Regional multinational company

Corporate strategyCorporate strategy

Niche Niche market market playerplayer–– therapeutic niche - women’s healthcaretherapeutic niche - women’s healthcare–– geographic niche - geographic niche - CCEE, CISEE, CIS

LLong-term supply agreementong-term supply agreementss in EU / USA in EU / USA–– sophisticated chemistry knowledgesophisticated chemistry knowledge

Sound research and development activitySound research and development activity–– original research - focused exclusively on the CNSoriginal research - focused exclusively on the CNS–– developments - successful innovationsdevelopments - successful innovations

Licensing activityLicensing activity –– broadening of the existing product portfoliobroadening of the existing product portfolio–– beneficial partnerbeneficial partner

Good growth driven by gynaecology and cardiovascularGood growth driven by gynaecology and cardiovascular

GynaecologyGynaecology

Muscle Muscle relaxantsrelaxants

Gastro-Gastro-intestinalintestinal

Central Central Nervous Nervous SystemSystem

Cardio-Cardio-vascularvascular

OtherOther

H1 2006

17 %

24 %

7% 3%

21 %

28 %

1996

33 %

4%9%

16 %12%

26 %

Cardio-vascular

Gynaecology

Other

Central Nervous System

Gastro-intestinal Muscle

relaxants

US$US$ 410 410 mm US$US$ 247 m 247 mSales

Expanding gExpanding gynaecological businessynaecological business

Niche playerNiche player

Core expertise in steroid Core expertise in steroid

chemistrychemistry

WideWide range of women’s range of women’s

healthcare productshealthcare products

Continuous expansion Continuous expansion oon n

traditional markets traditional markets

FDA / EMEA compliant facilitiesFDA / EMEA compliant facilities

Long-term supply agreements Long-term supply agreements

– EU / USA– EU / USA

0

20

40

60

80

100

120

140

160

180

200

96 97 98 99 00 01 02 03 04 05 05 06

US$ mn

115

90

H1 H1

+ 28 %

185

One of the broadest gynaecological portfolioOne 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

Sales by pSales by product typroduct typee

Generic developmentGeneric development

– focusing on niches

– preparing for patent expiries

Original researchOriginal research

– focusing on CNS

Licensing activityLicensing activity

– beneficial partner

Reproduction / Generic

71 %

Own developed compounds

18 %

Licensed-in11 %

Source: Richter’s sales H1 2006

SalesSales (US$ (US$ m m))

14 % increase

US$ 410 m US$US$ 359 m 359 m

IFRS unaudited figures.

H1 H1 20020055

Hungary- 8 %

EU+ 14 %

USA+ 13 %

CIS+ 32 %

85

41 39

88

157Other

countries+ 16 %

H1 H1 20020066

Hungary EU

USA

CIS

93

36

78

34

118

Other Other countriescountries

0

50

100

150

200

250

96 97 98 99 00 01 02 03 04 05 05 06

Other republicsUkraineRussia

US$ m

CIS CIS –– continuous dynamic growth continuous dynamic growth

+ 32 %

216

118

H1 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

Russia – the Company’s largest marketRussia – the Company’s largest market

Subsidy programme (DLO)

– new reimbursement list from 1 January 2006

– about US$ 1.0 bn allocated for 2006 – at retail price level

– H1 2006 – appr. US$ 20 m

Protek – changes to invoicing procedures

– Q1 2006 – about US$ 10 m

0

20

40

60

80

100

120

140

04 05 06

Protek - changes to Invoicing procedures

DLO programme

Private market

Russia – sales breakdownRussia – sales breakdown

US$ million

119

93

5663

30

89

20

10

H1 H1 H1

56

0

50

100

150

200

250

300

350

400

450

500

96 97 98 99 00 01 02 03 04 05 06

Russia Ukraine Other republics

Number of sales stuff

Total: 140

Total:700

H1

Expansion of sales network in the CIS regionExpansion of sales network in the CIS region

US$ m

0

20

40

60

80

100

96 97 98 99 00 01 02 03 04 05 05 06

Finished productsBulk products

USAUSA

+ 13 %

34

70

H1H1

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

Balanced business model - two major export marketsBalanced business model - two major export markets

