SOURCE: Recordati

October 26, 2010 06:56 ET

Recordati : Positive First Nine Months 2010 Results, EBIT and Net Income Increase

MILAN, ITALY--(Marketwire - October 26, 2010) -


- Consolidated revenue € 548.6 million, - 1.4%.

- Pharmaceutical revenue € 529.6 million, - 1.1%.

- Operating income € 123.9 million, + 1.6%.

- Net income € 87.0 million, + 2.1%.

- Net financial position*: net cash of € 20.1 million.

- Urorec®/Silodyx ™ (silodosin) approved for marketing in Europe.

- Carbaglu® (carglumic acid) approved by the FDA in the U.S..

- Agreement with Leespharm for the marketing and sales of lercanidipine in China. Agreement with Esteve for the co-marketing of pitavastatin in Spain. Agreement with Zambon for the co-marketing of silodosin in France.

- Acquisition of ArtMed International S.r.l. in Romania.

- Positive conclusion of the Decentralized Procedure for the approval of pitavastatin (Livazo®, Alipza® and other brands) in Europe.

- 2010 targets updated.

Milan, 26 October 2010 - The Board of Directors of Recordati S.p.A. approved the Group's consolidated results for the first nine months of 2010 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 are available at the company's offices, at Borsa Italiana S.p.A. and on the company's website:

http://www.recordati.com/rec_en/investors/reports/

Financial highlights

- Consolidated revenue in the first nine months of 2010 is € 548.6 million, slightly down (-1.4%) compared to the same period of the preceding year. Pharmaceutical sales are € 529.6 million, a decrease of 1.1%. The expiry of the composition of matter patent covering lercanidipine in the main European countries in January involved a 26.8% reduction of this product's sales which was mostly offset by the good sales performance of the rest of the pharmaceutical portfolio and by revenues generated by our international licensing-out business. Pharmaceutical chemicals sales are € 19.0 million, down by 7.8%.

- Operating income, at 22.6% of sales, is € 123.9 million, an increase of 1.6% over the same period of the preceding year thanks mainly to the lower SG&A expenses.

- Net income is € 87.0 million, an increase of 2.1%, higher than that recorded by operating income thanks to lower financial expenses.

- Net financial position* at 30 September 2010 records net cash of € 20.1 million, an increase of € 39.8 million as compared to 31 December 2009. Dividends for an amount of € 54.4 million were paid during the period. Shareholders' equity increased to € 550.3 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

At the end of January Recordati was granted Marketing Authorization by the European Commission for the medicinal products Urorec® and Silodyx™ (silodosin), intended for treatment of the signs and symptoms of benign prostatic hyperplasia. During June marketing authorization for silodosin based products was also granted by the Russian Federation. During April a co-marketing agreement was entered into with Zambon France, the French subsidiary of the Italian pharmaceutical group Zambon, for the marketing and sales rights in France of silodosin. Zambon will co-market the product under the brand Silodyx™ together with Bouchara Recordati which will be using the brand Urorec®. In June Urorec® was introduced into the market in Germany by subsidiary Merckle Recordati and in September it was launched in Spain where Recordati España will co-market the product with Almirall. Urorec® is also now available in Ireland. The launch of this specialty in the other European markets is expected to take place over the next months, following completion of the reimbursement and pricing procedures in each country.

Also in January an agreement was finalized with Novartis for the acquisition in Greece and in other European countries of Lopresor® (metoprololo), a well known selective beta blocker for the treatment of different cardiovascular disorders, in particular hypertension and angina pectoris. Under the agreement Recordati acquired the product's marketing authorizations and know-how, including manufacturing rights, as well as a free unlimited license for the use of the brand Lopresor®. 2009 sales of Lopresor® (metoprolol) were overall around € 4 million in the countries covered by the agreement, most of which were generated in Greece.

In March Recordati received approval by the Food and Drug Administration (FDA) in the U.S. of the NDA submitted by Orphan Europe for the use of Carbaglu® (carglumic acid) in pediatric and adult patients for the treatment of acute hyperammonaemia due to the deficiency of the hepatic enzyme N-acetyl glutamate synthase (NAGS deficiency) and as maintenance therapy for chronic hyperammonaemia due to NAGS deficiency.

Also during March a license agreement was signed with Lee's Pharmaceutical Holding Ltd for the sales and marketing of Zanidip® (lercanidipine) in the People's Republic of China.

