Evotec SE(EVO)2024-05-22 19:23Financial Data and Key Metrics Changes - In Q1 2024, the company achieved €208.8 million in revenue, representing a slight 2% decrease compared to the same period in 2023, primarily due to a 23% decline in Shared R&D revenue [27][24] - Adjusted Group EBITDA for Q1 2024 was €7.8 million, marking a 73% decline from the prior year, mainly driven by higher revenues and low overall cost increase [28] - The net debt ratio increased to 2.9, but the company maintained over €500 million in liquidity at the end of Q1 [5] Business Line Data and Key Metrics Changes - Just Evotec Biologics reported revenue of €53.5 million in Q1, reflecting over 380% growth compared to the same period last year [27] - Shared R&D experienced a 23% revenue decline in Q1 2024 versus Q1 2023, which was noted as the strongest in the company's history [24] - The company is focusing on smart partnering and has exited its Orth site and gene therapy business to concentrate on core modalities [11] Market Data and Key Metrics Changes - The company noted a challenging market environment, but a 70% increase in the Discovery Sales Book indicates potential recovery in the second half of 2024 [24][25] - The company is seeing strong traction with customers when offering integrated services that cover multiple steps along the value chain [18] Company Strategy and Development Direction - The company is executing a reset initiative to return to strong profitability, focusing on cost optimization and strategic partnerships [3][11] - The new factory in Toulouse, France, is expected to be fully operational by Q1 2025, which is part of the company's growth strategy [4] - The company is prioritizing investments in R&D and platforms that align with strategic priorities and partner relevance [4][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a recovery in the second half of 2024, despite a challenging first half [40] - The company anticipates that future growth will be driven by a more favorable business mix and efficiency improvement measures [39] - Management acknowledged the need for further innovations in gene therapy but decided to focus R&D investments on areas with stronger long-term potential [106] Other Important Information - The company is in constructive discussions with the Workers Council regarding capacity needs and potential headcount adjustments [12][38] - The company is preparing for a Capital Markets Day in October, which will focus on the Just Evotec Biologics business [35] Q&A Session Summary Question: What is driving the 70% growth in discovery work? - The growth is attributed to integrated offerings that provide near-term margins, although the demand from biotech funding has not significantly improved [43] Question: Can you clarify the EBITDA guidance for 2024? - The guidance suggests a mid-double digit percentage growth, with a target around €95 million [17][47] Question: What are the dynamics for Q2 revenue growth? - Q2 is expected to show similar trends to Q1, with a focus on H2 for more visible revenue growth [54][95] Question: How long does it take for orders to translate into sales? - It typically takes six to eight months for large contracts to translate into revenue, with some faster-moving business taking weeks [101] Question: What is the status of the gene therapy business? - The decision to exit the gene therapy business was made due to technological challenges and the need for further innovations [106]