2016 Integrated Report

Value creation model

Pelion's philosophy underlying its operations and approach to business is based on ethical values. Its mission, which gives meaning to Pelion's existence, is focused on people (“We are here to ensure a long and quality life for our Customers and Patients”). They are both reflected in our unique view on managing relations with our environment (the stakeholders). It is not a company surrounded by various interest groups. It is the Patient who is at the centre and the Pelion family companies are there to help the Patient, directly or indirectly. This is the fundamental ethos of service inherent in pharmacy and medicine from the very beginning. We put people at the centre of what we do, because we care for and draw on the pharmaceutical tradition. The Pelion family is in turn surrounded by numerous groups and persons affected by and affecting this family. The Pelion family listens intently to their expectations and concerns. Pelion strives to address those expectations and concerns on an ongoing basis to ensure that its relations with stakeholders are as good as possible and based on mutual trust and honesty.

Our stakeholder map illustrates the position given to the Patient in our approach to business.

Natural environment

Objective:

To permanently look for new opportunities for minimising adverse impact on the environment in all areas of the Company's operations.

Desired nature of relations:

Increased awareness, care and responsibility

Forms of dialogue:

  • Environmental policy
  • Ecoproject Pelion
  • Ecoteam
  • Code of Ethics

NGOs

Objective:

To engage in the improvement of people's health.

Desired nature of relations:

Active dialogue

Forms of dialogue:

  • Initiatives of the DOZ Fundacja dbam o zdrowie Foundation (Facebook, bulletin, www.fundacja.doz.pl website)
  • The 'Together We Can Accomplish More' project, meetings with project participants
  • NGO cooperation platform
  • DOZ Marathon Łódź
  • Interviews, commentaries by experts

Capital market players

Objective:

To increase Company value through its permanent growth and ensure transparent management through regular issue of reliable financial and non-financial information on the Company's operations.

Desired nature of relations:

Trust and mutually beneficial communication

Forms of dialogue:

  • General Meeting
  • Current, interim and annual reports
  • Quarterly conferences – presentation of results
  • One-on-one and group meetings with analysts and investors
  • Participation in conferences and meetings
  • Ongoing communication (email, phone)
  • Newsletter of Pelion Investor Relations
  • pelion.eu website and companies' corporate websites
  • Twitter account

Suppliers, subcontractors and trading partners

Objective:

To become a preferred trading partner and cooperate with companies that share our values.

Desired nature of relations:

Partnership

Forms of dialogue:

  • Meetings and conferences
  • Newsletters
  • Code of Ethics
  • pelion.eu website and companies' corporate websites
  • Ongoing communication (email, phone)
  • Annual Report/CSR Report

Customers

Objective:

To ensure the highest professional standards and utmost care in service provision.

Desired nature of relations:

Satisfaction and trust

Forms of dialogue:

  • Customer satisfaction survey
  • Conferences and regular meetings
  • 'Bez Recepty' monthly
  • 'Farmakoekonomika Szpitalna' magazine
  • Pharmbook.pl website
  • pelion.eu website and companies' corporate websites
  • Training
  • Newsletters
  • Hotline
  • Email, phone contact
  • Code of Ethics
  • Annual Report/CSR Report.

Employees and their families

Objective:

To offer fair terms of employment in a friendly work environment, foster employees' professional and personal development, and promote healthy lifestyles.

Desired nature of relations:

Loyalty to the company, security

Forms of dialogue:

  • Employee consultations
  • Internet, Electronic Noticeboard, Goldenline profile
  • 'Nasza Firma' quarterly about the Company
  • Company bulletins and newsletters
  • Regular management staff meetings and road shows
  • Staff events
  • Trade unions
  • Social media
  • Code of Ethics and Ethics Officer
  • 'Your Idea Is a Plus For Us' ('Idea na plus') initiative
  • Pelion Wellness Programme
  • PULS Programme Newsletter
  • Annual Report/CSR Report

Media

Objective:

To follow a transparent and active information policy with the use of new technologies ensuring quick and broad access to information.

Desired nature of relations:

Trust and cooperation

Forms of dialogue:

  • Press announcements and conferences
  • Everyday communications and comments
  • pelion.eu website and companies' corporate websites
  • Interviews, commentaries by experts>
  • Annual Report/CSR Report

Research and academic community

Objective:

To share knowledge and cooperate for professional development in the region

Desired nature of relations:

Cooperation and mutual development

Forms of dialogue:

  • Sharing knowledge and experience
  • Job placements and internships (the 'Youth in Łódź' programme and ‘Career Programme’)
  • Participation in conferences
  • Open day events
  • Participation in the Business Board of the Faculty of Management at the University of Łódź
  • Participation in the Mentoring Programme of the University of Łódź
  • Media

Pelion family

  • Pelion
  • PGF Urtica
  • DOZ
  • Consensus
  • ALE
  • Pharmapoint
  • UAB NFG
  • UAB NFG
  • epruf
  • Eubioco
  • Urtica
  • UAB NFG
  • Drogerie Natura
  • BSS
  • Pharmena
  • Pharmalink

Patients

Objective:

To take utmost care of Patients' health to the extent it is directly affected by the company's operations on the healthcare market in Poland and abroad, and in particular to promote the highest standards of drug distribution, enhance drug availability to patients and constantly improve the system of the pharmaceutical care provided.

