(News Bulletin 247) – The leader in active ingredients announces the signing of a contract worth several million euros with Novéal, a subsidiary of L’Oréal for several projects in the field of cosmetics.

Euroapi wants to give more substance to its CDMO activity dedicated to the production of active ingredients for which the group does not own the intellectual property. To confirm its ambitions in this area, the leader in active ingredients has just announced the signing of a first production agreement with Novéal, a subsidiary of the L’Oréal group specializing in the development of eco-responsible processes.

As part of this collaboration, Euroapi will develop and industrialize the manufacturing process for innovative ingredients for cosmetics, by mobilizing its Contract Development and Manufacturing Organization (CDMO) activity. The four-year agreement with Novéal covers several projects. For the first program, the Euroapi site located in Frankfurt will be put to use with a complex chemistry production line dedicated to this inaugural project.

This contract represents “several million euros”, according to the management, which did not wish to reveal its exact amount. For Euroapi, it demonstrates its ability to “adapt to short deadlines and to the regulatory and quality requirements of the sector. [de la cosmétique]”.

The signing of this agreement slightly enthuses the market, the title Euroapi rose 0.9% to 10.725 euros. Since the beginning of the year, the case has lost momentum and lost more than 20%.

It must be said that the former darling of financial analysts has had a series of disappointments for several months. And the latest results published last March were not likely to reconcile Euroapi with investors.

A year 2022 to forget

The group’s 2022 results ultimately came out lower than its targets, which themselves had already been slashed last December.

The group’s performance as an independent company from Sanofi was notably affected by the closure of a production line at the end of last year. At the beginning of last December, the former subsidiary of Sanofi had indeed had to suspend part of its production on its site in Budapest, Hungary, the group having noted “certain deviations from good manufacturing practices, relating to the management of the documentation”. Production has since resumed gradually.

And for this year, the roadmap delivered by Euroapi did not convince either. Euroapi is targeting revenue growth of “between +7% and +8%” (compared to 8.5% in 2022), a core Ebitda margin of between 12 and 14% (compared to 12.3% in 2022) and investments of between 120 and 130 million euros.

The group can however find support on the side of Berenberg who does not have a vision of the dossier as gloomy as that of the market. Little scalded by the last publication of Euroapi, the research department initiated last month, the cover of the title to the purchase with a target price of 16.9 euros.

Quoted by News Bulletin 247, the design office justifies this positive bias by the size of the Euroapi portfolio, whose 165 ingredients cover more than 80% of the manufacture of drugs currently approved by the FDA, the American health authority. . At current prices, the target assigned by Berenberg therefore represents an upside potential of nearly 60%.