Recordati Industria Chimica e Farmaceutica S.p.A.

This is the Coruscant Conference Operator. Welcome and thank you for joining the Ricordati 2020 First Quarter Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Ms. Marianne Taschke, Director of Investor Relations and Corporate Communications of Recordati. Please go ahead, Madam.

Good afternoon or good morning to everyone, and thank you for attending the Recordati conference call today. Our CEO Andrea Ricordati and our CFO Luigi La Corte will be presenting and commenting upon our first quarter 2020 results. For a better understanding of this presentation, please access the set of slides available on our website www.ricordati.com under the investor section and presentation tab. At the end of the presentation, we will answer any questions you may have. Andrea, please go ahead. Thank you.

Okay. Good afternoon, ladies and gentlemen, and welcome to our first quarter results conference call. So, if you turn please to slide two of the presentation, which is currently the slide with the title First Quarter 2020 Highlights. As you know, the first quarter of 2020 saw the onset of the COVID-19 pandemic in all geographical areas in which the group operates. As we all know, restrictions were imposed on the movement of people, transport, production, commerce, most of which are still in place. I can confirm that there was exceptional organizational responsiveness at Recordati to that deal with the effect of an unprecedented crisis. Despite the medical emergency and restrictions implemented in all countries, the financial results obtained in the first quarter are very positive and confirm the continued growth of the group. Revenues grow significantly, but please let me remind you that they include a 20 million stockpiling effect, which we expect to lead to a destocking in the second quarter. And also this revenue includes the 14.7 million revenues from the sales of Signicor. EBITDA which excludes 2 million of non-recurring costs related to the COVID-19 emergency, mostly donations to hospitals in the most affected areas, is 172.9 million or 40.3% of sales growing on previous year by 20.1%. Net income also grew by more than 20% with both profitability measures leading therefore to a margin improvement. Adjusted net income, which is net income excluding amortization and impairment of intangible assets except software and goodwill, as well as non-recurring items, net of tax effects is 125.2 million euros or 29.2% of sales with a growth versus the previous year of 23.5%. Luigi will touch and give more information on this additional measure we have introduced during the presentation. Net debt at the end of March is over $880.8 million, compared to net debt of $902.7 million at the 31st of December 2019. During the period, a milestone of $20 million was paid to Novartis, following the European approval of Isturiza. and own shares were purchased for a total outlay net of disposables for the exercise of stock options of 44 million euros. We're also very pleased to have obtained early approval for Resurreza both in Europe and in the US and I should discuss launch planning further on in the presentation. You can please turn to slide three of the presentation. Just a few more words on how Recordati has been dealing with this unprecedented crisis. Clearly, the group's primary objective was a safe cut of employees and the assurance of continuity of supply and distribution of our products. As you all know, with regards to the pharmaceutical industry, operations were allowed to continue in order to ensure the availability of drugs for patients. While complying with all the measures necessary to ensure the health and safety of its employees, Ricordati did not interrupt its production and distribution activities and adopted all necessary measures to guarantee the continued availability of a market of its products. I take this chance to really wish, I really sincerely would like to thank all the group employees for the great effort and excellent job done in this difficult situation. especially in the Lombardy region that, as you know, was one of the most heavily affected areas in Europe with the COVID pandemic. The professionalism, dedication and sense of responsibility, in particular our manufacturing distribution employees, allowed our activities to continue in the best possible way, ensuring the uninterrupted availability of our products, many of which are for the treatment of severe chronic diseases. We are proud of the contribution we have been able to provide in this emergency. Also for the donations we have made to support health care institutions with tireless and courageously committed to fighting the COVID-19 pandemic in the most affected areas. Just to give you a bit more detail on this, looking at this slide, when it comes to safe environment for our employees, we implemented measures to protect obviously individuals and to prevent infection diffusion in our facilities. Clearly, all personnel that could work from home was left home and worked from home. And I can confirm that the organization reacted very well, like I mentioned before, and people are working indeed. New working models in all manufacturing plants were introduced to support distancing measures. As an example, revision of working time and redistribution of personnel in our facilities in Turkey, Italy, and Tunisia. a two-shift model in France in our Nantes airway disease facility, and weakened shifts introduction in our specialty primary care facility in France, in Montluçon, and in our facility in Spain. Turning to supply chain and continue to follow all our businesses and all markets, we introduce alternative supply flows for starting materials and intermediates to feed reproductive API plants, both for captive and merchant portfolios. stock management tuning both for APIs and finished drug forms. We introduced stock de-localization for finished drug forms in the different countries, creating more hubs. Alternative FDF supply flows, planning and production programs revision for FDF, both in Recordati and our CMO plans, and alternative logistics and distribution models. So into slide four, I would like to say a few words on Signifor before I pass on to Luigi who will take you through on the first quarter results. So we are very pleased with the performance of Signifor in the first quarter with an estimated 6% growth versus 2019 on a like-for-like in-market sales basis. especially given the current situation and the fact that we are just starting to promote the product ourselves in the U.S., while the transfer of marketing authorizations in Europe is still to be completed. What is probably of most interest for all of you, and of course for us as well, is the launch of Istoriza. Launch in the U.S. is on track and is slated for June, July, and in the U.S. starting from Q3 2020. We have decided not to postpone the launch in the interest of patients. We are aware of the value of this new treatment option for patients suffering from Christian's disease and are committed to making it available as soon as possible. Launch activities that at one time would have been carried out by being actively present in medical congresses and visiting key opinion leaders and specialists are of course not possible at the moment. Given the current COVID-19 environment to which we're all adjusting, we have invested in a set of tools and technology infrastructure that allows us to conduct remote detailing and enable virtual video conferences with the healthcare providers. Notwithstanding the challenging situation, our organization is committed to implement the most plan as effectively as possible. So if you could please turn to slide five and at this point I'm going to pass to Luigi who will take you through the results. Thank you.