Slide 1: Company presentation
STRICTLY PRIVATE AND CONFIDENTIAL Company presentation January 2025
Slide 2: Agenda
Agenda 1 EQL Pharma in brief 2 Market overview 3 Business overview 4 The Acquisition 5 Financials 6 Appendix 1
Slide 3: EQL Pharma at glance | Leading provider of niche generics
EQL Pharma at glance | Leading provider of niche generics EQL Pharma in brief Geographical presence Founded 2006 in Lund by serial life science entrepreneurs HQ Christer Fåhraeus and Karin Wehlin, EQL Pharma is a fast-growing Swedish pharmaceutical company focused on developing niche generics prim
Slide 4: EQL's history | Proven track record with YoY growth
EQL’s history | Proven track record with YoY growth for 27 consecutive quarters and a remarkable profit development Selected milestones 2006-2014 | 2015-2019 | Market expansion and 2020-2022 | Accelerated growth phase 2023 and future | Building a Foundation strategic initiatives building on the esta
Slide 5: Introduction to niche generics (I/II)
Introduction to niche generics (I/II) | EQL targets a distinct part of the pharmaceutical product life cycle Comments Pharmaceutical Product Life Cycle: The Three Life Periods ▪ The average pharmaceutical product has three life periods throughout its life cycle EARLY MIDDLE LATE ▪ The first stage is
Slide 6: Introduction to niche generics (II/II)
Introduction to niche generics (II/II) | Cost-effective alternative to original formulations after patent expiry The “original” The “generic alternative” Kåvepenin (phenoxymethylpenicillin) by Astra AB Fenoximetylpenicillin by EQL Pharma Name Specific brand name Original chemical name Manufacturing
Slide 7: Business overview | Savvy operating model, asset light
Business overview | Savvy operating model with focus on business development while remaining asset light IDENTIFYING NICHE DEVELOPMENT AND Registration and WAREHOUSING AND TESTING BEFORE EU GENERIC THERAPIES PRODUCTION administration DISTRIBUTION RELEASE ▪ Actively sources ▪ Post sourcing, EQL ▪ EQL
Slide 8: Sustainability | Business model driving sustainability
Sustainability | Business model driving sustainability by delivering affordable and accessible healthcare Selected industry challenges EQL Pharma’s approach to sustainability VISION MISSION CONCEPT The pharmaceutical industry faces several challenges, including excessive pricing, ”Driving force for
Slide 9: Agenda
Agenda 1 EQL Pharma in brief 2 Market overview 3 Business overview 4 The Acquisition 5 Financials 6 Appendix 8
Slide 10: Global pharmaceutical market | Proven resilience with yearly market growth
Global pharmaceutical market | Proven resilience with yearly market growth, regardless of economic conditions Development of the pharmaceutical market and global GDP growth (2001-2023) USDbn / Global GDP growth % Global Financial Euro- Covid-19 Crisis crisis (’20-’21) (’08-’09) (’11-’12) 1,607 1,482
Slide 11: Competitive landscape | EQL has found an attractive sweet spot
Competitive landscape | EQL has found an attractive sweet spot within an otherwise competitive market Illustrative competitive landscape Niche generic market overview General generics Niche generics The pharmaceutical market is wide and extensive with Primarily focuses on generics with Primarily foc
Slide 12: Generics penetration | Opportunities to grow outside the Nordics
Generics penetration | Tangible opportunities to grow outside the Nordics with high generic penetration Market fundamentals Generic penetration per country in Europe2 ▪ In 2023, the global generics market was worth ~USD 465 billion Generic % market share / country Top 5 Country Generics (%) and is e
Slide 13: Market consolidation | Big generics pharma seek to divest off-patent products
Market consolidation | Big generics pharma consistently seek to divest off-patent products not considered “core” Natural divestment and consolidation trend within the global pharmaceutical market ”Closing the divestiture of our OTC business is a significant milestone in the execution of our Research
Slide 14: Agenda
Agenda 1 EQL Pharma in brief 2 Market overview 3 Business overview 4 The Acquisition 5 Financials 6 Appendix 13
Slide 15: Business overview | Diversified offering within three segments
Business overview | Diversified offering within three different segments Combining niche generics with branded differentiated products Net sales % share1 ~70% ~15% ~15% Pharmacy Hospital Branded Procurement systems governed by criteria Substitution systems controlled by price Direct prescription fro
Slide 16: Pharmacy business overview
Pharmacy business overview | Regulated exchange systems allow for significant operational leverage Pharmacy business model overview 1 2 3 4 Tender process Manufacturing Distribution Delivery ▪ Pharmacy products are in the ▪ Pharmaceutical companies ▪ Following this, the ▪ The pharmacies receive the
