Recordati Industria Chimica e Farmaceutica

Earnings Release • Jul 28, 2023

2023 FIRST HALF RESULTS

Milano, July 28th 2023

FIRST HALF RESULTS CONFIRM STRONG MOMENTUM OF THE GROUP; NEW AGREEMENT WITH GSK FURTHER STRENGTHENS SPC PORTFOLIO

• First half results confirm the excellent momentum of the Group, thanks to strong performance of all business, with robust growth across both SPC and RRD and continued delivery of sector leading margins
• Net Revenue at € 1,044.3 million is +17.0% vs PY or +15.4% on a like-for-like (1) basis at CER
  • o SPC at € 668.9 million, +10.2% vs PY or +15.0% at CER (+8.8% excluding Türkiye), growing ahead of relevant markets and with growth across all regions and core therapeutic areas
  • o RRD at € 344.4 million, +32.2% vs PY or +15.5% like for like (1) at CER, with Endocrinology growing by 38.2%, Oncology contributing € 95.6 million (+13.1% pro forma) and with resilient Metabolic revenue
• Net Revenue impacted by strong FX headwind (particularly from devaluation of TRY), impacting by -€ 30 million, mostly in Q2
• EBITDA (2) of € 406.2 million remains strong at 38.9%, reflecting strong revenue performance, resilient gross margin and benefit from efficiency initiatives
• Adjusted Net Income (3) of € 287.4 million, +27.9% vs PY, driven by the positive operating results and lower financial expenses, which benefits from € 4.7 million FX gains in H1 2023 vs € 18.7 million FX losses in H1 2022
• Free Cash Flow (4) of € 261.7 million, +€ 43.0 million vs PY, with Net debt (5) of € 1,326.2 million, leverage at 1.8x EBITDA
• Key R&D pipeline projects progressing to plan
• Agreement with GSK complements and strengthens SPC urology franchise, with addition of Avodart and Combodart in 21 countries

▪ Despite strong FX headwinds, on track to deliver on upgraded Full year 2023 guidance as provided in May

• 3) Net income excluding amortization and write-downs of intangible assets (except software) and goodwill, non-recurring items, non-cash charges arising from the allocation of the purchase price of EUSA Pharma to the gross margin of acquired inventory (IFRS 3) and monetary net gains/losses
• 2 from hyperinflation (IAS 29), net of tax effects

¹⁾ Pro-forma growth calculated adding Q1 2022 revenue of EUSA Pharma

²⁾ Net income before income taxes, financial income and expenses, non-recurring items, and non-cash charges arising from the allocation of the purchase price of EUSA Pharma to the gross margin of acquired inventory (IFRS 3)

⁴⁾ Operating cash flow excluding financing items, milestones, dividends, purchases of treasury shares net of proceeds from exercise of stock options

⁵⁾ Cash and cash equivalents, less bank debts and loans, which include the measurement at fair value of hedging derivatives

SPC UROLOGY FRANCHISE – AGREEMENT FOR THE DISTRIBUTION OF AVODART® AND COMBODART® IN EUROPE

Transaction overview

• Agreement with GSK to commercialize Avodart and Combodart/Duodart across 21 countries(1) , mainly in Europe
• Operations to start on a country-by-country basis progressively upon completion of the relevant transition activities (majority expected by end of 2023)
• Long term commercialization agreement, subject to certain performance conditions

Key financials

• Upfront payment of € 245 million, recognizing revenue and margins upon country-by-country transition; GSK will receive income on an ongoing basis for the supply of both products
• Deal expected to be fully accretive from 2024, with € 10-20 million revenue and positive EBITDA contribution in 2023

Products

• Post-LoE originator brands, being market leaders in the global dutasteride and dutasteride+tamsulosin fixed dose combination market. Approved in more than 85 Countries globally
• Approx. € 115 million annual sales in 2022 in the 21 European countries, of which 70% from Spain and Italy, declining in recent years after LoE, with ambition to stabilize and grow in key markets

	- Dutasteride - First launched in 2003, LoE in 2017
	- Dutasteride / tamsulosin fixed-dose combination - First launched in 2010, LoE in 04/2020

Indications: Treatment of moderate to severe symptoms of benign prostatic hyperplasia (BPH); Reduction in the risk of acute urinary retention (AUR) and surgery in patients with moderate to severe symptoms of BPH.

