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amortisation (EBITDA) Earnings before interest, taxes, depreciation and amortisation (EBITDA) Årsrapport 30700228 EY Godkendt Revisionspartnerselskab Dirch Passers Allé 36 Postboks 250, 2000 Frederiksberg 2025-01-01 2025-12-31 2024-01-01 2024-12-31 25834844 Fertin Pharma A/S Dandyvej 19 7100 Vejle 2001-01-02 Vejle 72151300 +4572151301 www.fertin.com (venstre underskriver) PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab 33771231 33771231 Munkebjergvænget 1 Munkebjergvænget 1 5230 Odense 5230 Odense Danmark Danmark 63144200 63144200 2026-06-30 Christopher Beck Lambert Regnskabsklasse C, stor virksomhed Revisionspåtegning Grundlag for konklusion Konklusion 2026-06-30 2026-06-30 CaseWare Working Papers Today, the Board of Directors and the Executive Board have discussed and approved the annual report of Fertin Pharma A/S for the financial year 1 January - 31 December 2025. The annual report is prepared in accordance with the Danish Financial Statements Act. In our opinion, the consolidated financial statements and the parent company financial statements give a true and fair view of the financial position of the Group and the Company at 31 December 2025 and of the results of the Group's and the Company's operations and of the consolidated cash flows for the financial year 1 January - 31 December 2025. Further, in our opinion, the Management's review gives a fair review of the matters discussed in the Management's review. We recommend that the annual report be approved at the annual general meeting. Vejle Michael Henrik Thomsen Managing Director Christopher Beck Lambert Chairman Michael Henrik Thomsen Lene Lind Bo Korsgaard Jensen Gitte Lorenzen Alternate To the shareholder of Fertin Pharma A/S In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the financial position of the Group and the Parent Company at 31 December 2025, and of the results of the Group’s and the Parent Company’s operations as well as the consolidated cash flows for the financial year 1 January - 31 December 2025 in accordance with the Danish Financial Statements Act.We have audited the Consolidated Financial Statements and the Parent Company Financial Statements of Fertin Pharma A/S for the financial year 1 January - 31 December 2025, which comprise income statement, balance sheet, statement of changes in equity and notes, including a summary of significant accounting policies, for both the Group and the Parent Company, as well as consolidated statement of cash flows (“the Financial Statements”). We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the “Auditor’s Responsibilities for the Audit of the Financial Statements” section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Management is responsible for Management’s Review.Our opinion on the Financial Statements does not cover Management’s Review, and we do not express any form of assurance conclusion thereon.In connection with our audit of the Financial Statements, our responsibility is to read Management’s Review and, in doing so, consider whether Management’s Review is materially inconsistent with the Financial Statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated.Moreover, it is our responsibility to consider whether Management’s Review provides the information required under the Danish Financial Statements Act.Based on the work we have performed, in our view, Management’s Review is in accordance with the Consolidated Financial Statements and the Parent Company Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement in Management’s Review. Management is responsible for the preparation of consolidated financial statements and parent company financial statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.In preparing the Financial Statements, Management is responsible for assessing the Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the Financial Statements unless Management either intends to liquidate the Group or the Parent Company or to cease operations, or has no realistic alternative but to do so. Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements.As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Parent Company’s internal control.Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.Conclude on the appropriateness of Management’s use of the going concern basis of accounting in preparing the Financial Statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Parent Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and the Parent Company to cease to continue as a going concern.Evaluate the overall presentation, structure and contents of the Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that gives a true and fair view.Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming an opinion on the Consolidated Financial Statements and the Parent Company Financial Statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Odense Henrik Forthoft Lind Brian Petersen State Authorised Public Accountant mne34169 State Authorised Public Accountant mne33722 1186000000 1021000000 1012000000 56000000 -2000000 3000000 86000000 247000000 -283000000 -185000000 -30000000 -87000000 -129000000 -98000000 25000000 -59000000 -317000000 -159000000 -93000000 3430000000 3385000000 3149000000 221000000 200000000 211000000 901000000 140000000 640000000 958000000 1093000000 35.2 45.1 18.7 28.3 34.7 -19.8 -33.6 -39.7 -15.5 -8.2 1067 889 828 The financial ratios stated under "Financial highlights" have been calculated as follows:Operating profit/loss Profit/loss before net financials +/- Other operating income and other operating expensesEquity ratio Equity x 100Total AssetsReturn on equity Profit/loss after tax x 100Average equity Fertin Pharma A/S (“Fertin Pharma” or the “Company”) is a specialist Contract Development and Manufacturing Organization (“CDMO”) offering innovative, high quality pharmaceutical and nutraceutical products for oral and intra oral delivery. The Company’s current main product formats (“delivery systems”) are chewing gum, lozenges, powders, fast dissolvable tablets, Zapliq® chewables, and Zapliq® chewing gum.Fertin Pharma is the world’s largest independent developer and manufacturer of medicated chewing gum and has over recent years expanded into other specialized solid dosage oral and intra oral delivery systems. The Company strives to develop innovative oral and intra oral delivery systems that offer convenient and pleasurable delivery of active pharmaceutical ingredients (“APIs") and nutraceutical ingredients (“AIs") to patients and consumers. In 2025, the largest category continues to be high quality chewing gum and lozenges systems applied within Nicotine Replacement Therapy (“NRT”) category. In line with its diversification strategy, Fertin Pharma continues to leverage its highly flexible delivery systems to grow business outside the NRT category, applying