Address CEO

ADDRESS OF THE CEO/MB PRESIDENT OF ALKALOID AD SKOPJE

Globally, 2017 was marked with various tensions which will represent new challenges in the geopolitical flows and could reflect the world economy. Our country, after two years of political crisis and stagnation, received a new govenment, which inflicted fresh potentials and positive impulses for the economy, which we hope will also be copied in the graphs of the business subjects in the forthcoming period.

I am very pleased by the promising fact that in the region of Western Balkans, a market of approximately 24 million inhabitants (including Macedonia), there are numerous initiatives for regional development through investments in infrastructure, transport, energetics, digitalization, branding, improvement of mobility of products, services and workforce, education in accordance with the labor force market demands and similar. Therefore, Alkaloid will continue to be present in various initiatives like the Western Balkans 6 Chamber Investment Forum, Summit100 Business Leaders and similar inter-chamber cooperations, all for the purpose of providing more efficient placements of the products of Alkaloid and facilitating the flow of our products and services in the export markets.

RESULTS

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 9.094.716.094, which represents a growth of 10%. Our consolidated net profit amounted to MKD 809.277.171 noting 11% growth; both compared to 2016.

85% of our total (consolidated) sales were in the segment of Pharmaceuticals, 9% in Cosmetics, 3% Botanicals and 3% Chemicals segment.

Out of the total consolidates sales, 38% were realized on the domestic market and 62% were placements in the foreign markets. Out of those, 33% were effectuated in the markets of Southeastern Europe, 20% in Western Europe, 7% were placed in Russia and CIS and 2% on the remaining markets. In 2017, we achieved 13% growth in our export sales.

In the course of 2017, we had 131 new employments in the company, and as at 31 December 2017, Alkaloid AD Skopje counted 1856 people.

STOCK EXCHANGE OPERATIONS

According to the records of the Macedonian Stock Exchange, the shares of Alkaloid in the course of 2017 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 376.193.552, which is 14% of the total turnover recorded on the first official market of the Stock Exchange in 2017. The share price of Alkaloid AD Skopje ranged from MKD 5.351 to MKD 7.615, with an average of MKD 6.340,47, which represents a growth of 20.51% of the average price of the share compared to 2016. The dividend income from the shares of Alkaloid AD is 3.34%, which is significantly better investment than the bank savings.

NEW VENTURES

2017 was also marked with the trend of expansion of the marketing authorizations and initiation of new projects. We did around 50 out-license projects with nearly 40 partners worldwide. We obtained 132 marketing authorizations for above 200 pharmaceutical products and medical devices. Through our Department for Business Development, we have effectuated EUR 650.000 through sales of licenses of our products to renowned companies, and we signed the first agreements for three new markets: Canada, Mongolia and Switzerland.

INVESTMENTS

In 2017, the overall investments of the Company amounted to MKD 861.420.437. The ongoing investment activities in accordance with the capital investments plan included: purchasing of 2 new machines for packaging blisters, new machine for production of hard gelatin capsules, new equipment for drying wet granulate in the department for antibiotics at PC Pharmaceuticals, a new homogenizator in the Cosmetics segment. The new production facilities commissioned, are spread on a surface of 1000m2, and are an investment worth more than EUR 2.5 million. These are three investment projects: Facility for production of semi-solid pharmaceutical forms, Central Weighing Room 2 and Department for packaging solid pharmaceutical forms – all executed in accordance with the standards of Good Manufacturing Practice.

In 2017, we intensively worked on several information technology projects, such as:

  • Alka T&T project for serialization, for the purposes of placement of our products in the EU markets;
  • Alka CDC project (integrated solution for laboratory instruments);
  • Alka City project for replacement and upgrading of the corporate IT structure;
  • Alka MOS project for servicing and maintenance and other projects.

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 2017. For the seventh time, the employees of the company, under the auspices of the Foundation “Trajche Mukaetov” joined together in another charity event to raise more than MKD 1 million donated for equipping of two departments of the Pediatric Clinic at the Clinical Centre Mother Theresa in Skopje.

Ninth 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 418 recipients of scholarships (212 students of pharmacy and 206 students of medicine), 177 are active scholarship holders and 61 of these graduated students already started their careers at Alkaloid.

PROSPECTS

Two years ago, the Chess Club Alkaloid became European champion. In 2017, the club won the title of European vice-champion. The sport, as institution and universal phenomenon is present in every modern society and we, as a socially responsible company, will employ all efforts to support systems of positive values. In the sports, success usually comes due to the exclusive talent, discipline, skillful management and exceptionally hard and dedicated work. The same goes for the business. In sports, just like in the business, there are victories and defeats. The trial-and-error method is good for learning, as persistence is paving our way to success.

We managed to keep the growing trend of the company in the past eleven years. I honestly hope and wish this trend would continue in future. We must face all challenges reinforced with our leadership, knowledge, commitment to innovations, experience, professional integrity and credibility as through dedication and hard team work we will achieve results we would be proud of!

In the spirit of the company slogan “Health Above All” we must confirm the perception of Alkaloid as company which stands tall, still and ready to respond to all new challenges.

Zhivko Mukaetov
CEO/MB President