Good afternoon, ladies and gentlemen. It is a great pleasure to welcome you all to today's conference call.

I will present our preliminary 2025 results, full-year estimates actually, and the 2026 outlook, and this will be followed by the renewed 5-year Krka Group strategy for 2026-2030, which reflects our long-term commitment, long-term vision and commitment to sustainable growth. After the presentation, we will open the floor for your questions.

Thank you for your interest in Krka, and let's begin. There are a few key messages I would like you to take away from this webcast.

Firstly, this past year was a very successful one. We have marked a notable milestone, exceeding €2 billion in revenue for the first time in history.

Sales amounted to €2 billion 41 million and increased by 7% in most key markets and across all product and service groups. Prescription medicines once again remained the most important group, contributing the most to the increase in sales figures.

Secondly, sales growth led to increased profitability. We achieved a strong EBITDA margin of 27.4%, exceeding our strategic forecast and last year results.

Net profit reached an all-time high of €401 million, this is up 13% year on year. This increase was driven primarily by an improved product mix, again with a shift towards newer products and again towards with a shift towards more combinations products, and was also partly supported by positive foreign exchange effects from Russian ruble.

Lastly, during 2025, we successfully launched 17 new products, most of which are highly promising single-pill combinations. We in Krka are aware that long-term sales growth also depends on extension of the product portfolio, and last year, we manufactured nearly 19 billion finished products.

Krka's activities are geographically very well diversified. We offer our high-quality affordable medicines in over 70 markets worldwide, and we organize our operations into six regions.

Eastern Europe remains our largest region, accounting for 35% of sales. Russia leads with €422 million in revenue, supported by strong 13% growth and local production covering about 70% of sales for this market of 145 million people.

We hold number the position number one among foreign generics in Russia, and we rank first in the pharmacy segment. Growth was also recorded in other regional markets, including Uzbekistan, plus 8%, and all other markets, such as Belarus and others.

Sales in Ukraine remained at the previous year's level, this is at €96 million, with 5% volume growth. Central Europe is our second largest region, representing 20 almost 23% of sales, with Poland being the largest market in this region, growing by 12% in value and 9% in volume.

We rank third among foreign generics in Poland, and our Warsaw production site manufactures selected products for all Krka markets. Sales also increased in other countries in this region, this includes Czechia, Hungary, Slovakia, Lithuania, Latvia, and Estonia.

Western Europe follows with nearly 18% of sales, where Germany remains the key market with 4% growth despite strong price competition. We achieved growth in most other regional markets of West European region, with the highest increases in the Scandinavian countries, Finland, Portugal, and Belgium.

South-East Europe and Slovenia together contribute approximately 21%, driven mainly by good sales in Romania, Slovenia, and Croatia. Our domestic market recorded an 8% increase, and we are the market leader with about 7% market share in value and 25% market share in volume.

Overseas Markets, our smallest region, account for less than 4% of sales, and this is the only region, the smallest one, with a slight and I would say temporary decline, mainly due to geopolitical instability in Iran, we all know. We believe that during the first quarter and first half of the this year, we will already be with the indexes above 100 also in this region.

Prescription medicines remain our core business, accounting for 83% of total sales and providing us, I would say, stability. Please note that sales of prescription medicines increased for €125 million, or by 8% year on year.

With this, we actually reinforced our leadership in this segment. The second big important segment for us is OTC.

We have strong brands, mainly for cough and cold relief, as well as for pain management and vitamins. This is an important and complementary business to our Rx portfolio.

Business-wise, OTC products can also serve us as a door opener when negotiating with pharmacies. Regarding vet products, we focus mainly on companion animals, particularly cats and dogs, and there is currently strong and growing market for this segment, and products for companion animals already represent 70% of our total vet business.

As you can see on your right, we have diversified product portfolio. Cardiovascular medicines are the largest group, representing over 50%, including treatments for hypertension, cholesterol, anticoagulation.

This is followed by central nervous system, therapies for depression and mental health disorders. Then we have gastrointestinal medicines and a range of painkillers.

Then we have anti-infectives, antidiabetics, and oncology drugs. All these products are dominated by treatments for by treatments for chronic diseases, which drive long-term demand and ongoing revenue.

