Kainos Group Plc · LSE:KNOS
Kainos — H1 2019 Earnings Presentation
25 slides from Kainos's earnings presentation, Nov 26, 2018
Slide 1: Interim Results
Interim Results 6 months ended 30th September 2018 Brendan Mooney | Richard McCann | 26/11/2018 Presenter Name Date
Slide 2: First half highlights
First half Very strong performance across all financial highlights indicators. • Revenue, profit, cash and sales orders all recording very strong growth. £67.2m REVENUE UP 62% Strong revenue diversification. • International up 28% to £12.8m. Performance in-line • Commercial up 30% to £17.6m. • SaaS
Slide 3: Group overview
Group DIGITAL SERVICES DIGITAL PLATFORMS(1) overview £80m £20m £60m £15m £40m £10m Digital Services: we £20m £5m are a key partner to UK government and £0m £0m the leading European FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 boutique partner for • Digital Transformation: Online digital • Smart
Slide 4: Financial Summary
Financial H1 2019 results underpin FY19 full year performance. • Based on consensus market forecasts, FY19 will REVENUE Summary £125m represent the ninth consecutive year of revenue and adjusted pre-tax profit growth £100m £75m Financial Metrics. £42.9m £55.3m £39.4m • Five-year revenue growth CAGR
Slide 5: People
People Talent development and retention is key to long term success. • Good levels of engagement, although attrition has 1,324 PEOPLE, UP 30% increased to 14% (H1 FY2018: 12%). Recruitment key to our growth plans, with 30% headcount increase to 1,324. We continue to build • 244 people joined, 91 fro
Slide 6: Customers
Customers Revenue diversification continues, across a series of segments. H1 SECTORAL REVENUE • Commercial up 30% to £17.6m (H1 2018: £13.6m). • International up 28% to £12.8m (H1 2018: £10.0m). Healthcare 17% • Healthcare up 67% to £11.0m (H1 2018: £6.6m). Government 57% Existing customers underpin
Slide 7: Digital Services
Digital Services Presenter Name Date
Slide 8: Digital Services
Digital Digital Services represents 85% of Group revenue. REVENUE Services Very strong revenue performance, up 75%. • Digital Transformation revenue up 78% to £47.0m £57.3m UP 75% (H1 2018: £26.4m). • Workday Services revenue increased 64% to £10.3m (H1 2018: £6.3m). SALES ORDERS A very strong reven
Slide 9: Digital Transformation
Digital • Assisted Prison Visits Transformation • • MOT Replacement Mobile IT • Workload Management Tool • Digital Prisons Cloud and • • View Driver Records View Vehicle Records • Digital Mortgage • Student Finance • Cloud hosting migration IdAM Platform • Online Enforcement Payments • Local Land Ch
Slide 10: Digital Transformation
Digital Very strong performance in Central Government. • Extended our presence Central Government, now MARKET SIZE Transformation operating across 16 major departments and agencies, adding Department for International Trade in the past period. £885m UK PUBLIC SECTOR FY18 SPEND Brexit: no impact. • C
Slide 11: Case Studies: Digital Transformation
Case Studies: Department for Transport – Street Manager NewDay Digital Transformation Approx. 2.5 million street and road works each year. 6 million customers of popular credit cards - Amazon, Debenhams and Top Shop. Across 153 Local Highway Our services are Authorities and 60 utility Ingesting 100G
Slide 12: The Workday opportunity
Existing Activity Planned Activity The Workday 2011 2014 2018 2021 opportunity Implementations Europe Smart SaaS Subscriptions 2011: UK Post Deployment Services 2015: BENELUX Globally, there are 33 2017: DACH, NORDICS Workday Cloud Platform partners accredited to implement Workday’s Smart SaaS Subsc
Slide 13: Workday Services
Workday Strengthened our position as leading European partner. • Strong sales closure: 33 deals signed (H1 2018: 16). MARKET SIZE Services • A total of 34 clients in mainland Europe (H1 2018: 17). Continued regional expansion, entering North £110m UK & NORTHERN EUROPE American market. • Appointed as
Slide 14: Case Studies: Workday Services
Case Studies: ConsenSys Innovate UK Workday Services 1100 employees globally. 500+ employees. Operating in 14 offices inc San Our focus on Francisco, Toronto, London, Government Agency, part of UK Research and Innovation. delivering customer Bucharest and Dubai. success has resulted in excellent cli
Slide 15: Digital Platforms
Digital Platforms Presenter Name Date
Slide 16: Digital Platforms Overview
Digital Revenues increased 13% to £9.9m (H1 2018: £8.7m). • Five-year CAGR of 32% (FY14-FY18). REVENUE TREND Platforms • Currently represents 15% of Group revenue. £12m Overview • Strong long-term revenue visibility, with backlog at £35.4m (H1 2018: £39.8m). £8m £3.6m £5.2m £4m Maintained strong R&D
Slide 17: Smart for Workday
Smart for Over 135 global customers using Smart. REVENUE TREND • Further 28 signed in H1 including Cloudera, Deakin £6m Workday University Australia, Desjardins Insurance and Delivery £0.9m Hero. £4m £0.6m Financial performance underlines strength of product £2m £4.3m £3.0m and market opportunity. •
Slide 18: Case Studies: Smart for Workday
Case Studies: Sun Life Assurance of Canada EW Scripps Smart for Workday 34,000 employees. 4,100 employees. Smart is a cloud- $29.3 billion in revenues. Leading US broadcaster with 33 stations nationwide. based SaaS solution licensed on a subscription basis to Presence in 26 countries. $865 million i
Slide 19: Evolve
Evolve Performance reflects continuing NHS funding REVENUE TREND headwinds. £6m • Revenue down 8% to £4.7m (H1 2018: £5.1m). £1.2m £0.9m £4m • Sales Orders at £0.5m (H1 2018: £2.7m). £1.2m £1.1m £0.8m £0.9m £2m Slight increase in NHS procurement activity, but generally a subdued picture. £1.9m £1.9m
Slide 20: Financial Performance
Financial Performance Presenter Name Date
Slide 21: Financials: Income Statement
INCOME STATEMENT Financials: Digital Services: • Very strong revenue growth in both segments. Income • Digital Transformation: 78%. • Workday Services: 64%. £m H1 2019 H1 2018 FY 2018 HY Change Statement • Gross Margin decreased by 4%. Digital Services 57.3 32.7 78.6 75% • Underlying staff margin un
Slide 22: Financials: Balance Sheet and Cashflow
Financials: Balance Sheet: • Limited fixed assets; IT, office equipment. BALANCE SHEET Balance Sheet • Underlying trade receivables/WIP total 68 days As at 30 September (£m) Fixed assets and investments H1 2019 3.6 H1 2018 2.9 and Cashflow (FY 2018: 75 days). • Increase in WIP at period end to £9.1m
Slide 23: Looking Ahead
Looking Ahead Presenter Name Date
Slide 24: Market Expansion
Market 2011 2014 2018 2021 Expansion PUBLIC Digital Transformation (UK) 57% OF GROUP REVENUE Workday (UK) COMMERCIAL Workday Services (UK, DACH, BeNeLux, Nordics) Kainos remains on 26% Digital Transformation (UK) track to meet OF GROUP REVENUE upgraded full year expectations. HEALTH Evolve (UK, Irel
Slide 25: Legal and Confidentiality Statement
Legal and This document contains statements about Kainos Group plc that are or may be forward-looking statements. Forward-looking statements include statements relating to (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial Confiden