Richter GroupQ1 2014

Richter Group

Interim Report, Q1 2014 7 May 2014

Summary – Q1 2014Q1 2014

Summary Q1 2014

Consolidated sales: -1.0% (EUR), +3.1% (HUF)− significant sales decline in Russia and Ukrainesignificant sales decline in Russia and Ukraine− currency devaluation in the region+ good growth in EU15 countries and in other CIS region

Profit for the period*: -52.9% (EUR), -51.0% (HUF)p ( ), ( )− negative balance of Other income and expenses − net financial income - unrealised financial items – significant loss− weakening RUB exchange rateweakening RUB exchange rate

22

*Net income attributable to owners of the parent

Consolidated financial highlightsQ1 2014

Consolidated financial highlights

HUF Change EUR Changeg g

Total revenues 88.5bn 3.1% 287.1m -1.0%

P fit fProfit from operations 10.3bn -32.5% 33.3m -35.2%

Profit for the period* 9 3bn -51 0% 30 3m -52 9%Profit for the period 9.3bn -51.0% 30.3m -52.9%

EPS (diluted) 50 -51.0% 0.16 -52.9%

*Net income attributable to owners of the parent

3

Geographical composition of Group salesQ1 2014

Geographical composition of Group sales

Hungary Hungary

Russia Poland

RussiaPoland

11%

7%28%

11%

6%22%

Q1 2013 Q1 2014Romania RomaniaUkraine12%

6%

13%5%

EU10

Other CIS

Ukraine

R W

EU10Other CIS

RoW8 %

6%

10%

7%

2%3%2%3%

Latin America

3 %

9%

13%

8%

4% 4%2%

EU15USA

RoW China EU15USALatin America

T t l T t l

China

2%

*Including Croatia

Total: HUF 85.8bnEUR 289.9m

Total: HUF 88.5bnEUR 287.1m

+ 3.1% (HUF) - 1.0% (EUR)

44

Including Croatia

**Including Hong-Kong

***Restated in respect to exclude Latin Ameirca.

P&LQ1 2014

P&L

HUFmQ1 2014

Change %

EURmQ1 2014

Change %

as % of total revenues

Total revenues 88,527 3.1 287.1 -1.0

Gross profit 55,526 1.1 180.1 -2.9 62.7

S&M expenses (27,209) 1.7 (88.2) -2.4 30.7

A&G expenses (4,752) -5.9 (15.4) -9.9 5.4

R&D expenses (11,741) 6.8 (38.1) 2.7 13.2

Other income and other expenses (1,560) n.a. (5.1) n.a. 1.8

Profit from operations 10,264 -32.5 33.3 -35.2 11.6

Net financial income (1,150) n.a. (3.7) n.a. 1.3

Profit for the period* 9,342 -51.0 30.3 -52.9 10.6

*Profit attributable to owners of the parent

5

Increasing gross profit, decreasing gross marginQ1 2014

Increasing gross profit, decreasing gross margin

250 000

- Significant sales decline in Russia and UkraineWeakening RUB/EUR

HUFm 62.7%64.0%

40%

50%

60%

150 000

200 000

- Weakening RUB/EUR exchange rate

- Increasing proportion of

10%

20%

30%

50 000

100 000wholesale and retail segment

+ Devaluation of HUF exchange0%0

2007 2008 2009 2010 2011 2012 2013 13Q1 14Q1

Gross profit Gross margin

Devaluation of HUF exchange rate compared to EUR

+ Increase of turnover in EU15 countries and in other CIScountries and in other CIS region

6

Decreasing operating marginQ1 2014

Decreasing operating margin

25%70000

HUFm

Decreasing gross margin

Lack of milestone incomes

15%

20%

40000

50000

60000

11.6%

17.7%

Negative balance of Other income and expenses incurred

5%

10%

10000

20000

30000

p− claw back related liabilities

Increasing R&D expenditure0%0

2007 2008 2009 2010 2011 2012 2013 13Q1 14Q1

Profit from operation Operating margin

g p

7

Pharmaceutical sales*Q1 2014

Pharmaceutical sales

Key drivers of growth:

