Gb Group Plc · LSE:GBG
Gb — GBG — FY2023 Earnings Presentation
32 slides from Gb's earnings presentation, June 2023
Slide 1: Results presentation
Results presentation For the year ended 31 March 2023 Chris Clark David Ward CEO CFO Investor presentation – June 2023 1
Slide 2: Disclaimer
Disclaimer Restricted distribution Forward-looking statements This presentation is not for release, publication or distribution, in whole or in part, directly or indirectly, in, into or from any jurisdiction where to do so would This document contains certain forward-looking statements, including st
Slide 3: Introduction & FY23 review
Introduction & FY23 review Chris Clark - CEO Investor presentation – June 2023 3
Slide 4: FY23 at a glance
FY23 at a glance Important strategic progress Financial summary Revenue and adjusted operating profit Simplification & efficiency as previously announced • Pro forma revenue £279.8m, up 3.7% on a constant currency basis Product innovation ‒ Strong performance in Fraud and Location Cross-sell / up-se
Slide 5: Location
Location Validating accurate and reliable address data to ensure our customers can, with minimum friction, provide their products and services to the right people, in the right place Simplification FY23 revenue & efficiency • The next generation of the industry’s most advanced type-ahead address cap
Slide 6: Identity
Identity Building trusted relationships through document and data identity verification to prove an individual is who they say they are and good to do business with, which can help prevent crimes such as money laundering and identity fraud Simplification & efficiency • Acuant integration complete. E
Slide 7: Fraud
Fraud Offering real-time protection and regulatory compliance protection against modern-day financial crimes, identifying and helping to prevent or pursue bad actors to avert crimes such as identity, application and transaction fraud Simplification • Deploying fraud data-sharing consortium approach
Slide 8: Making a positive difference to society
Making a positive difference to society Safeguarding our customers and their consumers from negative impacts is at the heart of the solutions we offer Three pillars drive our key ESG initiatives Environment Everyone Ethics New goals set out to reduce and • Exceed 40% female • Put the ethical use of
Slide 9: Financial review
Financial review David Ward - CFO Investor presentation – June 2023 9
Slide 10: Financial review
Financial review Higher statutory revenue and adjusted operating profit. Our cash-generative model continues to support ongoing investment in the business and the repayment of the debt £278.8m £59.8m (£127.2)m (£105.9)m 4.00p Statutory revenue Adjusted operating Total exceptional Net debt as at Fina
Slide 11: Group income statement
Group income statement FY23 FY22 £m £m Growth • 15% statutory revenue growth; 3.7% on a pro forma constant Statutory revenue 278.8 242.5 +15.0% currency basis Cost of sales (81.0) (70.5) • Consistent gross profit margin Gross profit 197.8 171.9 +15.1% • Higher OPEX due to prior year acquisitions, sa
Slide 12: Exceptional items
Exceptional items Total net exceptional charge of £127.2m includes a £122.2m non-cash goodwill impairment charge following annual impairment review Impairment of goodwill Other exceptional items • Annual impairment review conducted on the Group’s Exceptional costs of £5.0m (FY22: £4.5m) were incurre
Slide 13: Group balance sheet
Group balance sheet FY23 FY22 £m £m Variance FY23 cash conversion Tangible assets 5.2 7.3 (2.1) Adjusting for specific non-recurring factors, cash conversion is 87% Goodwill & intangible assets 854.3 971.9 (117.8) 87.0% Deferred tax assets 0.8 0.7 0.1 Non-current receivables 4.3 - 4.3 Non-current as
Slide 14: Group revenue bridge
Group revenue bridge • Statutory revenue growth of 15.0%; pro forma constant currency growth of 3.7% • Growth from new customers consistent with our mid-term guidance Driven by • Customer retention remains high, but net revenue retention (NRR) lower new logo revenue ~4.8% • Historic growth typically
Slide 15: A diversified revenue mix
A diversified revenue mix Delivering our solutions through a mix of commercial models across a good spread of sectors and geographies Revenue by type Subscription-based revenue Transaction/consumption revenue FY22¹ 50% 42% 8% £273.8m Other revenue (e.g. services & hardware) £137.6m £114.8m £21.4m 57
Slide 16: Sustaining efficiency and disciplined investment
Sustaining efficiency and disciplined investment Our intense focus on efficiency will drive long-term benefits while also protecting short-term margins Areas of focus Investing for Operational efficiency Product & technology Sales & marketing the future • Driving operating leverage from • Simplified
