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ANN
NUAL REPOORT
1
20122
REVENUE € (thousands
TOTAL REVE
Italy
Internationa
KEY CONSO€ (thousands
Revenue
EBITDA(1)
Operating in
Net income (1) Earnings be
KEY BALAN€ (thousands
Net financia
Shareholder(2) Short‐termmeasuremen
PER SHARE€
Net income(
Shareholder
Dividend
SHARES OUT
‐ average du
‐ at Decemb(3)Net incometreasury stocon total shar2012 and 9,7(4) Proposed b
)
ENUE
al
OLIDATED D)
ncome
efore interest
NCE SHEET D)
al position(2)
rs’ equity
m financial invent at fair value
E DATA
(3)
rs’ equity(3)
TSTANDING:
uring the yea
ber 31
e per share isck amounted tes outstandin85,790 sharesby the Board o
DATA
, taxes, depre
DATA
31 D
(
estments, cash of hedging de
ar 199
200
s based on ato 9,402,948 sng at year ends at 31 Decemof Directors.
2012
828,317
219,898
608,419
2012
828,317
191,711
166,964
118,497
ciation and am
December 2012
(153,456)
661,397
h and cash eqerivatives (fair
2012
0.593
3.297
0.30 (4)
9,722,208
0,619,366
verage sharesshares in 2012 net of treasu
mber 2011.
2
%
100.0
26.5
73.5
% of revenue
100.0
23.1
20.2
14.3
mortization.
uivalents, netr value hedge)
)
s outstanding2 and 9,755,6ury stock. Trea
201
762,03
221,60
540,43
201
762,03
187,74
163,47
116,44
31 Decembe201
(55,734
594,48
t of bank overd).
201
0.58
2.98
0.3
199,369,54
199,339,36
g during the y14 shares in 2asury stock am
11
36 100
03 29
33 70
11 % revenu
36 100
42 24
77 21
46 15
er 11
4)
80
drafts and loa
11
84
82
30
42
66
year net of a2011. Sharehomounted to 8,
%
Cha2012/2
0.0 66,
9.1 (1,7
0.9 67,
of ue
Cha2012/2
0.0 66,
4.6 3,
1.5 3,
5.3 2,
Cha
2012/2
(97,7
66,
ns which inclu
Cha
2012/2
0.
0.
0.
verage treasuolders’ equity 505,790 share
nge 011
281 8
705) (0.
986 12
nge 011
281 8
969 2
487 2
051 1
nge 011
722) 175
917 11
ude the
nge 011
009 1
315 1
000 0
ury stock. Aveper share is bes at 31 Decem
%
8.7
.8)
2.6
%
8.7
2.1
2.1
1.8
%
5.3
1.3
%
1.5
1.1
0.0
erage based mber
LETTER F To Our Shar The year judevelopmenEuropean mimportant agrowth of ppharmaceutgrowth of 2Group’s netthe acquisitthe pharmaacquisition paid. Shareh A number o In Februaryfollowing thwere initiatintraprostatadequately commercialthe terms odrug in Euro NX‐1207 is ais injected band involvesignificantlyprostatic hyquality of lif During Aprpharmaceutproducts acBetadorm® indicated foTirgon® (bisannual sales In August tcompany w71.0 milliontranches onpharmaceut
FROM TH
reholders,
ust ended wnt of our gromarkets and oareas. These profits. Grouptical revenue2.1% compart financial poion of six OTaceutical comof a portfoliholders’ equi
f initiatives w
y the activitihe successfuted. The pivotic injection ocontrolled ization of NXf the agreemope including
a novel pateby a urologistes little or ny improve thyperplasia (BPfe of older m
ril the marticals for Gercquired are D (diphenhyor rhinitis ansacodyl for cs for the six p
the acquisitioith headqua of which PLn future datetical market
HE CHAIR
was a very oup in internof those for tinvestmentsp consolidatee is € 797.4 ed with the osition recordTC products impany Farmo of productity further in
were pursued
ies for the l completionotal controllof the drug iby medicaX‐1207 was ment Recordag Russia and t
nted drug det in an officeno pain or dhe signs andPH), or growen. It can lea
rketing authrmany were JHP‐Rödler®
ydramine HCnd head coconstipation)products are
on of 100% rters in KrakLN 50.8 millioes and a posince 2003
RMAN
productive national markthe treatmen were made ed revenue fmillion, up 8preceding yeds net debt oin Germany, ma‐Projekt pts in Russia acreased to €
d in 2012 wh
preparation n of a Scientled clinical tn patients wl therapy. signed in 20ati received the CIS, the M
eveloped by e setting dirediscomfort. d symptoms th in prostatad to acute u
horizations, acquired fro® (mint oil Cl indicated lds), Collom) and Xitix® of around €
of the shakow, was conon were paidrtion compr3 and marke
3
period, bothkets. The acqnt of rare disthanks to thfor 2012 is €8.7%. Operaear. Net incoof € 153.5 m€ 14.3 milliolus a portfoand the othe€ 661.4 millio
hich are fund
of a Europeific Advice mtrial will assewith lower uriA European010 by Recorexclusive rigMiddle East,
Nymox whicectly into theIn clinical tof BPH, an
te size associurinary retent
the trademom Cilag Gmindicated fofor sleep disack® Topica(vitamin C l6 million.
re capital ofncluded. Thed at the closinrises the comets drugs be
h in terms quisition of nseases in thehe group’s so€ 828.3 millioating incomeome at 14.3%illion. Durinon overall wolio of proder C.I.S.. Divn.
amental for
ean Phase Imeeting withess the efficinary tract syn licensing rdati and Nyghts to develSouth Africa
ch is currentlye zone of therials a singled showed eated with agtion, incontin
marks and mbH Internator digestive sorders), Rhil (salicylic alozenges to
f Farma‐Proje value of theng. Of the rempany’s debelonging to
of initiativenew producte U.S.A. will dolid financial on, up 8.7% , at 20.2% o% of sales is ng the periodere paid for ucts, € 66.7idends for a
the future de
II clinical trih the Europecacy and safymptoms (LUagreement
ymox Pharmaop and subsa and the Ma
y in Phase IIIe prostate whe dose of Nevidence of geing, can sernence, and o
additional aional and Mdisorder, h
inopront® (pacid solutiontreat vitami
jekt Sp. z oe transactionemaining balabt. Farma‐Proa variety o
s and invests in the Cendrive furthersituation anover the preof sales, is €€ 118.5 mill
d € 21.0 millithe acquisit7 million we total of € 6
evelopment
ial for REC ean Medicinefety of a sinUTS) associatfor the deaceutical Corequently maaghreb area o
I trials in thehere the enlNX‐1207 haslong lasting riously impacother serious
assets conccNeil GmbHheadache, copseudoephedn, an anti‐con C deficien
.o., a Polishn (enterpriseance a portioojekt operatof therapeut
stments, forntral and Easr growth in tnd the contineceding year 167.0 milliolion (+1.8%).on were paidions in Polanere paid for60.0 million w
of the Group
0482 (NX‐12es Agency (Egle TRUS‐guted with BPHevelopment rporation. Uarket and selof North Afric
U.S.A.. The argement ocs been foun benefit. Bect the healths consequenc
cerning six & Co. oHG.ough and cdrine+triproliorn preparatncy). In 2012
h pharmaceue value) is ofon will be paes on the Pic areas, m
the stern hese nuing r and on, a . The d for nd of r the were
p.
207), EMA) uided H not and nder l the ca.
drug ccurs d to enign h and ces.
OTC The cold), idine tion), 2 the
utical f PLN aid in olish ainly
cardiovascupersonnel, o In October tfrom Cilag Gsecond leadof three prowhich the mDentosan® chlorhexidinconsumers. brand will b In NovembeFocus and Cthe productThe Alfavit pholds a leadpromoted foVetoron is bof L‐carnitin Also in Noveinto an agreGraspa® forGraspa®, hucurrently in has obtaineasparaginasprotection oasparaginasL‐asparaginaintended to for whom th In Decembetreatment owas signed.Expected remarketed inportfolio is porphyria. (indomethainfants, andacquisition rare diseaseU.S.. Gowing forwportfolio as
lar and urolof which 84 a
the oral careGmbH Internding brand inoduct categomouthwash Azione Inte
ne at differeRecordati isecome even
er the acquisCarnitone wats acquired, wproduct line ding positionor the prevebeta‐carotenene. Total ann
ember subsideement granr the treatmeuman erythropivotal Phas
ed an orphane with a safof the enzyme in red blooase via long satisfy the uhe current tr
er an agreemof rare and o. The value evenues in 20n the U.S. bPanhematinOther impocin injectiond Cosmegen®of this portfes worldwide
ward we wilwell as thro
logical treatare dedicated
e line of proational, part the Italian oories: mouthcategory repensiva, Dentnt concentras a very wel more popul
sition of all ras successfulwhich are OTin particular n on the maention and te, Focus conual sales of t
diary Orphannting Orphanent of Acute ocytes encapse II/III clinicn drug desigfer and broame inside hood cells) relatger efficacy, unmet mediceatments are
ment for the other diseaseof the trans013 for the by Recordati ® (haemin f
ortant drugs n), indicated ® (dactinomyfolio of produe and will als
l continue toough acquisit
ments as wd to sales and
oducts bearint of the Johnoral care mahwash, toothpresents thetosan® Trattations and all‐known namar in the futu
rights to five ly concludedTC pharmacecomprises a
arket. Qudesreatment of tains bilberrythe five prod
n Europe andn Europe thLymphoblaspsulating L‐acal trial for Agnation in Euader range omologous retes to its abibetter comcal needs of fe not suitabl
acquisition es and markesaction, whicacquired poRare Diseas
for injection)acquired ato close a cycin for injeucts is a conso contribute
o develop thions of prod
4
ell as dietard marketing.
ng the Dentoson & Johnsrket at pharmhpaste gel ae most impotamento Mere highly appme in the pure.
product lined. The value oeuticals and wide range an is based chronic fatigy anthocyaniuct lines are
d Erytech Phe exclusive tic Leukemiasparaginase,
ALL and will europe and thof clinical ued blood cellity to overcopliance, redfrail patientse.
of all rights eted mainly ch was succrtfolio are oses, a wholly) for the amare NeoProfclinically signction) used nfirmation ofe to the grow
he business iucts or comp
ry suppleme. Sales in 201
osan® trademson Family ofmacy level (nd toothbruortant franchese and Depreciated byharmacy and
es on the Ruof the transadietary suppof formulatioon coenzymgue and metins and luteinof around R
arma, a Frenrights for tha (ALL) and A, for the treaenter a Phasehe USA for Ase than exisls. The addeome existinguced doses s, patients su
concerning in the Uniteessfully closf around $ 4y‐owned U.Selioration ofen® (ibupronificant patenmainly in thf Recordati’s wth and enha
nternationalpanies, with
nts. The com11 were of ar
mark was acqf Consumer C(IMS – Septemshes, sold mhise. All Dententosan® Ory the professd we are co
ussian markeaction is of Rplements, arons containinme Q10, an adtabolic dysfun for eye heaUB 1.0 billion
nch biopharmhe commerciAcute Myeloiatment of hee IIb trial in AALL. Graspa®sting forms ed value of Gg limitations and a betteffering relap
a portfolio od States of Ased in Janua40 million. TS. corporatiof recurrent aofen lysine int ductus arhe treatmen intention toancement of
lly, both by gthe objectiv
mpany empround PLN 47
quired for thCompanies. mber 2012). mainly in phatosan® mourtodontico –sional dentalonfident that
t: Alfavit, QuRUB 2.7 billiore very well ng vitamins adjuvant for cnction. The alth and Carnn.
maceutical coialization and Leukemia ematologicalAML in Euro® is a new fdue to the Graspa® (by associated wer safety propses and othe
of products iAmerica, frory 2013 is ohe acquired on. The mainattacks of acinjection) anrteriosus (PDt of three rao become a our current
growing the ve of enhanc
loys around 7 million.
he Italian maDentosan® isThe line conarmacies, anthwash bran– are basedl communityt this prestig
udesan, Vetoon. The brandknown in Ruand mineralscardiac funckey ingredienitone is a so
ompany, entd distributio(AML) in Eurl malignanciepe. The proformulation entrapment encapsulatin
with conventiofile. Graspaer patient gro
indicated form Lundbeck of $ 100 milportfolio win product incute intermitnd Indocin®DA) in premaare cancers.leading playoperation in
existing proing our prese
135
arket s the nsists nd of nds ‐ d on y and gious
oron, ds of ussia. s and ction, nt in ource
tered on of rope. es, is oduct of L‐and
ng L‐ional a® is oups
r the LLC. llion. ill be n the ttent I.V. ature The er in n the
oduct ence
in markets more maturpopulation ameasures infrom generithose of Cestrategy wildedicated ttreatments its presenceis to extendwill continuenrichment through the We believe we count, aof our emptheir suppor
DIVIDENDS Based on thdividend of outstandingApril 2013, wshare last ye
with higher re markets oand the growntroduced byic versions oentral and Eal continue toto treatmenavailable thre in the U.S.A the presencue to dedicatof our prod
e acquisition
that the strics always, on loyees and trt during 201
S
he results ob€ 0.10 per
g at ex‐dividewith ex‐dividear).
future growof Western Ewing availabily healthcareof specialtiesastern Europo be focusedts for rare rough its ownA. following tce of our rarete resourcesduct portfolioof new speci
ct implementhe entreprethe trust of o12.
btained, the Bshare, in fuend date, excdend on 22 A
wth potentiaEurope. On tlity of new tre authorities s no longer pe the pharmd on expandidiseases win organizatiothe recent ace disease opes to researcho both throuialties.
tation of oureneurship anour sharehol
Board of Direull balance ocluding thosApril 2013. T
5
l. In 2012 ththe one hanreatments, bto contain patent protemaceutical mng its operatill continue ons throughocquisition of erations to oh and develough the deve
r strategy wind determinalders. We w
ectors of theof the interime in treasuryhe full 2012
he pharmaced demand fout on the othpharmaceutected. Howemarket is stilltions in thesto be a pr
out Europe, ina portfolio oother importaopment andelopment an
ll enable us tation of our mwould like to
e parent comm 2012 dividy stock, as frdividend is t
eutical markeor medicinesher hand pricical expenditever, in emel growing strse growing ariority. Our n the Middleof products. Iant markets d strong empnd launch of
to be optimismanagement express our
mpany will prdend of € 0.rom 25 April therefore of
et decreaseds increases dces are decreture and to rging markerongly. In threas. Growthgroup alreae East and han coming yeworldwide. phasis will bpipeline pro
stic regardint team, the pr gratitude to
ropose to th.20, to be p2013 and re€ 0.30 per s
d in most ofdue to an ageasing due tothe competts which incis context gh in the segmdy makes ts now reinfoars our objecFurthermorebe placed onoducts as we
g the future,professional o all of them
e shareholdeaid to all shecord date ohare (€ 0.30
f the geing o the tition clude roup ment hese orced ctive e, we n the ell as
, and skills m for
ers a hares on 24 0 per
RESEARC
During 201hypertensionamely, theacute myelowas given tpitavastatinconsolidatioadding highhighest leve
PRODUCT D
NAME
CARBAGLU
ZANIPRESS
REC 0482
methadone
CYSTADRO
GRASPA®
REC 1819
REC 0438
* New dosa
The introdualliances witgrowth. Durdevelopmennumerous tevaluated. Spotential, winvolvementrare disease Research an
CH AND D
2, developmon and rare de treatment ooblastic leuketo all regulat) as well as on and expahly trained pels of perform
DEVELOPM
®
®*
e
PS®
age
uction in theth other biotring 2012 a nnt candidatetherapeutic Some of the with the objt in projects es.
nd developm
DEVELOP
ment activitiediseases. In of cancer‐relaemia (AML) itory and poorphan dru
ansion, Recoersonnel in mance. The fo
ENT PIPELIN
ORIGINATO
Recordati
Recordati
Nymox (NX
Recordati
Erytech
Recordati
Recordati/U
e pipeline oftechnology anumber of pres (from smaareas (urololatter projeective of refor specializ
ent activities
PMENT
es focused addition, twated pain in n patients olst‐approval gs for rare dordati continthe areas ofollowing tab
NE
OR
X‐1207)
UFPeptides
f new produand pharmacroducts advaall moleculesogy, metabocts are curreinforcing ouzed therapies
s during 2012
6
on the conswo new cliniccases of resilder than 65 activities regdiseases (Canued to stref chemistry, le shows the
INDICATIO
Organic aci
Essential hy
Benign pro
Cancer relaresistance o
Ocular cyst
Acute lymppatients wiPhiladelphi Acute myepatients >6
Overactive
Overactive spinal lesio
ucts, both tceutical comanced in the s to biotecholism, pain, ently in an aur primary cs, personaliz
2 are summa
solidation ofcal developmstance or intwho are unfgarding corprbaglu®, Cysengthen its dpharmacolo
e main projec
N
idemias (OA)
ypertension
static hyperpl
ated pain in caor intolerance
tinosis
phoblastic leukith first recurria chromosom
loid leukemia 65 unfit for che
bladder and I
bladder in paons
hrough our panies, is ofdevelopmennology comoncology andvanced phaare productzed medicine
arized in the
f several onment programtolerance to fit for chemoporate produstadrops®). Idrug discoveogy and molects and produ
lasia (BPH)
ases of e to opioids
kemia (ALL) inrence of me negative AL
(AML) in emotherapy
Incontinence
atients with
discovery pf great impornt pipeline, apounds and nd rare disease of evalua portfolio be and new re
following pa
ngoing progrms were launopioids and otherapy. Renucts (silodosn view of thery and devecular biologucts in develo
DEVELOSTATUS
ApprovePhase II
Filed in
Phase II
Phase II
Phase II
n
LL
Phase II Phase II
Phase I
Phase I
rograms as rtance for thnd a large grgene therapases), were ation in ordeut especiallyemedies for t
ragraphs.
rams in uronched in Eurthe treatmenewed emphin, lercanidiphese activitievelopment tegy to ensureopment.
OPMENT S
ed in EUII in U.S.A.
EU
II
IIb
II
I/III
Ib
well as throhe group’s furoup of potepy) belonginrecognized
er to assess ty to expandthe treatmen
logy, rope, nt of hasis pine, es of eam, e the
ough uture ential ng to and their our nt of
LERCANIDIP In 2012 Reefficacy andhypertensionew formuenalapril 20patients to the two dru During 2013will be launcof hyperten PROJECTS IN REC 0482 (N The inclusioour commitfor significan BPH is a comimpact on haffects appris expected REC 0482 imolecule invoffice settinfew minutescatheterizatdose of NX‐cardiovasculong‐lasting maintained During 201internationaEuropean C(EMA). Enro IN‐HOUSE U Recordati’s address micor without developmenthe lower uinnovative m
PINE
cordati succd safety of fuon. The resullation and d0 mg). We exsimplify theigs.
3 a new phasched, to furtsive patients
N UROLOGY
NX‐1207)
on in our devtment to incnt urological
mmon afflicthealth and qroximately 50to grow prog
s a patentevolves a newng directly ins, causes litttion. The dru‐1207 has belar side effecbenefit of symptom im
2 Recordati al clinical triaCountries. Tholment of the
UROLOGY PRO
discovery pcturition disoincontinenc
nt of effectivurinary tractmedicines.
cessfully comull doses of ots of this studosage formxpect the apir daily treat
se IV clinical ther assess as with metab
velopment pirease availab disorders, a
tion of older quality of life0% of men ovgressively, as
ed new chemw targeted apnto the zone le or no painug has succeseen found tocts associatea single inje
mprovement f
designed aal to be conhe program we first patient
OJECTS
programs in orders. Irritatce, are freqve and well‐tt acquired o
mpleted a vaour leading audy led to thm of our fixepproval of thment of hyp
trial on the bnd confirm tbolic disorder
ipeline of REbility to patind in particu
men that cae and can lever age 50 ans the populat
mical entitypproach to thof the prost
n or discomfossfully complo produce syd with curreection procefor several y
clinical devducted in fifwas previouts is expected
Urology aretive symptomquent, mainltolerated druover 40 year
7
ast internatianti‐hypertenhe filing withed combinathe dossier dupertension an
beneficial effthe effects ofrs and moder
C 0482 (the ents of innoular for enlar
auses difficulead to inconnd close to 9tion ages.
developed he treatmenttate where tort, and doesleted a seriemptomatic intly approvedure, with aears without
velopment pfty renownedusly discussedd to take pla
e primarily foms of the lowly in womeugs. Recordars of researc
onal multi‐fansive, lercanh the Europetion of lercauring the firsnd increase c
fects of our ff the fixed corate kidney i
molecule knovative, simpged prostate
lties with urintinence and90% of men b
as NX‐1207t of BPH. Thethe enlargems not requires of controllemprovemened drugs. Lona significant t other treatm
program for d clinical cend and agreece starting fr
ocused on twer urinary trn and in thati has specifch in this fie
actorial phanidipine, in pean authoritieanidipine+enst half of 20compliance b
fixed combinombination tmpairment.
own as “NX‐ple, effectivee (benign pro
ine emissiond acute urinaby age 80. Th
by the Canae drug is admment occurs.e preliminaryed multi‐cents without cng‐term followproportion ments.
REC 0482 nters in a nued with the rom the seco
the search fract, such as he elderly. fic know‐howeld, and is c
se II study atients suffees of an appnalapril (lerca013. The newby using a fix
nation of lerctreatment on
‐1207”) is fu and long‐laostatic hyper
that can haary retentionhe market for
adian compaministered by. The procedy anaesthesianter U.S. triaausing the uw‐up studiesof men wit
that is baseumber of EurEuropean Mond quarter 2
for innovativurgency andOpportunitiew in the arecurrently de
that evaluatering from esproval requesanidipine 20w dosage wixed combina
canidipine+enn the renal fu
lly coherentsting treatmplasia, BPH).
ve a detrimen . This disor BPH treatm
any Nymox.y a urologist idure takes ona nor subseqls where a surinary, sexus have shownh BPH repo
ed upon a lropean and
Medicines Ag2013.
ve treatmentd frequency, es exist for a of disordeeveloping sev
ted the ssential st for a 0 mg + ll allow ation of
nalapril unction
with ments
ental order ments
The in an nly a uent ingle al or n the rting
large non‐ ency
ts to with the
rs of veral
Recordati’s the central in‐man) clinsynthesized developmen In 2012, Reclass of comthe object oprofile and,clinical trials PROJECTS IN In France Rein the frammethadone Several studtreatment ospecialists opublished retransdermarepresents indication frandomizedrelated painundergoing up for 56 dacompleted b RARE DISEA Recordati isa number o“orphan” dr Carbaglu® (cand Drug A(NAGS) defiwhich leadscauses irrevNAGS deficiof the use oacidemia ortreatment o Cystadrops®cannot be cWithout pro
original molenervous systnical trial tha and initiallynt program.
ecordati commpounds to bof improving, following ts have starte
N THE AREA O
ecordati marmework of pis also presc
dies and a laof cancer‐relof pain manaecommendal fentanyl, hyan attractivefor the currd, national phn inadequatechemotheraays. Today, tby March 20
SES
expanding itof projects irugs in variou
carglumic acAdministratioiciency. NAGs to accumulaversible brainency and thof Carbaglu® r propionic aof organic aci
® (cysteamincontrolled byoper treatme
ecule REC 18tem. Precliniat is currenty characteri
mpleted the pbe potentialg their lowerhe positive ed in the end
OF CANCER‐R
rkets methadprograms invcribed for thrge body of lated pain. Iagement in tions to relieydromorphoe potential ently markehase IIIb cliniely relieved apy treatmenthe study ha13.
ts involvemen the pipelius developm
id) is an orphon (FDA) for GS deficiencyation of ammn damage, cois genetic disto treat hypeacidemia), Cdemias.
e chlorhydray orally adment, cystine c
819, has a necal regulatorly ongoing. Azed, in orde
preclinical evly used, upor urinary tracopinion issuof 2012.
RELATED PAI
done exclusivvolving medhe treatmentliterature (>n France, mpatients witheve pain in one) are inaduse of metheted productcal study (duby opioids. Tnt or not, hos recruited 5
ent in the disne. Currentent phases, f
han drug appthe treatme
y is an extremonia in the oma, and evesorder requierammonaearbaglu® is
ate) are eye dministered cycrystals accum
8
ew mechanisry activities sA small serieer to either
valuation of n intravesicact stability. Tued by the I
IN
vely as replaical, social at of cancer‐re200 publicat
methadone ish cancer, ancancer patiedequately effhadone; howt. In 2012, ubbed “EQUIThe study wospitalized or59 patients i
scovery and dtly, through from formula
proved by theent of hypeemely rare inblood. If notentually deatres life‐long mia due to onow in phas
drops develosteamine. Cymulate in the
sm of action successfully ces of back‐ufollow or s
REC 0438, wal administraThis molecultalian health
acement therand psycholelated pain ations) have ss already usend in particuents, when leficient or powever, this Recordati stIMETH2”) onwill include 1r requiring hn 16 clinical
developmentits subsidiaation studies
e European Mrammonaemnherited mett adequatelyth. Carbaglu®treatment.
organic acidese III clinical
oped for the ystinosis affee cornea, res
targeting a gcompleted inups to the lesubstitute fo
which represation, in patie proved to h institute (I
rapy for majogical manaas a second‐hown the beed by teamslar, since AFevel 3 analgoorly tolerateuse would btarted in Frn methadone46 adult pathospitalizatiosites in Fran
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Medicines Agmia due to Ntabolic disory and quickly® is the only Following themias (isovale developme
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or opioid druagement. In ‐line therapyenefits of mes in palliativeFSSAPS (ANSesics (morphed. Thus, canbe outside orance an ope for the treatients sufferon. Patients wnce, and inclu
nts for rare dEurope, Recoproval and ph
gency (EMA)N‐Acetyl Glutrder affectiny treated, hypexisting speche approval feric acidemiant also in th
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cturally diffepinal lesions timal toleraberiore di San
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diseases, andordati has sehase III studie
and by the Ftamate Syntg the urea cperammonaecific treatmefor the extena, methylmahe U.S.A. for
f cystinosis wcluding the erred vision, p
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ence, ntries hine. r the and 2010 done, ntrol oved ntre, ncer‐ncer, owed d be
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photophobiform for a efficacy evapatients witthe indicatiodistribution PROJECTS IN Asparagine antitumor aof the patietreatment p(comprised need. GRASPA® is human red treatments,Orphan Dru ALL represeCostarica, Schildren undand 5. DurinimprovemenL‐asparagina In Decembetolerability involving a gTo date 72 expected toallergic reac GRASPA® mrandomizedplus low‐doLeukemia (Apatients wil
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ul in a numb, internationne vs. low‐dents over 65
March 2013 u
ulceration astration withpment of Cysder to compln the meanwwing success
EMATOLOGY
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sparaginase avoids toxicressing the d in US in 20
leukemia, we the countraffected by prognosis fohe current tds 80%.
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9
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r indicationsclinical studyine alone inge and unfit ber 2016.
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sparaginase in plasma. Thto L‐asparagiropriate L‐aspatients) rep
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ence of 1 toncidence is e highest incgnificantly imrotocols base
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drops® was r day. After new phase IIogram and props® underand the Midd
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sparaginase ey issues assy of asparagAcute Lymph
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nical study tndard poli‐co 55) affectee been enro reduce the reatment eff
is now launthe efficacy
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hown to posbeing highly tnot tolerate treatment. rge currently
encapsulatedociated withgine. GRASPhoblastic Leu
100,000 peothe U.S.A. eurring betwenks to the inhemotherapy
to evaluate themotheraped by ALL aftelled. The lasincidence anicacy.
nching an opy and tolerably diagnosedrapy. The en
rmulated in aof a safety l in a group oe for approvatient Use (Nrth Africa.
ssess a powtoxic, a large well the curThis populay unmet me
d in homoloh L‐asparagiA® was grakemia (ALL).
ople. The U.every year 3een the ages tensificationy, which incl
the efficacy py, was initier a first relast patient visnd the severi
pen, multicebility of GRASd Acute Myenrollment of
a gel and
of 30 val in NPU)
erful part rrent ation dical
gous nase nted
.S.A., 3,000 of 2
n and udes
and iated apse. sit is ty of
ntre, SPA® eloid f 123
Pharmchemi
Other re
REVIEW In 2012 reveinternationamillion, growDr. F. Frik Ilarising frommillion. FurSeptember wand represe
PHARMACE The group’sEuropean mthe world textended outo add our p The performthe table be € (thousand
Zanidip® (le
Zanipress®
Urorec® (si
Livazo® (pit
Other corp
Orphan dru
Zanidip® (lein 96 count
Zanipres
Zanidip 13.8
maceutical icals 3.7% evenue 1.7%
OF OPER
enues are € al sales (€ 60wing by 8.7%aç, acquired
m Yeni Recorthermore, thwith an effecent 3.7% of to
Sales by b
EUTICALS
s pharmaceumarkets, in Ruthrough licenur presence proprietary p
mance of proelow and des
s)
ercanidipine)
(lercanidipin
lodosin)
tavastatin)
orate produc
ugs
rcanidipine) ries and is o
s 6.0%
8%
Uro
RATIONS
828.3 millio08.4 million) %. The 2012 d in the last qrdati’s produhe Polish coct of aroundotal revenue
business
utical busineussia and thensing agreemin these marproducts, and
ducts sold dcribed in the
)
ne+enalapril)
cts
is Recordati’ne of the m
O
orec 3.9% Liva
n, up by 8.7%which repreresults incluquarter 2011uction activitompany Farm € 4 million. .
ess, which re other C.I.S. ments with prkets throughd those obtai
irectly in moe following pa
)
’s original caost prescribe
Orphan drugs 9.2%
Other corporateproducts 8.0%
Local prodportfolios 51
azo 2.0%
10
% over thoseesent 73.5% ude the cons1. The effectty on behalf ma‐Projekt a Sales of pha
represents 9and in Turkepharmaceutih the acquisiined under m
ore than one aragraphs.
201
114,57
49,32
32,74
16,30
65,90
75,85
lcium channeed calcium c
France 15
Germ
%
e
uct 1.7%
e of the precof total reveolidation of of this consof the new
acquired durarmaceutical
Pharm
96.3% of totey through ocal companiition of existmulti‐territor
market (cor
2
3
5
0
5
7
7
el blocker fochannel block
Italy 26.9%
5.1%
any 8.9%
P
Turkey 8
ceding year, enue. Pharmsales generasolidation, newly acquired ring August l chemicals a
maceutical s
tal revenue, ur own subsies of high sing marketinial licenses, t
porate produ
2011
124,718
41,592
19,750
6,797
59,183
69,257
r the treatmkers in the c
Portugal 4.3%
8.1%
with an incrmaceutical reated by the Tet of intercocompany, iswas consolidare € 30.9 mi
sales
is carried oidiaries but astanding. Weng organizatioto the local p
ucts) during
Chan2012/20
(10,14
7,7
12,9
9,5
6,7
6,6
ent of hypercountries wh
Ot18.
Spain 4.2%
Other W
UK 0.7 %
Rus
rease of 12.6venue is € 7Turkish compmpany reves of around dated as froillion, up by 8
out in the malso in the ree have gradons with theportfolios.
2012 is show
nge 011
45) (
733 1
990 6
08 13
724 1
600
tension avaiere it is pres
her Internation6%
W. European co
ssia, CEE 9.6%
USA 0.9%
6% in 797.4 pany nues € 32 om 1 8.9%
main est of ually e aim
wn in
%
8.1)
18.6
65.8
39.9
11.4
9.5
lable sent.
nal sales
ountries 2.7%
Our lercanidEurope as wand in some € (thousand
Direct sales
Sales to lice
Total lercan
The reductioto lower sathanks mainlercanidipin Zanipress® iof a fixed cRecordati or
€ (thousand
Direct sales
Sales to lice
Total lercan
This producPharma witCoripren® athe productof over 200Pierre Fabre18.4%. Over17%. In Gemillion, an igroup) as Caof over 60%Portugal, geand in the Cit is co‐marand in Russi Urorec® (sil(BPH, enlargdisorder is
dipine basedwell as in Cene of the afore
s)
s
ensees
nidipine sale
on of direct sles volumes nly to the coe sales, are d
is a specialtycombination r by its licens s)
s
ensees
nidipine+ena
t is availableh the brandsnd Atover® t has achieve%. In Francee under theirrall the prodrmany, Reconcrease of 6armen ACE® %. The lercanenerating saleCzech Repubketed by Mea.
odosin) is a gement of thincreasing w
products arntral and Eaementioned
es
sales is due mas a result ntinuous grodown by 3.0%
y also indicatof lercanid
sees in 23 co
alapril sales
e in Italy as frs Zanipril® arespectively.ed a market se the lercanidr respective bduct has achordati Pharm.4%. The lercand by Mednidipine/enaes of € 4.8 mlic. In Portugeda and by R
new drug inhe prostate).with the age
re sold directstern Europeones co‐mar
mainly to theof generic c
owth of Zanid% as a result
ted for the tripine with euntries.
rom the second Lercaprel. Sales recordshare which dipine/enalapbrands Zanexieved a marma sells Zanicanidipine/ea as Zaneril®lapril fixed c
million (+6.9%gal the produRottapharm/
ndicated for . BPH manifeing of the
11
tly to the mae and in Turrketing agree
201
62,36
52,20
114,57
e lower salescompetition.dip® in Turkeof generic co
reatment of enalapril. Thi
201
33,20
16,12
49,32
ond quarter l® and by coded in 2012 exceeds 39%pril fixed comxtra® and Lerket share of ipress® (lercnalapril fixed®. Overall thiscombination %), in Spain wuct is also so/Madaus. Du
the treatmefests with propopulation,
arket by our key. In the oements are in
12
69
04
73
s in Italy (‐9.6 Direct salesey. Sales to lompetition.
hypertensiois new prod
12
03
22
25
2011 where ‐marketers sby Zanipril®
% in a new mmbination is rcapress®. Saf over 31% incanidipine+end combinatios product is tis also sold
with sales of €ld by Delta (uring 2012 th
ent of the syoblems linkeit is frequen
own marketother marketn place.
2011
70,917
53,801
124,718
6%) and in Frs in the othlicensees, wh
on developeduct is alread
2011
26,485
15,107
41,592
it was launcsigma tau anand Lercapr
market segmemarketed byales of Zanexn a market snalapril), whon is also soldthe leader indirectly by
€ 3.2 million Rottapharm/his specialty
ymptoms of ed to urinationt in men o
ting organizats they are s
Chan2012/20
(8,5
(1,5
(10,1
rance (‐37.1%er countrieshich represe
d by Recordady marketed
Chan2012/20
6,7
1,0
7,7
ched by Recond Polifarma rel® are € 5.5ent which is gy Bouchara Rxtra® are € 10segment whihich recorded by Berlin Cn its class witour marketi(+8.4%), in G/Madaus growas also lau
benign proson and the pover the age
tions in Wessold by licens
nge011
548) (12.
597) (3.
145) (8.
%) principally are up by nt 45.6% of
ati which cond successfull
nge011
718 25
015 6
733 18
ordati and Innwith the br5 million. Ovgrowing at a Recordati an0.2 million, uch is growind sales of €Chemie (Menh a market sng companieGreece, in Ireoup) and in Sunched in Tu
static hyperpprevalence ofe of fifty an
stern sees,
%
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.0)
.1)
y due 1.3% total
nsists y by
%
5.4
6.7
8.6
nova ands verall rate
nd by up by ng by € 8.0 narini share es in eland Spain urkey
plasia f the d its
symptoms sfrom a signifirst week ofor the deveEast and Afrthe brand Uare € 32.7 m2012 of € organization Livazo® (pitaclinical trialsto formatioremoved froreduce the rthe lower lpitavastatinRecordati frcountries asubsidiaries (Rottapharmthe year it w Lomexin® (findicated fogram positiv Flavoxate ismarketed indecreasing s Procto‐GlyvConsumer HRepublic, Slo€ 10.1 millio TransAct® Llocalized paItalian and P Rupatadine Under licensin France (W Kentera® is urinary tractPharmaceut Lopresor® (disorders, i
significantly ificant reducof treatmentelopment andrica. CurrentUrorec® and million. Urore7.7 million.n in Turkey.
avastatin) is s show that pon of atheroom the arterelative risk flikelihood of can be regrom the Japand Turkey. Recordati Em/Madaus) inwas also laun
fenticonazoleor the treatmve bacteria.
s an antispasnternationallyslightly.
enol®, indicaHealth at theovakia, Ukraon.
