Unaudited Interim Report for January-March 2016

Transkrypt

Unaudited Interim Report
for the Krka Group
and the Krka Company
for January–March 2016
Novo mesto, May 2016
CONTENTS
Introduction .............................................................................................................................................................. 3
Highlights January–March 2016 .......................................................................................................................... 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
Events after the accounting period ...................................................................................................................... 9
Business report...................................................................................................................................................... 10
Financial risk ..................................................................................................................................................... 10
Investor and share information.......................................................................................................................... 11
Business operations analysis ............................................................................................................................ 14
Marketing and sales .......................................................................................................................................... 16
Research and development .............................................................................................................................. 26
Investments ....................................................................................................................................................... 27
Employees ........................................................................................................................................................ 28
Condensed consolidated financial statements of the Krka Group, with notes ....................................................... 30
Consolidated statement of financial position of the Krka Group ........................................................................ 30
Consolidated income statement of the Krka Group........................................................................................... 31
Consolidated statement of other comprehensive income of the Krka Group .................................................... 32
Consolidated statement of changes in equity of the Krka Group ...................................................................... 33
Consolidated statement of cash flows of the Krka Group.................................................................................. 35
Segment reporting of the Krka Group ............................................................................................................... 36
Notes to the consolidated financial statements of the Krka Group .................................................................... 37
Condensed financial statements of Krka, d. d., Novo mesto, with notes ............................................................... 43
Statement of financial position of Krka, d. d., Novo mesto ................................................................................ 43
Income statement of Krka, d. d., Novo mesto ................................................................................................... 44
Statement of other comprehensive income of Krka, d. d., Novo mesto ............................................................ 44
Statement of changes in equity of Krka, d. d., Novo mesto .............................................................................. 45
Statement of cash flows of Krka, d. d., Novo mesto.......................................................................................... 47
Segment reporting of Krka, d. d., Novo mesto .................................................................................................. 48
Notes to the financial statements of Krka, d. d., Novo mesto ............................................................................ 49
Management Board statement of responsibilities .................................................................................................. 55
2
Unaudited Interim Report for the Krka Group and the Krka Company for January–March 2016
INTRODUCTION
The condensed financial statements of the Krka
Group and the condensed financial statements of
Krka, d. d., Novo mesto (Krka Company) for the
periods January–March 2016 and 2015 are
unaudited, while the financial statements for the full
2015 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.
This interim report for the Krka Group and the Krka
Company is available on the Krka website
www.krka.si.
The Krka Company Supervisory Board discussed
the January–March 2016 Report for the Krka Group
and the Krka Company at its regular meeting on
11 May 2016.
Highlights January–March 2016
• The Krka Group sold €300.9 million worth of
products and services, and Krka Company sales
amounted to €263.4 million.
• The Krka Group sales increased by 4%
compared to the first quarter 2015, and the Krka
Company sales were up 1%.
• The highest absolute year-on-year sales growth
(up €7.1 million) was recorded in Region SouthEast Europe, and the highest relative sales
growth (up 33%) in Region Overseas Markets.
• Krka’s largest sales region are West Europe and
East Europe, contributing 26.6% of total sales
each.
• The Krka Group generated 93%, and the Krka
Company 95% of its revenues in markets
outside Slovenia.
• The Krka Group generated €50.4 million of
operating profit, an increase by 17% compared
to the same period last year, and the Krka
Company €39.4 million, up 16%.
• The Krka Group reported a net profit of
€40.2 million, down 27% compared to the same
period last year, and the Krka Company
generated €32.8 million of net profit, down 34%.
• Lower year-on-year net profit at Group and
Company level is attributable to increased
financial expenses on account of the change in
the fair value of derivatives. In the first quarter of
2015 there were also higher exchange rate
gains than this year, which resulted from the
Russian rouble's appreciation and which had
thus increased financial income in that period.
• As at 31 March 2016 Krka's share traded at
€61.50 on the Ljubljana Stock Exchange (down
5.7% from the year-end of 2015), and Krka
Company's market capitalisation amounted to
€2.0 billion.
• The Krka Group allocated €26.2 million to
investments, of which the Krka Company
invested €18.5 million and subsidiaries €7.7
million.
• At the end of March 2016 the Krka Group had
10,708 employees, which is an increase by 144,
or 1%, from the beginning of the year.
3
Krka Group and Krka Company financial highlights
Krka Group
Krka Company
In € thousand
1–3/2016
1–3/2015
1–3/2016
1–3/2015
Revenues
300,892
289,304
263,371
260,756
EBIT1
50,438
43,068
39,366
34,034
EBITDA
76,839
69,327
60,124
54,387
Net profit
40,196
55,114
32,785
49,551
R&D expenses
29,697
27,722
31,154
28,853
Investments
26,179
20,289
18,497
17,458
31 Mar 2016
31 Dec 2015
31 Mar 2016
31 Dec 2015
Non-current assets
992,087
986,598
1,014,367
999,975
Current assets
878,225
822,606
803,992
761,737
1,451,078
1,405,984
1,464,475
1,433,211
Non-current liabilities
110,887
110,982
76,998
76,753
Current liabilities
308,347
292,238
276,886
251,748
1–3/2016
1–3/2015
1–3/2016
1–3/2015
EBIT margin
16.8%
14.9%
14.9%
13.1%
EBITDA margin
25.5%
24.0%
22.8%
20.9%
Profit margin (ROS)
13.4%
19.1%
12.4%
19.0%
ROE2
11.3%
15.9%
9.1%
14.1%
ROA3
8.7%
12.1%
7.3%
11.1%
Liabilities/Equity
0.289
0.310
0.242
0.255
R&D costs/Revenues
9.9%
9.6%
11.8%
11.1%
31 Mar 2016
31 Dec 2015
31 Mar 2016
31 Dec 2015
10,708
10,564
4,823
4,798
Equity
RATIOS
NUMBER OF EMPLOYEES (as at)
SHARE INFORMATION
Total number of shares issued
Earnings per share in €4
Closing price at end of period in €5
Price/Earnings ratio (P/E)
Book value in €6
Price/Book ratio (P/B)
Market capitalisation in € thousand (end of period)
1–3/2016
32,793,448
4.95
61.50
12.43
44.25
1.39
2,016,797
1–3/2015
32,793,448
6.77
61.40
9.08
43.35
1.42
2,013,518
1 Difference
between operating income and expenses
Net profit, annualised/Average shareholders' equity in the period
3 Net profit, annualised/Average total assets in the period
4 Net profit attributable to majority owners of the Krka Group, annualised/Average number of shares issued in the period exclusive of
treasury shares
5 Share price on the Ljubljana Stock Exchange
6 Equity at the end of the period/Total shares issued
2
4
Krka Group ID card
The controlling company in the Krka Group is Krka, tovarna zdravil, d. d., Novo mesto (Krka, d. d. or the Krka
Company).
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. Krka
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 Group business model
Krka is one of the world’s leading generic
pharmaceutical companies. Its registered office is in
Slovenia, and it has over 60 years of experience in
the industry.
Krka is the leader in the Slovenian market, and it
also has a significant presence in the generic
pharmaceutical markets of Eastern, Central and
South-Eastern Europe, having been gaining ever
stronger visibility in Western European markets in
recent years as well. We have been strengthening
our presence in overseas markets, aiming to further
exploit the sales potential of the Middle East, Far
East, Africa and the Americas. We have production
and distribution facilities in Slovenia, the Russian
Federation, Poland, Croatia and Germany.
Our modern pharmaceutical production and
vertically integrated business model allow us to
provide patients in over 70 countries with a wide
range of safe, high quality and effective prescription
pharmaceuticals, non-prescription products and
animal health products. Krka's product range
primarily consists of solid dosage pharmaceutical
forms. Our product range is supplemented by the
health resort and tourist services of Terme Krka.
We focus on generic prescription pharmaceuticals
marketed under Krka's own brands. We offer
numerous medicinal products for the treatment of
conditions from key therapeutic areas, including
pharmaceuticals for cardiovascular diseases, for
alimentary and metabolic diseases, and for
diseases of the central nervous system. We have
also been entering new therapeutic areas (oncology
and antiviral medicines), selected ones also with
non-prescription products.
We have been expanding our marketing and sales
network and thereby gaining market shares by
establishing subsidiaries in selected markets. Our
objective is to strengthen the Krka Group's market
position in European and Central Asian markets,
and to enter new high-potential markets.
Striving to increase the competitive advantage of
Krka's product range, we have been allocating a
large proportion of our revenues to research and
development. More than 170 new products are
currently 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.
5
Krka Group companies
Central Europe
East Europe
Poland
KRKA - POLSKA, Sp. z o.o.
Russian Federation
OOO KRKA-RUS
Czech Republic
KRKA ČR, s. r. o.
Russian Federation
OOO KRKA FARMA
Hungary
KRKA Magyarország Kft.
Slovenia
Ukraine
TOV KRKA UKRAINA
Slovakia
KRKA Slovensko, s. r. o.
KRKA, d. d., Novo mesto
Kazakhstan
TOO KRKA Kazahstan
TERME KRKA, d. o. o.,
Novo mesto
West Europe
Lithuania
UAB KRKA Lietuva
Latvia
SIA KRKA Latvia
Farma GRS, d. o. o.,
Novo mesto
Germany
TAD Pharma GmbH
Sweden
Krka Sverige AB
Austria
KRKA Pharma GmbH, Wien
Ireland
KRKA PHARMA DUBLIN LIMITED
Portugal
KRKA Farmacêutica, Unipessoal Lda.
Spain
KRKA FARMACÉUTICA, S.L.
South-East Europe
Italy
KRKA FARMACEUTICI MILANO S.R.L.
Croatia
KRKA-FARMA, d. o. o.
France
KRKA France Eurl a capital variable
Romania
KRKA ROMANIA S.R.L.
Belgium
KRKA Belgium, SA
Serbia
KRKA-FARMA DOO BEOGRAD
UK
KRKA UK Ltd
Macedonia
KRKA-FARMA DOOEL Skopje
Finland
KRKA Finland Oy
Bosnia and Herzegovina
KRKA FARMA d. o. o., Sarajevo
Overseas Markets
USA
KRKA USA LLC
Bulgaria
KRKA Bulgaria EOOD
Production and distribution companies
Other subsidiaries outside Slovenia
Health resort and tourist services company
EU project: research and development company
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
6
Krka Belgium (95%); the remaining 5% in the latter
is held by the subsidiary Krka France Eurl a capital
variable.
Krka Group development strategy
The Krka Group development strategy is updated
on a bi-annual basis. In November 2015 the Krka
Management Board adopted the Krka Group's
development strategy for the period 2016–2020,
and presented it to the Supervisory Board.
The success of implementing strategic objectives is
measured against performance criteria 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 Krka Group is
monitored by the Management Board, while
performance at the level of product and service
groups, and business functions, is monitored by the
relevant committees. The key principle in managing
performance criteria is increasing competitiveness
of the entire Krka Group and of each company
individually.
The key Krka Group objectives and strategies to
2020 are set out below.
Key strategic objectives to 2020
•
•
•
•
•
Report an average annual sales volume growth
of at least 5%.
In addition to organic growth, expand through
acquisitions and long-term partnerships
(including joint ventures).
Allocate a few hundred million euros in the fiveyear strategic period for available commercially
appealing acquisition targets.
Have new products account for at least one
third of total sales.
Be the first generic producer to launch selected
products on selected key markets.
•
•
•
•
•
•
Strengthen the competitive advantage of our
product range.
Maintain the largest possible share of vertically
integrated products.
Improve the cost-effective use of assets.
Increase cost-effectiveness in products.
Improve innovation across all business
functions.
Maintain independence.
Key strategies to 2020
•
•
•
•
•
Prioritise focus on European and Central Asian
markets.
Maximise the utilisation of the sales potential in
all sales regions (Slovenia, South-East Europe,
East Europe, Central Europe, West Europe,
Overseas Markets).
Focus on key markets (Slovenia, Croatia,
Romania, Ukraine, the Russian Federation,
Poland, Hungary, the Czech Republic,
Slovakia, West Europe), key customers and
key products.
Strengthen and consolidate Krka's presence in
the markets of Western Europe with our own
marketing and sales companies and our own
brands.
Strengthen the pharmaceuticals and chemicals
business, and in this respect expand our range
of prescription pharmaceuticals for three key
therapeutic areas (cardiovascular diseases, the
alimentary tract and metabolism, and the
•
•
•
•
•
central nervous system), while also entering
new areas (oncology, antiviral medicines) and
expanding the range of non-prescription
products in selected therapeutic fields.
Strengthen vertical integration from product
development to sale.
Ensure a permanent supply of incoming
materials and optimise supply by aiming to
continuously reduce purchasing prices.
Develop generic pharmaceuticals and prepare
their marketing authorisation documentation
prior to the expiry of the patent for the original
medicine.
Strengthen all types of relationships in the area
of development with external institutions and
companies.
Continue to increase investments in production,
development and infrastructure capacities.
