Richter GroupM9 2014

Richter Group

Interim Report, M9 2014 6 November 2014

Summary – M9 2014M9 2014

Summary M9 2014

Consolidated sales: -2.8% (EUR), +1.2% (HUF)− significant sales decline in Russia in Ukraine and in Polandsignificant sales decline in Russia, in Ukraine and in Poland− currency devaluations in the region+ good growth in EU15 countries, in other CIS region and in the USA

Profit for the period*: -30.6% (EUR), -27.7% (HUF)p ( ), ( )− negative balance of Other income and expenses − weakening EUR/RUB exchange rate+ net financial income – significant profit+ net financial income significant profit

22

*Net income attributable to owners of the parent

Consolidated financial highlightsM9 2014

Consolidated financial highlights

HUF Change EUR Changeg g

Total revenues 263.7bn 1.2% 853.6m -2.8%

P fit fProfit from operations 26.3bn -37.6% 85.2m -40.1%

Profit for the period* 28 8bn -27 7% 93 3m -30 6%Profit for the period 28.8bn -27.7% 93.3m -30.6%

EPS** (diluted) 155 -27.7% 0.50 -30.6%

*Net income attributable to owners of the parent**Restated in order to reflect the impact of the share split realised in July 2013.

3

Geographical composition of Group salesM9 2014

Geographical composition of Group sales

Hungary HungaryHungary

Russia Poland

g y

Russia Poland10%

7%28%

10%

6%24%

M9 2013 M9 2014Romania Romania

Ukraine12% 12%

5%

EU10*

Other CIS

UkraineEU10*Other CIS

RoW**8 %

6%

10%

7%

4%2%

3%4 %

9%

13%

7%

4% 4%2%

EU15USARoW** China EU15

USALatAm

T t l T t l

China

3%2% LatAm4% 4%

*Including Croatia

Total: HUF 260.5bnEUR 878.5m

Total: HUF 263.7bnEUR 853.6m

+ 1.2% (HUF) - 2.8% (EUR)

44

Including Croatia

**Restated in respect to exclude Latin America.

P&LM9 2014

P&L

HUFmM9 2014

Change %

EURmM9 2014

Change %

as % of total revenues

Total revenues 263,688 1.2 853.6 -2.8

Gross profit 159,468 -3.4 516.2 -7.3 60.5

S&M expenses (79,827) 0.1 (258.4) -3.9 30.3

A&G expenses (13,884) 0.1 (45.0) -3.8 5.3

R&D expenses (33,369) 10.2 (108.0) 5.8 12.6

Other income and other expenses (6,069) n.a. (19.6) n.a. 2.3

Profit from operations 26,319 -37.6 85.2 -40.1 10.0

Net financial income 2,807 n.a. 9.1 n.a. 1.1

Profit for the period* 28,822 -27.7 93.3 -30.6 10.9

*Profit attributable to owners of the parent

5

Decreasing gross profit, gross marginM9 2014

Decreasing gross profit, gross margin

60%250 000

- Significant sales decline in Russia and in UkraineWeakening EUR/RUB

HUFm60.5%

63.4%

40%

50%

60%

150 000

200 000

- Weakening EUR/RUB exchange rate

- Increasing proportion of

10%

20%

30%

50 000

100 000wholesale and retail segment

+ Devaluation of HUF0%0

2007 2008 2009 2010 2011 2012 2013 13M9 14M9

Gross profit Gross margin

Devaluation of HUFcompared to EUR

+ Increase of turnover in EU15 countries in other CIS regioncountries, in other CIS regionand in the USA

6

Decreasing operating marginM9 2014

Decreasing operating margin

Decreasing gross margin

Negative balance of Other

20%

25%

60 000

70 000

HUFm

gincome and expenses incurred − claw back related liabilities− lack of milestone incomes

10%

15%

20%

30 000

40 000

50 000

10.0%

16.2%lack of milestone incomes

− other one-off items

Increasing R&D expenditures

0%

5%

0

10 000

20 000

2007 2008 2009 2010 2011 2012 2013 13M9 14M9

Increasing R&D expenditures

2007 2008 2009 2010 2011 2012 2013 13M9 14M9

Profit from operation Operating margin

7

Pharmaceutical sales*M9 2014

Pharmaceutical sales

Key drivers of growth:

EU15 countries, other CIS and USA

Female healthcare

Successful product launches

*89% of turnover originates from outside of Hungary

8

g g y

8

HungaryM9 2014

Hungary

Turnover *

Stable pharmaceutical marketHUFbn

30

40Sales increase: 4.3% in HUF

10

20Success of products launched in recent years

02008 2009 2010 2011 2012 2013 13M9 14M9

*Turnover of the pharmaceutical segment

9

EU – composition of sales*M9 2014

EU composition of sales

Traditional EU member states

45%

− strengthening our position in key Western-European markets

− own gynaecological sales and marketing network

55%

Poland, Romania, EU10**

− well established in the region for decades

− own specialized sales network*Turnover of the pharmaceutical segment p** Including Croatia

10

EU15M9 2014

EU15

Turnover*

19.1% sales increase in EUR EURm

100

120

140Recently established S&M network

40

60

80

Female healthcare products: Richter OC portfolio, acquired

0

20

2008 2009 2010 2011 2012 2013 13M9 14M9

p , qOCs, Esmya®

*Turnover of the pharmaceutical segment

11

Poland, Romania, EU10M9 2014

Poland, Romania, EU10

Increasing generic competition

Turnover*

Increasing generic competition

Price erosionEURm

150

200

Turnover

Poland: – 15.4% decline in PLN

EURm

50

100– lack of flu epidemic –Groprinosin sales decrease

– parallel import (OCs, EC, 0

2008 2009 2010 2011 2012 2013 13M9 14M9

Poland Romania EU10**

p p ( , ,other products)

Romania:Romania:– decreasing sales levels

(-7.9% in RON) *Turnover of the pharmaceutical segment**Data of 2012 adjusted with Croatia

12

CISM9 2014

CIS

Turnover*

Sales decline (-12.7% in EUR) EURm

300

400

500( )

Russia

100

200− RUB devaluation− slowdown of Russian economy

02008 2009 2010 2011 2012 2013 13M9 14M9

Russia Ukraine Other CISUkraine− political uncertainty− UAH devaluation

*Turnover of the pharmaceutical segment

13

RussiaM9 2014

Russia

Sales decline

T *

Sales decline(-3.0% in RUB; -16.1% in EUR)

Significant weakening of EURm

300

400

Turnover*Significant weakening of EUR/RUB exchange rate in M9 2014: 15.6%

EURm

200Decreasing purchasing power

Destocking at both wholesale

0

100

2008 2009 2010 2011 2012 2013 13M9 14M9

Destocking at both wholesale and pharmacy levels

Increase of manufacturingIncrease of manufacturing and warehousing capacities

*Turnover of the pharmaceutical segment

14

Ukraine, Other republicsM9 2014

Ukraine, Other republics

T *

Ukraine− 19.9% decline (USD)

USD

150

200

Turnover*− political and economic turmoil

− UAH devaluation

USDm

50

100− decreasing purchasing power

02008  2009 2010 2011 2012 2013 13M9 14M9

Ukraine Other CIS

Other republics− 16.2% increase (USD)

*Turnover of the pharmaceutical segment

15

USAM9 2014

USA

Sales increase (USD 6.2m)