Slide 17: Hospital business overview
Hospital business overview | Business model built on national procurement processes Hospital business model overview 1 2 3 4 Tender process Manufacturing Distribution Delivery ▪ Hospital products are sold ▪ Once the procurement entity ▪ The procurement entity ▪ The distributor supplies the through a
Slide 18: Branded business overview | Emerging business area
Branded business overview | Emerging business area with a strategic importance Mellozzan® | Melatonin Memprex® | Methenamine Hippurate Geographical presence Mellozzan marketing approval WHAT WHAT Memprex marketing approval ▪ A melatonin-based medication, regulating ▪ A methenamine hippurate-based Bo
Slide 19: Product development (I/III) | Rear-view approach
Product development (I/III) | Taking a “rear-view” approach to product development enables a superior margin profile Illustrative product life cycle and price index development Price (indexed at 100) Traditional generics EQL niche generics Illustrative patent period of original products EQL’s “rear-
Slide 20: Product development (II/III) | Cost efficient organic development
Product development (II/III) | Cost efficient process for organic product development with ~70% success rate Products registered by a bio- EQL Pharma product development | Organic product development waiver is rapid, cost efficient, ~70% success and guarantees quality rate! 1 2 3 4 5 PURCHASE OF STA
Slide 21: Product development (III/III) | Inorganic growth platform
Product development (III/III) | Proven platform to grow in- organically which drastically reduces the time to market M&A drastically reduces time to EQL Pharma product development | In-organic product development market while at the same time diversifies the product dependency 1 2 3 4 5 PURCHASE OF
Slide 22: Product portfolio | Diversified portfolio of established niche generics
Product portfolio | Diversified portfolio of established niche generics with limited revenue concentration Net sales split per product Net sales split per segment Net sales per product (SEKm) Pharmacy Hospital Branded Avg. net sales per product3 8 12% 15% 7 6 6 8% Net sales 15% Net sales 4 Other 55%
Slide 23: Case studies | Golden oldies
Case studies | Golden oldies; EQL targets niche generics, often +30 years off-patent, generating SEK 10-30m p.a. Methenamine Hippurate1 Phenoxymethylpenicillin1 Potassium chloride1 What | Urinary antiseptic used to prevent What | Antibiotic treating various What | Preparation for people with low rec
Slide 24: Capital allocation | Reinvest cash flows with <2 years pay-back
Capital allocation | Ability to reinvest cash flows with <2 years pay-back time from initial launch at a high ROCE EQL’s capital allocation thesis Attractive capital allocation ▪ EQL has consistently demonstrated its ability to identify and capitalise on attractive opportunities to reinvest its capi
Slide 25: Scalability | Significant operational leverage
Scalability | Significant operational leverage with limited need for additional FTEs as the product portfolio grows Scalable business model PF Net sales per FTE (SEKm)1 10 13 18 21 20 EQL Pharma operates a highly scalable business model, maintaining No. of FTEs Net sales per FTE Impact from acquisit
Slide 26: Partner network | Outsourcing and long-term partnerships
Partner network | Rapid and cost-efficient process through outsourcing and long-term partnerships Aligned interests as Cadila remain the largest shareholder Partners to meet high demands from EQL Top partners overview Types of partners CRO 1 CDMO/CMO 2 Year of first Share of total Partner Origin ord
Slide 27: Strategy | Remain innovative and expand geographically
Strategy | Remain innovative within business development and expand EQL geographically EQL’s strategy and roadmap to success Tangible opportunity to grow geographically Continue to develop and invest in the product portfolio ▪ With 35 products currently in its pipeline, EQL is committed to strengthe
Slide 28: Agenda
Agenda 1 EQL Pharma in brief 2 Market overview 3 Business overview 4 The Acquisition 5 Financials 6 Appendix 27
Slide 29: The Acquisition in brief | Strong strategic rationale
The Acquisition in brief | Strong strategic rationale with an attractive financial profile The Acquisition in brief Investment rationale EQL is acquiring four established products from Medilink A/S, a Danish pharmaceutical company founded in 1987, for SEK 185 million1, implying an EV/GP of 5.1x an
Slide 30: Product deep dive | Four products with great strategic fit