Dutasteride is an oral, selective, irreversible inhibitor of type 1 and type 2 5α-reductase (5AR), the intracellular enzyme that converts testosterone to dihydrotestosterone (DHT) in the prostate gland; as a result, dutasteride reduces intraprostatic and serum levels of DHT, decreasing prostate volume.

Tamsulosin is a selective α1-adrenoceptor antagonist (α1-blocker). The effects of tamsulosin are targeted for the smooth muscle receptors of the prostate, bladder and urethra. Blocking this receptor relaxes the smooth muscle of the bladder and urethra to improve urine flow and symptoms.

STRATEGIC RATIONALE OF NEW AGREEMENT

STRENGTHENING RECORDATI LEADERSHIP IN BENIGN PROSTATIC HYPERPLASIA (BPH)

• ✓ Two leading and well-established originator brands in core therapy area of urology
• ✓ Synergistic with Urorec, addressing different patient needs, strengthening leading BPH portfolio
• ✓ Leveraging on our proven competitive commercial platform in Europe (no additional salesforce)
• ✓ Fully in line with our strategy in Specialty & Primary Care

Urology portfolio
Prostate				Other products
Volume	increased	increased	not critical
Symptoms	absent / mild	moderate to severe	moderate to severe
Molecules	5α-reductase inhibitors (5-ARIs): Dutasteride (AVODART); finasteride.	1. α1-blocker with 5-ARI: tamsulosin+dutasteride (Combodart); tamsulosin+finasteride; doxazosin+finasteride; 2. α1-blocker with muscarinic receptor antagonist	α1-blockers: Silodosin (UROREC); alfuzosin; doxazosin; tamsulosin; terazosin
Therapeutic objective	Stop / slow down prostate volume increase	1. Fast relief of symptoms 2. Stop / slow down prostate volume increase	Fast relief of symptoms

CONTINUED ROBUST UNDERLYING GROWTH IN SPC, ABSORBING STRONG FX HEADWIND IN Q2

Pharmaceutical Revenue (1) H1 2023 vs H1 2022

Key highlights

• Double-digit growth in the first half driven by volume through enhanced in-market competitiveness across all key markets and supported by exceptional Cough & Cold season in Q1; overall FX headwind of -8% in Q2 (TRY, RUB)
• Cardiovascular: First half sales still reflect Q1 phasing benefits on international lercanidipine sales, strong Reselip® uptake in France with metoprolol and pitavastatin sales broadly stable
• Urology: Growth driven by continued strong performance of Eligard®, continuing to increase share across markets since relaunch, with new device launch initiating in Q3. Robust growth of silodosin sales after LoE stabilization
• Gastrointestinal: Double digit growth of our OTC portfolio, including Procto-Glyvenol® and probiotics, combined with strong underlying growth of Casen-RX portfolio
• Cough & Cold sales remain significantly above pre-pandemic levels also reflecting competitive growth of both RX and OTC products, with sales in Q2 returning closer to 2022 levels

ENDO AND ONCO FRANCHISE DRIVE DOUBLE-DIGIT GROWTH OF RARE DISEASES WITH RESILIENT METABOLIC SALES

Revenue H1 2023 vs H1 2022

million Euro

6 1) Of which Signifor® and Signifor® LAR of € 50.3 million and Isturisa® of € 60.3 million 2) Pro-forma growth at CER calculated adding Q1 2022 revenue of EUSA Pharma

Key highlights

• Endocrinology: continued strong uptake of Isturisa® in US, EU and RoW markets behind recent reimbursements and solid double-digit growth of Signifor®
• Oncology: strong volume growth of Qarziba® in EMEA and RoW and Sylvant® across all regions
• Metabolic: Continued strong volume growth of Panhematin® in US with slow erosion on Carbaglu® from recent generic entries in US. Ledaga® and Juxtapid® also providing doubledigit growth in EU and Japan

• Pipeline opportunities on track:

• o Phase II study of pasireotide in Post-Bariatric Hypoglycemia (PBH) on track to start Q3 2023
• o Qarziba® development plan toward US Biologics License Application (BLA) on track with on going activities in preparation for FDA Type C meeting in H2 2023
• o REC 0559 phase II study enrolment proceeding to plan, data read out confirmed in Q2 2024
• o Carbaglu® officially approved in China in June, awaiting national reimbursement approval, preparing for launch in early 2024

