Gedeon Richter Ltd S/Gdr

So, good morning again and a very warm welcome to Gedeon Richter's first quarter 2026 conference call. My name is Robert Reti, Head of Investor Relations in ESG, the company, and it's my pleasure to welcome two members of the senior leadership team with me today for this call. László Kovács, Chief Financial Officer, and Tomáš Sojak, our Chief Commercial Officer. And the reason why Gabor is not with us, Gabor Orban, our CEO, is that he's on a business trip to Japan meeting our partners in this important country. Before we start the meeting, let me just quickly walk you through the usual technical details. We will be using presentation slides. This presentation is downloadable from our website, getonrichter.com. This is what we published this morning along with our results. The formal presentation will be followed by usual Q&A where you will have an opportunity to ask questions either through the raise your hand functionality of Microsoft Teams or in the chat box. And finally, just to remind you, this poll is recorded and I also want to draw your attention to the usual cautionary statement regarding potential forward-looking statements this presentation may include. And with that, let me hand it over to László, who will present the details of the last three months.

Thank you. Thank you. Thank you, Robi. The first quarter of 2026 was eventful and broadly in line with our expectations. The strong momentum continued across our innovative businesses, more notably CNS supported by the sustained outstanding performance of Raylar and by solid revenue contribution from biotech segment. This was partially offset by a softer than planned start of the year in case of women's healthcare, which was largely driven by delivery timing effects and in case of general medicines by multiple internal and external headwinds that affected our business. Despite the top-line pressures, clean ebit growth exceeded our initial expectations, supported by milestone income and the continuing benefits of our long-term cost management efforts. We once again reduced our operating cost base, with the sole exception of cost of goods sold, and delivered second highest free cash flow generation. Currency movements continue to weigh on our reported results, primarily impacting ROE and EPS figures, while at the same time a visible improvement in Hungary's country's premium and bond yields started to emerge during the quarter. Okay, but what does it mean for the rest of the year and further ahead? Following this very eventful first quarter, we remain confident that we are on the right track to deliver our high single-digit revenue and clean a bit growth target calculated on constant exchange rates for the full year 2026 and therefore reiterate our guidance. You can see a clear gap between the reported figures and the constant exchange rate figure. That gap will be there. It's significant if you're talking about the clean a bit figures. If the same ethics rates would be fixed for the rest of the year, a difference of 7-8% each point between the reported figures and the CER figures could persist. Looking ahead, we are particularly excited about a number of important value drivers. These include the upcoming launch of FiRevit. This is the first formal innovation in menopause for decades. The increasing contribution of our biosimilar portfolio, which may further narrow the gap to profitability in biotech, and our continued progress in joint R&D projects together with AbbVie. These elements reinforce our confidence in the sustainability of our growth and profitability trajectory beyond 2026. Supported by our exceptional free cash flow generation, 77 billion Hungarian Forints in this quarter, we will begin distributing the dividends June, while we remain fully committed to identify and execute the most compelling acquisition opportunities in line with our long-term value creation strategy. Now, in this quarter, let me share a few thoughts about everything that is beyond our financial performance, because expanding the access to health remains a core part of our mission. In women's healthcare, we continue to strengthen our original research pipeline. We targeted acquisitions and partnerships while significantly expanding our early-stage research capabilities. A major milestone ahead is the launch of FiRevi, which I just mentioned, which will be supported by patient awareness and, very importantly, educational initiatives across multiple countries. Since the launch of RiEco, RiEco has reached approximately 100,000 patients in the treatment of endometriosis. This was helping many women avoid invasive surgery. This also reduces medical risk and these women could remain active in the workforce and I think they can achieve a meaningful improvement in the quality of life. In CNS, our numbers are even more remarkable. Since only in 2025 alone, over 745,000 patients were treated in Europe and in the US and since launch this number goes beyond 2 million patients. This is extraordinary numbers. At the same time, our biotech and genmed portfolio play a critical role in improving access to affordable therapies. Recent biosimilar approvals in Europe and in the US and the advancement of multiple clinical programs can further support the broader patient reach. And last but not least, let me also mention that beyond our normal commercial activities, we also continue to contribute to access in underserved regions, including the distribution of more than 5 million units of emergency contraception through NGO partnerships.

