Slide 1: Recordati: Continuing the Journey of Profitable Growth
RECORDATI: CONTINUING THE JOURNEY OF PROFITABLE GROWTH 2022 Preliminary Full-Year Results and 2023-2025 Plan Update Milano, February 21st 2023
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Slide 3: Speakers
SPEAKERS Alberto Martinez Luigi La Corte Rob Koremans Scott Pescatore Executive VP Chief Financial Chief Executive Executive VP Specialty & Primary Officer Officer Rare Diseases
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Slide 5: Agenda
AGENDA Luigi La Corte 2022 preliminary full-year results Chief Financial Officer Recordati today, strategy and value proposition Rob Koremans Chief Executive Officer • Recordati today • Strategy and value proposition Alberto Martinez Two core businesses Executive VP • Specialty & Primary Care Specia
Slide 6: Agenda
AGENDA Luigi La Corte 2022 preliminary full-year results Chief Financial Officer Recordati today, strategy and value proposition • Recordati today • Strategy and value proposition Two core businesses • Specialty & Primary Care • Rare diseases 2023-2025 Financial projections
Slide 7: Strong Financial Performance and Key Milestones Achieved
STRONG FINANCIAL PERFORMANCE AND KEY MILESTONES ACHIEVED Preliminary FY 2022 Results • Robust underlying performance across the business and cost discipline deliver another year of strong financial results: • Net Revenue of € 1,853.3 million, +17.3% overall, with organic growth at CER(1) of +8.1% •
Slide 8: Strong Progress of Key Growth Drivers and Stable Mature Product Portfolio
STRONG PROGRESS OF KEY GROWTH DRIVERS AND STABLE MATURE PRODUCT PORTFOLIO FY 2022 FY 2021 Change % (million Euro) Zanidip® and Zanipress® (lercanidipine+enalapril)(1) 168.0 177.9 (5.6) Seloken®/Seloken® ZOK/Logimax® (metoprolol/metoprolol+felodipine) 97.8 98.1 (0.3) Urorec® (silodosin) 60.7 60.7 - L
Slide 9: 2022 Preliminary Results Ahead of Full Year Targets
2022 PRELIMINARY RESULTS AHEAD OF FULL YEAR TARGETS (million Euro) FY 2022 FY 2021 Change % Targets Feb 2022 Revenue 1,853.3 1,580.1 17.3 1,720 – 1,780 Gross Profit 1,286.6 1,152.3 11.6 as % of revenue 69.4 72.9 Adjusted Gross Profit(1) 1,336.4 1,152.3 16.0 as % of revenue 72.1 72.9 SG&A Expenses 57
Slide 10: Free Cash Flow >90% of Adjusted Net Income
FREE CASH FLOW >90% OF ADJUSTED NET INCOME (million Euro) FY 2022 FY 2021 Change EBITDA(1) 672.8 602.3 70.5 Movements in working capital* (61.4) 20.0 (81.4) Changes in other assets & liabilities (16.8) (15.5) (1.3) Interest received/(paid) (18.2) (18.0) (0.2) Income Tax Paid (89.8) (91.6) 1.8 Other
Slide 11: Agenda
AGENDA 2022 preliminary full-year results Recordati today, strategy and value proposition Rob Koremans Chief Executive Officer • Recordati today • Strategy and value proposition Two core businesses • Specialty & Primary Care • Rare diseases 2023-2025 Financial projections
Slide 12: Recordati: A Top-Tier Value Creator for Patients, Investors and Our People
RECORDATI: A TOP-TIER VALUE CREATOR FOR PATIENTS, INVESTORS AND OUR PEOPLE FY 2022 SNAPSHOT • Over 95 years history • Roots and legacy in Italy, but now a truly international EMPLOYEES MARKETS Group > 4,300 ~150 • Committed to performance, delivering steady and profitable growth with strong cash gen
Slide 13: Proven and Sustainable Business Model
PROVEN AND SUSTAINABLE BUSINESS MODEL WELL DIVERSIFIED REVENUE BASE • Very broad portfolio and diversified footprint minimizes exposure to single ACCRETIVE AND GROWTH product market combination STRONG COMMITMENT BD / M&A • Limited exposure to single TO GROWTH • Strong M&A track record of product and
Slide 14: Well Diversified Revenue Base
