EQL Pharma AB (publ) (EQL) Earnings Call Transcript & Summary

Everybody, and welcome to EQL Pharma's first ever Capital Markets Day. It's fantastic to see so many joining us here physically in Carnegie Hall, and warmly welcome to everyone who is sitting at home or elsewhere following this Capital Markets Day as well. Today is a really special day for EQL Pharma. Today, we are doing our first ever Capital Markets Day, which is, I think, also a sign on the journey that we are on and the steps that we have taken. Secondly, we finally get to present our ambitions for the coming 5 years in a little more detail, not only saying that they will be ambitious and growth focused or something like this. So we are very excited about this day to gather people who follow us, analysts, investors and so on and really dig down into what we plan to achieve here in the coming 5 years. So the focus on the day, basically in a nutshell, will be to -- we will spend very, very short time on EQL and what we do because we can talk about that in other forums, but we will do a small recap on that. Then we will present you with our new plan on sort of helicopter level, what will the new financial targets be comparing it to earlier plans and so on. And then for a change, you will not have to listen to me all day. So I have with me here from -- freshly from Lund, my colleagues, Alexander Brising and Carl Lindgren. So if we start with Carl here, he is our Chief Business Development Officer. He's looking after M&A, but also, let's say, organic business development in new geographies. Carl has a super solid background here with Lundbeck and Karo Pharma, now Karo Healthcare and so on. For example, he was instrumental in taking Karo Pharma from SEK 300 million to SEK 5.5 billion in revenue over only a couple of years here. So very, very prominent pharma guy, and now he is in our team. We are very glad for that. I have with me also Alexander Brising, who is our Chief Commercial Officer, and he's even been with the company longer than I have. So he knows basically everything. Prior to joining EQL, Alexander was heading the Sandoz Swedish practice. In only a couple of years, he took that from SEK 300 million in revenue to SEK 900 million in revenue, completely organic, which is also obviously a very, very nice achievement. And I think most of you already know me. So this is the more detailed agenda for the day. So a short introduction to EQL Pharma. Then we will look a little bit at what have the previous 5-year plans been and what have they basically delivered. Then I will go into a little more detail about the -- yes, the financial targets and basically explain how we have been thinking when defining the financial targets and talk a little bit more about them. Then Alexander will go into the business plan and explain it a little more from a commercial perspective. So the different components building the business plan, what will they be? How will we ensure to keep them under control basically. Carl will talk a little bit more about acquisition strategy, how we think when we're looking at acquisitions, what type of acquisitions we're looking for, how we are thinking in terms of financing and so on. Then we couldn't resist to, of course, to make a deep dive in our key strategic assets, Mellozzan and Memprex, where Alexander has prepared a really nice chapter on that, where we're summing up a little bit what we have achieved so far, the business rationale with these initiatives and also what we can expect a little bit going forward. So that is basically it. And the sort of the purpose with today it's not basically explaining even more than normally what EQL does. The purpose today is explain what we want to achieve in the coming 5 years, what components that growth will be based upon and how we plan to do it basically to build -- to be transparent and to build a trust around that this is a realistic target, and this is how we plan to do it. And there will be a Q&A session in the end. So I think it will be most structure if we're saving questions for the end. All right. Let's dive into it. So okay, we're starting super fast with EQL Pharma. So EQL Pharma was founded in 2006 by Christer Fåhraeus and Karin Wehlin, two local entrepreneurs, you could say. Christer is a pretty prominent name, I suppose. And yes, basically, we are something as uncommon as a fast-growing, highly profitable South Swedish pharmacy company. And the logics behind EQL Pharma is basically that in countries such as Sweden and Denmark and Norway that has a legacy pharma industry, you're having, you could say, niche or small local pharmaceuticals selling between EUR 1 million and EUR 3 million, where they didn't enter so many competitors. So if we come in there and take a part of that sales, we can basically enjoy a very stable sales and profit development and also very predictable, you could say. We currently have about 40 products in the market and another 40 in the pipeline, and the pipeline is growing all the time, and that is also in our DNA, I would say. Looking at the numbers a little bit. So these are pro forma adjusted numbers, meaning that -- we have added the recent Medilink acquisition and assumed 12-month contribution from that. So then we are at SEK 389 million in sales, SEK 94 million in EBITDA. And the pro forma adjusted EBITDA margin is 24%, which is basically then just 1% short of our target of 25%. We are currently on a growth trajectory of 40%, and that trajectory since 2020. And we have a market cap of about SEK 2.4 billion, SEK 2.5 billion. So we're actually starting to become a real company here, it feels like. And on the right here, you can see our geographical split then in terms of sales. So obviously, still Sweden, the biggest market, Denmark, still very important. Rest of Europe on the growth, of course. So here is -- yes, this is my brag slide, how you can see the quarterly growth. From since, yes basically since 2015 and onwards. So we're saying then with 27 consecutive quarters of more than 2-digit growth, we're obviously very proud of that. We can just make a couple of seagull dives here into main events in the period. So I'd say the company was founded in 2006, but it was not until 2009 that this idea around the niche generics was formulated basically and then acted upon. In 2013, we were listed on Spotlight. It was then called AktieTorget, I believe, in 2013, later changed name to Spotlight. So we've been in a listed environment for a long time, although it was not until recently, we were listed on NASDAQ. Cadila Pharmaceuticals, our largest owner and our largest supplier and cooperation partner, they came into the picture in 2015, where basically they were allowed to make an equity investment with the counter performance that they shall be our house CDMO and deliver products and develop products for us very competitively. In 2019, the first EQL developed products was starting to sell outside of the Nordics, and that was methenamine hippurate actually, which later became our key strategic product, Memprex. In 2020, 2021, there was the COVID pandemic. And as many of you know, we were then doing a lot of work to try and benefit from this by having some opportunistic sales in COVID-19 tests and in personal protective equipment for the hospital center. And then the most important event in 2022, of course, that I was appointed CEO, very important. No, no, just joking. So in 2023, you could say we're starting to accelerate with Carl coming into the team, we're starting to accelerate growth by adding even more products to pipeline than we've done historically and also starting to plan for carrying out more, more strategic acquisitions. And in this summer, actually 4th of July, so that is easy to remember, our shares were listed in NASDAQ main list here in Stockholm, which was also a main event, obviously, for us. So basically, we are conducting our business, you could say, in three different segments. There is the pharmacy segment. And the Pharmacy segment, it is prescription drugs. So your doctor writes your prescription. You go to the pharmacy and you pick up your drug, and it is in the pharmacy that the generic interchange happens. So basically, I think you have all experienced it when you go with a prescription and the pharmacist is saying, we have a cheaper option available for you. That is when the interchange happens. And this basically -- this sales channel is about 70% of our total sales for the time being. So it is the most important segment. And it is more or less completely price-centric, meaning that it's tender-driven and if you have the lowest price, you get the volume. This is certainly the case in Sweden and Denmark, not so much so in Norway, it's another system. But -- so it's basically -- it's a stable and relatively predictable segment for us, delivering as a portfolio, a gross margin of something like 50% to 55%, thereabouts. Secondly, we have the Hospital segment, and this is little other type of products and other type of, you could say, sales channels. whereas the Pharmacy products are typically tablets, capsules, it could be oral granulate for solution, but most tablets and capsules. The Hospital products are injectables to be injected directly into the bloodstream or for infusion, for injection. So basically, these type of products. And they are for patients who are in hospitalized presurgery, post surgery, for example, third-line antibiotics, if no other antibiotics work, so these kind of products. And they are being tendered through, you could say, public tenders or public tender-like systems in Sweden, Denmark, Norway and Finland, basically where we're driving the sales ourselves. And this portfolio delivers a little lower gross margin, unfortunately. But on the upside, the contracts are very long and stable. The contracts are 2 to 5 years, you can say. So on the downside, a little lower gross margin, on the upside, stable contracts. Then we have a final segment that we are very excited about, which is basically a different kind of animal in our portfolio here. So it's the Branded segment. And this segment is constituted by two products that were initially developed as niche generics towards Nordic originators. Then along the way, it was realized that these products are not used in Continental Europe, but they should be. With this realization, we said, okay, but then we could basically become an originator in Continental Europe with the CapEx structure of our generics. So if that idea works, it will be brilliant, we thought. So then we started to team up with local champions such as [ Dr. Pfleger, MEDICE ] in these two therapeutic areas, which are CNS and women's health. And we are basically together with these partners, building these markets from scratch. Alexander will take you into this in much more detail later on, but it's a segment we're very excited about. Yes, you could say basically, this is, I think, no news to most of you. It's basically just the three main phases of a pharmaceutical. First period where we are not active, where the original pharma companies are doing research. They have a hypothesis here that a certain molecule will cure a certain condition. And then they have to prove this in three clinical phases, basically showing that the pharmaceutical is efficious, that it has an effect and that it is safe. Once that is done, they can -- basically, they apply for a patent much earlier, but once that is done and all is approved, they can launch their product. And then we have the monopolistic phase of the pharmaceutical where the originator is selling alone for a certain period of time to a certain price, which is generally a much higher price than what the generic sells for. Then at the patent expiry, patent expires. And for most large product, then basically, the market value drops extremely much in only a couple of weeks. But for certain pharmaceuticals, for certain reasons, that does not happen, and that is the type of pharmaceuticals we focus on. Alexander will explain this in a little more detail later. So you can see basically, okay, what do we do as a company? What do we practically do and what do we let others do for us? So basically, identifying these niche products, that is something that is very important for us and something that we have in-house and where we really, really need the experts such as Alexander has been doing this for a very, very long time. And now we're planning also to do it in other geographies. So we need experts there. But that is basically market analysis to identify these products. Then the development and production, we're basically doing with third parties, CDMOs and CMOs, so contract development and manufacturing organizations and contract manufacturing organizations. And we manage the projects, but they basically do all the development. The registration of the products to the local NPAs, we are doing ourselves. Then all warehousing and distribution and release testing and release of products is done by external parties. So we're basically, as I say, an asset-light company, meaning that we don't have any steel at all in our balance sheet. Our balance sheet is constituted by cash flow generating assets in the form of our products. And steel, in my analysis, there is enough steel in the world. We don't need steel in our balance sheet. Everyone is having a little cold, it feels like both in Stockholm and in Skåne. Globally even. Basically, very briefly the development process. So once we start a development of a generic pharmaceutical, we basically start by -- so development for us doesn't mean to develop a new molecule. It basically means to develop a copy and then you can think how the hell that cannot be so difficult. But since this is very complex, it is a difficult process. So first then the CDMO starts with purchasing the active substances, the API, the molecule that actually cures the condition, then they work on formulation, which is basically formulating the recipe for a new tablet, deciding what to be in it and in what quantities and so on, then testing that it is stable. Then in one way or another, proving that it is equivalent to the originator can be done even by a bio-waiver or a bioequivalent study. And then you have the approval launch phase. And everything takes, I would say, 3 to 5 years. On the bottom of the slide here, you can see our expected launches and pipeline development over the coming years here, but Alexander will take you through that in more detail later on. I could say also that we have a 70% success rate in our products. That's important to know in our projects. That's important to know when you're trying to project our future that out of 10 started projects, 7 in the end lead to a successful launch historically. Obviously, we're trying to improve that number. I think I skipped this one for now. Briefly just around capital allocation. So basically, the idea here is that when you have a development project, so we're thinking, okay, how can we achieve a fast CapEx turnaround and thereby a high return on equity number. So basically, this is quite a typical project in terms of cash flows. So a project takes, yes, let's say, 4 to 5 years and costs on average SEK 10 million. Then we're having on average, on average less than 2 years' payback time. So basically, for most products we launched, payback is achieved already in year 1. And then you see basically the accumulated cash flow from a certain product very fast, exceeds the CapEx invested. So that is basically the idea. And then once these SEK 10 million are earned back, we can allocate them somewhere else. And if we can maximize or basically minimize our return on investment period and if we can shorten the project lead time, we can turn around our CapEx as fast as possible. Sustainability, I think it's basically sustainability is very built into the whole model of what we are doing. So some historic problems that the farmers industry has sort of been associated with. You have excessive pricing, you have healthy qualities and you have waste and pollution. So in all these areas, I would say basically that in the model of EQL, we address sustainability. So excessive pricing, I mean, what we are trying to do is to make equal pharmaceuticals accessible at a low price level for everybody. So here is basically while still earning money, of course. So here is basically, I think, excessive pricing and health inequalities is built in, waste and pollution. And we are very, very active when we are selecting our factories that they are supposed to meet with all requirements and so on. Then apart from that, we have selected a couple of the United Nations sustainability goals that we focus on top of this. So that's basically that. So next chapter, we will look into a little bit how the previous 5-year plans have been formulated, how we have delivered versus them and then explain what we aim to achieve in the coming 5 years. So if we're starting there, the first 5-year plan in sort of in modern time was released here in 2016. And then company was only turning over SEK 28 million. That is quite interesting. And here, when Alexander joined and me joined, we were still a small company. So it's a fantastic journey to have been on. Anyhow, in that period, we set out to have a CAGR of 30%. We didn't have a profitability target back then because it felt like we had to focus on the growth first. So the target was 30%, and we delivered 35%. So we could say, yes, that was a successful 5-year period basically. If we're looking at the current 5-year period, then we are instead starting on SEK 96 million as a starting point. And then we set out to have a growth to increase level even further and have a growth of 40%. And we added a profitability target also, which was basically in the end of the period, meaning the last quarter in the last year to have an EBITDA of 25%. And I would say we are currently on track to meet with those targets more or less. Then we all wonder what we want to achieve going forward. So basically, what we have said is that we have growth goal, and we have a profitability goal, again, to keep it simple. So now what we are saying is that out of the -- and now here we are assuming that we're meeting this SEK 368 million. It doesn't mean that I'm promising that we will do that, but we're assuming that here. So that is the net sales for the current full year. And then we are saying that up until 2028, 2029, we want to have an average sales growth of 30%, meaning to take us here to SEK 1 billion plus, which is, I think, to me, it is a very stimulating growth target. We've been used to having 40%. So in one sense, it felt a little to decrease to 30% felt a little -- maybe a little cured. But then on the other hand, if you have SEK 100 million in revenue or if you have SEK 400 million in revenue percentage-wise, it's more difficult to grow. So I think this is a very ambitious target, and it will take us to SEK 1 billion plus, and then we're actually really, really a real company. And here, we have tried to guide a little bit about, okay, where will this growth come from because we are very, very diligent when we are doing these plans. We are doing them bottom-up per SKU, per substance, per country and really building them downwards and up. So it is not the three of us sitting down in Lund dreaming and fantasizing. We are really, really doing it bottom up. So first and the largest contribution to the bridge here between SEK 368 million and the SEK 1 billion plus will be the products that we currently have in the pipeline, meaning everything what you're seeing in the pipeline that is currently 40 products and basically launching them successfully. Secondly, the branded segment, the Mellozzan and the Memprex, growing that sales, launching in new countries, et cetera, et cetera, is what we see now in our crystal ball, the second largest contributor to the plan here. Number three, the Special Generics segment, which is the new segment of products that Alexander is leading. He will take you into more detail of that, but it's basically generics where the interchangeability mechanism is not so central. You can sell on other selling points basically. Alexander will explain a little more. All these three are completely organic sales drivers. And then number four here, M&A, and that we're also connecting to our gearing ratio, which will come later on here. So depending on our gearing ratio, we will be allowed to do a little different amount of M&A, you can say. So this is basically the bridge, and we will build this whole presentation today around this bridge. So I will explain first more the profitability and the gearing targets. And then Alexander and Carl will basically go through these four buckets, you could say, in more detail and try to explain to you what we have in the buckets and how it's going to be achieved. So this is the growth target on a high level, 30% sales growth from SEK 368 million, taking us to SEK 1 billion plus here. Secondly, we have a profitability target. And the target for the period is 25% EBITDA margin. The target is towards the end of the period to stabilize the EBITDA above 25%. We see -- when we are looking at the launches, we see a certain dynamics that the EBITDA might go a little bit below 25% in the middle of the period, and that is because of launch dynamics basically so that if you have a new big product that you're launching with a little lower margin, you can either choose to launch it with a little lower margin or wait 2 years and launch it until you have optimized the margin. And in that case, we are prioritizing the sales growth and building the market. So in such an example, we are basically sacrificing a little margin for maintaining the growth. And that goes basically as a principle or as a rule of thumb, it's important for you to know. We will -- between these targets, we will prioritize sales growth over EBITDA margin provided that EBITDA margin is on a healthy level. So that's a little bit how we -- our philosophy around shareholder value maximization. Okay. So 25% and stabilize above 25% towards the end. So connecting to -- basically to M&As and what we can do on that side, we are saying that we aim to have a leverage ratio below 2.5x. And leverage ratio for us means net debt or net interest-bearing debt divided by adjusted EBITDA or EBITDA once this Medilink is completely in the books. Then we are saying that, okay, temporarily at some point, since we are still building this company, temporarily at some point, we might have to go a little higher in leverage, while -- for example, when we are doing something a little more offensive, a little more aggressive on the BD side. And then we are saying that we remain committed to stay below 4.0 as some kind of peak gearing ratio. And if we are -- if we would be at or around 4.0, our complete focus will be on bringing it down. So when we are driving this ship down in Lund, 2.5 is what we are steering towards, but sometimes we might have to go above 4 for the greater good. So to summarize the target for you, 30% sales growth over the period. It will be absolutely mainly organic growth with acquisitions here and there as sugar on top when it makes sense and if the leverage ratio allows for it. EBITDA margin, we aim for 25%, but to stabilize above towards the end of the period. Our target is to have a leverage ratio below 2.5 and at peak points to never go above 4.0. And now I think my dear colleagues here will take you through the different buckets in the plan in a little more detail.

