Rws Holdings Plc · LSE:RWS
Rws — FY25 Earnings Presentation
52 slides from Rws's earnings presentation, Feb 11, 2025
Slide 1: FY25 Results & Strategy Update
FY25 Results & Strategy Update Investor & analyst briefing December 2025 11 DECEMBER 2025
Slide 2: Presenters: Ben Faes, Candida Davies, Christina Scott
Ben Faes Candida Davies Christina Scott Chief Executive Officer Chief Financial Officer Chief Product & Technology Officer
Slide 3: Agenda
Agenda Introduction 01 Ben Faes FY25 financial review 02 Candida Davies Growth Strategy 03 Ben Faes & Christina Scott FY26 outlook & guidance 04 Ben Faes Appendix 05 Balance sheet, reporting changes, historic P&Ls
Slide 4: FY25 – A strategic inflection point: Building momentum
FY25 – A strategic inflection point: Building momentum Strategic pivot AI Services Partnerships SaaS transition Clear strategic refocus Significant growth Microsoft Now 46% of licence revenues Streamlined operating Strong momentum AWS model live into FY26 Predictable, recurring Cohere New leadership
Slide 5: FY26 – Accelerating momentum & returning to growth
FY26 – Accelerating momentum & returning to growth High growth Product innovation Strategic opportunities roadmap Efficiencies Today we unveil our 5 year vision & signal a return to growth and improving margins 5 FY25 Results & Strategy Update
Slide 6: Agenda
Agenda Introduction 01 Ben Faes FY25 financial review 02 Candida Davies Growth Strategy 03 Ben Faes & Christina Scott FY26 outlook & guidance 04 Ben Faes Appendix 05 Balance sheet, reporting changes, historic P&Ls
Slide 7: Adjusted PBT within guidance, with strong H2 at £42m
Adjusted PBT within guidance, with strong H2 at £42m Revenue Gross Margin Adjusted PBT2 Adjusted Basic EPS3 £690.1m 43.4% £60.4m 12.1p - 0.7% OCC1 - 350 bps -43% -44% (- 3.9% reported) FY24: £718.2m FY24: 46.9% FY24: £106.7m FY24: 21.6p Adjusted EBITDA4 & margin Capex Operational FCF5 Total Dividend
Slide 8: Divisional revenue performance
Divisional revenue performance IP Language Regulated Language & Content GROUP Services Services Industries Technology FY25 Revenue FY25 Revenue FY25 Revenue FY25 Revenue FY25 Revenue (YoY OCC1%) (YoY OCC1%) (YoY OCC1%) (YoY OCC1%) (YoY OCC1%) £97m (0%) £327m (+3%) £128m (-10%) £138m (0%) £690m (-0.7
Slide 9: FY24 to FY25 gross margin bridge
FY24 to FY25 gross margin bridge Limited price impact Volume/Mix • Growing TrainAI & APAC (LS), Renewals (IP Services) and SaaS (L&CT) • Weaker performance in RI and EMEA/NASA (LS) • Operational challenges in LS during migration to new automated delivery models Relatively modest price impact Sustain
Slide 10: Driving efficiency through standardisation and automation
Driving efficiency through standardisation and automation Group FTE1 (‘000) Revenue OCC/FTE2 (£k) FY25 6% reduction YoY FY25 5% increase YoY 8.1 8.1 7.6 (-6%) (-8%) Overheads FTE (+5%) Cost of Sale FTE (-5%) Focused efforts to drive continued efficiency across the Group through process improvement,
Slide 11: FY24 to FY25 Adjusted PBT bridge
FY24 to FY25 Adjusted PBT bridge trading -£15m non-trading -£32m 107 £m H2 H1 60 11 FY25 Results & Strategy Update
Slide 12: Adjusting items
Adjusting items • Non-Cash Goodwill Impairment charge within Language Services / RI CGUs of £88m reflecting: FY ended FY ended • Market transition on core 30-Sep-24 30-Sep-25 localisation business (£m) (£m) • Under performance in Linguistic Validation Amortisation of acquired 41 40 • Shift in invest
Slide 13: Cash generative operations
Cash generative operations Operational FCF1 £80m Adjusted EBITDA £101m Cash conversion² $220m Revolving Credit Facility extended to $285m, now expiring in October 2029 Net Debt/adj EBITDA <0.5x (max 3x) Interest cover 19x (min 4x) 13 FY25 Results & Strategy Update 1 Operational Free Cash Flow: Adjus
