M9 2016 Richter Group Interim Report, M9 2016 3 November 2016
M9 2016
Richter Group
Interim Report, M9 2016 3 November 2016
M9 2016
2
Summary – M9 2016
Consolidated sales: +1.6% (EUR), +2.7% (HUF)+ sales growth in EU15 region+ good growth in Romania and in China− significant sales decline in other CIS region and in the USA
Profit for the period*: -2.0% (EUR), -1.0% (HUF)+ Acquisition of Rxmidas – one-off reassessment at fair value+ Recordati milestone payment+ decrease in R&D expenses− impact of RUB EUR exchange rate – 18.2% depreciation− increase in S&M expenses− expenses of product withdrawal of Lisvy®
2
*Net income attributable to owners linked to the parent
M9 2016
3
Key events I. – cariprazine
Recordati license agreement – 2 August 2016− exclusive license agreement to commercialize cariprazine,− in Western Europe, in Algeria, in Tunisia and in Turkey,− March 2016: EMA started the evaluation of Richter’s marketing
authorisation application for cariprazine for the treatment of schizophrenia.
MD-72 flexible doses trial – 5 August 2016− topline results: it did not show significant difference compared to placebo
used in adjunctive treatment to antidepressant therapy in adults with major depressive disorder (MDD) treatment.
M9 2016
4
Key events II.
DM Bio* license agreement – 19 October 2016− technology transfer and license-in agreement in respect of the
development and commercialization of DM Bio’s biosimilar monoclonal antibody, Trastuzumab,
− exclusive distribution rights for Europe, the CIS region and Latin American countries,
− pilot technology for further development.
*Joint venture company formed by Dong-A Socio Holdings of Korea and Meiji Seika Pharma of Japan.
M9 2016
5
Consolidated financial highlights
*Net income attributable to owners of the parent
HUF Change % EUR Change %
Total revenues 284.0bn 2.7 909.6m 1.6
Profit from operations 45.4bn (13.4) 145.3m (14.3)
Profit for the period* 43.9bn (1.0) 140.7m (2.0)
EPS (diluted) 237 (1.3) 0.76 (2.6)
M9 2016
9%
6%
13%
9%
2%
23%
14%
7%2%
5% 4%
6%
6
Geographical composition of Group sales
6
M9 2015 M9 2016
Hungary
RussiaPoland
Romania
EU10
EU15USA
Other CIS
Ukraine
RoW
China
HungaryRussia
Poland
Romania
EU10
EU15USA
Other CIS
Ukraine
RoW
LatAm
Total: HUF 276.6bnEUR 895.5m
Total: HUF 284.0bnEUR 909.6m
+ 2.7% (HUF) + 1.6% (EUR)
China
LatAm
10%
6%
15%
4%
8%
21%
14%
6%7%
3%
4%
2%
M9 2016
7
P&L
HUFmM9 2016
Change %
EURmM9 2016
Change %
as % of total revenues
Total revenues 284,021 2.7 909.6 1.6
Gross profit 168,052 (0.9) 538.2 (2.0) 59.2
S&M expenses (80,305) 6.1 (257.2) 4.9 28.3
A&G expenses (13,958) 1.1 (44.7) 0.0 4.9
R&D expenses (26,546) (8.4) (85.0) (9.4) 9.3
Other income and other expenses (1,869) n.a. (6.0) n.a. 0.7
Profit from operations 45,374 (13.4) 145.3 (14.3) 16.0
Net financial income 2,789 n.a. 8.9 n.a. 1.0
Profit for the period* 43,924 (1.0) 140.7 (2.0) 15.5
*Profit attributable to owners of the parent
M9 2016
0%
10%
20%
30%
40%
50%
60%
0
50 000
100 000
150 000
200 000
250 000
Gross profit Gross margin
8
Decreasing gross profit, gross margin
+ Increase of turnover in EU15 and in China
+ Increase of turnover in Russiain RUB
− Sales decline in other CIS and in the USA
− Weakening RUB exchange rateagainst EUR and HUF (YoY) EUR RUB → 18.2%
− Increase of share in turnover of W&R
HUFm59.2%61.3%
M9 2016
0%
5%
10%
15%
20%
25%
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
Profit from operation Operating margin
9
Decreasing operating margin
HUFm
16.0%18.9%
+ Acquisition of Rxmidas – one-off reassessment at fair value
