PGF Emerges from Crisis with Renewed Strength
The first quarter of 2010 saw a sharp slowdown on the Polish pharmacy market, on a scale unseen in previous years. From January to March, the pharmaceutical market usually expanded at a rate of 8%-9%, but this year its growth hardly exceeded 1%, mainly on the negative growth in January.
The downturn was caused by the long and freezing winter, which led to lower incidence of diseases, eroding demand for medicines explains Jacek Szwajcowski, President of PGF’s Management Board. Last year we experienced a reverse trend – the first months of the year saw a very substantial rise in pharmaceutical sales. Thus, the weak growth of the market can also be put down to the high base effect. Even so, we do not fear a drop in sales, although the weaker performance in the beginning of the year will certainly weigh down on the market’s growth for the full year. A lot will be depend on the sector’s condition in the months to come, but we should note that both in February and in March our sales were back on a positive trajectory.
In Q1, PGF focused on developing the initiatives launched in 2009. We are particularly glad to see an ever increasing number of patients benefiting from the Senior Programme. By May, we had issued patients over the age of 75 with more than one hundred thousand cards, entitling their holders to 25% discounts on all prescription drugs available from I Care for My Health pharmacies. We were prompted to launch the scheme by the alarming statistics according to which as many as 40% of elderly people admit to giving up on prescription drugs due to shortage of funds. As a company operating in the health care sector, we cannot remain indifferent to the plight of senior patients saving on theier health, the most invaluable good, says Jacek Szwajcowski.
The Mummy and Baby Programme has also been attracting unflagging interest. The programme features attractive promotions and discounts, while offering medications suited to the age of a baby, as well as the needs of a young mother. We are finishing work to enhance the Programme and adapt it to a wider target group. Its enhanced version is to be launched shortly, announces PGF’s President, adding Individualised approach is our primary focus, so we are looking to implement new projects targeted at selected patient groups.
PGF is well aware of ever growing expectations and demands from the world of business. We strive to ensure the highest standards of pharmaceutical care, while catering to the patients’ needs. With our patients in mind, we have rolled out a new project designated as the SMS Pharmacy. The service enables mobile phone owners to conveniently check the prices, locate an I Care for My Health pharmacy anywhere in Poland and order medications from an outlet of their choice. All they need to do is send a text message to 661 004 000.
The PGF Group’s retail business saw another landmark when the two thousandth pharmacy joined the I Care for My Health programme in February. By the end of this year, PGF intends to increase the number of pharmacies participating in the scheme, as well as the number of franchised stores. This will help solidify the I Care for My Health brand as Poland’s largest chain of professional pharmacies, focusing on the provision of pharmaceutical care, offering a wide range of products and services, running a customer loyalty scheme, actively involved in raising health awareness and engaged in a number of prevention and awareness projects. To this end, last year we launched – in the press, on the radio and TV – the first image campaign of the orange-coloured pharmacies in Poland.
On April 28th we held a ceremony to mark the opening of Business Support Solution S.A., our youngest subsidiary specialising in the provision of accounting, payroll/HR, legal, controlling, financial, and accounts consolidation services for domestic and foreign members of the PGF Group. We hope that the comprehensive profile of our Shared Service Centre will attract a steadily rising number of customers – also from outside the Group – and that the city of Łódź becomes Poland’s hub of business process outsourcing, says Mr Szwajcowski.
PGF has every reason to look ahead with optimism. The year 2009, which was otherwise dominated by global recession, turned out to be a very good one for both PGF and the entire pharmaceutical market. While other sectors faced a decline in sales, PGF reported record breaking sales of PLN 5.4bn, and managed to streamline costs and working capital, significantly de-leverage its business, mitigate financial risk and maintain high liquidity. These things give us confidence that PGF is poised for further expansion. In 2010 we intend to focus on organic growth, enhancing the quality of our service across all market segments and exploring attractive and innovative solutions that could help us strengthen our competitive edge and market position, concludes PGF’s President.
The table below shows the Q1 2010 financial highlights versus the corresponding period of last year:
| Q1 2010 | Q1 2009 | Change | |
|---|---|---|---|
| Sales revenue(PLNm) | 1 394,6 | 1 368,5 | 1,9% |
| EBITDA (PLNm) | 37,6 | 36,6 | 2,8% |
| EBITDA margin(%) | 2,7% | 2,7% | 0 p.p. |
| Operating profi (PLNm) | 30,1 | 29,1 | 3,3% |
| Operating margin (%) | 2,2% | 2,1% | +0,1 p.p. |
| Net profit attributable to equity holders of the parent (PLNm) | 14,0 | 13,2 | 6,5% |
| Net margin (%) | 1,0% | 1,0% | 0 p.p. |
For additional information, please contact:
Olga Rosłonek
Tel. (+48 42) 61 33 594
Fax: (+48 42) 61 33 433
E-mail: olga_roslonek@pgf.com.pl
