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EQL Pharma AB Interim / Quarterly Report 2025
6603_ir_2024-11-06_1c248337-c34c-4fd4-bd8e-36183cec7418.pdf
Interim / Quarterly Report
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EQL PHARMA
Interim Report
April – September 2024
| (SEK million) | Jul – Sep 2024 | Jul – Sep 2023 | Apr – Sep 2024 | Apr – Sep 2023 | Apr - Mar 2024 |
|---|---|---|---|---|---|
| Net sales | 85.2 | 59.6 | 168.0 | 115.8 | 264.2 |
| Sales growth % | 43 | -19 | 45 | -3 | 2 |
| Gross profit | 34.7 | 23.9 | 71.7 | 50.1 | 115.0 |
| Gross margin % | 41 | 40 | 43 | 43 | 44 |
| Operating profit (EBIT) | 14.3 | 6.6 | 29.6 | 14.5 | 32.6 |
| Operating margin (EBIT) % | 17 | 11 | 18 | 13 | 12 |
| Profit for the period | 9.6 | 4.7 | 20.0 | 11.5 | 22.7 |
Sales and operating profit growth, new products added to the pipeline
July - September 2024
- Consolidated sales during the second quarter, July to September amounted to SEK 85.2 (59.6) million, an increase of 43%.
- Gross profit amounted to SEK 34.7 (23.9) million, an increase of 45%.
- Operating profit (EBIT) amounted to SEK 14.3 (6.6) million, an increase of 117%. The operating margin was 17% (11%).
- EBITDA margin was 20% (14%).
- Earnings per share before dilution were SEK 0:33 (0:16) for the guarter. Earnings per share after dilution were SEK 0:33 (0:16).
- Cash flow from operating activities amounted to SEK 1.4 (1.0)
- Cash and cash equivalents were SEK 11.8 (20.8) million at the end of the quarter.
April – September 2024
- Consolidated sales during the period April to September amounted to SEK 168.0 (115.8) million, an increase with 45%.
- Gross profit amounted to SEK 71.7 (50.1) million, an increase of 43%.
- Operating profit (EBIT) amounted to SEK 29.6 (14.5) million, an increase with 104%. The operation margin was 18% (13%).
- EBITDA margin was 20% (16%).
- Earnings per share were SEK 0:69 (0:40). Earnings per share after dilution were SEK 0:69 (0:39).
- Cash flow from operating activities amounted to SEK -18.3 (-11.0) million.
- Cash and cash equivalents were SEK 11.8 (20.8) million at the end of September.
CEO's comments
In the second quarter, EQL delivered a sales growth of 43% and an increase in operating profit (EBIT) of 117%. The increase was driven by product launches carried out during the previous financial year, new launches in Q1, as well as sales of previously backordered antibiotics. The gross margin was negatively impacted by ongoing logistical challenges related to the situation in the Red Sea. For the full year 2024/25, we expect a growth rate of around 40%.
Financial Overview for the second Quarter
In the second quarter of 2024/25, sales increased to 85.2 MSEK, an increase of 43% from 59.6 MSEK the previous year. Operating profit (EBIT) increased by 117% to 14.3 MSEK compared to 6.6 MSEK the previous year, with an EBITDA margin of 20%. The operating margin was negatively affected by ongoing transport disruptions in the Red Sea. Freight costs were higher, and all transport takes longer, leading to delayed goods and missed short-term sales opportunities. See more under Other in this text. Cash and cash equivalents amounted to 11.8 (20.8) MSEK at the end of the quarter. Additionally, there is an unused working capital credit of 8.6 (20.0) MSEK.
Financial Objectives and Projections for the Fiscal Year
For the full year 2024/25, we project a sales growth of around 40%. Achieving this would be in line with our long-
term sales goals as outlined in our five-year plan. Our goal is to achieve an EBITDA margin of at least 25% during the last quarter of 2024/25. We will communicate our financial goals for the upcoming five-year period during the year, likely in conjunction with the Q3 report, which will project continued growth and ambition.
Product Launches and Market Dynamics
No new products were launched during the quarter, leaving the portfolio with 40 launched products.
Four new niche generics were added to our pipeline, which now grows to 35. Three of these are development products, part of a larger procurement of new development projects. Signing fees for the projects are the reason that CAPEX is somewhat higher in Q2 than in previous quarters.
The number of launches in 2025/26 has been adjusted downwards based on our assessment of how hospital product procurements will be conducted by Regions and that we are seeing longer lead times with authorities to start reviewing applications. We currently see no significant negative impact on next year's growth as a result.
Our strategic key product Mellozzan, launched in Germany and Austria during Q1, is now also launched in Switzerland. Initial signals from the important German market are positive in that both the market and our partner's market
share are growing. Preparations for a launch in the UK are underway and may take place in the first half of 2025. In France, Italy, Turkey, and Kazakhstan, regulatory procedures are ongoing. Dialogues are in progress for several substantial regions outside Europe, but no concrete agreements have yet been made.
For Memprex, our other strategic key product, regulatory procedures are ongoing in Germany and France. These markets will form a base for future expansion of the product to more countries. Launches can occur during the financial year 2025/26.
Other
From December 2023, our transport routes are affected by ongoing conflicts in the Middle East, which have led our transport partners to navigate via the longer route around the Cape of Good Hope. This extends lead times by 2-3 weeks and increases costs. It also led to stock-outs on individual packaging sizes, where under normal circumstances, we have access to quick solutions. The aggregated effect of these temporary stock-outs negatively impacts the gross margin by a few percentage points.
2 INTERIM REPORT APRIL - SEPTEMBER 2024
Significant events
During the quarter
July 4th, 2024 - Trading in EQL Pharma's shares on Nasdaq Stockholm commences
On 4 July 2024, the trading in the Company's share on Nasdaq Stockholm commences.
