1 Basis of preparation

These condensed consolidated financial statements are the unaudited, interim consolidated financial statements (hereafter “the Half-year Report”) of PolyPeptide Group AG and its subsidiaries for the six-month period ended 30 June 2025 (hereafter “the interim period”). The Half-year Report is prepared in accordance with the International Accounting Standard 34 – Interim Financial Reporting and thus does not include all of the information required for a complete set of IFRS financial statements. The Half-year Report should be read in conjunction with the consolidated financial statements for the year ended 31 December 2024 (hereafter “the Annual Report 2024”) as it provides an update of the previously reported information.

No new standards or amendments to existing standards with a material effect on the Group’s Half-year Report have become mandatorily effective for reporting periods beginning 1 January 2025. Thus, accounting policies adopted in the Half-year Report are consistent with those of the previous financial year.

The preparation of the Half-year Report requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and disclosure of contingent liabilities. If in the future such estimates and assumptions, which are based on management’s best judgment at the date of the Half-year Report, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the circumstances change.

There are a number of standards and interpretations that have been issued by the International Accounting Standards Board that are effective for periods beginning subsequent to 31 December 2025 (the date of the Group’s next annual consolidated financial statements) that the Group has decided not to adopt early. The Group does not believe these standards and interpretations will have a material impact on the recognition and measurements of financial items in the consolidated financial statements once adopted.

All amounts are stated in thousands of Euros, unless otherwise stated.

2 Segment information

PolyPeptide generates revenue that can be divided into the three business areas described in Note 4. The chief operating decision maker (i.e., the Executive Committee) reviews revenue generated within each business area but does not review results at this disaggregated level. The chief operating decision maker rather reviews the results of the Group as a whole to assess performance. As a result, the three business areas should not be considered three separate operating segments since only revenue information for each area is reviewed by the chief operating decision maker. Accordingly, there is only one operating segment according to IFRS 8 – Operating segments.

No segment information is thus required to be disclosed in the notes to the interim consolidated financial statements according to IAS 34 – Interim Financial Reporting.

3 Seasonality

The activities of PolyPeptide are not subject to seasonal or cyclical variations in the underlying business. However, PolyPeptide may experience variability in its revenue across periods as a result of, among other things, the timing of customer purchase orders and payments, investments made during the period, increased competition, the number of selling days in a period and fluctuation of foreign currency exchange rates.

4 Revenue

PolyPeptide generates revenue from the following three business areas:

Revenue by business area

Custom Projects business area specializes in the manufacturing of custom research-grade peptides and oligonucleotides, in milligram, gram or pilot scale quantities, at predefined purity levels for use in pre-clinical and clinical development as well as for regulatory and scientific studies. Custom Projects also provides cGMP manufacturing services during the later phases of development. Revenue is allocated to Custom Projects for sales of products in the pre-clinical through clinical stage development (i.e., prior to commercial launch) as generally set out in master service agreements and/or the accompanying work / purchase orders.

Contract Manufacturing business area manufactures peptides for commercial stage peptide therapeutics, at scale, in commercial batches and in accordance with cGMP requirements. The Group’s Contract Manufacturing services also include consultation for continuous improvement and process stabilization / optimization to support scale-up, process changes to support cost of goods sold enhancement, lifecycle management and extension as well as regulatory support. Revenue is allocated to Contract Manufacturing where production is related to the commercial supply of products, including the production of commercial generic products where the Group manufactures for the patent originator, as generally set out in master supply agreements and/or the accompanying work / purchase orders.

Generics and Cosmetics business area manufactures peptide-based generics for the human and veterinary market, produced on an industrial scale following cGMP guidelines. Generally, PolyPeptide’s generic products are off-patent and manufactured for numerous generic customers. The business area also includes revenue generated from the sale of peptides used in cosmetics, primarily for anti-aging applications. Revenue is allocated to Generics and Cosmetics for product sales to generics manufacturers and non-originators (i.e., not the original patent holder) as well as cosmetics sales, each as generally set out in nonproprietary master supply agreements and/or the accompanying work / purchase orders.

Revenue from contracts with customers

Revenue from Active Pharmaceutical Ingredients (API) fully relate to the sale of goods, and revenue from related services refer to the rendering of services. All revenues from contracts with customers classify as business-to-business.

Revenue by geographical area

Revenue is attributed to the individual geographical area based on the invoice address of the respective customer.

5 Significant events and transactions

There have been no significant events and transactions in H1 2025 and H1 2024 that require a separate explanation for the user of the financial statements to understand the changes in financial position and performance of the Group since the end of the last annual reporting period.

6 Share-based payment

The following equity-settled share-based payment arrangements are recognized in the interim consolidated financial statements:

Board of Directors

Members of the Board of Directors receive at least half of their fixed fees in shares, with the option to elect to be paid up to 100% of their fixed fee in shares. For Board members electing to receive more than 50% of their fixed fee in shares, the shares exceeding the 50% portion are granted at a discount of 20% to market price. The proportion between shares (in excess of 50%) and cash is selected by each Board member upon election at the annual general meeting and is fixed until the next annual general meeting. The Board of Directors is compensated on a pro-rata basis for the period of service, even in the case of early termination or removal.

