SOURCE:
Recordati S.p.A.
2008-07-30 10:49:00
Recordati Reports Revenue and Earnings Growth in the First Half 2008
MILAN, ITALY–(EMWNews – July 30, 2008) –
– Consolidated revenue EUR 348.2 million, + 8.6%.
– Pharmaceutical revenue EUR 331.5 million, + 10.0%.
– International sales EUR 241.5 million (69.4% of total sales), + 13.3%.
– Operating income EUR 75.8 million, + 8.9%.
– Net income EUR 52.4 million, + 16.7%.
– Net financial position*: net debt of EUR 85.9 million.
– Sale of Jaba Recordati’s production business in Portugal
– Acquisition of FIC and FIC Médical present in Russia and other C.I.S.
countries.
– MRP for approval of lercanidipine+enalapril fixed combination in Europe
completed.
The Board of Directors of Recordati S.p.A. approved the half-yearly
financial report which was prepared pursuant to Article 154-ter of
Legislative Decree 58/1998 and is consistent with applicable international
financial accounting standards adopted by the European Union in EC
Regulation 1606/2002 issued by the European Parliament and the Council of
the European Union on 19 July 2002 – in particular, the requirements of IAS
34: Interim Reporting.
First half financial highlights
– In the first half 2008 consolidated revenue is EUR 348.2 million, an
increase of 8.6% over the same period of the preceding year. Pharmaceutical
sales are EUR 331.5 million, an increase of 10.0% and include the Orphan
Europe group of companies acquired at the end of 2007. The growth is to be
attributed to the international sales which are up 16.7% while sales in
Italy are down by 2.4% mainly due to a negative price effect.
Pharmaceutical chemicals sales are EUR 16.6 million, down by 13.3%.
– Operating income, at 21.8% of sales, is EUR 75.8 million, an increase of
8.9% over the first half of the preceding year. Gross margin continues to
improve and now stands at 68.1% of sales due to a favourable product mix.
Other expenses net of other income include the EUR 8.3 million capital
gain realized on the sale of Jaba Recordati’s production facility in
Portugal and the write-down of the residual value of two products following
the termination of their license agreements for a total of EUR 6.4
million.
– Net income is EUR 52.4 million, an increase of 16.4% more than the
increase in operating income thanks to a lower tax rate due in part to the
tax exemption applied to the abovementioned capital gain.
– The net financial position* at 30 June 2008 is a net debt of EUR 85.9
million, a reduction of EUR 11.2 million as compared to the net debt
position at 31 December 2007. Shareholders’ equity further increased and is
EUR 401.1 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
– During January an exclusive license agreement was signed with a
subsidiary of Watson Pharmaceuticals, Inc. a U.S. pharmaceutical company,
for the marketing and sale in 29 European countries of Kentera®, a bi-
weekly oxybutynin transdermal patch indicated for the symptomatic treatment
of urge incontinence and/or increased urinary frequency and urgency as may
occur in patients. Kentera® is on the market in a number of countries
with current annual sales of over EUR 7 million. The acquisition of
Kentera® reinforces Recordati’s focus in the urology area where it is
developing silodosin, indicated for the treatment of benign prostate
hypertrophy, due for filing in Europe in the second half of 2008.
– In February a semi-exclusive licensing agreement was entered into with
Menarini, the leading Italian pharmaceutical group, for the marketing and
sales of frovatriptan, a medicine belonging to the triptan group of drugs
indicated for the acute treatment of migraine attacks with or without aura,
in France and Greece. Frovatriptan is a selective 5HT1B/1D receptor
agonist. Frovatriptan is distinguished from other triptans by its long half-
life (26 hours) which ensures long-lasting clinical efficacy and reduces
the recurrence rate of migraine attacks. The product is already approved in
the licensed markets and is sold there by Menarini under a different brand.
Recordati intends to launch its own brand in these countries in the next
few months.
– In March the French companies FIC and FIC Médical which are dedicated to
the registration and the promotion of pharmaceutical products on behalf of
third party companies in Russia and other Commonwealth of Independent
States (C.I.S.) countries were acquired. FIC Médical, headquartered in
Paris, is present in Russia, Ukraine, Belarus, Kazakhstan and Georgia, and
is planning to enter Armenia and Azerbaijan. The company’s business is
carried out by around 200 people, of which 150 are medical representatives.
The price of the acquisition is EUR 12 million, of which EUR 9 million
were paid upon signing the agreement while EUR 3 million are due over a
period of three years contingent upon certain conditions. FIC Médical’s
organization will be the base upon which Recordati will develop its own
presence in Russia and in the C.I.S. markets, driven, among others, by the
enhancement of the product portfolio through the launch of its new original
products.
