Endava plc 6-K, filed May 23, 2023
Endava plc (DAVA)
6-K
2023-05-23
For: 2023-03-31
View Original
Added on
April 07, 2026
About this 6-K
Endava plc filed this 6-K on May 23, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Month of May 2023
Commission File Number: 001-38607
ENDAVA PLC
(Name of Registrant)
125 Old Broad Street
London EC2N 1AR
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
x Form 20-F ¨ Form 40-F
EXHIBIT LIST
| Exhibit | Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
Exhibit 99.1, other than the portions of Exhibit 99.1 under the caption "Outlook", is hereby expressly incorporated by reference into the registrant’s registration statement on Form F-3 (File No. 333-229213) and registration statements on Form S-8 (File Nos. 333-228717, 333-248904, 333-259900 and 333-268067), and any related prospectuses, as such registration statements may be amended from time to time, and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ENDAVA PLC | |||||||||||
| Date: May 23, 2023 | By: | /s/ John Cotterell | |||||||||
| Name: John Cotterell | |||||||||||
| Title: Chief Executive Officer | |||||||||||
 | Q3 FY2023 | |||||||
ENDAVA ANNOUNCES THIRD QUARTER FISCAL YEAR 2023 RESULTS
Q3 FY2023
20.3% Year on Year Revenue Growth to £203.5 million
14.6% Revenue Growth at Constant Currency
IFRS diluted EPS £0.42 compared to £0.35 in the prior year comparative period
Adjusted diluted EPS £0.59 compared to £0.48 in the prior year comparative period
London, U.K. – Endava plc (NYSE: DAVA) ("Endava" or the "Company") a global provider of digital transformation, agile development and intelligent automation services, today announced results for the three months ended March 31, 2023, the third quarter of its 2023 fiscal year ("Q3 FY2023").
“Endava reported another solid quarter for Q3 FY2023 despite the challenging economic environment,” said John Cotterell, Endava's CEO. "Demand from new and existing clients continued to drive revenue growth in the quarter, leading to a revenue increase of 14.6% in constant currency for Q3 FY2023.”
THIRD QUARTER FISCAL YEAR 2023 FINANCIAL HIGHLIGHTS:
•Revenue for Q3 FY2023 was £203.5 million, an increase of 20.3% compared to £169.2 million in the same period in the prior year.
•Revenue growth rate at constant currency (a non-IFRS measure)* was 14.6% for Q3 FY2023, compared to 50.9% in the same period in the prior year.
•Profit before tax for Q3 FY2023 was £30.4 million, compared to £25.9 million in the same period in the prior year.
•Adjusted profit before tax (a non-IFRS measure)* for Q3 FY2023 was £43.4 million, compared to £34.2 million in the same period in the prior year, or 21.3% of revenue, compared to 20.2% of revenue in the same period in the prior year.
•Profit for the period was £24.4 million in Q3 FY2023, resulting in a diluted earnings per share ("EPS") of £0.42, compared to profit of £20.1 million and diluted EPS of £0.35 in the same period in the prior year.
•Adjusted profit for the period (a non-IFRS measure)* was £34.1 million in Q3 FY2023, resulting in adjusted diluted EPS (a non-IFRS measure)* of £0.59, compared to adjusted profit for the period of £27.9 million and adjusted diluted EPS of £0.48 in the same period in the prior year.
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| Q3 FY2023 | |||||||
CASH FLOW:
•Net cash from operating activities was £25.1 million in Q3 FY2023, compared to £18.7 million in the same period in the prior year.
•Adjusted free cash flow (a non-IFRS measure)* was £21.2 million in Q3 FY2023, compared to £16.1 million in the same period in the prior year.
•At March 31, 2023, Endava had cash and cash equivalents of £199.2 million, compared to £162.8 million at June 30, 2022.
* Definitions of the non-IFRS measures used by the Company and a reconciliation of such measures to the related IFRS financial measure can be found under the sections below titled “Non-IFRS Financial Information” and “Reconciliation of IFRS Financial Measures to Non-IFRS Financial Measures.”
OTHER METRICS FOR THE QUARTER ENDED MARCH 31, 2023:
•Headcount totaled 11,742 at March 31, 2023, with 10,818 average operational employees in Q3 FY2023, compared to a headcount of 11,001 at March 31, 2022 and 9,851 average operational employees in the same quarter of the prior year.
•Number of clients with over £1 million in revenue on a rolling twelve-month basis was 155 at March 31, 2023, compared to 118 clients at March 31, 2022.
•Top 10 clients accounted for 33% of revenue in Q3 FY2023, compared to 35% in the same period in the prior year.
•By geographic region, 32% of revenue was generated in North America, 24% was generated in Europe, 38% was generated in the United Kingdom and 6% was generated in the rest of the world in Q3 FY2023. This compares to 33% in North America, 21% in Europe, 43% in the United Kingdom and 3% in the rest of the world in the same period in the prior year.
•By industry vertical, 53% of revenue was generated from Payments and Financial Services, 21% from technology, media and telecommunications (TMT) and 26% from Other in Q3 FY2023. This compares to 51% from Payments and Financial Services, 25% from TMT and 24% from Other in the same period in the prior year.
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| Q3 FY2023 | |||||||
OUTLOOK:
Fourth Quarter Fiscal Year 2023:
Endava expects revenues will be in the range of £187.0 million to £189.0 million, representing constant currency revenue growth between 3.0% and 4.0%. Endava expects adjusted diluted EPS to be in the range of £0.44 to £0.45 per share.
Full Fiscal Year 2023:
Endava expects revenues will be in the range of £792.0 million to £794.0 million, representing constant currency growth between 16.0% and 16.5%. Endava expects adjusted diluted EPS to be in the range of £2.15 to £2.16 per share.
This above guidance for Q4 Fiscal Year 2023 and the Full Fiscal Year 2023 assumes the exchange rates on April 30, 2023 (when the exchange rate was 1 British Pound to 1.26 US Dollar and 1.13 Euro).
Endava is not able, at this time, to provide an outlook for IFRS diluted EPS for Q4 FY2023 or FY2023 because of the unreasonable effort of estimating on a forward-looking basis certain items that are excluded from adjusted diluted EPS, including, for example, share-based compensation expense, amortisation of acquired intangible assets and foreign currency exchange (gains)/losses, the effect of which may be significant. Endava is also not able, at this time, to reconcile to an outlook for revenue growth not at constant currency because of the unreasonable effort of estimating foreign currency exchange (gains)/losses, the effect of which may be significant, on a forward-looking basis.
The guidance provided above is forward-looking in nature. Actual results may differ materially. See the cautionary note regarding “Forward-Looking Statements” below.
RECENT BUSINESS HIGHLIGHTS:
On May 2, 2023, Endava announced the appointment of Patrick Butcher to its Board of Directors.
