Hello, and welcome to the EUROAPI conference call. My name is Melissa, and I will be your coordinator for today's event. Please note, this conference is being recorded, and for the duration of the call, your lines will be in a listen-only mode. However, you will have the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you'll be connected to an operator. I will now turn you over to your host, Sophie Palliez, Head of Investor Relations. Please go ahead. Thank you, and thank you all of you for joining us. Today with me are Karl Rotthier, EUROAPI Chief Executive Officer, and Antoine Delcour, EUROAPI Chief Financial Officer. As just mentioned, this conference call will be recorded, and a replay will be available on our website. We will start by a very short introduction from Karl and then open for a Q&A session. I would like to hand it over to Karl. Thank you. Thank you very much, Sophie. So good evening, everybody, and thank you for joining us on this call on such a short notice. Our goal today is first and foremost to answer your questions following the press release we just issued. However, I would like to introduce this call with a short summary. As mentioned, the board of directors met today to review the full year 2023 result forecast. The forecast show a lower than anticipated top-line growth for the balance of the year, impacting our objectives for the full year, so hence leading us to revise downward guidance. Net sales are now expected to grow between 3% and 5% compared to the 7%-8% previously. The Core EBITDA margin is now expected to stand between 9% and 11%, compared to 12.5%-13.5% previously. The CapEx guidance remains unchanged between EUR 120 million and EUR 130 million. The slowdown of the full year 2023 net sales growth is driven by both API Solutions and CDMO activities, but yet of different reasons. For API Solutions, our price optimization strategy has recently been impaired by a change in the market environment. In fact, we see now more pricing pressure resulting from lower overall inflation, as well as inventory reduction programs implemented by some of our customers, also called destocking. For CDMO activities, net sales are expected to grow at a slower pace than anticipated, due to weaker sales recognition than expected in Q4. As mentioned already in earlier calls, we are impacted by the biotech funding crisis, which accelerated during the last couple of months. In 2023, the revenue of more than 20 projects has been delayed, which means a delay of start of activities, a reduced scope of activity, or a stop of programs. This slower than expected top-line growth impacts also our Core EBITDA margin, with less favorable fixed cost absorption than initially anticipated, and an unfavorable margin mix for the balance of the year, resulting from the slowdown of the CDMO business. While It is yet too early to comment on the full P&L and free cash flow, but however, let me emphasize that this guidance revision does not at all impact the company's financing capabilities in the short term. Based on these new and revised targets, we have decided to conduct a thorough strategic review of our operating model and to suspend our midterm objectives and guidance. We intend to provide information on the outcome of the review on the twenty-ninth of February, at the latest. This was my short introduction, Antoine and myself are now happy to take whatever question that you might have. Please feel free, operator, to ask for the questions. Thank you. As a reminder, if you'd like to ask a question on today's call, please press star one on your telephone keypad. We do have a few questions coming through. Our first question is from Zain Ebrahim of J.P. Morgan. Please go ahead. Hi there, Zain Ebrahim, J.P. Morgan. Thank you for taking my questions. I've just got- Hi, Zane A few questions, if I may. My first question would just be on revenues and the guidance cut there for 2023. How should we think about how much of that guidance cut is sort of due to the weakness you've seen in API solutions, versus the changing environment you've seen in CDMO? And maybe if you could elaborate on the CDMO weakness that you've seen, with the biotech customers in particular. How much visibility do you have on these customers? And based on the contract wins you've had previously, and visibility now, how much visibility do you have over 2024 revenues, for biotech customers? Would be my first question. My second question would just be on the core EBITDA margin guidance, which is you've now gone to 200 basis points wide at 9%-11%. Just wanted to understand what the differences between the top end and the bottom end, and I think the exit rate implied is maybe a high single-digit margin for the second half. Is that the sort of margin we could think about as a starting point for 2024? What are the moving parts we should think about for 2024? Okay, Zane, thank you. Thank you very much for your questions. I will let Antoine in a second come back to the Core EBITDA question and the range of 9%-11%. Your question first on the API Solutions, the revenue for 2023. So what we see indeed, and don't forget that we come out of an entire situation where we almost one and a half years ago were confronted with an energy and raw material price increase, which we were