Recordati Industria Chimica e Farmaceutica

Earnings Release • Oct 31, 2019

RECORDATI ANNOUNCES GROWTH IN THE FIRST NINE MONTHS 2019. REVENUES +8.6%, EBITDA +7.8%, OPERATING INCOME +4.9%, NET INCOME +6.6%. INTERIM DIVIDEND € 0.48 (+6.7%).

• Consolidated revenues € 1,100.4 million, +8.6%.
• EBITDA(1) € 409.6 million, +7.8%
• Operating income € 353.5 million, +4.9%.
• Net income € 253.7 million, +6.6%.
• Net financial position (2): net debt of € 498.7 million.
• Shareholders' equity € 1,179.6 million.
• Interim 2019 dividend of € 0.48 per share to be distributed.

Milan, 31 October 2019 – The Board of Directors of Recordati S.p.A. approved the Group's consolidated results for the first nine months of 2019 prepared in accordance with the recognition and measurement criteria prescribed by the International Financial Reporting Standards (IFRS). These financial statements will be available today at the company's offices and on the company's website www.recordati.com and can also be viewed on the authorized storage system ().

Financial highlights

• Consolidated revenues in the first nine months of 2019 are € 1,100.4 million, up by 8.6% compared to the same period of the preceding year. International sales grow by 9.1%.
• EBITDA (1), at 37.2% of sales, is € 409.6 million, an increase of 7.8% over the first nine months of 2018.
• Operating income, at 32.1% of sales, is € 353.5 million, an increase of 4.9% over the same period of the preceding year.
• Net income, at 23.1% of sales, is € 253.7 million, an increase of 6.6% over the first nine months of 2018.
• Net financial position(2) at 30 September 2019 records a net debt of € 498.7 million compared to net debt of € 588.4 million at 31 December 2018. Shareholders' equity is € 1,179.6 million.

(1) Net income before net interest, provision for taxes, depreciation, amortization and write down of both property, plant and equipment and intangible assets.

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

Corporate development news

In February, Recordati signed a license agreement with Aegerion Pharmaceuticals Inc. for the exclusive rights to commercialize Juxtapid®, currently approved for the treatment of homozygous familial hypercholesterolemia (HoFH), in Japan. The agreement includes a right of first negotiation for product commercialization in Japan of any potential new indications that may be developed by Aegerion. Upon

RECORDATI INDUSTRIA CHIMICA E FARMACEUTICA S.p.A.

Sede Legale VIA M. CIVITALI, 1 20148 MILANO, ITALIA TEL. (39) 0248787.1 FAX (39) 0240073747 CAPITALE SOCIALE € 26.140.644,50 i.v. REG. IMP. MILANO, MONZA, BRIANZA e LODI 00748210150 CODICE FISCALE/P. IVA 00748210150 R.E.A. MILANO 401832

Società Soggetta all'attività di Direzione e Coordinamento di Rossini Luxembourg S.àr.l

signing of the agreement an upfront payment of \$ 25 million was paid to Aegerion and a milestone of \$ 5 million was paid in June. In 2018 sales of the product in Japan were of \$ 10.8 million. Juxtapid® (lomitapide) is a microsomal triglyceride transfer protein inhibitor. Homozygous familial hypercholesterolemia is a serious, rare genetic disease that impairs the function of the receptor responsible for removing LDL-C ("bad" cholesterol) from the body. The addition of Juxtapid® to our portfolio of rare disease products in Japan is very important for the development of our recently established subsidiary in this country, given its potential for significant growth.

Recordati Rare Diseases, a worldwide leader in rare diseases and orphan drugs, announced that companies formerly operating under the name of Orphan Europe were recently renamed Recordati Rare Diseases, which is today the global brand of Recordati's organization dedicated to treatments for rare diseases and orphan drugs.

On 12 July 2019 an agreement was signed with Novartis for the acquisition of worldwide rights to Signifor® and Signifor® LAR® for the treatment of Cushing's disease and acromegaly in adult patients for whom surgery is not an option or for whom surgery has failed. Worldwide sales of Signifor® in 2018 were \$ 72 million. The agreement also covers the acquisition of worldwide rights to osilodrostat (LCI699), an investigational innovative drug for the treatment of endogenous Cushing's syndrome, for which marketing authorization applications have been filed in the European Union and in the USA.

Subsequent events

On 23 October 2019 the agreement with Novartis for the acquisition of worldwide rights to Signifor® and Signifor® LAR® and of worldwide rights to osilodrostat (LCI699), an investigational innovative drug for the treatment of endogenous Cushing's syndrome, was completed. A consideration of \$ 390 million was paid and was funded by existing liquidity and new debt facilities.

