INTERIM REPORT JANUARY– SEPTEMBER 2018
THE PERIOD AND THE THIRD QUARTER
o EQT VIII has announced a public offer for all shares in Karo Pharma AB at SEK 36.90 per share. The Board of Directors is unanimously positive towards the offer and recommends the shareholders to accept the offer.
o Net sales amounted to MSEK 1,151.8 (418.9), of which the third quarter amounted to MSEK 395.3 (137.1). This corresponds to an increase dur-ing the period of 175%, and in the third quarter of 188%. Growth was mainly driven by acquired products.
o Organic growth during the period was +4.5%, and during the third quarter +1.1%. For the period, pharmaceuticals accounted for +5.6% of growth.
o EBITDA for the nine month period amounted to MSEK 466.8 (127.5), of which the third quarter was MSEK 145.8 (34.0), representing a mar-gin of 40.5% (30.4%) for the period and 36.9% (24.8%) for the third quarter. EBITDA increased by 266% during the period compared with the corresponding period last year.
o Gross margin for the nine month period was 59.1% (53.8%), and for the third quarter 55.8% (47.6%). Excluding milestone payments in the second quarter of 2018, gross margin during the period was 55.8%.
o Cash flow from operating activities during the nine month period amounted to MSEK 289.9 (62.3), of which the third quarter was MSEK 153.2 (-16.2)
o Earnings per share amounted to SEK 4.69 (0.62), of which the third quarter was SEK 0.34 (0.15)
o Cash and cash equivalents and other short-term investments at the end of the period amounted to MSEK 443.1 (130.4)
o During the period June 18, 2018 until July 27, 2018, the Company re-purchased 2,464,990 Karo Pharma shares within the agreed repur-chasing program. The repurchasing program is thus implemented and finalized.
We present yet another very strong quarter for Karo Pharma.
In a separate press release, EQT VIII has announced a public offer for all Karo Pharma AB shares at 36.90 kronor per share. The Board of Directors are unanimous-ly positive towards the public offer and recommends shareholders to accept the offer.
Karo Pharma represents a unique platform but needs to be established in further markets to develop in the best possible way. EQT has unique knowledge and financial strength to further develop the company in a positive way. For the company’s employees, it is positive to form a new strong team based on Karo Pharma, with EQT.
Sales almost tripled and operating profit more than quadrupled during the quarter. The quarter was positive-ly affected by acquired products.
COMMENT ON OPERATIONS
The integration of the acquired products goes entirely according to plan and provides the company a platform for continued expansion.
Viruseptin®, our new product for the treatment of cold and flu, will be launched in the fourth quarter. Slicks® and Zippy® are subject to increased marketing efforts.
The pain medication Dolerin® (the combination of para-cetamol and ibuprofen) will be delayed for a few months due to a replacement of contract manufacturers. Launch is now scheduled to take place in the first quarter of 2019.
The organization has been strengthened in the areas of marketing and regulatory affairs.
Synergies between acquired units are being realized. Through production agreements, we estimate to achieve cost savings of MSEK 60-80 annually to come into full ef-fect in three years. The effort to streamline our produc-tion continues.
EBITDA and operating cash flow are improving according to plan.
Fundamentals in the company look increasingly better. For the full year 2018, we expect to achieve sales in the range of MSEK 1,600 – 1,650 and an EBITDA in the range of MSEK 625 – 650.
Anders Lönner
Executive Chairman
FOR FURTHER INFORMATION, PLEASE CONTACT
Anders Lönner, Chairman of the Board. 010-330 23 10
Mats-Olof Wallin, CFO, 076-002 60 10 eller mats-olof.wallin@karopharma.se
ABOUT KARO PHARMA
Karo Pharma is a specialty pharma company that develops and markets products to pharmacies and directly to healthcare providers. The share is listed on Nasdaq Stockholm in the Mid Cap segment.
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 29 October 2018 at 8.00 a.m. CET.