Karo Pharma publishes third-quarter report 2020 and resolves on sale of own shares

Karo Pharma publishes third-quarter report 2020 and resolves on sale of own shares

PR Newswire

HUDDINGE, Sweden, Oct. 30, 2020

HUDDINGE, Sweden, Oct. 30, 2020 /PRNewswire/ --

Q3, July - September             

Summary of result, January - September           

* Alternative Financial Ratios (APM), note 4 for further information.

Comments by CEO Christoffer Lorenzen

Karo Pharma realized net sales growth of 53% in Q3 compared to the same quarter previous year. The growth was driven by the Proct® portfolio (March 2020) and the Pevaryl® portfolio (April 2020). Trimb (September 2019) also contributed to growth, however, reached its one-year anniversary and its impact on absolute growth therefore declined compared to previous years. During the first nine months of the year, Karo Pharma generate net sales growth of 73%. Looking exclusively at organic growth (i.e. business that Karo owned 12 months ago), this amounted to -10% in Q3 and 0% in the first nine months of the year.

Our business continues to be impacted by the COVID-19 pandemic. Thus, the Q3 performance saw a continuation of the pattern from Q2 where Karo's net sales were suppressed by a rebalancing and normalization of inventories in the pharmacy chains, notably in Scandinavia. We expect that the rebalancing is now completed, but still expect the pandemic to have a net negative effect on net sales and growth. While certain Karo Pharma categories and brands benefit from COVID-19, a larger proportion of brands suffer (e.g. because of lower traffic in the pharmacies, fewer visits to doctors, or lowered infection rates (other than COVID-19) in societies.

Karo Pharma's business operations continues to prove robust and resilient despite the difficult market environment. Performance across the supply chain is solid and we are strengthening the dialogue and interaction with key our key supply chain partners. We are progressing tech transfer projects related to our acquisitions and are also running gross margin improvement programs across the entire portfolio. As a combined result of these activities and mix effects, we are seeing improvements in gross margins.

We continue to monitor the market developments closely and have contingency plans in place to reduce costs if the markets deteriorate as result of the COVID-19 second wave and if our net sales come under further pressure. The COVID-19 pandemic does not imply any changes to the strategy or long-term ambitions of Karo. We will continue to pursue a dual strategy of developing and optimizing our existing portfolio of brands and markets and add on value-adding acquisitions that generate scale and are synergistic to our existing business.

In 2020, we have invested into the business and what we label the scalable platform. This includes our systems landscape as well as personnel in key functions. These investments will help us drive the business more effectively in the long-term. We have also invested into the integration of our acquisitions. The Trimb integration is now almost complete and our focus turns to the integration of the Proct® and Pevaryl® portfolios.

In Q3 we saw an increase in our adjusted EBITDA of 23% and for the first nine months of 38%. As a result of our scalable platform investments the EBITDA margins declined, however, we expect to see improvements from the efficiency gains that our platform investments will generate going forward.

Christoffer Lorenzen, CEO

Significant events after period end

Nothing to report

Financial Calendar

Year-end report 2020                   


Feb 18, 2021


For further information, please contact

Christoffer Lorenzen, CEO, +46 73-501 76 20, christoffer.lorenzen@karopharma.com  
Jon Johnsson, CFO, +46 73-507 88 61, jon.johnsson@karopharma.com

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 October 30, 2020 at 08.00 CET.

This information was brought to you by Cision http://news.cision.com


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