Results for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 were as follows: | --- | --- | |------------------------------------------------------------|------------------------------------------| | Net Revenue | 2023 vs. 2022 Three Months Ended | | Year-Over-Year Change | March 31, Net Revenue | | Organic | (19) % | | Impact of acquisitions | 2 % | | Constant-currency change | (17)% | | Foreign currency translation impact on reporting | (2) % | | Total % change | (19 ...

Financial Data and Key Metrics Changes - Net revenue for the second quarter was $1.15 billion, down 6% on a reported basis and a 2% decrease on a constant currency basis compared to the same quarter of fiscal '22 [13] - Adjusted EBITDA for the second quarter was $283 million, a decline of 9% as reported and 6% on a constant currency basis compared to the same quarter of fiscal '22 [14] - The net leverage ratio as of December 31, 2022, was 3.7x, up from 3.2x as of September 30, 2022, due to draw-downs on the revolving credit facility for the Metrics acquisition [44] Business Line Data and Key Metrics Changes - The Biologics segment reported net revenue of $580 million, a decrease of 7% compared to the second quarter of 2022, with total non-COVID revenue growth exceeding 10% [70][71] - The Pharma and Consumer Health (PCH) segment generated net revenue of $570 million, an increase of 3% compared to the second quarter of fiscal 2022, driven by the recently acquired Metrics business [72] - The adjusted net income for the second quarter was $122 million, or $0.67 per diluted share, compared to $163 million, or $0.90 per diluted share in the same quarter a year ago [75] Market Data and Key Metrics Changes - The addressable market is anticipated to grow by 40% to $100 billion by fiscal '26, with Catalent well-positioned to increase its market share [12] - COVID-related revenue is expected to exceed $600 million for fiscal '23, up from a previous estimate of approximately $550 million [82] - The company expects non-COVID growth to be in the high teens for the full year, with the second half expected to align with the growth seen in the first quarter, which was over 20% on an organic constant currency basis [84] Company Strategy and Development Direction - Catalent aims to optimize its best-in-class CDMO ecosystem, focusing on maximizing asset utilization and free cash flow generation [36] - The company has invested over $7 billion since fiscal '17 to expand its total addressable market, which has grown from $35 billion to $70 billion [25][26] - Catalent is enhancing its manufacturing capabilities, particularly in gene therapy and drug product offerings, to meet increasing demand [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for gene therapy and viral vector manufacturing, indicating strong growth potential in these areas [148] - The company anticipates a minimal contribution from COVID products in Q3, with a significant ramp-up expected in Q4 due to customer demand for fall booster vaccines [51][93] - Management emphasized the importance of quality and regulatory compliance, stating that strong inspection results differentiate Catalent in the market [32] Other Important Information - The company has implemented a restructuring plan that reduced headcount by approximately 700 employees, expected to generate annualized savings of $75 million to $85 million [69] - Catalent's free cash flow generation improved, with approximately $45 million generated in the second quarter, marking the first positive cash flow in several quarters [45] - The company is focused on maintaining increased inventory levels due to concerns about global supply chain stabilization [46] Q&A Session Summary Question: What factors influence the guidance range for EBITDA? - Management indicated that execution will drive where the company lands within the guidance range, with strong visibility to demand across the business [92] Question: Can you elaborate on the relationship with Moderna? - Management expressed excitement about the long-term partnership with Moderna, emphasizing the ability to support multiple products and formats [61][114] Question: What are the expectations for the Biologics segment moving forward? - Management highlighted strong visibility to volume related to major development programs, with minimal downside risk associated with upcoming approvals [116] Question: How does the company plan to address recent regulatory challenges? - Management acknowledged the occurrence of 483s but emphasized the importance of thorough responses and corrective actions to improve operations [100][126] Question: What is the outlook for the consumer health side of the business? - Management noted that consumer health products are facing challenges due to discretionary spending pressures, impacting growth projections [119]

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, 2022 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 in its charter) _____________________________ Delaware 20-8 ...

