RECORDATI: PROFIT GROWTH IN THE FIRST NINE MONTHS OF 2020. REVENUES -0.6%, EBITDA +7.1%, ADJUSTED NET INCOME +12.3%
- Consolidated revenues € 1,093.8 million, -0.6% or +1.1% at constant exchange rates.
- EBITDA (1) € 438.8 million, +7.1%
- Operating income € 364.0 million, +3.0%
- Net income € € 274.1 million, + 8.1%
- Adjusted net income (2) € 317.5 million, +12.3%
- Net financial position (3): net debt of € 845.9 million; € 902.7 million at
31 December 2019 - Shareholders’ equity € 1,287.6 million
- Isturisa® (osilodrostat) Launched in the
U.S.A. ,France andGermany . Filed for approval inJapan . - Cystadrops® (cysteamine ophthalmic solution) approved and launched in the
U.S.A. - License agreement with
ARS Pharmaceuticals for the marketing of ARS-1, an epinephrine based nasal spray, inEurope and theMiddle East - Interim 2020 dividend of € 0.50 per share to be distributed.
- New Corporate Governance Code to be adopted (2020 version). Remuneration Committee becomes
Remuneration and Nomination Committee following the assignment of Nomination Committee functions.
Financial highlights
- Consolidated revenues in the first nine months of 2020 are € 1,093.8 million, slightly down by 0.6% compared to the same period of the preceding year mainly due to the impact on our reference markets of the COVID-19 pandemic and the devaluation of the main currencies against the euro. Included is revenue of € 53.8 million related to Signifor®, Signifor® LAR and Isturisa®. At constant exchange rates revenues would have grown by 1.1%. International sales grow by 0.6%.
- EBITDA (1) is € 438.8 million, or 40.1% of sales (37.2% in the first nine months of 2019), an increase of 7.1%. EBITDA excludes non-recurring costs related to the COVID-19 epidemiological emergency of € 5.2 million, which comprise mainly donations to hospitals.
- Operating income, at 33.3% of sales, is € 364.0 million, an increase of 3.0% over the same period of the preceding year.
- Net income, at 25.1% of sales, is € 274.1 million, up 8.1% over the first nine months of 2019, thanks to increase in operating income, lower financial expenses and reduction of the effective tax rate. Adjusted net income (2), the additional performance measure introduced this year in order to provide information in line with best practice in the sector, at 29.0% of sales is € 317.5 million, an increase of 12.3% over the first nine months of 2019.
- Net financial position (3) at
30 September 2020 records a net debt of € 845.9 million compared to net debt of € 902.7 million at31 December 2019 . During the period milestones of$ 90,0 million were paid to Novartis following the European andU.S. approval of Isturisa® and its launch inGermany , own shares were purchased for a total disbursement, net of disposals for the exercise of stock options, of € 15.6 million and dividends were paid for a total of € 110.5 million. Net of these effects cash generation during the period was of around € 267 million. Shareholders’ equity is € 1,287.6 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 the month of February, the marketing authorizations for Signifor® and Signifor® LAR in the
Also, and as per the agreement with Novartis, the marketing authorizations for Isturisa® were transferred to Recordati Rare Diseases both in
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®, demonstrated in the LINC 3 clinical trial and now also confirmed by the LINC 4 trial, 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. Both the
Consolidated revenue generated by Signifor®, Signifor® LAR and Isturisa® in the first nine months of 2020 is € 53.8 million.
In August, the
In September, an exclusive license agreement with
Subsequent events
On
It should be noted that the Merger will not entail any change to the share capital of the incorporating company nor is any balancing cash payment planned. Furthermore, the balance sheet and earnings profile of the entity resulting from the Merger will be substantially in line with that of the incorporating company at present and, in particular, the Merger will not alter the net financial position and, therefore, the investment capacity of Recordati or the strategy or its capital allocation policy. For further information please refer to Note 27 of the Notes to the Consolidated Financial Statements.
