Quarterly Report • Nov 16, 2017
Quarterly Report
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Unaudited Interim Report for the Krka Group and the Krka Company for January–September 2017
Novo mesto, November 2017
| INTRODUCTION | 3 |
|---|---|
| Operational highlights January–September 2017 |
3 |
| Krka Group and Krka Company financial highlights | 4 |
| Krka Group ID card |
5 |
| Krka Group business model | 5 |
| Krka Group companies |
6 |
| Krka Group development strategy | 7 |
| BUSINESS REPORT |
9 |
| Financial risks |
9 |
| Investor and share information | 10 |
| Business operations analysis | 12 |
| Marketing and sales |
14 |
| Research and development |
25 |
| Investments | 28 |
| Employees |
30 |
| CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE KRKA GROUP, WITH NOTES |
31 |
| Consolidated statement of financial position of the Krka Group | 31 |
| Consolidated income statement of the Krka Group | 32 |
| Consolidated statement of other comprehensive income of the Krka Group |
33 |
| Consolidated statement of changes in equity of the Krka Group |
34 |
| Consolidated statement of cash flows of the Krka Group | 36 |
| Segment reporting of the Krka Group |
37 |
| Notes to the consolidated financial statements of the Krka Group | 38 |
| CONDENSED FINANCIAL STATEMENTS OF KRKA, D. D., NOVO MESTO, WITH NOTES |
45 |
| Statement of financial position of Krka, d. d., Novo mesto | 45 |
| Income statement of Krka, d. d., Novo mesto |
46 |
| Statement of comprehensive income of Krka, d. d., Novo mesto | 46 |
| Statement of changes in equity of Krka, d. d., Novo mesto |
47 |
| Statement of cash flows of Krka, d. d., Novo mesto | 49 |
| Segment reporting of Krka, d. d., Novo mesto |
50 |
| Notes to the financial statements of Krka, d. d., Novo mesto | 51 |
| MANAGEMENT BOARD STATEMENT OF RESPONSIBILITIES | 58 |
The condensed consolidated financial statements of the Krka Group and the condensed financial statements of Krka, d. d., Novo mesto (Krka Company) for January–September 2017 and for January–September 2016 are unaudited, while the statements for the full 2016 business year present audited figures. The Krka Company has no authorised capital and has not made a conditional share capital increase.
The Krka 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. Interim reports for the Krka Group and the Krka Company are available on the Krka website www.krka.si.
The Krka Company Supervisory Board discussed the January–September 2017 unaudited report for the Krka Group and the Krka Company at its regular meeting on 15 November 2017.
€143.6 million of operating profit.
| Krka Group | Krka Company | |||||||
|---|---|---|---|---|---|---|---|---|
| In € thousand | 1–9/2017 | 1–9/2016 | 2016 | 1–9/2017 | 1–9/2016 | 2016 | ||
| Revenues | 928,251 | 852,385 | 1,174,424 | 887,422 | 782,538 | 1,071,709 | ||
| EBIT1 | 149,223 | 99,674 | 122,435 | 143,591 | 75,307 | 98,920 | ||
| EBITDA | 228,957 | 178,824 | 228,238 | 203,956 | 136,757 | 180,685 | ||
| Net profit | 110,051 | 80,316 | 108,456 | 106,336 | 72,412 | 102,872 | ||
| R&D expenses | 92,877 | 85,300 | 117,994 | 96,377 | 89,385 | 122,874 | ||
| Investments | 75,241 | 88,516 | 131,817 | 61,983 | 45,939 | 80,663 | ||
| 30 Sep 2017 | 31 Dec 2016 | 30 Sep 2017 | 31 Dec 2016 | |||||
| Non-current assets | 1,034,163 | 1,038,067 | 1,037,402 | 1,024,176 | ||||
| Current assets | 848,632 | 873,451 | 765,525 | 813,527 | ||||
| Equity | 1,449,658 | 1,444,444 | 1,449,407 | 1,440,448 | ||||
| Non-current liabilities | 116,445 | 115,313 | 83,116 | 81,691 | ||||
| Current liabilities | 316,692 | 351,761 | 270,404 | 315,564 | ||||
| RATIOS | 1–9/2017 | 1–9/2016 | 2016 | 1–9/2017 | 1–9/2016 | 2016 | ||
| EBIT margin | 16.1% | 11.7% | 10.4% | 16.2% | 9.6% | 9.2% | ||
| EBITDA margin | 24.7% | 21.0% | 19.4% | 23.0% | 17.5% | 16.9% | ||
| Profit margin (ROS) | 11.9% | 9.4% | 9.2% | 12.0% | 9.3% | 9.6% | ||
| ROE2 | 10.1% | 7.6% | 7.6% | 9.8% | 6.8% | 7.2% | ||
| ROA3 | 7.7% | 5.9% | 5.8% | 7.8% | 5.5% | 5.7% | ||
| Liabilities/Equity | 0.299 | 0.289 | 0.323 | 0.244 | 0.236 | 0.276 | ||
| R&D expenses/Revenues | 10.0% | 10.0% | 10.0% | 10.9% | 11.4% | 11.5% | ||
| NUMBER OF EMPLOYEES | 30 Sep 2017 | 31 Dec 2016 | 30 Sep 2017 | 31 Dec 2016 | ||||
| As at | 10,733 | 10,889 | 4,895 | 4,889 | ||||
| SHARE INFORMATION Total number of shares issued |
1–9/2017 32,793,448 |
1–9/2016 32,793,448 |
||||||
| Earnings per share in €4 | 4.55 | 3.30 | ||||||
| Closing price at end of period in EUR5 | 55.20 | 61.90 | ||||||
| Price/Earnings ratio (P/E) | 12.13 | 18.75 | ||||||
| Book value in €6 | 44.21 | 43.04 | ||||||
| Price/Book ratio (P/B) | 1.25 | 1.44 |
1Difference 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 Group, annualised/Average number of shares issued in the period exclusive of treasury shares
Market capitalisation in € thousand (end of period) 1,810,198 2,029,914
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
Registered office Šmarješka cesta 6, 8501 Novo mesto, Slovenia Telephone ++386 7 331 21 11 Fax ++386 7 332 15 37 E-mail [email protected] Website www.krka.si Core business Production of pharmaceutical preparations Business clarification code 21.200 Year established 1954 Registration entry 1/00097/00, District Court of Novo mesto, Slovenia Tax number 82646716 VAT number SI82646716 Company ID number 5043611 Share capital €54,732,264.71 Number of issued shares 32,793,448 ordinary registered no-par value shares with the symbol KRKG. Shares have been listed on the Ljubljana Stock Exchange under symbol KRKG since 1997, and since April 2012
additionally on the Warsaw Stock Exchange under symbol KRK.
Krka is one of the world's leading generic pharmaceutical companies with more than 60 years of experience in the industry.
Krka has a strong presence in the generic pharmaceutical markets of Eastern, Central and South-Eastern Europe, having had strong visibility in Western European markets for several years as well. It is the leading supplier of medicines in its domestic market. It has been increasingly strengthening its presence in the overseas markets, aiming to better exploit the sales potential of the Middle East, the Far East, Africa and the Americas, with special emphasis on China. Its production facilities are in Slovenia, the Russian Federation, Poland, Croatia and Germany.
Advanced pharmaceutical production and the vertically integrated business model allow us to provide customers in more than 70 countries with a wide range of high-quality, safe and effective prescription pharmaceuticals, non-prescription products and animal health products. Krka's product range primarily consists of solid dosage pharmaceutical forms. The product assortment is supplemented by the health resort and tourist services of Terme Krka.
We focus on generic prescription pharmaceuticals marketed under Krka's brands. We offer a number of medicinal products for the treatment of diseases from key therapeutic areas, i.e. for cardiovascular diseases, diseases of the central nervous system, and diseases of the alimentary tract and metabolism), while entering the perspective therapeutic areas (analgesics and oncology medications, antidiabetics, anti-virus medicines, and antibiotics).
We have been expanding our marketing and sales network, and thereby gaining market shares, by establishing Krka subsidiaries and acquiring companies in selected markets. Our objective is to strengthen the market position of the Krka Group in European and Central Asian markets, and to enter new high-potential markets.
Wishing to increase the competitive advantage of Krka's product range, we have been allocating a large proportion of revenues to research and development. There are currently more than 170 new products in the pipeline. A large proportion of our revenues are generated by the sales of new products launched on different markets in the past five years.
The controlling company, Krka, d. d., Novo mesto, holds 100% ownership stakes in all of the above subsidiaries apart from Farma GRS (99.7%) and Krka Belgium (95%); the remaining 5% in the latter is held by the subsidiary Krka France.
The Krka Group updates its development strategy on a bi-annual basis. In November 2017 the Krka Company Management Board adopted the Group's development strategy for the period 2018–2022, and presented it to the Supervisory Board.
We measure how well our strategic objectives are being realised against benchmarks, which are set at the level of the Krka Group, at the level of product groups and at the level of business functions. Performance at the level of the Group is monitored
by the Management Board, with performance at the level of product and service groups as well as business functions being monitored by the relevant committees. The key principle in managing performance criteria is increasing competitiveness of the entire Group and of each company individually.
The key Krka Group objectives and strategies to 2022 are set out below.
targets. The primary objectives are to gain new products and/or new markets.
alimentary tract and metabolism) and in other prospective areas (analgesics and oncology medicines, antidiabetics, anti-virus medicines and antibiotics) while also entering new areas at the same time. In key therapeutic areas we will also introduce innovative products (innovative fixed combinations of two or three substances, strengths, pharmaceutical forms and new delivery systems).
acquisitions and entering into various kinds of long-term business combinations (joint ventures) in selected markets with the primary objective to gain new products and with that new therapeutic areas and/or new markets.
market, Germany. Regions South-East Europe, Slovenia and Overseas Markets will follow.
Due to Krka's widespread international operations, the Group is exposed to foreign exchange risk in certain sales markets.
Foreign exchange risk management activities remained unchanged in the third quarter. Currency risk is primarily eliminated using natural hedges, and derivatives are used to secure our exposure in the Russian roubles.
The rouble, which represents Krka's key exposure in terms of currency risk, was volatile during the first nine months. Three factors were crucial: the movement of the EUR/USD exchange rate, oil price movements, and macroeconomic conditions in the Russian Federation.
The rouble's value appreciated against the euro by mid-April, when it was the euro that started appreciating against both the rouble and the dollar. The euro's appreciation was triggered by presidential elections in France and the related decrease in political risk associated with the eurozone. This was amid forming expectations that in the autumn the European Central Bank would publish its gradually abandoning the expansionary monetary policy.
In comparison with previous years, the correlation between the rouble's value and oil prices decreased slightly. However, the major volatility of oil prices, which ranged between \$44–58 a barrel this year, additionally fuelled the rouble's volatility.
Macroeconomic conditions in the Russian Federation are gradually improving. Due to the rapidly lowering inflation, the Central Bank of the Russian Federation dropped the key interest rate by 1.5 percentage points this year, thereby indirectly preventing the rouble's value from rising. As at 30 September 2017 the rouble's value in euro was 5.8% lower than at the beginning of the year.
In the first nine months Krka hedged part of its exposure in roubles with forward contracts. Exposures in other currencies are being eliminated exclusively using natural hedges, without derivatives.
The overall net financial result – taking into account net foreign exchange differences for all currencies, which amounted to €–14.3 million, derivatives income and expenses, which amounted to €–4.6 million, interest income and expenses and other financial income and expenses, which amounted to €–1.0 million – totalled €–20.0 million for the nine months to September.
The Krka Group had no long-term borrowings in the nine months to September and was therefore not exposed to the risk of changing reference interest rates.
Key credit risk of the Krka Group is associated with trade receivables. The centralised credit control process at Group level includes all customers to which Krka sells more than €100,000 worth of products and services per year. There were more than 400 such customers at the end of the third quarter of 2017, representing more than 95% of the Group's trade receivables.
Our credit risk management policy remained unchanged in the nine months to September – we continued with the close monitoring and insuring of trade receivables from markets with a poor macroeconomic environment and markets in which we are detecting increased risks associated with the distribution of medicines.
Over a half of the Group's total trade receivables have credit insurance coverage, while only a minor
segment was secured for payment using banking instruments.
Our portfolio of trade receivables witnessed no negative trends this year. Individual customers whose payments are running late receive special treatment in terms of payment dynamics and new
In the nine months to September, risks related to Krka Group's liquidity were managed by effective short-term cash flow planning. Short-term liquidity was ensured by means of a stable cash flow, 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 their bank accounts, subsidiaries were regularly provided with the required cash. By the end of September, cash pooling was introduced to eight subsidiaries via Citibank.
dispatches. We normally arrange insurance for customers posing a greater risk.
Since relevant value adjustments for receivables had been made in previous periods, we are not expecting negative effects on the Group's financial result in this respect.
Liquidity risk is estimated as low. The volume of short-term borrowings in the reported period was low. Cash inflows had exceeded cash outflows for several months, therefore we placed some surplus cash into short-term bank deposits. They were spent on dividend payments in the second half of July, and we also arranged a short-term borrowing for this purpose. By the end of the third quarter, all short-term borrowings had been repaid. All our liabilities have been settled regularly and on time.
Striving to optimise insurance deals and after assessing tenders, Krka has entered into new insurance arrangements. Even with the value of insured assets increasing, the total insurance premium has decreased. All Group companies have insurance policies at the local level, which provides them with optimum property protection and protects them from claims for damages.
The controlling company took out liability insurance for the management again, and provided insurance coverage for investment projects. After having analysed car insurance in the Group, we terminated comprehensive insurance in selected countries.
In the first nine months of 2017 the price of Krka's share on the Ljubljana Stock Exchange rose by 4%. The proportion of treasury shares increased the most in this period and the holdings of international investors were also slightly up, with Slovenian companies and individuals having decreased their stakes. At the end of September 2017 Krka had a total of 52,456 shareholders.
| 30 Sep 2017 | 31 Dec 2016 | |
|---|---|---|
| Individual Slovenian investors | 39.3 | 39.7 |
| Slovenian Sovereign Holding (Slovenski državni holding) | 16.2 | 16.2 |
| KAD fund and PPS | 11.0 | 11.0 |
| Slovenian companies and funds | 8.0 | 8.1 |
| International investors | 23.6 | 23.5 |
| Treasury shares | 1.9 | 1.5 |
| Total | 100.0 | 100.0 |
In the first nine months of 2017 Krka repurchased 143,431 treasury shares worth a total of €7,890,688.
As at 30 September 2017 Krka held 636,471 treasury shares, which represents 1.941% of its share capital.
| Krka's ten largest shareholders as at 30 September 2017 | ||
|---|---|---|
| --------------------------------------------------------- | -- | -- |
| No. of | Share in | Share of | ||
|---|---|---|---|---|
| Country | shares | equity (%) | voting rights (%) | |
| SLOVENSKI DRŽAVNI HOLDING, D. D. | Slovenia | 5,312,070 | 16.20 | 16.48 |
| KAPITALSKA DRUŽBA, D. D. | Slovenia | 3,493,030 | 10.65 | 10.84 |
| SPLITSKA BANKA D. D. | Croatia | 1,804,603 | 5.50 | 5.60 |
| ADDIKO BANK D. D. | Croatia | 1,219,433 | 3.72 | 3.78 |
| KDPW | Poland | 466,289 | 1.42 | 1.45 |
| LUKA KOPER, D. D. | Slovenia | 433,970 | 1.32 | 1.35 |
| UNICREDIT BANK AUSTRIA AG | Austria | 416,858 | 1.27 | 1.29 |
| CLEARSTREAM BANKING SA | Luxembourg | 403,790 | 1.23 | 1.25 |
| ZAVAROVALNICA TRIGLAV, D. D. | Slovenia | 388,300 | 1.18 | 1.20 |
| SMALLCAP WORLD FUND INC. | USA | 335,262 | 1.02 | 1.04 |
| Total | 14,273,605 | 43.53 | 44.28 |
Krka's ten largest shareholders held 14,273,605 shares as at 30 September 2017, which is 43.53% of all issued shares and represents 44.28% of voting rights.
