Evolva capitalizes on megatrends as revenues jump 31%, reaching US$10.6M

11 Mar 2022 --- Healthy living trends are spurring demand for functional ingredients and nature-based supplements, according to Evolva, which reports a 46% growth in its health ingredients segment for 2021. The company’s full-year revenue for 2021 reached CHF 9.9 million (US$10.6 million), up 31% from the previous year.

Product-related revenues grew 40% from CHF 6.6 million (US$ 7.1 million) to CHF 9.1 million (US$ 9.8 million), with all business segments contributing to the growth. Specifically, Flavors & Fragrances grew 48% supported by the ongoing trend for more natural ingredients.

Its core business segments are Flavors & Fragrance and Health Ingredients, while its developing business segment is Health Protection. 

Nonetheless, the company also reports gross profits in negative figures at CHF -9.3 million (US$10 million) while adjusted EBITDA resulted in a negative CHF -22.6 million (US$24.3 million). 

“While we achieved a 40% growth of product-related revenues in 2021, the momentum in the second half-year remained subdued, which contributed to a disappointing operating profitability. On the positive side, we were able to optimize our production setup as well as our network with manufacturing partners,” says Christian Wichert, CEO of Evolva.

“This lays the foundation for the required positive gross profit and ultimately for positive cashflows.”Investments to strengthen operations capabilities negatively impacted profitability and cash flow in 2021.

Blockbusters and NPD
Evolva’s Resveratrol item has spurred growth in the Health Ingredients segment, the company notes. It has already been spotlighted as “the next big thing” where synergies are concerned.

“Looking at the resveratrol market, historic applications on heart health, blood glucose control, as well as joint and bone health remain blockbusters. But in 2021, we also clearly saw a substantial increase of new product developments focusing on weight management, beauty from within, brain function and mental performance,” Evolva underscores. 

Meanwhile, COVID-19 has stimulated more interest in healthy nutrition, the company notes.

“In many ways, it seems that the pandemic has been rather an accelerator of already emerging trends than a generator. The perception of health has evolved and has become more holistic. Consumers remain extremely attentive to their physical health, but they are increasingly also alert to their mental and emotional well-being.”

The company also describes a substantial increase in demand for functional ingredients in the past two years. It notes the importance of clinical backing for its consumers is key for credibility, tapping into premiumization trends.

Megatrends spurring biotech transformation
In its presentation of final results, Evolva highlights it strengthened operations capabilities with higher capacity and delivery quality at lower costs during 2021. 

The company also notes its continuing transformation to a commercial-stage biotech company, where it has three megatrends at its core: health, wellness and sustainability. 

These are linked to the company’s R&D and product revenues which Evolva is capitalizing on, it notes. 

Market recovery
A key contributor to the Flavor & Fragrances segment lies in Nootkatone 98, one of the company’s flagship ingredients, the financial report underlines. 

“The revenues of our flavor and fragrances segment had gained momentum during 2021. We have observed a market recovery in 2021 from COVID-19. The momentum could be sustained in the second half of the year with new client wins and new product introductions.”

Looking ahead, Evolva outlines it expects ongoing growing demand for its Flavors & Fragrances as well as Health Ingredients products. 

“Despite recent and other persisting geopolitical uncertainties and under the assumption of a fading-out pandemic, Evolva is expecting to increase revenues by 50% at constant currencies to CHF 15 million (US$16 million).”

By Andria Kades