7
•
•
•
•
Search for options to purchase local
pharmaceutical companies, make business
acquisitions, and enter into various long-term
joint ventures in selected markets, the primary
objective being to acquire market shares and
enter new therapeutic areas.
Reduce the impact of financial risk and
economic hazards on Krka Group operations.
Pursue a dividend-increase policy whereby up
to 50% of the previous year's consolidated net
profit attributable to majority owners is allocated
to dividends, with the Krka Company's financial
requirements connected to investments and
acquisitions also being taken into account.
Be open to prospective business combinations
(networking) on relevant projects.
•
•
•
•
•
Strengthen the professional and cost synergy
within the Krka Group, and maximise the
utilisation of competitive advantages in the
business environments of Krka companies
outside Slovenia.
Strengthen the internationalisation of all
business functions by implementing English
and Russian as the key foreign languages of
communication in the Krka Group.
Mobilise the internal human resource potential
with a business and goal orientation.
Maintain economic, social and environmental
responsibility to the surroundings in which we
operate.
Operate on the principles of business
excellence and thereby strengthen Krka's
identity and positive public profile.
Krka Group business objectives for 2016
•
•
•
8
Product and service sales are expected to total
€1,210 million.
Sales in markets outside Slovenia are expected
to account for 93% of total sales.
Prescription pharmaceuticals will remain the
most important product group, accounting for
83% of total sales.
•
•
•
Net profit is planned to amount to €160 million.
The number of employees is planned to
increase both in Slovenia and abroad, together
by more than 4%.
The €162 million of planned investments will
primarily expand and modernise production and
R&D capacities, and infrastructure.
Events after the accounting period
• At the meeting of the Supervisory Board of
30 March 2016, Matej Pirc informed members of
the Supervisory and Management Boards about
his resignation from the post of a member and
President of the Supervisory Board of Krka,
d. d., Novo mesto. The resignation enters into
effect on the date of the first regular Annual
General Meeting of Shareholders of Krka, d. d.,
Novo mesto (AGM). According to the financial
calendar, the AGM is planned for 7 July 2016.
At their meeting of 11 May 2016, following the
motion put forward by the Human Resource
Committee, the Supervisory Board decided to
propose to the AGM Boris Žnidarič be elected a
Supervisory Board member – shareholder
representative, the post vacated by Matej Pirc.
The Supervisory Board did not form the
Nominations Committee for that purpose. Its
function was performed by the Human Resource
Committee in accordance with the Rules of
Procedure for the Supervisory Board.
• At their meeting of 11 May 2016, the
Supervisory Board appointed Jože Mermal
President of the Supervisory Board in place of
Boris Žnidarič, PhD of Social Sciences and
Master of Law, is a member of the Management
Board of Kapitalska družba. Before that, he
successfully worked in many areas of the Triglav
Group, an insurance group. He assisted the
President of the Management Board of
Zavarovalnica Triglav, where he coordinated the
work of directors and was in charge of strategic
area of HRM in subsidiaries. He was a member
of the Management Board of Triglav Osiguranje
Zagreb. He was also in charge of the regional
unit of Zavarovalnica Triglav in Celje, and led
the central department for prevention and
detection of insurance fraud. Before that, he was
an adviser to the management board member
for the strategic area of HRM of the Triglav
Group. He also worked as the assistant director
for legal, HR and general affairs in the Ljubljana
regional unit. He holds a certificate of
professional competence for supervisory board
memberships. Besides his diverse career in
insurance, he is also a habilitated university
lecturer.
Matej Pirc, and Anja Strojin Štampar Deputy
President of the Supervisory Board, their terms
commencing on 7 July 2016.
9
BUSINESS REPORT
Financial risk
Foreign exchange risk
Due to widespread international operations, the
Krka Group is exposed to foreign exchange risk in
certain sales markets.
Exposure to foreign exchange risk resulted in €10.4
million of exchange rate gains in the first quarter of
2016. The majority is exchange rate gains from
movements of the rouble, while the effects of other
currencies balanced each other out and represent
only a minor aggregate contribution to the total
amount.
The rouble was unstable in the first quarter, chiefly
due to the continued high volatility of oil prices. In
mid-February 2016 they reached their lowest point
in several years. Decreasing oil prices at the
beginning of 2016 were caused by supply
exceeding demand and by the uncertainty with
respect to economic growth in China. The latter was
further reflected in the downward trends of all key
global stock indices. Conditions in stock markets
have improved since mid-February, owing to a large
extent to the activities of the Chinese, Japanese,
US and EMU central banks. Amidst advances in
stock markets, decreased risk of economic growth
in China weakening, and forecasts of oil producing
countries' plans to potentially freeze output, oil
prices gradually increased in the second half of the
first quarter.
Due to the rouble's high volatility, we preserved
occasionally hedging of our rouble positions in the
first quarter of 2016. Hedging resulted in derivatives
income as inflows, and in derivatives expenses as
the change in fair value.
Together with the exchange rate gains, the net
effect of exposure to foreign exchange risk in the
income statement for the first quarter of 2016 is €4.0 million.
Foreign exchange risks associated with other
currencies were not hedged in the reported period.
Interest rate risk
The Krka Group was not exposed to reference
interest rate risk in the first quarter, as all noncurrent borrowings had been paid back in previous
years and no new non-current loans were taken out
this year.
Credit risk
The credit control process involves obtaining credit
ratings for customers to which the controlling
company and subsidiaries sell products worth an
annual €100,000 or more, and regular, dynamic
monitoring of customer payment discipline.
Approximately one half of the Krka Group's total
trade receivables have credit insurance coverage or
are hedged with financial instruments. Our policy of
hedging receivables did not change in the reported
period.
More than 90% of the Krka Group’s trade
receivables were included in the credit control
process at the end of the first quarter.
The amount of past due and outstanding
receivables at the end of the first quarter was at a
level that Krka considers normal and acceptable.
Customer payment discipline is estimated to have
remained unchanged, and we did not write off any
major trade receivables.
Total trade receivables were up at the end of the
first quarter compared to the beginning of the year,
the positive restatement largely due to the
appreciation of individual currencies.
10
Liquidity risk
Risks related to the Krka Group’s liquidity were
managed by effective short-term cash flow planning.
Short-term liquidity was ensured through regular
cash flows and pre-agreed short-term revolving
borrowings from banks, and the daily, rolling weekly,
monthly and longer-term planning and monitoring of
cash inflows and outflows. We also optimised the
bank balances of Krka's subsidiaries.
With the volume of our current borrowings in the
reported period small, liquidity risk is estimated as
low. All our liabilities in the reported period were
settled regularly and in the agreed time frames.
Property, business interruption and liability insurance
On the basis of a thorough optimisation of insurance
deals and an assessment of 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 parent company provided insurance coverage
for investment projects. It also conducted an analysis
of car insurance arrangements in the Krka Group,
finding that the effects of the implemented measures
have had a positive effect and have made a
substantial contribution to driving the insurance
premium down and to decreasing the number of loss
events.
Investor and share information
At the end of March 2016 Krka had 58,012
shareholders, which is 1.3% less than at the end of
2015. The decrease was mainly due to fewer
Slovenian individual investors. The shareholdings of
Krka's shareholders did not change considerably in
the first quarter of 2016.
Shareholder structure (%)
31 Mar 2016
39.7
16.2
11.0
8.1
23.9
1.1
100.0
Individual Slovenian investors
Slovenian Sovereign Holding
KAD fund and PPS
Slovenian legal entities and funds
International investors
Treasury shares
Total
At the end of March 2016 Krka held 356,177
treasury shares, which represents 1.1% of its share
capital.
31 Dec 2015
39.8
16.2
11.0
8.2
23.8
1.0
100.0
The Krka Company repurchased 29,900 treasury
shares on the Ljubljana Stock Exchange in the first
quarter of 2016, worth a total of €1,838,131.
11
Krka's ten largest shareholders as at 31 March 2016
Country
Slovenia
Slovenia
Croatia
Croatia
Poland
Slovenia
USA
Slovenia
USA
USA
SLOVENSKI DRŽAVNI HOLDING, D. D.
KAPITALSKA DRUŽBA, D. D.
SOCIETE GENERALE-SPLITSKA BANKA D. D.
HYPO ALPE-ADRIA-BANK D. D.
KDPW
LUKA KOPER, D. D.
NEW WORLD FUND INC
ZAVAROVALNICA TRIGLAV, D. D.
THE BANK OF NEW YORK MELLON
AMERICAN FUNDS INSURANCE SERIES
Total
Krka's ten largest shareholders held a total of
14,338,106 shares at the end of March 2016, which
is almost 43% of all issued shares.
No. of
shares
5,312,070
3,493,030
2,131,390
1,168,648
496,048
433,970
400,000
388,300
282,404
232,246
14,338,106
Share in
equity
(%)
16.20
10.65
6.50
3.56
1.51
1.32
1.22
1.18
0.86
0.71
42.72
Share of
voting rights
(%)
16.38
10.77
6.57
3.60
1.53
1.34
1.23
1.20
0.87
0.72
44.20
On 31 March 2016 members of the Krka
Management Board and Supervisory Board held a
total of 38,030 shares, which is 0.116% of all issued
shares.
Shares in equity and shares of voting rights held by members of the Krka Management Board and
Supervisory Board on 31 March 2016
Management Board members
Jože Colarič
Aleš Rotar
David Bratož
Vinko Zupančič
Milena Kastelic
Total Management Board
Supervisory Board members
Julijana Kristl
Jože Mermal
Matej Pirc
Andrej Slapar
Simona Razvornik Škofič
Anja Strojin Štampar
Tomaž Sever
Franc Šašek
Mateja Vrečer
Total Supervisory Board
12
No. of shares
Share
in equity (%)
Share of
voting rights (%)
22,500
13,023
0
120
505
36,148
0.06861
0.03971
0.00000
0.00037
0.00154
0.11023
0.06936
0.04015
0.00000
0.00037
0.00156
0.11144
230
0
152
0
0
0
500
1,000
0
1,882
0.00070
0.00000
0.00046
0.00000
0.00000
0.00000
0.00152
0.00305
0.00000
0.00574
0.00071
0.00000
0.00047
0.00000
0.00000
0.00000
0.00154
0.00308
0.00000
0.00580
Share trading January–March 2016
In the first quarter of 2016 Krka's share price on the
Ljubljana Stock Exchange decreased by 5.7% to
stand at €61.50 at the end of March. In the same
period, the Slovenian blue-chip index SBI TOP was
up 4.3%. Krka's market capitalisation as at
31 March 2016 totalled €2.0 billion.
With a daily trading volume averaging €0.3 million,
Krka was the most traded share on the Ljubljana
Stock Exchange in the first quarter of 2016.
13
Business operations analysis
The business operations analysis includes data for the Krka Group and the Krka Company, while the comments
relate primarily to the Krka Group.
Revenues and other income
prescription products and animal health products,
while the Krka Group generated €300.9 million of
revenues from these products plus the health resort
and tourist services. The Krka Group generated
93% of its revenues in markets outside Slovenia.
Taking into account other operating and financial
income, the Krka Group generated a total of
€334.6 million of revenues, and the Krka Company
€297.1 million.
Year-on-year revenues were up 4% at the level of
the Krka Group and 1% at the level of the Krka
Company. The Krka Company sold €263.4 million
worth of prescription pharmaceuticals, non-
A more detailed analysis of sales results by
individual markets and by groups of products and
services is given in the chapter Marketing and Sales
below.
Expenses
Total Krka Group expenses incurred in the first
quarter of 2016 amounted to €288.0 million, up 16%
compared to the same period last year. This is
mainly due to higher financial expenses from the
change in the fair value of derivatives in the amount
of €35.7 million.
The Krka Group incurred €252.2 million of operating
expenses, a 2% year-on-year increase, among
which the costs of goods sold were €130.7 million,
selling and distribution expenses €71.2 million, R&D
expenses €29.7 million, and general and
14
administrative expenses €20.6 million.
Krka Group's costs of goods sold increased by 7%,
on a costs to sales ratio of 43.4%. Selling and
distribution expenses decreased by a tenth, on a
costs to sales ratio of 23.7%. R&D expenses
increased by 7%, on a costs to sales ratio of 9.9%.
The Krka Group does not capitalise R&D expenses,
therefore they are recognised as expenses for the
period in full. General and administrative expenses
increased by 8%, on a costs to sales ratio of 6.9%.
Operating result
The Krka Group recorded €50.4 million of operating
profit, up 17% from the comparable period last year.
Profit before tax amounted to €46.6 million, a 27%
year-on-year decrease. Income tax totalled €6.4
million, and the effective tax rate was 13.8%.
The Krka Group recorded €40.2 million of net profit,
a 27% year-on-year decrease, while the Krka
Company generated €32.8 million of net profit,
down 34%.
Assets
At the end of March 2016 Krka Group assets
totalled €1,870.3 million, an increase by 3%
compared to the year-end of 2015.
and represents 44.5% of the Krka Group's total
assets. Intangible assets amounted to €115.6
million, down 1% from the end of 2015.
