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29% Constant Currency Revenue Growth in H2 as Lab Activity Gradually Recovers and Demand for Abcam In-house Products Increases

Abcam plc, a global leader in the supply of life science research tools, announces its interim results for the six- and 12-month periods ended 30 June 2021 (the ‘period’). The Group’s accounting reference date has changed from 30 June to 31 December1, therefore these interim financial statements report on both a six- and 12-month period.

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SUMMARY PERFORMANCE

12 months to 30 June Six months to 30 June (‘H2’)3
Reported Adjusted2 Reported Adjusted2
2021
£m
2020
£m
2021
£m
2020
£m
2021
£m
2020
£m
2021
£m
2020
£m
Revenue 297.7 260.0 297.7 260.0 150.2 121.8 150.2 121.8
Gross profit margin, % 71.1 69.3 71.1 69.3 71.4 68.9 71.4 68.9
Operating profit / (loss) 28.2 10.5 45.8 44.5 10.3 (16.1) 19.8 11.1
Diluted earnings per share (‘EPS’) (pence) 7.2 6.0 13.5 16.6 1.3 (6.5) 4.8 3.6
Net Cash* 219.9 80.9 219.9 80.9 219.9 80.9 219.9 80.9

* Net Cash comprises cash and cash equivalents less borrowings.

FINANCIAL HIGHLIGHTS1

  • H2 constant exchange rate (‘CER’) revenue growth of 29% (23% reported) versus the prior year comparative period. 12-month CER revenue growth of 18% (14% reported)
    • H2 in-house CER revenue growth (including CP&L4) of 41% (35% reported)
  • H2 gross margin increased 250 basis points to 71.4%, benefiting from the contribution of higher margin in-house products. 12-month gross margin increased to 71.1%
  • H2 operating profit of £10.3m with a 78% increase in adjusted2 operating profit to £19.8m, equating to an adjusted operating margin of 13.2% (H2 2020: 9.1%). 12-month adjusted operating margin of 15.4% (2020: 17.1%), reflecting continuing investment in the business to support future growth
  • H2 reported diluted EPS of 1.3p (H2 2020: -6.5p). Adjusted2 diluted EPS of 4.8p (H2 2020: 3.6p) reflecting the increase in operating profit offset by a higher deferred tax charge and higher number of shares in issue
  • Net cash inflow from operating activities over the 12-month period of £71.9m (2020: £63.0m), ending the period with a net cash position of £219.9m (2020: £80.9m)

BUSINESS HIGHLIGHTS

  • Customers have gradually returned to labs during the 12-month period, with global lab activity approaching pre-COVID levels in the largest markets
  • Customer transactional Net Promotor Score (‘tNPS’) up two percentage points year-on-year to +58, with product satisfaction rates reaching all-time highs for the company
  • In-house product development and sales increased versus 2020, despite COVID-19 impact on lab activity; total in-house revenue in H2 (including CP&L) comprised 58% of total revenue (H2 2020: 53%)
  • Partnering with biopharma, diagnostic and multiplex platform partners continued to generate current and future sources of growth with the number of commercialized antibodies with these partners rising to more than 800 (2020: 459)
  • Progress was made in upgrading of the Group’s digital and physical infrastructure to support future growth, including the opening of new and expanded sites in China, Massachusetts, and California
  • Completed secondary US listing on Nasdaq in October 2020 (in addition to existing AIM listing in the UK)
  • Expanded Asia, Digital, and Life Science Industry experience within the Board of Directors with the appointments of Bessie Lee, Mark Capone and post period end, Sally Crawford, as Non-Executive Directors
  • Post period end announced agreement to acquire BioVision, Inc, a leading innovator of biochemical and cell-based assays, for cash consideration of $340m, with closing expected in October 2021
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CURRENT TRADING AND OUTLOOK

Six-months to 31 December 2021

  • Uncertainty around the COVID-19 pandemic remains, yet laboratory activity and demand have continued to gradually recover and trading performance year-to-date is in line with the Board’s expectations, with mid-teens CER revenue growth in July and August
  • Based on prevailing exchange rates to pound sterling5, the foreign exchange headwind to revenue growth is expected to be approximately 6% in the six months to 31 December 2021
  • Following the recent Oracle ERP deployments and investments made in our global facilities, adjusted depreciation and amortisation (‘D&A’) costs of approximately £17-18m are expected in the six months to 30 December 2021 (£15.1m in the six months to 30 June 2021)
  • Excluding D&A, adjusted costs and expenses for the six months ended 31 December 2021 are expected to grow at mid- to high- single digit over the six-month period ended 30 June 2021 (£72.3m in the six months to 30 June 2021)

Long-Term Outlook to 2024

We are achieving growth across all product categories and geographic areas of the business as market activity continues to recover and our growth strategy is implemented. Investments we have made, and that we continue to make, are enabling the business to sustain growth, and we remain committed to generating revenue of £425 – 500m for the year ending 31 December 2024 (calculated at the average exchange rates for the 12 months ended June 2021).

The business’ cash generation and financial position continue to provide a foundation from which to pursue opportunities, including innovation, acquisitions and partnerships. We will continue to invest in our business to enable Abcam to provide innovative, trusted, and improved solutions for our customers. While the rate of investment is expected to moderate from recent levels, as we pass the peak for this 2019-2024 strategy implementation, we have a continuing appetite to invest in growing Abcam sustainably for the long term.

Commenting on the performance, Alan Hirzel, Abcam’s Chief Executive Officer, said:

“Our team is dedicated to supporting life science discovery and the translation of discovery to social impact.   Our financial performance, including 29% revenue growth, is one indicator of the trust the market has in our team, our innovation, and our brand. I am grateful to everyone at Abcam and our customers for their brilliant collaboration and efforts through this most challenging time. I thank our customers and partners for their continued support.”

“As I look ahead, I am convinced more than ever that we can extend our market leadership, sustain durable growth, and become an increasingly influential partner within our industry.”

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