Business Review

Strong growth momentum in 2021

Growth driven by custom projects

PolyPeptide generated EUR 282.1 million of revenue in 2021, representing growth of 26.5% versus 2020. The revenue increase was driven by PolyPeptide’s custom projects that are in phase III of clinical development. This included a substantial contribution from the GMP production of two key intermediates used in the Matrix-M™ adjuvant component of the coronavirus vaccine developed by Novavax.

In 2021, the Custom Projects segment revenue increased by 63.9% versus 2020. PolyPeptide remained strongly committed to supporting the R&D pipeline of existing and new customers. As a result, the active custom projects pipeline continued to expand, reaching 196 projects at the end of 2021, of which 30 were in phase III. The pipeline covers a wide range of therapeutic areas, reflecting the increasing use of peptides across a diverse selection of therapeutic indications and medical conditions.

The Contract Manufacturing segment revenue declined by 10.5% driven by life cycle trends in some maturing products.

The Generics and Cosmetics segment revenue increased by 21.2%, given PolyPeptide’s continued efforts to benefit from genericization. In 2021, the Group submitted 13 Drug Master Files (DMF) for generics (Gx) in new markets and nine new authorizations in major markets for customers to reference PolyPeptide’s Gx filings.

Notwithstanding the doubling of manufactured volumes in 2021 versus 2020, PolyPeptide managed to further improve both, its overall on-time-in-full (OTIF) delivery performance to 95% (2020: 92%) and its net promoter score (NPS) to 75 (71)1, also reflecting a continuously effective customer engagement.

1 Based on interviews with ca. 100 customers in the context of an annual customer survey conducted by a 3rd party on behalf of PolyPeptide.

Increase in profitability

The gross profit in 2021 was EUR 103.8 million, up by 40.8% versus 2020, driven by a favorable product mix, a higher capacity utilization and improved labor productivity, with a gross margin of 36.8%, up by 3.8 percentage points.

EBITDA for the period was EUR 84.8 million. Excluding the adverse impact from one-off items, adjusted EBITDA was EUR 88.2 million, up by 42.4%, with an adjusted EBITDA margin of 31.3%, up by 3.5 percentage points.

The one-off adjustments were reported earlier with half-year results and included IPO costs of EUR 5.7 million, partly offset by income from US government loans of EUR 2.4 million waived in the context of the coronavirus pandemic.

The result for the year was EUR 47.3 million, up by 50.8%, driven by the increase in revenue and gross profit as well as reflecting a financial result of EUR -4.3 (2020: -6.7) million and income tax charges of EUR -12.6 (-6.4) million. The effective tax rate increased to 21.0% versus 16.9% in 2020, driven by higher non-capitalized tax losses in 2021 and stable R&D tax credits.

Accelerated capital deployment

To meet expected growth mainly from its late-stage phase III project pipeline, the Group accelerated infrastructure investments during the second half of 2021. Capital expenditures for the period reached EUR 76.7 million or 27.2% of revenue, versus EUR 48.2 million or 21.6% in 2020.

Investment projects include the construction of large-scale solid phase synthesis capacity in Braine-l’Alleud (Belgium), large scale downstream capacity in Malmö (Sweden), freeze drying capacity at several sites as well as product development and analytical capabilities. Investment projects also include the build-up of the oligonucleotide facility in Torrance (California) as well as IT infrastructure and digitalization efforts.

Larger infrastructure initiatives are typically implemented in close collaboration with customers to reduce the risk for PolyPeptide. Driven by pre-payments for future volume commitments from several customers, contract liabilities were up by 37.6% to EUR 46.0 million.

Total assets increased by 58.3% to EUR 595.0 million, also reflecting net cash inflows of EUR 172.3 million from the IPO and the listing on SIX Swiss Exchange on 29 April 2021. Inventories and trade receivables in proportion to revenue slightly decreased to 40.1% (2020: 42.3%) and 23.1% (24.0%), respectively.

The return on net operating assets for 2021 reached 21.0% versus 18.2% for 2020, reflecting the generally higher utilization of assets as evidenced by the operating result up by 44.6% and average net operating assets up by 25.7%.

Total equity as per the end of 2021 more than doubled to EUR 421.1 million with an equity ratio of 70.8% (47.3%). Cash and cash equivalents reached EUR 136.3 (17.2) million. With total financial debt of EUR 29.5 million, the net cash position of the Group was EUR 106.9 million as per the end of 2021, up from EUR -47.1 million at the end of 2020. Following the IPO, PolyPeptide refinanced an existing EUR 25 million term loan, which was repaid during the second half of the year.

The net cash flows from operating activities excluding the changes in net working capital were EUR 76.8 million. The net cash flow from the changes in net working capital was EUR -19.5 million, also reflecting record sales activities in December 2021. With net cash flows from acquisitions of intangible assets and property, plant and equipment of EUR -77.7 million, the free cash flow in 2021 amounted to EUR -20.4 million.

