• VERY POSITIVE START 2017 WITH STRONG REVENUES AND PROFITS
• MILESTONES ACHIEVED WITH BAYER AND SANOFI
• CONTINUED PORTFOLIO EXPANSION AND STRATEGIC INVESTMENTS
• SUCCESSFUL INTEGRATION OF CYPROTEX
• NOVO A/S NEW STRATEGIG INVESTOR IN EVOTEC 

Hamburg, Germany, 10 May 2017: Evotec AG (Frankfurt Stock Exchange: EVT, TecDAX, ISIN: DE0005664809) today reported financial results and corporate updates for the first quarter of 2017. 

FINANCIAL PERFORMANCE: STRONG START - EXCEPTIONAL GROWTH IN REVENUES AND ADJUSTED EBITDA 

- Group revenues: 34% increase to EUR 50.2 m (2016: EUR 37.5 m); 

EVT Execute revenues up 24% to EUR 47.9 m (2016: EUR 38.6 m); 

EVT Innovate revenues up 96% to EUR 12.6 m (2016: EUR 6.4 m) 

- Adjusted Group EBITDA increased to EUR 13.2 m (2016: EUR 7.2 m); 

Adjusted EBITDA for EVT Execute increased to EUR 12.2 m (2016: EUR 9.6 m); 

Adjusted EBITDA for EVT Innovate increased to EUR 1.0 m (2016: EUR (2.4) m) 

- R&D expenses up 6% to EUR 4.7 m (2016: EUR 4.4 m);
- Strong strategic liquidity position of EUR 185.0 m 

EVT EXECUTE - STRONG OPERATIONAL PERFORMANCE 

- Significant progress within ongoing alliances
- New integrated drug discovery agreements, e.g. with Dermira (USA) and Asahi Kasei Pharma (Japan)
- Strong start for Cyprotex PLC with positive contribution to revenue and adjusted EBITDA 

EVT INNOVATE - LEADING DRUG DISCOVERY INNOVATION 

- Significant first milestone demonstrating pre-clinical proof of concept within diabetes alliance with Sanofi (TargetBCD)
- Initial milestone achievement in multi-target alliance with Bayer in kidney diseases (CureNephron)
- Continuing equity financing activities (e.g. Forge Therapeutics and Eternygen) 

CORPORATE 

- NOVO A/S new strategic investor in Evotec holding >10%; Nomination for election to Supervisory Board at the AGM (Michael Shalmi, Novo A/S; after period-end) 

GUIDANCE 2017 CONFIRMED 

1. FINANCIAL PERFORMANCE 

STRONG START - EXCEPTIONAL GROWTH IN REVENUES AND ADJUSTED EBITDA 

The 2016 and 2017 results are not fully comparable. The difference stems from the acquisition of Cyprotex PLC ("Cyprotex"), effective 14 December 2016. The results from Cyprotex are only included from 14 December 2016 onwards. 

In the first quarter of 2017, Evotec's Group revenues grew to EUR 50.2 m, an increase of 34% compared to the same period of the previous year (2016: EUR 37.5 m). This increase resulted primarily from an increase in base revenues, the contribution from Cyprotex (EUR 6.0 m) and milestone payments. Evotec's base revenues for the first quarter of 2017 were EUR 44.0 m, an increase of 30% over the same period of the previous year (2016: EUR 33.9 m). Revenues from milestones, upfronts and licences increased to EUR 6.2 m compared to the same period of the previous year (EUR 3.6 m) including predominantly milestones from the collaboration with Bayer and Sanofi. The gross margin amounted to 37.4% in the first three months of 2017 (2016: 33.3%). This significant margin increase over 2016 primarily reflects growth in base revenues, high milestone achievements, improved capacity utilisation as well as favourable foreign exchange rate effects. 

In the first quarter of 2017, Evotec's R&D expenses amounted to EUR 4.7 m (2016: EUR 4.4 m). This increase is in-line with the Company's strategic plans and primarily results from focused investments in oncology and metabolic projects. Selling, general and administrative (SG&A) expenses increased as expected by 36% in the first quarter of 2017 to EUR 7.3 m (2016: EUR 5.4 m). This increase mainly results from expenses of Cyprotex including moving costs as well as an increased SG&A headcount in response to Company growth. 

