Rws Holdings Plc · LSE:RWS
Rws — Investor Day (October 2018)
64 slides from Rws's investor day presentation, Oct 9, 2018
Slide 1: Capital Markets Day
Capital Markets Day 9 October 2018
Slide 2: An Introduction to RWS
An Introduction to RWS Richard Thompson - CEO
Slide 3: Overview
Overview Market leading positions across specialist businesses › No. 1 position in the worldwide patent translation and patent filing market › A leading patent search service with the PatBase database covering over 57 million patent families › Market leading position in life science translations and
Slide 4: Long and successful heritage
Long and successful heritage 1958 1992 2003 RWS Holdings M.H. Randall and First translation Partners company to plc listed on AIM 2018 established in achieve ISO 9001 PatBase 2015 RWS celebrates England certification launched Acquired CTi its 60th birthday 1982 1995 2013 2017 M.H. Randall and Andrew
Slide 5: Strong track record
Strong track record 350 Annual revenue (£m) 70 Annual adjusted PBT* (£m) 300 60 250 50 200 40 150 30 100 20 50 10 0 0 16.00 Adjusted diluted EPS*** (pence) 7.00 Dividend*** (pence) 14.00 6.00 12.00 5.00 10.00 4.00 8.00 3.00 6.00 4.00 2.00 2.00 1.00 0.00 0.00 * Adjusted profit before tax is before ch
Slide 6: The Group today
The Group today Life Sciences Patent Translation & Filing › Technical translations and Language Solutions › World’s premier provider of linguistic validation for pharmaceutical, biotech, › Non-patent or life science patent translation and filing translations with a particular medical device companie
Slide 7: Diversified services
Diversified services 6% 5% 5% 10% 8% 13% 33% 4% Revenue Revenue Revenue Proforma revenue for FY 20% for FY 27% 42% for FY for FY 2015 2016 2017 2018 65% 60% 77% 18% 3% 4% Patent Translation Patent Life Language Moravia & Filing Information Sciences Solutions 7
Slide 8: Diversified geographically
Diversified geographically 11 502 77 497 297 56 555 64 11 2,479 FTE employees 10 399 8
Slide 9: A growing language services market
A growing language services market Historical and projected market growth $56.2 $52.3 $49.3 $46.5 $43.1 $40.3 $37.2 $38.2 $34.8 $33.1 $28.3 $26.3 $23.5 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Language Services and Technology Market: 2009 to 2018 9 Source: Common Sense Adviso
Slide 10: Group vision and strategy
Group vision and strategy To be the leading global provider of language and intellectual property support services › Grow the business › Retain and grow our client base › Increase our levels of activity, range of services and geographical coverage › Selectively acquire complementary businesses with
Slide 11: Our specialist divisions
Our specialist divisions › Highly specialist leaders in their fields built through acquisition and integration › Long-term relationships with blue-chip clients who are facing increasingly complex challenges › Addressing large and growing markets with fragmented service provision and clear growth dri
Slide 12: Today's event
Today’s event 14.45 Moravia | Paul Danter and Stuart Carter | Managing Directors of RWS Moravia and RWS Language Solutions 15.30 Life Sciences | Joe Lugo | Chief Operating Officer, RWS 16.15 IP Services | Charles Sitch and Neil Simpkin | Managing Directors of RWS IP Services 16.45 | Andrew Brode | C
Slide 13: RWS Moravia
RWS Moravia Paul Danter - Managing Director Stuart Carter - Managing Director, RWS Language Solutions
Slide 14: A premier localization provider
A premier localization provider 133 10 1990 CLIENTS OFFICES FOUNDED 610m 1,458 2017 WORDS HANDLED EMPLOYEES ACQUIRED BY RWS IN FY 2018 160+ 10 3,100+ LANGUAGES OF FORTUNE’S TOP 20 LANGUAGE SERVICE MOST ADMIRED PROVIDER NETWORK COMPANIES AS CLIENTS Our deep expertise, quality of service, ability to w
Slide 15: A global operating platform
A global operating platform RWS Moravia helps the biggest brands in the world to maximize their global potential › Through localization services that include software, multimedia, marketing content, testing and “managed services” – frequently sold as a mix of services › Managed through a rich supply
