Krka Group
Investor Day 2023
Krka, d. d., Novo mesto (KRKG SV)
Business development 1-9 2023, FY 2023 estimates and 2024 guidance
Jože Colarič
President of the Management Board and CEO
OUR MISSION
Living a healthy life.
OUR VISION
We are consolidating our position as one the leading
generic pharmaceutical companies in the world.
OUR VALUES
Speed and flexibility
Partnership and trust
Creativity and efficiency
Well-diversified activities
Providing access to high quality affordable medicines
Krka's presence on 70+ markets in 6 sales regions
49 subsidiaries outside Slovenia:
45% of all Krka Group workforce
Sales regions
Region Slovenia
Region Central Europe
Region East Europe
Region South-East Europe
Region West Europe
Region Overseas markets
Manufacturing locations
Slovenia I Russian Federation
Poland I Germany I Croatia I China
55+ million patients daily use Krka's
medicines worldwide
17 bn FDF produced annually in various
therapeutic groups
Operating in many low to middle income countries, creating savings for patients & healthcare systems
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Krka Group sales by regions
Sales 1-9 2023: EUR 1 billion 334.9 million
of goods and services (EUR +98,4 million, +8%)
Overseas Markets | Slovenia | ||||
EUR 55.5 million | |||||
EUR 86.7 million | |||||
+13% | EUR +6.4 million | ||||
EUR +9.5 million +12% | |||||
West Euope | 4.2%6.5% | South-East Europe | |||
EUR 187.2 million | |||||
EUR 266.4 million | +8% | ||||
+10% | 14.0% | EUR +14.4 million | |||
EUR +24.0 million | 20.0% | ||||
Central Europe | 22.8% | 32.5% | East Europe | |||
EUR 434.1 million | ||||||
EUR 305.0 million | ||||||
EUR +19.9 million | +5% | |||||
+9% EUR +24.1 million | ||||||
www.krka.biz | 4 | Nominal and relative change compared to same period year-over-year | ||||
Largest market - Russian Federation: sales of €260m, +3%
218 240 240 251 260
1-9 2019 1-9 2020 1-9 2021 1-9 2022 1-9 2023
Second largest - Poland: sales of €137m, +6%
119 124 126 128 137
million | ||||||||
1-9 2019 | 1-9 2020 | 1-9 2021 | 1-9 2022 | 1-9 2023 | ||||
EUR | ||||||||
Third largest - Germany: sales of €72m, +12% | ||||||||
in | ||||||||
55 | 73 | 59 | 64 | 72 | Sales | |||
1-9 2019 | 1-9 2020 | 1-9 2021 | 1-9 2022 | 1-9 2023 | ||||
Fourth largest - Ukraine: sales of €56m, -7% | ||||||||
55 | 60 | 70 | 60 | 56 | ||||
1-9 2019 | 1-9 2020 | 1-9 2021 | 1-9 2022 | 1-9 2023 |
Krka Group sales by product and service groups
Sales 1-9 2023: EUR 1 billion 334.9 million
of goods and services (EUR +98,4 million, +8%)
- Prescription drugs remain the most important group of products sold by the Krka Group.
82.0%
Health-resort & | ||
tourist services | 2.8% | |
+15% EUR 36.9 million | ||
EUR +4.9 million | 6.2% | |
Animal health products | 9.0% | |
EUR 82.9 million |
+19% EUR +13.5 million
Non-prescription products
EUR 120.7 million
EUR -1.8 million
Prescription Pharmaceuticals | ❖ The greatest absolute growth | ||||
in sales (EUR +81.7 million) | |||||
EUR 1 billion 94.3 million | +8% | ||||
EUR +81.7 million | was | achieved | with | ||
prescription drugs, | while | the | |||
greatest | relative | growth | |||
(+19%) | was achieved | with | |||
animal health products. | |||||
-1% |
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Nominal and relative change compared to same period year-over-year
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Research and development
In the first nine months of 2023, we registered 7 new products (5 prescription and 2 animal health products).
- On the European markets, we added dapagliflozin to the range of medicines for the treatment of diabetes in the form of film-coated tablets. Dapagliflozin is a representative of the most modern group of drugs, which, in addition to successfully lowering glycated hemoglobin, shows beneficial effects on the heart and blood vessels and kidney function.
- We increased the range of Krka products in China. We have registered a drug with tert-butylamineperindoprilat from the group of drugs for the treatment of cardiovascular diseases. We also obtained the registration of the modern antithrombotic drug rivaroxaban in the form of film-coated tablets and the drug with gliclazide in the form of modified-release tablets, which is used for the treatment of diabetes.
- Our range for companion animals was expanded to include the Arocenia (maropitant) solution for injection, for cats and dogs. The agent affects the central nervous system, reducing nausea and preventing vomiting after surgery and chemotherapy, thus improving post-operative recovery.
- Krka was the first producer of generic medicines in the European Union to complete the decentralised procedure for Robexera/Rogiola (robenacoxib) chewable tablets for dogs. It is available in four strengths. Robenacoxib is a nonsteroidal anti-inflammatory agent used in veterinary medicine for the relief of pain and treatment of chronic osteoarthritis inflammation, and for the control of inflammation and pain after soft tissue surgical procedures.
