Emergent Biosolutions Inc. · NYSE:EBS
Emergent Biosolutions — Q3 2020 Earnings Presentation
34 slides from Emergent Biosolutions's earnings presentation, Nov 5, 2020
Slide 1: 3Q2020 Investor Update
3Q2020 INVESTOR UPDATE NOVEMBER 5, 2020
Slide 2: Introduction
INTRODUCTION 2 Robert G. Burrows Vice President, Investor Relations 3Q20 INVESTOR UPDATE
Slide 3: Safe Harbor Statement
SAFE HARBOR STATEMENT 3 This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements, other than statements of historical fact, including, without limitation, our financial guidance and related projections and statem
Slide 4: Agenda
AGENDA 3Q20 Investor Update 4 1 State of the Company 2 Financial Results: 3Q and YTD 3 Financial Guidance: Full Year 2020 4 Business Unit Focus: CDMO 5 Question & Answer Session 3Q20 INVESTOR UPDATE
Slide 5: State of the Company
STATE OF THE COMPANY 5 Robert G. Kramer President and Chief Executive Officer 3Q20 INVESTOR UPDATE
Slide 6: Company Highlights
STATE OF THE COMPANY Company Highlights 6 CORE BUSINESS STRONG MCM STRENGTH UPDATING 2020 REMAINS DURABLE DELIVERIES IN CDMO GUIDANCE 3Q20 INVESTOR UPDATE
Slide 7: Business Unit Highlights
STATE OF THE COMPANY Business Unit Highlights 7 CDMO THERAPEUTICS ▪ Robust deployment of services for industry and ▪ COVID-HIG candidate in NIAID Phase 3 clinical trial government customers in hospitalized patients ▪ Signed approximately $1.5B in contracts in ▪ COVID-HIG candidate post-exposure prop
Slide 8: Financial Results
FINANCIAL RESULTS 8 Richard S. Lindahl Executive Vice President, Chief Financial Officer and Treasurer 3Q20 INVESTOR UPDATE
Slide 9: Sustaining Strong Operating and Financial Momentum
FINANCIAL RESULTS Sustaining Strong Operating and Financial Momentum 9 SOLID ENHANCED LIQUIDITY AND CONFIDENT POISED FOR PERFORMANCE CASH FLOW OUTLOOK 2021 3Q20 INVESTOR UPDATE
Slide 10: Primary Metrics: Q3
FINANCIAL RESULTS Primary Metrics: Q3 10 ($M) TOTAL REVENUES ADJ. EBITDA1 ADJ. NET INCOME1 $168 $385 $312 $119 $106 $65 3Q19 3Q20 3Q19 3Q20 3Q19 3Q20 1. See the Appendix for a definition of non-GAAP terms and reconciliation tables. 3Q20 INVESTOR UPDATE
Slide 11: Primary Metrics: YTD
FINANCIAL RESULTS Primary Metrics: YTD 11 ($M) TOTAL REVENUES ADJ. EBITDA1 ADJ. NET INCOME1 $972 $340 $746 $225 $145 $70 9M19 9M20 9M19 9M20 9M19 9M20 1. See the Appendix for a definition of non-GAAP terms and reconciliation tables. 3Q20 INVESTOR UPDATE
Slide 12: Other Metrics: YTD
FINANCIAL RESULTS Other Metrics: YTD 12 ($M) CASH DEBT1 NET DEBT2 $823 $891 $655 $415 $476 $168 12/31/19 09/30/20 12/31/19 09/30/20 12/31/19 09/30/20 OPERATING CASH FLOW CAPEX FREE CASH FLOW3 $186 $291 $105 $51 $15 $66 9M19 9M20 9M19 9M20 9M19 9M20 1. Debt amounts indicated on the Company’s Balance
Slide 13: Updated FY2020 Guidance
FINANCIAL GUIDANCE Updated FY2020 Guidance 13 ($M) METRIC UPDATED 11/5/20 PREVIOUS Total Revenues $1,520-$1,580 $1,500-$1,600 ▪ Anthrax Vaccines $350-$370 $320-$350 ▪ ACAM2000® $160-$200 $180-$200 ▪ NARCAN® Nasal Spray $295-$315 $285-$315 ▪ CDMO $450-$470 $440-$460 Adjusted Net Income1 $375-$405 $34
