Richter Publicly Traded For 20 Years – a Hungarian Success Story

The shares of Gedeon Richter Plc. were admitted to trading at the Budapest Stock Exchange 20 years ago. In the two decades since then, the price of the company’s shares has showed a 28-fold increase, while Richter has become the third highest-turnover security of the Hungarian stock market. The last twenty years of Richter is a true success story both for stock exchange investors and the Hungarian economy: the pharmaceutical company’s sales revenue has grown more than 15-fold, its profit-after-tax 10-fold, and the number of employees 2.5-fold since listing.

Two decades ago, on 9 November 1994, the shares of Gedeon Richter Plc. were admitted to trading at Budapest Stock Exchange at a listing price of HUF 1,330 (corresponds to HUF 133 at current price after split). Established in 1901, Richter has gone a long way both on the stock exchange and in the pharmaceutical industry. Since flotation, the company’s securities have become the third highest-weighting share of the BUX Index; Richter’s market capitalisation amounts to HUF 695 billion at current share price. Since its listing, the share price has grown 28-fold and the company paid dividend in the amount of approximately HUF 162 billion on its ordinary shares. Since listing, more than 400 million Richter shares have been traded in approximately 2.2 million deals in the amount of approximately HUF 6,621 billion.

A key moment in Richter’s stock exchange history was when the management approved a 10-for-1 stock split in the summer of 2013 (nominal value dropped from HUF 1,000 to HUF 100, thus each investor received 10 shares instead of 1). This measure had a positive effect on the turnover of Richter shares and, according to the analysts, also gave a boost to share price. Since flotation, Richter has been listed in Budapest Stock Exchange’s highest share category, since 2013, the Premium Market.

Richter has proved to be a true success story for institutional and private stock exchange investors alike, as well as for the Hungarian economy: Richter has become the largest domestic pharmaceutical manufacturer and a major multinational corporate group. Since 1994, its sales revenue has increased 16-fold (HUF 351 billion in 2013), its profit-after-tax 10-fold (HUF 42.4 billion in 2013) and its dividend per share 9.5-fold (HUF 57). There has also been a significant boost in the number of Richter’s employees: in 2013 the company had approximately 12 thousand employees in comparison to 4.5 thousand in 1994.

‘It was a good decision that privatization was performed in 1994 by going public with Richter. This way the two most important criteria: transparency and raising capital have been met at once. For our company, stock exchange presence made it clear that the primary duty of our management and all the employees is increasing shareholder value, a constant improvement of performance and, again, transparency. It’s good to know that with our performance we earned our shareholders’ trust and the company’s headquarters remained in Hungary. We are also proud of our substantial contribution to national economy. We’ll make all efforts to meet our investors’ reasonable expectations and enhance the prestige of the Budapest Stock Exchange in the future. I hope that the number of Hungarian investors will gradually increase,’ said Erik Bogsch, CEO of Gedeon Richter Plc. on occasion of the 20-year anniversary.

’Richter’s success in the last two decades has been a highly positive example for the entire Hungarian capital market. The company is not only a gem of the Hungarian economy and stock exchange, but a key international player as well. I trust that the company will remain an example to Hungarian enterprises to follow in the future. On behalf of Budapest Stock Exchange, I wish the company many more successful decades and satisfied investors,’ said Zsolt Katona, CEO of Budapest Stock Exchange.

– press release – 

Source: https://www.richter.hu/