Evotec SE — Interim / Quarterly Report 2020

Nov 12, 2020

INTERIM STATEMENT 9M 2020

HIGHLIGHTS

• MULTIPLE NEW & EXTENDED DRUG DISCOVERY AND DEVELOPMENT ALLIANCES; VERY GOOD PROGRESS IN CO-OWNED PIPELINE
• INCREASING MOMENTUM DESPITE DIFFICULT BUSINESS ENVIRONMENT
• GUIDANCE FOR FULL-YEAR 2020 CONFIRMED; CAPACITY EXPANSION ON TRACK FOR SWIFT START TO 2021

CONTINUED STRONG PERFORMANCE IN BASE BUSINESS; ROBUST REVENUE GROWTH AND IMPROVING EBITDA IN Q3

• Group revenues: 12% increase to € 360.4 m (9M 2019: € 321.4 m)
• Significant like-for-like base revenue growth (adjusted for portfolio and FX) up 19%
• Robust revenue growth in both segments: Total EVT Execute revenues up 14% to € 352.7 m (9M 2019: € 308.1 m); EVT Innovate revenues up 21% to € 74.7 m (9M 2019: € 61.8 m)
• Adjusted Group EBITDA of € 76.9 m (9M 2019: € 93.2 m) with good momentum in Q3
• Expanded investment in R&D with expenses of € 46.1 m (9M 2019: € 41.3 m); significant increase in unpartnered R&D of 30% to € 33.4 m (9M 2019: € 25.7 m)
• No material impact of COVID-19 pandemic on overall financial and strategic development so far; slight delays in the conclusion of contracts and milestone achievements

EVT EXECUTE & EVT INNOVATE – MULTIMODALITY AND INTEGRATED PLATFORM SET FOR GROWTH IN DATA DRIVEN PRECISION MEDICINE

• Multiple new and extended drug discovery and development agreements
• Just Evotec Biologics on track for success
• Strategic alliance with Novo Nordisk to develop novel therapies for kidney diseases
• Access to QUOD biobank to expand patient database into liver disease
• Further milestone achieved in neurodegeneration alliance with Bristol Myers Squibb
• Expanded collaboration with Centogene into Gaucher disease
• Good progress in collaboration asset with Bayer two clinical Phase II studies with P2X3 antagonist BAY1817080/ Eliapixant were initiated by Bayer in September/October (for one study patient recruitment started after period-end)
• Important COVID-19 pandemic-related alliances with US DOD (Department of Defence) and grant from Bill & Melinda Gates Foundation (after period-end)

CORPORATE

• Acquisition of the assets (mainly land and buildings) and takeover of staff from "Biopark by Sanofi SAS", now "Campus Curie Toulouse", making Evotec the full owner of the Toulouse (France) site
• Continued expansion of infrastructure to support future growth in Abingdon (UK) and Göttingen (GER)
• Mubadala Investment Company becomes strategic shareholder and Novo Holdings A/S reinforces its commitment, together investing € 250 m through a capital increase (after period-end)
• Renewal of contract with CEO Dr Werner Lanthaler for five years until 05 March 2026 (after period-end)

GUIDANCE FOR FULL-YEAR 2020 CONFIRMED

• Unchanged business outlook compared to half-year report 2020, taking into account currently visible COVID-19 effects
• Group revenues from contracts with customers expected to range from € 440 480 m (2019: € 446.4 m)
• "Unpartnered Group R&D" expenses of approx. € 45 m (2019: € 37.5 m)
• Adjusted Group EBITDA expected to be in the range of € 100 120 m (2019: € 123.1 m)

FINANCIAL HIGHLIGHTS

The following table provides an overview of the financial performance in the first nine months of 2020 compared to the same period in 2019. More detailed information can be found on page 5 of this interim statement.

