Genus Plc · LSE:GNS
Genus — FY2021 Earnings Presentation
39 slides from Genus's earnings presentation, September 2021
Slide 1: Preliminary Results
Preliminary Results Year ended 30 June 2021
Slide 2: Disclaimer
> Disclaimer This presentation has been prepared by Genus plc (“Genus” or “the Company”) and has not been independently verified. Genus is solely responsible for the contents of this document and has taken all reasonable care to ensure that the facts stated herein are true and accurate in all materi
Slide 3: Business & strategic update
PRELIMINARY RESULTS 3 > Business & strategic update Stephen Wilson Chief Executive
Slide 4: 2021 Headlines
Year ended 30 June 2021 PRELIMINARY RESULTS 4 > 2021 Headlines VERY STRONG FINANCIAL PERFORMANCE1 REVENUE ADJ. OPERATING PROFIT2,3 ADJ. PROFIT BEFORE TAX3 +4% (£574m) +27% (£89.8m) +29% (£84.8m) ADJ. EPS3 CASH CONVERSION3 FULL YEAR DIVIDEND +31% (100.9p) 113% (FY20: 128%) 32.0P (10% increase) SIGNIF
Slide 5: Volume growth
Year ended 30 June 2021 PRELIMINARY RESULTS 5 > Volume growth Full year ended 30 June 2021 Excluding China Genus PIC Genus ABS Volume growth (%) FY19 FY20 FY21 Volume growth (%) 5% 6% 5% 14% 16% 12% 14% 12% 10% 13% 10% 8% 11% 8% 15% 6% 6% 4% 8% 4% 8% 6% 2% 4% 2% 5% 0% 1% 0% 0% FY17 FY18 FY19 FY20 FY
Slide 6: Significant strategic progress in PIC
Year ended 30 June 2021 PRELIMINARY RESULTS 6 > Significant strategic progress in PIC PORCINE • Winning share with Top • Major genetic nucleus in •Møllevang and Hermitage 250 global key accounts Canada exceeding expectations across all regions • New nucleus in Brazil •Acquired Sergal • Terminal shar
Slide 7: Sustained genetic lead translating into superior performance on farm
Year ended 30 June 2021 PRELIMINARY RESULTS 7 > Sustained genetic lead translating into superior performance on farm PORCINE PIC Genetic Index – accelerating genetic gain PIC800 consistently outperforming competitors Commercial Pig Index PIC800 Economic Advantage in trials1 $7 (US$ per pig) 160 • La
Slide 8: China: near-term volatility, long-term opportunity
Year ended 30 June 2021 PRELIMINARY RESULTS 8 > China: near-term volatility, long-term opportunity PORCINE Volatility in sow herd driven by ASF outbreaks, use of slaughter females Current price turbulence driven primarily by supply dynamics for breeding and farmer response to price movements % of so
Slide 9: PIC growing with leading Chinese producers
Year ended 30 June 2021 PRELIMINARY RESULTS 9 > PIC growing with leading Chinese producers PORCINE Royalty business accelerating in China (MPEs m)1 PIC China continues to win new customers 35 30 25 20 ASF 15 outbreak 10 5 PIC new key account - 60,000 sow farm in Zhejiang 0 FY16 FY17 FY18 FY19 FY20 F
Slide 10: Adoption of our leading sexed and beef genetics continues to grow
Year ended 30 June 2021 PRELIMINARY RESULTS 10 > Adoption of our leading sexed and beef genetics continues to grow BOVINE ABS - Global sales volume1 Building long-term relationships 29% 28% 25% • ABS long-term customer (~11k+ • One of the largest dairies in the UK 21% 22% cows on single site) since
Slide 11: Sustained leadership in dairy genetics
Year ended 30 June 2021 PRELIMINARY RESULTS 11 > Sustained leadership in dairy genetics BOVINE # of Top 100 NM$ bulls1 # of Top 100 NM$ females2 Protecting our genetics 60 Proven bulls Active genomic bulls 50 Pipeline bulls Other 40 • Strengthened terms and Competitor conditions of sale for elite bu
Slide 12: Long-term opportunity – Gene editing
Year ended 30 June 2021 PRELIMINARY RESULTS 12 > Long-term opportunity 1 – Gene editing 1 GENE EDITING PRRSv RESISTANCE PROGRAMME1 DAIRY BEEF Good progress in FY21 • Expanded edited pig populations 4 PORK AQUA • Resistance to PRRSv demonstrated to both European and US PRRSv types • Product claim and
Slide 13: Long-term opportunity – Biosystems engineering
Year ended 30 June 2021 PRELIMINARY RESULTS 13 > Long-term opportunity 2 – Biosystems engineering 2 BIOSYSTEMS ENGINEERING INTELLIGEN – GEN 2 • Second generation sexing instrument launched Aug 2021 • ‘Gen 2’ machines are already successfully sexing semen in our Dekorra facilities (US) • Deploying in
