June 04, 2024, Moscow – PROMOMED Group of Companies (hereinafter referred to as "Promomed", the "Company") announces financial results in accordance with IFRS standards, confirmed by the audit report of Deloitte & Touche CIS (until May 2022) for the years ended December 31, 2023, December 31, 2022 and December 31, 2021

The Company's revenue from the core portfolio (excluding drugs for the treatment of coronavirus infection) increased by 103% in 2023 and amounted to 14.2 billion rubles.
The gross profit for the base portfolio in 2023 increased by 94% to 9.2 billion rubles.

Alexander Efremov, CEO of PROMOMED JSC, commented:

"By publishing the results of its activities, Promomed focuses on the best market practices and emphasizes its openness in dialogue with the investment community.

The results for 2021-2023 demonstrate our commitment to a strategy aimed at building a leading position in fast-growing, high-margin segments of the pharmaceutical market. Over the course of three years, we have significantly upgraded our production facilities, conducted a record number of medical research for the market, transferred to production and launched dozens of new drugs in such areas as oncology, endocrinology, neurology, infectious diseases, etc. In particular, innovative drugs such as Quincenta and Enligria were introduced to the market –
Russian Ozempik and Saxenda, aimed at the treatment of diabetes and effective weight loss. Complex portfolios were also launched on the market.
import-substituting drugs for the treatment of socially significant diseases such as oncology and HIV infection. Significant investment in sustainable
the rapid development of the Company and the built-up effective system of interaction with suppliers in 2022-2023 led to an increase in the market share
in key segments of the pharmaceutical market, significant growth in revenue, gross profit and EBITDA of the Company's core portfolio.

This year, we are actively increasing the production and sales of high-quality innovative drugs that meet the most pressing needs of modern high-tech medicine, and we occupy a unique market position to realize our potential as a technological leader in Russian biopharmaceuticals."

New indicators of financial results

Selected financial indicators


Revenue from the core portfolio (excluding sales of drugs for the treatment of coronavirus infection COVID-19) amounted to 14.2 billion rubles in 2023, which is twice as much as the same indicator in 2022. The main factors of revenue growth were the expansion of the Company's product portfolio and the growth in sales of medicines in strategic therapeutic areas (Endocrinology and Oncology):

- Endocrinology. The company has consolidated its leadership in the fastest growing segment of the global healthcare market through the introduction of innovative drugs to combat diabetes, overweight and obesity - Quincenta and Enligria.;

- Oncology. The company has increased sales in the oncology segment, where it first introduced drugs in 2021. Thus, by the end of 2023, the oncology sector accounted for about 24% of the Company's total revenue.

The total revenue by the end of 2023 amounted to 15.8 billion rubles. At the same time, the share of COVID-19 drugs in the revenue structure fell from 57% in 2021 to 10% in 2023, reflecting faster sales growth in other key therapeutic areas such as endocrinology, oncology, neurology, infection control, etc.

In 2023, the volume of production of medicines in packages reached 63,271 thousand units, which is 19% more than in 2022. The increase in production volumes is due to the expansion of the range of high-tech and innovative drugs, which allows the Company to meet the growing needs of the market and maintain a leading position in the pharmaceutical industry.

Gross profit for the Company's core portfolio (excluding sales of drugs for the treatment of coronavirus infection ("COVID-19") increased by 94% YoY to 9.2 billion rubles in 2023, thanks to a strategy aimed at manufacturing products in high-margin market segments, in particular, by the end of 2023, the oncology sector accounted for about 30% of the Company's total gross profit compared to 8% in 2022. The total gross profit in 2023 amounted to 10.0 billion rubles.

The Company's EBITDA increased to 6.3 billion rubles in 2023. The company continued to demonstrate a high level of marginality (40%) due to the launch of innovative drugs aimed at combating socially significant diseases and a diversified product portfolio in the most sought-after therapeutic areas.

