Good morning, good afternoon, and welcome to today's webcast and conference call. My name is Gabriele Hansen, and I'm the head of Global Communications and Investor Relations at Evotec. Please allow me to introduce today's speakers. Joining me on the call are Dr. Christian Wojczewski, Chief Executive Officer of Evotec, Paul Hitchin, Chief Financial Officer of Evotec, and Aurélie Dalbiez, our Chief People Officer. Today's presentation will focus on the announcement we made earlier today regarding Horizon, the next phase in our multi-stage transformation initiative and the associated strategic and financial framework. Please note that this call is being webcast live and will be archived in the events calendar on our website. Before we begin, a few forward-looking statements. The discussion and responses to your questions on this call reflect management views as of today, Tuesday, March tenth, twenty twenty-six.
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. Evotec 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 uncertainties, please refer to our public filings and disclosures. With this, let me hand over the call to Christian.
Thank you, Gabriele Hansen. Good morning and good afternoon to everyone. Welcome and thank you for joining today's call. Today marks an important milestone for Evotec as we introduce Horizon, an operating model transformation and the next step in repositioning the company for sustainable growth and value creation. With Horizon, we are upgrading Evotec in three crucial aspects, operational excellence, scientific leadership, and commercial execution. The measures laid out today will result in greater agility, innovation, and responsiveness to the evolving needs of our customers, thereby better positioning us for accelerated profitable growth through 2030. Horizon is the next step in the transformation journey we started with a priority reset in 2024 and continue throughout 2025. Let me remind you, the restructuring already achieved has improved our resilience.
We stabilized our cost base by delivering more than EUR 60 million in savings through the end of 2025, well above our initially announced savings goal of EUR 40 million. Furthermore, we streamlined our asset pipeline by 30%, significantly reduced our capital expenditure by 60%, and strengthened our balance sheet. With that foundation in place, we're now entering the next phase in our evolution, moving to long-term value creation. Horizon positions Evotec for future growth based on three pillars. First, simplification of our operational structures into a smaller global footprint. By the end of 2017, we plan to have reduced the number of our sites from 19 originally to 10 sites. Second, introducing focused centers of excellence to concentrate our scientific expertise and innovation infrastructure. Third, upgrading our commercial organization and elevating our commercial capabilities to become faster, more agile, and more responsive to our customers.
Based on these pillars, we are targeting EUR 75 million run rate savings by the end of 2027. The significant reduction in operational complexity is expected to allow us to be more capital efficient. Accordingly, we are targeting a continued CapEx-lighter approach to below 10% of revenues. The goal of Horizon is straightforward, to reset how the company operates, allocates capital, and delivers science and innovation more competitively in the most attractive segments of the discovery and preclinical development market. Horizon plays out against an industry backdrop that has itself undergone a post-pandemic reset, as illustrated on this page. The exceptional funding and development activity seen during the pandemic era has normalized and early-stage biotech funding has tightened. Pharmaceutical companies are placing greater emphasis on return on R&D investment and execution reliability, adopting a more disciplined approach to capital deployment and innovation funding.
As a consequence, investments are currently directed more toward clinical-stage de-risk programs. Evotec's operating model has not kept pace with this market shift. Expansion through acquisitions and growth across multiple sites has created complexity and duplication. While this has led to underutilization and slower execution, our innovation capabilities remain strong and undisputed. At the same time, it's important to recognize that a more disciplined market dynamic does not signal a decline in innovation. Rather, they reflect a more selective environment in which companies prioritize superior outcome at greater efficiency and at best value per R&D dollar. Such an environment favors external partners able to combine scientific depth with operational excellence and therefore integrated platforms become more relevant. Horizon rebalances our operations for the changing drug discovery and development environment and prepares Evotec to capitalize on its strengths as the industry continues to evolve.
