Mastek Limited · NSE:MASTEK
Mastek — Investor Presentation (March 2019)
20 slides from Mastek's investor presentation, March 2019
Slide 1: Mastek: UK Central Government opportunity
Mastek: UK Central Government opportunity TechMarketView analysis – March 2019 TechMarketView: Mastek in Central Government March 2019 www.techmarketview.com © 2019 TechMarketView LLP
Slide 2: TechMarketView credentials
TechMarketView credentials TechMarketView: Mastek in Central Government March 2019 www.techmarketview.com © 2019 TechMarketView LLP 1
Slide 3: About me: Georgina O’Toole
About me: Georgina O’Toole • TechMarketView’s Chief Analyst since May 2018. • Focus on the UK public sector tech market since 2003: 16 years of insight • Launched PublicSectorViews in 2010: TechMarketView’s first specialist research stream • Previously launched and ran PublicSector@Ovum: responsible
Slide 4: Defining Central Government SITS
Defining Central Government SITS SITS: EXTERNAL spend on Software & IT Services UK public sector SITS market includes software, application services, infrastructure services and ICT-enabled business Police Defence process services 4% 15% Central UK central government SITS Health £11.5b 41% 15% Softw
Slide 5: Complex environment
Complex environment TechMarketView: Mastek in Central Government March 2019 www.techmarketview.com © 2019 TechMarketView LLP 4
Slide 6: Opportunity or threat?
Opportunity or threat? Burning Platform? Rabbit in headlights? Reality: A diverse reaction Acceleration in digital Risk aversion kicks in – Impacts organisations and transformation projects – caution due to difficult sectors in different ways only way to go! operating environment TechMarketView: Mas
Slide 7: Slow growth market…
Slow growth market… • Central government SITS: c£5b market UK Central Government SITS Market Size & Growth • In decline since 2015: consistently 5,100 3% underperforming rest of PS 5,000 2.3% 2% • 2017 a particularly bad year: 3.0% 1.8% 1% decline – down £143m 4,900 0.4% 0% • Dragged down by legacy
Slide 8: Central government: the policies
Central government: the policies So far: • Contract disaggregation ICT & digital at heart • Insourcing agenda of Government • Support for SMEs/new entrants transformation strategy • Promotion of procurement frameworks • Digital by default • Cloud First approach • Government-as-a-Platform • Common Te
Slide 9: Key Whitehall challenges
Key Whitehall* challenges * British civil service & government (central government) • Push-pull scenario: • Need to invest/innovate to attain increased efficiency & productivity, fighting against… • Need to control budgets in the short-term • Struggling with digital skills shortage. Hamstrung by pub
Slide 10: Central government: the opportunity
Central government: the opportunity Demand Drivers Suppliers who will benefit Strong demand in the ‘new’ (digital, platform, cyber) Those not dragged down by ITO legacy contract run off Digital skills shortage & insourcing challenges Large & small - particularly those willing to work in a collaborat
Slide 11: UK market: strong demand in the ‘new’
UK market*: strong demand in the ‘new’ * Public Sector 25% of UK software and IT services market Sales 2017 SITS ‘New’ Digital, £5.7b, 12% • Digital: advisory, design, SITS ‘New’ Platform, £3.9b, 8% Software NEW implementation, Products Infrastructure integration, run 23% Services 22% SITS ‘New’ Cyb
Slide 12: ‘New’ ICT driving the UK market
‘New’ ICT driving the UK market * Public Sector 25% of UK software and IT services market ‘SIMPLE’ Digital ‘COMPLEX’ Digital 35% 32.7% 31.2% 29.8% 29.0% 30% 27.5% 25.7% 25% 20% 2017 15% Legacy: -4.7%, -£1.8b 10% 4.2% 5.2% 5.6% New: +29.8%, +2.5b 5% 1.9% 1.6% 1.7% 0% -5% -2.9% -4.7% -6.2% -10% -7.7%
Slide 13: Digital marketplace: growth in the ‘new’
Digital marketplace: growth in the ‘new’ Digital Marketplace helps public sector organisations find cloud technology and specialist services for digital projects via 3 frameworks: 1. G-Cloud (since 2012): cloud services including IaaS, SaaS and PaaS 2. Digital Outcomes & Specialists (DOS)/Digital Se
Slide 14: Digital Marketplace growth
Digital Marketplace growth • Digital marketplace Digital Marketplace Sales: Central Government sales continue 1,600 1,491 70% to grow year on 1,400 61% year (£5b total) 60% 1,200 55% 1,055 • Central 50% government 1,000 41% 40% 84% of sales in 761 39% 800 30% 2018 600 491 • Represented 305 20% 400 3
Slide 15: Dominant SIs suffering in Whitehall
Dominant SIs suffering in Whitehall CENTRAL Company FY17 FY16 Change FY16 Position Change 1 Atos 586 602 -2.7% 2 +1 2 Capgemini 499 648 -23.0% 1 -1 3 Fujitsu 423 425 -0.5% 3 = 4 DXC 320 400 -20.0% 4 = 5 Capita 314 327 -4.0% 6 +1 5 IBM 314 353 -11.0% 5 = 7 Sopra Steria 252 256 -1.5% 7 = 8 CGI 160 169
Slide 16: Mid-size players (and smaller) thriving
Mid-size players (and smaller) thriving Ranked 11-20 • Accenture (#11): +22% • BAE Systems (#12): +32% • Deloitte (#14): +10% • Serco (#20): +25% Ranked 21-30 • Civica (#21): +56% • BJSS (#22): +100% • NTT DATA (#24): +23% • Advanced (#26): +1300% Ranked >30 • CACI (#31): +14% • Mastek (#41): +33% T
Slide 17: Mastek’s winning formula
Mastek’s winning formula Successful on Government Ability to leverage Not reliant on large UK HQ’ed but with frameworks (12th on Digital IndigoBlue acquisition ICT outsourcing access to offshore Marketplace in 2018, 8th for consultancy led contracts digital skills on DOS) sales Adept at working in R
Slide 18: UK Government: attractive client?
UK Government: attractive client? • Financial challenges intensifying: must act • Brexit potential to drive digital investment • Citizens demanding online public services • Looking to expand supplier base • Supplier code of conduct/prompt payment: fair treatment • Frameworks simplify procurement pro
Slide 19: What more is Mastek doing?
What more is Mastek doing? • Investing further in raising profile • Penetrating more new logos (sale & marketing) • Increasing its consultancy strength for a sharper front end • Ensuring ability to scale up for new opportunities • Expanding & maturing partner relationships • Deepening agile developm
Slide 20: www.techmarketview.com
19 TechMarketView: Mastek in Central Government March 2019 www.techmarketview.com © 2019 TechMarketView LLP 19