Richter Q126 Review
▪ Richter's 1Q 26 revenue declined 2% y/y to HUF 220bn, missing analyst consensus by 6%. On a CER basis, revenue grew 6%, but still fell short of management's high-single-digit growth target.
▪ The appreciation of the Hungarian forint in 1Q exerted a total negative FX impact of HUF 15bn (7%) on revenue.
▪ The Generic Medicine (GM) segment declined 8.5% on a CER basis and 12% on a reported basis, weighed down by the absence of a flu season (–HUF 5bn) and mandatory reference pricing in Uzbekistan (–HUF 2bn).
▪ Vraylar remained the key growth driver in the Central Nervous System (CNS) segment, while the Biosimilars (BIO) segment turned profitable on the back of the denosumab ramp-up (HUF 1bn vs. –HUF 6bn in 1Q 25).
▪ CER adjusted EBIT grew by 15% y/y, though FX effects narrowed this to just 2% reported growth (HUF 70bn). Results were further supported by HUF 4bn in milestone revenues.
▪ R&D expenses declined 4% owing to disciplined cost management; lower Biosimilars segment costs offset higher Women’s Healthcare (WHC) R&D spending.
▪ Net income decreased 4% to HUF 65bn, while the company generated HUF 77bn in free cash flow during the quarter.
▪ Management cautioned that should current FX levels persist, significant – largely unrealized – foreign exchange losses are expected in Q2, related to working capital items.
▪ The management kept its 26 guidance unchanged.