Product deep dive | Opportunity to acquire four products with a great strategic fit to EQL Product deep dive Buronil® Marplan® Folimet® Hydromed® Technology Oral dosage Oral dosage Oral dosage Oral dosage Anemia from lack of folic acid Visual & auditory hallucinations, Oedema, swollen legs, high BP,
Slide 31: Financial development | Stable development with accretive margin
Financial development | Stable financial development with a highly accretive margin profile Net sales and gross margin development (SEKm)1 Gross profit to EBITDA bridge (SEKm)2 EBITDA margin (%) Revenue Gross profit Gross margin (%) 36 55% 73% 8 28 71% 71% 69% 51 49 46 43 35 36 Gross profit Opex EBI
Slide 32: Agenda
Agenda 1 EQL Pharma in brief 2 Market overview 3 Business overview 4 The Acquisition 5 Financials 6 Appendix 31
Slide 33: Q3 trading update | Continued strong performance
Q3 trading update | Continued strong performance throughout Q3 Net sales, gross profit and EBIT development Net sales Gross profit Gross margin (%) EBIT EBIT margin (%) Q3 development (SEKm) YTD Q3 development (SEKm) LTM Q3 development (SEKm) EBITDA margin was 19% 47% 13% 42% 16% (16%) YTD1 +41% 45%
Slide 34: Net sales development (I/II)
Net sales development (I/II) | Strong revenue development driven by successful new product launches EQL Pharma operates on a fiscal year that runs from April 1 to March 31 Revenue development (SEKm) Comments Revenue Non-recurring revenue Acquired revenue2 ▪ EQL has since FY 21/22 managed to grow net
Slide 35: Net sales development (II/II)
Net sales development (II/II) | Strong momentum with 40% forecasted net sales growth the full year FY 24/25 Quarterly net sales development FY 18/19 – Q3 FY 24/25 (SEKm)1,2 EQL Pharma operates on a fiscal year that runs from April 1 to March 31 92 85 83 78 70 60 56 56 54 51 43 35 36 32 33 24 26 22 2
Slide 36: Cost base and profitability | Significant operational leverage
Cost base and profitability | Significant operational leverage driven by a scalable business model and cost efficiency D&A included in COGS COGS and gross margin (SEKm) SG&A, R&D and other costs (SEKm) Adjusted EBITDA (SEKm)1 Adj. COGS1 Acquired COGS Adj. GM (%) Adj. SG&A2,3 R&D Acquired SG&A Adj. E
Slide 37: Cash flow | Proven capex strategy
Cash flow | Proven capex strategy with low maintenance capex providing a strong underlying cash conversion Delta NWC (SEKm)1,2 Capex (SEKm)1 Simplified cash flow (SEKm)3 Delta NWC Growth capex M&A capex PF. Adj. EBITDA Growth capex Maintenance capex Maintenance capex Cash conversion Cash conversion
Slide 38: Net Working Capital overview
Net Working Capital overview | Increase in NWC driven the by strong growth and committed inventory strategy Net working capital development (SEKm)1 Comments Inventory Accounts receivable Accounts payable NWC (RHS) ▪ The increase in NWC is primarily driven by EQL's 350 190 strong growth trajectory an
Slide 39: Financial Targets | On track to deliver on the business plan
Financial Targets | On track to deliver on the business plan New financials target to be communicated during H1 2025 Target net sales growth Target profitability Current year net sales outlook 40% Net sales CAGR FY 20/21 - FY 25% EBITDA margin by the end of the ~40% Net sales growth for the full yea
Slide 40: Agenda
Agenda 1 EQL Pharma in brief 2 Market overview 3 Business overview 4 The Acquisition 5 Financials 6 Appendix 39
Slide 41: Financial statement | Reported income statement
Financial statement | Reported income statement KSEK FY 21/22 FY 22/23 FY 23/24 LTM Q3 24/25 Net sales 409,753 259,913 264,168 338,394 Expenses for sold goods -314,019 -144,063 -149,123 -197,497 Gross profit 95,734 115,850 115,045 140,897 Sales expenses -37,275 -44,641 -48,976 -55,850 Administration
Slide 42: Financial statement | Reported balance sheet
Financial statement | Reported balance sheet KSEK FY 21/22 FY 22/23 FY 23/24 Q3 FY 24/25 ASSETS Capitalised expenditure 11,830 12,780 24,235 33,265 Licensed and development products 98,413 102,539 149,235 164,711 Total intangible fixed assets 110,243 115,319 173,309 197,975 Tangible fixed assets Bui
Slide 43: Financial statement | Reported cash flow statement
Financial statement | Reported cash flow statement KSEK FY 21/22 FY 22/23 FY 23/24 YTD FY 24/25 Operating activities Result before taxes 35,965 41,339 32,615 44,397 Adjustment for items not included in the cash flow 10,266 16,401 2,921 6,910 Interest paid -2,779 -2,293 -4,011 -6,563 Tax 0 0 0 0 Cash
Slide 44: Management and Board of Directors
Management and Board of Directors | Proven management team backed by an experienced Board of Directors Management Board of Directors Axel Schörling Carl Lindgren Anna Jönsson Christer Fåhraeus Anders Månsson Per Ollermark Chief Executive Chief Business Chief Financial Co-founder and Board member Boa
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