Latest company information from Egis

2. 2009/2010 fiscal year
4th quarter
Consolidated data
EGIS Pharmaceuticals
Public Limited Company

3. Two accounting changes that impact comparisons
Medimpex UK cleared off
Medimpex UK cleared off Accounting policy changed
Accounting policy changed
EGIS sold its 50% stake on
EGIS sold its 50% stake on New system for calculating cost of sales:
New system for calculating cost of sales:
5th October 2009.
5th October 2009. more details, reclassification of items
more details, reclassification of items
from admin to cost of sales
from admin to cost of sales
EGIS part in comparative Q1-4:
EGIS part in comparative Q1-4:
Change in accounting of shipping costs
Change in accounting of shipping costs
sales revenue
sales revenue HUF1,319m
HUF1,319m
operating profit
operating profit -HUF15m
-HUF15m included in sales revenue and
included in sales revenue and
pre-tax profit
pre-tax profit HUF8m
HUF8m also in M&S line
also in M&S line
3

4. Revenue increased 23%, net profit hit by
result from financial activities
2009/2010 2008/2009 Change Change
HUF million Q4 Q4 HUF m %
Sales 32,426 26,318 6,108 23%
Gross profit 18,073 14,293 3,780 26%
Gross margin 55.7% 54.3%
Cost of sales 13,350 13,104 246 2%
Operating profit 4,131 1,084 3,047
Operating margin 12.7% 4.1%
Pre-tax profit 2,837 422 2,415
4

5. Slight improvement in exchange rates y/y,
payments to OEP* can be reclaimed in 2 years
1 000 240
HUF / USD exch. rate
payments to OEP 228
900 221 220
938 HUF / USD 216
210
800 199
195
200
189
184 Ft 182 183 180
700 174 172
158 159 160
600
629
payments to OEP HUF m
140
500 565 576
519 480 120
489
400
394
100
300 358
365 339 80
200
60
100 40
11 13
0 20
Q3 07 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 11
-35
-100 0
These three-month peroids are quarters of EGIS financial year (October-September)
* OEP: Országos Egészségbiztosítási Pénztár (National Health Insurance Fund)
5

6. Sales increased in strategically important markets,
and notably decreased in other markets
2009/2010 2008/2009
Change
Q4 Q4
Hungary HUF m 8,410 7,921 6%
Russia + other CIS USD m 47.4 36.0 32%
CEE USD m 45.2 41.4 9%
RoW pharma sales USD m 6.1 8.0 -24%
API + other USD m 10.2 11.7 -13%
6

7. 27% sales revenue increase in Russia
2009/2010 2008/2009
Change
USD thousand Q4 Q4
Total RU 32,751 25,736 27%
Of which
DLO 2,975 1,103
Bioparox 3,353 0
Stocking impact 2,300 0
Ordinary market 24,123 24,633 -2%
7

8. Sales revenue 43% higher aggregately in
Ukraine and other CIS markets
2009/2010 2008/2009
Change
USD thousand Q4 Q4
Ukraine 4,625 3,687 25%
Kazakhstan 3,164 2,089 52%
Belarus 2,807 2,122 32%
Other CIS markets 4,072 2,345 74%
Together 14,668 10,243 43%
8

9. 9% increase in CEE export
2009/2010 2008/2009
Change
USD thousand Q4 Q4
Poland 21,278 18,395 16%
Czech Republic 5,878 7,951 -26%
Slovakia 4,904 4,980 -2%
Romania 6,143 5,005 23%
Turkey 2,672 1,403 90%
Bulgaria 1,982 1,959 1%
Latvia+Lithuania 872 884 -1%
Vietnam 1,443 870 66%
Total CEE 45,172 41,447 9%
9

10. Pharma exports to western markets dropped 24%, however,
export of proprietary products within this increased
2009/2010 2008/2009
Change
USD thousand Q4 Q4
Total 6,077 8,028 -24%
Co-operation 19 3,434
Other 6,058 4,594 32%
10

