Genus Plc · LSE:GNS
Genus — Investor Day (June 2021)
41 slides from Genus's investor day presentation, Jun 22, 2021
Slide 1: Capital Markets Event
CAPITAL MARKETS EVENT 22 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: Genus's strategy and business model
June 2021 CAPITAL MARKETS EVENT 3 > Genus’s strategy and business model STRATEGY BUSINESS MODEL DAIRY 1. Create differentiated and sustainable proprietary genetic solutions Harness leading technologies, talent and data to deliver industry-leading proprietary products PORK BEEF 2. Serve sustainable a
Slide 4: Capital Markets Event 2021
June 2021 CAPITAL MARKETS EVENT 4 > Capital Markets Event 2021 1 Stephen Wilson 4 Jerry Thompson CEO COO ABS Beef DAIRY Leading through Changing the sustainability game in beef 2 4 PORK BEEF 2 Dr. Bill Christianson 5 Alison Henriksen COO PIC CFO Seizing the Achieving results opportunity in and inves
Slide 5: Leading through sustainability
CAPITAL MARKETS EVENT 5 > Leading through sustainability Stephen Wilson Chief Executive Officer
Slide 6: Genus's vision – sustainability at our core
June 2021 CAPITAL MARKETS EVENT 6 > Genus’s vision – sustainability at our core Addressing the United Nations’ Sustainable Development Goals “Pioneering animal genetic improvement to help nourish the world”
Slide 7: Our impact: delivering for our stakeholders
June 2021 CAPITAL MARKETS EVENT 7 > Our impact: delivering for our stakeholders CUSTOMERS & CONSUMERS ENVIRONMENT (OPERATIONS) We help our customers to breed more productive In addition to helping customers reduce the use of and resilient animals, which produce better meat feed and other resources,
Slide 8: Genetic improvement helps farmers to produce more with less
June 2021 CAPITAL MARKETS EVENT 8 > Genetic improvement helps farmers to produce CUSTOMERS & CONSUMERS more with less Improvement in feed conversion (FCR) means Genetic improvement has contributed to PORCINE less raw material is needed to produce protein1 DAIRY dramatic increases in dairy productivi
Slide 9: Demonstrating the superior performance and sustainability of our genetics
June 2021 CAPITAL MARKETS EVENT 9 > Demonstrating the superior performance and CUSTOMERS & CONSUMERS sustainability of our genetics Productivity increases in our herds expected to Our dairy genetics outperform on key PORCINE yield 1.5+ tonnes more pork per sow by 20301 DAIRY sustainability traits fo
Slide 10: Variety of initiatives to reduce Genus's GHG emissions
June 2021 CAPITAL MARKETS EVENT 10 > Variety of initiatives to reduce Genus’s GHG emissions ENVIRONMENT Other 14% Freight 2% Materials 3% Evaluating and adapting feeding strategies to Enteric Methane Investment in anaerobic digestion, biogas capture 4% systems and carbon sequestration mitigate direc
Slide 11: Clear path to reduce GHGs by 25% by 2030
June 2021 CAPITAL MARKETS EVENT 11 > Clear path to reduce GHGs by 25% by 20301 ENVIRONMENT Genus GHG emission reductions roadmap 0% FY20 122kT -5% -10% % of GHG reduction FY30 -25% -15% Enteric Methane -20% Electricity Soil sequestration 2050 Net Zero -25% Genus Vehicles Manure - Methane capture -30
Slide 12: Seizing the opportunity in China
CAPITAL MARKETS EVENT 12 > Seizing the opportunity in China Bill Christianson COO PIC
Slide 13: China market in context
June 2021 CAPITAL MARKETS EVENT 13 > China market in context PORCINE Market size (m MPEs1) Pork consumption in China (mT) 600 (2) Top producers 60 Other producers 500 ~10-15mT less due to ASF impact on 50 supply, more than US 400 annual consumption 300 40 200 ~60% 30 100 35%-40% ~50% ~50% ~65% ~70%
Slide 14: ASF has accelerated the opportunity for Genus PIC
June 2021 CAPITAL MARKETS EVENT 14 > ASF has accelerated the opportunity for Genus PIC PORCINE China Pig Price (RMB /kg) 50 40 30 20 Current est. cost of production: RMB13-19/kg 10 0 Jan 14 Jan 15 Jan 16 Jan 17 Jan 18 Jan 19 Jan 20 Jan 21 Pre-ASF Initial ASF outbreak ASF endemic Production Focus on
Slide 15: Strategic royalty customers and multiplication
June 2021 CAPITAL MARKETS EVENT 15 > Strategic royalty customers and multiplication PORCINE Our integrated customers are simultaneously royalty customers, contracted Case study: a key PIC China partner multipliers, and distributors for Genus 28,000 35,000 Integrated customer with Royalty Third-party
