2004 Full Year Financials Conference Call, 4 March 2005 - PowerPoint PPT Presentation

2004 Full Year Financials Conference Call, 4 March 2005

Operational highlights in 2004 Operational highlights in 2004 • Pharmaceutical sales up 3.5%, or 8.4% excluding Sophartex • International pharmaceutical sales up 12.0% • Lercanidipine sales up 25.4% • Operating income up 11.6%, at 18.5% of sales • Net income at 11.1% of sales • New product licenses 1

Composition of sales Composition of sales 2003 2004 Change % (million euro) 424.0 438.9 PHARMACEUTICALS 3.5% 87.0% 89.9% PHARMACEUTICAL 63.5 49.4 (22.1)% CHEMICALS 13.0% 10.1% 487.5 488.3 0.2% TOTAL 100.0% 100.0% 211.6 218.8 ITALY 3.4% 43.4% 44.8% 276.0 269.5 INTERNATIONAL (2.3)% 56.6% 55.2% 2

Sources of growth Sources of growth (% change, full year 2004 over full Volume Total Price Exchange year 2003) PHARMACEUTICALS 12.2 % (3.5) % (0.3) % 8.4 % excluding Sophartex (73.1) % - - (73.1) % SOPHARTEX PHARMACEUTICAL (18.9) % (0.1) % (3.1) % (22.1) % CHEMICALS TOTAL CHANGE 3.6 % (2.8) % (0.6) % 0.2 % 3

Composition of pharmaceutical sales Composition of pharmaceutical sales (million euro) 2003 2004 Change % 213.5 Pharmaceuticals Italy 203.4 5.0% 9.0% 106.7 97.9 Pharmaceuticals France 26.3 21.0 25.3% Pharmaceuticals Spain 85.4 12.3% 76.1 International licensees (73.1)% 6.9 25.7 Sophartex * 438.9 3.5% 424.0 TOTAL PHARMACEUTICALS 432.0 8.4% Excluding Sophartex 398.3 * Sold in April and consolidated only in 1Q 2004 4

Lercanidipine sales Lercanidipine sales 2003 2004 Change % (million euro) 33.7 39.5 17.3% Italy 15.7 48.4% 23.4 France 4.3 4.9 15.9% Spain 53.7 67.8 DIRECT SALES 26.3% 58.7% 59.1% 37.8 SALES TO LICENSEES 46.9 24.1% 41.3% 40.9% 91.5 114.7 TOTAL LERCANIDIPINE 25.4% 100.0% 100.0% SALES 5

Lercanidipine as a % of all calcium channel blockers Lercanidipine as a % of all calcium channel blockers Bubble size represents $ market value of CCB’s France 16 % share of CCB market Germany 14 Italy Australia Austria 12 10 S.Korea 8 Spain 6 Belgium U.K. 4 2 Holland 0 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 Quarters from launch Source: IMS data - 4Q 2004 6

Main products Main products Proprietary In-Licensed Breakdown of 2004 pharmaceutical sales (€ 439 m) Branded Generics Neo Codion Lomexin (codeine Urispas (fenticonazole) cough mix.) (flavoxate) Hexa line Acequin/ Exomuc Methadone Octegra Acequide Abufene (acetylcysteine) (biclotimol) Isocef (moxifloxacine) (quinapril) ( β -alanine) (ceftibuten) Diezime Tora-Dol 3% (cefodizime) 3% (ketorolac) 4% Other 4% Products 18% Peptazol/Ulcotenal 9% (pantoprazole) Main Products 5% 12% 2% OTC Elopram/Entact 26% (citalopram/escitalopram) Other revenue Zanidip (lercanidipine) 7

Breakdown of pharmaceutical sales Breakdown of pharmaceutical sales Spain International licensees 6% 19% France Sophartex 24% 2% Italy 49% Data: full year 2004 8

Full year results Full year results (million euro) 2003 2004 Change % Net Sales 487.5 488.3 0.2% Gross Profit 287.8 309.0 7.4% as % of sales 59.0% 63.3% Selling Expenses 148.0 156.0 5.4% as % of sales 30.4% 31.9% 32.8 37.3 R&D Expenses 13.9% 7.6% 6.7% as % of sales Operating Income 81.0 90.4 11.6% as % of sales 16.6% 18.5% Net Income 23.7 54.0 127.2% as % of sales 4.9% 11.1% 9