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| Q3 FY2023 | |||||||
Mr. Butcher most recently served as Group Chief Financial Officer of the Headlam Group plc from April 2022 until March 2023. From January 2019 to November 2020, he served as Group Chief Financial Officer at Capita plc. Prior to that, Mr. Butcher served as Chief Financial Officer at various companies including The Go-Ahead Group plc, Network Rail Limited, English and Scottish Railway and Mapeley Limited. Mr. Butcher received his B. Compt. (Hons) in Accounting and Finance from the University of South Africa and is a qualified Chartered Accountant (South Africa).
On May 2, 2023, Endava also announced a number of changes to the executive team, effective July 1, 2023.
Rob Machin, the Company's current Chief Operating Officer, will be transitioning off the Endava executive team to focus on Endava's internal Business Transformation programme, designed to enable the company to scale through 2030. Over the past few years, Endava has been shifting to an industry vertical go to market, which is a significant point of differentiation in client engagements. To further accelerate this shift, Julian Bull, the Company's current Chief Commercial Officer, will be taking over the role of Chief Operating Officer, and will be responsible for both Sales and Client Delivery to Endava's industry verticals.
In addition, Matt Cloke will be promoted to the position of Chief Technology Officer, and both he and David Churchill, Endava's Chief People Officer, who currently reports to Rob Machin, will be joining Endava’s executive team, reporting directly to Endava's Chief Executive Officer.
On May 10, 2023, Endava announced the acquisition of Mudbath & Co. Pty Ltd, headquartered in Newcastle, Australia (“Mudbath”).
Mudbath is an Australian-based technology firm specialising in strategy, design and engineering services. Mudbath partners with businesses to build new digital solutions, enhance user experiences and accelerate digital transformation programs across enterprise systems, web and mobile products using their proven agile delivery methodology. Mudbath’s clients span broad industry verticals, including retail, mining (and adjacent activities including rail and tools), health, insurance, banking and travel. Mudbath’s employees are based primarily in Newcastle, Sydney and Melbourne, Australia.
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| Q3 FY2023 | |||||||
CONFERENCE CALL DETAILS:
The Company will host a conference call at 8:00 am ET today, May 23, 2023, to review its Q3 FY2023 results. To participate in Endava’s Q3 FY2023 earnings conference call, please dial in at least five minutes prior to the scheduled start time (866) 652-5200 or (412) 317-6060 for international participants, Conference ID: Endava Call.
Investors may listen to the call on Endava’s Investor Relations website at http://investors.Endava.com. The webcast will be recorded and available for replay until Thursday, June 22, 2023.
ABOUT ENDAVA PLC:
Endava is reimagining the relationship between people and technology. By leveraging next-generation technologies, its agile, multi-disciplinary teams provide a combination of product & technology strategies, intelligent experiences, and world class engineering to help clients become digital, experience-driven businesses by assisting them in their journey from idea generation to development and deployment of products, platforms and solutions. Endava collaborates with its clients, seamlessly integrating with their teams, catalysing ideation and delivering robust solutions.
Endava services clients in Payments and Financial Services, TMT, Consumer Products, Retail, Mobility and Healthcare. As of March 31, 2023, 11,742 Endavans served clients from locations in Asia-Pacific, Middle East, North America and Western Europe and delivery locations in Argentina, Bosnia & Herzegovina, Bulgaria, Colombia, Croatia, Malaysia, Mexico, Moldova, North Macedonia, Poland, Romania, Serbia, Slovenia, Uruguay and Vietnam.
5
| Q3 FY2023 | |||||||
NON-IFRS FINANCIAL INFORMATION:
To supplement Endava’s Condensed Consolidated Statements of Comprehensive Income, Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows presented in accordance with IFRS, the Company uses non-IFRS measures of certain components of financial performance. These measures include: revenue growth rate at constant currency, adjusted profit before tax, adjusted profit for the period, adjusted diluted EPS and adjusted free cash flow.
Revenue growth rate at constant currency is calculated by translating revenue from entities reporting in foreign currencies into British Pounds using the comparable foreign currency exchange rates from the prior period. For example, the average currency rates in effect for the fiscal quarter ended March 31, 2022 were used to convert revenue for the fiscal quarter ended March 31, 2023 and the revenue for the comparable prior period.
Adjusted profit before tax ("Adjusted PBT") is defined as the Company’s profit before tax adjusted to exclude the impact of share-based compensation expense, amortisation of acquired intangible assets, realised and unrealised foreign currency exchange (gains)/losses, restructuring costs and fair value movement of contingent consideration, all of which are non-cash items except for the restructuring costs and realised foreign currency exchange (gains)/losses. Adjusted PBT margin is Adjusted PBT as a percentage of total revenue.
Adjusted profit for the period is defined as Adjusted PBT together with the tax impact of these adjustments.
Adjusted diluted EPS is defined as Adjusted profit for the period, divided by weighted average number of shares outstanding - diluted.
Adjusted free cash flow is the Company’s net cash from operating activities, plus grants received, less net purchases of non-current assets (tangible and intangible).
Management believes these measures help illustrate underlying trends in the Company's business and uses the measures to establish budgets and operational goals, communicated internally and externally, for managing the Company's business and evaluating its performance. Management also believes the presentation of its non-IFRS financial measures enhances an
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| Q3 FY2023 | |||||||
investor’s overall understanding of the Company’s historical financial performance. The presentation of the Company’s non-IFRS financial measures is not meant to be considered in isolation or as a substitute for the Company’s financial results prepared in accordance with IFRS, and its non-IFRS measures may be different from non-IFRS measures used by other companies. Investors should review the reconciliation of the Company’s non-IFRS financial measures to the comparable IFRS financial measures included below, and not rely on any single financial measure to evaluate the Company’s business.
