Last Thursday, Krka published its preliminary results for 2024 along with its 2025 Business Plan. According to the estimates, Krka’s revenue grew by 6% YoY, while net income amounted to EUR 353.4m, marking a 13% increase.
Starting with revenue, Krka recorded growth in the majority of its markets, generating EUR 1,909.5m, an increase of 6% YoY. Breaking this growth down by regions, Region East Europe generated EUR 650.3m in sales, comprising around one-third of total sales, reflecting a 9% YoY increase. In terms of individual markets within the region, sales in Russia amounted to EUR 373.3m, up 8%, sales in Ukraine reached EUR 96m, up 15%, while sales in Uzbekistan totaled EUR 53.7m, up 10% YoY.
Moving on, the second largest region was Region Central Europe, at 22.5% of total, or EUR 426.5m, growing by 7% YoY. Poland, the leading market in the region, generated product sales of EUR 206.1m and recorded 14% growth. Sales in Czech Republic totaled EUR 58.6m, down 4%, while in Hungary sales increased by 2% to EUR 53.5m. All other markets in the region recorded an increase in sales.
Next up, Region West Europe generated EUR 351.8m, making it the only region with decreased sales, primarily due to a decline in Germany, the region’s largest market, totaling EUR 83.4m. However, the United Kingdom, the Netherlands and the Scandinavian countries recorded sales growth, helping West Europe remain the third-largest region, accounting for 18.5% of total sales.
Region South-East Europe recorded EUR 269m in sales, increasing by 8% YoY. Romania and Croatia remained the two leading markets in the region, with sales of EUR 77.6m and EUR 49m, respectively, both up 7% YoY. Additionally, sales increased in all other markets within the region.
Region Slovenia recorded sales of EUR 121m, with the majority generated through product sales amounting to EUR 71.7m, representing 8% growth. Health resort and tourist services contributed EUR 49.5m, up 3%. Region Overseas Markets accounted for 4.3% of overall Krka Group sales, reaching EUR 81.1m in product sales, up 8% YoY.
Breaking the sales down by product types, human health products recorded a 6% revenue growth, reaching EUR 1,738.7m. Within this category, prescription pharmaceuticals grew by 7% to EUR 1,567.4m, accounting for 82.5% of total sales, while non-prescription products saw a 3% decline in sales, totaling EUR 171.3m. The top therapeutic classes of prescription pharmaceuticals included cardiovascular agents, centra nervous system agents, pharmaceuticals for gastrointestinal disorders, pain relief medications and anti-infectives for systemic use. Meanwhile, animal health products recorded a 7% increase, reaching EUR 111.8m, while health resort and tourist services saw a 3% increase, totaling EUR 49.4m.
While detailed P&L or balance sheet information is not available, the Group’s EBITDA amounted to EUR 518.2m, increasing by 3% YoY, while EBIT rose by 7% to EUR 425.7m. In terms of margins the EBITDA margin stood at 27.1%, down 0.8 p.p. YoY, while EBIT margin was 22.3%, up 0.2 p.p.
Net income amounted to EUR 353.4m, growing by 13% YoY, implying a net income margin of 18.5%, up 1.1 p.p., and translating to an EPS of EUR 11.48. This growth in net profitability was driven by improved net financial results due to increased interest on financial investments and favorable FX developments for the Group.
Krka key financials (2023 vs Preliminary 2024, EURm)
Source: Krka, InterCapital Research
In terms of investments, Krka allocated EUR 116.9m in 2024 to improvements in production technologies, development, quality and augmenting key elements of its vertically integrated business model, with EUR 87.8m invested in the controlling company (Krka d.d.). Furthermore, Krka obtained marketing authorizations for 22 new products and completed more than 1000 marketing authorizations procedures in various countries, extending its product portfolio and increasing treatment availability.
Finally, the Group outlined 2025 business objectives. Product and service sales are projected to surpass EUR 2bn for the first time, with a net profit of EUR 365m, exceeding the originally planned EUR 354m from the November press release. Krka also plans to allocate EUR 150m for investments, an increase of 28%, primarily aimed at expanding and upgrading production capacities and infrastructure.