Management Comments
“Despite the continued impact on revenues due to the COVID-19 pandemic and currency devaluations, profits maintain their growth over the first nine months of 2019 thanks to an increase in gross margin and the reduction of operating expenses stemming from lower activity in the field due to the health emergency,” stated
Further resolutions
2020 Interim dividend
The Board of Directors resolved to distribute an interim dividend relating to the financial year 2020 amounting to € 0.50 (before withholding tax) on each outstanding share, excluding shares in treasury stock. The interim dividend will be paid, through the authorised intermediaries, as from
The Independent Auditor’s opinion on the distribution of the interim dividend is also available at the Company’s registered offices as per article 2433-bis of the Italian Civil Code.
The Directors’ Report and financial statements of
New Corporate Governance Code
The Board of Directors resolved to adopt the new Corporate Governance Code approved by the Corporate Governance Committee and published on
The Board of Directors, during the discussions related to the new Corporate Governance Code, resolved, effective as from today, to integrate the functions conferred on the Remuneration Committee with the functions assigned by the new Code to the Nomination Committee and consequently to modify the name of the Remuneration Committee which becomes
Conference call
Recordati will be hosting a conference call today 29 October at
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
For further information:
Recordati website: www.recordati.com
Investor Relations Media Relations
Marianne Tatschke Studio Noris Morano
(39)0248787393 (39)0276004736, (39)0276004745
e-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 GROUP
Summary of consolidated results prepared in accordance with the International Financial Reporting Standards (IFRS) (thousands of €)
INCOME STATEMENT | First nine months 2020 | First nine months 2019 | Change % |
REVENUE | 1,093,818 | 1,100,418 | (0.6) |
Cost of sales | (308,237) | (329,069) | (6.3) |
GROSS PROFIT | 785,581 | 771,349 | 1.8 |
Selling expenses | (256,701) | (273,446) | (6.1) |
Research and development expenses | (106,344) | (91,581) | 16.1 |
General & administrative expenses | (53,644) | (51,740) | 3.7 |
Other income (expenses), net | (4,855) | (1,082) | n.s. |
OPERATING INCOME | 364,037 | 353,500 | 3.0 |
Financial income (expenses), net | (11,192) | (15,980) | (30.0) |
PRE-TAX INCOME | 352,845 | 337,520 | 4.5 |
Provision for income taxes | (78,745) | (83,846) | (6.1) |
NET INCOME | 274,100 | 253,674 | 8.1 |
Attributable to: | |||
Equity holders of the parent | 274,063 | 253,642 | 8.1 |
Non-controlling interests | 37 | 32 | 15.6 |
EARNINGS PER SHARE | |||
Basic (1) | € 1.333 | € 1.239 | 7.6 |
Diluted (2) | € 1.311 | € 1.213 | 8.1 |
ADJUSTED NET INCOME (3) | 317,548 | 282,796 | 12.3 |
EBITDA (4) | 438,801 | 409,612 | 7.1 |
(1) Earnings per share (EPS) are based on average shares outstanding during each year, 205,603,780 in 2020 and 204,706,235 in 2019, net of average treasury stock which amounted to 3,521,376 shares in 2020 and to 4,418,921 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 nine months 2020 | First nine months 2019 | Change % |
Total revenue | 1,093,818 | 1,100,418 | (0.6) |
208,523 | 220,597 | (5.5) | |
International | 885,295 | 879,821 | 0.6 |
RECORDATI GROUP
Summary of consolidated results prepared in accordance with the International Financial Reporting Standards (IFRS) (thousands of €)
INCOME STATEMENT | Third quarter 2020 | Third quarter 2019 | Change % |
REVENUE | 333,626 | 357,165 | (6.6) |
Cost of sales | (96,483) | (105,771) | (8.8) |
GROSS PROFIT | 237,143 | 251,394 | (5.7) |
Selling expenses | (82,505) | (89,562) | (7.9) |
Research and development expenses | (35,102) | (31,824) | 10.3 |
General & administrative expenses | (16,960) | (17,142) | (1.1) |
Other income (expenses), net | (49) | (1,925) | (97.5) |
OPERATING INCOME | 102,527 | 110,941 | (7.6) |
Financial income (expenses), net | (4,109) | (5,058) | (18.8) |
PRE-TAX INCOME | 98,418 | 105,883 | (7.1) |
Provision for income taxes | (21,261) | (26,483) | (19.7) |
NET INCOME | 77,157 | 79,400 | (2.8) |
ADJUSTED NET INCOME (1) | 91,980 | 89,659 | 2.6 |
EBITDA (1) | 127,710 | 130,299 | (2.0) |
(1) Net income excluding amortization and write-down of intangible assets (except software) and goodwill, and non-recurring items, net of tax effects.
