Elixirr International (LSE:ELIX) — Investor Presentation

0:00 Good afternoon, and welcome to the ELIXIT International PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated on the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question received in the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to make the following poll. And I'd now like to hand you over to Steven Newton, CEO. Good afternoon to you, sir. Thank you, Alexander. Good afternoon, to everyone,

0:32 and thanks for taking the time to attend and, listen to our presentation about our business. And, as as Alexander says, if there are any questions, please type them in. And if we get the chance, we'll have a we'll we'll have a look at them and and see if we can answer them either on the fly or at the end. So, yeah, I'm gonna introduce myself in a minute, but I thought it might be a good idea for Graham to introduce himself first and Caroline then next. And then what I will do is I will introduce myself and follow on with the introductory slides about the company. Thanks, Steve. Graham Busby here, cofounder with Steve and CFO. Alongside the obvious financial responsibilities of being CFO, I lead out on our inorganic strategy. Steve and I have known each other more than fifteen years now. We worked together at Accenture.

1:18 And I guess during the latter part of that time, started talking about starting our own business, and that's what we're here to tell you about today. So looking forward to talking to you.

1:29 Hi, everyone. Caroline Pitt, business manager at ELIXIRR. Joined the firm just over five years ago now. Had a very interesting route through the through the firm. So joined initially in the marketing team, went on to work closely with Steven, and joined the IPO team internally, then the m and a team. And now I continue to work with the leadership team on all strategic areas such as investor relations, new m and a activity, and anything else we're looking to do in the market.

1:59 Thanks, Caroline. Yeah. Just just a little bit about myself. For those of you who didn't catch it in the first few lines I said at the start, I've got a South African accent. I came to London in 1995 for two years. It's been a long two years. I was with KPMG in South Africa, and I came to The UK with them. KPMG obviously ordered a consulting firm, and then I did four or five years with them,

2:23 resigned around the .com bubble to build a startup with six other people, which failed miserably, and I learned lots of good lessons. I also spent a lot of my own money trying to do that. And then went to IBM for another three to five four to five years, give or take, where I was back in the consulting industry in the city traveling around the globe as well. And then tried another startup, which also failed, and then, again, returned to the consulting profession with Accenture, Spent another five years with Accenture, and then finally decided I would do, another startup, which was, what you see in front of you, which is ELIXIA. So, I've always had this itch to try and build a business and in the end decided to build a consulting business having seen in three of the biggest brands, consulting brands in the world what works, what doesn't work, and why, what the potential was to build something unique and challenger as we are trying to be as ELIXIA today. So that's a little bit of my background.

3:24 Maybe it gives you a sense of, who I am. I I could just say one other thing just about me as an individual. I I I stayed in London for two reasons, actually, going back to South Africa. Two reasons. I use the analogy once you've played in the Premier League, it's very hard to play in division three, and that's my business reason. And then personal reason, I wanted to bring my kids up, in a society that saw the world rather than saw that the looked inwardly at its own country, and I felt The UK was the best place for me to give my children that worldly perspective. So those were the two the two reasons I've stayed, and, I thoroughly enjoyed here now and, obviously, had a good time trying building this business, and and we continue to build it. Let me, move on a little bit. For for there's often a lot of misunderstandings about what is consulting and what's the real value of consulting. So for those of you who are aware of some of the jokes about the consulting profession, I thought I'd use an analogy to give you the reason this profession exists and why it's such a big marketplace in the b to b space.

4:29 One of my previous partners once said to me, he was actually a previous client, and and we were discussing how he got value from us as a consulting firm. And he said he used this analogy for me. He said, Steve, it's a bit like I could be the best surgeon in the world. But if I'm involved in a car accident, the the paramedics in the ambulance that arrive are far better at dealing with the circumstance than I could ever be as the best surgeon in the world. And the reason is because you're engrossed in the moment. You're probably, you know, you're obviously emotional if it's an accident, and often there's a lot of business decisions that are are fairly emotional. There's critical events going on. And, obviously, paramedics deal with these situations repeatedly and often three or four times a day. So the advantage of consultants is you you you have you're one step removed from the problem.

5:18 You've dealt with it many times before, and you can bring in a level of, understanding of the situation that that delivers the right behaviors at the right times and and is most appropriate for the circumstances. So we still that's a nice way to give you a sense of what is ELIXTRYNAL do. It's trying to be that for business, you know, be that independent voice of reason when everything is either going extremely well and you might be missing opportunities or things are going extremely bad in business and you're not sure what what's the right path to take. That so so that hopefully, that gives you a good sense of what consulting is about and how we view it and the possibility for us to make a difference. I think a lot of consultants gets get challenged because they they failed to take this position of independent adviser and clarity of thinking in a crisis and guidance in a crisis, etcetera.

6:16 And this is why I think there's such a great opportunity. I think a lot of the consulting firms of today or the historic ones have become almost encumbered by their success. Their history is part of their problem, and and what we're finding is that with a fresh approach and an adherence and a commitment to the principle of making a difference and being a challenger with an entrepreneurial mindset, we are finding a lot of traction in the market. So, hopefully, that gives you a good sense of what we believe to be the value of a of the consulting business. So what is the economic opportunity? I thought the best way to do this was to give you a sense of the scale of this marketplace. It is a very, very big marketplace worldwide. You can see on the right hand side there dominated by 10 of the largest consulting firms in the world. If you are familiar with this world, those names would be almost household names to you. But if you're not, these are very, very big names in the consulting profession.

7:11 And you can see that, you know, the top five firms are top six firms are over 10,000,000,000 in in revenue, and the market size is about $234,000,000,000 of revenue. And it's on the left hand side, you can see how that consulting marketplace is growing over time. So since 2011, and and we were founded in 2009. But, you can see since 2011, it's been 8% market CAGR. And in that same period, ELIX has been growing at around a 30% market CAGR. A few other points to note here is that, you know, if if you look at our 30% growth into this marketplace since 2009, it's really taking market share from the big the top 10 firms. Caroline will talk to you a little bit later about how our competition see us vis a vis our sorry, how our clients see us vis a vis our competition.

