Karo's business developed strongly in Q4, and we continue to develop the company in line with our long-term vision and transformation plan.
On the financial side, Karo saw continued positive sales momentum in Q4, following the positive development in Q3. The business grew by 9% organic growth, or 6% when adjusting for currency effect (1%) and the divestment of a portfolio of smaller Swedish brands on
The gross margin improved to 57% (was 49% in the same period last year), positively impacted by a changed product mix from acquisitions/divestments as well as delivery of tech transfer project that reduce our costs of goods.
EBITDA declined by 16% in the quarter, which was driven by two key elements: First, a step-up in investments in A&P and our commercial organization to drive future organic growth, particularly in the digital arena, which is in line with the messages from previous financial announcements. Second, transaction fees and costs related to acquisitions of
The operational cash flow was strong in the quarter and grew 148% compared to the year prior. This illustrates that the negative earnings recorded in the period were driven by non-cash items, such as amortization of product rights that reflect Karo's M&A activities. It also illustrates that we have made substantial improvements on our net working capital management that positively impacted the quarter.
In terms of the long-term transformation plan, Karo announced two important acquisitions in Q4 that strengthen Karo's commercial footprint and capabilities and add to our scale:
The
The E45 brand acquisition adds approx. MEUR 50 in sales as well as critical mass to our
The priorities for 2022 are clear. We will be driving organic growth, integrating the acquired businesses and invest further into our brands, notably in the fields of digital and e-commerce. We shall also be optimizing our operations and looking for efficiencies across our business to free up investments and capacity that can fuel our growth. We are pleased to embark on this journey with a team of now 330 Karo'ites that constitute a diverse, resourceful, and highly engaged team.
CEO
Financial calendar
Annual Report 2021 Week 14, 2022
Interim report January-March
May, 2022
Annual General Meeting
Interim report January-June
Interim report January-September
Subject to change pending change of listing from Nasdaq Stockholm to Nasdaq First North as announced in press release
Q4, October - December
Revenues amounted to MSEK 762.0 (721.2), corresponding to an increase of +6% for the period.
The organic growth1 during the fourth quarter was +9%. The currency impact in the quarter was 1% while the acquisitions adjusted for the divestments generated a net effect of -5%.
EBIT (Operating Profit) amounted to MSEK -52.7 (-16.1), corresponding to a decrease of 228%.
EBITDA1 (Operating Profit after depreciation and amortization) amounted to MSEK 96.9 (114.7) corresponding to a decrease of 16%.
The gross margin1, defined as gross profit divided by revenues, was 57.0% (49.3%). The margin was affected positively by product mix in the quarter.
Cash flow from operating activities amounted to MSEK 260.2 (104.8).
Earnings per share was
1 Alternative Performance Measures (APM), see page 21 for further information.
Summary, January - December
Revenues amounted to MSEK 2,961.4 (2,882.9), corresponding to an increase of 3% for the period.
The organic growth1 during the year was +3%. The currency impact was -0% while the acquisitions adjusted for the divestments generated a net effect of -0%.
EBIT (Operating Profit) amounted to MSEK 205.9 (230.3), corresponding to a decrease of 11%.
EBITDA1(Operating Profit after depreciation and amortization) amounted to MSEK 771.8 (725.0) corresponding to growth of 6%.
The gross margin1, defined as gross profit divided by revenues, was 57.6% (55.3%) for the year. 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 532.6 (329.2).
Earnings per share was
The Board of Directors proposes that no dividend is to be paid for 2021.
1 Alternative Performance Measures (APM), see page 21 for further information.
Contact:
CEO
T: +46 73-501 76 20
E: christoffer.lorenzen@karopharma.com
CFO
T: +46 73-507 88 61
E: jon.johnsson@karopharma.com
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