In June Recordati acquired ArtMed International, a company dedicated to the promotion of pharmaceutical products in Romania with offices in Bucharest. Furthermore, the rights to the products currently being promoted by ArtMed were also acquired. The price paid is € 1.2 million plus an earn-out based on the gross profit of the 5 products under license to the company. ArtMed has a staff of 24 employees dedicated to marketing and medical information activities directed at physicians and pharmacists.

During July the Decentralized Procedure for the approval of pitavastatin (Livazo®, Alipza® and other brands) in Europe was concluded with a positive outcome as communicated by the Reference Member State (MHRA, Medicines and Healthcare products Regulatory Agency, UK) following the agreement of all the Concerned Member States. Pitavastatin, a novel "statin", promises to be an effective new treatment for dyslipidemia, a condition characterized by altered levels of blood cholesterol and other lipids and associated with an increased risk for heart disease and stroke. Pitavastatin was licensed by Recordati from the Japanese pharmaceutical company Kowa for the European market. It has been available on the market in Japan since 2003 and was recently launched by the U.S.. In April Recordati signed a license agreement with Esteve, a leading pharmaceutical company in the Spanish market, for the marketing and sales in Spain of pitavastatin. Esteve will co-market the product together with Recordati España, the Spanish subsidiary of the Recordati group.

Subsequent events and business outlook

The group's business performance was in line with expectations during October. For the full year 2010 we expect to achieve revenues of around € 725 million, operating income of around € 155 million and net income of around € 105 million.

Conference call

Recordati will be hosting a conference call today 26 October 2010 at 4.00 pm Italian time (3.00 pm London time, 10.00 am New York time). The conference ID is 19189045 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 19189045. If conference operator assistance is required during the connection please digit * followed by 0 or call +44 1452 569 034. 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 2,800, 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 around 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 2009 was € 747.5 million, operating income was € 162.2 million and net income was € 110.6 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 €)

+-------------------------+---------------+--------------------+----------+
|INCOME STATEMENT         |First nine     |First nine          |  Change %|
|                         |months 2010    |months 2009         |          |
+-------------------------+---------------+--------------------+----------+
|REVENUE                  |        548,629|             556,187|     (1.4)|
+-------------------------+---------------+--------------------+----------+
|Cost of sales            |      (179,490)|           (177,026)|       1.4|
+-------------------------+---------------+--------------------+----------+
|GROSS PROFIT             |        369,139|             379,161|     (2.6)|
+-------------------------+---------------+--------------------+----------+
|Selling expenses         |      (163,913)|           (168,620)|     (2.8)|
+-------------------------+---------------+--------------------+----------+
|Research and development |       (46,021)|            (49,522)|     (7.1)|
|expenses                 |               |                    |          |
+-------------------------+---------------+--------------------+----------+
|General & administrative |       (31,182)|            (32,222)|     (3.2)|
|expenses                 |               |                    |          |
+-------------------------+---------------+--------------------+----------+
|Other income (expenses), |        (4,169)|             (6,950)|    (40.0)|
|net                      |               |                    |          |
+-------------------------+---------------+--------------------+----------+
|OPERATING INCOME         |        123,854|             121,847|       1.6|
+-------------------------+---------------+--------------------+----------+
|Financial income         |        (3,273)|             (4,459)|    (26.6)|
|(expenses), net          |               |                    |          |
+-------------------------+---------------+--------------------+----------+
|PRE-TAX INCOME           |        120,581|             117,388|       2.7|
+-------------------------+---------------+--------------------+----------+
|Provision for income     |       (33,555)|            (32,111)|       4.5|
|taxes                    |               |                    |          |
+-------------------------+---------------+--------------------+----------+
|NET INCOME               |         87,026|              85,277|       2.1|
+-------------------------+---------------+--------------------+----------+
|Attributable to:         |               |                    |          |
+-------------------------+---------------+--------------------+----------+
|Equity holders of the    |         87,021|              85,272|       2.1|
|parent                   |               |                    |          |
+-------------------------+---------------+--------------------+----------+
|Minority interests       |              5|                   5|       0.0|
+-------------------------+---------------+--------------------+----------+

+--------------------+--------------------+--------------------+----------+
|  EARNINGS PER SHARE|First nine months   |First nine months   |  Change %|
|                    |2010                |2009                |          |
+--------------------+--------------------+--------------------+----------+
|  Basic             |               0.439|               0.433|       1,4|
+--------------------+--------------------+--------------------+----------+
|  Diluted           |               0.420|               0.419|       0,2|
+--------------------+--------------------+--------------------+----------+


Earnings per share (EPS) are based on average shares outstanding during each year, 198,022,888 in 2010 and 197,155,264 in 2009, net of average treasury stock which amounted to 11,102,268 shares in 2010 and to 11,472,355 shares in 2009.

