EvoNext Holdings S.A.

Evolva reported first-half 2023 total revenue of CHF4.5 million and product-related revenue of CHF4.3 million, which management said was 11% growth excluding Vanillin and EverSweet. Gross contribution margin rose to 30.4% from 10.9% last year, while adjusted EBITDA improved by CHF1.2 million to negative CHF6.3 million. Cash ended the period at CHF4.4 million, with CHF5.2 million of available financing lines. For 2023, management guided to revenue in the range of lower double-digit millions of Swiss francs, with further EBITDA and cash flow improvement expected. They also said they expect slightly lower revenues around up to CHF45 million in the midterm, at a higher profitability level than in the prior midterm plan, and still target EBITDA and cash breakeven in 2025 if going concern is secured.

Christian Wichert emphasized that Evolva was “well on track” operationally, citing profitable growth in Valencene, Nootkatone and Resveratrol, a stronger sales pipeline, and new product and market launches including Natural Nootkatone, Juneo, Larally and a partnership with Grace Breeding. His tone was mixed: confident about the business progress, but frank that the Nice & Green financing situation forced strict cash management, activity postponements into 2024, and a strategic review that is consuming management time. He repeatedly pointed to the company’s long-term potential while stressing that securing a solution by year-end is critical.

Carsten Daweritz focused on the financial improvement in revenue mix, profitability and liquidity. He said gross contribution turned positive at CHF1.3 million, recurring operational expenses fell by CHF2.1 million, and free cash flow from operating activities improved by CHF10.7 million versus the first half of last year, helped by lower working capital and lower capex. He also detailed a CHF68.3 million impairment charge, including CHF40 million of goodwill write-off, and said total assets fell from CHF131 million to CHF53 million; the weighted average cost of capital used in the impairment test rose to 23.9% from 13.2% in December 2022.

Analysts focused on cash usage, the Nice & Green financing arrangement, and whether Vanillin revenue would be recognized in 2023. Management said the second half would require more cash than the first half because of capex for the new CMO contract, estimating around CHF6 million to CHF7 million, and explained that additional financing depends on share sales and a market-cap threshold. On Vanillin, Christian Wichert said the business was moved into 2024, likely first quarter, both to preserve cash and because the new CMO should deliver better economics; he also said customers were generally understanding and supportive despite the disruption.