Ypsomed AG "Pure-play growth story with strong execution" (Buy) Hansalik

Research evidence excerpt

Ypsomed AG "Pure-play growth story with strong execution" (Buy) Hansalik

ously), but partially offset by other GLP contracts, we forecast 13% CAGR in 03/27E 12.17 13.90 14 13.15

Delivery Systems (~15% excl. Sanofi contract manufacturing phase-out) to CHF978m 03/28E 14.41 16.03 11 14.99

sales. We estimate total GLP projects (~50 projects incl. Innovent's Mazdatutide and 03/29E 16.66 18.00 8 16.70

Novo's Cagrisema) will account for close to c30% of FY29E sales vs. ~10% in FY25.

Tanya Hansalik

FCF positive by FY27/28E driven by capex normalization Analyst

tanya.hansalik@ubs.com

Driven by higher utilisation of manufacturing capacities, Ypsomed reduced its gross +41-44-239-2053

capex budget by CHF200m to CHF1.3bn (incl. customer capacity reservation fees stable

Olivier Calvet, CFA~CHF400m). The majority relates to the expansion of current sites (Schwerin +250-

Analyst

300m devices annual capacity) and the brown-field site in North Carolina (opening in olivier.calvet@ubs.com

'27 for cCHF100m annual capacity once ramped). After continued high capex in +41-44-239 2051

FY25/26, we expect capex to normalize (from ~48% of Delivery System sales to ~17%

in FY29E), resulting in positive op. FCF by FY27/28E. Aligned with growing capacity

reservation fees and high volume contracts with price discounts, partially offset by

growing capacity utilisation and cost savings from YpsoFit operational excellence (low

double digit CHFm), we expect an EBIT margin dilution of -20bps p.a. to 31.8% by

FY29E (from 34.6% in FY26/27E) in Delivery Systems.

Valuation: New PT of CHF425 (from CHF410)

Driven by higher margin and cash flow projections, our DCF-derived PT (3% TGR, 6.8%

WACC) increases to CHF425. At 16x FY26E EV/EBITDA, Ypsomed trades at a discount to

our Delivery System peer group (~18x).