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Company profile

The strategy

STADA’s business model focuses on the health care market. At the center of the internationally oriented business activities is the pharmaceutical market.

The Group focuses on selected segments within the health care and pharmaceutical market. With regard to costs and risks, STADA deliberately does not conduct any own research on, or marketing of new active pharmaceutical ingredients, but rather focuses on the development and marketing of products with active ingredients – generally active pharmaceutical ingredients – which are free from commercial property rights, particularly patents. The products sold by STADA are primarily positioned in the two core segments of Generics and Branded Products.

The strategic success factors of the STADA Group include, in particular, strong product development, a comprehensive product portfolio, an international sales structure with close market proximity, a high degree of flexibility due to short decision-making processes and functional reporting structures. In addition, efficient cost management and an active acquisition policy, including long-standing experience in integration management, are part of the Group’s sustainable success story.

STADA’s business activities focus on the four market regions of Germany, Central Europe, CIS / Eastern Europe and Asia & Pacific, which were newly defined in the context of the further implementation of the Group-wide cost efficiency program “STADA – build the future” in 2012. By determining these market regions, STADA frees itself from the former reporting by country and thereby takes account of the changed structure resulting from the efficiency program. At the same time, STADA was able to integrate the Grünenthal sales structures fully acquired in January 2012 and allocate the newly defined areas of responsibility. The four regions correspond to the operating segments according to market region used for internal reporting since 2012.

Comprehensive product portfolio	STADA offers an extensive product portfolio for a wide range of therapeutic purposes – normally in the form of prescription drugs – such as for pain, women's health, cardiovascular conditions and diabetes. The product spectrum also includes well-known branded products such as Grippostad®, Ladival® and Mobilat®, in addition to low-cost, high-quality generics. With this multi-faceted product portfolio, we aim to contribute to keeping the costs of health care as low as possible in accordance with our mission statement following the motto of "All the best!".
Successful product development with “Time and cheap to market” strategy	One of STADA's success factors is strong product development. Based on the product pipeline, which remains well filled, STADA will continue to constantly expand the existing Group portfolio – particularly in the core segment Generics. In addition to sales and earnings achieved in the context of new product launches, the opportunity also exists to attain an improved margin mix as well as for economy of scale effects insofar as the new products can be launched with margins that are initially better than the Group average or that they can be launched within the scope of existing sales structures in the individual markets of the respective market regions. In the context of a “Time and cheap to market” strategy, STADA generally pursues the goal of launching new products not only at the earliest point in time, but also at the best possible cost of sales.
International sales structure with a local focus	The Group’s further success factors include its international sales structure which is designed to market products from the Group portfolio in a way that is adapted to the different regulatory and competitive framework conditions in the individual markets of the respective market regions. In order to be able to counteract the challenges and risks in individual market regions and to be able to make optimum use of the respective growth opportunities, STADA will continue to expand the global sales network in the future as well.
Organic growth complemented by acquisitions with concentration on high-growth emerging markets and the high-margin Branded Products segment	The Group pursues an active acquisition policy which the Executive Board follows with the intent of further expanding the Group's business activities. It focuses on selected markets, predominately high-growth emerging markets, as well as on the expansion and further internationalization of both core segments Generics and Branded Products. Against the backdrop of increasing pressure to reduce costs, to which the individual health care systems are exposed, the Executive Board particularly targets further growth opportunities in branded products as they are generally characterized by better margins and are subject to less regulatory intervention. The Executive Board generally does not exclude, also in the future, cooperations with a significant capital investment. For larger acquisitions or cooperations with capital investments, appropriate capital measures continue to be imaginable if the burden on the equity-to-assets ratio from such acquisitions or cooperations is too high.
Functional reporting structures with short decision-making processes	The functional reporting structures with short decision-making processes and a strong local market presence at the same time also count among the Group’s established success factors. This particularly applies to sales activities, because the ability to react in the short-term to structural, regulatory or competition-related changes plays an essential role in both exploiting opportunities and reducing risks. For this reason, STADA will continue to pursue an aggressive price policy in individual cases with, if necessary, a possible decrease of operating margins in order to achieve a better market position or a higher market share. The goal for this approach is, however, that the business activities in the relevant market of an individual market region are profitable or become so within a foreseeable time.
Efficient cost management and consistent implementation of “STADA – build the future”	Taking earnings aspects into consideration, efficient cost management also plays an important role in the Group. One focus is thereby on cost of sales and all the associated costs, as it clearly represents the Group's largest cost item. STADA will continue in the implementation of the remaining measures of the Group-wide cost efficiency program “STADA – build the future”, scheduled for the period of 2010 to 2013, which aims at strengthening mid and long-term earnings potential. The Executive Board still expects that this project will allow additional earnings contributions to be achieved, which with the gradual implementation of the individual measures will add up to annual savings in the double-digit million area.