As at the same day, members of the Krka Management Board and Supervisory Board held a total of 39,170 Krka shares, which is 0.12% of all issued shares. Their shareholdings had not changed since the end of 2016.
Shares in equity and shares of voting rights held by members of the Krka Management Board and Supervisory Board as at 30 September 2017
| No. of | Share in | Share of | |
|---|---|---|---|
| shares | equity (%) | voting rights (%) | |
| Management Board members | |||
| 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 Management Board | 37,040 | 0.113 | 0.115 |
| Supervisory Board members | |||
| 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 Supervisory Board | 2,130 | 0.006 | 0.007 |
In the nine months to September Krka's share price on the Ljubljana Stock Exchange peaked at €58.00 at the end of August and reached its low at the end of February, when it stood at €50.75. The closing price of Krka's share as at 30 September 2017 was €55.20.
Krka's market capitalisation on the Ljubljana Stock Exchange as at 30 September 2017 totalled €1.8 billion. Deals in Krka's share generated an average daily trading volume of €0.6 million over the period. Since April 2012 Krka's shares have also been listed on the Warsaw Stock Exchange.
The business operations analysis includes data for the Krka Group and the Krka Company, whereas the comments relate primarily to the Group.
Compared to the same period last year, Krka's sales revenues at Group level increased by 9%. The Company sold €887.4 million worth of prescription pharmaceuticals, non-prescription products and animal health products, while the Group generated €928.3 million of sales revenues from these products plus the health resort and tourist services. The Group generated 93% of its sales in markets outside Slovenia.
Taking into account other operating and financial income, the Group generated a total of €946.3 million of revenues, of which the Company generated €902.9 million.
A more detailed analysis of sales results by individual markets, and groups of products and
services is given in the chapter Marketing and Sales below.
Total Krka Group expenses amounted to €817.1 million, which is at the level of the same period last year.
The Group incurred €787.2 million of operating expenses, a 4% year-on-year increase, among which the costs of goods sold were €398.5 million, selling and distribution expenses €237.5 million, R&D expenses €92.9 million, and general and administrative expenses €58.3 million.
At the end of September 2017 Krka Group assets totalled €1,882.8 million, a decrease by 2% compared to the end of 2016.
Non-current assets represented 54.9% of total assets, up 0.6 of a percentage point from the beginning of the year. The largest item under noncurrent assets, which totalled €1,034.2 million, was property, plant and equipment. It amounted to €866.1 million, remaining on a similar level as at the end of 2016 and representing 46.0% of the Group's total assets.
Totalling €1,449.7 million, Krka Group equity was at the year-end 2016 level, representing 77.0% of total equity and liabilities.
Amounting to €116.4 million, non-current liabilities represented 6.2% of the Group's total assets.
The Group costs of goods sold increased by 1% and represented 42.9% of total sales. Selling and distribution expenses increased by 7% and represented 25.6% of total sales. R&D expenses increased by 9% and represented 10.0% of total sales. R&D expenses are recognised as expenses for the period in full as the Group does not capitalise them. General and administrative expenses increased by 1% and represented 6.3% of total sales.
The Krka Group recorded €149.2 million of operating profit, up by half compared to the same period last year.
Group profit before tax amounted to €129.2 million, a 46% year-on-year increase. Income tax totalled €19.2 million, and the effective tax rate was 14.9%.
The Group recorded €110.1 million of net profit, an increase by 37% compared to the same period last year.
Intangible assets amounted to €110.6 million, down 3% from the end of 2016.
Current assets were down 3% in the first nine months of 2017, to €848.6 million. In the same period inventories increased by 9% to €304.8 million, and receivables decreased by 6% to €512.0 million (of which trade receivables amounted to €485.3 million, down 5% from the end of 2016).
Provisions, which amounted to €93.0 million at the end of the period (of which €91.9 million were provisions for post-employment benefits and other non-current employee benefits), increased by 2% from the year-end of 2016.
Current liabilities were down one tenth from the end of 2016 and totalled €316.7 million, which is 16.8% of total assets. Among current liabilities, trade
payables amounted to €124.0 million, down 3% from the year-end of 2016, with other current liabilities down one fifth to €178.3 million.
All performance ratios for the first nine months of 2017 improved compared to those for the same period in 2016.
The Krka Group profit margin for the period January–September 2017 was 11.9% (Krka Company 12.0%), its EBIT margin 16.1% (Krka Company 16.2%) and its EBITDA margin 24.7% (Krka Company 23.0%).
Annualised ROE at the level of the Group was 10.1% (Krka Company 9.8%), with annualised ROA at 7.7% (Krka Company 7.8%).
The Krka Group sold €928.3 million worth of products and services in the nine months to September 2017, up €75.9 million or 9% compared to the same period last year. Sales in markets outside Slovenia totalled €861.6 million, which
The most sales, €271.4 million, which is 29.2% of total Group sales, were recorded in Region East Europe. The second best result was recorded in Region Central Europe, where sales amounted to €226.0 million and represented 24.4% of total sales.
The third largest area in terms of sales in the reported period was Region West Europe, where Krka sold €217.7 million worth of products, which is 23.5% of overall Krka Group sales. In Region represents 93% of the Group's total sales. Sales volume increased by 1.5% compared last year's nine-month period. Krka Company sales in the reported period totalled €887.4 million, an increase by 13%.
South-East Europe product sales amounted to €116.3 million, which represents 12.5% of Krka Group sales. Sales in the domestic market totalled €66.7 million, which is 7.2% of total sales, while in the Overseas Markets they amounted to €30.1 million, which is 3.2% of Group sales.
Sales increased in all sales regions, whereby growth was the highest, 18%, in Region East Europe.
| Krka Group | Krka Company | |||||||
|---|---|---|---|---|---|---|---|---|
| In € thousand | 1–9/2017 | 1–9/2016 | Index | 1–9/2017 | 1–9/2016 | Index | ||
| Slovenia | 66,652 | 63,895 | 104 | 40,605 | 39,814 | 102 | ||
| South-East Europe | 116,258 | 111,470 | 104 | 116,343 | 116,043 | 100 | ||
| East Europe | 271,434 | 229,996 | 118 | 276,812 | 210,094 | 132 | ||
| Central Europe | 226,043 | 209,074 | 108 | 228,688 | 211,654 | 108 | ||
| West Europe | 217,720 | 211,036 | 103 | 197,446 | 180,351 | 109 | ||
| Overseas Markets | 30,144 | 26,914 | 112 | 27,528 | 24,582 | 112 | ||
| Total | 928,251 | 852,385 | 109 | 887,422 | 782,538 | 113 |
In Slovenia, a key market, we sold €66.7 million worth of products and services. This is an increase by 4% compared to the same period last year. The bulk came from prescription pharmaceuticals, which generated €29.4 million of sales, a 2% year-on-year increase. Non-prescription product sales totalled €6.7 million, up 6% compared to the same period last year. Animal health product sales increased by almost a quarter and totalled €1.7 million. Product sales amounted to €37.8 million, up 3% compared to the same period last year. Health resort and tourist service sales were €27.2 million, up 8%. With a 9% market share, Krka has remained the leading pharmaceutical company in Slovenia.
The majority of Krka's best-selling products are prescription pharmaceuticals. Sales leader Prenessa (perindopril) and its combination with a diuretic Prenewel were followed by Doreta (tramadol and paracetamol), Sorvasta (rosuvastatin), Nolpaza (pantoprazole), and Amlessa (perindopril and amlodipine) together with the combination with a diuretic Amlewel. Among non-prescription products, the best sales results were recorded for Nalgesin S (naproxen), Septolete and Septabene (benzydamine and cetylpyridinium), and Daleron (paracetamol). Our most successful veterinary products were Amatib (amoxicillin), Grovit and Fypryst (fipronil).
Marketing and sales activities focused on the leading products from Krka's key therapeutic groups. As to pharmaceuticals treating cardiovascular diseases, they included the bloodpressure control medications Prenessa (perindopril) and Amlessa (perindopril and amlodipine), both in fixed-dose combinations with a diuretic, i.e. Prenewel and Amlewel, and the cholesterol lowering medication Sorvasta (rosuvastatin). As to the group of medicines for the central nervous system, focus was placed on the antidepressant Dulsevia (duloxetine), antipsychotic Aryzalera (aripiprazole)
and analgesic Doreta (tramadol and paracetamol). We should also highlighting medicinal products for the alimentary tract and metabolism, the key members of which are Nolpaza (pantoprazole) and Emozul (esomeprazole), medicines controlling stomach acid, and the antidiabetic Gliklada (gliclazide). Gliklada tablets were completed with a new strength. Other novelties in our product range include the selective non-steroidal antirheumatic Roticox (etoricoxib), Dortilla (dutasteride), intended to ease the symptoms of benign prostatic hyperplasia, and the antihypertensive Telassmo (telmisartan and a diuretic).
Sales in Region South-East Europe were €116.3 million, up 4% compared to the same period last year. Having accounted for 85% of sales, prescription pharmaceuticals were again at the forefront. Sales were mainly driven by Serbia, Croatia, Macedonia and Bulgaria. Lower sales were recorded in Romania, Bosnia and Herzegovina, and Kosovo.
In Romania, Krka's key and largest regional market, year-on-year sales decreased by 4% and totalled €37.3 million. This ranks Krka the number two among a competition of predominantly foreign generic pharmaceutical companies in the market. The bulk of sales came from prescription pharmaceuticals, in particular Atoris (atorvastatin), Prenessa (perindopril) and the combination with a diuretic Co-Prenessa, Roswera (rosuvastatin), Tramadol (tramadol), Amlessa (perindopril and amlodipine) and the combination with a diuretic Co-Amlessa, Karbis (candesartan) and Doreta (tramadol and paracetamol). The leading product available without prescription was Bilobil (ginkgo biloba), while special attention was devoted to the marketing of cold and flu products, particularly Septolete omni (benzydamine and cetylpyridinium), Herbion and analgesics. As to veterinary products, the biggest sales success was medicines protecting companion animals from parasites, particularly Fypryst (fipronil) and Ataxxa (permethrin and imidacloprid). Products for the treatment of farm animals, Enroxil (enrofloxacin) and Floron (florfenicol), also made a notable sales contribution.
Sales in Croatia, the second largest regional market, were €23.2 million, up 11% compared to the same period last year. This preserved Krka's position as the fourth-ranked generic pharmaceutical company in the country and the As to products available without prescription, we focused on accelerating sales for Nalgesin S (naproxen) and Bilobil (ginkgo biloba), and for the new product Magnezij Krka 300. As to veterinary products, special attention was devoted to marketing Ataxxa (permethrin and imidacloprid), Fypryst Combo (fipronil and S-methoprene), Milprazon (milbemycin and praziquantel) and Dehinel (febantel, pyrantel embonate and praziquantel).
second-ranked provider of animal health pharmaceuticals. All product groups contributed to sales growth, with the main sales driver being prescription pharmaceuticals, among which the leaders were Perineva (perindopril) and its combination with a diuretic Co-Perineva, and Dalneva (perindopril and amlodipine). They were followed by Atoris (atorvastatin), Helex (alprazolam), Valsacor (valsartan) and the combination with a diuretic Valsacombi, Roswera (rosuvastatin), and Emanera (esomeprazole). The best-selling nonprescription products were Nalgesin (naproxen) and the oral antiseptic Septolete duo (benzydamine and cetylpyridinium). The animal health products at the forefront were Fypryst (fipronil) and Enroxil (enrofloxacin).
Nine-month sales in Serbia exceeded last year's sales in the same period by 31%, amounting to €12.3 million. The main sales drivers were prescription pharmaceuticals, particularly Nolpaza (pantoprazole), Roxera (rosuvastatin), Valsacor (valsartan) and its combination with a diuretic Valsacombi, Atoris (atorvastatin), and Ampril (ramipril) together with its combination with a diuretic. As to non-prescription products, sales were mainly driven by Nalgesin (naproxen), Bilobil (ginkgo biloba) and Septolete total (benzydamine and cetylpyridinium), while the best-selling animal health products were Fypryst (fipronil) and Enroxil (enrofloxacin).
In Bosnia and Herzegovina sales totalled €11.5 million. This is a 12% year-on-year decrease, attributable in particular to the protection of domestic pharmaceutical companies by limiting the admission of foreign generic medicines on reimbursement lists. The bulk of sales were generated in prescription pharmaceuticals, among
them Enap (enalapril) and the combination with a diuretic, Roswera (rosuvastatin), Naklofen (diclofenac), Lorista (losartan) and the combination with a diuretic, and Lexaurin (bromazepam). The best-selling non-prescription products were Nalgesin (naproxen) and Septolete total (benzydamine and cetylpyridinium).
In Bulgaria sales witnessed one of the highest growth rates in the Region, increasing by 13%. Sales value totalled €9.6 million and was mainly driven by prescription pharmaceuticals, particularly Valsacor (valsartan) and its combination with a diuretic, Lorista (losartan) and its combination with a diuretic, and Roswera (rosuvastatin). As to the most important medicinal products, the fastest growth rates were recorded for Amlessa (perindopril and amlodipine) and the combination with a diuretic, Nolpaza (pantoprazole), Dexamethason Krka (dexamethasone) and Moloxin (moxifloxacin). Sales growth was also recorded for products available without prescription and animal health products.
In Macedonia we preserved the position of the leading foreign pharmaceutical company. Sales amounted to €13.6 million, up 10%, mainly driven by the leading group of prescription pharmaceuticals. Among them let us highlight the successful sales of Enap (enalapril) and the combination with a diuretic, Roswera (rosuvastatin), Tanyz (tamsulosin), Lorista (losartan), including combinations with a diuretic, and Atoris (atorvastatin). The leading non-prescription products were Daleron (paracetamol), Bilobil (ginkgo biloba), Herbion and Septanazal (xylometazoline and dexpanthenol). Sales also increased for veterinary
Region East Europe was Krka's largest sales region with the highest sales growth in the reported period. Sales totalled €271.4 million, up 18%. The key factor driving the overall sales result was successful operations in the Region's most important market, the Russian Federation, followed by the majority of the Region's remaining markets.
Product sales in the Russian Federation, a key market, totalled €186.1 million, preserving its position of Krka's largest individual market. Sales having increased by 21%, we have maintained the above average sales dynamics and a growing market share, as reaffirmed by the independent source Quintiles IMS.
products, the best sellers being Fypryst (fipronil), Enroxil (enrofloxacin) and Ecocid S.
In Kosovo we sold for €4.4 million worth of products, ranking Krka among the leading pharmaceutical companies in the market. Year-onyear sales being down 4% is the result of decreased purchasing power in the market, the government not providing funding for purchases of medicines. The majority of sales came from prescription pharmaceuticals, particularly Lorista (losartan) and Enap (enalapril), both also in combination with a diuretic. The best-selling products available without prescription were Daleron (paracetamol) and Septolete.
In Albania product sales were €3.3 million, up 11%. As planned, the bulk of sales came from prescription pharmaceuticals, particularly Enap (enalapril) and Lorista (losartan), both also in combination with a diuretic. The best-selling products available without prescription were Daleron (paracetamol) and Nalgesin (naproxen).
Sales in the Montenegro were up 55% to €1.1 million. Prescription pharmaceuticals were at the forefront, among them Lorista (losartan) and Ampril (ramipril), both also in combination with a diuretic, Nolpaza (pantoprazole), Efloran (metronidazole) and Roswera (rosuvastatin). The main sales drivers in the group of products available without prescription were Septolete, Fitoval and Kamagel.
