Investor Presentation Year ended 30 June 2017 Disclaimer This - - PowerPoint PPT Presentation

PRELIMINARY RESULTS Investor Presentation Year ended 30 June 2017

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 2000.

2

Overview

Bob Lawson Chairman

3

Strong strategic progress and solid financial results

> Results in line with expectations − Profit before tax up 13% (1% lower in constant currency) − Strong free cash flow − Earnings per share 69.4p, up 14% (unchanged in constant currency) > Strong strategic progress − Hermitage agreement and growing PIC royalties − Gene editing progress − Sexcel™ launched > Dividend increased 10% to 23.6p per share

4

Financial results

Stephen Wilson Finance Director

5

Results

% Change 2017 2016 Actual Currency Constant Currency £m £m Revenue 459.1 388.3 18% 6% Adjusted operating profit 55.1 49.3 12% (1)% Attributable to non-controlling interest (2.1) (1.4) (50)% (19)% Adjusted share of JV profits 7.1 6.4 11% (10)% Adjusted operating profit (inc JV) 60.1 54.3 11% (2)% Finance costs (3.7) (4.6) 20% 18% Adjusted profit before tax 56.4 49.7 13% (1)% Adjusted earnings per share (pence) 69.4 60.7 14%

• Dividend per share (pence)

23.6 21.4 10%

Year ended 30 June 2017

6

Volume growth

Year ended 30 June 2017

7

5% 9% 6% 4% 4%

0% 2% 4% 6% 8% 10%

2013 2014 2015 2016 2017

Porcine Volume growth (%) 5% 5% 6% (6%) 1%

(6%) (4%) (2%) 0% 2% 4% 6%

2013 2014 2015 2016 2017

Dairy & Beef Volume growth (%)

Adjusted operating profit – by business unit

% Change 2017 £m 2016 £m Actual Currency Constant Currency Genus PIC 94.8 78.0 22% 7% Genus ABS 21.3 22.0 (3)% (13)% Operating units 116.1 100.0 16% 2% Research and Development (43.8) (34.4) (27)% (12)% Central costs (12.2) (11.3) (8)% 5% Adjusted operating profit inc JV 60.1 54.3 11% (2)%

Year ended 30 June 2017

8

> Asia now included in global PIC and ABS business units

> Continued growth in profit up 7% and royalty revenues up 5% − Volumes up 4%, with 77% under royalty (+1 pt, +3 pts excluding China) > Overall volumes unchanged in North America and Latin America − Significant new stockings in North America support future royalty growth − Latin America; strong profit performance in Mexico (+11%) offsets impact of instability in Venezuela > Europe profit up 26% from royalty growth and business transformation − Hermitage initial contribution encouraging > Asia volumes up 20% and profit up 60% with growth in all countries − Strong product performance in buoyant market helped China to 80%+ profit growth

Genus PIC

% Change 2017 £m 2016 £m Actual Currency Constant Currency* Revenue 249.5 207.5 20% 7% Adjusted operating profit exc JV 87.7 71.7 22% 8% Adjusted operating profit inc JV 94.8 78.0 22% 7% Adjusted operating margin exc JV 35.2% 34.6% 0.6pts 0.3pts

Year ended 30 June 2017

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* All % changes are in constant currency unless otherwise stated

% Change 2017 £m 2016 £m Actual Currency Constant Currency* Revenue 195.9 172.8 13% 2% Adjusted operating profit 22.3 23.3 (4)% (15)% Adjusted operating profit less NCI** 21.3 22.0 (3)% (13)% Adjusted operating margin 11.4% 13.5% (2.1)pts (2.1)pts

Genus ABS

> ABS volumes up 1% with stronger second-half performance (+8%) in improving markets − Strong sexed volume growth of 10%, beef volumes 3% lower in challenging markets > Europe volumes up 6% and profit up 8% benefiting from actions taken in 2016 and 2017 > Latin America profit up 41% with continued action to increase prices (+11%) − Volumes 2% lower primarily due to weak beef markets > North America profit down 12%, including impact from weaker beef markets − Focus on improving commercial execution in large dairy enterprises > Double digit volume growth in IVB driven by US; strong first year in Mexico − Remaining 49% shares of IVB acquired ahead of schedule

Year ended 30 June 2017

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* All % changes are in constant currency unless otherwise stated ** NCI = Non-controlling Interest

