Ncc Group Plc · LSE:NCC
Ncc — FY2023 Earnings Presentation
27 slides from Ncc's earnings presentation, Sep 27, 2023
Slide 1: Full year results
Full year results 12 months to 31 May 2023 27 September 2023
Slide 2: Overview
Overview Mike Maddison CEO
Slide 3: Agenda for today
Agenda for today • Executive highlights • Financial review • Strategy update • Summary and outlook • Your questions answered
Slide 4: Executive highlights
Executive highlights Revenue Significant progress implementing our Next Chapter strategy £335.1m in a challenging environment +6.4% +1.5% at constant currency • Market dynamics reinforced the need to implement the Next Chapter strategy • FY23 revenue and profit impacted by buying decision delays and
Slide 5: A market leader built on strong foundations
A market leader built on strong foundations Two distinct Capability and A strong track record Dynamic market businesses people Working with the Increasingly Passionate about our world’s leading complex ecosystems, purpose, market Cyber Security and companies, strong constantly evolving leaders and c
Slide 6: Financial review
Financial review Guy Ellis CFO
Slide 7: Financial highlights
Financial highlights Revenue Gross Margin % Adjusted EBIT (Margin) £335.1m 39.4% £28.8m (8.6%) FY22: £314.8m +6.4% FY22: 42.1% (2.7%) ppts FY22: £48.1m (40.1%) (6.7%) ppts (15.3%) Adjusted EBITDA Cash Conversion Ratio Net Debt £41.4m 102.9% £49.6m FY22: £59.2m (30.0%) FY22: 101.9% +1.0% ppts FY22: £
Slide 8: Group income statement
Group income statement FY 2022 FY 2023 % change • Strong first half for Cyber Security £m £m • H2 slowdown due to delayed buying cycles and project Revenue 314.8 335.1 6.4% cancellations in North America tech sector and UK market Gross profit 132.6 132.0 (0.5%) • Software Resilience sustained growth
Slide 9: Group revenue bridge
Group revenue bridge • Underlying growth (excluding the impacts of FX movements and IPM revenue haircut) flat year on year (+0.1%) • Cyber constant currency growth of 10.8% in H1, pegged back by slowdown (9.9%) in North America and UK in H2 • Software Resilience delivered positive growth in constant
Slide 10: Cyber Security revenue and adjusted EBIT
Cyber Security revenue and adjusted EBIT Revenue by region FY23 regional growth: Revenue by service line Constant Currency Constant Currency • Decline in Professional Services (Technical Assurance) • UK & APAC: +3.0% in H2 compared to historical • North America: (4.9%) trends ((3.1%) FY23) • Europe:
Slide 11: Software Resilience revenue and adjusted EBIT
Software Resilience revenue and adjusted EBIT Revenue by region FY23 regional growth Revenue by service line • New management team focused Constant currency (underlying): Constant currency on creating value as a distinct Underlying revenue Underlying revenue business sustaining growth • UK: +1.2% •
Slide 12: Net debt reduced by £2.8m
Net debt reduced by £2.8m • Cash conversion improved year-on-year +1.0 pts • Balance sheet strength with new four-year enlarged multi-currency RCF of £162.5m with additional £75m uncommitted accordion option to enable new strategy • Interest increases due to IPM acquisition and the macro conditions
Slide 13: FY24 financial framework
FY24 financial framework Sustainable Improved Balance sheet Efficient cost base revenue growth gross margin resilience Returning Cyber Security Improved utilisation % Delivering c.£5m Strong cash conversion to growth in H2 efficiencies in Globalised technical Cyber Security in FY24 Reducing Debt Acc
Slide 14: Driving focus on our Next Chapter strategy
Driving focus on our Next Chapter strategy Cyber Security - KPIs Beyond the financial metrics that we report, we are also revising the strategic • Headcount metrics that we track to ensure greater • Number of clients >£0.25m alignment with the Next Chapter strategy • Number of long-term (>3 years) c
Slide 15: Summary
Summary
Slide 16: Strategy update
Strategy update Mike Maddison CEO
Slide 17: Making our business more global, agile and client-focused
Making our business more global, agile and client-focused Our businesses Our strategy Our ambition Cyber Security Our clients Medium term: Protecting companies Deeper client engagement on the most against an evolving pressing cyber security needs Cyber Security spectrum of cyber threats • Mid-teens
Slide 18: Clients at the heart of what we do
Clients at the heart of what we do Our clients Our capabilities Global delivery Differentiated brands What we said we would do: What we have done: • Focus on the fastest growing sectors • Aligned UK market verticals to focus on key sectors • Property portfolio aligned to support our clients and • In
Slide 19: End-to-end cyber security services to address growing client needs
End-to-end cyber security services to address growing client needs Our clients Our capabilities Global delivery Differentiated brands What we said we would do: What we have done: In our Cyber Security business: • Invested in cyber leadership with recognised deep • Continue to invest in core Technica
Slide 20: An efficient, agile and scalable global delivery model
An efficient, agile and scalable global delivery model Our clients Our capabilities Global delivery Differentiated brands What we said we would do: What we have done: • Implement global resourcing and scheduling • Launched Kantata scheduling system in the US as a precursor to a global rollout • Set
Slide 21: Saira Acuna Country Manager
As the former leader of our Sales Operations and Client Experience team in the APAC region, I’m delighted to be leading our new global delivery and operations centre in Manila. It’s a blueprint for the future that is both colleague and client centric, while being considerate to the environment and o
Slide 22: Creating distinct and relevant brands
Creating distinct and relevant brands Our clients Our capabilities Global delivery Differentiated brands What we said we would do: What we have done: Develop differentiated, stand-out brands for Cyber • New distinct brand for our Software Security and Software Resilience Resilience business will rol
Slide 23: Enabling Software Resilience to thrive and grow
Enabling Software Resilience to thrive and grow Our clients Our capabilities Global delivery Differentiated brands What we said we would do: What we have done: • Explore strategic review of Software Resilience • Enacted price uplifts for existing business and new business in adjacent services • Retu
Slide 24: Summary and outlook
Summary and outlook Mike Maddison CEO
Slide 25: We will continue to deliver our Next Chapter strategy
We will continue to deliver our Next Chapter strategy • We’ve delivered foundational components of strategic change with more to come • Current trading in line with expectations • FY24 revenue and adjusted EBIT expectations remain the same • Our ambition over the medium term remains the same: • Cybe
Slide 26: Questions
Questions
Slide 27: 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