20. 3. 2019

Krka Business Performance in 2018

8 min. read

The Management Board of Krka, d. d. held a press conference and made public the unaudited 2018 performance results of the Krka Group and the controlling company Krka. According to the President of the Management Board Jože Colarič, sales of the Krka Group advanced by 5% to €1,331.9 million. Unaudited Krka Group net profit totalled €174 million, an increase of €21.4 million or 14% compared to 2017. The recorded sales and net profit figures have been the highest since Krka was founded 65 years ago.

Krka Group Sales of Products and Services by Region

The largest sales region was Region East Europe, where sales climbed by 7% in comparison to 2017 and totalled €412.9 million, accounting for 31% of total Krka Group sales. In the Russian Federation, which remains Krka’s key and largest individual market, €274.7 million product sales and 2% growth rate were recorded. Growth expressed in the Russian rouble reached 15%. In Ukraine, where sales totalled €56.2 million, a 24% rise, Krka significantly outperformed market growth and direct competitors. In Uzbekistan, product sales added up to €19 million, and 31% growth was attained. Double-digit sales growth was also reached in Mongolia (57%), Tajikistan (30%), Armenia (27%), Moldova (22%), Belarus (14%), and Azerbaijan (12%).

Region Central Europe recorded the second highest product sales of €318.3 million (24% of total Krka Group sales), a 5% increase compared to 2017. In Poland, the key and largest market in the region, product sales reached €148.8 million presenting a 3% growth. They recorded the highest growth rates of all foreign providers of generic medicines in the country taking the fourth place. In the Czech Republic, which is also one of Krka’s key markets, sales increased by 7% resulting in sales total of €48.9 million. In Hungary, Krka’s third largest key market in the region, a 5% sales growth in total of €47.4 million was recorded. Sales growth was attained in Estonia (11%), Slovakia (10%), and Lithuania (9%), while sales in Latvia remained at the 2017 level.

In terms of sales value, Region West Europe placed third with €287.1 million (22% of total Krka Group sales), or a 1% year-on-year rise. Germany, Spain, the Scandinavian countries, and France led in terms of sales. Sales through subsidiaries were essential for continued sales growth and accounted for more than 70% of the regional sales. In Germany, which remains the most important Western European market of Krka, product sales reached €72.6 million and recorded a 10% year-on-year slide due to diminishing tender sales of medicines. In Spain, Krka’s second largest market in the region, product sales reached €40.2 million, up 13%. Double-digit market growth was recorded in Finland (54%), the Scandinavian countries (33%), Benelux (25%), Italy (22%), and Austria (22%).

Sales in Region South-East Europe amounted to €176.2 million, a 9% increase over the year before, accounting for over 13% of total Krka Group sales. In Romania, the key and largest market in the region, product sales amounted to €53.0 million, 2% below the 2017 figure. In Croatia, also a key market of Krka, product sales generated €33.4 million and recorded a 7% rise. Sales growth was recorded in all markets in the region, except in Romania and Albania.

Sales of products and services in Slovenia amounted to €88.9 million (of that €37.6 million were generated through health resort and tourist services) and accounted for close to 7% of total Krka Group sales. With respect to value, product sales saw a 3% rise, and sales volume a 4% growth. Krka maintained the leading position among medicine providers in Slovenia holding an 8.6% market share.

Region Overseas Markets generated €43.4 million by product sales (3% of total Krka Group sales) and recorded a 12% growth. Individual markets of the Middle East, the Far East, and Africa, in particular Iran and Vietnam, contributed to total regional sales the most.

Krka Group Sales by Product and Service Group

In 2018, the Krka Group sales of prescription pharmaceuticals, the most important product group, totalled €1,102.8 million, 6% more than in 2017. Sales value exceeded one billion € for the second consecutive year. Krka’s five major markets are the Russian Federation, Poland, Germany, Romania, and the Czech Republic.

As far as sales of prescription pharmaceuticals are concerned, medicines for the treatment of cardiovascular diseases remained the key therapeutic class also in 2018, and were followed by pharmaceuticals for the treatment of the central nervous system and medicines for the alimentary tract.

In 2018, sales of new products, i.e. products launched in individual markets in the past five years, accounted for 29% of the Krka Group total sales. Co-Amlessa* (perindopril/amlodipine/indapamide) was the most important new product.

The leading prescription pharmaceuticals in terms of sales in 2018 were those containing valsartan (Valsacor, Valsacombi*, Vamloset*, Co-Vamloset, and Valarox*). Year on year, sales of medicines containing valsartan almost doubled. This was the result of intensive promotion and also of favourable market conditions. They were followed by medicines containing perindopril (Prenessa*, Co-Prenessa*, Amlessa*, and Co-Amlessa*), losartan (Lorista*, Lorista H*, and Tenloris*), atorvastatin (Atoris and Atordapin*), pantoprazole (Nolpaza*), and rosuvastatin (Roswera* and Rosudapin*). In terms of sales, medicines containing esomeprazole (Emanera*), enalapril (Enap, Enap-H*, and Elernap*), clopidogrel (Zyllt*), and tramadol (Doreta* and Tadol) were also among top ten prescription pharmaceuticals. Products marketed under different brand names in individual markets are marked with an asterisk. Products may be marketed also under the Krka trademark in individual markets.

Sales of non-prescription products amounted to €123.2 million, a 4% increase compared to 2017. Septolete, Herbion*, Nalgesin*, and Bilobil* were the most important non-prescription product brand names.

Animal health product sales totalled €63.2 million and remained at the 2017 level. The milbemycin oxime/praziquantel combination (Milprazon*) was the most important animal health product in terms of sales. It was followed by products containing fipronil (Fypryst* and Fypryst* Combo), enrofloxacin (Enroxil*), and florfenicol (Floron), and pyrantel embonate/praziquantel combination products (Dehinel* and Dehinel* Plus).

Sales of health resort and tourist services increased by 5% to €37.5 million.

Research and Development

In 2018, the Krka Group obtained marketing authorisations for 23 new products (18 prescription pharmaceuticals, one non-prescription product, and four animal health products) in 52 dosage forms and strengths:

Krka registered 67 trademarks in Slovenia, and submitted 34 international and nine national trademark applications. All in all, more than 1,100 trademarks in various countries have been registered.

Investments

In 2018, the Krka Group allocated €96.3 million to investments, of that €78.0 million to the controlling company. In Slovenia, Croatia, and the Russian Federation, many investments in new production equipment and modernisation of infrastructure were in progress, which additionally increased production capacities. Krka also invested in its own production and distribution centres around the world.

Employees

At the end of 2018, the Krka Group had 11,390 employees on payroll, and 5,611 (49.3%) of them worked in Slovenia and 5,779 (50.7%) abroad. The number of staff increased by 558 employees (5%) compared to 2017.

Of all people on payroll, 54% or 6,126 employees held at least a university degree, of that 187 a doctoral degree, and 384 a master’s degree or specialisation.

Plans for 2019

According to the 2019 plans, sales of the Krka Group are projected at €1,375 million and net profit at €172 million. Nevertheless, Krka remains committed to exceeding the planned objectives. In terms of sales in the first quarter of 2019, ending the following week, the Management Board observes the last year’s sales trends continue.

Krka intends to allocate more than €124 million for investment projects to increase and modernise production capacities and infrastructure. The total number of employees in Slovenia and abroad is projected to grow by 4% in 2019.