FORWARD-LOOKING STATEMENTS:
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by the use of terms and phrases such as “believe,” “expect,” "outlook," “may,” “will,” and other similar terms and phrases. Such forward-looking statements include, but are not limited to, the statements regarding Endava’s projected financial performance for the fourth fiscal quarter of fiscal year 2023 and the full fiscal year 2023; the perceived impact and effect of macroeconomic conditions on Endava and its customers including the March 2023 banking collapse; expectations of increased demand for Endava offerings in upcoming periods and resulting impact on revenue; the impact that Endava’s management changes will have on the business and its growth; and Endava’s ability to achieve its anticipated growth. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including, but not limited to: Endava’s business, results of operations and financial condition may be negatively impacted by the Russia-Ukraine armed conflict or if general economic conditions in Europe, the United States or the global economy continue to worsen, including increased inflation and recent and potential future bank failures; Endava’s ability to retain existing clients and attract new clients, including its ability to increase revenue from existing clients and diversify its revenue concentration; Endava’s ability to attract and retain highly-skilled IT professionals at cost-effective rates; Endava's ability to penetrate new industry verticals and geographies and grow its revenue in current industry verticals and geographies; Endava’s ability to maintain favorable pricing and utilization rates; Endava’s ability to successfully identify acquisition targets, consummate acquisitions and successfully integrate acquired businesses and personnel; the effects of increased competition as well as innovations by new and existing competitors in its market; Endava’s ability to adapt to technological change and innovate solutions for its clients; Endava’s ability to collect on billed and unbilled receivables
7
| Q3 FY2023 | |||||||
from clients; Endava’s ability to effectively manage its international operations, including Endava's exposure to foreign currency exchange rate fluctuations; Endava’s ability to maintain an effective system of disclosure controls and internal control over financial reporting; and Endava’s future financial performance, including trends in revenue, cost of sales, gross profit, selling, general and administrative expenses, finance income and expense and taxes, as well as other risks and uncertainties discussed in the “Risk Factors” section of Endava's Annual Report filed with the SEC on October 31, 2022. In addition, the forward-looking statements included in this press release represent Endava’s views and expectations as of the date hereof and are based on information currently available to Endava. Endava anticipates that subsequent events and developments may cause its views to change. Endava specifically disclaims any obligation to update the forward-looking statements in this press release except as required by law. These forward-looking statements should not be relied upon as representing Endava’s views as of any date subsequent to the date hereof.
INVESTOR CONTACT:
Endava plc
Laurence Madsen, Investor Relations Manager
Investors@endava.com
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| Q3 FY2023 | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| Nine Months Ended March 31 | Three Months Ended March 31 | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||
| £’000 | £’000 | £’000 | £’000 | |||||||||||
| REVENUE | 604,942 | 474,353 | 203,532 | 169,220 | ||||||||||
| Cost of sales | ||||||||||||||
| Direct cost of sales | (381,711) | (297,384) | (132,458) | (108,092) | ||||||||||
| Allocated cost of sales | (18,676) | (16,797) | (6,433) | (5,707) | ||||||||||
| Total cost of sales | (400,387) | (314,181) | (138,891) | (113,799) | ||||||||||
| GROSS PROFIT | 204,555 | 160,172 | 64,641 | 55,421 | ||||||||||
| Selling, general and administrative expenses | (114,158) | (89,613) | (37,916) | (29,989) | ||||||||||
| Net impairment (losses) / gains on financial assets | (265) | (1,826) | 3,379 | (14) | ||||||||||
| OPERATING PROFIT | 90,132 | 68,733 | 30,104 | 25,418 | ||||||||||
| Net Finance (expense) / income | (905) | 1,155 | 284 | 472 | ||||||||||
| PROFIT BEFORE TAX | 89,227 | 69,888 | 30,388 | 25,890 | ||||||||||
| Tax on profit on ordinary activities | (18,122) | (13,834) | (6,030) | (5,787) | ||||||||||
| PROFIT FOR THE PERIOD | 71,105 | 56,054 | 24,358 | 20,103 | ||||||||||
| OTHER COMPREHENSIVE INCOME | ||||||||||||||
| Items that may be reclassified subsequently to profit or loss: | ||||||||||||||
| Exchange differences on translating foreign operations | (3,001) | 1,187 | (3,824) | 2,715 | ||||||||||
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO OWNERS OF THE PARENT | 68,104 | 57,241 | 20,534 | 22,818 | ||||||||||
| EARNINGS PER SHARE (EPS): | ||||||||||||||
| Weighted average number of shares outstanding - Basic | 57,176,428 | 56,135,980 | 57,603,730 | 56,585,768 | ||||||||||
| Weighted average number of shares outstanding - Diluted | 58,070,352 | 57,945,549 | 58,210,601 | 57,999,337 | ||||||||||
| Basic EPS (£) | 1.24 | 1.00 | 0.42 | 0.36 | ||||||||||
| Diluted EPS (£) | 1.22 | 0.97 | 0.42 | 0.35 | ||||||||||
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| Q3 FY2023 | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, 2023 | June 30, 2022 | March 31, 2022(1) | |||||||||
| £’000 | £’000 | £’000 | |||||||||
| ASSETS - NON-CURRENT | |||||||||||
