Evotec’s Horizon Timeline, DMPD Growth Outlook Don’t Match Earlier Guidance

Date of Call: Apr 8, 2026

Financials Results

• Revenue: Q4: EUR 253.3 million, up 14.5% YOY; Full year: EUR 788.4 million, down 1.1% YOY (1.7% growth constant currency).
• Operating Margin: Adjusted group EBITDA margin: Full year 2025 EBITDA margin not explicitly stated; 2026 guidance expects adjusted EBITDA margin to reach 20% by 2028 and exceed it by 2030.

Guidance:

• 2026 group revenues guided to EUR 700-780 million (incurred FX) or EUR 730-810 million (constant FX).
• 2026 adjusted group EBITDA expected between EUR 0-40 million (incurred FX) or EUR 10-50 million (constant FX).
• First half 2026 expected to be weaker; second half to strengthen with market recovery and strategic partnerships.
• Just Evotec Biologics to maintain strong growth; non-Sandoz/non-DoD customer revenue expected to grow ~40% in 2026.
• DMPD revenues expected low to mid single-digit growth for full year 2026.
• Foreign exchange expected to be ~3.5% headwind to group revenues in 2026.
• Horizon savings of ~20-30% (EUR 75M total) expected to materialize in second half 2026.
• Mid-term framework targets >EUR 1 billion group revenue and 20% adjusted EBITDA margin by 2030.

Business Commentary:

Revenue and Cost Management:

• Evotec reported a full-year 2025 revenue decrease of EUR 8.6 million or 1.1% to EUR 788.4 million compared to the previous year, with a decline of EUR 82.5 million or 13.5% in the DMPD segment.
• This was primarily due to lower revenues in the DMPD segment, influenced by continued softness in early-stage biotech funding, although the Just Evotec Biologics segment showed significant growth.

Just Evotec Biologics Growth:

• The Just Evotec Biologics segment saw a revenue increase of EUR 73.8 million or 39.8% for the full year 2025 compared to the previous year.
• Growth was driven by the strategic agreement with Sandoz, valued at $650 million, and progress in global health programs.

Operational and Strategic Transformations:

• Evotec achieved more than EUR 60 million in annualized cost savings and reduced capital expenditure by around 60% in 2025.
• The company introduced a new strategy focusing on scientific leadership, operational excellence, and capturing pipeline value, which led to these efficiencies.

Bristol Myers Squibb Collaboration:

• Revenues from the oncology collaboration with Bristol Myers Squibb declined by more than a third from 2023 to 2025.
• This reflects a strategic shift into a renewed investment phase focused on high-potential areas like molecular glues, despite temporary impacts on profitability.

EVOequity Strategy and Portfolio Management:

• Evotec has reduced its equity exposure, divesting stakes in companies like Dark Blue Therapeutics and Tubulis, which are expected to yield significant cash proceeds and future upside.
• The strategic focus has shifted from revenue contribution to value realization as these companies advanced in their development stages.

Sentiment Analysis:

Overall Tone: Positive

• CEO stated '2025 was a year of significant progress' and 'delivered more than EUR 60 million in annualized cost savings.' He also said 'we see the basis for recovery building into the second half of 2026' and 'we’re actively transforming our business model toward higher quality, more capital efficient growth.'

Q&A:

• Question from Christian Ehman (Berenberg): Could you give more detail on the starting point in 2025 for non-Sandoz, non-DoD business in the JEB segment? Also, will BMS remuneration shift to more royalty/milestone-based? And what are the clinical plans for.EVT8683?
  Response: Non-Sandoz/non-DoD revenue was ~30% of Just business in 2025, expected to reach ~50% by end 2026. BMS collaboration by design will have increasing milestones and royalties. Clinical plans for EVT-8683 are with BMS; a thorough phase I is currently underway ahead of potential phase II in Alzheimer's.

• Question from Charles Weston (RBC Capital Markets): What drives confidence in a market recovery for the second half of 2026? What is the expected BMS revenue headwind for 2026? And what are the milestone payment expectations for 2026?
  Response: Market recovery is seen via improved proposal/deal activities, though self-help efforts also contribute. BMS revenue for 2026 is expected to decline high single-digits % vs 2025. Milestone income related to BMS is expected to be around the recent $10M level in the second half of 2026.

• Question from Swayam Pakula Ramakant (H.C. Wainwright): What are the risks of customer disruption from Horizon implementation, and how are you managing project continuity? Also, post Toulouse sale, what is the timing for royalty fees from the Sandoz biosimilars?
  Response: No material risk of customer disruption; constant dialogue with customers has resulted in no negative feedback. Post-Sandoz transaction, revenue from new products/licenses is expected to reach ~10% of Just revenue by 2028, with royalties kicking in thereafter, linked to drug patent expiry dates.

