RECORDATI

milan : REC


March 07, 2013 10:47 ET

DISREGARD PREVIOUS RELEASE - RECORDATI: Board approves the 2012 accounts.

MILAN, ITALY--(Marketwire - Mar 7, 2013) -

RECORDATI: BOARD APPROVES THE 2012 ACCOUNTS. REVENUE EUR 828.3 MILLION (+8.7%), OPERATING INCOME EUR 167.0 MILLION (+2.1%), NET INCOME EUR 118.5 MILLION (+1.8%). 2012 DIVIDEND EUR 0.30.

* Consolidated revenue EUR 828.3 million, + 8.7%.

* Operating income EUR 167.0 million, + 2.1%.

* Net income EUR 118.5 million, + 1.8%.

* Net financial position*: net debt of EUR 153.5 million.

* Dividend for 2012 EUR 0.30 per share, of which EUR 0.20 already paid.

* Targets for 2013: sales to exceed EUR 920 million, operating to exceed EUR 185 million and net income to exceed EUR 128 million.

* Annual Meeting of Shareholders convened for 17 April 2013, the sole convocation date.

Recordati's Board of Directors approved the consolidated financial statements for the year 2012 as well as Recordati S.p.A.'s accounts and the corporate governance and ownership report as required by art. 123 bis of the Consolidated Law on Financial Intermediation. The financial statements at and for the year ended 31 December 2012 and the aforesaid report will be available as from tomorrow 8 March 2013 at the company's head office and published on the company's website www.recordati.com and will also be available on the website of Borsa Italiana S.p.A.. The reports issued by the independent and by the statutory Auditors will be made available, within the terms of the law, in the same manner.

Financial highlights

* Consolidated revenue in 2012 is EUR 828.3 million, up by 8.7% compared to the preceding year. Pharmaceutical sales are EUR 797.4 million, an increase of 8.7% while pharmaceutical chemicals sales are EUR 30.9 million, an increase of 8.9%.

* Operating income, at 20.2% of sales, is EUR 167.0 million, an increase of 2.1% over the preceding year. Fourth quarter results include non- recurring costs related to the acquisition of the European rights to Graspa® (EUR 5 million) and to the restructuring of our sales organization.

* Net income at 14.3% of sales is EUR 118.5 million, an increase of 1.8%.

* Net financial position* at 31 December 2012 records a net debt of EUR 153.5 million as compared to a net debt of EUR 55.7 million at 31 December 2011. During the year EUR 21.0 million were paid for the acquisition of six OTC products in Germany, EUR 14.3 million overall were paid for the acquisitions in Poland of the pharmaceutical company Farma-Projekt plus a portfolio of products and EUR 66.7 million were paid for the acquisition of a product portfolio in Russia. Dividends for a total of EUR 61.4 million were distributed.


* 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

A number of initiatives were pursued in 2012 which are fundamental for the future development of the Group.

* In February the activities for the preparation of a European Phase III clinical trial for REC 0482 (NX-1207), following the successful completion of a Scientific Advice meeting with the European Medicines Agency (EMA) were initiated. The pivotal controlled clinical trial will assess the efficacy and safety of a single TRUS-guided intraprostatic injection of the drug in patients with lower urinary tract symptoms (LUTS) associated with BPH not adequately controlled by medical therapy. A European licensing agreement for the development and commercialization of NX-1207 was signed in 2010 by Recordati and Nymox Pharmaceutical Corporation. Under the terms of the agreement Recordati received exclusive rights to develop and subsequently market and sell the drug in Europe including Russia and the CIS, the Middle East, South Africa and the Maghreb area of North Africa.

* During April the marketing authorizations, the trademarks and additional assets concerning six OTC pharmaceuticals for Germany were acquired from Cilag GmbH International and McNeil GmbH & Co. oHG. The products acquired are JHP-Rödler® (mint oil indicated for digestive disorder, headache, cough and cold), Betadorm® D (diphenhydramine HCl indicated for sleep disorders), Rhinopront® (pseudoephedrine+triprolidine indicated for rhinitis and head colds), Collomack® Topical (salicylic acid solution, an anti-corn preparation), Tirgon® (bisacodyl for constipation) and Xitix® (vitamin C lozenges to treat vitamin C deficiency). In 2012 the annual sales for the six products are of around EUR 6 million.

