Catalent, Inc. (NYSE:CTLT) Q1 2021 Results Conference Call November 3, 2020 8:15 AM ET Company Participants Paul Surdez - Vice President, Investor Relations John Chiminski - Chairman and CEO Wetteny Joseph - SVP and CFO Conference Call Participants Dave Windley - Jefferies John Kreger - William Blair Tycho Peterson - J.P. Morgan Juan Avendano - Bank of America Jacob Johnson - Stephens Jack Meehan - Nephron Research Dan Brennan - UBS Thomas Kelliher - RBC Capital Markets Evan Stover - Baird Operator Ladies ...

[Part I. Financial Information](index=6&type=section&id=Part%20I.%20Financial%20Information) This section provides the unaudited consolidated financial statements, management's discussion and analysis, market risk disclosures, and internal controls assessment for the period [Item 1. Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited consolidated financial statements, including statements of operations, balance sheets, cash flows, and comprehensive notes, for the three months ended September 30, 2020 and 2019 [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net earnings for the three months ended September 30, 2020 and 2019 Consolidated Statements of Operations (Three Months Ended September 30) | Financial Metric | 2020 (in millions) | 2019 (in millions) | | :--- | :--- | :--- | | Net revenue | $845.7 | $664.7 | | Gross margin | $248.9 | $177.7 | | Operating earnings | $81.5 | $34.4 | | Net earnings | $82.4 | $0.1 | | Diluted EPS | $0.41 | $(0.05) | - The company's net earnings attributable to common shareholders swung from a loss of **$8.0 million** in Q1 2019 to a profit of **$68.8 million** in Q1 2020[20](index=20&type=chunk) [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's financial position, including assets, liabilities, and equity, as of September 30, 2020, and June 30, 2020 Consolidated Balance Sheet Highlights | Account | Sep 30, 2020 (in millions) | June 30, 2020 (in millions) | | :--- | :--- | :--- | | Cash and cash equivalents | $1,007.0 | $953.2 | | Total current assets | $2,356.1 | $2,293.0 | | Total assets | $7,984.2 | $7,776.5 | | Total current liabilities | $919.7 | $893.2 | | Long-term obligations | $2,985.3 | $2,945.1 | | Total liabilities | $4,305.5 | $4,271.1 | | Total shareholders' equity | $3,072.1 | $2,898.8 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities for the three months ended September 30 Consolidated Cash Flows (Three Months Ended September 30) | Cash Flow Activity | 2020 (in millions) | 2019 (in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $149.7 | $25.2 | | Net cash used in investing activities | $(151.2) | $(84.9) | | Net cash provided by/(used in) financing activities | $49.6 | $(35.8) | | Net increase/(decrease) in cash | $53.8 | $(102.0) | | Cash and equivalents at end of period | $1,007.0 | $243.4 | [Notes to Unaudited Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited consolidated financial statements, including revenue recognition and business combinations Revenue by Segment (Three Months Ended Sep 30, 2020) | Segment | Manufacturing & Commercial | Development Services | Clinical Supply | Total (in millions) | | :--- | :--- | :--- | :--- | :--- | | Biologics | $89.9 | $287.2 | - | $377.1 | | Softgel & Oral Technologies | $190.6 | $30.5 | - | $221.1 | | Oral & Specialty Delivery | $103.5 | $54.8 | - | $158.3 | | Clinical Supply Services | - | - | $92.7 | $92.7 | - On October 28, 2020, the Company entered into an agreement to acquire Skeletal Cell Therapy Support SA for **€12.0 million**, expanding its cell therapy capacity[127](index=127&type=chunk) - The company completed several business combinations, including the acquisition of MaSTherCell Global Inc. in February 2020 for an aggregate purchase price of **$323.3 million**, which was preliminarily allocated to goodwill (**$252.5 million**), identifiable intangible assets (**$51.0 million**), and property, plant and equipment (**$25.5 million**)[65](index=65&type=chunk)[67](index=67&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial performance, condition, and liquidity for the three months ended September 30, 2020, highlighting key drivers of revenue and earnings changes Financial Performance Summary (Q1 2021 vs Q1 2020) | Metric (in millions) | Q1 2021 (ended Sep 30, 2020) | Q1 2020 (ended Sep 30, 2019) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net revenue | $845.7 | $664.7 | $181.0 | 27% | | Gross margin | $248.9 | $177.7 | $71.2 | 40% | | Operating earnings | $81.5 | $34.4 | $47.1 | 137% | | Net earnings | $82.4 | $0.1 | $82.3 | 82300% | - Net revenue growth of **26%** (constant currency) was driven by a **20%** increase from existing operations, an **8%** contribution from acquisitions, and a **2%** headwind from divestitures[146](index=146&type=chunk) - The COVID-19 pandemic has not had a material adverse impact on the business to date; however, the company has observed some customer delays and cancellations, as well as revenue increases related to projects addressing the pandemic[132](index=132&type=chunk)[134](index=134&type=chunk) [Segment Review](index=32&type=section&id=Segment%20Review) This section provides a detailed analysis of the financial performance and key drivers for each operating segment, including Biologics and Softgel and Oral