Comments from the CEO

Fourth-quarter sales amounted to SEK 120.2 million (113.3) and OPEX totaled SEK 29.4 million (23.6), both in line with expectations. However, the gross margin of 28% (41%) was below expectations, mainly due to one-off items impacting gross profit by SEK 13 million. Logistics remained more challenging than antici pated due to geopolitical uncertainty, increasing freight and insurance costs. One product was launched, and two were added to the pipeline. A pruning exercise to improve focus, resulted in one product being removed from the portfolio and seven from the pipeline. Mellozzan received marketing authorization in Italy, and Ireland was added as a new territory for both Mellozzan and Memprex. Sales growth for 2026/27 is forecast around 15%, lower than previously expected due to later launches. The forecast is based on the current situation and will be refined continuously. Despite a weaker start, the five-year growth plan remains unchanged, with approximately 30 launches planned over three years alongside growth in Mellozzan and Memprex and efficiency improvements.

Financial Overview for the Fourth Quarter

During the quarter, sales increased by 6% to SEK 120.2 million, marking a sales record for EQL. However, EBIT declined to SEK 5.1 million (23.0), with an EBITDA margin of 10% (25%). One-off effects impacting margins included: Abiraterone impairment (SEK 6.0m), destruction of Mero penem and COVID-19 tests (SEK 2.0m), higher logistics costs related to the Iran conflict (SEK 2.0m), antibiotic clearance sales (SEK 2.0m), and Medilink acquisition costs (SEK 1.0m). There remains a risk of further destruction in Q1. Supply shortages improved but still persist due to logistics disruptions linked to the Iran conflict and supplier delays.

Cash and cash equivalents amounted to SEK 86.8 million (82.4), with an unused working capital facility of SEK 26.5 million (26.6). CAPEX was SEK 16.7 million (209.3), and leverage reached 5.0x EBITDA which is above target. This is being addressed by slowing pipeline additions and improving EBITDA. Leverage is expected to remain above target through much of 2026/27 before declining.

Long-term Financial Targets and Forecasts for the Current Financial Year

Sales growth remains below the long-term target of 30%, and the EBITDA margin of 10% also falls short of the five-year plan target of 25%, mainly due to supply shortages and one-off effects. However, long-term targets remain unchanged.

Product Launches and Market Dynamics

One product was launched and one dereg istered, leaving 47 products in the portfolio. Two products were added to the pipeline and seven removed, reducing it to 44. The com pany is streamlining its portfolio and pipeline by removing products with limited long-term potential, improving scalability and cash flow predictability. Of the new products, one is a niche generic for the Nordics/Germany and one a Special Generics product.

Inventory levels improved slightly versus Q3, though some deliveries are still pending. Sup plier collaboration has improved visibility, and the situation is expected to gradually improve in Q1. The recovery plan has been adjusted due to ongoing logistics challenges. Initiatives are underway to improve delivery precision, including process upgrades and ERP implemen tation during 2026 to strengthen supply chain transparency and control.

Expansion in Germany and the Netherlands is progressing as planned, with evaluation of both existing and new products. A first niche product has been signed for Germany, with a pilot launch targeted for 2026/27.

For Memprex, Ireland has been added with partner Azure, and applications submitted. Launch preparations are ongoing in Germany (spring) and France (summer), with additional preparations in Israel and progress in the Bene lux RUP procedure.

For Mellozzan, Ireland has been added with Azure, with application submission planned shortly. Ongoing applications include Kazakh stan and GCC, while launch preparations continue in Italy and Turkey. Medice continues to grow sales in Germany. Discussions for addi tional territories are ongoing for both Melloz zan and Memprex.

Other

The Red Sea shipping situation remains unchanged, while logistics have worsened due to the Iran conflict. EQL has no exposure to the U.S. or potential tariffs. Pharmaceutical sales remain non-cyclical, providing stability. The company is focused on delivering its five-year plan, improving supply reliability, increasing traceability, optimizing transport, and ensuring supply chain redundancy.