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2000-2001 Exceeding our targets
Banca IMI Investment Seminar
Milan, 8 March 2001
Banca IMI Investment Seminar - Milan, 8 March 2001
• Giovanni Recordati
Chairman and Chief Executive Officer
• Fritz Squindo
Chief Financial Officer
• Walter Bevilacqua
Vice President Corporate Development
1
Giovanni Recordati
Chairman and Chief Executive Officer
2
WHO WE ARE
•
•
•
•
•
•
In business for 75 years
A public company since 1984
Always profitable, a regular dividend paid
A strong, aggressive marketer
A long-lasting commitment to R&D
R&D success accelerates growth
3
KEY EVENTS IN 2000
•
•
•
•
Strong improvement in business
Expansion in France completed successfully
Zanidip® license for the USA
Pharmacia agreement: a strong basis for further growth
4
Fritz Squindo
Chief Financial Officer
5
• YEAR 2000 RESULTS
• QUARTERLY SALES AND EBIT
• COMPOSITION OF SALES
• YEAR 2000 GROWTH
• EBITDA BY BUSINESS AREA
• CAPITAL EMPLOYED
6
YEAR 2000 RESULTS
(billion lira)
1999
2000
Change %
Net Sales
526.3
689.1
30.9%
Gross Profit
as % of sales
281.7
53.5%
399.5
58.0%
41.8%
R&D Expenses
as % of sales
58.7
11.2%
71.4
10.4%
21.6%
EBITDA
as % of sales
Operating Income
as % of sales
72.2
13.7%
136.7
19.8%
89.3%
37.2
7.1%
90.3
13.1%
142.5%
38.6
7.3%
79.8
11.6%
107.1%
23.2
4.4%
53.1
7.7%
128.9%
Pretax Income
as % of sales
Net Income
as % of sales
7
QUARTERLY SALES DEVELOPMENT
250
200
150
1999
2000
100
50
0
Q1
Q2
Q3
Q4
8
QUARTERLY EBIT DEVELOPMENT
35
30
25
20
1999
15
2000
10
5
0
Q1
Q2
Q3
Q4
9
YEAR 2000 COMPOSITION OF SALES
1999
2000
Change %
PHARMACEUTICALS
365.0
69.3%
521.5
75.7%
42.9
ACTIVE INGREDIENTS
& INTERMEDIATES
161.3
30.7%
167.6
24.3%
3.9
TOTAL
526.3
100.0%
689.1
100.0%
30.9
ITALY
260.0
49.4%
295.7
42.9%
13.7
INTERNATIONAL
266.3
50.6%
393.4
57.1%
47.7
(billion lira)
10
YEAR 2000 COMPOSITION
OF PHARMACEUTICAL SALES
(billion lira)
1999
2000
Change %
Pharmaceuticals Italy
240.0
65.8%
278.9
53.5%
16.2
Pharmaceuticals France
48.0
13.1%
113.3
21.7%
136.2
Pharmaceuticals Spain
26.8
7.3%
34.0
6.5%
26.6
International licensees
50.2
13.8%
95.3
18.3%
89.6
International pharmaceuticals
125.0
34.2%
242.6
46.5%
94.0
365.0
100.0%
521.5
100.0%
42.9
TOTAL PHARMACEUTICALS
11
YEAR 2000 SOURCES OF GROWTH
(% change, 2000 over 1999)
Price /
Volume Exchange
Total
17.4%
1.7%
+ 19.1%
1.9%
2.0%
+ 3.9%
Organic Growth, total
12.6%
1.8%
+ 14.4%
Acquisitions
16.5%
Total Growth
29.1%
Pharmaceuticals
Pharmaceutical Chemicals
+ 16.5%
1.8%
+ 30.9%
12
YEAR 2000 EBITDA BY BUSINESS AREA
(billion lira)
1999
2000
Change %
Pharmaceuticals
37.5
10.3%
99.6
19.1%
+ 165.8%
34.8
19.9%
37.1
20.3%
+ 6.6%
72.3
13.7%
136.7
19.8%
+ 89.2%
28.4
30.9
+ 8.9%
6.7
15.5
+ 133.0%
37.2
7.1%
90.3
13.1%
+ 142.5%
as % of sales
Pharmaceutical Chemicals
as % of sales*
Total
as % of sales
Operating depreciation
Goodwill amortization
Operating Income
as % of sales
* Including inter-company sales
13
IMPACT OF ACQUISITION OF BOUCHARA
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•
•
•
Consolidated since Q3
Contributes to sales growth
Goodwill amortized over 5 years, starting Q3 2000
Contributes to EBIT after amortization of goodwill
14
CAPITAL EMPLOYED
1999
31/12
2000
31/12
103.3
182.2
233.5
376.5
50.2
135.0
Reserves for Long - term
Liabilities
(36.5)
(43.1)
CAPITAL EMPLOYED
300.3
515.6
86.9
250.2
Shareholders’ Equity
213.4
265.4
FINANCING OF
CAPITAL EMPLOYED
300.3
515.6
(billion lira)
Net Working Capital
for Operations
Net Non-current Assets
of which goodwill
Net Debt
15
Walter Bevilacqua
Vice President Corporate Development
16
ZANIDIP® WORLDWIDE
SITUATION AND OUTLOOK
17
ZANIDIP® (LERCANIDIPINE)
A COMPARATIVE PRODUCT PROFILE
• Latest generation calcium-channel blocker
• Natural once a day
• Efficacy comparable to best competitors
• Excellent / superior tolerability and safety profile
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ZANIDIP® (LERCANIDIPINE)
THE REFERENCE MARKET
• Hypertension is the largest indication worldwide - over
$30 billion
• Addressed by several classes of drugs