* In August the acquisition of 100% of the share capital of Farma- Projekt Sp. z o.o., a Polish pharmaceutical company with headquarters in Krakow, was concluded. The value of the transaction (enterprise value) is of PLN 71.0 million (EUR 17.4 million) of which PLN 50.8 million (EUR 12.5 million) were paid at the closing. Of the remaining balance a portion will be paid in tranches on future dates and a portion comprises the company's debt. Farma-Projekt operates on the Polish pharmaceutical market since 2003 and markets drugs belonging to a variety of therapeutic areas, mainly cardiovascular and urological treatments as well as dietary supplements. The company employs around 135 personnel, of which 84 are dedicated to sales and marketing. Sales in 2011 were of around PLN 47 million (EUR 11.5 million).

* In October the oral care line of products bearing the Dentosan® trademark was acquired for the Italian market from Cilag GmbH International, part of the Johnson & Johnson Family of Consumer Companies. Dentosan® is the second leading brand in the Italian oral care market at pharmacy level (IMS - September 2012). The line consists of three product categories: mouthwash, toothpaste gel and toothbrushes, sold mainly in pharmacies, and of which the mouthwash category represents the most important franchise. All Dentosan® mouthwash brands - Dentosan® Azione Intensiva, Dentosan® Trattamento Mese and Dentosan® Ortodontico - are based on chlorhexidine at different concentrations and are highly appreciated by the professional dental community and consumers. Recordati is a very well-known name in the pharmacy and we are confident that this prestigious brand will become even more popular in the future.

* In November the acquisition of all rights to five product lines on the Russian market: Alfavit, Qudesan, Vetoron, Focus and Carnitone was successfully concluded. The value of the transaction is of RUB 2.7 billion (EUR 67.2 million). The brands of the products acquired, which are OTC pharmaceuticals and dietary supplements, are very well known in Russia. The Alfavit product line in particular comprises a wide range of formulations containing vitamins and minerals and holds a leading position on the market. Qudesan is based on coenzyme Q(10), an adjuvant for cardiac function, promoted for the prevention and treatment of chronic fatigue and metabolic dysfunction. The key ingredient in Vetoron is beta-carotene, Focus contains bilberry anthocyanins and lutein for eye health and Carnitone is a source of L-carnitine. Total annual sales of the five product lines are of around RUB 1.0 billion (EUR 25 million).

* Also in November subsidiary Orphan Europe and Erytech Pharma, a French biopharmaceutical company, entered into an agreement granting Orphan Europe the exclusive rights for the commercialization and distribution of Graspa® for the treatment of Acute Lymphoblastic Leukemia (ALL) and Acute Myeloid Leukemia (AML) in Europe. Graspa®, human erythrocytes encapsulating L-asparaginase, for the treatment of hematological malignancies, is currently in pivotal Phase II/III clinical trial for ALL and will enter a Phase IIb trial in AML in Europe. The product has obtained an orphan drug designation in Europe and the USA for ALL. Graspa® is a new formulation of L-asparaginase with a safer and broader range of clinical use than existing forms due to the entrapment and protection of the enzyme inside homologous red blood cells. The added value of Graspa® (by encapsulating L- asparaginase in red blood cells) relates to its ability to overcome existing limitations associated with conventional L-asparaginase via longer efficacy, better compliance, reduced doses and a better safety profile. Graspa® is intended to satisfy the unmet medical needs of frail patients, patients suffering relapses and other patient groups for whom the current treatments are not suitable.

* In December an agreement for 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 signed. The value of the transaction, which was successfully closed in January 2013 is of $ 100 million. Expected revenues in 2013 for the acquired portfolio are of around $ 40 million. The acquired portfolio will be marketed in the U.S. by Recordati Rare Diseases, 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) and Indocin® I.V. (indomethacin 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. The acquisition of this portfolio of products is a confirmation of Recordati's intention to become a leading player in rare diseases worldwide and will also contribute to the growth and enhancement of our current operation in the U.S..

Subsequent events and business outlook

Group consolidated sales during the first two months of 2013 are in line with the company's expectations for the whole year. For 2013, targets are to achieve sales of more than EUR 920 million, operating income of more than EUR 185 million and net income of more than EUR 128 million. Objectives in the business plan are to achieve sales of between EUR 1.025 and EUR 1.075 million, operating income of between EUR 210 and EUR 220 million and net income of between EUR 140 and EUR 150 million in 2015.

