Oxford Nanopore Technologies Plc · LSE:ONT
Oxford Nanopore Technologies — H1 2023 Earnings Presentation
36 slides from Oxford Nanopore Technologies's earnings presentation, Sep 6, 2023
Slide 1: Our vision: to enable the analysis of anything, by anyone, anywhere
Our vision: to enable the analysis of anything, by anyone, anywhere Gordon Sanghera, CEO Tim Cowper, CFO THE P2: AFFORDABLE, HIGH-OUTPUT SEQUENCING FOR EVERY LAB 06 September 2023 | Interim Results COMPLETE WITH HIGH END COMPUTE, SCREEN FOR SEQUENCING AND ANALYSIS
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Oxford Nanopore Technologies plc (“Oxford Nanopore”) for information purposes only and does not constitute an offer of, or solicitation to purchase or subscribe for, any securities in which such offer or solicitation is unlawful or to any person to w
Slide 3: Who we are
Who we are SINGLE MOLECULE SENSING AGILE INNOVATION PLATFORM 1 Building on DNA/RNA to enable Delivering continuous improvement and intellectual 4 the multi-omics world of property creation tomorrow Current SUBSTANTIAL MARKET investment is OPPORTUNITY poised to SCALED OPERATIONS 2 5 support $6.21 bil
Slide 4: H1 2023 in numbers
H1 2023 in numbers £86m + 46% 57.6% £(39.4)m £485m2 on a CC basis +280bps H1 22: £(34.6)m FY22: £558m TOTAL UNDERLYING1 LSRT Adjusted STRONG BALANCE REVENUE GROWTH GROSS MARGIN EBITDA SHEET3 Total revenue for H123 is LSRT. Total revenue in H122 Growth driven by new Driven by improvements to Higher L
Slide 5: How we deploy our platform
How we deploy our platform NANOPORE SEQUENCING SCALED TO ANY DEVICE OUR FLOW CELLS Devices • Retain all the biological information, including methylation • Simple chemistry and hardware with no labels or optics required • No GC bias, access the whole genome • Read any fragment size Library preparati
Slide 6: Broad customer base
Broad customer base Supported through multiple channels BROAD CUSTOMER BASE ONE COMMUNITY “S1” Customers DIGITAL TOOLS “S2”Customers “S3”Customers REMOTE & ON-SITE SUPPORT >43,000 “Indirect” Distributor served customers community users 6
Slide 7: H1 2023 focus areas
H1 2023 focus areas Innovation driving customer growth, demanding operational excellence • P2 Solos in hundreds of labs • Nanopore community rapidly growing • Continued scale-up of manufacturing • P2(i) with developers • Deployment of automation in • New collaborations paving the way for consumable
Slide 8: Transforming PromethION
Transforming PromethION With algorithm acceleration on P24, P48, and P2 launches P24 & P48 UPGRADES P2: Democratising large genome research 4.5X increase1 From only in basecalling speed $10,455 A-series towers paired with P2 solo is rapidly MinKNOW and Dorado surpassing expectations integration. wit
Slide 9: Transforming performance with Q20+ chemistry
Transforming performance with Q20+ chemistry >90% of new flow cell orders for PromethION are for latest consumables that deliver “Q20+” performance SIMPLEX PERFORMANCE HIGH DUPLEX EARLY ACCESS 100% 80% CDS ALL +99% +99.9% 60% Accuracy 40% 20% Accuracy We only need to read 0% 2 strands for Q30 Valuab
Slide 10: Scaling our manufacturing operations
Scaling our manufacturing operations Meeting increasing demand whilst focusing on product robustness and reproducibility EXCELLENCE IN CONSUMABLE FLOW CELL MANUFACTURING SCALING LIBRARY PREPARATION MANUFACTURING Innovation Scale-up Drives product New capabilities and consistency and margin automatio
Slide 11: Accelerating commercial execution
Accelerating commercial execution Growth in technology adoption, commercial team and global footprint AMR EMEA1 APAC • Underlying AMR growth of 72% • Underlying EMEA1 growth of 57% as • Underlying APAC growth of 23% reflecting increased demand for we see increased demand for our as we see increased
Slide 12: H1 2023 Financial Review
H1 2023 Financial Review Tim Cowper, CFO
Slide 13: H1 2023 key numbers
