Quarterly Report • Nov 22, 2018
Quarterly Report
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Novo mesto, November 2018
| Introduction | 3 |
|---|---|
| Business Performance Highlights for the Period from January to September 2018 | 3 |
| Financial Highlights of the Krka Group and the Krka, d. d. |
4 |
| Information on the Controlling Company | 5 |
| ID Card of the Krka Group |
5 |
| Profile of the Krka Group | 6 |
| Krka Group Development Strategy |
7 |
| Business Report |
10 |
| Financial Risk | 10 |
| Investor and Share Information | 11 |
| Business Operations Analysis | 14 |
| Marketing and Sales |
16 |
| Research and Development | 28 |
| Investments | 32 |
| Employees |
33 |
| Condensed Consolidated Financial Statements of the Krka Group with Notes | 35 |
| Consolidated Statement of Financial Position of the Krka Group | 35 |
| Consolidated Income Statement of the Krka Group | 36 |
| Consolidated Statement of Other Comprehensive Income of the Krka Group | 37 |
| Consolidated Statement of Changes in Equity of the Krka Group |
38 |
| Consolidated Statement of Cash Flows of the Krka Group | 40 |
| Segment Reporting of the Krka Group | 41 |
| Notes to the Consolidated Financial Statements of the Krka Group |
42 |
| Condensed financial statements of Krka, d. d., Novo mesto, with notes |
49 |
| Statement of Financial Position of Krka, d. d., Novo mesto |
49 |
| Income Statement of Krka, d. d., Novo mesto |
50 |
| Statement of Other Comprehensive Income of Krka, d. d., Novo mesto |
50 |
| Statement of Changes in Equity of Krka, d. d., Novo mesto |
51 |
| Statement of Cash Flows of Krka, d. d., Novo mesto | 53 |
| Segment Reporting of Krka, d. d., Novo mesto | 54 |
| Notes to the Financial Statements of Krka, d. d., Novo mesto | 55 |
| Statement of Compliance |
62 |
The condensed financial statements of the Krka Group and the condensed financial statements of Krka, d. d., Novo mesto (the Company) for the periods January–September 2018 and 2017 are unaudited, while the financial statements for the full 2017 business year are audited. Krka, d. d., Novo mesto has no authorised capital and has not made any conditional share capital increase.
The Company promptly announces all significant changes of the data in its listing prospectus in the Ljubljana Stock Exchange electronic information dissemination system (SEOnet), in the Polish Financial Supervision Authority electronic information dissemination system (ESPI), and/or in the Delo daily newspaper. Reports on the performance of the Krka Group and Krka, d. d. are available on the Krka website www.krka.si.
At its regular meeting of 21 November 2018, the Company's supervisory board discussed the unaudited report of the Krka Group and the Company for the period from January to September 2018.
period last year, while the Company generated net profit in total of €119.9 million.
| Krka Group | Krka Company | ||||
|---|---|---|---|---|---|
| In € thousand | Jan–Sept 2018 |
Jan–Sept 2017 |
Jan–Sept 2018 |
Jan–Sept 2017 |
|
| Revenues | 971,920 | 928,251 | 916,007 | 887,422 | |
| Operating profit (EBIT)1 | 163,821 | 149,223 | 154,136 | 143,591 | |
| EBITDA | 246,434 | 228,957 | 216,071 | 203,956 | |
| Net profit | 120,761 | 110,051 | 119,894 | 106,336 | |
| R&D expenses | 97,719 | 92,877 | 102,502 | 96,377 | |
| Investments | 65,959 | 75,241 | 51,956 | 61,983 | |
| 30 Sept 2018 | 31 Dec 2017 | 30 Sept 2018 | 31 Dec 2017 | ||
| Non-current assets | 1,010,170 | 1,033,008 | 1,027,795 | 1,032,595 | |
| Current assets | 901,687 | 886,123 | 824,682 | 804,887 | |
| Equity | 1,497,644 | 1,487,699 | 1,513,700 | 1,493,325 | |
| Non-current liabilities | 122,147 | 121,182 | 89,516 | 87,911 | |
| Current liabilities | 292,066 | 310,250 | 249,261 | 256,246 | |
| RATIOS | Jan–Sep 2018 |
Jan–Sept 2017 |
Jan–Sept 2018 |
Jan–Sept 2017 |
|
| EBIT margin | 16.9% | 16.1% | 16.8% | 16.2% | |
| EBITDA margin | 25.4% | 24.7% | 23.6% | 23.0% | |
| Net profit margin | 12.4% | 11.9% | 13.1% | 12.0% | |
| Return on equity (ROE)2 | 10.8% | 10.1% | 10.6% | 9.8% | |
| Return on assets (ROA)3 | 8.4% | 7.7% | 8.7% | 7.8% | |
| Liabilities/Equity | 0.277 | 0.299 | 0.224 | 0.244 | |
| R&D expenses/Revenues | 10.1% | 10.0% | 11.2% | 10.9% | |
| NUMBER OF EMPLOYEES | 30 Sept 2018 | 31 Dec 2017 | 30 Sept 2018 | 31 Dec 2017 | |
| Balance as at | 11,226 | 10,832 | 5,317 | 5,020 | |
| SHARE INFORMATION | Jan–Sept 2018 | Jan–Sept 2017 | |||
| Total number of shares issued | 32,793,448 | 32,793,448 | |||
| Earnings per share (EPS) in €4 | 5.03 | 4.55 | |||
| Closing price at end of period in €5 | 55.00 | 55.20 | |||
| Price/Earnings ratio (P/E) | 10.93 | 12.13 | |||
| Book value in €6 | 45.67 | 44.21 | |||
| Price/Book value (P/B) | 1.20 | 1.25 | |||
| Market capitalisation in € thousand (end of period) | 1,803,640 | 1,810,198 |
1 The difference between operating income and expenses
2 Net profit, annualised/Average shareholders' equity in the period
3 Net profit, annualised/Average total assets in the period
4 Net profit attributable to equity holders of the Krka Group, annualised/Average number of shares issued in the period exclusive of treasury shares
5 Share price on the Ljubljana Stock Exchange
6 Equity at the end of the period/Total shares issued
The controlling company in the Krka Group is Krka, tovarna zdravil, d. d., Novo mesto (Krka, d. d. or the Company).
Registered office Šmarješka cesta 6, 8501 Novo mesto, Slovenia Telephone +386 (0) 7 331 21 11 Fax +386 (0) 7 332 15 37 E-mail [email protected] Website www.krka.si Core business Production of pharmaceutical preparations Business classification code 21.200 Year established 1954 Registration entry 1/00097/00, Okrožno sodišče Novo mesto (District Court in Novo mesto) Tax number 82646716 VAT number SI82646716 Company ID number 5043611 Share capital €54,732,264.71 Total number of shares issued 32,793,448 ordinary registered no-par value shares, KRKG trading code. Krka has been listed on the Ljubljana Stock Exchange under KRKG trading code since 1997, and since April 2012
The Krka Group consists of the controlling company, Krka, d. d., Novo mesto, two subsidiaries in Slovenia, i.e. Terme Krka, d. o. o., Novo mesto and Farma GRS, d. o. o., and 29 subsidiaries outside Slovenia. The controlling company, Krka, d. d., Novo mesto, holds 100% ownership interests in all subsidiaries, except in Ningbo Krka Menovo (60%), Farma GRS (99.7%) and Krka Belgium (95%) – the remaining 5% in the latter is held by the subsidiary Krka France.
additionally on the Warsaw Stock Exchange under KRK trading code.
The Krka Group engages in development, production, marketing and sales of medicines for human use (prescription pharmaceuticals and nonprescription products), animal health products, and health resort and tourist services.
Production takes place in the controlling company in Slovenia and in Krka subsidiaries in the Russian Federation, Poland, Croatia, and Germany. In addition to production, these subsidiaries, apart from Krka-Rus in the Russian Federation, deal with marketing and sales. Other subsidiaries outside Slovenia deal with marketing and/or sales of Krka products, but do not have production capacities.
Terme Krka, d. o. o., Novo mesto deals with health resort and tourist services; and comprises the following branches: Terme Dolenjske Toplice, Terme Šmarješke Toplice, Hoteli Otočec, and Talaso Strunjan. Terme Krka is also the majority owner of Golf Grad Otočec, d. o. o.
Farma GRS, d. o. o. was established in partnership with companies from pharmaceutical and process manufacturing industries. The company develops new pharmaceutical products, new technological products for pharmaceutical production and contributes to more efficient pharmaceutical production in terms of energy, environment, and business operations. Farma GRS is the sole owner of six micro companies: GRS TEHFARMA, d. o. o., GRS VIZFARMA, d. o. o., GRS PREK FARMA, d. o. o., GRS EKO FARMA, d. o. o., GRS TREN FARMA, d. o. o., and GRS VRED FARMA, d. o. o.
The EU project: research and development company
The Krka Group updates its development strategy every two years. In November 2017, the Management Board of Krka adopted the 2018–2022 development strategy for the Krka Group, and presented it to the Supervisory Board.
The achievement of strategic objectives is measured at three levels: i) the Krka Group, ii) product and service groups, and iii) business functions. The Group's performance criteria are
monitored by the Management Board, while criteria at the levels of product and service groups and business functions are monitored by the relevant committees. The guiding principle in managing the system of criteria is to increase the competitiveness of the Krka Group as a whole and also of individual companies within the Group.
The key Krka Group objectives and strategies until 2022 are set out below.
subsidiaries and by marketing products under our own brands (Krka and TAD Pharma).
medicines, antidiabetics, antivirals, and antibiotics) while entering new therapeutic areas. We intend to introduce innovative products in key therapeutic areas (innovative single pill combinations of two or three substances, new strengths, pharmaceutical dosage forms, and new delivery systems).
To invest in production, development and infrastructure facilities in a stable and optimal manner.
To reduce the impact of financial risks on the operations of the Krka Group.
South-East Europe, Slovenia and Overseas Markets are expected to follow.
The Krka Group operates in diverse international environments and is exposed to foreign exchange risks in certain markets.
Currency exposure arises from an excess of assets over liabilities in a particular currency in the financial position statement of the Group, and from differences between operating income and expenses generated in various currencies.
Krka has not applied any changes to managing foreign currency risk in the third quarter. The key policy of the Krka Group remains to mitigate foreign currency exposure primarily by natural hedging. We also use derivative financial instruments; however, only to a limited extent.
The key currency exposure of the Krka Group arises from exposure to the Russian rouble. Krka intends to continue its policy of partial hedging against the rouble-related risk also in 2018.
In the first nine months, the value of the Russian rouble was unstable. From the beginning of 2018 to the end of the third quarter, the value of the rouble
In the first nine months of 2018, the Krka Group was not exposed to changes in reference interest rates,
The key credit risk of the Krka Group is related to receivables payable by buyers. This means that clients might fail to settle them by maturity dates.
The Krka Group has introduced a centralised credit control process for all clients to whom Krka sells products and services in total exceeding €100,000 annually. At the end of the third quarter of 2018, trade receivables included in the credit control process accounted for more than 90% of total receivables, and involved more than 400 clients.
The Krka Group recorded a low value of receivable write-offs and impairments also because credit expressed in the euro declined by 8.9%. We generated net foreign exchange losses due to exposure to the Russian rouble, recorded in the net financial result of the Group. In global currency markets, foreign currencies of the developing markets were under pressure and additional economic sanctions on Russia were introduced by the Western European countries in 2018, which all negatively impacted the value of the Russian rouble. The Brent oil price rose by 24% from the beginning of 2018 to the end of the third quarter and had no significant impact on the value of the rouble. The value of the Russian rouble was also impacted by constant interventions of the Russian monetary authorities aiming to neutralise the impact of oil price fluctuations and the impact of rouble value fluctuations on the Russian economy and consumption.
In consideration of net foreign exchange gains or losses, net proceeds or expenses relating to derivative financial instruments, interest rate gains or losses and other financial revenues and expenses, net financial result totalled -€20.8 million in the first three quarters of 2018.
because the Group had no non-current loans.
control is effective, receivables are dispersed across a large number of clients and sales markets, and the majority of outstanding receivables are payable by clients with whom Krka has been doing business for years.
Our credit risk management policy remained unchanged in the first nine months of 2018. We especially closely monitored and adequately insured trade receivables from clients in the markets with less favourable macroeconomic environment and markets in which we detected increased risks relating to distribution of medicines.
At the end of September 2018, more than 60% of trade receivables were insured with a credit insurance company, and only a small portion of trade receivables was secured with banking instruments.
At the end of the third quarter of the year, the total value of trade receivables in euros was lower than at the beginning of the year.
In the first nine months of 2018, risks related to the Krka Group's liquidity were managed by effective short-term cash flow planning. Short-term liquidity was ensured through a stable cash flow, by preagreed short-term borrowings from banks, and the daily, rolling weekly, monthly and longer-term planning and monitoring of cash inflows and outflows. While optimising the amounts of cash on The maturity structure of receivables remained stable. The percentage of overdue receivables relative to total trade receivables remained low also at the end of the third quarter.
their bank accounts, subsidiaries were regularly provided with the required funds.
Liquidity risk is estimated to be low. The scope of current borrowings in the reported period was small. A part of cash surpluses was placed into short-term bank deposits and used for dividend payout in the second half of July 2018. All our liabilities in the period were settled regularly and on time.
In the first nine months of 2018, no changes were made in relation to Krka Group insurance policies. No important damages to property or damages arising from the liability insurance were reported in the period. The increase in fire insurance premium, which is regarded as the most important type of insurance, lagged behind the increase in property value. The insurance premium for other types of insurance is also estimated to be lower than in the previous year.
In the first nine months of 2018, three insurance inspections were conducted in the Krka Group; one in Poland, conducted by the Warta insurance company, and two in Slovenia. The first one in Slovenia was conducted at Krka's Ljutomer, Krško and Bršljin production sites by reinsurer Pozavarovalnica Sava, and the second one was conducted at Krka's central production site in Ločna, Novo mesto, by reinsurers Triglav RE, Munich RE, Swiss Re and SCOR. The purpose of these inspections was to assess the risks, evaluate maximum possible damages to property and in the event of a business interruption, and to review the implementation of recommendations from previous inspections related to reducing risks.
In the first nine months of 2018, the price of Krka's share on the Ljubljana Stock Exchange declined by 4%. In that period, the number of treasury shares recorded the largest increase, while the share of legal entities and funds increased only slightly. The share of individual Slovenian investors remains unchanged, while the share of international investors slightly dropped. At the end of September 2018, Krka had 50,747 shareholders.
| 30 September 2018 | 31 December 2017 | |
|---|---|---|
| Individual Slovenian investors | 39.2 | 39.2 |
| Slovenian Sovereign Holding (Slovenski državni holding) and the Republic of Slovenia |
16.2 | 16.2 |
| KAD fund and PPS | 11.0 | 11.0 |
| Slovenian companies and funds | 7.8 | 7.7 |
| International investors | 23.3 | 23.8 |
| Treasury shares | 2.5 | 2.1 |
| Total | 100.0 | 100.0 |
In the first nine months of 2018, Krka acquired 127,757 treasury shares totalling €7,375,281. As at 30 September 2018, Krka had 819,474 treasury shares accounting for 2.499% of share capital.
| Share of | ||||
|---|---|---|---|---|
| Number of | Equity | voting | ||
| Country | shares | share (%) | rights (%) | |
| Kapitalska družba, d. d. | Slovenia | 3,493,030 | 10.65 | 10.92 |
| Slovenski državni holding, d. d. | Slovenia | 2,949,876 | 9.00 | 9.23 |
| Republic of Slovenia | Slovenia | 2,365,126 | 7.21 | 7.40 |
| Splitska banka d. d. | Croatia | 1,648,727 | 5.03 | 5.16 |
| Addiko Bank d. d. | Croatia | 1,196,138 | 3.65 | 3.74 |
| Clearstream Banking SA | Luxembourg | 684,870 | 2.09 | 2.14 |
| KDPW – fiduciary account | Poland | 466,847 | 1.42 | 1.46 |
| Luka Koper d. d. | Slovenia | 433,970 | 1.32 | 1.36 |
| Unicredit Bank Austria AG | Austria | 433,134 | 1.32 | 1.35 |
| Zavarovalnica Triglav, d. d. | Slovenia | 388,300 | 1.18 | 1.21 |
| Total | 14,060,018 | 42.87 | 43.97 |
As at 30 September 2018, Krka's ten largest shareholders held 14,060,018 shares, or 42.87% of all issued shares.
As at 30 September 2018, Members of the Krka Management Board and Supervisory Board held a total of 39,170 shares, or 0.12% of all issued shares. Since the end of 2017, their shareholdings have not changed.
| Share of voting | |||
|---|---|---|---|
| Equity share | rights | ||
| Number of shares | (%) | (%) | |
| Members of the Management Board | |||
| Jože Colarič | 22,500 | 0.069 | 0.070 |
| David Bratož | 0 | 0 | 0 |
| Aleš Rotar | 13,915 | 0.042 | 0.043 |
| Vinko Zupančič | 120 | 0 | 0 |
| Milena Kastelic | 505 | 0.002 | 0.002 |
| Total Members of the Management Board | 37,040 | 0.113 | 0.115 |
| Members of the Supervisory Board | |||
| Jože Mermal | 0 | 0 | 0 |
| Hans-Helmut Fabry | 0 | 0 | 0 |
| Borut Jamnik | 0 | 0 | 0 |
| Julijana Kristl | 230 | 0.001 | 0.001 |
| Andrej Slapar | 0 | 0 | 0 |
| Boris Žnidarič | 0 | 0 | 0 |
| Tomaž Sever | 500 | 0.002 | 0.002 |
| Franc Šašek | 1,400 | 0.004 | 0.004 |
| Mateja Vrečer | 0 | 0 | 0 |
| Total Members of the Supervisory Board | 2,130 | 0.007 | 0.007 |
In the first nine months of 2018, Krka's share price on the Ljubljana Stock Exchange peaked in mid-May, when it traded at €59.80, and reached its low at the end of September. On 30 September 2018, Krka shares traded at €55.00 per share.
