H. Lundbeck (LUN) Q3 2024 earnings summary

Executive summary

• Revenue grew 13% year-over-year to DKK 16.5 billion in the first nine months of 2024, driven by 21% growth in strategic brands, now 74% of total revenue.

• Adjusted EBITDA increased 12% to DKK 5.2 billion with a margin of 31.6%, slightly down due to higher costs and R&D investments.

• Net profit rose 18% to DKK 2.6 billion; adjusted net profit and EPS up 8% to DKK 3.9 billion and DKK 3.94.

• The company raised the lower end of its full-year 2024 guidance, reflecting confidence in continued performance and the expected Longboard acquisition.

• Strong cash flow led to a net cash position of DKK 4.0 billion, with net debt/EBITDA below zero.

Financial highlights

• Adjusted gross margin was 88.5%, down 0.8pp due to higher raw material costs, but in line with guidance.

• EBIT increased 12% at constant FX to DKK 3,093 million, with margin at 18.8%.

• Free cash flow reached DKK 4.13 billion, up 49% year-over-year.

• R&D expenses increased 36% due to pipeline progression and a DKK 547 million MAGLI impairment.

• Effective tax rate dropped to 16% from 23.5% due to reversal of a prior uncertain tax position.

Outlook and guidance

• 2024 revenue growth guidance raised to 12–14% at constant FX, with adjusted EBITDA growth at 17–20%.

• Adjusted gross margin guided at 88–89%; R&D costs expected at DKK 4.4–4.6 billion, reflecting a DKK 547 million MAGLI impairment.

• Net cash position projected to shift to net debt of DKK 12–13 billion due to the Longboard acquisition.

• Effective tax rate guided at 13–15%.

• Mid-term targets updated: revenue CAGR mid-single digit through 2027, adjusted EBITDA margin above 30%.