Adjusted Group EBITDA in the first quarter of 2017 increased significantly and amounted to EUR 13.2 m (2016: EUR 7.2 m). Group EBITDA was adjusted for changes in contingent consideration. Evotec's operating income in the first quarter of 2017 amounted to EUR 9.7 m (2016: EUR 2.7 m).
Liquidity, which includes cash and cash equivalents (EUR 77.6 m) and investments (EUR 107.4 m) amounted to EUR 185.0 m as of 31 March 2017 (31 December 2016: EUR 126.3 m). This strong increase is mainly due to the capital increase with Novo A/S announced in February 2017. 

Revenues from the EVT Execute segment amounted to EUR 47.9 m in the first quarter of 2017 (2016: EUR 38.6 m) and included EUR 10.3 m of intersegment revenues (2016: EUR 7.5 m). This increase was mainly driven by the strong performance of the base business and three months revenue contribution from Cyprotex. The EVT Innovate segment generated revenues of EUR 12.6 m (2016: EUR 6.4 m) consisting entirely of third-party revenues. This increase compared to the same period of the previous year results mainly from milestone payments from the Bayer and Sanofi partnerships. Gross margin for EVT Execute amounted to 27.1% while EVT Innovate generated a gross margin of 56.9%. R&D expenses for the EVT Innovate segment amounted to EUR 5.8 m in the first quarter of 2017 (2016: EUR 4.9 m). In the first quarter of 2017, the adjusted EBITDA of the EVT Execute segment was positive at EUR 12.2 m and improved compared to the same period of the previous year (2016: EUR 9.6 m). The EVT Innovate segment reported a positive adjusted EBITDA of EUR 1.0 m (2016: EUR (2.4) m). 

2. EVT EXECUTE & EVT INNOVATE 

EVT EXECUTE - STRONG OPERATIONAL PERFORMANCE 

The first quarter of 2017 saw a strong operational performance in the EVT Execute segment. Cyprotex had a strong start and its integration into the Evotec Group is proceeding according to plan. At the beginning of the year 2017, the UK operations of Cyprotex moved from Macclesfield to Alderley Park which allows for future expansion and consolidation of Cyprotex' UK operations into a first-class scientific facility. 

In addition and amongst other highlights, Evotec entered into a new integrated lead discovery collaboration with Dermira to identify inhibitors of a novel target for treatment of itch and neuro-inflammation. Under the terms of the agreement, Dermira takes advantage of Evotec's expertise and proprietary, industry-leading capabilities for rational design of molecules and integrated drug discovery capabilities. 

EVT INNOVATE - LEADING DRUG DISCOVERY INNOVATION 

EVT Innovate started strongly in 2017 with multiple important milestones achieved in its alliances with Bayer in kidney diseases and with Sanofi in diabetes. 

Alongside its EVT Innovate strategy, Evotec continues to participate in equity financings with the aim of developing assets to next value inflection points. Along these lines, Evotec further expanded its relationship with Forge Therapeutics by participating in Forge's latest funding round (Series A). 

3. CORPORATE 

NOVO A/S NEW STRATEGIC INVESTOR IN EVOTEC 

On 09 February 2017, Evotec announced that through a private placement capital increase, Novo A/S invested EUR 90.3 m against shares of Evotec. Subsequent to this initial investment, Novo A/S increased its shareholdings in Evotec to above 10% by acquisition of additional shares through public markets. 

4. GUIDANCE 2017 CONFIRMED 

Webcast/Conference Call 

The Company is going to hold a conference call to discuss the results as well as to provide an update on its performance. Furthermore, the Management Board will present an outlook for the fiscal year 2017. The conference call will be held in English. 

Conference call details 

Date: Wednesday, 10 May 2017
Time: 02.00 pm CEST (01.00 pm BST/08.00 am EDT)

From Germany: +49 69 22 22 29 043
From UK: +44 20 3009 2452
From USA: +1 855 402 7766
From France: +33 170 750 705
Access Code: 37969784# 

A simultaneous slide presentation for participants dialling in via phone is available at www.audio-webcast.com, password: evotec0517. 

Webcast details 

To join the audio webcast and to access the presentation slides you will find a link on our home page www.evotec.com shortly before the event.
A replay of the conference call will be available for 24 hours and can be accessed in Europe by dialling +49 69 22 22 33 985 (Germany) or +44 20 20 3426 2807 (UK) and in the USA by dialling +1 866 535 8030. The access code is 654573#. 

FORWARD LOOKING STATEMENTS

Information set forth in this press release contains forward-looking statements, which involve a number of risks and uncertainties. The forward-looking statements contained herein represent the judgement of Evotec as of the date of this press release. Such forward-looking statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, and which could cause actual results to differ materially from those contemplated in these forward-looking statements. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based.