Krka

Quarterly Report • Mar 14, 2024

2023 Unaudited Consolidated Financial Statements of the Krka Group and Unaudited Financial Statements of Krka, d. d., Novo mesto with Relevant Notes

Novo mesto, March 2024

At a glance	3
Financial highlights	4
Performance analysis	5
Sales	8
Research and development	10
Investments	12
Employees	13
Investor and share information	13
Sustainable operations	13
Subsequent events	14
Unaudited consolidated statement of financial position of the Krka Group	15
Unaudited consolidated income statement of the Krka Group	16
Unaudited consolidated statement of other comprehensive income of the Krka Group	16
Unaudited consolidated statement of changes in equity of the Krka Group	17
Unaudited consolidated statement of cash flows of the Krka Group	19
Unaudited statement of financial position of Krka, d. d. , Novo mesto	20
Unaudited income statement of Krka, d. d., Novo mesto	21
Unaudited statement of other comprehensive income of Krka, d. d., Novo mesto	21
Unaudited statement of changes in equity of Krka, d. d., Novo mesto	22
Unaudited statement of cash flows of Krka, d. d., Novo mesto	24

Based on the provisions of the Ljubljana Stock Exchange Rules and Article 17 of Regulation (EU) No 596/2014, Krka, d. d., Novo mesto hereby presents

2023 UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE KRKA GROUP AND UNAUDITED FINANCIAL STATEMENTS OF KRKA, D. D., NOVO MESTO WITH RELEVANT NOTES

The 2023 unaudited consolidated financial statements of the Krka Group and unaudited financial statements of Krka, d. d., Novo mesto with comparative data for 2022 have been prepared in accordance with the International Financial Reporting Standards (IFRS). The 2022 comparative statements have been audited.

Krka, d. d., Novo mesto has no authorised capital and has made no conditional share capital increase.

At a glance

Krka, d. d., Novo mesto (hereinafter the Company, Krka, or the controlling company) is the controlling company of the Krka Group, which comprised the following subsidiaries as at 31 December 2023:

	Ownership share
	of the controlling company
	31 Dec 2023 (%)
TERME KRKA, d. o. o., Novo mesto KRKA-FARMA d.o.o., Zagreb, Croatia	100 100
KRKA ROMANIA S.R.L., Bucharest, Romania	100
KRKA-FARMA DOO BEOGRAD, Belgrade, Serbia	100
KRKA-FARMA DOOEL Skopje, Skopje, North Macedonia	100
KRKA Bulgaria EOOD, Sofia, Bulgaria	100
KRKA HELLAS E.P.E., Athens, Greece	100
KRKA FARMA d.o.o., Sarajevo, Sarajevo, Bosnia and Herzegovina	100
KRKA-RUS LLC, Istra, Russian Federation	100
KRKA FARMA LLC, Istra, Russian Federation	100
KRKA UKRAINE LLC, Kiev, Ukraine	100
LLC 'KRKA Kazakhstan', Almaty, Kazakhstan	100
KRKA - POLSKA Sp. z o.o., Warsaw, Poland	100
KRKA ČR, s. r. o., Prague, Czechia	100
KRKA Magyarország Kft., Budapest, Hungary	100
KRKA Slovensko, s.r.o., Bratislava, Slovakia	100
UAB KRKA Lietuva, Vilnius, Lithuania	100
SIA KRKA Latvija, Riga, Latvia	100
TAD Pharma GmbH, Cuxhaven, Germany	100
Krka Sverige AB, Stockholm, Sweden	100
KRKA Pharma GmbH, Wien, Vienna, Austria	100
KRKA Farmacêutica, Unipessoal Lda., Estoril, Portugal	100
KRKA FARMACÉUTICA, S.L., Madrid, Spain	100
KRKA Farmaceutici Milano S.r.l., Milan, Italy	100
KRKA France Eurl, Paris, France	100
KRKA PHARMA DUBLIN LIMITED, Dublin, Ireland	100
KRKA Belgium, SA, Brussels, Belgium	100
KRKA Finland Oy, Espoo, Finland	100
KRKA UK LTD, London, United Kingdom	100
123 Acurae Pharma GmbH, Cuxhaven, Germany	100
KRKA Netherlands B.V., Breskens, Netherlands	100
Ningbo Krka Menovo Pharmaceutical Company Limited, Ningbo, China	60
KRKA USA LLC, Wilmington, United States of America	100
KRKA GCC L.L.C., Dubai, United Arab Emirates	100

As at 31 December 2023, the subsidiary Terme Krka, d. o. o. held a 100-percent interest in Golf Grad Otočec, d. o. o., Slovenia, while the subsidiary KRKA France Eurl held a 100-percent interest in HCS bvba in Belgium. The Chinese company Ningbo Menovo Pharmaceutical Co. Ltd. owns 40% of Ningbo Krka Menovo Pharmaceutical Co. Ltd.

Financial highlights

	Krka Group			Company
€ thousand	2023		2022	Index	2023	2022	Index
Revenue	1,806,391		1,717,453	105	1,674,572	1,553,514	108
– Of that revenue from contracts with customers (products and services)	1,798,969		1,708,542	105	1,449,739	1,356,075	107
Gross profit	1,026,709		974,393	105	888,427	890,182	100
Earnings before interest, tax, depreciation and amortisation (EBITDA)	504,215		488,895	103	402,547	440,086	91
Operating profit (EBIT)1	399,621		381,211	105	322,308	357,870	90
Profit before tax (EBT)	367,126		433,073	85	329,049	412,258	80
Net profit	313,732		363,662	86	294,481	348,215	85
Effective tax rate	14.5%		16.0%		10.5%	15.5%
R&D expenses	178,582		162,580	110	173,783	158,292	110
Investments	131,932		105,974	124	111,751	79,540	140
	31 Dec 2023 31 Dec 2022				Index 31 Dec 2023 31 Dec 2022		Index
Non-current assets	1,059,267		1,125,025	94	1,076,235	1,123,594	96
Current assets	1,705,024		1,562,475	109	1,537,636	1,392,950	110
– Inventories	604,621		553,332	109	513,892	492,978	104
– Trade receivables	509,070		402,730	126	463,126	357,889	129
– Cash and cash equivalents	174,011		518,934	34	140,993	470,297	30
Equity	2,181,766		2,138,509	102	2,133,258	2,060,792	104
Non-current liabilities	149,218	132,130		113	118,930	102,333	116
Current liabilities	433,307	416,861		104	361,683	353,419	102
– Trade payables	153,762		140,837	109	175,847	194,143	91
RATIOS		2023		2022		2023	2022
Gross profit margin	56.8%		56.7%		53.1%	57.3%
EBITDA margin		27.9% 28.5%			24.0%	28.3%
EBIT margin		22.1% 22.2%			19.2%	23.0%
EBT margin		20.3%		25.2%		19.6%	26.5%
Net profit margin (ROS)		17.4%		21.2%		17.6%	22.4%
Return on equity (ROE)2	14.5%			17.9%		14.0%	17.7%
Return on assets (ROA)3	11.5%			13.9%		11.5%	14.1%
Liabilities/Equity	0.267			0.257		0.225	0.221
R&D expenses/Revenue		9.9%		9.5%		10.4%	10.2%
NUMBER OF EMPLOYEES		2023		2022		2023	2022
Year-end		11,780		11,598		6,509	6,320
Average		11,667		11,569		6,411	6,254
KRKA GROUP SHARE INFORMATION				2023		2022	Index
Total number of shares issued				32,793,448	32,793,448		100
Earnings per share (EPS) in €4				10.14		11.69	87
Gross dividend per share in €				6.60		5.63	117
Closing price at the end of the year in € 5			110.00			92.00	120
Price/Earnings ratio (P/E)				10.85		7.87	138
Book value in €6				66.53		65.21	102
Price/Book value (P/B)				1.65		1.41	117
Market capitalisation in € thousand (31 Dec)				3,607,279	3,016,997		120

