So the answer is yes. But the message also to our partners, but I’m happy to give that message here. I mean, when partners are constrained, now is the time to invest and put money behind the demand where we can be of course partners to expand capacity for further partners. It could be additional trends or additional facilities down the road. Hopefully does covers that?
Jacqueline Kisa: Great. Thank you.
Matthias Evers: Go to the next question.
Operator: The next question comes from Falko Friedrichs from Deutsche Bank. Please go ahead.
Falko Friedrichs: Thank you for taking my questions. Good afternoon. My first question, thank you for providing us with a sort of a rough ballpark number for EBITDA in 2024. Could we do the same exercise for 2025 please? It’s super difficult from the outside right now to pinpoint where you could land considering all of these different moving parts and your kitchen thinking exercise here. So is it fair that sort of the €250 million market expectation is still in play when including the €40 million of savings or would you point us to a lower number? Then secondly, you mentioned that this temporary mismatch of demand versus capacities, that this could be fixed relatively quickly. Can you add a little bit more color here? So are we speaking about a few months or is that something over the next 2 to 3 years that would be super helpful?
And then my third question, I think it would give all of us a bit more comfort if you could share if the new CEO has been involved in this type of guidance exercise you’ve done at all at this point. I just want to make sure that we’re not sitting here again in the middle of August and instead of €100 million, we’re speaking about €80 million. So maybe you can share a little bit more to what extent the new CEO was involved? Thank you.
Volker Braun: Thank you, Falko. I take the liberty to take first question then on demand and capacity. I guess, Craig will take it together with Mathias and with regard to the involvement of Christian, a few words from Iris, but I guess I know the answer already, but we will see. So on the 2025 guidance, no, it’s not a guidance has never been, by the way, has always been an outlook, a midterm outlook. And you heard, Laetitia saying that the €1 billion is still within reach with a double-digit growth in the next 2 years. And then we need to adjust the cost structure accordingly, and then, we will see where we end and we will provide an update by mid this year and August together with the entire team. So please bear with us. And Craig?
Craig Johnston: Thanks for the question. So in terms of the right sizing and the balance between demanding capacity and addressing the overcapacity, of course, we have a number of threads to that rebalancing and cost saving exercise, as Laetitia alluded. One of the – there are some aspects which can be conducted relatively rapidly, such as a reduction in physical footprint and bringing certain facilities into a fallow state, for example, and that saves a lot of energy and that can be relatively rapid. But on the other hand, where we come into headcount reductions, we’ve got to follow the various social processes and laws in the countries in which we operate. And of course, that varies from country to country, but is generally in Europe, relatively slow and cautious because of various employee processes, which means that it will take some months as we work through the full details of our plans first of all.
Our works council engagements and then decisions and implementations which will take much of 2024, which is why we’re indicating that there will be pro rata guidance in 2024 and then full year impact only in 2025.
Iris Löw-Friedrich: And on the involvement Falko of the new CEO in the guidance, please be mindful that Christian just signed his contract yesterday, right, that’s why you saw the press release last night, so it would have been inappropriate to involve him into these types of discussions. Please rest assured that his onboarding will start now and that he will have a jumpstart when he joins us on the 1st of July and, of course, Supervisory Board has pressure tested, what has been shared today, so please stay tuned for the new guidance then with the new CEO later this year.
Falko Friedrichs: Okay. Thank you.
Operator: And the next question comes from Peter Verdult from Citi. Please go ahead.
Peter Verdult: Sorry, it’s Peter from Citi. Just a couple of follow-ups, hopefully the line is clear now. Just maybe from the materials, as Laetitia prior communication was for Just-Biologics to reach profitability in 2025 and, I think, you were nearly there in 2023, but I’m also sensing there’s increased investment you have to lose coming online, so do you just want to just sense plain [ph] question? When do you expect Just-Biologics to reach profitability? I’ll pause there and follow-up with my second question.
Volker Braun: Peter, thank you for the question, I take it. I think you observe right, we are nearly there so we are trending towards profitability in quarter four as we indicated and based on that we have planned for a budget that reaches profitability in 2024 and that’s what we are working against as we are growing, so it’s in the spirit of efficient profitable growth that’s what we are aiming here to deliver.
Peter Verdult: Okay. And my second question and I’m just starting to label the point, but in terms of order book and, again, you’ve been making some quite confident statements around revenue outlook and perhaps being able to achieve that €1 billion revenue guidance given 2025. Could you remind us, I usually give this number, but you said in the past that your order book in biologics is 600, 700, not more, but could you give us a sense how the order book is looking across the broader business, just to give, especially given that we’re now 4 or 5 months into the year, just confidence in a €100 million EBITDA number for 2024? Thank you.
Volker Braun: Let’s try from a few angles, Peter. So, let’s start in the area of Just-Evotec Biologics. The last year I’ve seen is that we reached €850 million. I mean, I think we disclosed that in November. And I think at this moment of time, we are happy to talk about that. We reached the €900 million and we are growing from there. So we will confident that we stay with our projections for that part of the business as similar as I indicated before ballpark growth area. I think when it comes to our sales order book, we are also trying to signal today that we are absolutely confident by when we look at our full sales pipelines, that’s why we have shifted showing that, I mean, that’s a pipeline from early stages with low probability all the way to close to confirmed deals.
And there we see a double-digit growing demand that gives us confidence to make the qualitative statement on double-digit revenue growth and, yes, the €1 billion was that is in insight.
