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LGC update

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on 4 November 2014

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Transcript of LGC update

LGC update
4 November 2014

M&A pipeline
M&A priorities
Priorities
Standards: Reference materials and PT
Genomics: Technology & markets
LMS: Pharmaceutical Sciences
Opportunistic within strategic and financial framework
Geographic focus on North America and RoW
Financial update - FY15 H1 revenue
Videos
Rich M&A pipeline, including 3 strategic opportunities:
Rhone
Trent
Severn
Combined opportunities would add c.£13m of EBITDA
Deal execution while driving organic growth
Funding approach being considered internally
Further deals in origination

Advertisement
LGC latest news
LGC ODT work featured on BBC Breakfast. Watch here.
LGC in the Daily Mail. Read here.
LGC visits the UK party conferences. Read summary.
More news at www.lgcgroup.com

Highlights: What's new in the labs - Genomics - Labotatory and Managed Services - Standards and Proficiency testing - Science and Innovation
H1 revenue 3% behind budget at LFL fx rates

Standards

LMS
Slower top line growth in H1 than budgeted - strong pipeline for H2
Financial update FY15 H1 EBITDA
H1 EBITDA 1% behind budget at constant fx

Gross margin
Mix
Revenue drop through

Tight opex control

EBITDA substantially in line with budget at LFL fx rates
End market mix
Continued diversification into attractive end markets
Net debt and leverage
At 30 September:
Net debt £265m
Net leverage 5.4x
Net leverage in line with refinancing model
Financial update FY15 outlook
Confirming budgeted EBITDA of £50.5m
Markets and sectors
TIC impacted by mining, oil & gas, Europe, FX
Exova and Applus float
Sigma Aldrich acquisition by Merck
Covance acquisition by LabCorp
LGC overview
Outlook
Confirming EBITDA for FY15 of £50.5m
Business update
What do we do?
Genomics update
Key Genomics data

£35.5m
£12m
35%

Key strategic priorities
Key account focus
$1bn crop sciences R&D
Projecting 5-10x increase in sample throughput by 2020
International expansion - new markets
Providing DNA extraction and genotyping services to test seed varieties required for next phase of breeding programmes
The Baobab tree
B2B partnerships
M&A Rhone
Premium genomics brand for the research, applied and MDx markets
Strong market position
Leading supplier to MDx industry
Good position in key AgBio
Strong brand and IP position including 20 patents
High quality, well invested facilities with room for expansion
High margins and cash conversion
Under-representation in Europe / RoW provides trajectory for growth
Technology synergies
Uniquely positioned to gain further market share from TMO Life Tech
Geographic synergies
Leverage LGC commercial footprint in Europe
Build out Rhone B2B in US & EU
Runway for growth in APAC
Customer synergies
Cross sell products into AgBio markets
Significantly strengthened research and pharma offering
Access to high growth MDx market
FY14PF Revenue split
M&A and financial update
LGC + Rhone
=
The PCR Company
Brand strength and market position
Sector growth rates FY13-16*
* Source: OC&C/LGC management
Business update
Crop improvement for the 21st Century
Strong market growth
Addressable market - PCR & extraction ($M)
Marker Assisted Selection (MAS):
Uses DNA to identify and naturally select desirable traits

Yields & productivity
Insect and disease resistance
Nutrition
Shelf life
Durability for transport
Production of biofuels, bio materials
MAS vs traditional
Lower development costs
Faster to market
Higher commercial value
Efficacy in harsher environments
Feeding ever growing population

LGC technology enables wider adoption of high throughput MAS, achieving faster outcomes, efficiently.
LGC Science
To determine the location / function of each DNA trait marker takes millions of simple experiments on an industrial scale
LGC Sbeadex chemistry is used to purify DNA in high throughput automated Oktapure system, generating up to 20,000 DNA samples per day
Miniaturisation with the 1536 PCR plate and KASP chemistry enables >2,000,000 tests/day at break through costs per day.
Proprietary Kraken software manages workflow and enhances data handling capability
1- Key account management focus on AgBio
sector
2- International expansion
3- B2B partnerships
4- Drive NPD roadmap around core
competencies in extraction and genotyping
5- Execute M&A focused on increasing
market and geographic penetration to
create a leading global genomics brand
What do we do?
We enable our global customers to research and exploit naturally occurring genetic variation...



...with our world leading products & services for DNA extraction and analysis
Our world:
Research and applied genetic testing
End market mix
Follow us
For more information - www.lgcgroup.com Purchase our standards - www.lgcstandards.com
LTM Sept 13
LTM Sept 14
Focus on North America and China
CAGR 10.2%
Key figures - FY14
Revenue
Divisional EBITDA
EBITDA margin
c.190 FTEs across 3 sites
4x
the potassium of bananas
10x
the antioxidants of oranges
2x
the calcium of spinach
Geographic revenue split LTM Sept 14
Full transcript