Evotec SE — Investor Presentation 2019

May 14, 2019

… just getting started First quarter 2019

Forward-looking statement

Information set forth in this presentation contains forward-looking statements, which involve a number of risks and uncertainties. The forward-looking statements contained herein represent the judgement of Evotec as of the date of this presentation. Such forward-looking statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, and which could cause actual results to differ materially from those contemplated in these forward-looking statements. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based.

Note:

The 2018 and 2019 results are not fully comparable. The difference stems from the acquisition of Evotec ID (Lyon) SAS, effective 01 July 2018. The results from Evotec ID (Lyon) SAS are only included from 01 July 2018 onwards.

The accounting policies used to prepare this interim information are the same as those used to prepare the audited consolidated financial statements for the year ended 31 December 2018, except for the adoption of IFRS 16 as of 01 January 2019. From 01 January 2019 onwards, Evotec applies IFRS 16.

Welcome to Q1 2019

The Management Team

Agenda

Highlights Q1 & Strategy

Financial performance

Scientific and operational performance

Guidance & Next steps

Very good scientific and operational progress

Q1 2019 – State of play

• Multiple new and extended drug discovery and development agreements
• Important milestone achievements, good progress with co-owned pipeline
• Licence agreement with Galapagos in fibrosis
• Agreement with The Mark Foundation in immuno-oncology based on TargetAlloMod
• Strategic collaboration in colorectal cancer with Indivumed (after period-end)
• Anti-infective research alliances with Helmholtz (HZI) and GARDP1)
• Participation in further financing rounds of Eternygen and Exscientia
• Conversion into European Company (SE) effective 29 March 2019
• Full repayment of debt bridge facility (€ 140 m) (last tranche after period-end)

Strong start and good underlying indications for ´19

Financials Q1 2019 & FY 2019 Guidance

Strong financial performance

• Group revenues from contracts with customers up 27% to € 103.8 m (Q1 2018: € 81.6 m1))
• Adjusted Group EBITDA2) up 114% to € 30.0 m (Q1 2018: € 14.0 m)
• Unpartnered R&D expenses of € 8.1 m (Q1 2018: € 4.6 m)
• Strong liquidity of € 141.6 m (31 December 2018: € 149.4 m)

Guidance 2019 confirmed

• Approx. 10% growth in Group revenues from contracts with customers without revenues from recharges (2018: € 364.0 m3) )
• Approx. 10% adjusted Group EBITDA2) growth (2018: € 92.0 m4) )
• Unpartnered R&D expenses of € 30-40 m (2018: € 22.9 m)

¹⁾ 2018 data including reclasses of recharges according to IFRS 15

²⁾ Before contingent considerations, income from bargain purchase & excluding impairments on goodwill, other intangible & tangible assets as well as the total non-operating result 3) 2018 total revenues excluding revenues from recharges according to IFRS 15

⁴⁾ 2018 total adjusted Group EBITDA excluding € 3.5 m one-off effects in 2018

All moves follow consistent long-term strategy

"Action Plan 2022 – Leading External Innovation"

Agenda

Highlights Q1 & Strategy

Financial performance

Scientific and operational performance

Guidance & Next steps

Strong base business and important milestones

Condensed income statement Q1 2019 – Evotec SE and subsidiaries

in € m1)
	Q1 2019	Q1 2018	% vs 2018
Revenues from contracts with customers2)	103.8	81.6	27%
Gross margin2)	30.5%	22.6%	–
 R&D expenses	(14.4)	(4.6)	211%
 SG&A expenses	(14.8)	(13.3)	11%
 Other op. income (expenses), net	16.5	6.0	178%
Operating result	19.1	6.5	192%
Adjusted Group EBITDA3)	30.0	14.0	114%
Net income	13.1	3.5	278%

• Revenue growth mainly due to strong performance in base business and milestone contributions
• Gross margin Q1 2019 impacted by better base margins, higher milestone contributions, and favourable FX effects
• Unpartnered R&D expenses of € 8.1 m (€ 4.6 m)
• Other operating income up due to reimbursement of ID expenses and increased R&D tax credits
• Adjusted Group EBITDA in Q1 2019 positively affected by IFRS 16 (€ 3.1 m)

¹⁾ Differences may occur due to rounding

²⁾ 2018 data including reclasses of recharges according to IFRS 15

³⁾ Before contingent considerations, income from bargain purchase and excl. impairments on goodwill, other intangible and tangible assets as well as the total nonoperating result

Continued growth path at strong margin

Revenues & Gross margin overview

• Revenue growth due to strong performance in base business and positive milestone contributions (e.g. Bayer, Boehringer Ingelheim)
• Favourable impact on gross margin following milestone contributions, higher margins in some business lines, and positive FX effects (1.5%-points)
• Gross margins from Q1 2018 onwards represent a different business mix and are affected by increased amortisation resulting from the PPA of acquisitions

2) 2017 and 2018 data including reclasses of recharges according to IFRS 15

¹⁾ Gross margin in the future may be volatile due to the dependency of receipt of potential milestone or out-licensing payments, both having a strong impact on the gross margin, also new business through Aptuit.