LAT, a transdain involvingPortuguese m
is a systemise from UriaWystamm®). S
an oxybutynt such as incticals and ma
(metoprolol) n particular
reduce qualiction of symp. Silodosin wd marketing tly the produby licenseesec® is doing p The produ
a novel statipitavastatin osclerotic plarial walls), afor cardiovasf drug‐drug arded as ananese pharmThe drug hEspaña and Jn Portugal. Sched in Swit
e), another oment of dermSales of this
smodic for thy under the b
ated for the e beginning ine, Portuga
dermal patchg the muscumarkets. Sale
ic antihistamach, it is marSales of all b
nin transdermontinence, inarketed in 16
is a well khypertensio
ity of life. Clptoms assocwas originatein the wholeuct is success under the bparticularly wuct was also
n indicated finduces a redaques) and a dual effect scular complinteractions effective anaceutical comas been lauJaba RecordSales generatzerland by o
original Recomatological product for
he treatmenbrands Genu
treatment oof 2011 in tl, the Baltic s
h containingloskeletal syes of this prod
mine indicateketed in Sparands of rup
mal patch inncreased urin6 countries. S
nown selecton and angi
12
inical evideniated with Bed by Kissei (e of Europe (4sfully marketbrand Silodyxwell in Italy, wo launched
for the reducduction in LDan increase that shouldlications. Furs than that nd safe treampany Kowaunched in Spati respectivted in 2012, ur licensee E
ordati produand gynecol2012 are € 1
nt of urinary urin® and Uris
of internal anthe followingstates and Cy
g 40 mg of fystem, obtainduct are € 11
d for the trein (Alergolibatadine in 20
dicated for tnary frequenSales of Kente
tive beta bloina pectoris,
nce shows thPH and an im(Japan) and w45 countriested in 17 coux™. Overall swhere it wassuccessfully
ction of elevaDL‐cholesteroin HDL‐cho
d be regarderthermore, pof most oth
atment of dya for the Europain and in vely, and by including salEli Lilly.
ct, is an intelogical infect12.7 million, u
incontinencspas®. Sales
nd external hg countries: yprus. Sales
flurbiprofen ned under l1.6 million in
eatment of aer®), Italy an012 total € 1
the symptomncy and urgeera® are € 6.
ocker for th, acquired f
hat patients mprovementwas obtaine) and a furthuntries, direcsales of silod launched inin Septemb
ated total anol (the “bad”olesterol (theed as highly presents an eher statins. yslipidemia. opean markePortugal wco‐marketeres to license
ernationally ations causedup 3.3% over
ce, also origiof this produ
hemorrhoids,Poland, Rusin the marke
indicated foicense from n 2012.
allergies and nd Germany 1.6 million.
matic treatmency, obtaine7 million in 2
he treatmentfrom Novart
receiving silot in quality od under liceer 18 countrctly by our sudosin based p May 2011, aber 2012 by
d LDL choles” cholesterole “good” chrelevant, sinexcellent safeThanks to tPitavastatin et, Russia anwhere it is mrs Esteve in ees, are € 16.
and widely ud by fungi, mr the precedi
nated by Reuct in 2012 a
, was acquiressia, Turkey, et of this pro
or the sympAmdipharm
in particular(Rupafin®) a
ent of disordd under licen2012.
t of differenis for the G
odosin beneof life withinnse by Recories in the Miubsidiaries uproducts in 2achieving saly our marke
sterol. Contro that contribolesterol thnce it appeaety profile duthese propewas licensed the other Cmarketed bySpain and D.3 million. Du
used antimycmould, yeast ing year.
cordati, whire € 10.0 mil
ed from NovRomania, C
oduct in 2012
tomatic reliem, is sold on
r allergic rhiand as from 2
ders of the lonse from Wa
nt cardiovascGreek and o
fited n the rdati iddle nder 2012 es in eting
olled butes at is rs to ue to erties d by C.I.S. y our Delta uring
cotic and
ch is llion,
vartis Czech 2 are
ef of n the
nitis. 2010
ower atson
cular other
European mGermany. Our specialtTurkey, in tproducts in(pegademasadenosine dhyperammomain organibuprofen) uarteriosus (porphyria. Dpresence in other diseas The pharma € (thousand
Italy
France
Germany
Turkey
Portugal
Spain
United King
Other West
Russia, Cze
U.S.A.
Other inter
Total pharm
Both years in
ITALY
€ (thousand
Prescription
Self‐medica
Pharmaceu
(a) Prescriptio(b) Self‐medica
The perform
markets. Sale
ties indicatedthe Middle E 2012 total se bovine), indeaminase deonaemia dueic acidaemiaused in the tPDA) and NDuring 2012 sthe U.S.A. wses which wi
aceutical sale
s)
gdom
tern Europea
ch Rep., othe
rnational sale
maceutical s
nclude sales a
s)
n pharmaceu
ation pharma
uticals, Italy
on pharmaceutication pharmace
mance of the
es of this pro
d for the treEast and in t€ 75.9 millindicated for eficiency (SCe to N‐acetylgas (isovalerictreatment ofNormosang® sales of Carbwas reinforcell be markete
es of the Reco
an countries
er C.E.E. cou
es
ales
s well as incom
uticals (a)
aceuticals (b)
cals include boteuticals include
main produc
oduct in 201
atment of rathe U.S.A., aion, an increthe treatmeCID‐ADA deficglutamate syc acidaemia, f a serious co(human hae
baglu® in the ed with the aed by Record
ordati subsid
ntries
me from up‐fr
th reimbursableOTC products a
cts in Italy is
13
12 are € 5.4
are and orphnd through ease of 9.5%nt of severe ciency), Carbynthase deficmethylmaloongenital caremin) indicaU.S.A. grew cquisition ofdati Rare Dise
diaries are br
201
214,69
120,20
70,92
64,81
33,88
33,26
5,58
21,29
76,63
7,35
148,71
797,37
ront payments
201
187,67
27,02
214,69
e and non‐reimband other pharm
the followin
million and
han diseases partners in %. The main combined im
baglu® (cargluciency (NAGSonic acidaemrdiac malforated for theprogressivelf a portfolio oeases Inc..
roken down a
2
7
8
2
5
9
8
3
6
0
4
2
4
s, royalties an
2
6
1
7
bursable drugs.maceuticals not
g:
are generat
are marketeother parts products in
mmunodeficiumic acid), inS deficiency)mia or propiomation, the treatment y reaching $of products f
as follows:
2011
217,660
128,693
66,208
31,027
34,360
31,824
7,636
19,426
54,469
6,070
136,242
733,615
nd miscellaneo
2011
191,819
25,841
217,660
. t requiring a pre
ted mostly i
ed directly alof the worldn this portfoiency diseasendicated for and due to onic acidaempersistence of acute at 7.4 million. for the treatm
Change2012/201
(2,963
(8,485
4,714
33,788
(471
1,444
(2,053
1,870
22,16
1,284
12,470
63,759
ous items.
Chan2012/20
(4,14
1,1
(2,96
escription.
in Greece an
l over Europd. Sales of tolio are Adage associated the treatmeany of the t
mia), Pedea®of patent dutacks of hepIn Decemberment of rare
e 1
3) (1.
5) (6.
4 7
8 108
1) (1.
4 4
3) (26.
0 9
1 40
4 21
0 9
9 8
nge 011
%
43) (2.2
180 4.
63) (1.4
nd in
pe, in hese gen® with nt of hree (i.v. uctus patic r our e and
%
4)
6)
7.1
8.9
4)
4.5
9)
9.6
0.7
1.2
9.2
8.7
%
2)
.6
4)
€ (thousand
Entact®
Peptazol®
Zanedip®/L
Tora‐Dol®
Cardicor®
Rextat®/Lo
Sales of phabasis of comthe launch oindicated foUrorec® (sillaunched inZanedip®/Letreatment o Sales of selfis now our preceding yby 8.3% to Imidazyl® (ewith Imidazthe Dentosa FRANCE
The 2012 rpreceding ydue to comp € (thousand
Methadone
Zanidip®/le
Zanextra®
Hexa line
Neocodion
Urorec®
Sales of Zamedicines tOverall the year. GERMANY
s)
Lercadip®
vinacor®
armaceuticalmparison inclof the lercanor the treatmodosin), at €n the seconercadip®, Toof rare diseas
f‐medication best‐selling ear. Sales of € 6.3 millioneye drops) aryl® maintainan® line of or
evenue realear. The decpetition from
s)
e
ercanidipine
®
anextra® (lero treat wintsales of self‐
hyp
s in Italy areudes up‐fronnidipine+enalment of chro€ 7.7 millionnd quarter ora‐Dol® and ses grow by 2
products in self‐medicatf Alovex™, inn, consolidatre slightly don Recordati’s ral care prod
ized by our crease is to bm generic ver
benign pro
rcanidipine+er maladies ‐medication
Ind
dep
gastric
hypert
heart
percholester
e down by 1.nt payments lapril fixed coonic, stable, n, and of Zanof 2011, arRextat®/Lov
21.3% in Italy
2012 are € 2tion product dicated for ting this prodown while th leadership iucts became
subsidiariesbe attributedrsions of lerca
Indi
drug add
hyperte
hyperte
antiba
ostatic hyper
enalapril), U(the Hexa liproducts in
14
dication
ression
c ulcers
tension
pain
failure
rolemia
.4%, as compof € 5.3 milliombination moderate t
nipril®/Lercapre developinvinacor® arey.
27.0 million, generating
the treatmenduct’s positioose recordedin the eye dre part of our
s in France id mainly to tanidipine. Th
cation
diction
ension
ension
cterial
cough
rplasia
Urorec® (silone of produFrance are €
2012
38,717
20,934
20,114
13,974
12,484
10,001
pared to theion received in Italy in Apo severe heprel® (lercanng positivelye due to gen
up by 4.6%.sales of € 6.nt of oral cavon as a referd for Eumill®rops market,self‐medicat
is € 120.2 mhe sales voluhe following t
2012
23,962
11,565
10,150
8,412
7,026
6,577
odosin) and cts, Neocodi€ 19.6 million
20
37,7
22,08
22,2
14,9
10,8
10,4
e same periofrom our licepril. Cardicoreart failure, inidipine+enay. The decreneric compet
Proctolyn® 4 million, anvity aphthas, rence produc® (single dose, are growingtion product
million, downume reductiotable shows
20
22,4
18,3
8,5
7,9
6,8
3,5
of methadion® and Exon, an increase
11 C2012
35
85 (1
50 (2
15
30
56
d of the preensees durin® (bisoprololis performinlapril), at € ease in saletition. Sales
(treatment on increase ofcontinue to ct for this coe eye drops)g. In the lastportfolio.
n by 6.6% con of Zanidipsales of the
011 C201
497
381
571
947
826
543
one grow somuc®) also e of 7.5% ov
hange/2011
982 2
1,151) (5.
2,136) (9.
(941) (6.
1,654 15
(455) (4.
eceding year.ng 2011 followl), a beta‐blog well and s5.6 million, es of Peptaof drugs for
of haemorrhof 14.2% overgrow and arondition. Sale) which, toget quarter of 2
compared top® (lercanidipmain produc
Change2/2011
1,465
(6,816) (3
1,579 1
465
200
3,034 8
significantly. performed
ver the prece
%
2.6
.2)
.6)
.3)
5.3
.4)
. The wing ocker sales both zol®, r the
oids) r the re up es of ether 2012
o the pine) cts.
%
6.5
37.1)
18.4
5.9
2.9
85.6
The well. eding
Sales generayear. The fo
€ (thousand
Claversal®
Zanipress®
Ortoton®
Recosyn®/S
Mirfulan®
Lipotalon®
Corifeo®
Sales grow(lercanidipinFurthermoreOverall, thepreceding ygrowing in t TURKEY
Sales in Tupharmaceutduring 2012products arsales growt(silodosin) a
PORTUGAL
Revenue gecontraction license and € (thousand
Prescription
Self‐medica
Zanipress® (well as wellPortuguese
ated by our sollowing table
s)
Suplasyn®
wth in Germne+enalapril)e, the six sele sales of seyear, also asthis market (+
urkey more tical compan2 and the rere already avh of 34.2%, and Zanipress
enerated by of the Portdecreasing Z
s)
n pharmaceu
ation pharma
(lercanidipine as Livazo® (product port
subsidiaries ie shows sales
a
many is to ), Ortoton® lf‐medicationelf‐medicatios a result of +5.2%).
than doublny Dr. F. Frik esulting comvailable on tand Procto‐s® (lercanidip
our subsidiauguese pharZanidip® (lerc
uticals
aceuticals
e+enalapril),(pitavastatin)tfolio.
in Germany as of the main
Indica
ulcerative c
hyperten
muscle rela
muscolo‐ske
healing ointm
nti‐inflamma
hyperten
be attribu(metocarb
n products acon products f the produc
ed followingİlaç and are
mpany is nowthe market aGlyvenol®, apine+enalapr
aries in Portrmaceutical canidipine) sa
, with sales g), launched d
15
are € 70.9 mn products.
ation
olitis
nsion
axant
eletal
ment
atory
nsion
uted mainly amol), Coricquired in Apin Germanycts acquired.
g the acquiof € 64.8 miw denominaand they repacquired durril) were laun
ugal is € 33market and ales (‐31.4%)
201
31,45
2,43
growing by 6during 2011
illion, an inc
2012
14,585
7,971
6,434
5,854
5,087
5,018
4,996
to the gofeo® (lercanpril were addy are € 12.9 Sales of th
sition in thillion. Yeni Rated Recordapresent 23% ing 2011, arnched.
.9 million, ddue to the ).
12
51
38
.9%, and Uroand already
rease of 7.1%
201
15,17
7,49
5,81
6,36
5,32
5,24
3,66
ood sales pnidipine) anded to the pmillion, an e treatment
e last quartecordati andati İlaç. In Tof sales. Le
re performin
down by 1.4%termination
2011
31,923
2,437
orec® (silodothe third m
% compared
11 Ch2012/
77
91
19
60
26
44
61
performancend Lopresorroduct portfincrease of ts for rare d
ter of 2011d Dr. F. Frik İTurkey Recorercadip® (lercg well. Durin
% mainly duof the Star
Chan2012/20
(4
osin) (+42.2%ost importan
to the prece
hange/2011
(592) (3.
480 6
615 10
(506) (8.
(239) (4.
(226) (4.
1,335 36
e of Zaniprr® (metoprofolio in Germ30.6% over
diseases are
1 of the Tulaç were merdati’s corpocanidipine), ng 2012 Uro
ue to the ovlix® (nateglin
nge011
472) (1.
1 0
%) are performnt product in
eding
%
.9)
6.4
0.6
.0)
.5)
.3)
6.5
ress® olol). many. r the also
rkish erged orate with orec®
verall nide)
%
.4)
0.0
ming n the
SPAIN Revenues inperformanc(pitavastatin
€ (thousand
Cidine®
Livazo®
Urorec®
Zanipress®
Dermatran
Zanidip®/le
UNITED KIN
Sales in thesignificantlylatter now r
OTHER WES
Sales in othnumber of cmillion, maPharmaceut(metoprolola licensee.
RUSSIA AND Revenue geis € 50.6 miindicated foproducts Pr(lercanidipinFurthermoresales of € 2rendered to Sales genercompared toUrorec® (silo Recordati Pwas acquirecompany La
n Spain are €e of Urorecn) launched i s)
s®
ercanidipina
GDOM
United Kingy due to the crepresent 68.
STERN EUROP
her countriescountries forainly generaticals of € 8.l), and of Uro
D OTHER CEN
nerated in Rllion, up 37.2or the treatmocto‐Glyvenone+enalapril)e, in Novemb2.6 million io third parties
ated by Hero the precedodosin) launc
olska starteded in Augustabormed. Alt
€ 33.3 million® (silodosin)in the second
hy
benign p
gdom are € 5competition .6% of the Br
PEAN COUNT
s in Westernr a total of €ted by Zan0 million. Saorec® (silodo
NTRAL AND E
Russia and in 2% over the ment of gyneol®, Lomexin) have alreber 2012 a pin the last ms for a total o
bacos Recording year thached during
d to market t as well as ogether, sale
n, up by 4.5%) and of Zand quarter 201
Ind
gastropro
ypercholeste
prostatic hype
hyper
hyper
5.6 million afrom genericritish busines
TRIES
n Europe com 11.1 millionidip® (lercaales in Greecosin) and of t
ASTERN EUR
the other copreceding yeecological inn® (fenticonaady been lportfolio of fimonth of thof € 3.1 millio
rdati in the Cnks to the go2011.
Procto‐Glyva portfolio
es in Poland d
16
% comparednipress® (ler11.
dication
okinetic
rolemia
erplasia
rtension
angina
rtension
nd consist mc versions, anss.
mprise sales n (+13.7%), snidipine), ace grow by 1the re‐launch
ROPEAN COU
ountries withear. The bestnfections, whazole), Uroreaunched in ive OTC prodhe year. Reon.
Czech and Slood perform
venol® in 20of productsduring 2012
d to the precrcanidipine+e
2012
10,072
5,851
3,738
3,190
2,299
2,122
mainly of salend of produc
of productsales in Irelannd sales in 10.2% thanksh of Lomexin
UNTRIES
hin the Commt selling prodhich recordec® (silodosinRussia gen
duct lines waevenues incl
ovak Repubmance of Proc
12. Furtherms which wereare € 6.9 mil
ceding year menalapril) as
201
10,25
1,79
2,74
2,94
2,46
3,07
es of lercanicts for the tre
s for the treand recorded Greece re
s to the goo® (fenticona
monwealth oduct in this ad sales of €n), Zanidip® (nerating inits acquired inude pharma
lics are € 14cto‐Glyvenol
more, the Poe marketed llion.
mainly due twell as to
11 C2012
50
91
41
43
68
70
dipine, whiceatment of ra
atment of raby Recordatported by Rod performanzole) previou
of Independearea is Tergyn 22.1 million(lercanidipinetial sales ofn this marketaceutical pro
4.5 million, a®, Kentera®
olish companin Poland b
o the good ssales of Liv
hange/2011
(178) (
4,060
997 3
247
(169) (
(948) (3
h are decreaare diseases.
are diseases ti Ireland of €Recordati Hnce of Lopreusly sold thro
ent States (Cnan®, a medn. The corpoe) and Coripf € 3.7 milt which recoomotion serv
a growth of (oxybutynin)
ny Farma‐Proby the Roma
sales azo®
%
1.7)
n.s.
36.4
8.4
6.8)
0.9)
asing . The
in a € 2.2 ellas esor® ough
C.I.S.) icine orate ren® llion. rded vices
1.9% ) and
ojekt anian
In RomaniaLomexin® (fmillion. Sales in thesto € 2.3 mill UNITED STA The group’streatment oacid), indicaFood and Drights pertaThe main pintermittentI.V. (indomeinfants, and OTHER INTE Other internagreementsproducts, Boexport sales € (thousand
Sales to int
Bouchara R
Orphan Eur
Other incom
Total
Sales to int(+34.9%) andirectly. Salethe good sfenticonazofollowing ththe market f Sales outsidperformancand in Africa Sales of our
a our subsidfenticonazole
se markets oion and grow
ATES OF AME
s pharmaceuof rare diseaated for the trug Administining to a poproduct is Pt porphyria. ethacin inject Cosmegen®
ERNATIONAL
national sales and exportouchara Recos realized by
s)
ernational lic
Recordati (ex
rope (sales to
me
ernational lind pitavastates of the fixesales performle are slighthe terminatiofrom generic
de France bye of the proda.
r treatments
diary Recorde) and Proct
of the speciaw by 47.3%.
ERICA
tical businesases. Sales intreatment oftration (FDA)ortfolio of treanhematin® Other importion), indicat (dactinomyc
SALES
es comprise ts. Included ordati’s expoOrphan Euro
censees
xport sales)
o licensees a
icensees groin (+66.6%) ted combinatmance of otly down (‐3on of the licec versions of
y our Frenchduct portfoli
for rare dise
dati Românito‐Glyvenol®
lty products
ss in the U.Sn 2012 are €f acute hype) at the end eatments for (haemin fo
rtant drugs ated to close acin for inject
revenues geare the saleort sales, excope worldwid
nd exports)
ow by 5.9% tto co‐markeion of lercanour proprieta3.6%) as in sensee agreemthe molecule
subsidiary Bo sold mainl
eases in coun
17
ia started s during 201
indicated fo
S.A. is dedica€ 7.4 million rammonaemof 2010. In Jrare and othr injection) cquired are a clinically sigion) used ma
enerated by tes to and otcept those gede excluding
thanks to thters and to lnidipine and eary active isome markements. Sales e (‐2.6%).
Bouchara Rey in the Mag
ntries where
elling the c1. Altogethe
or the treatm
ated exclusivand consist
mia associateanuary 2013her diseases, for the ameNeoProfen® gnificant patainly in the tr
the Group’s ther revenueenerated in tthe U.S.A..
2012
94,752
31,704
12,166
10,090
148,712
he sales perflicensees in cenalapril incngredient flets sales areof lercanidip
ecordati are ghreb area an
e Orphan Eur
corporate prer, sales reco
ment of rare a
ely to the mt of revenued with NAGS3 the acquisitsold mainly elioration of(ibuprofen lent ductus areatment of
internationaes from our he C.I.S. whi
20
89,4
27,0
9,8
9,8
136,2
formance of countries whrease by 7.1%avoxate (+4now made
pine are dow
up by 17.4%nd in the oth
rope does no
roducts Uroorded during
and orphan
marketing of s from CarbS deficiency, tion from Luin the U.S.A.f recurrent ysine injectioarteriosus (PDthree rare ca
al business tlicensees foch are stated
011 C2012
496
005
859
882
242 1
f the new prhere Recorda%. We also w4.7%). Sales directly by
wn due to the
% mainly thaher ex‐French
ot have a dir
orec® (silodog 2012 are €
diseases am
products forbaglu® (cargluapproved byndbeck LLC o., was concluattacks of aon) and IndoDA) in premaancers.
through licenor our corpod separately,
Change2/2011
5,256
4,699 1
2,307 2
208
12,470
roducts silodati is not prewish to undeto licenseeour subsidiae competitio
anks to the gh colonies in
ect presence
osin), € 2.3
ount
r the umic y the of all uded. acute ocin® ature
nsing orate , and
%
5.9
17.4
23.4
2.1
9.2
dosin esent erline es of aries n on
good Asia
e are
growing by 2 Other incomunchanged c
PHARMACE
€ (thousan
Italy
Europe (It
America
Australasi
Africa
Total
Sales of ph(Latina, Italymainly for twell as to a
23.4%. Sales
me refers to compared to
EUTICAL CH
nds)
taly excluded
ia
armaceuticay) plant, incrhe products positive fore
of Carbaglu®
royalties ano the precedi
HEMICALS
d)
al chemicals,rease by 8.9%verapamil, m
eign exchang
® generated
d up‐front ping year.
2012
2,797
11,040
9,027
6,178
1,901
30,943
which com% as comparmebeverine,e effect.
18
in the U.S.A.
payments rel
%
9.0
35.7
29.2
20.0
6.1
100.0
mprise activeed to 2011, papaverine,
. are exclude
ated to licen
2011
3,166
9,985
9,168
5,131
971
28,421
substances mainly due t, dimenhydri
ed because re
nse agreeme
1
%
6 11.1
5 35.1
8 32.3
1 18.1
1 3.4
1 100.0
produced ito a significainate, acyclo
eported sepa
ents and rem
Cha 2012/2
(
1
(
1
2
n the Campnt increase i
ovir and diph
arately.
main substant
ange2011
369) (11.
,055 10
141) (1.
,047 20
930 95
,522 8
poverde d’Apin sales voluenhydramin
tially
%
.7)
0.6
.5)
0.4
5.8
8.9
prilia mes, e, as
HEALTH, The Recordapriorities. Company poand health managemenconstantly r In order to dCompany hManagemeninvolved. The followinmanagemenchemicals amaintenancappropriateanalyzes injindustrial acapproach toof complianimprovemen Risk assessmfactors alonreduce the ractivity, it rein progress, Training, infmatters relaensure adeqattention plcaused by hinformationremote train Maintenancmaintenanc Out‐sourcinthat the conreduce, andnormal oper
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AND ENV
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characteristsafety and tarmaceutical s, environmmeasures a
accidents thaperiodically ement of heavarious nationagement of
principal toorelative measealth and safequence of tncludes asse
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FINANCI INCOME ST The followinversus 2011 € (thousand
Revenue
Cost of sale
Gross profi
Selling expe
R&D expen
G&A expen
Other incom
Operating i
Financial in
Pretax inco
Provision fo
Net income
Attributabl
Equity hold
Minority in
In 2012 inte73.5% of tot
€ (thousan
Europe (Ita
Australasia
Africa
America
Total
Gross profitthe lower pr Selling expeTurkey, Russ R&D expens
IAL REVIE
TATEMENT
ng table show1:
s)
es
it
enses
nses
nses
me (expense
income
ncome (expen
ome
or income ta
e
e to:
ders of the pa
terests
ernational retal revenue.
nds)
aly excluded
a
is € 534.8 mroportion of
enses increassia and Polan
ses, at € 63.4
EW
ws the profit
e), net
nse), net
xes
arent
venues went Their breakd
)
million with a lercanidipine
se by 7.9% cond.
4 million, an
and loss acc
2
828
(293,
534
(250,
(63,
(45,
(8,
166
(6,
160
(41,
118
118
t from € 540down by geo
margin of 64e sales to tot
ompared to
increase of
21
counts, includ
2012 %reven
8,317 10
,557) (35
4,760 6
,566) (30
,407) (7
,486) (5
,337) (1
6,964 2
,626) (0
0,338 1
,841) (5
8,497 1
8,484 1
13
0.4 million toographic area
5
4
60
4.6% on saletal sales.
the precedin
13.3% as co
ding their ex
% of nue
00.0 76
5.4) (259
64.6 50
0.3) (232
7.7) (55
5.5) (45
1.0) (5
20.2 16
0.8) (3
19.4 16
5.1) (43
14.3 11
14.3 11
0.0
o € 608.4 mila is shown in
2012
08,218
40,614
30,366
29,221
08,419
s, a reductio
ng year main
mpared to 2
pression as a
2011reve
2,036 1
9,977) (3
2,059
2,160) (3
5,956)
5,386)
5,080)
3,477
3,465)
0,012
3,566)
6,446
6,434
12
lion, an increthe table be
%
83.5
6.7
5.0
4.8
100.0
on compared
nly due to th
2011 mainly d
a percent of s
% of enue
Ch2012/
100.0 66
34.1) (33,
65.9 32
30.5) (18,
(7.3) (7,
(6.0) (
(0.7) (3,
21.5 3
(0.5) (3,
21.0
(5.7) 1
15.3 2
15.3 2
0.0
ease of 12.6%elow:
20
451,7
37,7
26,8
24,0
540,4
to the prece
e new marke
due to the u
sales and cha
ange /2011
6,281 8
,580) 12
2,701 6
,406) 7
,451) 13
(100) 0
,257) 64
3,487 2
,161) 91
326 0
1,725 (4
2,051 1
2,050 1
1 8
%, and repre
011
787 8
776
822
048
433 100
eding year du
eting activiti
up‐front paym
ange
%
8.7
2.9
6.5
7.9
3.3
0.2
4.1
2.1
1.2
0.2
.0)
1.8
1.8
8.3
esent
%
3.6
7.0
5.0
4.4
0.0
ue to
es in
ment
of € 5.0 mill Overall, labincreases by Personnel a
Employees
Average a
Average s
Labor prod
Labor cos
Sales per
Value add
Labor cost in(a) Data per 2011.
The strengtcoordinationand developwere made Other expenmedicines aacquisitionsportfolio ofrestructurin Net financiaindebtednes The effectiv Net income
FINANCIAL The net fina55.7 million
ion to Erytec
or cost in 2y 4.7%.
nd other hum
s at year‐end
age
service (years
ductivity:
st on net sale
employee (€
ded per emp
ncludes wagesemployee for
hening of oun of the forepment represfor the train
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POSITION
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27
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28
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comply withe rules and ron and contipment, planh surveillanceficates requirplant, locateNorske Veritonfirmed wit
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and confiden
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th adequate
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ere to have s
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and put ou
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order to p
on (supply an
sses resulting
erty” insuran
as indirect d
h environmeegulations, tnuous monitt, the worke, security vired by law. Ied at Campotas, Italy) of h certificatio
security
nd the nece
web and ne
ntiality of th
rantee effec
ty system wh
re, the activ
cal and logic
edients and
th internatio
ting Proced
by national
e structures
s is carried o
rules in forc
sses success
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ignificant or
mits and licen
or energy –c
e effects of
in place (thro
ut fires) and
nts. Furtherm
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promptly ide
nd/or produc
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ce policies w
damages (suc
ental, health the Group hatoring as regkplace, chemigilance, worIn particular,overde di Apcompliance on for the UN
ssary connec
etworks) exp
e data as we
ctive operati
hich ensures
ve safety of
c nature, of
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and
and
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ch as
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poses
ell as
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s the
f the
both
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Penetration
be adequate
FINANCIAL Credit Risk Credit risk obligations. customer an Interest RatThe Group rfluctuation therefore afrate fluctuafinancial inspolicy, combrates.
Foreign CurrThe Group oother than results and higher exposignificant pcontracts en Liquidity RisThe liquidityongoing busdetermine tinvestmentsinvestmentsplentiful lineand conditiorespectivelybelieves thafinancing acdebts at the
LEGAL AND Risks associa
Despite care
sector, the G
those poten
under devel
d clients. Fin
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RISKS
is exposureThe Group nd an interna
e Risk raises funds of market inffecting the Gtions by estastruments fobined with th
rency Risk operates in aeuro. It is ththe value o
osure to tradepart of finanntered into fo
sk y risk to whisiness and fothe Group’s s, and on ths and marketes of credit gons of the Gy, short‐termat the fundsctivities, are eir natural du
D COMPLIAN
ated with pro
eful complia
Group could
ntial liabilitie
lopment. The
nally, the co
sis. The outco
d.
e to potenticlosely contal reporting s
using debt anterest rateGroup’s net ablishing fixer the sole puhe low level
an internatioherefore expof its equity.e transactionncial assets aor the sole p
ch the Grouor the develoliquidity are
he other, thet conditions. granted by aGroup’s loanm financial invs and credit enough to saue dates.
NCE RISKS
oduct liability
nce with sta
be exposed
es, the Grou
e maximum l
ompany is p
ome of this a
ial losses rerols its credsystem.
nd invests exs influences financial chaed interest lourpose of miof net debt,
onal context posed to risk The diversins in foreign and liabilitieurpose of he
p may be exopment of itse, on the one expiry and The Group
a number of s and its finvestments, clines currenatisfy investm
y
andards and
to risks of cla
p has taken
liability limits
29
periodically
analysis has
esulting fromit exposure t
xcess cash inthe cost an
arges. The Goans or variainimizing suc limits the G
and has asseks of foreignfication stracurrency wis denominatedging and no
xposed is the industrial anne hand, thed renewal tehas at its disleading Italiaancial assetscash and cashntly availablement needs,
regulations,
aims for dam
out insuran
s are conside
submitted t
always show
m commercithrough the
n money marnd returns oGroup’s policable interestch fluctuatioGroup’s expos
ets and transn currency flategy enacteth respect toted in foreigot for specul
e inability to nd commerce cash genererms of debsposal liquidian and interns are set outh equivalente, in addition, working cap
, like any com
mages caused
nce policies t
ered adequat
to VAPT (Vu
wn the comp
al counterpallocation o
rket and otheof the debt cy is to limit t loans perfens and not fsure to the r
sactions denouctuations wd by the Gro the Group’gn currency ation.
raise sufficieial activities.rated or absbt or the degity readily avnational finat in notes 17s, loans and n to those gpital require
mpany oper
d by its pharm
to cover all t
te and are co
ulnerability
any’s inform
arties failingof credit limi
er financial inand investmthe risk arisiectly hedgedor speculatiorisk of fluctua
ominated in which can afroup results s business voare hedged
ent financial The two maorbed by opgree of liquvailable for itancial institut7, 20 and 29bank overdr
generated byments and t
ating in the
maceuticals.
the products
onstantly mo
Assessment
mation system
g to meet tts to each s
nstruments. ment instruming from inte using derivaon. This hedations in inte
foreign currffect is operain a progresolume. The mwith derivat
resources foain factors wperations anidity of finats operationstions. The te9 which addrafts. The Gy operations he repaymen
pharmaceut
In order to m
s marketed
onitored.
and
ms to
their ingle
The ments erest ative dging erest
ency ating ssive most tives
or its which d by ncial s and erms ress, roup and nt of
ticals
meet
and
Risks associa
All operatin
compliance
national an
pharmaceut
drug promo
continuousl
constantly t
administrati
and Contro
legislation.
Risks associa
It is always
these cases
financial res
liabilities is g
ated with com
ng and mark
with the leg
nd internatio
tical research
otion activitie
y informed o
to ensure th
ive liability o
ol Model” th
ated with leg
possible tha
s the Group
sults. A deta
given in note
mpliance
keting activit
islation and
onal technic
h and develo
es, the Group
of those rule
hat they are
of legal entit
hat is contin
gal action
at the Group
may be cal
iled descript
es 27 and 36
ties perform
regulations t
cal standard
opment, prod
p has formul
s and monito
properly ob
ies, the Italia
nuously upd
p may be req
led upon to
tion of litigat
to the financ
30
med by the G
that apply in
ds that app
duction, distr
ated a set of
oring, both i
bserved. In c
an companie
dated to com
quired to me
o pay extrao
tion in progr
cial statemen
Group, both
the geograp
ply to the p
ribution and
f ethical rule
nternally and
compliance w
es in the Gro
mply with t
eet costs res
ordinary cost
ress and the
nts.
in Italy and
phical areas in
pharmaceuti
promotion. A
es of conduct
d by indepen
with Legislat
oup have an
he latest am
ulting from
ts with cons
relative pro
d abroad, a
n which it op
icals sector
As concerns
t. All compa
ndent certifie
ive Decree 2
“Organisatio
mendments
litigation of
sequences fo
visions made
re performe
perates, inclu
which regu
the regulatio
ny personne
ers, is perfor
231/2001 on
on, Managem
to the rele
various type
or operating
e to meet fu
ed in
uding
ulate
on of
el are
rmed
n the
ment
evant
es. In
and
uture
SUBSEQ
On 18 Januarare and othThe value of On 12 Februtargets are income of m1.075 milliomillion in 20 Group consowhole year. Milan, 7 Ma Giovanni ReChairman an
QUENT EV
ary 2013 theher diseases f the transac
uary 2013 theto achieve s
more than € n, operating015.
olidated sale
arch 2013
ecordati nd Chief Exec
VENTS AN
e acquisition and marketection is of $ 1
e company psales of mor128 million. income of b
es during the
cutive Office
ND BUSIN
of all rights ed mainly in 100 million of
presented itse than € 920Objectives inbetween € 21
e first two mo
r
31
NESS OUT
concerning athe United Sf which $ 80
financial tar0 million, opn the busines10 and € 220
onths of 201
TLOOK
a portfolio ofStates of Amemillion were
rgets for 201perating incoss plan are to0 million and
13 are in line
f products inerica, from Le paid at the
3 and its busome of moreo achieve sad net income
with the com
ndicated for tundbeck LLCclosing.
siness plan toe than € 185les of betweof between
mpany’s exp
the treatmenC. was conclu
o 2015. For 25 million anden € 1.025 a€ 140 and €
pectations for
nt of uded.
2013, d net and € € 150
r the
CONSOL Recordati S.Consolidate The consolid(IAS) and thStandards B(IFRIC) prevEuropean Ustandards w
LIDATED
.p.A and Subd Financial S
dated finanche InternatioBoard (IASB) viously nameUnion’s guidewere used in t
FINANCIA
sidiaries Statements a
cial statemennal Financialand the inteed Standing elines on ththe preparat
AL STATE
t and for the
nts are presel reporting Strpretations oInterpretatioe preparatiotion of the fin
32
EMENTS
e year ended
ented in accotandards (IFRof the Internons Committon of consonancial state
31 Decembe
ordance withRS) issued orational Finantee (SIC). Thlidated finanments at 31
er 2012
h the Internar revised by ncial Interprehe financial ncial statemDecember 2
ational Accouthe Internatetation Repostatements ents. The s2011.
unting Standional Accounorting Commcomply withsame accoun
dards nting ittee h the nting
RECORDATCONSOLIDA INCOME ST€ (thousands
Revenue
C
Gross profit
S
R
G
O
Operating in
F
Pretax incom
P
Net income
A
E
M
Earnings pe
Basic
Diluted
Earnings per in 2011, net oDiluted earni
TI S.p.A. ANDATED INCOME
TATEMENT )
Cost of sales
t
Selling expen
R&D expense
G&A expense
Other income
ncome
Financial inco
me
Provision for
Attributable t
Equity holder
Minority inte
r share
share (EPS) arof average trengs per share
D SUBSIDIARE STATEMEN
nses
es
es
e (expense),
ome (expens
income taxe
to:
rs of the pare
erests
re based on aveasury stock w is calculated
RIES NT FOR THE Y
net
e), net
es
ent
verage shareswhich amountetaking into ac
33
YEAR ENDED
s outstanding ed to 9.402.94count stock o
31 DECEMBE
N
during each y48 shares in 20ptions granted
ER 2012
ote
3
4
4
4
4
4
5
6
ear, 199,722,2012 and 9,755d to company
2012
828,317
(293,557)
534,760
(250,566)
(63,407)
(45,486)
(8,337)
166,964
(6,626)
160,338
(41,841)
118,497
118,484
13
€ 0.593
€ 0.560
208 in 2012 a5,614 shares iny personnel.
201
762,03
(259,977
502,05
(232,160
(55,956
(45,386
(5,080
163,47
(3,465
160,01
(43,566
116,44
116,43
1
€ 0.58
€ 0.55
nd 199,369,54n 2011.
