Recordati (REC) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue reached €2,082.3m, up 12.4% reported and 14.0% like-for-like at CER; results were at the high end of guidance.

• SPC and Rare Diseases delivered strong growth despite FX headwinds; FY 2024 guidance targets continued revenue and EBITDA growth.

Financial highlights

• Revenue was €2,082.3m, up 12.4%; gross profit was €1,422.6m, up 10.6%, with a 68.3% gross margin versus 69.4%.

• Operating income was €558.0m, up 27.6%; adjusted operating income was €626.6m, up 16.9%, with a 30.1% margin versus 28.9%.

• Net income was €389.2m, up 24.6%; adjusted net income was €524.6m, up 10.8%.

• EBITDA was €769.6m, up 14.4%; free cash flow was €456.0m, up €17.0m year over year.

Outlook and guidance

• FY 2024 targets: revenue €2,260–2,320m, EBITDA €830–860m, and adjusted net income €550–570m.

• Adjusted net income margin guidance is ~24.5%, reflecting higher OECD tax rates and slightly higher financial expenses excluding FX gains and losses.

• 2024 assumptions include mid-single-digit SPC and double-digit RRD organic growth at CER, ~€115m revenue from Avodart and Combodart/Duodart, and a 2–3% FX headwind versus 2023.

• FY 2025 targets include revenue above €2.4bn on the current portfolio, an EBITDA margin of ~37%, and free-cash-flow conversion of 90–100% of adjusted net income.

• Planned R&D investment is 7–8% of revenue; the FY 2025 net debt/EBITDA target is 1.7x–2x, subject to the timing and structure of future deals.