RECORDATI ANNOUNCES GROWTH
IN THE FIRST QUARTER 2020. REVENUES
+12.1%, EBITDA
+20.1%.
- Consolidated revenues € 429.2 million, +12.1%.
- EBITDA (1) € 172.9 million, +20.1%
- Operating income € 148.4 million, +17.8%.
- Net income € € 111.2 million, + 20.7%
- Adjusted net income (2) € 125.2 million, +23.5%.
- Net financial position (3): net debt of € 880.8 million;
€ 902.7 million at 31 December 2019.
- Shareholders’ equity € 1,242.9 million.
- Isturisa® (osilodrostat) approved in Europe and in the U.S.A.,
filed for approval in Japan..
Milan, 7 May 2020 – The Board of Directors of
Recordati S.p.A. approved the Group’s consolidated results for the
first quarter of 2020 prepared in accordance with the recognition
and measurement criteria prescribed by the International Financial
Reporting Standards (IFRS). These financial statements will be
available today at the company’s offices and on the company’s
website www.recordati.com and can also be viewed on the authorized
storage system 1Info (www.1Info.it).
Financial
highlights
- Consolidated revenues in the first quarter of
2020 are € 429.2 million, up by 12.1% compared to the same period
of the preceding year. International sales grow by 15.6%. They
include accelerated stock building by wholesalers and pharmacies
during the month of March to face the COVID-19 emergency in Italy
as well as internationally, for an estimated € 20 million, which is
expected to lead to de-stocking in the second quarter. Also
included is revenue of € 14.7 million related to Signifor® and
Signifor® LAR, which were consolidated starting 24 October
2019.
- EBITDA (1) is € 172.9 million, or 40.3% of
sales (37.6% in the first quarter of 2019), an increase of 20.1%.
EBITDA excludes non-recurring costs related to the COVID-19
epidemiological emergency of € 2.0 million, which comprise mainly
donations to hospitals.
- Operating income, at 34.6% of sales, is €
148.4 million, an increase of 17.8% over the same period of the
preceding year.
- Net income, at 25.9% of sales, is € 111.2
million, up 20.7% over the first quarter of 2019, thanks to
increase in operating income, lower financial expenses and
reduction of the effective tax rate. Adjusted net
income (2), at 29.2% of sales, is € 125.2
million, an increase of 23.5% over the first quarter of 2019. Given
the increased amount of intangible assets on the Group’s balance
sheet and their amortization, in order to provide information in
line with best practice in the sector, an additional performance
measure, adjusted net income, which is net income excluding
amortization and write-down of intangible assets (except software)
and goodwill, and non-recurring items, net of tax effects, has been
introduced.
- Net financial position (3) at 31 March 2020
records a net debt of € 880.8 million compared to net debt of €
902.7 million at 31 December 2019. During the period a
milestone of $ 20.0 million was paid to Novartis following the
European approval of Isturisa® and own shares were purchased for a
total outlay, net of disposals for the exercise of stock options,
of € 44.0 million. Shareholders’ equity is €
1,242.9 million.
(1) Net income before financial (income)
expense, provision for taxes, depreciation, amortization and write
down of property, plant and equipment, intangible assets and
goodwill, and non-recurring items.(2) Net income excluding
amortization and write-down of intangible assets (except software)
and goodwill, and non-recurring items, net of tax effects.(3) Cash
and short-term financial investments less bank overdrafts and loans
which include the measurement at fair value of hedging
derivatives.
Corporate development news
In January the European Commission granted
marketing authorisation for the orphan medicinal product Isturisa®
(osilodrostat), indicated for the treatment of endogenous Cushing’s
syndrome (CS) in adults. In March, the FDA approved Isturisa® for
the treatment of patients with Cushing’s disease, for whom
pituitary surgery is not an option or has not been curative, in the
U.S.A.. Both the European Commission and the FDA confirmed the
orphan drug status of Isturisa®. Also in March, the Japanese New
Drug Application (JNDA) was submitted to the Ministry of Health,
Labour and Welfare seeking marketing approval for osilodrostat.
The active substance of Isturisa® is
osilodrostat, a cortisol synthesis inhibitor. Osilodrostat works by
inhibiting 11-beta-hydroxylase, an enzyme responsible for the final
step of cortisol biosynthesis in the adrenal gland. The benefits of
Isturisa® are its ability to control or normalise cortisol levels
in adult CS patients with a manageable safety profile, making this
product a valuable treatment option for patients with Cushing’s
syndrome.
As per the agreement with Novartis, in the month
of February the marketing authorizations for Signifor® and
Signifor® LAR in the U.S. were transferred to Recordati Rare
Diseases Inc. and direct marketing of these products on this market
started.