8:02 But you you largely, that 30% is actually taking market share off the top 10 names you see on this list. There is a new opportunity that the IPO has presented us, and Graham will talk to you about that in a little bit more detail, and that is the other firm's line of 97,500,000,000 or 42% of the market that you see there. That's a marketplace where we can actually gain market share through acquisition. And we've done four acquisitions since since our IPO, And, I think you'll find Graham's discussion with you around how we're going about that a very interesting and and exciting opportunity to leverage our growth. So that 30% of growth is largely organic, and and, of course, since IPO, we can now add the inorganic opportunity to this. The other point I'd just like to make on this chart before I move to the next is that there's only three publicly listed companies here.

8:57 And if we grow at our 30% CAGR that you see here, which is organic, it'll take us fifteen to sixteen years to become a top 10 consulting firm in the world in revenue terms. And why I've presented to you in that way is to show you the the longevity of opportunity if we continue to make a difference and gain market share. You know, we can continually there's a there's a lot of runway for us to grow into, before we start capping out and and not having enough market to be able to make a difference. So we believe that there is a very, big opportunity. Our objective, you see McKinsey and Company there, fifth on the list. They are the biggest and probably most highly regarded strategy and change consulting firm out there. Our plan, as you will see later, is to take them on and do what Accenture has done. You see Accenture there to IBM, and that leads very nicely into the my next chart, which is a a comparison of ourselves to Accenture since IPO. So clearly, Accenture IPO'd many years ago now back in 1992 or something around then, maybe even '91, '93, somewhere in that range.

10:10 And, obviously, we IPO ed in July 2020. But what we've done is we baselined the IPO date as a date, and you can see Accenture's growth, which is the purple line, over the first twelve months of their listing was essentially flat. They were slightly up 2.2% up over the period, whereas ELIXIA over the same twelve month first twelve month period, we were up, as you can see there, over a 150%, actually around a 160% up. So we think we've outperformed them in the first year. And if you now look at what that looks like relative to this ambition of ours to overtake McKinsey and how Accenture did this to IBM, the first point to note on this chart is that the first the the the little yellow box you see in the left hand by the 2001 is is the first year. It's basically the chart I showed you on the previous page, which is this, that same time period.

11:11 So what you can see you could see what's happened since. Clearly, Accenture was far less than than IBM in market capitalization, and no one thought they would ever take on, IBM. What they have done is is basically eaten IBM's lunch, and I believe Accenture's success story is one of the most underrated, business successes over the well, certainly in in my time in in business. It is a services success story, second to none, and they have, truly given their shareholders an an unbelievable return if the shareholders chose to stick stick with them during the period. Now, of course, this is what we plan to do for, against McKinsey. You might say that's very bold ambitions, but, you know, it it certainly was Accenture's ambition.

11:58 And if they didn't have it, they would not have achieved it. So we have the very same ambition, and we'll show you how we are going about doing, and achieving that target in a few minutes' time. But I think this gives you a good sense of the scale of the runway, the size of the opportunity, the massive market, the growing market, and our opportunity to grow into that space and therefore, obviously, deliver fantastic shareholder returns to all of those who wish to take equity participation in the journey. One other point is it's just a little point here. Accenture took almost till 2007 from its listing in 2001 to achieve its a 150%. We did that in our first eight months, but clearly, we're still actually greater than that now. All markets have taken a haircut in the since the Ukraine crisis, of course.

12:45 And we we're proud to say we haven't taken as much of a beating as everyone else, but no fundamentals in our business have changed. Let me just put it that way. So we we feel fit very, very fairly priced at this point. So if you look at our ambition so let's put an economic number on our ambition. Let's say in the next three to five years, I would like to be a services unicorn. What does a services unicorn mean? It means being a billion dollar market cap company. As of today, we were 291,000,000 market cap. If we grow at 58% compound growth rate, which is actually the CAGR since we IPO ed. And the reason our CAGR since IPO is greater than the pre IPO CAGR of around 30% is, obviously, we've added now the inorganic opportunity into our mix, which if we continue that for the next three years, you know, assuming our, revenue, EBITDA remain the same and our multiplier remains the same, we should achieve our ambition of being a a services unicorn in three years. If we grow at 30% compound annual growth rate, which is the growth rate we've had organically since pre IPO, then we should do that in five years.

14:05 If we take a very conservative view and, you know, assume that we're not gonna get the same kind of growth in the in the recession, so let's say it's 25%, we will do that in six years. We still believe at a very conservative end, a three times opportunity on a pound investor today in six years is a pretty good opportunity. I think it's an even better opportunity at three times return in three years. I still think that's very achievable, and you and you will see the reasons why we think that to be the case in the next few slides yeah. In the next in the rest of this presentation, let's say. How have we done? We've we've given you a very bold objective. We've given you a very well, at least an view of the size of the marketplace, and and and you might say, well, okay.

14:55 How have you done relatively historically and how and and then perhaps the next question is, what's your plans going forward, and how do those things look? So here's a view of, how we've done historically. I said we launched in 2009. Graham and I are sitting in my back garden around the table, you know, and then, deciding to do this.

15:15 And you can see our our revenue growth there with one down year in our entire, thirty twelve years of of, of existence now. So and and that one down year was a very, very important year for us because we actually learned quite a few things. It was at a point in which we were getting to probably five or six big clients, and we had a little bit too much dependency on, one or two of those. And when one or two of those were no longer there, we felt the pain of that, and that you can see in 2016. That made us even more determined to diversify our business across multiple multiple sort of dimensions, let's say. So we've diversified across industry, across geography, and also across capability.

