Evotec provides update on financial impact of cyber-attack
Productivity was affected throughout the entire second quarter
Evotec SE announced that it is adjusting its guidance for the fiscal year 2023 due to the impact of the cyber-attack.
For the current fiscal year, the company now expects Group revenues in the range of € 750 – 790 m (previously € 820 – 840 m); unpartnered R&D is expected in a range of € 60 – 70 m (previously € 70 – 80 m); and the adjusted EBITDA is expected to reach € 60 – 80 m (previously € 115 – 130 m).
A strong start to the year with revenues exceeding € 210 m (unreviewed) and more than 30% revenue growth in the first quarter of 2023 proves that underlying business dynamics in a challenging environment are intact.
However, due to the discovery of a criminal cyber-attack on 6 April 2023, productivity was affected throughout the entire second quarter. In response to the criminal cyber-attack, Evotec took immediate action to contain and remediate the attack by taking its external-facing systems offline. This was deemed necessary to protect all the Company’s partners and stakeholders and Evotec could ensure that integrity of scientific data remained unaffected. The Company re-started operations at the end of April with productivity reaching approx. 50% in May and more than 80% in June.
Subject to further analysis and the review by the auditor, revenues in the first six months are expected to exceed € 370 m. Due the nature of Evotec’s collaborations with often long-term contracts, parts of missed revenues of at least € 70 m (net) – but not all – are expected to be recoverable still in H2 2023. Overall market circumstances are not expected to improve for the remainder of 2023.
Net costs directly related to managing the impact of the attack in Q2, which are one-off costs in nature, amount to approx. € 25 m.
The management of Evotec has decided to take value protection measures to mitigate effects of the cyber-attack and to build a better, safer, and even more efficient organisation for the future. Also, a faster than initially anticipated closing of the technology partnership with Sandoz as well as the substantial expansions and extensions of two collaborations with BMS (neurodegeneration and targeted protein degradation) should help mitigate parts of the cyber-attack-related effects.
While one-off items exceeding € 90 m are affecting the outlook for 2023, additional optimisation measures are set to unfold their positive impact over to course of 2024 and beyond. Action Plan 2025 stays unchanged, targeting revenues of more than € 1 bn and an adjusted EBITDA of more than € 300 m.
Dr Werner Lanthaler, Chief Executive Officer of Evotec, commented: “The lower productivity throughout the second quarter significantly weighed on our financial results for the first half-year of 2023. Building on the strong starting position of excellent Q1 results, we assess all options and intend to ambitiously accelerate business recovery and resume the momentum towards our mission of together for medicines that matter for patients worldwide.”
Other news from the department business & finance
Get the life science industry in your inbox
From now on, don't miss a thing: Our newsletter for biotechnology, pharma and life sciences brings you up to date every Tuesday and Thursday. The latest industry news, product highlights and innovations - compact and easy to understand in your inbox. Researched by us so you don't have to.