Catalent. Forward-looking statements 2 Management measures operating performance based on consolidated earnings from operations before interest expense, expense/(benefit) for income taxes, and depreciation and amortization, adjusted for the income or loss attributable to non-controlling interests ("EBITDA from operations"). EBITDA from operations is not defined under U.S. GAAP, is not a measure of operating income, operating performance, or liquidity presented in accordance with U.S. GAAP, and is subject to ...

Catalent, Inc. (NYSE:CTLT) Q1 2023 Earnings Conference Call November 1, 2022 8:15 AM ET Company Participants Paul Surdez - Vice President, Investor Relations Alessandro Maselli - President & Chief Executive Officer Tom Castellano - Senior Vice President & Chief Financial Officer Conference Call Participants Tejas Savant - Morgan Stanley Sean Dodge - RBC Capital Markets Dave Windley - Jefferies Derik De Bruin - Bank of America Max Smock - William Blair Justin Bowers - Deutsche Bank John Sourbeer - UBS Jack M ...

Q1'23 Earnings Call Presentation November 1, 2022 Agenda Alessandro Maselli, President & Chief Executive Officer • Q1'23 highlights • FY'23 growth drivers Thomas Castellano, Senior VP & Chief Financial Officer • Q1'23 financial performance • Capitalization review • Updated guidance Question & Answer Session 2 Disclaimer Statement Forward-Looking Statements This presentation contains both historical and forward-looking statements. All statements other than statements of historical fact, are, or may be deemed ...

[Part I. Financial Information](index=6&type=section&id=Part%20I.%20Financial%20Information) This section provides the company's unaudited financial statements and management's discussion and analysis for the quarter [Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited consolidated financial statements for Q1 FY23 vs Q1 FY22, including key statements and notes, following a segment reorganization - **Effective July 1, 2022**, the company **reorganized its operating structure** from four segments into two new **reportable segments**: (i) Biologics and (ii) Pharma and Consumer Health All **prior-period comparative segment information** has been **restated** to reflect this change[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) This table presents the unaudited consolidated statements of operations, detailing key financial performance metrics for Q1 FY23 and Q1 FY22 Consolidated Statements of Operations (Unaudited) | Financial Metric | Three Months Ended Sep 30, 2022 (in millions) | Three Months Ended Sep 30, 2021 (in millions) | | :--- | :--- | :--- | | Net revenue | **$1,022** | **$1,025** | | Gross margin | **$258** | **$324** | | Operating earnings | **$60** | **$138** | | Net earnings | **$0** | **$93** | | Diluted EPS | **$0.00** | **$0.49** | [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) This table provides the unaudited consolidated balance sheet highlights, including assets, liabilities, and equity as of September 30, 2022, and June 30, 2022 Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | September 30, 2022 (in millions) | June 30, 2022 (in millions) | | :--- | :--- | :--- | | Cash and cash equivalents | **$281** | **$449** | | Total current assets | **$2,698** | **$2,916** | | Total assets | **$10,205** | **$10,507** | | Total current liabilities | **$943** | **$1,072** | | Long-term obligations, less current portion | **$4,098** | **$4,171** | | Total liabilities | **$5,505** | **$5,712** | | Total shareholders' equity | **$4,700** | **$4,795** | [Consolidated Statements of Cash Flows](index=13&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This table outlines the unaudited consolidated statements of cash flows, detailing cash movements from operating, investing, and financing activities Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Activity | Three Months Ended Sep 30, 2022 (in millions) | Three Months Ended Sep 30, 2021 (in millions) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | **$(92)** | **$163** | | Net cash used in investing activities | **$(116)** | **$(167)** | | Net cash provided by financing activities | **$74** | **$1,082** | | Net (decrease) increase in cash and cash equivalents | **$(168)** | **$1,073** | [Notes to Unaudited Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited consolidated financial statements, including segment revenue, EBITDA, and post-quarter acquisition details Net Revenue by Segment and Activity (Q1 FY23 vs