Preliminary Results Year ended 30 June 2020
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PRELIMINARY RESULTS 3 > Introduction Bob Lawson Chairman
Year ended 30 June 2020 PRELIMINARY RESULTS 4 > Strong performance and strategic progress RECORD PERFORMANCE Adjusted profit before tax up 16 % (22% in constant currency) CONTINUED STRATEGIC MOMENTUM > Strong performance in extraordinary times > Resilient operations, supporting our customers > Leading product position in all our species IAIN FERGUSON APPOINTED AS NON-EXEC DIRECTOR, CHAIRMAN DESIGNATE FULL YEAR DIVIDEND 29.1 P (5% increase)
PRELIMINARY RESULTS 5 > Financial Results Alison Henriksen Chief Financial Officer
Year ended 30 June 2020 PRELIMINARY RESULTS 6 > Strong financial performance REVENUE £551.4M ADJ. OP. PROFIT EXC. GENE EDITING £81.2M +13% +17% ADJ. PROFIT BEFORE TAX £71.0M ADJ. EARNINGS PER SHARE 85.4P +22% +23% OPERATING CASH CONVERSION NET DEBT : EBITDA 127% 0.9x Growth rates quoted are adjusted results including joint ventures and in constant currency Net Debt to EBITDA is as defined under our debt facility agreement
Year ended 30 June 2020 PRELIMINARY RESULTS 7 > Volume growth Year ended 30 June 2020 Genus us PIC Genus us ABS Volume growth (%) Volume growth (%) 14% 10% 8% 12% 6% 10% 13% 8% 4% 6% Excluding China 5% 8% 2% FY19 FY20 1% 0% 6% 5% 6% FY16 FY17 FY18 FY19 FY20 -2% 4% 8% -6% -4% 2% 4% 4% -6% 0% 0% -8% FY16 FY17 FY18 FY19 FY20 FY16-FY20 are financial years (e.g. FY16 is the period July 2015 – June 2016)
PRELIMINARY RESULTS Year ended 30 June 2020 8 > Genus adjusted operating profit performance 80 Genus Adjusted Operating Profit £m 1 15.0% % Chang nge e % Chang nge e £m £m FY20 FY19 Actua ual Const stant nt 76.0 70 14.5% Genus PIC 124.3 100.6 24% 25% 64.9 60 63.1 Genus ABS 32.5 29.9 9% 12% 60.1 14.0% 50 Operating units 156.8 130.5 20% 22% 13.8% 40 13.5% R&D (65.2) (54.7) (19%) (17%) 13.4% 13.3% 30 Central (15.6) (10.9) (43%) (41%) 13.0% 13.1% 20 Adj. Operating Profit 1 76.0 64.9 17% 22% 12.5% 10 Adj. Operating Profit 81.2 72.2 12% 17% exc. gene editing 2 0 12.0% FY17 FY18 FY19 FY20 Adj. Operating Profit Adj. Operating Margin (1) Operating profit and Operating Margin represents adjusted operating results including joint ventures (2) Gene editing costs relating to PRRSv resistance programme and other gene editing initiatives
Year ended 30 June 2020 PRELIMINARY RESULTS 9 > Genus PIC PORC RCINE NE 140 Genus PIC Adj. Operating Profit £m 1 42.0% ROYALTY REVENUE 120 124.3 40.0% 100 +11% ADJUSTED 100.6 80 94.8 94.8 38.0% OPERATING PROFIT 1 60 37.9% 36.0% 40 36.7% +25% 35.8% 34.0% 20 35.2% 0 32.0% FY17 FY18 FY19 FY20 2 Adj. Operating Profit Adj. Operating Margin NORTH AMERICA EMEA 0% +27% > Market share gains; COVID-19 related > Strong growth in Russia, Spain pork processing plant closures in 2H, and Germany; key account focus; and some customer credits Mollevang & Hermitage leverage LATIN AMERICA ASIA +23% +225% > Strong growth in Brazil and all other major > +50% royalty revenue growth; countries, 9% royalty revenue growth Sharp increase in China customer breeding projects following ASF 1. Adjusted operating profit including joint ventures 2. Adjusted operating margin excluding joint ventures Note: All % changes are in constant currency and represent adjusted operating profit growth unless otherwise stated
