Adhoc: Evolva Holding SA: Evolva delivers accelerated revenue growth of 57% in 2022 and substantially improved profitability profile

Evolva Holding SA / Key word(s): Annual Results
Evolva delivers accelerated revenue growth of 57% in 2022 and substantially improved profitability profile

09-March-2023 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 LR
The issuer is solely responsible for the content of this announcement.

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Ad Hoc Announcement (PDF)

PRESS RELEASE | AD HOC ANNOUNCEMENT PURSUANT TO ART. 53 LR

Reinach, 9 March 2023 - Evolva (SIX: EVE), a pioneer in the field of natural molecules and industrial biotech, delivered a strong performance during 2022, fully meeting its targets. Total revenue increased by 57% (prior year +40%) to CHF 15.5 million, while product-related revenues even grew by 62% to CHF 14.8 million. Gross contribution margin turned positive and reached 16% for the full year, well in the targeted double-digit range. After 10.9% in 1H 2022, gross contribution margin increased to 21.6% in 2H. As a result of the revenue growth and increased gross contribution margin, EBITDA and Operating Cash Flow also improved significantly. With the organizational transformation achieved in 2022, Evolva has laid out the foundation for continued revenue growth and further increased profitability.

Business and corporate highlights

• Initial focus of the leadership team under new CEO Christian Wichert was on boosting the commercial performance in Flavor & Fragrances. Revenues more than tripled in 2022, giving a clear testimony of the success of these initiatives
• Key driver was the successful upscaling of Vanilin and subsequent delivery of commercial batches
• Nootkatone and Valencene also showed continuous profitable growth in 2022 and Evolva successfully introduced its new Natural Nootkatone with key European customers, further expanding the addressable market
• Health Ingredients has been managed for profitability in 2022 to ensure a positive gross contribution margin
• Focus now shifts to boosting the revenues of Resveratrol by targeting attractive new market segments - incl. the prepared launch of Resveratrol for Personal Care
• In Health Protection, NootkaSHIELDTM is yielding initial sales from test markets in South East Asia. In addition, Evolva has received prominent support from the US CDC (Centers of Disease Control) for the development of effective nature based products for the US market for tick bite repellency and prevention
• Strategic partnership with Grace Breeding to enter the agricultural market for bio-fertilizers based on Evolva's existing precision-fermentation platform to offer nature-based alternatives with favorable ecological footprint (reduced water and soil contamination as well as air pollution)
• Significantly strengthened CMO network and realized process technology improvments to create cost efficiencies
• Strengthened commercial teams in the USA and Europe

Financial highlights

• Total revenue increased from CHF 9.9 million to CHF 15.5 million (+57%) in 2022
• Product-related revenue grew by 62% to CHF 14.8 million, marking an acceleration from the 46% CAGR reached from 2017 to 2021
• Gross contribution margin turned positive, reaching 16% for the full year (10.9% in 1H with a sequential increase to 21.6% in 2H)
• Flavors & Fragrances experienced buoyant growth of 265%, mainly driven by Vanillin, but also thanks to good sales with Valencene and Nootkatone. Well postioned to expand the addressable market with new product launch of Natural Nootkatone for the EU in 2023 and beyond
• Health Ingredients efforts to focus on value and profitability resulted in lower sales
  (-32% in 2022). Expected to turn to profitable growth in 2023, supported by new and attractive segments (e.g. personal care)
• In Health Protection, NootkaSHIELDTM received prominent support in the USA by a grant from the US CDC (Centers of Disease Control) of USD 540,000
• Company remains positive on potential of EVERSWEETTM as sugar replacement although royalty revenues were below expectations in 2022
• Reduction of operating expenses by CHF 2.5 million as a result of cost efficiency initiatives
• Adjusted EBITDA improved by CHF 9.3 million to CHF -13.3 million (vs. CHF -22.6 million in 2021) driven by revenue growth and increased gross contribution margin
• Extraordinary non-cash impairment charge of CHF 17 million booked with the half year numbers
• Cash flow from operating activities improved by CHF 10.9 million to CHF -18.9 million
• Cash position of CHF 5.1 million at year-end and CHF 16 million of open financing lines

Outlook:

• Positive business momentum expected to continue
• Targeting revenue of more than CHF 20 million in 2023 and a gross contribution margin of above 20% in 2023
• Further improvement of EBITDA and Operating Cash in 2023
• Improved EBITDA and Operating Cash Flow
• Mid-term targets confirmed (CHF 45-50 million revenues as well as EBITDA and cash-breakeven in 2025)

Commenting on the full year 2022, Evolva CEO Christian Wichert said: "We demonstrated a strong performance during 2022 while at the same time transforming the organization for commercial success and laying the foundation for profitable growth. Our conservative mid-term plan is largely based on the existing product portfolio and aims at surpassing CHF 30 million in sales in 2024 and to reach a revenue level of between CHF 45-50 million as well as EBITDA and cash breakeven in 2025."

