Investor Newsletter Q2 2013

Transcription

1 Investor Newsletter CORE BUSINESS The Sopharma Group is a leading, vertically-integrated Bulgarian manufacturer, exporter and domestic distributor of pharmaceutical products with a strong presence in Eastern and South-East Europe, offering a wide range of prescription and OTC pharmaceutical products. The Group operates in the following business areas: production of pharmaceuticals, including medicines, mainly generics, and phyto-based substances, nutrition and food supplements ( Production of Pharmaceuticals ), which is primarily carried out by the Company and, to a lesser extent, by its production Subsidiaries, including Bulgarian Rose Sevtopolis and Unipharm in Bulgaria, Vitaminy in Ukraine and Ivancic i Sinovi in Serbia; distribution of pharmaceutical products, medical consumables, sanitary materials, vitamins, food additives and cosmetics ( D i s t r i b u t i o n o f Pharmaceuticals ), which is primarily carried out by Sopharma Trading in Bulgaria and Briz in Latvia; and production and distribution of non-pharmaceutical products, mainly medical devices, such as syringes and other disposable materials for medical use ( Production of Medical Devices ), which is mainly carried out by Momina Krepost. General information about Sopharma AD The company performs the production and marketing of medicinal substances and dosage forms; research, engineering and implementation activities in the field of phytochemistry, chemistry and pharmacy. Sopharma AD performs services as a production function and related ancillary and service activity. Shareholder structure The largest share of the capital of the company is held by legal entities - mostly financial services companies, as well as pension funds. The shares of the company are registered and freely transferable. As at the end of of the company has approximately 38% free float % 3.73% 3.34% 6.75% 9.09% 25.78% 20.42% Donev Investment Holding AD Telecomplect Invest AD FCC AD UPF Doverie AD Sopharma AD Other legal entities Physical persons On 10 September Sopharma AD received a notification for the acquisition of 11,885,951 shares or 9% of the capital of the Company by Rompharm Company OOD. The seller of the shares was Financial Consulting Company AD. After the trade FCC AD exited its position in the Company and the share of Rompharm Company OOD in Sopharma AD reached 13.5%. Management Board Sopharma AD has a one tier management system with a Board of Directors of five members as follows: Ognian Donev, PhD - Chairman, Vessela Stoeva - Deputy-Chairman and members Alexander Tchaushev, Andrey Breshkov and Ognian Palaveev. The company is represented and managed by the Executive Director Ognian Donev, PhD. Products The company has more than 210 products in its portfolio: mainly generics and 15 original products, 12 products are phyto-based. The original products of the Company (and in particular Carsil and Tempalgin) are key contributors to its revenues from export markets, while for the domestic sales the most important products are generics, among which is the leading medicine Analgin. Intellectual property Although oriented towards generic pharmaceuticals, Sopharma AD is known for many years with its traditional production of several unique products based on plant extracts obtained by selfdeveloped extraction technologies. These products are protected in addition to trademark and patent or corporate know-how. In all the years of its existence, Sopharma AD generates and protects its intellectual property. As a result, the company owns a large number of intellectual property, most of which - registered rights (trademarks, patents, designs) and unregistered items - mainly technology. TUESDAY, SEPTEMBER 10, 1

2 Developments in Earnings Year over year sales revenue of the Group increased by 12.8 million EUR or 7.2%, reaching million EUR in compared to million EUR in. Consolidated domestic sales grew by 7.4% on YoY basis, while exports increased by 6.9%. The contribution of sales in Bulgaria to the consolidated sales revenue in of amounted to 67%, reaching million EUR compared to million EUR in of Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 4.6 million EUR or 21.6%, amounting to 25.9 million EUR as at the end of the period, compared to 21.3 million EUR a year earlier. Operating profit of the Group increased by 3.8 million EUR or 23%, to 20.3 million EUR in of compared to 16.5 million EUR in of Consolidated net profit profit for the period ending 30 June increased by 2.7 million EUR, or 20.8%, reaching 15.7 million EUR compared to 13 million EUR in of The parent company Sopharma AD recorded increases in EBITDA by 15.9% and operating profit by 15.4% compared to the same period a year earlier. Sales and net profit remained at approximately the same levels. CONSOLI- DATED (mln ) UNCONSO- LIDATED (mln ) Change Sales Revenue % EBITDA % Operating Profit % Net Profit % ROE 11.3% 12.9% -1.6% ROA 5.2% 5.7% -0.5% Current Ratio Quick Ratio Net Debt/ЕBITDA Change Sales Revenue % EBITDA % Operating Profit % Net Profit % ROE 11.7% 12.7% -1.0% ROA 7.0% 7.8% -0.8% Current Ratio Quick Ratio Net Debt/ЕBITDA As at the end of of Sopharma AD has a 4.3% share of the Bulgarian pharmaceutical market in terms of value and a 13.8% share in terms of sales. For the first six months of the average share price of Sopharma AD has increased by 50%. Expenses STOCK DATA (10 SEPTEMBER ) Price 1.66 EUR 52 week high / low / % % Shares Outstanding 126,786,583 The operating expenses of the Group in the second quarter of increased by 8.5 million EUR or 7% from million EUR in of 2012 to million EUR in of due to growth in sales and therefore the carrying value of sold products in the internal market, increased cost of materials, personnel, depreciation and other operating expenses. Market Capitalization EPS Dividend per share Million EUR.163 EUR.043 EUR TUESDAY, SEPTEMBER 10, 2

