Source: SBR d.o.o. - Slovenian Business Report
SBR, d.o.o.
Date: January 30, 2007

Manager of the Year

Jo e Colariè, Krka By Alja  Pengov Bitenc
Like Boško Šrot of Laško, Jo e Colariè, 51, of pharmaceutical company Krka
was an heir-apparent for a long time. But the new emperor and his empire
were cast after a completely different mould. Having succeeded Miloš
Kovaèiè, one of the most controversial CEOs this country has known, was
surely not easy regardless of the fact that there was no competition for
the top job once Kovaèiè retired.

Novo mesto-based Krka is a small wonder in its own right. A small
pharmaceutical company, which should have been taken over years ago by any
standard, is shooting way out of its league and is an extremely powerful
player in the field of generic pharmaceuticals. Targeting primarily
Eastern Europe and most notably Russia, it has established such a presence
in those markets that even industry giants must take Krka seriously. Its
power is way out of proportion to its actual size.

And while Miloš Kovaèiè was doing business in an unorthodox way (or was
unorthodox enough to say exactly how business is actually made), Jo e
Colariè set about doing his job the other way around. Contrary to Kovaèiè
he gives the impression of being a sombre and studious person. Being a
director of marketing and sales before getting the top job, he undoubtedly
looks at business from that particular point of view: sales, profits,
market shares and last but not least share prices.

If it was somehow expected that Colariè would continue the unprecedented
expansion of Krka into Eastern European markets, the unprecedented rise of
Krka’s share price wasn’t expected. Since becoming CEO in January of 2005,
Krka’s share rose a staggering 150 percent and that’s only with its
management going about their daily business! Imagine what would happen if
Krka would become the target of a takeover. Something that’s not likely to
happen anytime soon, as Colariè is convinced that his company’s shares
haven’t yet peaked, and that the government won’t sell such a profitable
company. He’s careful enough not to rule out a takeover, but at the same
time he points out that Krka is at present worth some EUR 2.2 billion,
putting it out of reach of all but the biggest competitors.

With 85 percent of its products sold abroad, Krka’s future is heavily
dependant on the state of its target markets. So far it looks good. In the
first half of this year Colariè and his team could take great pride in
raising sales figures by 25 percent, with profits rising by 23 percent
compared to the same period last year, closing the first half of the
fiscal year with 12.4 billion tolars of net profit. Sales in Russia
increased by 44 percent, sales in the EU rose as well, and Krka has
retained a 17-percent market share in Slovenia despite stiff competition.
No wonder Colariè was named Manager of the year 2006.

Jo e Colariè isn’t old, but he’s an old hand. He knows his company
inside-out, knows where his ship is headed and how he’ll get there. The
truth is his path was more or less set out for him, but apparently
investors like the way he’s running the show. For he is definitely running
it; Jo e Colariè and Krka are one of Europe’s leaders in the field of
generic pharmaceuticals, and are well poised to remain that for the
foreseeable future.


Krka Rank TOP 500: 9 Revenues: 486 million € EBIT: 117 million € Growth of
revenues (2004/2005): 19% Activity: Pharmaceuticals, generics

The Fastest Runner Up: Aleksander Svetelšek, Engrotuš

The jury for the Manager of the Year Award had a tough job this year in
choosing between two outstanding candidates: Jo e Colariè of the national
pharmaceutical firm Krka and Aleksander Svetelšek from Engrotuš, a
fast-growing Slovenian retailer from Celje. In the end Colariè won, but it
was a very close match.

Aleksander Svetelšek makes an excellent combination with Mirko Tuš, the
founder and the owner of Enrgotuš (see Leaders in the TOP 500 Special
Survey). Tuš is an entrepreneur with a strong vision, Svetelšek is a
capable, focused executive and a professional from head to toe. Results
are the best proof of how well a team works, and the company had 27
billion tolars of sales in 2000, the year before Svetelšek took over
management. Not only has the company increased its revenues to 108 billion
tolars or 450 million euros (its rank is 10 in the TOP 500) it has also
been thoroughly changed in its essence. >From an entrepreneurial network
of discount stores it has become a modern retail company, with large
flagship Planet Tuš shopping centers, complete with entertainment
facilities.

One of the company's main goals is to become the retail network with the
highest sales per employee in Europe. Or better said, it used to be the
company's goal. When Aleksander Svetelšek got the Golden Gazelle Award for
the best fastest growing company in Slovenia last year, he announced that
they have only one more European retailer to surpass (he omitted the name
of the company). With 21 percent of growth in 2005 and 333 new employees
the productivity goal should have been reached by now. Yet there's no
shortage of new challenges on Svetelšek's list of the tasks for the near
future: expansion on the Balkan markets, entry into the mobile phone
business, further development of a network of gas stations, keeping up
with its strong competitor in cinemas, and maintaining fast growth. That's
a lot even for the dream team of Tuš and Svetelšek. A rumored
reorganization of Engrotuš into a group might be a good idea, and should
probably start sooner rather than later.