The chief sales drivers were prescription pharmaceuticals. The sales leaders were Lorista (losartan) and Enap (enalapril), both also in combination with a diuretic. They were followed by Atoris (atorvastatin), Perineva (perindopril) and the combination with a diuretic, Nolpaza (pantoprazole), Herbion, Orsoten (orlistat), Valsacor (valsartan) and the combination with a diuretic, Zyllt (clopidogrel) and Roxera (rosuvastatin). In terms of value, sales increased the most for Orsoten, Lorista, Herbion and Perineva. We are also highlighting the important contribution of the more recently launched medicines, including Vamloset (valsartan and amlodipine), Dalneva and Co-Dalneva (perindopril and amlodipine, and their combination with a diuretic), Lortenza (losartan and amlodipine), Dilaxa
(celecoxib), Bravadin (ivabradine), Vizarsin (sildenafil), Ulcavis (bismuth), Septolete total (benzydamine and cetylpyridinium), Septanazal (xylometazoline and dexpanthenol), along with Telmista (telmisartan) and the non-prescription product Flebaven (diosmin and hesperidin), the latter two launched at the beginning of the year. Sales growth was also recorded for animal health products, among which the best seller was Enroxil (enrofloxacin).
An advantage for our operations in the Russian Federation is our status of a domestic producer. We are strengthening it via the operations of our subsidiary, the production and logistics company Krka Rus. The proportion of locally manufactured Krka products exceeded 60% in the reported period.
As the market stabilised and turned upward in Ukraine, our sales for the period totalled €31.4 million. The 15% year-on-year increase exceeded the average pharmaceutical sales growth in the market, ranking Krka the number two among foreign generic pharmaceutical companies and strengthening our market share. A key element of the good result was the 17% sales growth for prescription pharmaceuticals, the leading product group in terms of sales on that market. Among them we sold the most of Enap (enalapril) and Prenessa (perindopril), both also in combination with a diuretic, and of Vasilip (simvastatin). The bestselling non-prescription and animal health products were Herbion, Panzynorm and Septolete, and Enroxil (enrofloxacin), respectively.
Trading conditions having stabilised in Kazakhstan, our sales there totalled €12.0 million, up 21% compared to the same period last year. The key contribution came from prescription pharmaceuticals, particularly Enap (enalapril) and the combination with a diuretic, Nolpaza (pantoprazole), Zyllt (clopidogrel) and Atoris (atorvastatin). Our range of prescription pharmaceuticals was expanded with a medicinal product stabilising blood pressure, Tenlisa (lisinopril and amlodipine), and a pharmaceutical lowering stomach acid levels, Zulbex (rabeprazole). For nonprescription products, the best results were recorded for Herbion and Duovit.
Sales in Uzbekistan were €10.6 million, a year-onyear decrease by 1%. The bulk of sales came from prescription pharmaceuticals, particularly Lorista (losartan), Amlessa (perindopril and amlodipine) and Enap (enalapril), all also in combination with a diuretic. The sales of non-prescription products, the leaders among which were Pikovit and Septolete, were down.
At the beginning of September, the Uzbek authorities aligned the local currency's official exchange rate with the market one, fostering the free purchase and sale of convertible currencies in banks. We are estimating the said change will have a positive impact on the business environment in the country and thus also on the growth of our product sales.
Having sold €7.0 million worth of products in Belarus, up 7%, Krka ranks the number two among foreign generic pharmaceutical companies in that country. The main sales drivers were prescription pharmaceuticals, particularly Lorista (losartan) and Amlessa (perindopril and amlodipine), both together with the combination with a diuretic, and Nolpaza (pantoprazole). Among products available without prescription, the best sales results were recorded for Septolete and Herbion. We have also successfully launched Septolete total (benzydamine and cetylpyridinium) and Nalgesin (naproxen).
In Moldova, product sales amounted to €5.2 million, up 10%. The bulk of sales came from prescription pharmaceuticals, the main sales drivers being Ampril (ramipril) and Rawel (indapamide). The bestselling non-prescription products were Nalgesin (naproxen) and Septolete.
With the sales value of €4.9 million, up 20%, Krka remains the leading foreign pharmaceutical company in Mongolia. Particularly good sales results among prescription pharmaceuticals were recorded for Nolpaza (pantoprazole), which has been supplemented with a new form, the injection, and good results were also recorded for the newly launched Ulcavis (bismuth).
Sales in Azerbaijan were €3.4 million, up 32% compared to the same period last year. All product groups contributed to sales growth. The leading prescription pharmaceuticals were Tramadol (tramadol), Enap (enalapril) and Amlessa (perindopril and amlodipine), both also in combination with a diuretic, and Nolpaza (pantoprazole). Our operations in Turkmenistan were hindered due to the customers' difficult access to foreign currencies. Sales totalled €3.0 million, down 12% year-on-year. The most important product group was prescription pharmaceuticals, among which the sales leaders were Naklofen
(diclofenac), Efloran (metronidazole) and Nolpaza (pantoprazole). Product sales in Georgia increased by 13% to €2.6 million, ranking Krka as the number two foreign generic pharmaceutical company in the market. The leading product group was prescription pharmaceuticals, its best-selling members being Enap (enalapril) and Lorista (losartan), both also in combination with a diuretic.
In Region Central Europe we maintained the growth dynamics from the first half-year, selling €226.0 millions of products, an 8% year-on-year increase. Sales growth was recorded in all markets of the Region, apart from Slovakia. The bulk, i.e. 90% of sales came from prescription pharmaceuticals, followed by non-prescription products and animal health products.
Poland is a key market for Krka and the leading market in the Region. Sales value amounted to €108.1 million, a 3% year-on-year increase. Key sales drivers were prescription pharmaceuticals, among which the main sales drivers were Atoris (atorvastatin), Roswera (rosuvastatin), Valsacor (valsartan) and its combination with a diuretic, and Doreta (tramadol and paracetamol). Good results were also recorded for Lorista (losartan), Tolura (telmisartan) and Karbis (candesartan), all also in combination with a diuretic, and Nolpaza (pantoprazole). Non-prescription product sales were subject to stringent trading conditions, our revenues down 35% for the period. The leading products were Bilobil (ginkgo biloba) and Septolete. The best sellers among animal health products were Floron (florfenicol) and Fypryst (fipronil).
The highest growth among the Region's markets was recorded in the Czech Republic, another key market. Sales there up 40% to €33.1 million, Krka asserted itself as one of the most successful generic pharmaceutical companies in the market. Prescription pharmaceuticals made the key contribution, particularly Lexaurin (bromazepam), Atoris (atorvastatin), and Tonarsa (perindopril and amlodipine) together with the combination with a diuretic Tonando. Good results were also recorded for Prenessa (perindopril), Tolura (telmisartan) and Valsacor (valsartan), all also in combination with a diuretic, and Nolpaza (pantoprazole). As to nonprescription products, sales were particularly successful for Nalgesin (naproxen), Septolete and Bisacodyl-K (bisacodyl). The best-selling veterinary In Kyrgyzstan, year-on-year sales were up 12% to €2.2 million, chiefly driven by sales growth in products available without prescription, the leaders being Herbion, Septolete and Pikovit. Armenia, where sales increased by one third compared to the same period last year, to €2.1 million, was one of the Region's fastest growing markets. Sales in Tajikistan were up two thirds to €0.8 million.
products were Fypryst (fipronil) and Dehinel (febantel, pyrantel embonate and praziquantel).
Hungary, another key market for Krka, has ranked the Region's third largest market in terms of sales value. Sales there totalled €33.0 million, up 8%, the increase driven by all three product groups. The bulk of sales again came from prescription pharmaceuticals, among them Prenessa (perindopril) and its combination with a diuretic, Atoris (atorvastatin), Roxera (rosuvastatin), Dalnessa (perindopril and amlodipine) and its combination with a diuretic Co-Dalnessa, Zyllt (clopidogrel), Lavestra (losartan) and its combination with a diuretic, and Emozul (esomeprazole). The leading non-prescription product was Bilobil (ginkgo biloba), while Fypryst (fipronil) and Enroxil (enrofloxacin) were the most important in the group of animal health products.
Nine-month sales in Slovakia totalled €25.5 million, which is at the level of the comparable period last year, the leading product group remaining prescription pharmaceuticals. The main sales drivers in this group were Prenessa (perindopril), Amlessa (perindopril and amlodipine), Valsacor (valsartan), all also in combination with a diuretic, Atoris (atorvastatin), Nolpaza (pantoprazole) and Lexaurin (bromazepam). The best sales results in the group of non-prescription products were recorded for Nalgesin (naproxen), and in the group of animal health products the best sellers were Enroxil (enrofloxacin) and Fypryst (fipronil).
Product sales in Lithuania totalled €11.9 million, up 1% compared to the same period last year. With a 3.2% market share, Krka ranks among the leading generic pharmaceutical companies in the Lithuanian market. The bulk of sales came from prescription pharmaceuticals, particularly Valsacor (valsartan) and the combination with a diuretic, Atoris (atorvastatin), Amlessa (perindopril and amlodipine) and Prenessa (perindopril), the latter two also in
combination with a diuretic. The leading nonprescription products in terms of sales were Septolete and Nalgesin (naproxen), and in the group of animal health products, Fypryst (fipronil) and Enroxil (enrofloxacin).
In Latvia sales totalled €9.3 million, a year-on-year increase by 19%. This has ranked Krka the number one generic pharmaceutical company in the country. The bulk of sales were again generated in prescription pharmaceuticals, among which we are highlighting Atoris (atorvastatin). It was followed by Amlessa (perindopril and amlodipine) and Prenessa (perindopril), both also in combination with a diuretic, Sorvasta (rosuvastatin) and Nolpaza (pantoprazole). The leading non-prescription
Nine-month sales in the countries of Western Europe, which are all regarded as key markets, amounted to €217.7 million, up 3%. Third quarter sales exceeded those of last year's comparable period by 23%. The Region's leading market remains Germany, followed by France, Spain and the United Kingdom. The sales of Krka brand products via subsidiaries increased by 3% and now represent almost two thirds of sales in the Region. Sales via unaffiliated companies also increased by 3% compared to the same period last year, representing 36% of sales in the Region.
The leading product group was prescription pharmaceuticals, which contributed 90% of overall sales in the Region, their sales up 6% in the reported period. The sales leaders were medicinal products with esomeprazole, pregabalin and pantoprazole. Non-prescription product sales were up 21%. Lower animal health product sales were chiefly influenced by the decrease in sales by unaffiliated companies.
Sales in the Region's most important market, Germany decreased by 4% compared to the same period last year, amounting to €64.7 million. More than 90% of sales were generated by the subsidiary TAD Pharma, which recorded a 4% growth. The leading product group was prescription pharmaceuticals, among which the bulk of sales value came from pharmaceuticals treating cardiovascular diseases, the alimentary tract and metabolism, and the central nervous system. The most sales were generated in medications containing pantoprazole, pregabalin and valsartan. Important sales contributions were also made by the products in terms of sales were Daleron COLD3 (paracetamol, pseudoephedrine and dextromethorphan) and Septanazal (xylometazoline and dexpanthenol). In the group of animal health products, the sales leaders were Fypryst (fipronil) and Milprazon (milbemycin and praziquantel).
Sales in Estonia increased by 9% to €5.2 million, the leading product group being prescription pharmaceuticals and the main sales drivers Prenessa (perindopril) and Dalnessa (perindopril and amlodipine), both also in combination with a diuretic. The best-selling non-prescription product has remained Septolete, and in the group of animal health products the best seller was Fypryst (fipronil).
fixed-dose combinations of losartan, bisoprolol and ramipril with amlodipine, and of lercanidipine with enalapril. The latter have ranked us among the leading providers of fixed-dose combinations for the treatment of cardiovascular diseases in Germany.
Product sales in France totalled €28.6 million, up 9% compared to the same period last year. The increase was chiefly driven by prescription pharmaceuticals, particularly those with esomeprazole. As to veterinary products, the best sales results were recorded for medicines with milprazon, overall sales for this product group falling behind last year's in the same period.
Product sales in Spain totalled €24.9 million, down 9% year-on-year, attributable to the expiry of certain public tenders in Andalusia. We have continued increasing the sales of Krka brand products, their share now representing 88%.
After the major price pressures we had been facing in the United Kingdom in the past settled down, sales there increased considerably in the third quarter. They totalled €20.9 million for the reported period, a 39% year-on-year increase. The increase was chiefly driven by the successful sales of medicines with quetiapine and olanzapine.
Product sales in Italy increased by 14% to €18.0 million. The main contribution came from prescription pharmaceuticals, particularly those with clopidogrel, esomeprazole and pantoprazole. Sales via the subsidiary Krka Farmaceutici increased by 26% and represented almost 60% of Krka's sales in that market.
Nine-month sales in the Scandinavian countries were €21.2 million, up 7%. The most sales were generated in Sweden, followed by Norway and Denmark. In Norway, Krka remains the leading provider of medicines with esomeprazole, candesartan, venlafaxine and enalapril. The highest growth, of 39%, was recorded in Finland. Three quarters of sales in this market were generated by the subsidiary Krka Finland, its best-selling product being Septabene (benzydamine and cetylpyridinium), a product available without prescription.
Product sales in Portugal increased by 10% to €14.9 million. The best-selling products were
Region Overseas Markets comprises a number of countries. Overall sales there amounted to €30.1 million, a year-on-year increase by 12%. The majority of sales came from prescription pharmaceuticals, which are sold as Krka brand products in most of the Region's markets.
We have continued facing difficulties in our operations in the markets of the Middle East, resulting from the emergency situation in the region. Nonetheless, our sales there were up 18% to €16.5 million, mainly generated in Iran, Iraq and Lebanon. The leading product group was prescription pharmaceuticals, and among them the leaders Asentra (sertraline), Nolpaza (pantoprazole), Vizarsin (sildenafil), Letizen (cetirizine) and Emanera (esomeprazole).
The Far East and Africa sales office reported €12.9 million of sales, up 5% from the same period
The Krka Group generated 91.7% of overall sales during the nine months to September 2017 in human health products, making this Krka's most important product group. The most sales, i.e. 82.8%, were generated in prescription pharmaceuticals, followed by non-prescription products and animal health products. The sales of prescription pharmaceuticals and non-prescription products increased by 10% compared to the same period last year.
medicines with esomeprazole and perindopril. In Ireland sales amounted to €7.0 million, up 21% compared to the same period last year. Sales via the subsidiary Krka Pharma Dublin increased by 30%. Sales generated by the subsidiary Krka Belgium were also up, by almost a fifth. Product sales in the Benelux countries totalled €5.8 million. In Austria our sales totalled €5.3 million, the 3% increase considerably driven by the 14% growth in sales generated by the Vienna-based subsidiary Krka Pharma. In other European countries our products are primarily sold via unaffiliated companies. Sales were down 15% and amounted to €6.3 million.
last year, ranking the number two in the Region. In many markets, among which we are singling out the Republic of South Africa, Vietnam, Malaysia, China, Singapore and Ghana, the majority of our sales were generated in prescription pharmaceuticals. Our most important products were Lanzul (lansoprazole), Palprostes (Serenoa repens), Tenox (amlodipine), Atoris (atorvastatin), Enap (enalapril) and its combination with a diuretic, and Kamiren (doxazosin).
As to the sales office the Americas, the most important markets remain those of Central America. Sales amounted to €0.7 million, up 4%, mainly generated in prescription pharmaceuticals, particularly Valsacor (valsartan), including the combination with a diuretic, Atoris (atorvastatin), Rawel (indapamide) and Nolpaza (pantoprazole).
