Annual Report 2009

Annual Report 2009
Mipharm at a glance
Total assets
Milan – Italy
Net fixed assets
(€/000)
57,580
(€/000)
27,785
20,438
42,190
20,703
34,670
2008
EBIT
2009
1st half
2009
2nd half
2008
EBITDA
(€/000)
2009
1st half
(€/000)
5,809
4,551
2,413
2,841
1,830
1,213
2009
2008
% on revenues
6.0%
14.7%
13.2%
2008
4.3%
2009
1st half
Net Profit
2nd half
(€/000)
1,906
1,806
MIPHARM® S.p.A.
Via Quaranta, 12
20141 Milan – Italy
Phone (39) 02 53548.1
Fax (39) 02 53548.010
e-mail: info@mipharm.it
www.mipharm.it
Milan – Italy
2009
2nd half
2008
2009
2nd half
% on revenues
4.3%
11.0%
2009
1st half
2009
2nd half
% on revenues
9.0%
17.3%
Annual Report 2009
Mipharm at a glance
Total assets
Milan – Italy
Net fixed assets
(€/000)
57,580
(€/000)
27,785
20,438
42,190
20,703
34,670
2008
EBIT
2009
1st half
2009
2nd half
2008
EBITDA
(€/000)
2009
1st half
(€/000)
5,809
4,551
2,413
2,841
1,830
1,213
2009
2008
% on revenues
6.0%
14.7%
13.2%
2008
4.3%
2009
1st half
Net Profit
2nd half
(€/000)
1,906
1,806
MIPHARM® S.p.A.
Via Quaranta, 12
20141 Milan – Italy
Phone (39) 02 53548.1
Fax (39) 02 53548.010
e-mail: info@mipharm.it
www.mipharm.it
Milan – Italy
2009
2nd half
2008
2009
2nd half
% on revenues
4.3%
11.0%
2009
1st half
2009
2nd half
% on revenues
9.0%
17.3%
Silvio Poma (1840-1932), “Imbarcadero sul lago d’Orta per l’isola di S. Giulio”, firmato “S. Poma”, olio su tela.
Silvio Poma (1840-1932), “Imbarcadero sul lago d’Orta per l’isola di S. Giulio”, firmato “S. Poma”, olio su tela.
Annual Report 2009
“ I can’t understand why people
are frightened of new ideas.
I’m frightened of the old ones.
”
John Cage
Milan – Italy
Cav. Lav. Dr. Giuseppe G. Miglio
Letter of the Chairman
Dear Shareholders,
Ladies and gentlemen:
2009 was a watershed year. While the world and Italy were battling the deepest recession in 70
years, Mipharm – despite and not because of the dismal environment – seized the opportunity for a
fundamental restructuring to become more focused, with a better awareness of customers’ needs, a
strict orientation towards innovation, growth and productivity, as well as a streamlined
organization, and, as a consequence, to become more profitable and financially stronger.
In a nutshell: Mipharm disposed in the middle of the year of its Business Units II (Commercial
Operations) and IV (Licensing Out) which found their new home at Novartis/Sandoz Italy. Along
with the business, the Company sold its respective Intellectual Property Rights. The New Mipharm
concentrated from then onward on its Business Unit I (Manufacturing) and III (Special Services)
with the development and production of Generics and Supergenerics as our new Core Business.
All our stakeholders profit greatly from these purposeful measures: our customers, doctors and their
patients, our associates and our shareholders as well as our financial partners, suppliers, and the
communities we are serving.
The Annual Report 2009 is, therefore, presented in two parts: a brief Part I covers the period 1
January – 30 June 2009, while a more elaborate Part II describes the development in the period of
1 July – 31 December 2009, where Mipharm is emerging as a New Company in a New
Environment.
The transformation, which went extraordinarily smoothly thanks to the close cooperation between
the Managements of Novartis/Sandoz and Mipharm as well as their associates, had striking effects:
while the first half of the year was charged with heavy restructuring costs, it nevertheless ended
“break even”. The second half produced immediately the intended results and ended with a Net
Income of € 1,805,568. The repositioning of Mipharm, combined with a renewed focus on growth,
innovation, productivity and cost management, is clearly well underway!
