Global companies made KRW 21M per employee last year

Operating profit per employee in 30 Korean affiliates of multinational pharmaceutical companies

Korea Otsuka Pharmaceutical has generated the highest operating profit per employee last year among Korean branches of multinational pharmaceutical companies.

 

Each employee at the multinational company has made 108 million won worth of operating profit.

 

On Apr.

 

21, an analysis on 30 multinational pharmaceutical companies in Korea surveyed audit reports submitted to the Financial Supervisory Service (FSS) and found the companies operating profit per employee.

 

Last year’s operating profit per employee in top multinational pharmaceutical companies (Unit: KRW 1 million) Source: FSS

Last year, 30 Korean branches of multinational pharmaceutical companies have generated overall operating profit of 115.8 billion won with total 5,620 employees.

 

Basically, respective employee has made average of 21 million won worth of operating profit, which is 10 million won less than in 2018 with 31 million won.

 

Operating profit per employee in multinational companies in Korea is approximately a half of the figure in Korean pharmaceutical and bio companies.

 

According to Daily Pharm’s survey on 30 companies with highest sales last year based on their business reports, each employee has generated average operating profit of 36.98 million won.

 

Fundamentally, the pharmaceutical industry is considered as an industry with comparatively low operating profit.

 

Its investment scale is exponential with R&D and sophisticated facilities, and the industry is actually labor-intensive with strong sales force.

 

And Korean affiliates of multinational pharmaceutical companies have unique structure of supplying finished pharmaceutical product from overseas headquarters, which sometimes lowers profitability against sales volume due to high total cost of goods sold.

 

Moreover, the profitability of many multinational companies in Korea is diminishing after their blockbuster drugs’ patents have expired, which also seems to have reduced operating profit per employee.

 

Among the surveyed companies, only Korea Otsuka Pharmaceutical has made over 100 million won operating profit per employee.

 

357 employees of the multinational company combined have reached operating profit of 38.5 billion won.

 

It adds to making operating profit of 108 million won per employee.

 

Although the company’s healthcare product sales has been impacted by the Koreans boycotting Japanese goods, Korea Ostuka Pharmaceutical’s prescription drug sales has soared.

 

First time since its establishment in Korea, its sales has marked 180 billion won and the operating profit was increased by 23.0 percent than the previous year.

 

Korea Otsuka Pharmaceutical is one of a few multinational pharmaceutical companies with its own manufacturing facility in Korea.

 

When Janssen Korea closes a plant in Hyangnam City, Korea Otsuka Pharmaceutical’s facility in Hyangnam City and Janssen Korea’s vaccine manufacturing plant in Songdo Bio Cluster would be the only two pharmaceutical manufacturing facilities in Korea owned by multinational companies.

 

Generating 91 million won per employee last year, UCB Korea was ranked on the second place.

 

As of late last year, the company reported the total number of employees was 36.

 

Although the operating profit has gone down by 8.4 percent (30 million won) compared to 35.88 million won in 2018, UCB Korea has continued to make surplus with a limited number of employees and maintained the relatively higher productivity.

 

Stuck in the reds for three consecutive years, GlaxoSmithKline (GSK) has turned around and finally generated surplus last year and made 18 million won per employee.

 

The operating profit per employee in AbbVie Korea, Janssen Korea, Sanofi Pasteur, Allergan Korea and Guerbet Korea has grown by over 10 million won last year compared to the previous year.

 

On the other hand, Alcon Korea has made operating profit of 2 million won per employee last year, not even reaching 10 million won.

 

Menarini Korea, Janssen Vaccines, Galderma Korea, Roche Korea and Merck KGaA have ended up making deficit last year.

 

Excluding the companies in the reds, 11 out of 23 surveyed companies have made operating profit per employee last year lower than the year before.

 

In 2018, Sandoz Korea marked the highest operating profit per employee with 178 million won, but the figure plummeted last year and marked 31 million won per employee.

 

Plunged by approximately 40 million won from 112 million won in 2018, Kyowa Kirin Korea has only made 74 million won operating profit per employee last year.

 

As for Genzyme Korea, the operating profit in 2018 was at 62 million won per employee, but the last year’s figure was omitted from the report due to the merge with Sanofi-Aventis.