Evotec SE

Welcome to all of you. Welcome to our half year.

Q2 were partially mitigated due to the signing of the technology partnership with Sandoz. Still adjusted BDA Q2 was in a negative territory of 8.2 million in Q2. Moving page 11, summarizing a selected balance sheet and cash flow items for Evotech. With an equity ratio of 51% compared to 52.6% as of December 2022, we remain with a very solid basis for future investments as it provides us with considerable financing flexibility. Cash flow used in operating activities in the first six months amounted to minus 5.6 million. The comparable figure last year was a cash flow of 240 million and was largely driven by a 200 million upfront payment from BMS in H1 2023. This figure is impacted by the cyber incident and does not yet reflect payments in connection with the BMS collaboration and the agreement with Sandoz, which were received in July after Q2 end. The net debt leverage ratio amounted to minus 0.9 times of adjusted EBITDA, which means we still maintain a net cash position. The group liquidity, as per end of June, amounted to 620.8 million. We continue to invest significantly into the growth of our sites and our offering into JPOD facilities in Toulouse in the first semester. This is reflected in CAPEX, which amounts to 104 million in H1. In addition, we finance our equity and minority shareholding with 9.2 million. Moving page 12 has presented in our business update end of July based on our regular review of our economic situation and our order book status. Our guidance was adjusted with revenue now expected to come in a range of 750 to 790 million. Unpartnered R&D expenses to reach 60 to 70 million and adjusted EBDA in a range of 60 to 80 million for the full year. Slide 13 shows the bridge amount between the original guidance and the revised one. We estimate revenues net of 770 million missed in Q2 due to the cyber attack. We see the visible partnering pipeline as strong, but are seeing buyers dynamic in more service-oriented business. Overall, we think we will be able to catch up and generate additional revenue of 20 to 40 million in Q3 and Q4. Earlier and better than anticipated, effects from advanced payments are mitigating part of the negative effects. With slide 14, I would like to introduce to you our initiative to bounce back ever better after Q2. with a so-called value protection plan, which includes a variety of activities we aim to secure liquidity and profitability. The identified savings potential for 2023 is representing 25 million. Furthermore, we continue to improve processes and systems as well as improve GMP compliance, good manufacturing practice, We are preparing for a focus ERP build out in the UK and for the Chez Pod site in Toulouse in Europe. A strategic review has been started which targets a portfolio realignment including capabilities and capacities. Finally, we will continue to invest in focus areas for technology leadership. Moving to page 15, we estimate the net impact of one-off cost to rebuild the business together with missed revenues of 80 to 85 million. As mentioned before, with the value protection plan, we aim to build a leaner and safer organization targeting 25 million in cost savings. This will also result in recurring savings in 2024 and beyond. The new strategy collaboration with Janssen and Sandoz as well as the expanded collaboration with BMS contribute significantly and help to mitigate the misrevenue and profitability resulting from the cyber so that we updated adjusted EDA guidance to 60 to 80 million. With this, I hand over back to you, Werner.

