Evotec (EVT) Q2 2025 earnings summary

Executive summary

• H1 2025 marked by a strategic reset, unveiling a new strategy focused on core technology, operational excellence, and sustainable, profitable growth, with transformation efforts delivering tangible gains.

• Business now reported in two segments: Discovery & Preclinical Development (D&PD) and Just-Evotec Biologics (JEB), aligning with a simplified, focused structure and technology leadership.

• JEB delivered 16% revenue growth, driven by strong demand and non-Sandoz customers, while D&PD revenues declined 11% due to market softness and BMS collaboration effects.

• Asset-light, higher-margin model pursued via planned sale of JEB's Toulouse site to Sandoz for approximately €300 million, including technology license, development revenues, milestones, and royalties.

• Cost-saving initiatives ahead of plan, with €60 million in 2025 cost reductions and 600 FTE reduction since March 2024.

Financial highlights

• H1 2025 group revenues reached €371.2 million, a 5% decrease year-over-year; D&PD revenues declined 11% to €269 million, JEB revenues grew 16% to €102.2 million.

• Group gross margin declined to 9.6% from 12.9% year-over-year, mainly due to lower D&PD performance.

• Adjusted group EBITDA was €-1.9 million, with JEB contributing €7.5 million and D&PD at €-9.3 million.

• R&D spending reduced by 35% to €19 million; CapEx halved year-over-year to €37.6 million as Toulouse expansion neared completion.

• Liquidity at €348 million at period end; net cash provided by financing activities was €20.7 million.

Outlook and guidance

• Full-year 2025 revenue guidance confirmed at €760–800 million; adjusted EBITDA €30–50 million; R&D expenditure €40–50 million.

• Midterm outlook targets 8–12% revenue CAGR and >20% EBITDA margin by 2028, supported by operational excellence and a more capital-efficient model.

• JEB expected to drive growth in H2 2025, with D&PD maintaining H1 dynamics.