In the light of the growing complexity of the Group, as of 1st November 2019, Fritz Squindo will be appointed Group General Manager and will continue to report directly to the Chief Executive Officer. Amongst his duties he will be supporting the CEO in defining Group development strategies and overall economic objectives, as well as in supervising the Group operations and evaluating new business opportunities. On the same date, Luigi La Corte will join the company as Chief Financial Officer, managing the Finance, Taxation, Treasury, IT and Investor Relations activities and functions and will report directly to the Chief Executive Officer. Luigi La Corte has extensive experience in international finance roles, including in the pharmaceutical industry and in particular in AstraZeneca and GSK.

Management Comments

"The financial results obtained in the first nine months of the year confirm the continued growth of the Group", declared Andrea Recordati, CEO. "Furthermore, important initiatives were undertaken aimed at growing our rare diseases business globally. In addition to the exclusive license to Juxtapid® in Japan, in October the agreement for the acquisition of two products, Signifor® and Signifor® LAR®, as well as an innovative investigational drug, osilodrostat, for rare diseases in the area of endocrinology was successfully closed. This transaction is a key step in the achievement of our three-year business plan as we are very confident in the further growth opportunity of the Signifor® franchise and excited by the growth potential of osilodrostat on a worldwide basis. These two products together could generate annual peak sales in excess of \$ 200 million," continued Andrea Recordati.

Further resolutions

2019 Interim dividend

The Board of Directors resolved to distribute an interim dividend relating to the financial year 2019 amounting to € 0.48 (before withholding tax) on each outstanding share, excluding shares in treasury stock. The interim dividend will be paid, through the authorised intermediaries, as from November 20, 2019 (record date November 19, 2019) on coupon No. 24 to be presented on November 18, 2019.

The Independent Auditor's opinion on the distribution of the interim dividend is also available at the Company's registered offices as per article 2433-bis of the Italian Civil Code.

The Directors' Report and financial statements of Recordati S.p.A. as at 30 June 2019, on which the Board of Directors based its resolution to distribute the abovementioned interim dividend, are available at the Company's registered offices and published on the Company's website (www.recordati.com). Such documents can also be viewed on the authorized storage system ().

Conference call

Recordati will be hosting a conference call today 31 October 2019 at 4:00 pm Italian time (3:00 pm London time, 10:00 am New York time). The dial-in numbers are:

Italy	+39 02 8058811, toll free 800 213 858
UK	+44 1 212818003, toll free 800 0156384
USA	+1 718 7058794, toll free 855 2656959
France	+33 170918703
Germany	+49 69 255114451

Callers are invited to dial-in 10 minutes before conference time. If conference operator assistance is required during the connection, please digit * followed by 0 or call +39 02 8061371. A recording of the conference call will be placed on the website www.recordati.com.

A set of slides which will be referred to during the call will be available on our website www.recordati.com under Investors/Company Presentations.

Recordati, established in 1926, is an international pharmaceutical group, listed on the Italian Stock Exchange (Reuters RECI.MI, Bloomberg REC IM, ISIN IT 0003828271), with a total staff of more than 4,100, dedicated to the research, development, manufacturing and marketing of pharmaceuticals. Headquartered in Milan, Italy, Recordati has operations throughout the whole of Europe, including Russia, Turkey, North Africa, the United States of America, Canada, Mexico, some South American countries, Japan and Australia. An efficient field force of medical representatives promotes a wide range of innovative pharmaceuticals, both proprietary and under license, in a number of therapeutic areas including a specialized business dedicated to treatments for rare diseases. Recordati is a partner of choice for new product licenses for its territories. Recordati is committed to the research and development of new specialties with a focus on treatments for rare diseases. Consolidated revenue for 2018 was € 1,352.2 million, operating income was € 442.2 million and net income was € 312.4 million.

For further information:

Recordati website: www.recordati.com

Investor Relations Media Relations Marianne Tatschke Studio Noris Morano (39)0248787393 (39)0276004736, (39)0276004745

e-mail: investorelations@recordati.it e-mail: norismorano@studionorismorano.com

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

RECORDATI GROUP

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

INCOME STATEMENT	First nine months 2019	First nine months 2018	Change %
REVENUE	1,100,418	1,013,308	8.6
Cost of sales	(329,069)	(296,015)	11.2
GROSS PROFIT	771,349	717,293	7.5
Selling expenses	(273,446)	(250,258)	9.3
Research and development expenses	(91,581)	(79,436)	15.3
General & administrative expenses	(51,740)	(48,543)	6.6
Other income (expenses), net	(1,082)	(2,087)	(48.2)
OPERATING INCOME	353,500	336,969	4.9
Financial income (expenses), net	(15,980)	(13,757)	16.2
PRE-TAX INCOME	337,520	323,212	4.4
Provision for income taxes	(83,846)	(85,335)	(1.7)
NET INCOME	253,674	237,877	6.6
Attributable to:
Equity holders of the parent	253,642	237,841	6.6
Non-controlling interests	32	36	(11.1)
EARNINGS PER SHARE
Basic(1)	€ 1.239	€ 1.163	6.5
Diluted(2)	€ 1.213	€ 1.137	6.7
EBITDA(3)	409,612	380,050	7.8

(1) Earnings per share (EPS) are based on average shares outstanding during each year, 204,706,235 in 2019 and 204,556,132 in 2018, net of average treasury stock which amounted to 4,418,921 shares in 2019 and to 4,569,024 shares in 2018.

