PGF – Impressive Sales Growth
Polska Grupa Farmaceutyczna ended the second quarter of 2008 with an excellent result on sales in excess of PLN 1.3bn. Accordingly, the PGF Group posted a robust performance growth – increasing its revenue by more than a quarter relative to the corresponding period of 2007 (26% year on year).
“We have established our presence across all segments of the Polish market of pharmaceuticals distribution and a few months ago we also started to expand abroad,” says Jacek Szwajcowski, President of the PGF Group. “We have thus achieved a diversification of revenue sources whose benefits can best be seen in the very strong sales growth. The goal towards which we will be working now is to leverage the whole wealth of our potential and experience gained on the Polish market to quickly expand abroad”.
The second quarter saw the completion of another stage of the process aimed at dividing the PGF Group’s business into a wholesale segment and a retail segment. As a result of the efforts undertaken during that stage, the retail companies, which were earlier subsidiaries of different members of the PGF Group, were incorporated into CEPD N.V. Both PGF S.A. and CEPD N.V. are now positioned to focus on pursuing their respective strategic objectives - PGF S.A. specialises in wholesale and CEPD N.V. – in retail sale.
The streamlined structure of the PGF Group facilitates its international expansion, while helping improve the Group-wide business efficiency.“This is the right time to start looking for companies in the Central European markets that would fit in with our development concept, with a view to combining them with PGF S.A. The current situation on the financial markets is conducive to our investment plans, so we expect our potential acquisition targets from Central and Eastern Europe to be attractively valued,” says Mr Szwajcowski.
In the second quarter, the Group also embarked on efforts aimed at streamlining the operating processes in the wholesale segment.“The rapid growth of our business helps us exploit the potential synergies, and thanks to the generated savings the medicines in the pharmacies supplied by PGF SA can be priced more attractively for the patients,” adds Mr Szwajcowski.
The optimisation effort started in the second quarter has already led to a reduction of manpower by 284 full-time jobs. Another step was the reorganisation of the south-east region, which involved shutting down the warehouse in Tarnowiec and winding up the subsidiary based in that town, and dividing the responsibility for handling the sale in the region between the Kraków and Rzeszów-based companies.“The reorganisation will allow us to generate annual savings in the region of PLN 2m,”says Mr Szwajcowski.“We will also be able to unlock additional funds by selling our property in Tarnowiec”.
In the second quarter, the PGF Group also set out to revise the wholesale segment’s trading policies.“Because we want to capture the full potential for sales growth, we are simplifying the settlements procedure, as well as the arrangements underlying the cooperation between manufacturers, wholesalers and pharmacies,”says Jacek Szwajcowski.“The new, clear procedures and arrangements will make it easier for our business partners to manage the sale process, which in turn will translate into more attractive prices for the patients.”
The development strategy implemented by PGF S.A. should result in a significant sales growth both domestically and in foreign markets, while the scale-up of its operations should lead to lower unit costs and, consequently, to bottom-line improvement.
For further information, please contact:
Michał John
Press Office of Polska Grupa Farmaceutyczna
Tel: (+48 42) 61 33 594
Mobile: (+48) 0 691 730 142
Fax: (+48 42) 61 33 535
E-mail: michal_john@pgf.com.pl
Polska Grupa Farmaceutyczna S.A. has for many years been the leader of the Polish pharmaceuticals distribution market. It is also the first Polish pharmaceuticals distributor with an international reach – apart from Poland, it operates in Lithuania and Great Britain. In 1997, PGF was the first company in the industry to carry out a public offering , introducing its shares to trading on the Warsaw Stock Exchange.
With the funds raised through the offering, PGF embarked on the process of consolidation of the Polish pharmaceuticals distribution market. After a series of mergers and acquisitions, PGF emerged as the leading distributor and service provider in the Polish health-care sector and has remained the leader of all the segments of its market ever since. One out of every five medicines sold by Polish pharmacies comes from PGF’s warehouses. The Company is also the largest supplier of medicines to Polish hospitals. In 2001, PGF introduced a new distributor-pharmacy cooperation model, which was unique on the Polish market. The chief objective of the “I Care for My Health Pharmacies” programme is to bring together a number of independent pharmacies under a single brand, offering them support at many different levels. 1,800 pharmacies and 1.6 million patients already participate in the programme, making the “I Care for My Health Pharmacies” the largest retail partnership group in Poland and one of the three largest in Europe. In line with its development strategy, Polska Grupa Farmaceutyczna intends to intensively develop a comprehensive service platform, which will support all actors along the chain of distribution in the health-care sector.
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