16:04 And I'll talk to you about that a little bit later, but that was a very important lesson in our in our history. But from then, you can see how we've accelerated. And what's nice is since our listing in July 2020, you can see we've added in the gold bay or yellow. We've added inorganic growth as a accelerator to our growth opportunity since IPO. The other thing I'd point out about our IPO, we see ourselves as a challenger. We believe we have the opportunity to steal market share from the big players because they are so incumbent by their history and are unable to behave and act in ways that, clients wanna see from entrepreneurial consulting leaders. And and and I think there's a a very, very good example sitting on this page of of us doing that, and that is the the the listing in July 2020.

16:56 You know, if I those of you who recall, we went into lockdown around March, April time, and, literally, we decided to use that time to get our listing done. And we were probably one of the few listings in the year. In fact, we were the first since, since lockdown. And, you know, we we it gives you an example of the sorts of, the the mindset we have. We know the opportunities there. We was we were we we thought we grabbed the opportunity when the rest of the market was hesitant. We thought it was time to make the move, and I think it's paid back very well for us. And we will continue to do that, but it does give you a a sense of the posture we have towards our the posture we have towards our clients and why we make a difference to our client client's opportunities.

17:45 Here's a a slide that gives you a sense of our nimbleness, but also the opportunity. You know, we were founded, just around the back end of the great recession, and that was a a very much of a a a bear market. And we were founded with a set of skills that Graham and I had initially, and then we hired a bunch of people around us. Efficiency, strategic sourcing, supply chain, procurement. We've added procurement in. That's what you see on the right. So it's a cost reduction and operational efficiency play. We've actually made an acquisition, which Graham will tell you a little bit more about return, which leads positions us very nicely for an environment that is a recessionary environment where businesses need to save money. But equally, you know, we've done very well on the on the revenue and growth side of the business. We're very big in innovation. We've done a lot of m and a advisory. We do it ourselves.

18:33 And one one thing we found exceptionally profitable for our business during, the pandemic actually was the digital transformation story, and then we still have quite a lot of business in that space, to be honest. But, it is obviously something that is very growth minded as opposed to cost reduction. It can be cost reduction, but it's more often seen in the in the growth mindset and, clearly, customer experience. And we've made our acquisitions to try and make sure we have both sides of these markets covered. So we feel like we're getting more and more resilient to the the trends in the marketplace. So, our business is becoming far more resilient, and I'll I'll I'll go into this a little bit more detail when I talk about our strategy on a page.

19:14 Why are we better then? So here's a

19:19 this is a a gift my son gave me when we did the IPO. On the morning, we we woke up to the to being listed. I was in a hotel in London, and my son was actually doing an internship with a firm. And he came and knocked on my door, and he gave me this present as a as a gift to me for for the achievement of IPO ing ELIXIA. But you can see our old logo there, established 2009. And I thought I'd use this watch just to give you a little bit of a history around the the the this the connection of my son to the company and how how passionate we are about this business. But but also the watch has got another analogy and another meaning. If the consulting profession is criticized for anything, it's criticized for things like this. People joke, they'll say, when you hire a consultant, they'll take take your watch from you to tell you the time. Right? And this is a a common, sort of criticism laid laid at the consulting industry that middle managers will bring in consultants merely to say something that the senior management will only take from a consultant as opposed to from a line management person. And and there is some merit in this. I mean, there are behind every joke, there's always a little bit of truth, and and we're not afraid of facing into these criticisms.

20:36 And that's actually what makes us the challenge of consultancy we wanna be. If that is the perception of our industry in a lot of, ways, We face into these things and deliberately try and address them with things like bringing entrepreneurs to the table, people who and and part of part of the the the main value of of doing the IPO actually is to to allow all of our participants as partners to become business owners in the true sense and equity participants, and therefore, to be able to, you know, stand alongside any investors that are actually financial investors and understand the risks and rewards of that position and therefore make the right decisions to maximize that financial opportunity. So this is one of the examples of how we try and overcome these limitations.

21:23 But what I wanted to show you here was a video of our posture to the marketplace, and we're finding that a lot of our clients are really resonating with this message. It doesn't matter that we've never met. I don't even need to know what you do. I'll take a solution I've used a thousand times and change the name to make it seem like it was a framework curated to your needs. I'll take ideas you've already had and make you think I came up with them just by putting them in a 200 slide presentation with figures I pulled right out of my extensive pool of data. And then I'll get you to put me on a retainer so I can keep making you think I've got the perfect solution.

22:12 So are you ready sir. All done. Perfect. Put it on my client's tab. Which one? Whichever one comes up first. Okay. So what you see there is our latest we're not one of it is actually our latest ad campaign, but there's a lot of important messages in there. Things like we don't copy and paste things off the shelf. You know? We we we try and bespoke things for our clients. We do not take this kind of posture that is represented here, but we also show our clients we can actually we actually understand the weaknesses of our industry, and we face directly into them and wish to address them. So this we're finding is is actually resonating really well with our clients, and, they really do like this. And in particular in The US, The US

23:18 is very, very open to a challenger and entrepreneurial brand, and and this is we we're seeing this manifest itself very strongly in our US marketplace. What I'd like to do now is just to give you a little bit more detail on our, our sort of strategy on a page, if you like, and a little bit this should give you a little bit of an understanding as to how we are diversifying and making our business more resilient. So what you can see on the left here is, in the gold, you'll see, all of the core capabilities that we've literally grown with the last twelve years. If you know that we built these things up over the last twelve years, and you can see the geographies that we operate in there, and you can see some of the acquisitions we've made into into those different areas. So we've got cost reduction, strategy innovation, digital, and all the industries we do that in there. So multi industry, multi capability, multi geography all brings diversification in our existing business pre '20 financial year 2022.

24:18 What have we been doing in 2022? As you will have noticed, as we mentioned, Graham will go into a bit more detail, but we have, obviously bought ILAP in, in, the early part of this year, the of March, I think we finalized on that deal, and that's been a very big impact in the business. I've hired two partners into an area, risk and compliance, which is very countercyclical to a a downward industry model a downward economic model, if you like.