| Goodwill | 186,946 | 145,916 | 143,346 | ||||||||
| Intangible assets | 50,924 | 56,189 | 53,585 | ||||||||
| Property, plant and equipment | 26,459 | 21,260 | 18,677 | ||||||||
| Lease right-of-use assets | 58,727 | 50,818 | 50,780 | ||||||||
| Deferred tax assets | 13,515 | 17,218 | 19,342 | ||||||||
| Financial assets | 1,992 | 2,276 | 189 | ||||||||
| TOTAL | 338,563 | 293,677 | 285,919 | ||||||||
| ASSETS - CURRENT | |||||||||||
| Trade and other receivables | 183,533 | 162,671 | 159,197 | ||||||||
| Corporation tax receivable | 678 | 2,309 | 1,636 | ||||||||
| Financial assets | 136 | 392 | 318 | ||||||||
| Cash and cash equivalents | 199,200 | 162,806 | 120,407 | ||||||||
| TOTAL | 383,547 | 328,178 | 281,558 | ||||||||
| TOTAL ASSETS | 722,110 | 621,855 | 567,477 | ||||||||
| LIABILITIES - CURRENT | |||||||||||
| Lease liabilities | 13,859 | 11,898 | 11,779 | ||||||||
| Trade and other payables | 92,649 | 98,252 | 88,762 | ||||||||
| Corporation tax payable | 5,569 | 3,477 | 4,333 | ||||||||
| Contingent consideration | 3,511 | 4,183 | 4,014 | ||||||||
| Deferred consideration | 6,538 | 10,604 | 7,036 | ||||||||
| TOTAL | 122,126 | 128,414 | 115,924 | ||||||||
| LIABILITIES - NON CURRENT | |||||||||||
| Lease liabilities | 50,193 | 43,999 | 44,036 | ||||||||
| Contingent consideration | — | 4,331 | 3,995 | ||||||||
| Deferred tax liabilities | 10,152 | 10,826 | 8,551 | ||||||||
| Deferred consideration | 1,363 | 1,062 | 3,992 | ||||||||
| Other liabilities | 525 | 500 | 191 | ||||||||
| TOTAL | 62,233 | 60,718 | 60,765 | ||||||||
| EQUITY | |||||||||||
| Share capital | 1,153 | 1,135 | 1,134 | ||||||||
| Share premium | 13,546 | 9,152 | 7,605 | ||||||||
| Merger relief reserve | 39,976 | 30,003 | 30,003 | ||||||||
| Retained earnings | 491,739 | 398,102 | 363,108 | ||||||||
| Other reserves | (8,515) | (5,514) | (10,907) | ||||||||
| Investment in own shares | (148) | (155) | (155) | ||||||||
| TOTAL | 537,751 | 432,723 | 390,788 | ||||||||
| TOTAL LIABILITIES AND EQUITY | 722,110 | 621,855 | 567,477 | ||||||||
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| Q3 FY2023 | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Nine Months Ended March 31 | Three Months Ended March 31 | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||
| £’000 | £’000 | £’000 | £’000 | |||||||||||
| OPERATING ACTIVITIES | ||||||||||||||
| Profit for the period | 71,105 | 56,054 | 24,358 | 20,103 | ||||||||||
| Income tax charge | 18,122 | 13,834 | 6,030 | 5,787 | ||||||||||
| Non-cash adjustments | 40,216 | 46,228 | 15,242 | 13,258 | ||||||||||
| Tax paid | (16,189) | (9,187) | (6,142) | (3,486) | ||||||||||
| Net changes in working capital | (22,063) | (33,322) | (14,428) | (16,926) | ||||||||||
| Net cash from operating activities | 91,191 | 73,607 | 25,060 | 18,736 | ||||||||||
| INVESTING ACTIVITIES | ||||||||||||||
| Purchase of non-current assets (tangibles and intangibles) | (11,804) | (10,195) | (4,213) | (2,797) | ||||||||||
| Proceeds from disposal of non-current assets | 148 | 241 | 132 | 70 | ||||||||||
| Payment for acquisition of subsidiary, net of cash acquired | (35,773) | (10,135) | (3,376) | (9,524) | ||||||||||
| Interest received | 1,851 | 65 | 1,054 | 45 | ||||||||||
| Net cash used in investing activities | (45,578) | (20,024) | (6,403) | (12,206) | ||||||||||
| FINANCING ACTIVITIES | ||||||||||||||
| Proceeds from sublease | 325 | 418 | 88 | 141 | ||||||||||
| Repayment of lease liabilities | (9,960) | (10,468) | (3,469) | (3,345) | ||||||||||
| Interest and debt financing costs paid | (3,532) | (695) | (3,109) | (220) | ||||||||||
| Grant received | 472 | 90 | 252 | 47 | ||||||||||
| Issue of shares | 4,398 | 7,366 | 2,132 | 3,067 | ||||||||||
| Net cash used in financing activities | (8,297) | (3,289) | (4,106) | (310) | ||||||||||
| Net change in cash and cash equivalents | 37,316 | 50,294 | 14,551 | 6,220 | ||||||||||
| Cash and cash equivalents at the beginning of the period | 162,806 | 69,884 | 185,323 | 114,176 | ||||||||||
| Exchange differences on cash and cash equivalents | (922) | 229 | (674) | 11 | ||||||||||
| Cash and cash equivalents at the end of the period | 199,200 | 120,407 | 199,200 | 120,407 | ||||||||||
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| Q3 FY2023 | |||||||
RECONCILIATION OF IFRS FINANCIAL MEASURES TO NON-IFRS FINANCIAL MEASURES
RECONCILIATION OF REVENUE GROWTH RATE AS REPORTED UNDER IFRS TO REVENUE GROWTH RATE AT CONSTANT CURRENCY:
| Nine Months Ended March 31 | Three Months Ended March 31 | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||
| REVENUE GROWTH RATE AS REPORTED UNDER IFRS | 27.5 | % | 51.7 | % | 20.3 | % | 50.7 | % | ||||||
| Foreign exchange rates impact | (6.5 | %) | 3.1 | % | (5.7 | %) | 0.2 | % | ||||||
| REVENUE GROWTH RATE AT CONSTANT CURRENCY | 21.0 | % | 54.8 | % | 14.6 | % | 50.9 | % | ||||||
RECONCILIATION OF ADJUSTED PROFIT BEFORE TAX AND ADJUSTED PROFIT FOR THE PERIOD:
| Nine Months Ended March 31 | Three Months Ended March 31 | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||
| £’000 | £’000 | £’000 | £’000 | |||||||||||
| PROFIT BEFORE TAX | 89,227 | 69,888 | 30,388 | 25,890 | ||||||||||
| Adjustments: | ||||||||||||||
| Share-based compensation expense | 24,135 | 27,542 | 8,226 | 6,626 | ||||||||||
| Amortisation of acquired intangible assets | 9,427 | 7,746 | 3,220 | 2,805 | ||||||||||
| Foreign currency exchange losses / (gains), net | 10,030 | (3,159) | 2,497 | (1,099) | ||||||||||
Restructuring costs (2) | 3,683 | — | 2,570 | — | ||||||||||
| Fair value movement of contingent consideration | (10,650) | — | (3,507) | — | ||||||||||