(2) 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 | Third quarter 2020 | Third quarter 2019 | Change % |
Total revenue | 333,626 | 357,165 | (6.6) |
60,038 | 65,500 | (8.3) | |
International | 273,588 | 291,665 | (6.2) |
RECORDATI GROUP
Summary of consolidated results prepared in accordance with the International Accounting Standards and International Financial Reporting Standards (IFRS)
(thousands of €)
ASSETS | ||
Property, plant and equipment | 129,739 | 133,342 |
Intangible assets | 1,125,534 | 1,161,760 |
561,960 | 577,973 | |
Equity investments | 28,933 | 38,566 |
Non-current receivables | 6,742 | 16,426 |
Deferred tax assets | 78,077 | 71,513 |
TOTAL NON-CURRENT ASSETS | 1,930,985 | 1,999,580 |
Inventories | 250,334 | 226,885 |
Trade receivables | 269,982 | 296,961 |
Other receivables | 57,138 | 79,949 |
Other current assets | 13,620 | 7,683 |
Fair value of hedging derivatives (cash flow hedge) | 10,465 | 9,949 |
Short-term financial investments, cash and cash equivalents | 277,622 | 187,923 |
TOTAL CURRENT ASSETS | 879,161 | 809,350 |
TOTAL ASSETS | 2,810,146 | 2,808,930 |
RECORDATI GROUP
Summary of consolidated results prepared in accordance with the International Accounting Standards and International Financial Reporting Standards (IFRS)
(thousands of €)
EQUITY AND LIABILITIES | ||
Share capital | 26,141 | 26,141 |
Capital in excess of par value | 83,719 | 83,719 |
(92,295) | (93,480) | |
Hedging reserve | (3,054) | (5,357) |
Translation reserve | (207,332) | (146,866) |
Other reserves | 54,825 | 64,651 |
Retained earnings | 1,151,237 | 999,708 |
Net income for the period | 274,063 | 368,825 |
Interim dividend | 0 | (98,764) |
Equity attributable to the holders of the Parent | 1,287,304 | 1,198,577 |
Non-controlling interests | 271 | 234 |
TOTAL EQUITY | 1,287,575 | 1,198,811 |
Loans due after one year | 898,967 | 937,344 |
Employees’ termination pay | 20,077 | 20,557 |
Deferred tax liabilities | 41,296 | 43,172 |
Other non-current liabilities | 20,338 | 22,292 |
TOTAL NON-CURRENT LIABILITIES | 980,678 | 1,023,365 |
Trade payables | 145,204 | 175,481 |
Other payables | 87,765 | 185,706 |
Tax liabilities | 37,066 | 21,094 |
Other current liabilities | 11,298 | 12,543 |
Provisions | 16,186 | 17,933 |
Fair value of hedging derivatives (cash flow hedge) | 9,696 | 10,788 |
Loans due within one year | 219,949 | 149,817 |
Bank overdrafts and short-term loans | 14,729 | 13,392 |
TOTAL CURRENT LIABILITIES | 541,893 | 586,754 |
TOTAL EQUITY AND LIABILITIES | 2,810,146 | 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
Attachment
- First nine months 2020 results
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