Last close As at 05/08/2026
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Research: Consumer
Evolva has undergone a transformation from an R&D-driven enterprise towards a commercial company with a product-based revenue model. It recently received US EPA registration for nootkatone, and H120 witnessed a record order intake driven by Health Ingredients. COVID-19 caused delays at its contract manufacturers and hence only part of these record orders could be realised in H1, although much of these volumes should be shipped in H2. EBITDA was also adversely affected by lower sales in Flavours & Fragrances (F&F), due to the pandemic. The company is seeing early signs of recovery and has reiterated its commitment to cash break-even by FY23.
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Evolva |
Resilience
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Food & beverages |
Deutsches Eigenkapitalforum 2020
22 October 2020 |
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Evolva is a research client of Edison Investment Research Limited |
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Evolva has undergone a transformation from an R&D-driven enterprise towards a commercial company with a product-based revenue model. It recently received US EPA registration for nootkatone, and H120 witnessed a record order intake driven by Health Ingredients. COVID-19 caused delays at its contract manufacturers and hence only part of these record orders could be realised in H1, although much of these volumes should be shipped in H2. EBITDA was also adversely affected by lower sales in Flavours & Fragrances (F&F), due to the pandemic. The company is seeing early signs of recovery and has reiterated its commitment to cash break-even by FY23.
Strong growth despite COVID-19 effects
As expected, the COVID-19 pandemic has predominantly affected the F&F business with softened demand. Total revenue was down 38% to CHF4.0m during H120. Product-related revenue was up 27% to CHF3.8m and R&D revenue was down 94% to CHF0.2m, as expected, following the completion of the US Biomedical Advanced Research and Development Authority contract. During the period, contract manufacturers were unable to deliver orders worth c CHF2.4m, but management expects to be able to make up for these delays during H2. Evolva plans to launch a new product – currently known as EVE-X157/Z4 – in the F&F and Health Ingredients space before the end of the year.
Commitment to cash break-even by FY23
Evolva’s FY20 guidance is for product-related revenue to double over the prior year. The guidance was raised at the time of H1 results, as previous guidance was for product-related revenue growth to be consistent with last year (+59%). EBITDA guidance was reduced slightly due to the extra costs associated with the pandemic. Current guidance is for cash burn to be above the 2019 level (previously expected to be in line). The commitment to achieve cash break-even by 2023 was reiterated. We forecast increasing inventory levels in FY20–22 ahead of product launches, and hence expect the company to exhaust its cash reserves during FY22.
Valuation: DCF of CHF0.38/share
We continue to value Evolva on a DCF basis with a 25-year model, assuming cash break-even in FY23. As a reminder, nootkatone contributes c 50% to our CHF0.38/share fair value for Evolva, with most of this coming from its use in pest control.
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Edison estimates
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. Source: Edison Investment Research |
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Research: TMT
GB Group (GBG) expects to report underlying revenue growth of 10% y-o-y for H121, with a one-off contract in the US making a material contribution to revenues. Combined with strict cost control this resulted in adjusted operating profit growth of 26% y-o-y and a £32m h-o-h reduction in net debt. With management guidance for revenue well ahead of our and consensus forecasts for FY21, we have upgraded our revenue and EPS forecasts for FY21–23. Despite COVID-19 related pressure on new business in the short-term, we view GBG as well placed to benefit from the accelerated shift in the digitalisation of business processes.