Richter Gedeon Vegyeszeti Gyár Nyilvánosan Muködo Rt : Annual Report 2023 NONOFFICIAL DRAFT

This document has the same human-readable content as the official Annual Report published in .ZIP format, but do not qualify as the Company's official Annual Report.

GEDEON RICHTER PLC.

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2023

Gedeon Richter Plc. - Annual report

Table of contents

For the year ended 31 December 2023

Table of Contents

Annual Report	1.
Management Report	2.
Consolidated Financial Statements	92.
Disclosures	207.
Separate Financial Statements	208.
Contacts	312.

1

Gedeon Richter Plc. - Annual Report

Management Report

For the year ended 31 December 2023

Gedeon Richter Plc

Management Report

Table of Contents

I. Chief Executive Officer's Letter to the Shareholders	4
II. Chairman's Letter	7
III. Corporate Review	8
1.	Fact Sheet	8
2.	Member Companies of the Group and Branches of the Parent Company	9
3.	Financial Highlights	10
4.	Business Model and the Business Units of Richter	11
5.	Corporate Governance	12
6.	Company's Boards	14
IV. Investor Information	17
1.	Investor Relations	17
2.	Conferences, Roadshows, Analysts	17
3.	Annual General Meeting	18
4.	Cash Management	18
5.	Information Regarding Richter Shares	19
V. Strategic Review	22
1.	Strategic Targets	22
2.	Neuropsychiatry (CNS)	23
3.	Women's Healthcare (WHC)	27
4.	Biotechnology (BIO)	34
5.	General Medicines (GM)	37
6.	Overview of R&D	39
VI. Business Review	42
1.	Economic Environment	42
2.	Industry Environment	43
3.	Group turnover	44
4.	Turnover of Pharmaceutical Segment	44
5.	Turnover of Top 10 markets	44
6.	Neuropsychiatry (CNS) Business Unit	45
7.	Women's Healthcare (WHC) Business Unit	45
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	Gedeon Richter Plc. - Annual Report
	Management Report
	For the year ended 31 December 2023
8.	Biotechnology (BIO) Business Unit	48
9.	General Medicines (GM) Business Unit	49
10.	Selected consolidated business metrics	50
11.	Business units - main P&L items	51
12.	Business segments - main P&L items	52
13.	Notes to consolidated financial statements	53
14.	Notes on the share buy-back programme	60
15.	Litigation Proceedings	60
VII. Human Resources	61
1.	Employees	61
2.	Remuneration System	63
VIII. Risk Management and Internal Control of the Company	67
1.	Risk Management	67
IX. ESG Review	85
1.	Environmental Protection	85
2.	Occupational Health and Safety	86
3.	Human Resource Management	86
4.	Policy of Diversity	87
5.	Global Compliance Program	88
Appendix 1 - Effect of changes in accounting policy	91

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Gedeon Richter Plc. - Annual Report

Management Report

For the year ended 31 December 2023

I. Chief Executive Officer's Letter to the Shareholders

I am proud to report that 2023 will again go down in Gedeon Richter's history as a successful year and one where we added further bricks to the already strong foundation that the company has built over the last 123 years. This foundation will allow our success to remain sustainable for the coming years, decades, and generations.

2023 was a strong year financially as we managed to surpass our initial targets, in some cases by a wide margin. In line with the ultimate mission of the company, we were also able to reach an ever- expanding number of patients with our medicines and treatments across the world and across all our business units. This was a rewarding year for our shareholders, who enjoyed a significant increase in dividends and also benefited from share price appreciation. Last year was also remarkable from a business perspective, as each of our four businesses achieved critical milestones in our journey towards our vision to become a leading European mid-cap pharma company by the end of the decade.

No year goes without challenges, however, and 2023 was no different. Wars, epidemics, climate change, inflation, currency fluctuations and unfortunately the list rarely gets shorter. Our patients faced challenges on a daily basis. Challenges that our employees and communities have to tackle are more than evident in every corner of the world. In Richter, we are inspired to create solutions, to make ourselves and our company better and to make a difference for the better in the lives of all of our stakeholders.

