Kainos : Interim results (presentation)

Interim Results

6 months ended 30th September 2021

Brendan Mooney (CEO) and Richard McCann (CFO)

15 November 2021

Highlights

Continued business momentum, with increasing opportunities

Very strong performance with growing market opportunities

• Revenue, bookings and backlog showing very strong growth
• Strong profit growth, but some constraint with 'return to normal'

We have a robust and well-balanced business

• International revenues up 45% to £40m
• Commercial revenues up 51% to £59m
• Healthcare revenues up 63% to £31m

Very strong growth in both operating divisions

• Digital Services achieved growth of 32% to £94m
• Workday Practice delivered growth of 34% to £48m
• Launch of Smart Audit with 20+ clients already signed

Continue to build an exceptionally talented team

• 2,438 people now working at Kainos, across 17 offices

REVENUE(1)+33%

£142m

ADJUSTED PROFIT(2) +12%

£29m

BOOKINGS+81%

£187m

BACKLOG +38%

£250m

CASH+29%

£80m

(1) Organic revenue growth was 32%.

2

1. Adjusted to remove the effect of share-based payments and acquisition related costs

Group Overview

Long-term, strong revenue growth trends in both Digital Services and our Workday Practice

DIGITAL SERVICES

WORKDAY PRACTICE

				£162m
		£117m	£123m
£69m	£75m
FY17	FY18	FY19	FY20	FY21

• The full lifecycle development and support of customised digital services for public sector, healthcare and commercial customers
• Our transformative solutions encompass a range of services from experience design to AI and Cloud to deliver truly intelligent solutions that are secure, accessible and cost-effective

£73m

£56m

£34m

£15m £22m

FY17

FY18

FY19

FY20

FY21

• We are one of Workday's most respected partners
• As a full-service partner, we are experienced in complex deployment and integrations, and the leader in Workday test automation
• We're trusted by our customers to launch, test, expand and safeguard their Workday systems

3

Financial Summary

An established track record of high growth, high margin performance

Remain on track to deliver our twelfth consecutive year of revenue and adjusted pre-tax profit growth

Five-year(2017-2021) revenue CAGR of 30%

Increased R&D investment of £2.8m (H1 21: £2.0m) reflecting the development of Smart Audit

• Investment fully expensed in year

Key Financial Metrics

• Very strong revenue visibility: backlog up 38% to £250m (H1 21: £181m)
• Adjusted pre-tax profit(3) margin normalised: 21% (H1 21: 24%)
• Cash balance increased 29% to £80m (H1 21: £63m)

Earnings - Dividend.

• Adjusted diluted EPS: increased by 12% to 19.1p per share (H1 21: 17.0p)
• Dividend declared; increased by 11% to 7.1p per share (H1 21: 6.4p)

REVENUE

£240m		H1 Revenue
£180m			H2 Revenue		£128m
£120m				£84m	£92m
£60m			£55m		£87m	£107m	£142m
			£67m
			£41m
£0m
2018	2019	2020	2021	H1 22

ADJUSTED PRE-TAX PROFIT(3)

£60m			H1 Adjusted PBT
£40m			H2 Adjusted PBT		£31m
£20m				£13m	£13m	£26m	£29m
			£8m
			£10m	£13m
£0m			£7m
2018	2019	2020	2021	H1 22

(3) Adjusted to remove the effect of share-based payments and acquisition-related costs

4

Our People

We continue to build an exceptionally talented and engaged workforce

PEOPLE +41%

2,438

GROWTH TREND

2,438

1,169 1,470 1,715 2,024

FY18

FY19

FY20

FY21

H1 22

EMPLOYEE RETENTION

89%

COMMENTARY

Maintained our strong employee engagement

• Retention remains high, 89% (H1 21: 92%)

Increased presence in all regions: +709 people (+41%); driven by very strong recruitment

• UK & Ireland: 1,775 people (+498)
• Central Europe: 406 people (+64)
• North & South America: 257 people (+147)

Completed the acquisition of two Workday specialists

• Cloudator (Europe, 55 people, June)
• Une Consulting (Argentina, 42 people, September)

All offices open, but home working remains the norm

• Office-basedactivity centred around collaboration and social engagement

GLOBAL LOCATIONS

257	With people
based in 21
406
countries, we
1,775	are growing
UK	into a global
Europe	company
America

ENGAGEMENT

#86	ranked in the Sunday
	Times, Best Companies
84% friendrecommend to a

We operate share gifting and save-as-you-earn schemes for all employees. In Dec 2020	5
we allocated 378,152 new shares to the schemes; the total since IPO is 5,826,209 shares.