Management Report - Business Review

Business Review

Record revenue growth of 43% in H2 2023 versus H1 2023; operational improvements yielding increased profitability and cash flow


In 2023, PolyPeptide generated EUR 320.4 million in revenue, representing a 14.0% increase versus 2022 and 18.2% growth at constant currency rates. Excluding the contribution of revenue associated with the coronavirus pandemic, which amounted to EUR 5.8 million in 2023 versus EUR 50.7 million in 2022, revenue grew by 36.6%.

In H2 2023, revenue growth accelerated versus H1 2023 on the back of strong customer demand and operational progress to EUR 188.5 million, representing a substantial increase of 43.0% versus H1 2023 and 28.0% versus H2 2022. Excluding revenue associated with the coronavirus pandemic, the increase was 41.4% and 42.3%, respectively (revenue associated with the coronavirus pandemic of EUR 4.3 million in H2 2023, EUR 1.5 million in H1 2023 and EUR 17.9 million in H2 2022).

Revenue in 2023 was underpinned by peptide-driven momentum emerging from PolyPeptide’s active custom projects pipeline. Several of the phase II and phase III projects for drugs related to metabolic, rare diseases and oncology progressed in their clinical development, with some reaching commercial stage. The number of commercial projects supported during 2023, including those in Generics & Cosmetics, increased to 64, up from 60 in 2022.

Revenue in Custom Projects increased by 10.3% in 2023 versus 2022, and by 22.2% in Contract Manufacturing. Excluding revenue associated with the coronavirus pandemic, revenue showed significant increases of 33.6% and 53.1%, respectively. Revenue in Generics & Cosmetics, where no impact from the coronavirus pandemic was recorded, increased by 1.2% compared to the strong prior year.









Revenue reported




Custom Projects




Contract Manufacturing




Generics & Cosmetics




Revenue not associated with the coronavirus pandemic




Custom Projects




Contract Manufacturing




Generics & Cosmetics




Within the strong revenue growth in 2023, the revenue shares related to metabolic diseases and large pharma customers increased to 39% and 58% respectively (up from 27% and 42% respectively, in 2022). This evidences the ongoing transformation of the Group into a large-scale global CDMO, with an increasing revenue share from commercial, including phase III, revenue, which was around 70% in 2023. 


The gross profit in 2023 was EUR 9.1 million (versus EUR 54.5 million in 2022) and EBITDA was EUR -6.0 million (EUR 38.7 million).

The significant drop in profitability was mainly attributable to the phase-out of the high-margin coronavirus-related business, the ongoing ramp-up of additional capacity, as well as the operational challenges that had become apparent towards the end of 2022, and which continued into 2023. Throughout the year, the Group implemented targeted measures for operational improvement, achieving increased profitability and cash flows in H2 2023. These measures included process optimizations related to production planning and execution, efforts to instill technical proficiency and best practice, as well as organizational changes. The Group also tightened its cost management and working capital discipline.

During 2023, the adverse impact on EBITDA from changes in the product mix was EUR 5.0 million, with the phase-out of the coronavirus-related business largely offset by benefits from the peptide-driven momentum. Operational costs increased by EUR 18.3 million, mainly reflecting the ongoing ramp-up for future growth combined with a temporarily lower utilization of assets, including the increase of average FTEs by 5.5%. Inventory write-downs were EUR 19.3 million higher, including a significant EUR 12.5 million write-down of obsolete inventory.

With the Group’s measures for operational improvement beginning to bear fruit, profitability in H2 2023 increased to a gross profit of EUR 19.8 million (versus EUR -10.6 million in H1 2023 and EUR 16.6 million in H2 2022) and EBITDA of EUR 13.4 million (EUR -19.4 million in H1 2023 and EUR 12.0 million in H2 2022).

During the reporting period, the Group also incurred impairment losses of tangible assets of EUR 2.7 million, reflected in the operating result (EBIT).The financial result for 2023 was EUR -21.8 million (versus EUR -5.0 million in 2022), driven by foreign currency exchange losses of EUR 14.5 million (EUR 1.6 million). The majority of these losses relate to the currency translation of an intra-Group receivable with an offsetting effect in other comprehensive income, resulting in a net impact on total equity of zero. Interest expenses amounted to EUR 5.6 million (EUR 2.1 million).

The 2023 result and deferred tax income resulted in an income tax benefit of EUR 6.8 million (EUR 0.2 million), bringing the result for the year to EUR -51.4 million (EUR 7.8 million).

Cash flow and cash position

During H2 2023, the Group significantly improved its cash position, benefiting from successful financing activities, working capital improvement initiatives and customer prepayments. The net cash flow from operating activities in H2 2023 totaled EUR 84.8 million versus EUR -48.3 million in H1 2023, with free cash flow in H2 2023 of EUR 59.4 million (H1 2023: EUR -79.7 million).

In 2023, net cash flows from operating activities reached EUR 36.5 million (2022: EUR 5.5 million). Within that amount, the net cash flow from changes in net working capital was EUR 46.2 million, including a EUR 38.8 million increase in contract liabilities and a EUR 15.5 million decrease in inventories.

This was partly offset by the EUR 29.9 million increase in trade receivables, reflecting the high share of revenue recognized towards the end of the reporting period, while trade payables increased by EUR 17.4 million.

With cash flows from acquisitions of property, plant and equipment as well as intangible assets of EUR -56.7 million (EUR -78.8 million), free cash flow totaled EUR -20.2 million (EUR -73.3 million).

