Recordati Industria Chimica e Farmaceutica S.p.A.

Good afternoon. This is the Coruscant Conference Operator. Welcome and thank you for joining the Recordati 2021 First 9 Months 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. Federica De Medici, Investor Relations and Corporate Communications of Recordati. Please go ahead, madame.

Thank you, Sabrina, and good morning and good afternoon to everyone, and thank you for attending the Recordati conference call today. I'm pleased to be here with our CEO Andrea Ricordati and our CFO Luigi Lacorte that will be presenting the 2021 first nine months results. Then we'll be running you through the presentation. As usual, the set of slides is available on our website under the investor section. After that, we will open up for Q&A. I will now give the floor to Andrea. Please, guys.

Good afternoon or good morning, ladies and gentlemen, and thank you for having joined us for the Recordati 2021 first nine-month results investor presentation. If you could please move to the first slide of the presentation with the key highlights. So I am pleased to have the opportunity to announce another quarter of very solid results for the group. Q3 confirmed the trends recorded during the second quarter with a progressive recovery in the main reference market, and operating conditions starting to return to near normal. Even more limited access to medical personnel in many countries and social distancing measures continue to impact certain product categories. The recovery of several therapeutic areas in SPC, combined with contribution for the new product Aliguard and the continued growth in the rare disease segment, resulted in a net revenue increase in the quarter of 15.5% or 17% of cost of the exchange rates. in Q3, compared to the same period, clearly, in 2020, which has, let me remind you, been most significantly impacted by the COVID-19 restriction measures. If we look at EBITDA on quarter-to-quarter, we grew 15.4% year-on-year. Net revenue in the first nine months of 2021 closed at $1,156 million, with a growth of 5.7% versus previous year, reflecting an adverse currency exchange rate effect of around $31.6 million, and the contribution from Aligarh for $59.4 million. Net of this effect, growth was at 3.2%, with good momentum in recent months, more than offsetting the full-year impact of the 2020 LOEs of psilocybin and phthalacetine, which show a decrease of $23.8 million. and the impact of the pandemic, especially on seasonal flu medications in the first part of 2021. The growth of the disease portfolio was significant in the first nine months of 2021, at 20.2%, thanks especially to the increase in Signiforin and Istoriza, which basically closed at 90.5 million versus 53.8 million in the same period last year, but also to the solid performance of our metabolic portfolio product. Financial results are in line with expectations, with EBITDA at $447.9 million, up 2.1% compared to the first nine months of 2020, and with a margin of $38.7 of revenue. Growth was driven by the very solid revenue performance, partially offset by planned increases in investments to support the end of portfolio growth. the costs related to integrating and promoting early guard, as well as the gradual recovery and operations in the territory. With face-to-face promotion across markets now tracking at 75% to 80% of a normal core plan. It should be reiterated that margins in the first nine months of 2020 benefited from the sharp drop in commercial operations in the territory following the introduction of lockdowns and of social distancing measures over most of this period. Net income at 296.4 million increased by 8.1% compared to the first nine months of 2020, reflecting the greater impact of net financial expenses due to exchange rate losses of 6.8 million euros and the non-recurring tax benefits of 426.2 million euros recognized in Q2. As you will see later, In more detail, the first nine months of 2021, we delivered roughly $362.9 million of free cash flow, an increase of around $70 million versus the same period last year, thanks to the increase in operating results and careful management of working capital. Just a few words on sustainability rating. I am pleased to say that our continued focus on the ESG agenda results and an MSCI rating improvement and inclusion in the Euronext EFG index. Consistent with our dividend policy, the board has approved an interim 2021 dividend of 0.53 per share to be distributed in November. Lastly, the board today approved a share buyback program to serve as a stop option plan. Before handing over to Luigi Lacoste, who will provide you more details on our financial performance in this first nine months, Let me provide some more updates on the Eligard and the endocrinology portfolio. If we move to the next slide, please. So, Eligard. The integration of Eligard is progressing well with close to 59.4 million of revenue in the first nine months of the year, which is slightly ahead of the plan and we're just under half of this in direct sales of our organization. As of the 30th of September 2021, the transfer of the marketing authorizations of sales licenses for record-active court in most countries subject to the license agreement of TOLMR, except for Russia and Ukraine. We have 30 marketing authorizations transfers already completed and 24 countries directly, plus six countries directly selling, where ELEGAL is now being promoted with encouraging feedback from HCPs. It is very early days, but we're pleased to see where promotion has started since a few months, encouraging signs of changes in the sales trend. We've all seen market sales returning to growth in Spain and Germany and improvements in other markets, including France and Italy. The development of a new device by Tormar is progressing. The new device variation filing is now expected in the first quarter of 2022. Thanks to the early transition to direct selling, we forecast full year revenue just over $80 million, in part due to the fast transition to direct sales. If you can move to the next slide, please. With regards to the end of franchise, the commercialization of Cignafor and Cignafor Live is on track, recording net revenue in the first nine months of around $58.5 million. We have strong new patient acquisitions in all regions and across all approved indications. and significantly grew around 10% in in-market terms compared to 2020. We are also still very much on track with the stories at launch, and new patient acquisitions are progressing in line with our expectations, contributing with net revenue of around 32 million as of 30th of September 2021, mainly in the US, France, and other EU markets. We continue to have strong support from top QOLs and patient organizations. Reimbursement was agreed, the reimbursement price was agreed in Germany in line with expectations and discussions are ongoing in other European markets. Also importantly, we have launched now in Japan where we're performing according to plan. Furthermore, as economic conditions continue to improve, we are starting to see improvements also in the gross to net in the US. We remain on track to deliver on the targets that we set for the franchise this year, which is between 120 and 140 million euros. At this point, I will leave the floor to Luigi to take you through in more detail on the first nine-month results.