Health resort and tourist services represented 2.9% of overall Krka Group sales for the period, a yearon-year increase by 8%.
With the exception of veterinary products, sales increased for all other groups of products and services.
| Krka Group | Krka Company | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| In € thousand | 1–9/2017 | 1–9/2016 | Index | 1–9/2017 | 1–9/2016 | Index | |||
| Human health products | 851,040 | 774,607 | 110 | 837,382 | 729,627 | 115 | |||
| – Prescription pharmaceuticals | 768,190 | 699,093 | 110 | 762,591 | 664,212 | 115 | |||
| – Non-prescription products | 82,850 | 75,514 | 110 | 74,791 | 65,415 | 114 | |||
| Animal health products | 48,380 | 50,404 | 96 | 47,258 | 49,642 | 95 | |||
| Health resort and tourist services | 27,159 | 25,177 | 108 | ||||||
| Other | 1,672 | 2,197 | 76 | 2,782 | 3,269 | 85 | |||
| Total | 928,251 | 852,385 | 109 | 887,422 | 782,538 | 113 |
The Krka Group sold €768.2 million worth of prescription pharmaceuticals in the reported period, 10% more than in the same period last year. Sales increased in all regions, the most in East Europe (by 18%), Overseas Markets (by 10%), Central Europe (by 9%) and West Europe (by 6%).
As to the largest markets, sales increased by 20% in the Russian Federation, by 5% in Poland, and by 1% in Germany. With respect to other large markets, year-on-year sales of prescription pharmaceuticals were up in the Czech Republic (up 43%), Ukraine (up 17%), France (up 17%), Hungary (up 8%) and Slovenia (up 2%).
With respect to mid-size markets, the highest sales growth rates were recorded in the United Kingdom (56%), Serbia (37%), Kazakhstan (14%), Italy (12%), Bulgaria (12%), Croatia (11%), Macedonia (9%) and Portugal (7%).
Among smaller markets for Krka's prescription pharmaceuticals in terms of sales, the highest sales growth rates were recorded in Tajikistan (up 57%), Montenegro (up 53%), Finland (up 39%), Azerbaijan (up 36%), Armenia (up 31%), Latvia (up 22%) and Ireland (up 22%). Two-digit sales growth was also recorded in Albania and Georgia.
We have been strengthening our position in the markets of Western Europe via Krka's subsidiaries, their sales results up considerably, the most in Finland (up 52%), Ireland (up 31%), Italy (up 26%), Austria (up 14%), France (up 5%), Scandinavia (up 5%) and Portugal (up 5%).
The leading ten prescription pharmaceuticals in terms of sales have included Atoris (atorvastatin), Lorista* (losartan) and its combination with a diuretic, Nolpaza* (pantoprazole), Prenessa* (perindopril) and its combination with a diuretic, Valsacor (valsartan) and its combination with a diuretic, Emanera* (esomeprazole), Roswera* (rosuvastatin), Enap (enalapril) and its combination with a diuretic, Zyllt* (clopidogrel), and Amlessa* (perindopril and amlodipine) together with its combination with a diuretic.
The highest absolute year-on-year sales growth was recorded for Kventiax* (quetiapine), Valsacor (valsartan) and its combination with a diuretic, Emanera* (esomeprazole), Amlessa* (perindopril and amlodipine) and its combination with a diuretic, Doreta* (tramadol and paracetamol), and Lorista* (losartan) together with its combination with a diuretic.
In the first nine months of 2017 we entered a new therapeutic area, the treatment of HIV infections, with the combination Emtricitabine/Tenofovir disoproxil Krka. It was launched in Germany, Slovenia, Latvia, Scandinavia, Slovakia and Poland.
There were also other brand new products that we launched in the reported period:
Slovenia, Poland, Slovakia, Croatia, Lithuania, Latvia and Portugal.
We also launched several existing medicines on new markets:
We sold €82.9 million worth of non-prescription products, an increase by 10% compared to the same period last year. Sales increased in regions Slovenia (by 6%), South-East Europe (by 2%), East Europe (by 18%) and West Europe (by 21%). In Region Central Europe sales were down due to lower sales in Poland.
54% of total non-prescription product sales were generated in Region East Europe, where the largest market is the Russian Federation, sales there up 19%. Sales also increased in the other markets of the Region, if we only highlight Belarus (up 21%),
Veterinary product sales totalled €48.4 million, a 4% year-on-year decrease. Sales increased in regions East Europe (by 16%), Central Europe (by 10%), South-East Europe (by 6%) and Slovenia (by 24%), while in Region West Europe they were down.
As to more important markets, considerable sales growth was recorded in the Russian Federation (up 26%), the Czech Republic (up 19%), Portugal (up 150%), Romania (up 9%) and Poland (up 7%).
In the nine months to September 2017, the Terme Krka Group generated €27.2 million of sales, an increase by 8% compared to the same period in 2016. We recorded 7% more bed nights than in the same period last year, with bed nights by domestic guests up 3% and those by foreign tourists up 18%.
Kazakhstan (up 51%), Moldova (up 27%) and Ukraine (up 26%) among the large ones.
Sales growth was recorded in the major markets of other regions as well, including Croatia (up 12%), Serbia (up 19%), Macedonia (up 18%), Lithuania (up 25%), Latvia (up 6%), the Czech Republic (21%), Hungary (9%) and Germany (28%).
Good sales results continue to be reported for the recently launched products Septolete total* and Septanazal, as well as for Herbion* and Nalgesin*.
The top five sales leaders among products were Milprazon* (milbemycin oxime and praziquantel), Floron* (florfenicol), Fypryst* (fipronil), Enroxil* (enrofloxacin) and the biocidal disinfectant Ecocid S. Two new products were launched this year, Otoxolan* ear drops for dogs (marbofloxacin, clotrimazole and dexamethasone acetate) and Dehinel tablets for cats (pyrantel embonate and praziquantel).
Sales increased in all business units: in Talaso Strunjan by 6%, in Dolenjske Toplice by 10%, in Šmarješke Toplice by 8%, and in Otočec Hotels by 15%.
* Products marked with the asterisk are marketed under different brand names in individual markets.
In the first nine months of 2017 Krka obtained marketing authorisations for 14 new products in 25 dosage forms and strengths.
Krka obtained marketing authorisations for eight new products in 18 pharmaceutical dosage forms and strengths.
Marketing authorisations were acquired for a new fixed-dose combination in Krka's key therapeutic area of medicinal products for the treatment of cardiovascular diseases, Olmita (olmesartan and amlodipine), in the form of film-coated tablets in three strengths (20/5 mg, 40/5 mg and 40/10 mg). The medicine contains olmesartan, an angiotensin II antagonist, and amlodipine, a calcium channel blocker, and is used to treat high blood pressure. The fixed-dose combination lowers high blood pressure via two different mechanisms of action, therefore it can be expected to have a greater impact than monotherapy with each of the substances. The complementary action of the product's two active substances may reduce the likelihood of certain adverse effects and thus improve treatment tolerability. It is used in patients who are already taking olmesartan and amlodipine individually in the doses contained in the Olmita fixed-dose combination. Used as an alternative therapy it will optimise treatment, as it reduces the number of daily tablets and thus improves cooperation in treatment.
Marketing authorisations were obtained under decentralised procedures in several European countries for two new products treating erectile dysfunction, Viavardis (vardenafil) and Tadilecto (tadalafil). Viavardis film-coated tablets in three strengths (5 mg, 10 mg and 20 mg) and Tadilecto film-coated tablets in four strengths (2.5 mg, 5 mg, 10 mg and 20 mg) are oral medications intended to improve the erectile function in men. Both active substances are selective phosphodiesterase type 5 (PDE5) inhibitors with a fast mechanism of action. Both are highly effective as soon as after the first dosage, they extend the duration of the erection and are reliable, as their efficacy is preserved even after long-term use. Vardenafil is an effective and safe medicine for patients designated as demanding in terms of treatment, e.g. diabetics, patients with cardiovascular diseases, and radical prostatectomy We acquired 385 new marketing approvals for 99 products in different markets.
patients. Apart in diabetics and patients with cardiovascular diseases, tadalafil in smaller doses may also be used to treat benign prostatic hyperplasia. Both medicinal products are vertically integrated, meaning that we control the processes of preparation and evaluation of incoming materials and the finished product. Vardenafil, tadalafil and sildenafil in different pharmaceutical forms and strengths constitute Krka's range of medications for the treatment of erectile dysfunction.
We were granted marketing approvals under European decentralised procedures for the analgesic Oxycodon/Naloxon Krka (oxycodone and naloxone) in the form of prolonged-release tablets in three strengths. It contains the combination of the opioid oxycodone and naloxone, which binds to opioid receptors. The medicine relieves moderate to severe pain and is used when safe opioid therapy is required.
Applying the decentralised procedure we obtained a marketing authorisation for a new strength of Dulsevia/Duloxalta (duloxetine) gastro-resistant capsules – 90 mg. It is an antidepressant from the group of combined serotonin and noradrenaline reuptake inhibitors, used to treat depression, generalised anxiety disorder and neuropathic pain in diabetes. A new strength was added to the existing 30 mg and 60 mg ones, facilitating a onecapsule-a-day dosing when higher dosages are needed. This makes treatment easier for patients.
Under a decentralised European procedure we obtained marketing authorisations for Meaxin (imatinib) in the new pharmaceutical form of dispersible tablets in two strengths (100 mg and 400 mg), for the treatment of cancer. It is used to treat chronic myeloid leukaemia, acute lymphoblastic leukaemia, myelodysplastic– myeloproliferative diseases, hypereosinophilic syndrome, chronic eosinophilic leukaemia, and protuberant dermatofibrosarcoma. Dispersible tablets dissolve in a small amount of water or apple juice, which makes the medicine easy to take. The product is thus appropriate for patients who have
difficulty swallowing, and patients with gastrointestinal dysfunction, and it is particularly suitable for children and older patients.
Under the decentralised authorisation procedure we launched on European markets a new formulation of Dexamethasone Krka in the form of 0.5 mg tablets. The medicine is a corticosteroid with an anti-inflammatory, analgesic and anti-allergic effect, and it affects the functioning of the immune system. It is used for the symptomatic treatment of rheumatic, systemic connective tissue, allergic and skin diseases, diseases of the eyes, alimentary tract, respiratory tract, blood and kidneys, certain forms of cancer, and transplant rejection after organ transplant.
In Hungary we were granted a marketing authorisation under the national procedure for a new strength of the medicine Kventiax/Quentiax (quetiapine) – 400 mg prolonged-release tablets. This has completed our range of quetiapine pharmaceuticals. These wide-spectrum antipsychotics are used to treat different psychiatric disorders (schizophrenia, bipolar disorder and major depression). The medicine is now available in four strengths and is taken as a single daily dose, thus simplifying treatment.
Additional products were launched on European markets after we obtained new marketing approvals for pharmaceuticals from Krka's key group of medicinal products treating cardiovascular diseases. Under the decentralised procedure we obtained marketing authorisations for the fixed-dose combination Teldipin/Telassmo (telmisartan and amlodipine) in the form of tablets in four strengths (40 mg/5 mg, 40 mg/10 mg, 80 mg/5 mg and 80 mg/10 mg) and were the first, in addition to the originator, to have entered the Polish market with it. We obtained marketing authorisations under decentralised procedures for two combinationproducts, Rameam (ramipril and amlodipine) hard capsules in four strengths and Vasitimb (ezetimibe and simvastatin) tablets in three strengths, and for two mono-component products, Bixebra (ivabradine) film-coated tablets in two strengths and Bloxazoc (metoprolol succinate) prolonged-release tablets in four strengths. We expanded marketing opportunities for Olimestra (olmesartan) film-coated tablets in three strengths, and for the fixed-dose combination Co-Olimestra (olmesartan and hydrochlorothiazide) in the form of film-coated tablets in four strengths. As to the group of antibiotics, the European decentralised procedure was used to expand markets for Klaritromicin Krka (clarithromycin) film-coated tablets in two strengths. Applying the European centralised procedure we obtained approvals to market the combination Emtricitabine/Tenofovir disoproxil Krka (emtricitabine and tenofovir disoproxil), an HIV infection treatment in the form of film-coated tablets in the strength of 200 mg/245 mg.
New marketing authorisations were obtained in different Eastern European countries for pharmaceuticals treating cardiovascular diseases: the fixed-dose combinations Telmista H40, Telmista H80 and Telmista HD80 (telmisartan and hydrochlorothiazide), Roxera combi (rosuvastatin and amlodipine), Valarox (rosuvastatin and valsartan) and Co-Prenessa (perindopril and indapamide), and the product Bravadin (ivabradine). We expanded marketing authorisations for medicinal products for the treatment of diseases of the central nervous system – Pregabio (pregabalin), Ralago (rasagiline), Maruxa (memantine), Duloxenta/Dulsevia (duloxetine), Oprymea SR (pramipexole) and Torendo (risperidone) – and for antibiotics – Moflaxa (moxifloxacin) tablets and solution for injection, Betaklav (amoxicillin and clavulanic acid) tablets and oral suspension, Levaxela (levofloxacin), Linezolid Krka (linezolid), Azibiot (azithromycin) powder for oral suspension and film-coated tablets, and Furocef (cefuroxime). New marketing authorisations were obtained for the analgesic Roticox (etoricoxib), the medicine for the treatment of HIV infections Emtricitabine/tenofovir Krka (emtricitabine and tenofovir), and cancer medicines Ecansia (capecitabine) and Docetaxel Krka (docetaxel).
We obtained additional marketing authorisations in the markets of South-Eastern Europe for products from our key therapeutic groups. New marketing authorisations were obtained for the cardiovascular products Co-Amlessa (perindopril, amlodipine and indapamide) in the form of tablets, Valsaros (rosuvastatin and valsartan) film-coated tablets, and Lortenza (losartan and amlodipine). As to medications for diseases of the central nervous system we obtained new authorisations for Kventiax SR (quetiapine) prolonged-release tablets in four strengths, Memando (memantine) filmcoated tablets, and Pragiola (pregabalin) hard capsules. We expanded marketing opportunities for the antibiotics Moloxin (moxifloxacin), Levalox (levofloxacin) in the form of a film-coated tablets and solution for injection, and Furocef (cefuroxime)
in the form of film-coated tablets. Marketing authorisations were also obtained for a medicine treating an enlarged prostate, Dutrys (dutasteride), in the form of a soft capsules, and for a medication decreasing high blood sugar levels, Gliclada SR (gliclazide), in the form of 90 mg prolonged-release tablets.
We launched four new non-prescription products in five pharmaceutical dosage forms and strengths.
Magnezij Krka 300 granules for the preparation of a beverage contain magnesium in the form of citrate, and vitamin B2. Both ingredients contribute to decreasing fatigue and exhaustion and support a normal functioning of the nervous system, with magnesium in the form of magnesium citrate also contributing to muscle action. The product does not contain preservatives, artificial colours, flavours or sweeteners. It was authorised for marketing as a food supplement in Slovenia and the markets of East Europe.
Under the European decentralised procedure we obtained marketing authorisations in 12 European countries for the new product Flebaven/Flebazol/Fladios (diosmin) in the form of 500 mg film-coated tablets and 100 mg tablets. Both forms contain micronized diosmin of pharmacopoeia quality and are intended for the treatment of symptoms of chronic venous insufficiency in adults – showing as the feeling of heavy legs, leg pain and night leg cramps – and for the symptomatic treatment of deteriorated haemorrhoid-related problems in adults.
New authorisations have expanded marketing opportunities for Septolete total/Septabene lozenges (benzydamine hydrochloride and cetylpyridinium chloride). The product has antiinflammatory properties, it is an analgesic and antiseptic, and it is used to treat mouth and throat pain and sores. Applying decentralised procedures we obtained marketing authorisations for it in the Czech Republic, Ireland and Germany, and it was granted the status of a product available without prescription.
