Analyst Presentation Abcam plc, 2019/20 Interim Results - - PowerPoint PPT Presentation

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Analyst Presentation Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020 Disclaimer Third party data Forward-looking statements Statements/opinions/views Some information contained herein has been This presentation may

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Analyst Presentation

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Disclaimer

Forward-looking statements This presentation may contain forward-looking statements, which are based upon current expectations and assumptions regarding anticipated developments and

  • ther

factors affecting the Abcam Group. They are not historical facts, nor are they guarantees of future performance. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed

  • r implied by these forward-looking statements.

These forward-looking statements speak

  • nly as
  • f the date of this presentation and accordingly

you should not place undue reliance on such statements. Statements/opinions/views All

  • pinions

and estimates in this presentation constitute the reasonable belief of Abcam as of the date of this presentation but are subject to change without notice. Abcam is not rendering legal or accounting advice through this material; readers should contact their legal and accounting professionals for such information. Information subject to change The information contained herein is subject to change, without notice, at the discretion

  • f

Abcam and Abcam does not undertake to revise

  • r update this information in any way.

Third party data Some information contained herein has been

  • btained

from

  • ther

third party sources and has not been independently verified by Abcam. Abcam makes no representations as to the accuracy

  • r the

completeness

  • f any
  • f the

information herein. Neither Abcam nor any other party involved in

  • r

related to compiling, computing

  • r

creating the data makes any express or implied warranties or representations with respect to such data (or the results to be

  • btained by the use thereof) and all such parties

hereby expressly disclaim, to the maximum extent permitted by law and regulation, any and all responsibility

  • r

liability as to the accuracy, completeness

  • r

reasonableness

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the information provided. Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

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Introduction

Alan Hirzel

CEO

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4 Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

Introduction

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Broad start across all areas of five-year growth plan – significant period of organic and inorganic investment and activity across the Group

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Invested ~£120m in acquisitions to augment organic growth plans

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Gained share in all major markets

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Recruited and filled important positions across business

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Growth potential remains attractive, but short term Covid-19 will reduce revenue growth for full year

H1 headlines

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Implementation has begun across many areas of the 5 year plan

Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

Introduction

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Extended validation capabilities

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Implemented high throughput antibody innovation approach

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Launched in-house antigen production

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Expanded Immunoassay Portfolio

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Introduced several new product ranges:

  • Bioactive proteins
  • Knock-out cell lysates
  • Cell lines

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Completed several tuck-in acquisitions and integrating new capabilities in conjugation, imaging and cell editing

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Added new talent: CFO, SVP IT and many other roles

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Design phases completed for IT upgrades in digital, laboratory and supply chain

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Signed leases for two larger facilities in the USA

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Further enhanced development and rewards to employees worldwide

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6 Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

Introduction

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›

…

Innova and TGR from Expedeon have provided us with protein-conjugation technologies

RUO market leadership

Proteins Cellular editing Cellular assays and epigenetics Antibody expansion Singleplex and multiplex

immunoassays

Conjugation labelling

>80%

  • f antibody

customers use conjugation

+ + + +

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Our objective is to be more influential with life scientists by helping accelerate progress toward their mission

1. Source: CiteAB, Abcam analysis

2014 2019E Penetration of Abcam products in global life science research publications

1 or more Abcam products cited in publication No Abcam product

>50%

Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

Introduction

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1. At constant exchange rates (CER, applying prior period’s exchange rates to this period’s results) 2. Catalogue products only (excludes CP&L) 3. 1 July 2019 – 31 January 2020

Strategic Performance Indicators In-house product revenue growth1,2 transactional Net Promoter Score (tNPS) 2019/20 target range 12 – 15% 54 – 60% H1 2020 Actual 14% 54%3

Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

Introduction

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H1 strategic performance within full year target ranges

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H1 Results

Michael Baldock

CFO

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~£10m opex invested across 13 strategic initiatives in H1, covering: › New product development › Customer experience › Data and digital transformation › Teams and talent development

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~£120m committed to acquisitions and external investments › Integrations progressing well › Continue to build pipeline of future opportunities aligned with acquisition criteria

Initiated investment in five-year growth plan

Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

H1 Results

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Acquisitions & External Investments since 1 July 2019

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Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

H1 Results Six months ended 31 December (£m)

Adjusted Results1 2020 2019 % Change Reported CER2

Revenue 138.2 124.7 10.8% 8.3% Gross profit margin 69.7% 70.2% Operating profit 33.4 40.8 (18.1%) Operating profit margin 24.2% 32.7% Profit Before Tax 32.8 41.1 (20.2%) Earnings per share (diluted) 13.0p 16.3p (20.2%) Dividend per share 3.55p 3.55p

  • Cash generated from operations

45.5 42.2 7.8% Net cash 88.53 83.2 6.3%

1. Pre-tax adjusted figures exclude system and process improvement costs, costs associated with the new Group headquarters, acquisition costs and amortisation of acquired intangibles. After-tax adjusted figures exclude a one-off tax credit for historical periods arising from the initial recognition of benefit from the lower rate of tax applied to profits on patented income and the tax effect of adjusting items. 2. Constant exchange rate (CER) 3. Before Expedeon acquisition payment of £102m

