Evolva Holding S.A.

Paul Verbraeken – IR-Stephan Herrera Oliver Walker – Chief Executive Officer Scott Fabro – Chief Operating Officer

Sebastian Bray – Berenberg Sara Welford – Edison John Levin – Levin Capital

Good morning everyone and welcome to the call. But before we begin we need to take care of some formalities and during this call, we will make forward-looking statements about events and circumstances that have not yet occurred, including projections of Evolva’s operating activities, our strategic plans and the anticipated financial impact on our business and financial results for 2018 and beyond.

Such forward-looking statements are subject to known and unknown risks uncertainties and other factors, which may result in a substantial divergence between the actual results financial situation, development or performance of the Company and those explicitly or implicitly presumed in these statement. Against the background of these uncertainties participants in this call should not place under reliance on forward-looking statements.

The Company assumes no responsibility to update forward-looking statements or to adapt them to future events or developments. In today's call Oliver Walker and Scott Fabro will elaborate the progress achieved in the first half and will be available for Q&A afterwards.

Before we begin I'd like to note that the press release and the slides are available for download on our website. This call is being recorded and will be made available for playback as a podcast on Evolva’s website about an hour after this call.

With that I turn the call over to Oliver.

Thank you all and welcome everyone to our today's call on our half year 2018 results. I am happy to speak to you today as the new CEO of Evolva.

Evolva is a great company with great people. We are active in very interesting fields all of them with great potential for Evolva.

In addition to the significant business opportunity each field’s of activity have favorable characteristics and a supporting topic. Sweeteners and pest control products are two obvious examples.

To exploit these potentials is our ambition, it systematic and hard work but also innovation, creativity and flexibility that will get us there. But now, back to the main purpose of our today's call, which is to report on our first half year results and provide you additions of state as well as some glance to the future of Evolva.

We move over to the slides with the highlights of the first half 2018. I would like actually today to comment on the specially three highlights and the most important one is the first of power point.

It’s also at the end the key performance indicator we most closely track beside EBITDA, which is product sales. Product sales doubled as you could read in the first half of 2018.

It is yet a small basis still, but we see more and more robust sales growth kicking in, and we feed it being a result of a growing customer pipeline as we become more efficient in managing sales cycle. It is also contributing to more robust sales growth and also we see customers making good progress in the sales cycle.

Placing the end, their orders or reordering in. The second power point I would like to highlight on this slide is number four that we are on track to build the business with nootkatone in pet control.

Pest control is sales represent a significant business opportunity for us that will be instrumental to contribute to the acceleration of the top line growth in future years. Last but not least, on this slide I would like to highlight the last power point, which talks about us being on track to deliver 2018 results.

This is a very important one, because it demonstrates as we start to become a company with predictable performance. Let's, move over to the next slide our aspirations and goals.

The main purpose here is to show you that we will not take a complete different direction but we will pursue the right direction we have taken in a little bit different fashion certainly. But we are keeping the direction that we have taken.

Before we determined last year, how the transformation of our business should look like, we carefully reflected on where the company stood. But as it is owned and what strategy would be best deployed to commercialize before mentioned assets.

Even though the sale numbers are still small as I already said, demand from customers in the different fields we are active in confirms the strategic direction taken. Having said this, after a period of around one year, restructuring the company and slimming down activities we now entered the next phase of the development of Evolva which is to build the business starting with the products that are commercial today especially the two we commercialize our own resveratrol and nootkatone.

For that we will put all our focus on commercial activities and building a scalable operation. This will include the acceleration of our Company's activities too.

Moving over to the next slides, now the question is how do we generate value of ideas, IP and product. This slide shall show in a graphical form our value generation strategy.

Research and development continues to be very relevant, however with the clear focus and geared towards building our business, currently R&D is focused mainly on lowering cost to manufacture our product, a critical goal to be achieved to create positive and attractive product margins. However to build our know how on technology, we continue with R&D partner project, if A, they are fully funded and B, they help building our business by either truly adding know how and technology or offering a route to an income stream in form of a royalty or product sales.

The commercialization of our products and technology is our priority. Having said this anyone requirements for commercialization and considering the capabilities of Evolva commercialization can take different forms.

This includes to enter into partnerships for commercialization besides commercializing the product our own, like in the case of resveratrol and nootkatone. So the example commercializing with the help of partners has been EverSweet.

As you can see out of this graphical, we have running activities and assets in all of the areas listed. Some of them see the middle block, we have almost forgotten while they are still organized to generate value for Evolva in the future.