In H1 2025, the fair value at grant date amounted to kEUR 795 (H1 2024: kEUR 785), reflecting a measurement based on a total number of shares of 51,895 (H1 2024: 25,796) and a price of EUR 15.30 per share as of 9 April 2025 (H1 2024: a price of EUR 30 per share as of 10 April 2024). All shares will be fully vested at the annual general meeting in April 2026. In H1 2025, a total amount of kEUR 488 (H1 2024: kEUR 488) was recognized as “General and administrative expenses” in the income statement according to the principles of graded vesting in IFRS 2.

Executive Committee and selected key employees

The Board of Directors has adopted a Long-Term Incentive Plan (“LTIP”) for Executive Committee members and selected key employees of the Group. Under this share-based incentive program, eligible participants are awarded the contingent right to receive a certain number of shares in the future (“PSU(s)”) in the Company, subject to, inter alia, continued employment and achievement of market as well as non-market performance targets. The actual number of PSUs that will eventually vest and be settled in shares depends on revenue, EBITDA, and Total Shareholder Return (“TSR”) performance of the Group over a three-year performance period.

• In H1 2024, 30 employees of the Group, including members of the Executive Committee, were granted PSUs in the Company. The total fair value at grant date amounted to kEUR 3,408. The fair value at grant date for the PSUs conditioned on revenue and EBITDA performance (i.e., non-market vesting conditions) amounted to kEUR 2,629, reflecting a measurement based on 81,640 number of PSUs potentially vesting and the share price of PolyPeptide Group AG as of the grant date of EUR 32, adjusted for a value cap of 500% at vesting. The impact of the value cap has been determined based on a Monte-Carlo simulation. The fair value at grant date for the PSUs conditioned on TSR performance amounted to kEUR 779, reflecting a measurement based on 17,499 number of PSUs and a fair value per PSU of EUR 45. The fair value per PSU is determined based on a Monte-Carlo simulation that also incorporates a value cap of 500% at vesting.

• In H2 2024, three employees of the Group were granted PSUs in the Company. The total fair value at grant date amounted to kEUR 38. The fair value at grant date for the PSUs conditioned on revenue and EBITDA performance (i.e., non-market vesting conditions) amounted to kEUR 30, reflecting a measurement based on 1,056 number of PSUs potentially vesting and the share price of PolyPeptide Group AG as of the grant date of EUR 28, adjusted for a value cap of 500% at vesting. The impact of the value cap has been determined based on a Monte-Carlo simulation. The fair value at grant date for the PSUs conditioned on TSR performance amounted to kEUR 8, reflecting a measurement based on 226 number of PSUs and a fair value per PSU of EUR 38. The fair value per PSU is determined based on a Monte-Carlo simulation that also incorporates a value cap of 500% at vesting.

• In H1 2025, 41 employees of the Group, including members of the Executive Committee, were granted PSUs in the Company. The total fair value at grant date amounted to kEUR 3,557.The fair value at grant date for the PSUs conditioned on revenue and EBITDA performance (i.e., non-market vesting conditions) amounted to kEUR 3,203, reflecting a measurement based on 154,364 number of PSUs potentially vesting and the share price of PolyPeptide Group AG as of the grant date of EUR 21, adjusted for a value cap of 500% at vesting. The impact of the value cap has been determined based on a Monte-Carlo simulation. The fair value at grant date for the PSUs conditioned on TSR performance amounted to kEUR 354, reflecting a measurement based on 33,076 number of PSUs and a fair value per PSU of EUR 11. The fair value per PSU is determined based on a Monte-Carlo simulation that also incorporates a value cap of 500% at vesting.

The participants are compensated for missed dividend payments during the vesting period if the PSUs vest. As a result, expected dividends during the vesting period have not impacted the fair value measurements of the grant.

An expense of kEUR 473 (H1 2024: kEUR 116) has been recognized in H1 2025 as “General and administrative expenses” in the income statement relating to these grants.

Chief Executive Officer

The CEO of the Group, Juan José González, is participating in the share-based incentive program described above. In addition to this, he was also granted PSUs on 6 September 2023 (“2023 CEO Grant”). The vesting of the PSUs for the 2023 CEO Grant depends on RONOA and EPS performance of the Group over a three-year performance period.

In accordance with IFRS 2, the maximum number of shares potentially vesting was used for the determination of the fair value of the grant. As a result, the fair value at grant date amounted to kEUR 1,135, reflecting a measurement based on 51,060 number of PSUs and the share price of PolyPeptide Group AG as of the grant date of EUR 23. The vesting period ends 10 trading days after the shareholders approve the 2025 audited consolidated financial statements.