New capabilities in oligonucleotides

The Group’s business strategy is articulated around the four priorities of “Customers first”, “Drive innovation”, “Go for growth”, and “OnePolyPeptide” (see section Strategy). The growth ambition includes the expansion of the Group’s capabilities beyond peptides into the emerging market of nucleic acid-based therapies, which is synergistic with peptides given the overlaps in development capabilities and manufacturing processes.

In 2021, a R&D and GMP pilot plant facility with a dedicated team was set up at the site in Torrance (California) and the first customer contract was signed towards the end of 2021. The Group’s strategy is to build a portfolio of early-stage oligonucleotides custom projects and to develop the business and infrastructure with a long-term perspective.

Integrated ESG management

To incorporate the relevant environmental-, social- and governance-related aspects as part of its strategic priorities, PolyPeptide conducted an ESG materiality assessment in the second half of 2021. Twelve material ESG topics were identified (see section Corporate Responsibility).

The Group believes that the integration of the identified material ESG topics into its strategy is the most effective way to continuously improve and to meet both business needs and stakeholder expectations, ultimately to benefit the health of millions of patients around the world.

In particular, the search for greener manufacturing solutions is seen as a critical opportunity to improve process performance and reduce the environmental footprint. PolyPeptide has defined a comprehensive multi-faceted program to address this technically complex challenge, working with partners, including academic institutions, technology startups, and customers.

Organizational progress

With the IPO, a new Board of Directors was elected, along with the establishment of the Innovation and Technology, the Remuneration and Nomination and the Audit and Risk Committees. The leadership transition to Raymond De Vré, who was appointed CEO as of the first trading day on SIX Swiss Exchange on 29 April 2021, was completed during the first-half reporting period.

In June 2021, PolyPeptide announced the creation of a General Counsel position at the Executive Committee level and appointed Christina Del Vecchio, who started in her role at the beginning of September 2021. On 1 December 2021, PolyPeptide announced the appointment of Neil Thompson as Director Global Sales and Marketing and member of the Executive Committee as internal successor to Jan Christensen, who stepped down from his role as per the beginning of 2022. Jan Christensen will support selected business development projects before retiring towards the end of 2022.

Effective 1 January 2022, the PolyPeptide Management Committee (PMC) was established as an extension to the Executive Committee (EC) to coordinate the implementation of the Group’s integrated strategy more effectively. This was supported by the strengthening of the overall organization, including new Group-wide responsibilities for Quality, integrated Development as well as Employee Health & Safety (EH&S).

Risk management and internal audit

PolyPeptide is committed to continuously improve its controls, processes and strategies to manage the risks associated with its activities. Within its integrated strategy it pursues a holistic approach with the ambition to not only prevent or minimize the impact from unexpected events on the business or the performance, but also to benefit from new opportunities that might arise.

Following the listing in April 2021, PolyPeptide initiated various initiatives to assess, evaluate and mitigate key risks, including those resulting from the growth of the business and the complexity of its operations, also taking into consideration financial, legal, IT and sustainability aspects. The Group plans for an annual risk assessment report to be submitted at least once per year to the Audit and Risk Committee and to be presented to the Board of Directors.

The risk assessment report will be designed to provide a consistent, Group-wide perspective of the key risks as well as other risks identified within the Enterprise Risk Management Framework, which was initiated during the second half of 2021 by the Audit and Risk Committee together with the CFO organization (for a description of the Enterprise Risk Management Framework refer to the Corporate Governance Report).

Employees and people development

As per the end of 2021, the headcount of PolyPeptide was 1,101, with average full-time equivalents up by 14.4% to 1,041 (910). To support growth, most of the new hires were in the manufacturing, process development and quality functions.

Consistent with its integrated strategy and ESG agenda, the Group decided to put a particular focus on people development going forward. Building on robust training procedures at site-level that ensure compliance with GMP requirements and earlier leadership development programs, PolyPeptide aims at further strengthening the Group-wide processes to hire, train and develop talent, particularly for middle management positions.


With basic earnings per share of EUR 1.47, the Board of Directors will propose to the Annual General Meeting on 26 April 2022 a cash distribution of CHF 0.30 per share, representing a pay-out of CHF 9.9 million or 20.3% of the result for 2021, which is consistent with PolyPeptide’s dividend policy of a pay-out ratio of between 20% and 30% of the result for the year.

Outlook for 2022

Building on its core values of “innovation”, “excellence”, and “trust”, PolyPeptide strives to be the preferred long-term partner for all its customers. With a relentless focus on quality and high delivery performance, it plans to further develop its capacities and capabilities. While being focused on meeting customer expectations and on delivering on its integrated strategy, the Group is currently in the process of updating its long-term business plan.

For 2022, PolyPeptide targets revenue growth of 12-14% versus 2021 with a targeted adjusted EBITDA margin of around 30%. It will continue to invest in modernizing and expanding its infrastructure with capital expenditures as percent of 2022 revenue expected to be above 25%.

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