Hi, everyone. And I'm -- you can hear me, right? Yes. Good. I don't have a voice to shout a lot. So that works fine. As Axel mentioned, I've been with the company since 2016. So when I started, I started as the Business Development Director at EQL to build the pipeline. And my mandate from the owner at that time was to deliver 60 products into the company, and I think we're well underway to do that. This is a bit more detail of what Axel have already mentioned, how we look at the market and where we are. I used to work here. So I'm very familiar with this part of the business when I started in this company. And I always wanted to do this. But in my previous employer, they said that, that's not where the global business is. So let's focus on the global business and keep your ideas to yourself. And I brought the ideas to EQL. And the result is that we're now focusing on niche generics. So I think that's a very good thing. So niche generics they are usually based on really, really old products. The ones of you who have read the latest few quarterly reports, you can see we call them old and goldies. These are products that had patent expiries like 50, sometimes even more years back, but where there aren't really any generics because such an old product to do development and put it on the market when it's really a market only for the Nordics or for a very limited territory is really not worth the effort if you are not focused on it. So that's what we do. So the difference here is where the patent expiry on a big, let's call it, [ Losec ] or something. When that expires, it's a sharp downhill, 90% to 95%, almost down to the cost of goods. You get a market where you have 10 competitors in the market and the only the two, three companies with the lowest cost of goods can really survive. Then you have these products up here. They had a patent expire, the green line they might have had a patent expiry in the mid-1970s. The price might have dropped since then, but it might also have increased because you have inflation and you adjust the price due to inflation. And it just ticks on. And then 30 years later, it shows up on our radar, and we think that -- well, we might do a development on this product because it has in selling since the mid-1950s. There is patients for this product, new physicians, new doctors, they learn to prescribe this from their mentors, and it's being used. So that's what we do. And a good example of that is methane mine, which I will talk more about the Memprex product. That was the first product to deregister methenamine was deregistered in 1952. So you can imagine that it's been on the market long before that, and this is now a growing brand for us. So it's a very -- it's a strange world. And when we enter the market, we usually see a price drop of 20 -- 10%, 20%. It's still a generic we launch. We need to have some form of selling point and the selling point is the price. So looking at now as -- is there like a pointer? Oh, I don't care. I'll do it like this. On the top there, you see pipeline and the arrows. That is the same as you could see in the waterfall chart before. So we're now at the pipeline stage. And those will be on all the slides, so you can keep track of where you are in the growth for the business plan. So here is the launches that we showed in the last quarterly report. This is the current year. So we're supposed to add five products in the next 3 weeks. So that's exciting. But after that, you can see we have a steady supply of new products, new launches added to this, 6 next year, 6 after that and so on and so forth. And you should remember when you see these slides that -- or these add-ons -- it's not that we stop adding new products. The reason why we only have three in '29, '30 is because we haven't added more. So as we sit here now and I stand here and speak with you, we have a team that is busy signing new products that are doing negotiations that are building business cases and I know at least who are watching this video. So yes, very exciting. Of these products in this pipeline, 60% goes into the pharmacy bucket, 25% goes into the Hospital bucket and 20% goes into Branded and other. And other in this case is, of course, the new specialty generics that I will talk more about in a bit. As Axel also mentioned, 70% success rate, I would say that's about average for the industry, but we're not satisfied with that. We would like that to be higher. We're also very keen on failing fast. So once you sign a deal, the more money, the more time and effort you put into it, the more you have to lose if it fails late. And the latest part where it can fail is after launch. So we prefer to fail as quickly as possible if we are to fail at all. But that goes into the 30% here. On average, I would say these products, we have SEK 8 million in average revenue per year. Yes, I think that's it for this slide. This is the launches we've done so far, we've quadrupled the number of products since Axe started more or less. And yes. So as you can imagine, with 70% success rate, we have actually signed more products than this, but some of them have just not panned out. Now we're on the branded, as you can see on the top, we're now left the pipeline. We're on the branded part. We have two brands currently, Mellozzan and Memprex. Mellozzan is a product that we initially thought would go into the pharmacy bucket, but we learned fairly quickly on that this was something that was used in Sweden for children with ADHD, but nowhere else. So this revelation to us was that -- well, what do the children in all the other countries use if they're not using melatonin, what are they using the ADHD children in other countries. So we poked around a bit and learned that they use nothing. They use absolutely nothing. So that means that there is an unmet need and something that we could work on. So in 2021, actually after launching the product, we scrambled really, really quickly to find good B2B partners in other countries, especially the large countries in Europe to get Mellozzan out there to the kids across Europe. And that is underway now. We've launched in Germany. We've launched in Austria. We are about to launch in the U.K. And we've launched in Switzerland, actually. And as Trump would say, it's going really, really well, super, super well. So that's very nice. And yes, eight geographies so far and 70% gross margin. And looking at Memprex, Memprex is the next one. It has an even bigger potential. This is for women with urinary tract infections and not just one, but like up to 5, more than 5 a year of urinary tract infection, what's called recurrent urinary tract infections. So I will go into a bit more detail after the break then to into these markets and what makes them tick and why this is a great opportunity for us. But it's the same case more or less as with Mellozzan. There's an unmet need that we can fulfill. And it's based around these women with recurrent urinary tract infection and the risk of developing resistant bacteria. Yes, this is a bit more meat on the bones, but as already mentioned, it's a large market. Both of these products have very large markets, which is a bit different than our normal niche markets, I would actually say. there's an efficient go-to-market strategy. We're not going ourselves. We don't do this in-house. That was something we discussed back in 2021. Should we try to move into Germany, into France, into Italy, into the other European countries by ourselves? Or should we try to find a local partner? Local partner is much quicker. Remember, we don't have any patents on these products. We only have a brand to build. So being first in the market and to build brand loyalty in the market is the way to protect yourself against competition and to then find -- instead of trying to build it ourselves, to find local partners that are experts in this area, who have the contracts in these countries, who have very, very long-term relationships with key opinion leaders, that is key and a clear value proposition. I think AMR here stands for antimicrobial resistant -- antibiotic microbial resistant, and that is bacteria that are resistant to antibiotics. I think death is a good value proposition to not have to rather avoid death. So I think we have very, very strong value propositions. I will go into this in more detail after the break. Here are some figures on both Mellozzan and Memprex, and this is outside of the Nordics. So we're focusing on the branded part. And the difference here between the branded part and what we call pharmacy part or even the special generics is that in these countries, this is not seen as a generic primarily. since you're doing greenfield. And greenfield means that there is no originator. So you're building the market from scratch. It's not something that's substituted into or something where you switch from an originator brand that the physician have learned all their life and now they try to learn to write something else on the prescription. This is more visiting the doctor, getting information to patients that there -- something exists that fulfills their need. And yes, so here, we launched and then we have the growth here. And here, there was a very big study in 2022 called the [indiscernible] study. So that was what really lifted the opportunity for Memprex. Before that, it was products used in the Nordics. But when this study was made in the U.K., and it was a study made by the University of Nottingham, so it was nothing to do with us or the pharmaceutical industry, which is very good actually because it gives it -- what do you call that, legitimacy. And you can see the growth. This is just in the U.K. The growth from when we launched it in 2019, then you get the [indiscernible] study in mid-2022, then it takes some time, then it goes into guidelines and you have a big difference. Once you're in guidelines, once you get into the establishment, then it really takes off. So our fourth leg to stand on in the pharmaceuticals, we have the tests also, the COVID tests. We're not adding this here because it's -- we don't know if people are taking tests anymore because this year, there's been no COVID epidemic. Everybody has the flu, nobody has COVID. So anyway, Specialty Generics, the difference here is, the difference between pharmacy and specialty generics is that specialty are not interchangeable. So when you come to the pharmacy, the pharmacist will not switch your prescription to something else. They will use this prescription. The difference between Specialty Generics and branded is that it's still a generic. So it's an established market. where there is an originator selling already a major market in a major market. And what we do is take market share from them. While in the branded part, we're building the market with the brand. So that's a big difference. And as you can see, 50 to 55, 45, 70, 60 to 80. So a bit like the branded when it comes to gross margin. And with Specialty Generics, you have a higher product margin profile, and it's not interchangeable. This also means that it's -- the price pressure is less, but also that it takes a bit more time to build the market. So how do you do this? Well, I've hired two people who are watching this on the stream, a Medical Affairs Director and a Commercial Director who I've worked with before on exactly this type of products. And I'm very excited to have them in EQL now since half year back, something like that. And what you do in Specialty Generics is you have larger products compared to our normal pharmacy products. It's between SEK 30 million to SEK 50 million products when it's scaled up. You have a gross margin about 60% to 80%. And how you scale it up is still as a generic. You're still -- your value proposition or your selling point is still price. But the difference here is you have a price that's lower than the originator, but the originator when you start have 100% market share. They're not really willing to lower their price because once you enter the market with your price decrease, they say, yes, okay, but they have no market share. So they are not willing to decrease their price until you reach a certain market share because before that, it costs them more in profit to decrease their price. So they are willing to let you have a certain amount of market share before you actually enter into a price war, so to speak. So the price erosion is less than what you can see in the pharmacy space. So how do you get this without -- how do you do this? Well, you can hire a sales force. That's very expensive. So we prefer to do it through what we call payers in the market. And payers are differs in different markets, but it's almost the same kind of setup. You have different committees that -- and regional councils and expert group who are dedicated to deliver the best value for money in the state budgets. And what they're looking for is how do we get the most money out of the reimbursed bucket of money that you get each year. And then you have key opinion leaders. And these are usually professors or experts in their field. If you have contacts, if you have a good network within these circles, you can do stuff. You get on guidelines. you get key opinion leaders talk well about your products, things happen. But it still it takes time. It's not like going into the pharmacy and get the prescription switched to your product this month, but maybe not next month. It's the break time. So shall we take 10 minutes. [Break]

