Full Press Release Details
For further information, please contact: Volker Braun,
EVP Head of Global Investor Relations & ESG,
volker.braun@evotec.com, M. +49.(0)40 228 999 338, www.evotec.com
| CHALLENGING Q1 WITH SOFTNESS MAINLY IN TRANSACTIONAL/DEVELOPMENT SHARED R&D BUSINESS AGAINST A STRONG COMPARABLE QUARTER | |
| STRONG START WITH JUST - EVOTEC BIOLOGICS IN Q1 2024 | |
| POSITIVE MOMENTUM IN SHARED R&D DISCOVERY CLOSED SALES POINT TO RECOVERY OF REVENUES TOWARDS END OF THE YEAR | |
| RESET FOR PROFITABLE GROWTH INITIATED; NEW REPORTING SEGMENTS INTRODUCED - SHARED R&D AND JUST - EVOTEC BIOLOGICS |
EVOTEC'S TRANSACTIONAL BUSINESS
IMPACTED BY HEADWINDS; STRONG GROWTH IN JUST - EVOTEC BIOLOGICS
| Introduction of new reporting segments - Shared R&D and Just - Evotec Biologics to simplify and streamline reporting structure and better represent operating structure. | |
| Group revenues decreased by (2)% (excluding currency effects) to 208.7 m (3M 2023: 213.6 m) | |
| Total Shared R&D revenues decreased by (23)% to 155.2 m (3M 2023: 202.5 m, due to a challenging market environment for transactional business while integrated offerings performing well; Just - Evotec Biologics revenues increased by 383% to 53.5 m (3M 2023: 11.1 m) | |
| Adjusted Group EBITDA totalled 7.8 m (3M 2023: 34.3 m) driven by a small single digit decrease in revenues, increasing costs within Cost of revenues and SG&A as well as a lower contribution in other operating income |
STRONG DEVELOPMENTS IN INTEGRATED
R&D AND PRECISION MEDICINE PLATFORMS
| Orders in Discovery up +70%, leading indicator pointing to recovery in late 2024 (Discovery business roughly 70% of Shared R&D) | |
| New A.I.-powered strategic partnership with Owkin to accelerate therapeutics pipeline in oncology and I&I (Immunology & Inflammation) | |
| Progress made in strategic neuroscience partnership with Bristol Myers Squibb, Evotec receives a $ 25 m payment to progress further research | |
| New agreement with Colitis Foundation to advance drug discovery for novel IBD therapies | |
| Framework launched with Claris Ventures to accelerate programmes from Claris's portfolio companies into the clinic | |
| Expanded development and manufacturing agreement for Just - Evotec Biologics with ABL for broadly neutralising antibodies against HIV as disclosed examples from continued expansion of molecules developed by Just - Evotec Biologics |
Events after Period-End
| New strategic partnership to discover and develop fibrosis treatments with Variant Bio | |
| Bayer and Evotec collaborate to advance precision cardiology |
| Evotec announces CEO transition to Dr Mario Polywka as interim CEO as of 3 January 2024 | |
| Process to close Chemistry activities in Marcy (Lyon) completed |
Events after Period-End
| New appointment of Aur lie Dalbiez as Chief People Officer ("CPO"), effective 15 June 2024 | |
| Newly appointed Chief Executive Officer ("CEO") Dr Christian Wojczewski taking over effective 01 July 2024 | |
| Announcement of priority reset to profitable growth: Size and footprint adjustments to drive expected annualised EBITDA improvement greater than 40 m with first savings expected in H2. |
BUSINESS OUTLOOK FOR FULL-YEAR 2024
| Group revenues expected to grow by a double-digit percentage (FY 2023: 781.4 m). . | |
| Mid-single to low double digit percentage reduction of unpartnered research and development expenses expected (FY 2023: 64.8 m). | |
| Adjusted Group EBITDA expected to grow by a mid-double-digit percentage (FY 2023: 66.4 m). | |
| Refined guidance to be assessed together with new CEO; update planned for H1 results |
FINANCIAL HIGHLIGHTS
provides an overview of the financial performance in the first three months of 2024 compared to the same period in 2023. More detailed
information can be found on page 8 of this interim statement.
Key figures of consolidated income
statement & segment information
Evotec SE & subsidiaries - First three months of 2024
| In T | Evotec Group 3M 2024 | Evotec Group 3M 2023 | ||||||
| Revenues 1) | 208,726 | 213,556 | ||||||
| Costs of revenues | (173,967 | ) | (160,320 | ) | ||||
| Gross profit | 34,760 | 53,236 | ||||||
| Gross margin in % | 16.6 | % | 25 | % | ||||
| R&D expenses 2) | (16,242 | ) | (18,486 | ) | ||||
| SG&A expenses | (45,937 | ) | (42,584 | ) | ||||
| Other operating income | 12,681 | 20,709 | ||||||
| Other operating expense 4) | (3,469 | ) | (361 | ) | ||||
| Impairments of intangible assets | - | - | ||||||
| Net operating income (loss) | (18,207 | ) | 12,515 | |||||
| Adjusted EBITDA 3) | 7,815 | 34,283 |
1) Group revenues would have amounted to 209.3m at
constant exchange rates
2) 3M 2023 includes 0.8 m partnered R&D
3) Net income (loss) adjusted for interest, taxes, depreciation
and amortization of intangibles, impairments on goodwill and other intangible and tangible assets, total non-operating results, change
in contingent consideration (earn-out) and items that in magnitude, nature or occurrence would distort the presentation of the financial
performance of the Group.
4) As of Q3 2023, the
external, one-off related cyber expenses are
excluded from Adjusted Group EBITDA and amount to 1.8 m in Q1 2024 (Q1 2023: 0). Internal costs of recovery are included in
Adjusted Group EBITDA.
