Gedeon Richter (RICHTER) Q4 2023 earnings summary

Executive summary

• FY2023 Pharma sales reached HUF 747.4bn (€1,956.8m), up 13.9%; clean EBIT rose 14.3% to HUF 235,335m despite significant FX headwinds.

• Double-digit volume growth across all four business units supported record sales; business-development deals expanded women’s healthcare and biotechnology portfolios.

• Management entered 2024 confident in the underlying business and committed to reaching more patients worldwide.

Financial highlights

• Total revenue was HUF 805,158m, up 0.3%; Pharma sales grew 13.9%, offset by lower turnover following the Romanian divestiture.

• Gross profit increased 13.2% to HUF 521,324m; reported operating profit rose 23.3% to HUF 189,364m.

• Net profit attributable to owners fell 6.0% to HUF 158,850m; EPS declined 5.2% to HUF 860.

• Free cash flow was HUF 86,554m, down 38.3%; CAPEX increased 32.2% to HUF 94,639m.

• Q4 revenue fell 9.3% to HUF 203,178m, while operating profit recovered to HUF 44,953m from a HUF 740m loss.

Outlook and guidance

• 2024 Pharma revenue guidance is €2.15–2.25bn, with low-to-mid-teens growth at constant exchange rates; clean EBIT guidance is €725–750m at constant exchange rates.

• Combined CNS, WHC and GM sales growth is expected to be ~10% in 2024; the R&D budget is planned to rise by ~€30m YoY.

• Vraylar is expected to deliver continued strong double-digit growth; AbbVie’s 2024 sales guidance is USD 3.4bn.

• Ryeqo sales are targeted to double to at least €30m in 2024; denosumab submission readiness and operation of the new German plant are targeted by year-end.

• Long-term RUB-related profitability impacts are expected to be addressed through pricing; short-term financial-income volatility is expected to continue.