PGF – Stable Business in Unstable Times
"The past years have shown that our business sector is able to resists recession trends. Due to social and demographic changes, sales of pharmaceuticals will maintain a steady growth in the coming years", says Jacek Szwajcowski, President of the PGF Group. Owing to the diversification of revenue sources carried out in the past, our company has a solid basis for further development despite the global economic turmoil.
During the first half of 2008, PGF was legally and actually divided into the wholesale and retail segments. Since July this year, the wholesale activities have been conducted under the PGF brand, whereas the retail business operates under the Central European Pharmaceutical Distribution (CEPD) N.V. brand. CEPD N.V. is a business operator for the largest in Central and Eastern Europe group of over 2,300 pharmacies located in Poland, Lithuania and Great Britain. In Poland, patients can also use the services provided by DOZ.pl, the country’s largest Internet pharmacy.
The Company’s strategy envisages international development on markets with strong growth potential. The primary targets will be the Czech Republic, Slovakia, Romania, Serbia, Belarus and Ukraine. The funds necessary to finance acquisitions in foreign markets are to be obtained through capital increase and offering new shares to Polish and foreign investors.
"This is a very good moment for market consolidation in Central and Eastern Europe. Meeting the expectations of patients and manufacturers of pharmaceuticals and OTC products requires not only the most advanced pharmaceutical knowledge but also professional organisation and management of the whole distribution network. Therefore, CEPD N.V. has offered individual pharmacists help in business management" –says Marta Wiśniewska, President of CEPD N.V.
"In the third quarter, Polska Grupa Farmaceutyczna won a tender announced by Astra Zeneca Polska for the delivery of products in a direct sales system. This is the first contract in Poland and one of the key projects in our sector this year", says Jacek Szwajcowski.
The commencement of cooperation in the direct distribution system proves that we are well prepared to provide top quality services in every segment of the market of our operations. In the direct sales system, the manufacturer remains the sole owner of the products throughout the entire chain of sales to pharmacies. Distributors play the role of logistic operators who stock, transport and sell the goods to pharmacies on behalf of the manufacturer and at its expense. Astra Zeneca has limited the cooperation to three distributing companies, thereby considerably enhancing their competitive position.
Consolidated financial results of Polska Grupa Farmaceutyczna
| Q1-Q3 2008 | Q1-Q3 2007 | Change | |
| Sales revenue (PLN ‘000) | 3, 876, 606 | 3,198,734 | 21.19% |
| EBITDA (PLN ‘000) | 70,957 | 75,402 | -5.90% |
| EBITDA margin (%) | 1.83% | 2.36% | -0.53 p.p. |
| Operating profit (PLN ‘000) | 51,958 | 60,449 | -14.05% |
| Operating margin (%) | 1.34% | 1.89% | -0.55 p.p. |
| Net profit attributable to equity holders of the parent (PLN ‘000) | 28,100 | 48,192 | -41.69% |
| Net margin (%) | 0.72% | 1.51% | -0.78 p.p. |
