Quarterly Statement 9M 2026 - EVOTEC SE

Good morning, good afternoon and welcome to today's webcast and conference call. My name is Sarah Harkin and I'm the Head of Corporate Communications and Investor Relations at Evotech. Please allow me to introduce today's speakers. Joining me on the call are Christian Wojciechowski, Chief Executive Officer of Evotec and Claire Hinshelwood, our Chief Financial Officer. Please note that this call is being webcast live and will be archived in the event calendar on our website. Before we begin, a few forward-looking statements. The discussion and responses to your questions on this call reflect management's view as of today, Thursday, November 5th, 2026. During this call, we will make statements and provide responses that state our intentions, beliefs, expectations, or projections regarding the future. These statements constitute forward- looking statements within the meaning of applicable securities laws. They are subject to risks and uncertainties and actual results may differ materially from those expressed or implied. Evotech disclaims any intention or obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances. For further information regarding these risks and uncertainities, please refer to our public filings and disclosures. With this, let me hand over the call to Christian. Thank you, Sarah. Good morning and good afternoon to everyone. Thank you for joining today's call. The third quarter of 2026 showed encouraging progress after a challenging first half. We're beginning to see the different pieces of our transformation come together and translate into improved business performance. Group revenues in Q3 were above both Q1 and Q2, mainly driven by stronger commercial execution in the DMPD-based business. At the same time, lower costs brought adjusted group EODA close to break-even. The nine-month results still reflect the weaker first half, including slower sales-to-revenue conversion in DMPT and the Sandoz license contribution in JEP in the first quarter of 2025. Our commercial ramp-up in DMPD is gaining traction. Net sales in the base business were up 24% for the first nine months, year over year. In this shorter cycle of business, we're now beginning to see stronger commercial activity convert into revenue growth. In just Avotek Biologics, we're excited to confirm that Vertex Pharmaceuticals has selected us for the commercial manufacturing of POV-Tasecept at our GPOD Redmond facility. This is an important step for JEP as we advance our continuous manufacturing platform toward commercial scale readiness. Alongside this progress, Horizon Execution is well on track. Our target is to deliver approximately 75 million euros in annual run rate savings by the end of 2027. For this year we plan to deliver 20 to 30 percent of this target. By the end of September we had already delivered more than 20 percent of the target putting us ahead of plan. Footprint consolidation and workforce measures are starting to deliver tangible savings while our focus on utilization and operational efficiency is supporting improved profitability. These developments give us greater confidence in the direction of the business. We reaffirm our full year 2026 guidance and based on our current visibility expect revenue and adjusted ABDA to land toward the upper end of their respective ranges. later in the call we will provide greater detail on our mid-range framework through 2030 this will give you better visibility into the business and a clearer view of the path forward including how we expect the business mix to evolve and support a structurally stronger earnings profile but before we move into the detailed review of the third quarter and first nine month I'd like to highlight highlight an important transition in our scientific leadership. Science is at the core of Evotech. And I'm therefore very pleased to introduce Dr. Joanna Hobrook. Joanna joined Evotec as chief scientific officer and member of the management board on November 1st. She succeeded Cord Dorman, who left Evoteck at the end of September. I'd like to take the opportunity to thank Cord for his many contributions over more than 16 years. He played an important role in building the scientific capabilities and innovation culture Evotech is known for. We're excited to have attracted a scientific leader of Joanna's caliber to Evotec. Joanna brings more than 25 years of international experience across pharma, biotech, and academia. Recently, she held senior scientific leadership roles at Novo Nordisk. Previously, she served as chief scientific officer at Biomodel. Joanna combines deep scientific expertise with a strong track record in applying new technologies and data-driven approaches to drug discovery and development. Her experience across different scientific environments, organizational structures, and cultures adds a broad perspective that will be particularly valuable as we continue to evolve Evotech. As Chief Scientific Officer, Joanna's focus will be clear to strengthen our scientific profile and translate advances in data science, AI, and novel technologies into greater value for customers and partners. On slide six, let me continue with an overview of recent progress across selected partnerships. The most important development is in Just Iverdek Biologics, where we confirm that Vertex Pharmaceuticals has selected JEP for the commercial manufacturing of povitacicept, Vertex's investigational biologic candidate for a serious kidney disease. Alongside this exciting progress, we're adding a third manufacturing train at our J-Port Redmond facility next