EQL Pharma's share will be traded in the Small Cap segment and will retain both its ticker (EQL) and ISIN code (SE0005497732). In connection with the list change, there will be no offering or issue of new shares.
July 5th, 2024 – Mellozzan® (melatonin) has gained marketing approval in Switzerland
EQL's key product Mellozzan® has gained marketing approval by the Health Authorities in Switzerland, where it is to be provided to patients by EQL's license partner Medice Arzneimittel Pütter GmbH & Co. KG. Launch of Mellozzan in Switzerland is planned for the financial year 2024/25, subject to reimbursement approvals and manufacturing capabilities. In addition to Switzerland the licensee also has ongoing work for registrations and subsequent launches in Finland and the UK. In 2023, Medice launched Mellozzan® in Denmark and Norway and this year it was launched in Germany and Austria.
July 16th, 2024 - Notice of annual general meeting in EQL Pharma AB
The shareholders of EQL Pharma AB, Reg. No. 556713-3425, were invited to the annual general meeting held on Monday 19 August 2024 at 16.00 at the company's premises at Stortorget 1 in Lund.
During the quarter, cont.
August 19th, 2024 – Bulletin from the annual general meeting in EQL Pharma AB on 19 August 2024
On 19 August 2024, the annual general meeting was held in EQL Pharma AB
The annual general meeting resolved to adopt the income statement and balance sheet as well as the consolidated income statement and the consolidated balance sheet. The annual general meeting also resolved to distribute the company's result in accordance with the proposal from the board of directors in the annual report meaning that no dividends are paid for the financial year 2023/2024 and that the available funds are carried forward.
The annual general meeting resolved in accordance with the proposal from the Nomination Committee to re-elect Anders Månsson, Christer Fåhraeus, Linda Neckmar, Per Ollermark and Per Svangren as members of the board of directors and to elect Nikunj A. Shah as new board member for the period until the end of the next annual general meeting. Christer Fåhraeus was re-elected as Chairman of the board of directors.
The annual general meeting resolved in accordance with the proposal from the board of directors to implement a long-term incentive program for the company's CEO based on issue of warrants.
Subscription of shares by virtue of the warrants may be effected from and including 21 February 2028 to and including 6 March 2028.
The incentive program comprises a maximum of 100,000 warrants. Each warrant entitles the right to subscribe for one new share in the company at a subscription price per share corresponding to 200 per cent of the volume weighted average price according to Nasdaq Stockholm's official price list for shares in the company during the ten trading days that follows immediately after the publication of the company's interim report for April – June 2024.
Significant events
During the quarter, cont. After the quarter
The warrants shall be issued to the fair market value of the warrants at the time of subscription, which shall be determined by Optionspartner as independent valuation institute in accordance with the Black & Scholes valuation formula. Subscription of shares by virtue of the warrants may be effected from and including 21 February 2028 to and including 6 March 2028.
In case all warrants issued in connection with the incentive program are exercised for subscription of new shares, a total of 100,000 new shares will be issued, which corresponds to a dilution of approximately 0.34 per cent of the company's share capital and votes.
There are no significant events after the quarter.
Product development
Pipeline
EQL Pharma's reporting of the pipeline takes place at a general level and does not include, with the exception of launch phase products, the names of individual products or the products' current or expected market potential. Our goal is to provide better guidance to shareholders without disclosing information to competitors and without our pipeline being interpreted as a financial prospect. The information is updated in connection with the quarterly reports.
Figure 1. Total pipeline of products and how many products are in Review phase and Launch phase respectively.
Products in different phases
Development phase is used here as a general term. In this term all products we actually develop together with partners in, for example, India or the EU are included. But in addition to these products, the term also includes all products on which we have signed licensing or distribution
agreements for one or more geographical markets, although we do not develop the product ourselves.
When a product is fully developed, the application is submitted to the Medicines Agency in the markets where we intend to sell the product. The Agency's then initiate an audit, which generally takes about one year from application to approval. We call this step Review phase. At the end of the quarter, we had six products in the review phase.
When we know that the product is approved, we can place orders for manufacturing and delivery. In parallel with this, we apply for government reimbursement and tenders to the extent that they are available. We call this step the launch phase and usually it takes about six to twelve months from approval until the first package is delivered to pharmacies.
Products in the Launch phase
At the end of the quarter, we have seven products in the launch phase. Six of these are hospital products whose launches are dependent on outcomes in public tenders. The sixth, Testonur (testosterone) which is classified as a retail product, has an expected launch in the fourth quarter this year.
During all stages from the development phase to the
launch phase, situations can arise that risk delaying a launch or even making it impossible. Both ourselves and our carefully selected partners do everything we can to prevent these situations from occurring, but there are always risk factors beyond our control. This means that launches can take place both earlier and later than indicated. The chart below is intended to provide a best guess at any given time.
Figure 2. The company's product launches for the current fiscal year and expected product launches up to and including fiscal year 2029/30.
Market
EQL Pharma has an aggressive growth strategy driven by the launch of new products combined with expansion into new markets. Our products are often generic to originals that have been around for a very long time.
This means that the markets we enter are generally mature, but also that there are few, if any, generic competitors to our products and that it is unlikely that many new ones will be added.
Marketed products
The definition of "product" is a unique substance and / or formulation. So PenV tablets and oral suspension count as two products, not one. A product can be launched in several countries at the same time with different pack sizes but is still only counted as one product launch.
No new products have been launched in this quarter.
Geographic markets
Today, we operate directly under our own brand in Sweden, Denmark, Norway and Finland.
