Abcam reports 72.2% Net Income decline in 2020 and almost no change in Revenue of 260
14 Sep 2020 • About Abcam (
$ABC) • By InTwits
Abcam reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is declining: 15.5% in FY2020 vs. 27.5% in FY2019 vs. 34.5% in FY2016
- Abcam has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.6%. 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 1.8%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.0x while industry average is 1.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Abcam's Revenue showed almost no change in FY2020. 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 topped in FY2017 at 36.9% and was declining since that time.
Gross Margin decreased slightly on 1.2 pp from 70.5% to 69.3% in FY2020. SG&A as a % of Revenue increased on 7.4 pp from 43.1% to 50.5% in FY2020.
Net Income margin dropped on 12.5 pp from 17.3% to 4.8% in FY2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 4.9% in FY2020. Abcam's CAPEX/Revenue showed almost no change from FY2017 to FY2020. It's average level of CAPEX/Revenue for the last three years was 6.2%. During the last 5 years CAPEX as a % of Revenue topped in FY2018 at 7.0% and was declining since that time.
Return on investment
The company operates at low ROIC (1.8%) and ROE (2.8%). ROIC dropped on 13.0 pp from 14.8% to 1.8% in FY2020. ROE decreased on 9.4 pp from 12.2% to 2.8% in FY2020. During FY2016-FY2020 ROIC topped in FY2017 at 21.6% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.0x and Debt / EBITDA is 5.6x. Net Debt / EBITDA jumped on 2.2x from -1.2x to 1.0x in FY2020. Debt jumped while cash surged on 115%.
Abcam has no short term refinancing risk: cash is higher than short term debt (176.0%).
Valuation and dividends
The company's trades at EV/EBITDA 64.6x and P/E 205.5x.
Financial and operational results
Abcam ($ABC) key annual financial indicators| mln. £ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 171.7 | 217.1 | 233.2 | 259.9 | 260.0 | 0.0% |
| Gross Profit | 120.5 | 152.1 | 163.0 | 183.2 | 180.2 | -1.6% |
| SG&A | 61.4 | 78.4 | 78.2 | 112.1 | 131.4 | 17.2% |
| EBITDA | 59.3 | 80.0 | 80.8 | 71.4 | 40.4 | -43.4% |
| Net Income | 37.4 | 42.4 | 62.2 | 45.0 | 12.5 | -72.2% |
Balance Sheet
|
|---|
| Cash | 68.9 | 84.8 | 90.2 | 87.1 | 187.3 | 115.0% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 106.4 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 120.5 | |
Cash flow
|
|---|
| Capex | 8.0 | 10.2 | 16.4 | 17.7 | 12.7 | -28.2% |
Ratios
|
|---|
| Revenue growth | 19.2% | 26.5% | 7.4% | 11.4% | 0.0% | |
| EBITDA growth | 10.3% | 34.9% | 1.0% | -11.6% | -43.4% | |
|
|---|
| Gross Margin | 70.2% | 70.1% | 69.9% | 70.5% | 69.3% | -1.2% |
| EBITDA Margin | 34.5% | 36.9% | 34.6% | 27.5% | 15.5% | -11.9% |
| SG&A, % of revenue | 35.8% | 36.1% | 33.5% | 43.1% | 50.5% | 7.4% |
| Net Income Margin | 21.8% | 19.5% | 26.7% | 17.3% | 4.8% | -12.5% |
| CAPEX, % of revenue | 4.6% | 4.7% | 7.0% | 6.8% | 4.9% | -1.9% |
|
|---|
| ROIC | 19.1% | 21.6% | 19.8% | 14.8% | 1.8% | -13.0% |
| ROE | 15.7% | 14.9% | 18.9% | 12.2% | 2.8% | -9.4% |
| Net Debt/EBITDA | -1.2x | -1.1x | -1.1x | -1.2x | 1.0x | 2.2x |
Peers in Pharmaceuticals & Biotechnology
Below we provide Abcam 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% |
| Astrazeneca ($AZN) | -6.9% | -2.3% | -1.7% | 10.4% | - |
| |
|---|
| Median (11 companies) | 8.4% | 12.5% | 7.3% | 9.5% | 9.9% |
|---|
| Abcam ($ABC) | - | 26.5% | 7.4% | 11.4% | 0.0% |
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 ($AGY) | 71.0% | 73.9% | 75.1% | 75.1% | - |
| Ixico ($IXI) | 48.6% | 56.5% | 58.8% | 65.4% | - |
| GlaxoSmithKline ($GSK) | 66.7% | 65.7% | 66.8% | 64.9% | - |
| |
|---|
| Median (8 companies) | 48.4% | 51.2% | 62.8% | 65.1% | 48.4% |
|---|
| Abcam ($ABC) | 70.2% | 70.1% | 69.9% | 70.5% | 69.3% |
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% | - |
| Astrazeneca ($AZN) | 32.5% | 29.9% | 32.8% | 27.4% | - |
| Clinigen Group ($CLIN) | 12.1% | 21.2% | 17.1% | 14.5% | - |
| Dechra Pharmaceuticals ($DPH) | 18.1% | 11.2% | 10.2% | 10.1% | 12.9% |
| |
|---|
| Median (8 companies) | 15.6% | 14.3% | 13.9% | 12.3% | 13.7% |
|---|
| Abcam ($ABC) | 34.5% | 36.9% | 34.6% | 27.5% | 15.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| 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% | - |
| Genus ($GNS) | 3.0% | 2.9% | 3.8% | 3.5% | 4.5% |
| |
|---|
| Median (8 companies) | 3.2% | 2.9% | 3.4% | 3.6% | 3.0% |
|---|
| Abcam ($ABC) | 4.6% | 4.7% | 7.0% | 6.8% | 4.9% |
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% | - |
| Allergy Therapeutics ($AGY) | -33.9% | -5.6% | -22.4% | 12.8% | - |
| Astrazeneca ($AZN) | 13.7% | 9.7% | 9.5% | 8.4% | - |
| Ixico ($IXI) | -63.3% | -50.5% | -14.9% | 5.0% | - |
| |
|---|
| Median (12 companies) | 9.2% | 9.7% | 7.0% | 5.0% | 6.0% |
|---|
| Abcam ($ABC) | 19.1% | 21.6% | 19.8% | 14.8% | 1.8% |
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 | - |
| Genus ($GNS) | 1.2x | 2.3x | 4.7x | 3.0x | 1.3x |
| GlaxoSmithKline ($GSK) | 3.1x | 2.1x | 3.0x | 2.6x | - |
| Astrazeneca ($AZN) | 1.6x | 2.2x | 2.0x | 1.9x | - |
| |
|---|
| Median (8 companies) | 1.4x | 1.8x | 2.1x | 2.3x | 1.6x |
|---|
| Abcam ($ABC) | -1.2x | -1.1x | -1.1x | -1.2x | 1.0x |