On 30 September 2018, Krka's market capitalisation on the Ljubljana Stock Exchange amounted to €1.8 billion. In that period, deals in Krka's share generated an average daily trading volume of €0.3 million. Since April 2012, Krka shares have been listed on the Warsaw Stock Exchange as well.
The business operations analysis includes data for the Krka Group and the Company, whereas the notes relate primarily to the Krka Group.
Compared to the same period last year, Krka's revenues at the Group level increased by 5%. The Company sold €916.0 million worth of prescription pharmaceuticals, non-prescription products and animal health products, while the Krka Group generated revenues in total of €971.9 million from sales of said products and health resort and tourist services. The Krka Group generated 93% of its sales revenues in markets outside Slovenia.
Taking into account other operating and financial income, the Krka Group generated total revenues in the amount of €983.7 million, and the Company €924.3 million.
Please see chapter 'Marketing and Sales' for a more detailed analysis of sales results by individual markets and groups of products and services.
Total Krka Group expenses amounted to €840.7 million, or 3% more than in the same period last year.
The Krka Group incurred operating expenses in total of €815.9 million, or 4% more than in the first nine months of last year, which included: €414.0 million for costs of goods sold; €245.7 million for selling and distribution expenses; €97.7 million for R&D expenses; and €58.4 million for general and administrative expenses.
Compared to the same period last year, the Krka Group recorded a 4% increase in costs of goods sold, accounting for 42.6% of revenues. Selling and distribution expenses increased by 3%, and accounted for 25.3% of revenues. R&D expenses are recognised as expenses for the period in full as the Group does not capitalise them. They increased by 5%, and accounted for 10.1% of revenues. General and administrative expenses remained at the same level as in the comparable period last year, and accounted for 6.0% of revenues.
The Krka Group's assets amounted to €1,911.9 million at the end of September 2018, remaining the same as at the end of 2017.
Non-current assets represented €52.8% of total assets, down by 1.0 of a percentage point from the beginning of the year. The largest item under noncurrent assets, which totalled €1,010.2 million, was property, plant and equipment, totalling €840.0 million. Their value dropped by 3% compared to the 2017 year end, and accounted for 43.9% of total Krka Group assets.
The Krka Group's equity increased by 1% compared to the end of 2017, to €1,497.6 million, and accounted for 78.3% of total equity and liabilities.
Amounting to €122.1 million, non-current liabilities accounted for 6.4% of the Krka Group's balance sheet total. At the end of the period, provisions amounted to €100.2 million (of that €94.6 million for provisions for post-employment benefits and other non-current employee benefits, €4.2 million for provisions for lawsuits, and €1.4 million for other The Krka Group recorded operating profit of €163.8 million, a 10% rise compared to the same period last year.
Profit before tax amounted to €143.0 million, or 11% more compared to the same period last year. Income tax totalled €22.2 million, and the effective tax rate was 15.5%.
The Krka Group recorded net profit in total of €120.8 million, a 10% increase compared to the same period of 2017.
Intangible assets amounted to €108.8 million, or 2% less compared to the 2017 year end.
Current assets increased by 2% in the first nine months of 2018, to €901.7 million. Inventories saw a 10% increase, reaching €341.0 million in this period. Receivables went down by 14% to €454.7 million, (of that trade receivables amounted to €426.0 million, or 15% less compared to the 2017 year end).
provisions), which is 2% more than at the end of 2017.
Current liabilities decreased by 6% compared to the end of 2017 and totalled €292.1 million, or 15.3% of the Krka Group's balance sheet total. Among current liabilities, trade payables amounted to €104.7 million, or 3% less compared to the 2017 year end, while other current liabilities decreased by 2% to €182.3 million.
All performance ratios improved compared to the same period last year.
The Krka Group net profit margin for the first nine months of 2018 was 12.4% (the Company 13.1%), its EBIT margin 16.9% (the Company 16.8%), and its EBITDA margin 25.4% (the Company 23.6%).
Annualised ROE at the level of the Krka Group was 10.8% (the Company 10.6%), with annualised ROA at 8.4% (the Company 8.7%).
In the first nine months of 2018, Krka Group sales amounted to €971.9 million, which is €43.7 million or 5% more compared to the same period last year. Sales in markets outside Slovenia reached €903.4 million and accounted for 93% of the Group sales total. In terms of quantity, we increased sales by 7% over the same period last year. In the same period, the Company generated €916.0 million from sales, a 3% increase.
Region East Europe contributed the most to sales of the Krka Group, i.e. €287.6 million, or 29.6% of the Krka Group sales total. Region Central Europe recorded the second highest sales, €239.6 million or 24.6% of the Krka Group sales total. The third largest area in terms of sales was Region West Europe, generating sales in the amount of €211.0 million, or 21.7% of the Krka Group sales total. Sales in Region South-East Europe totalled €132.3 million (13.6%) and in Overseas Markets €32.8 million (3.4%). Sales in Slovenia amounted to €68.6 million, or 7.1% of the Krka Group sales total.
| Krka Group | Krka Company | |||||||
|---|---|---|---|---|---|---|---|---|
| Jan–Sept 2018 |
Jan–Sept 2017 |
Index | Jan–Sept 2018 |
Jan–Sept 2017 |
Index | |||
| In € thousand | ||||||||
| Slovenia | 68,551 | 66,652 | 103 | 41,675 | 40,605 | 103 | ||
| South-East Europe | 132,287 | 116,258 | 114 | 131,134 | 116,343 | 113 | ||
| East Europe | 287,625 | 271,434 | 106 | 278,886 | 276,812 | 101 | ||
| Central Europe | 239,593 | 226,043 | 106 | 243,906 | 228,688 | 107 | ||
| West Europe | 211,036 | 217,720 | 97 | 190,255 | 197,446 | 96 | ||
| Overseas Markets | 32,828 | 30,144 | 109 | 30,151 | 27,528 | 110 | ||
| Total | 971,920 | 928,251 | 105 | 916,007 | 887,422 | 103 |
In Slovenia, one of Krka's key markets, sales of products and services amounted to €68.6 million. Sales of products totalled €38.8 million accounting for a 2% growth. Sales of prescription pharmaceuticals generated €29.0 million, the most significant proportion of the sales value. The sales of non-prescription products amounted to €8.0 million, and of animal health products to €1.8 million. In the domestic market, Krka retained the leading position among providers of pharmaceuticals with a 8.7% market share. The sales of health resort and tourist services reached €28.3 million, or 4% more than in the same period last year.
Marketing and sales activities focused on the bestselling products in the group of prescription pharmaceuticals, reaching sales comparable to the last year's figure for the same period. Our bestselling pharmaceuticals were Prenewel (perindopril/indapamide), Sorvasta (rosuvastatin), Nalgesin (naproxen), Nolpaza (pantoprazol) and Prenessa (perindopril). The key therapeutic group remained medicines for the treatment of cardiovascular disease with the leading brand names Prenessa (perindopril) including single-pill combinations Prenewel (perindopril/indapamide), Amlessa (perindopril/amlodipine) and Amlewel (perindopril/amlodipine/indapamide). In terms of sales, Sorvasta (rosuvastatin) is the leading pharmaceutical for lowering cholesterol, and we also increased brand awareness of the newly launched Ravalsya (rosuvastatin/valsartan). Apart from the already established leading brand names Nolpaza (pantoprazol) and Emozul (esomeprazole) from the group of pharmaceuticals for alimentary and metabolic diseases, our marketing and sales activities also focused on Bismuth oxide Krka (bismuth). From our range of medicines for the treatment of diseases of the central nervous system, substantial focus was given to the launch of the antipsychotic Parnido (paliperidone) and to the already established Kventiax (quetiapine). We focused on strengthening brand awareness of Dulsevia (duloxetine) from our range of antidepressants, and Memaxa (memantine) and Yasnal (donepezil) from our range of anti-dementia medicines. We also focused on strengthening brand awareness of analgesics, especially Doreta (tramadol/paracetamol), Nalgesin Forte (naproxen), and Roticox (etoricoxib).
In comparison to the same period last year, nonprescription products recorded a 19% sales growth. Our key medicines were: Nalgesin S (naproxen), Septolete brand products, Magnezij Krka 300 (magnesium) and Daleron (paracetamol). Besides the already established brand names, Flebaven (diosmin) 500 mg and 1000 mg tablets, launched at the beginning of the year as the first medicine from our new therapeutic area for chronic venous insufficiency treatment, further remained in the field of our marketing endeavour.
Animal health products recorded a 5% growth in sales. Sales of Krka's animal health products were driven by Amatib (amoxicillin), Fypryst Combo (fipronil/S-methoprene), Enroxil (enrofloxacin) and Grovit. Marketing and sales activities focused mostly on increasing awareness of the From ears to tail brand name, including Ataxxa (permethrin/imidacloprid), Fypryst Combo
Region South-East Europe recorded a 14% or €16.0 million growth in sales in the first nine months of 2018 compared to the same period in 2017, and is currently Krka's fastest growing region. The region's key markets were Romania and Croatia, which contributed most to the region's total sales of €132.3 million. The highest growth in terms of value was recorded in Serbia and Bulgaria. All regional markets recorded sales growth, except Albania.
Romania remains Krka's key and leading market in the region with a recorded growth of 6% and sales amounting to €39.6 million. Prescription pharmaceuticals contributed most to its total sales placing Krka first among primarily foreign suppliers of generic medicines in this market. Sales of Krka's prescription pharmaceuticals were driven by: Atoris (atorvastatin), Co-Prenessa (perindopril/ indapamide), Karbis (candesartan), Roswera (rosuvastatin), Doreta (tramadol/paracetamol), Ciprinol (ciprofloxacin) and Oprymea (pramipexole). Bilobil (ginkgo leaf extract) remains our top-ranking non-prescription product, and we paid special attention to marketing flu and cold products, primarily Septolete Omni (benzydamine/ cetylpyridinium), Herbion brand products, and our pain-relieving medicine, Nalgesin (naproxen). Among animal health products, our most successful products in terms of sales were those for protection of companion animals against parasites, including Fypryst (fipronil), Ataxxa (permethrin/imidacloprid), and Milprazon (milbemycin oxime/praziquantel).
Croatia is Krka's key market with recorded second highest sales in the region. We generated sales in the amount of €25.4 million there, recorded a 10% growth, and ranked fourth among the suppliers of generic medicines, and second among the suppliers of animal health products on this market. All product groups contributed to the growth, but prescription pharmaceuticals most significantly again. Our bestselling prescription pharmaceuticals in this market were: Atoris (atorvastatin), Co-Perineva (perindopril/indapamide), Helex (alprazolam), (fipronil/S-methoprene), Milprazon (milbemycin oxime/praziquantel), Dehinel Plus (febantel/praziquantel/pyrantel embonate) and Dehinel (praziquantel/pyrantel embonate). Our portfolio of animal health products was supplemented with a new antiparasitic Santiola (clozantel).
Emanera (esomeprazole), Roswera (rosuvastatin) and Valsacombi (valsartan/hydrochlorothiazide), followed by Doreta (tramadol/paracetamol) and Dalneva (perindopril/amlodipine). Our top ranking non-prescription products in this market were: Nalgesin (naproxen), products of the Septolete brand, and Fypryst (fipronil) and Enroxil (enrofloxacin) among animal health products.
In Serbia, we recorded a 36% sales growth and all three product groups contributed to it generating €16.7 million. Prescription pharmaceuticals, however, remained most important, among them: Nolpaza (pantoprazole), Roxera (rosuvastatin), Atoris (atorvastatin), Valsacor (valsartan), Ampril (ramipril), and Co-Amlessa (perindopril/amlodipine/ indapamide). The leading non-prescription products in terms of sales were: Bilobil (ginkgo leaf extract) and Nalgesin (naproxen). Among animal health products, Fypryst (fipronil) and Enroxil (enrofloxacin) recorded strongest sales.
In Macedonia, we recorded an 11% increase in sales, which amounted to €15.1 million. We ranked first among foreign suppliers of medicines in this market. Prescription pharmaceuticals were the main driver of sales, among them: Enap (enalapril), Roswera (rosuvastatin), Tanyz (tamsulosin), Atoris (atorvastatin), Nolpaza (pantoprazole), Helex (alprazolam) and Lorista (losartan). The leading non-prescription products in terms of sales were: Septanazal (xylometazoline/dexpanthenol), Bilobil (ginkgo leaf extract), and Daleron (paracetamol). Among animal health products, our top-selling products were Fypryst (fipronil) and Enroxil (enrofloxacin).
Sales in Bosnia and Herzegovina amounted to €13.8 million and presented a 19% increase, ranking us first among foreign suppliers of medicines in this market. As expected, prescription pharmaceuticals contributed most to sales, which were driven by: Enap H/HL (enalapril/ hydrochlorothiazide), Roswera (rosuvastatin), Enap
(enalapril), Atoris (atorvastatin) and Lexaurin (bromazepam). Our best-selling non-prescription products were: Nalgesin (naproxen), B-complex and Bilobil (ginkgo leaf extract), and Fypryst (fipronil) and Rycarfa (carprofen) among animal health products.
Due to our successful promotional activities, sales in Bulgaria went up by 37% compared to the same period in 2017, totalling €13.1 million. Prescription pharmaceuticals accounted for the largest proportion of sales, above all Co-Valsacor (valsartan/hydrochlorothiazide), Roswera (rosuvastatin), Valsacor (valsartan), and Emanera (esomeprazole). Our non-prescription products also presented strong sales.
In Kosovo, we recorded a growth of 6% and sales total of €4.7 million. Our best-selling prescription pharmaceuticals were Lorista H (losartan/ hydrochlorothiazide) and Enap H and Enap HL (enalapril/hydrochlorothiazide). Sales of non-
Region East Europe is composed of several Eastern European and Central Asian markets. The leading market is the Russian Federation. Sales totalled €287.6 million, which is 6% or €16.2 million more than last year. Region East Europe remains Krka's leading sales region. As expected, prescription pharmaceuticals accounted for the largest proportion of sales.
The Russian Federation remained Krka's largest individual market and also a key one. Sales value totalled €189.3 million, a 2% advance in euros or 16% more in the Russian rouble, and sales volume increased by 18%. According to available data, our growth surpassed that of the Russian pharmaceutical market, so we strengthened our market share. Krka also remained a leading supplier of medicines for cardiovascular diseases in the Russian Federation.
Prescription pharmaceuticals again accounted for the largest proportion of sales, in particular the following: Lorista (losartan), Atoris (atorvastatin) Lorista H and Lorista HD (losartan/ hydrochlorothiazide), Nolpaza (pantoprazole), Valsacor (valsartan), Roxera (rosuvastatin), Perineva (perindopril), and Co-Perineva (perindopril/indapamide), followed by Zyllt (clopidogrel), Vamloset (valsartan/amlodipine), prescription products were driven by Daleron (paracetamol) and the Septolete brand products.
The sales in Albania totalled €2.6 million, or 20% less compared to the same period last year. The decrease was caused by the reduction of prices of medicines in the market and market conditions after the new reimbursement list was published. Sales of pharmaceuticals were driven by Atoris (atorvastatin), Ultop (omeprazole), and Lorista (losartan). Sales of non-prescription products were driven by Daleron (paracetamol) and the Pikovit brand products.
In Montenegro, our smallest regional market, we sold €1.3 million worth of products, exceeding the sales in the same period last year by 22%. Overall growth was driven chiefly by strong sales of prescription pharmaceuticals, among them Nolpaza (pantoprazole), Lorista H and Lorista HD (losartan/ hydrochlorothiazide), Atoris (atorvastatin) and Roswera (rosuvastatin). Non-prescription products also recorded strong sales.
Enap (enalapril), Enap H and Enap HL (enalapril/hydrochlorothiazide). New pharmaceuticals, such as Co-Dalneva (perindopril/ amlodipine/indapamide), Dilaxa (celecoxib), and Telmista (telmisartan) also presented quick growth.
Sales of non-prescription products were up 2%. Our sales drivers were Septolete Total (benzydamine chloride/cetylpyridinium chloride) and Herbion cough syrup (plantain extract). Flebaven (diosmin/hesperidin), Panatus (butamirate), Ulcavis (bismuth) and Magnesol were launched in the last three years, and all presented strong sales. Sales of our animal health products were lower this year compared to the same period in 2017 due to a drop in medicines for farm animals. Enroxil (enrofloxacin) was the leading pharmaceutical in terms of sales.
In the Russian Federation, we kept increasing the share of sold medicines manufactured by the Krka Rus plant. It amounted to two thirds.