In the rest of the world our products are sold indirectly through partners.
In 2024/25 and beyond, we will expand our geographic presence in the world. Depending on the market, this takes place through a direct or indirect sales model. During the quarter, the following indirect launches have taken place: Methenamine is now sold in Israel and Cyprus at the same time as PenV suspension has started to be sold in the Czech Republic. We have also sold our product Copneg in Lithuania and Potassium Chloride in Portugal. And finally, Mellozzan has been launched in Switzerland.
Business areas
We currently develop and sell only prescription drugs, and tests, in our core business. In that category there are several interesting business areas. So far, we have mostly invested in (a) the field of interchangeable generics in outpatient care (Retail). The intention is to broaden the portfolio to include more (b) injection products for inpatient care (Hospital), (c) unique products/formulations for above all outpatient care (Brands) and d) tests to identify Covid and/or influenza infections (Tests).
Outpatient generics are mainly sold via various exchange systems such as the Swedish "Periodens Vara" system. The injection products are generally sold via public tendering. The unique products achieve sales only through prescription specifically of our product and the tests are sold direct to consumer with pharmacies as the primary sales channel.
Figure 3. The company's product portfolio, i.e. marketed products, per quarter from fiscal year 2021/22 through the reporting period for the current fiscal year. The Y axis is the number of products marketed..
Market
Retail
During the quarter, the Danish authorities have decided on a new law for emergency stocks that affects several of our products in Denmark. We already stock the majority of our Danish goods in Denmark today, so the decision has only a minor effect on our supply chain and no effect on our result for next year in Denmark. The law takes effect from January 2025.
Hospital
During the quarter, EQL submitted tenders for a procurement in Sweden, won a procurement in Finland and received extended contracts for products in several Swedish regions.
Brands
During the quarter, our partner Medice has been approved for an increase in the subsidized price of Mellozzan in Germany. It also benefits EQL as we have an agreed royalty model with Medice linked to the price of Mellozzan.
During the quarter, Medice also had Mellozza both approved and launched in Switzerland. In the UK, preparations for launch are now in full swing.
Tests
Just as in 2022, we saw a Covid epidemic in late summer with an increase in the sale of tests in both Sweden and Finland. Not comparable to the normal winter epidemic in size but we are happy with our decision to keep a stock of tests even after last year's epidemic subsided.
Now we are building up the inventory again in anticipation of the winter outbreak which could happen anytime from November to February based on the history of Covid-19.
Repetition of the Covid-tests
The Boson nasal swab test was the first test we launched, and it is still sold in most pharmacies and supermarkets, etc.
Alltest "Lollipop" test that tests for viruses in saliva is our newest and fastest growing test. Not so surprising as it is also the least unpleasant to test yourself with. Sold in pharmacies.
Answer: Propranolol 1965, Nitrofurantoin 1958, Amitriptylin 1963 and Allopurinol 1967.
Financial information
Sales and operating profit
Sales development
In the second quarter of the financial year 2024/2025, our net sales amounted to SEK 85.2 (59.6) million, which corresponds to a growth of 43%.
Quarterly net sales and Rolling 12 months (R12)* 43% 90 350 85,2 82.8 78.1 80 300 70,2 70 250 59,6 53,5 56,2 E 60 51,2 SEK mi 200 43.0 150 🕏 .= 40 sales 30 100 50 Q1 Q2 Q3 Q1 Q1 Q2 Q4 Q2 Q3 2022/23 2023/24 2021/22 2024/25
Figure 4. Net sales trend fiscal year 2020/21 through reporting period for the current fiscal year. Left Y-axis quarterly turnover in SEK million. Right Y-axis rolling 12-months sales expressed in SEK million.
Profit performance
Operating profit for the second quarter amounted to SEK 14.3 (6.6) million. The operating margin (EBIT) was 17% (11%). All business areas contributed positively to the result.
Figure 5. Operating profit trend (EBIT) for fiscal year 2020/21 through the reporting period for the current fiscal year, the bars are EBIT and the line is rolling 12-month EBIT. The left Y-axis EBIT per quarter expressed in SEK million and the right Y-axis is rolling 12-month EBIT expressed in SEK million.
* Excluding non-recurring sales until 2023/24
Cash flow, investments and financing
Gross profit
Gross profit increased by 45 percent to SEK 34.7 (23.9) million during the quarter, which corresponds to a gross margin of 41 percent (40).
For the period April to September, gross profit increased by 43% to SEK 71.7 (50.1) million, which corresponds to a gross margin of 43 percent (43).
The gross margin was affected by shipping costs, the product mix, depreciation of capitalized development expenses, inventory adjustments and currency effects.
Cash flow
Positive cash flow from operations before changes in working capital of SEK 15.1 (7.9) million for the quarter. For the period April to September the corresponding cash flow was SEK 29.2 (12.8) million.
Change in working capital during the quarter amounted to SEK -13.7 (-6.9) million. Change in working cpital for the period April to September amounted to SEK -47.5 (-23.8) million.
The change can primarily be explained by an increased capital tie-up in inventory.
The total cash flow from current operations amounted to SEK 1.4 (1.0) million for the quarter and for the period April to September SEK -18.3 (-11.0) million.
Investments
EQL Pharma continues to invest in new products. During the quarter, SEK 10.9 (4.7) million was invested in both ongoing and new projects. For the period April to September investments amounted to SEK 18.6 (12.4) million.
Financing
Cash flow from financing operations totaled SEK 8.0 (0.0) million during the quarter and includes utilization of invoice financing credits. For the period April to September the corresponding amounted to SEK 28.3 (-0.2) million.