Q1 FY22) | (in millions) | Biologics | Pharma and Consumer Health | Total | | :--- | :--- | :--- | :--- | | **Three Months Ended Sep 30, 2022** | | | | | Manufacturing & commercial product supply | **$94** | **$292** | **$386** | | Development services & clinical supply | **$429** | **$207** | **$636** | | **Total** | **$523** | **$499** | **$1,022** | | **Three Months Ended Sep 30, 2021** | | | | | Manufacturing & commercial product supply | **$134** | **$276** | **$410** | | Development services & clinical supply | **$414** | **$201** | **$615** | | **Total** | **$548** | **$477** | **$1,025** | Segment EBITDA Reconciliation | (in millions) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Biologics | **$113** | **$167** | | Pharma and Consumer Health | **$108** | **$99** | | **Sub-Total** | **$221** | **$266** | | Unallocated costs | **$(87)** | **$(56)** | | Depreciation and amortization | **$(99)** | **$(81)** | | Interest expense, net | **$(32)** | **$(26)** | | Income tax expense | **$(3)** | **$(10)** | | **Net earnings** | **$0** | **$93** | - In October **2022**, **subsequent to the quarter end**, the Company **acquired** Metrics Contract Services for **$475 million** in cash, **funded by a $500 million drawdown** from its senior secured revolving credit facility Metrics is an oral solids development and manufacturing business[120](index=120&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 FY23 financial results, noting constant currency revenue growth driven by acquisitions, offset by organic decline and margin pressure [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section analyzes operational performance, highlighting changes in revenue, gross margin, and earnings on a constant currency basis, impacted by organic decline and acquisitions Q1 FY23 vs Q1 FY22 Performance Summary (Constant Currency) | Metric (in millions) | Q1 FY23 | Q1 FY22 | Constant Currency Change $ | Constant Currency Change % | | :--- | :--- | :--- | :--- | :--- | | Net revenue | **$1,022** | **$1,025** | **$45** | **4%** | | Gross margin | **$258** | **$324** | **$(54)** | **(16)%** | | Operating earnings | **$60** | **$138** | **$(71)** | **(52)%** | | Net earnings | **$0** | **$93** | **$(94)** | **(100)%** | - **Organic revenue decreased by 1% primarily due to a significant decline** in demand for COVID-19 related programs This was **partially offset by 5% inorganic growth** from acquisitions, including RheinCell, Bettera Wellness, and a Princeton facility[136](index=136&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) - Gross margin, **as a percentage of revenue**, **decreased by 630 basis points on a constant-currency basis** to **25.2%** This was **primarily due to lower levels of utilization** across the network, an **unfavorable product mix**, and the **impact from remediation-related activities** at the Brussels facility[140](index=140&type=chunk) [Segment Review](index=33&type=section&id=Segment%20Review) This section reviews Biologics and Pharma and Consumer Health segment performance, detailing revenue and EBITDA changes and their key drivers Biologics Segment Performance (Constant Currency) | Metric | YoY Change % | | :--- | :--- | | Net Revenue | **(2)%** | | Segment EBITDA | **(33)%** | - The Biologics segment's **decline was driven by a significant drop in demand** for COVID-19 related programs and **lower network utilization**, **partially offset by strong growth in non-COVID programs**, **particularly in cell and gene therapy**[155](index=155&type=chunk)[156](index=156&type=chunk) Pharma and Consumer Health Segment Performance (Constant Currency) | Metric | YoY Change % | | :--- | :--- | | Net Revenue | **11%** | | Segment EBITDA | **20%** | - The Pharma and Consumer Health segment's **growth was driven by a 10% increase in revenue** from the Bettera Wellness acquisition and a **1% organic increase** from clinical development services[157](index=157&type=chunk)[159](index=159&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash flow from operations, available credit facilities, and significant post-quarter financing for acquisitions - **Cash used in operations was $92 million**, a **significant reversal** from the **$163 million** in **cash provided by operations** in the **prior-year period** The change was **primarily due to lower operating earnings** and **unfavorable working capital changes**[164](index=164&type=chunk)[165](index=165&type=chunk) - **As of September 30, 2022**, the company had a **$725 