Richter GroupInterim Report, H1 2017

Budapest, 28 July 2017

* EURRUB FX impact: EUR 33 m

Total sales – growth factors

Reported Base Growth

EURm EURm EURm %

Consolidated 733 599 134 22

Russia 38*

EU15 28

USA 22

W&R (RO) 29

117

* Profit attributable to owners of the parent

Financial results – highlights

Reported Base Growth

EURm EURm EURm %

Gross profit 416 352 64 18

Profit fromoperations

104 85 19 23

Net financial (loss) / income

-13 15 -28 -

Profit for theperiod*

91 93 -2 -2

Specialty Projects –Current developments

• 19 May 2017: CHMP positive opinion onReagila®

• 19 July 2017: marketing authorization to Reagila® (cariprazine) granted by European Commission (EC)

3%

12%

7%3%

29%

45%

Sales of key specialty portfolio

• VraylarTM royalty: US$ 21.7m (EUR 20.0m)• CNS sales: EUR 92.0m, 15%

• ESMYA® sales: EUR 44.1 m• BEMFOLA® sales: EUR 17.6 m• WH sales: EUR 240.5m, 40%

ESMYA®

BEMFOLA®

VRAYLARTM

CNS – other

WH – other

Other

9%

18%7%

Sales of acquired portfolio

• Ex-Grünenthal portfolio sales: EUR 22.5 m• ESMYA® sales: EUR 44.1 m• BEMFOLA® sales: EUR 17.6 m

Subtotal: EUR 84.2 m

WH Total: EUR 240.5 m

Women’s Healthcare sales Ex-Grünenthal

portfolio

ESMYA®

BEMFOLA®

13%

18%

16%5%4%

7%2%

7%

3%

25%

Pharmaceutical sales by geographies

*Including Poland and Romania.

11%

16%

18%

4%7%6%

2%6%

3%

27%

HungaryRussia

EU12*

EU15

USA

Other CIS

Ukraine

RoW

LatAm

China

H1 2016 H1 2017

Hungary

Russia

EU15

USA

Other CIS

Ukraine

RoW

LatAmChina

Total: HUF 157.3 bnEUR 503.0 m

Total: HUF 188.0 bnEUR 607.5 m

+ 19.5% (HUF) + 20.8% (EUR)

EU12*

02000400060008000

100001200014000160001800020000

0

100

200

300

400

Russia• Sales

RUB 10,440.0m (+4.1%)EUR 166.7m (+29.9%)

• Increase in volume

• Improving product mix (highershare of WH products)

• Limited price increases implemented at the end of 2016

EURm

RUBm

Turnover of pharmaceutical segment.

Richter’s sales performance

+9.1%

020406080

100120140160180200

EU15

Turnover of pharmaceutical segment.

EURm

• SalesEUR 108.5m (+34.0%)

• Richter’s growth markets– UK– Spain– France

• Products with increasing sales dynamics– Esmya®

– Bemfola®

Richter’s sales performance

+13.5%

0

20

40

60

80

USA

USDm

Turnover of pharmaceutical segment.

• SalesUS$ 48.5m (+94.0%)

• VraylarTM royalty: US$ 21.7m• High level of Plan B / Plan B One-

Step sales• Increasing API sales

Richter’s sales performance

-1.1%

Pharmaceutical sales by therapeutic areas

Muscle relaxants

Gastrointestinal

Other

Women’s Healthcare

Central Nervous System

Cardiovascular

Total: EUR 607.5 m

15%

20%

40%

3%

6%

16%

24%

4%9%

38%

7%9%

3%

6%

Women’s Healthcare sales by region

EURm

Total: HUF 74.4 bnEUR 240.5 m

EU12*Hungary

CIS

USA

RoW

EU15

Grünenthalportfolio

China

LatAm

*Including Poland and Romania.

0

50

100

150

200

250

Gynaecological sales Non‐gynaecological sales

Sales networkstaff

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2012 2013 2014 2015 2016 H1 2016 H1 2017CIS CEE Hungary EU15 China LatAm

Wholesale and retail

• W&R contributes 19% to total sales

• 79% of the W&R turnover originates in Romania

• Sales increase in Romania– 35.7% in EUR terms

HUFm

0%10%20%30%40%50%60%70%80%90%

100%

W&R HUF Overall pharma sales HUF

REPORTING PERIODConsolidated Financials

Consolidated Financials –Highlights

*Net income attributable to owners of the parent.

