Krka presented its first quarter 2015 operating results

Sales

The Group’s first quarter sales in terms of the quantity of products sold were up almost 3% compared to the same period last year. However, the declining prices of pharmaceuticals and the depreciation of certain key currencies relative to the first quarter last year drove the value of sales down 3%, to EUR 289.3 million.

Krka Company sales amounted to EUR 260.8 million, down one tenth compared to last year’s first quarter.

Krka Group sales by Region

The leading sales region is Region West Europe, where Krka generated EUR 82.1 million, which represents 28.4% of overall sales. Compared to the same period last year, sales there increased by EUR 22.3 million, or 37%, which is the highest absolute as well as relative sales growth among all Krka’s sales regions.

The second largest region in terms of sales is Region East Europe, where Krka generated EUR 81.5 million (down 30%), which is 28.2% of total Group sales. Product sales in Region Central Europe represented 23.6% of overall Group sales, and amounted to EUR 68.4 million (up 10%). Sales in Region South-East Europe amounted to EUR 30.6 million, which is 10.6% of Group sales and a decrease by one tenth compared to last year’s first quarter sales. Sales in the domestic market were EUR 19.2 million, which is on the same level as in the comparable period last year and represents 6.6% of total sales. Three-month product sales in Region Overseas Markets totalled EUR 7.5 million (2.6% of overall sales), up 15% compared to the same period last year.

Krka Group sales by product and service group

The Krka Group sold EUR 243.2 million worth of prescription pharmaceuticals in the reported period, 2% less than in the same period last year. Prescription pharmaceuticals represent 84.1% of Krka Group sales, their sales having increased in regions West Europe (up 42%), Central Europe (up 8%) and Overseas Markets (up 19%). With respect to large markets, prescription pharmaceutical sales were up the most compared to the same period last year in Germany (up 68%), the Czech Republic (up 58%), Spain (43%) and Poland (7%).

The ten leading prescription pharmaceuticals in terms of sales are Atoris (atorvastatin), Lorista (losartan), Prenessa (perindopril), Nolpaza (pantoprazole), Enap (enalapril), Valsacor (valsartan), Aryzalera (aripiprazole), Emanera (esomeprazole), Roswera (rosuvastatin) and Zyllt (clopidogrel). Products are marketed under different brand names in individual markets.

The sales of non-prescription product were down 12% compared to the same period last year, to EUR 27.2 million, which represents 9.4% of Krka Group sales. The sales of animal health products were up 8% to EUR 11.7 million, which is 4.1% of overall Group sales. Health resort and tourist services totalled EUR 6.6 million in revenues, down 5% from the same period last year (2.2% of total sales), and other sales revenues amounted to EUR 0.7 million (0.2% of total Group three-month sales).

Research and development

In the first quarter of 2015 Krka obtained marketing authorisations for six new products in 15 pharmaceutical dosage forms and strengths, and acquired 178 new marketing authorisations for 67 products in different markets.

Investments

In the first quarter of 2015 the Krka Group allocated EUR 20.3 million to investments, of which the controlling company invested EUR 17.5 million and subsidiaries EUR 2.8 million. Investments are primarily increasing and modernising production capacities, and research and development capacities.

The construction of the new production plant for solid dosage pharmaceuticals – Notol 2, which had started back in June 2012 at Krka’s pivotal location in Ločna, Novo mesto, Slovenia, is now complete. The 55,000 m² plant has been the largest investment in Krka’s history, its estimated investment value EUR 200 million. Production started in February 2015. Production lines will gradually be added to increase its production capacity to the target 4.5 billion tablets and capsules per year.

Employees

At the end of March the Group had 10,505 employees. Krka’s subsidiaries and representation offices outside Slovenia employ almost 54% of the Group’s employees, and 55% of the entire Krka team have at least a university level education.

Currently there are 45 employees enrolled into postgraduate studies towards obtaining a specialisation, master’s degree or doctoral degree with Krka’s support, with a total of 298 Krka employees enrolled into part time studies.

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