year, expanding manufacturing capacity for the next phase of JEP's growth. The additional capacity also positions us well to meet our manufacturing and supply commitments to Vertex. Furthermore, in our collaboration with the Department of War, JEP advanced the Orto-Pox antibody program into a phase one clinical trial, having progressed the program from sequence to clinical supply. In DMPD, we continue to broaden our partnered innovation activities. The first candidate from our sleep disorder discovery collaboration with Jazz Pharmaceuticals has advanced into phase one clinical trials. Further, new and recent collaborations span next-generation therapeutic oncology approaches with Plektronic and AI-enabled drug discovery with Odyssey Therapeutics. Let me now hand the call over to Claire for a review of the Q3 and first nine-month 2026 financials. Thank you, Christian, and good morning and good afternoon to everyone. Looking at our income statement on slide seven, group revenues for the third quarter of 2026 amounted to €164.9 million, broadly stable compared with €163.9 million in the prior year period. At constant exchange rates, Q3 group revenues amounted €165.9 in the previous year period, and Q3 exchange rates amounted to €116.4.2 million, compared to €160.3.0 million in Q3 2025. The quarter benefited from stronger performance in the DPD-based business, with the improvement particularly visible in Discovery and Cyprotex. This helped offset continued timing and conversion effects in other segments. For the first nine months, group revenues totaled €465 million, reflecting a 13.1% decrease year-on-year from €535.1 million. euros. At constant exchange rates, group revenues declined by 10.8% to 477.4 million euros, compared with 535.1 million euros in 2025. The nine-month comparison reflects a weaker first half of the year. D&PD remained affected by the slower sales-to-revenue conversion, while GEB was impacted by delayed programme activities and the $25 million Sandoz licence sale recognised in Q1 2025. Looking at the segments, DNPD revenues in Q3 were €120.1 million, down only 2.3% or €2.8 million from €122.9 million in the prior year quarter. At constant currencies, D&PD revenues totalled €119.6 million. For the first nine months, D & PD generated €348 million, representing an 11.2% decrease from €391.9 million in the prior year period. At constant exchange rates, DMPD revenues amounted to €355.5 million. Just Ebotite Biologics delivered Q3 revenues of €44.8 million, an increase of 9.4% from €41 million in the prior year quarter. At constant change rates, revenues amounting to €446 million. euros. For the first nine months, GEB revenue totalled €117.1 million, representing an 18.2% decrease from €143.2 million in 2025. The year-on-year decrease was primarily driven by the non-recurring Sandoz licence sale last year and delayed programme activities. At constant exchange rates revenues amounted to 121.9 million euros r d expenses decreased to 29.7 million euros in the first nine months or 6.4 percent of group revenue compared with 42.3 million euros or 7.9 in the prior year period turning to profitability adjusted group ebitda improved significantly in Q3 to minus €1.6 million from minus €15 million in the prior year quarter, bringing the group close to breakeven. The improvement was broad-based with significantly better Q3 adjusted EBITDA performance in both DNPD and GEB, supported by improved revenue contribution and a lower cost base. At constant exchange rates, adjusted EBIDDA was minus 1.7 million euros for the first nine months adjusted group ebitda decreased to minus 44.3 million euros from minus 16.9 million euros in 2025. the results primarily reflects the lower nine months revenue base partially offset by lower cost of revenues at constant exchange rates adjusted EBITDA was minus €39.1 million. At segment level, DNPD adjusted EBIDDA improved to minus €1 million in Q3 from minus €9.5 million in the prior year quarter. At constant exchange rates, adjusted EBDA amounted to minus 1.4 million euros. DNPD adjusted EBITDA for the first nine months decreased to minus 25.5 million euros compared with minus 18.8 million euros in the first 9 months of 2025. GEB adjusted EBIDDA also improved significantly in the third quarter to minus 0.6 million euros from minus 5.5m euros in Q3 2025. At constant exchange rates, adjusted EBITDA totals minus €0.3 million. For the first nine months, adjusted EBITA was minus €18.8 million in 2026, compared with plus €1.9 million in the prior year period, which included the Sandoz license sale. At constant exchange rates, nine-month adjusted EBita totals €19.3 billion. euros turning to liquidity under balance sheet on slide eight total liquidity as of september 30th 2026 stood at 401 million euros representing a quarterly decrease of 65 million euros compared with 466 million euros at the end of the second quarter of 2026. we continue to operate from a solid balance sheet looking ahead rigorous cash flow management remains a key priority with a continued focus on optimizing working capital and preserving the optionality in our liquidity structure our capital discipline is reflected in the substantial reduction in capex from the elevated levels of recent years which we reduced to our goal of under 10 percent of revenue This demonstrates our selective investment approach, focusing on areas where we see the strongest strategic relevance and value creation potential, while continuing the shift towards the more capital-efficient operating model established under Horizon. One area of selective high-value investment