Eckoh — H1 FY2023 Earnings Presentation
38 slides from Eckoh's earnings presentation, November 2022
Slide 1: Engage. Secure. Protect.
00 Engage. Secure. Protect. Eckoh results for the period ended September 30th 2022
Slide 2: Agenda
Interim results – period ended 30.09.22 00 2 Agenda. Results overview and 1 strategic view 2 Financial highlights Operations review NA operation 3 UK&I operation ROW operation Customer Engagement 4 Security Solutions 5 Summary
Slide 3: Highlights
Interim Preliminary results results – period – year ended ended 30.09.22 31.03.22 Results Highlights 00 3 Highlights. q Strong trading performance with progress in all areas q Strong ARR1 growth especially in the US, driven by our clients’ need to protect data q Integration of Syntec (‘Syntegration’
Slide 4: Financial Highlights H1 FY23
Interim results – period ended 30.09.22 Financial Highlights 4 00 Financial Highlights H1 FY23. Group ARR 1 NA Security ARR 1 Revenue £27.8m $13.8m £19.6m 2 52% 2 45% 71% +$5.7m 33% 26% (Sep 30, 2021 £18.3m) (Sep 30, 2021 $8.1m) (H1 FY22: £14.7m) Total business 3 Operating profit 4 Adj. diluted EPS
Slide 5: Growth Drivers in a Global Market
Interim results – period ended 30.09.22 Growth Drivers 00 5 Growth Drivers in a Global Market. CONFIDENTIAL – NOT FOR DISTRIBUTION Improving Engagement Reducing Fraud Maximising Cost Benefit Regulatory Compliance Digital Adoption Managing Financial and Transition to Cloud Reputational Risk Customer
Slide 6: Industry Trend – Shift to home-based agents
Interim results – period ended 30.09.22 Industry Trend 00 6 Industry Trend – Shift to home-based agents.* CONFIDENTIAL – NOT FOR DISTRIBUTION 10% 2019 87% 2020 89% 2021 77% 2022 • Pre-pandemic only 10% of US Contact Centres had more than 50% of their agents working remotely • This peaked at 89% in 2
Slide 7: Strategic Goals
Interim results – period ended 30.09.22 Strategic Goals 00 7 Strategic Goals. q Capturing further market leadership in Customer Engagement Security Solutions q Capitalise on structural developments in the global market for technology solutions that help protect customer data q Maximise client value
Slide 8: Summary Financials
Interim results – period ended 30.09.22 Financial Highlights 00 8 Summary Financials. £M H1 FY23 H1 FY22 Variance Revenue 19.6 14.7 +33% Gross profit 15.5 11.9 +31% Gross profit margin (%) 79% 81% -120bp Adjusted1 EBITDA 5.0 3.5 +44% Adjusted1 operating profit 4.2 2.8 +52% Profit before tax 2.9 2.4
Slide 9: ARR and Contracted Business
Interim results – period ended 30.09.22 Financial Highlights 00 9 ARR and Contracted Business. Contracted business (£m) q Group ARR1 £27.8m, an increase of 52% (H1 FY22: £18.3m). £20 ARR has grown 11% since year end £15 q Total contracted business2 £17.6m compared to £11.5m in 9.4 H1 FY22, strong gr
Slide 10: Divisional Trading Analysis
Interim results – period ended 30.09.22 Financial Highlights 00 10 Divisional Trading Analysis. q Revenue now split into North America, UK & Ireland and Rest of World (NA, UK&I, ROW) (Revenue £m) H1 FY22 1 H1 FY23 1 q North America revenue accounts for 44% of Group revenue. In FY24 we expect it to b
Slide 11: North America Trading Analysis
Interim results – period ended 30.09.22 Financial Highlights 00 11 North America Trading Analysis. Revenue by Activity Y-o-Y ($m) 9.6 q Security Solutions ARR1 $13.8m, an increase year on year of $5.8m or 71% 10 7 8 q Security Solutions ARR has grown 16% since year end 6 4 0.9 1 q Revenue up 33% to
Slide 12: UK & Ireland and ROW Trading Analysis
Interim results – period ended 30.09.22 Financial Highlights 00 12 UK & Ireland and ROW Trading Analysis. q ARR1 £16.4m, an increase year on year of £4.0m or 32% Revenue Split by Activity q Revenue up 22% to £10.9m (H1 FY22: £9.0m2), H1 FY22 34% q Total contracted business3 £9.7m, up 29% (H1 FY22: £
Slide 13: Syntegration – High level view
Interim results – period ended 30.09.22 Syntegration 00 13 Syntegration – High level view. • Acquisition of Syntec consolidated our market leading position in customer engagement security • It brought synergistic cost and revenue benefits, adding complementary operations, attractive technology, IP,
