Jamjoom Pharmaceuticals Factory Company (4015) Earnings Call Transcript & Summary

Good afternoon, everyone. Ibrahim Elaiwat here. And on behalf of AlJazira Capital, it is my pleasure to welcome you all today to Jamjoom Pharma's Earnings Call for Q3 2025's results. With us today, I'm pleased to welcome on the Panel, Chief Executive Officer, Dr. Tarek Hosni; Chief Financial Officer, Mr. Anwer Muhiddein; Associate Director of Finance and Head of Investor Relations, Mr. Muhammad Bin Khalid. The format of this call will begin with a presentation from management before opening up the floor to participants for a Q&A session. So without further ado, I'm handing over the floor to IR Director, Mr. Muhammad Bin Khalid. Mr. Muhammad, the floor is yours.

Thank you, Ibrahim [Foreign Language]. Good afternoon, everyone. Thank you for joining us for our third quarter 2025 earnings call. My name is Muhammad Bin Khalid. I'm the Head of Investor Relations. And I'm joined by the CEO, Dr. Tarek Hosni;and the CFO, Mr. Anwer Muhiddein. The duration of this call will be 1 hour, and we will start with a 20-minute presentation followed by 40 minutes for an open floor Q&A session. I will hand over now to Dr. Tarek for the presentation.

Thank you, MBK, [Foreign Language]. Good morning, good afternoon, everyone. Happy to be with you on the call. This is our tenth quarter since we went public in June 2023. So happy to see some familiar as well loyal names that attended with us almost all the 10 previous earnings calls, including this one. As well, this is our #15 quarter where we delivered since the beginning of 2022 quarter-in, quarter-out consistent growth year-on-year and quarter-on-quarter [Foreign Language]. So happy to be with you today and present another successful quarter for Jamjoom Pharma and the 9 months -- first 9 months of the year. So without further ado, let's get the first slide, please, Muhammad. Yes. So I'm sure some of you have already seen the results. So 13% in revenue on the first 9 months of the year compared to previous period, but an even more amazing results on both EBITDA and net profit, 22% and 30% to be more accurate. As well, quite honestly, our EBITDA is tracking better even than expected and better than what we have done last quarter when we raised our expectations and our guidance for the EBITDA and towards the end of this presentation, I'm going to share with you our updated guidance for the remainder of the year [Foreign Language] when it comes to EBITDA margin. So we continue to track well on our number of units produced, an amazing 87% free cash flow, which really is something that we did consistently throughout every single quarter, and we continue to track well regarding our new product launches so far in the year. Next slide, Muhammad. Yes. So if I give you a quick glimpse about our performance year-to-date and the key drivers of such performance, definitely our inception market, Saudi, we continue to do well at both retail front as well as the institution and tender business front. And as I always shared with you, we are growing at a higher pace when it comes to an institution and tender business given, obviously, the factors that we started from a low place 4 years ago where the tender and institution business constituted nothing but 5% of our total business. Today, we are tracking at almost close to 20% of an institutional tender business to our total business. But we continue as well to do very well on the retail front. When it comes to other markets outside Saudi Arabia, that almost give or take constitute 40% of our business. I think the key markets like Iraq, like Gulf, like Egypt and North Africa continue to track very well given the year expectation from sales and bottom line perspective but as well as the forecasted growth for each of them. And I want to share with you this in numerical terms in a minute or 2. From a portfolio point of view, we continue to track well on our existing portfolio drive. I told you, I think, a call or 2 ago about our attempts since the beginning of this year to segment our portfolio into strategic as well as established with a much higher lengthy focus on the strategic brands that should drive our performance from a growth perspective, but from a margin perspective as well. And we track well with this, and I'm going to show you the quantifiable results in a second. Our cardiometabolic portfolio continued to do well with growth on the antidiabetic portfolio, but we were too ambitious in the growth that we forecasted for this portfolio. However, we are happy with our share so far of the antidiabetic market, and it's a very promising start for years to come. In terms of the manufacturing organization, I think we continue to track at almost 90% utilization rate in our many existing facility in Jeddah. And I'm going to share with you a few slides, a strategic partnership that we are looking at for next year that will even take this utilization into a -- close to 95%, but definitely with our expansion and upgrading plans, we will continue to operate at ready to expand and ready to receive even more volumes from this existing facility. Jeddah sterile facility is ramped up very well as long -- as well as the Asia facilities that are today satisfying 97% of the domestic market need in Egypt. So almost all the supply of Asia business is coming as we speak from the local facility there. Next slide, Muhammad. Next slide, please. Yes. No, previous one. So when it comes to our revenue growth, so as I always