Evotec SE — Investor Presentation 2020

Nov 12, 2020

On our way to the future of R&D

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:

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 (land and buildings) and people of BBS Biopark in Toulouse was effective on 01 July 2020. All three Units were fully consolidated in the group numbers from the respective dates onwards.

Welcome to 9M 2020

The Management Team

One direction set for growth

Q3 2020 – Highlights

• Continued strong operational performance despite ongoing COVID-19 pandemic
• Multiple new & extended drug discovery and development alliances
• Long-term multi-target alliance with Novo Nordisk in kidney disease
• Alliance with QUOD biobank to expand patient database into liver disease
• Strong progress in co-owned pipeline
• Bayer started patient recruitments with Eliapixant (BAY1817080) in:
• Recurring chronic cough (RCC), Phase IIb
• Overactive bladder (OAB), Phase II
• Important milestones e.g. within neurodegeneration alliance with Bristol Myers Squibb
• Important COVID-19 pandemic related alliances with US DOD (Department of Defense) and grant from Bill & Melinda Gates Foundation (after period-end)
• Mubadala Investment Company new strategic shareholder and Novo Holdings A/S reinforce ownership (investment of together € 250 m) (after period-end)
• Extension of contract of Werner Lanthaler (CEO) for further five years (after period-end)

Agenda

Highlights

Financial performance 9M 2020

Scientific and operational performance 9M 2020

Guidance 2020

Strong upswing in Q3 – on track despite delayed milestones and COVID-19

Financials 9M 2020 & FY 2020 guidance

Improving momentum

• Group revenues up 12% (€ 360.4 m vs. 9M 2019: € 321.4 m)
• Like-for-like growth of base business (adj. for portfolio and FX) up 19%
• Adjusted Group EBITDA1) of € 76.9 m (9M 2019: 93.2 m) with strong upswing in Q3
• Increased investment into unpartnered R&D expenses of € 33.4 m (9M 2019: € 25.7 m)

Revenue and EBITDA guidance confirmed2,3)

• Total Group revenues € 440 480 m (2019: € 446.4 m)
• Unpartnered Group R&D expenses of approx. € 45 m (2019: € 37.5 m)

• Adjusted Group EBITDA € 100 120 m (2019: € 123.1 m)

• 5 1) Before contingent considerations, income from bargain purchase & excluding impairments on goodwill, other intangible & 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

Business model shows resilience and increasing potential through co-ownership

Unique business model

Recruiting talent during crisis to secure growth into 2021

Development of global number of Evotec employees

Sovereign Wealth Fund as new anchor investor

Welcome Mubadala Investment Company

US\$ 232 bn assets under management (Dec 2019) – Healthcare is an upcoming strategic sector for Mubadala

• Outsourced services to pharma, biotech and medical device companies has been an investment focus for Mubadala
• 10/10 in Linaburg-Maduell Transparency Index (LMTI)
• Committed to Environmental, Social and Governance (ESG) considerations in investment decisions
• Investment of € 200 m translates into 5.6% of total new number of 163.5 m Evotec shares

Use of proceeds

Acceleration infrastructure built-up strategy (e.g. in biologics (e.g. second J.POD®)), and investments in prediction technologies for biologics

• Investments in novel cell & gene therapies in multiple indications
• Investments in greater access to patient-derived material and data for precision medicine
• Investments in technology platforms, such as iPSC and machine learning
• Expansion of footprint in the United States and Europe
• Acceleration of translational strategy from academia (BRIDGES) and growing the co-owned equity participation strategy

Agenda

Highlights

Financial performance 9M 2020

Scientific and operational performance 9M 2020

Guidance 2020

On track for 2020 goals

Condensed income statement 9M 2020 – Evotec SE and subsidiaries

in € m1)

	9M 2020	9M 2019	% vs. 2019
Revenues from contracts with customers	360.4	321.4	12
Gross margin	24.7%	30.7%	–
 R&D expenses	(46.1)	(41.3)	12
 SG&A expenses	(58.1)	(46.2)	26
 Impairment of intangible assets and goodwill2)	–	(11.9)	–
 Other op. income (expenses), net	50.3	47.1	7
Operating income	35.3	46.4	(24)
Adjusted Group EBITDA3)	76.9	93.2	(17)
Net income	5.8	29.7	(80)

• Strong business mix supporting performance and momentum, despite expiration of Sanofi subsidy payments
• Just Evotec Biologics contribution: € 26.2 m (of which only € 16.3 m a portfolio effect)
• Base business up 14%; Like-for-like growth up 19% (adj. for portfolio & FX)
• Strong increase in milestones, upfronts, licenses in Q3, but still on a lower level compared to 2019
• Adj. EBITDA according to plan, showing strong momentum in Q3

