Slide 1: Improve competitiveness and unlock sustainable & profitable growth
Improve competitiveness and unlock sustainable & profitable growth 29 February 2024
Slide 2: Forward looking statements
Forward looking statements Certain information contained in this press release is forward looking and not historical data. These forward-looking statements are based on opinions, projections and current assumptions including, but not limited to, assumptions concerning the Group’s current and future
Slide 3: Introduction
Introduction Viviane Monges Chair of the Board and Chief Executive Officer P. 3
Slide 4: Improve competitiveness and unlock sustainable & profitable growth
Improve competitiveness and unlock sustainable & profitable growth Streamlined value- Focused CDMO offer Rationalized industrial Organizational added portfolio, leveraging our footprint prioritizing transformation and focused on highly recognized capabilities high-return CAPEX more efficient ways of
Slide 5: Full-year 2023 Results
Full-year 2023 Results Antoine Delcour Chief Financial Officer P. 5
Slide 6: 2023 key operational figures
2023 key operational figures Net Sales Core EBITDA CAPEX €1,013.2m €93.1m €129.0m +3.8% Sanofi Core EBITDA Net Sales €472.5m margin 9.2% 12.7% +0.2% Other Clients Growth Capex €540.7m 52% +7.1% P. 6
Slide 7: 2023 Results: Full-year net sales
2023 Results Full-year set sales API Solutions CDMO €1,013.2m €976.6m Other clients: +7.2% Other Other clients: +7.1% Other Sanofi Other Clients • Increased sales from commercial Clients +0.2% Clients • 46 new clients added in 2023 products +7.1% • Acceleration of the cross-selling • Weaker sales fr
Slide 8: From Net Sales to Core EBITDA
2023 Results From Net Sales to Core EBITDA In € millions FY-2023 FY-2022 Net sales 1,013.2 976.6 Gross profit 164.6 176.9 Gross Profit impacted by decreasing volumes and higher energy and raw materials prices Gross profit margin 16.2% 18.1% Core EBITDA 93.1 120.0 Core EBITDA includes a €2.5 m provis
Slide 9: Core EBITDA bridge
2023 Results Core EBITDA - Price increases and operational efficiencies partially offset higher energy and raw materials costs Rounded figures cc. 80% of FY 2024 energy costs hedged at the end of December 2023 +1.7%pts +3.2%pts -6.3%pts -0.8%pts +0.7%pts -1.7%pts 12.3% 9.2% Core EBITDA Volume Pric
Slide 10: From EBITDA to Net Income and EPS
2023 Results From EBITDA to Net Income and EPS In € millions FY-2023 FY-2022 EBITDA 68.6 93.7 Depreciation and Amortization 76.5 94.5 Reflecting the deterioration of future Cash Impairment of Assets (226.4) (21.8) Flow compared to previous plan and the increase in WACC from 7.1% to 8.3%* Operating I
Slide 11: Net Debt evolution
2023 Results Net Debt evolution € millions, rounded figures Of which • €(129.0)m Capex 73.9 -68.8 -25.6 Of which • €(40.4)m inventories (MOH*: 7.61) • €48.9m trade receivables (DSO*: 562) 171.0 -137.2 • €(52.9)m payables -14.3 1.0 Net Debt Position Operating Cash Flow Working Capital Cash Flow From
Slide 12: On track to deliver our ESG roadmap
2023 Results On track to deliver our ESG roadmap Accelerate innovation for Create a safe and multicultural Uphold best-in-class corporate environmental sustainability workplace governance 100% completion of code 100% sites 30% women in a of conduct and ISO14001/50001 100% leadership position by Achi
Slide 13: Core strengths and current challenges
Core strengths and current challenges Viviane Monges Chair of the Board and Chief Executive Officer P. 13
Slide 14: Core strengths
Core strengths Strong market One of the broadest State-of-the-art A broad customer momentum CDMO portfolio, innovative base other than and leading technologies Sanofi positions in fast- growing APIs P. 14
Slide 15: Continued solid growth of the API Global market