11
36
7)
59
0)
6)
6)
0)
77
5)
12
6)
46
34
12
84
56
42
RECORDATCONSOLIDA ASSETS € (thousands
Non‐current
P
I
G
O
O
D
T
Current asse
I
T
O
O
F
S c
T
Total assets
TI S.p.A. ANDATED BALANC
)
t assets
Property, pla
ntangible ass
Goodwill
Other investm
Other non‐cu
Deferred tax
Total non‐cu
ets
nventories
Trade receiva
Other receiva
Other curren
Fair value of
Short‐term ficash and cash
Total current
s
D SUBSIDIARCE SHEET AT
nt and equip
sets
ments
urrent assets
assets
rrent assets
ables
ables
t assets
hedging deri
nancial invesh equivalent
t assets
RIES 31 DECEMBE
pment
ivatives (fair
stments, s
34
ER 2012
value hedgee)
Note 31
7
8
9
10
11
12
13
14
15
16
20
17
December 2012
59,972
231,470
413,213
6,925
3,788
22,837
738,205
126,388
155,359
24,983
2,164
1,371
38,418
348,683
1,086,888
31 Decembe201
55,39
149,64
365,71
1,97
1,28
22,49
596,51
108,25
141,23
21,31
3,19
1,79
105,16
380,94
977,46
er11
97
49
19
77
82
94
18
51
31
11
98
91
64
46
64
RECORDATCONSOLIDA EQUITY AN€ (thousands
Shareholde
S
A
T
H
T
O
R
N
I
G
M
S
Non‐current
L
S
D
O
T
Current liab
T
O
T
O
P
F
L
B
T
Total equity
TI S.p.A. ANDATED BALANC
ND LIABILITIE)
rs’ equity
Share capital
Additional pa
Treasury stoc
Hedging rese
Translation re
Other reserve
Retained ear
Net income f
nterim divid
Group shareh
Minority inte
Shareholders
t liabilities
Loans – due a
Staff leaving
Deferred tax
Other non‐cu
Total non‐cu
bilities
Trade payabl
Other payabl
Tax liabilities
Other curren
Provisions
Fair value of
Loans – due w
Bank overdra
Total current
y and liabiliti
D SUBSIDIARCE SHEET AT
ES
aid‐in capital
ck
erve (cash flo
eserve
es
nings
for the year
end
holders’ equ
erest
s’ equity
after one yea
indemnities
liabilities
urrent liabilit
rrent liabilit
es
les
t liabilities
hedging deri
within one ye
afts and shor
t liabilities
ies
RIES 31 DECEMBE
ow hedge)
uity
ar
ies
ies
ivatives (cash
ear
rt‐term loans
35
ER 2012
h flow hedge
s
e)
Note 31
18
19
20
21
22
23
24
25
26
27
28
20
29
December 2012
26,141
83,719
(46,254)
(4,983)
(3,713)
26,326
501,701
118,484
(40,077)
661,344
53
661,397
129,111
17,862
15,872
1,828
164,673
106,926
53,984
9,789
458
20,544
4,983
8,147
55,987
260,818
1,086,888
31 Decemb201
26,14
83,71
(53,21
(4,22
(8,23
26,60
445,74
116,43
(38,52
594,44
4
594,48
137,51
16,69
6,04
2,06
162,32
98,67
58,33
12,09
34
21,81
4,22
11,61
13,55
220,66
977,46
er11
41
19
5)
7)
2)
00
45
34
5)
40
40
80
18
92
49
62
21
78
35
91
48
13
27
16
55
63
64
€
N
I
C
€
B
Ain
‐
‐
Cs
P
S
In
O
Ct
B
Ain
‐
‐
Cs
S
In
O
Ct
B
RECORDATSTATEMENT € (thousands)
Net income f
G
G
O
Income and
Comprehens
A
E
M
RECORDATCONSOLIDA
€ (thousands)
Balance at 31.12
Allocation of 201ncome:
Dividends
‐ Retained earn
Change in the rehare based pay
Purchase of own
Sale of own shar
nterim dividend
Other changes
Comprehensive he year
Balance at 31.12
Allocation of 201ncome:
Dividends
‐ Retained earn
Change in the rehare based pay
Sale of own shar
nterim dividend
Other changes
Comprehensive he year
Balance at 31.12
TI S.p.A. ANDT OF COMPR
for the year
ains/(losses)
ains/(losses)
Other gains/(l
expense for
sive income f
Attributable t
Equity holder
Minority inte
TI S.p.A. ANDATED STATEM
2.2010
10 net
ings
eserve for yments
n shares
res
d
income for
2.2011
11 net
ings
eserve for yments
res
d
income for
2.2012
D SUBSIDIAREHENSIVE IN
) on cash flow
) on translati
losses)
the year rec
for the year
to:
rs of the pare
rests
D SUBSIDIARMENT OF CHA
Share capital
Add.paid‐icapita
26,141 83,71
26,141 83,71
26,141 83,71
RIES NCOME FOR T
w hedges
on of foreign
cognized dire
ent
RIES ANGES IN GR
n al
Treasury stock
Hr
19 (52,579)
(15,872)
15,236
19 (53,215)
6,961
19 (46,254)
36
THE YEAR EN
n financial sta
ectly in equit
OUP SHAREH
Hedging reserve
Transrese
(4,299)
72 (7
(4,227) (8
(756)
(4,983) (3
NDED 31 DEC
atements
ty
HOLDERS’ EQ
slation erve
Other reserves
(592) 25,733
(548
7,640) 1,415
8,232) 26,600
1,259
4,519 (1,533
3,713) 26,326
EMBER 2012
11
(
12
12
QUITY
sRetained earnings
3 389,284
53,958
8) 2,289
227
(13)
5
0 445,745
56,632
9 624
(1,325)
25
3)
6 501,701
2
2012
18,497
(756)
4,519
1,533)
2,230
20,727
20,714
13
Net income for the year
Indi
4 108,571
(54,613)
8 (53,958)
9
7
(
)
116,434
5 116,434 (
(59,802)
2 (56,632)
4
)
(4
5
118,484
1 118,484 (4
201
116,446
72
(7,640
1,415
(6,153
110,293
110,28
12
nterim ividend
Mino‐rity in‐terest
0 28
38,525)
12
38,525) 40
38,525
40,077)
13
40,077) 53
1
6
2
0)
5
3)
3
1
2
Total
8 576,006
(54,613)
1,741
(15,872)
15,463
(38,525)
(13)
2 110,293
0 594,480
(21,277)
1,883
5,636
(40,077)
25
3 120,727
3 661,397
RECORDATCONSOLIDA€ (thousands)
Operating acti
Cas
Net
Dep
Am
Wri
Tot
(Inc
Incr
Incr
Cha
Tra
Inve
Oth
Tra
Tax
Oth
Pro
Cha
Net
Investing activ
Net
Net
Net
Net
Net
Net
Financing activ
Me
Net
Re‐
Cha
Effe
Oth
Div
Cha
Net
Changes in sho
Sho
Sho
* Includes cas(1) Acquisition
liabilities 9,918Goodwill (16,0(2) Acquisition
(64,933), Med(15):Change in
TI S.p.A. ANDATED CASH FL
ivities
sh flow
t Income
preciation of pr
ortization of int
ite‐down of ass
tal cash flow
crease)/decreas
rease/(decrease
rease/(decrease
nges in workin
de receivables
entories
her receivables
de payables
x liabilities
her payables an
ovisions
anges in workin
t cash from ope
vities
t (investments)/
t (investments)/
t (increase)/dec
t (increase)/dec
t (increase)/dec
t cash used in in
vities
edium/long term
t financial posit
‐payment of loa
ange in Treasury
ect of applicatio
her changes in e
idends paid
ange in translat
t cash from/(us
ort‐term financ
ort‐term financi
ort‐term financi
sh and cash equof Accent (66,78. Acquisition 094), Medium aof Dr. F. Frik Il
dium and long‐n purchase price
D SUBSIDIARLOW STATEM
roperty, plant an
tangible assets
sets
se in deferred ta
e) in staff leavin
e) in other non‐
g capital
and other curre
d other current
ng capital
erating activitie
/disposals in pr
/disposals in int
crease in equity
crease in other
crease in other
nvesting activit
m loans
ion of acquired
ans
y stock
on of IAS/IFRS
equity
ion reserve
sed in) financing
cial position
al position at b
al position at e
uivalents net of 707): Working of Farma‐Projend long‐term lolaç (63,860): Wterm loans 12,e (15).
RIES MENT FOR TH
nd equipment
ax assets
ng indemnities
‐current liabiliti
ent assets
t liabilities
es
operty, plant an
tangible assets
y investments
equity investme
non‐current rec
ties
companies
g activities
eginning of yea
nd of period *
bank overdraftcapital (6), Fixeekt (15,497): Woans 6, DeferredWorking capital ,305, Terminat
37
HE YEAR END
es
nd equipment
ents
ceivables
ar *
ts and short‐tered Assets (49,64
Working capital (d tax assets (34(3,549), Cash aion indemnity
DED 31 DECEM
rm loans. 42), Goodwill ((1,077), Cash a8). and cash equivaand other ben
MBER 2012
(1
(1
26,976), Deferrnd cash equiva
alents 10,905, nefits 35. Acqu
2012
118,497
8,786
15,961
2,045
145,289
6
1,170
(329)
146,136
(11,447)
(16,856)
(2,379)
5,463
(2,332)
(4,564)
(1,269)
(33,384)
112,752
(13,322)
(49,546)
(82,204) (1)
(4,948)
(2,506)
152,526)
0
(2,695)
(11,462)
5,636
350
25
(61,354)
96
(69,404)
109,178)
91,609
(17,569)
red tax assets (alents 2,694, Fix
Fixed assets (1isition of FIC a
2011
116,446
10,529
13,736
0
140,711
(2,273)
(2,602)
1,806
137,642
(6,866)
(18,220)
9,279
(3,902)
1,363
2,368
(204)
(16,182)
121,460
(9,647)
(34,572)
(63,875)(
(5)
1,221
(106,878)
44,743
(10,905)
(21,912)
(409)
3,156
(13)
(93,138)
(2,669)
(81,147)
(66,565)
158,174
91,609
(1), Deferred taxed assets (678
8,623), Goodwand FIC Médica
(2)
ax 8),
ill al
RECORDATNOTES TO TFOR THE YE
1. GENER The cosubsidiconsoliattachm During the yeaobject in 2011subjectthe faiconsolieffect othe maaccounincludecompanDr. F. Fİlaç A.Şİlaç A.Şin the 2reorganMédica These feuro un
2. SUMM
The finInternaBoard financiastatem2011. No signstatem
The finDirectorequireStanda
TI S.p.A. ANDTHE CONSOEAR ENDED
RAL
nsolidated fiaries controdation methment 1.
2012 the coar. In Augustof reinforcin1, was conclt to change, ar value of tdated as froof the first coarketing rightts of Accentes the balancny in the accFrik İlaç A.Ş. aŞ., incorporatŞ. was definit2011 accountnization of tal S.a.r.l.. Rec
financial statnless otherw
MARY OF SIG
nancial stateational Finan(IASB) and inal statementents at 31 D
nificant chanents.
nancial stateors for submed in accordrds (IAS/IFRS
D SUBSIDIAROLIDATED FI31 DECEMB
inancial stateolled by thehod applied, t
onsolidation t the acquisitg the Group’uded. The reas allowed bthe assets aom 1 Septemonsolidationts to five wet are consolce sheet effecounts is not a pharmaceuted Yeni Rectely recognizts were confthe companycordati Corpo
tements are wise stated.
GNIFICANT A
ments have ncial Reportin compliancts. The sameDecember 20
nges in accou
ments of thission to thedance with S). The crite
RIES NANCIAL STBER 2012
ements at 3e Company.their percent
perimeter ction of the P’s direct presecognition oby IFRS 3, in vand liabilitiesmber 2012. T at 31 Augusell‐known proidated as frect of the fiyet definite.utical compancordati A.Ş.. Azed in the accfirmed. Duriny structure oration was r
presented in
ACCOUNTIN
been prepang Standarde with the Ee accounting 12 were use
unting polici
e consolidate respective Internationaria applied is
38
TATEMENTS
1 December The comptage of owne
hanged to inPolish pharmsence in Polaf this compaview of the ls acquired. The consolidast 2012. In Noduct lines inrom 16 Noverst consolida During 2012ny acquired As prescribecounts. The ng the periodin France wrenamed Rec
n euro (€) an
NG POLICIES
red in accords (IAS/IFRS)European Unpolicies app
ed in the pre
es were app
ted companiShareholderal Accountins consistent
S
r 2012 companies includership and a
nclude acquiaceutical comand where Rany in the acimited perioThe profit aated cash floNovember then Russia andember 2012ation at 15 2 the two comin Septembeed by IFRS 3 provisional vd the consolidwhich involvecordati Rare
nd all amoun
rdance with ) issued by nion’s guidelplied in the pparation of t
plied in the p
ies, preparedrs’ meetings,ng Standardswith that of
prise Recordaded in the description
isitions and mpany Farmecordati Polsccounts is nod of time elaand loss accow statemene Russian cod C.I.S., was a. The consoNovember 2mpanies owner 2011, subsduring 2012 values assigndation perimed the incorDiseases Inc
nts are round
Internationathe Internatines on the preparation the financial
preparation
d by the Bo, have been s and Internf the consolid
ati S.p.A. (thconsolidatedof their activ
reorganizatioma‐Projekt spska sp. z o.o.ot yet definiapsed and thcounts of Fant includes thompany Acceacquired. Thlidated cash2012. The rened in Turkeysequently ren the acquisited to its ass
meter changeporation of ..
ded to the n
al Accountintional Accoupreparationof the conso statements
of the conso
ard of Direcreclassified national Finadated financ
e Company)d accounts, vity are set o
ons made dup. z o.o., with. was establiste, and coulhe need to asarma‐Projekthe balance sent LLC, ownehe profit and flow statemcognition ofy were mergnamed Recotion of Dr. F.ets and liabid also due toFIC S.a.s. in
nearest thou
g Standards unting Standn of consolidolidated finaat 31 Decem
olidated fina
ctors or the and adjusteancial Repoial statemen
and the ut in
uring h the shed d be ssess t are sheet er of loss ment f this ged: rdati . Frik lities o the n FIC
sand
and dards ated ncial mber
ncial
Sole ed as rting nts at
31 Dece The finavailabunderlydefined The preaffect tliabilitiebased circumsthe circ The pri Basis o
The concontrolthe Comobtain The finby the those u All inteeliminarequire Subsidiup to tconsoliduring The line a. The
sharb. Inte
realc. Any
good. Min
minstat
The finEuro as
ember 2011.
nancial statele for sale ying hedged d benefit plan
eparation of the reportedes at the daton managemstances, the cumstances c
ncipal accou
f consolidati
nsolidated filled by the Cmpany has tbenefits from
ancial statemCompany. Wused by the C
ercompany tated on conses recognition
aries are inche effective dated subsidwhich contro
e‐by‐line con
book valureholders' eqercompany pized, are elim excess of thdwill. nority intereority interesement.
ancial statems follows:
.
ments have included unfinancial liabns for which
the financia amounts of te of the finament’s best original estimchange.
nting policie
ion
nancial stateCompany (its he power tom its activitie
ments of the Where necesCompany.
transactions solidation. Inn in the cons
cluded in thedate controdiary, the reol was maint
nsolidation m
ue of investquity while thayables and minated. he cost of ac
sts in the eqts in the net
ments of for
been prepander the linbility) for whthe actuaria
al statementsrevenues, eancial statemjudgment atmates and as
es adopted ar
ements incorsubsidiaries govern the es.
subsidiariesssary, adjustm
and balancntragroup losolidated fina
consolidatel is transferresults of thetained.
method is app
tments in he assets andreceivables
cquisition ov
quity of cont income of s
eign subsidia
39
ared on the ne “Other inhich their fairl valuation w
s requires mxpenses, assments. If in tht the date ossumptions w
re set out be
rporate the f) made up tofinancial and
s are preparements are m
ces betweensses are alsoancial statem
d financial stred out of the subsidiary
plied using th
consolidatedd liabilities arand transact
ver the value
solidated susuch compan
aries express
historical convestments”,r value has bwas carried o
anagement tsets, liabilitiehe future sucof the financwill be modif
low.
financial stato 31 Decembd operating p
ed according ade to bring
group enteo eliminated ments.
tatements fre group. Whare consolid
he following
d subsidiariere consolidattions, as well
e of equity at
bsidiaries arnies are show
sed in curren
ost basis, ex, hedging dbeen appliedut as prescri
to make estis and disclosch estimatescial statemenfied as appro
tements of tber each yeapolicies of an
to the sameg the account
erprises, incunless they
rom the effechen control dated propo
criteria:
es is eliminted on a line‐l as intra‐gro
t the date of
re shown sewn separately
ncies other t
cept for theerivatives (ad as prescribebed by IAS 1
imates and asure of contis and assumpnts, deviate opriate in the
he Companyr. Control isn investee en
e accounting ting policies
luding unreaindicate an
ctive date cois no longer ortionally to
nated again‐by‐line basisoup profits an
f acquisition
parately undy in the cons
than Euro ar
e financial asand the relaed by IAS 399.
assumptions ngent assetsptions, whichfrom the ace period in w
y and enterps achieved wnterprise so a
policies adoused in line
alized gains,impairment
ontrol is acquexercised ovthe time pe
st the reles. nd losses no
is recognize
der equity, wsolidated inc
e translated
ssets ative 9 and
that s and h are ctual which
rises where as to
pted with
, are that
uired ver a eriod
evant
t yet
ed as
while come
into
‐ Asse‐ Shar‐ Inco‐ The
couTranslaincome
Balanc Propertdeprecwhich Impairmreprese The gaisales pr Leasingrisks anthe Gropaymenincludechargesstatem All otheterms o Intangigeneratpurchauseful lthe yeaover th Goodwinteresentity aconsiderecogn GoodwGoodwthe bal On disgoodwi
ets and liabilreholders’ eqome and expegoodwill rentry in questation differene.
ce sheet
ty, plant andiation and aindicate thament). Deprentative of th
in or loss arisroceeds and
g ‐ Leases arend rewards ooup at their fnts, and deped in the bas and reducent.
er leases areof the releva
ible assets ‐ te future ecse cost, net life which, har of the firshe duration o
will ‐ Goodwilt in the fair vat the date ered acquisitized as an as
will arising onwill arising onance sheet.
posal of a sill is included
ities, at yearquity at histoense items aesulting fromtion and trannces arising f
d equipment ny recognizeat the carryireciation is he estimated
sing on the dthe carrying
e classified aof ownershipfair value at tpreciated ovlance sheet ction of the
e classified ant lease.
An intangiblonomic benof amortizaowever, canst sale of relof the contrac
l arising on cvalue of the of acquisitiotion costs asset and revie
n the acquisin the acquisi
subsidiary, ad in the deter
‐end exchanorical exchanat the averagm the acquisinslated at yeafrom this pro
‐ Property, ped impairmeing amount computed
d useful life o
disposal or reg amount of t
s finance leap to the lessethe date of aver their estas a financ
e financial li
s operating
le asset is reefits and its ation calculatnot exceed 2evant product.
consolidationidentifiable aon. Transactind are recoewed annual
tion of an asition of subs
ssociate or rmination of
40
ge rates; ge rates; e exchange rition of a foar‐end exchaocess are sho
plant and eqnt loss. Revof the asseon a straig
of the assets.
etirement of the asset and
ases wheneveee. Assets hacquisition otimated usefial liability. iability. Fin
leases and t
ecognized oncost can beted on a str20 years. Paucts. Amorti
n represents assets and liaion costs assognized as elly in order to
ssociate is insidiaries and
jointly contrf the profit or
rates for the reign compaange rates. own in the co
quipment is sviews are perets can no lght‐line bas
an asset is dd is recognize
er the termsheld under fir, if lower, atful life. The Lease paymnance charge
he rentals pa
nly if it can be measured raight line baatents, licenszation of dis
the excess oabilities of a sociated withxpenses in to determine
ncluded withjointly cont
rolled entityr loss on disp
year; any is recogn
onsolidated
stated at purrformed wheonger be resis using rat
etermined aed in income
s of the leaseinance leasest the presente correspondments are apes are char
ayable are c
be identifiedreliably. Intasis and on ses and knowstribution an
of the cost ofsubsidiary, ah the aggregthe year theany impairm
hin the carryrolled entitie
y, the attribuposal.
nized in the
statement o
rchase cost len events orecovered (setes which a
s the differe.
e transfer subs are recognt value of theding liability pportioned brged directly
harged to in
d, if it is protangible assethe basis ofw‐how are amnd license rig
f acquisition associate or jgation of coey are incurment loss.
ing amount es is present
utable amou
currency of
f comprehen
ess accumulr situations oee paragraphare held to
nce between
bstantially alnized as assee minimum lto the lessbetween finy in the inc
ncome as per
bable that itets are valuef their estimmortized as fghts is calcul
over the Grojointly contrompanies arerred. Goodw
of the assocted separate
unt of remai
f the
nsive
ated occur h on o be
n the
l the ts of ease or is ance come
r the
t will ed at ated from ated
oup’s olled e not will is
ciate. ely in
ining
Impairmintangiloss. If extent individubelongs Recoveestimatcurrent If the ramounImpairm Where increasexceedreversagoodwi Investmsignificthe invstatem Other iThey cotheir faof value Receivaestimat Inventoand subrealizabacquisitend. Ininclude Inventoobsoles Trade rfor esti Cash an
ment ‐ At eble assets toany such indof the impaual asset, thes.
erable amouted future cat market asse
recoverable t, the carryiment losses a
an impairmesed to the rev the carryingal of an impaill cannot be
ments in assoant influenceestee. The rents using th
investments omprise equair value canne (impairmen
ables (includeted irrecover
ories ‐ Inventbsidiaries is tble value. Invtion cost incnventories ofes the cost of
ories are wrscence result
receivables ‐ mated irreco
nd cash equiv
ach balanceo determine wdication existirment loss e Group esti
nt is the greash flows areessments of t
amount of ing amount are recognize
ent loss subsvised estimatg amount thairment loss ireversed.
ociates ‐ An e, but not coresults and ashe equity me
‐ Other inveity instrumenot be reasont) if require
ed in non‐curable amoun
tories are statheir substituventories of cluding costsf work‐in‐prof raw materia
ritten‐down ting from slo
Trade receivoverable amo
valents ‐ Cas
e sheet datewhether therts, the recove(if any). Whmates the re
eater of nete discountedthe time valu
an asset (orof the asseed as an expe
sequently revte of its recoat would havis recognized
associate is ontrol, throussets and liabethod of acco
estments arents and are onably determd. The impai
urrent assets)ts if and whe
ated at the loution cost whraw materias incurred inocess and finals, consuma
if market vow moving st
vables are staounts.
h in banks o
41
e, the Groupre is any indierable amouhere it is notecoverable a
t selling pricd to their preue of money
r cash‐generet (cash‐geneense immed
verses, the coverable amove been deted as income i
an enterprigh participatbilities of assounting.
e those descmeasured atmined, theseirment cost i
) ‐ Receivablen necessary
ower of costhile that relaals, supplies a bringing theished goods ables, direct l
alue is loweocks.
ated at their
n demand an
p reviews thcation that tunt of the asst possible tomount of the
ce and valueesent value u and the risk
ating unit) ierating unit)iately.
carrying amoount. Howevermined hadimmediately
se over whiction in the fisociates are i
ribed by IASt fair value. e investments recognized
les are statey.
t or market, wted to finisheand promotie inventorieare valued aabour and in
er than cost
nominal val
nd highly liqu
he carrying athose assets set is estimato estimate the cash‐gener
e in use. Inusing a pre‐taks specific to
s estimated ) is reduced
ount of the aer, the incread no impairm. Losses resu
ch the Groupnancial and ncorporated
S 39 as availaIf their markts are valued in the incom
d at their no
where the med goods andonal materias to their loat their averandirect costs
t as describe
ue as reduce
uid investme
amounts of have suffereted in order the recoverabrating unit to
assessing vax discount the asset.
to be less tto its recov
sset (cash‐geased carrying
ment loss beeulting from th
p is in a posoperating pod in the conso
able‐for‐saleket value is n at cost and me statemen
ominal value
market value d work‐in‐pral are valuedcation and cage manufactof productio
ed above or
ed by approp
nts.
its tangible ed an impairmto determineble amount oo which the a
value in use,rate that ref
than its carrverable amo
enerating ung amount caen recognizehe impairme
sition to exeolicy decisionolidated fina
financial asnot availableadjusted fort.
e and reduce
of raw mateocess is theid at their avecondition at turing cost won.
r in the cas
priate allowa
and ment e the of an asset
, the flects
rying ount.
nit) is nnot d. A nt of
rcise ns of ncial
sets. e and r loss
ed by
erials r net erage year
which
se of
nces
Non‐cuwhose that eit A non‐ccosts to Non‐cu Equity dividensharehotherefo Loans ‐loans afinanciarecogninteres If the lo39 thes Staff lecarriedbenefitgains adeterm Trade p Other pparties Bank oissue cothe inst Derivatassociaat the e Hedginhedge balancerecogn The garecognadjuste
urrent assetsoperations ther have be
current asseo sell it and it
urrent assets
‐ Equity insnd is recognolders’ meetore gains and
‐ Interest‐beaare measureal asset or fiition minus t method of
oans are covse loans are m
eaving indem out as prest plans is thend losses an
mined using th
payables ‐ Inc
payables ‐ In) and are sta
verdrafts anosts. Financtrument to t
tive financiaated with intend of each r
g relationshof the expose sheet. A ized asset or
in or loss froized immedied for the c
held for saand cash floen disposed
t (or disposats carrying am
or disposal g
struments isnized as a liting. The cod losses on sa
aring loans ad using the nancial liabilprincipal reany differen
vered using dmeasured at
mnities ‐ Empscribed by IAe present vand unrecognihe Projected
clude payabl
nclude payabted at their n
d loans ‐ Bae charges arhe extent tha
al instrumenerest rate anreporting per
ips are of twsure to chan“cash flow hr liability or to
om the chanately in net orrespondin
le and discoows can be dof or that sa
al group) clasmount.
groups that a
sued by theability at thost and sellinales are not r
re recorded amortised city is the amepayments, ce between
derivative insfair value as
ployee benefAS 19. Thelue of the dized past serd Unit Credit
es arising fro
bles arising inominal valu
nk overdraftre accountedat they are n
ts ‐ The Gnd foreign curiod.
wo types, “fanges in the fahedge” is a o a forecaste
ge in fair vaprofit or losg gain or lo
42
ontinued opedistinguishedtisfy the crite
ssified as he
are classified
e Company he time of ang prices of trecognized in
at the procecost methodmount at whicplus or minthat initial a
struments qus are their re
fits presentee liability recefined benefrvice cost. TMethod.
om supply ag
in the normaue.
ts and loans d for on an acnot settled in
roup uses durrency fluct
air value hedair value of hedge of thed transactio
lue of a heds. At the saoss since the
erations ‐ Cod operationaeria to be cla
ld for sale is
as held for s
are recordeadoption of treasury shan the income
eeds receivedd as prescribch the financus the cummount and t
ualifying as flated derivat
ed on the bacognised in tfit obligationThe present v
greements an
al course of
are recordeccrual basis the period i
derivative fituations. Suc
dge” or “cashan asset or e exposure on.
dging instrumme time, the inception
omprise thosally and for fassified as he
measured a
sale are not d
d at the prthe dividenres are recoe statement.
d, net of direbed by IAS 3cial asset or
mulative amohe maturity
fair value hetive instrume
alance sheetthe balance n, as adjustevalue of the
nd are stated
business (to
d at the proand are adden which they
nancial instch derivative
h flow hedgeliability thatto variability
ment qualifyie carrying amof the hedg
se componefinancial repeld for sale.
at the lower
depreciated.
oceeds recend resolutiognized direc
ct issue cost39. The amoliability is mortisation usiamount.
dges, in accoents.
t are the ressheet for p
ed for unrecodefined ben
d at their nom
owards emp
ceeds received to the cary arise.
ruments to es are measu
e”. A “fair v is already ry in cash flo
ng as a “fairmount of thege, which al
nts of an enporting purpo
of fair value
eived. Propon at the anctly in equity
s. Subsequeortised cost easured at inng the effe
ordance with
sult of valuatpost‐employmognised actunefit obligatio
minal value.
ployees and t
ved, net of drrying amoun
hedge its ured at fair v
value hedge”ecognized inows relating
r value hedge hedged iteso is recogn
ntity, oses,
e less
osed nnual y and
ently, of a nitial ctive
h IAS
tions ment uarial on is
third
irect nt of
risks value
” is a n the to a
ge” is em is nized
immed The garecogn The gaihedging Provisioprobabamoun Foreignexchancurrencexchanrates of
On conexchanaverageconsolitranslatdispose
Incom Revenutransacarising rewardfrom ro Cost ofconsum Selling payroll Promotto the r Researcwhich capitaliinherenthat deunder c Non‐rei
iately in net
in or loss froized in the co
in or loss frog instrument
ons ‐ Provisioble that an out can be mad
n currencies ge prevailingcies are retrage are includf exchange p
nsolidation, tge rates pree exchange dated statemtion differened of.
e statemen
ues ‐ Revenuction will flofrom the sa
ds of ownersoyalties due o
f Sales ‐ Remables, finish
expenses ‐ Inand other ctional expenrevenues obt
ch and develthey are incized when tnt in the devevelopment collaboration
imbursable g
profit or loss
om the chanonsolidated s
m the changt is recognize
ons are recogutflow of resde.
‐ Transactiog on the datanslated at tded in net prprevailing on
the assets aevailing on trates for t
ment of comnces are rec
nt
ues are recogow to the Grale of goods hip. These on licensed o
presents thehed goods, an
nclude all excosts for saleses for the latained during
lopment expecurred in acctechnical anvelopment ocosts are exn agreements
government
s.
ge in fair vastatement of
ge in fair valued immediate
gnized whensources will b
ons in currentes of the trathe rates prerofit or loss fothe dates of
and liabilitiesthe balance the period. mprehensive ognized as i
gnized whenroup and this recognizeare stated nout products
e cost of gond direct and
penses incures and markeaunch of newg the launch
enses ‐ All recordance wid commerciof new produpensed as ins with third p
grants ‐ Go
43
lue of a hedf comprehen
ue of a derivaely in net pro
the Group hbe required t
ncies other tansactions. evailing on tor the periodf the transact
s of the Grosheet date. Exchange income andincome or a
n it is probaat the amoued when thenet of discou and up‐fron
oods sold and indirect pro
rred in conneeting personw products aperiod.
esearch costsith IAS 38. ial feasibilityucts are so hncurred. Reparties.
vernment gr
dging instrumnsive income
ative financiaofit or loss.
has a presentto settle the
than the EuMonetary ashe balance sd. Non‐monetions are not
oup’s foreign. Income andifferences d included inas expenses
able that theunt of revene enterprise unts, rebatesnt payments r
nd includes toduction exp
ection with tnel, promotare recognize
s are expenseIAS 38 presy is achievehigh that thesearch and d
rants toward
ment qualifyi.
al instrumen
t obligation a obligation a
ro are initiassets and liasheet date. etary assets at retranslated
n currency ond expense arising, if
n the Groupin the perio
e economic bnue can be mhas transfers and returnreceived und
the cost of penses.
he products ional expensed in the inco
ed in the incoscribes that d. Regulatoe guidelines udevelopment
ds investmen
ng as a “cas
nt which does
as a result ofand a reliable
ally recordedabilities denoProfits and and liabilitiesd on the bala
operations aitems are tany, are re’s translatiood in which
benefits assomeasured rerred the signs. Revenuesder licensing
raw materia
sold during ses and all dome stateme
ome statemedevelopmenory and othunder IAS 38t costs inclu
nt in plant a
sh flow hedg
s not qualify
f past eventse estimate of
d at the rateominated in losses arisins recorded atance sheet da
are translateranslated atcognized in n reserve. the operatio
ociated witheliably. Revenificant risks s include incagreements
als, supplies
the year, sucistribution cent in propo
ent in the yent costs musher uncertain8 are not mede amounts
re recognize
ge” is
y as a
, it is f the
es of such g on t the ate.
ed at t the the
Such on is
h the enue and
come .
and
ch as osts. rtion
ear in st be nties et so due
ed as
incomeas defestatem Transacgroup eoptionsvesting Financiunreali Taxatiocurrentsheet a Deferreamouncomputdifferenavailabrecogn Deferreor the aitems c Deferreauthori Earningdivided Dilutedpotenti
3. REVEN
Net revbroken € (thou
Net sa
Royalt
Up‐fro
Other
Total r
e over the peerred incoment as other
ctions involvemployees as at the date g period and
ial items ‐ Inzed, and diff
on ‐ Income tly payable iare applied.
ed tax is the t of assets atation of taxnces and defle against wized if the te
ed tax is calcasset realizecharged or cr
ed tax assetsity and the G
gs per share d by the weig
d earnings peial ordinary s
NUE
venue for th down as fol
usands)
les
ties
ont payments
revenue
revenue
eriods necesse. Research revenue.
ving share baare considerethey are grabooked direc
clude interesferences aris
tax expenses based on t
tax expectedand liabilitiexable profit. ferred tax asshich deductimporary diff
ulated at thed. Deferred redited direct
s and liabilitiGroup intend
‐ Earnings pghted averag
er share is cshares.
he years 201lows:
s
sary to matchgrants are
ased paymened part of thanted. This coctly to equity
st income aning from the
represents taxable prof
d to be payabes in the fin Deferred tsets are recoible temporaference arise
e tax rates thtax is chargetly to equity,
ies are offses to settle its
er share is te number of
calculated b
12 and 2011
44
h them with booked on
nts – As presceir remunerost is recogny.
nd expense, valuation of
the sum of fit for the ye
ble or recoveancial statemtax liabilitiesognized to thary differences from good
hat are expeced or credite, in which cas
et when theys current tax
he net profitf ordinary sha
y adjusting
is € 828.3
the related an accrual b
cribed by IFRation, the coized in the p
foreign exchf securities.
the tax curreear and tax r
erable on temments and ts are generae extent thates can be utwill.
cted to applyed in the incose the deferr
y relate to inassets and li
t for the perares outstan
the number
million and
2
810,
4,
8,
5,
828,
costs and arbasis and ar
RS 2 stock opost of which rofit and loss
hange gains a
ently payablrates in force
mporary diffethe correspolly recognizet it is probabtilized. Such
y to the perioome statemered tax is also
ncome taxes iabilities on a
iod attributading during t
r of shares f
€ 762.0 mil
2012
,551
,045
,568
,153
,317
e stated in tre recognized
ption plans fis the fair vas linearly dist
and losses, b
e and deferre at the dat
erences betwonding tax bed for all table that taxab assets and
od when the ent, except wo dealt with
levied by tha net basis.
able to ordinthe period.
for the effec
lion respecti
2011
734,070
5,714
11,958
10,294
762,036
he balance sd in the inc
for the benefalue of the stributed ove
both realized
red tax. Thee of the bal
ween the carrbasis used inxable tempoble profits wliabilities are
liability is setwhen it relatein equity.
he same taxa
ary sharehol
cts of all dilu
ively and ca
Cha2012/2
76,
(1,6
(3,3
(5,1
66,
sheet come
fit of stock r the
d and
e tax ance
rying n the orary ill be e not
ttled es to
ation
lders
utive
n be
ange 2011
,481
669)
390)
141)
,281
Please Revenurelativelercanid Other renderewell as of Procthe pro
4. OPERA
Total oand are
€ (thou
Cost o
Selling
Resear
Gener
Other
Total o
Labor cmillion Deprec8.8 milincreas The folmainly busines
€ (thou
Amoun
Person
Costs a
Revers
Write‐
Others
Total o
The am
refer to the
ue from up‐fe to agreemedipine+enala
revenue inced to third pprofits rece
cto‐Glyvenol®oduct in the v
ATING EXPEN
operating expe analyzed by
usands)
f sales
g expenses
rch and deve
al and admin
(income) exp
operating ex
cost in 2012 related to st
ciation and amlion, down bse of € 2.2 mi
lowing tablenon‐recurrinss.
usands)
nts due to th
nnel restruct
associated w
sal of a provi
‐downs
s
other income
mounts due t
Review of Op
front paymenents for the april fixed co
cludes commparties in theived from No® realized duvarious coun
NSES
penses for thy function as
elopment exp
nistrative exp
pense, net
xpenses
is € 205.7 mtock option p
mortization cby € 1.7 millioillion compar
summarizesng events, op
he Italian hea
uring charge
with acquisitio
sion
e (expense),
to the public
perations for
nts refers tolicensing of mbination (€
missions of €e countries bovartis Consring 2012 betries had bee
he years 201s follows:
penses
penses
million, an inplans determ
charges are €on as compared to the pr
s the most sigperations an
althcare syste
es
ons
net
healthcare s
45
r the analysis
o the licensinlercanidipine€ 0.8 million)
€ 1.9 milliobelonging to umer Healthefore the tranen complete
12 and 2011
crease of 5.9mined in acco
€ 24.7 millionared to 2011receding year
gnificant comd matters w
em
system in Ita
s of net sales
ng out of core (€ 4.9 millio, and of silod
n received the Commoh, for an amonsfer to Recod.
are € 661.4
2
293,
250,
63,
45,
8,
661,
9% comparerdance with
n. Depreciat1, and amortir.
mponents of hich are not
2
(2,
(9,
(2,
7
(2,
1
(8,
aly refer to t
s.
rporate prodon), of pitavdosin (€ 0.8 m
by FIC Médnwealth of Iount of e 1.2ordati of the
4 million and
2012
,557
,566
,407
,486
,337
,353
d to 2011, aIFRS 2.
tion of propeization of int
other incomoften repea
2012
,406)
,849)
,345)
7,250
,045)
1,058
,337)
he pay back
ducts and in vastatin (€ 1.million).
dical for prondependent2 million, resmarketing a
d € 598.6 mil
2011
259,977
232,160
55,956
45,386
5,080
598,559
and includes
erty, plant antangibles is €
me (expense) ted in the or
2011
(2,223)
(920)
(1,753)
0
0
(184)
(5,080)
due to the
2012 are m5 million), of
omotion serv States (C.I.Sulting from suthorization
llion respect
Cha2012/2
33,
18,
7,
3,
62,
charges of €
d equipment€ 15.9 million
which comprdinary cours
Cha2012/20
(1
(8,9
(5
7,2
(2,0
1,2
(3,2
Italian medic
ainly f the
vices S.) as sales ns for
tively
ange 2011
,580
,406
,451
100
,257
,794
€ 1.9
t is € n, an
rises se of
nge 011
183)
929)
592)
250
045)
242
257)
cines
agencyalready Personin Franc Costs atransaccompanacquire An amodefinedFrance the proreferre
5. FINAN
In 2012are com
€ (thou
Exchan
Interes
Net int
Interes
Total f
The inccompantranchepart of Note 20 The charesourcimplem The chathe croplaced dollars debt atransac
(AIFA) in suy applied dur
nel restructuce to take pl
associated wictions relatedny Farma‐Pred in the U.S.
ount of € 7d in the agreand in Belgiovision reverd to the up‐f
CIAL INCOM
2 and 2011 fimprised as fo
usands)
nge gains (lo
st expense o
terest incom
st cost in res
financial inco
crease of inteny Dr. F. Frike of which wf the long ter0).
ange in the sces investedmentation of
ange in fair voss‐currency in 2004 withand in pouns comparedction is perfe
ubstitution foring precedin
uring chargesace in 2013 (
ith the acquid to the prodojekt (€ 0.4 .A. (€ 0.7 mil
.3 million haeement with ium, should rsed. € 2.0 mfront paymen
ME AND EXP
inancial itemollows:
sses)
on loans
me (expense)
spect of defin
ome (expens
erest expensk İlaç acquirewas received rm senior un
short‐term nd and to ththe acquisiti
value of hedginterest rat
h the objectivnds sterling. to its nomctly hedged.
or the 5% png years, was
s are to be at(€ 6.6 million
isitions referduct portfoliomillion) andlion).
ad been prothe Merck ghappen. Themillion of wrnts for the pr
PENSE
ms recorded a
on s/t financ
ned benefit p
se), net
se on loans ised in 2011 anin March 20nsecured not
net financial he use of son strategy i
ging derivativte swap covve of eliminaThis amoun
minal value w
46
rice reductios extended to
ttributed man).
r to intermedo acquired ind to the port
ovided for ingroup and ree probabilityite‐downs ofroduct’s mar
a net expens
cial position
plans
s to be attribnd to interes11, partly oftes privately
position is mshort‐term lin place durin
ves is negatiering the seating the exchnt is equivalewith a comb
on on selecteo 2012.
inly to the re
diation expenn Russia (€ 1.tfolio of prod
n 2010 to coelative to thy of the evenf intangiblesrketing rights
e of € 6.6 m
buted mainlyt on the loanffset by the iplaced in 20
mainly due toines of creng 2012.
ve by € 0.4 meries of longhange risk linent to the chbined zero e
ed products.
estructuring
nses, legal co3 million), toducts for the
over the proe sale of pitnt happenings are also rels in Italy and
illion and € 3
2012
679
(7,179)
397
(523)
(6,626)
y to the loansn received frnterest savin004 for an a
o the decreadit. The res
million and rg term senionked to the thange in theeffect on th
. This mecha
of the sales f
onsultancy feo the acquisite treatment
obability thatavastatin mag has been rlated to pitain France
3.5 million re
2011
2,126
(6,757)
1,686
(520)
(3,465)
s on the balarom Centrobangs followingmount of €
ase in the avesources wer
efers to the or unsecuredtranches dene fair value oe income st
anism which
force announ
ees and taxetion of the Pof rare dise
t certain evearketing righreconsideredavastatin and
espectively w
Chan2012/20
(1,4
(4
(1,2
(3,1
ance sheet ofanca, the secg repayment15.0 million
erage amounre used for
measuremed notes privanominated inof the undertatement as
was
nced
es on olish eases
ents, hts in and d are
which
nge 011
47)
22)
89)
(3)
61)
f the cond t of a (see
nt of the
nt of ately U.S. lying s the
6. PROVIS
The prconsoliItalian c
The cuincurre
Standa
Divide
Conso
Other
Effecti
IRAP
Effecti
IRAP is calculat
7. PROPE
Propertmillion equipm
SION FOR IN
rovision for dated compacompanies.
rrent standaed on consoli
ard income t
nds from for
lidation effec
differences,
ive tax rate o
ive tax rate,
levied only oted before th
ERTY, PLANT
ty, plant andat 31 Decem
ment are show
NCOME TAX
income taxanies as well
ard corporatdated pretax
ax rate on pr
reign subsidia
ct
net
on income
including IRA
on the Italianhe deduction
T AND EQUI
d equipmenmber 2012 awn in the fol
XES
xes amountsl as the Italia
te income tax income, as
retax income
aries
AP
n companies n of labour co
PMENT
t, net of acand 2011 reslowing table
47
s to € 41.8n regional ta
ax rate in Itfollows:
e of the pare
and is compost and inter
cumulated dspectively. T:
8 million anax on produc
taly can be
nt company
puted applyinrest.
depreciation,The composit
d includes tion activitie
reconciled w
ng a 4.10% ra
, amounts ttion and var
income taxees (IRAP) whic
with the tax
2012 %
27.5
0.6
(4.9)
0.4
23.6
2.5
26.1
ate to a broa
o € 60.0 miiation of pro
es levied onch is levied o
x rate effect
20
2
(4
2
2
ader taxable
illion and € operty, plant
n all on all
ively
011%
27.5
0.5
4.3)
0.8
24.5
2.7
27.2
base
55.4 t and
€ (thou
Cost
Balan
Addit
Dispo
Chan
Othe
Balanc
Accum
Balan
Depr
Dispo
Chan
Othe
Balanc
Carryin
31 Dec
31 Dec
Additioheadquamounand in t
At 31 D Change
8. INTAN
Intangimillion
sands)
nce at 31.12.
tions
osals
nges in report
er changes
ce at 31.12.1
mulated depr
nce at 31.12.
reciation for t
osals
nges in report
er changes
ce at 31.12.1
ng amount a
cember 2012
cember 2011
ons during 20uarters for at of € 5.5, inthe Turkish p
December 20
es in reportin
GIBLE ASSE
ble assets, nand € 149.6
11
ting entities
2
reciation
11
the year
ting entities
2
at
2
1
012 of € 15.8n amount ofn the producproduction p
12 no land o
ng entities ar
TS
net of accummillion resp
8 million refef € 3.8 millioction plant inlant for an a
or buildings a
ise from the
mulated amoectively. The
48
Land & buildings
45,716
76
(2,445)
0
219
43,566
26,493
1,404
(124)
0
8
27,781
15,785
19,223
er mainly to on, in the pron Saint Victormount of € 2
re held unde
consolidatio
ortization, at eir compositio
Plant & machinery
167,458
4,057
(1,093)
0
3,827
174,249
145,372
4,901
(1,054)
0
134
149,353
24,896
22,086
investmentsoduction plar (Montluçon2.3 million.
er financial le
on of Farma‐P
31 Decembon and varia
Other equipment
47,886
2,298
(1,577)
248
1,595
50,450
37,545
2,481
(1,445)
208
50
38,839
11,611
10,341
made in thent in Campon, France) fo
eases.