24:48 Obviously, we ESG is a very big topic in the space, and we've we've done a team hire of a company called Kick Consulting led by m, who is, now joined us as a partner, and and and we've diversified into this space. Clearly, do m and a for ourselves, and we're turning that capability on doing m and a for our clients, which is very strategic for them and obviously positions us very well. And more recently, I just hired a new partner to get us into the pharmaceutical industry. So you can see the kind of die sort of diversification we're doing across capability, industry, geography, and then there's future potentials. And all of these future potentials, whether it's cyber or Lean Six Sigma or cloud or whatever it is, we'll either organically not organically, we'll either hire. You can see that's higher to fill on these capabilities, or we'll actually do an acquisition. And you'll see the four pillars of our strategy there of of growing this business, stretch, promote, hire, and acquire.

25:45 The three on the left are all organic opportunities, and the one on the right is really the inorganic. I'll leave Graham to talk to you a little bit more detail about that because it tees up the whole acquisition. And I see that Sam has asked a question about any further acquisitions. Graham will obviously address some of those for you, Sam, when we we get to that section of the presentation. So we will also you made a a point here. Let me address this point about The US. How how important is The US growth? The US is a very, strategic part of our agenda right now. Just very quickly, just to explain that the the the American market is twice the size of any other consulting market worldwide. The second biggest consulting market, you guessed it, is Europe. But America is twice the size of the European market, and then you get into Australia and the Asian markets.

26:35 And, you know, of course, if we wanna be a global player, you have to be in The States. So very clearly, we set our sights on growing into The US, and The US is now about 50% of our turnover. So in about two or three years with the acquisition of ILAP, we have The US is at about 50% of our turnover. And going into next year, sixty sixty so percent we think will be, in The US. So it's a very important part of our growth strategy, and I've got a fantastic US leader out there, and our firm is growing very nicely out there. So, hopefully, that gives you, Sam, a little bit of an answer to your question. And before I go to this, let me just quickly this is a a a presentation that a video from one of my senior partners who's been working with a client on operational efficiency and cost reduction, and, it gives you a little bit of a sense of the broader team skills, but also the type of work we do in our clients. So let's play this video.

27:30 When I really started my career, we were in, difficult economic times. And and really for the first ten years of of my consulting career, I was doing this kind of transformational work. I was doing this type of operating model change work. And I really see that that happening again, as we look to the next, several years. And frankly, ELIXIR set up perfectly to take that on. A lot of us, have that background. We have the experience to really guide executives who who maybe haven't been through this type of, this type of environment and guide them safely through it. One of the main reasons that this brand came to us was it's one of the most iconic luxury brands in the world and their reputation means everything. And they work with suppliers, and suppliers of suppliers around the world and all it would take is one supplier to do something, that would, whether it's, you know, child labor or pollution or whatever it might be, if one of their suppliers did something like that, it could really charge their brand.

28:32 Now, that was a real challenge because in the past, really, the the the different lines of business and the different brands around the world had a lot of freedom to do whatever they want, contract with whomever they wanted to, and that was good. It kept business moving fast. It it kept the standard high in terms of what was really right for each each, you know, line of business, each local region. So one of the things we had to do is help them put in a framework that was going to provide, you know, more assurance around managing that supplier risk, but also not so constrictive that it slowed the business down. We wanted to keep speed, in the operating model so they could continue to behave in the way that they do and work with the speed that they do, but within a framework that would help manage the risk, and protect the brand ultimately. As a federated brand with people around the world being able to kind of behave any way they wanted to in the past, coming up with a centrally run program was culturally very different for them. So one of the things that we had to help them do was figure out how to find the right engagement model with the regions to to actually do that. What this brand asked us to do is to come in and really help them set up that engagement model, do some executive level education, help them understand why they needed to do things differently, and then help create new patterns of behavior, across the executive team to to actually operate in a new way. What that led to was us putting together a change playbook,

30:03 which we developed and rolled out to the regions for this particular program. But it's also something that I'm presenting to the group CFO next week to actually see how can we use that playbook not on just on this program, not just in finance, but across the business overall. One of the things that's really important about this work is this kind of need to transform and drive, efficiency across the business and and really make it cost effective. We're seeing it really in in every sector, really in in every geography. So this is, for me, just an example of the type of work that we're going to be doing in 2023 and 2024. What business leaders realize at this point is you can only get so much out of just cost cutting. At some point, you have to really make structural changes, and that's exactly why transformational work that really goes to the the the heart, the core of how you operate, the core of how you're organized, is is going to be super relevant in the next few years. This is not a choice. Companies are going to have to transform their businesses to be able to operate, in a more difficult economic environment.

31:15 Okay. So, that's that's Brandon talking a little bit about a client he's working with and the opportunity for us to work with clients transforming. What I think I'll do now is hand over to Caroline who will give you a bit of an understanding about why we think we're better and also talk a little bit about our branding and and market positioning. Thanks, Steve. So, obviously, to be the best consulting firm in the world, that's our overarching ambition. You know, we need to make sure that the market believe that to be true, and and our clients at the moment believe that to be true. So before our IPO, we conducted an external survey to ask them exactly what they thought of us, exactly what they thought of our work, and even who they compared us against in the market. So the first question was, who do you compare us against to our in our competitors?

32:03 This is an open question, but the overwhelming response was McKinsey, Bain, Boston, the MBBs of the consulting world. So we outperformed our competition in almost every area of the survey. So this covered the approach that we take to work. It covered the quality of our teams, both junior and and senior level teams, and the value that we added to the client, at the end of the project. We did come on par or just below, our competitors in a few areas just at the bottom of the, the chart on the left there. So marketing, international capabilities, technical capabilities, and company reputation. Now this is a few years ago, so it was pre our IPO. And we've actually worked to address all of these areas since the IPO, and the IPO actually fed into improving many of these, just naturally as well.

