Post on 26-Mar-2015
Regional multinational company
Corporate strategyCorporate strategy
Niche Niche market market playerplayer–– therapeutic niche - women’s healthcaretherapeutic niche - women’s healthcare–– geographic niche - geographic niche - CCEE, CISEE, CIS
LLong-term supply agreementong-term supply agreementss in EU / USA in EU / USA–– sophisticated chemistry knowledgesophisticated chemistry knowledge
Sound research and development activitySound research and development activity–– original research - focused exclusively on the CNSoriginal research - focused exclusively on the CNS–– developments - successful innovationsdevelopments - successful innovations
Licensing activityLicensing activity –– broadening of the existing product portfoliobroadening of the existing product portfolio–– beneficial partnerbeneficial partner
Good growth driven by gynaecology and cardiovascularGood growth driven by gynaecology and cardiovascular
GynaecologyGynaecology
Muscle Muscle relaxantsrelaxants
Gastro-Gastro-intestinalintestinal
Central Central Nervous Nervous SystemSystem
Cardio-Cardio-vascularvascular
OtherOther
H1 2006
17 %
24 %
7% 3%
21 %
28 %
1996
33 %
4%9%
16 %12%
26 %
Cardio-vascular
Gynaecology
Other
Central Nervous System
Gastro-intestinal Muscle
relaxants
US$US$ 410 410 mm US$US$ 247 m 247 mSales
Expanding gExpanding gynaecological businessynaecological business
Niche playerNiche player
Core expertise in steroid Core expertise in steroid
chemistrychemistry
WideWide range of women’s range of women’s
healthcare productshealthcare products
Continuous expansion Continuous expansion oon n
traditional markets traditional markets
FDA / EMEA compliant facilitiesFDA / EMEA compliant facilities
Long-term supply agreements Long-term supply agreements
– EU / USA– EU / USA
0
20
40
60
80
100
120
140
160
180
200
96 97 98 99 00 01 02 03 04 05 05 06
US$ mn
115
90
H1 H1
+ 28 %
185
One of the broadest gynaecological portfolioOne of the broadest gynaecological portfolio
Oral contraceptives– third- and second-generation
Emergency pills
Hormone Replacement Therapy– tablets, patches
Antifungals– tablets, cream
Other gynaecological products
APIs
Sales by pSales by product typroduct typee
Generic developmentGeneric development
– focusing on niches
– preparing for patent expiries
Original researchOriginal research
– focusing on CNS
Licensing activityLicensing activity
– beneficial partner
Reproduction / Generic
71 %
Own developed compounds
18 %
Licensed-in11 %
Source: Richter’s sales H1 2006
SalesSales (US$ (US$ m m))
14 % increase
US$ 410 m US$US$ 359 m 359 m
IFRS unaudited figures.
H1 H1 20020055
Hungary- 8 %
EU+ 14 %
USA+ 13 %
CIS+ 32 %
85
41 39
88
157Other
countries+ 16 %
H1 H1 20020066
Hungary EU
USA
CIS
93
36
78
34
118
Other Other countriescountries
0
50
100
150
200
250
96 97 98 99 00 01 02 03 04 05 05 06
Other republicsUkraineRussia
US$ m
CIS CIS –– continuous dynamic growth continuous dynamic growth
+ 32 %
216
118
H1 H1
157
Favourable market conditions
- stable political and economic
environment
- high crude oil and natural gas
prices
Increasing proportion of new
products: 38 %
Russia: DLO programme
continues
Russia – the Company’s largest marketRussia – the Company’s largest market
Subsidy programme (DLO)
– new reimbursement list from 1 January 2006
– about US$ 1.0 bn allocated for 2006 – at retail price level
– H1 2006 – appr. US$ 20 m
Protek – changes to invoicing procedures
– Q1 2006 – about US$ 10 m
0
20
40
60
80
100
120
140
04 05 06
Protek - changes to Invoicing procedures
DLO programme
Private market
Russia – sales breakdownRussia – sales breakdown
US$ million
119
93
5663
30
89
20
10
H1 H1 H1
56
0
50
100
150
200
250
300
350
400
450
500
96 97 98 99 00 01 02 03 04 05 06
Russia Ukraine Other republics
Number of sales stuff
Total: 140
Total:700
H1
Expansion of sales network in the CIS regionExpansion of sales network in the CIS region
US$ m
0
20
40
60
80
100
96 97 98 99 00 01 02 03 04 05 05 06
Finished productsBulk products
USAUSA
+ 13 %
34
70
H1H1
39
Sales increase from a low base
Steroids – supply agreements
− Barr Labs.
− J&J – several APIs
Generic business
− lisinopril, famotidine, spironolactone
− increasing competition, decreasing prices
Balanced business model - two major export marketsBalanced business model - two major export markets
0
50
100
150
200
250
93 94 95 96 97 98 99 00 01 02 03 04 05 H105
H106
US$ m
Russia USA
EU 25EU 25
Former EU 15
Sales via partners Finished and API shipments Continual preparation for patent expiries appr. 1/3 of EU 25 sales
New members from Central and Eastern Europe(PL, CZ, SK, Baltic S.)
