Genus (GNS) H2 2024 earnings summary

Executive summary

• Achieved structural strengthening and strategic progress in FY 2024, particularly in porcine genetics and commercialization of PRRS-resistant gene-edited pigs, despite challenging trading conditions.

• Growth in porcine segments outside China offset by headwinds in China and bovine markets; focus on transforming ABS and maximizing R&D returns.

• Significant progress in royalty model in China, doubling royalty customer base and improving earnings predictability.

• Sustainability initiatives recognized by UN FAO and ISO, with certified 7.5-7.7% GHG reduction using company genetics in North America and Europe.

• Value Acceleration Program (VAP) delivered substantial cost savings and is expected to drive further profit growth.

Financial highlights

• Revenue reached £669 million, down 3% year-over-year; adjusted operating profit was £78.1 million, down 9%.

• Adjusted profit before tax was £59.8 million, down 16%; adjusted EPS fell to 65.5p.

• Statutory profit before tax dropped to £2.4–5.5 million from £31.8–39.4 million prior year, impacted by exceptional expenses and non-cash biological asset movements.

• Free cash flow conversion improved to 71%; net debt increased to £249 million, with leverage at 2x EBITDA.

• Dividend maintained at £0.32 per share.

Outlook and guidance

• Expecting solid profit growth from PIC and a return to profit growth for ABS in FY 2025; significant PBT growth in constant currency projected, in line with market expectations.

• Market conditions expected to be stable to slowly improving, with caution in China and a currency headwind of £8–9 million anticipated if current rates persist.

• CapEx expected to decrease to £20–23 million in FY 2025.

• Adjusted tax rate expected between 26% and 28% in FY 2025.