Evotec SE(EVO)2024-04-24 20:36Financial Data and Key Metrics Changes - Group revenues for 2023 were €781.4 million, a 4% increase compared to the previous year, despite significant operational impacts from a cyber incident [42][43] - Adjusted Group EBITDA for the year was €66.4 million, marking a 34% decline from last year, largely due to non-recoverable business and reduced capacity utilization in Q2 [44] - Gross margin declined to 22.6% from 23.2% due to the cyber incident and market challenges, with an adjusted gross margin of 27% excluding Just-Biologics [22][43] Business Line Data and Key Metrics Changes - Revenue from Just-Evotec Biologics reached €108.4 million, reflecting a remarkable increase of over 110% compared to the prior year, driven by strong partnerships [12] - The Innovate segment saw growth of more than 30%, primarily due to contract extensions with BMS in neurodegeneration and target protein degradation [45] - Execute segment revenues grew year-over-year, despite being adversely impacted by the cyber incident and a softening market towards the end of the year [46] Market Data and Key Metrics Changes - The share of biotech in the company's business decreased from approximately 40% to 34% due to fewer new funding events, indicating a challenging environment for biotech companies [39] - The company anticipates a market recovery towards 2025, with a cautious outlook for 2024 due to ongoing challenges in the biotech sector [28][39] Company Strategy and Development Direction - The company is focusing on profitability, efficiency, and high performance, with a strategic reset to align with market demands [9][30] - A new management structure has been introduced, including the appointment of a Chief People Officer to enhance organizational alignment and culture [11] - The company plans to optimize its organizational structure and operational model, with a target of generating annualized EBITDA improvements of over €40 million [79] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2023, including a cyber incident that resulted in €70 million in missed revenue, but expressed confidence in the company's ability to recover and grow [21][44] - The outlook for 2024 includes expectations of double-digit revenue growth, with a focus on Just-Evotec Biologics and differentiated offerings [36][80] - Management highlighted the importance of rebuilding momentum in the sales pipeline following the cyber incident and emphasized the need for careful monitoring of market conditions [66][96] Other Important Information - The company has made significant strides in sustainability, reducing Scope 1 and 2 emissions by 29% [23] - The new CEO, Dr. Christian Wojczewski, is expected to lead the company towards a prosperous future, leveraging his experience in transformational change [9][10] Q&A Session Summary Question: What are the expectations for 2024 and 2025? - Management indicated a qualitative guidance for 2024, expecting at least €100 million in EBITDA and €200 million plus in 2025, while acknowledging uncertainties [58][60] Question: What has changed in the market to prompt a more cautious outlook? - Management noted a decline in biotech funding and a challenging environment, leading to a cautious approach despite some early signs of recovery [64][66] Question: How is the order book looking across the broader business? - Management expressed confidence in the order book, indicating a double-digit growing demand and a strong pipeline, particularly in Just-Evotec Biologics [110]