32:49 So, obviously, we've invested, further in acquisitions, which has contributed hugely to our technical capabilities improving over time. So all of the the two digital businesses and ILAP in March of this year. We've obviously expanded internationally as well, largely in The US with with ILAP, but but also geographically, we've we've accelerated in South Africa and across Europe as well in recent years. And and marketing as well, just obviously naturally, we've always invested in marketing, and I'm gonna touch on that more in a couple of slides time. But, naturally, our profile grew in the market and upon our IPO. So those areas we we've heavily improved on in the last couple of years since the survey was taken. And, obviously, you know, we want to be absolutely top for quality. That's why our clients come to us and and actually make sure that they see the value in our in our consulting advice rather than being seen as some of the the themes that Steven touched on earlier, which typically the, critique or is the critique of the consulting industry.

33:48 And just on the right hand side as well, you know, the way that we hold ourselves to, you know, the highest quality bar, we also do do so with our acquisitions. So as we're going through the the typical due diligence process of acquisitions, a huge part of this is obviously commercial and how their clients see them. So each of the acquisitions to date was put under the same level of client scrutiny, or client survey, and all of them came out, you know, the same quality bar as us, all outperforming the competition, you know, with with Coast. And, obviously, we looked at digital companies and agencies and compared them like for like with different firms. They're not necessarily typically in the consulting firms, but each of them outperform their competition, which is the key thing here. And and Graham will touch on that when he talks about some of the the people we're targeting, further down in in new targets as well.

34:35 So just going on to the next slide. So another key differentiator for us in the market is the fact that, you know, our team are all owners of the firm to different degrees. So on the right hand right hand pie chart there, you can see the percentage of that, and that covers obviously from the most junior grades all the way through to our partner team, to the directors. And that's really, really important for us. It means that all of our our team are committed for the for the long term, which, our options plan really feeds into, people's options vested between four four and five years. So that naturally increases the long term commitment that they have. And, also, this is based on performance. So it's it's integral that our team stay committed to that high bar of performance that that we've always set as a firm, and this can become obviously more and more challenging as as companies grow. So this options plan is is a huge incentive for people to keep performing, to keep delivering for clients.

35:29 The bottom left hand hand, box there just highlights our ESPP scheme. So this is a a market market leading equity scheme, which we're gonna show you a video video in a second, of one of our analysts actually talking through in a little bit more detail. This was introduced in f y twenty one, and we've already seen an increased uptake for 2022 of the scheme. So we're already starting to see how people are more and more engaged with the company. They can see the benefits of, you know, themselves sacrificing some of their own salary to get benefits back in in shares that we, that we actually match as a firm. But also, you know, as the market changes and as the share price increases, you know, they're starting to see the benefits of that as well. And that's very much our mentality as a firm. We want to be a firm of entrepreneurs, not a firm of employees. We want our team to feel the, you know, the risk and the reward side of an entrepreneur.

36:19 And, again, that feeds into our culture. This is a huge differentiator for us in in the consulting market. So now I'm just gonna touch on this video with Alice, one of our analysts, talking through particularly the ESPP scheme and and actually what that means means for each of our employees. At ELIXIA, we are a firm of entrepreneurs. But what does that actually mean? Well, we take calculated risks for the things that we truly believe in, and that is exactly what we're here to do. Each of our employees across the brand have the opportunity to sacrifice a percentage of their salary for shares in the company. And so this means just like sort of true entrepreneurs, we take financial risk in order to reap the reward. This also means that we are owners of the business, so we do benefit directly from the hard work that we put in. So I think what's really unique about our equity scheme at ELIXIR is that unlike other businesses whereby executives or partners are the only people that can benefit from this kind of scheme is that anyone from the analyst all the way to principal have the opportunity to sacrifice an element of their salary in exchange for shares. So under the employee share purchase plan, our shares are matched 100% by the company. So this means that with every share I purchase, the company also purchases one share. So essentially, I'm doubling my investment. You might find this daunting, particularly if it's your first job or if you've come from a nonfinancial background like myself.

37:45 It took me quite a long time to get my head around it. But in simple terms, in January 2022, I entered the scheme. And then by the 12/31/2022, I have bought 100 shares in ELIXIR. This all happens through a platform. We don't actually have to do anything, so we just have to sit back and and watch our investment. In January 2023, I'll be given 100 shares by the firm as a matching grant. These 100 shares will then vest by 20% per year over the next five years given that I stay at ELIXIR. And once they do vest, I might want to sell in which case I can. So this essentially means that in January 2024, you get given 20 shares, same again in 2025, 2026, and so on until 2028. So if we take a real life example, that means that people who enrolled in 2021 have a 21% return on investment. And it really is that simple. You can also opt out at any point so you aren't locked in for a certain number of years. So another thing that is great about ELIXIR is that we are given options.

38:42 These options are completely free, they're gifted to us when we pass probation or if we're promoted. So options are essentially the right, not the obligation, to buy shares on the vesting day at a fixed price. That price being the exercise price on the day of the grant. So what does that actually mean? So for example, if I was to be given options today, they would be at the market price today. So if the market price were to go up in the future, I would still be able to buy those shares at the price today. So these options vest over four years, and you're eligible depending on your end of year performance review. So that's something we do on top of our quarterly promotion cycle and also feedback culture, but that's for another video.

39:34 So, yeah, as Alice touched on there, you know, the breakdown of the scheme, they're really generous in the market, but they do instill that performance culture. And we do have a very high bar for people to particularly receive the options that that they can achieve year on year in the firm. And for me personally, you know, I joined pre IPO. We've we've always had the same culture in terms of wanting the entrepreneurial type of person that really is accountable for what they do in the firm. But the IPO just basically gave us the tools to do this even more and instill it across the firm, which is so crucial again as we grow and as we bring in acquisitions. And these schemes, you know, they're instilled across the acquisitions as well, so that everyone, you know, is aligned to the same goals across companies, you know, right the way through the group. And now I'm just gonna touch on, something that Steven mentioned earlier when we looked at the the consulting campaign, which we introduced in September of this year. We launched in September of this year. You know, as we position ourselves as the best consulting firm in the market with our clients and, you know, against our competitors, we we really have to have the best brand as well. And everything that we do in terms of our brand identity and any of our marketing is very disruptive.

