COMPANY PROFILE 2014
THIS PRESENTATION IS NOT AN ADVERTISEMENT OF SECURITIES IN ANY JURISDICTION.
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be identified by the fact that they do not only relate to historical or current events. Forward-looking statements often use words such as”
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forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, a number of which are
beyond Company’s control. As a result, actual future results may differ materially from the plans, goals and expectations set out in these
forward-looking statements. Any forward-looking statements made by or on behalf of the Company speak only as at the date of this
announcement. Save as required by any applicable laws or regulations, the Company undertakes no obligation publicly to release the results
of any revisions to any forward-looking statements in this document that may occur due to any change in its expectations or to reflect events
or circumstances after the date of this document.
The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered or sold in the United States or to US persons unless the securities are registered under the Securities Act, or an
exemption from the registration requirements of the Securities Act is available. No public offering of the securities will be made in the United
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person who is not a relevant person should not act or rely on this communication or any of its contents.
DISLAIMER
2
COMPANY IN BRIEF
3
○ The company was founded in the year
1997
○ One of the largest Russian generic drug
manufacturers
○ Operates three production facilities – in
Belgorod, Voronezh, and Pokrov
○ Representative office in Belarus,
subsidiaries in Ukraine and Kazakhstan
○ Employees 1.749 people as at 30.06.2014
○ Specializes mostly in prescription (RX)
drugs
○ Leading player in the oncology market
○ №1 by production of adhesive
bandages in Russia
○ IPO in April 2006
○ Current market cap. RUR 10.603 million
as at 20.06.2014
○ Trading at MICEX (Tickers: VRPH)
○ 81.2% of shares of OJSC "VEROPHARM"
belongs to LLC "GardenHills“
○18.8% of shares of OJSC "VEROPHARM"
are owned by minority shareholders
July August September October November December January February March April May June
2013 2014
MARKET STRUCTURE
4 * GRP – Government Reimbursement Program
Source: DSM Group, Q1 of 2014
Market Structure,
in value terms
Imported vs Domestic drugs,
in value terms
Rx, 38%
Rx vs OTC,
in volume terms
OTC, 62%
217
bln RUR
Pharmacy, 61%
Hospital, 21%
GRP*, 18%
Foreign, 76%
Domestic, 24%
Rx, 66%
Rx vs OTC,
in value terms
OTC, 34%
Market statistics
○ Pharmaceutical Market
for Q1 of 2014:
- In value terms increased by
6% and amounted to RUR
217 bln (RUR 206 bln for Q1 of
2013),
- In volume terms the market
decreased by 4% and amounted
to 1.459 mln units (1.520 mln
units for Q1 of 2013).
o Share of pharmacy segment in
value terms for Q1 of 2014
increased by 12% making 68% in
comparison with Q1 of 2013.
o Hospital sales share in value
terms increased by 14% and made
21% for Q1 of 2014.
o For Q1 of 2014 share of GRP decreased by 16% making 18% in
comparison with Q1 of 2013.
Rating Company
Increase 2014/2013
Share
Q1 2014 Q1 2013 Q1 2014 Q1 2014
1 1 PHARMSTANDART 3,2% 16,4% 16,5%
2 3 VALENTA 20,2% 4,5% 3,9%
3 4 STADA ARZNEIMITTEL 9,6% 3,5% 3,3%