The Mission of the new Mipharm, which is described also in this year’s Annual Report and
represents the Company’s basic roadmap, has not changed. It reflects our compass for 2010 and
beyond and our values.
Last but not least , I want to use the occasion to thank all stakeholders who stood by Mipharm in
the past and on whose support I also count in the construction of the New Mipharm. A particularly
big “Thank you” goes to the Leadership of our Partner Novartis/Sandoz who accompanied the
creation of the New Mipharm closely and without whom our Company could not continue to
flourish.
Cav. Lav. Dr. Giuseppe Giampiero Miglio
Founder, Chairman and Chief Executive Officer
3
MIPHARM® Board of Directors
Giuseppe G. Miglio
Max Link
Luca Grisotti
Vittorio Rizzo
Cesare Frontini
Founder, Chairman
and Chief Executive Officer
Director
Director
Director
Director
Board of Auditors
Ermanno Ramella
Laura De Gioia
Vittorio Dodi
President
Auditor
Auditor
MIPHARM® S.p.A.
Headquarters:
Share Capital:
Milan Registered
Company’s number
and Fiscal code:
VAT number:
4
Via Quaranta, 12 – 20141 Milano – Italia
€ 7,627,389.00
10036820156
12304990158
MIPHARM® Executive Committee – MEC
Giuseppe G. Miglio
Founder, Chairman
and Chief Executive Officer / CEO
In the above picture, from your left:
Nicola Cadei
Luca Grisotti
Massimo Prini
Paola Fazzalari
Alessandro Cipriani
Gianluigi Dognini
Franco Boselli
COO
General Manager
Technology/Special Services
Legal Affairs
Production Operations
Pharma Manufacturing
Business Development
5
Part I
1 January – 30 June 2009
“Old Mipharm”
Luigi Comolli (1893-1976), “Veduta del Lago di Arona”, olio su tela.
6
Part I: Old Mipharm
Income Statement, Period Ending 30 June 2009 (in €)
(BU2+BU4 = for 5 months)
Period Ending
Revenues (Net Turnover)
30 June 2009
20,373,924
100.0%
Total Operating Costs
18,544,739
91.0%
EBITDA
1,829,186
9.0%
Operating Income (EBIT)
1,213,249
6.0%
–485,495
2.4%
** 14,806,648
72.6%
15,534,402
76.2%
2,228,540
10.9%
13,305,862
65.3%
Financial Costs
Extraordinary Income (Expenses)*
Pre-Tax Income (EBT)
Taxes
Net Income
(including non-recurrent Extraordinary Income due to discontinuation of Commercial Activity)
* Includes Restructuring Expenses in 2009
** Extraordinary Income includes:
Discontinuation of Commercial Activity: BU2+BU4
14,959,414
Non-Recurrent Expenses
–152,766
Extraordinary Income
14,806,648
Carlo Monti (1928), “La rocca di Angera”, olio su tavola.
7
Part I: Old Mipharm
Income Statement, Period Ending 30 June 2009 (in €)
(BU2+BU4 = for 5 months)
Period Ending
30 June 2009
Value added by discontinuation
of commercial activities (BU2+BU4)
Cost reimbursement by acquirer
15,214,422
1,125,000
16,339,422
Costs associated with discontinuation
–1,380,009
14,959,414
Other non-recurrent costs net of Administration
–152,766
14,806,648
Total Income Production (as per Balance Sheet)
Amortization and Depreciation
Other
20,714,149
–615,937
2,581
20,100,793
Other non-recurrent costs due to discontinuation
–1,380,008
18,720,785
Other non-recurrent costs
Total Operating Costs
8
–176,047
18,544,738
Part II
1 July – 31 December 2009
“New Mipharm”
Giuseppe Mantessi (1857-1931), “Lenno”, olio su tela, settembre 1910.
9
Part II: New Mipharm
Carlo Naymiller (1831-1902), “Lago di Como”, olio su tela.