Core strengths Continued solid growth of the API Global market, driven by volume and mix Cc. +6-8% CAGR (2024-2028) Growth drivers € millions Pharmaceutical market Outsourcing from Pharma Volumes Companies 117 113 106 Aging population, Increased Generic product penetration 100 95 Increased access to
Slide 16: Growth above market for highly-differentiated APIs
Core strengths Growth above market for highly-differentiated APIs 2021-2027 estimated market growth 17,0% Oligonucleotides 740 +10.0% +9.0% Peptides 1200 CAGR CAGR 12,0% Cytotoxic agents 690 Tides (Peptides Highly Potent and Oligo- (HP) APIs Antihistamines Antipyretics Vitamin B12 Lipids nucleotides
Slide 17: One of the broadest API and CDMO offer
Core strengths One of the broadest API and CDMO offer One of the broadest portfolios in CDMO Leading Position in high-growth APIs Large Molecules Prostaglandins Opiates #1 worldwide position #1 worldwide position 8% 9% HP APIs Vitamin B12 Peptides & Oligonucleotides 2023 Net Sales # 1 European posit
Slide 18: State-of-the-art innovative technologies
Core strengths State-of-the-art innovative technologies Biochemistry derived Highly Potent Complex Chemistry Large Molecules Solid state from Fermentation (HP-APIs) Prostaglandins Particle Complex Peptides Anti-infective Chemical Oligonucleotides Vitamin B12 Cytotoxic Payloads Engineering synthesis
Slide 19: A broad customer base other than Sanofi
Core strengths A broad customer base other than Sanofi From large Pharma, and Biotech to Animal 2023 Net Sales by clients Health, Food and Cosmetics PHARMA CONSUMER GENERIC COMPANIES HEALTHCARE COMPANIES ~275 ~165 ~45 Sanofi 47% Other BIOTECH CDMO & ANIMAL Clients RETAILERS HEALTH 53% ~20 ~20 ~15 FO
Slide 20: Current challenges
Current challenges API portfolio Suboptimal capacity Complex utilization organization Outsized cost structure P. 20
Slide 21: API Product Portfolio: level of differentiation
Current challenges API Product Portfolio Level of differentiation 2023 catalog sales per differentiation level* Non-differentiated Some APIs sales and generic products remain heavily are increasingly dependent on Limited exposed to Asian Sanofi’s demand differentiation competition (Sevelamer, Metami
Slide 22: Underutilized industrial footprint and out-sized organization
Current challenges Underutilized industrial footprint and out-sized organization Outsized Organization – Headcount excluding 2023 capacity utilization rate Industrial Operations1 < 30% ~ 60% Industry Average 100 78 > 80% Lowest Average Highest Comparable Companies Euroapi 1. Full Time Equivalent 2.
Slide 23: Build on our strengths to refocus on high-value segments
Build on our strengths to refocus on high-value and growing market segments, improve competitiveness, and unlock EUROAPI sustainable and profitable growth potential Viviane Monges Ludwig de Mot Chair of the Board and EVP, Chief Trans- Chief Executive Officer formation Officer P. 23
Slide 24: Streamlined value-added portfolio, focused CDMO offer
Streamlined Focused CDMO Rationalized Organizational value-added offer leveraging industrial transformation and portfolio, focused our recognized footprint more efficient on highly capabilities and prioritizing high- ways of working differentiated technology return CAPEX profitable products platform
Slide 25: Streamlined value-added portfolio: overall segmentation
Streamlined value-added portfolio Overall segmentation Overall segmentation Market Large markets Large markets Attractiveness (future growth, Fast-growing product categories Fast-growing product categories level of competition) Competitive environment Strong competitive positions Low margins High ma
Slide 26: Increased focus on highly-differentiated products
Streamlined value-added portfolio Increased focus on highly-differentiated products Market Codeine & Morphine, Hormones & Prostaglandins, Peptides & Attractiveness (future growth, Corticosteroids Oligonucleotides, Vitamin B12, Opiates, level of competition) Anti-diabetes, Antihistamines, Anti-infect