share with you, and today, it's not an exception, every single -- on the left-hand side every single therapy area out of the 9, 10 therapy areas we play within is growing positively compared to a similar period last year. So ophthalmology, dermatology, general medicine, consumer health, you name it, are all growing very well. Even on the dermatology, where you see only are relatively modest 2% growth, but that's only on the shipment or the to-market sales that I always remind you was when we look at our real performance in the market, our in-market sales, the derma is growing at close to double-digit, is growing at 9-point-something percentage across all our markets. From -- when we go to the right-hand side of the slide, market-by-market perspective, you see Saudi is grown at 14%. Within this, the institutional business alone is almost growing at close to 60% in the first 9 months. Gulf markets are growing at 16%, similar to Iraq. North Africa is delivering very solid growth as well. And even Egypt is growing at 14% on local currency front, but because of the -- of course, the devaluation happening faster than -- and more impact than the price increase that we get, we still show minus 4% on constant currency. Revenue growth contribution, if you see at the same time last year and this year, we almost added SAR 140 million sales. Majority of this came from our existing portfolio, strategic and established where, as you can see, between strategic and established and new products launches, I mean, magnificent 105% driving the growth, but then the established brands that are having really less growth momentum in the market, and majority of it is mature and whatever, is giving us a minus 5%, which is something planned, but I'm pleased that we are even controlling the decline of such mature products at only 5%. Very happy with the performance of the strategic brands and the new products we are introducing into the marketplace. Next slide, Muhammad. Yes. Again, that became a standard slide that you guys are familiar with. As you can see, the transition on our portfolio year-in, year-out. In 2021, post ophthalmology and dermatology used to be 55% of our business. Today, we believe within 43%, 44%. But then the likes of the general medicine portfolio as well as the consumer health portfolio is really gaining much better momentum, which is basically happening by design, not by default. And that's us pushing for this in addition to definitely the new business that we are adding like the antidiabetic portfolio. Next slide, Muhammad. Yes. Again, another familiar slide to you guys, but we'll keep on showing you month-on-month, quarter-on-quarter, how Jamjoom Pharma against its top 4 rivals in the marketplace in Saudi Arabia retail market continue with consistent performance. As you can see, over 44 months now, and that's a record for us that I think it's unheard of, we only show 2 negative periods growth over 44. So 42 periods of consistent positive growth. When you compare with the rivals. I think you can see from the number of [ rates ] on their lines, the difference between Jamjoom Pharma really and the others in the marketplace. So we are becoming -- and I say this in the most accountable and as well modest way, we are becoming the reference and the standard for this market, which is something I thank my team very well for continue to deliver such performance. Next slide. Yes. That's our pipeline, whereby we are sharing with you here about 60 products. As you can see, almost 50% of them are either already submitted for approval or about to be submitted on a short-term track and then the other 50% are going to come over the coming 2 to 3 years, which is a very good balance. And we continue to aim, as I always remind you, of launching 6 to 10 products high-quality launches every year, which we have done this year. So far, we have launched 6 or 7 and we're about to launch the other -- the remainder of this number within our last quarter [Foreign Language]. Next slide. So that's an important slide that really show that how we are ensuring that we prepare for our future growth as well inorganically and from other brands that we are going to acquire elsewhere rather than only driving from our internal pipeline. So as you can see here, the number of projects that we have signed on the biosimilar front with reputable partners across the globe as well as on other fronts, like consumer health, with U.S.-based organizations. I think I'm very proud that year-to-date, we managed to strike 13 agreements across reputable partners, and we are still aiming for more before the end of the year. Very high growth therapeutic categories are always targeted with definitely potential and broader spectrum in terms of the value of the therapy area as opposed to a niche market that we used to do before. But we are still definitely strengthening our leadership in niche markets like ophthalmology and dermatology. The last point I would like to highlight on -- I'm very proud that we finalized a deal with one of the multinational partners, namely Viatris that we are going to manufacture the portfolio that they have in Saudi Arabia in our facility starting from third or fourth quarter 2026. That's a deal that is very close to my heart. But as well, it's a very strategic partnership that we are aiming to even further strengthen as we move on. Next slide. Yes. With this, I will leave the floor to our CFO, Anwer Muhiddein, to continue with the financial highlights. Anwer? MBK, is Anwer there?

