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Karo Pharma AB Interim / Quarterly Report 2020
6166_10-q_2020-04-29_5a94c1cb-2716-4c2f-9f9a-5c9446a50e58.pdf
Interim / Quarterly Report
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Visiting address: Klara Norra Kyrkogata 33 111 22 Stockholm, Sweden [email protected] karopharma.com
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Interim report Q1 2020
January - March
- Net sales amounted to MSEK 793.6 (420.8). This corresponds to an increase of 89% for the period. The organic growth during the first quarter was 27%, currency impact -1% and 63% relates to the acquisition of Trimb in 2019 and the product portfolio acquired from Leo Pharma (see below).
- EBIT amounted to MSEK 104.1 (87.4) corresponding to a 19% growth.
- Adjusted EBITDA* amounted to MSEK 213.2 (153.0) corresponding to a 39% growth. This excluding nonrecurring, costs related to the acquisition of the Leo Pharma portfolio totalling MSEK 3.9 (0.0).
- The gross margin was 53.9% (55.8%) for the period. The margin for the period was negatively affected by a change in product mix coming from the Trimb acquisition.
- Cash flow from operating activities amounted to MSEK -9.8 (91.8). The negative cash flow has been affected by a fast growth of working capital, primarily trade receivables after an exceptional level of sales in March.
- Earnings per share was SEK 0.39 (0.25) before and after dilution.
- During the period, a product portfolio was acquired from Leo Pharma with all related rights and assets. The transaction closed on March 2, 2020.
- At the end of the period, cash and cash equivalents and other current investments amounted to MSEK 277.7 (248.8 at December 31, 2019) and net debt to MSEK 5 029.
* Alternative Financial Ratios (APM), note 4 for further information.
Visiting address: Klara Norra Kyrkogata 33 111 22 Stockholm, Sweden
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[email protected] karopharma.com
Key financials development Q1, 2016 – 2020
Karo Pharma's 10 largest products Q1 (MSEK)
| Products | 20 20 | 20 19 | Cha nge |
|---|---|---|---|
| Paracet | 82,1 | 33,6 | 144% |
| Selexid | 55,9 | 46,9 | 19% |
| Ibux | 46,9 | 19,8 | 137% |
| Flux 1) | 42,9 | 0,0 | n/ a |
| Burinex | 38,9 | 34,3 | 14% |
| Locobase | 38,8 | 42,9 | -10% |
| Kaleorid | 35,6 | 35,4 | 0 % |
| Mollipect | 32,0 | 29,3 | 10% |
| Multi-Gyn 1) | 31,5 | 0,0 | n/ a |
| Pevaryl 1) | 21,9 | 0,0 | n/ a |
| Other Products | 367,0 | 178,6 | 105% |
| Tota l | 793,6 | 420 ,8 | 89% |
1) Sales of the Trimb portfolio started 2019-09-12
2) Sales of the Leo portfolio started 2020-03-02
Turnover by category Q1
RX – Prescription drugs
OTC – Over the counter drugs (non-prescription)
Visiting address: Klara Norra Kyrkogata 33 111 22 Stockholm, Sweden [email protected] karopharma.com
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Comments by CEO Christoffer Lorenzen
During Q1 Karo Pharma realized growth of 89%, primarily driven by the acquisition of Trimb, which was completed in September 2019. Additionally, Karo Pharma generated organic growth of 27%, which was positively impacted by the COVID-19 crisis driving increased sales from selected Karo Pharma products during the period, notably within the Pain, Cough & Cold, Dermatology and Rx Pharma categories. There has been large variation in performance across markets and categories. For example, the Pain, Cough & Cold category grew by 77% in Q1 whereas the Footcare category contracted by 9%.
Our view is that the strong sales growth reflects a modest increase in actual market demand and consumption, while the main driver was build-up of inventories across wholesalers, pharmacies, and private homes. We expect that this one-off effect partially will be reversed in the remaining three quarters of the year, notably in Q2.
Karo Pharma's business model has proven robust and resilient in a difficult market environment. Supply performance from our CMO partners has been reliable considering the circumstances and our relationships with channel partners and commercial partners have helped us to respond effectively to volatile market conditions. However, uncertainties and risks are elevated, and we are yet to experience and evaluate the longterm impacts of economic slowdown and negative GPD growth on spending and general consumption patterns. We are monitoring the markets continuously and have developed a response plan, with relevant cost and risk reduction measures, which are being executed and will be further escalated should we see a slow-down in business activity.