Non-current assets represent 53.0% of total assets,
the proportion down 1.5 of a percentage point from
the beginning of the year. The largest item under
non-current assets, which totalled €992.1 million,
was property, plant and equipment on €832.7
million, which is a 1% increase from the end of 2015
Current assets were up 7% in the three months of
2016, to €878.2 million, with inventories decreasing
by 3% to €265.1 million, and receivables up 5% to
€487.8 million (of which trade receivables amounted
to €459.1 million, up 6% from the beginning of the
year).
Equity and liabilities
From the end of 2015 the Krka Group‘s equity
increased by 3% to €1,451.1 million, and represents
77.6% of total equity and liabilities.
Amounting to €110.9 million, non-current liabilities
represent 5.9% of the Krka Group's total assets.
Provisions, which amounted to €85.2 million at the
end of the period, were at the same level as at the
end of 2015.
Current liabilities increased by 6% from the end of
2015 and totalled €308.3 million, which is 16.5% of
the Krka Group's total assets. Among current
liabilities, trade payables amounted to €99.1 million,
down 5% compared to the end of 2015, with other
current liabilities up 10% to €198.2 million.
15
Performance ratios
The Krka Group profit margin for the first quarter of
2016 totalled 13.4% (Krka Company 12.4%), its
EBIT margin 16.8% (Krka Company 14.9%) and its
EBITDA margin 25.5% (Krka Company 22.8%).
ROE at the level of the Krka Group was 11.3%
(Krka Company 9.1%), with ROA at 8.7% (Krka
Company 7.3%).
Marketing and sales
Krka Group sales in the three months to March were
€300.9 million, a 4% year-on-year increase, with
Krka Company sales totalling €263.4 million, up 1%.
The volume of sales at Krka Group level increased
by more than 12% compared to the first quarter last
year.
Sales by Regions
Sales were the highest in Region East Europe,
where they amounted to €80.1 million, which is
26.6% of total Krka Group sales. The second best
result was reported for Region West Europe, with
€80.0 million of revenues generated there, which
represents 26.6% of total sales. The third largest
area in terms of sales was Region Central Europe,
where Krka sold €73.0 million worth of products in
In € thousand
Slovenia
South-East Europe
East Europe
Central Europe
West Europe
Overseas Markets
Total
16
1–3/2016
20,151
37,744
80,117
72,984
80,002
9,894
300,892
Krka Group
1–3/2015
19,204
30,610
81,484
68,421
82,134
7,451
289,304
the reported period, which is 24.3% of overall sales.
In Region South-East Europe sales amounted to
€37.7 million, which represents 12.5% of Krka
Group sales. In the domestic market sales totalled
€20.2 million, which is 6.7% of total Krka Group
sales. Product sales in Region Overseas Markets
amounted to €9.9 million, which represents 3.3% of
Krka Group sales.
Index
105
123
98
107
97
133
104
Krka Company
1–3/2016
1–3/2015
13,381
13,187
38,975
34,179
67,523
78,749
74,670
70,701
60,402
57,035
8,420
6,905
263,371
260,756
Index
101
114
86
106
106
122
101
Krka Group sales by Region, January–March
2016
Krka Group sales by Region, January–March
2015 and 2016
Slovenia
Holding a 9.3% market share, we remain the
leading provider of pharmaceuticals in the domestic
market, which we consider one of Krka's key
markets. Product sales in the three months of 2016
there totalled €12.2 million, up 2% compared to the
same period last year. The majority, 77%, came
from prescription pharmaceuticals, followed by nonprescription products on a 19% and animal health
products on a 4% share in overall sales. Health
resort and tourist service sales in the period were
€7.2 million.
In
the
leading
group of
prescription
pharmaceuticals, the most attention continues to be
devoted to products treating cardiovascular
diseases, especially the blood-pressure control
treatment Prenessa (perindopril) and the fixed-dose
combinations Prenewel (perindopril/indapamide),
Amlessa (perindopril/amlodipine) and Amlewel
(perindopril, amlodipine and indapamide). As to
products controlling cholesterol levels, we
strengthened the brand Sorvasta (rosuvastatin) and
launched Rosmela (amlodipine and rosuvastatin),
the first polypill for the combined treatment of
cholesterol and blood-pressure levels. As to
pharmaceuticals for the treatment of the central
nervous system, the majority of marketing activities
focused on the antidepressant Dulsevia
(duloxetine),
the
antipsychotic
Aryzalera
(aripiprazole) and the analgesic Doreta (tramadol
and paracetamol). Among products treating
diseases of the alimentary tract, brand recognition
was strengthened for Nolpaza (pantoprazole), a
medicine reducing the secretion of stomach acid.
Marketing activities for the group of non-prescription
products centred around the new Septabene brand.
As to veterinary health, Ataxxa (imidacloprid and
permethrin) was added to the group of Krka's
products treating external parasites.
At the end of the first quarter, our main sales drivers
were the prescription pharmaceuticals Prenessa
(perindopril), including the combination with
indapamide, Nolpaza (pantoprazole), Sorvasta
(rosuvastatin) and Doreta (tramadol and
paracetamol). The leading non-prescription products
were Nalgesin S (naproxen), Daleron (paracetamol),
Septolete and Septabene (benzydamine and
cetylpyridinium), while in the group of animal health
products the sales leaders were Fypryst (fipronil),
Enroxil (enrofloxacin) and Grovit.
South-East Europe
Product sales in the markets of South-Eastern
Europe amounted to €37.7 million in the three
months of 2016. Despite decreasing prices in both
key markets, Romania and Croatia, and in Serbia,
17
sales exceeded last year's in the same period by
more than 23%. The main drivers of sales growth
were the markets of Romania, Serbia, Croatia and
Macedonia.
Romania, where year-on-year sales were up 40%
to €13.5 million, remains one of Krka's key markets.
Sales leaders were prescription pharmaceuticals,
especially
Atoris
(atorvastatin),
Dulsevia
(duloxetine), Karbis (candesartan), including its
combination with hydrochlorothiazide, Prenessa/
Co-Prenessa (perindopril and its combination with
indapamide), and Roswera (rosuvastatin).
As to non-prescription products, special attention
was devoted to accelerating sales for cold and flu
products, and for analgesics. Our range of
veterinary products was expanded as we launched
new products for companion animals.
The sales result in Croatia, another one of Krka's
key markets, was the second best in the Region.
Three-month sales there totalled €7.1 million, up
10%. This has preserved our position as the fourth
generic pharmaceutical company in the country and
the second animal health products provider.
Product sales leaders were prescription
pharmaceuticals, especially Atoris (atorvastatin),
Co-Perineva (perindopril and indapamide), Dalneva
(perindopril and amlodipine), Doreta (tramadol and
paracetamol), Emanera (esomeprazole), Nolpaza
(pantoprazole), Perineva (perindopril), Roswera
(rosuvastatin), and Valsacor (valsartan), including
its combination with hydrochlorothiazide. The
leading non-prescription product in terms of sales in
the reported period was Nalgesin (naproxen). A
major acquisition in the group of non-prescription
products is the new form of the oral antiseptic
Septolete duo (benzydamine and cetylpyridinium).
The main sales driver among animal health
products was Fypryst (fipronil), and the new addition
in this group is Attaxa (imidacloprid and permethrin),
a product for the treatment of companion animals.
Sales in Bosnia and Herzegovina totalled
€4.8 million, up 4% compared to last year's first
quarter. The main sales drivers were prescription
pharmaceuticals, among which the most important
products were Enap (enalapril), including the
combination with hydrochlorothiazide, Lorista
18
(losartan), including the combination with
hydrochlorothiazide, Roswera (rosuvastatin), Atoris
(atorvastatin), Lexaurin (bromazepam), and Ampril
(ramipril), including the combination with
hydrochlorothiazide. Sales growth was also
recorded for non-prescription products, among
which the leaders were Septolete, Bilobil (ginkgo
biloba) and Nalgesin (naproxen). The positive sales
trend also continued for animal health products.
In Macedonia Krka remains the leading foreign
pharmaceuticals producer. First quarter sales value
there totalled €4.3 million, a 29% year-on-year
increase. Despite lower reference prices,
prescription pharmaceuticals were the main drivers
of both sales growth and sales value, and sales
growth was also recorded with products available
without prescription.
Product sales in Serbia totalled €2.7 million, a yearon-year increase of 81%. Our most important
prescription pharmaceuticals were Valsacor
(valsartan), including the combination with
hydrochlorothiazide, Nolpaza (pantoprazole), Lorista
hydrochlorothiazide, Roxera (rosuvastatin) and
Atoris (atorvastatin). The leading non-prescription
products in terms of sales were Septolete,
especially owing to the launch of Septolete total
(benzydamine and cetylpyridinium). As to veterinary
products, the sales results were the best for Fypryst
(fipronil).
Product sales in Bulgaria totalled €2.5 million, up
8% compared to the same period last year. The
main drivers of sales value were prescription
pharmaceuticals, the year-on-year sales of which
were also up 8%.
In Kosovo, where Krka remains one of the leading
providers of pharmaceuticals, sales amounted to
€1.7 million, up 3% compared to the same period
last year. In Albania sales totalled €0.9 million, a
decrease by 5% compared to the first quarter last
year. This was due to renewals of marketing
authorisations and the related stronger product
sales in the final quarter of 2015. Product sales in
Montenegro were €0.3 million, up 28% from the
comparable period last year. This was mainly due to
sales via government tenders.
East Europe
Region East Europe comprises several Eastern
European and Central Asian markets, the largest
sales impact of which has the key market the
Russian Federation. Sales growth rates were the
highest in the Region's second key market, Ukraine,
and in certain smaller markets.
Sales in one of Krka's key markets and our largest
individual market, the Russian Federation, totalled
€56.2 million. Due to the lower average rouble rate,
euro-denominated sales were down 9% compared
to the same period last year, while at the same time,
rouble-denominated sales increased by 9% and
sales volume by 10%.
Sales leaders among products were prescription
pharmaceuticals, especially Lorista (losartan),
including the combination with hydrochlorothiazide,
Perineva (perindopril), including the combination
with indapamide, Nolpaza (pantoprazole), Zyllt
(clopidogrel), Nolicin (norfloxacin), Valsacor
hydrochlorothiazide, and Roxera (rosuvastatin). The
leading non-prescription product in terms of sales
was Herbion. The highest sales growth rate, of 23%,
was recorded for animal health products, among
which the best-seller was Floron (florfenicol).
The following products, which were introduced to
the market in the last two years, are also becoming
increasingly
important:
Septolete total
(benzydamine and cetylpyridinium), SeptaNazal
(xylometazoline and dexpanthenol), Bravadin
(ivabradine), Vamloset (valsartan and amlodipine),
Dalneva (perindopril and amlodipine), Lortenza
(losartan and amlodipine), and the most recent ones
Co-Dalneva
(perindopril,
amlodipine
and
indapamide), Dilaxa (celecoxib) and Ulkavis
(bismuth).
In the market of the Russian Federation we are
continuously increasing the proportion of products
produced in the plant of our subsidiary Krka-Rus,
thereby strengthening our status as a domestic
producer.
The shrinking of the pharmaceuticals market in
Ukraine continued both in terms of volume and
value in the first quarter of 2016. At the same time,
the structure of the market changed to the benefit of
domestic and at the expense of foreign producers.
Nevertheless, our strengthened marketing and
sales activities consolidated Krka's position among
the leading foreign providers of generic
pharmaceuticals. As a result we ended the period
reporting €7.9 million of sales, which is €5.2 million
more than in the first quarter last year.
The leading group of products in terms of sales was
prescription pharmaceuticals, the sales leaders
among which were Enap (enalapril), including the
combination
with
hydrochlorothiazide,
Dexamethason
(dexamethasone),
Prenessa
indapamide, and Nolpaza (pantoprazole). In the
group of non-prescription products, the leaders in
terms of sales were Herbion, Panzynorm, Bilobil
(ginkgo biloba) and Pikovit. As to animal health
products, among which treatments for companion
animals account for almost one third of total sales,
our main sales driver in the first quarter of 2016 was
Fypryst (fipronil), followed by Tiavalt (tiamulin) and
Enroxil (enrofloxacin).
In Kazakhstan sales totalled €3.6 million, a
decrease by 2% compared to the first quarter last
year. The value of the pharmaceuticals market
continued to decline, resulting from last year's
depreciation of the local currency against the euro.
Despite unfavourable conditions, however, we
managed to increase our market share. As opposed
to last year, the majority of sales in the first quarter
of 2016 were generated via our subsidiary in that
market.
Our best-selling products among prescription
pharmaceuticals, the leading product group in terms
of sales, were: Enap (enalapril), including the
combination with hydrochlorothiazide, Candecor
(candesartan), Gliclada (gliclazide), and Prenessa
indapamide. As to products available without
prescription, the best sales results were recorded
for Herbion and Duovit.
Product sales in Uzbekistan totalled €3.3 million,
down 34% compared to the same period last year.
