Slide 1: Excellence in external innovation
Excellence in external innovation Evotec AG, Full-year 2017 results, 28 March 2018
Slide 2: Forward-looking statement
Forward-looking statement Information set forth in this presentation contains forward-looking statements, which involve a number of risks and uncertainties. The forward-looking statements contained herein represent the judgement of Evotec as of the date of this presentation. Such forward-looking sta
Slide 3: Welcome to Evotec: The Management Team
Welcome to Evotec The Management Team Werner Lanthaler Enno Spillner Mario Polywka Cord Dohrmann CEO1) CFO1) COO1) CSO1) PAGE 2 1) On the call for FY 2017 results
Slide 4: Agenda
Agenda Summary 2017 & Action Plan 2022 EVT Execute EVT Innovate Financial performance 2017 Outlook & Guidance 2018 PAGE 3
Slide 5: Fast-growing platform and co-owned pipeline: Highlights 2017
Fast-growing platform and co-owned pipeline Highlights 2017 EVT Execute EVT Innovate Corporate Cyprotex integration and New record level of milestones Continued high-value performance ahead of Expansion of iPSC platform investments and company plan and patient-centric approaches formations
Slide 6: Strong financial performance: Results and guidance 2017
Strong financial performance Results and guidance 2017 Guidance Initial guidance in € Final results 2017 August 2017 March 2017 € 257.6 m More than 15% growth Group revenues More than 40% growth (+57%) (2016: € 164.5 m) Approx. € 20 m R&D expenses € 17.6 m Approx. € 20 m (2016: € 18.1 m) Significant
Slide 7: Leading the megatrend with Action Plan 2022
Leading the megatrend with Action Plan 2022 “Action Plan 2022 – Leading External Innovation” – The vision AP 2022 delivers market-leading external drug discovery and development solutions based on state-of-the-art technologies and innovation processes AP 2022 continues to build a broad co-owned pipe
Slide 8: Consequent and fast forward
Consequent and fast forward “Action Plan 2022 – Leading External Innovation” – The strategic goals 2022 2018 2012 2009 Sustainable profitability with positive Business segmentation operating cash flows including milestone and royalty potential Investments to build a world-class Restructuring
Slide 9: Unique business model for high value generation
Unique business model for high value generation Linking strategic goals with operational imperatives Value generation from three initiatives EVT Execute Expand critical mass, world-leading platforms, and maintain delivery culture Continued focus on operational excellence, innovation efficiency,
Slide 10: Strong long-term outlook
Strong long-term outlook “Action Plan 2022 – Leading External Innovation” – In numbers1) Continuously growing total Group revenues Strong adjusted Group EBITDA2) despite end (in € m) of subsidy for Toulouse (in € m) >335 ~ 75 257.6 58.0 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 Inc
Slide 11: Excellence meets excellence
Excellence meets excellence The double helix of external innovation PAGE 10
Slide 12: Agenda
Agenda Summary 2017 & Action Plan 2022 EVT Execute EVT Innovate Financial performance 2017 Outlook & Guidance 2018 PAGE 11
Slide 13: ONE platform for external innovation
ONE platform for external innovation Unique business model – EVT Execute & EVT Innovate PAGE 12
Slide 14: "One stop partner" for external innovation
“One stop partner” for external innovation Evotec’s integrated offering and core competences along the value chain Pre- Hit- Lead Target ID/ clinical identi- optimi- IND Phase I Phase II Phase III Approval Market validation Tox fication sation testing Evotec offers end-to-end platform solutions incl
Slide 15: Strong organic growth supported by acquisitions
