Company overview
GlaxoSmithKline Pakistan Limited, the largest pharmaceutical company in Pakistan was incorporated in 2002. GSK Pakistan was formed with the merger of Smith Kline & French Pakistan Limited and Beecham Pakistan (Pvt.) Limited with Glaxo Wellcome Pakistan Limited. Primarily, the company operates in two industry segments: pharmaceuticals (prescription drugs & vaccines) and consumer healthcare (over-the-counter- medicines, oral care & nutritional care). The company manufactures and markets ethical based specialities, other pharmaceutical, animal health and consumer products. GSK Pakistan is the subsidiary of Setfirst Limited UK with 79% stake, whereas its ultimate parent company is GlaxoSmithKline plc, UK.
‘GlaxoSmithKline Plc’ the parent company
GlaxoSmithKline Plc is a British multinational pharmaceutical, biological and healthcare company. GSK Plc came into existence with the merger of Glaxo Wellcome and SmithKline Beecham in January 2000. Presently, GSK Plc operates in more than 180 markets around the world and holds around 7% of the world’s pharmaceutical market. GSK Plc is one of the leaders in four major therapeutic areas: antibiotics, central nervous system (CNS), respiratory and gastro-intestinal/metabolic. Besides, it is also a leader in vaccines and has a growing portfolio of oncology products. It also carries a consumer healthcare operation comprising of leading oral healthcare products, nutritional drinks and over the counter (OTC) medicines. The company leads the industry in value, volume and prescription market shares. Some of the company’s key brands include Augmentin, Panadol, Seretide, Betnovate, Zantac and Calpol in medicine and Horlicks, Aquafresh, Macleans and ENO in consumer healthcare.
History of GlaxoSmithKline Plc
GlaxoSmithKline (GSK), the world’s second largest research based pharmaceutical company, is the outcome of the merger between the four renowned companies namely; Burroughs Wellcome & Company, Glaxo Laboratories, Beecham and SmithKline & French.
Product portfolio
In Pakistan, the product portfolio of GSK ranges from pharmaceuticals, vaccines, over-the-counter (OTC) medicines and health-related consumer products.
The pharmaceuticals range covers antibiotics, antidepressant, gastrointestinal, dermatological, respiratory, cancer and cardiovascular medications. The vaccine includes the treatment of diseases like hepatitis A and B, diphtheria, tetanus and influenza.
The company’s top brands include Amoxil, Ampiclox, Augmentin, Betnovate, Calpol, Panadol, Septran, Seretide, Ventolin and Zantac. Further, during 2007 the company made following additions to its pharmaceutical range. The new launch includes Aerolin Evohaler, Avodart and Rotarix Vaccine.
The Penicillin Facility
The new state-of-the-art Penicillin facility has been built successfully. The facility is a self contained complex with a total project cost of PRs432mn. The facility has been designed to provide higher efficiency and flexibility in operations on the back of new manufacturing equipments and packaging lines.
Financial performance during 2007
During 2007, top-line of the company grew by 5% at PRs10.6bn as compared to PRs10bn in 2006. Meager growth in sales was attributable to issue related to raw material availability due to import restrictions. Moreover, consumer health care business registered a decline of 25% during 2007. However, healthy growth in vaccines, Dermatology, Antivirals and CNS portfolio lead due support to sales revenue. Gross margin of the company dropped by 108bps at 37% due to inflationary pressure prevailed during the period.
Thus, gross profit increased by 2% at PRs6.7bn. Healthy rise of 29% in other operating income lend due support to bottom-line of the company on the back of PRs154mn of income on receivable from pension fund from. Net profit of the company registered a muted growth of 0.3% at PRs1.7bn.
9M2008 performance
During 9M2008, the company posted 19% decline in PAT to PRs1.0bn versus PRs1.25bn in the last year’s corresponding period. However, net sales of the company increased by 24% to PRs9.85bn as compared to PRs7.97bn during the corresponding period of last year. Decent rise in top-line of the company is mainly driven by large government order of polio Vaccines and strong performance by key brands. Apart from polio vaccine sales growth, the company would have posted a growth of 13%. During the 9M2008, in contrast with previous year, consumer business achieved an increase in PRs74mn to PRs151mn. Rising raw material and packaging cost dragged the gross margin of the company by 785bps to 30% as against 38% recorded in the same period last year. During the period, depreciation of Pak Rupee against US$ deemed unfavorable and the company recorded an exchange loss of PRs66mn.
Moreover, during 3Q2008, adverse economic condition and persistent inflationary pressure marred the performance of the company. Bottom-line of the company declined by 33% at PRs275mn as against PRs411mn in 3Q2007. Due to soaring input prices, cost of sales increased by 32% at PRs2.2bn as compared to PRs1.6bn in the last year’s corresponding period. Resultantly, gross margins squeezed by 810bps at 31%.