In parallel we are continuing to develop the business and are continuing to execute in accordance with our long-term strategy and vision for the business. The integration of the Trimb transaction is progressing and we have launched a common purpose 'smart choices for everyday healthcare' as well as shared values for the new Karo. We are also continuing our work to integrate systems and processes and create a scalable business platform.
We have also been active in new business development and expansion and are executing on repatriations in Germany, Austria and the UK. We closed the acquisition of a portfolio of products from Leo Pharma in Q1, which will strengthen our position in the intimate care and dermatology spaces and improve our geographical footprint. We also acquired our Swiss distribution partner, Hygis SA, in order to serve the Swiss market directly.
Our continued investments into the business and its development translate into higher operating expenditures and increases in net working capital, which impact EBITDA margins and cash flow for the quarter and thereby the cash balance. The increased investments support our growth agenda and are required to build a scalable and efficient pan-European platform.
Christoffer Lorenzen
CEO
Key financial data (MSEK)
[email protected] karopharma.com
Visiting address: Klara Norra Kyrkogata 33 111 22 Stockholm, Sweden
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| January - March | Full Year | |||
|---|---|---|---|---|
| 2020 | 2019 | % C hange | 2019 | |
| Net Sales | 793,6 | 420,8 | 89% | 1 901,2 |
| Gross Profit | 427,7 | 234,8 | 82% | 984,0 |
| Operating Cost | -323,7 | -147,4 | 120% | -811,9 |
| EBITDA | 209,3 | 153,0 | 37% | 491,9 |
| EBITDA margin % | 26,4% | 36,3% | 25,9% | |
| Profit before tax | 107,1 | 51,0 | 110% | 16,6 |
| EpS, SEK | 0,39 | 0,25 | 57% | 0,05 |
| Cash Flow from operating activities | -9,8 | 91,8 | -111% | 106,8 |
| Cash | 277,7 | 493,6 | -44% | 248,8 |
Sales and earnings
| January - March 2020 |
2019 | |
|---|---|---|
| Net sales | 793,6 | 420,8 |
| Cost of goods sold | -365,9 | -186,0 |
| Gross Profit | 427,7 | 234,8 |
| Cost before amortization and depreciation | -218,4 | -81,9 |
| EBITDA | 209,3 | 153,0 |
| Non-recurring costs | 3,9 | 0,0 |
| Adjusted EBITDA | 213,2 | 153,0 |
| Amoritzation and depreciation related operating costs |
-105,2 | -65,6 |
| Adjusted EBIT | 108,0 | 87,4 |
Net sales for the period increased to MSEK 793.6 (420.8). This corresponds to an increase of 89% for the first quarter.
Cost of goods sold amounted to MSEK 365.9 (186.0). The gross margin was 53.9% (55.8%) during the same period. The gross margin in the quarter has been impacted negatively by a changed product mix from the Trimb acquisition.
Operating costs including depreciation, other operating income and other operating expenses amounted to MSEK 323.7 (147.4) during the period (increase of 120%). Sales costs almost doubled to MSEK 235.8 (123.3) driven by costs for taking over the product portfolio from LEO Pharma, the establishment of an own organization with, among other things, own subsidiaries in Denmark, Finland and Germany, and the acquisition of Trimb. Administration costs amounted to MSEK 73.1 (24.5). The increase (198%) is mainly due to cost related to the acquisition of Trimb and the product portfolio from Leo Pharma and restructuring costs totaling MSEK 3.9.
The adjusted operating profit amounted to MSEK 213.2 (153.0), equivalent to a 37% increase.
Visiting address: Klara Norra Kyrkogata 33 111 22 Stockholm, Sweden [email protected] karopharma.com
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Earnings per share was 0.39 (0.25) SEK.
Cash flow and financial position
Cash flow from operating activities during the quarter was MSEK -9.8 (91.8). Group cash and cash equivalents amounted to MSEK 277.7 (MSEK 248.8 as of December 31, 2019) at the end of the period. As part of COVID-19 Karo Pharma has stress tested its financial position, including cash reserves, and have concluded that we have adequate reserves.
On December 31, total assets amounted to MSEK 11 842.0 (7 013.8), whereof intangible assets accounted for MSEK 9 854.6 (5 429.8).
