Milano, ITALY

RECORDATI:  BOARD APPROVES THE 2011 ACCOUNTS. REVENUE € 762.0 MILLION (+4.7%), OPERATING INCOME € 163.5 MILLION (+5.6%), NET INCOME € 116.4 MILLION (+7.2%). 2011 DIVIDEND € 0.30 (+9.1%).

  • Consolidated revenue € 762.0 million, + 4.7%. 

  • Operating income € 163.5 million, + 5.6%. 

  • Net income € 116.4 million, + 7.2%. 

  • Net financial position*:  net debt of € 55.7 million. 

  • Dividend for 2011 € 0.30 per share, of which € 0.20 already paid. 

  • Targets for 2012: sales between € 810 and € 830 million, operating income between € 160 and € 170 million and net income between € 115 and € 120 million. 

  • Annual Meeting of Shareholders convened for 19 April 2012, the sole convocation date. 

Milan, 7 March 2012 - Recordati's Board of Directors approved the consolidated financial statements for the year 2011 as well as Recordati S.p.A.'s accounts and the corporate governance and ownership report as required by art. 123 bis of the Consolidated Law on Financial Intermediation. The financial statements at and for the year ended 31 December 2011, together with the aforesaid report and the reports issued by the independent and by the statutory Auditors will be made available at the company's head office and at Borsa Italiana S.p.A. and published on the company's website within the terms of the law.

Financial highlights

  • Consolidated revenue in 2011 is € 762.0 million, up by 4.7% compared to the preceding year. Pharmaceutical sales are € 733.6 million, up by 4.5% and pharmaceutical chemical sales are € 28.4 million, an increase of 9.9%. 

  • Operating income, at 21.5% of sales, is € 163.5 million, a growth of 5.6% compared with the preceding year. 

  • Net income at 15.3% of sales is € 116.4 million (+7.2%), growing at a faster rate than operating income due to the  lower incidence of financial costs and taxes. 

  • Net financial position*at 31 December 2011 records net debt of € 55.7 million as opposed to net cash of € 46.0 million at 31 December 2010 after having acquired the Turkish company Dr. F. Frik Ilaç and the new product Procto-Glyvenol® in addition to the payment of dividends. Shareholders' equity further increased to € 594.5 million. 

* Cash and short-term financial investments net of bank overdrafts and medium/long-term loans which include the measurement at fair value of hedging derivatives (fair value hedge).

Business development news

The achievements recorded and initiatives pursued in 2011 represent important steps for the international development of the Group.

  • To begin with, 100% of the share capital of Dr. F. Frik Ilaç A.S., a Turkish pharmaceutical company with headquarters in Istanbul, was acquired. The value of the transaction (enterprise value) is of around $ 130 million of which $ 74,5 million were paid at the closing in September. Of the remaining balance a portion will be paid in trancheson future due dates and a portion comprises the company's debt. This is the second acquisition Recordati has made in Turkey, where it acquired Yeni Ilaç in December 2008. The company has a core portfolio of original prescription products both in primary care and specialist areas and employs 350 personnel, of which around 260 are medical representatives. The acquisition of Dr. F. Frik Ilaç is an important step forward in our strategy to increase our business in the emerging markets of Central and Eastern Europe, where the pharmaceutical market is growing at rates significantly greater than those of the Western European market. With this acquisition Turkey becomes our third most important market after Italy and France. 

  • The marketing authorizations, the brand and the rights to the product Procto-Glyvenol® were acquired from Novartis Consumer Health for the following countries: Poland, Russia, Turkey, Romania, Czech Republic, Slovakia, Ukraine, Portugal, the Baltic countries and Cyprus. Procto-Glyvenol® is indicated for the localized treatment of internal and external hemorrhoids and is currently on the market in the countries included in the agreement. 

  • The European roll-out of Livazo® (pitavastatin) started with its launches in Spain, by Recordati España and its co-marketer Esteve, and in Portugal, by Jaba Recordati and its co-marketer Delta. Pitavastatin, available in 1mg, 2mg and 4mg tablets, is a novel statin indicated for the reduction of elevated total and LDL cholesterol in adult patients with primary hypercholesterolaemia and combined (mixed) dyslipidemia when response to diet and other non-pharmacological measures is inadequate. This medicinal product promises to be an effective new treatment for dyslipidemia, a condition associated with an increased risk for heart disease and stroke. The launch of Livazo® and Alipza® in Spain and in Portugal represents the first step in the commercialization in Europe of this new specialty. 

  • Orphan Europe, the group's wholly-owned subsidiary dedicated to treatments for rare diseases, received an approval to extend the use of Carbaglu® (carglumic acid) to treat hyperammonaemia due to any of the three main organic acidaemias (isovaleric acidaemia, methylmalonic acidaemia or propionic acidaemia). Carbaglu® has orphan drug designation and since 2003 is indicated in the treatment of NAGS deficiency. Organic acidaemias (OA) are usually diagnosed in infancy, can be fatal, and affect especially the central nervous system. They are a group of inherited rare metabolic disorders which disrupt physiologic amino acid degradation causing a build-up of organic acids, which in turn may inhibit the urea cycle function, leading to hyperammonaemia. Acute hyperammonaemia due to OA represents a true medical emergency and Carbaglu®, by restoring the urea cycle and thus reducing blood ammonia levels, prevents brain damage. 

