Recordati (REC) 43rd Annual J.P. Morgan Healthcare Conference 2025 summary

Business Overview and Financial Performance

• Operates two main units: specialty primary care (SPC) and rare disease, with SPC contributing two-thirds of revenue and rare disease approaching 40%, both showing strong growth and margins.

• Achieved a compounded average growth rate just under 9% over the last decade, with return on invested capital averaging 15-20%.

• 2024 revenues expected to exceed €2.3B, with projections for over €2.6B in 2025; rare disease revenue is nearing €1B.

• Maintains high margins (EBITDA margin at 38.2% in 9M 2024) and strong cash flow, supporting continued investment and M&A activity.

• Recognized for ESG performance with MSCI A, FTSE4Good, and ISS ESG Prime ratings.

Growth Strategy and M&A

• Growth is driven by organic expansion and disciplined M&A, with 36 deals since 2007 totaling over €3.5B, especially in rare diseases.

• M&A and business development account for about half of total growth, with recent focus on rare disease and specialty franchises.

• Recent acquisitions include Enjaymo from Sanofi, expanding the rare disease portfolio and presence in Japan.

• Integration of acquired assets is a core strength, with a dedicated M&A team enabling fast, competitive deal execution.

• Maintains a clear dividend and capital allocation policy, with leverage expected to remain below two times EBITDA.

Specialty Primary Care (SPC) Business

• SPC delivered 6.5% organic growth in the first nine months of 2024, led by urology (+51.4%) and cardiovascular (+2.1%).

• Portfolio includes over 400 brands in urology, cardiovascular, gastroenterology, and OTC, focused on Europe and select adjacent markets.

• No plans to expand SPC beyond current geographies; aims to be a preferred partner for late-stage products in its core therapeutic areas.

• SPC expected to sustain mid-single-digit growth at attractive margins.