Capita Plc · LSE:CPI
Capita — FY2024 Earnings Presentation
44 slides from Capita's earnings presentation, March 2025
Slide 1: Full Year Results
Full Year Results March 2025 1
Slide 2: CEO Adolfo Hernandez
CEO Adolfo Hernandez 2 2
Slide 3: Disclaimer
Disclaimer This presentation and any oral information or accompanying materials provided in connection with it (together, the “Materials”) have been prepared solely for informational purposes for the shareholders of Capita plc (“Capita”), and not for any other purpose or for any other person. Neithe
Slide 4: Recapping our strategic themes: a better Capita
Recapping our strategic themes: a better Capita Technology Efficiencies Delivery Company Improved Clarity on Workforce Delivering value to financial what Capita equipped for customers, employees performance is famous for change and shareholders 4
Slide 5: Financial Review: Performance & Insights 2024
Financial Review Performance & Insights 2024 All figures included within this presentation are on an adjusted basis unless otherwise stated CFO Pablo Andres 5
Slide 6: Financial highlights
Financial highlights +50bps operating margin £m 2024 2023 Change improvement Revenue 2,369.1 2,575.8 (8.0)% Revenue decline reflects impact of prior year Operating profit 95.9 90.9 5.5% contract losses, cessation of lower margin service lines and reduction in volumes in Contact Centre Operating marg
Slide 7: Adjusted to reported profit reconciliation
Adjusted to reported profit reconciliation Reported profit boosted by £m 2024 2023 Change business exits Adjusted profit before tax 50.0 40.9 9.1 Business exits principally reflects sale of Capita Business exits 170.9 (23.2) 194.1 One and Fera during the year Goodwill impairment relates to Contact C
Slide 8: Divisional overview
Divisional overview £m Public Service Contact Centre Pension Solutions Regulated Services plc Group 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 Revenue 1,387.2 1,399.9 650.9 797.6 179.0 170.3 152.0 208.0 - - 2,369.1 2,575.8 Operating 89.1 69.6 (5.9) (4.0) 28.1 25.9 12.6 33.1 (28.0) (
Slide 9: Capita Public Service
Capita Public Service Strong margin progress from cost reduction £m 2024 2023 Change programme Revenue 1,387.2 1,399.9 (0.9)% Revenue Operating profit EBITDA and Operating profit 89.1 69.6 28.0% (0.9)% 28.0% cash conversion Cessation of contracts in Strong improvement Cash conversion Operating margi
Slide 10: Capita Experience – Contact Centre
Capita Experience – Contact Centre Reduced overheads with continued investment £m 2024 2023 Change in technology Revenue 650.9 797.6 (18.4)% Revenue Operating loss EBITDA and Operating loss (5.9) (4.0) (47.5)% (18.4)% £1.9m decline cash conversion Operating margin (0.9)% (0.5)% (40)bps Reflects one-
Slide 11: Capita Experience – Pension Solutions
Capita Experience – Pension Solutions Strong revenue, profit and cash flow £m 2024 2023 Change improvements Revenue 179.0 170.3 5.1% Revenue Operating profit EBITDA and Operating profit 28.1 25.9 8.5% 5.1% 8.5% cash conversion Operating margin 15.7% 15.2% +50bps Growth reflects volume Improved profi
Slide 12: Capita Experience – Regulated Services
Capita Experience – Regulated Services Significant progress made on closed book £m 2024 2023 Change L&P hand backs with one client remaining Revenue 152.0 208.0 (26.9)% to agree exit Operating profit 12.6 33.1 (61.9)% Revenue Operating profit EBITDA and cash Operating margin 8.3% 15.9% (760)bps (26.