Those strengths are important to recognize because while the current environment is constrained, the structural fundamentals of our industry point to substantial opportunity. As shown on the left side of slide 6, total pharmaceutical R&D activities is expected to provide stable, moderate growth over the remainder of the decade. Within current projections, we see factors that may stimulate over proportional demand for discovery and preclinical development services. These include the largest patent cliff that the industry has faced in more than a decade. As these expirations approach, pharmaceutical companies will need to replenish pipelines efficiently and economically. This will drive renewed demand in the industry for high quality early discovery and development work. Furthermore, we believe drug discovery and preclinical development in 2030 will have evolved from what it was in 2024.
Advances in automation, data science, and AI are reshaping cost structures, and they create new opportunities for platforms that can integrate data, biology, disease modeling, automation, and execution at scale. For Evotec, this dynamic represents an excellent opportunity. We're positioned to meet this returning focus on innovation with significant strength, deep scientific expertise, differentiated technology platforms, and our proven ability to innovate across the discovery to R&D continuum. In summary, even though global R&D growth has moderated compared to the exceptional pandemic years, we expect greater selectivity and capital discipline rather than reduced innovation appetite. As later stage portfolios mature and commercial pressures increase, early discovery becomes increasingly essential for pipeline renewal. Before we take a closer look at our transformation path, let me briefly remind you of the four levers of midterm value creation at the core of Evotec strategy shown here on slide seven.
These levers have guided our priorities since their introduction in 2025, and all 4 have directed our decision-making since then. Most relevant to Horizon and our presentation today are lever 1, our emphasis on above market growth and better quality earnings through scientific and technology leadership and lever 2, our commitment to operational excellence. Now let me outline on slide 8 the trajectory of our transformation. This slide shows that we have already completed a significant part of the journey and built a strong foundation from which Horizon will further evolve the company. In 2024 and 2025, we stabilized the company operationally and financially. We strengthened our leadership and governance and improved our science and innovation focus. Within these areas, we sharpened our strategy and defined clear value creation levers that guide the operating model we are now implementing under Horizon.
We reinforced financial discipline and embedded EUR 60 million in annualized cost savings. We prioritized and streamlined our asset pipeline, consolidated scientific leadership and approved improved AI integration. The work over the past years delivered what we previously had committed. Evotec is more focused, more disciplined and more resilient. Horizon now takes this progress forward. It is the next structural, structured step, building on our momentum and establishing a path to incentivized value creation. Beyond that, it lays the groundwork for optimizing the company and intelligently scaling into 2030 and beyond. Slide 9 summarizes our core measures across the three Horizon pillars of operational excellence, scientific leadership, and commercial execution. Within the operational excellence pillar, we are simplifying our structures through a footprint adjustment. During 2024 and 2025, we reduced our global footprint from 19 to 14 sites.
Under Horizon, we will further streamline to 10 sites over the next 2 years. This will further expedite the transformation from a dispersed multi-site structure to a focused network of technology hubs and centers of excellence, concentrating activities where we already have greater scientific depth, infrastructure and strategic relevance for a broad range of technologies. In the process, we will prioritize owned sites, lowering structural costs and increasing infrastructure utilization. The streamlined footprint anticipates reducing approximately 800 positions across affected locations and enabling functions. This step removes structural duplication, aligns capacity with expected demand, and reinforces execution discipline across the company. Within the scientific leadership pillar, we will establish centers of excellence, improving our scientific depth and partner readiness. Today, a number of key capabilities are spread across multiple sites, which limits their respective scale and dilutes impact.
On the horizon, we will concentrate dispersed capabilities in dedicated locations with clear mandates and end-to-end accountability. Within the commercial execution pillar, we are upgrading our customer-facing organization to strengthen responsiveness and improve the quality of engagement with customers and partners. Supported by the operational streamlining, we are expanding our commercial organization while introducing clear ownership of customer and partner relationships and a more integrated go-to-market approach. Backed by a realigned business development organization, these improvements are designed to accelerate execution, enhance customer experience, and ultimately increase our win rates on high-value mandates. The Horizon measures will proceed responsibly and in accordance with local law. Horizon is a defined time-bound realignment with a clear end state, and we plan to execute swiftly and only once. Importantly, we do not expect material disruption to ongoing customer and partner programs. On page 10, you see Evotec's global footprint in 2024.