The decrease was chiefly due to the depreciation of
the local currency, which caused a decline in
purchasing power. The majority of sales came from
prescription pharmaceuticals, especially Lorista
hydrochlorothiazide, Enap (enalapril), including the
combination with hydrochlorothiazide, and Amlessa
(perindopril and amlodipine). Non-prescription
products Pikovit in Herbion also made a substantial
19
contribution to overall sales. As to new products,
good results were recorded for Lortenza (losartan
and amlodipine), which we have been successfully
promoting in this market.
Despite increasing protectionism favouring domestic
pharmaceuticals providers in Belarus, we sold
€3.2 million of products there, up 3% compared to
last year's first quarter. The main sales drivers were
prescription pharmaceuticals, especially Lorista
hydrochlorothiazide, Amlessa (perindopril and
amlodipine) and Nolpaza (pantoprazole). The
leading non-prescription products were Pikovit and
Septolete.
In Moldova we faced severe pressures at the
beginning of 2016 to lower our prices of
pharmaceuticals.
Nevertheless,
three-month
product sales there totalled €1.2 million, up 81%
from the comparable period last year. We were
especially
successful
with
prescription
pharmaceuticals, the year-on-year sales of which
increased almost threefold. Increasingly difficult
economic conditions presented a challenge in
Mongolia too, where we remain the leading foreign
pharmaceuticals provider despite our sales having
decreased by 12%. Strengthened marketing
activities resulted in sales totalling €1.0 million, an
important driver of which was our leading
prescription
pharmaceutical
Fromilid
(clarithromycin). At the beginning of 2016 we began
marketing Orsoten (orlistat). In Turkmenistan,
where we have been recording two-digit growth
rates over the past six years, year-on-year sales
were up 23% to €1.0 million. The €0.8 million of
sales and their 6% growth in Azerbaijan were
mainly driven by the seasonally high growth in the
sales of non-prescription products. All our
prescription pharmaceuticals and certain nonprescription products sold in this country have
already been added to the list of products with
regulated prices. As their prices were lowered, the
mentioned sales growth was the result of a high,
two-digit increase in the volume of sales.
In Georgia we sold €0.7 million worth of products.
The 17% year-on-year decrease in sales was
mainly due to the strong pressure to reduce the
prices of our prescription pharmaceuticals,
attributable to legally authorised parallel imports.
Our most important products in terms of sales were
Enap (enalapril), including the combination with
Dexamethason
(dexamethasone) and Sorvasta (rosuvastatin).
Sales value in Kyrgyzstan was up 26% to
€0.7 million. Product sales in Armenia totalled
last year. Due to economic crisis in full swing and
parallel imports from neighbouring countries, our
sales in Tajikistan were €0.3 million lower than in
the same period last year.
Central Europe
Product sales in Region Central Europe amounted
to €73.0 million in the three months of 2016, up 7%
compared to the first quarter last year. Sales value
increased in all markets of the Region, apart from
the Czech Republic and Lithuania. The majority,
89%, of revenues came from prescription
pharmaceuticals.
In Poland, a key market and the largest market in
the Region, product sales were €36.1 million. This is
a 6% year-on-year increase and represents 50% of
the Region's sales. The leading products in terms of
sales were prescription pharmaceuticals, especially
Atoris (atorvastatin), Roswera (rosuvastatin),
Valsacor (valsartan), including the combination with
hydrochlorothiazide, Doreta (tramadol and
paracetamol), Lorista (losartan), including the
combination with hydrochlorothiazide, and Nolpaza
(pantoprazole). Sales results were also good for the
recently launched Aryzalera (aripiprazole) and
Furocef (cephuroxime). Non-prescription product
20
sales were up 14%, the leading products in this
group being Bilobil (ginkgo biloba) and Septolete.
The most important animal health products in terms
of sales were Fypryst (fipronil) and Enroxil
(enrofloxacin).
In Hungary, one of Krka's key markets and the
second largest market in the Region in terms of
sales, product sales totalled €13.6 million, up 23%
from the comparable period last year. The leading
group of products in terms of sales was prescription
pharmaceuticals, among which the key products
were Prenessa (perindopril), including the
combination
with
indapamide,
Roxera
(rosuvastatin), Atoris (atorvastatin), Dalnessa/CoDalnessa (perindopril and amlodipine and their
combination
with
indapamide),
Nolpaza
(pantoprazole) and Zyllt (clopidogrel). The main
sales drivers among non-prescription products were
Bilobil (ginkgo biloba) and Septolete, which were
launched last year. The leading animal health
products in terms of sales were Fypryst (fipronil)
and Enroxil (enrofloxacin).
products the best-sellers were Enroxil (enrofloxacin)
and Fypryst (fipronil).
Sales in the Czech Republic, Krka's key market,
are still influenced by different legislative changes
exerting pressure to decrease the prices of
pharmaceuticals, and consequently tightening
competitive conditions. Year-on-year first-quarter
sales decreased to €4.3 million. The biggest
proportion of sales came from prescription
pharmaceuticals,
especially
Lexaurin
(bromazepam),
Tanyz
(tamsulosin),
Tonarssa/Tonanda (perindopril and amlodipine),
Emanera (esomeprazole) and Elicea (escitalopram).
The leading non-prescription products in terms of
sales were Septolete and Nalgesin (naproxen), and
in the group of animal health products the sales
leaders were Fypryst (fipronil) and Dehinel
(febantel).
Sales in Lithuania were down 6% compared to the
first quarter of 2015. €4.2 million of sales were
mainly driven by prescription pharmaceuticals,
especially Valsacor (valsartan), including the
combination with hydrochlorothiazide, Prenessa
(perindopril) and Amlessa/Co-Amlessa (perindopril
and amlodipine, and their combination with
indapamide). The leading non-prescription products
in terms of sales were Daleron Cold 3 (paracetamol,
pseudoephedrine and dextromethorphan) and
Septolete. The best sales results in the group of
animal health products were recorded for Fypryst
(fipronil) and Enroxil (enrofloxacin).
Three-month product sales in Slovakia totalled
last year. The largest proportion of sales came from
prescription pharmaceuticals, especially Prenessa
Nolpaza
(pantoprazole),
Valsacor (valsartan), including the combination with
hydrochlorothiazide, Atoris (atorvastatin), Amlessa
(perindopril and amlodipine) and Fromilid
(clarithromycin). The leading non-prescription
products in terms of sales were Nalgesin (naproxen)
and Septolete, and in the group of animal health
Sales in Latvia amounted to €2.8 million, up 17%
compared to the first quarter last year. The crucial
contributors were prescription pharmaceuticals,
especially Prenessa (perindopril), including the
combination with indapamide, Atoris (atorvastatin),
and Nolpaza (pantoprazole).
In Estonia three-month sales totalled €1.7 million, a
23% year-on-year increase. Our best-selling
prescription pharmaceuticals were Valsacor
hydrochlorothiazide, Roswera (rosuvastatin), and
Prenessa (perindopril), including the combination
with indapamide.
West Europe
Product sales in the amount of €80.0 million in
Region West Europe were down 3% compared to
the same period last year. The decrease is the
result of the falling prices of pharmaceuticals, as in
the majority of markets in the Region sales volume
was up. After several years of declining sales via
third-party partners the trend had turned in 2015,
and sales also increased in the first quarter this
year, when they were up 3%. The majority, 62% of
sales, is generated by Krka's subsidiaries. We
expect sales trends to further improve in the second
half of the year on account of the planned new
launches of generic products.
The largest proportion of sales is driven by
prescription pharmaceuticals. In the first quarter of
2016 the most important generic products in terms
of sales were those with esomeprazole,
pantoprazole, duloxetine, pregabalin, clopidogrel,
candesartan and aripiprazole, which we were the
first generic company to launch in the past year in
the majority of Western European markets. Animal
health product sales more than doubled compared
to the same period last year, our best-selling
products in the reported period being those with the
generic milbemycin in combination with
praziquantel. Sales growth was mainly driven by
sales via subsidiaries. TAD Pharma was the first
generic company in Germany to have launched the
ectoparasiticide
Ataxxa
(imidacloprid
and
permethrin). The sales of non-prescription products
were up 21%. In several Western European markets
we launched Septolete lozenges and spray,
marketed under different brands.
Germany remains our most important market in the
Region. The value of sales there totalled €27.5
million in the three months, up 13% from the
comparable period last year. Three quarters of sales
were reported by the subsidiary TAD Pharma. The
21
best-selling products were Pregabador (pregabalin),
Pantoprazol TAD (pantoprazole), Duloxalta
(duloxetine) and Esomeprazol TAD (esomeprazole).
In France sales were up 24% compared to the first
quarter of 2015, to €10.7 million, mainly driven by
the launched animal health products and increased
sales via the subsidiary Krka France.
The Region's third largest market in terms of sales
was Spain, where we sold €9.5 million worth of
products. The majority of sales there were reported
by the subsidiary Krka Farmacéutica, which,
however, witnessed a 30% decline in sales. This
was due to certain public tenders in Andalusia
having expired. Overall, sales dropped in this
market by 24%.
Sales in the UK totalled €6.9 million. We faced a
severe erosion of prices in this market as well, our
sales having decreased by 30% compared to the
first quarter last year. Sales in the Scandinavian
countries totalled €6.7 million, down 36% from the
comparable period last year. This is mainly due to
severe price reductions for products with duloxetine
and aripiprazole in Sweden and Denmark. Sales in
Finland and Norway, on the other hand, increased
by 35% and 12%, respectively. In Italy sales were
up 32% to €5.5 million. The highest sales growth, of
54%, was recorded by the subsidiary Krka
Farmaceutici, which has already accounted for one
half of total sales in this market. Three-month
product sales in Portugal totalled €4.9 million, down
3% from to the comparable period last year. Despite
slightly lower sales, Krka remains the fastest
growing generic pharmaceutical company in
Portugal. In the Benelux countries, year-on-year
sales were up 3% to €2.3 million, and in Ireland
they increased by 56% to €1.9 million. Krka was
also successful in Austria, where product sales
totalled €1.7 million, up 33%. Both in Ireland and
Austria Krka's subsidiaries are maintaining their
position as the leading generic suppliers of products
with pregabalin, duloxetine and aripiprazole.
In other European countries product sales via thirdparty partners amounted to €2.4 million, an increase
by 3% compared to the first quarter last year.
Overseas Markets
Three-month product sales in Region Overseas
Markets totalled €9.9 million, up 33% compared to
the same period last year. Sales growth was
reported by all sales offices. The most sales, 87%,
came from prescription pharmaceuticals, which are
sold under our own brands in most of the Region's
markets.
Despite the emergency situation there, the sales
office Middle East reported €5 million of sales, up
40% compared to the same period last year. Our
most important markets remain Iran, Iraq and
Lebanon, and our best-selling products Nolpaza
(pantoprazole),
Vizarsin
(sildenafil),
Zyllt
(clopidogrel),
Asentra
(sertraline),
Letizen
(cetirizine), Valsacor (valsartan) and Ultop
(omeprazole).
22
Sales in the markets of the Far East and Africa
totalled €4.6 million, up 23% from last year's first
quarter. The most important market there remains
the Republic of South Africa, followed by China,
Vietnam and Ghana. Our leading products in terms
of sales were Sabalfrucht TAD (Serenoa repens)
and products with enalapril, amlodipine and
esomeprazole.
The sales office the Americas reported a 105%
year-on-year sales increase, sales there totalling
€0.3 million. The majority of sales came from the
markets of Central America. The sales leader
among products was Valsacor (valsartan), including
the combination with hydrochlorothiazide.
Sales by product and service groups
The Krka Group generated 90.1% of first quarter
2016 sales in human health products, reaffirming
them as Krka’s most important product group. The
most sales, i.e. 81.0%, were generated in
prescription pharmaceuticals, followed by non-
prescription products on 9.1% and veterinary
products on 7.2% of total Krka Group sales. Health
resort and tourist services account for 2.4% of
overall Krka Group sales.
Krka Group
Krka Company
1–3/2016
1–3/2015
Index
1–3/2016
1–3/2015
Index
Human health products
271,204
270,391
100
240,911
247,818
97
– Prescription pharmaceuticals
243,853
243,217
100
216,641
223,523
97
– Non-prescription products
27,351
27,174
101
24,270
24,295
100
Animal health products
21,765
11,743
185
21,317
11,785
181
7,154
6,456
111
Other
769
714
108
1,143
1,153
99
Total
300,892
289,304
104
263,371
260,756
101
In € thousand
Health resort and tourist services
Krka Group sales by product and service groups, January–March 2016
Prescription pharmaceuticals
The Krka Group sold €243.9 million worth of
prescription pharmaceuticals, up 0.3% compared to
the same period last year. Sales increased in
regions Overseas Markets (up 28%), South-East
Europe (up 25%), Central Europe (up 5%) and East
Europe (up 1%).
in the local currency were up 9% there. Compared
to the same period last year, sales also decreased
in the third largest market, Germany (by 8%), where
the beginning of 2015 had been a major sales
success for Krka due to important new product
launches.
With respect to the largest markets, sales increased
in Poland (by 5%). On account of the exchange
rate, year-on-year sales were down in the Russian
Federation (down 5%), whereas sales denominated
As to other large markets, the year-on-year sales of
prescription pharmaceuticals were up the most,
more than 170%, in Ukraine, Romania (up 45%)
and Hungary (up 20%).
