Alk-Abello As B Shs New

Hello, everyone, and welcome to this presentation of ALK's full year results and the outlook for 2025. And thank you all for joining us. Let's turn to slide number two with an introduction to the agenda and the speakers. My name is Per Plotnikoff. I'm head of investor relations. And with me today are CEO Peter Halling and CFO Claus Steensen-Sølje. We'll first be sharing highlights from Q4 and the full year, and then we'll take a closer look at the market and product trends, as well as the financials. We'll also provide an update on the execution of the Allergy Plus strategy before we present the outlook. As usual, we will end the presentation with a Q&A session. And to get us started, I'll hand you over to Peter and slide number three for the Q4 and full year highlights. Please go ahead, Peter.

Thank you, Pia, and thank you all for joining this call. First, a few highlights from Q4. Results were as expected and in line with the full-year outlook. Revenue grew by 11% to 1.5 billion Danish kroner. Europe continued to perform very well and delivered double-digit sales growth across all product lines. European tablet sales increased by 32% as we further solidified market momentum. We estimate that that number of new patients coming in were basically attributed to starting the tablet treatment in 24. 24 initiation season exceeded last year's number by more than 10%. This should give us some comfort for the growth prospects in 25, although too early to conclude since the initiation season is still ongoing. North America and international markets didn't contribute to top line growth in Q4. We knew that in advance and flagged this during the Q3 earnings call and in the Q3 report. Consequently, revenue growth was lower than in Q2 and in Q3. Klaus will add a few more words to this later on the call. Regarding investments, then Q4 is always our largest investment quarter due to the initiation season. But in 24, we decided to invest even more and speed up strategic initiatives. We increased R&D costs and invested further in both the peanut tablet program and the upcoming Akarisax trial in China. Sales and marketing costs reflected increased activities to support the pediatric launches. Costs also included one-off costs of 26 million related to previously announced optimization initiatives in Europe and the adjustments in China, where we reshaped the organization due to the delayed timeline for the Akarisax launch. We also had additional planned costs related to the NEFI deal, including advisory fees. Due to these one-off costs, the Q4 operating margin ended at 14%, which is still in line with our guidance. Slide four, please. So let's move from quarterly variations to the more accurate full-year picture. 2024 was a record year for ALK. We delivered on short-term targets and established a new strategic framework for ALK's long-term development. Revenue was off 15%, driven primarily by European tablet sales. Growth was higher than what we've seen in previous years, and earnings improved by 65% in local currencies. The EBIT result exceeded 1 billion DKK for the very first time, thanks to solid sales growth, margin expansion, and efficiencies across the business. A very strong set of results, which Claus will elaborate on later. Another highlight was the AllergyPlus strategy execution, which has started to deliver the desired results. Let me just point out a few things showing our efforts to unlock further potential in existing markets and expand into new therapy areas with high unmet needs. Firstly, we are expanding the addressable market in respiratory allergy. We do that when we add new patient groups, particularly children, and expand into new relevant segments. Secondly, we took important steps to build new revenue streams in the broader allergy space. We in-licensed the nasal spray NEFI to support our ambitions in anaphylaxis. Moreover, in food allergy, we have good data and readouts from our ongoing clinical development program. The fast initiation of the strategy implementation and the EBIT optimization was made feasible by our successful execution of the plus 250 million DKK optimization program. 2024 was also a year where ALK calibrated its business platform to focus on high potential growth levers. This is reducing complexity and generating savings, which will partly support earnings and partly be allocated to initiatives with the highest potential to generate strong returns and the greatest benefits for patients and prescribers. We'll detail this during the presentation, but first I'll hand it over to you Claus and the market trends on slide five.

