Gedeon Richter (RICHTER) Q3 2024 earnings summary

Executive summary

• Pharma revenues grew 14.5% YoY to HUF 627bn (EUR 1.6bn) in Q1–Q3 2024, with all segments achieving double-digit sales growth; clean EBIT rose 18% YoY to HUF 209bn, and net profit surged 43% YoY to HUF 175bn.

• Free cash flow more than doubled YoY to HUF 164bn, supported by strong operations, no FX losses, and absence of special taxes; net cash increased by HUF 40bn in Q3.

• Major business developments included new R&D and license agreements with AbbVie, the Mithra acquisition, and the launch of a new biopharmaceutical facility.

• The company moved into a new, award-winning headquarters in Budapest, emphasizing sustainability and diversity.

Financial highlights

• Q1–Q3 2024 pharma revenues: HUF 627bn (+14.5% YoY); CER revenue growth +12%.

• Clean EBIT: HUF 209bn (+18% YoY); CER Clean EBIT +16% to EUR 537mn.

• Net profit: HUF 175.3bn (+43% YoY); EPS: HUF 959 (+45.1% YoY).

• Free cash flow: HUF 164.1bn, more than doubling YoY; net cash position improved in Q3.

• Gross margin slightly declined to 69.5% (–0.9ppt YoY); operating expenses up 13% YoY, with R&D up 18% and S&M up 10%.

Outlook and guidance

• FY 2024 pharma revenues expected to grow low-to-mid teens % (EUR 2.15–2.25bn); clean EBIT guidance EUR 725–750mn.

• Guidance remains within reach, though at the lower end of the previously provided interval due to M&A and R&D impacts.

• CER revenue growth guidance maintained; FX now a tailwind (+2.5ppt).

• Biotechnology business is converging toward break-even by 2027, with profitability expected beyond that.

• R&D milestone income and M&A impacts expected to add to original guidance.