Recordati S.p.a. · MIL:REC
Recordati — Q1 2004 Earnings Presentation
22 slides from Recordati's earnings presentation, May 6, 2004
Slide 1: Expanding pharma operations
Expanding pharma operations Milan, 6 May 2004
Slide 2: Operational highlights first quarter 2004
Operational highlights first quarter 2004 • Pharmaceutical sales up 5.8% • Lercanidipine sales up 36.9% • Net income up 28.4% • 20mg strength of lercanidipine launched in a total of nine markets to date • First steps taken to reorganize the pharmaceutical chemical business, EBIT at break even • A ne
Slide 3: Composition of sales
Composition of sales (million euro) 1Q 2003 1Q 2004 Change % PHARMACEUTICALS 109.5 115.9 5.8% 86.3% 90.2% PHARMACEUTICAL 17.4 12.6 (27.8)% CHEMICALS 13.7% 9.8% TOTAL 126.9 128.5 1.2% 100.0% 100.0% ITALY 58.8 58.9 0.1% 46.3% 45.8% INTERNATIONAL 68.1 69.6 2.2% 53.7% 54.2% 2
Slide 4: Sources of growth
Sources of growth (% change, first quarter 2004 over Volume Price Exchange Total first quarter 2003) PHARMACEUTICALS 6.6 % (0.2) % (0.6) % 5.8 % PHARMACEUTICAL (23.4) % (0.1) % (4.3) % (27.8) % CHEMICALS TOTAL CHANGE 2.5 % (0.2) % (1.1) % 1.2 % 3
Slide 5: Composition of pharmaceutical sales
Composition of pharmaceutical sales (million euro) 1Q 2003 1Q 2004 Change % Pharmaceuticals Italy 56.1 57.2 1.9% Pharmaceuticals France 23.3 24.9 6.8% Pharmaceuticals Spain 5.3 5.9 11.8% International licensees 17.4 21.0 20.6% Sophartex 7.4 6.9 (6.3)% TOTAL PHARMACEUTICALS 109.5 115.9 5.8% 4
Slide 6: Breakdown of first quarter 2004 pharmaceutical sales
Breakdown of first quarter 2004 pharmaceutical sales International licensees Spain 18% 5% Sophartex France 6% 22% Italy 49% 5
Slide 7: Lercanidipine sales
Lercanidipine sales (million euro) 1Q 2003 1Q 2004 Change % Italy 8.0 10.9 35.5% France 2.8 4.9 74.6% Spain 1.4 1.2 (7.9)% DIRECT SALES 12.2 17.1 39.7% 58.4% 59.6% SALES TO LICENSEES 8.7 11.6 32.9% 41.6% 40.4% TOTAL LERCANIDIPINE 21.0 28.7 36.9% SALES 100.0% 100.0% 6
Slide 8: % share of CCB market
Lercanidipine as a % of all calcium channel blockers Bubble size represents $ market value of CCB’s 12 France % share of CCB market Germany Italy 10 Austria 8 Australia S.Korea 6 Spain Belgium 4 U.K. 2 Holland 0 0 2 4 6 8 10 12 14 16 18 20 22 24 26 Quarters from launch Source: IMS data - 4Q 2003 7
Slide 9: Main products
Main products Breakdown of 12 months pharmaceutical sales at March 2004 Zanidip (lercanidipine) 23% 11% Elopram/Entact (citalopram/es) 8% Peptazol/Ulcotenal (pantoprazole) Other Products 4% Tora-Dol (ketorolac) 22% Main 4% Hexa line (biclotimol) Products 3% Exomuc (acetylcysteine) 3% Isocef (ceftibu
Slide 10: First quarter results
First quarter results (million euro) 1Q 2003 1Q 2004 Change % Net Sales 126.9 128.5 1.2% Gross Profit 73.4 79.4 8.2% as % of sales 57.8% 61.8% Selling Expenses 39.6 43.0 8.7% as % of sales 31.2% 33.5% R&D Expenses 8.9 9.4 as % of sales 7.0% 7.3% 5.7% EBITDA 25.2 26.3 as % of sales 19.9% 4.0% 20.4% E
Slide 11: EBIT by business area
EBIT by business area (million euro) 1Q 2003 1Q 2004 Change % PHARMACEUTICALS 18.6 20.1 8.2% as % of sales 17.0% 17.3% PHARMACEUTICAL CHEMICALS (0.4) 0 n.s. as % of sales* (1.9)% (0.1)% TOTAL EBIT 18.2 20.1 10.5% as % of sales 14.3% 15.6% * Including inter-company sales 10