Subsequent events and business
outlook
On 14 February the Company published its targets
for 2020 which included, among others, net income of between € 360
and € 370 million compared to € 368.9 million in 2019 which
included a non-recurring benefit of € 27 million resulting from the
so-called Patent box fiscal benefit related to preceding years. The
target for adjusted net income in 2020, that excludes amortization
and write-down of intangible assets (except software) and goodwill,
as well as non-recurring events, net of tax effects, would have
been between € 408 and € 418 million, an increase over the € 383,0
million in 2019 according to the same definition.
Italy and all the main countries in which the
Group operates continue to be impacted by restrictions to the
circulation of people and provisions to support companies’ economic
activities have been introduced following the epidemiologic
emergency due to the COVID-19 virus, declared a pandemic by the OMS
in March. To face the emergency, in Italy, and subsequently also in
other countries the Group has implemented all possible measures and
initiatives to guarantee the supply of medicines to its patients
and the safety of its employees.
Given the complex and continuously evolving
situation, possible future impacts are not for the moment entirely
predictable but the Company expects EBITDA and adjusted net income
to be in line with the lower limit of the target ranges announced
in February.
Management Comments
“The first quarter of 2020 saw the onset of the
COVID-19 pandemic in all geographical areas in which the Group
operates. As we all know, restrictions were imposed on the movement
of people, transport, production, commerce, most of which are still
in place”, stated Andrea Recordati, CEO. “Pharmaceutical operations
where allowed to continue in order to ensure the availability of
drugs for patients. While complying with all the measures
necessary to ensure the health and safety of its employees,
Recordati did not interrupt its production and distribution
activities and adopted all necessary measures to guarantee
the continued availability on the market of its products”,
continued Andrea Recordati. “Despite the medical emergency and the
restrictions implemented in all countries, the financial results
obtained in the first quarter are very positive and confirm the
continued growth of the Group. I wish to sincerely thank all the
Group’s employees for the great effort and excellent job done in
this difficult situation. Their professionalism, dedication and
sense of responsibility, in particular our manufacturing and
distribution employees, allowed our activities to continue in the
best way possible, ensuring the uninterrupted availability of our
products, many of which are for the treatment of severe, chronic
diseases. We are proud of the contribution we have been able to
provide in this emergency, also through the donations we have made
to support healthcare institutions who are tirelessly and
courageously committed to fighting the COVID-19 epidemic in the
most affected areas”.
Conference call
Recordati will be hosting a conference call
today 7 May 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 858UK
+44 1 212818003, toll free 800 0156384USA
+1 718 7058794, toll free 855 2656959 France
+33 170918703 Germany
+49 69
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 more than 4,300, dedicated to
the research, development, manufacturing and marketing of
pharmaceuticals. Headquartered in Milan, Italy, Recordati has
operations throughout the whole of Europe, including Russia,
Turkey, North Africa, the United States of America, Canada, Mexico,
some South American countries, Japan and Australia. An
efficient field force of 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
specialties with a focus on treatments for rare diseases.
Consolidated revenue for 2019 was € 1,481.8 million, operating
income was € 465.3 million and net income was € 368.9 million.
For further information:
Recordati website: www.recordati.com
Investor Relations
Media
Relations
Marianne
Tatschke
Studio Noris
Morano
(39)0248787393
(39)0276004736, (39)0276004745e-mail: investorelations@recordati.it
e-mail:
norismorano@studionorismorano.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 GROUPSummary of
consolidated results prepared in accordance with the International
Financial Reporting Standards (IFRS)(thousands of €)
INCOME STATEMENT |
First quarter 2020 |
First quarter 2019 |
Change % |
REVENUE |
429,235 |