– Also in March the mutual recognition process for the approval throughout
the European Union, in Norway and in Iceland, of Recordati’s new
antihypertensive specialty based on a fixed combination of lercanidipine
and enalapril was completed. Germany acted as Reference Member State and
the 28 Concerned Member States decided to recognize the approval granted in
2006 by the German medicines agency (BfArM) of this new product in its two
dosage forms containing lercanidipine 10mg/enalapril 10mg and lercanidipine
10mg/enalapril 20mg. The product is already on the market in Germany as
from 2007 and sales are growing. Launches in all these countries, in which
lercanidipine has already obtained the physicians’ appreciation, will
initiate gradually as from the second half of the year. During May our
licensee Solvay Biosciences launched this new combination product in
Australia under the brand Zan-Extra®. This product, which is designed to
meet the requirements of the modern guidelines for the treatment of
hypertension, represents an important opportunity for the group to further
develop its lercanidipine business, also in view of the compound’s patent
expiry in the main European countries at the beginning of 2010.
– During June Jaba Recordati’s pharmaceutical manufacturing business, which
includes third party production, in Sintra, Portugal was split out into a
new company (Atlantic Pharma S.A.), 90% of which was subsequently sold to
Tecnimede, a Portuguese pharmaceutical group. The transfer involved the
property, plant and equipment, the 120 staff employed in manufacturing
activities and the working capital allocated to production. The price of
the transaction is EUR 25.1 million which gave rise to a EUR 8.3 million
capital gain.
Management comments
“During the first half of the year a series of new events took place which
are directed at maintaining the group’s growth trend into the future”,
stated Giovanni Recordati, Chairman and Chief Executive Officer. “In
particular, we are also now present directly in Russia and other C.I.S.
countries where the pharmaceutical market is growing strongly and where we
intend to market our new products. We are also very satisfied with the
financial results achieved in these last six months. We therefore confirm
our objectives for the full year 2008 with revenue and earnings expected to
grow by 10% while we have increased our net income target to approximately
EUR 100 million to incorporate the more favorable tax rate due to the tax
exemption applied to the capital gain realized in Portugal.”
Conference call
Recordati will be hosting a conference call today 30 July 2008 at 4.00 pm
Italian time (3.00 pm London time, 10.00 am New York time). The conference
ID is 53937732 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 53937732. 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
Recordati, established in 1926, is a European pharmaceutical group, listed
on the Italian Stock Exchange (Reuters RECI.MI, Bloomberg REC IM, ISIN IT
0003828271), dedicated to the research, development, manufacturing and
marketing of pharmaceuticals, with headquarters in Milan, Italy, operations
in the main European countries, and a total staff of over 2,400. A European
field force of over 1,300 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 of new drug entities
within the cardiovascular and urogenital therapeutic areas in which its
research team has proven scientific competence and a track record of
discovery and development of original drugs, the most recent of which,
lercanidipine, a latest generation calcium channel blocker for the
treatment of hypertension, is the company’s leading product. Consolidated
revenue for 2007 was EUR 628.4 million, operating income was EUR 131.5
million and net income was EUR 84.9 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 | First half 2008| First half 2007| Change %| +-------------------------+-----------------+-----------------+----------+ |REVENUE | 348,187| 320,498| 8.6| +-------------------------+-----------------+-----------------+----------+ |Cost of sales | (111,226)| (103,358)| 7.6| +-------------------------+-----------------+-----------------+----------+ |GROSS PROFIT | 236,961| 217,140| 9.1| +-------------------------+-----------------+-----------------+----------+ |Selling expenses | (112,055)| (103,866)| 7.9| +-------------------------+-----------------+-----------------+----------+ |Research and development | (27,980)| (25,011)| 11.9| |expenses | | | | +-------------------------+-----------------+-----------------+----------+ |General & administrative | (20,292)| (17,245)| 17.7| |expenses | | | | +-------------------------+-----------------+-----------------+----------+ |Other income (expenses), | (828)| (1,390)| (40.4)| |net | | | | +-------------------------+-----------------+-----------------+----------+ |OPERATING INCOME | 75,806| 69,628| 8.9| +-------------------------+-----------------+-----------------+----------+ |Financial income | (4,388)| (898)| 388.6| |(expenses), net | | | | +-------------------------+-----------------+-----------------+----------+ |PRE-TAX INCOME | 71,418| 68,730| 3.9| +-------------------------+-----------------+-----------------+----------+ |Provision for income | (18,991)| (23,795)| (20.2)| |taxes | | | | +-------------------------+-----------------+-----------------+----------+ |NET INCOME | 52,427| 44,935| 16,7| +-------------------------+-----------------+-----------------+----------+ |Attributable to: | | | | +-------------------------+-----------------+-----------------+----------+ |Equity holders of the | 52,425| 44,935| 16.7| |parent | | | | +-------------------------+-----------------+-----------------+----------+ |Minority interests | 2| 0| n.s.| +-------------------------+-----------------+-----------------+----------+ +--------------------+-----------------+-----------------+----------+ | EARNINGS PER SHARE| First half 2008| First half 2007| Change %| +--------------------+-----------------+-----------------+----------+ | Basic | EUR 0.267| EUR 0.225| 18.7| +--------------------+-----------------+-----------------+----------+ | Diluted | EUR 0.262| EUR 0.219| 19.6| +--------------------+-----------------+-----------------+----------+ +--------------------+-----------------+-----------------+----------+
Earnings per share (EPS) are based on average shares outstanding during
each year, 196,469,158 in 2008 and 199,968,963 in 2007, net of average
treasury stock which amounted to 11,472,355 in 2008 and 6,643,554 in 2007.