Robust financial delivery, major operational progress

Pharmaceutical revenues reached HUF 747bn (or nearly EUR 2bn) in 2023, a new all-time high for the company, despite a significant headwind from adverse currency changes. Our Clean EBIT jumped to HUF 235bn (or EUR 616mn), 15 percent higher year-on-year and if adjusted for currency, this increase would have been significantly higher, a truly outstanding achievement. This impressive growth in our underlying business was offset by FX losses on the back of adverse currency movements, hence our net profit was HUF 159bn, around flat compared to the previous year.

All four business units had their fair share of growth and achieved double-digit revenue increases when adjusted for currency movements. VRAYLAR® continued to impress in 2023, as the product's net sales exceeded USD 2.7bn, an increase of 35 percent, and this formed the basis for the higher royalty payments Richter received. The Women's Healthcare business saw a strong double-digit sales increase on the back of the ramp up of revenues generated by new, innovative medicines. Biotechnology revenues also achieved double-digit volume growth, as both Terrosa sales and our CDMO revenues continued to expand. General Medicines were the most exposed to currency movements and therefore despite impressive volumes growth and some positive price effect, reported revenues were only marginally higher YoY.

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Gedeon Richter Plc. - Annual Report

Management Report

For the year ended 31 December 2023

All-time high number of patients served and medicines produced

Financial growth alone is not a sufficient measure of success. We were pleased to see that the number of patients who were treated by our medicines rose further in 2023, as all four business units achieved material volume growth. The number of patients who receive help through Vraylar® since its launch now exceed 1 million. Women are receiving treatment globally through an ever-widening Richter product portfolio, and 2023 saw further important developments through partnership agreements as well as a label expansion for endometriosis at one of our key medicines, Ryeqo®. Our teriparatide sales continued to reflect improved patient access. As part of its drive to expand in novel oral anticoagulants (NOAC), our GenMed unit successfully launched Telexer (dabigatran), the first generic product for this condition in Central Europe. This impressive growth was supported by our vertically integrated manufacturing platform, as we produced a record high number of 304.5mn units of packaged boxes, 17.7% higher than a year ago.

Contributing to the fight against climate change

Events witnessed on planet Earth in the last few years have probably convinced most sceptics that climate change is something a responsible person or organization not only needs to consider but must act to fight against. Our industry may not be among the largest polluters, yet as a company with manufacturing operations, we do consume energy and have emissions, therefore we have a responsibility to eliminate these as much and as fast as we can. On the one hand, I am satisfied that Richter managed to cut energy consumption by 7% in 2023 and 21% over the last three years in Hungary. GHG emissions declined by 8% in Hungary and also by 2% at the Group level in 2023. We are well on track to meet our 2030 commitment, fully aligned with the EU's Fit for 55 programs. On the other hand, we cannot and will not stop here. We are fully embracing the challenge of becoming a 'Net zero' company by 2050.

Building for the future, managing the patent cliff

There is not a week passing by in Richter when executive management would not discuss the post- 2030 strategic future of the company. Everything we do now serves the purpose of building a future- proof company that can successfully tackle even a major patent expiry event such as that we are facing after 2029. All four business units have clear growth targets and an ambitious leadership that will allow us to grow much stronger in the next 5 years. However, we also understand that three crucial ingredients will be absolutely necessary to be able to achieve our targets: dedicated people, an efficient organization and mutually rewarding partnerships.

Everything starts with People

This is the time of the year when we have to repeatedly express our gratitude to our employees, to the 11,000+ strong Richter family. Clearly, no corporate success is feasible without people. We, at Richter, are very lucky to have very high quality, dedicated people, who excel in their daily activities to the benefit of our patients and our company. We are also aware that no organization can prosper without the prosperity of its people. We recognize and appreciate the talent, the expertise and the dedication of our workforce in the 35+ countries that we operate. We also recognize the need to invest in human capital with talent development and retention and succession planning having been in special focus in 2023. Diversity and inclusion are corporate values which are indispensable for an internationally recognized, successful company. Diversity initiatives are now becoming part of our everyday life, as we actively promote inter-generational cooperation and knowledge sharing and strive to increase women participation among our talents and managers.

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Gedeon Richter Plc. - Annual Report

Management Report

For the year ended 31 December 2023

A new organization in place, efficiency programs in the making

We started to reshape our organization a couple of years ago and now have a clear operational structure with four core business units. These business units are supported by three overarching horizontal platforms: R&D, manufacturing and sales. While the structure appears to be ready, we have to work hard to make them as efficient as possible. This work has already started, and reaping the benefits of these efficiency projects in terms of cost savings and speed will be a major focus over the coming years to lead us to the required level of operational excellence. No part of the organization will be left out from our drive to operate as efficiently as a leading mid-pharma company is expected to.