Desired nature of relations:

Trust in the brand

Forms of dialogue:

  • Pharmaceutical care at pharmacies
  • DOZ Magazyn dbam o zdrowie
  • Magazyn 60+
  • Websites: doz.pl, recepta.pl, medme.pl, cafesenior.pl, leku.pl
  • Social media
  • Website vaistine.lt
  • appteka.eu application
  • Profiles in social media
  • Newsletters
  • Communication relating to DOZ Marathon Łódź

Thanks to an approach to business based on the concept of sustainable development we can view our operations and business model from the perspective of transforming and building six types of capital, which are not only employed, but also transformed.

Financial capital

All the funds used to finance operations.

Key data

  • Total assets: PLN 3,783.6m
  • Equity: PLN 686.1m
  • Revenue: PLN 9,178.0m
  • Net profit attributable to owners of the parent: PLN 5.0m
  • EBITDA: PLN 130.5m
  • EBIT: PLN 72.6m

Objective

Continued cooperation and reliable communication with capital market participants and lenders, as well as effective receivables management secure financial liquidity. The unique knowledge of finance management on the medical services market prompted the establishment of Consensus sp. z o.o.

Risks

  • Credit risk
  • Currency risk
  • Interest rate risk

Working capital

All our infrastructure, warehouse network, order picking line, distribution and logistics network, vehicle fleet, a chain of company-owned pharmacies and pharmacies working with Pelion, manufacturing plant, a hospital.

Key data

  • More than 10,000 pharmacies supplied
  • More than 70 local warehouses supplied
  • Products sourced from over 850 manufacturers
  • Over 1,200 company-owned and franchised pharmacies in Poland and Lithuania
  • 870 hospitals supplied
  • More than 280 Natura beauty stores, both company-owned and run on an agency basis
  • Four million patients served in pharmacies across Poland and Lithuania every month
  • 1.5 million customers served in Natura beauty stores every month
  • 9 million visits to the doz.pl website every month

Objective

Development of a proprietary model for cooperation with external partners, such as the Healthy Choice programme.

Use of innovative solutions and communication channels through which Patients can order online medicines they need and collect them at the pharmacy of their choice.

Risks

  • Technology risk

Social capital

Participating in treatment and protection of human health. Building relationships based on trust and integrity with both customers and suppliers. Involvement in the lives of local communities and recognition as a good and trustworthy neighbour. Efforts taken to preserve traditions of the pharmacy profession.

Key data

  • Around four million patients served in Poland and Lithuania every month
  • 46 individuals under the care of the DOZ Foundation, and support for 35 organisations
  • PLN 737,000 donated by the Foundation to charities
  • The DOZ Marathon Łódź attended by 5,500 runners
  • 15 monographs of Poland's old pharmacies
  • 3 historical pharmacies under our care

Objective

Dialogue with local communities and NGOs to jointly find solutions to problems related to the quality of life and health of the community members.

Risks

  • Health and safety risk
  • Market risk (loss of pharmacy locations)
  • Regulatory risk
  • Social risk

    Natural capital

    Helping to reduce negative environmental impact, in particular ensuring safe disposal of expired medicines.

    Key data

    • Almost 50 tonnes of collected medical waste
    • 1,147 collections of expired medicines for disposal from the pharmacies participating in the Healthy Choice partner programme

    Objective

    Partnership with pharmacies participating in the Healthy Choice programme and drawing their attention to the importance of proper disposal of expired medicines

    Risks

    • Environmental risk (including inventory storage, improper waste management, including expired medicines)

The network managed by UN Global Compact comprises over 9,000 largest companies and 5,000 institutions from around the world; they engage in discussions about sustainable development with governments and scientific institutions at local and international levels.

Kamil Wyszkowski Director General of Global Compact Poland

Kamil Wyszkowski - Director General of Global Compact Poland

“The network managed by UN Global Compact comprises over 9,000 largest companies and 5,000 institutions from around the world; they engage in discussions about sustainable development with governments and scientific institutions at local and international levels. The debate is held on the UN Business Action Hub, a platform where we arrive at specific solutions to major challenges, such as corruption, adherence to the highest ethical standards, environmental protection and respect for human rights at the workplace. Most important of all, however, is the fact that the organisations, individually or in coalitions, join in the pursuit of the UN Sustainable Development Goals in their day-to-day activities. Innovativeness and effective operation of businesses positively contribute to resolving specific social and environmental issues. By offering access to medicinal products, the pharmaceutical sector is likely to literally provide solutions to problems of individual persons or groups of people. It is not only about R&D efforts which lead to finding appropriate substances, but it is also about affordability and geographical availability of pharmaceuticals. Even the most effective medicine is of no social value if it is not available to patients. In Poland, this is especially true in the context of the country’s efforts to eliminate the black market in pharmaceuticals and to curb organised economic crime, which hamper legal business activity by disrupting competition, affecting the availability of medicinal products and increasing the risk of unauthorized access to high-quality drugs.”