Evotec SE Unveils New Strategy and Provides 2025 Guidance Bolstered by Strong Q4 2024 Results

Rhea-AI Summary

Evotec SE (NASDAQ:EVO) has announced its FY 2024 results and unveiled a new strategic direction focused on drug discovery and biologics. The company reported a 2% revenue increase to €797.0 million, with Q4 2024 revenues up 10% to €221.2 million.

Key highlights include:

• Just - Evotec Biologics segment grew 71% year-over-year to €185.6 million
• Adjusted Group EBITDA reached €22.6 million
• Priority Reset program on track to deliver €40 million in annual savings
• Net debt leverage ratio improved to 1.9x

For 2025 guidance, Evotec expects:

• Revenue range of €840-880 million
• R&D expenditure of €40-50 million
• Adjusted Group EBITDA of €30-50 million

The company's 2028 outlook targets revenue CAGR of 8-12% (2024-2028) and adjusted EBITDA margin above 20%.

Positive

• Q4 2024 revenue grew 10% to €221.2 million
• Just - Evotec Biologics segment revenue surged 71% YoY
• Net debt leverage ratio improved to 1.9x
• New partnerships secured with Sandoz, BMS, Novo Nordisk, and Pfizer
• Priority Reset program to deliver €40 million annual savings

Negative

• Shared R&D revenues decreased 9% to €611.4 million
• Adjusted Group EBITDA declined to €22.6 million from €66.4 million in 2023
• One-off costs of €54.9 million from Priority Reset program
• Shared R&D revenues expected to remain flat in 2025

Insights

Financial Analyst

Evotec's strategic reset aims to improve profitability with promising growth in biologics, while overall financials show mixed performance requiring execution on cost initiatives.

Evotec's strategic repositioning marks a significant pivot toward sustainable profitability after a challenging 2024. The financial results reveal a company in transition, with modest 2% overall revenue growth to €797.0 million but a concerning drop in adjusted EBITDA to €22.6 million from €66.4 million in 2023.

The standout performer is the Just - Evotec Biologics segment, which delivered exceptional 71% year-over-year growth, contributing €185.6 million to overall revenue. This biologics success partially offset the 9% decline in the Shared R&D segment, which management attributes to temporary pharmaceutical restructuring and selective biotech funding.

The company's financial trajectory shows promise with Q4 delivering 10% revenue growth to €221.2 million, indicating potential business acceleration. Management's 2025 guidance of 5-10% revenue growth (€840-880 million) and improved EBITDA (€30-50 million) suggests confidence in their strategic reset.

The company's dual cost-cutting initiatives—€40 million from Priority Reset plus €50+ million from operational excellence by 2028—represent substantial potential profitability improvement relative to current EBITDA levels. These measures, combined with portfolio streamlining (reducing assets by ~30%) and exiting equity positions, demonstrate a disciplined approach to capital allocation.

Key partnerships with pharmaceutical giants like Bristol Myers Squibb, Pfizer, and Novo Nordisk provide valuable validation of Evotec's technology platform and create recurring revenue streams that support the 2028 targets of 8-12% CAGR and 20%+ EBITDA margins. Successful execution of this strategic pivot will be critical for realizing these ambitious projections.

Biotech Industry Specialist

Evotec's strategic refocus on drug discovery and biologics strengthens their market position, with impressive biologics growth offsetting softness in traditional services.

Evotec's strategic realignment represents a crucial evolution for the company, focusing on its scientific and technological strengths while addressing efficiency challenges. The decision to concentrate on two core pillars—Drug Discovery & Pre-clinical Development and Just - Evotec Biologics—aligns with industry trends toward specialized, high-value services powered by advanced technology.

The biologics business demonstrates exceptional commercial traction, growing 71% year-over-year to €185.6 million, highlighting the market demand for Evotec's differentiated biologics capabilities. The company's pivot to an "asset lighter model" in this segment suggests improved capital efficiency and risk profile moving forward.

Evotec's portfolio rationalization, reducing assets by approximately 30%, indicates disciplined resource allocation toward high-potential programs. The emphasis on next-generation platforms and AI integration positions the company at the technological forefront of drug discovery—a critical competitive advantage in an increasingly technology-driven industry.

The expanded partnerships with major pharmaceutical companies validate Evotec's scientific approach and provide stable revenue streams. Particularly noteworthy are the extended Bristol Myers Squibb collaboration in neuroscience and protein degradation, the Novo Nordisk cell therapy initiative, and the Pfizer partnership focusing on metabolic and infectious diseases—all representing high-value therapeutic areas.

