Genus Plc · LSE:GNS
Genus — H1 FY2024 Earnings Presentation
36 slides from Genus's earnings presentation, February 2024
Slide 1: Interim Results: Half Year ended 31 December 2023
Pioneering animal genetic improvement to help nourish the world Interim Results Half Year ended 31 December 2023 Challenging Markets; Management Actions Taken
Slide 2: Disclaimer
Interim Results: Half Year ended 31 December 2023 Disclaimer This presentation has been prepared by Genus plc (“Genus” or the part of the issuer to provide the recipient access to any “the Company”) and has not been independently verified. Genus additional information or to update this presentation
Slide 3: Overview & Headlines
Pioneering animal genetic improvement to help nourish the world Overview & Headlines Jorgen Kokke Chief Executive Officer
Slide 4: CEO Overview
Interim Results: Half Year ended 31 December 2023 CEO Overview Challenging markets, we are accelerating delivery of our strategic priorities • PIC ex-China continuing to grow, gaining market share Continued growth in porcine, with more stable growth in • PIC China: Commercial progress winning new ro
Slide 5: FY24 H1 Headlines
Interim Results: Half Year ended 31 December 2023 FY24 H1 Headlines Financial performance1 Revenue Adj. operating profit £ 333.6m (-5%) £38.1m (-21%) Adj. profit before tax Interim dividend maintained £29.2m (-31%) 10.3p 5 1. Growth rates based on actual currency
Slide 6: Our Markets - Porcine
Interim Results: Half Year ended 31 December 2023 Our Markets - Porcine Our business: - = + Customer landscape Impact on our business • Slight breeding herd decline; net increase in production • PIC NAM performed robustly during the period NORTH AMERICA • Worst producer losses since 2008-2010 Financ
Slide 7: Our Markets - Bovine
Interim Results: Half Year ended 31 December 2023 Our Markets - Bovine Our business: - = + Customer landscape Impact on our business • Low milk prices drove a contraction in production • Resilient ABS NAM profits in the period • Strong beef prices, US beef cow numbers at lowest level • Lower US volu
Slide 8: Financial Results
Pioneering animal genetic improvement to help nourish the world Financial Results Alison Henriksen Chief Financial Officer
Slide 9: R&D Reporting Change
Interim Results: Half Year ended 31 December 2023 R&D Reporting Change No change to group adjusted profit or operational management Old reporting New reporting Change in R&D segmentation • Goal: Clearer expression of R&D costs, better alignment of the costs and PIC PIC opportunities of doing busines
Slide 10: Volume Growth
Interim Results: Half Year ended 31 December 2023 Volume Growth Adverse volume trends in China and several Bovine markets Genus PIC – volume growth (%) Genus ABS – volume growth (%) Excluding China FY20 FY21 FY22 FY23 FY24 H1 6% 5% 8% 6% 3% 13% 11% 8% 15% 8% 6% 6% 5% 5% 3% 3% 3% -6% 2% 0% FY20 FY21
Slide 11: Genus Adjusted Profit Performance
Interim Results: Half Year ended 31 December 2023 Genus Adjusted Profit Performance £M FY24 H1 FY23 H1 % Change % Change Genus adjusted operating profit2 £m actual actual actual constant1 Half year results Genus PIC 51.4 59.8 (14)% (10)% 17.4% Genus ABS 7.3 10.1 (28)% (15)% 13.8% 14.1% 13.6% 8.8 11.
