Q1 2012
Interim Report, 2012 Q1 10 May 2012
Richter Group
Q1 2012
Pharmaceuticals
Pharmafarm: wholesale (Romania)
Gedeon Richter Farmacia: retail (Romania,
120 pharmacies)
Russia: Gedeon Richter RUSGreenfield investment (1996)
Romania: Gedeon Richter RomaniaAcquisition (1998)
Poland: GR PolskaAcquisition (2002-2008)
India: Richter ThemisJoint venture (2004)
Germany: Richter-Helm BiologicJoint venture (2007)
Parent company: Gedeon RichterFounded: 1901
Wholesale and retail
Other
A number of companies rendering services
+ further minority interests in wholesale and
pharmacies
Switzerland: PregLemAquisition (2010)
Leading pharmaceutical group in the region
Q1 2012
3
Key financial data
HUF Growth EUR Growth
Sales 82.0 bn 15.8 % 276.9 m 6.4 %
Operating profit 15.4 bn 50.1 % 51.8 m 37.8 %
Net profit* 16.8 bn 49.9 % 56.6 m 38.0 %
EPS (HUF, EUR) 905 50.8 % 3.06 39.1 %
* Profit attributable to owners of the parent
Q1 2012
4
Key market developments
CIS
− Russia
predictable economic environment
significant increase in sales
preshipments
− Ukraine
political, economic stabilization
sales increase
− Other republics
decreasing sales
good performance of wholesale & retail
Q1 2012
5
Key market developments
Central and Eastern Europe
− austerity measures in healthcare
− sales growth in key markets
Western Europe
− Esmya® market launch – Germany, United Kingdom
− expanding female healthcare sales network
− austerity measures in healthcare
− increasing competition in the generic business
Hungary
− unfavourable regulatory measures
− sales decrease
Q1 2012
6
Key market developments
USA
− further decline in drospirenone related revenues
Cariprazine
− successful phase III trials: schizofrenia, bipolar mania
− registration in 2012 Q4
Q1 2012
11%
8%
12%
6%
6%
32%
10%
7%
3%
7
Geographical composition of Group sales
Total:
HUF 70.8 bn
EUR 260.2 m
Total:
HUF 82.0 bn
EUR 276.9 m+ 6.4 % (€)
2011
Q1
EU15
Hungary
Poland
Romania
EU9
Other
countries
Other CIS
Ukraine
USA
Russia
2012
Q1
Hungary
Russia
Poland
Romania
EU9
EU15Other
countries
USA
Other CIS
Ukraine
5%
13%
7%
13%
7%
10%5%
5%
7%
4%
29%
Q1 2012
8
Composition of pharmaceutical sales
by therapeutic areas
Muscle
relaxants
Gastrointestinal
Other
Gynaecology
Central nervous
system
Cardiovascular
Total: EUR 241.1 m
2012
Q1
14%
25%
28%
4%
7%
22%
Q1 2012
9
CIS
Substantial increase in
sales (15.7% EUR)
Strong sales increase in
Russia and in Ukraine
(preshipments)
Stabil economic
environment
* Turnover of the pharmaceutical segment
Turnover*
EURm
Q1 2012
10
Russia
Substantial increase in
sales (17.9% EUR)
Significant preshipments
Efficient promotional and
marketing activities
Increase of manufacturing
and warehousing
capacities
Turnover*
EURm
* Turnover of the pharmaceutical segment
Q1 2012
11
Ukraine, Kazakhstan, other republics
Ukraine
− outstanding sales increase (47.4% USD)
− large preshipments
− stabil political and economic climate
Kazakhstan
− significant sales decline
− regulatory changes
Other republics
− 1.4% decrease (USD)
Turnover*USDm
* Turnover of the pharmaceutical segment
Q1 2012
12
EU – composition of sales*
Traditional EU member states
− strengthening our position on
key Western-European
markets
− own female healthcare sales
and marketing network
Poland, Romania, EU 9
− well established in the region
for decades
− own specialized sales network
35%
65%
* Turnover of the pharmaceutical segment
Q1 2012
13
Western – Europe
Recently established sales and marketing network
Female healthcare products
Richter OC portfolio + oral contraceptives acquired from
Grünenthal
Esmya®
− marketing authorization
− market launch (Germany, UK)
Q1 2012
14
Poland, Romania, EU9
Turnover growth
Unfavourable regulatory
environment
Poland:
– sales growth of 17.9 % in PLN
– low stock levels at year-end
Romania:
– turnover growth of 4.5 % in
RON
– efficient marketing activities
vs. significant payment delays
Turnover*EURm
* Turnover of the pharmaceutical segment