4 5 VEROPHARM 3,6% 3,23% 3,24%
5 10 SERVIER 39,6% 2,9% 2,2%
6 6 EVALAR 3,6% 2,7% 2,7%
7 8 MATERIA MEDICA 1,8% 2,3% 2,3%
8 7 NEARMEDIC PLUS -10,4% 2,2% 2,6%
9 11 MICROGEN 7,2% 2,1% 2,0%
10 13 POLPHARMA PHARMACEUTICAL 15,8% 2,0% 1,8%
Source: Database «Retail, hospital audits , ONLS, VZN of Russia», DSM Group
*The pharmaceutical market of Russia includes medicines and dietary supplements 5
in value terms
DOMESTIC CORPORATIONS
RATING*
Rating Company
Increase 2014/2013
Share
Q1 2014 Q1 2013 Q1 2014 Q1 2013
1 1 PHARMSTANDART 1,5% 16,7% 17,8%
2 2 VALENTA 25,0% 5,7% 4,9%
3 3 STADA ARZNEIMITTEL 4,7% 4,4% 4,5%
4 4 EVALAR 3,6% 4,0% 4,1%
5 8 SERVIER 51,3% 3,6% 2,6%
6 6 MATERIA MEDICA 1,6% 3,3% 3,5%
7 5 NIARMEDIK PLUS -11,5% 3,2% 3,9%
8 7 VEROPHARM -0,7% 2,5% 2,7%
9 10 POLPHARMA PHARMACEUTICAL 19,7% 2,4% 2,2%
10 11 RIA PANDA 34,9% 2,1% 1,7%
DOMESTIC CORPORATIONS RATING
in the pharmacy segment
Source: DSM Group, Database «Retail audit of Russia» 6
in value terms
Rating Company
Increase 2014/2013
Share
Q1 2014 Q1 2013 Q1 2014 Q1 2013
1 2 MICROGEN 5,7% 5,8% 6,1%
2 3 VEROPHARM 17,6% 5,6% 5,3%
3 6 PHARMSTANDART 44,2% 5,5% 4,2%
4 8 KRASPHARMA 39,2% 5,2% 4,1%
5 4 ABOLMED RF -9,9% 4,3% 5,3%
6 7 SINTEZ 7,2% 4,0% 4,2%
7 27 YUGRAFARM 183,1% 3,0% 1,2%
8 1 BIOTEK -50,7% 2,9% 6,4%
9 5 ESCOM -31,4% 2,8% 4,5%
10 25 Federal State Unitary Enterprise on Manufacture of Bacterial and Viral Preparations of Chumakov Institute of Poliomyelitis & Viral Encephalitides, Russian Academy of Medical Sciences
149,8% 2,7% 1,2%
DOMESTIC CORPORATIONS RATING
in the hospital segment
Source : DSM Group, Database «Hospital audits of Russia» 7
in value terms
Rating Company
Increase 2014/2013
Share
Q1 2014 Q1 2013 Q1 2014 Q1 2013
1 1 F.HOFFMANN-LA ROCHE 11,0% 47,1% 38,4%
2 2 JOHNSON & JOHNSON 16,1% 30,0% 23,4%
3 8 SANOFI-AVENTIS 8,2% 2,1% 1,8%
4 9 VEROPHARM 3,2% 2,0% 1,7%
5 7 MERCK -1,3% 1,9% 1,8%
6 10 ASTRAZENECA 28,5% 1,5% 1,1%
7 3 LABORATORY TUTEUR -86,5% 1,4% 9,6%
8 11 TEVA PHARMACEUTICAL 10,2% 1,3% 1,0%
9 14 MEDAC GMBH 72,0% 1,2% 0,6%
10 13 BIOCAD 43,5% 1,1% 0,7%
RATING ALL OVER THE WORLD
CORPORATIONS
in the segment of oncology
Source: DSM Group
in money terms
8
Rating Company
Increase 2014/2013
Share
Q1 2014 Q1 2013 Q1 2014 Q1 2014
1 1 VEROPHARM -39,0% 15,2% 20,1%
2 5 F.HOFFMANN-LA ROCHE LTD 12,0% 8,9% 6,4%
3 2 BIOHIMIC -52,2% 8,2% 13,8%
4 4 EBEWE ARZNEIMITTEL GMBH -22,0% 6,8% 7,0%
5 3 TEVA PHARMACEUTICAL -56,7% 6,3% 11,7%
6 7 MEDAC GMBH 62,2% 5,9% 2,9%
7 6 JOHNSON & JOHNSON 15,6% 4,6% 3,2%
8 11 BIOCAD 36,0% 3,2% 1,9%
9 14 BAXTER HEALTHCARE CORP 39,5% 2,9% 1,7%
10 9 PFIZER -19,3% 2,7% 2,7%
RATING ALL OVER THE WORLD
CORPORATIONS
in the segment of oncology
Source: DSM Group
in volume terms
9
Rating Company Country
increase 2014/2013
Share
Q1 2014 Q1 2013 Q1 2014 Q1 2013
1 3 PAUL HARTMANN Germany 27,9% 19,6% 15,2%
2 1 VEROPHARM Russia -21,5% 17,3% 21,8%
3 2 GUIZHOU MIAOYAO PHARMACEUTICAL China -7,5% 17,2% 18,4%
4 4 BOUTY S.P.A. Italy -32,2% 8,6% 12,5%
5 7 JOHNSON & JOHNSON USA 56,0% 5,5% 3,5%
6 5 CHANGZHOU HUALIAN HEALTH China -8,8% 5,3% 5,7%
7 6 VALENTA Russia 6,2% 4,5% 4,2%
8 8 PHARMAPLAST S.A.E Egypt 14,7% 2,9% 2,5%
9 9 BETASAN Turkey 4,7% 2,6% 2,5%
10 10 MASTER PHARM POLAND Poland 20,8% 2,5% 2,1%
RATING ALL OVER THE WORLD
CORPORATIONS
in the adhesive bandages segment
10
in value terms
Source: DSM Group
BELGOROD
First modernization in 2001
