Year-end Report April 2023 – March 2024

Good growth and record amount of launches

January - March 2024

• Consolidated sales during the fourth quarter, January to March amounted to SEK 78.1 (60.3) million, an increase of 30%. Adjusted for non-recurring sales in the comparative quarter Q4 2022/23, the revenue amounted to 78.1 (53.5) MSEK, an increase of 46%.
• Gross profit amounted to SEK 31.5 (28.1) million for the quarter, an increase of 11%.
• EBIT amounted to SEK 8.4 (6.1) million, an increase of 38%. The operating margin was 11% (10%).
• EBITDA margin was 14%.
• Costs related to preparations for uplisting to NASDAQ main list in the quarter of SEK 2.2 million. Furthermore, extraordinary shipping costs linked to the situation in the Red Sea amounted to SEK 1.6 million. Adjusted for these, the operating profit (EBIT) amounted to SEK 12.2 million and the operating margin to 16%.
• EBITDA margin adjusted for extraordinary costs was 19%.
• Earnings per share before dilution were SEK 0:16 (0:14) for the quarter. Earnings per share after dilution were 0:16 (0:14).
• Cash flow from operating activities amounted to SEK -2.9 (27.3) million for the quarter.
• Cash and cash equivalents were SEK 20.5 (44.4) million at the end of the quarter.

April - March 2024

• Consolidated sales during the period April – March amounted to SEK 264.2 (259.9) million, an increase with 2%. Adjusted for non-recurring sales in the comparison period April – March 2022/23, the revenue amounted to 264.2 (203.8) MSEK, an increase of 30%. There was sales of Covid-19 tests during 2023/24, but significantly lower than 2022/23
• Gross profit for the same period amounted to SEK 115.0 (115.9) million,
• EBIT for April – March amounted to SEK 32.6 (41.3) million.
• EBITDA margin was 16%.
• Costs related to preparations for uplisting to NASDAQ main list amounted to SEK 5.2 million in the period April – March. Furthermore, extraordinary shipping costs linked to the situation in the Red Sea amounted to SEK 1.6 million. Adjusted for these, the operating profit (EBIT) amounted to SEK 39.4 million and the operating margin to 15%.
• EBITDA margin adjusted for extraordinary costs was 19%.
• Earnings per share were SEK 0:78 (1:06) for the period. Earnings per share after dilution were 0:76 (1:04).
• Cash flow from operating activities amounted to SEK -11.4 (27.6) million during April-March.
• Cash and cash equivalents were SEK 20.5 (44.4) million at the end of March.

CEO’s comments

EQL achieved sustained growth and profitability in the fourth quarter. Sales escalated by 46%, adjusted for non-recurring sales in the comparison quarter. The growth was driven by the launch of several new products and the replenishment of previously unavailable antibiotics. While the operating profit was adversely affected by expenses totaling 3.8 MSEK due to NASDAQ uplisting costs and increased shipping costs due to disruptions in the Red Sea, the adjusted EBITDA margin reached 19%. Throughout fiscal year 2023/24, EQL consistently expanded, fulfilling the growth projection of approximately 30%, adjusted for non-recurring sales in the comparison period. Looking ahead to the fiscal year 2024/25, we anticipate a growth rate of around 40%, with a target EBITDA margin of more than 25%.

Detailed Fourth Quarter Financials

In the fourth quarter of 2023/24, sales surged to 78.1 MSEK, up 46% from 53.5 MSEK in the previous year, adjusted for non-recurring sales in the comparison quarter. The operating profit (EBIT) increased by 38% to 8.4 MSEK, compared to 6.1 MSEK in the past year, with an EBITDA margin of 14%. After adjusting for 2.2 MSEK in costs related to NASDAQ and 1.6 MSEK for heightened shipping fees, the adjusted operating profit (EBIT) was 12.2 MSEK, resulting in an EBITDA margin of 19%.

Financial Objectives and Projections for the Upcoming 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 objectives as outlined in our five-year financial plan. We aim to reach an EBITDA margin of at least 25% in 2024/25. We will also articulate our financial goals for the next five years during this period, aiming to sustain growth and elevate our market ambitions.

Product Launches and Market Dynamics

This quarter saw the introduction of eight new products, primarily catalyzed by successful procurement bids in Finland, Sweden, and Denmark that came into effect. Additionally, the Mellozzan Oral Solution was launched, marking significant progress in our Branded product range.

Major milestones were reached for our strategic products: Mellozzan, approval in the UK with a target to launch in the next fiscal year, and Memprex, for which submissions have been made in France— thus procedures are ongoing in France as well as Germany – two markets that will form a base for the future expansion of this product.

Other

From December, our shipping routes were affected by ongoing conflicts in the Red Sea, prompting our transport partners to navigate via the lengthier Cape of Good Hope route, extending lead times by 2-3 weeks and escalating costs, which in turn impacted our margins for this quarter.

The past year posed numerous challenges, including antibiotic shortages, heightened shipping costs, NASDAQ uplisting fees, and dwindling Covid-19 test sales. Despite these hurdles, EQL closed the year with 30% growth, adjusted for non-recurring sales in the comparison period, and an adjusted EBITDA margin of 19%. As we move into 2024/25, our focus will remain on driving growth and enhancing our operational efficiency to improve profit margins.

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 14-05-2024 20:15 CET.