Subsequent events and business outlook

Group consolidated sales during the first two months of 2012 are in line with the company's expectations for the whole year which target sales between € 810 and € 830 million, operating income between € 160 and € 170 million and net income between € 115 and € 120 million.


Based on the results obtained, the Board of Directors of the parent company will propose to the shareholders a dividend of € 0.10 per share, in full balance of the interim 2011 dividend of € 0.20, to be paid to all shares outstanding at ex-dividend date, excluding those in treasury stock, as from 26 April 2012, with ex-dividend on 23 April 2012. The full 2011 dividend is therefore of € 0.30 per share  (€ 0.275 per share last year).

Further Board resolutions

The Board of Directors approved the following deliberation proposals to be submitted to the Annual and Extraordinary Meeting of Shareholders:

  • the renewal of the authorization to buy back and dispose of Recordati shares until the Annual Shareholders' Meeting which will approve the 2012 financial statements; 

  • the examination of the remuneration policy pursuant to article 123-ter of Legislative Decree 58/98; 

  • the renewal of the current five-year authorization to the Board of Directors - which expires on 11 April 2012 - pursuant to articles 2443 and 2420-ter of the Civil Code to effect share capital increases, against payment and/or gratuitously, for a maximum nominal value of € 50 million, and to issue bonds convertible into ordinary shares and/or cum warrant, for a maximum amount of € 80 million. The current authorization was never exercised by the Board. 

The objective of the proposal to renew the authorization to buy back and dispose of Recordati shares until the Annual Shareholders' Meeting which will approve the 2012 financial statements is, as in previous years, to grant the Board the possibility: of using shares for equity acquisitions or as consideration for strategic agreements; of allowing the company to invest in its own shares; and of constituting a stock of own shares to service current and future stock option plans. The company would be allowed to purchase up to 20,000,000 Recordati existing ordinary (common) shares, which includes those shares held in Treasury stock at any given time, for a maximum cash outlay of € 150,000,000 million.  The purchase price must be at least equal to the shares' nominal value (€ 0.125) and must not exceed the average official Stock Exchange price recorded over the 5 trading days prior to the transaction, plus 5%.  Possible purchases will be made on regulated markets and must comply with article 132 of Legislative Decree 58/1998  and with article 144-bis, comma 1.b) of the Issuers' Regulations as approved by CONSOB's resolution 11971/1999 and with market practice allowed and recognized by CONSOB.  At 7 March 2012 the company has 9,780,790 shares in Treasury stock which amounts to 4.677% of the current share capital. A total of 1,000,000 shares were purchased under the share buy-back program announced on 22 September 2011.

The Board of Directors also approved the Remuneration Report pursuant to article 123-ter of the Legislative Decree 58/98, the first part of which is the Remuneration Policy to be submitted to the Annual Shareholders' Meeting. The Remuneration Report will be made available to the public within the terms of the law.

Call to an Annual and Extraordinary Shareholders' Meeting

The Board of Directors resolved to convene the Annual and Extraordinary Shareholders' Meeting to be held at the company's offices on 19 April 2012 at 10.00 am, the sole convocation date, with the following agenda:
Annual Meeting
1. Annual Report of the Board of Directors; Statutory Auditors' Report; 2011 Financial Statements; inherent and consequent resolutions.
2. Remuneration policy pursuant to article 123-ter of the Legislative Decree 58/98; inherent and consequent resolutions.
3. Authorization proposal to buy back and dispose of Recordati shares; inherent and consequent resolutions.
Extraordinary Meeting
1.  Authorization to the Board of Directors pursuant to articles 2420-ter and 2443 of the Civil Code respectively for a maximum amount of € 80,000,000 and € 50,000,000; consequent modification of article 6 of the company's by-laws; inherent and consequent resolutions.

The convocation notice and the documents relative to the agenda will be published in the manner required and within the terms prescribed by current laws and regulations.

Recordati, established in 1926, is a European pharmaceutical group, listed on the Italian Stock Exchange (Reuters RECI.MI, Bloomberg REC IM, ISIN IT 0003828271), with a total staff of over 3,000, dedicated to the research, development, manufacturing and marketing of pharmaceuticals. It has headquarters in Milan, Italy, operations in the main European countries, and a growing presence in the new markets of Central and Eastern Europe.  A European field force of over 1,500 medical representatives promotes a wide range of innovative pharmaceuticals, both proprietary and under license, in a number of therapeutic areas including a specialized business dedicated to treatments for rare diseases. Recordati's current and growing coverage of the European pharmaceutical market makes it a partner of choice for new product licenses from companies which do not have European marketing organizations.  Recordati is committed to the research and development of new drug entities within the cardiovascular and urogenital therapeutic areas and of treatments for rare diseases.  Consolidated revenue for 2011 was € 762.0 million, operating income was € 163.5 million and net income was € 116.4 million.

