February sales in several markets exceeded prior year results; procedures are in place to limit the spread of coronavirus

Olainfarm group’s indicative consolidated sales in February reached EUR 11 million, which is a decline by 4% compared to February last year. Latvia’s share in total revenue was 30%, Belarus’ was 21% and Russia’s was 20%. Sales increased in Latvia by 4%, in Belarus by 36%, in Central Asia and in Caucasian countries by 100% and 43%, respectively. In the EU countries sales rose by 10%. At the same time, in Russia there was a drop by 30% and in Other countries by 22%. In March the Group started cooperation with one of the largest pharmaceutical distributors in Ukraine, which will allow to reach substantial results in the long-term.

Taking into account the announcement by the World Health Organization on March 11, 2020 that Covid-19 has been declared a pandemic, the Latvian government has, on March 12, declared a state of emergency, thereby limiting and seeking to reduce the spread of the virus by reduction of direct contact between people. Olainfarm has strict procedures in place to prevent the spread of the virus in order to protect employees and to continue production.

JSC Olainfarm has sufficient inventory of raw materials and excipients in place to secure manufacturing process and is on a regular base in contact with companies delivering raw materials and excipients from outside Latvia for future manufacturing needs. JSC Olainfarm conducts daily health monitoring of employees to guarantee the production planning of the products and have put precautionary measures in place regarding health and transport of the employees. Group is also on a daily base in contact with the distributors and partners abroad to secure product flow in their markets.

During the first two months of 2020, Olainfarm group’s indicative consolidated sales amounted to EUR 18.5 million. It is by 22% less than in 2019 due to additional volumes sent to Russia in amount of EUR 6 million in the second half of 2019 when wholesalers anticipated introduction of serialization requirements and it has been taken into consideration in the forecasts for 2020. At the beginning of this year Latvia’s market has the largest share of revenues (36%), Belarus’ share was (23%) and Russia’s share was 12%. The fastest increase in revenue during the two-month period was in the Central Asian and Caucasian regions where the sales were 76% and 88% more than a year ago, in Latvia revenue increased by 2% but in Belarus by 9%. At the same time sales declined in Russia (-63%), in the EU countries (-6%) and in Other countries (-8%).

“February results show a positive trend, with sales in Russia picking up, we expect the results of the first quarter to be on in line with budget for 2020. Olainfarm is ready for the challenges related to Covid-19 restrictions worldwide, we have sufficient raw materials for the coming months so that the restrictions related to the spread of coronavirus do not affect the availability of the company’s raw materials. To ensure long-term competitiveness, we are investing significantly in the planning of clinical trials in order to start one Phase 1 and three Phase 3 clinical trials this year and early 2021needed to remain compliant with our core products to regulatory requirements, while continuing to providing customers with top-quality formulations,” said Jeroen Weites, Chairman of the Management Board of JSC Olainfarm.

February 2020, consolidated results	Sales, mil. EUR	Share in total sales	Compared to February 2019
Latvia	3.294	30%	4%
Belarus	2.316	21%	36%
Russia	2.225	20%	-30%
Central Asia	1.107	10%	100%
EU countries	1.088	10%	95%
Other countries	0.742	7%	-22%
Caucasian countries	0.176	2%	43%
Ukraine	0.005	0%	-100%
Total	10.953	100%	-4%

Two months 2020, consolidated sales	Sales, mil. EUR	Share in total sales	Changes to two months 2019
Latvia	6.674	36%	2%
Belarus	4.297	23%	9%
Russia	2.275	12%	-63%
Central Asia	1.908	10%	76%
EU countries	1.856	10%	-6%
Other countries	1.118	6%	-8%
Caucasian countries	0.378	2%	88%
Ukraine	0.006	0%	-100%
Total	18.512	100%	-22%

The Central Asian region includes Uzbekistan, Kazakhstan, Tajikistan, Kyrgyzstan, Mongolia and Turkmenistan.
The EU country region includes all of the European Union member states except for Latvia;
Other countries include all of the countries in the world, which are not included in any other groups;
The Caucasian countries are Georgia, Armenia and Azerbaijan.

Unconsolidated sales in February and two months

According to the preliminary unconsolidated figures, JSC Olainfarm sales reached EUR 8 million in February 2020 which represents a decrease by 8% compared to February, 2019. Sales of products in February improved in Belarus by 40%, in Central Asian countries by 126%, in the EU countries by 93%, in the Caucasian countries by 72% and in Latvia by 3%. Sales in February declined in Russia by 32% and in Other countries by 31%. As announced before there were additional sales to Russia in the second half of 2019 due to anticipated regulatory requirements on serialization scheduled for 2020.

