Pharmstandard OJSC reports FY2013 Audited IFRS Results


Moscow, April 25, 2013 –Pharmstandard OJSC (LSE: PHST IL, RTS: PHST RU) (“Pharmstandard” and/or the ”Company”) reports its FY2013 consolidated audited Financial Results in compliance with IFRS. 

FY2013 data includes numbers for Bioprocess group of companies and LEKKO CJSC acquired in 2012 (“New Companies”).

As of January 1, 2013, 100% of TZMOI OJSC sales are included into the Company’s revenue.

FY2013 key financial highlights:

Consolidated revenue reached RUB55,908m (+10%);

Gross profit reached RUB23,398m (+25%), gross profit margin: 42%;

EBITDA reached RUB16,652m (+24%), EBITDA margin: 30%;

Net profit reached RUB11,920 m (+20%), Net Profit Margin: 21%.

FY2013 Financial Results

Consolidated revenue

FY2013 consolidated sales of the Group reached RUB55,908m demonstrating an increase of RUB5,124m (+10%) y/y.

Pharmstandard sales of pharmaceutical products reached RUB 54,859m demonstrating RUB4,798m or +10% y/y growth, compared to RUB50,061m in 2012. The sales structure is as follows: 42% - organic sales of pharmaceutical products, 56% - third party product (“TPP”) sales and 2% - APIs.

Pharmaceutical products and medical equipment accounted for 98.1% and 1.9% of the Company’s total sales in 2013, respectively.

Pharmaceutical products

FY2013 organic pharmaceutical sales[1] amounted to RUR24,408m (+12%) vs RUR21,782m in 2012 with 71% accounted for by OTC products and 29% by Rx products.

FY2013 Organic prescription product (Rx) sales grew by RUR880m (+14.9%) to reach RUR6,776m. Key growth drivers were Phosphoglive® (+18.2%), Combilipen® (+28.7%), Pentalgin® (+52.3%) and Altevir® (+140.8%).

FY2013 Organic over-the-counter (ОТС) product sales went up to RUR16,458m (+10.6%). FY2013 Arbidol® sales demonstrated a slight decrease y/y reaching RUR3,807m. A significant increase in sales y/y was demonstrated by Aphobazolum® (+46%), Amixin® (+39.8%), Acipol® (+56.8%) and Magnelis® (+64.3%).

FY2013 OTCPharm portfolio sales reached RUR14,014m demonstrating 11% growth y/y vs RUR12,623m.

FY2013 TPP segment sales reached RUB30,451 (+RUR1,020m/+7.7%) vs RUB28,279m in 2012.


In 2013, COGS grew by RUB486m (+2%) vs previous year and reached RUB32,510m vs RUB32,024m in 2012. In general, COGS as percentage of sales declined to 58.1% in 2013 from 63.1% in 2012.

Raw materials and TPP costs accounted for 91% of total COGS. COGS growth of RUB486m was mainly driven by increased sales volumes and product portfolio expansion.

COGS decline as percentage of 2013 sales compared to 2012 primarily relates to higher profitability of TPP products.

In 2013, organic COGS in absolute terms amounted to RUB8641m – almost in line with 2012. COGS as percentage of sales declined by 4.4% to 35.4% mainly due to increased profitability of some products and synergies from acquisition of New Companies and Bever Pharmaceutical PTE Ltd (Singapore).

TPP COGS reached RUB23,163m (+1%). TPP COGS share as percentage of the segment sales decreased in 2013 by 5% down to 76.1% showing growth of RUB219m in absolute terms, which is attributed to

(1) sales growth in the segment by RUB2,172m;

(2) localization of certain production phases for Insivo, Revlimid, Pulmozyme, Prezista, Mabthera, and

(3) increased share of higher margin products, such as Rebif, Revlimid, Tamiflu, in the sales structure

Medical equipment segment COGS growth of RUB300m in 2013 was mainly due to applying equity accounting method with respect to Pharmstandard-Medtechnika performance in 2012, obtaining control in the company from 1 January 2013 and line-by-line consolidation of the company numbers.

Gross Profit

The Company's gross profit grew by RUB4,638 (+25%) from RUB18,759m in 2012 up to RUB23,398 m in 2013. As percentage of sales total gross profit increased from 36.9% in 2012 to 41.9% in 2013. This relates to gross profit growth both in absolute and relative terms in organic and TPP segments.

Gross profit associated with organic pharmaceutical products reached RUB15,767m in 2013 reflecting RUB 2,659m (+20%) YoY growth vs RUB13,108m in 2012. Gross profit margin was 64.6% in 2013 vs 60.2% in 2012. Profit margin growth was influenced by synergies and cost reductions.

