Evotec Announces First Quarter 2017 Results and Corporate Update

- VERY POSITIVE START 2017 WITH STRONG REVENUES AND PROFITS

- MILESTONES ACHIEVED WITH BAYER AND SANOFI

- CONTINUED PORTFOLIO EXPANSION AND STRATEGIC INVESTMENTS

- SUCCESSFUL INTEGRATION OF CYPROTEX

- NOVO A/S NEW STRATEGIG INVESTOR IN EVOTEC

HAMBURG, Germany--()--Evotec AG (Frankfurt Stock Exchange: EVT, TecDAX, ISIN: DE0005664809) today reported financial results and corporate updates for the first quarter of 2017.

FINANCIAL PERFORMANCE: STRONG START - EXCEPTIONAL GROWTH IN REVENUES AND ADJUSTED EBITDA

- Group revenues: 34% increase to EUR 50.2 m (2016: EUR 37.5 m);

EVT Execute revenues up 24% to EUR 47.9 m (2016: EUR 38.6 m);

EVT Innovate revenues up 96% to EUR 12.6 m (2016: EUR 6.4 m)

- Adjusted Group EBITDA increased to EUR 13.2 m (2016: EUR 7.2 m);

Adjusted EBITDA for EVT Execute increased to EUR 12.2 m (2016: EUR 9.6 m);

Adjusted EBITDA for EVT Innovate increased to EUR 1.0 m (2016: EUR (2.4) m)

- R&D expenses up 6% to EUR 4.7 m (2016: EUR 4.4 m);

- Strong strategic liquidity position of EUR 185.0 m

EVT EXECUTE - STRONG OPERATIONAL PERFORMANCE

- Significant progress within ongoing alliances

- New integrated drug discovery agreements, e.g. with Dermira (USA) and Asahi Kasei Pharma (Japan)

- Strong start for Cyprotex PLC with positive contribution to revenue and adjusted EBITDA

EVT INNOVATE - LEADING DRUG DISCOVERY INNOVATION

- Significant first milestone demonstrating pre-clinical proof of concept within diabetes alliance with Sanofi (TargetBCD)

- Initial milestone achievement in multi-target alliance with Bayer in kidney diseases (CureNephron)

- Continuing equity financing activities (e.g. Forge Therapeutics and Eternygen)

CORPORATE

- NOVO A/S new strategic investor in Evotec holding >10%; Nomination for election to Supervisory Board at the AGM (Michael Shalmi, Novo A/S; after period-end)

GUIDANCE 2017 CONFIRMED

1. FINANCIAL PERFORMANCE

STRONG START - EXCEPTIONAL GROWTH IN REVENUES AND ADJUSTED EBITDA

The 2016 and 2017 results are not fully comparable. The difference stems from the acquisition of Cyprotex PLC ("Cyprotex"), effective 14 December 2016. The results from Cyprotex are only included from 14 December 2016 onwards.

In the first quarter of 2017, Evotec's Group revenues grew to EUR 50.2 m, an increase of 34% compared to the same period of the previous year (2016: EUR 37.5 m). This increase resulted primarily from an increase in base revenues, the contribution from Cyprotex (EUR 6.0 m) and milestone payments. Evotec's base revenues for the first quarter of 2017 were EUR 44.0 m, an increase of 30% over the same period of the previous year (2016: EUR 33.9 m). Revenues from milestones, upfronts and licences increased to EUR 6.2 m compared to the same period of the previous year (EUR 3.6 m) including predominantly milestones from the collaboration with Bayer and Sanofi. The gross margin amounted to 37.4% in the first three months of 2017 (2016: 33.3%). This significant margin increase over 2016 primarily reflects growth in base revenues, high milestone achievements, improved capacity utilisation as well as favourable foreign exchange rate effects.

In the first quarter of 2017, Evotec's R&D expenses amounted to EUR 4.7 m (2016: EUR 4.4 m). This increase is in-line with the Company's strategic plans and primarily results from focused investments in oncology and metabolic projects. Selling, general and administrative (SG&A) expenses increased as expected by 36% in the first quarter of 2017 to EUR 7.3 m (2016: EUR 5.4 m). This increase mainly results from expenses of Cyprotex including moving costs as well as an increased SG&A headcount in response to Company growth.

Adjusted Group EBITDA in the first quarter of 2017 increased significantly and amounted to EUR 13.2 m (2016: EUR 7.2 m). Group EBITDA was adjusted for changes in contingent consideration. Evotec's operating income in the first quarter of 2017 amounted to EUR 9.7 m (2016: EUR 2.7 m).

Liquidity, which includes cash and cash equivalents (EUR 77.6 m) and investments (EUR 107.4 m) amounted to EUR 185.0 m as of 31 March 2017 (31 December 2016: EUR 126.3 m). This strong increase is mainly due to the capital increase with Novo A/S announced in February 2017.

