Transcript • May. 6, 2026 12:00 PM • Evotec SE (EVO)
Transcript
May. 6, 2026 12:00 PM
Evotec SE (EVO)
Christian: milestones and royalties and so forth. Would it be fair to assume that in your expectations to reach your guidance over the next couple of quarters for the full year, you would say that you see an improvement up from I first companies. So do you plan on giving us or the market more color on this IE with a capital markets day of maybe an investor day? Thank you.
Unknown: Good afternoon, Christian. Number one, yes, it's fair to assume that we are assuming a slight underlying growth in the D&PD business towards the end of the year. It's also fair to assume that we're assuming strategic deals to contribute to that. It's also fair to assume that we have a list of opportunities here we're working on. So all of your statements are correct. And then basically, given that we have confirmed guidance, you can basically calculate what it means for a second half growth. On the second topic of order, progression, can you shed a bit more flavor or light on what your question is behind there?
Christian: So you mentioned to us that Q3 was better than Q, so year over year, Q3 was better than 25, was better than 24, Q4 was better than Q4-24, and now Q1 is flat compared to the Q4-25, if I heard it correctly. So it indicates to me a delay of improvement or recovery or at least a flattening of the curve. Is that correct?
Unknown: I see, okay. And then I think the second part of your question was seasonality, right?
Christian: Yeah, it's the usual pattern here.
Unknown: First of all, when I look at Q1, order intake in DMPD versus a year ago, we're double digit up. So that tells you that it has been a good quarter in terms of new sales. But it was also a good quarter for us in the fourth quarter last year. I think from a revenue profile perspective, the events around milestones have a bigger impact than the seasonality. So there is some seasonality. We've seen the last couple of years that usually the fourth quarter is a strong quarter, and that is probably the last three years. But I would also not overemphasize the seasonality. And the last topic was an AI-related topic. So please also specify a little bit the question around the companies that you mentioned.
Christian: So you've given us some information about the increase of demand, let's say, for AI-first companies. Also in our last earnings call in the three-year result, you mentioned in a side note that you've seen some improved demand of this type of customer base. Just to get an understanding and to give a little bit more meat on the bone of the potential impact of this kind of customers towards your long-term growth expectations. Maybe if there are plans or are you entertaining the possibility to us more details about how these kind of offerings that you give those customers might impact your forecast or your expected expected growth in the future so that can we get more of an inside idea how this actually could play out in the future i understand christian usually we are not offering
Unknown: kind of an AI service line. Usually it's part of our drug discovery capabilities and platforms, so it becomes part of it. In the very specific case, and I think we talked about it last time, where AI companies come to us. What I can tell you is that, for example, our cyber tax business has benefited from that most recently, and we expect this to further benefit. But it's not a number that we usually can single out because it's part of a package of a larger offering.
Moderator: Thank you very much.
Operator: For any further questions, please press star and one on your telephone. The next question comes from Renaud Finn, Chancellor from Deutsche Bank. Please go ahead.
Renaud Finn: Yes, hi, and thanks for taking my questions. So I heard your earlier comments on the Q1 performance and that we should view the lower profitability during Q1 probably as more investments, maybe in anticipation of upcoming contracts and so on and so forth. If we summarize all your comments, is it fair to assume that Q1 was now the trough in operating performance? So if we think about the second quarter, that both in terms of revenue and adjusted EBITDA generation, we should see first slide improvements. This would be helpful. And then my second question on the strategic review that you now initiate. was there any specific trigger for you to consider this now i mean you as a company you've been approached in the past we read about individual shareholders stepping up more recently and proposing some changes or is it linked to simply operating performance any sort of thoughts you could share with us here would be very helpful
Unknown: Thanks, Finn. So first of all, your first question, I think I just try to lay out a little bit that the quarterly view is not always helpful with the swings, also with the profile that we have in terms of milestone payments. I'm not sure I want to guide on individual quarters. We've never done that before. Important message is we stick to our guidance for the full year, which means that the first quarter will be evened out over the next three quarters. With regard to the strategic review, I can say that this was not initiated in response to any inbound interest. It's a very logical timing when you think about what we're doing. We're resetting the company mid-last year. We've revised our long-term view, vision for the company towards tech and scientific leadership or positioning the competencies that we need. In March, we've announced Horizon, which basically defines our operating model to deliver that business strategy. That's now the next logical step.
Moderator: Thank you.
Operator: We have a follow-up question from Charles Weston from RBC Europe. Please go ahead.
Charles Weston: Hello. Thank you for taking my follow-up. Now, I was listening to your previous answer where you said you weren't going to give quarterly guidance, but I'm going to ask perhaps again anyway. In particular, around Q4, so Q4, it's often a Q4-weighted year. just traditionally. Also, you've got your market improvements expected, you've got the strategic revenues coming through, and you've got the horizon savings. So could you perhaps give us some colour on how Q4 weighted the EBITDA could be? Looking back in the last couple of years, it was a loss for the first three quarters and a substantial profit in the fourth. um could that be the same or exacerbated even more um and perhaps just wondered if you'd like to provide any uh color around what we might expect in q2 whether there are any uh you know puts and takes in the comp that might uh that we might want to bear in mind for our modeling thank you thanks charles and i think we iteratively uh approach uh actually move from from year to quarter and uh
Unknown: I won't do the quarter view, but I will actually help you with a half-year view. As you probably will remember, we've done that last time. It's really the dynamic difference here between H1 and H2 that Claire was explaining. When you look at the changes for the second half, we did mention that we expect a further negative impact from the JEP licensing versus 2025. However, a positive impact from JEP growth, actually in the range of double-digit growth excluding DOW, then there is a positive impact from underlying DPD growth where we set low single-digit growth in the base business, and then strategic partnerships will add on top. But we also said that the FX effect will persist. So that's our view. And we're not breaking it down further by quarter, knowing exactly why, because the quarterly volatility is not helpful.
Moderator: Okay. Thank you.
Operator: We will now take a text question coming from Brendan Smith from TD Cohen, saying, appreciate all the color on your end markets here. I wanted to first ask about the continuous softness you mentioned in preclinical speeding. Qualitatively, what do you think needs to happen for customers to really round the corner? We've continued to see pretty steady biotech funding recovery, some albeit early signs of AI efficiency gains across the sector. So I guess I'm wondering if there's just a time in consideration here or if
Unknown: Okay, so the sentence stops halfway, but I guess I get the question. We think it's a timing topic, as alluded to earlier. There's obviously two ways of looking at it. The funding situation seems to have stabilized in the last couple of actually months from a biotech perspective. That's the external view. The internal view. I alluded to cancellations have come down quite significantly. Now, some of the cancellations were more of scientific and strategic nature in the past, but some also where biotech companies have pulled off for other reasons. We've seen this decline also in the context of more confidence of biotech companies in funding. So that's the internal view. And as alluded to earlier, we do not see AI as a structural or disruptive challenge to our business model because we are applying AI in order to accelerate drug discovery. So we see this actually as a supporting tool in our toolbox.
Operator: That was the last question.
Operator: I would now like to turn the conference back over to Sara Faki for any closing remarks. Thank you, Moira. With this, we would like to conclude today's conference call. Thank you for your participation and please feel free to reach out to the investor relations team should you have any further questions. Thank you and goodbye.
