Interim report Q1 2021

HUDDINGE, Sweden, April 21, 2021 /PRNewswire/ -- January – March

• Revenues amounted to MSEK 713.0 (793.6), corresponding to a decrease of -10% for the period.
•  Revenues amounted to MSEK 713.0 ( 793.6), corresponding to a decrease of -10% for the period.
• The organic growth* during the first quarter was -16%. The currency impact in the quarter was -1% while the acquisitions of the product portfolios Proct from Leo Pharma and Pevaryl from Johnson & Johnson generated growth of +7%.
• EBIT (Operating Profit) amounted to MSEK 128.1 (104.1), corresponding to growth of 23%.
• EBITDA* amounted to MSEK 259.8 (209.3) corresponding to growth of 24%.
• The gross margin, defined as gross profit divided by revenues, was 60.9% (53.9%) for the quarter. The margin was affected positively by the acquired product portfolios, the divested Hospital Supply business and by realized synergies in production and distribution of products.
• Cash flow from operating activities amounted to MSEK 34.2 (-9.8).
• Earnings per share was SEK 0.24 (0.39), before and after dilution.

* Alternative Performance Measures (APM), note 4 for further information.

Comments by CEO Christoffer Lorenzen

Karo Pharma realized a negative revenue growth of 10% during the first quarter of 2021. The organic growth was down 16% but the acquired Proct and Pevaryl businesses contributed positively by 7%. Currencies accounted for -1%. The negative organic growth is explained primarily by challenging comparable financials: In March 2020 Karo saw a sales spike as consumers stockpiled, and wholesalers and pharmacies increased inventories in connection with the COVID-19 outbreak in Europe. A secondary for the negative growth was the divestment of the Hospital Supply business at the end of the year 2020.

In terms of brand categories, Karo saw increases in the categories positively impacted by M&A, such as intimate care (+24%) and foot care (+54%). The dermatology category (+26%) was also impacted by M&A, but has also seen positive impact from COVID-19 induced changes to consumer behaviors (in this case, particularly the increased use in products to address dry hands and skin). Conversely, we see declines in the pain, cough & cold category as common cold and flu has seen very low prevalence and as this was the category with the highest impact from inventory build-up in Q1 2020. We also see decline in the 'other' category explained by the previously mentioned divestment of the Hospital Supply business.