Investor Presentation Full Year Results to 31 March 2019 Chris Clark Dave Wilson CEO CFO & COO
GBG at a Glance In a world where we GBG helps organisations Organisations use GBG to To do this GBG accesses increasingly transact with quickly validate and verify offer a better user data from a broad range people we never meet, GBG the identity and location of experience, protect of global partners using establishes trust between their customers themselves from fraud, innovative technology to businesses and their and ensure regulatory help clients easily verify customers compliance customer identity and location and detect fraud 2 Investor Presentation June 2019
Operational Highlights Growth is balanced and diversified People Customers Products Brand Good new business and 90% of employees • • Broadened our data portfolio • Launch of Loqate • international expansion recommend GBG as a great Exciting product innovation • place to work Identity Capital Markets • Location: Kohls, eBay, • Sephora, Paul Valentine, Senior team members • Nearly 1,000 employees • N26, HelloFresh appointed 16 countries in which GBG • Identity: Revolut, Lyft, • operates Coinbase Further developed learning • Fraud: Krunthai Card, • and development BNI, PPmoney, Bank of Technology programme Acquisitions Communications, Discover Financial Services Investment in micro- • IDology • services, common APIs, UI, Diverse and growing • VVG and Info Sec • range of customers globally Cloud operational model • with AWS New CIO • 3 Investor Presentation June 2019
Performance Highlights Strong international growth and trading performance. Adjusted Revenue from Active Customers Revenue operating profits 1 International customers £143.5m 45% >19k £32.0m 2018: £119.7m 19.9% ▲ 2018: £26.3m 21.7% ▲ 2018: 34% 2018: >17k Employees who Basic adjusted Operating margin recommend GBG as a EPS 2 good/great place to work 22.3% 18.2p 90% 2018: 15.3p 19.0% ▲ 2018: 22.0% 2018: 85% 1 Adjusted operating profit means profits before amortisation of acquired intangibles, share-based payments, exceptional items, net finance costs and tax. 2 Basic Adjusted EPS is adjusted operating profit less net finance costs and tax divided by the weighted average number of shares in issue. 4 Investor Presentation June 2019
GBG acquired IDology for $300m (£236m) in Feb 19 IDology is a US domestic provider of Verification, Authentication & Fraud Prevention solutions IDology has over 500 customers and derives over • 70% of its revenue from financial services related businesses. Identity Verification Step Up 70 people joined the GBG team from a single • Identity verification in real Dynamic knowledge based office in Atlanta, Georgia time authentication Integration: performing in line with expectations Linkage with GBG location and Identity solutions going well • Joined up proposition and customer visits • Fraud Prevention Digital Authentication Named “company of the year” in NOW identity awards • Correlates fraud indicators to Leverage real-time mobile data to rapidly authenticate benefit all clients in the US sales recruitment • users network 5 Investor Presentation June 2019
GBG acquired VIX Verify Global for £20.6m in Oct 18 VVG is an Australian provider of IDV and Location Intelligence software. Over 400 customers across multiple sectors, • including Australia Post, SportsBet, Western Union, Optus, Vodafone, CBA. IDV Location Intelligence Over 70 people joined the GBG team, with core • offices in Canberra, Melbourne and Sydney. • eIDV through to • In-house data document authentication management • Integrations for web, • Hosted address solution Integration : performing in line with expectations mobile and API similar to Loqate (use Cost synergies taken early Loqate for outside ANZ) • • Focus on verification Forms part of Identity business in APAC • rates and customer journey / UX messages Domestic product integration • 6 Investor Presentation June 2019
How We’ve Performed 7 Investor Presentation June 2019
