Business Review

Transformation driving rapid expansion and profitability decline

Revenue and custom projects

In H1 2023, PolyPeptide generated EUR 131.8 million in revenue, representing a 1.4% decline versus H1 2022 and 2.9% growth at constant currency rates. Excluding the contribution of revenue associated with the coronavirus pandemic, amounting to EUR 1.5 million in H1 2023 versus EUR 32.8 million in H1 2022, revenue grew by 29.3%, exhibiting strong peptide-driven momentum on the back of robust market trends.

Revenue in Custom Projects declined by 18.0% and increased by 17.1% in Contract Manufacturing. Excluding revenue associated with the coronavirus pandemic, revenue increased by 23.9% and by 37.1%, respectively. Revenue in Generics & Cosmetics, where no impact from the coronavirus pandemic was recorded, increased by 23.4%, reflecting the Group’s sustained efforts to grow the generics portfolio.


H1 2023

H1 2022






Revenue reported




Custom Projects




Contract Manufacturing




Generics & Cosmetics




Revenue not associated with the coronavirus pandemic




Custom Projects




Contract Manufacturing




Generics & Cosmetics




The custom projects pipeline of the Group comprised 226 active projects as at 30 June 2023 (versus 220 projects at the end of 2022), of which around half relate to the fast-growing therapeutic areas of metabolic disorders and oncology. During the reporting period, the Group secured a total of 17 new peptide and oligonucleotide projects, of which 6 are with new customers. The number of projects in phase III of clinical development increased from 30 to 31.


The gross profit for H1 2023 amounted to EUR -10.6 million (versus EUR 37.8 million in H1 2022) and EBITDA was EUR -19.4 million (EUR 26.7 million), with more than half of the decline related to changes in cost absorption and a one-off inventory write-down. The result for the period was EUR -34.3 million (EUR 10.2 million).

At the level of EBITDA, the decrease in profitability was driven by the cumulative effect of several factors. The adverse impact from the change in cost absorption between H1 2023 and H1 2022 was EUR -15.2 million, and the one-off write-down of inventory after a technical and commercial reassessment amounted to EUR -9.5 million. Higher operational and maintenance costs reached EUR -9.6 million, driven by lower manufacturing yields and costs ahead of growth planned for H2 2023. Changes in product mix, mostly related to the phase out of the business associated with the coronavirus pandemic, amounted to EUR -7.8 million and higher personnel expenses to EUR -4.0 million.

During the reporting period, the Group also incurred impairment losses of tangible assets of EUR 2.0 million, reflected in the operating result (EBIT). The financial result of EUR -4.8 million was offset by an income tax benefit of EUR 5.0 million.

Cash flow and cash position

Capital expenditures for H1 2023 reached EUR 19.3 million or 14.7% of revenue, versus EUR 37.9 million or 28.4% in H1 2022, driven by the efforts to further grow capacity at the main manufacturing sites. In addition, the Group continued its initiatives in digitalization, green chemistry and enhanced analytical capabilities.

Net cash flows from operating activities during H1 2023 reached EUR -48.3 million. Within that, the net cash flow from changes in net working capital was EUR -23.4 million, including a EUR -22.1 million contribution from the increase of trade receivables, reflecting that more than half of revenue in H1 2023 was recognized toward the end of the reporting period. Changes in inventories had an effect of EUR -6.7 million, where the reduction in work in progress and finished goods was more than offset by an increase in raw materials ahead of growth expected for H2 2023. With cash flows from acquisitions of property, plant and equipment as well as intangible assets of EUR -31.4 million, the free cash flow added up to EUR -79.7 million.

Cash and cash equivalents reached EUR 9.0 million at the end of H1 2023 (versus EUR 37.5 million at the end of 2022), with proceeds from short-term borrowings from banks of EUR 55.2 million. Including a total financial debt of EUR 88.8 million, the net cash position was EUR -79.8 million, with an equity ratio of 65.2%. 

Strategic and operational progress

PolyPeptide views its pipeline of active custom projects to be industry-leading and sees itself well positioned for growth. During the course of H1 2023, the Group continued to upgrade its infrastructure and capabilities to meet the increasing volume requirements of its customers. As such, between January 2021 and the middle of 2023, PolyPeptide cumulatively deployed EUR 179.0 million of capital expenditures and increased its work force by 28.7% (based on average FTEs).

The Group’s capacity expansion was instrumental in fostering the strong peptide-driven momentum experienced in H1 2023, yielding a notable shift in the revenue mix. Driven by progress in late-stage phase III clinical development projects, the revenue share related to metabolic diseases increased to 43% as at 30 June 2023 from 28% as at 30 June 2022, and the revenue share of large pharma customers surged to 65% as at 30 June 2023 from 41% as at 30 June 2022.

PolyPeptide progressed its operational improvement initiatives in H1 2023 to offset the adverse profitability impacts from its challenges experienced during the Group’s expansion. These included measures to instill technical proficiency and best practice, process improvements to optimize production scheduling and execution as well as efforts to tighten cost management and working capital discipline.

As part of its ongoing transformation, the Group maintained its innovation efforts, continuously working toward higher standardization of processes to increase operational flexibility and resilience within its multi-site manufacturing network. Moreover, PolyPeptide advanced its partnerships in the metabolic and rare disease markets and continued to review its pricing methodology.

Leadership changes

Following the appointment of Jens Fricke as the new Global Director Operations and member of the Executive Committee in December 2022, PolyPeptide started in H1 2023 the implementation of several organizational changes relating to Global Operations.

In January 2023, the Group had announced the decision of Raymond De Vré to step down as CEO and of Peter Wilden, Chairman of the Board of Directors, to assume the role of Executive Chairman for an interim period until a new CEO was in place. On 3 April, the Group announced the appointment of Juan-José Gonzalez as its new CEO, effective 12 April 2023. With the completion of his introduction, Peter Wilden will step down from his executive duties and continue 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 joins PolyPeptide during the course of Q1 2024 from Lonza AG, Basel, Switzerland, where he has served since 2016 with growing responsibilities in the CDMO business, including as Vice President Finance and most recently as Global Head Sales Excellence for the Lonza Biologic Division. He will take over from Lalit Ahluwalia who, after an adequate introduction period, will retire from his interim CFO role.

Guidance for 2023

The Group has updated its guidance for 2023. PolyPeptide's overarching priority is to fulfill customers' demand and continue to grow, while implementing the operational and profitability improvement initiatives.

The Group now aims for mid to high single-digit percentage revenue growth versus 2022. At the lower end of that range, the Group expects EBITDA to be around break-even, excluding the EUR 9.5 million write-down of inventory in H1 2023. As previously announced, the Group will end 2023 with a net loss. Capital expenditures are expected in the range of EUR 55 to EUR 65 million, subject to ongoing partnership discussions with customers.

This updates the Group’s previous guidance of high single-digit revenue growth, adjusted EBITDA margin in the mid-teens and capital expenditures of around 10% of revenue for 2023.

At the beginning of July 2023, the Group secured a short-term credit-facility from its main shareholder, Draupnir Holding B.V., in the amount of EUR 40 million, which together with its existing credit facilities will continue to support the Group’s growth ambitions. In the meantime, the Group continues its negotiations to implement a new long-term financing plan.

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