Slide 16: Our clients' world view
Our clients’ world view The world by GDP The world by population 16
Slide 17: We help our clients overcome complex challenges
We help our clients overcome complex challenges Increasing complexity for our clients Plays to our strengths Experience to handle complex workflows Content volumes are growing quickly A robust, vast supply chain Shorter turnaround times as pace of innovation accelerates Innovative use of workflow an
Slide 18: Localization complexities in practice
Localization complexities in practice 18
Slide 19: Servicing all of our clients' needs
Servicing all of our clients’ needs Percentage of revenue by services offered Localization services › User interface and user assistance 3.90% 0.50% › Software Localization 7.00% › Marketing content (transcreation) Managed services 5.30% › Machine translation and post-editing 3.90% Project managemen
Slide 20: Working closely with our clients
Working closely with our clients Programme Director There is no Solution Architects one-size-fits-all solution Engineers Localization Leads Instead, we work closely with our clients to understand their greatest challenges and opportunities—and to Supply Chain select the tools, processes and resource
Slide 21: Projecting our clients' brands at scale
Projecting our clients’ brands at scale 500+ 2,800+ We project clients’ brand voice at ACTIVE VENDORS ACTIVE FREELANCERS scale We represent their voice and brand in their markets We pitch to them in their own brand voice and style 21
Slide 22: We operationalize the right technology, at the right time
We operationalize the right technology, at the right time We are technology advisors with no agenda. By working with an array of technology partners, we offer our clients the appropriate end-to-end solution for the unique challenges they face 22
Slide 23: Harnessing technology
Harnessing technology Assign Analyze file, Resolve linguistic Prepare specialized post- assets and questions with instructions for Automation creates efficiency editors instructions client post-editors › We focus on difficult tasks where people add value Apply translation Apply MT engine Post-edit R
Slide 24: The pitfalls of machine translation
The pitfalls of machine translation Believe in something. Trust me. Even if it means sacrificing everything. Even if you sacrifice everything. 24
Slide 25: Language services market in 2018
Language services market in 2018 Industry-wide distribution of language services by › Expected to grow revenue in 2018 › CAGR of c.6.8% 2019-2021 › c.$52bn market by 2020 › Highly fragmented industry › >18,000 LSPs globally; niche players in regional markets, especially in Asia › Top 100 LSPs contri
Slide 26: Growth drivers and priorities
Growth drivers and priorities › Grow with existing clients - volume and number of services › Diversify revenue – from big 5 to big 15 accounts › Expand the verticals we work in › New services higher up the value chain (marketing and brand focused) › Following clients into new markets (Africa / India
Slide 27: Leveraging growth opportunities from divisional structure
Leveraging growth opportunities from divisional structure RWS Language Solutions and RWS Moravia Benefits › Drive growth for both divisions through better funneling of leads based on fit Cross-divisional collaboration between RWS Moravia and RWS Language Solutions enables › RWS Language Solutions ca
Slide 28: Interpreting services
Interpreting services Adding value 1990 › Specialized and high profile 36 150+ › Event management › Equipment hire COUNTRIES LANGUAGES Cross-selling examples › Product training workshops 1,500+ 10,000+ › Product launches › Clinical trial audits INTERPRETER PROJECTS NETWORK › GMP audits › Compliance
Slide 29: Summary
Summary › We are a premier localization provider › We are integral to our clients’ ability to project their brands globally › We operate in a growing market with highly fragmented service provision › Specialist services, reputation for quality and scale are key for clients who face increasing comple
Slide 30: Thank you for your time – any questions?
