HUDDINGE, Sweden, July 21, 2020
HUDDINGE, Sweden, July 21, 2020 /PRNewswire/ --
Q2, April - June
Summary of half-year result, January - June
* Alternative Financial Ratios (APM), note 4 for further information.
Comments by CEO Christoffer Lorenzen
Karo Pharma realized growth of 78% in Q2. The growth was driven by the acquisitions completed over the last 12 months: Trimb (September 2019), Proct® brand portfolio (March 2020) and the Pevaryl® brand portfolio (April 2020). Karo Pharma generated organic growth of 7% during H1 2020.
The Q2 performance was negatively impacted by the COVID-19 pandemic. As anticipated, and as communicated in the Q1 financial report, Q1 was positively impacted by a one-off build-up of inventories across the supply chain at the wholesaler, pharmacy, and consumer level. The Q1 build-up was partially rebalanced in Q2, particularly in the pain, cough & cold category and in the specialty Rx category. We expect to see further rebalancing in H2, but to a lesser extent than during Q2. Further normalization of inventories will of course depend on the development of COVID-19 across geographies.
Karo Pharma's business continues to prove robust and resilient despite the difficult market environment. In collaboration with our partners across contract manufacturing, logistics and distribution, we have been able to address the challenges as they have emerged. The supply chain has only been affected by minor disruption and thanks to a close dialogue with our suppliers, we have kept delivery performance at acceptable levels, in line with targets.
We continue to execute in accordance with our long-term strategy and vision for the business. In the beginning of Q2 we announced the acquisition of the remaining European rights to the Pevaryl® brand portfolio from Johnson & Johnson. The acquisition confirms our commitment to M&A driven growth and business building. The transaction was 100% debt financed by our partner banks, Swedbank, SEB and DNB NOR.
The Pevaryl® brand portfolio adds approximately 20 MEUR of sales to our business, consolidates European ownership of the Pevaryl® brand with Karo Pharma and expands Karo Pharma's European reach outside of the Nordic region, in particular in Italy. Additionally, the acquisition adds critical mass in two focus categories, intimate health, and foot care.
We are also continuing to streamline and optimize our business. The explorations of strategic alternatives for the Hospital Supply business, Swereco AB, which were previously announced are progressing to plan and we expect to conclude that evaluation during H2. Post transaction our business will be more streamlined and focused. We are also taking steps on a product portfolio level to optimize. In early July we divested three smaller brands - Suscard® , Digoxin® and Egazil® to Evolan AB. The brands generated 13 MSEK in revenues in 2019 and are not material to our results, but we believe the brands have found a better owner.
Christoffer Lorenzen , CEO
Significant events after period end
July 1, 2020 Karo Pharma divested the three brands Digoxin, Egazil and Suscard to Evolan due to production challenges. From both a patient as well as a society perspective it is better to divest than to prune these products. The total turnover of the three brands 2019 was 13 MSEK.
The interim report has not been the subject to auditors' review.
Interim report Jan-Sep 2020
Oct 30, 2020
Year-end report 2020
Feb 18, 2021
The Annual Report 2019 was released April 1, 2020 and the Annual General Meeting was held May 25, 2020 at Näringslivets Hus, Stockholm.
For further information, please contact
+46 73-501 76 20
+46 73-507 88 61
About Karo Pharma
Karo Pharma offers "Smart choices for everyday healthcare". We own and commercialize reliable original brands within prescription drugs and over over-the-counter consumer products. Our products are available in over 60 countries with the core in Europe and the Nordics region. The headquarter of Karo Pharma is in Stockholm and the company is listed on Nasdaq Stockholm, Mid Cap.
This information is information that Karo Pharma AB 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 July 21, 2020 at 08.00 CET.
This information was brought to you by Cision http://news.cision.com
The following files are available for download:
INTERIM REPORT JANUARY â€" JUNE 2020 (PDF)