Thank you, George, and good day, good afternoon to all of you following our q one two thousand twenty five results webcast today. Only three weeks after the presentation of our strategic review in April, we will be picking up on the discussions we had in the meantime with some of you. And with that, I think I can move on to Slide two in the presentation. As usual, it's my duty to point to the disclaimer and the cautionary note regarding forward looking statements, which you find on that slide. And with that, I hand over to Christian Wojciechowski, our CEO. The floor is yours.

Good afternoon, and thank you for taking the time to dial in. During our last call on April 17, we shared our revised strategy. We talked about our value creation levers. We explained the components of our midterm plan, and we provided guidance for 2025. The latter based on our understanding of the current underlying market dynamics and Evotec specific business developments. Today, we will focus on Q1 results. Our group performance in Q1 was in line with our expectations and along what we indicated three weeks ago. Therefore, we'll keep today's presentation short. Nevertheless, we have earmarked sufficient time for the dialogue with you after the presentation. So let me start giving you an overview of the first quarter. Over the past couple of months, we have been able to close a few exciting deals. We are particularly proud of the news around our protein degradation collaboration with BMS, which has made further progress. We're expanding the number of high value molecular glue degraders. I will get back to this topic a bit later since this collaboration is an excellent showcase for how our strategy of technology leadership translates into superior business opportunities. Another highlight to mention is the reception of a grant from the Korean government to develop novel antibody treatments for lung fibrosis.

The signing of new expanded programs is a strong testament of our differentiated capabilities and drug recovery and will contribute to future revenue streams. Short term and as outlined in April, the market in shared R and D remains soft, resulting in revenue decline versus Q1 twenty twenty four and the overall revenue development in the first three months stays slightly below expectations. In contrast, Just Evotec Biologics has again delivered before results. We see a growing customer list, which is extending from generics providers and smaller biotech to big pharma and biotech. The revenue development in the first three months is slightly ahead of our expectations and shows a very encouraging trajectory for the future. Three weeks ago, I spoke about our new strategic direction. At Evotec, we strive for technology and science leadership in everything we do. We're pioneers in drug discovery. Together with our partners, we accelerate the journey from concept to cure. We achieve this by leveraging cutting edge technology, disruptive science, and AI driven innovation. We're focusing on two business pillars, drug discovery and preclinical development as well as just Evotec Biologics. Following our conversation from last call, let me share some insights on how technology leadership leads to superior business opportunities, not in theory, but in real life.

In shared ID, our scope is sharply defined from early stage target ID to IND. We offer essential CRO services to our clients such as synthetic chemistry, in vitro biology, protein sciences, DNPK services and others. We provide our services on a standalone transactional basis. This is shown in the upper blue part of this chart. In our more advanced commercial model, exemplified in the lower part of this chart, we help our customers to accelerate the journey of drug discovery, to improve probabilities of success and to reduce risk. We provide access to our proprietary tools, next generation technology, disease expertise and mass data to support a selected number of partners in strategic collaborations. The CRO central then become a strong supporting element of those collaborations. When it comes to our next generation platforms, I would like to highlight four, which are shown on the right side. Our Molecular Patient Database, iPSC, PanOmx and PanHunter. First, eNPD, our molecular patient database, has been built over years and has constantly expanded. It not only covers clinical data, phenotypic data, biopsies, but in particularly also multiomics data such as genome, transcriptome, proteome data. Based on these datasets, Evotec is uniquely positioned to identify and validate disease signatures and mobile targets intervene very effectively with disease processes.

Our iPSC platform enables us to take insights out of the NPD, forward into the drug discovery process and build disease relevant models directly based on patient cells and tissues. Our high performance phenomics platform seamlessly allows us to profile patient samples at high throughput and to comprehensively profile compounds in in vitro and in vivo models using OMX technologies. And finally, our PanHunter platform is a unique AI supported analytics tool to effectively process and analyze these multidimensional datasets. The amount of data that our platforms generate is huge. For example, we've gathered over 500,000,000,000 data points from over 20,000 patients. This represents the most complete dataset for quite a large number of patient cohorts. Our iPC platform allows us to model diseases in over 25 cell types. Within these cell types, we can cover over two fifty genetic disease models. Finally, using our Panomics platforms, and here in particular our Transcriptomics and Proteomics platform, we have generated over 3,000,000 transcriptome and over 500,000 proteome profiles. All three platforms operate at an unprecedented industrial scale and are made accessible to our strategic partners. Of course, we're applying AI supported state of the art data analytics to separate real signal from noise and thus to support our customers in the drug discovery journey.