With this I will hand over to Scott, who will walk you through the updates on our commercial activity.

Thanks, Oliver and good morning everyone. So, I will begin with a few comments on our nootkatone product.

As you all know, we have been selling nootkatone into the flavor and fragrance market for some time now and nootkatone continued last year's growth trend well into 2018. We're optimistic in our future growth, as we continue expanding our commercial network into Asia and Latin America.

On top of that for now are Flavors and Fragrances. Pest Control market segment could be an additional and substantially larger commercial opportunity for nootkatone.

As we have stated before we have been working in close collaboration with the United States Center for Disease Control and Prevention, in short the CDC in September of last year we were awarded a contract by the U.S. government agency BARDA, which is the Biomedical Advanced Research and Development Authority and the CDC to advance the development of a safe effective and sustainably sourced product that can provide a new form of protection against mosquitoes that carry diseases like Zika.

Nootkatone, may one day be used against mosquitoes that spread other diseases but also for the benefit of the Global Public Health against other important biting pests such as ticks that cause Lyme’s disease. Our nootkatone is now in registration approval process for pest control use with the United States Environmental Protection Agency or the EPA.

This process may still be completed late this year, could also slip one or two months into 2019 as it a government agency and you never know how those play out in a timely basis. But it remains today on track, in parallel I can also report that we are now very actively engaged with potential customers and we look forward to bringing this product to market post the regulatory approval process.

Then moving on resveratrol. Following our launch of Veri-te, our branded high purity contaminant-free resveratrol revenues continued their rapid growth trajectory into 2018.

We've also signed several more distribution agreements and are expanding our commercial reach. In April of this year, we launched a new cold-water dispersible resveratrol powder and this innovative application represents first in the resveratrol market and opens up aqueous product and beverage type applications with resveratrol for our customers.

Initial feedback from potential customers has been positive and we believe this new application will further boost resveratrol’s growth prospects. I would like to conclude my remarks with the EverSweet product.

We are excited about the fact that Cargill has started shipping the first orders of EverSweet, sweetener product into the market. This marks a major milestone in our collaboration which began in 2013.

We should not yet expect a large amount of royalty income in 2018 as these things take a while to pick up speed in the industry. However, we are looking forward to acceleration in 2019 and well into the future.

This new agreement that we concluded with Cargill on March has some financial benefits for Evolva, which Oliver will explain when he discusses the numbers. So this concludes my introduction.

And I now hand it back over to Oliver for financials.

Thank you. So we are moving with this to Slide 10, product revenues continued to grow stronger, which is exactly the case.

And we are clearly on track to deliver the target for 2018. The total revenue of $3.8 million is more and more – this number of total revenue is more and more relevant.

Looking at how much of our cost we are covering while actually the key performance indicator to see what progress we make commercially certainly is product revenues, as already mentioned. R&D revenues will go sometimes up and down as we have always said.

But at this point in time, decline in line with our strategy towards fully funded projects that add know-how and technology. Moving over to expenses, expenses have come down considerably as predicted which as a result of our restructuring efforts.

Manufacturing we see a lowering of cost per kilogram, our main KPI that we look at per product, even per product category within our two products. R&D has also come down significantly, the measures that we have taken in order to make R&D more focused and CG&A, commercial and general and administrative activities have also seen a lowering of our expenses.

The lowering is predominantly and that's really the very large part, having taken place in G&A because on a net basis, commercial expenses have increased. But we have a much healthier mix within CG&A towards commercial activities before it was more geared towards G&A.

In the future we'll continue with dynamic resource allocation and realizing further efficiencies that will come back to that a little bit later. Moving to the next slide, our financial position with a cash position of CHF75 million at the end of June.

We closely track our own financial plan which is the basis still for our last year’s communication of mid-term targets that we want to achieve. Getting to the next slide, this is one that we have shown actually multiple times.

However not all the boxes were ticked off at that point in time, today we can absolutely report that we have completed all major parts of the transformation a little bit on this slide. And as we have stated in our press release by the end of this year, we will have also fully implemented our restructuring programs.

If we see or look into the next slide, major part of restructuring completed. Then this is actually an important one.

We have not only or we actually do not have just slims down organization but we have a focus now on all levels, number one. Number two the activity, set of activities are matching our core activity of our business.

So it’s a great basis to execute our commercial and business building activities from and this more focused – clearly more focused organization makes actually the realization of corresponding plan much more efficient and effective. Now you may wonder what we will obtain going forward and that’s actually the next slide, which is type of which are the other elements to next phase of Evolva development.

We have reported in last year already as we transform the company into a product based company. This was an important step for us to take.