Peter Verdult: Thank you.
Operator: And the next question comes from Naresh Chouhan from Intron Health. Please go ahead.
Naresh Chouhan: Hi, there. Thanks for taking my questions. Just a follow-up question to Pete’s actually on order book, if I could be a bit more specific. So as I understand that around 60% of execute revenues are not API and ADME-Tox to the more higher value add longer-term contracts with much better funded partners. So the biotech issue should be much less of an issue in that part of the business. We’re now almost halfway through 2024. Can you give a sentence to have the order book in that part of your business looked and should we continue to – have you got visibility of growth into 2025 in that part of the business? And that would be very helpful for us to understand what level of confidence and how much visibility you have, because obviously those contracts are 12 to 18 months?
If, as they roll off that business all starts to decline, then it’s a very different outlook. So some comfort on that would be very helpful. And then secondly, on Just, as I understand it, there were €33 million of revenues from Just in Q4, where the vast majority were in J.DISCOVERY, which means that the JPOD in Seattle is pretty much empty having been up and running for quite some time. So can you help us understand what’s going on and why you have no production in the JPODs, please?
Volker Braun: Thank you. So thanks, Naresh. I think there’s two questions with two clarifications needed. The second one, Mathias will take that. The first one, you mentioned 60% of the execute business is the non-transactional, which I have to clarify that, first of all, there won’t be any execute business going forward. And the 60% that this year alluded to was really entire Evotec. So 60%, 20% transactional, 20% Just. So I guess that is worth knowing. And we do not split out apart from the information on Just, which has a certain consistency over the recent months and even a year. We do not provide further granularity than that. And on Just…
Matthias Evers: All right. I will try to clarify a little bit how our Just-Evotec Biologics business actually looks like. And I’m excluding our capabilities on the discovery side. I really focus on the core process development, CMC, clinical supply, commercial manufacturing part. Our very proposition is that we have the ability with AI-based models on data streams to look at antibodies and optimize them for developmentability and manufacturability. Then we design, we have a very strong reputation and track record on the process development side, then to get ready as antibody for clinical supply, then for commercial supply. So to establish the bookends, no, we don’t have a commercial molecule just yet that gives us full leverage of the JPOD capacity.
We have always stated that we are looking at 2026, 2027. So the outer years, where we have the commercial molecule, which gives us, of course, higher leverage and higher revenues and higher profitability. At this moment of time, yes, it’s not empty because we have clinical supply, for example, for our biotech customers. We work with biotech, we work with DoD, we work with Sentinel. And, yes, we have strong levels of our process development capability, because we have a pipeline deal, a tech deal, with Sentinel, for instance, where we develop a portfolio of biosimilars. So that hopefully cost-corrects a little bit what is empty and what is not. I would rather call it, our capacities are rather full and constrained as we are growing into the signed-up work.
And we are focusing on process development and we will get further leverage in the future through commercial production.
Naresh Chouhan: Okay. Thank you.
Operator: And the next question comes from Joseph Hedden from Rx Securities. Please go ahead.
Joseph Hedden: Good afternoon. Thanks for taking the question. It’s just a milestone as it was clear. 2023 was a was a weak year than 2022 from milestones and appreciate that you’ve never and can’t give guidance on levels of expected milestones. But, I mean, perhaps just to steer on you will have an idea I’m more expected this year from the major partnerships on the innovate side of the pipeline, could we see a significant uptake there? Thanks.
Volker Braun: Laetitia, will you take that one?
Laetitia Rouxel: Okay. So regarding the milestones payment that’s obviously not something that is disclosed on a regular basis, what I want to – what I can share with you is that we have taken for 2024 we have anticipated, let’s say, a rather moderate year in terms of milestones events based on the status of the early stage of our portfolio. So meaning that, I would say in average it’s in line with what happened in average the last 3, 4 years, but in average so not taking into consideration the peak of 2022 as the reference. So I would say it’s a rather prudent situation we are factoring in our equation this year to answer your question.
Joseph Hedden: Okay. Thank you, Laetitia.
Operator: And the next question comes from Charles Weston from RBC. Please go ahead.
Charles Weston: Hi, thanks for taking my follow-up. Just one please on the Sandoz product development deal. How is that going? How many of the programs have kicked off will set progress if there have been any setbacks? And what’s the potential revenue phasing for the Sandoz contract over the next year, please?
Volker Braun: Charles, thanks for the follow-up. I can only reiterate what we disclosed previously. I mean, it’s a portfolio of molecules that we are starting. We can say, I mean, as I said maybe a year ago, we have front-loaded, so all programs are started, so we are front-loaded, so we have multiple molecule projects in parallel, and we have always said the brand of the revenues we talk about multiple years. So it’s a multi-year process development, so you have to distribute it in your models over a couple of years.
Charles Weston: Okay. Thank you.
Operator: So there are no further questions at this time, so I would hand back for any closing remarks.
Volker Braun: Thank you, Moritz. And thank you to all in the call. We anticipated a somewhat longer Q&A session. I hope you have received the satisfying answers. If there’s anything left, please feel free to reach out. We are available still today and obviously in the coming days. Looking forward to the constant exchange of thoughts. Thanks a lot and speak soon.
Operator: Ladies and gentlemen, the conference is now concluded and you may disconnect. Thank you for joining and have a pleasant day. Goodbye.
