05/19/2022 | Press release | Distributed by Public on 05/19/2022 01:36
In the first quarter of 2022, the Krka Group generated revenue in total of €432.5 million, up 9% on the first quarter last year, yielding €90.7 million of net profit, a 5% year-on-year increase. The Supervisory Board of Krka discussed the Q1 2022 Business Report for the Krka Group and Krka at its regular meeting yesterday.
The President of the Management Board and Chief Executive Jože Colarič explained: 'In the first quarter of 2022, the Krka Group performed successfully despite the challenging situation and recorded a 9% increase in sales. Sales increased in all six sales regions, most key markets, and by all product and service groups. We maintained high profitability of operations and achieved the record net profit in the first quarter. We closely follow the situation in Ukraine and go to great lengths to protect safety of our employees and supply our medicines to the country without interruptions. We donated medicines to Ukraine for humanitarian relief. We were one of the first medicine providers that re-established logistic routes throughout the distribution chain in the country. We also provide for uninterrupted supplies of medicines in the Russian Federation. Obtaining marketing authorisations for our products, production, sales, distribution, and payments continue smoothly, while transport takes a little longer. The situation in the region requires constant adaptation in different areas of our business. In these circumstances, it is difficult to assess the course of future events and their impact on Krka's annual operations, but the results of the first quarter are encouraging. Krka maintains a strong capital structure and we generate stable cash flows. The Management and Supervisory Boards have therefore proposed to pay €5.63 gross per share for 2021 dividends, up 12.6%, to further pursue the stable dividend growth policy.'
Krka Group |
Krka |
|||||
€ thousand |
Jan-Mar 2022 |
Jan-Mar 2021 |
Index |
Jan-Mar 2022 |
Jan-Mar 2021 |
Index |
Revenue |
432,468 |
395,797 |
109 |
408,840 |
357,257 |
114 |
- Of that revenue from contracts with customers (products and services) |
430,648 |
394,523 |
109 |
357,348 |
307,264 |
116 |
Gross profit |
249,916 |
228,022 |
110 |
234,615 |
208,794 |
112 |
EBITDA |
133,582 |
123,580 |
108 |
124,474 |
108,411 |
115 |
EBIT |
107,299 |
96,260 |
111 |
104,022 |
87,049 |
119 |
EBT |
105,623 |
101,147 |
104 |
102,893 |
91,595 |
112 |
Net profit |
90,716 |
86,355 |
105 |
88,231 |
79,495 |
111 |
Effective tax rate |
14.1% |
14.6% |
14.2% |
13.2% |
||
R&D expenses |
41,825 |
39,091 |
107 |
41,758 |
38,704 |
108 |
Investments |
22,709 |
9,779 |
232 |
14,785 |
7,902 |
187 |
Krka Group |
Krka |
|||
Jan-Mar 2022 |
Jan-Mar |
Jan-Mar 2022 |
Jan-Mar |
|
Gross profit margin |
57.8% |
57.6% |
57.4% |
58.4% |
EBITDA margin |
30.9% |
31.2% |
30.4% |
30.3% |
EBIT margin |
24.8% |
24.3% |
25.4% |
24.4% |
EBT margin |
24.4% |
25.6% |
25.2% |
25.6% |
Net profit margin (ROS) |
21.0% |
21.8% |
21.6% |
22.3% |
Return on equity (ROE) |
18.5% |
19.2% |
18.4% |
17.4% |
Return on assets (ROA) |
14.0% |
15.1% |
14.2% |
14.2% |
Liabilities/Equity |
0.321 |
0.263 |
0.289 |
0.220 |
R&D expenses/Revenue |
9.7% |
9.9% |
10.2% |
10.8% |
In the first quarter of 2022, the Krka Group generated revenue in total of €432.5 million, a 9% year-on-year rise. Of that, revenue from contracts with customers (sales of products and services) amounted to €430.6 million, while other sales revenue constituted the difference. Sales increased in all sales regions, most key markets, and by all product and service groups. Sales volume increased by 8%.
Krka Group |
|||
€ thousand |
Jan-Mar 2022 |
Jan-Mar 2021 |
Index |
Region Slovenia |
23,432 |
18,270 |
128 |
Region South-East Europe |
60,310 |
53,276 |
113 |
Region East Europe |
146,700 |
132,122 |
111 |
Region Central Europe |
99,620 |
97,805 |
102 |
Region West Europe |
84,595 |
80,535 |
105 |
Region Overseas Markets |
15,991 |
12,515 |
128 |
Total |
430,648 |
394,523 |
109 |
Generating €146.7 million or 34.1% of total sales, Region East Europe was the largest sales region of the Krka Group. Year-on-year sales grew by 11%. We generated product sales in total of €83.6 million in the Russian Federation, up 5% year on year, while the sales volume increased by 10%. In Ukraine, product sales reached €26.5 million, up 21% on the same period last year. We recorded sales growth on most regional markets, and the highest relative growth in Kazakhstan and Moldova.