Before we begin the first phase of our transformation journey with a priority reset. The 19 sites shown here, each with different technologies and specialty areas, reflect a history of growth through acquisitions and geographic expansion. That growth enabled scale in the past, but over time, it left us with fragmented and less focused on our core strengths. The multi-site setup also fostered silo working, duplicated capabilities, and slowed decision-making, thereby limiting agility and driving organization complexity and costs. In today's environment of continuous change and intense cost pressure, this fragmentation is no longer viable. To remain competitive and preserve our ability to invest in innovation, we will execute on clear efficiency measures to concentrate competencies, simplify structures, and unlock synergies. The map on this page 11 illustrates Evotec's future global footprint.
It reflects a much simpler, more focused operating model with clear technology area ownership, a centralized innovation infrastructure that concentrates expertise at sites where Evotec already has significant scientific mass and operational leverage. This will allow us to scope more competitively for customer programs, supporting a more resilient backlog and a healthier revenue mix. The concentration of capabilities following the footprint adjustment will primarily strengthen our fully integrated sites in Toulouse and Verona. These sites house all core disciplines in discovery and preclinical development. We place core scientific areas in a multidisciplinary infrastructure that supports cross-functional problem-solving, expert-to-expert interactions, simpler governance, and use of shared technology platforms and data models. It thereby enables a seamless progression of customer projects from concepts to candidate. Importantly, in the case of Toulouse and Verona, Evotec owns both facilities.
Further strengthening these sites avoids lease costs, increases utilization of our existing fixed costs, infrastructure, and reduces operating expenses while preserving flexibility for future expansion. Taken together, these changes allow us to focus much more effectively and capitalize on our core scientific strength. They enable us to serve our markets with greater agility, deliver faster translation of science, and better utilization of people, platforms, and capital. The new operating model and global setup strengthens our commercial execution, enabling more customer mandates, higher win rates, and better cross-sell across platforms, while keeping on-time delivery and first-time right execution at the core of customer value. Let me now hand over to Paul.
Thank you, Christian, and a warm welcome from my side. In the final part of today's presentation, I would like to take you through the financial implications of Horizon and how this translates into our new medium-term framework. To give you a clearer view of where we stand today and how we are guiding for the years ahead, I'll walk you through four connected building blocks. First, preliminary unaudited results for the full year of 2025. Second, our guidance for full year 2026, which we consider a transition year during which Horizon is implemented and begins to take effect. Third, the financial mechanics of Horizon itself. How the measures and the operating model transformation translate into savings, cost, and timing. Finally, I will introduce our new medium-term framework through to 2030, which reflects a phased trajectory aligned with the implementation timelines of Horizon.
Let me start with the preliminary unaudited full year 2025 figures shown here on slide 12. These numbers form the financial baseline for the 2026 transition year. While they remain subject to completion of our year-end closing and audit procedures, they provide a reliable basis for guiding 2026 and framing our midterm outlook. For full year 2025, we expect results to fall within previously communicated guidance ranges. Group revenues are expected to amount to approximately EUR 788 million, with adjusted group EBITDA of EUR 41 million or EUR 811 million and EUR 52 million respectively at constant exchange rates. Our year-ending cash position also finished strongly at approximately EUR 476 million.
Looking into our two business segments, starting with the DMPD segment, our preliminary unaudited full-year results reflect the continued softness in the early drug discovery and preclinical development market that we saw in the first nine months of 2025 results. We expect DMPD revenue to amount to approximately EUR 529 million, representing a year-on-year decline of approximately 13%. Adjusted EBITDA is expected to amount to approximately -EUR 12 million. At constant exchange rates, revenues are expected to be at EUR 540 million and adjusted EBITDA at -EUR 5 million respectively. The key drivers were sector-wide, reflecting lower funding availability for early-stage biotech companies and delayed program starts. In addition, revenues contracted faster than our cost base, which created internal overcapacity and weighed on segment profitability, further underscoring the need for Horizon's operational reset.