Christian Wichert further added: "We aim to become an industrial biotech leader, providing solutions around natural ingredients addressing the global megatrends of health, wellness and sustainability. Based on our proprietary precision-fermentation platform, we are uniquely positioned to resolve supply bottlenecks of nature. Thanks to our knowhow in process development and our ability of scaling up processes from the lab to industrial production, Evolva is set to benefit from global market trends and ensuing opportunities."

Financial key figures1)

CHF million	FY 2022 adjusted	FY 2021 adjusted	FY 2022 reported	FY 2021 reported
Revenue from contracts with customers	15.5	9.9	15.5	9.9
Product-related revenues	14.8	9.1	14.8	9.1
Direct production costs	(12.5)	(14.6)	(12.5)	(15.1)
Gross contribution	2.4	(5.4)	2.4	(5.9)
in % of product-related revenue	16.0%	-59.5%	16.0%	-64.7%
Research & development revenue	0.7	0.7	0.7	0.7
Cost of goods sold (excl. direct production costs)	(4.6)	(4.2)	(9.1)	(4.2)
Gross profit	(1.5)	(8.9)	(6.0)	(9.3)
Research & development expenses	(9.4)	(12.8)	(23.6)	(22.4)
Commercial, general & administrative expenses	(5.7)	(9.5)	(10.8)	(10.2)
Operating loss (EBIT)	(21.4)	(31.2)	(40.4)	(42.0)
Depreciation and amortization	(8.1)	(8.7)	(8.1)	(8.7)
Impairment of intangible assets	0.0	0.0	(17.0)	(9.6)
EBITDA	(13.3)	(22.6)	(15.3)	(23.6)
Cash position (end of period)	5.1	11.0	5.1	11.0
Extraordinary items	(19.0)	(10.6)
- impairment	(17.0)	(9.6)
- inventory write-off	(1.6)	0.0
- others	(0.4)	(1.0)

1) This table includes references to operational indicators and alternative performance measures (AMP) that are not defined or specified by IFRS. These APM should be regarded as complementary information to and as substitutes to the Group's consolidated financial results based on IFRS.

Documentation

Results' documentation will be available on the company website at 07.00 CET under this link: https://evolva.com/financial-data/full-year-results/

Webcast and Conference Call information:

Evolva will host a conference call with media and the financial community today, 10 a.m. CET.

• Registration link for conference call:

https://webcast.meetyoo.de/reg/jq3C8QPMpqm7

Following registration, particpants will receive a confirmation e-mail with individual dial-in information.

• Webcast link for conference call particpants

https://www.webcast-eqs.com/evolva-2022-fy/no-audio

• Webcast link to the livestream:

https://www.webcast-eqs.com/evolva-2022-fy

To ask questions during the Q+A session you must dail in to the moderated telephone conference.

A replay will be available after the call on the Evolva website.

Important dates

18 April 2023 Annual General Meeting

24 August 2023 Half-year 2023 results

Contact

Doris Rudischhauser

Head of Investor Relations and Corporate Communications

[phone]

[e-mail]

About Evolva

Evolva is a Swiss biotech company focused on the research, development and commercialization of ingredients based on nature. We have leading businesses in Flavors and Fragrances, Health Ingredients and Health Protection. Evolva's employees, half of which are women, are dedicated to make the best products that can contribute to health, wellness and sustainability. Find out more at evolva.com and connect with us on LinkedIn.

For Evolva multimedia content, please visit: evolva.com/multimedia-library.

Disclaimer
This announcement is not an offer of securities into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered, pledged, sold, delivered or otherwise transferred, directly or indirectly, in the United States, except pursuant to an exemption from, or transaction not subject to, the registration requirements of the Securities Act. No public offering of securities is being made in the United States. Further, the securities referred to herein have not been and will not be registered under the applicable securities laws of Canada, Australia or Japan or under the applicable securities laws of any other jurisdiction where to do so might constitute a violation of such laws.
This press release contains specific forward-looking statements, 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 the company and those explicitly or implicitly presumed in these statements. Against the background of these uncertainties readers should not place undue reliance on forward-looking statements. The company assumes no responsibility to update forward-looking statements or to adapt them to future events or developments.

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End of Inside Information

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Language:	English
Company:	Evolva Holding SA
	Duggingerstrasse 23
	4153 Reinach
	Switzerland
Phone:	[phone]
Internet:	www.evolva.com
ISIN:	CH0021218067
Valor:	2121806
Listed:	SIX Swiss Exchange
EQS News ID:	1578175

End of Announcement	EQS News Service

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1578175 09-March-2023 CET/CEST