Slide 1: Full Year Results for the year ended 31 May 2020
Full Year Results for the year ended 31 May 2020 3 September 2020
Slide 2: Overview
Overview Adam Palser
Slide 3: Cyber and software resilience more relevant than ever
Cyber and software resilience more relevant than ever ❖ Excellent long-term market growth prospects • Cyber Resilience is more important than ever in a Covid-19 world • Global online security breaches continue to rise at greater than 20% CAGR • Software supply-chain resilience (both on-premise and c
Slide 4: Resilient through these uncertain times
Resilient through these uncertain times ❖ Covid-19 continues to disrupt the market: • Remote working and acceleration of cloud adoption have increased cyber risk • Demand for shorter term engagements has temporarily decreased owing to financial and logistical challenges for our customers • Short-ter
Slide 5: FY 2020 summary overview
FY 2020 summary overview1 Resilient FY 2020 ❖ Outstanding MDR performance (YoY 13.7% growth) trading ❖ Software Resilience H2 2020 YoY flat over H2 2019 ❖ Encouraged by the way we have weathered the initial impact of Covid-19 ❖ Estimated £15m2 impact in FY 2020 of sales order delivery Covid-19 impac
Slide 6: Financial Review
Financial Review Tim Kowalski CFO
Slide 7: Financial summary
Financial summary1 Continued growth, a strong balance sheet and well-placed to thrive in the future Revenue Gross Profit Gross Margin % £263.7m £104.4m 39.6% +5.2% FY 2019: £250.7m +2.6% FY 2019: 101.8m -1.0ppts FY 2019: 40.6% Covid-19 sales order delivery impact2 EBIT3 EBIT Margin % estimated £15m
Slide 8: Financial performance - Group income statement
Financial performance - Group income statement Being resilient and profitable Revenue ❖ Continued revenue growth despite Covid-19 impact FY 2020 FY 2019 Pre-IFRS 16 % change £m £m Gross profit/margin Revenue 263.7 250.7 5.2% Gross Profit 104.4 101.8 2.6% ❖ Investment in sales and technical capacity
Slide 9: Financial performance - Assurance
Financial performance - Assurance Global portfolio demonstrating resilience to Covid-19 Revenue ❖ Growth in performance despite c.£15m Covid-19 impact: FY 2020 revenue by region (£m’s) FY 2020 revenue by reporting period (£m’s) • UK: flat H2 2020 with the most significant H2 impact FY 2019 (£m) FY 2
Slide 10: Financial performance - Assurance by service line
Financial performance - Assurance Broadening and strengthening around our “diamond- Technical Security Consulting (“TSC”) ❖ Resilient growth supported by global resourcing with varied timing of core” of technical consulting Covid-19 impact felt across geographies ❖ Average Order Value increased by 1
Slide 11: Financial performance – Software Resilience
Financial performance – Software Resilience Revenue Recurring high margin revenue and cashflow ❖ Globally H2 2020 momentum with YoY flat to H2 2019: • UK growth in H2 2020 YoY of 2.3%; the largest element of our Software Resilience business underpinning return to sustainable growth FY 2020 revenue b
Slide 12: Financial performance – Software Resilience contracts and verification
Financial performance – Software Resilience Contracts H2 revenues of £19.1m flat compared to prior ❖ Covid-19 had a negligible impact of c.£0.1m on contracts year ❖ Stabilised contract revenue base as H2 2020 grew 1.6% on H1 2020 Contracts (£m) 1.6% 13.3 13.2 12.8 13.0 Verification ❖ Verification co
Slide 13: Financial performance – Cash
Financial performance – Cash Strong cash discipline with net debt at £4.2m1 FY 2020 FY 2019 Net debt and cash conversion (£m) (£m) ❖ £4.2m net debt position includes £4.6m2 benefit of certain Cash flow before working capital 40.2 41.3 government tax deferral programmes Movement in working capital 8.