Technologies Segment Performance (Three Months Ended Sep 30, 2020 vs 2019) | Segment | Net Revenue Change (Constant Currency) | Segment EBITDA Change (Constant Currency) | | :--- | :--- | :--- | | Biologics | +98% | +194% | | Softgel and Oral Technologies | -17% | -20% | | Oral and Specialty Delivery | +17% | -26% | | Clinical Supply Services | +8% | +13% | - The Biologics segment's revenue grew **98%** in constant currency, driven by robust end-market demand across all offerings, including COVID-19 related programs[161](index=161&type=chunk) - The Softgel and Oral Technologies segment saw a **17%** revenue decline in constant currency, primarily due to reduced demand for prescription products in North America and lower demand for consumer health products like cough, cold, and pain relief[165](index=165&type=chunk) - Oral and Specialty Delivery Segment EBITDA decreased **26%** in constant currency, mainly due to a **$12 million** charge associated with a voluntary U.S. product recall[169](index=169&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash flows, debt, and available credit facilities, assessing its ability to meet short-term and long-term financial obligations Cash Flow Summary (Three Months Ended Sep 30) | Cash Flow Activity (in millions) | 2020 | 2019 | | :--- | :--- | :--- | | Operating activities | $149.7 | $25.2 | | Investing activities | $(151.2) | $(84.9) | | Financing activities | $49.6 | $(35.8) | - Cash from operating activities increased significantly to **$149.7 million** from **$25.2 million** in the prior-year period, primarily due to higher operating earnings[179](index=179&type=chunk) - Cash used in investing activities increased to **$151.2 million**, driven by a rise in capital expenditures to **$149.6 million** from **$73.5 million** in the prior-year period[180](index=180&type=chunk) - As of September 30, 2020, the company had a **$550 million** revolving credit facility available, with **$543.3 million** of capacity remaining[175](index=175&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, primarily from interest rate fluctuations on debt and foreign currency exchange rates, and its strategies for mitigation - The company manages interest rate risk on its variable-rate debt through an interest-rate swap agreement, which effectively fixed the rate on **$500.0 million** of its U.S. dollar-denominated term loan at **3.51%**[192](index=192&type=chunk)[200](index=200&type=chunk) - To mitigate foreign currency risk, the company holds euro-denominated debt, which totaled **$944.6 million** as of September 30, 2020, and is designated as a hedge of its net investment in European operations[193](index=193&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2020, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of September 30, 2020, the company's disclosure controls and procedures were effective at a reasonable assurance level[203](index=203&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the first quarter ended September 30, 2020[204](index=204&type=chunk) [Part II. Other Information](index=39&type=section&id=Part%20II.%20Other%20Information) This section covers other required disclosures, including legal proceedings, risk factors, equity sales, and a list of exhibits [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings arising in the ordinary course of business but does not expect them to have a material adverse effect on its consolidated financial statements - The company is subject to ordinary course legal proceedings but does not expect them to have a material adverse effect on its financial statements[206](index=206&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2020, were reported, aside from information in forward-looking statements - No material changes to the risk factors disclosed in the Fiscal 2020 10-K were reported, aside from information in the forward-looking statements section[209](index=209&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or purchases of equity securities by the company during the period - None reported[210](index=210&type=chunk)[211](index=211&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including management certifications and financial information formatted in inline XBRL - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and financial statements in inline XBRL format (101.1)[216](index=216&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM10-K ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2020 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36587 CATALENT, INC. (Exact name of registrant as specified in its charter) Delaware 20-8737688 (State or other jurisdiction of incorporation or org ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________ FORM 10-Q ______________________________ ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 001-36587 (Commission File Number) _____________________________ Catalent, Inc. (Exact name of registrant as specified i ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________ FORM 10-Q ______________________________ ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2019 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 001-36587 (Commission File Number) _____________________________ Catalent, Inc. (Exact name of registrant as specifie ...