0

50

100

150

200

250

93 94 95 96 97 98 99 00 01 02 03 04 05 H105

H106

US$ m

Russia USA

EU 25EU 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

0

10 000

20 000

30 000

40 000

50 000

96 97 98 99 00 01 02 03 04 05 05 06

HUF m

Richter in HungaryRichter in Hungary

Unfavourable economic

environment

Flat sales

Success of new products

– renewal of product portfolio

– 70 % of domestic sales

40 800

H1

17 900

H1

18 000

Gross and operating marginsGross and operating margins

62.961.661.3

26.523.3 24.5

10

20

30

40

50

60

70

96 97 98 99 00 01 02 03 04 05 H105

H106

%

Gross marginOperating margin

Profit after taxationProfit after taxation

HUF m

0

10 000

20 000

30 000

40 000

50 000

96 97 98 99 00 01 02 03 04 05 05 06

0

50

100

150

200

250

300

96 97 98 99 00 01 02 03 04 05 05 06

US$ m

43 600

218

99

19 200

H1 H1H1H1

30 000

142

+ 56 %

+ 42 %

Capital expenditureCapital expenditure

0

5 000

10 000

15 000

20 000

25 000

30 000

96 97 98 99 00 01 02 03 04 05 05 06

HUF m

0

20

40

60

80

100

120

140

96 97 98 99 00 01 02 03 04 05 05 06

US$ m

7 500 39

12925 800

H1H1 H1 H1

6 400 30

Ownership structure on 30 June Ownership structure on 30 June 20020066

ÁPV ÁPV LtdLtd. . (Hungarian Privatisation (Hungarian Privatisation

and State Holding Company)and State Holding Company)

2525.0.0 % %

Domestic Domestic investorsinvestors

9.09.0 % %

International International investorsinvestors

666.06.0 % %

The only independent Hungarian pharmaceutical companyThe only independent Hungarian pharmaceutical company

THE RICHTER GROUP

Gedeon Richter-RUSGedeon Richter-RUS

Greenfield investment establishedGreenfield investment established –– 19961996

LocationLocation –– 100 km southeast from Moscow100 km southeast from Moscow

Strategic goalStrategic goal –– added local valueadded local value

Ongoing investments – connected to the DLO programme Ongoing investments – connected to the DLO programme – – expansion of the packaging facilityexpansion of the packaging facility –– upgrading of some production lines, equipments and laboratoriesupgrading of some production lines, equipments and laboratories –– enhancement of storage capacityenhancement of storage capacity

GZF PolfaGZF Polfa

Acquisition in PolandAcquisition in Poland–– November 2002November 2002

Strengthening of market presence in Central and Eastern EuropeStrengthening of market presence in Central and Eastern Europe–– a key element of Richter’s strategya key element of Richter’s strategy– – Poland – 3Poland – 3rdrd largest export market after Russia and USA largest export market after Russia and USA

Transaction rationaleTransaction rationale–– complementary product portfolio complementary product portfolio

–– GMP-compliant facilitiesGMP-compliant facilities

–– favourable location: 35 km southwest from Warsawfavourable location: 35 km southwest from Warsaw

Ownership ratioOwnership ratio– – since 2006 June: 70 %since 2006 June: 70 %

Gedeon Richter RomaniaGedeon Richter Romania

AcquisitionAcquisition–– May 1998May 1998

Major therapeutic areasMajor therapeutic areas– – central nervous system, cardiovascularcentral nervous system, cardiovascular

Capital expenditure programmes Capital expenditure programmes – – manufacturing facility to comply with GMP standardsmanufacturing facility to comply with GMP standards– regional development centre – regional development centre

Main areas of focus in 2006Main areas of focus in 2006–– first deliveries to Western European marketsfirst deliveries to Western European markets–– further expansion of sales and marketing teamsfurther expansion of sales and marketing teams

Richter-Themis Ltd.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 facilitiesBuilding upon new facilities– operation started gradually from early 2006

Unconsolidated sales of key subsidiariesUnconsolidated sales of key subsidiaries

H1 2006 H1 2005 Growth

US$ m US$ m %

GZF Polfa 28.4 26.0 9.2

Gedeon Richter Romania 9.7 8.5 14.1

Gedeon Richter-RUS 8.7 4.2 107.1

Consolidated Parent Consolidated / Parent HUF m HUF m %

Total sales 104 621 86 765 120.6

Gross profit 62 215 54 567 114.0

Operating profit 23 239 21 260 109.3

Net profit 31 449 29 959 105.0

Comparative figures –Comparative figures – H1 2006 H1 2006

IFRS unaudited figures.