a wider range of APIs and AIs for OTC pharma and nutraceutical categories.In addition to Fertin Pharma’s group-external CDMO business, the owners are leveraging the company's core competences in delivering innovation, R&D and production to build on their experience in building brand value and access to markets, which – as these activities continues to grow in relative size to the group- external activities – affects the company’s financial figures materially. Fertin Pharma holds IPs for developed platforms, ensuring future revenue streams. The Company is headquartered in Vejle, Denmark, where it owns and operates US FDA and EU GMP approved R&D and manufacturing facilities. Furthermore, Fertin Pharma owns and operates commercial, R&D, and manufacturing facilities in India and Canada.Business Review and OutlookThroughout 2025, Fertin Pharma has continued to execute the planned activities related to diversification of its external CDMO business. Even though at an early stage, sales have increased compared to 2024 by DKK 282m (+20%) to DKK 1.676m and have a positive outlook leading into 2026.While the Nicotine Replacement Therapy (NRT) category still resumes to be the backbone of Fertin’s CDMO business, the majority of the revenue growth derives from Fertin’s focus on the Selected Consumer Health (SCH) categoryFollowing PMI’s acquisition of Claudio Holdco, the Fertin Pharma group has continued to increase its engagement in providing innovation, R&D and production, supporting PMI’s “smoke free future strategy”. As these activities grow in relative size to the Group external CDMO activities, the totality of Fertin Pharma’s business changes accordingly, which is mainly affecting the development in the proportions of R&D and CAPEX investments over revenue growth.In 2025, Fertin Pharma continued to work intensively with topics related to compliance within the areas of ESG (Environmental, Social and Governance), IT security (NIST2D) as well as internal control environment for financial reporting (Sarbanes-Oxley Act section 404). The accelerated activities and forming of needed operational procedures, controls systems and reporting have affected the accounts for 2025 materially, which is expected also to be the case in 2026 – until the new procedures are fully anchored in fully optimized and system-supported procedures.Key figuresWith the intent of simplifying Fertin Pharma’s overall legal entity structure, all Danish entities - FERTIN Pharma A/S, NCP NextGen A/S, and Claudio HoldCo A/S - have been merged with Fertin Pharma A/S as the continuing entity. The merger has effect from 1 January 2025.As a consequence of the merger, the annual report is affected by DKK 103m deriving from amortization of goodwill, which initially was recorded in Claudio HoldCo A/S (please refer to the key figures in the table above).As part of the strategy, Fertin is investing in growing current and emerging/new markets and related sub-categories. These efforts are materially affecting the company’s financial result as well as investments in Innovation, R&D and capacity expansion. Please refer to the key figures in the table above - EBITDA before investments in emerging businesses/categories.Management expects the 2026 group profitability to grow compared to 2025, and as a result, management expects the 2026 result to further improve compared to 2025, with a revenue targeting above DKK 1.850m and an EBITDA between DKK 110m and DKK 130m. In 2025, Fertin Group realized a revenue of DKK 1.676 m which is in line with the expected revenue (2024: DKK 1.394m) which is an increase of 20,2%. The gross profit of the group is DKK 753m (2024: DKK 690m) The realized loss before tax is DKK 356m (2024: DKK -442m).InvestmentsIn 2025, investments were focused on increasing manufacturing capacity for pharmaceutical and nutraceutical products driven by our geo-expansion strategy and expanded R&D capabilities to support the development in demand from existing and new customers. It is essential for the Company’s continued growth to attract and retain highly educated employees with expertise in the development and production of pharmaceutical and nutraceutical products. The Company offers both internal and external training programmes. Currency risksThe Company primarily invoices in DKK and EUR and most goods purchased are denominated in DKK or EUR and to a lesser extent USD. Any identified significant risks are hedged using financial instruments.Interest-rate risksRevolving credit facilities are based on floating interest rates.Credit risksIn accordance with the Company's policy for assuming credit risks, all major customers and other business partners are credit rated. The credit risk relating to individual customers or partners is considered relatively low. Investments in research and development activities were in line with expectations. § 99b - Statutory Report on ESG & Social ResponsibilityThis statutory report on corporate social responsibility is prepared in accordance with the Danish Financial Statements Act and is included in the management commentary of the annual report. The report covers Fertin Pharma A/S entities in Denmark, Canada and India and comprises the company’s statutory reporting on environmental and climate matters, social and employee matters, human rights, anti-corruption and anti-bribery, and data ethics.Additional ESG and sustainability information is available in Fertin Pharma A/S’s ESG & Sustainability Report, which should be read as supplementary information and not as a replacement for this statutory report in the management commentary. The ESG & Sustainability Report can be found here:https://www.fertin.com/sustainabilityBusiness modelFertin Pharma A/S develops and manufactures pharmaceutical and consumer health products, with operations in Denmark, Canada and India. The company’s business model is further described in Management’s review.1. Environmental and Climate MattersPolicies and ApproachFertin Pharma A/S aims to reduce environmental impact across global operations through energy efficiency, responsible use of resources, and continuous improvements in production processes, in compliance with applicable environmental regulations.Actions and Due DiligenceMonitoring of energy consumption and environmental impactsIdentification of opportunities for energy efficiency improvementsOngoing evaluation of waste handling and resource useResults 2025In 2025, work focused on monitoring environmental impacts and assessing areas with potential for enhanced energy efficiency and waste handling in the coming years. Fertin Pharma A/S continues to track its greenhouse gas performance against its targets and maintains strong performance in 2025. In parallel, water management efforts in 2025 focused on establishing baselines and strengthening monitoring, while compliance with applicable groundwater protection