Euroapi (EAPI) H1 2024 earnings summary

Executive summary

• FOCUS-27 transformation plan execution is on track, with key initiatives launched, portfolio streamlining, site divestments, and workforce reduction; financing discussions are advanced and company is fully financed for 2024.

• Net sales declined 9.6% year-over-year to €448.7 million, mainly due to lower Sanofi volumes and Brindisi suspension, but commercial activity with non-Sanofi clients and new contracts remained solid.

• Headcount reduction, management team enhancements, and operational deployment included discontinuation of 13 APIs, ramp-down of workshops, and Haverhill divestment process targeting 2025 completion.

• Financial discipline improved through controlled CAPEX, reduced inventories, and better cash management, with free cash flow before financing at €10 million.

• Capital increase of €536,093 from free share grants to employees, raising total shares to 95.6 million.

Financial highlights

• H1 2024 net sales were €448.7 million, down 9.6% year-over-year; Sanofi sales fell 14.9%, other clients down 4.6%.

• Core EBITDA was €47.6 million (margin 10.6%), down from €62.5 million (12.6%) in H1 2023; EBITDA was -€1.4 million due to €47.2 million in exceptional costs.

• Gross profit was €98.0 million, with gross margin up to 21.8% from 19.5% year-over-year.

• Net income was a loss of €34.8 million, compared to a profit of €62.8 million in H1 2023; basic EPS at (€0.37) vs. €0.67.

• Free cash flow before financing was €10 million; net debt at end-June 2024 was €170.2 million (2.38x Core EBITDA).

Outlook and guidance

• Full-year 2024 guidance confirmed: net sales expected to decrease 8–11% year-over-year; H2 performance to slightly exceed H1 due to CDMO phasing.

• Core EBITDA margin for 2024 expected between 4% and 7%, with profitability impacted by transformation and restructuring costs.

• Brindisi site to gradually resume production and shipments in Q3 2024.

• FOCUS-27 plan aims for €75–80 million annual run-rate incremental Core EBITDA by end-2027.