Slide 14: The Secure Voice Appliance
Interim results – period ended 30.09.22 Syntegration 00 14 The Secure Voice Appliance. 4x call density over the Single code base for previous platform Cloud and physical equipment deployment Secure Highly available ~1 Voice Real-time sec mid call failover observability and Appliance monitoring Seaml
Slide 15: Customer Engagement Security Offering
Interim results – period ended 30.09.22 Product Update 00 15 Customer Engagement Security Offering. CONFIDENTIAL – NOT FOR DISTRIBUTION Available now Verification & Fraud In flight Prevention Future Call Real Time Recording Voice & Data Transcription Redaction and AI Reporting Advanced and DataGuard
Slide 16: Comprehensive Security
Interim results – period ended 30.09.22 Product Update 00 16 Comprehensive Security. CONFIDENTIAL – NOT FOR DISTRIBUTION DataGuard As a merchant, I need to: Advanced Secure Speech Chat Digital “…have our agents take “…have our agents take Payments payments over the payments in web chat Voice phone w
Slide 17: US Contact Centre Tech Investment Plans
Interim results – period ended 30.09.22 Product Update 00 17 US Contact Centre Tech Investment Plans.* Change within 1 year AI / Machine Learning 25% Speech Recognition 19% SMS / Messaging Apps 32% Interaction Analytics 33% Web Chat 22% Call Recording 24% • Significant cross selling or portfolio sal
Slide 18: In flight and roadmap
Interim results – period ended 30.09.22 Product Update 00 18 In flight and roadmap. Call Recording Real Time Voice Verification and Fraud & Data Transcription Prevention Redaction and AI Redactable Call Recording Secure Transcription Local or Cloud based storage Gateway to other services ‘call as da
Slide 19: North America Security Solutions Overview
Interim results – period ended 30.09.22 Operations Overview 00 19 North America Security Solutions Overview. q Significant growth with new business of $6.5m back to NA - Total Orders by HY ($m) FY21 levels (H1 FY22: $3.2m) $10,000 $8,000 q Significant wins include a $2.0m win for a Fortune 100 $6,00
Slide 20: UK, Ireland & ROW Overview
Interim results – period ended 30.09.22 Operations Overview 00 20 UK, Ireland & ROW Overview q Revenue growth of 22%, a combination of acquisition and underlying single digit growth in UK, Ireland and ROW with the increase in global contracts sold by the UK team q Total business1 of £9.7m up 29% fro
Slide 21: Summary and Outlook
Interim results – period ended 30.09.22 Summary and Outlook 00 21 Summary and Outlook. q Strong trading performance and ARR growth q Renewed progress in North America, with UK & Ireland returning to growth q Syntec acquisition is driving efficiency and innovation q Industry remote working trend has
Slide 22: Vision Statement
Interim results – period ended 30.09.22 Vision Statement 00 Vision Statement. We care about making the world secure. We believe everyone should be able to trust every brand and engage without risk.
Slide 23: Investment Case
Interim Preliminary results results – period – year ended ended 30.09.22 31.03.22 Investment Case 00 23 Investment Case. q Long term growth drivers § Significant market opportunity – a largely untapped market, enhanced with new product § Patented IP and limited competitive threat – no homegrown US c
Slide 24: Thank you
Interim results – period ended 30.09.22 00 24 Thank you. Nik Philpot CEO DD: +44 1442 458358 nik.philpot@eckoh.com Chrissie Herbert CFO DD: +44 1442 458329 chrissie.herbert@eckoh.com
Slide 25: Appendix – History
Interim results – period ended 30.09.22 Appendix 00 25 Appendix 1 – History § Dec 1999 Float on FTSE as 365 Corporation § Jan 2002 Sale of internet business § May 2002 Change of name to Eckoh, new customer engagement strategy § June 2003 Eckoh moves to AIM § July 2006 Symphony share sold to Redstone
Slide 26: Appendix – Financial Information
Interim results – period ended 30.09.22 Financial Information 00 26 Appendix – Financial Information.
