• Net Sales: EUR911.9 million, down 10% compared to 2023.
• Sales to Sanofi: Decreased by 10.7%.
• Revenue from Other Clients: Decreased by 9.4%.
• Core EBITDA: EUR50.4 million, a 45.8% decrease from 2023.
• Core EBITDA Margin: 5.5%.
• CapEx: EUR108 million, with 53% invested in growth and performance projects.
• Net Income: EUR130.6 million loss compared to EUR189.7 million loss in 2023.
• Free Cash Flow Before Financing Activities: EUR150 million, improved from minus EUR132 million in 2023.
• Net Cash Position: EUR25.2 million at the end of 2024, compared to EUR171 million net debt at the end of 2023.
• Working Capital Improvement: EUR159 million driven by inventory reduction and improved DSO.
• Non-Recurring Items: Totaled EUR94 million in 2024.
• Operating Income: Negative EUR120.4 million in 2024.
• Net Financial Expenses: Increased to EUR19.2 million in 2024.
• Income Tax: Reduced to EUR9 million in 2024.

• Warning! GuruFocus has detected 5 Warning Signs with EAPIF.

Release Date: March 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Euroapi SA (EAPIF) demonstrated resilience by securing 37 new clients and 116 new CDMO projects in 2024.
• The company successfully resumed manufacturing at the Brindisi site by the end of August 2024, showcasing agility in operations.
• Euroapi SA (EAPIF) made significant progress on its FOCUS-27 roadmap, improving commercial terms with Sanofi and securing financing support from main shareholders.
• The company committed to sustainability by reducing greenhouse gas emissions and ensuring 100% of electricity for industrial sites comes from renewable sources.
• Euroapi SA (EAPIF) improved its working capital by EUR100 million, driven by a voluntary reduction in inventories and better cash collection.

Negative Points

• Net sales decreased by 10% to EUR911.9 million in 2024, impacted by the temporary suspension of production at the Brindisi site.
• Core EBITDA fell by 45.8% to EUR50.4 million, with a margin of 5.5%, due to industrial inefficiencies and unfavorable fixed cost absorption.
• Sales to Sanofi dropped by 10.7%, and revenue from other clients decreased by 9.4%, partly due to competitive pressure from Asian producers in the vitamin B12 market.
• The company faced challenges with total recordable injury rates, which increased in 2024, prompting the implementation of mitigation measures.
• Euroapi SA (EAPIF) reported a net income loss of EUR130.6 million for 2024, although this was an improvement from the previous year's loss.

Q & A Highlights

Q: Can you provide details on the impact of discontinuing 13 APIs on sales and EBITDA for 2025? A: We expect a low single-digit decrease in sales due to the discontinuation. The EBITDA impact is positive as these products had a negative EBITDA, which is why they are being discontinued.

Q: Why was there a slowdown in CDMO contract wins in the second half of the year, and what is the outlook for 2025? A: The slowdown is due to seasonality in receiving requests for proposals (RFPs) and customer decision-making. We expect CDMO revenues to remain stable in 2025, with early-stage strength offsetting the loss of legacy contracts.

Q: What are the expectations for Brindisi's sales rebound in 2025, and when will the divestment process resume? A: We do not provide specific sales guidance per site, but we expect sales to be in the same range as 2023. The divestment process is not urgent, as the site produces critical APIs. We plan to divest within the duration of the FOCUS-27 plan.

Q: What adjustments should we expect in 2025 compared to the EUR87 million in 2024? A: We expect fewer adjustments in 2025, with the key inventory reduction efforts largely completed in 2024. The magnitude of adjustments will be less than in 2024, and we anticipate a positive EBITDA.

Q: Can you elaborate on the competitive pressure in the vitamin B12 market and its impact? A: Euroapi is the only Western supplier of vitamin B12, facing competition from Asian producers. We expect a low single-digit decrease in sales due to this competition. We are improving our product and process to regain competitiveness, with completion expected in 2025.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.