Financial Headlines

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Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

Revenue Performance

Six months ended 31 December (£m) % Change 2020 2019 Reported CER2 Catalogue revenue: In-house 59.1 50.8 16.3% 13.8% Third-party 71.5 66.2 8.0% 5.4% Catalogue revenue sub-total 130.6 117.0 11.6% 9.1% Custom Products and Licensing (CP&L) revenue1 7.6 7.7 (1.3%) (5.2%) Total revenue 138.2 124.7 10.8% 8.3%

1. Includes custom services, IVD supply and royalty and licensing income 2. Constant Exchange Rate (CER)

H1 Results

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Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

Regional Revenue Growth

0.0 5.0 10.0 15.0 20.0 H1 Catalogue CER1 revenue growth rate, %1 Americas 40.4% EMEA 26.3% China 18.1% Japan 7.2% RoA 8.0% Global catalogue 9.1%

1. Catalogue revenue growth at constant exchange rates (applying prior period’s exchange rates to this period’s results)

% of revenue (H1) H1 Results

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Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

H1 Results

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Adjusted Operating Profit1 Bridge

Reflects planned investments

40.8 34.0 3.7 10.6 7.5 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0

H1 FY2019

  • Adj. Operating Profit

Incremental gross profit after FX hedging Volume and inflationary increases Growth and scaling investments H1 FY2020

  • Adj. Operating Profit

£'m

1. Pre-tax adjusted figures exclude system and process improvement costs, costs associated with the new Group headquarters, acquisition costs and amortisation of acquired intangibles. 2. Pre IFRS16 impact of £0.6m

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Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

Cash Flow

Six months ended 31 December (£m) 2020 2019 Operating cash flows before w/c 41.3 41.0 Change in working capital 4.2 1.2 Cash generated from operations 45.5 42.2 Tax paid (5.9) (5.8) Net finance income 0.5 0.3 Investing activities (19.3) (27.3) Financing activities 83.6 (17.2) Net change in cash and term deposits 104.4 (7.8) Effect of FX (1.6) 0.8 Opening cash and term deposits 87.1 90.2 Closing cash and term deposits 189.9 83.2 Expedeon consideration paid on 1 January 2020 (102.0)

  • Closing cash and term deposits post Expedeon

87.9 83.2 Debt at period end 101.4

  • Cash conversion ratio1

105% 95%

  • 1. Operating cash flow after w/c / Adjusted EBITDA

H1 Results

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  • Main financing activities in H1:

– RCF draw-down of £101.4m (€120m) ahead of payment of consideration to Expedeon AG on 1 January – Dividend payments of £17.7m

  • Main investing activities in H1:

– Product development related: £9.9m – ERP investment £4.2m

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Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

Covid-19

H1 Results

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Our priority remains on doing everything we can to look after our employees and our customers

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c.£3m estimated loss of revenue to 6 March, predominantly originating from the early spread of the virus in China

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Operations in China began reopening on 14 February

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Marginal impact on supply chain to date

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Activity in China returning, but still below full levels prior to outbreak

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Globally the situation is still evolving and the full financial impact uncertain

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We continue to monitor the situation carefully and will update the market in due course

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Confident in long-term outlook: financial goals and investment plans unchanged

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Attractive business fundamentals – attractive markets, highly profitable and cash generative business, providing capital to invest

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Confident in our growth potential with attractive return profile

Our outlook remains positive

Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

H1 Results

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Cohort catalogue revenue by financial year

Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

Additional information

  • 20.0

40.0 60.0 80.0 100.0 120.0 140.0 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Revenue £m calculated fixed exchange rates

Added pre-FY2004 Added FY2004 Added FY2005 Added FY2006 Added FY2007 Added FY2008 Added FY2009 Added FY2010 Added FY2011 Added FY2012 Added FY2013 Added FY2014 Added FY2015 Added FY2016 Added FY2017 Added FY2018 Added FY2019 Added FY2020

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Antibody and Immunoassay (ELISA) Market Share

Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

Additional information 0% 5% 10% 15% 20% 25% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Share of global antibody citations, %

0% 5% 10% 15% 20% 25% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Share of global ELISA1 citations, %

Source: CiteAb (calendar years) 1 Enzyme-Linked Immunosorbent Assay (ELISA) is a common immunoassay test performed to detect the presence of a protein in a biological liquid sample

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H1 breakdown by currency

Abcam plc, 2019/20 Interim Results Presentation, 9 March 2020

Additional information

70.7% 19.5% 6.6% 1.4% 1.1% 0.6%

USD GBP EUR RMB JPY Other

45.4% 5.0% 19.5% 18.2% 7.2% 4.8%

USD GBP EUR RMB JPY Other

25.0% 58.4% 0.9% 11.8% 1.6% 2.2%

USD GBP EUR RMB JPY Other

Revenue Cost of sales Expenses