Key figures of consolidated income statement & segment information

Evotec SE & subsidiaries – First nine months of 2020

In T€	EVT Execute	EVT Innovate	Intersegment Eliminations	Transition4)	Evotec Group 9M 2020	Evotec Group 9M 2019
External revenues1)	269,860	74,692	–	15,862	360,414	321,362
Intersegment revenues	82,802	–	(82,802)	–	–	–
Costs of revenues	(262,154)	(68,668)	75,459	(15,862)	(271.225)	(222,553)
Gross profit	90,508	6,024	(7,343)	–	89,189	98,809
Gross margin in %	25.7	8.1	–	–	24.7	30.7
R&D expenses2)	(3,589)	(49,831)	7,343	–	(46,077)	(41,285)
SG&A expenses	(47,402)	(10,730)	–	–	(58,132)	(46,230)
Impairments of intangible assets and goodwill	–	–	–	–	–	(11,919)
Other operating income (expenses), net	13,661	36,645	–	–	50,306	47,050
Operating result	53,178	(17,892)	–	–	35,286	46,425
Adjusted EBITDA3)	92,303	(15,361)	–	–	76,942	93,216

1) Revenues in the segments consist of revenues from contracts with customers without revenues from recharges as those are not of importance for management when assessing the economic situation of the segments.

2) Of which unpartnered R&D expenses of € 33.4 m in 9M 2020 (9M 2019: € 25.7 m)

4) Not allocated to segments: Revenues from recharges according to IFRS 15

³⁾ Before contingent considerations, income from bargain purchase and excluding impairments on goodwill, other intangible and tangible assets as well as the total non-operating result; adjusted for negative exchange rate effects of € 0.5 m, EBITDA amounts to € 77.4 m

So far, no material negative impact of COVID-19 pandemic on Evotec's operational business

During the first nine months of 2020 all sites at Evotec were able to continue operations. New health and safety rules have been introduced quickly and working processes adjusted to protect Evotec's employees and secure operations. Despite this difficult environment, which mainly affected Evotec between March and June, the financial impact has been manageable so far.

OPERATIONAL HIGHLIGHTS

EVT EXECUTE

Multiple new and extended drug discovery and development agreements

The strong operational performance in the first half of 2020 continued successfully into the third quarter 2020 in the EVT Execute segment. Evotec entered multiple new integrated drug discovery alliances. For example, Evotec will apply its comprehensive suite of integrated services, disease knowledge and technologies from lead generation up to IND to discover and develop new therapeutics in an undisclosed therapeutic area for a mid-sized biopharmaceutical company, and is eligible to receive research funding and downstream milestone payments plus royalties. Furthermore, strong progress was achieved in Evotec's existing alliances, e.g. Evotec expanded its services for Austrianni to discover novel antibody therapeutics to combat tuberculosis (TB). Evotec will be leveraging its extensive biosafety level 3 ("BSL-3") capabilities as well as the Company's expertise in TB drug development to accelerate pre-clinical candidate selection for Austrianni's pipeline.

Just – Evotec Biologics continues to perform

The U.S. department of defense awarded Just – Evotec Biologics a contract valued at up to US\$ 18.2 m to develop and manufacture monoclonal antibodies against COVID-19 in August. After period-end, Just – Evotec Biologics received an undisclosed grant from the Bill & Melinda Gates Foundation (Seattle, WA) as part of the COVID-19 Therapeutics Accelerator to enable the

development and production of monoclonal antibody ("mAb") candidates for the prevention of severe COVID-19 in vulnerable populations in low and middle income countries.

EVT INNOVATE

Co-owned pipeline gaining momentum

Bayer initiated a Phase IIb study with the P2X3 antagonist Eliapixant (BAY1817080) in chronic cough in October and a Phase IIa trial in overactive bladder in September. Further indications are currently being considered. Both studies result from the successful former six-year multi-target alliance of Bayer and Evotec.

Milestone achievements

At the end of September, Evotec reached a further US\$ 6.0 m milestone in its neurodegeneration partnership with Bristol Myers Squibb following the decision to expand the portfolio by another drug discovery project. In addition, a number of smaller milestones adding up to a total amount of € 3.3 m were achieved within EVT Execute and EVT Innovate collaborations and contributed to increasing earnings momentum in Q3 2020.

