Slide 1: Full Year Results
Full Year Results 12 months ended 31 March 2017 30 May 2017
Slide 2: Highlights
Highlights 2017 results in line with market expectations REVENUE • Sixth consecutive year of increased revenue and profit Digital Services: excellent operational performance • Revenue growth of 17% to £64.5m, coupled with gross margin expansion of 2% £83.5m GROWTH OF 9% Digital Platforms: key milest
Slide 3: Group Summary
Group Summary Kainos is a high growth, high-margin company providing REVENUE £100m digital services and digital platforms • Digital Services – building and configuring online platforms £75m for government and commercial customers £39.4m £42.9m £50m • Digital Platforms – specialised platforms current
Slide 4: Group Overview
Group Overview digital services Services £80m £60m • Digital Transformation: Online digital platforms for commercial and government clients £40m £20m • Workday Implementation: Deployment of Workday SaaS HR and Financials platform for enterprise customers £0m FY13 FY14 FY15 FY16 FY17 digital platform
Slide 5: People
People We continue to build an exceptionally talented and STAFF NUMBERS 975 engaged workforce • Staff numbers increased by 16% to 975 – 82% of recruitment is direct, with 18% via recruitment companies GROWTH OF 16% • Engagement remains high, attrition well below industry APPLICANTS norms at 8% (2016
Slide 6: Customers
Customers Recurring customer relationships driving revenue SECTORAL REVENUE growth in government and commercial sectors Healthcare • 91% of revenue derived from existing customers 17% (2016: 90%), Top 10 customers accounted for 52% of Government revenue (2016: 48%) Commercial 54% 29% • Commercial is
Slide 7: Digital Services
Digital Services
Slide 8: Digital Services Market Summary
Digital Services Market Summary Digital Transformation Workday Implementation UK Central and Regional UK and International; Market Government; Commercial sectors Commercial sectors Sales Model Direct Primarily Direct Market Size (est) 2017: £605m 2017: £95m Competitors Commercials Primarily T&M Prim
Slide 9: Digital Services Performance
Digital Services Performance Strong demand across customer base, improved REVENUE operating margins and increased backlog • Commercial sector delivering strong growth, up 31% to £19.7m (2016: £15.0m); continued growth in Government sector, up 12% to £44.9m (2016: £40.1m) £64.5m • Bookings up 18% to
Slide 10: Digital Transformation: Register to Vote
Digital Transformation: Register to Vote Kainos has been working with the Cabinet Office since 2014 to develop and design the digital service that allows the 46 million individuals across England, Wales and Scotland to register to vote online. In developing the service, Kainos also had to consider h
Slide 11: Financials: Digital Services
Financials: Digital Services COMMENTARY INCOME STATEMENT • Revenue: £m 2016 2017 CHANGE – Represents 77% of Group (2016: 72%) – Digital Transformation growth: 12% Revenue 55.1 64.5 17% – Workday Implementation growth: 52% Gross Profit 25.4 31.2 23% • Gross margin: – Combined margin improved by 2% Gr
Slide 12: Digital Platforms
Digital Platforms
Slide 13: Digital Platforms Overview
Digital Platforms Overview Revenue increased by 9% to £15.3m (2016: £14.0m), REVENUE TREND(1) (1) £16m 23% of total Group revenue £4.7m • SaaS orders increased 17% to £10.1m (2016: £8.6m), £12m £2.5m contracted backlog is £32.6m(2) (2016: £29.4m) £8m • All investment expensed: £4.6m (2016: £2.3m) £1
Slide 14: Digital Platforms Market Summary
Digital Platforms Market Summary Evolve Electronic Evolve Smart for Workday Medical Record Integrated Care Market NHS NHS & International International Sales Model Primarily Direct Direct / Partners Primarily Direct Market Size (est) To 2022: £230m To 2022: £395m To 2021: £240m Manual testing, Compe