Slide 16: Genus has rapidly expanded local supply to meet growing demand
June 2021 CAPITAL MARKETS EVENT 16 > Genus has rapidly expanded local supply to meet growing demand for our genetics PORCINE We have grown supply to support our Chinese customers’ growth and transitioned to a contracted model Royalty business accelerating in China PIC China sales volume (m MPEs)2 10
Slide 17: China - a home market for PIC
June 2021 CAPITAL MARKETS EVENT 17 > China - a “home” market for PIC PORCINE HOME LOCAL PRESENCE LOCAL SUPPLY STRATEGIC RELATIONSHIPS PIC China headcount Jointly accelerate growth of PIC 250 Today 95% of PIC genetics in China China team is Chinese • BCA-PIC commercial/supply deal 200 Beijing Capital
Slide 18: Delivering PRRS resistant pigs
CAPITAL MARKETS EVENT 18 > Delivering PRRS resistant pigs Elena Rice Chief Scientific Officer
Slide 19: PRRS resistance programme – animal wellbeing and sustainability through technology
June 2021 CAPITAL MARKETS EVENTS 19 > PRRS resistance programme – delivering animal wellbeing and sustainability through technology Founder Animal Production / Optimisation Expand to second Internalize founder NA facility for animal production increased production Disease and Phenotypic Testing of P
Slide 20: How does the edit work?
June 2021 CAPITAL MARKETS EVENTS 20 > How does the edit work? What is the edit and how it works PRRS virus PRRS virus Virus Virus cannot binds bind to CD163 5 edited protein to CD163 enter cell CD163 protein protein CRISP Cas9 domains complex CRISPR Cas9 complex • CRISPR removes virus binding site i
Slide 21: Pioneering a path to producing edited animals
June 2021 CAPITAL MARKETS EVENTS 21 > Pioneering a path to producing edited animals Overall path to producing desired edited animals Test and validate edits & reagents in Produce edited animals, select valid Produce edited embryos vitro to efficiently deliver an accurate edits, assess stability acro
Slide 22: Breeding of gene edited animals
June 2021 CAPITAL MARKETS EVENT 22 > Breeding of gene edited animals 1st Generation - Mixture of edits 1st •When we edit pigs we select out any that don’t have the desired edit •Selected pigs will have at least one copy of the correct edit → Pigs with correct edits are bred with unedited pigs 2nd Ge
Slide 23: March 2021 – first generation live animal disease challenge successful
June 2021 CAPITAL MARKETS EVENTS 23 > March 2021 – Genus first generation live animal disease challenge successful Created two groups of animals Infected both groups of animals Measured infection of pigs Evaluate PRRS edit stability with European & Asian PRRS (through viral replication & – edited an
Slide 24: Building our intellectual property position
June 2021 CAPITAL MARKETS EVENTS 24 > Building our intellectual property position CRISPR Editing – Genus own filings 2016 (Caribou) – 2021 • First PRRS • Genus signs • Genus has the resistant research • Genus secures agreement with exclusive rights to pigs developed by strategic BCA to pursue Roslin
Slide 25: Regulatory Process
June 2021 CAPITAL MARKETS EVENTS 25 > Regulatory Process Phase I - Product Claim and Methods 2021 BCA 1.Product Definition Submitted Accepted 2.Molecular Characterisation of Altered DNA Submitted Genus’s strategic partner BCA is pursuing the same development and regulatory path in China in par
Slide 26: A clear path to regulatory approval
June 2021 CAPITAL MARKETS EVENTS 26 > A clear path to regulatory approval Founder Animal Production / Optimisation Expand to second Internalise founder NA facility for animal production increased production Disease and Phenotypic Testing of Purelines (2 generations) Research Challenge Activities Gen
Slide 27: Changing the game in beef
CAPITAL MARKETS EVENT 27 > Changing the game in beef Jerry Thompson COO ABS Beef
Slide 28: Beef – a large and diverse industry
June 2021 CAPITAL MARKETS EVENT 28 > Beef – a large and diverse industry BOVINE European Native Breeds Tropical Native Breeds Beef x Dairy (e.g. Angus) (e.g. Nelore) (e.g. Angus x Holstein) European x Tropical (e.g. Angus x Nelore)
Slide 29: Sizeable opportunity to produce more sustainable beef
June 2021 CAPITAL MARKETS EVENT 29 > Sizeable opportunity to produce more sustainable beef with superior genetics and breeding strategies BOVINE Native beef breeds (Natural service and AI) ~24m head ~29m head ~0.8m head Beef x Dairy (mainly AI) ~2m head ~1m head ~0.6m head Beef production1 12mT 9mT
