Software investor event 24 th January 2019 Succeed Simplify Strengthen 1 | Capita Software investor event
Disclaimer This presentation and the commentary provided with it is prepared for and addressed only to the Company's shareholders as a whole and to no other person. The Company, its Directors, employees, agents and advisers accept and assume no liability to any person in respect of this presentation and the associated commentary save as would arise under English law. Statements contained in this presentation and associated commentary are based on the knowledge and information available to Capita’s Directors at the date it was prepared and therefore facts stated and views expressed may change after that date. This presentation and any materials distributed in connection with it may include forward-looking statements, beliefs, opinions or statements concerning risks and uncertainties, including statements with respect to Capita’s business, financial condition and results of operations. Those statements and statements which contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, reflect Capita’s Directors' beliefs and expectations and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and which may cause results and developments to differ materially from those expressed or implied by those statements and forecasts. No representation is made that any of those statements or forecasts will come to pass or that any forecast results will be achieved. You are cautioned not to place any reliance on such statements or forecasts. Those forward-looking and other statements speak only as at the date of this presentation. Capita undertakes no obligation to release any update of, or revisions to, any forward-looking statements, opinions (which are subject to change without notice) or any other information or statement contained in this trading update. Furthermore, past performance cannot be relied on as a guide to future performance. No statement in this presentation or associated commentary is intended as a profit forecast or a profit estimate and no statement in this document should be interpreted to mean that earnings per Capita share for the current or future financial years would necessarily match or exceed the historical published earnings per Capita share. Nothing in this presentation or associated commentary is intended to constitute an invitation or inducement to engage in investment activity. This presentation and the associated commentary does not constitute or form part of any offer for sale or subscription of, or any solicitation of any offer to purchase or subscribe for, any securities nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract, commitment or investment decision in relation thereto. This presentation does not constitute a recommendation regarding any securities. 2 | Capita Software investor event
Contents 4. Financial profile 1. Introduction and measuring success 2. History and 5. Summary business today and Q&A 3. Markets and 6 . Capita’s software growth opportunity business in action 3 | Capita Software investor event
Section 1 Introduction 4 | Capita Software investor event
Our management team Chris Baker Stefan Maynard Alistair Scullion Executive Officer, Finance Director, Strategy & Marketing Director, Capita Software Capita Software Capita Software • Joined end of 2016 • Joined end of 2013 • Joined end of 2016 • Previously Executive Director • Previously VP Finance at • Previously MD of consulting, at Xchanging Logica/CGI for 12 years analytics and software at Experian for 12 years • Prior, 17 years at Oracle • Prior, 7 years at ICL/Fujitsu • Prior, 10 years experience at IBM and Barclays 5 | Capita Software investor event
Key messages from today Well established products Specialist, need deep domain with market leading positions expertise to win Divisional transformation Creating a single programme now in 3 rd year software company Stronger operational platform will >1,000 software developers in India, support growth and innovation £80m of investment Improving financial Profitable, repeatable growth with performance strong cash flow generation 6 | Capita Software investor event
Capita strategy recap Transformation driven by things that we control Fix the basics Specialist • Tech-led software Offshore Cost out • IT services Data analytics Improve challenging contracts • and AI Digital transformation Rights issue and disposals raised £1.1bn in 2018 Reduced leverage • People-led Allow us to increase investment • Specialist Blue collar domestic outsourcing outsourcing Focus on digitally-enabled business services • With good market positions and growth potential Lower margin Higher margin activities activities 7 | Capita Software investor event
Scalable, repeatable products and digitally-enabled BPO 1 2 Software products Digitally-enabled BPO Capita proprietary or third party software Enterprise software products Built once and sold many times Create the best outcome for our customers a b Configured Capita BPO enabled by bespoke software delivering BPO digital platforms 8 | Capita Software investor event
Capita Software provides a significant profit and opportunity contribution to Capita Capita Software and Capita Software division Digitally-enabled BPO Capita Capita Software Software products products 1 Configured 1 Capita 2a software delivering 2a BPO 2b BPO Configured enabled by Capita bespoke software digital delivering platforms BPO 24% of 71% of group profit* group profit* 9 | Capita Software investor event * % of Capita profit based upon H1 2018 underlying profits before significant contracts and restructuring
Capita Software – a snapshot What we do Market areas Financial metrics • Pure-play specialised enterprise software Education £112m profit business £402m with 27.8% Emergency • Serving sector specific and cross-sector revenue* services markets - UK and overseas margin* • Forms a differentiating component of the Local government digitally-enabled Capita offering Utilities & >70% recurring £543m transportation Strong UK market positions order book* revenue Healthcare • Education #1 Professional & financial Services • Emergency services #1 4,000 97% Payments • Utilities #1 people UK revenue • Local government top 3 Cross-sector 10 | Capita Software investor event * Financials based upon FY 2017 underlying results before significant contracts and restructuring
Section 2 History and our business today 11 | Capita Software investor event
History – siloed businesses 1990–2010 2010–2016 2017 / 2018 • Bought SIMS (Education) • Acquired SunGard secure • New management team in place information systems • Built leading Local Government • Transformation programme (Emergency services) software business commenced • Acquired AMT-Sybex (Utilities) • Acquired IBS OPENSystems • Significant investment allocated • Acquired Clinical Solutions (Local government housing) (Health) • Acting as one software • Acquired CHKS (Health company… • Acquired paypoint.net, Retain, analytics) Eclipse, Barrachd and Orange Bus • Formed new Software division 12 | Capita Software investor event
Capita Software’s transformation journey 18 months ago… … January 2019… … by 2020 One, pure-play, cloud- • 29 siloed businesses • Target operating model enabled business Sub-scale • Shared IT support centre Benefits of scale • No standard processes • Standardised, best • Digital development centre Monolithic • practice processes developments Single customer support centre Frequent 13 week • Reactive sales force • release cycles Demand generation capability Underinvestment • Proactive demand • in product Sales transformation generators Shared services – HR, Finance, Compliance, Legal, Commercial Continuous product • investment Software employee value proposition Transformation journey 13 | Capita Software investor event
Digital delivery centre – a world-class development capability Software delivery centre – a world-class development capability Software delivery centres Digital delivery centres Client Client Industry Industry One for each division and one group-wide needs needs needs needs Portfolio Product Collaboration Management Innovation hubs Management Open-source repository Automation, Service Management Code & IP Repository Product Product Security, Dev Ops managers managers External connections Data driven insights New Capabilities Third parties Blockchain, IoT, etc Software / specialists 14 | Capita Software investor event
Campaign-led, fully metricated, demand generation marketing capability Sales Marketing growth campaigns Marketing Marketing Sales Sales Confirmed Qualified Qualified Closed Opportunity Lead Lead Lead Nurture to Recycle Real-time KPIs Maximising ROMI One CRM 15 | Capita Software investor event
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