PAGE 10 1) Differences may occur due to rounding

2) 9M 2019: One-off impairment of intangible assets and good-will following termination of SGM-1019 programme with Second Genome

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

Dynamic organic growth in base revenues

Revenues & Gross margin overview

• Growth across all business lines, despite COVID-19 and slippage of milestones
• Lower total gross margin due to
• overall lower upfront, milestones and license payments and the
• anticipated fade-out of payments from Sanofi for the Toulouse site
• Amortisation of PPA and IFRS 15 effect further diluting gross margin
• Income from milestones with positive trend in Q3

Third quarter with increased momentum

Condensed income statement Q3 2020 – Evotec SE and subsidiaries

in € m1)
	Q3 2020	Q3 2019
Revenues from contracts with customers	129.4	114.3
Gross margin	27.9%	30.6%
 R&D expenses	(16.3)	(12.0)
 SG&A expenses	(21.6)	(16.3)
 Impairment of intangible assets and goodwill	–	–
 Other op. income (expenses), net	18.1	15.7
Operating income	16.4	22.4
Adjusted Group EBITDA2)	29.7	35.0
Net income	(1.4)	19.0

• Revenue growth driven by strong performance in base business and improved revenues from milestones, upfronts and licenses
• Gross margin influenced by fade-out of Sanofi payments
• SG&A increased due to overall company growth and transactions being consolidated (e.g. Evotec GT, Campus Curie)

1) Differences may occur due to rounding

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

Continued underlying revenue growth in both segments

Segment information 9M 2020 – Evotec SE and subsidiaries

in € m1)

	EVT Execute	EVT Innovate	Inter segment elimination	Tran sition2)	Evotec Group
Revenues	352.7	74.7	(82.8)	15.9	360.4
Gross margin	25.7%	8.1%	–	–	24.7%
 R&D expenses	(3.6)	(49.8)	7.3	–	(46.1)
 SG&A expenses	(47.4)	(10.7)	–	–	(58.1)
 Impairment of intangible assets and goodwill	–	–	–	–	–
 Other op. income (expenses), net	13.7	36.6	–	–	50.3
Operating income	53.2	(17.9)	–	–	35.3
Adjusted Group EBITDA3)	92.3	(15.4)	–	–	76.9

• Revenue growth of 14% in EVT Execute reflects strong base business and contributions by Just – Evotec Biologics
• Strong revenue growth of 21% in EVT Innovate
• Adjusted EBITDA mainly influenced by lower upfront, milestone and license revenues over same period of previous year, the expiration of Sanofi subsidy payments, loss of Italian tax credits and increased commitment to unpartnered R&D

2) Not allocated to segments: Revenues from material recharges according 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 non-operating result

¹⁾ Differences may occur due to rounding

Strong balance sheet and solid liquidity position

Balance sheet and liquidity – 31 Dec. 2019 versus 30 September 2020

Agenda

Highlights

Financial performance 9M 2020

Scientific and operational performance 9M 2020

Guidance 2020

Continued strong operational performance despite COVID-19

EVT Execute – Major achievements 9M 2020

• Multiple new and extended drug discovery and development agreements (e.g. Austrianni, Boehringer Ingelheim, PTEN Research, …)
• Just Evotec Biologics continues to deliver (e.g. DOD, Bill & Melinda Gates (after period-end))
• Increasingly strong development business, including commercial drug substance development
• New Humanoid Antibody Library (HAL) offering complementing Evotec`s biologics platform
• J.POD® on track for opening in H2 2021

All sites contributing to broader and integrated offering

Expansion of footprint reflects growth strategy

France – "Campus Curie" acquisition of key assets closed July 2020, Lyon move to BIOASTER completed

Improved degrees of freedom to operate and grow

Italy – Verona

Continuing increase in demand for fully integrated capabilities

Germany – Hamburg, Goettingen, Munich, Cologne

Expansion planned for "The lighthouse of iPSC" in Hamburg; expansion as well in Munich and Goettingen

UK – Abingdon, Manchester

• Abingdon evolution to fully integrated R&D offering
• Manchester expansion

USA – Branford, Princeton, Redmond, Seattle, Watertown

• All sites ready for expansion
• Construction of J.POD® Redmond on track for operational start in H2 2021

