Chemical Works Of Gedeon Richter Plc · BET:RICHTER
Chemical Works Of Gedeon Richter — Gedeon Richter — Q1 2023 Earnings Presentation
29 slides from Chemical Works Of Gedeon Richter's earnings presentation, May 12, 2023
Slide 1: Gedeon Richter Earnings Report Q1
Gedeon Richter Earnings Report Q1 Chief Executive Officer presentation May 12th, 2023
Slide 2: Financial Highlights
Financial Highlights 39.2 HUFbn 210 HUF -12.3 HUFbn Net Profit1 EPS Free Cash-flow +5.8% +5.5% n/a 54.1 HUFbn 58.9 HUFbn 14.4% EBIT2 Clean EBIT3 Return on Equity4 44.4% 59.1% -1.5%p 209.7 HUFbn 60.7% 177.8 HUFbn Consolidated sales Gross margin Pharma sales +24.8% +3.6%p +31.4% 1Profit for the period
Slide 3: Key messages of the quarter
• Renewed presentation format to provide more detailed view on the performance of our business units and underlying trends. • All four divisions are ahead of plan with revenue growth balanced across markets and brands. • Financials were lifted by currency movements, which were still in our favour in
Slide 4: Profits from core operations steadily increasing
Profits from core operations steadily increasing Guidance • On track with the annual guidance EBIT • Year-on-year clean EBIT increased on an above average rate (24%) even after adjustment of FX effects. • Quarterly EBIT growth without FX effects is 10.1% as no Windfall tax was recorded in 2022 Q1; W
Slide 5: Special items affecting Q1 financials
Special items affecting Q1 financials Windfall tax Reallocation of G&A overheads Sales&Marketing General & Administrative +13.5% +62.7% 29.0 36.9 12.2 32.5 30.4 9.6 +21.4% +27.1% -3.9 7.5 7.3 3.4 Estimated Prorated Q1 Accounted Q1 2022 2022 adjusted 2023 2022 2022 adjusted 2023 full year • Relevant
Slide 6: Record high first quarter profits elevated given backloaded R&D expenses and special recognition of windfall tax
Record high first quarter profits elevated given backloaded R&D expenses and special recognition of windfall tax 209.7 Other 31.9 -28.9 -53.4 127.4 -82.3 Pharma 177.8 -36.9 0.0 58.9 -12.2 -17.2 -2.2 Revenues Cost of Sales Gross Profit S&M G&A R&D Claw-back Milestone income Clean EBIT % of revenue, 2
Slide 7: EBIT broke the quarterly record again with a y-o-y increase of 44%
EBIT broke the quarterly record again with a y-o-y increase of 44% boosted by FX effect; but underlying ex-FX growth at 24% EBIT (year-on-year) Clean EBIT (year-on-year) +59.1% +44.4% 58.9 54.1 45.9 41.3 +24.0% 37.5 +10.1% 37.0 2022 M3 2023 M3 2023 M3 w/o 2022 M3 2023 M3 2023 M3 w/o FX effect FX eff
Slide 8: Consolidated sales was ~25% higher; driven by steady growth in core business
Consolidated sales was ~25% higher; driven by steady growth in core business supported by positive FX environment Other revenue Pharma segment Pharma revenue FX impact by currencies 2023 M3 +24.8% RUB 8.0 21.6 209.7 USD 5.2 2.6 Other 3.1 18.9 +12,8% EUR 2.6 20.0 31.9 CNY 0.0 23.5 +11.9% FX impact by
Slide 9: Overhead reallocation from S&M to G&A increased G&A by 2.8 HUFbn
Overhead reallocation from S&M to G&A and cost of efficiency improvement projects increased G&A by 2.8 HUFbn Gross profit Sales & Marketing Research & Development +13.5% +1.1% 36.9 +5.8% 17.0 17.2 -1.5% 34.4 16.7 32.5 +32.7% 127.4 2022 M3 2023 M3 2023 M3 w/o 2022 M3 2023 M3 2023 M3 w/o 110.7 +15.3%
Slide 10: Temporary negative FCF after investing ~20 HUFbn to WHC portfolio
Temporary negative FCF after investing ~20 HUFbn to WHC portfolio; stockpiling increased cash conversion cycle CAPEX of tangible assets Acquisition of intangible assets Free Cash-flow | HUFbn +230.4% +230.4% -54.8 31.4 31.4 -54.8 28.0 42.4 42.4 9.2 9.2 35.3 19.4 27.7 14.7 21.4 7.9 9.5 22.2 9.5 22.2