¹ The difference between operating income and expenses ² Net profit/Average shareholders' equity in the year

³ Net profit/Average total asset balance in the year

⁴ Net profit for the year attributable to majority equity holders of the Krka Group/Average number of shares issued in the year, excluding treasury shares

⁵ Share price on the Ljubljana Stock Exchange

⁶ Equity as at 31 Dec/Total number of shares issued

Krka Group performance analysis

Operating income

Sales

In 2023, the Krka Group generated revenue of €1,806.4 million, an €88.9 million or 5% increase on 2022, of which revenue from contracts with customers on sales of products and services reached €1,799.0 million and revenue from contracts with customers on sales of materials and other sales revenue constituted the difference. Over the past five years, average annual sales grew by 4.2% in volume and 6.3% in value.

Operating expenses

The Krka Group posted operating expenses totalling €1,412.9 million, up €67.5 million or 5% on 2022.

Krka Group operating expenses comprised: cost of goods sold totalling €779.7 million; selling and distribution expenses totalling €347.9 million; R&D expenses totalling €178.6 million; and general and administrative expenses totalling €106.8 million. Operating expenses accounted for 78% of revenue and, over the past five years, ranged between 75% in 2020 and 83% in 2019.

Cost of goods sold, up 5% on 2022, represented the largest item in the Krka Group operating expense structure. They accounted for 43.2% of total revenue in 2023 and 43.3% in 2022. Selling and distribution expenses remained at the 2022 level and accounted for 19.3% of total revenue, down 1.0 percentage point on 2022. R&D expenses constituted 9.9% of total revenue (up 0.4 percentage points on 2022) and increased by 10%. General and administrative expenses amounted to 5.9% of total revenue, up 18%, while their proportion in revenue increased by 0.6 percentage points.

Financial income and expenses

The Krka Group operates in diverse international environments and is exposed to foreign exchange risks in certain sales and purchase markets.

The cumulative amount of net foreign exchange differences and net income from currency risk hedging of the Krka Group generated a total loss of €38.8 million in 2023. Of that, net foreign exchange losses, arising primarily from the depreciation of the Russian rouble, totalled €38.3 million; derivatives income totalled €4.3 million; and derivatives expenses totalled €4.8 million. Interest income totalled €11.2 million and dividend income €0.8 million. Financial expenses consisted of interest expense of €0.5 million and other financial expenses of €12.5 million.

The Krka Group recorded net financial loss of €32.5 million in 2023. In 2022, the Krka Group generated net financial gain of €51.9 million.

Operating results

EBITDA, EBIT, and net profit

The Krka Group recorded EBIT totalling €399.6 million, up €18.4 million or 5% on 2022. The Krka Group posted EBITDA totalling €504.2 million, up €15.3 million or 3%. Over the past five years, annual EBIT growth averaged 11.4% and annual EBITDA growth averaged 8.0%.

In 2023, profit before tax of the Krka Group decreased by €65.9 million or 15% to €367.1 million. Its effective tax rate was 14.5%. The Krka Group recorded net profit totalling €313.7 million, down €49.9 million or 14% on 2022. Profit before tax and net profit decreased year on year primarily owing to the depreciation of the rouble against the euro in 2023 and strong rouble appreciation in the year before. Over the past five years, average annual net profit growth was 12.5%.

Assets

		Share		Share
€ thousand	31 Dec 2023	(%)	31 Dec 2022	(%)	Index
Non-current assets	1,059,267	38.3	1,125,025	41.9	94
Property, plant and equipment	790,345	28.6	779,336	29.0	101
Intangible assets	102,348	3.7	102,550	3.8	100
Investments and loans	117,772	4.2	188,309	7.0	63
Other	48,802	1.8	54,830	2.1	89
Current assets	1,705,024	61.7	1,562,475	58.1	109
Inventories	604,621	21.9	553,332	20.6	109
Trade receivables	509,070	18.4	402,730	15.0	126
Other	591,333	21.4	606,413	22.5	98
Total assets	2,764,291	100.0	2,687,500	100.0	103

At the end of 2023, Krka Group assets were valued at €2,764.3 million, a €76.8 million or 3% increase on yearend 2022. The ratio of non-current to current assets in the overall asset structure differed from that recorded at year-end 2022, as non-current assets decreased by 3.6 percentage points and totalled 38.3%.

Krka Group non-current assets were valued at €1,059.3 million, a €65.8 million or 6% decrease on year-end 2022. The most important item in the Krka Group asset structure was property, plant and equipment (PP&E). It was valued at €790.3 million and accounted for 28.6% of total Krka Group assets. Intangible assets amounted to €102.3 million and accounted for 3.7% of total assets.

Krka Group current assets were valued at €1,705.0 million and increased by €142.5 million or 9% on yearend 2022. Inventories amounted to €604.6 million or 21.9% of total Krka Group assets. Trade receivables due from customers outside the Krka Group totalled €509.1 million, accounting for 18.4% of total Krka Group assets. Inventories increased by €51.3 million or 9% and trade receivables increased by €106.3 million or 26%. Krka Group current loans totalled €58.7 million or 2.1% of its total assets and included a €50.0 million deposit with maturity of more than 90 days and less than one year with at a foreign bank with a high credit rating. Investments at fair value through profit or loss totalled €236.8 million and represented investments into treasury bills of western European EU countries with a high credit rating. Cash and cash equivalents were valued at €174.0 million, down €344.9 million on year-end 2022, accounting for 6.3% of Krka Group total assets. From the beginning until the end of 2023, cash and cash equivalents decreased primarily on the back of reallocation of surplus cash investments. We transferred a portion of cash and cash equivalents to current loans, while the majority was transferred to investments at fair value through profit or loss. We reallocated investments to disperse credit risk and maturity of individual investments.