Group equity amounted to MSEK 5 591.8 (3 704.6). The equity ratio was 47.2% (52.8%).
Parent company
The Parent company's net sales for the period amounted to MSEK 222.5 (188.9). Profit after financial items amounted to MSEK 31.6 (7.7). The parent company's cash, cash equivalents and other current investments amounted to MSEK 250.9 (61.6 as of December 31, 2019).
Auditors' review
The interim report has not been the subject to auditors' review.
Visiting address: Klara Norra Kyrkogata 33 111 22 Stockholm, Sweden
[email protected] karopharma.com
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Significant events
During the period an intimate care and dermatology product portfolio from LEO Pharma was acquired for 90 MEUR, which was signed and announced by Karo Pharma on 23 December 2019 and approved by relevant competition authorities on 20 February 2020. The net asset acquisition was completed March 2, 2020.
The transaction is expected to contribute positively to Karo Pharma's market position within intimate care and dermatology and will support the ambitions to expand the European geographical footprint.
The acquired portfolio includes four anti-hemorrhoid products: Sheriproct®, Doloproct®, Neriproct® and Ultraproct® and six dermatology products that are mainly over the counter: Ultrabas®, Ultralip®, Ultraphil®, Ultrasicc®, Neribas® and Ultralan®.
COVID-19
During the last month of the quarter Karo Pharma recorded significant revenue growth from certain product categories mainly through stock build up orders among distributors, pharmacies and households. At the same time, the company also experienced a slow-down in demand from other product categories, as a consequence of the spread of COVID-19 across Europe. The impact on supply chain, productivity among employees and the business model has so far been limited but the long-term consequences of a general economic downturn in Europe may have a negative impact on growth and profitability in the remaining quarters of 2020 as mentioned in the CEO letter.
Karo Pharma management has conducted an extensive stress test in connection with COVID-19 in collaboration with the Board of Directors in which sales and costs and cash items have been evaluated. The stress test has helped identify key risks and a response plan has been put in place and we have ensured that cash reserves are sufficient. Karo Pharma continues to evaluate the situation on a daily and weekly basis prepared to take further actions if the situation should change.
Risks and uncertainties
As an international group, Karo Pharma is exposed to various risks, which affect the opportunities to achieve the set goals. These are operational risks, such as the risk that competitive situations affect price levels and sales volumes and the risk that the economic development in the markets and in the segments where the Group operates is not stable. These include financial risks such as currency risks, interest rate risks and credit risks. Besides the COVID-19 crisis, which is covered above, no additional significant change in material risks or uncertainties has occurred during the period. Our assessment is thus unchanged compared to the account of Karo Pharma's risks, uncertainties, and the management of the same in the company's Annual Report for 2019. Readers who wish to consult the annual report can download this from Karo Pharma's website www.karopharma.com, or request it from Karo Pharma AB, PO Box 16 184, 103 24 Stockholm, Sweden.
Significant events after period end
Visiting address: Klara Norra Kyrkogata 33 111 22 Stockholm, Sweden [email protected] karopharma.com
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April 1, 2020 Karo Pharma acquired Hygis SA, a Swiss distributing company with exclusive distribution rights to Karo's brands MultiGyn® and MultiMam®. Hygis' operations are limited to the distribution of these brands and the acquisition gives Karo Pharma control over the direct sales of these brands. Karo Pharma expects to reach annual net sales related to the two brands of MEUR 1.3 in Switzerland. Additionally, we see potentials to capture synergies related to other brands currently sold in the Swiss market.
Financial Calendar
Interim report Jan-Jun 2020 Jul 21,2020
Interim report Jan-Sep 2020 Oct 30, 2020
The Annual Report 2019 was released April 1, 2020 and the Annual General Meeting will be held May 25, 2020 at Näringslivets Hus, Stockholm.
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Board's assurance
The Board of Directors and the CEO assure that the interim report provides a true and fair view of the company's and the Group's operations, position and results and describes significant risks and uncertainties that the company and the companies that are part of the Group face.