Strong organic growth supported by acquisitions EVT Execute – Key performance indicators FY 2017 in € m Revenues1) Adjusted EBITDA2) Revenue growth driven by strong Intersegment revenues +46% +26% performance in base business, 250.3 63.2 initial contributions 36.6 from acquired 50.2 businesses and
Slide 16: No 1 in quality and R&D efficiency
No 1 in quality and R&D efficiency EVT Execute – Major achievements 2017 Extension of value chain with INDiGO® and Aptuit development services Cyprotex performance ahead of plan New partnerships with large and mid- sized Pharma Fast growing biotech network in USA/Europe Important milestone
Slide 17: Further improved customer base
Further improved customer base EVT Execute – Selected KPIs 2017 Revenues by customer Customer type ytd 20171) Revenues by region ytd segment ytd 20171) (in %) (in %) 20171) (in %) 100% Mid-sized 100% ROW 1% 2% 100% 10% 13% Remaining 15% Pharma 29% Foundations 16% Top 11-30 11% 34% 15% USA 42% Custom
Slide 18: Integration of Aptuit progressing as planned
Integration of Aptuit progressing as planned Aptuit – Initial achievements & outlook Summary of transaction Organisation, leadership and New business and further Acquisition closed in systems integration opportunities on horizon August 20171) (Total deal Initial integration steps Very good ini
Slide 19: Faster and safer to the clinic: INDiGO
Faster and safer to the clinic INDiGO® INDiGO® accelerates early drug candidates into the clinic by reducing time from nomination to regulatory submission in less than 52 weeks1) INDiGO® – Integrated solution (Typical activities) Active Pharmaceutical Ingredient (API) Manufacture Formulation Dev
Slide 20: Clear targets, strong outlook for 2018
Clear targets, strong outlook for 2018 EVT Execute – Expected key milestones 2018 New long-term alliances integrating the offering of Aptuit, strategic launch of INDiGO® New performance-based integrated technology/disease alliances Expansion of foundations and biotech network in USA/Europe M
Slide 21: Agenda
Agenda Summary 2017 & Action Plan 2022 EVT Execute EVT Innovate Financial performance 2017 Outlook & Guidance 2018 PAGE 20
Slide 22: Building a co-owned and fully invested pipeline
Building a co-owned and fully invested pipeline Partnership portfolio Molecule Therapeutic Area/Indication Partner Discovery Pre-clinical Phase I Phase II EVT201 CNS – Insomnia EVT401 Immunology & Inflammation ND1) Oncology Clinical ND1) Oncology Various Women’s health – Endometriosis Various Women’
Slide 23: Milestones are the key growth driver
Milestones are the key growth driver EVT Innovate – Key performance indicators FY 2017 Revenues Adjusted EBITDA1) R&D expenses (in € m) (in € m) (in € m) 43.9 Intersegment 26.7 21.5 22.4 22.7 21.4 +65% 4.6 4.7 4.5 17.8 18.0 16.9 (5.2) (15.1) (14.0) 2015 2016 2017 2015 2016 2017 2015 2016 2017 Revenu
Slide 24: Superior platforms and first-in-class targets
Superior platforms and first-in-class targets EVT Innovate – Major achievements 2017 Important milestone achievements (kidney disease alliance with Bayer, iPSC alliance with Celgene, immuno-oncology alliance with Sanofi/ APEIRON) Strong focus on iPSC platform Patient-centric approaches also in
Slide 25: Increasing personalisation will require new tools and platforms
Increasing personalisation will require new tools and platforms in discovery, development, and clinic More personalised medicines driven by molecular phenotyping and AI Opportunities Personalised medicine Increased personalisation of Human genetics and biomarkers medicine requires more precise
Slide 26: Global leadership in iPSC
Global leadership in iPSC Strong focus on iPSC1) platform “IPS cells can become a powerful tool to develop new drugs to cure intractable diseases because they can be made from patients’ somatic cells.” Shinya Yamanaka Disease-specific drugs Screening Patient Disease Patient- in a dish specific iPSCs