Okay. So good morning, everyone. I hope you enjoyed the coffee break. My name is Carl Lindgren, and I will take you through the M&A strategy, top line, I should say. Just going back to the development time line here and what Axel and Alexander talked about earlier on, I would like to start with saying that I hope both Axel and Alexander shown that we have had and have a very good and solid underlying business with both very nice organic growth as well as profitability looking back to previous 5 years plan as well as the plans that we have going forward. So why am I saying this? Well, first, because we, of course, want to continue that growth in the next 5 years plan. That's the underlying solid business that we had. And then also to say that we are not a buy-and-build case as such. So we see -- and I think that Axel already mentioned that, we see more on M&A as a little bit of icing on the cake, you could say. But then as we do have a platform with all the functions needed to run a pharmaceutical business, we also see opportunities to, of course, add on acquired assets to that when they make sense to do so. And of course, what's the reason for doing that? We show this development plan earlier on this morning, where it takes us between 3 to 5 years to take forward a new niche generics. And this, I should say, is quite short time, of course, if you compare to traditional pharma R&D companies, which add on much more time. I think it takes like 10 to 12 years to take forward a new original pharmaceutical. So our model, we have shorter development times within generics. And then Axel and Alexander have said also that we have a higher success rate as well. However, if we can cut the time line and buy an asset that fits us, then, of course, we get faster to the market and can accelerate our growth and diversify our product portfolio even more. So that's, of course, the most obvious reason to cut the time line to launching and having products on the market. So what types of acquisitions do we look at? I mean we look at both company as well as pure asset acquisitions and the rationale between them can vary a little bit. I mean, of course, companies, then we can get access to new products and technologies and also enter new technologies with an existing team in place knowing the market. So this makes a lot of sense to do, for example, in connection to geographical expansions. But also, we could consider it further on to do it in the Nordics as well if it's adjacent technology, so to say, that is a little bit new to our existing business. And then the asset acquisitions, of course, here, it makes more sense to buy products and then just add on to our existing platform from a scale of economics perspective, so very easily. And we have just recently, as you know, completed an acquisition of a product portfolio for Medilink, which is an example of that, which I will get back to. So what are we then looking for? I mean, we are a relatively young and growing company still. And therefore, of course, we would like to continue to grow within the existing business areas that has been shown here earlier on. So they should be a very nice and high strategic fit to those or complementary to our already existing portfolio. Of course, we are always looking for synergies. That could be both on the cost side or on the top lines, of course. And we also -- I should say, we -- when we screen and look for assets to acquire, we very much look for stable assets with a stable financial performance and ideally with accretive margin profiles to our existing. So we are not looking at turnaround cases demanding a lot of work and investments to change them to fit. So very top line. That's what we are looking for. And then on the right side of the slide, you can see our geographical focus or maybe you say in focus when you see all of Europe here. But as we have said and shown earlier on in this morning, we have a strong platform in the Nordics, and we have an ambition then to, of course, grow further in the Nordics, but then also to expand geographically in Europe with a focus in Europe. And I mean, there are two ways to do this. I mean, one way is to be very focused and selective and pick one country and take it one country at a time. We maybe not agnostic, but we are at least more opportunistic in which countries we look at. I mean, because it's both a combination of the assets as well as the suitability of the geography. And so we don't want to exclude any possibilities to enter certain markets. It's rather the combination of the asset as well as the geography. So -- and then I could, of course, say that there are certain geographies that are more suitable and similar to the Nordics where we are present in. For example, you could say U.K., Netherlands and so on and so forth. But it's not that we have locked in on a certain country, so to say. Of course, acquiring an asset, it's only half of the story to sign the deal and close the deal. We -- the rest is, of course, to secure that we have a good and seamless integration to secure the value of the asset. And this slide I've just included to highlight that we take the integration of the acquired assets as serious as we do for the acquisition in itself. And our acquisition mantra that we work along is to take control of the asset and then secondly, optimize the asset and then a little bit further on, expand it. Very basic, but it's very often the basic things that are the things that you trip on. And if you work with very creative marketing teams, they might run to the expansion phase too early. So just to say that we take this very serious in this step-wise approach. Of course, when we sign deals, we normally want to secure a long transition time. So we are not stressed in the takeover process. I mean things can happen with suppliers and regulatory time lines. So it's good to secure a long transfer time. Even so, we still want to take over as fast as possible. because, I mean, selling parts, they relatively quick loses interest in the assets. And then it's better to take it over as soon as possible. So that's what we are working with. I should also say that I like to work with the same. Now EQL is not a big company from an FTE perspective, but I like to -- even so the people that have been involved in the due diligence phase, I like to keep them on into the integration phase because they have a learning curve, which then you don't need to start from scratch if you put in a new person because during the due diligence, they understand -- get an understanding of the assets that can be utilized. later on. And then, of course, next step is the kind of the easy quick wins to optimize the assets. I mean that could be price increases, making sure that you have the same wholesalers from simplicity and taking out complexity via doing this. And then the last step is then the expansion where you look at a little bit more longer-term upsides, for example, doing tech transfer, moving a product from one supplier to another supplier to get better capacity, better delivery service level and/or taking down the COGS, taking also forward new strength or new formulations. I'll not go in so much into the different value-creating levers. I think we touched upon them. But the principle is that if we buy an EBITDA of an asset, then, of course, we are not satisfied with just having that. We work with different ways of improving it from what I've said, cost optimization, price increases, taking out -- using scalable economics within our administrative structure, accessing new geographical territories and so on and so forth. I just wanted to maybe have the most recent acquisition from Medilink as a case example on the rationale and what we have done for it this far. I should say this is an acquisition which we very recently signed. I mean, we signed it 10th of December, and then we closed it last of January this year. So we are just in the early days of integrating the asset. But what is it then? Well, it's a pure asset deal from a Danish pharmaceutical company, and we paid SEK 185 million for it, which then implies an EV gross profit multiple of 5.1 and an EV to EBITDA multiple of 6.6x based on LTM October figures, which you can see down here. Sales with SEK 51 million and gross profit of SEK 36 million. So what are the products? It's four products. It's Buronil an antipsychotic and Folimet, which is folic acid used to treat anemia, Hydromed, which is diuretic for the treatment of high blood pressure and then Marplan, which is an antidepressant. So you could see that they span over different therapeutic areas. So it fits with our model of being a little bit agnostic in which therapeutic areas we look into. Now it says post acquisitions. We are in the phase of integrating it, and we believe that it -- in our model, it's very easy, as I said earlier on, to just add on new products within our existing territory, the Nordics and then we will utilize the existing distributors and marketing partners outside of the Nordics. You can see the geographical split here in the top bottom right corner, where we also -- it fits very nicely with our ambition of growing a little bit outside of the Nordics with 53% coming from Central Europe and then a little bit of a scratching in the Southern Europe as well. So I should say it's very, very neat to just add it on to our existing platform in the Nordics and then taking over the distributional partners that Medilink already has. So a seamless transition from that perspective. So looking at the rationale, I think it's evident that this portfolio is very complementary to our products, a little bit different to pure niche generics because these are original branded products, but they are niche in nature, and they are also off patent. We have strong synergies. I think that's alluded with the geographies, adding it to our existing platform and then getting distributors for the expansion into Europe, just taking them over from Medilink. I think also this graph here shows that we have stable -- the products are stable with a nice -- actually stable to slightly increasing. You can see the -- I don't know this green lime green, you can see the sales going from SEK 43 million to SEK 55 million and then the gross profit from SEK 31 million to SEK 36 million LTM October '24, '25. So stable to slightly increasing. And what's even better is the gross margins in the acquired portfolio, which is just around 70%, just north of 70% here. So very accretive to add that to our existing business. So overall, we are very happy with this acquisition, and we are in the integration phase now. This is my last slide that I have in my presentation, and this is just to highlight that the pharmaceutical market is quite dynamic and as such, then provides numerous of acquisitions opportunities. Not all are for EQL, but -- but I think it's evident that at least as it is dynamic that the opportunities present itself. And combining the market being dynamic with a lot of opportunities and EQL being a bit selective, I think we have good chances of doing acquisitions with a nice strategic fit and at good valuation terms as well. Maybe just two short comments of why the market is dynamic. I mean you can see that we have big traditional pharmaceutical companies that are focused on taking forward new patented treatments. So when patents expire, they have less interest in that and want to focus on new treatments. So then they divest due to that. And then, of course, you have both from big pharma, R&D pharma as well as generic pharma, they also look into streamlining and optimizing their portfolio. So they divest the tail-end brands, and they also refocus on certain areas to create scale of economics and divest the things that fall outside of that due to that. Then you have like another mega trend that we have seen, not at least within my previous company that earlier on, many companies played both in prescription pharmaceuticals as well as in the consumer health care OTC. Now the trend is more that they split out and focus on either prescription or consumer health care. So there are also opportunities coming out of that. So maybe if I just kind of sum up my presentation, I think it's important to remember that we are not a buy-and-build case, but we are open to do acquisition when they make sense and have a strategic fit to our business. And we also take the integration seriously and plan for that already during the due diligence phase. And we believe that there are plenty of opportunities there. So this combination, we think, is a good basis to do good acquisitions going forward when it's right for us. I think it's back to you, Alexander.