was maintained. Activities related to chemical handling, contaminated soil, and wastewater management remained part of ongoing operational practices during the year.Risks and Future ExpectationsKey risks include regulatory demands, energy market fluctuations, and supply chain changes. Continuous improvement of environmental monitoring remains a priority.2. Social and Employee MattersFertin Pharma A/S is committed to providing a safe, healthy, and inclusive workplace. This is supported by structured safety programs, ongoing risk assessments, and a proactive approach to incident reporting and observations. Fertin Pharma A/S also invests in employee development through mandatory training and promotes well-being and engagement through regular dialogue, fostering a supportive and inclusive work environment. Employee engagement is monitored through regular internal surveys. In 2025, the overall engagement score was 4.25, compared to the KPI expectation of above 3.80. This reflects improved employee satisfaction and ongoing efforts to maintain a supportive and engaging work environment.In 2025, Fertin Pharma A/S maintained a stable workforce of 1,252 employees globally, with a continued balanced gender distribution across the organization.At governance level, Fertin Pharma A/S’s Board of Directors and Executive Management also reflected a strong gender balance, while the distribution among People Leaders and other staff remained equally balanced. This illustrates ongoing progress toward broader diversity goals and a consistently balanced organizational structure.Gender Distribution, Employees GloballyGender Distribution, Employee Groups GloballyThe 2025 group gender distribution of 48% women and 52% men remains within the company’s 2026 target range of a 40/60 gender split.Risks and Future ExpectationsRecruitment of specialized competencies remain a high priority area. Further, Fertin Pharma A/S continues development pathways for its employees.3. Human RightsPolicies and ApproachFertin Pharma A/S is committed to respecting internationally recognized human rights and complies with applicable labor and employment legislation across its global operations.Actions and Due DiligenceImplementation of a Supplier Code of ConductInitial risk assessments related to labor standardsInternal compliance with local labor regulationsRisks and Future ExpectationsHuman rights risks are considered inherent and industry related. These risks could be linked to working conditions, equal treatment and opportunity, and other work-related rights across the supply chain. Fertin Pharma A/S continues to strengthen its monitoring of potential human rights risks through its Supplier Code of Conduct, internal labor compliance, and ongoing due diligence activities.Results 2025No human rights breaches were identified within global operations. Fertin Pharma A/S did not conduct formal supplier audits in 2025.4. Anti-Corruption and Anti-BriberyFertin Pharma A/S applies a zero-tolerance approach to corruption and bribery, supported by a Code of Conduct, mandatory compliance training, and an established whistleblower mechanism.Actions and Due DiligenceAnnual mandatory compliance training for relevant employeesWhistleblower scheme available across the organizationMonitoring and handling reported incidentsRisks and Future ExpectationsRisks related to corruption and bribery may arise in interactions with external business partners, suppliers, customers, public authorities, and other third parties. Fertin Pharma A/S continues to mitigate these risks through its zero-tolerance policy, Code of Conduct, mandatory compliance training, internal controls, and whistleblower channels.Results 2025In 2025, no incidents of corruption or bribery were reported through internal channels. Completion of mandatory compliance training supported continued awareness and prevention of misconduct. Fertin Pharma A/S processes only internal and operational data and handles all personal data in accordance with GDPR requirements, which ensure fair, transparent, and secure processing of personal data. No events materially affecting the Company’s financial position have occurred subsequent to the financial year-end. 1676276000 1393874000 1344394000 1263840000 604690000 454614000 400237000 361105000 -54070000 -73269000 -50498000 -73269000 2098000 1748000 2098000 1748000 372476000 322739000 280095000 274195000 755278000 691538000 716658000 703557000 692415000 693087000 639152000 650672000 325324000 311370000 307814000 297306000 6717000 44000 6717000 44000 -269178000 -312963000 -237025000 -244465000 0 0 -25939000 -84018000 2438000 1626000 7096000 12907000 89498000 130903000 88278000 126327000 -356238000 -442240000 -344146000 -441903000 -74797000 -71768000 -62705000 -71431000 -600000 0 -600000 0 -280841000 -370472000 -280841000 -370472000 364205000 435254000 364205000 435254000 29900000 41000 29875000 0 148912000 155804000 148366000 155356000 394894000 430023000 387827000 422956000 252365000 288144000 252365000 288144000 1190276000 1309266000 1182638000 1301710000 577924000 607570000 493994000 511350000 639805000 593750000 564218000 566403000 10507000 17153000 4981000 7872000 35061000 8392000 0 0 269644000 239112000 183389000 183701000 1532941000 1465977000 1246582000 1269326000 0 0 63957000 119458000 0 0 63957000 119458000 2723217000 2775243000 2493177000 2690494000 207993000 164064000 148514000 135588000 48879000 40534000 36801000 28816000 108360000 113719000 103209000 108470000 365232000 318317000 288524000 272874000 295663000 222076000 187377000 180458000 30596000 26552000 359292000 252999000 50669000 49554000 15353000 11594000 18852000 17048000 12193000 9720000 395780000 315230000 574215000 454771000 122828000 60318000 77396000 15661000 883840000 693865000 940135000 743306000 3607057000 3469108000 3433312000 3433800000 1370511000 1370511000 1370511000 1370511000 462871000 549163000 462871000 549163000 -563482000 -354287000 -563482000 -354287000 1269900000 1565387000 1269900000 1565387000 85166000 151037000 107901000 153334000 85166000 151037000 107901000 153334000 1600000000 1272422000 1600000000 1272422000 54366000 56157000 54366000 56157000 1654366000 1328579000 1654366000 1328579000 23098000 556000 23098000 556000 233520000 134031000 141877000 113661000 168397000 58183000 101313000 64405000 0 6483000 0 6475000 149465000 205509000 111712000 182060000 23145000 19343000 23145000 19343000 597625000 424105000 401145000 386500000 2251991000 1752684000 2055511000 1715079000 3607057000 3469108000 3433312000 3433800000 70512000 581516000 -20313000 1300000000 0 -32353000 -338119000 0 -4145000 1370511000 549163000 -354287000 -86292000 -194549000 0 14646000 1370511000 462871000 -563482000 In connection with the merger of Fertin Pharma A/S, NCP Nextgen A/S and Claudio Holdco A/S, a capital increase of DKK'000 1 was made. As the merger was carried out retroactively, the capital increase is recognized in the opening equity in the comparative figures. For additional information on the merger refer to the description in the management review and accounting policies. 