Thank you for your time – any questions? “In its unrelenting focus on quality “We were delighted by RWS “Our work with RWS Moravia has and continual improvement, RWS Moravia’s willingness to equip us earned internal accolades at the Moravia has consistently with tools and knowledge to highest level
Slide 31: RWS Life Sciences
RWS Life Sciences Joe Lugo - COO, RWS
Slide 32: A leader in life science language services
A leader in life science language services 200+ 13 30 CLIENTS OFFICES YEARS FOCUSED ON LIFE SCIENCES FY 100% 300 2018 UPTIME EMPLOYEES INTEGRATED WITH MORAVIA LIFE SCIENCES 150 TOP 3,000 SCALE AND REACH TO SERVICE GLOBAL CLIENTS 10 LANGUAGES PHARMA, MEDICAL DEVICE LINGUISTS AND CRO COMPANIES AS CLIE
Slide 33: Language solutions exclusively for life science companies
Language solutions exclusively for life science companies Clinical Trials Pharma/Biotech Regulatory Labelling CROs Software e-learning Medical Devices Corporate 33
Slide 34: Revenue profile
Revenue profile By industry* By category* 13% 28% 16% 71% 72% Pharmaceutical Medical Device CRO Translation Linguistic Validation 34 * Based on FY 2017 revenue of $68.5m
Slide 35: Our business model
Our business model › Customized workflows, embedded technology, dedicated global teams and a commitment to quality that is certified, measurable and sustainable, create client “stickiness” › Preferred provider relationships with our top 10 clients › 90% of revenue is covered by master service agreem
Slide 36: Our business model
Our business model › Revenue is earned on both a “per word rate” and on an hourly basis › Translation › “Per word rate” basis, which varies by language › Desktop publishing and project management are generally charged by the hour › Linguistic validation › “Per word rate” for translation, harmonizati
Slide 37: A growing life sciences market
A growing life sciences market Revenue Clinical trials US drug trials and clinical Global life sciences research $1.2tn $1.5tn $40bn $57bn 2.5x growth 2017 2022 2016 2022 in last 5 years Source: Frost & Sullivan Source: Grand View Research Source: Deloitte Revenue Medical device Global pharmaceutica
Slide 38: Client market dynamics
Client market dynamics Growing global demand Highly siloed Highly regulated › Proliferation of content › Highly regulated Client › Siloed and decentralized landscape Significant Quality over compliance price › Complex service delivery requirements standards › Emphasis on quality Complex Strict data
Slide 39: Market growth drivers and opportunities
Market growth drivers and opportunities Growth drivers Client needs RWS’s opportunity Consistent and localized consumer Global footprint and enterprise-wide GLOBALIZATION experience while the need for solutions that are customized and centralization intensifies quality driven Remote project manageme
Slide 40: Service delivery platform
Service delivery platform PEOPLE 1 › Dedicated global project teams comprised of internal and external resources › Business development managers cultivate relationships and identify client needs › Programme managers drive consistency and integrate solutions across client organizations PROCESS 2 › Au
Slide 41: Reputation built on quality
Reputation built on quality On-time delivery First pass yield Quality 99% 98% 99% Time between project Number of projects that require Translation accuracy approval and project no rework delivery 41
Slide 42: Cross-selling
Cross-selling Business Case Relationship background Solution Opportunity › 10+ year relationship › Life Sciences sales team uncovered IP RFP › Global master service agreement › Introduction made to the RWS IP Services sales › $1m annual revenue contact › Servicing multiple divisions › IP team pitche
Slide 43: Upselling
Upselling Business Case Relationship background Solution Opportunity › 6+ year relationship › We recognized significant growth opportunity › Working with multiple divisions › We assigned an additional sales person in Europe › Translating instructions and training documents › Identified 3 additional
Slide 44: Sustainable growth
Sustainable growth What has happened? What is coming next? What’s happened? What’s coming next?Other Expanded capabilities Fully onboarded sales team Expanded capabilities Integration and reorganization New markets Salesforce integration RWS referrals Increased automation Technology investments Reso
Slide 45: Summary
Summary › Highly specialized division, built through effective integration › Provides solutions to solve complex client challenges in highly regulated and innovative markets › Very sticky, blue-chip client base › Multiple growth opportunities as we develop global offer and enhance client service off
Slide 46: Thank you for your time – any questions?
