egis pharma (hungary) 2010 q4
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2009/2010 fiscal year 4th quarter
Consolidated data
EGIS PharmaceuticalsPublic Limited Company
3
Two accounting changes that impact comparisons
Medimpex UK cleared off
EGIS sold its 50% stake on 5th October 2009.
EGIS part in comparative Q1-4:
sales revenue HUF1,319moperating profit -HUF15mpre-tax profit HUF8m
Medimpex UK cleared off
EGIS sold its 50% stake on 5th October 2009.
EGIS part in comparative Q1-4:
sales revenue HUF1,319moperating profit -HUF15mpre-tax profit HUF8m
Accounting policy changed
New system for calculating cost of sales:more details, reclassification of items from admin to cost of sales
Change in accounting of shipping costs
included in sales revenue andalso in M&S line
Accounting policy changed
New system for calculating cost of sales:more details, reclassification of items from admin to cost of sales
Change in accounting of shipping costs
included in sales revenue andalso in M&S line
4
Revenue increased 23%, net profit hit by result from financial activities
HUF million2009/2010
Q42008/2009
Q4ChangeHUF m
Change%
Sales 32,426 26,318 6,108 23%
Gross profit 18,073 14,293 3,780 26%
Gross margin 55.7% 54.3%
Cost of sales 13,350 13,104 246 2%
Operating profit 4,131 1,084 3,047Operating margin 12.7% 4.1%Pre-tax profit 2,837 422 2,415
5
-35
11 13
938
489
339
629
480
394358
576565
519
365
184 Ft 182174 172
158 159
199
228
210
189183
195
216221
-100
0
100
200
300
400
500
600
700
800
900
1 000
Q3 07 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 11
paym
ents
to O
EP
HUF
m
0
20
40
60
80
100
120
140
160
180
200
220
240
HU
F / U
SD e
xch.
ratepayments to OEP
HUF / USD
Slight improvement in exchange rates y/y, payments to OEP* can be reclaimed in 2 years
These three-month peroids are quarters of EGIS financial year (October-September)
* OEP: Országos Egészségbiztosítási Pénztár (National Health Insurance Fund)
6
Sales increased in strategically important markets, and notably decreased in other markets
2009/2010Q4
2008/2009Q4
Change
Hungary HUF m 8,410 7,921 6%Russia + other CIS USD m 47.4 36.0 32%
CEE USD m 45.2 41.4 9%
RoW pharma sales USD m 6.1 8.0 -24%API + other USD m 10.2 11.7 -13%
7
27% sales revenue increase in Russia
USD thousand2009/2010
Q42008/2009
Q4Change
Total RU 32,751 25,736 27%
Of whichDLO 2,975 1,103Bioparox 3,353 0Stocking impact 2,300 0Ordinary market 24,123 24,633 -2%
8
Sales revenue 43% higher aggregately in Ukraine and other CIS markets
USD thousand2009/2010
Q42008/2009
Q4Change
Ukraine 4,625 3,687 25%Kazakhstan 3,164 2,089 52%Belarus 2,807 2,122 32%Other CIS markets 4,072 2,345 74%Together 14,668 10,243 43%
9
USD thousand2009/2010
Q42008/2009
Q4Change
Poland 21,278 18,395 16%Czech Republic 5,878 7,951 -26%Slovakia 4,904 4,980 -2%Romania 6,143 5,005 23%Turkey 2,672 1,403 90%Bulgaria 1,982 1,959 1%Latvia+Lithuania 872 884 -1%Vietnam 1,443 870 66%Total CEE 45,172 41,447 9%
9% increase in CEE export
10
USD thousand2009/2010
Q42008/2009
Q4Change
Total 6,077 8,028 -24%Co-operation 19 3,434Other 6,058 4,594 32%