70512000 581516000 -20313000 1300000000 0 -32353000 -338119000 0 -4145000 1370511000 549163000 -354287000 -86292000 -194549000 0 14646000 1370511000 462871000 -563482000 In connection with the merger of Fertin Pharma A/S, NCP Nextgen A/S and Claudio Holdco A/S, a capital increase of DKK'000 1 was made. As the merger was carried out retroactively, the capital increase is recognized in the opening equity in the comparative figures. For additional information on the merger refer to the description in the management review and accounting policies. -280841000 -370472000 281772000 278274000 -76294000 -18390000 -75363000 -110588000 301461000 380246000 7122000 3078000 -294339000 -377168000 941000 41000 0 27407000 -399523000 877642000 -20751000 -18327000 34000 1324000 12845000 1404253000 432212000 518814000 62510000 31058000 60318000 29260000 122828000 60318000 The annual report of Fertin Pharma A/S for 2025 has been prepared in accordance with the provisions in the Danish Financial Statements Act applying to large reporting class C entities. The Company's management has decided to change the presentation principle of the income statement from nature based to species based. The change has not impacted the year-end result or equity of the Company. The Company have adjusted the recognition of external funding received for development projects. This has resulted in a change of comparative figures for 2024 where intangible assets have increased with DKK 19,343 thousand and deferred income has increased with DKK 19,343 thousand. Additionally, amortisation of intangible assets has increased with DKK 1,733 thousand and other operating income has increased with DKK 1,733 thousand. The change in accounting policy had no effect on the result of the year, or the year-end equity for accounting year 2024. The accounting policies used in the preparation of the consolidated financial statements are otherwise consistent with those of last year. Comparative figures have been restated to reflect the policy changes.MergerDuring the year, the Company was merged with it’s parent company Claudio HoldCo A/S and sister company NCP NextGen A/S with retroactive effect from the 1 January 2025. In connection with the merger, the group method has been applied, and comparative figures have been restated in the Parent Company Financial Statements. As a result of the merger, profit for the year for 2024 was reduced by DKK 111.461 thousand, while equity as at 31 December 2024 increased by DKK 61.837 thousand in the Parent Company.In the Consolidated Financial Statements the merger does not have any financial impact. Assets are recognised in the balance sheet when it is probable as a result of a prior event that future economic benefits will flow to the Entity, and the value of the asset can be measured reliably.Liabilities are recognised in the balance sheet when the Entity has a legal or constructive obligation as a result of a prior event, and it is probable that future economic benefits will flow out of the Entity, and the value of the liability can be measured reliably.On initial recognition, assets and liabilities are measured at cost. Measurement subsequent to initial recognition is expected as described below for each financial statement item.Anticipated risks and losses that arise before the time of presentation of the annual report and that confirm or invalidate affairs and conditions existing at the balance sheet date are considered at recognition and measurement.Income is recognised in the income statement when earned, whereas costs are recognised by the amounts attributable to this financial year. Reporting currencyThe financial statements are presented in Danish kroner (DKK'000). The consolidated financial statements comprise the Parent Company and group entities controlled by the Parent Company.Control means a parent company’s power to direct a group entity’s financial and operating policy decisions. Besides the above power, the parent company should also be able to yield a return from its investment.In assessing if the parent company controls an entity, de facto control is taken into consideration as well. The existence of potential voting rights which may currently be exercised or converted into additional voting rights is considered when assessing if an entity can become empowered to direct another entity’s financial and operating decisions.The consolidated financial statements are prepared as a consolidation of the parent company's and the individual group entities' financial statements, which are prepared according to the group's accounting policies. On consolidation, intra-group income and expenses, shareholdings, intra-group balances and dividends, and realised and unrealised gains on intra-group transactions are eliminated. Unrealised gains on transactions with associates are eliminated in proportion to the group's interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains if they do not reflect impairment.In the consolidated financial statements, the accounting items of group entities are recognised in full. Non-controlling interests' share of the profit/loss for the year and of the equity of group entities which are not wholly-owned are included in the group's profit/loss and equity, respectively, but are disclosed separately.Acquisitions and disposals of non-controlling interests which are still controlled are recognised directly in equity as a transaction between shareholders.Investments in associates and joint ventures are recognised in the consolidated financial statements using the equity method.The group's activities in joint operations are recognised on a line-by-line basis. Intra-group business combinationsThe book value method is applied to business combinations such as acquisition and disposal of investments, mergers, demergers, contributions of assets and share conversions, etc. in which entities controlled by the parent company are involved, provided that the combination is considered completed at the time of acquisition without any restatement of comparative figures. Differences between the agreed consideration and the carrying amount of the acquiree are recognised directly in equity.In vertical and reverse vertical intra-group mergers, the group method is used to merge the companies. This adds the companies together at the revaluation value calculated in the consolidated financial statements or would have been calculated in the consolidated financial statements of the parent company involved in the merger. The group method is implemented as if the companies had been merged from the time when the parent company acquired shares in the companies covered by the merger, and therefore