Equity and liabilities

		Share		Share
€ thousand	31 Dec 2023	(%)	31 Dec 2022	(%)	Index
Equity	2,181,766	78.9	2,138,509	79.6	102
Non-current liabilities	149,218	5.4	132,130	4.9	113
Current liabilities	433,307	15.7	416,861	15.5	104
Total equity and liabilities	2,764,291	100.0	2,687,500	100.0	103

As at 31 December 2023, the Krka Group posted €43.3 million or 2% higher equity than at year-end 2022. The rise was attributable to Krka Group net profit totalling €313.7 million and acquisition of non-controlling interests totalling €1.3 million. Equity declined due to other comprehensive income net of tax totalling €53.5 million, dividends paid totalling €204.4 million, and repurchase of treasury shares totalling €13.9 million.

The Krka Group recorded provisions of €124.4 million, up €17.2 million on year-end 2022 due to higher postemployment and other non-current employee benefits, which increased by €17.3 million to €113.3 million. Provisions for lawsuits amounted to €10.6 million and remained unchanged. Other provisions amounted to €0.5 million, down €0.1 million.

Of Krka Group current liability items, trade payables increased by €12.9 million (of which payables to domestic suppliers increased by €1.7 million and payables to suppliers abroad by €11.3 million). Current liabilities from contracts with customers increased by €4.5 million (of which bonuses and volume rebates increased by €6.4 million and right of return by €0.8 million, while contract liabilities decreased by €2.7 million). Other current liabilities increased by €18.6 million, of which payables to employees increased by €19.0 million.

Cash flow statement

€ thousand	2023	2022
Net cash flow from operating activities	227,254	467,651
Net cash flow from investing activities	-343,235	76,414
Net cash flow from financing activities	-229,822	-187,022
Net change in cash and cash equivalents	-345,803	357,043

Net change in Krka Group cash and cash equivalents (exclusive of exchange rate fluctuations) yielded a decrease of €345.8 million in 2023, because the positive cash flow from operating activities was lower than the negative cash flow from investing and financing activities.

The Krka Group generated €446.5 million operating profit before changes in net current assets. Changes in current assets that had a positive impact on cash flow consisted of changes in trade payables, provisions, and other current liabilities, while changes in trade receivables, inventories, and deferred revenue had a negative impact. Income tax paid further decreased net cash flow from operating activities.

Negative cash flow from investing activities totalling €343.2 million were primarily generated from net payments for current investments totalling €209.5 million and acquisition of property, plant and equipment of €130.0 million. Negative cash flows from financing activities totalling €229.8 million primarily resulted from dividends paid and other profit shares of €204.4 million and repurchased treasury shares of €13.9 million.

Performance ratios

Performance ratios are in line with the Krka Group's key strategic objectives.

Sales

Krka Group product and service sales by region

		Share		Share
€ thousand	2023	(%)	2022	(%)	Index
Region Slovenia	113,777	6.3	103,047	6.0	110
Region South-East Europe	249,330	13.9	224,523	13.1	111
Region East Europe	593,951	33.0	623,377	36.5	95
Region Central Europe	397,079	22.1	364,154	21.3	109
Region West Europe	369,624	20.5	327,343	19.2	113
Region Overseas Markets	75,208	4.2	66,098	3.9	114
Total	1,798,969	100.0	1,708,542	100.0	105

In 2023, the Krka Group generated €1,799.0 million revenue from contracts with customers on sales of products and services, an increase of €90.4 million or 5% on the 2022 results. We recorded sales growth in most sales markets.

Region East Europe recorded the highest sales, €594.0 million or 33.0% of total Krka Group sales, down 5% year on year. In the Russian Federation, we made €346.8 million in product sales, a 10% drop on 2022. Sales growth denominated in Russian roubles reached 15% compared to 2022, while sales volume climbed by 7%. The difference between the euro and the rouble sales indices resulted from the considerable depreciation of the rouble. We pay special attention to Russian rouble risk management. The reduced availability of financial instruments saw us focus on natural risk mitigation methods of currency exposure in 2023. Last year, we manufactured more than 77% of all Krka products on demand in the Russian Federation in our subsidiary Krka-Rus. We recorded growth in all other regional markets, except Ukraine and Turkmenistan. In Ukraine, product sales added up to €83.4 million, resulting in 12% drop on 2022.

Region Central Europe, comprising the Visegrad Group and the Baltic states, followed with sales of €397.1 million or 22.1% of total Krka Group sales. We reached 9% year-on-year growth. Poland, the leading market in the region, generated product sales of €180.8 million and recorded 8% growth. In Czechia, product sales increased by 9% to €60.9 million and in Hungary by 11% to €52.3 million. We increased sales also in all other countries in the region.

Region West Europe ranked third in terms of sales with €369.6 million or 20.5% of total Krka Group sales. Year on year, sales were up 13%. The region's largest market was Germany, where product sales totalled €105.9 million and reached 20% growth. It was followed by the Scandinavian countries, Portugal, and Italy. Germany, the Scandinavian countries, Portugal, and the United Kingdom recorded strongest absolute growth in sales.

Product sales in Region South-East Europe amounted to €249.3 million, up 11% on 2022, accounting for 13.9% of total Krka Group sales. Romania and Croatia remained our two leading markets in the region. We recorded the highest absolute sales growth in Romania, Serbia, and Croatia. We generated product sales of €72.4 million in Romania, reaching 15% growth, and €46.0 million in sales in Croatia, recording 12% growth. Sales increased in all markets in the region.

In Region Slovenia, sales of products and services totalled €113.8 million, accounting for 6.3% of total Krka Group sales. Sales grew by 10%. Product sales of €66.1 million constituted the bulk of sales total, recording 9% growth. Health resort and tourist services yielded €47.7 million, a 12% rise on 2022.

Region Overseas Markets accounted for a 4.2% share in total Krka Group sales and yielded €75.2 million in product sales, a 14% year-on-year climb.