Slide 12: Drivers of Adjusted Profit Performance
Interim Results: Half Year ended 31 December 2023 Drivers of Adjusted Profit Performance Adjusted profit before tax bridge (£m) Genus ex-China • Genus ex-China grew adjusted EBITDA by £4.6m or 10% year on year2 China • China trading has been challenging for both PIC and ABS; PIC China EBITDA decreas
Slide 13: Genus PIC
Interim Results: Half Year ended 31 December 2023 Genus PIC Adjusted operating profit1 results Half year adjusted operating profit1 bridge (£m) FY24 H1 FY23 H1 In constant currency2 % Change actual actual Actual Constant £m £m Currency Currency Revenue 175.8 188.0 (6)% (1)% Adjusted operating profit
Slide 14: Genus PIC
Interim Results: Half Year ended 31 December 2023 Genus PIC Adjusted operating profit1 Latin America Royalty revenue • Royalty revenue growth of +6% - 10%, 0% ex. China + % 1 • • Volume growth of +4% Argentina hyper-inflation impacted + %,2 + %5 ex. China -14% in actual currency Agroceres JV profit
Slide 15: Genus ABS
Interim Results: Half Year ended 31 December 2023 Genus ABS Adjusted operating profit results Half year adjusted operating profit bridge (£m) FY24 H1 FY23 H1 % Change actual actual In constant currency1 Actual Constant £m £m Currency Currency Revenue 157.8 162.2 (3)% 3% Adjusted operating profit 7.3
Slide 16: Genus ABS
Interim Results: Half Year ended 31 December 2023 Genus ABS Adjusted operating profit1 Latin America Sexed volume Beef volume 15% +2% -5% • Total volume growth -7%, sexed - -28% in actual currency + % 4 • volumes +11%, beef -7% Brazil profit down 3%, action included a 15% reduction in Brazilian embr
Slide 17: Genus R&D and Product Development
Interim Results: Half Year ended 31 December 2023 Genus R&D and Product Development Genus R&D; % of Genus revenue Porcine Product Development; % of porcine revenue 3.8% 3.7% 11% 9% 8% 5.1 3.4% 3.4% 7% 7% 4.0 3.3% 13.0 14.8 12.0 10.3 10.3 FY20 H1 FY21 H1 FY22 H1 FY23 H1 FY24 H1 PIC PD PRP PIC PD as %
Slide 18: Statutory Income
Interim Results: Half Year ended 31 December 2023 Statutory Income FY24 H1 FY23 H1 Change actual actual actual Statutory profit before tax £m £m £m Adjusted operating profit Net IAS 41 valuation mvmt on biological assets 33.0 2.6 41.2 (17.2) (8.2) 19.8 £14.3m (FY23 H1: £15.0m) Non-cash impacts Amort
Slide 19: Free Cash Flow
Interim Results: Half Year ended 31 December 2023 Free Cash Flow FY24 H1 performance Free cashflow bridge (£m) FY24 H1 FY23 H1 actual actual Cash Conversion Adjusted operating profit ex. JV £m 33.0 £m 41.2 69% (FY23 H1 : 62%) Depreciation and amortisation 21.3 18.4 Adjusted EBITDA 54.3 59.6 Working
Slide 20: Solid Financial Position
Interim Results: Half Year ended 31 December 2023 Solid Financial Position Leverage expected to be similar at June 2024 NET debt bridge £m IFRS 16 leases • Increase of £36.0m mainly due to two additional farms in China: Ankang and LuoDian Net Net Debt: EBITDA 1 Debt: Headroom EBITDA 1 1.6x 2.1x • £8
Slide 21: Strategy & Outlook
Pioneering animal genetic improvement to help nourish the world Strategy & Outlook Jorgen Kokke Chief Executive Officer
Slide 22: Our Strategic Priorities
Interim Results: Half Year ended 31 December 2023 Our Strategic Priorities Leveraging the investments made in innovation and supply chain Continued growth in Deliver successful Drive greater value Continue to generate porcine, with more stable commercialisation of our from bovine returns from R&D gr
Slide 23: PIC ex-China: Continued Growth
Interim Results: Half Year ended 31 December 2023 PIC ex-China: Continued Growth Royalty model demonstrating its strength in challenging producer environments US pork producer profitability – worst losses since 2008 Royalty revenues (£m) 4-year CAGR 50 NAM +4% 120 45 100 40 35 80 Estimated US Total
Slide 24: PIC China: Commercial progress winning royalty customers
Interim Results: Half Year ended 31 December 2023 PIC China Commercial progress winning royalty customers Pig price to corn price ratio1 PIC China volume (MPEs m) PIC genetics outperforming in trials 24 16 14 12 +35.42 10 2300 Total Carcass value, RMB/head of pig 8 18 6 4 2 2200 0 +48.14 H1 FY20 H1
