EQL Pharma AB (publ) ($EQL)

Okay. So it's 10:00. So warmly welcome to the Q4 quarterly presentation from EQL Pharma. We will jump right into it as we have a lot to talk about today, obviously. So as many of you have already seen, I believe we had quite a rough quarter in EQL with a sales growth of 6% here, revenue of SEK 120 million compared to SEK 113.3 million. Anna , is it possible to turn off the push notification from Teams?

Yes, I don't have it any longer. So maybe it's only on -- sorry. I don't have it, but...

Okay. Maybe it's only me hearing it. Okay. I will have to try to multitask here. So sales-wise, if you just look at the sales figure, it's sort of fairly in line with what we expected and what we believed here in the profit warning made in September. The gross margin, on the other hand, I mean, it's, to me, really the big surprise and the big disappointment here in the quarter. So in Q4 last year, we had a gross margin of 41%. And this Q4, the gross margin only amounts to 28%. And this is mainly due to a couple of different one-offs sort of coinciding here in the quarter. So I will just spend a couple of minutes on those to really explain what that is and then I'll try to sort of separate that from what is structural. So first of all, the biggest one-off is a write-down here on a product called abiraterone. And this is quite a special product where it was decided some years ago that EQL would go for a patent expiry. For different reasons, we believe we were strategically positioned to manage that in a good way. And then, however, here, we realized in the quarter that in order to really take responsibility for the balance items, we need to take a write-down on that product because we really don't want to have value in the balance sheet that is not supported by what we're seeing in the markets for a product. So we decided to take that write-down here. As sad and as tough as it is, I think we still need to be -- take responsibility for the balance sheet. So that was approximately SEK 6 million out of this SEK 13 million. Then we had scrapping on a product called meropenem. It's a tender product in Finland, where Finnish authorities did not at all buy as much as they had forecasted in the tender documents to us. So that one was quite difficult to mitigate and difficult to manage. And the hospital contracts can be like this sometimes, a little asymmetric in the sense of how firm the customer have to stick to their forecast, so to say. Then we have increased logistics costs due to this increased geopolitical uncertainty that we're having around the Iran situation. That one is a little bit difficult to exactly quantify for us. But if we look at the different increases in freight cost and the following express batch release and such things that we have had coming from that, it sums up to approximately SEK 2 million. And just as an example there, a regular air freight for us, before this situation with October 7 and the Houthi blockade, was approximately EUR 8,000 before that. After that situation, the same airfreight was approximately EUR 20,000. And for us, now, in the worst days during the Iran crisis here, we had to pay up to EUR 60,000 for express airfreight. So that is -- it's a massive, massive change. And we obviously try to, all the time, fly as little as possible. But as you can see, only a couple of airfreights, at those levels, will quickly sum up. Then we had another one-off here, sellout of antibiotics. So in order to avoid scrapping on antibiotics in the coming year, we needed to sell out some of our antibiotics a little bit more aggressively than normal in the quarter. And the root cause for that, my analysis of the root cause for that is that after -- if you remember, during COVID-19 period, there was a global antibiotics shortage. And I think that after that, a lot of companies ordered too much antibiotics because they probably wanted to seize opportunities in a short market. So what we have seen then is that as a result of that, the market has become very long on antibiotics and several companies having to lower prices in order to avoid scrapping, and that is what happened to us in the quarter. So we even had to sell some of them with a loss in order to avoid scrapping here going forward. And finally -- sorry. Can everyone please mute? Then final one-off here was the final cost regarding the Medilink takeover here, and that was another SEK 2 million in, let's say, regulatory and takeover cost here for Medilink. The portfolio is now completely taken over. So with sort of -- even if we would not have had these one-offs, we would not have reached 41%. We would have been at maybe -- please mute everyone who is not muted. So with sort of trying to sort of restate for this -- I mean, it is one-offs, but trying to sort of restate for those, I had expected maybe a gross margin, let's say, around, yes, 38%, 39%, something like this because we still have little issues in the supply chain still here, which I will come back to. But that is, I would say, the sort of main downside and the main surprise for me in the quarter here. OpEx was higher than last year, but it was sort of in line with our own expectations here. So it's mainly on the gross margins that we see the isolated issues here. So EBITDA margin, very low, of course, as a result of all the one-offs over the gross margin. CapEx, SEK 16.7 million. Q4 last year is a difficult comparison quarter because that's when we did the Medilink acquisition. And Anna and Allan, I don't know if you -- do you get the push notifications from Teams? I get them. They are very, very annoying. I don't know if it's only...

