annual report 2020 2020 CATALENT 2020 ANNUAL REPORT Dear Shareholders, In our fiscal year that ended on June 30, 2020, Catalent delivered record financial results, deploying our capabilities and expertise to generate robust organic growth, while keeping our employees safe and continuing to deliver for our customers and their patients. Our work has never been more seriousserious andand important,important, for for today today we we have have the the added added responsibility responsibility to to support support customers customers working on a range of responses to a global pandemic. This urgent need takes Catalent to a whole new level of “essential”—with speed, quality, and patient expectations like none that any of us has experienced in our careers. I couldn’t be prouder to be part of this industry, or of the Catalent team, but we’re also conscious of the enormous responsibilities ahead as a partner on over 50 COVID-19-related potential treatments and vaccines across all four of our business segments, including three Operation Warp Speed vaccine candidates. I am also pleased to report that S&P Dow Jones Indices has added Catalent to its S&P 500® index effective September 21, 2020. This designation is an affirmation of our strategy and the substantial progress we’ve made in executing it since our IPO in 2014. None of this would have been possible without the passion and dedication of our 14,000 employees, whose commitment to our mission to help people live better, healthier lives has propelled Catalent to where we are today. FISCAL 2019 IN REVIEW COVID-19 Response: Meeting the Needs of Employees, Customers, and Patients From the outset of the current pandemic, we had the northnorth starstar ofof ourour missionmission toto guideguide us,us, prioritizingprioritizing thethe safetysafety and well-being of our employees with a safe and secure workingworking environmentenvironment while,while, atat thethe samesame time,time, keepingkeeping ourour facilities open so that the vital medicinesmedicines andand healthhealth productsproducts wewe developdevelop andand produceproduce wouldwould remainremain availableavailable toto patients worldwide. Our COVID Response Team, led by Kay Schmidt,Schmidt, ourour seniorsenior vicevice presidentpresident ofof technicaltechnical operations,operations, mobilized early, implementing comprehensive safety protocols andand businessbusiness continuitycontinuity plansplans acrossacross ourour networknetwork ofof fifty sites. Our deep-rooted culture of GMP compliance, safety,safety, andand operationaloperational andand qualityquality excellenceexcellence gavegave usus anan advantage as we swiftly executed these activities. ToTo date,date, nonenone ofof ourour sitessites hashas experiencedexperienced anyany majormajor disruption,disruption, and we continue to work proactively with our customers andand supplierssuppliers toto maximizemaximize supplysupply chainchain continuity.continuity. Catalent was not only very well-positioned to weather this crisis, but, because of the transformative acquisitions we made over the last several years, combined with our strategic internal investments, capabilities, and expertise, we are now a “go-to” partner for COVID-19 response work. Nearly all our dosage forms are engaged with a COVID-19 treatment or vaccine candidate or clinical trial; and we are proud to have built the capability to provide multi-dose vial filling for potentially billions of COVID-19 vaccine doses, if needed. These important COVID-19 response programs illustrate our broad capabilities, both geographically and technologically, which are available not only for COVID 19 programs, but also for the increasingly wide range of products we manufacture on behalf of customers every year. Investing in Growth In fiscal 2020, we continued our transformative investments to shift our technology portfolio to even more innovative and in-demand areas of drug development and manufacturing, as well as investing significantly in capital projects to expand our capacity. We entered the cell therapytherapy marketmarket throughthrough our our acquisition acquisition of of Masthercell Masthercell Global, Global, a aleading leading cell cell therapy therapy contract contract developer and manufacturer withwith locationslocations in in Belgium Belgium and and Texas. Texas. We We expanded expanded our our Maryland-based Maryland-based gene gene therapy therapy business, including ourour flagshipflagship commercialcommercial manufacturingmanufacturing campus,campus, whichwhich becamebecame the the firstfirst contract contract development development and manufacturing site to secure FDA approval to Corporate Responsibility manufacture an approved gene therapy. Finally, we In lockstep with the growth and evolution