In contrast, the Just Evotec Biologics business continued on a strong path in 2025. Preliminary unaudited revenues are expected to amount to approximately EUR 259 million, representing a year-on-year growth of approximately 40%. Our fourth quarter Just Evotec results also included an additional license fee benefit of approximately EUR 65 million. Adjusted EBITDA contribution from our Just business is expected to total approximately EUR 53 million for the year. At constant exchange rates, the Just Evotec business revenues landed at EUR 271 million and adjusted EBITDA at EUR 57 million. Just Evotec's evolution toward an asset lighter technology enablement model is progressing by a growing contribution from license fees, stable development revenues, milestone potential, and future royalties.
This is complemented by platform components that increase Biologics productivity, such as our proprietary cell line, media, and expression vector systems, which can provide us with further opportunities to generate revenues. The Sandoz agreement provides clear validation of our continuous manufacturing technology and illustrates how we are shifting from a capacity-constrained setup towards a scalable, higher-margin, technology-driven partnerships, including licensing where appropriate. Moving on from our full year 2025 baseline, let me walk you through the financial mechanics of Horizon and our 2026 guidance on slide 13. Starting with the impact of Horizon. As Christian outlined, Horizon is the continuation of a multi-stage journey in which we have already delivered on many improvements. We enter 2026 implementation year with approximately EUR 60 million of annualized cost savings from 2025 already embedded in our operating cost base.
From a financial perspective, Horizon will realign our cost structure, focusing resources more sharply and creating a more scalable operating model. We expect total run rate savings of approximately EUR 75 million by the end of 2027, reflecting the structural benefits from footprint optimization, workforce adjustment, and organizational simplification. To implement Horizon, we expect cash restructuring costs of approximately EUR 100 million over the 2026-2028 period, with additional non-cash components related to asset impairments from site closures and moves. Putting this together, the 2024-2025 cost savings stabilize our cost base. Horizon now delivers the next structural efficiency layer. Improved utilization then drives operating leverage, and this creates a clear bridge to margin expansion from 2027 onward. With this context in mind, let me turn to our full year 2026 guidance.
For 2026, we guide toward group revenues of approximately EUR 700-EUR 780 million at incurred foreign exchange rates and EUR 730-EUR 810 million at constant foreign exchange rates. Adjusted group EBITDA is expected to fall within the range of approximately EUR 0-EUR 40 million at incurred foreign exchange rates and EUR 10-EUR 50 million at constant exchange rates. We consider the 2026 a transition year. Horizon measures will be phased in over the course of the year, shaped by optimization and restructuring effects initiated in the first half. Operational improvements are expected to become increasingly visible in the second half of 2026 as the benefits of Horizon begin to accrue.
A more detailed breakdown, including segment-level granularity, will be provided as part of our final full year reporting on April 8, 2026. In light of our multi-stage transformation journey, we have revisited our mid-range guidance to now reflect a phased trajectory from 2026 to 2030. The new framework aligns the timing of the Horizon measures with expected development of the revenue mix across our two business segments. Under the framework shown on slide 14, we expect group revenues to grow to more than EUR 1 billion by 2030. We continue to expect adjusted EBITDA margin to reach the 20% levels by 2028, and to exceed that level by 2030. This margin progression is driven by several reinforcing elements, both external and internal.
Externally, we first anticipate a recovery in early-stage drug discovery and development activity in 2026 as innovation cycles normalize and pipeline replenishment needs increase across the industry. Internally, four reinforcing elements support our financial progression. First, recurring cost reductions from Horizon, beginning in 2026 and with a full run rate effect from 2027. Second, a continued shift towards higher margin technology-enabled and capital-efficient revenue streams, particularly within the Just Evotec Biologics business. Third, lower ongoing CapEx needs to a target of below 10% of revenues. Fourth, operating leverage as revenue growth resumes following the 2026 transition year, further fueled by improved productivity and automation. Importantly, the progression from 2026 through to 2030 is not dependent upon a single driver. Just as the Horizon is not simply a cost out program.
