Pelion's activities

Increase in retail sales of pharmaceuticals and cosmetics (in July by 16.1% y-o-y),

Polish market grows at faster than the European market – in 2009, the Polish market is estimated to grow by 6%, and in 2010-2011 by 8%,

The PGF Group: operating profit growth (nearly 21% y-o-y), EBITDA growth (over 22% y-o-y), net profit growth (by 5.6% y-o-y).

In the second quarter of 2009, Polska Grupa Farmaceutyczna recorded sales revenue of PLN 1,318m (up by 0.6%). In H1 2009, total revenue was PLN 2,686m, up by 0.9% year on year, which is less than the growth rate of the pharmaceutical market in the same period (approx. 12%).

-Following weaker results in 2008 and in the face of the growing financial and economic crisis, in the previous quarters PGF took painful but needed actions in order to adapt the Group to the less favourable environment-said Jacek Dauenhauer, Vice-President of PGF S.A. in charge of Financial Strategy and Development. -The implemented cost savings programme (for instance, the headcount was reduced by over 500 employees), and the reduction of our investments to the necessary minimum already yield first effects in the form of the Group’s improved profitability. However, our sales margins us remain very low (net margin below 1%), which is typical for the sector. As a result, in a more difficult economic environment all operational and business development decisions must first of all ensure the security of the Company’s operations-he added.

In the first half of the year, the Group managed to improve EBITDA by 22.2%, with the improvement of as much as 51.3% in the second quarter alone.


-The improvement in operating efficiency remains in our focus in the current year. We are interested in healthy sales, which not only generate profits at the Group, but also allow us to keep the risk of receivables under control-said Jacek Dauenhauer.

The improvement of operating performance was accompanied by an increase in pre-tax profit, as financial expenses(on a net basis, net of financial income) charged to the income statement were only slightly higher year on year.

However, in the consolidated income statement the PGF Group discloses a relatively high effective tax rate. It follows from the PGF Group’s inability to create a tax group, which in a situation when certain companies are loss-generating while others are profitable increases the proportion of taxation in pre-tax profit.

Despite the heavier tax charges, in the first half of the year the PGF Group managed to improve its net result, which grew by 5.6% year on year. By doing so, PGF is now back on the path of earnings growth.

Consolidated financial performance of Polska Grupa Farmaceutyczna