So how are we generating value with this technology? For example, both of our BMS collaborations are originally based on these platforms and they continue to thrive. We launched a strategic partnership in the field of neurology almost ten years ago. For this partnership, molecular patient data and the iPSC platform have and continue to be an important driver. In the March, we announced significant progress in this collaboration, which triggered a US20 million dollars payment. While our neurology partnership originate from molecular patient data and EIPC platform, our oncology collaboration, shown here on this page hinges more on our On X platform. It is progressing very successfully. Just recently, we announced key scientific achievements, expanding the pipeline of high value molecular blue degraders. The performance based payments amount to $75,000,000 Furthermore, in the second half of last year, we announced a further expansion of the collaboration into a new area. In summary, our technology and science leadership in drug discovery is giving us access to business opportunities beyond the essential CRO services. It broadens our addressable market and it provides superior value generation potential since Evotec not only is paid for services, but also participate significantly in the successful development of programs by milestones and royalties.

Let me now hand over to Paul, who will speak about our Q1 results.

Thank you, Christian, and a warm welcome from my side. Let me guide you through our first quarter financials in more detail. Our Q1 twenty twenty five group revenues reached €200,000,000 a 4% decrease versus the first quarter of twenty twenty four. Our revenue performance in the first quarter reflected two counterbalancing effects. Firstly, our shared R and D revenue declined from €155,200,000 in the first quarter of twenty twenty four to €140,600,000 in the first quarter of twenty twenty five in a persisting soft market. The year over year decline in revenues largely comes from our BMS activities and softer transactional discovery work. This follows the trend that we saw in 2024. As mentioned in our prior call, lower BMS revenue is a temporary effect with a partner where we've seen very strong continued growth over recent years and which is expected to continue in the mid term. As you heard in Christian's opening, looking forward, we have a strong BMS work packages and an excellent asset pipeline. In contrast, Just Evotec Biologics continued to grow strongly in the first quarter, reaching €59,400,000 of revenue, which compares favorably to a tough comparison in the first quarter of twenty twenty four and is slightly ahead of our expectations.

The majority of the first quarter twenty twenty five year on year growth in Just Evotec Biologics came from expanded contracts with existing non Sandoz customers and our new customer base as we expand the reach of our technology. Our R and D spending has reduced by 33% versus prior year as we direct our investments to those most relevant for our partners. Our first quarter spending is now broadly in line with our new expected run rate for the year as we continue to focus on our R and D activities. Adjusted Group EBITDA reached €3,100,000 driven by a stronger than expected contribution of €10,000,000 from Just, offsetting the lower operational leverage from the softer revenues in the shared R and D segment. Continuing with our cash flows, Operating cash flow in the first quarter of twenty twenty five has improved versus prior year of the first quarter due to favorable changes in working capital. Operating cash flow should further improve in the second quarter as we see the effect of receipts for the completed piece of the BMS oncology work packages highlighted by Christian earlier in the call. Investing cash flow is largely driven by our CapEx spending of €18,000,000 in the first quarter of twenty twenty five.

Our CapEx spend represents a substantial reduction versus the first quarter of twenty twenty four and reflects the planned ramp down of the Just Evotec to lose site investments and the move towards the new CapEx base level I mentioned in the last call. Overall, our liquidity has been developing as expected, decreasing by EUR26 million to EUR371 million by the March 2025. Our liquidity was supported by a drawdown of an existing R and D financing facility with proceeds of €44,000,000 which reduced the cash outflow from operating and investing activities. Our net debt consequently increased to €107,000,000 translating to a net debt leverage of 5.97 times adjusted EBITDA. As indicated during our April 17 call, we expect to temporarily elevated net debt leverage during the period of our covenant wafers. You may recall that in the April 17 update, we provided a waterfall containing the building blocks for our full year 2025 guidance of 30,000,000 to €50,000,000 of adjusted EBITDA. One of those building blocks is incremental cost out measures in our shared R and D business that will contribute on top of the priority reset program. We have already made significant progress on the implementation of those cost out initiatives, and we will see the accruing impact over the coming quarters.

