Full Press Release Details
For further information,
please contact: Volker Braun, EVP Head of Global Investor Relations &
ESG,volker.braun@evotec.com, Phone +49 (0)40 228 999 338, Mobil +49.(0)40 228 999 338,
SEGMENTS WITH DIFFERENT GROWTH DYNAMICS
POSITIVE DEVELOPMENTS OF STRATEGIC ALLIANCES
BUSINESS OUTLOOK FOR FULL-YEAR 2024 CONFIRMED
FINANCIAL HIGHLIGHTS
The following table provides an overview of the financial performance
in the first nine months of 2024 compared to the same period in 2023.
Key figures of consolidated income statement
Evotec SE & subsidiaries - First nine months of
| In k | 9M 2024 | 9M 2023 | ||||||
| Revenues 1) | 575,739 | 580,113 | ||||||
| Costs of revenues | (506,955 | ) | (442,729 | ) | ||||
| Gross profit | 68,784 | 137,384 | ||||||
| Gross margin in % | 11.9 | % | 23.7 | % | ||||
| R&D expenses 2) | (41,128 | ) | (48,366 | ) | ||||
| SG&A expenses | (138,297 | ) | (127,482 | ) | ||||
| Other operating income | 34,983 | 52,290 | ||||||
| Other operating expense | (11,393 | ) | (44,655 | ) | ||||
| Impairment of intangible assets | - | (5,131 | ) | |||||
| Reorganization costs | (62,257 | ) | - | |||||
| Operating income (loss) | (149,306 | ) | (35,960 | ) | ||||
| Adjusted EBITDA 3) | (5,971 | ) | 50,211 |
revenues would have amounted to 575.7 m at constant exchange rates
2023 includes 2.7 m partnered R&D, not applicable in 9M 2024
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.
The following table details Evotec's segment revenues and operating
income (loss) for the nine months ended 30 September 2024:
| In T | Shared R&D | Just Evotec Biologics | Intersegment Eliminations | Evotec Group 9M2024 | |||||||||
| Revenues | 447,115 | 129,307 | (682 | ) | 575,739 | ||||||||
| Operating result | (131,725 | ) | (17,581 | ) | - | (149,306 | ) |
REPORT ON THE FINANCIAL SITUATION AND RESULTS
1. Results of operations
During the nine months ended 30 September 2024
Group revenues decreased by (1)% to 575.7 m compared to the same period of the previous year (9M 2023: 580.1 m).
The decrease was driven by (12)% lower revenues in the Shared R&D segment, whereas Just - Evotec Biologics contributed 128.7
m during the nine months ended 30 September 2024 versus 74.1 m in the comparable prior year period. There was no significant
fx impact on the revenues compared to prior year. Base business decreased by (0.5)% from 575.3 m in 9M 2023 to 572.6 m
in the nine months ended 30 September 2024.
The Costs of revenue for the nine months
ended 30 September 2024 amounted to 507.0 m (9M 2023: 442.7 m) yielding a gross margin of 11.9% (9M 2023: 23.7%).
Within the comparable prior year, 31.8 m were reclassified from Costs of revenue towards Other Operating Expense, representing
the internal effort of the Operations functions focused on business recovery after the cyber-attack. The other main driver of the increase
in the costs of revenue lies 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 increased business
R&D expenses were 41.1 m, compared
to 48.4 m in the nine months ended 30 September 2023 (-15%), with a focused capital allocation to selected R&D projects.
SG&A expenses for the nine months
ended 30 September 2024 amounted to 138.3 m and were thus 10.8 m or 8% higher compared to last year (9M 2023:
127.5 m) especially driven by higher IT costs as well as Business Development and General & Admin expenses. The increase was
related to higher personnel costs, consultancy and depreciation expenses. Overall, SG&A expenses have increased significantly more
than the revenue growth in the past years and a simplification of the organization structure, operating model and footprint is needed
as announced in the reorganization program.
