Gedeon Richter Media A solid start of the year
A solid start of the year
14/05/2024
  • Pharma revenues rose to HUF 200bn (EUR 515mn), up 13% YoY and Clean EBIT grew by 9% to HUF 64bn (EUR 166mn) in Q1 2024, while FX-adjusted growth continued to be stronger as the RUB weakness remained a headwind 
  • Net profit surged to HUF 68bn, as the currency volatility this time also led to unrealized FX gains (vs. large FX losses a year ago)
  • CNS and Women’s Healthcare were the key growth drivers in Q1, as most of the key brands saw robust underlying growth
  • Full-year 2024 guidance was reiterated for both Pharma revenues (EUR 2.15-2.25bn) and Clean EBIT (EUR 725-750mn) in light of the strong Q1 delivery

 

Gedeon Richter Plc. (“Richter”) announced today its Q1 2024 financial results.

Pharma revenues increased by 13% YoY to HUF 200bn (EUR 515mn). Excluding currency changes (ex-FX), revenue growth was 16%, at the high end of the FY 2024 guidance range. The nearly 3ppt FX headwind in the period was due to the 19% weaker RUB YoY (affecting primarily the GenMed segment), only partly offset by the weaker HUF.

Although shipping schedules and distributor de- and re-stocking had an impact on revenues, overall volumes were strong for most our key products. Cariprazine (CNS) and the WHC segment remained the key growth drivers in Q1 (both with 20%+ ex-FX growth), while BIO revenues also jumped from a low base.

  • CNS continued to perform very strongly in Q1 2024. Vraylar sales by Abbvie increased by 24%, and Reagila® sales were up by 35% on robust growth in Richter’s own network and at other partners too.
  • Women’s Healthcare was an outstanding growth driver in Q1 2024 on the back of very strong performance in China, LatAM and North America. In China and the US growth was, to some extent, due to the timing of product delivery (partner re-stocking). The traditional portfolio generated material growth, while the ramping up of new, innovative products (like Drovelis® and Ryeqo®) sales remained impressive.
  • BIO revenues jumped by 46% YoY, as CDMO revenues rose from a very low base and Terrosa® sales kept on advancing.
  • GenMed faced the dual headwind of a weaker RUB and a milder flu season compared to base period, and distributor de-stocking did not help either. This was only partly mitigated by the positive impact of continued new product launches.
  • Changes in R&D pipeline primarily involved the continuous product development and market launch activity in GenMed in Q1. All CNS projects in the clinical pipeline continued to progress, which also explains the increase in R&D expenses YoY. The tocilizumab biosimilar program (RGB-19) has successfully completed Phase 1 in collaboration with our co-development partner.

Gross profit (pharma) grew by 13% to HUF 141bn and gross margin marginally improved (by 0.2ppt) to 70.2% in Q1 2024 despite the adverse FX changes.

Clean EBIT (pharma) reached HUF 64bn (EUR 166mn), up 9% YoY. If adjusting for FX (ex-FX) Clean EBIT reached EUR 178mn, up 17%, in line with the full-year guidance range. CNS and WHC were the key drivers behind the earnings growth, while BIO EBIT losses also narrowed.

Reported EBIT came in at HUF 63.6bn, as this period saw only small adjusting items.

Net profit (attributable to the owners of the parent) amounted to HUF 68.2bn, up by 74% YoY. The bottom line continues to be highly volatile due to rather large movements in exchange rates, which in Q1 materialized predominantly in unrealized FX gains (on working capital items), as opposed to large FX losses a year ago.

Free cash flow (before M&A) amounted to HUF 53bn in Q1 2024, a significant, 35% increase YoY, helped by the strong operating cash flow and the FX gains. M&A (the Formycon transaction) and a small buyback used up bulk of the FCF, leading to only a small net cash accumulation. The next quarter will likely see other material cash outflow items, including HUF 78.8bn dividend payment (as approved by the AGM) and the previously announced Helm transaction (if successfully closed during the period).

Announcements were made in the reporting period about a strategic investment in Formycon, a leading developer of biosimilars and about the agreement on the acquisition of HELM's stakes in Richter-Helm joint ventures. These transactions are important steps to further strengthen the company’s Biotechnology business. Richter has also announced that it has submitted an offer and entered into negotiations to acquire certain assets from Mithra Pharmaceuticals in the field of Women’s Healthcare.


Gábor Orbán, CEO commented the results:

“We are off to a solid start of the year with all business units pulling their weight. Distributor de- and re-stocking created some noise in Russian, Chinese and even US figures but the underlying volume uptake was generally strong, with most of our key brands growing at a healthy pace. R&D costs are up significantly from a low base, but this is in line with plan and a testament to the progress of our clinical programs.
On the back of the strong Q1 results, we reiterate our 2024 revenue and Clean EBIT guidance. We have two transactions behind us and more in the works, so I expect each business unit to implement a step change before the end of the year."

 

About Gedeon Richter Plc.

Gedeon Richter Plc. (www.gedeonrichter.com), headquartered in Budapest/Hungary, is a major pharmaceutical company in Central Eastern Europe, with an expanding direct presence in Western Europe, China, Latin America, and Australia. Having reached a market capitalization of EUR 4.3bn (USD 4.7bn) by the end of 2023, Richter's consolidated sales were approximately EUR 2.1bn (USD 2.3bn) during the same year. The product portfolio of Richter covers many important therapeutic areas, including Women's Healthcare, Central Nervous System, and Cardiovascular areas. Having the largest R&D unit in Central Eastern Europe, Richter's original research activity focuses on CNS disorders. With its widely acknowledged steroid chemistry expertise, Richter is a significant player in the Women's Healthcare field worldwide. Richter is also active in biosimilar product development.

 

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