Slide 1: 2021 Q1 Results – 2021-2023 Strategy and Outlook Update
2021 Q1 Results 2021 ‐ 2023 Strategy and Outlook Update Milano, 6 May 2021
Slide 2: Agenda
Agenda 1. Company overview and strategy 2. First quarter 2021 results 3. Drivers of organic growth – key assumptions 4. Further growth opportunities through BD and R&D 5. Financial projections 2
Slide 3: Recordati Today – Summary Overview
Recordati Today – Summary Overview Business Overview Recordati Snapshot – FY 2020 International specialty pharmaceutical group: €1.45bn • Well diversified footprint €569m €355m ~150 > 4,300 • Strong vertical integration Net EBITDA (1) Net Income Markets Employees Revenue Specialty and Primary Care D
Slide 4: We have a proven and sustainable Business Model…
We have a proven and sustainable Business Model… Well Diversified Revenue Base • Very broad portfolio and diversified footprint minimizes exposure to single product/ market combination • Limited exposure to single reimbursement systems Pursue Accretive and Growth Deals Focus on Volume‐Led Growth • S
Slide 5: …that has delivered consistent growth and margin improvement
…that has delivered consistent growth and margin improvement Sales and profitability driven by organic growth and successful BD (million Euro) 1.482 1.449 CAGR (10‐20): +7% 1.352 1.288 1.154 1.048 987 942 39% 828 37% 37% 35% 728 762 32% 30% 28% 25% 25% 23% 24% 2010 2011 2012 2013 2014 2015 2016 2017
Slide 6: Our Company Strategy remains unchanged…
Our Company Strategy remains unchanged… Group Objectives Continuation of successful strategy Steady organic growth from well diversified portfolio Enhanced by accretive or strategic acquisitions in both SPC & Rare Diseases Specialty & Primary Care Rare Diseases • Preserve the value of established br
Slide 7: …with a commitment to a sustainable future
…with a commitment to a sustainable future • Continue to develop and offer innovative products that improve quality of life Patient Care • Maintaining the highest product quality and safety standards throughout the product life cycle • Constant focus on improving access to medical products and healt
Slide 8: Agenda
Agenda 1. Company overview and strategy 2. First quarter 2021 results 3. Drivers of organic growth – key assumptions 4. Further growth opportunities through BD and R&D 5. Financial projections 8
Slide 9: First quarter 2021 highlights
First quarter 2021 highlights • Q1 results reflect continued impact of Covid‐19 pandemic across key categories and markets in Europe, coupled with adverse FX of ‐3.5% and year on year impact of 2020 LOEs (silodosin and pitavastatin); revenue also distorted by channel movements, with Q1 2020 benefitt
Slide 10: Main products sales
Main products sales Corporate products including drugs for rare diseases account for 65.9% of revenue (million Euro) 1Q 2021 1Q 2020 Change % Zanidip® (lercanidipine) 42.0 40.7 3.2 Seloken®/Seloken® ZOK/Logimax® 24.8 30.3 (18.2) (metoprolol/metoprolol+felodipine) Eligard®(1) 16.8 ‐ n.a. Urorec® (sil
Slide 11: Composition of revenue by geography
Composition of revenue by geography (million Euro) 1Q 2021 1Q 2020 Change % Italy 71.0 78.6 (9.7) France 36.1 41.3 (12.5) Germany 36.4 39.1 (7.0) Spain 26.1 25.0 4.8 Portugal 11.1 13.1 (15.1) Turkey 20.2 27.5 (26.7) Russia, other CIS countries and Ukraine 17.1 35.3 (51.7) U.S.A. 37.0 31.9 15.9 Other
Slide 12: First quarter 2021 results
First quarter 2021 results (million Euro) 1Q 2021 1Q 2020 Change % Revenue 384.8 429.2 (10.3) Gross Profit 280.8 303.7 (7.6) as % of revenue 73.0 70.8 SG&A Expenses 113.4 118.2 (4.1) as % of revenue 29.5 27.6 R&D Expenses 41.5 34.9 18.7 as % of revenue 10.8 8.1 Other Income (Expense), net (1.0) (2.1
Slide 13: First quarter 2021 results
First quarter 2021 results Operating Segments EBIT Treatments for rare diseases 24.6% Revenue Treatments for rare diseases 22.1% Specialty & primary care 75.4% EBITDA Treatments for rare diseases 25.9% Specialty & primary care 77.9% Margin on sales: Specialty & primary Treatments for rare diseases:
Slide 14: Q1 Cash flow
Q1 Cash flow (million Euro) 31 Mar 2021 31 Mar 2020 Change EBITDA 150.0 172.9 (22.9) Movements in working capital (15.3) (70.5) 55.2 Changes in other assets & liabilities (8.1) 1.5 (9.6) Interest received/(paid) (2.2) (1.9) (0.3) Income Tax Paid (6.3) (10.0) 3.7 Other (4.0) 1.0 (5.0) Cashflow from O
Slide 15: Net financial position
Net financial position 31 Mar 2021 31 Dec 2020 Change (million Euro) Cash and cash equivalents 250.1 188.2 61.9 Short‐term debts to banks and other lenders (36.0) (12.6) (23.4) Loans and leases – due within one year (275.1) (270.2) (4.9) Loans and leases – due after one year(1) (791.6) (771.2) (20.4