Diluted earnings per share is calculated taking into account new shares
authorized but not yet issued.
+-------------------------+-----------------+-----------------+----------+ |COMPOSITION OF REVENUE | First half 2008| First half 2007| Change %| +-------------------------+-----------------+-----------------+----------+ |Pharmaceuticals | 331,549| 301,315| 10.0| +-------------------------+-----------------+-----------------+----------+ | Pharmaceutical chemicals| 16,638| 19,183| (13.3)| +-------------------------+-----------------+-----------------+----------+ |TOTAL | 348,187| 320,498| 8.6| +-------------------------+-----------------+-----------------+----------+ | - of which International| 241,510| 213,189| 13.3| +-------------------------+-----------------+-----------------+----------+ +-------------------------+-----------------+-----------------+----------+
Pending the 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 )
+--------------------+--------------------+--------------------+----------+ |INCOME STATEMENT | Second quarter 2008| Second quarter 2007| Change %| +--------------------+--------------------+--------------------+----------+ |REVENUE | 176,321| 157,070| 12.3| +--------------------+--------------------+--------------------+----------+ |Cost of sales | (55,489)| (48,940)| 13.4| +--------------------+--------------------+--------------------+----------+ |GROSS PROFIT | 120,832| 108,130| 11.7| +--------------------+--------------------+--------------------+----------+ |Selling expenses | (58,837)| (53,380)| 10.2| +--------------------+--------------------+--------------------+----------+ |Research and | (14,601)| (12,043)| 21.2| |development expenses| | | | +--------------------+--------------------+--------------------+----------+ |General & | (10,144)| (8,888)| 14.1| |administrative expenses | | | +--------------------+--------------------+--------------------+----------+ |Other income | 409| (1,278)| n.s.| |(expenses), net | | | | +--------------------+--------------------+--------------------+----------+ |OPERATING INCOME | 37,659| 32,541| 15.7| +--------------------+--------------------+--------------------+----------+ |Financial income | (2,132)| (590)| 261.4| |(expenses), net | | | | +--------------------+--------------------+--------------------+----------+ |PRE-TAX INCOME | 35,527| 31,951| 11.2| +--------------------+--------------------+--------------------+----------+ |Provision for | (8,363)| (10,536)| (20.6)| |income taxes | | | | +--------------------+--------------------+--------------------+----------+ |NET INCOME | 27,164| 21,415| 26.8| +--------------------+--------------------+--------------------+----------+ |Attributable to: | | | | +--------------------+--------------------+--------------------+----------+ |Equity holders of | 27,163| 21,415| 26.8| |the parent | | | | +--------------------+--------------------+--------------------+----------+ |Minority interests | 1| 0| n.s.| +--------------------+--------------------+--------------------+----------+ +--------------------+--------------------+--------------------+----------+ |COMPOSITION OF | Second quarter 2008| Second quarter 2007| Change %| |REVENUE | | | | +--------------------+--------------------+--------------------+----------+ |Pharmaceuticals | 168,170| 147,628| 13.9| +--------------------+--------------------+--------------------+----------+ |Pharmaceutical | 8,151| 9,442| (13.7)| |chemicals | | | | +--------------------+--------------------+--------------------+----------+ |TOTAL | 176,321| 157,070| 12.3| +--------------------+--------------------+--------------------+----------+ | - of which | 125,335| 106,882| 17.3| | International | | | | +--------------------+--------------------+--------------------+----------+ +--------------------+--------------------+--------------------+----------+