Stockholm April 29, 2020
Bo Jesper Hansen Erika Henriksson Vesa Koskinen Chairman of the Board Director Director
Director Director Director
Christoffer Lorenzen CEO
Eva Sjökvist Saers Håkan Åström Flemming Örnskov
For further information, please contact
Christoffer Lorenzen, CEO, +46 73-501 76 20, [email protected] Jon Johnsson, CFO, +46 73-507 88 61, [email protected]
About Karo Pharma
Karo Pharma offers "Smart choices for everyday healthcare". We own and commercialize reliable original brands within prescription drugs and over over-the-counter consumer products. Our products are available in over 60 countries with the core in Europe and the Nordics region. The headquarter of Karo Pharma is in Stockholm and the company is listed on Nasdaq Stockholm, Mid Cap.
The information in this report is such that Karo Pharma is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, on April 29, 2020 at 16.00 CET.
Consolidated income statement summary (KSEK)
Visiting address: Klara Norra Kyrkogata 33 111 22 Stockholm, Sweden
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[email protected] karopharma.com
| Ja nua ry - Ma rch | Full Yea r | ||
|---|---|---|---|
| 20 20 | 20 19 | 20 19 | |
| Net sales | 793 586 | 420 822 | 1 901 196 |
| Cost of goods sold | -365 862 | -185 983 | -917 165 |
| Gross Profit | 427 724 | 234 839 | 984 030 |
| Operating cost | |||
| Distribution cost | -235 827 | -123 349 | -600 264 |
| Administration | -73 082 | -24 499 | -188 361 |
| Research and Development | 0 | 0 | 0 |
| Other operating income/ expenses | -14 742 | 400 | -23 304 |
| Total operating costs | -323 650 | -147 447 | -811 928 |
| Operating Profit | 104 074 | 87 392 | 172 102 |
| Financial Net | 3 054 | -36 355 | -155 512 |
| Profit/ loss before tax | 107 128 | 51 037 | 16 590 |
| Tax | -20 349 | -10 757 | -7 649 |
| Net profit/ loss | 86 779 | 40 280 | 8 941 |
| Net earnings attributable to: | |||
| Shareholders in the parent company | 86 669 | 40 281 | 8 890 |
| Non-controlling interests | 110 | 0 | 51 |
| Earnings per share (SEK) ¹ | 0,39 | 0,25 | 0,05 |
| Number of shares issued (000) | 225 033 | 164 333 | 225 033 |
¹ Taking into account the bonus element in the rights issue
Consolidated statement of comprehensive income (KSEK)
| Ja nua ry - Ma rch | Full Yea r | ||
|---|---|---|---|
| 20 20 | 20 19 | 20 19 | |
| NET PROFIT FOR THE PERIOD | 86 779 | 40 280 | 8 941 |
| Other comprehensive income for the | |||
| period, net of tax | |||
| Exchange rate differences | -136 877 | 53 303 | 41 971 |
| TOTAL COMPREHENSIVE INCOME | -50 098 | 93 583 | 50 912 |
| Total comprehensive income attributable | |||
| to: | |||
| Shareholders in the parent company | -50 208 | 93 583 | 50 861 |
| Non-controlling interests | 110 | 0 | 51 |
Visiting address: Klara Norra Kyrkogata 33 111 22 Stockholm, Sweden
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Consolidated report over financial position (KSEK)
| 31 March | 31 December | ||
|---|---|---|---|
| 20 20 | 20 19 | 20 19 | |
| Assets | |||
| Intangible Assets | 9 854 561 | 5 429 823 | 9 090 094 |
| Equipment | 23 575 | 18 031 | 20 626 |
| Utlization rights | 7 722 | 11 483 | 9 407 |
| Deferred tax claim | 571 482 | 533 185 | 600 598 |
| Other financial assets | 3 588 | 136 | 2 745 |
| Other current assets | 1 103 375 | 527 574 | 926 253 |
| Cash and cash equivalents | 277 727 | 493 569 | 248 806 |
| TOTAL ASSETS | 11 842 0 30 | 7 0 13 80 1 | 10 898 530 |
| Sha reholders' equity a nd Lia bilities | |||
| Equity | 5 591 810 | 3 704 585 | 5 641 908 |
| Deferred tax | 460 042 | 142 981 | 469 384 |
| Long term debt | 2 227 179 | 1 875 682 | 1 251 119 |
| Current Liabilities | 3 562 999 | 1 290 554 | 3 536 119 |
| TOTAL EQUITY AN D LIABILITIES | 11 842 0 30 | 7 0 13 80 1 | 10 898 530 |
Consolidated statement of changes in equity (KSEK)
| Other | Reta ined ea rnings/ |
||||
|---|---|---|---|---|---|
| Attributa ble to sha reholders of the pa rent | Sha re | contributed | a ccumula ted | N on-controlling | |
