Euroapi Sa · EURONEXT:EAPI
Euroapi Sa — Shareholder Meeting (May 2023)
50 slides from Euroapi Sa's shareholder meeting presentation, May 11, 2023
Slide 1: Annual Shareholder Meeting
Annual Shareholder Meeting 11 May 2023
Slide 2: EUROAPI: A leader in Active Ingredient Solutions
EUROAPI A leader in Active Ingredient Solutions Viviane Monges Cha ir of the Boa r d P. 2
Slide 3: Creation of an independent company, listed on Euronext Paris
2020 – 2022 Creation of an independant company, listed on Euronext Paris 24 February 2020 18 January 2021 July 2021 Sanofi announced plans to create EUROAPI CEO appointed: Karl Viviane Monges joins EUROAPI EUROAPI and initiated carve-out Rotthier as Chair of the Supervisory Board 17 March 2022 Board
Slide 4: A stable and committed shareholder base
A stable and committed shareholder base L'Oréal 5% Fond French Tech Souveraineté* 12% France 33% UK Institutional 24% Investors 44% US 22% Continental Sanofi* Europe 30% 19% ROW 2% Individual Shareholders 9% P. 4 *: Two years lock-up starting 06 May 2022
Slide 5: Partnership with Sanofi
Partnership with Sanofi Manufacturing and supply by Euroapi of certain active pharmaceutical ingredients for Sanofi ("Global Manufacturing Agreement") Partial protection clauses for both parties, particularly in the event of significant changes in the macro-economic environment (raw material prices,
Slide 6: EUROAPI: a worldwide leader in Active Ingredient Solutions
Euroapi: a worldwide leader in Active Ingredient Solutions 2 activities API €976.6M Solutions Net Sales ~3 450 CDMO in 2022 employees ~200 Commercial presence in API >80 countries P. 6
Slide 7: Strong positions in our two activities
Strong positions in our two activities API Solutions CDMO Customized development and manufacture of Manufacturing and distribution of active ingredients for the pharmaceutical and differenciated APIs biotechnology industries N°1 In small molecules N°7 Objective : N°5 in 2025 • Approximately 165 APIs
Slide 8: A growth strategy
A growth strategy Strengthening the API Growth and expansion Operational Solutions portfolio of CDMO platforms Excellence Enhance product and Develop the CDMO business Improve financial customer portfolio and by leveraging existing performance through cost optimize product and capabilities and devel
Slide 9: Ambitious ESG commitments
Ambitious ESG commitments Offer safe products and Acceleration innovation Create a safe & Uphold best in class a resilient & responsible for environmental multicultural workplace corporate governance supply chain sustainability P. 9
Slide 10: A use of cash policy consistent with the growth strategy
A use of cash policy consistent with the growth strategy Investments to support organic growth (Research and Development, industrial investments,...) Growth Targeted bolt-on acquisitions (New technologies, geographical presence) Shareholders' remuneration Targeted dividend payment in 2026 (Fiscal ye
Slide 11: Competitive positions, commercial strategy, 2022 operational performance
Competitive positions, commercial strategy , 2022 operational performance Karl Rotthier CEO P. 11
Slide 12: A 70 Bn+ euros total addressable market
A 70 Bn+ euros total addressable market API market Sustained growth 2021 – in euros Merchant API market revenues, €bn Small molecules – 60 Bn 112 106 99 97 83 Merchant market API market 75 Bn 160 Bn 17 18 20 22 23 2022 2023 est. 2024 est. 2025 est. 2026 est. Large molecules Small molecules Large mol
Slide 13: Strong positions in the most dynamic market segments
Strong positions in the most dynamic market segments Large molecules Complex chemistry Fermentation HP-APIs Peptides Oligonucleotides Steroids Alkaloids Sartans Anti-infectives B12 & deriv Prostaglandins Emerging presence EUROAPI #3 #1 #3 #1 #3 #1 20.0% Top 5 by Top 3 2025 by 2025 18.0% 16.0% +12-14
Slide 14: A global presence and a unique industrial footprint
A global presence and a unique industrial footprint with six development and manufacturing sites in Europe Haverhill Frankfurt Haverhill Spray drying Process analytical technology Elbeuf Ujpest St Aubin-lès-Elbeuf Paris Microbial fermentation, Vitamin B12 Siège Brindisi Vertolaye Vertolaye API, Cort
Slide 15: A balanced portfolio, focused on differentiated APIs
A balanced portfolio, focused on differentiated APIs 2022 NET SALES BY MOLECULES 2022 NET SALES BY ACTIVITIES Large Molécules 10% HP APIs CDMO 9% 27% Fermentation 15% Complex Chemistry API 66% Solutions 73% P. 15
Slide 16: API Solutions: Commercial Excellence as a driver of business growth
API Solutions : Commercial Excellence as a driver of business growth Capacity building Cross-selling Pricing enhancements Exc. Sanofi of sales from clients that buy Under Under 50% 4+ APIs Contract contract c. 30% Prostaglandins c.70% Purchase Orders 80- purchase <3 APIs 90% Vitamin B12 Hormones
Slide 17: CDMO: leverage a unique technological offering to support innovators
