Bachem Confirms High Profitability in the 2009 Business Year

In 2009, despite difficult market conditions, the
Bachem Group achieved sales of CHF181.8 million. Compared with the previous year, this corresponds to a sales decline of only 5.6% in local currencies. The mid-year deficit compared with the previous year’s period was therefore substantially offset in the third and fourth quarter of 2009.

Research chemicals and custom synthesis clearly and globally reflect the consequences of our customers’ financial situation and their efforts to reduce cash
burn. These activities are apparent among customers in Europe and North America alike. A positive development is the very gratifying growth rate of 9.8% observed in
the field of immunology products. In other product areas, sales developments in Europe and North America differed widely.

In the previous business year, North America has negatively impacted the overall result with a reduction in sales of 22.4% in local currencies. In addition to the
generally observed decline in research chemicals and custom syntheses, the lack of sales for an important product of one particular customer, as already communicated, resulted in this development. Given the current economic situation, this effect could not yet be compensated by new projects.

Although declining sales were posted at Group level, gratifying growth was reported in the European segment. Active pharmaceutical ingredients (APIs) in this segment
showed 8.9% growth in local currencies, while sales of new chemical entities (NCEs), the growth drivers of the future, increased as much as 77.8% in local
currencies. The sales of generics also held their ground well in Europe with sales up 1.7% in local currencies. Business lines that continue to show great promise in terms
of growth also at group level are both the Clinalfa® brand, under which Bachem offers finished dosage forms for clinical studies, and other services for NCEs. Here sales were up 27.4® in local currencies. In 2009, sales in Europe continued to grow a further 3.47#174; in local currencies.

In the past year, Bachem achieved an operating income of CHF50.9 million. Despite the negative impact of North America, even in a difficult business year such as 2009, the EBIT margin of the Bachem Group at 28% (28.5% excluding negative currency effects) remains at a very high level both in absolute terms and also compared with
the rest of the industry. The same applies for the net income of CHF46.1 million and a 25.3% margin in relation to sales. Earnings per share (EPS) were at CHF3.43.

The cash flow from operating activities amounted to CHF42.8 million or 23.6% of sales in 2009. Compared with the previous year, therefore, the operating cash flow
could be increased by 9.1% or CHF3.6 million.

Based on the strategy of sustainable growth, the investment projects started in 2008 were continued and, as far as possible, completed. This is why, at CHF38.2 million,
or 21% of sales, investments in property, plant and equipment in 2009 were at a relatively high level.

In the business year 2009, Bachem has increased the number of employees by eight to 730 full time equivalent positions. The increase in staff takes into account the
continued favourable sales development in Europe as well as the increased requirements and services in the areas of quality assurance and documentation.

Bachem remains financially extremely sound with a capital ratio of currently 79.3%. On the basis of the substantial financial stability of the company and good prospects in the medium term, the board of directors proposes a continuing high dividend of CHF3 to the annual general meeting.

Dr Rolf Nyfeler, CEO of the Bachem Group, commented: “In 2009, too, we consistently continued with the implementation of our strategy, which is focused on long-term growth, and managed to hold our ground operationally in an extremely difficult environment. In our core business of peptide active ingredients, we showed marked growth in Europe and also substantially expanded the business with new
services.” Nyfeler added: “Our market remains geared to growth. Whether for new markets, new products, new services or marketing ideas, Bachem is on a secure path to the future.”

Outlook

Bachem continues to pursue the strategy of a focused expansion of its activities. In 2010, the company is devoting particular attention to costs and investments. Staff levels will be adjusted with an eye on strategic growth targets and the pace of the general economic recovery. Investments will fall substantially after the expenditures of the last few years. Overall, for the current business year, Bachem expects to increase total sales and operating income over 2009/10.

The comprehensive Bachem annual report 2009 is now available on the Bachem website.

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