Slide 27: Towards a more balanced and differentiated APIs portfolio
Streamlined value-added portfolio Towards a more balanced and differentiated APIs portfolio 2023 catalog sales per differentiation level – 2023 catalog sales per differentiation level – with existing portfolio including portfolio optimization1 Limited Limited differentiation 36% differentiation 43%
Slide 28: The most diversified range of technology platforms
Focused CDMO offer The most diversified range of technology platforms Pep/ Large Oligo Molecules Only Peptide Only Peptide Only Oligo Other1 Other1 High-potent APIs H PG1 Bio- chemistry Other chemistry Sources Public company filings/communication, Industry interviews, Press releases 1: e.g. Large mo
Slide 29: Strengthened customer base and increase in value-added projects
Focused CDMO Strengthened customer base and increase in value-added projects Evolve Commercial prospection towards larger targets (Biotech & Pharma) De-risked project portfolio Number of RFPs received 230 Early 211 2022 43% Stage by Late 57% phase 50% Stage 54% Biotech 120 Early 15% Mid-size Stage 9
Slide 30: Leverage unique platform capabilities to accelerate sales trajectory
Focused CDMO Leverage EUROAPI unique platform capabilities to accelerate the sales trajectory Customers Large established Targeted prospection towards late-stage drugs and high-value projects Biotech driven by innovative complex chemistry Big Pharma RSM & API re-shoring trends Need of marketed produ
Slide 31: From six underutilized sites
Rationalized industrial footprint prioritizing high-return CAPEX From six underutilized sites… Haverhill Frankfurt Technology Small Complex chemistry, spray drying Small Complex chemistry, solid phase for Technology peptides & oligos, conjugation and key APIs and key APIs Challenges - A mono-product
Slide 32: To a more focused and efficient manufacturing organization
Rationalized industrial footprint prioritizing high-return CAPEX … to a more focused and efficient manufacturing organization Haverhill Frankfurt Highly dependent on Sanofi’s and mono-product Invest in Peptides and Oligonucleotides Capacities Considered for potential divestment Synergies with Rights
Slide 33: Towards industry average capacity utilization rates
Rationalized industrial footprint prioritizing high-return CAPEX Towards industry average capacity utilization rates Lowest Average Highest ~ 90% > 80% ~ 80% ~ 60% cc. 60% < 30% 2023 2027 est. P. 33
Slide 34: Cash allocation focused on high return projects
Cash Allocation focused on High Return Projects €350 to 400 million Investments between 2024 and 2027 €25m* €17m in steam generation to increased Peptides and biomass boiler Oligonucleotides production (Elbeuf) (Frankfurt) Others 41% 2024-2027 €18m €31m Cumulated to increase capacities to increase c
Slide 35: A more efficient and leaner operating model
Organizational transformation A more efficient and leaner operating model Commercial R&D Procurement Supply Chain Redesign the Commercial Focus on support to Accelerate direct Strengthen End-to-End teams to increase synergies, Commercial, in particular the procurement transformation processe
Slide 36: Amended contractual commercial terms with Sanofi
Amended contractual Commercial Terms with Sanofi Viviane Monges Chair of the Board and Chief Executive Officer P. 36
Slide 37: Accelerated decline of 2024 and 2025 demand forecast
Amended contractual commercial terms with Sanofi Accelerated decline of 2024 and 2025 demand forecast compared to initial business plan 2024 & 2025 expected sales below the initial business plan Limited visibility Limited pricing power on the annual to compensate recent volume forecast input costs i
Slide 38: Main changes to the initial agreements with Sanofi
