Slide 1: Interim Results
Interim Results 6 months ended 30 September 2016 28/11/2016
Slide 2: First half highlights
First half highlights H1 2017 results ‘in line’ with market expectations REVENUE Increased revenue, increased profitability, investment in sales and marketing, doubling of investment in R&D • R&D investment of £2.2m in H1 2017, expensed to P&L £40.6m Improved balance in overall revenue mix • Commerc
Slide 3: Group Summary
Group Summary Kainos is a high growth, high-margin company providing REVENUE digital services and digital platforms £80m • Digital Services – building and configuring online H2 Revenue H1 Revenue platforms for government and commercial customers £60m £39m • Digital Platforms – specialised platforms
Slide 4: Group Overview
Group Overview digital services £60m Services • Online digital platforms for commercial and government £40m clients £20m • Workday SaaS HR platform for enterprise customers £0m FY12 FY13 FY14 FY15 FY16 digital platforms (1) Platforms £15m • Evolve EMR: Digitised patient records £10m • Evolve IC: Int
Slide 5: People
People We continue to build an exceptionally talented and STAFF NUMBERS 967 engaged workforce • Number of people employed increased by 23% to 967 • Increased activity and investment in development and GROWTH OF 23% well being – Engagement remains high, attrition well below APPLICANTS 4,494 industry
Slide 6: Customers
Customers Recurring customer relationships driving revenue H1 SECTORAL REVENUE growth in government and commercial sectors • Commercial is now the fastest growing segment, with Healthcare revenue increasing by 36% to £11.1m (H1 2016: £8.1m) 18% Commercial Government • 93% of revenue derived from exi
Slide 7: Digital Services
Digital Services 28/11/2016 7
Slide 8: Digital Services Market Summary
Digital Services Market Summary Digital Transformation Workday Implementation UK Central and Regional UK and International; Market Govt; Commercial sectors Commercial sectors Sales Model Direct Primarily Direct Market Size (est) FY16: £470m, 25% growth pa FY16: £95m, 30% growth pa Competitors Commer
Slide 9: Digital Services Performance
Digital Services Performance Strong demand across customer base, improved REVENUE £31.2m operating margins and increased backlog • Commercial sector delivering strong growth, up 26% to £9.2m (H1 2016: £7.3m) Government sector showing continued growth, with GROWTH OF 13% • revenues up 9% to £22.1m (H
Slide 10: Workday Case Study: easyJet
Workday Case Study: easyJet Vicent Libsig, IT Systems & Services Manager, easyJet “With Kainos we found a partner who delivered a very well designed, simple and efficient solution to a complex business problem. The solution provides us with the flexibility to support the continued growth of the Easy
Slide 11: Digital Services Case Study: DVSA MOT
Digital Services Case Study: DVSA MOT GDS Review, May 2016 “As reviewers, we conclude that this is one of the best agile projects we have seen in flight in government to-date, and can be seen as an exemplar of the benefits of working collaboratively in an agile way.” 22,834 garages 80,000 £1bn+ user
Slide 12: Digital Platforms
Digital Platforms 28/11/2016 12
Slide 13: Digital Platforms Overview
Digital Platforms Overview Platform revenues increased by 12% to £7.5m, now REVENUE TREND(1) (1) 19% of total Group revenue (H1 2016: £6.7m) £16m • Complements Digital Services, providing long-term £2.4m Smart revenue visibility, with backlog at £28.1m(2) £12m Evolve • Enhanced visibility of revenue
Slide 14: Digital Platforms Market Summary
Digital Platforms Market Summary Evolve Electronic Evolve Smart for Workday Medical Record Integrated Care Market NHS NHS & International International Sales Model Primarily Direct Direct / Partners Primarily Direct Market Size (est) To FY22: £230m To FY22: £395m FY16: £150m, 30% Manual testing, Com
Slide 15: Digital Platforms: Evolve EMR