		Share		Share
€ thousand	2023	(%)	2022	(%)	Index
Human health products	1,646,633	91.6	1,572,949	92.1	105
– Prescription pharmaceuticals	1,469,381	81.7	1,390,972	81.4	106
– Non-prescription products	177,252	9.9	181,977	10.7	97
Animal health products	104,640	5.8	93,041	5.4	112
Health resort and tourist services	47,696	2.6	42,552	2.5	112
Total	1,798,969	100.0	1,708,542	100.0	105

Krka Group sales by product and service group

Sales of prescription pharmaceuticals totalled €1,469.4 million, up 6% on 2022, accounting for 81.7% of total Krka Group product and service sales. We increased sales in all regions, except Region East Europe, ranging as follows: 14% Region Overseas Markets;

14% Region West Europe;

13% Region South-East Europe;

8% Region Slovenia; and

8% Region Central Europe.

Among our ten largest individual markets, sales growth of prescription pharmaceuticals was the highest in Germany, Poland, Romania, and the Scandinavian countries, and among our other markets in the United Kingdom. Top-ranking therapeutic classes of prescription pharmaceuticals included cardiovascular agents, central nervous system agents, gastrointestinal tract medicines, and pain relievers.

The ten leading prescription pharmaceuticals in terms of sales were product groups containing:

• perindopril (Prenessa*, Co-Prenessa*, Amlessa*, Co-Amlessa*, Roxiper*, Roxampex*);
• valsartan (Valsacor*, Valsacombi*, Vamloset*, Co-Vamloset*, Valarox*);
• rosuvastatin (Roswera*, Co-Roswera*);
• losartan (Lorista*, Lorista H*, Lorista HD*, Tenloris*);
• pantoprazole (Nolpaza*);
• atorvastatin (Atoris*);
• esomeprazole (Emanera*);
• tramadol (Doreta*, Tadol*);
• candesartan (Karbis*, Karbicombi*, Kandoset*); and
• naproxen (Nalgesin*).

Sales of non-prescription products totalled €177.3 million, down 3% on 2022, accounting for 9.9% of total Krka Group sales. Changing rates of the Russian rouble caused the drop in sales value. Sales volume of non-prescription products in the Russian Federation, however, saw a 5% increase. In 2023, we recorded the highest sales increases in Uzbekistan, Slovenia, and Czechia. Septolete*, Nalgesin*, Herbion*, and Septanazal* were our most important non-prescription product brands in terms of sales.

Sales of animal health products grew by 12% and amounted to €104.6 million (5.8% of total sales). Sales generated in the Russian Federation, Poland, and Germany contributed most to the growth. The combination of milbemycin and praziquantel (Milprazon*) was our best-selling animal health product. It was followed by products containing fipronil (Fypryst*, Fypryst* Combo), selamectin (Selehold*), enrofloxacin (Enroxil*), and products combining pyrantel and praziquantel (Dehinel*, Dehinel* Plus).

Health resort and tourist services yielded €47.7 million, up 12% on 2022 (2.6% of total sales). We recorded 336,174 overnight stays, a 4% year-on-year increase.

2023 sales of leading products in terms of value

*Sales of leading products are presented by leading active ingredient. Combination medicines that incorporate this active ingredient are also included. Products marketed under different product brand names or the Krka trademark in individual markets are marked with an asterisk.

Research and development

In 2023, we expanded our product range with fourteen new products, including ten new prescription pharmaceuticals, two additions to our portfolio of consumer health products and food supplements, and two veterinary medicines.

We finalised 698 marketing authorisation procedures, including 497 prescription pharmaceuticals and nine nonprescription products, thereby making medications more accessible to patients across various markets. In the animal health segment, we finalised 192 procedures, primarily expanding our product portfolio for companion animals.

We filed eleven patent applications for new technological solutions we evaluated as innovations at the global ranking level. Based on priority applications from 2022, we filed seven international and two European patent applications. We were granted six patent rights in various countries. Overall, more than 200 valid patents protect Krka's technological solutions.

We filed 72 applications for Krka trademarks in Slovenia. We also filed 48 international and 17 national trademark applications. In total, we have registered more than 1,100 trademarks in various countries.

New prescription pharmaceuticals

We concluded marketing authorisations for ten new products. Last year, we again focused on developing and registering single-pill products that combine two or several active substances in a single dosage form.

Single-pill combinations of angiotensin II receptor blockers and a diuretic are the drugs of choice in the treatment of patients with high blood pressure. In 2023, we concluded marketing authorisation procedures for three new single-pill combinations: Valsacor-inda (valsartan/indapamide) modified-release tablets, Telmista-amlo H (telmisartan/amlodipine/hydrochlorothiazide) tablets – also approved as Tolutris, Tolvecamo, and Tolvecom – and Telinstar (telmisartan/indapamide) modified-release tablets. The three medicinal products are innovative single-pill combinations based on Krka's know-how that will bring patients with high blood pressure an optimised way of treatment.

In European markets, we added two new medicinal products for the treatment of diabetes to our portfolio. Marketing authorisations were granted for Dagrafors (dapagliflozin) film-coated tablets and Empagliflozin Krka (empagliflozin) film-coated tablets. Both products are cutting-edge, effectively reducing glycated haemoglobin levels while also exhibiting positive effects on the cardiovascular system and kidney function.

Marketing authorisations were granted for our new antithrombotic agent Daxanlo (dabigatran), on certain markets also approved under the brand name Danengo, used for the prevention of atherothrombotic and thromboembolic events in adults with various cardiovascular diseases. Dabigatran is available in hard capsules in three different strengths and is the drug of choice for preventing venous thromboembolism after hip or knee replacement.

We obtained marketing authorisations for new medicines in China. Approval was obtained for rivaroxaban filmcoated tablets. The medicine has a broad range of therapeutic uses in preventing atherothrombotic events in adults with cardiovascular diseases. It is an advanced anticoagulant, providing an effective and safe therapy for patients and improving their quality of life. In the group of agents for treating cardiovascular diseases, an approval was granted for a medicine containing perindopril tert-butylamine. Perindopril is one of the most widely researched ACE inhibitors in terms of clinical trials, and is the drug of choice for treating hypertension, heart failure, and coronary heart disease.

We also obtained our first approval for an antidiabetic agent in the Chinese market. The medicine containing gliclazide in the form of modified-release tablets was approved. It effectively reduces blood glucose levels in diabetes 2 patients.

We obtained a Certificate of Suitability to the monograph of the European Pharmacopoeia (CEP) for a new synthesis route for a quinolone antibiotic norfloxacin, the active ingredient incorporated in Krka Nolicin film-coated tablets.

New non-prescription products

Magnezij Krka DIREKT powder, intended for direct use, is a food supplement containing 250 mg of magnesium and group B vitamins that contribute to reducing tiredness and exhaustion and normal nervous system functioning. Our product does not contain preservatives, artificial colouring agents, flavours, sweeteners, gluten, or lactose. The novel formulation allows easy intake without water.

