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Regional multinational company Corporate strategy Niche market player Niche market player – therapeutic niche - womens healthcare – geographic niche -

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Presentation on theme: "Regional multinational company Corporate strategy Niche market player Niche market player – therapeutic niche - womens healthcare – geographic niche -"— Presentation transcript:

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2 Regional multinational company Corporate strategy Niche market player Niche market player – therapeutic niche - womens healthcare – geographic niche - CEE, CIS Long-term supply agreements in EU / USA Long-term supply agreements in EU / USA – sophisticated chemistry knowledge Sound research and development activity Sound research and development activity – original research - focused exclusively on the CNS – developments - successful innovations Licensing activity Licensing activity – broadening of the existing product portfolio – beneficial partner

3 Good growth driven by gynaecology and cardiovascular Gynaecology Muscle relaxants Gastro- intestinal Central Nervous System Cardio- vascular Other H % 24 % 7% 3% 21 % 28 % % 4% 9% 16 % 12% 26 % Cardio- vascular Gynaecology Other Central Nervous System Gastro- intestinal Muscle relaxants US$ 410 mUS$ 247 m US$ 410 m US$ 247 m Sales

4 Expanding gynaecological business Niche player Niche player Core expertise in steroid chemistry Core expertise in steroid chemistry Wide range of womens healthcare products Wide range of womens healthcare products Continuous expansion on traditional markets Continuous expansion on traditional markets FDA / EMEA compliant facilities FDA / EMEA compliant facilities Long-term supply agreements – EU / USA Long-term supply agreements – EU / USA US$ mn H % 185

5 One of the broadest gynaecological portfolio Oral contraceptives –third- and second-generation Emergency pills Hormone Replacement Therapy –tablets, patches Antifungals –tablets, cream Other gynaecological products APIs

6 Sales by product type Generic development –focusing on niches –preparing for patent expiries Original research –focusing on CNS Licensing activity –beneficial partner Reproduction / Generic 71 % Own developed compounds 18 % Licensed-in 11 % Source: Richters sales H1 2006

7 Sales (US$ m) 14 % increase US$ 359 m US$ 410 m US$ 359 m IFRS unaudited figures. H Hungary - 8 % EU + 14 % USA + 13 % CIS + 32 % Other countries + 16 % H Hungary EU USA CIS Other countries

8 US$ m CIS – continuous dynamic growth + 32 % H1 157 Favourable market conditions - stable political and economic environment - high crude oil and natural gas prices Increasing proportion of new products: 38 % Russia: DLO programme continues

9 Russia – the Companys largest market Subsidy programme (DLO) – new reimbursement list from 1 January 2006 – about US$ 1.0 bn allocated for 2006 – at retail price level – H – appr. US$ 20 m Protek – changes to invoicing procedures – Q – about US$ 10 m

10 Russia – sales breakdown US$ million H1 56

11 Number of sales stuff Total: 140 Total: 700 H1 Expansion of sales network in the CIS region

12 US$ mUSA + 13 % H1 39 Sales increase from a low base Steroids – supply agreements Barr Labs. J&J – several APIs Generic business lisinopril, famotidine, spironolactone increasing competition, decreasing prices

13 Balanced business model - two major export markets

14 EU 25 Former EU 15 Sales via partners Finished and API shipments Continual preparation for patent expiries appr. 1/3 of EU 25 sales New members from Central and Eastern Europe (PL, CZ, SK, Baltic S.) Own sales network Finished product supplies New product launches appr. 2/3 of EU 25 sales Main drivers of growth in both areas Gynaecology Portfolio renewal Focused marketing strategies

15 HUF m Richter in Hungary Unfavourable economic environment Flat sales Success of new products – renewal of product portfolio – 70 % of domestic sales H H

16 Gross and operating margins

17 Profit after taxation HUF mUS$ m H % + 42 %

18 Capital expenditure HUF m US$ m H

19 Ownership structure on 30 June 2006 ÁPV Ltd. (Hungarian Privatisation and State Holding Company) 25.0 % Domestic investors 9.0 % International investors 66.0 % The only independent Hungarian pharmaceutical company

20 THE RICHTER GROUP

21 Gedeon Richter-RUS Greenfield investment established Greenfield investment established – 1996 – 1996 Location Location – 100 km southeast from Moscow – 100 km southeast from Moscow Strategic goal Strategic goal – added local value – added local value Ongoing investments – connected to the DLO programme Ongoing investments – connected to the DLO programme – expansion of the packaging facility – expansion of the packaging facility – upgrading of some production lines, equipments and laboratories – upgrading of some production lines, equipments and laboratories – enhancement of storage capacity – enhancement of storage capacity

22 GZF Polfa Acquisition in Poland Acquisition in Poland – November 2002 Strengthening of market presence in Central and Eastern Europe – a key element of Richters strategy Strengthening of market presence in Central and Eastern Europe – a key element of Richters strategy – Poland – 3 rd largest export market after Russia and USA Transaction rationale – complementary product portfolio Transaction rationale – complementary product portfolio – GMP-compliant facilities – favourable location: 35 km southwest from Warsaw Ownership ratio Ownership ratio – since 2006 June: 70 %

23 Gedeon Richter Romania Acquisition Acquisition – May 1998 Major therapeutic areas – central nervous system, cardiovascular Major therapeutic areas – central nervous system, cardiovascular Capital expenditure programmes Capital expenditure programmes – manufacturing facility to comply with GMP standards – regional development centre Main areas of focus in 2006 Main areas of focus in 2006 – first deliveries to Western European markets – further expansion of sales and marketing teams

24 Richter-Themis Ltd. Joint venture established Joint venture established – Richter-Themis Medicare Private Ltd. – 51 % stake – August 2004 Manufacturing Manufacturing – APIs and intermediates Strategic goal Strategic goal – to increase synthetic capacity in a highly competitive environment Building upon new facilities Building upon new facilities – operation started gradually from early 2006

25 Unconsolidated sales of key subsidiaries H1 2006H1 2005Growth US$ m % GZF Polfa Gedeon Richter Romania Gedeon Richter-RUS

26 Consolidated Parent Consolidated / Parent HUF m HUF m % Total sales Gross profit Operating profit Net profit Comparative figures – H IFRS unaudited figures.

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