Coming to R&D, I would just say that R&D is a strategic priority for Krka, with 10% of sales reinvested annually and constantly, year after year. We have over 800 in-house experts engaged in research and development activities, and Krka is actively developing 170 new products.

Approximately 60% out of our R&D budget, this is, as I said before, 10% of our revenues, is allocated to new product development, while 40% of this money supports life cycle management, focusing on improved quality standards, regulatory compliance, and optimizing production processes. Last year, we launched 17 new products, mostly in cardiovascular, but also from gastro and diabetes area.

We also registered and launched two OTC products and two vet. Beside these products, we also completed 900 registration procedures, and we also obtained 15 patents in different countries.

All together, we have 250 valid product patents right now. Krka is recognized as a leading, innovative brand generic manufacturer with in-house research and development capabilities.

By utilizing state-of-the-art equipment and technologies, we develop advanced pharmaceutical formulations with unique strengths and high therapeutic value. We are the leader of single-pill combinations, with over 150 launched up to date, and many are based on innovative approach, and they are supported by clinical trials, and these products deliver strong therapeutic outcomes and represent one of the most important and high-potential segments of our portfolio.

Our approach to product life cycle managers focuses actually on continuously improving improvements of our portfolio through the strategic addition of new and new single-pill combinations. As we know, many elderly patients require multiple drugs to achieve treatment goals, but increasing the number of necessary drugs doesn't often necessary the drugs often decreases the patient ability to follow the treatment.

Therefore, already the medical guidelines for hypertension and hyperlipidemia recommend combination as an important solution of this issue, that is why we are so much focused on this opportunity. This strategy not only strengthens our clinical offering, but also helps us to mitigate pricing pressures, because our deep understanding of patient needs and prescribing practices allow us to tailor solutions that are both clinically effective and commercially sustainable.

As far as investments are concerned, we are mainly investing in technological improvement of production processes, R&D, and quality assurance. Last year, we allocated nearly €96 million to investments, and we plan to allocate €140 million this year.

On this slide, we listed some of the important investment projects. For instance, we replaced 16 packaging lines, we installed robotic cells, and we finished the construction of the technologically advanced wastewater treatment plant here in Slovenia.

Strategic investments also include joint ventures in China and India. We can say that our China Chinese joint venture is fully operational, leveraging long-term leased production facilities to supply both Chinese and European markets.

They already have an EU GMP certificate, which is precondition to be able to produce for the markets outside China. Recently, we strengthened our cooperation with Laurus Labs, our long-term strategic API partner, by establishing Krka Pharma Private Limited, a joint venture with headquarters in Hyderabad in India.

Krka holds a 51% stake and Laurus 49. We have purchased land, and we already began construction of a state-of-the-art facility that will include finished dosage forms manufacturing and also R&D center, and this is scheduled for completion in approximately 2 years from now.

These investments will secure for us Krka's ability for long-term growth. It will also enable us to expand our global reach and strengthen innovation capabilities.

In the first phase, we will secure additional production capacity of 3 billion tablets in India, with a final goal of 10 billion tablets. Here we have preliminary financial results.

Krka generated €2 billion and 41 million in revenue last year, delivering 7% year-on-year growth, supported by solid demand across all key markets. EBITDA totaled €560 million, up 7%, with a good and stable margin about 27%, reflecting cost control, I would say, on a high level and operational efficiency.

EBIT increased by 9%, driven by improved product mix and continuous productivity enhancements. Net profit grew by 13%, outpacing revenue growth and demonstrating strong operating leverage.

Earning per share is projected at €13.14, an increase of 13%, further strengthening value creation for shareholders. Overall, the 2025 outlook highlights Krka's ability to maintain robust profitability, strong cash generation, and consistent growth, even in a competitive environment.

Here we have margins, and again, all margins are pretty stable and high. On the long perspective, we maintain EBITDA margin well above strategic threshold.

The same is with other, I would say, KPIs related to profitability. All of them increased compared to the year before.

We are improving operational efficiency at all levels. Selling and distribution expenses, as well as R&D and general costs, have been well contained, and they did not exceed revenue growth.

That's all contributed to overall margin stability. The last, but not the least, economy of scale is also important for us.

This year, we are approaching 20 billion finished dosage forms to produce and sell. Here we have the currency movement, and ruble remains the primary driver of foreign exchange volatility, as illustrated in the chart.

