EVO

Ladies and gentlemen, welcome to the Evotec preliminary second quarter and first half 2026 results and update full year 2026 outlook. I am Moritz, your Chorus Call operator. I would like to remind you that all participants will be in the listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Sarah Fakih, Head of Global Communications and Investor Relations. Please go ahead.

Thank you, Moritz. Good morning. Good afternoon, and welcome to today's webcast and conference call. My name is Sarah Fakih, and I am the Head of Global Communications and Investor Relations at Evotec. Please allow me to introduce today's speakers. Joining me on the call are Christian Wojczewski, Chief Executive Officer of Evotec, and Claire Hinshelwood, our Chief Financial Officer. Please note that this call is being webcast live and will be archived in the events calendar on our website. Before we begin, a few forward-looking statements.

The discussion and responses to your questions on this call reflect management's views as of today, Tuesday, July 14th, 2026. During this call, we will make statements and provide responses that state our intentions, beliefs, expectations, or projections regarding the future. These statements constitute forward-looking statements within the meaning of applicable securities laws. They are subject to risks and uncertainties. Actual results may differ materially from those expressed or implied. Evotec disclaims any intention or obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances. For further information regarding these risks and uncertainties, please refer to our public filings and disclosures. With this, let me hand over the call to Christian.

Thank you, Sarah. Good morning and good afternoon to everyone. Thank you for joining today's call. Following our announcement last night, we are providing today an update based on preliminary unaudited financial results for the second quarter and first half of 2026, as well as an updated outlook for the full year. As a reminder, publication of our full financial results is scheduled for August 13th. During our full year 2025 results presentation in April, we guided for a challenging first half of 2026. This outlook primarily reflected our anticipated continuation of the softness in the early drug discovery market seen in 2025, as well as the effect of the non-recurrence of the $25 million Sandoz licensing payment in the first quarter of the previous year. Our preliminary second quarter results extend the trends we saw in the first quarter.

Group revenues in the first half of 2026 are expected to amount to EUR 300.1 million, while adjusted group EBITDA is expected to land at EUR -42.7 million compared with the first half of 2025. Our expectation in April for a stronger second half of 2026 was based on two assumptions. A gradual recovery in market activity and increasing contributions from strategic partnership activities. Based on our current visibility for the second half, we're now revising the assumptions on strategic partnerships and as a result, updating our full year guidance.

The key drivers behind this revision are summarized on the right-hand side of the slide and can be grouped into three categories. The first category relates to phasing and milestone-related revenues from existing strategic partnerships across both segments. These account for approximately 40% of the revenue difference between our original and updated outlook. Importantly, these revenues are delayed, not lost, and are expected to be recognized in 2027 rather than 2026. The second category relates to potential new strategic partnerships in our D&PD segment. We now expect lower than anticipated revenue contributions in the second half of 2026 as a result of longer timelines for reaching and finalizing new agreements.

This category accounts for approximately 45% of the revenue difference. Importantly, our underlying partnership pipeline remains healthy and active with multiple opportunities at various stages of engagement, including advanced discussions with potential big pharma partners. While we are highly confident about establishing new partnerships, any agreements reached this year are unlikely to contribute meaningfully to revenue in 2026. In addition, the timing and structures of individual deals may influence the balance of upfront cash payments, revenue-generating activities, and milestone contributions in 2027 and beyond. The third category relates to sales to revenue conversion. Although commercial activity and customer engagement have clearly improved, conversion into revenue has occurred more slowly than anticipated.

While a small portion of revenue conversion is expected to shift into 2027, approximately 15% of the revenue difference is attributable to lower than expected revenue conversion in 2026 relative to our previous guidance. This portion relates to an acceleration objective we had set for ourselves, but which has not materialized to the extent originally assumed. As a result of these factors, we're updating our full year 2026 guidance, and Claire will speak about this in more detail later. While this revision is clearly disappointing, it is important to emphasize that it is primarily driven by the timing of partnership planning activities and ongoing partnership milestone revenues, rather than any fundamental change in these opportunities. The number and value of partnerships we are pursuing has not changed substantially. However, the conversion of these opportunities will take longer than expected.

At the same time, leading commercial indicators in the first half of 2026 document encouraging increased activity across our base D&PD business, including strengthening customer engagement and growing net sales. We're confirming the positive momentum highlighted over recent quarters and expect those to pay off from late 2026 onwards. In addition, any recovery in the discovery and early development market would provide a further tailwind to growth. I will return to these indicators later in the presentation and discuss them in more detail, but first, I would like to turn things over to Claire for a review of the preliminary and unaudited Q2 and first half 2026 numbers.

Thank you, Christian, good morning and good afternoon to everyone. On slide five, let me give you an overview of our preliminary and unaudited condensed income statement. Group revenues for the second quarter of 2026 are expected to decrease by approximately 16% to EUR 143.5 million, and for the first half of 2026, to decrease by 19% to EUR 300.1 million compared to the same period in 2025.

In D&PD, revenues are expected to decline by approximately 15% to EUR 108.1 million in the second quarter, and by 16% to EUR 227.9 million for the first six months compared to the prior period. Within JEB, revenues for the second quarter of 2026 are expected to decrease by 17% to EUR 35.4 million. In the first half, we anticipate a decrease by 29% to EUR 72.3 million compared to the same period in 2025.

Unfavorable foreign exchange movements are expected to represent an additional headwind to half one revenues of EUR 13 million, driven by the U.S. dollar and the British pound. Adjusted group EBITDA is expected to amount to EUR -20.8 million in the second quarter and to EUR -42.7 million in the first six months of 2026 compared to the same period in 2025. Turning to liquidity and the balance sheet on slide six.

The total liquidity as of June 30th, 2026 stood at EUR 465.6 million, representing a quarterly increase of EUR 20.8 million compared with EUR 444.8 million at the end of the first quarter 2026. The quarter-over-quarter increase was primarily driven by the gross proceeds we received of approximately $100 million related to Gilead's acquisition of our EVOequity portfolio company, Tubulis, as well as from our recent EUR 116 million convertible bond placement.

First half liquidity further reflects the scheduled debt repayment of approximately EUR 65.8 million in line with our liability maturity profile. This planned repayment reduced liquidity during the period while contributing to a lower debt position. This liquidity position, combined with savings being realized from our successful implementation of the Horizon transformation, positions Evotec to absorb impacts such as the volatility and our strategic partnerships outlook that Christian has described earlier. With that, I'll hand back to Christian, who will discuss the progress we're making in our commercial activities and in accelerating revenue conversion across the various components of our business.

Thank you, Claire. Before discussing the conversion dynamics we're currently seeing in the business, let us take a step back and look at the three principal creators of revenue streams within our D&PD segment and their respective conversion cycles shown on slide seven. In our standalone business, engagements are typically focused on specific scientific services with straightforward commercial agreements and short delivery timelines. As a result, the sales cycle is fast and the period from order intake to revenue recognition generally short, often around three to six months. In the second type of relationship, integrated programs, customers engage Evotec across multiple capabilities within a broader research program. These engagements involve more complex contracting, longer delivery periods, and a wider scope of work. Consequently, revenue conversion typically occurs over a period of approximately 9-24 months.

The third category is strategic partnerships, which represent the most comprehensive and complex form of engagement. These partnerships are individually structured, often involve extensive negotiation and governance frameworks, and frequently include a combination of research services, milestone opportunities, and long-term collaboration elements. As a result, the time from initial commercial engagement to meaningful revenue contribution can range from approximately 12-24 months. Although revenue conversion takes longer in the context of strategic partnerships, these relationships create the potential for substantial long-term value as they typically generate revenue streams over multiple years and can expand significantly over time as programs progress. Generally, as you move across these three creators of revenue streams, both the complexity and the time to revenue conversion increase.

Looking at our sales to revenue conversion dynamics we're experiencing in 2026, we entered the year expecting improvements in commercial activity to translate into stronger revenue growth as the year progressed. As discussed earlier, approximately 15% of the difference to our previous revenue guidance relates to a conversion ambition that is no longer expected to materialize within 2026. Also reflecting a more gradual pace of business expansion while the organization remains focused on executing the Horizon transformation and building the foundation for sustainable long-term growth. At the same time, in the base business, including standalone and integrated programs, we have seen encouraging developments in key leading indicators from customer engagement and proposal activities all the way through net sales. During the first half of the year, inbound inquiries increased by approximately 30%. Number of proposals increased by more than 45%. In our standalone business, where both sales and revenue conversion cycles are relatively short, we are seeing these positive developments across virtually all leading indicators. Customer engagement has increased, proposal activity is growing, orders and net sales are up substantially during the first half of the year. Revenue, however, has not yet started to reflect this momentum.

Given the relatively short conversion cycle of approximately three to six months, we believe this is largely a question of timing and expect these trends to translate into revenues over the coming quarters. In our integrated program business, we see a similar pattern at the front end of the commercial funnel. Customer engagement remains strong and proposal activity continues to grow. However, due to the greater complexity of these programs, orders and revenues naturally lack the trends we are seeing in customer demand. The same principle applies even more strongly in strategic partnerships.

The highly customized nature of these arrangements mean that proposal activity, orders, and revenues naturally develop on a longer timeline. Taken together, these indicators provide encouraging evidence that underlying customer demand and commercial activity are strengthening across all three revenue streams. The challenge we face in 2026 is one of conversion timing. As commercial complexity increases, the time required for this activity to translate into revenue increases as well. That said, in the first half of 2026, we were already able to shorten the average sales cycle by more than 15%, to start moving opportunities through the pipeline more efficiently and supporting faster customer decision-making. The commercial indicators give us confidence that the underlying trajectory of the D&PD business is moving in the right direction and that there is improved customer engagement and strengthening demand from our services.

On slide eight, let us take a look on the underlying base business of our discovery and preclinical development segment, including standalone services and integrated programs, excluding large strategic partnerships to provide a clearer view of the business. We saw strong improvement throughout the first half of the year. Net sales increased approximately 28% for the first half compared with the first half of 2025.

This figure reflects both positive and negative change orders, giving a realistic picture of customer demand and project activity. As these activities cycle on a shorter frequency compared with strategic partnerships, it is expected that we will begin to see the results of increased activity in these areas by late this year. Additionally, proposal value in the first half of 2026 increased by more than 20%, indicating a growing number of attractive value opportunities going forward.

Similarly, we are seeing steady positive development of our Just - Evotec Biologics segment. As organizations ranging in size from small biotechs to global biopharma companies continue to show strong interest in our innovative continuous bioprocessing offerings. Just - Evotec Biologics continues to refine its business model to maximize the benefit that customers can accrue from a continuous manufacturing approach in terms of cost, flexibility, and speed of infrastructure development. At its base, the CDMO services business is at high capacity, extending its customer base as well as its range of offerings. With the official introduction of the J.TRAIN offering in June, customers have the potential to deploy a proprietary continuous manufacturing technology directly within their own facilities on a turnkey basis.

J.TRAIN is designed to enable significantly faster and more cost-effective deployment than traditional manufacturing expansion, strongly supporting Evotec's mission of accelerating the path to market for the industry's most innovative products. As a key example of this principle, our licensing agreement with Sandoz is progressing well in the wake of the transfer of our Toulouse manufacturing plant to Sandoz ownership last year.

The relationship includes development revenues, success-based milestones, and royalties for Evotec on biosimilar products in technical and early-stage development. Shown on slide 10 and underlying Evotec's progress toward sustainable growth and profitability is the Horizon phase of our strategic transformation. Horizon was announced on March 26th and continues to progress as planned. As a result, we expect total run rate cost savings of about EUR 75 million by the end of 2027, with 20%-30% of that amount expected to be realized in 2026.

