Transcript www.recordati.it

Acquisizioni in Europa
per un traguardo a 1.000 miliardi
Milano, 10 Maggio 2000
Acquisizioni in Europa per un traguardo a 1.000 miliardi
Relatori:
• Giovanni Recordati
Chairman and Chief Executive Officer
• Fritz Squindo
Chief Financial Officer
• Walter Bevilacqua
Vice President and Director Corporate Development
1
Fritz Squindo
Chief Financial Officer
2
Where we come from: 1997-1999 HIGHLIGHTS
3
1997-1999 HIGHLIGHTS
1997
1998
1999
CAGR
1997-1999
Net Sales
372.3
416.1
526.3
18.9%
Gross Profit
as % of sales
185.5
49.8%
213.3
51.3%
281.7
53.5%
23.2%
Operating Income Before R&D
as % of sales
66.6
17.9%
74.2
17.8%
95.9
18.2%
20.0%
Operating Income
as % of sales
31.9
8.6%
34.1
8.2%
37.2
7.1%
8.0%
Pretax Income
as % of sales
33.4
9.0%
38.2
9.2%
38.6
7.3%
7.5%
Net Income
as % of sales
20.1
5.4%
22.6
5.4%
23.2
4.4%
7.4%
Cash Flow
41.9
51.5
59.1
18.8%
(billion lira)
1997-1998 reclassified for comparison purposes
4
Where we are: RESULTS Q1 2000
P&L TRENDS
SALES & MARGINS BY BUSINESS
AREA
CAPITAL EMPLOYED
5
RESULTS Q1 2000
Q1 (billion lira)
1999
2000
Delta
Net Sales
127.3
147.8
16.1%
Gross Profit
as % of sales
66.7
52.4%
86.1
58.3%
29.1%
Operating Income Before R&D
as % of sales
20.0
15.7%
34.9
23.6%
74.1%
R&D Expenses
as % of sales
13.1
10.4%
17.6
11.9%
33.8%
Operating Income
as % of sales
6.9
5.4%
17.3
11.7%
150.9%
Pretax Income
as % of sales
Net Income
as % of sales
8.7
6.8%
21.1
14.3%
142.2%
5.3
4.2%
14.1
9.6%
164.6%
Cash Flow
14.3
23.2
62.2%
6
P&L TRENDS
(as % of Net Sales)
1999
Q1
1999
Q2-Q4
2000
Q1
Gross Profit
52.4
53.9
58.3
SG&A (a)
36.7
34.8
34.6
Operating Income before R&D
15.7
19.0
23.6
R&D
10.3
11.4
11.9
5.4
7.6
11.7
Operating Income
(a) Includes amortization of goodwill
7
RESULTS Q1 2000
Q1 (billion lira)
1999
2000
Delta
Net Sales
127.3
147.8
16.1%
Gross Profit
as % of sales
66.7
52.4%
86.1
58.3%
29.1%
Operating Income Before R&D
as % of sales
20.0
15.7%
34.9
23.6%
74.1%
R&D Expenses
as % of sales
13.1
10.4%
17.6
11.9%
33.8%
Operating Income
as % of sales
6.9
5.4%
17.3
11.7%
150.9%
Pretax Income
as % of sales
Net Income
as % of sales
8.7
6.8%
21.1
14.3%
142.2%
5.3
4.2%
14.1
9.6%
164.6%
Cash Flow
14.3
23.2
62.2%
8
Where we are: RESULTS Q1 2000
P&L TRENDS
SALES & MARGINS BY BUSINESS
AREA
CAPITAL EMPLOYED
9
SALES & MARGINS BY BUSINESS AREA
PHARMACEUTICALS
PHARMA CHEMICALS
(billion lira)
Q1-99
Q1-00
Delta
Net Sales
90.7
108.8
+ 20.0%
36.6
39.0
+ 6.6%
Operating Margin
4.1
4.5%
11.7
10.8%
+ 185.4%
2.8
7.7%
5.6
13.5%
+ 100.0%
Q1-99 Q1-00
Delta
10
CAPITAL EMPLOYED
(billion lira)
1999
31/12
2000
31/03
Net Working Capital
for Operations
103.3
126.6
Net Non-current Assets
233.5
216.7
Reserves for Long - term
Liabilities
(36.5)
(35.5)
CAPITAL EMPLOYED
300.3
307.8
86.9
77.7
Shareholders’ Equity
213.4
230.1
FINANCING OF
CAPITAL EMPLOYED
300.3
307.8
Net Debt
11
Where we are going: 2000-2003 TARGETS
NET SALES & OPERATING MARGIN
CAPITAL EMPLOYED
12
2000-2003 TARGETS
(billion lira)
1999
2000
2003
CAGR
1999-2003
Net Sales
526.3
593.5
1000
17.4%
Gross Profit
as % of sales
281.7
53.5%
329.9
55.6%
561
56.1%
18.8%
R&D
as % of sales
58.7
11.2%
65.3
11.0%
100
10.0%
14.2%
Operating Income
as % of sales
37.2
7.1%
61.6
10.4%
130
13.0%
36.7%
931
1542
3092
35.0%
EPS (lira)
13
EVOLUTION OF NET SALES & OPERATING MARGIN
(billion lira)
1000
900
800
700
600
500
400
300
200
100
0
1000
905
16,0%
825
14,0%
526
594
12.1%
13.0%
12,0%
10,0%
11.0%
10.4%
8,0%
7.1%
6,0%
4,0%
2,0%
0,0%
1999
2000
Net Sales
2001
2002
2003
Operating Margin
14
EVOLUTION OF CAPITAL EMPLOYED
1999
2000
2001
2002
2003
Net Working Capital
for Operations
103
136
151
169
182
Net Non-current Assets
233
424
408
397
386
Reserves for Long - term
Liabilities
(36)
(39)
(36)
(33)
(30)
CAPITAL EMPLOYED
300
521
523
533
538
87
277
246
208
157
Shareholders’ Equity
213
244
277
325
381
FINANCING OF
CAPITAL EMPLOYED
300
521
523
533
538
(billion lira)
Net Debt
15
Walter Bevilacqua
Vice President and Director Corporate Development
14
How we are going to get there: THE STARTING POINT
DRIVERS OF GROWTH
RECORDATI IN 2003
BEYOND 2003
17
THE STARTING POINT
•A new level of sales & profitability
Net Sales
Gross Profit
CAGR
1997-1999
Growth
1999-2000
+18.9%
+23.2%
+16.1%
+29.1%
•Concentration on core activities and key products
18
DRIVERS OF GROWTH
Stronger, more efficient market
presence
Zanidip®
Acquisitions
Licensed-in products
R&D Pipeline
19
DRIVERS OF GROWTH
Stronger, more efficient market
presence
Zanidip®
Acquisitions
Licensed-in products
R&D Pipeline
20
EFFICIENT MARKET PRESENCE
• Italy, Spain: work done in 1998-1999
(Italy, Market Audits)
Jan-Feb
1999
Growth over prior year; value
Market
Recordati
Market share; value
Relative (to Roche)
Absolute
Jan-Feb
2000
6.2%
9.9%
13.6%
23.8%
23.3%
1.31%
25.3%
1.43%
Trend
108
109
• France, Portugal: 2000-2001
Source: IMS
21
STRONG MARKET PRESENCE
What is market share good for:
- efficient local operations
- share of voice for new product
introduction
- attractive in-licensing partner
Where is Recordati?
- strong in Italy
- France covered with acquisition
- build-up planned in Portugal, Spain
22
DRIVERS OF GROWTH
Stronger, more efficient market
presence
Zanidip®
Acquisitions
Licensed-in products
R&D Pipeline
23
ZANIDIP® ITALY
• Excellent performance where it has been introduced
Jan-Feb
1999
Jan-Feb
2000
Growth %
Zanidip®
3.7
7.1
91
Recordati licensees
2.4
3.2
34
Norvasc®
34.4
40.0
16
Rest of class
86.0
88.8
3
Italy
(billion lira)
Relative market share of Zanidip®
to:
Norvasc®
Rest of class
Trend
11.0
4.3
18.0
8.0
164
185
•Room to grow there
Source: IMS
24
ZANIDIP® INTERNATIONAL EXPANSION
•World pharmaceutical markets, 1999
$ bn
% of
world
86.0
47.6
29.9
24.1
41
23
14
12
1999
Q1
2000
Q1
2003
Q4