Thank you very much, Leticia. We are building the shared research and development economy in our industry. With this, it is essential to also build leading platforms in this industry to drive progress. So we pride ourselves not only to have the most cost-efficient and cost-effective platforms, these are also the most innovative platforms at this stage available in our industry. Let me name them. It's panomics, so omics-driven discovery and drug development. It's iPSCs in cell therapies, so using induced pluripotent stem cells for off-the-shelf solutions. And it's just Evotech biologics. And we bring this all together in an end-to-end shared R&D platform, which is accessible for more than 800 partners in our industry. Here are just a few examples of what we can do when we are applying this. So page 17 illustrates to you how we are building this massive royalty pool with our partners by fully leveraging these technologies. Going strong with Bristol's, going strong with Janssen, going into a tech partnership with Sando and also building with IPSCs a cure for diabetes together with Cernova is just highlighting the potential of these platforms in all four areas. And if you go one page forward, you see how every building block is bringing this into a portfolio in several disease areas where they're very strong and along the full value chain from clinical projects to a massive iceberg of preclinical and discovery projects that is growing over time. So yes, this is the long game that so many people have asked us to build. And yes, this is the idea of going into the same direction with a very clear strategy to build these co-owned assets. And yes, if you go to the next page, you see that this comes with a massive cascade of milestones where we are just starting. to collect and to come to the data points of the milestone cascade, which already exists. So behind Action Plan 2025 and into the future, you see illustrated here into the year 2040, that we have already built a massive pool of opportunities, which biology will now decide of how much we can collect of these more than 15 billion that are visible here. Now, going to the next page, and let me step back here for a second, because it comes to just Evotech Biologics. And I'm very often thinking back to our Capital Markets Day, which we held in November in Seattle last year, where the key question was, so will you ever find partners for these platforms? And we were just starting to create a sales order book which was stretching itself to go to the $100 million sales. Now, only a few months later, we are approaching a billion of committed sales into just Evotech Biologics. And this is why I really think we are witnessing an iPhone moment in this industry when it comes to fully continuous manufacturing for biologics. Because higher degrees of automatization and fully continuous manufacturing will bring down cost of goods and with this fulfill the original mission of just Evotech Biologics to gain access with novel products for massively more people on this planet. So watch out for just evotech biologics. This is just the beginning of a technology which will change the world and with this also the access to biologics. And that's why we are preparing what you see on page 21 for a capacity build, which is not driven by the thought of more capacity, but which is driven by the thought of a paradigm shift of technology. to really allow novel technology to build better biologics. And we are so happy that this paradigm shift is happening and is validated by the strongest and best partners that you can find in industry, for example, with Sandor, but also in public governments or in public institutions, like with the Department of Defense in the United States. And again, this is just the beginning of what we will do in the US and increasing in Europe, where J-POD 2 is in full swing very soon because we are keeping our timelines in building our J-POD in Toulouse where we have just installed recently our pods to also then establish manufacturing processes here. I couldn't be more excited about Trust Devotech Biologics as I am right now. Having said that, I also couldn't be more excited about Panomics, about iPSC cell therapies, and about our R&D end-to-end platform. When it comes to our next chapter on this presentation, let me please guide you to page 23, because it is so important for us not only to build a company, but it is important for us to contribute with our company to the planet. And with this, we are keeping our promise when it comes to our contribution to the environment, our contribution to social welfare and social well being on this planet. And when it comes to our contribution to better governance. With this we are showing you our goals of 23 and are happy to report back that all goals of 23 will be operationally executed as planned. If you go to page 24, let me, when it comes to operational execution, also tell you one more time that we will increase our pace in the second half after a stop which we had to take to protect data and our partners. And with this, I think we are really just at the beginning for the start of a very strong second half where you will see Omics, IPCCs, just Evotech Biologics and our end-to-end shared R&D platform deliver to contribute into a growth of 24, where we still think that despite a softer funding environment, our market offering is intact. And also, let me highlight on page 20, that you will see several pipeline projects emerging from this pipeline into visibility by transitioning from one phase to the next. And this is where we go from phase three projects, for example, in Asia, to very exciting preclinical projects going into the clinic with our partners. And at this point in time, let me thank you that you are following Evotech and that you are ready to also understand what we are doing and also translate this into your environments. And we are very happy to discuss. and to make our story more visible to even more of you and that's why you will see us at several conferences in the second half of 23 which we have illustrated here on page 26 for you and would be great to see you there or otherwise please be invited to our second capital markets day which will hold on the 15th of november with this for h1 let me summarize It is really a half year with two sites at this stage, a great start and an unexpected stop. But we are coming out of this stronger than ever, with more energy than ever, and with the most impressive technologies to bring our platforms forward together with our partners. And with this, I want to thank my team. I want to thank the company for all the help that we have received, also many of our outside partners.