PELION SA In Q1 2015, the Pelion Healthcare Group's revenue was up 11.5%, its gross margin grew by 20.4%, while its net profit reached PLN 13.9m.
During the quarter, work was underway on the implementation of the operational plans developed in 2014 in the Group's individual business lines. These efforts translated into better topline performance across all business segments, bringing the Pelion Healthcare Group's total revenue for Q1 2015 to an all-time high of PLN 2,174m.
The highest growth rate was reported by the retail segment (up 25%), with the growth driven primarily by the acquisition of the Natura beauty store chain in Q4 2014, which contributed PLN 94.8m to the Group's revenue in Q1 2015.Factoring out the effect of the acquisition, the retail segment expanded by 5.9%, chiefly on the back of higher sales by the Dbam o Zdrowie pharmacies. This means that the measures undertaken in the retail segment in Poland in the previous periods and continued in Q1 2015 started to produce the expected effects, reversing the negative trends seen in 2014.
The Group's market position was strengthened as a result, as the growth of the retail market in Poland was offset by a higher number of pharmacies, driving down the number of transactions per an average statistical pharmacy, with sales of an average pharmacy growing much slower than the market.
The Pelion Healthcare Group's revenue improvement was also supported by a very strong growth of the Polish pharmaceutical market. Wholesale distribution to pharmacies was up 11.9%, the retail market expanded by 8.5%, and sales to hospitals grew by 5.4%. In the period under review, the Lithuanian market shrank by 0.8%, which may have been related to customers shifting some of their purchases to the last months of 2014 in anticipation of Lithuania's entry into the eurozone, and should be viewed as a short-term trend.
In Q1 2015, Pelion companies worked to meet the needs of pharmacies and patients by providing modern services of the highest quality. PGF implemented tools for independent pharmacies, enhancing their operating efficiency. Work continued on the development of Doz direct, an innovative platform providing a closed, tightly controlled and fully secure system for distribution of drugs from the manufacturer to the patient.
The acquisition of the Natura beauty store chain in 2014 improved the Group's gross margin, but it also increased operating expenses. Consequently, the acquisition contributed negatively to the performance in Q1 2015. Unlike pharmacies, beauty stores record their weakest sales in the first quarter of the year. The higher expenses were also related to sales-support activities and the doz direct system. That innovative distribution platform, implemented since mid-2014, is yet to achieve its anticipated share in the structure of purchases. Therefore, the additional costs are not yet fully covered by the additional margin.
In each of Pelion Healthcare Group's business lines, steps are being taken to meet the 2015 objectives and ensure the Group's improved performance in a longer time horizon.
The highest growth rate was reported by the retail segment (up 25%), with the growth driven primarily by the acquisition of the Natura beauty store chain in Q4 2014, which contributed PLN 94.8m to the Group's revenue in Q1 2015.Factoring out the effect of the acquisition, the retail segment expanded by 5.9%, chiefly on the back of higher sales by the Dbam o Zdrowie pharmacies. This means that the measures undertaken in the retail segment in Poland in the previous periods and continued in Q1 2015 started to produce the expected effects, reversing the negative trends seen in 2014.
The Group's market position was strengthened as a result, as the growth of the retail market in Poland was offset by a higher number of pharmacies, driving down the number of transactions per an average statistical pharmacy, with sales of an average pharmacy growing much slower than the market.
The Pelion Healthcare Group's revenue improvement was also supported by a very strong growth of the Polish pharmaceutical market. Wholesale distribution to pharmacies was up 11.9%, the retail market expanded by 8.5%, and sales to hospitals grew by 5.4%. In the period under review, the Lithuanian market shrank by 0.8%, which may have been related to customers shifting some of their purchases to the last months of 2014 in anticipation of Lithuania's entry into the eurozone, and should be viewed as a short-term trend.
In Q1 2015, Pelion companies worked to meet the needs of pharmacies and patients by providing modern services of the highest quality. PGF implemented tools for independent pharmacies, enhancing their operating efficiency. Work continued on the development of Doz direct, an innovative platform providing a closed, tightly controlled and fully secure system for distribution of drugs from the manufacturer to the patient.
The acquisition of the Natura beauty store chain in 2014 improved the Group's gross margin, but it also increased operating expenses. Consequently, the acquisition contributed negatively to the performance in Q1 2015. Unlike pharmacies, beauty stores record their weakest sales in the first quarter of the year. The higher expenses were also related to sales-support activities and the doz direct system. That innovative distribution platform, implemented since mid-2014, is yet to achieve its anticipated share in the structure of purchases. Therefore, the additional costs are not yet fully covered by the additional margin.
