Evotec SE(EVO)2025-04-17 18:24Financial Data and Key Metrics Changes - The company's full-year 2024 group revenues reached €797 million, a 2% increase compared to 2023 [15] - Adjusted EBITDA for 2024 was €22.6 million, with a strong Q4 performance contributing to a significant uplift [19][22] - Operating cash flow for Q4 landed at €74.2 million, with total liquidity increasing by €94 million to €397 million by year-end [25][24] Business Line Data and Key Metrics Changes - Shared R&D revenue declined from €673 million in 2023 to €611 million in 2024, primarily due to lower revenues from Bristol Myers Squibb [16] - Just-Evotec Biologics saw a strong revenue growth of 71%, reaching €185.6 million in 2024, driven by existing relationships and new deals [18] - R&D expenditures decreased by 26% from €68.5 million in 2023 to €50.9 million in 2024, focusing investments on relevant projects [18] Market Data and Key Metrics Changes - The global R&D spending is approximately €260 billion, with expected growth rates of 3% to 4% per year [35][36] - The biologics manufacturing market is projected to grow at 10% per year, with Evotec positioned as a leader in continuous manufacturing [33][34] - The addressable market for Evotec is anticipated to grow by 5% to 7% from 2024 to 2028, driven by increased outsourcing in drug discovery [40] Company Strategy and Development Direction - The company aims to combine scientific excellence with operational excellence to achieve sustainable profitable growth [8][9] - A strategic review has led to a focus on technology and science leadership, with an emphasis on high-value, tech-driven segments [70][86] - The Priority Reset program has successfully implemented €40 million in run rate savings, with further cost-saving measures planned for 2025 [29][51] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued softness in the Shared R&D market in 2025, with a potential tipping point for growth expected in the second half of the year [49][47] - The biologics market remains robust, with confidence in the growth of Just-Evotec Biologics [48] - The company is committed to operational excellence and expects to achieve EBITDA margins over 20% in the coming years [98] Other Important Information - The company has streamlined its asset pipeline by 30%, focusing on high-quality, high-potential assets [74] - Evotec's predictive accuracy for drug-induced liver injury exceeds 87%, positioning the company as a leader in this area [126] - The company has divested from non-core assets and reduced its equity participation exposure [76] Q&A Session Questions and Answers Question: What is the sustainable level of income from tax credits for the foreseeable future? - Management indicated that tax credits would grow in line with business growth, with no current risks identified [110] Question: What are the net effects of the €50 million growth savings? - The €50 million represents gross cost savings, with net effects considering productivity and inflation expected to balance out over the planning period [112] Question: Can you provide details on the phase composition of the drug portfolio? - Currently, there are six assets in clinical stages and six in preclinical stages, with potential for 15 assets to move into clinical stages within the next 24 months [114][115] Question: How sophisticated are the models for phasing out animal testing? - Evotec supports the FDA's initiative to replace animal testing with human microphysiological systems and AI-based approaches, positioning itself as a leader in this developing market [123][124]