Abcam plc(ABCM)2022-03-14 16:38Financial Data and Key Metrics Changes - Revenue in calendar 2021 increased by 22% on a constant currency basis compared to 2020, or 17% reported after a 5% foreign exchange headwind [20][21] - Gross margin improved by over 200 basis points to over 72%, with expectations for continued margin improvement as in-house revenue grows [21][22] - Adjusted operating profit increased by 25% half-on-half to 33.6 million Pounds, with an adjusted operating margin of 15.1% for 2021 [23][28] Business Line Data and Key Metrics Changes - Total sales of in-house product catalogs, including BioVision, increased by over 40% on a constant currency basis, now representing over 60% of total sales [21][22] - Primary antibodies, the largest category, grew in the high teens, driven by a portfolio of in-house recombinant antibodies that grew by over 40% [25] - Single and multiplex products, including ELISA and FirePlex offerings, grew over 35% and now contribute a fifth of total sales [25] Market Data and Key Metrics Changes - China was the fastest-growing region with a growth rate of 34%, while the U.S. delivered over 25% growth [24] - EMEA and the rest of Asia grew solidly at mid-teens rates, with Japan experiencing around 5% growth due to COVID-related disruptions [24] - Biopharma customer segment grew over 30%, indicating a strong long-term opportunity for the company [26] Company Strategy and Development Direction - The company is transitioning from a third-party OEM supply model to a majority in-house product revenue model, which is now over 60% [12][13] - The focus is on driving growth through innovation in product development, particularly in immuno-oncology and proteomics [14][16] - The company aims to achieve its 2024 vision by continuing to invest in its capabilities and refining its operations to drive sustainable growth [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving growth across all product categories and geographies, with a focus on refining investments made during the pandemic [17][18] - The company anticipates total revenue growth of approximately 20% in 2022, including the impact of BioVision, with mid-teens organic growth expected [35][36] - Management is monitoring the impact of COVID policies in China and supply chain disruptions but remains optimistic about long-term growth prospects [50][51] Other Important Information - The company completed the acquisition of BioVision, which contributed 2.6 million Pounds of revenue in the last two months of 2021 [20][30] - The company ended the period with a modest net debt position of 24 million Pounds, allowing it to self-fund organic investments [33] - The company has launched new employee share plans to align incentives with long-term growth goals [29] Q&A Session Summary Question: Growth expectations for in-house business and operating margin cadence - Management indicated that there is significant demand for antibodies, with a focus on increasing throughput and productivity in product development [40][41] - Overall growth rate for in-house products is expected to align with the company's guidance of mid-teens organic growth [42] Question: Strategy regarding proteomics companies and economic agreements - The company is focused on providing high-quality antibodies for proteomic platforms, with flexible commercial arrangements to support innovation [44][45] Question: Impact of COVID policies in China - Management noted that operations in China have not been materially affected by COVID policies so far, but they are prepared for potential disruptions [50] Question: Supply chain disruptions and pricing strategy - The company has been able to pass on price increases through long-term contracts and is confident in managing inflationary pressures [51][53] Question: Biopharma revenue growth and sustainability - Growth in biopharma is driven by high-quality antibodies and innovative commercialization approaches, with expectations for sustained growth [56] Question: Employee headcount and operating costs - The company anticipates a modest increase in headcount, focusing on R&D and sales, while operating costs are expected to rise in line with strategic goals [62]