INVESTING TO CAPTURE THE HIGH GROWTH DX OPPORTUNITY FULL YEAR - PowerPoint PPT Presentation

INVESTING TO CAPTURE THE HIGH GROWTH DX OPPORTUNITY FULL YEAR RESULTS 2019

Highlights AGENDA Financial results The opportunity Market differentiators Progress on Strategic Priorities Questions Proprietary and Confidential

FULL YEAR HIGHLIGHTS Investing for growth + Continued progress winning and growing new clients in the fast-growing 
 digital transformation (‘DX’) market + Ongoing double-digit growth in the Innovation pillar , now comprising 56% of group net revenue + Repositioned Strategy pillar, launching Kin + Carta Advisory in September, 
 executing ahead of plan and driving pipeline for all three pillars + Continued repositioning of the Communications pillar to drive more DX wins 
 and streamline operations + Launched central marketing, sales and partnerships with accelerating contributions to growth; 
 Connective gaining traction with 40 new closed deals during the year + Geographic expansion with four new offices launched bringing all three pillars to the US for the first time + Expanded capabilities with key client wins focused on Artificial Intelligence 
 and Cloud Transformation Proprietary and Confidential

FINANCIAL 
 RESULTS

FINANCIAL HIGHLIGHTS & OVERVIEW 1500 EMPLOYEES ACROSS 11 OFFICES ON 4 CONTINENTS + Net revenue of £148.0m; up 2% on NET REVENUE BY NET REVENUE BY NET REVENUE BY like-for-like working days CAPABILITY REGION SECTOR (8%) + Double-digit growth in Innovation (35%) (17%) 7% which now comprises 56% of group 16% (40%) 19% 28% 29% net revenue 46% 9% 47% + 13% Adjusted Operating Margin of 8% 12% 56% net revenue, inclusive of incremental 23% (52%) (48%) £3m growth investment Financial Services Retail and Distribution Strategy US Industrials and Agriculture Innovation UK + Net debt of £38.4m (FY18 £26m); Transportation Communication Rest of World Healthcare Leverage ratio 1.68x (FY18 1.1x) Other Proprietary and Confidential

FINANCIAL SUMMARY FY 2018 FY 2019 % FX FY 2018 £M INCOME STATEMENT £M CHANGE IMPACT £M (Like-for-like billing days) Revenue 172.9 173.6 (0)% 2% 178.4 Net Revenue Net revenue* 148.0 145.7 2% 2% 149.7 includes a mix shift to Innovation and 19.9 20.6 (3)% 21.2 Operating profit* 2% the US 13.4% 14.1% (70) bps 14.1% Profit before tax* 17.6 18.0 (2)% - 18.5 RESULTS INCLUDE Adjusting items (15.8) - (68)% - (49.6) c £3M Statutory profit/(loss) 1.8 - - - (31.2) INVESTMENTS before tax IN GROWTH Earnings per share* 9.22p - (9)% - 10.10p Full year dividend 1.95p - - - 1.95p Includes 1.30p final dividend *Adjusted Results from continuing operations Proprietary and Confidential

CASH FLOW INFLOW OUTFLOW TOTAL £m 30 22.5 6.8 15 4.3 2.6 7.2 2.0 3.0 22.1 7.5 15.3 d 12.7 12.6 10.9 9.7 10.6 9.7 9.7 19.9 0 -9.3 -9.3 d -7.5 -15 Adjusted 
 Working Tax and Capex Underlying Disposal of Defined Benefits 
 Restructuring Deferred 
 FCF EBITDA Capital Interest FCF Properties Pension Scheme Consideration EBITDA adjusted for non-cash items Proprietary and Confidential

BALANCE SHEET PENSION SURPLUS 31 JULY 2019 03 AUG 2018 £6.7M £M £M Fixed Assets 10.5 10.8 Goodwill and Intangibles 111.2 116.2 LEVERAGE 1.68X Net Asset Held for Sale – 5.3 Pension 6.7 1.9 Working Capital 3.1 (3.4) Sold former work site for Income Taxes (1.8) 0.8 £7.2M Net Debt (38.4) (26.0) Deferred Tax (1.3) (3.0) Deferred consideration: Deferred Consideration (2.0) (21.2) £19.9M FY19 Net Assets 88.0 81.4 £2.0M FY20 Proprietary and Confidential

