Ncc Group Plc · LSE:NCC
Ncc — H1 2022 Earnings Presentation
27 slides from Ncc's earnings presentation, Jan 27, 2022
Slide 1: Half Year Results
Half Year Results Six months to 30 November 2021 27 January 2022
Slide 2: Overview
Overview Adam Palser CEO necgroup~
Slide 3: Executive Highlights
Executive Highlights Revenue 1 ❖ Good Assurance growth at improved gross margin ❖ Growth in all Assurance geographies despite FX headwinds £150.1m ❖ North America grew by 8.9% at constant currency (2.3% actual rates) ❖ Europe grew by 11.8% at constant currency (6.0% actual rates) +14.2% H1 2021: £13
Slide 4: Investing in people & capability – technical experts grow by 12%
Investing in people & capability – technical experts grow by 12% • We have more capacity than ever, with a net increase in technical heads of +152 (+12%) since May-21 • 65 Junior Security Consultants joined our UK/APAC Next Generation Talent programme • Welcomed colleagues from non-traditional cyber
Slide 5: Our markets continue to offer excellent growth prospects
Our markets continue to offer excellent growth prospects ❖ We see four enduring drivers of growth: Growth of the Increased dependence on Relentless increase in Changing threat landscape connected environment connected environment legislation and regulation • Accelerating because of • By individuals,
Slide 6: Operational KPIs
Operational KPIs Delivering our growth strategy Accelerating our future growth engines HY22 HY21 Growth Drivers ❖ Escrow-as-a-Service grew 54% YoY in H1 EaaS Orders (£k) 1,231 798 ❖ Combined Remediation and Sentinel sales of £5.5m for H1 2022, a Remediation Sales (£k) 3,647 - 37-fold increase YoY Se
Slide 7: Financial Review
Financial Review Tim Kowalski CFO
Slide 8: Statutory financial summary
Statutory financial summary Revenue Gross Profit Gross Margin % £150.1m £63.7m 42.4% +10.7% H1 2021: £135.6m +17.1% H1 2021: £54.4m +2.3 ppts H1 2021: 40.1% Adjusted EBIT 1 Adjusted EBIT Margin % Adjusted EBITDA 2 £20.2m 13.5% £26.1m +10.4% H1 2021: £18.3m - ppts H1 2021: 13.5% +2.8% H1 2021: £25.4m
Slide 9: Impact of accounting changes on year-on-year comparability
Impact of accounting changes on year-on-year comparability For comparative purposes, these results (prepared in line with IFRS) require consideration of the following which are explained in full in the following slides: ❖ Adoption of the IFRIC agenda decision on cloud configuration and customisation
Slide 10: Financial performance – Group income statement
Financial performance – Group income statement Strong growth at improved gross margin Revenue: Continued Assurance momentum and IPM ❖ Year-on-Year revenue for the Group grew +14.2% at constant currency (+10.7% actual rates): H1 2022 H1 2021 • Assurance growth of +8.8% at constant currency to % chang
Slide 11: Assurance financial performance
Assurance financial performance Reaping the benefits of a global model Revenue: Continued revenue momentum ❖ Assurance grew +8.8% at constant currency basis to £123.2m Revenue by region (Constant Currency) H1 2021 H1 2022 (+5.2% actual rates) 7.5% £ growth ❖ Performance across territories £54.6m 8.9
Slide 12: Assurance service line performance
Assurance service line performance Strong revenue growth for all service lines Revenue by service line (£m) Global Professional Services (GPS) +8.2% YoY (at constant currency) ❖ Remediation sales in all regions totalling £3.6m in HY22 (£Nil in HY21) ❖ 73% increase to global resourcing days has provi
Slide 13: Software Resilience financial performance
Software Resilience financial performance Transformed by IPM acquisition Revenue: Transformed by IPM acquisition Revenue by region (Constant Currency) H1 2021 (£m) H1 2022 (£m) ❖ SR Group Revenue grew at constant currency by +47.8% to £26.9m including the addition of IPM 12.8 12.2 9.3 ❖ Revenue excl
Slide 14: Financial performance - Cash
Financial performance - Cash Strong cash generation continues H1 2022 H1 2021 Net (debt)/cash: Cash conversion improved to 99% (£m) (£m) ❖ Net debt increase of £77.2m with net debt of £74.2m in H1 2022 vs Cash flow before working capital 25.4 24.1 net cash of £3.0m in H1 2021 Movement in working cap
Slide 15: Looking forward
Looking forward Adam Palser CEO
Slide 16: Focus on growth
Focus on growth Taking advantage of the dynamic resilience market Our vision is to be the leading global cyber and software resilience provider. Trusted and sought after for our complete people-led, technology- enabled cyber resilience solutions that enable our customers to thrive. ❖ In FY 2022, we
Slide 17: Towards a complete provider of resilience solutions
Towards a complete provider of resilience solutions Customer Current Stages of cyber challenges and Solutions breadth of HY2022 successes FY2022 objectives lifecycle demands portfolio • Develop expertise practice hubs across our global professional • +8.2% increase in Professional Find and understan
Slide 18: Summary and outlook
Summary and outlook Adam Palser CEO
Slide 19: Summary and outlook
Summary and outlook Positive momentum to continue Summary ❖ H2 2022 trading to date is currently in line with expectations following sales order momentum in December and January, with Software Resilience returning to revenue growth compared to H2 2021. ❖ The balance of H2 2022 requires further reven
Slide 20: Q&A
| : - necgroup” Q&A
Slide 21: Appendices
| : - necgroup” Appendices | hoa
Slide 22: Notations
Notations Page 3 1. All financial performance numbers presented are based on post IFRS-16 unless specifically noted. References to the Group’s results are to continuing operations. See Note 3 of the RNS for an explanation of Alternative Performance Measures (APMs) and adjusting items. Further inform
Slide 23: Income Statement - refer to RNS for notes
Income Statement - refer to RNS for notes H1 2021 H1 2022 (restated) 2 Notes £m £m Revenue 4 150.1 135.6 Cost of sales 4 (86.4) (81.2) Gross profit 4 63.7 54.4 Administrative expenses Depreciation and amortisation (12.8) (11.4) Other administrative expenses (39.9) (29.7) Individually Significant ite
Slide 24: Cashflow Statement - refer to RNS for notes
Cashflow Statement - refer to RNS for notes Notations detailed on page 22 of this presentation
Slide 25: Balance Sheet - refer to RNS for notes
Balance Sheet - refer to RNS for notes Notations detailed on page 22 of this presentation
Slide 26: Our Research
Our Research At the fore-front of the cyber security industry through cost-effective research. Our 2021 Annual Research Report can be found at https://research.nccgroup.com/2022/01/10/2021-annual-research-report/. Notable work in FY2022 includes: Conference Presentations Blog Posts Tools Influence O
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