Projekt.
er 2012 andtion are show
Advancconstruct in progr
3,7
9,3
(1
(5,2
7,6
7,6
3,7
e Milan prodoverde di Apror an amount
d 2011 amouwn in the fol
ces/tionress
T
747 264,
370 15,
82) (5,2
0
55)
680 275,
0 209,
0 8,
0 (2,6
0
0
0 215,
680 59,
747 55,
duction plantrilia (Italy) fot of € 2.3 mi
unted to € 2lowing table
Total
807
801
297)
248
386
945
410
786
623)
208
192
973
972
397
t and or an illion
231.5 :
€ (thou
Cost
Balan
Addit
Write
Dispo
Chan
Othe
Balanc
Accum
Balan
Amo
Dispo
Chan
Othe
Balanc
Carryin
31 Dec
31 Dec
All inta In ApritrademInternadigestivdisordeTopical(vitami In Augu1.9 mill In Octoan amo The intmillion,from thassets. producproduccompan Changefor an a
sands)
nce at 31.12.
tions
e‐downs
osals
nges in report
er changes
ce at 31.12.1
mulated amor
nce at 31.12.
rtization for
osals
nges in report
er changes
ce at 31.12.1
ng amount a
cember 2012
cember 2011
ngible assets
il an amounmarks and aational and Mve disorder, ers), Rhinopr (salicylic acn C lozenges
ust a portfolilion.
ober the Italiount of € 18.0
tangible asse, are includehe allocationThe amount
cts and dietacts is estimatny operates
es in reportinamount of €
11
ting entities
2
rtization
11
the year
ting entities
2
at
2
1
s have a finit
nt of € 21.0 dditional asMcNeil GmbHheadache,
ront® (pseudcid solution,s to treat vita
io of product
ian Dentosan0 million.
ets of the coed under “Chn of the diffet allocated isary supplemted to be ofand takes int
ng entities al0.6 million.
Pate
a
e useful life a
million wasssets concerH & Co. oHGcough and doephedrine, an anti‐coramin C deficie
ts already m
n® oral care
ompany Accehanges in reerence betwes based on t
ments, in thef 20 years. Tto considera
lso includes
49
ent rights and marketing
uthorizationst
152,169
27,023
0
(7)
49,666
729
229,580
64,961
6,633
(7)
25
49
71,661
157,919
87,208
and are amo
s paid for thrning six OTG. The producold), Betad+triprolidinern preparatioency).
arketed by L
line of produ
ent LLC acquported entiteen the amothe fair valuee acquired cThis estimatetion the histo
intangible as
Distribution, litrademark and s
127
19
(2
145
66
9
75
70
60
ortized over a
he acquisitioTC pharmaceucts acquireddorm® D (die indicated fon), Tirgon®
Labormed in
ucts was acq
uired in Rusties”. Almostount paid fore of five procompany’s pe is based onorical sales t
ssets arising
icense, similar rights
Ot
7,415 15,7
9,803 1
2,045)
(856) (3
876
544
5,737 15,9
6,686 14,8
9,127 2
(717) (1
376
141
5,613 15,0
0,124 9
0,729 9
a period not
on of the meuticals in Gd are JHP‐Röphenhydramfor rhinitis a® (bisacodyl
Poland was
quired from C
sia, the ovet the entire vr the companoprietary proproduct portn knowledgerend of the p
from the co
her Advapayme
772 7
190 2,0
0
30) (8
22 1
44 (35
998 2,4
835
201
15)
19
15
055
943 2,4
937 7
exceeding 20
marketing autGermany froödler® (mint mine HCl indand head cofor constipa
acquired for
Cilag Interna
rall value ofvalue of theny and the bduct lines, cfolio. The ue of the marproducts.
onsolidation o
ance ents
T
775 296,
007 49,0
0 (2,0
83) (9
135 50,6
50) 9
484 393,7
0 146,4
0 15,9
0 (7
0 4
0 2
0 162,3
484 231,4
775 149,6
0 years.
thorizations,om Cilag Goil indicated
dicated for slds), Collomation) and X
r an amount
ational GmbH
f which is € ese assets rebook value ofconsisting of seful life ofket in which
of Farma‐Pro
Total
131
023
045)
976)
699
967
799
482
961
739)
420
205
329
470
649
, the mbH d for sleep ack® Xitix®
of €
H for
49.6 sults f the OTC f the h the
ojekt
9. GOOD
Goodwchange
€ (thou
Cost
Balan
Good
Good
Excha
Balanc
Accum
Balan
Chan
Balanc
Carryin
31 Dec
31 Dec
As pressp. z o.o With thcomprithe comassets tthe difallocateamounto goodacquisitthe exc In the acquireassets athe amallows not yetvalue wzloty fr As presFrik İlaçliabilitieaccoun
WILL
will at 31 Deced as follows:
sands)
nce at 31.12.
dwill arising f
dwill arising f
ange rate ad
ce at 31.12.1
mulated amor
nce at 31.12.
nges during th
ce at 31.12.1
ng amount a
cember 2012
cember 2011
scribed by IFo. during 201
he acquisitiosing OTC prompany’s assethe carrying fference betwed to the afot of € 9.9 midwill. The altion of Accenchange rate b
case of Fared assets andand liabilitiesount paid ththe Group tot definite. Gowas thereforom the date
scribed by IFç acquired ines at the tits. The proc
cember 2012:
11
from the acq
from the acq
justments
2
rtization
11
he year
2
at
2
1
RS 3 the allo12 was effect
on of the Rusoducts and dets and liabilibook value oween the amoresaid intanillion to the llocation mant is stated ibetween the
ma‐Projekt td liabilities ws at the datee company. o reinforce itoodwill recogre adjusted t of acquisitio
FRS 3, duringn Septemberme of acqucess led to th
2 and 2011 a
uisition of Ac
uisition of Fa
ocation of thted.
ssian compaietary suppleities at the dof which wasmount paid ngible assetsrelative defeade is not yen local curreeuro and th
the entire dwas allocated of acquisitioWe believe tts presence ognized upon to reflect theon to year‐en
g the year thr 2011 becamuisition confhe identifica
50
amounted to
ccent LLC
arma‐Projekt
e price paid
ny Accent thements, marate of acquiss below theirand the bo
s to bring theerred tax liabet definite, aency and its ve Russian rou
difference beto goodwill.on did not rethat the valuon the Polishthe acquisitie change in nd 2012.
he allocation me definite. Tirmed the vtion of some
€ 413.2 mil
t sp. z o.o.
for the acqu
he company keted in Russition resulter fair value. Took value ofeir value in lbilities and aas allowed bvalue was thuble from th
etween the The measursult in the ide of the acquh market. Hoon of Farma‐the exchang
of the purchThe measurevalues provise intangible
lion and € 3
uisitions of A
acquired alsia. The meaed in the idenTherefore, anf the assets ine with then amount ofby IFRS 3. Goherefore adjue date of acq
amount pairement of thdentification uisition residowever, also ‐Projekt is stge rate betw
hase price oement of thesionally alloassets the c
65.7 million
Accent LLC an
l rights to fivasurement ofntification ofn amount of and liabilitie
eir fair value f € 27.0 milliooodwill recousted to reflequisition to y
d and the fe fair value oof any item tdes in its strain this case,tated in localween the eur
f the Turkishe fair value ocated in thecarrying boo
respectively
Goodw
403,38
26,97
16,09
4,42
450,87
37,66
37,66
413,21
365,7
nd Farma‐Pro
ve product lf the fair valuf some intang€ 49.6 millioes acquired(see Note 8on was allocgnized uponect the changyear‐end 201
fair value ofof the compato which allotegic nature , the allocatiol currency anro and the P
h company Dof the assetse 2011 finak value of w
y and
will
83
76
94
24
77
64
0
64
13
19
ojekt
ines, ue of gible on of was ), an cated n the ge in 12.
f the any’s ocate as it on is nd its olish
Dr. F. s and ncial
which
was bepaid anand an The excountriinto euoverall in the C Net gooreprese • Fra• Co• Ge• Po• Or• Tu• Cz• Ro• Po The acCommo As repogoodwivalue. Gsegmengoodwimay beamounand threcover The recunits. The macash flo The averisk assthe casaccoun Operatbudget6 Febru
elow their fand the book vamount of €
xchange rateies having cuuros for the pincrease of €Czech Repub
odwill at 31 ent the same
ance (Doms Aommonwealtermany (Merortugal (comprphan drug burkey (Yeni İlaech Republicomania (ArtMoland (Farma
quisition of onwealth of
orted in the ill is not amGoodwill is ants and the ill has been ae impaired, bt of the unite goodwill arable amoun
coverable am
ain hypothesows during th
erage weightsociated withsh generatingt the peculia
ing cash flowt and from thuary 2013.
ir value. Thevalue of the € 64.9 million
e adjustmenurrencies diffpreparation o€ 4.4 millionlic (€ 0.3 mill
December 20e number of c
Adrian and tth of Indepenrckle Recordapanies belonbusiness (the aç and Dr. F. c (Herbacos‐BMed Internat‐Projekt): € 1
the RussianIndependent
preceding nmortized systallocated to markets onallocated shaby comparint. If the recovallocated to nt of the unit,
mount was d
es used for che period ass
ted cost of cah the cash geg unit resultiarities of this
w forecasts fhe 2013‐2015
erefore, an aassets and lin was allocat
nts are relatferent from of the conso resulted, tolion) and in R
012, amountcash generat
he companiendent States ati): € 48.8 mging to the JOrphan EuroFrik İlaç) : € Bofarma): € ional): € 0.2 16.1 million.
n company At States.
ote 2 ‐ Summtematically bthe individu
n which the all be tested ng the carryiverable amothat unit is, the entity m
determined b
calculating thsumed for th
apital reflectenerating uning from the country.
for the explic5 business pl
51
amount of € iabilities acqed to goodw
ted to the gthe euro: goolidated finano be attributeRussia (€ 0.2
ting to € 413ting units:
es belonging (FIC, FIC Mé
million; aba group): €ope group): €105.6 million14.1 million;million;
Accent led to
mary of signbut is subjecual cash gencompanies for impairmng amount ount of the us not impairemust recogni
by calculatin
he value in uhe calculation
ts current manits. It was esacquisitions
cit period aslan approved
13.5 millionuired was al
will.
goodwill assoodwill was sncial accounted mainly to million).
.2 million, re
to the Bouchdical and Acc
€ 32.8 millio€ 110.6 million;
o the identi
ificant accouct to impairmerating unitsacquired opent annuallyof the unit, nit exceeds ted. If the caze an impair
ng the value
se concern tn and the gro
arket valuatistimated at 1s in Turkey, e
sumed for thd by the Boar
n of the diffelocated to th
sociated witstated in locts using the the acquisit
elates to the
hara group): cent): € 39.2
n; on;
ification of a
unting policiement tests ts identified operate. A casy, and when including gothe carrying arrying amoument loss.
in use of th
the discount owth rate.
ons of the co10.09% befoestimated at
he calculatiord of Directo
erence betwhe aforesaid
h the acquical currency ayear‐end excions in Turke
following ac
€ 45.8 millio2 million;
a new opera
es and as reqto determineon the basissh generatinthere is any oodwill, with amount of tunt of the u
he individual
rate, the exp
ost of moneyore tax, with 12.30% in o
on were takeors of the Par
ween the amintangible as
isitions madand is translchange ratesey (€ 3.8 mill
cquisitions, w
on;
ational area,
quired by IFRe its recovers of the busing unit to windication ththe recover
the unit, the unit exceeds
cash genera
pected opera
y and the spethe exceptio
order to take
en from the 2rent Compan
ount ssets
de in ated s. An ion),
which
, the
RS 3, rable iness which hat it rable unit
s the
ating
ating
ecific on of into
2013 ny on
The grobasis: 2respect The vaexaminin the recognthan ththan th
10. OTHER
Investm
€ (thou
Erytec
PureTe
Maxyg
Techno
Tecnof
Conso
Alavita
Codex
Fluidig
Others
Total e
During biophainteres
The Unfield of
11. OTHER
Receivaguaran
12. DEFER
Deferrean incre
owth rates us2.0% for all mtively.
lue in use, ned and apprfinancial staised. In partheir book valheir book valu
R INVESTME
ments in equ
usands)
ch Pharma S.A
ech Ventures
gen Inc., U.S.
ogen Liquida
farmaci S.p.A
rzio C4T, Ital
a Inc., U.S.A.
is Inc., U.S.A
gm Corp., U.S
s
equity invest
the year armaceutical t bearing loa
nited States cf new therap
R NON CURR
ables includetee deposits
RED TAX AS
ed tax assetsease of € 0.3
sed for the pmarkets with
calculated aroved by the atements aticular, the vaue, while thue.
ENTS
ity instrumen
A., France
s LLC, U.S.A.
A.
ating Trust, U
A., Italy
y
.
S.A.
tments
an investmecompany focan with comp
company Puies, medical
RENT ASSET
ed in non‐cu on rental an
SSETS
s at 31 Decem3 million. Th
period subseqh the exceptio
according toBoard of Dirt 31 Decembalue in use oe value in us
nts of non‐co
U.S.A.
nt was madcused on orppulsory conve
reTech Ventdevices and
TS
urrent assetnd service co
mber 2012 ahe main defe
52
quent to theon of the Cz
the procedrectors. In alber 2012 anof most of thse of the uni
onsolidated c
de in Erytecphan oncologersion into sh
ures LLC spenew researc
s at 31 Decntracts.
nd 2011 amorred tax asse
explicit foreech Republic
dures describl cases it wand thereforehe cash geneits in Portuga
companies a
Balan
31.12.
5,0
1,4
6,9
ch Pharma Sgy and rare dhares during
ecialises in inh technologi
cember 2012
ount to € 22ets and their
ecast period wc and Turkey
bed for eachs greater thae no loss inerating units al and in Tur
re as follows
ce sheet valu
12 31.12
00
72 1,4
51 1
94
87
78
63
9
10
61
25 1,9
S.A., a late diseases. The g 2013.
nvestments ies.
2 are € 3.8
.8 million anchange in 20
were estimaty estimated a
h cash genean the book v the value resulted signrkey, resulted
s:
ue Percen
.11 31.12
‐ n
472 11.
121
94
87 4.
78
63
21
10
31
977
developmeinvestment
in start‐up c
million and
nd € 22.5 mil012 are analy
ted on a pruat 2.3% and 4
erating unit, value recognof goodwill nificantly gred slightly gre
ntage of equowned
2.12 31.1
n.a.
.3% 11
n.s.
n.s.
.2% 4
n.s.
n.s.
n.s.
n.s.
n.s.
nt stage Freconsists of a
companies in
refer mainl
lion respectiyzed below.
dent 4.0%
was nised was
eater eater
uity
12.11
‐
1.4%
n.s.
n.s.
4.2%
n.s.
n.s.
n.s.
n.s.
n.s.
ench a non
n the
ly to
vely,
€ (thou
Balanc
Addi
Utiliz
Chan
Balanc
€ (thou
Balanc
Addi
Utiliz
Chan
Balanc
“Other”gains o
13. INVEN
Inventotheir refollows
€ (thou
Raw m
Interm
Finishe
Total i
The incconsoliduring
14. TRADE
Trade arespect10.8 mof certabe diffi2011. T
usands)
ce at 1 Janua
tions
zations
nge in report
ce at 31 Dece
usands)
ce at 31.12.2
tions
zation
nge in report
ce at 31.12.2
” deferred tan intercomp
TORIES
ories at 31 Deespective obs:
usands)
materials and
mediates and
ed goods
inventories
crease in invdation of Fa2012.
E RECEIVABL
accounts rectively. Theseillion (€ 11.8ain receivablcult to collecTrade receiva
ry
ing entities
ember
011
ing entities
2012
ax assets refeany transact
ecember 201solescence p
supplies
work‐in‐pro
ventories is arma‐Projekt
LES
ceivable at 3 are shown 8 million at 3es which, duct. Average dables on the
Re
ers mainly totions.
12 and 2011provisions of
ocess
mainly duet (€ 1.3 mill
31 Decembernet of the a1 Decemberue to the natdays of salesacquisition b
53
evaluation ofintangible
assets
3,640
0
(1,719)
0
1,921
o temporary
amount to €f € 3.8 millio
to the higheion) and to
r 2012 and 2llowance forr 2011) and isure of the cus outstandingbalance sheet
f e s
Profit antempdiffer
0
0
) (4
0
1 1
differences a
€ 126.4 million and € 3.2
31.1
1
er volumes inventories
2011 amounr doubtful acs consideredustomers in qg are 65, an it of Farma‐P
d loss porary ences
9,975
4,840
4,508)
292
0,599
arising from
on and € 108million. Com
12.2012
31,716
17,188
77,484
126,388
of corporateof the new
nt to € 155.4ccounts whicd to be sufficquestion or timprovemenrojekt are €
2012
22,494
6,289
(6,295)
349
22,837
Other
8,879
1,449
(68)
57
10,317
the eliminat
.3 million resmposition of
31.12.2011
27,612
17,568
63,071
108,251
e products aproduct po
4 million andch at 31 Decient to coverthe destinatint over those2.7 million.
2
20,
7,
(5,7
22,
T
22,
6,
(6,2
22,
ion of unrea
spectively, ninventories
Cha2012/2
4,
(3
14,
18,
as well as tortfolios acqu
d € 141.2 micember 2012r potential loon markets, e at 31 Decem
2011
,221
,992
719)
0
,494
Total
,494
,289
295)
349
,837
lized
et of is as
ange2011
,104
380)
,413
,137
o the uired
illion 2 is € osses may mber
15. OTHER
Other rfollows € (thou
Tax rec
Balanc
Other
Total o
Tax rectax excaccoundue resupplie
16. OTHER
At 31 Drelate m
17. SHORT
A break
€ (thou
Short t
Depos
Cash o
Total scash e
The reacquisitacquisit Short te At 31 Dmillion,UK subRecord
R RECEIVABL
receivables as:
usands)
ceivable
ces due from
other receiva
ceivable comceeding thosts and otherlated to theers and other
R CURRENT
December 20mainly to pre
T TERM FINA
k down is sho
usands)
term time de
sits in bank cu
on hand
short term fiequivalents
duction in ctions of Farmtion of intan
erm time de
December 20, mainly in tbsidiary Recoati İlaç).
LES
amount to €
m employees
ables
prises value se required.r credits. The Swedish Orr parties and
ASSETS
012 other cuepaid expens
ANCIAL INV
own in the fo
eposits
urrent accou
inancial inve
cash is to bma‐Projekt ingible assets (
posits have m
012 cash andhe U.S. subsordati Pharm
25.0 million
and agents
added tax (V Receivablese decrease irphan settleto computed
rrent assets ses.
ESTMENTS,
ollowing tabl
unts
estments, cas
be attributedn Poland (€ (€ 49.0 millio
maturities of
d cash equivasidiary Recormaceuticals
54
(€ 21.3 mill
VAT) receivas from empn the “otherment (€ 1.5d credits und
amount to €
CASH AND
e.
sh and
d mainly to 12.5 millionon).
f six months o
alents are dedati Rare DisLtd.) and in
ion at 31 De
31.12.2
18,
2,
3,
24,
ble (€ 12.9 mployees and r” line is due million). Incder licensing‐
€ 2.2 million
CASH EQUI
31.12.2
1,
37,
38,
the paymen) and of Acc
or less.
enominated seases), in pn Turkish lira
ecember 201
012 3
588
682
713
983
million) and aagents com
e to the collecluded in th‐in agreemen
(€ 3.2 millio
IVALENTS
2012 3
,221
,154
43
,418
nt of dividecent in Russi
in euro (23.0ounds sterlina (6.3 millio
1) and their
31.12.2011
13,814
1,581
5,916
21,311
advance paymprise advanection of theis line are ants.
n at 31 Dece
31.12.2011
58,574
46,555
35
105,164
nds (€ 60.0 a (€ 66.7 mi
0 million), inng (1.9 millioon in the Tu
breakdown
Cha2012/20
4,7
1,
(2,2
3,6
ments of incnces on expe last installmadvances pai
ember 2011)
Cha2012/2
(57,3
(9,4
(66,7
million), toillion) and to
n U.S. dollarson, mainly inurkish subsid
is as
nge011
774
101
203)
672
come ense ment id to
) and
ange2011
353)
401)
8
746)
o the o the
(4.0 n the diary
18. SHARE Share cshares the pre As at 3place, t2010‐2of the odate. Tnot exe2013 pgrant e
Stock o
Date o
29 Oct
11 Feb
27 Oct
9 Febru
8 May
Total
Additiocompar Treasur1,280,0shares,employtreasur
Hedginvalue aequity a
Other rthe parand resof IAS 1
Retaineincreasincreas
EHOLDERS’ E
capital – At 3with a par veceding year.
31 Decemberthe 2006‐20013 plan, unoptions is theThe stock opercised withilan are vestexpire. Option
options outst
of grant
ober 2008
bruary 2009
ober 2009
uary 2011
2012
onal paid‐in red to the pr
ry stock – A000 shares co for an amoyees under try stock is € 4
g reserve – at 31 Decemas a hedging
reserves – Thrent companserves for am19, recognize
ed earnings ase by € 56.0 mse of 1.8% co
EQUITY
31 Decembervalue of € 0.1.
r 2012 the C09 plan, undnder which oe average ofptions grantein the fifth yed over a perns cannot be
anding at 31
Strike pr
4.07
3.89
4.87
6.75
5.30
capital – Atreceding yea
At 31 Decemompared to ount realizedthe 2006‐2046.3 million a
In accordancber 2012 of g reserve.
hese amountny in the amomounts booked in the stat
and net incommillion as compared to th
r 2012 the is125 each for
Company hasder which opptions were f the parent cd under the year of the driod of five ye exercised if
1 December 2
rice (€)
Ooutst at 1.
730 1,97
940 11
700 3,04
505 4,28
070
9,40
31 Decembr.
mber 2012, those held ad of € 5.6 m009 stock opand the avera
ce with IAS 3interest rate
t to € 26.3 mount of € 5.2ed directly totement of co
me for the ympared to 3he € 116.4 m
55
sued and fulr a total of €
s two stock ptions grantgranted on 9company’s li2006‐2009 pdate of grantears and thof the employe
2012 are ana
Options tanding.1.2012 du
73,750
10,000
43,750
80,000
‐ 4
07,500 4,
ber 2012 add
8,505,790 sat 31 Decemmillion, to seption plan. Tage purchase
39 the € 5.0e swaps qua
million at 31 2 million, reso equity in amprehensive
year – These 31 Decembermillion 2011 n
ly paid share26,140,644.
option plansed on three9 February 2sted share pplan are vestt expire. Theose not exercee leaves the
alyzed in the
Options granted
ring 2012
0
0
0
0
,650,000
,650,000
ditional paid
shares are hber 2011. Thervice the eThe total cose price per sh
million liabilalifying as a c
December 2serves for grapplication ofe income, of
amount to €r 2011. Net net income.
e capital con50 and rema
s in favor of occasions a2011 and on 8price during tted over a pee stock optiocised within te company b
following tab
Optionsexercised
during 2012
(743,750)
(5,000)
(531,250)
0
0
(1,280,000)
d‐in capital i
held as treashe change is exercise of ost incurred hare is € 5.44
lity arising frcash flow he
2012 and inclants receivedf IFRS 2 of € € 1.4 million
€ 501.7 millioincome for t
sists of 209,1ains unchang
f certain groare still outst8 May 2012.the 30 days period of fourons granted the eighth yeefore they a
ble.
s
Optiocancelle
or expire
(42,50
(30,00
(105,00
0 (520,00
0 (140,00
(837,50
s € 83.7 mi
sury stock adue to the soptions granfor the purc4.
rom the meaedge is recog
lude the statd for a total 4.3 million an.
on at 31 Decthe year is €
125,156 ordiged compare
up employeetanding, and The strike pprior to the gr years and tunder the 2ear of the dare vested.
ons ed ed
Optoutstandin
31.12.2
00) 1,187,
00) 75,
00) 2,407,
00) 3,760,
00) 4,510,
00) 11,940,
llion, unchan
and decreasesale of 1,280ted to compchase of cur
asurement atgnized direct
tutory reservof € 15.4 mind in applica
cember 2012118.5 million
inary ed to
es in d the price grant hose 2010‐te of
tions ng at 2012
,500
,000
,500
,000
,000
,000
nged
e by 0,000 pany rrent
t fair tly in
ve of illion ation
2 and n, an
The shamillion accordaresolve Interimdividen
19. MINOR
All consowned
20. LOANS
At 31 D
areholders’ ewithholding
ance with IAed.
m dividend – Dnd for 2012 o
RITY INTERE
solidated com.
S
December 20
equity of theg tax alreadAS 12 defer
During the yeof € 0.20 per
EST
mpanies are
12 and 2011
e Italian comdy paid, andrred taxes a
ear the Boardshare, for a t
100% owne
1, medium an
56
panies includd their distrre not reco
d of Directortotal amount
d except for
nd long‐term
des untaxed ribution is sgnized on t
rs of Recordat of € 40.1 m
the Italian s
loans includ
reserves of €ubject to tahese reserve
ati S.p.A. resomillion.
ubsidiary of
de:
€ 101.1 milliaxation undes until the
olved to dist
Orphan Euro
on, net of € er fiscal lawir distributio
ribute an int
ope which is
16.6 w. In on is
erim
99%
€ (thou
Loans g
Loan grswap, r
Loans ginstallmamortiz
Loans g
Loan gr
Loan grby 2014
Various
Various
Various
Loan grrepaid
Guaranwith in€ 15 m$ 40 m€ 26 m£ 5 m
Total a
Portion
Change
Total lo
Portion
Change
Total lo
* Net o** Net
The aveswaps, At 31 D
usands)
granted to Rec
ranted by Cenrepayable in s
granted by thements throughzation period
granted to oth
ranted to Dr. F
ranted to Dr. F4
s loans grante
s loans grante
s loans grante
ranted by Komin 2012
nteed senior nternational inillion at a fixedillion at a fixedillion at a fixedillion at a fixed
amortized cost
n due within o
e in the fair va
oans in curren
n due after on
e in the fair va
oans in non‐cu
of direct issue of direct issue
erage effectiis 4.05%.
December 20
cordati S.p.A.:
ntrobanca, at vemi‐annual in
e Ministry of Eh 2013, at an a(2004‐2013) a
her Group com
F. Frik İlaç by C
F. Frik İlaç by V
ed to Dr. F. Frik
ed to Recordat
ed to Farma‐Pr
mercni Banka t
notes issued bystitutional invd interest rated interest rated interest rated interest rate
t of loans
one year
alue of the por
nt liabilities
e year
alue of the por
urrent liabiliti
costs of € 0.2 e costs of € 0.
ive interest r
12, the repay
:
variable interenstallments sta
Economic Devannual interesand at 0.825%
mpanies:
Citibank, at va
Vakifbank, at v
k İlaç repaid in
ti España S.L. r
rojekt sp. z z.o
to Herbacos R
y Recordati S.vestors: e of 4.52% repe of 5.50% duee of 5.02% duee of 6.09% due
rtion due with
rtion due afte
ies
million amort1 million amo
rate at 31 De
yment sched
57
est rate coverearting 2012 th
elopment repst rate of 3.30%% before that
ariable interes
variable intere
n 2012
repayable by 2
o. repayable b
Recordati, at v
A. (Luxembou
paid in 2011 e 2014 e 2014 e 2014
hin one year
r one year
tized using theortized using th
ecember 201
dule of long‐t
ed by an interrough 2022
payable in ann% during the
st rate, repaid
est rate, repay
2013
y 2013
ariable intere
urg) privately p
e effective inthe effective in
12, applying t
term debt du
rest rate
ual
in 2012
yable
st rate,
placed
erest methodnterest metho
the rates res
ue after 31 D
31.12.2012
*67,961
139
0
2,123
0
127
2
0
**65,535
135,887
8,147
0
8,147
127,740
1,371
129,111
. d.
sulting from
December 20
31.12.20
74.7
2
2,7
3,8
2
65,4
147,3
11,6
11,6
135,7
1,7
137,5
the interest
13 is as follow
11
59
74
22
06
19
53
‐
36
74
43
16
0
16
27
91
18
rate
ws:
€ (thou
2014
2015
2016
2017
2018 a
Total
On 30 Nyear reEuropemillion variablethroughflow heThe merecogninstallmcovena• th• th
th• th
muFor the The sertrancheEuro haEuro adenomchargesvalue oincreasincreas The totcash flofinancin4.14% equity a The demodify The nocovena
usands)
and subseque
November 20esearch and ean Investmein the first qe interest rah December edge, effectiveasurement ized directlyments were ants which, ife ratio of cone ratio of coan 3.00 to 1.e ratio of EBust exceed 3e year ended
ries of guaraes in various ave been covt a variable inated in Eus on the debof the swapsse in the fairse of debt an
tal amount oow hedge, tong for the dand 4.85% rand stated a
rivative instr them indepe
ote and guarants which, if
ent years
010 the Paredevelopme
ent Bank, amquarter 2011ate and a du2022. In Junvely convertat fair valu
y in equity arepaid for af not met, consolidated neonsolidated n00; BITDA to con.00 to 1.00. 31 Decembe
anteed seniocurrencies avered with a interest raturo have bet from fixed at 31 Decemr value of thd under curr
of the notes o fix a rangeuration of threspectively. s a current li
ruments andendently fro
rantee agreef not met, co
ent Companynt program.
mounts to € 71, net of expeuration of 12ne 2012 the ing the intere of the swand stated a total of € 6uld lead to aet debt to conet debt to E
nsolidated ne
er 2012 the a
r notes issueat fixed interea cross‐currete equivaleneen covered to variable amber 2012 ghe underlyinrent assets as
was simultan within whiche notes. At The € 3.9 miability (see N
d the hedgedm each othe
ement coveriuld lead to a
58
y undersigned. The loan, 75.0 million,enses of € 0.2 years with loan was covrest charges wap at 31 Deas a current6.8 million. T request for onsolidated nEBITDA (for a
et interest e
above condit
ed at the enest rates. Thncy interest nt to the Euwith an int
at the same agenerated anng debt. Ths ‘Fair value o
neously covech the intere31 Decemb
million fair vaNote 28).
d items are lier.
ing the guar request for
d a loan agrefor which Cof which € 3.3 million. Thsemi‐annuavered with aon the debtecember 201t liability (seThe loan agrimmediate rnet equity mua period of t
expense (for
tions were am
d of 2004 byhe tranches drate swap efuribor 6 moterest rate sabovemention asset of € is amount isof hedging d
ered with a fst rate can fer 2012 the alue of the c
nked and th
ranteed senioimmediate r
eement withCentrobanca 30 million whe main termal repaymentn interest rat from variab12 generateee Note 28)reement increpayment ofust be less thtwelve conse
a period of
mply fulfilled
y Recordati Sdenominatedffectively conths rate plswap effectioned conditio1.4 million, as recognizederivatives (fa
further interefluctuate in oupper and lcash flow he
e Group doe
or notes increpayment of
Centrobancreceived fuere cashed ims and condits of capital ate swap, quable to a fixedd a liability . During 20ludes the fof the loan: han 0.75; ecutive mont
twelve cons
d.
S.A. (Luxembd in currencienverting thelus a spreadvely convertons. The meaan amount ed in the balaair value hed
est rate swaorder to optower limits edge is recog
es not intend
cludes the fof the notes:
73,
6,
6,
6,
33,
127,
a to fund a tunding fromin 2010 and tions providefrom June 2alifying as a d rate of 2.57of € 1.1 mi12 the first ollowing fina
ths) must be
secutive mon
bourg) compes other than whole debt d. The tranting the inteasurement atequivalent toance sheet adge)’.
p, qualifying imize the coof the rangegnized direct
d to terminat
ollowing fina
,415
,818
,818
,818
,871
,740
hree the € 45 e for 2012 cash 75%. illion two ncial
e less
nths)
rises n the into nches erest t fair o the as an
as a st of e are tly in
te or
ncial
• coco
• thfis
• th3.0
At each
21. STAFF
This proGroup’fund is
€ (thou
Balanc
Additio
Utiliza
Chang
Chang
Balanc
The marapportwith IAin the FPharmaparameof the ftax effe
22. DEFER
Deferrechange € (thou
Balanc
Additio
Utiliza
Chang
Balanc
The incacquisitamoun
nsolidated nnsolidated ne ratio of concal quarters e ratio of EB00 to 1.00. h quarter end
LEAVING IN
ovision at 31s obligation as follows:
usands)
ce at 1 Janua
ons
tion
es in reporti
e in fair valu
ce at 31 Dece
ain part of thto) in the ItaAS 19 amountFrench subsia (€ 0.6 millieters updatefunds at 31 Dect.
