FDM Group (Holdings) plc Results for the year ended 31 December 2017 Rod Flavell - CEO Mike McLaren - CFO
2017 Operational highlights Strong operational performance…… New Clients Mounties on Client Site +47% (at year end) 72 2017 3,170 +17% 49 2016 +8% 2,705 (CAGR) 65 2015 +27% 57 (CAGR) 2014 2,022 1,539 Training Completions -10% 1,626 2017 1,807 2016 +20% 2014 2015 2016 2017 (CAGR) 1,240 2015 938 2014 Utilisation Training Completion Distribution -0.1 ppts. 98.4% 97.8% 97.4% 97.3% 46% 54% 2017 H1 40% 60% 2016 45% 55% 2015 H2 43% 57% 2014 2014 2015 2016 2017 CAGR (Compound Annual Growth Rate) applied over three years
2017 Financial highlights …. reflected in strong financial performance Mountie Revenue (£m) Adjusted Operating Profit (£m) Closing Cash (£m) +24% +26% + 32 % 47.3 36.8 2017 2017 37.6 27.8 2016 2016 +33% +24% +44% 207.3 (CAGR) (CAGR) (CAGR) 30.2 2015 22.4 2015 24.9 2014 12.3 2014 167.3 Adjusted Basic Earnings per Share (£p) Adjusted Cash Conversion 119.4 +26% -2.7 32.6 102.2% 2017 2017 25.8 2016 104.9% 2016 +23% ppts. (CAGR) 21.0 2015 121.3% 2015 88.9 17.5 2014 101.1% 2014 Dividend per Share (£p) Effective Tax Rate +33% +0.8 26.0 26.7% 2017 2017 19.6 25.9% 2016 2016 +51% ppts. (CAGR) 21.5 2015 25.0% 2015 7.5 2014 28.9% 2014 2014 2015 2016 2017 CAGR (Compound Annual Growth Rate) applied over three years
Geographic Review UK & Ireland 2017 2016 North America 2017 2016 Revenue £131m £113m +16% Revenue £75m £57m +32% Mountie revenue £107m £94m +14% Mountie revenue £74m £54m +36% Mounties on client sites 1,744 1,505 +16% Mounties on client sites 965 832 +16% Adjusted operating profit £31.5m £27.8m +13% Adjusted operating profit £15.3m £9.3m +65% Adjusted operating profit margin -1% 24% 25% Adjusted operating profit margin 20% 16% +4% UK&I saw largest increase by UK government Mounties placed up by Adjusted operating profit increase 12 new clients won during the year region 82% to 315 reflects benefits of operational gearing Currently expanding the Toronto operations Adjusted operating profit margin decrease reflects higher level of contractor business EMEA 2017 2016 APAC 2017 2016 Revenue £13m £12m +8% Revenue £14m £8m +84% Mountie revenue £13m £12m +9% Mountie revenue £14m £7m +90% Mounties on client sites 155 135 +15% Mounties on client sites 306 233 +31% Adjusted operating profit £0.9m £1.2m -25% Adjusted operating loss (£0.3m) (£0.7m) +57% Adjusted operating profit margin 7% 10% -3% Adjusted operating loss margin -2% -9% +7% Investment in Frankfurt academy Proactive approach to new labour 8 new clients won during the year Continued diversification of services increased capacity by 140% leasing laws in Germany to existing customers Investment in Singapore and Austrian branch opened to service Australia, first Mounties placed in demand in the region Australia during the year
Regional Distribution Revenue outside the UK and Ireland continues to grow and now represents 49% of total Mountie revenue Academy Capacity Mountie Revenue Regional Distribution 777 49% 710 44% 7% 4% 38% 6% 522 3% 7% 31% 452 9% 2% 8% 36% 32% 26% 20% Dec-14 Dec-15 Dec-16 Dec-17 2014 2015 2016 2017 NA EMEA APAC UK&I NA EMEA APAC
Mountie Headcount Good growth in Government Sector; Ex-Forces and Getting Back to Business programmes now comprise over 10% of Mountie headcount Industries 2017 2016 0.8% 1.6% 36% 36% Banking - Investment 13% 12% Financial Services 7.0% 10% 8% Government 8.9% 10% 11% Banking - Retail 5% 5% Banking - Corporate 4% 4% Insurance Dec 17 3% 3% Consulting 3% 3% Media & Entertainment 92.2% 3% 3% Energy & Resources 89.5% 2% 2% Technology 11% 13% Other 2017 2016 Other includes: • Retail • General banking – shared • Systems Integration service centre Getting Back to Business • Banking - Building Society • Technology – financial services Ex-Forces • Travel and Tourism • Software houses • Logistics and Distribution Graduates • Gambling & Betting activities 10% Getting Back Ex-Forces of headcount is to Business now outside of 2017 2016 2017 2016 graduates: 281 190 50 22
Top Clients by Headcount Sustained growth coming from the Home Office, RBC, Deutsche Bank and Standard Chartered 2,500 2,000 1,500 1,000 500 - Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Home Office DWP Other Government HSBC Barclays Fannie Mae RBC BNP Paribas TD Morgan Stanley Deutsche Bank UBS Bank of America BMO Standard Chartered Bank Aviva National Grid BskyB Royal Bank of Scotland Virgin Media Lloyds Banking