Slide 12: Capital employed
Capital employed (million euro) 31 December 2003 31 March 2004 4.4 21.4 Net working capital 71.7 for operations Net non-current 75.6 assets 227.9 Net debt or cash 241.3 177.6 Shareholders’ equity 161.3 Capital employed: 249.3 Capital employed: 236.9 11
Slide 13: Cash flow
Cash flow (million euro) 1Q 2003 1Q 2004 Net income 9.9 12.7 Depreciation of fixed assets 4.2 3.5 Amortization of intangible assets 2.8 2.6 Cash Flow from Operations 16.9 18.8 Change in working capital 7.8 (3.9) Changes in non-current items (0.5) (2.0) Net investments in fixed assets (3.2) 13.7 Net
Slide 14: Product pipeline
Product pipeline LERCANIDIPINE modified release formulation for the U.S. market REC 0545 LERCANIDIPINE 20 mg LERCANIDIPINE /ENALAPRIL (overactive bladder/ COMBINATION (hypertension) 2 NEW urinary incontinence) EU and LERCANIDIPINE Germany PROJECTS others France (overactive (hypertension) REC 2615 Au
Slide 15: Filling the pipeline: Ongoing R&D
Filling the pipeline: Ongoing R&D • Lercanidipine: • 20mg strength approved in Europe and other countries. Launched in Germany, France and Australia in 2003, Italy, Spain and Scandinavia in 1Q 2004, roll-out continues • Modified release formulation under development with Forest Labs for the U.S. mar
Slide 16: Filling the pipeline: Ongoing R&D
Filling the pipeline: Ongoing R&D • Lercanidipine-enalapril fixed combination: • New aggressive targets for blood pressure control • Combination of drugs needed for most patients • Patient compliance • Fixed combinations will play a significant role in the future hypertension market • Phase III near
Slide 17: Filling the pipeline: Ongoing R&D
Filling the pipeline: Ongoing R&D • Urology: • REC 0545, a 5HT1A receptor antagonist for the treatment of unstable bladder. Proof of concept clinical program in preparation • REC 2615, in development for the treatment of female sexual dysfunction, approaching clinical phases • Two new discovery proj
Slide 18: Plan 2004 - 2007 Assumptions
Plan 2004 - 2007 Assumptions • Current geography • Excluding Sophartex sold in April 2004 • Excluding any sales of lercanidipine in either Japan or the U.S. • Excluding acquisitions in other EU markets 17
Slide 19: Plan 2004 – 2007
Plan 2004 – 2007 (million euro) 2004 2007 CAGR SALES 475 550 5.0% EBIT 85 106 7.5% NET INCOME 50 66 10% 18
Slide 20: Company strategy
Company strategy • Confirm commitment to research and development in the urological and cardiovascular fields • Acquire new product licenses • Expand geographical presence in Europe 19
Slide 21: Entering the Polish market, Polfa Kutno
Entering the Polish market, Polfa Kutno • Polfa Kutno has around 2% share of the Polish pharmaceutical market • A marketing oriented company selling prescription and OTC products covering a wide range of therapeutic areas • Polfa Kutno is listed on the Warsaw stock exchange • In a public tender offe
Slide 22: Forward-looking statements disclaimer
Statements contained in this presentation, other than historical facts, are “forward- “forward-looking statements” (as such term is defined in the Private Securities Litigation Reform Act of 1995). 1995). These statements are based on currently available information, on current best estimates, and o