For the nine months ended 30 September 2024,
other operating income amounted to 35.0 m, compared to 52.3 m for the comparable prior year period. The decrease
was driven by the Sanofi contribution that ended in 2023 (9M 2023 16.9 m). Key driver for the decrease of other operating expenses
from 44.7 m in the first nine months of 2023 to 11.4 m in the first nine months of 2024 were the internal and external
costs related to the recovery after the cyber-attack, which are significantly lower within the first nine months of 2024.
The Group has also reviewed its finite lived
intangible assets as well as Goodwill for impairment whenever triggering events or changes in circumstances indicate that
carrying amount value may not be recoverable. Following this review, the Group has not identified any impairment trigger. In the nine
months ended 30 September 2023, the review led to the recognition of an impairment loss of (5.1) m linked to research and
development projects.
For the nine months ended 30 September 2024
Reorganisation costs amounted to (62.3) m driven by planned headcount reduction, planned closure of selected sites, and
the further reduction of physical footprint through surrendering of certain lease agreements and the associated costs.
Adjusted Group EBITDA for the nine months
ended 30 September 2024 amounted to (6.o) m (9M 2023: 50.2 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 30 September 2024
amounted to (155.2) m (9M 2023: (67.8) m), predominantly driven by higher costs of revenues and reorganization costs,but
partially offset by more favourable income taxes.
2. Result in our reportable segments Shared R&D and Just-Evotec
In the Shared R&D segment, revenues
(incl. intersegment revenues) decreased by (12)% to 447.1 m (9M 2023: 506.1 m) mainly driven by a weaker performance
within parts of the Discovery business area partially offset by increased revenues within the transactional business areas that was impacted
heavily in the prior year after the cyber-attack.
Costs of revenue within Shared R&D
were at 382.9 m in the nine months ended 30 September 2024 (9M 2023: 370.0 m), corresponding to a gross margin of
14.3% (9M 2023: 26.9%). The decrease in the gross margin was mainly driven by a lower top-line performance, a high fixed-cost base and
under-utilization in some areas of Shared R&D. In the nine months ended 30 September 2023 we reclassified 21.7 m from
Costs of revenues to Other operating expenses as this was time we spent on recovering after the cyber-attack.
R&D expenses came in at 41.3
m (9M 2023: 48.4 m), with a focused capital allocation approach to specific R&D projects. SG&A expenses increased
to 115.4 m (9M 2023: 107.8 m), mainly caused by an increase in IT expenses. For the nine months ended 30 September 2024,
other operating income amounted to 33.4 m, compared to 50.6 m for the comparable prior year period, driven by the
conclusion of the Sanofi contribution in 2023. Other operating expenses were 11.4 m (9M 2023: 34.5 m) driven by
one-off expenses related to the cyber-attack but significantly lower compared to the comparable prior year period due to less internal
and external cyber costs.
The adjusted EBITDA of the Shared R&D
segment was (6.8) m (9M 2023: 61.1 m), due to lower revenues on an increasing cost base within costs of revenues and SG&A
expenses and lower other operating income.
Revenues within Just-Evotec Biologics
increased to 128.7 m (9M 2023: 74.1 m). This growth of 74% was strongly driven by the 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 124.4 m were
incurred in the first nine months of 2024, with higher labour and service and supplier costs to cover the increased base business in
the US and the continuous ramp-up in France, compared to 72.8 m within the nine months ended 30 September 2023, with increasing
business in the US. In the same period, gross margin increased to 3.8% from 1.8% in the first nine months of 2023.
The increase in SG&A expenses (9M
2024: 22.9 m vs. 9M 2023: 19.7 m) was mainly caused by higher headcount and the continuous investment in IT-systems and
process improvements. Other Operating Expense decreased by 9.4 m, mainly related to the reclassification from Costs of
Revenues to Other Operating Expense
within the nine months ended 30 September 2023
related mainly to time spent on recovering after the cyber-attack.
The adjusted EBITDA within Just-Evotec
Biologics has increased to 0.8 m (9M 2023: (10.9) m, as the revenue has increased stronger than the cost base. Within the
nine months ended 30 September 2023, we recognized a higher upfront revenue compared to this year. The base business development
however, shows a positive development.
3. Financing and financial position
Cash flow provided by (used in) operating