Growth Track Record Revenue (£m) Adjusted operating profit (£m) 1 7 year CAGR = 24.0% 7 year CAGR = 36.3% 150 40 143.5 30 32.0 100 119.7 26.3 20 87.5 73.4 17.0 50 57.3 10 13.4 10.8 41.8 36.3 7.2 5.5 0 0 YE Mar 13† YE Mar 14 YE Mar 15 YE Mar 16 YE Mar 17 YE Mar 18 YE Mar 19 YE Mar 13 YE Mar 14 YE Mar 15 YE Mar 16 YE Mar 17 YE Mar 18 YE Mar 19 Adjusted operating margin 1 Basic adjusted EPS (p) 2 7 year CAGR = 20.3% 25% 20 20% 22.3% 18.2 22.0% 15 19.4% 18.9% 15.3 18.3% 15% 17.1% 13.1 10 14.0% 10.6 10% 7.9 5 5.8 5% 5.5 0 0% YE Mar 13 YE Mar 14 YE Mar 15 YE Mar 16 YE Mar 17 YE Mar 18 YE Mar 19 YE Mar 13† YE Mar 14 YE Mar 15 YE Mar 16 YE Mar 17 YE Mar 18 YE Mar 19 † Adjusted Revenue 2 Basic Adjusted EPS is adjusted operating profit less net finance costs and tax divided by the weighted average number of shares in issue. 1 Profits before share of results from associates, interest, tax, share based payment charges, amortisation of acquired intangibles, acquisition related costs and non-recurring acquisition integration costs. 8 Investor Presentation June 2019
Group Income Statement 2019 2018 Margins Year ended 31 March £m £m Revenue +19.9% 143.5 119.7 Adjusted operating margin is stable at 22.3% • Cost of sales (36.1) (27.1) Adjusting 2018 for the large perpetual licence • Gross profit +16.0% 107.4 92.6 Underlying revenue last year would have been £117.4m • Gross profit % 74.9% 77.4% Gross margins last year would have been 76.9% • 1 Operating expenses (75.4) (66.3) Underlying adjusted operating profit 2 last year would have • 1 been £24.0m, resulting in an operating margins of 20.4% Adjusted operating profit +21.7% 32.0 26.3 Adjusted operating margin 1 % 22.3% 22.0% Adjusted EBITDA Adjusted EBITDA % Share-based payments (2.3) (2.4) Amortisation of acquired intangibles (10.3) (7.9) £34.1m 2019: 23.7% Exceptional items (4.0) (2.1) (2018: £28.7m, Underlying (2018: 24.0%, Underlying 22.5% 2 ) Operating profit +10.9% 15.4 13.9 £26.4m 2 ) Net finance costs (0.7) (0.5) Profit before tax +10.0% 14.7 13.4 Tax charge (2.6) (2.7) 1 Adjusted operating profit means profits before amortisation of acquired intangibles, share- based payments, exceptional items, net finance costs and tax. +14.1% Profit after tax 12.1 10.7 2 Had the £3.5m perpetual licence deal that was delivered and recognised in full in 1H18 been a 3-year agreement on extended payment terms and payable in annual instalments then our revenue recognition policies would have resulted in a lesser amount being recognisable in 2018. 9 Investor Presentation June 2019
Growth Underlying organic growth and weighting of revenue Underlying constant currency organic growth 2019 Growth 2018 Year ended 31 March 11.5% (2018: 13.6%) £m £m £m • £m 19.9% 143.5 119.7 Group revenue Acquired revenue in past 12 months (13.4) Underlying 1 organic growth Organic revenue 8.7% 130.1 119.7 1 Adjustment for perpetual license - (2.3) (2.3) 10.9% (2018: 14.6%) Underlying organic revenue 130.1 117.4 10.9% 1 The organic revenue growth during the same period last year included £3.5m from the sale of a Constant currency adjustment - (0.6) perpetual licence to a leading European bank. Normally these kind of transactions are fully- delivered over a three-year period, payable in annual instalments. If this had been the case for Underlying constant currency 130.1 11.5% 116.8 this particular transaction then our revenue recognition policy would have recognised only one revenue third of the total amount. This means revenues for 2018 would have been £117.4 million (the basis for underlying growth) rather than the reported £119.7 million 1H 2H FY Weighting of revenue £m £m £m FY19 57.3 86.2 143.5 Weighting 40% 60% 100% FY18 52.6 67.1 119.7 Weighting 44% 56% 100% 10 Investor Presentation June 2019
Cash Flow Statement 12 months ending 2019 2018 Adjusted EBITDA cash conversion ratio 31 March £m £m (excl. paid exceptional items) Variance 28.7 Adjusted EBITDA 34.1 5.4 92.7% (2.5) 4.4 Working capital (6.9) 2018: 114.6% Adjusted Operating Cash Flow 31.6 32.9 (1.5) (1.3) Exceptional costs paid (3.8) (2.5) Acquisitions net cash outflow of £255.1m 27.8 31.6 Operating Cash Flow (4.0) (3.2) Tax paid (2.9) 0.3 £20.4m Vix Verify Global (net of £0.2m cash acquired) • (0.7) (0.5) Interest (0.2) £234.6m IDology (net of £1.0m cash acquired) • £0.1m IDScan final payment • (4.0) (3.6) (0.4) Dividend paid (2.0) Funded by share placing £157.3m (net of fees), £77.6m net new Capex/Development (1.6) 0.4 borrowings and cash reserves 156.7 56.7 Net share issue proceeds 100.0 (70.4) Acquisitions/investments (255.1) (184.7) (0.0) (0.6) Effect of exchange rates 0.6 (79.8) 8.2 Total net debt/cash movement (88.0) 5.3 Opening Net Cash/(Debt) Balance 13.5 8.2 (66.3) 13.5 Closing Net Cash/(Debt) Balance (79.8) 11 Investor Presentation June 2019
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