Selvita SA · GPW:SLV
Selvita SA — FY2021 Earnings Presentation
53 slides from Selvita SA's earnings presentation, Mar 31, 2022
Slide 1: 2021 Full-Year Financial Results, 2022-25 Development Strategy
2021 FULL-YEAR FINANCIAL RESULTS 2022-25 DEVELOPMENT STRATEGY March 31, 2022 It is the translation of Polish original document
Slide 2: Disclaimer
Disclaimer This presentation ("Presentation") has been prepared by Selvita S.A. with its registered office in Cracow (the "Company") and is intended for informational purposes only. Its purpose is to present selected data on Selvita S.A. Group and its development prospects. The information contained
Slide 3: Selvita Group's Development
Selvita Group's Development Very good financial results Revenues: EUR 69.3m vs. EUR 31.8m last year (+123%1) EBITDA2: EUR 18.6m (margin: 26.8%); Net result2: EUR 10.9m (margin 15.7%) Acquisition of Fidelta and integration of sales offer Acquisition of Fidelta finalized in January 2021, and initiatio
Slide 4: Dynamic growth along with higher profitability
Dynamic growth along with higher profitability EURm Revenues EBITDA1 Net Result1 69.3 18.5 123% 20.2 10.9 157% 5.8 31.8 149% 4.5 +151% 7.4 4.4 8.2 49.1 +247% 1.7 12.7 +285% 1.2 6.4 23.6 5.7 3.2 2020 2021 2020 2021 2020 2021 Q3 YTD Q4 Q3 YTD Q4 Q3 YTD Q4 Margin 23.2% 26.8% 14.0% 15.7% Increasing the
Slide 5: A very good year for services executed in Poland
A very good year for services executed in Poland Commercial Revenues1 (EURm) 30% 32.3 25.5 9.5 High growth rate maintained (30% y/y) +50% 6.4 Drug discovery services – continuation of the dynamic 19.1 22.8 development 2020 2021 Regulatory services – gradual restoration of growth 3Q YTD Q4 dynamics f
Slide 6: Fidelta's first year within Selvita Group
Fidelta's first year within Selvita Group Commercial revenues (EURm) 14% 27.8 24.9 Fidelta brings in a broad experience to the Selvita Group +3% 7.8 7.6 • Competences expanded by new therapeutic areas: infectious diseases, inflammatory and fibrotic diseases 17.3 20.0 Increase in revenues and margin
Slide 7: The growing scale of Ardigen's operations
The growing scale of Ardigen's operations Commercial Revenues (EURm) 6.9 77% 2.1 Further dynamic growth of revenues with increasing margins in Q4 4.0 2021 +90% 1.1 4.8 2.9 Ardigen continues to develop in the following key areas: • Digital CRO - AI services supporting drug discovery 2020 2021 • Speci
Slide 8: Entering 2022 with a very high backlog
Entering 2022 with a very high backlog Selvita Group backlog reported for current year, as of March (EURm) 220,8 48.2 29% 171,2 37.3 1.9 5.1 1.7 3.9 3.9 2.2 74% 29.5 37.3 26% 2021 2022 Odkrywanie leków Drug Discovery Badania regulacyjne Regulatory Services Bioinformatyka Ardigen Granty Grants • Back
Slide 9: Integration of Fidelta and preparing the Group for further development
Integration of Fidelta and preparing the Group for further development Integration of drug discovery area Maximizing synergies, further development based on high-value services, implementation of new research competences ADRIJANA VINTER, PH.D. GLOBAL HEAD OF DRUG DISCOVERY Sales teams integration Fo
Slide 10: Selvita compared to other CROs
Selvita compared to other CROs
Slide 11: Growing position among peers
Growing position among peers Revenue growth - Selvita vs peers (EURm) Position compared to market leaders – data for 20211 (EURm) Selvita Sygnature Symeres 3,161 3,174 70 982 60 560 50 40 30 20 119 10 53 59 69 b.d. 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Sygnature Symeres Selvita Nuvisan
Slide 12: High operational efficiency
High operational efficiency EBITDA margin of key players (in %) Sales and EBITDA per FTE (data for 20211, EUR thousand) Selvita Sygnature Symeres Evotec Charles River Lab Wuxi App 200 40% 164,6 146,3 150 132,7 135,6 30% 27% 92,7 96,0 100 20% 46,7 50 32,0 38,4 30,8 33,1 25,0 10% 0 Selvita Wuxi App Sy
Slide 13: Transition to a new phase of development