Molecular CKD patient database triggers a new strategic alliance with Novo Nordisk

Evotec and Novo Nordisk formed a strategic alliance to develop novel therapies for kidney diseases. The collaboration intends to pursue the most relevant human disease biology in a therapeutic modalityagnostic approach to develop first-in-class therapeutics for patients suffering from Chronic Kidney Disease (CKD). Evotec received an undisclosed upfront payment and is eligible for research funding, milestone payments exceeding € 150 m per product as well as tiered royalties on net sales.

Furthermore, to strengthen Evotec's patient-to-patient strategy, the company expanded its proprietary patient database into liver disease with access to the QUOD (Quality in Organ Donation) biobank. Evotec will first

investigate samples from 1,000 donors from the QUOD biobank using a comprehensive multi-omics analysis. This data will complement Evotec's existing patient database, generating a greater understanding of disease mechanisms across indications, i.e. cardio-vascular, kidney and liver diseases.

CORPORATE

New long-term strategic investor Mubadala Investment Company and reinforcement of Novo Holdings A/S commitment

After period-end, on 12 October 2020, Evotec successfully placed a private placement capital increase. A total of 11,478,315 new shares were issued to Mubadala Investment Company and Novo Holdings A/S, increasing Evotec's cash reserves by € 250 m in total. Mubadala Investment Company invested € 200 m and now holds a share of approx. 5.6% in Evotec. Evotec's existing shareholder Novo Holdings A/S invested € 50 m and increased its share in the company to approx. 11.0%. Due to the capital increase as well as exercise of stock options, Evotec's share capital increased to € 163,494,444, or 163,494,444 ordinary bearer shares as of 20 October 2020.

Contract extension of CEO Dr Werner Lanthaler for further five years

Also after period-end, Evotec extended the contract with its CEO Dr Werner Lanthaler, leading the company since 2009. With effect from 05 March 2021 his contract will be renewed for another five years until 05 March 2026.

REPORT ON THE FINANCIAL SITUATION AND RESULTS

Just - Evotec Biologics (former Just.Bio) was acquired effective 02 July 2019. Effective 01 April 2020, Evotec GT started its operations. Furthermore, the acquisition of the assets (mainly land and buildings) and staff from Biopark by Sanofi in Toulouse was effective on 01 July 2020. All three units were fully consolidated in the Group numbers from the respective dates onwards.

1. Results of operations

Group revenues for the first nine months grew by 12% to € 360.4 m compared with the same period of the previous year (9M 2019: € 321.4 m), despite COVID-19, also resulting in a still lower level of upfront, licenses and milestone revenues and the absence of the Sanofi payments in Q2 and Q3, respectively. This increase was due to a 14% growth in the base business across all business lines (€ 342.1 m vs. 9M 2019: € 299.1 m). Milestone, upfront and license payments of € 18.3 m were still trailing pervious year's levels (€ 22.3 m), but have improved visibly in Q3 (€ 10.5 m, including the milestone from Bristol Myers Squibb of US\$ 6.0 m received in September as well as several smaller milestone achievements from existing collaborations). It has to be noted that revenues from milestones can vary significantly from quarter to quarter. Portfolio effects (Just – Evotec Biologics and loss of payments for Toulouse cost coverage) were by and large in balance, amounting to € (-1.3) m). Exchange rate effects had a negative impact of € 0.5 m on Group revenues. Like-for-like base revenue growth (adjusted for portfolio and FX) reached 19%.

Costs of revenue for the first nine months of 2020 amounted to € 271.2 m (9M 2019: € 222.6 m) yielding a gross margin of 24.7% after nine months (9M 2019: 30.7%). The gross margin of Q3 2020 amounted to 27.9% (9M 2019: 30.6%).

As planned, Evotec followed its strategy to improve its investments in Research and Development. Accordingly, total R&D expenses increased by nearly 12% to € 46.1 m (9M 2019: € 41.3 m). Thereof, unpartnered R&D

expenses increased to € 33.4 m (9M 2019: € 25.7 m), mainly due to intensified research investments into platform projects such as PanOmics and the new cell therapy platform. Partnered R&D expenses decreased to € 12.7 m (9M 2019: € 15.6 m).