I don't get them. I don't get them.

All right. The growth outlook for next year is lower here than I had believed only a couple of months ago. And we will come into that when we look a little bit about the growth bridge for next year. But this mainly revolves around the fact that we see some of the little bigger launches that we have in '26, '27 are coming a little later than we had hoped due to certain technical delays in the launch phase here. We also have the situation where, since we launched quite a few products in '25, '26, we don't get the sort of full year, the annualization effect of those. And those 2 factors together make the growth outlook for the coming year here a little bit more dull than we had hoped. Leverage, as a result of the lower EBITDA here, is above our internal target of 4.0, and we do expect it to be elevated here during the year, whereas it will -- we expect it to come down quite sharply here towards the end of the year. Looking at business development for the quarter. So some contrasts here. I think it was a good business development quarter. So for Mellozzan, we added Ireland as a new territory. We finally got the Italian MA with Italfarmaco here, and we are moving into the launch phase. MEDICE keeps growing the volumes in Germany and Austria and Switzerland, which is very nice to see, keeping about a 75% market share. And the procedures in the Gulf countries in Kazakhstan are ongoing here. And we aim to be launch-ready there by the end of the year. For the other strategic key asset, Memprex, we also added Ireland actually with the same partner, Azure Pharma. We are in the launch phase in Germany and France. In Germany, actually really, really in the final launch stages here. And for France, we expect to launch during the summer. Israel, we are also in the launch phase where we'll be launching hopefully during the autumn. And we have procedures ongoing in Benelux and Ireland. So we were able to start the procedure with Azure in Ireland here quite rapidly, which was positive. We have 2 new products added to pipeline, one niche generic and one special generic for the Nordics. We are also here in the sort of strategic review that we are doing and the process upgrade and sort of trying to increase focus on the core here. We are also carrying out a pruning exercise. And that pruning exercise has resulted in 7 products removed from the pipeline, products where our long-term outlooks have changed or our confidence in the partner has changed. So to simply really make sure that we really have the golden eggs in the pipeline and can really focus on those. One product was also launched to the portfolio and one product was removed from portfolio. Another milestone in business development is that we have signed the first niche generic for Germany. And this is a product that stands on its own legs for the Nordic markets, but also has a very nice potential for Germany. So that made it a sort of a perfect pilot product for us here. Looking at operations, of course, the key topic in the company right now is to solve the supply issues that we have been having and strengthen and upgrade processes to make sure that, that will not happen going forward. My anticipation had been that the situation would be, more or less, resolved by the end of quarter 4, but that's not really what I'm seeing right now, unfortunately, partly due to, of course, the situation with Iran that we cannot really impact. But also partly, I think, because some of our key suppliers are struggling here with some of their key processes. What of that is accounted to the Iran war is difficult for me to say, but we still have some work to do there. In general, we're also looking into sort of trying to simplify and prune and clean up here. And on top of that, we are doing like a full force AI rollout now in the company that will be a big focus during '26. Next, I wanted to give some of my reflections sort of regarding the past couple of years and where we are standing right now. So here in the picture, you can see the relative growth of the different business areas here over the past couple of years. So the green bar here is pharmacy, which is sort of traditionally our bread and butter. And it's -- I mean, it's obvious here in this picture that, that pharmacy business area even decreased a little bit in '25, '26. And then bear in mind that we did acquire the Medilink products, which were pharmacy products. So this is a business area I would have expected to grow. And obviously, the decline is due to the supply issues that we have been having. So that is, I think, for me, one of the sort of main bad news here for the past year. Supply issues leading to stock outs, of course. Branded is a business area that has been growing massively here. You can see from SEK 33 million, SEK 78 million, SEK 136 million. And this growth has been driven by both Mellozzan and Memprex, but more so by Memprex than we had perhaps expected a couple of years ago, to be honest. When it comes to branded, it's, of course, great that it's growing like this, but it also poses challenges for us in the short run, mainly because we're having bottlenecks in manufacturing for Memprex for the time being. So we are performing debottlenecking for Memprex, finding a new API source. The API is currently the bottleneck. So we are right now struggling to fulfill all the demand that we're actually having. And we expect by the end of this year, by the end of '26, that we will have a new API source ready, and that will debottleneck Memprex, and it will also bring down the COGS significantly on that product. So it's one of the most important projects in the company right now. For Mellozzan, we are also doing a factory