The following table details Evotec's segment revenues and operating
income (loss) for the three months ended 31 March 2024:
| In T | Shared R&D | Just Evotec Biologics | Intersegment Eliminations | Evotec Group 3M 2024 | ||||||||||||
| Revenues | 155,185 | 53,810 | (268 | ) | 208,726 | |||||||||||
| Operating result | (25,903 | ) | 7,695 | - | (18,207 | ) |
REPORT ON THE FINANCIAL SITUATION AND RESULTS
1. Results of operations
During the three months ended 31 March 2024
Group revenues decreased by (2)% to 208.7 m compared to the same period of the previous year (3M 2023: 213.6 m).
The decrease was driven by (23)% lower revenues in the Shared R&D segment, whereas Just - Evotec Biologics contributed
53.5 m during the three months ended 31 March 2024 versus 11.1 m in the comparable prior year period.
Excluding the negative fx-effects, Group revenues decreased by (2)% to 209.3 m. Base business decreased by (2)% from
212.0 m in 3M 2023 to 208.6 m in the three months ended 31 March 2024.
of revenue for the three months ended 31 March 2024 amounted to 174.0 m (3M 2023: 160.3 m) yielding a gross
margin of 16.7% (3M 2023: 24.9%). The increase of Costs of revenues was driven by higher costs within Just-Evotec Biologics due to higher
headcount numbers and therefore higher labour costs, as well as increased material and supplier costs to cover the higher demand, as
well as under utilization within Shared R&D. The overall Costs of revenues within Shared R&D decreased by (1)% compared to the
comparable prior year period.
R&D expenses were 16.2 m, compared
to 18.5 m in the three months ended 31 March 2023 (-12%), driven by a slower start of some projects and continuous cost containment
SG&A expenses for the three months
ended 31 March 2024 amounted to 45.9 m and were thus 3.4 m or 8% higher compared to last year (3M 2023: 42.6
m). Higher IT expenses as well as expanding Evotec's number of people to strengthen the end-to-end global processes and systems
were the main drivers.
For the three months ended 31 March 2024,
other operating income amounted to 12.7 m, compared to 20.7 m for the
comparable prior year period. The decrease was driven by the Sanofi contribution that ended in 2023. Key
driver for the increase of other operating expenses from 0.4 m in the first three months of 2023 to
3.5 m in the first three months of 2024 were the one-off expenses related to the recovery after the cyber-attack. The company
did not recognize any impairments on intangible assets in the three months ended 31 March 2024.
Adjusted Group EBITDA for the three months ended 31 March 2024
amounted to 7.8 m (3M 2023: 34.3 m) driven by a small single-digit decrease in revenues, higher costs and less contribution
within other operating income.
The net income (loss) as of 31 March 2024 amounted to
(20.7) m (3M 2023: (13.9) m), driven by the operating loss but partly offset by higher other non-operating income related
to higher fx effect in prior year.
2. New operating segments introduced as Shared R&D and Just-Evotec
As of Q1 2024, the new segment reporting was introduced and moved
from the segments EVT Execute and EVT Innovate towards Shared R&D and Just - Evotec Biologics to simplify and streamline reporting
structure and better represent operating structure.
In the Shared R&D segment revenues (incl. intersegment revenues)
decreased by (23)% to 155.2 m (3M 2023: 202.5 m) mainly driven by a decrease in the Biology and Chemistry business areas.
Costs of revenue within Shared R&D were at
135.4 m in the three months ended 31 March 2024 (3M 2023: 137.0 m), corresponding to a gross margin of 12.8% (3M 2023:
32.3%). The decrease was mainly driven by a lower top-line performance but stable costs of revenues due to a high fixed costs base. R&D
expenses came in at 16.3 m (3M 2023: 18.5 m). The decline was related to the slower startup of projects and continuous
cost containment measures. SG&A expenses increased to 38.2 m (3M 2023: 35.7 m), mainly caused by an increase
in IT expenses. For the three months ended 31 March 2024, other operating income amounted to 12.2 m, compared to
20.2 m for the comparable prior year period, driven by the conclusion of the Sanofi contribution in 2023.
Other operating expenses were 3.5 m (3M 2023: 0.4 m) driven by one-off expenses related to the cyber-attack
plus IT license & maintenance costs. The adjusted EBITDA of the Shared R&D
segment was (5.5) m (3M 2023: 47.9 m), due to lower revenues on a comparable cost base, increasing SG&A costs and lower
other operating income.
Revenues within Just-Evotec Biologics increased
to 53.5 m (3M 2023: 11.1 m). This growth of 383% was strongly driven by higher revenues due to our collaboration with Sandoz
and, in general, a higher order book in our Redmond, US plant. The new factory in Toulouse, France, is expected to be fully operational
in Q1 2025. Costs of revenues of 38.8 m were incurred in the first three months of 2024, compared to 23.3 m within the
three months ended 31 March 2023. In the same period, gross margin significantly increased to 27.9% from (110.4)% in the first three
months of 2023. The increase in SG&A expenses (3M 2024: 7.8 m vs. 3M 2023: 6.9 m) was mainly caused by higher headcount
and the continuous investment in IT-systems and process improvements. The adjusted EBITDA within Just-Evotec Biologics has improved
to 13.3 m (3M 2023: (13.6) m) mainly driven by higher revenues and comparably lower cost increase.
3. Financing and financial position
Cash flow provided by (used in) operating activities in the
first three months 2024 was (48.2) m compared with 0.6 m in the first three months of 2023. This year's figure is
negatively affected by an increased net loss and unfavourable changes in working capital.
Net cash used in investing activities for the three months
ended 31 March 2024 amounted to (30.9) m (3M 2023: (4.7) m). Capital expenditure slightly decreased to 36.2