Pharma exports to western markets dropped 24%, however, export of proprietary products within this increased
11
USD thousand2009/2010
Q42008/2009
Q4Change
Total 10,167 11,706 -13%For Servier 5,590 5,192 8%Other 4,577 6,514 -30%
Export of API moderated 13%
12
HUF million2009/2010
Q42008/2009
Q4Change
Cost of sales 14,353 12,025 19%
Sales 32,426 26,318 23%
Cost of sales ratio 44.3% 45.7%
Cost of sales ratio decreased 1.4pp
13
HUF million2009/2010
Q42008/2009
Q4Change
Marketing & Sales 7,636 6,897 11%R & D 2,948 2,671 10%Administration 2,766 3,536 -22%Total 13,350 13,104 2%
General costs increased 2%
14
HUF million2009/2010
Q42008/2009
Q4ChangeHUF m
Total -592 -105 -487
Payments to OEP -13 -339 326Local taxes (trade-, etc.) -509 -390 -119Other items -70 624 -694
Balance of other income and expenditures less favourable by HUF 487 million
15
HUF million2009/2010
Q42008/2009
Q4ChangeHUF m
Total -766 -519 -247
Interest income 328 573 -245
Forex gain -1,907 -452
Result on hedge 832 2
Forex related items together -1,075 -450 -625
Other items -19 -642 623
Financial profit is determined by the exchange rate fluctuations within the quarters
2009/2010 fiscal year results
17
HUF million2009/2010
year2008/2009
yearChangeHUF m
Change%
Sales 118,915 116,142 2,773 2%Gross profit 66,709 64,350 2,359 4%Gross margin 56.1% 55.4%Cost of sales 49,029 47,575 1,454 3%Operating profit 15,512 14,040 1,472 10%Operating margin 13.0% 12.1%Pre-tax profit 17,755 14,525 3,230 22%
Forex impact: -HUF0.3bn
Annual sales revenue up 2%, profit higher 22% y/y
18
2009/2010year
2008/2009year Change
Hungary HUF m 32,687 31,403 4%Russia + other CIS USD th 185,808 160,696 16%CEE USD th 175,975 162,000 9%
RoW pharma sales USD th 23,309 35,803 -35%API + others USD th 38,278 51,310 -25%
Revenue increase in strategic markets, decrease in other markets
19
• No change in regulationregistration fee of med reps from 15 February 2009subsidy limitation: 30%20% of 2009 payments can be withheld in 2011 100% of 2010 payments in 2012
(due to EGIS FY commencing in October)
• Market size (ex-factory prices): HUF 570 bn, chg: +4%
• EGIS: HUF 30.2 bn, chg: +5% 5.3% market share
• Market size (ex-factory prices): HUF 570 bn, chg: +4%
• EGIS: HUF 30.2 bn, chg: +5% 5.3% market share
IMS MAT 09/2010
Hungarian pharma market grew 4% over the last 12 months
20
Continuous pressure on prices
July 1, 2006 3%April 1, 2007 9%July 1, 2007 1%October 1, 2007 1%
January 1, 2008 1%April 1, 2008 1%July 1, 2008 0.3%October 1, 2008 0.1%
January 1, 2009 0.6%April 1, 2009 0.1%July 1, 2009 1% .October 1, 2009 0.6%
January 1, 2010 0.5%April 1, 2010 0.2%July 1, 2010 0.6%
Price cuts (averaging on EGIS portfolio):
21
• Coverex® AS Komb Forte CV licence
• Emperin® (betahistin) CNS licence
• Granegis® (granisetron) Onc licence
• Grimodin® (gabapentin) CNS licence
• Topepsil® (topiramate) CNS licence
• Yarocen® OD (mirtazapin) CNS licence
• Jovital® C Duo-Active® (vitamin C) proprietary
Seven new products were launched in the domestic market this year
22
12% payment and med rep fee paid, net sum is modified by 20% and 100% withheld items
