egis pharma (hungary) 2010 q4

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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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%

egis pharma (hungary) 2010 q4

Business

sales revenue increase

change change huf

cost of sales ratio

change usd thousandq4q4total6

cis usd

row pharma sales usd

change q4 q4hungaryhuf

q4 q4 huf