HUDDINGE, Sweden, Feb. 14, 2019FULL YEAR AND THE FOURTH QUARTER
- Net sales amounted to MSEK 1,615.1 (657.6), of which the fourth quarter amounted to MSEK 463.3 (238.7). This corresponds to an increase of 146% for the full year, and 94% for the fourth quarter. A large part of the growth is attributable to products acquired during the period.
- Organic growth was + 7.0% (proforma) for the period, and for the fourth quarter + 5.4%. Pharmaceutical drugs accounted for an organic growth of +3.2% for the period, and +5.8% for the fourth quarter.
- EBITDA amounted to MSEK 632.2 (169.3), of which the fourth quarter was MSEK 165.4 (41.8), corresponding to a margin of 39.1% (25.7%) for 2018 and 35.7% (17.5%) for the fourth quarter. EBITDA increased by 273% during the period compared with the previous year. (The numbers for 2017 refer to adjusted EBITDA).
- The gross margin during the period was 58.1% (52.0%), and 55.8% (48.8%) in the quarter. Excluding milestone payments in the second quarter of 2018 and 2017, the gross margin was 55.8% for the period (50.7%).
- Cash flow from operating activities during the period amounted to MSEK 309.5 (33.5), of which the fourth quarter amounted to MSEK 19.6 (-28.8). During the fourth quarter, inventory from Leo was taken over.
- Earnings per share were SEK 4.63 (0.17), of which the fourth quarter was SEK 0.17 (-0.42)
- Cash and cash equivalents and other short-term investments amounted to MSEK 398.6 (838.6) at the end of the period.
- During the period June 18, 2018 until July 27, 2018, the Company repurchased 2,464,990 Karo Pharma shares within the agreed repurchasing program. The repurchasing program is thus implemented and finalized.
IMPORTANT EVENTS AFTER PERIOD END
- On October 29, 2018, EQT VIII through its wholly owned subsidiary Karo Intressenter AB submitted a recommended public offer to the shareholders of Karo Pharma to transfer all shares in Karo Pharma to Karo Intressenter for a cash consideration of SEK 36.90 per Karo Pharma share. The acceptance period in the offer initially expired on December 10, 2018 and was extended on December 13, 2018 until January 4, 2019.
- On January 2, 2019, Karo Intressenter announced that it raised the consideration in the offer to SEK 38.00 in cash for each share in Karo Pharma, and extended the acceptance period until 17.00 CET January 17, 2019, and that the condition regarding obtaining required regulatory permits, approvals, decisions or similar had been fulfilled. The offer was later extended to February 12.
- In light of the changes in ownership that have taken place, notice has been sent to an Extraordinary General Meeting of Karo Pharma AB on February 14, 2019. The Meeting is to resolve on the election of a new Board of Directors, number of Board members and Board renumeration.
- On February 11, Karo Intressenter presented its proposal to the meeting on February 14, as regards, among other things, the election of a new Board of Directors. (See separate press release per February 11).
AUDIOCAST TODAY AT 11.00 A.M. CET
A presentation of the report (in Swedish) will take place today at 11 a.m. The presentation can be attended through the corporate website www.karopharma.se or by telephone +46 8 505 564 74. Questions may be submitted over the internet or by the telephone.
LETTER FROM THE CEO
We follow our plan and the fourth quarter provided strong growth, increased profits and improved margins. In the report for the third quarter, we forecasted sales and EBITDA for the full year. The outcome was within the indicated intervals.
During the year, the business developed positively with almost tripled sales and profit. Sales increased 146% and EBITDA by 273%. The organic growth of 7.0% (proforma) is gratifying for a year with a strong focus on integration. We have worked intensively to first fully integrate Weifa into our business and now we have a very strong organization and profitability development in Norway. On March 1, the acquisition of the LEO portfolio was announced, and the products were taken over on April 4, where ten well-established pharmaceuticals with strong brands were acquired. The products are characterized by stable sales and profitability and have improved the company's total gross margin by 5.6%. Through the acquisition of the LEO portfolio, we were also able to report a significant tax revenue by recording a value on our previous tax loss carry-forwards in the balance sheet.
In 2018, we have succeeded in significantly expanding Karo Pharma's portfolio of interesting products. Karo Pharma has established distribution in many new markets in Europe and the rest of the world. The acquisition of the LEO portfolio complements our product portfolio and geography well.
Our new product Viruseptin® for the treatment of colds and flu-like symptoms was successfully launched during the fourth quarter in Sweden. We have gained market share as well as created growth in the cold category at pharmacy chains. In 2019, Viruseptin® will launch in other Nordic markets.
We enter the new year with products that will be launched in the Nordic market. An example of this is Dolerin®, which is a combination of paracetamol and ibuprofen for the treatment of severe pain. The drug is medically approved in all Nordic markets and will be launched in 2019
2018 was also a year of great sorrow. In December, we received the tragic message that the company's chairman, Anders Lönner, had died. Anders spirit, who has greatly contributed to Karo Pharma's change and success in the last four years, will continue to "aim higher than you think is possible to reach, work harder, more efficient and without bureaucracy, and success will come". Together with the organization, I will do everything possible to maintain and implement Anders' winning business ideas.
Today, Karo Pharma is an attractive Specialty Pharma company with well-established brands and an interesting pipeline of new products. We see opportunities to continue our business consolidation and reap synergies that improve our profitability and growth, and combining it with making interesting acquisitions in a controlled manner.
Lastly, I would like to thank all employees for truly good work efforts.
We are looking forward, towards new exciting challenges, our priorities are continued expansion with good profitability.
FOR FURTHER INFORMATION, PLEASE CONTACT
Peter Blom, CEO +46-70-655-56-98, email@example.com
Mats-Olof Wallin, CFO +46-760-026-010, firstname.lastname@example.org
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 February 14, 2019 at 8.30 a.m. CET.
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