Recordati S.p.A : Positive First Quarter 2009 Results, Sales And Income Increase

MILAN, ITALY--(Marketwire - May 06, 2009) -

- Consolidated revenue EUR 183.7 million, + 6.9%.

- Pharmaceutical revenue EUR 176.8 million, + 8.2%.

- International sales EUR 128.2 million, + 11.7%.

- Operating income EUR 40.6 million, + 6.5%.

- Net income EUR 27.6 million, + 9.3%.

- Net financial position*: net debt of EUR 85.9 million.

- Acquisition of Herbacos-Bofarma in the Czech Republic.

- Subsequent events: Zanextra® (lercanidipine+enalapril) launched in France, Almirall to co-market silodosin in Spain.

Milan, 6 May 2009 - The Board of Directors of Recordati S.p.A. approved the Group’s consolidated results for the first quarter 2009 prepared in accordance with International Accounting Standards and International Financial Reporting Standards (IAS/IFRS) and in particular as per IAS 34 requirements for interim reporting.

First quarter financial highlights

- Consolidated revenue is EUR 183.7 million, an increase of 6.9% over the same period of the preceding year. Pharmaceutical sales are EUR 176.8 million, an increase of 8.2%, and include the consolidation of Yeni Ilaç, acquired at the end of 2008, and of Herbacos-Bofarma acquired in January 2009. The growth in sales comes exclusively from the international business (+12.9%) while sales in Italy are slightly down by 1.4%. Pharmaceutical chemicals sales are EUR 6.9 million, down by 18.9%. Over the period the group’s international business is up by 11.7% and accounts for 69.8% of total revenue.

- Operating income, at 22.1% of sales, is EUR 40.6 million, an increase of 6.5% over the same period of the preceding year. R&D expenses grow by 14.4% reaching 8.3% of sales.

- Net income is EUR 27.6 million, an increase of 9.3%, higher than that recorded by operating income thanks to lower financial expenses.

- Net financial position* at 31 march 2009 records net debt of EUR 85.9 million, an increase of EUR 4.9 million as compared to 31 December 2008, mainly due to the cash outlay required for the acquisition of the Czech pharmaceutical company Herbacos-Bofarma at the end of January. Shareholders’ equity increased to EUR 472.1 million.

* Cash and short-term financial investments net of bank overdrafts and medium/long-term loans which include the measurement at fair value of hedging derivatives (fair value hedge).

Business development news

In January Herbacos-Bofarma, a Czech pharmaceutical company with headquarters in Pardubice, was acquired. The price paid was of around EUR 19 million. Herbacos-Bofarma is a well known pharmaceutical company operating in the Czech and Slovak markets with a significant portfolio of medicines in various therapeutic classes comprised mainly of analgesic, anti-inflammatory and dermatological products. Individual brands have a strong position in particular market segments. Herbacos-Bofarma employs 100 personnel, of which a sales and marketing network of 35 employees which has developed very good credentials with both pharmacists and physicians. The company is very solid financially. Sales have increased consistently over recent years and in 2008 are around EUR 12 million. The company’s EBITDA margin is in line with that of the group. Herbacos-Bofarma, with a market share of around 2% in volumes, is well positioned to act as a platform for launching the new products in our pipeline on the Czech and Slovak markets.

Subsequent events and business outlook

In April a license agreement with Almirall, the international pharmaceutical company based in Spain, for the marketing and sales in Spain of silodosin, a new compound indicated for the treatment of the signs and symptoms of benign prostatic hyperplasia (BPH) was signed. Almirall will co- market the product together with Recordati España, the Spanish subsidiary of the Recordati group. The marketing approval authorization (MAA) request for silodosin was submitted to the EMEA (European Medicines Agency), using the centralized approval procedure, during November 2008 and approval is expected in the first half 2010.

Also in April subsidiary Bouchara Recordati launched Zanextra® (lercanidipine+enalapril), the new antihypertensive treatment, in France, the largest market for lercanidipine worldwide. This new specialty is already available in Germany, Australia, Ireland, Finland, Denmark, Greece, South Africa and in the Netherlands.

The group’s business performance was in line with expectations during April. Performance during the remaining quarters of the year is also expected to be positive allowing us to confirm our full year targets previously announced: revenues of around EUR 750 million, operating income of around EUR 155 million and net income of around EUR 105 million.

Conference call

Recordati will be hosting a conference call today 6 May 2009 at 4.00 pm Italian time (3.00 pm London time, 10.00 am New York time). The conference ID is 97528909 and dial-in numbers are:

Italy +39 02 36005955

UK +44 (0) 1452 587 427

USA 18665516755

France +33 (0) 170751217

Germany +49 (0) 6922227071

A set of slides which will be referred to during the call will be available on our website www.recordati.com under Investors/Company Presentations.

Callers are invited to dial-in 10 minutes before conference time and state the ID number 97528909. If conference operator assistance is required during the connection please digit * followed by 0 or call +44 1452 553 456. A recording of the conference call will be placed on the website www.recordati.com.