Table of Contents Securities registered pursuant to Section 12(b) of the Act: UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________ FORM 10-Q ______________________________ ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 001-36587 (Commission File Number) _____________________ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________ FORM 10-K ______________________________ x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2019 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36587 ___________________________ CATALENT, INC. (Exact name of registrant as specifi ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________ FORM 10-Q ______________________________ ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 001-36587 (Commission File Number) _____________________________ Catalent, Inc. (Exact name of registrant as specified i ...

Part I. Financial Information [Item 1. Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited Q2 FY19 financials show a turnaround to net earnings, increased equity, and impact from ASC 606 adoption [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 FY19 net revenue reached **$623.0 million** with net earnings of **$49.0 million**, a significant turnaround from a prior-year net loss Consolidated Statements of Operations Highlights (in millions, except per share data) | Metric | Three Months Ended Dec 31, 2018 | Three Months Ended Dec 31, 2017 | Six Months Ended Dec 31, 2018 | Six Months Ended Dec 31, 2017 | | :--- | :--- | :--- | :--- | :--- | | **Net revenue** | $623.0 | $606.3 | $1,174.8 | $1,150.2 | | **Operating earnings** | $78.2 | $68.3 | $98.6 | $99.7 | | **Net earnings/(loss)** | $49.0 | $(21.9) | $34.6 | $(18.1) | | **Diluted EPS** | $0.33 | $(0.16) | $0.24 | $(0.14) | [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) As of Dec 31, 2018, total liabilities decreased significantly, leading to a substantial increase in total shareholder's equity Balance Sheet Summary (in millions) | Metric | December 31, 2018 | June 30, 2018 | | :--- | :--- | :--- | | **Total current assets** | $1,071.5 | $1,240.3 | | **Total assets** | $4,441.6 | $4,531.1 | | **Total current liabilities** | $514.3 | $576.9 | | **Long-term obligations** | $2,130.0 | $2,649.4 | | **Total shareholder's equity** | $1,563.0 | $1,086.7 | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities decreased for the six months ended Dec 31, 2018, impacted by acquisitions and debt repayment Cash Flow Summary for Six Months Ended Dec 31 (in millions) | Activity | 2018 | 2017 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $84.5 | $176.0 | | **Net cash (used in) investing activities** | $(208.8) | $(825.7) | | **Net cash (used in)/provided by financing activities** | $(73.8) | $682.4 | | **Net (decrease)/increase in cash** | $(202.3) | $41.2 | [Notes to Unaudited Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail ASC 606 adoption, Juniper acquisition, debt restructuring, and updated segment reporting aligning with strategy - The company adopted revenue recognition standard ASC 606 on July 1, 2018, using the modified retrospective method. This resulted in changes to revenue timing and presentation, notably recording comparator drug sourcing revenue on a net basis[58](index=58&type=chunk)[59](index=59&type=chunk) - On August 14, 2018, the company acquired Juniper Pharmaceuticals for **$127.5 million**, net of cash. This acquisition enhanced the Oral Drug Delivery segment's capabilities and added **$42.9 million** to its goodwill[87](index=87&type=chunk)[89](index=89&type=chunk) - The company repaid **$450.0 million** of its U.S. dollar-denominated term loans on July 31, 2018, using proceeds from a public equity offering[97](index=97&type=chunk) - As of December 31, 2018, the company had remaining performance obligations of **$1,274.5 million**, with approximately **58%** expected to be recognized as revenue over the next six months[86](index=86&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q2 FY19 revenue growth to acquisitions and ASC 606, improving capital structure and impacting cash flow [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Q2 FY19 net revenue increased 3% (5% constant currency) driven by acquisitions, with improved gross margin and operating earnings Q2 FY19 vs Q2 FY18 Performance (Constant Currency) | Metric | Change $ | Change % | | :--- | :--- | :--- | | **Net revenue** | $27.6M | 5% | | **Gross margin** | $17.0M | 9% | | **Operating earnings** | $12.1M | 18% | | **Net earnings/(loss)** | $72.1M | * | - The adoption of ASC 606, which requires netting