Net profit in 2023 amounted to 3.0 billion rubles. In 2023, the Company notes a significant impact on net profit of such a one-time factor as the windfall tax payment of income tax for previous periods, as well as increased depreciation charges in the reporting period due to the commissioning of new facilities and the creation of intangible assets (intellectual property objects) in 2021 and 2022.

Key indicators of the company's liquidity

Net debt at the end of 2023 amounted to 16.0 billion rubles. compared to 9.4 billion rubles at the end of 2022. The increase in net debt is due to the completion of the main part of the investment cycle for capital construction and modernization of the production site, investments in increasing market share in key therapeutic areas and expenses for R&D of promising innovative drugs.

Key cash flow indicators

In 2023, the main factor affecting operating cash flow and the increase in net working capital was the short-term growth in trade receivables, which was associated with the launch of new products, investments in increasing market share in key therapeutic areas such as infection control and oncology, as well as investments in the promotion of over-the-counter medicines. drugs. The increase in net working capital reflects the Company's active growth phase.

The Company expects to optimize net working capital in future periods, including through the implemented Sales & Operations Planning (S&OP) process and an optimized supplier pool.

The continued growth in sales of innovative medicines will have a positive impact on the amount of cash flow from operating activities.

Cash flow from investing activities

Over the past 3 years, Promomed has invested almost 10 billion rubles in capital construction and modernization of its production site and R&D center. The company has completed the main part of the investment cycle for capital construction related to production, which allows it to generate free cash flow and increase investments in R&D.

The dynamics of key cash flow indicators over the past three years, including the dynamics of cash flow from investment activities, reflect Promomed's active efforts to expand production capacities and increase the pace of medical research on innovative medicines to enter new high-margin segments of the pharmaceutical market. These factors reflect the strategy of strengthening Promomed's technological and production potential in 2021-2023 and launching innovative products on the market that require high capital expenditures to expand existing capacities and modernize production.

R&D expenses by the end of 2023 amounted to 1.5 billion rubles. The Company's research and development expenses have historically accounted for about 10% of revenue, which allows it to maintain high dynamics of the Company's research activities and ensure high speed of drug development and market launch. A significant part of the R&D costs are the costs of conducting clinical trials and scaling up the synthesis of active pharmaceutical substances (APIs) and technologies for obtaining dosage forms.

In 2023, the Company conducted 55 medical studies, which is 2% more than in 2022 and 129% more than in 2021. This growth reflects the priority given to the development and implementation of new drugs based on advanced bio- and chemical technologies. As a result of these efforts, 46 registration certificates were received in 2023, including the first import-substituting drugs for the treatment of cancer, HIV, obesity and diabetes.

In 2023, the number of patents received increased by 34%, reaching 55 patents, and the number of trademarks increased.slo increased by 55%, amounting to 386. These indicators highlight the Company's innovation activity and its commitment to protecting its intellectual property.

Capital expenditures decreased by 37% YoY to RUB 2.9 billion in 2023. The peak of capital expenditures occurred in 2022, when Promomed launched a new investment plan, which included:

-ampoule shop (launched in 2021);

-fully automated site for the production of tablets, capsules and other oral forms (launched in 2022);

-workshop for the production of pharmaceutical substances (launched in the 2nd quarter of 2023);

-a site for the production of lyophilizates and sterile solutions in vials (expected to be launched in the 3rd quarter of 2024);

-a section of pre-filled syringes (expected to be launched in the 4th quarter of 2024)

Promomed is a leader in the biopharmaceutical market specializing in the development, production and distribution of innovative medicines. Promomed demonstrates steady revenue growth and consistently high profitability, corresponding to the level of publicly relevant international biopharmaceutical companies.

The Company's growth strategy is based on diversifying its portfolio of high-tech innovative drugs with significant positions in key market segments such as oncology, endocrinology, neurology and infectious diseases, and a focus on biotechnology, while the integrated business model with full-cycle production allows Promomed to effectively and promptly respond to the current needs of the industry.

The company relies on its own research center with world-class scientific potential, which allows it to develop and market innovative high-tech drugs.

Contacts

PR service

pr@promomed.pro 

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