In 2013, gross profit in the TPP segment demonstrated 37% growth vs 2012 reaching RUB7,288m. Gross profit margin went up to 23.9% in 2013 through cost reduction due to production localization of a number of products and increased share of higher margin products in the segment sales structure.

Medical equipment segment saw gross profit growth of RUB26m in 2013 up to RUB342m mainly due to the above mentioned impact of equity accounting method used to account for Pharmstandard-Medtechnika in 2012 and obtaining control over the company from 1 January 2013.

Operating Expenses

In absolute terms operating expenses showed RUB1,626m growth (+25%) – from RUB6,498m in 2012 to RUB8,124m in 2013. As percentage of sales operating expenses increased to 14.5% in 2013 vs 12.8% in 2012.

Organic and TPP segments account for the major part (96%) of operating expenses.

Sales and Distribution Expenses (S&D)

Organic product sales and marketing expenses (without TPPs) equaled to RUB5,425m or 22.2% of thesegment sales in 2013 compared to RUB4,481m or 10.6% in 2012. Major part of this cost item is accounted for by media support of actively promoted high margin branded organic OTC products such as Pentalgin®, Aphobazolum®, Arbidol®, Codelac®, Next®, Flucostat®, Amixin®, through media advertising – primarily TV (RUB2,057 m in 2013 vs RUB1,438 m in 2012) as well as online, radio and press advertising.

TPP sales and marketing expenses in 2013 amounted to RUB59m or 2% of the segment sales from RUB504m and 1.8% of sales in 2012.

General and Administrative Expenses (G&A)

General and administrative expenses (G&A) of the Company increased in 2013 by RUB505m or 35% up to RUB1,930m vs RUB1,425m in 2012. G&A share in the total sales reached 3.5% in 2013.

G&A expenses in the organic segment (without TPP) grew by RUB298m in 2013 vs 2012 and reached RUB1,241m or 5.1% of the total sales for the segment. The growth was primarily driven by synergy from headcount increase as a result of acquisition of New Companies in 2012.

TPP segment G&A expenses rose by RUB106m or 25% up to RUB528m (1.7% of sales) in 2013 vs RUB422m (1.5% of sales) in 2012. This was substantially driven by allocation of expenses associated with TPP segment product management, in particular, increased administrative personal costs and higher utility charges.

Operating income

Consolidated operating income (sales, COGS, operating expenses) demonstrated RUB3,012m growth as of 2013 up to RUB15,274m vs RUB12,262m in 2012 (25% relative change). Operating income as percentage of sales was 27.3% in 2013 vs 24.1% in 2012. Major part of operating income (60%) was generated by organic sales.

Operating income in the organic product segment reached RUB9,101m in 2013 vs RUB7,684m in 2012. Operating income YoY growth of RUB1,417m or 18% was driven by 12% sales growth as well as operating income margin going up from 35.3% in 2012 to 37.4% in 2013.

TPP segment operating income grew by RUB1,755m or 40% up to RUB6,164m in 2013 with 4.6% operating income margin growth to 20.2% from 15.6% in 2012.

Operating income in the medical equipment segment declined significantly in 2013 to RUB10m vs RUB169m in 2012. This YoY decline was driven by (1) retrospective accounting impact with respect to Pharstandard-Medtechnika in 2012 based on equity accounting method followed by controlling stake acquisition from 1 January 2013; (2) overall profitability decline in the medical equipment segment as a result of segment revenue contraction due to downturn in the market where the Group operates; and (3) higher operating expenses related to medical equipment promotion and support.

Other Income and Other Expenses

The Company’s other income reached RUB1,509m in 2013 vs RUB430m in 2012.

Other revenues were basically generated by agency fees on third party distribution contracts and FX difference gain.

Other expenses in 2013 reached RUB986m compared to RUB252m in 2012.

Key other expenses items include other taxes and penalties, bank charges and servicing costs, legal and registration expenses, recognition of intangible asset impairment in 2013, classification of expenses related to capacity downtime at Pharmstandard-Biolek in 2013 and recognition of R&D expenses, including with respect to government contracts.


EBITDA demonstrated RUB3,205m or 24% YoY growth up to RUB16,652m with EBITDA margin reaching 29.8% vs 26.5% in 2012.

EBITDA in the organic segment (excluding TPP) was RUB10,394m in 2013 which means RUB1,652m or 19% growth compared to 2012. EBITDA margin reached 42.6% vs 40.1% in 2012.