Today, I want to provide you with details of the implementation progress of three key measures. Firstly, we have completed the closure of our Cologne site at the February and have completed the remaining target roll reductions by the end of the first quarter. While some of those savings are already visible in our first quarter financials, you should see the full run rate effect in the second quarter and following quarters. Secondly, we are carefully evaluating the need to rehire open positions based on our existing capacity and business need. The combination of restricted hiring activities and organic attrition in shared R and D FTE will reduce by an additional 180 FTE on top of those announced in the priority reset, with much of this impact already in effect. Finally, we continue to challenge all areas of discretionary spend. We already seen the first reductions on external spend versus 2024. However, as our external spend is spread across the full year, the progress will unfold over the remainder of 2025. In summary, our incremental cost savings measures are well on track with more than 50% of the planned savings already having been implemented by the end of the first quarter of twenty twenty five, with the full benefit on our cost baseline seen over the remaining quarters.

Finally, a reminder of our full year 2025 guidance, which we reconfirm with group revenues of EUR $840,000,000 to $880,000,000, R and D expenditure of EUR 40,000,000 to 50,000,000 and adjusted EBITDA of EUR 30,000,000 to 50,000,000. And lastly, another housekeeping item, our unchanged mid term outlook. As presented on April 17, we expect the average annual growth rate over the coming four years to be in the range of 8% to 12% and EBITDA margin is expected to exceed 20% by 2028. As always, we are now happy to answer your questions. So George, please start the Q and A session.

Thank you very much. We will now begin the question and answer session. Session. Our first question comes from Christian Ehmann with Warburg Research. Please go ahead.

Questions, I have two at the moment. Given that you mentioned that your segment performance was deviating from your expectations so that shared R and D was worse and JEB was better than expected. Do you see or what's your gut feeling about the cost over the year? Do you think this will persist in the coming months or quarters? What is your stance on this right now? And my second question would be towards there's a lot of chatter online about various biotech layoffs in the state of biotech and also big pharma. Do you see an impact of those layoffs in terms that you see in stronger incentive for those companies to really engage you in additional CRO activities over the next months or years? Thank you.

Thanks, Christian. And maybe I'll start and we'll see if we need Paul to check-in. On the first question, as Paul was alluding to, the guidance remains for good reasons. As we said, we are slightly below expectations on shared on these, slightly above on just in the mix. We are aware we're probably a bit better on revenues than we expected, and that's also why we see there's no need to change the outlook for the year. Obviously, when it comes to shared R and D, as we already alluded to in the last call, there is right now a very soft market environment and everyone is observing what's happening. Yes, frankly, from a market perspective, no news to report. So that's why we remain confident with our guidance that we gave in the last meeting. On the biotech layoffs, well, it's obviously two sides of the coin. Right? On the one hand, more cautious spending that's not helping. On the other hand, if you see layout layoffs and particularly also in pharma that ultimately the work needs to be done by someone. And I guess that's your question. So we're happy to pick up the work that is then not being done anymore in house.

Let's put it that way.

Thank you very much.

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

Hello. Thanks for taking the questions. Three, please. The first is, could you provide some color on your pipeline in each of Just Evotec Biologics and shared R and D, specifically around customer concentration, product concentration perhaps outside of BMS and Sandoz, which are obviously very big? Secondly, on the covenant, you said, I think, you have a waiver until Q3. Does that mean it's tested in Q3? Or is the first test in Q4? And what are the key levels that we should be looking at here? And then lastly, you mentioned working capital should improve in the second quarter. Could you perhaps provide a little bit more color what that means? Obviously, there's a BMS payment, but what else might be happening in working capital for the remainder of the year? And are there any major payments for the rest of the year expected from your collaborations? Thank you.

Thanks, Charles. Let me briefly touch upon the first question, and I'll hand over covenant and working capital to Paul. The mix has changed over the last couple of years. We've seen in previous years bit of a trend towards more concentration towards larger accounts, particularly in the year 2023, I would say, where, say, we peaked on the the BMS side. The more recent trend is that this has softened a little bit. So the the concentration hasn't necessarily increased with regard to the super large accounts. And that is also the case for our Just business where I mentioned earlier that we've been quite successful in lining up new accounts and expanding our business with those new accounts. So I would almost wanna say that 2023, '20 '20 '4 was probably the peak in terms of concentration that has come down a little bit.

