Annual Report 2008

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Annual Report 2008
Annual Report 2008
Mipharm at a glance
Milan – Italy
Total assets
42,083
40,743
2006
2007
EBIT
Net fixed assets
(€/000)
42,190
2008
26,884
26,406
2006
2007
EBITDA
(€/000)
5,103
27,785
2008
(€/000)
7,424
4,551
4,325
(€/000)
6,690
5,809
2006
MIPHARM® S.p.A.
Via Quaranta, 12
20141 Milan – Italy
Phone (39) 02 53548.1
Fax (39) 02 53548.010
e-mail: [email protected]
www.mipharm.it
Milan – Italy
2007
2008
2006
2007
2008
Annual Report 2008
Mipharm at a glance
Milan – Italy
Total assets
Net fixed assets
(€/000)
42,083
40,743
42,190
2006
2007
2008
EBIT
26,884
26,406
27,785
2006
2007
2008
EBITDA
(€/000)
(€/000)
5,103
(€/000)
7,424
4,551
6,690
4,325
5,809
2006
MIPHARM® S.p.A.
Via Quaranta, 12
20141 Milan – Italy
Phone (39) 02 53548.1
Fax (39) 02 53548.010
e-mail: [email protected]
www.mipharm.it
Milan – Italy
2007
2008
2006
2007
2008
Annual Report 2008
“ Intellectual growth
should commence at birth
and cease only at death…
”
A. Einstein
Milan – Italy
Cav. Lav. Dr. Giuseppe G. Miglio
Letter of the Chairman
Dear Shareholders,
Ladies and gentlemen:
To say it upfront: 2008 was a year of extraordinary challenges – for the world, for Italy, for
Mipharm. And the company got out of it with a few scars and bruises, but at the same time stronger,
with a sharper focus, and well positioned for its future.
2008 was the beginning of the deepest and most turbulent recession the world and Italy have
experienced since the Great Depression, and the pharmaceutical industry did not go unscathed.
Mipharm’s revenues were hit by the sudden, but temporary loss of one of its leading products in its
manufacturing line, Nimesulide, and a weak infestation by certain dermatological parasites,
important to our sales. However, thanks to a Herculean effort, Revenues at € 44 mio. were only
marginally below the record year of 2007, and Net Income, while lower than in the previous year,
reached a still satisfactory level of € 1.9 mio. For the first time since its inception, Mipharm’s Gross
Debt increased, albeit slightly.
Despite a dismal environment, Mipharm will again manage to pay out a handsome dividend to its
shareholders.
It is in these times of great challenges that one realizes that problems can also be opportunities. It
takes the rare combination of a youthful, vigorous company – after all, Mipharm celebrated its 10th
Anniversary in 2008 – and an experienced leadership that pushes a company like ours to peak
performance.
The two key events for Mipharm last year from a strategic viewpoint were the renewed and ever
closer partnership with Novartis/Sandoz and the official recognition by the Italian Government that
generics would be the way to go for the country to get health care costs under control. The forceful
endorsement of generics is a new “fact of life”, and Mipharm is not only well positioned to take
advantage of this new opportunity: It is Mipharm’s new Mission and strategic objective to become
Italy’s leading manufacturer of high-class generics.
2008 will go into Mipharm’s history as a turning point. In an extremely difficult environment, the
company prides itself once again of very presentable results. This would not have been achievable
without the relentless efforts, devotion and commitment by all our associates, and my heartfelt
thanks go to them.
I encourage you to read this Annual Report 2008. You will realize that in 2009 we are at a
crossroad. While Manufacturing will remain a cornerstone in the new Mipharm, “Special Services”
will pay a much more pivotal role than in the past. “Special Services” is the Division where we will
exploit the considerable know how we have assembled and keep gathering new technologies and
which will differentiate us substantially from all other pharmaceutical companies.
I would like to include in my gratitude our Strategic Partner Novartis/Sandoz, our other customers
and suppliers, as well as the financial community whose loyalty, constant support and trust have
made our endeavor worthwhile and possible.
