Euroapi (EAPI) Investor Update summary

Strategic transformation and operational roadmap

• FOCUS-27 plan targets four pillars: API portfolio optimization, CDMO business strengthening, industrial footprint rationalization, and organizational transformation.

• Thirteen low-margin APIs will be discontinued by 2027, with the share of highly differentiated APIs expected to exceed 70% of sales, focusing on products like prostaglandins, peptides, oligonucleotides, and vitamin B12.

• CDMO business aims to exceed one-third of net sales by 2027, leveraging a broad customer base, unique technology platforms, and end-to-end offerings.

• Planned divestment of Haverhill and Brindisi sites by 2027, with investments focused on four flagship/core sites: Elbeuf, Frankfurt, Vertolaye, and Budapest.

• Organizational transformation includes a reduction of approximately 550 headcounts (excluding divested sites), commercial team redesign, R&D focus on CDMO, procurement overhaul, and supply chain improvements.

Financial guidance and profitability outlook

• Net sales for 2024 expected to decrease 8–11% year-over-year, with core EBITDA margin between 4–7%, and a stronger second half due to phasing.

• Profitability impacted by downsizing of CMO contracts, reduced Sanofi sales, and temporary Brindisi suspension.

• Targeting €75–80M annual run-rate incremental core EBITDA by 2027, with two-thirds from portfolio and footprint changes.

• Restructuring costs estimated at €110–120M (2024–2027), excluding divestment costs.

• Working capital expected to improve by €140M through inventory reductions by 2027.

Financing and capital allocation

• CapEx of €350–400M planned, with about 60% allocated to growth initiatives, focused on capacity expansion and decarbonization.

• Funding through improved cash flow, extension of €451M revolving credit facility, €200M hybrid bond from Sanofi, and €54M capacity reservation payment.

• RCF negotiations aim for extension to 2029; hybrid bond details pending finalization.