Thank you. I think we are ahead of time, which is unlucky for you guys because now I will bore you all to tears with these two brands in very, very, very high detail. No, just kidding. This is actually my favorite ad that we did for Mellozzan when we launched it. The children's feet on the pillow. I thought that was very neat. -- said a bit about these kinds of children and the problems you have as a parent. So starting with Mellozzan, the deep dive, and it goes from really high level. The EU has a population of 750 million. Of those, roughly 90 million are below 18 years of old age. Of those, 90 million, 4.5 million, give or take, have ADHD with different kinds -- how severe it is. And also these children often have multiple other problems. Some are bipolar, some have autism spectrum as well. So it's not an easy symptoms to have or syndrome to have, not for the child and not for the parents and not for the siblings. So of these 4.5 million, roughly 3.8 million have problems with insomnia. And the insomnia is part of the fact that these children with ADHD have what you call a skewed circadian rhythm. So since we lived in caves, we have this tendency to fall asleep once the sun goes down. And you get sleepy because there's less light, you get sleepy. Everybody says, don't look at the screen if you have trouble getting to sleep. That's because of the light, not because [indiscernible] is such an interesting site, but usually just because of the light, the light makes your melatonin levels drop. And for these children, when you have a peak in melatonin, when the sun goes down, let's say, sun goes down at 7 if you're living around the equator, then your melatonin hits like 2 hours later, something like that. But for children with ADHD, it's delayed until midnight roughly. And this is a problem because the rest of the family don't have this delay. And the rest of the world actually needs to go up in the morning and go to school, which includes these kids, which don't want to go up in the morning, they want to sleep like 3 hours extra. This is fine in the summer because then you have -- then you're on summer break. And usually, what we see is a decrease in our sales of Mellozzan in the summer because the parents then say, let's skip the medication, let them sleep, let them go to bed when they want and let them sleep. So that's a clear indication that this is actually something that is in effect. On top of that, these children, many of them, or I would say most of them get medication in the form of central stimulants. This is amphetamine in very low dose. So it's actually to pick up their energy levels. They seem like they have a lot of energy, but they're actually low energy, which makes them cranky and have a hard time to concentrate just as you do, if you travel a lot and are on a low level of energy, it can be hard to concentrate. They have that times 10. So you get central stimulants in order to heighten your ability to concentrate. The negative side effect, the most common negative side effect of central stimulants is that you get insomnia from them because they pick you up, right? So if you take central stimulants, they have a tendency to add on even more insomnia to you. So therefore, melatonin is something that these kids need. You all have melatonin. We secrete melatonin in our bodies. But it's like you have a trigger effect. So you have melatonin down here -- then your rhythm kicks in and you pass this trigger. This is what happens when you fully sleep at the wheel. It seems like, oh, you're a bit tired, a bit tired. You're like, off the road and off in your head. And that's also when you line bed and trying to read a book and you notice the book hitting you in the forehead, that's because you triggered -- you pass that trigger. So what melatonin does, even if you take 5 milligram, which is the largest current strength, it just tops you up. It's like when you're just below, it tops you up, so you get past that trigger. It's not like you're flooding the brain with melatonin. It's not like that. It have a low passage in the brain barrier between the blood and the brain. But it gives you that bit of an extra kick or not kick, done kick. So that's that. And also, I would say that this is our main indication, but we don't have hard facts, but it's obvious that it's used a lot by people who don't have ADHD and who are not children and who are not children with ADHD, but are children with other diseases with insomnia. So the fact that we have a children age indication means that you get some off-label prescription because other children with bipolar disorder or other diseases also can have trouble falling asleep and then they get Mellozzan. So that's some details. It's a very safe drug, of course. And that's -- the reason for that is because this is a hormone that your body produces. So you're not adding something strange to the body. You're adding more of the same. So that's why the side effect is -- I guess what the most common side effect is, you feel it full sleep. That's actually the most common side effect, sleepiness. So -- the value add, the top one, quicker onset of action is compared to our competitors. No product that we have tested so far has such a quick dissolution as our own Mellozzan have. In 10 minutes, 90% of the tablet is dissolved. When you test for dissolution, you put the tablet and see how fast it dissolves in something that approximates the stomach. And the faster it dissolves, the faster it can passage be absorbed up into the intestine and from there -- from the intestine to the bloodstream and from there to have some effect. And of course, if you have a hyperactive child, the quicker onset, the better. So even though our text says it takes like half an hour to an hour before this kicks in, it can go quicker. It very much depends on the individual, but the faster, the better from the parents perspective because, yes, anybody who has kids and want to put them to bed, you know that this is a fact of life. We have many strengths. We have from 0.5 to 5 milligrams, 0.5 and 1 milligram is not currently sold in Sweden, but it's there in the dossier. So for our B2B customers, it's available. And that is more strength than most other companies can provide. We have a comprehensive product offer. We have both tablets and an oral solution. And we now launched the oral solution in Germany just now in January. So from our B2B customers' perspective, this is very important. They want to have a product where they have -- they can add new what's called line extensions to keep the interest in their customers high. So if you add new products with -- you launch tablets, then you launch the oral solution, then you can keep the interest high for your product, and you can add new patients. Some patients don't want to take tablets, then you have the oral solution. So it's like that. And it's price efficient compared to what? Yes, that's the question. It's price efficient compared to the way you discuss this often is how many [indiscernible], I don't know the English word for it, but staying at home with children. How much of this do you have for parents with these children? Can that be lowered? Yes, it can. It can be lowered by the child sleeping more and better and getting off to school and not staying home. So there's a big difference. And then you can see the sales that we've had, and we've added -- it says Germany, but it's actually Germany and Austria. It's just that Germany is so much bigger than Austria. So let's call it Germany. And we've also launched in Norway and Denmark. And the reason why you see Sales last year in Norway and Denmark, but not this year is because we have pretty high batch sizes because we want to deliver this into large markets, and we know that this product will grow. That means that we want to make it in big buckets at the time that decreases the cost of each tablet. And that means that when you launch into a market where you build up the volumes over time, the first delivery you ship can last for more than a year. And this is our sales. So what we have shipped. So that's Mellozzan in a bit more detail. Going then to Memprex. And Memprex for us is a bit earlier in terms of how far we've gotten with our B2B customers. So even though we've had it in the U.K. for -- since 2019, the fact that this [indiscernible] study came in 2022 was like a godsend for us because then we could approach more companies and point to this study and say, look, what we can prove is that methenamine, which is not an antibiotic, but an antiseptic. What happens is you have methenamine hippurate when it gets absorbed into the plasma, then goes through the kidney out in the urine to be eliminated from the body in the urine, it transforms into formaldehyde. And formaldehyde for those who are know is something you used to mummify people back in Egypt. It's not that concentrated, but it's still something very poisonous to bacteria. It creates an environment in the urine where bacteria cannot prosper, which means that it's an environment where they don't grow that much that they would otherwise. It's not indicated for acute UTIs. Acute UTIs are when you have a urinary tract infection where you peace blood and it really hurts there you need antibiotics because you need to kill off a lot of bacteria. What this is used for is prophylactic treatment. So you take this every year, year around, every day, year around, maybe for the rest of your life, which is fairly common actually to take this for the rest of your life, if you are a person who suffers from recurrent UTI, which means you have more than 5 urinary tract infections per year, then you can take this to lower that significantly below 1 urinary tract infection per year. And so far, in all countries, except in the Nordics and the U.K., so far, women with recurrent UTI have been treated long term with antibiotics. And now there's a big fear in the world that long-term treatment with antibiotics where you take antibiotics day after day, after day for months on end, means that there's a higher risk that you build up resistant bacteria. And resistant bacteria is -- the fear is that resistant bacteria will be the most common cause of death in 25 years just as it was in the 1800s before we got antibiotics. And you go back to how it used to be with a high degree of child mortality and lower mortality. How long you live simply put because you get that infection and you can't get rid of it and it creates complications and then you drop off in pneumonia or, in this case, where the kidney that gives up. So this is our most selling argument. So what we can do, we can say that this product Memprex is as good as long-term use of antibiotics in prophylactic treatment of UTI. So these women they can be treated with Memprex instead of using antibiotics. And through that, you decrease the risk of developing resistant bacteria. And this is super, super important to health care authorities, not only in Sweden, Norway and U.K., but across the world. And we can see now the interest of this product has really taken off. We get a lot of propositions to license our products in different parts of the world. So I got 4 this week alone. And we will, of course, try to build on this as much as we can. Is there another picture? Yes. Not only because it's good for our sales and of course, then good for the stock price, but also because it's a good thing to decrease bacteria resistance. And limit this as much as we can -- can help with. This product was -- it's an old, old product. And the reason why we focus a lot now in Europe is because when it comes to these kinds of products we have -- when you have something launched in the country in the EU, it's much easier to launch it in another country. That's the regulatory pathway, you can say. So it's quicker for us to just launch in Europe because we can say, it's approved in the Nordics and the U.K. So it should be approved in your country. It's much harder to go to the U.S. or to Brazil or any other country and say, it's approved in Sweden, and they're saying, okay, well, you have to do a full application anyway, and it will take 3 years. So it's -- that's why we focus a lot on Europe. But I think in the long term, this is such a big thing, a big deal that we will probably try to push it outside of Europe as well long term, not in this 5-year plan. So the value proposition in this case is, as I mentioned, it's regulatory approved already. It's easy -- not easy in brackets to get it approved in other countries. It reduces antibiotic resistance. This is the most important thing. You have flexible dosing. Yes. It's a thing that in some countries, you can only prescribe 1 month of a prescription drug for this product, this is taken twice per day. That's 60 tablets. So in the U.K., we have a 60 pack. In Sweden, Norway, we saw a little 100 pack. If we have a 3-month package, it would be 180. So to be able to supply this is a good benefit. And the price efficiency compared to having people hospitalized, it's very price efficient. And of course, it's more expensive than antibiotics because antibiotics are huge -- are used for a lot of different diseases. So you can use the same antibiotic that you use for a urinary tract infection, as you can do for other symptoms, which means that you get scale. So our product is more expensive. But so far, every head of authority is willing to pay extra for the reimbursement because you get the bacterial resistant benefit that. And that's it.