Second modernization –
reconstruction with a view
of production facilities
expansion since 2011 up to
this day
Production: ampoules,
tablets, capsules, flacons
(lyophilized forms)
Employees: 625
VORONEZH
Production: all types of
adhesive bandages,
cosmetic products
Employees: 475
POKROV
New plant construction in
Volginsky settl. of Vladimir region
since 2011 up to this day
Production: flacons (lyophilized &
liquid forms)
Employees: 398
3 plants in the European
part of Russia
1.498 factory employees
as of June 30, 2014
Flexible manufacturing
facilities allow:
○ cost-efficient production
of both small and large
batches
○ quick shifts from one
product to another
PRODUCTION
FACILITIES
11
Prescription drugs (RX)
Geptor (Ademetionine) - 21.8*%;
Cerepro (Choline Alfoscerate) – 9.6%;
Tautax (Docetaxel) – 6.9%;
Anfibra (Enoxaparin sodium) - 4.9%;
Parclitaxel-LENS (Parclitaxel) - 3.7%.
Over-the-counter drugs (OTC)
Xilen (Xylometazoline) - 65.1%;
Motilak (Domperidone) - 18.6%;
Slabilen (Sodium picosulfate) - 9.7%;
Vitasharm and Vitatress (ATC «Vitamins») - 4.4%;
Ginkgo biloba (Ginkgo biloba) - 1.0%
Plaster (PL) + Cosmetic products (CP)
Traditional antimicrobial adhesive bandages – 30.7%;
Therapeutic plasters - corn plasters - 29.2%;
Traditional reel adhesive bandages - 22.1%;
Therapeutic plasters - pepper plasters – 9.0%;
Clinical nutrition – 3.3%.
Traditional Products (TP)
Vero-Dexamethasone (Dexamethasone) – 34.9%;
Pyridoxine (Pyridoxine) -24.3%;
Vero-Ciprofloxacin (Ciprofloxacin ) – 23.4%;
Vero-Loperamide (Loperamide) – 17.4%.
.
TOP-SELLERS
BY PRODUCT GROUPS
12 * The share of sales of drugs in the segment for the 1st quarter of 2014 in terms of value
Registration in Russia
In the 1st half of 2014 registered:
• 1 - ATG «Digestive tract and metabolism».
• 2 - biological food supplement;
• 1 - cosmetic product;
• 1 - substance included in National Register of Medicinal Products.
At various stages of the State registration are 24 medicines.
Registration in CIS countries and Mongolia
In the 1st half of 2014 registered 4 medicines:
• 4 - ATG «Antineoplastic agents»;
• 1 - ATG «Inhibitor of proteolysis»;
• 1 - ATG «immunostimulant»;
• 1 - ATG «Digestive tract and metabolism».
At various stages of the State registration are 15 medicines.
REGISTRATION
OF NEW DRUGS
13
DEVELOPMENT AND LAUNCH
OF NEW PRODUCTS
2013-2017 We have launched more than 100 pharmaceuticals for the recent 7 years
To achieve success of our products, we maintain active promotion within 18 months from launch
14
Antineoplastic and immunomodulating agents 10
Medications for the treatment of nervous system 10
Digestive tract and metabolism 3
Antimicrobials for systematic use 3
Medications for the treatment of respiratory system 3
Preparations for the treatment of diseases of urogenital organs and sex hormones 2
Medications affecting hematogenesis and blood 2
Preparations for the treatment of diseases of the musculoskeletal system 1
Medications for the treatment of cardiovascular system 1
Preparations for the treatment of skin diseases 1
Medicinal drugs 36
Diet nutrition 14
Perfumery and cosmetic products 10
Medical products 4
Dietary supplements 4
Non-medicinal products 32
At the moment in terms of development are 68 products
INVESTMENT
ACTIVITY
CONSTRUCTION OF NEW
PRODUCTION SITES
16
PROJECT 1 Construction of a new plant in Volginsky settl.
