Krka, d.d.
The best pharma company you’ve never heard of
Not a small- or micro-cap, rather one of the leading generic pharmaceutical companies in the world: Krka (Bloomberg ticker KRKG SV) is a €5 billion Slovenian company that develops, produces and sells prescription pharmaceuticals, non-prescription products, and animal health products marketed under its own brands.
Founded more than 70 years ago in 1954 as Krka Pharmaceutical Laboratory in Novo Mesto and listed since 1997, today it has revenues close to €2 billion and treats 100 million people in more than 70 countries every day in various therapeutic areas.
Krka’s biggest shareholder is the Slovenian government with a 27% stake, held either directly (~7%) or indirectly via both Kapitalska Družba (~11%: wholly owned by the state, it provides supplementary funding for pension and disability insurance) and Slovenski Državni Holding (~9%: the Slovenian Sovereign Holding which manages the state’s ownership interests in more than 50 companies). The rest is free float, although a group of local banks owns – not in concert - ~10%, with a significant presence of local retail investors (>40%): international investors own less than 20%.1
Krka is listed on the very small Ljubljana Stock Exchange, with a secondary listing on the Warsaw Stock Exchange since 2012 under ticker $KRK.WA. For international private investors it’s not easy to access the Ljubljana Stock Exchange: one platform with access to the Slovenian market is Interactive Brokers.
Quick facts about Slovenia
Slovenia is a small country of just 2.1 million inhabitants nested between Italy, Austria and Croatia: it joined the European Union in 2004 and adopted the euro as its currency in 2007.
Its GDP per capita is around €25k, up 60% since 2000: it’s only around 70% of the Euro area average, but Slovenia is by far the richest of the Slavic nations by GDP/capita and one of the most developed and stable economies among the former communist countries of Eastern Europe. Current GDP growth is somewhat anaemic as in the rest of Europe, but the forecast is for +2.2% this year. On the other hand, government debt to GDP is limited (~70%, better than the Eurozone average) and the inflation rate (chart below) has been reduced to 2% from the peak of 10% in 2023.