Research
First Capital Equities Ltd
GlaxoSmithKline Pakistan Limited, the largest pharmaceutical company in Pakistan was incorporated in 2002. GSK Pakistan was formed with the merger of Smith Kline & French Pakistan Limited and Beecham Pakistan (Pvt.) Limited with Glaxo Wellcome Pakistan Limited. Primarily, the company operates in two industry segments: pharmaceuticals (prescription drugs & vaccines) and consumer healthcare (over-the-counter- medicines, oral care & nutritional care). The company manufactures and markets ethical based specialities, other pharmaceutical, animal health and consumer products. GSK Pakistan is the subsidiary of Setfirst Limited UK with 79% stake, whereas its ultimate parent company is GlaxoSmithKline plc, UK.
‘GlaxoSmithKline Plc’ the parent company
GlaxoSmithKline Plc is a British multinational pharmaceutical, biological and healthcare company. GSK Plc came into existence with the merger of Glaxo Wellcome and SmithKline Beecham in January 2000. Presently, GSK Plc operates in more than 180 markets around the world and holds around 7% of the world’s pharmaceutical market. GSK Plc is one of the leaders in four major therapeutic areas: antibiotics, central nervous system (CNS), respiratory and gastro-intestinal/metabolic. Besides, it is also a leader in vaccines and has a growing portfolio of oncology products. It also carries a consumer healthcare operation comprising of leading oral healthcare products, nutritional drinks and over the counter (OTC) medicines. The company leads the industry in value, volume and prescription market shares. Some of the company’s key brands include Augmentin, Panadol, Seretide, Betnovate, Zantac and Calpol in medicine and Horlicks, Aquafresh, Macleans and ENO in consumer healthcare.
History of GlaxoSmithKline Plc
GlaxoSmithKline (GSK), the world’s second largest research based pharmaceutical company, is the outcome of the merger between the four renowned companies namely; Burroughs Wellcome & Company, Glaxo Laboratories, Beecham and SmithKline & French.
Product portfolio
In Pakistan, the product portfolio of GSK ranges from pharmaceuticals, vaccines, over-the-counter (OTC) medicines and health-related consumer products.
The pharmaceuticals range covers antibiotics, antidepressant, gastrointestinal, dermatological, respiratory, cancer and cardiovascular medications. The vaccine includes the treatment of diseases like hepatitis A and B, diphtheria, tetanus and influenza.
The company’s top brands include Amoxil, Ampiclox, Augmentin, Betnovate, Calpol, Panadol, Septran, Seretide, Ventolin and Zantac. Further, during 2007 the company made following additions to its pharmaceutical range. The new launch includes Aerolin Evohaler, Avodart and Rotarix Vaccine.
The Penicillin Facility
The new state-of-the-art Penicillin facility has been built successfully. The facility is a self contained complex with a total project cost of PRs432mn. The facility has been designed to provide higher efficiency and flexibility in operations on the back of new manufacturing equipments and packaging lines.
Financial performance during 2007
During 2007, top-line of the company grew by 5% at PRs10.6bn as compared to PRs10bn in 2006. Meager growth in sales was attributable to issue related to raw material availability due to import restrictions. Moreover, consumer health care business registered a decline of 25% during 2007. However, healthy growth in vaccines, Dermatology, Antivirals and CNS portfolio lead due support to sales revenue. Gross margin of the company dropped by 108bps at 37% due to inflationary pressure prevailed during the period.
Thus, gross profit increased by 2% at PRs6.7bn. Healthy rise of 29% in other operating income lend due support to bottom-line of the company on the back of PRs154mn of income on receivable from pension fund from. Net profit of the company registered a muted growth of 0.3% at PRs1.7bn.
9M2008 performance
During 9M2008, the company posted 19% decline in PAT to PRs1.0bn versus PRs1.25bn in the last year’s corresponding period. However, net sales of the company increased by 24% to PRs9.85bn as compared to PRs7.97bn during the corresponding period of last year. Decent rise in top-line of the company is mainly driven by large government order of polio Vaccines and strong performance by key brands. Apart from polio vaccine sales growth, the company would have posted a growth of 13%. During the 9M2008, in contrast with previous year, consumer business achieved an increase in PRs74mn to PRs151mn. Rising raw material and packaging cost dragged the gross margin of the company by 785bps to 30% as against 38% recorded in the same period last year. During the period, depreciation of Pak Rupee against US$ deemed unfavorable and the company recorded an exchange loss of PRs66mn.
Moreover, during 3Q2008, adverse economic condition and persistent inflationary pressure marred the performance of the company. Bottom-line of the company declined by 33% at PRs275mn as against PRs411mn in 3Q2007. Due to soaring input prices, cost of sales increased by 32% at PRs2.2bn as compared to PRs1.6bn in the last year’s corresponding period. Resultantly, gross margins squeezed by 810bps at 31%.
Research
First Capital Equities Ltd
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