Werner Lanthaler - Chief Executive Officer Mario Polywka - Chief Operating Officer Colin Bond - Chief Financial Officer

Igor Kim - Oddo Seydler Bank AG Michael Higgins - ROTH Capital Partners Heinz Müller - DZ Bank

Dear, ladies and gentlemen, welcome to the Q1 Conference Call of Evotec AG. At our customer’s request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. [Operator instructions] May I now hand you over to Dr. Werner Lanthaler, who will lead you through this conference. Please go ahead, sir.

Thank you so much and welcome from the Evotec management team. I’m here with my CFO, Colin Bond; and Mario Polywka, our COO. I hope you had an opportunity to download the presentation that we have put on the internet. This is the presentation that we will use through the next couple of minutes to guide through our Q1 results and our Q1 update. On this presentation, if you go to page number 4, let me bring you to the state of play of the company. And it’s a great pleasure for me to report back that the state of the company is strong. We see strong performance of our Evotec Execute business and we see big upside potential of our Innovate business to come. The first three months show you that we had a strong start in our service-proven Execute business with many alliances that has been closed and more alliances to come and also an upgrading process that we want to highlight, which was the AAALAC accreditation of our Hamburg facility. When it comes to Evotec Innovate, we have to say that so far the year 2015 has not delivered new data points, but there are data points to come especially out of our Alzheimer alliance with Roche and we also have the – it was possible to start another development alliance with a company in the West Coast of United States called Second Genome. On the corporate level, we already reported the closing of our multi-component alliance with Sanofi, which is effective now with April 1, which is up and running. When it comes to page number 5, you see that we are growing profitable in our Execute business and we have accelerated our Innovate investments because we see the best use of capital at this stage to go faster into our highly promising Innovate projects. At the same time, we are very happy to confirm an even great, our very ambitious revenue guidance from 20% growth on the top line to about 35% growth on our top line. The financial highlights will be shown to you by Colin and also the individual elements of the guidance will be shown to you by Colin at the end of this presentation, but I think it’s fair to summarize that the company has never been in a stronger stage than where we are right now. Let me, at this point, hand over to Mario, who will give you a business and strategy update on where we stand, especially in our ongoing core business in Evotec Execute.

Thank you, Werner, and good afternoon to all of you. On page 7, we just like to reiterate the way in which we manage our business through the two segments – Evotec Execute and Evotec Innovate. And as a quick reminder, both segments operate from the same drug discovery platform utilizing the same capacities, capabilities, and resource. Simply put, Evotec Execute represent all those partnerships or collaborations in which the underlying intellectual property is brought to the table by our collaborators or partners. So that shows a fundamental return on our investment into the platform. While the Evotec Innovate represents those collaborations where the projects are derived from our own intellectual property, whether this comes from our own in-house ideas or through those licensed from our academic or biotech collaborators. So the value generated from Innovate is again fundamentally a measure of the return on our own R&D investments. Those are two segments. And, of course, as we’ve mentioned both segments operate from the same systematic, unbiased, and comprehensive platform. If you go to slide 8, this shows you how we’ve expanded the capacities and the capabilities of the resource through the setting of both Evotec France in Toulouse and also the protein production facility in Princeton. Our operations now are truly global with centers of excellence in the West Coast and the East Coat of U.S., the UK, and France, and Germany. Our global scientific resource is now approaching 850 people with a total headcount of more than 900 for the group. Moving on to slide 9, of course, the key addition and expansion to the group was that of Evotec France, which closed at the end of Q1 in 2015. And this will be one of the last chance that we actually separate out a discussion on Evotec France and it will be in the future reported as a normal course of business. We can report that the integration of Evotec France to-date have gone as well as can be expected. You can imagine that the separation of such a significant operation from Sanofi is quite a substantial and complex task. However, it’s a testament to our hard working, adaptable and creative staff, and the support from Sanofi that all tasks remain on schedule. Moving on to slide 10 and more specifically the commitment both financially, commercially, and innovation-wise to the Evotec group from the Evotec France operation. Remember that this operation and the employees in the source that comes from it need a significant capacity challenge that we will face in some of our other sites. We shouldn’t underestimate the importance of this non-dilutive expansion of our facilities and resource. This is further supported by the significant cost support. We have total commitments from all the various agreements being approximately $250 million over the next five years. Summary, we are working on the MSA now for Sanofi, which has become one of our main Execute collaborators. This is a contract for five years. And importantly, we are about to sign our first third-party agreement type work onto the Toulouse site. With fine tuning, the commercial offering of the Sanofi library with the Evotec library and already have significant interest in this open innovation offering. The projects licensed from Sanofi and continuing discussions about licensing of Evotec projects through to Sanofi remain in progress and then we will give an update of those later in the presentation. As highlighted by Werner at the beginning, now on slide 11, the Execute segment recorded very strong growth in Q1 of revenues up $23 million, which is 21% growth compared with the same period in 2014 and had a healthy EBITDA margin of 15%. The key to the growth in Q1 was addition of new partnerships such as those with C4X, numerous screens on various Japanese pharma companies, a territory which over the last few years has been relatively quiet, but appears to be coming back strongly, extensions with existing partnership such as Padlock, which has been extend from the original 2014 agreement through to the middle of 2017, and also the continuing strong performance of Euprotec acquisition from May of last year. The AAALAC accreditation to [indiscernible] facilities gives our clients the confidents that not only do we perform cutting-edge science, but also within an ethical and humane environment. Going forward into the rest of 2015, we will continue to build on this tremendously strong start. It requires continued hard commercial effort and ongoing successful scientific delivery from our operations. We continue to progress discussions on larger more strategic opportunities with our partners whether they’d be standalone services or integrated drug discovery projects. And, of course, we have our portfolio of milestone-bearing alliances that are forecasted to deliver on key scientific and financial milestones during the year. Thank you all for listening and I will pass you back to Werner.

