Twenty Years of Experience – Solid Foundations For Further Growth
Our Presence in the Market Goes Back 20 Years
It all started on December 20th 1990 in Łódź, when
a pharmaceutical wholesale outfit under the name of Medicines, founded by two men – Jacek Szwajcowski and Zbigniew Molenda, opened for business. Before they hired the first staff and opened a warehouse, they had done everything by themselves. They worked from dawn to dusk, delivering medicines to pharmacy outlets in their two humble Polonez cars. And yet from the very start, they believed they were creating new quality on the market. Four months later, Medicines supplied pharmaceutical products to 40 pharmacies, and two years later – to more than 200 outlets. In autumn of 1997, the company carried out a successful IPO followed, in February 1998, by the floatation of its shares on the Warsaw Stock Exchange. By the way, Medicines was the first pharmaceutical distributor to make its debut on the Warsaw floor. The proceeds from the IPO were used to finance the intensive growth and consolidation of the pharmaceutical wholesale market. Back then, the Company changed its name from Medicines S.A. to Polska Grupa Farmaceutyczna S.A., emerging as the unquestionable leader of the pharmaceutical wholesale market. Since 2001, thanks to the innovative I Care for My Health customer loyalty scheme, PGF has intensified its growth in the retail segment. Currently, the scheme covers more than 2 thousand pharmacies throughout Poland; their distinctive orange-coloured logos can be found all over the country – at shopping malls, on the main streets of big cities, in small towns and villages. In 2008, PGF underwent
a profound reorganisation, as a result of which Central European Pharmaceutical Distribution N.V. was established –a holding company incorporated under the laws of the Netherlands with the strategic objective of developing
a network of retail pharmacies in the CEE region. The first investments were made in Lithuania and the UK. Today, PGF ranks among the largest players on the healthcare market in Poland and Lithuania. It employs some 7 thousand staff and generates annual revenues of nearly PLN 6bn. 14 wholesale warehouses, operating under the PGF brand in Poland and under the Limedika brand in Lithuania, cater to over 10 thousand retail pharmacies. The network of I Care for My Health pharmacies in Poland and the Gintarine Vaistine/Norfos Vaistine pharmacies in Lithuania serve almost 10m patient per month. An important area of the Group’s business is the sale of pharmaceuticals to hospitals, for which PGF Urtica (the leader of its market segment) is responsible. At present, PGF’s overarching objective is to provide the highest standard of pharmaceutical care, while ensuring equitable access to medicines. With that objective in mind, in 2007 the Company set up the I Care for My Health Foundation, which pioneered the efforts aimed at addressing the mounting barriers in access to medicines among Polish patients. The Foundation’s statutory goal is to help finance medicinal purchases by persons suffering from chronic conditions whose personal circumstances and financial situation are difficult. The total value of financial assistance offered by the Foundation since its inception has exceeded PLN 2m. In addition to the Foundation’s activity, PGF is implementing various assistance initiatives targeted at those pharmacy customers who need them most badly. Our strategy is to provide prime quality service at all levels of the pharmaceutical distribution chain. We keep exploring untried solutions, creating new operational standards in the industry. This is our key to success, and the performance we deliver confirms that we have chosen the right path. Currently, we are gearing up for a new challenge – to build a network of retail pharmacies in Central Europe. If we maintain the current rate of growth, we should accomplish that goal in a matter of a few years , says Jacek Szwajcowski, PGF’s President.
Forecasts of 2010 Results
Despite the robust condition of the pharmaceutical wholesale market in Poland, which in the third quarter of 2010 grew 8%-9% year on year, in the following quarter its performance may deteriorate – due mainly to the high base of 2009. According to estimates released by pharmaceutical market intelligence provider IMS, the annual growth rate of the market will decline from 5% after the first nine months of 2010 to some 3.6% at the year’s end. For that reason, PGF’s Management Board has already signalled that the achievement of its earlier forecast envisaging PLN 6bn in consolidated sales revenue may prove difficult. However, a possible undershooting of the forecast (by about 5%) is not large enough to justify revision of the performance guidance published by PGF in early March. The Group’s guidance for 2010 still includes a two-digit growth in net profit and maintaining the debt burden at a level of PLN 500m.
Modernisation of the Łódź Warehouse
In August 2010, the Company launched a project involving the expansion of its warehouse in Łódź. The project is due to be completed by the end of the year and will cost
a dozen or so million złoty. It includes the installation of a fully automated conveyor system for order picking and packaging of drugs. Up till now, we have only had
a semi-automatic system, which has required significant commitment on the part of the human personnel involved in the order picking process. The new system consists of 1,260 order picking channels, which will enable each operator to pick 1,200 separate orders in just one hour, which translates into 4 to 10-fold efficiency gains compared with the traditional methods of order picking , says Jacek Szwajcowski.
60+ Programme
On October 1st, a new initiative was launched at the
I Care for My Health pharmacies, designed to help patients buy medicines at affordable prices. The 60+ Programme is targeted at persons aged over 60 who would rather not overpay for their pharmaceutical purchases. Thanks to personal free cards, the Programme’s participants will be able to benefit from a special price offer covering almost 7 thousand prescription drugs.
A card holder can save up to PLN 50 per month, i.e. PLN 750 by the end of 2011. There are four convenient ways to register for the Programme: directly at a pharmacy, by letter, by phone or over the Internet. To register for the Programme, beneficiaries or persons authorised to act on their behalf must fill in a registration form. They are sent a card within two weeks of the registration. To benefit from price discounts, a beneficiary must show his or her card at any of the I Care for My Health pharmacies and the details on the prescription sheet (first name, second name and personal identification number) must be confirmed against his or her identity stated on the card. The cards are valid until December 31st 2011. The 60+ Programme cards are honoured by more than 1 thousand I Care for My Health pharmacies throughout Poland. For more details, visit: www.60plus.doz.pl.
The table below presents the financial highlights for Q3 2010 and for Q1-Q3 2010, along with year-on-year comparative data:
| Q3 2010 | Q3 2009 | Change | Q1-Q3 2010 | Q1-Q3 2009 | Change | |
|---|---|---|---|---|---|---|
| Sales revenue (PLNm) | 1,453.7 | 1,327.9 | 9.5% | 4,256.2 | 4,014.3 | 6.0% |
| EBITDA (PLNm) | 29.9 | 27.3 | 9.3% | 104.5 | 91.1 | 14.7% |
| EBITDA margin (%) | 2.1% | 2.1% | 0 p.p. | 2.5% | 2.3% | 0.2 p.p. |
| Operating profit (PLNm) | 22.3 | 19.5 | 14.7% | 81.9 | 67.8 | 20.9% |
| Operating margin (%) | 1.5% | 1.5% | 0 p.p. | 1.9% | 1.7% | 0.2 p.p. |
| Net profit attributable to owners of the parent(PLNm) | 13.8 | 6.9 | 101.1% | 47.1 | 29.0 | 62.8% |
| Net margin (%) | 1.0% | 0.5% | 0.5 p.p. | 1.1% | 0.7% | 0.4 p.p. |
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