23
With respect to mid-size markets, the highest sales
growth rates were recorded in Serbia (119%),
Macedonia (34%), Italy (30%) and Croatia (7%).
Among smaller markets for Krka's prescription
pharmaceuticals, the highest sales growth rates
were recorded in Moldova (183%), the Benelux
(143%), Ireland (45%), Austria (33%), Kyrgyzstan
(26%), Finland (25%), Estonia (17%), and Latvia
and Armenia (14% in both).
The ten leading prescription pharmaceuticals in
terms of sales were Atoris (atorvastatin), Lorista*
(losartan), Nolpaza* (pantoprazole), Prenessa*
(perindopril), Emanera* (esomeprazole), Enap
(enalapril), Valsacor (valsartan), Roswera*
(rosuvastatin), Zyllt* (clopidogrel) and Dulsevia*
(duloxetine).
The highest year-on-year sales growth in absolute
terms were recorded for the most recently launched
products Dulsevia* (duloxetine) and Ralago*
(rasagiline), and for Nolpaza* (pantoprazole).
In the first quarter of 2016 Krka launched, as the
first provider in Europe, the fixed-dose combination
Rosudapin* (rosuvastatin and amlodipine) in Poland
and Slovenia, and we were among the first generic
providers to have launched Ralago* (rasagiline) for
the treatment of Parkinson's disease in Hungary,
Slovakia, Lithuania, Latvia, Estonia and Portugal.
We also launched other existing products on new
markets:
• candesartan and hydrochlorothiazide in
Belgium;
• Prenessa (perindopril) in Moldova;
• Co-Amlessa (perindopril, indapamide and
amlodipine) in Belarus;
• carvedilol in Spain;
• Alortia* (losartan and amlodipine) in Georgia;
• Levalox* (levofloxacin) in Lithuania, Ireland and
France;
• Furocef* (cephuroxime) in Lithuania, Latvia and
Spain;
• linezolid in Germany, Finland and Ireland;
• Dilaxa* (celecoxib) in the Russian Federation;
• Doreta* SR (tramadol and paracetamol)
prolonged-release tablets in Poland;
• the oncology range imatinib and letrozole in
Serbia, and
• Ecansya (capecitabine) in Latvia.
Non-prescription products
In the three months to March 2016, we sold
€27.4 million worth of non-prescription products, an
increase by 1% compared to the same period last
year.
Sales increased the most in regions Central Europe
(by 33%), West Europe (by 21%), South-East
Europe (by 19%) and Slovenia (by 11%). In East
Europe sales were down, predominantly due to
lower sales in the Russian Federation, Uzbekistan,
Belarus and Moldova.
(85%), Turkmenistan (50%), Latvia (49%), Serbia
(32%), Romania (29%), Slovakia (17%), Poland
(14%), Lithuania (14%), and Bosnia and
Herzegovina (8%). Sales also increased in several
other markets. The leading products were those of
the master brands Septolete, Bilobil and Herbion.
Year-on-year first quarter sales were up
considerably for both recently launched seasonal
products – Septolete total and Septanazal –, as well
as for Bilobil (ginkgo biloba) and Nalgesin*
(naproxen).
With respect to large individual markets, the highest
sales growth rates were recorded in Kazakhstan
Animal health product sales totalled €21.8 million in
the first quarter of 2016, up 85% from the same
period last year. Sales were up the most in Region
West Europe, where they tripled, and in regions
East Europe (up 24%) and Central Europe (up
17%).
Among the largest markets, sales increased
several-fold in Germany and France, and they were
also up considerably in Lithuania (up 67%), Ukraine
(up 27%), the Russian Federation (up 23%), Poland
(up 21%) and Hungary (up 11%).
The sales leaders among products are Milprazon*
(milbemycin oxime and praziquantel), Floron*
24
(florfenicol), Fypryst* (fipronil) and Enroxil*
(enrofloxacin), followed by Dehinel plus (febantel,
pyrantel embonate and praziquantel) and Ecocid S
(biocide).
In the markets of Central Europe, South-East
Europe, Slovenia and Germany we launched an
important new product for companion animals in the
first quarter, Ataxxa* (imidacloprid and permethrin),
in the form of spot on solution for dogs.
Health resort and tourist services
In the first three months of 2016 the Terme Krka
health resort sold €7.2 million worth of services, an
increase by 11% compared to the same period in
2015. Overnight stays were up 8%, whereby the
highest growth rate, of 13%, was recorded for Italian
guests, and the number of domestic guests
increased by 9%.
As to business units, the most sales and the highest
sales growth rate, of 20%, were reported by the
resort Terme Dolenjske Toplice. The second best
sales result was reported by the seaside resort
Talaso Strunjan, where sales were up 11%,
followed by Terme Šmarješke Toplice, where sales
increased by 13%.
* Products marked with the asterisk are marketed under different brand names in individual markets.
25
Research and development
In the first quarter of 2016 Krka obtained marketing
authorisations for three new products in three
dosage forms and four strengths.
We acquired 69 new marketing authorisations in
different markets.
Prescription pharmaceuticals
In Hungary we acquired a first marketing
authorisation for Bravadin (ivabradine) film-coated
tablets in the two strengths of 5 mg and 7,5 mg.
Bravadin is a cardiac medication used to treat
patients with angina pectoris. A first marketing
authorisation was also obtained for the Moloxin
(moxifloxacin) 400 mg/250 ml solution for injection.
Having a wide-spectrum antimicrobial action, the
product is used to treat pneumonia, dermal
infections and soft tissue infections. Together with
Moloxin tablets, which were approved last year, it
supplements Krka's range of antimicrobial
pharmaceuticals. The product was approved for
marketing in 14 European countries under the
decentralised procedure.
In different Eastern European countries we obtained
new marketing authorisations for Krka's key
pharmaceuticals Roswera (rosuvastatin), Kventiax
(quetiapine), Moloxin (moxifloxacin) tablets and
Vizarsin QTab (sildenafil) dispersible tablets, and in
the area of cancer treatments we were issued new
marketing approvals for Neopax (imatinib) and
Letrozole Krka (letrozole). Additionally in the area
of cardiovascular treatments, we were granted new
authorisations for our fixed-dose combinations
Sobycombi and Niperten combi (bisoprolol and
amlodipine), and for Telmista H and Telmista HD
(telmisartan and hydrochlorothiazide).
In the markets of South-Eastern Europe we
expanded opportunities for products from various
indication areas. New marketing authorisations were
granted for Furocef (cephuroxime) film-coated
tablets and for the Levalox (levofloxacin) solution
for injection. We obtained a new marketing
authorisation for the fixed-dose combination for the
treatment of cardiovascular conditions, Tenloris
(losartan and amlodipine), and a marketing
authorisation for Pregabalin (pregabalin), a central
nervous system treatment.
Non-prescription products
In the Russian Federation we obtained a first
marketing authorisation for Flebaven film-coated
tablets. They contain 500 mg of the purified
flavonoid fraction, which equals 450 mg of diosmin
and 50 mg of flavonoids expressed as hesperidin. It
is used to treat symptoms of chronic venous
insufficiency, lymphedema and acute hemorrhoidal
disease.
In different Eastern European markets we obtained
new marketing authorisations, expanding markets
for certain key cold and flu products. The
Septanazal nasal spray for adults and the
Septanazal nasal spray for children were
approved in Azerbaijan, and the Septolete Total
spray in Moldova.
In the first quarter of 2016 we obtained new
marketing authorisations and strengthened brand
recognition for our products. Applying the
decentralised procedure we were the first generic
company to have obtained marketing authorisations
in ten countries of Western Europe, and in the
Czech Republic and Slovakia, for Fypryst/Amflee
Combo (fipronil and S-methoprene) in the form of
spot-on solution in five strengths, a product
preventing and treating tick, flea and lice
infestations in cats, dogs and skunks. The product
26
enables a modern and wholesome treatment of
external parasite infestations with an expanded
mode of action on all life cycle stages of fleas.
In Belgium a new marketing authorisation was
granted for the Enrox classic (enrofloxacin)
solution for injection treating infections in foodproducing animals. In Bosnia and Herzegovina, and
Macedonia, we obtained approvals to market
Ataxxa (imidacloprid and permethrin) in the form of
spot-on solution in four strengths, for treating dogs.
We were also granted marketing authorisations for
the Dehelman (levamisole) oral powder, for the
treatment of intestinal parasites and lung worms in
food-producing animals.
Investments
In the first quarter of 2016 the Krka Group allocated
€26.2 million to investments, of which the controlling
company invested €18.5 million and subsidiaries
€7.7 million. Investments were primarily increasing
and modernising our production and R&D
capacities.
At Krka's main location in Ločna, Novo mesto,
Slovenia we officially opened in November 2015 a
plant for solid dosage pharmaceuticals, Notol 2. The
investment is worth €200 million and provides new
capacities for implementing our vertically integrated
business model, with which we control the entire
process of development and production of both raw
materials and finished products. Approximately one
third of technological equipment was installed at the
start-up of Notol 2 last February. Production lines
will gradually be added over the following two years
to increase the plant's production capacity to the
target 4.5 billion tablets and capsules per year.
Krka's key investment supporting development
activities and quality assurance in the following
years is the new Development and Control Centre
(RKC) 4, to be located in the group of production
facilities in Ločna. RKC 4 will be positioned in the
immediate vicinity of the other three development
and control centres, directly connected to RKC 2
and also joined with RKC 3 by means of a
connecting building. Site preparation works for the
building worth €54 million had started at the end of
June 2015. By the end of March the underground
concrete part of the building was completed and the
construction of the connecting building between
RKC 3 and RKC 4 had begun. The construction of
the new facility with the total surface area of
18,000 m² will take two years.
The €8 million investment into increasing the
production of sprays in the sterile product
production plant is in its final phase. Currently
ongoing works include qualifications of the
technological equipment and systems, and
preparations for the technical inspection of the
facility. Production lines will be ready for operation
in the autumn 2016.
The €11 million investment into increasing the
capacity for the coating of pellets in the solid
dosage forms plant (OTO) is in the design phase.
The new production halls and equipment will be
explosion-proof. Works are planned to start in
August. Two productions lines will be supplied in the
autumn and will be made ready for production by
the end of June 2017.
At Krka's location in Ločna we are building a new
multi-purpose warehouse. It will be positioned along
Andrijaničeva street and will connect functionally
with the existing warehouses of raw materials and
packaging. This investment will procure sufficient
space for the storage of packaging, raw materials
and finished products to last a decade. The
investment is estimated at €30 million.
One of the most important investments in Krka's
subsidiaries is Krka-Rus 2 in Istra, the Russian
Federation. The first phase had included building a
new plant and logistics centre, while in 2015 we
started fitting the additional technical and logistics
equipment. This will increase the new plant's
production capacity to two thirds of its planned
target capacity, which will total 1.8 billion tablets and
capsules per year. The warehouse and logistics
systems will reach full capacity after the remaining
logistics equipment is installed. The value of the
entire additional equipment, which is expected to be
fitted by the end of 2016, is estimated at €30 million.
Due to the expansion of our production programme
in the Jastrebarsko distribution and production
centre in Croatia, the warehousing and distribution
segment of the facility are being converted to
acquire new laboratory and production facilities for
the production of solid dosage pharmaceuticals.
Detailed design was completed in 2015. Works
started on the facility after Krka was granted the
building permit in December. Heavy construction
and installation works are currently ongoing. The
main production equipment will be supplied and
installed by the end of the year, and production is
planned to start on the new equipment in the first
quarter of 2017. The investment is estimated at
€31 million.
27
ZAUPNO
Employees
In the first quarter of 2016 the number of Krka
Group employees increased by 144, or 1.4%, so
that at the end of March the Krka Group had 10,708
employees.
Krka's subsidiaries and representation offices
outside Slovenia employ more than 54% of the Krka
Group’s employees, and almost 56% of the entire
Krka team have at least a university level degree.
Educational structure in the Krka Group
PhD
MSc
University degree
Higher professional education degree
Vocational college degree
Secondary school education, level V
Other
Krka Group
31 Mar 2016
No. of
employees
Share (%)
159
1.5
353
3.3
5,465
51.0
1,390
13.0
260
2.4
1,876
17.5
1,205
11.3
10,708
100.0
Krka employees undergo additional training both in
Slovenia and abroad, related to various professional
areas of expertise, quality, management, personal
growth, foreign languages and informatics. Training
is adjusted to our employees' needs, the
technological process, market conditions, and the
Krka Group's development requirements, which is
why we organise the majority of staff trainings
ourselves.
For our marketing and sales staff we organise
numerous seminars led by over 60 in-house
trainers. We have a job coaching system in place
for new employees at all posts.
In 2015 every Krka Group employee took part in
more than six education or training programmes,
spending 55 hours on average.
Employees learn about the most demanding topics
and most recent discoveries at faculties, institutes
and other institutions, both at home and abroad. At
the end of March 2016, 219 employees were
enrolled into part-time studies, 49 of them
postgraduate students obtaining a specialisation,
master's degree or doctoral degree. Krka supports
them by party funding their tuitions and by granting
study time leaves.
