With us, the patient always comes first
In Q3 2013, Pelion posted revenue of almost PLN 1.8bn, which represented a year-on-year growth of over 10%. The higher revenue failed to offset a decline in sales margin, which drove EBITDA and net profit down to PLN 30.5m and PLN 11.6m, respectively, with net margin remaining narrow, at 0.7%.
Traditionally, the pharmaceutical industry hits a low season in terms of revenue in the third quarter of the year, with two holiday months significantly depressing sales. September is the first month when sales tend to recover, driven by higher numbers of people falling sick. Lower sales usually translate into losses, especially in the retail segment. However, our year-to-date results show that we have managed to maintain a positive margin in retail, and significantly improve our performance on the previous year, when pharmacies were severely hit by the legislative changes enacted under the Drugs Reimbursement Act. In the current year, the adverse effects of further tightening the statutory margin on reimbursable drugs have also started to hurt our wholesale business.
Patients in focus
According to Barometr PharmaExpert, the share of patient co-payment in the average price per drug package on the pharmacy market was 74% in Q3 2013, up by approximately 6 pp relative to Q3 2011. With drug spending on the rise, measures aimed at reducing drug treatment costs are particularly important. Accordingly, Pelion uses its best efforts to ensure that patients can buy safe drugs comfortably and at affordable prices.Overpriced pharmaceutical products are a problem which largely affects older people, for whom drug treatment costs represent a significant portion of the home budget. With such people in mind, Pelion operates the '60+ Programme', which provides access to affordable drugs and advice on the cheaper generic products. Under the Programme, people over 60 years of age are offered low prices on non-refundable prescription drugs and selected OTC drugs all year round. Currently, 1.3 million people have entered the Programme, making savings of more than PLN 154m. The '60+ Programme' was ranked among the most important corporate social responsibility projects by the "Wprost” weekly.
Pelion's innovative tools, notably www.doz.pl, Poland's largest and most advanced healthcare website, seek to reduce drug treatment costs and constantly enhance service quality. Doz.pl provides access to specialist knowledge on disease prevention and pharmaceutical and medical care. It also offers the widest range of products on the market, comprising 20 thousand medicinal products that can be bought online and collected at pharmacies across Poland. Appteka, a mobile application launched by Pelion, is also gaining in popularity, enabling patients to order drugs and other pharmacy products via smartphones, which are being increasingly used by them.
Pelion's innovative tools, notably www.doz.pl, Poland's largest and most advanced healthcare website, seek to reduce drug treatment costs and constantly enhance service quality. Doz.pl provides access to specialist knowledge on disease prevention and pharmaceutical and medical care. It also offers the widest range of products on the market, comprising 20 thousand medicinal products that can be bought online and collected at pharmacies across Poland. Appteka, a mobile application launched by Pelion, is also gaining in popularity, enabling patients to order drugs and other pharmacy products via smartphones, which are being increasingly used by them.
Achievements recognised
Pelion's subsidiary managing the Dbam o Zdrowie chain of pharmacies is the first company in Poland and in the wider CEE region to have been certified to the Global Standard for Workplace Gender Equality in recognition of its commitment to gender equality, including in terms of pay and career development. With the certificate, the Dbam o Zdrowie chain has joined the global community of companies committed to promoting equal opportunities in the workplace.
"The Gender Equality Project's certificate comes as a great honour, but most importantly it commits us to continue pursuing and promoting equal career opportunities for men and women. This is of particular relevance to our organisation, where women represent a vast majority of the workforce," emphasised Jacek Szwajcowski, President of the Management Board of Pelion S.A.
Aware of the fact that capital markets increasingly recognise the importance of non-financial reporting on environmental protection, social responsibility and corporate governance, we are pleased that Pelion S.A. has been ranked among the best ESG reporting companies. The Group won a distinction in the category of companies associated with healthcare, as well as in the classification based on indices.
The Company was also named “Best Business Partner” by the "Home&Market” monthly in recognition of the prime quality of its services, which are tailored to meet and exceed customers' needs and expectations.
