Six-month interim report (Q2) 2017

Performance for the period (unaudited)
(Comparative figures for 2016 are shown in brackets. Revenue growth is measured in local currencies.
2016 comparative figures are affected by last year's market disruptions which boosted ALK's sales and earnings in Europe significantly, particularly in the second quarter. To provide a meaningful benchmark, comparisons to figures from 2015 have also been included in the report wherever relevant.)

During Q2 2017, ALK continued its investment programme focused on building-up the company in North America, securing its European leadership position and upgrading its product supply. ALK has met all its key objectives for H1 2017 and now has H1 total revenue that is 25% higher than 2015, before the market disruptions. ALK will continue to invest in expansion initiatives to deliver its long-term growth plans.   

Q2 2017 highlights:

• Performance was in line with expectations: Growth in North America and International markets was, as anticipated, offset by declining revenue in Europe, partly following the disruptions of 2016.
• Total revenue declined to DKK 691 million (773). When comparing this with last year, it is important to note that Q2 2016 included an extraordinary carry-over benefit of European orders worth approximately DKK 100 million which were placed in Q1 2016 but invoiced in Q2 2016.
• European revenue was 29% higher organically than Q2 2015 'pre-market disruption' levels, representing a significant expansion of ALK's size.
• The previously communicated SCIT capacity constraints are estimated to have negatively impacted Q2 sales by DKK 50-60 million. 

• Operating profit (EBITDA) was DKK 16 million (159) following planned cost increases to support long-term growth mainly in the USA and in ALK's product supply operations.
• In H1, total revenue amounted to DKK 1,480 million (1,621) and operating profit (EBITDA) was DKK 156 million (436).

Business priorities

• Investments in the North American build-up in support of the tablet portfolio are ongoing and ALK is currently evaluating opportunities to move forward the launches of ACARIZAX^® from 2018 to 2017. The US-brand name will be ODACTRA™. Meanwhile, the transfer of US product licences is still being processed by the FDA.
• Investments in retaining market leadership in Europe continue and are showing good progress.
• ACARIZAX^® sales continue to grow strongly; development and registration activities are progressing as planned.
• SCIT production output has now been fully restored for all major allergens, and robust inventory levels are expected to be gradually rebuilt during 2018.  
• A strategy update will be presented in the autumn. 

2017 financial guidance

ALK's financial guidance for full-year revenue and operating profit (EBITDA) is unchanged. The free cash flow guidance has been revised, primarily due to higher tax payments and a slightly higher working capital:

• Full-year revenue is still projected at DKK 2.8-3.0 billion (2016: DKK 3.0 billion) as European markets establish a 'new normal' following last year's disruptions.  
• Operating profit (EBITDA) is still expected to be ~DKK 300 million.
• Free cash flow is now expected at minus DKK 600 million or greater (previously: down to approximately minus DKK 500 million).
   

Hørsholm, 16 August 2017

ALK-Abelló A/S

For further information, contact:
Investor Relations: Per Plotnikof, tel. +45 4574 7527, mobile +45 2261 2525
Media: Jeppe Ilkjær, tel. +45 7877 4532, mobile +45 3050 2014  

Today, ALK is hosting a conference call for analysts and investors at 1.30 p.m. (CEST) at which Management will review the financial results and the outlook. The conference call will be audio cast on http://ir.alk.net/. Participants in the audio cast are kindly requested to call in before 1.25 p.m. (CEST). Danish participants should call in on tel. +45 7022 3500 and international participants should call in on tel. +44 (0) 20 7572 1187 or +1 646 722 4972. Please use the Participant Pin Code: 52826656#. The conference call will also be webcast live on our website, where the related presentation will be made available shortly before the call begins.

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