Krka Report First Quarter 2021 Business Results

The President of the Management Board and Chief Executive Jože Colarič explained: ‘In the first quarter of 2021, the Krka Group performed successfully and according to our expectations. We recorded the second highest sales total in the first quarter and the highest quarterly net profit to date. The first quarter last year was extraordinary as the demand peaked on the back of the first wave of the COVID-19 pandemic, resulting also in high sales. Besides that, certain cost items dropped owing to the pandemic, which further increased operating profit of the Krka Group. Because of this, the first quarters of 2020 and 2021 do not lend themselves to direct comparison. Set side by side with the first quarter of 2019, the Krka Group increased sales by 5%, operating profit by 33%, and net profit by 23% this year. We maintained a high level of profitability. The pandemic still impacts marketing activities. In the first quarter of the year, it affected sales of certain product groups, for example antibiotics, seasonal non-prescription products, and health resort and tourist services. We allocated 9.9% of revenue to research and development. We continue to provide for health and protection of our employees and uninterrupted supplies of all our products and pursue our set goals.’

Sales

Compared to the first quarter of 2019, sales went up by 5%.

Product and Service Sales by Region

	Krka Group
€ thousand	Q1 2021	Q1 2020	Index 2021-20	Q1 2019	Index 2021-19
Region Slovenia	18,270	23,325	78	22,006	83
Region South-East Europe	53,276	63,794	84	50,409	106
Region East Europe	132,122	153,082	86	122,091	108
Region Central Europe	97,805	113,706	86	85,862	114
Region West Europe	80,535	94,312	85	84,285	96
Region Overseas Markets	12,515	13,510	93	12,635	99
Total	394,523	461,729	85	377,288	105

Product and Service Sales by Category

	Krka Group
€ thousand	Q1 2021	Q1 2020	Index 2021-20	Q1 2019	Index 2021-19
Human health medicines	368,010	432,600	85	351,142	105
– Prescription pharmaceuticals	340,921	389,389	88	314,367	108
– Non-prescription products	27,089	43,211	63	36,775	74
Animal health products	21,656	22,221	97	17,646	123
Health resorts and tourist services	4,857	6,908	70	8,500	57
Total	394,523	461,729	85	377,288	105

Research and Development

We intend to register new products and introduce additional development activities to provide for high quality and safety of established products and obtain marketing authorisations for 16 new products in 2021.

In the first quarter, R&D expenses totalled €39.1 million, accounting for 9.9% of revenue and 4% year‑on‑year growth.

Investments

In the first quarter of 2021, the Krka Group allocated €9.8 million to investments, of that €7.9 million to the controlling company.

Employees

At the end of March, the Krka Group had 11,639 employees, of that 5,375 abroad, which constituting 46% of the total Krka Group headcount. The Krka Group employees with at least university-level qualifications accounted for 51% of all personnel, and 204 of them held doctoral degrees. Together with agency workers, the Krka Group had 12,539 employees on payroll.

Business Performance by the End of the Year 2021

Business performance in 2021 will further depend on the course of the COVID-19 pandemic and the global recovery after it ends. Pandemic-related circumstances and processes remain highly volatile, but we pursue all key activities, for example development, purchasing, manufacture, and sales, in accordance with the set goals and key strategic guidelines for 2021.

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