CDMO: leverage a unique technological offering to support innovators Requests For Proposals received 230 Others 5% 35% from big Fermentation Pharma 20% Complex Chemistry 50% Biotech 45% 15% mid size Large companies Molecules 30% 120 ROW 7% USA 23% Europe 70% Average 2019-2020 2021 2022 P. 17
Slide 18: 2022: disciplined execution of the strategy despite headwinds
2022 : disciplined execution of the strategy despite external and internal headwinds Inflationary environment (raw material and energy prices) Headwinds Voluntary temporary suspension of the production of prostaglandins at our Budapest site Net Sales growth driven by API Solutions and CDMO Increase
Slide 19: Key figures 2022
Key figures 2022 Net Sales Core EBITDA CAPEX 976.6 m€ +8.5% 120.0 m€ 138.3 m€ API Solutions 14.2% +5.3% +8.5% of Net Sales CDMO +18.3% Core EBITDA margin 45% growth CAPEX 12.3% Large molécules +79.9% P. 19
Slide 20: Launch of major investment projects to support growth
Launch of major investment projects to support growth Jul. 22 - €24m* in a new steam generation biomass boiler in Payback Elbeuf • 140 000 tons annual steam < 3 years • Reduced site’s CO2 emissions (-76%) < 7 years for strategic projects Oct. 22 - €18m in a new state-of-the-art manufacturing equipme
Slide 21: Acceleration of the company's transformation
Acceleration of the company’s transformation Culture change in motion for a more agile, responsive, and customer-centric company Adapt our operating model to support best-in-class CDMO roadmap Streamline and simplify processes and tools Enhance procurement agility to better manage input costs and mi
Slide 22: Consolidated Results and Perspectives
Consolidated Results and Perspectives Antoine Delcour Directeur financier ─ P. 22
Slide 23: Net Sales evolutions
Net Sales evolutions 8,5% growth In Million euros and annual growth API Solutions : +5.3% High-single digit growth of sales to Other Clients driven by the execution of the commercial excellence strategy + 33.8% 976.5 Price adjustments with Other Clients fully delivered in 2022 + 10.7% Contractual cl
Slide 24: Increased contribution from large molecules in line with growth strategy
Increased contribution from large molecules in line with growth strategy Per type of molecule 2022 ∆% vs 21 Key drivers Growth driven by a strong demand from Peptides and Large molecules €98.4m +79.9% oligonucleotides Highly potent Negatively impacted by the temporary suspension of €82.2m -19.0% pro
Slide 25: Increase in Gross Profit despite energy and raw materials impacts
Increase in Gross Profit despite energy and raw materials impacts Core EBITDA negatively impacted by the suspension of prostaglandin production in late Q4 +1.5 pts +2.1 pts 12.3% +1.3 pts 14.0% 12.3% +0.3 pts +4.6 pts -8.1 pts -1.4 pts +1.5 pts Core EBITDA 2021 Volume Price & Mix Performance Energy
Slide 26: 2022 Results
2022 Results In € millions FY-2022 FY-2021 Change • Net sales up 8.5%, driven by API Solutions and CDMO commercial momentum Net sales 976.6 899.8 +8.5% Gross profit 176.9 153.3 Gross profit margin 18.1% 17.0% • Increase in Gross Profit despite the impact of the suspension of prostaglandin production
Slide 27: Sound balance sheet and financial flexibility
Sound balance sheet and financial flexibility In million euros Net Debt on Equity ratio (end of December 111.3 2022): 2,3 19.8 450 million euros Credit Revolving Facility – 79.9 (66.5) RCF (2.6) (25.6) « Core Free Cash Flow » : (54,2) million euros, (167.4) compared to 79.8 million euros in 2021, in
Slide 28: Full year 2023 guidance
Full year 2023 guidance Between +7% and +8% Net sales growth, including double-digit growth in sales to Other Clients and low-single digit decrease in sales to Sanofi Core EBITDA margin between 12.0% and 14.0% Capex between €120m and €130m P. 28
Slide 29: Mid-term perspectives
Mid-term perspectives Net Sales to increase between +7% and +8% on average for the period 2023-2026* (vs. +6% to +7% for the period 2021-2025), driven by double-digit growth in Sales to Other clients (including API Solutions and CDMO). Core EBITDA margin to exceed 20% in 2026 (vs. 2025 initially exp
Slide 30: Recent events
Recent events Resumption of all prostaglandin production in Budapest Completion of the transformation of the R&D organization - Creation of technology platforms to support operations (including Small Molecules Upstream, Small Molecules Advanced, Peptides and Oligonucleotides, Biotechnology, Particle
Slide 31: ESG Roadmap
ESG Roadmap Viviane Monges Chair of the Board ─ P. 31
Slide 32: Our commitments
Our commitments Offer safe products and a Accelerate innovation for Create a safe & Uphold best in class resilient & responsible environmental multicultural workplace corporate governance supply chain sustainability We provide high quality products We work continuously with our We propose innovative
Slide 33: 2022 achievements