Cash and cash equivalents reached EUR 95.7 million at the end of 2023 (versus EUR 37.5 million at the end of 2022 and EUR 9.0 million at the end of H1 2023). With total financial debt of EUR 124.8 million (H1 2023: 88.8 million), reflecting net proceeds of EUR 49.1 million from a three-year revolving credit facility (RCF) with a bank consortium and EUR 40.0 million from an unsecured short-term credit facility with the Group’s main shareholder, the net cash position was EUR -29.1 million (EUR -79.8 million), with an equity ratio of 55.3% (73.2%).


Between January 2021 and December 2023, PolyPeptide cumulatively deployed EUR 214.5 million in capital expenditure to upgrade and enhance its capabilities, together with an increase of its work force of 32.1% (based on average FTEs). The Group’s accelerated capital deployment strategy over recent years has been instrumental in meeting the increasing customer demand as well as enabling the peptide-driven momentum experienced in 2023.

Capital expenditure for 2023 reached EUR 54.9 million or 17.1% of revenue, versus EUR 83.0 million or 29.5% in 2022. The Group completed several investment projects at the manufacturing sites and brought additional capacity online. It largely completed the construction of its large-scale solid phase synthesis capacity in Braine-l’Alleud, with the commissioning ongoing and the revenue ramp-up expected to start during H2 2024. In addition, the Group continued its initiatives in digitalization, green chemistry and enhanced analytical capabilities.


PolyPeptide is dedicated to serving its customers with leading-edge capabilities in process development and manufacturing and to providing its services effectively, efficiently and responsibly. The Group’s innovation efforts, for which it maintains an intellectual property portfolio to not only protect and enhance its competitive position, but also to generate benefits for its customers and stakeholders, includes a green chemistry program, which it successfully advanced during 2023.

With the deployment of its proprietary washing by percolation concept, the Group’s overall solvent consumption relative to manufactured products declined in 2023 by 23.5% to 2.6 mt/kg (2022: 3.4 mt/kg). The green chemistry program is an integral part of PolyPeptide’s efforts to limit its climate impact, which also includes initiatives for increasing energy efficiency and the share of renewable, less greenhouse gas intensive energy in its energy mix.

As part of the Annual Report 2023, PolyPeptide published an enhanced Corporate Responsibility Report, with additional non-financial metrics. For more details, refer to the Corporate Responsibility Report.

Business trends

PolyPeptide views its active custom projects and commercial projects portfolio of peptide-based active pharmaceutical ingredients (API) and intermediates as industry leading. It produces about one third of all commercial therapeutic peptides, with a rich and diversified new chemical entity (NCE) development pipeline of over 250 peptides for therapeutics, vaccines or diagnostic applications, of which 55 for phase III of clinical development.

It sees itself as well positioned for growth with its portfolio of peptide-based therapies for metabolic disorders, including in particular the GLP-1 receptor agonist drugs for the treatment of type 2 diabetes, obesity and other co-morbidities.

Beyond metabolic disorders, PolyPeptide expects additional growth from its involvement in other therapeutic areas for peptide-based drugs, including oncology, hormonal disorders, neurology, ophthalmology as well as cardiovascular and gastrointestinal applications.

Through its multisite network in Europe, the U.S. and India, PolyPeptide advanced its partnerships in 2023 with large pharma customers for several of its phase II and phase III projects in the metabolic and rare disease markets.

Three large commercial agreements were concluded during the reporting period, complementing the commercial agreement announced in December 2022, providing PolyPeptide with the potential to double revenue.

The financing arrangements put in place in 2023, combined with the Group’s ability to secure prepayments, supports PolyPeptide’s growth ambitions.

Risk management

PolyPeptide is committed to continuously improving the management of risks and opportunities that might arise. Based on the annual risk assessment, the enterprise risk management (ERM) report provides a consistent, Group-wide perspective of key identified risks and was presented to and approved by the Board of Directors in September 2023. During the course of 2023, the Group performed several internal audits, partly with the support of external consultants. For more details on the Group’s ERM framework and Internal Audit, refer to the Corporate Governance Report.

Leadership changes

On 3 April 2023, the Group announced the appointment of Juan José González as its new CEO, effective 12 April 2023. With the completion of his introduction, Peter Wilden ended his temporary executive duties and continued as of 1 October 2023 in his role as Chairman of the Board of Directors.

On 15 August, the Group announced the appointment of Marc Augustin as its new CFO and member of the Executive Committee. He joined PolyPeptide on 1 January 2024, taking over from Lalit Ahluwalia who served as CFO for an interim period.

Guidance, outlook and dividend

In 2024, PolyPeptide’s priority will be to meet the increasing customer demand, continue to strengthen operations and profitability, while further expanding capacity related to the GLP-1 opportunity.

As it will take some time to increase capacity utilization, it expects revenue growth in 2024 mid to high single-digit at constant currency rates versus 2023 with a positive EBITDA, operating at a net loss. Capital expenditure is expected to be between EUR 60 million and EUR 70 million.

Driven by the increasing capacity utilization, the Group expects a significantly stronger H2 versus H1 2024. For H1 2024, it expects revenue comparable with H1 2023 with improved EBITDA and a reduced net loss.

PolyPeptide is currently preparing its mid-term outlook, which it plans to publish on 13 August 2024, together with results for H1 2024. Taking into consideration market practice and key performance drivers, it will also at that point revisit its approach to certain disclosures around the development of its business.

With the net loss reported for 2023, the Group will not be proposing the payment of a dividend to the upcoming Annual General Meeting on 10 April 2024.