Diluted earnings per share is calculated taking into account stock options granted to employees.

+-------------------------+--------------+---------------+----------+
|COMPOSITION OF REVENUE   |First nine    |First nine     |  Change %|
|                         |months 2010   |months 2009    |          |
+-------------------------+--------------+---------------+----------+
|Pharmaceuticals          |       529,633|        535,573|     (1.1)|
+-------------------------+--------------+---------------+----------+
| Pharmaceutical chemicals|        18,996|         20,614|     (7.8)|
+-------------------------+--------------+---------------+----------+
|TOTAL                    |       548,629|        556,187|     (1.4)|
+-------------------------+--------------+---------------+----------+
| - of which International|       396,643|        398,206|     (0.4)|
+-------------------------+--------------+---------------+----------+


RECORDATI GROUP

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

(thousands of €)

+-------------------------+--------------+--------------+----------+
|INCOME STATEMENT         |  3rd quarter |  3rd quarter |  Change %|
+-------------------------+--------------+--------------+----------+
|                         |          2010|          2009|          |
+-------------------------+--------------+--------------+----------+
|REVENUE                  |       172,366|       176,886|     (2.6)|
+-------------------------+--------------+--------------+----------+
|Cost of sales            |      (58,100)|      (55,769)|       4.2|
+-------------------------+--------------+--------------+----------+
|GROSS PROFIT             |       114,266|       121,117|     (5.7)|
+-------------------------+--------------+--------------+----------+
|Selling expenses         |      (50,096)|      (53,293)|     (6.0)|
+-------------------------+--------------+--------------+----------+
|Research and development |      (13,154)|      (15,840)|    (17.0)|
|expenses                 |              |              |          |
+-------------------------+--------------+--------------+----------+
|General & administrative |       (9,856)|       (9,783)|       0.7|
|expenses                 |              |              |          |
+-------------------------+--------------+--------------+----------+
|Other income (expenses), |       (1,136)|       (2,854)|    (60.2)|
|net                      |              |              |          |
+-------------------------+--------------+--------------+----------+
|OPERATING INCOME         |        40,024|        39,347|       1.7|
+-------------------------+--------------+--------------+----------+
|Financial income         |       (1,890)|       (1,699)|      11.2|
|(expenses), net          |              |              |          |
+-------------------------+--------------+--------------+----------+
|PRE-TAX INCOME           |        38,134|        37,648|       1.3|
+-------------------------+--------------+--------------+----------+
|Provision for income     |      (10,316)|      (10,112)|       2.0|
|taxes                    |              |              |          |
+-------------------------+--------------+--------------+----------+
|NET INCOME               |        27,818|        27,536|       1.0|
+-------------------------+--------------+--------------+----------+
|Attributable to:         |              |              |          |
+-------------------------+--------------+--------------+----------+
|Equity holders of the    |        27,815|        27,533|       1.0|
|parent                   |              |              |          |
+-------------------------+--------------+--------------+----------+
|Minority interests       |             3|             3|       0.0|
+-------------------------+--------------+--------------+----------+

+-------------------------+--------------+--------------+----------+
|COMPOSITION OF REVENUE   |  3rd quarter |  3rd quarter |  Change %|
+-------------------------+--------------+--------------+----------+
|                         |          2010|          2009|          |
+-------------------------+--------------+--------------+----------+
|Pharmaceuticals          |       166,253|       170,447|     (2.5)|
+-------------------------+--------------+--------------+----------+
| Pharmaceutical chemicals|         6,113|         6,439|     (5.1)|
+-------------------------+--------------+--------------+----------+
|TOTAL                    |       172,366|       176,886|     (2.6)|
+-------------------------+--------------+--------------+----------+
| - of which International|       127,738|       129,080|     (1.0)|
+-------------------------+--------------+--------------+----------+
+-------------------------+--------------+--------------+----------+


RECORDATI GROUP

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

(thousands of €)

