Selvita (WSE: SLV) – one of the largest preclinical contract research organizations in Europe, continues its dynamic development in Poland and abroad.
Following the acquisition of Fidelta, Selvita Group achieved in the first half of 2021 over a two-fold increase in sales revenue comparing to the corresponding period of the previous year. The increase in EBITDA and net profit was even higher, significantly influenced by the high profitability of the services executed by Fidelta.
Dynamic increase in all business segments
Selvita, along with its subsidiaries, has continued its dynamic growth in all business aspects.
Revenues from services executed in Poland amounted to EUR 14.4 million and were higher by 17% compared to the first half of 2020, when they amounted to EUR 12.5 million. This increase in revenues was achieved with a very high base from the first half of 2020, when a record, almost 50% revenue dynamics were noted. EBITDA of services executed in Poland (adjusted to the impact of the stock grant program) amounted to EUR 3.2 million (margin: 21.0%).
The bioinformatics segment, represented by Selvita’s subsidiary Ardigen, closed the first half of 2021 with EUR 2.9 million in commercial revenues (EUR 3.2 million including grants), while in the corresponding period of 2020, this value amounted to EUR 1.6 million (EUR 2.0 million), which indicates an increase of 84%. Ardigen’s EBITDA amounted to EUR 0.6 million (margin: 19.1%) and was 56% higher than in the corresponding period in 2020.
Fidelta, representing the segment of services executed in Croatia, recorded EUR 13.1 million in commercial revenues with EBITDA of EUR 3.9 million (margin: 30.1%). Fidelta has been part of the Selvita Group since January 2021.
The first half of 2021 saw a dynamic increase in the sales of services on global markets. With the acquisition of Fidelta, sales in the E.U. countries and Switzerland have significantly increased, as this is where the Croatian Company generates most of its revenues. On another note, it is the organic growth of Selvita and Ardigen which resulted in a significant growth of sales in the U.S.
Group revenues from the U.S. market, the most competitive market globally, amounted to EUR 8.4 million, which indicates an increase of 81.4% y/y, emphasizing the high quality of services provided by the Company.
The first half of 2021 constituted another two very good quarters for Selvita. We recorded growth in every segment of our activity, both in Poland and globally. We are satisfied with the 17% growth in the services executed by our labs in Poland, as it is worth noting that we compare this period to the record-breaking H1 2020, when in the first months of the pandemic we recorded increases of 40-50%. The revenues generated by our Croatian company, Fidelta, which joined the Group at the turn of the year, are also growing, and what is more, it is happening along with high margins. Our other company, Ardigen also continues to strengthen its position on the AI market, maintaining the highest growth dynamics in the Group.
We have no intention of slowing down, which is why we continue to invest in the development of our teams and infrastructure. Construction of the Selvita Research Center in Krakow has begun in July this year, and the adaptation of additional over 2 000 sq m of space in Zagreb is near completion.
To ensure continued revenue growth from the North American market, the largest market for research outsourcing, we have decided to expand our sales structure in the United States. We have appointed Dean Bornilla, an extensively experienced manager, for the position of VP Sales, Head of North America. Dean will be responsible for the Company’s continued development and revenue growth in the North American market. On top of that, experienced, new members joined our European sales team, and will help build our position in this region.
We are convinced that a strong sales team, along with the best scientists working in our laboratories, are the most crucial factor supporting our further development – comments Bogusław Sieczkowski, co-founder, significant shareholder and Chief Executive Officer at Selvita.
We are optimistic about the second half of the year, as the dynamic increase in the portfolio of contracts shows that we have a busy end of the year ahead of us. What is important, this portfolio has grown in all business segments, which shows that after the covid turmoil, stabilization is returning also to the regulatory research market – adds Sieczkowski.
Selvita Group’s backlog for 2021 currently amounts to EUR 59.8 million, showing an increase of 122% y/y, including organic backlog which has increased by 30% as compared to the corresponding period last year.
The path for further growth
Selvita has been consistently implementing the assumptions of the strategy adopted for 2020-2023, according to which the Group intends to develop through organic growth, as well as acquisitions. A significant milestone in the strategy was the acquisition of Fidelta, which contributed to a rapid improvement in the financial results of the entire Group. In the first half of 2021, the dynamics of the Group’s revenues amounted to over 100% y/y, which clearly shows how effectively the goals of the strategy are being implemented.
The organic development of the Group is also supported with investments in its own research area. The company has already started the construction of a new facility – Selvita Research Center in Krakow and has secured EUR 9.3 million of a grant funding and EUR 14.3 million of a bank loan, for that purpose. The future headquarters of Selvita will be able to provide workspace for over 250 people. The investment when completed will increase Selvita’s space by an additional 10 000 sq m, including approximately 4 000 sq m of laboratory and office space.
Significant events before the publication date
On July 12, the Group announced that it was initiating the construction of a new research center in Krakow. The company has signed an agreement with PORR S.A., which will act as the general contractor. Additional, state-of-the-art laboratory space will allow Selvita to increase its scale of operations and expand its services offer.
On September 6, Selvita received a grant funding of EUR 1 million to create a novel technological platform which will accelerate the drug discovery process. The grant came from the National Centre of Research and Development with a total of EUR 1.7 million dedicated to the project.
On September 20, Selvita received EUR 0.7 million to create technology allowing to develop new drugs against diseases caused by coronaviruses. The grant comes from the National Center of Research and Development with a total value of EUR 1.4 million dedicated to the project.
Both projects which were awarded the funding, will enable Selvita to develop innovative technological platforms allowing for a faster and more efficient drug discovery process, expanding the portfolio of drug discovery services offered by the Group.