Evotec SE

Ladies and gentlemen, welcome to the Evotech SE half-year report 2025 conference call. I am Mathilde, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Volker Braun, head of IR and ESG. Please go ahead.

Thank you, Matilda, and good morning, good afternoon to everyone in the call. Thank you for joining us today. Today, we will cover our first half 2025 results, and we will discuss the progress we have made in the execution of our strategy as well as the key operational and external developments. We will, of course, also provide an update on the evolution of the Just Evotate Biologics business, of which the plant Sandoz deal is part of. However, because of the running process, we will not dwell in the details as such. We appreciate your understanding. Before we start, the usual 30 seconds on housekeeping items. On page two, we share the cautionary language with you. Some statements will be future-looking based on information available today, and they might be subject to change in future. But now let me hand over to the CEO of Evotech, Dr. Christian Wojcicki. Christian, please.

Good afternoon and welcome to our H1 call. In April this year, we unveiled a new strategy, a strategy that sharpens our focus on pioneering drug discovery and development. With a plan to center our business around its core technology and scientific strengths, to cultivate operational excellence, and to place us on the path to sustainable, profitable growth. As we reflect on the first half of 2025, we can say with confidence that we've made meaningful progress on our journey. Our transformation efforts are on track in delivering tangible gains. Just EvoTech Biologics remains on a strong growth path, driven by our unrelenting focus on technology leadership and biologics. In other areas, we're actively managing continuing market challenges. We'll talk about all of this today. To be in a position to sustainably shape the future, we are following a structured and disciplined process and we're delivering on it. We took immediate action in 2024 when resetting priorities was essential. and we're ahead of plan in achieving our cost-saving targets. Paul will elaborate on this later. In Q3 2024, we announced the launch of an in-depth strategic review, which we completed according to plan. The retooling of Evotech is starting to materialize. We're strengthening our competitive position in the field of drug discovery by focused investments into our technology platforms. A great example is the expansion of our molecular patient database. And we're further evolving our business model at JustEvoTech Biologics. Next on our agenda, we're now aligning the organization with our strategy. This work is currently underway and we expect it to be completed before end of the year, ensuring we are all well positioned to compete and perform even more effectively in the years ahead. The core element of our new strategy is to sharpen our offer and reduce complexity. Furthermore, we're upgrading our commercial model, providing standalone services, integrated bug discovery, and strategic partnerships. The business segmentation and terminology of our reporting should reflect our new setup. Consequently, going forward, we will have two core business segments reported as Discovery and Preclinical Development, DNPD, and Just Evotech Biologics, JEP. DNPD covers our discovery and development activities for small molecules and new modalities from target identification to IND. Just Evotech Biologics is covering our large molecules business. Our vision unites both business segments. We are unleashing innovation to enable our partners to develop life-changing medicines. Pioneering drug discovery and development for us means leveraging cutting-edge technology, disruptive science, and AI-driven innovation to drastically accelerate the journey from concept to cure. Let me now share with you some observations on the developments during the first six months of the year. H1 has not been without its challenges. we saw a revenue decline in our discovery and preclinical development segment of 11%. A large part of that is related to a temporary effect in our BMS collaboration. The remainder is driven by continued softness in the early drug discovery market. In the first half, we've seen higher negative change orders compared to the previous period. Most of these change orders are related to scientific reasons. and the impact can be volatile. In the start of the second half this year, we are back to normalized levels of change orders. Furthermore, since beginning of Q2, we are seeing a steady increase in number and value of proposals going out to customers. We continue to progress well in both of our collaborations with BMS, in urology and oncology. In Q2, we further expanded the scope of our molecular patient database by joining the Nurture Consortium. I will share the strategic rationale with you later on the call. We initiated the rollout of a new operating model to align our organization with our strategy to simplify our segment structure, reduce management complexity and layers, most importantly to increase accountability for results in all parts of the organization. It isn't just a reorganization, it's a reorientation towards both operational and science excellence. JustAvotech Biologics continues to outperform. With 16% revenue growth year over year, JEP is not only enjoying high demand and delivering strong results above our expectations, It is validating our vision, a vision where we shape a new segment in the biologics manufacturing market with differentiated and scalable technology. We remain bullish about the prospects of our JEP business. At the end of July, we announced the planned sale of our Toulouse site to Sandoz. This is a natural progression in the J-Port lifecycle. And it marks a major milestone in our strategy to lean into Jeff's capabilities as a scalable technology provider with an asset lighter model. Now, let me spend a few words on the relevant market environment we are operating in. We're navigating a complex funding landscape in biotech. While venture capital inflows are stabilizing at pre-pandemic levels, the distribution remains uneven. Early stage investments, such as seed and series A rounds, which typically support companies with projects in discovery or preclinical phases, continue to lag behind later stage funding. The funding equilibrium between discovery and preclinical on the one side and clinical stage companies on the other has yet to be achieved. We continue to observe a cautious spending behavior in earlier stage R&D. In contrast, clinical programs, many of which originated during the well-funded pandemic years, benefit from more robust financial backing and spending. Our customer base in biotech is mostly focused on discovery and preclinical research. Funding for this sector is still behind normal pre-pandemic levels, and spending behavior, therefore, is more careful. Signs of a modest recovery in funding are emerging. Over the coming quarters, we expect a more normalized distribution of funding and project flow to take shape. Let me now hand over to Paul Hitchen, our CFO, to guide you through the H1 financials. Paul, please.