% Change 2017 £m 2016 £m Actual Currency Constant Currency* Gene editing 3.5 0.9 289% 251% Other research 8.4 7.1 18% 2% Porcine product development 16.6 13.5 23% 7% Bovine product development 15.3 12.9 19% 6% Research and Development inc NCI** 43.8 34.4 27% 12%

> Gene editing investment of £3.5m as planned − PRRSv programme platform capability build; pregnancies for first generation of gene edited pigs created > Other research up 2%; continued activities in genomic evaluation, core informatics and IP > Porcine product development up 7% − Increased spend from lower by-product market prices and increased animal volumes > Bovine product development up 6% − GSS manufacturing and launch preparation costs in excess of £2m partially offset by efficiencies in bull development costs through De Novo and other initiatives

Genus R&D

Year ended 30 June 2017

11

* All % changes are in constant currency unless otherwise stated ** NCI = Non-controlling Interest

Statutory income statement

2017 2016 Variance £m £m £m Adjusted operating profit exc JV 55.1 49.3 5.8 Net IAS 41 valuation movement (1.1) (17.1) 16.0 Amortisation of intangibles (8.7) (6.1) (2.6) Share-based payments (4.6) (3.8) (0.8) Exceptional items

• Pension related

5.7 44.2 (38.5)

• Litigation

(5.3) (6.9) 1.6

• Acquisition and integration

(0.6) (0.2) (0.4)

• Other (including restructuring)

(2.3) (0.8) (1.5) Operating profit 38.2 58.6 (20.4)

• Share of post-tax profit of JVs

6.2 6.9 (0.7)

• Net finance costs

(3.7) (4.6) 0.9 Profit before tax 40.7 60.9 (20.2)

Year ended 30 June 2017

12

Cash flow

2017 2016 Variance £m £m £m Adjusted operating profit exc JV 55.1 49.3 5.8 Depreciation and amortisation 11.5 8.4 3.1 Adjusted EBITDA 66.6 57.7 8.9 Working capital (1.1) 1.1 (2.2) Biological assets (5.7) (3.8) (1.9) Pension deficit repair, exceptionals and other (13.5) (11.7) (1.8) Net cash inflow from operating activities 46.3 43.3 3.0

Cash conversion % 84% 88% (4)Pts

Interest and tax paid (11.7) (13.3) 1.6 Capital expenditure (18.9) (18.6) (0.3) Cash received from joint ventures 8.3 3.4 4.9 Other 1.4 0.9 0.5 Free cash flow 25.4 15.7 9.7 Acquisitions and investments (30.0) (7.2) (22.8) Dividends (13.5) (12.2) (1.3) Net cash flow (18.1) (3.7) (14.4) Net Debt 111.6 89.7 21.9

Year ended 30 June 2017

13

Strong financial position

2017 2016 £m £m Owners’ equity 399.3 374.5 Net Debt 111.6 89.7 Key Financial ratios:

• Return on adjusted capital

19.9% 19.1%

• Gearing

28% 24%

• Net debt to EBITDA

1.5x 1.4x

• Interest cover

37x 35x

• Dividend cover

2.9x 2.8x > Dividend up 10% > £74m headroom on bank facilities

Year ended 30 June 2017

14

Business update

Karim Bitar Chief Executive

15

Strong strategic progress

16

> ABS − Leveraging De Novo, launching Sexcel™, growing IVB − Improving commercial execution − Launching NuEra™ proprietary beef genetics > PIC − Growing in key markets and segments, particularly in China − Hermitage integration and partnership on track > R&D − Continuing to strengthen proprietary technology platform

17

Strengthening competitive position and execution focus

Dairy Managing performance Strategic progress

More focused execution under new leadership Leveraging competitive strengths

Making

• wn genetics

Sexing

with proprietary technology

Producing embryos

with our sexed genetics

NORTH AMERICA

• Implementing

turnaround

• Growing IVB USA

LATIN AMERICA

• Improved value

capture

• Strong start for

IVB Mexico ASIA

• China: Growing direct

business

• India: Producing elite

genetics, strengthening indirect channel EMEA

• Improved volume

and performance

• Growing product
• ffering

Geographical split indicative of internal segmentation of territories – not all countries shown are served by ABS