Harntee TAD is a food supplement containing dry extracts of birch leaf, golden rod, and Java tea. The upgraded product does not contain preservatives, artificial colouring agents, flavours, sweeteners, gluten, or lactose, and supports normal urinary tract function. It is available as a powder for solution, allowing for quick beverage preparation.

New animal health products

Our portfolio of companion animal health products was expanded by Arocenia (maropitant) solution for injection for cats and dogs. The agent acts on the central nervous system, reducing nausea and preventing vomiting after surgery and chemotherapy, thus improving post-operative recovery.

We concluded the first generic decentralised procedure (DCP) for Robexera (robenacoxib) chewable tablets for dogs, available in four strengths, and approved as Rogiola in certain countries. The product contains robenacoxib, a nonsteroidal anti-inflammatory active substance from the coxib class. It is used in veterinary medicine to relieve pain and treat chronic osteoarthritis inflammation and to control inflammation and pain after soft tissue surgical procedures.

Investments

In 2023, the Krka Group allocated €131.9 million to investments, of that €111.8 million to the controlling company.

We upgraded water supply systems and automated washing systems in Notol, our plant for production of solid dosage forms in Novo mesto, Slovenia. This year, we are finishing the replacement of packaging lines. We also plan to increase tablet compression capacities at Notol and Notol 2 and upgrade and increase granulation capacities.

The investment in additional capacities for compression mixture preparation and granulation in the tablet compression process and in logistic capacities at the Solid Dosage Products plant (Slovene: OTO) in Novo mesto (Slovenia) is drawing to a close.

We completed the investment in room refurbishment in our development-and-control laboratories in Novo mesto (Slovenia). We obtained additional rooms for laboratories and managing samples and packaging materials.

We increased production capacities for granulation and packaging at the Ljutomer plant, Slovenia.

We installed a new filling line for animal health products in the Powders and Solutions at the Bršljin Department in Novo mesto, Slovenia.

At Beta Šentjernej plant, Slovenia, we upgraded the systems and equipment, and increased the production capacity.

Construction of a new multi-purpose building called Paviljon 3 is drawing to a close in Ločna, Novo mesto, Slovenia. The building design incorporates our microbiology laboratory extension and additional rooms for Supply Chain Management and other organisational units. We also built a fire-water retention basin.

We are increasing production capacities for solid forms of animal health products in the production and distribution centre in Jastrebarsko, Croatia.

We obtained the integral building permit for our plant in Krško, Slovenia, comprising the Sinteza 2 API production plant, laboratories for chemical analyses (Slovene: Kemijsko-analitski center), the liquid raw materials warehouse, and the wastewater treatment plant, based on project documentation and an environmental impact assessment. We are still in the process of obtaining the environmental protection and chemical safety (SEVESO) permit. At the end of 2023, we started construction of a technologically advanced wastewater treatment plant, but intend to postpone construction of other buildings for a few years.

With the view to the Krka Group's long-term development, we purchased several real estates in the industrial zone of Cikava in Novo mesto, Slovenia, covering 23 hectares.

Employees

At the end of 2023, the Krka Group employed 11,780 people, of whom 45% or 5244 worked outside Slovenia. Of all employees, 51% have at least university-level qualifications, and of whom, 204 hold a doctoral degree. Including agency workers, the Krka Group employed 12,753 personnel.

Investor and share information

In 2023, the Krka share price increased by 19.6%, reaching €110.00 as at 31 December 2023. Shareholders received a dividend of €6.60 per share, up 17% year on year. Considering the share price at the end of 2023, this constitutes a 6% annual dividend yield.

At the end of the year, Krka had 47,172 shareholders, on par with year-end 2022. The shareholder structure of Krka is stable, composed of domestic retail investors in 41.1% and foreign investors in 20.5%, and was subject to no major changes last year.

In 2023, we repurchased 130,117 treasury shares. On 31 December 2023, Krka held 1,915,966 treasury shares, accounting for 5.843% of the share capital.

Sustainable operations

The Supervisory and Management Boards adopted the revised ESG Policy of the Krka Group and strategic goals in key sustainability areas. Sustainability and ESG goals were fully incorporated into the 2024–2028 Krka Group Development Strategy for the first time. The ESG Policy is the master ESG governance document for the environmental (E), social (S), and governance (G) aspects of the Group. It sets down the fundamental sustainability principles and efforts that the Krka Group pursues in its operations throughout the value chain and in relations with various stakeholder groups.

The fundamental objective of integrating the Krka Group sustainability principles and ESG governance approaches into management processes and business decisions is to enhance the awareness of sustainability-related impacts, risks, and opportunities that can affect the success of our business operations and improve their management going forward. Moreover, the ESG Policy specifies accountability, control, and responsibility for sustainable operations within the company structure and sets priority sustainability areas and the related governance approaches. Key Krka Group sustainability areas are: (a) Product quality and patient safety; (b) Talent attraction and retention; (c) Good leadership and governance practices; (d) Accessible healthcare; (e) Planet and climate change; and (f) Compliance, integrity and transparency.

The adopted ESG goals complement the Krka Group ESG Policy and contribute to our long-term business success. They outline specific strategic directions and goals as well as key performance indicators (KPI) in key sustainability areas. The EGS Policy and a summary of strategic ESG goals are published on the Krka website.

We have undertaken activities to implement the EU Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS), further upgrading sustainability reporting and governance approaches in key sustainability areas. Sustainability reporting will be subject to external audit in 2024.

On 24 November 2023, Krka scored 50 out of 100 in the 2023 S&P Global Corporate Sustainability Assessment (CSA) performed by S&P Global, the international credit and ESG rating agency. As at the date, Krka's score ranked among the top 10% in the pharmaceutical industry.

The received independent credit rating score confirms the outlined direction of the Krka Group's sustainable business operations and ESG governance, prioritising our corporate social responsibility and care for health and well-being of patients. We provide patients with access to high-quality, safe, and effective medicines produced in accordance with the highest standards of good manufacturing practice. In this process, we place strong emphasis on environmental protection and reduction of our environmental impact, while adhering to the highest standards of business ethics, integrity, and transparent operations in the Krka Group's governance. The received score encourages and commits us to improve the sustainability practices of the Krka Group.

Subsequent events

Establishment of joint venture in India

On 25 January 2024, Krka informed investors it reached an agreement with an Indian company Laurus Labs Ltd., to establish a joint venture, Krka Pharma Pvt. Ltd. in Hyderabad, India. According to the agreement, Krka holds a 51% stake and Laurus a 49% stake in the new company.

Krka and Laurus have been contractual partners for years and their businesses complement each other. After discussing the opportunities to strengthen their cooperation and synergies by combining knowledge and resources, the two partners have agreed to establish and develop the new company gradually. The joint venture will develop a plan to enter the Indian market and other markets outside the European Union where neither party is currently present with its finished products.