| compa ny | ca pita l | ca pita l | losses | interests | Tota l equity |
| Amount a t 1 Ja nua ry 20 19 | 65 733 | 4 0 56 0 78 | -510 866 | 56 | 3 611 0 0 2 |
| Total earnings Dividend |
50 861 | 51 | 50 912 | ||
| Share buy-backs | 1 531 | 1 531 | |||
| Rights issue after transaction costs and deferred taxes |
24 280 | 1 954 183 | 1 978 463 | ||
| Share buy-backs | |||||
| Amount a t 31 December 20 19 | 90 0 13 | 6 0 10 261 | -460 0 0 5 | 1 639 | 5 641 90 8 |
| Amount a t 1 Ja nua ry 20 20 | 90 0 13 | 6 0 10 261 | -460 0 0 5 | 1 639 | 5 641 90 8 |
| Total earnings Dividend Shareholder changes in the group |
-50 208 | 110 | -50 098 | ||
| Share buy-backs | |||||
| Rights issue after transaction costs and deferred taxes |
|||||
| Amount a t 31 Ma rch 20 20 | 90 0 13 | 6 0 10 261 | -510 212 | 1 749 | 5 591 810 |
[email protected] karopharma.com
Visiting address: Klara Norra Kyrkogata 33 111 22 Stockholm, Sweden
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Consolidated statement of cash flows (KSEK)
| Ja nua ry - Ma rch | Full Yea r | ||
|---|---|---|---|
| 20 20 | 20 19 | 20 19 | |
| Operating activities | |||
| Operating income/ loss before financial items | 104 074 | 87 392 | 172 102 |
| Depreciation | 105 226 | 65 574 | 319 755 |
| Other items not affecting liquid assets | 264 | 0 | -207 |
| 209 564 | 152 966 | 491 650 | |
| Financial items received and paid | -42 005 | -29 812 | -134 033 |
| Income taxes paid | -20 202 | -475 | -6 093 |
| Cash flow from operating activities before changes in working capital |
147 358 | 122 679 | 351 525 |
| Changes in working capital | -157 122 | -30 879 | -244 681 |
| Cash flow from operating activities | -9 764 | 91 800 | 106 844 |
| Investing activities | |||
| Net investments in company acquisitions | 0 | 0 | -2 456 377 |
| Net investments in intangible assets | -977 116 | -6 917 | -31 896 |
| Net investments in financial assets | -672 | 0 | -806 |
| Net investments in property, plant and equipment | -4 475 | -1 532 | -2 651 |
| Sale of intangible fixed assets | 0 | 0 | 50 000 |
| Sale of property, plant and equipment | 0 | 0 | 20 |
| Cash flow from investing activities | -982 262 | -8 449 | -2 441 710 |
| Financing activities | |||
| Net proceeds from share issues | 0 | 0 | 2 003 114 |
| Tansaction costs share issue | 0 | 0 | -23 999 |
| Borrowings | 1 025 000 | 0 | 3 500 000 |
| Repayment of loans | -6 687 | -1 145 | -3 294 469 |
| Cash flow from financing activities | 1 018 313 | -1 145 | 2 184 646 |
| Cash flow from the period | 26 287 | 82 206 | -150 220 |
| Cash at the beginning of the period | 248 806 | 398 580 | 398 580 |
| Exchange rate differences in cash | 2 634 | 12 783 | 446 |
| Cash at the end of the period | 277 727 | 493 569 | 248 806 |
Visiting address: Klara Norra Kyrkogata 33 111 22 Stockholm, Sweden
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Parent company income statement summary (KSEK)
| January - March | Full Year | ||
|---|---|---|---|
| 2020 | 2019 | 2019 | |
| Net sales | 222 493 | 188 946 | 701 042 |
| Cost of sales | -106 270 | -82 552 | -324 074 |
| Gross profit | 116 223 | 106 393 | 376 969 |
| Operating costs | |||
| Sales costs | -60 286 | -55 447 | -247 492 |
| Administration | -25 260 | -10 012 | -94 246 |
| Research and development | 0 | 0 | 0 |
| Other operating income/ expenses | 297 | 330 | -1 192 |
| Total operating costs | -85 249 | -65 129 | -342 929 |
| Operating profit/ loss | 30 974 | 41 264 | 34 039 |
| Financial net | 643 | -33 574 | -123 724 |
| Profit/ loss before tax | 31 618 | 7 690 | -89 685 |
| Group contributions paid | 0 | 0 | 157 380 |
| Tax | 0 | -1 839 | -15 799 |
| Net profit | 31 618 | 5 851 | 51 895 |
Parent company balance sheet summary (KSEK)
| 31 March | 31 December | ||
|---|---|---|---|
| 2020 | 2019 | 2019 | |
| Assets | |||
| Intangible assets | 3 602 210 | 2 585 402 | 2 453 690 |
| Equipment | 5 476 | 1 101 | 1 097 |
| Utilization rights | 494 715 | 480 229 | 494 715 |
| Other financial assets | 275 902 | 362 806 | 304 223 |
