ALK Reports Impressive Financial Results in Q2 2024
Company release No. 16/2024 highlights that ALK delivers 21% organic revenue growth with an operating profit margin of 19% in Q2 (unaudited). This remarkable revenue growth was largely propelled by strong momentum in tablet sales, complemented by improved performance in injection- and drop-based allergy immunotherapy products. The European and International markets have emerged as key contributors to this growth. Additionally, the increase in operating profit (EBIT) of 189% aligns well with ALK's financial targets, prompting an upgrade in the full-year outlook.
Key Performance Highlights of Q2
When comparing figures to Q2 2023, ALK demonstrated notable achievements. Revenue growth rates are stated in local currencies, as follows:
- Total revenue increased by 21% in local currencies to DKK 1,374 million from DKK 1,135, showcasing broad-based growth.
- Tablet sales surged by 32% to DKK 716 million from DKK 547, with double-digit growth observed across all sales regions. Europe was a key contributor, achieving 35% growth.
- Combined sales for SCIT and SLIT-drops increased by 16%, reaching DKK 490 million from DKK 423, supported by robust growth in Europe and rising SCIT shipments to China.
- Sales for Other products and services grew by 1% to DKK 168 million from DKK 165. Jext sales increased by 17% as it recovers from previous supply shortages, while other products noted a decline.
Financial Highlights Overview
Operating profit (EBIT) showed significant growth, increasing by 189% in local currencies to DKK 264 million from DKK 97, achieving an EBIT margin of 19% compared to 9% the previous year. This progress can be attributed to several factors, including sales growth, improved gross margins, and effective cost management strategies that have resulted in reduced overall costs across R&D, Sales & Marketing, and Administration. Notably, EBIT figures included one-off costs of DKK 38 million associated with optimization initiatives.
Strategic Progress and Future Outlook
ALK is committed to executing its new strategy ‘Allergy+’ that was launched on June 3, 2024, which outlines ambitious long-term financial goals for 2028. The implementation of this strategy has commenced with a focus on high-potential growth levers.
- Regulatory processes are actively ongoing to secure approvals for house dust mite and tree pollen allergy tablets for children in both European and North American markets, with launch preparations projected on schedule for 2024/25. Moreover, a clinical trial concerning the peanut allergy tablet is on track to report the next set of results in the latter half of 2024.
- Following the withdrawal of the house dust mite allergy tablet license application for China, ALK is cooperating with local authorities to fulfill the documentation requirements necessary for securing local approval.
- Optimization activities are progressing smoothly to free up resources for growth investments, thereby aligning with the 2025 earnings ambition of achieving a 25% EBIT margin.
Upgraded Full-Year Financial Outlook
In reference to Company Announcement no 15/2024 released earlier, the full-year financial outlook has been revised upwards. The revenue is anticipated to grow by 14-16% organically in local currencies, an increase from the previous expectation of 12-15%, largely credited to broad-based growth across various sales regions and product groups. European tablet sales remain a crucial factor in this growth.
- The EBIT margin is forecasted to improve to 19-21%, revised from an earlier estimate of 18-20%, compared to last year’s margin of 14%. This improvement is mainly driven by the accelerated sales growth, factoring in approximately DKK 60 million in one-off costs related to optimization efforts.
CEO’s Comments on Q2 Results
Commenting on the Q2 results, CEO Peter Halling stated: "Results in 2024 have so far exceeded expectations, and we are particularly encouraged by the continued robust tablet growth and the positive impact of the cost optimization initiatives. The implementation of our new strategy ‘Allergy+’ is well underway and we have taken the first steps to effectively scale up ALK for future growth in revenue and earnings.”
Frequently Asked Questions
What were the key revenue growth figures for ALK in Q2 2024?
ALK reported a 21% increase in total revenue for Q2 2024, reaching DKK 1,374 million.
How did ALK's EBIT perform in Q2 2024?
The EBIT for Q2 2024 increased by 189%, amounting to DKK 264 million, with an EBIT margin of 19%.
What strategic initiatives are driving ALK's growth?
ALK's growth is being driven by its new strategy ‘Allergy+’, which focuses on high-potential growth levers and optimizing operational efficiencies.
What is the full-year outlook for ALK's financial performance?
The full-year outlook has been upgraded to reflect a projected revenue growth of 14-16% organically, and an EBIT margin of 19-21%.
Who can be contacted for more information regarding ALK?
For further information, interested parties can contact Per Plotnikof in Investor Relations at +45 4574 7527 or Maiken Riise Andersen in Media at +45 5054 1434.
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