Richter just did it in Q3/20
- Richter Gedeon (Richter) posted reported EBIT of HUF 29.96.1bn (+69% YoY) for Q3/20, implying a reported EBIT margin of 21.8% (+790 bps YoY). When adjusted for one-off milestone income, clean EBIT amounted to HUF 29.65bn (+40% YoY), on our estimate, significantly ahead of the consensus estimate and our forecast of HUF 25.7bn and HUF 25.6bn, respectively, mainly driven by higher than expected sales and lower than expected OpEx.
- Clean EBIT margin came in at 21.5% vs. 16.5% in the same period last year and the consensus estimate of 19.4%. Vraylar accounted for 73% of clean EBIT in Q3/20 vs.63% in Q3/19 on our calculation. Clean EBIT margin w/o Vraylar stood at 9.0% in Q3/20, up from 5.4% in Q2/20 and 8.7% in Q3/19 on our estimate.
- Clean operating results were predominantly driven by higher sales (+8% YoY in HUF) and high conversation margin on royalty income on Vraylar sales. Exchange rate movements had a slight positive impact of HUF 1.8bn (vs. HUF 8.0bn in Q2/20 and HUF 8.2bn in Q1/20), or ca. 1% on consolidated sales and 6% of clean operating profit in Q3/20.
- Reported net income was 22.6bn (+2% YoY), while clean net income amounted to HUF 22.3bn (-11% YoY) on our estimate compared to analysts’ estimates mean and our estimate of HUF 19.6bn and HUF 19.7bn, respectively. (POS)
- Richter earned HUF137.7bn in total revenue in Q3/20 (+8% YoY in HUF terms), 4% ahead of analysts’ expectations and our estimate, respectively. Sales growth was achieved as a result of higher royalty income from Vraylar in the U.S., WEU and ROW. CIS and CEE markets saw revenue tumble (both -5% YoY in HUF) on stiff competition, tightened pricing regulation and lower demand for generics. The weaker HUF against the EUR and USD did a little to improve sales on YoY comparison in HUF terms, while the weaker RUB weighted on sales growth.
- Pharmaceutial sales increased by ca. 9% YoY in HUF terms and accounted for 80.3% of total consolidated sales compared to 79.8% in the corresponding period a year earlier. WHC sales advanced by 11% in HUF terms and represented 34.8% of total pharmaceutical sales in Q3/20 vs. 34.1% in Q3/19, driven by WEU, which are made up a third of WHC sales, China, US and ROW.
Chemical Works of Richter Gedeon is a multinational pharmaceutical company that is engaged in the research, development, production and marketing and trade of pharmaceutical products. Co.'s activities are divided into two major business segments: Pharmaceutical, including research, development and manufacturing of pharmaceutical products; and Wholesale and Retail including wholesale and retail trade through the distribution chain as well as marketing of its products. Co. is primarily engaged in production of gynecological, cardiovascular and gastroenterological products, antibiotics, antimicotics, OTC and medicines for treatment of the central nervous system.
Concorde Securities Ltd. is Hungary’s leading independent company engaged in investment banking activities. It provides its clients with integrated financial services, including securities trading, research, corporate financing advisory, capital market transactions, wealth management and investment advisory. The operational management of the company is the responsibility of the CEO, while the owners/managers (who control one-third of the company through their shares and options) are in charge of its strategic governance. Concorde Securities Ltd. is a member of the Budapest, Frankfurt, Warsaw and Bucharest stock exchanges, as well as of the Hungarian Association of Investment Service Providers.
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