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NASDAQ:ACET
ACETO Corporation
Jefferies Healthcare Conference
June 8, 2016
Sourcing & Supplying Quality Products Worldwide
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This presentation contains forward-looking statements, as defined by
the Private Securities Litigation Reform Act of 1995, that can be
identified by words such as believes, expects, anticipates,
plans, projects, seeks and similar expressions and involve
numerous risks and uncertainties. The Companys actual results
could differ materially from those anticipated or implied in such
forward-looking statements as a result of certain factors, as set forth in
the Companys filings with the Securities and Exchange Commission.
Disclosure
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Company Overview
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Human Health
Finished Dosage Form Generics
Nutritionals: supply app. 250 popular dietary supplements
Pharma Ingredients
Active Pharmaceutical Ingredients
Pharmaceutical Intermediates
Performance Chem.
Specialty Chemicals
Agricultural Protection Products
Transforming Towards Pharmaceuticals
SOURCING
REGULATORY SUPPORT
QUALITY ASSURANCE
Focus on niche products
Consultative selling
Highly skilled, technically trained sales force
Partnership model
Global reach
Intl technical network
Regional managers in US, Europe & Asia
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Mix Shifting Toward Human Health Oriented Businesses
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14%
39%
47%
FY 2010
41%
27%
32%
FY 2015
14%
41%
45%
FY 2010
56%20%
24%
FY 2015
$547.0 Million
Net Sales- 10% CAGR
$135.4 Million(Gross Margin- 24.8%)
$346.6 Million $54.2 Million(Gross Margin- 15.6%)
Gross Profit- 20% CAGR
Date EventDec. '10 Acquired Rising PharmaceuticalMay '12 New logo and renamed business segmentsMar. '14 Acquired Pack PharmaceuticalsSept. '14 Acquired three ANDAs from Par utilizing softgel technologyDec. '14 SIC code changed to 5122- Wholesale- Drugs, Proprietaries and Druggists SundriesFeb. '15 GICS code changed to 35102010 (Health Care - Health Care Distributors)Sept. '15 Acquired 3 Opthalmic ANDAs from NEXUS PharmaceuticalsSept. '15 Acquired 3 ANDAs from ENDO International via FTC process
Timeline of Transformation Toward Human Health Oriented Business
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Timeline of Transformation Toward Human Health Oriented Business
DateEvent
Dec. '10Acquired Rising Pharmaceutical
May '12New logo and renamed business segments
Mar. '14Acquired Pack Pharmaceuticals
Sept. '14Acquired three ANDAs from Par utilizing softgel technology
Dec. '14SIC code changed to 5122- Wholesale- Drugs, Proprietaries and Druggists Sundries
Feb. '15GICS code changed to 35102010 (Health Care - Health Care Distributors)
Sept. '15Acquired 3 Opthalmic ANDAs from NEXUS Pharmaceuticals
Sept. '15Acquired 3 ANDAs from ENDO International via FTC process
Legend for Chart
Aceto Corp. & Subsidiaries
Segment Reporting for Budget 2015
Revised: 11-June-2014
Net SalesFY2016 Sales Budget
Human Health234,846129%
Pharmaceutical Ingredients146,99181%
Performance Chemicals182,021100%
Corporate(2,948)
Total179,073
Gross ProfitFY2016 Gross Profit Budget
Performance Chemicals33,97723%
Human Health88,70160%
Pharmaceutical Ingredients25,76417%
Corporate(2,666)
Total145,775
MNIFY2016 MNI Budget
Performance Chemicals15,34623%
Human Health43,39664%
Pharmaceutical Ingredients8,73013%
Corporate(11,455)
Total56,017
FY2016 Sales Budget
Human HealthPharmaceutical IngredientsPerformance Chemicals234845.67499999999146991.17000000001182021.46900000001FY2016 MNI Budget
Pharmaceutical Ingredients24%
Performance ChemicalsHuman HealthPharmaceutical Ingredients15345.93399999999943395.8928730.0550000000003FY2016 Gross Profit Budget
Performance ChemicalsHuman HealthPharmaceutical Ingredients33976.93400000000188700.75800000000225764.034FY2016 Sales Budget
Human HealthPharmaceutical IngredientsPerformance Chemicals234845.67499999999146991.17000000001182021.46900000001FY2016 MNI Budget
Pharmaceutical Ingredients24%
Performance ChemicalsHuman HealthPharmaceutical Ingredients15345.93399999999943395.8928730.0550000000003FY2016 Gross Profit Budget
Performance ChemicalsHuman HealthPharmaceutical Ingredients33976.93400000000188700.75800000000225764.034FY2016 Sales Budget
Human HealthPharmaceutical IngredientsPerformance Chemicals234845.67499999999146991.17000000001182021.46900000001FY2016 MNI Budget
Pharmaceutical Ingredients24%
