PRELIMINARY RESULTS Investor Presentation Year ended 30 June 2017
Disclaimer This presentation has been prepared by Genus (“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 material respects and that there are no material facts the omission of which would make misleading any statement in this document whether of fact or opinion. While the information contained in this presentation has been provided in good faith, neither the Company, nor any of their advisers, representatives, officers, agents or employees makes any representation, warranty or undertaking, express or implied, in respect of this presentation and no responsibility or liability is accepted by any of them as to the accuracy, completeness or reasonableness of the information provided. The issue of this presentation to the recipient does not create any obligation on the part of the issuer to provide the recipient access to any additional information or to update this presentation or any additional information or to correct any inaccuracies in this presentation or any additional information which may become apparent. The recipient should conduct its own investigation into the Company and of any other information contained in the presentation. This presentation is for information purposes only and does not constitute, and shall not be interpreted as, either an offer for sale, prospectus, invitation to subscribe for shares or debentures in the Company, or as the basis of a contract. This presentation has been prepared on the basis that it will only be made available to investment professionals and is thereby exempt from the provisions of s21 of the Financial Services and Markets Act 2000. 2
Overview Bob Lawson Chairman 3
Strong strategic progress and solid financial results > Results in line with expectations − Profit before tax up 13% (1% lower in constant currency) − Strong free cash flow − Earnings per share 69.4p, up 14% (unchanged in constant currency) > Strong strategic progress − Hermitage agreement and growing PIC royalties − Gene editing progress − Sexcel ™ launched > Dividend increased 10% to 23.6p per share 4
Financial results Stephen Wilson Finance Director 5
Results Year ended 30 June 2017 % Change 2017 2016 Actual Constant £m £m Currency Currency Revenue 459.1 388.3 18% 6% Adjusted operating profit 55.1 49.3 12% (1)% Attributable to non-controlling interest (2.1) (1.4) (50)% (19)% Adjusted share of JV profits 7.1 6.4 11% (10)% Adjusted operating profit (inc JV) 60.1 54.3 11% (2)% Finance costs (3.7) (4.6) 20% 18% Adjusted profit before tax 56.4 49.7 13% (1)% Adjusted earnings per share (pence) 69.4 60.7 14% - Dividend per share (pence) 23.6 21.4 10% 6
Volume growth Year ended 30 June 2017 Porcine Dairy & Beef Volume growth (%) Volume growth (%) 10% 6% 4% 8% 6% 5% 5% 2% 6% 1% 0% 9% 2013 2014 2015 2016 2017 4% (2%) 6% 5% (6%) 2% 4% 4% (4%) 0% (6%) 2013 2014 2015 2016 2017 7
Adjusted operating profit – by business unit % Change Year ended 30 June 2017 2017 2016 Actual Constant £m £m Currency Currency Genus PIC 94.8 78.0 22% 7% Genus ABS 21.3 22.0 (3)% (13)% Operating units 116.1 100.0 16% 2% Research and Development (43.8) (34.4) (27)% (12)% Central costs (12.2) (11.3) (8)% 5% Adjusted operating profit inc JV 60.1 54.3 11% (2)% Asia now included in global PIC and ABS business units > 8
Genus PIC % Change Year ended 30 June 2017 2017 2016 Actual Constant £m £m Currency Currency* Revenue 249.5 207.5 20% 7% Adjusted operating profit exc JV 87.7 71.7 22% 8% Adjusted operating profit inc JV 94.8 78.0 22% 7% Adjusted operating margin exc JV 35.2% 34.6% 0.6pts 0.3pts Continued growth in profit up 7% and royalty revenues up 5% > − Volumes up 4%, with 77% under royalty (+1 pt, +3 pts excluding China) Overall volumes unchanged in North America and Latin America > − Significant new stockings in North America support future royalty growth − Latin America; strong profit performance in Mexico (+11%) offsets impact of instability in Venezuela Europe profit up 26% from royalty growth and business transformation > − Hermitage initial contribution encouraging Asia volumes up 20% and profit up 60% with growth in all countries > − Strong product performance in buoyant market helped China to 80%+ profit growth 9 * All % changes are in constant currency unless otherwise stated
