Evolva - Transformation continues

Evolva's FY19 results were above our expectations in terms of sales and EBITDA. Cash flow was also far better than expected as the company has materially reduced its cash burn. Nootkatone is on track for EPA registration and a new product, EVE-X157/Z4, is due to be launched later this year, for the Flavours and Fragrances and Health Ingredients segments. Management has reiterated its commitment to reach cash break-even by FY23 (previous guidance was FY21/23) and is evaluating options to finance future growth until cash break-even, including a capital increase. We have cut our sales and profit forecasts to reflect the guidance that the FY19 growth trajectory will be replicated in FY20 and our fair value is now CHF0.42/share.