Yes, he is there, probably might just give him 1 second.

Okay.

Thank you, Dr. Tarek. Good afternoon, everyone, and thank you for joining us today for our third quarter earnings call. Next slide. I am pleased to report that Jamjoom Pharma continued its growth momentum into the third quarter, sustaining its upward trajectory and delivering solid financial results. This performance was supported by a disciplined commercial execution across our key markets. Revenue grew by 4.5%, addition to SAR 342 million, driven by higher volumes and net price increase in a few markets. Gross margin grew by 1.6% to reach 61% in third quarter 2025, substantiate by the shift in sales mix towards high-value strategic brand. Our EBITDA grew by 11% year-on-year to SAR 124 million in third quarter 2025, with EBITDA margin improving by 2.2% year-on-year to 36.3%, benefiting from top line growth and improved operating leverage. Net profit increased by 12.3% year-on-year to SAR 107 million, driven by high gross margin, coupled with enhanced operating leverage and higher net financial income. On the next slide, we will look at our production cost and operational efficiencies in great detail. On the cost front, during the first 9 months of 2025, we maintained a strong discipline and operational agility, cost of -- the cost of revenue grew at a slower pace than revenue, reflecting progress in operational efficiency and product mix. Optimization -- leading to the year-on-year gross margin expansion, direct production costs increased by 12% year-on-year. Raw material and consumable costs rose by 9%, driven by increased manufacturing activity. Salaries and employee-related costs increased by 15% year-on-year reflecting upgrade of the employee reward program in 2025 to enhance talent retention efforts. Depreciation and amortization rose by 21%, reflecting the impact of our newly capitalized asset in the main facility as well as the Jeddah sterile facility. Other operational expenses, including utilities, consumables and maintenance grew by 20%, in line with business growth. Turning to the right side of the slide, our operating expenses grew by 8% year-on-year, reflecting cost discipline while continuing to invest for long-term growth. R&D expenses increased by 13% to around SAR 28 million due to increased investment and exhibit batches. Consumables and employee-related costs underscoring our commitment to innovation and accelerating product readiness. Selling and distribution expenses rose modestly by 5% to SAR 262 million, remaining well below revenue growth. This was driven by effective resource deployment, enhanced commercial productivity and the seasonability of promotional expenditure, which typically ramp up towards the end of the year. General expenses increased by 21% to SAR 59 million primarily driven by higher employee-related costs pertaining to enhanced benefit introduced in our updated reward program aligned with our long-term strategy. Our direct production cost was slightly higher this period compared to the same period last year at SAR 3.3 per unit sold, reflecting a portfolio shift towards higher value, higher margin strategic brand. Moving on to the next slide, we focus on our margins. Moving to our profitability. I'm pleased to report that our EBITDA margin expanded to 37% in 9 months 2025, up from 34.5% in 9 months 2024, a 2.7 percent point improvement year-on-year. This margin expansion was driven by revenue growth, improved operating leverage and effective cost control. As shown on the left side of the EBITDA increased by 21.9% year-on-year, rising from SAR 365 million to SAR 445 million, outpacing top line growth. This was supported by enhanced commercial efficiency, the impact of our revamp [ reward program ] SAR 4.4 million positive one-off and reduced ECL to SAR 7 million. These were partially offset by increase in cost revenue of -- cost revenue, G&A and selling expenses, which overall remained well managed relative to the revenue base. On the right-hand side, the margin trend chart shows continued strength and stability across all 3 key profitability metrics over the past 5 quarters. That shows downward trend towards the latter part of the year due to strategic seasonability dynamics. Gross margin remained strong at 60.9% in third quarter 2025, maintaining an uptick in comparison with third quarter 2024. EBITDA margin stood at 36.3% and slightly down from 37.5% in the prior quarter, yet significantly above the 27.7% low in fourth quarter 2024. Net profit margin reached 31.2% in third quarter 2025, up sharply from 19.9% in fourth quarter 2024, reflecting improved operational performance and higher net financial income. This performance reflects continued momentum in core operations, favorable product mix shift and scale efficiency from our expanding footprint. The consistent recovery and elevated margin profile reaffirm the strength of our business model and execution capabilities. We will now move to the cash conversion cycle on the next slide. Lastly, our disciplined focus on working capital continued to support our high-growth trajectory as of 9 months 2025. The cash conversion cycle extend to 296 days representing 11% increase versus 9 months 2024 driven by rising institutional sales, resulting in higher receivable and relatively higher inventory for strategic item. This investment support revenue, scalability, institutional sales growth and inventory. Working capital reached SAR 820 million, up 20% year-on-year largely due to higher receivable balance associated with revenue growth. Receivable days increased to 153 days, reflecting higher sales to institutional account with longer payment terms. Inventory days increased marginally to 181 days, indicating stable stock availability to support availability of our support supplies for strategic brands. Payment days declined to 38 days, down from 60 days due to strengthening supply relationship and optimizing payment term to secure strategic supplies. We ended the period with a cash balance of $169 million as of September 30, 2025, a 42% growth year-on-year post dividend distribution, providing ample liquidity to fund ongoing growth initiatives. With this, I would like to hand over to Dr. Tarek for future outlook and guidance.

So next slide, please, Muhammad. So yes, so this is a slide where we really keep you guys posted about our updates regarding the guidance for the full year. So previously, you communicated, as I mentioned, that our EBITDA margin will play within 31.5% to 33%. We're updating it today to 34% to 34.5% at the end of the year. Our gross potential for the revenue remain at 12% to 15%, CapEx 4% to 6% of the top line revenue, and we continue to be committed to distribute dividend at 50% to 60% payout ratio of the net profit on biannual basis. With this, I will stop here and invite questions or comments from your side.

Thank you, panelist. Ladies and gentlemen, we will now commence with the Q&A session. [Operator Instructions] And our first question comes from the line of [ Sultan Nadaf ]. [Operator Instructions].

[Foreign Language] I just have one question which is basically will be a retail channel [ in 9 months ] [indiscernible].

I'm sorry, I cannot hear you. I mean, your voice is both breaking up and coming low.

Is it clear now?

Yes, that's a little bit better, yes.

Okay. So my question is [indiscernible] for the 9 months, which means that the growth -- high single-digit last year [indiscernible]. Is that a function of slower growth in the market? Or is it you maximize the potential sale of your product [indiscernible].

Are you focusing on Saudi Arabia?

No. I'm talking about [indiscernible].

Generally speaking, yes, so you need to remind yourself, as I always share with you guys. I mean, there are 2 things that [ parallel ] and going dynamic in our business simultaneously, which is the shipment, which is what we shared with you here, our 2 market sales that we report on financial basis as well as our in-market, which is sales from our channels or our distributors to the marketplace, which is really reflecting the dynamics in the markets. I mean with the 2 markets, the first one, you can see sometimes transition, you can see changes based on the amount of stocks we are holding based on the supply, based on -- sometimes we require certain products, and we don't get it from the plant, it's delayed, but it comes in the following months, which is fine. And we manage this in the best manner and shape so that we don't deprive the market from what's the demand is there reflected in the market as I always share with you as well. Another factor that we always speak about is that, generally speaking, our first half of the year sees more push on the -- to market or the shipments sales rather than the second half of the year. So don't read too much into these guys, as I told you because that happened mostly by design rather than happening by default, and it doesn't reflect the real performance in the marketplace, real performance. We're still very happy and very proud of our in-market sales, the demand our teams are created and we are doing very well. But as I told you, sometimes you see fluctuation that we are delayed in supply of certain accounts. It will happen in the following months. We are delayed to get goods out of the plant. It will happen the following months. Hence, we don't manage our business on quarter-by-quarter. It's a financial year that we look at. The quarter-by-quarter is guidance that can be -- can go up and go down, but our commitment is a financial year, and that's what we do within the year.

It's a follow-up on 9 months growth in the retail channel for...

Again, you went back on the very low volume. I cannot hear you. Sorry.

No, is it clear?