Digital Platforms: Evolve EMR Stable revenues and margins in constrained NHS market REVENUE (1) £5.6m • Sales performance reflects overall market constraint – Sales at £2.5m (H1 2016: £7.3m), however H1 2016 performance enhanced by a single contract, worth in excess of £6.0m • Contracted backlog dec
Slide 16: Digital Platforms: Evolve Integrated Care
Digital Platforms: Evolve Integrated Care Flagship contracts ($4.7m) signed with global REVENUE £0.1m customers in advance of SaaS platform availability • Contracts signed with Cirdan (UK), In Touch Health (USA) and Hygeia (USA), all private healthcare organisations • Contract backlog established: £
Slide 17: Digital Platforms: Smart for Workday
Digital Platforms: Smart for Workday Expanding roster of blue-chip international clients, REVENUE £1.9m increasing deal size, and strong sales pipeline • Annual Contract Value (ACV) increased to £0.5m (H1 2016: £0.4m) • Contracted backlog up 85% to £6.0m (H1 2016: £3.3m) GROWTH OF 114% from a custom
Slide 18: Smart for Workday Case Study: Magellan Health
Smart for Workday Case Study: Magellan Health Magellan Health Background: 7,000 $4.5-billion-dollar company Operating across employees headquartered out of 49 states Scottsdale, Arizona Operational and cost savings 60% The number of people involved with testing during a Workday update reduction wind
Slide 19: Evolve EMR Case Study: South East Coast Ambulance Service NHS Foundation Trust
Evolve EMR Case Study: South East Coast Ambulance Service NHS Foundation Trust Mark Chivers, Head of IT South East Coast Ambulance Service 33 NHS Customer Trusts “What impressed us about Kainos was their detailed across the UK including: understanding of our market and the specific needs of the ambu
Slide 20: Financial Performance
Financial Performance 28/11/2016 20
Slide 21: Financials: Income Statement
Financials: Income Statement COMMENTARY INCOME STATEMENT • Revenue: £m FY 2016 H1 2016 H1 2017 CHANGE – Digital Services growth: 13% Digital Services 55.1 27.6 31.2 13% – Digital Platform growth ex 3rd party: 12% Digital Platforms 21.5 9.7 9.4 (3%) – Top 10 customer concentration: 54% (H1 2016: 51%)
Slide 22: Financials: Balance Sheet and Cash Flow
Financials: Balance Sheet and Cash Flow COMMENTARY BALANCE SHEET • Balance Sheet: As at 30 September (£m) H1 2016 H1 2017 – Limited fixed assets; IT, office equipment Fixed assets and investments 2.0 2.2 – Underlying trade debtors/WIP total 75 days Debtors and WIP 18.3 20.4 (FY 2016: 62 days) Other
Slide 23: Looking ahead
Looking ahead 28/11/2016 23
Slide 24: Looking ahead
Looking ahead £40.6m Increased revenue, increased profitability, increased H1 REVENUE sales investment, increased R&D investment • Delivering results in line with market expectations Digital Services: expansion into adjacent areas while £7.0m building on existing customer relationships H1 PROFIT(1)
Slide 25: Appendix
Appendix Full reconciliation between the previous and current segmental reporting 28/11/2016 25
Slide 26: Divisional Reporting Change
Divisional Reporting Change A full reconciliation between the previous and current segmental reporting is provided below: Impact of change on interim periods Previous Segmental Digital Workday Workday Work- New Segmental Digital Workday Services Workday Platform 6 months to Services Evolve Smart Ser
Slide 27: Divisional Reporting Change (cont.)
Divisional Reporting Change (cont.) Impact of change on financial years Previous Segmental Digital Workday Workday Work- New Segmental Digital Workday Workday Services Evolve Smart Services Smart Consolidated Services Services Services Evolve Smart Platform Consolidated 2016 £’000 £’000 £’000 £’000
Slide 28: Divisional Reporting Change (cont.)
Divisional Reporting Change (cont.) Impact of change on financial years Previous Segmental Digital Workday Workday Work- New Segmental Digital Workday Workday Services Evolve Smart Services Smart Consolidated Services Services Services Evolve Smart Platform Consolidated 2014 £’000 £’000 £’000 £’000
Slide 29: 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