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Krka presented its business results for the first quarter of 2010

The Management Board of the Krka public limited company on a press conference on 13th May 2010 presented the business results of the Krka Group and Krka Company for the first quarter of 2010, which were also discussed by the company's Supervisory Board. In first three months of this year the Krka Group sold products and services worth EUR 246.1 million, and generated a net profit of EUR 47.1 million, which is 7% up on the same first quarter period last year. The Krka Company sold products worth EUR 231.4 million and generated, in the first quarter of this year, a profit of EUR 49.5 million, with growth of 17%.

Sales

The Krka Group generated sales of EUR 246.1 million, which is EUR 0.9 million more than for the same period last year. 90% of total sales were generated on markets outside Slovenia.

Krka Company sales totalled EUR 231.4 million and were EUR 15.2 million or 7% higher than the figures for the first three months of 2009.

Krka Group sales by region

The leading Krka Group's region, with 30.8% of overall sales, is Region Central Europe where product sales over the first quarter were worth EUR 75.9 million, representing growth of 5% on the same period last year.

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Krka Group sales by product and service group

The Krka Group sales of prescription pharmaceuticals generated EUR 204.7 million maintaining the level of sales of the same period last year. Self-medication product sales increased by 9% compared to the same period last year and were worth EUR 27.4 million. Due to difficult economic conditions on key markets, cosmetics sales fell and totalled EUR 1.3 million. Animal health products generated sales of EUR 6.7 million and recorded growth of 15%. In the first quarter of 2010 sales of health and tourism services were worth EUR 5.8 million, which is by 24% less than in the same period last year. The reason for drop in sales are the renovations performed in Talaso Strunjan.

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Business results

The Krka Group's operating profit was EUR 54.2 million, and it was by one fifth lower than the operating profit in the same period last year. The pre-tax profit was EUR 63.3 million, 15% up on the last year's first-quarter profit, while the net profit of the Krka Group totalled EUR 47.1 million, which was 7% more than the net profit for the same period last year.

The Krka Company's operating profit was EUR 52.4 million, and it was by 11% lower than the operating profit in the same period last year. The pre-tax profit was EUR 61.8 million, 16% up on the last year's first-quarter profit, and the net profit of the Krka Company was EUR 49.5 million, representing a 17% growth with regard to the last year's figure for the same period.

The Krka Group's net profit margin was 19.1% (Krka Company: 21.4%), the EBIT margin was 22.0% (Krka Company: 22.6%) and the EBITDA margin 30.0% (Krka Company: 28.9%). The Krka Group's ROE was 19.9% (Krka Company: 20.7%), and the ROA was 13.8% (Krka Company: 14.9%).

Research and development

In the first quarter Krka gained first marketing authorisations for 4 new products in 12 forms. It also acquired 220 new marketing authorisations across a number of different markets for a wide range of products.

In the field of prescription pharmaceuticals Krka gained marketing authorisations for 3 new products in 7 pharmaceutical forms and strengths.

In the field of self-medication products the notification procedures have been completed for Pikovit Omega 3 and Pikovit Prebiotik in the Russian Federation, which is the key market for both products. The Duovit brand was completed by notifying the products on new eastern European markets.

In the field of animal health products the decentralised authorisation procedure was successfully concluded in the first quarter for the new medicine Fypryst in the form of spot-on solution for the prevention and treatment of tick, flea and lice infestations in dogs and cats.

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Investments

In the first quarter of 2010 the Krka Group spent for investments EUR 18.4 million, of which EUR 13.2 million in the controlling company, and EUR 5.2 million in subsidiaries. A part of investment activities which were slowed down due to uncertain economic circumstances in 2009, were transferred into the 2010. Accordingly, in 2010 the Group is carrying out over thirty investment projects, which have reached different development stages.

At present, the biggest Krka's investment is construction of a plant for production of solid pharmaceutical forms with a capacity of 2.5 billion capsules, tablets or coated tablets per year.

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Employees

At the end of March the number of employees in the Krka Group counted 8,175 persons, meaning 3% more than at the beginning of the year. In the first quarter of this year, Krka had 70 more employees in Slovenia, and 130 more employees abroad.

47% of all Krka Group employees are now employed in companies and representative offices abroad, and 51% of employees hold at least university level qualification.

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Investor information

At the end of March 2010 the number of Krka shareholders was 82,119. The ownership share of international investors grew, while the share of individual Slovenian investors, Slovenian investment companies and funds as well as other Slovenian companies fell slightly.

The average daily turnover in Krka shares was EUR 0.8 million, making it the most traded security on the Ljubljana Stock Exchange over the first quarter 2010.

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Proposed dividend payout and new members of Krka Supervisory Board

At the regular meeting held on 7 April 2010 the Supervisory and Management Boards of Krka drew up the proposal to pay its shareholders a dividend of EUR 1.10 gross per share, which is an increase of almost 5% on last year's dividend.

At the session, held at 12nd May 20190 the Supervisory Board of Krka discussed and approved the proposal of the Nomination Committee and the Supervisory Board's Human Resource Committee for new members of the Supervisory Board, which will be submitted for decision making to the shareholder's General Meeting, taking place in June.

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