HUDDINGE, Sweden, Feb. 19, 2020 /PRNewswire/ -- OCTOBER - DECEMBER
- Net sales amounted to MSEK 649.3 (463.3). This corresponds to an increase of 40% for the period. The organic growth during the fourth quarter was -4 %, currency impact 2 % and 42 % refers to the acquisition of Trimb.
- Adjusted EBITDA* amounted to MSEK 151.4 (165.4) excluding non-recurring items, costs related to the acquisition of Trimb and restructuring costs totalling MSEK 43.7 (0.0).
- The gross margin was 46.8% (55.7%) for the period. The period has been affected by a change in product mix and non-recurring items.
- Cash flow from operating activities amounted to MSEK -10.8 (28.2). The negative cash flow has been affected by non-recurring restructuring costs.
- Earnings per share was SEK -0.11 (0.17) before and after dilution.
- During the period, the product Hydrokortison Trimb with all related rights and assets, was divested
- At the end of the period, cash and cash equivalents and other current investments amounted to MSEK 248.8 (398.6 at December 31, 2018) and net debt to MSEK 4 100.
JANUARY - DECEMBER
- Net sales amounted to MSEK 1 901.2 (1 615.1). This corresponds to an increase of 18 % for the period. Organic growth for the year was -2 %, currency 2 % and the acquisitions of the LEO portfolio in April 2018 and of Trimb in September 2019 stands for the remaining 18 %.
- Adjusted EBITDA* amounted to MSEK 599.1 (632.2) excluding non-recurring items, costs related to the acquisition of Trimb and restructuring costs totalling MSEK 107.2 for 2019 (0.0). In the second quarter of 2018, the company also received non-recurring revenue of MSEK 86.6 in the form of milestone payment.
- The gross margin was 51.8% (58.1%). During the second quarter of 2018, the company received non-recurring revenue of MSEK 86.6. Excluding non-recurring revenue, the adjusted gross margin in 2018 was 55.8%
- Cash flow from operating activities amounted to MSEK 106.8 (318.0).
- Earnings per share was SEK 0.05 (4.63) before and after dilution. Earnings per share in 2019 was adversely affected by non-recurring items (MSEK 107.2) and 2018 was positively affected by non-recurring revenue (MSEK 86.6).
- The acquisition of all shares in Trimb Holding AB, which was announced on June 21, 2019, was completed on September 12 and the Trimb Group has been consolidated as of September 12, 2019
- On September 24, based on the authorization from the Extraordinary General Meeting on September 20, Karo Pharma decided to carry out a rights issue amounting to MSEK 2 003.
*Alternative Financial Ratios (APM), see page 6 for further information.
COMMENT BY CEO CHRISTOFFER LORENZEN
During the fourth quarter of 2019, the company declined organically with 4 % but grew in total with 40 % compared to previous year driven by the acquisition of Trimb and positive currency effect.
On December 23, we announced the acquisition of a new product portfolio for Intimate Care and Dermatology from the Danish pharmaceutical company Leo Pharma for EUR 90 million. Leo Pharma estimates sales for the full year 2019 at EUR 35 million. All products in the portfolio are well-established in the market and are characterized by stable sales and profitability. From a strategic perspective, the acquisition will strengthen Karo Pharma's European presence and facilitate market expansion in Germany, Switzerland and Austria.
The integration of Trimb is proceeding according to plan. We are building a stable and scalable platform, which will enable future growth in our new sales companies. As expected, integration and expansion into several European markets have required energy, focus and investment, but the organization is now in place, including the teams that will run the business in 2020.
We have a commercial focus and focus primarily on sales and marketing of both prescription and non-prescription drugs as well as self-care products sold in pharmacies and in retail outlets. today, we own around 100 brands that are sold through these channels and as we grow, an important part of our work is to continually assess if we are the best owner of different parts of the portfolio. To that effect, we have decided to evaluate opportunities in the business area Hospital Supply, including a divestment scenario but also acquisitions or unchanged operations. The business area had sales of SEK 118 million in 2019. We expect to conclude the process over the next six months.
Sales increased by 40 percent in the quarter and by 18 percent for the full year. As previously mentioned, the Trimb Group was consolidated from September 12, contributing to sales growth during the fourth quarter. Earnings for the quarter was negatively impacted by a lower gross margin, stemming from an unfavorable product mix and one-off costs related to the acquisition of Trimb.
CEO Christoffer Lorenzen
SIGNIFICANT EVENTS AFTER PERIOD END
Karo Pharma has been informed by Pfizer Inc. that it has decided to terminate the Research Collaboration and the License Agreement that the parties signed in December, 2011. After this collaboration has been concluded, there will be no active cooperation agreement between the parties. This information follows Pfizer's previous decision to terminate the specific development project PF-06763809, which Karo Pharma informed about in press releases published on November 5 and 20, 2019. The termination of the cooperation agreement has no impact on ongoing operations or the company's future prospects.
A strategic review is currently underway regarding the company's various business areas, including an internal restructuring aimed at clarifying the various business areas and streamlining their operations - ia the business area Hospital Supply, which will be streamlined. There are ongoing evaluations of various strategic alternatives around the company and its business areas, which may involve both acquisitions and divestments of one or more business segments (the evaluations may also result in operations remaining unchanged).
Interim report Jan-Mar 2020 April 29, 2020
Interim report Jan-June 2020 July 21, 2020
Interim report Jan-Sept 2020 Oct 30, 2020
The annual report for 2019 is planned to be published in week 14, 2020 and the Annual General Meeting takes place on April 29, 2020 at Näringslivets Hus in Stockholm.
About Karo Pharma
Karo Pharma is a pharmaceutical company specializing in the sale and marketing of both prescription and non-prescription drugs as well as self-care products sold in pharmacies and retail. Karo Pharma is listed on the Nasdaq Stockholm Stock Exchange's 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 19, 2020 at 8.00 a.m. CET.
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SOURCE Karo Pharma