10
Part II: New Mipharm
Income Statement, 6 months – Period Ending 31 December 2009 (in €)
6 months – Period Ending
Revenues
31 December 2009*
16,388,866
100.0%
Operating Costs
13,547,536
82.7%
EBITDA
2,841,330
17.3%
Operating Income (EBIT)
2,413,293
14.7%
241,100
1.5%
33,625
0.2%
Financial Costs
Non-recurrent Income (Expenses)
Pre-Tax Income (EBT)
2,138,568
Taxes
Net Income
333,000
2.0%
1,805,568
11.0%
* No comparative previous period mentioned, because a comparison is not meaningful
12 months – 2008
Revenues
44,071,612
Net Income
1,905,521
4.3% of Revenues
EBITDA
5,809,496
13.2% of Revenues
EBIT
4,551,170
10.3% of Revenues
Despite a much reduction Revenues base in the 6 months ending December 31, 2009 as compared to
the total year of 2008, Net Income in the 6 months ending December 31, 2009 was higher than in all
of 2008!
11
Part II: New Mipharm
Cash Flow Statement, 6 months – Period Ending 31 December 2009 (in €)
6 months – Period Ending
31 December 2009*
Operating Activities
Net Income (Loss)
Depreciation of PP&E
Amortization of Intangibles
Employee Severance Payments
(Increase) Decrease in Receivables
(Increase) Decrease in Inventory
(Increase) Decrease in Other Current Assets
Increase (Decrease) in Payables
1,805,568
370,833
57,204
–42,465
2,388,205
200,898
83,307
–868,464
Increase (Decrease) in Other Current Liabilities
51,182
Increase (Decrease) in Other Working Capital
–8,074
Net Cash from Continuing Operations
4,038,195
Net Cash Discontinued Operations
–2,150,000
Net Cash from Operating Activities
1,888,195
Investment Activities
Sale of PP&E and Intangibles
8,120
(Purchase) of PP&E and Intangibles
–701,021
Net Cash from Investment Activities
–692,901
Financing Activities
Payment of Cash Dividends
–15,575,128
Net Cash from Financing Activities
–15,575,128
Net Change in Cash & Cash Equivalents
–14,379,974
* No comparative previous period mentioned, because a comparison is not meaningful
12
Part II: New Mipharm
Cash Flow Statement, 6 months – Period Ending 31 December 2009 (in €)
6 months – Period Ending
31 Dec. 2009
30 June 2009
New Mipharm
Old Mipharm
1,805,568
134,980
370,833
69,810
57,204
546,127
–42,465
–36,611
2,388,205
–1,744,422
200,898
838,243
83,307
–3,767,835
Operating Activities
Net Income (Loss)
Depreciation of PP&E
Amortization of Intangibles
Employee Severance Payments
(Increase) Decrease in Receivables
(Increase) Decrease in Inventory
(Increase) Decrease in Other Current Assets
Increase (Decrease) in Payables
–868,464
Increase (Decrease) in Other Current Liabilities
51,182
1,498,814
Increase (Decrease) in Other Working Capital
–8,074
116,589
4,038,195
–2,344,305
Net Cash Discontinued Operations
–2,150,000
20,114,422
Net Cash from Operating Activities
1,888,195
17,770,117
8,120
6,945,484
(Purchase) of PP&E and Intangibles
–701,021
–215,092
Net Cash from Investment Activities
–692,901
6,730,392
Net Cash from Continuing Operations
Investment Activities
Sale of PP&E and Intangibles
Financing Activities
Payment of Cash Dividends
–15,575,128
Net Cash from Financing Activities
–15,575,128
Net Change in Cash & Cash Equivalents
–14,379,974
24,500,509
13
Part II: New Mipharm
Revenues, 6 months – Period Ending 31 December 2009 (in €)
6 months – Period Ending
Manufacturing
31 Dec. 2009
30 June 2009*
New Mipharm
Old Mipharm
15,596,957
14,536,289
791,909
696,661
16,388,866
15,232,950
Special Services
Total
* Revenues of Commercial Operations and Licensing Out divested in mid 2009 are not mentioned
Achille Formis (1832-1906), “Barche a Sesto Calende”, olio su tavola.
14
Part II: New Mipharm
“Lago Svizzero”.
Ercole Calvi (1824-1900), “L’incanto dal vero – Isola dei Pescatori”, olio su tavola, 1887.
