Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Alk-Abello AS (AKBLF, Financial) reported an 18% organic revenue growth across regions and product lines in Q3.
- The company successfully increased its EBIT margin by 10 percentage points year-on-year, from 13% to 23%.
- Sales of the adrenaline auto-injector, JEXT, more than doubled, recovering from last year's supply shortages.
- The implementation of the Energy Plus strategy is progressing well, with new initiatives in the allergy space.
- Alk-Abello AS (AKBLF) confirmed its full-year outlook, expecting 14-16% top-line growth and an EBIT margin of 19-21%.
Negative Points
- Growth in North America was soft, with only a 3% increase in sales.
- Sales of other products in North America, such as diagnostics and Pre-Pen, decreased by 4%.
- The integration of Pre-Pen operations has been completed, but sales continue to perform below expectations.
- The company faces challenges in the US market, particularly with sluggish performance in some business segments.
- There are anticipated additional one-off costs related to the revisions of plans and activities in China.
Q & A Highlights
Q: Can you provide insights on the gross margin improvement and expectations for future growth?
A: The gross margin improvement is driven by increased tablet sales, which have high margins. We aim for a 1% point improvement year-on-year, though there may be fluctuations. The environment remains volatile with price increases and inflation, so 1% is our target. (Claus Solje, CFO)
Q: What is causing the fluctuation in R&D costs in Q4, and what will trigger the increase to reach the 10% sales ratio?
A: Q4 is typically our highest investment quarter. We've accelerated some initiatives, such as the peanut trial and preparations for the Chinese trial, which have increased costs. These investments are within our full-year guidance. (Claus Solje, CFO)
Q: Regarding the US market, what can be done to improve performance, especially with sluggish segments?
A: We are focusing on growing tablet sales, particularly with upcoming pediatric launches. The market requires long-term education and training. We are also addressing the life science business and legacy bulk business challenges. (Peter Halling, CEO)
Q: Will the upcoming peanut allergy trial results include any insights on immune tolerance?
A: The current trial focuses on safety and tolerability, not efficacy. We are investigating immunological parameters, but formal efficacy measurements will come in the next phase. (Per Plotnikof, VP Corporate Communications)
Q: Can you provide more details on the pediatric launches in Europe and the commercial framework being built?
A: We are leveraging existing commercial channels and targeting new prescribers, including pediatricians. The infrastructure is well-established, and investments will continue to support these launches. (Peter Halling, CEO)
Q: What are the expectations for the house dust mite clinical trial in China, and how long will it take?
A: We are finalizing the trial design with 300 patients, aiming for approval by 2028. The trial will follow classical dosing schemes, but details are still being discussed with Chinese authorities. (Peter Halling, CEO)
Q: How do you view the potential market impact of the nasal spray versus the auto-injector?
A: We see both products coexisting and expanding the market. The nasal spray offers a needle-free option, while the auto-injector remains preferred by some doctors and patients. (Peter Halling, CEO)
Q: Will the additional costs in China impact marketing activities in Europe?
A: The restructuring costs in China are one-time expenses in Q4 and will not affect next year's numbers. We will continue to invest in marketing activities in Europe. (Claus Solje, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
