Evotec SE(EVO) - 2024 Q4 - Annual Report

Executive Summary Evotec outlines a new strategy for sustainable growth, meeting 2024 guidance and setting targets for 2025 and 2028 Overview of Strategic Direction and Performance Evotec's new strategy emphasizes core strengths, operational excellence, and a 'Priority Reset' for significant cost savings - The new strategy refocuses Evotec on its core strengths in technology and science leadership to deliver maximum impact for customers and patients, accelerating drug discovery through cutting-edge platforms and AI-driven innovation[3] - The 'Priority Reset' initiative is on track to deliver annualized recurring gross savings of €40 million[4] 2025 Guidance and 2028 Outlook Highlights | Metric | 2025 Guidance | 2028 Outlook | | :--- | :--- | :--- | | Group Revenues | €840 – €880 million (5-10% growth) | 8-12% CAGR (2024-2028) | | Adjusted EBITDA | - | Margin > 20% | Strategic Repositioning and Operational Excellence Evotec is strategically repositioning to enhance operational excellence and simplify its business model, targeting significant cost savings by 2028 Core Strategy and Business Model Simplification Evotec simplifies its business model by focusing on two core pillars, streamlining assets, and targeting over €90 million in gross savings by 2028 - The company's strategy is built on two core pillars: Drug Discovery & Pre-clinical Development (Shared R&D) and Just – Evotec Biologics[7] - The business model will be simplified by focusing on high-value services, streamlining the asset portfolio by ~30%, and exiting equity participations[7] - A commitment to operational excellence aims to deliver over €50 million in gross savings by 2028, in addition to the €40 million from the 'Priority Reset' program[7] Financial Performance and Business Highlights Evotec met its 2024 financial guidance, driven by strong growth in Just – Evotec Biologics, despite challenges in Shared R&D FY 2024 Financial Results Evotec's 2024 group revenues grew 2% to €797.0 million, boosted by Just – Evotec Biologics, with adjusted EBITDA at €22.6 million FY 2024 Financial Performance | Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Group Revenues | €797.0 million | €781.4 million | +2% | | Just – Evotec Biologics Revenues | €185.6 million | €108.4 million | +71% | | Total Shared R&D Revenues | €611.4 million | €673.0 million | -9% | | Adjusted Group EBITDA | €22.6 million | €66.4 million | -66% | - Q4 2024 revenues showed strong performance, increasing by 10% to €221.2 million, marking the second-highest quarterly revenue in the company's history[7] - The 'Priority Reset' program is on track, with one-off costs of €54.9 million recognized against an initial provision of €68.5 million[7] - The net debt leverage ratio significantly improved to 1.9x net debt / EBITDA[7] Business Development and Partnerships Evotec expanded key partnerships in biologics, neuroscience, and cell therapies in 2024, strengthening its foundation for future growth - Key strategic collaborations in 2024 include: - Sandoz: Expansion of a technology partnership for biologics development and manufacturing - Bristol Myers Squibb (BMS): Progress and extension of a multi-year collaboration in neuroscience and targeted protein degradation - Novo Nordisk: A new technology development partnership to support next-generation cell therapies - Pfizer: A new multi-year master research collaboration focused on metabolic and infectious diseases[9] Financial Guidance and Outlook Evotec provides financial guidance for 2025, projecting accelerated revenue growth, and sets long-term targets for 2028 Fiscal Year 2025 Guidance Evotec forecasts 2025 group revenues between €840-€880 million and adjusted EBITDA of €30-€50 million, driven by Biologics growth FY 2025 Guidance | Metric | Expected Range | | :--- | :--- | | Group Revenues | €840 – 880 million | | R&D Expenditures | €40 – 50 million | | Adjusted Group EBITDA | €30 – 50 million | - Revenue growth in 2025 is expected to be driven by the Just – Evotec Biologics segment, with Shared R&D revenues anticipated to be stable compared to 2024[9] 2028 Outlook By 2028, Evotec targets an 8-12% CAGR for group revenues and an adjusted EBITDA margin exceeding 20% 2028 Long-Term Targets | Metric | Target | | :--- | :--- | | Group Revenues CAGR (2024-2028) | 8 – 12 % | | Adjusted EBITDA Margin 2028 | > 20% | Corporate Information This section provides details on the upcoming conference call, an overview of Evotec SE, and important forward-looking statements Conference Call Information Evotec will host a conference call on April 17, 2025, to discuss 2024 results and the strategic review - A conference call to discuss 2024 results and the strategic review is scheduled for Thursday, April 17, 2025, at 2:00 pm CEST[10][11] About Evotec SE Evotec SE is a global life science company focused on drug discovery and development, partnering with top pharma and biotech firms - Evotec's business model involves high-value pipeline co-creating partnerships with clients including all Top 20 Pharma and over 800 biotechnology companies[16] - The company has established a portfolio of more than 100 proprietary and co-owned R&D projects, from early discovery to clinical development[16] Forward-Looking Statements This disclaimer highlights that forward-looking statements are subject to risks and uncertainties and are not obligations to update - The announcement includes forward-looking statements regarding expectations for revenues, Group EBITDA, and R&D expenses, which are subject to known and unknown risks and are not guaranteed to be correct[17]