of our acquired a first-class, biologics fill-finish, solid oral business is the continuing integration of our corporate dose, and packaging facility in Italy from Bristol- responsibility commitments into our operations and Myers Squibb to expand our European capabilities. culture. In April, we published our first Corporate Responsibility Report, covering fiscal 2019. It highlights We also increased our organic growth investments our commitment to a range of social and environmental in fiscal 2020 to meet customer and patient needs. topics related to our business, such as product quality, An outsized portion of the $466 million we spent on safety, environmental sustainability, and diversity capital improvements was directed to our biologic drug and inclusion. During these challenging times, I am substance and drug product offerings, including the proud to report that, under our Catalent Cares banner, aforementioned expansions in our gene therapy business participation in our Catalent Month of Service program and previously announced expansions of our biologics has doubled and the number of matching gift requests drug substance capacity in Madison, Wisconsin and our has tripled since those programs were launched a few biologics drug product capacity in Bloomington, Indiana. short years ago. We have also significantly expanded our These carefully conceived and timely executed investments corporate-level giving, helping with COVID-19 response led us to deliver robust growth in fiscal 2020, including and disasters around the world, as well as patient- and record double-digit organic net revenue growth, and have STEM-focused initiatives in our local communities. positioned our company for superior growth in the future. In the spring, we were all deeply affected by the senseless Financial Performance deaths of Black U.S. citizens. We stand with those who seek a world without bias or harmful discrimination, For fiscal 2020, Catalent delivered net revenue and and we at Catalent will continue to put our hearts and 1 Adjusted EBITDA organic growth rates above the high-end our actions into making our communities better and of our long-term targets of 8% and 11%, respectively. more inclusive. In our Corporate Responsibility Report, Fiscal 2020 net revenue grew 24%, compared to we shared that ethnically diverse talent represented 2 fiscal 2019 at constant exchange rates, to $3.1 33% of our U.S. workforce, and that 44% of global new billion, of which 12% was organic. Adjusted EBITDA hires were ethnically diverse. We will continue to train was $750.9 million for fiscal 2020, representing our Talent Acquisition teams on diverse recruitment constant-currency, organic growth of 14%, compared tactics, including forging partnerships with diverse to fiscal 2019. Adjusted Net Income per diluted professional organizations. We also took steps to 3 share was $2.11, compared to $1.81 in fiscal 2019. strengthen our ability to support diverse populations within our ranks by reinvigorating or starting several We also strengthened our balance sheet in fiscal 2020 employee resource groups, including groups focused on through several important financial transactions, veterans, members of the LGBTQ+ community, Latinos, including raising more than $1 billion through two women, young professionals, and employees of African public stock offerings. These strengthening actions ancestry or of Asian or Pacific Islander ancestry. significantly reduced our net leverage ratio and weighted average interest rate, while also extending the I look forward to our second Corporate Responsibility maturity profile of our debt. We ended the year with Report, covering fiscal 2020, later this year, which more than $950 million of cash and cash equivalents, will track our progress against environmental, social, compared to $345 million at the end of fiscal 2019, and governance metrics that align with the standards and reduced our net leverage ratio from 4.4x to 2.8x. set by the Sustainability Accounting Standards Board These actions provide Catalent with the flexibility to for the biotechnology and pharmaceutical sectors. invest for future growth, be it organic or inorganic. 1 For an explanation of how we determine Adjusted EBITDA, a non-GAAP measure, and how this financial measure reconciles to our reported results, please see pages 47 and 60-61 of the enclosed Annual Report on Form 10-K for the fiscal year ended June 30, 2020 (our “2020 Form 10-K”). 2 Comparisons at “constant exchange rates” or in “constant currency” exclude the effects of foreign currency fluctuations against the U.S. dollar during the year. For a discussion of this non-GAAP measure and a reconciliation of constant-currency results to our reported results, please see pages 47 and 48 of our 2020