USDm Turnover*

Significant proportion of gynaecology – 80%

USDm

160

200

Turnover

Sales increase – Plan B One-Step

80

120

p

0

40

2008  2009 2010 2011 2012 2013 13M9 14M9

*Turnover of the pharmaceutical segment

16

ChinaM9 2014

China

Dynamically expanding pharmaceutical market

From 2013 JV operates with Richter majority stake

Sales network: 225 medical representatives

Sales in M9 2014: EUR 32 6mSales in M9 2014: EUR 32.6m

17

Latin AmericaM9 2014

Latin America

R i l iRegional expansion:− Brazil− Mexico− Colombia− Ecuador

Bolivia− Bolivia− Peru− Chile

Female healthcare products in focus

Sales in M9 2014: USD 18.3m

18

Pharmaceutical sales by therapeutic areasM9 2014

Pharmaceutical sales by therapeutic areas

OtherCentral nervous system

13%

7%

17%

Muscle relaxants

24%4%

7%

GastrointestinalCardiovascularM9

2014

35%

Gynaecology

Total: EUR 738.0m

19

Female healthcare sales by regionM9 2014

Female healthcare sales by region

25%5%

12%

CEE

Hungary

CIS EURm

30025%

4%4%

Ex-GrünenthalportfolioChina

180

240

300

33%

6%11%

4%

USAEU15

LatAm

0

60

120

RoW

Gynaecological sales Non-gynaecological sales

Total: HUF 80.3bnEUR 260.0m

2020

Female Healthcare: Esmya® - phased launches IM9 2014

Female Healthcare: Esmya phased launches I.Reimbursement granted

Country Launch ReimbursedGermany Q1 12 Q1 12

Country Launch ReimbursedFrance Q3 13 Q3 13

United Kingdom Q2 12 Q2 12

Austria Q2 12 Q4 12

Denmark Q4 12 Q4 12

Spain Q4 13 Q3 13

Canada Q3 13 Q3 13

Finland Q4 13 Q4 13

Norway Q4 12 Q4 12

Hungary Q2 12 Q1 13

Sweden Q1 13 Q1 13

Luxemburg Q3 13 Q4 13

Switzerland Q4 13 Q4 13

Ireland Q1 14 Q1 14Sweden Q1 13 Q1 13

Slovakia Q3 12 Q1 13

Slovenia Q4 12 Q2 13

Ireland Q1 14 Q1 14

Bulgaria Q4 12 Q1 14

Portugal Q3 12 Q1 14

Netherlands Q3 12 Q2 13

Czech Republic Q2 12 Q3 13

Belgium Q3 13 Q3 13

Estonia Q3 12 Q3 14

Italy Q3 14 Q3 14

21

g

Female Healthcare: Esmya® - phased launches IIM9 2014

Launch without reimbursement

Female Healthcare: Esmya phased launches II.

Country LaunchUkraine Q4 13

Country LaunchPoland Q2 12

Croatia Q1 14

Armenia Q1 14

Uzbekistan Q1 14

Latvia Q3 12

Lithuania Q3 12

Romania Q3 12 Uzbekistan Q1 14

Serbia Q1 14

Tajikistan Q1 14

Romania Q3 12

Russia Q2 13

Belorussia Q4 13

Moldova Q1 14

Kyrgyzstan Q2 14

Azerbaijan Q3 14

Georgia Q4 13

Kazahstan Q4 13

Turkmenistan Q4 13 Azerbaijan Q3 14Turkmenistan Q4 13

22

Sales networkM9 2014

Sales network

staff1 800

1 200

1 400

1 600

800

1 000

1 200

400

600

0

200

2006 2007 2008 2009 2010 2011 2012 2013 13M9 14M9

CIS CEE Hungary EU15 ChinaCIS CEE Hungary EU15 China

23

Wholesale and retailM9 2014

Wholesale and retail

W&R sales contribution is 16% of total sales

71% of the W&R turnover originates in Romania

2424

Ownership structureM9 2014

Ownership structure

30 September 2014

Domestic investors

6.70%International

investors68.05%

6.70%

Hungarian State Holding Company

25.25%

2525

M9 2014

Thank you for your attention!y y

26

AppendixM9 2014

Appendix

Exchange rates

27

Evolution of currency exchange ratesM9 2014

Evolution of currency exchange rates

320

340HUF

280

300

220

240

260EUR/HUF

USD/HUF

180

200

220

28

Evolution of currency exchange ratesM9 2014

Evolution of currency exchange rates

EUR

50

51

52EUR

47

48

49

50

45

46

47

EUR/RUB

42

43

44

29

Exchange ratesM9 2014

Exchange rates

At i d dAt period end30.09.2014 30.06.2014 31.03.2014 31.12.2013 30.09.2013

EUR/HUF 310.36 310.19 307.06 296.91 298.48

USD/HUF 245.13 227.13 223.38 215.67 221.06

RUB/HUF 6 23 6 69 6 27 6 55 6 80

Average

RUB/HUF 6.23 6.69 6.27 6.55 6.80

M9 2014 H1 2014 Q1 2014 M12 2013 M9 2013

EUR/HUF 308.9 307.2 308.4 296.8 296.5

USD/HUF 227.8 224.1 225.0 223.4 225.1

RUB/HUF 6.4 6.4 6.4 7.0 7.1

30