Good afternoon, ladies and gentlemen, also from my side. It is a pleasure to welcome you to today's conference call or webcast.

In this first part, I will present our first half 2026 results, and after the presentation, as Gregor said, we will open the floor to your questions. Thank you for your interest in Krka, and let us begin with key highlights of the first half of the year.

Krka delivered an excellent performance in the first six months of the year, achieving record sales of more than €1.1 billion and further strengthening profitability, as you can see. EBIT increased by 20%, reflecting continued sales growth, and a favorable product mix, and ongoing improvements in operating efficiency.

Growth was basically driven primarily by our prescription pharmaceuticals business, which remains the cornerstone of Krka's success, and accounted for most of the increase in sales. We recorded sales growth in most markets and regions, confirming the resilience of our diversified international business model.

At the same time, we continued to invest. We allocated €100 million to research and development, obtained seven new products, and continued to implement key investment projects with the aim of expanding capacities and supporting long-term growth for Krka.

The first half results, as you can see, also demonstrate the strength of our margins, which remained among the highest in Krka's history. Strong demand across many key markets, also an increasingly value-added product mix, I can say, with more and more single-pill combinations, also successful launches of new products on certain markets, and continuous improvements in operational efficiency, all this contributed to this performance.

Most importantly, behind these financial results stands the trust of patients and healthcare professionals worldwide. Today, more than 100 million people use Krka's medicines every day, reinforcing our commitment to quality, innovation, and sustainable growth.

Overall, the first half results confirm the successful execution of our strategy and keep us well-positioned to achieve our objectives for 2026. Turning to sales performance by regions, in the first half of 2026, sales of products and services reached €1,114 million, representing growth of 7%.

Growth by €68 million was across majority markets and regions, with Western Europe the only region with a slight decline. Eastern Europe remained our largest region, accounting for 36% of total sales and generating €405 million in revenue, an increase of 9% compared with the first half of last year.

The Russian Federation remained our largest individual market and delivered strong growth of 15%. Central Europe is our second largest region, and here we generated €257 million in sales, this is up 6%, and Poland continued to perform well with growth of 5% and remained our second largest market globally.

At the same time, we recorded solid growth across all other markets in this region, as you will see later on. In Western Europe, Germany remained our key market with flat sales, although we decreased the sales for tenders.

Sales in the region overall were slightly below last year's level, but we maintained strong positions with nice gross sales in several important markets, such as Finland, Ireland, and Portugal. South-East Europe generated €159 million, an increase of 8%, while our domestic market, Slovenia, recorded growth of 9%, and we increased sales across all markets in this region and further strengthened our market-leading position in Slovenia.

Particularly encouraging was the performance of overseas markets, where sales increased by 27%. This is the highest relative growth rate among all regions.

Overall, our first half results once again, I would say, demonstrate the strength of Krka's geographically well-diversified business model. Growth was supported by a broad range of markets, regions, and products, providing both resilience and a solid base for further development.

As I previously already said, the Russian Federation remained our largest market. We generated 15% growth in the first half, placing us on second place among international providers of generics in this large country of 145 million inhabitants.

Good performance was supported by Rx and also some successful launches of new combinations, favorable demand trends, and the contribution of local production. Our Russian site, namely, supplied more than 70% of all products sold in Russian Federation.

Different independent sources report different market growth figures. However, first half market growth was in the range between 8% to 11%.

Overall, market conditions remain quite favorable. The ruble has been relatively stable at around 90 rubles for €1.

Inflation is also relatively well-contained at around 5.5% to 6%, and consumer purchasing power remains solid despite some moderation in growth momentum. At the same time, the key interest rate is gradually declining, although it remains elevated at 14.25%.

In Ukraine, we remain the second largest provider of medicines with sales growth significantly outperforming market growth. Despite these all challenges in this market, we maintained a strong competitive position in Ukraine with 7% growth.

Poland, as our second largest market, maintained its steady development with 5% sales growth, and we remained the fifth largest provider of generics in this country. Also in Poland, the sales were driven by prescription medicines, most notably with statins, sartans, and analgesics.

Also, antidepressants generated strong sales. We also recorded positive results across most other key markets, as you can see, in Central, Eastern, and South-East Europe, with particularly strong performances, for instance, in Belarus, plus 15%; Hungary, plus 11%; North Macedonia; Bosnia and Herzegovina; Latvia; and many others.

At the same time, several overseas markets delivered even double-digit growth rates, which reflects the increasing contribution of these markets, which are outside our traditional core regions. These results were also supported, especially in this region, by new product registrations.