• Question from Brandon Smith (TD Cowen): Are you seeing AI adoption from customers/partners driving order patterns, and could that be an opportunity for JEB?
  Response: AI is integral to Evotec's discovery platforms and is used by pharma/biotech and AI companies alike. It is seen as an important future tool for several years, potentially driving volume.

• Question from Mike Raskin (Bank of America): Is the low single-digit DMPD growth for second half 2026 based on current orders or further improvement? Also, can the Horizon timeline be accelerated?
  Response: Growth is based on current improved sales order trajectory plus expected contribution from new strategic deals. Horizon site closures/workforce reductions are subject to legal/regulatory processes and worker council negotiations, with timing as outlined.

• Question from Charles Weston (RBC Capital Markets) - follow-up: Are there other meaningful stakes in your portfolio that could provide future upside?
  Response: Portfolio of ~29-30 companies includes some interesting assets on a good path; further deal opportunities are expected in the future, representing upside, but quantifying and timing is uncertain.

Contradiction Point 1

Horizon Transformation Timeline

Contradiction on the timing for workforce reductions and site closures, shifting from 2025 to late 2026.

What were the key takeaways from the earnings call? - Mike Raskin (Bank of America)

2025Q4: Workforce reductions will start in Q3 2026. Site closures are planned to begin in Q4 2026. - Christian Worchewski(CEO) & Paul Hitchen(CFO)

Can the Horizon transformation timeline, including site closures and workforce reductions, be accelerated? - Fynn Scherzler (Deutsche Bank)

2025Q3: There is some revenue reduction, but significant improvement in gross margin... The deal is fantastic, continues to generate revenue and profit, and pivots to a more capital-efficient, higher-margin model. - Christian Wojczewski(CEO) & Paul Hitchin(CFO)

Contradiction Point 2

DMPD Segment Growth Forecast for 2026

Outlook for the Discovery & Preclinical Development (DMPD) segment's growth in 2026 has become more optimistic.

Mike Raskin (Bank of America) - Mike Raskin (Bank of America)

2025Q4: Expected low single-digit growth in H2 2026, with recovery driven by strategic partnerships. - Summary of Key Themes from Answers

Is DMPD's H2 2026 low single-digit growth forecast based on current order trends or anticipated further improvement? - Fynn Scherzler (Deutsche Bank)

2025Q3: Visibility into 2026 is limited... The company is cautious about predicting a +5% market growth for next year at this time. - Christian Wojczewski(CEO)

Contradiction Point 3

Biotech Market Funding Situation and Deal Flow

Contradiction on whether the biotech funding environment has improved.

Charles Weston (RBC Capital Markets) - Charles Weston (RBC Capital Markets)

2025Q4: The company believes the funding situation has mildly improved, and executed deals will flow back into biotech. - Christian Worchewski(CEO)

What are your assumptions and confidence level regarding the expected market recovery in H2 2026, and how much of it is attributed to your own efforts versus broader market trends? - Mike Raskin (Bank of America)

2025Q2: We are still in a challenged funding environment for early-stage biotech, and we have seen no significant improvement. - Christian Worchewski(CEO)

Contradiction Point 4

DMPD Business Recovery Drivers and Forecast Confidence

Contradiction on the primary drivers for the expected DMPD recovery in H2 2026.

Mike Raskin (Bank of America) - Mike Raskin (Bank of America)

2025Q4: The forecast is based on a mix of standalone business recovery, integrated deals, and new strategic partnerships. The sales order trajectory has improved since mid-2025, and the funnel for strategic deals has strengthened. - Christian Worchewski(CEO)

Is the DMPD low single-digit growth forecast for H2 2026 based on current order trends or anticipated improvements? - Charles Weston (RBC Capital Markets)

2025Q2: The expected H2 2026 improvement is primarily driven by an anticipated market recovery and fewer large, one-time losses of exclusivity for partnered assets. - Christian Worchewski(CEO)

Contradiction Point 5

JEB Revenue Growth Outlook

Contradiction on Just Evotec Biologics' 2026 growth drivers and expected revenue trajectory.

Christian Ehman (Berenberg) - Christian Ehman (Berenberg)

2025Q4: The Non-Sandoz, non-DoD revenue... expects it to grow to about 50% of the overall JEB business by end of 2026. - Paul Hitchen(CFO) & Christian Worchewski(CEO)

What is the starting point for non-Sandoz, non-DoD revenues in the Just Evotec Biologics (JEB) segment in 2025? - Christian Ehmann (Warburg Research)

2025Q1: The guidance remains for good reasons; the revenue performance is slightly better than expected, so the outlook is not changed. - Paul Hitchin(CFO)