in 2027 will be just EvoTech biologics. As already mentioned, we are investing in the third manufacturing train as part of the next phase of growth at our J-POD Redmond facility. Initial CapEx has already been incurred in 2026, with the remainder of the investment expected in 2027. That said, we expect CapEx for 2027 to remain broadly in line with 2026. Within that envelope, the third train will represent our largest individual investment next year. The investment will expand our manufacturing capacity while benefiting from the lower capital intensity of our continuous manufacturing technology. The installation will require a planned temporary pause in manufacturing activity or dreadment. The associated near-term impact on 27 manufacturing revenues is already reflected within our mid-range plan, which Christian will discuss later in this presentation. And with that, let me hand the call back to Christian. Thank you, Claire. Turning to commercial execution, over the past several quarters, we have shared leading commercial indicators to provide greater visibility into the development of our DMPD business. As shown on slide 9, these indicators continued to strengthen the first nine months of 2026. In the DMPD-based business, comprising standalone and integrated programs, net sales increased by 24% year-on-year, exceeding the respective prior year period in each of the first three quarters of 2027. The number of inbound leads increased by more than 45%, while proposal activity remained well above prior year levels, and proposal turnaround time improved by approximately 20%. Our DMPD customer base also increased by approximately 10%, compared with the first nine months of 2025. Importantly, we're now beginning to see stronger commercial activity translate into revenue in the shorter cycle-based business. Net sales generated during the first half are beginning to convert, with a Q3 revenue improvement particularly visible in discovery and supertechs. We are also seeing a healthy pipeline of new strategic partnership opportunities. 20 opportunities currently represent approximately 1 billion euro in total potential deal value our priority now is clear maintain this momentum and translate it into sustainable growth turning to horizon on slide 10 the transformation is making strong progress and remains ahead of plan the structural measures are increasingly translating into tangible financial and operational results. Let me start with a financial impact. Our target is approximately 75 million euro in run rate savings by the end of 2027. For 26, we plan to deliver 20 to 30 percent of that target. By the end OF September, Horizon had already delivered more than 20 percent, putting us ahead of plan. These savings are visible across our cost base, including Cox and SG&A. Approximately half of the announced workforce reductions have been implemented, representing around 400 of the planned 800 positions. At the same time, footprint consolidation is on track. We expect three of the four planned site closures to be completed by year end, with a fourth to follow in the first quarter of 2027. Alongside these efficiency measures, we continue to reshape our scientific footprint around fewer, more focused areas of scientific excellence. The consolidation and transfer of capabilities across omics, infectious diseases, and protein science are well underway. Horizon is moving from implementation into tangible delivery, and we remain on track to deliver the full structural benefit of the program by the end of 2027. Moving from our Q3 and first nine-month 2026 perspective to our full-year outlook. On slide 11, we are reaffirming the guidance we provided on July 13, 2026. We expect group revenues on the range of 570 to 610 million euros on a reported basis and 595 to 635 million euros at constant exchange rates. Adjusted Group ABDA is expected to land between minus 105 and minus 70 million euros or between minus 90 and minus 60 million euros, at constant the exchange rates based on our performance through the first nine months and our current visibility for the remainder of the year we expect both revenue and adjusted ABDA to finish toward the upper end of their respective guidance ranges. This reflects the improved performance we saw in the third quarter while the assumptions underlying our July guidance update remain unchanged. Let me now zoom out one step further and, on slide 12, turn to our mid-range framework through 2030, which we first announced in March this year. Our ambition is to generate around €1 billion in group revenues by 2030, with potential for additional upside. We further expect to achieve an adjusted ABDE margin of 20% by the end of 2028, rising above 20% at the end 2030. As announced in our webcast on July 14, going forward we intend to provide greater transparency on how we expect to reach this ambition. In particular, we would like to provide a clearer view of our principal revenue streams and their underlying economics. The logic is similar across DMPD and JEP. Both segments have a base business, providing a growing and increasingly productive foundation. Additionally, both segments have revenue streams and profit pools on top of their base businesses derived from differentiated technology platforms and scientific innovation. In DMPD, the base business comprises our CRO services, including standalone and integrated programs. Here, we are serving end-to-end workflows across the full spectrum from target identification to IND. We expect this base business to contribute around 40% of revenue by 2030. Horizon and further productivity measures