WELL DIVERSIFIED REVENUE BASE Moving into new geographies and disease areas, becoming a larger and more diversified organization Spain 3.0% Italy 4.1% 2.1% Other Western Europe Other CEE 15.1% Geographic 7.3% Russia, Ukraine and other CSI USA Turkey 7.1% 14.4% Portugal 7.6% Other • Italy growing but
Slide 15: Strong Commitment to Growth
STRONG COMMITMENT TO GROWTH Group Revenue 2012 - 2022 million Euro CAGR +8.4% • Growth driven approx. 50% by 1,853 organic and 50% by business development 1,580 1,482 1,449 • Organic growth mostly 1,352 1,288 achieved through volumes 1,154 987 1,048 • YoY pricing on average 942 828 typically +/- 1%
Slide 16: Limited Exposure from Loss of Exclusivity
LIMITED EXPOSURE FROM LOSS OF EXCLUSIVITY Resilient revenue post first generic entry, with no new material LOE expected in Plan Years Revenue 2017 - 2022 million Euro Lerca Franchise 189.8 180.1 193.3 183.0 177.9 • Strong track record in stabilising revenue post first 168.0 generic entry, with no me
Slide 17: Robust Supply Chain
ROBUST SUPPLY CHAIN Strong vertical integration Cork • 60% of volumes manufactured Nanterre (RRD) Pardubice by Recordati plants Basel (RRD) • Majority of CMOs based in Europe and in US Milano • Producing API for key products Saragozza Cerkezkoy for both SPC and RRD Campoverde • Stable 3rd parties’ A
Slide 18: Multiple Affordable Pipeline Opportunities with Limited Development Risk
MULTIPLE AFFORDABLE PIPELINE OPPORTUNITIES WITH LIMITED DEVELOPMENT RISK Investment focused on lifecycle management and new indications Cushing Indication extension of US label to Cushing Syndrome Syndrome US PBH Phase II development in Post Bariatric Hypoglycemia (PBH) High Risk Development pathway
Slide 19: Accretive and Growth BD / M&A
ACCRETIVE AND GROWTH BD / M&A Long track record of successful execution on BD / M&A with fast and effective integration Specialty & Primary Care • Germany OTC portfolio • Dentosan • Ex-US/China Rare Diseases • Farma Projekt • Italchimici rights to Ledaga • Akvion portfolio • Vitaros • Pro Farma • Cy
Slide 20: Consistently Delivering on Plan
CONSISTENTLY DELIVERING ON PLAN +6% Group Revenue 2012-2022 - actual vs targets 1,853 million Euro -1% -7% Max. targets range +3% 1,580 Mid-point Min. targets range -1% 1,482 +6% 1,449 1,352 Delta vs Mid-point % +6% 1,288 -1% +5% 1,154 +2% 1,048 987 +1% 942 828 2012 2013 2014 2015 2016 2017 2018 201
Slide 21: Delivering Through a Challenging Environment
DELIVERING THROUGH A CHALLENGING ENVIRONMENT CPI Eurozone inflation Gas index TTF (EU) YoY growth % 2021-2022 350 2021-2023 YTD 300 12.0 250 10.0 Eur/MWh 200 8.0 150 6.0 100 4.0 2.0 50 .0 0 Jul-21 Jul-22 Jun-21 Jun-22 Apr-21 May-21 Nov-21 Jan-22 Apr-22 May-22 Nov-22 Jan-21 Feb-21 Mar-21 Aug-21 Sep-2
Slide 22: Sustaining Sector Leading Margins
SUSTAINING SECTOR LEADING MARGINS EBITDA margin 2019-2022 peers benchmark (1) 50.0% 44.8% 45.0% 43.0% 43.9% 39.3% 38.1% 40.2% 40.0% 39.1% 36.7% 36.3% 37.0% 37.1% 39.8% 36.9% 36.0% 35.0% 33.2% 33.9% 33.5% 29.3% 28.4% 29.3% 30.0% 28.2% 29.1% 28.3% 26.9% 25.6% 25.0% 22.2% 22.8% 21.8% 20.0% 15.0% 10.0%
Slide 23: Agenda
AGENDA 2022 preliminary full-year results Recordati today, strategy and value proposition Rob Koremans Chief Executive Officer • Recordati today • Strategy and value proposition Two core businesses • Specialty & Primary Care • Rare diseases 2023-2025 Financial projections
Slide 24: Our Strategy and Value Proposition
• Profitable organic growth of current portfolio • Accretive and growth M&A and targeted Business development OUR STRATEGY • Continue to invest in both SPC and RRD • Capture growth opportunities in RRD in US AND VALUE • Build capabilities to capture opportunities within our own pipeline PROPOSITION
Slide 25: Specialty & Primary Care
