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NASDAQ:ACET ACETO Corporation Jefferies Healthcare Conference June 8, 2016 “Sourcing & Supplying Quality Products Worldwide”

ACETO Corporation - Jefferies · ACETO Corporation Jefferies Healthcare ... May '12 New logo and renamed business segments ... Dosage Form Generics, Nutraceutical Products, Agricultural

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  • NASDAQ:ACET

    ACETO Corporation

    Jefferies Healthcare Conference

    June 8, 2016

    Sourcing & Supplying Quality Products Worldwide

  • 2

    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

  • Company Overview

    3

    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

  • Mix Shifting Toward Human Health Oriented Businesses

    4

    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

    Sheet1

    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

  • 5

    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

  • 6

    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

  • 7

    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

  • 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

    8

  • 9

    Aging of Filed ANDAs

  • 10

    Value* of Filed ANDAs

    *Value is based on total market, including brand & generic where applicable, using recent IMS sales data

  • 11

    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

  • 12

    Human Health Customers (representative)

    https://healthy.kaiserpermanente.org/html/kaiser/index.shtmlhttp://corporate.publix.com/http://www.aznutritional.com/http://www.nbty.com/Home/

  • 13

    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

  • 14

    Pharmaceutical Ingredients Customers (representative)

  • 15

    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

  • 16

    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/

  • 17

    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

  • 18

    Worldwide Presence

    USACorporate HQNew York

    NETHERLANDS

    FRANCE

    GERMANY

    CHINA

    SINGAPORE

    INDIA

    JAPAN

    UNITED KINGDOM

    PHILIPPINES

  • 19

    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

  • 20

    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

  • 21

    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

  • Strong Track Record of Growth

    22

    $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)

  • Expanding EBITDA & EBITDA Margin (non-GAAP)

    23

    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

  • 24

    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

  • 25

    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