SG&A expenses for the first nine months of 2020 increased by 26% to € 58.1 m (9M 2019: € 46.2 m) and were mainly impacted by higher personnel expenses due to an overall staff increase. Furthermore, for the first time Just – Evotec Biologic, Evotec GT and Campus Curie Toulouse contributed SG&A costs as they joined Evotec Group only from July 2019 (Just – Evotec Biologics), April 2020 (Evotec GT) and July 2020 (Campus Curie), respectively.

Other net operating income and expenses in the first nine months of 2020 amounted to € 50.3 m (9M 2019: € 47.1 m). Main elements of other operating income were related to Sanofi recharges for ID Lyon and R&D tax credits from UK and France, while large parts of Italien tax credits no longer applied due to a change in regulations.

As a result, the reported operating result decreased to € 35.3 m (9M 2019: € 46.4 m).

The non-operating result decreased significantly to € (15.9) m year-on-year (9M 2019: € (2.7) m). This was partly due to the pro rata loss incurred by associates accounted for using the equity method (€ 8.3 m; 9M 2019: € 3.6 m), interest result (€ (4.7) m) as well as a material swing from foreign exchange gains in 9M 2019 of € 4.9 m to € (3.0) m in 9M 2020.

Adjusted Group EBITDA for the first nine months of 2020 of € 76.9 m (9M 2019: € 93.2 m) developed according to plan and clearly reflects the strength and performance of Evotec's base business. The reported decrease in adjusted Group EBITDA by 17% was mainly caused by lower upfront, milestone and licence contributions compared to the same period last year, due to slippage of milestones in the context of COVID-19, higher unpartnered R&D, a double digit growth rate of new talent hirings in preparation for future growth,

lower R&D tax credits and the expiry of the Toulouserelated payments from Sanofi since Q2 2020.

Negative exchange rate movements had a negative effect of approx. € 0.5 m on the adjusted EBITDA.

The net result in the first nine months of 2020 amounted to € 5.8 m (9M 2019: € 29.7 m).

2. Operating segments EVT Execute and EVT Innovate

Both segments showed significant revenue growth within the first nine months 2020. In the EVT Execute segment revenues (incl. intersegment revenues) increased by 14% to € 352.7 m (9M 2019: € 308.1 m), mainly due to a strong base business. Just – Evotec Biologics contributed € 26.2 m, of which € 16.3 m represents a portfolio effect. This effect is to a large degree balanced by the run-off of the Sanofi contribution (€ 15 m). Evotec GT contributed € 3.6 m to revenues, starting from April 2020 onwards. Intersegment revenues amounted to € 82.8 m (9M 2019: € 59.1 m), in order to facilitate the strong momentum of EVT Innovate. The EVT Execute segment recorded costs of revenue of € 262.2 m in the first nine months of 2020 (9M 2019: € 220.9 m), resulting in a gross margin of 25.7% (9M 2019: 28.3%). Gross margin has improved to 27.6% in Q3 2020. R&D expenses increased to € 3.6 m (9M 2019: € 0.8 m), SG&A expenses were at € 47.4 m (9M 2019: € 35.9 m). The adjusted EBITDA of the EVT Execute segment reached € 92.3 m, and thus was slightly below the previous year level (9M 2019: € 97.4 m). Adjusting the comparable basis for the loss of the Toulouse payment, growth of adjusted EBITDA would have reached 11%.

In the first nine months 2020, the EVT Innovate segment generated revenues amounting to € 74.7 m (9M 2019: € 61.8 m), consisting entirely of third-party revenues. This increase of 21% in revenues was mainly driven by higher ID Lyon related project revenues, additional revenues in kidney disease (Vifor Partnership - Joint Venture NephThera) and from the Indivumed cooperation as well as the achievement of a milestone in Neurodegeneration in September of US\$ 6.0 m. The

gross margin decreased to 8.1% compared to 29.7% in the prior-year period, primarily due to lower milestone revenues in 9M 2020 and hiring of new talent in order to facilitate further growth in 2021. Total R&D expenses for the EVT Innovate segment of € 49.8 m remained stable in the first nine months of 2020 (9M 2019: € 47.1 m). SG&A expenses of € 10.7 m also stayed at nearly the same level as in the same period in 2019 (9M 2019: € 10.3 m). The EVT Innovate segment reported an adjusted EBITDA of € (15.4) m (9M 2019: € (4.2) m) as a result of lower income from milestone and upfront revenues and increased unpartnered R&D activities.

