Evolva has appointed Christian Wichert as its new CEO to accelerate growth and lead the company during its next phase. Over the last 18 months Evolva’s manufacturing network has expanded significantly, as the company scales up its products and transitions to a product-based revenue model. Christian has broad international experience spanning the chemicals/life sciences and consumer goods sectors. He is taking over immediately and Oliver Walker, the incumbent CEO, will be available to support Evolva in an advisory role for 12 months. The unexpected announcement comes as the company is in the process of finding a successor for its CFO, Carsten Däweritz, who will step down from his role at the end of May.
Share price performance
Business description
Evolva is a Swiss biotech company focused on the research, development and commercialisation of ingredients based on nature. It has leading businesses in flavours and fragrances, health ingredients and health protection.
Maintain estimates, update expected with FY results
We maintain our estimates, which are in line with existing management guidance, although we expect the new CEO will update the market with his outlook on 10 March, when the FY21 results are due. We note that current guidance and targets were set by Christian Wichert’s predecessor, Oliver Walker. The long-term guidance of reaching cash break-even by FY23 was set as a target at the start of 2019 (with the announcement of the FY18 results). Reaching cash break-even remains a key focus for investors as Evolva moves from positive revenues to full profitability and, hence, becomes a viable long-term investment for a wider pool of investors.
Valuation: Fair value of CHF0.29/share
We continue to value Evolva on a discounted cash-flow basis with a 25-year model, assuming cash break-even in FY23, in line with management guidance. As a reminder, nootkatone contributes c 50% of our fair value for Evolva, with most of this coming from its use in pest control.