Despite historical fluctuations, 2025 has been favorable, with the ruble showing consistent strength during the year because the average exchange rate was 6.4% higher and the currency has appreciated since the beginning of the year. The impact of the other currencies was marginal, and we also continue to hedge our short US dollar exposure with using financial instruments.

As we have long position of rubles, receivables less payables, and hedging of this exposure with financial instruments is not possible in the last almost 4 years, mainly due to sanctions, which are both on the Russian and Western sides. Therefore, we use natural hedging whenever possible and occasionally also we use factoring in order to reduce our exposure.

In 2025, foreign exchange movements had a positive impact on Krka's net financial result, with the net financial result totaling €28 million. This slide illustrates the sustained and robust growth in both revenue on the left and EBITDA on the right.

Over the last 5 years, you can see revenue has achieved an annual growth of 6% that was supported by strong performance, as you saw before, across key markets and all product segments. EBITDA margin remains solid, highlighting the efficiency of our operations.

During the same period, the net profit has grown faster, reflecting improved efficiency and effective cost management. The growth was nearly 7% annually.

In summary, we can say that consistent growth in sales and profitability over the last 5 years has delivered also the strong growth of earning per share, which has achieved a CAGR of about 7%. Dividend policy is extremely important part of our capital allocation, and we remain committed to our long-term and stable dividend policy, allocating every year at least 50% of annual profits to dividends.

Last year, this was a value of €252 million distributed to dividends. Our dividend has risen continuously for more than 25 years already.

This approach has resulted in an average dividend yield of 14% per year over the past 10 years, and nearly €1.4 billion were distributed to the shareholders. Many investors value, beside dividends, also buybacks.

Therefore, we continue to execute our share buyback program, which is in place in accordance with shareholders resolution, also until the next shareholders meetings. We currently hold 7.4% Krka's our own shares.

Our shares are listed on two stock exchanges, in Slovenia and also in the Warsaw Stock Exchange. We have rather stable shareholder structure, with more than 47,000 shareholders.

The structure is like it's stated on this pie chart: Slovenian private investors hold 41.7%, almost 42%; the state owns 27%; international investors have about 18%, if I mention just three the biggest groups. The price of Krka share Krka's share increased by 46% in 2025, and the total return of Krka share in 2025 amounted to 52%.

The price the price of our share further increased by more than 10% since the beginning of this year, and our current market cap is well above €7 billion. On the left-hand side of the slide, you can see our key material sustainability topics, with accessible healthcare and product quality and patient safety at the very top of our importance.

Here I would just like to say that last year, we actually we we, for the first time in our history, we fulfilled the European Sustainability Reporting Standards, which were included into sustainability statement, which is published in our annual report. For the first year for the third year already, we achieved a strong ESG ratings by S&P Global, placing us well above the pharmaceutical industry average and higher than most our competitors.

For 2026, we expect continued sound solid growth. Sales are planned to reach €2 billion 144 million, this is plus €103 million on the year ago, or 5% more.

CapEx will increase to €140 million to support our vertically integrated business model and to support long-term development. We plan net profit at €405 million, and net profit growth is projected to average 5.6% over the last 5-year period.

This concludes the first part of my today presentation, where I we reviewed our performance in 2025 and financial outlook for 2026. I would end with the with the statement that strong figures and positive projections reaffirm our confidence in the resilience of our business and our ability to deliver sustained value for shareholders.

Now, let's turn to the future very briefly. In the next couple of slides, I will outline the Krka Group development strategy.

I will highlight the key facts and strategy objectives that will guide our growth in the years to come. This slide shows why Krka's strategic focus on chronic diseases and small molecules is the correct direction for sustained success.

We see at least key main trends strongly supporting this focus. First one, rising life expectancy: people are simply living longer, leading this to more years spent managing chronic conditions.

Secondly, approximately half of all the adults are affected by common long-term diseases, which requires daily affordable and reliable treatments. On third place, tablets and capsules remain the most trusted delivery method globally, due to their simplicity, scalability, and effectiveness.

These trends confirm that our broad and high-volume portfolio is portfolio product portfolio is not only relevant today, it's built for the long run. In this table, you can see the market outlook across different therapeutic areas, shown both as expected consumption and projected annual growth in the last column.

The stronger the strongest growth is expected in oncology and obesity treatments, driven by new therapies and innovation, often very complex and high-cost medicines. Krka's power lies somewhere else.

