and other receivables
230
346
Trade and other receivables primarily comprise trade receivables acquired from subsidiaries under an intercompany non-recourse factoring
arrangement. The credit risk associated with these factored receivables is similar to that of the Group’s US receivables since it relates to the same
credit portfolio and customers.
Notes to the Company financial statements
continued
216
Hikma Pharmaceuticals PLC |
Annual Report 2025
6. Cash and cash equivalents
As at 31 December
2025
2024
$m
$m
Cash at banks and on hand
1
7
8
Money market time deposits
17
–
Time deposits
–
32
24
40
1.
In 2025, cash at banks included $4 million placed in interest-bearing accounts (2024: $nil)
Money market deposits comprise investment in funds at FVTPL that are subject to insignificant risk of changes in fair value and can be readily
converted into cash that fall under level 1 valuation (see Note 31 to the Group consolidated financial statements).
7. Other current assets
As at 31 December
2025
2024
$m
$m
Investment at FVTPL
26
25
Prepayments
6
5
Others
1
1
33
31
Investment at FVTPL
comprises a portfolio of debt instruments that are managed by an asset manager and which the Company has designated as
measured at fair value through profit or loss. These assets are classified as level 1 as they are based on quoted prices in active markets (see Note 31
to the Group consolidated financial statements).
8. Financial debts
As at 31 December
2025
2024
$m
$m
Long-term borrowings
395
372
Less: current portion of long-term borrowings
(51)
(84)
344
288
Financial debt arrangements were as follows:
a)
$1,150 million syndicated revolving credit facility that matures on 4 January 2029. At 31 December 2025, the facility had a carrying value of $100 million
(2024: $240 million) and a fair value of $100 million (2024: $240 million) and an unutilised amount of $1,050 million (2024: $910 million). This facility
is available in two tranches: one tranche of $760 million for Hikma Pharmaceuticals PLC, of which $nil million was utilised (2024: $55 million), and a
second tranche of $390 million for Hikma Finance USA LLC, of which $100 million was utilised (2024: $185 million). This facility can be used for
general corporate purposes.
b)
A new $400 million three-year syndicated loan facility that matures on 6 November 2028. At 31 December 2025, the facility had a carrying value of
$398 million and a fair value of $398 million. This facility was granted in two tranches: one tranche of $200 million for Hikma Pharmaceuticals PLC,
of which the carrying value at 31 December 2025 was $199 million, and a second tranche of $200 million for Hikma Finance USA LLC with a carrying
value of $199 million. The proceeds were partially used to settle the previous $400 million five-year syndicated loan facility that was outstanding at
31 December 2024, the remaining proceeds were used for general corporate purposes
c)
A $200 million eight-year loan facility from the International Finance Corporation and Managed Co-lending Portfolio program that matures
on 15 September 2028. At 31 December 2025 the facility had a carrying value of $153 million (2024: $185 million) and a fair value of $153 million
(2024: $185 million). The proceeds were used for general corporate purposes
d)
A $150 million ten-year loan facility from the International Finance Corporation that matures on 15 December 2027. At 31 December 2025, the
facility had a carrying value of $43 million (2024: $63 million) and a fair value of $41 million (2024: $61 million). The proceeds were used for general
corporate purposes
The weighted average interest rates incurred by the Group are disclosed in Notes 22 and 26 to the Group’s consolidated financial statements.
Strategic report
Corporate governance
Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
217
9. Due to subsidiaries
As at 31 December
2025
2024
Non-current
$m
$m
Al Jazeera Pharmaceuticals Industries Ltd
33
45
Hikma Pharmaceuticals LLC
30
30
Hikma Investments LLC
8
–
71
75
The balances above relate to intercompany revolving credit facilities executed for cash management purposes.
As at 31 December
2025
2024
Current
$m
$m
Hikma Pharmaceuticals LLC
24
20
Hikma Farmaceutica, (Portugal) S.A
3
4
Others
2
4
29
28
10. Staff costs
Hikma Pharmaceuticals PLC has an average of 28 employees (2024: 30 employees) (excluding Executive Directors); with a total compensation
expense of $9 million (2024: $8 million), of which salaries and bonuses were $6 million (2024: $6 million), the remaining $3 million (2024: $2 million)
mainly represents national insurance contributions and other employee benefits. Further information about the remuneration of the individual
Directors is provided in the audited part of the Remuneration Committee report on pages 118 to 149.