Overall, the results confirm that Krka's growth is not dependent on a limited number of markets. Our diversified presence, strong competitive positions, and continuous portfolio expansion continue to support growth across a broad range of countries.

Importantly, growth was generated by both our largest and our smaller or mid-sized markets. We have more than 1,000 products, and as already many times today, prescription medicines remain our core business, accounting for 85% of total sales and providing us stability.

There is no seasonal negative effect. Sales of prescription products increased by €66 million, or plus 7%, and our portfolio is focused primarily on chronic diseases.

Cardiovascular medicines represent the largest group, representing over 50% of Rx sales, including treatments for hypertension, cholesterol, and anticoagulation. This is followed by central nervous system medicines, gastrointestinal medicines, and painkillers, just to mention the largest four.

Product groups containing especially perindopril, rosuvastatin, telmisartan, atorvastatin, and duloxetine contributed the most to sales growth in the first six months of this year. OTC medicines represent our second largest segment, almost 7% of total sales, supported by strong brands in cough and cold, pain relief, and vitamins.

Here, sales declined due to a weak flu season. In vet products, where our sales increased by 5%, our focus is on companion animals.

This is a fast-growing market segment, already accounting for 80% of our total vet business. Research and development remains one of Krka's key strategic priorities and a major driver of our long-term growth.

We consistently reinvest around 10% of annual sales into R&D activities, supported by more than 800 experts who are currently developing a pipeline of over 170 products. During the first half of 2026, we extended our portfolio by seven new products, six Rx and one vet, in the areas of diabetes, cardiovascular, CNS, and one vet medicine for companion animals.

In addition to this, it's also very important, we completed more than 300 registration procedures for both new and existing products across many markets, and thanks to this, we further expand our availability and reach of our portfolio. One important fact is that around 60% of this R&D expense is directed towards the development of new products, ensuring with this a continuous flow of launches and future growth opportunities, but the remaining 40%, which could become 50%, is allocated to lifecycle management activities, including quality improvements, regulatory compliance, optimization of pharmaceutical and API manufacturing processes, and I would say also the ongoing enhancement of already established or mature products.

We believe that this part is also extremely important because not everyone is doing that, and we see this as an important opportunity and competitive advantage of Krka. This balanced approach enables us not only to expand our portfolio with new products, but also to continuously improve efficiency, quality, and competitiveness across our existing product range, supporting sustainable growth and profitability over the long term.

Our goal is to continuously reduce, for instance, impurities in medicines and improve with this product quality. This combination of strong pipeline, regular launches, and process and product improvements remain the key drivers of Krka's future growth.

We have built a leading position in innovative single-pill combinations, which simplify treatment, improve patient adherence, and support better clinical outcomes. These products are developed using advanced formulations, complex technologies, and in many cases, patent-protected innovations.

To date, we have launched more than 200 single-pill combinations, and we have become one of the leading providers globally. Today, single-pill combinations account for more than 30% of Krka's total sales.

In some markets, our single-pill combinations share is going towards 40% in total share of sales, and this represents one of the fastest growing and also the most profitable segments of our portfolio. Our lifecycle management strategy focuses on continuously expanding the portfolio through new combinations and other value-added products.

With this, we enable us to strengthen existing brands and to address evolving patient needs in key therapeutic areas. Despite greater development and manufacturing complexity of combinations, combinations create significant value for patients and healthcare systems as well.

This is reflected in Krka's global position, as we are currently ranked among the world's leading providers of cardiovascular combinations by volume. We see the combination as one of the most important drivers of future growth, supporting portfolio differentiation and long-term profitability.

They are not only an important growth platform, but also they demonstrate how Krka creates additional value through innovation. Continuous investment remains a key pillar of Krka's long-term strategy.

Our investments focus on expanding and modernizing manufacturing, development, and quality capacities. We are currently implementing several major projects here in Slovenia, then also in China and India, to support production.

During the first half, we continued upgrading production network with new packaging lines, robotic cells, expanding warehousing capacities, and modern infrastructure, further improving productivity, quality, and sustainability. A particularly important strategic project is our new production facility in India, which is progressing according to plan.

We're working very intense to complete construction by the end of the next year and to establish a state-of-the-art manufacturing and R&D site that will initially increase Krka's production capacity, which is right now 20 billion tablets, by approximately 3 additional billion tablets annually. Together with our fully operational joint venture in China and all other ongoing investment projects in Slovenia, this project will secure additional capacity which are important for the long-term growth of Krka.