2022 achievements Accelerate Create a safe and Uphold best - in- innovation for multicultural class corporate environmental workplace governance sustainability 100% sites 30% women in a ISO14001/50001 75% leadership position by Achieved United Nations Global certification by 2023 2025 Compact commit
Slide 34: Climate Commitment
Climate Commitment ~ -30% CO2 emissions by 2030 (scopes 1 & 2 / vs 2020) Total energy consumption energy consumption Building of a biomass heating ~ 100% renewable electricity on - 9.2% in 2 years* plant in Elbeuf sites by 2025 662754 Solar panels in Haverhill in 2023 Similar project in Vertolaye 60
Slide 35: Biomass heating plant in Elbeuf
Biomass heating plant in Elbeuf A project creating value for all stakeholders 24 M€ total investment IRR: 25% Finances Finances « Payback »: 5 years Up to 10.4 M€ co- investment -76% CO2 emissions vs 2020 -19kt fossil fuel use Environment Use of local natural Environment resources (wood waste - 140k
Slide 36: Successful employees share plan
Successful employees share plan Creating value together Global participation rate: 67.6% France: 91.5% - Germany: 69.1% 7 > 3 300 Eligible countries Eligible employees Note: 1 France, Germany, UK, Hungary, Italy, US, Japan P. 36
Slide 37: Governance and Board activities
Governance and Board activities Viviane Monges Chair of the Board ─ P. 37
Slide 38: A dual Governance
A dual Governance Viviane Monges Karl Rotthier Chair of the Board Chief Executive Officer Emmanuel Elizabeth Cécile Rodolfo Claire Mattias Blin Bastoni Dussart Savitzky Giraut Perjos Employee representatives Mandate subject to ratification Independent Guillaume Adeline Mortelier Géraldine Le Franc L
Slide 39: A balanced and engaged Board of Directors supported by three specialised committees
A balanced and engaged Board of Directors supported by three specialised committees 13 members Audit Committee 63% independents ESG Committee 54% women Nominations and 98% attendance rate Remunerations Committee 6 nationalities p.39
Slide 40: Activities of the Council and its Committees in 2022
Activities of the Council and its Committees in 2022 Meetings Attendance Rate Main activities Board 4 98% Audit Committee– 75% independents Review of the Group's financial situation - Review of the Claire Adeline Rodolfo risk management process and risk mapping - Review of Giraut Le Franc Savitzky 4
Slide 41: New Board member appointment
New Board member appointment Mattias Perjos Mattias Perjos is the CEO of Getinge, a company listed on the Stockholm Stock Exchange, which he joined in 2017 Previously CEO of Coesia IPS Division and Coesia International (2012- 2017), CEO of Flexlink (2006-2016), which he joined in 1998 Master's degre
Slide 42: Corporate Officers' remuneration policy
Corporate Officers' remuneration policy Elizabeth Bastoni Independent Board Member – Chair of the Nominations and Remunerations Committee ─ P. 42
Slide 43: Independent Directors 2022 Remuneration
Independent Directors 2022 Remuneration 387 000 euros Total Envelope 1,100,000 euros p.43
Slide 44: Remuneration policy for executive directors in 2022
Remuneration policy for executive directors in 2022 Chair of the Board of Directors CEO Fixed Variable Target 80% (maximum 150%) Financial and 100% fixed Individual 300,000 € objectives p.44
Slide 45: Remuneration policy for executive directors in 2022
Remuneration policy for executive directors in 2022 Chair of the Board of Directors CEO 450,000 € 148,441 € Fixed part Others Fixed part 300,000 € 190,800 € Variable Remuneration 349,000 € exceptional bonus linked to EUROAPI listing p.45
Slide 46: Variable remuneration of the CEO for 2022
Variable remuneration of the CEO for 2022 Criterias Weight Objectives Achievement Achievement rate Financial Objectives Net Sales 20% 1,009 Bn€ 977 M€ 11% 39,600 € Core EBITDA margin 30% 14% 12,8% 0% 20% 10% (44)% 0% Free Cash-flow conversion Individual Objectives 20% 100% 140% 28% Strategic Roadmap
Slide 47: Independent Directors - Remuneration Policy for 2023
Board of Directors Independent Directors - Remuneration Policy for 2023 60,000 euros* Board If one of the directors has attended less than 80% of the meetings, his/her fixed remuneration will be reduced accordingly Envelope annual Audit Committee / Nominations and Remunerations Committee allocation
Slide 48: Remuneration of the CEO in 2023
Remuneration of the CEO in 2023 520,000 € Fixed part Variable Target 80% (maximum 150%) P. 48
Slide 49: Solid fundamentals for value-creating growth
1 Global presence - Technical and technological expertise 2 >70 billion€ market, growing rapidly 3 Cutting-edge technologies and a leading industrial footprint Solid fundamentals for value-creating 4 Rapid growth of CDMO activity (peptides and oligonucleotides, complex chemistry, fermentation and HP
Slide 50: Annual Shareholder Meeting
Annual Shareholder Meeting 11 May 2023