18

Genus ABS launches Sexcel – September 1st, 2017

19

Dairy “Bottom line, it gets heifers pregnant. No matter what you’re dealing with. No matter what time of year you’re breeding”

US customer

“I am very impressed with my experience with Sexcel – we have seen an 8% increase in conception rates”

UK customer

“ABS genetics in Sexcel gives me confidence in the future animals that will enter into my herd”

Italian customer

Sexcel launch – customer field trial experience

20

Strategic progress in India

Dairy

Producing India’s

leading temperate and indigenous genetics locally

Sexing temperate

and indigenous genetics locally with our proprietary sexing technology

ABS STRYKER

#1 Holstein bull in India

ABS TYSON

#1 Jersey bull in India

ABS REDHU

#1 Murrah bull in India

21

Strong IVB performance

Beef Dairy

>100%

Volume growth in IVB USA Genus ownership of IVB to further accelerate growth

100%

Growing presence

with large enterprise dairies in the US and Latin America

Volume growth refers to embryos produced by IVB in the US

22

Launching NuEra proprietary beef genetics

Beef

Product focus on customer

profitability, not breeds, proven through trials

Breeding proprietary animals to

profit-focused indices

Serving progressive beef & dairy

herds with terminal beef and cross-bred genetics

Creating value for our customers... ...through proprietary genetic improvement …focusing on key markets and segments

Efficiency, Profitability, Sustainability

23

PIC continues to deliver strategic growth

Pork

Volumes based on market pig equivalents; geographical split indicative of internal segmentation of territories – not all countries shown are served by PIC

• Three new top 20

North American accounts won

% volumes under royalty % volumes under royalty

• Key account

growth in Brazil

• Developing

Colombian franchise business

• China: Three new

royalty customers

• Royalty growth in

Russia and the Philippines

• Key account

growth in Spain

• Hermitage growth

North America EMEA Latin America Asia

% volumes under royalty % volumes under royalty

96% 96% 96% 97%

FY14 FY15 FY16 FY17

65% 64% 73% 77%

FY14 FY15 FY16 FY17

38% 59% 64% 63%

FY14 FY15 FY16 FY17

35% 46% 41% 50%

FY14 FY15 FY16 FY17

24

Hermitage integration on track

Pork

Growing with key customers Integrating genetic programmes Strategic partnership – multiplication, distribution > Growing key account presence in Europe > Successfully transitioned key customer relationships > Hermitage distributing PIC genetics under royalty in key markets > Hermitage producing PIC genetics under contract > Integrating Hermitage genes into PIC gene pool > Customers to access stronger products

25

China – aligning with our global business model and performing strongly Pork Royalty customers

Previous FY17+

Note: FY17+ customers includes one customer signed in July 2017; royalty customer map shows operational location for 8 royalty customers in total

> Three new royalty customers > Trebled royalty income in FY17

Supply chain

> Growing our overall capacity > Continuing to transition production to contracted multiplication

100% 49% 46% 28% 28% 30% 12% 51% 54% 49% 48% 45% 26% 23% 24% 25% 62% 2,970 8,270 7,900 8,650 8,305 7,970 13,770

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

FY12 FY13 FY14 FY15 FY16 FY17 FY18(F) Owned JV Multiplication GGPs TOTAL

Genus strategy

GENOMIC SELECTION GENE EDITING

SHARED PROPRIETARY TECHNOLOGY PLATFORM

GENETIC IMPROVEMENT

Pork Dairy Beef

BIOSYSTEMS ENGINEERING GENOME SCIENCE

26

27

Genomic selection: delivering continuous improvement

Dairy Pork Beef

> De Novo one year in: ~trebled size of ABS breeding programme > De Novo consistently producing high quality genetics > New global brand for proprietary beef offering > New tailored indices and Beef x Dairy products supporting price-to-value initiatives > DNA-based selection continues to deliver > Integration of Hermitage genes underway

Source of new Holstein bulls in the US

20 40 60 80 100 120 140

Relationship based genomic selection starts

PIC Genetic Index

1% 20% 23% ~40% FY15 FY16 FY17 FY18(F) ABS Internal/ De Novo Independent breeders

28

PRRSv resistance progress

FY16 FY17 £0.9m expense £3.5m expense

First pregnant sows carrying edited embryos

The PRRSv programme is an investigational programme relating to resistance to Porcine Reproductive and Respiratory Syndrome Virus; INAD refers to Investigational New Animal Drug application with the US Food and Drug Administration for the investigational PRRSv programme. The information included on this page reflects Genus plc’s research and development pipeline and is not intended for promotional

• purposes. All timing, including any relevant regulatory approvals, are purely indicative, and any regulatory approvals are subject to the success of ongoing research, the development of clear regulatory review

pathway by the relevant regulatory authorities and the approval by the regulators of any new animal drug application.