million revolving credit facility**, with **$75 million drawn** and **$4 million** in **letters of credit outstanding**[160](index=160&type=chunk) - **Subsequent to the quarter**, the company **drew down an additional $500 million** from its **revolving credit facility** to **fund the $475 million acquisition** of Metrics[161](index=161&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there have been no material changes to its quantitative and qualitative disclosures about market risks since its Annual Report on Form 10-K for the fiscal year ended June 30, 2022 - **As of September 30, 2022**, there has been **no material change** in the company's **market risk information** from the **Fiscal 2022 10-K**[182](index=182&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of September 30, 2022 No material changes to internal control over financial reporting occurred during the quarter - The **CEO and CFO concluded that as of September 30, 2022**, the company's **disclosure controls and procedures were effective**[184](index=184&type=chunk) - There were **no changes during the quarter that materially affected**, or are **reasonably likely to materially affect**, the company's **internal control over financial reporting**[185](index=185&type=chunk) [Part II. Other Information](index=43&type=section&id=Part%20II.%20Other%20Information) This section covers other important information, including legal proceedings, risk factors, and a list of exhibits filed with the report [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings arising in the ordinary course of business Management does not currently believe that the outcome of any such litigation will have a material adverse effect on the company's consolidated financial statements - The company is **subject to legal proceedings** in the **ordinary course of business** but **does not expect them to have a material adverse effect** on its **financial statements**[187](index=187&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) The company states there has been no material change to the risk factors previously disclosed in its Annual Report on Form 10-K for the fiscal year ended June 30, 2022, other than those mentioned in the report's forward-looking statements section - There has been **no material change to the risk factors disclosed** in the company's **Fiscal 2022 10-K**[190](index=190&type=chunk) [Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists all exhibits accompanying the Form 10-Q filing, including various corporate governance documents and certifications

Financial Data and Key Metrics Changes - Fiscal 2022 net revenue was $4.83 billion, growing organically in constant currency by 20% compared to the prior fiscal year [8] - Adjusted EBITDA for the year was $1.29 billion, reflecting constant currency organic growth of 28% compared to fiscal 2021, with an adjusted EBITDA margin increase to 26.6% [8][39] - Fourth quarter revenue was $1.31 billion, increasing 10% as reported or 15% in constant currency compared to the fourth quarter of fiscal 2021 [9] - Fourth quarter adjusted net income was $215 million or $1.19 per diluted share, up from $1.16 per diluted share in the corresponding prior year period [40] Business Line Data and Key Metrics Changes - Biologics segment net revenue in Q4 was $667 million, increasing 14% compared to the fourth quarter of 2021, driven by demand in cell and gene therapy [28] - Softgel and Oral Technologies segment net revenue was $350 million, increasing 22% compared to the fourth quarter of fiscal 2021, with the acquisition of Bettera contributing significantly to growth [32][33] - Oral and Specialty Delivery segment net revenue grew 11%, with segment EBITDA up 27% over the fourth quarter of last year, driven by demand for Zydis offerings [35] - Clinical Supply Services segment posted net revenue of $104 million, representing 4% growth over the fourth quarter of fiscal 2021 [36] Market Data and Key Metrics Changes - The backlog for the Clinical Supply Services segment was $540 million, up from $529 million at the end of the last quarter and up 10% from June 30, 2021 [37] - The company expects long-term net revenue growth for the Pharma and Consumer Health segment to be 6% to 10%, with the Biologics segment expected to grow at 10% to 15% [12][13] Company Strategy and Development Direction - The company has reorganized its structure, reducing operating segments from four to two, focusing on Biologics and Pharmaceuticals & Consumer