Slide 14: Focus: CDMO
FOCUS: CDMO 14 Syed T. Husain Senior Vice President, CDMO Business Unit 3Q20 INVESTOR UPDATE
Slide 15: A Unique Position In The Landscape
FOCUS: CDMO A Unique Position In The Landscape 15 PURE PLAY CDMO INTEGRATED CDMO EMBEDDED CDMO Emergent combines the best of both worlds: the customer focus and capacity of a pure play CDMO, plus all the expertise and experience of a successful innovator. We have the technology and facilities to bri
Slide 16: A $20B Market Opportunity
FOCUS: CDMO A $20B Market Opportunity 16 $15B $2B $1.5B $1B $0.5B MAMMALIAN VIRAL MICROBIAL PLASMA ADVANCED THERAPIES ▪ Molecule-to-market development and manufacturing services with successful track record of innovation. EMERGENT CDMO ▪ Enterprise team of more than 1400 technical and quality compli
Slide 17: Emergent Capabilities at a Glance
FOCUS: CDMO Emergent Capabilities at a Glance 17 5 TECHNOLOGY PLATFORMS 3 MOLECULE-TO-MARKET SERVICE OFFERINGS 9 DEVELOPMENT AND MANUFACTURING SITES 3Q20 INVESTOR UPDATE
Slide 18: End-to-End Integrated Services
FOCUS: CDMO End-to-End Integrated Services 18 DEVELOPMENT DRUG PRODUCT MANUFACTURING SERVICES (DVS) AND PACKAGING (DP) DRUG SUBSTANCE MANUFACTURING (DS) 3Q20 INVESTOR UPDATE
Slide 19: Sites, Services and Capabilities
FOCUS: CDMO Sites, Services and Capabilities 19 SITE TECHNOLOGIES DVS DS DP CIADM Baltimore, MD (Bayview) Mammalian, Viral, Microbial Baltimore, MD (Camden) Mammalian, Microbial Lansing, MI Microbial Winnipeg, Manitoba, Canada Plasma Gaithersburg, MD Mammalian, Microbial, Viral, Advanced Therapies R
Slide 20: Key Growth Initiatives
FOCUS: CDMO Key Growth Initiatives 20 EXPAND SALES AND BUSINESS ENHANCE MOLECULE- DRIVE GLOBAL INVEST TO MEET DEVELOPMENT TEAMS TO-MARKET OFFERING BRAND AWARENESS MARKET NEEDS CROSS-SELL TO INCREASE MANUFAC- EXPLORE PARTNERSHIP BALANCE CLINICAL EXISTING CLIENTS TURING CAPACITY OPPORTUNITIES WITH COM
Slide 21: Current Portfolio Snapshot (as of 3Q20)
FOCUS: CDMO Current Portfolio Snapshot (as of 3Q20) 21 CUSTOMERS MOLECULES PROJECTS 2% 11% 35% 42% 57 51% 71 49% 83 24% 65% 21% PHARMA & BIOTECH 1 Small Midsize Large Government/NGO Clinical Commercial DVS DS DP CURRENT CDMO PORTFOLIO VALUE ~$1.8 BILLION 2 1. Small: $0-$100M in total revenues; Midsi
Slide 22: Opportunity Funnel Snapshot (as of 3Q20)
FOCUS: CDMO Opportunity Funnel Snapshot (as of 3Q20) 22 CUSTOMERS MOLECULES PROJECTS 5% 17% 15% 34% 41% 15% 20 41 64 65% 83% 25% PHARMA & BIOTECH 1 Small Midsize Large Government/NGO Clinical Commercial DVS DS DP OPPORTUNITY FUNNEL VALUE ~$475 MILLION 2 1. Small: $0-$100M in total revenues; Midsize:
Slide 23: Key Takeaways
FOCUS: CDMO Key Takeaways 23 Realized significant and accelerated growth since re-launch in Fall 2019 focused on 1 $20B addressable CDMO market opportunity Ongoing execution of key growth initiatives across network of sites and expanding 2 capabilities and capacities 3 Established Current Portfolio
Slide 24: Question & Answer Session
QUESTION & ANSWER SESSION ~e biosolutions
Slide 25: Appendix
APPENDIX ~e biosalutions®