Yes, slightly, yes. Go ahead.

So the question is, again for the retail channel growth [ for the 9 months ].

What was that?

The growth in the retail channel [indiscernible].

From an in-market front?

Yes.

Yes, we had a 15% growth, which is something that we are very happy with.

I think, Dr. Tarek, he is asking what was the retail channel growth...

I asked him is he talking about the in-market and he said, yes, that's what I tried to reply to. Unless -- because I'm struggling to hear. Unless -- I'm not hearing properly.

What you mean is the revenue, right? Sultan. You mean the revenue contribution of retail, how much has it gone up?

No, he asked about [indiscernible] not contribution.

So I'm referring to the 9 months growth in the Saudi retail channel versus the overall market, the retail channel?

Yes. Then I answered you, right. Sultan.

Our next question comes from the line of [ Pratik ]. [ Pratik ] your line is now open. Could you please unmute yourself and go ahead.

This is [ Pratik from Emirates NBD, Riyadh ]. I have a few questions. So the first one is specifically in Q3, you mentioned you did some price hike -- so can you quantify like what -- how much of the growth was driven by the pricing and which SKU was it? And second, we have seen some decline in the operating expense. So is it like related to the SAR 12 million one-offs which you showed in 9-month EBITDA waterfall chart? Can you just confirm that? And on the third side, if you just see Q3, the growth was like 4%, you tried to explain in the previous comment and that we should be looking into the business from a whole year perspective. But I just want to understand, like, is there any challenges we are facing in KSA because the growth in KSA for Q3 was minus 2%. So is it like some growth will catch up in the fourth quarter? Or how should we read into that?

So again, what was your first question, sorry?

The first 1 was on the price. So you did -- you took some price revision, right, in Q3? I'm just trying to understand out of 4%, how much was price and volume break?

Yes, yes, sure. So yes, so the price and volume is not out of the 4%. The price and volume is out of the 14% or the 13% you have seen are growing on the 9 months. And I'm reminding we able to keep this figure because we manage our business cumulatively, not months by months and quarter-by-quarter. So I hope that we speak the same language together. So we have a 13% growth, out of this we have almost 12% 13% contribution from the growth coming from the price increase, but this price increase, just to bring it to your kind attention guys, is that almost 60%, 70% driven by price increase coming from Egypt. Rightly so on the right time, quite honestly, or about time to have it because we had almost significant devaluations over 2-plus years. And now we are reaping the benefit of getting some price increases into a good portion of our portfolio. So 60% almost of the price increase I mentioned coming from the Egyptian market, and the rest is coming from our other markets. On the EBITDA front, I think the question about the 37% and then I will ask my CFO, Anwer as well to comment, but it's basically performance. If you don't -- if we don't perform, I'm reminding people, no matter how we present onetime items, it's very unsustainable and it wouldn't contribute that much into taking our EBITDA that to this percentage. So it's basically performance as well as expense control and operational excellence, doing more or less and cutting waste and maximizing efficiency and effectiveness. Anwer, would you like to add anything on the...

One-off is only very little amount, yes, about SAR 4 million. But mainly is debt performance. And the other expenses, it is controlled, but it will be normalized in the first -- fourth quarter also. So -- but mostly, the EBITDA is increasing by definitely the increasing profit opportunity.

No. So apart from one-off was there any sustainable savings, which you achieved in Q3? Or like there was nothing else?

There are some other income type of thing, which is one-off, about SAR 3 million is -- we are doing some -- to all manufacturing tech transfer amount was there. So that was a one-off for 1 year. But then this -- I mean, converted into the stream of revenue when we will be producing that revenue stream will be there in the coming year or 2.

Mr. Anwer, one key reason for the expansion of EBITDA margin is focused on high-margin brands, which we showed you in the slide that we are focusing on strategic brands, which are delivering higher margin with lower investment compared to the established brands. So definitely, that mix -- that change in mix is contributing to higher margin.

Right, right. That makes sense. So just going back to the top line growth in Q3. I understand the 9 month and we admire the growth and everything. But just in Q3, so the numbers which we are seeing 4% top line growth is probably volume, right?

Is what?

Is the volume-driven growth. So there is a price impact is not there in Q3, in particular, only Q3 compared to last week or two.

Correct. That's true, because we factored in, I think you got this right. We factored in the price increases from the beginning of the year in key markets like Egypt and others. So yes, what you see in Q3 is more than 95% driven by volume and performance. Did you have a certain question? No, I don't want to cut you off because I remember you asked something about Saudi performance, and it's minus 2% in Q3. Was that the question?

Yes, that's right. Yes, yes. So in particular, Saudi was like 2% -- it declined 2%. And also on a related note, some of the new categories we have seen a significant decline in Q3 specifically. I'm just talking from a Q3 point of view. So just wanted to understand what happened there.

Yes. So as I said, and I just entertain the same question in Al Arabiya half an hour ago. I mean when you are talking about minus 2%, quite honestly, quarter-in, quarter-out, we don't really look at it or pay too much attention because that's a transition, as I said, to supply to orders that was delivered or not delivered in the month, but will be delivered the following months. So we don't really pay that attention. That's why we manage the business on a slightly longer term than months by months and quarter-by-quarter. What I want to assure everyone that we continue to not only to perform well, quite honestly, in Saudi Arabia because I don't want to cut my team short. We continue to perform as one of the best growth drivers in the marketplace compared to others. And we continue to gain share, and we continue to gain momentum in this particular market. So this is -- this is what I can comment on. The transition in stocks or in supply, the lack of it or that we deliver in this month or next month, this is what makes the minus 2% to minus 3%, the plus 4%, which is all for us in significant pointers.