Transition to a new phase of development EMERGING LEADER STAR Currently, Selvita Group is one of the medium-sized CRO companies that is distinguished by its dynamics of development Selvita's goal for the upcoming years is to move its position on the value matrix towards the MARKET SHARE / RANK perce
Slide 14: Development Strategy 2022-2025
Development Strategy 2022 - 2025
Slide 15: Accelerated implementation of the Strategy announced in 2020
Accelerated implementation of the Strategy announced in 2020 Goals for 2020–2023: Execution as of the end of 2021: Market Cap above EUR 0.2bn Selvita’s market value of EUR 0.3bn Acquisition of Fidelta Growth through acquisitions (~40% of total Group revenues) Revenues > EUR 65.5m Group revenues at t
Slide 16: Strategic Goals 2022-2025
Strategic Goals 2022-2025 Selvita as a leading global preclinical CRO providing services in the field of drug discovery and development, accelerating access to new therapies for patients Comprehensive offer in the area of drug discovery and development • Supplementing the drug discovery offer • Buil
Slide 17: 3x growth with high profitability
Strategic Goals 2022 - 2025 Revenue High EBITDA 34% CAGR of >EUR 200m margin revenues 3x growth with high profitability 17
Slide 18: Revenue growth strategy
Rozwój Revenue growth strategy organiczny Organic Growth • Continued dynamic organic growth, CAGR >23% • Planned increase in employment >70% • Construction of the second laboratory facility in Krakow • Expansion of the leased laboratory space in Zagreb and Poznan Acquisitions • Additional EUR 30-50m
Slide 19: Selvita as a global preclinical CRO
Selvita 2025 EUR 200m in revenues, high EBITDA • Around 1,600 scientists and experts in several locations: o Krakow, Zagreb, Poznan o Another location in Europe (acquisition) o Project Teams in Cambridge and Boston o Locations in North America (acquisitions or organically) • Strong presence and bran
Slide 20: Market perspective
» Selvita » Selvita Market perspective
Slide 21: Dynamic growth of the market is favorable for CROs
Dynamic growth of the market is favorable for CROs 9.8% Value of the global drug discovery market (USD bn) 31.4 CAGR 12.6% CAGR 15.9% CAGR 16.1 13.5% 12.5 CAGR 10.1 14.4% CAGR 2019 2020 2021 2026 P Ameryka Północna North America Europa Europe Azja Asiai & Pacyfik Pacific Ameryka Łacińska Latin Ameri
Slide 22: Significant presence in major markets
Significant presence in major markets EURm Split of commercial revenues per market Revenue structure (2021) 4.2% 32.0 8.7% 18.9 EU Countries 14.3 12.2% USA 9.7 8.3 47.1% 5.9 UK 3.1 1.5 1.5 2.8 Switzerland 27.8% Other EU Countries US UK Switzerland Other 2020 2021 • The international profile of the C
Slide 23: Selvita Group's Market Strategy
Selvita Group's Market Strategy Leveraging over 50 years of cummulative experience in drug discovery (Selvita + Fidelta) 50 years • Strong brand after Selvita and Fidelta integration – supplemented with potential of experience acquisitions • Comprehensive solutions in the field of preclinical drug d
Slide 24: Full integration under the Selvita brand
Full integration under the Selvita brand As of March 31 this year, Fidelta will operate under the Selvita brand while remaining a subsidiary company. Common goal: To build comprehensive research capabilities bridging the gap between early drug discovery and clinical research. • New development oppor
Slide 25: Record-breaking financing in biotech
Record-breaking financing in biotech Acquired capital and number of IPOs on Western Markets [USD bn] Funds obtained from VC market in UK [GBP bn] 16 120 Pozyskany kapitał Capital acquired Liczba IPO # of IPOs 98 14 76 100 12 68 80 55 10 60 8 14.2 2.5 12.7 40 6 1.4 7.2 20 1.1 0.7 4 4.9 0.5 2 0 2018 2
Slide 26: Development in key markets: United States
Development in key markets: United States United States – a huge growth potential, innovative technologies Commercial revenues in US [EURm] • In the next 2-3 years, the US market should dominate in terms of revenues generated by Selvita • The main factors determining the success of CRO companies CAG
Slide 27: Development in key markets: Great Britain