Operating income by business area Operating income by business area 2003 2004 Change % (million euro) 85.5 88.4 PHARMACEUTICALS 3.3% 20.2% 20.1% as % of sales (4.5) PHARMACEUTICAL CHEMICALS 2.0 n.s. (6.0)% 3.2% as % of sales* TOTAL OPERATING INCOME 81.0 90.4 11.6% 16.6% as % of sales 18.5% * Including inter-company sales 10

Capital employed Capital employed (million euro) 31 December 2003 31 December 2004 21.4 Net working capital 72.1 for operations 71.7 Net non-current assets 44.7 Net debt or cash 265.0 227.9 177.6 Shareholders’ 148.2 Equity (before negative hedging reserve of € 3.2 million) Capital employed: 249.3 Capital employed: 192.8 11

Net financial position Net financial position (million euro) 2003 2004 Change Cash and marketable securities 232.2 98.7 133.5 Short term bank debt (3.5) (17.6) 14.1 Current portion of medium and long term (25.2) (27.6) 2.4 debt Medium and long term debt (131.4) (74.9) (56.5) NET FINANCIAL POSITION 72.1 (21.4) 93.5 12

Cash flow Cash flow (million euro) 2004 2003 Net income 23.7 54.0 Depreciation of fixed assets 16.0 12.0 Amortization of intangible assets 10.8 9.1 Write-down of assets 30.0 1.8 Change in working capital 25.1 (1.5) (11.6) Changes in non-current items (4.1) Net investments in fixed assets (15.9) (0.2) Net investments in intangible assets (5.2) (5.7) 46.3 Free Cash Flow 92.0 Dividend paid (18.3) (18.4) - Purchase of treasury stock (2.9) 13

Statements contained in this presentation, other than historical facts, are “forward facts, are “forward- -looking statements” (as such term is looking statements” (as such term is Statements contained in this presentation, other than historical defined in the Private Securities Litigation Reform Act of 1995). These statements are based on currently available 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 ved to be reasonable. This information, these estimates information, on current best estimates, and on assumptions belie and assumptions may prove to be incomplete or erroneous, and involve numerous risks and uncertainties, beyond the olve numerous risks and uncertainties, beyond the and assumptions may prove to be incomplete or erroneous, and inv Company’s control. Hence, actual results may differ materially from those expressed or implied by such forward Company’s control. Hence, actual results may differ materially from those expressed or implied by such forward- -looking looking statements. statements. All mentions and descriptions of Recordati products are intended solely as information on the general nature of the 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 company’s activities and are not intended to indicate the advisa bility of administering any product in any particular instance. instance. Recordati, established in 1926, is a European pharmaceutical group, listed on the Italian Stock Exchange (Reuters RECI.MI, up, listed on the Italian Stock Exchange (Reuters RECI.MI, Recordati, established in 1926, is a European pharmaceutical gro Bloomberg REC IM, ISIN IT 0003074447), dedicated to the research, development, manufacturing and marketing of Bloomberg REC IM, ISIN IT 0003074447), dedicated to the research , development, manufacturing and marketing of pharmaceuticals and pharmaceutical chemicals, with headquarters in Milan, Italy and operating subsidiaries in France, in Milan, Italy and operating subsidiaries in France, pharmaceuticals and pharmaceutical chemicals, with headquarters Ireland, Portugal, Spain, Switzerland and the United States. Ireland, Portugal, Spain, Switzerland and the United States. Contact Information Contact Information Offices: Investor Relations: Website: Offices: Investor Relations: Website: Recordati S.p.A. Marianne Tatschke www.recordati.com Recordati S.p.A. Marianne Tatschke www.recordati.com Via M. Civitali 1 Via M. Civitali 1 +39 02 48787 393 +39 02 48787 393 20148 Milano 20148 Milano tatschke.m@recordati.it tatschke.m@recordati.it Italy Italy 14