Financial costs
The quarter's interest expenses attributable to loans amounted to SEK -2.3 (-0.9) million. In addition to interest
costs for loans, financial costs are attributable to interest on leasing debt according to IFRS 16.
Other financial income for the period amounted to SEK 0.0 (0.2) million.
For the period April to September, interest expenses attributable to loans amounted to SEK -4.4 (-1.8) million. Other financial income for the period amounted to SEK 0.0 (1.8) million.
Financial position
Cash and cash equivalents amounted to SEK 11.8 (20.8) million at the end of the quarter and unutilised working capital credit amounted to SEK 8.6 (20.0) million.
Pledged invoice and inventory limits amounted to SEK 140 (110) million.
Tax
Tax according to the applicable tax rate of 20.6% during the quarter amounted to SEK -2.5 (-1.2) million and for the period April to September to SEK -5.2 (-3.0) million.
Additional information
Parent company
EQL Pharma AB is the parent company of the EQL Pharma group. Net sales for the Parent Company during the second quarter amounted to SEK 85.3 (57.4) million and for the period April to September SEK 168.0 (112.5) million. Operating profit amounted to SEK 14.5 (5.3) million for the quarter and for the period April to September SEK 30.0 (13.4) million.
Personnel
The number of full-time employees in the group is 20 (18), out of whom 12 (12) are women, at the Swedish parent company.
In addition to the permanent staff, there are long-term consultants with expertise in GMP, pharmacovigilance, regulatory affairs, business development and wholesale operations tied to the group.
Risk factors
This financial report includes statements that are forward looking but actual future results may differ materially from those anticipated. In addition to the factors discussed, the earnings can be affected by delays and difficulties in the various phases of development, such as formulation, stability, preclinical and clinical trials, but also potentially competition, economic conditions, patent protection and the exchange rate and interest rate fluctuations, and political risks.
Several risk factors may have a negative impact on the operations of EQL Pharma. It is therefore important to consider the relevant risks alongside the Company's growth opportunities. The following text describes risk factors in no particular order and with no claim to be exhaustive. Delays in launching new products can mean deterioration in earnings for the company and it cannot be excluded that the EQL Pharma in the future may need to raise additional capital. An aggressive investment strategy from competition could pose risks in the form of slower sales and weaker profitability. Increased competition could lead to negative sales and earnings effects for the Company in the future.
External factors such as inflation, currency and interest rate fluctuations, supply and demand, booms and recessions as well as geopolitical such as the unrest in the Middle East may have an impact on operating costs, freight costs, selling prices and equity valuations. EQL Pharma's future revenues and valuation of shares may be adversely affected by these factors, which are beyond the Company's control. A large part of the purchases is made in euro whose value can change significantly.
EQL Pharma will continue to develop new products in its field. Time and cost aspects of product development can be difficult to pre-determine with accuracy. This entails the risk that a proposed product is more costly than planned or takes longer than planned.
Additional risks and uncertainties that are not currently known to EQL Pharma may be developed into important factors that affect the Company's operations, results and financial position.
For a more detailed list of risks, we refer to EQL's Annual Report 2023/24, pages 42-43 and 58-60.
Upcoming reports
Future reports for 2024/2025 will be published:
| Current financial period: | |
|---|---|
| Interim Report October – December (Q3) | 2025-02-05 |
| Interim Report January – March (Q4) | 2025-05-08 |
| Annual Report 2024/25 | 2025-07-28 |
| Annual General Meeting | 2025-08-21 |
Additional information
Accounting policies
EQL Pharma's consolidated accounts are prepared in accordance with International Financial Reporting Standards (IFRS). EQL Pharma's interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. For the Group, the same accounting policies as those adopted for this report are described on pages 51-57 of the company's Annual Report for 2023/2024 with the addition of IFRS 13 where fair value has been calculated for all financial assets and liabilities. The fair value of other financial assets, other receivables, trade receivables and other short-term receivables, cash and cash equivalents, trade payables and other liabilities and interest-bearing liabilities is estimated to be equal to its book value. The company has loans with variable interest rates and thus the fair value is deemed to be in line with the book value.
Reporting for the Parent follows the Swedish Annual Accounts Act and recommendation RFR 2 of the Swedish Financial Accounting Standards Council ('Reporting for Legal Entities').
Our financial goals
For the current four-year period, spanning from 2020/21 to 2024/25, we aim to grow by an average of 40 percent per year. The growth pertains to sales of a recurring nature. Furthermore, we aim for the EBITDA margin to be more than 25 percent at the end of the period. This means, that
the EBITDA shall exceed 25% at least in the last quarter of 2024/25. For the current fiscal year 2024/25, we expect a growth of around 40 percent. If achieved, this would mean that the average sales target over the four-year period is met.
The auditors' review
This interim report has been audited by the auditor.
Questions regarding year end report
For further information or questions, please contact:
Axel Schörling,
President & CEO
[email protected]
+46 763 179 060
EQL Pharma is listed on Nasdaq Stockholm, Small Cap list. The company is traded under the ticker symbol EQL and ISIN code SE0005497732.
Board of Directors EQL Pharma
Lund, November 5th, 2024.
Christer Fåhraeus, Chairman Anders Månsson, Memher
Per Ollermark, Member Linda Neckmar,
Memher
Per Svangren, Member Nikunj Shah, Member
Review Report
Introduction
We have reviewed the interim report for EQL Pharma AB (publ) for the period April 1 2024 – September 30 2024. The Board of Directors and the President are responsible for the preparation and presentation of this interim report in accordance with IAS 34 the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
Scope of Review
We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with ISA and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material respects, in accordance with the IAS 34 and Annual Accounts Act.
