Master Pharm, a contractual manufacturer of dietary supplements, has completed a review of strategic options. The company decided to focus on organic growth in the current market situation.
Master Pharm will focus on organic development
In November 2018, Master Pharm decided to review potential strategic options. The aim was to assess the market situation and possible forms of cooperation. The company wanted to choose the most advantageous way of achieving its long-term business objectives and find potential additional synergy effects.
The main option considered was to attract an industry investor who would support the development of the company. At the end of November Master Pharm even signed a confidentiality agreement with a potential investor to perform due diligence. This investor was a company from the Master Pharm industry. Ultimately, however, it turned out that the company will focus on organic growth. In the opinion of the management board, this will be the most advantageous solution for Master Pharm in the current market situation.
Decrease in revenues
Master Pharm specialises in contract manufacturing of dietary supplements. It also produces supplements under its own brand name. In the first three quarters of 2019, the company’s revenues decreased by 2% year on year and amounted to PLN 50.8m. This decrease was mainly due to the shift of orders from the first half of 2019. Revenues in the analysed period were also affected by a 30% year-on-year drop in sales in the subsidiary Avet Pharma. This is a result of introducing previously planned changes in sales and discounting management.
According to the PMR report, the dynamics of pharmacy and non-pharmacy sales of dietary supplements was similar in 2018, with sales outside of pharmacies recording a higher growth. In 2018, the market of dietary supplements was driven by probiotics and vitamin D3-based dietary supplements, in addition to own brands. In PMR’s opinion, these categories will continue to develop dynamically in 2019 and subsequent years.