Recordati S.p.A: Significant Sales and Earnings Growth in the First Quarter 2013

MILAN, ITALY--(Marketwired - May 09, 2013) -

RECORDATI: SIGNIFICANT SALES AND EARNINGS GROWTH IN THE FIRST QUARTER 2013 (SALES +11.4%, NET INCOME +11.8%) THANKS TO THE INTERNATIONAL BUSINESS (+16.1%)

* Consolidated revenue EUR 244.6 million, + 11.4%.

* EBITDA((1)) EUR 61.3 million, + 13.5%

* Operating income EUR 52.6 million, + 10.5%.

* Net income EUR 37.8 million, + 11.8%.

* Net financial position((2)): net debt of EUR 192.3 million.

* Closing of the acquisition of a portfolio of drugs for the treatment of rare and other diseases in the U.S.A..

* Full year 2013 targets reviewed: sales of around EUR 930 million, operating income of around EUR 190 million and net income of around EUR 132 million.

The Board of Directors of Recordati S.p.A. approved the Group’s consolidated results for the first quarter 2013 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. These financial statements will be available today at the company’s offices and on the company’s website: http://www.recordati.com/rec_en/investors/reports/ and can also be viewed on the website of Borsa Italiana S.p.A.

Financial highlights

* Consolidated revenue in the first quarter 2013 is EUR 244.6 million, up by 11.4% compared to the same period of the preceding year. International sales grow by 16.1%.

* EBITDA(1), at 25.1% of sales, is EUR 61.3 million, an increase of 13.5% over the same period of the preceding year.

* Operating income, at 21.5% of sales, is EUR 52.6 million, an increase of 10.5% over the same period of the preceding year.

* Net income, at 15.4% of sales, is EUR 37.8 million, an increase of 11.8% over the first quarter 2012.

* Net financial position((2)) at 31 March 2013 records a net debt of EUR 192.3 million. During the period $ 80 million (EUR 60 million) were paid for the acquisition of a portfolio of products for the treatment of rare and other diseases, sold mainly in the U.S.A.. Shareholders’ equity increases to EUR 703.2 million.

(1) Earnings before interest, taxes, depreciation and amortization.

(2) 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 the acquisition of all rights concerning a portfolio of products indicated for the treatment of rare and other diseases and marketed mainly in the United States of America, from Lundbeck LLC. was successfully concluded. The value of the transaction is of $ 100 million, of which $ 80 million were paid at the closing on January 18. The acquired portfolio is now marketed in the U.S. by Recordati Rare Diseases Inc., a wholly-owned U.S. corporation. The main product in the portfolio is Panhematin® (haemin for injection) for the amelioration of recurrent attacks of acute intermittent porphyria. Other important drugs acquired are NeoProfen® (ibuprofen lysine injection), indicated to close a clinically significant patent ductus arteriosus (PDA) in premature infants, and Cosmegen® (dactinomycin for injection) used mainly in the treatment of three rare cancers. Expected revenues in 2013 for the acquired portfolio are of around $ 40 million. In order to fund this transaction a long-term loan agreement with U.S. investors for $ 70 million, of which $ 40 million ten year bullet and 4.55% coupon and $ 30 million twelve year bullet and 4.70% coupon, is currently being finalized.

Management Comments

“The excellent results obtained in the first quarter of 2013, confirmed during the month of April, thanks to the strong international expansion of the group allow us to review our targets for the full year 2013", declared Giovanni Recordati, Chairman and CEO. “Therefore, we now expect to achieve sales of around EUR 930 million, operating income of around EUR 190 million and net income of around EUR 132 million.”

Conference call

Recordati will be hosting a conference call today 9 May 2013 at 4.00 pm Italian time (3.00 pm London time, 10.00 am New York time). The dial-in numbers are:

Italy +39 02 8058811, toll free 800 213 858 UK +44 1 212818003, toll free 800 0156384 USA +1 718 7058794, toll free 855 2656959 France +33 170918703 Germany +49 65 255114451 

Callers are invited to dial-in 10 minutes before conference time. If conference operator assistance is required during the connection please digit * followed by 0 or call +39 02 8061371. A recording of the conference call will be placed on the website www.recordati.com.

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.

Recordati, established in 1926, is an international pharmaceutical group, listed on the Italian Stock Exchange (Reuters RECI.MI, Bloomberg REC IM, ISIN IT 0003828271), with a total staff of over 3,300, dedicated to the research, development, manufacturing and marketing of pharmaceuticals. Headquartered in Milan, Italy, Recordati has operations in the main European countries, in Russia, in other Central and Eastern European countries, in Turkey and in the United States of America. A field force of more than 1,700 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 is a partner of choice for new product licenses for its territories. 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 2012 was EUR 828.3 million, operating income was EUR 167.0 million and net income was EUR 118.5 million.