Slide 14: Agenda
Agenda Introduction 01 Ben Faes FY25 financial review 02 Candida Davies Growth Strategy 03 Ben Faes & Christina Scott FY26 outlook & guidance 04 Ben Faes Appendix 05 Balance sheet, reporting changes, historic P&Ls
Slide 15: Accelerating the shift to a technology-led AI service leader
Accelerating the shift to a technology-led AI service leader Past (FY21) Present (FY25) Future (FY30+) % revenue from AI products & services¹ 14% 28% >50% SaaS revenue / technology licence revenue 21% 46% >75% Words localised by our translation 500 billion 1 trillion >5 trillion technologies per ann
Slide 16: Our Clients: fundamental needs and new opportunities
Our Clients Their fundamental Their new needs: opportunities: o Expand into new markets o Explosion of content, increasingly & reach new audiences multimedia meaningfully RWS o Hyper-personalisation by channel, o Accelerate time to market by demographic Strategic o Trust the messages they o Global t
Slide 17: We build the Cultural Intelligence Layer for Enterprise AI
OUR 5-YEAR VISION We build the Cultural Intelligence Layer for Enterprise AI 17 FY25 Results & Strategy Update
Slide 18: We will be surrounded by AI powered experiences
THE AI-POWERED FUTURE We will be surrounded by AI powered experiences Your personal Your customer Your autonomous Robots in shopping assistant service agent car your home 18 FY25 Results & Strategy Update
Slide 19: Enterprise AI Global Customers
Enterprise AI 3 CRITICAL DEFICITS Global Customers 19 FY25 Results & Strategy Update
Slide 20: The three critical deficits that RWS solves
The three 01 02 03 critical The Data The Culture The Trust deficits Deficit Deficit Deficit that RWS Generic vs. Domain- Aware and relevant Black Box vs. solves. specific vs blind Validated & Secure 20 FY25 Results & Strategy Update
Slide 21: Our new strategy is based around 3 growth pillars
Our new strategy is based around 3 growth pillars 01. 02. 03. A new Go-To-Market An innovation roadmap An efficiency plan focused on large enterprise, to build the cultural layer To deliver a better experience to and high growth opportunities to enterprise AI at scale our clients Ben Christina Ben F
Slide 22: Refresh our go-to-market strategy
01. Refresh our go-to-market strategy Ben Faes CEO
Slide 23: Go-to-market: focus on enterprise clients
Go-to-market: focus on enterprise clients Technology first sales Building on our strengths o Solution vs transaction o Trustful relations with largest o Integrated, secured, recurring enterprises o Scalable and self re-inforcing o Heritage of cultural understanding o Global footprint Strategic verti
Slide 24: RWS language products now available via Microsoft Copilot & Teams
Development of strategic RWS language products now available partner network via Microsoft Copilot & Teams 01 02 03 04 Launched at Sole New way Part of Microsoft’s 3rd party for clients our tech annual tech translation to access journey - & innovation tool in Trados & static conference Copilot Langu
Slide 25: Technology & innovation
02. Technology & innovation Christina Scott CPTO
Slide 26: Key trends guiding our product innovation
Key trends Explosion in Desire to AI Global guiding our content drive value verification relevance product volume and formats from AI innovation. 26 FY25 Results & Strategy Update
Slide 27: Our customer priorities
Our customer priorities Trusted partners to help Gaining competitive Scalability – increase them negotiate the AI advantage – speed, in machine output landscape successfully cost, coverage over human output Linking AI investment Seamless integration Reassurance in AI to business outcomes with workfl
Slide 28: Core principles that will power our products
