EastPharma Ltd : Audited Financial Statements' Announcement for The Year Ended
31 December 2012
London, 21 March 2013 - EastPharma (EAST LI), a company active in the
manufacturing and marketing of pharmaceutical products in Turkey and in other
regional markets, announces its year end 2012 audited financial statements and
its main subsidiary DEVA Holding's financial statements for the related
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 28 March 2013.
A conference call to review the 2012 financial performance will be hosted by
the management of EastPharma at 4:00pm London time on 28 March 2013 (12:00pm
New York / 5:00pm Zurich time / 6:00pm Istanbul time). The dial-in details are
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: 929851
For further information, please contact:
SALES UPDATE AND MANAGEMENT REVIEW
EASTPHARMA'S PERFORMANCE (According to IMS data) COMPARED TO TURKEY'S OVERALL
2012 MARKET PERFORMANCE
According to IMS Health data, a total of 1.769bn units of drugs, worth TRY
14.45bn (USD 8.03bn), were sold in the Turkish Pharmaceutical market in 2012.
In unit sales terms the Turkish market grew by 2.8% in 2012, while
EastPharma's unit sales declined by 5.9% compared to 2011, falling to 91mn
units sold according to IMS figures. With this reduction in unit sales
Eastpharma's market share in unit terms decreased from 5.6% in 2011 to 5.1% in
2012 and the company maintained its 4th place ranking in the Turkish
By sales value in Turkish Lira, the national market declined by 4.8% in 2012
compared to 2011. According to IMS figures for 2012, EastPharma achieved sales
worth TRY 551.3mn (USD 306.3mn), a decrease of 11% compared to 2011.
Consequently, EastPharma's market share by value decreased from 4.1% in 2011
to 3.8% in 2012 and the company ranked down from 5th place to 6th place in the
MANAGEMENT COMMENTS ON EASTPHARMA's FINANCIAL PERFORMANCE IN 12M 2012 (IFRS):
According to IFRS results, revenue in 12M 2012 was USD 232mn, down 4.3% from
the same period in 2011 (USD 242.3mn). In Turkish Lira terms, revenue
increased by 4.7% in the same period (Net sales in 12M 2012 was TRY 415.8mn vs
TRY 397.3mn net sales in 12M 2011).
The average US dollar exchange rate strengthened by 7.3% against the Turkish
Lira to 1.7922 in 12M 2012, which compares with an average rate of 1.6708 in
12M 2011. The USD/TRY exchange rate was 1.8889 as of 31 December 2011, while
it was 1.7826 as of 31 December 2012 which corresponds to a decrease of 5.6%.
EastPharma's sales decrease was mainly due to the strengthening of the USD
against the Turkish Lira. In 12M 2012 versus 12M 2011, Human Pharma revenues
decreased by 3.9% (from USD 223.1mn to USD 214.4mn).
Deva's Capital Markets Board (CMB) results show revenue in 12M 2012 was TRY
419.5mn, up 3.6% from the same period in 2011 (TRY 405mn).
Deva's sales increase in TRY terms was mainly due to increased volumes at
Deva's Human Pharma businesses. In 12M 2012 versus 12M 2011, Human Pharma
revenue increased by 3.9% (from TRY 373.4mn to TRY 388.0mn). Veterinary
Products revenue decreased by 2% (from TRY 25.5mn to TRY 25.0mn).
EastPharma's gross profit in 12M 2012 was USD 99.0mn, up fromUSD 88.3mn in
12M 2011. The gross profit margin in 12M 2012 was 43% vs 36% in 12M 2011.
EBITDA in 12M 2012 was USD 48.4mn vs USD 30.3mn in 12M 2011 representing an
EBITDA margin of 21.0% vs 12.5% in 12M 2011. It should be noted that during
12M 2011 the company booked some extraordinary items, notably a gain on the
reversal of a tax penalty totalling USD 6.3mn, a gain on the bargain purchase
of Zentiva API Plant totalling to USD 6.0mn, a gain on the sale of land at
Kartepe totalling to USD 5.9mn and a loss due to provision for terminated
personnel totalling USD 3.9mn. After adjustment for these extraordinary items
EBITDA was USD 16.2mn, which corresponds to an adjusted EBITDA margin of 6.7%
in 12M 2011.
Operating expenses in 12M 2012 decreased by 28%, from USD 96mn to USD 69.5mn.
The ratio of operating expenses to revenues decreased to 30.0% from 39.6%
compared to 12M 2011. Sales and marketing expenses in 12M 2012 were 19% of
revenues; general administrative expenses were 10% of revenues. These expenses
were 27% and 11% in 12M 2011, respectively.
Finance cost decreased by USD 9.7mn, from USD 49.4mn to USD 39.7mn in 12M 2012
compared to 12M 2011. This was primarily due to foreign exchange gain / losses
on borrowings: EastPharma made a foreign exchange gain of USD 0.4mn in 12M
2012, compared to a loss of USD 16.2mn in 12M 2011 on borrowings.
Receivable days at 31 December 2012 were 129 days, compared to 124 days as at
31 December 2011.
Philipp Haas, EastPharma's Chairman and CEO, said; "The results of the full
year reflect the fact that we have started to be less aggressive in sales
discounts and have concentrated on improving profitability, even at the
expense of giving up market share. In addition, the improved gross profit and
EBITDA margins demonstrate the higher value added of our newly introduced
While we are very pleased with the good overall results, we caution that
competitive pressures have increased in 2013 in most products and this will
have a negative effect on margins and sales levels going forward. There is
also further pressure through the reference pricing system which the
government imposes on the Turkish market. We are endeavoring to compensate
for this with further new product introductions, expansion into new export
markets and continued cost control."
EastPharma Consolidated Financial Statements 31 December 2012
12M 2012 Results of EastPharma Ltd
This announcement is distributed by Thomson Reuters on behalf of Thomson
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other
applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of
information contained therein.
Source: EastPharma Ltd via Thomson Reuters ONE
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