| Total adjustments | 36,625 | 32,129 | 13,006 | 8,332 | ||||||||||
| ADJUSTED PROFIT BEFORE TAX | 125,852 | 102,017 | 43,394 | 34,222 | ||||||||||
| PROFIT FOR THE PERIOD | 71,105 | 56,054 | 24,358 | 20,103 | ||||||||||
| Adjustments: | ||||||||||||||
| Adjustments to profit before tax | 36,625 | 32,129 | 13,006 | 8,332 | ||||||||||
| Tax impact of adjustments | (8,299) | (5,485) | (3,247) | (508) | ||||||||||
| ADJUSTED PROFIT FOR THE PERIOD | 99,431 | 82,698 | 34,117 | 27,927 | ||||||||||
| Diluted EPS (£) | 1.22 | 0.97 | 0.42 | 0.35 | ||||||||||
| Adjusted diluted EPS (£) | 1.71 | 1.43 | 0.59 | 0.48 | ||||||||||
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| Q3 FY2023 | |||||||
RECONCILIATION OF NET CASH FROM OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW
| Nine Months Ended March 31 | Three Months Ended March 31 | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||
| £’000 | £’000 | £’000 | £’000 | |||||||||||
| Net cash from operating activities | 91,191 | 73,607 | 25,060 | 18,736 | ||||||||||
| Adjustments: | ||||||||||||||
| Grant received | 472 | 90 | 252 | 47 | ||||||||||
| Net purchase of non-current assets (tangibles and intangibles) | (11,656) | (9,954) | (4,081) | (2,727) | ||||||||||
| Adjusted Free cash flow | 80,007 | 63,743 | 21,231 | 16,056 | ||||||||||
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| Q3 FY2023 | |||||||
SUPPLEMENTARY INFORMATION
SHARE-BASED COMPENSATION EXPENSE
| Nine Months Ended March 31 | Three Months Ended March 31 | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||
| £’000 | £’000 | £’000 | £’000 | |||||||||||
| Direct cost of sales | 15,996 | 17,020 | 5,699 | 4,345 | ||||||||||
| Selling, general and administrative expenses | 8,139 | 10,522 | 2,527 | 2,281 | ||||||||||
| Total | 24,135 | 27,542 | 8,226 | 6,626 | ||||||||||
DEPRECIATION AND AMORTISATION
| Nine Months Ended March 31 | Three Months Ended March 31 | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||
| £’000 | £’000 | £’000 | £’000 | |||||||||||
| Direct cost of sales | 13,242 | 12,171 | 4,616 | 4,147 | ||||||||||
| Selling, general and administrative expenses | 11,406 | 9,554 | 3,945 | 3,392 | ||||||||||
| Total | 24,648 | 21,725 | 8,561 | 7,539 | ||||||||||
EMPLOYEES, TOP 10 CUSTOMERS AND REVENUE SPLIT
| Six Months Ended December 31 | Nine Months Ended March 31 | Three Months Ended March 31 | ||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||
| Closing number of total employees (including directors) | 11,742 | 11,001 | 11,742 | 11,001 | ||||||||||
| Average operational employees | 10,960 | 9,167 | 10,818 | 9,851 | ||||||||||
| Top 10 customers % | 33% | 35% | 33% | 35% | ||||||||||
| Number of clients with > £1m of revenue (rolling 12 months) | 155 | 118 | 155 | 118 | ||||||||||
| Geographic split of revenue % | ||||||||||||||
| North America | 33% | 35% | 32% | 33% | ||||||||||
| Europe | 23% | 21% | 24% | 21% | ||||||||||
| UK | 39% | 41% | 38% | 43% | ||||||||||
| Rest of World (RoW) | 5% | 3% | 6% | 3% | ||||||||||
| Industry vertical split of revenue % | ||||||||||||||
| Payments and Financial Services | 52% | 51% | 53% | 51% | ||||||||||
| TMT | 22% | 25% | 21% | 25% | ||||||||||
| Other | 26% | 24% | 26% | 24% | ||||||||||
14
| Q3 FY2023 | |||||||
FOOTNOTES
(1) The Condensed Consolidated Balance Sheet as of March 31, 2022 has been restated to include the effects of IFRIC agenda decision on cloud configuration and customisation costs and to include the effect of revisions arising from provisional to final acquisition accounting for Five and Levvel (refer to note 3C from Endava's Annual Report on Form 20-F for the fiscal year ended June 30, 2022 for further details).
(2) Management has decided to exclude the impact of restructuring costs from profit before tax, costs which are one-off in nature. Restructuring costs of £3.7 million for the nine months ended March 31, 2023 include £1.1 million in costs related to the three months ended December 31, 2022.
15
Q3 FY2023 INVESTOR PRESENTATION
2 This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation, other than statements of historical facts, are forward-looking statements. The words “believe,” “estimate,” “expect,” “may,” “will” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, the statements regarding our business strategy and our plans and objectives for future operations, our addressable market and perceived growth over next five years, our assumptions regarding industry trends, potential technological disruptions, and client demand for our services. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including, but not limited to: our business, results of operations and financial condition may be negatively impacted by the Russia and Ukraine armed conflict or if general economic conditions in Europe, the United States or the global economy continue to worsen, including increased inflation and recent and potential future bank failures; and the perceived impact and effect of macroeconomic conditions on Endava and its customers including the March 2023 banking collapse; our ability to retain existing clients and attract new clients, including our ability to increase revenue from existing clients and diversify our revenue concentration; our ability to attract and retain highly-skilled IT professionals at cost-effective rates; our ability to penetrate new industry verticals and geographies and grow our revenue in current industry verticals and geographies; our ability to maintain favourable pricing and utilisation rates; our ability to successfully identify acquisition targets, consummate acquisitions