Thank you for your time – any questions? “The quality and on-time “RWS Life Sciences has been a delivery record is exceptional. trusted language services partner Their willingness to work with to me for many years, setting you to meet deadlines and themselves apart through reduce cost as well as wor
Slide 47: RWS IP Services
RWS IP Services Charles Sitch and Neil Simpkin Managing Directors
Slide 48: The global leader in IP translation, filing and search services
The global leader in IP translation, filing and search services 1,500 130 60 DIVERSIFIED BLUE- HIGHLY QUALIFIED FULL- YEARS PROVIDING CHIP CLIENTS TIME TRANSLATORS PATENT SERVICES WIPO 11 of the top 20 applicants at the World IP Organization 1,500 90,000 200 EPO PATENT SEARCHES IP DOCUMENTS LANGUAGE
Slide 49: Presence throughout the innovation cycle
Presence throughout the innovation cycle Patent lifecycle Research & Development Patent Monetize Enforce Patent Translation PCT National Phase Entry Patent Translation Patent Translation Patent Searches Direct Filing Patent Searches Patent Searches PatBase European Validation PatBase PatBase Patent
Slide 50: International search database
International search database › Launched in October 2003 by RWS and Minesoft › A global subscription patent database of 124+ million publications, boosted by powerful analytics › 38,000+ individual users from 1,223 unique clients, with good market penetration in Europe and Japan › 95% recurring reve
Slide 51: Innovative crowdsourced IP research
Innovative crowdsourced IP research › Hosts 42,000+ highly-educated researchers from Article One Partners, acquired September 2017 › Key differentiator for RWS Search, providing USP, technology and US presence › High-spec platform: full-text searching of uploaded references, researcher demographics
Slide 52: Automating filing
Automating filing Filing instruction Filing receipts and inovia generates Agent confirms sent to agent Agent confirms filing translations sent to client invoice and receipt network inovia agent billing report Order placed Translation instruction sent to Translation sent to KestrelPro agent › 20-50%
Slide 53: Revenue drivers
Revenue drivers Translation Filing › World’s largest team of › Top tier global agent specialist IP translators network › Cost-effective › Bulk buying power › Unequalled quality › Reciprocity › All languages relevant to › Substantive work remains patent prosecution with patent agents 53
Slide 54: The patent market
The patent market Sustained growth market Unitary Patent is being pushed further out European Patent Filings 310,784 4.4% increase in 2017 Source: EPO PCT Filings 243,500 4.5% increase in 2017 Source: WIPO Good consistent growth in PCT and EP filings USA still largest PCT filer Chinese applications
Slide 55: Harnessing machine translation
Harnessing machine translation Patent Translation & Filing › RWS staff translation team are in PEMT production pilot › Test results show significant productivity gains for junior translators, but are less persuasive for seniors › MT now forming part of some RFPs › One major contract involves post-ed
Slide 56: Key growth opportunities
Key growth opportunities Geographic › Significant investment in Asian sales team › Additional business development managers to focus on West Coast tech companies, leveraging Moravia contacts Strategic › Exploit sales opportunities delivered by improved brand recognition of combined RWS/Moravia › Inc
Slide 57: Summary
Summary › We are the leader in IP translation, filing and search services › We support our clients across the IP lifecycle with services critical to protecting their IP › We operate in a highly specialist and growing market › Service provision remains fragmented whilst blue-chip clients seek reputat
Slide 58: Thank you for your time – any questions?
Thank you for your time – any questions? “Working with RWS saves us “RWS always provides excellent “AOP Connect is a standout time and money, and makes service and superior quality tool that separates RWS from my job easier. They help to work. They are certainly the its competitors and simplifies st
Slide 59: Concluding Remarks
Concluding Remarks Andrew Brode - Chairman
Slide 60: Recent achievements
Recent achievements › Acquisition and integration of CTi and LUZ to form RWS Life Sciences › Acquisition, assimilation and rebranding of Moravia › Continued to grow our IP Services business › Success with the first meaningful cross-sell opportunities › Leveraging Moravia’s experience and expertise t
Slide 61: Growth opportunities
Growth opportunities › America opportunity › Organic: stronger value proposition than patent attorneys, our primary competition › Cross-sell: leverage RWS Moravia and RWS Life Sciences customer relations to generate new wins for RWS IP Services › China opportunity › RWS IP Services: increasing matur
Slide 62: Near- to medium-term strategic priorities
Near- to medium-term strategic priorities #1 #2 #3 #4 Drive organic growth Cross-sell Harness technology Selective acquisitions › Increase sales › Strengthen Group mentality › Further leverage RWS Moravia › Extend capabilities › Additional services › Sell our full service offering expertise › Enhanc
Slide 63: Investment summary
Investment summary Market leading positions in localization, Strong track record of revenue, profit and intellectual property support solutions dividend growth and life sciences language services Clear strategy to create long-term value Attractive, large and growing end markets: and grow internation
Slide 64: Thank you for your time - any questions?
Thank you for your time - any questions? RWS.com RWS 2018©