For further information:

Recordati website:

Investor Relations                                 Media Relations                       
Marianne Tatschke                                Ketchum Pleon                       
(39)0248787393                                Cristina Risciotti, (39)0262411919,
e-mail:                         Marzia Ongaretti, (39)0262411915,                                               

Statements contained in this release, other than historical facts, are "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements are based on currently available information, on current best estimates, and on assumptions believed to be reasonable. This information, these estimates and assumptions may prove to be incomplete or erroneous, and involve numerous risks and uncertainties, beyond the Company's control. Hence, actual results may differ materially from those expressed or implied by such forward-looking statements. All mentions and descriptions of Recordati products are intended solely as information on the general nature of the company's activities and are not intended to indicate the advisability of administering any product in any particular instance.

Summary of consolidated results prepared in accordance with the International Accounting Standards and International Financial Reporting Standards (IAS/IFRS)
(thousands of €)

INCOME STATEMENT 2011 2010 Change %
REVENUE 762,036 728,134 4.7
   Cost of sales (259,977) (240,065) 8.3
GROSS PROFIT 502,059 488,069 2.9
   Selling expenses (232,160) (216,478) 7.2
   Research and development expenses (55,956) (68,841) (18.7)
   General & administrative expenses (45,386) (44,026) 3.1
   Other income (expenses), net (5,080) (3,940) 28.9
OPERATING INCOME 163,477 154,784 5.6
   Financial income (expenses), net (3,465) (3,787) (8.5)
PRE-TAX INCOME 160,012 150,997 6.0
   Provision for income taxes (43,566) (42,417) 2.7
NET INCOME 116,446 108,580 7.2
Attributable to:
Equity holders of the parent 116,434 108,571 7.2
Minority interests 12 9 33.3

EARNINGS PER SHARE 2011 2010 Change %
Basic € 0.584 € 0.548 6.6
Diluted € 0.556 € 0.524 6.1

Earnings per share (EPS) are based on average shares outstanding during each year, 199,369,542 in 2011 and 198,170,113 in 2010, net of average treasury stock which amounted to 9,755,614 shares in 2011 and to 10,955,043 shares in 2010.
Diluted earnings per share is calculated taking into account stock options granted to employees.

Total revenue 762,036 728,134 4.7
Italy 221,603 199,531 11.1
International 540,433 528,603 2.2

Pending completion of independent and statutory audits.

Summary of consolidated results prepared in accordance with the International Accounting Standards and International Financial Reporting Standards (IAS/IFRS)
(thousands of €)

ASSETS 31.12.2011 31.12.2010
Property, plant and equipment 55,397 53,017
Intangible assets 149,649 113,512
Goodwill 365,719 305,741
Equity investments 1,977 1,930
Non-current receivables 1,282 2,485
Deferred tax assets 22,494 20,221
Inventories 108,251 85,190
Trade receivables 141,231 126,575
Other receivables 21,311 26,734
Other current assets 3,198 2,825
Fair value of hedging derivatives (fair value hedge) 1,791 1,164
Short-term financial investments, cash and cash equivalents 105,164 161,680
TOTAL CURRENT ASSETS 380,946 404,168
TOTAL ASSETS 977,464 901,074

EQUITY AND LIABILITIES 31.12.2011 31.12.2010
Share capital 26,141 26,141
Capital in excess of par value 83,719 83,719
Treasury stock (53,215) (52,579)
Hedging reserve (4,227) (4,299)
Translation reserve (8,232) (592)
Other reserves 26,600 25,733
Retained earnings 445,745 389,284
Net income for the year 116,434 108,571
Interim dividend (38,525) -
Minority interest 40 28
SHAREHOLDERS' EQUITY 594,480 576,006
Loans due after one year 137,518 96,767
Employees' termination pay 16,692 19,259
Deferred tax liabilities 6,049 5,699
Other non-current liabilities 2,062 606
Trade payables 98,678 93,068
Other payables 58,335 53,536
Tax liabilities 12,091 9,691
Other current liabilities 348 620
Provisions 21,813 21,413
Fair value of hedging derivatives (cash flow hedge) 4,227 4,299
Loans due within one year 11,616 16,604
Bank overdrafts 13,555 3,506

Pending completion of independent and statutory audits.
Summary of consolidated results prepared in accordance with the International Accounting Standards and International Financial Reporting Standards (IAS/IFRS)
(thousands of €)

2011 2010 Var. %
Revenue 272,243 241,442 12.8
Operating income 43,642 33,617 29.8
Pre-tax income 93,976 81,038 16.0
Net income 78,462 67,892 15.6

31.12.2011 31.12.2010
Non-current assets 495,511 388,585
Current assets 174,749 225,178
TOTAL ASSETS 670,260 613,763
Shareholders' equity 307,644 321,151
Non-current liabilities 173,299 110,301
Current liabilities 189,317 182,311

Pending completion of independent and statutory audits.


The manager responsible for preparing the company's financial reports Fritz Squindo declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Law on Finance, that the accounting information contained in this press release corresponds to the document results, books and accounting records.