are expected to drive gross margin above 20%. On top of the base business, we will be extending our GMPD strategic partnership business. Those partnerships leverage our proprietary technology platforms and deep scientific expertise. They're expected to contribute another 20% of revenue by 2030 and offer attractive margin upside in excess of 15 percentage points versus the base business through milestone payments and royalty contributions. Given the more volatile nature of this business, we have taken a risk-adjusted approach in our outlook, which also does not include future royalty income until 2030. Successful scientific execution of our existing long-term partnership commitments or new partnerships can provide milestones and royalty income beyond these assumptions. We intend to provide more granular insight into how the two components of the DMPD business develop starting in 2027. In JEP, the base business is our CDMO offering, which is an engine for early and late stage biologics. We've already demonstrated our ability to grow through our development in clinical manufacturing capabilities. Extension of our third train in Redmond and entering commercial manufacturing is expected to provide the basis for further growth. On top, licensing of our continuous manufacturing technology, including offerings such as J-Train, as scalable growth and higher margin income alongside partnership royalties. Overall, we expect the JEP business to contribute approximately 40% of revenue by 2030. The move into commercial manufacturing, together with the expansion of our licensing business, is expected to drive substantial margin expansion over time, with gross margin rising above 30%. Our 2030 ambition is about building a more balanced business with a structurally stronger earnings profile and a more transparent path to sustainable profitability. On slide 13, let me provide an overview of the drivers behind the 40-20-40 revenue mix in our 2030 mid-range framework. Starting with a DMPD-based business, we expect revenues to reach approximately 400 million euros by 2030, representing a CAGR of around 10%. Growth should be driven by the continued normalization and recovery of the early drug discovery market, stronger commercial execution, and our differentiated scientific and technology capabilities, including increased contribution of AI to drug discovery and development. Strategic partnerships and innovations sit on top of this base, but follow a different trajectory. The blue line shown here reflects our risk-adjusted planning assumptions and reaches approximately 200 million euros by 2030, representing a CAGR of around 5%. Given the volatile nature of this business, actual revenue development will not develop in a straight line. The timing and the progression of individual programs can result in periods above or below that trajectory, as illustrated by the wavy blue area around the risk-adjusted line. As discussed, the risk- adjusted trajectory deliberately takes a more balanced view. Full scientific achievement or expansion of existing programs, together with new strategic opportunities, can provide additional upside. Just EvoTech Biologics has a different growth profile. Greater visibility on future demand, including our commercial manufacturing commitment with Vertex has guided our decision to add a third manufacturing train at Redmond and expand capacity. As Claire discussed earlier, the installation will require a planned temporary pause in manufacturing activities in 2027, with the resulting near-term revenue impact already reflected in our plan. Once the additional capacity comes online, we expect growth to accelerate meaningfully, Higher utilization and increasing contributions from higher margin licensing income and future royalties are expected to drive revenue to approximately 400 million euros by 2030, representing a CAGR of around 20%. Taken together, these differentiated contributions provide a clear path towards the more balanced, scalable, and profitable business we're targeting for 2030. Before we move on to the Q&A session, I would like to briefly summarize today's key takeaways on slide 14. The third quarter gives us encouraging evidence that the business is moving in the right direction. Commercial execution is strengthening, and in the DMPD-based business, we're beginning to see stronger net sales translate into revenue. At the same time, improved profitability shows the impact of a lower cost base and better execution. Horizon is ahead of plan. Savings are increasingly visible. Structural measures are well advanced, and we expect to deliver the full program on time. In just Avidac Biologics, the Vertex Agreement marks an important step toward commercial manufacturing. Together with our planned capacity expansion, this provides a stronger foundation for the next phase of JEP's growth. We confirm our 2026 guidance and expect revenue and adjusted EBITDA toward the upper end of their respective ranges. Looking beyond 2026, we have also given you greater transparency into the structure and economics of our business. The clear distinction between the DMPD-based business, strategic partnerships, and JEP shows how different growth and margin profiles are expected to combine into a more balanced business and a structurally stronger earnings profile. To further improve understanding of our business, we plan to complement our regular reporting with selected virtual deep dives into key areas of the business over the coming months. providing greater insight into the capabilities, growth, drivers, and value potential. There's still work