Health to enhance customer access to services [10][11] - The acquisition of Metrics Contract Services is expected to accelerate growth in the high drug manufacturing sector, with anticipated revenue growth comparable to the segment's projected overall long-term growth of 6% to 10% [19][21] - The company aims to achieve a 30% EBITDA margin by fiscal 2026, despite current challenges from inflation and supply chain issues [60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving fiscal 2023 organic growth in line with the long-term growth rate of 8% to 10%, despite a decline in COVID-related revenue [15][16] - The company anticipates that non-COVID business will grow organically by more than 25% at constant currency due to expansions and efficiencies in existing assets [17] - Management acknowledged ongoing supply chain challenges and inflationary pressures but remains optimistic about the company's growth strategy and market position [25] Other Important Information - The company reported a net leverage ratio of 2.9x as of June 30, 2022, slightly below the long-term target of 3.0x [41] - Capital expenditures as a percentage of revenue were 14% in fiscal 2022, with expectations for a similar range in fiscal 2023 [45][46] Q&A Session Summary Question: Can you provide insights on the margin headwinds and the impact of facility remediation? - Management confirmed that FX impacts are significant, with EBITDA being more affected than revenue, and ongoing remediation efforts in Brussels are factored into guidance [54][55][56] Question: What changes can customers expect from the new operating structure? - The new structure aims to reduce internal barriers and increase the share of services purchased by existing customers, enhancing commercial synergies [61][62] Question: What is the expected range of COVID-related revenue decline for 2023? - Management indicated a two-thirds reduction in COVID-related volumes, with minimal variability expected around this assumption [69][70] Question: How is the company addressing supply chain challenges? - Supply chain challenges are primarily impacting the consumer health side, with management actively seeking to offset inflationary pressures through pricing strategies [81][82] Question: What is the long-term growth outlook for the Biologics segment? - The long-term growth outlook for the Biologics segment remains at 10% to 15%, with significant capacity additions expected to support this growth [12][90]

[Part I](index=3&type=section&id=PART%20I) [Business](index=6&type=section&id=Item%201.%20Business) Catalent provides global development and manufacturing solutions for drugs, biologics, and consumer health products, with the Biologics segment being the largest contributor to fiscal 2022 revenue - Catalent provides development and manufacturing solutions for drugs, biologics, cell and gene therapies, and consumer health products across more than 50 facilities on four continents[38](index=38&type=chunk) - The company serves a broad customer base, including **87 of the top 100 branded drug marketers**, **24 of the top 25 biologics marketers**, and **21 of the top 25 consumer health marketers** globally in fiscal 2022[39](index=39&type=chunk)[51](index=51&type=chunk) Fiscal 2022 Net Revenue Distribution | Category | Percentage of Net Revenue | | :--- | :--- | | Biologics | 55% | | Branded Drugs | 28% | | Generic Prescription Drugs | 3% | | Over-the-Counter Drugs | 6% | | Consumer Health & Other | 8% | - As of June 30, 2022, Catalent had over **1,500 active customer development programs** and introduced **153 new products** for customers in fiscal 2022[53](index=53&type=chunk)[72](index=72&type=chunk) - The company's backlog as of June 30, 2022, was **$2.85 billion**, a decrease from **$3.77 billion** as of June 30, 2021, with approximately **80%** expected to be recognized as revenue by the end of fiscal 2023[106](index=106&type=chunk) - In fiscal 2022, the company's employee turnover rate increased to **19%**, with voluntary turnover at **15%**, primarily driven by the U.S. market, making attrition reduction a top priority[123](index=123&type=chunk) [Our Reporting Segments](index=12&type=section&id=Our%20Reporting%20Segments) Net Revenue Contribution by Segment (before inter-segment eliminations) | Segment | FY 2022 | FY 2021 | FY 2020 | | :--- | :--- | :--- | :--- | | Biologics | 53% | 48% | 33% | | Softgel and Oral Technologies | 26% | 25% | 34% | | Oral and Specialty Delivery | 13% | 17% | 