Bachem's Strategic Investments Drive Sales and Profit Growth

Bachem Holding AG, a leading innovator in the development and manufacture of peptides and oligonucleotides, has seen a significant increase in sales and profitability, driven by strategic investments in capacity expansion and long-term contracts. The company's revenue growth trajectory has been positive over the past few years, with notable increases in the last twelve months.

In the half year ending June 30, 2024, Bachem's revenue was CHF 240.31M, with a 2.31% growth rate. This brings the company's revenue in the last twelve months to CHF 577.77M, up 7.65% year-over-year. In 2023, Bachem Holding AG had annual revenue of 577.32M with an 8.57% growth rate. This consistent growth can be attributed to several key factors.



Firstly, Bachem has invested heavily in expanding its production capacity. In 2022, the company invested CHF 142.6 million to expand capacity at all its sites, including the construction of a modern facility to produce high volumes of peptides and oligonucleotides at the Bubendorf site. This investment has the potential to double production capacity at the site and is scheduled to open in 2024. Additionally, Bachem announced plans to acquire 155,000 m2 of land in Eiken (Canton of Aargau) for the construction of new production facilities for peptides and oligonucleotides. These investments have allowed Bachem to meet growing demand and secure long-term contracts.

Secondly, Bachem has secured several long-term contracts, providing a stable revenue stream and contributing to the company's financial performance. In 2022, Bachem was able to announce supply agreements on peptides for the period 2023-29 with a sales potential of at least CHF 1.2 billion. Additionally, the company signed a strategic collaboration with Eli Lilly and Company to develop and manufacture medical agents based on chemically produced oligonucleotides, with an annually increasing sales potential that could reach approximately CHF 100 million annually within seven years.



These strategic investments and long-term contracts have allowed Bachem to secure a strong financial performance and position the company for future growth. The increased production capacity and stable revenue stream from long-term contracts have contributed to the company's overall financial success. Bachem's EBITDA margin of 30.2% is within the medium-term target range of over 30%, indicating that the company is maintaining a healthy profit margin.

In conclusion, Bachem's strategic investments in capacity expansion and long-term contracts have significantly influenced its financial performance and future growth prospects. The company's consistent revenue growth, healthy profit margins, and strategic investments in production capacity expansion have positioned Bachem for continued success in the market. As an investor, it is essential to stay informed about the latest developments in the industry and consider companies like Bachem that demonstrate a commitment to growth and innovation.