Thank you very much, Alexander, and Carl, I hope and I think it was exciting for everybody to hear in a little more detail about this branded products and these opportunities and also around M&A strategy, then I have the chance to normally talk about. I see that we are a little ahead of time. I think nobody will have anything against that. So before we open up for questions and so on, I would like to make just a couple of concluding remarks here. So what we see now ahead of us having released this new plan and having worked with it, obviously, for some time is a couple of different, you could say, components or buckets of success where we need to really be focused, number one, continue to develop and invest in the product portfolio, of course. We are still seeing opportunities in our home market in the Nordics, every time we look around, we're finding new exciting things under the stones that we are turning. But sooner or later, that is going to end, but we don't see that. We don't really see that at this point. So we will remain still highly focused on the Nordics and Niche generics. Number two, obviously, we've seen here from Alexander's presentation that we think that there is a fundamentally really strong potential in Mellozzan and Memprex that we need to take responsibility for and need to address and we are doing that together with our partners in the different geographies. We are working very closely with these partners to understand how the sales are going why it's going like it's going, what is working well, what can be improved and create learning between the partners. We are constantly working on trying to build on new partners in new geographies, we're having a strong belief in the theory of sort of the shotgun approach here, like trying to put a lot of seeds in the ground and maybe it will not be a blockbuster in every geography, but if we are trying in a lot of geographies that for certain geographies that it will really be super successful. I think it's clear that there is a strong business rationale behind the products. Expand into new business verticals. So primarily here is the special generics that I've talked about it on a very, very high and sort of fluffy level before. Today, Alexander described it in a little more detail how we are thinking there, that is basically done in the first step to the sort of background is to take some business area, which is really adjacent to Niche generics, but not identical and build it first in our home market. So that's the point with that. And free to ask Alexander more questions about that during the Q&A here. Of course, the cost base. So I mean, we have -- we are coming from a period where we are really, really focusing on growth. And then we have started to focus more and more on EBITDA. On top of that, we have had challenges with the gross margin due to this freight situation, what we're having. So then we were thinking, okay, how can we try to reach this target of 25% while we are sort of suffering 3% to 5% on the gross margin. So what we tried to do already, already won a little bit more than a year back was to really start to think about how we can deliver the same or even more with less. So we have really managed to drive down our OpEx percentage of sales quite significantly here. Just a few years back, OpEx was 35% of sales. Now OpEx is like 21% of sales, and I fundamentally believe that we can bring it down even further. So that is obviously something that will remain important. And also another way to express that is to really utilize the platform and have the scalability in this model. Finally, and that is something that we have not talked so much about regarding the 5-year plan because I don't believe that it will have so much effect in the coming 4 years. The 5-year plan is -- you could argue that it's a 4-year plan, but because it starts with 1 measure point, we call it a 5-year plan, just if there is any confusion around that but it is organic geographical expansion. So coming back to what I said before, that sooner or later, the amount of Niche generics that we find in the Nordics is going to maybe not go to 0, but significantly reduce. And we want to -- obviously, we want to deliver on this 5-year plan that we are publishing now but we want to then in 2029, we want to be able to stand here again and paint up a really nice picture for the coming 5 years, we want to keep growing. And we believe then that to be able to do that we need to already now start thinking about finding Niche generics outside of the Nordics. So this year, it is our target to start recruiting personnel in different countries in Europe, like Carl explained before, primarily in countries that resemble our own geographies the most in terms of price mechanisms and so on. So this will be something that will be very, very important that we work with in the coming 5 years, but will not necessarily connect with delivering on the 5-year targets. I mean it will it's something it will rather be a cost, but it will still be really important. And finally here, yes, it's basically just saying again that -- I mean, today, we are focusing on the coming 5-year [indiscernible] here, where we want to grow 30%, still be really profitable. But in parallel to this, we are thinking long ahead. So we will not sort of stop adding products to the pipeline just because that will optimize COGS and help us to deliver on this or something like that. We have still the eyes on the horizon. So before we open up for questions here, I would just like to take a chance to thank obviously, thank Carnegie for -- that we can be here today. I would like to really thank Robert Rohlén in ABG Sundal Collier. If I'm allowed to mention them here in this [ holy halls ] for helping us with this material that, at least in my opinion, is a really, really good material. So then I think we will have some Q&A and that will be moderated by Arvid, who is the Carnegie analyst for EQL.