Recordati, established in 1926, is a European pharmaceutical group, listed on the Italian Stock Exchange (Reuters RECI.MI, Bloomberg REC IM, ISIN IT 0003828271),with a total staff of over 2,900, dedicated to the research, development, manufacturing and marketing of pharmaceuticals. It has headquarters in Milan, Italy, operations in the main European countries, and a growing presence in the new markets of Central and Eastern Europe. A European field force of over 1,400 medical representatives promotes a wide range of innovative pharmaceuticals, both proprietary and under license, in a number of therapeutic areas including a specialized business dedicated to treatments for rare diseases. Recordati’s current and growing coverage of the European pharmaceutical market makes it a partner of choice for new product licenses from companies which do not have European marketing organizations. Recordati is committed to the research and development of new drug entities within the cardiovascular and urogenital therapeutic areas and of treatments for rare diseases. Consolidated revenue for 2008 was EUR 689.6 million, operating income was EUR 144.7 million and net income was EUR 100.4 million.

For further information:

Recordati website: www.recordati.com

Investor Relations Media Relations

Marianne Tatschke Claudio Rossetti (Echo Comunicazione d’Impresa)

(39)0248787393 (39)02 62694736

e-mail: inver@recordati.it e-mail: crossetti@echocom.it

Statements contained in this release, other than historical facts, are “forward-looking statements” (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements are based on currently available information, on current best estimates, and on assumptions believed to be reasonable. This information, these estimates and assumptions may prove to be incomplete or erroneous, and involve numerous risks and uncertainties, beyond the Company’s control. Hence, actual results may differ materially from those expressed or implied by such forward-looking statements. All mentions and descriptions of Recordati products are intended solely as information on the general nature of the company’s activities and are not intended to indicate the advisability of administering any product in any particular instance.

RECORDATI GROUP

Summary of consolidated results prepared in accordance with the International Accounting Standards and International Financial Reporting Standards (IAS/IFRS)

(thousands of EUR )

+------------------------+------------------+------------------+----------+ |INCOME STATEMENT |First quarter 2009|First quarter 2008| Change %| +------------------------+------------------+------------------+----------+ |REVENUE | 183,687| 171,866| 6.9| +------------------------+------------------+------------------+----------+ |Cost of sales | (60,158)| (55,737)| 7.9| +------------------------+------------------+------------------+----------+ |GROSS PROFIT | 123,529| 116,129| 6.4| +------------------------+------------------+------------------+----------+ |Selling expenses | (54,857)| (53,218)| 3.1| +------------------------+------------------+------------------+----------+ |Research and development| (15,300)| (13,379)| 14.4| |expenses | | | | +------------------------+------------------+------------------+----------+ |General & administrative| (10,918)| (10,148)| 7.6| |expenses | | | | +------------------------+------------------+------------------+----------+ |Other income (expenses),| (1,819)| (1,237)| 47.0| |net | | | | +------------------------+------------------+------------------+----------+ |OPERATING INCOME | 40,635| 38,147| 6.5| +------------------------+------------------+------------------+----------+ |Financial income | (1,451)| (2,256)| (35.7)| |(expenses), net | | | | +------------------------+------------------+------------------+----------+ |PRE-TAX INCOME | 39,184| 35,891| 9.2| +------------------------+------------------+------------------+----------+ |Provision for income | (11,565)| (10,628)| 8.8| |taxes | | | | +------------------------+------------------+------------------+----------+ |NET INCOME | 27,619| 25,263| 9.3| +------------------------+------------------+------------------+----------+ |Attributable to: | | | | +------------------------+------------------+------------------+----------+ |Equity holders of the | 27,618| 25,262| 9.3| |parent | | | | +------------------------+------------------+------------------+----------+ |Minority interests | 1| 1| 0.0| +------------------------+------------------+------------------+----------+ 

+--------------------+--------------------+--------------------+----------+ | EARNINGS PER SHARE| First quarter 2009| First quarter 2008| Change %| +--------------------+--------------------+--------------------+----------+ | Basic | EUR 0.140| EUR 0.129| 8.5| +--------------------+--------------------+--------------------+----------+ | Diluted | EUR 0.136| EUR 0.126| 7.9| +--------------------+--------------------+--------------------+----------+ +--------------------+--------------------+--------------------+----------+ 

Earnings per share (EPS) are based on average shares outstanding during each year, 197,035,301 in 2009 and 196,372,301 in 2008, net of average treasury stock which amounted to 11,472,355 in both years. Diluted earnings per share is calculated taking into account new shares authorized but not yet issued.