Development in key markets: Great Britain Great Britain – great financing, Commercial revenues in UK (EURm) integrated projects • The golden age of the biotechnology sector - well-funded biotechnology companies with high demand for the CAGR outsourcing of research projects 116% 3.6 • In 2021 alone,
Slide 28: Building a position in key markets
Building a position in key markets Development of research teams in foreign markets One of the elements of Selvita's sales strategy will be the development of research teams operating in key markets such as the United Kingdom and the United States • Creating a local interface for clients responsible
Slide 29: M&A Strategy
» Selvita M&A Strategy
Slide 30: M&A drivers and market trends in the preclinical CRO space
M&A drivers and market trends in the preclinical CRO space Global CRO Market Penetration Rate, % 49.3 46.8 • Strong tendency to outsource in the biotechnology 44.2 and pharmaceutical sectors. The growing share of 41.7 outsourcing in the drug discovery process and insufficient 39.5 internal expertise
Slide 31: Selvita development through M&A
Selvita development through M&A TARGET CRITERIA: Small and medium companies with a good track record that may require Vertical Expansion Horizontal Expansion reorganization or have not built extended sales network to release their full potential Combining CRO with CDMO Strengthening portfolio, activ
Slide 32: Financing M&A Strategy
Financing M&A Strategy • ~ EUR110 million (cash + debt) to finance acquisitions EURm Debt Available cash Net Debt • Healthy balance sheet allows Selvita to primarily finance Selvita Capital Group 39.0 21.2 17.8 acquisitions through debt EBITDA 18.6 • Gross leverage ratio to be kept below 3x Net deb
Slide 33: Drug discovery & drug development
Drug discovery & drug development
Slide 34: Drug discovery services market by Therapeutic Area
Drug discovery services market by Therapeutic Area • The global drug discovery services market forecast for • Oncology segment 2021-2026: • accounts for the largest share of the therapeutic • projected to reach USD 31.4 billion by 2026, area segment increasing from USD 16.1 billion in 2021 • Neurosc
Slide 35: Drug discovery services market by process
Drug discovery services market by process Drug Discovery services growth dynamics by Process (USDbn) • Hit-to-lead identification segment 16.3% CAGR • the largest share of the drug discovery services 14.7 market in 2020 13.3% • plays vital role in the drug discovery and is the 11.3% CAGR most revenu
Slide 36: Basis of strategy
Basis of strategy Leveraging history with dynamic growth and broad market access to create the future Long term experience in DD demonstrated by clinical candidates Translational approach to Drug Discovery projects Following marketing trends Passion for discovering new drugs Dynamic growth 36
Slide 37: Strategy for 2022-2025
Strategy for 2022-2025 By offering deep scientific knowledge and focusing on the disease and the patient, we will help clients to accelerate their projects towards the clinic Offering comprehensive drug discovery and drug development services by • Filling the gaps in drug discovery offer • Building
Slide 38: Comprehensive offer of drug discovery & drug development services
Comprehensive offer of drug discovery & drug development services TARGET PRECLINICAL/CLINICAL READY TARGET ID HIT ID HIT TO LEAD LEAD OPTIMISATION VALIDATION CANDIDATE PRODUCTS Genetic and pharmac Assay development Medicinal and synthetic chemistry Non-GLP tox ological approach and screening QC &
Slide 39: Specializing in prime research solutions and focus on the translational offer
Specializing in prime research solutions and focus on the translational offer Further development of Strenghtening Oncology/ Inflammation, Respiratory, Expanding Neuroscience Immunooncology Infection • Establishment of tissue biobank • Developing in vivo offer • Building on existing neuro-inflammati
Slide 40: Integrated Drug Discovery Approach