change, so changing to production in a new factory, and that is ongoing. And that will both bring down the COGS and sort of make us able to increase service level to our customers even further. So we remain very dedicated here during the year to try to really make the Memprex and Mellozzan supply robust and cheap. Scrapping we have in hospital here. Obviously, our assessment is still that the hospital segment is an attractive segment for us, but that we need to be even more diligent in the operational management of that segment. As you saw here in the one-offs, a bit of hospital scrapping really impacted the quarter. So another sort of operational issue that we had is that we had relatively few new product launches, both last year and this year. And that becomes sort of a first degree and a second degree problem because in many of the previous years where we have been growing very nicely at 40%, 45%, then we had, as growth components into a certain year, new launches during that year, but also full year effects from last year's launches into that year. So when you compare year 1 to year 2, you have the launches that you do in year 2, but you also have the full year effects from the launches that you did in year 1. And if we have 2 years in a row where we launched a relatively limited number of products, that obviously becomes a challenge on the growth. And I mean, all of these above items, combined with a higher OpEx base, because we did a very active selection here as the first year in the new 5-year plan, to invest in our staff and invest in our team, to really be sure now that we can take the company to the next level, so that has then obviously pushed profit from both directions here. So the sort of resolutions we see and our hypothesis, what we're going to focus on in the near future here, is obviously to improve our supply and logistics abilities here. We have also, as many of you have seen, we have decided for a change of leadership in the supply team, and we are also doing several other organizational changes and upgrades to try to improve our transparency and controlling in the supply part. Obviously, the geopolitical situation doesn't help us. But for me, personally, the reality is what it is, and we need to find a way to handle it simply. That's our job. The debottlenecking in branded, of course, will be key here to -- I mean, partly to deliver the continued growth here in the year to come, but in a sense, to really make sure that we can have a long-term really profitable growth here in the branded segment. I mean we see a huge potential here, bringing on lots of new markets, lots of new customers. We see several growing markets. So we are dedicated to improve the margins in branded and debottleneck the supply. I mean the pipeline and portfolio pruning might continue here, and it might give sort of 1 or 2 more prunings here, which, I mean, it's, in essence, a good thing if we clean up and can increase our focus. From the sort of helicopter perspective, I mean in the past 2 years here, we had only very limited amount of launches. I think -- I mean, in this financial year, in the past financial year, we only did 2 launches of our own products, which is, I mean, a record low. In the coming 3 years here, we have about 30 launches. And these are launches of very nice products, the products that we signed using the liquidity we were able to retain from the COVID-19 crisis, from the COVID-19 tests. And they are coming here, all of them in the coming 3 years. 10, 11 of them will come already in this year and then the remaining. So we need to be very, very diligent in our launch, launch excellence work here and really make sure to launch all these products in a good way. And that also gives, I mean, some flavor into the year '27, '28 because we will launch a lot of products in the year to come. So that will sort of get us back to the primary and secondary growth in '27, '28 because we will launch a lot of products in '27, '28, and we will also have the full year effects from the launches in '26, '27. So that -- to me, that gives us a really nice opportunity to have a really nice inflection year in '27, '28 if we do things really well here in '26, '27. Then finally here, which I think is really, really important. And I mean, I, of course, see different external estimates and reflections that different people have about EQL and different components about EQL. And here, I want to be super, super clear on one thing. Me and the management team, we are committed to keeping the OpEx growth for the remain -- for the foreseeable future here, single digit from what it is now. That is our firm commitment and our firm ambition. And we will do this using different types of operational upgrades and improvements and also, of course, some efficiency improvements from AI here. So that is our clear and firm ambition to keep a single-digit OpEx growth, at least for the remaining of this 5-year period here. Zooming in a little bit more detail into the key drivers for growth in the coming financial year here. We have, first of all, a recovery in the Pharmacy segment. And I mean, the Pharmacy segment has underdelivered here in '25, '26 due to operational issues in the supply. So we have to diligently make sure that we get back on track with supply on these products and make sure that we have inventory levels under control and avoid scrapping and avoid stock outs and all these things that we have historically done pretty well, but for some reason, have not managed to do in a good way in this year. Continued growth in branded, and I would like to zoom in here a little bit. So the key drivers for the year to come in branded will be to launch Memprex in France, Germany