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
Andreas Rummelt
Founder, Chairman
and Chief Executive Officer
Director
Director
Director
Director
Board of Auditors
Ermanno Ramella
Carlo Andreis
Gianluca Nicolini
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:
Luca Grisotti
Alessandro Cipriani
Giovanna Riccomagno
Massimo Prini
Paola Fazzalari
Gianluigi Dognini
Roberto Teruzzi
General Manager/ COO
Production Operations
Chief Financial Officer /CFO
Technology/Special Services
Legal Affairs
Pharma Manufacturing
Operating Pharma Director
5
2008: Mipharm in its 11th year
Domenico Induno (1815-1878), “Ricordi”, olio su tela.
6
2008: Mipharm in its 11th year
Income Statement, Period Ending 31 December 2008 (in €)
Period Ending
Revenues
31 Dec.2008
31 Dec. 2007
44,071,612 100.0%
44,481,665 100.0%
Total Operating Cost
38,262,116
86.8%
37,057,237
83.3%
EBITDA
5,809,496
13.2%
7,424,428
16.7%
Operating Income (EBIT)
4,551,170
10.3%
5,103,410
11.5%
1,133,574
2.6%
547,883
1.2%
187,075
0.4%
57,648
0.1%
3,230,521
7.3%
4,497,879
10.1%
1,325,000
3.0%
1,825,000
4.1%
1,905,521
4.3%
2,672,879
6.0%
Financial Costs
Extraordinari Expenses
Pre-Tax Income (EBT)
Taxes
Net Income
7
2008: Mipharm in its 11th year
Cash Flow Statement, Period Ending 31st December 2008 (in €)
Period Ending
31 Dec.2008
31 Dec. 2007
Operating Activities
Net Income (Loss)
1,905,521
2,672,879
Depreciation of PP&E
1,103,955
1,029,505
154,371
1,291,513
–1,579
–
–745,851
1,912,524
(Increase) Decrease in Inventory
371,001
–723,319
(Increase) Decrease in Other Current Assets
158,190
93,798
1,505,275
1,348,488
Increase (Decrease) in Other Current Liabilities
–420,454
–94,637
Increase (Decrease) in Other Working Capital
–527,770
384,858
3,502,659
7,915,609
–
–
3,502,659
7,915,609
33,284
1,494
–2,670,037
–1,844,126
–2,636,753
–1,842,632
–2,547,547
–1,937,357
Net Cash from Investing Activities
–2,547,547
–1,937,357
Net Change in Cash & Cash Equivalents
–1,681,641
4,135,620
Amortization of Intangibles
Deferred Income Tax
(Increase) Decrease in Receivables
Increase (Decrease) in Payables
Net Cash from Continuing Operations
Net Cash from Discontinued Operations
Net Cash from Operating Activities
Investing Activities
Sale of PP&E and Intangibles
Purchase of PP&E and Intangibles
Net Cash from Investing Activities
Financing Activities
Payment of Cash Dividends
8
2008: Mipharm in its 11th year
Revenues, Period Ending 31 December 2008 (in €)
Period Ending
31 Dec.2008
31 Dec. 2007
BU1
27,540,595
26,324,316
BU2
13,415,700
15,605,610
BU3
1,800,792
1,750,143
BU4
1,314,525
801,596
44,071,612
44,481,665
Total
Comments:
■ BU1 Manufacturing
Good development with respect to 2007 (+4.6%) to be underline the perfomance of the
Business Unit in the second semester, where a production output never recorded in the
firm’s history was reached.
■ BU2 Commercial Operations
In a declining pharmaceutical market, mainly because of a very difficult first part of the
year, the Division has to register a turnover decrease (–14.0% vs 2007).
While Olux® continued its dynamic growth, below expectations were the results of
Hedrin® and Striant®.