- We obtained a Certificate of Suitability to the monograph of the European Pharmacopoeia (CEP) for our antibacterial agent norfloxacin as incorporated into the Krka product Nolicin.
- We finalised 408 marketing authorisation procedures, obtaining approvals for 216 prescription pharmaceuticals and 3 non-prescription products, thus bringing medications closer to patients in numerous markets.
R&D costs amounted to EUR 127.3 million (9.5% of revenue, +7% compared to the same period last year).
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Investments
Investments in the Krka Group between January and September 2023 totalled €81.5 million, of which the controlling company allocated €69.0 million.
- Investments in the modernization and increase of capacity at the Notol plant, the OTO solid form production plant and the Ljutomer plant are underway. In Novo mesto, we are continuing the construction of the 6-storymulti-purpose building Paviljon 3. It will contain spaces for the expansion of the microbiology laboratory and additional spaces for several organizational units.
- In Slovenia, we completed investments in the modernization and increase of capacity at the Beta plant in Šentjernej, in the reorganization of the development and control centers, and in the increase of the capacity for filling tubes in the plant for the preparation of powder and liquid products in Bršljin.
- In the production and distribution center in Jastrebarsko, Croatia, we are installing a new secondary packaging line, which will increase the capacity for the production of veterinary products in solid pharmaceutical forms by a quarter. We are also upgrading other facilities and systems.
- New facilities for API development and production are planned in Krško, Slovenia. This is one of Krka's largest future projects. Based on project documentation and an IED OVD environmental impact assessment we have obtained the integral building permit for the Sinteza 2 plant and laboratories for chemical analyses. The environmental permit has also been granted, and construction works are scheduled to start after the permit becomes final. The investment is estimated at €163 million and pursues our strategy of vertical integration, from the development of a product to its production.
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FX impact for the period January - September 2023
The ruble exchange rate stabilized in the second half of 2023
NFR in million € | Year 2022 | Year 2023 | ||||||
160 | 139 | Annual NFR | NFR 1-9/2023 | 180 | ||||
120 | + € 52 million | - € 34 million | 160 | |||||
80 | 140 | |||||||
40 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | 120 |
0 | 100 | |||||||
-2 | -4 | |||||||
-40 | -15 | -14 | -16 | 80 | ||||
-80 | -71 | RUBLE VALUE 60 | ||||||
Index 1.1.2022 = 100 |
- The value of the ruble declined by 24% in the first nine months of 2023, with most of the depreciation occurring in the first half of the year.
- The Krka Group's net financial result (NFR) for the first nine months of 2023, which includes the currency result, income and expenses from financial investments, as well as other financial income and expenses, amounted to minus € 34 million.
- The main reason for the negative NFR was the negative foreign exchange result due to the depreciation of the ruble. The total impact of all other NFR components was positive.
- In the first nine months of 2023, the Krka group's NFR was € 156 million worse than in the same period last year, mainly due to the strong strengthening of the ruble in the first half of 2022.
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Profit and loss statement of the Krka Group
Costs by business function
Change | Index | |||||
EUR thousands | 1-9 2023 | Share in % | 1-9 2022 | Share in % | 2023-2022 | 2023/22 |
Revenues | 1,340,536 | 100.0 | 1,242,203 | 100.0 | 98,333 | 108 |
Cost of Goods sold | 569,320 | 42.5 | 561,071 | 45.2 | 8,249 | 101 |
Gross profit | 771,216 | 57.5 | 681,132 | 54.8 | 90,084 | 113 |
Other operating income | 4,423 | 0.3 | 5,197 | 0.4 | -774 | 85 |
Selling and distribution expenses | 250,794 | 18.7 | 266,742 | 21.5 | -15,948 | 94 |
R&D expenses | 127,344 | 9.5 | 119,481 | 9.6 | 7,863 | 107 |
General and administrative expenses | 77,227 | 5.7 | 66,322 | 5.3 | 10,905 | 116 |
Operating profit | 320,274 | 23.9 | 233,784 | 18.8 | 86,490 | 137 |
Net financial results | -33,664 | -2.5 | 122,405 | 9.9 | -156,069 | |
Profit before tax | 286,610 | 21.4 | 356,189 | 28.7 | -69,579 | 80 |
Income tax | 51,051 | 3.8 | 54,521 | 4.4 | -3,470 | 94 |
Net profit | 235,559 | 17.6 | 301,668 | 24.3 | -66,109 | 78 |
Basic earnings per share - EPS (in EUR) | 7.60 | 9.68 | -2,08 | 78 | ||
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Krka Group business indicators
EUR thousands | 1-9 2023 | 1-9 2022 |
Gross profit | 771,216 | 681,132 |
EBITDA | 398,235 | 314,192 |
Operating income (EBIT) | 320,274 | 233,784 |
Net profit | 235,559 | 301,668 |
Gross profit margin | 57.5% | 54.8% |
EBITDA margin | 29.7% | 25.3% |
EBIT margin | 23.9% | 18.8% |
Net profit margin | 17.6% | 24.3% |
Return on Equity (ROE) | 14.8% | 19.9% |
Return on Assets (ROA) | 11.8% | 15.3% |
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KRKA dd published this content on 17 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 November 2023 10:02:08 UTC.