and Israel. I mean, obviously, France and Germany will drive more than Israel, but Israel is still a nice add-on market there. France and Germany will be new anchor markets for Memprex with a very nice potential. Mellozzan growth in Germany and the U.K., that growth continues. And we keep -- I mean, in Germany, we already have a very nice market share. In U.K., we see our market share growing. U.K. is a more competitive market on Mellozzan, but we are very impressed by the work of our partner, MEDICE, here. They are doing that in an extremely good way. And due to the fast dissolution profile of our product compared to competitors, we're also getting very nice feedback from the patients and the families. I mean, the debottlenecking and the COGS improvement in both Mellozzan and Memprex will be really key here in the year. And for both Memprex and Mellozzan, we aim to be launch-ready in Italy, in the Gulf countries, in Benelux, Turkey, Ireland and Kazakhstan. So a whole bunch of sizable territories here that we will add on. For hospital, we strive to continue the growth in hospital. So we have won more tenders for the year to come that we will start delivering on. And we will also sort of aim for the recovery here, mainly, I would say, recovery in the sense of planning the hospital segment better to avoid this type of scrappings that we saw for meropenem here in the quarter that feels -- I mean, that is extremely unnecessary. Finally, we will launch the first special generics products of a sort of more significant nature here during the autumn. So we have won a tender, and we are waiting for the final MA approval and supply of goods. So that is also a very exciting thing here that will happen during the year, and that is a segment where we see a very nice potential over the coming couple of years. Coming back to the sort of the long-term story here for EQL. So the blue line here is the target as externally communicated on top line for the different 5-year periods or actually 4-year periods here, where you see that historically, we have sort of managed to deliver on our external promises quite well. It's no surprise here that this new 4-year period has started weaker than we had hoped. So we should have been on SEK 479 million here, and we are on SEK 433 million. And obviously, with the forecast for the coming year of around 15% growth, we will be still lagging behind. But we still remain committed to the 5-year plan. We have diligently reviewed our full pipeline and forecasts for branded segment from the different markets. And we firmly believe that we will be able to catch this up here and, once again, deliver on our promises. So a 4-year period is long, and we are only in year 1, and we are committed and focused on '28, '29 here and being able to deliver on our targets. Finally, just a quick review of the portfolio and pipeline. So the portfolio here on the left, you can sort of see that the portfolio has been flattish here over quite a lot of quarters, which explains some of the growth challenges that we have been having here in the current year. Pipeline then slightly smaller due to the removal of 7 products here, as you can see still over the coming 4 years here, a bit more than 40 launches, 30 of them in the coming 3 years, which puts a really big responsibility on our project teams and on our launch teams here to really take responsibility for all these products and to get them launched in a good way. I will hold there and open up for questions. As I can imagine, there will be quite a lot of questions here. So I will stop sharing. So you can ask questions either by just raising your hand or posting in the chat. I see Arvid's hand up. So over to you, Arvid.

So the first one on the launches that are seemingly delayed for the fiscal year of 2026 and '27. Can you break this down a little bit more in detail? Why exactly are these launches delayed? And then secondly, what have you baked into your full year guidance exactly? Do you expect sourcing to become worse through the year? Or does it assume some sort of gradual improvement going forward? I'll start there.

Yes. So if we start with your question regarding the launches. So let's say we have around 10 launches in the year that we would be able to do if we do it well, then, of course, some of those are more significant than others, when I reviewed the sort of launch plan for '26, '27, let's say, 4, 5 months ago, it looked like some of the larger launches could be done quite early in the year, which is obviously very positive because then we get the effect over several quarters. Then different technical challenges have appeared in the launch phase, which is sort of a very detailed phase with a lot of technical work, which has delayed some of those launches by 4 months or 6 months. So they come later in the year instead of early in the year, and that then poses quite a big impact on the year as such, but it doesn't have any, let's say, impact on the 5-year plan because there is no structural problem with the launch. It's just a delay, let's say. And unfortunately, we're facing several of those, which the team is working hard to pan out. Your other question regarding what is baked into the guidance for the sort of base portfolio here. I mean, that is tricky, to be quite honest. It's really, really tricky right now given that -- I mean, we feel that the situation in the global supply chains is more shaky than what we are used to in EQL. And I mean, obviously, EQL's business model, it is based on that global supply chains are operating relatively seamless. Having said that, I mean, we aim to improve here during the year, of course. And in my forecast, it's a more normal situation, let's say.