Year ended 30 June 2020 PRELIMINARY RESULTS 10 > Genus ABS BOVINE NE SEXED VOLUME 40 20.0% +47% Genus ABS Adj. Operating Profit £m 18.0% 30 32.5 16.0% ADJUSTED 29.9 26.1 20 14.0% OPERATING PROFIT 21.3 BEEF VOLUME 13.7% 12.0% 13.4% +12% 10 12.4% +17% 10.0% 11.4% 0 8.0% FY17 FY18 FY19 FY20 Adj. Operating Profit Adj. Operating Margin NORTH AMERICA EMEA +12% 0% > Share gains through strong sexed and > Strong sexed volume growth beef-on-dairy volume growth > COVID-19 lockdown impact in H2, > Key account traction particularly France & Italy LATIN AMERICA ASIA +35% +59% > Brazil & Argentina strong > Strong growth in China > Innovative digital sales campaigns > High India growth through IntelliGen Note: All % changes are in constant currency and represent adjusted operating profit growth unless otherwise stated
Year ended 30 June 2020 PRELIMINARY RESULTS 11 > Genus R&D R&D Net Research and Development 1 £m 65.2 54.7 10.2 46.8 5.2 9.0 43.8 7.6 7.3 8.4 20.9 5.0 3.5 20.0 17.2 15.3 28.9 18.4 17.0 16.6 FY17 FY18 FY19 FY20 Other Gene editing Bovine PD Porcine PD PORCINE PRODUCT GENE EDITING BOVINE PRODUCT OTHER RESEARCH AND DEVELOPMENT UP INVESTMENT UP DEVELOPMENT UP DEVELOPMENT UP 55% 14% 2% 10% > Large investment to expand elite -30% including BCA income > Industry leading Holstein portfolio & > Bioinformatics, genome science nucleus herds proprietary NuEra beef genetics and external discovery collaborations > £3.2m profit recognized on first > One-off costs of £4.4m; farm closure BCA milestone payment 2 > IntelliGen capacity expansion and and by-product margins performance improvement (1) Less non-controlling Interest (2) Profit from the partial revenue recognition net of costs from the first BCA milestone payment of $7.0m Note: All % changes are in constant currency and positive percentages indicate increased investment expense
Year ended 30 June 2020 PRELIMINARY RESULTS 12 > Statutory income FY20 FY19 Change £m £m £m Adjusted operating profit exc JV 65.3 57.7 7.6 Net IAS 41 valuation movement 15.8 (14.7) 30.5 Amortisation of acquired intangible assets (8.5) (9.5) 1.0 Share-based payments (5.8) (3.0) (2.8) Exceptional items - Litigation and damages (16.4) (5.0) (11.4) - Pension GMP equalisation and other (2.8) (16.8) 14.0 Operating profit 47.6 8.7 38.9 Share of post-tax profit of JVs 8.9 5.1 3.8 Net finance costs (5.0) (3.9) (1.1) Profit before tax 51.5 9.9 41.6 Taxation (10.6) (3.2) (7.4) Profit after tax 40.9 6.7 34.2
Year ended 30 June 2020 PRELIMINARY RESULTS 13 > Strong financial position £m CASH CONVERSION JV cash 127% Opening Net Operating Interest and tax Capital received and New financing Closing Net Debt cashflow paid Expenditure other Dividends leases FX Debt 115% exc. IFRS 16 3 (FY19: 84%) IFRS 16 IFRS 16 impact 1 impact 1 New credit facility > Completed 24 August 2020 (17.1) 1) > 8 syndicate banks > £150m multi-currency RCF, USD125m RCF 106.2 102.6 and USD20m bond facility Net Debt:EBITDA 2 Net Debt:EBITDA 2 > £100m optional accordion 1.0x 0.9x (35.4) > 3 years, +1 +1 year extension options 82.9 Headroom 4.8 (18.3) > £125m headroom at 30 June 2020 (9.5) Dividend cover 2.9x (3.8) (FY19:2.6x) Impact on net debt from the adoption of IFRS 16; 1 st July 2019: £26.6m, 30 th June 2020: £24.7m (1) (2) Net Debt to EBITDA as defined under our debt facility agreement, adjusted for the impact of IFRS 16 adoption (3) Excluding the impact of IFRS 16 adoption
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