• Focus on current markets • Stable base of established brands SPECIALTY & • Growth drivers: flagship brands and OTC products PRIMARY CARE • Operational excellence = commercial and industrial: • Right product quality • Cost of Goods Sold The European partner • Customer engagement of choice • Acquisi
Slide 26: Rare Diseases
• Increase number of patients benefitting from our products • Enhance: • Diagnosis • Education of HCP and patients • Develop new therapeutic indications RARE DISEASES • Global presence to maximize our impact, USA biggest opportunity Global player Focused on the Few • Commercial and medical excellenc
Slide 27: Business Development Focus
BUSINESS DEVELOPMENT FOCUS SPC • Go-to-partner for promotionally sensitive RX Established Brands, both Near market regional and local, supported by competitive commercial capabilities opportunities in core TAs and • Near market opportunities in core areas of Cardiovascular, Urology and Gastro Specia
Slide 28: Continue Strong Commitment on Sustainability
CONTINUE STRONG COMMITMENT ON SUSTAINABILITY ENVIRONMENTAL RESPONSIBLE ETHICS & PATIENT CARE PEOPLE CARE PROTECTION SOURCING INTEGRITY • Patient-centric • Inclusive culture • Fight against climate • Supply chain • Highest standards approach: every and equal change: reduce energy monitoring plan and
Slide 29: Sustainability Highlights
SUSTAINABILITY HIGHLIGHTS Effort recognized by main leading ESG indices and ratings in 2022 EURONEXT and BORSA ITALIANA Confirmed in the Upgrade to ECOVADIS Confirmed A rating Upgrade to Robust Inclusion in MIB ESG FTSE4Good Index Platinum Rating from MSCI Score by Moody’s ESG index launched by Seri
Slide 30: Agenda
AGENDA 2022 preliminary full-year results Recordati today, strategy and value proposition • Recordati today • Strategy and value proposition Alberto Martinez Two core businesses Executive VP • Specialty & Primary Care Specialty & Primary Care • Rare diseases 2023-2025 Financial projections
Slide 31: Recordati Specialty & Primary Care
RECORDATI SPECIALTY & PRIMARY CARE A story of growth, international expansion and business diversification Revenue 2012 - 2022 Acquisition million Euro Re-launch Re-launch Patent expiry Launch Patent expiry 1,232 1,258 1,196 Acquisition 1,136 1,130 1,077 967 864 895 814 752 2012 2013 2014 2015 2016
Slide 32: Recordati Specialty & Primary Care: The European Partner of Choice
RECORDATI SPECIALTY & PRIMARY CARE The European partner of choice Direct presence in 30+ countries across Europe, CIS, Turkey and Tunisia; with exports to RoW via licensors (9% of sales) >400 Brands in Rx (77%) and OTC (23%) promoted to specialists, GPs and pharmacies by ~1,500 salespersons Proven h
Slide 33: Specialty & Primary Care: Key Markets
SPECIALTY & PRIMARY CARE: KEY MARKETS SPC Core Therapy Areas (>70% of 2022 Sales) set to accelerate growth driven by ageing population and increasing consumer demand European market outlook 2019-2025 billion Euro Cardiovascular Urology Gastrointestinal CAGR CAGR CAGR 30 5 40 5.8% 4 3.3% 35 6.9% 25 4
Slide 34: Recordati Specialty & Primary Care: Brand Equity
RECORDATI SPECIALTY & PRIMARY CARE Significant Brand equity in today’s portfolio with category leading Brands PRESCRIPTION PRODUCTS OTC GROWTH BRANDS Major Growth Brands Major Established Brands 34
Slide 35: Specialty & Primary Care Key Strategic Pillars
SPECIALTY & PRIMARY CARE KEY STRATEGIC PILLARS Simplify & Focus: strategy to secure another chapter of profitable growth Fully integrated Regional Go to partner for Focus on local and Focus our resources on Pharma Organization, promotionally sensitive Regional flagship Brands in organic growth, opti
Slide 36: In Rx, Our Focus Strategy Enables Acceleration of Growth Brands
IN RX, OUR FOCUS STRATEGY ENABLES AN ACCELERATION OF GROWTH BRANDS AND A STABILISATION OF ESTABLISHED BRANDS Revenue trend 2021 - 2025 (1) million Euro CAGR ~ 3% 908 871 TELEFIL® ~ 14% CAGR Including: ~ 0% CAGR 2021 2022 2023 2024 2025 RX Established brands RX Growth brands 1) 2021 Eligard: Recordat