H1 2023 key numbers £86.0m 57.6% £86.0m £(39.4)m £485m2 +46% underlying1 growth +280bps H1 22: £122.3m H1 22: £(34.6)m FY22: £558m on CC basis LSRT LSRT GROSS TOTAL ADJUSTED STRONG BALANCE REVENUE MARGIN REVENUE EBITDA SHEET Growth driven by new Driven by automation LSRT revenue offset by end Higher
Slide 14: Continued robust underlying growth in LSRT business
Continued robust underlying growth in LSRT business +22% YoY +16% CC1 £86.0m COVID Sequencing £5.5m EGP £4.9m £70.6m Underlying LSRT £75.6m COVID Sequencing £15.4m Underlying revenue +53% EGP £5.8m +46% CC1 Underlying LSRT £49.4m H1 22 H1 23 1CC= constant currency, which applies the same rate to H1
Slide 15: LSRT revenue growth driven by consumables sales
LSRT revenue growth driven by consumables sales £86.0m £70.6m +18% Consumables £64.3m Includes £9.9m COVID sequencing headwind Consumables £54.6m +36% Devices and Services1 Devices and Services1 £21.7m £16.0m H1 22 H1 23 1 Includes Licence & Warranty and other revenue 15 Consumables revenue on the g
Slide 16: Strong underlying revenue growth across all customer groups
Strong underlying revenue growth across all customer groups £m 3.8 86.0 6.8 82.0 (4.0) 11.6 70.6 • Strong underlying growth in all customer groups led by 4.0 S2: (9.9) (0.9) • S1 up 36% • S2 up 61% • S3 up 53% • Indirect up 61% H1 22 COVID EGP S1 S2 S3 Indirect H1 23 FX H1 23 Reported Reported at CC
Slide 17: LSRT revenue growth driven by strong sales in the Americas
LSRT revenue growth driven by strong sales in the Americas £m 10.3 86.0 82.0 (4.0) 3.1 70.6 12.9 • Strong underlying growth across all regions led by the Americas: (9.9) (0.9) • Americas up 72% • APAC up 23% • EMEAI up 57% H1 22 COVID EGP Americas APAC EMEAI H1 23 FX H1 23 Reported Reported at CC 17
Slide 18: Strong growth in consumable margins
Strong growth in consumable margins +280 bps • Strong growth in consumables margin reflects operational +410 bps +10 bps (140) bps improvements to flow cell 57.6% production 54.8% • Only small increase in device and services margin, despite 36% increase in revenues, mainly due to upgrade of PromethI
Slide 19: Continued investment in innovation and commercial infrastructure in H1 23
Continued investment in innovation and commercial infrastructure in H1 23 £49.0m1 £61.9m1 Total adjusted R&D expenses Adjusted S,G&A expenses (57% of LSRT sales) (72% of LSRT sales) +20% Principally due to a 24% Principally due to a 47% increase in R&D headcount +33% increase in the commercial team
Slide 20: Adjusted EBITDA
Adjusted EBITDA H1 23 H1 22 £m £m Loss for the period (70.1) (30.2) Income tax expense 3.5 2.5 Depreciation 11.2 10.0 Amortisation 8.7 6.1 Finance Income (7.2) (0.9) Other 1.1 0.6 EBITDA (52.9) (11.7) Founder LTIP 14.9 35.4 Employers Social Security on pre-IPO Share Awards (1.3) (20.4) Settlement of
Slide 21: Strong balance sheet
Strong balance sheet H1 23 FY 22 £m £m Other Financial Assets 109.9 84.1 Other non-current assets includes higher capital Other Non-Current Assets 103.9 101.7 expenditure on assets held under operating leases. Non-current assets 213.8 185.9 £15.2m increase in inventory reflects the Current assets sh
Slide 22: FY23 and medium-term financial guidance
FY23 and medium-term financial guidance FY23 Medium-term (FY26) guidance guidance >40% underlying revenue growth on a CC basis >30% underlying revenue growth LSRT revenue on a CC basis per annum 18-25% on a CC basis LSRT gross margin >57% >65% by FY26 Targeting breakeven Adjusted EBITDA by FY26 22 F
Slide 23: H1 summary
H1 summary 1 Delivered sales. strong underlying revenue growth across broad customer base, driven by consumables 2 Delivered strong gross margin progress despite significant global supply chain challenges. Operational improvements made in H1 will drive margin expansion towards 65% medium term target
Slide 24: Summary and outlook
Summary and outlook Gordon Sanghera, CEO