Slide 14: Long-term opportunity – Reproductive biology
Year ended 30 June 2021 PRELIMINARY RESULTS 14 > Long-term opportunity 3 – Reproductive biology 3 REPRODUCTIVE BIOLOGY We have built the foundations to accelerate discovery Science Genus capability The opportunity Short term Improve the efficiency and quality of embryos • Science of animal reproduct
Slide 15: Long-term opportunity – Aquaculture genetics
Year ended 30 June 2021 PRELIMINARY RESULTS 15 > Long-term opportunity 4 – Aquaculture genetics 4 AQUA XELECT MINORITY INVESTMENT • Xelect: world class aquaculture genetic services company • Genus acquired a 39% stake in Xelect in March 20211 • Deal provides access to R&D capability and helps to ass
Slide 16: Sustainability: progress and impact
Year ended 30 June 2021 PRELIMINARY RESULTS 16 > Sustainability: progress and impact Improving the sustainability of our customers’ farms Reducing emissions from our operations Reducing emissions from our animals Decarbonising our energy supply Migrating our fleet to alternative fuels Dairy bull sus
Slide 17: Financial Results
PRELIMINARY RESULTS 17 > Financial Results Alison Henriksen Chief Financial Officer
Slide 18: Genus adjusted profit performance
Year ended 30 June 2021 PRELIMINARY RESULTS 18 > Genus adjusted profit performance FY20 % Change % Change £m FY21 restated3 Actual Constant 100 Genus Adjusted Operating Profit £m1,3 92.5 20.0% Full year results Genus PIC 135.9 124.3 9% 16% 90 19.0% 89.8 Genus ABS 36.4 32.5 12% 21% 80 76.0 18.0% Oper
Slide 19: Strong performance vs. medium term objectives
Year ended 30 June 2021 PRELIMINARY RESULTS 19 > Strong performance vs. medium term objectives Grow adjusted operating profit : 10% CAGR2 Convert profit to cash : 90%+ cash conversion2 (constant currency, inc. JVs, exc. gene editing) (net cash from operations : op. profit exc. JVs) 37% 128% 113% 101
Slide 20: Genus PIC
Year ended 30 June 2021 PRELIMINARY RESULTS 20 > Genus PIC PORCINE Genus PIC Adj. Operating Profit £m1 150 Full year results 135.9 45.0% ROYALTY REVENUE 124.3 +11% ADJUSTED 100 94.8 94.8 100.6 40.0% OPERATING PROFIT1 50 38.9% 35.0% +16% 35.8% 36.7% 37.9% 35.2% 0 30.0% FY17 FY18 FY19 FY20 FY21 2 Adj.
Slide 21: Genus ABS
Year ended 30 June 2021 PRELIMINARY RESULTS 21 > Genus ABS BOVINE Genus ABS Adj. Operating Profit £m SEXED VOLUME 40 20.0% +29% Full year results 18.0% 30 36.4 32.5 16.0% 29.9 ADJUSTED 20 26.1 14.0% 14.6% OPERATING PROFIT 21.3 13.4% 13.7% 12.0% BEEF VOLUME +21% 10 12.4% +22% 11.4% 10.0% 0 8.0% FY17
Slide 22: Genus R&D
Year ended 30 June 2021 PRELIMINARY RESULTS 22 > Genus R&D R&D Net Research and Development1 £m Full year results 65.2 62.5 54.7 10.2 13.3 46.8 5.2 43.6 9.0 7.6 7.6 7.3 8.4 20.9 5.0 3.5 19.7 20.0 15.3 17.2 28.9 18.4 21.9 16.6 17.0 FY17 FY18 FY19 FY20 FY21 Other Gene editing Bovine PD Porcine PD Test
Slide 23: Genus central costs
Year ended 30 June 2021 PRELIMINARY RESULTS 23 > Genus central costs Central £m Full year results 20.8 20.0 1.5 2.6 5.2 2.7 14.1 14.7 FY20 FY21 One-off items GenusOne SaaS Config (ongoing) Ongoing HQ > £2.6m of “One-off items” in FY21 (FY20: £1.5m) • Covid employees award £1.9m • Other £0.7m > Good
Slide 24: Statutory income
Year ended 30 June 2021 PRELIMINARY RESULTS 24 > Statutory income FY20 FY21 Change restated1 £m £m £m Adjusted operating profit exc JV 76.9 60.1 16.8 Net IAS 41 valuation movement (10.8) 15.8 (26.6) Amortisation of acquired intangible assets (7.4) (8.5) 1.1 Share-based payments (7.7) (5.8) (1.9) Exc
Slide 25: Strong financial position
Year ended 30 June 2021 PRELIMINARY RESULTS 25 > Strong financial position £m CASH CONVERSION Opening Other non- Closing Net Debt Jul-20 Operating cashflow Interest and tax paid Capital JV income Expenditure and other Dividends cash Investments movement 2 FX 3 Net Debt Jun-21 113% (FY20: 128%) Stron
Slide 26: Capital Expenditure and Investments