comparative figures have been adjusted.For vertical and downstream intra-group mergers the group method is applied for the combination of the entities. Thereby, the entities are combined at the revaluation value recognised in the consolidated financial statements or which would have been recognised in the consolidated financial statements for the parent company included in the merger. The group method is applied as if the entities had been combined from the date when the parent company acquired the equity investments in the entities included in the merger, and therefore, the comparative figures were restated. On initial recognition, transactions denominated in foreign currencies are translated at the exchange rate at the transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and the date of payment are recognised in the income statement as financial income or financial expenses.Receivables and payables and other monetary items denominated in foreign currencies are translated at the exchange rate at the balance sheet date. The difference between the exchange rates at the balance sheet date and the date at which the receivable or payable arose or was recognised in the most recent financial statements is recognised in the income statement as financial income or financial expenses. The Company has chosen IAS 18 as interpretation for revenue recognition.Income from the sale of goods for resale and finished goods, is recognised in revenue when the most significant rewards and risks have been transferred to the buyer and provided the income can be measured reliably and payment is expected to be received. The date of the transfer of the most significant rewards and risks is based on standardised terms of delivery based on Incoterms® 2010.Revenue is measured at the fair value of the agreed consideration excluding VAT and taxes charged on behalf of third parties. All discounts and rebates granted are recognised in revenue. Other operating income comprise items secondary to the principal activities of the Company, including rental income from the temporary lease out of production facilities, compensation, government grants, funding on development projects, gains on the disposal of intangible assets and property, plant and equipment, etc. Compensation, funding and grants are recognised when there is reasonable assurance that the entity will comply with the conditions attaching to them and the grants will be received. Work performed on own account and risk and recognised as assets includes staff costs regarding work performed in the financial year in relation to the construction of one or more assets recognised in the balance sheet. Cost of sales includes the cost of goods used in generating the year's revenue. Other external expenses include the year's expenses relating to the Company's core activities, including expenses relating to research and development costs that does not qualify for capitalisation, distribution, sale, advertising, administration, premises, bad debts, payments under operating leases, etc. Staff costs comprise wages and salaries, including holiday allowance and pensions, and other social security costs, etc., for the Company's employees. The item comprises amortisation/depreciation of intangible assets and property, plant and equipment.The basis of amortisation, which is calculated as cost less any residual value, is amortised on a straight line basis over the expected useful life. The expected useful lives of the assets are as follows:Completed development projects 5-20 years Patents 5-20 years Software 3-10 years Goodwill 20 years Depreciation is based on the residual value of the asset and is reduced by impairment losses, if any. The depreciation period and the residual value are determined at the acquisition date and are reassessed annually. Where the residual value exceeds the carrying amount of the asset, no further depreciation charges are recognised.In the case of changes in the depreciation period or the residual value, the effect on the depreciation charges is recognised prospectively as a change in accounting estimates.The basis of depreciation, which is calculated as cost less any residual value, is depreciated on a straight line basis over the expected useful life. The expected useful lives of the assets are as follows:Buildings 10-70 yearsEquipment and machinery 5-20 yearsFixtures and fittings, plant and other equipment 3-5 yearsLeasehold improve­ments 6-30 years Land is not depreciated. Other operating expenses comprise items of a secondary nature relative to the Company's core activities, including losses on the sale of fixed assets. The income statement includes the proportional share of the underlying companies' profit or loss after elimination of internal profit/loss and after tax. In group entities, the full elimination of internal profit and loss is carried out without regard to ownership shares.The proportionate share of the individual group entities' profit/loss after tax after full elimination of internal gains/losses are recognised in the parent company's income statement. Financial income and expenses are recognised in the income statement at the amounts that relate to the financial reporting period. The items comprise interest income and expenses, e.g. from group entities and associates, declared dividends from other securities and investments, financial expenses relating to finance leases, realised and unrealised capital gains and losses relating to other securities and investments, exchange gains and losses and amortisation of financial assets and liabilities. Tax for the year includes current tax on the year's expected taxable income and the year's deferred tax adjustments. The portion of the tax for the year that relates to the profit/loss for the year is recognised in the income statement, whereas the portion that relates to transactions taken to equity is recognised in equity.The entity is jointly taxed with other group entities. The total Danish income tax charge is allocated between profit/loss-making Danish entities in proportion to their taxable income (full absorption).Jointly taxed entities entitled to a tax refund are reimbursed by the management company based on the rates applicable to interest allowances, and jointly taxed entities which have paid too little tax pay a surcharge according to the rates applicable to interest surcharges to the management company. Other intangible assets include patents, goodwill and software licences. Investment in software programs includes the cost of direct software cost and internally as externally related labour cost regarding the development process.Other intangible assets are measured at cost less accumulated amortisation and impairment losses.Development costs comprise expenses, salaries and amortisation directly or indirectly attributable to development activities. Some external