11. Share capital
Issued and fully paid – included in shareholders’ equity:
2025
2024
Number of shares at 1 January
234,719,686
233,914,604
Shares issued for employees share scheme
–
805,082
Number of shares at 31 December
234,719,686
234,719,686
Balance at 31 December (in $m)
40
40
As at 31 December 2025, 12,833,233 of the issued share capital were held as treasury shares (2024: 12,833,233), and 1,779,538 shares were held in the
employee benefit trust (EBT) (2024: 1,455,190). Treasury shares have no right to receive dividends, and the employee benefit trust (EBT) has waived its
entitlement to dividends. While the voting rights attached to treasury shares are not exercisable, shares held in the EBT retain their voting rights. A total
of 220,106,915 were in free issue (2024: 220,431,263).
In 2025, there was no issued share capital as the EBT purchased shares to satisfy the vested share awards under the share-based compensation
schemes (2024: 805,082).
Shares held in the EBT were acquired using funds provided by the Company to fulfil its obligation to deliver shares when employees, including those
within the Company’s subsidiaries, exercise their awards. These shares are deducted from other reserves, with a corresponding transfer to retained
earnings when utilised for the exercise of share awards. During the year, the Company acquired 1,500,000 shares for a total consideration of $36 million,
and 1,175,652 shares were utilised for the exercise of awards.
12. Profit for the year
The net profit in the Company for the year is $50 million (2024: $164 million). This mainly includes dividend income of $74 million (2024: $198 million)
in addition to factoring income from a subsidiary, general and administrative expenses and net financing expenses. Audit fees for the Company are
included within fees to the Company's auditor and its associates for the audit of the parent company and consolidated financial statements as
disclosed in Note 32 to the Group’s consolidated financial statements.
Notes to the Company financial statements
continued
218
Hikma Pharmaceuticals PLC |
Annual Report 2025
13. Contingent liabilities and financial guarantees
A contingent liability existed at the balance sheet date for standby letters of credit totalling $10 million (2024: $14 million) for potential stamp duty
obligations that may arise from the repayment of loans by intercompany guarantors. It is not probable that any repayment will be made by the
intercompany guarantors.
In addition, the Company guaranteed Hikma Finance USA LLC $500 million, 5.125%, five-year Eurobond issued in July 2025 (Note 26 to the Group
consolidated financial statements). The Company has also guaranteed Hikma Pharmaceuticals USA Inc. contingent consideration related to a
business combination with a carrying value as of 31 December 2025 of $7 million (2024: $103 million) (Note 25 and 28 to the Group consolidated
financial statements). Financial guarantees issued by the Company on behalf of subsidiaries are accounted for at fair value in accordance with IFRS 9.
The fair value of these liabilities is immaterial given the low probability of default for any of the related subsidiaries.
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Corporate governance
Financial statements
Hikma Pharmaceuticals PLC |
Annual Report 2025
219
2026 financial calendar
19 March
2025 final dividend ex-dividend date
20 March
2025 final dividend record date
23 April
Annual General Meeting
30 April
2025 final dividend paid to shareholders
6 August*
2026 interim results and interim
dividend announced
13 August*
2026 interim dividend ex-dividend date
14 August*
2026 interim dividend record date
17 September*
2026 interim dividend paid to shareholders
* Provisional dates
Shareholding enquiries
Enquiries or information concerning existing shareholdings
should be directed to Hikma’s Registrar, MUFG Corporate
Markets, either:
–
in writing to Shareholder Services, MUFG Corporate Markets,
Central Square, 29 Wellington Street, Leeds LS1 4DL
–
by telephone on 0371 664 0300. Lines are open 09:00 – 17:30,
Monday to Friday excluding public holidays in England and Wales.
Calls to 0371 are charged at the standard geographic rate and will
vary by provider. Calls outside the United Kingdom are charged
at the applicable international rate
–
by email to
shareholderenquiries@cm.mpms.mufg.com
–
online at
www.hikmashares.com
Dividend payments – currency
Hikma declares dividends in US dollars. Unless you have elected
otherwise, you will receive your dividend in US dollars. Shareholders
can opt to receive the dividend in pound sterling or Jordanian dinar.
The Registrar retains records of the dividend currency for each
shareholder and only changes them at the shareholder’s request.
If you wish to change the currency in which you receive your
dividend please contact the Registrar.
Dividend payments – bank transfer
From 2026 onwards, dividend payments will only be made by
electronic means. Shareholders who have previously received their
dividend by cheque will need to register a mandate to enable
payments of dividends direct to their bank. Bank account details can
be registered using one of the following methods:
–
On MUFG’s Investor Centre at
www.hikmashares.com
. This is also
where you will be able to obtain future dividend confirmations
–
By calling the Registrar using the details above to request a
dividend mandate form
Shareholders outside the UK should contact the Registrar to discuss
the payment options available.