Paul? Hey, Charles. Yeah. Just on your question around covenant, just as a reminder, no active financial covenants in place. We've got covenant waivers for drawn lines until third quarter twenty twenty five, as you rightly say. And what I would say to answer your specific questions, testing will be on in the fourth quarter on the third quarter results. And in terms of development of working capital receipts, you heard at the beginning of the call around BMS payments, so we would expect those to come in over the course of the remainder of the year, much of which will be in the second quarter. And then in addition, as you appreciate, we have a number of just related work order payments as is usual for us in that business.

Thank you.

Thanks. George?

The next question comes from Joseph Hedden with Rx Securities. Please go ahead.

Good afternoon. Thanks for taking my questions. You continue to highlight the soft environment for shared R and D. And I think a few weeks ago, you were discussing the continuation of the kind of decline in across the first half of the year with perhaps some recovery in the second half. Can can I just ask what's giving you confidence of of of this recovery? Perhaps if you can talk in terms of metrics that you in the conversion of closed sales. I'm I'm just interested in also how how much these future BMS work packages factor in. Does that does does that does that alone return you to other elements of shared R and D that is also required? Thank you.

Thanks, Joseph, for the question. On the the overall market, and you may recall in April, our message was we see a soft market environment and we expect the business to be around twenty twenty four levels at the top end of our expectation, top half. Right? And that hasn't changed. There is actually no indication in either direction that the market is either going south or all of a sudden going north. And and that is based on the conversations that we're having with our clients, which continue to be very fruitful. And we also see business coming in. But as I said earlier, in the April call, it comes in smaller chunks, and there is more slicing of work, which indicates that there is more conservativeness in in in in in spending at the customer side. With regard to the work packages, I'd like to remind you that, obviously, this is a large multiyear program. And throughout the year and also over the years, we are moving along scientific progress in a drug discovery process. And that means that we're touching target identification, hit identification, lead optimization, and so forth. And those work packages have they come with different amount of work or site, and hence, they also come with different amount of intensity and they come with different revenue profile.

And that profile changes also depending on what on a quarterly basis we discuss with our partner here, whether we should go back to the drawing board, change the profile a little bit, do some more testing or accelerate the work on other other parts of the business. So it's a bit of a a partnership that is changing over time, but growing in the long run. And that's why you also can't sort of draw a single line a month over month with this collaboration. That said, we mentioned that over the last ten years, over the last five years, we've seen this partnership growing substantially and we also expect given in the midterm future.

Okay. Thank you. And perhaps if I could have one on Just. You talked a few weeks ago about how the ramp up for Toulouse is gonna subdue EBITDA relative to 2024. And of the ramp up costs over the rest of the year, please?

Paul will have Paul will cover this one.

Yeah. Hi, So, yeah, you're you're right. So quarter, as we said, was stronger than expected. There's a little bit very confident on the full year landing for for Just Evotec. In terms of ramp up of costs, you are also correct, we started ramping up those costs in the fourth quarter for readiness of in you over the rest of the year, again, as we described in the April call.

Our next question comes from Fin Scherzler with Deutsche Bank. Please go ahead.

Yes. Hi, and thanks for taking my question. I also So what I'm trying to get at at is will the for the segment? And then it would be interesting to hear on the remaining headcount reduction you had in the shared R and D business, how much was there still in 1Q? So I'm trying to bridge again the different moving parts and trying to get at where 2Q could end up. So if you could expand it.

Important message with Paul, maybe a few more details.

No, exactly. Thanks for the question. So first of all, full year guidance remains. So this is within our expectations. As I did just say in the last question, there is a little bit of timing and over performance in the first quarter for Just Evotec relative to our initial plans. That said, the segment continues to do well, remains within our overall plan for the year. In terms of headcount reduction, what you see if you think about the elements that I described, first of all, we have closure of the site in Cologne and exit of other headcount that has taken place over the course of the first quarter. So I think February, March predominantly. Then we also have our new kind of attrition, net attrition run rate that we exit the year exit 2024 on a lower flight level. So part of that is already within our run rate going into the year. Then we have additional some additional extra in the first quarter, as we say, see some level of net attrition outflow. So we, as I said in the overview, we enter the year in the first quarter where we need to be and aligned with what our guidance was, which we described in the April 17 call.