Dividend

Based on the results obtained, the Board of Directors of the parent company will propose to the shareholders a dividend of EUR 0.10 per share, in full balance of the interim 2012 dividend of EUR 0.20, to be paid to all shares outstanding at ex-dividend date, excluding those in treasury stock, as from 25 April 2013 and record date on 24 April 2013, with ex-dividend on 22 April 2013. The full 2012 dividend is therefore of EUR 0.30 per share (EUR 0.30 per share last year).

Further Board resolutions

The Board of Directors approved the following deliberation proposals to be submitted to the Annual Meeting of Shareholders: * the renewal of the authorization to buy back and dispose of Recordati shares until the Annual Shareholders' Meeting which will approve the 2013 financial statements;

* the examination of the Remuneration Policy pursuant to article 123- ter of Legislative Decree 58/98;

* the approval of Shareholders' Meeting regulations.

The objective of the proposal to renew the authorization to buy back and dispose of Recordati shares until the Annual Shareholders' Meeting which will approve the 2013 financial statements is, as in previous years, to grant the Board the possibility: of using shares for equity acquisitions or as consideration for strategic agreements; of allowing the company to invest in its own shares; and of constituting a stock of own shares to service current and future stock option plans. The company would be allowed to purchase up to 20,000,000 Recordati existing ordinary (common) shares, which includes those shares held in Treasury stock at any given time, for a maximum cash outlay of EUR 150,000,000 million. The purchase price must be at least equal to the shares' nominal value (EUR 0.125) and must not exceed the average official Stock Exchange price recorded over the 5 trading days prior to the transaction, plus 5%. Possible purchases will be made on regulated markets and must comply with article 132 of Legislative Decree 58/1998 and with article 144-bis, comma 1.b) of the Issuers' Regulations as approved by CONSOB's resolution 11971/1999 and with market practice allowed and recognized by CONSOB. At 7 March 2013 the company has 8,225,790 shares in Treasury stock which amounts to 3.9334% of the current share capital.

The Board of Directors also approved the Remuneration Report pursuant to article 123-ter of the Legislative Decree 58/98, the first part of which is the Remuneration Policy to be submitted to the Annual Shareholders' Meeting. The Remuneration Report will be made available to the public within the terms of the law.

The Board of Directors also resolved to submit to the Shareholders' Meeting the approval of a Shareholders' Meeting Regulation, in compliance with the provisions of the Corporate Governance code. Further information will be provided in the Directors' report which will be made available at the company's head office and published on the company's website within the terms of law.

Call to an Annual Shareholders' Meeting

The Board of Directors resolved to convene the Annual Shareholders' Meeting to be held at the company's offices on 17 April 2013 at 10.00 am, the sole convocation date, with the following agenda:

1. Annual Report of the Board of Directors; Statutory Auditors' Report; 2012 Financial Statements; inherent and consequent resolutions.

2. Remuneration policy pursuant to article 123-ter of the Legislative Decree 58/98; inherent and consequent resolutions.

3. Authorization proposal to buy back and dispose of Recordati shares; inherent and consequent resolutions.

4. Proposal to approve a Shareholders' Meeting regulation. The convocation notice and the documents relative to the agenda will be published in the manner required and within the terms prescribed by current laws and regulations.

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 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 Central and Eastern Europe, and in Turkey. 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 from companies which do not have a European presence. 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 2011 was EUR 762.0 million, operating income was EUR 163.5 million and net income was EUR 116.4 million.