However, the next step is to take it from a product based company through a customer focused company. This is a journey from offering products to offering solutions thereby also in a much better position to address the value in use.

What that actually means. Now bullet point number two, develop ingredient systems and product portfolio to meet functional needs of customers.

This is important as we see that our customers, we could serve either actually with more than the product portfolio that we have today. So these product portfolio expansion the functionalities to add is all the means to meet the functional needs of our customers to which the ingredient powder alone would only be one part to satisfy their needs.

One analogy it’s a little bit, we also do not ship a computer to a consumer today without the application software so Microsoft Office typically is on and Windows anyway on these computers because only then you have the real benefit and you can address the real need of the consumers. Number three is the expansion of market presence geographically and is also sort of a penetration of the different geographies at the same time.

This can take place as we make further progress on the regulatory front, getting approval in more and more countries. But second also as we are becoming better and better in establishing a more and more effective network of distribution partners in more and more geographies of our globe.

The fourth bullet point, I just touched on before which is the dynamic resource allocation, which what that means is certainly that we will allocate resources to the different activity levels and the different areas of our business. And at the same time, we will certainly always try to further realize efficiencies.

This is a very important point however because when growing a business and you do not do this dynamic resource allocation, it usually creates some cost that are not very effective to build the business. Last bullet point is also a very important one.

Perhaps it is being viewed as a boring one, but is an essential one to become a professional company. And this is all about our organization, it structures and processes.

We want to be professional, flexible, fast and decisive. With that, before we actually conclude with our presentation part.

I just want to go quickly through our outlook for 2018. We look forward as we have said to our product maintaining the growth momentum as well in the second half of the year.

There are multiple elements today it is that customers are reaching the final steps of the sale cycle, placing first orders, there are more and more customers starting to place or continue even to place their second and third and fourth orders. And what we can also see in the case is where we are not replacing existing market demand.

But we are helping to create market demand that the product of our customers start to grow and as a consequence of this actually the demand for our products are growing too. Its still small numbers admittedly but the momentum is building.

The geographical expansion I have already mentioned and the new functionalities such as four resveratrol cold-water dispersible functionality we have already also mentioned, which will all help to actually further, not only keep up the sales momentum but in future years also to accelerate growth. EverSweet, Scott has already mentioned, there we are also on track with what we have commented on before.

Restructuring we mentioned will be fully implemented by the end of the year and the U.S. EPA registration process remains on track.

So with that, I actually hand over to the operator, Miranda, if I’m correct for taking or leading us through the Q&A.

Good morning. And thank you for taking my questions.

I would have three please. The first is on the Nootkatone opportunity in tonnage terms, from memory I think it was several half years ago, Evolva had given a number or in terms of tonnage to protect 10 million pregnant women or something similar from Zika virus.

Could you please in quantitative tonnage terms outline how you would see the market developing to 2020. I assume Nootkatone is going to be the main component of the targeted revenues.

The second question is on potential cash burn and financing. If I go through your accounts and assume with the full four million provision which is I can't remember the exact name of the agency.

But essentially it relates to a project in 2008 to 2011 is paid or settled at the end of the year and at the remaining $10 million to $12 million is paid to Cargill – for Stevia. It looks like you will finish the year.

We have roughly in the region of about $55 million cash maybe a bit less. Given that you seem to be happy with your operating cash burn of about $15 million for half year, are you going to have to raise equity again in 2020 and if not is making use of the existing Yorkville financing arrangement still on the table?

Thank you.

So let me first start with Nootkatone and perhaps you can ask Scott as well. So tonnages maybe that we have sometimes talked about tonnages, this is not too useful and we obtained from talking about tonnages because in the end and that’s all about the topic that I mentioned before.

And Scott also mentioned it, it’s the functionalities to add value which means that you generate the higher average sales price per ton or per kilogram which then sort of make it a little bit odd talking about metric tons and tonnages. In general, we can say that the market demand in pest control in general is developing solid.

You see all the activities and actually the concerns around biting insects. You see more and more news also around ticks as an example.

And this is not only related to the U.S. but this is very well also into Europe and more and more areas of Europe.

So I think there is good reason to believe also reflecting what market research companies are writing, that’s the demand for pest control products will further take up. Now we have started our journey into pest control as we have reported on we are on track.

And it takes some time as we have explained the different steps towards generating sales. But we are on track and we think as we've made progress and as we see actually really very positive results, the efficacy of our product, Nootkatone in pest control that we should see if we do everything right on the way there, a great opportunity unfolding for our company.