Genus ABS % Change Year ended 30 June 2017 2017 2016 Actual Constant £m £m Currency Currency* Revenue 195.9 172.8 13% 2% Adjusted operating profit 22.3 23.3 (4)% (15)% Adjusted operating profit less NCI** 21.3 22.0 (3)% (13)% Adjusted operating margin 11.4% 13.5% (2.1)pts (2.1)pts ABS volumes up 1% with stronger second-half performance (+8%) in improving markets > − Strong sexed volume growth of 10%, beef volumes 3% lower in challenging markets Europe volumes up 6% and profit up 8% benefiting from actions taken in 2016 and 2017 > Latin America profit up 41% with continued action to increase prices (+11%) > − Volumes 2% lower primarily due to weak beef markets North America profit down 12%, including impact from weaker beef markets > − Focus on improving commercial execution in large dairy enterprises Double digit volume growth in IVB driven by US; strong first year in Mexico > − Remaining 49% shares of IVB acquired ahead of schedule 10 * All % changes are in constant currency unless otherwise stated ** NCI = Non-controlling Interest
Genus R&D % Change Year ended 30 June 2017 2017 2016 Actual Constant £m £m Currency Currency* Gene editing 3.5 0.9 289% 251% Other research 8.4 7.1 18% 2% Porcine product development 16.6 13.5 23% 7% Bovine product development 15.3 12.9 19% 6% Research and Development inc NCI** 43.8 34.4 27% 12% Gene editing investment of £3.5m as planned > − PRRSv programme platform capability build; pregnancies for first generation of gene edited pigs created Other research up 2%; continued activities in genomic evaluation, core informatics and IP > Porcine product development up 7% > − Increased spend from lower by-product market prices and increased animal volumes Bovine product development up 6% > − GSS manufacturing and launch preparation costs in excess of £2m partially offset by efficiencies in bull development costs through De Novo and other initiatives 11 * All % changes are in constant currency unless otherwise stated ** NCI = Non-controlling Interest
Statutory income statement 2017 2016 Variance Year ended 30 June 2017 £m £m £m Adjusted operating profit exc JV 55.1 49.3 5.8 Net IAS 41 valuation movement (1.1) (17.1) 16.0 Amortisation of intangibles (8.7) (6.1) (2.6) Share-based payments (4.6) (3.8) (0.8) Exceptional items - Pension related 5.7 44.2 (38.5) - Litigation (5.3) (6.9) 1.6 - Acquisition and integration (0.6) (0.2) (0.4) - Other (including restructuring) (2.3) (0.8) (1.5) Operating profit 38.2 58.6 (20.4) - Share of post-tax profit of JVs 6.2 6.9 (0.7) - Net finance costs (3.7) (4.6) 0.9 Profit before tax 40.7 60.9 (20.2) 12
Cash flow 2017 2016 Variance Year ended 30 June 2017 £m £m £m Adjusted operating profit exc JV 55.1 49.3 5.8 Depreciation and amortisation 11.5 8.4 3.1 Adjusted EBITDA 66.6 57.7 8.9 Working capital (1.1) 1.1 (2.2) Biological assets (5.7) (3.8) (1.9) Pension deficit repair, exceptionals and other (13.5) (11.7) (1.8) Net cash inflow from operating activities 46.3 43.3 3.0 Cash conversion % 84% 88% (4)Pts Interest and tax paid (11.7) (13.3) 1.6 Capital expenditure (18.9) (18.6) (0.3) Cash received from joint ventures 8.3 3.4 4.9 Other 1.4 0.9 0.5 Free cash flow 25.4 15.7 9.7 Acquisitions and investments (30.0) (7.2) (22.8) Dividends (13.5) (12.2) (1.3) Net cash flow (18.1) (3.7) (14.4) Net Debt 111.6 89.7 21.9 13
Strong financial position Year ended 30 June 2017 2017 2016 £m £m Owners’ equity 399.3 374.5 Net Debt 111.6 89.7 Key Financial ratios: - Return on adjusted capital 19.9% 19.1% - Gearing 28% 24% - Net debt to EBITDA 1.5x 1.4x - Interest cover 37x 35x - Dividend cover 2.9x 2.8x > Dividend up 10% > £74m headroom on bank facilities 14
Business update Karim Bitar Chief Executive 15
Strong strategic progress > ABS − Leveraging De Novo, launching Sexcel ™ , growing IVB − Improving commercial execution − Launching NuEra ™ proprietary beef genetics > PIC − Growing in key markets and segments, particularly in China − Hermitage integration and partnership on track > R&D − Continuing to strengthen proprietary technology platform 16
Recommend
More recommend