Slide 16: Agenda
Agenda 1. Company overview and strategy 2. First quarter 2021 results 3. Drivers of organic growth – key assumptions • Specialty & Primary Care and OTC • Treatments for rare diseases 4. Further growth opportunities through BD and R&D 5. Financial projections 16
Slide 17: Recordati Specialty & Primary Care
Recordati Specialty & Primary Care A history of growth, geographical expansion and business diversification Prescription products • Rx and OTC specialty products sold to GPs, hospitals, specialists • International expansion strategy started in 1999, with direct presence now in 30+ countries across E
Slide 18: Specialty & Primary Care - a resilient portfolio with no LoE exposure in Plan period
Specialty & Primary Care ‐ a resilient portfolio with no LoE exposure in Plan period Key Priorities & Objectives Current portfolio ‐ Revenue Outlook (million Euro) 1.400 • Sustained growth at +6% CAGR across all markets and key product categories through the period on the basis Chemicals 1.200 of a
Slide 19: Cough and Cold and ENT market expected to gradually recover
Cough and Cold and ENT market expected to gradually recover following collapse of pathology in 2020‐21 RECORDATI C&C PRODUCS vs REFERENCE MARKET (1) (million Euro) EVOLUTION INDEX MONTHLY TREND BY UNITS - 2019 ÷ 2021 120 100 89 80 60 40 • Cough and Cold and ENT infections market collapsed during 202
Slide 20: Stable portfolio of Cardiovascular products
Stable portfolio of Cardiovascular products (million Euro) 400 • Legacy Recordati franchise, with strong commercial capability • Lercanidipine (incl combo) to remain around €180 300 million through the forecast period ‐ growth in 2023 due to penetration in international market 54 53 • Pitavastatin s
Slide 21: Urorec (silodosin) stabilizes after loss of exclusivity
Urorec® (silodosin) stabilizes after loss of exclusivity with broadly flat sales to 2023 UROREC vs RELEVANT MARKET (1) (million Euro) M.S.% MONTHLY TREND BY UNITS - 2019 ÷ 2021 120 100 80 60 87 74 • Urorec® launched in 39 markets, reaching €107 million revenue 40 in 2019 prior to LOE (in Feb 2020) •
Slide 22: Eligard sales rejuvenation due to Recordati promotional efforts and new device
Eligard sales rejuvenation due to Recordati promotional efforts and new device (million Euro) • Eligard builds on Recordati heritage in Urology with major, well established brand • Highly developed and broadly stable market in advanced 120 prostate cancer 100 • Declining product trend to be reversed
Slide 23: Reagila set to continue growing post Covid restrictions
Reagila set to continue growing post Covid restrictions, thanks to sharper focus and repositioning (million Euro) 40 • Reagila® approved for the treatment of schizophrenia In Europe in July 2017 with first launches during 2018 30 • Reagila now commercialized in 14 markets in Western Europe, pending
Slide 24: Procto Glyvenol – a Recordati success story in OTC
Procto Glyvenol – a Recordati success story in OTC, positioned for further growth and market share gain (million Euro) • Acquired by Recordati for 11 markets in 2011, with sales of €9 million, Procto‐Glyvenol® was successfully relaunched towards both HCPs and Consumers, achieving double digit 50 gro
Slide 25: Agenda
Agenda 1. Company overview and strategy 2. First quarter 2021 results 3. Drivers of organic growth – key assumptions • Specialty & Primary Care and OTC • Treatments for rare diseases 4. Further growth opportunities through BD and R&D 5. Financial projections 25
Slide 26: Rare Diseases – growing segment with significant unmet need
Rare Diseases – growing segment with significant unmet need $235bn market by 2025 exhibiting strong growth rates Supported by growing diagnosis rates and new treatments Development of new technologies allowing new treatments for • previously untreated disease states 235 • Enhancement of screening me
Slide 27: Recordati Rare Diseases
Recordati Rare Diseases A global presence, Focused on the Few Endocrinology products • A portfolio of Orphan and Ultra‐Orphan products sold to hospitals and specialists • Primary focus on Metabolic and Endocrine diseases • Global footprint with access to North America, EU, Japan, Australia/NZ and La
Slide 28: Rare disease portfolio expected to deliver significant growth across all geographies
Rare disease portfolio expected to deliver significant growth across all geographies Key Priorities & Objectives Current portfolio ‐ Revenue Outlook (million Euro) CAGR • Solid organic growth at CAGR of 15% over the plan period 500 (20‐23) • Significant uptake of Isturisa and continued growth of Sig