revenue for comparator sourcing, decreased reported net revenue by **5%** but increased the gross margin percentage by **140 basis points** for the quarter[168](index=168&type=chunk)[170](index=170&type=chunk) - For the quarter, the company recorded a net tax benefit of **$6.9 million**, adjusting the provisional amount recorded for the 2017 Tax Act, primarily due to additional foreign tax credit benefits[181](index=181&type=chunk) [Segment Review](index=39&type=section&id=Segment%20Review) Q2 FY19 segment performance mixed, with strong Biologics and Oral Drug Delivery growth, offset by Softgel and Clinical Supply Services declines Q2 FY19 Segment Performance (Constant Currency % Change YoY) | Segment | Net Revenue % | Segment EBITDA % | | :--- | :--- | :--- | | **Softgel Technologies** | (3)% | (9)% | | **Biologics and Specialty Drug Delivery** | 25% | 28% | | **Oral Drug Delivery** | 14% | 11% | | **Clinical Supply Services** | (25)% | 13% | - Biologics and Specialty Drug Delivery growth was driven by the Catalent Indiana acquisition (**10%** revenue impact) and strong demand for U.S.-based drug substance offerings[193](index=193&type=chunk)[195](index=195&type=chunk) - Clinical Supply Services revenue was down **27%** due to the ASC 606 accounting change for comparator sourcing, which had no impact on Segment EBITDA[200](index=200&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company improved its capital structure through a significant equity offering and debt repayment, impacting cash flow from operations - Completed a public equity offering in July 2018, raising net proceeds of **$445.5 million**[243](index=243&type=chunk) - Used equity offering proceeds and cash on hand to repay **$450.0 million** of U.S. dollar-denominated term loans and make a **$50 million** payment on deferred purchase consideration[97](index=97&type=chunk)[174](index=174&type=chunk)[243](index=243&type=chunk) - Cash flow from operations for the six months ended Dec 31, 2018 decreased by **$91.5 million** year-over-year, primarily due to higher collection of receivables in the prior year and higher inventory levels in the current year[239](index=239&type=chunk)[241](index=241&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks are interest rate fluctuations and foreign currency exchange, managed through diversified portfolio and euro-denominated debt - Primary market risks are identified as interest rate risk and foreign currency exchange risk[261](index=261&type=chunk) - The company mitigates exposure to the euro by holding **$777.7 million** of euro-denominated debt, which is designated as a hedge of its net investment in foreign operations[256](index=256&type=chunk) - As of December 31, 2018, the company had no interest-rate swap agreements in place to manage its variable-rate debt exposure[262](index=262&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were effective as of Dec 31, 2018, with no material changes to internal controls, and ongoing integration of acquired business - The CEO and CFO concluded that disclosure controls and procedures were effective as of December 31, 2018[265](index=265&type=chunk) - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[266](index=266&type=chunk) - The company is continuing the process of integrating the internal controls of the acquired Catalent Indiana business[267](index=267&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company is cooperating with an SEC inquiry regarding pre-acquisition revenue recognition restatements by Juniper Pharmaceuticals - An ongoing SEC inquiry exists concerning revenue recognition restatements made by Juniper Pharmaceuticals prior to its acquisition by Catalent[269](index=269&type=chunk)[270](index=270&type=chunk) - The company is cooperating with the SEC and does not believe the outcome of the investigation will be material[270](index=270&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the Fiscal 2018 10-K have occurred - There has been no material change to the risk factors disclosed in the company's Fiscal 2018 10-K[273](index=273&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or repurchases of own equity securities were reported during the period - None reported[274](index=274&type=chunk)[275](index=275&type=chunk) [Item 6. Exhibits](index=57&type=section&id=Item%206.%20Exhibits) Exhibits include corporate governance documents, compensatory plans, CEO/CFO certifications, and interactive data files (XBRL) - Exhibits filed include CEO and CFO certifications and financial statements formatted in inline XBRL[281](index=281&type=chunk)