We're strongly present in chronic disease treatments, especially cardiovascular, central nervous system, gastrointestinal disorders, diabetes, and pain relief. As you can see, all of these are important, and all of these, and all these therapies, are needed for millions of patients worldwide, and all these areas are expected to continue growing in the years ahead.

This slide reinforces our previous point. When we compare biologics with small molecules, a clear pattern can be seen.

Small molecules dominate by volume: 90 almost 98% of all volumes in all ATC groups are related to small molecules. Biologics account for large share of value, and to some extent volume, only in certain therapeutic areas, as you can see, these are, for instance, oncology and immunology.

These are specialized, high-cost treatments for complex diseases. Across most other therapeutic areas, particularly those addressing chronic diseases, biologic represents only a small fractions of total use.

Now we move to Krka's core business, prescription generics, which are present, in our case, 85% of our revenues. On this slide, you can see sales of generics by markets, divided by volume, these are green columns, and value, these are blue.

This clearly illustrates the significant gap between high-volume penetration and lower value penetration markets. The average share of generic consumption in volume approaches 70%, and the costs account for only 30% of total medic medicine expenditures.

On the left side, you can see less developed countries; on the right, more developed countries. We can conclude that, or the countries with lower level of generic penetration, such as Spain or even Italy, which is not seen here.

We can conclude that producers of generic medicines play an essential role in ensuring sufficient medicine quantities and the timely delivery of highest quality products. This slide shows the critical components for our long-term strategy: per capita spending and projected market growth across our key markets.

Growth is driven by several key trends. First, governments are promoting use of generics in order to decrease the healthcare costs.

Secondly, emerging markets are improving access to healthcare. As you can see, mature markets like Germany or Slovenia are expected to grow slightly below 5%, this is basically due to highly regulated environments, but high-growth markets such as countries like Uzbekistan, Romania, Ukraine, are forecast to grow substantially faster, 10%, 8.5%, 8.3%, and also Poland and Russia are expected to grow about 5% annually.

Strategic conclusion out of this is that we must maintain strength in our traditional markets, but at the same time, we have to aggressively also utilize opportunity in faster-growing regions. The generic market is, in our view, much more mature now.

Today, the key advantage is the ability to deliver enough quality products and to be able to regularly deliver these goods. It means that here I talk about established products, not just about the new.

It's not longer just about the new launches or patent expiries. These still matters, that's why we launch new products, but supply and reliability matter even more, because many markets face shortages, which are caused by supply chain issues, tighter regulations, and stricter quality control.

That's why maintaining a compliant and existing portfolio is so important or even crucial. Based on all this, we shaped a clear three-pillar strategy, because this helps everyone to present our goals simply and clearly.

The first pillar is providing access to medicines. It means that we supply, we ensure continuous availability of high-quality, safe, and effective, innovative, and affordable generic medicines.

The second pillar is vertical integration, which connects research and development activities with production, quality, and investments. The third pillar is value creation, which covers all activities that drive strong performance and positive impact for stakeholders.

Just let's have a close and quick look at these pillars. The first one is providing access to medicines.

It means that we provide high-quality medicines for over 100 million people in over 70 markets. It means that we are a strong regional player.

When we say region, we mean Europe in a broad sense: the complete EU, Balkans, Eastern Europe, and parts of Central Asia. Our aim is to exceed the local generic market growth and stay among top five in our key markets and therapeutic areas.

We focus on the markets like Russia, Poland, Ukraine, Germany, Slovenia, Romania, Hungary, Czech Republic, Slovakia, and Croatia, where we are among top five. We also aim to rank among the top 10 generics in Western European markets.

We use our own marketing and sales network. We have almost 4,000 medical representatives.

We also focus on our own brands. Our leading therapeutic areas are, as I said, cardio, gastro, central nervous system, then antidiabetes, and pain.

We are also focusing on oncology. Our second pillar is vertical integration.

It means that we constantly invest in order to enhance our production capacities. Vertically integrated model actually enable us to manage the full product life cycle, to reduce different kind of risks, and to react fast to new opportunities.

It means that our lead times are very short, we want to we want to be able to react on the market opportunities. We also So most of our productions is still in Slovenia, and almost all R&D is located at our headquarters.