RED TAX LIA
ed tax liabilited as follows:
usands)
ce at 1 Janua
ons
tion
es in reporti
ce at 31 Dece
crease of € tion of the ct refers to th
net worth atnet earnings fnsolidated nthen ended
BIT to consoli
d starting 31
NDEMNITIES
1 December 2towards its
ry
ng entities
e
ember
his liability isalian compants to € 13.1 mdiary Laboraon) and in Od at 31 DeceDecember 20
ABILITIES
ties at 31 De:
ry
ng entities
ember
9.8 million ccompany Acche deferred t
t any time mfor each fiscaet debt as ofmust be lessidated net in
December 2
S
2012 and 201employees
s to be attribnies. The valumillion. The ratoires BouchOrphan Europember 2012 d011 which is
ecember 201
compared tocent LLC andtax liabilities
59
must not beal year; f the last days than 3.00 tonterest expen
2004 the abo
11 is € 17.9 mdetermined
buted to theue of this furemaining pahara Recordape (€ 0.5 midetermined recognized i
12 and 2011
o the precedd is includedon the € 49.
e less than t
y of any fiscao 1.00; nse for any p
ve condition
million and €in accordan
e staff leavinnd at 31 Decart of this proati (€ 3.1 milllion). The faan adjustmen the statem
are € 15.9 m
ding year is d under the 6 million allo
the sum of €
l quarter to
period of fou
ns were ampl
€ 16.7 millionce with IAS
ng indemnitycember 2012ovision complion), in the air value calcent of € 2.2 mment of comp
million and €
almost entiline “Changeocated to the
€ 170,0 mill
EBITDA for th
r fiscal quart
ly fulfilled.
n respectively19. The rol
2012
16,692
708
(1,690)
0
2,152
17,862
y fund (TFR, 2 as measureprises employGerman subculation madmillion compaprehensive in
6.0 million r
2012
6,049
568
(663)
9,918
15,872
rely to be aes in reportie intangible a
lion plus 25%
he period of
ters must exc
y and reflectsl forward of
20
19,2
1,0
(1,4
(2,1
16,6
trattamentoed in accordyee benefit psidiary Recode using actuared to the vncome net of
respectively,
20
5,6
5
(2
6,0
attributed tong entities”.assets acquir
% of
four
ceed
s the f this
011
259
019
465)
35
156)
692
o fine ance plans rdati uarial value f the
, and
011
699
556
206)
0
049
o the The ed.
At 31 becausdistribu
23. OTHER
Other nportionto the portionliabilitie
24. TRADE
Trade areceiveconsoli
25. OTHER
Other respect
€ (thou
Person
Social
Agents
Balanc
Balanc
Other
Total o
The baProjektfor theinterpr8.4 milamounmillion) The line€ 4.2 mbe paidand of
December 2e no significutions as the
R NON‐CURR
non‐current n of the priceagreements
n of the pricees.
E PAYABLES
accounts payed, at 31 Dedation of Far
R PAYABLES
accounts patively. Their
usands)
nnel
security
s
ce due for th
ce due for th
other payabl
alance due ft, as per the e acquisitionetation of solion, of whict due for th) was also se
e “Other” incmillion which d to the Italia4.1% during
2012 no defecant additiony are essenti
RENT LIABIL
liabilities as e paid for ths. The € 2.1 e paid for the
yable, which cember 201rma‐Projekt
ayable at 31composition
e acquisition
e acquisition
les
or the acquagreements
n of the Turome contractch € 7.0 millihe acquisitioettled in 2012
cludes € 3.8 results froman regional hthe second h
erred tax lianal tax woulially exempt
LITIES
at 31 Deceme acquisitionmillion liabe acquisition
are entirely 2 and 2011accounts for
1 December n is as follows
n of equity
n of marketin
isition of eq, and € 1.4 mrkish compatual clauses:on were pain of Orphan2.
million to bem a mandatohealthcare shalf).
60
abilities wered have to bfrom dual in
mber 2012 an of the newility at 31 Dn of Dr. F. Fri
of a commeamount to r € 2.8 million
2012 and 2s:
ng rights
quity comprimillion due fny was reca the overall d during then Europe, fo
e paid to thery discount oystems (the
e calculatede paid by thncome taxatio
re € 1.8 millw Polish compDecember 20k İlaç and du
rcial nature € 106.9 milln.
2011 amoun
31.1
ses € 1.2 mfor the acquialculated duamount duee year and € llowing the
“Krankenkaon the retaildiscount is o
on subsidiahe group in on.
ion and refepany Farma‐011 referred ue in 2013 is
and include ion and € 9
nt to € 54.0
12.2012
18,326
12,323
972
2,614
0
19,749
53,984
million due foisition of Dr. uring 2012 fe at 31 Decem1.4 million wsettlement w
ssen” (Germ selling priceof 1.83% du
aries’ undistthe event o
er entirely toProjekt, calc entirely to s now include
allocations f8.7 million r
0 million and
31.12.2011
18,559
12,261
602
9,788
118
17,007
58,335
or the acqui F. Frik İlaç. following agmber 2011 wwill be paid dwith Swedis
man healthcare of reimbursring the first
ributed earnof these divid
the outstanculated accorthe outstaned under cur
for invoices trespectively.
d € 58.3 mi
Cha2012/2
(2
(7,1
(1
2,
(4,3
isition of FaThe balancereement onwas reduced during 2013.h Orphan (€
re schemes),sed medicinet half of the
nings dend
nding rding nding rrent
to be The
illion
ange 2011
233)
62
370
174)
118)
,742
351)
rma‐ due the to € . The € 0.6
, and es to year
26. TAX LIA
Tax liabincludeadvanc
27. PROVIS
Provisioother pcontain
€ (thou
Tax
Other
Total p
Change
€ (thou
Balanc
Additio
Chang
Utiliza
Balanc
The adrestruc The uticertainmarketreconsi
28. FAIR V
The intvalue apaying liabilitypayablemillion)
ABILITIES
bilities at 31e tax provisioces already p
SIONS
ons in place provisions fon their compo
usands)
provisions
es in provisio
usands)
ce at 1 Janua
ons
es in reporti
tion
ce at 31 Dece
dditions duricturing of the
lization line events, defting rights in idered and th
VALUE OF HE
terest rate sat 31 Decemthe current
y refers to ae on the gua) and to the i
1 December ons computeaid, and with
at 31 Deceor future conosition and c
ons are as fol
ry
ng entities
ember
ng the year e sales force
includes the fined in the France and hus the prov
EDGING DER
waps coverimber 2012 givt expected fn interest raranteed seninterest rate
2012 and 20ed by the cohholding taxe
mber 2012 antingencies wchanges.
lows:
are relatedin France exp
reversal of tagreement in Belgium, ision was rev
RIVATIVES
ng the cash ve rise to a uture rates ate swap deior notes issu swap coveri
61
011 amount ompanies ones payable.
amount to €which are un
d mainly to tpected to tak
the € 7.3 millwith the Mshould happversed.
flows relate€ 5.0 millioninstead of tefining a collued by Recoring the loan g
to € 9.8 min the basis o
€ 20.5 millioncertain as to
31.12.2
4,
15,
20,
the estimateke place in 20
lion providedMerck group pen. The prob
ed to mediumn liability whthe rates agar which limrdati S.A. Chgranted by C
llion and € 1of estimated
n overall ano timing and
2012 3
,695
,849
,544
ed € 6.6 mi013.
d for in 2010and relativebability of th
m and long‐hich represenreed for themits the fluctemical & PhaCentrobanca
12.1 million d taxable inc
d include tad value. The
31.12.2011
3,248
18,565
21,813
2012
21,813
10,373
0
(11,642)
20,544
llion cost of
0 to cover thee to the salehe event hap
term loans mnts the unree duration otuation of tharmaceutica(€ 1.1 million
respectivelycome, net of
x provisionsfollowing ta
Cha2012/2
1,
(2,7
(1,2
20
21,4
3,9
6
(4,1
21,8
f the announ
e probability e of pitavastppening has b
measured atealized benefof the loans.he interest rl Company (€n).
y and f tax
and ables
ange2011
,447
716)
269)
011
413
949
604
153)
813
nced
that tatin been
t fair fit of The
rates € 3.9
29. BANK O Bank ooverdra2011 isThe con
30. ACQUI
During Farma‐and theof the c FARMA€ (thou
Non‐cu
Prop
Intan
Defe
Curren
Inven
Trad
Othe
Tax r
Othe
Shor
Non‐cu
Loan
Curren
Trad
Othe
Tax l
Bank
Good
Cost o
Regardvalue othe comwhich anature allocati
OVERDRAFT
overdrafts anafts and tems due to the fnsolidation o
ISITION OF A
the year thProjekt sp. ze marketing consolidation
A‐PROJEKT SPusands)
urrent asset
perty, plant a
ngible assets
erred tax asse
nt assets
ntories
e receivables
er receivable
receivable
er current ass
rt‐term finan
urrent liabili
ns – due after
nt liabilities
e payables
er payables
iabilities
k overdrafts a
dwill
of the acquisi
ing the compof the assets mpany’s asseallocate the as it allowsion is, howev
TS AND SHO
nd short‐termporary use financing reqof Farma‐Proj
A SUBSIDIA
e Group acqz o.o. was acrights to its n of the new
P. Z O.O.
s
nd equipme
ets
s
s
sets
cial investme
ities
r one year
and short‐ter
ition
pany Farma‐and liabilitie
ets and liabilicost of the cs the Group ver, not yet d
ORT‐TERM L
rm loans at of lines of cquirements rjekt account
RY
quired 100% cquired and five productly acquired c
nt
ents, cash an
rm loans
Projekt the ees acquired ties at the dacompany. Wto reinforce
definite.
62
LOANS
31 Decembcredit. The inelated to thes for € 2.9 m
of the sharein Novembet lines was cocompany, alr
nd cash equiv
entire differewas allocateate of acquis
We believe the its presenc
ber 2012 arncrease of € e acquisition
million.
es of two cor the acquisoncluded. Theady comme
B
valents
ence betweeed to goodwisition did notat the value ce on the Po
re € 56.0 m42.4 millions concluded
ompanies: inition of the he following tented in the
ook valuea
40
638
348
1,281
2,681
10
101
105
91
(6)
(2,785)
(293)
(23)
(2,785)
(597)
en the cost ofill. The meast result in theof the acquolish market
million and cn compared towards the
n August theRussian comtable summapreceding no
Fair value adjustments
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
f acquisition surement of e identificatioisition residet. As allowed
comprise mto 31 Deceme end of the y
Polish compmpany Accentarizes the effotes.
Fair valuassets liabilacqu
1,
2,
(2,7
(2
(2,7
(5
16,
15,
and the carrthe fair valuon of any itees in its stratd by IFRS 3,
ainly mber year.
pany t LLC fects
ue of and ities uired
40
638
348
,281
,681
10
101
105
91
(6)
785)
293)
(23)
785)
597)
,094
,497
rying ue of m to tegic , the
ACCENT€ (thou
Non‐cu
Intan
Defe
Curren
Othe
Non‐cu
Defe
Curren
Othe
Tax l
Good
Cost o
The alloattributwas estfair valstrategwith hig
31. FAIR V
As presof finan
T LLC usands)
urrent asset
ngible assets
erred tax asse
nt assets
er receivable
urrent liabili
erred tax liab
nt liabilities
er payables
iabilities
dwill
of the acquisi
ocation of thting an amoutimated to bue of intangic nature of gh growth ra
VALUE OF FIN
scribed by IFncial assets a
s
ets
s
ities
ilities
ition
he price paid unt of € 49.6be 20 years. gible assets, the businessates. The allo
NANCIAL IN
RS 7 hereunand liabilities
in excess of 6 million to sThe residualis of € 27.0
s acquired wocation of the
NSTRUMENT
der are state:
63
the book vaome propriel amount wh0 million andwithin the Groe cost of acq
TS
ed the balan
B
lue of the asetary producthich, net of td was allocaoup’s objectiuisition is no
ce sheet valu
ook valuea
51
1
43
0
(30)
(7)
58
ssets and liabts in the portthe € 9.9 milated to goodives to expanot yet definite
ues and fair
Fair value adjustments
49,591
0
0
(9,918)
0
0
39,673
bilities acquirtfolio with a lion tax effedwill taking ind into intere, as allowed
values at 31
Fair valuassets liabilacqu
49,
(9,9
39,
26,
66,
red was maduseful life w
ect related tointo accountnational mard under IFRS
1 December 2
ue of and ities uired
,642
1
43
918)
(30)
(7)
,731
,976
,707
de by which o the t the rkets 3.
2012
€ (thou
Financ
Shor cash
Trad
Equit
Othe
Hedg
Financ
Borro
‐ loan
‐ loan
‐ loan
‐ loan
Trad
Othe
Hedg
Bank
The hedloans bequivalrate loa
32. DISCLO
The Groaction wstructu As pres Credit Rsingle cdue to accoun18.4 mpublic An allolosses o Interesfinanciaand invlimit thloans c
usands)
cial assets
rt‐term finanand cash eq
e receivables
ty investmen
er receivable
ging derivativ
cial liabilities
owings
ns at fixed in
ns at variable
ns at fixed in
ns at variable
e payables
er payables
ging derivativ
k overdrafts a
dging instrumby interest ralent to their ans or fixed i
OSURE OF F
oup constantwhen necessre in order to
scribed by IFR
Risk – The Gcustomer anthe large nt receivable.illion of recehospitals whwance for don collection
t Rate Risk –al instrumenvestment inshe risk arisinovered by de
cial investmeuivalents
s
nts
s
ves (fair valu
s
nterest rates
e interest rat
nterest rates
e interest rat
ves (cash flow
and short‐ter
ments and thate swaps arefair value innterest loan
INANACIAL
tly monitors sary. The obo fund growt
RS 7 the mai
Group closelyd an internanumber of c. In particulaeivables overhich, despite oubtful accon, is in place.
– The Group nts. The flucstruments thg from intererivative fina
ents,
ue hedge)
covered with
tes
tes covered w
w hedge)
rm loans
he fixed intere booked at fnasmuch as ts converted
RISKS
the financiabjective of groth, both orga
n financial ris
y controls itsal reporting sustomers, thar, at 31 Decdue by moretheir very lo
ounts of € 10
raises fundsctuation of merefore afferest rate flucancial instrum
64
h interest rat
with interest
rest loans anfair value. Ththey are shointo variable
l risks to whioup financiaanic and thro
sks to which
s credit exposystem. At 3heir geograpcember 2012e than 90 dayong paymen0.8 million, w
s using debt market interecting the Grctuations by ments, which
te swaps
t rate swaps
nd variable inhe book valuort‐term assee interest rate
ch it is exposl policy is to ough busines
the Group is
osure throug31 Decembephical distrib2, total tradeys. Of these,t times, do
which is cons
and invests est rates infloup’s net finestablishing
h are used to
Boo
1
1
nterest loans e of the remets and liabie loans by in
sed in order achieve a bass expansion.
s exposed are
gh the allocaer 2012 the cbution and te receivables, € 5.5 millionnot represenidered to be
excess cashuences the cnancial chargg fixed interehedge risk a
ok value
38,418
155,359
6,925
24,983
1,371
66,906
2,252
139
67,961
106,926
63,773
4,983
55,987
converted inmaining assetlities or are terest rate sw
to take immalanced and p.
e hereby disc
ation of credcredit exposuhe average s of € 166.1 n are receivant a significae sufficient to
in money mcost and retges. The Groest loans or and are neve
Fair va
38,
155,
6,
24,
1,
66,
2,
66,
106,
63,
4,
55,
nto fixed intes and liabilitivariable intewaps.
ediate mitigaprudent fina
closed.
dit limits to ure is not cramount of million incluables from Itaant risk situao cover pote
market and ourns of the oup’s policy variable inter of a specula
alue
,418
,359
,925
,983
,371
,906
,252
97
,417
,926
,773
,983
,987
erest ies is erest
ating ncial
each itical each de € alian tion. ential
other debt is to erest ative
nature,currentsignific Foreignits opefluctuagroup pnet recnet recnet recnet recnet paynet paynet pay
Some statemthe netsterlingmillion)variatioincomenegativ Liquiditfinanciaactivitiegeneratdebt orgroup hgrantedthe Groshort‐tethat theactivitieat their
33. OPERA
The finOperatprepara Followipharmathese t
, to minimizet amount ofant impact o
n Currency Rierating resulttions on its tpositions in teivables in Teivables in Reivables in Reivables in Pyables in pouyables in U.S.yables in Japa
of the grouents and bat equity valug (15.1 millio), in Romaniaons on the coe and bookeve by € 3.7 m
ty Risk – Thal resources es. The twoted or absorr the degreehas at its disd by a numboup’s financerm financiae funds and es, are enougr natural due
ATING SEGM
ancial informting segmentation and dis
ing the acqaceutical segwo business
e such fluctuf net debt, on net financ
isk – The Grots and the vtrade balancthese currencTurkish lira ofRussian roublRomanian ronPolish zloty ofunds sterling . dollars of 1anese yen of
up companielance sheetsues of these on), in Swissan ron (6.4 monversion ofed to the trmillion.
e liquidity rfor the its oo main factorbed by opere of liquidity sposal a suppber of leadingial assets anal investmentcredit lines cgh to satisfy e dates.
MENTS
mation reports, is preparesclosure of th
quisition of gment and thsegments as
ations, as deit is believeial expenses
oup is exposevalue of its ces denomincies are the ff 45.7 milliones of 159.9 mn of 10.4 millf 5.5 million;of 14.2 millio3.9 million;f 533.7 millio
es are locats are convertcompanies as francs (2.1million) and f these valueanslation re
risk to whichongoing busors which deations and bof financial ply of liquidig Italian andnd its loans ats, cash and currently avainvestment
rted by line oed using the he Group con
Orphan Euhe orphan drs at 31 Decem
65
escribed in nd that the c.
ed to foreignequity. In ated in currefollowing: n; million; lion; on;
on.
ted outside ted from theare denomin1 million), inin Russian roes is recognizserve in sha
h the Groupsiness and foetermine thy investmeninvestmentsty readily av internationaare set out cash equivalailable, in addneeds, work
of business asame accounsolidated fin
urope two rugs segmentmber 2012 a
ote 20. As achange in c
currency exparticular, tencies other
the Europeeir local currnated mainlyn Turkish liraoubles (1,644zed in the coareholders’ e
may be exor the develoe Group’s lits, and on ths and markevailable for ital financial inin notes 17,lents, loans adition to thosking capital re
and by geogrnting principnancial state
main busint. The follownd includes c
a result of thurrent inter
change rate the group isthan the eu
ean Monetarencies into ey in U.S. dolla (34.6 millio4.2 million). onsolidated sequity which
posed is theopment of itquidity are, he other, theet conditionsts operationsnstitutions. , 20 and 29 and bank ovese generatedequirements
aphical areaples and repoments.
ness segmenwing table shocomparative
his policy andest rates wo
fluctuations s exposed touro. As at 31
ry Union aneuro. At 31 lars (21.5 mion), in Czec The effect ostatement oh, at 31 De
e inability tots industrial on the one
e expiry and rs. At 31 Decs and plentifThe terms awhich addreerdrafts. Thed by operatios and the rep
, in complianorting standa
nts can be ows financiadata.
d consideringould not ha
which can ao exchange December 2
nd their incDecember 2illion), in pouh crowns (2of exchange f comprehencember 201
o raise sufficand comme
e hand, the renewal termcember 2012ful lines of cand conditioness, respectie Group belions and finanpayment of d
nce with IFRSards used for
identified, al information
g the ve a
ffect rate 2012
come 2012 unds 246.3 rate nsive 12, is
cient ercial cash ms of 2 the redit ns of vely, eves ncing debts
S 8 – r the
the n for
€ (thou
2012
Revenu
Expens
Operat
2011
Revenu
Expens
Operat
* Includ
€ (thou
31 Dec
Non‐cu
Invento
Trade r
Other c
Short‐tcash eq
Total a
Non‐cu
Curren
Total li
Net ca
31 Dec
Non‐cu
Invento
Trade r
Other c
Short‐tcash eq
Total a
Non‐cu
Curren
Total li
Net ca* Includ** Nonloans, h
The phprevaleorganiz
sands)
ues
ses
ting income
ues
ses
ting income
des the pharm
sands)
cember 2012
urrent assets
ories
receivables
current asset
term investmquivalents
assets
urrent liabilit
nt liabilities
iabilities
pital employ
cember 2011
urrent assets
ories
receivables
current asset
term investmquivalents
assets
urrent liabilit
nt liabilities
iabilities
pital employdes the pharm‐allocated amhedging instru
harmaceuticaently dedicatzational poin
maceutical che
2
s
ts
ments, cash a
ties
yed
1
s
ts
ments, cash a
ties
yed maceutical chemounts includeuments, bank o
al chemicals ted to the pt of view.
P
emicals operat
P
and
and
emicals operate: other equityoverdrafts and
operations aproduction of
66
harmaceuticasegment*
752,394
(606,044
146,350
692,717
(550,018
142,699
tions
harmaceuticasegment*
615,189
118,753
138,648
22,658
895,248
34,921
177,581
212,502
682,746
477,179
101,917
123,675
19,141
721,912
24,336
175,831
200,167
521,745tions.y investments,d short‐term l
are considerf active ingr
al *
Orphanse
4 7
) (55
0 2
7 6
) (48
9 2
al *
Orphanse
9 11
3
8 1
8
‐
8 14
1
1 1
2 1
6 13
9 11
7
5 1
1
‐
2 14
6
1 1
7 1
5 13
, short‐term inoans.
red part of tredients for t
n drugs gment
No
75,923
5,309)
20,614
69,319
8,541)
20,778
n drugs gment
No
16,091
7,635
16,711
4,489
‐
44,926
641
14,120
14,761
30,165
17,362
6,334
17,556
5,368
‐
46,620
467
15,434
15,901
30,719
nvestments, c
the pharmacthis business
on‐allocated
‐
‐
‐
‐
‐
‐
on‐allocated **
6,925
‐
‐
1,371
38,418
46,714
129,111
69,117
198,228
1,977
‐
‐
1,791
105,164
108,932
137,518
29,398
166,916
ash and cash e
ceutical segms, both from
Consolidacco
828,
(661,3
166,
762,
(598,5
163,
Consolidacco
738,
126,
155,
28,
38,
1,086,
164,
260,
425,
596,
108,
141,
26,
105,
977,
162,
220,
382,
equivalents,
ment as theym a strategic
ated ounts
,317
353)
,964
,036
559)
,477
ated ounts
,205
,388
,359
,518
,418
,888
,673
,818
,491
,518
,251
,231
,300
,164
,464
,321
,663
,984
y are and
The fol
€ (thou
Europe
of w
Austra
Americ
Africa
Total r
The Grand Gro
34. NET FI
The fol € (thou
Depos
Short‐t
Short‐t
Liquid
Bank o
Loans
Loan n
Short t
Net cu
Loans
Loan n
Non‐cu
Net fin(1) Inclu
35. RECONAND G The reconsoli
lowing table
usands)
e
which Italy
alasia
ca
revenue
oup’s produoup investm
NANCIAL PO
lowing table
usands)
sits in bank cu
term time de
term investm
assets
overdrafts an
‐ due within
notes issued
term borrow
urrent financ
‐ due after o
notes issued
urrent loans
nancial posit
udes change in
NCILIATION GROUP CON
conciliation dated shareh
presents ne
ction facilitieents are loca
OSITION
summarizes
urrent accou
eposits
ments
nd short‐term
one year (1)
wings
cial position
one year (1)
s
tion
n fair value (fa
BETWEEN SOLIDATED
between thholders’ equ
t revenues b
es are locateated for the m
s the Compan
unts and cash
m loans
ir value hedge
THE PAREN SHAREHOL
he parent coity and net in
67
by geographic
ed almost exmost part in
ny’s net finan
h on hand
e).
NT COMPANLDERS’ EQU
ompany’s shncome is as f
c area:
7
2
8
xclusively in Ethis area.
ncial position
31.1
(5
(6
(2
(6
(6
(12
(15
NY’S SHAREITY AND NE
areholders’ follows:
2012
728,116
219,898
40,614
30,366
29,221
828,317
Europe and t
n:
12.2012
37,197
1,221
0
38,418
55,987)
(8,147)
0
64,134)
25,716)
62,205)
65,535)
27,740)
53,456)
HOLDERS’ ET INCOME
equity and
2011
673,390
221,603
37,776
26,822
24,048
762,036
therefore no
31.12.2011
46,590
58,574
0
105,164
(13,555)
(11,616)
0
(25,171)
79,993
(70,253)
(65,474)
(135,727)
(55,734)
EQUITY AND
net income
Cha2012/2
54,
(1,7
2,
3,
5,
66,
on‐current as
Cha2012/2
(9,3
(57,3
(66,7
(42,4
3,
(38,9
(105,7
8,
7,
(97,7
D NET INCO
and the G
ange 2011
,726
705)
,838
,544
,173
,281
ssets
ange 2011
393)
353)
0
746)
432)
,469
0
963)
709)
,048
(61)
,987
722)
OME
roup
€ (thou
Record
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36. LITIGA The paexpecte On 29 Sstating of € 0.2no amopoint othe Prowas co16 Octfirstly bCompaNovemthe ComMilan).2003 hCompa On 26 JInnova unilatearbitrarfor theBayer’s2011 lawhich c
usands)
dati S.p.A.
lidation adju
gin in invento
ted deferred
er adjustmen
ned earnings inning of they booked by
come for theiaries, net ofdati S.p.A.
nds receivediaries
ation adjustm
lidated finan
ATION AND C
rent companed to result i
September 2certain addi2 million andount was duof view, and ovincial Tax Cncluded partober 2007. Aby the Milan ny with noti
mber 27, 2009mpany and a On the basisave been essny appealed
January 2011Pharma agrally decidedry. Innova Phe damages is unilateral teast the Frankconsidered B
ustments:
ories
d tax
nts
of consolidae year, net ofy Recordati S.
e year of conf amounts al
d from conso
ments
ncial stateme
CONTINGEN
ny and some n any signific
2006 the Comitional taxes d VAT of € 0.e as it considwas supportCommission tially in the CAn appeal woffice of thece served on9 the Regionaccepted thes of that decsentially fully that decisio
1 the Frankfuainst Bayer d by Bayer harma, whichncurred. Theermination vkfurt Court ofBayer’s unila
ted subsidiaf amounts .p.A.
solidated ready booke
olidated
ents
NT LIABILITIE
subsidiariescant liability.
mpany receivfor the fisca1 million anddered the asted in its posof Milan. Th
Company’s fawas filed agae Tax Authorin 7 January 2nal Tax Come principal acision, the clay confirmedn before the
urt court issuHealthcare on the basih considers te abovemenvalid. The cof Appeal conateral termin
68
S 31.1
(
ries
d by
ES
are party to.
ved a notice l year 2003 id additional ssessment flasition by profhe first degravour with dainst that judities with no2009. With amission of Mppeal of theaims includedand the Come Corte supre
ued a judgemfollowing this of a contthe terminatntioned judgmpany decidfirmed the junation of its
Shareholder12.2012
336,357
(30,439)
9,599
(125)
247,591
102,074
(3,713)
661,344
o certain lega
of tax assessin the amoutax liabilitiesawed both frfessional opiee judgemenecision n. 53dgment withtice served oa decision daMilan rejectee Agenzia ded in the abovmpany has pama di cassaz
ment of first inhe terminatitractual intetion invalid, tgement rejecded to appeaudgement ofagreement
s’ equity 31.12.2011
307,644
(26,095)
8,204
(45)
214,733
98,231
(8,232)
594,440
al actions, th
sment from nt of: corpors of € 2.6 mirom a legitiminion. An appnt before th39/33/07 dath the Regionon 8 Novembated June 10ed the interloelle Entrate dve mentionedaid all amounzione (Suprem
nstance on ton of the Orpretation wtook legal accted Innova al the court’sf first instancwith Innova
Net incom 2012
85,03
(4,344
1,39
(68
102,07
(64,988
118,48
e outcomes
the Internal rate tax of € llion. The Comacy as well peal was thee Provincial ted 11 Octobnal Tax Commber 2008 and, 2009 n. 139ocutory appedi Milano (Ind tax assessmnts due. On 2me Court of C
he lawsuit wOctegra® licewhich the coction to obtaPharma’s cs decision ance issued on Pharma reg
me for the ye2 20
32 78,
4) (5,5
95 1,
5) (5
74 98,
8) (55,8
84 116,
of which are
Revenue Se2.3 million, ompany belieas a substan
erefore filed Tax Commis
ber 2007, filemission of Md secondly by9/32/09, fileeal presentenland Revenument for the 26 May 2010Cassation).
which was fileense agreemompany deein compensalaim considend on 25 Oct26 January 2garding Octe
ear 011
,462
559)
,750
561)
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889)
,434
e not
rvice IRAP eved ntive with ssion ed on Milan y the d on ed by ue of year 0 the
ed by ment, emed ation ering ober 2011 egra®
valid. Bas addentry oBayer €expens
Bayer then coitional remeof appearanc€ 0.3 millionses.
onvened Innedy to the ree. In Decembn which rep
nova Pharmaesolution. Inber 2012 theresents a th
69
before the nova Pharme parties agrehird of the o
Frankfurt Coma, considerieed to a settof the penal
ourt requesting Bayer’s rtlement undeties request
ing the paymrequests unfer which Innted plus a th
ment of penaounded, fileova Pharma hird of the
alties d its paid legal
ATTAC
RECORDeveloppharma
RECOFADorman
INNOVAMarket
RECORDevelop
RECORPharmaHolding
BOUCHDevelop
RECORDorman
FARMADorman
RECORDevelop
RECORDevelop
RECORProvisio
LABORADevelop
RECORMarket
RECORMarket
RECORMarket
JABA RMarket
JABAFAMarket
BONAFMarket
RECORHolding
ORPHAMarket
ORPHAMarket
RECORDATSUBSIDIAR
CHMENT 1.
DATI S.P.A. pment, productioaceutical chemica
ARMA S.R.L. nt, holds pharma
A PHARMA S.P.A.ting and sales of p
DATI ESPAÑA S.L.pment, productio
DATI S.A. Chemicaceutical Compang company
HARA RECORDATI pment, productio
DATI PORTUGUESnt
ARECORD LTDA nt, holds pharma
DATI RARE DISEApment, productio
DATI IRELAND LTpment, productio
DATI S.A. on of services, hol
ATOIRES BOUCHApment, productio
DATI PHARMA Gmting and sales of p
DATI PHARMACEting and sales of p
DATI HELLAS PHAting and sales of p
ECORDATI S.A. ting and sales of p
ARMA PRODUTOSting of pharmaceu
ARMA PRODUTOting of pharmaceu
DATI ORPHAN DRg company
AN EUROPE SWITZting and sales of p
AN EUROPE MIDDting and sales of p
TI S.p.A. ANDIES INCLUD
Consolidated Co
on, marketing andals
ceutical marketin
. pharmaceuticals
. on, marketing and
cal and ny
S.A.S. on, marketing and
SA LDA
ceutical marketin
ASES INC.* on, marketing and
D on, marketing and
lds pharmaceutic
ARA RECORDATI Son, marketing and
mbH pharmaceuticals
UTICALS LTD pharmaceuticals
ARMACEUTICALS Spharmaceuticals
pharmaceuticals
S FARMACÊUTICOuticals
OS FARMACÊUTICOuticals
RUGS S.A.S.
ZERLAND GmbH pharmaceuticals
LE EAST FZ LLC pharmaceuticals
D SUBSIDIARED IN THE C
ompanies
d sales of pharma
ng rights
d sales of pharma
d sales of pharma
ng rights in Brazil
d sales of pharma
d sales of pharma
cal marketing righ
S.A.S. d sales of pharma
S.A.
OS S.A.
OS S.A.
RIES CONSOLIDAT
aceuticals and
aceuticals
aceuticals
aceuticals
aceuticals
hts
aceuticals
70
TED ACCOU
Head Office
Italy
Italy
Italy
Spain
Luxembour
France
Portugal
Brazil
U.S.A.
Ireland
Switzerland
France
Germany
United Kingd
Greece
Portugal
Portugal
Portugal
France
Switzerland
United AraEmirates
UNTS AT 31
e Share
26,140
1,258,
1,920,
238,966
rg 82,500
4,600,
24,94
166
11,979
200,0
d 2,000,
14,000
600,0
om 15,000
13,900
2,000,
50,00
50,00
57,000
d 20,00
b 100,0
DECEMBER
Capital
,644.50
400.00
000.00
6,000.00
,000.00
000.00
40.00
6.00
,138.00
000.00
000.00
,000.00
000.00
,000.00
,000.00
000.00
00.00
00.00
,000.00
00.00
000.00
2012
Currency
Euro
Euro
Euro
Euro
Euro
Euro
Euro
BRL
USD
Euro
CHF
Euro
Euro
GBP
Euro
Euro
Euro
Euro
Euro
CHF
AED
ConsolidationMethod
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
n
ORPHAMarket
ORPHAMarket
ORPHADevelop
ORPHAMarket
ORPHAMarket
ORPHAMarket
ORPHAMarket
ORPHAMarket
FIC MEMarket
HERBACDevelop
RECORMarket
RUSFICMarket
RECOFAMarket
RECORMarket
RECORDevelop
RECORMarket
FARMAMarket
ACCENTHolds p
* Recor** Inco*** Acq**** Es***** A******
AN EUROPE NORDting and sales of p
AN EUROPE PORTUting and sales of p
AN EUROPE S.A.R.pment, productio
AN EUROPE UNITEting and sales of p
AN EUROPE GERMting and sales of p
AN EUROPE SPAINting and sales of p
AN EUROPE ITALY ting and sales of p
AN EUROPE BENELting and sales of p
DICAL S.A.R.L. **ting of pharmaceu
COS RECORDATI spment, productio
DATI SK s.r.o. ting and sales of p
C LLC ting and sales of p
ARMA ILAÇ Ve Hating of pharmaceu
DATI ROMÂNIA Sting and sales of p
DATI İLAÇ Sanayi pment, productio
DATI POLSKA Sp. ting and sales of p
A‐PROJEKT Sp. z oting and sales of p
T LLC.****** pharmaceutical m
rdati Corporationorporated FIC S.A.quired in 2011, costablished in 2011Acquired in 2012,* Acquired in 2012
Consolidated Co
DIC A.B. pharmaceuticals
UGAL LDA pharmaceuticals
L. on, marketing and
ED KINGDOM LTDpharmaceuticals
MANY GmbH pharmaceuticals
N S.L. pharmaceuticals
S.R.L. pharmaceuticals
LUX BVBA pharmaceuticals
uticals
s.r.o. on, marketing and
pharmaceuticals
pharmaceuticals
ammaddeleri Sanuticals
S.R.L. pharmaceuticals
Ve Ticaret A.Ş.**on, marketing and
z o.o.**** pharmaceuticals
.o.***** pharmaceuticals
marketing rights
n renamed Record.S. during 2012 onsolidated from1. , P&L consolidate2, P&L consolidat
ompanies
d sales of pharma
D
d sales of pharma
ayi Ve Ticaret L.Ş
** d sales of pharma
dati Rare Diseases
1 October 2011.
ed from 1 Septemted from 16 Nove
aceuticals
aceuticals
Ş.
aceuticals
s Inc. during 2012
In 2012 Dr. F. Fri
mber 2012. ember 2012.
71
Head Office
Sweden
Portugal
France
United Kingd
Germany
Spain
Italy
Belgium
France
Czech Repub
Slovakia
Russian Federa
Turkey
Romania
Turkey
Poland
Poland
Russian Federa
2
k Ilaç renamed Re
e Share
100,0
5,00
320,0
om 50,00
25,60
1,775,
40,00
18,60
173,7
blic 25,600
33,19
ation 3,560,
5,00
5,000,
80,875
400,0
3,360,
ation 20,00
ecordati Ilaç and
Capital
000.00
00.00
000.00
00.00
00.00
065.49
00.00
00.00
700.00
,000.00
93.92
000.00
00.00
000.00
,367.00
000.00
000.00
00.00
incorporated Yen
Currency
SEK
Euro
Euro
GBP
Euro
Euro
Euro
Euro
Euro
CZK
Euro
RUB
TRY
RON
TRY
PLN
PLN
RUB
ni Recordati Ilaç.
ConsolidationMethod
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
Line‐by‐line
n
C
R
IN
R
RP
B
R
F
R
R
R
LAR
R
RLT
RP
JA
JAF
BF
RS
OG
OL
O
O
O
Consolidated com
RECOFARMA S.R.L
NNOVA PHARMA
RECORDATI ESPAÑ
RECORDATI S.A. CPharmaceutical Co
BOUCHARA RECOR
RECORDATI PORTU
ARMARECORD LT
RECORDATI RARE
RECORDATI IRELA
RECORDATI S.A.
ABORATOIRES BORECORDATI S.A.S.
RECORDATI PHARM
RECORDATI PHARMTD
RECORDATI HELLAPHARMACEUTICA
ABA RECORDATI S
ABAFARMA PRODARMACÊUTICOS
BONAFARMA PROARMACÊUTICOS
RECORDATI ORPH.A.S.
ORPHAN EUROPE GmbH
ORPHAN EUROPE LC
ORPHAN EUROPE
ORPHAN EUROPE
ORPHAN EUROPE
panies
L.
S.P.A.
ÑA S.L.
hemical and ompany
RDATI S.A.S.
UGUESA LDA
TDA
DISEASES INC.*
ND LTD
OUCHARA
MA GmbH
MACEUTICALS
AS LS S.A.
S.A.
DUTOS S.A.
ODUTOS S.A.
AN DRUGS
SWITZERLAND
MIDDLE EAST FZ
NORDIC A.B.
PORTUGAL LDA
S.A.R.L.
Recordati S.p.A. (Parent)
Re
100.00%
100.00%
68.447% 3
100.00%
99.94%
98.00%
1
1
1
1
5
3.33% 9
0.68% 9
9
ecordati S.A. (Lux)
RecordPharmGmbH
1.553%
0.06%
2.00%
00.00%
00.00%
00.00%
00.00%
55.00%
96.67%
99.32%
90.00% 10.00%
72
PERC
ati ma H
Bouchara Recordati S.A.S.
100.00%
%
CENTAGE OF OWN
Recordati España S.L.
RecoOrpDrS.A
45.00%
100.00%
100.00%
100.00%
100
100
100
100
100
NERSHIP
ordati phan ugs A.S.
Orphan Europe S.A.R.L.
.00%
.00%
.00%
.00%
.00%
Herbacos Recordati s.r.o.
ReIl
ecordati aç A.Ş.
Total
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
C
OK
OG
O
O
O
F
H
R
R
RHL
R
RA
RE
FA
A
* Re** I*** *********
Consolidated com
ORPHAN EUROPE KINGDOM LTD
ORPHAN EUROPE GmbH
ORPHAN EUROPE
ORPHAN EUROPE
ORPHAN EUROPE
IC MEDICAL S.A.R
HERBACOS RECOR
RECORDATI SK s.r.
RUSFIC LLC
RECOFARMA ILAÇ Hammaddeleri San.Ş.