In Ukraine, which also remained one of Krka's key markets, pharmaceutical market recorded growth last year and the trend continues also this year. Krka maintained the position of the leading foreign supplier of generic medicines there, and generated sales worth €38.2 million, a 22% growth. Prescription pharmaceuticals accounted for the
leading proportion in total sales, and presented a 21% sales growth. Key prescription pharmaceuticals included Co-Prenessa (perindopril/indapamide), Nolpaza (pantoprazole), Dexamethason (dexamethasone), and Atoris (atorvastatin). Sales of non-prescription products recorded a 28% increase, and animal health products a 2% decrease compared to the same period in 2017.
In East Europe B, which includes Belarus, Mongolia, Armenia, and Azerbaijan, sales of our products generated €21.5 million, a 23% increase compared to the same period in 2017. A two-digit growth was recorded in all four markets.
In Belarus, sales increased by 23% compared to the same period last year, and amounted to €8.6 million. We retained third place among foreign suppliers of generic medicines. Prescription pharmaceuticals constituted the largest part of total sales, in particular Nolpaza (pantoprazole), Lorista H and Lorista HD (losartan/ hydrochlorothiazide) and Co-Amlessa (perindopril/ amlodipine/indapamide). Among non-prescription products, sales were driven by products of the Septolete and Duovit brands. We should also mention strong sales of the newly launched Septanazal (xylometazoline/dexpanthenol).
In Mongolia, our product sales generated €6.6 million, and growth reached 34%. We retained the position of the leading foreign supplier of medicines in the market. Due to an unstable economic environment, the importance of medicines included in the reimbursement list and sold through various tenders is strengthening. The rise was particularly notable in sales of prescription pharmaceuticals Valsacor (valsartan), Amlessa (perindopril/amlodipine), and Nolpaza (pantoprazole), and non-prescription products Septanazal (xylometazoline/dexpanthenol) and Nalgesin (naproxen). We also launched several new products: Emanera (esomeprazole), Niperten (bisoprolol), Valodip (amlodipine/valsartan) and Septolete Total (benzydamine/cetylpyridinium) with lemon and elder flavour.
Sales in Azerbaijan amounted to €3.7 million, 11% more than in the same period last year. Prescription pharmaceuticals accounted for the major part in sales in terms of value recording an 11% growth, mainly due to sales of key medicines: Amlessa (perindopril/amlodipine), Atoris (atorvastatin), Enap (enalapril), Lorista H and Lorista HD (losartan/ hydrochlorothiazide), and Co-Prenessa (perindopril/ indapamide). Sales of our non-prescription products remained at the same level as in the same period last year, and animal health products saw a 61% increase.
In Armenia, we sold €2.5 million worth of products and recorded a 21% growth Most of it was generated by sales of prescription pharmaceuticals, primarily Captopril (captopril), Nolpaza (pantoprazole), and Co-Amlessa (perindopril/ amlodipine/indapamide). Sales of non-prescription products were driven by the Herbion and Septolete brand products.
East Europe K comprises markets of Kazakhstan (leading), Moldova, and Kyrgyzstan. Our product sales generated €19.8 million, accounting for a 2% growth.
In Kazakhstan, product sales amounted to €11.8 million, down 1% over the same period last year. Sales recorded in the local currency through our subsidiary nevertheless exceeded 11%. Pharmaceuticals produced by domestic manufacturers have exclusive priority in tender sales, which caused a 4% drop in sales of our prescription pharmaceuticals. The following prescription products accounted for the largest proportion in sales: Enap (enalapril), Atoris (atorvastatin), Nolpaza (pantoprazole) and Valsacor (valsartan), followed by Valodip (amlodipine/valsartan), Roxera (rosuvastatin) and Lorista H and Lorista HD (losartan/ hydrochlorothiazide). The sales of non-prescription products accounted for a 3% growth, and the sales of animal health products for a 69% growth.
In Moldova, our product sales generated €5.8 million, and an 11% growth. Prescription pharmaceuticals contributed to sales total the most, 13% more than in the previous year. The bestsellers in this product group were Ampril (ramipril), Lorista (losartan), and Rawel (indapamide). Sales of non-prescription products increased by 2%, and were driven by Septolete and Herbion brand products, Septanazal (xylometazoline/ dexpanthenol), and products sold under Herbion and Septolete brands. Our animal health products recorded the largest growth, 62%.
In Kyrgyzstan, sales totalled €2.2 million, or 2% less than in the same period in 2017. We recorded a 24% growth in the leading group of prescription pharmaceuticals. Our top-sellers included Lorista (losartan), Atoris (atorvastatin), and Nolpaza (pantoprazole). Non-prescription products saw a significant drop compared to the same period last year.
East Europe U consists of Uzbekistan, Georgia, Tajikistan, and Turkmenistan. We generated €18.9 million by sales of our products there and recorded an 11% growth. While sales saw a rise in Uzbekistan, Georgia, and Tajikistan, they dropped in Turkmenistan.
In Uzbekistan, sales totalled €13.8 million, a 30% growth in terms of value. In terms of volume, we recorded a 35% growth. The increase was mostly driven by prescription pharmaceuticals Amlessa (perindopril/amlodipine), Lorista (losartan), and Nolpaza (pantoprazole). Our best-selling nonprescription products were the Pikovit and Septolete brand products. In the period, we successfully launched Bravadin (ivabradine), Flebaven (diosmin/hesperidin), Nalgesin Forte (naproxen), and Bilobil Intense (ginkgo leaf extract).
The sales dynamics of Region Central Europe, which includes the Visegrad Group countries and the Baltic states (Lithuania, Latvia and Estonia), remained the same as in the first six months, and the region recorded a 6% growth compared to the same period in 2017, totalling €13.6 million. Sales increased in all regional markets, except in Latvia. The key regional market, Poland, contributed the most to sales total of €239.6 million, and the second key market, the Czech Republic, presented a 14% growth.
Poland remained the key market and the largest market in the region, generating 4% more than in the same period last year. Sales totalled €112.8 million, and Krka ranked fourth among foreign suppliers of generic medicines, and sixth among all suppliers of generic pharmaceuticals. Prescription pharmaceuticals contributed most to sales total, in particular Atoris (atorvastatin), Roswera (rosuvastatin), Doreta (tramadol/ paracetamol), Valsacor (valsartan), Co-Valsacor In Georgia, we ranked second among foreign suppliers of generic medicines, and generated €3.0 million through sales of our products, or 14% more than in the same period last year. In the leading group of prescription pharmaceuticals, the most important contributors were Lorista H and Lorista HD (losartan/hydrochlorothiazide), Enap H and Enap HL (enalapril/hydrochlorothiazide) and Co-Amlessa (perindopril/amlodipine/indapamide). Products of the Herbion and Panzynorm brands drove sales of non-prescription products.
Sales in Tajikistan totalled €1.1 million, a 32% increase over the same period last year. We launched Co-Amlessa (perindopril/amlodipine/ indapamide), Lortenza (losartan/amlodipine) and Maruxa (memantine) there. The following medicines presented significant sales growth: Nolpaza (pantoprazole), and Herbion brand syrups from the group of non-prescription products.
In Turkmenistan, where securing timely payments for purchased goods by buyers remains a challenge due to difficulties in obtaining foreign currencies, prescription pharmaceuticals constituted the largest part of total sales with €1.0 million, in particular Nolpaza (pantoprazole) and Amlessa (perindopril/amlodipine). Sales of Krka's nonprescription products were driven by products of the Herbion and Bilobil brands.
(valsartan/hydrochlorothiazide) and Nolpaza (pantoprazole). Sales of Krka's non-prescription products were driven by the Septolete brand products and Bilobil (ginkgo leaf extract). Among animal health products, our top-selling products were Fypryst (fipronil) and Floron (florfenicol).
The Czech Republic, also one of Krka's key markets, was the fastest growing regional market, recording a 14% growth. Our sales totalled €37.9 million, so Krka ranked third among foreign suppliers of generic medicines in the market, and the Czech Republic ranked second among Krka's regional markets. Prescription pharmaceuticals contributed the most to sales, especially Atoris (atorvastatin), Lexaurin (bromazepam), and Asentra (sertraline). They were followed by Pragiola (pregabalin), Tonanda (perindopril/amlodipine/ indapamide), Sorvasta (rosuvastatin), Prenewel (perindopril/indapamide) and Doreta (tramadol/ paracetamol). Key non-prescription products included Nalgesin S (naproxen), the Septolete
brand products, and Bisacodyl-K (bisacodyl). Fypryst (fipronil) and Dehinel Plus (febantel/pyrantel embonate/praziquantel) drove sales of animal health products.
The third key regional market was Hungary. Sales amounted to €34.3 million, or 4% more compared to the same period last year. Krka held fifth place among suppliers of generic medicines in Hungary. Prescription pharmaceuticals again contributed most to our total sales, in particular Co-Prenessa (perindopril/indapamide), Atoris (atorvastatin), Roxera (rosuvastatin), Zyllt (clopidogrel), Co-Valsacor (valsartan/hydrochlorothiazide), Co-Dalnessa (perindopril/amlodipine/indapamide), Emozul (esomeprazole), and Valsacor (valsartan). Sales of non-prescription products were driven by Bilobil (ginkgo leaf extract), and of animal health products by Milprazon (milbemycin oxime/praziquantel) and Fypryst (fipronil).
In Slovakia, Krka's new key market, we generated €27.7 million by product sales, an 8% increase compared to the same period last year. Prescription pharmaceuticals were the main contributor, above all: Atoris (atorvastatin), Co-Prenessa (perindopril/indapamide), Nolpaza (pantoprazole), Prenessa (perindopril), Co-Amlessa (perindopril/amlodipine/indapamide), and Valsacor (valsartan). Among non-prescription products, Nalgesin led in terms of sales, and among animal health products Fypryst (fipronil) and Enroxil (enrofloxacin).
Lithuania, our largest Baltic market, has introduced changes to the system for determining prices of prescription pharmaceuticals in the reimbursement list, which impacted our business operations in the
We consider the whole Region West Europe as our key market. Our sales there totalled €211.0 million, or 3% less than in the same period last year. Germany remained our largest regional market, followed by markets of Scandinavia, Spain, France and Italy. Products marketed through Krka's subsidiaries under our own brand names accounted for the major part of sales total, a 6% increase, and a 70% share in total regional sales. Sales through unrelated parties decreased by 19% in comparison to the same period last year.
Sales of prescription pharmaceuticals, primarily those containing esomeprazole and clopidogrel,
period. In spite of this, Krka ranked third among the suppliers of generic medicines in the Lithuanian market. We recorded a 3% growth and generated sales total of €12.2 million. Sales were driven by prescription pharmaceuticals, above all Valsacor (valsartan), Atoris (atorvastatin), Nolpaza (pantoprazole), Valsacombi (valsartan/ hydrochlorothiazide), Prenewel (perindopril/ indapamide), and Co-Amlessa (perindopril/ amlodipine/indapamide). Sales were driven by products of the Septolete brand and Nalgesin (naproxen) among non-prescription products, and Enroxil (enrofloxacin) and Fypryst (fipronil) among animal health products.
In Latvia we generated €9.2 million by product sales, or 1% less compared to the same period last year. Krka ranked second among the suppliers of generic medicines in Latvia. In terms of sales, prescription pharmaceuticals were most important, above all Atoris (atorvastatin), Nolpaza (pantoprazole), Sorvasta (rosuvastatin), Prenewel (perindopril/indapamide), and Co-Amlessa (perindopril/amlodipine/indapamide). Sales of nonprescription products were driven by the Septolete brand products and Daleron (paracetamol), and of animal health products by Milprazon (milbemycin oxime/praziquantel) and Fypryst (fipronil).
In Estonia, we generated €5.6 million, and recorded an 8% growth. The following prescription pharmaceuticals accounted for the largest share in sales: Co-Prenessa (perindopril/indapamide), Roswera (rosuvastatin), Atoris (atorvastatin), and Co-Dalnessa (perindopril/amlodipine/indapamide). Sales of non-prescription products were driven by products of the Septolete brand, and of animal health products by Fypryst (fipronil).
generated €187.8 million. Sales of animal health products reached €19.9 million and a 15% growth rate, and were driven by medicines containing milbemycin and praziquantel for internal parasite treatment and control which presented a 35% rise. Sales generated by non-prescription products reached €3.4 million, and recorded an 8% decrease over the same period last year.
In Germany, we generated €51.0 million by product sales, or 21 % less over the same period last year. The decrease resulted from the expiry of tender sales of pharmaceuticals for alimentary and metabolic diseases. Over 95% of sales in the
German market was generated through our subsidiary TAD Pharma. Sales were driven primarily by pharmaceuticals containing valsartan, candesartan, and pregabalin. The share of singlepill combinations, especially those containing ramipril and amlodipine, increased. In Germany, this placed us among the leading suppliers of single-pill combinations for the treatment of cardiovascular diseases.
In Scandinavia, sales grew by €8.3 million (39%), and totalled €29.5 million. The leading market in the region was Sweden, followed by Finland, Denmark, Norway and Iceland, where our sales exceeded €1 million for the first time. Sales through our subsidiary Krka Sverige increased by 30%, and sales through subsidiaries in the Scandinavian markets already exceeded a total of 90%. We almost doubled our sales through our subsidiary Krka Finland, which significantly contributed to Krka's 68% growth in the Finnish market. Sales were driven by medicines containing etoricoxib, candesartan, losartan, esomeprazole, clopidogrel, and duloxetine. In Norway, we retained our leading marketing position by many medicines, above all those containing esomeprazole, pantoprazole, and pramipexole.
In the litigation for alleged infringement of the EP 1 020 461 patent in Denmark commenced by AstraZeneca against Krka Sverige in 2013 and relating to the active substance esomeprazole, the Eastern High Court in Copenhagen, Denmark, found in mid-October that Krka Sverige had not infringed AstraZeneca's patent by selling the medicine in question in Denmark, and rejected its claim for damages.
In Spain, our product sales generated €28.1 million, and growth reached 13%. Our subsidiary, Krka Farmaceutica, was awarded tenders for medicine supplies to Andalusia, where we increased the share of our products sold under own brand names. Their share amounted to 85% of total Krka sales in the Spanish market. Sales were driven by medicines containing donepezil; a single-pill combination of tramadol and paracetamol; bisoprolol, quetiapine, and pramipexole.
In France, we generated €25.6 million by product sales, or 11% less over the same period last year. Sales through unrelated parties dropped, but still represented the largest part of our total sales in this market. However, we partly compensated for the drop by a 12% increase in sales of products marketed under Krka's own brands. Their share has already exceeded 20% of total Krka sales in France. Sales were driven by medicines containing milbemycin and praziquantel, esomeprazole, clopidogrel, and gliclazide.
In Italy, we recorded a 24% rise in sales, which amounted to €22.3 million. Sales were driven by prescription pharmaceuticals containing clopidogrel, esomeprazole, and pantoprazole. Sales through our subsidiary, Krka Farmaceutici Milano, increased by 37% and accounted for 64% of Krka's total sales in the market. Animal health products for external parasite control reached especially good sales results and more than tripled compared to the same period last year.
In Portugal, we recorded a 5% increase in sales, which amounted to €15.6 million. We more than compensated lower sales through unrelated parties with a 19% increase in sales of products marketed under Krka's own brands. The share of products sold through our subsidiary, Krka Farmacêutica, accounted for more than two thirds of Krka's total sales in this market. Sales were driven by medicines containing esomeprazole, olanzapine, and a singlepill combination of perindopril and indapamide. We should also mention the increase in sales of nonprescription products and animal health products. They already account for more than 10% of Krka Farmacêutica's total sales.
Sales in the United Kingdom totalled €12.7 million, which was more than one third less compared to the same period last year. Sales were driven by prescription pharmaceuticals, above all those containing perindopril, quetiapine, and clopidogrel. Our subsidiary, Krka UK, recorded a 76% growth and contributed 15% to total Krka sales in the market.
In Ireland, our product sales generated €7.6 million, and growth reached 9%. Sales though our subsidiary, Krka Pharma Dublin, increased by 10%, and accounted for 86% of total Krka sales in the market. We further remained the leading supplier of medicines containing pregabalin, duloxetine, and aripiprazole in the Irish market.
In Benelux, we sold €6.7 million worth of products. Sales through our subsidiary, Krka Belgium, increased by 52%, and contributed most to total growth of 14%. Sales though unrelated parties accounted for a 5% rise in sales.
In Austria, we recorded a 21% rise in sales, which amounted to €6.5 million. We generated over 90% of sales in the Austrian market through our subsidiary, Krka Pharma Wien.
Region Overseas Markets consist of three regional sales offices. Prescription pharmaceuticals, in most markets marketed under our own brands, accounted for the major part of sales in terms of value in all three offices. Sales totalled €32.8 million and accounted for a 9% growth, primarily due to successful performance in the markets of the Far East and Africa.
Due to complex security circumstances, business operations in the markets of the Middle East remained hindered. Additionally, sales were negatively impacted by the devaluation of certain local currencies. Sales amounted to €16.2 million, a 2% decrease compared to the same period last year. Our leading markets were Iran, Iraq, Lebanon and Yemen, and sales were driven by Asentra (sertraline), Nolpaza (pantoprazole), Valsacor (valsartan), Vizarsin (sildenafil), Letizen (cetirizine), and Yasnal (donepezil).
In the first nine months of 2018, human health medicines were the most important product group in the sales structure of the Krka Group, and accounted for 91.8% of overall sales in the period. Prescription pharmaceuticals constituted 82.8% of the Krka Group's total sales, followed by nonprescription products (9.0%), and animal health products (5.2%).