Slide 11: Profitability in Q1 improved in each focus area
Profitability in Q1 improved in each focus area, largest improvement in WHC followed by CNS Pharma 2023 M3 WHC CNS BIO GM Pharma Other Eliminations Group total other Revenues 63.3 43.3 7.9 59.5 3.8 177.8 36.0 -4.1 209.7 Cost of Sales -18.3 -0.2 -6.1 -25.6 -3.1 -53.4 -32.8 3.9 -82.3 Gross Profit 45.0
Slide 12: CNS remain US focused, WHC and BIO with massive WEU footprint
CNS remain US focused, WHC and BIO with massive WEU footprint, GM safeguards our traditional market presence Neuropsychiatry | Revenue Women’s Healthcare | Revenue 40.7 2022 M3 22.8 21.6 2023 M3 18.0 2023 M3 w/o FX 16.2 12.7 35.2 9.1 7.8 8.6 7.7 27.5 4.8 4.0 5.3 4.9 4.6 0.7 1.2 3.7 4.2 1.1 0.5 0.0 0
Slide 13: Women's Healthcare | Healthy increase in profits
Women’s Healthcare| Healthy increase in profits with continuous uptake on new product launches Clean EBIT Gross profit +59.2% +30.3% +59.2% +30.3% 16.5 13.4 14.7 9.3 41.8 45.4 41.0 45.0 45.0 14.7 34.5 34.5 6.7 9.3 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 Q1 2022 M3 2023 M3 2022 Q1 2022 Q2 2022 Q3 2022 Q
Slide 14: WHC | Highlighted brands | EVRA makes it to top 3
WHC | Highlighted brands | EVRA makes it to top 3, while Bemfola’s grows slowly after temporary setback Bemfola® Key messages • Strong competition and price pressure on +6.5% +6.5% Bemfola®. 20% growth in WEU mainly 6.1 +1.3% 5.8 5.8 offset by drop in South-Korea market year 5.8 6.0 6.1 by year, and
Slide 15: WHC | Highlighted brands | New products hit the market
WHC | Highlighted brands | New products hit the market on a high Ryeqo® Key messages • Significant growth in Spain, Germany, +365.2% Nordics and CEE markets. +365,2% • All planned market access milestones 1.1 +345,1% 0.8 1,1 1,0 achieved. 0.5 0.5 0.2 0,2 • Intensive regulatory work on Endometriosis
Slide 16: Neuropsychiatry | Our main clean EBIT contributor grew over 50%
Neuropsychiatry | Our main clean EBIT contributor grew over 50% while progressing with R&D projects Clean EBIT Gross profit +54.2% +49.0% +54.2% +49.0% 33.8 36.4 36.0 36.5 36.5 42.8 41.8 43.1 43.1 23.6 23.6 28.9 31.6 28.9 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 Q1 2022 M3 2023 M3 2022 Q1 2022 Q2 2022 Q
Slide 17: CNS | Highlighted brands | ~28% constant currency growth in Vraylar
CNS | Highlighted brands | ~28% constant currency growth in Vraylar; US prescriptions off to a strong start Vraylar® Key messages +48.0% • Significant year-on-year increase recorded in royalties linked to sales of Vraylar® in 41.2 39.6 40.7 the USA. 27.5 29.9 +48.0% • Close to 50% increase of royalt
Slide 18: Biotechnology | R&D projects on track while CDMO start slower
Biotechnology | R&D projects on track while CDMO start slower due to the seasonality of the business Clean EBIT Gross profit -34.0% -34.0% -228.2% -228.2% -1.3 6.7 1.8 -4.5 -4.8 4.6 3.4 -6.4 1.8 -9.6 -6.4 -9.6 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 Q1 -1.4 -1.4 2022 M3 2023 M3 2022 Q1 2022 Q2 2022 Q3
Slide 19: BIO | Highlighted brand | Teriparatide biosimilar global revenues
BIO | Highlighted brand | Teriparatide biosimilar global revenues show dynamic increase Terrosa® Key messages • Sales proceeds from WEU region contributed substantially to the higher +42.3% +42.3% turnover of Terrosa® reported. 5.0 4.8 +36.9% 5.7 5.7 6.0 5.0 3.5 • Terrosa® became a massive product.