Our next question comes from the line of [ Naif ].

Yes. I'd like to ask about the Algerian facility operations. I do see there's quite a decline from SAR 7 million in profit, your share of their profit to SAR 2.8 billion approximately. And also, I want to ask about the Viatris agreement. Is it going to produce their brands portfolio or only the generics? And how much do they have -- how much presence do they have in Saudi Arabia?

So how much presence or the size of their presence is not for me to comment on. That's for the company to comment on. We are only going to produce their products. What I can tell you, if you know Viatris, this is basically that almost a generic arm of my former employer, Pfizer, where the span of this business. So most of the products we have is basically what you call, similar to our staff became branded generic. It was a brand before. But it had the patency impact and then it became general size. So all other products in the Saudi market, we are going to manufacture for them basically, we are going to manufacture the portfolio, which is about 6 or 7 products. So this is what we are going to have. Anwer, would you like to comment on the first question from [ Naif ]. Anwer?

Yes, your first question was what?

Regarding the Algerian facility, we do see quite a decline in their profitability and your share of their profits from SAR 7 million to approximately SAR 2.8 million.

No, no. So can I just clarify one thing that the profit for this 9-month period of 2025 is SAR 9.3 million. So that's a 14% decline from last year from SAR 10.8 million. It's not the SAR 2.8 million -- SAR 2.8 million is only Q3.

What's the reason behind that huge decline, because in the last year we had a good Q3 and good Q4 of SAR 7 mllion then SAR 7.7 million. What went wrong?

So let me -- just I'll take this, Anwer. So what happened, [ Naif ] last year similar time to this, we really started to push our manufacturing -- most of this profit is driven by us manufacturing and distributing for the company that we bought the plant from [ Otis, Novartis ]. So we had a first 3 to 6 months hiccups in terms of getting the APIs and getting the supply and the first quarter where we really started to streamline supply and manufacture heavily was third quarter last year. Hence, the heavy production and the heavy push in the marketplace. So we are not comparing apple-to-apple here because last year was a huge boost. These goods were out of the market for almost 5 to 6 quarters, and we manufacture and we had to push because the market was almost empty. And today, it's a business as usual, back to business as usual. So that's basically what made the slight difference that you see quarter-to-quarter. But we continue to track well on an annual front from our plants in Algeria, both on the existing portfolio side, but more importantly, us pushing for an ophthalmic unit, which is our key flagship sort of area that will come hopefully in a couple of years, this plant will be completed, and this will augment our real presence in the Algerian market.

Okay. I have another question about the DA contributions [indiscernible]?

About what?

About dermatology in particular because we are having the second consecutive quarter of declining revenue. What's the reason behind that? And what do you expect going forward in dermatology plus the antidiabetic. We had a big decline from plus SAR 9 million for 2 consecutive quarter Q1 and Q2, and suddenly, we are back at the SAR 2 million level?

So yes, dermatology, I think I mentioned already during my presentation, year-to-date, we are growing in market, which is our real parameter of our performance in the market, we are growing at 9% over 9 months. Again, 1 month high, 1 month low, a quarter higher or low that doesn't really tell us much because as I said, the fluctuation in ordering, the fluctuation in supply. So -- but what I can tell you is over 9 months, we have a growth of 9% within this therapy area in the marketplace. Antidiabetic portfolio, again, this is stuff that is -- as you know, we just entered this category 1.5 years ago. And we are very proud that we now have almost 5, 6 products launched in this category. We are learning as we go quite honestly, in full modesty. So while we are growing tremendously in this category over last year coming from a low pace, obviously, but third quarter specifically, the performance was not as strong as we want. But we expect that the team will catch up with this over the last quarter. But again, it's a sort of area that we're highly committed to and the team continued to perform well. We had a slip on the quarter, but I guess the whole year, I think, will close on a strong highlight.

[Operator Instructions] With that being said, we do have a couple of questions piled up in the Q&A chat box. So I'm going to read some of those out. We have a question from Divya, asking what is the percentage of institutional sales as to total sales?

I guess I mentioned this during my presentation, I said in Saudi 3, 4 years ago, it was just 5%. And this year, we expect it to close at something close to 20%. And this is our key market where we have -- we really have significant institutional terminal business. Elsewhere, we are driving well in the Gulf, but from a low pace. But the majority of our institution and tender business across our total business is coming from Saudi.

We have a question from [ Thahanos ], he's seen some headlines noting that API prices have been declining from China and India. Can we expect you to have some positive impact from this?

I would like [ Taha ] to take our hand and lead us to this cheap prices because, quite honestly, we are struggling to find any. So I'm not sure where did we see this. I mean jokes aside, I think the key point that [ Taha ] is perhaps hinting to is that definitely, we keep on seeking -- getting -- because don't forget [ Taha, ] we don't only go for cheaper prices, we go for credible suppliers that will give us the quality that we want. If that happened to be at a better price than what we have, we look at it, but we don't look only at cheaper prices. So that's very important. And we continue to seek alternate suppliers and we continue to seek better prices. And when we don't -- [ Taha ], let me assure you, and you can see this in our results, we find other means and ways to really operate in a better excellence and in the highest efficient and effective way. But yes, I assure you that we continue to seek this kind of better prices. But we do never compromise quality. That's very important.

Moving back to the raised hands. We've got a question from [ Sultan Tejari. ] Sultan, your line is now open. Could you please unmute yourself and go ahead.

Okay. I've got 2 questions. The first one is regarding the weakness in the Saudi performance of the third quarter? Is it related to NUPCO deliveries? And the second question, please, about the revenue growth of both NUPCO and the private market.

