06.08.2007:
ZENTIVA N.V. ANNOUNCES FIRST HALF RESULTS 2007
Prague and London 6 August 2007
– Zentiva N.V. published today its first half results for the period ending June 2007.
Zentiva’s net sales in the period January through June 2007 amounted to CZK 6,796.6 million, a 5.5% increase on the same period last year.
This sales performance was driven by an 8.7% increase in pharmaceutical sales to CZK 6762.6 million. As a result, pharmaceutical sales now account for close to 93.4% of Zentiva’s gross revenues, up from 92.5% in the same period last year. Within this, prescription products sales increased by 6.8% to CZK 5,294.5 million, whilst sales of over-the-counter products increased by 15.8% to CZK 1,468.1 million.
Geographically Zentiva saw good sales growth in Romania, Slovakia, Poland, Russia and the Ukraine. The greatest increase in sales was seen in Romania, with sales up 21.3% to CZK 1,330.2 million. Sales in Slovakia increased by 17.1% to CZK 1,079.1 million while in Poland they increased 11.6% to CZK 988.8 million and in Russia were up 13.4% to CZK 601.6 million. In the Ukraine one of Zentiva’s newer markets, sales grew by 21.8% to CZK 170.1 million, while sales in Hungary started positively following the company’s entry into this market in March 2007. Sales in Zentiva’s home market of the Czech Republic declined by 5.6% to CZK 2,226.5 million in the first half of 2007. This decline in sales was caused by pricing pressures in the market as the government continued to act to curb healthcare expenditure.
In the first half of 2007, Zentiva reported profit before tax of CZK 1,182.3 million, a 3.9% decline and profit attributable to the equity holders of the parent fell 6,8% to CZK 831.3 million. The decline in profits in the first half of 2007 was the result of continued investment in sales and marketing and certain costs in Romania.
On 2nd July 2007 Zentiva completed the acquisition of a controlling 75% stake in Eczacıbaşı Generic Pharmaceuticals, one of the leading generic pharmaceutical companies in Turkey. The acquisition is the largest in the Company’s history and is a further step towards the company’s goal of becoming the leading pharmaceutical company in Central and Eastern Europe.
Jiří Michal, Chairman and CEO commenting today said:
“Zentiva remains committed to its profitable growth strategy and our goal of becoming the leading pharmaceutical company in Central and Eastern Europe.
Our first half figures demonstrate the benefits of building our presence across the region. In the first half, we have seen positive sales performances in Romania, Slovakia, Poland, Russia and the Ukraine. In these markets we have continued to deliver growth well ahead of, or in line with, the markets and our peers. In the Czech Republic our sales performance has been impacted by pricing pressures and we have already taken actions to address these more difficult conditions and will continue to do so to maintain our efficiency in this market.
In the first half, our performance has been undermined by a number of factors, the increasingly difficult environment in our largest market, the Czech Republic, our investment in sales and marketing as we continue to build our presence across the region, and allowance for doubtful debts and inventory related costs in Romania which have reduced profitability.
Looking ahead we expect a more positive sales performance in the second half of the year as our recent and planned product launches enable our sales and marketing organization to drive our sales at a faster pace than the market and our competitors.
The recent completion of the acquisition of Eczacıbaşı Generic Pharmaceuticals, the third largest generics company in Turkey, has further strengthened our position in the region. As a result of this major strategic move we have gained access to a very strong commercial and distribution capability in one of the world’s most dynamic pharmaceutical markets. This acquisition will allow us to implement our primary care focused strategy to a much enlarged patient population.
I remain confident that the newly enlarged Zentiva organization will be able to deliver on our strategy for profitable growth as we benefit from our increasing presence across Central and Eastern Europe. I am also pleased that this strategy will allow us to make a significant contribution to improving the healthcare of patients in the markets which we are targeting.”
Zentiva N.V. is an international pharmaceutical company focused on developing, manufacturing and marketing modern branded generic pharmaceutical products. The Company has leading positions in the pharmaceutical markets in the Czech Republic, Slovakia, Romania, and Turkey and is growing rapidly in Poland, Russia, Bulgaria, the Ukraine and the Baltic States. Zentiva’s strategy is to further this growth by increasing patient access to modern medicines through primary care providers within the EU and Eastern Europe. This growth will be based on further organic development of Zentiva’s existing business and through selective acquisitions, whilst maintaining profitable growth.
The Company addresses a wide range of therapeutic areas but has a particular focus on cardiovascular disorders, inflammatory conditions, pain, infections and diseases of the central nervous system and the gastrointestinal and urology fields.
The Zentiva Group employs almost 6,400 people and has production sites in the Czech Republic, Turkey, Romania and Slovakia.
Zentiva is listed on the Prague and London Stock Exchanges. The Company’s largest shareholders are Sanofi-Aventis (24.9%) and Česká pojišťovna and related parties (12.3%). Zentiva’s management holds 6.0% of the company shares. Other institutional and private investors hold a combined 56.8% of company shares.
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