It is the combination of a lower structural cost base, a higher quality business mix, normalizing utilization, and gradually improving market backdrop that together create the path to margin expansion. Taken as a whole, we see this as a disciplined, incredible trajectory in which 2026 represents execution and transition. 2027 marks the inflection of both market and internal improvements. 2028 and beyond reflects structural margin delivery. With this, let me hand the call back to Christian.
Thank you, Paul, and thank you all again for joining this presentation. Before we now turn into, your questions on slide 15, I would like to take a moment to summarize Horizon's key aspects and how they position Evotec for sustainable and midterm growth. As I said earlier, the market for discovery and preclinical development has had several difficult years in the wake of the pandemic. At Evotec we began the process to adjust to this new environment about two years ago. From the beginning of that process through the end of 2025, we delivered EUR 60 million in savings, streamlined our asset pipeline, and significantly reduced our capital expenditure by 60%, strengthening our resilience. Those measures have enabled us to take the next step in our transformation, which is Horizon.
From today forward, Evotec will be better positioned with a smaller footprint, streamlined operations, more focused science organization, and more robust commercial performance to leverage our long-standing strengths. Together, the three pillars around operations, science, and commercial execution form the basis of our new operating model designed for agility, scientific leadership, and sustainable growth. Evotec's well-established strength, our scientific excellence, is central to this. Horizon is ultimately about creating an infrastructure that gives this work the greatest possible impact in a market that emphasizes innovation readiness, data-driven workflows, and AI-enabled discovery. As Paul said a moment ago, we expect you will be getting to see the first effects of Horizon toward the end of this year, with its impact building over time.
Meeting these targets will require continuing progress as Evotec adjusts to the changing market, adopts AI workflows and other new technologies, and contributes its own innovation to the drug discovery and development enterprise. This is a process that is already well underway and will only gain momentum as the effects of Horizon begin to be felt. With this, I would like to open the call for your questions. Thank you.
We will now begin the question-and-answer session. The first question comes from the line of Charles Weston from RBC. Please go ahead.
Hello. Thanks for taking the question. The first is just on the cost savings. Just wanted to better understand the trajectory of those through to 2028. First of all, what's the annualization impact this year of cost savings made in 2025? Secondly, what do you think the full year impact of Horizon cost savings will be in 2026 and 2027? Because I wasn't sure whether you'd see the full impact in 2027 or by the end of 2027. I'll pause there.
Hey, Charles Weston, this is Paul Hitchin, and let me start with that one. So first of all, in terms of the cost savings associated with priority reset, you'll remember that we targeted EUR 40 million of cost savings split over 2024 and 2025. We actually delivered over EUR 60 million associated with that in 2025 as a program. As it pertains to the next program, this program of Horizon, EUR 75 million is the target run rate in 2027. In terms of the phasing of that, you should think around 20-25% of that in 2026, the majority then in 2027, and then some level of carryover into 2028.
Thank you. To be very clear, the EUR 75 is expected in 2027 in the full year accounts or sorry, by the end of 2027, i.e., to be fully booked in 2028?
The majority will be realized within the 2027 financial statements.
Okay. Thank you. Secondly, if I can. Sorry, I appreciate that was several parts of question one. On question two, in terms of the expectations for 2026, could you comment on how much you have included in the guidance for milestones? Secondly, another key driver is obviously BMS, which fell significantly in 2025 from 2024. Could you help us understand what trajectory you now expect for 2026 and I guess beyond, you know, relative to those 2024 levels? Thank you.
Thanks, Charles. This is Christian. Thanks for the question. I'll answer briefly and then remind everyone that this is also a call about Horizon, so happy to talk about the actions we're taking there. We still have an earnings call on the eighth of April. With regards to BMS, you're right. 2025, 2024, as we said last time, was a decline. We expect 2026 to be kind of the trough in terms of sales and profitability for the partnership and then basically as of 2027 to pick up again. The second topic was around
I think it was around milestones.