Thank you so much. Page number 13 shows you the key mission of our Evotec Innovate, which is to focus on causes and not only on symptoms of diseases. For this, we use systematically unbiased and comprehensive drug discovery platform especially with three dedicated focus areas. Focus area number one is neuroscience; number two is diabetes and diabetic complications; and number three and increasingly so is oncology. On page number 14, you can see that our product portfolio and partner product portfolio is increasing steadily and it’s a big pleasure for me to report back to you that our product opportunities have grown beyond 70. What does this imply, this implies heavy new projects coming on into this portfolio where there is not too much outside visibility at this stage, but we really see especially in the preclinical setting, many, many encouraging movements at this stage, which come from, for example, our Bayer alliance or our new Second Genome alliance or, of course, also our new Sanofi alliance in oncology. When it comes to our more advanced pipeline, page number 15, we are aware that there is a lot of focus at this stage on our most advanced project in CNS, which is at Phase 2b in Alzheimer’s disease. This product called Sembragiline is expected to readout its data point of the Phase 2b in Q2 2015 and we are confident that Roche will report back the first data to us in this timeline. Of course, this is one of the very few late-stage small molecule Alzheimer’s disease clinical trial, which could a major transforming medical intervention in this disease area where we find a big unmet medical need. On page number 16, you can see the step function of growth that we have on the [indiscernible] in the last couple of months by basically building an oncology portfolio. And what you can see here is that the addition of the portfolio from Sanofi to our existing portfolio is a very nice symmetric order now that gives us the competence and focus to go forward in four categories where we see the big medical need and where our platform can be wonderfully used. So you see on the first site, targeted therapies, you see metabolism in oncology, you see oncology immunotherapy, and you see focus areas in the microenvironment of oncology where our projects and discovery ideas at this stage are focused. You can expect in the next two to three year here multiple clinical entries, which we hope to advance out of this portfolio. Page number 17 shows you one of our other key missions, which is building the bridge from academic institutions to pharma and optimally utilizing the platforms of Evotec. In 2015, we have initiated a big initiative in Europe, which we called French academic bridge, but you also see other movements with especially U.S. universities where we are currently moving forward, very interesting, and highly innovative projects. In summary on page number 18, you can expect for the year 2015 major data points especially out of our Alzheimer alliance, you can expect major progress of the clinical presence between our partnerships, and you can expect an expansion our network of academic alliances just as well as the partnering of Cure X and Target initiatives that are currently ongoing. At this point, let me hand back to Colin, who will give you our Q1 numbers and the outlook of 2015.

