Selvita S.A. – (WSE: SLV) – one of the largest preclinical contract research organizations in Europe, continues its development in all business segments in the first quarter of 2022.
The increase in the scale of operations along with high margins
In the first quarter of 2022, Selvita Group reported revenues in the amount of EUR 20.5 million, indicating an increase of 35% y/y. EBITDA and net profit (excluding the impact of the non-cash incentive program) amounted to EUR 6.0 million and EUR 3.6 million, respectively, which translates into an increase of 56% and 119%. Margins grew in line with the expanding scale of the business. The EBITDA margin increased from 25.2% in the previous year to 29.1% in 2022, while the net profit margin increased from 10.9% to 17.7%.
Services provided in Poland closed the first quarter of 2022 with revenues of EUR 9.8 million, an increase of 43% y/y. EBITDA in the reporting period amounted to EUR 2.9 million, achieving the annual growth dynamics of 110%. The segment also significantly improved the EBITDA margin, which increased from 19.0% in the previous year to 28.1% in 2022. A significant increase in the revenues in the area of regulatory research was noted, from EUR 1.5 million achieved in in the first quarter of 2021, to EUR 2.7 million in 2022 (+ 83% y/y).
The segment of services provided in Croatia increased the commercial revenues generated by 22% y/y, reaching EUR 7.8 million. EBITDA in the analyzed period amounted to EUR 2.4 million, showing an increase of 21% y/y. The margin on the services remained at a similar level, 31.3% in Q1 2021 vs. 31.1% in Q1 2022.
In the reporting period, Ardigen generated EUR 2.2 million in commercial revenues, compared to EUR 1.4 million last year, which translated into an improvement of 60% y / y. EBITDA increased from EUR 0.4 million to EUR 0.6 million (+44% y/y), and the EBITDA margin was 24.3%, which means a minimal decrease compared to Q1 2021 (-2 pp).
“I am very pleased with the results achieved. The high pace of growth in all our business segments, as well as the improvement in EBITDA profitability and net profit, show that dynamic development can go hand in hand with good margins. This is the result of the work of our scientists who strive to provide our clients with high quality services every day. At Selvita, we believe that people are the most important asset, and our financial results reflect this,” comments Bogusław Sieczkowski, Chief Executive Officer at Selvita S.A.
The backlog of Selvita Group also grew dynamically in the reported period, and currently amounts to EUR 58.8 million, indicating an increase of 38% y/y. In the area of drug discovery, backlog reached EUR 44.6 million, increasing by 30% as compared to the same period previous year. The regulatory research segment has been growing even faster, with backlog amounting to EUR 6.2 million (+ 111% y/y). Ardigen reported EUR 6.5 million of backlog, almost EUR 2.0 million more than in 2021.
“The high value of contracted orders allows us to be optimistic about the entire year 2022,” adds Sieczkowski.
New Development Strategy 2022 – 2025
“During the first quarter of this year, we worked intensively on our new strategy. Rapid development of the Group over the last years meant that our previous, four-year strategy, was implemented in a little over two years. As part of the assumptions of the new development plan, we plan to grow three times by 2025, and achieve annual revenues of EUR 200 million, while maintaining a stable, high margin. We are convinced that the implementation of these goals will allow us to become a global, preclinical CRO, offering clients an increasingly comprehensive range of services,” said Sieczkowski.
In the first months of 2022, Selvita made several operational steps supporting further development of the Group. Integration of services in the area of drug discovery, integration of sales and business development, as well as creation of a department supporting the management of operational activities, investments, and infrastructure, constitute a strong foundation for the implementation of the assumptions of the new strategy for 2022-2025.