The Gynecological line thanks to the re-launch of Clomirex-t ® and the launch of
Mifluor® changed the sales tendency showing a positive trend.
■ BU3 Special Services
Which specializes in galenical and analytical development as well as Trials Logistics
Management grew at +2.9%.
■ BU4 Licensing Out
The Division enjoyed an impressive development at +64.0%. New Products were
launched in Portugal and Spain, while an important agreement for Acyclovir Liquipatch
was concluded for Eastern Europe.
9
2008: Mipharm in its 11th year
10
2008: Mipharm in its 11th year
Operating and Financial Review
The Operating and Financial Review should be read together with Mipharm’s financial
statements in the Annual Report. The financial statements and the financial information
discussed below have been prepared in accordance with International Financial
Reporting Standards (IFRS) as published by the International Accounting Standards
Board (IASB).
Overview
Mipharm provides healthcare solutions in different ways. Its operations are divided into
four Business Units (BU):
■
■
■
■
BU1:
BU2:
BU3:
BU4:
Manufacturing
Commercial Operations
Special Services
Licensing Out
No operations were discontinued in 2008. Revenues from continuing operations in 2008
were € 44.1 mio, down only 0.9% from the record year 2007.
BU1
+1,216,279
( +4.6%)
BU2
-2,189,910
( –14.0%)
BU3
+50,649
( +2.9%)
BU4
+512,929
(+64.0%)
Operating income (EBIT) shrank 10.8% to € 4.6 mio.
Net income shrank 28.7% to € 1.9 mio. Significantly higher Financial Costs
contributed to this result.
Headquartered in Milan, Italy, Mipharm Spa employed 231 full-time associates as of
December 31, 2008.
11
2008: Mipharm in its 11th year
The First 3 Months of 2009
■ While the pharmaceutical market in Italy in a deepening economic crisis literally
imploded and shrank by 4.0% in the first 3 months of 2009, Mipharm’s Revenues
were nearly 21.0% above the same period of last year and reached € 9.4 mio.
■ On a strategic level, Novartis/Sandoz and Mipharm reached a new level of
Partnership. In order to be able to focus in the future on the development and
manufacturing of classic Generics and Supergenerics, Mipharm divested the
commercial businesses (BU2 and BU4) which will be incorporated into the powerful
Sandoz Italia Organization.
■ Mipharm’s organization structure is being adjusted to accommodate the new
direction, with the objective to remain strategically focused (High-Generics and
Supergenerics), technologically at the forefront of the industry, and financially
strong.
12
2008: Mipharm in its 11th year
Outlook: The New Mipharm
■ On 9 April 2009, Novartis/Sandoz and Mipharm signed a far reaching Agreement
for a renewed and much broadened “Partnership”.
■ While Mipharm divests its commercial operations (BU2 and BU4), it will focus on a
new and fast growing opportunity in Italy and beyond thanks to its proprietary
technological skills and know-how:
Classical Generics and Supergenerics.
■ It is the ambition and determination of the people of Mipharm to become Italy’s
leader in the development and manufacturing of “high-class” generics and
Supergenerics by constantly broadening and deepening its technology platform and
by responding quickly to customers’ and market needs.
■ Mipharm’s Management persists in achieving “peak performance” by the
organization and carefully balances the legitimate interests of the main stakeholders:
its Strategic Partner Novartis/Sandoz, its other customers, employees, shareholders,
suppliers, and the community at large.
13
2008: Mipharm in its 11th year
The New Mipharm’s Mission – 2009
■ Mipharm Spa attempts to become the center of excellance 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. It has a special focus on
high-class Generics and Supergenerics.
■ The “Special Services” Division will pursue the development of Supergenerics,
providing important additional benefits to the 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 the IQP vision, a Novartis problem solving approach for
achieving operational excellence. Its three pillars are: Innovation (creates value),
Quality (delivers value), Productivity (recovers value). Lean Manufacturing is the
basic tool for IQP, a fundamental concept which Mipharm has been implementing
rigorously since 2005.