Molecular scissor IP licence Gene editing company co-founded Building regulatory capability Molecular scissor optimisation work begins US FDA - INAD issued CD163 IP licence Molecular scissors optimised for CD163

29

Development programme for PRRSv resistance Yrs 1-2 Yrs 2-5 Yrs 5+

Creating founder animals

Amplify founder animals by breeding

Prepare and submit key country regulatory dossiers

Development stage testing

Regulatory approvals

Technical &

• perational

Regulatory

Launch

The PRRSv programme is an investigational programme relating to resistance to Porcine Reproductive and Respiratory Syndrome Virus; INAD refers to Investigational New Animal Drug application with the US Food and Drug Administration for the investigational PRRSv programme. The information included on this page reflects Genus plc’s research and development pipeline and is not intended for promotional

• purposes. All timing, including any relevant regulatory approvals, are purely indicative, and any regulatory approvals are subject to the success of ongoing research, the development of clear regulatory review

pathway by the relevant regulatory authorities and the approval by the regulators of any new animal drug application.

current US FDA INAD issued

Scale & launch

CD163 IP licence

Molecular scissor technology licence

Technology

Scissors optimised for CD163 edit

Summary and outlook

30

> ABS − Leveraging De Novo, launching Sexcel, growing IVB − Improving commercial execution − Launching NuEra proprietary beef genetics > PIC − Growing in key markets and segments, particularly in China − Hermitage integration and partnership on track > R&D − Continuing to strengthen proprietary technology platform > Expect to perform in line with our expectations for FY18

Appendices

31

Market dynamics – output prices

SOURCE: Genus analysis using constant currency

32

Brazil US China EU Russia 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Aug 14 Aug 15 Aug 16 Aug 17 Pork - Key Markets (£ per kg) Brazil US China Russia India 15 20 25 30 35 40 45 50 Aug 14 Aug 15 Aug 16 Aug 17 Dairy - Key Markets (Pence per litre) EU

Market dynamics - input costs

33

SOURCE: Genus analysis using constant currency

CBOT Soybean LIFFE Wheat 50 100 150 200 250 300 350 400 Aug 14 Aug 15 Aug 16 Aug 17 LIFFE Wheat and CBOT Soybean (£ per tonne) Brazil US China EU 50 100 150 200 250 300 Aug 14 Aug 15 Aug 16 Aug 17 Corn - Key Markets (£ per tonne)

Return on adjusted capital

34

2017 2016 £m £m Adjusted operating profit inc JV 60.1 54.3 Tax rate 25.0% 25.8% Adjusted operating profit after tax 45.1 40.3 Equity attributable to owners of the company 399.3 374.5 Add back : Net debt 111.6 89.7 Pension liability 40.9 44.5 Related deferred tax (8.5) (9.6) Deduct : Biological assets (less historic cost) (323.8) (311.9) Goodwill (104.7) (86.0) Related deferred tax 111.7 109.7 Adjusted invested capital 226.5 210.9 Return on adjusted invested capital 19.9% 19.1%

Year ended 30 June 2017

> Genus’ geographic profile can lead to translational currency impacts > We monitor key rates against GBP > Latest spot rates would indicate a £0-1m gain for FY18 compared with average FY17 rates FY17 FY17 Spot @ Profit Average Closing 04 Sep 17 Sensitivity £m* US Dollar 1.27 1.30 1.30 2.0 Euro 1.16 1.14 1.09 1.0 Brazilian Real 4.11 4.30 4.06 0.9 Mexican Peso 24.6 23.5 23.1 1.2 Chinese Yuan 8.67 8.81 8.45 0.9 Russian Rouble 77.6 77.0 74.9 0.2

Exchange rate sensitivity

35

* - 12 month operating profit impact given a +/- 10% movement in exchange rate, based on FY17 results