In other European countries, the majority of sales were made through unrelated parties, and sales amounted to €5.5 million.
In the markets of the Far East and Africa, we sold €15.8 million worth of products, reaching a growth of 23%. The leader in the region was Vietnam, followed by the Republic of South Africa, China, Malaysia and Ghana. Sales were driven by Lanzul (lansoprazole), Emanera (esomeprazole), Palprostes (fruit extract of dwarf fan palm), Tenox (amlodipine), Kamiren (doxazosin), and Coryol (carvedilol).
The smallest of the three regional offices is the one that operates in the Americas. The predominant part of the sales, totalling €0.8 million, which amounts to 16% more compared to the same period last year, was generated in the markets of Central America. Sales were driven by prescription pharmaceuticals, among them Valsacor (valsartan), Valsaden (valsartan/hydrochlorothiazide), Emanera (esomeprazole), Yasnal (donepezil), and Vizarsin (sildenafil).
All product and service groups recorded an increase in sales. In comparison to the same period last year, the sales of prescription pharmaceuticals increased by 5%, and non-prescription products by 4%.
Sales of health resort and tourist services constituted 2.9% of total Krka Group sales, a 4% increase over the last year.
| Krka Group | Krka Company | |||||||
|---|---|---|---|---|---|---|---|---|
| In € thousand | Jan–Sept 2018 |
Jan–Sept 2017 |
Index | Jan–Sept 2018 |
Jan–Sept 2017 |
Index | ||
| Human health medicines | 891,686 | 851,040 | 105 | 862,174 | 837,382 | 103 | ||
| – Prescription pharmaceuticals | 804,295 | 768,190 | 105 | 781,774 | 762,591 | 103 | ||
| – Non-prescription products | 87,391 | 82,850 | 105 | 80,400 | 74,791 | 107 | ||
| Animal health products | 50,441 | 48,380 | 104 | 50,920 | 47,258 | 108 | ||
| Health resorts and tourist services | 28,294 | 27,159 | 104 | |||||
| Other | 1,499 | 1,672 | 90 | 2,913 | 2,782 | 105 | ||
| Total | 971,920 | 928,251 | 105 | 916,007 | 887,422 | 103 |
The Krka Group sold €804.3 million worth of prescription pharmaceuticals in the reported period, or 5% more compared to the same period last year. The following regions saw an increase in sales: South-East Europe (15%), Overseas Markets (12%), East Europe (7%), and Central Europe (6%).
Among the largest Krka's markets, sales went up the most in Poland (6%) and in the Russian Federation (3%). Compared to the same 2017 period, the sales of prescription pharmaceuticals in other major markets increased by: 33% in the Scandinavian countries, 21% in Ukraine, 20% in Italy, 14% in the Czech Republic, 9% in Croatia, 8% in Spain, 7% in Slovakia, and 6% in Romania.
The medium-sized markets recorded sales increases as follows: 42% in Bulgaria, 38% in Serbia, 31% in Uzbekistan; 22% in Bosnia and Herzegovina; and 10% in Macedonia.
Among the small markets, sales of prescription pharmaceuticals recorded the steepest growth in Finland, 75%, followed by 38% in Mongolia, 33% in Tajikistan, 28% in Belarus, 24% in Kyrgyzstan, 23% in Georgia, 23% in Armenia, 22% in Austria and 22% in Montenegro.
In the markets of Western Europe, we have been strengthening our position through our subsidiaries. They have recorded significant growth rates, the highest in Finland and Belgium, where sales more than doubled. Elsewhere, growth rates were as follows: Italy 34%, Sweden 30%, Austria 23%, and Portugal 10%.
The ten leading prescription pharmaceuticals in terms of sales included medicines containing perindopril (Prenessa*, Co-Prenessa*, Amlessa*, Co-Amlessa*), valsartan (Valsacor, Valsacombi*, Vamloset*, Co-Vamloset*, Valarox*), losartan (Lorista*, Lorista H*, Tenloris*), atorvastatin (Atoris, Atordapin*), pantoprazole (Nolpaza*), rosuvastatin (Roswera*, Rosudapin*), esomeprazole (Emanera*), enalapril (Enap, Enap H*, Elernap*), clopidogrel (Zyllt*), and tramadol (Doreta*, Tadol*).
Compared to the same period last year, Krka recorded the highest absolute sales growth with Valsacor (valsartan), Co-Valsacor* (valsartan/hydrochlorothiazide), Roswera* (rosuvastatin), Co-Amlessa (perindopril/amlodipine/ indapamide), Co-Prenessa* (perindopril/ indapamide), Ezoleta* (ezetimibe), Atoris (atorvastatin), Prenessa* (perindopril), Roticox* (etoricoxib), and Dexamethason Krka.
In the first nine months of 2018, we launched the following completely new medicines:
available in the Russian Federation. With this medicine, we expanded our range of medicines for the treatment of hypertension;
In addition to these, we also launched several existing medicines on new markets:
The sales value of non-prescription products totalled €87.4 million, or 5% more than in the same period last year.
Sales increased in the following regions: Slovenia (19%), South-East Europe (11%), East Europe (4%), and Central Europe (2%).
Region East Europe contributed more than 50% to total sales. Of that, majority was generated by the Russian Federation, where a 2% rise in sales was recorded. Other markets of the region also recorded growth. Among the large markets of this regions, increments were as follows: Ukraine 28%, Mongolia Portugal, Poland, the Czech Republic, Hungary, and Slovakia;
25%, Uzbekistan 24%, Belarus 6%, Kazakhstan 3%, and Moldova 2%.
Other large markets of the region also recorded growth rates as follows: Croatia 18%, Serbia 32%, Macedonia 11%; Bosnia and Herzegovina 6%, Romania 7%; the Czech Republic 35%; Slovakia 20%, Hungary 43%, and Portugal, where the growth almost tripled.
We recorded good sales with key brand products Septolete and Nalgesin* (naproxen), reaching twodigit growth. Our new products, Flebaven (diosmin/hesperidin) and Magnezij Krka 300, also generated good sales figures.
In the first nine months of 2018, sales of our animal health products amounted to €50.4 million, which is 4% more compared to the same period last year. Sales increased the most in Region West Europe (15%), and also in other regions: Slovenia (5%), South-East Europe (6%), and Central Europe (4%).
As regards our large markets, we recorded the most substantial sales growth in Benelux, Spain, and Italy, where it more than doubled. The following growths were recorded in our other large markets: 65% in the UK, 31% in Hungary, 13% in Croatia, 8% in the Czech Republic, and 5% in Slovenia.
In the first nine months of 2018, the Terme Krka Group generated €28.3 million in sales, or 4% more compared to the same period last year. The number of overnight stays was somewhat smaller compared to the same period of 2017, with domestic guests accounting for 70%. Among foreign guests, Italians accounted for almost 25% of overnight stays. The most substantial increase, 25%, was recorded in Our top-ranking animal health products in terms of sales were: Milprazon* (milbemycin oxime/ praziquantel), Fypryst* (fipronil), Enroxil* (enrofloxacin), Floron* (florfenicol), and Dehinel Plus* (febantel/pyrantel embonate/praziquantel). Sales were driven by Milprazon* and Fypryst*, while the above five animal health products accounted for more than 50% of the sales of total animal health products.
In 2018, we launched an antiparasitic for farm animals, Santiola* (clevamisol), and an antiparasitic for companion animals, Ataxxa* (imidacloprid/ permethrin).
overnight stays of Israeli guests, followed by guests from Switzerland, France, and the Netherlands.
Business units recoded sales increase as follows: Dolenjske Toplice 7%, Talaso Strunjan 3%, and Šmarješke Toplice 3%. Sales generated by Hoteli Otočec matched the sales levels of the same period last year.
* Products marketed under different brand names in individual markets are marked with an asterisk.
In the period from January to September 2018, we obtained marketing authorisations for sixteen (16) new products in 36 dosage forms and strengths.
Krka's key therapeutic area of medicines for the treatment of cardiovascular diseases was supplemented with new products. We obtained approvals under the European decentralised procedure in EU countries for Eliskardia (prasugrel) film-coated tablets in two strengths. Prasugrel inhibits platelet aggregation and formation of blood clots. Administered once daily, it is used in combination with acetylsalicylic acid for prevention of atherothrombotic events.
The registration procedure for Apleria/Enplerasa (eplerenone) film-coated tablets in two strengths has been completed. The medicine is used in combination with other medicines for the treatment of heart failure. The active ingredient is one of the new aldosterone receptor antagonists. The risk of adverse reactions is lower than with the older active ingredient, spironolactone.
We obtained marketing authorisations under the European decentralised procedure for Roxiper/Triemma (perindopril/indapamide/ rosuvastatin) film-coated tablets in four strengths. Perindopril, an angiotensin converting enzyme (ACE) inhibitor, and indapamide, a diuretic, control increased blood pressure, whereas rosuvastatin, a statin, lowers elevated cholesterol level. A new single-pill combination is intended for concomitant treatment of both indications. It provides an effective and safe treatment with three active substances combined in a single tablet.
(perindopril/amlodipine) tablets were supplemented with two new strengths, indicated for the initial treatment of hypertension. In Western European countries, we obtained marketing authorisations for these medicines under the decentralised procedure.
In the Russian Federation, Krka obtained first marketing authorisation for Co-Vamloset (valsartan/amlodipine/hydrochlorothiazide) filmcoated tablets in three strengths. The single-pill combination controls blood pressure in patients with severe hypertension.
In the same period, we obtained 606 new marketing authorisations in various markets for 103 products.
We extended our range of medicines for the treatment of diseases of the central nervous system. Krka obtained marketing authorisations under the European decentralised procedures for Parnido (paliperidone) prolonged release tablets in three strengths. The medicine is an atypical antipsychotic and is taken only once daily. Krka has introduced OROS, a new laser technology for the production of tablets from which active ingredients are released by osmosis.
We obtained marketing authorisations under the European decentralised procedure for antidepressant Lamegom/Agomaval (agomelatine) film-coated tablets in one strength, 25 mg, and is administered once daily. It has a unique mechanism of action and is an additional option when other antidepressants are not effective. Owing to its soporific effect, it is a medicine of choice when depression is accompanied by insomnia.
Under the European decentralised procedure, relevant marketing authorisations for an antihistamine doxylamine (doxylamine succinate) film-coated tablets were obtained in three European countries. It is used as a short-term treatment for occasional sleep problems in adults. It helps shorten the time to fall asleep and improves the quality of sleep.
We obtained marketing authorisations under the European decentralised procedure for a new strength of the well-established medicine alprazolam 2 mg tablets and introduced the medicine in its lower strengths in certain other markets. The medicine is used for the treatment of anxiety and depression.
We extended our portfolio of oncology medicines. Under the centralised procedure, we obtained marketing authorisations for Pemetrexed Krka (pemetrexed) powder for solution for infusion in two strengths. This medicine of choice is used for the treatment of patients with locally advanced or metastatic non-small cell lung cancer.
We obtained marketing authorisation for gefitinib film-coated tablets. This medicine is indicated for the treatment of locally advanced or metastatic lung carcinoma. By inhibiting growth and metastasis of cancer cells, it reduces the symptoms of lung cancer, improves the quality of life, and prolongs the survival time.
Our range of oncology medicines was extended with Everofin (everolimus) tablets in three strengths. The medicine decreases blood supply to a tumour and inhibits cancer cell growth and metastasis. It is indicated for the treatment of breast cancer and renal cancer. This is a medicine of choice for the treatment of certain types of neuroendocrine tumours.
We also obtained marketing authorisations for an antiviral medicine entecavir film-coated tablets in two strengths. It is used to treat chronic hepatitis B virus infection. According to the guidelines, it is one of the medicines of choice for the treatment of this disease.
We obtained a marketing authorisation under the decentralised procedure for a new formulation of the well-established medicine tramadol oral drops. Tramadol is an opioid medicine used for relieving moderate to severe pain. Oral drops are a patientfriendly pharmaceutical dosage form also suitable for relieving pain in children.
We obtained new marketing authorisations in selected Western European markets for Naproxen 550 (naproxen) film-coated tablets. This is an important medicine in our range of products for relieving pain and inflammation, and for reducing fever.
We obtained a marketing authorisation for a new strength of an antipsychotic, Arisppa/Aryzalera (aripiprazole) 20 mg tablets, thus extending our portfolio of pharmaceuticals for diseases of the central nervous system. The medicine is now available in five strengths, which allows the treatment to be tailored to the needs of patients with serious diseases, such as schizophrenia.
In the European markets, we extended marketing opportunities by obtaining new marketing authorisations for our medicines. In Denmark, Sweden and Finland, we also obtained marketing authorisations for an anti-infective for systemic use, moxifloxacin solution for infusion, and in Iceland for clarithromycin film-coated tablets.
In the European markets, we furthermore obtained marketing authorisations for medicines for the treatment of cardiovascular diseases: atorvastatin film-coated tablets in three strengths, valsartan film-coated tablets and valsartan/ hydrochlorotiazide film-coated tablets available in a single-pill combination.
We expanded marketing opportunities for an antipsychotic, Kventiax SR (quetiapine) prolongedrelease tablets, and an antidepressant, sertraline film-coated tablets. Also, we obtained marketing authorisations for a medicine used for the treatment of erectile dysfunction, Tadipah (tadalafil) filmcoated tablets; an antihistamine, Dasergin (desloratadine) film-coated tablets; and fluconazole antifungal capsules.
In various eastern European countries, we obtained new marketing authorisations for medicines for the treatment of cardiovascular diseases: Lortenza (losartan/amlodipine) film-coated tablets in Kyrgyzstan and Azerbaijan; Vamloset (valsartan/ amlodipine) film-coated tablets in Mongolia; Valarox (rosuvastatin/valsartan) film-coated tablets; Atordapin (amlodipine/atorvastatin) film-coated tablets; Niperten Combi (bisoprolol/ amlodipine) film-coated tablets in Moldova, Bloxazoc (metoprolol) prolonged-release tablets in Kazakhstan; and Pektrol (isosorbide) prolongedrelease tablets in Mongolia. We obtained new marketing authorisations for the following medicines from our portfolio of products for the treatment of diseases of the central nervous system: Zylaxero (aripiprazole) tablets and Kventiax (quetiapine) filmcoated tablets in Ukraine; Kventiax SR (quetiapine) prolonged-release tablets in Azerbaijan, Elicea (escitalopram) film-coated tablets, Elicea Q-Tab (escitalopram) orodispersible tablets and Alventoa (venlafaxine) prolonged-release capsules in Moldova, and Elicea (escitalopram) orodispersible tablets in Ukraine.
We obtained new marketing authorisations for the following antibiotics: Azibiot (azithromycin) powder for oral suspension in Ukraine, Kazakhstan, Mongolia, Azerbaijan and Georgia; Betaklav (amoxicillin/clavulanic acid) tablets and powder for oral suspension in Turkmenistan and Mongolia; Moflaxa (moxifloxacin) solution for infusion in Azerbaijan; Levaxela (levofloxacin) solution for infusion in Azerbaijan and Mongolia; and filmcoated tablets in Mongolia. We also introduced Hiconcil (amoxicillin) capsules in Armenia, and
Cefamezin (cefazolin) powder for solution for injection in Mongolia.
Additionally, we obtained marketing authorisations for analgesics Doreta (tramadol/paracetamol) filmcoated tablets and Doreta SR (tramadol/ paracetamol) prolonged-release tablets in Azerbaijan.
We introduced a medicine for the treatment of HIV infections, Emtricitabin/Tenofovir Krka (emitricitabine/tenofovir) film-coated tablets in Kazakhstan and Azerbaijan.
In Moldova, we obtained new marketing authorisations for a medicine for controlling gastric acid, Zulbex (rabeprazole) gastro-resistant tablets, and a non-steroidal anti-inflammatory drug (NSAID) Etoxib (etoricoxib) film-coated tablets.
We introduced corticosteroids, Flosteron (betamethasone) suspension for injection in Azerbaijan, and Dexamethason Krka (dexamethasone) tablets in Ukraine.
In Mongolia, we obtained a marketing authorisation for an antidiabetic agent for the treatment of type II diabetes, Gliclada (gliclazide) prolonged-release tablets.
In the markets of South-Eastern Europe, we increased the number of marketing authorisations for medicines from key therapeutic groups. We obtained new marketing authorisations for several medicines for the treatment of cardiovascular diseases. These are: Rameam (ramipril/amlodipine) capsules in Serbia and Bosnia and Herzegovina, Amlessa (perindopril/amlodipine) tablets in Kosovo, Montenegro and Serbia, Amlewel/Co-Amlessa (perindopril/amlodipine/indapamide) tablets in Montenegro and Albania, Tenloris (losartan/amlodipine) film-coated tablets in Montenegro, Co-Olimestra (olmesartan/ hydrochlorothiazide) and Olimestra (olmesartan) film-coated tablets in Albania, Wamlox (amlodipine/valsartan) tablets and Bloxazoc (metorolol) tablets in Bosnia and Herzegovina, and Teldipin (telmisartan/amlodipine) tablets and Bixebra (ivabradine) film-coated tablets in Serbia.