customers are paying for part of the development costs. These payments are offset against the booked asset.Development projects that are clearly defined and identifiable, where the technical feasibility, sufficient resources and a potential future market or development opportunities are identifiable and where the Company intends to produce, market or use the project, are recognised as intangible assets provided that the cost can be measured reliably and that there is sufficient assurance that future earnings can cover production costs, selling costs, administrative expenses and development costs. Other development costs are recognised in the income statement as incurred.Development costs that are recognised in the balance sheet are measured at cost less accumulated amortisation and impairment losses.On completion of a development project, development costs are amortised on a straight-line basis over the estimated useful life. The amortisation period is usually 5 years and cannot exceed 20 years.Gains and losses on the sale of intangible assets are recognised in the income statement under "Other operating income" or "Other operating expenses", respectively. Gains and losses are calculated as the difference between the selling price less selling expenses and the carrying amount at the time of sale. Property, plant and equipmentItems of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes the acquisition price and costs directly related to the acquisition until the time at which the asset is ready for use.The cost of self constructed assets includes the cost of direct materials and labour, etc. directly used in the production process and a portion of the relating production overheads.Gains or losses are calculated as the difference between the selling price less selling costs and the carrying amount at the date of disposal. Gains and losses from the disposal of property, plant and equipment are recognised in the income statement as other operating income or other operating expenses. The Company has chosen IAS 17 as interpretation for classification and recognition of leases.Leases that do not transfer substantially all the risks and rewards incident to the ownership to the Company are classified as operating leases. Payments relating to operating leases and any other rent agreements are recognised in the income statement over the term of the lease. The Company's aggregate liabilities relating to operating leases and other rent agreements are disclosed under "Contingent liabilities". Equity investments in subsidiaries are measured according to the equity method.On initial recognition, equity investments in subsidiaries are measured at cost, i.e. plus transaction costs. The cost is allocated in accordance with the acquisition method.The cost is adjusted by shares of profit/loss after tax calculated in accordance with the Group's accounting policies less or plus unrealised intra-group gains/losses.Identified increases in value and goodwill, if any, compared to the underlying entity's net asset value are amortised in accordance with the accounting policies for the assets and liabilities to which they can be attributed. Negative goodwill is recognised in the income statement.Dividend received is deduced from the carrying amount.Equity investments in group entities measured at net asset value are subject to impairment test requirements if there is any indication of impairment.Gains and losses on disposal of group entities and associates are made up as the difference between the sales price and the carrying amount of net assets at the date of disposal including non-amortised goodwill and anticipated costs of disposal. Gains or losses are recognised in the income statement as financial income or financial expenses. The carrying amount of intangible assets, property, plant and equipment and investments in group entities is assessed for impairment on an annual basis. Impairment tests are conducted on assets or groups of assets when there is evidence of impairment. The carrying amount of impaired assets is reduced to the higher of the net selling price and the value in use (recoverable amount). The recoverable amount is the higher of the net selling price of an asset and its value in use. The value in use is calculated as the present value of the expected net cash flows from the use of the asset or the group of assets and the expected net cash flows from the disposal of the asset or the group of assets after the end of the useful life.Previously recognised impairment losses are reversed when the reason for recognition no longer exists. Impairment losses on goodwill are not reversed. Inventories are measured at cost in accordance with the FIFO method. Where the net realisable value is lower than cost, inventories are written down to this lower value. The net realisable value of inventories is calculated as the sales amount less costs of completion and expenses required to effect the sale and is determined taking into account marketability, obsolescence and development in the expected selling price.The cost of raw materials and consumables comprises the cost of acquisition plus delivery costs.The cost of finished goods and work in progress includes the cost of raw materials, consumables, direct labour and indirect production overheads.Indirect production overheads include the indirect cost of material and labour as well as maintenance and depreciation of production machinery, buildings and equipment and expenses relating to plant administration and management. Borrowing costs are not recognised in the cost. The Company has chosen IAS 39 as interpretation for impairment write-down of financial receivables.Receivables are measured at amortised cost.An impairment loss is recognised if there is objective evidence that a receivable or a group of receivables is impaired. If there is objective evidence that an individual receivable has been impaired, an impairment loss is recognised on an individual basis.Receivables in respect of which there is no objective evidence of individual impairment are tested for objective evidence of impairment on a portfolio basis. The portfolios are primarily based on the debtors' domicile and credit ratings in line with the Company's risk management policy. The objective evidence applied to portfolios is determined based on historical loss experience.Impairment losses are calculated as the difference between the carrying amount of the receivables and the present value of the expected cash flows, including the realisable value of any collateral received. The effective interest rate for the individual receivable or portfolio is used as discount rate. Prepayments recognised under "Assets" comprise prepaid expenses regarding subsequent financial reporting years. Cash comprises bank deposits. Reserve for development costsThe reserve for development costs comprises recognised