ALL REGIONS DELIVERING SOLID GROWTH

COMPOSITION OF REVENUE BY GEOGRAPHY

(million Euro)	H1 2023	H1 2022	Change %
Italy	157.5	143.8	9.5
U.S.A.	150.9	118.5	27.3
France	95.7	84.7	13.0
Germany	78.0	82.2	(5.1)
Spain	76.7	69.3	10.7
Portugal	29.6	27.2	8.7
Türkiye	45.0	35.3	27.5
Russia, other CIS countries and Ukraine	70.5	50.3	40.2
Other CEE countries	73.6	62.5	17.7
Other W. Europe countries	70.9	64.7	9.5
North Africa	21.2	19.0	11.8
Other international sales	143.7	110.0	30.6
TOTAL PHARMACEUTICALS	1,013.3	867.7	16.8
CHEMICALS	30.9	24.8	24.6
	H1 2023	H1 2022	Change %
(In local currency, million)
U.S.A. (USD)	163.1	129.6	25.8
Türkiye (TRY)	1,224.0	519.0	135.8
Russia (RUB)(1)	4,041.1	3,231.6	25.0

H1 2023 P&L – CONTINUING TO DELIVER SECTOR LEADING MARGINS

OPERATING LEVERAGE AND COST DISCIPLINE SUSTAIN EBITDA AT 38.9% OF REVENUE

(million Euro)	H1 2023	H1 2022	Change %
Revenue	1,044.3	892.5	17.0
Gross Profit	732.3	624.6	17.2
as % of revenue	70.1	70.0
Adjusted Gross Profit(1)	753.2	641.5	17.4
as % of revenue	72.1	71.9
SG&A Expenses	295.6	266.8	10.8
as % of revenue	28.3	29.9
R&D Expenses	119.0	99.3	19.8
as % of revenue	11.4	11.1
Other Income (Expense), net	(4.2)	(26.2)	(84.0)
as % of revenue	(0.4)	(2.9)
Operating Income	313.4	232.3	34.9
as % of revenue	30.0	26.0
Adjusted Operating Income(2)	338.2	275.5	22.8
as % of revenue	32.4	30.9
Financial income/(Expenses), net	(24.6)	(38.1)	(35.6)
as % of revenue	(2.4)	(4.3)
Net Income	227.6	151.4	50.3
as % of revenue	21.8	17.0
Adjusted Net Income(3)	287.4	224.8	27.9
as % of revenue	27.5	25.2
EBITDA(4)	406.2	334.9	21.3
as % of revenue	38.9	37.5

1) Gross profit adjusted from impact of non-cash charges arising from the allocation of the purchase price of EUSA Pharma to the gross margin of acquired inventory (IFRS 3)

2) Net income before income taxes, financial income and expenses, non-recurring items, and non-cash charges arising from the allocation of the purchase price of EUSA Pharma to the gross margin of acquired inventory (IFRS 3) 8

3) Net income excluding amortization and write-downs of intangible assets (except software) and goodwill, non-recurring items, non-cash charges arising from the allocation of the purchase price of EUSA Pharma to the gross margin of acquired inventory (IFRS 3) and monetary net gains/losses from hyperinflation (IAS 29), net of tax effects

4) Net income before income taxes, financial income and expenses, depreciation, amortization and write-downs of property, plant and equipment, intangible assets and goodwill, non-recurring items and non-cash charges arising from the allocation of the purchase price of EUSA Pharma to the gross margin of acquired inventory (IFRS 3)

STRONG H1 2023 CASH FLOW – AHEAD OF PRIOR YEAR

(million Euro)	H1 2023	H1 2022	Change
EBITDA(1)	406.2	334.9	71.3
Movements in working capital	(76.7)	(17.8)	(58.9)
Changes in other assets & liabilities	(5.4)	(11.1)	5.7
Interest received/(paid)	(26.3)	(8.1)	(18.2)
Income Tax Paid	(34.9)	(42.5)	7.6
Other	8.5	(29.3)	37.8
Cash flow from Operating activities	271.4	226.1	45.3
Capex (net of disposals)	(9.7)	(7.4)	(2.3)
Free cash flow(2)	261.7	218.7	43.0
Acquisition of subsidiaries	-	(653.8)	653.8
Increase in intangible assets (net of disposals)	(26.3)	(54.0)	27.7
Disposals of assets	3.0	-	3.0
Dividends paid	(127.0)	(119.5)	(7.5)
Purchase of treasury shares (net of proceeds)	1.2	(16.6)	17.8
Other financing cash flows(3)	131.2	754.4	(623.2)
Change in cash and cash equivalents	243.8	129.2	114.6