Thank you, Werner. Slide 20, slide 20 represents the P&L for the first three months of 2015, compared to the first three months of 2014. Group revenues increased by 22% to €21.5 million compared to €17.6 million in the prior year period. As a result, overall gross margin for the first three months of 2015 increased significantly to 30.7% compared to 26.2% in 2014. This increase was due to strong base revenues combined with €1.3 million year-over-year increase in milestones, upfronts and licenses. For the first three months of 2015, EBITDA adjusted for changes in contingent consideration improved and was slightly negative of minus €0.3 million compared to minus €1.3 million in the same period from the prior year. This improvement was despite the increased investment in the Cure X and Target X initiatives and also one-time transaction costs related to the deal with Sanofi of approximately €0.5 million. Slide 21; slide 21 shows the results for the first three months of 2015 presented according to the Execute and Innovate segments. Consistent with our strategy, the results of the Execute segment for Q1 2015 showed strong revenues, solid margins, a low level of R&D investment and relatively high profitability. EBTIDA adjusted for changes in contingent consideration for the first three months of 2015 improved to €3.5 million compared to €2.3 million in the prior year. Meanwhile, the results of the Innovate segment reflect the significant investments being made in the Cure X and Target X initiatives. EBTIDA adjusted for changes in contingent consideration for the first three months of 2015 was minus €3.8 million and absolutely in line with prior year of minus €3.6 million. Slide 22; on slide 22, the left-hand box shows the three year trend in revenues. As previously stated, overall revenues increased by 22% to €21.5 million. The right-hand box shows the three-year trend in gross profit. As previously mentioned, overall gross profit for the first three months of 2015 of 30.7% was a significant improvement on prior year of 26.2%. Gross profit excluding milestones, upfronts and licenses for Q1 2015 of 20.1% was down on prior year of 22.6%. This decrease was due to the start up costs of the new facility in Princeton, USA and an active mix effect as the prior year quarter contained revenues related to the CureBeta and DGO70 projects. Slide 23; slide 23 presents the key indicators for both the Execute and Innovate segments. This slide clearly highlights the respective strategies of the two businesses. The top left-hand quarter shows that the revenues of each segment grew strongly in the first quarter of 2015, with increases of 21% and 55% for the Execute and Innovate segments respectively compared to the same period of the prior year. The top right-hand quarter shows the gross profit margin for the Execute. Gross profit margin for the Execute segment increased in Q1 2015 by 1.3 percentage points and for the Innovate segment by 19 percentage points. The significant increase in the Innovate margin was driven by the increase in milestones, upfronts and licenses. The bottom left-hand quarter shows that consistent with the company’s strategy R&D expenditure in the Execute segment was at a very low level in Q1 2015. However, R&D expenditure in the Innovate segment for the first three months of 2015 increased by 41% to €4.6 million compared to €3.2 million in the same period of the prior year. The bottom right hand quarter, shows the significant improvement in the adjusted EBITDA. As mentioned previously, the adjusted EBTIDA of the Execute segment increased to €3.5 million compared to €2.3 million in the same period of the prior year. Meanwhile, the adjusted EBITDA of the Innovate segment was absolutely in line with prior year, despite the significant increases in Innovate R&D investments. Slide 24; slide 24 summarizes the 2015 Guidance for the company. Revenue growth, excluding milestones, upfronts and licenses is increased from above 20% to above 35%. The reason for this increase is the refinement of the accounting treatment of the Sanofi transaction. All other elements of the guidance published on March 24, 2015 remain unchanged. Firstly, a positive adjusted EBITDA; secondly, liquidity at year-end to be well in excess of €100 million; thirdly, R&D expenditure between €15 million and €20 million and finally, investments in fixed assets of up to €10 million to build capacity and capability. Now I’d like to hand back to Werner to summarize the key milestones for 2015.

Thank you very much. With this, I would like to conclude this presentation by reiterating, we had very strong start into 2015, we stay focused to build, our vision is, a world-class discovery company that our investors deserve and that our people wanted to build. With this, I hand back to your questions. Thank you so much.

We will now begin our question and answer session. [Operator Instruction] The first question comes from Igor Kim. Your line is now open.

Yes, hello gentlemen. Congratulations for the strong start in 2015. I have a couple of questions. The first, the top line growth that you saw in the first quarter, do you know what was it on a constant currency basis and is it possible to quantify the ethics effects that you had in the first quarter? And the second question is in your updated revenue outlook of 35% growth, could you shed a bit more light to what is exactly there because I remember it was fairly complicated, the split of the payments from Sanofi it went variable and the fixed components there. So just probably a bit more details on that. Thank you.

Thank you, Igor. On the first one ethics effect, I give back to Colin and also on the second one on Sanofi and the refinement of our guidance here, I give back to Colin.

Yeah. So Igor, thank you. On the currency, clearly we analyze it and the number is just over €2 million impact on the top line. The reason for not highlighting it in the last three to four years, we’ve absorbed the strong dollar and with the dollar now weakening, we’ve included it in our results and haven’t specifically highlighted the impact, but it’s about €2 million on the top line and on the bottom line, approximately €1 million impact, because although the dollar is seen strong against Euro, of course about 40% of our cost base is in British Pounds and the British Pound has actually strengthened against the Euro and so we don’t see that benefit falling all the way down to the bottom line. In respect of the guidance, of course we signed and closed the transaction on March 31 and we were certainly in the process of trying to determine exactly how we would be able to account for the various components of the transaction, which is multi-dimensional and the increase that you now see is in – as I said on, during my presentation, is entirely due to the change in and the refinement of the revenue recognition on the Sanofi transaction, the underlying increase in base revenues adjusted for consistent currency is high single digit.

Okay. Okay, thank you.

The next question comes from Michael Higgins. Your line is now open.

Thank you operator and hello guys, how are you.

Thank you. How are you? Good morning.