While the 9% decline in Shared R&D revenues reflects ongoing biotech funding constraints and pharmaceutical restructuring, Evotec's strategic pivot toward higher-value, technology-differentiated services positions the company for long-term sustainability once market conditions normalize. Their targeted 8-12% CAGR through 2028 appears achievable given their biologics momentum and strengthened pharmaceutical partnerships.

• Evotec sharpens focus on pioneering drug discovery and charts clear path toward sustainable profitable growth

• Strategy builds on technology and science leadership, focusing on high-growth, high-value segments, simplifying the business model and fostering operational excellence

• Strong Q4 2024 revenue and EBITDA results in spite of challenging market conditions. Full year guidance met, with liquidity significantly improved

• Priority Reset on track to deliver annualised recurring gross savings of € 40 m

• 2025 guidance: group revenues to grow 5 - 10 % (€ 840 - 880 m); 2028 outlook foresees revenue CAGR_2024-2028 between 8 - 12% and generation of EBITDA margin above 20 %

HAMBURG, GERMANY / ACCESS Newswire / April 17, 2025 / Evotec SE (Frankfurt Stock Exchange:EVT, MDAX/TecDAX, ISIN:DE0005664809; NASDAQ:EVO) today announced its financial results for FY 2024, provided guidance for FY 2025 and outlook for 2028 reflecting the path to sustainable profitable growth, following the completion of its strategic review process.

Dr Christian Wojczewski, Chief Executive Officer of Evotec, said:
"Evotec's ambitious new direction paves the way for sustainable profitable long-term growth. We are refocusing Evotec on its core strengths: technology and science leadership, where we deliver maximum impact for customers and patients. By combining cutting-edge technology platforms, disruptive science, and AI-driven innovation, we are accelerating the journey from concept to cure with our partners. We delivered on 2024 financial guidance, and I am excited about the opportunities that lie ahead of us. Together with our talented teams, we are writing the next chapter of Evotec's success story as a drug discovery pioneer."

Evotec unveils new strategy to refocus on core strengths and define clear roadmap to sustainable profitable growth

• Technology and science leadership - refocusing on our strong, unique heritage

• Two pillars: Drug Discovery & Pre-clinical Development (Shared R&D) and Just - Evotec Biologics

• Drug Discovery & Pre-clinical Development will leverage automation, industrialisation, next generation platforms and AI to accelerate our customers journey and to increase their success rates

• Business model simplified: focus on high-value services and therapeutic areas, asset portfolio streamlined by ~30 %, R&D supporting next-generation technology development. Exiting equity participations

• Just - Evotec Biologics growth underpinned by existing partnerships and further strengthened by leveraging its capabilities as a scalable technology and service provider, anticipating pivot to an asset lighter model

• Beating market growth via our scientific and operational expertise, focus, and differentiated technology

• Commitment to operational excellence for a step-change in performance. Driving operational leverage through our backbone with higher focus on automation. Anchored cost-out initiatives via refined footprint, optimised COGS and SG&A delivering > € 50 m gross savings by 2028 on top of Priority Reset (€ 40 m)

2024 revenue and EBITDA within guidance. Priority Reset on track. Q4: Second highest quarterly revenues ever amid challenging market environment

• Group revenues increased by 2 % to € 797.0 m (2023: € 781.4 m); Q4 2024 revenues increased by 10 % to € 221.2 m from € 201.3 m in Q4 2023

• Evotec's Just - Evotec Biologics segment saw impressive growth, with revenues rising by 71 % year-over-year, contributing € 185.6 m (2023: € 108.4 m) to the overall topline

• Total Shared R&D revenues decreased by 9 % to € 611.4 m (2023: € 673.0 m); Demand still affected by temporary Pharma restructuring and selective funding for Biotech

• Adjusted Group EBITDA totalled € 22.6 m (2023: € 66.4 m) driven by a mismatch between revenues and cost base in the Shared R&D segment

• Priority Reset on track to secure an annualised adjusted EBITDA improvement of over € 40 m. One-off costs recognised at € 54.9 m, vs. initial provision of € 68.5 m

• Net debt leverage ratio significantly improved to 1.9x net debt / EBITDA

Strengthened partnerships in 2024 paving the way for 2025 growth in soft market environment