Slide 14: Strategy
Strategy Adam Palser CEO
Slide 15: NCC Group – Delivering value to all our stakeholders
NCC Group – Delivering value to all our stakeholders Our Mission To make the world safer and more secure Our Vision To be the leading cyber security advisor globally. Trusted and sought after for our complete people-led, technology-enabled cyber resilience solutions that enable our customers to thri
Slide 16: Securing Growth Together: Our transformation continues
Securing Growth Together: Our transformation continues Despite Covid-19 disruption we see progress of the firm through Securing Growth Together (SGT): Develop our People Lead the Market Win Business Deliver Excellence Support Growth Group Headcount growth Research days Orders over £250k NPS Covid-19
Slide 17: “Survive & Thrive”: our Covid-19 response
“Survive & Thrive”: our Covid-19 response ❖ Our 5 Key themes to underpin capacity, capability and maintaining our strong balance sheet 1 Anticipate & Measure: Plan for different outcomes and track KPIs to inform our decision-making 2 Be Resilient: Ensure the safety of our colleagues and customers; m
Slide 18: Well placed to take advantage of market growth
Well placed to take advantage of market growth ❖ Our new systems enables us to move seamlessly to remote working ❖ Our global approach allows us to better serve our customers (eg. Firebase providing remote access) ❖ Our client base remains robust we have 65 Fortune 500 (52 in FY 2019) and 89 FTSE 35
Slide 19: Looking to the future: preparing to thrive post Covid-19
Looking to the future: preparing to thrive post Covid-19 ❖ Security Improvement & Remediation services Broaden and strengthen our portfolio becoming a one- Portfolio launched stop shop for services, including: ❖ Scaling up MDR ❖ Accelerating EaaS adoption Optimise our route to market so that we can
Slide 20: Summary and outlook
Summary and outlook Adam Palser CEO
Slide 21: FY 2021 current performance
FY 2021 current performance ❖ Q1 2021 trading ahead of a soft prior year comparator • Assurance boosted by exceptional M&A support engagements • Escrow flat YoY ❖ Short-term environment remains challenging and underlying demand has still not recovered to pre-pandemic levels • Parts of our customer b
Slide 22: Summary and outlook
Summary and outlook ❖ Our transformation continues and we are successfully navigating Covid-19 disruption Summary ❖ Our full year performance demonstrates our resilience and presents a strong platform for future growth ❖ Strength of recurring business in Assurance with growth of MDR and with Softwar
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Slide 24: Appendices
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Slide 25: Cyber resilience market
Cyber resilience market f Overall Managed Services f The cybersecurity market was valued at USD 161.07 billion in 2019, and it is expected to reach USD 363.05 billion by 2025, registering a CAGR of 14.5% during 2020-2025. The trends for IoT, BYOD, AI, and machine learning in cybersecurity are increa
Slide 26: Financial performance - FY 2020 income statement
Financial performance - FY 2020 income statement Table below provides a reconciliation between Pre-IFRS16 income statement on both an adjusted and statutory basis Adjusted P&L Pre- Adjusting items Statutory P&L IFRS 16 impact Statutory P&L IFRS Adjusting items Adjusted P&L IFRS IFRS 16 Pre IFRS 16 1
Slide 27: Financial performance - Income statement (Pre-IFRS16)
Financial performance - Income statement (Pre-IFRS16) 2020 2019 Adjusted Adjusting items Statutory Adjusted Adjusting items Statutory £m £m £m £m £m £m Continuing operations Revenue 263.7 – 263.7 250.7 – 250.7 Cost of sales (159.3) – (159.3) (148.9) – (148.9) Gross profit 104.4 – 104.4 101.8 – 101.8
Slide 28: Financial performance – cash (IFRS 16)
Financial performance – cash (IFRS 16) FY 2020 FY 2019 Consolidated cash flow statement £m £m For the year ended 31 May 2020 Net cash generated from operating activities 47.1 39.8 FY 2020 FY 2019 Cash flows from investing activities £m £m Purchase of property, plant and equipment (2.8) (3.0) Profit
Slide 29: Financial performance - statutory balance sheet (IFRS 16)
Financial performance - statutory balance sheet (IFRS 16) FY 2020 FY 2019 £m £m Non-current assets Goodwill 193.1 189.4 Other intangible assets 39.2 41.8 Property, plant and equipment 13.9 16.9 Right-of-use assets 28.7 - Investments 0.3 0.3 Deferred tax assets 0.5 1.1 Total non-current assets 275.7
Slide 30: Financial performance - Tax & dividends
Financial performance - Tax & dividends Tax Effective tax rate ❖ Adjusted effective tax rate attributable to continuing operations is 23.5% (FY 2019: 20.3%) ❖ Movement in the adjusted effective tax rate increase reflects more conservative R&D tax credit profile the Group has recognised an additional
Slide 31: Financial performance - Income statement - constant currency (Pre-IFRS 16)
Financial performance - Income statement - constant currency (Pre-IFRS 16) Group - at constant currency 2020 2019 Variance 2020 2019 Variance Assurance – revenue (FY20 actual rates) (£m) (£m) % (£m) (£m) % Revenue 263.7 253.3 4.1% UK 91.5 88.9 2.9% Cost of Sales (159.3) (150.5) 5.8% North America 82
Slide 32: Notations
Notations Page 5 1 The figures presented throughout this document are on a like-for-like basis when compared to prior year, they do not include any IFRS 16 adjustments. See appendix for a reconciliation to the IFRS 16 adjusted numbers 2 Estimated sales order delivery loss related to Covid-19 based o
Slide 33: 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