Pelion's activities

Good performance in Q1 2011
According to IMS Health, wholesale distribution to pharmacies in Q1 2011 exceeded PLN 6.3bn, which implies a year-on-year increase by 10%, or PLN 600m. The result seems satisfactory, especially given that the market growth in the corresponding period of the previous year was barely above 1%. PGF opened the year with considerable success. In the period from January to March, the Group earned PLN 17m in consolidated net profit (up 21.4% yoy) on PLN 1,679m sales revenue (up 20.4% on Q1 2010). Earnings per share were up by 23.9%. The Company upholds its forecast assuming a double-digit growth of net profit throughout 2011. Following significant changes of its marketing policy and the implementation of cost restructuring measures in previous periods, Polska Grupa Farmaceutyczna has seen strong organic growth, which enables it to exploit the economies of scale and, given a relatively moderate increase in operating costs, improve its performance. It must be emphasised that the Group is capable of delivering growth by keeping tight control over receivables and without significant increases in net debt, which is maintained below the PLN 500m threshold set by the Management Board.

Ten years of the Dbam o Zdrowie brand
Last year was dominated by celebrations of the 20th anniversary of Polska Grupa Farmaceutyczna. This year is also very special for us, as it marks ten years since the launch of the Dbam o Zdrowie programme, with which the Company entered the retail segment. Following the inclusion of Cefarm Łódź and Apteki Polskie, together with their pharmacy chains, into the Group in 2004, we began to actively expand our retail presence, as a result of which retail operations became a separate business line in 2008. Management of this business area was entrusted to Central European Pharmaceutical Distribution (CEPD) N.V, a holding company wholly-owned by PGF.

Central European Pharmaceutical Distribution N.V.
Central European Pharmaceutical Distribution N.V. is a holding company incorporated under the Dutch law, whose main strategic objective is to develop a pharmaceutical retail network in Central and Eastern Europe. The holding company operates through local operating subsidiaries, active in different countries of the CEE region. As at the end of Q1 2011, CEPD N.V. had operating companies in three European countries: Poland, Lithuania and the UK. They managed a network comprising a total of 2,533 pharmacies. This gives CEPD N.V. a leading position on the pharmaceutical market in Central and Eastern Europe. The large scale of CEPD N.V.'s operations enables it to implement advanced management and organisational solutions at its pharmaceutical companies. Thanks to its presence on various markets, the Group is able to transfer the best solutions between companies operating in different countries, thus winning a sustainable competitive advantage on the local markets.

POLAND:
652 Dbam o Zdrowie pharmacies (own)
307 Dbam o Zdrowie pharmacies (franchise)
1148 Dbam o Zdrowie pharmacies (partner)

LITHUANIA:
144 Gintarine Vaistine pharmacies (own)
69 Norfos Vaistine pharmacies (50% ownership)
211 BVG pharmacies (partner)

UNITED KINGDOM:
2 pharmacies (own)

Poland
The Dbam o Zdrowie pharmacies form Poland's largest pharmaceutical group operating under a common brand. At present, it comprises over 2.1 thousand retail outlets. Most of these are pharmacies operating under franchise or partnership agreements, owned by Polish pharmacists who decided to join the Dbam o Zdrowie programme to benefit from the economies of scale and advanced management solutions, such as seasonal discounts at times of peak demand or programmes addressed to individual groups of patients.

The initiatives we take particular pride in include the implementation and execution of the 60+ and Senior programmes . The aim of these programmes is to provide support to patients who need it the most, as their financial or personal circumstances prevent them from buying prescribed medicines and continuing treatment. Thanks to our efforts, hundreds of thousands of patients have gained access to more affordable drugs. In addition, we have deployed several “tailor made” programmes, suited to the needs of narrowly defined customer groups – the Mum and Baby and Health Energy Programmes.

At the pharmacies owned by DOZ S.A. we have implemented additional centralised management tools, including centrally-managed pricing, product, display and procurement policies, which enable us to negotiate contract terms directly with manufacturers and offer them additional services. Becoming a Group member improves the comfort of work, as pharmacists - who no longer need to bother with organisational or administrative matters, may devote more attention to their patients. That strategy gives us an ever increasing competitive edge. The DOZ S.A. pharmacies report sales 15% above the average on the domestic pharmaceutical market.

In addition to traditional sales through pharmacies, DOZ S.A. also operates the largest on-line pharmacy and the Dbam o Zdrowie website service (www.doz.pl), one of the most comprehensive and advanced health-related websites in Poland. Every day, the website attracts 3 million visitors, who place 100 thousand orders at its e – pharmacy. The on-line pharmacy (www.doz.pl) offers a selection of over 18 thousand products, the widest to be found on the market, in addition to attractive rebate schemes and daily promotions. It is the only on-line pharmacy in Poland that relies on a physical network of the Dbam o Zdrowie pharmacies, as a result of which all orders, even those for prescription drugs, are filled in a safe manner, in compliance with the Polish law.