Both segments fully on strategy

Segment information Q1 2019 – Evotec SE and subsidiaries

in € m1)

	EVT Execute	EVT Innovate	Inter segment elimination	Not allocated2)	Evotec Group
Revenues	100.3	18.8	(18.8)	3.5	103.8
Gross margin	29.0%	24.8%	–	–	30.5%
 R&D expenses	(0.1)	(16.3)	2.0	–	(14.4)
 SG&A expenses	(12.0)	(2.8)	–	–	(14.8)
 Other op. income (expenses), net	4.8	11.7	–	–	16.5
Operating result	21.8	(2.7)	–	–	19.1
Adjusted EBITDA3)	32.3	(2.3)		–	30.0

• Revenue growth in EVT Execute driven by strong performance in the base business
• Gross margin in EVT Execute driven by highmargin base business
• Increase in R&D expenses in EVT Innovate both in unpartnered and partnered R&D according to strategy

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

3) Before contingent considerations, income from bargain purchase and excl. impairments on goodwill, other intangible and tangible assets as well as the total nonoperating result

¹⁾ Differences may occur due to rounding

Relevant impact of new IFRS 16 on balance sheet

Balance sheet and liquidity – 31 March 2019 versus 31 December 2018

• Balance sheet total € 880.8 m (31 December 2018: € 771.9 m without IFRS 16)
  • Increase in property, plant and equipment following capitalisation of operating leases as fixed assets (€ 100.3 m) (IFRS 16 application)
  • Higher non-current assets due to increase in R&D tax receivables
  • Loans and finance leases significantly affected by first-time application of IFRS 16 (€ 102.3 m)
  • Decrease in non-current liabilities due to lower contract liabilities
• Net Debt ratio of 0.8%
• Strong equity ratio of 50.9% (31 December 2018: 55.0%)
• Strong liquidity of € 141.6 m (31 December 2018: € 149.4 m)

Agenda

Highlights Q1 & Strategy

Financial performance

Scientific and operational performance

Guidance & Next steps

ONE fully integrated platform

Unique business model

Operational for our > 200 partners

EVT Execute – Major achievements Q1 2019

• Multiple new drug discovery and development agreements
• Excellent scientific progress driving expansion of existing partnerships
• Strong business performance and efficiency improvements across all business lines and sites (Evotec, Aptuit, Cyprotex, consolidation of Basel)
• Robust pipeline of INDiGO projects including transitions from Evotec-conducted discovery

Strong and well-balanced global customer mix

EVT Execute – Selected KPIs Q1 2019

Revenues by customer segment ytd1) (in %)		Customer type ytd1) (in %)			Revenues by region ytd1) (in %)
		100%	Mid-sized Pharma	17%	100%	RoW		100% 3%
Remaining	33%		Foun dations	6%		USA	36%
Top 11-30 customers	20%		Biotech	46%
Top 10 long-term strategic alliances	47%		Top 20 Pharma	31%		Europe	61%
	Q1 2019			Q1 2019			Q1 2019

Acceleration of science across various ventures

EVT Innovate – Major achievements Q1 2019

• Good pipeline progress, e.g. with Phase II in Chronic Cough (Bayer)
• Licence agreement with Galapagos in fibrosis
• Driving anti-infective innovation through alliances with Helmholtz and GARDP1)
• Strategic oncology agreements (The Mark Foundation; Indivumed)
• BRIDGE expanding (e.g. further projects selected in LAB150)