development costs. The reserve cannot be used to distribute dividend or cover losses. The reserve will be reduced or dissolved if the recognised development costs are amortised or are no longer part of the Company's operations by a transfer directly to the distributable reserves under equity. Current tax payables and receivables are recognised in the balance sheet as the estimated income tax charge for the year, adjusted for prior-year taxes and tax paid on account.Deferred tax is measured according to the liability method on all temporary differences between the carrying amount and the tax base of assets and liabilities. However, deferred tax is not recognised on temporary differences relating to goodwill which is not deductible for tax purposes and on office premises and other items where temporary differences, apart from business combinations, arise at the date of acquisition without affecting either profit/loss for the year or taxable income. Where alternative tax rules can be applied to determine the tax base, deferred tax is measured based on Management's intended use of the asset or settlement of the liability, respectively.Deferred tax is measured according to the tax rules and at the tax rates applicable at the balance sheet date when the deferred tax is expected to crystallise as current tax. Deferred tax assets are recognised at the expected value of their utilisation; either as a set-off against tax on future income or as a set-off against deferred tax liabilities in the same legal tax entity. Changes in deferred tax due to changes in the tax rate are recognised in the income statement. The Company has chosen IAS 39 as interpretation for liabilities.Financial liabilities are recognised at the date of borrowing at the net proceeds received less transaction costs paid. On subsequent recognition, financial liabilities are measured at amortised cost, corresponding to the capitalised value, using the effective interest rate. Accordingly, the difference between the proceeds and the nominal value is recognised in the income statement over the term of the loan.Other liabilities are measured at net realisable value. Deferred incomeDeferred income recognised as a liability comprises payments received concerning income in subsequent financial reporting years. With reference to section 86(4) of the Danish Financial Statements Act, the Parent Company has not prepared a cash flow statement for the Company itself, but has only prepared a cash flow statement for the Group. The cash flow statement shows the Group's net cash flows broken down according to operating, investing and financing activities, the year's changes in cash and cash equivalents as well as the cash and cash equivalents at the beginning and the end of the year.Cash flows from operating activities are calculated as the profit/loss for the year adjusted for non cash operating items, changes in working capital and paid corporate income tax.Cash flows from investing activities comprise payments in connection with acquisitions and disposals of entities and activities and of intangible assets, property, plant and equipment and investments.Cash flows from financing activities comprise changes in the size or composition of the Group's share capital and related expenses as well as raising of loans, repayment of interest bearing debt and payment of dividends to shareholders. Cash and cash equivalents comprise cash, short term bank loans and short term securities which are readily convertible into cash and which are subject only to insignificant risks of changes in value. The allocation of revenue to activities and geographical markets is disclosed where these activities and markets differ significantly in the organisation of sales of goods and services. No events materially affecting the Company's financial position have occurred subsequent to the financial year-end. Breakdown of revenue by business segment: Pharma products1,055,764968,5041,019,834954,513Non-Pharma products620,512410,559324,560309,327R&D Services014,81100 1,676,276 1,393,874 1,344,394 1,263,840 Breakdown of revenue by geographical segment: North America944,705696,650648,753575,643Europe550,986591,829515,228577,017South East Asia169,80888,043169,636107,316South America10,7772,73810,7772,738Other countries014,61401,126 1,676,276 1,393,874 1,344,394 1,263,840 989000 830000 552000 726000 75000 54000 75000 0 607948000 619898000 564521000 582950000 62879000 56729000 61051000 56588000 15526000 12491000 10419000 8714000 6062000 3969000 3161000 2420000 692415000 693087000 639152000 650672000 1233 1182 855 868 For 2025 the remuneration of Management was DKK 15,921 thousand (2024: DKK 13,376 thousand), where DKK 321 thousand (2024: DKK 311 thousand) was pension. Remuneration of Management is aggregated for the Board of Directors and the Executive board, since the Exectuive board consits of one director. The Company has no incentive programmes. For 2025 the remuneration of Management was DKK 15,921 thousand (2024: DKK 13,376 thousand), where DKK 321 thousand (2024: DKK 311 thousand) was pension. Remuneration of Management is aggregated for the Board of Directors and the Executive board, since the Exectuive board consits of one director. Part of the remuneration to the Company's Executive Board is paid by the parent Company. The Company has no incentive programmes. 198828000 184188000 194229000 179673000 126496000 127182000 113585000 117633000 325324000 311370000 307814000 297306000 0 0 6684000 11731000 2438000 1626000 412000 1176000 62093000 119930000 61937000 119930000 27405000 10973000 26341000 6397000 8319000 6023000 0 6475000 -82966000 -77791000 -62555000 -77906000 -150000 0 -150000 0 Other tax consist of paid withholding tax DKK 600 thousand (2024: DKK 0 thousand) Other tax consist of paid withholding tax DKK 600 thousand (2024: DKK 0 thousand) -86292000 -32353000 -86292000 -32353000 -194549000 -338119000 -194549000 -338119000 1354007000 60000 262331000 709634000 293836000 0 -7000 -91000 0 0 0 0 20668000 0 52992000 7000 0 3371000 0 110000 58280000 30381000 2128000 0 -88661000 1412280000 30434000 281665000 709634000 258057000 918753000 19000 106527000 279611000 5692000 0 503000 -61000 0 0 129322000 12000 29476000 35129000 0 0 0 3189000 0 0 1048075000 534000 132753000 314740000 5692000 364205000 29900000 148912000 394894000 252365000 Development of medical products is defined as products with an active pharmaceutical ingredient requiring regulatory approval for the product to be developed, manufactured and sold legally. Development projects regarding medical products include salaries, wages and other costs for development and test of products for customers. The carrying amount of completed projects is DKK 364,205 thousand. The impairment test shows a higher commercial value. The carrying amount of projects in progress is DKK 252,365 thousand. The impairment test shows a higher commercial value. Development projects is regarding pharmaceutical oral products and dietary supplements. Products with pharmaceutical ingredients requires a regulatory approval, to be developed, manufactured and sold and expects to be launch within 1-5 years. Dietary supplements can be launch within 0-2 years. The projects are proceeding as planned by using resources allocated by management for the development including salaries, wages and materials cost as well as stability testing for the customer. 