See income statement and balance sheet in note 33 to the financial statements.
In Q4, the Allergy Sector generated revenue of DKK 304 million (245), equivalent to organic growth at the rate of 17% (17%). For the full year, revenue totalled DKK 1,217 million (1,054), representing organic sales growth at the rate of 15%. The recently acquired French company, Allerbio, was consolidated for two months of the year and added 1% to sales. Exchange differences reduced sales by 1%.
Seen over the quarters, the organic growth was composed of 5% growth in Q1, 17% in Q2, 23% in Q3 and 17% in Q4.
The mandatory discount on the German market was temporarily increased from 6% to 16% in the 2004 calendar year. Consequently, the discount had an adverse impact on growth in the first four months of the financial year and a favourable impact in the rest of the 2004/05 financial year.
For reporting purposes, Northern Europe comprises the Nordic region, the UK and the Netherlands, accounting for 21% of total sales. Central Europe, which, in addition to Germany, also comprises Austria and Switzerland, accounted for 46% and thus continues to be the largest region. This region also saw the strongest year-on-year growth. Southern Europe, comprising Spain, Italy and France, accounted for 18%. The Southern European region is going to grow substantially next year when Allerbio, the recently acquired French-based company, will be consolidated for the full year. Other markets comprise the USA, China and the rest of the world and account for 15% of sales.
As in previous years, by far the largest part of revenue came from sales of allergy vaccines, which accounted for 76% (75%) of total revenue, whilst diagnostic products, the adrenaline product EpiPen® for emergency treatment of anaphylactic shock, and goods for resale accounted for 24% (25%) of sales. The SLIT product line, which is growing more rapidly than the SCIT product line, now accounts for 23% (20%) of allergy vaccine sales. Generally, the increase in revenue comprises high growth in allergy vaccine sales, with increases in both initial and maintenance treatments and satisfactory growth in the sale of the EpiPen®. Most geographic markets saw satisfactory sales growth.
Cost of sales was DKK 104 million (114) in Q4 and DKK 422 million (417) for the full year. Although revenue increased, costs were retained at last year’s level. This good performance, which was the result of continuing optimization and production efficiency, was a contributing factor to gross profit reaching DKK 200 million in Q4 (131) and DKK 795 million for the full year (637), equivalent to 65% (60%) of the year’s revenue.
R&D costs totalled DKK 236 million (233), which was on a level with last year. R&D costs now account for 19% of revenue (22%).
Capacity costs relating to sales, marketing and administration totalled DKK 506 million (459). The increase was mainly seen within sales and marketing, partly as a result of an increase of the sales force and partly as a result of a generally higher activity level.
| EBITA |
|
|
| DKKm |
2004/05 |
2003/04 |
| Core business |
245 |
143 |
| EBITA % of revenue |
20% |
14% |
| Pipeline |
(192) |
(198) |
| Total |
53 |
(55) |
EBITA for the core business before the settlement of share options amounted to DKK 45 million in Q4 (14) and reached DKK 245 million for the full year (143), equivalent to a year-on-year increase of 71%. This exceeded the latest forecast of DKK 210 million, primarily as a result of the higher sales and the fall in production costs.
Pipeline costs amounted to DKK 192 million (198), which was in line with the forecast.
Most of the pipeline costs are used for pharmaceutical development, clinical studies, registration of new vaccines, etc. Registration costs primarily relate to the GRAZAX® tablet against grass pollen allergy.
Total EBITA, operating profit before the settlement of warrants and amortization of goodwill, was DKK 53 million (a loss of 55) against the previous forecast of DKK 20 million.