Recordati Industria Chimica e Farmaceutica S.p.A.

Good afternoon. This is the Coruscant conference operator. Welcome and thank you for joining the Retorgati 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, madam.

Hi. Thank you, Sabrina, and good afternoon or good morning, everyone, and thank you for attending the Recordati conference for today. I'm pleased to be here with our CEO, Rob Cormans, and Luigi La Corte, our CFO. that will be presenting the 2021 preliminary full-year results and 2022 targets. 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 leave the floor to Rob. Please, Vlad.

Thank you, Federica, and welcome. Good morning, good afternoon. I'm really proud to have the opportunity to announce another year of very solid results for the group. And I'm, of course, aware that I do this in the midst of an evolving human tragedy in Ukraine, where I'm sure you have questions on how this potentially impacts our business going forward. So we will address that during the presentation as well. The revenue increased in 2021 by 9.1% versus 2020, or 11.4% at a constant exchange rate, with a progressive recovery in the main reference markets and operating conditions starting to return to near normal, especially in the latter part of the year. On the rare disease segment, we have seen strong growth of both the metabolic and the endo portfolio across all regions, resulting in a double-digit growth. SPC has also shown resilient growth, even in tough market conditions, where there were still excess restrictions to physicians and medical personnel. In particular, in quarter four of 21, cough and cold business came back to almost pre-pandemic levels, and also on Eligard, we delivered ahead of expectations, with sales of 85.3 million, thanks to an early transition to direct sales and a positive response to our focused promotion. Excluding Aligard, the group organic growth at constant exchange rate was 5.6%, absorbing the loss of exclusivity of Silodisin and Pitavastatin and the impact of the pandemic. Overall, financial results are in line with expectations set at the start of the year, with strong continued growth cash flow generation. EBITDA at 602.3 million, up by 5.8% versus 2020, and with a margin at 38.1%. And adjusted net income at 424.6 million, up 3.5% versus 2020. Especially also free cash flow of 469.9 million, increased quite markedly with 87.6 million compared to full year 2020. Operating results reflect the impact of 14.4 million non-recurring costs. This mainly relates to a targeted rightsizing and optimization of our field force in Germany and Turkey. This reflects an evolution of our portfolio as well as a constant emphasis on commercial access and excellence. and it capitalizes on the learning that we have during this pandemic in the ability to leverage multi-channel instead of just face-to-face visits with Salesforce. Our net income of $386 million is 8.7% up versus 2020, reflects $5.8 million of FX losses, and non-recurring tax benefits of around 27 million recognized in 21. Then another highlight of the last year, 2021, was the user acquisition. We expect to really expand on our rare disease business and accelerate growth. The completion of this acquisition is expected in Q2 of this year. During the year, We have a continued ESG commitment resulting in an MFCI rating improvement to A and an inclusion in the Euronext MIB ESG index from Borsa Italia. Let me provide you with some more updates on Eligard and EndoPortfolio and as well EUSA acquisition process. On the next slide, you see the strong performance of Eligard. Both Eligard and the Endo franchise made a strong progress during 21, confirming our expertise as a group in integrating effectively new businesses and launching new assets. Eligard, the transition finalized in a record time. The deal completed in January and the transition of marketing authorizations pretty much finalized by June in over 20 countries. We were also able to quickly start promoting the products across many markets with sales stabilizing and in several cases actually showing a reverse and going into growth. Very positive sales trends that we could see particularly in Spain and France. We have completed a regulatory filing of the new device and at the end of January of this year, in 2022, and we now hope to see approval during the second half of this year for this new device, which will give a further positive force behind Eligars. On the Endo franchise, we closed the year with revenues of 126.6 million, confirming the guidance range of 120 to 140 million, with Signifor revenue of 80.5 million and Isterisa at 46.1 million. Both for Signifor and Isterisa, the commercialization is on track, with Signifor in-market sales growing in the year of over 10% on a like-for-like basis versus 2020. And Isterisa continuing to capture patients across USA and Europe, with strong updates in the U.S., in France, and in Germany, and also good progress in Italy with early access, and Japan, where we launched in June of 2021. The key next catalyst for Isterisa is the agreement of reimbursement across key European countries. Reimbursement price in Germany and Switzerland have been agreed in line with expectations, and we are confident to be able to secure additional ones in the course of 2022. We plan to continue to invest behind this important franchise in 2022 to further drive adoption in EU post-reimbursement approvals. Finally, I would like to give you an update on the USA Pharma acquisition announced in December 21 and on the latest stages of the process. First of all, this acquisition is clearly in line with our strategy of complementing organic growth with value-accreted M&A and represents an excellent opportunity to further expand and reinforce our rare disease franchise, complementing our existing global footprint and expertise with new capabilities in a platform that will be very important for the future in expanding rare disease in a niche oncology therapeutic area. While the deal hasn't closed, the regulatory review process has been progressing according to plan and completion, as I already indicated, is expected in quarter two of this year. Good news is that USAID has been performing a little bit ahead of expectation in the latter part of 2021. with sales finishing the full 21 just over 150 million. The step-up of this was largely driven by Sylvan, likely from usage in other settings and benefiting from a market shortage of other IL-6 monoclonal antibodies. This is really great news and signals potential additional opportunities for this franchise. At this point, we confirm peak sales of approximately €250 million and a going EBITDA margin in line with the average of a rare disease segment, which includes potential expansion of Carziba into the U.S. We will clearly provide a broader update on USA post the acquisition close and once we've had the chance to fully engage with USA management. And we really look forward to welcoming Yuzha into Recordati. You will recall that we announced that we have secured a 650 million bridge financing to support the acquisition. And I'm happy to say that we have reduced that to 450 million, thanks to new term loan of 200 million already finalized and will finalize the balance of takeout over the course of 2022, depending on market conditions. So overall, a very strong year with a very solid foundation for further growth in the years ahead. And as you know, it's really early days for me in Recordati. But I would like to give a little bit of my first impression and my first perspective on the business and share with you the next slide. The first impression I had as CEO after the initial months in Recordati are extremely positive. We have a strong heritage with a very solid company with very strong foundations, an incredible commitment and an ability to deliver. There's people that have a strong focus on performance and excellent track records in delivering on objectives and beyond expectations with strong discipline in investment and strong discipline in execution and in spending. Our team has a very global footprint, and also in my management team here in Milan, these are really global citizens, often with a different nationality than only Italian. The business is beautifully diversified. There's a good diversification. We have a balanced combination with stable and cash-generating SPC business, combined with higher margin, higher growth, rare disease segment. And obviously, there's growth opportunities. The business is growing, and it's very much my aim to accelerate growth with targeted investments, particularly in the rare disease post-USA. I see fantastic opportunities to continue to grow and keep the balance with our SPC footprint. With that, I would for now like to hand to our CFO to continue to grow and keep the balance with our SPC footprint. With that, I would for now like to hand to our CFO, Luigi.