Selvita S.A. (SLV) Q4 2023 earnings summary

Executive summary

• FY2023 revenue from continuing operations was PLN 351.9m, down 3.5% YoY; reported net profit was PLN 69.9m, including a PLN 52.6m gain on loss of control of Ardigen and reduced by PLN 11.5m of incentive-scheme expense.

• Adjusted for the incentive scheme, EBITDA was PLN 126.3m, up 19% YoY; excluding both the scheme and Ardigen gain, EBITDA was PLN 73.7m and net profit attributable to majority shareholders was PLN 28.8m.

• Market pressure from constrained biotech financing, lower utilization and a stronger złoty weighed on results, while development-service contracting, Big Pharma relationships and plans to enter biologics support growth prospects.

Financial highlights

• Revenue from sales was PLN 347.0m versus PLN 360.7m in 2022; total operating revenue was PLN 351.9m versus PLN 364.8m, down 3.5% YoY.

• Reported EBIT was PLN 69.3m and EBITDA PLN 114.8m; excluding incentive-scheme costs, EBIT was PLN 80.8m and EBITDA PLN 126.3m.

• Net profit was PLN 69.9m; excluding incentive-scheme expense, net profit was PLN 81.4m, versus PLN 63.4m in 2022 on the same basis.

• Operating cash flow was PLN 79.0m; investing cash flow was negative PLN 48.4m, financing cash flow negative PLN 31.0m and total net cash flow negative PLN 17.2m.

Outlook and guidance

• The 2024 backlog for continuing operations was PLN 197.1m as of March 26, 2024, 3% below the prior-year record; Poland services backlog rose 8% to PLN 118.1m, while Croatia fell 15% to PLN 76.7m.

• 2024 fixed-asset expenditure is planned at ~PLN 36m; operations-generated cash is expected to support laboratory infrastructure expansion and acquisitions.

• New biologics services are planned to start in H1 2024, initially focused on preclinical development of monoclonal antibodies; the plan includes equipment, leased laboratory space and a prospective team of 16 specialists.

• The 2022–2025 strategy targets organic growth and acquisitions, a broader drug discovery and development offer, high-value specialist services and expansion in the US and UK markets.