In the overseas markets we obtained marketing authorisations for a series of key products containing the substances atorvastatin, telmisartan, the combination of tramadol and paracetamol, esomeprazole, metoprolol, solifenacin, desloratadine, aripiprazole, ezetimibe, linezolid, gliclazide, memantine, pregabalin and rabeprazole. The most products were authorised for marketing in Hong Kong and Lebanon.
Under the European decentralised procedure we obtained first marketing authorisations in 15 countries for two new Septabene products, Lemon/Honey and Lemon/Elder lozenges. Both complement our broad range of cold and flu products.
We expanded marketing opportunities in European markets for our well-established product Bilobil. In the European decentralised procedure, it was granted marketing approvals as Gingonin (ginkgo leaf extract) in the form of hard capsules in two strengths in Germany, and one of its strengths was also authorised for marketing in France.
In Slovenia we were granted an additional marketing authorisation under the national procedure for Nalgesin (naproxen) 220 mg filmcoated tablets.
In the markets of Eastern and South-Eastern Europe we strengthened the position of the Septolete brand, having obtained new authorisations for Septolete total lozenges and the Septolete total spray.
We obtained marketing authorisations for Ulcavis (bismuth) 120 mg film-coated tablets in Ukraine, Armenia, Moldova, Uzbekistan and Kazakhstan, and for Flebaven (diosmin and flavonoids expressed as hesperidin) 450 mg/50 mg film-coated tablets in Kazakhstan.
In the overseas markets we obtained marketing authorisations for Septolete and Pikovit products.
We obtained approvals to market two new veterinary products.
Applying the European decentralised procedure, Krka obtained marketing authorisations in 22 European countries for the new product Dehinel/Anthelmin (pyrantel embonate and praziquantel) in the form of film-coated tablets. It contains a fixed-dose combination of substances treating mixed gastrointestinal parasite infestations in cats, and has completed Krka's range of state-ofthe-art products for the elimination of parasites in companion animals.
Our range of products for the treatment of farm animals in Kazakhstan was supplemented with the approval for marketing granted for the new product Toltarox (toltrazuril) in the form of oral suspension. It treats coccidia infestations in different types of poultry, and is added to drinking water.
We increased the number of marketing authorisations and consolidated our wellestablished brands of pharmaceuticals for farm animals. Under national procedures we obtained a marketing approval for the Floron (florfenicol) oral powder in the Russian Federation, and for the Floron (florfenicol) solution for injection in Moldova. It is used to treat respiratory infections in pigs and bovine animals. In Moldova, Ukraine and Kazakhstan we obtained marketing authorisations for the Doxatib (doxycycline) powder to be administered in drinking water, a first-choice medicinal product for the treatment of respiratory tract infections in pigs and chickens.
We also entered new markets with products for companion animals. Under the European decentralised procedure we obtained marketing authorisations for Milprazon/Milquantel (milbemycin oxime and praziquantel) flavoured tablets for dogs and film-coated flavoured tablets for cats in six European countries. The product prevents and treats gastrointestinal parasites in cats and dogs.
In the Russian Federation we obtained marketing authorisations for the fixed-dose combination Dehinel (praziquantel and pyrantel embonate) in the form of the film-coated tablets, intended for the prevention and treatment of gastrointestinal parasites in cats. In Kazakhstan and Macedonia we obtained approvals to market the Otoxolan ear drops for dogs (marbofloxacin, clotrimazole and dexamethasone acetate) in the form of suspension. The new fixed-dose combination is used to treat outer ear bacterial and yeast infections in dogs. In Serbia we obtained approvals for the fixed-dose combination Ataxxa (imidacloprid and permethrin) in the form of spot on drops for the treatment and prevention of external skin and hair parasite infections in dogs. In several overseas markets we obtained marketing authorisations for the fixed-dose combination Dehinel Plus Flavour (febantel, pyrantel embonate and praziquantel) in the form of flavoured tablets, intended for the treatment and prevention of gastrointestinal infections in dogs.
In the first nine months of 2017 the Krka Group allocated €75.2 million to investments, of which the controlling company invested €62.0 million and subsidiaries €13.2 million. Investments have primarily increased and modernised our production, and research and development capacities.
Krka Group investments for the full year 2017 are expected to amount to just over €120 million, which is less than planned and less than last year. The estimated amount to actually be spent is lower than originally planned due to the good prices negotiated with contractors and equipment suppliers. This amount does not include potential acquisitions.
Krka's key investment to support development activities and quality assurance in the following years is the Development and Control Centre 4 (RKC 4), located in the group of production facilities at Ločna in Novo mesto, Slovenia. The investment is estimated at €54 million. In the facility with a surface area of 18,000 m2 , we have started installing laboratory and other technological equipment.
Also at the Ločna location we are building a multipurpose warehouse for the storage of finished products, raw materials and packaging. It will have 25,000 new pallet spaces and thus brings new warehousing capacity for incoming materials and
finished products. This will increase the speed and flexibility of production and improve the availability of products and market supply. The investment is estimated at €30 million.
At the same location we operate a state-of-the-art solid dosage forms production plant Notol 2. Production had been launched in January 2015 and it was officially opened in November that year. More than two years later, work is running smoothly with production capacity increasing. Approximately two thirds of the entire technological equipment has been fitted so far. To satisfy increasing market demand and facilitate the production of new products, we have started procuring additional technological equipment to ensure the plant is fully equipped and can reach the target production volume of 4.5 billion tablets, film-coated tablets and capsules per year. The estimated value of the additional equipment for Notol 2 is €23 million.
Also ongoing is the €11 million investment into increasing capacities for the coating of pellets in the Solid Dosage Forms Plant.
The new Hydrogenation 2 facility in Krško, Slovenia will facilitate hydrogenation capacities and increase Krka's independent production capacity for active pharmaceutical ingredients.
In the Bršljin plant in Novo mesto, Slovenia we are expanding the Plant for the Production of Animal Health Products with a Biocidal Effect. The estimated value of the investment is €4.6 million.
New production capacities in Novo mesto have increased our electricity needs. After all systems in Notol 2 start operating and the RKC 4 is complete, a peak consumption of close to 20 MW is expected. Electricity supply will be secured via 20 kV lines from the 110/20 kV Ločna substation for a permanent combined consumption of approximately 25 MW. Systems are expected to connect to the new substation at the beginning of 2018. The investment into increasing and modernising energygenerating infrastructure is worth over €3 million.
One of the more important investments in Krka subsidiaries has been Krka-Rus 2 in Istra, the Russian Federation. The first stage had included building a new plant and logistics centre, which were fitted in 2015 and 2016 with additional technical and logistics equipment worth just over €20 million. This has increased the plant's production capacity to two thirds of its planned target capacity, i.e. 2.5 billion tablets and capsules per year. The warehouse and logistics system have reached full capacity after the installation of the remaining logistics equipment. The second phase of the investment, estimated at €30 million, will include bringing the plant to its target production capacity and building a proprietary wastewater treatment plant to ensure in the long term that the purity of wastewater released from the Krka-Rus factory corresponds to statutory requirements. More than 60% of products intended for the Russian market are manufactured in Krka-Rus, which gives Krka the status of a domestic producer.
Due to the expansion of Krka's production programme in Jastrebarsko, Croatia, the production and distribution centre there is being rearranged to acquire new production and laboratory capacities for solid dosage oncology pharmaceuticals. Equipment installation and assembly were completed at the end of 2016, and the launch of production and gradual transfer of technologies to the new technological equipment have been ongoing during 2017. We have obtained the GMP (good manufacturing practice) certificate and manufacturing authorisation, and have thus met the conditions for starting the production of oncology medications to be sold in demanding global markets. The investment is worth €34 million.
In the Terme Krka health resort in Strunjan we replaced the system of heating. In compliance with the legislation and the objectives of the Strunjan Landscape Park, this investment will reduce negative impacts on the environment and drive down the cost of heat energy. The renovation of the Laguna Hotel in Strunjan is also ongoing; a small pool is being built next to it and a children's playground set up, diversifying our programme for visitors. In the Šmarješke Toplice health resort we upgraded the wastewater system, and the renovation of the energy system is ongoing. In the Dolenjske Toplice health resort we are completing the renovation of the interior of the medical rehabilitation centre, and rooms are being renovated in Šport Hotel at Otočec. The total estimated value of investments in the Terme Krka Group to be completed this year is almost €3 million.
In the following weeks we intend to increase our presence in China by establishing a joint venture in which Krka will hold the majority share.
At the end of September the Krka Group had 10,733 employees. Krka's subsidiaries and representation offices outside Slovenia employed 53% of the Group's employees, and 56% of the entire Krka team had at least a university level degree.
There were 1,412 temporary agency workers at the end of September, 189 more than at the end of 2016.
| 30 Sep 2017 | 31 Dec 2016 | |||||
|---|---|---|---|---|---|---|
| No. of | No. of | |||||
| employees | Share (in%) | employees | Share (in%) | |||
| PhD | 176 | 1.6 | 169 | 1.6 | ||
| MSc | 362 | 3.4 | 396 | 3.6 | ||
| University degree | 5,462 | 50.9 | 5,594 | 51.4 | ||
| Higher professional education degree | 1,460 | 13.6 | 1,422 | 13.1 | ||
| Vocational college degree | 266 | 2.5 | 265 | 2.4 | ||
| Secondary school education, level V | 1,860 | 17.3 | 1,868 | 17.2 | ||
| Other | 1,147 | 10.7 | 1,175 | 10.8 | ||
| Krka Group | 10,733 | 100.0 | 10,889 | 100.0 |
We have been ensuring a continuous inflow of new employees by offering study grants to students. Currently there are 41 students that receive Krka study grants. They are primarily pharmacy and chemistry students, while scholarships are also granted to promising students from other fields of interest to Krka. We have awarded 16 new scholarships. By means of the employee development system and succession planning we make sure that most of Krka's key personnel requirements – both in terms of field experts and managers – are catered for within the Group.
Krka has always invested in the knowledge and development of employees who wish to acquire new knowledge and higher academic degrees. We enable employees to 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, market conditions and the Group's development needs. The majority of these trainings are organised inhouse, and they are constantly updated and remodelled into new types better adjusted to the contemporary line of work.
With Krka's support, 143 employees are enrolled into part-time university studies, 48 of them postgraduate students on their way to obtaining a specialisation, master's degree or doctoral degree. By the end of September, 19 employees had completed their studies.
Krka is the only certificate-awarding body in Slovenia with the power to examine and approve candidates taking the National Vocational Qualification (NVQ) exams in the area of pharmacy. By examining and approving candidates under the NVQ system between 2002 and September 2017, we have awarded 1,262 NVQ certificates to Krka employees and 142 to participants from other organisations in the pharmaceutical industry, a total of 1,404 certificates for four vocational qualifications. There are currently 95 Krka employees in the process of obtaining a NVQ certificate.
We have been steering the young towards creativity in research work for 47 years with Krka awards, 2,691 young researchers having received Krka awards to date. This year we awarded 32 Krka awards for graduate and postgraduate research work, 15 to doctors of science and 28 to upper secondary school students.
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Assets | |||
| Property, plant and equipment | 866,143 | 874,100 | 99 |
| Intangible assets | 110,622 | 113,511 | 97 |
| Loans | 10,456 | 8,801 | 119 |
| Investments | 9,078 | 10,138 | 90 |
| Deferred tax assets | 37,521 | 31,260 | 120 |
| Other non-current assets | 343 | 257 | 133 |
| Total non-current assets | 1,034,163 | 1,038,067 | 100 |
| Assets held for sale | 463 | 467 | 99 |
| Inventories | 304,763 | 280,653 | 109 |
| Trade receivables | 485,313 | 510,406 | 95 |
| Other receivables | 26,660 | 33,777 | 79 |
| Loans | 497 | 9,441 | 5 |
| Investments | 0 | 77 | 0 |
| Cash and cash equivalents | 30,936 | 38,630 | 80 |
| Total current assets | 848,632 | 873,451 | 97 |
| Total assets | 1,882,795 | 1,911,518 | 98 |
| Equity | |||
| Share capital | 54,732 | 54,732 | 100 |
| Treasury shares | -37,546 | -29,690 | 126 |
| Reserves | 109,197 | 109,678 | 100 |
| Retained earnings | 1,322,227 | 1,308,668 | 101 |
| Total equity holders of the parent | 1,448,610 | 1,443,388 | 100 |
| Non-controlling interests within equity | 1,048 | 1,056 | 99 |
| Total equity | 1,449,658 | 1,444,444 | 100 |
| Liabilities | |||
| Provisions | 93,017 | 90,807 | 102 |
| Deferred revenue | 11,253 | 12,158 | 93 |
| Deferred tax liabilities | 12,175 | 12,348 | 99 |
| Total non-current liabilities | 116,445 | 115,313 | 101 |
| Trade payables | 121,966 | 128,437 | 95 |
| Income tax payable | 14,415 | 1,666 | 865 |
| Other current liabilities | 180,311 | 221,658 | 81 |
| Total current liabilities | 316,692 | 351,761 | 90 |
| Total liabilities | 433,137 | 467,074 | 93 |
| Total equity and liabilities | 1,882,795 | 1,911,518 | 98 |
| In € thousand | 1–9/2017 | 1–9/2016 | Index |
|---|---|---|---|
| Revenues | 928,251 | 852,385 | 109 |
| Costs of goods sold | -398,518 | -392,686 | 101 |
| Gross profit | 529,733 | 459,699 | 115 |
| Other operating income | 8,174 | 5,263 | 155 |
| Selling and distribution expenses | -237,537 | -222,492 | 107 |
| R&D expenses | -92,877 | -85,300 | 109 |
| General and administrative expenses | -58,270 | -57,496 | 101 |
| Operating profit | 149,223 | 99,674 | 150 |
| Financial income | 9,892 | 46,446 | 21 |
| Financial expenses | -29,870 | -57,608 | 52 |
| Net financial result | -19,978 | -11,162 | 179 |
| Profit before tax | 129,245 | 88,512 | 146 |
| Income tax | -19,194 | -8,196 | 234 |
| Net profit | 110,051 | 80,316 | 137 |
| Attributable to: | |||
| – equity holders of the parent | 110,059 | 80,299 | 137 |
| – non-controlling interest | -8 | 17 | -47 |
| Basic earnings per share* (in €) | 3.41 | 2.48 | 138 |
| Diluted earnings per share** (in €) | 3.41 | 2.48 | 138 |
* Net profit/Average number of shares issued in the period, exclusive of treasury shares
** All shares issued by the controlling company are ordinary registered shares, therefore the diluted EPS equals the basic EPS.