OUTLOOK + Growth is Innovation led with Strategy and Communications improving + Investments driving higher net FY20 MEDIUM TERM revenue; accelerating into H2 FY20 12-14% NET REVENUE 10-12% GROWTH * + Double digit net revenue growth FY20 + Double digit operating margins FY20 + Both net revenue growth and operating OPERATING 
 12-13% 13-14% MARGIN * margin increase into low teens over the FY20 and future periods include a favourable £1.0m impact, or +50 bps, to OM% related medium term to the adoption of IFRS16, offset by higher interest expense of £1.1m + Net debt 1-2x EBITDA depending on NET DEBT TO 1.5-1.75X 1-2X opportunities EBITDA* *Adjusted Results from continuing operations Proprietary and Confidential Proprietary and Confidential

THE OPPORTUNITY

INVESTMENT OPPORTUNITY + Incentivised, dynamic leadership with a strategic vision for growth, both organic and by acquisition + Clear integrated approach to DX market – ‘Connective’ of Innovation, Strategy and Communications – attractive to top talent, relevant for clients and more valuable than a portfolio-led approach + Core Innovation business established in DX, growing fast (double digit) in both the US and in the UK (two of the biggest economies in the world) and positioned to expand into other regions + Further alignment with DX proposition – brand consolidation and move to higher margin work – will drive increased value from Strategy and Communications + Scale of 1500+ employees allows us to compete for industry’s largest and most valuable contracts + Industry depth in Financial Services, Healthcare, B2B, Transportation and Agriculture represent the industries with greatest DX opportunity Proprietary and Confidential

OUR EXPANDING BLUE CHIP CLIENT BASE FINANCIAL 
 RETAIL AND INDUSTRIALS AND TRANSPORTATION HEALTHCARE SERVICES DISTRIBUTION AGRICULTURE NEW DX REMITS Proprietary and Confidential

LONGEVITY, STABILITY AND PREDICTABILITY Our client base has shown to award us repeat business and enable our long term growth CLIENT SPEND (%) CLIENT LONGEVITY REVENUE PREDICTABILITY (%) 56% 80% 100.0 Total Revenue £’m less than 2 years 22 (% of total revenue base) 60% 75.0 20 2 years or more 40% £'m 50.0 97 22% 25 4 years or more 20% 10% 12% 25.0 37 0% 33 20 6 years or more 18 2016 2017 2018 2019 0.0 Potential Annual Clients Annual Clients Top10 Top20 Top30 Top100 Annual/ Project Top 100 Clients 3+ Years 2+ Years Repeats Proprietary and Confidential

CASE STUDIES A collection of recent work: + Deploying AI for competitive advantage + Modernising the legacy enterprise with cloud transformation + Driving valuations for Private Equity through DX

CORTEVA + AI USING AI TO IMPROVE CROP YIELDS + $14Bn revenue agriscience business spun out of Dow Dupont + Engaged Kin + Carta in a multi-year program to build suite of tools for employees and growers for managing crops + Recent work has evolved into using our advanced machine learning and decision intelligence capabilities + Most recent launch of Pioneer Seeds provides ability to estimate crop yields by taking pictures of ears of corn, improving accuracy and efficiency by over 400% Key Partners: Proprietary and Confidential 15 Proprietary & Confidential

DISCOVER + CLOUD RE-ENGINEERING THE ENTERPRISE FOR THE CLOUD + $25Bn market cap financial services firm + 8 year relationship has evolved as digital has evolved + Most recently helping Discover reengineer their core systems for the cloud + Utilising our proprietary FleXP model for cloud transformation, our fastest growth area Key Partners: Proprietary and Confidential 16 Proprietary & Confidential

PRIVATE EQUITY + DX DRIVING VALUATION THROUGH DX + Partnered with PE firm Cinven to help transform newly acquired JLA from analog to digital business + Kin + Carta Advisory set DX strategy including target operating models, data strategy and digital product strategy + K+C innovation and communication pillars on the path to implementing transformation program + Articulates opportunity for private equity to increase business valuation multiples by applying DX Key Partners: Proprietary and Confidential 17

PROGRESS AGAINST STRATEGIC PRIORITIES

STRATEGIC PRIORITY 01 GROWTH* We will accelerate growth through the continuous optimisation of a highly measurable, integrated and scalable demand generation machine. FY19 FY20 + Stood up new central demand + Optimize central demand KEY KPI: function including central sales, around our key sectors NET REVENUE OF marketing, partnerships and lead £148M 
 + Scale partnership function in and generation teams both the US and the UK + Signed over 40 cross-specialism (+2%) + Increase central demand net deals through central demand in revenue contribution by > first year, valued at over £11 50%. million in new net revenue *encompasses old priority “Scaling our sales function” Proprietary and Confidential