Salute e Benessere
EUROAPI is moving ahead with its FOCUS-27 plan, setting the foundations for future profitable growth1
Press Release
“FOCUS-27 is leading EUROAPI to a more agile, value-added, and rightsized business model. It will significantly improve the company's competitiveness and set the stage for long-term sustainable, profitable growth,” says Ludwig de Mot, Chief Executive Officer . “The significant progress made toward its financing is a key milestone. With the support of our main shareholder, our customers' confidence, and our team members' dedication, we will increase efficiency by optimizing our organization, focusing on our company's core assets to fulfill our mission and reinvent active-ingredient solutions to meet clients' and patients' needs around the world.”
Operational roadmap
Short and long-term financing
Full-year 2024 outlook updated to include the impact of the temporary suspension of production in Brindisi (see underlying assumptions on page 3)
Paris – 26 June 2024 – EUROAPI today announces that it has reached an agreement with Sanofi regarding the funding of FOCUS-27 upon the completion of the ongoing discussions with its banks to amend and extend the current Revolving Credit Facility. In addition, following the decision to progressively restart product shipments and production of APIs in Brindisi, the company provides revised full-year 2024 guidance.
Operational roadmap
Revealed in February 2024 following a comprehensive analysis of the company's operational strengths and weaknesses, FOCUS-27 is a 4-year plan that aims to improve competitiveness and unlock sustainable and profitable growth by refocusing on high-value and growing market segments.
It is built on four pillars:
The footprint rationalization will increase the capacity utilization rate from a current average of 60% to around 80% over the period, which aligns with industry standards. Haverhill (UK) and Brindisi (Italy) manufacturing sites are planned to be divested before the end of the plan. The group has already received expressions of interest. The potential costs of these divestitures, estimated as of today, are embedded in the current financing of the plan.
EUROAPI plans to invest 350 to 400 M€ in CAPEX throughout the plan to pave the way for future growth. These CAPEX will be focused on strategic initiatives, including
Approximately 59% of total CAPEX will be dedicated to growth or performance.
FOCUS-27 targets to generate 75 to 80 M€ annual run rate incremental Core EBITDA by the end of 2027 , driven by the optimization of the product portfolio, increased industrial efficiency, and cost-cutting. R estructuring costs are estimated in the range of 110 to 120 M€ between 2024 and 2027 (excluding the potential costs related to the divestment of Haverhill and Brindisi, estimated as of today, which are embedded in the current financing of the plan).
Short and long-term financing
The implementation of FOCUS-27 will be funded by a combination of financial resources.
The Brindisi site is expected to progressively resume shipments and production during Q3 2024
The investigations launched at the company's initiative confirmed the existence of malpractices at the local level. Following the effective and reliable remediation plan deployed by the site and the results of the Italian Health Authorities' (AIFA) site inspection, we expect to gradually resume API shipments and production during the third quarter of 2024.
Full-year 2024 outlook updated to include the impact of the temporary suspension of production in Brindisi
As we continue to focus on putting the company back on track toward sustainable and profitable growth, we now expect:
This outlook has been built on the following assumptions:
EUROAPI's management will hold a live audio webcast today at 7:15 p.m. CET. The presentation will be available on the corporate website ( https://channel.royalcast.com/landingpage/euroapi-eng/20240626_1/ )
Financial Calendar (to be confirmed)
About EUROAPI
EUROAPI is focused on reinventing active ingredient solutions to sustainably meet customers' and patients' needs around the world. We are a leading player in active pharmaceutical ingredients with approximately 200 products in our portfolio, offering a large span of technologies while developing innovative molecules through our Contract Development and Manufacturing Organization (CDMO) activities.
Taking action for health by enabling access to essential therapies inspires our 3,650 people every day. With strong research and development capabilities and six manufacturing sites, all located in Europe, EUROAPI ensures API manufacturing of the highest quality to supply customers in more than 80 countries. EUROAPI is listed on Euronext Paris; ISIN: FR0014008VX5; ticker: EAPI). Find out more at www.euroapi.com and follow us on LinkedIn .
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 strategy, financial and non-financial future results and the environment in which the Group operates, as well as events, operations, future services or product development and potential. Forward-looking statements are generally identified by the words “expects”, “anticipates”, “believes”, “intends”, “estimates”, “plans” and similar expressions. Forward looking statements and information do not constitute guarantees of future performances, and are subject to known or unknown risks, uncertainties and other factors, a large number of which are difficult to predict and generally outside the control of the Group, which could cause actual results, performances or achievements, or the results of the sector or other events, to differ materially from those described or suggested by these forward-looking statements. These risks and uncertainties include those that are indicated and detailed in Chapter 3 “Risk factors” of the Universal Registration Document filed with the French Financial Markets Authority (Autorité des marchés financiers, AMF) on April 5, 2024. These forward-looking statements are given only as of the date of this press release and the Group expressly declines any obligation or commitment to publish updates or corrections of the forward-looking statements included in this press release in order to reflect any change affecting the forecasts or events, conditions or circumstances on which these forward-looking statements are based.
1 Operating margins
2 Compared to 2024 current estimates
3 Excluding the potential costs of Haverhill and Brindisi divestitures (estimated as of today), which are embedded in the current financing of the plan
4 This excludes Brindisi and Haverhill sites that are planned to be divested by the end of the plan
5 Subject to information and consultation processes with employee representatives. Total headcount at the end of 2023: 3,650 (FTE)
6 Compared to 2024 current estimates
7 The RCF was fully drawn at the end of May 2024, with a 49% utilization rate. Net Debt was in line with the company's business plan
Attachment
2321 Rosecrans Avenue. Suite 2200
90245 El Segundo Stati Uniti