| In € thousand | 1–9/2017 | 1–9/2016 | Index |
|---|---|---|---|
| Net profit | 110,051 | 80,316 | 137 |
| Other comprehensive income for the period | |||
| Other comprehensive income for the period reclassified to profit or loss in future periods |
|||
| Translation reserve | -7,460 | 14,591 | |
| Change in fair value of available-for-sale financial assets | -1,082 | 1,858 | |
| Deferred tax effect | 205 | -448 | |
| Net other comprehensive income for the period reclassified to profit or loss in future periods |
-8,337 | 16,001 | |
| Total other comprehensive income for the period (net of tax) | -8,337 | 16,001 | |
| Total comprehensive income for the period (net of tax) | 101,714 | 96,317 | 106 |
| Attributable to: | |||
| – equity holders of the parent | 101,722 | 96,300 | 106 |
| – non-controlling interest | -8 | 17 |
| Reserves Retained earnings |
||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Share | Treasury | Reserves for treasury |
Share | Legal | Statutory | Fair value | Translation | Other profit |
Retained | Profit for | Total equity holders of the |
Non controlling interests |
Total | |
| In € thousand | capital | shares | shares | premium | reserves | reserves | reserves | reserve | reserves | earnings | the period | parent | 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 |
| Repurchase 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 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 Sep 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 |
| Reserves Retained earnings |
||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Share | Treasury | Reserves for treasury |
Share | Legal | Statutory | Fair value | Translation | Other profit |
Retained | Profit for | Total equity holders of the |
Non controlling interests |
Total | |
| In € thousand | capital | shares | shares | premium | reserves | reserves | reserves | reserve | reserves | earnings | the period | parent | within equity | equity |
| Balance at 1 Jan 2016 | 54,732 | -20,071 | 20,071 | 105,897 | 14,990 | 30,000 | -12,453 | -85,118 | 1,051,677 | 96,160 | 148,851 | 1,404,736 | 1,248 | 1,405,984 |
| Net profit | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 80,299 | 80,299 | 17 | 80,316 |
| Total other comprehensive income for the period (net of tax) |
0 | 0 | 0 | 0 | 0 | 0 | 1,941 | 14,591 | 0 | -531 | 0 | 16,001 | 0 | 16,001 |
| Total comprehensive income for the period (net of tax) |
0 | 0 | 0 | 0 | 0 | 0 | 1,941 | 14,591 | 0 | -531 | 80,299 | 96,300 | 17 | 96,317 |
| Transactions with owners, recognised in equity |
||||||||||||||
| Formation of other profit reserves under the resolution of the Management and Supervisory Boards |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 50,488 | -50,488 | 0 | 0 | 0 | 0 |
| Transfer of previous period's profit to retained earnings |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 148,851 | -148,851 | 0 | 0 | 0 |
| Repurchase of treasury shares |
0 | -4,972 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -4,972 | 0 | -4,972 |
| Formation of reserves for treasury shares |
0 | 0 | 4,972 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -4,972 | 0 | 0 | 0 |
| Dividends paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -85,932 | 0 | -85,932 | 0 | -85,932 |
| Total transactions with owners, recognised in equity |
0 | -4,972 | 4,972 | 0 | 0 | 0 | 0 | 0 | 50,488 | 12,431 | -153,823 | -90,904 | 0 | -90,904 |
| Balance at 30 Sep 2016 | 54,732 | -25,043 | 25,043 | 105,897 | 14,990 | 30,000 | -10,512 | -70,527 | 1,102,165 | 108,060 | 75,327 | 1,410,132 | 1,265 | 1,411,397 |
| In € thousand | 1–9/2017 | 1–9/2016 |
|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Net profit | 110,051 | 80,316 |
| Adjustments for: | 102,533 | 124,462 |
| – amortisation/depreciation | 79,734 | 79,150 |
| – foreign exchange differences | -1,924 | 2,536 |
| – investment income | -10,848 | -23,482 |
| – investment expenses | 15,039 | 57,234 |
| – interest expenses and other financial expenses | 1,338 | 828 |
| – income tax | 19,194 | 8,196 |
| – other | ||
| Operating profit before changes in net operating current assets | 212,585 | 204,778 |
| Change in trade receivables | 26,331 | -6,431 |
| Change in inventories | -24,109 | -5,892 |
| Change in trade payables | -1,638 | 8,868 |
| Change in provisions | 1,139 | 277 |
| Change in deferred revenues | -905 | -920 |
| Change in other current liabilities | -29,535 | 1,885 |
| Income tax paid | -6,894 | -17,984 |
| Net cash from operating activities | 176,973 | 184,581 |
| CASH FLOWS FROM INVESTING ACTIVITIES | ||
| Interest received | 402 | 776 |
| Proceeds from sale of current investments | 2 | 0 |
| Dividends received | 15 | 835 |
| Proceeds from sale of property, plant and equipment | 1,279 | 1,102 |
| Purchase of intangible assets | -2,899 | -1,877 |
| Purchase of property, plant and equipment | -77,410 | -85,419 |
| Non-current loans | -1,911 | -2,034 |
| Proceeds from repayment of non-current loans | 983 | 1,001 |
| Payments to acquire non-current investments | -124 | -60 |
| Proceeds from sale of non-current investments | 11 | 50 |
| Payments/Proceeds in connection with current investments and loans | 8,281 | 36,406 |
| Payments in connection with derivative financial instruments | -25,820 | -45,041 |
| Proceeds from derivative financial instruments | 9,473 | 21,292 |
| Net cash flows used in investing activities | -87,718 | -72,969 |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Interest paid | -268 | -829 |
| Dividends and other profit shares paid | -88,748 | -85,766 |
| Repurchase of treasury shares | -7,856 | -4,972 |
| Proceeds of payments from non-controlling interests | ||
| Net cash used in financing activities | -96,871 | -91,567 |
| Net increase in cash and cash equivalents | -7,616 | 20,045 |
| Cash and cash equivalents at beginning of the year | 38,630 | 35,826 |
| Effect of exchange rate fluctuations on cash held | -78 | 137 |
| Net cash and cash equivalents at end of the period | 30,936 | 56,008 |
| European Union | South-East Europe | East Europe | Other | Elimination | Total | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| In € thousand | 1–9/2017 | 1–9/2016 | 1–9/2017 | 1–9/2016 | 1–9/2017 | 1–9/2016 | 1–9/2017 | 1–9/2016 | 1–9/2017 | 1–9/2016 | 1–9/2017 | 1–9/2016 |
| Revenues from external customers |
574,164 | 545,041 | 46,220 | 43,036 | 271,434 | 229,996 | 36,433 | 34,312 | 0 | 0 | 928,251 | 852,385 |
| Sales between group companies |
172,793 | 158,862 | 22,499 | 20,271 | 172,465 | 114,784 | 0 | 0 | -367,757 | -293,917 | 0 | 0 |
| Other operating income | 5,121 | 3,024 | 117 | 768 | 2,936 | 1,471 | 0 | 0 | 0 | 0 | 8,174 | 5,263 |
| Operating expenses | -495,401 | -489,445 | -33,866 | -34,134 | -236,313 | -212,825 | -21,622 | -21,570 | 0 | 0 | -787,202 | -757,974 |
| Operating expenses to Group companies |
-277,590 | -271,085 | -25,419 | -21,993 | -325,909 | -236,727 | -6 | -4 | 628,924 | 529,809 | 0 | 0 |
| Operating profit | 83,884 | 58,620 | 12,471 | 9,670 | 38,057 | 18,642 | 14,811 | 12,742 | 0 | 0 | 149,223 | 99,674 |
| Interest income | 141 | 336 | 0 | 206 | 260 | 231 | 0 | 0 | 0 | 0 | 401 | 773 |
| Interest income from Group companies |
539 | 687 | 0 | 0 | 2 | 3 | 0 | 0 | -541 | -690 | 0 | 0 |
| Interest expenses | -201 | -634 | 0 | 0 | 2 | 3 | 0 | 0 | 0 | 0 | -199 | -631 |
| Interest expenses to Group companies |
-195 | -222 | 0 | 0 | -281 | -583 | 0 | 0 | 476 | 805 | 0 | 0 |
| Net financial result | 293 | -551 | 562 | -363 | -20,708 | -9,158 | -125 | -1,090 | 0 | 0 | -19,978 | -11,162 |
| Income tax | -10,724 | -6,209 | -1,619 | -469 | -5,366 | -1,048 | -1,485 | -470 | 0 | 0 | -19,194 | -8,196 |
| Net profit | 73,453 | 51,860 | 11,414 | 8,838 | 11,983 | 8,436 | 13,201 | 11,182 | 0 | 0 | 110,051 | 80,316 |
| Investments | 72,657 | 74,674 | 148 | 148 | 2,436 | 13,694 | 0 | 0 | 0 | 0 | 75,241 | 88,516 |
| Depreciation | 49,658 | 51,731 | 1,440 | 1,527 | 22,654 | 20,041 | 277 | 273 | 0 | 0 | 74,029 | 73,572 |
| Amortisation | 3,514 | 3,658 | 208 | 237 | 1,823 | 1,513 | 160 | 170 | 0 | 0 | 5,705 | 5,578 |
| 30 Sep | 31 Dec | 30 Sep | 31 Dec | 30 Sep | 31 Dec | 30 Sep | 31 Dec | 30 Sep | 31 Dec | 30 Sep | 31 Dec | |
| 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |
| Total assets | 1,369,058 | 1,394,236 | 41,849 | 40,107 | 462,071 | 467,293 | 9,817 | 9,882 | 0 | 0 | 1,882,795 | 1,911,518 |
| Goodwill | 42,644 | 42,644 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 42,644 | 42,644 |
| Trademark | 38,375 | 39,011 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 38,375 | 39,011 |
| Total liabilities | 323,544 | 364,038 | 9,203 | 9,251 | 78,029 | 67,764 | 22,361 | 26,021 | 0 | 0 | 433,137 | 467,074 |
| In € thousand | 1–9/2017 | 1–9/2016 | Index |
|---|---|---|---|
| Cost of goods and material | 267,441 | 253,701 | 105 |
| Costs of services | 173,915 | 164,939 | 105 |
| Employee benefit costs | 262,036 | 244,176 | 107 |
| Amortisation and depreciation | 79,734 | 79,150 | 101 |
| Inventory write-offs and allowances | 8,799 | 7,553 | 116 |
| Receivable impairment and write-offs | 1,803 | 621 | 290 |
| Other operating expenses | 25,453 | 24,919 | 102 |
| Total costs | 819,181 | 775,059 | 106 |
| Change in the value of inventories of products and work in progress |
-31,979 | -17,085 | 187 |
| Total | 787,202 | 757,974 | 104 |
| In € thousand | 1–9/2017 | 1–9/2016 | Index |
|---|---|---|---|
| Gross wages and salaries and continued pay | 203,516 | 188,770 | 108 |
| Social security contributions | 15,492 | 14,804 | 105 |
| Pension insurance contributions | 28,476 | 26,466 | 108 |
| Payroll tax | 821 | 906 | 91 |
| Post-employment benefits and other non-current employee benefits |
3,581 | 344 | 1041 |
| Other employee benefit costs | 10,150 | 12,886 | 79 |
| Total employee benefit costs | 262,036 | 244,176 | 107 |
| In € thousand | 1–9/2017 | 1–9/2016 | Index |
|---|---|---|---|
| Grants and assistance for humanitarian and other purposes | 1,248 | 1,243 | 100 |
| Environmental protection expenses | 2,719 | 2,542 | 107 |
| Other taxes and levies | 17,748 | 17,031 | 104 |
| Loss on sale of property, plant and equipment and intangible assets |
927 | 456 | 203 |
| Other expenses | 2,811 | 3,647 | 77 |
| Total other operating expenses | 25,453 | 24,919 | 102 |
Other levies include taxes (claw-back and similar) that have been imposed in certain markets of Krka Group operations in recent periods.
| In € thousand | 1–9/2017 | 1–9/2016 | Index |
|---|---|---|---|
| Net foreign exchange differences | 0 | 23,539 | 0 |
| Interest income | 401 | 773 | 52 |
| Change in fair value of investments through profit or loss | 0 | 7 | 0 |
| Proceeds from sale of investments | 2 | 0 | |
| Derivative financial instruments income | 9,474 | 21,292 | 44 |
| – income | 9,474 | 21,292 | 44 |
| Income from dividends and other shares of the profit | 15 | 835 | 2 |
| Total financial income | 9,892 | 46,446 | 21 |
| Net foreign exchange differences | -14,323 | 0 | |
| Interest expenses | -199 | -631 | 32 |
| Change in fair value of investments through profit or loss | 0 | -8 | 0 |
| Derivative financial instruments expenses | -14,111 | -56,770 | 25 |
| – expenses | -25,820 | -45,041 | 57 |
| – change in fair value | 11,709 | -11,729 | |
| Other financial expenses | -1,237 | -199 | 622 |
| Total financial expenses | -29,870 | -57,608 | 52 |
| Net financial result | -19,978 | -11,162 | 179 |
Current income tax amounts to €25,524 thousand, which is 19.7% of pre-tax profit. Together with the deferred tax of €–6,330 thousand, the total income
Income tax €19,194 thousand
tax expense in the income statement amounts to €19,194 thousand. The effective tax rate is 14.9%.
The value of property, plant and equipment represents just over 46% of the Group's total assets. Krka's major investments are described in the chapter Investments in the Business Report.
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Goodwill | 42,644 | 42,644 | 100 |
| Trademark | 38,375 | 39,011 | 98 |
| Concessions, patents, licences and similar rights | 25,652 | 28,184 | 91 |
| Intangible assets being acquired | 3,951 | 3,672 | 108 |
| Total intangible assets | 110,622 | 113,511 | 97 |
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Non-current loans | 10,456 | 8,801 | 119 |
| – loans to others | 10,456 | 8,801 | 119 |
| Current loans | 497 | 9,441 | 5 |
| – portion of non-current loans maturing next year | 328 | 1,201 | 27 |
| – loans to others | 169 | 8,240 | 2 |
| Total loans | 10,953 | 18,242 | 60 |
| Non-current loans | 10,456 | 8,801 | 119 |
Non-current loans represent 95% of total loans.
Non-current loans to others include loans that the Group extends in accordance with its internal acts to its employees, and that are primarily housing loans.
Investments €9,078 thousand
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Non-current investments | 9,078 | 10,138 | 90 |
| – available-for-sale financial assets | 9,078 | 10,138 | 90 |
| Current investments including derivative financial instruments |
0 | 77 | 0 |
| – shares and interests held for trading | 0 | 77 | 0 |
| Total investments | 9,078 | 10,215 | 89 |
Available-for-sale financial assets include €817 thousand of investments in shares and interests in companies in Slovenia, and €8,261 thousand of investments in shares and interests in companies abroad.
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Material | 118,937 | 122,515 | 97 |
| Work in progress | 73,677 | 63,212 | 117 |
| Products | 102,828 | 86,369 | 119 |
| Merchandise | 7,794 | 7,783 | 100 |
| Inventory advances | 1,527 | 774 | 197 |
| Total inventories | 304,763 | 280,653 | 109 |
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Current trade receivables | 485,313 | 510,406 | 95 |
| Other current receivables | 26,660 | 33,777 | 79 |
| Total receivables | 511,973 | 544,183 | 94 |
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Share capital | 54,732 | 54,732 | 100 |
| Treasury shares | -37,546 | -29,690 | 126 |
| Reserves | 109,197 | 109,678 | 100 |
| – reserves for treasury shares | 37,546 | 29,690 | 126 |
| – share premium | 105,897 | 105,897 | 100 |
| – legal reserves | 14,990 | 14,990 | 100 |
| – statutory reserves | 30,000 | 30,000 | 100 |
| – fair value reserves | -12,679 | -11,802 | 107 |
| – translation reserve | -66,557 | -59,097 | 113 |
| Retained earnings | 1,322,227 | 1,308,668 | 101 |
| Total equity holders of the parent | 1,448,610 | 1,443,388 | 100 |
| Non-controlling interests within equity | 1,048 | 1,056 | 99 |
| Total equity | 1,449,658 | 1,444,444 | 100 |
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Provisions for lawsuits | 161 | 166 | 97 |
| Provisions for post-employment benefits and other non-current employee benefits |
91,924 | 89,970 | 102 |
| Other provisions | 932 | 671 | 139 |
| Total provisions | 93,017 | 90,807 | 102 |
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Grants received from the European Fund for Regional | |||
| Development and Republic of Slovenia budget for the production of pharmaceuticals in the new Notol 2 plant |
2,184 | 2,384 | 92 |
| Grants received from the budget for the Dolenjske and | 3,821 | 3,927 | 97 |
| Šmarješke Toplice health resorts and Golf Grad Otočec | |||
| Grants received from the European Regional Development Fund | 266 | 340 | 78 |
| for the development of new technologies (FBD project) | |||
| Grants received from the European Regional Development Fund | |||
| for setting up an information and technology solutions system | 11 | 14 | 79 |
| (GEN-I) | |||
| Grants received from the European Regional Development Fund | 4,919 | 5,419 | 91 |
| for development centres of the Slovenian economy | |||
| Subsidy for acquisition of electric vehicles | 7 | 5 | 140 |
| Property, plant and equipment received free of charge | 36 | 53 | 68 |
| Emission coupons | 9 | 16 | 56 |
| Total deferred revenue | 11,253 | 12,158 | 93 |
Development Centres of the Slovenian Economy and the FBD project are partly funded by the European Union via the European Regional Development Fund. The project is implemented as part of the Operational Programme 2007–2013, Strengthening Regional Development Potentials; 1. Priority axis: Competitiveness and Research Excellence; Priority objective 1.1: Improving Competitiveness and Research Excellence.