ahead, but the direction is clear. Stronger commercial execution, a more efficient cost base, and a more attractive business mix. With this, I would like to close the call and welcome your questions. Thank you. Our first question comes from Charles Weston from RBC. Please go ahead. hello thank you for taking the questions three if i can a near-term question first um could you disclose what milestones strategic milestones you received in q3 and what expectations might be for q4 um my longer term question is around uh the jeb business um specifically uh what gives you the confidence that that uh business can um you know more than double over the next uh well up to 2030 um particularly in light of uh the sando development uh revenues that will presumably have have become quite small by then and then my last one is more of a conceptual one um the current environment uh has got everyone very excited about ai you've obviously been invested in in the ai and data sets for a number of years so could you just uh give us some color on uh whether this positioning has um has led to any meaningful tangible leads thank you thank you charles and hello and um i'll start and see if claire wants to chip in as well on the mid on the milestones i understand you were talking about q3 and q4 this year if i'm correct that's right Yeah, so not in a meaningful amount, but Claire will further allude to that. And then on the JEP topic, confidence about 2030 in light of Sandoz. Well, I think we try to explain that when you look at the SandoZ profile, there were short, midterm and long term economic benefits of the deal. um we're now in the midterm phase 26 to 28 where we are doing the joint development work um thereafter basically the 10 molecules coming to market we're eligible to royalty payments so that is uh um obviously um uh something that is going to contribute as of 2029 2030 um to a certain amount uh not not peak values but to a certain amount but i think we also uh just alluded to the fact that we've lined up new customers and we're also quite confident uh with regard to the uh being ready for vertex which will obviously play an important role in our mid-range plan on the ai positioning absolutely Charles, it's also a contributor to revenue growth that we've seen in parts of our cyber techs and discovery business. We're actually doing business and generating work and revenues with quite a few of the drug discovery companies that have focused on AI. and we expect this to further continue if not even accelerate. Claire any further flavor on the milestone topic? Yeah so on the milestones in the third quarter Charles there's around about 30 million included and we would expect that to be quite a bit less in the fourth quarter and that's one of the drivers if you look at you know the year-to-date performance versus our guidance that we've given for the full year. That's why the third quarter was a bit stronger than what you would if you were to extrapolate that out for the full year so that's where we sit with the milestone impact and revenues. Thank you. If I could just clarify one point when you talk about that strategic milestone that is the payments from the strategic partners right but what about the the milestones from clinical development milestones where you don't have any associated work. Sorry, I wasn't clear, but that's what I was referring to. That was what you're referring to? So then there was none. What I refer to was ongoing work that we're working on at the moment. None in Q3 and likely to be none in Q4? Yes, that's correct. Thanks very much. The next question comes from Ramakant Swarnankapula from HCW, please go ahead. Thank you. Good afternoon, Christiane and Claire. One quick question, you know, you delivered Q3 adjusted rebate of negative 1.6 million, Yet, you know, the unchanged annual range implies a Q4 loss of roughly 26 to 61 million. So what specifically bridges that deterioration? You know, is it lower partnership or milestone contribution, utilization, manufacturing videos? What is impacting that? And which of these elements are actually temporary and, you now, we should not expect them to be seen in 2027? Thank you for the question. Maybe a general statement. Our profile quarter by quarter is not even. It's not a straight line. And that's something to keep in mind. We've seen Q3 being strong in terms of revenues, both in DMPD and in JEP. uh with regard to q4 uh we have a clear view on cost out we have a robust sales development perspective on dnpd there's still quite some dynamic in jeb when you think about the phasing of the work revenue recognition for sandals and and and also vertex uh that can impact the phacing uh and that's why we we stay confident uh to stay in the guidance and the upper range anything to add yeah i mean it's it's really the the same answer that i just gave to charles a second ago when you look at the q3 proportion of milestones uh impact both in revenue in terms of profitability and with that not repeating to the same magnitudes in q4 then that has an impact when you Look at the the quarter by quarter and movement and that's that's always as Christian said why we have such variability across the quarters and tend not to guide in that way but that's that's been considered as part of um when we've looked at the full year outlook and where we expect to land that that's clearly the consideration that we've taken to place there thank you for that one one one additional question this is on the vertex relationship. So for Povatacit at Redmond, what manufacturing validation or inspection or customer release steps are