EGIS payments (HUF million): Q1 Q2 Q3 Q4
12% and price/volume 446 404 456 452
Med rep fee 152 149 151 150
20% or 100% withheld -109 -589 -596 -589
Aggregately 489 -35 11 13
Claw-back 0 0 0 0
23
16% aggregate increase in Russia and other CIS markets
USD thousand2009/2010
year2008/2009
yearChange
Russia 132,030 117,652 12%Ukraine 19,793 15,210 30%Kazakhstan 10,138 7,441 36%Belarus 8,886 8,252 8%Other CIS markets 14,961 12,141 23%Total 185,808 160,696 16%
24
USD thousand2009/2010
year2008/2009
yearChange
Poland 86,816 82,653 5%Czech Republic 22,113 22,455 -2%Slovakia 20,654 19,747 5%Romania 20,850 17,974 16%Turkey 8,625 5,064 70%Bulgaria 8,259 6,675 24%Latvia+Lithuania 3,534 3,452 2%Vietnam 5,124 3,980 29%Total CEE 175,975 162,000 9%
9% increase in CEE export
25
• donepezil (CZ, PL, SK, AM, GE, UZ, RO) own dev. CNS
• escitalopram (BG, CZ, PL, SK, LT, LV) licence CNS
• gabapentin (CZ, RO, SK) licence CNS
• granisetron (RO, SK) licence onc
• levocetirizine (AM, AZ, GE, UA, UZ) own dev. allergy
• olanzapine (PL) licence CNS
• oxaliplatine (RO, SK) licence onc
• betahistin (SK) licence CNS
• metoprolol succinat (CZ) licence CV
9 new products were launched in markets outside Hungary
26
HUF million2009/2010
year2008/2009
year Change
Cost of sales 52,206 51,792 1%
Sales 118,915 116,142 2%
Cost of sales ratio 43.9% 44.6%
Cost of sales ratio improved 1.3pp
27
HUF million2009/2010
year2008/2009
yearChange
Marketing & Sales 28,143 26,047 8%R & D 10,860 10,060 8%Administrative 10,026 11,468 -13%Total general costs 49,029 47,575 3%
General costs increased 3%
28
HUF million2009/2010
year2008/2009
yearChangeHUF m
Total -2,168 -2,735 567
Payments to OEP -477 -1 842 1,365Local taxes (trade, etc.) -1,858 -1,658 -200Other items 167 765 -598
Balance of other income and expenditures more favourable by HUF 567 million
29
HUF million2009/2010
year2008/2009
yearChangeHUF m
Total 2,348 167 2,181
Interest income 1,429 1,581 -152
Forex gain 1,117 148
Result on hegde -251 -1,019
Forex related items together 866 -871 1,737
Other items 53 -543 596
Financial profit increased by HUF 2,181 million
30
Hedge contracts (1st November)
USD m Put strike price
Call strike price
October 7 213 221November 6 222 230December 5 221 227January 4 216 223February 2 212 219March 1 199 204
31
Annual balance of currencies + USD 123 m
in USDm Income Expenses Balance
USD 173 71 102EUR 117 147 -30PLN 64 20 44CZK 23 8 15CHF 0 8 -8other 3 3 0Total 123
32
peopleSept 30
2010Sept 30
2009
EGIS 2,597 2,540Commercial offices 758 716
Subsidiaries 431 410Medimpex companies 38 40EGIS Group 3,824 3,706
3% increase in headcount
33
HUF million2009/2010
year2008/2009
yearChange
%EGIS PLC 13,103 13,499 -3%Subsidiaries 1,405 571 146%Total capex 14,508 14,070 3%
Capex increased 3%
34
Guidance suitably realized
Market Currency Guidance in February
Guidancein August
Annual fact
Hungary HUF +5% +5% +4%
Russia USD +5-10% +5-10% +12%
Ukraine + other CIS USD +8-10% +8-10% +25%
CEE EUR +8% +8% +8%
RoW pharma EUR -35% -35% -35%
API EUR -35% -25% -25%
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