Integrated Drug Discovery Approach Increase visibility Integrate Drug Focus on therapeutic Bringing larger revenue with high-end Drug Discovery departments areas and problem- streams with increased Discovery partnerships through projects solving approach stability HELP CLIENTS TO DISCOVER NEW DRUGS
Slide 41: Introduction of AI services in Drug Discovery process
Introduction of AI services in Drug Discovery process AI influence on the drug discovery process: Dynamic growth of global AI in Drug Discovery (USDbn) • Improving effectiveness of ongoing projects and opening new options especially for rare diseases • Process could be faster and cheaper = possibili
Slide 42: Regulatory services market
Regulatory services market • By 2028 market for outsourcing analytical services will accelerate at a CAGR of 8-9%, reaching USD 2.5 billion in Europe and 5.4 billion in the US • The market is fragmented with dozen players occupying the market share, creating exciting opportunities for companies like
Slide 43: Regulatory services
Regulatory services the seed of the Drug Development segment Transforming Regulatory department into a fully-fledged drug development segment Action Plan • Creating a comprehensive platform for testing small and large molecules throughout the CMC cycle and batch release testing • Selvita’s capabilit
Slide 44: Ardigen - planned to become independent by 2025
Ardigen - in the perspective of 2025, the company is planned to become independent Ardigen is a rapidly growing company with an attractive offer of AI services. It operates in a market that is expanding exponentially. The strategy for further development will be based on: • Scaling the Digital CRO s
Slide 45: Most important factors driving the organic growth
Most important factors driving the organic growth
Slide 46: Experienced scientific team: potential for further growth
Experienced scientific team: potential for further growth ~20% scientists at Selvita laboratories Strengthening Selvita’s employer brand in Poland are • Presence in attractive science centers: Krakow, Zagreb, Cambridge, foreigners Boston • Higher level of life science education in Poland - new speci
Slide 47: Research space – a key factor for further development
Research space – a key factor for further development Along with the development of the biotechnology sector, the laboratory space available for rent was saturated For medium and large companies, building their own laboratories is the optimal solution • Cost-effective - specialized space is more exp
Slide 48: Organic growth supported by additional lab space
Organic growth supported by additional lab space Estimated number of employees and lab space (m2) (organic growth) New lab space in KRK 1st stage of Selvita Additional lab space 2nd stage of Selvita 1 200 and ZAG Research Center in ZAG/POZ Research Center 35 000 1 000 30 000 25 000 No of employees 8
Slide 49: Financing the Strategy 2022-2025
Financing the Strategy 2022-2025 7 40 EUR EUR 88 110 210m 115 210 60 Organic growth Laboratory space* Acquisitions Internal recources Bank loans/Leasings Grants • Thanks to the solid high profitability, a significant element of financing the strategy will be funds generated from operating activities
Slide 50: Summary
» Selvita Summary
Slide 51: Break-through moment for Selvita Group development
Break-through moment for Selvita Group development Sound 2021 Results sealed the implementation of 2020-2023 Strategy Revenues Achcieving the key parameters as early as 2021 >200m EUR Ambitious goals in Strategy 2022-2025 Increase of revenues up to EUR 200m with a stable, high EBITDA margin Coming o
Slide 52: Thank you for attention!
THANK YOU FOR ATTENTION! Contact us: ir@selvita.com /SelvitaGroup /company/selvita/ SelvitaKrakow
Slide 53: Glossary
Glossary • AI - Artificial Intelligence • PDX - Patient Derived Xenograft • ADME - Absorption. Distribution Metabolism Excretion • R&D - Research and Development • API - Active Pharmaceuticsl Ingredient • TA - Therapeutic Area) • CADD - Computer Assisted Drug Discovery • QC - Quality Control • CDMO