11. Export of API moderated 13%
2009/2010 2008/2009
Change
USD thousand Q4 Q4
Total 10,167 11,706 -13%
For Servier 5,590 5,192 8%
Other 4,577 6,514 -30%
11

12. Cost of sales ratio decreased 1.4pp
2009/2010 2008/2009
Change
HUF million Q4 Q4
Cost of sales 14,353 12,025 19%
Sales 32,426 26,318 23%
Cost of sales ratio 44.3% 45.7%
12

13. General costs increased 2%
2009/2010 2008/2009
Change
HUF million Q4 Q4
Marketing & Sales 7,636 6,897 11%
R&D 2,948 2,671 10%
Administration 2,766 3,536 -22%
Total 13,350 13,104 2%
13

14. Balance of other income and expenditures
less favourable by HUF 487 million
2009/2010 2008/2009 Change
HUF million Q4 Q4 HUF m
Total -592 -105 -487
Payments to OEP -13 -339 326
Local taxes (trade-, etc.) -509 -390 -119
Other items -70 624 -694
14

15. Financial profit is determined by the exchange
rate fluctuations within the quarters
2009/2010 2008/2009 Change
HUF million Q4 Q4 HUF m
Total -766 -519 -247
Interest income 328 573 -245
Forex gain -1,907 -452
Result on hedge 832 2
Forex related items together -1,075 -450 -625
Other items -19 -642 623
15

16. 2009/2010 fiscal year results

17. Annual sales revenue up 2%,
profit higher 22% y/y
2009/2010 2008/2009 Change Change
HUF million year year HUF m %
Sales 118,915 116,142 2,773 2%
Gross profit 66,709 64,350 2,359 4%
Gross margin 56.1% 55.4%
Cost of sales 49,029 47,575 1,454 3%
Operating profit 15,512 14,040 1,472 10%
Operating margin 13.0% 12.1%
Pre-tax profit 17,755 14,525 3,230 22%
Forex impact: -HUF0.3bn
17

18. Revenue increase in strategic markets,
decrease in other markets
2009/2010 2008/2009
Change
year year
Hungary HUF m 32,687 31,403 4%
Russia + other CIS USD th 185,808 160,696 16%
CEE USD th 175,975 162,000 9%
RoW pharma sales USD th 23,309 35,803 -35%
API + others USD th 38,278 51,310 -25%
18

19. Hungarian pharma market grew 4% over the
last 12 months
IMS MAT 09/2010
•• Market size (ex-factory prices): HUF 570 bn, chg: +4%
Market size (ex-factory prices): HUF 570 bn, chg: +4%
•• EGIS:
EGIS: HUF 30.2 bn, chg: +5%
HUF 30.2 bn, chg: +5%
5.3% market share
5.3% market share
• No change in regulation
registration fee of med reps from 15 February 2009
subsidy limitation: 30%
20% of 2009 payments can be withheld in 2011
100% of 2010 payments in 2012
(due to EGIS FY commencing in October)
19

20. Continuous pressure on prices
Price cuts (averaging on EGIS portfolio):
July 1, 2006 3% January 1, 2009 0.6%
April 1, 2007 9% April 1, 2009 0.1%
July 1, 2007 1% July 1, 2009 1% .
October 1, 2007 1% October 1, 2009 0.6%
January 1, 2008 1% January 1, 2010 0.5%
April 1, 2008 1% April 1, 2010 0.2%
July 1, 2008 0.3% July 1, 2010 0.6%
October 1, 2008 0.1%
20

21. Seven new products were launched
in the domestic market this year
• Coverex® AS Komb Forte CV licence
• Emperin® (betahistin) CNS licence
• Granegis® (granisetron) Onc licence
• Grimodin® (gabapentin) CNS licence
• Topepsil® (topiramate) CNS licence
• Yarocen® OD (mirtazapin) CNS licence
• Jovital® C Duo-Active® (vitamin C) proprietary
21

22. 12% payment and med rep fee paid,
net sum is modified by 20% and 100% withheld items
EGIS payments (HUF million): Q1 Q2 Q3 Q4
12% and price/volume 446 404 456 452
Med rep fee 152 149 151 150
20% or 100% withheld -109 -589 -596 -589
Aggregately 489 -35 11 13
Claw-back 0 0 0 0
22