Pending the 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 | 30.06.2008| 31.12.2007| +-------------------------+------------+------------+ |Property, plant and | 52,956| 68,006| |equipment | | | +-------------------------+------------+------------+ |Intangible assets | 87,798| 90,521| +-------------------------+------------+------------+ |Goodwill | 249,783| 243,942| +-------------------------+------------+------------+ |Equity investments | 4,815| 3,115| +-------------------------+------------+------------+ |Non-current receivables | 1,232| 1,460| +-------------------------+------------+------------+ |Deferred tax assets | 22,388| 21,044| +-------------------------+------------+------------+ |TOTAL NON-CURRENT ASSETS | 418.972| 428,088| +-------------------------+------------+------------+ |Inventories | 83,963| 74,737| +-------------------------+------------+------------+ |Trade receivables | 142,376| 134,454| +-------------------------+------------+------------+ |Other receivables | 18,316| 24,784| +-------------------------+------------+------------+ |Other current assets | 6,509| 3,247| +-------------------------+------------+------------+ |Fair value of hedging | 679| 0| |derivatives (cash flow | | | |hedge) | | | +-------------------------+------------+------------+ |Short-term financial | 125,324| 89,382| |investments, cash and | | | |cash equivalents | | | +-------------------------+------------+------------+ |TOTAL CURRENT ASSETS | 377,167| 326,604| +-------------------------+------------+------------+ |TOTAL ASSETS | 796,139| 754,692| +-------------------------+------------+------------+ +-------------------------+------------+------------+ |EQUITY AND LIABILITIES | 30.06.2008| 31.12.2007| +-------------------------+------------+------------+ |Share capital | 26,037| 25,981| +-------------------------+------------+------------+ |Capital in excess of par | 80,549| 78,952| |value | | | +-------------------------+------------+------------+ |Treasury stock | (59,103)| (59,103)| +-------------------------+------------+------------+ |Hedging reserve | 679| (113)| +-------------------------+------------+------------+ |Translation reserve | (5,868)| (3,384)| +-------------------------+------------+------------+ |Other reserves | 25,549| 25,529| +-------------------------+------------+------------+ |Retained earnings | 280,779| 237,876| +-------------------------+------------+------------+ |Net income for the year | 52,425| 84,865| +-------------------------+------------+------------+ |GROUP SHAREHOLDERS' | 401,047| 390,603| |EQUITY | | | +-------------------------+------------+------------+ |Minority interest | 10| 8| +-------------------------+------------+------------+ |SHAREHOLDERS' EQUITY | 401,057| 390,611| +-------------------------+------------+------------+ |Loans due after one year | 73,005| 77,250| +-------------------------+------------+------------+ |Employees' termination | 19,784| 20,431| |pay | | | +-------------------------+------------+------------+ |Deferred tax liabilities | 7,654| 9,601| +-------------------------+------------+------------+ |Other non-current | 1,390| 0| |liabilities | | | +-------------------------+------------+------------+ |TOTAL NON-CURRENT | 101.833| 107,282| |LIABILITIES | | | +-------------------------+------------+------------+ |Trade payables | 82,469| 80,343| +-------------------------+------------+------------+ |Other payables | 45,335| 40,868| +-------------------------+------------+------------+ |Tax liabilities | 16,972| 15,762| +-------------------------+------------+------------+ |Other current liabilities| 276| 346| +-------------------------+------------+------------+ |Provisions | 9,936| 10,076| +-------------------------+------------+------------+ |Fair value of hedging | 0| 113| |derivatives (cash flow | | | |hedge) | | | +-------------------------+------------+------------+ |Fair value of hedging | 11,030| 7,556| |derivatives (fair value | | | |hedge) | | | +-------------------------+------------+------------+ |Loans due within one year| 2,309| 2,939| +-------------------------+------------+------------+ |Bank overdrafts | 124,922| 98,796| +-------------------------+------------+------------+ |TOTAL CURRENT LIABILITIES| 293,249| 256,799| +-------------------------+------------+------------+ |TOTAL EQUITY AND | 796,139| 754,692| |LIABILITIES | | | +-------------------------+------------+------------+
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.
This information is provided by HUGIN
| For further information: Recordati website: www.recordati.com Investor Relations Media Relations |
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