Milestones
how we're modeling them for 2026.
as you also know, we're not necessarily singling them out in our reports, but it's fair to say that we're expecting a higher contribution in 2026 compared to 2025.
Okay. Thank you very much. I'll get back in the queue.
The next question comes from the line of Ramakanth Swayampakula from H.C. Wainwright. Please go ahead.
Thank you. Good morning, Christian and Paul, or rather good afternoon for you folks. Just as you talk through Horizon, and just as you characterize 2026 to be the transition year for Horizon, what's the total estimated cash outlay for the 800, you know, job cuts and site consolidations? You know, how should we think about that being phased across the 2026 EPS guidance that you provided?
Yeah. Good morning. This is Paul. I'll take that. We have about EUR 100 million planned cash costs associated with the plan. In terms of phasing, I would expect about half of that to be realized in 2026 and then the majority of the remainder in 2027, with some potential small tail into early 2028. Gives you a rough direction of travel for how that EUR 100 million charge looks like from a cash perspective. Paul.
Okay. Thanks for that. In terms of the commercial execution upgrade, you know, one of your pillars is mentioning clearer ownership in the commercial organization. I'm trying to understand how you're planning to execute and achieve this. Does this mean you will start hiring some senior commercial leadership from the traditional large cap pharma? How will that sales cycle change, you know, as you move from basic service contracts that you have to, like, licensing out IP?
Thanks for the question. Fair to say that it's probably one of the most important pillars, and we have already started. What I was alluding to is already in full motion. It has a couple of levers. Yes, you're right, we are also upgrading our organization and our leadership team. Actually, while we speak, we have already brought people on board, more to come. We're also expanding our business development team. Beyond that, it's a more focused approach for salespeople, business development people for the individual opportunities that we have. One being standalone, and integrated business, so more the essential classical CRO versus a dedicated team for strategic business development for the larger partnerships.
This has already been built, and that will allow us to be much more targeted going forward. Beyond that, we are also significantly improving our commercial execution capabilities. We're bringing down the sales cycles. We're improving the conversion rates. We actually already have implemented a step change in our proposal management to bring the times down from request for proposal to submitted proposal. We've also sharpened our value propositions. What we do see already now is that the number of prospects are going up. We do see that our sales intake has stabilized over the last couple of months, and we also have quite some positive momentum on new strategic deals. We start to feel the impact of the actions that we've taken earlier.
Fantastic. One last question. I know I'm taking too much of your time, but one last question. Your other lever, or lever one, emphasizes technological leadership. Just to understand this, you know, to what extent are you using the AI and machine language or machine learning capabilities, and how is that helping you? Or first of all, is it one of the, you know, important pieces to allow you to reduce the headcount? And if so, you know, how are you managing not slowing down the development timeline?
When we talk about AI, we obviously have to differentiate between using AI for internal processes and becoming more efficient. I guess your question is more about using it in the context of drug discovery and development.
Sure.
I would like to maybe make three statements around that. Number one, we do believe that AI will play an important and increasing role in the future for drug discovery and development, and it will be an important role. Secondly, we in all confidence can say that it will not take over. It will be a tool which you need next to a lot of other tools in order to accelerate drug discovery and development. As always, it is important to generate good data, and then you need obviously software machines and so forth in order to navigate through the data. It does not work without wet lab experiments and owning data.
Thirdly, what I wanna say is, and I know we talk less about that, but we already have AI implemented in many of our activities when it comes to drug discovery and development. It's actually live. It's part of our strategic partnerships. Some of the larger ones have greatly benefited from our ability not just to generate mass data, but also to do pattern recognition and navigate through the data supported by our own AI tools. It's gonna be important. It's not gonna take over, but will be a tool in the tool set that you need. Finally, it's already live at Evotec. Thank you, Christiane and Paul. Thanks for taking all my questions.
The next question is a follow-up question from Falko Friedrichs from Deutsche Bank. Please go ahead.