Fair enough. And last one, if I may, and then I'll let others continue. Can anything be said about the margin outlook for the full year? I understand there's lots of bits at play here, but where do we end up with a protracted war and no significant shift in freight rates through the year?

Yes. So typically, as a company, we give full year guidance on sales, which, I think, is fair to do. And the guidance on sales is here around 15% sales growth. So we typically don't give EBITDA or gross profit or gross margin outlook. Having said that, though, I mean, if the situation in Iran would continue, we have tried to do, let's say, a high-level consequence analysis of that based on sort of what we saw in March. And I would say that we see a margin downside of SEK 10 million to SEK 15 million if this situation were to continue. But it's, of course, very difficult to quantify. But the longer it takes to resolve, it will be negative for EQL, absolutely. Let me see if there are any other hands in the air here. In that case, I think I move to the chat where I saw a couple of questions here. Okay. Yes. So Joey has a couple of questions here. Can I ask some questions. Could you elaborate a bit on the visibility going into the next quarters given the full year guidance you have given? How can you be able to give such guidance? Okay. So no, I mean, obviously, forecasting is difficult, especially when global geopolitics is more uncertain than normal and when we have some issues in our supply chain that we are actually not used to having, but we have tried to do it as well as we can, given the information that we do have. And we will update it quarterly, of course, as we learn more about how things develop here. I would sort of see it right now, a little bit of a weaker start in the year because we are seeing the supply and inventory situation gradually getting better, but not with the speed that I had hoped. So to be quite transparent there. Anecdotally -- next question. Anecdotally, it feels like this has been a bit of a one-man-show where you have done a lot on your own as CEO. Now that there is a new CFO and CSO in place, will that change your day-to-day operations in the business for you? Yes. So yes, I mean , I've been the face -- outward face here for EQL for quite a few years, but I've had a big team behind me, helping me to deliver results. For me to get in Allan as new CFO and Anne as new CSO here is a huge, huge shift in what we are able to do to really get this type of super clever, high-caliber individuals with lots of ideas and great experience into the team. It's a huge offload for me, and it's also a huge increase in the span of activities and the complexity of activities that we can take on. So that's been very positive here. And I think that we will -- I hope that we will see the same in supply once we have a long-term solution there. Next question. Given that your net debt to EBITDA is so high, it gives you less room to continue developing new products. From my understanding, this should put pressure on your financial target, and it starts to seem really difficult to meet targets as sales has not grown for a year. Please help one understand this. Yes. So yes, net debt over EBITDA is higher than we want it to be and higher than we had anticipated it to be. It's obviously not because of the net debt factor in the equation. It's because the EBITDA has been challenged and pushed in a way here that, quite honestly, I would have had a very, very hard time to even imagine half a year ago or a little bit more than half a year ago. So our sort of primary mitigation here is, of course, to focus on curing this by getting back on track with the EBITDA. I mean we have over -- I think it's 33, 34 quarters before, been a high-performing, high-delivering company, and we are committed to coming back to that. So we're going to cure that by getting back to a growing EBITDA. Right now, since we are a bit above where we want to be, we will also sort of slow down new product signing here. That doesn't mean that we will stop the work in identifying new products and such. It more means that we will focus on, let's say, window shopping here for 1 or 2 quarters. So we have a lot of good products lined up for once more liquidity is available here. And then we'll have to follow the EBITDA development here to see if more forceful actions will be needed. Some more questions here. A couple of questions from [ Christer ] here. Axel, some question that you maybe could comment on. Number one, can you confirm that the only covenant for the utilized part of the bond loan is the liquidity requirement of SEK 20 million and that the net debt covenant of 3.4x only applies with -- to the right to issue additional bonds? Okay. So just a clarification there. So the only hard covenant we have on the bond is the liquidity requirement for SEK 20 million. The covenant that [ Christer ] mentioned here on 4.5x EBITDA, that is if we want to issue new equity -- sorry, if we want to issue additional bonds here like [ Christer ] is saying, but it also applies to if we want to issue new equity. Sort of doing, if we would like to do an equity cure, then net debt over EBITDA can go over 4.5. Next question. You have previously said that you have built a machine organizationally that will have the capacity to deliver your fifth plan, and the business is very scalable. I have interpreted this as OpEx in the next few years will not grow by more than around inflation unless something else happens. That is, is it reasonable to imagine OpEx a couple of years out being perhaps 8% or 12% higher than today? Yes. So I would -- high level or conceptually, I would share that view. I don't want to sort of commit to having an OpEx increase that is in line