(2) Diluted earnings per share is calculated taking into account stock options granted to employees.

(3) Net income before net interest, provision for taxes, depreciation, amortization and write down of both property, plant and equipment and intangible assets.

COMPOSITION OF REVENUE	First nine months	First nine months	Change %
	2019	2018
Total revenue	1,100,418	1,013,308	8.6
Italy	220,597	206,704	6.7
International	879,821	806,604	9.1

RECORDATI GROUP

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

INCOME STATEMENT	Third Quarter 2019	Third Quarter 2018	Change %
REVENUE	357,165	317,254	12.6
Cost of sales	(105,771)	(93,002)	13.7
GROSS PROFIT	251,394	224,252	12.1
Selling expenses	(89,562)	(77,465)	15.6
Research and development expenses	(31,824)	(25,809)	23.3
General & administrative expenses	(17,142)	(15,403)	11.3
Other income (expenses), net	(1,925)	(537)	n.s.
OPERATING INCOME	110,941	105,038	5.6
Financial income (expenses), net	(5,058)	(5,299)	(4.5)
PRE-TAX INCOME	105,883	99,739	6.2
Provision for income taxes	(26,486)	(26,050)	1.7
NET INCOME	79,400	73,689	7.8
Attributable to:
Equity holders of the parent	79,390	73,677	7.8
Non-controlling interests	10	12	(16.7)
EBITDA(1)	130,299	120,033	8.6

(1) Net income before net interest, provision for taxes, depreciation, amortization and write down of both property, plant and equipment and intangible assets.

COMPOSITION OF REVENUE	Third Quarter 2019	Third Quarter 2018	Change %
Total revenue	357,165	317,254	12.6
Italy	65,500	60,913	7.5
International	291,665	256,341	13.8

RECORDATI GROUP

Summary of consolidated results prepared in accordance with the International Financial Reporting Standards (IFRS) - (thousands of €)

ASSETS	30.09.2019	31.12.2018
Property, plant and equipment	131,080	103,582
Intangible assets	702,424	672,462
Goodwill	582,226	579,557
Equity investments	29,208	20,773
Non-current receivables	6,137	5,860
Deferred tax assets	74,762	81,267
TOTAL NON-CURRENT ASSETS	1,525,837	1,463,501
Inventories	213,454	206,084
Trade receivables	277,371	245,742
Other receivables	28,944	38,462
Other current assets	11,749	5,193
Fair value of hedging derivatives (cash flow hedge)	11,789	6,414
Short-term financial investments, cash and cash equivalents	612,948	198,036
TOTAL CURRENT ASSETS	1,156,255	699,931
TOTAL ASSETS	2,682,092	2,163,432
EQUITY AND LIABILITIES	30.09.2019	31.12.2018
Share capital	26,141	26,141
Capital in excess of par value	83,719	83,719
Treasury stock	(97,902)	(145,608)
Hedging reserve	(8,081)	(8,399)
Translation reserve	(134,495)	(154,146)
Other reserves	54,700	43,081
Retained earnings	1,001,669	897,990
Net income for the period	253,642	312,376
Interim dividend	0	(91,761)
GROUP SHAREHOLDERS' EQUITY	1,179,393	963,393
Minority interest	225	193
SHAREHOLDERS' EQUITY	1,179,618	963,586
Loans due after one year	1,005,638	640,647
Employees' termination pay	19,515	19,547
Deferred tax liabilities	45,564	45,653
Other non-current liabilities	3,257	3,257
TOTAL NON-CURRENT LIABILITIES	1,073,974	709,104
Trade payables	148,179	165,020
Other payables	83,237	85,534
Tax liabilities	38,056	42,149
Other current liabilities	15,253	19,359
Provisions	16,912	21,446
Fair value of hedging derivatives (cash flow hedge)	9,303	9,746
Loans due within one year	101,094	130,583
Bank overdrafts	16,466	16,905
TOTAL CURRENT LIABILITIES	428,500	490,742
TOTAL EQUITY AND LIABILITIES	2,682,092	2,163,432

DECLARATION BY THE MANAGER RESPONSIBLE FOR PREPARING THE COMPANY'S FINANCIAL REPORTS

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