Q1 2012
15
USA
Declining sales levels
(-34.8% USD)
Significant proportion of
female healthcare – 92 %
Decreaseing drospirenone
related profit sharing
USDm
Turnover*
* Turnover of the pharmaceutical segment
Q1 2012
16
Hungary
7.2 % sales decline (HUF)
Unfavourable macroeconomic
and industry related
environment
Disadvantageous
amendments implemented to
price regulation and
reimbursement system,
further price decreases
Successful new product
launches
HUFbnTurnover*
* Turnover of the pharmaceutical segment
Q1 2012
17
Female healthcare – therapeutic focus
Full range of female healthcare products
Generic and original clinical product development
Product group with higher than the average gross margin
Expansion of our Western-European presence
− expanding sales and marketing network
− market launch of Esmya® (Germany, UK)
− Grünenthal OC portfolio
− generic product launches, continuous renewal of the product portfolio
Q1 2012
Sales and marketing in Western Europe
Existing distribution network
Future sales opportunities
Q1 2012
0
5
10
15
20
25
30
35
Female healthcare sales (HUFbn)
Other sales (pharma) (HUFbn)
19
Female healthcare sales by region
6%
27%11%
7%
31%
Total:
HUF 20.2 bn
EUR 68.3 m
2011
M12
Hungary
CEE
EU15
Other countries
CIS
USA
18%
Grünenthalportfolio
HUFbn
Q1 2012
20
Sales network
0
200
400
600
800
1000
1200
1400
1600
2005 2006 2007 2008 2009 2010 2011 2011 Q1 2012 Q1
CIS CEE Hungary EU15
staff
Q1 2012
21
Key financial data
Change
* Profit attributable to owners of the Parent
Q1 2012HUFm
Q1 2011HUFm HUFm %
Total revenues 82,006 70,839 11,167 15.8
Gross profit 50,502 43,089 7,413 17.2
Profit from operations 15,355 10,228 5,127 50.1
Net financial income 2,156 1,759 397 22.6
Profit for the year* 16,752 11,175 5,577 49.9
Total assets and total equity and
liabilities
702,044 579,280 122,764 21.2
Capital and reserves 498,421 442,492 55,929 12.6
Capital expenditures 2,699 2,937 -238 -8.1
Cash and cash equivalents 136,266 66,470 69,796 105.0
Q1 2012
22
Operating expenses and margins
Sales and marketing expenses
− 27.2% of consolidated turnover
− 19.1% increase (HUF)
Administration and general expenses
− increased by 23.6%
Research and development expenses
− 11.8% of consolidated turnover
− increased by 16.7 %
Other income and other expenses
− two significant one-off incomes
Gross margin
60.8%
61.6%
Operating margin
14.4%
18.7%
Q1 2012
Q1 2012 Q1 2011
Unrealised financial items 5,189 2,397
Reassessment of currency related trade receivables and trade payables 2,330 (1,506)
Reassessment of currency loans (72) (110)
Reassessment of credit 3,114 1,796
Reassessment of other currency related items 994 2,207
Unwinding of discounted value related to liability in respect of PregLem (1,094) -
Reversal of assessment of forward exchange contracts as of 1 Jan 249 (64)
Result of unrealised forward exchange and swap contracts (332) 74
Realised financial items (3,033) (638)
Result of realised forward exchange contracts (11) 107
Exchange losses realised on trade receivables and trade payables (1,205) (925)
Exchange losses on conversion (1,900) (153)
Dividends 2 1
Net interest income 517 308
Other (436) 24
Net financial income 2,156 1,759
23
Financial income
HUFm
Q1 2012
24
Evolution of currency exchange rates
150
170
190
210
230
250
270
290
310
330
31
.03
.20
11
30
.04
.20
11
31
.05
.20
11
30
.06
.20
11
31
.07
.20
11
31
.08
.20
11
30
.09
.20
11
31
.10
.20
11
30
.11
.20
11
31
.12
.20
11
31
.01
.20
12
29
.02
.20
12
HUF/USD
HUF/EUR
Q1 2012
25
Ownership structure
31 March 2012
Hungarian State
Holding Company
Domestic
investors
International
investors
64.0%
25.2%
10.8%
Q1 2012
Thank you for your attention!
Q1 2012
Appendix
Q1 2012
2011
Q1
2011
Q2
2011
Q3
2011
Q4
2011 2012
Q1
EUR/HUF
period end 265.8 265.6 292.1 311.1 311.1 295.6
average 272.3 264.7 272.8 303.2 280.0 296.2
USD/HUF
period end 187.0 183.4 215.7 240.7 240.7 221.6
average 198.9 182.3 192.9 224.7 201.0 225.4
28
Exchange rates