In each of Pelion Healthcare Group's business lines, steps are being taken to meet the 2015 objectives and ensure the Group's improved performance in a longer time horizon.
Plans for the coming months
WHOLESALE TO PHARMACIES
The goals of the wholesale to pharmacies business are to maintain top quality of services, offer the broadest product mix and the best prices, keep the risk of trade receivables under control, scale up the activities designed to support pharmacies and manufacturers in their drug sales efforts, keep the revenue growth rate above the market average, develop the e-commerce channel, as well as monitor the market for acquisition opportunities (a potential IPO).
SALES TO HOSPITALS
The objective of the company in charge of sales to hospitals is to maintain the leading position on the market and keep accounts receivable at a safe level. Additionally, the company will seek to continually raise its customer service standards, improve the skills and qualifications of its staff, and maintain the top quality of services (including best-in-class logistics services and the support offered to hospitals in the form of dedicated financial programmes).
RETAIL SALES
The key objectives for the retail business include revenue growth and improvement of profit margins, as well as ensuring full availability of pharmaceuticals to patients. Additionally, the company in charge of retail sales plans to increase the number of franchise pharmacies in Poland, develop the e-commerce distribution channel, and implement the growth strategy for its beauty store chain. The strategy envisages combining beauty stores with pharmacies in order to face the challenge of providing customers with a comprehensive service offering.
SERVICES TO MANUFACTURERS
The key objectives of the company in charge of services for manufacturers are to win new accounts, especially for the direct and dedicated distribution services, undertake measures to optimise transport costs, and continue efforts to improve quality in line with the new Good Distribution Practice regulations and customer expectations.
Pelion's objective remains to consolidate its position as the leader of the healthcare market and the forerunner in e-health innovation, in particular by implementing new technical solutions in the area of customer service. Pelion is building its competitive strength by offering top quality, fast and reliable services, and by meeting the needs of patients and trading partners.
Pelion's objective remains to consolidate its position as the leader of the healthcare market and the forerunner in e-health innovation, in particular by implementing new technical solutions in the area of customer service. Pelion is building its competitive strength by offering top quality, fast and reliable services, and by meeting the needs of patients and trading partners.
The table below presents the Q1 2015 financial highlights, along with comparative year-on-year data:
| Q1 2015 | Q1 2014 | Change (%)* | |
| Revenue (PLNm) | 2,174 | 1,950 | 11.5% |
| EBITDA (PLNm) | 44.3 | 48.0 | -7.7% |
| EBITDA margin (%) | 2.0% | 2.5% | +0.5 pp |
| Operating profit (PLNm) | 32.2 | 39.3 | -18.1% |
| Operating margin (%) | 1.5% | 2.0% | +0.5 pp |
| Net profit attributable to owners of the parent (PLNm) | 13.9 | 24.5 | -43.0% |
| Net margin (%) | 0.6% | 1.3% | -0.7pp |
| Earnings per share (PLN) | 1.25 | 2.18 | -42.7% |
* Change calculated based on figures in PLN '000
For further information, please contact:
Pelion S.A. Press Office
Phone: (+48 42) 200 75 94
Fax: (+48 42) 200 75 35
Email: biuro_prasowe@pelion.eu
Pelion S.A. Press Office
Phone: (+48 42) 200 75 94
Fax: (+48 42) 200 75 35
Email: biuro_prasowe@pelion.eu
Pelion S.A. has operated on the market for twenty-five years, starting out as a local pharmaceutical wholesaler. In 1998, the Company shares were floated on the Warsaw Stock Exchange. Proceeds from the initial public offering fuelled the Company's dynamic growth and allowed it to embark on consolidation of the pharmaceutical wholesale market. Since its flotation, the Company has secured a top position among domestic distributors of medicinal products. Today, Pelion Healthcare Group is one of the largest groups operating in the healthcare markets in Poland and Lithuania. It provides services across all market segments (wholesale, retail sales and sales to hospitals), targeted at individual patients, pharmacies, hospitals, and manufacturers. As a holding company, Pelion S.A. oversees all areas of the Company's operations, which are conducted by PGF S.A. and Pharmapoint Sp. z o.o. (wholesale), PGF Urtica Sp. z o.o. (hospital sales), CEPD N.V. (retail sales), and Pharmalink Sp. z o.o. (services for manufacturers).
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