Slide 37: Recordati Has Sharply Increased Eligard Competitiveness
RECORDATI HAS SHARPLY INCREASED ELIGARD® COMPETITIVENESS, STRONG GROWTH PROSPECTS AHEAD (1) Eligard Evolution Index Jan 2020 - Nov 2022 Eligard Revenue trend 2021 - 2025 110 million Euro 105 105 CAGR March 2021 ~ 7% 100 96 95 104 96 90 11 85 83 85 80 75 70 2021(2) 2022 2023 2024 2025 65 1) Evolution
Slide 38: Consumer Healthcare (OTC) Also Accelerates Growth
CONSUMER HEALTHCARE (OTC) ALSO ACCELERATES GROWTH THROUGH FOCUS ON FLAGSHIP REGIONAL & LOCAL BRANDS Revenue trend 2021 - 2025 million Euro CAGR Top 1-2 Market Position ~ 6% 301 277 ~ 9% CAGR ~ 3% CAGR 2021 2022 2023 2024 2025 OTC Established brands OTC Growth brands Market position based on audit da
Slide 39: Proactive Rightsizing Enables Commercial Capability Build
PROACTIVE RIGHTSIZING ENABLES COMMERCIAL CAPABILITY BUILD AND ENHANCES COMPETITIVENESS Recordati SPC Evolution Index gains 10 points in 2 years and outperforms the market by +5% • Optimise our Established Brands portfolio to ensure profitable 105.5 stabilization after LoE, while accelerating with ou
Slide 40: Specialty & Primary Care: An Excellent Platform for Profitable Growth
SPECIALTY & PRIMARY CARE: AN EXCELLENT PLATFORM FOR PROFITABLE GROWTH Current portfolio – Revenue trend 2021 - 2025 million Euro Highlights & Key Priorities • Foundation of Established Brands combined with CAGR selected Rx and OTC growth drivers ~ 3-4% • Increased focus on key growth drivers and enh
Slide 41: Agenda
AGENDA 2022 preliminary full-year results Recordati today, strategy and value proposition • Recordati today • Strategy and value proposition Two core businesses • Specialty & Primary Care Scott Pescatore • Rare diseases Executive VP Rare Diseases 2023-2025 Financial projections
Slide 42: Rare Diseases Market: Growing Segment with Significant Unmet Need
RARE DISEASES MARKET: GROWING SEGMENT WITH SIGNIFICANT UNMET NEED $250bn market by 2025 exhibiting strong growth rates Supported by growing diagnosis rates and new treatments CAGR 250 • Development of new technologies allowing new treatments 12.7% for previously untreated diseases WW sales (US$bn) C
Slide 43: Recordati Rare Diseases
RECORDATI RARE DISEASES A global leader in Rare Diseases with a track record of strong organic growth, geographical Acquisition expansion and business development of EUSA Pharma Revenue 2008 - 2022 Ex-US/China/Israel rights to Ledaga Carbaglu Generic Cosmegen entries in US; GX in US million Euro Com
Slide 44: Recordati Rare Diseases: Global Presence, Focused on the Few
RECORDATI RARE DISEASES A portfolio of Orphan and Ultra-Orphan A global presence, Focused on the Few products sold to hospitals and specialists and a promising pipeline of low-risk development projects Primary focus on rare Metabolic, Endocrine and Oncologic diseases Global footprint with access to
Slide 45: Recordati Rare Diseases: Diversified Portfolio
RECORDATI RARE DISEASES A diversified portfolio with a strong foundation in Metabolic disorders and strong growth drivers in Endocrinology and rare / niche Oncology METABOLIC AND OTHER PRODUCTS ENDOCRINOLOGY PRODUCTS ONCOLOGY PRODUCTS 45
Slide 46: Rare Diseases Key Strategic Pillars
RARE DISEASES KEY STRATEGIC PILLARS Driving growth through our experience in rare diseases Endo Franchise - Isturisa as Oncology Franchise - Pipeline opportunities - on main growth driver that will continued growth with two major development continue to expand in the both Qarziba and Sylvant project
Slide 47: Endocrinology Franchise