No success without valuable partners

We have learnt during the last few decades that we can only be successful globally if we build and nurture partnerships. Let it be licensing or marketing agreements, joint research and/or development programs, or acquisitions of products, portfolios or even companies, Richter has managed to forge close ties with a number of reputable partners across several geographies. Vraylar® would not exist as it is today without a strong partnership, nor would Richter be the second most important player in European women's healthcare. Partners and partnerships have played a crucial role in enabling Richter to successfully grow beyond the borders of its home country, the region or even Europe. And we believe partnerships will be key to our success in the coming years also.

Outlook

We look forward to 2024 with a healthy dose of excitement and curiosity and a very high level of energy, commitment and enthusiasm. We believe our strong sense of purpose will be guiding us through the upcoming challenges and we will continue to act in the best interest of our patients, employees, communities, and our shareholders in the coming year.

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Gedeon Richter Plc. - Annual Report

Management Report

For the year ended 31 December 2023

II. Chairman's Letter

In 2023 the new operational structure of Gedeon Richter continued to develop towards its goal of excellence. While in the framework of a matrix organisation four business units were created, our principal strategic focus remained on pursuing innovation in our Neuropsychiatry research, further developing our core Women's Healthcare business, facilitating the regulatory and market launch activities at our Biotechnology unit and revitalizing the General Medicines franchise with reinforced product development and licensing-in activities. I am proud to inform that all the above underlying businesses contributed positively to the reported good results, notwithstanding such negative impacts as exchange rates and extraordinary taxation.

Richter navigated well through the stormy waters of 2023 in the shadow of increasing geopolitical uncertainties, wars and major conflicts threatening supply chains on a global level. On behalf of the Board of Directors I would like to extend my sincere appreciation to all our inspired employees who through dedication and tireless efforts provided solutions and delivered world class medicines and healthcare products to patients throughout the world.

Finally, after having served Richter in various positions both in Hungary and abroad and on my retirement as Chairman of the Board of Directors I should like to take this opportunity to thank my colleagues throughout the Group and the Board of Directors for their sustained fellowship and support throughout my executive life at Richter.

It is with great delight that I accepted the title of Lifetime Honorary Chairman of Gedeon Richter I was recently granted by the Board of Directors and I am looking forward, as a director, to support our incoming Chairman, Prof Dr. E. Szilveszter Vizi.

I am also grateful to all of you, dear shareholders, for the confidence you have expressed over the past more than three decades.

Erik Bogsch

Lifetime Honorary Chairman.

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Gedeon Richter Plc. - Annual Report

Management Report

For the year ended 31 December 2023

III. Corporate Review

1. Fact Sheet

Richter Group is active in two major business segments, primarily Pharmaceuticals comprising the research and development, manufacturing, sales and marketing of pharmaceutical products, and it is also engaged in the Wholesale and Retail of these products. In addition, there is a third group ('Other') of companies comprising those members of the Group that provide auxiliary services to the former segments.

Research, development, manufacturing and marketing of pharmaceutical products are the core activities of Richter and in this endeavour the Group is supported by a number of subsidiaries, joint ventures and associated companies. Manufacturing subsidiaries of the Group, which operate in traditional markets together with a broad network of trading affiliates that ensure a strong market presence, have together created the foundation for regional leadership and a global presence in the specialty area of Women's Healthcare.

1.1. Parent Company Data

Headquarters	1103 Budapest, Gyömrői út 19-21., Hungary
Mail address	1475 Budapest, Pf. 27., Hungary
Phone	[phone]
Fax	[phone]
E-mail	[e-mail]
Website	www.gedeonrichter.com
Established	1901
Main activity	Research, development,
	manufacturing and marketing of pharmaceutical products
VAT Number	10484878-2-44
EU VAT Number	HU10484878
Share capital	HUF 18,637,486,000
Number of shares issued	186,374,860
Auditor	Deloitte Auditing and Consulting Ltd.
Shares listed at	Budapest Stock Exchange	ISIN: HU0000123096
	Luxembourg Stock Exchange	ISIN: US3684672054
GDRs issued by	BNY Mellon
GDR / Ordinary share ratio	1:1

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