Malmö November 5th 2024 Deloitte AB
Maria Ekelund Authorized Public Accountant
Consolidated profit and loss statement
| All amounts in '000 | Note | Jul – Sep 2024 | Jul – Sep 2023 | Apr – Sep 2024 | Apr – Sep 2023 | Apr 2023 – Mar 2024 |
|---|---|---|---|---|---|---|
| Net sales | 3 | 85 248 | 59 617 | 168 038 | 115 823 | 264 168 |
| Cost of goods sold | -50 526 | -35 712 | -96 334 | -65 729 | -149 123 | |
| Gross profit | 34 722 | 23 905 | 71 703 | 50 094 | 115 045 | |
| Gross margin | 41% | 40% | 43% | 43% | 44% | |
| Sales and marketing expenses | -14 061 | -11 246 | -26 887 | -22 639 | -48 976 | |
| Administration expenses | -3 555 | -3 189 | -9 991 | -7 991 | -21 826 | |
| R&D expenses | -2 949 | -3 073 | -6 151 | -5 210 | -12 090 | |
| Other operating income | 164 | 160 | 880 | 232 | 463 | |
| Operating profit (EBIT) | 14 321 | 6 557 | 29 553 | 14 487 | 32 615 | |
| Other financial items | 1_ | 249 | 11 | 1 776 | 1 721 | |
| Interest paid | -2 275 | -941 | -4 394 | -1 801 | -5 732 | |
| Result before tax | 12 047 | 5 865 | 25 160 | 14 462 | 28 604 | |
| Tax | -2 485 | -1 185 | -5 186 | -2 957 | -5 899 | |
| Net profit for the period | 9 562 | 4 680 | 19 975 | 11 505 | 22 705 | |
| Other comprehensive income: | ||||||
| Translation difference in the group | 3 | -3 | -2 | 3 | 4 | |
| Sum of Components to be reclassified to net profit: | 3 | -3 | -2 | 3 | 4 | |
| Sum of other comprehensive income: | 3 | -3 | -2 | 3 | 4 | |
| Comprehensive result for the period | 9 565 | 4 677 | 19 972 | 11 508 | 22 709 |
Per share data
| Per share data | Jul – Sep 2024 | Jul – Sep 2023 | Apr – Sep 2024 | Apr – Sep 2023 | Apr 2023 – Mar 2024 |
|---|---|---|---|---|---|
| Earnings per share, before dilution, SEK */ | 0,33 | 0,16 | 0.69 | 0.40 | 0.78 |
| Earnings per share, after dilution, SEK */ | 0,33 | 0,16 | 0.69 | 0.39 | 0.76 |
| Equity per share, SEK | 6,81 | 5,73 | 6.81 | 5.73 | 6.12 |
| Number of shares outstanding | 29 063 610 | 29 063 610 | 29 063 610 | 29 063 610 | 29 063 610 |
| Average number of shares outstanding, before dilution | 29 063 610 | 29 063 610 | 29 063 610 | 29 063 610 | 29 063 610 |
| Average number of shares outstanding, after dilution | 29 063 610 | 29 795 610 | 29 063 610 | 29 795 610 | 29 795 610 |
| Stock exchange rate, SEK | 54,00 | 26,60 | 54.00 | 26.60 | 42.30 |
| Dividend per share | - | - | - | - | - |
* Based on the profit/loss for the period divided by the average number of shares in issue
Quarterly earnings trend
| All amounts in '000 | Jul – Sep 2024 | Apr – Jun 2024 | Jan - Mar 2024 | Oct – Dec 2023 | Apr 2023 – Mar 2024 |
|---|---|---|---|---|---|
| Net sales | 85 248 | 82 789 | 78 134 | 70 211 | 264 168 |
| Sales growth | 43% | 47% | 30% | -12% | 2% |
| Gross profit | 34 722 | 36 981 | 31 452 | 33 499 | 115 045 |
| Gross margin, % | 41% | 45% | 40% | 48% | 44% |
| Operating profit (EBIT) | 14 321 | 15 232 | 8 373 | 9 754 | 32 615 |
| Operating margin, % | 17% | 18% | 11% | 14% | 12% |
| Net profit for the period | 9 562 | 10 412 | 4 693 | 6 507 | 22 705 |
| Cash flow for the period | -1 542 | -7 097 | 10 054 | -10 430 | -23 958 |
Consolidated balance sheet
| All amounts in '000 | Note | 2024-09-30 | 2023-09-30 | 2024-03-31 |
|---|---|---|---|---|
| Intangible assets | 188 634 | 123 925 | 173 309 | |
| Tangible fixed assets | 4 | 1 947 | 2 754 | 2 674 |
| Financial assets | 1 | 1 | 1 | |
| Inventory | 144 377 | 81 156 | 105 627 | |
| Trade receivables | 60 416 | 43 838 | 58 342 | |
| Other receivables | 16 094 | 4 580 | 13 337 | |
| Cash and bank | 11 829 | 20 844 | 20 468 | |
| Total assets | 423 298 | 277 098 | 373 759 | |
| Equity | 197 893 | 166 527 | 177 726 | |
| Deferred Tax liability | 22 696 | 15 008 | 17 510 | |
| Long-term debt, interest-bearing | 15 781 | 1 779 | 16 700 | |
| Short-term debt, interest-bearing | 132 441 | 64 413 | 103 393 | |
| Short-term debt, non interest-bearing | 9 633 | 8 168 | 8 605 | |
| Trade payables | 44 854 | 21 202 | 49 825 | |
| Total equity and liabilities | 423 298 | 277 098 | 373 759 |
Consolidated changes in equity
| All amounts in '000 | Apr – Sep 2024 | Apr – Sep 2023 | Apr 2023 – Mar 2024 |
|---|---|---|---|
| Balance at beginning of period | 177 726 | 154 753 | 154 753 |
| Warrants | 194 | 266 | 266 |
| Profit for the period | 19 975 | 11 505 | 22 705 |
| Other comprehensive income | -2 | 3 | 1 |
| Balance at end of period | 197 893 | 166 527 | 177 726 |
Cash flow
| All amounts in '000 | Jul - Sep 2024 | Jul – Sep 2023 | Apr – Sep 2024 | Apr - Sep 2023 | Apr 2023 - Mar 2024 |
|---|---|---|---|---|---|
| Operating profit (EBIT) | 14 321 | 6 557 | 29 553 | 14 487 | 32 615 |