Strong progress in fully invested pipeline

Partnership portfolio – Highlights in Q1 2019 marked in green

	Molecule	Therapeutic Area/Indication	Partner	Discovery	Pre-clinical	Phase I	Phase II
	EVT201	CNS – Insomnia
	BAY-1817080	Chronic cough
al c ni Cli	ND1)	Chronic cough					Ph. II start
	SGM-10192)	Inflammation (NASH)
	EVT401	Immunology & Inflammation
	Various	Women's health – Endometriosis
	Various	Women's health – Endometriosis
	Various	Women's health – Endometriosis
	CT7001	Oncology
	Various	Respiratory
	ND1)	Oncology
	ND1)	Immunology & Inflammation
al	ND1)	Pain
c	Various	Women's health – Endometriosis
ni	EVT801	Oncology
cli	TargetImmuniT	Oncology – Immunotherapy
e-	ND1)	Oncology (+ several discovery programmes)
	ND1)	Fibrosis					NEW collaboration
Pr	Various	Anti-infectives	>5 programmes
	Various	CNS, Metabolic, Pain & Inflammation	>10 further programmes
	Various ND1)	Nephrology
	Various ND1)	Immunology & Inflammation
	Various ND1)	Nephrology
	Various ND1)	Metabolic – Diabetes
	Various	Oncology
	Various	Immunology & Inflammation – Tissue fibrosis
	Various	Neurodegeneration
y	ND1)	Anti-bacterial
er	Various	All indications
v o	ND1)	Dermatological diseases
c	ND1)	Facioscapulohumeral Dystrophy
s	INDY inhibitor	Metabolic
Di	Various	Fibrotic disease	Fibrocor Therap. / Galapagos
	TargetPicV	Antiviral
	Various	Anti-infectives	>5 programmes
	Various	Internal: Oncology, CNS, Metabolic, Pain & Inflammation	>40 further programmes
	ND1)	Oncology					NEW collaboration
	ND1)	Novel antibiotics					NEW collaboration
	ND1)	Novel antibiotics					NEW collaboration
	ND1)	Oncology – Colorectal cancer					NEW collaboration

PAGE 17 1) Not disclosed

2) Under review – Clinical trial Phase II currently on hold

Note: Several projects have fallen back to Evotec, where Evotec does not intend to run further clinical trials unpartnered, e.g. EVT302, EVT101, …

Re-defining DD paradigm from patient to patient

Game-changing platforms for better translation

Precision medicine … just the beginning

Evotec and Indivumed in colorectal cancer (CRC)1)

Colorectal Cancer (CRC) a major cancer indication

• Third most common cancer type
  • Following lung and breast cancer
  • 8% of the global cancer incidence
• Market size of \$ 10.8 bn by 2022
• Massive need for novel therapeutics Rapid increases in both CRC incidence and mortality

&

• Precision medicine collaboration to deliver highly effective and durable treatments with clear strategies for CRC patient stratification
• Indivumed contributes its multi-omics cancer database "IndivuType" and access to patient samples
• Evotec applies its bioinformatics platform "PanHunter" and drug discovery platform to select and develop novel targets

World-leading in nephrology… just the beginning

NURTuRE – Kidney disease processes, platforms and networks

Patient-derived iPSC assays as new gold standard

World-leading iPSC processes and network

Agenda

Highlights Q1 & Strategy

Financial performance

Scientific and operational performance

Guidance & Next steps

Strong year ahead – Guidance 2019 confirmed

Guidance 2019

1	Double digit top line growth	 Approx. 10% growth in Group revenues from contracts with customers without revenues from recharges1)
2	Profitable and growing	Adjusted Group EBITDA2)  expected to improve by approx. 10% compared to € 92.0 m in 20183)
3	Focused unpartnered investments	Unpartnered Group R&D expenses of € 30-40 m4) 

¹⁾ 2018 total revenues excluding revenues from recharges according to IFRS 15: € 364.0 m

²⁾ Before contingent considerations, income from bargain purchase & excl. impairments on goodwill, other intangible & tangible assets as well as the total non-operating result 3) 2018 total adjusted Group EBITDA excluding € 3.5 m one-off effects in 2018: € 92.0 m

⁴⁾ For better comparison to previous years, Evotec focuses its guidance and upcoming reporting during the course of 2019 on the "unpartnered R&D" part. ID-related R&D expenses will be fully reimbursed by its partner Sanofi ("partnered R&D").

Important next dates

Financial calendar 2019

Annual Report 2018	28 March 2019
Quarterly Statement Q1 2019	14 May 2019
Annual General Meeting 2019	19 June 2019
Half-year 2019 Interim Report	14 August 2019
Quarterly Statement 9M 2019	12 November 2019

Your contact:

Dr Werner Lanthaler Chief Executive Officer

+49.(0).40.560 81-242 +49.(0).40.560 81-333 Fax werner.lanthaler@evotec.com