+ Recordati milestone payment+ Decreasing R&D expenditures
− Decreasing gross margin− Impact of RUB EUR exchange
rate – 18.2% depreciation− Increase in sales and
marketing expenses− Expenses linked to product
withdrawal of Lisvy®
M9 2016
10
Sales in the Pharmaceutical segment*
* 89% of turnover originates from outside of Hungary
10
Sales development – contradictory impacts+ growth: China, EU15, Poland, Romania, Hungary, Russia
(in RUB), Rest of the World
+ increasing ESMYA® sales
− decreasing overall OC sales
− decline: EU10, other CIS, USA
Successful product launches
M9 2016
Hungary
Stable pharmaceutical market
Sales increase: 2.3% in HUF
Success of products launched in recent years
HUFbn
*Turnover of the pharmaceutical segment
11
0
10
20
30
40
Turnover *
M9 2016
EU – composition of sales*
EU15− strengthening our position
in key Western-European markets
− own Women’s Healthcaresales and marketing network
Poland, Romania, EU10− well established in the region for
decades− own specialized sales network*Turnover of the pharmaceutical segment
12
49%
51%
M9 2016
EU15
*Turnover of the pharmaceutical segment
7.9% sales increase in EUR
Own S&M network
Women’s Healthcare products: ESMYA®, Bemfola®, Richter OC portfolio, acquired OCs
Declining oral contraceptivemarket
EURm
13
020406080
100120140160180
Turnover*
M9 2016
Poland, Romania, EU10
Increasing generic competitionPrice erosion
Poland: – 7.4% increase in PLN– strong flu epidemic –
Groprinosin sales increase
Romania:– increasing sales levels
(8.0% in RON)– base period: low level of
wholesale stock
EURm
*Turnover of the pharmaceutical segment
14
0
50
100
150
200
Turnover*
Poland Romania EU10
M9 2016
CIS
Sales decline (7.9% in EUR)
Russia− RUB devaluation (YoY)− slowdown of Russian economy
Ukraine− political uncertainty− UAH devaluation− decreasing purchasing power
EURm
*Turnover of the pharmaceutical segment
15
0
100
200
300
400
500
Turnover*
Russia Ukraine Other CIS
M9 2016
0
100
200
300
400
Turnover*
Russia
Sales increase in RUB(9.4% in RUB; -7.4% in EUR)
February 2016 – An average 4% price increase when projected across the entire range of products
Weakening of EUR RUB exchange rate in M9 2016: 18.2% (YoY)
EURm
*Turnover of the pharmaceutical segment16
RUBm
10000
11000
12000
13000
14000
15000
Turnover*
M9 2016
Ukraine, Other republics
Ukraine− sales increase (USD 7.6%)− low sales level in the base
period− political and economic
turmoil− UAH devaluation
USD UAH: 18.6% (YoY)
Other republics− 14.2% decrease (EUR)
(-13.9% in USD)− devaluation of Kazakh Tenge
EUR KZT: 72.6% (YoY)− uncertain economic and
FOREX environment
USDm
*Turnover of the pharmaceutical segment
17
0
50
100
150
200
Turnover*
Ukraine Other CIS
M9 2016
USA
Sales decline (12.4% in USD)
Cariprazine (VraylarTM) royaltyincome achieved duringH1 2016: USD 3.4m
Increasing sales level of emergency contraceptives Substantial decrease of revenues resulting from profit sharing agreementsSignificant proportion of Women’s Healthcare – 79%
USDm
*Turnover of the pharmaceutical segment
18
0
40
80
120
160
Turnover*
M9 2016
China
19
Sales in M9 2016: EUR 60.8m
Dynamically expanding pharmaceutical market
From 2016 GR Rxmidas 100% Richter owned
Sales network personnel: 233
Higher sales level of Cavinton and Escapelle
M9 2016
Latin America
20
Sales* in M9 2016: USD 16.0mRegional presence:− Brazil− Mexico− Colombia− Ecuador− Bolivia− Peru− Chile
Women’s Healthcare products in focusGradual launch of ESMYA®
*Turnover of the pharmaceutical segment
Mediplus N.V.
