PGF – Impressive Sales Growth
“We have established our presence across all segments of the Polish market of pharmaceuticals distribution and a few months ago we also started to expand abroad,” says Jacek Szwajcowski, President of the PGF Group. “We have thus achieved a diversification of revenue sources whose benefits can best be seen in the very strong sales growth. The goal towards which we will be working now is to leverage the whole wealth of our potential and experience gained on the Polish market to quickly expand abroad”.
The second quarter saw the completion of another stage of the process aimed at dividing the PGF Group’s business into a wholesale segment and a retail segment. As a result of the efforts undertaken during that stage, the retail companies, which were earlier subsidiaries of different members of the PGF Group, were incorporated into CEPD N.V. Both PGF S.A. and CEPD N.V. are now positioned to focus on pursuing their respective strategic objectives - PGF S.A. specialises in wholesale and CEPD N.V. – in retail sale.
The streamlined structure of the PGF Group facilitates its international expansion, while helping improve the Group-wide business efficiency.“This is the right time to start looking for companies in the Central European markets that would fit in with our development concept, with a view to combining them with PGF S.A. The current situation on the financial markets is conducive to our investment plans, so we expect our potential acquisition targets from Central and Eastern Europe to be attractively valued,” says Mr Szwajcowski.
In the second quarter, the Group also embarked on efforts aimed at streamlining the operating processes in the wholesale segment.“The rapid growth of our business helps us exploit the potential synergies, and thanks to the generated savings the medicines in the pharmacies supplied by PGF SA can be priced more attractively for the patients,” adds Mr Szwajcowski.
The optimisation effort started in the second quarter has already led to a reduction of manpower by 284 full-time jobs. Another step was the reorganisation of the south-east region, which involved shutting down the warehouse in Tarnowiec and winding up the subsidiary based in that town, and dividing the responsibility for handling the sale in the region between the Kraków and Rzeszów-based companies.“The reorganisation will allow us to generate annual savings in the region of PLN 2m,”says Mr Szwajcowski.“We will also be able to unlock additional funds by selling our property in Tarnowiec”.
In the second quarter, the PGF Group also set out to revise the wholesale segment’s trading policies.“Because we want to capture the full potential for sales growth, we are simplifying the settlements procedure, as well as the arrangements underlying the cooperation between manufacturers, wholesalers and pharmacies,”says Jacek Szwajcowski.“The new, clear procedures and arrangements will make it easier for our business partners to manage the sale process, which in turn will translate into more attractive prices for the patients.”
The development strategy implemented by PGF S.A. should result in a significant sales growth both domestically and in foreign markets, while the scale-up of its operations should lead to lower unit costs and, consequently, to bottom-line improvement.