with inflation here because that gives me very little flexibility. But I definitely commit to having a single-digit OpEx growth here going forward. We will also have to curiously explore what AI can do for us in terms of efficiency. But we remain super committed to having a very limited marginal OpEx increase here. Next question. If we look at the next few quarters, which of the gross margin-disrupting items do you expect to remain going forward, such as freight prices? And how big an impact on gross margin do they have? If these effects persist, will you be able to pass on the increased cost to customers? Or does the competitive situation mean that the possibilities are limited? Okay. So I mean, obviously, the sort of first degree margin disruption that we have from disturbed geopolitics is obviously on freight cost. And I think that if the situation continues, I mean, we will have no choice than to try to pass this on to customers, which, I mean, I think some actors are already doing. I mean, with energy prices coming up and everything, you also have distribution prices coming up. So that is obviously one of the mitigation actions that can be done. I think that also that authorities such as TLV proved during the COVID crisis that they were -- when they acted, they acted quite forcefully and increased ceiling prices on a lot of EQL products by 20%, 30% or even 40%, which really helped to ease the situation. So I think there are a couple of things that can be done there. We, of course, are also -- I mean, we're very customer focused. So we don't want to claim force majeure and pass costs on to them if it's only a very short situation. So we'll have to follow this quite closely. Next question. How should we view the growth of 15% for the coming years? Steady growth every quarter? Or will the last quarter have significantly greater growth than the initial quarters? Yes, this is always a tricky one because it's 2 dimensional. So it depends on the comparison quarter, and it depends on how the business performs. I mean, obviously, everybody knows that Q2 last year was exceptionally weak. So I mean, it's not a wild bet to bet on that, that the Q2 absolute growth will be fairly nice. I see sort of a weak start here, to be quite honest, into Q1 due to the sort of delayed or extended supply issues. It is gradually getting better, but not as forcefully as I would like to see. So I don't expect a super strong Q1 here, to be quite honest. Final question from [ Christer ]. How should we view the delays in product launches and the large impact it has on the sales compared to the initial 5-year plan? Is the business model this fragile? Or are there really unique events that have led to the large loss of pace in growth? Yes. So we actually -- it's a good question, and we were discussing the same in the Board. So I would see it -- I mean, as long as we manage to carry out the launches that we have committed to carry out within the 5 years, I mean, it's still -- a 5-year plan is still -- at the end of the day, it's 2 discrete points that you compare to each other. And when we look at the project plans and when we look at the growth projections for branded here, we still definitely believe that we can deliver this growth and that what we are seeing right now is sort of -- how would you say that we are -- we have been growing very, very rapidly and now have a couple of operational things that we need to really, really get in order to get the launch machinery working properly again. So I still think that we have to do all these launches, all the 30 launches, and we need to grow the branded segment and keep the eye on the horizon and focus and that we will be able to deliver the growth that we have said that we will deliver. A couple of questions from [ Matthias ] here. You mentioned that there is still a risk of further disruption in Q1. Could you elaborate on that risk and if possible, quantify the potential financial impact? So the financial impact is difficult for me to assess at this point. Also, accounting-wise, if I would have been able to quantify the impact, then we would have already taken it over the Q4 result. And that's the sort of the thing with scrapping is I don't know the final figure until the goods have actually expired. And we are obviously doing everything we can when we see an expiry coming up to mitigate it as much as possible. But it could potentially be a couple of percentage units here in Q1 to get rid of that. Next question. You guide for around 15% sales growth in '26, '27, which is below your long-term target of 30%. How much of the lower growth is due to delayed launches? And how much is related to ongoing supply and inventory problems? Yes. So it relates also, I think, to Arvid's question there. So the majority of the sort of disappointment in growth for the coming year, I would say, comes from launch delays. But I mean, part of it also due to that we have to take into account that we are facing some issues in supply, and we are going to solve those issues. But I think it will take a little longer than I initially thought, to be honest, and we obviously need to account for that in the forecasting as well to be transparent and to be honest and to take responsibility. Next question. Expansion in Germany and the Netherlands is progressing. What have you learned so far? And when should investors expect the first sales contribution from these markets? So we are learning as we go here, and this is quite an exciting work and sort of for the long, long-term growth of the company, super important. So for Germany, I would say we had the most progress. So for Germany, we are going to try to launch a pilot product during the autumn. And that is -- it's not an insignificant product. And