NEWS
EuroAPI launches strategic review
During its full-year results presentation , CDMO and API supplier EuroAPI announced the launch of Focus-27 , a comprehensive project that will seek to unlock profitable growth and increase returns . Key means of achieving include :
• Streamlining the value-added API portfolio by discontinuing 13 with low or negative margins and focusing on highly differentiated , profitable products , such as vitamin B12 , prostaglandins , peptides and oligonucleotides
• Having a focused CDMO offer “ leveraging our recognised capabilities and technology platforms ”
• Rationalising its industrial footprint to prioritise high-return capex and create “ a leaner organisation with more efficient ways of working ” This is all subject to various local information and consultation processes with employee representatives , and agreements with stakeholders . EuroAPI plans to reveal the outcome during Q2 .
The company added that its key objective for 2024 under new CEO Ludwig de Mot is to “ focus on cash in a year of transition ”. It has signed amended contractual terms with Sanofi , from which it was originally spun out , and is having discussions with key stakeholders on finance . Both Sanofi and EPIC BpiFrance have agreed to extend the lock-up of their stakes until December 2025 .
In 2023 , sales increased by 3.8 % to € 1,013.2 million . However , core EBITDA was down by 22.4 % to € 93.7 million and the core EBITDA margin , fell from 12.3 % in 2022 to 9.2 % due to unfavourable fixed cost absorption and input cost inflation . The company had to take a € 226.4 million impairment on tangible assets and had a net loss of € 189.7 million , over 12 times more than in 2022 .
In 2024 , EuroAPI anticipates a 4-7 % decrease in net sales on a comparable basis , largely driven by a continuing fall in sales to Sanofi . The core EBITDA margin is expected to fall further to 6-9 %. The company added that there will be a material impact from transformation and early restructuring costs , including industrial under-activity resulting from Focus-27 .
CDMO sales were the bright spot in 2023 , growing by 6.8 % to € 285.8 million . Sales to Sanofi were 6.3 % up as commercial projects progressed despite the discontinuation of two late-stage programs at the end of 2022 . Meanwhile , sales to other clients grew 7.2 %, driven mainly by increased sales from commercial products .
In all , 69 projects were active at the end of 2023 and 23 new contracts were signed , of which 12 were in the pre-approval or commercial phase , spurred by increasing demand for peptides and oligonucleotides , complex chemistry re-shoring and dual sourcing with European players .
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Carbon black growth Birla Carbon plans two new carbon black manufacturing sites in Naidupet , Andhra Pradesh , India , and Rayong , Thailand . Each will begin operations in 2025 , with initial capacity of 120,000 tonnes / year , which could be doubled later . Ongoing expansions at another site in Hungary and at a posttreatment facility in India are also progressing on plan , Birla stated .
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MAR / APR 2024 SPECCHEMONLINE . COM
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