In addition to domestic production sites, we operate major production sites in Croatia, Poland, Germany, and Russia, and we also collaborate with strategic partners and basically joint ventures in India and China to increase this adaptability this this output. This second pillar ensures, I would say, steady supply, because it focus very much on product availability.

Then we have our third and last pillar, which connect all other goals and initiatives. Our key objectives are profitability, people, and sustainability.

Here we have two main goals. We aim for long-term profitability with an EBITDA margin above 25%, and we aim to ensure at least 5% growth in our sales.

Let me briefly highlight the key updates of our strategy. It could be put like this: globalization of capabilities, expanding outsourcing of production to certain extent and development to joint ventures and strategic partners in Asia, with this we leverage efficiency and scale while maintaining quality through our vertically integrated business model.

Secondly, supply reliability as a strategic asset: today, it's not only about launching new products, it's also about ensuring volumes, continuity, and I would say, a reliable deliverability. We are placing even greater emphasis on resilience and large-scale production.

Then life cycle management redefined: adapting to even more complex regulatory landscape, managing the full life cycle of established and new products under increasingly demanding compliance frameworks. In the fourth place, I would say, therapeutic expansion: we are entering, beside previously mentioned core therapeutic areas, also new areas, such as heart failure and obesity, which are important in the later period of our strategy.

Then innovation within generics: we are leading in single-pill combinations and advancing complex formulation and peptides, pushing the boundaries of what generics can offer. These priorities are incorporated in our three-pillar framework, as I said: access to medicines, vertical integration, and value creation.

Ladies and gentlemen, as it was shown in the first part of my presentation, our current strategy is not only solid, it's delivering concrete results. The performance in 2025 confirmed that Krka's direction is working.

We're growing faster than the market, broadening our portfolio, and strengthening our position across key regions and key therapeutic areas. This slide shows our performance from 2005 until 2025, and during this period, we have grown faster than the market.

That's why our renewed strategy for 2026-2030 is not a revolution, it's rather an evolution, but it's built on a strong foundation. It's again we refined it was refined where needed, and we stayed focused on key priorities.

These are the following: we are a sales-driven company. Through our own network, we expect further growth in both volume and value.

Profitability remains a top priority. We never we don't chase sales at the cost of of margins.

We grow mainly organically, making our business more stable and still faster than the market. Ladies and gentlemen, with this, I will end today presentation, and I will I hope that you have gained a clear insight into our results for 2025, also our outlook for 2026, and also on updated strategy.

Thank you for your interest.

Hi. Can you hear me?

Yes, we can hear you.

Hi. Good day to everybody, and thank you for the presentation.

I would just like to ask how long is your position in rubles or in euros in Russia? Because I think it was lastly reported in the annual report from last year, maybe can you give us update on that?

Maybe how is the situation in Ukraine? Because we see the sales are flat, and I see that all the other markets are evolving great, maybe just a feedback on is this growth is going to happen again next year?

Thank you very much, that's it.

Thank you, Mrs. Pevec, for all these three questions.

Regarding first one, our long position in rubles or in Russia, actually, this position is rather constant one or stable one, similar to the one explained in the annual report. As I said, from time to time, we use factoring in order to decrease it, but generally, this exposure is, I would say, yeah, it's on the level of previous years.

Regarding the situation in Ukraine, as you said, the sales is flat, which is actually a good result, because I also mentioned that we managed to grow 5% in quantities. It means that we improved our distribution rate, and it means that taking into account the fact that there is less population if we take into account the country itself comparing to the year before, then the value of the sales on the similar level as it was, it's rather a good trend and result.

The third question was regarding sales in general. Yes, we believe that these good trends will continue during 2026.

Far, we cannot disclose anything, but we can say that after the first couple of weeks, we can see that the sales is going on as it was planned also during this very first days of 2026.

Could you repeat, do animal

Generally, the animal health segment is developing very well overall. Of course, there can be some changing from quarter to quarter, but especially this part which is for companion animals is growing.

I don't know by heart how is it in the West European markets, but we can check and send you more precise answer after the session.

I can already answer more precise with regard to the last question, animal health sales actually we grew in West Europe in 2025 versus 2024. Basically, yeah, we grew almost in all regions.

In Central Europe by 8%, in Southeast Europe by 16%. The results for animal health are rather good.

There was an increase of the sales.

Goodbye, thank you.