(Pokrov branch)
PROJECT 2 Construction of an annex to the existing
generics workshop in Belgorod
17
PROGRESS OF WORKS
PROJECT 1 (POKROV)
- Construction of a new plant of medical products in Volginsky settl. (Pokrov branch) began in 2011;
- The production of medicines is designed in accordance with the requirements of GMP EU and Russian standards;
- Assumes the use of insulator technology that will allow to create sterile conditions of production, protect the product from human impacts and human from the toxic effects of the product;
- Planned to create a section for the production of hormonal preparations;
- Manufacture hormonal drugs in Russia is missing and this site will allow to produce under contract;
- The work continues on the construction of the new plant in 2014.
LIST OF PRODUCTS*
PROJECT 1 (POKROV)
Manufacture of sterile drugs - cytostatics and hormones
• sterile injection solutions in glass vials;
• lyophilized medicines;
• sterile injectable solutions in plastic vials;
• sterile medicines in the form of dry powder;
• non-sterile drugs - pills hormones, cytostatics;
• non-sterile products – capsules.
Production of sterile non-toxic drugs
• sterile injection solutions in glass vials;
• lyophilized medicines;
• sterile injections in syringes.
18 * After the launch of the new plant
MEDICAL PRODUCTS PLANT
PROJECT 1 (POKROV)
19 19
INSTALLATION OF EQUIPMENT
PROJECT 1 (POKROV)
20
ADJUSTMENT OF EQUIPMENT
PROJECT 1 (POKROV)
21
CONSTRUCTION PROGRESS
PROJECT 2 (BELGOROD)
22
- Started modernization of the plant - construction of an annex to the existing generics workshop in 2011 ;
- The work on the construction of an annex to the existing generics workshop continues in 2014;
Increase in production capacity after the upgrade including through the launch of new forms:
- tablets coated sugar-coated;
- pills without shell;
- soft gelatin capsules.
BUILDING EXTENSIONS
PROJECT 2 (BELGOROD)
23
TECHNICAL FLOOR FURNISH
PROJECT 2 (BELGOROD)
24
IFRS for 2004 –2013 audited by Deloitte
FINANCIALS &
ANALYSIS
July August September October November December January February March April May June
2013 2014
MARKET CAPITALIZATION RUR 10.603 MLN (as at June 20, 2014 as per MICEX)
SHARE PRICE
26
• IPO in April 2006 • Shares placed at $28 per share • Tikers: VRPH (MICEX) • 81,2% of shares of OJSC «VEROPHARM» belongs to LLC «GardenHills» • 18,8% of shares of OJSC «VEROPHARM» are owned by minority shareholders
July August September October November December January February March April May June
2013 2014
50 mln
25 mln
0 mln
Volume of transactions, RUR
3m2014 3m2013
Sales 1 311 1 200
growth 9,3%
Gross profit 644 794
growth -18,9%
Gross Margin 49,2% 66,2%
EBITDA 310 500
growth -38,0%
EBITDA margin 23,7% 41,7%
SALES,
GROSS PROFIT
& EBITDA
27
mln RUR
Sales Gross profit EBITDA
1 311
644
310
1 200
794
500
3m2014
3m.2013
BALANCE SHEET
28
31.03.2014 31.12.2013
CL 1 732 1 305
growth 32,7%
share in L&EQ 12,5% 9,8%
DEBT 3 020 2 911
growth 3,7%
share in L&EQ 21,7% 21,8%
EQ 9 137 9 107
growth 0,3%
share in L&EQ 65,8% 68,4%
Current assaets 7 644 7 455
growth 2,5%
share in Assets 55,0% 56,0%
Non-current assets 6 244 5 868
growth 6,4%
share in Assets 45,0% 44,0%
31.03.2014 31.12.2013
9.137
6.244
9.107
5.868
1.732 7.644 1.305 7.455
3.020 2.911
Current assets
Non-current assets
Debt
CL
EQ
mln RUR
CREDIT PORTFOLIO
29
2 666 2 852
31.12.2013 31.03.2014
mln RUR
Address: 119530, Moscow, Russia, 2nd Yuzhnoportovy Proezd, 18-9
Tel.: +7 (495) 792-5330
Fax: +7 (495) 792-5328
E-mail: [email protected]
www.veropharm.ru