Slide 17: Well-positioned for profitable growth in the mid-term
Well-positioned for profitable growth in the mid-term Committed to our FY24 outlook reflects the challenging short-term macro mid-term growth targets • Continue to expect some gradual revenue acceleration in the latter part of the year Revenue growth • The Board is confident that GBG will deliver it
Slide 18: Summary & looking ahead
18 Summary & looking ahead Chris Clark - CEO Investor presentation – June 2023 18
Slide 19: Summary
Summary • FY23 impacted by post-pandemic corrections, particularly Identity in the Americas • Demonstrated good growth throughout the wider business, strong new business, excellent customer retention and momentum on cross-sell and up-sell • Delivered important strategic progress and operational impr
Slide 20: Operating in a market with enduring structural growth
Operating in a market with enduring structural growth Industrialisation of Competitive need to Regulation and Digital acceleration fraud and financial reduce friction increasing compliance crime Accelerated by developments such as generative AI, increasing the market opportunity Investor presentatio
Slide 21: Pursuing efficiency, differentiation and expansion
Pursuing efficiency, differentiation and expansion Our priority in FY24 is to focus investment to meet rapidly changing customer needs Simplification Product Cross-sell / up-sell Geographic Entering new & & efficiency innovation to existing customers expansion emerging sectors To deliver profitable
Slide 22: Q&A
Q&A Investor presentation – June 2023 22
Slide 23: Appendices
Appendices Investor presentation – June 2023 23
Slide 24: Modelling considerations for FY24 – Foreign exchange
Modelling considerations for FY24 – Foreign exchange Currency % of group FY23 GBG internal Impact modelling (vs. GBP) revenue average rate FY24 rate 1 cent move in the average exchange rate impact: US Dollar 40% 1.21 ~1.26 • Revenue by c.0.3% • Adjusted operating profit of c.0.5% 1 cent move in the
Slide 25: Modelling considerations for FY24 – Finance costs
Modelling considerations for FY24 – Finance costs Based on our current repayment profile & prevailing rate, our forecast charge is approximately £8.5 million: Current interest rate % Impact of interest rate move 5.05% A 25 bps move in the US Secured Overnight Financing Rate (SOFR) (Current rate as o
Slide 26: Modelling considerations for FY24 – Tax rate
Modelling considerations for FY24 – Tax rate UK USA Australia Other Group % of Adjusted Operating Profit 50 - 55% 35 - 40% c.7% c.3% 100% FY23 Actual Effective Tax Rate1 18%3 26%4 24%5 28% 21% Change in Statutory Tax Rate2 6% - - - n/a Forecast FY24 Effective Tax Rate1 24% 26% 27% 17 - 30% 25-27% No
Slide 27: Cash flow statement
Cash flow statement FY23 FY22 £m £m Variance Debt leverage & borrowing Adjusted EBITDA 63.1 62.2 0.9 Net cash / 31 Mar 23 31 Mar 22 31 Mar 21 (2.8) debt analysis £m £m £m Working capital (20.8) (18.0) 59.4 Cash 21.6 22.3 21.1 Adjusted operating cash flow 42.3 (17.1) Debt (127.5) (129.3) - Exceptiona
Slide 28: Pro forma revenue breakdown
Pro forma revenue breakdown Adjusting for the impact of acquisitions, disposals and non-repeating revenue Pro forma FY23 Pro forma FY22 Constant currency change % £m % of Rev £m % of Rev Subscriptions: - Transactions / consumption-based 45.4 16% 45.0 18% (2.0)% - Term-based 113.3 41% 92.6 36% 15.4%
Slide 29: Cryptocurrency volumes declined due to broader macroeconomic and market volatility
Cryptocurrency volumes declined due to broader macroeconomic and market volatility • 1H23 cryptocurrency volumes had declined significantly Revenue from cryptocurrency customers year on year due to the broader macro slowdown and £m FY23 FY22 Decrease market volatility, which has impacted this sub-se
Slide 30: Historic performance by segment
Historic performance by segment Statutory revenue £m FY17 FY18 FY19 FY20 FY21 FY22 FY23 Location 25.2 41.9 47.9 51.5 59.7 66.3 76.9 Identity 33.5 43.9 58.2 105.4 128.1 142.8 162.7 Fraud 21.3 25.9 29.1 35.5 26.5 33.3 39.2 Other 7.5 8.0 8.3 6.7 3.4 0.1 - Group revenue 87.5 119.7 143.5 199.1 217.7 242.
Slide 31: Historic performance
Historic performance Statutory revenue (£m) 5-year CAGR = 14.2% Adjusted operating profit (£m)1 5-year CAGR = 13.3% 300 60.0 250 278.8 50.0 58.8 59.8 57.9 200 242.5 40.0 47.9 217.7 199.1 150 30.0 32.0 100 143.5 20.0 50 10.0 0 - FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 Adjusted operating mar
Slide 32: Contact
Contact David Ward CFO david.ward@gbgplc.com Richard Foster Senior Manager, Investor Relations richard.foster@gbgplc.com