Gedeon Richter (RICHTER) Q2 2024 earnings summary

Executive summary

• H1 2024 pharma revenues rose 14% YoY to HUF 413bn (EUR 1.06bn), with double-digit growth in CNS, Women's Healthcare (WHC), and Biotechnology (BIO) segments; GenMed rebounded in Q2.

• Achieved strong double-digit growth in three of four business units, with General Medicines rebounding in Q2; profitability improved across the business and full-year targets remain on track.

• Net profit more than doubled YoY to HUF 138.2bn, driven by higher operating profits and significant unrealized FX gains.

• Strategic acquisitions (Mithra, BCI Pharma, Formycon, Helm, Estetra, Neuralis) expanded R&D and product pipeline, especially in WHC.

• EMA acceptance of denosumab biosimilar file marks a milestone in biosimilar portfolio development.

Financial highlights

• H1 2024 CER revenue growth was 12.5%, with FX providing a 1.6ppt tailwind.

• Clean EBIT increased 21% YoY to HUF 136bn (EUR 348mn), with FX-adjusted Clean EBIT up 18%, in line with full-year guidance.

• Gross margin improved to 70.0% in H1 2024.

• Free cash flow before M&A more than doubled YoY to HUF 111bn; free cash flow surged 168.1% to HUF 111,353m.

• Return on equity rose to 19.6%, up 7.9ppt YoY.

Outlook and guidance

• Full-year 2024 guidance reiterated: pharma revenues (CER) expected to grow low-to-mid teens %, Clean EBIT (CER) EUR 725-750mn.

• On track to meet full-year ambitions and targets, supported by strong H1 performance and recent strategic acquisitions.

• M&A may add ~1ppt to sales growth in 2024 but could reduce EBIT by ~EUR 10mn in H2 due to Mithra R&D.