Krka is the only certificate-awarding body with the
power to examine and approve six national
vocational qualification programmes (NVQ) in the
28
31 Dec 2015
No. of
employees
Share (%)
152
1.4
349
3.3
5,291
50.1
1,385
13.1
304
2.9
1,844
17.5
1,239
11.7
10,564
100.0
area of the pharmaceutical industry. By examining
and approving candidates under the NVQ system
between 2002 and the beginning of April 2016, we
have awarded a total of 1,306 NVQ certificates –
1,163 to Krka employees and 142 to the employees
of other companies and pharmacies. We awarded
67 certificates in 2015, with 73 employees currently
in the process of obtaining one.
We are securing a continuous inflow of new talented
staff by offering study grants to students. At the end
of March 2016 we had a total of 50 scholarship
holders.
A research conducted by the employment website
MojeDelo.com into the reputation of Slovene
employers this March found Krka the most reputable
employer of 2015.
Krka’s employees also display social corporate
responsibility and responsibility toward our
environment. This April we again organised Krka's
week of charity and volunteering. It was attended by
1,361 employees, which is one fourth of the entire
Krka team in Slovenia, and employees from certain
subsidiaries and representative offices abroad also
joined. As many as 261 of us donated blood,
numerous brought clothes, toys, shoes, foods,
books and other consumables for adults and
children, and pet food. More than three tonnes of
consumables were collected and over 260
kilograms of pet food. We kept company with the
elderly at 37 retirement homes and with the tenants
of eight occupational activity centres, special
schools and certain other institutions. We also
helped out at two animal shelters. The charity week
was rounded off with two open door days for
employees, their families, relatives and friends, at
which Krka hosted almost 4,000 visitors.
29
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE
KRKA GROUP, WITH NOTES
Consolidated statement of financial position of the Krka Group
In € thousand
Assets
Property, plant and equipment
Intangible assets
Loans
Investments
Deferred tax assets
Other non-current assets
Total non-current assets
Assets held for sale
Inventories
Trade receivables
Other receivables
Loans
Investments
Cash and cash equivalents
Total current assets
Total assets
Equity
Share capital
Treasury shares
Reserves
Retained earnings
Total equity holders of the parent
Non-controlling interests within equity
Total equity
Liabilities
Provisions
Deferred revenue
Deferred tax liabilities
Total non-current liabilities
Trade payables
Income tax payable
Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
30
31 Mar 2016
31 Dec 2015
Index
832,714
115,611
8,136
7,966
27,414
246
992,087
41
265,052
459,115
28,681
47,149
85
78,102
878,225
1,870,312
826,192
116,940
7,696
7,580
27,949
241
986,598
41
272,878
433,133
31,540
37,380
11,808
35,826
822,606
1,809,204
101
99
106
105
98
102
101
100
97
106
91
126
1
218
107
103
54,732
-21,912
82,498
1,334,446
1,449,764
1,314
1,451,078
54,732
-20,071
73,387
1,296,688
1,404,736
1,248
1,405,984
100
109
112
103
103
105
103
85,220
13,069
12,598
110,887
99,102
11,036
198,209
308,347
419,234
1,870,312
84,865
13,381
12,736
110,982
103,871
8,030
180,337
292,238
403,220
1,809,204
100
98
99
100
95
137
110
106
104
103
Consolidated income statement of the Krka Group
In € thousand
Revenues
Costs of goods sold
Gross profit
Other operating income
Selling and distribution expenses
R&D expenses
General and administrative expenses
Operating profit
Financial income
Financial expenses
Net financial result
Profit before tax
Income tax
Net profit
Attributable to:
– equity holders of the parent
– non-controlling interest
Basic earnings per share (in €)
Diluted earnings per share (in €)
1–3/2016
300,892
-130,728
170,164
1,764
-71,176
-29,697
-20,617
50,438
31,956
-35,760
-3,804
46,634
-6,438
40,196
1–3/2015
289,304
-121,619
167,685
1,657
-79,409
-27,722
-19,143
43,068
21,416
-260
21,156
64,224
-9,110
55,114
Index
104
107
101
106
90
107
108
117
149
13,754
-18
73
71
73
40,130
66
1.24
1.24
55,117
-3
1.69
1.69
73
73
73
* 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.
31
Consolidated statement of other comprehensive income of the Krka Group
In € thousand
Net profit
Other comprehensive income for the period
Other comprehensive income reclassified to profit or loss in
future periods
Translation reserve
Change in fair value of available-for-sale financial assets
Deferred tax effect
Net other comprehensive income reclassified to profit or
loss in future periods
Total other comprehensive income for the period (net of tax)
Total comprehensive income for the period (net of tax)
Attributable to:
– equity holders of the parent
– non-controlling interest
32
1–3/2016
40,196
1–3/2015
55,114
Index
73
6,419
386
-66
16,196
1,097
-186
40
35
35
6,739
17,107
39
6,739
46,935
17,107
72,221
39
65
46,869
66
72,224
-3
65
Consolidated statement of changes in equity of the Krka Group
Reserves
Reserves
Treasury for treasury
shares
shares
In € thousand
Share
capital
Balance at 1 Jan 2016
54,732
-20,071
0
0
0
Net profit
Total other comprehensive income
for the period (net of tax)
Total comprehensive income for the
period (net of tax)
Transactions with owners,
recognised directly in equity
Transfer of previous period's profit to
retained earnings
Repurchase of treasury shares
Formation of reserves for treasury
shares
Total transactions with owners,
Balance at 31 Mar 2016
Retained earnings
Share
premium
Legal
reserves
Statutory
reserves
20,071
105,897
14,990
30,000
-12,453
0
0
0
0
0
0
0
0
40,130
40,130
66
40,196
0
0
0
0
0
851
6,419
0
-531
0
6,739
0
6,739
0
0
0
0
0
0
851
6,419
0
-531
40,130
46,869
66
46,935
0
0
0
0
0
0
0
0
0
148,851
-148,851
0
0
0
0
-1,841
0
0
0
0
0
0
0
0
0
-1,841
0
-1,841
0
0
1,841
0
0
0
0
0
0
0
-1,841
0
0
0
0
-1,841
1,841
0
0
0
0
0
0
148,851
-150,692
-1,841
0
-1,841
54,732
-21,912
21,912
105,897
14,990
30,000
-11,602
-78,699 1,051,677
244,480
Fair value Translation Other profit
reserve
reserve
reserves
NonTotal equity
controlling
Retained Profit for holders of interests within
earnings the period the parent
equity
-85,118 1,051,677
96,160
148,851 1,404,736
38,289 1,449,764
Total
equity
1,248 1,405,984
1,314 1,451,078
33
Reserves
Reserves
Treasury for treasury
shares
shares
In € thousand
Share
capital
54,732
-10,677
0
0
0
Net profit
Total other comprehensive income
for the period (net of tax)
period (net of tax)
Transactions with owners,
Transfer of previous period's profit to
retained earnings
Formation of reserves for treasury
shares
34
Retained earnings
Fair value Translation Other profit
reserve
reserve
reserves
NonTotal equity
controlling
Retained Profit for holders of interests within
earnings the period the parent
equity
Share
premium
Legal
reserves
Statutory
reserves
10,677
105,897
14,990
30,000
-8,981
0
0
0
0
0
0
0
0
55,117
55,117
-3
55,114
0
0
0
0
0
911
16,196
0
0
0
17,107
0
17,107
0
0
0
0
0
0
911
16,196
0
0
55,117
72,224
-3
72,221
0
0
0
0
0
0
0
0
0
148,081
-148,081
0
0
0
0
-2,383
0
0
0
0
0
0
0
0
0
-2,383
0
-2,383
0
0
2,383
0
0
0
0
0
0
0
-2,383
0
0
0
0
-2,383
2,383
0
0
0
0
0
0
148,081
-150,464
-2,383
0
-2,383
54,732
-13,060
13,060
105,897
14,990
30,000
-8,070
-59,096 1,001,636
227,609
-75,292 1,001,636
79,528
148,081 1,350,591
52,734 1,420,432
Total
equity
1,308 1,351,899
1,305 1,421,737
Consolidated statement of cash flows of the Krka Group
In € thousand
OPERATING ACTIVITIES
Net profit
Adjustments for:
– amortisation/depreciation
– foreign exchange differences
– investment income
– investment expenses
– interest expenses and other financial expenses
– income tax
Operating profit before changes in net operating current assets
Change in trade receivables
Change in inventories
Change in trade payables
Change in provisions
Change in deferred revenues
Change in other current liabilities
Income taxes paid
Net cash flows from operating activities
INVESTING ACTIVITIES
Interest received
Proceeds from sale of current investments and repayment of current loans
Proceeds from sale of property, plant and equipment
Acquisition of intangible assets
Purchase of property, plant and equipment
Non-current loans
Proceeds from repayment of non-current loans
Payments to acquire non-current investments
Proceeds from sale of non-current investments
Payments/Proceeds in connection with current investments and loans
Proceeds from derivative financial instruments
Net cash flows used in investing activities
FINANCING ACTIVITIES
Interest paid
Payments in connection with current borrowings
Dividends and other profit shares paid
Net cash flows used in financing activities
Net increase/decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Effect of exchange rate fluctuations on cash held
Net cash and cash equivalents at the end of the period
1–3/2016
1–3/2015
40,196
48,210
26,401
1,260
-21,813
35,861
63
6,438
88,406
-22,341
7,826
-9,100
355
-312
-6,019
-3,080
55,735
55,114
38,634
26,259
2,971
-294
340
248
9,110
93,748
-44,003
-19,543
-5,368
885
-809
11,998
-7,357
29,551
227
0
1,195
-441
-24,027
-481
308
-22
16
-9,782
21,292
-11,715
210
27
1,445
-1,227
-20,770
-366
241
-50
5
380
0
-20,105
-63
0
-78
-1,841
-1,982
42,038
35,826
238
78,102
-246
-9,958
-23
-2,383
-12,610
-3,164
23,585
491
20,912
35
Segment reporting of the Krka Group
In € thousand
Revenues from nonGroup companies
Intra-Group revenues
Operating expenses
Intra-Group operating
expenses
Operating profit
Interest income
Intra-group interest
income
Interest expenses
Intra-group interest
expenses
Income tax
Net profit
Investments
Depreciation
Amortisation
Total assets
Goodwill
Trademark
Total liabilities
36
European Union
1–3/2016
1–3/2015
South-East Europe
1–3/2016
1–3/2015
East Europe
1–3/2016
1–3/2015
Other
1–3/2016
1–3/2015
Elimination
1–3/2016
1–3/2015
Total
1–3/2016
1–3/2015
193,904
185,865
14,627
12,218
80,117
81,484
12,244
9,737
0
0
300,892
289,304
48,890
1,089
-162,759
49,275
717
-148,376
6,143
193
-10,614
5,339
39
-10,282
36,768
482
-72,348
47,284
901
-82,958
0
0
-6,497
0
0
-6,277
-91,801
0
0
-101,898
0
0
0
1,764
-252,218
0
1,657
-247,893
-86,625
-99,328
-6,674
-5,631
-79,541
-77,462
-2
-2
172,842
182,423
0
0
32,234
141
38,206
106
4,206
0
1,975
0
8,251
83
-573
103
5,747
0
3,460
0
0
0
0
0
50,438
224
43,068
209
229
283
0
0
0
0
0
0
-229
-283
0
0
-1
-194
0
0
-1
-2
0
0
0
0
-2
-196
-84
-167
0
0
-189
-180
0
0
273
347
0
0
-62
2,096
-625
-6
-3,062
20,029
-55
-963
0
0
-3,804
21,156
-4,467
-8,106
-328
-653
-1,267
223
-376
-574
0
0
-6,438
-9,110
27,705
32,196
3,253
1,316
3,922
19,679
5,316
1,923
0
0
40,196
55,114
21,569
18,693
23
15
4,587
1,581
0
0
0
0
26,179
20,289
17,760
17,338
494
468
6,213
6,472
93
90
0
0
24,560
24,368
1,233
1,250
76
74
476
519
56
48
0
0
1,841
1,891
31 Mar 2016 31 Dec 2015 31 Mar 2016 31 Dec 2015 31 Mar 2016 31 Dec 2015 31 Mar 2016 31 Dec 2015 31 Mar 2016 31 Dec 2015 31 Mar 2016 31 Dec 2015
1,420,584 1,394,853
41,274
38,680
398,615
368,309
9,839
7,362
0
0 1,870,312 1,809,204
42,644
42,644
0
0
0
0
0
0
0
0
42,644
42,644
39,647
40,495
0
0
0
0
0
0
0
0
39,647
40,495
320,467
309,305
9,809
8,231
67,005
64,079
21,953
21,605
0
0
419,234
403,220
Notes to the consolidated financial statements of the Krka Group
Costs by nature
In € thousand
Costs of goods and material
Costs of services
Employee benefit costs
Amortisation and depreciation
Inventory write-offs and allowances
Receivables impairment and write-offs
Other operating expenses
Total costs
Change in the value of inventories of products and work in
progress
Total
€252,218 thousand
1–3/2016
80,354
53,878
79,414
26,401
2,031
829
7,267
250,174
1–3/2015
96,148
50,188
79,156
26,259
2,590
6,035
9,530
269,906
Index
84
107
100
101
78
14
76
93
2,044
-22,013
-9
252,218
247,893
102
In € thousand
Gross wages and salaries and continued pay
Social security contributions
Pension insurance contributions
Payroll tax
Post-employment benefits and other non-current employee
benefits
Other employee benefit costs
Total employee benefit costs
€79,414 thousand
1–3/2016
63,134
4,792
8,334
292
1–3/2015
62,435
4,807
8,261
248
Index
101
100
101
118
455
890
51
2,407
79,414
2,515
79,156
96
100
In € thousand
Grants and assistance for humanitarian and other purposes
Environmental protection expenses
Other taxes and levies
Loss on sale of property, plant and equipment and intangible
assets
Other expenses
Total other operating expenses
€7,267 thousand
1–3/2016
338
791
4,968
1–3/2015
415
785
6,848
Index
81
101
73
164
328
50
1,006
7,267
1,154
9,530
87
76
Other taxes and levies include taxes (claw-back and similar) that have been imposed in several markets of Krka
Group operations in recent periods.
