Celltrion (068270) Q4 2023 earnings summary

Executive summary

• FY2023 biosimilar sales grew 11.6% YoY, while consolidated sales declined amid lower non-biosimilar sales; operating profit rose 0.7%.

• Q4 sales and operating profit fell 25.1% and 81.7% YoY, respectively, amid supply adjustments ahead of the merger and higher costs.

• FY2023 revenue was KRW 2,176.4bn; Q1 2024 revenue was ₩737.0bn, while operating income fell to ₩15.4bn from ₩182.4bn YoY.

• The 2024 plan targets at least 60% global sales growth and KRW 1.6tn EBITDA at a margin above 40%.

• Q1 interim statements received a review conclusion of no material non-compliance with K-IFRS interim reporting requirements; this was not an audit.

Financial highlights

• FY2023 consolidated sales were KRW 2,176.4bn, gross profit KRW 1,051.9bn, operating profit KRW 651.5bn and net profit KRW 539.7bn.

• FY2023 biosimilar sales rose 11.6% to KRW 1,453bn; non-biosimilar sales fell 26.4% to KRW 723bn, mainly on lower COVID-19 diagnostic kit and Fill & Finish sales.

• Q4 consolidated sales were KRW 382.6bn, operating profit KRW 18.4bn and net profit KRW 0.5bn.

• Q1 2024 revenue was ₩737.0bn vs ₩597.6bn YoY; gross profit was ₩306.7bn and cost of sales ₩430.3bn.

• Q1 SG&A rose to ₩291.2bn from ₩81.7bn; total net income was ₩20.8bn vs ₩167.1bn, and FY2023 R&D expense was KRW 161.1bn vs KRW 139.7bn in 2022.

Outlook and guidance

• 2024 global sales growth target is at least 60%; EBITDA target is KRW 1.6tn with an EBITDA margin above 40%.

• Plant 3 commercial operations are expected in 2H24; five biosimilar product approvals are expected during 2024.

• Zymfentra US launch was planned for 1Q24, with sales expected to rise significantly in 2H24 and rapid market penetration targeted.

• COGS ratio is expected to improve gradually as higher-cost pre-merger inventory is used and lower-cost new inventory is produced.