RECORDATI ROMÂ
RECORDATI İLAÇ SA.Ş.***
ECORDATI POLSK
ARMA‐PROJEKT S
CCENT LLC *****
ecordati Corporatncorporated FIC SAcquired in 2011* Established in 2** Acquired in 20*** Acquired in 2
panies
UNITED
GERMANY
SPAIN S.L.
ITALY S.R.L.
BENELUX BVBA
R.L.**
RDATI s.r.o.
.o.
Ve nayi Ve Ticaret
ÂNIA S.R.L.
Sanayi Ve Ticaret
KA Sp. z o.o.****
Sp. z o.o.*****
**
tion renamed RecS.A.S. during 20121, consolidated fr2011. 012, P&L consolid2012, P&L consoli
Recordati S.p.A. (Parent)
Re
0.08% 9
1
100.00%
100.00%
1
cordati Rare Disea2 om 1 October 20
dated from 1 Septidated from 16 No
ecordati S.A. (Lux)
RecordPharmGmbH
99.92%
00.00%
00.00%
ases Inc. during 2
11. In 2012 Dr. F.
tember 2012. ovember 2012.
73
PERC
ati ma H
Bouchara Recordati S.A.S.
100.00%
100.00%
2012
. Frik Ilaç rename
CENTAGE OF OWN
Recordati España S.L.
RecoOrpDrS.A
99.4
100.00%
d Recordati Ilaç a
NERSHIP
ordati phan ugs A.S.
Orphan Europe S.A.R.L.
100.00%
100.00%
100.00%
99.00%
46% 0.54%
and incorporated
Herbacos Recordati s.r.o.
Ret
100.00%
10
Yeni Recordati Ila
ecordati Ilaç A.Ş.
Total
100.00%
100.00%
100.00%
99.00%
100.00%
100.00%
100.00%
100.00%
100.00%
00.00% 100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
aç.
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
RE
CORDATI S.DISCLOSUR ATTACHME Type of ser
Accounting
Accounting
Accounting
Due diligen
Due diligen
Tax complia
Signature o
Signature o
Other servi
.p.A. AND SURE OF AUDIT
ENT 2.
rvice
g audit
g audit
g audit
nce
nce
ance
on returns an
on returns an
ces
UBSIDIARIESTORS’ FEES
nd attestation
nd attestation
S FOR ACCOU
Provider
Auditor
Auditor
NetworkCompan
NetworkCompan
NetworkCompan
NetworkCompan
ns Auditor
ns NetworkCompan
NetworkCompan
74
UNTING AUD
r of the servi
of Parent Co
of Parent Co
k of auditor ony
k of auditor ony
k of auditor ony
k of auditor ony
of Parent Co
k of auditor ony
k of auditor ony
DITS AND O
ce
ompany
ompany
of Parent
of Parent
of Parent
of Parent
ompany
of Parent
of Parent
OTHER SERV
Recipient
Parent Com
Subsidiaries
Subsidiaries
Parent Com
Subsidiaries
Subsidiaries
Parent Com
Subsidiaries
Subsidiaries
ICES
A
mpany
s
s
mpany
s
s
mpany
s
s
FeesAmounts in €
72,045
7,900
307,443
193,500
42,808
24,690
36,600
7,850
3,000
RECORDAT
ATTESTAUNDER A 1. The undeSquindo, as provisions o
• the ade
• and the
of the admfinancial sta
2. The unde
2.1. the con
• have beEurope2002;
• corresp
• providethe Com
2.2. The repas well as a Milan, 7 Ma Signed by Giovanni ReChief Execut
TI S.p.A. AND
ATION INARTICLE
ersigned, Giothe Manage
or Article 154
equacy with
e effective ap
ministrative aatements at a
ersigned mor
nsolidated fin
een prepareean Union th
pond to the a
e a fair and cmpany and it
port on operdescription o
arch 2013
ecordati tive Officer
D SUBSIDIAR
N RESPEC154‐BIS O
ovanni Recoer responsibl4‐bis, clauses
respect to th
pplication,
and accountiand for the y
reover attest
nancial state
d in accordarough Regul
amounts sho
correct reprets consolidat
rations includof the main r
RIES
CT OF THOF LEGIS
rdati, in his ce for the pre 3 and 4, of L
he Company
ing proceduear ended 31
t that:
ments at 31
nce with theation (EC) 16
wn in the Co
esentation ofed subsidiar
des a reliablerisks and unc
75
HE CONSSLATIVE D
capacity as teparation of Legislative De
structure,
res applied 1 December
December 2
e Internation606/2002 of
ompany’s acc
f the financiies.
e operating acertainties to
SOLIDATEDECREE 5
the Chief Exethe Companecree no. 58
in the prep2012.
012:
nal Financial the Europea
counts, book
al conditions
and financial o which they
Signed byFritz SquinManager the comp
ED FINAN58/98
ecutive Officeny’s financialof 1998, her
paration of t
Reporting Stan Parliamen
s and record
s, results of o
review of thare exposed
y ndo responsible any’s financi
NCIAL ST
er of the Co statements,reby attest:
the Compan
tandards, as nt and Couns
ds; and
operations a
e Company a.
for preparingial reports
TATEMEN
mpany, and , pursuant to
ny’s consolid
endorsed bysel, dated 19
and cash flow
and of the G
g
NTS
Fritz o the
ated
y the 9 July
ws of
roup
1
PROPOSED 2012 ANNUAL REPORT
2
Review of operations
To Our Shareholders,
The Annual Report of the Parent Company for the year ended 31st December 2012, which we submit to you for your approval, reports net income of € 85,032,199, an increase of € 6,570,217 compared to the previous year. Important results were achieved in 2012 with regard to the growth and internationalization of the Group: in August the acquisition of 100% of the share capital of Farma‐Projekt Sp. z.o.o, a Polish pharmaceutical company located in Krakow, was successfully concluded; in November the acquisition was completed of the rights to OTC pharmaceuticals and dietary supplements for marketing in Russia by the local subsidiary RUSFIC LLC located in Moscow; in December an agreement was signed for the acquisition of rights regarding a portfolio of products for the treatment of rare diseases and other disorders, marketed mainly in the United States of America, which was successfully concluded at the beginning of 2013 as reported in the section on subsequent events. As concerns the internationalization policy, the expansion of centralized units continued in order to guarantee the integration, monitoring and co‐ordination of foreign subsidiaries. The review of operations in the consolidated annual report attached to this report may be consulted for further information on operations and growth strategies. The income statement is given below with the classification of costs by function. € (thousands) 2012 % of
revenue 2011 % of
revenue Change
2012/2011 %
Net revenues 273,357 100.0 268,018 100.0 5,339 2.0
Cost of sales (135,052) (49.4) (127,746) (47.7) (7,306) 5.7
Gross profit 138,305 50.6 140,272 52.3 (1,967) (1.4)
Selling expenses (49,334) (18.0) (49,114) (18.3) (220) 0.4
R&D expenses (24,517) (9.0) (26,755) (10.0) 2,238 (8.4)
G&A expenses (19,930) (7.3) (19,898) (7.4) (32) 0.2
Other income (expense), net (5,174) (1.9) (863) (0.3) (4,311) n.s.
Operating income 39,350 14.4 43,642 16.3 (4,292) (9.8)
Financial income (expense), net (5,665) (2.1) (5,555) (2.1) (110) 2.0
Dividends 64,988 23.8 55,889 20.9 9,099 16.3
Pretax income 98,673 36.1 93,976 35.1 4,697 5.0
Provision for income taxes (13,641) (5.0) (15,514) (5.8) 1,873 (12.1)
Net income 85,032 31.1 78,462 29.3 6,570 8.4
Net revenues increased by 2% compared to the same period in the previous year. Sales of specialty pharmaceuticals in Italy contracted by 1.4% compared to the year before, due to up‐front payments of € 5.3 million received in 2011 from our licensees for the launch of the lercanidipine‐enalapril fixed
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combination in Italy. As concerns the sales performance of prescription products, growth was recorded for Cardicor® (bisoprolol), a beta blocker indicated for the treatment of chronic and stable, from moderate to serious cardiac insufficiency together with good progress by sales of Urorec® (silodosin) and Zanipril® (lercanidipine+enalapril), launched in the second quarter of 2011, while the contraction in sales of Peptazol®, Zanedip® and Rextat® was due to competition from generic versions. Self‐medication specialty pharmaceuticals grew by 4.6% compared to the previous year, the result in particular of growth in sales of Proctolyn® (anti‐hemorrhoids) and the continuous growth of Alovex™, indicated for the treatment of mouth ulcers, which consolidated its position as the leading product for this disorder. Growth was also recorded for sales of Eumill® (single dose eye drops) which, together with Imidazyl®, is maintaining Recordati’s leadership in the collyrium market. The Dentosan® line of oral hygiene products entered the portfolio of self‐medication products in the last quarter of 2012. Sales of pharmaceutical chemicals, consisting of active ingredients produced at the Campoverde di Aprilia plant, increased by 8.9% compared to 2011, mainly due to a significant increase in volumes of sales for the following products: verapamil, mebeverine, papaverine, dimenhydrinate, aciclovir and diphenhydramine, and also to a favorable exchange rate. Selling expenses, which include the impact of new legislation that came into force in 2010 that involves a charge borne by producers equal to 1.83% (4.1% in the second half of 2012) of the price to the public net of VAT, increased slightly compared to the year before, due in particular to the more severe regulations introduced in the second half just mentioned. Total R&D costs amounted to € 24,517 thousand, a decrease of 8.4% compared to expenses incurred in the previous year. General and administrative expenses were practically unchanged compared to 2011. Other net expenses of € 5,174 thousand incurred included € 2,233 thousand of the pay‐back due to AIFA (Italian Medicines Agency) in place of the 5% price reduction on some selected products. Furthermore, other expenses relate to company reorganization costs and accessory costs incurred for acquisitions. Other income, however, relates to the reversal of prior year provisions. Operating income was € 39,350 thousand, down by 9.8% compared to the year before, due to the changes reported above; it amounted to 14.4% of revenues. Net finance charges were € 5,665 thousand, a slight increase compared to 2011. Tax as a percentage of pretax income was down compared to the year before, mainly due to the increase in dividends received from subsidiaries. A brief summary is given below of the net financial position, while further details are given in item 42 of the notes to the financial statements.
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€ (thousands) 31.12.2012 31.12.2011 Change 2012/2011
Cash and cash equivalents and current receivables 59,875 67,447 (7,572)
Short‐term borrowings (196,308) (123,587) (72,721)
Net current financial position (136,433) (56,140) (80,293)
Loans and receivables due after one year 19,408 20,639 (1,231)
Borrowings – due after one year (128,123) (160,481) 32,358
Net financial position (245,148) (195,982) (49,166)
Dividends were paid during the year totaling € 60 million, of which € 21.3 million for the balance on the dividend relating to 2011 and € 38.7 million as an interim dividend relating to 2012. Furthermore, the reduction in the net financial position relates to investments in subsidiaries for the capitalization of the subsidiary Recordati S.A. Luxembourg, which purchased a product portfolio in Russia, and for the acquisition in Poland of Farma‐Projekt Sp. z.o.o. It also relates to the acquisition of the Dentosan® product line. OTHER INFORMATION Treasury stock consisting of 1,280,000 shares was sold during the year for € 5,636 thousand, following the exercise of stock option rights by Group employees. The Company held treasury stock consisting of 8,505,790 shares at 31st December 2012 accounting for 4.07% of the share capital. The section “Principal risks and uncertainties” in the review of operations in the consolidated annual report attached to this report may be consulted for an analysis and description of the principal risks and uncertainties to which the Company is exposed pursuant to paragraphs 1 and 2 of article 2428 of the Italian Civil Code.
The information required under paragraph three, point 6‐bis of Art. 2428 of the Italian Civil Code concerning the Company’s objectives and policies in respect of financial risk management is fully reported in the notes to the financial statements. In compliance with the requirements contained in Art. 4, paragraph 7 of the Regulation on related‐party transactions adopted with Consob Resolution 17221 of 12th March 2010 and subsequent amendments, the Company reports that it has adopted “Regulations for related‐party transactions”, the full text of which is available on the Company website at www.recordati.it (in the “Corporate Governance” section). The Company has a secondary headquarters at 4 Via Mediana Cisterna, Campoverde di Aprilia (Latina). Shares held by directors, statutory auditors, general managers and other key management personnel are reported in the Remuneration Report published in accordance with Art. 123‐ter of the Consolidated Finance Act. In compliance with Art. 37, paragraph two of the Markets Regulations adopted with Consob deliberation No. 16191 of 29th October 2007 as subsequently amended, we report that, although Recordati S.p.A. is controlled by Fimei Finanziaria Industriale Mobiliare ed Immobiliare S.p.A., it is not subject to management and co‐ordination by that company within the meaning of articles 2497 et seq of the Italian Civil Code. This is because Fimei Finanziaria Industriale Mobiliare ed Immobiliare S.p.A. is a mere financial holding company with no operations of any kind and it does not exert any influence or conduct any activities which might affect the management decisions and organization of Recordati S.p.A.. The Corporate Governance Report pursuant to article 123 bis of Legislative Decree 58/98, which contains information pursuant to article 89 bis of the Issuers’ Regulations, may be consulted on the Company website
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at www.recordati.it, in the section “Corporate Governance”. INTERCOMPANY TRANSACTIONS AND RELATED ISSUES At 31st December 2012, intercompany accounts with Group companies and the parent company Fimei S.p.A. consisted of payables of € 222,305 thousand and receivables of € 108,265 thousand. The most significant items are as follows:
receivables of € 20,622 thousand for loans granted to Group companies;
payables of € 106,759 thousand for loans received from Group companies;
trade receivables of € 36,226 thousand from subsidiaries;
trade payables to subsidiaries of € 11,890 thousand;
receivables of € 50,129 thousand from subsidiaries for the management of the centralized cash pooling treasury system;
payables of € 100,552 thousand to subsidiaries for the management of the centralized cash pooling treasury system and for accounts held for them.
Sales and services to Group companies in 2012 amounted to € 122,424 thousand. Dividends were received during the year as follows: € 45,000 thousand from Recordati S.A. Chemical & Pharmaceutical Company and € 19,988 thousand from Bouchara Recordati S.a.s.
Tax receivables include those from the parent company Fimei S.p.A. amounting to € 574 thousand, which relate to the tax credit for the year calculated on the basis of estimated taxable income. That credit was transferred by the Company to the parent company as a consequence of opting for tax consolidation in accordance with articles 117 to 128 of Presidential Decree 917/1986 as amended by Legislative Decree 344/2003. The following summary is set out in the table below in compliance with Consob deliberation No. 15519 of 27th July 2006:
Percentage of transactions with related parties € (thousands) Total
Related parties Amount %
Percentage of transactions or positions in the balance sheet with related parties
Trade receivables and other 78,202 37,514 47.97
Long‐term financial assets 19,465 19,408 99.71
Short‐term financial assets 51,343 51,343 100
Trade payables and other 73,961 13,166 17.8
Other non‐current liabilities 1,828 1,828 100
Long‐term financial liabilities 128,123 66,980 52.28
Short‐term financial liabilities 196,307 140,331 71.49
Percentage of transactions or positions in the income statement with related parties
Revenue 275,811 122,424 44.39
Income from investments 64,988 64,988 100
Costs of purchases and service provision 165,127 8,302 5.03
Financial income/(expense), net (5,665) (3,712) 65.53
Transactions and positions with related parties as a percentage of cash flows is basically the same as that for the income statement items because the transactions are conducted under normal market conditions.
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SIGNIFICANT TRANSACTIONS, EXCEPTION TO DISCLOSURE OBLIGATIONS The Company decided to take advantage, with effect from 20th December 2012, of the rights not to comply with obligations to publish the reports required when significant extraordinary operations are performed consisting of mergers, demergers, share capital increases through contributions in kind, acquisitions and disposals, in accordance with Art. 70, paragraph 8 and with Art. 71, paragraph 1‐bis of the Issuers’ Regulations issued by Consob with Resolution No. 11971/1999 and subsequent amendments. SUBSEQUENT EVENTS AND BUSINESS OUTLOOK The implementation of company policies, operations at the beginning of the current year, the potential of our products, the financial strength of the Company and the managerial capacities of our personnel lead us to forecast a positive result again in 2013, despite the general slowdown in the economy in Europe and the impact of the measures to contain spending on pharmaceuticals. In January 2013 the acquisition was successfully concluded of all the rights relating to a product portfolio for the treatment of rare diseases and other disorders, which will be marketed in the United States of America by the subsidiary Recordati Rare Diseases Inc. Milan, 7th March 2013 on behalf of the Board of Directors
The Chairman
Ing. Giovanni Recordati
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RECORDATI S.p.A. INCOME STATEMENTS FOR THE YEARS ENDED 31ST DECEMBER 2012 AND 31ST DECEMBER 2011
Income Statement Amounts in euro Notes 2012 2011
Revenue 3 273,150,523 267,457,514
Other revenues and income 4 2,660,429 4,785,334
Total revenue 275,810,952 272,242,848
Raw materials costs 5 (100,018,492) (94,419,202)
Personnel costs 6 (68,170,300) (67,909,564)
Amortization 7 (7,517,788) (7,894,522)
Other operating expenses 8 (65,108,885) (62,925,789)
Changes in inventories 9 4,354,764 4,548,023
Operating income 39,350,251 43,641,794
Income from investments 10 64,988,000 55,889,000
Financial income (expense), net 11 (5,664,799) (5,554,674)
Pretax income 98,673,452 93,976,120
Provision for income taxes 12 (13,641,253) (15,514,138)
Net income for the year 85,032,199 78,461,982
Earnings per share
Basic 0.426 0.394
Diluted 0.402 0.374 Basic earnings per share is calculated on average shares outstanding in the relative periods, consisting of 199,722,208 shares in 2012 and 199,369,542 in 2011. The figures are calculated net of average treasury stock held, which amounted to 9,402,948 shares in 2012 and 9,755,614 shares in 2011. Diluted earnings per share is calculated taking into account stock options granted to employees.
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RECORDATI S.p.A. BALANCE SHEETS at 31st DECEMBER 2012 and at 31st DECEMBER 2011
Assets Amounts in euro Notes 31st December
2012 31st December
2011
Non‐current assets
Property, plant and equipment 13 40,075,289 35,944,001
Intangible assets 14 33,670,461 17,531,101
Investments 15 473,532,993 417,054,241
Loans and receivables 16 19,464,544 20,695,715 *
Deferred tax assets 17 3,386,000 4,869,889
Total non‐current assets 570,129,287 496,094,947
Current assets
Inventories 18 50,925,414 46,570,650
Trade receivables 19 72,976,030 54,335,809
Other receivables 20 5,226,378 3,700,843
Other current assets 21 263,353 318,736
Fair value of hedging derivatives (fair value hedges) 25 1,370,598 1,791,371
Other short‐term receivables 22 51,343,356 31,928,423 *
Short‐term financial investments, cash and cash equivalents 23 8,531,918 35,519,366
Total current assets 190,637,047 174,165,198
Total assets 760,766,334 670,260,145
* € 583,449 restated for comparison purposes.
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RECORDATI S.p.A. BALANCE SHEETS at 31st DECEMBER 2012 and at 31st DECEMBER 2011
Equity and Liabilities Amounts in euro Notes 31st December
2012 31st December
2011
Equity
Share capital 24 26,140,645 26,140,645
Additional paid‐in capital 24 83,718,523 83,718,523
Treasury shares 24 (46,254,125) (53,214,711)
Statutory reserve 24 5,228,129 5,228,129
Other reserves 24 219,967,202 203,232,183
Revaluation reserve 24 2,602,229 2,602,229
Interim dividend 24 (40,077,373) (38,525,218)
Net profit for the year 24 85,032,199 78,461,982
Total shareholders’ equity 336,357,429 307,643,762
Non‐current liabilities
Loans 25 128,123,109 160,481,008
Staff leaving indemnities 26 11,321,144 10,759,236
Deferred tax liabilities 27 1,629,296 2,058,636
Other non‐current liabilities 28 1,827,574 0
Total non‐current liabilities 142,901,123 173,298,880
Current liabilities
Trade payables 29 53,956,772 36,417,250
Other payables 30 17,909,227 14,961,134
Tax liabilities 31 2,046,759 3,661,973
Other current liabilities 32 48,044 63,853
Provisions 33 6,256,856 6,399,298
Fair value of hedging derivatives (cash flow hedges) 34 4,982,747 4,227,201
Loans – due within one year 35 6,957,178 6,952,738
Bank overdrafts and short‐term loans
3649,019,696 528,494
Other short‐term borrowings 37 140,330,503 116,105,562
Total current liabilities 281,507,782 189,317,503
Total equity and liabilities 760,766,334 670,260,145
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RECORDATI S.p.A. STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARS ENDED 31ST DECEMBER 2012 AND 31ST DECEMBER 2011
€ (thousands) 2012 2011
Net income for the year 85,032 78,462
Gains/(losses) on cash flow hedges (755) 72
Valuation of the personnel leaving indemnity fund pursuant to IAS 19 (1,126) 326
Income (expense) for the year recognized directly in equity (1,881) 398
Comprehensive income for the year 83,151 78,860
RECORDATI S.p.A. STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
€ (thousands) Share capital
Addition‐al paid‐in capital
Treasury shares
Statutory reserve
Other reserves
Fair value hedging
instruments
IAS compli‐ance
reserve
Revaluation reserves
Interim dividend
Net (loss)/ income for the year
Total
Balance at 31st December 2010
26,141 83,718 (52,579) 5,228 103,137 (4,299) 89,310 2,602 0 67,892 321,150
Allocation of 2010 net income as per shareholders’ resolution of 13.4.2011:
to reserves 13,279 (13,279) 0
dividends to shareholders (54,613) (54,613)
Purchase of treasury stock (15,872) (15,872)
Sales of treasury stock 15,236 226 15,462
Dividends expired 2 2
Interim dividends (38,525) (38,525)
Comprehensive income for the year 72 326 78,462 78,860
IAS compliance at 31st December 2011 – Stock options 1,180 1,180
Balance at 31st December 2011
26,141 83,718 (53,215) 5,228 116,644 (4,227) 90,816 2,602 (38,525) 78,462 307,644
Allocation of 2011 net income as per shareholders’ resolution of 19.4.2012:
to reserves 18,661 (18,661) 0
dividends to shareholders 38,525 (59,801) (21,276)
Sales of treasury stock 6,961 (1,325) 5,636
Dividends expired 3 3
Interim dividends (40,077) (40,077)
Comprehensive income for the year (755) (1,126) 85,032 83,151
IAS compliance at 31st December 2012 – Stock options 1,276 1,276
Balance at 31st December 2012
26,141 83,718 (46,254) 5,228 133,983 (4,982) 90,966 2,602 (40,077) 85,032 336,357
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RECORDATI S.p.A. CASH FLOW STATEMENT FOR THE YEARS ENDED 31ST DECEMBER 2012 AND 31ST DECEMBER 2011
€ (thousands) 2012 2011
Operating activities
Net income 85,032 78,462
Income from investments (64,988) (55,889)
Depreciation of property, plant and equipment 5,102 5,642
Amortization of intangible assets 2,417 2,253
(Increase)/decrease in deferred tax liabilities 1,054 2,257
Increase/(decrease) in staff leaving indemnities 562 (899)
Other provisions (142) (1,006)
Increase/(decrease) in other non‐current liabilities 1,828 0
Dividends received 64,988 55,889
Trade receivables (18,640) (2,743)
Other receivables and other current assets (1,470) 6,073
Inventories (4,355) (4,548)
Trade payables 17,540 977
Other payables and other current liabilities 2,932 (7,896)
Tax liabilities (1,615) 1,744
Net cash from operating activities 90,245 80,316
Investing activities
Net (investments)/disposals in property, plant and equipment (9,233) (6,419)
Net (investments)/disposals in intangible assets (18,556) (523)
Net (increase)/decrease in equity investments (56,479) (89,957)
Net (increase)/decrease in other non‐current assets 1,231 (20,639) **
Net cash used in investing activities (83,037) (117,538)
Financing activities
Loans – due after one year 0 69,759
Dividends paid (61,353) (93,138)
(Purchase)/sale of treasury stock 5,636 (410)
Effect on shareholders’ equity of application of IAS/IFRS 153 1,508
Repayment of loans (31,933) (15,130)
Net cash from/(used in) financing activities (87,497) (37,411)
Changes in short‐term financial position (80,289) (74,633)
Short‐term financial position at beginning of year * (49,186)
25,447
Short‐term financial position at end‐of‐year * (129,475) (49,186) ** * Includes the total of other short‐term loans, short‐term financial investments and cash and cash equivalents, bank overdrafts and other short‐term borrowings excluding the current portion of medium and long‐term loans.
** € 583,449 restated for comparison purposes.
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RECORDATI S.p.A. NOTES TO THE SEPARATE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2012
1. GENERAL The separate annual financial statements comprise the income statement, the balance sheet, the statement of comprehensive income, the statement of changes in shareholders’ equity the cash flow statement and these notes to the financial statements. In compliance with Legislative Decree No. 38 of 28th February 2005, – in exercising the options provided for by Art. 5 of Regulation (EC) No. 1606/2002 of the European Parliament and Council of 19th July 2002 concerning international accounting standards – the separate company financial statements have been prepared by applying the international accounting standards (IAS/IFRS) issued or revised by the International Accounting Standards Board and homologated by the European Union and also the regulations issued in implementation of Art. 9 of Legislative Decree No. 38/2005. The “IAS/IFRS” are intended as including all the interpretations of the International Financial Reporting Interpretation Committee (“IFRIC”), previously named the Standing Interpretations Committee (“SIC”). The presentation adopted by the Company for the income statement in the separate annual financial statements classifies revenues and expenses by nature. The distinction between the principle of current and non‐current was adopted for the presentation of assets and liabilities in the balance sheet. These financial statements are presented in euro (€) and all amounts in the notes to the statements are rounded to the nearest thousand euro unless otherwise stated.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements have been prepared on a historical cost basis, except for hedging derivatives (and the relative underlying hedged financial liability) for which their fair value has been applied and except for defined benefit plans for which the actuarial valuation was performed as prescribed by IAS 19. The principal accounting policies adopted are set out below.
Balance sheet Property, plant and equipment ‐ Property, plant and equipment is stated at historical cost less accumulated depreciation and any recognized impairment loss. Subsequent costs are only capitalized when it is probable that the future economic benefits will flow to the Company. The costs for ordinary maintenance and repairs are recognized through profit and loss at the time at which they are incurred. The carrying amount of property, plant and equipment is subject to impairment testing to measure any loss in value when events or situations occur which indicate that the carrying amount of the assets can no longer be recovered (see paragraph on impairment). Depreciation is computed on a straight‐line basis using rates which are held to be representative of the estimated useful life of the assets: Industrial buildings 2.5% ‐ 5.5% Plant & machinery 10% ‐ 17.5% Other equipment 12% ‐ 40% The depreciation of an asset begins when it is installed and is ready for use or, in the case of self‐constructed assets, when the assets has been completed and is ready for use. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the
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sales proceeds and the carrying amount of the asset and it is recognized through profit of loss for the period.
Intangible assets ‐ An intangible asset is recognized only if it can be identified, if it is probable that it will generate future economic benefits and its cost can be measured reliably. Intangible assets are valued at purchase cost, net of amortization calculated on a straight‐line basis and on the basis of their estimated useful life which, however, cannot exceed 20 years. Patents, licenses and know‐how are amortized from the year of the first sale of the relative products. Amortization of distribution and license rights is generally calculated over the duration of the contract. Impairment ‐ At each balance sheet date, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash‐generating unit to which the asset belongs. The recoverable amount is the greater of net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of the money and the risks specific to the asset. If the recoverable amount of an asset (or cash‐generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash‐generating unit) is reduced to its recoverable amount. Impairment losses are recognized as an expense immediately. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash‐generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized. A reversal of an impairment loss is recognized as income immediately.
Investments in subsidiaries – Investments in subsidiaries are recognized at cost of acquisition adjusted for impairment. Positive differences arising at the time of purchase between the acquisition cost and the quota of the equity at present values held in the subsidiary attributable to the Company are therefore included in the carrying amount of the investment. Investments in subsidiaries are subject to impairment testing annually or more frequently if necessary in order to test for possible loss of value. Where evidence exists that the value of these investments has been impaired, this is recognized through profit or loss as an impairment loss. Where an impairment loss subsequently reverses or reduces, this is recognized in the income statement as a reversal of impairment within the limits of the cost of acquisition. Receivables (included in non‐current assets) ‐ Receivables are stated at their nominal value and reduced for impairment losses. Inventories ‐ Inventories are stated at the lower of cost or market value, where the market value of raw materials and subsidiaries is their substitution cost while that related to finished goods and work‐in‐process is their net realizable value. Inventories of raw materials and supplies are valued at their average weighted acquisition cost including costs incurred in bringing the inventories to their location and condition at year‐end. Inventories of work‐in‐process and finished goods are measured at their average weighted manufacturing cost which includes the cost of raw materials, consumables, direct labor and indirect costs of production, exclusive of general expenses. Inventories are written‐down if the market value is lower than cost as described above or in the case of obsolescence resulting from slow moving stocks. Trade receivables ‐ Trade receivables are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. Cash and cash equivalents ‐ Cash in banks on demand and highly liquid investments.
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Equity ‐ Equity instruments issued by the Company are recorded at the amount of the proceeds received. The proposed dividend is recognized as a liability at the time of adoption of the dividend resolution at the annual shareholders' meeting. The cost and selling prices of treasury shares are recognized directly in equity and therefore gains and losses on sales are not recognized in the income statement. Loans ‐ Interest‐bearing loans are recorded at the proceeds received, net of direct issue costs. Subsequently, loans are measured using the amortized cost method as prescribed by IAS 39. The amortized cost is the amount of the liability on initial recognition net of capital repayments and transaction costs amortized using the effective interest rate method. If the loans are hedged using derivative instruments qualifying as “fair value hedges”, in accordance with IAS 39, these loans are measured at fair value as are their related derivative instruments. Staff leaving indemnities ‐ Employee benefits presented in the balance sheet are the result of valuations carried out as prescribed by IAS 19. The liabilities recognized in the balance sheet for post‐employment benefit plans represent the present value of the defined benefit obligation, as adjusted for unrecognized actuarial gains and losses and unrecognized past service cost. The present value of the defined benefit obligation is determined using the Projected Unit Credit Method. All actuarial gains and losses are recognized directly in the schedule of gains and losses stated in equity. Until 31st December 2006 the staff leaving indemnities of Italian companies were considered defined benefit plans. The regulations governing those indemnities were amended by Law 296 of 27 December 2006 (2007 Finance Act) and subsequent amendments made in early 2007. In view of those changes and for companies with at least 50 employees in particular, those indemnities are only to be treated as defined benefit plans for the amounts that matured prior to 1st January 2007 (and not yet paid at the balance sheet date), while subsequent to that date they are treated as a defined contribution plan. Trade payables ‐ Include payables arising from supply agreements and are stated at their nominal value. Other payables ‐ Include payables arising in the normal course of business (towards employees and third parties) and are stated at their nominal value. Bank overdrafts and loans ‐ Bank overdrafts and loans are recorded at the proceeds received, net of direct issue costs. Finance charges are accounted for on an accrual basis and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Derivative financial instruments ‐ The Company uses derivative financial instruments to hedge its risks associated with interest rate and foreign currency fluctuations. Such derivatives are measured at fair value at the end of each reporting period. Hedging relationships are of two types, "fair value hedge" or "cash flow hedge". A "fair value hedge" is a hedge of the exposure to changes in the fair value of an asset or liability that is already recognized in the balance sheet. A "cash flow hedge" is a hedge of the exposure to variability in cash flows relating to a recognized asset or liability or to a forecasted transaction. The gain or loss from the change in fair value of a derivative instrument qualifying as a "fair value hedge" is recognized immediately through profit or loss. At the same time, the carrying amount of the hedged item is adjusted for the corresponding gain or loss since the inception of the hedge, which also is recognized immediately through profit or loss. The gain or loss from the change in fair value of a hedging instrument qualifying as a "cash flow hedge" is recognized directly in equity. The gain or loss from the change in fair value of a derivative financial instrument which does not qualify as a hedging instrument is recognized immediately through profit or loss. Provisions ‐ Provisions are recognized when the Group has a present obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.
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Foreign currencies ‐ Transactions in currencies other than the euro are initially recorded at the rates of exchange prevailing on the dates of the transactions. Monetary assets and liabilities denominated in such currencies are retranslated at the rates prevailing on the balance sheet date. Profits and losses arising on exchange are included in profit or loss for the period. Non‐monetary assets and liabilities recorded at the rates of exchange prevailing on the dates of the transactions are not translated on the balance sheet date. Income Statement The expenses are presented in the income statement “by nature”. The choice of this method of presentation is based on the nature of the Company as both a holding and an operating company. The objective is to both optimize and simplify general accounting practices and all the relative compliance activity required by Italian tax regulations. Revenues ‐ Revenues are recognized when it is probable that the economic benefits associated with a transaction will flow to the Company and that the amount of revenue can be measured reliably. Revenue arising from the sale of goods is recognized when the enterprise has transferred the significant risks and rewards of ownership. These are stated net of discounts, rebates and returns. Revenues include income from royalties due on licensed out products and up‐front payments received under licensing agreements. Research and development expenses ‐ All research costs are expensed in the income statement in the year in which they are incurred in accordance with IAS 38. IAS 38 also prescribes that development costs must be capitalized if technical and commercial feasibility of the asset for development or sale have been established. Regulatory and other uncertainties inherent in the development of new products are so high that the guidelines for capitalization under IAS 38 are not met so that development costs are expensed as incurred during the year. Research and development costs include amounts due under collaboration agreements with third parties. Non‐reimbursable government grants ‐ Government grants towards investment in plant are recognized as income over the periods necessary to match them with the related costs and are stated in the balance sheet as deferred income. Non‐reimbursable government grants, including those for research, are booked to the income statement on an accrual basis within the item “other revenue”. Share based payment transactions – According to IFRS 2, stock option plans for employees constitute a part of the remuneration of the beneficiaries, the cost of which is given by the fair value of the options on the grant date. It is recognized through profit and loss at constant rates over the period between the grant and the vesting date, with the balancing entry recognized directly in equity. Financial items ‐ Include interest income and expense, foreign exchange gains and losses, both realized and unrealized, and differences arising from the valuation of securities. Taxation ‐ Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year and tax rates in force at the date of the balance sheet are applied. Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill.
16
Deferred tax is calculated at the tax rates that are expected to apply to the period when the liability is settled or the asset realized. Deferred tax is charged or credited through profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis. Earnings per share ‐ Earnings per share is the net income for the period attributable to ordinary shareholders divided by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is calculated by adjusting the average weighted number of outstanding shares for the effects of all the potential dilutive ordinary shares.
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3. REVENUE
In 2012 this amounted to € 273,151 thousand (€ 267,458 thousand in 2011) and was composed as follows:
€ (thousands) 2012 2011 Change
2012/2011 Net sales 267,192 256,250 10,942
Royalties and up‐front payments 547 5,692 (5,145)
Revenue from services 5,412 5,516 (104)
Total revenue 273,151 267,458 5,693
Net sales revenues are composed as follows: € (thousands) 2012
Italy Abroad 2011
Italy Abroad Pharmaceuticals 167,317 68,867 163,621 64,159
Pharmaceutical chemicals 2,162 28,148 2,259 25,255
Other 698 0 956 0
Total revenue for net sales 170,177 97,015 166,836 89,414
Revenues from pharmaceuticals in Italy were € 167.3 million, an increase of € 3.7 million compared to the year before. Prescription pharmaceuticals grew by € 2.5 million, due in particular to growth in sales of Cardicor®, Urorec® and Zanipril® and notwithstanding the contraction in sales of Peptazol®, Zanedip® and Rextat®, due to competition from generic versions. Self‐medication specialties grew by
€ 1.2 million due to growth in sales of Proctolyn®, Alovex™ and Eumill®. Furthermore, the Dentosan® line of oral hygiene products entered the portfolio of self‐medication specialties in the last quarter of 2012. The review of operations may be consulted for further information on products. Sales abroad also showed growth on the year before in both the pharma sector, up by 7.3%, and in the chemicals sector which recorded growth of 8% on the various products sold. Net sales revenues included € 116,769 thousand (€ 114,435 thousand in 2011) for sales of products to subsidiaries:
€ (thousands) 2012 2011 Change
2012/2011 Recordati Ireland Ltd. 61,220 60,666 554
Innova Pharma S.p.A. 48,080 50,650 (2,570)
Laboratoires Bouchara Recordati S.a.s. 272 232 40
Recordati España S.L. 76 305 (229)
Jaba Recordati S.A. 2,931 2,160 771
Recordati Pharma GmbH 2,763 117 2,646
Recordati Ilaç 451 305 146
Orphan Europe Sarl 976 0 976
Total 116,769 114,435 2,334
Sales in both years to the subsidiary Jaba Recordati S.A. related to a licensing and distribution contract for the specialty pharmaceutical TransAct® LAT.
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Sales in both years to the subsidiary Recordati Pharma GmbH relate to supplies of the product Lipotalon®. All commercial transactions with subsidiaries took place under normal market conditions. Revenues for royalties, up‐front payments and services are composed as follows:
€ (thousands) 2012 2011 Change 2012/2011
Services and royalties to subsidiaries:
Orphan Europe Italy S.r.l. 40 40 0
Innova Pharma S.p.A. 697 1,050 (353)
Recordati Ireland Ltd. 2,084 2,185 (101)
Laboratoires Bouchara Recordati S.a.s. 1,265 1,350 (85)
Recordati Pharma GmbH 394 408 (14)
Recordati España S.L. 337 289 48
Jaba Recordati S.A. 383 323 60
Recordati Ilaç 287 191 96
Recordati Hellas Pharmaceuticals S.A. 84 95 (11)
Herbacos Recordati sro 20 10 10
Recordati Romania S.r.l. 5 0 5
Total services and royalties to subsidiaries 5,596 5,941 (345)
Services and royalties to third parties
Royalties and up‐front payments 363 5,267 (4,904)
Total services and royalties to third parties 363 5,267 (4,904)
Total revenue from services and Royalties 5,959 11,208 (5,249)
The revenues from services to subsidiaries related principally to the “Group Service Agreement” for services performed on behalf of subsidiaries during the year. Proceeds from Laboratoires Bouchara Recordati S.a.s. included royalties amounting to € 497 thousand. The reduction in royalties and up‐front payments was due to milestones received in 2011 for licensing contracts for the fixed combination of lercanidipine with enalapril.