40:46 It's very challenger. It stems right the way through our messaging. So, you know, from basically a a Times Square takeover that you can see on the left hand side there right the way through to the kind kind of campaigns that you saw earlier on, you know, we really want to call out our industry. We really wanna make ourselves known as a challenger brand like you might have heard of the challenger banks. You You know, our industry has been dominated by the big players for so, so long, and it's really time for people to to look elsewhere and for to take a chance on a on a smaller boutique company, where they can get the better quality, better experience overall. And we've always invested in our brands since day dot. But as I said, the IPO really accelerated the the profile growth that we've seen. And in the last few years, we've really started to see our marketing, as a as a real revenue stream. So in 2022, we've had over £1,000,000 worth of revenue through.

41:37 And and it's not just about the revenue. It's about the type of brands that are coming to us as well that you can see on the on the right hand side there. We're getting some of the biggest brands, come through directly, through to our website from our brand, from our marketing, which is really, really great to see. You know? That alongside our networks, our incredibly strong networks is a really, really powerful tool and will only help to accelerate our growth overall, in the market, the ambitions that, Stephen touched on earlier on. So I'm just gonna pass over, to Graham now to, touch on some of our recent financial performance. Perfect. Thank you, Caroline. So just to give you an overview of of where we stand today, from a a p and l point of view, we've mentioned we've been growing 30% year on year CAGR between 2011 and and 2021.

42:27 Most of that has been organic, but also supported more recently by three successful acquisitions in that period, and then we've had in 2022, which you'll see in this year's results. Our group revenues are well diversified. You know, we've we've learned our lessons to Steve's point earlier when when we weren't so diversified in our early years, and we we've spent a lot of time and effort making sure that geographically and by capability, we have a a a very healthy client spread. And we've got a strong track record of healthy profitability with a a group EBITDA margin of 31% for h one twenty two, you can see there. And we achieved that through a strong rate card, great client work, and a prestigious control of utilization and costs. So we manage that very closely.

43:14 From a cash point of view, a very healthy position, 14,300,000 f y '21 operating cash flow, and we've got very strong conversion of EBITDA less tax to operating cash. And group net cash at the interim's half year was £11,100,000. That's after financing ILAP, the initial consideration without dilution. So rather than printing new shares, we we bought shares and gave them. Sorry. We we gave them cash to to buy shares from the EBT. And I think a a very well run consulting business should never have a cash problem, and and as it's run very well indeed. From a balance point balance sheet point of view, again, very strong. We've got robust a and healthy balance sheet. At June 30, we have net assets of £90,000,000 with no debt aside from the IFRS 16 office lease capitalization.

44:08 From a working capital management point of view, we're we're efficient at forty five days debt to collection as at end of last year. So no bad debt either. We've got a blue chip client base who pay their bills, which is always very helpful. And from an outlook point of view, you you probably have seen this, but if not, we've reaffirmed to the markets at our interims that we will be within the guidance range of range of 70 to £75,000,000 revenue, and we were happy to upgrade our EBITDA forecast at the interims to be at least 20,000,000, which was above the previous market's expectation. In terms of go forwards and our our growth strategy, I just wanted to expand on the the the four pillars that Steve touched on. You know, any anyone that says growing a consulting business is hard, perhaps don't understand that there's actually only four ways that you can do it. Hence, we have four four pillars here.

45:06 So three of them organic on the left and then inorganic on the right. If I take the inorganic first, so stretching our existing partners, you know, essentially just meaning getting more revenue out of your your partner per person. And if you look back at our previous presentations or read the research notes, you'll see that we've been very success successful in doing that over the past four years in getting our partner team to sell more, you know, thinking bigger with their clients doing longer term work. And we've actually more than doubled the revenue that each partner brings in per person over those four years. So it was around 1,500,000 in 2018. And if you take the h one numbers annualized, we're at about £3,100,000 per partner. Promoting partners from within, we've always, since day one, embraced growing our own timber since the day that we founded.

45:56 In fact, relatively recently, we had our first partner promote who has gone all the way through the firm from graduates, which is a very proud moment for us. And that is now now we have enough people who have been here for long enough that will be happening more and more. And and the great thing is these people are culturally integrated within our within our business. And with the right incentivization, they will help us succeed going forward. You know, we have a team of highly performing principals who will be our our leaders of the future with the the options, packages, and the incentives that you heard from Caroline in place, we're in a really good position. The third pillar is hiring new partners. Steve mentioned some of the partner investments we've made previous years and and in particular this year. We will continue to do that. You know, if we can bring in more client networks and consulting industry expertise, then that's that's a a key part of our growth strategy because we can then, you know, look to work with the their relationships and their clients and hopefully make them our clients when they come over to us.

47:01 And then the fourth pillar, the inorganic part piece of the the pie is buying new businesses, and and this is the area that I drive. So I will give you some more detail of that in the following couple of pages. So what this shows here, just to give a a bit of context, I I've had a dedicated team since the IPO working with me on our internal m and a, and you can see some of the pipeline stats on the left there. To give you an idea, there are 380 companies that I've personally spoken to since IPO. We've closed four deals in total and got a really strong pipeline. We could have closed many more, but we're focused on bringing in the right firm, not just any firm. So we quickly discount any opportunity if we see anything we don't like.