Amended contractual commercial terms with Sanofi Adapt to current environment Main changes to the initial agreements Cancellation of the mutual performance clause Manufacturing and MSA Supply Agreements Raw Material Pass Through revised with full compensation by Sanofi above 20% increase • Covers al
Slide 39: 2024 Outlook
2024 Outlook Viviane Monges Chair of the Board and Chief Executive Officer P. 39
Slide 40: 2024 outlook
2024 outlook Between 4% and 7% decrease in Strong impact of transformation Prioritized CAPEX, and a Net Sales on a comparable basis, and restructuring costs strong improvement in notably driven by a decrease in sales to Sanofi. Between 6% and 9% Core Working Capital, driven by a EBITDA margin signif
Slide 41: Conclusion
Conclusion Viviane Monges Chair of the Board and Chief Executive Officer P. 41
Slide 42: Refocus to deliver long-term profitable growth
Refocus to deliver long-term profitable growth Streamlined Focused CDMO Rationalized Organizational value-added offer leveraging industrial transformation and portfolio, focused our recognized footprint more efficient on highly capabilities and prioritizing high- ways of working differentiated techn
Slide 43: Improve competitiveness and unlock sustainable & profitable growth
Improve competitiveness and unlock sustainable & profitable growth
Slide 44: Appendix
CULOAPI Appendix
Slide 45: FY-2023 Net Sales Breakdown
FY-2023 Net Sales Breakdown CDMO Other Clients 18% API Solutions Other Clients 36% CDMO Sanofi 10% API Solutions Sanofi 36% 1 P. 45
Slide 46: Net sales per molecules
Net sales per molecules Per type of molecule 2023 ∆% vs 2022 Key drivers Discontinuation of a CDMO phase 3 project with Sanofi in Large molecules €76.5m -22.3% 2022 and progressive discontinuation of Buserelin production after its divestment by Sanofi Highly potent Good performance driven by the rec
Slide 47: CDMO projects portfolio in 2023
CDMO projects portfolio in 2023 -17 23 79 -16 69 17 Of which Phase 1 • 12 projects on pre- 17 and earlier 17 approval or in the Of which commercial phase, driven • 2 late-stage projects 9 Phase 2 by peptides and oligos, with Sanofi 11 complex chemistry RSM or • 1 COVID-19 related project Phase 3 12
Slide 48: CDMO projects portfolio: 2023 by phase
CDMO projects portfolio in 2023 Portfolio gradually de-risked towards commercial phase projects Phase 1 and earlier Phase 2 Phase 3 Commercial Large 2023 7 3 2 3 15 molecules 2022 11 4 2 2 19 25% 45% 2023 by 2023 2 2 2 6 phase HP-APIs 13% 2022 1 2 2 2 7 17% 2023 1 1 6 8 Biochemistry 2022 1 1 6 8 202
Slide 49: FY-2023 CAPEX – Investing in growth projects
FY-2023 CAPEX – Investing in growth projects H2 H1 FY-2022 €138.3m FY-2023 €129.0m 86.9 59.7 Maintenance Capex 48% 52% Growth Capex 69.3 51.4 2022 2023 P. 49
Slide 50: Working capital
Working capital In € millions Inventory - Months on Hand1 December December 8.1 7.3 7.6 2023 2022 Working 701.5 639.3 Capital FY 2022 H1 2023 FY 2023 Of which 644.8 594.7 inventories Of which trade 216.3 264.2 Receivables – DSO2 receivables 70 70 56 Of which trade (159.6) (219.6) payables FY 2022 H1
Slide 51: Glossary
Glossary EBITDA and Core EBITDA EBITDA corresponds to operating income (loss) restated for depreciation and amortization and net impairment of intangible assets and property, plant and equipment. Core EBITDA thus corresponds to EBITDA restated for restructuring costs and similar items (excluding dep
Slide 52: Financial calendar
Financial calendar 22 May 2024 Annual General Meeting Further information of In Q2 FOCUS-27 31 July 2024 First-half 2024 results P. 52
Slide 53: Contacts
Contacts Sophie Palliez-Capian Camille Ricotier Head of Investor Relations Investor Relations Associate + 33 6 87 89 33 51 + 33 6 43 29 93 79 sophie.palliez@euroapi.com camille.ricotier@euroapi.com ir@euroapi.com ir@euroapi.com P. 53