5

10


26
(billion lira)
Source: Scrip
US
Japan
France, Germany
Italy, Uk, Spain
•Zanidip® launched in:
US, Japan
France, Germany
Italy, Uk, Spain
Other countries
25
DRIVERS OF GROWTH
Stronger, more efficient market
presence
Zanidip®
Acquisitions
Licensed-in products
R&D Pipeline
26
BOUCHARA
(FF million)
1999(a)
Net Sales
Pharmaceuticals - France
- Export
350
110
460
Manufacturing
130
Total Sales
590
Operating Margin
10%
Purchase Price (preliminary)
750
Net debt
Net worth
250
All data preliminary and subject to audit; transaction subject to contract
(a) Bouchara fiscal year ending 30 September
27
BOUCHARA
Pharmaceuticals France, 1999 (a)
Therapeutic area
Units
(millions)
Cough & Cold
of which - Exomuc
- Neo- codion
- Isofra
Antibiotics & Anti-infectives
of which - Amodex
- Panfurex
5.3
8.8
3.8
5.3
1.5
CNS
Rank
in class
(FF millions)
Revenues
Rank
in class
3
1
2
214
95
65
29
3
2
2
3
2
82
59
21
5
2
24
Cardiovascular
14
Other
16
Total
(a) Bouchara fiscal year ending 30 September
32.9
350
(Source BOUCHARA, GERS)
28
ACQUISITIONS & LICENSED-IN PRODUCTS
In the target numbers:
- Bouchara
- New licenses, 30 billion lira
Not in the target numbers:
- Acquisitions in Portugal, Spain
- Additional licenses
29
UPSIDE, other
Not in the target numbers:
- Zanidip® in US, Japan
30
RECORDATI IN 2003
1999
2003
CAGR
Net sales
526
1000
17.4%
Pharmaceutical
s
Pharmaceutical
Chemicals
365
783
21.0%
161
217
7.7%
Italy
260
390
10.7%
Other
Countries
266
610
23.1%
31
BEYOND 2003
Operations
•Established market participant
in:
Italy
France
Spain
Portugal
1999
2003



-



•International growth of Zanidip®
continues
•New products
- licenses
- own R&D
32
BEYOND 2003
R&D
The future of Zanidip®:
- fixed association
- atherosclerosis / LVH
- total gene expression studies
Urogenital R&D target
indications:
- urge incontinence /overactive bladder
- benign prostatic hypertrophy
- female sexual dysfunction (possibly)
33
Acquisizioni in Europa
per un traguardo a 1.000 miliardi
Milano, 10 Maggio 2000