25 years working for industry growth
The many anniversaries this year − 25th anniversary of the first free elections in Poland, 15th anniversary of Poland joining the NATO, and 10th anniversary of Poland’s EU accession − have even greater meaning for Pelion Healthcare Group, as these events also coincided with key events in our Company’s history. In 1989 we launched pharmaceutical wholesale operations (PGF). The year 1999 saw the commencement of our hospital supply operations (PGF Urtica). Five years on, in 2004, we entered the retail segment (Apteki Dbam o Zdrowie pharmacy chain).
In the course of our business, we have taken full advantage of opportunities offered by the free-market economy. From a small local wholesaler Pelion has evolved into a key player in the Polish and Lithuanian pharmaceutical markets, with our sales and customer base growing more every year.
Exceptional service quality, flexibility and the ability to adapt services to customer needs, as well as the tireless search for new and innovative solutions, are cornerstones of the Company’s dynamic development and growth in revenue which outperforms the competition. Strong performance figures have moved Pelion Healthcare Group up the list of 500 Largest Polish Businesses published by Rzeczpospolita, where we now rank 29th.
“Our business was among those which helped lay the foundation for the free-market economy in Poland. Today, 25 years on from that transformation, Poland’s medicine distribution system, built from scratch by Polish entrepreneurs, is one of the most advanced in Europe,” commented Jacek Szwajcowski, President of the Management Board of Pelion S.A.
Exceptional service quality, flexibility and the ability to adapt services to customer needs, as well as the tireless search for new and innovative solutions, are cornerstones of the Company’s dynamic development and growth in revenue which outperforms the competition. Strong performance figures have moved Pelion Healthcare Group up the list of 500 Largest Polish Businesses published by Rzeczpospolita, where we now rank 29th.
“Our business was among those which helped lay the foundation for the free-market economy in Poland. Today, 25 years on from that transformation, Poland’s medicine distribution system, built from scratch by Polish entrepreneurs, is one of the most advanced in Europe,” commented Jacek Szwajcowski, President of the Management Board of Pelion S.A.
Problems are challenges we can overcome
The first quarter of the year was not an easy time for distributors of pharmaceuticals in Poland − as of January 1st, the regulated profit margin on reimbursable drugs was capped at 5%, which made their sale completely unprofitable. At the same time, amendments to the reimbursement lists came into force, bringing retail price reductions for 96% of those reimbursable drugs. However, the retail price cuts, and the resultant squeeze on margins for distributors, failed to bring prices down at pharmacy counters − patient co-payments in Poland are still among the highest in Europe.
In Q1 2014, Pelion Healthcare Group was involved in the ongoing streamlining of its business processes to bring its operations more in line with the continually changing market landscape. Pelion is set to consolidate its position in the challenging pharmaceuticals market as the forerunner and leader in e-health innovation, and to build competitive strength by offering top quality, fast and reliable service to meet the needs of its customers and patients.
We are building a model of modern healthcare with the help of www.doz.pl − the biggest and most advanced health-related website in Poland, innovative mobile applications designed to support patients on medication, and a drug insurance programme − the first of its kind in Poland.
Operating in the market with fixed prices of reimbursable drugs and a ban on pharmacy advertising is a major challenge for Pelion Healthcare Group. Pharmacies are effectively prevented from reaching patients with any message. As a result, they cannot inform customers of their offerings or the services they provide, including pharmaceutical care, and even the modern and widely-accepted forms of communication with patients are prohibited. Therefore, pharmacies have been deprived of the right to compete with other retail outlets, which also offer popular OTC products but are not restricted in how they can communicate with customers.
Pelion’s mission is to ensure that pharmacies are an important element of the overall healthcare system. The experience of other European pharmaceutical markets shows that the pharmacy is an excellent setting for disease prevention, health promotion and education activities, and, as such, can be an effective tool in improving the operation of the healthcare system.
Objectives for the months to come
Pelion Healthcare Group’s objective for the months to come is to continue the development of all lines of its business and to leverage synergies arising from the Group’s presence along the entire pharmaceutical distribution chain, while maintaining profitability and a healthy accounts receivable portfolio in every business segment.
In wholesale to pharmacies, the challenge will be to steadily increase our market share. PGF S.A. is not to be only a supplier of drugs, but should also provide support to privately-run Polish pharmacies.
In supplies to hospitals, the goal is to remain the leader in terms of contracts awarded by tender.
In the area of services for drug manufacturers, the Company will focus on expanding the range of its services and acquiring new non-standard distribution projects.
Pelion Healthcare Group’s retail branch, which suffered the most as a result of the changes introduced by the Drugs Reimbursement Act, will require further restructuring measures. One of the key areas in need of improvement is operating performance, and so we will put a special focus on driving that up. The Company also plans to further improve the quality of pharmacies’ work and customer service standards, and to increase the number of franchise pharmacies.
The table below shows the Q1 2014 financial highlights, along with the year-on-year comparative data:
| Q1 2014 | Q1 2013 | Change (%)* | |
| Revenue (PLNm) | 1,946.8 | 1,925.9 | 1.1% |
| EBITDA (PLNm) | 45.3 | 64.2 | -29.4% |
| EBITDA margin (%) | 2.3% | 3.3% | -1.0 p.p. |
| Operating profit (PLNm) | 36.6 | 55.3 | -33.9% |
| Operating margin (%) | 1.9% | 2.9% | -1.0 p.p. |
| Net profit attributable to owners of the parent (PLNm) | 24.5 | 35.9 | -31.9% |
| Net margin (%) | 1.3% | 1.9% | -0.6 p.p. |
| Earnings per share (PLN) | 2.2 | 3.1 | -30.5% |
*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
Email: renata_borkowska-kubiak@pelion.eu
Pelion S.A. has operated on the market for 24 years, starting out 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 flotation, the Company has secured a top position among domestic distributors of medicinal products. Today, Pelion Healthcare Group is one of the largest groups operating in 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. (hospital sales), CEPD N.V. (retail sales), and Pharmalink Sp. z o.o. (services for manufacturers).