• CCBs are one of the largest, about $10 billion
• The leading brand is Norvasc® (amlodipine), sold by
Pfizer, about $3.4 billion
19
LERCANIDIPINE IN ITALY
MARKET SHARE AS A % OF NORVASC®
20%
Zanedip® as a
% of Norvasc®
10%
lercanidipine
as a % of
amlodipine
0%
1998
1999
2000
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LERCANIDIPINE IN ITALY
MARKET SHARE AS A % OF OTHER CCBs
15%
(amlodipine
excluded)
10%
Zanedip® as a
% of other
CCBs
5%
lercanidipine
as a % of other
CCBs
0%
1998
1999
2000
21
YEAR 2000 LERCANIDIPINE SALES
1999
2000
Change %
DIRECT SALES
30.1
50.3
+67.1
SALES TO LICENSEES*
15.0
25.1
+67.3
TOTAL
45.1
75.4
+67.2
8.6%
10.9%
(billion lira)
% OF TOTAL SALES
* Excluding licensing income
22
ROLL OUT HISTORY
1998
AUSTRIA
GREECE
ISRAEL
ITALY
LUXEMBOURG
NETHERLANDS*
SPAIN
UK
1999
1H-2000
2H-2000
BELGIUM
BRAZIL
LEBANON
CHILE
DENMARK
FINLAND
KOREA
PHILIPPINES
SWEDEN
CYPRUS
GERMANY
KUWAIT
NORWAY
PAKISTAN
EXPECTED
2001
ARGENTINA
FRANCE
ECUADOR
HONG KONG
MEXICO
SINGAPORE
TAIWAN
TURKEY
VENEZUELA
VIETNAM
* Dec. 1997
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ROLL OUT PLAN
Key countries where regulatory development is ongoing:
AUSTRALIA
CANADA
CHINA
USA (filing expected 2H 2001)
JAPAN (local phase III studies)
24
ROLL OUT PLAN
LICENSING / ROLL OUT TARGETS
ANNOUNCED FOR 2003
TO BE MET IN 2001
25
ZANIDIP® IN THE USA
FOREST LABORATORIES LICENSE AGREEMENT
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THE HYPERTENSION MARKET IN THE USA
• Hypertension affects over 50 million people in the U.S.
• Market size exceeding 10 bn US$ in annual sales
• Calcium Channel Blockers account for well over one
third of the anti-hypertensive market…
• Norvasc® sales exceed $1.5 billion
Source: Recordati / Forest Laboratories
27
FOREST LABORATORIES: THE RIGHT PARTNER
• Annual sales exceeding 1.1 billion US$
• Sales force of over 1400 Reps
• Established presence in the cardiovascular market
• Tiazac® sales exceeding 150 ml US$ (5% market
share)
• Strong track record in European partnerships &
collaborations in FDA filings
Source: Forest Laboratories
28
TIAZAC® SALES DEVELOPMENT
(million USD)
158
130
140
120
5% market
share
85
100
80
60
40
25
20
0
1997
Source: Forest Laboratories
1998
1999
2000
Fiscal year ending March
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FILLING THE PIPELINE: ONGOING R&D
• LERCANIDIPINE
- CLINICAL PROFILE
- PATENT EXTENSIONS
- NEW COMBINATION PRODUCT
- GENE EXPRESSION STUDIES
• GENITO-URINARY DISORDERS
- URINARY INCONTINENCE/ UNSTABLE BLADDER
- BENIGN PROSTATIC HYPERPLASIA
- FEMALE SEXUAL DYSFUNCTION
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Genitourinary Alliance
Recordati - Pharmacia
1. The alliance takes advantage of each partner's strength in this area. It
aims at gaining a leadership position in the pharmacological treatment
of a number of genitourinary disorders, particularly of micturition.
2. The initial announcement concerns the overactive bladder program.
3. The alliance has started work based on Recordati's discoveries.
4. Research will be mainly conducted at Recordati. Pharmacia will be
responsible for development. Recordati will manufacture the active
ingredients based on its compounds.
5. Pharmacia will have worldwide marketing rights with Recordati comarketing in certain territories.
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Giovanni Recordati
Chairman and Chief Executive Officer
32
2000-2003 TARGETS
(Milan, May 2000)
1999
2000
2003
CAGR
1999-2003
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%
37.2
7.1%
61.6
10.4%
130
13.0%
36.7%
931
1542
3092
35.0%
(billion lira)
Net Sales
Operating Income
as % of sales
EPS (lira)
33
2000-2001 EXCEEDING OUR TARGETS
(billion lira)
NET SALES
AS PRESENTED
MAY 2000
2000
2001
2000
594
825
689
825
19.8%
 20%
13.1%
 13%
EBITDA
OPERATING INCOME
CURRENT
OUTLOOK
10.4%
EPS (lira, pre-split)
1542
DEBT TO EQUITY
1.14
11.0%
2001
2127
0.89
0.94
< 0.5 ex
acquisitions
34
2000-2001 Exceeding our targets
Banca IMI Investment Seminar
Milan, 8 March 2001