Turning to the balance sheet, Krka continues to maintain a strong financial position. We continue to actively manage working capital with particular attention to inventories and receivables.

While inventories decreased slightly compared with the end of the year, they remain at a level that ensures reliable supply and enables us to respond quickly to market demand. Given the complexity of global supply chains, maintaining appropriate inventories remains an important competitive advantage, and we aim to increase our stocks all the time.

Trade receivables increased during the first half of the year, mainly reflecting the strong sales performance. However, it is important to add that collections remain unhindered, and the quality of receivables remains high, with 95% of receivables being insured by insurance company.

Turning now to the income statement, revenue increased by 7% to more than €1.1 billion. At the same time, gross profit grew significantly faster, rising by 12% and lifting the gross profit margin from 58% to 61%.

This improvement reflects a more favorable product mix, with a growing contribution from combinations, as well as continued improvements in operating efficiency. Operating expenses remained under control.

Selling and distribution expenses, R&D expenses, and general expenses all increased at lower rates than sales. As a result, operating profit increased by 20% to €309 million, significantly outpacing the revenue growth and further improving operating margins.

EBITDA reached €357 million, while the EBITDA margin remained close to 32%. Net profit increased by 5% to €260 million.

The lower growth of net profit compared with operating profit was primarily due to less favorable financial results, reflecting foreign exchange volatility during this period to a certain extent. Overall, we are very pleased with the improvement in gross and operating profitability.

The combination of good demand and improving product mix, successful new launches, and continuous efficiency improvements enable us to achieve one of the strongest profitability levels in Krka's history. Turning now to foreign exchange effects, Krka remains primarily exposed to movements in the Russian ruble, where we maintain a long position, while our exposure to the US dollar is generally short.

As a result, developments in these two currencies have the most significant impact on our results. Other currencies had no material impact on the group's results.

During the first half of 2026, exchange rate movements had an overall positive impact on Krka's results, contributing to a net financial result of €10.7 million. The ruble remained favorable, appreciating by 3.7% against the euro.

However, this positive impact was lower than in the same period last year. In the first half of 2025, the ruble appreciated by almost 29%, creating at that time an exceptionally strong positive contribution to the financial result and therefore, I would say, demanding comparison base.

As illustrated by the chart, short-term exchange rate movements related to Russian ruble can significantly affect individual quarterly or even yearly results. However, over longer periods, these effects tend largely to offset each other.

Hedging with ruble through financial instruments remains very limited due to sanctions. Therefore, we continue natural hedging wherever possible, and also use from time to time factoring in order to decrease our ruble exposure and manage currency and credit risk at the same time.

As I said, the overall currency impact contributed positively to profitability, although to much lower extent than in the exceptionally good or favorable first half of 2025. The first half results confirm Krka's ability to combine strong sales growth with operational efficiency.

Improved margins, manufacturing efficiencies, and well-controlled costs supported record EBITDA, EBIT, and net profit. The key message of this slide is very simple: we're not only growing, but growing more profitable.

The strong improvement in operating profit was driven primarily by business performance, while foreign exchange movements provided just an additional positive contribution rather than being the main source of earnings growth. Let me conclude with a bit broader view of Krka's long-term performance.

Here we have results for the last five years, and over the last five years, we have continuously expanded our business. Revenue has grown at a CAGR of 6%, then at the same time, profitability has remained at a very high level.

Our five-year average EBITDA margin exceeded 28%, while current EBITDA margins and EBIT margins are even higher. As a result, earnings per share have increased at an even faster rate than revenue, achieving a five-year compound annual growth rate of 7.3%.

This reflects not only consistent growth in sales, but also sustained improvements in profitability and value creation for shareholders. Our objective remains unchanged: to continue growing faster than the market.

Capital allocation remains one of Krka's key strengths. We continue to follow a stable dividend policy, distributing at least 50% of annual profits for dividends.

This year's dividend of €9.1 per share, approved by the AGM and paid to shareholders today, marks our 27th consecutive dividend increase and reflects a 10-year dividend CAGR of 13.1%. Over the last decade, we have returned more than €1.7 billion to shareholders through dividends alone, and the value paid today for dividends is €275 million.

At the same time, we continue with share buybacks. By the end of the first half, treasury shares represented 7.7% of total share capital, compared with 1.5% 10 years ago.

In 2025 alone, more than €61 million was allocated to share buybacks. Given our strong balance sheet, robust cash generation, and moderate leverage, shareholders have approved a new three-year buyback program.