EU15 countries and other CIS

Female healthcare

Successful product launches

*87% of turnover originates from outside of Hungary

8

g g y

8

HungaryQ1 2014

Hungary

Turnover *

Stabilising pharmaceutical market

HUFbn

30

40

Turnover *

Sales increase: 6.9% in HUF

HUFbn

10

20Successful product launches

0

10

2008 2009 2010 2011 2012 2013 13Q1 14Q1

*Turnover of the pharmaceutical segment

9

EU – composition of sales*Q1 2014

EU composition of sales

Traditional EU member states

44%

− strengthening our position in key Western-European markets

− own gynaecological sales and marketing network

56%

Poland, Romania, EU10**

− well established in the region for decades

− own specialized sales network*Turnover of the pharmaceutical segment p** Including Croatia

10

EU15Q1 2014

EU15

Turnover*

26.3% sales increase in EUR EURm

100

120

140

Turnover*

Recently established S&M network

EURm

40

60

80

100

Female healthcare products: Richter OC portfolio, acquired

0

20

2008 2009 2010 2011 2012 2013 13Q1 14Q1

p , qOCs, Esmya®

*Turnover of the pharmaceutical segment

11

Poland, Romania, EU10Q1 2014

Poland, Romania, EU10

Increasing generic competition

Turnover*

Increasing generic competition

Price erosionEUR

150

200

Turnover*

Poland: – 14.4% decrease in PLN

EURm

50

100– Lack of flu epidemic –Groprinosin sales decrease

02008 2009 2010 2011 2012 2013 13Q1 14Q1

Poland Romania EU10**

Romania:– increasing sales levels

(+3 9% in RON)(+3.9% in RON)– significant delays in payment

*Turnover of the pharmaceutical segment**Data of 2012 adjusted with Croatia

12

CISQ1 2014

CIS

Turnover*

Sales decrease (-16.6% in EUR) EURm

400

500

Turnover*( )

Ukraine

EURm

100

200

300− Political uncertainty− UAH devaluation

02008 2009 2010 2011 2012 2013 13Q1 14Q1

Russia Ukraine Other CIS

Russia− RUB devaluation− Slow down of Russian economy

*Turnover of the pharmaceutical segment

13

RussiaQ1 2014

Russia

Sales decrease

Turnover*

Sales decrease(-5.6% in RUB; -21.7% in EUR)

Significant weakening of EURm

300

400

Turnover*Significant weakening of RUB/EUR exchange rate inQ1 2014 – 16.4%

EURm

100

200Destocking at the wholesalers

0

100

2008 2009 2010 2011 2012 2013 13Q1 14Q1

Increase of manufacturing and warehousing capacities

*Turnover of the pharmaceutical segment

14

Ukraine, Other republicsQ1 2014

Ukraine, Other republics

Turnover*

Ukraine− 20.7% decrease (USD)

USD

150

200

Turnover*− political and economic

turmoil− UAH devaluation

USDm

50

100

Other republics− 23 0% increase (USD)

02008  2009 2010 2011 2012 2013 13Q1 14Q1

Ukraine Other CIS

23.0% increase (USD)

*Turnover of the pharmaceutical segment

15

USAQ1 2014

USA

Turnover*

Sales increase (USD 3.4m)

