Diana Bracco: “We are world leaders in diagnostics thanks to a family that has always stood shoulder-to-shoulder”

Milan, Italy , 07/22/2019

Corriere della Sera – L’Economia | Finanza – ImpreseTech&Mercati

We are world leaders in diagnostics.The Chairman and CEO of this Group, whose revenues top 1.3 billion euros, explains that it is possible to grow on your own two feet. A 450 million dollar check for the Oxford-based biotech company will be ready by the end of the month: “We have given a sign to the market. After that, the CDP got in touch”.

Put together, between internal growth and acquisitions that makes a total of almost 800 million euros in planned investments in a little over 12 months. Diana Bracco is just back from a shopping spree that has propelled the Group she helms to the top of the mergers and acquisitions scoreboard for Italian companies abroad. Now, after a season lived at top speed, it’s time for her to take stock. By the end of July, she’ll be writing a 450 million dollar check to close the official deal and bring Blue Earth Diagnostics, an Oxford-based oncology diagnosis via contrast media biotech company, under the Bracco Group umbrella.

These figures paint a picture of the Bracco family’s commitment to managing this imaging diagnostics and life science group that generated 1.291 billion euros in revenues in 2018, up 4.1%. Fully 86% of this was generated outside Italy. This Italian company is one of the world’s leaders in imaging diagnostics and contrast media injectors. Heading up the group as CEO and Chairman is Diana Bracco, a Milanese businesswoman born in 1941, with a degree in chemistry just like her father Fulvio before her.

Ms. Bracco says: “This British acquisition takes place twenty-five years after we acquired Squibb Diagnostics, the Group’s biggest deal, which was the crowning success of our ‘American dream’.

Today, the Bracco Group spans Bracco Imaging, its biggest business, US company ACIST for contrast media injectors, and last but not least, the Centro Diagnostico Italiano in healthcare. She reveals: “We have also turned into start-up hunters. A year and a half ago, we invested in Dutch company SurgVision. More recently, we invested in DeepTrace, a company founded by two young researchers from CNR, which operates in the field of radionics for diagnosing Alzheimer’s. We are keen to set up an R&D hub in Milan, built around CDI and Bracco Imaging.

Is 1.3 billion euros in turnover enough to match the competition?
We are global leaders in our sector. Just think: one out of every three X-ray diagnostic procedures around the world is carried out using one of our contrast media. It’s wrong to compare Bracco to the major pharmaceuticals groups. Compare us with their diagnostics divisions, though, and you’ll see that our businesses are stronger than theirs. We have gone on a journey. We have grown in an orderly manner, focusing on the core business and, years ago, selling off our pharmaceuticals division to Dompè because it was no longer strategic for us. We took the 200 million euros we booked and invested it to keep growing, bolstered by cash flow of around 170 million euros from operations in 2018. The Group’s cash flow from operations/EBITDA ratio exceeds 80%. It is important never to stop striving. You need the courage of your convictions when it comes to taking action; businesspeople have to take on the risks. We’ve done just that with this 450 million dollar acquisition. The whole deal is financed with international capital by JP Morgan. It is both a challenge and a message to the markets. The Cassa Depositi e Prestiti has sat up and taken notice: they’ve been in touch about potential joint operations in future.

Are common projects likely with the CDP?
We’re going to meet them and present our company. The State must learn to trust private operators. Together, we can do great things. Expo 2015 in Milano was a virtuous example, working as an alliance where the private sector is ready and willing to help the country’s advancement. That site can now be repurposed to make this city a capital of ‘Life Science’ through the Human Technopole.

Will you be investing in the former Expo site in Milan?
We might be siting our Diagnostics Center research facility there, investing in it as a science hub.

Many Italian companies have passed into foreign hands. Have you ever received any offers?
There have been offers, of course, but we’ve never been interested in selling. My family has always stood shoulder-to-shoulder. We stand together on extraordinary operations like the recent Blue Earth Diagnostics acquisition. The reason why so many companies are fragile is not being on the same wavelength, or succession within the family not being done right. We have decided to pick representatives of the new generation one at a time. A natural choice. That’s how it was for me. That’s how it is for Fulvio Renoldi Bracco, my nephew, who is CEO of Bracco Imaging. It is not an easy inheritance. Those who stay take on great responsibility towards our 3,400 co-workers and shareholders.

How much have you invested, over and above acquisitions?
Our plan is a far-reaching one. Among other things, it focuses major resources on expanding our production capacity and improving process efficiency at our plants in Italy and abroad. In our plan to 2023, we have allocated more than 300 million euros for work at Torviscosa, Ceriano, Singen, Geneva and Shanghai. Every year, we set aside 100 million euros for research. That’s 9% of Bracco Imaging’s turnover. A few days ago, we took the decision to double the output of a much-in-demand contrast medium for ultrasound in Switzerland, at a planned investment of 60 million euros. The opening ceremony was attended by the Governor of the Canton of Geneva and the Mayor – they roll out the red carpet for foreign investors in Switzerland. Thanks to Blue Earth, we now have a new research center in London, the Group’s eighth. Our heart, however, remains in Italy. Torviscosa, in Friuli Venezia Giulia, is one example, combining industrial recovery with an expansion of traditional contrast media output – and that’s chemistry, the foundation of our strength.

Is Italy capable of attracting investment?
When we want to build a research center in Europe, nations bend over backwards to attract Italian investment. I’m thinking of France and Romania here. But we’re Italian, we must hang tough, we export excellence around the world. We have found managers, all Italian talent, to send to China. China is our second largest market after the United States. There, we own 70% of the joint venture between Bracco Sine and Shanghai Pharmaceutical. We’re now conducting research with this group.

You have been at the helm of Federchimica, Assolombarda and Expo 2015. What do you think is necessary to prompt companies to invest?
Tax credits for all research activities, not just on the incremental portion – the way the French do it. That, plus a reduction of the tax wedge, because workers take home far too little pay. And that should have happened a long time ago.

Diana Bracco: "We are world leaders in diagnostics thanks to a family that has always stood shoulder-to-shoulder"