M9 2016
15%
21%
38%
3%
6%
17%
Pharmaceutical sales by therapeutic areas
Muscle relaxants
Gastrointestinal
Other
Women’s Healthcare
Central nervous system
Cardiovascular
Total: EUR 759.9m
M9 2016
21
M9 2016
23%
4% 10%
37%
6%10%
4%
6%
22
Women’s Healthcare sales by region
CEEHungary
CIS
USA
RoW
EU15
Ex-Grünenthalportfolio
Total: HUF 90.4bnEUR 289.5m
EURm
22
China
LatAm
0
50
100
150
200
250
300
Gynaecological sales Non‐gynaecological sales
M9 2016
23
Sales impact of Ex-Grünenthal portfolio and ESMYA®
Ex-Grünenthal portfolio sales: EUR 35.0m
ESMYA® sales: EUR 48.1m
Subtotal: EUR 83.1m
Women’s Healthcare sales
Ex-Grünenthalportfolio
ESMYA®
WH Total: EUR 289.5m
12%
17%
M9 2016
24
Fertility – Bemfola®
innovative biosimilar product addressing female fertilitydeveloped as a biosimilar to Gonal-f®
recombinant-human Follicle Stimulating Hormone (r-hFSH) launch: Q2 2014currently commercialized in the EU, in Israel, in the Middle East and in AustraliaRichter acquired global marketing rights for the product (excluding the USA)
Sales in M9 2016: EUR 7.3m – not included in consolidated turnover
M9 2016
25
Lisvy® - product withdrawal
Lisvy® is a gestodene and ethynil estradiol containing transdermal contraceptive patch licensed-in from Bayer HealthCare
Richter received a notification from Bayer HealthCare, according to which certain stability tests carried out under specific conditions resulted in out-of specification results
Bayer investigates the causes of non-specific responses
Richter consulted with the responsible national authorities
On 10 October 2016 Richter initiated the withdrawal of Lisvy® with immediate effect on all markets involved
M9 2016
staff
26
Sales network
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2010 2011 2012 2013 2014 2015 M9 2015 M9 2016
CIS CEE Hungary EU15 China
M9 2016
27
Wholesale and retail
W&R sales contribution is 19% of total sales
76% of the W&R turnover originates in Romania
20.4% sales increase in EUR in Romania
27
M9 2016
25.25%
67.61%
7.14%
28
Ownership structure
30 September 2016
Hungarian State Holding Company
Domestic investors International
investors
28
M9 2016
Thank you for your attention!
29
M9 2016
Appendix
Exchange rates
30
M9 2016
31
Evolution of currency exchange rates
HUF
260
280
300
320
340
EUR HUFUSD HUF
M9 2016
32
Evolution of currency exchange rates
EUR
65
70
75
80
85
90
95
EUR RUB
M9 2016
33
Evolution of currency exchange rates
HUF
3,25
3,50
3,75
4,00
4,25
4,50
4,75
HUF RUB
M9 2016
M9 2016 H1 2016 Q1 2016 M12 2015 M9 2015
EURHUF 312.23 312.67 311.98 309.67 308.82
USDHUF 279.64 279.95 283.12 279.16 277.39
RUBHUF 4.09 4.00 3.77 4.70 4.78
EURRUB 76.34 78.17 82.75 65.89 64.61
EURUSD 1.12 1.12 1.10 1.11 1.11
34
Exchange rates At period end
Average
30.09.2016 30.06.2016 31.03.2016 31.12.2015 30.09.2015
EURHUF 309.15 316.16 314.16 313.12 313.32
USDHUF 276.35 284.29 276.62 286.63 279.05
RUBHUF 4.36 4.43 4.09 3.88 4.26
EURRUB 70.91 71.73 76.81 80.70 73.55
EURUSD 1.12 1.11 1.14 1.09 1.12