Austria – Orth

Off to a good start to build a long-term business

Dorothy Crowfoot Hodgkin Campus expands into fully integrated R&D site

Summary of key benefits to partners and Evotec

Just – Evotec Biologics on track

J.POD® facility and highlights

• J.POD® facility construction work making considerable progress despite COVID-19
• Alliance with Department of Defense for anti-SARS-Cov2 antibodies
• Grant from Bill & Melinda Gates Foundation as part of COVID-19 Therapeutics Accelerator to enable development and production of monoclonal antibody candidates for prevention of severe COVID-19 (after period-end)
• Launch of AI-based platform to create Humanoid Antibody Libraries (HAL)

Strong clinical and pre-clinical progress

EVT Innovate – Major achievements 9M 2020

• First patient recruitments in two Phase II studies of Bayer with Eliapixant (BAY1817080) in Recurring Chronic Cough (RCC) (Ph IIb), Overactive Bladder (OAB) (Ph II)
• Milestone in neurodegeneration alliance with Bristol Meyers Squibb
• Multi-target alliance with Novo Nordisk for novel therapies in kidney diseases
• Access to QUOD biobank to expand patient database into liver disease

Successful partnership accelerating

iPSC – Alliance with Bristol Meyers Squibb – Progress overview

iPSC alliance in neurodegeneration

Development of novel therapies for a broad range of neurodegenerative diseases

Unparalleled iPSC platform delivers big portfolio of opportunities

iPSC platform

• iPSC platform for drug discovery and cell therapy
• Unique opportunity to select unbiased best therapeutic modality for a specific disease or target
• Linked with cutting edge technology platforms to rapidly advance disease understanding and modelling

Expansion into liver disease with unique access from QUOD

Molecular patient databases are the foundation of precision medicine

PanOmics: Genomics, Transcriptomics, Proteomics and Metabolomics PanHunter: Bioinformatics, AI/ML

Very good progress within Evotec Equity portfolio

Equity participations for co-owned pipeline is further expanding

Equity	Equity	Equity	Spin-off	Equity	Equity	Equity	Equity	Equity (in-kind)	Equity
Molecular pathways in Oncology	Metabolic disorders	Fibrosis partnership	Nanoparticle - based therapeutics	AI for automated drug design	FSHD	Targeting metallo enzymes	Inflammatory diseases	Across thera peutic areas	Oncology
Initiated 2016	Initiated 2016	Initiated 2016	Initiated 2016	Initiated 2017	Initiated 2017	Initiated 2017	Initiated 2019	Initiated 2019	Initiated 2019
Spin-off	Equity	Equity	Joint Venture	Equity	Equity	Equity	Equity
Damaged DNA repair	Women's health	Oncology	with Vifor Pharma Nephrology	Neuroscience	Nano technology	Cell therapy	Oncology
Initiated 2019	Initiated 2019	Initiated 2019	Initiated 2019	Initiated 2020	Initiated 2020	Initiated 2020	Initiated 2020	More to come

Agenda

Highlights

Financial performance 9M 2020

Scientific and operational performance 9M 2020

Guidance 2020

Strong news flow to be continued

Overview

EVT Execute

New integrated service alliances in drug discovery & development

• New clinical initiations and progress of co-owned pipeline
• New co-owned partnerships

EVT Equity & BRIDGES

• Initiation of new BRIDGEs
• New operational ventures

Business outlook confirmed

Guidance 2020

1	Good top line growth	 Total Group revenues expected to range from € 440 – 480 m, based on constant 2019 exchange rates, despite loss of € 20 m payment from Sanofi, and certain COVID-19 challenges1)
2	Strong EBITDA	 Adjusted Group EBITDA2) expected to be in the range of € 100 – 120 m, at comparable level as in 2019, despite loss of € 20 m payments from Sanofi, significant ramping up J.POD® capacities, and certain COVID-19 challenges
3	Focused R&D 3) investments	 Unpartnered Group R&D expenses of approx. € 45

1) Projections are based on constant 2019 exchange rates2) EBITDA is defined as earnings before interest, taxes, depreciation, and amortisation of intangibles.

2) 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;

3) Evotec focuses its guidance and upcoming reporting on the "unpartnered R&D" part. ID-related R&D expenses will be fully reimbursed by its partner Sanofi ("partnered R&D").

Upcoming important dates

Financial calendar 2021

Annual Report 2020	25 March 2021
Quarterly Statement Q1 2021	11 May 2021
Annual General Meeting 2021	Date tbc
Half-year 2021 Interim Report	11 August 2021
Quarterly Statement 9M 2021	11 November 2021

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