EQL Pharma (EQL) investor relations material

Executive summary

• Achieved record quarterly sales of nearly SEK 190 million, a 29% year-over-year increase, rebounding from Q2 stock-outs and inventory issues.

• Gross margin improved to 42%, and EBITA/EBITDA margin reached 21%, both recovering from previous lows but still below long-term targets.

• Supply chain issues persisted but are being addressed, with key products and new launches contributing to results.

• Operational focus is shifting from aggressive growth to profitability and cost optimization, with process upgrades and ERP implementation underway.

• Two new management team members, including CCO, CFO, and CSO, were recruited to enhance international and financial capabilities.

Financial highlights

• Sales grew 29% year-over-year to nearly SEK 190 million in Q3, setting a new quarterly record.

• Gross margin rose to 42%, aided by high-margin product sales and improved supply.

• EBITA/EBITDA margin was 21% in Q3, up from Q2 but below the 25% target.

• Pipeline investments were nearly SEK 12 million in Q3, similar to last year.

• Cash and cash equivalents at period end: SEK 72.7 million, up from SEK 15.6 million year-over-year.

Outlook and guidance

• Full-year sales growth outlook remains at 15%, with EBITA/EBITDA margin guidance around 20%.

• Q4 expected to be strong in absolute terms, but year-over-year comparison is challenging due to a strong prior-year quarter.

• Multiple major product launches planned for next year, including Memprex in France and Germany.

• Some scrapping of Covid-19 tests expected to negatively impact Q4 margins by 2–4 percentage points.

• Long-term goals: average annual sales growth of 30% and EBITDA margin above 25% by end of five-year plan.