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Investing.com -- Shares of Evotec (ETR:EVT) climbed 6.4% as the company reported fourth-quarter earnings that surpassed consensus expectations and outlined a new strategy aimed at reducing complexity and costs.
The biotechnology firm announced its Q4’24 results, which included a revenue of €221.2 million and EBITDA of €28.6 million, beating consensus by 2% on the top line and €6 million on EBITDA.
The company’s full-year revenue for 2024 was €797 million with an EBITDA of €22.6 million. This performance is particularly noteworthy as it surpassed the company’s own EBITDA guidance range of €15-35 million for the quarter.
Looking ahead, Evotec provided guidance for 2025 with expected revenue growth of 5-10% year-over-year (YoY), aiming for a range of €840-880 million and an EBITDA between €30-50 million. This forecast is more conservative compared to the current consensus, which may have initially concerned investors.
However, the market’s reaction suggests optimism, possibly buoyed by the company’s medium-term target for 2024-2028, which projects a revenue compound annual growth rate (CAGR) of 8-12% and a substantial EBITDA margin of more than 20% by 2028.
RBC commented on the company’s announcements: "We welcome the business model simplification, but need to see more detail on assumptions going into guidance (for example whether it includes milestones).
The EBITDA guide for 2025 in particular is lower than we thought it could be even in our most conservative of scenarios, and this could push the shares down today. However, if the market gains confidence that this is truly a bottomed-out guide, it could be an opportunity, particularly if the market’s risk appetite improves."
The company’s new strategy includes a shift to a lower-capital expenditure biologics model and further cost savings. Evotec’s net debt at the end of the period was €42.6 million, significantly lower than expected, which could also contribute to the positive investor sentiment.
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