Slide 1: Full Year Results
Full Year Results For the year ended 31 May 2021 14 September 2021
Slide 2: Overview
Overview Adam Palser CEO necgroup~
Slide 3: Executive Highlights
Executive Highlights1 Revenue ❖ Strong trading performance despite the pandemic • Revenue, GP, Adjusted EBIT and margins grown £270.5m • Free Cash Flow increased to £34.6m with cash conversion LfL 4 at 97.9% +2.6% FY 2020: £263.7m ❖ Significant value-enhancing acquisition Adjusted EBIT LfL2 • USD220
Slide 4: A dynamic market
A dynamic market Which pandemic will you be worrying more about next year? Market dynamics ❖ FY 2021 has been a tale of two pandemics: one biological (Covid-19), the other digital (cyber) • Ransomware continues to grow exponentially: our analysis shows a 288%1 increase in Cloud adoption ransomware a
Slide 5: Investing for growth
Investing for growth Keeping NCC Group at the leading edge of the cyber industry ❖ Successful development of key propositions for the future • UK launch of our new Remediation service generated revenues of £2.1m and a current pipeline of ~£3.4m • We have extended our Managed Service offerings to enc
Slide 6: A hub for cyber talent
A hub for cyber talent Our people are the heart of our success ❖ Everyone is welcome • We are embracing more flexible ways of working • Our four colleague resource groups strive to make NCC Group an inclusive place for everyone: • Gender • Race & Ethnicity • LGBTQIA+ • Neurodiversity ❖ Wellbeing has
Slide 7: Financial Review
Financial Review Tim Kowalski CFO
Slide 8: Change in IFRIC 'cloud computing' guidance
Change in IFRIC ‘cloud computing’ guidance Cloud customisation costs required to be expensed further to a change in guidance to implement the IFRIC agenda decision Cloud customisation costs FY2021 FY2021 ❖ Cloud customisation costs of £5.1m included within ISIs Before After (FY2020: £7.9m) further t
Slide 9: Financial summary (Pre-Cloud computing adjustment)
Financial summary (Pre-Cloud computing adjustment) Performance demonstrates enduring nature of our market, business model and operations Revenue Gross Profit Gross Margin % £270.5m £110.6m 40.9% +2.6% FY 2020: £263.7m +5.9% FY 2020: £104.4m +1.3 ppts FY 2020: 39.6% 1 2 Adjusted EBIT LfL Adjusted EBI
Slide 10: Financial performance – Group income statement
Financial performance – Group income statement Year-on-year revenue growth and a significant increase in adjusted EBIT IFRS 16 FY 2021 FY 2020 Revenue Restated % change £m £m ❖ Year-on-Year revenue growth for the Group Revenue 270.5 263.7 2.6% ❖ Constant currency YoY growth of 3.6% Gross Profit 110.
