ADDRESS OF THE CEO/MB PRESIDENT OF ALKALOID AD SKOPJE

2015 will be remembered as year of the biggest migrant crisis in the European history, the onset of the US presidential election campaign, the terrorist attacks in a few European metropolis and cities in Turkey, the riots in Ukraine, Brazil, Syria; the slow growth of the most rapid economy in the world, China, and many other events that have suppressed the economic growth in the second plane.

The continuous fall of the crude oil price that directly reflected the fall of the exchange rate of the Russian ruble, the change in the governing structure in Croatia, the elections in Serbia along with the changing political situation in our country were some of the challenges we faced interim our operations in the course of 2015.

RESULTS

The Management Board of Alkaloid AD Skopje, in the course of 2015 executed its responsibilities by carefully monitoring all segments of our Company operations and the overall economic conditions in the country and the region in general.

Despite all objective and subjective challenges, the company managed, to generate positive financial results in its operations employing extraordinary efforts and precautions in everyday operations.

We achieved total consolidated sales of MKD 7.860.414.000, which represents a growth of 6%, thus surpassing the sum of EUR 127,5 mil. in our placements. Our consolidated net profit amounted to MKD 666.467.000 noting 8% growth compared to 2014.

84% of our total (consolidated) sales were in the segment of Pharmaceuticals, 16% in Chemicals, Cosmetics and Botanicals.

Out of our total (consolidated) sales, 59% were placements on the foreign markets, representing 10% growth in the export sales compared to 2014.

Analyzed by regions, highest percentile growth in comparison with 2014 was marked on the market of North America (28%), the Commonwealth of Independent States (19%), the region of Southeastern Europe (10%), EU /EFTA markets (4%) and Macedonia (2%).

STOCK EXCHANGE OPERATIONS

According to the records of the Macedonian Stock Exchange, the shares of Alkaloid in the course of 2015 were amongst the most traded and most liquid ones.

Alkaloid AD Skopje, as one of the leading companies on the Macedonian Stock Exchange, in the regular stock exchange operations participated with traded MKD 317.905.386, which is 23.04% of the total turnover recorded on the first official market of the Stock Exchange in 2015.

The share price of Alkaloid AD Skopje ranged from MKD 4.700 to MKD 5.700, with an average of MKD 5.067,83, which represents a growth of 11.40% of the average price of the share compared to 2014.

Alkaloid AD Skopje was granted the 6th Crystal Bell for being the most transparently quoted company and a plaque for being the second ranked company according to turnover at the Macedonian Stock Exchange effectuated in the past 20 years.

These recognitions represent another confirmation of the high level of corporate governance employed by Alkaloid AD Skopje, the transparency in its operations and the high quality level of quality communication with the investors, the institutions, the media and the public in general.

OTHER IMPORTANT VENTURES

2015 was yet marked with the trend of expansion of the marketing authorizations, with registration of around 100 new products in 18 markets in the countries of the European Union and 8 countries in the region and CIS.

In PC Pharmaceuticals, we introduced a procedure for project management, in order to optimize the time period for placement of our products on the markets and manage the product portfolios more efficiently. Through our department for business development, we realized the sales of the first licenses for our products to world renown companies, such as the license for Nycomed Takeda for the Scandinavian countries, Sun Pharma for Romania, Sandoz for Slovenia, Generic Partners for the South African Republic to which ventures we are especially proud since we have demonstrated additional quality for export of knowledge.

INVESTMENTS

In 2015, the overall investments of the Company amounted to MKD 986.806.000 which represents a twofold amount compared to the previous year. I would hereby emphasize a few:

  • We officially commissioned the new Centre for Quality Control at PC Pharmaceuticals, an investment worth more than EUR 5 mil., covering above 3000m2 of surface;
  • Besides the new ALU/ALU packaging machine, we purchased a new, third in a row tableting machine in PC Pharmaceuticals, a new GLAT machine for filming tablets, a new Miler drum manipulator and new compressor at the cephalosporin production segment.
  • Taking into consideration the continual double-digit in the sales of our tea program on the US market, we ordered a new filter filling machine IMA C24 with annual capacity of over 5 million teas.
  • We completed the SAP implementation with 6 modules in our subsidiary in Belgrade, Serbia, our largest export market.
  • We effectuated additional investments in our entities in Ljubljana, Moscow and Alkaloid CONS Ltd, and the continual investments in highly sophisticated equipment, technology and personnel for the departments of production, research, development and quality control will continue in future.

Based on previously implemented projects and invested efforts, in 2015 the Company was granted several internationally recognized certificates.

CORPORATE SOCIAL RESPONSIBILITY

Socially responsible activities, as one of the company’s main features and top priority in the operative agenda, continued with strong intensity in the course of 2015.

For the fifth time, the employees of the company, under the auspices of the Foundation “Trajche Mukaetov” joined together in another charity event to raise over MKD 807.000 intended for the Red Cross of the Republic of Macedonia for handling the refugee/migrant crisis. For the intensive cooperation with this global humanitarian organization, on the occasion of marking the 70th anniversary of its establishment in the Republic of Macedonia, Alkaloid was granted a Golden Supporter Acknowledgment and I was granted a Golden Token for support.

Eighth year in a row, the Foundation “Trajche Mukaetov” grants scholarships to talented students of medicine and pharmacy at the state university “Sts. Cyril and Methodius”. Out of 344 recipients of scholarships (179 students of pharmacy and 165 students of medicine), 128 are active scholarship holders and 40 of these graduated students already started their careers at Alkaloid.

PROSPECTS

The economic progress in 2016, according to all parameters, will remain in the shadow of the geopolitical occurrences. The uncertainties of 2016 represent a major challenge and responsibility that all management bodies and the overall personnel at the company should bear. All activities of the company will be directed to maximum diversification of the potential risks in our operations and reduction of their intensity and eventual impact. The credibility, integrity and professional approach in all ventures will remain principal guidelines in our further growth and development, all for the benefit of our stakeholders, shareholders, consumers and employees.

When exactly 10 years ago I was appointed to the function of chief executive officer of this company, the sales of Alkaloid amounted to EUR 53.1 mil. We completed 2015 with consolidated sales of EUR 127.5 mil. In the United States, the companies that present continual 10-years growth in their sales, profit and dividends are called ‘business champions’. The process of climbing up these staircases was not easy at all, but I believe that we remained devoted to our firm determination for supreme quality and perfection in each segment of our operations. In the year of marking our 80th jubilee, I would personally wish that the company stays in the champion form and in the spirit of Alkaloid’s motto: ‘Health above all’ I would like to celebrate from this position many future successful achievements of Alkaloid! Happy 80th anniversary to Alkaloid!

Zhivko Mukaetov
CEO/MB President