The second question is about at, sorry?

The revenue growth rates of NUPCO and the private market?

We showed you this already. We showed you this -- we said that our growth in Saudi, and that's what I'm referring everyone to again because really when I hear weakness and whatever, that's not exactly how we describe our performance. but we showed you that we are growing in Saudi over 9 months at 14%. But within the institution and tender alone were growing at 56%. So that was already, I hope, clear in our presentation. We shared this with you. There is no weakness, Sultan, if that's the name, in the Saudi performance. But as I said, that's a transition on the shipment or goods moving from our distributors -- from our plant into our distributors. So -- but the real market asset is in our in-market sales that is moving from our distributor into accounts. And as I told you, this is still growing at a very healthy stuff. And our 9 months is showing you this as well. So please, I urge everyone, this is not a business where you can take it for granted like other businesses or you think that you can look at it months by months and just quarter-by-quarter. This is a company, by the way, that is growing for the fourth consecutive year at a very high double-digit growth. That's what I'm reminding you. So all I'm hearing is weaknesses and slowing down and whatever and we don't have this within our performance. It's very important that as well we speak about this objective. Other questions?

Thank you for that. We do have a question from the line of Madhu. Madhu your line is now open. Could you please unmute yourself and go ahead.

Thank you, Ibrahim, for the opportunity. Mr. Tarek, congratulations on the decent set of numbers. Several questions, but I'll ask 2 and then we'll come back in the queue. First is about the price hike that you mentioned and you mentioned that Egypt was a reason for it. But when I look at Egypt sales, Egypt sales are down 4% year-over-year. So if I consider that 60% of the price hike happened in Egypt, then what is the reason for the 4% drop in sales? That is question number one. And price hike, can you reiterate how much is it? Because this I'm referring to 2 markets, the 13% growth that you have recorded this year. Of this 13%, how much is the price hike? Because what I heard is you mentioned over around 12%. So if I consider 12%, then does that mean volume growth was just 1%, 2%?

No, no, no. I said 13% of the growth. Yes. So if you are growing with 10%, 1.3 of this is coming from price increase. That's what I meant. I'm sorry, I wasn't crystal clear about it. Yes. Egypt, as you said, you are spot on, yes. So Egypt minus 4% at constant currency, but within the Egyptian currency spectrum, Egypt is growing at 14%, as I shared with you. So Egypt is still showing growth. Yes, -- we have 60% of our price increase. That's not of Egypt business or whatever of the price increase of the 1.3 out of them of 10 that I mentioned for you about, 60 percent of this is coming from Egypt. So almost 8 out of 11 or 8 out of 12 will be coming out of Egypt.

Okay. Okay, clear. Second question is on market trends KSA, especially the public market, the NUPCO. What are the recent developments in quarter 2 and quarter 3 because private market appears to have grown by roughly about 14%, 15% year-to-date. First, I think Q1 public market was also strong, but it seems there was some weakness in quarter 2 and quarter 3. Can you provide some insights here like what really happened? What is the reason for weakness? and first of all, is there a weakness because Q2, I think the data that has does indicate weakness. But what were the trends in quarter 3? And if weakness and what is the reason for that weakness. This I'm talking about public.

Yes, sure, sure. I guess we in totality, guys, and I consider myself one of you as well. I think we are a little bit spoiled by the great performance of the Saudi market. I'm not talking about Jamjoom Pharma. I mean weakness for me when I was at Pfizer and I hear about weakness, we talk about markets that are either declining or growing just at 1% or 2%. Today, we mentioned that markets that are growing at 12% or 14%, this is weakness. This is great performance guys. You don't find elsewhere. We are blessed that we are in this part of the world and the demand and the awareness of our people are really magnified after COVID and the market has continued to perform well. Relatively speaking, yes, these dynamics happen quarter-in, quarter-out, months in, months out, depending on high delivery for NUPCO in certain months. Certain unusual events in the retail market like companies doing some extra promotions or doing some commercial deals there. So as I said, you cannot measure it months by months and quarter-by-quarter. Generally speaking, I was still very bullish about the momentum in the Saudi market and our performance there 100%. NUPCO continue, as I said, to do well, continue to grow. They are doing certain operations to the way they look at the tender, to the way they even segment the tender for us. So initially, until last year, for example, without complicating things for you or getting too technical, NUPCO used to give us like one tender that we quote for it, including all the products, not only for Jamjoom, for everyone. You quote, you get your awards and you deliver it over a couple of years. They are trying now to make modification whereby they will tell you, okay, maybe we'll give you the tender by 1 or 2 years, not necessarily everything will be 2 years. But more importantly, we'll go [ therapy area by survey ] area. It will not be one tender fits all. But -- for example, if we have a tender for biosimilars will populate this tender for quotation by x months, and then we'll ask you to quote for it, and then you will get your award by so and some months, and then you deliver later on. So they are doing certain alterations, but that's internal business management for them, but I don't expect it to impact us much because the demand will continue to be there. Patients and hospitals will continue to require the products and we'll continue to supply them. So -- but it's just a transition in the way they look at their business.

Okay. And this modification is effective next year? Or is it already in place?

No, I expect it next year. This year is almost behind us. As you can see, we are talking end of October, a couple of months left and the majority of whatever because NUPCO is a highly accountable and responsible entity within the Kingdom, don't forget, NUPCO is just a middle man. They accumulate requirements from key accounts and big hospitals and whatever, and they populate it as a tender. And then once you supply, you don't supply them, you supply the accounts. So they have to act in an accountable manner that we will not cut the market short from goods just because we have internal better management of their tendering or whatever. So the coming 2 to 3 months are covered already, but I think we will see this impact perhaps at the end of first quarter next quarter -- second quarter of next year [Foreign Language] .

