Krka, D. D., Novo Mesto · LJSE:KRKG
Krka, D. D., Novo Mesto — Investor Day (2023)
30 slides from Krka, D. D., Novo Mesto's investor day presentation, 2023
Slide 1: Business development 1-9 2023, FY 2023 estimates and 2024 guidance
Krka Group Investor Day 2023 Krka, d. d., Novo mesto (KRKG SV) Business development 1-9 2023, FY 2023 estimates and 2024 guidance Jože Colarič President of the Management Board and CEO
Slide 2: Mission, vision and values
OUR MISSION Living a healthy life. OUR VISION We are consolidating our position as one the leading generic pharmaceutical companies in the world. OUR VALUES Speed and flexibility Partnership and trust Creativity and efficiency
Slide 3: Well-diversified activities
Well-diversified activities Providing access to high quality affordable medicines Krka‘s presence on 70+ markets in 6 sales regions 49 subsidiaries outside Slovenia: 55+ million patients daily use Krka‘s 45% of all Krka Group workforce medicines worldwide 17 bn FDF produced annually in various Sales
Slide 4: Krka Group sales by regions
Krka Group sales by regions Largest market – Russian Federation: sales of €260m, +3% Sales 1–9 2023: EUR 1 billion 334.9 million 218 240 240 251 260 of goods and services (EUR +98,4 million, +8%) 1-9 2019 1-9 2020 1-9 2021 1-9 2022 1-9 2023 Overseas Markets Slovenia Second largest – Poland: sales of
Slide 5: Krka Group sales by product and service groups
Krka Group sales by product and service groups Sales 1–9 2023: EUR 1 billion 334.9 million of goods and services (EUR +98,4 million, +8%) ❖ Prescription drugs remain the most important group of products sold by the Krka Group. ❖ The greatest absolute growth Prescription Pharmaceuticals 82.0% EUR 1 b
Slide 6: Research and development
Research and development In the first nine months of 2023, we registered 7 new products (5 prescription and 2 animal health products). ❖ On the European markets, we added dapagliflozin to the range of medicines for the treatment of diabetes in the form of film-coated tablets. Dapagliflozin is a repr
Slide 7: Investments
Investments Investments in the Krka Group between January and September 2023 totalled €81.5 million, of which the controlling company allocated €69.0 million. ❖ Investments in the modernization and increase of capacity at the Notol plant, the OTO solid form production plant and the Ljutomer plant ar
Slide 8: FX impact for the period January - September 2023
FX impact for the period January - September 2023 The ruble exchange rate stabilized in the second half of 2023 NFR in million € Year 2022 Year 2023 160 139 Annual NFR NFR 1-9/2023 180 + € 52 million – € 34 million 120 160 80 140 40 120 Q1 Q2 Q3 Q4 Q1 Q2 Q3 0 100 -40 -2 -15 -14 -4 -16 80 RUBLE VALUE
Slide 9: Profit and loss statement of the Krka Group
Profit and loss statement of the Krka Group Costs by business function Change Index EUR thousands 1–9 2023 Share in % 1–9 2022 Share in % 2023–2022 2023/22 Revenues 1,340,536 100.0 1,242,203 100.0 98,333 108 Cost of Goods sold 569,320 42.5 561,071 45.2 8,249 101 Gross profit 771,216 57.5 681,132 54.
Slide 10: Krka Group business indicators
Krka Group business indicators EUR thousands 1–9 2023 1–9 2022 Gross profit 771,216 681,132 EBITDA 398,235 314,192 Operating income (EBIT) 320,274 233,784 Net profit 235,559 301,668 Gross profit margin 57.5% 54.8% EBITDA margin 29.7% 25.3% EBIT margin 23.9% 18.8% Net profit margin 17.6% 24.3% Return
Slide 11: 2024–2028 Strategy
2024–2028 Strategy Krka updates its Strategy biennially. Strategy adopted by the Management and Supervisory Boards on 15 November 2023. www.krka.biz 11
Slide 12: Worldwide medicines spending
Worldwide medicines spending Average growth is expected to return to pre-pandemic levels after 2024 The global pharmaceutical market will exceed USD 1,900 billion by 2027 and is expected to grow at an annual rate of 5% over the next five years, excluding Covid-19 vaccines. After growth in 2021, when
Slide 13: Estimated medicines consumption growth
Estimated medicines consumption growth Entire pharmaceutical market by therapeutic areas Krka is strongly present in products for Consumption in 2026 in Expected 5-year average annual growth the treatment of chronic diseases, USD billion (2023–2027) especially cardiovascular diseases, Oncology 377 1
Slide 14: Growth in 2022-2027 period
Growth in 2022-2027 period Entire pharma market • Over the past decade, drug consumption has increased by 36% due to increased 230 Other access to medicines worldwide, but growth 175 Generics is expected to slow by 2027. 186 340 Non-originator 150 245 • There are inequalities in healthcare in the EU
Slide 15: Originator products sales at risk
Originator products sales at risk Expiration of patents in developed markets An increased number of small molecule patent expirations is expected in the coming years 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 -22.1 -21.9 -23.4 -20.5 -10.5 -5.5 -14.6 -21.7 -1.4 -3.7 -27.4 -5.2 -22.1 -28.7 -22.