Okay. Second question was related to cash burn, your calculations are pretty much spot on.

So absolutely confirmed and again as I mentioned before we do not have the intention to hit equity market again before turning cash positive. You never know what we will do in the future years sometimes later on who the hell knows that we will require equity capital as well.

But for the program that we have talked about next years to come we have a clear focus in bringing the company to cash break-even and on that journey if we do not plan to come back actually to the equity markets. If everything unfolds the way we have now planned and we have not been, we think actually extraordinarily aggressive but there are certainly always caveats, a plan has to be realized that’s absolutely the case but the plan is not to come back to equity market.

Will you make use of the Yorkville financing arrangement?

Well, we may – for some CMO CapEx some additional financing sources whether something like Yorkville would be adequate, I don't think so because that's again hitting the equity market in an indirect way, right. So we have actually other ideas as we sometimes also commented on if there is needs on the way to getting cash break-even and we will work on them and we will let the capital markets – you being on that call and others know in time when these instruments will be in place.

And just a last comment, could you give anything quantitative on price volume or total expected market size for Nootkatone?

The reason for that is these are really big numbers, that number one. We do not want to again talk about just big numbers, we want to make the necessary steps and realize actually the potential and sometimes we will come back don’t worry, but these are big numbers and depending on what the share is, of the value that we are generating for not only our customers but the consumers of these products in the end, the volume that we get for us can be bigger or can be a little bit let’s say smaller comparably spoken.

So there in this respect that's something we will have to see and we do not have yet the predictability and actually the line of sight to these numbers. I think it is valid to say the potential, the opportunity is really significant for our company but now actually work on the different steps, which is commercial customers that we have active discussions on.

Number two is the EPA registration to finalize this on track. And number three, it will then be actually to report our commercial customers in getting Nootkatone actually deployed in the most effective way in order to eventually hitting the market with products in a later stage.

I’ll add one small brief comment for you. One is what is interesting here regarding Nootkatone for the pest control market is that the Center for Disease and Control in the United States is solely-funded Evolva to bring this compound to market, in order to deliver it to help combat the market need against Zika, against Lyme’s disease as a better alternative to what is available in the market today.

That belief alone is what encourages us every day as we work and bring this to market. It also provides support as our customers look at what we offer and are actively working with this compound right now.

Okay, thank you very much.

Very much welcome.

Good morning. I have three questions, first of all on EverSweet.

Can you give us an update on the competitive landscape, we’ve seen that some of your competitors have launched some Stevia-based product. So if you could give us an update on that on how the shipping is going as far as you can tell on that side?

And also how far down the line all your customers as far as you can tell in terms of reformulation, you’ve mentioned that they are building an inventory. I know its always hard to know from your end but do you have any sense of when the products will actually sort of hit the shelves and when consumers will start to buy them.

And also separately on the revenue front, your chart – or your outlook shows revenue doubling. In the full year you’d actually said you expected revenues to be at least double.

So you’re now saying that you expect revenues around about sort of effectively doubling, what you've seen in the first half or are you still sticking with the least doubling? Thank you.

So I’ll let actually Scott to deal with the first one because he is coming out of that part of the industry.

Yes. Thank you, Sara.

Good questions. Couple of items, one, is I can't comment as Cargill is our partner on this and they manage all ends of the commercialization.

And go to market side of the business so you have to speak with them for those specifics. On competitive set, what competitors are offering or when products will hit the shelf et cetera, we are unable to comment on that.

What we can comment on is that market demand for, answers for low calorie sweeteners remains in the market or to reduce caloric intake in products sweetened with various other products whether they're artificial sweeteners or natural sweeteners, sugar or whatever it might be. There is demand to reduce that caloric intake and there's active projects and you can see it on the news and in print, online every day that demand hasn’t changed to try to reduce caloric intake.

So the market field looks very right for this product and I can tell you that it tastes absolutely fantastic.

Great. On the revenues, doubling of the revenues, I think what we see is and this is just because we are still small and we cook in the mean time actually also convince quite big customers becoming active costumers of ours.

We have sometimes some spiky development also of our sales. The second, is if you look at our industry you cannot have very constant flow of ordering that sometimes comes in a little bit in an erratic manner because that’s the way the businesses work of our customers as well.

And because of that we, that is my personal conviction, we want to be always realistic in this respect and not exaggerate. So, if we just see what we see and what we have seen is the first half of the year, which was a doubling and we have no reason to believe why all of a sudden the growth momentum should change.

But if you extrapolate that then it is a doubling again, also for the full year. So that’s the way it is.