I’m good. I’m good, thanks. Congratulations on the quarter, a great start to the year. A question on the strategy, as I’ve noticed in recent months and years, you are spending an all-time [indiscernible] these in degeneration. Your degeneration is rather dramatic and seems increasing as more and more attention as [indiscernible] sale, but there seems to be a continual loops circling back into this area, I wonder if you have any programs [indiscernible] directly to, they continue to grow your business and neuro-degeneration?

As you probably have followed us not only going into a to be with Roche over the last three years you might have also recognized that we have entered one of the largest novel target initiatives together with Johnson & Johnson Innovation in the field of Alzheimer's. And there is not enough time on the call to highlight what is ongoing there, but I can reassure you that we really think what we are doing with those companies, with Roche and with Johnson & Johnson at this stage is absolutely cutting edge in the world of neuro-degeneration and we are also one of the few companies that’s able to really benefit from the latest technologies in the field of neuro-degeneration. For example, novel imaging technologies are available at Evotec ended our partners and novel read-out technologies are available in this field. So, absolutely yes, neuro-degeneration is a key field for us. This is so far highlighted with two commercial partnerships. Let me also highlight that we are running, I would say at least three Evotec Innovation - three initiatives in the field of neuro-degeneration, where at this stage there is no commercial partner visible and no Pharma partner visible and here we have the freedom to either go alone. We were a partner at appropriate time. Let me highlight one initiative here, which is Cure ALS, saw our initiative together with the Harvard Stem Cell Institute and Professors Lee Rubin and Kevin Eggan in the field of ALS where we, I think are the first company to have been able to master on the commercial/on a pharmaceutical grade scale to bring an IPS derived protocol on our screening facilities and to get here reproducible and very solid results. So, these are just highlighted initiatives at this stage that are ongoing in Evotec and it’s clear for us to stay on this path because the unmet medical need is dramatic and especially when you talk about not only symptomatic treatments here, but also in the long run for this truly needed [indiscernible] treatment.

Okay, very helpful. Thank you. And just relative to that, with this 200 employees are coming in many of which are [indiscernible] oncology research have you noticed any change in interest from outside partners whether it be an execute or innovate related to the Toulouse employees and their knowledge?

I think it is very key to understand our strategy with Toulouse, that is just like all other sides of Evotec with the exception maybe of Evotec San Francisco, it is an integrated Evotec Execute and Evotec Innovate project and project portfolio and we are running at all sides because this guarantees to us the best scientific translation within our team. So, within the current make-up of Toulouse we are running the project as we think we can optimally use the resources; that’s one aspect. To the outside world, we have only, I would say initiated further discussions, and also initiated further customer contents here, but we are very happy and Mario already hinted that in his presentation that we see the first lines of new business coming into Toulouse and I think the first businesses that we expect with be Evotec Execute businesses there, especially when you are aware of the fact that we have taken over the modern compound management facility in Europe and probably Germany that we are operating now out of Toulouse.

With that would that increase be included in your 35% increase in top line or …

At this stage we don’t have any assumptions for new business coming into Toulouse for the first half of 2015. In our guidance, we also have only very minor assumptions in it for 2015 overall and I would also see that – let’s see how it goes and let’s also hope that there will be positive surprises.

Very good. Thanks for the questions.

Thanks for getting up so early.

The next question is coming from Heinz Müller, DZ Bank. Your line is now open. Heinz Müller: Yeah, hello good afternoon. Heinz Müller speaking. I have a question regarding P&L, so in contrast to the sales increase this development didn’t arrive at the operating result line, so what are your indications for the year as a whole? Will this relation improve or whereas special situation in the first quarter?

Let me maybe first on a general remark, give a comment and hand it back to Colin. We really think strategically taking the opportunity of going full speed with our innovate at this stage creates those ALS long term shareholder value. So, we have of course used all opportunities to improve bottom line as well, but it would have just held wrong at this stage regarding value creation to not try to optimize here at Evotec Innovate for the long run. And on that note I hand back to Colin who will give the specifics.

So, first of all within Q1 we had half a million of transaction cost related to closing the deal with Sanofi and those won’t be repeated over onetime. Secondly, on the top line Q1 is always our weakest quarter on the base revenues, and we expect the base revenues to accelerate in quarters two to four. And then thirdly, our milestones as in previous years are skewed towards the three later quarters. There was a few milestones in quarter one, even though the milestones were up compared to Q1 2014, the timing of most of the milestones is going to be in the second half of the year as in previous years. Heinz Müller: Okay. Thank you.

There are no further questions. I hand back to the speakers.

If there are no further question, let me thank you very much. We look forward to further questions via e-mail or just contact us directly. We are very happy again to report a strong start into this year and we will update you on the process of Evotec in the continuing months. Thank you very much and we wish you all a great day.

Ladies and gentlemen thank you for your attendance. This call is being concluded, you may now disconnect.