and successfully integrate acquired businesses and personnel; the effects of increased competition as well as innovations by new and existing competitors in our market; our ability to adapt to technological change and innovate solutions for our clients; our ability to collect on billed and unbilled receivables from clients; our ability to effectively manage our international operations, including our exposure to foreign currency exchange rate fluctuations; our ability to remediate the identified material weaknesses and maintain an effective system of disclosure controls and internal control over financial reporting and our future financial performance, including trends in revenue, cost of sales, gross profit, selling, general and administrative expenses, finance income and expense and taxes, as well as other risks and uncertainties discussed in the “Risk Factors” section of our Annual Report on Form 20-F filed with the Securities and Exchange Commission (the “SEC”) on October 31, 2022. Except as required by law, we assume no duty to update any of these forward-looking statements after the date of this presentation to conform these statements to actual results or revised expectations. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this presentation. Moreover, except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements contained in this presentation. This presentation also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Neither we nor any other person makes any representation as to the accuracy or completeness of such data or undertakes any obligation to update such data after the date of this presentation. In addition, projections, assumptions and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk. By attending or receiving this presentation you acknowledge that you will be solely responsible for your own assessment of the market and our market position and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of our business. This presentation includes non-IFRS financial measures which have certain limitations and should not be considered in isolation, or as alternatives to or substitutes for, financial measures determined in accordance with IFRS. The non-IFRS measures as defined by us may not be comparable to similar non-IFRS measures presented by other companies. Our presentation of such measures, which may include adjustments to exclude unusual or non-recurring items, should not be construed as an inference that our future results will be unaffected by these or other unusual or non-recurring items. See the IFRS to Non-IFRS Reconciliation section for a reconciliation of these non-IFRS financial measures to the most directly comparable IFRS financial measures. Disclaimer
REIMAGINING THE RELATIONSHIP BETWEEN PEOPLE & TECHNOLOGY 3
We accelerate our clients’ ability to take advantage of new business models and market opportunities by ideating and delivering dynamic platforms and intelligent digital experiences that are designed to fuel rapid, ongoing transformation of their businesses. By leveraging next-generation technologies, our agile, multi-disciplinary teams provide a combination of Product & Technology Strategies, Intelligent Experiences, and World Class Engineering to help our clients become more engaging, responsive, and efficient. REIMAGINING THE RELATIONSHIP BETWEEN PEOPLE & TECHNOLOGY 4
5 1 Opportunity & Approach Q3 FY2023
6 WE ARE A LEADING NEXT-GEN TECHNOLOGY SERVICES PROVIDER AND HELP ACCELERATE DISRUPTION BY DELIVERING RAPID EVOLUTION TO ENTERPRISES. OUR PEOPLE SYNTHESIZE CREATIVITY, TECHNOLOGY, AND DELIVERY AT SCALE IN MULTI-DISCIPLINARY TEAMS, ENABLING US TO SUPPORT OUR CLIENTS FROM IDEATION TO PRODUCTION. FROM PROOF OF CONCEPT, TO PROTOTYPE, TO PRODUCTION, WE USE OUR ENGINEERING EXPERTISE TO DELIVER ENTERPRISE PRODUCTS AND PLATFORMS CAPABLE OF HANDLING MILLIONS OF TRANSACTIONS PER DAY. IN THIS NEW REALITY, WE’LL BUILD THE EXPERIENCES, TECHNICAL SCAFFOLDING, AND INFRASTRUCTURE DESIGNED TO ENABLE AN ENTIRELY NEW SET OF INTERACTIONS BETWEEN PEOPLE AND TECHNOLOGY. We enable change AS A RESULT OF THE RAPID SOCIAL CHANGES THE WORLD HAS BEEN FORCED TO ADAPT OVER THE LAST SEVERAL YEARS, BUSINESSES HAVE HAD TO SWIFTLY EVOLVE TO ENSURE THEY COULD CONTINUE TO OPERATE, WHILE MEETING A VERY DIFFERENT SET OF CUSTOMER EXPECTATIONS. IN THIS NEW REALITY, AN ORGANISATION’S ABILITY TO OPERATE PRIMARILY IN A DIGITAL LANDSCAPE MAY DICTATE ITS ABILITY TO BOTH SURVIVE AND SUCCEED. WE BELIEVE, MOVING FORWARD, TRUE DIGITAL TRANSFORMATION AND THE ESTABLISHMENT OF A FLEXIBLE BUSINESS MODEL WILL BECOME MISSION CRITICAL FOR BUSINESSES. The new reality
LARGE AND FAST GROWING MARKET OPPORTUNITY DELIVER RAPID EVOLUTION BY COMBINING NEXT-GEN TECHNOLOGIES WITH DEEP INDUSTRY EXPERTISE STRONG GROWTH AND FINANCIAL PERFORMANCE IDEATION TO PRODUCTION CAPABILITIES, DISTRIBUTED AGILE AT SCALE, DOMAIN EXPERTISE AND NEAR-SHORE LOCATIONS FOUNDER-LED, EXPERIENCED MANAGEMENT TEAM WITH STRONG CULTURE 7
8 TRADITIONAL IT SERVICES BUS. & TECH CONSULTANTS ENGINEERING ENTERPRISE AGILE AUTOMATION NEXT-GEN TECH STRATEGY
USER EXPERIENCE DIGITAL
AGENCIES
We serve a
large addressable market. * IDC Worldwide Digital Transformation Spending Guide, October 2022 update. 9 $3.4T 2026 16.3% FIVE-YEAR CAGR FOR DIGITAL
TRANSFORMATION
INVESTMENTS
10 ENDAVANS BY GEOGRAPHY FY19 FY20 FY21 FY22 Q3FY22 Q3FY23 Western Europe 254 448 493 602 594 614 Central Europe - EU Countries 3,062 3,368 4,469 6,093 5,549 5,974 3,316 3,816 4,962 6,695 6,143 6,588 Central Europe - Non-EU Countries 1,583 1,810 2,361 2,842 2,719 2,795 Latin America 780 895 1,244 1,927 1,786 1,762 North America 75 103 311 348 347 352 APAC 5 38 6 238 Middle East 3 - 7 5,754 6,624 8,883 11,853 11,001 11,742 Our people are at the heart of who we are and drive our success as