Slide 30: Strong growth in the adoption of ABS beef genetics
June 2021 CAPITAL MARKETS EVENT 30 > Strong growth in the adoption of ABS beef genetics across our core markets BOVINE Sales units Sales units Sales units (‘000) (‘000) (‘000) 2,500 2,500 1,000 2,000 2,000 800 62% 1,500 1,500 600 63% 58% 58% 100% 1,000 69% 1,000 400 99% 99% 64% 100% 22% 37% 500 500
Slide 31: Adoption of sexed semen technology has created an opportunity to grow beef-on-dairy
June 2021 CAPITAL MARKETS EVENT 31 > Adoption of sexed semen technology has created an opportunity to grow beef-on-dairy BOVINE Sexed semen allows farmers to replace dairy animals with fewer We have successfully grown volumes of our matings, allowing the rest of the herd to be bred for beef calves s
Slide 32: ABS XBlack – a proprietary index for tropical cross breeding
June 2021 CAPITAL MARKETS EVENT 32 > ABS XBlack – a proprietary index to identify which ABS sires deliver most value for tropical cross breeding (F1) BOVINE ABS XBlack delivers demonstrably higher performance to Brazilian beef farmers (average performance of F1 XBlack versus Nelore animals) Carcass
Slide 33: Innovating with new sales channels
June 2021 CAPITAL MARKETS EVENT 33 > Innovating with new sales channels BOVINE Strong customer engagement in our latest digital beef sales event Business leads engaged 2,500+ Customer conversion 45%+ New customers 25%+ Beef sales volume in Latin America (000s) 2,500 2,000 29% 1,500 22% 1,000 27% 500
Slide 34: NuEra - proprietary genetics for beef-on-dairy and F1 tropical systems
June 2021 CAPITAL MARKETS EVENT 34 > NuEra - creating proprietary genetics designed to perform in terminal beef-on-dairy and F1 tropical systems BOVINE Growing NuEra programme to meet Build proprietary, differentiated genetics to serve the beef value chain in key markets, validate demand for our gen
Slide 35: NuEra genetics demonstrating additional profitability and reducing GHG emissions
June 2021 CAPITAL MARKETS EVENT 35 > NuEra genetics are demonstrating additional profitability in customer trials and reducing GHG emissions1 BOVINE Average increase in profit per head for NuEra calves compared We ran a UK trial involving 149 calves from six sires, which to other beef-on-dairy produ
Slide 36: Leveraging superior performance across the beef supply chain
June 2021 CAPITAL MARKETS EVENT 36 > Leveraging superior performance across the beef supply chain to drive pull-through demand BOVINE Cow Calf Stocker Feedlot Packer Retail 1 2 Meeting consumer demand for high quality product at affordable prices Genus demonstrates 3 value of animals bred with NuEra
Slide 37: Achieving results and investing for the future
CAPITAL MARKETS EVENT 37 > Achieving results and investing for the future Alison Henriksen Chief Financial Officer
Slide 38: Strong financial performance, delivering shareholder returns
June 2021 CAPITAL MARKETS EVENT 38 > Strong financial performance, delivering shareholder returns Grow adjusted operating profit : 10% CAGR1 Convert profit to cash : 90%+ cash conversion1 (constant currency, ex. gene editing) (net cash from operations : op. profit ex. JVs) 35% 127% Genus 101% 100% m
Slide 39: Our businesses are both growing; market context and business models differ
June 2021 CAPITAL MARKETS EVENT 39 > Our businesses are both growing; market context and business models differ 140 Adj. Operating Profit inc. JV 131 50% 80 Adj. Operating Profit inc. JV 40% 124 Adj. Operating Margin excl JV Adj. Operating Margin excl JV 120 70 35% 101 95 95 45% 60 100 30% 50 80 37
Slide 40: Cash generative business funds strategic investments and dividend growth
June 2021 CAPITAL MARKETS EVENT 40 > Our cash generative business enables us to fund strategic investments and dividend growth Net debt (£m) Selected M&A £500m+ invested in the period 1.2x 0.8x EBITDA1 EBITDA1 Jun 15 Dec 20 Dec 20 (pre IFRS16) (post IFRS16) (1) Net Debt to EBITDA as defined under ou
Slide 41: Q&A with Genus Leadership
June 2021 CAPITAL MARKETS EVENT 41 > Q&A with Genus Leadership Results driven Stephen Wilson Alison Henriksen CEO CFO Pioneering Customer centric Dr. Elena Rice Dr. Bill Christianson CSO COO PIC Responsible Dr. Nate Zwald Jerry Thompson COO ABS Dairy COO ABS Beef People focused Dan Hartley Angelle R