382,990 |
12.1 |
Cost of sales |
(125,511) |
(116,466) |
7.8 |
GROSS PROFIT |
303,724 |
266,524 |
14.0 |
Selling expenses |
(99,854) |
(94,563) |
5.6 |
Research and development expenses |
(34,928) |
(29,152) |
19.8 |
General & administrative expenses |
(18,369) |
(17,254) |
6.5 |
Other income (expenses), net |
(2,147) |
455 |
n.s. |
OPERATING INCOME |
148,426 |
126,010 |
17.8 |
Financial income (expenses), net |
(2,896) |
(3,991) |
(27.4) |
PRE-TAX INCOME |
145,530 |
122,019 |
19.3 |
Provision for income taxes |
(34,335) |
(29,907) |
14.8 |
NET INCOME |
111,195 |
92,112 |
20.7 |
Attributable to: |
|
|
|
Equity holders of the parent |
111,183 |
92,100 |
20.7 |
Non-controlling interests |
12 |
12 |
0.0 |
EARNINGS PER SHARE |
|
|
|
Basic (1) |
€ 0.540 |
€ 0.451 |
19.7 |
Diluted (2) |
€ 0.532 |
€ 0.440 |
20.9 |
ADJUSTED NET INCOME (3) |
125,175 |
101,364 |
23.5 |
EBITDA (4) |
172,872 |
143,939 |
20.1 |
(1) Earnings per share (EPS) are based on
average shares outstanding during each year, 205,786,745 in 2020
and 204,019,974 in 2019, net of average treasury stock which
amounted to 3,338,411 shares in 2020 and to 5,105,182 shares in
2019.(2) Diluted earnings per share is calculated taking into
account stock options granted to employees.(3) Net income excluding
amortization and write-down of intangible assets (except software)
and goodwill, and non-recurring items, net of tax effects.(4) Net
income before financial (income) expense, provision for taxes,
depreciation, amortization and write down of property, plant and
equipment, intangible assets and goodwill, and non-recurring
items. |
COMPOSITION OF REVENUE |
First quarter 2020 |
First quarter 2019 |
Change % |
Total revenue |
429,235 |
382,990 |
12.1 |
Italy |
81,536 |
82,223 |
(0.8) |
International |
347,699 |
300,767 |
15.6 |
RECORDATI GROUPSummary of
consolidated results prepared in accordance with the International
Accounting Standards and International Financial Reporting
Standards (IFRS)(thousands of €)
ASSETS |
31.03.2020 |
31.12.2019 |
|
|
|
Property, plant and equipment |
130,415 |
133,342 |
Intangible assets |
1,157,390 |
1,161,760 |
Goodwill |
570,518 |
577,973 |
Equity investments |
28,469 |
38,566 |
Non-current receivables |
16,291 |
16,426 |
Deferred tax assets |
69,160 |
71,513 |
TOTAL NON-CURRENT ASSETS |
1,972,243 |
1,999,580 |
|
|
|
Inventories |
224,549 |
226,885 |
Trade receivables |
336,124 |
296,961 |
Other receivables |
63,131 |
79,949 |
Other current assets |
13,510 |
7,683 |
Fair value of hedging derivatives (cash flow hedge) |
17,041 |
9,949 |
Short-term financial investments, cash and cash equivalents |
196,089 |
187,923 |
TOTAL CURRENT ASSETS |
850,444 |
809,350 |
TOTAL ASSETS |
2,822,687 |
2,808,930 |
RECORDATI GROUPSummary of
consolidated results prepared in accordance with the International
Accounting Standards and International Financial Reporting
Standards (IFRS)(thousands of €)
EQUITY AND LIABILITIES |
31.03.2020 |
31.12.2018 |
|
|
|
Share capital |
26,141 |
26,141 |
Capital in excess of par value |
83,719 |
83,719 |
Treasury stock |
(132,460) |
(93,480) |
Hedging reserve |
(2,794) |
(5,357) |
Translation reserve |
(164,084) |
(146,866) |
Other reserves |
54,847 |
64,651 |
Retained earnings |
1,364,879 |
999,708 |
Net income for the period |
111,183 |
368,825 |
Interim dividend |
(98,764) |
(98,764) |
Equity attributable to the holders of the Parent |
1,242,667 |
1,198,577 |
Non-controlling interests |
246 |
234 |
TOTAL EQUITY |
1,242,913 |
1,198,811 |
|
|
|
Loans due after one year |
937,442 |
937,344 |
Employees’ termination pay |
20,430 |
20,557 |
Deferred tax liabilities |
41,809 |
43,172 |
Other non-current liabilities |
21,511 |
22,292 |
TOTAL NON-CURRENT LIABILITIES |
1,021,192 |
1,023,365 |
|
|
|
Trade payables |
156,152 |
175,481 |
Other payables |
166,796 |
185,706 |
Tax liabilities |
37,085 |
21,094 |
Other current liabilities |
11,715 |
12,543 |
Provisions |
17,065 |
17,933 |
Fair value of hedging derivatives (cash flow hedge) |
15,125 |
10,788 |
Loans due within one year |
145,452 |
149,817 |
Bank overdrafts and short-term loans |
9,192 |
13,392 |
TOTAL CURRENT LIABILITIES |
558,582 |
586,754 |
TOTAL EQUITY AND LIABILITIES |
2,822,687 |
2,808,930 |
DECLARATION BY THE MANAGER RESPONSIBLE
FOR PREPARING THE COMPANY’S FINANCIAL REPORTS
The manager responsible for preparing the company’s financial
reports Luigi La Corte 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.
- First quarter 2020 results
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