37
Financial income and expenses
In € thousand
Net foreign exchange differences
Interest income
Change in fair value of investments through profit or loss
Proceeds from sale of investments
Derivatives income
– income
Total financial income
Interest expenses
Derivatives expenses
– change in fair value
Other financial expenses
Total financial expenses
1–3/2016
10,434
224
6
0
21,292
21,292
31,956
-2
0
-35,697
-35,697
-61
-35,760
-3,804
Income tax
0
149
1
0
117
13,754
thousand. The effective tax rate is 13.8%, down 0.4
of a percentage point from the same period last
year.
Land
Buildings
Equipment
Property, plant and equipment being acquired
Total property, plant and equipment
Index
49
107
€6,438 thousand
Current income tax amounts to €6,062 thousand,
which is 13.0% of pre-tax profit. Together with the
deferred tax of €376 thousand, the total income tax
expense in the income statement equals €6,438
In € thousand
1–3/2015
21,183
209
0
24
0
0
21,416
-196
-12
0
0
-52
-260
21,156
€832,714 thousand
31 Mar 2016
35,379
404,300
340,051
52,984
832,714
31 Dec 2015
35,227
408,238
352,005
30,722
826,192
Index
100
99
97
172
101
The value of property, plant and equipment represents 45% of the Krka Group's total assets. Krka’s major
investments are described in the chapter Investments in the Business Report.
38
Intangible assets
€115,611 thousand
31 Mar 2016
42,644
39,647
29,026
4,294
115,611
In € thousand
Goodwill
Trademark
Concessions, patents, licences and similar rights
Intangible assets being acquired
Total intangible assets
Loans
31 Dec 2015
42,644
39,859
30,506
3,931
116,940
Index
100
99
95
109
99
€55,285 thousand
31 Mar 2016
8,136
8,136
47,149
703
46,445
1
55,285
In € thousand
Non-current loans
– loans to others
Current loans
– portion of non-current loans maturing next year
– loans to others
– current interest receivable
Total loans
31 Dec 2015
7,696
7,696
37,380
155
37,224
1
45,076
Index
106
106
126
454
125
100
123
Non-current loans represent 15% of total loans.
loans.
Non-current loans to others include loans that the
Krka Group extends in accordance with its internal
acts to its employees, and that are primarily housing
Current loans to others include €46,000 thousand of
the controlling company's short-term bank deposits
with maturities longer than 30 days.
Investments
€8,051 thousand
31 Mar 2016
7,966
7,966
85
85
0
8,051
In € thousand
Non-current investments
– available-for-sale financial assets
Current investments including derivatives
– shares and interests held for trading
– derivatives
Total investments
Available-for-sale
financial
assets
include
€712 thousand of investments in shares and
31 Dec 2015
7,580
7,580
11,808
79
11,729
19,388
Index
105
105
1
108
0
42
interests in Slovenia, and €7,254 thousand of
investments in shares and interests abroad.
39
Inventories
In € thousand
Material
Work in progress
Products
Merchandise
Inventory advances
Total inventories
€265,052 thousand
31 Mar 2016
104,624
66,339
87,378
6,243
468
265,052
Trade and other receivables
In € thousand
Current trade receivables
Other current receivables
Total receivables
Cash in hand
Bank balances
Total cash and cash equivalents
31 Mar 2016
459,115
28,681
487,796
Share capital
Treasury shares
Reserves
– reserves for treasury shares
– share premium
– legal reserves
– statutory reserves
– fair value reserve
– translation reserve
Retained earnings
Total equity holders of the parent
Non-controlling interests within equity
Total equity
40
31 Dec 2015
433,133
31,540
464,673
Index
106
91
105
€78,102 thousand
31 Mar 2016
23
78,079
78,102
Equity
In € thousand
Index
94
103
97
99
66
97
€487,796 thousand
In € thousand
31 Dec 2015
111,113
64,369
90,395
6,287
714
272,878
31 Dec 2015
32
35,794
35,826
Index
72
218
218
€1,451,078 thousand
31 Mar 2016
54,732
-21,912
82,498
21,912
105,897
14,990
30,000
-11,602
-78,699
1,334,446
1,449,764
1,314
1,451,078
31 Dec 2015
54,732
-20,071
73,387
20,071
105,897
14,990
30,000
-12,453
-85,118
1,296,688
1,404,736
1,248
1,405,984
Index
100
109
112
109
100
100
100
93
92
103
103
105
103
Provisions
€85,220 thousand
In € thousand
Provisions for lawsuits
Provisions for post-employment benefits and other non-current
employee benefits
Other provisions
Total provisions
31 Mar 2016
265
31 Dec 2015
264
Index
100
84,482
84,131
100
473
85,220
470
84,865
101
100
Deferred revenues
€13,069 thousand
In € thousand
Grants received from the European Regional Development Fund
and the Republic of Slovenia budget for the construction of the
new Notol 2 plant for production of pharmaceuticals
Grants received from the budget for the Dolenjske and
Šmarješke Toplice health resorts and Golf Grad Otočec
received for the Sinteza 4 project
– development of new technologies (FBD project)
for setting up information and technology solutions system
(GEN-I)
Grants by the European Fund – Development Centres of the
Slovene Economy
Property, plant and equipment received for free
Emission coupons
Total deferred revenue
Development Centres of the Slovene 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
31 Mar 2016
31 Dec 2015
Index
2,583
2,650
97
4,056
4,100
99
3
4
75
413
437
95
18
19
95
5,924
6,094
97
50
22
13,069
55
22
13,381
91
100
98
Regional Development Potentials; 1. Priority axis:
Competitiveness and Research Excellence; 1.1.
Priority objective: Improving Competitiveness and
Research Excellence.
Trade payables
In € thousand
Payables to domestic suppliers
Payables to foreign suppliers
Payables from advances
Total trade payables
€99,102 thousand
31 Mar 2016
41,418
56,040
1,644
99,102
31 Dec 2015
38,298
61,742
3,831
103,871
Index
108
91
43
95
41
€198,209 thousand
In € thousand
Accrued contractual discounts on products sold
Payables to employees – gross wages, other receipts and
charges
Derivatives
Other
Total other current liabilities
31 Mar 2016
121,433
31 Dec 2015
128,179
Index
95
36,995
33,657
110
23,968
15,813
198,209
0
18,501
180,337
85
110
Contingent liabilities
In € thousand
Guarantees issued
Other
Total contingent liabilities
42
€13,873 thousand
31 Mar 2016
13,253
620
13,873
31 Dec 2015
19,150
620
19,770
Index
69
100
70
CONDENSED FINANCIAL STATEMENTS OF KRKA, D. D., NOVO
MESTO, WITH NOTES
Statement of financial position of Krka, d. d., Novo mesto
In € thousand
Assets
Intangible assets
Investments in subsidiaries
Non-current receivables due from subsidiaries
Loans
Investments
Deferred tax assets
Other non-current assets
Total non-current assets
Assets held for sale
Inventories
Trade receivables
Other receivables
Loans
Investments
Total current assets
Total assets
Equity
Share capital
Treasury shares
Reserves
Retained earnings
Total equity
Liabilities
Provisions
Deferred revenue
Total non-current liabilities
Trade payables
Borrowings
Income tax payable
Total current liabilities
Total liabilities
Total equity and liabilities
31 Mar 2016
31 Dec 2015
Index
607,267
30,578
310,152
18,200
28,643
7,964
11,473
90
1,014,367
41
223,670
420,979
15,190
84,477
85
59,550
803,992
1,818,359
610,067
31,557
302,114
10,704
26,300
7,578
11,567
88
999,975
41
230,568
402,189
16,602
75,907
11,808
24,622
761,737
1,761,712
100
97
103
170
109
105
99
102
101
100
97
105
91
111
1
242
106
103
54,732
-21,912
162,657
1,268,998
1,464,475
54,732
-20,071
159,965
1,238,585
1,433,211
100
109
102
102
102
73,927
3,071
76,998
125,845
71,050
9,926
70,065
276,886
353,884
1,818,359
73,585
3,168
76,753
132,065
66,244
7,509
45,930
251,748
328,501
1,761,712
100
97
100
95
107
132
153
110
108
103
43
Income statement of Krka, d. d., Novo mesto
1–3/2016
263,371
-114,256
149,115
718
-62,083
-31,154
-17,230
39,366
33,022
-35,960
-2,938
36,428
-3,643
32,785
1.01
1.01
In € thousand
Revenues
Costs of goods sold
Gross profit
Selling and distribution expenses
R&D expenses
General and administrative expenses
Operating profit
Financial income
Financial expenses
Profit before tax
Income tax
Net profit
Basic earnings per share (in €)
Diluted earnings per share (in €)
1–3/2015
260,756
-112,873
147,883
526
-69,580
-28,853
-15,942
34,034
23,121
-525
22,596
56,630
-7,079
49,551
1.52
1.52
Index
101
101
101
137
89
108
108
116
143
6,850
-13
64
51
66
66
66
* Net profit / Average number of shares issued in the period, exclusive of treasury shares
