Kainos Group Plc · LSE:KNOS
Kainos — H1 2022 Earnings Presentation
21 slides from Kainos's earnings presentation, Nov 15, 2021
Slide 1: Interim Results
Interim Results 6 months ended 30th September 2021 Brendan Mooney (CEO) and Richard McCann (CFO) 15 November 2021
Slide 2: Highlights
Highlights Continued business momentum, with increasing opportunities Very strong performance with growing market opportunities REVENUE(1) +33% • Revenue, bookings and backlog showing very strong growth • Strong profit growth, but some constraint with ‘return to normal’ £142m ADJUSTED PROFIT(2) +12%
Slide 3: Group Overview
Group Overview Long-term, strong revenue growth trends in both Digital Services and our Workday Practice DIGITAL SERVICES WORKDAY PRACTICE £162m £73m £117m £123m £56m £69m £75m £34m £22m £15m FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 • The full lifecycle development and support of • We are o
Slide 4: Financial Summary
Financial Summary An established track record of high growth, high margin performance Remain on track to deliver our twelfth consecutive year of revenue and REVENUE adjusted pre-tax profit growth £240m H1 Revenue H2 Revenue Five-year (2017-2021) revenue CAGR of 30% £180m £128m £92m £120m Increased R
Slide 5: Our People
Our People We continue to build an exceptionally talented and engaged workforce PEOPLE +41% COMMENTARY GLOBAL LOCATIONS 2,438 Maintained our strong employee engagement • Retention remains high, 89% (H1 21: 92%) 406 257 With people based in 21 countries, we GROWTH TREND Increased presence in all regi
Slide 6: Our Customers
Our Customers Delivering value to our clients drives long-term relationships £250m REVENUE BY CUSTOMER TYPE CUSTOMER RETENTION Recurring Customers £35m New client acquisition unlocks £200m Repeat Customers New Customers multi-year revenue streams. £35m £24m Revenue from clients acquired pre-2015 £15
Slide 7: Business Balance
Business Balance We have made excellent progress in building balance into our revenue streams GROUP REVENUES BY SECTOR GROUP INTERNATIONAL REVENUES (5) Public Sector Rest of World Commercial Sector £48m Central Europe Healthcare sector North America £20m £23m £21m £81m £31m £13m £63m £17m £40m £15m
Slide 8: Our Responsibilities
Our Responsibilities Being responsible towards our people, our customers, our communities and our planet OUR GOALS OUR PROGRESS Reducing our climate impact and Carbon Neutral in 2021, offsetting full Scope 1,2 & 3 emissions helping others achieve their low • On track to achieve Carbon Net Zero by 20
Slide 9: Divisional Performance
Divisional Performance
Slide 10: Digital Services
Digital Services Exceptional sales execution driving very strong revenue and backlog growth REVENUE +32% COMMENTARY MARKET SIZE Very strong performance across all key metrics • Remote delivery is now the established model £1,753m £162m UK PUBLIC SECTOR 2021 SPEND(7) £117m £123m Public sector clients
Slide 11: Digital Services: Customer Stories
Digital Services: Customer Stories We have established a clear reputation for delivering value, at scale and at pace HM LAND REGISTRY CUSTOMERS Artificial Intelligence Automation reduces review document comparison time by 50% 20,000 applications per Intelligent automation detects day 100% of differe
Slide 12: Workday Services
Workday Services We are one of the most experienced partners in the Workday ecosystem REVENUE +41% COMMENTARY ADDRESSABLE MARKET Very strong performance across all key metrics • A high-growth market as Workday Inc remains on track £751m £49m to achieve $10b revenue by 2026 (from c$5.1b, 2022) 2022 G
Slide 13: Smart Product Suite for Workday
Smart Product Suite for Workday Innovative products that complement Workday’s core platform REVENUE(9) +22% COMMENTARY ADDRESSABLE MARKET Very strong performance across all key metrics • Annual Recurring Revenue up 37% to £28m (H1 21: £20m) £384m £24m 2021ESTIMATED GLOBAL WORKDAY £11m £19m £14m Smar
Slide 14: Workday Practice: Customer Stories
Workday Practice: Customer Stories We are trusted by our customers to launch, test, expand and safeguard their Workday system TELSTRA CUSTOMERS Australia’s largest 35,000+ people, HQ Smart Test telecoms provider in Melbourne SHOPIFY Global e-commerce 1,500 people, HQ in AMS for Recruitment company C
Slide 15: Financial Performance
Financial Performance
Slide 16: Group Income Statement
Group Income Statement Digital Services: INCOME STATEMENT • Revenue growth varies by sector HY • Public: +9% £m H1 22 H1 21 FY 21 Change • Commercial: +80% Revenue 142.3 107.2 234.7 +33% • Healthcare: +77% Gross profit 67.4 55.9 118.3 +21% • Gross Margin decreased by 7% Direct expenses (28.0) (19.4)
Slide 17: Underlying Performance assessment
Underlying Performance assessment Significant gains achieved vs pre-Covid-19 environment Comparison with last “normal” H1: INCOME STATEMENT • Revenue growth 64% HY • Gross margin growth 67% £m H1 22 H1 20 Change • Significant salary inflation Revenue 142.3 86.9 +64% • Reduced travel costs Gross prof
Slide 18: Balance Sheet and Cashflow
Balance Sheet and Cashflow Balance Sheet: BALANCE SHEET • Goodwill and intangibles As at 30 September (£m) H1 22 H1 21 • Cloudator and UNE acquisitions - £10.8m Fixed assets and investments 17.3 14.6 Goodwill and intangible assets 17.0 6.9 • Trade receivables/WIP - 73 days (H1 21: 58 days) Receivabl
Slide 19: Looking Ahead
Looking Ahead
Slide 20: Summary and Outlook
Summary and Outlook We have a strong position in fast-growing, international markets UK UK UK INTERNATIONAL DIGITAL SERVICES PUBLIC COMMERCIAL HEALTHCARE EXPANSION SECTOR SECTOR SECTOR NORTH WORKDAY INC SMART CLIENT INTERNATIONAL WORKDAY SERVICES GROWTH CONVERSION EXPANSION AMERICAN GROWTH SMART TES
Slide 21: 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