EQL Pharma

CEO's comments

The fourth quarter, which concludes the financial year 2022/23, was an exciting quarter for EQL Pharma. Sales were higher than expected, which means that we grew our sales adjusted for non-recurring items by as much as 51% compared to the financial year 2021/22. The operating margin for the quarter was slightly lower than expected, mainly driven by the product mix, but for the year as a whole both operating profit and operating margin grew in a very positive way. Our sales forecast for the coming financial year, 2023/24, is a growth of around 30%.

Fourth quarter in summary

The fourth quarter's total sales in 2022/23 amounted to SEK 60.3 (203.0) million. Adjusted for non-recurring sales, sales amounted to SEK 53.5 (36.1) million, an increase of 48%. Operating profit (EBIT) amounted to SEK 6.1 (11.9) million. The operating margin was 10% (6%). Both operating profit and margin were slightly lower than in the previous quarters of 2022/23, which is due to a slightly less favorable product mix and higher operating expenses. The latter is primarily linked to the ongoing strategic initiatives but also contains certain one-off components.

Financial goals and full-year forecast

Our long-term financial goals are in principle fixed, but we adjust the profitability goal from an EBIT margin of 25% to an EBITDA margin of 25%. We believe that EBITDA is a better measure of our operational profitability and more aligned to reflect profitability contributions from potential future acquisitions.

The sales forecast for the coming financial year 2023/24 is a growth of around 30%. We note that in 2022/23 we grew more than the 40% we aim to grow on average from 2020/21 through 2024/25.

Strategic focus of EQL

• Launch 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)

Products and market

On the business development side, four new niche generics for the Nordics have been added to our pipeline, which thus grows from 28 to 32 products. We are working intensively to identify new products for our pipeline and will regularly update on progress.

Sales of self-tests for Covid-19 have been significantly lower in the fourth quarter than in the third. EQL is and will remain well positioned if demand for testing picks up.

Other

During the fourth quarter, we had the pleasure of being able to recruit and present Carl Lindgren as our new Chief Business Development Officer. In connection with that, our current Business Development Director Alexander Brising moves to the role of Chief Commercial Officer. These adjustments mark a further focus on growth and sales which is completely natural in the phase EQL is now in.