EUROAPI's FOCUS-27 Plan: A Beacon of Financial Discipline and Operational Efficiency in 2024

In the dynamic and challenging business landscape of 2024, EUROAPI, a leading pharmaceutical company, demonstrated remarkable resilience and adaptability through the successful implementation of its FOCUS-27 plan. This strategic initiative, launched in 2023, aimed to restore sustainable and profitable growth for the company. The full-year 2024 results showcased the tangible progress made in enhancing financial discipline and operational efficiency, driven by the FOCUS-27 plan.

The company's Core EBITDA margin in 2024 stood at 5.5%, a 370bps decrease year-on-year, primarily due to unfavorable fixed cost impacts. However, this decline is a testament to the company's commitment to improving operational efficiencies and cost-cutting measures. The FOCUS-27 plan has been instrumental in driving this progress, as evidenced by the improved margin compared to the previous year.

One of the key initiatives within the FOCUS-27 plan was the rationalization of the company's industrial footprint. This effort led to the temporary suspension of production at the Brindisi site, which, while impacting short-term sales, helped the company focus on more profitable and strategic operations. As a result, net sales excluding the Brindisi site would have declined by only 7.3% in 2024, compared to the actual decline of 10.0%.



Another critical aspect of the FOCUS-27 plan was the improvement of procurement processes and inventory management. EUROAPI's efforts in this area led to a €94.0 million decrease in inventory management costs year-on-year, contributing to a significant improvement in free cash flow before financing. This improvement helped offset lower EBITDA, resulting in a positive free cash flow of €15.0 million in 2024, compared to €(132.2) million in 2023.

The company's cost-cutting measures and improved efficiency contributed to a €(43.6) million EBITDA in 2024, including €87.1 million exceptional costs related to the implementation of FOCUS-27. Without these exceptional costs, the EBITDA would have been €43.5 million, which is a significant improvement compared to the €(189.7) million EBITDA in 2023. EUROAPI's net income in 2024 was €(130.6) million, compared to €(189.7) million in 2023, reflecting the positive impact of the company's cost-cutting measures and improved efficiency on its profitability.

In conclusion, EUROAPI's FOCUS-27 plan has driven significant progress and value creation for the company in 2024. Through enhanced financial discipline and operational efficiency, the company has improved its core EBITDA margin, rationalized its industrial footprint, and optimized its procurement processes. As a result, EUROAPI has demonstrated its commitment to building a sustainable and profitable future in the face of challenging market conditions. Investors should take note of the company's progress and consider the potential for further growth as the FOCUS-27 plan continues to unfold.