Slide 27: Molecular phenotypes will change the drug discovery paradigm
Molecular phenotypes will change the drug discovery paradigm on multiple levels Taking molecular phenotypes from patients to patients Patient Molecular Phenotype Hit expansion Lead In vivo testing Patient Obtain disease Assay biological Optimisation molecular information relevance Bring biologically
Slide 28: One big effort for the benefit of many: Sanofi & Evotec
One big effort for the benefit of many Sanofi & Evotec – Transaction expected to close in H1 Pipeline-building collaboration in infectious diseases (ID) Strong and diverse portfolio of > 10 research & early-stage development projects licensed from Sanofi to Evotec (EVT Innovate) – Sanofi will retain
Slide 29: > 80 co-owned projects across broad range of therapeutic areas
> 80 co-owned projects across broad range of therapeutic areas Fast growing co-owned portfolio Co-owned Co-owned Co-owned Value chain Discovery Pre-clinical Clinical > 50 projects > 25 projects > 10 projects Ø € 1-10 m upfront Ø € 150 m mile- Ø Commercials and substantial Ø 8% royalties stones
Slide 30: Paradigm shifts in neurodegeneration and diabetes
Paradigm shifts in neurodegeneration and diabetes iPSC – Alliances; Progress overview iPSC alliance in neurodegeneration iPSC alliance in diabetes Development of novel therapies for a broad Development of beta cell replacement therapy and range of neurodegenerative diseases drug discovery based on f
Slide 31: Strong progress in first-in-class alliances
Strong progress in first-in-class alliances Progress overview (Examples) Chronic kidney disease (“CKD”) Immuno-oncology Highly innovative therapeutics in diabetic Small molecule-based cancer complications (e.g. CKD) immunotherapies to complement checkpoint inhibitors (together with APEIRON Biologics
Slide 32: Building BRIDGEs over the "Valley of death"
Building BRIDGEs over the “Valley of death“ The funding gap Basic Applied Technology Development Product Commercialisation Market Entry & Research Research and Demonstration and Market Development Market Volume Public Market Funding Level Pension Plan Project Finance Governments Funding Gap Banks/Cr
Slide 33: First-in-class innovation via co-investment strategy
First-in-class innovation via co-investment strategy Innovative building & investing Participation in financing rounds, built on Evotec’s platforms, via strategic Panion Ltd/ investments Fibrocor Tx Approx. € 22 m investments in 2017; long-term commitments with payback horizon > 5 years Attrac
Slide 34: Just the beginning for EVT Innovate
Just the beginning for EVT Innovate EVT Innovate – Expected key milestones 2018 New clinical initiations and good progress of clinical pipeline within existing partnerships Expansion of academic BRIDGE network Strong R&D progress within Cure X/Target X platforms and new Innovate partnerships
Slide 35: Agenda
Agenda Summary 2017 & Action Plan 2022 EVT Execute EVT Innovate Financial performance 2017 Outlook & Guidance 2018 PAGE 34
Slide 36: Very strong financial performance: Condensed income statement
Very strong financial performance Key financials 2017: Condensed income statement (IFRS) in € m1) 2017 2016 % vs. Revenue growth due to strong Actual Actual 2016 performance in the base business, increased milestones and positive Revenues 257.6 164.5 +57% contributions from acquisitions Gross ma
Slide 37: Both segments perform according to strategy
Both segments perform according to strategy Condensed income statement based on segments for FY 2017 in € m1) Inter- EVT EVT segment Evotec EVT Execute revenues up Execute Innovate elimination Group 46% and EVT Innovate revenues up 65% Revenues 250.3 43.9 (36.6) 257.6 compared to 2016 EVT Innova