9 1) Net income before income taxes, financial income and expenses, depreciation, amortization and write-downs of property, plant and equipment, intangible assets and goodwill, non-recurring items and non-cash charges arising from the allocation of the purchase price of EUSA Pharma to the gross margin of acquired inventory (IFRS 3)

2) Operating cash flow excluding financing items, milestones, dividends, purchases of treasury shares net of proceeds from exercise of stock options

3) Opening of financial debts net of repayments and currency translation effect on cash and cash equivalents. 2022 amount also includes values from EUSA Pharma: cash and cash equivalents for € 53.2 million and loan repaid for (€ 78.2 million)

SOLID NET FINANCIAL POSITION – LEVERAGE AT 1.8x LTM EBITDA AVODART AND COMBODART PAYMENT FINANCED VIA NEW CLUB LOAN FACILITY

(million Euro)	30 JUN 2023	31 DEC 2022	Change
Cash and cash equivalents	528.6	284.7	243.9
Short-term debts to banks and other lenders	(15.9)	(83.4)	67.5
due within one year(1) Loans and leases –	(375.9)	(289.0)	(86.9)
due after one year(1) Loans and leases –	(1,463.0)	(1,332.2)	(130.8)
NET FINANCIAL POSITION (2)	(1,326.2)	(1,419.9)	93.7

ON TRACK TO DELIVER ON UPGRADED FY 2023 GUIDANCE

	FY 2022 Actual	FY 2023 Target As revised May 11th	Outlook H2
Revenue	1,853.3	2,050 – 2,090	Revenue: • Mid-single digit growth of SPC (at CER) o Double-digit growth of RRD (at CER) o o FX headwind approx. -5% in H2 (vs -3.3% in H1) € 10-20 million expected from Avodart and Combodart o
EBITDA (1) margin on sales	672.8 36.3%	750 – 770 +/- 37%	• EBITDA: Strong underlying margins o Historical phasing of spend and FX headwinds o Step up in R&D activities o o Minimum (positive) contribution from deal with GSK
Adjusted Net Income (2) margin on sales	473.3 25.5%	490 – 500 +/- 24%	Adj. Net Income: • Step up expected in financial expenses (estimated FY 2023 o ~ € 65 million, with some volatility due to FX) FY tax rate ~ 22% o

1) Net income before income taxes, financial income and expenses, depreciation, amortization and write-downs of property, plant and equipment, intangible assets and goodwill, non-recurring items and non-cash charges arising from the allocation of the purchase price of EUSA Pharma to the gross margin of acquired inventory (IFRS 3)

11 2) Net income excluding amortization and write-downs of intangible assets (except software) and goodwill, non-recurring items, non-cash charges arising from the allocation of the purchase price of EUSA Pharma to the gross margin of acquired inventory (IFRS 3) and monetary net gains/losses from hyperinflation (IAS 29), net of tax effects

QUESTIONS & ANSWERS

CORPORATE PRODUCTS

(million Euro)	H1 2023	H1 2022	Change %
(1) Zanidip® and Zanipress® (lercanidipine+enalapril)	103.5	86.6	19.5
Seloken®/Seloken® ZOK/Logimax® (metoprolol/metoprolol+felodipine)	49.0	48.5	1.1
Urorec® (silodosin)	35.8	31.1	15.0
Livazo® (pitavastatin)	24.5	23.5	4.2
Eligard®	55.0	51.5	6.7
Other corporate products(2)	178.9	148.3	20.7
Rare Diseases	344.4	260.4	32.2

WELL–DIVERSIFIED REVENUE BASE

Therapeutic Areas Geographic

Total Revenue H1 2023 Pharmaceutical Revenue H1 2023

North Africa

FIRST HALF 2023 RESULTS

OPERATING SEGMENTS

Total Revenue H1 2023 EBITDA H1 2023

Margin on Sales: Rare Diseases: EBITDA (1) 45.0% Specialty and Primary care: EBITDA (1) 35.9%