Very well. Thank you very much, Axel. And we do have a few questions lined up for you. I will do the best to read them out. My voice is a little bit shaky, but hopefully, it lasts for another 20 minutes. Will we be joined by the rest of the management team?

Yes, exactly. So we will -- depending on the nature of the question, we will sort of decide internally who answers.

Okay. Fair enough. But perhaps I can kick off the discussion then a little bit. And this would then perhaps be a question in towards you, Axel, but also Carl. So I think investors are probably glad to see in your roughly 30% growth target that this mainly relies on organic growth, but you are baking in a little bit of BD activity as well. So can you just give us a little bit of more transparency there? What type of acquisitions are you baking in? And what does the supply look like when it comes to these types of assets?

Okay. So I can talk a little bit about the assumptions we made in the plan and then we'll hand over to Carl to talk about the supply of the assets and you're basically referring to the deal flow of it. Yes. Okay. Yes. So when we did the plan, obviously, so when you're building a plan like this, in the way that we are doing it. We are doing it really on the matter and screw level for existing product really calculating. So then when it comes to M&A, it's a little bit difficult, but so what we were doing then was that we assumed that we are going to do M&A in this period, okay? And then we're looking a little bit historically when we've done sort of license deals and asset acquisitions. So if we are to stay with our historical statistics, it means that we would do roughly 2 deals in this period. Then we also looked at roughly what the leverage ratio will look like with a target to come below 2.5%, but with a sort of, let's say, mandate to go up to about 4% in the short run. So in that sense, we thought, okay, this will allow us to do approximately 2 deals in this period. So let's say, 2 deals of a total top line of SEK 150 million to SEK 200 million, something like this. And then what we did to get the EBITDA, we estimate and we try to be conservative. So even though, for example, the Medilink acquisition had a gross margin profile of 70%, we made assumption of that this hypothetical 2 deals of SEK 150 million to SEK 200 million, we'll have a gross margin profile of around 50%, just not disappoint on the downside. So this is quite transparently how we did the M&A assumptions in the plan. Obviously, I mean, you can -- I understand that it can be criticized and that it can be viewed differently. But that's how we did it. Then I think I hand over to you, Carl, when it comes to sort of the deal flow and how that looks like.

Okay. No, but I mean it's not that we have like one selected way of doing it. I mean we both -- I myself have been working like 30 years. Believe it or not, in the pharma industry and have a lot of contact. Likewise, Alexander and others within the company. So we have our eyes and ears out within the organization, first and foremost. And then as we are not doing deals like every day or every quarter, I mean, it's a little bit of a balancing and not hunting when you're not able to maybe shoot the animal, so to say, immediately. I mean, it's -- it's more of a scouting and seeing what's out there, and we do that internally. But also, of course, together with brokers and banks who comes and presents opportunities to us, which is the normal case. And then, of course, just by doing a couple of M&As. We also established our sales in the market for future M&As as well. So I can just say that by having done the Medilink there recently, we noticed that more and more proactively contact us and present their cases. So I would say those are the 3, and it's not that we play Yes, I think the best 1 is probably if we are aware and really like assets very selected, I mean -- but there might be things that we miss, which bankers or companies themselves can bring into ourselves. If that was an answer to your question.

Yes, sure. But perhaps we can expand on that a little bit. So the Medilink acquisitions, what lessons can we learn from sort of how it looked like from end to end? Was that a fairly lengthy process where you've been approaching this company for some time ago? Or -- is it a process where it happens more of an opportunistic nature where things can happen really fast essentially.

I've been aware of the company, as actually the owner of the company is a former colleague of mine in Lundbeck. But I mean -- so we have not like nurtured acquisition on a long time. It was actually a broker coming with it to us, and then we did the deal quite fast actually. I mean it's all about relations and connections and trust in that process not bragging about myself. And but I think my previous relation with the owner of the company played an important role there as we have. But it was a very short process. It came up they were not open to sell in the beginning, but then we talked and then they realized that they could divest and then spend the money on other opportunities instead of continuing for a long term, so to say. And actually, I should say then, it started as a company acquisitions in the beginning. But then when we scratched the surface and saw that they had some distribution products as well with lower margins and less interest from our from our side. Then we discussed and said, why you can keep those if you're on, and they actually, oh, that's a good idea. So they thought that was good, and we thought it was good that we didn't need to take that on.

So that I really agree with Carl. Just adding one thing to the learnings, I think, is that we have spoken for a long time about hypothetical acquisition, acquisitions, and we have spoken about sort of hypothetical bond financing because on the paper, EQL looks like a really good bond candidate. And in that discussion, we have sort of assumed that bond placement would be successful. For me, I think that the actual bond process, which we did with ABG and me and Carl met with so many investors and the bond was significantly overprescribed, and we managed to get an interest spread to STIBOR, which was very, very low. One of the best, if I may be a little frumpish, one of the best bonds placed in the high-yield first-time issuer space in like 18 months. And I think now looking on how the bond is trading it is trading on. So it was placed on 400 basis points, and it's trading on something like 365 now. And just coming back to CHEPLAPHARM, which we're sometimes talking about, they are having like 600 basis points on their 5-year -- sorry, on their 3-year bond and like 800 basis points on their lower bond. So meaning that the bond investors seeing significantly lower risk with our model and how we are working. It was also really, I think we learned so much from that process. Secondly, I would also just like to add connecting to the deal flow. I agree completely with call now that we've done this deal. We're seeing so much more interest. But I think already before that, we were seeing an increase in deal flow I think it depends on the fact that interest rates are coming down or we're coming from a period now where interest rates are coming down, not going to make any forecast for the future. But we are in a climate -- we're coming from high interest climate down to low interest climate. Also on a macro level, at least from -- during the autumn, the U.S. soft landing scenario is looking like more and more probable at least looking with the autumn glasses, and I'm not really sure what's going on. But I think that has also led to the fact that there are more companies out there for sale. And also since many of these deals are debt financed, it's much easier to have buyer and cellular coming together when the interest rates are coming down.

We have a few questions that came in online, but I think we will turn to the audience first and see if we have any questions in the room. I have one over. If you can read it out, and I'll try to read it out and I'll to repeat it.

[indiscernible]

Yes. So I think the question was on the specialty generics and the predictability of revenue forecasting. Do you want to add something to that?

I hand that to our special generics guru.