Slide 29: Recordati Endocrinology portfolio – opportunity in Cushing's and Acromegaly
Recordati Endocrinology portfolio – significant opportunity for patients in Cushing’s and Acromegaly Establish Recordati Rare Diseases as a trusted Partner Continue HCP Education & Endorsement Signifor Cushings Disease and Acromegely Isturisa Cushing Syndrome/ Disease * Differentiate to establish Is
Slide 30: Endo franchise expected to deliver incremental €80-100 million revenue by 2023
Endo franchise expected to deliver incremental €80‐100 million revenue by 2023 Strong US Isturisa patient acquisition to date, • Global Endo franchise expected to reach over €200 while continuing to drive growth of Signifor million of revenue by 2023, with majority of growth # of Active Commercial P
Slide 31: Multiple growth drivers in balance of Rare Disease portfolio
Multiple growth drivers in balance of Rare Disease portfolio Key products & indications 2021‐2023 Outlook Treatment of hyperammonemia due to Growth in US (OA indication Q1 2021), NAGS deficiency and certain organic acidaemias slight erosion in EU Treatment of acute attacks of hepatic porphyria High
Slide 32: Agenda
Agenda 1. Company overview and strategy 2. First quarter 2021 results 3. Drivers of organic growth – key assumptions 4. Further growth opportunities through BD and R&D 5. Financial projections 32
Slide 33: R&D - Current pipeline
R&D ‐ Current pipeline Speciality and Primary Care Treatments for Rare Disease • Main focus on life‐cycle management and indication • Focus on identifying and adding potential new pipeline expansions assets, and progressing internal pipeline • New device development • Potential extension of indicati
Slide 34: M&A and Business Development – an integral part of the Recordati history
M&A and Business Development – an integral part of the Recordati history 2019 2018 • Signifor, Signifor LAR 2018 • Natural Point Isturisa • Ex‐US/China • Tonipharm • Juxtapid (JP) 2016 rights to Ledaga • Cystagon 2014 • Italchimici 2012 • Profarma • Vitaros • Germany OTC portfolio 2010 • Dentosan •
Slide 35: Acquisitions – Specialty & Primary Care BD strategy
Group BD strategy and focus areas Specialty & Primary Care • New products licensing opportunities in Europe to be pursued in specialty care Licensing • Preferably commercial or late stage / near to market opportunities • Seen as partner of choice, gaining access to attractive patented products or po
Slide 36: Acquisitions – Rare Diseases BD strategy
Group BD strategy and focus areas Treatments for Rare Diseases • Worldwide or regional licenses of development products , preferably late stage opportunities Licensing • Partnerships with research institutions and other rare disease companies • Seen as partner of choice due to high level of expertis
Slide 37: Agenda
Agenda 1. Company overview and strategy 2. First quarter 2021 results 3. Drivers of organic growth – key assumptions 4. Further growth opportunities through BD and R&D 5. Financial projections 37
Slide 38: Financial projections – drivers/assumptions
Financial projections – drivers /assumptions • Continuation of successful strategic approach • Organic revenue growth complemented with accretive M&A and BD Group Evolution • Invest behind both businesses, with Rare Diseases to grow to >25% of total (from 22% today) MAY 2019 • No material exposure t
Slide 39: Financial projections
Financial projections 2021 targets and plan for 2023 2020 2021 2023 Plan CAGR (million Euro) Actual Targets Including M&A 2020‐2023 Revenue 1,448.9 1,570 ‐ 1,620 1,900 ‐ 2,000 10.4% EBITDA(1) 569.3 720 ‐ 760 600 ‐ 620 9.1% margin on sales 39.3% ±38% Adjusted Net Income(2) 410.4 530 ‐ 560 420 ‐ 440 9
Slide 40: Financial projections – key takeaways
Financial projections – key takeaways Diversified business with High level of Solid cash flow Clear capital allocation strong organic growth profitability generation policy Strong underling volume growth Maintain robust Free Cash Flow dividend over the period in both business operating and bottom se
Slide 41: Q&A session
Q&A session Andrea Recordati Fritz Squindo Luigi La Corte Chief Executive Officer Group General Manager Chief Financial Officer Alberto Martinez Corrado Castellucci Scott Pescatore Executive VP Executive VP VP Rare Diseases Specialty and Primary Care B.U. Rare Diseases B.U. Global Operations 41
Slide 42: Company declarations, disclaimers and profile
Company declarations, disclaimers and profile 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 Fina