| Interest paid | -2 274 | -693 | -4 393 | -25 | -4 011 |
| Adjustment for items not included in cash flow | 3 065 | 2 052 | 4 023 | -1 616 | 2 921 |
| Taxes | 0 | 0 | 0 | 0 | 0 |
| Cash flow from operations before changes in | |||||
| working capital | 15 112 | 7 916 | 29 183 | 12 846 | 31 525 |
| Changes in inventory | -7 090 | 7 645 | -38 752 | -15 785 | -40 259 |
| Changes in current receivables | -3 291 | 2 699 | -4 830 | 9 016 | -14 245 |
| Changes in current liabilities | -3 305 | -17 259 | -3 943 | -17 079 | 11 542 |
| Sum changes in working capital | -13 687 | -6 915 | -47 525 | -23 847 | -42 962 |
| Cash flow from operations | 1 425 | 1 002 | -18 342 | -11 001 | -11 437 |
| Acquisitions of intangible non-current assets | -10 930 | -4 680 | -18 583 | -12 186 | -65 336 |
| Acquisitions of tangible non-current assets | 0 | -236 | -37 | -236 | -926 |
| Cash flow from investment activities | -10 930 | -4 916 | -18 621 | -12 422 | -66 262 |
| Amortization, raising of loans | 8 114 | -196 | 28 836 | 18 | 53 970 |
| Warrants program | 194 | 266 | 194 | 266 | 266 |
| Leasing debts | 0 | 236 | 0 | 236 | 910 |
| Amortization of leasing debts | -345 | -346 | -706 | -678 | -1 404 |
| Cash flow from financing activities | 7 963 | -40 | 28 324 | -159 | 53 741 |
| Total cash flow during period | -1 542 | -3 954 | -8 639 | -23 582 | -23 958 |
| Cash / cash equivalents at beginning of period | 13 371 | 24 798 | 20 468 | 44 426 | 44 426 |
| Cash / cash equivalents at end of period | 11 829 | 20 844 | 11 829 | 20 844 | 20 468 |
17 INTERIM REPORT APRIL - SEPTEMBER 2024
Parent company
Profit and loss statement
| All amounts in i '000 | Jul – Sep 2024 | Jul – Sep 2023 | Apr – Sep 2024 | Apr – Sep 2023 | Apr 2023 - Mar 2024 |
|---|---|---|---|---|---|
| Net sales | 85 250 | 57 400 | 168 040 | 112 522 | 258 167 |
| Cost of goods sold | -50 490 | -34 935 | -96 160 | -64 081 | -145 846 |
| Gross profit | 34 760 | 22 465 | 71 879 | 48 441 | 112 321 |
| Gross margin | 41% | 39% | 43% | 43% | 44% |
| Sales and marketing expenses | -13 982 | -11 082 | -26 718 | -22 181 | -48 164 |
| Administration expenses | -3 536 | -3 134 | -9 927 | -7 869 | -21 685 |
| R&D expenses | -2 955 | -3 078 | -6 163 | -5 220 | -12 090 |
| Other operating income | 164 | 160 | 880 | 232 | 463 |
| Operating profit (EBIT) | 14 451 | 5 332 | 29 951 | 13 404 | 30 844 |
| Other financial and interest income | 1 | 249 | 1 | 1 776 | 1 721 |
| Interest expenses and similar expenses | -2 267 | -926 | -4 375 | -1 771 | -5 669 |
| Profit before tax | 12 185 | 4 654 | 25 577 | 13 409 | 26 896 |
| Appropriations | 0 | 0 | 0 | 0 | -24 950 |
| Tax | -2 485 | -1 185 | -5 186 | -2 957 | -438 |
| Net profit for the period | 9 700 | 3 470 | 20 392 | 10 452 | 1 508 |
Parent company
Balance sheet
| All amounts in '000 | 2024-09-30 | 2023-09-30 | 2024-03-31 |
|---|---|---|---|
| Intangible assets | 188 349 | 123 640 | 173 024 |
| Tangible fixed assets | 293 | 339 | 300 |
| Financial assets | 391 | 391 | 391 |
| Inventory | 143 470 | 81 013 | 105 627 |
| Trade receivables | 60 416 | 42 851 | 55 976 |
| Other receivables | 17 389 | 6 757 | 14 762 |
| Cash and bank | 11 163 | 17 821 | 20 203 |
| Total assets | 421 470 | 272 812 | 370 283 |
| Equity | 130 237 | 118 596 | 109 652 |
| Long-term debt, interest-bearing | 15 156 | 0 | 15 453 |
| Short-term debt, interest-bearing | 131 352 | 63 719 | 102 218 |
| Short-term debt, non interest-bearing | 14 872 | 10 986 | 8 203 |
| Appropriations | 85 000 | 58 500 | 85 000 |
| Trade payables | 44 854 | 21 011 | 49 758 |
| Total equity and liabilities | 421 470 | 272 812 | 370 283 |
Notes
Note 1 Accounting policies
The Group applies International Financial Reporting Standards (IFRS), as adopted by the EU. This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting, the Annual Accounts Act and the Nasdaq Stockholm Rule Book for Issuers. Disclosures in accordance with IAS 34 p. 16A appear not only in the financial statements and their accompanying notes but also in other parts of the interim report. Valuation according to IFRS 13 explains that fair value has been calculated for all financial assets and liabilities. The fair value of other financial assets, other receivables, trade receivables and other short-term receivables, cash and cash equivalents, trade payables and other liabilities and interest-bearing liabilities is estimated to be equal to its book value. The company has loans with variable interest rates and thus the fair value is deemed to be in line with the book value. The parent company applies the Annual Accounts Act and the Swedish Financial Reporting Board recommendation RFR 2 Accounting for Legal Entities.