a business. We enable Endavans to be the best they can be, through our positive working experience ensuring everyone feels respected, included, and connected to our culture. 11,742 GLOBAL EMPLOYEES AS OF MAR 31, 2023 6.7% EMPLOYEE GROWTH Q3FY22 TO Q3FY23 37% WOMEN IN TOTAL STAFF AS OF MAR 31, 2023 2% 15%3% 24% 56% WESTERN EUROPE & EU EUROPE NON-EU NORTH AMERICA LATIN AMERICA APAC & MIDDLE EAST Q3FY23 ENDAVANS BY REGION
11 CLOSE TO CLIENT Australia Austria Canada Denmark Germany Ireland Netherlands Singapore
Switzerland United Kingdom United Arab Emirates United States NEARSHORE LOCATIONS European Union:
Bulgaria, Croatia, Poland, Romania and Slovenia
Central Europe:
Bosnia & Herzegovina, Moldova, North Macedonia and Serbia
Latin America:
Argentina, Colombia, Mexico and Uruguay Asia Pacific: Malaysia, Vietnam
64 cities
27 countries
12 HISTORY OF ENDAVA 11,742 FOUNDED IN COMPUDAVA ALPHEUS NICKELFISH PS TECH ISDC EXPAND
TO CE VELOCITY PARTNERSCONCISE UK IT CONSULTANCY 60 240 1,000 EXPAND
TO USA EXPAND
TO LATAM IPO NYSE JULY 2018 MOLDOVA
NEARSHORE
LOCATION GERMANY
CONSULTING BUSINESS USA
DIGITAL, UX
& STRATEGY
FIRM USA & LATAM
NA SALES & LATAM DELIVERY SERBIA
AGILE DELIVERY NETHERLANDS
& CE
AGILE DELIVERY 2,000 BAIN PARTNERSHIP ANNOUNCED HEADCOUNT Q3 FY23 INTUITUS UK
IT CONSULTANCY PRIVATE EQUITY EXOZET GERMANY DIGITAL AGENCY 2000 2023 COMTRADE DIGITAL SERVICES ADRIATIC REGION
SOFTWARE ENGINEERING SERVICES FIVE USA, CROATIA DIGITAL AGENCY LEVVEL USA TECH STRATEGY CONSULTING & ENGINEERING 5,000 LEXICON AUSTRALIA TECH CONSULTING, DESIGN & ENGINEERING MUDBATH AUSTRALIA TECH STRATEGY DESIGN & ENGINEERING
13 WE CREATE VALUE THROUGH THE DELIVERY OF
14 BUSINESS ANALYSIS DATA & ANALYTICS
DIGITAL PRODUCT STRATEGY PE DIGITAL & IT ADVISORY PROGRAMME MANAGEMENT TECHNOLOGY STRATEGY AUTOMATED TESTING. CLOUD NATIVE SOFTWARE ENG. CONTINUOUS DELIVERY . DISTRIBUTED AGILE DELIVERY INTELLIGENT AUTOMATION SECURE DEVELOPMENT AGILE APPLICATIONS MGMT CLOUD INFRASTRUCTURE
DEVSECOPS
SERVICE DELIVERY SMART DESK
TELEMETRY & MONITORING ARCHITECTURE EXTENDED REALITY MACHINE LEARNING & AI
PRODUCT DESIGN USER EXPERIENCE DESIGN VISUAL DESIGN
15 TODAY TIME TECHNOLOGY DISRUPTION WAVES & CONVERGENCE MOBILITY PAYMENTS RETAIL / CPG CAPITAL MARKETS HEALTHTECH INSURANCE
2012 2017 NOW 2030 2040+20352025 PAYMENTS INDUSTRY TRENDS OPEN BANKING REAL TIME PAYMENTS CRYPTO WALLETS INSTANT/DIGITAL ISSUING EMBEDDED
FINANCE DLT IN CROSS BORDER PAYMENTS CLOSED LOOP PAYMENT ECOSYSTEM ISO 20022 ADOPTION VERTICALLY-INTEGRATED PAYMENTS CROSS BORDER PAYMENTS MICROPAYMENTS BNPL BIOMETRIC PAYMENTS CDBC IN CAR PAYMENTS PAYMENTS IN METAVERSE ALL PAYMENTS INSTANT NO-CASH SOCIETY ZERO FRAUD PAYMENTS NO PHYSICAL TERMINAL FREE PAYMENTS PAAS SOFTPOS FREE ACQUIRING REQUEST TO PAY VARIABLE DIRECT DEBIT
2012 2017 NOW 2030 2040+20352025 AUTOMOTIVE INDUSTRY TRENDS FUEL ECONOMY INDIVIDUAL
CAR LEASING APPLE CARPLAY ANDROID AUTO SEMI-AUTONOMOUS DRIVING AIDS CAR SUBSCRIPTION USAGE-SPECIFIC INSURANCE INTELLIGENT ROUTING PARKING, TRAFFIC JAM 5G NEW ( INDUCTIVE) CHARGING INFRASTRUCTURE DIGITAL SALES PROCESS USING
AR AND VR IN-CAR ENTERTAINMENT MEDIA IN-CAR PAYMENTS FOR ELECTRICITY, PARKING, TOLLS PAYMENTS PROPRIETARY AUTOMOTIVE OS CONNECTED TO MOBILE PHONE DEALERSHIPS
EXPERIENCE CENTERS CAR-SHARING IN-CAR
COMMERCE RETAIL RIDE-HAILING (UBER) RISING ADOPTION OF PLUG-IN HYBRID EV CONNECTED TO SMART CITIES “HANDS OFF, MIND OFF” RISING ADOPTION OF BATTERY EV ELECTRIC-ONLY
DRIVE ZONES IN CITIES VEHICLE COMMUNICATION P2P CAR-SHARING AUTONOMOUS TRAFFIC MANAGEMENT ROBOTAXIS ZERO EMISSIONS ZERO ACCIDENTS
18 AS WE STRIVE TO BE THE ASPIRATIONAL BRAND FOR IT PROFESSIONALS IN THE REGIONS IN WHICH WE OPERATE, WE ATTRACT HIGH QUALITY TALENT. TO SUPPORT THIS GROWTH, WE NEED LEADERSHIP AND HAVE DEVELOPED THE ‘PASS IT ON’ INITIATIVE WHICH DRIVES LOYALTY AND LOWERS ATTRITION. WE USE TUCK-IN ACQUISITIONS TO ACCELERATE OUR GROWTH STRATEGY - TO EITHER ESTABLISH OURSELVES IN A NEW GEO OR TO ESTABLISH A NEW AREA OF EXPERTISE AND MARKET GROWTH. BRAND CULTURE M&A Scalability
19 ENDAVA’S FIVE KEY SUSTAINABILITY FOCUS AREAS
20 KEY SUSTAINABILITY COMMITMENTS OUR PEOPLE SOCIAL IMPACT OPERATING RESPONSIBILITY INNOVATION & DATA INTEGRITY ENVIRONMENTAL IMPACT We enable our people to be the best they can be by fostering an inclusive culture, providing career and progression opportunities, and supporting their wellbeing. We follow sound environmental practices to lower our energy footprint, reduce waste, choose greener infrastructures and equipment, and promote environmentally friendly ways of working. We help our clients to accelerate industry transformation by reimagining the relationship between people and technology, while safeguarding our clients’ privacy and protecting the assets entrusted to us according to industry standards. We contribute to the societies we are part of, and more broadly the Technology & Services industry, through community and fundraising activities in the areas of Education, Health and the Environment. We apply the highest standards of business conduct and ethics to work situations and strive to make the right decisions that benefit our people, inventors, customers, suppliers and society.
21 2 Financials Q3 FY2023
22 MASTER SERVICE AGREEMENTS WITH CLIENTS PRIMARILY T&M BASED PRICING LONG-TERM CLIENT RELATIONSHIPS STRONG REVENUE GROWTH HEALTHY MARGINS LOW CAPEX REQUIREMENTS POSITIVE ADJUSTED FREE CASH FLOW Financial
Highlights