3 News & Events Sopharma opened a new pharmaceutical plant for 75 million BGN His Excellency John Rowan, Irish Ambassador, Mihail Mikov, Chairman of the National Assembly and Ognian Donev, PhD, Chairman of the Board of Directors and Executive Director of Sopharma AD opened Sopharma's new high technology plant for solid dosage forms. The participation of His Excellency John Rowan is symbolic in itself since Ireland is the country holding the EU Presidency at present, and part of the equipment at an approximate value of 4 million BGN were financed through funds under OP Competitiveness. The preliminary design for the new plant received a Class 1 Investor Certificate in 2007 from the Bulgarian Investment Agency. The construction of the plant has completely changed Sopharma and is the last step in the modernization of all production facilities. The investment in the new facility amounts to 75 million BGN. The new manufacturing complex was built for two and a half years and it includes a plant for solid dosage forms with a gross floor area of m² and a laboratory and administrative complex with an area of m². The capacity of the plant for solid dosage forms is 4 billion tablets per year and it will provide 420 new jobs. This plant represents a new level of pharmaceutical manufacturing in Bulgaria, according to Mr. Donev's words. The new plant is the basis on which the Company will upgrade. Implementation of new technologies and products still lies ahead, which will depend on the development activity for which there will be much more funds available after the large investment in the plant, explained Mr. Donev. What makes us happy is that these jobs will be for operation of high technology equipment and I hope, considering conditions in Bulgaria, these will be wellpaid jobs. We have never stopped making investments, we are expecting to forthcoming opening of a warehouse in Varna, and then in Plovdiv, there are a lot of things which we can do, but it seems that in the field of manufacturing we have already radically changed the company's image", said Mr. Ognian Donev. Some of the guests at the opening were Evgeni Ivanov, Nikolay Dobrev, Levon Hampartsumyan, Kiril Domuschiev, Radosvet Radev, Hristo Hristov, Maxim Mayer, Nikolay Hadzhidonchev and other officials. The plant in numbers Investment 75 million BGN (38.3 million EUR) Capacity 4 billion tablets yearly in a two-shift mode 400 jobs, of which 80% are occupied by people with higher education Plant for solid dosage forms built-up area м² Laboratory and administrative complex built-up area 5000 м² High-shelves warehouse with 4200 pallet places with an electronic systems for material management The air conditioning system processes around м³ of air per hour and has м² air pipelines. Provides a controlled working environment for the pharmaceutical production. The construction took 2.5 years with a full-time employment of 150 people and over workday. The materials, equipment and services were contracted with over 200 Bulgarian and foreign suppliers. Over 120 km. of cables were used. TUESDAY, SEPTEMBER 10, 3