Core principles that will power our products Embedded where Multimodal customers work AI First – human Flexible and enriched technology open architecture Orchestration of technology Secure and verified & humans’ workflows Focused on business outcomes 28 FY25 Results & Strategy Update
Slide 29: Building our next generation AI-first products
Building our next generation AI-first products Connectivity APIs Agentic Embedded Portal Layer RWS Products AI native enterprise Multimedia AI content transformation AI powered IP attorney knowledge base platform delivering cultural intelligence productivity platform Verification & explainability in
Slide 30: RWS has the AI heritage to win
Autonomous RWS has the AI heritage to win Agentic Systems for Decision Making and Transformation Translation Agents into MsfT CoPilot and AWS marketplace Evolve patented - Quality Estimation + and Auto Post Editing from LLMs Proprietary Quality RWS and Cohere for Estimation models Models for best-of
Slide 31: Efficiency
03. Efficiency Ben Faes CEO
Slide 32: Driving the change
Driving the change Only a fraction of Cost - a concern content is localised in & a limitation to a subset of languages most clients We need a more efficient This worsens as content explodes & new market solution with scalable processes, opportunities are emerging lean delivery systems & optimized wo
Slide 33: Driving the change - 3 focus areas
Driving the change - 3 focus areas Rationalisation Offshoring AI efficiency Sunsetting & migration towards digital / Established part of our DNA – Production: building agentic platform AI-optimised target operating model Czechia, Romania as key hubs in partnership with tech partners + 20% RWS collea
Slide 34: Our KPIs to measure success - FY25 to FY28
Our KPIs to measure success - FY25 to FY28 01. 02. 03. A new Go-To-Market An innovation roadmap An efficiency plan focused on large enterprise, to build the cultural layer to deliver a better experience to and high growth opportunities for enterprise AI at scale our clients Net Repeat Rev: Top 100 S
Slide 35: Agenda
Agenda Introduction 01 Ben Faes FY25 financial review 02 Candida Davies Growth Strategy 03 Ben Faes & Christina Scott FY26 outlook & guidance 04 Ben Faes Appendix 05 Balance sheet, reporting changes, historic P&Ls
Slide 36: Old reporting structure
Language Services AI data services (TrainAI) FY24 Revenue - £327m Localisation solutions for multiple verticals Old reporting structure FY25 Revenue - £327m (+3%)¹ Content management Language & Content Technology technology FY24 Revenue - £142m Linguistic AI – neural MT Language technology – FY25 Re
Slide 37: New reporting structure
Language Services AI data services (TrainAI) FY24 Revenue - £327m New reporting structure Content management technology FY25 Revenue - £327m (+3%) FY24 Revenue FY25 Revenue £113m £133m (+22%)¹ Language & Content Technology FY24 Revenue - £142m Life sciences Localisation solutions for multiple vertic
Slide 38: Strategic focus – Generate, Protect and Transform
Strategic focus – Generate & Protect powering Group growth while we pivot Transform SHORT – MEDIUM TERM Technology at the heart of Go-To-Market Groupwide efficiency programme 38 FY25 Results & Strategy Update
Slide 39: FY26 & medium-term guidance – revenue
FY26 & medium-term guidance – revenue FY26 Medium-term Revenue Low to mid- Expect Group growth to accelerate Mid-teens Mid-single Low single single digit • Transform (OCC growth %) digit growth digit growth digit growth decline Tech-first offering & growing business lines with resilient pricing grad
Slide 40: FY26 & medium-term guidance – profit and cash
FY26 & medium-term guidance – profit and cash FY26 Medium-term Expect gradual improvement in profitability Profitability Expansion Transform (Gross margin %) c. 150bps • New tech platform/redesigned processes come onstream • Tech-first model provides more efficient delivery and economies of scale Ge
