Evotec SE

Thank you, Sandra, and good day, good morning to all of you in the call, the Q1 2024 results call. I trust you have seen the press release this morning, and we are happy to share more details with you today. Before we do that, it's my obligation to familiarize you with the cautionary language as outlined on page two. And with that, I would like to hand over to Mario Proluca, our interim CEO. Please, Mario, go ahead.

Thank you, Volker, and a very warm welcome to everyone on the call. The entire management team is present in this call with me, and they will do the main update on the development of the first quarter and on the program we have initiated in resetting and right-sizing EtherTech for future profitable growth. So welcome, Leticia, Matthias, Craig, and Cord. I will spend a few moments on recapping the developments in Q1 before handing over to Leticia and Mateus for the majority of the presentation. On slide six, we give a brief summary of our Q1 developments. Our business, like many of our peers, continues to operate in a challenging market environment. It is clear that the more differentiated our offering is, the better positioned we will be to grow our business in the future. For clarity, you will see and Leticia will discuss further later, we have moved our reporting to shared R&D and just Evotech biologics. So in Shared R&D, despite the poor market conditions, we have still closed a number of exciting deals, including the AI-powered strategic partnership with Alkin, precision medicine collaboration in cardiology with Bayer, and of course our strategic partnerships with BMS continue to make good progress. Despite our 22% revenue decline in 2020, shared R&D in Q1 of 2024 versus Q1 of 2023, which you will all remember was the strongest in our history. On a more positive note, the 70% increase in our discovery sales book points to a recovery in the second half of 2024. Just Evotech Biologics, as Matthias will describe in more detail later, has made good progress, especially within the tech partnership with Sandoz and a number of new projects. The revenue growth over Q1 of 23 is nearly 400% and the breakeven in EBITDA is a strong signal as to the health and huge potential of this business. You will hear as well from Leticia that our reset initiative as described in the April call is progressing well and remains the key focus to return Evotech to its strong profitability position. Firstly, however, it's my honor to pass over to Laetitia to walk you through the Q1 financials. Over to you, Laetitia.

Thank you, Mario. In Q1 2024, we achieved 208.8 million revenue, which represents a slight 2% decrease compared to the same period in 2023. While the decrease was driven by a decline in our shared R&D business, minus 23% versus prior year, primarily on the transactional side, we have seen remarkable growth at just Evotech biologics reaching 53.5 million revenue in Q1, as mentioned by Mario, above 380% growth versus same period last year. The growth as just biologics was driven by higher revenues due to our collaboration with Sandoz, the Department of Defense and others in what has been an exceptionally strong quarter. The new factory in Toulouse, France is expected to be fully operational in Q1 2025. Our gross margin experienced some pressure, declining to 17% from 25% due to our high fixed cost base in shared R&D and the ramp up of the capacity at just Evotech Biologics. We remain committed to investing in the future with R&D expenses of 16.2 million in Q1. However, we reduce spending from 18.5 million in Q1 2023 to 16.2 as we focus on platforms that are best aligned with the strategic fit and relevance for our partners. Adjusted group EBDA for Q1 2024 was 7.8 million, marking a 73% decline from prior year, mainly driven by higher revenues and low overall cost increase. To sum up, we face another challenging quarter in Q1 that showed solid underlying performance, however, was held back by high fixed cost base and slow market demand on the transactional business. which we are addressing through priority reset over the next quarters. This is the first period in which we report our new segment logic, shared R&D and just Evotech biologics, which reflects the way we manage the business internally, minimizes the inter-segment elimination, and gives better transparency to just Evotech biologics. You can find the restated Q1 2023 figures in our Q1 financial statement. As we already discussed the revenue and margin developments of the previous page, I only comment on the SG&A expenses, which totaled 45.9 million in Q1, 8% increase compared to last year. The increase was primarily driven by higher IT expenses to upgrade and introduce new system as well as additional people to strengthen the end-to-end global processes and systems. As you can see, our balance sheet continues to offer a solid base for our strategic execution. While total asset decreased slightly to 2,208,700,000, our equity ratio remains around 50%. Our cash flows were impacted in Q1 by a challenging operational environment and certain exceptional effects such as elevated payables balance at 2023 year end. This cash outflow combined with our reduced LTME BDA has resulted in an increase in our net debt ratio to 2.9. We expect our cash outflow, while remaining negative, to materially improve over the coming quarters as our operational profitability improves and we complete committed capex investments such as Just Toulouse. So while our net debt ratio may increase slightly in future quarters, we continue to have strong financial flexibility to navigate the current environment with over 500 million in liquidity at the end of Q1. I will now hand over to Mathias who will guide you through our strategic and operational update.