Lek sales and profit in 1998

1. 3. 1999

Despite increasingly difficult conditions in certain markets, the business performance of the Slovene pharmaceutical company Lek in Calendar Year 1998 continued to be successful. During this period the company realized sales of SIT46 billion, thereby achieving a 6% growth compared to Calendar Year 1997. Lek increased its domestic sales by 11%, and its foreign sales by 3.6%. According to unaudited data, Lek’s pre-tax after sales profit was SIT4.7 billion, which exceeded the previous year’s result in Slovene Tolars by 10%.

In the domestic market Lek sold products of SIT 11.9 billion (accounting for 25.9% of total sales). In the Central and East European countries Lek’s sales were 23.1% of total sales, 16.4% in the markets of former Yugoslavia, 14.6% in developed countries, 12.2% in the countries of the former Soviet Union, and 7.8% in developing countries.

Lek’s five key markets are Slovenia, Poland, USA, Croatia and Russia. In the first three markets Lek achieved high growth, namely 11% in Slovenia, 20% in Poland and 16% in the USA. For well-known macroeconomic reasons, Lek’s sales in Croatia and Russia were lower than a year before.

The largest share, 81.8%, in total sales is accounted for by prescription drugs for human use, followed by OTC sales amounting to 6.7%, cosmetics 4.5%, veterinary products 4.1% and medical devices 2.9%. Compared to the year 1997, the largest increase was achieved in the sales of veterinary drugs, namely 30%.

For the present year Lek is planning a 6.6% increase in sales.

According to Business Central Europe magazine, Lek was the best performing Slovene company in 1998.

In 1998 Lek allocated SIT 5 billion for investments. The major investment concluded last year was the completion of an antibiotic production plant construction in Prevalje, Slovenia. An investment in semi-industrial laboratories for biotechnological production was also concluded, which confirms Lek’s intense orientation towards the development of biotechnological products.

This year Lek is planning to increase investment funds to SIT6.4 billion. The construction of an all-purpose production plant for organic synthesis is of greatest importance, enabling Lek to further penetrate demanding developed markets.

For further information contact Investor Relations at Lek d.d. (+386 61 180 27 85) or email: marko.zuzek@lek.si