USDm

160

200

Turnover*

Significant proportion of gynaecology – 79%

USDm

80

120

Sales increase – Plan B

0

40

2008  2009 2010 2011 2012 2013 13Q1 14Q1

*Turnover of the pharmaceutical segment

16

ChinaQ1 2014

China

Dynamically expanding pharmaceutical market

From 2013 JV operates with Richter majority stake

Sales network: 225 medical representatives

Sales in Q1 2014*: EUR 10 2mSales in Q1 2014*: EUR 10.2m

*Including Hong-Kong

17

Latin AmericaQ1 2014

Latin America

Regional expansion:− BrazilBrazil− Mexico

Female healthcare products in focus

Sales in Q1 2014: EUR 6 4mSales in Q1 2014: EUR 6.4m

18

Pharmaceutical sales by therapeutic areasQ1 2014

Pharmaceutical sales by therapeutic areas

12%

OtherCentral nervous system

12%

24%6%

19%Muscle relaxants

Q1 24%4%Gastrointestinal CardiovascularQ1

2014

35%

Gynaecology

Total: EUR 245.9m

19

Female healthcare sales by regionQ1 2014

Female healthcare sales by region

1206% CEE

Hungary

CIS

EURm

60

80

10026%6%

13%CIS

0

20

40

31%

5%10%

4%5%

EU15

Ex-Grünenthalportfolio

China

Latin America

Gynaecological sales Non‐gynaecological sales

USA

RoW

Total: HUF 26.9bnEUR 87.1m

2020

Female Healthcare: Esmya® - gradual launches IQ1 2014

Female Healthcare: Esmya gradual launches I.

Reimbursement grantedReimbursement granted

Country Launch Reimbursed Country Launch ReimbursedGermany Q1 12 Q1 12

United Kingdom Q2 12 Q2 12

Austria Q2 12 Q4 12

Czech Republic Q2 12 Q3 13

Belgium Q3 13 Q3 13

France Q3 13 Q3 13

Denmark Q4 12 Q4 12

Norway Q4 12 Q4 12

Hungary Q2 12 Q1 13

Spain Q4 13 Q3 13

Canada Q3 13 Q3 13

Finland Q4 13 Q4 13Hungary Q2 12 Q1 13

Sweden Q1 13 Q1 13

Slovakia Q3 12 Q1 13

Finland Q4 13 Q4 13

Luxemburg Q3 13 Q4 13

Switzerland Q4 13 Q4 13

Slovenia Q4 12 Q2 13

Netherland Q3 12 Q2 13

Ireland Q1 14 Q1 14

Bulgaria Q4 12 Q1 14

21

Female Healthcare: Esmya® - gradual launches IIQ1 2014

Launch without reimbursement

Female Healthcare: Esmya gradual launches II.

Country LaunchPoland Q2 12

Country LaunchTurkmenistan Q4 13

Baltic States Q3 12

Romania Q3 12

Portugal Q3 12

Ukraine Q4 13

Croatia Q1 14

Armenia Q1 14Portugal Q3 12

Russia Q2 13

Belorussia Q4 13

Armenia Q1 14

Uzbekistan Q1 14

Serbia Q1 14

Georgia Q4 13

Kazahstan Q4 13

Tajikistan Q1 14

Moldova Q1 14

22

Sales networkQ1 2014

Sales network

1800

staff

1200

1400

1600

800

1000

1200

200

400

600

02006 2007 2008 2009 2010 2011 2012 2013 13Q1 14Q1

CIS CEE Hungary EU15 China

23

Wholesale and retailQ1 2014

Wholesale and retail

W&R sales contributions is 17% of total sales

72% of the W&R turnover originates in Romania

2424

Ownership structureQ1 2014

Ownership structure

31 March 2014

Domestic investors

7.16%International

investors67.59%

Hungarian State Holding Company

25.25%

2525

Q1 2014

Thank you for your attention!y y

26

AppendixQ1 2014

Appendix

Exchange rates

27

Evolution of currency exchange ratesQ1 2014

Evolution of currency exchange rates

320

340

HUF

280

300

240

260EUR/HUF

USD/HUF

200

220

180

28

Evolution of currency exchange ratesQ1 2014

Evolution of currency exchange rates

EUR

50

52

EUR

46

48

44 RUB/EUR

40

42

38

29

Exchange ratesQ1 2014

Exchange rates

At i d dAt period end31.03.2014 31.12.2013 30.09.2013 30.06.2013 31.03.2013

EUR/HUF 307.06 296.91 298.48 295.16 304.30

USD/HUF 223.38 215.67 221.06 226.18 237.36

RUB/HUF 6 27 6 55 6 80 6 91 7 65

Average

RUB/HUF 6.27 6.55 6.80 6.91 7.65

Q1 2014 M12 2013 M9 2013 H1 2013 Q1 2013

EUR/HUF 308.4 296.8 296.5 295.9 296.1

USD/HUF 225.0 223.4 225.1 225.1 224.0

RUB/HUF 6.4 7.0 7.1 7.3 7.4

30