As announced in March, we expect the savings accrued by Horizon to start becoming apparent in the second half of this year. These cost savings, combined with the enhancements in commercial execution I discussed earlier, provide a strong foundation upon which we can erect some of the remaining elements of our strategy, including the establishment of high-value strategic partnerships. Let me now hand over back to Claire.

Thank you. On slide 11, I would like to take you through the building blocks of our revised revenue outlook for the remainder of 2026. For the full year 2026, we now guide for group revenues of approximately EUR 570 million-EUR 610 million at incurred foreign exchange rates and EUR 595 million-EUR 635 million at constant exchange rates. Adjusted group EBITDA is expected to fall within the range of approximately EUR -70 million to EUR -105 million at incurred foreign exchange rates and EUR -60 million to EUR -90 million at constant exchange rates.

As Christian has said, while we see an improvement in our commercial indicators and expect to be able to close strategic partnerships before the end of the year, both will contribute only marginally to revenue this year. Let me take you through the various movements that we see to help bridge the gap on revenue guidance. When we look at our base D&PD business, we see a decline versus original expectations.

This is driven by the delayed effect of existing strategic deals, as well as the conversion impacts that Christian earlier described, which are driven by the construct of our sales portfolio, as well as the delay in the achievement of our aspirational target that we had set ourselves. Of this decline versus guidance, we would expect around 65% of this to move into 2027, with the only net reduction being the delay in achieving the aspirational conversion target. Overall, no lost business. If we move to the second bar, this is a significant bucket that we have previously discussed related to the expected new strategic partnerships.

As we have previously outlined, the time to secure these deals is extremely long, given their nature, and can be influenced by a number of external factors beyond our control within the potential partner's operating environment. We have seen in recent weeks timelines stretch beyond what was previously anticipated, meaning that any associated revenue recognition will be minimal this year.

We are, however, confident in the quality of our pipeline and the current status of discussions, and as such, would see this bucket being delivered beyond 2026, with the final revenue impact being driven by the individual construct of each deal. Moving on to JEB, here we see the base JEB business continuing in line with previous guidance, reiterating the confidence in our technology offering. JEB strategic partnerships are slightly delayed versus original guidance, but here again, we would see that moving into 2027.

As we are aware, it's not unusual for milestones to slightly shift, which can then result in a knock-on impact over the year-end revenue cutoff point. In terms of EBITDA impact, we see a high proportion of the revenue reduction flowing through to EBITDA due to our high fixed cost base. Where we have had the opportunity to impact our costs with an impact already in 2026, this has been reflected in the outlook. Let me now hand back over to Christian.

Thanks, Claire. Let me turn now from our strategy to the team that will deliver it and how strongly it has evolved. Over the past few months to bolster our commercial conversion, strengthen execution discipline, and continue to drive operational excellence across the company. Over the past several months, we have significantly enhanced our management, governance, and leadership team to support the next phase of Evotec's transformation. You've been introduced to all of these newcomers as they have joined. On slide 12, we would like to briefly highlight the key appointments and the talented people we have selected to fill them. In April, we were joined by Ashiq Khan as EVP Global Head Chief Commercial Officer. Since joining, Ashiq has made a strong contribution to building the accelerated business activity and enhancing our commercial engagement with customers I described earlier.

He's working closely with our new Chief Operating Officer, Ingrid Müller, who joined in May this year and who brings more than 20 years of life science leadership experience across operations, strategy, supply, procurement, and R&D integration. During the second quarter, we also welcomed our CFO, Claire Hinshelwood. Claire brings a strong track record of reshaping corporate financial operations and making progress against the backdrop of challenging market conditions. Turning to the Supervisory Board, we have a new Chairman, Dieter Weinand, who officially assumed his position in conjunction with our annual general meeting on June 11th this year, along with new Supervisory Board Member Wolfgang Hofmann. Together, they bring a wealth of international leadership experience spanning the pharmaceutical, biotechnology, and healthcare sectors.

Their deep expertise in commercial execution, innovation, capital markets, and transformation will provide valuable guidance and fresh perspectives as we continue to execute Horizon and to sharpen our focus on execution, strategic partnerships, and profitability. Before we move on to Q&A, I would like to summarize where Evotec is today and chart our course toward the sustainable growth and profitability we intend to realize over the next years. As we have said before, we expected a challenging first half of 2026, and the second quarter and first half preliminary results we have just presented align with that expectation. Looking to the second half of the year, our expectations for revenue from strategic partnerships, in particular, the part of our business that is most complex and time-consuming to develop, have shifted recently and have led us to revise our full year 2026 outlook.

While the new outlook is not as robust as we had hoped, as I mentioned earlier, we do see positive leading indicators in the longer-term in spite of a difficult market, especially in the paths of our base CRO business outside strategic partnerships. With net sales up 28% year-over-year in the first half, we expect to see revenue from this increased activity beginning in the final quarter of the year. Combined with cost savings from the Horizon transformation that will begin to become apparent later this year and will grow by the end of 2027 to EUR 75 million in annual run rate savings, we expect that the combination of high-value scientific offerings, improved commercial execution, and disciplined financial management will keep us on track to meet our longer-term goals.

To that end, in the last several months, we have created a number of new roles and filled them with experienced and accomplished individuals who will continue to drive Evotec forward. Evotec today is in the later stages of a strategic transformation that has taken multiple years to implement. There is still a lot more to do, but I strongly believe we now have the correct mix of focused scientific excellence, streamlined operations, and strong commercial infrastructure to attract, secure, and execute on a robust and diverse stream of business across our D&PD and Just Evotec Biologics segment. Thank you, and I welcome your questions.

Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question comes from Brendan Smith from TD Cowen. Please go ahead.

Great. Thank you all for taking the questions. Maybe just two quick ones for me. I guess first, from where things stand today, I guess, do you have a goal for the ratio or balance between JEB revenues and D&PD just over the next couple of years? Just trying to understand how we should think about the growth of both segments relative to each other over the medium term.

Separately, I appreciate all the color on the recent updates on the partnership pipeline. I know you mentioned no new partnerships are now expected to contribute in the second half, you said timing and deal structure should be more of a driver next year. I guess can you just speak a bit more to the health of the partner portfolio, maybe what gives you confidence that 2027 will be better and I guess if there's anything just about the nature of the current funnel, if there's the type of assets or partners that you expect could actually inflect next year specifically or if it's just a timing consideration. Thank you.

Thank you, Brent. On the first question, we don't have a fixed ratio for JEB and D&PD for the long run. I think it's fair to say that we see growth opportunities in both segments. Also fair to say that over the last two, three years, the growth was clearly more on the JEB side. We expect this to actually, going forward in the long run, grow a bit faster than the D&PD segment, but there is no fixed ratio. On the health of the partner pipeline, I can give you a bit of a flavor of that because we obviously have been in discussions with quite a healthy number of partners since quite a while.

The way that you should look about the strategic partner pipeline is that in terms of numbers, we're somewhere between 10-20 opportunities here, single opportunities where we have individual, either pharma or biotech companies, usually big pharma, on specific topics. This could be, for example, in the field of obesity. It can be in women's health. It can be quite a few, actually, in kidney and renal diseases. It's across the larger therapeutic areas, and they all are based on our technology platform. For example, our capabilities in molecular glues, our capabilities in cell therapy, iPSC, omics, and so forth. When you think about where they are in the life cycle, I would say roughly maybe 15% are in a very late stage where we would still expect them to close towards the end of the year. That's important.

While they may close, they will not have a material impact on revenues. Hence, we talk here today. There's a large chunk, roughly 60%, probably 60%, that is in the early to late-stage term sheet discussions. This is also pretty real conversations. Then we've got the remainder, 25% or so, in early discussions or in due diligence phase. This is how you should think about the funnel.

Got it. Very helpful. Thank you.

The next question comes from Christian Ehmann from Berenberg. Please go ahead.

Hello, everyone. Thanks for taking my questions. I would like to linger a little bit more on the existing partnerships. Obviously, I'm trying to ask about the current state of the partnership with BMS. It was very successful in the past, and maybe you can give us more detail on how this might look or is going to look in the future. In addition, if I look at the numbers correctly, it looks like a little bit that JEB is actually slowing down in growth. Maybe you can tell me if this is a correct assumption. If so, why do you think this might be the case? Attached to that, the question, is J.TRAIN then a direct answer to this development? Thank you very much.

Thanks, Christian. Claire will comment on the JEB question in a second. Let me, first of all, reconfirm our BMS collaboration is very healthy. It has been since 2016. I did mention in the last call that we see 2026 for BMS for the collaboration as a transition year. We've been harvesting a healthy pipeline in the last years all the way to 2024. We have, as I mentioned the last time, we've decided to refill the pipeline in 2026, also based on investments into our technology platforms in the omics space. Here in particular, the proteomics and the transcriptomics screening platform.

These investments have been made, and they will lead to a improvement in or a revitalization of the pipeline going forward. That's why we also said last time that we expect the BMS collaboration to get back to growth as of next year. I can confirm this is still the case. I also want to remind you that we've successfully together announced that there is one candidate actually moved into the clinic in oncology. All of that is pretty healthy and not of concern.

Maybe if I pick up on the JEB comment. We still see on the full year, if we look at the JEB business and we exclude the Sandoz contribution to that, and we exclude the Dow contribution, in terms of the underlying growth of that base business, we continue to see growth year-on-year. No concerns there in terms of the growth. If we look to the future, then J.TRAIN, that creates an additional opportunity for us. I would not say it's to replace anything else. It's on top of, and in addition to utilizing the capacity that we have in-house. This creates a further revenue and profitability stream for us going forward.

Thank you. If I may ask a follow-up to the BMS topic, can we expect or model similar scope to what we have seen in the past? I believe at one point it was around 10x to 15x of revenues.

Can you further elaborate when you say 10x to 15x of revenues?

I mean, at one point you released to us that the largest key account was around 12%. I assumed that was BMS, and if that is true, is this a scope you expect to be generated by this partnership in the future?

I see. Okay. I think it's certainly going to be in that range, possibly a notch up, compared to that number.

Okay. Thank you very much.

The next question comes from Charles Weston from RBC. Please go ahead.

Good afternoon. Thanks for taking the questions. If I can kick off with two, the D&PD orders for the base business, you said was up 28% and various other metrics are up too. Presumably, this was off quite a low base, in the prior period. Could you give us a sense of where those orders are versus normal in inverted commas?

Well, maybe one step back. I don't know whether we can go back to page seven, which gives you a little bit of a picture of the 26 commercial indicators.

Yes.

Yeah. That page, exactly.

I was just referring to the standalone business.

Yeah.

If that's okay. Okay.

Exactly. That's the upper part of that graph. Maybe one step back. I just mentioned that we have a new CFO on board, and Claire and the finance team has done a fantastic job unfolding the business and helping us to better understand the dynamics here. This is obviously not something we've been reporting in the past. Great job done by the team to help us understand the underlying dynamics here.

If you look at this, or if you would look at the same picture, let's say two years ago, a year ago, you would see over the three years that this picture three years ago, two years ago, has been all red. Which means that we have seen a declining trend in prospects, proposals, orders, and revenues across all three levers. When I go back to 2024 in time, this was all red. You start to see in 2025 that the standalone is actually starting to turn green with prospects and proposals. Now you see the orders going up, and also the integrated program prospects and proposals.

That's a timing effect, and it also means that we've been consuming some of the backlog of previous years, and actually backdates 2023 probably when you think about the larger integrated programs and strategic partnerships. You're right. The 2025 first half was certainly on a low level. That's why when I spoke about the commercial indicators the last couple of quarters, I did mention that we've seen those leading indicators. We're leaving them behind. We believe that we've been through the trough and the fact that proposals and prospects are going up is just confirming that this seems to be a sustainable trend.