Thanks, Peter. Let's dive into the performance in our sales regions first. Our main region, Europe, stood out as an exceptional contributor to growth. Sales were up 22% with a double-digit growth in most northern, central and western EU markets, including Germany and France. Tablets were the number one source of growth. European tablet sales increased by 31% as we activated more patients, prescribers, payers, and key opinion leaders. Approximately half of the growth came from higher volumes linked to the past year's inflow of new patients, while improved pricing and rebate adjustments roughly accounted for the other half. Trading patterns among wholesalers were still a factor, but these movements had a lower negative impact than in 2023. Sales of our two other product lines also grew by double digits in Europe. Skid and slid drop sales increased by 10%, while sales of other products grew by 32%, driven by the adrenaline pen text. ALK consolidated its position as the European market leader. Revenue in North America was unchanged, and we are not satisfied with this result. It was positive to see tablet sales were up 15%, mainly on higher volumes, while the impact from higher average selling prices in the US declined in the second half year. Sales in skid bulk extracts were flat, while sales of other products were down 7%. I'll come back to this more in a moment. Revenue in international markets was up 4%. Tablet revenue grew by 9%, although growth was somewhat impacted by phasing of shipments to Japan, where capacity constraints prevented our partner, Torii, from fully meeting demand. Still, Torii firmed up its position as market leader with growth of 12% in the in-market sales. Revenue from skid in China registered a double-digit decline as no shipment was sent to China during the renewal of ALK's import license and due to some in-market inventory adjustments. The renewal has now been completed and we have started producing new skid products for China that will be shipped from the spring and onwards. Nevertheless, the in-market sales in China contribute to grow by double-digit. Let's turn to the product lines on slide 6. Global tablet revenue was up 24% due to the strong performance in Europe. Global revenue from skid and slid drops was up 6% thanks to higher volumes, improved pricing and rebate adjustments in Europe. Global revenue from other products increased by 7%. JEC sales recovered nicely from the 2023 supply challenges. Oppositely, sales of other products were down in North America as we decided to discontinue some high-volume, low-margin contracts on life-sign products. In addition, prepend sales performed below expectations. We are pleased with the pre-pinned business, which we acquired in January, but the stock up with doctors ahead of the acquisition and the lack of reorderings in the first half year came as a surprise to us. We expect to see normalized sales growth this year. With these updates, let's move to slide seven and the financial results. Revenue was totally up 15% in local currencies and exceeded 5.5 billion Danish kroner for the first time. The gross profit of 3.6 billion Danish kroner yielded a gross margin of 64.2% and improvement of more than one percentage point. This improvement was linked to volume growth, changes to the sales mix, improved pricing, and production efficiencies. In line with our expectations, these factors were partly offset by higher input costs and minor one-off costs to optimizations in product supply. Capacity costs increased by 4% to 2.5 billion Danish kroner. This figure includes the vast majority of the 75 million Danish kroner in one-off expenses related to optimization initiatives in Europe and China. Without these one-offs, capacity costs would have been flattish, mirroring the positive impact from resource optimizations and general cost savings. Operating profit, EBIT, was 1.1 billion Danish kroner, an increase of 65% in local currencies and 64% in Danish kroner. It was the first time we exceeded the 1 billion DKK mark in operating profit. The EBIT margin increased from 14% to 20%, and the underlying EBIT margin would have exceeded 21% had it not been for one-off cost. Finally, free cash flow was negative at minus 204 million Danish kroner. This was recalled due to the upfront payment of 1 billion Danish kroner related to the strategic license deal for NEFI. Excluding the upfront payment related to the NEFI license agreement, free cash flow ended better than expected, and increased to 290 million Danish kroner. 790 million Danish kroner, sorry. Driven by improved earnings, lower capex, and changes to working capital. The two graphs to the right point out two important factors in ALK's earnings journey. Firstly, we have managed to increase the gross profit by 15% on average in the last four years compared to the 12% top-line growth in the same period. We remain keen on sustaining this trend, although fluctuations may occur from year to year. Secondly, we have managed to contain capacity cost, so the capacity cost to revenue ratio is down by nine percentage point from 54% to 45%. This will remain a key focus area for us. So all in all, a strong set of results that continue this solid traction. Now back to you, Peter, and the strategy on slide eight.