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Evotec SE Reports Revenue Growth Amid EBITDA Decline in FY2024

Evotec SE showcases a 2% revenue increase in FY2024 driven by its biologics segment. However, EBITDA fell significantly. The company anticipates further growth in FY2025, despite some challenges. Investors should closely monitor these developments.

Date: 
AI Rating:   5

Revenue Insights: Evotec SE achieved group revenues of €797 million in fiscal 2024, reflecting a modest 2% increase from €781.4 million in fiscal 2023. This growth was primarily driven by a significant 71% rise in the Just-Evotec Biologics segment, which generated €185.6 million, up from €108.4 million the previous year. The fourth quarter exhibited strong performance, with a 10% increase in revenues compared to the same period in the previous year, which is a positive indicator of the company's growth trajectory.

EBITDA Performance: While revenue growth is a positive sign, the company reported a substantial decline in adjusted Group EBITDA, which fell to €22.6 million from €66.4 million the year prior. This decrease raises concerns about cost management and profitability, particularly as it indicates a mismatch between revenues and the cost base in their Shared R&D division. Such discrepancies could affect overall investor confidence.

Future Outlook: For fiscal 2025, Evotec provided revenue guidance of between €840 million and €880 million, indicating expected growth. However, the expectation of rising R&D expenditures between €40 million and €50 million may also pressure profitability. The guidance includes an adjusted EBITDA projection of €30 million to €50 million, which, while positive in terms of growth expectations, still shows comparative weakness against fiscal 2024.

Challenges and Considerations: The company's remark regarding the limited impact of tariffs and US government funding development suggests that they are assessing external factors, although such clarity can mitigate some investor concerns. Nevertheless, the decline in EBITDA alongside expected growth could lead to mixed investor sentiments. Strong growth in the biologics segment is encouraging, yet the overall profitability picture remains uncertain.

Stocks:  EVO