The registered capital of the newly established company amounts up to €50 million in Indian rupees. Krka and Laurus agreed to subscribe the registered capital in stages, depending on the financing needs. The joint venture will develop its business activities step by step.

Repurchase of treasury shares in 2024

Krka repurchased 41,110 treasury shares between 1 January 2024 and 12 March 2024, and thus held 1,957,076 treasury shares at the end of this period, accounting for 5.97% of total shares.

Novo mesto, March 2024 Krka, d. d., Novo mesto

Management Board

Unaudited consolidated statement of financial position of the Krka Group

€ thousand	31 Dec 2023	31 Dec 2022	Index
Assets
Property, plant and equipment	790,345	779,336	101
Intangible assets	102,348	102,550	100
Loans	70,098	77,539	90
Investments	47,674	110,770	43
Deferred tax assets	47,728	53,770	89
Other non-current assets	1,074	1,060	101
Total non-current assets	1,059,267	1,125,025	94
Assets held for sale	41	41	100
Inventories	604,621	553,332	109
Contract assets	429	946	45
Trade receivables	509,070	402,730	126
Other receivables	51,364	27,728	185
Loans	58,719	6,327	928
Investments	306,769	52,437	585
Cash and cash equivalents	174,011	518,934	34
Total current assets	1,705,024	1,562,475	109
Total assets	2,764,291	2,687,500	103
Equity
Share capital	54,732	54,732	100
Treasury shares	-138,489	-124,566	111
Reserves	154,495	192,204	80
Retained earnings	2,091,317	1,996,246	105
Total equity holders of the controlling company	2,162,055	2,118,616	102
Non-controlling interests	19,711	19,893	99
Total equity	2,181,766	2,138,509	102
Liabilities
Provisions	124,398	107,235	116
Deferred income	5,547	6,048	92
Lease liabilities	8,547	8,089	106
Deferred tax liabilities	10,726	10,758	100
Total non-current liabilities	149,218	132,130	113
Trade payables	153,762	140,837	109
Lease liabilities	3,452	3,752	92
Income tax payables	8,960	28,194	32
Contract liabilities	162,173	157,710	103
Other current liabilities	104,960	86,368	122
Total current liabilities	433,307	416,861	104
Total liabilities	582,525	548,991	106
Total equity and liabilities	2,764,291	2,687,500	103

€ thousand	2023	2022	Index
Revenue	1,806,391	1,717,453	105
– Revenue from contracts with customers	1,801,873	1,712,530	105
– Other revenue	4,518	4,923	92
Cost of goods sold	-779,682	-743,060	105
Gross profit	1,026,709	974,393	105
Other operating income	6,147	9,197	67
Selling and distribution expenses	-347,898	-349,111	100
– Whereof net impairments and write-offs of receivables	3,712	-1,875
R&D expenses	-178,582	-162,580	110
General and administrative expenses	-106,755	-90,688	118
Operating profit	399,621	381,211	105
Financial income	23,567	57,668	41
Financial expenses	-56,062	-5,806	966
Net financial result	-32,495	51,862
Profit before tax	367,126	433,073	85
Income tax expense	-53,394	-69,411	77
Net profit	313,732	363,662	86
Attributable to:
– Equity holders of the controlling company	313,946	363,296	86
– Non-controlling interests	-214	366
Basic earnings per share (€)	10.14	11.69	87
Diluted earnings per share (€)	10.14	11.69	87

Unaudited consolidated income statement of the Krka Group

Unaudited consolidated statement of other comprehensive income of the Krka Group

€ thousand	2023	2022	Index
Net profit	313,732	363,662	86
Other comprehensive income for the year
Other comprehensive income reclassified to profit or loss
at a future date
Translation reserve	-49,705	11,850
Net other comprehensive income reclassified to profit or loss
at a future date	-49,705	11,850
Other comprehensive income that will not be reclassified
to profit or loss at a future date
Change in fair value of financial assets	10,912	128	8,525
Restatement of post-employment benefits	-12,007	26,099
Deferred tax effect	-2,695	-3,417	79
Net other comprehensive income that will not be reclassified to profit or loss at a future date	-3,790	22,810
Total other comprehensive income for the year (net of tax)	-53,495	34,660
Total comprehensive income for the year (net of tax)	260,237	398,322	65
Attributable to:
– Equity holders of the controlling company	261,740	398,461	66
– Non-controlling interests	-1,503	-139	1,081

Unaudited consolidated statement of changes in equity of the Krka Group

			Reserves					Retained earnings			Total equity
	Share	Treasury	Reserves for treasury	Share	Legal	Statutory	Fair value	Translation	Other profit	Retained	Profit for	holders of the controlling	Non controlling	Total
€ thousand Balance at 1 Jan 2023	capital 54,732	shares -124,566	shares 124,566	premium 105,897	reserves 14,990	reserves 30,000	reserve 2,670	reserve -85,919	reserves 1,442,702	earnings 200,273	the year 353,271	company 2,118,616	interests 19,893	equity 2,138,509
Net profit	0	0	0	0	0	0	0	0	0	0	313,946	313,946	-214	313,732
Total other comprehensive income for the year (net of tax)	0	0	0	0	0	0	-3,181	-48,451	0	-574	0	-52,206	-1,289	-53,495
Total comprehensive income for the year (net of tax)	0	0	0	0	0	0	-3,181	-48,451	0	-574	313,946	261,740	-1,503	260,237
Transactions with owners, recognised in equity
Formation of other profit reserves under the resolution of the AGM	0	0	0	0	0	0	0	0	101,893	-101,893	0	0	0	0
Transfer of previous periods' profit to retained earnings	0	0	0	0	0	0	0	0	0	353,271	-353,271	0	0	0
Repurchase of treasury shares	0	-13,923	0	0	0	0	0	0	0	0	0	-13,923	0	-13,923
Formation of reserves for treasury shares	0	0	13,923	0	0	0	0	0	0	0	-13,923	0	0	0
Dividends paid	0	0	0	0	0	0	0	0	0	-204,378	0	-204,378	0	-204,378
Acquisition of non-controlling interests	0	0	0	0	0	0	0	0	0	0	0	0	1,321	1,321
Total transactions with owners, recognised in equity	0	-13,923	13,923	0	0	0	0	0	101,893	47,000	-367,194	-218,301	1,321	-216,980
Balance at 31 Dec 2023	54,732	-138,489	138,489	105,897	14,990	30,000	-511	-134,370	1,544,595	246,699	300,023	2,162,055	19,711	2,181,766

