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International sales activities

Italy

The Group's generics activities in the Italian market focus primarily on the sales company EG S.p.A., Milan. Another company, Crinos S.p.A., Milan, is primarily responsible for branded products.

In Italy sales decreased in 2009 by 6% to EUR 117.1 million (previous year: EUR 124.2 million); adjusted, sales were 1% percent below the level of the previous year.

Thus, generics in Italy were exposed to contradictory developments in 2009. Margin pressure caused by intensive price competition was further strengthened by regulatory price decreases in April 2009. At the same time however, the newly introduced limitations on discounts for the trade channels made themselves noticed in terms of improvements in margins and volumes. Against this backdrop, the Group’s generics sales in Italy in 2009 fell by 15% to EUR 67.5 million (previous year: EUR 79.0 million); adjusted, the sales decrease of generics in Italy amounted to only 4%. Generics thus contributed 58% to local sales in the financial year 2009 (previous year: 64%). With a market share of approx. 15.2% (previous year: approx. 16.6%), STADA occupied position 3 in the Italian generics market in 2009.¹⁾

The Branded Products segment in Italy recorded – under consideration of the acquisitions and disposals made there – an increase in sales of 10% to EUR 49.5 million in financial year 2009 (previous year: EUR 45.2 million), thus contributing 42% (previous year: 36%) to STADA’s Italian sales. Adjusted, sales growth amounted to 4%.

Operating profitability of STADA’s Italian activities in 2009 was, as expected, again approximately at Group average.

In Italy, STADA recorded an increase in sales of 8% to EUR 32.0 million in the first three months of 2010 (1-3/2009: EUR 29.5 million).

This was largely due to the Group’s generics sales in the Italian market, which rose considerably by 31% to EUR 22.1 million (1-3/2009: EUR 16.8 million). Generics thus had a share of 69% in local sales in the first three months of the current financial year (1-3/2009: 57%). This significant sales growth in generics was based on the one hand on the relatively low comparable basis of the corresponding quarter in the previous year and, on the other, on newly introduced limitations on discounts for the trade channels.

The Branded Products segment in contrast, recorded a sales decline in Italy in the first quarter of 2010 of 22% to EUR 9.9 million (1-3/2009: EUR 12.6 million) and thus still contributed 31% (1-3/2009: 43%) to STADA’s sales in Italy.

Sales growth with an operating profitability which will again be at about Group average can, from today’s perspective, continue to be expected in Italy for the current financial year 2010.

1)	STADA estimate based on IMS Health data at ex-factory prices.

1)	Sales below EUR 0.05 million were rounded to EUR 0.0 million.