More changes to come
As of January 1st 2014, the statutory wholesale margin on reimbursable drugs will be reduced to the target level of 5%. Pelion is making early efforts to find cost savings. Some of the adaptation measures considered by the Company are to lower the frequency of drug deliveries to pharmacies and to grow the scale of its business with a view to further reducing average costs. Notwithstanding any changes in the legal framework, Pelion is set to implement its strategy of geographical and business diversification and leveraging synergies across business lines.
In face of challenges lying ahead of the Polish pharmaceutical industry, securing sources of finance to fund growth is of fundamental importance. To this end, the Pelion Management Board has resolved to launch capital raising for PGF S.A., which manages the Group's wholesale arm. One of the options considered by the Group is to sell PGF shares in an IPO. Any potential floatation of PGF S.A. will be preceded by a process to make all the Pelion Healthcare Group companies involved in wholesale directly subordinate to PGF.
In face of challenges lying ahead of the Polish pharmaceutical industry, securing sources of finance to fund growth is of fundamental importance. To this end, the Pelion Management Board has resolved to launch capital raising for PGF S.A., which manages the Group's wholesale arm. One of the options considered by the Group is to sell PGF shares in an IPO. Any potential floatation of PGF S.A. will be preceded by a process to make all the Pelion Healthcare Group companies involved in wholesale directly subordinate to PGF.
The table below presents the Q3 2013 financial highlights, along with the year-on-year comparative data:
| Q1-Q3 2013 | Q1-Q3 2012 | Change (%)* | Q3 2013 | Q3 2012 | Change (%)* | |
| Revenue (PLNm) | 5,471.2 | 4,931.9 | 10.9% | 1,779.9 | 1,609.6 | 10.6% |
| EBITDA (PLNm) | 136.4 | 87.3 | 56.3% | 30.5 | 29.7 | 2.5% |
| EBITDA margin (%) | 2.5% | 1.8% | +0.7 pp | 1.7% | 1.8% | -0.1 pp |
| Operating profit (PLNm) | 109.6 | 58.2 | 88.3% | 21.7 | 20.0 | 8.4% |
| Operating margin (%) | 2.0% | 1.2% | 0.8 pp | 1.2% | 1.2% | 0 pp |
| Net profit attributable to owners of the Parent (PLNm) | 67.8 | 17.4 | 289.6% | 11.6 | 6.5 | 78.5% |
| Net margin (%) | 1.2% | 0.4% | +0.8 pp | 0.7% | 0.4% | +0.3 pp |
| Earnings per share (PLN) | 6.00 | 1.47 | 4.53 | 1.04 | 0.56 | 0.48 |
* Change calculated based on figures in PLN '000
For further details please contact:
Renata Borkowska-Kubiak
PR Executive Officer / Press Officer for Pelion S.A.
Tel.: (+48 42) 200 79 19
Mobile: (+48) 785 858 991
Fax: (+48 42) 200 75 35
E-mail: renata_borkowska-kubiak@pelion.eu
Pelion S.A. has operated on the market for twenty-three years. It began life as a local pharmaceutical wholesaler. In 1998, the Company shares were floated on the Warsaw Stock Exchange. Proceeds from the initial public offering fuelled the Company’s dynamic growth and allowed it to embark on consolidation of the pharmaceutical wholesale market. Since its floatation, the Company has secured a top position among domestic distributors of medicinal products.Today, Pelion Healthcare Group is one of the largest groups operating on the healthcare markets in Poland and Lithuania. The Company's services cover all market segments (wholesale, retail and sale to hospitals) and are targeted at individual patients, pharmacies, hospitals and manufacturers. As a holding company, Pelion S.A. oversees all areas of the Company’s operations, which are conducted by PGF S.A. and Pharmapoint Sp. z o.o. (wholesale), PGF Urtica Sp. z o.o. (sale to hospitals), CEPD N.V. (retail sale), and Pharmalink Sp. z o.o. (services for manufacturers).