** All issued shares are ordinary registered shares, therefore the diluted EPS equals the basic EPS.
Statement of other comprehensive income of Krka, d. d., Novo mesto
In € thousand
Net profit
Other comprehensive income for the period
Other comprehensive income reclassified to profit or loss in
future periods
Change in fair value of available-for-sale financial assets
Deferred tax effect
Net other comprehensive income reclassified to profit or
loss in future periods
Total other comprehensive income for the period (net of tax)
Total comprehensive income for the period (net of tax)
44
1–3/2016
32,785
1–3/2015
49,551
Index
66
386
-66
1,097
-186
35
35
320
911
35
320
33,105
911
50,462
35
66
Statement of changes in equity of Krka, d. d., Novo mesto
Reserves
In € thousand
Net profit
Total other comprehensive income for the
period (net of tax)
period (net of tax)
Transactions with owners, recognised
directly in equity
Transfer of previous period's profit to retained
earnings
Formation of reserves for treasury shares
Retained earnings
Share
capital
54,732
0
Treasury
shares
-20,071
0
Reserves
for
treasury
shares
20,071
0
0
0
0
0
0
0
851
0
-531
0
320
0
0
0
0
0
0
851
0
-531
32,785
33,105
0
0
0
0
0
0
0
0
136,868
-136,868
0
0
0
-1,841
0
0
1,841
0
0
0
0
0
0
0
0
0
0
0
0
0
-1,841
-1,841
0
0
-1,841
1,841
0
0
0
0
0
136,868
-138,709
-1,841
54,732
-21,912
21,912
105,897
14,990
30,000
-10,142
1,051,677
186,377
30,944
1,464,475
Share
premium
105,897
0
Legal
reserves
14,990
0
Statutory
reserves
30,000
0
Fair value
reserve
-10,993
0
Other
profit
reserves
1,051,677
0
Retained Profit for
earnings the period
50,040
136,868
0
32,785
Total
equity
1,433,211
32,785
45
ZAUPNO
Reserves
In € thousand
Net profit
Total other comprehensive income for the
period (net of tax)
period (net of tax)
Transactions with owners, recognised
directly in equity
Transfer of previous period's profit to retained
earnings
Formation of reserves for treasury shares
46
Retained earnings
Share
capital
54,732
0
Treasury
shares
-10,677
0
Reserves
for
treasury
shares
10,677
0
0
0
0
0
0
0
911
0
0
0
911
0
0
0
0
0
0
911
0
0
49,551
50,462
0
0
0
0
0
0
0
0
126,245
-126,245
0
0
0
-2,383
0
0
2,383
0
0
0
0
0
0
0
0
0
0
0
0
0
-2,383
-2,383
0
0
-2,383
2,383
0
0
0
0
0
126,245
-128,628
-2,383
54,732
-13,060
13,060
105,897
14,990
30,000
-6,520
1,001,636
181,489
47,168
1,429,392
Share
premium
105,897
0
Legal
reserves
14,990
0
Statutory
reserves
30,000
0
Fair value
reserve
-7,431
0
Other
profit
reserves
1,001,636
0
Retained Profit for
earnings the period
55,244
126,245
0
49,551
Total
equity
1,381,313
49,551
ZAUPNO
Statement of cash flows of Krka, d. d., Novo mesto
In € thousand
OPERATING ACTIVITIES
Net profit
Adjustments for:
– amortisation/depreciation
– foreign exchange differences
– investment income
– investment expenses
– interest expenses and other financial expenses
– income tax
Operating profit before changes in net operating current assets
Change in trade receivables
Change in inventories
Change in trade payables
Change in provisions
Change in deferred revenues
Change in other current liabilities
Income taxes paid
Net cash flows from operating activities
INVESTING ACTIVITIES
Interest received
Proceeds from sale of current investments
Proceeds from sale of property, plant and equipment
Acquisition of intangible assets
Purchase of property, plant and equipment
Acquisition of subsidiaries and a share of minority interest without obtained
assets
Non-current loans
Proceeds from repayment of non-current loans
Payments to acquire non-current investments
Proceeds from sale of non-current investments
Payments/Proceeds in connection with current investments and loans
Proceeds from derivative financial instruments
Net cash flows used in investing activities
FINANCING ACTIVITIES
Interest paid
Proceeds/Payments in connection with current borrowings
Dividends and other profit shares paid
Net cash flows used in financing activities
Net increase/decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rate fluctuations on cash held
Net cash and cash equivalents at the end of the period
1–3/2016
1–3/2015
32,785
37,134
20,758
-1,494
-21,823
35,786
264
3,643
69,919
-24,107
6,898
-9,798
342
-97
245
-1,198
42,204
49,551
25,691
20,353
-2,062
-483
291
513
7,079
75,242
-17,476
-16,729
-10,624
842
-607
-1,063
-5,474
24,111
401
0
61
-424
-13,779
482
24
1,298
-1,141
-17,956
-8,038
-2,396
-1,405
666
-20
17
-8,980
21,292
-10,209
-612
7,252
-7
5
1,075
0
-11,976
-450
4,993
-78
-1,841
2,624
34,619
24,622
309
59,550
-508
-8,065
-23
-2,383
-10,979
1,156
8,203
461
9,820
47
Segment reporting of Krka, d. d., Novo mesto
In € thousand
Revenues
Operating expenses
Operating profit
Interest income
Interest expenses
Income tax
Net profit
Investments
Depreciation
Amortisation
Total assets
Total liabilities
48
European Union
1–3/2016
1–3/2015
171,501
160,224
605
392
-145,141
-140,536
26,965
20,080
220
267
-230
-469
131
1,981
-2,495
-4,176
24,601
17,885
18,497
17,458
14,244
13,699
914
855
31 Mar 2016
1,335,630
266,584
South-East Europe
1–3/2016
1–3/2015
13,789
12,747
4
4
-9,954
-9,761
3,839
2,990
0
0
0
0
6
-6
-355
-622
3,490
2,362
0
0
434
411
73
68
East Europe
1–3/2016
1–3/2015
67,523
78,749
109
130
-63,131
-70,674
4,501
8,205
189
180
0
0
-3,020
21,584
-417
-1,707
1,064
28,082
0
0
4,584
4,761
360
421
Other
1–3/2016
1–3/2015
10,558
9,036
0
0
-6,497
-6,277
4,061
2,759
0
0
0
0
-55
-963
-376
-574
3,630
1,222
0
0
93
90
56
48
Total
1–3/2016
1–3/2015
263,371
260,756
718
526
-224,723
-227,248
39,366
34,034
409
447
-230
-469
-2,938
22,596
-3,643
-7,079
32,785
49,551
18,497
17,458
19,355
18,961
1,403
1,392
31 Dec 2015 31 Mar 2016 31 Dec 2015 31 Mar 2016 31 Dec 2015 31 Mar 2016 31 Dec 2015 31 Mar 2016 31 Dec 2015
1,294,913
41,658
39,325
431,236
420,117
9,835
7,357 1,818,359 1,761,712
242,426
8,973
7,457
56,374
57,013
21,953
21,605
353,884
328,501
Notes to the financial statements of Krka, d. d., Novo mesto
Costs by nature
In € thousand
Costs of goods and material
Costs of services
Amortisation and depreciation
Inventory write-offs and allowances
Receivables impairment and write-offs
Total costs
Change in the value of inventories of products and work in
progress
Total
€224,723 thousand
1–3/2016
77,771
74,378
49,768
20,758
1,515
45
4,662
228,897
1–3/2015
89,551
71,230
49,029
20,353
1,100
5,556
7,070
243,889
Index
87
104
102
102
138
1
66
94
-4,174
-16,641
25
224,723
227,248
99
In € thousand
Gross wages and salaries and continued pay
Social security contributions
Pension insurance contributions
Post-employment benefits and other non-current employee
benefits
Other employee benefit costs
Total employee benefit costs
€49,768 thousand
1–3/2016
40,535
2,665
4,835
1–3/2015
39,442
2,605
4,596
Index
103
102
105
341
842
40
1,392
49,768
1,544
49,029
90
102
In € thousand
Grants and assistance for humanitarian and other purposes
Environmental protection expenses
Other taxes and levies
Loss on sale of property, plant and equipment and intangible
assets
Other expenses
Total other operating expenses
€4,662 thousand
1–3/2016
200
525
3,105
1–3/2015
302
608
5,033
Index
66
86
62
89
279
32
743
4,662
848
7,070
88
66
Other taxes and levies include taxes (claw-back and similar) that have been imposed in several markets of Krka
Group operations in recent periods.
49
Financial income and expenses
In € thousand
Net foreign exchange differences
Interest income
Proceeds from sale of investments
Derivatives income
– income
Total financial income
Interest expenses
Derivatives expenses
– change in fair value
Other financial expenses
Total financial expenses
1–3/2016
11,315
409
6
0
21,292
21,292
33,022
-230
0
-35,697
-35,697
-33
-35,960
-2,938
Income tax
0
143
49
0
75
6,850
thousand. The effective tax rate is 10.0%, down 2.5
of a percentage point from the same period last
year.
€607,267 thousand
31 Mar 2016
22,928
269,903
284,647
29,789
607,267
In € thousand
Land
Buildings
Equipment
Property, plant and equipment being acquired
Total property, plant and equipment
The value of property, plant and equipment
represents just over 33% of the Krka Company's
31 Dec 2015
22,826
275,657
295,893
15,691
610,067
Index
100
98
96
190
100
total assets. Krka’s major investments are described
in the chapter Investments in the Business Report.
Intangible assets
Concessions, patents, licences and similar rights
Intangible assets being acquired
Total intangible assets
Index
50
91
€3,643 thousand
Current income tax amounts to €3,615 thousand,
which is 9.9% of pre-tax profit. Together with the
deferred tax of €28 thousand, the total income tax
expense in the income statement equals €3,643
In € thousand
1–3/2015
22,650
447
0
24
0
0
23,121
-469
-12
0
0
-44
-525
22,596
€30,578 thousand
31 Mar 2016
26,283
4,295
30,578
31 Dec 2015
27,642
3,915
31,557
Index
95
110
97
Intangible assets include marketing authorisation documentation for new medicines, and software.
50
Loans
€113,120 thousand
31 Mar 2016
28,643
20,785
7,858
84,477
1,795
36,186
46,309
187
113,120
In € thousand
Non-current loans
– loans to subsidiaries
– loans to others
Current loans
– loans to subsidiaries
– loans to others
– current interest receivable
Total loans
Non-current loans represent 25% of total loans.
Non-current loans to others include loans that the
Company extends in accordance with its internal
31 Dec 2015
26,300
18,908
7,392
75,907
2,459
37,040
36,230
178
102,207
Index
109
110
106
111
73
98
128
105
111
acts to its employees and that are primarily housing
loans.
Current loans to others include €46,000 thousand of
short-term bank deposits with maturities longer than
30 days.
Investments
In € thousand
Non-current investments
– available-for-sale financial assets
Current investments
– shares and interests held for trading
– derivatives
Total investments
€8,049 thousand
31 Mar 2016
7,964
7,964
85
85
0
8,049
31 Dec 2015
7,578
7,578
11,808
79
11,729
19,386
Index
105
105
1
108
0
42
Available-for-sale financial assets include €711 thousand of investments in shares and interests in Slovenia, and
€7,253 thousand of investments in shares and interests abroad.
Inventories
In € thousand
Material
Work in progress
Products
Merchandise
Inventory advances
Total inventories
€223,670 thousand
31 Mar 2016
95,587
64,445
55,138
8,110
390
223,670
31 Dec 2015
103,895
61,941
54,934
9,172
626
230,568
Index
92
104
100
88
62
97
51
Trade and other receivables
€436,169 thousand
In € thousand
Current trade receivables
– current receivables due from subsidiaries
– current receivables due from customers other than Group
companies
Other current receivables
Total receivables
31 Mar 2016
420,979
228,614
31 Dec 2015
402,189
217,352
Index
105
105
192,365
184,837
104
15,190
436,169
16,602
418,791
91
104
In € thousand
Cash in hand
Bank balances
Total cash and cash equivalents
€59,550 thousand
31 Mar 2016
2
59,548
59,550
Equity
In € thousand
Share capital
Treasury shares
Reserves:
– reserves for treasury shares
– share premium
– legal reserves
– statutory reserves
– fair value reserve
Retained earnings
Total equity
Current borrowings
– borrowings from subsidiaries
– current interest payable
Total borrowings
52
Index
200
242
242
€1,464,475 thousand
31 Mar 2016
54,732
-21,912
162,657
21,912
105,897
14,990
30,000
-10,142
1,268,998
1,464,475
Borrowings
In € thousand
31 Dec 2015
1
24,621
24,622
31 Dec 2015
54,732
-20,071
159,965
20,071
105,897
14,990
30,000
-10,993
1,238,585
1,433,211
Index
100
109
102
109
100
100
100
92
102
102
€71,050 thousand
31 Mar 2016
71,050
500
70,436
114
71,050
31 Dec 2015
66,244
500
65,443
301
66,244
Index
107
100
108
38
107
Provisions
€73,927 thousand
In € thousand
Provisions for post-employment benefits and other non-current
employee benefits
Total provisions
31 Mar 2016
31 Dec 2015
Index
73,927
73,585
100
73,927
73,585
100
Deferred revenue
€3,071 thousand
In € thousand
and Republic of Slovenia budget for the project Pharmaceuticals
Production in the new Notol 2 Plant
received for the Sinteza 4 project
– development of new technologies (FBD project)
for setting up information and technology solutions system
(GEN-I)
Property, plant and equipment received free of charge
Emission coupons
Total deferred revenue
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
31 Mar 2016
31 Dec 2015
Index
2,583
2,650
97
3
4
75
413
437
95
18
19
95
32
22
3,071
36
22
3,168
89
100
97
Development Potentials; 1. Priority axis
Competitiveness and Research Excellence; 1.1.
Priority objective: Improving Competitiveness and
Research Excellence.
Trade payables
In € thousand
Payables to subsidiaries
Payables to domestic suppliers
Payables to foreign suppliers
Payables from advances
Total trade payables
€125,845 thousand
31 Mar 2016
55,679
37,526
31,575
1,065
125,845
In € thousand
Accrued contractual discounts on products sold
Payables to employees – gross wages, other receipts and
charges
Derivatives
Other
Total other current liabilities
31 Dec 2015
58,766
34,124
35,733
3,442
132,065
Index
95
110
88
31
95
€70,065 thousand
31 Mar 2016
12,985
31 Dec 2015
12,985
Index
100
27,506
26,185
105
23,968
5,606
70,065
0
6,760
45,930
83
153
53
Contingent liabilities
In € thousand
Guarantees issued
Other
Total contingent liabilities
54
€15,587 thousand
31 Mar 2016
14,967
620
15,587
31 Dec 2015
21,306
620
21,926
Index
70
100
71
MANAGEMENT BOARD STATEMENT OF RESPONSIBILITIES
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 three months ended 31 March
2016 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–
March 2016 were drawn up using the same
accounting principles as for the annual financial
statements of the Krka Company and the Krka
Group for the full year 2015.
The condensed interim financial statements for the
three months ended 31 March 2016 were drawn 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 2015.
The Management Board is responsible for
implementing measures to maintain the value of the
Krka Company and the Krka Group assets, and to
prevent and detect frauds or other forms of
misconduct.
The Management Board states that all transactions
between related parties in the Krka Group were
executed on the basis of purchase contracts, using
market prices for products and services.
Novo mesto, 26 April 2016
Jože Colarič,
President of the Management Board and Chief Executive
Dr Aleš Rotar,
Member of the Management Board
Dr Vinko Zupančič,
David Bratož,
Milena Kastelic,
Member of the Management Board – Worker Director
55

Unaudited Interim Report for January-March 2016

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Unaudited Interim Report for the Krka Group and the Krka Company

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