The program is intended solely for the cancellation of acquired shares and is aimed at further enhancing earnings per share and return on equity. We believe that this balanced approach, combining dividends and share buybacks, remains the most optimum or effective way of creating long-term value for our shareholders.

Here we have some additional highlights related to Krka's share. The excellent first half also reflected in Krka's share performance.

Our share price increased by 23% and closed at €250 at the end of June, bringing Krka's market cap to €7.6 billion at that time. An important fact of Krka's equity story remains its stable shareholder structure, which provides long-term support for the share and contributes to lower volatility compared with many emerging market peers.

Looking ahead, which is the most important, our focus remains unchanged: delivering sustainable growth, maintaining financial strength, and creating long-term value for shareholders. Krka's long-term track record clearly demonstrates the strength and resilience of our business model.

Between 2005 and 2025, sales increased at an average growth rate of 7.2%, while net income grew even faster, at 9.1%, both outpacing growth in the global pharmaceutical market. This performance has been driven by a combination of expanding sales volumes, as you can see, this is precondition, a diversified product portfolio, which is very important, and strong market positions, as you can see from the right part of the slide, basically strong position across Central, Eastern, and South-Eastern Europe.

Today, Krka holds leading positions in many of its key markets, providing a solid foundation also for further development. Looking ahead, our strategy remains unchanged.

We will continue to strengthen our position in existing markets. We will add attractive growth markets and further develop our vertically integrated model, development capabilities, and our presence.

To conclude, the first half of 2026 confirms that Krka remains firmly on track to deliver its long-term strategic objectives. We continue to grow profitably, strengthen our market positions, invest in future development, and create value for shareholders.

Our guidance reflects confidence in the resilience of our business model and the opportunities we still see across our markets. We are targeting average annual sales growth of at least 5% while maintaining an EBITDA margin above 25%, supported by regular investments in R&D, manufacturing capacities, and product portfolio expansion.

With our strong market positions, vertically integrated business model, consistent investment in development and manufacturing, and proven ability to execute, we believe Krka is well-positioned to continue creating long-term value for patients, partners, employees, and shareholders. For 2026, we expect continued solid growth.

Sales are planned to reach €2,144 million. This is €103 million up on a year ago, or 5% more.

CapEx will also increase, and at the same time, we plan net profit at €405 million. The key message would be that Krka's growth story is built on consistency.

Over the past years, we have steadily increased revenue, profitability, and earnings per share, while maintaining one of the strongest margin profiles in the generic pharmaceutical industry. With this, I would end this presentation, and we can start with Q&A part of the webcast.

Thank you very much.

Thank you, Mr. Bratož.

We will now start with the Q&A session. You are most welcome to address your questions live by raising your virtual hand and you will be given the word.

Feel free to raise your virtual hand. Otherwise, we have the first question in chat from Mr.

Vladan Pavlović. The question is: "Can you comment on very strong gross margin in second quarter?

It is 62%. Is it sustainable or will it normalize towards lower level?"

Thank you, Mr. Pavlović, for interesting question.

Of course, we are doing everything to keep such a margin also in the future, but at the same time, we have to admit that these are exceptionally high as a result of really good product mix, then improvement in operational efficiency, and also favorable, I would say, currency movements at the end. The margins talking as just on a quarterly level are extremely good.

It will be hard to keep them as high as they are because there will be the third quarter, which is also always weaker. We believe that we do our best to be above the target that we have in our strategy or for this year, yes, but at the same time, such a high level of margins that we see only in second quarter will be very hard to keep on the long term.

Yeah.

Thank you. We have another question from Mr.

Bram Buring. Mr.

Buring, please go ahead with your question.

Hey. Thank you for the clarity on the margins.

That was my main question. In addition, let's say to that, your production is expanding in India.

The Indian rupee continues to weaken. Has this been a factor in the gross margin development over, say, the last year and a half?

Or would you say it's immaterial?

Uroš, maybe you can go ahead.

I would say this is pretty immaterial since, let's say, majority of the contracts are nominated in US dollars. Basically, the depreciation of Indian rupee has no direct impact on our profitability.

Dollars.

Future contracts in US dollars or in euros, and yeah, they do not affect, yeah.

Thank you. Then in Western Europe, there are two more questions.

In Western Europe, are you going to continue to be selective when participating in tenders? Or is that just a short-term?

No, no.

Yeah.

Thank you. We are always very, I would say, cautious when we decide for tenders, because specially in West European markets, the prices on tenders are pretty low.

That's also the fact that is going on in Germany or Italy or France. Of course, on the other hand, when our capacities will become much larger, then we will be again in a position maybe to be more eager to participate in some big tenders, because there is always effect of economy of scale.