Dividend payments – international payment system
If you are an overseas shareholder, the Registrar is able to pay
dividends in several foreign currencies for an administrative charge
of £5.00, which is deducted from the payment. Contact the Registrar
for further information.
Website
Press releases, the share price and other information on the Group
are available on Hikma’s website
www.hikma.com
.
Share listings
London Stock Exchange
Hikma’s Ordinary Shares of 10 pence each (Shares) are admitted to
the Official List of the London Stock Exchange. They are listed under
EPIC: HIK, SEDOL: B0LCW08 GB and ISIN: GB00B0LCW083.
Further information on this market, its trading systems and current
trading in Hikma’s shares can be found on the London Stock Exchange
website
www.londonstockexchange.com
.
Global Depository Receipts (GDRs)
Hikma also has listed GDRs on Nasdaq Dubai for which Citibank
acts as Depositary. They are listed under EPIC – HIK and ISIN –
US4312882081. Further information on Nasdaq Dubai, its trading
systems and current trading in Hikma’s GDRs can be found on the
website
www.nasdaqdubai.com
.
American Depository Receipts (ADRs)
Hikma has an ADR programme for which Bank of New York Mellon acts
as Depository. One ADR equates to two Hikma ordinary shares. ADRs
are traded as a Level 1 (OTC) programme under the symbol HKMPY.
Enquiries should be made to:
The Bank of New York Mellon
Shareholder Correspondence
PO Box 43078
Providence RI 02940-3078
By Overnight Courier or Registered Insured Mail:
The Bank of New York Mellon
Shareholder Correspondence
150 Royall St., Suite 101
Canton, MA 02021
Tel: +201-680-6825 (for calls outside the USA)
Tel: +1-888-269-2377 (for toll-free calls within the USA)
E-mail:
shrrelations@cpushareownerservices.com
Website: www.mybnymdr.com
Shareholder fraud
The Financial Conduct Authority has issued a number of warnings
to shareholders regarding boiler room scams. Shareholders may
have received unsolicited phone calls or correspondence concerning
investment matters. These are typically from overseas based ‘brokers’
who target UK shareholders, offering to sell them what oſten turn out
to be worthless or high-risk shares in US or UK investments. These
operations are commonly known as boiler rooms. These brokers
can be very persistent and extremely persuasive. Shareholders are
advised to be very cautious of unsolicited advice, offers to buy shares
at a discount or offers of free company reports. If you receive any
unsolicited investment advice:
–
obtain the correct name of the person and organisations
–
check they are authorised by the FCA by looking the firm up on
www.fca.org.uk/register
–
report the matter to the FCA either by calling 0800 111 6768 or visit
www.fca.org.uk/consumers
–
if the caller persists, hang up
Details of the share dealing facilities sponsored by Hikma are
included in Hikma’s mailings and are on Hikma’s website.
Hikma’s website is
www.hikma.com
and the registered office
is 1 New Burlington Place, London W1S 2HR.
Telephone number + 44 (0)20 7399 2760.
Shareholder information
220
Hikma Pharmaceuticals PLC |
Annual Report 2025
Hikma Pharmaceuticals PLC
Registered in England and Wales number 5557934
Registered office:
1 New Burlington Place
London W1S 2HR
UK
Telephone: +44 (0)20 7399 2760
E-mail:
uk-investors@hikma.com
Hikma Pharmaceuticals USA Inc.
200 Connell Drive, 4th Floor
Berkeley Heights
New Jersey 07922
US
Telephone: +1 908 673 1030
Hikma Pharmaceuticals LLC
Al-Bayader
King Adbullah The Second Street
Facing Al-Ahli Club
Amman
Jordan
Telephone: +962 6 5802900
Hikma Farmacêutica (Portugal) S.A
Estrada do Rio da Mó
8, 8A e, 8B, Fervença
2705 – 906 Terrugem
Sintra, Portugal
Telephone: +351 21 9608410
Advisers
Auditors
PricewaterhouseCoopers LLP
1 Embankment Place
London WC2N 6RH
UK
Brokers
Citigroup Global Markets Ltd
33 Canada Square
Canary Wharf
London E14 5LB
UK
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London E14 5JP
UK
Registrars
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds
LS1 4DL
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Design and production
© Hikma Pharmaceuticals PLC
1 New Burlington Place
London W1S 2HR
UK
T +44 (0)20 7399 2760
www.hikma.com