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                     |      2012 |      2011 | Change % |
+--------------------------------------+-----------+-----------+----------+
| REVENUE                              |   828,317 |   762,036 |      8.7 |
|                                      |           |           |          |
|    Cost of sales                     | (293,557) | (259,977) |     12.9 |
|                                      +-----------+-----------+----------+
| GROSS PROFIT                         |   534,760 |   502,059 |      6.5 |
|                                      |           |           |          |
|    Selling expenses                  | (250,566) | (232,160) |      7.9 |
|                                      |           |           |          |
|    Research and development expenses |  (63,407) |  (55,956) |     13.3 |
|                                      |           |           |          |
|    General & administrative expenses |  (45,486) |  (45,386) |      0.2 |
|                                      |           |           |          |
|    Other income (expenses), net      |   (8,337) |   (5,080) |     64.1 |
|                                      +-----------+-----------+----------+
| OPERATING INCOME                     |   166,964 |   163,477 |      2.1 |
|                                      |           |           |          |
|    Financial income (expenses), net  |   (6,626) |   (3,465) |     91.2 |
|                                      +-----------+-----------+----------+
| PRE-TAX INCOME                       |   160,338 |   160,012 |      0.2 |
|                                      |           |           |          |
|    Provision for income taxes        |  (41,841) |  (43,566) |    (4.0) |
|                                      +-----------+-----------+----------+
| NET INCOME                           |   118,497 |   116.446 |      1.8 |
+--------------------------------------+-----------+-----------+----------+
| Attributable to:                     |           |           |          |
|                                      |           |           |          |
| Equity holders of the parent         |   118,484 |   116,434 |      1.8 |
|                                      |           |           |          |
| Minority interests                   |        13 |        12 |      8.3 |
+--------------------------------------+-----------+-----------+----------+

+--------------------+---------+---------+-----+
| EARNINGS PER SHARE |    2012 |    2011 |     |
+--------------------+---------+---------+-----+
| Basic              |EUR 0.593|EUR 0.584| 1.5 |
|                    |         |         |     |
| Diluted            |EUR 0.560|EUR 0.556| 0.7 |
+--------------------+---------+---------+-----+

Earnings  per share  (EPS) are  based on  average shares outstanding
during each year, 199,722,208 in 2012 and 199,369,542 in 2011, net of
average treasury stock which amounted to 9,402,948 shares in 2012 and
to 9,755,614 shares in 2011. Diluted  earnings  per  share  is
calculated  taking into account stock options granted to employees.

+------------------------+---------+---------+----------+
| COMPOSITION OF REVENUE |    2012 |    2011 | Change % |
+------------------------+---------+---------+----------+
| Total revenue          | 828,317 | 762,036 |      8.7 |
|                        +---------+---------+----------+
| Italy                  | 219,898 | 221,603 |    (0.8) |
|                        |         |         |          |
| International          | 608,419 | 540,433 |     12.6 |
+------------------------+---------+---------+----------+
Pending completion of independent and statutory audits.


                                  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                                             |31.12.2012|31.12.2011|
+---------------------------------------------------+----------+----------+
|Property, plant and equipment                      |    59,972|    55,397|
|                                                   |          |          |
|Intangible assets                                  |   231,470|   149,649|
|                                                   |          |          |
|Goodwill                                           |   413,213|   365,719|
|                                                   |          |          |
|Equity investments                                 |     6,925|     1,977|
|                                                   |          |          |
|Non-current receivables                            |     3,788|     1,282|
|                                                   |          |          |
|Deferred tax assets                                |    22,837|    22,494|
|                                                   +----------+----------+
|TOTAL NON-CURRENT ASSETS                           |   738.205|   596,518|
|                                                   |          |          |
|                                                   |          |          |
|                                                   |          |          |
|Inventories                                        |   126,388|   108,251|
|                                                   |          |          |
|Trade receivables                                  |   155,359|   141,231|
|                                                   |          |          |
|Other receivables                                  |    24,983|    21,311|
|                                                   |          |          |
|Other current assets                               |     2,164|     3,198|
|                                                   |          |          |
|Fair value of hedging derivatives (fair value hedge)     1,371|     1,791|
|                                                   |          |          |
|Short-term financial investments, cash and cash    |          |          |
|equivalents                                        |    38,418|   105,164|
|                                                   +----------+----------+
|TOTAL CURRENT ASSETS                               |   348,683|   380,946|
+---------------------------------------------------+----------+----------+
|TOTAL ASSETS                                       | 1,086,888|   977,464|
+---------------------------------------------------+----------+----------+