HUF Change % EUR Change %

Total revenue 226.8 bn 21.1 732.9 m 22.4

Gross profit 128.8 bn 16.9 416.2 m 18.1

Profit from operations 32.3 bn 21.9 104.4 m 23.1

Profit for the period* 28.2 bn (2.9) 91.1 m (1.8)

EPS (diluted) 151 (3.2) 0.49 (2.0)

54%55%56%57%58%59%60%61%62%63%

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

COGS Gross profit Gross margin

Consolidated Financials –Decreasing gross margin

+ VraylarTM royalty+ Substantial sales growth in all

regions+ Appreciation of RUB exchange

rate against EUR and HUF (YoY) EUR RUB → 19.9%

– Price erosion on the traditionalmarkets

– Increasing costs related to tightening regulatory measures

– Increasing share of W&R– Esmya and Bemfola

amortization

HUFm

58.8%56.8%

S&M costsHUFm

0%

10%

20%

30%

40%

50%

60%

0

20 000

40 000

60 000

80 000

100 000

120 000

S&M costs S&M percentage of sales

R&D costsHUFm

0%

10%

20%

30%

40%

50%

60%

0

10 000

20 000

30 000

40 000

50 000

R&D costs R&D percentage of sales

0%2%4%6%8%10%12%14%16%18%20%

010 00020 00030 00040 00050 00060 00070 00080 000

Profit from operation Operating margin

Consolidated Financials –flat operating margin

– Decline of gross margin– Moderate increase of

operating expenses – One-off income in base

period related to theacquisition of Rxmidas

HUFm

14.1%14.2%

REPORTING PERIODCorporate Matters

Ownership structure

30 June 2017

Hungarian State Holding Company

Domestic investors

International investors

68.53%

25.25%

6.22%

Appendix I.

Individual Market Performances

CIS – sales performance and composition

EURm

Turnover of pharmaceutical segment.

0

100

200

300

400

500

Russia Ukraine Other CIS

• Ukraine– increasing sales levels

(+2.5 m in US$)– low sales levels in base period– market has stabilised to certain

extent– UAH depreciation

US$UAH: 5.2% (YoY)• Other republics

– sales increase(+2.0 m in EUR)

– improving economic and FOREX environment

Ukraine, Other republics

USDm

Turnover of pharmaceutical segment.

Richter’s sales performance

0

50

100

150

200

Ukraine Other CIS

Hungary

Turnover of pharmaceutical segment.

HUFbn• Sales

HUF 19,906 m (+0.9%)

• Stable pharmaceutical market

• Success of products launchedin recent years

Richter’s sales performance

0

10

20

30

40

53%

47%

EU* – composition of sales

• EU15– strengthening our position in

key Western-European markets

– own Women’s Healthcare sales and marketing network

• EU12**– well established in the region

for decades– own specialised sales network

*Turnover of pharmaceutical segment.**Including Poland and Romania.

EU15

EU12**

EU12*

EURm

Turnover of pharmaceutical segment.

*Including Poland and Romania.

• SalesEUR 96.4m (+6.5%)

• Increasing generic competition• Price erosion

• Poland:– 5.5% sales increase (PLN)– sales increase of Groprinosin

• Romania:– 14.5% sales increase (RON)– substantial price decreases

implemented by the Government

Richter’s sales performance

020406080

100120140160180200

China• Sales in H1 2017:

EUR 35.1 m (-0.6%)

• GR Rxmidas is 100% Richter owned since 2016

• Sales network personnel: 261

• Timing of shipments

EURm

Richter’s sales performance

0

10

20

30

40

50

60

70

80

Latin America• Sales* in H1 2017:

USD 11.6 m (+11.5%)

• Regional presence:

– Mexico, Colombia, Brazil

– Mediplus N.V. → Ecuador, Bolivia, Peru, Chile

• Women’s Healthcare products in focus

• Increase of ESMYA® sales

*Turnover of pharmaceutical segment.

USDm

Richter’s sales performance

0

5

10

15

20

25

Appendix II.

Exchange Rate Movements

Evolution of currency exchange rates I.

HUF

260

280

300

320

340

EURHUFUS$HUF

Evolution of currency exchange rates II.

EUR

55

60

65

70

75

80

EURRUB

Evolution of currency exchange rates III.

HUF

3,75

4,00

4,25

4,50

4,75

5,00

5,25

5,50

RUBHUF

Appendix –Exchange rates

At period end

Average

30.06.2017 31.03.2017 31.12.2016 30.09.2016 30.06.2016

EURHUF 308.87 308.70 311.02 309.15 316.16

USDHUF 270.87 288.64 293.69 276.35 284.29

RUBHUF 4.56 5.15 4.78 4.36 4.43

EURRUB 67.73 59.94 65.07 70.91 71.37

EURUSD 1.14 1.07 1.06 1.12 1.11

H1 2017 Q1 2017 M12 2016 M9 2016 H1 2016

EURHUF 309.42 309.10 311.46 312.23 312.67

USDHUF 285.26 290.24 281.24 279.64 279.95

RUBHUF 4.94 4.94 4.19 4.09 4.00

EURRUB 62.64 62.57 74.33 76.34 78.17

EURUSD 1.08 1.06 1.11 1.12 1.12