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Budapest, 3 August 2020
Richter Group
Report, H1 2020
H1 2020
2
Report, H1 2020
Highlights Consolidatedsales
278,692 HUFm
Operating margin
18.8%
Net profit*
60,531 HUFm
EPS
326 HUF
Gross margin
58.3%
+15.4%
+53.8%
+53.1%
* Net income attributable to owners of the parent.
67%
5%
10%
10%
8%
H1 2020
3
Report, H1 2020
Corporate review
On 18 June 2020 Richter informed its shareholders that in Gedeon Richter Plc.
the infulence (voting rights and ownership ratio) of the Hungarian State
represented by HNMA Inc. has decreased from 25.25% to 15.25.%
Simultaneously the influence (voting rights and ownership ratio) of Tihanyi
Foundation increased from 0% to 10% in Gedeon Richter Plc.
International
investors
Hungarian
State Holding
Company*
Maecenas
Universitatis
Corvini
Foundation
Domestic
investors
* The legal and technical part of the share transfer is ongoing.
Tihanyi
Foundation
H12019 H12020
Pharma W&R
Consolidated
sales by main
business
segments
4
Report, H1 2020
+18.3%
+6.2%
Pharma
Wholesale
and retail
+15.4%
241,522 HUFm278,692 HUFm
29% 14% 33% 20% 4%
Revenue by
strategic pillars
(%)
5
Report, H1 2020
Branded
genericsBiosimilarsTraditionals Cariprazine
33% 15% 36% 13% 3%
WHC
H12020
H12019
Key products (1/2)
6
Report, H1 2020
Cariprazine
Central Nervous System
Terrosa®
Biosimilars
Turnover
HUF 45,103m(EUR 130.5m)
+79.9%
USA -
HUF 7,946m one-off
sales related milestone
linked to the sales of
Vraylar®
Ongoing phase III
clinical trials – MDD
adjunctive therapy
Singapore and Thailand -
Reagila®
in co-operation with Mitsubishi
Turnover
HUF 4,005m(EUR 11.6m)
Rapid sales growth:
EU: ~70%
Japan: ~30%+229.6%
Key products (2/2)
7
Report, H1 2020
WHC
Nőgyógyászat
Bemfola®
Nőgyógyászat
March 2020: another PRAC review
procedure – suspension of sales of
the product.
Turnover
HUF 6,887m (EUR 19.9m)
Esmya®
WHC
-17.8%
Due to the pandemic situation most
of the fertility centres were closed for
almost three months.
27% 9% 29% 23% 12%
CIS EU USA Other
global
markets
HUN
Sales by
geographies (%)
8
Report, H1 2020
HUF 229.9bn
HUF 194.4bn
+18.3%
H12020
H12019 30% 10% 32% 17% 11%
0
10 000
20 000
30 000
40 000
50 000
60 000
Hungary EU15 Russia USA
H12019 H12020
Sales by main
regions (HUFm)
9
Report, H1 2020
+1.4%
+7.1%
+0.2%
+64.3%
HUFm
(HUFm) H12019 H12020 Change
Hungary 20,159 20,436 277
EU15 31,080 33,272 2,192
Russia 41,362 41,441 79
USA 32,225 52,948 20,723
Strengths and
challenges in key
markets
10
Report, H1 2020
USA
Significant increase in royalty income
related to the sales of Vraylar®
EU15
Higher turnover of oral contraceptives
and Terrosa®
EU12
Significant forestalling ahead of lockdown
Russia
Purchasing power under pressure
Carry-over effect of 2019 price cuts
China
Delisting of Cavinton with effect from 1
January 2020
One-off sales related milestone income
linked to Vraylar®EU15
Decline in Bemfola®
Loss of Esmya® sales
Consolidated
Financials –
Highlights
11
Report, H1 2020
HUFbn Change % EURmas % of
total revenues
Total revenue 278.7 +15.4 806.2
Gross profit 162.5 +18.2 470.0 58.3
Profit from operations 52.3 +52.1 151.4 18.8
Profit for the period* 60.5 +53.1 175.1 21.7
HUF Change % EUR
EPS (diluted) 326 +53.8 0.94
* Net income attributable to owners of the parent.
54%
55%
56%
57%
58%
59%
60%
61%
62%
0
100
200
300
400
500
2015
2016
2017
2018
2019
H1
20
19
H1
20
20
COGS Gross profit Gross margin
Increasing
gross profit and
margin (HUFbn)
12
Report, H1 2020
HUFbn
56,9%
58,3%
Increasing inventories eroded the gross
profit
Increases of wages in Central and
Eastern Europe
A significant increase in royalties
receivable linked to the sales of Vraylar®
(HUF 18,394m)
Higher demand experienced linked to
some of our products (Groprinosin –
pandemic related forestalling)
Favourable FX environment
(%) H12019 H12020
Pharmaceuticals 67.9 68.4
Wholesale and retail 10.0 10.3
Increasing turnover of certain higher
margin OCs and EC
China – delisting of Cavinton,
Russia – compulsory price adjustment
0%
10%
20%
30%
40%
50%
60%
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
2015 2016 2017 2018 2019 H12019 H12020
S&M costs S&M percentage of sales
S&M costs
(HUFm)
13
Report, H1 2020
HUFm
0%
5%
10%
15%
0
10 000
20 000
30 000
40 000
50 000
2015 2016 2017 2018 2019 H12019 H12020
R&D costs R&D percentage of sales
R&D costs
(HUFm)
14
Report, H1 2020
Split of R&D spending (%) – H1 2020
HUFm
25% 30% 28% 17%
CNS original
research (including
cariprazine)
Biosimilars WHC Branded
generics
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
2015
2016
2017
2018
2019
H1
20
19
H1
20
20
Profit from operation Operating margin
Increasing operating
profit and margin (HUFm)
15
Report, H1 2020
HUFm
Significant Vralyar® royalty and
milestone income (similar amount of
milestone income in the base period)
14,2 %
18,8%
(%) H12019 H12020
Pharmaceuticals 17.6 23.0
Wholesale and retail 0.2 0.3
Increase of gross profit
Robust increase of sales in the
pharmaceutical segment
Impairment loss of HUF 4,202m linked to
the WHC portfolio
Factors impacting
pharma segment
operating profit
16
Report, H1 2020HUFm Increase Decrease Total
17
Report, H1 2020
The effects of the
COVID-19 pandemic
Our employees
Maintaining the health
of our collegaues
remains our most
important aim
Partial travel
restrictions
Social distancing,
provision of protective
gear, travel allowences
Supporting remote
work and providing the
necessary equipment
Continuous and up-to-
date internal
communication
Sales
Decrease in demand
due to limitation of
doctor-patient
contact
Reduction in supply
due to stricter
regulation of
promotional activity
based on personal visit
Management Financials
Increase in productivity
Increase in inventory
level
Vertically integrated
business model,
flexible response
Solid foundations:
capital strength, no
loans, constantly
positive cash flow
Mitigation of foreign
exchange risks via
natural hedging