DOZ S.A. also runs the Dbam o Zdrowie programme, which - with over three million participants - is one of the largest customer loyalty schemes in Poland. Under the programme, whose 10th anniversary falls this year, patients collect credits for purchases made at the Dbam o Zdrowie pharmacies. The credits may be redeemed and exchanged for attractive awards from a special catalogue. In December 2010, the programme participants were offered additional service – a medical help line. A patient who calls 22 527 97 17 will receive important health-related information and will have an opportunity to consult a specialist.

Lithuania
In Lithuania CEPD N.V. is present through UAB Nacionaline Farmacijos Grupe (UAB NFG) and runs its own pharmacies (144 outlets) under the Gintarine Vaistine brand. Moreover, UAB NFG holds 50% of shares in Norfos Vaistine, which operates through a chain of 69 own pharmacies, located mainly at Norfa stores. In addition, the company manages a chain of Baltijos Vaistinu Grupe partnership pharmacies. UAB NFG is also the owner of Limedika - the second pharmaceutical wholesaler in Lithuania. In June 2011, an on-line pharmacy will be launched in Lithuania.

United Kingdom - DOZ UK
To serve Polish patients and their families living in the United Kingdom, two Dbam o Zdrowie pharmacies, managed by DOZ UK, were opened in London. Quick access to professional pharmaceutical care, ability to receive free-of-charge advice in the native language, plus a wide range of Polish products, are all very convenient for Poles living abroad.

In the years to come, CEPD N.V. intends to focus its efforts on three main areas: further business development on CEPD N.V.’s existing markets, international expansion onto the markets of Central and Eastern Europe, and leveraging significant synergies offered by the economies of scale.

Łódź Maraton - Dbam o Zdrowie
The 10th anniversary of the Dbam o Zdrowie Programme is a perfect opportunity to thank our patients for the trust they place in us every day. It is also the right time for a new pro-health initiative, i.e. the Łódź Maraton Dbam o Zdrowie running event. Our mission is reflected in the words: We are there to protect your health. Consequently, we take care of our patients' health not only through the offering of our pharmacies, but also through the promotion of healthy lifestyle. Nowadays, the lack of physical activity and subsequent lifestyle diseases represent one of the biggest health threats. Therefore, we have decided to organise a sports event which will raise the health awareness of its participants. On June 5th 2011, the first Łódź Maraton Dbam o Zdrowie marathon will be held in Łódź. The event is organised under the auspices of Mrs Hanna Zdanowska, President of Łódź. The Łódź Maraton Dbam o Zdrowie marathon is intended to be a unique sports and social event. Modelled after the famous London Marathon, it is to promote healthy lifestyle, physical activity and modern forms of charity. We hope that the marathon will be appreciated both by its participants and the residents of Łódź, and that it will become a fixture in the calendar of Polish sports events, promoting pro-health attitudes among people, says Jacek Szwajcowski, President of PGF.

Podaruj Zdrowie campaign in Łódź
In pursuit of the Company's mission, we provide our patients with advice and assistance, promote healthy lifestyle and ensure easy access to pharmaceuticals for those who need them most badly. With these aims in mind, on April 26th-29th 2011, the Dbam o Zdrowie Foundation carried out the Podaruj Zdrowie campaign in Łódź. As part of the campaign, inhabitants of Łódź in a difficult financial and personal situation could apply for financial assistance to purchase medicines. All the campaign's beneficiaries will be entitled to receive free-of-charge pharmaceuticals at one of over two thousand Dbam o Zdrowie pharmacies. The maximum amount of aid was set at PLN 300. The Podaruj Zdrowie campaign in Łódź was the 8th edition of the initiative since the establishment of the Dbam o Zdrowie Foundation in 2007. Previous editions took place in the provinces of Kraków, Olsztyn, Rzeszów and Gdańsk, as well as other regions of Poland. The campaign has already been organised in 17 cities or towns, in 6 regions of the country, and provided support to 17 thousand persons. The aggregate amount of aid transferred under the campaign was PLN 1.5m, including 802,533 thousand distributed in 2010 alone.

The table below presents the Q1 2011 financial highlights, along with year-on-year comparative data:

For further details please contact:
Renata Borkowska – Kubiak
Spokesperson for PGF S.A.
Landline: (+48 42) 200 79 19
Mobile: 785 858 991
E – mail: renata_borkowska-kubiak@pgf.com.pl