Recordati Industria Chimica e Farmaceutica S.p.A.

Good afternoon. This is the CORCO conference operator. Welcome and thank you for joining the Recordati 2020 first nine-month 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 Tacchke, 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. Andrea Recordati, our CEO, and Luigi Lacorte, our CFO, will be presenting our first nine-month 2020 results. For a better understanding of his presentation, please access the set of slides available on our website, www.recordate.com, under the Investors section and Presentations tab. At the end of the presentation, we will answer any questions you may have. Please go ahead, Andrea.

Thank you, Marianne. Good afternoon or good morning, ladies and gentlemen, and thank you for joining our first nine months results. So despite the continued challenging environment, performance across the group has shown notable resilience. Net revenue is slightly down by 0.6%, which is mainly due to the pandemic's impact on our reference market and severe foreign exchange headwinds, which stand at minus 1.7% for the first nine months and minus 3.9% in the third quarter. Profitability remains strong as a result of cost containment and improved product mix. EBITDA in the first nine months is $438.8 million, or 40.1% of sales, which is up 7.1% versus last year. Net income is $274.1 million, or 25.1% of sales, again up 8.1% versus 2009, the same period. An adjusted net income is 317.5 million, or 29% of sales, which again is up by 12.23% versus the first nine months of 2019. Sales of Signifor and Signifolar in the launch of Istoriza showed strong progress, contributing with 53.8 million of net revenue year-to-date. Istoriza is now on the market in the US, France, and Germany, with sales generated in line with the objectives. And we expect more than 10 million for the full year 2020. Activities leading to the addition of new products have also gone ahead in a recent time. We've launched cystic drops in the U.S. following the FDA approval. And this provides an important treatment option for cystinosis patients with corneal cystic crystal deposits. A pipeline was reinforced thanks to an exclusive license obtained from ARS Pharmaceuticals, a private U.S. company, for ARS-1, epinephrine nasal spray in late-stage development for emergency treatment of severe allergic reactions that can lead to anesthesia. The agreement grants commercialization rights to ricordati in the EU, UK, Russia, CIS, Turkey, Middle East, and other markets. Returning to the financials, our net debt at the 30th of September stands at $845.9 million, a reduction compared to the $902.7 million of the end of 2019, which reflects strong cash generation of around $267 million before milestones, net share repurchases, and dividend space. Just as a reminder, On the 1st of October, Recordati Board of Directors approved the proposed incorporation through reverse merger of FIMEI SPA and Rossini Investimenti SPA in Recordati SPA. As we mentioned in the dedicated call that we had on the subject, there would be no change to the respective shareholders in Recordati of its majority shareholder and other shareholders. There will be no change to reproductive financial position, strategy, or capital allocation policy, and the merger plan is subject to shareholder approval with a plan effective date in the first half of 2021. I will now leave the floor to Luigi Lacorte, our CFO, to take you through in more detail our first nine month results.