The Year in Brief

Tamro Group is the leading pharmaceutical wholesaler and distributor in Northern Europe. We operate in the Nordic countries and in the Baltic States. In Russia we own 18 % of local distributor ZAO Rosta. Our average share of the pharmaceutical wholesaling market in this area is around 47%. Tamro Group is engaged in the pharmaceutical retail trade in Norway, Estonia, Latvia and Lithuania. In these countries Tamro’s aim is to operate as an integrated wholesale-retail company.

Tamro’s core business is pharmaceutical wholesaling, distribution and retail trade. Our customers in the wholesaling and distribution sector include pharmacies, hospitals and other healthcare institutions. The operations are based on close co-operation with our principals, i.e., manufacturers of pharmaceuticals and other healthcare products.

Tamro’s core business is supplemented by Tamro MedLab, which imports, markets and sells a broad range of basic and specialised healthcare products, laboratory products, diagnostics and biotechnical products and equipment. Tamro MedLab’s customers include healthcare facilities and industrial, research and educational laboratories.

Tamro’s shares are listed on the Helsinki Exchanges. In 2003 Tamro became a subsidiary of the pan-European pharmaceutical wholesaler PHOENIX Group. Tamro’s head office and domicile are in Finland.

Main events 2003

• The market growth in the Nordic countries declined remarkably compared to previous years, largely due to the increased use of generic drugs based on mandatory substitution. In addition, a number of top-selling brand products were forced to significantly reduce prices as their patents expired. The overall pharmaceutical market growth in the Nordic countries was 4% compared to 2002. Tamro’s market share in the Nordic pharmaceutical wholesale market was 47 %. In the Baltic States, the market growth was higher than in the Nordic countries, remaining in the region of 8%.

• The deregulation of the pharmaceutical market continued. In Norway, following the example of Denmark, the sales of OTC products were allowed in supermarkets. In Sweden, Apoteket AB’s retail monopoly has been publicly challenged, and a liberalisation of OTC sales has been demanded.

• Tamro Group’s net sales grew by 1.6% to EUR 4,169 million. The Group’s operating profit was EUR 78.0 million and the full-year operating profit margin grew to 1.9%. All business units except Nomeco and Tamro Lithuania exceeded their 2002 results. Tamro Group’s pre-tax profit rose to EUR 69.0 million.

• Tamro strengthened its position in pharmaceutical retailing. In Norway, Tamro’s ownership in Apokjeden, a pharmacy chain of 204 pharmacies by the end of 2003, increased to approximately 80%. In Estonia, Tamro formed a pharmacy chain called Apoteek1, including Tamro’s 22 fully-owned pharmacies and a number of independent pharmacies. In Lithuania, Tamro acquired its first pharmacy in August and the number of Tamro-owned pharmacies totalled 9 at year-end.

• In August 2003, Tamro’s major shareholder PHOENIX made an agreement with Apoteket AB to buy its 19.3% holding in Tamro. This agreement triggered the redemption obligation referred to in Tamro’s Articles of Association and led to redemption procedures based on the Market Securities Act and the Company Act. As a consequence of this Tamro became a subsidiary of PHOENIX. At year-end PHOENIX owned 99.0% of the Tamro shares.