+---------------------------------------------------+----------+----------+
|EQUITY AND LIABILITIES                             |31.12.2012|31.12.2011|
+---------------------------------------------------+----------+----------+
|Share capital                                      |    26,141|    26,141|
|                                                   |          |          |
|Capital in excess of par value                     |    83,719|    83,719|
|                                                   |          |          |
|Treasury stock                                     |  (46,254)|  (53,215)|
|                                                   |          |          |
|Hedging reserve                                    |   (4,983)|   (4,227)|
|                                                   |          |          |
|Translation reserve                                |   (3,713)|   (8,232)|
|                                                   |          |          |
|Other reserves                                     |    26,326|    26,600|
|                                                   |          |          |
|Retained earnings                                  |   501,701|   445,745|
|                                                   |          |          |
|Net income for the year                            |   118,484|   116,434|
|                                                   |          |          |
|Interim dividend                                   |  (40,077)|  (38,525)|
|                                                   +----------+----------+
|GROUP SHAREHOLDERS' EQUITY                         |   661,344|   594,440|
|                                                   +----------+----------+
|Minority interest                                  |        53|        40|
|                                                   +----------+----------+
|SHAREHOLDERS' EQUITY                               |   661,397|   594,480|
|                                                   +----------+----------+
|                                                   |          |          |
|                                                   |          |          |
|Loans due after one year                           |   129,111|   137,518|
|                                                   |          |          |
|Employees' termination pay                         |    17,862|    16,692|
|                                                   |          |          |
|Deferred tax liabilities                           |    15,872|     6,049|
|                                                   |          |          |
|Other non-current liabilities                      |     1,828|     2,062|
|                                                   +----------+----------+
|TOTAL NON-CURRENT LIABILITIES                      |   164,673|   162,321|
|                                                   |          |          |
|                                                   |          |          |
|                                                   |          |          |
|Trade payables                                     |   106,926|    98,678|
|                                                   |          |          |
|Other payables                                     |    53,984|    58,335|
|                                                   |          |          |
|Tax liabilities                                    |     9,789|    12,091|
|                                                   |          |          |
|Other current liabilities                          |       458|       348|
|                                                   |          |          |
|Provisions                                         |    20,544|    21,813|
|                                                   |          |          |
|Fair value of hedging derivatives (cash flow hedge)|     4,983|     4,227|
|                                                   |          |          |
|Loans due within one year                          |     8,147|    11,616|
|                                                   |          |          |
|Bank overdrafts                                    |    55,987|    13,555|
|                                                   +----------+----------+
|TOTAL CURRENT LIABILITIES                          |   260,818|   220,663|
+---------------------------------------------------+----------+----------+
|TOTAL EQUITY AND LIABILITIES                       | 1,086,888|   977,464|
+---------------------------------------------------+----------+----------+

Pending completion of independent and statutory audits.

                                RECORDATI S.P.A.
 Summary of consolidated results prepared in accordance with the
 International Accounting Standards and International Financial
 Reporting Standards (IAS/IFRS)
                                (thousands of EUR)

+------------------+---------+---------+--------+
|                  |    2012 |    2011 | Var. % |
+------------------+---------+---------+--------+
| Revenue          | 275,811 | 272,243 |    1.3 |
|                  |         |         |        |
| Operating income |  39,350 |  43,642 |  (9.8) |
|                  |         |         |        |
| Pre-tax income   |  98,673 |  93,976 |    5.0 |
|                  |         |         |        |
| Net income       |  85,032 |  78,462 |    8.4 |
+------------------+---------+---------+--------+


+--------------------------------------------+------------+------------+
|                                            | 31.12.2012 | 31.12.2011 |
+--------------------------------------------+------------+------------+
|                                            |            |            |
|                                            |            |            |
| Non-current assets                         |    570,129 |    496,095 |
|                                            |            |            |
| Current assets                             |    190,637 |    174,165 |
|                                            +------------+------------+
| TOTAL ASSETS                               |    760,766 |    670,260 |
+--------------------------------------------+------------+------------+
|                                            |            |            |
|                                            |            |            |
| Shareholders' equity                       |    336,357 |    307,644 |
|                                            |            |            |
| Non-current liabilities                    |    142,901 |    173,299 |
|                                            |            |            |
| Current liabilities                        |    281,508 |    189,317 |
|                                            +------------+------------+
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |    760,766 |    670,260 |
+--------------------------------------------+------------+------------+
Pending completion of independent and statutory audits.

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.

DISREGARD PREVIOUS RELEASE - RECORDATI: Board approves 2012 accounts: http://hugin.info/143644/R/1683807/551165.pdf

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Source: RECORDATI via Thomson Reuters ONE

[HUG#1683807]

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