2017 financial results 20 March 2018

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Mervyn Snow
5 years ago
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1 2017 financial results 20 March 2018

2 Disclaimer The shares of Evolva Holding ( Evolva ) are traded on the SIX Swiss Stock Exchange (ticker: EVE ). This presentation may contain specific forward-looking statements, relating to Evolva's future business, development and economic performance. e.g., statements including terms like "believe", "assume", "expect" or similar expressions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actual results, financial situation, development or performance of Evolva and those explicitly or implicitly presumed in these statements. Against the background of these uncertainties readers should not rely on forward-looking statements. Evolva assumes no responsibility to update forward-looking statements or to adapt them to future events or developments FY 2

sustainably sourced, next-generation health,

3 Evolva summarized Introduction Swiss-US biotechnology company headquartered in Basel, Switzerland; shares traded on the SIX Swiss Exchange (SIX: EVE) Mission Bringing sustainably sourced, next-generation health, wellness, and nutrition ingredients to the world 2017 FY 3

Strategy Core Themes: Identifying alternatives for existing commercially available ingredients that are currently hard-to-source from nature Discovering and developing low cost bio-production routes

4 Strategy Core Themes: Identifying alternatives for existing commercially available ingredients that are currently hard-to-source from nature Discovering and developing low cost bio-production routes (yeast fermentation) for these ingredients Capital-light manufacturing strategy Specifics: Focus near-term on three key products: stevia, resveratrol and nootkatone Ramp product sales, and gradually reduce annual net cash burn, to target cash breakeven in 2021/2023 Enter partnerships on new or existing products only if this complements our core strategy outlined above 2017 FY 4

Near-term products with large potential Stevia Sweeteners Addresses stevia s taste issue at high

Nootkatone Ingredient found in minute quantities in grapefruit skin could be the next big thing in

5 Near-term products with large potential Stevia Sweeteners Addresses stevia s taste issue at high usage levels Wide utility in beverages and food; partnered with Cargill; brand name EverSweet Nootkatone Ingredient found in minute quantities in grapefruit skin could be the next big thing in pest control Initial focus on mosquitoes that transmit Zika and ticks that spread Lyme disease CDC contract worth USD 8.35 million EPA registration expected by year-end 2018 Resveratrol Beneficial ingredient in red wine Initial focus on dietary supplements other potential uses Veri-te TM brand gaining traction 2017 FY 5

6 EverSweet TM update Cargill announces the start of commercial production of EverSweet TM New Cargill agreement with the following elements: Evolva will receive a mid-single digit royalty on EverSweet TM sales Will generate income from EverSweet TM significantly sooner than under previous agreement Releases Evolva of significant operational and capital expenses Reduces Evolva s obligations to USD 18m payable over next 12 months Eliminates further milestones and performance criteria Adds certain additional high-intensity sweeteners Evolva will no longer require access to Cargill s fermentation capacity in Blair, Nebraska, but will continue to produce through its existing CMOs 2017 FY 6

7 Q4.15 Q4.16 Q4.17 CHFm Revenues continued to grow strongly Product revenues of CHF 2.0m, growth of 82% o both Nootkatone and Resveratrol grew strongly o Commercial pipeline continued to build R&D revenues declined due to wind-down of projects which were not mission-critical or profitable for Evolva Product sales (12-month rolling) 2017 FY 7

8 CHFm Shift of operating expenses towards commercial activities Manufacturing Increasing product sales Lower costs per kg H1 2016H2 2017H1 2017H2 R&D Manufacturing CG&A R&D Restructuring charge CHF 3.0m Headcount down Capitalized CHF 3.9m for EverSweet TM CG&A Commercial: more staff and promotion Restructuring charge CHF 1.4m 2017 FY 8

9 CHFm Strengthened financial position Starting cash Financing Investing Operations End cash FY 9

10 Delivery post August 2017 Site concentration Strategic re-focusing Strong focus on commercialization Financing 2017 revenues targets met Simplified Cargill/EverSweet TM relationship EverSweet TM commercial production starts 2017 FY 10

11 Outlook 2018 As we are continuously strengthening our commercial activities, which also includes an expansion of our sales force, our commercial pipeline is becoming broader and deeper. As a result, we expect our product revenues to further grow strongly and at least double compared to Revenues from R&D partnerships will continue declining in 2018, in line with our strategy of winding such relationships. In addition, we expect to see first royalty income from EverSweet TM, albeit very limited, in We are confirming the cost saving targets we announced in August 2017, which will take full effect starting in the second quarter of Overall, we expect to reduce the loss in 2018 following the restructuring of our company. Next-generation pest control represents an important additional commercial opportunity for our Nootkatone product (particularly against ticks and mosquitoes). We expect the EPA (Environmental Protection Agency) registration of Nootkatone to be completed by year-end FY 11

12 Shareholder value generation Topline Growth Break-Even 2021 target revenue of CHF 40 60m Target cash break-even in 2021/2023 Operations August 2017 restructuring. Staff cut underway from 178 to 100. Site consolidation focus on Switzerland and the US Strong commercial focus in place Capital Efficiency Even before August 2017 restructuring, Evolva had one of the lowest cash burn rates among peers Share Price Liquidity Average daily SIX trading value 2018 CHF 1.1m Part of Swiss SPI and life science indices Capital-light strategy using CMOs To realize our mid-term targets, we have raised CHF 86m in Q4 of FY 12

13 Key Contacts Oliver Walker, CFO Paul Verbraeken, Head of IR NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, JAPAN OR AUSTRALIA OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL

After successfully completing its transformation, Evolva is on track to build its business

NEWS RELEASE After successfully completing its transformation, Evolva is on track to build its business 28 February 2019 Evolva (SIX: EVE) posted its financial results today and provided business highlights