In Kosovo and Macedonia, we obtained new marketing authorisations for an opioid analgesic Adolax (oxycodone/naloxone) prolonged-release tablets. We expanded our market opportunities for medicines for the treatment of HIV infections by obtaining marketing authorisations for emtricitabine/tenofovir film-coated tablets in Macedonia, and for darunavir film-coated tablets in Serbia. From our range of analgesics, we introduced Doreta (tramadol/paracetamol) filmcoated tablets in Montenegro.
From our range of medicines for the treatment of diseases of the central nervous system, we obtained marketing authorisations for two medicines for the treatment of depression and anxiety: Dulsevia (duloxetine) hard gastro-resistant capsules in Serbia, and Yasnal (donepezil) orodispersible tablets in Bosnia and Herzegovina.
We obtained additional marketing authorisations for the following medicines from our range of antibiotics: Azibiot (azithromycin) powder for oral suspension in Kosovo and Macedonia, Furocef (cefuroxime) film-coated tablets in Albania, Betaklav (amoxicillin/clavulanic acid) powder for oral solution in Kosovo and Bosnia and Herzegovina, and Betaklav (amoxicillin/clavulanic acid) film-coated tablets in Kosovo.
We introduced medicines for the treatment of erectile dysfunction, Tadorsyo (tadalafil) film-coated tablets, in Serbia, and Vizarsin (sildenafil) in Bosnia and Herzegovina. We also obtained marketing authorisations for a non-steroidal anti-inflammatory drug (NSAID) Etoxib (etoricoxib) film-coated tablets in Bosnia and Herzegovina, and Aclexa (celecoxib) hard capsules in Montenegro. We introduced a glucocorticoid, dexamethasone tablets, in Albania and in Bosna and Herzegovina.
In the overseas markets, we obtained marketing authorisations for many established Krka products. From the group of medicines for the treatment of cardiovascular diseases, we introduced Tolucombi (telmisartan/hydrochlorothiazide) tablets, Valsaden (valsartan/hydrochlorothiazide) film-coated tablets, Atoris (atorvastatin) film-coated tablets, Rawel SR (indapamide) prolonged-release tablets, Coryol (carvedilol) tablets, and Vasilip (simvastatin) filmcoated tablets.
We also obtained marketing authorisations for medicines used for controlling gastric acid, Nolpaza (pantoprazole) gastro-resistant tablets and powder for solution for injection and Lanzul (lansoprazole) capsules; an antihistamine, Aller Tec (levocetirizine) film-coated tablets; a medicine for the treatment of erectile dysfunction, Vizarsin (sildenafil) film-coated tablets; antibiotics, Ciprinol (ciprofloxacin) and Nolicin (norfloxacin); and a glucocorticoid, dexamethasone solution for
We obtained a marketing authorisation for Flebaven 450 mg/50 mg (diosmin/hesperidin) filmcoated tablets in Azerbaijan, Kyrgyzstan and Uzbekistan. We introduced Flebaven (diosmin) 500 mg film-coated tablets in Bosnia and Herzegovina and in Macedonia, where also 1000 mg tablets are available.
In Serbia, Bosnia and Herzegovina, Kosovo, Macedonia, Ukraine, Turkmenistan and Moldova, we introduced Septolete total (benzydamine
We expanded our portfolio of animal health products and were the first generic company to obtain marketing authorisation for selamectin 60 mg/ml spot-on solution for cats and small dogs in three different volumes and 120 mg/ml spot-on solution for dogs in five different volumes. This is an advanced medicine effective against external parasites, mange, fleas, lice as well as internal gastrointestinal parasites, heart worms and eye worms. It is also appropriate for the treatment of mixed infestations in cats and dogs.
In the first half of 2018, we extended marketing opportunities by obtaining new marketing authorisations for Fyperix/Amflee/Fypermid Combo (fipronil/S-methoprene) spot-on solution, an animal health product. The product protects dogs, cats and ferrets from parasitic skin infections and infestations. We obtained marketing authorisations under the decentralised procedure in the UK, Italy, Finland, Ireland, Portugal, Cyprus and Eastern European countries. In most countries, Krka obtained authorisations for marketing it as a nonprescription animal health product.
In Moldova, we obtained marketing authorisations for Otoxolan (marbofloxacin/clotrimazole/ dexamethasone) ear drops for dogs, Fypryst (fipronil) spot-on solution for dogs and cats, and Milprazon (milbemycin oxime/praziquantel) filmcoated tablets for cats and dogs.
injection.
chloride/cetylpyridinium chloride) lozenges in two flavours, elder and lemon, and honey and lemon.
We obtained notifications for Magnezij Krka 300/Magnezij B2 Krka 300 (magnesium citrate) in Macedonia and Hungary. We also obtained a marketing authorisation for our vitamin product, Pikovit Unique chewable tablets, in Mongolia. We launched a medicine for the treatment of the alimentary tract and metabolism, Ulcamed (bismuth) film-coated tablets, in Albania and Bosnia and Herzegovina.
In Serbia, we obtained the marketing authorisation for Dehinel (praziquantel/pyrantel embonate) filmcoated tablets for cats. The single-pill combination is used for the treatment of gastrointestinal infestations in cats.
In Kazakhstan, we obtained marketing authorisations for Fyprist (fipronil), a cutaneous spray for the treatment of and protection against external parasites in dogs and cats, and a general tonic and rehydrate, Calfoset solution for injection, for the treatment and prevention of digestive disorders. In Georgia, we introduced Rycarfa (carprofen), a non-steroidal anti-inflammatory agent.
Krka increased the number of marketing authorisations among the medicines for the treatment of farm animals and strengthened the existing brands. In Moldova, we obtained a marketing authorisation for Toltarox (toltrazuril) oral solution used to treat Coccidia spp. infestations in different poultry species. In Azerbaijan, we obtained marketing authorisations for Amatib (amoxicillin) oral powder for the treatment of infections in pigs and poultry, and Doxatib (doxycycline) powder for use in drinking water.
In Kazakhstan, we obtained marketing authorisations for Tyavalt (tiamulin) granules for the preparation of drinking water for pigs and for Rycarfa (carprofen), a non-steroidal antiinflammatory agent.
In the first nine months of 2018, the Krka Group allocated €66.0 million to investments, of that €52.0 million to the controlling company. We invested primarily in increasing and updating production, and in development-and-research capacities.
Krka's key investment is the product development and quality control facility, Razvojno-kontrolni center 4 (Slovene abbreviation: RKC 4), at the production site in Novo mesto. The building has been built in the vicinity of the other three similar laboratories for product development and control.
Preparation works for the €54 million building started at the end of June 2015, and the building was completed and glazed in the autumn of 2016. The connection structure between the two buildings, RKC 3 and RKC 4, has also been built. Setting up of the laboratory rooms was finished in the summer of 2017, and the facilities were put to use. Additional furnishing of the rooms intended for development is in its final stage. The supply and setting up of the pharmaceutical equipment are in progress, and the installation and start up are due by the end of 2018. The completion of facilities for Analytics Development is due at the end of 2018, and the installation of the equipment is planned for the first half of 2019.
In October 2017, Krka started building a multipurpose warehouse on the same site to ensure additional storage room for incoming materials and finished products. This will increase the speed and flexibility of production, and improve product availability and market supply. The construction of the building, installation of the logistic and other equipment, qualification and equipment and system start-ups will take two years. By the end of March 2019, the building should be roofed and shelving racks constructed. According to the plan, final connection with Raw Materials Warehouse and weighing rooms should be finished by the end of 2019. The investment is estimated at €36 million.
Notol 2, the advanced facility for manufacturing solid dosage forms and Krka's largest investment, which started running in 2015, is also at this site. We have been acquiring additional technological equipment in order to meet the market demand and manufacture new products, and we have allocated €10 million for that this year. When the plant is fully equipped, it will be able to operate at its planned volume, i.e. 4.5 billion tablets, film-coated tablets and capsules per year.
Investing in the new plant in Krško has provided facilities for hydrogenation and further increased capacities for the independent production of pharmaceutical ingredients. Construction of a €4.5 million hydrogenation plant, Hidrogeniranje 2, started in June 2017, and trial production at the beginning of 2018.
The plant for production of animal health products with biocidal effect in Bršljin, Novo mesto, has been extended. The investment is estimated at €4.6 million. Production on the new equipment is due at the end of 2018 or at the beginning of 2019.
Krka has started constructing a new office building in Ljubljana. The building will be connected to the existing one and ready for use in mid-2019. It will have four floors underground and four above the ground. The preparation works started in October 2017. According to the plan, the building should be constructed and glazed by the end of the year, and finishing works should be completed by June 2019.
Krka-Rus 2 plant in Istra in the Russian Federation is one of the most important investments in Krka's subsidiaries. The second stage of equipping has been completed, which has cost Krka €22 million. All technological and production equipment has been installed and operates. Production capacity has been increased to two thirds of the planned final capacity, a total of 2.5 billion tablets and capsules a year. In September, Krka started building a wastewater treatment plant. The investment is estimated at €2.6 million. A €1.8 million project to increase laboratory capacity is also in progress. Two thirds of products intended for the Russian market are produced by Krka-Rus, giving Krka the status of a domestic producer in the Russian Federation.
In the distribution and production centre in Jastrebarsko, Croatia, the investment project in production and laboratory capacities for solid dosage oncology medicines was completed in 2017, whereas furnishing the premises and installing technological equipment for additional production capacity for animal health products are still ongoing. The investment is estimated at €2 million.
We completed a €5.5 million investment in Krka's subsidiary, Farma GRS. We arranged additional capacities for research and development at the Chemical development centre, and increased capacities for the small-scale production of pharmaceutical ingredients in line with the good manufacturing practice. Production started in February.
Several low investments are in progress in all business units of the subsidiary Terme Krka. In 2018, the subsidiary Terme Krka plans to allocate to investments more than €3 million.
We have established a joint venture Ningbo Krka Menovo with our long-term Chinese partner Menovo in the city of Ningbo. The initial share capital of €30 million has been allocated to financing development activities and investing in production capacities. The new company engages in development, production and marketing of finished products. Its first job is to obtain as many marketing authorisations in China for products from Krka's portfolio as possible in the next two to three years, and to manufacture and sell them there. First sales results in China are expected in three years.
At the end of September 2018, the Krka Group had 11,226 employees, of that 5,773 abroad, slightly exceeding 51% of the total Krka Group headcount. More than 54% of all employees in the Krka Group have completed at least university level education.
At the end of September, the Krka Group had 394 or 4% employees more than at the end of 2017. Together with persons employed through agencies, the Krka Group had 12,414 regularly employed persons on payroll, or 2% more than at the end of 2017.
| 30 September 2018 | 31 December 2017 | ||||
|---|---|---|---|---|---|
| Number of | Share | Number of | Share | ||
| employees | (%) | employees | (%) | ||
| PhD | 186 | 1.7 | 175 | 1.6 | |
| Master of Science | 377 | 3.4 | 364 | 3.4 | |
| University degree | 5,536 | 49.3 | 5,472 | 50.5 | |
| Higher professional education | 1,584 | 14.1 | 1,485 | 13.7 | |
| Vocational college education | 278 | 2.4 | 267 | 2.5 | |
| Secondary school education | 2,146 | 19.1 | 1,927 | 17.8 | |
| Other | 1,119 | 10.0 | 1,142 | 10.5 | |
| Krka Group | 11,226 | 100.0 | 10,832 | 100.0 |
We ensure a continuous inflow of new talented employees by giving scholarships. Currently, there are 50 Krka scholarship holders, primarily pharmacy and chemistry students. We also grant scholarships to exceptional students from other fields of interest to Krka. We granted 18 new scholarships this year. Through a staff development and succession planning system we make sure that most of Krka's key personnel requirements – both in terms of field experts and managers – are catered for within the Krka Group.
Krka also invests in the knowledge and development of its employees, who undergo additional training, both in Slovenia and abroad, related to various professional areas of expertise, quality, management, personal growth, foreign languages and informatics. Trainings are adjusted to the needs of our employees, the technological process, the market situation and the development needs of the Krka Group. Most trainings are organised in-house, they are constantly updated and supplemented with new types (e-learning etc.) better adjusted to the contemporary line of work.
At the end of September, 156 employees were enrolled into part-time graduate studies co-funded by Krka, 67 of them in postgraduate studies. By the end of September, 17 Krka's employees had graduated from university this year.
By examining and approving candidates under the NVQ system between 2002 and September 2018, we have awarded 1,348 NVQ certificates to Krka employees and 142 to participants from other organisations in the pharmaceutical industry, a total of 1,490 certificates for four vocational qualifications. At the moment, 124 employees are included in the process of obtaining NVQ.
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Assets | |||
| Property, plant and equipment | 840,043 | 864,842 | 97 |
| Intangible assets | 108,845 | 110,992 | 98 |
| Loans | 11,636 | 9,543 | 122 |
| Investments | 9,644 | 8,815 | 109 |
| Deferred tax assets | 39,539 | 38,475 | 103 |
| Other non-current assets | 463 | 341 | 136 |
| Total non-current assets | 1,010,170 | 1,033,008 | 98 |
| Assets held for sale | 41 | 41 | 100 |
| Inventories | 340,967 | 310,671 | 110 |
| Trade receivables | 426,014 | 500,735 | 85 |
| Other receivables | 28,735 | 27,302 | 105 |
| Loans | 20,155 | 1,426 | 1,413 |
| Investments | 5,835 | 0 | |
| Cash and cash equivalents | 79,940 | 45,948 | 174 |
| Total current assets | 901,687 | 886,123 | 102 |
| Total assets | 1,911,857 | 1,919,131 | 100 |
| Equity | |||
| Share capital | 54,732 | 54,732 | 100 |
| Treasury shares | -47,975 | -40,588 | 118 |
| Reserves | 105,922 | 111,477 | 95 |
| Retained earnings | 1,381,758 | 1,361,107 | 102 |
| Total equity holders of the controlling company | 1,494,437 | 1,486,728 | 101 |
| Non-controlling interests within equity | 3,207 | 971 | 330 |
| Total equity | 1,497,644 | 1,487,699 | 101 |
| Liabilities | |||
| Provisions | 100,199 | 98,075 | 102 |
| Deferred revenues | 10,086 | 10,953 | 92 |
| Deferred tax liabilities | 11,862 | 12,154 | 98 |
| Total non-current liabilities | 122,147 | 121,182 | 101 |
| Trade payables | 104,731 | 108,340 | 97 |
| Income tax payable | 5,018 | 16,142 | 31 |
| Other current liabilities | 182,317 | 185,768 | 98 |
| Total current liabilities | 292,066 | 310,250 | 94 |
| Total liabilities | 414,213 | 431,432 | 96 |
| Total equity and liabilities | 1,911,857 | 1,919,131 | 100 |
| In € thousand | Jan–Sept 2018 | Jan–Sept 2017 | Index |
|---|---|---|---|
| Revenues | 971,920 | 928,251 | 105 |
| Costs of goods sold | -414,047 | -398,518 | 104 |
| Gross profit | 557,873 | 529,733 | 105 |
| Other operating income | 7,770 | 8,174 | 95 |
| Selling and distribution expenses | -245,725 | -237,537 | 103 |
| R&D expenses | -97,719 | -92,877 | 105 |
| General and administrative expenses | -58,378 | -58,270 | 100 |
| Operating profit | 163,821 | 149,223 | 110 |
| Financial income | 4,000 | 9,892 | 40 |
| Financial expenses | -24,832 | -29,870 | 83 |
| Net financial result | -20,832 | -19,978 | 104 |
| Profit before tax | 142,989 | 129,245 | 111 |
| Income tax | -22,228 | -19,194 | 116 |
| Net profit | 120,761 | 110,051 | 110 |
| Attributable to: | |||
| – equity holders of the controlling company | 120,836 | 110,059 | 110 |
| – non-controlling interest | -75 | -8 | 938 |
| Basic earnings per share (in €) | 3.77 | 3.41 | 111 |
| Diluted earnings per share (in €) | 3.77 | 3.41 | 111 |
* Net profit for the period/Average number of shares issued in the period exclusive of treasury shares.
