As a result, Sensiblu stopped expansion and focused on the already existing pharmacies.
“We’ve barely opened any pharmacies this year. We are, however, relocating those that are not doing very well in terms of profitability. We put development of the chain on hold because it’s difficult justifying expansion with the current pharmacy margins and results,” Robert Popescu told ZF in an interview.
The Sensiblu chain has more than 400 pharmacies and is the most visible part of the A&D Pharma group, which also includes pharmaceutical wholesaler Mediplus and a marketing & sales division (which promotes products for the companies looking to outsource this service). The group’s consolidated revenue amounts to EUR800 million.
The A&D Pharma management has not finished devising next year’s budget and Popescu says the group should include growth in it for 2014.
“A company that does not project growth has a problem. We cannot rely on the growth of the market with the budget (Health Ministry budget i.e.) looking the way it does. I think we’ll manage to find solutions to boost sales.”
Talking about the wholesale business, the A&D Pharma CEO said investments were made in two warehouses this year, one of which the central warehouse in Bucharest, whose capacity increased by 30%.
A&D Pharma also has a regional marketing & sales business, which was affected by the recall of Fervex (a cold medicine promoted by A&D Pharma in the region).
The regional marketing & sales business did well, performing as expected, except for the Fervex recall in Bulgaria, Poland and Romania, Robert Popescu said.
A&D Pharma got a EUR190 million loan from three of the largest local banks: BCR, BRD-Groupe Societe Generale and UniCredit Tiriac Bank this fall. It also got a EUR100 million equivalent factoring facility from BCR and UniCredit Tiriac Bank.
“A group the size and power of A&D Pharma has the resources it might need available, either when it decides to develop the business or when the market conditions suddenly change. We’ve demonstrated we are capable of doubling our line of credit in three years.”
Asked whether A&D Pharma was for sale, Robert Popescu said it was not. A&D Pharma is a very large company and he does not see its shareholders willing to sell it for a very low price.
“Romania is not an attractive country for investment and foreign investors. I don’t think a single month has gone by since I joined the company without investment bankers, investment funds and even pharmaceutical companies coming to us for talks about majority or minority stakes. Only one conclusion can be drawn from these things: You realize people are not ready to pay a price in Romania that has any reasonable connection with what they pay abroad.”
The local pharmaceutical market stands at EUR2.6 billion and the most important wholesalers are Mediplus, Farmexpert, Polisano, Farmexim, Fildas, ADM Farm, Europharm. The largest retail pharmacy chains are Catena, Sensiblu, Dona, Help Net and Ropharma.
(English version by Loredana Fratila-Cristescu)