"Overall, it was a very good year for Nepentes. Our sales revenue grew quarter by quarter. In 2009, we considerably increased capital expenditure, a large portion of which was charged directly to the income statement. A number of changes were made to the Group’s organisational and management structure, designed to boost export sales and facilitate launch of new products, including dermatological drugs. Moreover, we incurred maintenance costs of PLN 3m in relation to the Chociw plant. The total capital expenditure incurred on the plant amounted to nearly PLN 19m. Nevertheless, those investments were indispensable, and even though they affected the Company’s profitability in the previous year, they have laid the foundation for development and growth of Nepentes’ business in future years. Despite the increased capital expenditure, we succeeded in maintaining healthy double-digit margins at the operating and net profit levels. At the same time, the gross margin, which reflects our sales strength and effectiveness in terms of production cost, remained robust and stable, at 55%." comments Łukasz Butruk, President of the Management Board of Nepentes S.A. 

"Our 2009 results have also been affected by the expenditures on marketing activities incurred on two key export markets, Bulgaria and Romania, and unfavourable exchange rates. If the reported operating profit for 2009 was adjusted for the expenditures related to Chociw alone, which are of a one-off nature, it would show growth at a double-digit rate, similarly to previous years," adds Łukasz Butruk. 

 

Until the end of 2009 and at the beginning of the current year, work was under way to make the Chociw plant ready to start production. The new facility will produce dermatological drugs, and will gradually take over the production from the existing plant in Łódź.

"We are nearing completion of the alteration work at the plant in Chociw, and it is due to commence production in Q2 2010. Once the production has been launched, the Company will qualify for income tax relief, which will be recognised in the results for 2010. Transfer of production from Łódź to Chociw will be carried out gradually, yet it will result in steady elimination of the cost of keeping two plants operational," says Łukasz Butruk. 

 

After the four quarters of 2009, Nepentes’ export sales grew by nearly 53% relative to the corresponding period of 2008. The share of revenue derived from foreign markets in the Group’s total revenue increased to 15.3% (12.3% in 2008). The highest growth in export sales was seen in Romania and Bulgaria. After the four quarters of 2009, sales in Romania exceeded PLN 3.5m (up by 122% year on year), and sales in Bulgaria were over PLN 3.2m (year-on-year increase of 88%). 

 

According to IMS Health, after the four quarters of 2009, the value of the Polish market of dermocosmetics rose by 16%, to PLN 567m. Meanwhile, the value of the entire OTC and Consumer Healthcare market, i.e. the entire market of products sold over the counter (without prescription) in pharmacies, reached PLN 7.01bn, having grown by 16% relative to 2008.

In Q4 2009 and in the whole of 2009, the sales of products marketed by Nepentes grew much faster than their respective market categories. In the dermocosmetics market, the Elixine brand was the biggest success - its sales growth was four times higher than the market growth. Sales of the Iwostin range have outstripped the growth of the dermocosmetics market, too. In Q4 and in the whole of 2009, its sales grew by 20%. A noteworthy development was the increase in sales of the Propodia brand in Q4 2009: they rose by over 14%, while the entire category of foot care preparations shrank by 11%. 

The sales growth on the emollients market remains high. According to the data released by IMS, after the four quarters of 2009 the sales value dynamics was 28%, whereas the sales of Emolium in the same period grew more than two times faster, i.e. by 55%. 

It should also be noted that the Iwostin, Elixine and Emolium brands effectively compete with products of international and Polish manufacturers. Nepentes is the only Polish company to have earned for itself such a strong position in the market for cosmetics sold in pharmacies. In 2009, in terms of sales value, Nepentes ranked second, after L’Oreal, among manufacturers of pharmacy cosmetics (according to IMS Health).

 

New products were launched under the Iwostin Purritin brand. Two new preparations were added to this line of products, which was also extended by a new sub-line – Iwostin Purritin Rehydrin.

In Q4 2009, Nepentes introduced a new brand to the Polish market – Vagisil Intima, featuring three products for comprehensive intimate hygiene for women. The range consists of an innovative active cream, which, due to its polidocanol content, soothes itching and irritation caused by, for instance, abrasion or tight clothing, as well as a cleansing liquid and wipes recommended for daily use.

The Vagisil Intima products have been available exclusively in pharmacies since October 2009. Poland is the eleventh country worldwide in which Combe International decided to launch this brand. Vagisil has been available in the USA, UK, Spain, Australia and Mexico and other countries for years. It has made its way to the top position in the intimate hygiene category in many of those markets, just to name the UK, where Vagisil enjoys a 60% market share in value terms.

 

Established in 1991, Nepentes S.A. is one of the oldest companies founded entirely with Polish capital to operate on the pharmaceutical market. It has developed and currently manufactures the Iwostin, Emolium, Elixine, Propodia and Propolki brands, which are sold in Poland and in other countries of the CEE region. In 2006 in Łódź, Nepentes launched a new production plant with an in-house research and development laboratory, compliant with the highest global standards. September 2007 saw the establishment of two subsidiaries of Nepentes: Nepentes Romania and Nepentes Bulgaria, while in early 2008 Nepentes set up its own sales structures in Lithuania. The Company has also registered subsidiaries in the Czech Republic and Slovakia. 

In addition, the business scope of Nepentes S.A. comprises the introduction and promotion of a number of internationally-recognised pharmaceutical brands in Poland and on other CEE markets. Nepentes S.A. is the exclusive representative for Poland for the Sudocrem, neo-angin, Melisana and Marimer brands, to name just a few.

Nepentes S.A. is a public company, listed on the Warsaw Stock Exchange since December 2007. Its principal shareholders are Łukasz Butruk (15.83% interest), Marek Orłowski (15.85% interest), MORLUK Sp. z o.o. Spółka komandytowa (31.09% interest), OFE ING NN Polska (5.01%), and OFE Aviva (5.80%). 

 

More information about the Company and its product portfolio is available at www.nepentes.pl

 

Michał Wierzchowski - CC Group

t: +48 22 440 1 440

m: + 48 605 959 539

 

Magdalena Sidorowicz - Corporate PR Manager Nepentes S.A.

t: +48 22 833 63 94