Slide 13: Cash flow
Cash flow Operating cash conversion consistent £m 2024 2023 with prior year EBITDA 186.1 196.5 Net of deferred income and CFA (51.9) (80.8) Net of deferred income and CFA reflects net unwind of DI in 2024. 2023 included accelerated releases as we exit our closed book Other working capital (including
Slide 14: Cash flow and net debt movement
Cash flow and net debt movement Net debt improvement driven by disposal £m 2024 2023 proceeds Cash generated from operations 16.2 26.5 excluding business exits Capital expenditure reflects investment in our contract delivery Net capital expenditure (49.5) (52.6) with new technology solutions and cyb
Slide 15: Liquidity & net debt
Liquidity & net debt Strong liquidity position £m 2024 2023 RCF committed to 31 December 2026 and undrawn at Revolving credit facility (RCF) 250.0 260.7 year end (2023: undrawn) Less: drawing on committed facilities - - In March 2025 issued £94m equivalent of US private Available committed facilitie
Slide 16: 2025 outlook
2025 outlook • Group: expect revenue to be broadly flat overall, based on following expected movements: o Public Service: low to mid-single digit revenue growth driven by annualised benefit of new contracts Revenue o Contact Centre: high-single digit revenue reduction, reflecting previously announce
Slide 17: CEO Update
CEO Update We have an ambitious plan to drive further transformation and improvements to Capita for the new opportunities the market brings” CEO Adolfo Hernandez 17
Slide 18: Our vision
Our vision To be the trusted partner for our clients, delivering exceptional outcomes through our approach of combining people, process and technology to deliver complex business processes at scale 18
Slide 19: BPS Market Evolution 2024-2026
BPS Market Evolution 2024-2026 Significant opportunity to continue to leverage technology going forwards, with Capita an early mover on market developments 1 Empowering clients through responsible applied AI Leverage deep industry expertise 2 Driving operational excellence at scale Transform traditi
Slide 20: Also, over the past year…
Also, over the past year… AI isn’t something… of the future, over the next hill. It’s the present. It’s already here… And (can) radically improve our public services” - Keir Starmer (Prime Minister) Selected Government commitments As we move into a new era of opportunities created by AI, we must tak
Slide 21: Recapping our strategic themes: a BETTER Capita
Recapping our strategic themes: a BETTER Capita Technology Efficiencies Delivery Company Improved Clarity on Workforce Delivering value to financial what Capita equipped for customers, employees performance is famous for change and shareholders 21
Slide 22: BETTER Technology
BETTER Technology Creating the right organisation to focus on our products and innovation Overseen by Chief AI and Product Officer, Sameer Vuyyuru 1 2 3 4 5 Delivering Empowering Outcome- Proximity Security and customer – teams based to customer Governance centric value technology as a priority Enab
Slide 23: BETTER Technology: Our hyperscaler relationships
BETTER Technology Our hyperscaler relationships Achievements so far… Looking forwards… • Using Amazon Connect to build AI enabled business • Microsoft Copilot scale up the 1.5k users (5k users in 2025) outcomes delivering savings in 2025 and building go to market capability • Partnership in place no
Slide 24: BETTER Technology: AI in Contact Centre
BETTER Technology AI in Contact Centre We’re seeing a shift in customer satisfaction that’s improving through the way we monitor and ask customers about their experience. We're seeing a much greater benefit from the adviser perspective.” – Head of Customer Service – Southern Water 210+ 5000+ 20+ £35
Slide 25: BETTER Technology: AI in Public Service
BETTER Technology AI in Public Service Appian in Local Public Service Digital Consent and PEXT in Army Recruiting Collaborating with Appian to develop an Recently developed candidate Digital Consent innovative solution for managing aged debt capability for defence recruitment allowing same in Local
Slide 26: BETTER Technology: AI in Pension Solutions
BETTER Technology AI in Pension Solutions Evolving from first job to retirement Market trends: years • Increased member demand for a seamless user experience Step change • 24/7 offering Will help expand in our service • Changes in legislation provide future opportunity offering into adjacent segment
Slide 27: BETTER Efficiencies: more cost competitive company
BETTER Efficiencies Capita is becoming a more cost competitive company +50bps improvement in operating margin £140m annualised savings £140m annualised cost savings now delivered now actioned across a number of areas Announced in December the increase in target to up to £250m to be delivered by Dece
Slide 28: Driving sustainable revenue growth
