Selvita S.A. – [ticker: 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 has more than doubled its sales revenues in 2021, as compared to the year before.
Dynamic growth in all business segments
Selvita Group continued its dynamic development in every segment of its business activity. Commercial revenues from services executed in Poland reached EUR 32.3 million and were 30% higher compared to 2020, when they amounted to EUR 25.5 million. In the fourth quarter of 2021 alone, these revenues increased by as much as 50% y/y, to the level of EUR 9.5 million. In 2021, Fidelta, representing the segment of services executed in Croatia, recorded EUR 27.8 million in commercial revenues with EBITDA of EUR 8.6 million (30.8% margin). In the fourth quarter of 2021 alone, the Company achieved EUR 7.8 million in sales revenues, and EBITDA of EUR 2.5 million with a margin of 31.6%. The bioinformatics segment (Ardigen, a subsidiary company) closed 2021 with EUR 6.9 million of commercial revenues, compared to EUR 4.0 million in 2020 (an increase of 77% y/y). EBITDA was at the level of EUR 2.1 million (27.5% margin) and was 91% higher than in 2020.
Selvita Group continued its development on the key geographic markets. In 2021, revenues from the United States, the largest global market for CROs, increased by over 95% and amounted to EUR 18.9 million. The Group recorded also significant sales revenues from the clients in the United Kingdom, amounting in 2021 to EUR 8.3 million, as compared to EUR 3.1 million a year earlier, which indicates an increase of 171% y/y.
– The past year was a breakthrough one for us. Joining forces with Fidelta and continued dynamic organic growth allowed us to more than double our revenues while maintaining high profitability. Considering this, and the equally strong year 2020, we managed to implement the development strategy planned for four years, in just two. Along with such a dynamic development and a significant increase in the scale of operations, we are invariably able to generate high margins, and we enter the new year with a contract portfolio of over EUR 48 million that will ensure our further development in all segments.
We are not planning to slow down which is why we have already set ourselves new ambitious goals for the coming years – comments Bogusław Sieczkowski, co-founder, significant shareholder and Chief Executive Officer at Selvita.
Development Strategy for 2022-2025
The former Group’s development strategy, announced in April 2020, aimed at an increase in sales revenues up to app. EUR 70million, an increase in the scale of operations through acquisitions as well as over EUR 230 million in market capitalization. Since Selvita Group had achieved these goals by the end of 2021, the Company’s Management Board decided to present a new strategy for 2022-2025.
During the aforementioned period, Selvita Group plans to triple its sales revenues (up to EUR 200 million), while maintaining high profitability. The Group will work to implement its strategy through organic growth and acquisitions. Execution of the planned investments will allow Selvita to become the leading global preclinical CRO.
Selvita Group Development Strategy for 2022-2025 is based on three key principles:
- Comprehensive services offer in the field of drug discovery and development – supplementing the drug discovery offer and building the drug development segment
- Focusing on high-value services for the clients – specialization in selected therapeutic areas and development of unique competences
- Development of the Group’s operations in the largest markets in the United States and United Kingdom – growing teams and potentially establishing new research locations
In the area of acquisitions, in 2020-2025, Selvita plans to acquire at least two preclinical CROs in Europe or North America providing services complementary to the Company’s offer or enabling expansion of the scale of its operations. The Company will allocate a total of EUR 110 million for this purpose, from the cash generated and the debt raised.
One of the basic assumptions of the new strategy is a consistent expansion of the services portfolio in the field of drug discovery and development, which will allow us to offer our clients support at every stage of the drug development process, from the early stage of discovery to the selection of a clinical candidate. Selvita also plans to develop further competences in selected therapeutic areas, attractive from a clients’ perspective, in order to strengthen its competitive advantage on the global CRO market. Moreover, the Company plans to continue development in the area of drug development and contract testing studies.
In order to efficiently implement the assumptions of the new business development strategy, from March 31, 2022, Fidelta will fully migrate under Selvita brand. This will allow Selvita not only to benefit from the decades-long history of drug discovery experience held by the Croatian team, but also will facilitate communication with customers and strengthen business development activities.
As far as our further business development is considered, we are planning to continue strengthening our presence and position on the largest global markets, i.e. the U.S. and U.K. markets. For this purpose, we intend to hire new specialists in order to strengthen the local teams – comments Milosz Gruca, Ph.D., Chief Commercial Officer and Executive Vicepresident at Selvita.
The planned development of the Group will be supported by significant investments in the infrastructure. Selvita has already made the first step in this direction, commencing in 2021, the construction of its own research center. By 2025, the Company plans to complete the second stage of this investment, i.e. to build another laboratory building. To secure the possibility of further organic growth after 2025, Selvita acquired an additional, adjacent building plot in early March this year. In addition to investing in its own laboratories in Krakow, the Company plans to simultaneously increase the research space leased in Zagreb and Poznan.
Financing of the new Development Strategy
Selvita Group plans to allocate a total sum of approximately EUR 210 million for the implementation of the development strategy. The Group plans to spend EUR 40m on financing organic growth, another EUR 60m on laboratory infrastructure expansion and EUR 110m on acquisitions.
– We are a company with a stable and very good profitability, which, given the low level of debt we currently have, will allow us to finance the entirety of the planned investments. We consider the possible acquisition of additional capital as something extraordinary that could happen only in the event of financing major acquisitions – adds Sieczkowski.
– From the very beginning of Selvita, our aim was to build a strong brand with a solid position on the market. Years of effort and the commitment of the entire team are bringing us closer to our goal which is to become a large, global player. Organic growth will continue to be the major factor driving our growth, and to make it possible we will be investing in infrastructure expansion and strengthening our scientific team. Moreover, in the coming years, we intend to continue our development through acquisitions. The recent acquisition of Fidelta has shown us clearly what a great impact a well-selected partner can make on both the scale of operations and the scope of competences.
We firmly believe that thanks to the accomplishment of the goals of our development strategy, Selvita will become a leading global preclinical CRO company – sums up Boguslaw Sieczkowski.
