FDM Group (Holdings) plc Results for the year ended 31 December 2019 - - PowerPoint PPT Presentation

FDM Group (Holdings) plc

Results for the year ended 31 December 2019 Rod Flavell - CEO Mike McLaren - CFO

+11%

+13% (CAGR)

+7%

+13% (CAGR)

+7%

+15% (CAGR)

+15%

+21% (CAGR)

+9%

+10% (CAGR)

+7.5ppts.

• 0.6ppts.

Adjusted Operating Profit (£m) Adjusted Basic Earnings per Share (p) Ordinary Dividend per Share (p) Closing Cash (£m) Cash Conversion (%) Effective Tax Rate (%) Total Revenue (£m)

Highlights for the year ended 31 December 2019

Page 1

38.0 47.7 51.8 55.2 2016 2017 2018 2019 27.8 36.8 33.9 37.0 2016 2017 2018 2019 25.9% 26.7% 23.3% 22.7% 2016 2017 2018 2019 19.6 26.0 30.0 34.5 2016 2017 2018 2019

+12%

+17% (CAGR)

Mountie Revenue (£m)

+9%

+16% (CAGR)

Basic Earnings per Share (p)

CAGR (Compound Annual Growth Rate) applied over three years

• ppts. (percentage points)

Comparative figures have been restated for IFRS 16 Leases During 2019 the Group purchased £3.0m of its own shares which are held in an Employee Benefit Trust and are used to satisfy share awards under employee share option schemes 167.3 207.3 239.0 268.2 2016 2017 2018 2019 189.4 233.6 244.9 271.5 2016 2017 2018 2019 25.5 32.3 36.3 38.8 2016 2017 2018 2019 119.0% 117.8% 100.9% 108.4% 2016 2017 2018 2019 24.0 29.5 34.2 37.3 2016 2017 2018 2019

CAGR (Compound Annual Growth Rate) applied over three years

• ppts. (percentage points)

+97

Mountie Utilisation

• 2%

+5% (CAGR)

+5%

+13% (CAGR)

Mounties on Client Site New Clients Training Completions

• 1.2ppts.

Page 2

2,705 3,170 3,747 3,924 4,000+ 2016 2017 2018 2019 Mar-20 97.4% 97.3% 97.3% 96.1% 2016 2017 2018 2019 49 72 77 97 2016 2017 2018 2019 1,807 1,626 2,155 2,115 2016 2017 2018 2019

Highlights for the year ended 31 December 2019

Number of Clients

+4%

+6% (CAGR)

345 376 393 409 2016 2017 2018 2019 55% 55% 54% 49% 31% 30% 32% 32% 5% 5% 4% 6% 9% 10% 10% 13% 2016 2017 2018 2019 UK & I NA EMEA APAC

Mountie Headcount on Client Site by Region

Adjusted operating loss increase reflects ongoing investment in state-of- the-art Sydney Academy, which became operational in February 2019 Australian headcount increased by 64, an increase of 133% over 2018 Pop-up Academies operated in Beijing and Shanghai to provide local training

APAC 2019 2018*

Revenue £22.6m £18.3m +23% Mountie revenue £22.3m £18.0m +24% Mounties on client sites 497 385 +29% Adjusted operating loss

• £1.3m
• £0.4m
• 225%

Adjusted operating loss margin %

• 6%
• 2%
• 4%

Luxembourg headcount continues to grow steadily The Netherlands had 51 Mounties placed at year end, sourced and trained locally at our Rotterdam pop-up Academy

EMEA 2019 2018*

Revenue £16.0m £13.5m +19% Mountie revenue £16.0m £13.5m +19% Mounties on client sites 240 162 +48% Adjusted operating profit £2.2m £1.4m +57% Adjusted operating profit margin % 14% 10% +4% Increased training capacity and Mountie placements at the Austin and Charlotte centres Presence widened in insurance, retail and professional services

North America 2019 2018*

Revenue £96.0m £82.1m +17% Mountie revenue £95.7m £81.4m +18% Mounties on client sites 1,277 1,196 +7% Adjusted operating profit £16.5m £13.8m +20% Adjusted operating profit margin % 17% 17% 0% Strong insurance and banking sector performance Pop-up training centres operated in Birmingham, Cardiff and Dublin during the year

