Genus plc PRELIMINARY RESULTS

Transcription

1 Genus plc PRELIMINARY RESULTS Year Ended 30 June September 2008

2 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

3 A Most Successful Year Good stewardship in harsh market conditions Results ahead of expectations All strategic objectives achieved Product portfolio strengthened & capacity increased 3

4 Demonstrated Good Stewardship Financial targets exceeded Adjusted profit before tax up 40% to 28.0m Debt reduced by 33m to 78m Share price advanced 34% compared with FTSE % increase in dividend to 10 pence per share 4

5 Strategic Objectives Achieved Integration of Sygen completed All non-core business divested Move to Main Market achieved (FTSE 250) 5

6 Harsh Market Conditions Improvement expected in demand for livestock delayed by exceptionally high feed prices Reduced profitability of pig & beef farming in developed world Developing world farmers insulated Less impact in dairy sector as milk prices rose in 2007 Genus feed costs up by 1m 6

7 Product Portfolio Strengthened Bovine Shottle s lead as world no. 1 extended Unprecedented 8 bulls in US top 20 Porcine Rate of genetic improvement increased by 17% 7

8 8 Porcine Nucleus Herd Expanded

9 9 Bovine Stud Capacity Increased

10 Globally Strong Performance Dairy semen volume up 9% with prices 4% higher because of mix Porcine royalties up 5% demonstrating business robustness in a challenging market Strong performances in growth markets Latin America & the Far East across species Increased market share in North American porcines & profitability up in Europe Low slaughter prices & farmers loss-making 10

11 Results in Actual Currency Continuing Operations Year ended 30 June Change % Revenue Adjusted operating profit Adjusted operating profit incl JV Adjusted PBT Basic adjusted EPS

12 Results in Constant Currency Continuing Operations Year ended 30 June Change % Revenue Adjusted operating profit Adjusted operating profit incl JV Adjusted PBT Basic adjusted EPS

13 36 Adjusted Operating Profit Bridge (Inc. JV) 3.2 (0.1) (0.3) Translational 2007 Americas Europe & Central Transactional 2008 actual rates exchange const. rates Asia exchange 13

14 Translational Exchange Year ended 30 June 2008 Europe 0.8 Asia (0.1) N America (0.5) L America

15 Biological Assets Fair value movement (excluding JV) of 6.3m Bovine movement similar to last year (+ 10m) Porcine value lower (- 1m) Increase in inventory (- 3m) Strong bovine volume growth Assumed bovine growth rate increased to 4.0% (3.6%) Projected volumes likely to increase fair value further Movements likely to be volatile Foreign exchange gain of 3.2m. 15

16 Exceptional Items Year ended 30 June Integration & restructuring costs Preparation for Main Market Listing Goodwill adjustment China Earthquake

17 Summary Income Statement Year ended 30 June Actual 2008 Actual 2007 Change % Adjusted operating profit Joint ventures and associates Adjusted operating profit (inc. JVs) Finance costs (7.1) (10.0) Adjusted profit before tax Tax (effective rate 34.3%) (9.6) (6.5) Adjusted profit after tax

18 Segmental Analysis Geographical (continuing operations in constant currency) Year ended 30 June % Change North America Latin America (inc. JV) Europe Asia Unallocated costs (6.8) (6.4) (6) Adjusted operating profit (inc. JV)

19 Segmental Analysis - Species (continuing operations in constant currency) Year ended 30 June Bovine Porcine Unallocated Total Revenue Adjusted Operating Profit before R&D (6.8) 53.5 Research & Product Development (8.7) (9.7) (18.4) Adjusted Operating Profit (inc. JV) (6.8) 35.1 Revenue variance Adjusted operating profit variance

20 Balance Sheet 30 June June 2007 Goodwill and intangible assets Biological assets Cash & cash equivalents Bank borrowings (97) (138) Other assets Deferred tax (80) (78) Other liabilities (73) (69) Net assets

21 Year ended 30 June Cash Flow Adjusted operating profit Depreciation Joint venture dividend Working capital (5.8) (3.6) Trading cash flow Capital expenditure and leases (10.5) (8.0) Proceeds from asset disposals and shares issued Interest, tax and dividend (19.0) (16.8) Exceptional items (3.9) (4.0) Other incl. discontinued operations Cash inflow before repayment of debt Repayment of debt Net cash outflow for the year (42.4) (7.1) (15.8) (4.6) 21

22 Earnings Per Share Year ended 30 June - Pence Continuing Operations Adjusted including JVs actual fx % Adjusted including JVs constant fx % Basic % Total Operations Basic % 22

23 The Americas This region represents: 50% of Group revenue 24 m of adjusted operating profit Porcine represents 60% of revenue Dairy cows Beef cows Sows North America South America

24 Results Summary m Revenue Op Profit inc. JV Sales growth 6%: - Bovine +21% - Porcine +2% Profit growth 9% North American porcine market share increased by 3% - Also increases in several other countries 24

25 25 Hog and Corn Prices

26 Feed Price Effect Temporarily reduced customer profitability Tilted competitive advantage towards South America Encouraged consolidation throughout the region 26

27 27 World Class Dairy Unit

28 28 Intensive Beef Rearing

29 29 Integrated Pig Unit

30 Europe & Far East This region represents: 50% of Group revenue 18m of adjusted operating profit 62% profits from bovine Dairy cows Beef cows Sows Europe ROW

31 Results Summary m Revenue Op Profit Sales growth 19% in bovine Profit growth Europe 16% Far east 48% 31

32 48% Growth in Far East Recovery in Australia saw two fold increase in profits 15% profit growth in Asia bovine 71% increase in porcine China after absorbing 0.5m new production start up costs 32

33 China Market & Strategy China produces over 50% of worlds pork Domestic production will increase over next five years Accelerated decline in back yard Growth in technified key account sector China strategy Rolling increases in capacity to meet 50% of increased demand 2 nucleus farms opened in 2008 Time now right to invest in bovines 33

34 China Infrastructure Existing capacity 3,500 GGP; 7,000 GP N N HU N N N 34

35 35 New PN Completed in March

36 Pure Lines Air Lifted in April 08

37 Market Outlook Demand for food expected to exceed farming capacity Food prices will remain high Farmers looking to expand Developed world livestock farming returning to profitability Slaughter prices rising Feed prices falling Export opportunities to meet immediate shortages in capacity Underlying market trend good for next 5 years 37

38 Genus Forward Strategy Prioritise to capture at least 50% of this growth in developing world, particularly China Latin America Eastern Europe Continue to increase market share in developed world Confident about both the short & long-term prospects for the business 38