FIRST HALF 2023 RESULTS – ADJUSTING ITEMS

(million Euro) H1 2023 H1 2022 Change % Net income 227.6 151.4 50.3 Income taxes 61.3 42.7 Financial (income)/expenses, net 24.6 38.1 o/w net FX (gains)/losses (2) (4.7) 18.7 o/w net monetary (gains)/losses from application of IAS 29 (Türkiye) (0.9) 4.7 Non-recurring expenses 3.9 26.4 Non-cash charges from PPA inventory uplift 20.9 16.9 Adjusted Operating Income(3) 338.2 275.5 22.8 Depreciation, amortization and write downs 67.9 59.4 o/w EUSA Pharma 12.8 6.6 o/w write downs of assets - 2.2 EBITDA(1) 406.2 334.9 21.3 Reconciliation of Net income to EBITDA (1)

Reconciliation of Reported Net income to Adjusted Net income (4)

(million Euro)	H1 2023	H1 2022	Change %
Net income	227.6	151.4	50.3
Net monetary (gains)/losses (IAS 29 Türkiye)	(0.9)	4.7
Non-recurring expenses	3.9	26.4
Non-cash charges from PPA inventory uplift	20.9	16.9
Amortization and write-downs of intangible assets (exc. software)	52.5	45.6
o/w EUSA Pharma	12.5	6.2
Tax effects	(16.6)	(20.2)
Adjusted Net income(4)	287.4	224.8	27.9

Summary of key items

• FX gains of € 4.7 million vs € 18.7 million losses in H1 2022 (RUB)
• Net monetary gains of € 0.9 million from application of IAS 29 (Türkiye) in H1 2023, vs € -4.7 million losses in 2022
• Non-recurring costs of € 3.9 million, mainly for SPC rightsizing, significantly reduced vs prior year
• Non-cash charges arising from Purchase Price Allocation (IFRS 3) of EUSA Pharma: € 20.9 million in H1 2023 at the level of gross margin (from unwind of inventory revaluation), consistent with prior year
• D&A and write downs of assets: increase of € 8.5 million, of which € 6.2 million from EUSA Pharma

17 1) Net income before income taxes, financial income and expenses, depreciation, amortization and write-downs of property, plant and equipment, intangible assets and goodwill, non-recurring items and non-cash charges arising from the allocation of the purchase price of EUSA Pharma to the gross margin of acquired inventory (IFRS 3) 2) FX losses and FX driven consolidation adjustments

3) Net income before income taxes, financial income and expenses, non-recurring items, and non-cash charges arising from the allocation of the purchase price of EUSA Pharma to the gross margin of acquired inventory (IFRS 3)

4) Net income excluding amortization and write-downs of intangible assets (except software) and goodwill, non-recurring items, non-cash charges arising from the allocation of the purchase price of EUSA Pharma to the gross margin of acquired inventory (IFRS 3) and monetary net gains/losses from hyperinflation (IAS 29), net of tax effects

COMPANY DECLARATIONS, DISCLAIMERS AND PROFILE

DECLARATION BY THE MANAGER RESPONSIBLE FOR PREPARING THE COMPANY'S FINANCIAL REPORTS The manager responsible for preparing the company's financial reports Luigi La Corte declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Law on Finance, that the accounting information contained in this presentation corresponds to the document results, books and accounting records.

Statements contained in this presentation, other than historical facts, are "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements are based on currently available information, on current best estimates, and on assumptions believed to be reasonable. This information, these estimates and assumptions may prove to be incomplete or erroneous, and involve numerous risks and uncertainties, beyond the Company's control. Hence, actual results may differ materially from those expressed or implied by such forward-looking statements.

All mentions and descriptions of Recordati products are intended solely as information on the general nature of the company's activities and are not intended to indicate the advisability of administering any product in any particular instance.

Recordati (Reuters RECI.MI, Bloomberg REC IM) is an international pharmaceutical group listed on the Italian Stock Exchange (ISIN IT 0003828271) uniquely structured to bring treatment across specialty and primary care, consumer healthcare, and rare diseases. We believe that health, and the opportunity to live life to the fullest, is a right, not a privilege. We want to support people in unlocking the full potential of their life. We have fully integrated operations across research & development, chemical and finished product manufacturing through to commercialisation and licensing. Established in 1926, Recordati operates in approximately 150 countries across EMEA, Americas and APAC regions. At the end of 2022, Recordati employed more than 4,300 people and consolidated revenue of € 1,853.3 million. For more information, please visit www.recordati.com.

Offices:

Recordati S.p.A. Via M. Civitali 1 20148 Milano, Italy

Investor Relations:

Federica De Medici +39 02 48787146 demedici.f@recordati.it

Investor Relations:

Lucia Abbatantuoni +39 02 48787213 abbatantuoni.l@recordati.it Website: www.recordati.com