22% | | Clinical Supply Services | 8% | 10% | 11% | - The Biologics segment provides development and manufacturing for a wide range of advanced therapies, including proteins, pDNA, mRNA, cell therapy, and viral-based gene therapies, with key customers including Moderna, Johnson & Johnson, and AstraZeneca[75](index=75&type=chunk) - The Softgel and Oral Technologies segment is a market leader in softgel development and manufacturing, also providing large-scale manufacturing of oral solid dose forms, and now offers gummy and soft chew formats following the Bettera Wellness acquisition[83](index=83&type=chunk)[84](index=84&type=chunk) - The Oral and Specialty Delivery segment focuses on advanced formulation and manufacturing for oral, respiratory, and inhaled dose forms, including the proprietary Zydis fast-dissolve tablet technology[90](index=90&type=chunk)[92](index=92&type=chunk) - The Clinical Supply Services segment provides comprehensive support for clinical trials, including manufacturing, packaging, storage, distribution, and inventory management of clinical materials[96](index=96&type=chunk) - Immediately following fiscal 2022, the company adopted a new operating structure with two segments: (1) Biologics and (2) Pharma and Consumer Health[74](index=74&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business and industry risks, including global health epidemics, intense competition, and stringent regulations, alongside financial risks from its **$4.20 billion** indebtedness and stock price volatility - Business operations are exposed to risks from global health epidemics, such as COVID-19, which can disrupt customer activities, supply chains, and regulatory processes, with the duration of demand from COVID-19 products in the Biologics segment being uncertain[183](index=183&type=chunk)[186](index=186&type=chunk) - The company operates in a highly competitive market, facing competition from other outsourced service providers and the internal capabilities of its pharmaceutical customers, driven by technology, quality, price, and speed[192](index=192&type=chunk)[193](index=193&type=chunk) - Operations are subject to extensive regulation by the FDA, DEA, and other global authorities, with failure to comply with cGMP and other standards potentially leading to sanctions, product recalls, and operational restrictions[199](index=199&type=chunk)[200](index=200&type=chunk) - As of June 30, 2022, the company had **$4.20 billion** in total indebtedness, which could increase vulnerability to adverse economic conditions, expose the company to interest rate risk on variable-rate debt, and restrict strategic activities like acquisitions[268](index=268&type=chunk)[269](index=269&type=chunk) - The company's stock price has been volatile, ranging from **$36.95 to $142.35** in the three years ended June 30, 2022, and it has no current plan to pay cash dividends, meaning investor returns may depend solely on stock price appreciation[280](index=280&type=chunk)[285](index=285&type=chunk) [Properties](index=42&type=section&id=Item%202.%20Properties) As of June 30, 2022, Catalent operated **58 facilities** globally, totaling approximately **8 million square feet**, with key manufacturing sites in Bloomington, Indiana, and Harmans, Maryland, contributing materially to net revenue Facilities by Reporting Segment and Geographic Region (as of June 30, 2022) | Geographic Region | Biologics | Softgel and Oral Technologies | Oral and Specialty Delivery | Clinical Supply Services | Corporate | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | North America | 10 | 9 | 6 | 3 | 1 | 29 | | South America | — | 3 | — | — | 1 | 4 | | Europe | 6 | 4 | 5 | 3 | 1 | 19 | | Asia-Pacific | — | 2 | — | 4 | — | 6 | | **Total** | **16** | **18** | **11** | **10** | **3** | **58** | - The company's facilities comprise approximately **8 million square feet** of manufacturing, laboratory, office, and related space[295](index=295&type=chunk) - Two manufacturing facilities in Bloomington, Indiana, and Harmans, Maryland, are noted as generating a material portion of the company's net revenue[296](index=296&type=chunk) [Part II](index=43&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=43&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Catalent's common stock trades on the NYSE under "CTLT", with no dividends paid or planned for fiscal 2021 or 2022, and no equity securities sold or repurchased during the period - The company's common stock trades on the NYSE under