Company Announcements

KRAKÓW, Poland, Sept. 24, 2024 /PRNewswire/ -- Selvita S.A. (WSE: SLV), one of the leading preclinical contract research organizations in Europe, has published its financial results for Q2 2024, earnings estimates for Q3 204 and backlog for 2024 and 2025.

Financial and Operational Highlights

• Selvita reports revenue growth in each subsequent quarter of 2024. In Q2 2024, commercial revenues were 6% higher than in Q1. Published estimates for Q3 suggest the rebound will continue, with the company expecting to generate between EUR 20.2 million and EUR 20.6 million in organic revenue. This implies 9-12% q/q and 7-10% y/y growth. The Group's EBITDA⁽¹⁾ margin for Q3 is projected to reach 15-18%, representing an improvement of 5-8 p.p. from the previous quarter.
• The contracting level for H2 2024 is 12% higher compared to the same period in the previous year⁽²⁾. Meanwhile, the backlog for next year is 32% higher than it was in September 2023.
• Selvita has observed a gradual improvement in global biotech sector financing. Over the past six months, it reported four significant cooperation agreements, compared to two during all of 2023. At the same time, contracting for 2024 from big pharma⁽³⁾ companies stands currently at EUR 17.9 million, 28% higher than the revenue generated by this group of customers in the entirety of 2023.
• In Q2 2024, the Company completed transactions related to the launch of a new site in Wroclaw, dedicated to biological drug discovery and development, as well as the acquisition of PozLab, a CDMO offering services for small molecule drug development. The integration of these new sites is progressing as planned and is at its final stage.

"After a challenging first half of the year, we believe to have returned to solid organic revenue growth in the second quarter, which is expected to further accelerate in the third quarter, and beyond, as indicated by the strong backlog for the second half of the year and further on in 2025. Acquisitions made in the first half of the year and sizable staff and infrastructure reserves create a solid base for continued strong revenue growth and increasing profitability. We also expect to be supported by the improving macroeconomic situation for the sector, where in case of our biotech sector, a significant driver can be, for instance, the first interest rate cuts in four years in the key markets." - comments Bogusław Sieczkowski, Co-Founder and Chief Executive Officer of Selvita.

Selvita on the path for growth

Selvita's revenues are increasing in each consecutive quarter of 2024. The Group estimates that Q3 revenues will be11-13% higher organically than those in Q1 and 7-9% higher than in Q2. The Group's contracting for H2 2024 indicates 12% y/y growth (organic 10%). The expansion of the business will optimize resource utilization, especially those resources related to the launch of its own laboratory space, driving significant profitability growth.

Financial Insights                                             

Selvita Group's commercial revenues in Q2 2024 amounted to EUR 18.5 million, compared to EUR 17.3 million in Q1. The Group generated EUR 1.8 million in EBITDA, impacted by approximately EUR 1.9 million due to foreign exchange differences compared to 2023, temporarily underutilized resources and one-time events. In Q2 2023, EBITDA amounted to EUR 4.7 million.

According to the published earnings estimates, Selvita expects EUR 19.3-19.7 million in organic commercial revenues (up 7-9% q/q) in Q3 2024 and EBIDTA profitability in the range of 17-20% (up 3-6 p.p. q/q profitability). Organic backlog for 2024 indicates a 10% y/y contracting growth rate in H2 2024. 

Revenues of the drug discovery segment, which accounted for 78% of the Group's sales in H1 2024, increased by 10% q/q in Q2 2024. The contracted status for H2 2024 indicates that the drug discovery segment grew by 4% y/y, and the drug development segment by 30% y/y.

Selvita continues to consistently grow its sales to big pharma customers. Organic revenues from big pharma companies amounted to EUR 8.5 million in H1 2024, up 17% y/y. The contracted status for the full year 2024 indicates at least 27% y/y growth in sales to this type of customer.

The backlog for the next year amounts to EUR 19.3 million, indicating a 32% increase when compared to the previous year. As a result, Selvita achieved a record cost coverage ratio for the next year as of September, historically achieved by the Group two months later.

Notes:

(1) The results do not include non-cash costs of the non-dilutive employee incentive program.

(2) Backlog as of 20/09/2024 and 25/09/2023.

(3) Big Pharma defined as global pharmaceutical companies 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 a 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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SOURCE Selvita S.A.