UK & Ireland 2019 2018*

Revenue £136.9m £131.0m +5% Mountie revenue £134.2m £126.1m +6% Mounties on client sites 1,910 2,004

• 5%

Adjusted operating profit £37.8m £37.0m +2% Adjusted operating profit margin % 28% 28% 0%

Market Review

Page 3

46 new clients gained, 76% of which were from outside the financial services and banking sector Hong Kong saw strong growth, despite the social and political disruption *2018 figures restated for IFRS 16 Leases Reflecting a change in management reporting, 30 Mounties included within UK&I Mounties deployed as at 30 June 2019 have been re-allocated to EMEA Mounties deployed as at 31 December 2019 Pop-up Academy opened in Herndon following end of Reston lease. Montreal pop-up Academy supported good performance in Canada 17 new clients won in the year, primarily in banking and financial services Banking and financial services improved in H2 after slow Q2 Reduced demand from UK Government Ministerial Departments reflecting uncertainty ahead of Brexit and potential political leadership changes

57% 51% 53% 50% 32% 36% 34% 36% 7% 6% 6% 6% 4% 7% 7% 8% £167.3m £207.3m £239.0m £268.2m Dec-16 Dec-17 Dec-18 Dec-19 UK&I NA EMEA APAC

Regional Distribution

Mountie Revenue Regional Distribution Academy Capacity

Page 4

Pop-up Training Completions

55% 50% 42% 40% 36% 34% 36% 26% 3% 6% 5% 5% 6% 9% 7% 15% 1% 10% 14% 710 789 938 988 Dec-16 Dec-17 Dec-18 Dec-19 UK&I NA EMEA APAC Pop-up

APAC permanent academy capacity increased 109% due to the opening of the Sydney Academy. NA decreased 24% due to the conversion of the Reston Academy into a pop-up centre in Herndon.

47% 26% 22% 47% 31% 9% 19% 69% 22% 8%

• 36

175 272 2016 2017 2018 2019 UK&I NA EMEA APAC

Dec-19

Banks Diversified Financials Software & IT Services Insurance Government Energy Media & Entertainment Commercial & Professional Services Transportation Utilities Other

Mountie Headcount

Industries 47% 16% 8% 7% 7% 4% 3% 2% 1% 1% 4% 2019 Other includes

• Consumer Services
• Food & Staples Retailing
• Automobiles & Components
• Health Care Equipment & Services
• Retailing
• Not for Profit
• Telecommunication Services
• Pharmaceuticals, Biotechnology &

Life Sciences

2018 46% 17% 9% 5% 10% 2% 3% 2% 2% 1% 3%

Getting Back to Business 2018 94 2019 108 Ex-Forces 2018 280 2019 249

Page 5

6.3% 90.9% 2.5% 7.5% 90.0%

2019 2018

Getting Back to Business Ex-Forces Graduates

Banks and Diversified Financials sectors headcount has remained broadly constant

2.8% Industry classification as per Standard & Poor’s ‘Global Industry Classification Standard’ (GICS) with the addition of a “Government” and “Not for Profit” sector

Regions by Headcount

Page 6

Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19

• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 UK & Ireland North America EMEA APAC

Top Sectors by Headcount

Page 7

Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19

• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Banks Diversified Financials Software & IT Services Insurance Government Energy Media & Entertainment Commercial & Professional Services Transportation Other

Top Clients by Headcount

Page 8

• 500

1,000 1,500 2,000 2,500 3,000 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 HSBC RBC TD Other Government Shell DWP Fannie Mae Lloyds Bank Of America JPMorgan Morgan Stanley Deutsche Bank Manulife BNP Sky BMO Standard Life Barclays UBS Credit Suisse Home Office British Airways

Service Divisions by Headcount

Page 9

• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Development PMO ITSM Testing Business Analysis Data and Operational Analysis Business Intelligence Murex Robotic Process Automation Salesforce Cyber security

53%*

are from a BAME** background

85+

nationalities working together as a team at FDM

CSR & Inclusivity ~55%

• f the FDM Management

Team are female

Social Mobility

40%*

were the first in their family to go to university

88%*

attended a state school

720+

former service men and women have been placed through the programme since its inception

Ex-Forces

190+

careers restarted through the FDM Getting Back to Business programme since inception