** All shares issued by the controlling company are ordinary shares, hence the diluted earnings per share ratio equalled the basic earnings per share.
| In € thousand | Jan–Sept 2018 | Jan–Sept 2017 | Index |
|---|---|---|---|
| Net profit | 120,761 | 110,051 | 110 |
| Other comprehensive income for the period | |||
| Other comprehensive income for the period reclassified to profit or loss at a future date |
|||
| Translation reserves | -13,639 | -7,460 | 183 |
| Change in fair value of available-for-sale financial assets | 823 | -1,082 | |
| Deferred tax effect | -157 | 205 | |
| Net other comprehensive income for the period reclassified to profit or loss at a future date |
-12,973 | -8,337 | 156 |
| Other comprehensive income for the period that will not be reclassified to profit or loss at a future date |
|||
| Recalculation of post-employment benefits | -1 | 0 | |
| Net other comprehensive income for the period that will not be reclassified to profit or loss at a future date |
-1 | 0 | |
| Total other comprehensive income for the period (net of tax) | -12,974 | -8,337 | 156 |
| Total comprehensive income for the period (net of tax) | 107,787 | 101,714 | 106 |
| Attributable to: | |||
| – equity holders of the controlling company | 107,894 | 101,722 | 106 |
| – non-controlling interest | -107 | -8 | 1,338 |
| Reserves | Retained earnings | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reserves for |
Other | Total equity holders of the |
Non controlling |
|||||||||||
| In € 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 period |
controlling company |
interests within equity |
Total equity |
| Balance at 1 Jan 2018 | 54,732 | -40,588 | 40,588 | 105,897 | 14,990 | 30,000 | -12,523 | -67,475 | 1,129,172 | 90,233 | 141,702 | 1,486,728 | 971 | 1,487,699 |
| Net profit | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 120,836 | 120,836 | -75 | 120,761 |
| Total other comprehensive income for the period (net of tax) |
0 | 0 | 0 | 0 | 0 | 0 | 665 | -13,607 | 0 | 0 | 0 | -12,942 | -32 | -12,974 |
| Total comprehensive income for the period (net of tax) |
0 | 0 | 0 | 0 | 0 | 0 | 665 | -13,607 | 0 | 0 | 120,836 | 107,894 | -107 | 107,787 |
| Transactions with owners recognised in equity |
||||||||||||||
| Formation of other revenue reserves under the resolution of the Management and Supervisory Boards |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 38,216 | -38,216 | 0 | 0 | 0 | 0 |
| Transfer of previous period's profit to retained earnings |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 141,702 | -141,702 | 0 | 0 | 0 |
| Purchase of treasury shares | 0 | -7,387 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -7,387 | 0 | -7,387 |
| Formation of reserves for treasury shares |
0 | 0 | 7,387 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -7,387 | 0 | 0 | 0 |
| Dividends and other profit shares paid |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -92,798 | 0 | -92,798 | 0 | -92,798 |
| Acquisition of non-controlling interests |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2,343 | 2,343 |
| Total transactions with owners recognised in equity |
0 | -7,387 | 7,387 | 0 | 0 | 0 | 0 | 0 | 38,216 | 10,688 | -149,089 | -100,185 | 2,343 | -97,842 |
| Balance at 30 Sept 2018 |
54,732 | -47,975 | 47,975 | 105,897 | 14,990 | 30,000 | -11,858 | -81,082 | 1,167,388 | 100,921 | 113,449 | 1,494,437 | 3,207 | 1,497,644 |
| Reserves | Retained earnings | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reserves for |
Other | Total equity holders of the |
Non controlling |
|||||||||||
| Share | Treasury | treasury | Share | Legal | Statutory | Fair value | Translation | profit | Retained | Profit for | controlling | interests | Total | |
| In € thousand | capital | shares | shares | premium | reserves | reserves | reserve | reserve | reserves | earnings | the period | company | within equity | equity |
| Balance at 1 Jan 2017 | 54,732 | -29,690 | 29,690 | 105,897 | 14,990 | 30,000 | -11,802 | -59,097 | 1,102,165 | 107,670 | 98,833 | 1,443,388 | 1,056 | 1,444,444 |
| Net profit | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 110,059 | 110,059 | -8 | 110,051 |
| Total other comprehensive income for the period (net of tax) |
0 | 0 | 0 | 0 | 0 | 0 | -877 | -7,460 | 0 | 0 | 0 | -8,337 | 0 | -8,337 |
| Total comprehensive income for the period (net of tax) |
0 | 0 | 0 | 0 | 0 | 0 | -877 | -7,460 | 0 | 0 | 110,059 | 101,722 | -8 | 101,714 |
| Transactions with owners recognised in equity |
||||||||||||||
| Transfer of previous period's profit to retained earnings |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 98,833 | -98,833 | 0 | 0 | 0 |
| Purchase of treasury shares | 0 | -7,856 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -7,856 | 0 | -7,856 |
| Formation of reserves for treasury shares |
0 | 0 | 7,856 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -7,856 | 0 | 0 | 0 |
| Dividends and other profit shares paid |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -88,644 | 0 | -88,644 | 0 | -88,644 |
| Total transactions with owners recognised in equity |
0 | -7,856 | 7,856 | 0 | 0 | 0 | 0 | 0 | 0 | 10,189 | -106,689 | -96,500 | 0 | -96,500 |
| Balance at 30 Sept 2017 |
54,732 | -37,546 | 37,546 | 105,897 | 14,990 | 30,000 | -12,679 | -66,557 | 1,102,165 | 117,859 | 102,203 | 1,448,610 | 1,048 | 1,449,658 |
| In € thousand | Jan–Sept 2018 | Jan–Sept 2017 |
|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Net profit | 120,761 | 110,051 |
| Adjustments for: | 99,722 | 102,533 |
| – amortisation/depreciation | 82,613 | 79,734 |
| – foreign exchange differences | -4,585 | -1,924 |
| – investment income | -5,454 | -10,848 |
| – investment expenses | 3,098 | 15,039 |
| - financial income | -82 | 0 |
| – interest expenses and other financial expenses | 1,904 | 1,338 |
| – income tax | 22,228 | 19,194 |
| Operating profit before changes in net operating current assets | 220,483 | 212,584 |
| Change in trade receivables | 73,671 | 26,331 |
| Change in inventories | -30,296 | -24,109 |
| Change in trade payables | -4,713 | -1,638 |
| Change in provisions | 968 | 1,139 |
| Change in deferred revenues | -867 | -905 |
| Change in other current liabilities | -3,072 | -29,535 |
| Income tax paid | -36,322 | -6,894 |
| Net cash from operating activities | 219,852 | 176,973 |
| CASH FLOWS FROM INVESTING ACTIVITIES | ||
| Interest received | 349 | 402 |
| Proceeds from sale of current investments | 0 | 2 |
| Dividends received | 975 | 15 |
| Proceeds from sale of property, plant and equipment | 3,217 | 1,279 |
| Purchase of intangible assets | -3,352 | -2,899 |
| Purchase of property, plant and equipment | -61,883 | -77,410 |
| Non-current loans | -1,978 | -1,911 |
| Proceeds from repayment of non-current loans | 951 | 983 |
| Payments to acquire non-current investments | -156 | -124 |
| Proceeds from sale of non-current investments | 24 | 11 |
| Payments/Proceeds in connection with current investments and loans | -24,746 | 8,281 |
| Payments in connection with derivative financial instruments | -2,278 | -25,820 |
| Proceeds from derivative financial instruments | 2,386 | 9,474 |
| Net cash used in financing activities | -86,491 | -87,717 |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Interest paid | -748 | -268 |
| Dividends and other profit shares paid | -92,809 | -88,748 |
| Purchase of treasury shares | -7,387 | -7,856 |
| Proceeds of payments from non-controlling interests | 2,343 | 0 |
| Net cash used in financing activities | -98,601 | -96,872 |
| Net increase/decrease in cash and cash equivalents | 34,760 | -7,616 |
| Cash and cash equivalents at the beginning of the period | 45,948 | 38,630 |
| Effect of exchange rate fluctuations on cash held | -768 | -78 |
| Net cash and cash equivalents at the end of the period | 79,940 | 30,936 |
| European Union | South-East Europe | East Europe | Other | Elimination | Total | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Jan–Sept | Jan–Sept | Jan–Sept | Jan–Sept | Jan–Sept | Jan–Sept | Jan–Sept | Jan–Sept | Jan–Sept | Jan–Sept | Jan–Sept | Jan–Sept | |
| In € thousand | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 |
| Revenues to non-group companies |
591,790 | 574,164 | 54,164 | 46,220 | 287,625 | 271,434 | 38,341 | 36,433 | 0 | 0 | 971,920 | 928,251 |
| Revenues to Group companies |
155,410 | 172,793 | 29,881 | 22,499 | 167,662 | 172,465 | 0 | 0 | -352,953 | -367,757 | 0 | 0 |
| Other operating income | 3,595 | 5,121 | 24 | 117 | 4,151 | 2,936 | 0 | 0 | 0 | 0 | 7,770 | 8,174 |
| Operating expenses | -509,975 | -495,401 | -37,186 | -33,866 | -245,444 | -236,313 | -23,264 | -21,622 | 0 | 0 | -815,869 | -787,202 |
| Operating expenses to Group companies |
-267,479 | -277,590 | -32,879 | -25,419 | -341,447 | -325,909 | -251 | -6 | 642,056 | 628,924 | 0 | 0 |
| Operating profit | 85,410 | 83,884 | 17,002 | 12,471 | 46,332 | 38,057 | 15,077 | 14,811 | 0 | 0 | 163,821 | 149,223 |
| Interest income | 149 | 141 | 1 | 0 | 195 | 260 | 3 | 0 | 0 | 0 | 348 | 401 |
| Interest revenues to Group companies |
190 | 539 | 0 | 0 | 2 | 2 | 0 | 0 | -192 | -541 | 0 | 0 |
| Interest expenses | -24 | -201 | 0 | 0 | -556 | 2 | 0 | 0 | 0 | 0 | -580 | -199 |
| Interest expenses to Group companies |
-235 | -195 | 0 | 0 | -39 | -281 | 0 | 0 | 274 | 476 | 0 | 0 |
| Net financial result | -2,111 | 293 | -353 | 562 | -18,677 | -20,708 | 309 | -125 | 0 | 0 | -20,832 | -19,978 |
| Income tax | -10,755 | -10,724 | -1,933 | -1,619 | -8,208 | -5,366 | -1,332 | -1,485 | 0 | 0 | -22,228 | -19,194 |
| Net profit | 72,544 | 73,453 | 14,716 | 11,414 | 19,447 | 11,983 | 14,054 | 13,201 | 0 | 0 | 120,761 | 110,051 |
| Investments | 62,238 | 72,657 | 316 | 148 | 2,969 | 2,436 | 436 | 0 | 0 | 0 | 65,959 | 75,241 |
| Depreciation | 54,384 | 49,658 | 1,606 | 1,440 | 20,780 | 22,654 | 438 | 277 | 0 | 0 | 77,208 | 74,029 |
| Amortisation | 3,416 | 3,514 | 237 | 208 | 1,596 | 1,823 | 156 | 160 | 0 | 0 | 5,405 | 5,705 |
| 30 Sept 2018 |
31 Dec 2017 |
30 Sept 2018 |
31 Dec 2017 |
30 Sept 2018 |
31 Dec 2017 |
30 Sept 2018 |
31 Dec 2017 |
30 Sept 2018 |
31 Dec 2017 |
30 Sept 2018 |
31 Dec 2017 |
|
| Total assets | 1,489,309 | 1,461,851 | 45,436 | 40,855 | 365,103 | 405,694 | 12,009 | 10,731 | 0 | 0 | 1,911,857 | 1,919,131 |
| Goodwill | 42,644 | 42,644 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 42,644 | 42,644 |
| Trademark | 37,527 | 38,163 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 37,527 | 38,163 |
| Total liabilities | 300,425 | 327,324 | 10,278 | 9,453 | 85,123 | 77,273 | 18,387 | 17,382 | 0 | 0 | 414,213 | 431,432 |
| In € thousand | Jan–Sept 2018 | Jan–Sept 2017 | Index |
|---|---|---|---|
| Cost of goods and material | 259,214 | 267,441 | 97 |
| Cost of services | 176,322 | 173,915 | 101 |
| Employee benefit cost | 278,807 | 262,036 | 106 |
| Amortisation and depreciation | 82,613 | 79,734 | 104 |
| Inventory write-off and allowances | 15,204 | 8,799 | 173 |
| Receivables impairment and write-off | 774 | 1,803 | 43 |
| Formation of provisions for lawsuits | 45 | 0 | |
| Other operating expenses | 28,468 | 25,453 | 112 |
| Total costs | 841,447 | 819,181 | 103 |
| Change in the value of inventories of products and work in progress |
-25,578 | -31,979 | 80 |
| Total | 815,869 | 787,202 | 104 |
| In € thousand | Jan–Sept 2018 | Jan–Sept 2017 | Index |
|---|---|---|---|
| Gross wages and salaries and continued pay | 216,785 | 203,516 | 107 |
| Social security contributions | 17,533 | 15,492 | 113 |
| Pension insurance contributions | 29,277 | 28,476 | 103 |
| Payroll tax | 779 | 821 | 95 |
| Post-employment benefits and other non-current employee benefits |
3,629 | 3,581 | 101 |
| Other employee benefit costs | 10,804 | 10,150 | 106 |
| Total employee benefit costs | 278,807 | 262,036 | 106 |
| In € thousand | Jan–Sept 2018 | Jan–Sept 2017 | Index |
|---|---|---|---|
| Grants and assistance for humanitarian and other purposes | 1,314 | 1,248 | 105 |
| Environmental protection expenses | 3,066 | 2,719 | 113 |
| Other taxes and levies | 20,617 | 17,748 | 116 |
| Loss on sale of property, plant and equipment and intangible assets |
820 | 927 | 88 |
| Other operating expenses | 2,651 | 2,811 | 94 |
| Total other operating expenses | 28,468 | 25,453 | 112 |
Other taxes and levies include taxes (claw-back, etc.) that have recently been introduced in certain markets, where the Krka Group operates.
| In € thousand | Jan–Sept 2018 | Jan–Sept 2017 | Index |
|---|---|---|---|
| Interest income | 348 | 401 | 87 |
| Gains on disposal of available-for-sale financial assets | 0 | 2 | 0 |
| Financial instruments income | 3,553 | 9,474 | 38 |
| – realised income | 2,386 | 9,474 | 25 |
| – change in fair value | 1,167 | 0 | |
| Income from dividends and other shares of the profit | 17 | 15 | 113 |
| Other financial income | 82 | 0 | |
| Total financial income | 4,000 | 9,892 | 40 |
| Net foreign exchange differences | -20,651 | -14,323 | 144 |
| Interest expenses | -580 | -199 | 291 |
| Financial instruments expenses | -2,278 | -14,111 | 16 |
| – incurred expenses | -2,278 | -25,820 | 9 |
| – change in fair value | 0 | 11,709 | 0 |
| Other financial expenses | -1,323 | -1,237 | 107 |
| Total financial expenses | -24,832 | -29,870 | 83 |
| Net financial result | -20,832 | -19,978 | 104 |
Income tax amounted to €23,894 thousand, or 16.7% of profit before tax. Together with deferred tax of €-1,666 thousand,
Income tax €22,228 thousand
total income tax expenses in the income statement equalled €22,228 thousand. The effective tax rate was 15.5%.
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Land | 39,949 | 38,863 | 103 |
| Buildings | 388,628 | 409,682 | 95 |
| Equipment | 347,157 | 375,115 | 93 |
| Property, plant and equipment being acquired | 61,812 | 36,650 | 169 |
| Advances for property, plant and equipment | 2,497 | 4,532 | 55 |
| Total property, plant and equipment | 840,043 | 864,842 | 97 |
The value of property, plant and equipment represents just short of 44% of the Krka Group's balance sheet total. Please see the chapter 'Investments' in the Business Report for details on Krka's major investments.
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Goodwill | 42,644 | 42,644 | 100 |
| Trademark | 37,527 | 38,163 | 98 |
| Concessions, patents, licences and similar rights | 24,268 | 26,644 | 91 |
| Intangible assets being acquired | 4,406 | 3,541 | 124 |
| Total intangible assets | 108,845 | 110,992 | 98 |
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Non-current loans | 11,636 | 9,543 | 122 |
| – loans to others | 11,636 | 9,543 | 122 |
| Current loans | 20,155 | 1,426 | 1,413 |
| – portion of non-current loan maturing next year | 91 | 1,330 | 7 |
| – loans to others | 20,064 | 94 | 21,345 |
| – current interest receivable | 0 | 2 | 0 |
| Total loans | 31,791 | 10,969 | 290 |
Non-current loans constituted 37% of total loans.
Non-current loans to others include loans that the Krka Group extends in accordance with its internal acts to its employees for the purchase or renovation of housing facilities.
Non-current loans to others include bank deposits with a maturity exceeding 90 days in total of €20,000 thousand.
Investments €15,479 thousand
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Non-current investments | 9,644 | 8,815 | 109 |
| – available-for-sale financial assets | 9,644 | 8,815 | 109 |
| Current investments including derivative financial instruments |
5,835 | 0 | |
| – derivative financial instruments | 882 | 0 | |
| – other current investments | 4,953 | 0 | |
| Total investments | 15,479 | 8,815 | 176 |
Available-for-sale financial assets comprised shares and interests in companies in Slovenia in total of €808 thousand, and €8,836 thousand of investments in shares and interests in companies abroad.
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Material | 130,595 | 119,775 | 109 |
| Work in progress | 88,225 | 77,743 | 113 |
| Products | 110,862 | 102,211 | 108 |
| Merchandise | 8,060 | 8,070 | 100 |
| Advances for inventories | 3,225 | 2,872 | 112 |
| Total inventories | 340,967 | 310,671 | 110 |
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Current trade receivables | 426,014 | 500,735 | 85 |
| Current trade receivables from others | 28,735 | 27,302 | 105 |
| Total receivables | 454,749 | 528,037 | 86 |
Bank balances also include bank deposits with a maturity to 30 days in total of €13,373 thousand.