Revenues from the EVT Execute segment amounted to EUR 47.9 m in the first quarter of 2017 (2016: EUR 38.6 m) and included EUR 10.3 m of intersegment revenues (2016: EUR 7.5 m). This increase was mainly driven by the strong performance of the base business and three months revenue contribution from Cyprotex. The EVT Innovate segment generated revenues of EUR 12.6 m (2016: EUR 6.4 m) consisting entirely of third-party revenues. This increase compared to the same period of the previous year results mainly from milestone payments from the Bayer and Sanofi partnerships. Gross margin for EVT Execute amounted to 27.1% while EVT Innovate generated a gross margin of 56.9%. R&D expenses for the EVT Innovate segment amounted to EUR 5.8 m in the first quarter of 2017 (2016: EUR 4.9 m). In the first quarter of 2017, the adjusted EBITDA of the EVT Execute segment was positive at EUR 12.2 m and improved compared to the same period of the previous year (2016: EUR 9.6 m). The EVT Innovate segment reported a positive adjusted EBITDA of EUR 1.0 m (2016: EUR (2.4) m).

2. EVT EXECUTE & EVT INNOVATE

EVT EXECUTE - STRONG OPERATIONAL PERFORMANCE

The first quarter of 2017 saw a strong operational performance in the EVT Execute segment. Cyprotex had a strong start and its integration into the Evotec Group is proceeding according to plan. At the beginning of the year 2017, the UK operations of Cyprotex moved from Macclesfield to Alderley Park which allows for future expansion and consolidation of Cyprotex' UK operations into a first-class scientific facility.

In addition and amongst other highlights, Evotec entered into a new integrated lead discovery collaboration with Dermira to identify inhibitors of a novel target for treatment of itch and neuro-inflammation. Under the terms of the agreement, Dermira takes advantage of Evotec's expertise and proprietary, industry-leading capabilities for rational design of molecules and integrated drug discovery capabilities.

EVT INNOVATE - LEADING DRUG DISCOVERY INNOVATION

EVT Innovate started strongly in 2017 with multiple important milestones achieved in its alliances with Bayer in kidney diseases and with Sanofi in diabetes.

Alongside its EVT Innovate strategy, Evotec continues to participate in equity financings with the aim of developing assets to next value inflection points. Along these lines, Evotec further expanded its relationship with Forge Therapeutics by participating in Forge's latest funding round (Series A).

3. CORPORATE

NOVO A/S NEW STRATEGIC INVESTOR IN EVOTEC

On 09 February 2017, Evotec announced that through a private placement capital increase, Novo A/S invested EUR 90.3 m against shares of Evotec. Subsequent to this initial investment, Novo A/S increased its shareholdings in Evotec to above 10% by acquisition of additional shares through public markets.

4. GUIDANCE 2017 CONFIRMED

 

Guidance 2017

 

Actual 2016

Group revenues More than 15% growth EUR 164.5 m

Adjusted Group EBITDA1)

Significantly improved compared to 2016 EUR 36.2 m
R&D expenses Approx. EUR 20 m EUR 18.1 m
1)   EBITDA is defined as earnings before interest, taxes, depreciation, and amortisation of intangibles. EBITDA excludes impairments on goodwill, other intangible and tangible assets as well as the total non-operating result. EBITDA is adjusted for changes in contingent consideration as well as for the income from bargain purchase.

Webcast/Conference Call

The Company is going to hold a conference call to discuss the results as well as to provide an update on its performance. Furthermore, the Management Board will present an outlook for the fiscal year 2017. The conference call will be held in English.

Conference call details Date:

Wednesday, 10 May 2017

Time: 02.00 pm CEST (01.00 pm BST/08.00 am EDT)

From Germany: +49 69 22 22 29 043

From UK: +44 20 3009 2452

From USA: +1 855 402 7766

From France: +33 170 750 705

Access Code: 37969784#

A simultaneous slide presentation for participants dialling in via phone is available at www.audio-webcast.com, password: evotec0517.

Webcast details

To join the audio webcast and to access the presentation slides you will find a link on our home page www.evotec.com shortly before the event.

A replay of the conference call will be available for 24 hours and can be accessed in Europe by dialling +49 69 22 22 33 985 (Germany) or +44 20 20 3426 2807 (UK) and in the USA by dialling +1 866 535 8030. The access code is 654573#. The on-demand version of the webcast will be available on our website: https://www.evotec.com/article/en/Investors/Finance/Financial-Reports-2015-2017/188/6/26.