Slide 15: Digital Platforms: Smart for Workday
Digital Platforms: Smart for Workday Expanding roster of blue-chip international clients REVENUE £4.7m • Added 37 international clients, to a total of 92 clients on the platform • New clients include Hitachi, Salesforce, Bristol-Myers Squibb, Ohio State University and Grant Thornton GROWTH OF 96% St
Slide 16: Digital Platforms: Evolve Integrated Care (IC)
Digital Platforms: Evolve Integrated Care (IC) Key milestones achieved following announcement of REVENUE Evolve IC in February 2016 • • Beta software released November 2016 and live operation achieved in April 2017 US: Working with partner InTouch Health, now live in £0.6m 38 hospitals LAUNCHED Q4 2
Slide 17: Digital Platforms: Evolve EMR
Digital Platforms: Evolve EMR Revenues reduced by 12% to £10.0m (2016: £11.4m) REVENUE (1) reflecting procurement slowdown in NHS(1) • • Sales performance reflects market with orders at £4.8m (2016: £9.9m), Colchester Hospital University signed Contracted backlog decreased by 35%, with backlog at £1
Slide 18: Smart for Workday Case Study: Netflix
Smart for Workday Case Study: Netflix Netflix adopted Kainos Smart automated testing tool for to improve the breadth and depth of the testing of their Workday business processes, software integrations and security. Netflix Background: 4,700 $8.8 billion 11 offices employees revenue Sudha Ramalingam,
Slide 19: Financials: Digital Platforms
Financials: Digital Platforms COMMENTARY INCOME STATEMENT • Revenue: £m 2016 2017 CHANGE – Represents 23% of Group (2016: 28%) – Worksmart growth: 96% Revenue 21.5 19.0 (12%) – Evolve EMR decline: 27% – Revenue growth excluding 3rd party: 9% Gross Profit 11.7 12.4 6% – Revenue composition • Worksmar
Slide 20: Financial Performance
Financial Performance
Slide 21: Financials: Income Statement
Financials: Income Statement COMMENTARY INCOME STATEMENT • Revenue: £m 2016 2017 CHANGE – Digital Services growth: 17% – Digital Platform growth ex 3rd party: 9% Digital Services 55.1 64.5 17% – Top 10 customer concentration: 52% (2016: 48%) Digital Platforms 21.5 19.0 (12%) Revenue 76.6 83.5 9% • G
Slide 22: Financials: Balance Sheet and Cash Flow
Financials: Balance Sheet and Cash Flow COMMENTARY BALANCE SHEET • Balance Sheet: As at 31 March (£m) 2016 2017 – Limited fixed assets; IT, office equipment Fixed assets and investments 3.4 3.2 – Average trade debtors/WIP total 74 days Debtors and WIP 20.3 22.4 (2016: 67 days) Other assets 3.3 1.6 –
Slide 23: Looking Ahead
Looking Ahead
Slide 24: Looking ahead
Looking ahead Digital Services: expansion into adjacent areas while REVENUE building on existing customer relationships • Extending geographic coverage within Europe • Workday Implementation in UK Government £83.5m Digital Platforms: sales execution and delivery of PROFIT(1) lighthouse contracts • S
Slide 25: Appendix
Appendix Full reconciliation between the previous and current segmental reporting
Slide 26: Divisional Reporting Change
Divisional Reporting Change A full reconciliation between the previous and current segmental reporting is provided below: Impact of change of financial years Previous Segmental Digital Workday Workday Work- New Segmental Digital Workday Workday Services Evolve Smart Services Smart Consolidated Servi
Slide 27: Divisional Reporting Change (cont.)
Divisional Reporting Change (cont.) Digital Workday Workday Work- Digital Workday Workday Services Evolve Smart Services Smart Consolidated Services Services Services Evolve Smart Platform Consolidated 2015 £'000 £'000 £'000 £'000 £'000 £'000 2015 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Revenue 43
Slide 28: Legal and Confidentiality Statement
Legal and Confidentiality Statement 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, indebt