yet to be done? And when do you think the commercial supply would actually start contributing to your top line? And do you need to do any additional investments just to be ready? I think you did state something about you know expanding the facility there thanks for the question uh and first of all let me once more say that we're really excited about this opportunity i think it's reasonable to assume that as part of the preparation for the peduva date and vertex commented that they are planning to do this on the 30th of november so we've got what is it 25 working days that at this point in time inspections will have taken place and we are going the normal course of development here and we're very confident in our ability to support vertex and our partner to enter commercial manufacturing so um it's it's not a lot of time left until the purdue for date and that's why um you should not expect that there's a lot stuff still to be done The investment into the third train, obviously, it's not just related to Vertex, also lined up other customers, but it's really good to have here a strong anchor customer that will pick up that capacity going forward. Sorry, you had another question. Yeah, a quick one. So I know having Rui on board, you know, your EvoTech is expanding the use of AI in all aspects of operations. So at what point can you start publicly stating, you now, how much of operational excellence you're achieving because of the utility of AI tools? And, you know, in case you're looking at it internally, what metrics are you applying just to make sure that what you're doing with AI is actually benefiting your operations? Yeah, thanks for the question. And to be honest, our main, main focus when it comes to AI is to use it to accelerate drug discovery. Of course, there is also the component of using it for internal processes and productivity here, but the biggest lever is to accelerate drug discovery, and we have started to be more vocal around this. You've seen some announcements more recently where you see the impact of that, the JAS announcement. We're entering into phase one that has been supported by virtual screening and drug design, molecular dynamics. You've also seen it with the Odyssey announcement in autoimmune. that has been a combination of high-throughput wet lab plus machine learning analytics and a couple of others. So this is real. This is being applied at Avotech in order to do new partnerships, accelerate the drug discovery. The other side is actually to partner up with AI companies to improve the models. That's our main focus at this point in time. Thank you, Christian. Thanks for taking all my questions. The next question comes from Finn Schwerzler from Deutsche Bank. Please go ahead. Yes, hi, and thanks for taking my questions, I also have three. So first, if we can maybe go back to the ongoing contract negotiations that caused you to reduce your guidance in July. So back then you provided this rough split 40%, 45%, 15% with the reasons behind that. I was wondering, has your confidence or visibility of these volumes returning in 2027 changed by now? So asking for, are you more confident, less confident in either of these parts then the second question on jab as well so um i mean with the last jpod sale to sando you were talking a lot about becoming more acid light now and moving more towards licensing etc so is this now a pivot back in in strategy towards a more um yeah acid heavy business model and aside from the j train that you are building now will there be any other investments necessary to get to your midterm targets or is this pretty much the only larger one and then finally we've been waiting for the dnpd inflection so to say for a while now and with the base business now performing more strongly would you say this inflection is now here or are we still in the early innings would you say it's it's uh back to to full steam how would you describe that thank you thanks for the questions finn uh claire do you want to start with the first one maybe yeah so um thank you finn for the question if you remember um back in when we adjusted the guidance there were three elements to the adjustment that we made uh to the guidance part of that um was related to um our ability to our speed with which we were converting uh sales to revenue and that was where we said we would have um some delayed impact that we would see moving into 2027 um because we are now coming with our guidance at the top end end of the range then some of that is partly what's contributing to us being able to um meet the higher end of the guidance this year and the remainder of it then we we see that flowing through into 2027. On the strategic deals which was another uh significant part of the guidance adjustment uh you saw one of the slides that we shared that the the deal pipeline that we've got there um is around about a billion uh euros in terms of value with several of those deals reaching late maturity so again we remain extremely confident in the composition of the the pipeline that we've got the robustness of it and we're starting to see those deals maturing just as a reminder though when we did talk about the strategic deals we we didn't say that that would all move into 2027 but it would move into the outer years depending on the timing and the phasing of those deals and with depending on the structure and the way in which those deals ramped up so um just to to manage expectations that that was or just to remind that that wasn't a straight shift from one year um into the next and then the last part that was part of the guidance um adjustments