3. Financing and financial position

Cash flow from operating activities for the first nine months of 2020 amounted to € 20.8 m (9M 2019: € 1.2 m) and resulted – apart from the strong operating result - mainly from receiving prepayments of € 6.5 m from the Bayer PCOS collaboration and the MSD J.POD® upfront payment of US\$ 15.0 m. In addition, further larger payments (e.g. from BMS, Exscientia and Millenium Pharmaceuticals) as well as the upfront payment from Novo Nordisk were received, determining the positive cash inflow from operations.

Cash flow from investing activities for the first nine months of 2020 amounted to € (82.9) m compared to € (58.6) m in the same period of the previous year. Capital expenditure on property plant and equipment increased to € 55.3 m (9M 2019: € 20.4 m) due to about € 27.0 m in overall investments in the new J.POD® facility in Redmond. Equity investments in associated companies and other long-term investments amounted to € 20.0 m.

Cash flow from financing activities for the first nine months of 2020 amounted to € 5.3 m (9M 2019: € 197.2 m). This large difference results from the issuance of the promissory note of € 249.1 m in 2019.

Liquidity, which includes cash and cash equivalents (€ 215.9 m) and investments (€ 39.4 m) amounted to € 255.3 m at the end of September 2020. The cash outflow versus 31 December 2019 (€ 320.0 m) resulted mainly from investing activities in capex, including the expansion of the new J.POD®, equity investments and acquisition of the assets (mainly land and buildings) and staff of the Biopark by Sanofi, now Campus Curie in Toulouse.

However, a solid operating cash flow and a reduction of lease obligations in Q3 resulted in a reduction of net debt from € 214.2 m at the end of June 2020 to € 199.3 m by 30 September 2020 (incl. IFRS 16).

4. Assets, liabilities and stockholders' equity

Assets

In the first nine months of 2020, total assets decreased marginally to € 1,169.7 m (31 December 2019: € 1,180.9 m).

Trade accounts receivable and accounts receivable from associated companies and other long-term investments increased to € 98.5 m versus 31 December 2019 (€ 83.6 m) due to a growing base business and timing of payments of quarterly invoices and remained stable versus 30 June 2020 (€ 98.3 m).

The decrease in current tax receivables to € 15.0 m (31 December 2019: € 22.8 m) related mainly to the reclassification of tax refunds from tax development programmes in the context of qualifying research and development expenses within France to non-current tax receivables.

Investments accounted for using the equity method and other long-term investments amounted to € 52.4 m (31 December 2019: € 41.2 m) and increased due to new cash investments in different companies, partly offset by losses from equity investments.

Property, plant and equipment increased to € 270.3 m (31 December 2019: € 239.2 m), mainly due to the investments into the new J.POD® facility and the right of use asset for the newly rented building at the Evotec site in Goettingen.

Goodwill and intangibles decreased to € 353.3 m (31 December 2019: € 372.9 m) mainly due to regular amortisation and adverse FX-effects.

Liabilities

Trade accounts payable increased to € 44.1 m (31 December 2019: € 31.3 m), mainly due to specific investments in the new J.POD® facility.

Current and non-current loans increased to € 346.7 m (31 December 2019: € 331.2 m) due to a drawn tranche of the EIB R&D loan in the amount of € 18.3 m and an increase in the KfW loan by € 3.2 m in line with the progress made in three R&D projects.

Current and non-current lease obligations decreased by € 23.9 m to € 108.0 m due to the acquisition of assets (mainly land and buildings) of Biopark by Sanofi, now Campus Curie Toulouse, which ended the lease obligation for the Toulouse site.

Stockholders' equity

As of 30 September 2020, Evotec's capital structure remained largely unchanged compared with the end of 2019. Total stockholders' equity decreased slightly to € 472.8 m (31 December 2019: € 477.0 m). Due to the exercise of stock options and Share Performance Awards, a total 151,897,493 shares were issued and outstanding with a nominal value of € 1.00 per share as of 30 September 2020.