Slide 20: General Medicines | Double digit increase in gross profit
General Medicines | Double digit increase in gross profit partially offset by operating expenses and cost of efficiency projects Clean EBIT Gross profit +7.6% +14.2% +14.2% 17.1 +7.6% 35.1 33.9 13.2 14.2 29.7 28.7 30.5 11.0 9.0 29.7 33.9 13.2 14.2 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 Q1 2022 M3 2023
Slide 21: Each focus area has a clear strategic vision
Each focus area has a clear strategic vision and consists of various type of products Pharma | Pharmaceuticals segment Strategic focus area’s short and long name Official definition Key strategic goal Therapeutic area We look after women’s health globally by setting trends By addressing unmet needs
Slide 22: Research and Development: investing into the future
Research and Development: We are dedicated to continuously investing into the future to serve our patients globally WHC CNS BIO GM Our focus is set on certain General Medicines builds a We develop innovative products Original R&D aims to develop therapeutic areas, notably portfolio offering for our
Slide 23: Pipeline on track with plans
Pipeline on track with plans Clinical phase Preclinical phase Phase I Phase II Phase III Technology Development Clinical phase Regulatory & Launch Neuropsychiatry Women’s Healthcare Biotechnology General Medicines new 23
Slide 24: ESG focused initiatives
ESG focused initiatives ENVIRONMENTAL SOCIAL GOVERNANCE • Climate change action plan aligned • Patient safety in focus with GMP • Comprehensive compliance with the EU’s Fit for 55 policy compliant manufacturing units, programme defining Group-wide package (55% reduction of GHG responsible marketing
Slide 25: ESG highlights from 2023 Q1
ESG highlights from 2023 Q1 ENVIRONMENTAL Environmental sustainability Established new EHS Department with wider range of responsibilities including Group-wide oversight of sustainability issues. Appointed new Environmental Sustainability Manager. Climate change Proceeded with Group-wide carbon foot
Slide 26: Leadership team
Leadership team Gábor Orbán István Hamecz Dr István Greiner CEO CFO R&D Director Appointed Chief Executive Officer from Graduated at Corvinus University Appointed Research Director in 2014. November 1, 2017. Began his professional Budapest in 1991. He started his career in Chemical engineer (M.Sc),
Slide 27: Leadership team
Leadership team Katalin Erdei Tibor Horváth Attila Szénási Tamás Szolyák Commercial Director Director of Pharmaceutical Director of Global Regulatory HR Director manufacturing Science & Portfolio Appointed Commercial After graduating at the Management Director in 2017. Has an MSc Director of Pharmac
Slide 28: Contacts, Financial calendar
Contacts Financial calendar Company name: Gedeon Richter Plc. | April 25, 2023 Sector: Pharmaceutical Annual General Meeting Company address: 1103 Budapest, Gyömrői út 19-21., Hungary | April 26, 2023 Publication of AGM resolutions Telephone: +36 1 431 5764 | April 26, 2023 Fax: +36 1 261 2158 Publi
Slide 29: Disclaimer
Disclaimer This presentation and the associated slides and discussion contain forward-looking statements. These statements are naturally subject to uncertainty and changes in circumstances. Those forward-looking statements may include, but are not limited to, those regarding capital employed, capita