was linked to an ambition that we had set ourselves around revenue conversion so that wasn't about lost sales or lost revenue or moving revenue that was really an ambition we had set ourselves which we were not able to at that point fully commit to and make so yes in a very long answer to say a bit of it is helping us meet the top end of guidance this year and yes we will see that moving into 2027 but not to assume that all of the strategic deals will land in 27 but over the period of the outer years, but still confident in our ability to land those. And Finn, on the JEP question and whether the investment into the third train is an indication of a pivot back to the old strategy, clear answer, no, that's not the case. We stick to our strategy. And you should also not think about an investment here in the order of magnitude of what you have seen in previous years in Toulouse or in Redmond. It's a small fraction of an investment. And at this point in time, we're not contemplating for this planning period until 2030 any further extension. uh this is the expansion that is required in order to fulfill the growth plans here from a manufacturing perspective and we feel totally comfortable with that so there is no change in strategy um you will also have us heard um speaking about the fact that the licensing play uh continues we're actively marketing j train j cho j media so all of that is still in in full swing on the inflection point um let me describe a little bit the connectivity between sales sales order book and then revenue so the commercial activities and how that converts into pnl impact And we always said 2026 is a transition year. It's fair to say from a sales and sales order dynamic perspective, probably 25 to early 26 was the trough. So we see positive dynamic here. But there's always a delay effect between order book and then revenues. When you think about the 25 revenue profile that was basically built on the order book generated between 23 and 24, 26 was then built between 24 and 25, 27 revenues will be built between 25 and 26 order book, roughly, roughly. And then obviously the devil is in the detail because it very much depends on how long these projects can actually last, whether it's high velocity, short cycled business or longer projects. But roughly, when you think about this concept, then you probably will appreciate 2025 being the trough. This certainly has impacted 26 revenues and will be washed out over time. and clearly that then indicates that it's reasonable to expect a rebound in the next couple of quarters also from a revenue perspective. When it comes to the BMS dynamic, we also explained that there was a substantial revenue decline between 23 to 26. The work orders have stabilized. We expect the BMS contribution to grow the next 12 to 24 months. So the 27 guidance, which we're then going to issue at the beginning of next year, will then reflect the latest view on phasing of revenues, milestones, and so forth. But it's fair to say that at this point in time, we see 25 as a trough with regard to net sales, and 26 actually the trough when it comes to revenues hope that helps yeah very helpful thank you very much as a reminder if you wish to register for a question please press star followed by one our next question comes from uh brendan smith from td cowan please go ahead hi this is jacqueline in on for Brendan. I appreciate you taking the questions. Maybe just one for me on the AI side of the conversation. Have you seen any customer inquiries specifically around data generation, given your numerous touch points across the discovery process? And are there any areas of white space you're thinking of expanding into with regards to your modeling development that could potentially further bolster those DMPD sales? Thanks for the question. Not just have we seen customer inquiries, but we are actually actively doing work with customers on this topic. Data generation is a big topic. As I mentioned, chemical compound generation can be related to DMPK, tox safety profiling, so many, many areas. This is an important driver right now also for the positive sales dynamic that we're seeing. There's quite a bit that we have in-house already when it comes to data. Let me remind you, our molecular patient database as such of high, high value and interest in the market because that's something that you cannot quickly generate and has been built over EDK at Evotech. So this is a super strong asset in our minds and is attracting a lot of interest also from partners. The other part, obviously, when it comes to data generation, still a lot OF demand is related to tox studies and helping to train models here. uh but um this is not something far out this is real business meanwhile great thank you we have a follow-up question from charles weston from rbc please go ahead hi thanks for taking the follow-ups it just um you've mentioned the word strategy um a lot of times on this call christian um and uh you've been quite clear with uh strategic goals 2030 near-term strategy um but you're undergoing a strategic review as well so i'm just wondering what what aspects of the strategy are still left to be uh determined thank you uh you're asking me to give my holding statement the review is ongoing charles It's worth a go. Thank you. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Sara Fakih for any closing remarks. Thank you, with this we would like to conclude today's conference call. Thank you for your participation and please feel free to reach out to the investor relations team should you have any further questions. Thank you and goodbye.