4 News & Events Annual General Meetings On 21 June was held the Annual Sopharma. It decided on the payment of dividends to shareholders at the amount of 0.07 BGN (gross) per share. Dividend payment will start on 29 July. In accordance with the Rules of the Central Depository AD, the dividend will be paid as follows: shareholders with open client accounts at an investment intermediary through the investment intermediary, for shareholders without accounts an investment intermediary through the branches of Eurobank EFG - Bulgaria / Postbank/ in the country. On 21 June was held the Annual Sopharma Trading AD. It decided on the payment of dividends to shareholders at the amount of 0.20 BGN (gross) per share. Dividend payment will start on 1 September. The dividend for 2012 will be paid as follows: shareholders with open client accounts at an investment intermediary through the investment intermediary, for shareholders without accounts an investment intermediary through the branches of SG Expressbank AD. On 25 June was held the Annual Unipharm AD. It decided on the payment of dividends to shareholders at the amount of 0.05 BGN (gross) per share. The dividend for 2012 will be paid as follows: shareholders with open client accounts at an investment intermediary through the investment intermediary, for shareholders with personal accounts at the Central Depository through the branches of DSK EAD. On 27 June was held the Annual Momina Krepost AD according to the announced and published agenda, adopting a decision that the profit for 2012, after subtracting 10% for the "Reserve Fund", to be transferred to the additional reserves of the company. European Communication Summit On 27 and 28 June annual European Communication Summit was held in Brussels, organized by the European Association of Communication Directors and Communication Director magazine. The working part of the conference was opened by Connie Hedegaard, EU Commissioner for Climate Action, which made a presentation for Communicate Sustainability. Issues about the future of PR-a, crisis communications, making ethical value in economic value for companies, creating values through communication and others were presented and discussed. The interactive session of Marie-Therese Letorney "Your most valuable communication tool and organic - your voice" provoked great interest. Considerable time and attention was paid to the digital communications that c h a n g e t h e v e r y n a t u r e o f communication and the business as a whole. Representatives of Sopharma, members of the Association, participated in discussions of issues related to corporate communications, media relations and more. The European Communication Summit is an annual two-day-conference in Brussels with the leading in-house c o m m u n i c a t i o n p r o f e s s i o n a l s. Participants come from the fields of business, politics, associations and media from all over Europe. More than 60 top speakers hold presentations and discussions during the Summit. Participants have the opportunity to debate strategies, tools, methods and best cases within the fields of Corporate Communication, PR, Media Relations and political communication. The event is co-hosted by the European Association of Communication Directors (EACD) and the Communication Director, a magazine for communication professionals. TUESDAY, SEPTEMBER 10, 4

5 Corporate Social Responsibility National Round Table on children's reading On April 4th, a meeting for the "Children's Literature - Challenges and Opportunities", took place at the American Center at Sofia City Library. Representatives of the Ministry of Education, City Library, libraries from across the country, as well as teachers, authors and publishers, were among the attendees. Topics discussed were the role of libraries in children's reading, the responsibility of publishers of children's literature, and art of the translation in children's literature. Presented was the "Summer reading fun" for, which for the third consecutive year, aims to include a wide range of participants to nurture and encourage reading habits in children. To participate in the initiative, kids and parents can find information on the project website: knigi Sopharma is a sponsor of the initiative of the Bulgarian portal azdeteto.bg, and together with the City Library "Summer reading fun", are planning large annual summer campaigns to promote children's reading. The initiative is aimed towards all children in Bulgaria aged 6 to 14 years and their parents, and will take place between June 1st and September 15th. Earth Day - Sopharma employees planted trees On the beautiful sunny day of April 25th, just two days before the Orthodox Palm Sunday, Sopharma employees planted 25 trees from a special selection of oak seeds with a lot of love and enthusiasm. Gingko Biloba and two large Magnolias are just some of the trees that were planted on the territory of the new Sopharma factory for solid forms. The second edition of the photo contest Philanthropy through the Lens has begun Bulgarian Charity Forum and the Bulgarian Charities Aid Foundation organized for a second successive year a photo contest on the topic of Charity through the Lens. The contest visualizes and promotes the role of charity in society, enabling professional and amateur photographers to capture and show the different faces of philanthropy. The categories in which winners will be appointed are ten: 1. Charity and Education 2. Charity and Health 3. Charity and Culture 4. Charity and Ecology 5. Charity and Social Support 6. Volunteering Changes the World 7. Charity through the Eyes of Children (only children up to 14 years shall compete in this category) 8. My Hero (faces and actions of people who did something extraordinary for another person or cause) 9. Photo-story of Charity (a group of 4 to 8 photographs) 10. Audience Award The winners of the first nine categories will be appointed by a jury with members: Boris Misirkov, Veselin Borishev, Elitsa Barakova, Krasimira Velichkova, Nadejda Pavlova, Nadejda Chipeva, Yavor Popov. The tenth winner will be appointed by voting of the audience on the contest website. All pictures must be accompanied by a short paragraph. The award ceremony of the winners will be held on July 2,, and the awarded photographs will be displayed at the Art Hall VIVACOM. They will also be published in a special catalogue along with the issue of the cultural and informational guide The Program. Starting in the autumn, the exhibition will travel throughout the country, in municipalities which have won categories in the contest, to present it to the local audience. There will be prizes for the winners provided by the sponsors of the contest Aurubis Bulgaria, Olympus, Odyssey Inn, and Sopharma. Partners of the contest are Bulgarian Academy of Photography Yanka Kiurkchieva, Bulgarian Photography Association, Photo Forum, Vivacom, Sofia Candidate for European Capital of Culture Media partners of the contest are: BNT, The Program, Trud newspaper, Bulgarian NGO Information Portal, Teacher.bg, Offroad Bulgaria, Vesti.bg. The deadline for sending the photographs is May 22, to: blagobektiv@gmail.com See category details and terms on blagobektiv.org/.n TUESDAY, SEPTEMBER 10, 5