INTERIM REPORT JANUARY– SEPTEMBER 2017

THE PERIOD AND THE THIRD QUARTER

· Net sales amounted to MSEK 418.9 (250.8), whereof the third quarter MSEK 137.1 (85.2). This represents an increase of 67% for the period and 61% for the quarter
· EBITDA amounted to MSEK 127.5 (22.8), whereof the third quarter MSEK 34.0 (10.2), corresponding to a margin of 30.4% (9.1%) for the period and 24.8% (12.0%) for the third quarter. The relatively slightly lower margin in the third quarter is mainly due to expected seasonality in the product mix.
· Cash flow from operating activities amounted to MSEK 62.3 (-45.7), whereof the third quarter MSEK    -16.2 (-4.0). The difference is due to interest payments related to the acquisition of BioPhausia as well as increased operating capital due to changed timing of invoicing affecting the size of customer receivables.
· Earnings per share were SEK 0.63 (0.06), whereof the third quarter SEK 0.16 (0.06)
· Cash and cash equivalents and other short-term investments at the end of the period amounted to MSEK 130.4 (147.8).
· In the third quarter, Karo Pharma, in collaboration with Dr Wolff, launched Plantur in Sweden.
· Karo Pharma pre-launched the product Babyslide in the third quarter. Babyslide is a new patented Swedish invention aimed at reducing the risk of ruptures at childbirth.

SIGNIFICANT EVENTS AFTER PERIOD END

· On 6 October, Karo Pharma completed the public offering of the Norwegian pharmaceutical company Weifa ASA. Since 17 October, Karo Pharma holds 100% of the shares and voting rights in Weifa. The acquisition price amounted to approximately MSEK 1,322. Weifa ASA was delisted from Oslo Stock Exchange on 27 October.
· Rights Issue
Karo Pharma’s Board will propose an issue of shares with preferential rights for Karo Pharma’s shareholders. The proceeds will be used to repay part of the acquisition financing for Weifa ASA. The board will call for extraordinary general meeting and propose terms and size of the rights issue before the end of 2017.
· The company’s current Business Controller Camilla Lönn has been appointed new CFO. Camilla Lönn has long experience from managing finance departments. The current CFO Henrik Palm will terminate his employment at the company.

 
AUDIOCAST TODAY AT 11.00 A.M. CET
A presentation of the report (in Swedish) will take place today at 11 a.m. The presentation can be attended through the corporate website www.karohealthcare.se or by telephone +46 8 505 564 74. Questions may be submitted over the internet or by the telephone.

COMMENT ON OPERATIONS
We follow our plan and the third quarter gave growth with increased profits.
Karo Pharma is a Specialty Pharma company with strong market orientation.
The acquisition of Weifa has a strong commercial foundation. We develop our Nordic operations and gain a leading position in Norway. The companies complement each other in terms of product portfolio and geography. Our joint product portfolio with several new launches next year improve its opportunities to succeed. We see synergies of more than MSEK 500 over the next three years, mainly through new launches. A strong and profitable home market offers better opportunities to take the next step towards more markets and collaborations outside the Nordic region.
The company currently has many products close to launch phase. It will require prioritization to maximize the success of each individual product.
At the third quarter report, we have generally provided full year forecasts. During the fourth quarter, the company will incur costs for structural changes related to the acquisition of Weifa ASA. Therefore, a forecast for the full year cannot be given in this report.
Karo Pharma is an interesting option for shareholders who want to invest in the healthcare sector. We are long-term and run a business that is not cyclical.
We follow our plan and look forward to delivering good performance and an interesting future for our shareholders.
Anders Lönner
Chairman of the Board

FOR FURTHER INFORMATION, PLEASE CONTACT
Peter Blom, CEO, +46 (0) 70-655 56 98 or peter.blom@karopharma.se
ABOUT KARO PHARMA 
Karo Pharma is a specialty pharma company that develops and markets products to pharmacies and directly to healthcare providers. The share is listed on Nasdaq Stockholm in the Mid Cap segment.
The information in this report is such that Karo Pharma is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, on 2 November 2017 at 8.00 a.m. CET.