Yeah. As you look at the trend that you see in sales, as this chart outlines, trend that you see in sales and the trend that you see in revenue, the two as we know are the revenue is lagging the sales depending on the construct that we see here of the types of deal. We are coming off, from a sales point of view, a lower base in 2025, but that didn't necessarily, if you look year-on-year revenue 2024 to 2025, it didn't necessarily show up because of that phasing impact where we had some of the carry forward impact from the year before prior year sales.

That's the work that Christian referred to that we've been doing, is we've been trying to deconstruct our sales into what are the key elements of the sales? What are the drivers for each of those elements? What are the trends that we see? As we look forward, what are the leading indicators for each of them? They all have different leading indicators and they all have different dynamics. This is the first time that we've been able to deconstruct that and then build it, anchored around the indicators that we've shared with you today. We'll continue to do that, and we'll continue to refine that. That's something that's clearly important for us, also as we have more transparency, then we'll be able to comment much deeper in terms of how those indicators play out in the future.

Can I move on to the guidance? The new guidance has been cut for this year. What is your level of certainty around this? What is the level of ambition that's built into it? What amount of wiggle room do you have in order to account for any further slippage over the remaining six months?

Want to take it, Claire?

Yeah. I would say that we're confident as we look forward in the year to go, as I talked about, these three different areas that we've shared today, where we've broken down the individual sales drivers of each one. We've done really a deep analysis into each of them. We understand what the drivers are, we understand what the assumptions are, and the level of likelihood that those will occur. We've also really considered the cycle timelines that Christian's outlined here, what will convert to revenue in the second half of the year. I would say that we have a high level of confidence around these numbers.

Thank you. It doesn't assume any further material, new revenue-driving contracts to be signed. I think it presumably must be mostly existing revenue, existing contracts, playing out through their revenue recognition. I don't want to put words in your mouth, but is that fair?

No. That's what the slide that we had the different timelines on, that was what we were trying to demonstrate through that slide and those conversion timelines. If you think about if you make a sale today, depending on which of those three buckets that sale falls into, that will be an indicator of how much revenue we'd hit in 2026, and how much would then fall into the subsequent years. That's what we've used as we've looked then at the second-half forecast. That's why the middle of the year is an important anchor point because those timelines of conversion in the shortest bucket, that's really the bucket that could influence the remainder of the year for revenue in the back end of the year.

Yeah. Okay. Thank you.

As a reminder, anyone who wishes to ask a question may press star and one at this time. The next question comes from Swayampakula Ramakanth from HCW. Please go ahead.

Thank you. This is RK from H.C. Wainwright. Thank you, Christian and team, for doing this call this morning. Just one question from me. What share of your profit, not revenue, has historically come from lumpy partner-controlled milestones? At this point, are you re-resourcing towards recurring work so that you can manage that better?

That's a tough one because the nature of it is pretty lumpy and it's not a flat line. I'm checking here with Claire if we have some guidance on the milestone contribution.

No. It can vary quite significantly over the years. I think there's obviously a difference in profile between if you have a milestone payment that drops 100% down to profitability as compared to other revenue streams that are being converted based on our fixed cost absorption levels. I think to give you a number that would say it's X percent for a specific year, that can vary quite dramatically year on year. I'm not sure it would be particularly helpful. It would need to be on an individual year-by-year basis because of the variability.

Thank you.

Maybe just one follow-up comment to that. That's also a reason why we're trying to unfold the business here, to give you better understanding that the base business is actually nicely coming around the corner with regard to top line and the implications of the strategic deals. We will continue to look into that, also for future meetings, to make sure that there is better visibility on these components.

Thanks.

We have one more follow-up question from Christian Ehmann from Berenberg. Please go ahead.

Hey again. Thank you again. I would like to go back to the J.TRAIN. Maybe you can give us some idea about when this might have material impact on your revenues and earnings, and how we should view, for our models at least, view pricing and potential capacity, for example, over the next years, if you're already willing to share this with us. Thank you.

Yeah. Thanks, Christian, for the question. Consider J.TRAIN from a customer perspective also as a strategic decision. It's not something that is basically purchased in the supermarket. Those things also take their time. We have an excellent technology. We've got great conversations. We've introduced it to the market recently, as you've seen. The feedback is good, but I would not guide you to have any expectations this year that there's already a signed deal. We just spoke about the time it takes to land strategic partnerships. I would see this in a similar time dimension.

Okay. Thank you.

Ladies and gentlemen, this was the last question. I would now like to turn the conference back over to Sarah Fakih for any closing remarks.

Thank you, Moritz. With this, we would like to conclude today's conference call. Thank you for your participation, and please feel free to reach out to the investor relations team should you have any further questions. Thank you and goodbye.

Ladies and gentlemen, welcome to the Evotec first quarter 2026 financial results and business update conference call. I am Moira, the conference call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Sarah Fakih, EVP, Head of Global Communications and Investor Relations. Please go ahead.

Thank you, Moira. Welcome to today's webcast and conference call. My name is Sarah Fakih, and I'm the Head of Global Communications and Investor Relations at Evotec. Please allow me to introduce today's speakers. Joining me on the call are Christian Wojczewski, Chief Executive Officer of Evotec, and Claire Hinshelwood, our Chief Financial Officer. Our Chief Scientific Officer, Cord Dohrmann, will be available for the Q&A session. Please note that this call is being webcast live and will be archived in the event calendar on our website. Before we begin, a few forward-looking statements. The discussion and responses to your questions on this call reflect management's views as of today, Wednesday, May 6, 2026. During this call, we will make statements and provide responses that state our intentions, beliefs, expectations, or projections regarding the future.

These statements constitute forward-looking statements within the meaning of applicable securities laws. They are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied. Evotec disclaims any intention or obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances. For further information regarding these risks and uncertainties, please refer to our public filings and disclosures. With this, let me hand over the call to Christian.

Thank you, Sara. Good morning and good afternoon to everyone. Thank you for joining today's call. In the first quarter of 2026, we advanced Evotec's value creation levers, most notably with the initiation of the Horizon business transformation, which calibrates the company across the three pillars of operational excellence, science leadership, and commercial execution. As communicated during our full year 2025 results on April 8, we expected a strong year-on-year comparison for the Q1, considering one-time revenue in the previous year quarter as well as continued softness in the early drug discovery market. In addition, we have started execution of the Horizon plan, which is designed to put Evotec on a path towards sustainable growth and greater profitability while navigating a still challenging market environment.

As such, the quarter's major business highlights were characterized by strong operational focus, important leadership enhancements, and positive commercial indicators that support the next phase of our transformation. Let me start with our Horizon initiative. During the quarter, we moved from announcement into implementation. We're making progress in the formal Works Council consultation processes across our European sites, as well as in the preparation for our footprint and organizational adjustment measures. These steps are laying the groundwork for a more focused operating model, improved cost discipline, and better alignment of our resources with strategic priorities. This operational progress was accompanied by targeted expansion of our leadership team to support execution. Following the appointment of Ashiq H. Khan as Chief Commercial Officer last month, we further strengthened operational leadership with the appointment of Ingrid Mueller to the management board as Chief Operating Officer.

Both roles will be instrumental in moving our transformation forward. On the commercial side, we see early signs of improvement in key leading indicators. Customer engagement has increased, and we have continued to build a pipeline of potential partnerships, which indicates our revamped commercial organization is already making an impact. Turning to the headline quarterly financials, group revenues came in at EUR 156.6 million, while adjusted group EBITDA was negative EUR 21.9 million. As mentioned before, this was primarily due to a challenging prior year comparison based on a one-off license sale in that quarter. Continued softness in D&PD demand and significant foreign exchange headwinds further enhanced the year-over-year step down.

We confirm our full year 2026 guidance of EUR 700 million-EUR 780 million or EUR 730 million-EUR 810 million at constant exchange rates in revenues and EUR 0-EUR 40 million or EUR 10 million-EUR 50 million at constant exchange rates in adjusted EBITDA. We continue to expect an improvement in both revenue and profitability over the course of the year, with performance weighted towards the second half. This improvement is driven by anticipated market and D&PD recovery, but also by increasing visibility across our strategic partnership pipeline. With respect to financial leadership, 2 weeks ago, we announced an orderly transition in the Chief Financial Officer role.

Paul Hitchin decided to step down from his position effective April 30, 2026, for personal reasons. I would like to sincerely thank Paul for his extraordinary dedication and the skill with which he helped set Evotec on a path of strategic change during a period of transformation. As of May 1, Claire Hinshelwood has assumed the role of Chief Financial Officer. Claire is with us on the call today, and I would like to extend a very warm welcome. Claire will ensure continuity in financial leadership and provide stability as we continue to recalibrate the company. Before I move into the detailed quarterly review, I would like to give Claire the opportunity to briefly introduce herself. Claire, over to you.

Thank you, Christian. Good morning and good afternoon to everyone. It's a real pleasure to be joining you today. I'm genuinely excited to take on the role of Chief Financial Officer at an important moment for the company. I bring more than 30 years of experience in senior financial leadership roles and built much of my professional foundation at Syngenta, where I held a number of finance positions and developed deep experience in global finance, business strategy, performance management, and governance within a strongly science-driven organization. Following that, I joined Novartis, where I worked across multiple regions, portfolios and regulatory environments, shaping my deep understanding of capital discipline, financial transparency and decision-making in a big pharma context.

Most recently, as group CFO of BMI Group, I led the transformation of the company's financial operations and delivered significant underlying improvements in its financial position during a period of particularly challenging market conditions. That experience strengthened my hands-on experience in managing change, stabilizing performance, and creating financial resilience. What attracted me to Evotec is its unique position at the heart of the life sciences ecosystem. This position is built on its well-established scientific excellence, a differentiated partnership-based business model, and the potential of cutting-edge technologies such as the highly innovative Just – Evotec Biologics platform, alongside the clear commitment to transformation through the Horizon initiative. As CFO, my priority is to ensure continuity and robustness in the financial leadership while supporting disciplined execution of the group's transformation agenda.

Looking ahead, my focus will be on strengthening financial transparency, supporting progress towards improved profitability and sustainable growth, and working closely with the management board and all colleagues across the organization to ensure that financial discipline underpins decision-making at every level. I'm very much looking forward to working with the team and to engaging with many of you over the coming months. With that, I'll hand back to Christian.

Thank you, Claire. On slide six, let me briefly follow with an introduction to Ingrid Mueller, who also joined the Evotec Management Board on May first as our new Chief Operating Officer. Ingrid joins us from CureVac and brings over more than 20 years of international senior leadership experience in the life sciences industry, including prior roles at Sanofi and Fresenius Kabi, where she successfully managed complex operational environments and large-scale execution and transformation topics. With her strong background across operations, strategy, supply, procurement, and R&D integration, Ingrid oversees Evotec's D&PD operations and plays a central role in strengthening cross-functional execution, delivery performance, and operational discipline. A key focus of her mandate is the implementation of the Horizon initiative, supporting improvements in quality, productivity, scalability, and cost control across the organization.

Turning now to slide seven and our most recent news flow, we continue to make progress across key partnerships in D&PD that reinforce a consistent theme: our ability to deliver high-quality outcomes at speed and through AI-enabled integrated platforms. This capability is increasingly critical across therapeutic areas and partner types, where execution speed, reliability, and scientific quality are essential. A good example is our public and global health work. Following engagements such as our collaboration with BARDA on Ebola and Sudan viruses preparedness, we received two new grants from the Gates Foundation to advance tuberculosis drug discovery and translational research, accelerating progress towards shorter, safer, and simpler tuberculosis treatment regimes. Both areas leverage our AI-enabled discovery and translational platforms to deliver rapidly and efficiently.