+-------------------------+-----------+------------+
|ASSETS                   |  30.9.2010|  31.12.2009|
+-------------------------+-----------+------------+
|Property, plant and      |     53,473|      55,381|
|equipment                |           |            |
+-------------------------+-----------+------------+
|Intangible assets        |    109,717|      96,512|
+-------------------------+-----------+------------+
|Goodwill                 |    308,473|     303,653|
+-------------------------+-----------+------------+
|Equity investments       |      1,924|       3,716|
+-------------------------+-----------+------------+
|Non-current receivables  |      2,476|       3,804|
+-------------------------+-----------+------------+
|Deferred tax assets      |     20,242|      21,793|
+-------------------------+-----------+------------+
|TOTAL NON-CURRENT ASSETS |    496,305|     484,859|
+-------------------------+-----------+------------+
|Inventories              |     83,717|      86,627|
+-------------------------+-----------+------------+
|Trade receivables        |    125,905|     132,621|
+-------------------------+-----------+------------+
|Other receivables        |     21,167|      22,990|
+-------------------------+-----------+------------+
|Other current assets     |      4,119|       2,607|
+-------------------------+-----------+------------+
|Fair value of hedging    |      2,787|           0|
|derivatives (fair value  |           |            |
|hedge)                   |           |            |
+-------------------------+-----------+------------+
|Short-term financial     |    108,430|      93,775|
|investments, cash and    |           |            |
|cash equivalents         |           |            |
+-------------------------+-----------+------------+
|TOTAL CURRENT ASSETS     |    346,125|     338,620|
+-------------------------+-----------+------------+
|TOTAL ASSETS             |    842,430|     823,479|
+-------------------------+-----------+------------+

+-------------------------+-----------+------------+
|EQUITY AND LIABILITIES   |  30.6.2010|  31.12.2009|
+-------------------------+-----------+------------+
|Share capital            |     26,141|      26,141|
+-------------------------+-----------+------------+
|Capital in excess of par |     83,719|      83,719|
|value                    |           |            |
+-------------------------+-----------+------------+
|Treasury stock           |   (55,129)|    (59,103)|
+-------------------------+-----------+------------+
|Hedging reserve          |    (5,735)|     (4,040)|
+-------------------------+-----------+------------+
|Translation reserve      |        104|     (6,178)|
+-------------------------+-----------+------------+
|Other reserves           |     25,794|      25,025|
+-------------------------+-----------+------------+
|Retained earnings        |    388,400|     332,836|
+-------------------------+-----------+------------+
|Net income for the period|     87,021|     110,560|
+-------------------------+-----------+------------+
|GROUP SHAREHOLDERS’      |    550,315|     508,960|
|EQUITY                   |           |            |
+-------------------------+-----------+------------+
|Minority interest        |         24|          19|
+-------------------------+-----------+------------+
|SHAREHOLDERS’ EQUITY     |    550,339|     508,979|
+-------------------------+-----------+------------+
|Loans due after one year |     84,253|      79,990|
+-------------------------+-----------+------------+
|Employees’ termination   |     19,335|      19,895|
|pay                      |           |            |
+-------------------------+-----------+------------+
|Deferred tax liabilities |      5,573|       5,661|
+-------------------------+-----------+------------+
|Other non-current        |        602|       6,179|
|liabilities              |           |            |
+-------------------------+-----------+------------+
|TOTAL NON-CURRENT        |    109,763|     111,725|
|LIABILITIES              |           |            |
+-------------------------+-----------+------------+
|Trade payables           |     89,416|      81,751|
+-------------------------+-----------+------------+
|Other payables           |     46,044|      48,406|
+-------------------------+-----------+------------+
|Tax liabilities          |     13,458|      12,555|
+-------------------------+-----------+------------+
|Other current liabilities|        608|         517|
+-------------------------+-----------+------------+
|Provisions               |     20,188|      21,978|
+-------------------------+-----------+------------+
|Fair value of hedging    |      5,735|       4,040|
|derivatives (cash flow   |           |            |
|hedge)                   |           |            |
+-------------------------+-----------+------------+
|Fair value of hedging    |          0|       2,257|
|derivatives (fair value  |           |            |
|hedge)                   |           |            |
+-------------------------+-----------+------------+
|Loans due within one year|      1,280|       2,419|
+-------------------------+-----------+------------+
|Bank overdrafts          |      5,599|      28,852|
+-------------------------+-----------+------------+
|TOTAL CURRENT LIABILITIES|    182,328|     202,775|
+-------------------------+-----------+------------+
|TOTAL EQUITY AND         |    842,430|     823,479|
|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

Contact Information

  • 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: Email Contact
    e-mail: Email Contact