the symbol **"CTLT"**[303](index=303&type=chunk) - Catalent has no current plan to pay any dividend on its Common Stock and did not declare or pay any in fiscal 2022 or 2021, intending to retain future earnings for operations, expansion, and debt repayment[304](index=304&type=chunk) - The company did not sell any unregistered equity securities or purchase any of its own equity securities during the fiscal year ended June 30, 2022[305](index=305&type=chunk)[306](index=306&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=46&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal 2022, Catalent's net revenue grew **21%** to **$4.83 billion**, primarily driven by strong Biologics segment demand, while net earnings decreased to **$519 million** due to the absence of a prior-year gain on sale Key Financial Results (Fiscal Year Ended June 30) | (In millions) | 2022 | 2021 | % Change (Reported) | | :--- | :--- | :--- | :--- | | Net Revenue | $4,828 | $3,998 | 21% | | Gross Margin | $1,640 | $1,352 | 21% | | Operating Earnings | $756 | $828 | (9)% | | Net Earnings | $519 | $585 | (11)% | Net Revenue Change Drivers (FY 2022 vs. FY 2021) | Driver | Percentage Change | | :--- | :--- | | Organic | 20% | | Impact of acquisitions | 5% | | Impact of divestitures | (2)% | | **Constant currency change** | **23%** | | Foreign currency translation | (2)% | | **Total % change** | **21%** | Reconciliation of Net Earnings to Adjusted EBITDA | (In millions) | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Net earnings | $519 | $585 | | EBITDA from operations | $1,106 | $1,114 | | **Adjusted EBITDA** | **$1,285** | **$1,020** | Reconciliation of Net Earnings to Adjusted Net Income (ANI) | (In millions, except per share) | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Net earnings | $519 | $585 | | **Adjusted net income (ANI)** | **$694** | **$549** | | **ANI per share - diluted** | **$3.84** | **$3.04** | [Segment Review](index=57&type=section&id=Segment%20Review) Segment Performance (FY 2022 vs. FY 2021, Constant Currency) | Segment | Net Revenue Change | Segment EBITDA Change | | :--- | :--- | :--- | | Biologics | +34% | +34% | | Softgel and Oral Technologies | +26% | +27% | | Oral and Specialty Delivery | -3% | +24% | | Clinical Supply Services | +4% | +5% | - Biologics segment revenue grew **34%** (constant currency), driven by strong demand for drug product, drug substance, and cell and gene therapy offerings, particularly for COVID-19 related programs[387](index=387&type=chunk) - Softgel and Oral Technologies revenue grew **26%** (constant currency), with **10%** organic growth from prescription and consumer health products and **16%** inorganic growth from the Bettera Wellness acquisition[391](index=391&type=chunk)[393](index=393&type=chunk) - Oral and Specialty Delivery revenue decreased **3%** (constant currency), as **6%** organic growth was more than offset by a **10%** negative impact from the divestiture of the Blow-Fill-Seal Business[394](index=394&type=chunk)[398](index=398&type=chunk) - Clinical Supply Services revenue grew **4%** (constant currency), driven by growth in manufacturing, packaging, storage, and distribution offerings in North America and Asia Pacific[399](index=399&type=chunk) [Liquidity and Capital Resources](index=61&type=section&id=Liquidity%20and%20Capital%20Resources) Summary of Cash Flows (Fiscal Year Ended June 30) | (In millions) | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $439 | $433 | | Net cash used in investing activities | ($1,884) | ($649) | | Net cash provided by financing activities | $1,031 | $142 | - As of June 30, 2022, the company had **$449 million** in cash and cash equivalents and **$721 million** of unutilized capacity under its **$725 million** Revolving Credit Facility[401](index=401&type=chunk)[426](index=426&type=chunk) - In September 2021, the company incurred an additional **$450 million** in term loans to partially fund the Bettera Wellness acquisition[409](index=409&type=chunk) - The final **$50 million** installment of deferred purchase consideration for the Catalent Indiana, LLC (formerly Cook Pharmica) acquisition was paid in October 2021[419](index=419&type=chunk)[614](index=614&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market risks primarily from interest rate fluctuations on its long-term debt and foreign exchange rate volatility through interest-rate swaps and euro-denominated debt as a natural hedge - The company manages interest rate risk on