Performance ChemicalsHuman HealthPharmaceutical Ingredients15345.93399999999943395.8928730.0550000000003FY2016 Gross Profit Budget
Performance ChemicalsHuman HealthPharmaceutical Ingredients33976.93400000000188700.75800000000225764.034
Sheet2
Sheet3
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Investment Highlights
Strategically positioned for growth through geographic expansion, new product offerings and bolt-on acquisitions
Primary focus on human health products
Rising Pharmaceuticals is a platform for higher margin finished dosage form generics
Improving product mix drives margin expansionAsset-light business model generates strong free cash flowStrong financial position supports growth initiativesExperienced executive management teamTrack record of 50 consecutive years of dividend payments, providing return to shareholders
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Human Health
Product GroupsFinished dosage form generic drugs (Rising Pharmaceuticals)
60+ commercial products100+ pipeline products
NutritionalsNutraceutical ingredientsPackaged dietary supplements
Growth StrategyExpand portfolio of high margin finished dosage form generic products
Globalize and expand nutraceutical ingredients
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Rising Pharmaceuticals
Platform for growth as developer and marketer with established generics brand
Strong brand recognition of Rising label among pharmacists and pharmaceutical product buyers
Long-standing commitment to quality, service, supply and integrity
Strategically utilizes partnership model Product development programs ANDA acquisitions Paragraph IV product partnerships Authorized generic marketer Licensing opportunities on late stage product assets
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Rising Drug Development Pipeline
*Does not include the 7 products on this chart launched in FY2016.
Approved / Pending Launch
46 Products
Product Development
Biostudies Underway
Filed with FDA
3 Products
49 ANDAs
9 ANDAs
7 ANDAs
Launched
107* Pipeline Projects
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Aging of Filed ANDAs
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Value* of Filed ANDAs
*Value is based on total market, including brand & generic where applicable, using recent IMS sales data
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Broad Based Nutritional Products Offered on Global Basis
Supply approximately 250 popular dietary supplements:
Amino AcidsQuercetinCoenzyme Q10LactoferrinChondroitin SulfateFish Oil/Omega 3Vitamins
55%40%
5%
Fiscal 2015 Sales
United StatesEU
Asia
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Human Health Customers (representative)
https://healthy.kaiserpermanente.org/html/kaiser/index.shtmlhttp://corporate.publix.com/http://www.aznutritional.com/http://www.nbty.com/Home/
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Pharmaceutical Ingredients
Product Groups Active Pharmaceutical Ingredients (APIs) - bulk ingredients which impart
therapeutic value to the drug
Pharmaceutical intermediates building block chemicals used in the manufacturing of APIs
Growth Strategy Focus on niche, small/mid-size products with a limited number of
competitors
Serve as second source for branded drugs and generics
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Pharmaceutical Ingredients Customers (representative)
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Performance Chemicals
Product Groups Specialty Chemicals - for coatings, inks, plastics, food, electronics, agricultural
intermediates & other industrial applications
Agricultural Protection Products - fungicides, insecticides and sprout inhibitors
Growth Strategy Globalization of product offering Creation of new product opportunities through new suppliers Developing new products for existing customers Continue to seek new generic Ag registrations
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Performance Chemicals Customers (representative)
http://www2.dupont.com/DuPont_Home/en_US/index.htmlhttp://www.kodak.com/http://www.anheuser-busch.com/index.htmlhttp://solutions.3m.com/wps/portal/3M/en_WW/Worldwide/WW/http://www.sunchemical.com/http://www.valsparpaint.com/en/index.htmlhttp://www.unitedsuppliers.com/Home/tabid/1359/Default.aspxhttp://allnex.com/
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Value Proposition to Customers
Core business competencies serve as sales and marketing drivers: Sourcing Regulatory Support Quality Assurance