			Reserves						Retained earnings		Total equity
			Reserves for						Other			holders of the	Non
€ thousand	Share capital	Treasury shares	treasury shares	Share premium	Legal reserves	Statutory reserves	Fair value reserve	Translation reserve	profit reserves	Retained earnings	Profit for the year	controlling company	controlling interests	Total equity
Balance at 1 Jan 2022	54,732	-114,541	114,541	105,897	14,990	30,000	-22,077	-98,274	1,370,902	155,083	293,952	1,905,205	13,880	1,919,085
Net profit	0	0	0	0	0	0	0	0	0	0	363,296	363,296	366	363,662
Total other comprehensive income for the year (net of tax)	0	0	0	0	0	0	24,747	12,355	0	-1,937	0	35,165	-505	34,660
Total comprehensive income for the year (net of tax)	0	0	0	0	0	0	24,747	12,355	0	-1,937	363,296	398,461	-139	398,322
Transactions with owners, recognised in equity
Formation of other profit reserves under the resolution of the AGM	0	0	0	0	0	0	0	0	71,800	-71,800	0	0	0	0
Transfer of previous periods' profit to retained earnings	0	0	0	0	0	0	0	0	0	293,952	-293,952	0	0	0
Repurchase of treasury shares	0	-10,025	0	0	0	0	0	0	0	0	0	-10,025	0	-10,025
Formation of reserves for treasury shares	0	0	10,025	0	0	0	0	0	0	0	-10,025	0	0	0
Dividends paid	0	0	0	0	0	0	0	0	0	-175,025	0	-175,025	0	-175,025
Acquisition of non-controlling interests	0	0	0	0	0	0	0	0	0	0	0	0	6,152	6,152
Total transactions with owners, recognised in equity	0	-10,025	10,025	0	0	0	0	0	71,800	47,127	-303,977	-185,050	6,152	-178,898
Balance at 31 Dec 2022	54,732	-124,566	124,566	105,897	14,990	30,000	2,670	-85,919	1,442,702	200,273	353,271	2,118,616	19,893	2,138,509

€ thousand	2023	2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit	313,732	363,662
Adjustments for:	132,771	188,618
– Amortisation/Depreciation	104,594	107,684
– Net foreign exchange differences	-27,030	-224
– Net write-offs and allowances for inventories	11,420	20,321
– Net impairments and write-offs of receivables	-3,712	1,875
– Investment income	-25,534	-15,817
– Investment expenses	6,688	89
– Income on financing activities	-4	0
– Interest expense and other financial expenses	12,955	5,279
– Income tax expense	53,394	69,411
Operating profit before changes in net current assets	446,503	552,280
Change in trade receivables	-104,133	63,898
Change in inventories	-62,709	-117,946
Change in trade payables	24,477	32,820
Change in provisions	1,770	-4,272
Change in deferred income	-501	-827
Change in other current liabilities	15,944	-1,410
Income tax paid	-94,097	-56,892
Net cash flow from operating activities	227,254	467,651
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received	9,668	3,115
Dividends received	798	631
Proceeds from sale of property, plant and equipment	2,433	4,949
Purchase of property, plant and equipment	-130,024	-87,905
Purchase of intangible assets	-9,187	-6,827
Proceeds from non-current loans	4,194	2,542
Payments for non-current loans	-2,009	-42,690
Net payments for/proceeds from current loans	-46,784	189,589
Proceeds from sale of non-current investments	33,346	4,950
Payments for acquiring non-current investments	-51	-32,970
Proceeds from sale of current investments	359,100	153,804
Payments for acquiring current investments	-568,607	-121,621
Proceeds from derivatives	4,277	8,847
Payments for derivatives	-389	0
Net cash flow from investing activities	-343,235	76,414
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid	-8,657	-4,179
Lease liabilities paid	-4,184	-3,926
Dividends and other profit shares paid	-204,379	-175,044
Repurchase of treasury shares	-13,923	-10,025
Proceeds from payment of non-controlling interests	1,321	6,152
Net cash flow from financing activities	-229,822	-187,022
Net decrease/increase in cash and cash equivalents	-345,803	357,043
Cash and cash equivalents at beginning of year	518,934	159,838
Effect of movements in exchange rates on cash held	880	2,053
Closing balance of cash and cash equivalents	174,011	518,934

Unaudited consolidated statement of cash flows of the Krka Group

Unaudited statement of financial position of Krka, d. d. , Novo mesto

€ thousand	31 Dec 2023	31 Dec 2022	Index
Assets
Property, plant and equipment	595,525	566,780	105
Intangible assets	26,043	24,960	104
Investments in subsidiaries	357,265	355,763	100
Loans	41,243	56,013	74
Investments	47.67	110,769	43
Deferred tax assets	7,846	8,666	91
Other non-current assets	640	643	100
Total non-current assets	1,076,235	1,123,594	96
Assets held for sale	41	41	100
Inventories	513,892	492,978	104
Trade receivables	463,126	357,889	129
Other receivables	47,116	12,639	373
Loans	65,699	6,669	985
Investments	306,769	52,437	585
Cash and cash equivalents	140,993	470,297	30
Total current assets	1,537,636	1,392,950	110
Total assets	2,613,871	2,516,544	104
Equity
Share capital	54,732	54,732	100
Treasury shares	-138,489	-124,566	111
Reserves	290,481	279,760	104
Retained earnings	1,926,534	1,850,866	104
Total equity	2,133,258	2,060,792	104
Liabilities
Provisions	113,999	96,608	118
Deferred income	2,366	2,816	84
Lease liabilities	2,565	2,909	88
Total non-current liabilities	118,930	102,333	116
Trade payables	175,847	194,143	91
Borrowings	88,061	53,524	165
Lease liabilities	1,022	1,033	99
Income tax payables	0	25,660	0
Contract liabilities	18,953	21,687	87
Other current liabilities	77,800	57,372	136
Total current liabilities	361,683	353,419	102
Total liabilities	480,613	455,752	105
Total equity and liabilities	2,613,871	2,516,544	104

€ thousand	2023	2022	Index
Revenue	1,674,572	1,553,514	108
– Revenue from contracts with customers	1,664,611	1,544,409	108
– Other revenue	9,961	9,105	109
Cost of goods sold	-786,145	-663,332	119
Gross profit	888,427	890,182	100
Other operating income	1,639	4,699	35
Selling and distribution expenses	-300,863	-301,319	100
– Whereof net impairments and write-offs of receivables	3,960	-1,548
R&D expenses	-173,783	-158,292	110
General and administrative expenses	-93,112	-77,400	120
Operating profit	322,308	357,870	90
Financial income	60,964	57,744	106
Financial expenses	-54,223	-3,356	1,616
Net financial result	6,741	54,388	12
Profit before tax	329,049	412,258	80
Income tax expense	-34,568	-64,043	54
Net profit	294,481	348,215	85
Basic earnings per share (€)	9.51	11.21	85
Diluted earnings per share (€)	9.51	11.21	85