The full run rate effect though, as I described, will only be Thank you.

Back to George, please.

Thank you very much. We continue with the question of Charles Douglas with Wainwright. Please go ahead.

Hi, good morning. I think that's me. So Doug from H. Wainwright. Okay. So I guess, obviously, there's been questions about the overall environment, especially focused on industry and sort of the potential negative impact. I'm curious as you look at The U. S. And I know this is potentially a very dynamic situation and there could be changes, but the prospects for significant cuts to NIH funding, does that potentially create opportunities for you with a pullback in some of that very early stage research? Thank you.

As you write to project what's going to happen next. That's why we also remain a bit cautious on statements. On the exposure side, we already mentioned last meeting, last call that our exposure to NIH and other governmental bodies from the revenue perspective is quite fairly limited. So we're not expecting any direct impact, obviously. Then the question becomes a footprint in The US. Does it actually support? And also that one we addressed last last meeting, we have research facilities, the East Coast to serve our clients on the shared R and D perspective. We have manufacturing facilities, West Coast our just clients. So we're prepared, but we also still a bit on the parking lot and waiting how this all will be sorted out in the midterm.

And I guess as a follow-up on just biologics to skin. So obviously, so far, pharmaceuticals have been excluded from tariffs or proposed tariffs. I'm just curious, have you had conversations with clients who might be interested in perhaps shifting manufacturing if there does seem to be some kind of implementation of tariffs? And does that make The US side more attractive? Thank you.

Thanks, Doug. And as I mentioned, we're not short of conversations. Let's put it that way. The Just business is growing fast, and we see a lot of inbound request support. Whether it's ultimately triggered by tariffs or our great technology, doesn't really matter. But what I don't see or what we don't see is that on a weekly basis, people base come in and and leave. This is so dynamic right now that it's really difficult also for our clients to make ultimate decisions. That said, as I as I mentioned, there is sufficient inbound activity here to to to make a bold statement that the Just business will continue to strive for the next couple of quarters.

Okay, great. Thank you so much.

Our next question comes from Brandon Smith with TD Cowen. Please go ahead.

Thanks. Actually, just a quick one from us. Apologies if I missed it, but I wanted to get your thoughts actually on the recent FDA announcement confirming agency's intention to begin phasing out animal testing for biologics in lieu of more computational AI models and organoids. I guess I'm really just wondering, have you had any conversations with customers or internally about what impact do you expect this to have on your businesses at all? And I guess I'm really just wondering how you see Evotec's positioning as FDA begins rolling out some of these changes and maybe if you expect anything similar on the horizon with EMA in Europe. Thank you.

Thanks, Brendan. Also, not a new conversation. Actually, the EMA in Europe has been looking at it also since quite a while. I would I would say it's fair to say that we are well prepared for that, but maybe, Port, you alluded to that a little bit. Thank you for the question. So technologically, Evotec is is really excellently positioned for this mainly due to the fact that we have, for quite some time, focused on patient centric approaches, in particular, in molecular patient databases, iPSC technology to model in vitro diseases and in particular, the PanOmx approach, which is really using on mixed technologies to bridge the gap between in vitro and vivo models in the clinic. And so technologically, we're extremely well positioned. We have also improved, especially when it comes to safety tox profiling technologies or adapted these technologies there. The I would say that the pickup commercially is still sort of muted at this point in time. But I think in that regard, the FDA announcement is extremely welcome from our point of view. And we believe that, you know, discussions that we used to have and how, you know, this could be done better in the future will create more we will have more going forward here on these discussions going forward.

There are no more questions at this time. I now hand over back to Mr. Brown for any closing remarks.

Thank you, George, and thanks to all of you who participated in this call and thank you for the questions. In case you want to discuss more details in the coming days, feel free to reach out to me. Line is as usual is always open. Next opportunity for all of us to meet in person is our AGM on the June 3 in Hamburg. We are looking forward to seeing as many of you as possible there to continue the dialogue. Thank you very much for now. Have a great rest of the day, and goodbye.

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