The same strengths show in our medical dermatology collaboration with Almirall, where the joint team nominated a first preclinical development candidate progressing from lead identification to preclinical candidate in just two years, significantly faster than typical industry timelines. This milestone validates the efficiency of our AI and machine learning-enabled end-to-end data-driven discovery and preclinical model. The program is now advancing towards IND with continued support through our INDiGO platform. Taken together, within public sector engagements, global health initiatives or pharma partnerships, these examples demonstrate the speed, efficiency and quality of our D&PD platforms. With this, let me hand back the call to Claire for an overview of our financial results for the first quarter of 2026.

Thank you, Christian. Turning now to slide eight, which shows our condensed income statement for the first Q1 of 2026. Group revenues for the Q1 of 2026 amounted to EUR 156.6 million, representing a decrease of EUR 43.4 million or 21.7% compared to the same period in 2025. On a constant currency basis, Q1 group revenues decreased by 16.6% to EUR 166.9 million. Group revenues were impacted by the continuous market softness for early clinical discovery, as well as the non-recurrence of a $25 million license sale to Sandoz in the first quarter of 2025, as well as negative foreign exchange effects, for which I will go into more detail on the next slide.

Looking at the segments, revenues in D&PD decreased versus prior year by EUR 20.7 million or 14.7% on a reported currency basis to reach EUR 119.9 million, reflecting the mentioned challenging market environment and FX headwind. Accordingly, at constant currencies, D&PD revenues declined by 10% to EUR 126.6 million compared with the prior year period. Just – Evotec Biologics revenues decreased by EUR 22.6 million or 38% to EUR 36.8 million in the first quarter. The decline was primarily driven by the non-recurrence of the $25 million Sandoz license sale in the first quarter of 2025, as well as the expected decline in DOW revenues, which were offset by the year-on-year growth of non-DOW, non-Sandoz revenues of approximately 50%.

On a constant currency basis, revenues in the segment amounted to EUR 40.4 million. R&D expenses totaled EUR 10.1 million, representing 6.4% of total revenue, compared with EUR 14.9 million or 7.5% of total revenue in the first quarter of 2025. While continued investment in our technologies and platforms remains a core part of our strategy, spending in the quarter remained tightly focused on projects most relevant to our partners. Adjusted group EBITDA for the first quarter of 2026 amounted to a negative EUR 21.9 million, compared with EUR 3.1 million in the prior year period. It totals negative EUR 18.9 million at constant exchange rates.

At the segment level, adjusted EBITDA in D&PD decreased by EUR 2.9 million to negative EUR 9.8 million in the first quarter. At constant exchange rates, adjusted EBITDA amounted to negative EUR 5.5 million, broadly consistent with quarter 1 2025 EBITDA levels, despite the aforementioned lower revenues in the segment, reflecting the impact of reductions in our structural cost base and business mix. Adjusted EBITDA in the Just Evotec segment decreased by EUR 22.1 million to negative EUR 12.1 million or negative EUR 13.4 million at constant exchange rates. The primary driver to the year-on-year change reflects the non-repeat of the Sandoz license payment. On slide 9, let me go into more detail on the year-on-year movement in revenues by isolating the main factors that impacted performance in the first quarter.

Compared with the first quarter of 2025, the decline in reported revenues was driven by three main factors. First, the negative FX effects, which were a meaningful headwind of EUR 10.2 million in the quarter, driven primarily by the U.S. dollar and the British pound. Second, the non-recurrence of the $25 million or EUR 23.1 million Sandoz license payment that was recognized in the first quarter of 2025 in the Just segment. Third, a continued softness in the D&PD demand, reflecting the expected challenging market environment. When adjusting for these effects, the underlying development is significantly more moderate. Excluding both foreign exchange and the non-recurring Sandoz license, group revenues declined by 6%.

Accordingly, at segment level, the Just – Evotec Biologics results shows continued underlying momentum, with revenues increasing by 11% when excluding the Sandoz license and currency effects, absorbing the expected decline in DOW revenues. As already stated, in D&PD, revenues declined by 10% on a constant currency basis. Turning to liquidity and the balance sheet on slide 10. Total liquidity in the first quarter of 2026 stood at EUR 444.8 million, representing a quarterly decrease of EUR 31.6 million compared with EUR 476.4 million at the end of the fourth quarter 2025. The balance sheet remains solid, with the group continuing to hold a net cash position at the end of the quarter. The development in liquidity reflects a number of underlying dynamics.

First, we saw favorable year-on-year movements in working capital, which supported an improved operating cash flow compared with the first quarter of 2025. Second, capital expenditure remained disciplined, resulting in lower cash outflows versus the prior year. Third, it is important to note that the reported liquidity excludes the expected gross proceeds of approximately $100 million related to the Gilead acquisition of our EVOequity portfolio company, Tubulis. We expect to receive these cash proceeds in the second quarter of 2026, which will provide a further strengthening of our liquidity position. With that, let me hand back to Christian.

Let me now turn to Horizon and provide an update on the progress we made during the first quarter, shown on slide 11. Horizon is designed to accelerate growth and promote agility by streamlining the organization around the three core pillars: operational excellence, scientific leadership, and commercial execution. Since its announcement on March 10, Horizon moved from planning into active implementation with progress on the people and footprint-related measures. These actions are central to establishing a streamlined operating structure and improving cost base, centralizing technologies, and strengthening capabilities critical to our strategy. In the United States, we are progressing well with the e-exit of the Framingham site as we are consolidating our U.S. operational footprint. Across Europe, implementation is progressing, and we expect the majority of legally mandated Works Council consultations to be completed mid-2026.

First, personnel adjustments in Europe are expected to start within the third quarter of this year. In the first quarter of 2026, we recorded EUR 75 million of reorganization cost provisions directly attributable to the Horizon restructuring measures. These mainly reflect personnel measures, including severance payments, as well as impairment losses on property, plant, and equipment, and are based on estimates that are regularly reviewed and refined as implementation progresses. As previously communicated, we continue to expect structural run rate savings of approximately EUR 75 million by the end of 2027, with around 20%-30% of these savings expected to materialize in 2026. Building on the strategic recalibration established through Horizon, we're taking a broader look at the group to ensure that our structure and positioning reflect the intrinsic value of our platforms and portfolio.

Horizon fundamentally transforms how we operate, allocate capital, execute scientifically and commercially, and compete more effectively in our markets. With this optimized foundation in place, it's the right time to conduct a strategic evaluation to assess how the value being created through this transformation is most effectively realized within the corporate structure of the company. This includes our portfolio, capital structure, and ownership framework. As customary in such processes, the evaluation is being conducted with the support of experienced external advisors. There is no predefined outcome, timeline, or commitment to pursue any transaction, and we will provide further updates if and when appropriate. Let me now turn to slide 12, which provides a perspective on commercial momentum in the D&PD business. The 1st quarter of 2026 shows a continuation of positive signals we began to observe already in the second half of last year.

Importantly, selected indicators are stabilizing or improving compared to early 2025. Starting with delivery stability, the decline in negative change orders we saw throughout 2025 and into early 2026 continued through the end of the first quarter, reaching levels below those recorded at the end of Q4 2025. This points to an increasingly stable delivery environment and higher customer confidence and investments. Moving down the funnel, proposal activity and Discovery & Preclinical Development reached the highest level of the past 12 months at the end of the first quarter. This suggests improvement in commercial outreach and higher levels of customer engagement over the past year. These upstream indicators are complemented by continued progress in our execution metrics.

Proposal turnaround times in Discovery & Preclinical Development improved further and reached levels below the average number of days in 2025. This improvement reflects increasing efficiency in internal processes and better coordination between commercial teams. At the end of the funnel, net sales orders in the first quarter of 2026 remained broadly stable compared with Q4 2025. When viewed in combination with a reduction in negative change orders, the overall trend is positive. At the same time, net sales orders increased by approximately 15% year-on-year. Given Evotec's business model, revenues are influenced by strategic partnerships and milestone-driven activities, which by nature can lead to timing-related volatility rather than linear quarter-to-quarter progression. We're seeing a range of activity and maturing discussions, spanning collaborations with pharma partners on opportunities around the out-licensing of differentiated biological targets, as well as access to our molecular patient database.

While these discussions are at different stages, their breadth reinforces our confidence in the strength of our D&PD platforms and supports a more positive outlook as the year progresses. Overall, the commercial transformation is progressing as planned. While it's still early, these metrics give us increased confidence that we are seeing initial signs of stabilization. Before we turn to your questions, on slide 13, let me briefly summarize the key takeaways from today's presentation. As expected, our financial results in the 1st quarter of 2026 fell significantly compared with the same quarter last year due to a number of factors that we do not expect to persist into the rest of this year.

As we begin the implementation of Horizon, we expect to begin seeing impacts in the latter half of 2026, with 20%-30% of the estimated structural run rate savings of EUR 75 million being realized in 2026. We have already taken significant strides in implementing Horizon by strengthening our leadership in key commercial and operational roles, progressing our footprint reduction plans, and improving our commercial execution. Relevant to this last category, we have seen multiple leading indicators trending positive and expect to see the downstream effects of that early activity in future quarters. Our recent progress in drug discovery and preclinical development collaborations reinforces a consistent theme, the ability to deliver high-quality outcomes at speed through AI-enabled integrated platforms.

Whether in partnered programs such as dermatology with Almirall, global health initiatives supported by the Gates Foundation, or public sector engagement with BARDA, we continue to demonstrate that our D&PD capabilities can be applied across therapeutic areas and use cases where speed, reliability, and execution quality are critical. With a strong plan for transformation that is being implemented at pace, leading indicators showing increasing business activity into the second half of 2026, and a strengthened leadership team that is focused on putting Evotec on the path to strong, sustainable growth, we expect to see consistent improvements in our financial results across the coming quarters. With this, I would very much like to open the call for your questions.

The first question comes from the line of Swayampakula Ramakanth from HCW. Please go ahead.

Thank you. Good afternoon, Christian Wojczewski and team. Thanks for taking my questions. Just a couple of them. You know, as you're keeping your full year guidance, and, you know, it looks like there is, you know, if you maintain that, it looks like there needs to be a ramp up in quarterly revenues from here onwards, from the second to the fourth quarter. How confident are you that, you know, you can gain that ramp going forward? The second question is on the strategic review on the Horizon, just trying to understand how you're going to sequence it. Do you need to get the Horizon completely implemented when you're thinking about the strategic review of the group, or is that going to be parallel? Thanks.

Okay. All right. Thank you. I'll start with the second question. I'll hand over to Claire for the first and maybe take it back afterwards. On the Horizon topic, the answer is no. We know what we're executing against and what our plans are. As I said earlier, Horizon is upgrading our operating model, reducing complexity, and making us more agile. We know precisely what we have to do. We are not required to wait. First question, Claire.

Okay. On the full year guidance then, as Christian mentioned, as we were going through the introduction, the revenue of course is not linear because of the significant impacts that we see from milestones and strategic deals. If I take you back to a slide that Paul shared during the year-end presentation a couple of weeks ago. On that slide, he split down the dynamics that we were expecting for both half one and half two. On that slide, it outlined that for half one we would see, of course, the one-time negative impact from the Sandoz deal. We would expect to see underlying growth in the Just – Evotec Biologics, excluding the impact of DOW and Sandoz, which is what we've seen. We've seen up to roughly 50% underlying growth there.

