Genus reports 419% Net Income growth in 2020 and 12.9% Revenue growth
08 Sep 2020 • About Genus (
$GNS) • By InTwits
Genus reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 14.5% in FY2020, 5.5% in FY2019, 4.9% in FY2018, 10.8% in FY2017, 18.9% in FY2016
- Genus has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.5%. At the same time it's in pair with industry average of 7.5%
- CAPEX is quite volatile: £118m in FY2020, £100m in FY2019, £90m in FY2018, £38m in FY2017, £35m in FY2016
- The company has potentially unprofitable business model: ROIC is 6.8%
- It operates with high leverage: Net Debt/EBITDA is 1.3x while industry average is 1.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Genus's Revenue jumped on 12.9%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.2 pp from -4.0% to -2.9% in FY2020. During FY2016-FY2020 EBITDA Margin bottomed in FY2018 at 4.9% and was growing since that time.
Gross Margin increased on 6.6 pp from 33.7% to 40.2% in FY2020. SG&A as a % of Revenue decreased slightly on 0.66 pp from 19.0% to 18.3% in FY2020. During the last 5 years SG&A as a % of Revenue topped in FY2019 at 19.0%.
Net Income margin increased on 5.7 pp from 1.6% to 7.3% in FY2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 4.5% in FY2020. The company's CAPEX/Revenue increased slightly on 1.5 pp from 2.9% in FY2017 to 4.5% in FY2020. For the last three years the average CAPEX/Revenue was 3.9%. CAPEX as a % of Revenue grew at 0.34 pp per annum in the last 5 years.
Return on investment
The company operates at low ROIC (6.8%) and ROE (8.1%). ROIC increased on 5.5 pp from 1.3% to 6.8% in FY2020. ROE increased on 6.4 pp from 1.7% to 8.1% in FY2020. During FY2016-FY2020 ROIC bottomed in FY2018 at 1.2% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.3x and Debt / EBITDA is 1.8x. Net Debt / EBITDA dropped on 1.7x from 3.0x to 1.3x in FY2020. Debt surged on 30.7% while cash surged on 35.4%. During the last 5 years Net Debt/EBITDA topped in FY2018 at 4.7x and was declining since that time.
Genus has no short term refinancing risk: cash is higher than short term debt (215.1%).
Valuation and dividends
The company's trades at EV/EBITDA 33.5x and P/E 63.8x.
Management team
Stephen Wilson is a the company's CEO. Stephen Wilson has spent 1 year with the company. Alison Henriksen is a the company's CFO. Alison Henriksen has spent 1 year at the company.
Financial and operational results
FY ended 30 Jun 2020
Genus ($GNS) key annual financial indicators| mln. £ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 388.3 | 459.1 | 470.3 | 488.5 | 551.4 | 12.9% |
| Gross Profit | 128.8 | 164.1 | 147.5 | 164.5 | 221.8 | 34.8% |
| SG&A | 33.5 | 79.2 | 86.5 | 92.8 | 101.1 | 8.9% |
| EBITDA | 73.5 | 49.5 | 22.9 | 26.7 | 80.1 | 200.0% |
| Net Income | 49.3 | 32.8 | 42.7 | 7.8 | 40.5 | 419.2% |
Balance Sheet
|
|---|
| Cash | 34.0 | 26.5 | 29.1 | 30.5 | 41.3 | 35.4% |
| Short Term Debt | 5.7 | 9.1 | 14.8 | 4.3 | 19.2 | 346.5% |
| Long Term Debt | 118.0 | 129.0 | 122.8 | 105.8 | 124.7 | 17.9% |
Cash flow
|
|---|
| Capex | 11.8 | 13.4 | 17.8 | 17.1 | 24.6 | 43.9% |
Ratios
|
|---|
| Revenue growth | -2.6% | 18.2% | 2.4% | 3.9% | 12.9% | |
| EBITDA growth | 1.4% | -32.7% | -53.7% | 16.6% | 200.0% | |
|
|---|
| Gross Margin | 33.2% | 35.7% | 31.4% | 33.7% | 40.2% | 6.6% |
| EBITDA Margin | 18.9% | 10.8% | 4.9% | 5.5% | 14.5% | 9.1% |