Slide 25: PRP Gene Edit: FDA Regulatory Progress Continues
Interim Results: Half Year ended 31 December 2023 PRP Gene Edit: FDA Regulatory Progress Continues Working through post-product approval compliance procedures, PRP approval expected in FY25 2021 Working with FDA post-product approval compliance team Phase I - Product Claim and Methods 1. Product Def
Slide 26: Projected PRP Regulatory Progress
Interim Results: Half Year ended 31 December 2023 Projected PRP Regulatory Progress No change anticipated to our commercialisation timeline or financial projections CY23 2024 2025 2026 2027 FDA approval Chinese approval Regulatory Brazilian determination Colombia positive determination Pursue other
Slide 27: Drive Greater Value From Bovine: ABS Value Acceleration Programme
Interim Results: Half Year ended 31 December 2023 Drive Greater Value From Bovine: ABS Value Acceleration Programme Data driven approach actioned Accelerate value creation through Objectives commercial excellence and resource Improve margin, ROIC and cash generation redeployment Integrate and Optimi
Slide 28: Leverage Our R&D Platform; Strategic Review Completed
Interim Results: Half Year ended 31 December 2023 Leverage Our R&D Platform; Strategic Review Completed Sharper focus on the most attractive R&D projects that meet our strategic and commercial goals Our innovation engine Completed R&D strategic review… …for a sharpened focus Evaluated all early-stag
Slide 29: Summary and Outlook
Interim Results: Half Year ended 31 December 2023 Summary and Outlook Challenging trading; significant actions taken Outlook • Challenging conditions in several markets expected to continue in ABS value acceleration 2024, particularly China programme underway R&D strategic review • Solid growth in H
Slide 30: Appendices
Pioneering animal genetic improvement to help nourish the world Appendices
Slide 31: Proportion of Total Porcine Volumes Under Royalty
Interim Results: Half Year ended 31 December 2023 Proportion of Total Porcine Volumes Under Royalty NORTH AMERICA EMEA 79% 80% 80% 77% 96% 98% 97% 97% 97% 70% FY20 FY21 FY22 FY23 FY24 H1 FY20 FY21 FY22 FY23 FY24 H1 LATIN AMERICA ASIA 67% 69% 84% 83% 57% 82% 77% 78% 46% 45% FY20 FY21 FY22 FY23 FY24 H
Slide 32: Porcine Royalty Revenue Growth
Interim Results: Half Year ended 31 December 2023 Porcine Royalty Revenue Growth NORTH AMERICA EMEA 8% 7% 13% 13% 11% 9% 2% 7% 1% -1% FY20 FY21 FY22 FY23 FY24 H1 FY20 FY21 FY22 FY23 FY24 H1 LATIN AMERICA ASIA 17% 70% 12% 50% 9% 9% 20% 6% -13% -32% FY20 FY21 FY22 FY23 FY24 H1 FY20 FY21 FY22 FY23 FY24
Slide 33: Restatement For Product Development and PRP
Interim Results: Half Year ended 31 December 2023 Restatement For Product Development and PRP FY24 H1 FY23 H1 Previous Product Previous Product PRP PRP reporting development Restated reporting development Restated restatement restatement method restatement actual method restatement actual actual act
Slide 34: Financial Results
Interim Results: Half Year ended 31 December 2023 Financial Results FY24 H1 FY23 H1 % Change % Change actual actual actual constant £m £m Revenue 333.6 350.2 (5)% 1% Adjusted operating profit inc. JV 38.1 48.3 (21)% (17)% Net finance costs (8.9) (6.1) (47)% (44)% Adjusted profit before tax 29.2 42.2
Slide 35: Exchange Rate Sensitivity
Interim Results: Half Year ended 31 December 2023 Exchange Rate Sensitivity FY23 FY24 H1 Spot at Profit Average1 Average 20 Feb 2024 Sensitivity £m2 • Genus’s geographic profile can lead to translational Mexican Peso 22.7 22.7 21.5 2.0 currency impacts Euro 1.15 1.16 1.17 1.6 • We monitor key rates
Slide 36: Glossary
Interim Results: Half Year ended 31 December 2023 Glossary Artificial insemination (‘AI’) Using semen collected from a bull or Genetic nucleus A specialised pig herd, where Genus PIC keeps NuEra The ABS beef breeding programme and index designed to boar to impregnate a cow or sow when in estrus. Art