Polska Grupa Farmaceutyczna Reports Strong Performance for 2010
Pharmaceutical Market in 2010
In 2010, the Polish pharmaceutical market recorded the highest ever sales of medicinal products. Their value was close to PLN 27bn, up by 3.9% on the 2009 level. Over that time, the Group’s sales grew twice as fast as the market, to PLN 5,802m as at the end of 2010, versus PLN 5,427m in 2009. The Group also posted a substantial (10.7%) year-on-year improvement in net profit. In Q4 alone, revenue growth reached 9.4% (from PLN 1,413m in Q4 2009 to PLN 1,546m in the last three months of 2010).
Business Split into Wholesale and Retail Parts
In 2008, PGF’s business was split into wholesale and retail parts. PGF directly manages the part responsible for wholesale, sale to hospitals and services to manufacturers, whereas the retail part has come under the management of Central European Pharmaceutical Distribution NV of Amsterdam, a wholly owned subsidiary of PGF.
Activities in 2010 – Wholesale
Work carried out last year within the wholesale area included streamlining of the intra-group logistics, which involved expansion of the warehouse facility in Łódź, where a fully automated order picking and packaging line was launched.
PGF held on firmly to its leading position as a hospital supplier, catering to more than 80% of all Polish hospitals. In 2010, we won - in whole or in part - nearly 2,000 hospital tenders, where bids were scored based on the key criteria of product pricing and delivery time. We also reported a rapid growth of the services to manufacturers segment, as part of which PGF provides services involving direct sales, marketing research, operation of loyalty schemes, storage and transport, and call centre services.
Activities in 2010 – Retail
As at the end of 2010, CEPD NV had operating companies in Poland, Lithuania and the UK.
Poland - DOZ S.A.
2010 was a time of busy activity for DOZ S.A. Our greatest achievement was the roll-out and implementation of the Senior and 60+ Programmes, designed to help individuals who are unable to fill their prescriptions and continue treatment due to financial difficulties. Irrespective of those, we deployed a couple of “tailor made” programmes suited to the needs of narrowly defined customer groups – the Mum and Baby and Health Energy Programmes. Given the large and growing interest in the programmes, we intend to carry them on - concludes Jacek Szwajcowski, President of PGF’s Management Board.
In 2010, DOZ SA expanded and upgraded www.doz.pl, the leading health-related website in Poland, which includes the Dbam o Zdrowie (I Care for My Health) On-Line Pharmacy. The I Care for My Health On-Line Pharmacy offers a selection of over 17 thousand medicinal products, the widest to be found on the market, in addition to attractive rebate schemes and daily promotions. As the only on-line pharmacy in Poland, it is based on the chain of physical I Care for My Health outlets, where patients can collect products ordered via the Internet. Thanks to this solution, personal contact with a pharmacist is maintained, allowing pharmacists to control purchases made by patients and offer helpful advice. It also makes it possible to fill orders for prescription drugs in a perfectly legal way. We are happy to see the www.doz.pl portal gaining in popularity. Every month the website attracts nearly 3 million visitors - comments PGF’s President.
In the spring of 2010, DOZ SA launched an SMS Pharmacy, allowing patients to order products via a mobile phone by sending a text message to 661 004 000.
Lithuania- UAB NFG
In 2010, CEPD NV finalised an investment commenced in 2007. In June, an agreement was signed in Amsterdam whereby Central European Pharmaceutical Distribution NV purchased 66,811,675 shares in UAB Nacionaline Farmacijos Grup. Following the purchase, CEPD NV holds 100% of the shares in UAB NFG.
The Group’s Development in the CSR Area
The main vehicle through which the PGF Group pursues its CSR mission is the Dbam o Zdrowie (I Care for My Health) Foundation. Last year alone, the Foundation gave nearly PLN 800 thousand in donations for the neediest. Since its inception, the Foundation has provided support to some 20 thousand individual beneficiaries and to 100 Non-Profit Organisations. To date, the total value of support given by the Foundation, which is a NPO itself, has exceeded PLN 2.5m. The most important projects supported by the Foundation in 2010 included relief for flood victims, support for Unmarried Mothers’ Homes, support for 50 hospices throughout Poland and support for the Foundation’s permanent beneficiaries, to name just a few.
Our CSR efforts in the previous year gained both attention and recognition. The Forbes magazine named PGF the most socially responsible firm from the Łódź region, while the Gazeta Finansowa weekly, in acknowledgement of the programmes run by the Company to support socially sensitive areas, included PGF in its quarterly Corporate Social Responsibility Report.
An element of PGF’s CSR activity is social education, understood as promotion of a healthy lifestyle and cultivation of the tradition of Polish apothecaries. PGF sponsors two museums in Łódź and in Lublin, and publishes The Most Famous Polish Pharmacies series.
PGF’s Membership in GIRP
PGF’s activity was also appreciated on the international arena, as evidenced by its inclusion in GIRP (Groupement International de la Répartition Pharmaceutique/European Association of Pharmaceutical Full – line Wholesalers) – an organisation of European pharmaceutical distributors, which has 600 member firms from 31 countries. To aspire to GIRP membership, a firm must meet very high standards, mainly with respect to the quality and level of services. By joining GIRP, we will stay abreast with the newest European regulations related to pharmaceutical distribution, as well as state-of-the-art technologies and solutions in the area of service to pharmacies - says Jacek Szwajcowski.
Other Activities
In February 2010, a new PGF Group company - Business Support Solutions - officially launched its operations. BSS is an advanced shared-service centre which supports financial, accounting, payroll, legal services, as well as consolidated financial statements input.
Plans and Forecasts for 2011
2011 promises to be as good as the previous year. We plan to replicate the two-digit growth of net profit -predicts the President of PGF. According to estimates, this year’s capital expenditure will be on a par with the previous year’s, amounting to some PLN 35m.
The table below presents the Q4 2010 and full-year financial highlights, along with year-on-year comparative data:
| Q42010 | Q42009 | Change | Q1-Q4 2010 | Q1-Q4 2009 | Change | |
|---|---|---|---|---|---|---|
| Sales revenue (PLNm) | 1,546 | 1,413 | 9.4% | 5,802 | 5, 427 | 6.9% |
| EBITDA (PLNm) | 36 | 55 | -34.1% | 141 | 146 | -3.7% |
| EBITDA margin (%) | 2.3% | 3.9% | -1.6pp | 2.4% | 2.7% | -0.3pp |
| Operating profit (PLNm) | 29 | 47 | -38.5% | 111 | 115 | -3.4% |
| Operating margin (%) | 1.9% | 3.3% | -1.4pp | 1.9% | 2.1% | -0.2pp |
| Net profit attributable to owners of the parent (PLNm) | 24 | 35 | -32.5% | 71 | 64 | -10.7% |
| Net margin (%) | 1.5% | 2.5% | -1pp | 1.2% | 1.2% | 0pp |
| Earnings per share (PLN) | 1.92 | 2.8 | -31.4% | 5.75 | 5.12 | +12.3% |
For further details please contact:
Renata Borkowska – Kubiak
Spokesperson for PGF S.A.
Landline: (+48 42) 200 79 19
Fax: (+48 42) 613 35 35
Mobile: (+48) 785 858 991
E – mail: renata_borkowska-kubiak@pgf.com.pl / biuroprasowe@poczta.pgf.com.pl