4. OTHER REVENUES AND INCOME
Other revenues amounted to € 2,660 thousand in 2012, compared to € 4,785 thousand in 2011. They include charging employees for the use of hired cars, other indemnities, non‐recurring income, exceptional receivables and gains on the sale of non‐current assets. The item also included € 16 thousand for government grants for plant, € 80 thousand for income from property investments and € 13 thousand for charging for services provided to the parent Company FIMEI S.p.A..
19
Details of grants received for investments recognized in the income statement are given below for the last five years.
€ (thousands)
2008 76
2009 48
2010 20
2011 17
2012 16
Total 177
Income from property investments includes the rent of properties to the parent Company Fimei S.p.A. amounting to € 8 thousand, the rent of premises at the Milan site to Innova Pharma S.p.A. amounting to € 12 thousand and the rent of part of the offices in via Marostica in Milano to Orphan Europe Italy S.r.l. for € 29 thousand.
5. RAW MATERIALS COSTS
This is composed as follows:
€ (thousands) 2012 2011 Change
2012/2011 Raw materials:
from licensing‐in agreements 56,071 60,898 (4,827)
from other 29,423 19,420 10,003
85,494 80,318 5,176
Goods for resale 1,952 1,323 629
Packaging materials 6,230 7,472 (1,242)
Others and consumables 6,342 5,306 1,036
Total 100,018 94,419 5,599
The increase in purchases of raw materials, goods and other materials is due to growth in sales and volumes of production. Purchases of raw materials from others includes € 3,741 thousand for purchases from Recordati Ireland Ltd and € 4,343 thousand of purchases from Innova Pharma S.p.A..
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6. LABOR COSTS
Labor costs were composed as follows:
€ (thousands) 2012 2011 Change
2012/2011
Wages and salaries 47,507 47,165 342
Social security costs 15,434 15,380 54
Salary resulting from stock option plans 1,276 1,180 96
Other costs 3,953 4,185 (232)
Total personnel costs 68,170 67,910 260
The expense for stock option plans is a result of the application of IFRS 2, which requires the valuation of those options as a component of the wages of the beneficiaries and recognition of the cost determined in that manner in the income statement. Other costs include the portions of the leaving indemnity charges for the year destined to pension funds in accordance with the legislation introduced by Law 296 of 27th December 2006. Average labor force figures for the Company are as follows:
2012 2011 Change
2012/2011
Executives 62 64 (2)
Office workers 577 567 10
Manual workers 300 286 14
Total 939 917 22
7. DEPRECIATION AND AMORTIZATION
This is composed as follows:
Amortization of intangible assets
€ (thousands) 2012 2011 Change
2012/2011
Patent rights and marketing authorizations 435 435 0
Distribution, license, trademark and similar rights 1,981 1,815 166
Others 1 2 (1)
Total 2,417 2,252 165
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Depreciation of property, plant and equipment
€ (thousands) 2012 2011 Change
2012/2011
Industrial buildings 1,129 1,122 7
Light constructions 15 16 (1)
General plant 532 522 10
Accelerated depreciation machinery 1,314 1,416 (102)
Normal depreciation machinery 1,111 1,759 (648)
Miscellaneous laboratory equipment 471 377 94
Office furnishings and machines 108 121 (13)
Electronic equipment 384 273 111
Motor vehicles 21 16 5
Vehicles for internal transport 16 21 (5)
Total 5,101 5,643 (542)
8. OTHER OPERATING EXPENSES
Other operating expenses were composed as follows:
€ (thousands) 2012 2011 Change
2012/2011 Pay‐back and discount of 1.83%‐4.1% (2nd Half 2012) to be reimbursed to Regions 5,061 4,157 904Meetings and scientific publications, market surveys and expenses for medical and scientific communications and advertising 10,706 11,462 (756)
Clinical and pharmacological trials and professional advice 5,766 9,838 (4,072)
Sales commissions to agents and depositories 4,917 4,313 604
Transport and storage 2,784 2,710 74
Utilities and similar (motor fuel, gas, water, etc.) 6,165 4,488 1,677
Destruction of industrial waste and cleaning 2,013 1,944 69
Maintenance 3,127 2,963 164
insurance premiums 454 561 (107)
Directors’ fees 695 678 17
Statutory auditors’ fees 125 125 0
Sundry labor costs 6,029 4,852 1,177
Legal, judiciary and notary expenses 472 526 (54)
Sundry services 3,264 2,487 777
Postal and telecommunications expenses 523 497 26
External processing 3,936 4,497 (561)
Royalties payable 78 84 (6)
Rents payable 335 68 267
Car hire expenses 2,829 2,805 24
Provisions 439 372 67
Membership fees 394 483 (89)
Prior year expenses 27 323 (296)
Sundry taxation 1,543 1,104 439
Other operating expenses 3,427 1,589 1,838
Total 65,109 62,926 2,183
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The pay‐back expense of € 5,061 thousand relates to the € 2,233 thousand due to the Italian national healthcare system in substitution for the 5% price reduction on some selected products. That measure, initially introduced for the period 1st March 2007 – 29th February 2008, was subsequently repeated and is currently in force. The amount is calculated on the sales of products performed in 2011. Furthermore, with regard to the entry into force of Law 122 of 30th July 2010, article 11 establishes a charge borne by producers amounting to 1.83% (4.1% in the second half of 2012) of the price to the public net of VAT. This total, amounting to € 2,828 thousand, is the sum of the amount paid in the first half of 2012 and the provision charge of € 2,112 thousand made for the second half, net of a reversal of the provision amounting to € 260 thousand. Commissions paid to agents included commissions to Recordati Rare Diseases for sales in the USA of pharmaceutical chemicals amounting to € 68 thousand. Expenses for sundry services included the auditors’ fees. Details of that remuneration are provided in Attachment 5 in compliance with Art. 149‐duodecies of the Consob Issuers’ Regulations. Details are given in the relevant parts of the Remuneration Report (published in accordance with Art. 123‐ter of the Consolidated Finance Act) of the following: the remuneration of directors, statutory auditors, general managers and other key management personnel; the shares held in the Company by those persons; the stock option rights granted to them. No use was made of finance lease assets in 2012. External processing included work performed by Laboratoires Bouchara Recordati amounting to € 45 thousand. Other operating expenses included accessory costs incurred for acquisitions which cannot be capitalized. They also comprised services received from the parent company FIMEI S.p.A. amounting to € 2 thousand and from the subsidiary Recordati S.A. Chiasso amounting to € 106 thousand. Provision charges of € 439 thousand relate to an estimate of the risk attached to legal actions concerning labor and redundancies. The item “sundry taxation” amounting to € 1,543 thousand (€ 1,104 thousand in 2011) relates to the following:
€ (thousands) 2012 2011 Change
2012/2011
Contribution under Decree Law 269/2003 275 200 75
Government license tax 660 442 218
Municipal taxes 351 263 88
Stamp duties and similar 10 10 0
Non‐deductible taxes 42 39 3
Sundry taxes 205 150 55
Total 1,543 1,104 439
In compliance with Decree Law 269 of 30th September converted into Law 326 of 24th November 2003, a contribution was paid in April amounting to 5% of the expenses incurred in the previous year for advertising activities, self certified by the Company in accordance with the law. Taxes for government licenses are attributable to the maintenance and changes to registrations for ethical and self‐medication products and to the registrations of new products.
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9. CHANGES IN INVENTORIES
Details of changes in inventories are as follows:
€ (thousands) 2012 2011 Change
2012/2011 Raw materials 765 778 (13)
Supplies 253 661 (408)
Intermediates and work‐in‐process 435 (553) 988
Finished goods 2,902 3,662 (760)
Total 4,355 4,548 (193)
10. INCOME FROM INVESTMENTS
Income from investments amounted to € 64,988 thousand (€ 55,889 thousand in 2011) and related to subsidiaries. This income consisted of dividends declared and received from Bouchara Recordati S.a.s. (€ 19,988 thousand) and from Recordati S.A. Chemical & Pharmaceutical Company (€ 45,000 thousand).
11. FINANCIAL INCOME/(EXPENSE)
Net financial income/(expense) showed net expense of € 5,665 thousand in 2012 (€ 5,555 thousand in 2011). The main items are summarized in the table below.
€ (thousands) 2012 2011 Change
2012/2011 Foreign exchange gains (losses) 403 (370) 773
Revaluations of personnel leaving indemnity advances
1 1 0
Interest income from subsidiaries 3,145 1,084 2,061
Interest expense payable to subsidiaries (6,857) (5,750) (1,107)
Interest expense on loans (1,778) (1,804) 26
Net interest on short‐term financial positions 208 2,021 (1,813)
Bank charges (327) (285) (42)
Interest cost in respect of defined benefit plans (IAS 19)
(460) (452) (8)
Change in fair value of hedging derivatives (1,042) 627 (1,669)
Change in fair value of hedged items 1,042 (627) 1,669
Total (5,665) (5,555) 110
The balance on foreign exchange differences in 2012 represented a gain of € 403 thousand compared to a loss of € 370 thousand in 2011. The gain for the year consisted of € 275 thousand for the cost of transactions concluded during the year and of a gain of € 678 thousand resulting from the valuation at 31st December 2012 of assets and liabilities in foreign currency. Art. 2426, point 8‐bis is therefore applicable to that income, by which, if net income arises from the foreign exchange valuation performed at the end of the year, that amount is allocated to a special reserve that is not distributable until the gain is actually realized.
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Interest income from subsidiaries is as follows:
€ (thousands) 2012 2011 Change 2012/2011
Jaba Recordati S.A. 98 63 35
Bouchara Recordati S.a.s. 424 296 128
Recordati S.A. – Luxembourg 16 71 (55)
Recordati Pharma GmbH 351 0 351
Recordati Ilaç 2,197 632 1,565
Fic Médical S.a.r.l. 19 4 15
Recordati Ireland Ltd. 19 18 1
Recordati Polska Sp. z.o.o. 13 0 13
Farma‐Projekt Sp. z.o.o 8 0 8
Total 3,145 1,084 2,061
Interest income relates to loans granted to subsidiaries during the year (€ 2,218 thousand) and to the centralized cash pooling treasury system in operation at the Parent Company since 2007, on the basis of which monthly interest receivable and payable is recognized at market rates (€ 927 thousand). A short‐term loan (€ 500,000) and a long‐term loan (TRY 40,000,000) to Yeni Recordati Ilaç were outstanding at 31st December together with two short‐term loans to Recordati Polska (€ 317 thousand) and to Farma‐Projekt (€ 368 thousand). Interest expense paid to subsidiaries is as follows:
€ (thousands) 2012 2011 Change 2012/2011
Fic Médical S.a.r.l. 1 1 0
Recordati España S.L. 1,446 906 540
Laboratoires Bouchara Recordati Sas 300 132 168
Innova Pharma S.p.A. 148 63 85
Recordati S.A. – Luxembourg 3,704 4,051 (347)
Recofarma S.r.l. 35 52 (17)
Jaba Recordati S.A. 1 8 (7)
Recordati Ireland Ltd. 188 89 99
Orphan Europe Spain S.L. 6 0 6
Orphan Europe United Kingdom Ltd. 7 0 7
Orphan Europe Sarl 293 158 135
Recordati Pharma GmbH 30 39 (9)
Recordati Pharmaceutical Ltd. 346 140 206
Recordati Rare Diseases 289 105 184
Recordati S.A. ‐ Switzerland 6 0 6
Bouchara Recordati s.a.s. 0 1 (1)
Orphan Europe Germany GmbH 29 5 24
Herbacos Recordati Sro 7 0 7
Orphan Europe Italy S.r.l. 21 0 21
Total 6,857 5,750 1,107
Interest expense relates to loans granted by subsidiaries during the year (€ 1,587 thousand), to the centralized cash pooling treasury system amounting to € 1,796 thousand and to the interest of € 3,474 thousand paid to Recordati S.A., described below.
25
Interest payable to the Luxembourg subsidiary Recordati S.A. includes € 3,474 thousand in relation to an intercompany loan agreed at the end of 2004 on the basis of an issue of debt performed by our subsidiary with institutional international investors. The loan is structured in a number of tranches and is also in foreign currency at a fixed rate. The following is reported with regard to other financial income/ (expense): ‐ interest expense in respect of defined benefit plans (leaving indemnities) relates to the interest cost component of the adjustment to the relative provision in compliance with IAS 19;
‐ the fair value changes in hedging derivatives relate to the valuation of a “cross‐currency interest rate swap” for the intercompany loan concluded at the end of 2004 designed to eliminate currency risk for loans denominated in United States dollars and the UK pound sterling. This amount reflects the change in the fair value of the underlying debt with respect to its nominal value, with no effect in the income statement. It is recognized as a fair value hedge.
12. TAXES
Taxes recognized in the income statement are composed as follows: € (thousands) 2012 2011 Change
2012/2011 Current taxation:
IRES (corporation tax) 9,050 10,068 (1,018)
IRAP (regional tax on production) 3,110 3,313 (203)
Total current taxation 12,160 13,381 (1,221)
Deferred taxation:
Movement in deferred tax assets/liabilities, net (620) (507) (113)
Use of prior years deferred tax assets/liabilities, net 2,101 2,640 (539)
Total deferred taxes 1,481 2,133 (652)
Total 13,641 15,514 (1,873)
Provisions for taxes were made on the basis of estimated taxable income.
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The movement in deferred tax assets/liabilities of € 620 thousand is composed as follows:
2012 2011 Temporary
differences Tax Effect
Temporary differences
Tax Effect
DEFERRED TAX ASSETS ‐ Provisions (439) (121) (648) (178)
‐ Costs relating to future years (1,805) (496) (673) (185)
‐ Write‐down of inventories 0 0 (522) (144)
TOTAL (2,244) (617) (1,843) (507)
DEFERRED TAX LIABILITIES ‐ IAS personnel leaving indemnity valuation
(11) (3) 0 0
TOTAL 0
DEFERRED TAX ASSETS/LIABILITIES, NET (620) (507)
Note 17 may be consulted for information on the use of deferred tax assets amounting to € 2,101 thousand.
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The reconciliation between the current tax rate for income tax levied on the Company and the actual tax rate incurred is as follows.
2012
% 2011
% The tax rate applicable for IRES (corporate income tax) purposes
27.5 27.5
Dividends from subsidiaries (17.2) (15.5)
Contributions to congresses 0.7 0.7
Economic Growth legislation (ACE) impact (0.3) 0
Impact of partial deductibility of IRAP(regional tax on production) from IRES
(0.5) (0.1)
Other differences, net 0.2 0.2
The tax rate applicable for IRES (corporate income tax) purposes
10.4 12.8
IRAP (regional tax on production) 3.4 3.7
Tax rate on pretax income 13.8 16.5
IRAP as a percentage of pretax profit was 3.4% because the tax is calculated on a different tax basis which also includes the cost of labor, interest and some extraordinary items.
13. PROPERTY, PLANT AND EQUIPMENT
Property plant and equipment, net of accumulated depreciation at 31st December 2012 and 2011 amounted to € 40,075 thousand and € 35,944 thousand respectively. Changes in this item are given below. € (thousands) Property
and buildings
Plant and machinery
Other fixtures
Construction in progress
Total property, plant and
equipment
Cost of acquisition
Balance at 31.12.11 35,850 132,902 30,154 3,704 202,610
Additions 71 1,744 802 6,649 9,266
Write‐downs 0 0 0 0 0
Disposals 0 (1,033) (63) 0 (1,096)
Reclassifications 68 1,923 691 (2,682) 0
Balance at 31.12.12 35,989 135,536 31,584 7,671 210,780
Accumulated depreciation
Balance at 31.12.11 23,238 117,635 25,793 0 166,666
Depreciation 1,144 2,958 1,000 0 5,102
Disposals 0 (1,000) (63) 0 (1,063)
Reclassifications 0 0 0 0 0
Balance at 31.12.12 24,382 119,593 26,730 0 170,705
Carrying amount
At 31st December 2012 11,607 15,943 4,854 7,671 40,075
At 31st December 2011 12,612 15,267 4,361 3,704 35,944
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The additions of € 9,266 thousand in 2012 relate to investments in the Milan plant and headquarters of € 3,799 thousand and to various investments in the production facilities at the Campoverde di Aprilia plant amounting to € 5,467 thousand. These included investments for a new blister packaging line in Milan and for plant for the production of tribenoside at Campoverde. Depreciation for the year amounted to € 5,102 thousand and was calculated on all depreciable assets, using rates which are held to be representative of the estimated useful life of the assets.
14. INTANGIBLE ASSETS
Intangible assets net of accumulated amortization at 31st December 2012 and 2011 amounted to € 33,670 and € 17,531 respectively. Changes in this item are given below. € (thousands) Patent rights
and marketing authorizations
Concessions, licenses,
brands and similar rights
Others Assets under construction and advances
Total intangible
assets
Cost of acquisition
Balance at 31.12.11 30,575 20,609 13,244 430 64,858
Additions 0 18,187 0 369 18,556
Write‐downs 0 0 0 0 0
Disposals 0 0 0 0 0
Reclassifications 0 349 0 (349) 0
Balance at 31.12.12 30,575 39,145 13,244 450 83,414
Accumulated amortization
Balance at 31.12.11 24,808 9,276 13,243 0 47,327
Amortization 435 1,981 1 0 2,417
Disposals 0 0 0 0 0
Reclassifications 0 0 0 0 0
Balance at 31.12.12 25,243 11,257 13,244 0 49,744
Carrying amount
At 31st December 2012 5,332 27,888 0 450 33,670
At 31st December 2011 5,767 11,333 1 430 17,531
The increase in intangible assets of € 18,556 thousand relates mainly to the acquisition of a line of oral hygiene products sold under the Dentosan® brand.
All intangible assets have a defined useful life and are amortized over a period not exceeding 20 years.
15. INVESTMENTS
Investments amounted to € 473,533 thousand at 31st December 2012, up by € 56,479 thousand compared to 2011, as shown in the table in Attachment 1. The percentage of ownership and the number of shares or quotas possessed are reported in Attachment 2. A comparison between the carrying amount of investments in subsidiaries and their valuation using the equity method, in accordance with Art. 2426 of the Italian Civil Code, is reported in Attachment 3.
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IAS 27 ‐ Consolidated and separate financial statements ‐ requires recognition of investments in subsidiaries according to the cost method or, as an alternative, using the fair value in accordance with IAS 39. Recordati S.p.A. has adopted the cost criterion and therefore, where there are indications that part or all of the cost cannot be recovered, the carrying amount must be reduced to the relative recoverable amount, in compliance with IAS 36 – Impairment of assets. Where that impairment subsequently reverses or reduces, the carrying amount is increased to the amount of the new estimate of the recoverable amount which, however, cannot exceed the original cost. For the calculation of reversals for investments in companies that are not listed and that is where no reliable market value (fair value less costs to sell) can be determined, the recoverable amount has been defined as the value in use, intended as the present value of the estimated cash flows from it based on the expected results of the investments and the estimated amount of a hypothetical “ultimate disposal”. The expected results forecast in the business plans of each investment were taken into consideration in the calculation of the value in use, increased by their “terminal value” appropriately adjusted to take account of risks and uncertainties intrinsic to the assumptions on which the plans were based. Those results and the “terminal value” were discounted to present values by applying the current cost of capital of the companies in compliance with the method recommended in IAS 36. Application of the methodology described did not give rise to any impairment, nor to any reversal of impairment recognized in prior years.
Details of changes in investments are given in the table contained in Attachment 1 and the consolidated financial statements may be consulted for further information on the increases that occurred during the year. As in the past, relations with subsidiaries continued satisfactorily with the following changes occurring during the year: ‐ Recordati S.A. Chemical and Pharmaceutical Company – Luxembourg – Share Capital €
82,500,000. Percentage ownership of 100%. The value of the investment increased during the year by € 40 million, following a payment into capital account made to finance the acquisition of the indirectly controlled subsidiary Accent LLC. The year 2012 ended with a profit of € 55,868 thousand (€ 46,335 thousand in 2011). The profit for the year was due mainly to the receipt of dividends of € 55,869 thousand. The shareholders’ equity of the company at 31.12.2012 amounted to € 332,212 thousand.
‐ Recordati S.A. Chemical and Pharmaceutical Company holds investments in the following companies:
‐ Farmarecord Ltda. – San Paolo, Brazil – Share Capital denominated in Real amounting to
166.00. Percentage ownership of 100%. The company is dormant and holds pharmaceutical marketing rights in Brazil. Its shareholders’ equity at 31.12.2012 amounted to Real 851,040.
‐ Recordati España S.L. – Madrid, Spain – Percentage ownership of 31.55%. ‐ Recordati Rare Diseases Inc (formerly Recordati Corporation) – Cranford, (New Jersey), United
States ‐ Share Capital US$ 11,979,138. Percentage ownership of 100%. The company ended 2012 with a loss of US$ 324,894 and shareholders’ equity of US$ 21,482,441.
‐ Recordati Portuguesa Lda ‐ Porto Salvo, Portugal ‐ Percentage ownership of 2%.
- Bouchara Recordati S.a.s. – Levallois‐Perret, France – Percentage ownership of 0.06%.
- Recordati Ireland Ltd. – Ringaskiddy (Cork) Ireland – Share Capital € 200,000. Percentage
ownership of 100%. The company performs development, production, marketing and sales of pharmaceuticals.
30
Net sales in 2012 amounted to € 166,263 thousand (€ 154,963 thousand in 2011). In 2012 the company earned a net profit of € 52,558 thousand (€ 55,509 thousand in 2011). The shareholders’ equity at 31.12.2012 amounted to € 120,693 thousand.
‐ Recordati S.A. – Chiasso, Switzerland – Share Capital Sw.Fr. 2,000,000. Percentage ownership of 100%.
The company performs services as part of the Group’s marketing functions. In 2012 the company recorded a loss for the year of Sw. Fr. 29,765. Shareholders’ equity at 31.12.2012 amounted to Sw. Fr. 2,064,072.
‐ Recordati Pharmaceuticals Ltd. – Henley‐on‐Thames ‐ United Kingdom ‐ Share Capital GBP
15,000,000. Percentage ownership of 96.67%. The company performs sales of pharmaceuticals. In 2012 the company recorded net profit of GBP 406,643.
Shareholders’ equity at 31.12.2012 amounted to GBP 15,055,910.
- Recordati Hellas Pharmaceuticals S.A. – K. Chalandri, Athens Greece – Share Capital € 13,900,000. Percentage ownership of 99.32%. The company performs marketing and sales of pharmaceuticals. In 2012 the company earned a net profit of € 1,980 thousand. The shareholders’ equity at 31.12.2012 amounted to € 4,308 thousand.
- Recordati Orphan Drugs S.a.s. ‐ Paris La Defense, France ‐ Share Capital € 57,000,000.
Percentage ownership of 90%. The company earned net profit of € 7,536 thousand. Shareholders’ equity at 31.12.2012 amounted to € 70,771 thousand.
- Herbacos Recordati Sro ‐ Pardubice, Czech Rep. ‐ Share Capital CZK 25,600,000 ‐ Percentage
ownership of 99.92%. Herbacos is a pharmaceutical company with an established presence on the Czech and Slovakian markets where it markets pharmaceuticals belonging to various treatment areas. The year ended with a net profit of CZK 77,298 thousand. The shareholders’ equity of the company at 31.12.2012 amounted to CZK 163,736 thousand.
- Recordati România S.r.l. – Bucharest, Romania ‐ Share Capital Ron 5,000,000. Percentage
ownership of 100%. The company, control of which was acquired during the course of 2010, earned a profit of Ron 131,235. Shareholders’ equity at 31.12.2012 amounted to Ron 6,371,250.
‐ Recordati Pharma GmbH (formerly Merckle Recordati GmbH) ‐ Ulm, Germany ‐ Share Capital €
600,000, Percentage ownership of 55%. The company performs marketing and sales of pharmaceuticals. It generated sales in 2012 of € 64,927 thousand (€ 60,489 in 2011) and earned a net profit of € 9,450 thousand (€ 11,014 thousand in 2011). The shareholders’ equity of the company at 31.12.2012 amounted to € 109,294 thousand.
‐ Accent LLC – Moscow, Russian Federation – Share Capital RUB 20,000. Percentage ownership
of 100%. The company holds pharmaceutical marketing rights. The year 2012 ended with a net profit of RUB 810,934, while shareholders’ equity at 31.12.2012 amounted to RUB 969,248.
‐ Recofarma S.r.l. – Milan, Italy ‐ Share Capital € 1,258,400. Percentage ownership of 100%. The company ceased its marketing operations for pharmaceutical chemicals in 2006. In 2012 the company earned a net profit of € 23 thousand (€ 34 thousand in 2011). The shareholders’ equity of the company at 31.12.2012 amounted to € 3,510 thousand.
‐ Innova Pharma S.p.A. – Milan, Italy – Share Capital € 1,920,000. Percentage ownership of 100%. In 2012 the company continued its marketing operations for specialty pharmaceuticals in Italy. The company generated sales during the year of € 88,225 thousand (€ 89,480 thousand in 2011) and
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earned a profit of € 5,536 thousand (€ 5,652 thousand in 2011). The shareholders’ equity of the company at 31.12.2012 amounted to € 19,067 thousand.
‐ Recordati España S.L. – Madrid, Spain ‐ Share capital € 238,966,000. Percentage ownership of 68.45%. The company performs development, production and sales of pharmaceuticals. With net sales for the year of € 31,197 thousand (€ 28,059 thousand in 2011) the company earned a profit of € 6,359 thousand (€ 904 thousand in 2011). The shareholders’ equity of the company at 31.12.2012 amounted to € 278,539 thousand. Recordati España S.L. holds investments in the following companies: ‐ Recordati Pharma GmbH (formerly Merckle Recordati GmbH) – Ulm, Germany ‐ Share Capital €
600,000. Percentage ownership of 45%. ‐ Jaba Recordati S.A. ‐ Porto Salvo, Portugal ‐ Share Capital € 2,000,000. Percentage ownership
of 100%. The company performs wholesale marketing of pharmaceuticals. With net sales for the year of € 34,735 thousand, the company recorded a loss of € 1,517 thousand. The shareholders’ equity of the company at 31.12.2012 amounted to € 3,343 thousand.
‐ Jabafarma Produtos Farmacêuticos S.A. ‐ Porto Salvo, Portugal ‐ Share Capital € 50,000.
Percentage ownership of 100%. The company performs marketing of ethical specialty pharmaceutical products through its own distribution network. The year ended with a net profit of € 119 thousand. The shareholders’ equity of the company at 31.12.2012 amounted to € 151 thousand.
‐ Bonafarma Produtos Farmacêuticos S.A. ‐ Porto Salvo, Portugal ‐ Share Capital € 50,000.
Percentage ownership of 100%. The company performs marketing of generic pharmaceutical products through its own distribution network. The year ended with a net profit of € 341 thousand. The shareholders’ equity of the company at 31.12.2012 amounted to € 728 thousand.
‐ Recordati Ilaç (formerly Dr. F. Frik Ilaç) ‐ Esenyurt, Istanbul, Turkey ‐ Share Capital TRY
80,875,367. Percentage ownership of 100%. The company performs production and sales of pharmaceuticals and it merged Yeni Recordati Ilaç into it during the year. On a merged basis the two companies incurred a loss of TRY 2,301 thousand. Shareholders’ equity at 31.12.2012 amounted to TRY 40,988 thousand.
‐ Bouchara Recordati S.a.s. ‐ Levallois‐Perret, France ‐ Share Capital € 4,600,000. Percentage
ownership of 99.94%. Bouchara Recordati performed development, production and sales of pharmaceuticals in 2012. The year 2012 ended with a net profit of € 20,331 thousand (€ 20,198 thousand in 2011). The shareholders’ equity of the company at 31.12.2012 amounted to € 26,377 thousand.
Bouchara Recordati S.a.s. holds investments in the following companies:
‐ Laboratoires Bouchara Recordati S.a.s. ‐ Levallois‐Perret, France ‐ Share Capital €
14,000,000. Percentage ownership of 100%. The company performs production, marketing and sales of pharmaceuticals. It generated sales in 2012 of € 179,970 thousand and earned a net profit of € 3,894 thousand (€ 11,071 thousand in 2011). The shareholders’ equity of the company at 31.12.2012 amounted to € 19,449 thousand.
‐ FIC Medical Sarl – Levallois ‐ Perret, France ‐ Share Capital € 173,700. Percentage
ownership of 100%. The company performs advertising in the pharmaceuticals sector. It
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merged FIC S.a.s. into it during the year. It incurred a loss in 2012 of € 430 thousand. The shareholders’ equity of the company at 31.12.2012 amounted to € 611 thousand.
‐ Rusfic LLC. ‐ Moscow, Russian Federation ‐ Share Capital RUB 3,560,000. Percentage
ownership 100%. The company earned a net profit of RUB 24,390 thousand. Shareholders’ equity at 31.12.2012 amounted to RUB 55,732 thousand.
‐ Recordati Portuguesa Lda. ‐ Porto Salvo, Portugal ‐ Share Capital € 24,940. Percentage ownership
of 98%. The company ceased marketing and sales operations for pharmaceuticals in 2003. The shareholders’ equity of the company at 31.12.2012 amounted to € 41 thousand.
‐ Recordati Pharmaceuticals Ltd. – Henley‐On‐Thames, United Kingdom ‐ Share Capital GBP
15,000,000. Percentage ownership of 3.33%. ‐ Recordati Hellas Pharmaceuticals S.A. ‐ K. Chalandri, Athens, Greece ‐ Share Capital € 13,900,000.
Percentage ownership 0.68%.
‐ Recordati Polska sp. Z.o.o – Warsaw, Poland – Share Capital PNL 400,000. Percentage ownership of 100%.
‐ Farma‐Projekt Sp. z.o.o. – Krakow, Poland – Share Capital PLN 3,360,000. Percentage ownership
of 100%. This company, which was acquired during the year, carries out pharmaceutical marketing activities.
‐ Herbacos Recordati Sro – Pardubice, Czech Rep. – Share Capital CZK 25,600,000. Percentage
ownership of 0.08%. All the investments reported are in share capital with voting rights.
16. OTHER NON‐CURRENT ASSETS
Non‐current receivables at 31st December 2012 amounted to € 19,465 thousand (€ 20,696 thousand at 31st December 2011) and related mainly to a long‐term loan (€ 19,408 thousand) of Try 40,000,000 granted to Recordati Ilaç and due in 2016. A long‐term loan granted to Dr. F. Frik Ilac (Try 9,000,000 amounting to € 3,684 thousand), also due in 2016, was repaid early during the year.
17. DEFERRED TAX ASSETS
At 31st December 2012 these amounted to € 3,386 thousand (€ 4,870 thousand at 31st December 2011), a decrease of € 1,484 thousand. The main deferred tax assets and changes in them are analyzed in the two tables below
€ (thousands) 2012 2011
Balance at 1st January 4,870 7,003
Additions 617 507
Utilization (2,101) (2,640)
Balance at 31st December 3,386 4,870
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€ (thousands) Intangible asset
reversals Provisions
Inventory
write‐downs
Others
Total
Balance at 1st January 3,641 897 145 187 4,870
Addition 0 121 0 496 617
Utilization (1,720) (187) (10) (184) (2,101)
Balance at 31st December 1,921 831 135 499 3,386
The utilization of € 1,720 thousand relates to amortization charges for intangible assets revalued in 2005 under Law 226 of 23.12.2005.
18. INVENTORIES
Inventories at 31st December 2012 and 2011 amounted to € 50,925 thousand and € 46,571 thousand respectively, as shown in the following table:
€ (thousands) 31.12.2012 31.12.2011 Change
2012/2011 Raw materials, ancillary materials, consumables and supplies 11,194 10,176 1,018
Intermediates and work‐in‐process 12,501 12,067 434
Finished goods 27,230 24,328 2,902
Total 50,925 46,571 4,354
The increase in inventories compared to 31st December 2012 is attributable changes in volumes of sales and production.
19. TRADE RECEIVABLES
Trade receivables at 31st December 2012 and 2011 amounted to €72,976 thousand and € 54,336 thousand respectively as shown below:
€ (thousands) 31.12.2012 31.12.2011 Change
2012/2011 Trade receivables from subsidiaries 36,226 27,019 9,207
Trade receivables from others:
Italy 31,755 23,863 7,892
Abroad 5,547 4,141 1,406
73,528 55,023 18,505
Less:
Allowance for doubtful accounts (468) (603) 135
Allowance for interest on arrears on doubtful accounts
(84) (84) 0
Total trade receivables 72,976 54,336 18,640
Exposure calculated on receivables from others stood at 83 days outstanding at 31st December 2012.
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The adjustment of receivables in non‐euro currencies resulted in the recognition of negative exchange rate differences of € 59 thousand. The receivables are recognized net of those adjustments. Trade receivables from Group companies arose from the supply of goods and services and are composed as follows: € (thousands) 31.12.2012 31.12.2011 Change
2012/2011
Innova Pharma S.p.A. 16,620 15,258 1,362
Recordati Ireland Ltd. 16,719 9,846 6,873
Laboratoires Bouchara Recordati S.a.s. 360 584 (224)
Jaba Recordati S.A. 570 847 (277)
Recordati Pharma GmbH 815 192 623
Recordati España S.L. 117 131 (14)
Recordati Ilaç 262 119 143
Orphan Europe Italy Srl 20 12 8
Recordati Hellas Pharmaceuticals S.A. 29 38 (9)
Herbacos Recordati S.A. 8 (8) 16
Recordati S.A. Chemical & Pharmaceutical 54 0 54
Bouchara Recordati S.a.s. 296 0 296
Orphan Europe Sarl 355 0 355
Fic Medical Sarl 4 0 4
Recordati Romania Srl (4) 0 (4)
Recordati Polska 1 0 1
Total 36,226 27,019 9,207
The changes compared to the previous year are considered transitory and are related to automated netting procedures for outstanding intercompany positions, by which intercompany items are automatically offset against each other each month and the relative balances settled. Changes in the allowance for doubtful accounts are as follows: € (thousands) 2012 2011
Balance at 1st January 603 1,536
Utilization for losses on receivables (135) (18)
Utilization of excess provision 0 (915)
Balance at 31st December 468 603
The allowance is considered appropriate in relation to potential risks of insolvency.
Changes in the allowance for interest on arrears on doubtful accounts are as follows:
€ (thousands) 2012 2011
Balance at 1st January 84 84
Utilization for the year 0 0
Balance at 31st December 84 84
The balance at 31st December 2012, amounting to € 84 thousand, fully covers the amount for the relative receivables.
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The composition of the principal receivables in foreign currency is as follows:
31.12.2012
Currency €(000) 31.12.2011
Currency €(000) Receivables in US$ 3,543,655 2,744 3,220,054 2,385
Receivables in GBP 20,900 26 19,950 23
20. OTHER RECEIVABLES Other receivables amounted to € 5,226 thousand (€ 3,701 thousand at 31st December 2011). The composition is given in the table below. € (thousands) 31.12.2012 31.12.2011 Change
2012/2011 Tax income 1,622 1,482 140
From parent companies 17 20 (3)
From subsidiaries 697 378 319
Advances to employees and agents 1,133 291 842
Other 1,757 1,530 227
Total other receivables 5,226 3,701 1,525
Tax receivables at 31st December 2012 amounted to € 1,622 thousand (€ 1,482 thousand in 2011). They were composed as follows: € (thousands) 31.12.2012 31.12.2011 Change
2012/2011 Receivables from Fimei S.p.A. for IRES (corporate income tax)
574 0 574
Other non‐current tax assets IRAP (regional tax on production)
103 0 103
Refund requested from tax authorities 43 52 (9)
Receivables from the tax authorities for VAT 788 1,299 (511)
Tax credit for scientific research 52 0 52
Receivables for foreign VAT tax authorities 61 120 (59)
Sundry items 1 11 (10)
Total tax receivables 1,622 1,482 140
Tax assets receivable from the parent company Fimei S.p.A relate to taxes prepaid on account in excess of taxes for the year calculated on the basis of estimated taxable income. Those assets were transferred by the Recordati S.p.A. to the parent company as a consequence of opting for tax consolidation in accordance with articles 117 to 128 of Presidential Decree 917/1986 as amended by Legislative Decree 344/2003. Assets for current taxation consist of amounts prepaid on account in excess of the IRAP (local production tax) due for the year. The VAT credit consisted of the balance for December 2012 and the VAT refund applied for on 18th October 2007 in relation to VAT on motor vehicles. The tax credit for scientific research is that provided for by article 1 of the Decree Law of 13th May 2011 for companies that fund research projects in universities and public research institutions. The total benefit amounted to € 155 thousand. Other receivables from parent companies amounted to € 17 thousand and relate to sundry charges.
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Receivables from subsidiaries were composed as follows:
€ (thousands) 31.12.2012 31.12.2011 Change
2012/2011 Recofarma S.r.l. 1 1 0
Innova Pharma S.p.A. 213 246 (33)
Laboratoires Bouchara Recordati S.a.s. 169 131 38
Recordati Rare Diseases 296 0 296
Recordati Ireland Ltd. 18 0 18
Total 697 378 319
The receivables from Innova Pharma relate to VAT transferred as part of Group procedures. The receivables from Laboratoires Bouchara Recordati relate to royalties income. The receivables from Recordati Rare Diseases related to costs incurred on behalf of that company. Balances due from employees and agents at 31st December 2012 and 2011 amounted to € 1,133 thousand and € 291 thousand respectively. They consisted of advances to employees, expense accounts for medical representatives and loans granted to employees who exercised stock option rights amounting to € 754 thousand for the purchase of 163,750 shares resulting from the options granted on 29th October 2008 and 27th October 2009.
Receivables from others amounted to € 1,758 thousand at 31st December 2012 (€ 1,530 thousand at 31st December 2011) and included receivables from suppliers for advances and refunds due.
21. OTHER CURRENT ASSETS
These amounted to € 263 thousand (€ 319 thousand at 31st December 2011) and related mainly to prepaid expenses. They consisted of prepayments on insurance policies and advance payments for periodic market research services.
