FY 2020 Results presentation - February 25, 2021
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FY 2020 Results presentation February 25, 2021
Agenda Highlights 4 Strategic priorities 7 Business update 13 Financials 21 Outlook 25 © EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 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. © EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 3
Highlights © EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 4
Significant increase in customer demand for
Health Ingredients and product expansion
• Total order intake exceeded CHF 10m for the first time (+71%
over 2019 with an order backlog of CHF 3.6m) with market gains
across segments. Strong momentum in Health Ingredients with
growing demand for resveratrol
• Organic sales growth of 18% over prior year – significantly
behind potential due to delays in manufacturing and sluggish
demand in Flavors and Fragrances
• Further progress in portfolio expansion. After nootkatone in
Health Protection, the launch of L-arabinose was a further
important step in growing our health offering
• Planned updates of CMO network completed, but scaling up
of manufacturing resveratrol at new CMOs delayed as the
pandemic continued
• Extraordinary costs of CHF 3.6m mainly related to scaling up
manufacturing driving reported EBITDA loss of CHF 16.7m
• On comparable basis, product-based EBITDA loss adjusted for
extraordinary costs1) reduced to CHF 14.1m from CHF 18.4m in
2019
1) EBITDA excluding revenues and expenses from R&D contracts and adjusting for extraordinary costs
© EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 related to delays in scaling up manufacturing at new CMOs and increase of DTRA accrual 5
FY 2020 Highlights
EBITDA
Product revenue 0 Cash
-5
CHF 6.5m, +18% -10 CHF 19.7m
-15 -12.3
Order backlog of CHF 3.6m -20 -16.7
-14.1 Available unused financing
-18.4
(at the end of December 2020) EB ITDA r eported EB ITDA p roduct-based lines of CHF 14m
FY 2020 FY 2019
Accelerated order momentum
positively influencing H1 2021
Product-based EBITDA improved excluding
extraordinary costs of CHF 3.6m
Product innovation
Multiple new product variants launched, such as L-Arabinose successfully
New products in the pipeline Veri-te Aqua™ and Evevalencene 94%™. Progress in launched end of 2020
developing end user applications with NootkaShieldTM
© EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 6
Strategic priorities © EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 7
On track to achieve strategic mid-term targets Sustainable innovation Productivity Profitable growth • Registered nootkatone with • Planned updates of CMO • Successfully leveraged EPA as first novel active network completed market segment-specific • Launched L-arabinose • Scaling up of manufacturing commercial approach in late 2020 of resveratrol delayed • Expanded product portfolio • Signed new agreement with • Initiatives implemented at and significantly grew IFF on vanillin CMOs to support future growth customer demand • Launched several important at positive product margins • Clear differentiation from product variants expanding • Strengthened organization by competition our ingredient systems for attracting and developing talent • Increased scalability across resveratrol and valencene the organization © EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 8
Move towards a commercial company
with a product-based revenue model
Revenue FY 2019 Revenue FY 2020
0.6
0.4
4.1
5.5
Growth 6.5
product
revenues
2
Product Revenue R&D revenue (excl. BARDA) BARDA revenue Product Revenue R&D revenue (excl. BARDA) BARDA revenue
47% product-based revenues (CHF 5.5m); 87% product-based (CHF 6.5m);
53% discretionary projects 13% discretionary projects
© EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 9Attractive addressable markets across products
Market
share
4
High
Nootkatone, F&F
3 (7/12-15%)
Medium Resveratrol, Health Ingredients
(60/+10%)
2
Low Valencene, F&F
(16/12-15%)
Vanillin, F&F
1 (48/6-7%)
Market yet L-Arabinose, F&F (F&B) / Health Ingredients
to be opened (ca. 250/>5%)
Nootkatone, Health Protection
(300-350/6-7%)
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Year of
launch
Note:
• Bubbles indicate current size of addressed market and the year generating first product revenues
• Numbers in brackets indicate addressed market size in CHFm and CAGR
© EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 10Progress in scaling-up manufacturing to support
future growth at positive product margins
“Initial” CMO “Commercial-scale” CMO
Recurring Recurring Commercial
Business segment Product Revenue model Development Scale up Scale up
manufacturing manufacturing sales
Flavors &
Valencene Product sales ü ü ü ü ü since 2019
Fragrances
Nootkatone Product sales ü ü ü ü ü since 2015
initial: 2014
Vanillin Product sales ü ü ü 2021 2021/2022
full-fledged: 2022
L-Arabinose Product sales ü on track Q2/Q3 2021 2021/2022 2022 from late 2020
Health Ingredients Resveratrol Product sales ü ü ü taking longer Q2 2021 since 2014
L-Arabinose Product sales see information under Flavors & Fragrances 2022
Health Protection Nootkatone Product sales ü ü Q4 2021 ü 2023 2021/2022
Other Stevia Royalties ü ü ü ü ü since 2018
© EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 11Evolva focused on overcoming manufacturing
and supply chain challenges in 2021
Challenges Measures
• COVID-19 ü Finding effective modus operandi with
• Integration and setting up of new CMOs during pandemic
manufacturing equipment to support ü Hired leader for Operations function with
significant growth a solid background in biotechnology and
• Processes to scale up made even more manufacturing
demanding during the pandemic ü Increase of resources in Operations function
to provide additional support in optimizing
and scaling up processes at CMOs
© EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 12Business update © EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 13
Our key business segments FLAVORS & FRAGRANCES HEALTH INGREDIENTS HEALTH PROTECTION We provide nature-based flavors and We provide nature-based dietary We offer nature-based products with fragrances’ ingredients such as supplements’ ingredients that can high efficacy that can protect health- nootkatone, valencene and vanillin. contribute to the health and wellbeing. conscious consumers globally. © EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 14
Flavors and Fragrances: Lower demand related
to COVID-19 impact
New product variant: • Lower sales growth related to the pandemic,
Valencene 94% is especially for applications in beverages and fine
Evolva’s highest purity fragrances. Situation expected to continue at least
natural valencene meeting for H1 2021
the Flavouring Regulation • Launched three new product variants – including
(EC) No. 1334/2008’s Valencene 94% – to meet customers’ needs and to
minimum purity level of expand addressable market
94%.
• Also launched innovative product, L-arabinose, at the
end of 2020 (with growing supply volumes from Q2/Q3
2021)
• Good progress in optimizing vanillin for expanded
commercialization in future years
© EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021Health Ingredients saw significant uptake in
customer demand
New product variant: • Growing demand for resveratrol, which has been
boosted by the pandemic due to different tangible
Veri-te Aqua™ is a
soluble resveratrol health benefits demonstrated in clinical studies
addressing market needs • With more than 13’000 published studies, resveratrol
especially in functional is one of the most studied molecules
beverages, for a
completely transparent • The results of studies, including RESHAW
and fully solubilized (Resveratrol Supporting Healthy Aging in Women)
resveratrol solution. significantly increased interest in resveratrol. This
includes global healthcare companies and FMCGs
• After launching Veri-te Aqua™ in 2020, launch of
L-arabinose, a natural sugar blocker
© EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021L-Arabinose, a natural sugar blocker and
reducing sugar
• L-Arabinose is a natural sugar blocker for application in food and • Made by fermentation
beverages. Studies show that L-arabinose as a sugar blocker can • Fully renewable and
support healthy blood sugar levels and weight management. sustainable
Further, it has potential application as a prebiotic. • High-purity level (>99%)
• No hydrochloric acid
• L-Arabinose is a reducing sugar frequently applied in the used in the
production of maillard reaction flavors, which are a key building manufacturing process
block for savoury flavors such as chicken and beef. L-Arabinose • FEMA GRAS approved
for use in food and
may also contribute to bakery products by improving crust and beverages
crumb structure and preventing premature staleness.
© EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 17L-Arabinose mode of action as a sugar blocker:
Inhibition of sucrase¹
Studies demonstrated that L-arabinose selectively inhibits intestinal sucrase activity –
Resulting in lower levels of glucose in the blood after sucrose ingestion
Lower levels of
Sucrose Fructose Glucose Glucose glucose in the
Sucrase blood
Usual breakdown of sucrose (common sugar) into fructose and glucose –
Resulting in glucose uptake into the blood
Absorption Elevated levels of
Sucrose Fructose Glucose Glucose glucose in the
Sucrase blood
1)
Sucrase is the intestinal enzyme that breaks sucrose into fructose and glucose
© EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 18Health Protection: US EPA registration of
nootkatone as a novel active ingredient
Nootkatone is an ingredient • US EPA registration of nootkatone in August pivotal step
found in minute quantities in the on this product’s regulatory path
bark of the Alaska yellow cedar
and in the skin of grapefruit. • Ten-year exclusivity in an estimated USD 350m US market
It has been tested against a
variety of biting pests, including • Investment in the development and registration
the ticks that are responsible for of own formulations
spreading Lyme disease and
mosquitoes. • To register consumer products, submission of registration
package (efficacy, safety and product characterization)
• First sales expected in 2022 as formulation work being
delayed due to the pandemic
• Expansion beyond US to countries based
on US regulatory approval
© EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021Other products: Royalty income from
EVERSWEET™ expected to grow over time
EVERSWEET™ is a calorie- • Evolva receives royalty payments on all EVERSWEET™ sales
free stevia sweetener. Not only
does it deliver a high-quality • The first commercial-scale production of EVERSWEET™
sweetness profile, it’s also has started on November 14, 2019 at Cargill's fermentation
sustainable.
production facility in Blair, Nebraska, USA
• Registrations of EVERSWEET™ in US and Mexico
(more markets expected to follow soon)
• Positive momentum with customers
• Based on this, Evolva anticipates its royalty income to
grow over time
© EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021Financials © EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 21
Key Figures
1) Including extraordinary
FY 2020 FY 2020 FY 2019 FY 2019 costs related to delays in
in CHF million Reported Product-based Reported Product-based manufacturing of CHF
2.9m
Order backlog 3.6 3.6 0.4 0.4 2)
Increase of DTRA accrual
by CHF 0.7m
Product revenue 6.5 6.5 5.5 5.5 3) Capitalized development
expenses in 2019 in an
R&D revenue 1.0 - 6.1 - amount of CHF 2.7m have
been reclassified to cash
Total revenue 7.5 6.5 11.6 5.5 flow from investing
activities
Gross profit -1.9 -2.61) 5.4 -0.7
Gross profit excl. e.o. costs1) 0.3 -0.7
Total operating expenses -14.8 -14.82) -17.7 -17.7
EBITDA -16.7 -17.7 -12.3 -18.4
EBITDA excl. e.o. costs1) -14.1 -18.4
Operating cash flow -23.4 -11.43)
Cash (end of period) 19.7 39.9
© EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 22Product-based EBITDA excluding extraordinary
costs significantly improved
Product-based EBITDA
in CHF million
excl. extraordinary costs
-12,3
6,1 -14,1 2,9
4,3
0,7 1,0 -16,7
-18,4
FY 2019 FY 2019 FY 2019 Organizational FY 2020 Costs Increase of FY 2020 FY 2020
Reported EBITDA Product- efficiencies Product- related to DTRA accrual EBITDA Reported
EBITDA contribution based based delays in contribution EBITDA
from R&D EBITDA EBITDA manufacturing from R&D
© EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 23Operating free cash flow in line with guidance
FY 2020 FY 2019
in CHF million Reported Reported
Cash position at beginning 39.9 60.4
Cash flow from operating activities -23.4 -11.51)
Cash flow from investing activities -5.6 -8.12)
Cash flow from financing activities 8.83) -0.9
Cash position end of period 19.7 39.9
1) Capitalized development expenses in 2019 in an amount of 2.7m CHF have been reclassified to cash flow from investing activities
2)
Cash flow from investing activities in 2019 including contractual obligations to EVERSWEET™ of 5.2m CHF
3) Cash flow from financing activities in 2020 mainly reflects 3 tranches of the agreement for the issuance and subscription of convertible notes
with Nice & Green SA
© EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 24Outlook © EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 25
2021 Outlook As the pandemic continues, the guidance assumes there will not be a return to normal for most of the year. Evolva expects ongoing growing demand for Health Ingredients, but sluggish demand in Flavors and Fragrances. Supply volumes are expected to gradually increase in the course of 2021 as a result of the emphasis on overcoming manufacturing challenges – especially for resveratrol –, with a larger contribution to sales and profit in the second half of the year. The extraordinary costs related to scaling up manufacturing of resveratrol and L- arabinose are in total estimated CHF 6.1m in 2021. Nevertheless, EBITDA is expected to somewhat improve over prior year levels. © EVOLVA 2021 FY 2020 RESULTS PRESENTATION 25 February 2021 26
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