Interim Report April – September 2022

A very strong continuation of the year with increased sales and profit

July - September

• Consolidated sales during the second quarter, July to September amounted to SEK 73.3 (52.5) million. Adjusted for non-recurring sales the revenue amounted to 51.2 (34.5) MSEK, an increase of 49%.
• Gross profit amounted to SEK 28.6 (16.3) million for the quarter, an increase of 75%.
• EBIT amounted to SEK 11.9 (5.9) million, an increase of 101%. The operating margin was 16% (11%).
• Earnings per share were SEK 0:26 (0:18) for the quarter.
• Cash flow from operating activities amounted to SEK -18.3 (-3.2) million for the quarter.
• Cash and cash equivalents were SEK 28.3 (8.0) million at the end of the quarter.

April - September

• Consolidated sales during the period April-September amounted to SEK 119.4 (89.1) million. Adjusted for non-recurring sales the revenue amounted to 94.2 (66.1) MSEK, an increase of 42.4%.
• Gross profit for the same period amounted to SEK 52.3 (31.7) million, an increase of 65.0%.
• EBIT for April-September amounted to SEK 19.8 (9.0) million, an increase of 221%. The operating margin was 17% (10%).
• Earnings per share were SEK 0:51 (0:27) for the period.
• Cash flow from operating activities amounted to SEK -12.9 (-18.5) million during April-September.
• Cash and cash equivalents were SEK 28.3 (8.0) million at the end of September.

CEO’s comments

Firstly, I would like to welcome the reader to our half-year report! Since this is my first CEO comment, I would like to take the chance to share some of my thoughts regarding EQL and the future, in addition to the normal summary of the quarter.

For the second quarter of 2022/23 our sales amounted to 73,3 (52,5) MSEK. Adjusted for non-recurring items, sales amounted to 51.2 (34.5) MSEK, an increase of 48%. Operating profit (EBIT) amounted to SEK 11.9 (5.9) million, an increase of 101%. The operating margin was 16% (11%), the positive trend continues. During the quarter we have written down development projects where outlooks have changed negatively, we have also made reservations for higher consulting fees in the coming quarters driven primarily by strategy work together with external parties.

Our long-term financial goals remain intact, but we increase the outlook for the current full year from around 25 percent to north of 30 percent. 

In my view, there are a few strategic components that stand out as completely crucial for the future growth of EQL, these are:

• Launching the pipeline products as fast as possible
• Maximize the utility of our assets by launching products in more countries, by ourselves or through partnerships
• Continuously identify and sign new niche generics to be launched in the Nordics and elsewhere to secure long-term growth
• Outlicense and market our strategic key asset Mellozzan
• Be cost-efficient in everything we do
• Continue to curiously explore new business models and potential revenue streams (e.g. as was done with the personal protective equipment (PPE) and the covid tests)

I will keep on coming back to these components and connect my comments about our progress to them.

During the quarter we have launched Colecalciferol EQL Pharma (vitamin D3) in Sweden and Norway. The market is about 120 MSEK yearly with three active competitors.

The sales of self-tests for Covid-19 has continued in the second quarter following the increased number of Covid cases mainly in July and August. EQL is and remains well positioned in the market in case the demand remains or increases.

The company conducts an active outlicensing work of its products mainly in Europe where Mellozzan remains a key product. The first Mellozzan launches through partnerships are expected to take place during the next fiscal year followed by launches in more countries for a number of years. We continue to negotiate with additional licensees in and outside of Europe and hope to close some more license deals during the year.

In September, EQL was named “Best logistics provider within Self-care” by the largest Swedish pharmacy chain Apotek Hjärtat, we are very happy for this award!

The world is currently unstable. So far, we have been able to protect our margins but we keep a watchful eye open for changes in energy, transportation or production costs as well as FX rates and other factors that might influence us.