Slide 41: Investments governed by capital allocation policy
Investments governed by capital allocation policy Continued strong cash generation and disciplined capital allocation Invest to accelerate Appropriate capex Progressive Dividend Acquire for organic growth & and prudent further growth maintain BAU 01 leverage 02 03 04 Invest in go-to-market Normalise
Slide 42: An AI solutions company - uniquely positioned to grow
An AI solutions Building the Pivoting our Outlook – company - Cultural business model encouraging exit uniquely Intelligence to deliver rates for FY25 positioned to Layer for improved & and solid trading grow on the Enterprise AI sustained quality momentum into back of AI of earnings FY26 advancemen
Slide 43: Q&A
Q&A
Slide 44: About us
About us RWS is a content solutions company, powered by technology and human expertise. We grow the value of ideas, data and content by making sure organizations are understood. Everywhere. Our proprietary technology, 45+ AI patents and human experts help organizations bring ideas to market faster,
Slide 45: Agenda
Agenda Introduction 01 Ben Faes FY25 financial review 02 Candida Davies Growth Strategy 03 Ben Faes & Christina Scott FY26 outlook & guidance 04 Ben Faes Appendix 05 Balance sheet, reporting changes, historic P&Ls
Slide 46: Income statement
Income statement FY ended FY ended FY'25 Actuals 30-Sep-25 30-Sep-24 vs. FY'24 (£m) (£m) (£m) Revenue 690 718 -28 Gross profit 299.3 336 -37 Gross margin % 43.4% 46.9% -350bps Administrative expenses -233 -224 -9 (before adjusting items) Net finance costs -6 -6 0 Adjusted profit before tax 60 107 -4
Slide 47: Balance Sheet
• Goodwill decreased £85m due to impairment £88m Balance Sheet • partially offset by FX translation £3m Other non-current assets decreased £8m mainly due to depreciation £12m partially offset by additions £5m • Asset Held for Sale is the Chalfont office • Cash reduction of £29m due to improved cash
Slide 48: FX rates and hedging
FX rates and hedging Sustained focus on currency management in light of the continued strengthening of GBP against USD and EUR USD surplus cashflows actively managed: • Hedging policy: hedge of net surplus cashflows (> 50%) on an annual basis • Hedged at transactional level for main currencies, nota
Slide 49: Modelling considerations for FY26
Modelling considerations for FY26 Weighting H1/H2 matching prior year Average FX: £/$ 1.32 and £/€ 1.14 FY26 Group Low single digit growth Generate Mid-teens digit growth Revenue growth (OCC%) Transform Low to mid-single digit decline Protect Mid single digit growth Gross Margin Group c. +150 bps Ad
Slide 50: Market view: Generate addressable markets
Market view Generate addressable markets, 2025-2028 (total size £6.3Bn in 2025) Component content AI data services market management market £Bn £Bn +20-22% 8.1 +9-10% 2.2 4.6 1.7 2025 2028 2025 2028 The component content management market (CCMS) is The AI data services market is growing >20% CAGR wi
Slide 51: Market view: Language industry market
Market view Language industry market, 2025-2028 (total size of £23.7Bn in 2025) Language services (LSIs) Technology platforms (LTPs) £Bn £Bn -1-2% +14-16% 5.7 20 19.1 3.7 2025 2028 2025 2028 Language services including core translation, editing, Language technology (including Machine Translation / L
Slide 52: Market view: Protect addressable market
Market view Protect addressable market, CAGRs Key ‘25-28 drivers 2025-2028 Strong growth in renewals £Bn +4-5% Renewals +5-7% driven by an increase in 2.1 (Patents) patents in force 1.9 Stable growth; will see 39% spend shifts from basic Translations +1-3% Machine Translation 38% workflows to higher