Service Divisions by Headcount Business Analysis and PMO both grew by over 100 heads over the last 12 months. Encouraging growth in technical streams, particularly Development, Business Intelligence and Murex 3,500 3,000 2,500 2,000 1,500 1,000 500 - Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Development PMO ITSM Testing Business Analysis Data and Operational Analysis Business Intelligence Salesforce Murex Cyber security
Market Trends and Drivers FDM’s robust business model places us well to fulfil growing market demand for tech talent across the globe $3.7tr • Global IT spending projected to reach $3.7 Trillion in 2018 (Gartner) • Growing to almost $4tr by 2021 (Gartner) Geopolitical Market Drivers Transformational Trends • Global uncertainty • Ageing IT population • In 2017, the average business saw an increase in cyber breaches of nearly 1500% compared to 2016 • Brexit • 75% of the global workforce will consist of • Big Data Analytics will be worth £241 billion to the UK • GDPR economy by 2020 millennials by 2025 • US political scene • Process automation – the • $15.7 trillion global GDP uplift by 2030 as a result of AI • Regulatory oversight next big thing? technologies, with half of those gains coming from increased increase labour productivity • US visa earnings • The ‘new way of requirements • Regulatory/compliance risk sited as among the top three risk working’ types that will increase in importance over the next two years • UK IR35 changes for financial services • Digital transformation • PwC estimates that 45% of work activities can be automated
Market Trends and Drivers (cont.) FDM’s robust business model places us well to fulfil growing market demand for tech talent across the globe 500,000 • Shortages of IT specialists forecast to reach c.500,000 by 2020 (Empirica) Demand Challenges Supply • 40% of employers worldwide face • Education costs are rising around the • 160+ UK Universities (FDM recruited talent shortages, driven by IT world and so are student loans: from 120 of these in 2017) increasing debts • Lack of women in tech is hindering • 4,700+ US and CA universities (FDM industry growth • Inexperienced and overqualified pool of recruited from 248 of these in 2017) talent • More than 50% of employers now • Computer Science graduates face some train and develop existing • Different generations have different of the highest rates of unemployment employees to fill open positions - up expectations: shifting mind-sets in the UK compared with graduates of from just 20% in 2015 other subjects. • Minorities have degrees but don’t get • The UK adds 104,000 technology hired at the same rate: inequality • Graduates with a bachelor's degree or jobs to the economy each year higher in the US are facing an unemployment rate of only 2.5%
CSR & Inclusivity ~50% 0.0% 48% 75+ 81 of our 0% median gender pay of UK intake in 2017 nationalities working management gap in the UK were from a BAME* together as a team are female (UK average of 18.4%) background at FDM *Black, Asian or Minority Ethnic Social Mobility Ex-Forces and Veterans Returners to Work 450+ 32% 86% 65+ of UK intake in 2017 were of FDM’s UK graduate former service men and women careers restarted through have been placed through the the first in their family to intake in 2017 attended the Getting Back to Business go to university a state school programme in the UK and US Programme in the UK since its inception and APAC
Achievements The Guardian UK 300 – Awarded Company of the The 6th company in the UK Recognised as a Top 50 Most Popular Graduate Year at the TechWomen50 to release its gender pay gap Employer in the UK Social Employers for 2017/18 Awards 2017 reporting figures 2017 Mobility Index 2017 Featured in the Business in The Herald & GenAnalytics A Military Times Best for Vets Honoured to receive the the Community Best Employers Diversity Star Performer Employer and RecruitMilitary Most MoD Employer Recognition Scheme for Race Listing 2017 of the Year 2017 Valuable Employers (MVE) for (ERS) Gold Award 2017 Military 2017
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