We also highlighted that we would continue to see a challenging but improving situation in the D&PD environment, and we would have a negative FX impact. If you actually look at what the Q1 results show, it's very much in line with what that half one trajectory was expecting. When you look into half two, we start to see the impacts coming through on the strategic partnerships, and that's where we'll see the upturn. We'll also start to see the recovery of the D&PD underlying business. It's the dynamic of those large strategic partnerships and the milestones that are making the difference between what you see in the first quarter and when you look at the full-year outlook. Everything was in line with what we shared in that slide during the year-end presentation.

Okay.

Thank you very much, Claire. That is fantastic. Can I do a quick follow-up, please?

If you look at the gross margin, which was -1%, you know, it's kind of striking initially. But underneath it, I'm imagining certain things which Claire just talked about, whether it is the FX effect or the Sandoz effect. How much of that is true? You know, is there anything else that we should be thinking about? You know, what needs to get done so that, you know, our gross margin gets back into the positive territory?

I mean, all of what I won't repeat what I just said a second ago.

Yeah.

I think the other thing that you're going to see coming through, is as Horizon is implemented, then clearly there's an under-absorption that we see today in some of our sites that's having a drag effect on the margin. As we move forward with the Horizon implementation, then you'll start to see that significantly reducing, and that will then have a positive impact on the margin going forward.

Okay. Thanks. Thanks for confirming that.

The next question comes from the line of Charles Weston from RBC Europe. Please go ahead.

Hello. 2 topics, please, for me. The first is on D&PD and guidance. I think, as you said, your guidance anticipates an improvement in the underlying D&PD market in the second half. Additionally, you have visibility on your strategic relationships. Could you just help us understand your visibility in each, particularly, as the language you used, I think, in Q1 to describe the market seems a tad more cautious than the full-year results. Sorry for the length of the question, as part of that, could you give us some additional color on the order book? You talked about the number of proposals, could you also talk about the value of them?

Thanks, Charles. Maybe starting with the 1st topic. When you look at the D&PD business, the way that you obviously think about this is what you see in the 1st quarter revenues is the result of sales orders that were basically done or negotiated 9-12 months ago, right? Where we've been consistently talking about a soft market environment last year. Now, that's a result of last year. Going forward, I think the indicators I did mention here, 1st on the not strategic business, fewer cancellations, gives us more confidence that the biotech market is also recovering because there is more confidence in investing into projects.

Secondly, when you look at the sales orders, we've now seen actually the 3rd quarter in row, better performance compared to what we've seen Q1, Q2 last year. Q3 was better than Q2. Q4 was better than Q3, and the 1st quarter was also in line with the 4th quarter. That takes a bit of time to materialize, obviously, but these indications for us are strong signals that we're moving in the right direction. With regard to strategic relationships and partnerships, usually, obviously, that's more digital events, right? You negotiate and either you do a deal or not, or you do the deal now, or you do it 6 months later. There's no real KPI behind that. But we see that a lot of these discussions have been picked up again.

When they ultimately will be executed, you can't put it precisely into one quarter, Charles. Maybe, to put it also a little bit into perspective, when you look at the Q1 results, when I look at the D&PD business the last couple of quarters, and this is all published, quarter-by-quarter revenue swings last two years were easily in the range of EUR 10 million-EUR 20 million. Why is that? Also partially because of our business model. Strategic deals, milestone payments, license payments. Q4 25, for example, versus Q3 was 12% up. You look at Q1 versus the Q4 quarter was 13% down. The quarterly picture is not necessarily indicative of the full year results. The same is true for Just. There's even bigger swings, as you can imagine.

Now, with regard to the order book, that's not a number that we publish. But obviously you should assume that we have in 2025 consumed order book that was built in 2024. We're now starting to rebuild the order book, and there will be inflection point in the second half where the order book is also starting to grow. Sorry, lengthy answer, but I hope that this comes labor.

Yes, it does. I did actually have one other topic, but this is a much quicker one, please. Probably one for Claire. Can you help me understand the underlying profitability and the growth margin level at Just, please? Negative gross margin. I think you mentioned there was some cost phasing issues. How do we strip that out for an underlying view, and will those numbers actually reverse in Q2 and Q3 or Q3 for a tailwind? Thank you.

I'll hand this over to Claire in a second. Maybe let me give you 1 or 2 sentences upfront, Charles. I just gave you the volatility swings in D&PD. When you look at just quarter by quarter, just high level, the last 8 quarters, revenues 35, 40, 60, 40, 115, 37. You see on a quarterly basis, because of the business model, license payments, prepayments and so forth, it's a quite volatile profile. That also is true for the profitability, right? Depending on how we actually spend in preparation of a new deal, whether we actually get paid on a milestone basis or license basis. There is volatility. The Q1 is not necessarily very conclusive, Claire.

Yes, really just to build on what you said there, Christian, it really is the factor of the phasing between the cost and investment that we have and then when we're able to recognize and receive the revenue from whether it be the milestone payments or other income. It's really a factor of that phasing of investment versus revenue recognition, and therefore you see the volatility and the margin movement across the quarters.

Okay. Thank you for the color.

The next question comes from the line of Christian Ehmann from Berenberg. Please go ahead.

Hello, everyone. Thanks for taking my question. I would like to linger a bit on the H2 performance or guidance of that, if I may. Would it be fair to assume that because you mentioned something about the impact of strategic partnerships and milestones and royalties and so forth, would it be fair to assume that in your expectations to reach your guidance over the next 2 quarters for the full year, you would say that you see an improvement, so up from the -10% underlying now to the low single digit you have given us for the reported number for the full year.

Would it be fair to assume to say, okay, we would expect an improvement of or a turnaround to slight growth rates over the couple of, let's say in the beginning of H2, and to top it off, we would expect a partial contribution from milestones? Just want to get an idea how significant or how impactful those milestones would need to be to achieve the target. The second question is in regards to the, let's say order progression. Is there a seasonal pattern? When you say you have quarter-over-quarter flat development, Q4 to Q1, is this a usual pattern? Because obviously a downturn compared to the recovery we saw in the quarters before. The last question would be in regards to the new efforts from AI first companies.

Do you plan on giving us or the market more color on this, i.e. with a capital markets day or maybe an investor day? Thank you.

Good afternoon, Christian. Number 1, yes, it's fair to assume that we are assuming a slight underlying growth in the D&PD business towards the end of the year. It's also fair to assume that we are assuming strategic deals to contribute to that. It's also fair to assume that we have a list of opportunities here we're working on. All of your statements are correct. Basically, given that we have confirmed guidance, you can basically back-calculate what it means for a second half growth. On the second topic of order progression, can you shed a bit more flavor or light on what your question is behind there?

You mentioned to us that, Q3 was better than Q So year over year, Q3 was better than, 2025 was better than 2024. Q4, 2025 was better than Q4 2024.

Yeah.

Now, Q1 is flat compared to the Q4 2025, if I heard it correctly. It indicates to me a delay of improvement or recovery, or at least a flattening of the curve. Is that correct?

I see. Okay. I think the second part of your question was seasonality, right?

Yeah. Is there a usual pattern here?

First of all, when I look at Q1 order intake in D&PD versus a year ago, we're double-digit up. That tells you that it has been a good quarter in terms of new sales. It was also a good quarter for us in the fourth quarter last year. I think from a revenue profile perspective, the events around milestones have a bigger impact than the seasonality. There is some seasonality. We've seen the last couple of years that usually the fourth quarter is a strong quarter. That is probably the last 3 years. I would also not overemphasize the seasonality. The last topic was an AI-related topic. Please also specify a little bit the question around the companies that you mentioned.

You've given us some information about the increase of demand, let's say, for my first companies. Also in our last earnings call in the full year result, you mentioned in a side note that you've seen some improved demand of this type of customer base. Just to get an understanding and to give a little bit more meat on the bone of the potential impact of this kind of customers towards your long-term growth expectations, maybe. Is there an indication or plans, or are you entertaining the possibility to give us more details about how these kind of offerings that you give those customers might impact your forecast or your expected growth in the future? That can we get more of an inside idea how this actually could play out in the future.

I understand, Christian. Usually, we are not offering kind of a AI service line. Usually it's part of our drug discovery capabilities and platforms, so it becomes part of it. In the very specific case, and I think we talked about it last time, where AI companies come to us, what I can tell you is that, for example, our Cyprotex business has benefited from that most recently, and we expect this to further benefit. But it's not a number that we usually can single out, but because it's part of a package of a larger offering.

Thank you very much.

The next question comes from the line of Finn Schätzler from Deutsche Bank. Please go ahead.

Yes. Hi, and thanks for taking my questions. I heard your earlier comments on the Q1 performance, and that we should view the lower profitability during Q1 probably as more investments, maybe in anticipation of upcoming contracts and so on and so forth. If we summarize all your comments, is it fair to assume that Q1 was now the trough in operating performance? If we think about the second quarter, that both in terms of revenue and adjusted EBITDA generation, we should see first slight improvements. This would be helpful. My second question on the strategic review that you now initiate. I mean, you as a company, you've been approached in the past.

We read about individual shareholders, stepping up more recently and proposing some changes or, is it linked to simply operating performance? Any sort of thoughts you could share with us here would be very helpful.

Thanks, Finn. First of all, your first question, I think I just tried to lay out a little bit that the quarterly view is not always helpful with the swings, also with the profile that we have in terms of milestone payments. I'm not sure I wanna guide on individual quarters. We've never done that before. Important message is, we stick to our guidance for the full year, which means that the first quarter will be evened out over the next 3 quarters. With regard to the strategic review, I can say that this was not initiated in response to any inbound interest. It's a very logical timing when you think about what we're doing. We're resetting the company mid last year.

We've revised our long-term view, vision for the company towards tech and scientific leadership or positioning the competencies that we need. In March, we've announced Horizon, which basically defines our operating model to deliver that business strategy. That's now the next logical step.

Thank you.

We have a follow-up question from Charles Weston from RBC Europe. Please go ahead.

Hello. Thank you for taking my follow-up. I was listening to your previous answer where you said you weren't gonna give quarterly guidance, but I'm gonna ask perhaps again anyway. In particular around Q4. Q4, it's often a Q4 weighted year, just traditionally. Also you've got your market improvements expected, you've got the strategic revenues coming through, and you've got the Horizon savings. Could you perhaps give us some color on how Q4 weighted the EBITDA could be? Looking back the last couple of years, it was a loss for the first 3 quarters and a substantial profit in the 4th. Could that be the same or exacerbated even more?

Perhaps just wondered if you'd like to provide any color around what we might expect in Q2, whether there are any, you know, puts and takes in the comps that we might want to bear in mind for our modeling. Thank you.

Thanks, Charles. I think we iteratively approach, actually move from year to quarter. I won't do the quarter view, but I won't actually help you with a half year view. As you probably will remember, we've done that last time. It's really the dynamic difference here between H one and H two that Claire Hinshelwood was explaining. When you look at the changes for the second half, we did mention that we expect a further negative impact from the JEB licensing versus 2025. However, a positive impact from JEB growth, actually in the range of double-digit growth excluding DOW. There is a positive impact from underlying D&PD growth, where we set low single-digit growth in the base business. Strategic partnerships will add on top.

We also said that the FX effect will persist. That's our view, and we're not breaking it down further by quarter knowing exactly why, because the quarterly volatility is not helpful.

Okay. Thank you.

We will now take a text question coming from Brendan Smith from TD Cowen, saying, "Appreciate all the color on your end markets here. I wanted to first ask about the continued softness you mentioned in preclinical spending. Qualitatively, what do you think needs to happen for customers to really round the corner? We've continued to see pretty steady biotech funding recovery, some albeit early signs of AI efficiency gains across this sector. I guess I'm wondering if there's just a timing consideration here or if?