■ Mipharm will always be an exemplary and reliable partner to its stakeholders,
particularly its patients, its customers, employees, shareholders, and the public at
large.
■ Mipharm considers close relationships with its customers as a key to its success. It
stays particularly committed to making the Strategic Partnership with
Novartis/Sandoz as mutually beneficial as possible.
■ Last but not least: Motivated and committed employees are a “must”, and Mipharm
will spare no effort to hire, retain and develop the best employees in the industry.
14
2008: Mipharm in its 11th year
Conclusion
■ Market tendency and economic environment influenced the pharmaceutical market
in 2008 as well as Mipharm BU2 performances.
Thanks to a clear focus on key products and key customers Mipharm was able to
recover very well during second half of 2008 in comparison with first half 2008
results. Nevertheless the global results are not completely in line with budget but they
put in a positive perspective the business for the coming period.
15
2008: Mipharm in its 11th year
16
Balance Sheet and Profit & Loss Statement
Profit and Loss Statement
2008
31 Dec.
2007
31 Dec.
€/000
€/000
44,428
44,816
44,072
44,482
356
334
–39,877
–39,713
–15,695
–16,059
Salaries and wages
–9,602
–8,663
Value adjustments
–1,328
–2,321
–154
–1,291
–1,104
–1,030
–70
–
–13,252
–12,670
4,551
5,103
–1,133
–547
–187
–58
3,231
4,998
–1,325
–1,825
1,906
2,673
A Value of manufacturing
Net turnover (sales and services)
Other operating income
B Cost of production
Raw material
and goods purchased for resale
a Amortization of intangible assets
b Depreciation of tangible assets
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
Profit (loss) for the financial period
17
Balance Sheet and Profit & Loss Statement
Assets
2008
31 Dec.
2007
31 Dec.
€/000
€/000
27,785
26,406
I Intangible assets
7,134
5,886
II Tangible assets*
20,651
20,520
14,330
14,104
2,773
3,144
5,853
5,106
which are not permanent
5,428
5,539
IV Cash on hand and banks
276
315
75
233
42,190
40,743
B Fixed assets*
C Current assets
I Inventories
II Accounts receivables
and other assets
III Investments
D Prepaid expenses and deferred charges
TOTAL ASSETS
* Value after revaluations (law no. 342 of 21 November 2000
and law no. 266/05 of 23 December 2005 and revaluation 2006)
18
Balance Sheet and Profit & Loss Statement
Equity and Liabilities
2008
31 Dec.
2007
31 Dec.
€/000
€/000
11,909
12,551
B Provision for risks and charges
311
278
C Employee severance indemnity
2,273
2,727
27,697
25,184
1,153
5,042
Banks
12,666
7,245
Accounts payable
12,123
10,618
1,755
2,279
0
3
42,190
40,743
A Capital and reserves
D Creditors
Amounts owed to other financiers
Other creditors
E Accruals and deferred income
TOTAL EQUITY AND LIABILITIES
19
Produced by
MIPHARM S.p.A. – Italy
Printed by:
ERA Comunicazione S.r.l.
Milan, Italy – May 2009
Silvio Poma (1840-1932), “Imbarcadero sul lago d’Orta per l’isola di S. Giulio”, firmato “S. Poma”, olio su tela.
Annual Report 2008
Mipharm at a glance
Milan – Italy
Total assets
42,083
40,743
2006
2007
EBIT
Net fixed assets
(€/000)
42,190
2008
26,884
26,406
2006
2007
EBITDA
(€/000)
5,103
27,785
2008
(€/000)
7,424
4,551
4,325
(€/000)
6,690
5,809
2006
MIPHARM® S.p.A.
Via Quaranta, 12
20141 Milan – Italy
Phone (39) 02 53548.1
Fax (39) 02 53548.010
e-mail: [email protected]
www.mipharm.it
Milan – Italy
2007
2008
2006
2007
2008

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