Slide 38: Strong Q4, despite one-time impact
Strong Q4, despite one-time impact Q4 2017 results in € m1) Q4 2017 Q4 2016 % vs. Significantly higher base Actual Actual 2016 revenues and higher milestones Revenues 86.8 43.9 +97% Gross margin affected by new mix of business through Gross margin 26.0% 27.7% – acquisitions and amortisation of p
Slide 39: Strong performance continues – "3x30"
Strong performance continues – “3x30” Financial history 2014-2018 (e) – Selected performance indicators Total Group revenues (in € m) R&D expenses (in € m) 257.6 18.3 18.1 17.6 164.5 12.7 127.7 89.5 2014 2015 2016 2017 2018(e) 2014 2015 2016 2017 2018(e) Adjusted Group EBITDA (in € m) Gross margin1)
Slide 40: Strong top-line performance, new mix of business
Strong top-line performance, new mix of business Revenues & Gross margin overview Revenue increase due to base business, milestones Long-term stable gross margin, driven by milestone and contributions from acquired businesses revenues; changing due to mix of base business and in € m amortisation of
Slide 41: Focus on first-in-class innovation
Focus on first-in-class innovation R&D expenditure & SG&A overview in € m Very focused R&D expenses SG&A reflects larger footprint, strategic moves and in € m one-time transaction costs in € m 18.3 18.1 42.4 Overhead 17.6 expenses 3.8 4.5 3.4 Platform 0.0 0.1 0.6 R&D 27.0 25.2 Proprietary Innovate 1
Slide 42: Adjusted Group EBITDA significantly improved
Adjusted Group EBITDA significantly improved Operating result & Adjusted Group EBITDA overview in € m Operating result1) Adjusted Group EBITDA (impacted by one-time transaction-related M&A (adjusted for changes in contingent consideration costs (€ 3.9 m) as well as PPA allocation-related and income
Slide 43: Balance sheet reflects acquisition of Aptuit
Balance sheet reflects acquisition of Aptuit Balance sheet overview in € m Asset base increased with Aptuit acquisition Equity strengthened with new strategic investor Novo Holdings, equity ratio at 49.7% 667.3 667.3 91.2 189.9 Cash and 146.2 Loans and investments finance leases 77.3 Other current 7
Slide 44: Strong cash position despite acquisitions
Strong cash position despite acquisitions Liquidity bridge Nov 2016 to Dec 2017 in € m 149.1 (249.3) 90.2 10.9 121.8 126.3 28.1 (17.6) 91.2 (22.2) (66.3) 3.8 42.7 30 Nov Cyprotex Celgene Bank 31 Dec Operating Capex Capital Bank Aptuit Equity F/X 31 Dec 2016 upfront loan & 2016 cash flow excl. increa
Slide 45: Strong growth in highly skilled workforce for innovation
Strong growth in highly skilled workforce for innovation Human Resources 2,178 >2,300 Chemistry 1,238 1,000 717 Biology 2014 2015 2016 2017 2018 Highly skilled workforce > 82% of employees have at least one academic qualification 6.2 years of average experience, approx. 40% of employees have wor
Slide 46: Agenda
Agenda Summary 2017 & Action Plan 2022 EVT Execute EVT Innovate Financial performance 2017 Outlook & Guidance 2018 PAGE 45
Slide 47: "3x30" – Strong growth and profitability expected: Guidance 2018
“3x30” – Strong growth and profitability expected Guidance 2018 Double- 1 digit top- More than 30% Group revenue growth line growth Profitable Adjusted Group EBITDA1) expected to improve by approx. 2 and growing 30% Focused 3 Group R&D expenses of € 20-30 m investments PAGE 46 1) Before contin
Slide 48: Come and visit www.evotec.com
Come and visit www.evotec.comwww.evotec.com New website PAGE 47
Slide 49: Important next dates: Financial calendar 2018
Important next dates Financial calendar 2018 Annual Report 2017 28 March 2018 Quarterly Statement Q1 2018 09 May 2018 Annual General Meeting 2018 20 June 2018 Half-year 2018 Interim Report 09 August 2018 Quarterly Statement 9M 2018 13 November 2018 PAGE 48
Slide 50: HRESEARCHN
HRESEARCHN EVERSTOPS