Slide 25: Delivering strong growth every year
Delivering strong growth every year SHORT-MID TERM EXECUTION LONG TERM OPPORTUNITY Differentiated technology New Applications Information Any read Run at Rapid, real £147m rich data length any scale Protein sensing Multi-omics time 3 Year £127m LSRT CAGR Strong innovation pipeline New Markets Drive
Slide 26: National genomics strategies deploy Oxford Nanopore
National genomics strategies deploy Oxford Nanopore US NIH study shows UK integrating nanopore German initiative comprehensive, high sequencing into the NHS (IonGER) chooses accuracy sequencing for nanopore sequencing to population-scale advance rare disease genomics research "We are very excited ab
Slide 27: Executing on DNA/RNA sequencing collaborations
Executing on DNA/RNA sequencing collaborations Protein sequencing GSTT FIND • See the whole genome • Read any read length • At speed TRANSLATIONAL, HEALTH • At any scale • Affordable SmidgION • Accessible Stanford Exeter NHS LIFE SCIENCE APPLIED RESEARCH MARKETS Small molecule sensing NIH (CARD) JHU
Slide 28: Appendix
Appendix (NANOPORE
Slide 29: Customer highlights showcase platform capabilities
Customer highlights showcase platform capabilities Cancer: Nanopore sequencing shows promise Infectious disease: Patient outcomes improved in in monitoring cancer during treatment London hospital with respiratory metagenomics A Stanford University team publishes a nanopore-based Guy’s and St Thomas’
Slide 30: Underlying revenue reconciliation by customer group
Underlying revenue reconciliation by customer group H1 2023 H1 2022 Growth Customer group £m £m (%) S1 16.0 12.8 25% Less COVID sequencing (0.7) (1.5) Underlying S1 revenue 15.3 11.3 36% S2 32.5 24.2 34% Less COVID sequencing (1.9) (5.2) Underlying S2 revenue 30.6 19.0 61% S3 26.3 24.6 7% Less COVID
Slide 31: H1 2023 LSRT revenue driven by direct customer acquisition
H1 2023 LSRT revenue driven by direct customer acquisition 12 months to 30 12 months to 31 Change June 2023 Dec 2022 S1 (<$25k) Number of active customer accounts 6,157 5,786 +6% Avg. revenue per customer account ($000s) 5.5 5.7 (3)% S2 ($25k-$250k) Number of customer accounts 1,098 968 +13% Avg. re
Slide 32: Underlying revenue reconciliation by region
Underlying revenue reconciliation by region H1 2023 H1 2022 Growth Customer group £m £m (%) Americas 32.8 23.3 41% Less COVID sequencing (2.0) (5.5) Underlying Americas revenue 30.8 17.9 72% APAC 17.6 16.6 6% Less COVID sequencing (1.1) (3.2) Underlying APAC revenue 16.5 13.4 23% EMEAI 35.6 30.6 16%
Slide 33: Balanced and global customer base
Balanced and global customer base APAC £17.6m Americas £32.8m +6% reported +41% reported +72% underlying +23% underlying 21% 38% 41% EMEAI £35.6m +16% reported +57% underlying 33
Slide 34: Summary income statement
Summary income statement H1 23 H1 22 £m £m Revenue 86.0 122.3 Cost of Sales (36.5) (44.4) Gross Profit 49.5 78.0 Gross margin % 57.6% 63.7% £49.0m1 +20% total adjusted R&D expenses Operating expenses Research and development expenses (48.2) (28.6) £61.9m1 +33% Selling, general & administrative expen
Slide 35: Continued investment in innovation and commercial infrastructure
Continued investment in innovation and commercial infrastructure H1 23 H1 22 £m £m Research and Development expenses 48.2 28.6 Adjusting Items: Employer’s social security taxes on pre-IPO share awards 0.6 9.4 Amortisation of Capitalised Development Costs (8.7) (6.1) Adjusted Research and Development
Slide 36: H1 23 LSRT revenue driven by consumables revenue
H1 23 LSRT revenue driven by consumables revenue £86.0m 5.7 51% growth in ‘service and other’ revenue driven by service and license fees £70.6m +51% reflecting increased installed base 3.8 52.4 15% growth in consumables excluding decline in EGP consumables spend 45.6 +15% Starter pack revenue growth
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