Okay, the sentence stops halfway, but I guess I get the question. We think it's a timing topic, as alluded to earlier. There's obviously two ways of looking at it. The funding situation seems to have stabilized in the last couple of actually months. From a biotech perspective, that's the external view. The internal view, I alluded to, cancellations have come down quite significantly. Some of the cancellations were more of scientific and strategic nature in the past, but some also where biotech companies have pulled off for other reasons. We've seen this decline also in the context of more confidence of biotech companies in funding. That's the internal view.

As alluded to earlier, we do not see AI as a structural or disruptive challenge to our business model because we are applying AI in order to accelerate drug discovery. We see this actually as a supporting tool in our toolbox.

That was the last question. I would now like to turn the conference back over to Sarah Fakih for any closing remarks.

Thank you, Moira. With this, we would like to conclude today's conference call. Thank you for your participation, and please feel free to reach out to the investor relations team should you have any further questions. Thank you and goodbye.

Ladies and gentlemen, welcome to the Fourth Quarter and Full-Year 2025 Financial Rresults. My name is Yusuf, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode and that this conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and then zero. The conference must not be recorded for publication or for broadcast. At this time, it's my pleasure to hand over to Sara Faki, Head of Global Communications and Investor Relations. Please go ahead.

Thank you, Yusuf. Good morning, good afternoon, and welcome to today's webcast and conference call. My name is Sara Faki, and I'm the Head of Global Communications and Investor Relations at Evotec. Please allow me to introduce today's speakers. Joining me on the call are Christian Wojczewskii, Chief Executive Officer of Evotec, Paul Hitchin, our Chief Financial Officer. Our Chief Scientific Officer, Cord Dohrmann, will be available for the Q&A session. Please note that this call is being webcast live and will be archived in the events calendar on our website. Before we begin, a few forward-looking statements. The discussion and responses to your questions on this call reflect management's views as of today, Wednesday, April 8th, 2026. During this call, we will make statements and provide responses that state our intentions, beliefs, expectations, or projections regarding the future.

These statements constitute forward-looking statements within the meaning of applicable securities laws. They are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied. Evotec disclaims any intention or obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances. For further information regarding these risks and uncertainties, please refer to our public filings and disclosures. With this, let me hand over the call to Christian.

Thank you, Sara. Good morning and good afternoon to everyone. Thank you for joining today's call. Let me start with the headline results for 2025 and the first month of 2026. 2025 was a year of significant progress for Evotec as we laid critical groundwork for the company's next chapter of sustainable and profitable growth. Throughout a persistently challenging market environment, we remained anchored in the strength of our science and the dedication of our teams, which continue to be the foundation of our performance. Building on these fundamentals, we introduced a new company strategy in 2025 that defined our priorities and now guides the transformation work underway in 2026 and beyond. Our four levers of midterm value creation, scientific leadership, operational excellence, better monetization of Just - Evotec Biologics, and capturing pipeline value have already translated strategy into targeted action.

As a result of this work in 2025, we have delivered more than EUR 60 million in annualized cost savings, streamlined our asset pipeline, and reduced our capital expenditure by around 60%, important steps that have strengthened our balance sheet and our financial resilience. Against the challenging market backdrop of 2025, financial results were at the high end of our guidance range, and Paul will go into more detail on that later in this presentation. Both segments of Evotec business have contributed to our progress in the past year. In Discovery and Preclinical Development, continued clinical advancement across partner programs delivered milestones and underscored the productivity of our platforms despite continued softness in early-stage biotech funding. Just - Evotec Biologics delivered a breakthrough year supported by the landmark agreement with Sandoz and continued progress across global health programs.

Last month, we kicked off our Horizon initiative, a comprehensive transformation of our operating model. We are already making substantial progress across the three Horizon pillars of operations, science, and commercial execution. The last of which recently saw the appointment of a new chief commercial officer, reinforcing our commitment to building a more agile, customer-focused organization. As Horizon implementation continues, we expect to see the first structural and financial benefits in the second half of 2026. Turning to the progress in our discovery and preclinical development segment on slide five, we saw robust clinical and scientific advancement over the past 12-18 months across key therapeutic areas, including oncology, neurodegeneration, and kidney disease, as well as exciting developments in emerging modalities such as condensate modulation. During this period, and as already reported during our Q3 results in November 2025, two partnered assets moved into phase II clinical studies.

Since then, a partnered preclinical asset advanced to a first-in-human phase I study, bringing our partnered clinical portfolio to a total of two programs in phase II and five programs in phase I. Let me briefly highlight the progress within some of our key alliances. In our cancer protein degradation collaboration with Bristol Myers Squibb, we are jointly developing a broad pipeline of next-generation molecular glue degraders, a revolutionary modality with the potential to target previously undruggable disease-causing proteins in an area in which BMS is the clear industry leader. The first candidate progressed from IND acceptance in November 2025 into a phase I clinical study in March 2026 in advanced clear cell renal cell carcinoma, the most common form of kidney cancer. These advancements, which validate the strength of our screening and AI-supported analytical platforms, resulted in milestone payments of $5 million and $10 million respectively.

In our neuroscience partnership with BMS, we achieved continued progress across a jointly developed preclinical pipeline focused on therapies for neurodegenerative disorders, triggering a $25 million milestone payment in October 2025. Lastly, in our kidney disease partnership with Bayer, a phase II clinical study in Alport syndrome, a rare genetic kidney disease, was initiated in December 2025, underscoring our discovery and translational capabilities in renal conditions. The momentum across these collaborations highlights our ability to translate our outstanding science into successful clinical. It validates our platforms and carries through on our fourth strategic lever, capturing pipeline value as assets advance to generate meaningful financial upside. Looking ahead, we expect the total number of assets in phase II to have grown from two to four during 2026. Turning from our small molecule business to biologics, let me give you an overview of our Just - Evotec Biologics segment on slide six.

2025 was a breakthrough year for JAB, defined by a strategic pivot away from a capacity-constrained manufacturing model toward an asset-lighter, technology-focused partner enablement model. This evolution, centered on our highly differentiated continuous manufacturing platform, is reflected in the news flow throughout the year, featuring technology-enabled partnerships and significant progress in global health programs. However, the defining milestone for JAB was the completion of our strategic agreement with Sandoz, which closed in December 2025. The agreement is valued at $650 million with additional royalty potential for 10 biosimilars, the six most advanced of which have an originated value of about $92 billion. Further recent developments include a multi-year BioMaP-Consortium award of up to $10 million from the U.S. government's Biomedical Advanced Research and Development Authority. The program aims to optimize the biomanufacturing of monoclonal antibodies against Ebola and Sudan viruses, strengthening preparedness for hemorrhagic fever outbreaks.

In January 2026, we also expanded our long-standing collaboration with the Gates Foundation, receiving a new grant supporting 10 new molecular design projects over the next three years. These projects apply our AI and computation-driven JMD platform to improve antibody developability and advance access to affordable biologics. Taken together, these advances show how JAB is evolving into a high-margin, technology-driven business with durable long-term value creation potential, firmly validating JAB as a core pillar of our future growth ambitions. Let me now hand over the call to Paul to walk you through our financial results.

Thank you, Christian, and a warm welcome from my side as well. On slide seven, you can see our condensed income statement is in line with the preliminary unaudited financial results we provided as part of the Horizon communication on March 10th, 2026. For the fourth quarter of 2025, group revenues increased by EUR 32.1 million or 14.5% to EUR 253.3 million. For the full-year 2025, decreased by EUR 8.6 million or 1.1% to EUR 788.4 million compared to the same periods in 2024. On a constant currency basis, Q4 revenues grew by 21% and full-year revenues grew by 1.7% compared to 2024. While the broader CRO market showed early signs of recovery in 2025, the environment for early-stage drug discovery remained challenging.

As a result, the full-year revenue decline was primarily driven by lower revenues in our DMPD segment, where revenues declined by EUR 27.3 million or 16.6% to EUR 137.1 million for the fourth quarter and by EUR 82.5 million or 13.5% to EUR 528.9 million for the full-year compared to the prior period. Unfavorable foreign exchange movements represented an additional headwind to full-year revenues of 2.8%, driven by the U.S. dollar and British pound. However, those effects were largely offset by strong performance in the Just - Evotec Biologics segment, including the positive contribution from the Sandoz transaction in the fourth quarter of 2025. Revenues within Just Evotec increased by EUR 59.4 million or 104.2% in quarter four, and by EUR 73.8 million or 39.8% to EUR 259.4 million for the full-year 2025 compared to 2024.

This growth was driven by the continued progress in the Sandoz partnership, including an incremental contribution from a license payment of approximately EUR 65 million in the fourth quarter. While revenues from the U.S. Department of Defense-related activities declined in the second half of 2025, following announced budget cuts, revenues of our non-Sandoz and non-DoD customers continue to grow by more than 60% in the full-year. Fourth quarter costs in Just - Evotec were temporarily elevated versus the underlying run rate, driven by additional expenses associated with the Sandoz transaction and temporarily higher material costs, both of which are expected to normalize early 2026. In line with our guidance, R&D spending decreased further and amounted to EUR 37.5 million or 4.8% of total revenues for the full-year 2025, compared to EUR 50.9 million or 6.4% of total revenue in 2024.

Investing in our technologies and platforms remains a core part of the strategy, and we will continue to allocate capital to scientific capabilities and technology leadership while maintaining a balanced investment approach in a challenging macroeconomic environment. Adjusted group EBITDA increased by EUR 29.5 million or 103.6% to EUR 58 million in the fourth quarter, and by EUR 18.5 million or 81.9% to EUR 41.1 million for the full-year of 2025 compared to the same periods in 2024. Adjusted EBITDA in the DMPD segment decreased by EUR 12.6 million to EUR 6.8 million in the fourth quarter, and by EUR 24.7 million to -EUR 12 million in 2025. Primarily driven by the aforementioned lower revenues, which contracted faster than the cost base, creating internal overcapacity and weighing on segment profitability, underscoring the need for the operational transformation program recently announced as part of Horizon.

Adjusted EBITDA in the Just - Evotec segment increased significantly by EUR 22.1 million or 463% in the fourth quarter, and by EUR 43.3 million or 443% to EUR 53.2 million in 2025 compared to the prior periods. This strong result reflects continued progress in the validation of our continuous manufacturing technology, as well as favorable shift in revenue mix towards higher margins and an asset lighter technology enablement model. Turning to liquidity and the balance sheet on slide eight, we closed 2025 in a solid position. At year-end, cash liquidity stood at EUR 476 million, representing a strong balance sheet with a net cash position.

The improvement in our cash liquidity reflects disciplined financial execution, including the monetization of technology leadership through Just - Evotec Biologics, the realization from maturing equity stakes, including the upfront payment from the sale of our minority stake in Dark Blue Therapeutics, and our continued shift toward a capital-efficient operating model with CapEx spend reducing 38% year-over-year. Importantly, we enter 2026 with no active financial covenants, providing us with a high degree of financial flexibility. Now let me hand back to Christian, who'll provide an update on some of our key revenue impacts.

Thank you, Paul. To further contextualize our 2025 results and frame the trajectory into 2026 and beyond, let me briefly address one of our key strategic levers, our long-standing partnership with Bristol Myers Squibb. From 2016 to the end of 2026, our two BMS collaborations in urology and oncology are expected to have generated close to EUR 800 million in cumulative revenues. At their peak, they accounted for more than 20% of group revenues, making BMS one of the most significant and successful strategic relationships in Evotec's history. With this partnership, the oncology collaboration today represents a larger contributor to BMS-related revenues. As illustrated on slide nine, it has evolved through distinct phases, from platform build-out to expansion, and now into portfolio maturation. These phases are characterized by alternating periods of investment and harvest, which are naturally reflected in corresponding changes in revenue contribution.