ABOUT EVOTEC AG

Evotec is a drug discovery alliance and development partnership company focused on rapidly progressing innovative product approaches with leading pharmaceutical and biotechnology companies, academics, patient advocacy groups and venture capitalists. We operate worldwide providing the highest quality stand-alone and integrated drug discovery solutions, covering all activities from target-to-clinic to meet the industry's need for innovation and efficiency in drug discovery (EVT Execute). The Company has established a unique position by assembling top-class scientific experts and integrating state-of-the-art technologies as well as substantial experience and expertise in key therapeutic areas including neuroscience, diabetes and complications of diabetes, pain and inflammation, oncology and infectious diseases. On this basis, Evotec has built a broad and deep pipeline of more than 70 partnered product opportunities at clinical, pre-clinical and discovery stages (EVT Innovate). Evotec has established multiple long-term discovery alliances with partners including Bayer, CHDI, Sanofi or UCB and development partnerships with Sanofi in the field of diabetes, with Pfizer in the field of tissue fibrosis and with Celgene in the field of neurodegenerative diseases. For additional information please go to www.evotec.com and follow us on Twitter @EvotecAG.

FORWARD LOOKING STATEMENTS

Information set forth in this press release contains forward-looking statements, which involve a number of risks and uncertainties. The forward-looking statements contained herein represent the judgement of Evotec as of the date of this press release. Such forward-looking statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, and which could cause actual results to differ materially from those contemplated in these forward-looking statements. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based.

Key figures first quarter 2017

Key figures of consolidated interim income statement

Evotec AG and subsidiaries

In TEUR except share data and per share data

 

January to

 

March

  Change
2017 2016 in %
 
Revenues 50,184 37,479 34
Gross margin in % 37.4 33.3
 
Research and development expenses (4,651) (4,386) 6
Selling, general and administrative expenses (7,314) (5,367) 36
Impairment of intangible assets - (1,417)
Other operating income (expenses), net 2,893 1,443
 
Operating result 9,710 2,744
Adjusted Group EBITDA* 13,233 7,234 83
 
Net income (loss) 6,884 (1,172)
 
Weighted average shares outstanding 139,717,125 132,334,308
Net loss per share (basic/diluted) 0.05 (0.01)
*   Before contingent considerations, income from bargain purchase and excluding impairments on goodwill, other intangible and tangible assets as well as the total non-operating result

Segment information: First quarter 2017

First quarter of 2017

In TEUR

 

EVT

  EVT Innovate   Intersegment eliminations   Evotec

Execute

Group
 
External revenues 37,637 12,547 - 50,184
Intersegment revenues 10,270 - (10,270) -
Gross margin in % 27.1 56.9 37.4
 
R&D expenses (222) (5,789) 1,360 (4,651)
SG&A expenses (5,816) (1,498) - (7,314)
Other operating income (expenses), net
1,987 906 - 2,893
 
 
Operating result 8,946 764 - 9,710
 
Adjusted EBITDA* 12,185 1,048 13,233
*   Before contingent considerations, income from bargain purchase and excluding impairments on goodwill, other intangible and tangible assets as well as the total non-operating result

First quarter of 2016

In TEUR

 

 

EVT

Execute

 

EVT Innovate

 

Intersegment eliminations

 

Evotec

Group

 

 

 
External revenues 31,067 6,412 - 37,479
Intersegment revenues 7,497 - -7,497 -
Gross margin in % 26.1 46.1 33.3
 
R&D expenses -57 -4,865 536 -4,386
SG&A expenses -4,345 -1,022 - -5,367
Impairment of intangible assets - -1,417 - -1,417
Other operating income (expenses), net 1,099 344 - 1,443
Operating result 6,750 -4,006 - 2,744
 
Adjusted EBITDA* 9,605 -2,371 7,234
*   Before contingent considerations, income from bargain purchase and excluding impairments on goodwill, other intangible and tangible assets as well as the total non-operating result

Key figures of consolidated interim statement of financial position

Evotec AG and subsidiaries

In TEUR

  31 March   31 Dec   Change
2017 2016 in %
 
Cash, cash equivalents and investments 184,975 126,270 47
Working capital 4,924 (8,822)
Current and non-current loan liabilities 8,170 28,607 (71)
Total stockholders' equity 313,334 213,936 46
 
Total assets 418,752 351,366 19
Language:   English
Company: Evotec AG
Manfred Eigen Campus / Essener Bogen 7
22419 Hamburg
Germany
Phone: +49 (0)40 560 81-0
Fax: +49 (0)40 560 81-222
E-mail:

info@evotec.com

Internet:

www.evotec.com

ISIN: DE0005664809
WKN: 566480
Indices: TecDAX
Listed:

Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin,
Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange

 

Contacts

Evotec AG
Gabriele Hansen
VP Corporate Communications & Investor Relations
Phone: +49.(0)40.56081-255
gabriele.hansen@evotec.com

Contacts

Evotec AG
Gabriele Hansen
VP Corporate Communications & Investor Relations
Phone: +49.(0)40.56081-255
gabriele.hansen@evotec.com