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Share capital | 54,732 | 54,732 | 100 |
| Treasury shares | -47,975 | -40,588 | 118 |
| Reserves | 105,922 | 111,477 | 95 |
| – reserves for treasury shares | 47,975 | 40,588 | 118 |
| – share premium | 105,897 | 105,897 | 100 |
| – legal reserves | 14,990 | 14,990 | 100 |
| – statutory reserves | 30,000 | 30,000 | 100 |
| – fair value reserves | -11,858 | -12,523 | 95 |
| – translation reserves | -81,082 | -67,475 | 120 |
| Retained earnings | 1,381,758 | 1,361,107 | 102 |
| Total equity holders of the controlling company | 1,494,437 | 1,486,728 | 101 |
| Non-controlling interests within equity | 3,207 | 971 | 330 |
| Total equity | 1,497,644 | 1,487,699 | 101 |
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Provisions for lawsuits | 4,180 | 4,507 | 93 |
| Provisions for post-employment benefits and other non-current employee benefits |
94,614 | 92,710 | 102 |
| Other provisions | 1,405 | 858 | 164 |
| Total provisions | 100,199 | 98,075 | 102 |
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Grants from the European Regional Development Fund and | |||
| budget of the Republic of Slovenia, intended for the Production of pharmaceuticals in the new Notol 2 plant project. |
1,917 | 2,117 | 91 |
| Grants from the budget for Dolenjske and Šmarješke Toplice | 3,680 | 3,785 | 97 |
| health resorts and for Golf Grad Otočec | |||
| Grants from the European Regional Development Fund for | 174 | 242 | 72 |
| developing new technologies (a FBD project) | |||
| Grants from the European Regional Development Fund for | |||
| setting up the GEN-I information and technology solutions | 6 | 10 | 60 |
| system | |||
| Grants from the European Regional Development Fund for the | 4,280 | 4,752 | 90 |
| Development Centres of the Slovene Economy | |||
| Subsidy for acquisition of electric vehicles | 6 | 7 | 86 |
| Property, plant and equipment received for free | 22 | 31 | 71 |
| Emission coupons | 1 | 9 | 11 |
| Total deferred revenues | 10,086 | 10,953 | 92 |
The Development Centres of the Slovene Economy and FBD projects are partly funded by the European Union from the European Regional Development Fund. The projects are carried out within the framework of the Operational Programme for Strengthening Regional Development Potentials for Period 2007–2013; Priority axis 1: Competitiveness and Research Excellence: main type of activity 1.1: Improvement of competitiveness and research excellence.
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Payables to domestic suppliers | 46,135 | 43,256 | 107 |
| Payables to foreign suppliers | 56,911 | 61,790 | 92 |
| Payables from advances | 1,685 | 3,294 | 51 |
| Total trade payables | 104,731 | 108,340 | 97 |
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Accrued contractual discounts on products sold | 107,343 | 125,680 | 85 |
| Payables to employees – gross salaries, other receipts and charges |
42,850 | 38,551 | 111 |
| Derivative financial instruments | 0 | 284 | 0 |
| Other | 32,124 | 21,253 | 151 |
| Total other current liabilities | 182,317 | 185,768 | 98 |
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Guarantees issued | 19,650 | 18,396 | 107 |
| Other | 620 | 620 | 100 |
| Total contingent liabilities | 20,270 | 19,016 | 107 |
| 30 Sept 2018 | 31 Dec 2017 | |||
|---|---|---|---|---|
| Carrying | Carrying | |||
| In € thousand | amount | Fair value | amount | Fair value |
| Non-current loans | 11,636 | 11,636 | 9,543 | 9,543 |
| Available-for-sale financial assets | 9,644 | 9,644 | 8,815 | 8,815 |
| Current loans | 20,155 | 20,155 | 1,426 | 1,426 |
| Current investments | 5,835 | 5,835 | 0 | 0 |
| – derivative financial instruments | 882 | 882 | 0 | 0 |
| – other investments | 4,953 | 4,953 | 0 | 0 |
| Trade receivables | 426,014 | 426,014 | 500,735 | 500,735 |
| Cash and cash equivalents | 79,940 | 79,940 | 45,948 | 45,948 |
| Trade payables and other liabilities excluding amounts owed to the state, to employees and advances |
-247,590 | -247,590 | -241,876 | -241,876 |
| Other current liabilities | 0 | 0 | -284 | -284 |
| – derivative financial instruments | 0 | 0 | -284 | -284 |
| Total | 305,634 | 305,634 | 324,307 | 324,307 |
In terms of fair value, investments are classified into three levels:
The fair value of securities held for trading is computed on the basis of the stock exchange quotation of the respective securities as at reporting date, and it is not decreased by any costs that may arise upon the sale or purchase of securities.
| 30 Sept 2018 | 31 Dec 2017 | |||||||
|---|---|---|---|---|---|---|---|---|
| In € thousand | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total |
| Assets at fair value | ||||||||
| Available-for-sale financial assets | 8,256 | 0 | 1,388 | 9,644 | 7,434 | 0 | 1,381 | 8,815 |
| Derivative financial instruments | 0 | 0 | 882 | 882 | 0 | 0 | 0 | 0 |
| Other investments | 0 | 0 | 4,953 | 4,953 | 0 | 0 | 0 | 0 |
| Total assets at fair value | 8,256 | 0 | 7,223 | 15,479 | 7,434 | 0 | 1,381 | 8,815 |
| Assets for which fair value is disclosed |
||||||||
| Non-current loans | 0 | 0 | 11,636 | 11,636 | 0 | 0 | 9,543 | 9,543 |
| Current loans | 0 | 0 | 20,155 | 20,155 | 0 | 0 | 1,426 | 1,426 |
| Trade receivables | 0 | 0 | 426,014 | 426,014 | 0 | 0 | 500,735 | 500,735 |
| Cash and cash equivalents | 0 | 0 | 79,940 | 79,940 | 0 | 0 | 45,948 | 45,948 |
| Total assets for which fair value is disclosed |
0 | 0 | 537,745 | 537,745 | 0 | 0 | 557,652 | 557,652 |
| Total | 8,256 | 0 | 544,968 | 553,224 | 7,434 | 0 | 559,033 | 566,467 |
| 30 Sept 2018 | 31 Dec 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| In € thousand | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |
| Liabilities at fair value | |||||||||
| Derivative financial instruments | 0 | 0 | 0 | 0 | 0 | 0 | 284 | 284 | |
| Total liabilities at fair value | 0 | 0 | 0 | 0 | 0 | 0 | 284 | 284 | |
| Liabilities for which fair value is | |||||||||
| disclosed | |||||||||
| Trade payables and other liabilities excluding amounts owed to the state, to employees and advances |
0 | 0 | 247,590 | 247,590 | 0 | 0 | 241,876 | 241,876 | |
| Total liabilities for which fair value is disclosed |
0 | 0 | 247,590 | 247,590 | 0 | 0 | 241,876 | 241,876 | |
| Total | 0 | 0 | 247,590 | 247,590 | 0 | 0 | 242,160 | 242,160 |
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Assets | |||
| Property, plant and equipment | 602,221 | 611,341 | 99 |
| Intangible assets | 27,051 | 28,299 | 96 |
| Investments in subsidiaries | 325,502 | 321,898 | 101 |
| Trade receivables from subsidiaries | 35,685 | 38,644 | 92 |
| Loans | 15,694 | 11,187 | 140 |
| Investments | 9,643 | 8,814 | 109 |
| Deferred tax assets | 11,942 | 12,342 | 97 |
| Other non-current assets | 57 | 70 | 81 |
| Total non-current assets | 1,027,795 | 1,032,595 | 100 |
| Assets held for sale | 41 | 41 | 100 |
| Inventories | 286,275 | 264,174 | 108 |
| Trade receivables | 405,942 | 456,265 | 89 |
| Other receivables | 15,221 | 15,395 | 99 |
| Loans | 51,871 | 34,895 | 149 |
| Investments | 882 | 0 | |
| Cash and cash equivalents | 64,450 | 34,117 | 189 |
| Total current assets | 824,682 | 804,887 | 102 |
| Total assets | 1,852,477 | 1,837,482 | 101 |
| Equity | |||
| Share capital | 54,732 | 54,732 | 100 |
| Treasury shares | -47,975 | -40,588 | 118 |
| Reserves | 188,832 | 180,779 | 104 |
| Retained earnings | 1,318,111 | 1,298,402 | 102 |
| Total equity | 1,513,700 | 1,493,325 | 101 |
| Liabilities | |||
| Provisions | 87,393 | 85,503 | 102 |
| Deferred revenues | 2,123 | 2,408 | 88 |
| Total non-current liabilities | 89,516 | 87,911 | 102 |
| Trade payables | 151,537 | 159,119 | 95 |
| Borrowings | 28,476 | 27,525 | 103 |
| Income tax payable | 4,303 | 15,127 | 28 |
| Other current liabilities | 64,945 | 54,475 | 119 |
| Total current liabilities | 249,261 | 256,246 | 97 |
| Total liabilities | 338,777 | 344,157 | 98 |
| Total equity and liabilities | 1,852,477 | 1,837,482 | 101 |
| In € thousand | Jan–Sept 2018 | Jan–Sept 2017 | Index |
|---|---|---|---|
| Revenues | 916,007 | 887,422 | 103 |
| Costs of goods sold | -393,562 | -391,749 | 100 |
| Gross profit | 522,445 | 495,673 | 105 |
| Other operating income | 2,095 | 4,398 | 48 |
| Selling and distribution expenses | -218,434 | -213,120 | 102 |
| R&D expenses | -102,502 | -96,377 | 106 |
| General and administrative expenses | -49,468 | -46,983 | 105 |
| Operating profit | 154,136 | 143,591 | 107 |
| Financial income | 6,206 | 11,100 | 56 |
| Financial expenses | -23,309 | -30,077 | 77 |
| Net financial result | -17,103 | -18,977 | 90 |
| Profit before tax | 137,033 | 124,614 | 110 |
| Income tax | -17,139 | -18,278 | 94 |
| Net profit | 119,894 | 106,336 | 113 |
| Basic earnings per share (in €) | 3.74 | 3.30 | 114 |
| Diluted earnings per share ** (in €) | 3.74 | 3.30 | 114 |
* Net profit for the period/Average number of shares issued in the period exclusive of treasury shares.
** All shares issued by the company are ordinary shares, hence the diluted earnings per share ratio equalled the basic earnings per share.
| In € thousand | Jan–Sept 2018 | Jan–Sept 2017 | Index |
|---|---|---|---|
| Net profit | 119,894 | 106,336 | 113 |
| Other comprehensive income for the period | |||
| Other comprehensive income for the period reclassified to profit or loss at a future date |
|||
| Change in fair value of available-for-sale financial assets | 823 | -1,082 | |
| Deferred tax effect | -157 | 205 | |
| Net other comprehensive income for the period reclassified to profit or loss at a future date |
666 | -877 | |
| Total other comprehensive income for the period (net of tax) | 666 | -877 | |
| Total comprehensive income for the period (net of tax) | 120,560 | 105,459 | 114 |
| Reserves | Retained earnings | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reserves | ||||||||||||
| for | Other | |||||||||||
| Share capital |
Treasury shares |
treasury shares |
Share premium |
Legal reserves |
Statutory reserves |
Fair value reserve |
profit reserves |
Retained earnings |
Profit for the period |
Total equity |
||
| In € thousand Balance at 1 Jan 2018 |
54,732 | -40,588 | 40,588 | 105,897 | 14,990 | 30,000 | -10,696 | 1,129,172 | 26,398 | 142,832 | 1,493,325 | |
| Net profit | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 119,894 | 119,894 | |
| Total other comprehensive income for the | ||||||||||||
| period (net of tax) | 0 | 0 | 0 | 0 | 0 | 0 | 666 | 0 | 0 | 0 | 666 | |
| Total comprehensive income for the | 0 | 0 | 0 | 0 | 0 | 0 | 666 | 0 | 0 | 119,894 | 120,560 | |
| period (net of tax) | ||||||||||||
| Transactions with owners recognised in | ||||||||||||
| equity | ||||||||||||
| Formation of other revenue reserves under | ||||||||||||
| the resolution of the Management and | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 38,216 | -38,216 | 0 | 0 | |
| Supervisory Boards | ||||||||||||
| Transfer of previous period's profit to retained | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 142,832 | -142,832 | 0 | |
| earnings | ||||||||||||
| Purchase of treasury shares | 0 | -7,387 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -7,387 | |
| Formation of reserves for treasury shares | 0 | 0 | 7,387 | 0 | 0 | 0 | 0 | 0 | 0 | -7,387 | 0 | |
| Dividends paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -92,798 | 0 | -92,798 | |
| Total transactions with owners recognised | 0 | -7,387 | 7,387 | 0 | 0 | 0 | 0 | 38,216 | 11,818 | -150,219 | -100,185 | |
| in equity | ||||||||||||
| Balance at 30 Sept 2018 |
54,732 | -47,975 | 47,975 | 105,897 | 14,990 | 30,000 | -10,030 | 1,167,388 | 38,216 | 112,507 | 1,513,700 |
| Reserves | Retained earnings | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reserves | ||||||||||||
| for | Other | |||||||||||
| Share | Treasury | treasury | Share | Legal | Statutory | Fair value | profit | Retained | Profit for | Total | ||
| In € thousand | capital | shares | shares | premium | reserves | reserves | reserve | reserves | earnings | the period | equity | |
| Balance at 1 Jan 2017 | 54,732 | -29,690 | 29,690 | 105,897 | 14,990 | 30,000 | -9,994 | 1,102,165 | 49,405 | 93,253 | 1,440,448 | |
| Net profit | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 106,336 | 106,336 | |
| Total other comprehensive income for the period (net of tax) |
0 | 0 | 0 | 0 | 0 | 0 | -877 | 0 | 0 | 0 | -877 | |
| Total comprehensive income for the period (net of tax) |
0 | 0 | 0 | 0 | 0 | 0 | -877 | 0 | 0 | 106,336 | 105,459 | |
| Transactions with owners recognised in equity |
||||||||||||
| Transfer of previous period's profit to retained earnings |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 93,253 | -93,253 | 0 | |
| Purchase of treasury shares | 0 | -7,856 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -7,856 | |
| Formation of reserves for treasury shares |
0 | 0 | 7,856 | 0 | 0 | 0 | 0 | 0 | 0 | -7,856 | 0 | |
| Dividends paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -88,644 | 0 | -88,644 | |
| Total transactions with owners recognised in equity |
0 | -7,856 | 7,856 | 0 | 0 | 0 | 0 | 0 | 4,609 | -101,109 | -96,500 | |
| Balance at 30 Sept 2017 |
54,732 | -37,546 | 37,546 | 105,897 | 14,990 | 30,000 | -10,871 | 1,102,165 | 54,014 | 98,480 | 1,449,407 |
| Statement of Cash Flows of Krka, d. d., Novo mesto | ||||||||
|---|---|---|---|---|---|---|---|---|
| ---------------------------------------------------- | -- | -- | -- | -- | -- | -- | -- | -- |
| In € thousand | Jan–Sept 2018 | Jan–Sept 2017 | Index |
|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net profit | 119,894 | 106,336 | |
| Adjustments for: | 77,331 | 83,852 | |
| – amortisation/depreciation | 61,935 | 60,365 | |
| – foreign exchange differences | 741 | -65 | |
| – investment income | -6,466 | -11,467 | |
| – investment expenses | 2,540 | 14,951 | |
| – interest expenses and other financial expenses | 1,442 | 1,790 | |
| – income tax | 17,139 | 18,278 | |
| Operating profit before changes in net operating current assets | 197,225 | 190,188 | |
| Change in trade receivables | 52,536 | 15,449 | |
| Change in inventories | -22,101 | -18,497 | |
| Change in trade payables | -10,013 | 4,033 | |
| Change in provisions | 734 | 642 | |
| Change in deferred revenues | -285 | -288 | |
| Change in other current liabilities | 10,764 | 17,175 | |
| Income tax paid | -27,719 | 1,294 | |
| Net cash from operating activities | 201,141 | 209,996 | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Interest received | 405 | 744 | |
| Proceeds from sale of current investments | 0 | 2 | |
| Dividends received | 975 | 15 | |
| Proportionate profit of subsidiaries | 2,210 | 1,027 | |
| Proceeds from sale of property, plant and equipment | 350 | 267 | |
| Purchase of intangible assets | -2,835 | -2,717 | |
| Purchase of property, plant and equipment | -46,690 | -65,239 | |
| Acquisition of subsidiaries and a share of minority interest without obtained | -3,603 | -951 | |
| assets | |||
| Refund of subsequent payments in subsidiaries | 0 | 237 | |
| Non-current loans | -4,463 | -1,765 | |
| Proceeds from repayment of non-current loans | 925 | 15,800 | |
| Payments to acquire non-current investments | -18 | -49 | |
| Proceeds from sale of non-current investments | 21 | 11 | |
| Payments/Proceeds in connection with current investments and loans | -17,941 | 11,177 | |
| Payments in connection with derivative financial instruments | -2,278 | -25,820 | |
| Proceeds from derivative financial instruments | 2,386 | 9,474 | |
| Net cash from investing activities | -70,556 | -57,787 | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Interest paid | -315 | -786 | |
| Payments/Proceeds in connection with current borrowings | 980 | -61,461 | |
| Dividends and other profit shares paid | -92,809 | -88,748 | |
| Purchase of treasury shares | -7,387 | -7,856 | |
| Net cash used in financing activities | -99,531 | -158,851 | |
| Net increase/decrease in cash and cash equivalents | 31,054 | -6,642 | |
| Cash and cash equivalents at beginning of the year | 34,117 | 24,049 | |
| Effect of exchange rate fluctuations on cash held | -721 | 66 | |
| Net cash and cash equivalents at the end of the period | 64,450 | 17,473 |
| European Union | South-East Europe | East Europe | Other | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| In € thousand | Jan–Sept 2018 |
Jan–Sept 2017 |
Jan–Sept 2018 |
Jan–Sept 2017 |
Jan–Sept 2018 |
Jan–Sept 2017 |
Jan–Sept 2018 |
Jan–Sept 2017 |
Jan–Sept 2018 |
Jan–Sept 2017 |
| Revenues | 549,691 | 534,402 | 52,390 | 42,923 | 278,886 | 276,812 | 35,040 | 33,285 | 916,007 | 887,422 |
| Other operating income | 1,423 | 4,024 | 34 | 32 | 638 | 342 | 0 | 0 | 2,095 | 4,398 |
| Operating expenses | -466,401 | -458,083 | -36,172 | -32,514 | -238,333 | -236,010 | -23,060 | -21,622 | -763,966 | -748,229 |
| Operating profit | 84,713 | 80,343 | 16,252 | 10,441 | 41,191 | 41,144 | 11,980 | 11,663 | 154,136 | 143,591 |
| Interest income | 370 | 318 | 0 | 0 | 38 | 279 | 0 | 0 | 408 | 597 |
| Interest expenses | -213 | -739 | 0 | 0 | 0 | 0 | 0 | 0 | -213 | -739 |
| Net financial result | -382 | 826 | 689 | -59 | -17,695 | -19,619 | 285 | -125 | -17,103 | -18,977 |
| Income tax | -9,421 | -10,227 | -1,806 | -1,329 | -4,580 | -5,237 | -1,332 | -1,485 | -17,139 | -18,278 |
| Net profit | 74,910 | 70,942 | 15,135 | 9,053 | 18,916 | 16,288 | 10,933 | 10,053 | 119,894 | 106,336 |
| Investments | 51,956 | 61,983 | 0 | 0 | 0 | 0 | 0 | 0 | 51,956 | 61,983 |
| Depreciation | 42,182 | 39,788 | 1,406 | 1,258 | 13,828 | 14,783 | 436 | 277 | 57,852 | 56,106 |
| Amortisation | 2,450 | 2,565 | 234 | 206 | 1,243 | 1,328 | 156 | 160 | 4,083 | 4,259 |
| 30 Sept 2018 |
31 Dec 2017 |
30 Sept 2018 |
31 Dec 2017 |
30 Sept 2018 |
31 Dec 2017 |
30 Sept 2018 |
31 Dec 2017 |
30 Sept 2018 |
31 Dec 2017 |
|
| Total assets | 1,346,924 | 1,299,639 | 45,983 | 41,563 | 444,741 | 485,553 | 14,829 | 10,727 | 1,852,477 | 1,837,482 |
| Total liabilities | 224,998 | 227,306 | 9,927 | 9,530 | 85,492 | 89,939 | 18,360 | 17,382 | 338,777 | 344,157 |
| In € thousand | Jan–Sept 2018 | Jan–Sept 2017 | Index |
|---|---|---|---|
| Cost of goods and material | 268,124 | 284,941 | 94 |
| Cost of services | 251,623 | 249,553 | 101 |
| Employee benefit cost | 174,435 | 157,215 | 111 |
| Amortisation and depreciation | 61,935 | 60,365 | 103 |
| Inventory write-off and allowances | 9,398 | 4,344 | 216 |
| Receivables impairment and write-off | 365 | -44 | |
| Other operating expenses | 17,885 | 16,387 | 109 |
| Total costs | 783,765 | 772,761 | 101 |
| Change in the value of inventories of products and work in progress |
-19,799 | -24,532 | 81 |
| Total | 763,966 | 748,229 | 102 |
| In € thousand | Jan–Sept 2018 | Jan–Sept 2017 | Index |
|---|---|---|---|
| Gross wages and salaries and continued pay | 136,060 | 123,142 | 110 |
| Social security contributions | 10,508 | 8,256 | 127 |
| Pension insurance contributions | 17,287 | 16,045 | 108 |
| Post-employment benefits and other non-current employee benefits |
3,268 | 3,193 | 102 |
| Other employee benefits cost | 7,312 | 6,579 | 111 |
| Total employee benefit costs | 174,435 | 157,215 | 111 |
| In € thousand | Jan–Sept 2018 | Jan–Sept 2017 | Index |
|---|---|---|---|
| Grants and assistance for humanitarian and other purposes | 1,026 | 940 | 109 |
| Environmental protection expenses | 1,977 | 1,624 | 122 |
| Other taxes and levies | 13,038 | 11,188 | 117 |
| Loss on sale of property, plant and equipment and intangible assets |
262 | 840 | 31 |
| Other expenses | 1,582 | 1,795 | 88 |
| Total other operating expenses | 17,885 | 16,387 | 109 |
Other taxes and levies include taxes (claw-back, etc.) that have recently been introduced in several markets where Krka operates.