its variable-rate term loans through an interest-rate swap agreement that effectively fixes the floating portion of the rate on **$500 million** of its term loans at **0.9985%**[447](index=447&type=chunk) - To mitigate foreign currency translation risk on its European investments, the company holds a portion of its debt in euros, with **$874 million** of euro-denominated debt designated as a net investment hedge as of June 30, 2022[442](index=442&type=chunk)[448](index=448&type=chunk) [Financial Statements and Supplementary Data](index=69&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The audited consolidated financial statements for fiscal year 2022 report total assets of **$10.51 billion** and total liabilities of **$5.71 billion**, with subsequent events including a segment reorganization and the **$475 million** acquisition of Metrics Contract Services Consolidated Balance Sheet Data (as of June 30) | (In millions) | 2022 | 2021 | | :--- | :--- | :--- | | Total current assets | $2,916 | $2,918 | | Total assets | $10,507 | $9,112 | | Total current liabilities | $1,072 | $1,196 | | Total liabilities | $5,712 | $4,838 | | Total shareholders' equity | $4,795 | $3,915 | Disaggregated Net Revenue by Type (Fiscal Year Ended June 30) | (In millions) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Manufacturing & commercial product supply | $2,091 | $1,865 | $1,737 | | Development services | $2,354 | $1,761 | $1,022 | | Clinical supply services | $400 | $391 | $345 | - In October 2021, the company acquired Bettera Wellness for approximately **$1 billion**, adding capabilities in gummy, soft chew, and lozenge delivery formats, and adding **$531 million** to goodwill[575](index=575&type=chunk)[578](index=578&type=chunk)[582](index=582&type=chunk) - Effective July 1, 2022, the company reorganized from four reporting segments into two: (1) Biologics and (2) Pharma and Consumer Health[757](index=757&type=chunk) - On August 9, 2022, the company entered into an agreement to acquire Metrics Contract Services for **$475 million**, which will become part of the new Pharma and Consumer Health segment[760](index=760&type=chunk) [Controls and Procedures](index=127&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of June 30, 2022, with no material changes reported during the most recent fiscal quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2022[763](index=763&type=chunk) - Based on an assessment using the COSO framework, management concluded that the company's internal control over financial reporting was effective as of June 30, 2022, an assessment audited by Ernst & Young LLP[767](index=767&type=chunk)[768](index=768&type=chunk) [Part III](index=128&type=section&id=PART%20III) [Directors, Executive Compensation, and Corporate Governance](index=128&type=section&id=Items%2010-14) Information for Items 10-14, covering directors, executive compensation, and corporate governance, is incorporated by reference from the company's 2022 Annual Meeting of Shareholders Proxy Statement - Information required for Items 10, 11, 12, 13, and 14 is incorporated by reference from the Registrant's Proxy Statement for the 2022 Annual Meeting of Shareholders[774](index=774&type=chunk)[775](index=775&type=chunk)[776](index=776&type=chunk)[777](index=777&type=chunk)[778](index=778&type=chunk) [Part IV](index=129&type=section&id=PART%20IV) [Exhibit and Financial Statement Schedules](index=129&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists financial statements and schedules, including a deferred tax assets valuation allowance that increased from **$65 million** in fiscal 2021 to **$149 million** in fiscal 2022, along with various exhibits Deferred Tax Assets - Valuation Allowance Roll-Forward | (In millions) | Beginning Balance | Current Period (Charge) / Benefit | Deductions and Other | Ending Balance | | :--- | :--- | :--- | :--- | :--- | | FY 2021 | $ (53) | $ 6 | $ (18) | $ (65) | | FY 2022 | $ (65) | $ (94) | $ 10 | $ (149) |

Q4'22 Earnings Call Presentation August 29, 2022 Agenda Alessandro Maselli, President & Chief Executive Officer • FY'22 & Q4'22 highlights • New operating structure & long-term revenue growth rates • Proposed acquisition of Metrics Contract Services Thomas Castellano, Senior VP & Chief Financial Officer • Q4'22 financial performance • Capitalization review • Guidance Question & Answer Session 2 Disclaimer Statement Forward-Looking Statements This release contains both historical and forward-looking statemen ...