Slide 16: Volume growth is an important factor for generics
Volume growth is an important factor for generics Krka successfully increases volumes sold 100% 96% 90% 90% 85% 85% 77% 75% 75% 80% 73% 69% 68% 69 % 70% 62% 60% 60% 60% 55% 50% 44% 43% 37% 35% 40% 32% 29% 30% 28% 33 % 30% 20% 10% 0% Uzbekistan Ukraine Russian fed. Croatia Poland Germany Romania Hung
Slide 17: Industry trends
Industry trends Solid growth expected in Krka′s generic markets in the next three to five years The following average Germany Poland Russian Federation annual growth in the (83 million population) (38 million population) (144 million population) €25.6 billion €12.5 billion consumption of generic €10
Slide 18: Krka's global position
Krka‘s global position Generics / Biosimilars / APIs / OTC world sales in million USD in 2022 10,000 9,000 8,000 7,000 6,000 5,000 INNOVATIVE GENERIC 4,000 MEDICINES 3,000 16th GAINED 3 PLACES IN 2022 2,000 1,000 0 Shanghai Fosun Aurobindo Cipla Dr Reddy's Krka Macleods Celtrion Ache Alkem Amneal Sa
Slide 19: Long-term stable business growth
Long-term stable business growth Growing faster than the global pharmaceutical market Pieces sold CAGR (2005–2022) 6.9% Sales revenue CAGR(2005–2022) 7.4% Net income CAGR(2005–2022) 10.0% Global pharma market CAGR(2005–2022) 5.6% 18 1,600 16 1,400 14 1,200 12 Pieces sold billion 1,000 10 EUR million
Slide 20: Key strategic objectives and guidelines 2024 – 2028: sales, margins, R&D, CAPEX
Key strategic objectives and guidelines 2024 – 2028 Sales, business model, margins, R&D, CAPEX At least 5% average annual sales growth in terms of volume / value To strengthen and optimise the vertically integrated business model ❖ Krka‘s model has proven to be an effective strategic guideline and a
Slide 21: Key strategic objectives and guidelines 2024 – 2028: dividends, M&A, ESG
Key strategic objectives and guidelines 2024 – 2028 Dividends, M&A, ESG To pursue a stable dividend policy ❖ When determining the net profit share for the annual dividend payments, to consider the Group's need to finance investments and acquisitions and to utilise at least 50% of the net profit for
Slide 22: Key strategic objectives and guidelines 2024 – 2028: markets
Key strategic objectives and guidelines 2024 – 2028 Markets Consolidate and strengthen the presence in Krka's traditional markets ❖ Consolidate the presence in the markets of Eastern, SE and Central Europe and increase the presence in the Western European and Asian markets. ❖ Strengthen the position
Slide 23: Key strategic objectives and guidelines: products
Key strategic objectives and guidelines 2022 – 2026 Products Innovative generic with high level of vertically integrated products ❖ In addition to the current product offering, which includes core drugs from key therapeutic segments, ensure the largest possible share of vertically integrated product
Slide 24: Vertically integrated business model of Krka
Vertically integrated business model of Krka Quality Generating value for stakeholders Recording management and Following patient and ❖ Quality, safe, and efficient medicines quality control at patient and client needs based on innovative solutions all stages direct client and satisfaction requireme
Slide 25: Revision of the Krka Group ESG policy
Revision of the Krka Group ESG policy ✓ Adopted in 2022 by the Management and Supervisory Boards, the ESG policy is a strategic document on ESG governance. Product quality & patient safety S ✓ It sets out fundamental principles and efforts of sustainability, which we pursue and adequate recognition
Slide 26: Integration of the ESG strategy into the business strategy
Integration of the ESG strategy into the business strategy ✓ In 2022, we developed a standalone ESG strategy for Full integration of ESG in Krka the Krka Group for the period 2022–2026. Group business strategy ✓ With this year's revision of the Business Strategy of the Krka Group for the period 2024
Slide 27: Sustainability is an important part of Krka
Sustainability Is an important part of Krka Selected ESG metrics & KPIs for 2022 E – Environmental G – Governance ✓ Specific use of energy (TJ/billion units) reduced by 6% on average ✓ Management and governance of the company in over the past few years. accordance with highest standards of corporate
Slide 28: Guidance for financial years 2023 and 2024
Guidance for financial years 2023 and 2024 In line with long-term strategic objectives 2023: Increase of sales guidance (€1,755 → €1,770 million) reaffirming net income at €300 million EUR Sales Net income (EUR million) (EUR million) 2024: +3 % +5 % 1.850 310 Sales: €1,850 million 1.770 300 Net inco
Slide 29: Living a healthy life.
(%4 KRKK Living a healthy life.
Slide 30: Disclaimer
Disclaimer The information, statements or data contained in this presentation has been prepared by Krka, tovarna zdravil, d. d., Novo mesto (hereinafter: the Company) and has been prepared solely for the purpose of informative presentation of the Company business operations. The presentation is not