ALK-Abelló (ALK) Q2 2024 earnings summary

Executive summary

• Q2 2024 organic revenue grew 21% year-over-year, led by global tablet sales up 32% and EU tablet sales up 35%, driving upgrades to full-year revenue and earnings outlooks.

• EBIT margin rose by 10 percentage points to 19% year-over-year, despite DKK 38 million in one-off optimization costs.

• The Allergy+ strategy (also referred to as 'Allergy *') is progressing, focusing on expanding reach, optimizing operations, and supporting future growth.

• Full-year outlook was upgraded, reflecting robust sales momentum, especially in Europe, and successful cost optimization initiatives.

• Regulatory filings for pediatric tablet use accepted in Europe, U.S., and Canada, with launches expected from late 2024 onward, pending approval.

Financial highlights

• H1 2024 revenue was DKK 2,725m, up 15% year-over-year, mainly driven by tablet sales in Europe.

• Gross profit reached nearly DKK 1,800m, with a gross margin of 64.4%, up from 63.6% in H1 2023.

• EBIT for H1 2024 was DKK 580m, up 84% year-over-year; EBIT margin improved to 21% (23% excluding one-off costs).

• Free cash flow for H1 2024 was DKK 272m, compared to negative DKK 48m in H1 2023.

• Q2 net profit was DKK 201m (+205% y/y); H1 net profit DKK 433m (+89% y/y).

Outlook and guidance

• Full-year 2024 organic revenue growth guidance raised to 14-16% (from 12-15%), and EBIT margin guidance to 19-21% (from 18-20%), including DKK ~60m in one-off optimization costs.

• Europe expected to lead with robust double-digit sales growth; North America and international markets projected for mid to high single-digit growth.

• Tablets remain the primary growth driver; SCIT/SLIT-drops and other products expected to grow by high and mid to high single digits, respectively.

• Gross margin expected to improve by around 1 percentage point; R&D expenses to decline to around 10% of revenue.

• CAPEX projected at DKK 400m; free cash flow to increase excluding acquisitions.