15
Part II: New Mipharm
Profit and Loss Statement, 6 months – Period Ending 31 December 2009 (in €/000)
6 months – Period Ending
31 December 2009
A Value of manufacturing
16,790
Net Revenues (sales and services)
16,389
Other operating income
401
B Cost of production
Raw material
5,752
Salaries and wages
4,287
Value adjustments
455
a Amortization of intangible assets
57
b Depreciation of tangible assets
371
c Other adjustments
Other operating charges
Difference between value and cost of production
C Financial income and charges
D Extraordinary income and charges
Profit (loss) before income taxes
Income taxes
Net Profit (loss) for the financial period
16
14,377
27
3,883
2,413
–241
–33
2,139
–333
1,806
Part II: New Mipharm
Balance Sheet (in €/000)
Assets
2009
1 July
2009
31 December
(Opening Balance)
Old Mipharm
New Mipharm
37,081
13,916
20,769
1,935
10,121
4,256
231
1,734
7,650
4,301
20,438
20,703
20,271
167
20,509
194
61
50
57,580
34,669
29,878
20,742
14,967
1,153
8,324
5,434
9,063
923
7,412
3,344
148
148
C Employee severance payments
2,237
2,230
D Accruals and Deferred Income
102
104
E Capital and reserves
25,215
11,445
TOTAL EQUITY AND LIABILITIES
57,580
34,669
A Current Assets
Cash or Cash Equivalents
Inventories
Receivables and Other Assets
Non-Permanent Investments
B Fixed Assets
Tangible Assets
Intangible Assets
C Prepaid expenses and deferred charges
Total Assets
Equity and Liabilities
A Creditors
Banks
Other Financiers
Accounts Payable
Other Creditors
B Provision for risk and charges
17
Part II: New Mipharm
Ricci, “Sesto Calende – Il Ticino”, olio su tela.
18
Part II: New Mipharm
New Mipharm’s Mission
■ The New Mipharm attempts to become the Center of Excellence in Italy for Third
Party Manufacturing. The Company produces specialties of the highest standard to
prevent and cure diseases and enhance the quality of life of patients. Its special focus
is on high-class Generics and Supergenerics.
■ The “Special Services” Division will pursue the development of Supergenerics, thus
providing important additional benefits to patients.
■ The scope of Mipharm is global, yet the company sees itself as “Pharmaceutical
Ambassador” of Italian quality, innovation and design.
■ “Mipharm Industrial” will exploit the approvals obtained from the US Food and
Drug Administration to the fullest, and will closely cooperate with all major
regulatory agencies throughout the world.
■ The Company endorses Forward, a Novartis vision to contain cost, and balancing it
with the imperative of innovation, development and productivity.
■ Mipharm is an exemplary and reliable partner to its stakeholders, particularly its
patients, its customers, employees, shareholders, and the public at large.
■ Mipharm considers a close relationship with its customers as a key to its success. It
remains particularly committed to making the Strategic Partnership with
Novartis/Sandoz as mutually beneficial as possible.
■ People are Mipharm’s most important assets, and Mipharm will spare no effort to
hire, retain, and develop the best employees in the industry.
19
Produced by
MIPHARM S.p.A. – Italy
Printed by:
ERA Comunicazione S.r.l.
Milan, Italy – May 2010
Silvio Poma (1840-1932), “Imbarcadero sul lago d’Orta per l’isola di S. Giulio”, firmato “S. Poma”, olio su tela.
Annual Report 2009
Mipharm at a glance
Total assets
Milan – Italy
Net fixed assets
(€/000)
57,580
(€/000)
27,785
20,438
42,190
20,703
34,670
2008
EBIT
2009
1st half
2009
2nd half
2008
EBITDA
(€/000)
2009
1st half
(€/000)
5,809
4,551
2,413
2,841
1,830
1,213
2009
2008
% on revenues
6.0%
14.7%
13.2%
2008
4.3%
2009
1st half
Net Profit
2nd half
(€/000)
1,906
1,806
MIPHARM® S.p.A.
Via Quaranta, 12
20141 Milan – Italy
Phone (39) 02 53548.1
Fax (39) 02 53548.010
e-mail: info@mipharm.it
www.mipharm.it
Milan – Italy
2009
2nd half
2008
2009
2nd half
% on revenues
4.3%
11.0%
2009
1st half
2009
2nd half
% on revenues
9.0%
17.3%