Slide 1: H1 2024 results
H1 2024 results Six months to 30 November 2023 25 January 2024
Slide 2: Overview
Overview Mike Maddison CEO
Slide 3: Agenda for today
Agenda for today • Transformation journey • Executive highlights • Financial review • Strategy update • Summary and outlook • Your questions answered
Slide 4: Good progress on transformation journey
Good progress on transformation journey Where we started Covid bubble Cyber experts Identified risks masking market Regional Cyber & Escrow specialised in of market dynamics businesses with businesses with Testing and concentration heading into limited different buyers Assurance and lack of more vol
Slide 5: Executive highlights
Executive highlights Revenue First half numbers in line with expectations and strategy is £159.2m transforming the business at pace £176.6m H1 2023 – (6.7%) at constant currency • Overall performance in line Gross margin • Cyber Security stabilised, Managed Services continued growth and gross margin
Slide 6: Financial review
Financial review Guy Ellis CFO
Slide 7: FY24 financial framework
FY24 financial framework Sustainable Improved Balance sheet Efficient cost base revenue growth gross margin resilience
Slide 8: Financial highlights – delivering
Financial highlights – delivering Revenue Overheads Gross Margin % (exc. SBP, D&A and ISIs) £159.2m 37.9% £44.0m H1 2023: £176.6m – (6.7% CC) H1 2023: 40.5% - (2.6% pts) H1 2023: £44.8m - (1.8%) Adjusted EBITDA 1 Cash Conversion Ratio 1 Net Debt (exc. Leases) £15.6m 89.1% £48.3m H1 2023: £24.2m – (3
Slide 9: Group income statement
Group income statement H1 2023 H1 2024 % change • First half as expected £m £m Revenue 176.6 159.2 (9.9%) • Cost of sales efficiencies and overhead decrease as planned Gross profit 71.5 60.4 (15.5%) Gross margin % 40.5% 37.9% (2.6% pts) • ISI’s of £4.2m include reorganisation costs (£3.8m), as well
Slide 10: Group revenue bridge
Group revenue bridge • Expected Cyber Security constant currency decline of 9.6% in H1, driven by North America • Escode delivered again positive revenue growth in constant currency of 6.2%, aided by Q1 2023 comparator H1 2023 H1 2024 FX Cyber FX Escode Cyber Escode growth Revenue Revenue
Slide 11: Cyber Security revenue and Adjusted EBIT
Cyber Security revenue and Adjusted EBIT Revenue by region Trajectory: Constant Currency H1 FY24 regional YoY growth: • UK & APAC: (0.5%) • North America revenue declined at constant currency by -3.1% • North America: (31.9%) compared H2 2023 revenue • Europe: +18.8% • H1 2024 revenue ahead of H2 20
Slide 12: Cyber Security revenue – new capabilities
Cyber Security revenue – new capabilities Revenue by capability H1 FY24 capability YoY growth: • TAS declined by -28.6% (-31.7% at actual rates) due to Constant Currency impact of challenges we experienced in Q3 FY23, albeit • TAS: (28.6%) now stabilising as demonstrated by H1 2024 revenue • C&I: +0
Slide 13: Escode revenue and Adjusted EBIT
Escode revenue and Adjusted EBIT Revenue by region H1 2024 regional YoY Revenue by service line Constant currency Constant currency • Sustaining growth through last growth: five quarters • UK: +8.9% • H1 2024 growth driven by • North America: +4.3% increased verification revenues • Europe: +5.0% and
Slide 14: Net debt (exc. Leases) reduced by £1.3m
Net debt (exc. Leases) reduced by £1.3m • Cash conversion remains strong • Balance sheet strength with four-year enlarged multi-currency RCF of £162.5m with additional £75m uncommitted accordion option to enable new strategy • FY23 final dividend of £9.8m paid in December 2023 due to timing of AGM a
Slide 15: FY24 financial framework
FY24 financial framework Sustainable Improved Balance sheet Efficient cost base revenue growth gross margin resilience Returning Cyber Security Improved utilisation % Delivering c.£5m Strong cash conversion to growth in H2 efficiencies in Globalised technical Cyber Security in FY24 Reducing debt Acc
Slide 16: Strategy update
Strategy update Mike Maddison CEO
Slide 17: Making our business more global, agile and client-focused
Making our business more global, agile and client-focused Our businesses Our strategy Our ambition Cyber Security Our clients Medium term: Protecting companies Deeper client engagement on the most and governments against pressing cyber security needs Cyber Security an evolving spectrum of • Mid-teen
Slide 18: Delivering on strategy and operational targets
NCC Group Cyber Security Assessment and Discovery Services now available Delivering on strategy and operational targets powered by Tanium What we said we would do What we’ve done • Focus on the fastest growing sectors • Vertical structure in North America to enable sharper focus on key sectors Our c
Slide 19: Delivering on strategy and operational targets
Delivering on strategy and operational targets Pictured above: Colleagues in Manila celebrating the inauguration of the office What we said we would do What we’ve done • Sold non-core asset DetACT • Reduce operational costs and drive greater • In Escode enacted price increases and systems consolidat
Slide 20: Summary and outlook
Summary and outlook Mike Maddison CEO
Slide 21: We will continue to deliver our Next Chapter strategy
We will continue to deliver our Next Chapter strategy • Strategy is transforming the business at pace • Confident outlook and current trading: • Technical Assurance Services Q2 2024 revenue exit rate gives us confidence in H2 2024 supported by continued Managed Services revenue growth • Low single d
Slide 22: Questions
Questions
Slide 23: Appendix – Reconciliation of adjusted measures
Appendix – Reconciliation of adjusted measures
Slide 24: KPI's – driving focus on our Next Chapter strategy
KPI’s – driving focus on our Next Chapter strategy Cyber Security H1 2023 H1 2024 Delivery headcount 1,402 1,113 Number of clients >£0.25m 205 213 Total orders > £250k in prior 12 months Number of long-term (>3 years) clients over £250k 139 133 Minimum one order per year in prior three years, plus £
Slide 25: Disclaimer
Disclaimer This presentation, including a hard copy of these slides, the talks given by the presenters, the information communicated during any delivery of the presentation and any question and answer session and any document or material distributed at or in connection with the presentation (togethe