Highly skilled, technically trained business development/sales force: >265 employees worldwide Well versed in science, regulations, chemistry and assessing customer and
marketing needs to develop opportunities
Function as virtual manufacturing company Match customers with fully vetted suppliers
Relieves customer of logistical concerns; ensures that products meet regulatory requirements
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Worldwide Presence
USACorporate HQNew York
NETHERLANDS
FRANCE
GERMANY
CHINA
SINGAPORE
INDIA
JAPAN
UNITED KINGDOM
PHILIPPINES
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Global Sourcing
China: Predominately source specialty
chemicals, agricultural protection products and intermediates
23 local professionals India:
Predominately source active ingredients and nutritionals
12 local professionals North America:
Predominately source finished dosage form generics
65%
12%
17%
6%
Fiscal 2015
Other
North America
Europe
Asia
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Support: Technical & Regulatory withemphasis on Quality Assurance
KEY differentiator between Aceto and other distribution companies
International Technical Network with regional managers in U.S., Europe and Asia
International Regulatory Support
Provides substantial global assistance as required
Enables manufacturers to bring products to market in conformance with regulations that they might not otherwise accomplish on their own
Worldwide Quality Assurance ensures that product quality meets both the customers specifications and intended use
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Strong Financial Position Provides Financial Flexibility
Financial position at March 31, 2016: Cash, cash equivalents and short-term investments of $56 million
Convertible debt of $114 million
Other bank debt of $3 million
Working capital of $241 million
Shareholders equity of $299 million
Strong cash flow affords an expected $0.24 per share annual dividend rate
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Strong Track Record of Growth
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$346.6
$412.4$444.4
$499.7 $510.2$547.0
$0
$100
$200
$300
$400
$500
FY '10 FY '11 FY '12 FY '13 FY '14 FY '15
CAGR 10%
Net Sales
$0.44
$0.58
$0.78
$1.01
$1.22
$1.33
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
FY '10 FY '11 FY '12 FY '13 FY '14 FY '15
CAGR 25%
EPS (non-GAAP)($ in millions)
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Expanding EBITDA & EBITDA Margin (non-GAAP)
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0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
$0
$10
$20
$30
$40
$50
$60
$70
$80
FY '10 FY '11 FY '12 FY '13 FY '14 FY '15
EBITDA EBITDA Margins
EBITDA($ in millions)
EBITDA Margin
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Investment Highlights
Strategically positioned for growth through geographic expansion, new product offerings and bolt-on acquisitions
Primary focus on human health products
Rising Pharmaceuticals is a platform for higher margin finished dosage form generics
Improving product mix drives margin expansionAsset-light business model generates strong free cash flowStrong financial position supports growth initiativesExperienced executive management teamTrack record of 50 consecutive years of dividend payments, providing return to shareholders
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For additional information please contact:Jody BurfeningLHA Investor Relations800 3rd Avenue, 17th Fl.New York, NY 10022Tel: [email protected]
NASDAQ:ACET
Sourcing & Supplying Quality Products Worldwide
Global Leader in the Marketing and Distribution of Pharmaceutical Intermediates & Active Ingredients, Finished Dosage Form Generics, Nutraceutical Products, Agricultural
Protection Products, and Specialty Chemicals
mailto:[email protected]
Slide Number 1Slide Number 2Company OverviewMix Shifting Toward Human Health Oriented Businesses Investment HighlightsHuman HealthRising Pharmaceuticals Slide Number 8Aging of Filed ANDAsValue* of Filed ANDAsBroad Based Nutritional Products Offered on Global BasisHuman Health Customers (representative)Pharmaceutical IngredientsPharmaceutical Ingredients Customers (representative)Performance ChemicalsPerformance Chemicals Customers (representative)Value Proposition to CustomersWorldwide PresenceGlobal SourcingSupport: Technical & Regulatory with emphasis on Quality AssuranceStrong Financial Position Provides Financial FlexibilityStrong Track Record of GrowthExpanding EBITDA & EBITDA Margin (non-GAAP)Investment HighlightsSlide Number 25