EBITDA in the TPP segment reached RUB6,193m (representing a growth of RUB1,746m or 39% vs 2012) with EBITDA margin of 20.3% in 2013 vs 15.7% in 2012.

The medical equipment segment demonstrated EBITDA of RUB65m in 2013, which means a RUB194m decline from 2012. EBITDA margin decreased to 6.2%.

Financial income and expense

Financial expenses went up RUB93m from RUB34m in 2012 to RUB127m in 2013, mainly as a result of debt financing of RUB7,021m raised in 4Q2013.

Financial revenues amounted to RUB290m in 2013 vs RUB127m in 2012. Financial revenues to a large extent consist of interest gains from short-term financial instruments. The change of RUB163m as of 2013 can be attributed to increased amounts of cash deposited with banks and loans provided, among others, to related parties.

Income tax expense

Accrued income tax for 2013 was RUB3,942m vs RUB2,597m in 2012 with effective tax rate of 24.9% in 2012 vs 20.7% in 2012. Higher effective tax rate mostly refers to tax effect recognition with respect to the Company shares disposal in exchange to Bever acquisition.

Net Income and Minority Stake

The Company’s net income rose by RUB1,956m or 20% to RUB11,920m compared to RUB9,964m in 2012. Net income margin in 2013 reached 21.3% vs 19.6% in 2012.

Parent company shareholder return as of 2013 reached RUB11,806m vs RUB9,791m in 2012.

Minority stake amounted to RUB115m vs RUB173m in 2012.

EPS as of 2013 increased by 22% to reach RUB340.92 vs RUB276.69 a year earlier.

The Table below provides an overview of key performance indicators of the Company for FY2013 and FY 2012 in absolute terms and in percent to sales volume.


Consolidated results

FY2013/ FY2012 y/y growth (RURm) 










55 907,60


50 783,52


5 124,08


Pharmaceutical products

54 859,32


50 061,26


4 798,06


OTC products

16 457,83


14 879,25


1 578,57


Branded products

13 707,97


12 461,58


1 246,39


Non-branded products

2 749, 86


2 417,67




Prescription products

6 775,79


5 895,68




Branded products

5 974,31


4 957,48


1 016,84


Non-branded products







Third parties products

30 451,24


28 279,12


2 172,12


Other sales

1 174,46


1 007,21




Medical equipment

1 048,28






Cost of sales

(32 509,84)


(32 024,14)




Gross profit

23 397,76


18 759,38


4 638,38



(6 193,58)


(5 072,31)


(1 121,27)



(1 930,31)


(1 425,22)




Other expenses (income)







Financial income







Financial expense







Profit before income tax

15 862,53


12 561,29


(1 344,81)


Income tax expense

(3 942,09)


(2 597,28)




Profit for the year

11 920,44


9 964,01


1 956,43


Depreciation and amortization








16 652,17


13 447,50


3 204,67


Share of profit of an associate and joint ventures





5 124,08



Announcement of FY2013 Audited Financial Results

Moscow, April 25, 2014 – OJSC Pharmstandard (LSE: PHST LI, RTS: PHST RU) (“Pharmstandard”) will be announcing its FY2013 Audited Financial Results on Friday, April 25, 2014 at 17:00 PM Moscow time.

Pharmstandard takes pleasure to invite you to participate in FY2013 Audited Financial Results Conference Call followed by a Q&A session.

Conference Call will take place on

Friday, April 25, 2014

09:00 New York

14:00 London

17:00 Moscow


UK Call-in Number: + +44(0)20 7784 1036

US Call-in Number: +1 646 254 3360

Russia Call-in Number: +7 (495) 545 0588

Confirmation code: 3369763

Pharmstandard will be represented by:

Igor Krylov, CEO

Irina Bakhturina, Head of IR

Conference call presentation

will be available on Friday, April 25, 2014 on Company's web-site:

The conference call replay will be available through May 1st, 2014

International Replay Number: +44 (0)20 3427 0598

US Replay Number: +1 347 366 9565

Russia Replay Number: +7 (495) 705 9453

Replay Access Code: 3369763 





Irina Bakhturina

Head of Investor Relations

Pharmstandard OJSC

Tel: +7 495 970 0030 ext 2824



[1] Organic sales exclude third party product sales and medical equipment sales

[2] EBITDA is defined as income before interest and taxes and depreciation and amortization have been subtracted

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Media Contacts

Marina Shurkina

Head of Administrative Division Pharmstandard JSC

+7 (495) 970 0032

5B, Likhachyovsky Proezd, Dolgoprudny, Moscow Region, 141701, Russia

+7 (495) 970 0030/32


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