Since the peak in 2023, revenues from the oncology collaboration have declined by more than a third over the 2023 to 2025 period. This reflects a shift into a renewed investment phase focused on molecular glues and areas of exceptionally high scientific and commercial potential. While this transition has temporarily increased cost intensity and weight on DMPD profitability, it does not signal a weakening of the collaboration. Rather, it reflects the cyclical nature of a large multi-program discovery alliance. Looking ahead, it's important to recognize that the collaboration is already creating value in its current phase, with a focus on building scientific depth and portfolio quality. While this phase continues to require investment, the scientific value being created today is expected to translate into renewed revenue growth and improved margins. Importantly, this fluctuating profile is expected to evolve as programs progress through the clinic.

With the first joint asset having recently entered phase I, clinical stage programs are expected to progressively complement the base business from 2027 onward. This clinical progression will help smooth revenue fluctuations, add new growth drivers, and support the margin expansion underpinning our midterm framework, which Paul will discuss in more detail later in the presentation. Continuing on slide 10, I would like to address the second factor that significantly impacted our 2023 to 2025 revenue profile alongside our BMS collaboration, the evolution of our EVOequity strategy. Between 2016 and 2022, we invested approximately EUR 200 million to build up an investment portfolio of approximately 40 early-stage biotech companies. The objective was to gain early access to innovation while generating revenues through our role as an operational and scientific partner. At its peak, this portfolio generated close to EUR 100 million in annual revenues.

As these companies advanced into clinical development, their strategic relevance for Evotec naturally declined. This was accompanied by a reduction in our operational involvement and consequently lower revenue contribution. We've therefore moved decisively into the monetization phase of this strategy. Following the divestment of Recursion, generating proceeds of nearly $70 million at the end of 2024, and additional access throughout 2025, we have significantly reduced our equity exposure. As of year-end 2025, 29 investments remain with our strategic focus shifting from revenue contribution to value realization. These divestments represent pure upside for Evotec. Recent transactions include the sale of our stake in Dark Blue Therapeutics following its acquisition by Amgen in a deal valued at approximately $840 million, generating an initial cash consideration for Evotec of around $13 million.

In addition, the recently announced sale of Tubulis in a transaction valued at approximately $5 billion is expected to deliver cash proceeds of around $100 million to Evotec at closing. In both cases, the upfront amounts are complemented by meaningful contingent milestone payments of more than $150 million, providing additional future upside. EVOequity is transitioning from a cash-out to a cash realization model. As operating involvement declines by design, the associate wind will fade away in 2026 and beyond as we wind down the portfolio. On slide 11, let me briefly remind you of Horizon, our major operating model transformation and a core element of Evotec's value-creating strategy.

We introduced the Horizon transformation earlier this year to implement a new and focused operating model built across the three pillars of operational excellence, scientific leadership, and commercial execution with the goal of creating a more agile, more focused, and more competitive Evotec. Under the operational excellence pillar, we are streamlining our footprint from 14 to 10 sites in 2026 and 2027 with planned closures of sites in Abingdon, Munich, Lyon, and Framingham. This continues our shift from a dispersed multi-site structure to a focused network. The footprint optimization also anticipates a reduction of approximately 800 positions across affected locations and enabling functions, a necessary step to align capacity with demand and reinforce execution discipline. Under the scientific leadership pillar, Horizon will consolidate key capabilities into dedicated centers of excellence, each with clear mandates and end-to-end accountability, strengthening our ability to deliver integrated high-quality science.

Finally, under the commercial execution pillar, we're expanding our commercial organization and upgrading how we engage with customers under new leadership following the appointment of our new EVP and chief commercial officer, who will accelerate growth, drive a more integrated go-to-market model, and increase strategic partner engagement to improve our win rates across high-value mandates. We're now progressing at pace through the required legal and regulatory processes to deliver a structural run rate savings of approximately EUR 75 million by the end of 2027. These savings primarily reflect a structurally lower cost base resulting from targeted workforce reductions and reduced footprint-related overheads as we consolidate our global operations. We expect between 20%-30% of the total savings to materialize in 2026, with the remaining majority becoming visible in 2027. Horizon is a defined time-bound realignment with a clear end state. We plan to execute swiftly and only once.

Importantly, we do not expect material disruption to ongoing customer and partner programs. In the context of expanding our commercial organization under new leadership, on slide 12, we're very pleased to welcome Dr. Ashiq Khan as our new Chief Commercial Officer. Ashiq joined Evotec at the beginning of April, bringing more than 15 years of international leadership experience across biotech, CRO, and AI-driven discovery platform companies. He has closed multi-billion dollar agreements and led business expansion in markets around the world, including several years at Schrödinger, where he helped advance AI-enabled drug discovery partnerships and close major strategic pharma agreements. With a strong track record of driving growth and closing high-value deals worldwide, Ashiq will lead the build-out of a globally integrated fit-for-purpose commercial organization at Evotec.

Let me now show you on slide 13 how our leading commercial indicators are beginning to move in the right direction, as the new commercial organization we're putting in place is gaining traction. The selected indicators shown here are ordered along the commercial funnel, from early customer engagement through to net sales progression, and provide us with an early view of business momentum ahead of reported revenues. Over the course of 2025 and into early 2026, we've seen a strong decrease in negative change orders. At the same time, the number of proposals submitted to customers in our discovery segment has steadily increased, reaching levels around 50% higher than at the start of 2025. While this reflects improved commercial outreach and a more systemic engagement with customers, activity in preclinical development has not yet achieved the same momentum, reflecting a low number of fully integrated discovery to development customer engagements.

In parallel, the aggregated value of the proposals in the discovery segment has increased. Streamlining our sales and delivery processes has further led to improvements in execution metrics. Proposal turnaround times have been significantly shortened, and these improvements are translating into better order dynamics and reinforce our assessment that the new commercial organization is operating more effectively. These leading commercial indicators are now feeding through to sales performance. DMPD sales orders declined in 2024 and reached a trough mid of 2025. They recovered towards the end of the second half of 2025 and have since stabilized above early 2025 levels. Today, we're seeing our deal pipeline growing with increasing interest from potential partners. Looking forward, our differentiated technology platforms are expected to enable a higher number of strategic technology-driven deals starting in the second half of 2026.

While it is still early, we see initial indicators of recovery and the commercial transformation in DMPD being on track. Let me hand back to Paul to provide an overview of our path to sustainable growth in 2026 and beyond.

Thank you, Christian. On the next few slides, I'd like to take you through the building blocks of our 2026 outlook and how the measures we've discussed today translate into our medium-term framework. Let me begin with our full-year 2026 outlook on slide 14. As outlined in our Horizon communication on March 10th, we view 2026 as a transition year, with Horizon measures phasing in over the course of the year. For the full-year, we guide toward the group revenues of approximately EUR 700 million-EUR 780 million at incurred foreign exchange rates and EUR 730 million-EUR 810 million at constant exchange rates. Adjusted group EBITDA is expected to fall within the range of approximately EUR 0-EUR 40 million at incurred foreign exchange rates, and EUR 10 million-EUR 50 million at constant exchange rates. Turning to the phasing of the year.

The first half of 2026 will reflect transformation actions already initiated under Horizon. While we see an improvement in our commercial indicators, we still expect a weaker first half, driven by the continuation of early drug discovery market softness seen in 2025, and the non-recurrence of the $25 million Sandoz license that contributed to the first quarter of 2025. In the second half of the year, we expect a strengthening profile driven by an increasing number of strategic partnerships and a market recovery. Looking at the Just - Evotec Biologics is expected to maintain a strong underlying growth, recognizing the non-repeat of the EUR 65 million Sandoz license payment in the fourth quarter of 2025. Non-Sandoz and non-DoD activities are expected to grow by about 40% for the full-year of 2026.

This more than offsets the expected continued decline in the DoD related revenues following the announced budget cuts and foreign exchange headwinds. In DMPD, we expect soft standalone revenues in the first half of the year, with a recovery to low single-digit growth in the second half. In addition, we expect our strategic technology-driven partnerships to contribute more visibly in the second half, creating incremental commercial opportunities supported by our differentiated platforms. Taken together, these effects are expected to bring full-year DMPD revenues into the low to mid-single-digit growth range. For the full-year 2026, foreign exchange is expected to represent approximately 3.5% headwind to group revenues.

Beyond revenues, operational improvements resulting from the Horizon transformation are expected to become increasingly visible in the second half of 2026, with roughly 20%-30% of the EUR 75 million in structural run rate savings expected to materialize in the second half of 2026. In addition, removal of the cost drag from the sale of the Just Toulouse site will benefit our Just - Evotec Biologics business, contributing an estimated EUR 20 million year-on-year improvement in segment earnings. Having discussed our full-year 2026 guidance, let me now broaden the time horizon and on slide 15, briefly remind you of our new mid-range framework through to 2030, which we announced in March 2026. This framework reflects a phased trajectory from 2026 to 2030 and is designed to align the timing of Horizon transformation measures with the expected evolution of the revenue mix across our two business segments.

Within our multi-stage Horizon transformation journey, focusing on commercial excellence, operational simplification and technology leadership, we expect group revenues to grow to more than EUR 1 billion by 2030, with an adjusted EBITDA margin expected to reach 20% by 2028 and exceed that level by 2030. The midterm margin in progression is supported by a combination of external recovery and internal structural improvements. Externally, we expect the early stage discovery market to continue normalizing as industry innovations rebound. Internally, the trajectory is driven by the recurring structural savings from Horizon, a continued shift towards higher margin and more capital efficient revenue streams, and increasing operating leverage as growth and productivity resume. The key drivers and building blocks that underpin the anticipated midterm margin expansion are illustrated on slide 16. We see the DMPD segment growing at high single digits from 2026.

This reflects both a stabilization of early stage drug discovery market and the transition into the realization phase of our BMS collaboration, which will contribute approximately 50% of the expected DMPD earnings growth between 2026 and 2028 as jointly developed assets progress into and through the clinic. The Horizon cost reductions across our operating capacity, footprint and SG&A are expected to contribute nine percentage points of margin expansion. As previously noted, we expect to reach the full run rate effect of these savings by the end of 2027. In the Just business, the continued expansion of our customer base, together with new revenue streams from the proprietary platform components such as our cell line, our cell culture media, as well as license opportunities, support ongoing margin expansion.

These building blocks take us to the expected 20% Adjusted EBITDA margin by 2028. Further margin expansion is then projected to come from improved levels of automation and productivity, notably in our DMPD operations. Post 2028 margin expansion in the Just - Evotec business is additionally reflecting royalties from the commercialization of the 10 biosimilars under the recent Sandoz transaction. With this, let me hand the call back to Christian.

Before we sum up today's presentation, I would like to share an important governance update. Evotec Supervisory Board has proposed Dieter Weinand for election as new chairman at our next annual general meeting on June 11th, 2026. Dieter is a highly respected industry veteran with more than three decades of global pharmaceutical experience. He has held senior executive roles at companies including Bayer, Pfizer, Bristol Myers Squibb, and Sanofi, and most recently served as President and CEO and Chairman of Bayer Pharmaceuticals. He brings deep commercial expertise, a strong track record of driving performance and disciplined execution, as well as extensive board and governance experience. This makes him very well-positioned to support Evotec in its new phase, particularly as we sharpen our focus on cash and profitability.

At the same time, I would very much like to express our sincere gratitude to Professor Dr. Iris Löw-Friedrich for outstanding leadership and long-standing commitment as chairwoman of the Supervisory Board and for the important role she has played in shaping Evotec's strategic development. Before we turn to your questions on slide 18, let me briefly summarize the key takeaways from today's presentation. 2025 demonstrated that Evotec can deliver with discipline, closing the year at the high end of guidance through strong execution, cost control and CapEx discipline, even in a challenging environment. At the same time, Horizon provides a clear and actionable path towards sustainable, profitable growth through 2030, built on structural optimization and a more focused operating model. As part of this transformation, we have strengthened our commercial organization and will accelerate execution under new leadership.