47:47 On the right there, you can see some of the kind of facets, if you like, of of what the team and myself are doing in terms of an acquisition strategy. So we are taking what what's known as a programmatic approach, which which essentially means looking at one or two deals a year that make up, give or take, 20 to 30% of your market cap. There's been a ton of research recently done by McKinsey, in fact, which looked at hundreds of acquisitive companies and shown that this approach is the most successful for those in the market. So that is the approach that we have taken. It's better than buying a company that is too big, and it's equally better than buying lots and lots of small companies. And and it's working well for us, we'll continue to do so.

48:32 Boardroom issues, again, we've we've heard of some of these, but we are targeting being able to buy the best boutique companies that specialize in those main boardroom issues. You know, and we've touched on some, like cyber, data, digital, etcetera. But I think even more powerfully is that as these business businesses come into the group, we can start stitching together, for example, data with digital, with supply chain across our brands, and then we can wrap consulting around that to give a truly unique service to our clients around the world. The third is high quality serve services. To Caroline's point, you know, we we have very high bar amongst ELIXIS. We have an equal high bar amongst the companies we look at, which makes us very selective. And, you know, I could honestly do a deal a month if we didn't care about quality of earnings or quality of client work, but that that isn't us.

49:23 You know, we reject 10 times more progressed opportunities than those that decide not to con continue with us, and that's just because they they don't reach that bar. Geographically additive, we've spoken about The US. It's a big investment jobbie for us for us. That that will not change. But going forward, we can use acquisitions to open up new geographies for us. So, you know, we are not around as a company, we do not invest in a new geography with people and infrastructure and then hope that clients will come to us. We will lie we will only go into new geographies either if one of our international clients takes us there or if a local client has, you know, asked us to come there or through an acquisition. So for us, looking at other geographies, you know, such as, you know, into Europe, into South Africa, for example, that's something that we we are looking at at the moment.

50:12 And the last point there around aligning deal deal structures, I think this is critical. You know, we we we've managed to align our people throughout the firm, as Caroline mentioned, through options in the SPP, And we wanna align the owners and founders and leaders who come across into ELIXIA through the acquisitions so that they have the same incentives and motivations as the rest of the partner team to help us grow this business going forward, which is why if you look at some of the deal shakes, all of the deal shakes we've done since IPO, it it is always a mix of cash, shares, and earning shares. So if they hit their targets over a three year period, then they they can get that third portion there. And what that does is it incentivizes everyone to cross sell each other's services into into other clients, and it's working really well today.

51:00 So from a pipeline and and strategy point of view, re really happy with progress. But to give you an idea of the businesses we have bought in with a few few metrics, you can have a look at this slide. So you can see we bought in four businesses, one before IPO, which is Dan on the left, and then one each year since IPO. Just quickly, what do they do? DEN is a design and creative agency. Coast, they do digital mark they're they're a digital marketing agency, but when you combine them with DEN, that means we have a full service digital offering with our clients. Return focus on sourcing supply chain, cost transformation. It was kind of the right hand side of that slide Steve went through earlier. And coming into a recession, you know, we're already seeing an uptick in in demand for these services. And then Eilap are a data and technology consultancy headquartered in The US, but with a significant data center of excellence in Croatia, which we are now using amongst all of our clients.

51:58 So as shareholders, I wanted to give an idea of of some of the value created, and you can see some of that on this slide. So then in terms of multiples, it it's not applicable. It's more of a merger into the business in 2017 when we were in LLP. We bought the founder and a partner who who bought his team and brand. But you can see since then, we have turbocharged them since they joined. So, you know, we we've increased their revenues 10 times since they joined, and we've create created over £8,000,000 of new revenue for the group on digital projects with our clients. Coast came in at a total of 4.3 times maximum multiple, and, you know, we've been trading anywhere between twelve and sixteen times over the period to period. So you can see immediately there's a lot of shareholder value there.

52:48 Likewise, return when we brought them into the business. They're excellent at finding value within their clients and our our clients, and and we found nearly £4,000,000 of of cross sell revenue with them in in just over a year. And Eilap, biggest acquisition to date. We're incredibly excited how quickly we're integrating them into our our client set. You know, data is prevalent in in every project that we do. So we've got no no doubt that we'll break into new clients and markets working closely together with them going forward. So if you add those up, you know, overall, there's there's more than £15,000,000 of new revenue into the group during this time time that neither company would have by themselves. So it shows that it it really does work. And then when you add in the revenue they have anyway from their client set and their organic growth to that new new revenue, we are adding tens of millions of revenue into the group alongside, you know, the EBITDA and share price uplift that that comes with that.

53:45 So we're gonna continue doing this. We're looking for bolder and better companies each time. And before I I head back to Steve, I thought it might be good to just give you a view of what do the founders of these businesses coming in, think, you know, once they have joined us. So I'll share a little video that I actually use when I talk to other founders of other companies around, you know, the benefits of this. So it is from that perspective, but I think it'll give you a a really good idea of the people coming in and the businesses. Hi. I'm Bill, founder of Den Creative. Hi. I'm David. I'm CEO of Coast Digital. I'm Chris, founder and CEO of IO Lab. One of the main reasons that we started talking to ELIXIR was primarily opportunity. So as a starting business, you're always keen to find bigger and better clients. ELIXIR had that. What really made ELIXIR stand out was the people. We really enjoyed working alongside them.

54:39 We had a couple of client accounts that we were working in together. So we got to know them a little bit before the transaction. How do we get in front of large scale organizations with bigger budgets? That's been the advantage of of ELIXIA. For us, it was access to c suite, and it was access to to try and grow the business, and ELIXIA are on that journey with us and to work with the team rather than for them. And I think that's fundamentally kind of fits in our ethos. Everyone's incentivized to cross sell. So each of the individual businesses are incentivized to sell the other businesses work as well and vice versa. So what that means is, you know, someone opens the door, has a relationship, they're incentivized to bring you in because at the end of the day, it's the share price that we're trying to positively impact. One of the biggest challenges we faced at IOLAP was retaining top talent and we had to create a way to enable that top level of talent to participate in the growth of IO Lap. And joining forces with ELIXIR, especially because they had just listed, created a way for us to to share that with the next level of leadership. The the idea that partners are invested and partners wanna be part of our journey too. Everyone wants to get us in front of clients. Our growth and the partner growth is all super, super open. Everyone can see it. We all know where issues are. We all know where opportunity is. One of the great parts about having joined ELIXIR is the great group of partners that we work with. There's 20 plus folks that we can go to to gather industry experience.