ENDOCRINOLOGY FRANCHISE Focus on Cushings Disease / Syndrome and Acromegaly Revenue trend 2021 - 2025 Key Strategic Growth Drivers million Euro • Foster patient identification by emphasizing the importance of clinical control and improvement of Quality of Life 300-340 • Continue geo-expansion with f
Slide 48: Oncology Franchise
ONCOLOGY FRANCHISE Focus on Neuroblastoma and IMCD Revenue trend 2021 - 2025 Key Strategic Growth Drivers million Euro • Qarziba priorities: • Geographical expansion (LAC region, execute US BLA strategy) 238.4 220-250 • Improve penetration in High-Risk Neuroblastoma 185-200 194.4 Relapsed and Refrac
Slide 49: Rare Diseases Ongoing Development Projects
RARE DISEASES ONGOING DEVELOPMENT PROJECTS Driving future growth by focusing on areas of unmet need High-Risk Neuroblastoma Chemo- Post Bariatric Moderate/severe Additional Immunotherapy in R/R patients Hypoglycemia Neurotrophic Keratitis opportunities Oncology Endocrinology Metabolic & Others Oncol
Slide 50: Rare Diseases: A Global Market Leader Committed to Serving Patients' Needs
RARE DISEASES: A GLOBAL MARKET LEADER COMMITTED TO SERVING PATIENTS’ NEEDS Highlights & Key Priorities Current Portfolio – Revenue trend 2021 - 2025 million Euro • Net Revenue growth of current portfolio of ~ 10-11% CAGR to CAGR 2025 (11-12% at CER), driven by Endo and Onco franchises ~ 10-11% • Ist
Slide 51: Agenda
AGENDA 2022 preliminary full-year results Recordati today, strategy and value proposition • Recordati today • Strategy and value proposition Two core businesses • Specialty & Primary Care • Rare diseases 2023-2025 Financial projections Rob Koremans Chief Executive Officer
Slide 52: 2023-2025 Financial Planning Assumptions
2023-2025 FINANCIAL PLANNING ASSUMPTIONS • Continuation of successful strategic approach Group • Organic revenue growth complemented with accretive M&A and BD Evolution • Invest behind both businesses, with Rare Diseases 35% - 40% of revenue by 2025 • No material exposure to new LOEs in planning per
Slide 53: 2023-2025 Financial Targets
2023-2025 FINANCIAL TARGETS million Euro FY 2022 FY 2023 FY 2025 CAGR Actual Target Target 2022-2025 (incl. BD & M&A) Revenue 1,853.3 1,970 – 2,030 2,250 – 2,350 +7.5% EBITDA (1) 672.8 700 – 730 810 – 850 +7.3% margin on sales 36.3% +/- 36% +/- 36% Adjusted Net Income (2) 473.3 470 – 490 550 – 580 +
Slide 54: 2023-2025 Financial Value Proposition
2023-2025 FINANCIAL VALUE PROPOSITION Diversified business with Sustain high level of Pursue affordable Maintain clear capital strong organic growth profitability pipeline opportunities allocation policy Strong underling volume Invest behind new capabilities growth over the period of Maintain sector
Slide 55: Questions & Answers
Questions & Answers NQ RECORDATI
Slide 56: Appendix
Appendix NQ RECORDATI
Slide 57: Composition of Revenue by Geography
COMPOSITION OF REVENUE BY GEOGRAPHY (million Euro) FY 2022 FY 2021 Change % Italy 272.7 258.2 5.6 U.S.A. 260.5 176.9 47.2 France 169.1 151.7 11.5 Germany 167.6 152.9 9.6 Spain 142.6 120.0 18.8 Portugal 53.5 45.4 17.7 Turkey 74.3 70.3 5.7 Russia, other CIS countries and Ukraine 131.7 99.6 32.2 Other
Slide 58: Net Financial Position
NET FINANCIAL POSITION 31 DEC 2022 31 DEC 2021 Change (million Euro) Cash and cash equivalents 284.7 244.5 40.2 Short-term debts to banks and other lenders (83.4) (8.7) (74.8) Loans and leases – due within one year(1) (289.0) (221.5) (67.5) Loans and leases – due after one year(1) (1,332.2) (750.8)
Slide 59: 2022 Preliminary Full-Year Results – Adjusting Items
2022 PRELIMINARY FULL-YEAR RESULTS – ADJUSTING ITEMS Reconciliation of Net income to EBITDA (1) (million Euro) FY 2022 FY 2021 Change % Net income 312.3 386.0 (19.1) Income taxes 89.1 77.4 Financial (income)/expenses, net 35.9 26.8 Summary of key items o/w net FX losses (2) 5.8 5.8 o/w net monetary
Slide 60: 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