Evotec's equity ratio as of 30 September 2020 remained unchanged at 40.4% (31 December 2019: 40.4%).

5. Human Resources

Employees

At the end of September 2020, the global number of employees of Evotec Group amounted to 3,444 people, an increase of 14% compared to year-end 2019 (31 December 2019: 3,030 employees).

Despite the challenges arising from COVID-19 pandemic Evotec was able to continue to recruit and integrate toptalent for its operational business, which is of major importance for the long-term growth of the Company.

FINANCIAL OUTLOOK

Guidance for full-year 2020 confirmed; capacity expansion on track for a swift start to 2021

The business environment worldwide continues to be affected by the COVID-19 pandemic. Evotec's business also has felt the effects of the crisis, but so far not as materially as other sectors. Within the reporting period no significant negative impact on Evotec's business was recorded in connection with the COVID-19 pandemic.

However, further potential effects of the crisis in the coming months are difficult to predict due to risks and uncertainties which are beyond Evotec's control. At present, the management of Evotec confirms the financial guidance published in the half-year report on 12 August 2020.

	Guidance 2020	31 December 2019
Group revenues from contracts with customers	€ 440 - 480 m2)	€ 446.4 m
Unpartnered R&D expenses	Approx. € 45 m	€ 37.5 m
Adjusted Group EBITDA1)	€ 100 - 120 m3)	€ 123.1 m

1) EBITDA is defined as earnings before interest, taxes, depreciation, and amortisation of intangibles. Adjusted EBITDA excludes contingent considerations, income from bargain purchase and impairments on goodwill, other intangible and tangible assets as well as the total non-operating result 2) Projections are based on constant 2019 exchange rates

3) Despite increased R&D investments, the expected loss of the Sanofi payments for the Toulouse site after Q1 2020 and significantly ramping up the Just – Evotec Biologics business by investing in and building highly innovative J.POD® capacities in the USA

Evotec SE and Subsidiaries

Consolidated interim statement of financial position as of 30 September 2020

	as of	as of
in T€ except share data	30 September 2020	31 December 2019
ASSETS
Current assets:
— Cash and cash equivalents	215,900	277,034
— Investments	39,424	42,988
— Trade accounts receivable	94,376	82,251
— Accounts receivable from associated companies and other long-term investments	4,144	1,365
— Inventories	11,689	10,749
— Current tax receivables	15,040	22,777
— Contract assets	15,577	11,451
— Other current financial assets	2,635	1,640
— Prepaid expenses and other current assets	28,400	19,275
Total current assets	427,185	469,530
Non-current assets:
— Investments accounted for using the equity method and other long-term
investments	52,435	41,229
— Property, plant and equipment	270.291	239,229
— Intangible assets, excluding goodwill	105,800	116,994
— Goodwill	247,475	255,919
— Deferred tax asset	25,040	34,330
— Non-current tax receivables	40,543	22,718
— Other non-current financial assets	23	23
— Other non-current assets	879	940
Total non-current assets	742.486	711,382
Total assets	1.169.671	1,180,912
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
— Current loan liabilities	15,696	6,343
— Current portion of lease obligations	13,230	14,388
— Trade accounts payable	44,142	31,319
— Provisions	33,228	33,150
— Contract liabilities	63,851	71,067
— Deferred income	4,172	2,338
— Current income tax payables	4,376	7,305
— Other current financial liabilities	1	190
— Other current liabilities	16,179	12,855
Total current liabilities	194,875	178,955
Non-current liabilities:
— Non-current loan liabilities	330,979	324,886
— Long-term lease obligations	94,755	117,482
— Deferred tax liabilities	19,181	21,199
— Provisions	23,965	22,538
— Contract liabilities	29,451	33,785
— Deferred income	3,693	5,038
Total non-current liabilities	502,024	524,928
Stockholders' equity:
— Share capital	151,897	150,903
— Additional paid-in capital	790,703	786,865
— Accumulated other comprehensive income	(34,433)	(19,562)
— Accumulated deficit	(435,395)	(441,177)
Equity attributable to shareholders of Evotec SE	472,772	477,029
Non-controlling interest	-	-
Total stockholders' equity	472,772	477,029
Total liabilities and stockholders' equity	1,169,671	1,180,912

