Concorde Securities - Chemical Works of Gedeon Richter Plc (RICHTER) Q3 results were strong despite FX headwinds and extra taxes

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Concorde Securities

Gabor Bukta

Q3 results were strong despite FX headwinds and extra taxes

Richter posted clean EBIT of HUF 49.4bn (-24% YoY) on net sales HUF 188.5bn (-13% YoY) for Q3/23. Clean EBIT was 8% ahead of the consensus estimate of HUF 45.8bn and our estimate, respectively, while net revenue was broadly in line with both the consensus forecast of HUF 191.3bn and our estimate. As a result, clean EBIT (incl. extra taxes) margin stood at 19.8% compared to consensus estimate of 26.2% (-350bps YoY) and was better than the consensus estimate of 23.9%.

In Q3 Richter recorded HUF 9.6bn extra tax levied on the pharmaceutical industry. Clean net income came in at HUF 54.6bn (-34% YoY) vs. the consensus estimate of HUF 41.9bn and our estimate of HUF 43.9bn profit.

13/11/2023 5 EN

Underlying

Chemical Works of Gedeon Richter Plc

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.

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HU0000123096 Budapest Stock Exchange Hungary

Provider

Concorde Securities

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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Analysts

Gabor Bukta

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Q3 results were strong despite FX headwinds and extra taxes

Guidance unchanged, clean EBIT beat estimates

Guidance reiterated after a strong Q2 performance

Massive Q1 beat on FX gains, guidance reiterated

Encouraging top line with weak profitability, while Mobility outperforms

Consistent growth in Q3, net profit boosted by Spanish network sale

Record net profit in Q3, guidance maintained

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