| In € thousand | Jan–Sept 2018 | Jan–Sept 2017 | Index |
|---|---|---|---|
| Interest income | 408 | 597 | 68 |
| Gains on disposal of available-for-sale financial assets | 0 | 2 | 0 |
| Financial instruments income | 3,553 | 9,474 | 38 |
| – realised income | 2,386 | 9,474 | 25 |
| – change in fair value | 1,167 | 0 | |
| Income from dividends and other shares of the profit | 2,245 | 1,027 | 219 |
| – dividends | 17 | 15 | 113 |
| – profits of subsidiaries | 2,228 | 1,012 | 220 |
| Total financial income | 6,206 | 11,100 | 56 |
| Net foreign exchange differences | -19,590 | -14,077 | 139 |
| Interest expenses | -213 | -739 | 29 |
| Financial instruments expenses | -2,278 | -14,111 | 16 |
| – incurred expenses | -2,278 | -25,820 | 9 |
| – change in fair value | 0 | 11,709 | 0 |
| Other financial expenses | -1,228 | -1,150 | 107 |
| Total financial expenses | -23,309 | -30,077 | 77 |
| Net financial result | -17,103 | -18,977 | 90 |
Income tax amounted to €16,896 thousand, or 12.3% of profit before tax. Together with deferred tax of €243 thousand, total income tax expenses in
Income tax €17,139 thousand
the income statement equalled €17,139 thousand. The effective tax rate was 12.5%.
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Land | 26,947 | 25,771 | 105 |
| Buildings | 252,094 | 265,027 | 95 |
| Equipment | 267,952 | 287,290 | 93 |
| Property, plant and equipment being acquired | 53,199 | 29,149 | 183 |
| Advances for property, plant and equipment | 2,029 | 4,104 | 49 |
| Total property, plant and equipment | 602,221 | 611,341 | 99 |
The value of property, plant and equipment represents 33% of the Company's balance sheet total. Please see the chapter 'Investments' in the
business report for details on Krka's major investments.
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Concessions, patents, licences and similar rights | 23,035 | 24,811 | 93 |
| Intangible assets being acquired | 4,016 | 3,488 | 115 |
| Total intangible assets | 27,051 | 28,299 | 96 |
Intangible assets comprise registration documentation for new pharmaceuticals and software.
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Non-current loans | 15,694 | 11,187 | 140 |
| – loans to subsidiaries | 4,326 | 1,950 | 222 |
| – loans to others | 11,368 | 9,237 | 123 |
| Current loans | 51,871 | 34,895 | 149 |
| – portion of non-current loan maturing next year | 2,802 | 3,765 | 74 |
| – loans to subsidiaries | 29,006 | 30,981 | 94 |
| – loans to others | 20,008 | 96 | 20,842 |
| – current interest receivable | 55 | 53 | 104 |
| Total loans | 67,565 | 46,082 | 147 |
Non-current loans constitute 23% of total loans.
Non-current loans to others include loans that the Company extends in accordance with its internal acts to its employees for the purchase or renovation of housing facilities.
Non-current loans to other entities comprise bank deposits with a maturity exceeding 90 days in total of €20,000 thousand.
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Non-current investments | 9,643 | 8,814 | 109 |
| – available-for-sale financial assets | 9,643 | 8,814 | 109 |
| Current investments including derivative financial instruments |
882 | 0 | |
| – derivative financial instruments | 882 | 0 | |
| Total investments | 10,525 | 8,814 | 119 |
Available-for-sale financial assets comprise shares and interests in companies in Slovenia in total of €807 thousand, and €8,836 thousand of investments in shares and interests in companies abroad.
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Material | 122,452 | 111,925 | 109 |
| Work in progress | 84,043 | 76,063 | 110 |
| Products | 67,380 | 63,533 | 106 |
| Merchandise | 9,248 | 9,811 | 94 |
| Advances for inventories | 3,152 | 2,842 | 111 |
| Total inventories | 286,275 | 264,174 | 108 |
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Current trade receivables | 405,942 | 456,265 | 89 |
| – current trade receivables from subsidiaries | 218,116 | 265,168 | 82 |
| – current trade receivables from customers other than subsidiaries |
187,826 | 191,097 | 98 |
| Other current receivables | 15,221 | 15,395 | 99 |
| Total receivables | 421,163 | 471,660 | 89 |
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Cash on hand | 1 | 1 | 100 |
| Bank balances | 64,449 | 34,116 | 189 |
| Total cash and cash equivalents | 64,450 | 34,117 | 189 |
Bank balances comprise also bank deposits with a maturity up to 30 days in total of €13,373 thousand.
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Share capital | 54,732 | 54,732 | 100 |
| Treasury shares | -47,975 | -40,588 | 118 |
| Reserves: | 188,832 | 180,779 | 104 |
| – reserves for treasury shares | 47,975 | 40,588 | 118 |
| – share premium | 105,897 | 105,897 | 100 |
| – legal reserves | 14,990 | 14,990 | 100 |
| – statutory reserves | 30,000 | 30,000 | 100 |
| – fair value reserves | -10,030 | -10,696 | 94 |
| Retained earnings | 1,318,111 | 1,298,402 | 102 |
| Total equity | 1,513,700 | 1,493,325 | 101 |
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Current borrowings | 28,476 | 27,525 | 103 |
| – borrowings from subsidiaries | 28,435 | 27,455 | 104 |
| – current interest payable | 41 | 70 | 59 |
| Total borrowings | 28,476 | 27,525 | 103 |
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Provisions for lawsuits | 4,000 | 4,000 | 100 |
| Provisions for post-employment benefits and other non-current employee benefits |
83,393 | 81,503 | 102 |
| Total provisions | 87,393 | 85,503 | 102 |
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| The project Production of pharmaceuticals in the new Notol 2 | |||
| plant is partly funded by the European Regional Development | 1,917 | 2,117 | 91 |
| Fund and budget of the Republic of Slovenia. | |||
| Grants from the European Regional Development Fund for | |||
| developing new technologies (a FBD project) | 174 | 242 | 72 |
| Grants from the European Regional Development Fund for | 6 | 10 | 60 |
| setting up information and technology solutions system GEN-I | |||
| Subsidy for acquisition of electric vehicles | 6 | 7 | 86 |
| Property, plant and equipment received for free | 19 | 23 | 83 |
| Emission coupons | 1 | 9 | 11 |
| Total deferred revenues | 2,123 | 2,408 | 88 |
The FBD project is partly funded by the European Union (European Regional Development Fund). It is carried out within the framework of the Operational programme for strengthening regional development potentials for the period 2007–2013; Priority axis 1: Competitiveness and Research Excellence: main type of activity 1.1: Improvement of competitiveness and research excellence.
Trade payables €151,537 thousand
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Payables to subsidiaries | 73,806 | 80,358 | 92 |
| Payables to domestic suppliers | 42,272 | 37,900 | 112 |
| Payables to foreign suppliers | 34,269 | 37,967 | 90 |
| Payables from advances | 1,190 | 2,894 | 41 |
| Total trade payables | 151,537 | 159,119 | 95 |
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Accrued contractual discounts on products sold | 15,800 | 17,967 | 88 |
| Payables to employees – gross salaries, other receipts and charges |
31,598 | 29,605 | 107 |
| Derivative financial instruments | 0 | 284 | 0 |
| Other | 17,547 | 6,619 | 265 |
| Total other current liabilities | 64,945 | 54,475 | 119 |
| In € thousand | 30 Sept 2018 | 31 Dec 2017 | Index |
|---|---|---|---|
| Guarantees issued | 16,507 | 15,722 | 105 |
| Other | 620 | 620 | 100 |
| Total contingent liabilities | 17,127 | 16,342 | 105 |
| 30 Sept 2018 | 31 Dec 2017 | ||||
|---|---|---|---|---|---|
| Carrying | Carrying | ||||
| In € thousand | amount | Fair value | amount | Fair value | |
| Trade receivables from subsidiaries | 35,685 | 35,685 | 38,644 | 38,644 | |
| Non-current loans | 15,694 | 15,694 | 11,187 | 11,187 | |
| Available-for-sale financial assets | 9,643 | 9,643 | 8,814 | 8,814 | |
| Current loans | 51,871 | 51,871 | 34,895 | 34,895 | |
| Current investments | 882 | 882 | 0 | 0 | |
| – derivative financial instruments | 882 | 882 | 0 | 0 | |
| Trade receivables | 405,942 | 405,942 | 456,265 | 456,265 | |
| Cash and cash equivalents | 64,450 | 64,450 | 34,117 | 34,117 | |
| Current borrowings | -28,476 | -28,476 | -27,525 | -27,525 | |
| Trade payables and other liabilities excluding amounts owed to the state, to employees and advances |
-178,526 | -178,526 | -175,620 | -175,620 | |
| Other current liabilities | 0 | 0 | -284 | -284 | |
| – derivative financial instruments | 0 | 0 | -284 | -284 | |
| Total | 377,165 | 377,165 | 380,493 | 380,493 |
In terms of fair value, investments are classified into three levels:
The fair value of securities held for trading is computed on the basis of the stock exchange quotation of the respective securities as at reporting date, and it is not decreased by any costs that may arise upon the sale or purchase of securities.
| 30 Sept 2018 | 31 Dec 2017 | |||||||
|---|---|---|---|---|---|---|---|---|
| In € thousand | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total |
| Assets at fair value | ||||||||
| Available-for-sale financial assets | 8,256 | 0 | 1,387 | 9,643 | 7,434 | 0 | 1,380 | 8,814 |
| Derivative financial instruments | 0 | 0 | 882 | 882 | 0 | 0 | 0 | 0 |
| Total assets at fair value | 8,256 | 0 | 2,269 | 10,525 | 7,434 | 0 | 1,380 | 8,814 |
| Assets for which fair value is disclosed |
||||||||
| Trade receivables from subsidiaries | 0 | 0 | 35,685 | 35,685 | 0 | 0 | 38,644 | 38,644 |
| Non-current loans | 0 | 0 | 15,694 | 15,694 | 0 | 0 | 11,187 | 11,187 |
| Current loans | 0 | 0 | 51,871 | 51,871 | 0 | 0 | 34,895 | 34,895 |
| Trade receivables | 0 | 0 | 405,942 | 405,942 | 0 | 0 | 456,265 | 456,265 |
| Cash and cash equivalents | 0 | 0 | 64,450 | 64,450 | 0 | 0 | 34,117 | 34,117 |
| Total assets for which fair value is disclosed |
0 | 0 | 573,642 | 573,642 | 0 | 0 | 575,108 | 575,108 |
| Total | 8,256 | 0 | 575,911 | 584,167 | 7,434 | 0 | 576,488 | 583,922 |
| 30 Sept 2018 | 31 Dec 2017 | |||||||
|---|---|---|---|---|---|---|---|---|
| In € thousand | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total |
| Liabilities at fair value | ||||||||
| Derivative financial instruments | 0 | 0 | 0 | 0 | 0 | 0 | 284 | 284 |
| Total liabilities at fair value | 0 | 0 | 0 | 0 | 0 | 0 | 284 | 284 |
| Liabilities for which fair value is disclosed |
||||||||
| Current borrowings | 0 | 0 | 28,476 | 28,476 | 0 | 0 | 27,525 | 27,525 |
| Trade payables and other liabilities excluding amounts owed to the state, to employees and advances |
0 | 0 | 178,526 | 178,526 | 0 | 0 | 175,620 | 175,620 |
| Total liabilities for which fair value is disclosed |
0 | 0 | 207,002 | 207,002 | 0 | 0 | 203,145 | 203,145 |
| Total | 0 | 0 | 207,002 | 207,002 | 0 | 0 | 203,429 | 203,429 |
The Management Board of Krka, d. d., Novo mesto hereby states that the condensed financial statements of Krka and the condensed consolidated financial statements of the Krka Group for the nine months ended 30 September 2018 were drawn up so as to provide a true and fair view of the financial standing and operating results of Krka and the Krka Group. The condensed statements for the period January–September 2018 were drawn up using the same accounting principles as for the annual financial statements of Krka and the Krka Group for 2017.
The condensed financial statements for the period that ended on 30 September 2018 were drawn up pursuant to IAS 34 – Interim Financial Reporting,
Novo mesto, 7 November 2018
and must be read in conjunction with the annual financial statements drawn up for the business year that ended on 31 December 2017.
The Management Board is responsible for implementing measures to maintain the value of Krka and the Krka Group assets, and to prevent and detect frauds or other forms of misconduct.
The Management Board states that all transactions between the Krka Group subsidiaries were executed according to the concluded purchase contracts, using market prices for products and services. No significant business transactions were concluded with any other related parties.
Jože Colarič President of the Management Board and CEO
Dr Aleš Rotar Member of the Management Board
Dr Vinko Zupančič Member of the Management Board
David Bratož Member of the Management Board
Milena Kastelic Member of the Management Board – Worker Director
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