Okay. And coming back to market trends, was there improvement in quarter 3 compared to quarter 2 in the NUPCO or in the public market?

As I told you, I mean, just -- and I'm being very honest, I'm not going around the question for you to really understand this, but also for others. We're not -- at 1 quarter increase, we don't take this in the grain salt of it like, okay, NUPCO business is increasing. No because, as I said, transitions of ordering and the time of delivery of ordering might vary. So 1 quarter, for example, might see a hike in delivery. The following quarter, you don't see the same and that you will look at it as a decline. But actually, we look at it as a full year ordering and delivery from NUPCO was pledged over the years, and we see the business growth.

All right. Thank you, panelists. As we are approaching the end of our allotted time for this session, we'll be taking the final question from the line of [ Mashael ].

[Foreign Language] This is a [ Mashael Teejri, from Ali Capital. ] Maybe just 1 question from my end. Mr. Tarek, excuse me to ask you again on this -- and I'm not saying weakness in KSA sales. But noting that Saudi contributed to almost 67% of our top line. And we see a decline, we get concerned. You said delivery delays and maybe supply or timing of the quarter, but will this persist for the remainder of the year?

No, not really. That's why I'm saying that you guys will see that our full year will close at a similar strong note like we closed every year [Foreign Language] quite honestly, and I speak to you not because of the earnings call, but I mean, because I'm not with you today and tomorrow someone else will present to you. I'll be presenting to you the full year [Foreign Language] sometime in January next year. And yes, you will have a very strong performance, a very strong conclusion of the year. And as you said, [ Mashaell ] quite rightly, if Saudi, which is more than 65% of our business, including the Consumer Health business because which is only limited to Saudi now, if you take this away, Saudi will be less than this contributing to our pharma business will be only within 53% to 55%, but including consumer, it's almost 65% of the business. If we don't perform there, I will not be able to promise you a strong performance at the end of the year. So Saudi, we continue to perform very well. Don't forget us. I mean, actually, while you guys are asking a lot about Saudi today, me as the CEO of Jamjoom Pharma, my main thrust is something completely different, which is I want to minimize the reliance on Saudi and keep on getting a big part of our gross from Saudi and ensure that other markets will grow at much stronger and higher pace. So that we catch up and diversify our business. But Saudi to continue to perform very solid and very well. We are very bullish about it. And very soon, you are going to hear about other initiatives, strategic partnerships that we have in Saudi market that will even strengthen first our -- not only contribution to our business contribution to the whole pharmaceutical market in Saudi Arabian [Foreign Language]. If people want, Ibrahim I don't mind at all. This is -- yes, this is close to -- party to my heart and yes, I mean, whatever they want to ask, I can talk in another 2, 3 questions.

All right. Well, thank you for your time. Let's keep this rolling and let me know whenever you have to go then. And in that case, we'll be taking the next question from the line of [ Taha ]. [ Taha ] your line is now open. Could you please unmute yourself and go ahead.

Okay. Great set of results. So just expanding on my API question. I think you answered it correctly. But just confirming to you like currently, from which country, if it's possible for you to share, are you sourcing your API from -- is it multiple countries or your like geography-wise, what would be the split roughly?

No, you're -- I mean you're right to speculate [ Taha ] I mean, the usual suspects, quite honestly, it's China and India today and then a few stuff from Eastern Europe and other markets, a little from North America. But yes, the key is India and China, as you correctly said, and some products and some materials we get from the Korea part of the world and stuff like this. But in India and China, and I mean we -- as I keep on reminding you guys that we have taken a couple of years ago, a very good decision that is paying dividend to our business where we really purchased strategically on our key APIs for the business. So we don't do opportunistic 1 month, 2 months supply. We now go fully fledged at ordering even more 6 months or more from our key critical materials, which will enable us to ask for better prices because of the economies of scale and the size of the order, but as well, it enabled us as well to show commitment to people and more confident in our business that we are ordering with these high quantities. So -- we were -- we are already challenging the status quo and pushing for better prices from the credible suppliers who are dealing with. But mostly, as you said, [ Taha ] correctly, you mentioned 1 of them in China, India as well is another source, and we continue to work with other European markets.

Great. And just 1 small question. In terms of, you have a good pipeline of product launches, which you showed in the slide as well. So do you think it will take time to grow those products? Or you think -- like in terms of revenue growth, how should we look at it like a medium term 2, 3 years, these products can deliver some good revenue growth? Or it will take time to -- for the market to absorb them?

No, listen [ Taha ], I mean, a very good question, quite honestly, and that's what we strive for in every single product launch we aspire to bring to the market either from our internal pipeline and we bring it all from our credible internal pipeline or getting it from outside and thinking of enhancing it later on. Speed to market is key for us because we really look for unmet medical needs, unmet needs in the market that we can satisfy with the products we bring. We are not very much keen about [ ME2 ] launches. Many people, for example, will see Jamjoom Pharma is in ophthalmology, let's get products for ophthalmology and they think they will succeed with ME2. We don't target this. We go really for unmet needs in the marketplace, and we target our products to satisfy these needs. So that's why we are always bullish about the product we bring to the marketplace. So yes, to your question, products like the biosimilars, once we start with it, latter part of '26 [Foreign Language] last quarter or last 1 or 2 months and then the whole of '27, I think we expect that these products really will do well in terms of satisfying some patient needs, but as well enriching our portfolio and contributing significantly to our gross momentum on the top and bottom line. But we look at this from a 5 to 10 years plans to your point, how we don't look year-in, year-out. We don't play opportunistic. How can we really contribute if you are entering a new area like biosimilar like type 2 diabetes, how can we contribute there and will become different than however, explaining in this scope in the marketplace. That's just thrust of Jamjoom Pharma . Yes, but I promise you that you will see very good growth from -- the first year will bring such portfolios [Foreign Language]. But more importantly, you'll see plans of us bringing value with these products rather than playing opportunistically.