Thank you. Yes. Well, it's a good question. Thank you. It's -- that's the hard part, I would say. Luckily for me, I have a team with super much experience in this. So together, we look to definitely define like a frame where we do have worst case, best case and a base case. So that's how we do it. And what you put in the plan is usually the base case, not the worst case. Because if you put in the worst case, in all likelihood, we have an investment committee that looks in every project. If we are going to invest or not in it, they would turn that down if you always present the worst case. And on the other hand, if you always present the best case, you're bound for disappointment in the end. So base case it is.

So can I have a follow-up? [indiscernible] What do you expect the sort of reaching the run rate number is sense. [indiscernible]

3 years.

3 years to reach the run rate...

From North. Yes.

Okay. Well do we have any other questions? I think we have 1 over here.

The 70% success rate for generics, how much of that do you control? And how much is without your control in CMDOs? The second question is regarding the free trade agreement between Europe and India, that is going to finalize [indiscernible] Could that affect imports from India for the [ Q1 ]? And could acquisitions be starting for specialty pharma? [indiscernible]

Okay. Yes. So we'll start with the first one, and I'll probably ask you to repeat. So the historically, 70% success rate, as we look forward, how much can you influence that? And what is it dependent on essentially?

Okay. So I can start with that one, and then we see if anybody wants to add something. But if we take the main reasons for failure. So if we go to the 30% that is stable, I would say that the main reasons for failure is that, first of all, there is some technical challenge in the project that cannot be overcome. That is, for example, we are not able to make a formulation that is stable in the sense that the amount of API in the tablet is stable over time. So there is some technical obstacle that we cannot overcome. And that is, let's say, one of the reasons. Another reason that it fails in development is that we cannot prove that it is equal to the originator. So that is the sort of next needles eye. And that can be also connected to the formulation that we cannot formulate the tablet in such a way that it really imitates the profile of the originator. Then we have -- for example, in some cases, where we have a dossier. So basically, we are ready with the development. We submit to authorities. Then for some reason, authorities come up with questions we have not anticipated. We always do our best to try to answer them. And in most cases, we successfully do so. But it happens that they have come up with something that we have not thought about, and we are not able to answer their question in a successful way and the submission is reacted. Their job is to make sure that the pharmaceutical is efficious and safe. That's what they look at. So that we're simply not getting [ the MA ]. The final reason, I would say, or not final, but final reason, chronological for failure is that we're not getting into changeability. So for our historic model, interchangeability is super important because there is no sales pitch for the Niche generic products. The point is to get interchangeability so that we have switched out on pharmacy level. And to get that, you need to prove certain things. And from time to time, it happens that we don't get the interchangeability. Then I would also like to say that throughout the process, it can be that the commercials are changing for example, some new competitor coming, some change in the price, something like this that makes us actively, let's say, divest that project. That's, I would say, the main things.

And then I think the second question was on the ongoing negotiations for the EU free trade agreements with India and the impact for EQL? Would you like to comment on that?

Yes. So basically, I don't see direct effects on that, but we need to come back to that a little later. I don't want to speculate. It's better we see when it's done and then we see what impact it has on what the industry.

Sorry, would you just repeat your last question?

[indiscernible]

Well, I think as we have said now, it is within our business parameter. So we believe that -- I mean, we have also looked at some possibilities, particularly asset acquisitions within that area as well as a complement of taking it forward our own. So yes.

Okay. Any further questions?

Can I just clarify one thing there. So in the bridge, we showed where we have one bucket that is special generics, -- those are that is bottom up. So that is not like us fantasizing. It is actual products that we organically have found. But I agree with Carl that it could be a starting point similarly to that how, for example, EQL Europe could be, let's say, facilitated by a platform acquisition.

I think we have 1 more question in the corner.

[indiscernible]

So the question was with you trending close to your margin targets currently. What is it on the cost side that could drive the margin down temporarily and hamper further margin expansion?

Yes. No, it is always difficult with transparently sharing the targets like this and deciding on what level to put them. So I mean, if we have seen -- if we are to be completely honest, so yes, you are right. Right now, we are on a pro forma level, we are very close to our target. But I mean it has been -- we haven't really been close to 25% to be completely honest. So it's not that we can say, oh, we are there. It's like, okay, we just made it there. So I think that 25% it's a good margin level for a company like us. And it's compared to generic industries, a very, very high margin. What we have seen historically is that our OpEx has grown. It has grown not astronomically more than we have anticipated, but it has always grown more than we have anticipated to be quite frank. So this means that if we now are to let's say, aggressively and proactively deliver on this plan. We need to make what I call OpEx investments. So they are not formally CapEx, but they are not maybe directly revenue generating either. For example, during this year, we are going to sign extremely many new projects compared to historical. We need to take responsibility for those products and build bigger project teams. This is going to add cost simply for the reason that we don't want to have delays. Also, what I said before on that I'm seeing some tendency when I'm looking in the plan, I'm seeing some tendency that EBITDA might drop somewhat in the middle of the period due to large launches of products, which will not be margin optimized at launch. So that is something that could drive down EBITDA a little bit as well. And also remember, Carl, that we have a target towards the end of the period to stabilize EBITDA over 25%. And now we're saying towards the end. That is -- I mean, to be honest, that is a little fluffy, right? And we're saying over 25%, to be honest, that is also a little fluffy. So I think that is where the -- that is why the ambition on the EBITDA side.

[indiscernible]

So excluding M&A, how much of sales do you intend to reinvest in development?

So we're coming from a period where we have invested typically -- we've had a CapEx rate of maybe SEK 20 million, SEK 25 million. So now recently more like SEK 30 million, SEK 35 million. I see a significant increase in CapEx going forward. I see with everything that is in the pipeline that we could come up to a level of SEK 80 million, SEK 100 million quite soon. And you could argue differently on this. I mean EQL, we have never made out ourselves to be a dividend case. And that's not what we want to be. That's not who we are. So the way I view it is just that as long as we can reinvest our profits into exciting projects where we know what we are doing, that is something positive. But given now all the leads that we have found and everything we want to sign I would see a stepwise increase in CapEx. That is also needed to be able to deliver on this. We need to sign a little more to be able to deliver on this and also to be able to have a solid story after 2029. Also remember that we -- with the bond, we took in a little more funds than we needed for the actual acquisition that can also be used for organic growth if we feel really secure that it's a good project. That is something that in the short run can take leverage ratio up because we are spending cash in CapEx, where the profit will come in 3, 4 years. But I'm prepared to do that for the sake of the long run.

One more question over here.

[indiscernible]

Okay. So the first question was on freight prices with them coming down significantly, how does that impact EQL? When do we start to see that in the transfer into the P&L? And the second question was on Medilink and the potential to increase margins over the long term. Is that fair? I understood his question on Medilink as what margins will be in EQL type of P&L with where we include depreciation and amortization.

Okay. So if we start with the freight. Yes, we are also following what's going on here. And so when it comes to transportation, most of our supply from India is CIF incoterm meaning that cost insurance and freight is included in the price. This means that we don't have like a container spot price traders sitting in EQL and doing this. It means we're basically following this sort of second hand, it's not in our direct control, it's indirect control. So our suppliers are working with the shippers and trying to optimize this. I am hearing and seeing this. But also what I'm hearing and seeing from our suppliers is that the freight companies they are using are still not taking the Suez Canal route because as you've seen, I mean, a macroeconomic level now, things are changing every day. So what it will be required for us to structurally be able to go through the Suez Canal again and then bring down freight costs. It's a more sort of solid piece situation in Gaza because that is when these Houthis rebels will stop their solid direct attacks. Then there will be a time lag until our gross margins go up because a lot of the stock that we have right now is booked into stock in higher in the higher COGS basically. And also one more fact while we are losing margin on this situation is because the whole international logistics network is imbalance because of this -- because of that the routes are changing. You're having too many ships waiting in the big harbors, Barcelona, Rotterdam, et cetera, waiting to offload, meaning you have a deficit of containers in Asia, meaning you have delay in transport basically. Then the second question, I can take that call even if it's Medilink because I've been thinking a little bit about this because as you rightfully state, in the graphs here, we're showing the gross margin of 71%, which is basically a traditional way of doing gross margin, right sales price minus cost. But as you rightfully state, we are in functional P&L, meaning that we also take amortization and depreciation. So I think we -- let's do that exercise briefly together. So we bought the portfolio for SEK 184 million. Let's for simplicity, say, SEK 200 million, and it will make the calculation a little easier. Then we are writing off products or amortizing products over 20 years as a maximum. It's different for different products but these will definitely be 20 years products because they are so long products. If you take 200 and divide by 20, you get 10? I'm sorry. It's okay. It's okay. You get 10, okay. So basically then, if you're taking 10. And the total sales of the portfolio is 51%, let's say, 50%. So yes, it means basically that it's 1/5, so it's 20%. So it's 20%, you have to deduct or it's actually not really 20%. I did the calculation, it becomes like 17% if you do it. So what you can do is from the figures we have here, 71% in EQL type of gross margin, those 70% will be like 63%. And the 50% EBITDA then will become like 33% or 35%, something like this. Yes, still very -- yes, still very accretive, still very accretive. And I think in the end, it's no effect on cash flow. This is just accounting stuff, how you choose to report.

Great more questions from the audience? Okay. We had one more question on the guidance. So just to clarify, I guess, so how much of the 30% growth target depends on expansion outside the Nordics in the Niche generics space?

