KRAKÓW, Poland, Nov. 21, 2024 /PRNewswire/ -- Selvita S.A. (WSE: SLV), one of the leading preclinical contract research organizations in Europe, has published its financial results for Q3 2024 and provided an update on its backlog for 2024 and 2025.
Financial and Operational Highlights
- Selvita's Q3 2024 financial performance exceeded earlier estimates. Organic commercial revenues reached EUR 19.9 million, surpassing the forecast range of EUR 19.3 -19.7 million. EBITDA(1) stood at EUR 4.1 million, reflecting a margin of 20.3%, above the projected 17-20% range.
- The company has delivered sequential revenue growth in every quarter of 2024. Q3 results and Q4 backlog(2) indicate a projected 14% growth in H2 compared to H1 2024. Furthermore, Selvita's backlog for 2025 is 26% higher as compared to November last year.
- Selvita is recognizing improved market conditions in the global biotech sector, which combined with internal initiatives, has led to a favorable contracting structure. The drug discovery segment backlog for 2025, adjusted for normalization, grew by 53%(2,3), while contracts from Big Pharma increased by 36% year-over-year.
"As anticipated, our third quarter results, and year-end backlog indicate that the second half of 2024 will be considerably better for Selvita than the first one. Numerous internal measures, coupled with the global recovery in biotech funding, are beginning to translate into our contracting levels. The backlog's structure highlights recovery in drug discovery segment contracting and expanding scale of collaborations with Big Pharma customers." - comments Boguslaw Sieczkowski, Co-Founder and Chief Executive Officer of Selvita.
Strong Revenue and Profitability Growth in Q3 Signals Robust H2 Performance
As forecasted earlier this year, Selvita has achieved consistent revenue growth in every quarter of 2024. Organic commercial revenues in Q3 were 9% higher than in Q2, and 14% higher compared to Q1. Y/y growth in Q3 reached 9%. Backlog levels suggest a continuation of this positive trend in Q4, supporting a significant profitability boost in H2 driven by the operational leverage.
"The operational leverage we have implemented has resulted in higher profitability ratios alongside sales growth. However, we still possess significant potential, stemming from both the infrastructure reserve in Kraków and the resources acquired this year in Poznan and Wroclaw. Further increases in their utilization will have a substantial impact on the Group's margins over the coming periods." - adds Dariusz Kurdas, Chief Financial Officer.
In Q2 2024, Selvita began operations at its new sites in Poznan and Wroclaw, entering high-margin segments such as small-molecule drug development (CDMO) and biological drug discovery.
Financial Highlights
Total commercial revenues in Q3 2024 (including acquisitions), amounted to EUR 20.5 million, compared to EUR 18.5 million in Q2. EBITDA stood at EUR 3.6 million, with a 17.4%(1) margin, which as compared to Q2's EUR 1.8 million, and 9.7% margin, indicates a nearly two-fold increase. Group net profit amounted to EUR 0.8 million.
Revenues from the Drug Discovery segment amounted to EUR 15.1 million and accounted in Q1-Q3 2024 for 76% of Selvita's total revenues. This indicates growth dynamics of 3% compared to Q2 and 13% as compared to Q1. Compared to Q3 2023, these had increased by 2%.
Revenues from the Drug Development segment reached EUR 5.4 million in Q3, reflecting a 33% y/y increase, compared to a 10% y/y growth in H1.
Selvita reports a significant increase in revenues from Big Pharma(4) clients. Total revenues from these clients in Q1-Q3 2024 reached EUR 19.1 million, indicating growth of 37% y/y. In Q3 only, these revenues amounted to EUR 5.1 million showing a 93% y/y increase. The growing of Big Pharma in the revenue structure ensures a stable long-term revenue stream.
Outlook for 2025
Selvita's total backlog for 2024(2) points to at least 14% growth in H2 revenues compared to H1.
The total backlog for 2025(2) stands at EUR 24.7 million, marking a 26% y/y increase (54% increase when normalized(3)). Backlog from Big Pharma companies for the next year is 36% higher than in November 2023.
The backlog for the drug discovery segment for the next year(2) is 16% higher than in the same period of the previous year. Excluding orders from Galapagos, which is gradually reducing its orders in line with the terms of the 2020 agreement, the segment's backlog for the next year has increased by 53%. The strongest driver of this growth is chemistry services, where the backlog in comparable terms is 111% higher than a year ago.
Notes:
(1) The results do not include non-cash costs of the non-dilutive employee incentive program.
(2)Backlog as of 18/11/2024 and 13/11/2023.
(3) Excluding revenues from Galapagos.
(4) Big Pharma is defined as a global pharmaceutical company reporting revenues in excess of $5 billion in 2022.
All % calculated from PLN.
All values are calculated from PLN using an average exchange rate for the respective reporting period.
About Selvita (SLV)
Selvita is a leading provider of integrated drug discovery and development services, dedicated to advancing pharmaceutical and biopharmaceutical innovations through a holistic approach. Company delivers comprehensive solutions that span the entire drug development lifecycle, from early discovery to final product delivery.
The drug discovery department offers a comprehensive scope of services bridging the gap between early drug discovery and the clinical stage of drug development. The department specializes in a variety of therapeutic areas, including infectious diseases, inflammation, fibrosis, and oncology, offering both stand-alone and fully integrated services tailored to your needs.
The drug development division provides extensive drug development and regulatory support, including analytical support for both small and large molecules, microbiology, formulation, and clinical trial batch manufacturing, adheres to the highest quality standards under GMP and GLP regulations.
Selvita, established in 2007, operates globally with over 950 highly qualified employees, of which over 35% hold a PhD degree. With state-of-the-art facilities in Krakow, Poznan, Wroclaw, and Zagreb, and international offices in Cambridge, MA, the San Francisco Bay Area, and Cambridge, UK, Selvita offers a global network of expertise and resources.
Selvita is listed on the Warsaw Stock Exchange (WSE: SLV). For more information, please see www.selvita.com.
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