Own sales network Finished product supplies New product launches appr. 2/3 of EU 25 sales
Main drivers of growth in both areas
Gynaecology Portfolio renewal
Focused marketing strategies
0
10 000
20 000
30 000
40 000
50 000
96 97 98 99 00 01 02 03 04 05 05 06
HUF m
Richter in HungaryRichter in Hungary
Unfavourable economic
environment
Flat sales
Success of new products
– renewal of product portfolio
– 70 % of domestic sales
40 800
H1
17 900
H1
18 000
Gross and operating marginsGross and operating margins
62.961.661.3
26.523.3 24.5
10
20
30
40
50
60
70
96 97 98 99 00 01 02 03 04 05 H105
H106
%
Gross marginOperating margin
Profit after taxationProfit after taxation
HUF m
0
10 000
20 000
30 000
40 000
50 000
96 97 98 99 00 01 02 03 04 05 05 06
0
50
100
150
200
250
300
96 97 98 99 00 01 02 03 04 05 05 06
US$ m
43 600
218
99
19 200
H1 H1H1H1
30 000
142
+ 56 %
+ 42 %
Capital expenditureCapital expenditure
0
5 000
10 000
15 000
20 000
25 000
30 000
96 97 98 99 00 01 02 03 04 05 05 06
HUF m
0
20
40
60
80
100
120
140
96 97 98 99 00 01 02 03 04 05 05 06
US$ m
7 500 39
12925 800
H1H1 H1 H1
6 400 30
Ownership structure on 30 June Ownership structure on 30 June 20020066
ÁPV ÁPV LtdLtd. . (Hungarian Privatisation (Hungarian Privatisation
and State Holding Company)and State Holding Company)
2525.0.0 % %
Domestic Domestic investorsinvestors
9.09.0 % %
International International investorsinvestors
666.06.0 % %
The only independent Hungarian pharmaceutical companyThe only independent Hungarian pharmaceutical company
THE RICHTER GROUP
Gedeon Richter-RUSGedeon Richter-RUS
Greenfield investment establishedGreenfield investment established –– 19961996
LocationLocation –– 100 km southeast from Moscow100 km southeast from Moscow
Strategic goalStrategic goal –– added local valueadded local value
Ongoing investments – connected to the DLO programme Ongoing investments – connected to the DLO programme – – expansion of the packaging facilityexpansion of the packaging facility –– upgrading of some production lines, equipments and laboratoriesupgrading of some production lines, equipments and laboratories –– enhancement of storage capacityenhancement of storage capacity
GZF PolfaGZF Polfa
Acquisition in PolandAcquisition in Poland–– November 2002November 2002
Strengthening of market presence in Central and Eastern EuropeStrengthening of market presence in Central and Eastern Europe–– a key element of Richter’s strategya key element of Richter’s strategy– – Poland – 3Poland – 3rdrd largest export market after Russia and USA largest export market after Russia and USA
Transaction rationaleTransaction rationale–– complementary product portfolio complementary product portfolio
–– GMP-compliant facilitiesGMP-compliant facilities
–– favourable location: 35 km southwest from Warsawfavourable location: 35 km southwest from Warsaw
Ownership ratioOwnership ratio– – since 2006 June: 70 %since 2006 June: 70 %
Gedeon Richter RomaniaGedeon Richter Romania
AcquisitionAcquisition–– May 1998May 1998
Major therapeutic areasMajor therapeutic areas– – central nervous system, cardiovascularcentral nervous system, cardiovascular
Capital expenditure programmes Capital expenditure programmes – – manufacturing facility to comply with GMP standardsmanufacturing facility to comply with GMP standards– regional development centre – regional development centre
Main areas of focus in 2006Main areas of focus in 2006–– first deliveries to Western European marketsfirst deliveries to Western European markets–– further expansion of sales and marketing teamsfurther expansion of sales and marketing teams
Richter-Themis Ltd.Richter-Themis Ltd.
Joint venture established Joint venture established – Richter-Themis Medicare Private Ltd.– 51 % stake– August 2004
Manufacturing Manufacturing – APIs and intermediates
Strategic goal Strategic goal – to increase synthetic capacity in a highly competitive environment
Building upon new facilitiesBuilding upon new facilities– operation started gradually from early 2006
Unconsolidated sales of key subsidiariesUnconsolidated sales of key subsidiaries
H1 2006 H1 2005 Growth
US$ m US$ m %
GZF Polfa 28.4 26.0 9.2
Gedeon Richter Romania 9.7 8.5 14.1
Gedeon Richter-RUS 8.7 4.2 107.1
Consolidated Parent Consolidated / Parent HUF m HUF m %
Total sales 104 621 86 765 120.6
Gross profit 62 215 54 567 114.0
Operating profit 23 239 21 260 109.3
Net profit 31 449 29 959 105.0
Comparative figures –Comparative figures – H1 2006 H1 2006
IFRS unaudited figures.