Basically extremely little. Extremely little. So like I said here, when I did the concluding comment, in the coming 5 years, we will do everything to deliver on this plan. We will also do everything we can to make sure that we can stand here in 5 years and present yet another aggressive 5-year plan to be able to do that, we need to go out into Europe. That's one of the main things that's going to need to happen now. In the plan since we built it bottom-up and since it's basically only 4 years ahead, not much of that is going to realistically have an impact maybe a little bit. So I mean, we obviously, we want to be able to stand here and present the plan that is perceived as aggressive and optimistic and positive, but we also don't want to put on a rucksack that is too heavy for us to carry. So we have put very, very, very little significance to sales outside of Scandinavia for Niche generics. Then obviously for the branded part you saw. Obviously. There is -- the majority of that is outside of Scandinavia.

And then on the hospital setting, you now have some time in the market a little at least with some recent launches. How would you describe the outcomes in the tenders you've recently participated in? Have you been as successful as you hoped? Or has this business proven more challenging than expected?

I would say we have been as successful as we hoped. We're still not at the end of this because as Axel mentioned, these tenders run in loops of 2 to 5 years. So there are still tenders out there, which we have not even had a chance to bid on. But so far, so good, I would say. I think we are -- we are competitive in our prices, and we have a good portfolio of products and a good pipeline of products as well. That can be added. So I think this will also drive significant growth in the coming years.

Okay. And then perhaps for you, again, then as well, Alexander. So Mellozzan also has a little bit of time in the market now continental Europe. Could you expand on the really, really well statement? What does the latest launch metrics tell you? And what are you tracking towards?

When I say really, really well. I mean Germany, more or less because that's the market that's 10x as big as the Swedish market. which we are familiar with, and that's where we try to benchmark all the time. We can see that in Sweden, melatonin is sold, I would say, 60 million tablets per year. If you take that times 10, you would have the potential, if we say that the Swedish market is now mature, that then would be the potential in Germany as well. So 600 million tablets. And from there, you calculate how much of that could we possibly take? We don't know. But of course, we want to and hope -- and as far as I know, our partner, [ Medilink ] have the ambition to be a market leader.

So yes. Okay. And I mean, I understand that it's still early days, but -- but as you do your internal forecasting, what's your base assumption? Do you believe it's realistic to penetrate an equal size of the addressable population as you have done in Sweden? Or are there factors leading you to believe that it could be a lower or higher rates?

I don't know. If I would guess, I would say the problem is the same everywhere. Probably the solution is the same as well. Since you can't give them anything else. You can't give them benzodiazepines which is volume. That's not allowed to give kids not even in Germany. So yes.

But could there be, let's say, cultural factors with sort of stigma around giving medication to children?

Yes and no. I would say that the cultural stigma is rather on the ADHD and that's not as much a problem in Germany, but let's say, we would like to launch this in the Middle East. In the Middle East, they usually don't really recognize the indication of ADHD. They just say they have active children and that there's nothing wrong with active boys or girls and to go through Stage 1 is to say that there's something wrong, and we want to treat it. So that's why when you look at, for instance, Europe, you can say we have a population of I say 5%, 4% that has this diagnosis. In the U.S., it's 8%. So that's twice as many. Of course, it isn't twice many, it's just that they have a lower threshold. And when you look at Iran, it's 0. So yes do the calculation, it will be hard to launch Mellozzan in Iran.

I think it's a really good comment. And we also need to remember that AGB Pharma who built the market in Sweden, they did that very successfully, but it was over a long time. I mean it wasn't until you say that they started in 2005, something like this. I mean it wasn't until like 2015, 2016, that they really started to have significant volume and their EUR 40 million market that was in around 2020. I hope that it's not going to take that much time in Germany because we have such a proficient partner. But it still it takes time. That's the downside of such a branded segment. The upside is that then you have the brand loyalty and you are the first to market.

We have a question there.

[indiscernible]

We have 1 competitor that's the originator. They are not doing anything, which I hope they continue to do.

But development stage competition or at an early stage of launch, do you see any sort of wave of products coming over the next couple of years?

No. Not yet. But of course, if this is super successful in a big country like Germany, it's a given that since we don't have any patent protection there will be generics coming on board. But we know for the fact that it takes a couple of years to develop a new generic and this is a very, very old product. So it's not like there are plenty of dossiers out there or licenses that you can take. I would say there's none because we've looked before we did our own development.

And also, you could say basically that our, let's say, old nemeses from Sweden on melatonin, AGB Pharma, they're also active in Germany. They are active with internal. They are recruiting a sales team themselves and trying to build the market. And they were having little sales before. But now when our partner, [indiscernible] is really up and running. It looks in the figures as if [indiscernible] really killing it, which is what they should be doing because Germany is their backyard and ADHD is there. They are the ADHD company. So that is what we would expect. But I think you should still be humble that competitors could change the tactics and somehow be successful. One of the main criteria we used when we selected the partners was that they had a proven ability to build a significant market, for example, a EUR 40 million market. That is a significant market and protectit once generic enters, meaning to be able to keep more than 60% market share after a couple of years of generic competition, and they have been able to do so on other products.

One more question here.

[indiscernible]

The question was if the EUR 60 million in sales in Sweden, if that's -- if there's a potential to expand that, I suppose, as children grow they keep taking the medication?

Yes. Yes, they keep taking it which we're grateful for. Even though it's off label for us. So we have 2 indications. We have children and children indication with ADHD, and we have an indication for Jet lag. And those are the 2 indications we have. So we're not allowed to sell this to anybody else. But of course, we're grateful for every adult person taking Mellozzan on as well.

So it's like a SaaS model.

Okay. We have one question on the sort of visibility and confidence in your sales forecast that builds the guidance. And this is essentially the same question on the cost side and where the risks are. Is there, for example, a risk that R&D may prove more technically difficult and costly than you expected. You also mentioned that you want to expand the organization outside the Nordics. Are you certain that you can operate with a lean organization going forward as well as this would imply?

Okay. So I can start a little bit with that and you're just feeling if you see something else. But the main risks I see on the OpEx side. So as I said before, historically, meaning apart from the last 1.5 years, we have not been -- we have looked over OpEx, but OpEx has not been our focus. Growth that's been our focus. Now after having, let's say, 1.5 years of more, let's say, typical large company OpEx focus, I'd say we have a couple of learnings. So number one, one of the reasons we were able now to drive down OpEx as part of sales was that we were able to work with our team in Bangalore, okay, meaning that the background to that was that it's difficult to find regulatory quality and formulation and development people in Scandinavia, even in Europe at a reasonable cost level. So we started to experiment with that. And that experiment has been positive obviously, when you're going from being a small Swedish team to building a global team, there are challenges with that. I'm not going to say otherwise. But we still have an optimistic first impression. One of the key success factors for being successful on the OpEx side is that we will make that model work -- that we will make the model work with our Indian colleagues because they are significantly more -- yes, let's say, they are significantly cheaper than Nordic colleagues while having a very strong profile. So that's one. I think secondly, a risk. We have allocated a lot of cost towards taking care of all the new projects and initiatives. But it's always difficult. Perhaps we have underestimated, I don't think so, but I don't know. So that's, I would say, another risk. And then coming back to risk, number one, if this like Indian model doesn't work, it means that we need to go back to just following the fact that these colleagues are quite expensive in the Nordics. I think that's the main -- that's honestly the main things I can come up with. Because if you think about things like logistics, for example, we need to have logistics and supply chain in Sweden. But we need to add on colleagues for sure, but we don't need to add on 15 colleagues. So maybe 1 or 2 here or there. Same in like tenders, the more hospital tenders and so on, we take part in. Yes, we might need to add a few resources, but it's on the margin. Can you think of -- I missed something?

But maybe just to comment that, I mean, we have been -- and I've not been there so long, but I mean, we have built up the platform to say. So I think also that the scale of economics will work a little bit in our benefit as well. So -- and we have -- I think you alluded to that in your presentation as well.

So yes, but that's a good comment. So we have the base cost in place. And our philosophy now with OpEx is that the OpEx shall be marginal and not like transformational in the sense that we need to build any complete new teams or anything, which is adding marginal resources.

Any additional questions from the audience? Perhaps, we'll conclude with a more sort of visionary question then Axel because you're a visionary guy, EQL under your rein has acted opportunistically in the past, most notably during the pandemic. But you've also engaged in parallel imports and other ventures. So are there sort of -- are there any opportunities that you haven't touched on today, which may be a bit ahead and could provide upside to your targets?

I mean we are always trying to be entrepreneurial and innovational down in Lund. We come from an entrepreneurial background. I mean obviously, there are things that we are -- these are things we're working very concretely on and we can show a bottom up. Obviously, there are more things than this we are working with and that we are even fantasizing about or in very early stage that we are not including here. Again, we want to be able to present a plan that is aggressive, that is perceived as ambitious, but we don't want to put on a too heavy rucksack. So I mean, yes, Arvid. We have, obviously, a couple of upsides. But as we know from the past, there are also downsides you make a plan and then reality happens and things happen. Just coming back to the current 5-year plan. I mean, we are now on track to meet that plan. But if I go back 5 years and say, where I thought everything would come from, I can honestly say that I think it was a little different than how we saw it back then. So if that is also true for this plan, we're going to need a couple of cards up our sleeves.

Fair enough. We will settle for that for now. Okay. Any final questions from the audience? Okay. There's no other questions from the online listeners. So I will leave the word back to you, Axel, for any concluding remarks.

No, in that case, I would just like to really thank everybody for making this first Capital Markets Day we had nice day. I hope that you feel that you get a little extra today than what we can normally talk about. I hope we were able to explain our plan in enough detail and sort of making you feel that, yes, the guys have a plan it's realistic and so on. So thank you, everybody, for coming here physically to meet us. Thank you, everybody, who is with us on link. Thanks a lot, Alexander and Carl for joining me today. So I'm not alone, like I normally am and for being able to explain in much more detail. Okay. Then we call it a day.