Evotec SE and Subsidiaries

Consolidated interim income statement for the period from 01 January to 30 September 2020

in T€ except share and per share data	Nine months ended 30 September 2020	Nine monthss endeds 30 Septembers 2019s	Three monthss ended 30 Septs 2020s	Three months ended 30 Sept 2019
Revenues from contracts with customers	360,414	321,362	129,425	114,274
Costs of revenue	(271,225)	(222,553)	(93,301)	(79,265)
Gross profit	89.189	98,809	36,124	35,009
Operating income and (expenses)
— Research and development expenses	(46,077)	(41,285)	(16,281)	(11,997)
— Selling, general and administrative expenses	(58,132)	(46,230)	(21,600)	(16,325)
— Impairment of intangible assets	-	(10,272)	-	-
— Impairment of goodwill	-	(1,647)	-	-
— Other operating income	54.522	54,008	19,423	18,122
— Other operating expenses	(4,216)	(6,958)	(1,297)	(2,420)
Total operating expenses	(53,903)	(52,384)	(19,755)	(12,620)
Operating income (loss)	35,286	46,425	16,369	22,389
Non-operating income (expense)
— Interest result	(4,728)	(3,994)	(1,352)	(1,214)
— Pro rata loss of associates accounted for using the equity method	(8,273)	(3,617)	(4,629)	(1,541)
— Other income from financial assets	68	13	31	10
— Foreign currency exchange gain (loss), net	(2,973)	4,852	(2,701)	5,264
— Other non-operating income (expense) net	(34)	65	(196)	(109)
Total non-operating income (expense)	(15,940)	(2,681)	(8,847)	2,410
Income before taxes	19,346	43,744	7,522	24,799
— Current tax expense	(10,404)	(8,688)	(5,977)	(3,334)
— Deferred tax income (expense)	(3,093)	(5,347)	(2,955)	(2,418)
Total taxes	(13,497)	(14,035)	(8,932)	(5,752)
Net income	5,849	29,709	(1,410)	19,047
of which attributable to:
Shareholders of Evotec SE	5,849	29,714	(1,410)	19,047
Non-controlling interest	-	(5)	-	-
Weighted average shares outstanding	151.053.186	149,496,540	151,017,103	149,785,303
Net income per share (basic)	0.04	0.20	(0.01)	0.13
Net income per share (diluted)	0.04	0.20	(0.01)	0.13

Evotec SE and Subsidiaries

Condensed consolidated interim statement of cash flows for the nine months ended 30 September 2020

in T€	Nine months ended 30 September 2020	Nine months ended 30 September 2019
Cash flows from operating activities:
— Net income	5,849	29,709
— Adjustments to reconcile net income to net cash provided by operating activities	57,694	56,790
— Change in assets and liabilities	(42,759)	(85,261)
Net cash provided by (used in) operating activities	20,784	1,238
Cash flows from investing activities:
— Purchase of current investments	(36,898)	(15,005)
— Purchase of investments in affiliated companies net of cash acquired	(31,111)	(44,742)
— Purchase of property, plant and equipment	(55,348)	(20,365)
— Purchase of intangible assets	-	(803)
— Payment of subsequent contingent considerations	-	(149)
— Proceeds from sale of current investments	40,502	22,426
Net cash used in investing activities	(82,855)	(58,638)
Cash flows from financing activities:
— Proceeds from option exercise	995	1,529
— Proceeds from loans	21,539	277,794
— Proceeds from finance lease obligation	-	684
— Repayment finance lease obligation	(11,057)	(9,837)
— Repayment of loans	(6,215)	(72,972)
Net cash provided by (used in) financing activities	5,262	197,198
Net increase in cash and cash equivalents	(56,809)	139,798
— Exchange rate difference	(4,325)	766
— Cash and cash equivalents at beginning of year	277,034	109,055
Cash and cash equivalents at end of the period	215,900	249,619