Oxford Nanopore Technologies Plc · LSE:ONT
Oxford Nanopore Technologies — H1 2024 Earnings Presentation
32 slides from Oxford Nanopore Technologies's earnings presentation, Sep 3, 2024
Slide 1: 2024 Interim Results Presentation
2024 Interim Results Presentation 3 September 2024
Slide 2: Disclaimer
2 Disclaimer This presentation has been prepared by Oxford Nanopore Technologies plc (“Oxford Oxford Nanopore products are not intended for use for health assessment or to Nanopore”) for information purposes only and does not constitute an offer of, or diagnose, treat, mitigate, cure or prevent any
Slide 3: H1 2024 performance
3 H1 2024 performance Revenue: Balance Sheet2: 74% Gross Margin: £84.1m £397.1m +12.4% underlying of revenue from 58.8% FY23: £472.1m consumables sales CC growth1 +120bps H1 in-line with 2024 guidance FY 2024 guidance confirmed: • Underlying revenue growth of 20 – 30% @CC3 • Gross margin of ~ 57% 1U
Slide 4: H1 key highlights
4 H1 key highlights Completed In progress Strong progress against strategic priorities Innovation Commercial execution Operational excellence PromethION 2 integrated (P2i) Successful commercial rollout of Expansion of global logistics Early Access launch new P2 devices >1,350 in the field network to
Slide 5: HY24 Financial performance
HY24 Financial performance Nick Keher, CFO
Slide 6: H1 performance in-line with FY guidance
6 H1 24 performance in-line with FY 24 guidance £84.1m 58.8% £(61.6)m £397.1m HY23: £86.0m HY23: 57.6% HY23: £(39.4)m FY23: £472.1m Revenue Gross margin Adjusted EBITDA Strong Balance Sheet Broadly flat CC growth +120 bps YoY with underlying Loss up 56% on prior year Enhanced further post period end
Slide 7: Snapshot of H1 revenue performance and mix
7 Snapshot of H1 revenue performance and mix Devices and services1: £21.6m £86.0m £84.1m Flat YoY COVID £5.5m COVID £1.2m +7% underlying growth EGP: £4.9m EGP £0.3m 26% 12.4% underlying Underlying Revenue CC £82.6m £84.1m Underlying £75.6m 74% Consumables2: £62.4m (3)% YoY +10% underlying growth HY
Slide 8: H1 performance by region and product range
8 H1 performance by region and product range H1 regional performance H1 underlying performance by product range Underlying growth driven by EMEAI and APAC Underlying growth of 39% YoY in the PromethION product range £32m £31m APAC £18.4m £28m +5% reported Americas £31.6m £23m £23m +11% underlying £2
Slide 9: H1 revenue split by customer type
9 H1 revenue split by customer type Applied Industrial £10m Customers utilising sequencing for application in industrial or service setting, e.g. manufacturing or outsourced Synthetic biology 12% Research1 £59m Clinical £8m Customers funded by grants or Public funds to conduct research, e.g. 9% Cust
Slide 10: Gross margin bridge
10 Gross margin bridge +120bps Solid improvement on +380bps gross margin to 58.8%: 58.8% 57.6% (140)bps Positive underlying movements; (120)bps ü Margins on PromethION Flow Cells improved meaningfully over the period, with further scope for improvement ü Margins on devices improved due to increased
Slide 11: Improved cost control
11 Improved cost control £m H1 24 H2 23 H1 23 Revenue 84.1 83.7 86.0 • Top line revenues impacted by EGP, COVID and currency, with underlying growth +12.4% CC. Gross profit 49.5 40.9 49.5 • Gross margins improved 120bps in spite of mix and currency headwinds (combined 260bps). Adjusted R&D expenses
Slide 12: Cash, cash equivalents and other liquid assets
12 Cash, cash equivalents and other liquid assets Cash bridge FY 2023 to H1 2024 Strong cash position: Working capital inflow as efforts to optimize £472.1m position continue. Further value to unlock over coming years, particularly on inventory. £5.9m £4.3m £397.1m Assets at customers represents lar
Slide 13: Key drivers of growth underpin confidence in H2 revenue step up
13 Key drivers of growth underpin confidence in H2 revenue step up Enlarged commercial teams beginning to mature 01 Improving sales force efficiency 02 Growing opportunity funnel across each region 03 Increasing flow cell utilisation rate across installed base 04 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Produc
Slide 14: FY24 and medium-term financial guidance reaffirmed
14 FY24 and medium-term financial guidance reaffirmed FY24 guidance Medium-term guidance 20-30% CC >30% CC on a CAGR Revenue underlying revenue growth1 FY24 - FY27 Gross margin ~57% >62% by FY27 OpEx 3-8% CAGR FY24 - FY273 Adjusted EBITDA breakeven in FY27 Cashflow cashflow positive in FY28 1 Underl
Slide 15: Business highlights and outlook
Business highlights and outlook Gordon Sanghera, CEO
Slide 16: Key standout platform benefits
16 Key standout platform benefits Driving platform adoption and revenue growth Richer insights Faster time to result Accessible & affordable Highly accurate, Multi-omic data on a single tech Near-sample, real-time workflows that don’t require Scalability that enables every application by broad captu
Slide 17: To explore the full genome at scale