• Group revenue growth expected to accelerate vs. 2024, driven by Just - Evotec Biologics, while Shared R&D revenues expected to remain around 2024 levels

• Tariffs & US government funding development are expected to have a limited impact on Evotec's business

• Expansion of technology partnership with Sandoz and new customers for long-term development and commercial manufacturing in Biologics

• Progress and extension of multi-year collaboration with Bristol Myers Squibb ("BMS") in neuroscience and targeted protein degradation

• New technology development partnership with Novo Nordisk to support next-generation cell therapies

• New multi-year master research collaboration with Pfizer, initially focusing on early discovery research for metabolic and infectious diseases

Guidance for full-year 2025

• Group revenues expected in the range of € 840 - 880 m (2024: € 797.0 m)

• R&D expenditures are expected in a range of € 40 - 50 m (2024: € 50.8 m)

• Adjusted Group EBITDA is expected to reach € 30 - 50 m (2024: € 22.6 m)

Outlook 2028

• Group revenues CAGR _2024-2028 targeted to be in a range of 8 - 12 %

• Adj. EBITDA margin 2028 expected to be above 20 %

CAGR: Compound annual growth rate

More detailed information and financial tables are available in the annual report published on the Evotec website under the following link: https://www.evotec.com/en/investor-relations/financial-publications

Webcast/Conference Call
The Company plans to hold a conference call to discuss the results as well as provide an update on its performance. The conference call will be held in English.

Webcast details
Date: Thursday, 17 April 2025

Time: 2.00 pm CEST (01.00 pm BST, 08.00 am EDT)

To join the audio webcast and to access the presentation slides, please register via this link.

The on-demand version of the webcast will be available on our website: www.evotec.com/en/investor-relations/financial-publications.

Conference call details
To join via phone, please pre-register via this link.

You will then receive a confirmation email with dedicated dial-in details such as telephone number, access code and PIN to access the call.

A simultaneous slide presentation for participants dialling in via phone is available under this link.

About Evotec SE
Evotec is a life science company with a unique business model that delivers on its mission to discover and develop highly effective therapeutics and make them available to the patients. The Company's multimodality platform comprises a unique combination of innovative technologies, data and science for the discovery, development, and production of first-in-class and best-in-class pharmaceutical products. Evotec provides high value pipeline co-creating partnerships and solutions to all Top 20 Pharma and over 800 biotechnology companies, academic institutions, as well as other healthcare stakeholders. Evotec has strategic activities in a broad range of currently underserved therapeutic areas, including e.g. neurology, oncology, as well as metabolic and infectious diseases. Within these areas of expertise, Evotec aims to create the world-leading co-owned pipeline for innovative therapeutics and has to-date established a portfolio of more than 100 proprietary and co-owned R&D projects from early discovery to clinical development. Evotec operates globally with more than 4,800 highly qualified people. The Company's sites in Europe and the USA offer highly synergistic technologies and services and operate as complementary clusters of excellence. For additional information please go to www.evotec.com and follow us on X/Twitter @Evotec and LinkedIn.

Forward-looking-statements
This announcement contains forward-looking statements concerning future events, including the proposed offering and listing of Evotec's securities. Words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "should," "target," "would" and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements include comments regarding Evotec's expectations for revenues, Group EBITDA and unpartnered R&D expenses. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by Evotec at the time these statements were made. No assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Evotec. Evotec expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Evotec's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

For further information, please contact:

Investor Relations
Volker Braun
EVP Head of Global Investor Relations & ESG
volker.braun@evotec.com

SOURCE: Evotec SE

View the original press release on ACCESS Newswire

FAQ

What are Evotec's (EVO) revenue projections for 2025?

Evotec projects 2025 revenues between €840-880 million, representing 5-10% growth from 2024's €797.0 million.

How much did Evotec's (EVO) biologics segment grow in 2024?

Just - Evotec Biologics segment grew 71% year-over-year, contributing €185.6 million to overall revenue in 2024.

What cost savings will Evotec's Priority Reset program deliver?

The Priority Reset program is expected to deliver annualized recurring gross savings of €40 million.

What is Evotec's (EVO) EBITDA margin target for 2028?

Evotec targets an adjusted EBITDA margin above 20% by 2028.

How much did Evotec's (EVO) Q4 2024 revenue grow?

Q4 2024 revenues increased by 10% to €221.2 million from €201.3 million in Q4 2023.