Evolva updates financial outlook amid COVID-19 struggles
05 Nov 2020 --- Evolva has updated its 2020 financial outlook as COVID-19 has deteriorated the business environment. The pandemic impacted some of Evolva’s contract manufacturing organizations, which are continuing to face delays.
As product-related revenues have become the main driver to the top line, the company has encountered “extraordinary expenses” from COVID-19 headwinds.
EBITDA loss for the full-year will run above prior-year level, coming in at around CHF 16 to 17 million (US$17.7 to 18.8 million).
Increased cash outflows
Meanwhile, cash outflows will be above the 2019 level. This is due to COVID-19 impacts, as well as the scale-up of additional production capacities and the launch of a major new product by year-end.
Another factor is promoting novel ingredient nootkatone in the subsequent registration process for end-user products with the US Environmental Protection Agency (EPA).
However, Evolva expects to grow its product revenues at the same rate as in previous years, in line with the initial guidance for 2020.
In addition to the current backlog, customers have continued to place orders, some of them meanwhile reaching well into 2021.
In July, an Evolva spokesperson told NutritionInsight that the cosmetics and toiletries market was experiencing a sharp drop in sales in the US.
In Evolva’s half-year results, the company was hopeful that it would be able to compensate for shortfalls in the first half of 2020 in the following half.
The full-year results for 2020 will be announced on February 25, 2021.
There is progress with Evolva’s nootkatone, which is a compound found in plants such as grapefruit.
Resveratrol demand on the rise
Evolva’s product demand continued to grow significantly over the last few months, except for ingredients vastly used in market segments currently challenged by the pandemic, such as beverages and fine fragrances.
However, the company notes that demand for resveratrol continues to rise significantly.
Additionally, Evolva’s performance in Health Ingredients has been resilient, with the sector seeing increased customer demand and record order levels.
According to the company, this is amplified by the rising focus on proactive health care, also driven by the COVID-19 situation.
Consequently, the order backlog continues to grow.
New products afoot
Evolva also spotlights that there has been good progress in scaling up its new ingredient, EVE-X157/Z4. This will ensure supply for selected customers in 2021.
EVE-X157/Z will have applications in health ingredients, flavor and fragrances. More information on this launch has not yet been disclosed.
There is also progress with Evolva’s nootkatone, which is a compound found in organisms like grapefruit.
Following nootkatone’s registration as a novel active ingredient in the US, Evolva is aiding customers in the launches of the first end-user products. This includes discussions on supply volumes for 2021/22.
“Now that all the commercial building blocks are in place, and customer demand is growing fast, strengthening of manufacturing and supply chain is a key part of our path forward,” says Oliver Walker, CEO of Evolva.
By Katherine Durrell
