EASTPHARMA LTD.
London, 16 May 2013 - EastPharma (EAST LI), a company active in the manufacturing and marketing of pharmaceutical products in Turkey and in other regional markets, announces its Q1 2013 sales performance and a review of its main subsidiary DEVA Holding's financial statements for the related period.
Management comment on the sales performance of EastPharma is provided in the attachment, and a presentation of the results will be available on the EastPharma website www.eastpharmaltd.com on 17 May 2013.
A conference call to review the Q1 2013 sales performance will be hosted by the management of EastPharma at 4:00pm London time on 17 May 2013 (11:00am New York / 5:00pm Zurich time / 6:00pm Istanbul time). The dial-in details are provided below.
Conference call:
Dial-in Number (UK): + 44 (0)20 7162 0077
Dial-in Number (US): + 1 877 491 0064
Dial-in Number (Switzerland): + 41 (0)434 5692 61
Dial-in Number (Germany): + 49 (0)695 8999 0507
Conference ID: 932191
For further information, please contact:
Investor Relations:
email: ir@eastpharmaltd.com
SALES UPDATE AND MANAGEMENT REVIEW
EASTPHARMA'S PERFORMANCE (According to IMS data) COMPARED TO TURKEY'S OVERALL Q1 2013 MARKET PERFORMANCE
According to IMS Health data, a total of 462.95mn units of drugs, worth TRY 3.88bn (USD 2.17bn), were sold in the Turkish Pharmaceutical market in Q1 2013.
In unit sales terms the Turkish market grew by 0.97% in Q1 2013, while Eastpharma's unit sales increased by 5.87% compared to same period of 2012, achieving sales of 24.03mn units according to IMS figures. With this growth in unit sales Eastpharma's market share in unit terms increased from 5.0% in Q1 2012 to 5.2% in Q1 2013 and the company maintained its 4th place ranking in the Turkish pharmaceuticals market.
By sales value in Turkish Lira, the national market increased by 5.33% in Q1 2013 compared to Q1 2012. According to IMS figures for Q1 2013, EastPharma achieved sales worth TRY 152.23mn (USD 85.20mn), an increase of 14.68% compared to Q1 2012. Consequently, EastPharma's market share by value increased from 3.6% in Q1 2012 to 3.9% in Q1 2013 and the company moved up to 6th place from 7th place in the national ranking.
MANAGEMENT COMMENTS ON EASTPHARMA's SALES PERFORMANCE IN Q1 2013 (IFRS):
According to IFRS results, revenue in Q1 2013 was USD 63.2mn, up 14.3% from the same period in 2012 (USD 55.3mn). In Turkish Lira terms, revenue increased by 13.8% in the same period (Net sales in Q1 2013 were TRY 112.5mn vs TRY 98.9mn net sales in Q1 2012).
The average US dollar exchange rate depreciated by 0.6% against the Turkish Lira to 1.78 in Q1 2013, which compares with an average rate of 1.79 in Q1 2012. The USD/TRY exchange rate was 1.7826 on 31 December 2012, while it was 1.8087 on 31 March 2013, which corresponds to an increase of 1.5%.
EastPharma's sales increase was driven by increased volumes in DEVA's Human Pharma Products businesses. In Q1 2013 versus Q1 2012, Human Pharma revenues increased by 18.9% (from USD 50.2mn to USD 59.7mn).
MANAGEMENT COMMENTS ON CAPITAL MARKET BOARD (CMB) FINANCIAL PERFORMANCE FOR DEVA Q1 2013:
Deva's Capital Markets Board (CMB) results show revenue in Q1 2013 was TRY 114.2mn, up 14.6% from the same period in 2012 (TRY 99.7mn).
Deva's sales increase in TRY terms was mainly due to increased volumes at Deva's Human Pharma businesses. In Q1 2013 versus Q1 2012, Human Pharma revenue increased by 19.1% (from TRY 90.6mn to TRY 107.9mn).Veterinary Products revenue decreased by 28.4% (from TRY 8.8mn to TRY 6.3mn).
Deva's gross profit in Q1 2013 was TRY 45.4mn, up from TRY 37.5mn in Q1 2012. The gross profit margin improved in Q1 2013 to 40% vs 38% in Q1 2012.
EBITDA in Q1 2013 was TRY 23.6mn vs TRY 16.5mn in Q1 2012 representing an EBITDA margin of 20.7% vs 16.6% in Q1 2012.
Operating expenses in Q1 2013 increased by 3.4%, from TRY 26.7mn to TRY 27.6mn. The ratio of operating expenses to revenues decreased to 24.1% from 26.7% compared to Q1 2012. Sales and marketing expenses in Q1 2013 were 17.5% of revenues; general administrative expenses were 6.3% of revenues. These expenses were 18% and 6.9% in Q1 2012, respectively.
Net finance income / expense increased by TRY 2.6mn, from TRY 4.0mn to TRY 6.6mn in Q1 2013 compared to Q1 2012. This was primarily due to foreign exchange gain / losses on borrowings: Deva made a foreign exchange loss of TRY 0.7mn in Q1 2013, compared to a gain of TRY 2.9mn in Q1 2012 on borrowings.
Receivable days at 31 March 2013 were 127 days, compared to 129 days as at 31 December 2012.
Philipp Haas, EastPharma's Chairman and CEO, said; "The first quarter results show a continued improvement in operating results. It is especially rewarding to see that we are again growing more strongly than the market, while we are at the same time keeping free goods promotions at reasonable levels. Our efforts on cost containment have also contributed to the good results.
Going forward, we expect further strong competition and a difficult human pharma market; however, we are well positioned for stiff competition, as we are efficient enough in our cost components. New product introductions will keep the positive sales momentum up.
The veterinary market is in a very difficult phase, due to a collapse in meat prices at a time when all input prices, especially grains, have soared, and we think the outlook for the remainder of the year is negative, while in the long term, the sector will undoubtedly benefit from a stable environment.
We also believe that overall we will see a stable currency for this year, which will keep our finance costs under control and will help us to manage our debt in an efficient manner."