Interim Report April - June 2024

Sales and operating profit growth, new products added to the pipeline

April - June

• Consolidated sales during the first quarter, April to June amounted to SEK 82.8 (56.2) million, an increase of 47%.
• Gross profit amounted to SEK 37.0 (26.2) million for the quarter, an increase of 41%.
• EBIT amounted to SEK 15.2 (7.9) million, an increase of 92%. The operating margin was 18% (14%).
• EBITDA margin was 19% (18%).
• Costs related to preparations for uplisting to NASDAQ main list in the quarter of SEK 1.0 (0,2) million. Furthermore, extraordinary shipping costs linked to the situation in the Red Sea amounted to SEK 1.1 (0) million.
• Earnings per share before dilution were SEK 0:36 (0:23) for the quarter. Earnings per share after dilution were 0:36 (0:23).
• Cash flow from operating activities amounted to SEK -19.8 (12.0) million for the quarter.
• Cash and cash equivalents were SEK 13.4 (24.8) million at the end of the quarter.

CEO’s comments

During the quarter, EQL delivered a sales growth of 47% and an operating profit (EBIT) growth of 92%. The increase was driven by product launches carried out during the previous financial year, four new launches during the quarter, and the sale of previously unavailable antibiotics. The operating result was negatively affected by costs totaling 2.1 MSEK due to uplisting costs and increased freight costs. For the full year 2024/25, we expect a growth rate of around 40%.

Financial Overview for the First Quarter

During the first quarter of 2024/25, sales rose to 82.8 MSEK, an increase of 47% from 56.2 MSEK the previous year. Operating profit (EBIT) increased by 92% to 15.2 MSEK compared to 7.9 MSEK the previous year, with an EBITDA margin of 19%. The operating margin was negatively affected by approximately 2.1 MSEK due to listing costs on NASDAQ and increased freight costs following disruptions in the Red Sea.

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 align with our long-term sales goals outlined in our five-year plan. Our target is to reach an EBITDA margin of at least 25% at the end of the period. This means, that the EBITDA shall exceed 25% at least in the last quarter of 2024/25. We will also communicate our financial goals for the next five-year period during the year, which will reflect continuous growth and ambition.

Product Launches and Market Dynamics

During the quarter, four new pharmacy products were launched in the Nordic market, increasing the portfolio from 36 to 40 launched products.

Our strategic key product Mellozzan was launched during the quarter in Germany and Austria and was shortly after the quarter's end also approved in Switzerland. Preparations for the launch in Switzerland and the United Kingdom are ongoing, and launches can occur towards the end of 2024/25.

For Memprex, our second strategic key product, regulatory procedures are ongoing in Germany and France. These markets will form a base for future product expansion to more countries.

During the quarter, four new niche generics were added to our pipeline, which remains at 31 as four products were launched.

Other

From December 2023, our transport routes have been affected by ongoing conflicts in the Middle East, causing 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, negatively affecting our gross margins.

During the quarter, we received the news that EQL was approved for trading on NASDAQ Stockholm, and shortly after the quarter's end, on July 4th, our stock was listed for trading. The listing on the main list is another important milestone in our company's development as it provides a clear quality mark to suppliers, customers, and investors. It also simplifies for us, as a NASDAQ-listed company, to operate in the Swedish and international capital markets.

This disclosure contains information that EQL Pharma is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 08-08-2024 07:00 CET.