The participant is compensated for missed dividend payments during the vesting period if the PSUs vest. As a result, expected dividends during the vesting period have not impacted the fair value measurement of the grant.

In H1 2025, no expense has been recognized in the income statement since it is expected that no PSUs from the CEO Grant will eventually vest. In H1 2024, an amount of kEUR 146 was recognized as “General and administrative expenses” in the income statement. This amount has been reversed in H2 2024.

7 Shareholders’ equity

Share capital

There have been no changes to the share capital of the parent company of the Group, PolyPeptide Group AG, during H1 2025. As a result, the share capital of PolyPeptide Group AG comprised 33,125,001 shares of CHF 0.01 each as at 30 June 2025. 

All shares are fully paid in.

Treasury shares

8 Investment in subsidiaries

The interim consolidated financial statements include the financial statements of the Company and the subsidiaries listed below. Percentage of voting shares is equal to percentage of ownership.

9 Related parties

The following transactions have been entered into with related parties:

In addition to the information shown in the table above, PolyPeptide Group AG has secured a subordinated credit facility from its main shareholder, Draupnir Holding B.V.
As a result, interest expenses in the amount of kEUR 787 have been incurred during H1 2025. As at 30 June 2025, an amount of kEUR 20,000 was drawn from the credit facility and is accordingly recognized in the consolidated statement of financial position as a non-current liability.

In addition to the information shown in the table above, PolyPeptide Group AG has secured a short-term credit facility from its main shareholder, Draupnir Holding B.V. As a result, interest expenses in the amount of kEUR 1,605 have been incurred during H1 2024. As at 30 June 2024, an amount of kEUR 40,000 was drawn from the credit facility and is accordingly recognized in the consolidated statement of financial position as a current liability.

All disclosed related parties are either related through the Esperante Investments S.à r.l. ownership structure or through managerial control. Esperante Investments S.à r.l. is a higher parent company of the majority shareholder Draupnir Holding B.V.

Purchases from and amounts due to Thalamus AB relate to rental of premises. Income from and amounts due from the Ferring Group relate to sale of goods.

Purchases from Monedula AB relate to the lease of premises. Income and amounts due from Monedula relate to property management fees and recharged improvements to the premises. Amounts due to Monedula AB relate to the financial liability recognized for the lease of premises.

Income from and amounts due from SVAR Life Science AB relates to sale of goods. Purchases from and amounts due to Limhamn Kajan 37 AB relate to rental of premises.

During H1 2025, no provisions for doubtful debt and no write-offs on receivables from related parties were recognized (H1 2024: nil). No guarantees were given or received for any outstanding related party balances (H1 2024: nil).

10 Interest-bearing loans and borrowings

As at the reporting date, the Company had in place a revolving credit facility agreement provided by UBS Switzerland AG, Zürcher Kantonalbank and Danske Bank (the “RCF”). During H1 2025, the Company amended and restated the RCF, increasing the capital commitments from EUR 111 million to EUR 151 million and extending the term to March 2028.

The RCF includes a financial covenant. For each period of twelve months ending on 30 June or 31 December in any year, the Group must comply with a predetermined financial ratio that is based on debt and earnings.

One of the lenders participating in the RCF has issued a bank guarantee in the amount of EUR 10 million in favor of one of the Group’s customers in relation to amounts received for (i) manufacturing capacity reservations and (ii) raw material prepayments. The amount of the bank guarantee has reduced the available drawings under the RCF accordingly.

The interest rate on the RCF amounted to EURIBOR plus an average margin of 2.60% in H1 2025 per annum (H1 2024: 3.40% per annum). As at 30 June 2025, an amount of kEUR 60,000 was drawn from the RCF (31 December 2024: kEUR 40,000).

As at the reporting date, the Company also had in place a subordinated credit facility with its main shareholder, Draupnir Holding B.V., in the amount of EUR 20 million, which was fully drawn as at 30 June 2025 (31 December 2024: kEUR 30,000) (the “Draupnir Facility”). During H1 2025, the Company amended and restated the Draupnir Facility extending the term to May 2027. The interest rate on the Draupnir Facility amounts to three-month EURIBOR plus a margin between 2.65% and 3.95% (H1 2024: 2.9% and 4.2%) per annum on the amounts drawn.

As at 30 June 2025, an amount of kEUR 1,200 was granted by ING Bank (31 December 2024: kEUR 1,200), of which nil was drawn (31 December 2024: nil). In H1 2025 and H1 2024, the interest rate on the ING Bank credit facility amounted to 1-month EURIBOR plus a margin of 1.2% on the amounts drawn, and a facility fee of 0.30% on the total facility amount.

11 Subsequent events

There have been no significant events subsequent to the end of the reporting period that would require additional disclosures in the interim consolidated financial statements.

The interim consolidated financial statements were approved for issue by the Board of Directors on 8 August 2025.