Year ended 30 June 2021 PRELIMINARY RESULTS 26 > Capital Expenditure and Investments Capital Expenditure Investments PIC’s Atlas elite nucleus, Canada ABS’s Leeds bull housing facility, Wisconsin 33.8 16.9 0.9 29.7 5.1 2.4 5.1 > New PIC genetic nucleus under > Acquired the supply chain, trade and co
Slide 27: Summary & outlook
PRELIMINARY RESULTS 27 > Summary & outlook Stephen Wilson Chief Executive
Slide 28: Summary and outlook
Year ended 30 June 2021 PRELIMINARY RESULTS 28 > Summary and outlook Very strong +29% adj. PBT1 with performance both PIC & ABS growing strongly Significant Sustained genetic lead driving growth strategic with key accounts globally progress Pipeline Building R&D capabilities opportunities and opport
Slide 29: Appendices
PRELIMINARY RESULTS 29 > Appendices
Slide 30: Proportion of total porcine volumes under royalty
Year ended 30 June 2021 PRELIMINARY RESULTS 30 > Proportion of total porcine volumes under royalty North America EMEA 77% 97% 97% 98% 96% 98% 70% 68% 68% 64% FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 Latin America Asia 81% 78% 58% 77% 77% 77% 46% 48% 44% 37% FY17 FY18 FY19 FY20 FY21 FY17 FY1
Slide 31: Porcine royalty revenue growth
Year ended 30 June 2021 PRELIMINARY RESULTS 31 > Porcine royalty revenue growth North America EMEA 30% 3.2% 20% 2.5% 13% 0.2% 1.0% 11% 11% -0.7% FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 Latin America Asia 70% 50% 15% 45% 14% 35% 9% 9% 19% 3% FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21
Slide 32: Financial results
Year ended 30 June 2021 PRELIMINARY RESULTS 32 > Financial results FY20 FY21 % Change % Change restated1 Actual Constant £m £m Currency Currency Revenue 574.3 551.4 4% 10% Adjusted Operating Profit inc JV exc 97.4 76.0 28% 37% gene editing Adjusted Operating Profit inc JV 89.8 70.8 27% 36% Net finan
Slide 33: Genus PIC results
Year ended 30 June 2021 PRELIMINARY RESULTS 33 > Genus PIC results FY21 FY20 % Change % Change Actual Constant £m £m Currency Currency Revenue 315.6 298.8 6% 11% Adjusted Operating Profit exc JV 122.9 113.3 8% 14% Adjusted Operating Profit inc JV 135.9 124.3 9% 16% Adjusted operating margin exc JV 3
Slide 34: Genus ABS results
Year ended 30 June 2021 PRELIMINARY RESULTS 34 > Genus ABS results FY21 FY20 % Change % Change Actual Constant £m £m Currency Currency Revenue 250.1 237.6 5% 13% Adjusted operating profit 36.4 32.5 12% 21% Adjusted operating margin 14.6% 13.7% 0.9pts 1.0pts
Slide 35: Cash flow statement
Year ended 30 June 2021 PRELIMINARY RESULTS 35 > Cash flow statement FY20 FY21 Variance restated1 £m £m £m Adjusted operating profit exc JV 76.9 60.1 16.8 Depreciation and amortisation 28.6 33.5 (4.9) Adjusted EBITDA 105.5 93.6 11.9 Working capital 5.6 3.3 2.3 Biological assets (12.8) (2.9) (9.9) Pe
Slide 36: Exchange rate sensitivity
Year ended 30 June 2021 PRELIMINARY RESULTS 36 > Exchange rate sensitivity FY21 FY21 Spot @ Profit Average1 Closing1 2 Sept 2021 Sensitivity £m2 Genus’ geographic profile Chinese Yuan 8.92 8.93 8.93 3.5 can lead to translational currency impacts Mexican Peso 28.1 27.6 27.6 1.4 We monitor key rates B
Slide 37: Return on adjusted invested capital
Year ended 30 June 2021 PRELIMINARY RESULTS 37 > Return on adjusted invested capital FY20 FY21 restated1 £m £m Adjusted operating profit inc JV 89.8 70.8 Tax rate 22.5% 23.7% Adjusted operating profit after tax 69.6 54.0 Equity attributable to owners of the company 498.1 495.5 Add back: Net debt 105
Slide 38: PRRSv resistance programme
Year ended 30 June 2021 PRELIMINARY RESULTS 38 > PRRSv resistance programme Founder Animal Production / Optimisation Expand to second Internalize founder NA facility for animal production increased production Disease and Phenotypic Testing of Purelines (2 generations) Research Challenge Activities G
Slide 39: Glossary
Year ended 30 June 2021 PRELIMINARY RESULTS 39 > Glossary Artificial insemination (‘AI’) – Using semen collected from a bull or boar to impregnate a Index/Indices – A formula incorporating economically important traits for ranking the cow or sow when in estrus. Artificial insemination allows a genet