Anyway, if you look at also the size of some of the orders, it somehow can make a difference to one of the other side whether you are more than doubling or just doubling. So, in this respect I think we want to realistic as mentioned.

And, that is what is also reflected in press release and our communication on the call.

Okay. thank you and just as a follow-up.

I don’t know if you are allowed to comment on this given what you’ve said about the relationship with Cargill but as far as you are aware, can you make any comments, do you know how the product - how it will reach its price relative to the competing product, can you say anything about that.

Unfortunately I'm not allowed to say anything on that but I will tell you we are very pleased to hear that the products have begun – that sales have begun and that customers are interested.

Okay, thank you.

I have two questions that may not be that comfortable answering specifically but nevertheless permit me to try and congratulations on what you're doing. With respect – asked in a related way, with respect to Stevia is it a fair inference that this product is going to come forward or is coming forward more importantly both for solid foods or intake as well as fluids.

And a lot of us started out focusing on Stevia and now nootkatone seems to have such great potential. So, the question with respect to nootkatone in broad terms, are the sales of commercial opportunity big enough relative to your market cap to sustain or increase your market cap.

So I can help you John. This is Scott.

Thank you for your question regarding EverSweet. If I understood your question correctly, can it be used or are these products used and when you get solid food versus beverage.

Or both.

So, just from observations on generally the use of non-caloric sweeteners in food and in beverage in general. In food products such as bakery et cetera, sugar in corn syrup also provides a functional benefit such as browning and bulk in the system.

And when you have a caloric, a non-caloric sweetener they do not provide this typical bulk. Okay, so they don't provide the browning characteristics, they don't do that.

They do provide the sweetness, so you are able to use it in conjunction with other sweeteners and reduce the total amount of sweetener that is used. Right, in total because you could reduce the amount of say sugar, you could take 10%, 20%, 30% of sugar out and still add the same flavor profile.

In beverages, it is ideally suited as well and it is a significant industry where a lot of calories are consumed from sugar and high fructose corn syrup. And that's where a lot of these sweeteners play in order to reduce that caloric intake.

But, it does have applications in bulk. Stevias are used in general in yogurts they're used in beverages, are used in dry mixes that are used at home, they are used in home bakery products.

So, they’re used across a wide spectrum of food products.

So, to come back to that market cap question John. That's one that I can actually not comment on because in the end it is related to share price.

Share price is not up to us to comment on. That analyst, investors, the public, whomever actually wanting to talk about this.

We have our view certainly, about the market capitalization, value generation as well. And the only thing that I can actually say this call and later calls – in later as well as is we see significant potential, commercial potential in our business.

As I always say, from which industries I am coming from where the adoption rates with customers is much, but then products are also not lasting that long. Here the adoption rates are actually slower.

Sales cycles are longer, but in the end, I think as already mentioned we make good progress. If you think of pest control as an opportunity, then it is significant one with dietary supplements, and pest control this is not the end of the line certainly.

There are more ideas but we will not talk today about them because first we want to execute on what we have on the table. And whether actually that is generating sufficient value or not that's something that is up to you and many, many colleagues around the globe in the end [indiscernible]

Thank you.

Welcome.

Yeah, good morning Oliver, Scott and Paul, and thank you for taking my question, which is regarding nootkatone. Can you shed a little bit more light on where you currently stand with gaining a commercial partner.

I would like to get a better feel for when i.e. before or after an EPA registration a partner can be communicate potentially.

Thank you.

Yeah so good questions. Couple of items, one is we're in a regulatory process with the Environmental Protection Agency and that process is ongoing and it remains on track.

So that part is independent of working with customers. You cannot launch into the market until you have approval, but we are actively engaged with commercial customers.

And not just commercial partners, where there would be say one route to market. We have numerous customers that are engaged with us on this product doing active formulation work.

Or we cannot play at this point in time.

But we do not want to stay also.

Okay, thank you guys.

Yes. So just one follow up for me, please.

Have there been discussions between Evolva and any interested further parties over the last 12 months who could potentially buy the Company. Thank you.

You hear the standard answer, we cannot comment not even in the slightest to say fashion on this question.

Would you be prepared to sell the Company at the right price.

That’s the same answer to also this question. It is like the share price, there are things that the company – that any company being stock listed actually shall never comment on, it is not appropriate.

Thank You Gentlemen there are no more questions at this time.

Good, so thanks a lot to everyone having participated on today’s call. We are looking forward to continue the dialogue and to report on our results and in the meantime we wish you actually a great day, and a good time.

Thank you very much.