Note 2 Segment reporting
EQL Pharma's operations only comprise one operating segment; generics for prescription pharmacy sales and hospital sales, and therefore reference is made to the income statement and balance sheet regarding operating segment reporting.
Note 3 Allocation of sales
Net sales divided in geographical markets.
| All amounts in '000 | Jul - Sep 2024 | Jul - Sep 2023 | |
|---|---|---|---|
| Sweden | 44 523 | 29 365 | |
| Other Scandinavia | 25 741 | 23 263 | |
| Other Europé | 14 984 | 6 989 | |
| Total | 85 248 | 59 617 |
| All amounts in '000 | Apr - Sep 2024 | Apr - Sep 2023 | Apr 2023 - Mar 2024 |
|---|---|---|---|
| Sweden | 75 853 | 54 948 | 145 284 |
| Other Scandinavia | 58 571 | 36 522 | 84 097 |
| Other Europe | 33 614 | 24 354 | 34 786 |
| Total | 168 038 | 115 823 | 264 168 |
Note 4 Tangible fixed assets
| All amounts in '000 | 2024-09-30 | 2023-09-30 | 2024-03-31 |
|---|---|---|---|
| Right of use assets | |||
| Land and buildings | 601 | 1 720 | 1 202 |
| Inventories | 1 054 | 695 | 1 171 |
| Total right of use assets | 1 655 | 2 415 | 2 374 |
| Tangible fixed assets that are not right of use assets Land and buildings | 0 | 0 | 0 |
| Inventories | 293 | 339 | 300 |
| Total tangible fixed assets that are not right of | |||
| use assets | 293 | 339 | 300 |
| Total tangible fixed assets | 1 947 | 2 754 | 2 674 |
The tangible fixed assets amounted to SEK 1.9 milion on the balance sheet date. The majority of the right of use assets consists of leases for office premises. For all leases for which the Group is lessee (which are not short-term leases or low value assets), the Group recognizes a right of use asset and a corresponding lease liability.
When valuating the right of use asset, the acquisition method is used, i.e the right of use asset is calculated at acquisition cost, adjusted for any revaluation of the lease liability less depreciation. The right of use asset is reported as a tangible fixed asset, while leasing liability is reported separately in the Group's statement of financial position as long-term debt, interest-bearing and short-term debt, interest-bearing.
Notes
Note 5 Transactions with related parties
The nature and extent of related party transactions are described in the group's annual report for 2023/24.
Transactions with related parties arise in the day-to-day operations and are based on commercial terms and market prices. In addition to customary transactions between group companies and remuneration to management and the board, the following transactions with related parties have taken place during the period: Transactions with Cadila Pharmaceuticals Ltd regarding goods purchases and development costs have taken place with SEK 24.2 (13.8) million during the period April to September 2024.
Note 6 Incentive Programmes
Options Scheme – During the period April to September 2024, the company has allocated 100 000 new warrants to the company's CEO.
The warrants have been issued to the fair market value of the warrants at the time of subscription, which was be determined by Optionspartner as independent valuation institute in accordance with the Black & Scholes valuation formula. Subscription price per warrant amounted to SEK 1.94 and cash received amounted to SEK 194,000.
Subscription of shares by virtue of the warrants may be effected from and including 21 February 2028 to and including 6 March 2028.
Each warrant entitles the right to subscribe for one new share in the company at a subscription price per share corresponding to 200 per cent of the volume weighted average price according to Nasdaq Stockholm's official price list for shares in the company during the ten trading days that follows immediately after the publication of the company's interim report for April – June 2024.
In case all warrants issued in connection with the incentive program are exercised for subscription of new shares, a total of 100,000 new shares will be issued, which corresponds to a dilution of approximately 0.34 per cent of the company's share capital and votes.
There are previously outstanding incentive programs in the company in the form of four warrant programs through which a maximum of 732,000 new shares may be issued. If all warrants that have been issued and held by participants are fully utilized for the subscription of shares, a total of 832,000 new shares will be issued, which corresponds to a combined dilution of approximately 2.78 percent of the company's share capital and votes after full dilution.
The earnings conditions mean that the individuals annually for 3.5 years earn the right to the warrants and where it exists a requirement for employment during the respective period. As the warrants in the Warrants Programs will be issued to the participant at their fair market value, it is the company's assessment that no social costs will occur for the company as a result of the Warrants Programs.
Description of the full terms and conditions for incentive programs can be found on the company's website under Investor Relations.
Note 7 Events after accounting period
There are no significant events after the end of the period.
Reconciliation tables KPIs, non-IFRS measures
The company presents certain financial measures in the interim report which are not defined according to IFRS. The company considers these measures to provide valuable supplementary information for investors and the company's management as they enable the assessment of relevant trends. EQL Pharma's definitions of these measures may differ from other companies' definitions of the same terms. These financial measures should therefore be seen as a supplement rather than as a replacement for measures defined according to IFRS. Definitions of measures which are not defined according to IFRS and which are not mentioned elsewhere in the interim report are presented below. Reconciliation of these measures is shown in the tables below.
