Richter Gedeon Vegyeszeti Gyár Nyilvánosan Muködo Rt : Group report to the Budapest Stock Exchange 6 months to June 2022

Gedeon Richter

Report to the Budapest Stock Exchange

6 months to June 2022

Contents

Contents ...................................................................................................................................	2
Executive Summary .................................................................................................................	4
Extraordinary events impacting the reporting period................................................................	5
Notes to Specialty Sales ..........................................................................................................	6
Notes to Pharmaceutical Sales ..............................................................................................	12
Background Information on Pharmaceutical Sales ................................................................	14
Background Information on Wholesale and Retail Sales .......................................................	16
Information on Business Segments........................................................................................	17
Consolidated Financial Statements........................................................................................	18
Consolidated Balance Sheet - Assets ...................................................................	18
Consolidated Balance Sheet - Equity and Liabilities .............................................	19
Consolidated Statement of Changes in Equity.......................................................	20
Consolidated Income Statement - HUF.................................................................	22
Consolidated Income Statement - EUR.................................................................	23
Consolidated Income Statement - 3 months to June HUF, EUR...........................	24
Consolidated Cash-flow Statement........................................................................	25
Notes to Consolidated Financial Statements .........................................................................	26
Corporate matters ..................................................................................................................	31
Risk management ..................................................................................................................	33
Disclosures.............................................................................................................................	34

Consolidated figures are prepared in accordance with relevant IFRS regulations and presented in million Hungarian Forint (HUFm). The Report may also contain figures in other currencies but only for indicative purposes.

Detailed explanations to selected items presented in the tables are offered in the two 'Notes' sections as numbered in the respective tables.

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6 months to June 2022 - Report to the Budapest Stock Exchange

"Sales revenues grew dynamically in the first half of 2022 across all of our markets with the exception of Ukraine. Outsized gains from exchange rate movements combined with price increases lifted revenues in both HUF and EUR terms, while the specialty portfolio continued to provide strong underlying momentum. The solid performance of Vraylar continued and is now counted among the top 100 best selling drugs globally. The Russian business remains steady and recent RUB strength helped both the topline and margins.

We continue investing into our key Women's Health brands and moving the biosimilar pipeline forward. Our original CNS R&D agenda was given a strong push after we joined forces with Abbvie in March, which resulted in a substantial down payment in the second quarter. We remain dedicated both to our 2022 financial goals and the pipeline progress objectives we had set out for ourselves despite the challenges in the macro environment."

Gábor Orbán

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Executive Summary

Consolidated sales

	HUFm				EURm
2022	2021	Change			2022	2021
6 months to June		%		6 months to June

Total		360,980	296,803	64,177	21.6			954.3		829.7
Pharma			HUFm			Notes	EURm
sales	2022	2021	Change			2022		2021
	6 months to June		%			6 months to June
									6)
Hungary				22,769	21,173	1,596	7.5		60.2		59.2
Europe*					93,849	75,548	18,301	24.2	7)	248.1		211.2
CEE			42,308	35,027	7,281	20.8			111.8		97.9
WEU	51,541	40,521	11,020	27.2	8)	136.3		113.3
CIS			69,657	58,559	11,098	19.0	184.1		163.7
Russia			50,795	40,178	10,617	26.4			134.3		112.3
Ukraine	4,368	6,213	-1,845	-29.7			11.5		17.4
Other CIS	14,494	12,168	2,326	19.1	9)	38.3		34.0
USA			70,738	53,879	16,859	31.3	187.0		150.6
China					9,325	6,568	2,757	42.0	10)	24.7		18.3
Latin America					8,576	6,536	2,040	31.2	11)	22.7		18.3
RoW					17,835	15,085	2,750	18.2	12)	47.1		42.2
Total					292,749	237,348	55,401	23.3			773.9		663.5

• excluding Hungary

	Specialty			HUFm				Notes		EURm
2022	2021			Change		2022		2021
	sales
		6 months to June		%				6 months to June
											1)
	cariprazine			60,779	45,666			15,113	33.1			160.7		127.6
	Vraylar® royalty		57,330	43,720			13,610	31.1			151.6		122.2
	Reagila®	3,449	1,946			1,503	77.2		2)	9.1		5.4
	WHC			105,956	82,821			23,135	27.9			280.1		231.5
	Bemfola®		11,195	10,425			770	7.4		3)	29.6		29.1
	Evra®	11,801	5,929			5,872	99.0		4)	31.2		16.6
	OCs	60,765	51,848			8,917	17.2		5)	160.6		144.9
	teriparatide			9,232	5,784			3,448	59.6			24.4		16.2
	Total			175,967	134,271			41,696	31.1				465.1		375.3
	Proportion to		60.1	56.5
	Pharma sales (%)

		Wholesale		HUFm					EURm
		and retail	2022	2021	Change	%			2022	2021
		sales	6 months to June			6 months to June
		Total		72,452	64,323	8,129	12.6			191.5	179.8
Exchange rate gain / loss at consolidated sales level:	HUF	+29,099m

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6 months to June 2022 - Report to the Budapest Stock Exchange

Selected exchange rates - period averages

		2022 H1	2021 H1
	EURHUF	378.27	357.71
	USDHUF	347.21	297.19
	RUBHUF	4.71	3.99
	CNYHUF	52.37	45.96
Selected consolidated business metrics

			HUFm
		2022	6 months to June	2021
Gross margin %			57.1	56.1
Operating margin %	24.8	20.5
Profit margin attributable to owners of the parent %	31.5	18.5

Extraordinary events impacting the reporting period

Russian - Ukrainian conflict

Russia initiated military action in Ukraine in late February, following Moscow's recognition of the Donbass republics of Donetsk and Lugansk.

As a pharmaceutical company we have a special responsibility to provide a safe and continuous supply of medicines to patients and healthcare professionals who rely on our products worldwide. Cutting off supply of potentially life-saving medicines would be incompatible with the pharmaceutical industry's mission to protect human health. In that spirit, similarly to all multinational pharmaceutical companies present in Russia, we also continue to supply these patients with our products.

Commercial operations disrupted in Ukraine in late February were only resumed in mid April at significantly lower levels compared to previous sales volumes. Richter offered humanitarian relief to the local population at large and assisted its employees who had left the country providing them and their families with housing and employment in Hungary. Sales realised to Ukraine during the first six months were paid in full by our partners.

Business in Russia suffered slight temporary delays in the early days of the conflict, but shipments have since then broadly returned to their pre-war routine. Shipments are made via road freight transport mainly through Belarus. Market intelligence data suggest that in the first five months retail pharmaceutical sales in Russia increased by 30% in RUB terms primarily due to price increases.

A stockpiling impacted sales at the final consumer level in the first quarter. Payments have been received in due order during the entire reported period.

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