Region Central Europe, comprising the Visegrad Group and the Baltic states, was our second largest region. Regional sales amounted to €99.6 million, a 2% year-on-year increase, accounting for 23.1% of total Krka Group sales. Poland remained the leading regional market, where we recorded product sales of €46 million, down 3%, but a 2% increase in terms of sales volume year on year. We achieved sales growth in all regional markets, except in Poland and Slovakia.
Our third largest region, Region West Europe, recorded sales total of €84.6 million or 19.7% of total Krka Group sales. Year-on-year sales grew by 5%. Germany, the Scandinavian countries, France, and Italy led in terms of sales. German product sales reached €23.2 million, up 3% year on year.
Region South-East Europe accounted for 14% of total Krka Group sales, generating product sales of €60.3 million, a 13% year-on-year increase. Romania and Croatia recorded highest sales, but we recorded sales growth in all regional markets. Absolute sales growth was the highest in Romania, Croatia, and Bulgaria.
Region Slovenia recorded sales of €23.4 million, accounting for 5.4% of total Krka Group sales. We earned most by product sales that increased by 12%, and totalled €15.1 million. Health resorts and tourist services yielded sales total of €8.4 million, a 72% year-on-year climb.
Region Overseas Markets generated product sales of €16 million, or 28% more than in the same period a year ago. The region accounted for a 3.7% share in total Krka Group sales.
Krka Group |
|||
€ thousand |
Jan-Mar 2022 |
Jan-Mar 2021 |
Index |
Human health |
400,342 |
368,010 |
109 |
- Prescription pharmaceuticals |
353,099 |
340,921 |
104 |
- Non-prescription products |
47,243 |
27,089 |
174 |
Animal health products |
21,930 |
21,656 |
101 |
Health resorts and tourist services |
8,376 |
4,857 |
172 |
Total |
430,648 |
394,523 |
109 |
Prescription pharmaceuticals constituted 82% of the Krka Group total sales and amounted to €353.1 million, up 4% on the first quarter last year.Year-on-year sales increases by regions were as follows:
Year-on-year sales of non-prescription products advanced by 74%, generating €47.2 million (11% of total sales). Sales of animal health products grew by 1% and amounted to €21.9 million (5.1% of total sales). Terme Krka service sales generated €8.4 million, or 72% more than in the same period last year.
We plan to obtain marketing authorisations for at least 12 new products in 2022. We intend to provide for even higher quality and safety of the established products by undertaking additional development activities.
We added a single-pill combination of perindopril arginine and amlodipine to our product portfolio in the first quarter of 2022. We develop and produce perindopril arginine according to our vertically integrated business model and integrate it in perindopril-based cardiovascular agents. It is a result of our know-how and is manufactured in
Krka-owned facilities. Managing all processes from development to marketing enables us to respond quickly and ensure ready availability of the perindopril-based products on markets. We obtained a new Certificate of Suitability to the monograph of the European Pharmacopoeia (CEP) for our losartan API.
We completed more than 30 registration procedures, obtaining more than 100 new marketing authorisations for various finished products. We continuously monitor, evaluate, and upgrade our established products, and bring them in line with the latest findings and requirements. We filed marketing authorisation documents for over 8,200 variations in the first quarter of 2022.
R&D expenses totalled €41.8 million, accounting for 9.7% of revenue and 7% year-on-year growth.
In the first quarter of 2022, the Krka Group investments reached €22.7 million, of that €14.8 million in the controlling company.
Our major investments were as follows:
At the end of March 2022, the Krka Group employed 11,631 people, up 1% on the 2021 year-end, of whom 5,378 worked abroad, constituting 46% of the total Krka Group headcount.Of all Krka Group employees, 51% have at least university-level qualifications; of that, 209 hold a doctoral degree.Together with agency workers, the Krka Group employed 12,525 persons.
We grant scholarships to ensure continuous recruitment of new talented employees. At the end of March, we listed 93 scholarship holders, primarily pharmacy and chemistry students. We also award grants to students from other fields of interest to Krka. At the end of March, 159 employees were enrolled in part-time graduate studies co-funded by Krka, 41 of them in postgraduate studies.
As at 31 March 2022, the Krka share traded at €96.00 on the Ljubljana Stock Exchange, an 18.6% drop on year-end 2021. Market capitalisation of Krka amounted to €3.1 billion. At the end of March, Krka had a total of 46,898 shareholders. In the first quarter of 2022, we acquired 21,689 treasury shares. As at 31 March 2022, we owned 1,705,597 treasury shares, accounting for 5.201% of share capital.