Yes. Hi, and thanks for taking my questions. I have two. First, can you maybe help us a bit with 2026 and the moving parts between the two segments? If I understood you correctly, it sounds like we might see DMPD returning to growth, so this in turn would then mean JEB is declining. Is this correct? Connected to that, the EUR 75 million cost savings, is it fair to assume that this is mostly in DMPD? This would be the first part. Then sort of connected to that, it's about the 20% adjusted EBITDA margin target for 2028. As I see it, you stand probably at less than 3% in 2026. I understand the EUR 75 million run rate savings are probably quite tangible.
Yeah, frankly, for me it's still difficult to get to the steep ramp to 2028. What gives you confidence and visibility here? Is it, to a good degree also the JEB profitability coming up from the Sandoz deal? Or how should we think about the sort of building blocks in between the two segments? Thank you.
Maybe I'll quickly start and Paul, chip in please. Yes, you're right. We do assume a slight growth in DMPD this year. With regard to JEB, I think Paul was alluding to the effects related to the Sandoz deal in 2025. Maybe you wanna add a few comments later. The EUR 75 million cost savings are predominantly DMPD and SG&A cost. If you add central and SG&A cost then Finn, you're right. Now with regard to the midterm 20% EBITDA, going back to the four levers we talked about number one, growth in DMPD. Number two, operational excellence slash cost. Number three, the rebuilding of Just towards an asset lighter model.
Number four, our asset pipeline and the milestones and royalties that we expect from that. I think it's fair to say, 2, 3 and 4 are on track, if not even ahead of track. We talked about the asset pipeline and the progress we have made in the last call already. This has very good traction. You've seen the Sandoz deal end of last year, which basically was a fast track execution of our strategy for Just. We're now talking about operational excellence and cost out initially in our plan to get 20% EBITDA margin by 2028. We said we're targeting EUR 50 million. We're topping it up to EUR 75 million. It's fair to say 2, 3 and 4 are on track, if not ahead.
That gives us a lot of confidence. With regard to the first one, I just explained how Horizon is going to impact our ability to drive growth. We do see some traction here. That's why if you put all in a nutshell, we actually feel very confident that the 20% EBITDA by 2028 is achievable. Paul, anything to add, please?
Yeah. Hey, Falko. First of all, let me start by saying we'll be providing some more color in the April earnings update on the building blocks for 2026 and full year 2025. Focus today was more on the Horizon program. Just in terms of the building blocks to think about right now, for the two segments. When you think about the DMPD segment, we expect to see low single digit revenue growth in 2026. The Horizon program that you refer to, that we've referred to today and you commented seems to be weighted towards DMPD. That is correct. A greater contribution of Horizon into the DMPD segment is what you should think about.
When you think about the Just business, Just on a year-over-year perspective is impacted by the non-repeat of the Q4 license deal that we did with Sandoz. I mentioned earlier about EUR 65 million-ish in the fourth quarter. That said, the counter to that is as part of the sale we also divested the Toulouse facility that will give us a lift from an EBITDA standpoint as that cost comes out of the business. The remainder is the underlying growth of the business.
What I would say as well as you look at the revenue numbers, you clearly see the FX headwind that we see on the top line on a year-over-year basis, that falls through to double-digit millions into our EBITDA outlook. Hopefully, that gives you a little bit more color, but happy to go through more details in the April update.
Yes. Thank you. Very helpful.
The next question comes from the line of Brendan Smith from TD Cowen. Please go ahead.
Hi, this is Jacqueline on for Brendan. Just one question. Could you dive a little deeper into where you see the most potential for improving the monetization of the JEB segment, you know, in terms of pricing, licensing, capacity, strategy, et cetera? Are there any specific technical areas that you're targeting within DMPD for upgrade? You know, are there any metrics that you'd wanna point out that we could keep an eye on to kinda translate that improvement?