I'd like to give an overview about the performance, business unit by business unit. Our quota of ungrowth was broadly in line with our expectation, though overall performance remained a few percentage points below target. Our plans have already incorporated the impact of shipment rescheduling related to the transition to new warehouse, and certainly to ensure uninterrupted patient supply, part of the shipment was brought forward into Q4 2025, which had a negative carryover effected on Q1 2026 with this quarter. This timing effect impacted mostly two business units, women health care and largely the general medicine business unit. Keeping general medicine business unit in the focus, additional external factors weighed on performance. First of all, the termination of an in-license product in 2025 with Rinaldim created an approximately 2% revenue gap that had to be absorbed in Q1. Furthermore, several key assumptions did not materialize. The flu season proved weaker than anticipated and identified risk that unfortunately materialized as risk, resulting in an approximately 3.5 percentage point negative variance versus the prior year and significantly affecting our GMAT growth opportunity. In addition, a product which went on the go on the event patient safety evaluation ultimately led to withdrawal of marketing authorisation across all markets basically, despite the ever strong scientific rationale to maintain restricted use in some major countries. In Uzbekistan, the introduction in this year, a new system, it is a reference pricing system combined with INM prescription, had a more pronounced market impact than expected, anticipated by us, resulting in up to a further 2 percentage point headwinds. Overall, These combined pressures outweighed the positive contribution from the therapeutic areas, where our performance was good, blood and metabolic, and the other therapeutic area, pain and neurology, and altogether we had an 8% decline in the GEMMET portfolio. Despite this decline, I'd like to highlight the performance in blood and metabolic therapeutic area. This continues to strengthen. Dovigatran, it maintains its leadership position across multiple markets. Adoxaban, after Roche, it reached the number one position in Hungary. In pain and neurology, we are regaining the market share through focused promotional efforts and a sustained supply right now. Women healthcare. Core product performance remained strong. Key brands including Rieco, including Evro, Drovelis and Lanzetto continue to deliver solid momentum, reinforcing our commitment to improve women's quality of life. One important element was in the APEC region that we had a delay of emergency contraception delivery from Q2. Altogether, we are absolutely confident that the Women Healthcare Business Unit will deliver double-digit growth by year-end. Underlying effects. 60 plus percent growth in the Q1. Very important that we are treating continuously new patients. The patient pick-up is very, very high for this product. Drovalis, 20 plus percent growth, gaining significant market share, a largely fat market. Preparations for a field-ready launch are progressing very well. We have phased market entries starting in Q2. So the underlying effect tells us that we will have a very strong performance again in the women healthcare portfolio this year. CNS has delivered a strong performance. Vrylar achieving 90% year-on-year growth, driven by robust prescription demand in both bipolar disorder and adjunctive MDD. Our own market, when we are looking to those markets where we are present, sales grew by 33%. It was supported in somewhat of a part reintegration of selected markets, which we took back from our partners. In the meantime, the partner sales unfortunately declined, but this is purely due to the shipment timing and it will recover by the end of the year. BBU growth had two major elements. One is the growth of the TerraParatide franchise. The second one is the new product launches. TerraParatide achieved a 10% growth on the markets where we are managing the product all together. And in the meantime, the partners had very, very strong performance as well. What we assume that this momentum persists in the near term for the partners. However, shipment volumes may moderate later in the year. Getting back to the new launches, it's important to see that they contributed nearly the same absolute growth as the Terry Poratide franchise. We have to very closely monitor the different market archetypes to maximize the potential, because we do see that in some EU archetypes, market archetypes, the price challenge is very, very significant. Looking ahead, we expect a strong performance and a double-digit growth from our innovation pillar, and we anticipate that the biotech launches through the year and the teriparatide performance will offset the negative Q1 impact in GMAT, and we are expecting to deliver a solid single-digit growth. Here we would focus mostly the reported revenues which declined basically one percentage point. This was mainly driven by a very strong foreign exchange rate headwind. The gap between the reported and the constant exchange rate performance was around 7 percentage points, and we accept that this level will broadly persist throughout the whole year, just reinforcing the message of, let's see, we might see some changes in it, but basically this is our expectations for this year. What we have seen that the US dollar has been winking since the second quarter of last year, while the stronger Hungarian foreign continues to impair or reported figures across all other currencies. If you're looking to performance in a geographical setup, we can see that Central and Eastern Europe performance had been mostly affected by the general match in business unit what we detailed. In North America, we had a 4.4% growth altogether. This is almost entirely driven by the weakening US dollar. APEC, we mentioned as well, the Q1 important impact. What I would like to add to the expectations of this geographical area is that we rationalize our investment into this geographical area. We are focusing on lowering the investment and getting much better return, which will probably impact the expectation till year-end in revenue too. Overall, the currency movements weighed heavily on the reported revenues. What we have seen from the geographical trend that they remained very much consistent with our strategic focus. We do see that innovation is a key driver of our sales and growth across all regions and I would like to add that our recent launches and the further market entries within the affordable pillar, the affordable portfolio, will boost our growth rate in the strategic horizon. Thank you very much.