it's not huge, but it's not insignificant either, and it's a product we already have in the portfolio, which is great. Then for a couple of other products, we actually found potential in Germany. So we need to carry out repeat use procedures and new recognition procedures to register those in Germany and try to create start-up sales. We have also, in the quarter, as I mentioned, signed the first new product with potential in Germany. We are discussing different go-to-market strategies, whether to focus on hospital products or focus on pharmacy products or whether to make it a mix. So we will see first sales in Germany here already during '26 is my firm ambition. I would not think that we will have sort of sizable or significant sales from Germany before maybe '28 or even '29. But we do really believe that there is a potential there, and we can come back with more firm time plans. Netherlands has been, quite honestly, a little bit more difficult for us. The system in the Netherlands resembles the Nordic systems much, much more in the sense that they are really truly price-centric. If you have the lowest price, you get the volume. But that has also led to that the market is perhaps more exploited in the terms of licensed products. So right now, we are exploring if perhaps the way to go for the Netherlands is to be more patient and go for development products for Netherlands instead. So we have a couple of -- but to be honest, it feels like we have been able to penetrate Germany slightly better than the Netherlands so far. A question from [ Jonatan ] here. Given the stocking effects, has the new freight rates hit COGS yet? Or should one expect that more going forward? So it's different on different products. So for some products, we pay the freight cost. So Ex Works, it's an Incoterm called Ex Works. And there, obviously, we get a direct effect. For products with Incoterms CIF, where our supplier pays for the transport, it's been a little bit different. Given that nobody has been really able to predict the extension of this situation, it has been tried to be handled as a sort of where customer and supplier shares increased freight costs until we sort of know more. So that we have done a couple of times during the quarter that we have shared increased freight costs with suppliers and with customers also. A question from [ Linus ] here. How does it work with the second sourcing initiative you have mentioned previously? Does this, in any way, help offload the shipping prices related to the problems in the Red Sea? Or does it just help mitigate issues of the sort we saw in Q2? No, I would actually say both because with more stable and reliable supply, we can have more control of inventory levels and then we can use sea freight more as a modus of transport and the sea freight cost per package, I mean it's very, very small compared to air freight. So that should help us to bring down the part that we lift with air and plan a lot better. So I think it will -- I mean, it will bring down COGS, it will simplify planning and bring down freight cost. That is, at least, the ambition. Two more questions from [ Linus ]. Also noticed that a lot of the products removed from the pipeline were from the review and launch phase. I was under the impression that failures in this part of the pipeline were extremely uncommon. What caused these products to be removed? Yes. So these products that we removed from the pipeline were so-called distribution products where EQL is the local representative of another company. So we don't own the asset or we didn't develop the asset. We didn't have any huge CapEx associated with those assets. So when there is an MA that EQL is to represent, then that project is, sort of, by definition, in the launch or review phase since they are already developed. Final question here, I believe, from [ Linus ]. Also, do you still believe that you will be able to reduce the total inventory levels in the coming years given the current situation? Yes. So that is the idea here, and that is actually another mitigation action for the net debt over EBITDA. So we have a target to actually try to reduce inventory in the year to come here, driven by a couple of prunings that we already talked about, but also by changing the operational model a little bit, especially for the hospital segment. I'll give you a minute or 2 here to see if there are any more questions, and you're free to write follow-up questions in case you felt I didn't answer properly. While we give you some time for that, just a sort of final high-level remark from my side. I mean, we have been spoiled as a company to get to present really strong quarters. And we are really, really ambitious as a company. That's the kind of quarters we want to present. Now we find ourselves in a little bit more difficult situation here than what we are used to. We are super committed to sorting that out. We believe that we have a clear understanding of where the issues lie, and we have clear plans how to resolve them. We really, really believe that we will be able here to catch up and to meet the new targets again and really come back to a profitable growth focus here and that we have several dimensions to do that. Now we are not only so dependent on the pharmacy segment, for example, that we were before. We also have the branded segment that helps us, and we have special generics coming in and lots of initiatives in operations that will improve the supply situation here going forward. So if there are no further questions, then me and Allan and Anna, we will go back to the mine here. We have a lot of work to do, as you can all imagine. So thank you very much for calling in and for good questions. And we'll see you in this forum again in 3 months. Bye-bye.