Still, as you said, specially this year in Germany, we decreased our participation in tenders. Thanks to this, we, as you saw, were successfully kept the sales on the same level, the sales is flat, despite the fact that we decrease our offer in tenders.

On the other hand, it helped us to improve our profitability. The tenders are a tricky matter.

Yes, we will participate if we see the synergy that tender can help us building the market shares on this particular markets first, and secondly, also if tender quantities can help us to improve technology or, I would say, the effects of economy of scale.

Okay. Thank you.

Last question is, you had particularly strong growth in Far East and Africa and in China this quarter. Is that due to timing of shipments, or is that going to continue at that pace for the rest of the year?

This is the smallest region for us, as so the base is relatively low. This high growth is combination of many factors.

We are, I would say, very successful with our sales in Vietnam or South Africa. Here we are working regularly and very similar to approach then in comparison to some other traditional markets.

We have some more volatile markets such as Iran, which depends on the geopolitical situation. They want to order a lot of goods, especially antidepressants right now, but we don't want to offer the goods if we are not sure that the goods will be paid.

Then here we have China, where the growth was extremely high, but that was the effect of the season. We sold one important product which supposed to be sold even before, but it was not on stock.

It was just some change from the first quarter to second quarter. That's why these levels are pretty high.

They have to grow two-digit. This is what they have in their strategy, because they have to catch the other regions sooner or later.

For them the instructions are very clear. They need to grow much faster than the others.

Basically, we work systematically, but still, these are overseas markets. We quite often work there through partners, not always being there as with subsidiaries or as in other regions.

That's the combination of many facts. They supposed to grow two digits also in the future.

Thank you very much.

You're welcome.

We have another question, similar question regarding overseas markets, China, from Matija Štebe. He's asking: "You had very fast growth in China.

What is the outlook for the coming quarters in China, and what potential do you see your present in China in long term?"

China is very perspective market, of course, with 1.5 billion people. We are present there with almost 20 products right now, and we have even much more in our pipeline.

The market is very competitive, we launch products very selectively, only when we see, I would say, long-term benefits of it. That's why our sales is developing relatively slow.

You are right. During the first half, we generated almost €10 million sales in China with nice growth.

That until the end of the years, we will be somewhere close to 20, but below 20. Yes, and we will continue with two-digit growth also in the future.

Taking into account the number of potential inhabitants, the potential is much higher. We'll see in the quarters to come what will be the figure also for the next year.

We have time for another question or two. Feel free to raise your virtual hand and you will be given the word.

In meantime, we got another question in chat from Mr. Branko Kmetman.

He's asking: "Do you have a plan to join Slovenia Biotech Hills project?"

Thank you for this question. We are not member of this initiative, and this is only what can I answer you for the time being.

We have another question from Mr. Pavlović Vladan: "If SPCs is now at 30% or slightly higher, how much it can be in 5 years from now?"

I didn't catch what was the beginning of the question, the first part.

The first part, if the SPCs are now at around 30% or slightly more, yeah.

SPCs, yeah, okay. We will go towards 40% and 50%.

This is our future. This is something that is really of the highest importance for us globally from every perspective: from R&D perspective, from markets perspective, from healthcare professionals perspectives, from clinical research perspective.

This is something where Krka is the best and where we see also the potential for the future. We are growing with this combinations and also a lot of products are still waiting and in our pipeline.

We will take one last question from Mr. Matija Štebe.

He's asking: "You have quite large cash position. Do you have any plans to use this liquidity for investments or acquisitions?"

Here I would invite Uroš to answer this question.

Just today, let's say that roughly 30% reduction in cash pillow was recorded because we paid out the dividend. Nevertheless, let's say we have conducted many due diligence for certain M&A projects.

We have to admit that we are very selective and try to find the business that overlaps with our existing, and currently we have not found yet anything very attractive, whether at let's say valuation that would be attractive or that we would enter a business without significant risk. We are open to possibilities, but let's say the majority of our focus is to find a new markets while entering in the potential M&A, not so much the portfolio of new products as far as we have more than 1,000 different products.

Targeting potentially new markets is the main objective.

Thank you. Dear ladies and gentlemen, we have reached the end of today's session.

Thank you again for your participation. In case of any further questions, do not hesitate to reach out to our investor relations team.

The transcript of today's webcast will be available on our website in the following days. Thank you again for your participation and have a nice rest of the day.

Goodbye.

Thank you, and goodbye.

Goodbye.