Recordati Industria Chimica e Farmaceutica S.p.A.

Good afternoon. This is the Chorus Call Conference Operator. Welcome, and thank you for joining the Recordati 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 a 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.

Please go ahead. Thank you, Sherry. Good afternoon or good morning, everyone, and thank you for attending the record conference call today. I'm pleased to be here with our CEO, Rob Cormas, and Luigi La Corte, our CFO, that will be presenting the 2022 first nine-month results. They will be running 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 a Q&A. And I will now leave the floor to Rob. Please go ahead.

Thank you, Federica. I'm happy to say that Q3 results were extremely strong, confirming the strong momentum across both our businesses. And this on the back of continued recovery of our markets and also outperforming basically the relevant markets where our portfolio competes. resulting in year-to-date revenue and EBITDA ahead of expectations. Net revenues for the first nine months of 2022 were plus 19% versus prior year, or on a like-for-like basis, plus 10.4%, where we have adjusted for the newly acquired user pharma and for the Aligard 2021 accounting. Our SPC business continues to grow at a high single digit ahead of relevant markets, driven by continued strong sales of flu products, our cough and cold range, GI, the OTC, and strong performance of Eligard. Our legacy rare disease portfolio showed double-digit growth, with strong growth of both endo and also particularly strong performance of the metabolic franchise in Q3, led by Panhematin, and sister drops but also very resilient sales of carbaglue with almost minimal impact of the generics in the US. Our new rare oncology franchise contributed in Q2 to Q3 with 91.1 million revenue and this is nicely ahead of our expectations. EBITDA of 560 million is up 15.2% versus prior year with a margin at 37.5% which remains strong thanks to multiple proactive actions taken to mitigate impact of inflation and despite dilutive effect of the hyperinflation accounting in Turkey. The strong free cash flow generation of 346.3 million is in line with last year despite high non-recurring expenses with net debt just below two times EBITDA, confirming the ability of the group to integrate acquisitions quickly and deleverage. As you already know, and I will let Luigi spend a bit more time on it and give more details, starting from the first half of 2022, our reported results are impacted by fair value IFRS S3 adjustments related to user pharma acquisition. by non-recurring expenses and some FX volatility, which impacts the reported operating profit and the reported net income. Adjusting for the non-recurring cost and purchase price allocations, adjusted net income is plus 13.5%, absorbing higher financing expenses and FX losses recorded in the first half of the year. We've also achieved two important milestones. that are going to help with our growth platforms. One is the new Eligard device approved by the reference member states, Germany, with national registrations and transition planning ongoing. The device will definitely create positive momentum around Eligard. And second, the transfer from Novartis of our production steps. Key for us, SIGNI for LAR, we've successfully completed the production transition into our hands. And there's also good news from the ESG site. Our efforts continue to be recognized by MSCI rating A confirmation and an upgrade to robust level in rating provided by Moody's ESG Solutions in September. Before I hand over to Luigi, I'd like to also give a little bit more detail on two of the key rare disease franchise performances. On the next slide, you will see both franchises, endo and oncology, are growing very, very nicely. You can see the strong growth for both endo and onco franchises, fully in line with plan and on track to deliver for the full year of 2022, with respectively 160 to 180 million for the Endo and around 130 million for the Onco franchise. For Endo, the growth is 40% in the first nine months of 2022. At a constant exchange rate, this would be 30%. We see continuous double-digit growth for Signifor and also almost revenue doubling for Isterisa. So we're really on track to deliver for both products. And also Oncology, I'm happy to report, continues to grow nicely at 13% year-on-year, ahead of our expectations, with particularly strong performance in LAC and EMEA. The full revenue for this year, and I remind you that's only nine months or three-quarters, is going to be close to $130 million. The interaction with the FDA on CAR-C by U.S., clinical development, and the regulatory pathway ongoing with a target filing in 2024 as previously communicated. So both franchises are on track to deliver our long-term ambitions with the Endo franchise in combined $400 to $440 million for Cigni 4 and Isterisa, over $100 million for Cigni 4 and $300 to $350 million for Isterisa. $250 million for the oncology portfolio as a long-term peak. There's additional potential upside from additional indications on the evaluation, particularly one for the potential post-bariatric hypoglycemia, the indication that we're exploring for signiform. And with this, I'd like to hand over to Luigi to take us through the financial figures.