Unaudited income statement of Krka, d. d., Novo mesto

Unaudited statement of other comprehensive income of Krka, d. d., Novo mesto

€ thousand	2023	2022	Index
Net profit	294,481	348,215	85
Other comprehensive income that will not be reclassified to profit or loss at a future date
Change in fair value of financial assets	10,912	128	8,525
Restatement of post-employment benefits	-12,133	24,691
Deferred tax effect	-2,493	-3,334	75
Net other comprehensive income that will not be reclassified to profit or loss at a future date	-3,714	21,485
Total other comprehensive income for the year (net of tax)	-3,714	21,485
Total comprehensive income for the year (net of tax)	290,767	369,700	79

Unaudited statement of changes in equity of Krka, d. d., Novo mesto

			Reserves					Retained earnings
			Reserves for					Other
	Share	Treasury	treasury	Share	Legal	Statutory	Fair value	profit	Retained	Profit for	Total
€ thousand	capital	shares	shares	premium	reserves	reserves	reserve	reserves	earnings	the year	equity
Balance at 1 Jan 2023	54,732	-124,566	124,566	105,897	14,990	30,000	4,307	1,442,702	69,974	338,190	2,060,792
Net profit	0	0	0	0	0	0	0	0	0	294,481	294,481
Total other comprehensive income for the year (net of tax)	0	0	0	0	0	0	-3,202	0	-512	0	-3,714
Total comprehensive income for the year (net of tax)	0	0	0	0	0	0	-3,202	0	-512	294,481	290,767
Transactions with owners, recognised in equity
Formation of other profit reserves under the resolution of the AGM	0	0	0	0	0	0	0	101,893	-101,893	0	0
Transfer of previous period's profits to retained earnings	0	0	0	0	0	0	0	0	338,190	-338,190	0
Repurchase of treasury shares	0	-13,923	0	0	0	0	0	0	0	0	-13,923
Formation of reserves for treasury shares	0	0	13,923	0	0	0	0	0	0	-13,923	0
Dividends and other profit shares paid	0	0	0	0	0	0	0	0	-204,378	0	-204,378
Total transactions with owners, recognised in equity	0	-13,923	13,923	0	0	0	0	101,893	31,919	-352,113	-218,301
Balance at 31 Dec 2023	54,732	-138,489	138,489	105,897	14,990	30,000	1,105	1,544,595	101,381	280,558	2,133,258

			Reserves					Retained earnings
			Reserves for					Other
	Share	Treasury	treasury	Share	Legal	Statutory	Fair value	profit	Retained	Profit for	Total
€ thousand	capital	shares	shares	premium	reserves	reserves	reserve	reserves	earnings	the year	equity
Balance at 1 Jan 2022	54,732	-114,541	114,541	105,897	14,990	30,000	-19,004	1,370,902	88,671	229,954	1,876,142
Net profit	0	0	0	0	0	0	0	0	0	348,215	348,215
Total other comprehensive income for the year (net of tax)	0	0	0	0	0	0	23,311	0	-1,826	0	21,485
Total comprehensive income for the year (net of tax)	0	0	0	0	0	0	23,311	0	-1,826	348,215	369,700
Transactions with owners, recognised in equity
Formation of other profit reserves under the resolution of the AGM	0	0	0	0	0	0	0	71,800	-71,800	0	0
Transfer of previous period's profits to retained earnings	0	0	0	0	0	0	0	0	229,954	-229,954	0
Repurchase of treasury shares	0	-10,025	0	0	0	0	0	0	0	0	-10,025
Formation of reserves for treasury shares	0	0	10,025	0	0	0	0	0	0	-10,025	0
Dividends paid	0	0	0	0	0	0	0	0	-175,025	0	-175,025
Total transactions with owners, recognised in equity	0	-10,025	10,025	0	0	0	0	71,800	-16,871	-239,979	-185,050
At 31 Dec 2022	54,732	-124,566	124,566	105,897	14,990	30,000	4,307	1,442,702	69,974	338,190	2,060,792

€ thousand	2023	2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit	294,481	348,215
Adjustments for:	74,451	145,291
– Amortisation/Depreciation	80,239	82,216
– Net foreign exchange differences	1,955	-6,490
– Net write-offs and allowances for inventories	9,808	14,194
– Net impairments and write-offs of receivables	-3,960	1,548
– Investment income	-61,729	-12,990
– Investment expenses	6,232	-60
– Income on financing activities	-1	0
– Interest expense and other financial expenses	7,339	2,830
– Income tax expense	34,568	64,043
Operating profit before changes in net current assets	368,932	493,506
Change in trade receivables	-103,777	70,231
Change in inventories	-30,722	-112,849
Change in trade payables	-14,391	7,501
Change in provisions	1,871	-3,289
Change in deferred income	-450	-730
Change in other current liabilities	17,776	-4,386
Income tax paid	-83,840	-42,251
Net cash flow from operating activities	155,399	407,733
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received	7,502	1,656
Dividends received	798	631
Proportionate profit of subsidiaries	29,890	0
Proceeds from sale of property, plant and equipment	1,380	2,971
Purchase of property, plant and equipment	-109,515	-61,771
Purchase of intangible assets	-8,875	-6,570
Acquisition of subsidiaries and a share of non-controlling interests net of financial	-2,001	-9,319
assets acquired
Refunds of subsequent contributions to subsidiaries	500	0
Proceeds from non-current loans	8,372	5,726
Payments for non-current loans	-1,288	-31,708
Net payments for/proceeds from current loans	-50,984	190,432
Proceeds from sale of non-current investments	33,333	4,941
Payments for acquiring non-current investments	-22	-32,946
Proceeds from sale of current investments	359,100	153,804
Payments for acquiring current investments	-568,607	-121,621
Proceeds from derivatives	4,277	8,847
Payments for derivatives	-389	0
Net cash flow from investing activities	-296,529	105,073
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid	-3,022	-1,856
Net proceeds from/payments for current borrowings	34,290	-1,758
Lease liabilities paid	-1,125	-1,124
Dividends and other profit shares paid	-204,379	-175,044
Repurchase of treasury shares	-13,923	-10,025
Net cash flow from financing activities	-188,159	-189,807
Net decrease/increase in cash and cash equivalents Cash and cash equivalents at beginning of year	-329,289 470,297	322,999 144,981
Effect of movements in exchange rates on cash held	-15	2,317
Closing balance of cash and cash equivalents	140,993	470,297

Unaudited statement of cash flows of Krka, d. d., Novo mesto