| SG&A, % of revenue | 8.6% | 17.3% | 18.4% | 19.0% | 18.3% | -0.7% |
| Net Income Margin | 12.7% | 7.1% | 9.1% | 1.6% | 7.3% | 5.7% |
| CAPEX, % of revenue | 3.0% | 2.9% | 3.8% | 3.5% | 4.5% | 1.0% |
|
|---|
| ROIC | 10.6% | 5.9% | 1.2% | 1.3% | 6.8% | 5.5% |
| ROE | 14.4% | 8.5% | 10.5% | 1.7% | 8.1% | 6.4% |
| Net Debt/EBITDA | 1.2x | 2.3x | 4.7x | 3.0x | 1.3x | -1.7x |
Peers in Pharmaceuticals & Biotechnology
Below we provide Genus benchmarking against other companies in Pharmaceuticals & Biotechnology industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Evocutis ($EVO) | 51.2% | 54.5% | 37.6% | 49.0% | - |
| Ixico ($IXI) | 4.9% | 25.8% | 31.2% | 40.2% | - |
| Clinigen Group ($CLIN) | 84.4% | -11.1% | 26.1% | 19.9% | - |
| Dechra Pharmaceuticals ($DPH) | - | 45.1% | 13.3% | 18.3% | 6.9% |
| Abcam ($ABC) | 19.2% | 26.5% | 7.4% | 11.4% | - |
| |
|---|
| Median (11 companies) | 8.6% | 12.5% | 7.7% | 10.4% | 6.9% |
|---|
| Genus ($GNS) | - | 18.2% | 2.4% | 3.9% | 12.9% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Pfizer Inc ($PFZ) | 76.7% | 78.6% | 79.0% | 80.3% | - |
| Astrazeneca ($AZN) | 82.1% | 80.8% | 77.7% | 79.8% | - |
| Allergy Therapeutics ($AGY) | 71.0% | 73.9% | 75.1% | 75.1% | - |
| Abcam ($ABC) | 70.2% | 70.1% | 69.9% | 70.5% | - |
| Ixico ($IXI) | 48.6% | 56.5% | 58.8% | 65.4% | - |
| |
|---|
| Median (8 companies) | 48.6% | 54.9% | 68.3% | 67.9% | 56.6% |
|---|
| Genus ($GNS) | 33.2% | 35.7% | 31.4% | 33.7% | 40.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Evocutis ($EVO) | 38.6% | 45.2% | 43.9% | 50.0% | - |
| GlaxoSmithKline ($GSK) | 15.9% | 20.6% | 24.1% | 29.5% | - |
| Abcam ($ABC) | 34.5% | 36.9% | 34.6% | 27.5% | - |
| Astrazeneca ($AZN) | 32.5% | 29.9% | 32.8% | 27.4% | - |
| Clinigen Group ($CLIN) | 12.1% | 21.2% | 17.1% | 14.5% | - |
| |
|---|
| Median (8 companies) | 15.6% | 18.8% | 20.6% | 20.9% | 12.9% |
|---|
| Genus ($GNS) | 18.9% | 10.8% | 4.9% | 5.5% | 14.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Abcam ($ABC) | 4.6% | 4.7% | 7.0% | 6.8% | - |
| Evocutis ($EVO) | 18.2% | 5.8% | 7.3% | 5.2% | - |
| Astrazeneca ($AZN) | 6.3% | 5.9% | 4.7% | 4.0% | - |
| Allergy Therapeutics ($AGY) | 2.5% | 2.3% | 2.9% | 3.8% | - |
| GlaxoSmithKline ($GSK) | 5.5% | 5.1% | 4.4% | 3.7% | - |
| |
|---|
| Median (8 companies) | 4.0% | 3.7% | 3.4% | 3.8% | 1.5% |
|---|
| Genus ($GNS) | 3.0% | 2.9% | 3.8% | 3.5% | 4.5% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Evocutis ($EVO) | 59.8% | 70.1% | 53.2% | 52.0% | - |
| GlaxoSmithKline ($GSK) | 10.9% | 20.2% | 23.3% | 18.0% | - |
| Abcam ($ABC) | 19.1% | 21.6% | 19.8% | 14.8% | - |
| Allergy Therapeutics ($AGY) | -33.9% | -5.6% | -22.4% | 12.8% | - |
| Astrazeneca ($AZN) | 13.7% | 9.7% | 9.5% | 8.4% | - |
| |
|---|
| Median (12 companies) | 9.2% | 10.9% | 9.3% | 8.4% | 5.2% |
|---|
| Genus ($GNS) | 10.6% | 5.9% | 1.2% | 1.3% | 6.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dechra Pharmaceuticals ($DPH) | 2.6x | 3.0x | 5.1x | 4.7x | 1.9x |
| Clinigen Group ($CLIN) | 1.7x | 0.5x | 2.1x | 3.8x | - |
| GlaxoSmithKline ($GSK) | 3.1x | 2.1x | 3.0x | 2.6x | - |
| Astrazeneca ($AZN) | 1.6x | 2.2x | 2.0x | 1.9x | - |
| Evocutis ($EVO) | -0.4x | -0.5x | -0.7x | -0.9x | - |
| |
|---|
| Median (8 companies) | 1.3x | 1.3x | 2.0x | 0.5x | 1.9x |
|---|
| Genus ($GNS) | 1.2x | 2.3x | 4.7x | 3.0x | 1.3x |