Good. Best of luck for the future as well. Just last comment, not a question that obviously, addressing what you said earlier as well that you have spoiled us so much that seeing 4% revenue growth is not enough.

I'm happy. Quite honestly. I mean I'm happy with the spoil crowd because you would give me honest and we will keep on pushing me more. And that's basically good for the patients and good for the [indiscernible].

All right. Our next question comes from the line of [ Yasser ].

I have 1 question from my side. Which therapeutic areas contribute the most for a 4.3% expansion in net profit?

What is the 4.3%, excuse me, so that I can answer you.

It's an expansion in net profit in 9 months.

For 9 months, we expanded by 50% in the profit.

No, no, no. The margin -- the margin itself...

The 4% better margin, you mean, better EBITDA. So you're comparing 33% to 37%.

Exactly.

Which products -- I mean, across. But generally speaking, I mean, as a rule of thumb, the highest margin that we have, and I always share this with you guys transparently products within the ophthalmology portfolio within the antidiabetic portfolio within the dermatological portfolio and some others as well across the rest. It doesn't mean that our consumer health is shy of good margin as well. We have some very good products with very strong margin as well into consumer health. So quite honestly, what I'm happy with is that this better margin is a final product of not a single category contributing, but across the portfolio. But more importantly, everyone in my team is held accountable and really delivering their commitments and more in terms of doing more with less and maximizing operational efficiency and effectiveness. So it's not only a performance, as I mentioned, but major part of it is the performance because, as I said earlier, if you don't perform and deliver growth, no matter what you do, you will be very modest and what you'll play with on the bottom line, but performance is definitely driving this, but as well our operational excellence and the real proper monitor of doing more or less and maximizing our effectiveness is also paying us a lot of dividend. And we became very good in this.

All right. We'll be taking the next question from the line of [ Badri ].

If you don't mind, Ibrahim, this will be the last question. I mean I'm more than happy to spend all the time with you, but I have other commitments. So I'm sorry, I'm not cutting anyone short.

Of course. Thank you for your time as well. [ Badri ] your line is open. Could you please unmute yourself?

[Foreign Language] I just have 1 question. You mentioned that the delays of supply and deliveries, so I'm just thinking, should we expect strong performance especially on dermatology during the fourth and first quarter of next year?

I mean all the time, but again, keep me honest. So all the time, we should expect better performance at all our products. But -- as I said, I mean, it's inappropriate, and it's not right that I shared with you guys the performance on the in-market because these are post internal data, and this is not even what we are held to present in public. But because of competition issues and some other stuff, but I'm sharing with you in full transparency, as I always do, that our in-market performance on the derma front is not something that you will not be proud of. But as an investor, I'm hoping that and Jamjoom Pharma either current or future because we are growing at 9%. And we are growing better than the market in many fronts. And we are still in our defined market product-by-product on the derma, where still playing either #1 or #2, which is a performance any company would be very proud of. Yes, go ahead.

It's just because of the performance of the second and third quarter. So there are some concerns, if this is a trend that will keep going in the next 3, 4 quarters? Or it's just one-offs because of the deliveries delays and all of that.

No, no. I mean, as I told you, that's why I was trying to explain explicitly that as the CEO of the company, I will only be concerned if I see that our in-market prices are declining or not, doing well. And then I take product-by-product. If we are not performing against the key competitors well then I'll be concerned. In neither cases, I'm concerned there. But shipment transition and getting less supply here and more supply here or more orders here delivered to NUPCO and less orders, it doesn't really concern me much. So the answer to your question, you will always see not only on derma, but on every single category that we have very healthy growth and hopefully [Foreign Language] compared or better than the market and drivers. So that's my promise to you guys.

And if I may, this performance is mainly in Saudi or...

I'm guessing that you are talking about Saudi. But yes, I mean, we have -- wherever we are with derma, just to give you in a nutshell [ Akiba ] and others, wherever we are in derma, we are either #1 or #2 in the marketplace. And we are big in derma in Saudi, we are big in derma in Iraq, in the Gulf. We are big in derma in Egypt and our performance there is very strong, many places. And the performance, yes, is driven primarily by Saudi being a key portion of the cake, as I mentioned, almost 55% of our pharma business, but as well other markets.

Okay. Very great. One last question regarding the pricing hike. You mentioned that most of the pricing hike goes to Egypt. Is that because of the currency depreciation?

Yes, yes. We are just catching up here. And quite honestly, it's not hike. I mean, I wish it was hike because, yes, when you get the valuation of 200% and you get an average price increase of 50%, 60% over 2 years, that's far from hiking. You are just compensating 1/3 of what you lost but we're happy to continue because we look at this market in longevity rather than in the short term. And we're happy. I mean it's a better place if we didn't get -- if we didn't get any price increase. And we know that the regulators and the government there are quite keen to be fair to post the patients and the consumers and as well the key players like ourselves. So we keep the positive dialogue and we continue to boost the envelope when it comes to price increases and stuff.

That would have to mark the final question to conclude our call. And on behalf of Al Jazira Capital, we'd like to extend our sincere thank you to Jamjoom Pharma's management for their time and the presentation during the session. And thank you to our guests for taking the time to join this call. Thanks again, everyone. This meeting is now over, and you may exit the call.