Krka published their preliminary H1 2020 results yesterday, showing a 5.6% YoY increase in sales, 30% YoY increase in EBITDA and a 15% YoY increase in net profit which amounted to EUR 160m.
According to H1 2020 preliminary results, the Krka Group recorded EUR 801.8m in sales, representing a 5.6% YoY increase. All sales regions, except Slovenia grew sales growth, while sales of all product groups and services advanced as well.
When breaking down revenue, East Europe remained the largest market, accounting for 33.9% of the Group’s total sales. The region recorded sales in the amount of 271.7m, which represents an 8% YoY increase. Russia, the region’s key market, posted an 8% YoY increase in sales. Meanwhile, sales growth was also recorded in most other markets of Eastern Europe and Central Asia.
Region Central Europe, comprising the Visegrad Group and the Baltic states, followed with sales amounting EUR 182.7m (+8% YoY). Note that this accounted for 22.8% of Krka’s total sales. Poland, the leading market, generated EUR 85.9m in sales and recorded an 8% YoY growth.
Region West Europe made EUR 181.6m, a 22.6% share, and was the third largest Krka Group region in terms of sales value. The highest growth was recorded in Germany, Benelux, France, Scandinavia, and Portugal. In Germany, the largest market in the region, Krka sold EUR 47.9m worth of products, recording an 18% YoY increase.
In Region South-East Europe, product sales amounted to EUR 103.5m (+4.9% YoY) which represents 12.9% of Krka Group sales.
In Slovenia, Krka Group sales decreased 14.9% YoY and amounted to EUR 38.3m. The decline in sales came due to a 46% slump in sales of health resort and tourist services, which was caused by the outbreak of the coronavirus. However, note that product sales were up 7% YoY.
The improved top line translated down to the operating performance as well with Krka posting a 30% YoY increase in EBITDA, which amounted to EUR 273m. Finally, net profit increased by 15% YoY and amounted to EUR 160m.
In the first half of the year, CAPEX amounted to EUR 30m out of the planned EUR 134m. Note that the primarily goal of these investments planned is to increase and upgrade production facilities and the infrastructure.
Despite a strong performance in H1 2020, the Management left their outlook unchanged. As a reminder, the 2020 plan projects sales at EUR 1.5bn and net profit at over EUR 210m. We intend to allocate EUR 134m to investment projects, and 10% of revenue to research and development.
Krka Key Financials