+-------------------------+------------------+------------------+--------+ |COMPOSITION OF REVENUE |First quarter 2009|First quarter 2008|Change %| +-------------------------+------------------+------------------+--------+ |Pharmaceuticals | 176.804| 163,379| 8.2| +-------------------------+------------------+------------------+--------+ | Pharmaceutical chemicals| 6.883| 8,487| (18.9)| +-------------------------+------------------+------------------+--------+ |TOTAL | 183.687| 171,866| 6.9| +-------------------------+------------------+------------------+--------+ | - of which International| 128.165| 114,724| 11.7| +-------------------------+------------------+------------------+--------+ +-------------------------+------------------+------------------+--------+ 

RECORDATI GROUP

Summary of consolidated results prepared in accordance with the International Accounting Standards and International Financial Reporting Standards (IAS/IFRS)

(thousands of EUR )

+-------------------------+------------+------------+ |ASSETS | 31.03.2009| 31.12.2008| +-------------------------+------------+------------+ |Property, plant and | 57,076| 57,969| |equipment | | | +-------------------------+------------+------------+ |Intangible assets | 95,495| 92,635| +-------------------------+------------+------------+ |Goodwill | 301,707| 289,822| +-------------------------+------------+------------+ |Equity investments | 7,532| 7,532| +-------------------------+------------+------------+ |Non-current receivables | 5,230| 5,199| +-------------------------+------------+------------+ |Deferred tax assets | 22,001| 22,650| +-------------------------+------------+------------+ |TOTAL NON-CURRENT ASSETS | 489,041| 475,807| +-------------------------+------------+------------+ |Inventories | 89,206| 83,087| +-------------------------+------------+------------+ |Trade receivables | 149,562| 137,015| +-------------------------+------------+------------+ |Other receivables | 16,801| 22,741| +-------------------------+------------+------------+ |Other current assets | 9,184| 2,346| +-------------------------+------------+------------+ |Fair value of hedging | 718| 0| |derivatives (fair value | | | |hedge) | | | +-------------------------+------------+------------+ |Short-term financial | 62,777| 94,951| |investments, cash and | | | |cash equivalents | | | +-------------------------+------------+------------+ |TOTAL CURRENT ASSETS | 328,248| 340,140| +-------------------------+------------+------------+ |TOTAL ASSETS | 817,289| 815,947| +-------------------------+------------+------------+ 

+-------------------------+------------+------------+ |EQUITY AND LIABILITIES | 31.03.2009| 31.12.2008| +-------------------------+------------+------------+ |Share capital | 26,063| 26,063| +-------------------------+------------+------------+ |Capital in excess of par | 81,320| 81,320| |value | | | +-------------------------+------------+------------+ |Treasury stock | (59,103)| (59,103)| +-------------------------+------------+------------+ |Hedging reserve | (4,057)| (2,532)| +-------------------------+------------+------------+ |Translation reserve | (7,032)| (7,096)| +-------------------------+------------+------------+ |Other reserves | 25,947| 25,733| +-------------------------+------------+------------+ |Retained earnings | 381,344| 280,920| +-------------------------+------------+------------+ |Net income for the year | 27,618| 100,424| +-------------------------+------------+------------+ |GROUP SHAREHOLDERS’ | 472,100| 445,729| |EQUITY | | | +-------------------------+------------+------------+ |Minority interest | 14| 13| +-------------------------+------------+------------+ |SHAREHOLDERS’ EQUITY | 472,114| 445,742| +-------------------------+------------+------------+ |Loans due after one year | 84,422| 81,409| +-------------------------+------------+------------+ |Employees’ termination | 19,389| 19,624| |pay | | | +-------------------------+------------+------------+ |Deferred tax liabilities | 7,680| 7,399| +-------------------------+------------+------------+ |Other non-current | 2,239| 3,189| |liabilities | | | +-------------------------+------------+------------+ |TOTAL NON-CURRENT | 113,730| 111,621| |LIABILITIES | | | +-------------------------+------------+------------+ |Trade payables | 86,695| 88,598| +-------------------------+------------+------------+ |Other payables | 43,695| 47,147| +-------------------------+------------+------------+ |Tax liabilities | 16,785| 10,278| +-------------------------+------------+------------+ |Other current liabilities| 357| 385| +-------------------------+------------+------------+ |Provisions | 14,896| 15,094| +-------------------------+------------+------------+ |Fair value of hedging | 4,057| 2,532| |derivatives (cash flow | | | |hedge) | | | +-------------------------+------------+------------+ |Fair value of hedging | 0| 1,505| |derivatives (fair value | | | |hedge) | | | +-------------------------+------------+------------+ |Loans due within one year| 2,780| 2,201| +-------------------------+------------+------------+ |Bank overdrafts | 62,180| 90,844| +-------------------------+------------+------------+ |TOTAL CURRENT LIABILITIES| 231,445| 258,584| +-------------------------+------------+------------+ |TOTAL EQUITY AND | 817,289| 815,947| |LIABILITIES | | | +-------------------------+------------+------------+ 

DECLARATION BY THE MANAGER RESPONSIBLE FOR PREPARING THE COMPANY’S FINANCIAL REPORTS

The manager responsible for preparing the company’s financial reports Fritz Squindo declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Law on Finance, that the accounting information contained in this press release corresponds to the document results, books and accounting records.

This information is provided by HUGIN