23. 16% aggregate increase in Russia
and other CIS markets
2009/2010 2008/2009
Change
USD thousand year year
Russia 132,030 117,652 12%
Ukraine 19,793 15,210 30%
Kazakhstan 10,138 7,441 36%
Belarus 8,886 8,252 8%
Other CIS markets 14,961 12,141 23%
Total 185,808 160,696 16%
23

24. 9% increase in CEE export
2009/2010 2008/2009
Change
USD thousand year year
Poland 86,816 82,653 5%
Czech Republic 22,113 22,455 -2%
Slovakia 20,654 19,747 5%
Romania 20,850 17,974 16%
Turkey 8,625 5,064 70%
Bulgaria 8,259 6,675 24%
Latvia+Lithuania 3,534 3,452 2%
Vietnam 5,124 3,980 29%
Total CEE 175,975 162,000 9%
24

25. 9 new products were launched
in markets outside Hungary
• donepezil (CZ, PL, SK, AM, GE, UZ, RO) own dev. CNS
• escitalopram (BG, CZ, PL, SK, LT, LV) licence CNS
• gabapentin (CZ, RO, SK) licence CNS
• granisetron (RO, SK) licence onc
• levocetirizine (AM, AZ, GE, UA, UZ) own dev. allergy
• olanzapine (PL) licence CNS
• oxaliplatine (RO, SK) licence onc
• betahistin (SK) licence CNS
• metoprolol succinat (CZ) licence CV
25

26. Cost of sales ratio improved 1.3pp
2009/2010 2008/2009
HUF million year year Change
Cost of sales 52,206 51,792 1%
Sales 118,915 116,142 2%
Cost of sales ratio 43.9% 44.6%
26

27. General costs increased 3%
2009/2010 2008/2009
Change
HUF million year year
Marketing & Sales 28,143 26,047 8%
R&D 10,860 10,060 8%
Administrative 10,026 11,468 -13%
Total general costs 49,029 47,575 3%
27

28. Balance of other income and expenditures
more favourable by HUF 567 million
2009/2010 2008/2009 Change
HUF million year year HUF m
Total -2,168 -2,735 567
Payments to OEP -477 -1 842 1,365
Local taxes (trade, etc.) -1,858 -1,658 -200
Other items 167 765 -598
28

29. Financial profit increased by HUF 2,181 million
2009/2010 2008/2009 Change
HUF million year year HUF m
Total 2,348 167 2,181
Interest income 1,429 1,581 -152
Forex gain 1,117 148
Result on hegde -251 -1,019
Forex related items together 866 -871 1,737
Other items 53 -543 596
29

30. Hedge contracts (1st November)
Put Call
USD m
strike price strike price
October 7 213 221
November 6 222 230
December 5 221 227
January 4 216 223
February 2 212 219
March 1 199 204
30

31. Annual balance of currencies + USD 123 m
in USDm Income Expenses Balance
USD 173 71 102
EUR 117 147 -30
PLN 64 20 44
CZK 23 8 15
CHF 0 8 -8
other 3 3 0
Total 123
31

32. 3% increase in headcount
Sept 30 Sept 30
people 2010 2009
EGIS 2,597 2,540
Commercial offices 758 716
Subsidiaries 431 410
Medimpex companies 38 40
EGIS Group 3,824 3,706
32

33. Capex increased 3%
2009/2010 2008/2009 Change
HUF million year year %
EGIS PLC 13,103 13,499 -3%
Subsidiaries 1,405 571 146%
Total capex 14,508 14,070 3%
33

34. Guidance suitably realized
Market Currency Guidance Guidance Annual
in February in August fact
Hungary HUF +5% +5% +4%
Russia USD +5-10% +5-10% +12%
Ukraine + other CIS USD +8-10% +8-10% +25%
CEE EUR +8% +8% +8%
RoW pharma EUR -35% -35% -35%
API EUR -35% -25% -25%
34