BETTER Efficiencies Focusing on cash flow and revenue growth Rebuilding sales pipeline Driving sustainable revenue growth for improved revenue base Unweighted pipeline = £11.1bn Products and innovation Opportunity to improve win rate in mid size deals 2024 win rate on opportunities with TCV between
Slide 29: Improving contract win rates is a key focus
BETTER Delivery Improving contract win rates is a key focus Capita Public Service Contact Centre Pension Solutions Continue to deliver for European telco clients – cNPS improved to Opportunities providers +28 points won in 2024 Up 12 points from 2023 including Significant opportunity to increase 18%
Slide 30: Examples of clients re-won with a better solution
BETTER Delivery Examples of clients re-won with a better solution Client A Client B Indicative financials Indicative financials Revenue: £20m Revenue: £20m • Initial tender in 2023 • Transformation challenged but operational delivery • Contract retender completed in 2024 maintained • During retender
Slide 31: Progress with manage for value
BETTER Delivery Progress with manage for value Manage for value business areas Status Capita One disposal completed in September 2024, c. £180m net Standalone Software disposal proceeds achieved Mortgages Services Sale announced December 2024, completion expected Q2 2025 Closed Book L&P (within One
Slide 32: BETTER Company – our people
BETTER Company – our people 9,000 members 68% inclusion 26% internal index across our seven (2023: 77%) mobility Employee Network (2023: 19%) Groups 2024 People Initiatives Gender balance of Employee net 64% employee all management: promoter score -33 engagement • Leadership programme and Male: 52%
Slide 33: 2024 - Year in Review
BETTER Capita 2024 - Year in Review BETTER: • Built on and developed our hyperscaler relationships Technology • Developed AgentSuite – Live at two clients with further expansion planned in 2025 • £140m annualised cost savings now delivered, target increased to up to £250m Efficiencies • Building a l
Slide 34: Heading into 2025: Strategy in action
Heading into 2025: Strategy in action delivering positive FCF from end of year Leading market Strong customer net 2025 Strategic Priorities: positions / critical promoter score supplier to government +28 points • Cost transformation • Sales effectiveness Broad portfolio of AI Bridging the gap refere
Slide 35: Q&A
Q&A 35
Slide 36: Appendix
Appendix
Slide 37: 2025 modelling assumptions
2025 modelling assumptions Depreciation & amortisation Broadly in line with 2024. Total charge c.3.5% of revenue P&L interest Broadly in line with 2024 Working capital Reduced working capital outflow Non-cash and other adjustments Broadly in line with 2024 Cash tax Broadly in line with 2024 Continue
Slide 38: Leading indicators on journey to reaching medium-term targets
Leading indicators on journey to reaching medium-term targets Leading Indicators FY24 FY23 Group and divisional overheads as a percentage of revenue 10.5% 10.7% Percentage of overall adjusted revenue from contracts where gen AI has been deployed 8.3% N/A Recurring repeat adjusted revenue from existi
Slide 39: Divisional operating cash flow
Divisional operating cash flow £m Pension Regulated Public Service Contact Centre Capita plc Group Solutions Services 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 Operating 89.1 69.6 (5.9) (4.0) 28.1 25.9 12.6 33.1 (28.0) (33.7) 95.9 90.9 profit/(loss) Depreciation, amortisation and 3
Slide 40: Revenue bridge by driver
Revenue bridge by driver £m 2,600.0 2,575.8 (56.0) 2,500.0 (89.2) 2,400.0 (94.6) 55.6 2,369.1 2,300.0 47.6 (70.1) 2,200.0 2,100.0 2,000.0 1,900.0 1,800.0 Regulated Services Losses Wins 2024 2023 Telecommunications Scope & Volume Indexation vertical 40
Slide 41: Order book bridge
Order book1 bridge Relevant to approximately 80% £m of revenue base 7,000 Two European telecommunications contract 6,000 5,882.6 (388.1) extensions in Contact Centre were framework 5,000 contracts, which are excluded from the order book. This resulted in a de-recognition from the order book 808.8 (7
Slide 42: Capita Employee Network Groups (ENGs)
BETTER Company Capita Employee Network Groups (ENGs) As part of our DEI strategy we have seven We helped improve their platform ENG’s with 9,000 active members, each with so they now take part in: an Executive Team sponsor: Monthly forums with the Chief People Officer, one Family, Multi-faith, Rainb
Slide 43: Better company – 2025 Culture Focus
Better company – 2025 Culture Focus High Review & refresh Values refresh & Global approach of our annual Performance Employee to recognition performance Culture Playbook launch cycle Refresh of AI & Data Future Skills – colleague model learning Future of work reskilling & available to all & ways of
Slide 44: Glossary of terms
Glossary of terms Term Definition Win rate Win rate is the proportion by value of contracts won as a proportion of those we bid for Operating cash conversion Calculated as operating cash flow excluding business exits divided by adjusted EBITDA Weighted pipeline The probability of winning an opportun