Slide 11: Financial performance – Assurance
Financial performance – Assurance A growing engine of profitability Revenue ❖ Assurance grew 3.4% to £233.9m despite the pandemic, 3.9% £ growth 6.5% $ growth impact of USD FX and lower rechargeable travel expenses $104.6 $111.4 £98.8 £102.7 ❖ Accelerating H2 2021 across majority of geographies: 5.9
Slide 12: Financial performance – Assurance
Financial performance – Assurance Positioned for accelerated growth with investments in key propositions Global Professional Services (GPS) (+3.6% YoY) Revenue by service line (£m) ❖ The stability of our day rates YoY highlights the enduring sustainability of our business model ❖ Remediation service
Slide 13: Financial performance – Software Resilience
Financial performance – Software Resilience A transformational period with the foundations for the future firmly in place Revenue Revenue by segments FY 2020 ('m) FY 2021 ('m) ❖ Software Resilience revenue decreased by 2.4% YoY to £36.6m: 2.7% £ decline • Contracts revenue lower albeit offset by ver
Slide 14: Financial performance – Software Resilience
Financial performance – Software Resilience Strong growth of EaaS continues Escrow as a Service (EaaS) EaaS orders and revenues (£m’s) ❖ 83.3% growth in orders YoY ❖ Ongoing momentum ahead of prior year with the weighted year end EaaS pipeline at £1.1m ❖ Confidence in continuing growth trajectory, f
Slide 15: Operational KPIs
Operational KPIs Robust performance indicators Sales ❖ Group Sales Orders, up YoY (8.9%): FY 2021 FY 2020 • Pace and volume returned over H2 2020 Sales • Remediate offering (helping customers to fix vulnerabilities Group sales orders (£m) 320.6 294.3 after identifying them) has seen strong interest
Slide 16: Financial performance – Cash
Financial performance – Cash Free cash flow grew to £34.6m Net cash/(net debt) and cash conversion ❖ Cash improvement of £16.8m with adjusted net cash1 of £12.6m FY 2021 FY 2020 vs net debt of £4.2m in FY 2020 (£m) (£m) ❖ Cash conversion2 of 88.2%; continue to expect a 85% normalised Cash flow befor
Slide 17: Looking forward
Looking forward Higher revenue growth expected partially offset by higher costs from inflationary wage pressures and the return of travel and office costs ❖ Current trading: • Q1 2022 revenue growth was stronger than prior year in local currency but we experienced some un-anticipated disruption in c
Slide 18: Our focus on growth
Our focus on growth Adam Palser CEO
Slide 19: Focus on growth
Focus on growth Taking advantage of the dynamic resilience market Our vision is to be the leading cyber security advisor globally. Trusted and sought after for our complete people-led, technology- enabled cyber resilience solutions that enable our customers to thrive. ❖ In FY 2021, our improved prof
Slide 20: Towards a complete provider of cyber resilience solutions
Towards a complete provider of cyber resilience solutions Customer Current Stages of cyber challenges and Solutions breadth of FY2021 successes FY2022 objectives lifecycle demands portfolio • 2.5% increase in • Develop expertise practice hubs across our Professional global professional services deli
Slide 21: Assurance
Assurance Unlocking value for customers …underpinned by leading Improve going to market… …with a comprehensive portfolio… research and global resourcing • Deepen relationships with our customer Grow the Professional Services we Research focused on offensive AI, base, which includes 69 Fortune 500 ar
Slide 22: Software Resilience
Software Resilience Foundations in place for future growth Regulatory focus on …with successful new offerings… … via an enhanced global footprint operational resilience… • Intensified regulatory • Continued innovation in cloud- • IPM acquisition offers global requirements to manage third delivered s
Slide 23: Summary & outlook
Summary & outlook Adam Palser CEO
Slide 24: Summary and Outlook
Summary and Outlook Poised for growth Summary ❖ Covid-19, supply-chain shocks and rampant ransomware attacks have reminded us all of the importance of resilience ❖ Strong trading performance and another year of excellent cash management ❖ Successful acquisition of IPM with strategic and financial im
Slide 25: Q&A
| : - necgroup” Q&A
Slide 26: Appendices
| : - necgroup” Appendices | hoa
Slide 27: Notations – from each page
Notations – from each page Page 3 1. Following the adoption of IFRS 16 ‘Leases’ with effect from 1 June 2019, the Group results are now presented under this accounting standard. Comparator information is also on the same basis. See Note 3 in RNS for an explanation of Alternative Performance Measures
Slide 28: Our Research
Our Research At the fore-front of the cyber security industry through cost-effective research. Our 2020 Annual Research Report can be found at https://research.nccgroup.com/2021/01/31/2020-annual-research-report/. Notable work in FY2021 includes: Conference talks (incl. panels) Whitepapers Tools Blo
Slide 29: Disclaimer
Disclaimer This presentation, including a hard copy of these slides, the talks given by the presenters, the information communicated during any delivery of the presentation and any question and answer session and any document or material distributed at or in connection with the presentation (togethe