22. OTHER SHORT‐TERM RECEIVABLES
Other short‐term receivables all consist of amounts due from subsidiaries as follows: € (thousands) 31.12.2012 31.12.2011 Change
2012/2011 Bouchara Recordati S.a.s. 21,390 18,884 2,506
Jaba Recordati S.A. 1,008 8,346 (7,338)
Recordati Pharma GmbH 16,861 0 16,861
Recordati S.A. – Luxembourg 9,236 54 9,182
FIC S.a.s. 1,564 3 1,561
Yeni Recordati Ilaç 508 4,641 (4,133)
Recordati Ireland Ltd. 70 0 70
Recordati Polska sp. z.o.o. 330 0 330
Farma‐Projekt sp. z.o.o. 376 0 376
Total 51,343 31,928 19,415
These receivables are attributable to a cash pooling treasury system in operation at the Parent Company and to loans granted to Recordati Ilaç, Recordati Polska and Farma‐Projekt. Interest is paid on these receivables at short‐term market rates.
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23. SHORT‐TERM FINANCIAL INVESTMENTS, CASH AND CASH EQUIVALENTS
These are composed as shown in the following table.
€ (thousands) 31.12.2012 31.12.2011 Change
2012/2011 Deposits in bank current accounts 8,527 35,514 (26,987)
Cash on hand 5 5 0
Total 8,532 35,519 (26,987)
Cash and cash equivalents at 31st December 2012 consisted of current accounts and short‐term bank deposits.
24. SHAREHOLDERS’ EQUITY
A summary of the changes in the shareholders’ equity accounts is reported in the relative statement. Following the entry into force of Legislative Decree 6/2003, which amended the Italian Civil Code, the table contained in Attachment 4 was introduced which gives the composition of reserves on the basis of availability for use and distribution. Share capital ‐ The share capital at 31st December 2012, amounting to € 26,140,644.50, is fully paid up and consists of 209,125,156 ordinary shares with a par value of € 0.125 each. It remained unchanged during 2012. At 31st December 2012 the company had two stock option plans in place in favor of certain Group employees, the 2006‐2009 plan under which three different valid options were granted and the 2010‐2013 plan under which options were granted on 9th February 2011 and 8th May 2012. The exercise price of the options is the average of the Company's listed share price during the 30 days prior to the grant date. Options granted under the 2006‐2009 plan are vested over a period of four years and options not exercised within the fifth year of the date of grant expire. Stock options granted under the 2010‐2013 plan are vested over a period of five years and options not exercised within the eighth year of the date of grant expire. Options cannot be exercised if the employee leaves the company before they are vested.
Details of stock options outstanding at 31st December 2012 are given in the table below.
Strike price
(€) Options
outstanding at 1.1.2012
Options granted
during 2012
Options exercised
during 2012
Options cancelled and
expired
Options outstanding at
31.12.2012
Grant date
29th October 2008 4.0730 1,973,750 0 (743,750) (42,500) 1,187,500
11th February 2009 3.8940 110,000 0 (5,000) (30,000) 75,000
27th October 2009 4.8700 3,043,750 0 (531,250) (105,000) 2,407,500
9th February 2011 6.7505 4,280,000 0 0 (520,000) 3,760,000
8th May 2012 5.3070 ‐ 4,650,000 0 (140,000) 4,510,000
Total 9,407,500 4,650,000 (1,280,000) (837,500) 11,940,000
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Additional paid‐in capital Additional paid‐in capital at 31st December 2012 amounted to € 83,718,523 and was unchanged compared to 31st December 2011. The adoption of international accounting standards resulted in the elimination of revaluation reserves amounting to € 68,644 thousand. The tax obligation on these (untaxed – taxation suspended) was transferred to the additional paid‐in capital reserve. Treasury stock At 31st December 2012 this amounted to € 46,254 thousand, consisting of 8,505,790 treasury shares held in portfolio. The decrease during the year was of € 6,961 thousand, due to the disposal of 1,280,000 shares for use in the 2006‐2009 stock option plan. Statutory reserve This amounted to € 5,228 thousand and was unchanged compared to 31st December 2011, because the limit set by Art. 2430 of the Italian Civil Code had been reached. Other reserves Other reserves totaled € 219,967 thousand. Details are as follows: € (thousands) 31.12.2012 31.12.2011 Change
2012/2011 Extraordinary reserve 112,545 95,205 17,340
Reserve under Art. 13 Par. 6 of Legislative Decree 124/1993
99 99 0
Extraordinary VAT concession reserve 517 517 0
Research and investment grants 17,191 17,191 0
Non‐distributable reserve for investments in southern Italy 3,632 3,632 0
International accounting standards reserve 90,966 90,816 150
Total 224,950 207,460 17,490
Fair value derivative instruments (4,983) (4,227) (756)
Total other reserves 219,967 203,233 16,734
Extraordinary reserve At 31st December 2012 and 2011 this amounted to € 112,545 thousand and € 95,205 thousand respectively. The increase is the result of the allocation of part of 2011 profit amounting to € 18,661 thousand and of dividends not paid and expired amounting to € 3 thousand. Following the assignment of treasury stock to Group employees who exercised options under stock option plans, a difference arose between the amount paid by the employees and the carrying amount of that treasury stock. That difference of € 1,324 thousand was recognized as a deduction from the extraordinary reserve in compliance with international accounting standards. Reserve under Art. 13, paragraph 6 of Legislative Decree 124/93 This amounted to € 99 thousand at 31st December 2012 and remained unchanged compared to the previous year.
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Extraordinary VAT concession reserve This reserve (Laws 675/1977, 526/1982, 130/1983 and 64/1986), amounting to € 517 thousand, relates to special VAT allowances on investments and is unchanged compared to the previous year.
Research and investment grants These amount to € 17,191 thousand and are unchanged compared to the previous year. The grants are subject to taxation if they are used for purposes other than to cover losses, which, however, is not planned by the Company. The assets corresponding to the grants received from the Ministry of Industry and Commerce (formerly Asmez) have been mainly fully depreciated. Non‐distributable reserve for investments in southern Italy This amounted to € 3,632 thousand and remained unchanged compared to the previous year. International accounting standards reserve This amounted to € 90,966 thousand (€ 90,816 thousand at 31st December 2011) and is composed as follows:
€ (thousands) 31.12.2012 31.12.2011 Change
2012/2011 Reversal of fixed asset revaluations 40,477 40,477 0
Revaluation of investments 43,054 43,054 0
Inventories 463 463 0
Personnel leaving indemnities 336 1,462 (1,126)
Stock options 6,636 5,360 1,276
Total 90,966 90,816 150
Changes that occurred in the items in 2012 included the following:
the valuation of the personnel leaving indemnities provision in accordance with IAS 19 generated a reserve which amounted to € 336 thousand at 31st December 2012;
the amount of € 6,636 thousand relates to the personnel expense for stock options issued and granted after 7th November 2002 and not yet exercised, valued in accordance with IFRS 2.
Revaluation reserve This amounted to € 2,602 thousand (unchanged compared to 2011) and consisted of revaluation balances within the meaning of Law 413/1991. Untaxed (suspended taxation) reserves at 31st December 2012 amounted to € 87,826 thousand and consisted of € 15,964 thousand of reserves for grants received net of the taxed portion, € 517 thousand of the VAT concession reserve and € 99 thousand of the reserve formed pursuant to the Law regulating pension funds and € 71,246 of the revaluation reserves net of the substitute taxes. Revaluation reserves amounting to € 68,644 thousand were eliminated in compliance with international accounting standards and the non‐taxability was transferred to the additional paid‐in capital reserve. No deferred tax provisions were recognized in respect of those reserves, because, in accordance with IAS 12, these deferred tax provisions are recognized in the year in which the distribution is declared.
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25. LOANS
The composition of medium and long‐term loans at 31st December 2012 and 2011 is shown below. € (thousands) 31.12.2012
31.12.2011 Change
2012/2011
Loan granted by the Ministry of Industry and Commerce repayable in annual installments through 2013, at an annual interest rate of 3.30% during the amortization period (2004‐2013) and at 0.825% before that. 139 274 (135)
Loan granted by Centrobanca at a floating interest rate repayable in six monthly installments by 2022. 68,182 75,000 (6,818)
Loan received from Recordati S.A. (Luxembourg) granted on the basis of a long‐term debt issue concluded by that subsidiary with institutional investors. 65,609 65,609 0 Loan received from Recordati España S.L. repayable on 19/4/2016 and repaid in advance during the year. 0 25,000 (25,000) Total amortized cost of loans 133,930 165,883 (31,953)
Portion due within one year (6,957) (6,953) (4)
Portion due after one year 126,973 158,930 (31,957)
Change in the fair value of loans 1,371 1,791 (420)
Expenses relating to Centrobanca loans (221) (240) 19
Total 128,123 160,481 (32,358)
The repayment schedules for the portions of the medium and long‐term loans due after 31st December 2013 are as follows:
€ (thousands)
2014 72,427
2015 6,818
2016 6,818
2017 6,818
2018 6,818
2019 and after 27,274
Total 126,973
On 30th November 2010, the Company signed a loan contract with Centrobanca, for a three year program of investments in Research & Development. The loan, which Centrobanca funded through a loan from the European Investment Bank, amounted to € 75.0 million, net of expenses of € 0.3 million, of which € 30 million was disbursed in 2010 and € 45 million in 2011. The main terms and conditions were, a variable interest rate and a duration of 12 years with repayment in semi‐annual installments of the principal from June 2012 and through December 2022. In June 2012 the loan was hedged by an
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interest rate swap (a cash flow hedge), which transformed the whole debt to a fixed interest rate of 2.575%. The € 1,120 thousand fair value of the cash flow hedge was recognized directly as a deduction from equity and stated as a current liability (see Note 34). The loan contract contains financial covenants which, if not complied with, may result in the immediate call of the loan. The financial covenants are as follows: • the ratio of consolidated net debt to consolidated shareholders’ equity must be less than 0.75; • the ratio of consolidated net debt to EBITDA (for a period of twelve consecutive months) must be
less than 3.00 to 1.00; • the ratio of EBITDA to consolidated net interest expense (for a period of twelve consecutive
months) must exceed 3.00 to 1.00. Those ratios were fully complied with by a broad margin for the year ended 2012.
The loan from Recordati S.A. (Luxembourg) is composed as follows:
Currency Value in euro Fixed rate Year due
€ 26,000,000 26,000,000.00 5.705 2014
$ 40,000,000 32,310,177.75 5.225 2014
GBP 5,000,000 7,299,270.07 6.295 2014
This loan was granted on the basis of an issue of long‐term debt concluded by Recordati S.A. Luxembourg with institutional investors and guaranteed at the same time by Recordati S.p.A..
That debt, issued at the end of 2004, comprises tranches in various currencies at fixed interest rates. The tranches denominated in currencies other than the euro have been covered with a cross‐currency interest rate swap effectively converting the whole debt into euro at a variable interest rate equivalent to the Euribor 6 months rate plus a spread. The tranches denominated in euro have been hedged with an interest rate swap effectively converting the interest charges on the debt from fixed to variable at the same above mentioned conditions. The measurement at fair value of the swaps at 31st December 2012 generated a liability of € 1,371 thousand, an amount equivalent to the decrease in the fair value of the underlying debt with respect to its nominal value. This amount is recognized in the balance sheet as a decrease of debt within current liabilities as “Fair value of hedging derivatives (fair value hedge)”. A further interest rate swap contract was entered into at the same time, qualifying as a cash flow hedge, to fix a range within which the interest rate can fluctuate in order to optimize the cost of financing for the life of the debt. At 31st December 2012 the lower and upper limits of the range were 4.14% and 4.85%. respectively. The € 3,863 thousand fair value of the cash flow hedge was recognized directly as a deduction in equity and stated as a current liability (see Note 34). The derivative instruments and the hedged items are linked and the Company does not intend to terminate or modify them independently from each other. A loan of € 25,000 thousand received from Recordati España S.L. with a due date of 19th April 2016 was repaid in advance during the year.
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26. STAFF LEAVING INDEMNITIES
The balance at 31st December 2012 was € 11,321 thousand (€ 10,759 thousand at 31st December
2011). Changes in the item were as follows: € (thousands) 2012
2011
Balance at 1st January 10,759 11,658
Additions during the year 460 452
Utilization for the year (1,334) (861)
Change in fair value of the personnel leaving indemnity fund (IAS 19) 1,436 (490)
Balance at 31st December 11,321 10,759
The valuation of the personnel leaving indemnity fund in accordance with IAS 19 generated a liability at 31st December 2012 of € 11,321 thousand. The calculation made, which used actuarial parameters updated at 31st December 2012, generated a greater liability and resulted in the recognition of an adjustment of € 1,436 thousand and the recognition of an equal amount (gross of deferred taxation) in the statement of comprehensive income in accordance with the relative accounting standard.
27. DEFERRED TAX LIABILITIES
Deferred tax liabilities amounted to € 1,629 thousand (€ 2,059 thousand at 31st December 2011). Changes are reported in the table below.
€ (thousands) 2012
2011
Balance at 1st January 2,059 1,935
Additions 0 124
Utilization (430) 0
Balance at 31st December 1,629 2,059
The balance at 31st December 2012 was composed of deferred tax liabilities in respect of the personnel leaving indemnity calculated on the basis of IAS 19 using actuarial parameters updated at year‐end and in respect of an adjustment in the value of investments in accordance with international accounting standards.
28. OTHER NON‐CURRENT LIABILITIES
These amounted to € 1,828 thousand (€ 0 thousand in 2011). They consisted of installments to be paid in 2014, 2015 and 2016 totaling PLN 7,500,000 in relation to the acquisition of the company Farma‐Projekt.
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29. TRADE PAYABLES
Trade accounts payable, which are entirely of a business nature and include end‐of‐year provisions for invoices to be received, amounted at 31st December 2012 and 2011 to € 53,957 thousand and € 36,417 thousand, respectively. Balances at 31st December 2012 and 2011 were as follows: € (thousands) 31.12.2012 31.12.2011 Change
2012/2011
Suppliers, subsidiaries 11,890 1,005 10,885
Suppliers, Italy 23,059 18,540 4,519
Suppliers, Italy for invoices to be received 6,531 6,175 356
Suppliers, abroad 10,471 9,837 634
Suppliers, abroad for invoices to be received 2,006 860 1,146
Total trade payables 53,957 36,417 17,540
Details for subsidiaries are as follows: € (thousands) 31.12.2012 31.12.2011 Change
2012/2011
Recordati Corporation 31 13 18
Laboratoires Bouchara Recordati S.a.s. 194 245 (51)
Innova Pharma S.p.A. 5,463 684 4,779
Recofarma S.r.l. 121 69 52
Recordati Ireland Ltd. 5,877 (6) 5,883
Bouchara Recordati S.a.s. 1 0 1
Recordati S.A. Chemical and Pharmaceutical 17 0 17
Orphan Europe Sarl 158 0 158
Recordati Ilaç 10 0 10
FIC Medical Sarl 1 0 1
Recordati S.A. 9 0 9
Jaba Recordati S.A. 8 0 8
Total payables to subsidiaries 11,890 1,005 10,885
There were no concentrations of large debts to a single or a small number of suppliers.
The adjustment of trade payables in non‐euro currencies resulted in the recognition of net positive exchange rate differences of € 237 thousand. The largest trade payables in foreign currency were as follows:
31.12.2012 31.12.2011 Currency €(000) Currency €(000)
Payables in US$ 1,092,828 1,064 1,966,513 1,699
Payables in GBP 62,099 85 52,085 71
Payables in CHF 79,617 69 78,988 68
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30. OTHER PAYABLES
At 31st December 2012, other accounts payable amounted to € 17,909 thousand (€ 14,961 thousand at 31st December 2011). They were composed as follows:
€ (thousands) 31.12.2012 31.12.2011 Change
2012/2011
Payables to third parties 1,277 0 1,277
Employees 5,743 6,625 (882)
Social security 5,255 5,506 (251)
Commissions to agents 971 603 368
Other 4,663 2,227 2,436
Total other payables 17,909 14,961 2,948
Payables to third parties related to PLN 5,000,000 for the acquisition of the company Pharma Projekt. Amounts due to employees include amounts accrued and not paid, vacations not taken and bonuses for presence and for achieving objectives. Social security payables not only include contribution expenses for those periods but also the amount due to pension institutes for December.
Amounts payable to agents include € 194 thousand in commissions for foreign agents. Other payables include directors’ remuneration accrued at 31st December (€ 484 thousand), credit notes to be issued (€ 7 thousand), payables for the debt to Regions pursuant to Law 122 of 30th July 2010 amounting to € 2,302 thousand and the liability relating to the part of the interim dividend not yet paid to shareholders at year‐end (€ 1,341 thousand).
31. TAX LIABILITIES
Tax liabilities at 31st December 2012 amounted to € 2,047 thousand (€ 3,662 thousand at 31st December 2011).
€ (thousands) 31.12.2012 31.12.2011 Change
2012/2011
Liabilities payable to Fimei S.p.A. 0 1,556 (1,556)
Liabilities for current taxation 0 405 (405)
Liabilities for employee withholding taxes 1,984 1,632 352
Liabilities for self‐employed withholding taxes 41 67 (26)
Other tax liabilities 22 2 20
Total tax liabilities 2,047 3,662 (1,615)
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32. OTHER CURRENT LIABILITIES
Other current liabilities amounted to € 48 thousand (€ 64 thousand in 2011) and consist of liabilities for grants for investment received between 1998 and 2003 and carried over into subsequent years in relation to the residual useful life of the assets to which they relate.
33. PROVISIONS
These consist of tax and other provisions as reported in the table below. € (thousands) 31.12.2012 31.12.2011 Change
2012/2011
Tax 3,135 2,947 188
Other risks 3,122 3,452 (330)
Total provisions 6,257 6,399 (142)
The change in the provision for other risks is due to utilizations of € 769 thousand and additional provisions of € 439 thousand. Utilizations related mainly to the conclusion of labor litigation cases and the utilization of the provision for pharmaceutical overspend. Additions on the other hand related to probable notice indemnities regarding employees and provisions for labor litigation.
34. FAIR VALUE OF HEDGING DERIVATIVES (CASH FLOW HEDGES)
The interest rate swaps to hedge cash flows relating to medium and long‐term loans measured at fair value at 31st December 2012 gave rise to a € 4,983 thousand liability which represents the unrealized benefit of paying the current expected future rates instead of the rates agreed for the duration of the loans.
That liability just mentioned is recognized in shareholders’ equity within the “Fair value derivatives reserve”.
35. LOANS – DUE WITHIN ONE YEAR
The portions of medium and long‐term loans due within one year at 31st December 2012 and 2011 were composed as follows:
46
€ (thousands) 31.12.2012
31.12.2011 Change 2012/2011
Loan granted by the Ministry of Industry and Commerce repayable in annual installments through 2013, at an annual interest rate of 3.30% during the amortization period (2004‐2013) and at 0.825% before that. 139 135 4
Loan granted for research by Centrobanca at a floating interest rate repayable in six monthly installments by 2022. 6,818 6,818 0
Portion due within one year 6,957 6,953 4
Change in the fair value of loans 0 0 0
Total 6,957 6,953 4
36. BANK OVERDRAFTS AND SHORT‐TERM LOANS
Bank overdrafts and short‐term loans at 31st December 2012 and 2011 amounted to € 49,020 thousand and € 528 thousand respectively. € (thousands) 31.12.2012 31.12.2011 Change
2012/2011
Current account overdrafts 48,979 381 48,598
Interest on long‐term loans 41 147 (106)
Total 49,020 528 48,492
The reduction in cash and cash equivalents is due mainly to dividend payouts (€ 60 million), new acquisitions in Poland (€ 13 million), an increase in the investment in Recordati S.A. Luxembourg (€ 40 million) and to the acquisition of the Dentosan® product line (€ 18 million).
37. OTHER SHORT‐TERM PAYABLES
The balance on other short‐term payables consisted entirely of amounts due to subsidiaries as follows:
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€ (thousands) 31.12.2012 31.12.2011 Change
2012/2011
Recordati S.A. – Luxembourg 3,890 13,114 (9,224)
Recofarma S.r.l. 3,491 3,534 (43)
Innova Pharma S.p.A. 12,388 7,007 5,381
Laboratoires Bouchara Recordati S.a.s. 19,779 20,228 (449)
Herbacos Recordati S.r.o. 1,507 0 1,507
Recordati España S.L. 40,187 42,599 (2,412)
Orphan Europe Germany GmbH 3,131 2,168 963
Orphan Europe Sarl 17,055 17,642 (587)
Recordati S.A. – Switzerland 1,249 0 1,249
Recordati Rare Diseases 15,551 105 15,446
Recordati Pharma GmbH 0 8,955 (8,955)
Orphan Europe United Kingdom Ltd. 1,232 0 1,232
Orphan Europe Spain S.L. 944 0 944
Orphan Europe Italy S.r.l. 3,194 0 3,194
Recordati Ireland Ltd. 169 260 (91)
Recordati Pharmaceutical Ltd. 16,564 282 16,282
FIC Médical S.a.r.l. 0 212 (212)
Total 140,331 116,106 24,225
The amount due to Recordati S.A. Luxembourg relates of which € 3,676 thousand to interest on a long‐term loan granted on the basis of a long‐term debt issue concluded by that subsidiary with institutional investors (see Note 25). Payables to other subsidiaries relate to the centralized cash pooling treasury system and to loans received from them. In detail outstanding loans existed at 31st December 2012 from the following: ‐ Recordati S.A. for CHF 1,500,000 amounting to € 1,243 thousand; ‐ Herbacos Recordati for € 1,500 thousand; ‐ Orphan Europe United Kingdom for GBP 1,000,000 amounting to € 1,225 thousand; ‐ Recordati Rare Diseases Inc. for US.$ 20,000,000 amounting to € 15,158 thousand; ‐ Recordati Pharmaceutical Ltd. for GBP 13,000,000 amounting to € 15,929 thousand.
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38. FAIR VALUE OF FINANCIAL INSTRUMENTS
As prescribed by IFRS 7, a comparison of the carrying amounts at 31st December 2012 and the fair values of financial assets and liabilities is given below. € (thousands) Carrying
amount Fair
value
Financial assets
Other short‐term receivables 51,343 51,343
Short‐term financial investments, cash and cash equivalents 8,531 8,531
Trade receivables 72,976 72,976
Other receivables 5,226 5,226
Fair value of hedging derivatives (fair value hedges) 1,371 1,371
Financial liabilities
Loans
‐ loans at fixed interest rates 139 97
‐ loans at variable interest rates 60,023 60,023
‐ loans at variable rates hedged by IRS 67,961 66,417
Trade payables 53,957 53,957
Other payables 19,959 19,959
Fair value of hedging derivatives (cash flow hedges) 4,983 4,983
Bank overdrafts and short‐term loans 49,020 49,020
Other short‐term borrowings 140,331 140,331
Derivative instruments and fixed rate loans hedged by interest rate swaps are recognized at fair value. Other financial assets and liabilities are carried at fair value because they are short‐term assets and liabilities or variable rate loans.
39. DISCLOSURE OF FINANCIAL RISKS
The Company constantly monitors the financial risks to which it is exposed in order to take immediate mitigating action when necessary. Financial policies are designed to achieve a balanced and prudent structure as a basic condition for funding internal and external growth. As prescribed by IFRS 7, the main financial risks to which the Company is exposed are hereby disclosed.
Liquidity risk The liquidity risk to which the Company may be exposed is the inability to raise sufficient financial resources for its ongoing business and for the development of its industrial and commercial activities. The two main factors which determine the Company's liquidity are, on the one hand, the resources
49
generated or absorbed by operations and by investments, and on the other, the expiry and renewal terms of debt or the degree of liquidity of financial investments and market conditions. The terms and conditions of the Company's loans and its financial assets are set out in notes 23, 25 and 36, which address short‐term financial investments, cash and cash equivalents, loans and bank overdrafts, respectively. The Company believes that the funds and credit lines currently available, in addition to those generated by operations and financing activities, are enough to satisfy investment needs, working capital requirements and the repayment of debts on their natural due dates.
Credit risk The Company closely controls its credit exposure through the allocation of credit limits to each single customer and an internal reporting system. At 31st December 2012, the credit exposure was not critical due to the large number of customers, their geographical distribution and the average amount of each account receivable. More specifically at 31st December 2012 gross trade receivables, inclusive of those receivable from subsidiaries, totaled € 73,528 thousand and the relative allowance for doubtful accounts of € 552 thousand recognized is considered to be sufficient in relation to the risk of insolvencies.
Interest rate risk
The Company raises funds using debt and invests excess cash in money market funds and other financial instruments. The fluctuation of market interest rates influences the cost and returns of the debt and investment instruments, which therefore affect the Group's net financial charges. The Company’s policy is to limit the risk arising from interest rate fluctuations by establishing fixed interest rate loans or variable interest rate loans hedged by derivative contracts designed to minimize such fluctuations, as described in Note 25. As a result of this policy and considering the current amount of net debt, it is believed that changes in current interest rates would not have a significant impact on net financial expenses.
Foreign currency risk The Company is exposed to foreign currency fluctuations which can affect its operating results. In particular, the Company is exposed to foreign currency fluctuations on its international sales denominated in currencies other than the euro, such as U.S. Dollars, Japanese Yen, GB Pounds and Swiss Francs. The net exposure to these currencies is, however, marginal when compared to the company's volumes of business.
40. SEGMENT REPORTING
Reporting by business segment and geographical area, presented in compliance with IFRS 8 – Operating segments – has been performed according to the same accounting policies employed in the presentation of the consolidated financial statements of the Group where, following the acquisition of Orphan Europe, two main segments have been identified: the pharmaceuticals segment and the orphan pharmaceuticals segment, which relates to the whole of Orphan Europe. Consequently the only business segment that exists for Recordati S.p.A. is the pharmaceuticals segment. Furthermore, the pharmaceutical chemicals business is considered an integral part of the pharmaceuticals segment because from an organizational and strategic viewpoint it is involved principally in the production of the active ingredients required to produce pharmaceuticals.
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The following table presents net revenues by geographic area:
€ (thousands) 2012 2011 Change 2012/2011
Europe 255,866 251,813 4,053
of which Italy 170,924 173,152 (2,228)
Australasia 6,356 5,506 850
The Americas 9,028 9,168 (140)
Africa 1,901 971 930
Total 273,151 267,458 5,693
41. LITIGATION AND CONTINGENT LIABILITIES
The Company is party to certain legal actions, the outcomes of which are not expected to result in any significant liability.
On 29th September 2006 a notice of tax assessment was served on the Company by the Milan office of the Tax Authorities relating to the fiscal year 2003. It was assessed for additional taxation as follows: corporate tax of € 2.3 million, IRAP (regional production tax) of € 0.2 million and VAT of € 0.1 million and the imposition of fines of € 2.6 million. The Company believed no amount was due and considered the assessment flawed both from a legitimacy as well as a substantive point of view, and is supported in its position by professional opinion. An appeal was therefore filed with the Provincial Tax Commission of Milan. The first instance judgment before the Provincial Tax Commission was concluded partially in the Company's favor with decision No. 539/33/07 dated 11th October 2007, filed on 16th October 2007. An appeal was subsequently filed against that judgment with the Regional Tax Commission of Milan, firstly by the Milan office 6 of the Tax Authorities with notice served on 8th November 2008 and secondly by the Company with notice served on 7th January 2009. With judgment No. 139/32/09 of 10th June 2009, filed on 27th November 2009, section 32 of the Regional Tax Commission of Milan rejected the interlocutory appeal filed by the company and accepted the principal appeal of the Milan office 6 of the Tax Authorities. As a result of that judgment the claims contained in the aforementioned tax assessment relating to the tax year 2003 were confirmed in their entirety and the Company paid the full amount due. On 26th May 2010, the Company appealed that decision before the Supreme Court of Cassation.
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42. NET FINANCIAL POSITION
The following summary is set out in the table below in compliance with Consob deliberation No. 15519 of 27th July 2006: € (thousands) 31.12.2012 31.12.2011 Change
2012/2011
Deposits in bank current accounts and cash on hand
8,532 35,519 (26,987)
Short‐term loans to Group companies 51,343 31,928 19,415
Cash and cash equivalents and current receivables
59,875 67,447 (7,572)
Bank overdrafts and short‐term loans (49,020) (528) (48,492)
Loans – due within one year (6,957) (6,953) (4)
Short‐term borrowings from Group Companies (140,331) (116,106) (24,225)
Short‐term borrowings (196,308) (123,587) (72,721)
Net current financial position (136,433) (56,140) (80,293)
Loans and receivables – due after one year 19,408 20,639 (1,231)
Borrowings – due after one year (128,123) (160,481) 32,358
Net financial position (245,148) (195,982) (49,166)
43. NON‐RECURRING SIGNIFICANT EVENTS AND TRANSACTIONS
In compliance with Consob communication of 28th July 2006 a summary is given in the table below of the main events, transactions and actions which are non‐recurring and which do not repeat frequently in the usual course of business. The overall net effect of such occurrences on the profit and loss, balance sheet and cash flow of the Company is not significant. € (thousands) 2012 2011 Change
2012/2011
Provision for the AIFA (Italian Medicines Agency) budget overspend 0 (372) 372
Provisions for expenses related to the return of expired pharmaceuticals
(200) (350) 150
Settlements and risks relating to litigation with former employees
(1,794) (308) (1,486)
Adjustment to provision for legal actions 0 531 (531)
Total non‐recurring operating expense (1,994) (499) (1,495)
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44. ATYPICAL AND/OR UNUSUAL TRANSACTIONS
In compliance with Consob communication of 28th July 2006, the Company performed no atypical and/or unusual transactions in 2012, as defined in that same communication, according to which atypical and/or unusual transactions are those which because of their significance or importance, the nature of the counterparties, the content of the transaction, the way in which the transfer price is decided and the timing of the event (close to the end of the financial year) might give rise to doubts concerning: the accuracy and completeness of the information in the financial statements, a conflict of interests, the security of the company’s assets, the protection of the interests of non‐controlling shareholders.
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RECORDATI S.p.A. Attachment 1 STATEMENT OF CHANGES IN INVESTMENTS € (thousands)
Balance at 31st Dec 2011
Share capital sales and
redemptions
Acquisitions subscriptions
Write‐downs (‐) Write‐backs (+) Balance at
31st Dec 2012
Investments in subsidiaries
Recordati S.A. – Luxembourg 177,586 ‐ 40,000 ‐ 217,586
Recordati España S.L. – Spain 180,537 ‐ ‐ ‐ 180,537
Recofarma S.r.l. – Milan 1,852 ‐ ‐ ‐ 1,852
Innova Pharma S.p.A. – Milan 1,733 ‐ ‐ ‐ 1,733
Recordati Portuguesa LDA – Portugal 78 ‐ ‐ ‐ 78
Bouchara Recordati S.a.s. – France 54,249 ‐ ‐ ‐ 54,249
Recordati Pharmaceuticals Ltd. – United Kingdom 752 ‐ ‐ ‐ 752
Recordati Hellas Pharmaceuticals S.A. – Greece 95 ‐ ‐ ‐ 95
Recordati Polska Sp.z.oo – Poland 5 ‐ 89 ‐ 94
Herbacos Recordati s.r.o. – Czech Republic 0 ‐ 15 ‐ 15
Farma‐Projekt Sp. z.o.o. ‐ Poland 0 ‐ 16,375 ‐ 16,375
416,887 0 56,479 0 473,366
Investments in other companies:
Tecnofarmaci S.p.A. – Pomezia (Rome) 87 ‐ ‐ ‐ 87
SPA Ricerche ed Education S.r.l. – Milan 0 ‐ ‐ ‐ 0
Sifir S.p.A. – Reggio Emilia 0 ‐ ‐ ‐ 0
Consorzio Dafne – Reggello (FI) 2 ‐ ‐ ‐ 2
Consorzio Nazionale Imballaggi – Rome 0 ‐ ‐ ‐ 0
Consorzio C4T – Pomezia (Rome) 78 ‐ ‐ ‐ 78
167 0 0 0 167
TOTAL 417,054 0 56,479 0 473,533
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RECORDATI S.p.A. Attachment 2 SUMMARY STATEMENT OF INVESTMENTS € (thousands) Balance at
31st Dec 2012
Percentage ownership
Number of shares or quotas
possessed
Investments in subsidiaries
Recordati S.A. – Luxembourg 217,586 100.00 82,500,000
Recordati España S.L. – Spain 180,537 68.45 1,635,660
Recofarma S.r.l. – Milan 1,852 100.00 1
Innova Pharma S.p.A. – Milan 1,733 100.00 960,000
Bouchara – Recordati S.a.s. – France 54,249 99.94 9,994
Recordati Portuguesa LDA – Portugal 78 98.00 1
Recordati Pharmaceuticals Ltd. – United Kingdom 752 3.33 500,000
Recordati Hellas Pharmaceuticals S.A. – Greece 95 0.68 9,500
Recordati Polska Sp. Zo.o – Poland 94 100.00 100
Herbacos Recordati s.r.o. – Czech Republic 15 0.08 1
Farma‐Projekt Sp. z.o.o. ‐ Poland 16,375 100.00 67,200
473,366
Investments in other companies:
Tecnofarmaci S.p.A. – Pomezia (Rome) 87 4.18 79,500
Sifir S.p.A. – Reggio Emilia 0 0.04 1,304
Consorzio Dafne – Reggello (FI) 2 1.26 1
Consorzio C4T – Pomezia (Rome) 78 0.23 1,300
Consorzio Nazionale Imballaggi – Rome 0 n.s. 1
TOTAL 473,533
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RECORDATI S.p.A. Attachment 3 COMPARISON BETWEEN THE CARRYING AMOUNT OF INVESTMENTS IN SUBSIDIARIES AND THEIR VALUATION USING THE EQUITY METHOD € (thousands)
Share capital
31.12.2012Equity
Profit (loss)
% Ownership
Corresponding pro‐rata equity
(A)
Carrying amount
(B)
Valuation Art. 2426
(C)
Investments
Recordati S.A. – Luxembourg 82,500 332,212 55,868 100.00 332,212 217,586 511,938
Recordati España S.L. ‐ Spain 238,966 278,539 6,359 68.447 190,652 180,537 189,527
Bouchara Recordati S.a.s. – France 4,600 26,377 20,331 99.94 26,361 54,249 78,570
Recordati Portuguesa LDA – Portugal 25 41 (10) 98.00 40 78 42
Recofarma S.r.l. – Milan 1,258 3,510 23 100.00 3,510 1,852 3,509
Innova Pharma S.p.A. – Milan 1,920 19,067 5,536 100.00 19,067 1,733 19,120
Recordati Pharmaceuticals Ltd. – United Kingdom 18,380 18,449 499 3.33 614 752 610
Recordati Hellas S.A – Greece 13,900 4,308 1,980 0.68 29 95 28
Recordati Polska 98 (102) (181) 100.00 (102) 94 (102)
Farma‐Projekt 825 35 (247) 100.00 35 16,375 16,162
Herbacos Recordati 1,018 6,510 3,073 0.08 5 15 184
363,490 688,946 93,231 572,424 473,366 819,318 Difference A‐B 99,058 Surplus C‐B 345,952
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RECORDATI S.p.A. Attachment 4 DETAILS OF ITEMS IN SHAREHOLDERS’ EQUITY € (thousands) Amount Possibility of
use
Amount available
Amount distributable without tax effects
Amount distributable
with tax effects
Notes
Share capital 26,141
Additional paid‐in capital reserve 83,718 A B C 83,718 15,074 68,644 1
Revaluation reserve 2,602 A B C 2,602 0 2,602
Statutory reserve 5,228 B
By‐law reserves 0
Treasury stock reserve (46,254) (46,254) (46,254)
Other reserves
Extraordinary reserve 112,545 A B C 111,867 111,867 0 2
Reserve under Art. 13 Par. 6 of Legislative Decree 124/1993 99 A B C 99 0 99
Research and investment grants 17,191 A B C 17,191 1,227 15,964 3
Extraordinary VAT concession reserve 517 A B C 517 0 517
Southern Italy investment fund 3,632
IAS reserve 85,983 A B C 85,983 85,983
Interim dividend (40,077) (40,077) (40,077)
Profit (loss) for the year 85,032 A B C 85,032 85,032
Total shareholders' equity 336,357 300,678 212,852 87,826
Legend: A for share capital increase B to replenish losses C to distribute to shareholders Notes:
1 The additional paid‐in capital reserve may be distributed when the statutory reserve has reached one fifth of the share capital. 2 The extraordinary reserve may not be distributed below the amount of € 678 thousand pursuant to Art.2426 point 8‐bis of the
Civil Code (see item 12). 3 The research and investment grant reserve has already been subject to taxation of € 1,227 thousand.
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RECORDATI S.p.A. Attachment 5 DISCLOSURE OF AUDITORS' FEES FOR ACCOUNTING AUDITS AND OTHER SERVICES Amounts in euro
Type of service Provider of the service Remuneration
Accounting audit Auditor of Parent Company 72.045
Due diligence Network of auditor of Parent Company 193.500
Attestation services Auditor of Parent Company 36.600
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ATTESTATION IN RESPECT OF THE FINANCIAL STATEMENTS UNDER ARTICLE 154‐BIS OF LEGISLATIVE DECREE 58/98 1. The undersigned, Giovanni Recordati, in his capacity as the Chief Executive Officer of the Company, and Fritz Squindo, as the Manager responsible for the preparation of the financial statements of Recordati S.p.A., pursuant to the provisions or article 154‐bis, clauses 3 and 4, of Legislative Decree No. 58 of 1998, hereby attest
• the adequacy with respect to the Company structure and
• the effective application,
of the administrative and accounting procedures applied in the preparation of the separate company financial statements for the financial year 2012.
2. They also attest that:
2.1 the separate financial statements at and for the year ended 31st December 2012:
• have been prepared in accordance with the international accounting standards, recognized by the European Union pursuant to Regulation (EC) 1606/2002 of the European Parliament and Counsel, dated 19th July 2002;
• correspond to the amounts shown in the Company’s accounts, books and records;
• provide a fair and correct representation of the financial conditions, results of operations and cash flows of the Company.
2.2 The report on operations includes a reliable operating and financial review of the Company as well as a description of the main risks and uncertainties to which it is exposed. Milan, 7th March 2013 Chief Executive Officer the Manager responsible for preparing the Company’s financial reports Giovanni Recordati Fritz Squindo