55:59 Just working with a big group of like minded entrepreneurs has been great. Since we've come across, we've seen real growth over the past, let's say, four years. Revenue growth has been seven, eight times. People team size, about three to four times. We set targets during the negotiations. We are blowing our numbers out because we're meeting our targets on our own and ELIXIR is adding additional work to us and the rest of the brands are adding work for us. I'd like to see us double two and a half to three times revenue, which most likely means increase the employee count by about that much as well. And I think we're on pace to do it. Our growth around new business and our EBIT, our target, we smashed it in our first year, and we're doing the same in our second. Coast in five years, it's certainly different where I saw it before we did the acquisition.

56:45 Our plans are bigger now. The idea of where we're going, the size and scale of where we wanna be is much, much bigger. Don't put a cap on where you aspire to be as a business because you can grow as much as you want when you come a beer. For me, my daily job hasn't changed that much. I still run ILL just like I did before. The the advantage that we have is a much broader breadth of, client access. We have a a geographical, bigger reach. We're we're working in companies around the globe where we were primarily US focused in the past and we're working with a big group of great people. If you're considering joining ELIXIR, I would say have a look, get to know the people a bit and I think you'll make the right decision. I did. Over to you, Steve.

57:43 Yeah. So, hopefully, everybody you've seen, that gives you a little bit of the story of our of our business. I'll just add one other thing to the acquisition story that I just wanna reinforce. You know, the the reason we went down this acquisition path and wanted the I IPO, one of the reasons, was that the best boutique consulting firms sorry. The best entrepreneurial consulting leaders are not sitting in the big top 10 firms I showed you early on. They're actually sitting in the boutique firms. And and the reason they those boutique firms exist is because they're actually better than the big firms. Because if they weren't, they wouldn't get the work. And so the idea with this whole strategy is that the and sorry. And so what is it that that all boutique firms struggle with? It's never really capability, and it's never really the entrepreneurial edge to deal with your clients in a different way.

58:38 What it really is is access to market. The benefit the top 10 firms have is that they've been around for so long, they have access to just about every client because their reputation and their brand is so pervasive. Whereas the boutique firms always struggle with that access. So what we're trying to do here is build a platform where we all have ownership in the equity of the overarching body with outside investors participating too that we can now have a united force to go and share each other's clients with one another and accelerate the growth of the business. And and I think what you saw with Grant's presentation there, he mentioned the number about 15,000,000 so far across our acquisitions so far, where the revenue would never existed with the companies in isolation. It's that ability for us to sell, say, ILAP into our clients and for ILAP to sell Coast into their clients that is really, the accelerating opportunity here and and one we're really excited about.

59:32 I'm standing on this page because, I'm sub subconsciously sharing the brilliance of our firm with you. You can see we've had many, many awards since 2014 where we got named best new consultancy back back then to to many, many awards since. And, you know, it's it's we're very proud of what we've achieved. But perhaps the the most important thing of all is the quality of our client base. And you can see there that we work we work with the world's best brands. I mean, Graham mentioned in his financial update that we we don't have any cash collection issues because, literally, we work with the the world's top brands, and, it's something that we're very proud of, and it's something that we're growing, all the time. Now I I've answered one or two of your questions along along the way.

1:00:18 I'll have a quick look here. We just about talked an hour, but maybe there's something I can answer quickly. I've got Michael who's asking a question. How many clients represent more than 1,000,000 of your revenue, and what visibility do you have on them? Michael, it would wouldn't it would be unsurprising to you to know that that this is something that gets a hell of a lot of our attention. We call them gold clients, and we have many clients. Actually, I think the last count was 16 or so. I think Grant's nodding to confirm for me there. It's about 16 clients over 1,000,000. We have one or two clients sitting at 7,000,000 and others obviously topping out well, coming out at around 1,000,000. But these are obviously clients that we why we value these clients a lot is because, you know, if they like us to buy us for one project, and one project could be a 150,000.

1:01:06 And if they're buying us repeatedly, that shows that we're, you know, we've really made a difference to their business and that they are, valuing our interventions in their business and that our relationships are really sound and strong. So we spend a lot of time if we get a new client, it's our first and primary objective to be able to build the relationships so that they see us as that key adviser that they turn to when when when issues are difficult difficult. So I think we've got quite a few more questions here, but what we will do is, if you if you all don't mind, is we will have a look at these offline and reply to these in writing as I think we've now run out of time. But suffice to say thanks so much for your time, and hopefully, you will you will like us to see the opportunity.

1:01:56 I can guarantee you that I have some of the world's best consultants in my business. They can work anywhere they'd like in any consultancy they'd like probably for, you know, in cash terms, 30 but 70% more in cash terms. And the reason they don't is because they believe in the equity opportunity here. And and what does that mean for you as shareholders? It means that you have some of the best consulting minds and leaders in the industry pursuing the very ambition that you as individual investors would be seeking yourself to maximize your return on equity. So I can't think of a better way to align interests. And as Caroline said, that goes all the way down to the the lady that man's our reception in our London office.

1:02:41 You know, she's the the front office of our of our business. Our clients walk through our doors often, and she's incredibly motivated to give them the best ELIXURE experience she can. And it all goes to add to, the overall value, and she's an equity participant as a result. So thank you for your time, and, I hope you can, you you choose to invest in us. Thanks a lot. Steven, Graham, Caroline, thank you very much for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few minutes to complete, but I'm sure be greatly valued by the company. On behalf of the management team of ELIXIRR INTERNATIONAL PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.