Evotec (EVT) Q2 2024 earnings summary

Executive summary

• H1 2024 revenue grew 2% year-over-year to €390.8 million, driven by 50% growth in Just-Evotec Biologics, offsetting a 7% decline in Shared R&D.

• Adjusted EBITDA dropped to €(0.5)m from €33.9m in H1 2023, reflecting high fixed costs, ramp-up expenses, and capacity overhang.

• Major restructuring underway, including site closures, headcount reduction (~400 roles), and portfolio optimization.

• Priority Reset program targets >€40m annual savings, with €10m expected in H2 2024 and full impact in 2025.

• New CEO Dr. Christian Wojczewski appointed effective July 2024.

Financial highlights

• Just-Evotec Biologics revenue rose 50% to €88.5m; Shared R&D revenue declined 7% to €302.4m.

• Adjusted EBITDA: €(0.5)m (H1 2023: €33.9m); gross margin dropped to 12.9% (H1 2023: 25.9%).

• Non-core assets (Halle, Orth) contributed a €(4.1)m negative EBITDA impact in H1.

• Net cash used in operating activities: €(98.6)m; cash and cash equivalents: €221.9m (Dec 2023: €510.9m).

• Equity ratio stable at ~50%.

Outlook and guidance

• 2024 group revenue expected at €790–820m; adjusted EBITDA €15–35m; R&D expenditure €50–60m.

• Full-year impact of cost savings program (>€40m) to be realized in 2025.

• Market recovery now expected earliest in 2025, with continued focus on scalable, first-in-class platforms.

• Lower 2024 contribution anticipated due to contract phasing and higher ramp-up costs at Just-Evotec Biologics.