On the first one, it's already mentioned that we've been licensing so far the technology. For us, technology is actually far broader than just a continuous manufacturing process technology. The Just technology comes with cell lines, proprietary cell line technology. It comes with our own media. It comes with expression vectors that have all developed and optimized over years to work in an optimum with a continuous manufacturing process. When you think about licensing, obviously you can also think about licensing compartments of that, i.e., cell lines, media and so forth. That's one. The second question, I think, and you need to repeat it. I'm not sure I've fully got the question. Sorry.
Yeah, no worries. I was just wondering, like, are there any specific areas, I know you're looking to integrate automation, but are there any specific platform technologies that you're looking to target to upgrade? And then just the small follow-up was, you know, what kind of benchmarks or KPIs are you looking to improve in terms of, you know, efficiency and productivity?
Okay. With regard to platforms, we are actually constantly upgrading, be it in high throughput screening, be it in more the biology and disease area. We, as you probably will remember, have a large molecular patient database, which we constantly upgrade, and make available to new indications. This is something that we continuously do as part of our work. I don't wanna single out one specifically here today, but what we're doing on a constant basis is we are scanning the markets. We are looking where differentiation and technology plays more important role, talking about ADCs, for example, bispecifics and so forth. We make a decision where to prioritize our investments. This is an ongoing process at Evotec.
Great. Thank you.
The next question comes from the line of Charles Weston from RBC. Please go ahead.
Hi. Thanks for taking my follow-up. My first one is on the improved win rate that you talked about. Can you give us any KPIs around that? Sort of what is the current win rate, and what are you expecting it to get to? Secondly, I wanted to ask, did you say that you are assuming market recovery, some market recovery in 2026 in DMPD? Could you just sort of perhaps touch on the evidence around that? I'll pause there. Thanks.
Yeah. Charles, thanks for the question. You may recall with regard to number of prospects, that number went up over the course of the second half, 2025 by around about 20%, and I can confirm that this trend has continued. Obviously, prospects then need to be converted into sales. I also mentioned that we've seen a stabilization versus a, what we believe was a trough in the first half, 2025. We're gonna speak more about that in the earnings call April 8. With regard to market recovery, DMPD, we do expect that the market is stabilizing and is actually starting to recover in the second half of 2026.
Okay. Thank you very much. If I can just follow up on one other thing that you mentioned. You talked about intense price competition. I mean, we knew there had been price competition, but is there any, perhaps flavor of, that you can give us a little bit more color around that, specific areas, if it's the low touch or high touch, service areas, and whether it's sort of Asian lower cost competitors coming in?
That's particularly in areas of whether you call it low touch or areas that are more basic CRO offerings, essentials, where there's already a high degree of standardization. I would like to particularly single out basic synthetic chemistry for small molecules. This is an area that has, over the last couple of years, seen a clearer trend towards commoditization.
By the way, also an area that we're targeting here to improve our footprint optimization when it comes to the high-end businesses, in particular, the strategic opportunities where we're tapping into IP, be it our Omics platform or be it the molecular patient database, then usually we do not see price competition or price pressure because that's pretty distinct and unique offerings we are putting together and bundling for our partners. Those conversations are more centered around creating exciting outputs rather than negotiations about prices.
Okay.
The next question comes from the line of Charles Weston from H.C. Wainwright. Please go ahead.
Hi. Thanks for taking my questions. I guess, looking at the Horizon outside of and specifically in the JEB business, outside of the Sandoz transaction with the revenue commitments, I believe over EUR 300 million through 2028, where do you see or how much growth do you expect in the business, ex Sandoz? Thank you.
Yeah. Hey, Charles. I can take that. We saw substantial growth year-over-year on the non-Sandoz D&P parts of the business. Full year growth, I'll talk a little bit more about it in April, but we expect we will see full year strong growth year-over-year on that strong double-digit growth in our non-Sandoz, non-D&P business. Then when we look forward to 2026, frankly, we continue to see that non-Sandoz, non-D&P growth continuing. That's more than offsetting. Obviously, you may have read about the D&P changes right now, but that will be more than offsetting some of the budgetary constraints that we see coming from D&P.
We continue to see the strong growth year-over-year in the new and growing part of the business. We'll provide more color on that in April