Recordati website: www.recordati.com

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) +-------------------------------+---------------+---------------+--------+ | | First| First| | |INCOME STATEMENT | quarter 2013| quarter 2012|Change %| +-------------------------------+---------------+---------------+--------+ |REVENUE | 244,577| 219,559| 11.4| | | | | | | Cost of sales | (85,360)| (77,997)| 9.4| | +---------------+---------------+--------+ |GROSS PROFIT | 159,217| 141,562| 12.5| | | | | | | Selling expenses | (73,566)| (65,499)| 12.3| | | | | | | Research and development | (18,468)| (15,727)| 17.4| |expenses | | | | | | | | | | General & administrative | (13,530)| (11,776)| 14.9| |expenses | | | | | | | | | | Other income (expenses), net| (1,018)| (915)| 11.3| | +---------------+---------------+--------+ |OPERATING INCOME | 52,635| 47,645| 10.5| | | | | | | Financial income (expenses),| (1,288)| (1,273)| 1.2| |net | | | | | +---------------+---------------+--------+ |PRE-TAX INCOME | 51,347| 46,372| 10.7| | | | | | | Provision for income taxes | (13,581)| (12,598)| 7.8| | +---------------+---------------+--------+ |NET INCOME | 37,766| 33,774| 11.8| +-------------------------------+---------------+---------------+--------+ |Attributable to: | | | | | | | | | |Equity holders of the parent | 37,762| 33,771| 11.8| | | | | | |Minority interests | 4| 3| 33.3| +-------------------------------+---------------+---------------+--------+ +--------------------+--------------------+--------------------+----------+ | EARNINGS PER SHARE | First quarter 2013 | First quarter 2012 | Change % | +--------------------+--------------------+--------------------+----------+ | Basic | EUR 0.188 | EUR 0.169 | 11.2 | | | | | | | Diluted | EUR 0.178 | EUR 0.162 | 9.9 | +--------------------+--------------------+--------------------+----------+ 

Earnings per share (EPS) are based on average shares outstanding during each year, 200,796,533 in 2013 and 199,342,718 in 2012, net of average treasury stock which amounted to 8,328,623 shares in 2013 and to 9.782.438 shares in 2012. Diluted earnings per share is calculated taking into account stock options granted to employees.

+------------------------+------------------+------------------+----------+ | COMPOSITION OF REVENUE |First quarter 2013|First quarter 2012| Change % | +------------------------+------------------+------------------+----------+ | Total revenue | 244,577| 219,559| 11.4 | | +------------------+------------------+----------+ | Italy | 63,879| 63,953| (0.1) | | | | | | | International | 180,698| 155,606| 16.1 | +------------------------+------------------+------------------+----------+ 

 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 |31.03.2013|31.12.2012| +---------------------------------------------------+----------+----------+ |Property, plant and equipment | 59,181| 59,972| | | | | |Intangible assets | 304,133| 231,470| | | | | |Goodwill | 414,414| 413,213| | | | | |Equity investments | 6,868| 6,925| | | | | |Non-current receivables | 3,623| 3,788| | | | | |Deferred tax assets | 23,297| 22,837| | +----------+----------+ |TOTAL NON-CURRENT ASSETS | 811,516| 738,205| | | | | | | | | | | | | |Inventories | 124,725| 126,388| | | | | |Trade receivables | 190,635| 155,359| | | | | |Other receivables | 23,009| 24,983| | | | | |Other current assets | 5,877| 2,164| | | | | |Fair value of hedging derivatives (fair value | | | | hedge) | 2,018| 1,371| | | | | |Short-term financial investments, cash and cash | | | |equivalents | 50,673| 38,418| | +----------+----------+ |TOTAL CURRENT ASSETS | 396,937| 348,683| +---------------------------------------------------+----------+----------+ |TOTAL ASSETS | 1,208,453| 1,086,888| +---------------------------------------------------+----------+----------+ +---------------------------------------------------+----------+----------+ |EQUITY AND LIABILITIES |31.03.2013|31.12.2012| +---------------------------------------------------+----------+----------+ |Share capital | 26,141| 26,141| | | | | |Capital in excess of par value | 83,719| 83,719| | | | | |Treasury stock | (43,970)| (46,254)| | | | | |Hedging reserve | (4,738)| (4,983)| | | | | |Translation reserve | (2,227)| (3,713)| | | | | |Other reserves | 26,505| 26,326| | | | | |Retained earnings | 619,988| 501,701| | | | | |Net income for the year | 37,762| 118,484| | | | | |Interim dividend | (40,077)| (40,077)| | +----------+----------+ |GROUP SHAREHOLDERS’ EQUITY | 703,103| 661,344| | +----------+----------+ |Minority interest | 57| 53| | +----------+----------+ |SHAREHOLDERS’ EQUITY | 703,160| 661,397| | +----------+----------+ | | | | | | | | |Loans due after one year | 129,797| 129,111| | | | | |Employees’ termination pay | 17,681| 17,862| | | | | |Deferred tax liabilities | 15,600| 15,872| | | | | |Other non-current liabilities | 1,781| 1,828| | +----------+----------+ |TOTAL NON-CURRENT LIABILITIES | 164,859| 164,673| | | | | | | | | | | | | |Trade payables | 104,116| 106,926| | | | | |Other payables | 76,114| 53,984| | | | | |Tax liabilities | 19,653| 9,789| | | | | |Other current liabilities | 282| 458| | | | | |Provisions | 20,310| 20,544| | | | | |Fair value of hedging derivatives (cash flow hedge)| 4,738| 4,983| | | | | |Loans due within one year | 8,163| 8,147| | | | | |Bank overdrafts | 107,058| 55,987| | +----------+----------+ |TOTAL CURRENT LIABILITIES | 340,434| 260,818| +---------------------------------------------------+----------+----------+ |TOTAL EQUITY AND LIABILITIES | 1,208,453| 1,086,888| +---------------------------------------------------+----------+----------+ 

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.

Recordati:SIGNIFICANT SALES - EARNINGS GROWTH IN THE FIRST QUARTER 201: http://hugin.info/143644/R/1700673/561384.pdf

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Source: RECORDATI via Thomson Reuters ONE

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