17 To explore the full genome at scale 30X, scalable human workflows… Prep Manual and automated workflows Sequence Nanopore only T2T workflow… Generate over 100Gb per flow cell …enabling a single platform to generate whole T2T assemblies Analyse Replacing a multi-platform method (Nanopore ultra-long
Slide 18: Innovation roadmap to <$200 comprehensive genomes
18 Nanopore provides rich comprehensive and scalable genomes Innovation roadmap to <$200 comprehensive genomes Single Nucleotide Variants Including insertions and deletions Price per Price per Price per Price per genome** genome** genome** genome** Copy Number Variants ~$690 ~$345 ~$235 <$200 Repeat
Slide 19: H1 innovation highlights
19 H1 innovation highlights Fully Supported Relentless drive for New Products New End Markets Workflows improved performance Accuracy PromethION 2 install base > 1,350 Raw read accuracy Q20 - Q26 today Raw read accuracy of ElysION Q30 in development P2(i) P2solo Methylation Output Driving strong Q-l
Slide 20: Commercial operations and target focus areas
20 Commercial operations and target focus areas Built strong regional leadership Paired with clear focus application areas Established commercial operations to drive long-term sustainable growth Leadership: Human genomics Cancer AMR EMEAI APAC Illumina Illumina Illumina Tempus GE Healthcare Thermo/
Slide 21: Evolution of the customer base
21 Evolution of the customer base Applied Industrial £10m Customers utilising sequencing for application in industrial or service setting, e.g. manufacturing or outsourced Synthetic biology 12% Research1 £59m Clinical £8m Customers funded by grants or Public funds to conduct research, e.g. 9% Custom
Slide 22: Commercial highlights by customer type
22 Commercial highlights by customer type Research1 £59m Applied Industrial £10m • New 10,000 genome programme for multi- • Multi-million, multi-year contract expansion ethnic Asia population (PRECISE) and other with Plasmidsaurus for rapid plasmid large-scale APAC studies in intractable sequencing.
Slide 23: Substantial opportunity underpinned by unique multi-omics platform
23 Substantial opportunity underpinned by unique multi-omics platform Distributed to point of need Our total opportunity cannot be defined by the present sequencing market. In healthcare, we are at the beginning of our journey towards broad clinical impact. Anything, anyone, anywhere: Translation To
Slide 24: Outlook and summary
24 Outlook and summary In-line H1 24 performance against challenging market • Robust underlying revenue growth; +12.4% CC • +120 bps margin expansion 2024 guidance confirmed • Underlying revenue growth of 20-30% CC • Gross margin ~57% Substantial opportunity in the medium term • Large and growing ma
Slide 25: Appendix
Appendix (NANOPORE
Slide 26: Underlying revenue reconciliation
26 Underlying revenue reconciliation £m H1 24 H1 23 Change (%) Revenue 84.1 86.0 (2.2%) Less EGP (0.3) (4.9) Less COVID Sequencing (1.2) (5.5) Underlying revenue 82.6 75.6 9.2% FX 2.4 Underlying revenue at constant currency 85.0 12.4%
Slide 27: Underlying regional revenue reconciliation
27 Underlying regional revenue reconciliation Region £m H1 24 H1 23 Change (%) Americas 31.6 32.8 (3.7)% Less COVID Sequencing (0.2) (2.0) Underlying Americas revenue 31.3 30.8 1.9% APAC 18.4 17.6 4.6% Less COVID Sequencing (0.2) (1.1) Underlying APAC revenue 18.3 16.5 10.6% EMEAI 34.1 35.6 (4.3)% L
Slide 28: Underlying revenue reconciliation - product range
28 Underlying revenue reconciliation - product range Product range £million H1 24 H1 23 Change (%) PromethION product range 32.0 27.4 16.7% Less EGP (0.1) (4.5) Underlying PromethION product range 31.9 23.0 39.0% MinION product range 28.5 34.3 (17.0)% Less COVID Sequencing (0.7) (3.2) Underlying Min
Slide 29: Adjusted expenses reconciliation
29 Adjusted expenses reconciliation £m H1 24 H1 23 Research and Development Expenses 48.0 48.2 Adjusting Items: Employer’s social security taxes on pre-IPO share awards 1.4 0.6 Adjusted Research and Development Expenses 49.4 48.8 Amortisation of Capitalised Development Costs (10.1) (8.7) Capitalised
Slide 30: Medium term revenue outlook
30 Medium term revenue outlook Underlying COVID EGP Key drivers 3YR CAGR • Higher volume customer wins >30%1 • Uptake of Q-Line from H2 2024 7-16%1 • Success with partners in non-LSRT markets • Continued growth in underlying LSRT market • Timing of larger projects £169.7m • Continued PromethION prod
Slide 31: Medium term margin outlook
31 Medium term margin outlook >62% Drivers 25-30% CAGR Mix of Device and Consumable revenues Higher volume customers +500bps ~57% Yield improvements and recycling Mix of MinION and PromethION flow cell sales Switch to consumable reordering 53.3% Industrialisation of manufacturing process and automat
Slide 32: Medium term cost base
32 Medium term cost base 3YR CAGR 3-8% Key drivers 25-30% CAGR Annualisation of headcount increases in FY24 to see growth in spend in FY24 Absolute and relative level of spend to slow through FY24-27 to a single digit CAGR through mix of increased focus and selective investments. Future investments
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