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Payables to domestic suppliers | 57,926 | 45,748 | 127 |
| Payables to foreign suppliers | 61,507 | 78,696 | 78 |
| Payables from advances | 2,533 | 3,993 | 63 |
| Total trade payables | 121,966 | 128,437 | 95 |
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Accrued contractual discounts on products sold | 123,620 | 150,080 | 82 |
| Payables to employees – gross wages, other receipts and charges |
39,576 | 38,112 | 104 |
| Derivative financial instruments | 961 | 12,670 | 8 |
| Other | 16,154 | 20,796 | 78 |
| Total other current liabilities | 180,311 | 221,658 | 81 |
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Guarantees issued | 16,226 | 12,846 | 126 |
| Other | 620 | 620 | 100 |
| Total contingent liabilities | 16,846 | 13,466 | 125 |
| 30 Sep 2017 | 31 Dec 2016 | |||
|---|---|---|---|---|
| Carrying | Fair | Carrying | Fair | |
| In € thousand | amount | value | amount | value |
| Non-current loans | 10,456 | 10,456 | 8,801 | 8,801 |
| Available-for-sale financial assets | 9,078 | 9,078 | 10,138 | 10,138 |
| Current loans | 497 | 497 | 9,441 | 9,441 |
| Short-term financial investments | 0 | 0 | 77 | 77 |
| – shares and interests held for trading | 0 | 0 | 77 | 77 |
| Trade receivables | 485,313 | 485,313 | 510,406 | 510,406 |
| Cash and cash equivalents | 30,936 | 30,936 | 38,630 | 38,630 |
| Trade payables and other liabilities, excluding amounts owed to the state, to employees and advances |
-251,659 | -251,659 | -282,784 | -282,784 |
| Other current liabilities | -961 | -961 | -12,670 | -12,670 |
| – derivative financial instruments | -961 | -961 | -12,670 | -12,670 |
| Total | 283,660 | 283,660 | 282,039 | 282,039 |
In terms of fair value, investments are classified into three levels:
The fair value of non-current loans and borrowings
is calculated by applying the discounted cash flow of the principal and interest. The discount interest rate for 2017 and 2016 was computed based on the 2% annual interest rate.
The fair value of securities held for trading is computed on the basis of the stock exchange quotation of the respective securities as at the reporting date, and it is not reduced by any costs that may arise upon the sale or purchase of securities.
| 30 Sep 2017 31 Dec 2016 |
||||||||
|---|---|---|---|---|---|---|---|---|
| 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 | 7,696 | 0 | 1,382 | 9,078 | 8,775 | 0 | 1,363 | 10,138 |
| Shares and interests held for trading |
0 | 0 | 0 | 0 | 77 | 0 | 0 | 77 |
| Total assets at fair value | 7,696 | 0 | 1,382 | 9,078 | 8,852 | 0 | 1,363 | 10,215 |
| Assets for which fair value is disclosed |
||||||||
| Non-current loans | 0 | 0 | 10,456 | 10,456 | 0 | 0 | 8,801 | 8,801 |
| Current loans | 0 | 0 | 497 | 497 | 0 | 0 | 9,441 | 9,441 |
| Trade receivables | 0 | 0 | 485,313 | 485,313 | 0 | 0 | 510,406 | 510,406 |
| Cash and cash equivalents | 0 | 0 | 30,936 | 30,936 | 0 | 0 | 38,630 | 38,630 |
| Total assets for which fair value is disclosed |
0 | 0 | 527,202 | 527,202 | 0 | 0 | 567,278 | 567,278 |
| Total | 7,696 | 0 | 528,584 | 536,280 | 8,852 | 0 | 568,641 | 577,493 |
| 30 Sep 2017 | 31 Dec 2016 | |||||||
|---|---|---|---|---|---|---|---|---|
| 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 | 961 | 961 | 0 | 0 | 12,670 | 12,670 |
| Total liabilities at fair value | 0 | 0 | 961 | 961 | 0 | 0 | 12,670 | 12,670 |
| Liabilities for which fair value is | ||||||||
| disclosed | ||||||||
| Trade payables and other liabilities, excluding amounts owed to the |
0 | 0 | 251,659 | 251,659 | 0 | 0 | 282,784 | 282,784 |
| state, to employees and advances | ||||||||
| Total liabilities for which fair | 0 | 0 | 251,659 | 251,659 | 0 | 0 | 282,784 | 282,784 |
| value is disclosed | ||||||||
| Total | 0 | 0 | 252,620 | 252,620 | 0 | 0 | 295,454 | 295,454 |
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Assets | |||
| Property, plant and equipment | 611,845 | 609,543 | 100 |
| Intangible assets | 27,760 | 29,302 | 95 |
| Investments in subsidiaries | 321,898 | 321,185 | 100 |
| Trade receivables due from subsidiaries | 39,770 | 23,515 | 169 |
| Loans | 14,723 | 18,302 | 80 |
| Investments | 9,076 | 10,136 | 90 |
| Deferred tax assets | 12,227 | 12,101 | 101 |
| Other non-current assets | 103 | 92 | 112 |
| Total non-current assets | 1,037,402 | 1,024,176 | 101 |
| Assets held for sale | 41 | 41 | 100 |
| Inventories | 254,712 | 236,214 | 108 |
| Trade receivables | 450,430 | 479,234 | 94 |
| Other receivables | 12,080 | 21,408 | 56 |
| Loans | 30,789 | 52,504 | 59 |
| Investments | 0 | 77 | 0 |
| Cash and cash equivalents | 17,473 | 24,049 | 73 |
| Total current assets | 765,525 | 813,527 | 94 |
| Total assets | 1,802,927 | 1,837,703 | 98 |
| Equity | |||
| Share capital | 54,732 | 54,732 | 100 |
| Treasury shares | -37,546 | -29,690 | 126 |
| Reserves | 177,562 | 170,583 | 104 |
| Retained earnings | 1,254,659 | 1,244,823 | 101 |
| Total equity | 1,449,407 | 1,440,448 | 101 |
| Liabilities | |||
| Provisions | 80,616 | 78,903 | 102 |
| Deferred revenue | 2,500 | 2,788 | 90 |
| Total non-current liabilities | 83,116 | 81,691 | 102 |
| Trade payables | 148,736 | 148,562 | 100 |
| Borrowings | 43,741 | 105,269 | 42 |
| Income tax payable | 12,832 | 0 | |
| Other current liabilities | 65,095 | 61,733 | 105 |
| Total current liabilities | 270,404 | 315,564 | 86 |
| Total liabilities | 353,520 | 397,255 | 89 |
| Total equity and liabilities | 1,802,927 | 1,837,703 | 98 |
| In € thousand | 1–9/2017 | 1–9/2016 | Index |
|---|---|---|---|
| Revenues | 887,422 | 782,538 | 113 |
| Costs of goods sold | -391,749 | -378,647 | 103 |
| Gross profit | 495,673 | 403,891 | 123 |
| Other operating income | 4,398 | 2,490 | 177 |
| Selling and distribution expenses | -213,120 | -195,171 | 109 |
| R&D expenses | -96,377 | -89,385 | 108 |
| General and administrative expenses | -46,983 | -46,518 | 101 |
| Operating profit | 143,591 | 75,307 | 191 |
| Financial income | 11,100 | 58,910 | 19 |
| Financial expenses | -30,077 | -58,204 | 52 |
| Net financial result | -18,977 | 706 | |
| Profit before tax | 124,614 | 76,013 | 164 |
| Income tax | -18,278 | -3,601 | 508 |
| Net profit | 106,336 | 72,412 | 147 |
| Basic earnings per share* (in €) | 3.30 | 2.23 | 148 |
| Diluted earnings per share** (in €) | 3.30 | 2.23 | 148 |
* Net profit/Average number of shares issued in the period, exclusive of treasury shares
** All shares issued by the Company are ordinary registered shares, therefore the diluted EPS equals the basic EPS.
| In € thousand | 1–9/2017 | 1–9/2016 | Index |
|---|---|---|---|
| Net profit | 106,336 | 72,412 | 147 |
| Other comprehensive income for the period | |||
| Other comprehensive income for the period reclassified to profit or loss in future periods |
|||
| Change in fair value of available-for-sale financial assets | -1,082 | 1,858 | |
| Deferred tax effect | 205 | -448 | |
| Net other comprehensive income for the period reclassified to profit or loss in future periods |
-877 | 1,410 | |
| Total other comprehensive income for the period (net of tax) | -877 | 1,410 | |
| Total comprehensive income for the period (net of tax) | 105,459 | 73,822 | 143 |
| Reserves | Retained earnings | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Reserves for |
Other | ||||||||||
| Share | Treasury | treasury | Share | Legal | Statutory | Fair value | profit | Retained | Profit for | Total | |
| In € thousand Balance at 1 Jan 2017 |
capital 54,732 |
shares -29,690 |
shares 29,690 |
premium 105,897 |
reserves 14,990 |
reserves 30,000 |
reserves -9,994 |
reserves 1,102,165 |
earnings 49,405 |
the period 93,253 |
equity 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 |
| Repurchase 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 Sep 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 |
| 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 | reserves | reserves | earnings | the period | equity |
| Balance at 1 Jan 2016 | 54,732 | -20,071 | 20,071 | 105,897 | 14,990 | 30,000 | -10,993 | 1,051,677 | 50,040 | 136,868 | 1,433,211 |
| Net profit | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 72,412 | 72,412 |
| Total other comprehensive income for the period (net of tax) |
0 | 0 | 0 | 0 | 0 | 0 | 1,941 | 0 | -531 | 0 | 1,410 |
| Total comprehensive income for the period (net of tax) |
0 | 0 | 0 | 0 | 0 | 0 | 1,941 | 0 | -531 | 72,412 | 73,822 |
| Transactions with owners, recognised in equity |
|||||||||||
| Formation of other profit reserves under the resolution of the Management and Supervisory Boards |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 50,488 | -50,488 | 0 | 0 |
| Transfer of previous period's profit to retained earnings |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 136,868 | -136,868 | 0 |
| Repurchase of treasury shares | 0 | -4,972 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -4,972 |
| Formation of reserves for treasury shares | 0 | 0 | 4,972 | 0 | 0 | 0 | 0 | 0 | 0 | -4,972 | 0 |
| Dividends paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -85,932 | 0 | -85,932 |
| Total transactions with owners, recognised in equity |
0 | -4,972 | 4,972 | 0 | 0 | 0 | 0 | 50,488 | 448 | -141,840 | -90,904 |
| Balance at 30 Sep 2016 | 54,732 | -25,043 | 25,043 | 105,897 | 14,990 | 30,000 | -9,052 | 1,102,165 | 49,957 | 67,440 | 1,416,129 |
| In € thousand | 1–9/2017 | 1–9/2016 |
|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Net profit | 106,336 | 72,412 |
| Adjustments for: | 83,852 | 86,158 |
| – amortisation/depreciation | 60,365 | 61,450 |
| – foreign exchange differences | -65 | -2,827 |
| – investment income | -11,467 | -34,466 |
| – investment expenses | 14,951 | 56,975 |
| – interest expenses and other financial expenses | 1,790 | 1,425 |
| – income tax | 18,278 | 3,601 |
| Operating profit before changes in net operating current assets | 190,188 | 158,570 |
| Change in trade receivables | 15,449 | -13,933 |
| Change in inventories | -18,497 | 1,342 |
| Change in trade payables | 4,033 | -13,094 |
| Change in provisions | 642 | -8 |
| Change in deferred revenues | -288 | -283 |
| Change in other current liabilities | 17,175 | -4,441 |
| Income tax paid | 1,294 | -13,583 |
| Net cash from operating activities | 209,996 | 114,570 |
| CASH FLOWS FROM INVESTING ACTIVITIES | ||
| Interest received | 744 | 1,067 |
| Proceeds from sale of current investments | 2 | 0 |
| Dividends received | 15 | 835 |
| Proportionate profit of subsidiaries | 1,027 | 8,969 |
| Proceeds from sale of property, plant and equipment | 267 | 942 |
| Purchase of intangible assets | -2,717 | -1,795 |
| Purchase of property, plant and equipment | -65,239 | -41,516 |
| Acquisition of subsidiaries and a share of minority interest without obtained assets |
-951 | -16,958 |
| Refund of subsequent payments in subsidiaries | 237 | 79 |
| Non-current loans | -1,765 | -2,898 |
| Proceeds from repayment of non-current loans | 15,800 | 1,352 |
| Payments to acquire non-current investments | -49 | -47 |
| Proceeds from sale of non-current investments | 11 | 50 |
| Proceeds/Payments in connection with current investments and loans | 11,177 | 40,276 |
| Payments in connection with derivative financial instruments | -25,820 | -45,041 |
| Proceeds from derivative financial instruments | 9,474 | 21,292 |
| Net cash flows used in investing activities | -57,787 | -33,393 |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Interest paid | -786 | -1,211 |
| Repayment of non-current borrowings | 0 | -500 |
| Acquisition/Repayment of current borrowings | -61,461 | 28,956 |
| Dividends and other profit shares paid | -88,748 | -85,767 |
| Repurchase of treasury shares | -7,856 | -4,972 |
| Net cash used in financing activities | -158,851 | -63,494 |
| Net decrease/increase in cash and cash equivalents | -6,642 | 17,683 |
| Cash and cash equivalents at beginning of the year | 24,049 | 24,622 |
| Effect of exchange rate fluctuations on cash held | 66 | 333 |
| Net cash and cash equivalents at end of the period | 17,473 | 42,638 |
| European Union | South-East Europe | East Europe | Other | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| In € thousand | 1–9/2017 | 1–9/2016 | 1–9/2017 | 1–9/2016 | 1–9/2017 | 1–9/2016 | 1–9/2017 | 1–9/2016 | 1–9/2017 | 1–9/2016 |
| Revenues | 534,402 | 499,362 | 42,923 | 41,676 | 276,812 | 210,094 | 33,285 | 31,406 | 887,422 | 782,538 |
| Other operating income | 4,024 | 2,149 | 32 | 12 | 342 | 329 | 0 | 0 | 4,398 | 2,490 |
| Operating expenses | -458,083 | -457,253 | -32,514 | -32,976 | -236,010 | -197,922 | -21,622 | -21,570 | -748,229 | -709,721 |
| Operating profit | 80,343 | 44,258 | 10,441 | 8,712 | 41,144 | 12,501 | 11,663 | 9,836 | 143,591 | 75,307 |
| Interest income | 318 | 516 | 0 | 0 | 279 | 581 | 0 | 0 | 597 | 1,097 |
| Interest expenses | -739 | -1,313 | 0 | 0 | 0 | 0 | 0 | 0 | -739 | -1,313 |
| Net financial result | 826 | 10,832 | -59 | -24 | -19,619 | -9,012 | -125 | -1,090 | -18,977 | 706 |
| Income tax | -10,227 | -2,117 | -1,329 | -416 | -5,237 | -598 | -1,485 | -470 | -18,278 | -3,601 |
| Net profit | 70,942 | 52,973 | 9,053 | 8,272 | 16,288 | 2,891 | 10,053 | 8,276 | 106,336 | 72,412 |
| Investments | 61,983 | 45,939 | 0 | 0 | 0 | 0 | 0 | 0 | 61,983 | 45,939 |
| Depreciation | 39,788 | 41,265 | 1,258 | 1,342 | 14,783 | 14,332 | 277 | 273 | 56,106 | 57,212 |
| Amortisation | 2,565 | 2,704 | 206 | 226 | 1,328 | 1,138 | 160 | 170 | 4,259 | 4,238 |
| 30 Sep | 31 Dec | 30 Sep | 31 Dec | 30 Sep | 31 Dec | 30 Sep | 31 Dec | 30 Sep | 31 Dec | |
| 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |
| Total assets | 1,275,593 | 1,300,003 | 41,136 | 41,895 | 476,385 | 485,928 | 9,813 | 9,877 | 1,802,927 | 1,837,703 |
| Total liabilities | 248,534 | 296,209 | 8,740 | 9,103 | 73,885 | 65,922 | 22,361 | 26,021 | 353,520 | 397,255 |
| In € thousand | 1–9/2017 | 1–9/2016 | Index |
|---|---|---|---|
| Cost of goods and material | 284,941 | 253,216 | 113 |
| Costs of services | 249,553 | 228,858 | 109 |
| Employee benefit costs | 157,215 | 148,306 | 106 |
| Amortisation and depreciation | 60,365 | 61,450 | 98 |
| Inventory write-offs and allowances | 4,344 | 6,560 | 66 |
| Receivable impairment and write-offs | -44 | 58 | |
| Other operating expenses | 16,387 | 16,649 | 98 |
| Total costs | 772,761 | 715,097 | 108 |
| Change in the value of inventories of products and work in | -24,532 | -5,376 | 456 |
| progress | |||
| Total | 748,229 | 709,721 | 105 |
| In € thousand | 1–9/2017 | 1–9/2016 | Index |
|---|---|---|---|
| Gross wages and salaries and continued pay | 123,142 | 115,207 | 107 |
| Social security contributions | 8,256 | 8,431 | 98 |
| Pension insurance contributions | 16,045 | 15,094 | 106 |
| Post-employment benefits and other non-current employee benefits |
3,193 | 0 | |
| Other employee benefit costs | 6,579 | 9,574 | 69 |
| Total employee benefit costs | 157,215 | 148,306 | 106 |
| In € thousand | 1–9/2017 | 1–9/2016 | Index |
|---|---|---|---|
| Grants and assistance for humanitarian and other purposes | 940 | 944 | 100 |
| Environmental protection expenses | 1,624 | 1,525 | 106 |
| Other taxes and levies | 11,188 | 11,028 | 101 |
| Loss on sale of property, plant and equipment and intangible assets |
840 | 196 | 429 |
| Other expenses | 1,795 | 2,956 | 61 |
| Total other operating expenses | 16,387 | 16,649 | 98 |
Other taxes and levies include taxes (claw-back and similar) that have been imposed in several markets of Krka Group operations in recent periods.
