Krakow, November 9, 2022 – Selvita S.A. [WSE: SLV], one of the largest contract research organizations (CRO) in Europe, reported its financial results for Q3 2022*. The Group continues its dynamic growth, exceeding the assumptions of the ambitious development strategy for 2022-2025 presented in March this year.
- In Q3 2022, Selvita Group generated EUR 22.7 million in revenues, indicating a 33% increase y/y. EBITDA profit amounted to EUR 6.2 million and was 31% higher than in the corresponding period in 2021. The net profit reached EUR 3.3 million, i.e., 50% more than in the previous year. This means that the EBITDA profitability will be maintained above 27%, and the net profitability will increase from 12.8% to 14.5% y/y.
- In Q1-Q3 2022, the Group generated EUR 65.6 million in revenues, which means an increase of 38% y/y. The EBITDA profit in this period was EUR 18.3 million and was 48% higher than in the previous year. Net profit amounted to EUR 10.3 million (an increase of 68% y/y). Thus, the EBITDA profitability in Q1-Q3 2022 increased from 25.9% to 27.9%, and the net profitability from 12.9% to 15.8% y/y.
- The Group’s backlog for 2022 exceeds EUR 83.1 million (as of 06/11/2022) and is 31% higher than the value reported a year earlier (as of 18/11/2021).
– We are happy to say that we are continuing our dynamic growth. The level of revenues generated in the first three quarters of 2022 was almost equal to the revenues generated in the whole of 2021, and what is worth noting is that the second half of last year constitutes a fairly high base for us. We also manage to maintain high profitability at all levels. Backlog for 2022 is approaching currently EUR 85 million, which shows that despite the demanding environment, we are pretty effective in resisting macro-economic factors – says Bogusław Sieczkowski, co-founder and Chief Executive Officer at Selvita.
In the period of Q1-Q3 2022, research and development services provided by Selvita generated EUR 56.3 million (an increase of 35% y/y) and accounted for 86% of the Group’s revenues. In Q3, the activities mentioned earlier generated EUR 19.3 million in revenues, indicating an increase of over 30% y/y. After nine months of 2022, EBITDA generated by research and development services exceeds EUR 17.2 million, which shows a rise of 54% y/y.
– We conduct very intensive business development activities. We have planned to participate in over 40 industry events between September and December this year. I am particularly pleased with the increasing sales of the regulatory research projects, which in the first three quarters of this year generated EUR 8.8 million in revenues, and the current backlog for this type of services amounts to over EUR 10.5 million, i.e., 57% more than a year earlier – comments Milosz Gruca, Vice President of the Management Board of Selvita and Chief Commercial Officer at Selvita.
The bioinformatics segment, i.e., Ardigen, generated EUR 7.4 million in external revenues in Q1-Q3 2022, which indicates a 60% increase y/y (over EUR 2.8 million in revenues in Q3 alone, i.e., 58% higher y/y). The EBITDA profit for this segment amounted to EUR 1.2 million at the end of Q3, and due to the Company’s intensive investments, it was at a level similar to last year’s. The bioinformatics backlog currently amounts to EUR 9.8 million, indicating an increase of 53% compared to the same period in 2021.
– Ardigen invests extensively in research and development, which is associated with increased expenses. However, the Company is fully profitable and finances itself. In the third quarter, Ardigen joined the “JUMP-Cell Painting Consortium” alongside companies such as Amgen, Astra Zeneca, Bayer, Eisai, Merck, Pfizer, and Takeda. Together, we create the world’s most extensive set of imaging data characterizing phenotypic cell changes caused by the activity of small molecule compounds. Joining the consortium will strengthen our credibility and recognition and significantly support our research work, says Janusz Homa, co-founder and Chief Executive Officer at Ardigen.
In the coming months, Selvita plans to complete the construction of its first laboratory building within the planned Selvita Research Center, which will allow adding additional 250 workplaces for scientists.
– We remain on track to launch the first of our Selvita Research Centre buildings in the first quarter of 2023. In the coming year, we also plan to commence the construction of a second similar building. We have acquired a plot of land that allows for the construction of four such buildings, where a total of over 1 000 workplaces will be created. We are also continuously looking for solutions that would allow us to increase the laboratory space in Poznan and Zagreb – adds Mirosława Zydron, Chief Operating Officer and Member of the Management Board at Selvita.
Implementation of the development strategy 2022-2025
At the end of Q1 2022, Selvita, having achieved the strategic goals set for the end of 2023 one year ahead, announced an updated development strategy for 2022-2025. During this period, the Company plans to triple its sales revenues (up to EUR 200 million) while maintaining high profitability. The Company will implement its strategy through organic growth and acquisitions. The implementation of the planned investments intends to allow Selvita to become the leading global preclinical CRO.
The Selvita Group Development Strategy for 2022-2025 is based on three key pillars:
- Comprehensive drug discovery and development offer – supplementing the drug discovery offer and building the drug development segment
- Focus on high-value services for the client – specialization in selected therapeutic areas and development of unique competencies
- Development of the Group’s operations in the largest markets in the United States and Great Britain – increasing teams and potential new locations for laboratories
In the area of acquisitions, in 2022-2025, Selvita intends to acquire at least two preclinical CROs in Europe or North America, providing services complementary to the Company’s offer or enabling the expansion of the scale of its operations.
– The financial results for 2022 reported to date show that the Company is currently organically growing faster than planned. At the same time, we are in numerous talks with selected potential acquisition targets, and we have every reason to believe that we are also heading in the right direction in this respect – sums up Bogusław Sieczkowski.
*The results do not include the accounting (non-cash) costs of the employee share incentive program.
Backlog as of November 6, 2022.
**All percentages (%) were calculated based on PLN currency.