Key performance indicators not defined according to IFRS
Definition
Net sales divided by net sales corresponding to the period last year.
Key performance indicators
Sales growth
Gross profit
| race saic | is less cost of good | 5 50Iu. | ||||
|---|---|---|---|---|---|---|
| Gross margin | Gross pi | rofit as a percentag | ge of net sales. | |||
| Operating profit (EBIT). | Earnings | s before interest ar | nd tax | |||
| Operating margin (EBIT), %. | Operatir | Operating profit (EBIT) as a percentage of net sales for the period | ||||
| EBITDA margin % | Operatir | Operating profit (EBIT) adjusted for write-downs and amortization | ||||
| divided | by net sales. | |||||
| Shareholders' equity per share | Shareho | lders' equity attrib | utable to Parent Co | ompany shareholder | s | |
| divided | by the number of o | utstanding shares | at the end of the | |||
| period. | ||||||
| Equity/assets ratio | Shareho | olders' equity includ | ding non-controlling | g interests as a | ||
| percenta | age of total assets. | |||||
| lul Son 2024 | lul Con 2022 | Anr. Son 202/ | Anr. Con 2022 | Apr. Mar 2026 | ||
| Jul – Sep 2024 | Jul – Sep 2023 | Apr – Sep 2024 | Apr – Sep 2023 | Apr - Mar 2024 | ||
| 85 248 | 59 617 | 168 038 | 115 823 | 264 168 | ||
| · · · · · · · · · · · · · · · · · · · | · · | · · | · · | |||
| 85 248 | 59 617 | 168 038 | 115 823 | 264 168 | ||
| 85 248 59 617 |
59 617 73 291 |
168 038 115 823 |
115 823 119 389 |
264 168 259 913 |
||
| 85 248 59 617 |
59 617 73 291 |
168 038 115 823 |
115 823 119 389 |
264 168 259 913 |
||
| 85 248 59 617 43% |
59 617 73 291 -19% |
168 038 115 823 45% |
115 823 119 389 -3% |
264 168 259 913 2% |
||
| 85 248 59 617 43% Jul – Sep 2024 |
59 617 73 291 -19% Jul – Sep 2023 |
168 038 115 823 45% Apr – Sep 2024 |
115 823 119 389 -3% Apr – Sep 2023 |
264 168 259 913 2% Apr – Mar 2024 |
||
| 85 248 59 617 43% Jul – Sep 2024 85 248 |
59 617 73 291 -19% Jul – Sep 2023 59 617 |
168 038 115 823 45% Apr – Sep 2024 168 038 |
115 823 119 389 -3% Apr – Sep 2023 |
264 168 259 913 2% Apr – Mar 2024 264 168 |
||
| 85 248 59 617 43% Jul – Sep 2024 85 248 -50 526 |
59 617 73 291 -19% Jul – Sep 2023 59 617 -35 712 |
168 038 115 823 45% Apr – Sep 2024 168 038 -96 334 |
115 823 119 389 -3% Apr – Sep 2023 115 823 -65 729 |
264 168 259 913 2% Apr – Mar 2024 264 168 -149 123 |
Net sales less cost of goods sold
A-B
(A-B)/A
Sales growth
(A-B)/B
Net sales current period, KSEK
Net sales last period, KSEK
Sales growth, %
Net sales, KSEK
Cost of goods sold, KSEK
Gross profit, KSEK
Gross margin, %
Gross profit / Gross margin
Reconciliation tables KPIs, non-IFRS measures, cont.
| Operating profit (EBIT)/ Operating margin | Jul – Sep 2024 | Jul – Sep 2023 | Apr – Sep 2024 | Apr – Sep 2023 | Apr - Mar 2024 | |
|---|---|---|---|---|---|---|
| А | Operating profit (EBIT), KSEK | 14 321 | 6 557 | 29 553 | 14 487 | 32 615 |
| В | Net sales, KSEK | 85 248 | 59 617 | 168 038 | 115 823 | 264 168 |
| A/B | Operating margin (EBIT), % | 17% | 11% | 18% | 13% | 12% |
| EBITDA | margin% | Jul – Sep 2024 | Jul – Sep 2023 | Apr – Sep 2024 | Apr – Sep 2023 | Apr – Mar 2024 |
| Α | Operating profit (EBIT) adjusted for write-downs and amortization , KSEK | 17 386 | 8 366 | 33 246 | 18 366 | 42 157 |
| В | Net sales, KSEK | 85 248 | 59 617 | 168 038 | 115 823 | 264 168 |
| A/B | EBITDA margin, % | 20% | 14% | 20% | 16% | 16% |
| Shareho | lders' equity per share | Jul – Sep 2024 | Jul – Sep 2023 | Apr – Sep 2024 | Apr – Sep 2023 | Apr – Mar 2024 |
| А | Profit/loss for the period, KSEK | 9 562 | 4 680 | 19 975 | 11 505 | 22 705 |
| В | Number of shares | 125 290 | 164 056 | 187 810 | 160 640 | 166 240 |
| A/B | Net earnings per share, % | 8% | 3% | 11% | 7% | 14% |
| Equity-asset ratio | Jul – Sep 2024 | Jul – Sep 2023 | Apr – Sep 2024 | Apr – Sep 2023 | Apr – Mar 2024 | |
| А | Equity, KSEK | 197 893 | 166 527 | 197 893 | 166 527 | 177 726 |
| В | Balance sheet total, KSEK | 423 298 | 277 098 | 423 298 | 277 098 | 373 759 |
| A/B | Equity ratio, % | 47% | 60% | 47% | 60% | 48% |