Slide 27: Commercial Model – Implications of shift to Cloud
Interim results – period ended 30.09.22 Financial Background 00 27 Commercial Model – Implications of shift to Cloud q Move to Cloud drives greater revenue visibility and earnings quality CLOUD/Hosted On premise (US & UK) solution (US) q More than 50% of US Secure Payments contract value in FY21 fro
Slide 28: Appendix – Balance Sheet Sept 2022
Interim results – period ended 30.09.22 Financial Highlights 00 28 Appendix – Balance Sheet 30 Sept 2022 30 Sept 30 Sept 31 Mar £’000 22 21 2022 Intangible Fixed Assets 38,860 6,508 39,664 Acquisition of Syntec Mainly comprised of HQ building and hosted Tangible Fixed Assets 4,433 4,074 4,189 teleph
Slide 29: Appendix – Cashflow Statement
Interim results – period ended 30.09.22 Financial Highlights 00 29 Appendix – Cashflow Statement £’000 30 Sept 2022 30 Sept 2021 31 Mar 2022 Profit after tax 2,258 1,922 1,575 Depreciation / Amortisation 2,074 816 2,318 Share based payments 26 197 241 Taxation 683 461 743 Other (701) 28 (27) Operati
Slide 30: Appendix – CMD Summary slides
Interim results – period ended 30.09.22 Financial Information 00 30 Appendix – CMD Summary slides
Slide 31: Industry Trends
Interim results – period ended 30.09.22 00 31 Industry Trends
Slide 32: US Contact Center Industry 2021
Interim Preliminary results results – period – year ended ended 30.09.22 31.03.22 00 32 US Contact Center Industry 2021 • 38,650 Contact Centers • 3,750,000 Agent positions/seats • 5,336,600 Contact Center employees * Contact Babel – US Contact Centers 2022-2026 (Published February 2022)
Slide 33: US Agent Positions Trend
Interim Preliminary results results – period – year ended ended 30.09.22 31.03.22 00 33 US Agent Positions Trend • Agent positions will peak at 3.8m in 2023 before declining to 3.7m by 2025 • This is comparable level to 2019 levels (pre-pandemic) * Contact Babel – US Contact Centers 2022-2026 (Publi
Slide 34: Home-based agents trend
Interim Preliminary results results – period – year ended ended 30.09.22 31.03.22 00 34 Home-based agents trend • Pre-pandemic, 43% of survey respondents were using homeworking, with 5% running a pilot scheme or about to set one up • In 2021, these figures were 79% and 4% respectively • In 2019, 34%
Slide 35: Home-based agents trend
Interim Preliminary results results – period – year ended ended 30.09.22 31.03.22 00 35 Home-based agents trend • Extensive use of homeworking agents is seen across all sizes of Contact Center operations * Contact Babel – US Contact Centers 2022-2026 (Published February 2022)
Slide 36: Home-based agents trend
Interim Preliminary results results – period – year ended ended 30.09.22 31.03.22 00 36 Home-based agents trend • Pre-pandemic only 10% of Contact Centers had more than 50% of the agents working remotely • This peaked at 89% in 2021, but post-pandemic that figure is still 77% * Contact Babel – US Co
Slide 37: Interactions by Channel
Interim Preliminary results results – period – year ended ended 30.09.22 31.03.22 00 37 Interactions by Channel • Live agent telephony will continue its gentle decline but remain the largest single channel • Email peaked in 2019 at 14% but will decline slowly as web chat and messaging become more po
Slide 38: Interactions by Channel 2021
Interim Preliminary results results – period – year ended ended 30.09.22 31.03.22 00 38 Interactions by Channel 2021 Social, 3.7% Other, 2.0% • Live agent telephony will continue its Chat, 8.2% gentle decline but remain the largest single channel Email, • Email peaked in 2019 at 14% but will decline