| In € thousand | 1–9/2017 | 1–9/2016 | Index |
|---|---|---|---|
| Net foreign exchange differences | 0 | 24,628 | 0 |
| Interest income | 597 | 1,097 | 54 |
| Change in fair value of investments through profit or loss | 0 | 7 | 0 |
| Proceeds from sale of investments | 2 | 0 | |
| Derivative financial instruments income | 9,474 | 21,292 | 44 |
| – income | 9,474 | 21,292 | 44 |
| Income from dividends and other shares of the profit | 1,027 | 11,886 | 9 |
| – dividends | 15 | 835 | 2 |
| – profits of subsidiaries | 1,012 | 11,051 | 9 |
| Total financial income | 11,100 | 58,910 | 19 |
| Net foreign exchange differences | -14,077 | 0 | |
| Interest expenses | -739 | -1,313 | 56 |
| Change in fair value of investments through profit or loss | 0 | -8 | 0 |
| Derivative financial instruments expenses | -14,111 | -56,770 | 25 |
| – expenses | -25,820 | -45,041 | 57 |
| – change in fair value | 11,709 | -11,729 | |
| Other financial expenses | -1,150 | -113 | 1,018 |
| Total financial expenses | -30,077 | -58,204 | 52 |
| Net financial result | -18,977 | 706 | -2,688 |
Current income tax amounts to €18,198 thousand, which is 14.6% of pre-tax profit. Together with the deferred tax of €80 thousand, the total income tax
Income tax €18,278 thousand
expense in the income statement amounts to €18,278 thousand. The effective tax rate is 14.7%.
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Land | 23,939 | 24,005 | 100 |
| Buildings | 257,512 | 258,880 | 99 |
| Equipment | 266,517 | 278,847 | 96 |
| Property, plant and equipment being acquired | 57,658 | 42,049 | 137 |
| Advances for property, plant and equipment | 6,219 | 5,762 | 108 |
| Total property, plant and equipment | 611,845 | 609,543 | 100 |
The value of property, plant and equipment represents just over 34% of the Company's total assets. Krka's major investments are described in the chapter Investments in the Business Report.
Intangible assets €27,760 thousand
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Concessions, patents, licences and similar rights | 23,845 | 25,635 | 93 |
| Intangible assets being acquired | 3,915 | 3,667 | 107 |
| Total intangible assets | 27,760 | 29,302 | 95 |
Intangible assets include marketing authorisation documentation for new medicines, and software.
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Non-current loans | 14,723 | 18,302 | 80 |
| – loans to subsidiaries | 4,597 | 9,830 | 47 |
| – loans to others | 10,126 | 8,472 | 120 |
| Current loans | 30,789 | 52,504 | 59 |
| – portion of non-current loans maturing next year | 1,243 | 11,708 | 11 |
| – loans to subsidiaries | 29,374 | 32,397 | 91 |
| – loans to others | 124 | 8,203 | 2 |
| – current interest receivable | 48 | 196 | 24 |
| Total loans | 45,512 | 70,806 | 64 |
Non-current loans represent 32% of total loans.
Non-current loans to others include loans that the Company extends in accordance with its internal acts to its employees and that are primarily housing loans.
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Non-current investments | 9,076 | 10,136 | 90 |
| – available-for-sale financial assets | 9,076 | 10,136 | 90 |
| Current investments including derivative financial instruments |
0 | 77 | 0 |
| – shares and interests held for trading | 0 | 77 | 0 |
| Total investments | 9,076 | 10,213 | 89 |
Available-for-sale financial assets include €816 thousand of investments in shares and interests in Slovenia, and €8,260 thousand of investments in shares and interests abroad.
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Material | 107,967 | 112,208 | 96 |
| Work in progress | 72,107 | 61,978 | 116 |
| Products | 63,453 | 52,478 | 121 |
| Merchandise | 9,741 | 8,816 | 110 |
| Inventory advances | 1,444 | 734 | 197 |
| Total inventories | 254,712 | 236,214 | 108 |
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Current trade receivables | 450,430 | 479,234 | 94 |
| – current trade receivables due from subsidiaries | 252,922 | 273,876 | 92 |
| – current trade receivables due from customers other than subsidiaries |
197,508 | 205,358 | 96 |
| Other current receivables | 12,080 | 21,408 | 56 |
| Total receivables | 462,510 | 500,642 | 92 |
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Share capital | 54,732 | 54,732 | 100 |
| Treasury shares | -37,546 | -29,690 | 126 |
| Reserves: | 177,562 | 170,583 | 104 |
| – reserves for treasury shares | 37,546 | 29,690 | 126 |
| – share premium | 105,897 | 105,897 | 100 |
| – legal reserves | 14,990 | 14,990 | 100 |
| – statutory reserves | 30,000 | 30,000 | 100 |
| – fair value reserve | -10,871 | -9,994 | 109 |
| Retained earnings | 1,254,659 | 1,244,823 | 101 |
| Total equity | 1,449,407 | 1,440,448 | 101 |
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Current borrowings | 43,741 | 105,269 | 42 |
| – borrowings from subsidiaries | 43,649 | 105,110 | 42 |
| – current interest payable | 92 | 159 | 58 |
| Total borrowings | 43,741 | 105,269 | 42 |
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Provisions for post-employment benefits and other non-current employee benefits |
80,616 | 78,903 | 102 |
| Total provisions | 80,616 | 78,903 | 102 |
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Grants received from the European Fund for Regional Development and Republic of Slovenia budget for the production of pharmaceuticals in the new Notol 2 plant |
2,184 | 2,384 | 92 |
| Grants received from the European Regional Development Fund for the development of new technologies (FBD project) |
266 | 340 | 78 |
| Grants received from the European Regional Development Fund for setting up an information and technology solutions system (GEN-I) |
11 | 14 | 79 |
| Subsidy for acquisition of electric vehicles | 7 | 5 | 140 |
| Property, plant and equipment received free of charge | 23 | 29 | 79 |
| Emission coupons | 9 | 16 | 56 |
| Total deferred revenue | 2,500 | 2,788 | 90 |
The FBD project is partly funded by the European Union via the European Regional Development Fund. It is implemented as part of the Operational Programme 2007–2013 for Strengthening Regional Development Potentials; 1. Priority axis Competitiveness and Research Excellence; Priority objective 1.1: Improving Competitiveness and Research Excellence.
Trade payables €148,736 thousand
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Payables to subsidiaries | 56,374 | 56,943 | 99 |
| Payables to domestic suppliers | 54,770 | 41,387 | 132 |
| Payables to foreign suppliers | 35,801 | 46,799 | 76 |
| Payables from advances | 1,791 | 3,433 | 52 |
| Total trade payables | 148,736 | 148,562 | 100 |
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Accrued contractual discounts on products sold | 30,371 | 14,141 | 215 |
| Payables to employees – gross wages, other receipts and charges |
27,999 | 27,726 | 101 |
| Derivative financial instruments | 961 | 12,670 | 8 |
| Other | 5,764 | 7,196 | 80 |
| Total other current liabilities | 65,095 | 61,733 | 105 |
| In € thousand | 30 Sep 2017 | 31 Dec 2016 | Index |
|---|---|---|---|
| Guarantees issued | 16,682 | 13,598 | 123 |
| Other | 620 | 620 | 100 |
| Total contingent liabilities | 17,302 | 14,218 | 122 |
| 30 Sep 2017 | 31 Dec 2016 | ||||
|---|---|---|---|---|---|
| Carrying | Fair | Carrying | Fair | ||
| In € thousand | amount | value | amount | value | |
| Trade receivables due from subsidiaries | 39,770 | 39,770 | 23,515 | 23,515 | |
| Non-current loans | 14,723 | 14,723 | 18,302 | 18,302 | |
| Available-for-sale financial assets | 9,076 | 9,076 | 10,136 | 10,136 | |
| Current loans | 30,789 | 30,789 | 52,504 | 52,504 | |
| Short-term financial investments | 0 | 0 | 77 | 77 | |
| – shares and interests held for trading | 0 | 0 | 77 | 77 | |
| Trade receivables | 450,430 | 450,430 | 479,234 | 479,234 | |
| Cash and cash equivalents | 17,473 | 17,473 | 24,049 | 24,049 | |
| Current borrowings | -43,741 | -43,741 | -105,269 | -105,269 | |
| Trade payables and other liabilities, excluding amounts owed to the state, to employees and advances |
-178,585 | -178,585 | -160,861 | -160,861 | |
| Other current liabilities | -961 | -961 | -12,670 | -12,670 | |
| – derivative financial instruments | -961 | -961 | -12,670 | -12,670 | |
| Total | 338,974 | 338,974 | 329,017 | 329,017 |
In terms of fair value, investments are classified into three levels:
The fair value of non-current loans and borrowings is calculated by applying the discounted cash flow of the principal and interest. The discount interest rate for 2017 and 2016 was computed based on the 2% annual interest rate.
The fair value of securities held for trading is computed on the basis of the stock exchange quotation of the respective securities as at the reporting date, and it is not reduced by any costs that may arise upon the sale or purchase of securities.
| 30 Sep 2017 | 31 Dec 2016 | |||||||
|---|---|---|---|---|---|---|---|---|
| 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 | 7,696 | 0 | 1,380 | 9,076 | 8,775 | 0 | 1,361 | 10,136 |
| Shares and interests held for trading |
0 | 0 | 0 | 0 | 77 | 0 | 0 | 77 |
| Total assets at fair value | 7,696 | 0 | 1,380 | 9,076 | 8,852 | 0 | 1,361 | 10,213 |
| Assets for which fair value is disclosed |
||||||||
| Trade receivables due from subsidiaries |
0 | 0 | 39,770 | 39,770 | 0 | 0 | 23,515 | 23,515 |
| Non-current loans | 0 | 0 | 14,723 | 14,723 | 0 | 0 | 18,302 | 18,302 |
| Current loans | 0 | 0 | 30,789 | 30,789 | 0 | 0 | 52,504 | 52,504 |
| Trade receivables | 0 | 0 | 450,430 | 450,430 | 0 | 0 | 479,234 | 479,234 |
| Cash and cash equivalents | 0 | 0 | 17,473 | 17,473 | 0 | 0 | 24,049 | 24,049 |
| Total assets for which fair value is disclosed |
0 | 0 | 553,185 | 553,185 | 0 | 0 | 597,604 | 597,604 |
| Total | 7,696 | 0 | 554,565 | 562,261 | 8,852 | 0 | 598,965 | 607,817 |
| 30 Sep 2017 | 31 Dec 2016 | |||||||
|---|---|---|---|---|---|---|---|---|
| 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 | 961 | 961 | 0 | 0 | 961 | 961 |
| Total liabilities at fair value | 0 | 0 | 961 | 961 | 0 | 0 | 961 | 961 |
| Liabilities for which fair value is disclosed |
||||||||
| Current borrowings | 0 | 0 | 43,741 | 43,741 | 0 | 0 | 43,741 | 43,741 |
| Trade payables and other liabilities, excluding amounts owed to the state, to employees and advances |
0 | 0 | 178,585 | 178,585 | 0 | 0 | 178,585 | 178,585 |
| Total liabilities for which fair value is disclosed |
0 | 0 | 222,326 | 222,326 | 0 | 0 | 222,326 | 222,326 |
| Total | 0 | 0 | 223,287 | 223,287 | 0 | 0 | 223,287 | 223,287 |
The Management Board of Krka, d. d., Novo mesto hereby states that the condensed financial statements of the Krka Company and the condensed consolidated financial statements of the Krka Group for the nine months ended 30 September 2017 were drawn up so as to provide a true and fair view of the financial standing and operating results of the Krka Company and the Krka Group. The condensed statements for the period January–September 2017 were drawn up using the same accounting principles as for the annual financial statements of the Krka Company and Group for 2016.
The condensed interim financial statements for the nine months ended 30 September 2017 were drawn
Novo mesto, 19 October 2017
up pursuant to IAS 34 – Interim Financial Reporting, and must be read in conjunction with the annual financial statements drawn up for the business year ended 31 December 2016.
The Management Board is responsible for implementing measures to maintain the value of the Krka Company and Krka Group assets, and to prevent and detect frauds or other forms of misconduct.
The Management Board states that all transactions between Krka Group companies were executed on the basis of purchase contracts, using market prices for products and services. There were no significant transactions with any other related parties.
Jože Colarič President of the Management Board and Chief Executive
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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