On March 14, 2022 Abcam plc (Nasdaq: ABCM; AIM: ABC) (‘Abcam’, the ‘Group’ or the ‘Company’), a global leader in the supply of life science research tools, reported its final results for the 18-month period ended 31 December 2021 (the ‘period’) (Press release, Abcam, MAR 14, 2022, View Source [SID1234610040]). The Group’s accounting reference date changed from 30 June to 31 December during the year1, therefore these financial statements report on both a 12-and 18-month period.
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Excludes the amortisation of the fair value of assets relating to the inventory acquired in connection with the acquisition of BioVision.
** Adjusted figures exclude impairment of intangible assets, systems and process improvement costs, acquisition costs, amortisation of fair value adjustments, integration and reorganisation costs, amortisation of acquisition intangibles, share-based payments and employer tax contributions thereon, the tax effect of adjusting items and credits from patent box claims. Such excluded items are described as ‘adjusting items’. Further information on these items is shown in note 4 to the consolidated financial statements.
*** In previous reporting periods, share-based payments have not been included within adjusting items. With the approval of the Profitable Growth Incentive Plan (‘PGIP’) during CY2021, management considers it to be more appropriate and more consistent with its closest comparable companies to include all share-based payments in adjusting items. To aid comparison with our previous presentation of results, we have included the adjusted operating margin in the table above on a like-for-like basis, excluding this change (‘Like-for-like’).
**** Net Cash comprises cash and cash equivalents less borrowings.
CY2021 FINANCIAL HIGHLIGHTS1,2
• Revenue growth of +22% (+17% reported) at constant exchange rates, compared to CY2020, including a 1%pt contribution from the acquisition of BioVision o +38% total in-house CER revenue growth (including Custom Products & Licensing3 and £2.6m of incremental revenue from BioVision) (+32% reported) o Revenue from in-house products and services contributed 61% of total revenue (including Custom Products & Licensing3 and £2.6m of incremental revenue from BioVision)
• Adjusted2 gross margin increased by over 200 basis points to 72.2% (CY2020: 70.0%), benefiting from the contribution of higher margin in-house products and volume leverage resulting from the increase in revenue
• Adjusted2 operating profit of £60.4m (excluding share-based payments), equating to an adjusted operating margin of 19.2% (CY2020: 18.8%)
• Adjusted2 operating margin on a like-for-like4 basis improved over 300 basis points to 16.5% in H2 ’21 (JulDec), from 13.3% in H1 ’21 (Jan-Jun)
• Statutory reported operating profit inc
• Net cash inflow from operating activities increased to £62.9m (CY2020: £58.9m)
BUSINESS HIGHLIGHTS
• Focus on serving customers’ needs globally as research activity levels continued to normalise and demand for Abcam products increased
• Positive customer transactional Net Promotor Score (‘tNPS’) of +56 (CY2021) and product satisfaction rates at all-time highs
• Completed the acquisition of BioVision, Inc (‘BioVision’), a leading innovator of biochemical and cell-based assays, in October 2021, for cash consideration of $340m (on a cash free, debt free basis)
• High employee engagement, with the business ranked in the Top 5 in the Glassdoor UK Employees’ Choice Awards in January 2022, for the second year running
• Strengthened and expanded leadership in commercial and operational teams with senior hires in Commercial, Brand, China, and Supply Chain
• Expanded the Group’s global presence, with the opening of new and enlarged sites in China, the US (Massachusetts, California, Oregon), Singapore, and Australia
• Upgraded supply chain systems at three locations, implemented new data architecture, and began transition to a new e-commerce platform, with completion of the digital transformation due in 2022
• Completed the secondary US listing on Nasdaq’s Global Market in October 2020 (supplementing existing listing on AIM on the London Stock Exchange)
• Expanded Asia, digital, and life science industry experience on the Board of Directors, with the appointments of Bessie Lee, Mark Capone and Sally Crawford, as Non-Executive Directors
SHARE TRADING, LIQUIDITY AND LISTING
• Following our listing on Nasdaq in October 2020, the number of Abcam shares traded as ADSs on Nasdaq has doubled. While only 10% of our shares trade in the US market, it represents 25% of liquidity
• The Board continues to review options to increase share liquidity and intends to consult with shareholders on these options in due course
CY2022 GUIDANCE
• Global lab activity continues to recover, though some uncertainty remains
• CY2022 trading performance YTD is in line with our expectations
• Expect total CER5 revenue growth of c.20% (including BioVision) with mid-teens organic CER revenue growth
• Expect continued adjusted gross margin improvement from the contribution of higher margin in-house products and full year impact of the BioVision acquisition
• Expect total adjusted operating cost growth (including depreciation and amortisation) at mid-teens percentage, as we slow rate of investment and leverage recent investments
LONG TERM GOALS TO CY2024
• CY2024 revenue goal target range increased by £25m to £450m-£525m, adjusted to incorporate BioVision6 and current operating performance
• Adjusted operating margin and ROCE targets remain unchanged Commenting on today’s results, Alan Hirzel, Abcam’s Chief Executive Officer, said: "I am grateful to everyone at Abcam for their dedicated effort through this most challenging time and thank our customers and partners for their ongoing trust and support. We have had another successful year operationally and financially despite the ongoing challenges. As we look ahead to 2022, we expect to create more innovation and success out of the past two years of investment as we installed elements of Abcam’s long term growth strategy.
The scientific community remains our guide and with their support we are becoming a more influential and trusted brand globally." Analyst and investor meeting and webcast: Abcam will host a conference call and webcast for analysts and investors today at 13:00 GMT/ 09:00 EDT. For details, and to register, please visit corporate.abcam.com/investors/reports-presentations A recording of the webcast will be made available on Abcam’s website, corporate.abcam.com/investors
2. These results include discussion of alternative performance measures which include revenues calculated at Constant Exchange Rates (CER) and adjusted financial measures. CER results are calculated by applying prior period’s actual exchange rates to this period’s results. Adjusted financial measures are explained in note 2 and reconciled to the most directly comparable measure prepared in accordance with IFRS in note 4 to the interim financial statements.
3. Custom Products & Licensing (CP&L) revenue comprises custom service revenue, revenue from the supply of IVD products and royalty and licence income.
4. In previous reporting periods, share-based payments have not been included within adjusting items. With the approval of the Profitable Growth Incentive Plan (‘PGIP’) during CY2021, management considers it to be more appropriate and more consistent with its closest comparable companies to include all share-based payments in adjusting items. To aid comparison with our previous presentation of results, we also calculate adjusted operating margin on a like-for-like basis, excluding this change (‘Like-for-like’).
5. Average CY2021 exchange rates to GBP as follows: USD: 1.378; EUR: 1.159, RMB: 8.891, JPY: 150.7 6. Last 12-month BioVision recurring revenues of £17.8m at point of acquisition, adjusted for non-recurring COVID-19 related revenues, and sales to Abcam during that period. The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014. This announcement shall not constitute an offer to sell or solicitation of an offer to buy any securities. This announcement is not an offer of securities for sale in the United States, and the securities referred to herein may not be offered or sold in the United States absent registration except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act of 1933, as amended. Any public offering of such securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer, which would contain detailed information about the company and management, as well as financial statements.