HAMBURG (dpa-AFX) - Pharmaceutical research and development company Evotec has reported a weaker start to the year. Revenue declined slightly in the first three months and operating profit fell significantly. Meanwhile, the company expects that current developments regarding tariffs and research funding by the US government will have only a minor impact on Evotec's outlook. CEO Christian Wojczewski confirmed the targets for 2025 and the medium-term forecast until 2028 on Tuesday in Hamburg. The share price fell by almost ten percent in early trading. The stock was able to limit its losses somewhat in recent trading, but was still among the weakest MDax stocks with a five percent decline.
In the first quarter, revenue fell by four percent year-on-year to 200 million euros. This was primarily due to lower revenues in the Active Ingredient Research & Preclinical Development (Shared R&D) business segment. The company's operating result was even worse. Adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) slumped by around 60 percent to €3.1 million due to higher sales and administrative costs.
This was particularly noticeable in the costs for the start-up of production at the US subsidiary Just-Evotec Biologics, which had established two new sites for biologics manufacturing in recent years. The bottom line was that the loss widened from just under 21 million euros in the previous year to around 32 million euros.
Evotec recently announced that it would be realigning itself. In the future, the company intends to focus on high-quality services and therapeutic areas and reduce its project portfolio by around 30 percent. The Hamburg-based company plans to increase its focus on automation and artificial intelligence. Evotec intends to divest itself of its holdings and focus in future on its two core businesses of drug discovery and preclinical development, as well as the biologics division Just - Evotec Biologics. By 2028, this should result in additional savings of more than €50 million on top of the ongoing cost reduction program.
Evotec aims to accelerate growth again after a disappointing performance last year. Between 2024 and 2028, Evotec is targeting average annual revenue growth of 8 to 12 percent. The margin, measured as earnings before interest, taxes, depreciation, and amortization (EBITDA) adjusted for special items, is expected to exceed 20 percent. In 2025, revenue is expected to increase by around five to ten percent to between €840 million and €880 million. Adjusted operating profit is expected to improve to between €30 million and €50 million.
Group CEO Christian Wojczewski had already imposed an emergency program on Evotec last year following disappointing performance. In line with this, the group announced the sale of a production site in Halle, Westphalia. The Hamburg-based company is also withdrawing from the gene therapy business and closing sites in France and Austria. In addition, purchasing is to be optimized and space reduced by terminating leases.
The research company announced a realignment at the end of April last year after the previous CEO, Werner Lahntaler, unexpectedly threw in the towel at the beginning of 2024. His departure triggered panic selling on the market, from which the stock has hardly recovered to date.
At around seven euros, the share price is well above the multi-year low of just over five euros that it fell to around a month ago in the wake of US President Donald Trump's tariff capers. However, the stock is still miles away from its interim high of just over 45 euros in September 2021. With a market capitalization of just €1.3 billion, Evotec is one of the lightweights in the MDax./mne/tav/zb
