- FOCUS-27 includes €110-120M restructuring costs and €350-400M CAPEX investment.
- The plan targets €75-80M annual incremental Core EBITDA by 2027.
- Brindisi site to resume operations in Q3 2024 after quality control issues.
- Thirteen APIs will be discontinued by 2027, focusing on high-value APIs like Peptides and Oligonucleotides.
FOCUS-27 Restructuring Plan
EuroAPI's FOCUS-27 plan involves cutting 550 jobs and divesting facilities in Brindisi, Italy, and Haverhill, UK, by 2027. The Brindisi site, which paused production in March due to quality control issues, is expected to resume operations in Q3 2024. The restructuring aims to improve competitiveness with an estimated cost of €110-120 million and has already attracted interest for the divested sites.
Financial Targets and Investments
The plan targets €75-80 million annual incremental Core EBITDA by 2027 through portfolio optimization and cost reductions. It involves a €350-400 million CAPEX investment, focusing on high-value APIs and strategic sites. Sanofi supports the plan with a €200 million Perpetual Subordinated Hybrid Bond, and discussions are underway to extend the €451 million Revolving Credit Facility. EuroAPI’s streamlined operations will focus on four key sites in France, Hungary, and Germany.
Operational Roadmap
FOCUS-27, revealed in February 2024, aims to improve competitiveness and unlock sustainable growth by refocusing on high-value market segments. The plan includes a streamlined portfolio focused on profitable APIs like Peptides, Oligonucleotides, Prostaglandins, Corticosteroids, Hormones, Vitamin B12, and Opiates. Thirteen APIs will be discontinued by 2027, which accounted for approximately €80 million in net sales in 2023. The share of highly differentiated APIs should reach more than 70% of EuroAPI sales in 2027, compared to 57% in 2023.
Industrial Footprint and CAPEX
The plan involves a rationalized industrial footprint with four production sites: Elbeuf, Vertolaye, Budapest, and Frankfurt. The footprint rationalization aims to increase capacity utilization from 60% to around 80%. EuroAPI plans to invest €350-400 million in CAPEX, focusing on strategic initiatives like increased capacities for Large Molecules, Vitamin B12, and Prostaglandins, and new capabilities for Corticosteroids, Hormones, and Opiates. A steam generation biomass boiler in Elbeuf will also be installed to reduce CO2 emissions.