While the DMPD environment has remained challenging, the headwinds are actively managed and expected to fade. With improving market conditions, we see the basis for recovery building into the second half of 2026. Taken together, we're actively transforming our business model toward higher quality, more capital efficient growth, with Just - Evotec Biologics playing an increasingly important role. These developments position Evotec to deliver profitable growth and sustainable value creation. With this, I would like to open the call for your questions. Thank you.

Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and then two. Participants are requested to only use handsets while asking a question. Anyone who has a question may press star one at this time. Our first question comes from Christian Ehmann, Berenberg. Please go ahead, sir.

Good morning, everyone. Thanks for taking my questions. I'll start with a few until I get back into the queue. First of all, I very much appreciate the 40% year-over-year growth figure for non-Sandoz, non-DoD business in the JAB segment. Could you give us a little bit more detail on the starting point in 2025? How much of your revenues in the segment were from non-Sandoz, non-DoD sources? The second one would be in regards to the future nature of the BMS. I think in the past it was mainly FTE rates and also revenues for work packages that had to be finished. Can we assume going forward that this will now shift to more of a royalty milestone-based remuneration plan?

The third question for this time would be, can you remind us about the current clinical plans BMS has for the other asset in phase I? I think it was called back in the day Evotec or EVT8683. Thank you very much.

All right. Shall we start with the first one, the Sandoz topic, Paul?

Good afternoon, Christian. Yes, you're correct, non-DoD, non-Sandoz revenue growing 40%. We would expect to see that by end of 2026 that the non-Sandoz, non-DoD revenue is about 50% of the overall just business at this point in time. That is a significant growth since 2024 when we were approximately 25%. I believe in 2025 we're approximately 30%, to give you a little bit of a frame.

I will hand over the third question to Cord, although Christian managed a bit the expectations. Typically, it should not be us talking about the intentions of the clinical assets of BMS, but maybe Cord can shed some light on that. On the second topic, the whole program was always constructed in a way that at some point in time, there will be an increasing amount of milestones and ultimately also royalty payments through this collaboration. Yes, by design, you're right. Cord, is there anything you can add on the clinical plans?

Not really, but maybe just to try and give a little color on this. We remain excited about the program. We cannot comment on exact plans from the BMS side to move this asset, EVT8683, forward. As you can imagine, entering phase II clinical trials on Alzheimer's, that's a very significant step. I think a more thorough phase I is usually warranted in this regard, and I think that's currently what's going on. We have every reason to believe that this will be moving forward.

Okay. Thank you very much. I'll be moving back into the queue.

Our next question comes from Charles Weston, RBC. Please go ahead.

Hello. Thank you for taking the questions. Mine are all a little bit more near-term focused, specifically on 2026. First of all, you've indicated for the second half that you're expecting a market recovery. I was just wondering if you could help give us some color in terms of your assumptions or your confidence around market recovery versus your own sort of self-help from your new commercial efforts. Secondly, I wonder if I could ask for a bit of guidance on BMS for 2026. You've indicated that 2026 will be a trough, and I think the number was EUR 139 million in 2025. How much of a headwind ballpark could we expect in 2026 from BMS? I guess the same question for Department of Defense. Just last one, please. For 2026 milestone payments, I think in March you got a $10 million payment from BMS.

In your Horizon presentation, it looked like up to EUR 150 million could theoretically be payable this year, and you've said that you're expecting two more assets to move into phase II this year. How much milestones should we be thinking about in total for 2026? Thank you.

All right, Charles, thanks for the questions. Near term 2026 is obviously two elements. One is our own doing, you're right. The other is the funding situation in biotech. Now, in our view, the funding situation has mildly improved. Also, when you look at the executed deals, this money will have to flow back into biotech, and it's very difficult to split the increase in proposal and deal activities into what's market and what's our doing. Charles would probably really appreciate. We've seen the activities going up steeply. We don't believe it's just our doing, we also believe that a part of that is the market. Yeah.

Yeah.

When it comes to the second question, 2026 trough and impact BMS.

Yeah. Charles, directionally on BMS, as you rightly say, we expect the trough to be in 2026. Relative to what you see in 2025, we would expect a high single-digit decline relative to 2025 solely for the BMS segment. I think your third question was assumptions around milestones related to BMS, and you're right. Couple of things here. Firstly, the $10 million that was noted in the recent press release will be recognized in the first quarter as income. As we think about future milestones, income-related milestones, we would expect somewhere around the same in the second half. The $100 million that you referred to I think also reflects the cash payment associated with deals rather than the income-related element associated with those deals, as that cash is, or the income is recognized over a period of time.

Okay. Sorry. Can I just clarify when you say high single-digit, do you mean as a percentage or as a euro number?

Sorry. Yeah.

Okay.

It's as a percentage.

Thank you very much.

Our next question comes from Swayampakula Ramakanth from H.C. Wainwright. Please go ahead.

Thank you. Thanks for taking my question, and good afternoon, gentlemen. Couple of quick questions. One is on the Horizon implementation. With an expectation of 800 positions being cut and consolidation to 10 sites, just trying to understand what could be the risk of customer disruption, especially from the talent loss. How are you managing some of the project continuity, especially with key partnerships like BMS? And the second question is, post the Toulouse site sale, can you help us quantify the expected development revenues, milestones, and the timing of the royalty fees from the 10 biosimilar molecules? And when could we expect the first biosimilar to reach the market?

Okay. All right. First topic, Horizon. You probably appreciate that this was top of our minds and one of our most important criteria when we made decisions not to disrupt the business and particularly ensure that the customer relationships amongst any partnerships will not be impacted. As I mentioned in my speech, we don't think that there is any material risk. We've been, around that time and since then, in constant dialogue with our customers. I can tell you at this point in time, there was also no negative feedback from the customer side. It's all well appreciated. By the way, one of the feedbacks that most people were actually telling us, "Look, the whole market has gone through similar exercises." We're not the only player on the market who is resetting. We handle it with a lot of care.

We spend a lot of time in preparing these moves. We know exactly what we're doing. We think this is a contained risk. Paul, on the Touluse side.

Yeah, I think the question was around timing of the royalty streams post the sale and post the transaction with Sandoz. To give a little bit more context and color on that one. We would see a ramp-up of both new products and licenses, and new products, I mean, so culture media, cell lines, and indeed licenses between now and 2028. By 2028, that's in the range of around 10% of the Just revenue, and growing. Then beyond 2028 is when royalties kick in, and these are linked to the LOE dates of the drugs coming off patent that have been disclosed in our nine-month update and I think on Sandoz's own update as well.

Thank you. Thank you both.

The next question comes from Brendan Smith, TD Cowen. Please go ahead.

Great. Thanks for taking the questions, guys. Maybe just a bit higher-level question from me, if I could. I appreciate all the color on kind of the near-term growth drivers for this year. We started to hear from some of your peers about pharma and biotech kind of deploying AI internally, actually driving some stronger order patterns for some tools companies as a lot of pharma and biotech are looking to validate their models and outsource new protein manufacturing and analysis. Just wanted to ask if you've started to see anything similar from your customers and partners and whether that might be an opportunity for the JV business in any capacity moving forward. Just trying to kind of understand what some of the pushes and pulls there could be. Thanks.

Yeah. Thanks, Brendan. AI and we recognize maybe we have not been so vocal about that in the past, but it's an integral part of our drug discovery platforms. Cord in the Q3 call also explained that, for example, our BMS collaboration has extensively utilized those AI platforms. Moreover, it's not just pharma and biotech, Brendan, it's also the AI companies who make use of the services of Evotec. We definitely see AI as an important tool for the future when you look at toxicology, DMPK, ADME-Tox prediction. There's probably a view for the next five, six, seven, eight, maybe 10 years. There's a coexistence, which could even drive volume up. We see that, we also hear that. We not only see this from biopharma, but we also see it from AI companies coming to us. I hope that helps.

All right. Thanks very much.

Our next question comes from Alexa Chan, Bank of America. Please go ahead.

Hey, thanks. It's Mike Raskin today. Want to follow up on a couple earlier comments you made in terms of DMPD in 2026. You talked about second half, low single-digit growth, and sort of what's supporting that in the market. I just want to clarify, are you seeing orders already? The orders you're seeing, is that already sufficient to justify that, or are you assuming further order improvement? The comments you had made about orders in the second half of 2025 being a little bit firmer, do you expect that to continue? Sort of if you could expand a little bit on what's underpinning that, if that's more biotech or pharma and sort of where that's coming from. Then, the separate question is going to be on the pacing of Horizon going forward.

Looking at what you presented in slide 11 in terms of that timeline, site closures, workforce reductions kicking off in 3Q, 4Q this year, whether there's any opportunity to move that up a little bit, or accelerate that. Just sort of what are some of the constraints on that? You alluded to limitations of local law, things like that. Is that more tied to that, or just that the decisions haven't been made yet? Thanks.

Thank you for the question. Maybe I'll start with the second one. When you think about the usual processes around site closures in Europe, there's obviously legal and regulatory requirements. We expect the workers' council negotiations, which have actually started in the first quarter, to continue through Q2 and Q3, with the site closures then basically starting in the fourth quarter, workforce reductions starting in the third quarter. All of that subject to agreements with local workers' councils. Yes, there is a phasing and wherever we can be faster, we are, and we will be. One of the sites obviously is in the U.S. where there are different requirements, and that's also why it is on a different time horizon. You're right, the limiting factor here is the consultation process. All the other work, the preparation work, has been done. We're not awaiting anything else.

With regard to the DMPD business, second half, low-single-digit, when you think about that, components of that, there's obviously the standalone business, the integrated business, and strategic deals. We haven't seen a lot of traction on larger integrated deals, but we expect given that our funnel on strategic deals has significantly improved in the last couple of months, that there will be an uptake also, or a stronger contribution from new strategic deals. The prospects that increased in 2025 have led to a better sales order trajectory compared to mid of last year. I think it's fair to say that it's going to be a mix between this plus the strategic deals that we see coming. Paul, anything you would like to add?

No, I think Christian has articulated it well, and again, I'll just refer to the slide where we see those strategic DMPD partnerships coming in in the second half and cautious on this low-single-digit growth in the second half. We'd see first half remaining challenging for the standalone business.

Great. Thanks.

As a reminder, if you wish to register for a question, please press star and one on your telephone. Our next question is a follow-up question from Charles Weston, RBC.

Thanks for taking the follow-up. The Tubulis up front is obviously very considerable for Evotec. I just wondered if you could comment whether you see other meaningful stakes in your portfolio of companies with clinical stage assets, which we should keep an eye on that could lead to some upside in the future in particular.

Charles, we've got about 29-30 companies left as of December 2025. We definitely believe that there are a couple of really interesting assets. As always, when you have a portfolio, some are more progressed, some are less advanced, but we clearly see some of them on a very good path. Now, as you can imagine, those are deal events. Either you have a buyer, you don't have a buyer, like what happened this week. It was fantastic. We do expect that there will be further opportunities in the future. As I said, for us, this is upside. For us, this is a cash-generating upside going forward. Yes, our portfolio remains interesting. Yes, we believe that there is upside going forward. Quantifying it and timing it, don't ask me, please.

Okay. Thank you very much.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Sara Faki for closing remarks.

Thank you. With this, we would like to conclude today's conference call. Thank you for your participation, and please feel free to reach out to the investor relations team should you have any further questions. Thank you and goodbye.