During the first two months of this year JSC Olainfarm preliminary revenue declined by 31% and was EUR 12.9 million. The largest sales outlet was Belarus where the revenue climbed up by 7% compared to the two-month period a year ago, in Latvia sales were flat, in Central Asia there was an increase by 84% and in Caucasian countries by 46%. At the same time revenue declined in Russia by 69% and in the EU countries by 10%.

February 2020, unconsolidated sales	Sales, mil. EUR	Share in total sales	Compared to February 2019
Belarus	1.999	25%	40%
Russia	1.871	23%	-32%
Latvia	1.443	18%	3%
Central Asia	0.946	12%	126%
EU countries	0.936	12%	93%
Other countries	0.651	8%	-31%
Caucasian countries	0.176	2%	72%
Ukraine	0	0%	-100%
Total	8.022	100%	-8%

Two months 2020, unconsolidated sales	Sales, mil. EUR	Share in total sales	Changes to two months 2019
Belarus	3.584	28%	7%
Latvia	3.038	23%	0%
Russia	1.74	13%	-69%
Central Asia	1.721	13%	84%
EU countries	1.562	12%	-10%
Other countries	1.02	8%	-9%
Caucasian countries	0.264	2%	46%
Ukraine	0.002	0%	-100%
Total	12.931	100%	-31%

Results of subsidiaries in February and two months

The pharmacy chain Latvijas Aptieka sales reached EUR 2.2 million in February 2020, which represents a 2% increase compared to February, 2019. 68 pharmacies were operating during this period. Silvanols sales reached EUR 0.5 million in February 2020, representing a decrease by 15% versus February, 2019. The combined sales of Tonus Elast and Elast Medical in February 2020 were EUR 0.8 million, which is 11% more than this time last year. Olainmed and Diamed Medical Center sales reached EUR 0.3 million, while the Belarusian subsidiary NPK Biotest reached EUR 0.31 million in sales in February, which is 11% higher than in February of  last year.

During the first two month period of 2020, Latvijas Aptieka sales amounted to EUR 4.6 million, demonstrating a 2% increase in comparison to the same time period last year. Sales of SIA Silvanols reached EUR 0.9 million which is 16% less than last year. The combined sales of Tonus Elast and Elast Medical during the first two months of this year totaled up to EUR 1.3 million, which is an increase by 6%. Medical Center Diamed and Olainmed revenue was EUR 0.6 million during the first two months of this year and the Belarusian company NPK Biotest sales were worth EUR 0.6 million, improving the result of last year by 8%.

	February 2020	Two months 2020
Sales markets of Olainfarm	30	36
Sales markets of the Group	34	41
Number of pharmacies	68
Sales of Latvijas aptieka, mil. EUR	2.164	4.55
Sales of Tonus Elast and Elast Medikl, mil. EUR	0.784	1.304
Sales of Silvanols, mil. EUR	0.495	0.896
Sales of Medical centers, mil. EUR	0.293	0.596
Sales of NPK Biotest, mil. EUR	0.312	0.593

According to the JSC Olainfarm 2020 budget, unconsolidated sales are planned to reach EUR 97.3 million in 2020, while consolidated sales are expected at EUR 135.5 million.  According to these preliminary sales figures, in the first two months of 2020, 13% of annual target for unconsolidated sales and 14% of annual target for consolidated sales have been reached.

JSC Olainfarm has reviewed announcement procedure of monthly revenue data. In April this year sales data for March is planned to be released, afterwards revenue data will be disclosed on quarterly basis, starting from the second quarter sales figures.

JSC Olainfarm is one of the biggest pharmaceutical companies in Latvia with more than 45 years of experience in production of medication and chemical and pharmaceutical products. A basic principle of the company's operations is to produce reliable and effective top -quality products for Latvia and the rest of the world. Products made by the Group are being exported to more than 60 countries of the world, including the Baltics, Russia, other CIS, Europe, Asia, North America and Australia.

Additional information:  
Jānis Dubrovskis
Investor Relations Advisor of JSC Olainfarm
Phone: +371 29178878
Email: janis.dubrovskis@olainfarm.com