Annual report 2013: Letter of the Chairman

Dear Shareholders,
Ladies and gentlemen:

Another year has passed, and I have the pleasure again to send you an Annual Report on an exciting, yet challenging year.
2013 was dominated in Italy and specifically its pharmaceutical industry by annoying uncertainties.
In many ways it was a "lost year": at a great cost for the country, politicians failed to provide the necessary leadership, and economic activity even fell below the already unexciting level of the previous year.
Despite this dismal environment, Mipharm continued its journey towards prosperity successfully: Revenues grew 7.6% to € 38.4 mio., and Net Profit at € 2.9 mio. exceeded the previous year by even 11.5%. Our Balance Sheet continues to be remarkably healthy.
These results are particularly impressive if we bear in mind that 2013 was anything but a normal year for Mipharm. The challenging turnaround of our Quality Assurance and Quality Control operations was in full swing and required a significant degree of Management time and attention, not to mention the heavy financial investments that were necessary of our Manufacturing and related areas.
In fact, Manufacturing will be one key focus also in 2014. The area will have to cope with a tremendous workload again, and we will make absolutely sure that the Quality of their output remains in the range of excellence. Notwithstanding this challenging goal, Cost Management will also stay in our focus: without rigorously controlling our cash, our financial strength could not be maintained. Effective Cost Management and financial efficiencies continue to be a key objective.
Also on the products side, there is promising news: the hormone commonly called "Vitamin D" has gained the medical community's attention around the world. Not just for bone health and muscle strength, as one would expect, but also for other areas, e.g. mental health and blood pressure. Mipharm attempts to play a key role in the manufacturing of Vitamin D.
If Mipharm is to continue to grow and prosper, "business as usual" is hardly the recipe. The Company has to rely on the daily commitment, the creativity and the energy of all of its associates. Innovation will continue to occur in larger and smaller steps, but it can only happen in an organization that strives constantly for excellence and a high-performance culture like Mipharm's.
My thanks for a difficult, but nevertheless great 2013 go to all our customers, our associates, and our shareholders. Success is always due to a joint effort. I am grateful to all of Mipharm's stakeholders for their continued support in the future.
firma Cav. Lav. Dr. Giuseppe G. Miglio
Founder, Chairman and Chief Executive Officer
Mipharm SpA


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