23 STRONG REVENUE GROWTH FY18 FY19 FY20 FY21 FY22 _ FY22 FY23 203.5 169.2 205.2 157.7 196.2147.5654.8446.3351.0287.9217.6 CAGR 31.7% OVER THE LAST FIVE FISCAL YEARS, 88.6% OF OUR REVENUE, ON AVERAGE, EACH FISCAL YEAR CAME FROM CLIENTS WHO PURCHASED SERVICES FROM US DURING THE PRIOR FISCAL YEAR. FY18 JUNE 30 MARCH 31 9M22 9M23FY19 FY20 +20.3% YOY Revenue (£m) FY21 FY22 Q1 Q2 604.9 474.4 Q3
9M 24 FY18 FY19 FY20 FY21 FY22 _ FY22 FY23 30.4 25.9 20.3 19.1 38.624.9102.454.423.429.123.0 ROBUST PROFITABILITY FY18 FY19 FY20 FY21 FY22 _ FY22 FY23 43.4 34.2 43.033.0 39.534.8138.392.166.751.031.8 14.6% 19.2% 23.6%MARGIN FY18 FY19 17.7%14.7% FY18 JUNE 30MARCH 31 9M22 9M23FY19 FY20 FY20 19.0% MARCH 31 9M22 9M23 14.7% * See page 30 for reconciliation of IFRS to Non-IFRS metrics CAGR 44% Adjusted Profit Before Tax (£m)*Profit Before Tax (£m) 10.6%MARGIN 10.1% 6.7% FY21 12.2% FY21 20.6% FY22 15.6% 21.1% FY22 18.5 JUNE 30 Q1 21 5 20.8 9M Q1 Q2 89.2 69.9 Q212.1% 9.9% Q116.9% 19.7% 20.9% 20.9% Q2 23.6% 20.1% Q1 Q2 125.9 102.0 Q3 15.3% 14.9% Q3 Q3 20.2% 21.3% Q3
MARCH 31 DEEP CLIENT RELATIONSHIPS FY18 FY20 FY22 Q2FY22 15511813485656346 FY18 JUNE 30 FY19 FY20 25* Calculated on a 12 month rolling basis. No. of Clients / Revenue > £1m* FY21 Q3FY22 Q3FY23 MARCH 31 FY18 FY19 FY20 FY21 FY22 9M22 9M23 Q3FY22 Q3FY23 33%35%33%35%34%35%38%38%42% FY18 JUNE 30 FY19 Q3FY23FY20 Top 10 Clients Revenue % FY21 Q3FY22FY22 FY229M239M22
26 INCREASING NUMBER & SPEND OF CLIENTS FY18 FY20 FY22 Q3FY22 685717732615416275258 Total No. of Clients FY18 JUNE 30 FY19 FY20 Q3FY22 Q3FY23 MARCH 31 FY21 FY22 MARCH 31 FY18 FY19 FY20 FY21 FY22 9M22 9M23 Q3FY22 Q3FY23 336303770686841697647699597 Average Spend: REMAINING CLIENTS (£000s) FY18 JUNE 30 FY19 FY20 FY21 Q3FY22 Q3FY23FY22 9M22 9M23 MARCH 31 0 5538 11075 16613 22150 FY17 FY18 FY19 FY20 FY21 9M22 9M23 Q3FY22 Q3FY23 6,8205,84019,66016,47022,15015,59013,38010,8709,040 FY18 JUNE 30 FY19 FY20 FY21 Average Spend: TOP TEN CLIENTS (£000s) FY22 Q3FY22 Q3FY239M22 9M23
DIVERSE REVENUE BASE: GEOGRAPHY & INDUSTRY VERTICALS 26% 21% 53% PAYMENTS AND FINANCIAL SERVICES TECHNOLOGY, MEDIA & TELECOMMUNICATIONS OTHER REVENUE % BY VERTICAL Q3 FY23 FY18 FY19 FY20 FY21 FY22 _ Q3FY22 Q3FY23 6%3%3%3%3% 32%33%35% 31%29% 27% 21% 24% 21%21%24%24%28%34% 38%43%41%42%44%45%45% UK EUROPE N.AMERICA RoW * FY18 JUNE 30 MARCH 31 Q3FY22 Q3FY23FY19 FY20 27 * Other includes consumer products,
healthcare, mobility and retail verticals Revenue by Region 3% FY21 FY22 3% 6%3%3%
9M LOW CAPEX & POSITIVE ADJUSTED FCF 0.00 27.00 54.00 81.00 108.00 FY18 FY19 FY20 FY21 FY22 _ FY22 FY23 21.2 16.1 37.0 31.2 21.816.5107.282.731.529.828.7 FY18 FY20 FY22 FY22 4.12.7 4.23.8 3.43.513.75.27.36.13.7 FY18 9M22 9M23FY19 % OF REVENUE 13.2% 13.4% 13.2% FY18 JUNE 30 FY19 10.4%1.7% 2.1% 1.9%2.1% JUNE 30 MARCH 31 FY20 2.1% FY20 9.0% 28* See page 30 for reconciliation of IFRS to Non-IFRS metrics Capital Expenditures (£m) Adjusted Free Cash Flow (£m)* FY21 1.2% FY21 18.5% MARCH 31 9M22 9M23FY22 2.1% FY22 16.4% Q1 9M Q1 % OF REVENUE 2.4% 2.0% Q2 2.3% 1.7% Q1 Q219.8% 18.0% Q111.2% 11.1% Q2 11.7 10.0 Q2 63.7 80.0 Q3 1.6% 2.0% Q3 Q3 9.5% 10.4% Q3
3 Appendix Q3 FY2023 29
30 IFRS TO NON-IFRS RECONCILIATION 2020 2021 2022 2022 2023 2022 2023 Reconciliation of Revenue Growth at Constant Currency to Revenue Growth as Reported under IFRS Revenue Growth as Reported under IFRS 21.9 % 27.2 % 46.7 % 51.7 % 27.5 % 50.7 % 20.3 % Foreign exchange rates impact (0.9)% 2.4 % 0.9 % 3.1 % (6.5)% 0.2 % (5.7)% Revenue Growth at Constant Currency Including Worldpay Captive 21.0 % 29.6 % 47.6 % 54.8 % 21.0 % 50.9 % 14.6 % Impact of Worldpay Captive 3.2 % 0.8 % — — — — — Proforma Revenue Growth Rate at Constant Currency Excluding Worldpay Captive 24.2 % 30.4 % 47.6 % 54.8 % 21.0 % 50.9 % 14.6 % Reconciliation of Adjusted Profit Before Tax and Adjusted Profit for the Period £ in 000s Profit before Tax 23,364 54,368 102,379 69,888 89,227 25,890 30,388 Adjustments: Share based compensation expense 15,663 24,427 35,005 27,542 24,135 6,626 8,226 Discretionary EBT bonus 27,874 — — — — — — Amortization of acquired intangible assets 4,075 6,725 10,823 7,746 9,427 2,805 3,220 Foreign currency exchange (gains) / losses, net (2,054) 6,546 (9,944) (3,159) 10,030 (1,099) 2,497 Restructuring costs — 3,683 — 2,570 Fair value movement of contingent consideration — — — — (10,650) — (3,507) Net gain on disposal of subsidiary (2,215) — — — — — — Total Adjustments 43,343 37,698 35,884 32,129 36,625 8,332 13,006 Adjusted Profit Before Tax 66,707 92,066 138,263 102,017 125,852 34,222 43,394 Margin % (Adjusted Profit Before Tax as a percentage of Revenue) 19.0 % 20.6 % 21.1 % 21.5 % 20.8 % 20.2 % 21.3 % Profit for the Period 19,991 43,450 83,093 56,054 71,105 20,103 24,358 Adjustments: Adjustments to profit before tax 43,343 37,698 35,884 32,129 36,625 8,332 13,006 Tax impact of adjustments (8,787) (7,241) (6,933) (5,485) (8,299) (508) (3,247) Adjusted Profit for the Period 54,547 73,907 112,044 82,698 99,431 27,927 34,117 Reconciliation of Net Cash from Operating Activities to Adjusted Free Cash Flow Net Cash from Operating Activities 37,877 87,668 120,719 73,607 91,191 18,736 25,060 Adjustments: Grant received 888 228 139 90 472 47 252 Net purchase of non-current assets (tangible and intangible) (7,319) (5,236) (13,695) (9,954) (11,656) (2,727) (4,081) Adjusted Free Cash Flow 31,446 82,660 107,163 63,743 80,007 16,056 21,231 Margin % (Adjusted Free Cash Flow as a percentage of Revenue) 9.0 % 18.5 % 16.4 % 13.4 % 13.2 % 9.5 % 10.4 % SUPPLEMENTAL NON-IFRS FINANCIAL INFORMATION TWELVE MONTHS ENDED JUNE 30 NINE MONTHS ENDED MARCH 31 THREE MONTHS ENDED MARCH 31