able to pass through to third parties and partially pass through to Sanofi. We made that very clear in earlier calls. Now, we see also, and that is very recent, that the market is changing in this environment, leading to a lot of customers who are now destocking and off taking lesser volume, which leads them indeed to price decreases as well. That we see indeed with some customers coming on in the API Solutions, which of course has a higher turnover than the CDMO projects that we were referring to, because these were primarily projects coming from preclinical phase I or phase II, which are traditionally at a lower pace than the API Solutions business that we have. For 2024, that is too early to tell, because that's why actually we are initiating this strategic review. We really want to make crystal clear whether the changing market trends that we currently see is there to stay, is there going to continue? How long will it continue? And then in the end, based on these different scenarios that we are going to have developed, what is then the right adaptation for the company and its organization. So that's why it is now a little bit too early to talk about 2024 revenues of biotech companies and the funding issues. We really want to have an in-depth analysis and a strategic review then on how long will it last, and what do we need to do to adapt? Core EBITDA range from 9%-11%, Antoine. As explained earlier by Karl, what drove this change in core EBITDA guidance for the end of this year was price pressure coming from the market on API Solutions, plus a negative mix with lower contribution of CDMO activity, and also the timing of the year, which didn't give enough time for us to adjust, I would say, our cost baseline accordingly, and which impacted also cost absorption. It doesn't mean that this will be the flow for the upcoming years. It's still work in progress. It will depend also on the mix of the sales we'll have in H1 and for next year. We'll communicate to you what would be our guidance as early as possible. Great. Thank you. That's clear. Thanks, Zane. Thank you. Our next question comes from Gary Sventek of BNP Paribas. Please go ahead. Hi, Gary. Hi there. Thanks for taking the questions. So firstly, just on the revised top line outlook, just conscious that most of what you manufacture probably has lead times in excess of a few weeks. So now we're in October, I guess you should have good visibility on the sales you expect to book for 2023. So given you've still got that 2 percentage point range on the sales outlook, can you just help us understand kind of where you still see risks which could impact where you end up within that range? And then secondly, you suspended the mid-term outlook, and there'll be the strategic review to adapt the operating model. So what does that mean for the ongoing capacity expansion projects you have, and particularly the peptide and oligo capacity in Frankfurt that was due to come online in 2025? Is that something you still remain committed to and have confidence there'll be demand for, when that comes online? Thank you. Let's start with the second question. Yes, we are indeed fully committed to that. This, of course, did not change at all. The lead time 3%-5%, or the growth of 3%-5%, what we also currently saw, and we have already some initial vision on that, is that the market growth in the API business, where we are active in our portfolio, is indeed only growing at a 3%-4% range right now. Which we, in the beginning, did not see, but now it's becoming clearer because of these market circumstances that changed, coming out of a period where the focus was fully on the price increase. Hence, we are indeed here, more conservative on also our prediction of growth for the portfolio of 3%-5% going forward as well. What I would say to answer, to complete Antoine speaking about your question, I guess for the products you are producing, we have good visibility on PO and delivery time. But as we mentioned, on the CDMO part of the business, because of the financing of the biotech, we see some delay of start of activities and so on, which could impact our capacity to deliver on top line growth. And this is the reason why we kept the range 3%-5%, as well as the reason, in order to be also cautious, on this aspect. Thanks. That's clear. Could I just follow up as well? The strategic review, would that include perhaps any kind of potential for sale or new ownership? That is, at this point in time, certainly not the scope of the strategic review that we initiated now with the board. As I mentioned, we want to have a clear and in-depth analysis of what we estimate of being the current market and market growth. Is that correct? And then adapt the organization according to these new insights. But, no, new ownership or something, Gary, that has never, ever been discussed. Let me be very clear on that. Clear. Thank you. Thank you. Our next question comes from James Quigley of Morgan Stanley. Please go ahead. Hi there. Thanks for taking my questions. Just a couple from me. So within the API Solutions business, are there any particular products or product families or areas that are seeing more destocking than others? And again, is this—it is purely due to the biotech funding. You mentioned the price focus and the