| Participation in group companies | 5 128 404 | 2 565 982 | 5 128 404 |
| Other current assets | 1 604 778 | 253 646 | 1 682 486 |
| Cash and cash equivalents | 250 901 | 298 589 | 61 557 |
| TOTAL ASSETS | 11 362 387 | 6 547 755 | 10 126 173 |
| Shareholders' equity and liabilities | |||
| Equity | 5 562 087 | 3 505 962 | 5 530 470 |
| Deferred tax | 241 858 | 0 | 21 989 |
| Long term debt | 4 176 660 | 1 880 370 | 1 141 190 |
| Current liabilities | 1 381 782 | 1 161 423 | 3 432 525 |
| TOTAL EQ UITY AN D LIABILITIES | 11 362 387 | 6 547 755 | 10 126 173 |
[email protected] karopharma.com
Visiting address: Klara Norra Kyrkogata 33 111 22 Stockholm, Sweden
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Note 1
Accounting and valuation principles
This report has been prepared in accordance with International Accounting Standards 34 regarding interim reports and international accounting standards IFRS as adopted by the EU. The accounting and valuation principles that have been used are unchanged compared to those that were applied in 2019.
Regarding the Parent Company, this annual report has been prepared in accordance with the Annual Accounts Act and RFR 2 Accounting for Legal Entities. The accounting principles applied for the Parent Company differ from those applied for the Group solely with respect to the accounting of leasing agreements.
Note 2
Loss carryforwards
As of the balance sheet date December 31, 2019, Karo Pharma AB has unutilized loss carryforwards of MSEK 2 402, Karo Pharma AS of MSEK 724 and Trimb Group of MSEK 304. In light of the Group's expected profit development, the deficits are fully valued in the balance sheet adjusted for the taxes during the first quarter.
Note 3
Net Asset Acquisition
On March 2, 2020, a product portfolio was acquired from Leo Pharma and all related intellectual property rights and assets, including required licenses and permits and existing inventories.
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Note 4
Definitions
In the report, a number of financial performance measures are referred to which are not defined by IFRS. These measures are used to help investors, management, and other stakeholders to analyse the company's operations. These measures may differ from measures with similar names at other companies. See also table on page 5.
Below are a number of financial performance measures and how these are used to analyse the company's goals. For further definitions, see the Annual Report 2019 under the heading definitions.
| Fina ncia l performa nce mea sure | Definition | Purpose |
|---|---|---|
| Equity ra tio | Equity as a percentage of Total assets |
The equity ratio is relevant for investors and other stakeholders who want to assess the company's financial stability and ability to manage long term. |
| Gross ma rgin | Gross earnings as a percentage of Net sales. |
Gross earnings is used to show the company's margin before the impact of costs such as sales and administration costs and R & D. |
| Adjusted EBITDA | Operating earnings before depreciation excluding items affecting comparability |
The financial performance measure shows the underlying earnings from operations, adjusted for effect of depreciation and items that affect comparisons over time. It provides a picture of earnings generated from ongoing operations. |
| Adjusted EBITDA ma rgin | Adjusted EBITDA in relation to Net sales |
The ratio is used to measure the profitability of ongoing operations. |
Note 5
Fair value of financial instruments
The Group holds no derivative instruments or other financial instruments valued at fair value.
The fair value of long- and short-term interest-bearing liabilities is not expected to deviate materially from the recognized amount. For financial instruments recognized at amortized cost; accounts receivables, other receivables, cash and cash equivalents, accounts payable and other interest-free liabilities, the fair value is assessed to be consistent with the recognized amount.