Slide 26: Reconciliation of Net Income to Adjusted Net Income – 3Q
APPENDIX Reconciliation of Net Income to Adjusted Net Income – 3Q 26 Three Months Ended September 30, ($ in millions) 2020 2019 Source Net income $39.5 $43.2 NA Adjustments: + Changes in fair value of contingent consideration 30.2 6.9 COGS + Impairment of IPR&D intangible asset 29.0 -- R&D COGS, SG&
Slide 27: Reconciliation of Net Income to Adjusted Net Income – YTD
APPENDIX Reconciliation of Net Income to Adjusted Net Income – YTD 27 Nine Months Ended September 30, ($ in millions) 2020 2019 Source Net income $119.7 $7.6 NA Adjustments: Intangible Asset Amortization; + Non-cash amortization charges 47.2 46.1 Other Income + Changes in fair value of contingent co
Slide 28: Reconciliation of Net Income to Adjusted Net Income – 2020 Guidance
APPENDIX Reconciliation of Net Income to Adjusted Net Income – 2020 Guidance 28 UPDATED 2020 Full Year Forecast ($ in millions) 2020F Source Net income $255 - $285 NA Adjustments: Intangible Asset Amortization; + Non-cash amortization charges 63 Other Income + Changes in fair value of contingent con
Slide 29: Reconciliation of Net Income to Adjusted EBITDA – 3Q
APPENDIX Reconciliation of Net Income to Adjusted EBITDA – 3Q 29 Three Months Ended September 30, ($ in millions) 2020 2019 Net Income $39.5 $43.2 Adjustments: + Depreciation & amortization 28.8 27.7 + Provision for income taxes 15.5 15.7 + Total interest expense, net* 7.5 9.7 + Changes in fair valu
Slide 30: Reconciliation of Net Income to Adjusted EBITDA – YTD
APPENDIX Reconciliation of Net Income to Adjusted EBITDA – YTD 30 Nine Months Ended September 30, ($ in millions) 2020 2019 Net Income $119.7 $7.6 Adjustments: + Depreciation & amortization 85.6 82.8 + Provision (benefit) for (from) income taxes 34.7 (1.7) + Total interest expense, net* 21.6 27.6 +
Slide 31: Reconciliation of Net Income to Adjusted EBITDA – 2020 Guidance
APPENDIX Reconciliation of Net Income to Adjusted EBITDA – 2020 Guidance 31 UPDATED 2020 Full ($ in millions) Year Forecast 2020F Net Income $255 - $285 Adjustments: + Depreciation & amortization 115 + Provision for income taxes 96 - 106 + Total interest expense 30 + Changes in fair value of conting
Slide 32: Reconciliation of Gross Margin to Adjusted Gross Margin – 3Q
APPENDIX Reconciliation of Gross Margin to Adjusted Gross Margin – 3Q 32 Three Months Ended September 30, ($ in millions) 2020 2019 Total revenues $385.2 $311.8 - Contracts and grants revenue (25.9) (35.6) Adjusted revenues $359.3 $276.2 Cost of product sales and contract development and $149.0 $108
Slide 33: Reconciliation of Gross Margin to Adjusted Gross Margin – YTD
APPENDIX Reconciliation of Gross Margin to Adjusted Gross Margin – YTD 33 Nine Months Ended September 30, ($ in millions) 2020 2019 Total revenues $972.4 $745.7 - Contracts and grants revenue (72.1) (98.4) Adjusted revenues $900.3 $647.3 Cost of product sales and contract development and $355.7 $300
Slide 34: www.emergentbiosolutions.com
www.emergentbiosolutions.com
Emergent BioSolutions — Q3 2020 Earnings Presentation on 6ix