inflation focus in the last couple of years, but from a volume perspective, how is that moving? And can you give us a bit of an idea of how the destocking will progress? And secondly, on visibility, so we've seen a number of profit warnings across the CDMO sector this year, but how would you sort of classify your visibility in terms of months currently? How has that changed with respect to some of the factors that have led to your guidance cut? Finally, thinking about the midterm, obviously, you've withdrawn the guidance, but to what extent are these short-term pressures impacting some of your long-term features? T he increasing penetration in the CDMO market, moving to more complex molecules in terms of your favorable mix. Obviously, you've withdrawn that, but to what extent are the near-term impacting that long-term? Thank you. Okay. Thank you very much, James. On your first question, where do we see in the API Solutions business, eventually more of the pressure coming? That is indeed in those molecules, and we identified it also clearly when we mentioned 65% of our portfolio is highly differentiated and 45% is lesser differentiated, but still differentiated. We see that in the portfolio where you have higher volumes, and you have a little bit more competition coming from both European companies and also from Indian companies. We do not see that really in our, let's say, prostaglandin business or in our highly differentiated high potency API business. It is more the genericized higher volume business where you see this coming up. On the visibility for the CDMO part, did that change? Well, no, it did not change. What we saw currently in the market is indeed some projects which we mentioned, stopped or delayed because of these issues. That's why we also initiated primarily the strategic review, to also in-depth review, okay, what is this? Do we need to now really have another path of going into the CDMO? Because we still are more focused there on the highly complex to make molecules, both in the preclinical phase one and phase two. So that also did not change. The midterm guidance, it is now suspended, and I can only repeat myself, James. We need to have this in-depth strategic review in order to come with a new guidance for 2024, 2025, and 2026. Okay? Got it. Thank you. Thank you very much. Thank you. As a reminder, if you'd like to ask a question on today's call, please press star one on your telephone keypad. Our next question comes from Vasiliki Kolovou of Berenberg. Please go ahead. Hi there. The first question is, why did this profit warning happen so late in the year? Like, you didn't have visibility early on. Why did you wait until October? And the second one is, why should you do another strategic review, since when you had the first profit warning, you disclosed that you have reviewed your base, your cost base, and in general, your profitability and your targets, and why should you suspend your midterm targets? Thank you. Thank you very much. So why now? I think a very obvious question and a very, important one. We saw this indeed now coming up since last week. Since last week, we had actually our, like, every other company, start of the budget reviews, but also, the predictions of volumes coming for the rest of this year, primarily, and then also the indications, of the other years to come. In that aspect, we indeed saw only last week for, okay, the business of this year in API Solutions and CDMO might be lower than what we expected. And that's actually also the first time that we saw that the market circumstances are switching or changing. Because up till now, the price increase strategy and the push in API Solutions, but also the project that, and the RFP that we have gained in, in the CDMO part, were, as we always explain to you, we pushed it on the price to third parties, partially to Sanofi, because of the partial raw material pass-through and half of the energy. And here, for the first time, we saw actually the destocking effect coming of our customers, who are indeed now not accepting the higher price anymore in the market as well. So that is actually the reason why we only come now with this news, because at a certain point in time, you need to of course prepare for the later months. Like all the other companies, we have three rolling annual forecast exercises per year, and this one was the rolling forecast three that we did. The strategic review that we announced is then fitting in this plan, because what we announced in March was still all based on higher prices and also the increased volumes coming from the market, together with the increased CDMO activity as well. So that is why, again, we are investigating in depth, is the market trend that we currently see, is that here to stay? Yes or no. In the meantime, we are fully transparent, and it will have an effect on what we expect from top line and bottom line this year. Thank you. Thank you. As we have no further questions, I'd like to turn it back over to your host for any closing comments. Well, I think, unless you have other questions, many, many thanks for being available, having been available on such short notice. I look forward to speak with you very soon again. Thank you very much. Thank you. That concludes today's conference. You may now disconnect.