Release Date: July 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bachem Holding AG (BCHMF, Financial) reported a solid increase in EBITDA to CHF55.5 million, marking a 5.6% rise in Swiss francs and 8.7% in local currencies.
- The company maintained a strong EBITDA margin of 23.1% for the first half of 2024.
- Bachem Holding AG (BCHMF) is investing significantly in expansion, with CHF143.9 million spent in the first half of the year, indicating confidence in future growth.
- The CMC development product category showed strong growth of over 18%, driven by late-stage assets.
- The company remains debt-free with an equity ratio of approximately 76%, highlighting a strong financial position.
Negative Points
- Sales for the first half of 2024 were flat at CHF240.3 million, with only a 1.3% increase in local currencies.
- Commercial API sales were lower compared to the first half of the previous year due to decreased demand for non-peptide commercial oligonucleotides and small molecules.
- The company experienced a negative cash flow of CHF95 million for the first half of 2024.
- There is a noted increase in inventory by CHF59.3 million, which could indicate potential challenges in managing stock levels.
- The timeline for the Building K facility has been affected by an incident, with operations now expected to ramp up gradually in the first half of 2025, potentially delaying revenue generation.
Q & A Highlights
Q: Can you update us on the revenue potential of Building K and any changes in customer behavior due to the biosecurity backdrop?
A: The revenue potential of Building K is expected to match our current sales levels, depending on specific projects. Regarding the biosecurity backdrop, there is a focus on shortening supply chains, which presents potential opportunities for us. - Thomas Meier, CEO
Q: Could you provide more details on the timeline for Building K's commissioning and the small molecules business?
A: Building K is in the commissioning phase, with a gradual ramp-up expected in the first half of 2025. We do not break out the small molecules business separately but will provide more details in the full-year 2024 call. - Thomas Meier, CEO
Q: What is the expected volatility of commercial API sales, and how will CapEx be funded?
A: The first half of 2024 was in line with expectations, with a stronger second half anticipated. CapEx is expected to be 20% higher than in 2023, funded through operating cash flow, customer prepayments, and potentially external financing. - Thomas Meier, CEO & Alain Schaffter, CFO
Q: When can we expect the first revenues from Building K, and how is the pipeline evolving?
A: We will provide a revenue forecast for 2025 in the full-year call in February. The pipeline details will also be shared during the full-year results. - Thomas Meier, CEO
Q: How will the company manage higher CapEx and cash flow needs in the second half of the year?
A: The higher CapEx in the second half is due to billing timing and ongoing projects. Financing will be managed through operating cash flow, customer prepayments, and potentially external financing. - Alain Schaffter, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