Returners to Work

Page 10

• 1.7%

UK business reported a 0.0% median gender pay gap for 2017 and 2018

* of our UK graduate consultant respondents 2019 ** Black, Asian or Minority Ethnic

Nationalities Median Pay Gap Gender Ethnicity Disability

4%

• f FDM UK graduate consultants

consider themselves to have a disability

At FDM, diversity and inclusion starts at the top. It is ingrained into the FDM culture and championed by the leadership team

Recognition 2019

Page 11

Agents of Change PowerList CEO Rod Flavell Best forVets Employer Megabuyte Quoted25 Companies The JobCrowd’s Top 100 Companies For Graduates To Work For Top 100 Most Popular Graduate Employers Female Grad Tech Employer

• f the Year

FDM COO, Sheila Flavell, Awarded a CBE Best Contribution to Student Career Development Gold Award for the 2019 HIRE Vets Medallion Program Social Mobility Foundation – Top 75 Social Mobility Employer Index 2019 Yahoo Finance Heroes 40 Advocate Executives of 2019 NUE Awards Top 100 Undergraduate Employer

Forward-looking statements These slides contain statements which constitute “forward-looking statements”. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to be correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements

CEO’s Statement

Page 12

“The strength and flexibility of our business model enabled FDM to deliver a solid performance in 2019 against a backdrop of challenging conditions in certain of our markets. 2020 has started promisingly and in line with management expectations, with strong levels of client activity and demand. We anticipate a further year of good operational and financial progress. The Coronavirus is presenting us with a range of challenges relating to remote working, attendance on client sites and mobility for our trainers; the financial impact to date of these has not been significant, but we continue to monitor the situation closely.”

2019 2018 £000 £000 Revenue 271,529 244,910 Cost of sales (139,953) (125,875) Gross profit 131,576 119,035 Administrative expenses (78,401) (70,210) Operating profit 53,175 48,825 Finance income 194 140 Finance expense (886) (763) Net finance expense (692) (623) Profit before income tax 52,483 48,202 Taxation (11,856) (11,252) Profit for the period 40,627 36,950

Income Statement

for the year ended 31 December 2019

Page 13

2018 comparative figures have been restated for IFRS 16 Leases

2019 2018 £000 £000 Non-current assets Right-of-use assets 17,832 14,045 Property, plant and equipment 6,789 6,117 Intangible assets 19,799 19,409 Deferred income tax assets 1,732 2,692 46,152 42,263 Current assets Trade and other receivables 39,937 37,152 Cash and cash equivalents 36,979 33,907 76,916 71,059 Total assets 123,068 113,322 Current liabilities Trade and other payables 22,737 23,070 Lease liabilities 5,680 4,656 Current income tax liabilities 2,105 3,166 30,522 30,892 Non-current liabilities Lease liabilities 17,482 13,485 17,482 13,485 Total liabilities 48,004 44,377 Net assets 75,064 68,945

Statement of Financial Position

as at 31 December 2019

Page 14

2018 comparative figures have been restated for IFRS 16 Leases

2019 2018 £000 £000 Cash flows generated from operations 57,662 49,282 Interest received 194 140 Income tax paid (11,009) (11,407) Net cash flow from operating activities 46,847 38,015 Cash flows from investing activities Acquisition of property, plant and equipment (2,771) (2,684) Acquisition of intangibles assets (321) (16) Net cash used in investing activities (3,032) (2,700) Cash flows from financing activities Proceeds from issuance of ordinary shares 9 8 Proceeds from sale of shares from EBT 271

• Principal elements of lease payments

(4,828) (3,732) Interest elements of lease payments (827) (632) Lease incentives received 1,930

• Payment for shares bought back

(2,958) (3,664) Finance costs paid (59) (94) Dividends paid (34,113) (30,718) Net cash used in financing activities (40,575) (38,832) Exchange (losses)/ gains on cash and cash equivalents (168) 578 Net increase/ (decrease) in cash and cash equivalents 3,072 (2,939) Cash and cash equivalents at beginning of period 33,907 36,846 Cash and cash equivalents at end of period 36,979 33,907

Statement of Cash Flows

for the year ended 31 December 2019

Page 15 Page 15

2018 comparative figures have been restated for IFRS 16 Leases