408071000 0 258208000 0 284480000 945936000 0 2768000 702567000 9356000 0 0 20336000 0 52992000 7000 0 3371000 0 110000 58280000 30381000 2128000 0 -88661000 1412280000 30381000 280069000 702567000 258057000 235393000 0 103544000 0 5692000 683360000 0 2076000 279611000 0 129322000 506000 29272000 35129000 0 0 0 3189000 0 0 1048075000 506000 131703000 314740000 5692000 364205000 29875000 148366000 387827000 252365000 Development of medical products is defined as products with an active pharmaceutical ingredient requiring regulatory approval for the product to be developed, manufactured and sold legally. Development projects regarding medical products include salaries, wages and other costs for development and test of products for customers. The carrying amount of completed projects is DKK 364,205 thousand. The impairment test shows a higher commercial value. The carrying amount of projects in progress is DKK 252,365 thousand. The impairment test shows a higher commercial value. Development projects is regarding pharmaceutical oral products and dietary supplements. Products with pharmaceutical ingredients requires a regulatory approval, to be developed, manufactured and sold and expects to be launch within 1-5 years. Dietary supplements can be launch within 0-2 years. The projects are proceeding as planned by using resources allocated by management for the development including salaries, wages and materials cost as well as stability testing for the customer. 1011804000 1479994000 76249000 81853000 239112000 -8113000 -1770000 -9076000 1137000 -4255000 219000 19016000 868000 3025000 197421000 0 12197000 151000 0 2414000 13203000 115094000 6596000 23199000 -160220000 1017113000 1600137000 74486000 109214000 269644000 404234000 886244000 59096000 73461000 0 -39000 -3055000 -1723000 -511000 0 0 0 283000 0 0 34994000 83361000 6323000 1203000 0 0 6218000 0 0 0 439189000 960332000 63979000 74153000 0 577924000 639805000 10507000 35061000 269644000 834420000 1291154000 53598000 65839000 172246000 80583000 136293000 0 0 11455000 0 0 0 0 99388000 0 10441000 0 0 2075000 13203000 81406000 888000 0 -97625000 928206000 1498412000 54486000 65839000 183389000 381548000 837015000 45726000 65839000 0 22105000 24029000 0 0 0 30559000 79247000 3779000 0 0 0 6097000 0 0 0 434212000 934194000 49505000 65839000 0 493994000 564218000 4981000 0 183389000 295126000 12845000 307971000 -175668000 -14646000 -21562000 -4377000 -27761000 63957000 The carrying amount of group entities comprises a goodwill at a carrying amount of DKK 13,132 thousand less elimination of intra-group gains of DKK 5,813 thousand. Fertin India Private Ltd. Ltd. India 100.00 63611 -40053 Fertin Canada Inc. Inc. Canada 100.00 52106 58822 Cogent International Manufacturing Inc. Inc. Canada 100.00 -61640 -40435 Aspeya India Private Ltd. Private Limited India 100.00 2183 254 Vectura Fertin Pharma Malaysia SDN. BHD. Private Limited Malaysia 100.00 630 -150 Prepayments include accrual of expenses relating to subsequent financial years, including insurance, IT licenses, marketing fees and others. Prepayments include accrual of expenses relating to subsequent financial years, including insurance, IT licenses, marketing fees and others. 1370512 1370512000 1370511000 There is no difference in voting rights. A capital increase of DKK 1,000 has been effected through a merger, at a subscription price of DKK 7,506,300. 151037000 208931000 153334000 211228000 85165000 151037000 107901000 153334000 159659000 187546000 159659000 187546000 -213000 31319000 -213000 31319000 0 -1320000 0 -1320000 -20466000 -30852000 -22421000 -30852000 -52531000 -35656000 -27845000 -33359000 -1284000 0 -1279000 0 1600000000 0 1600000000 0 77464000 23098000 54366000 35560000 1600000000 0 1600000000 0 77464000 23098000 54366000 35560000 Deferred income, DKK 23,145 thousand (2024: DKK 19,343 thousand), consists of funding received for development of intangible assets, that will be recognised over the expected lifetime of the development project. Other rent and lease liabilities: GroupParent company DKK'0002025202420252024 Rent and lease liabilities21,08024,35821,08024,358 Group Rental and leasing obligations include rent obligations, as well as operational leases for cars, IT equipment and machines. Within 1 year, DKK 10,649 thousand (2024: DKK 10,179 thousand) is due, and in the period 1-5 years DKK 10,403 thousand (2024: 14,088 thousand), and more than 5 years DKK 28 thousand (2024: 91 thousand) is due. Rental and leasing obligations include rent obligations, as well as operational leases for cars, IT equipment and machines. Within 1 year, DKK 10,649 thousand (2024: DKK 10,179 thousand) is due, and in the period 1-5 years DKK 10,403 thousand (2024: 14,088 thousand), and more than 5 years DKK 28 thousand (2024: 91 thousand) is due. The Company is jointly taxed with Philip Morris ApS, which acts as administration company, and is jointly and severally liable with other jointly taxed group entities for payment of income taxes for the income year 2021 onwards as well as withholding taxes on interest, royalties and dividends falling due for payment on or after 16 September 2021. The Company has not provided any security or other collateral in assets at 31 December 2025. The Company has not provided any security or other collateral in assets at 31 December 2025. Parties exercising control Related partyDomicileBasis for control Aspeya Inc.Stamford, Connecticut, USAOwnership Philip Morris International Inc.Stamford, Connecticut, USAUltimate ownership Information about consolidated financial statements ParentDomicileRequisitioning of the parent company's consolidated financial statements Philip Morris International Inc.677 Washington blvd., Suite 1100, Stamford, Connecticut 06901, USAThe consolidated financial statement can be requisitioned in the following link: https://philipmorrisinternational.gcs-web.com/static-files/e051f6ce-a13d-4748-931f-796bdcc4c587 Related party transactions DKK'00020252024Group Sale of goods to group entities138,750145,192Other external expenses-17,400-11,835Staff costs-2,5930Financial expenses-62,093-119,930 Receivables from group entities30,59626,552Payables to group entities-1,768,397-1,330,605 323226000 309636000 -972000 -3546000 -525000 17071000 -75397000 -71767000 33496000 19788000 46914000 -7949000 -79337000 -42776000 -49957000 -16437000