EX-99.2 3 ir_q1fy24x14nov.htm EX-99.2 ir_q1fy24x14nov
Q1 FY2024 INVESTOR PRESENTATION


 
2   This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation, other than statements of historical facts, are forward-looking statements. The words “believe,” “estimate,” “expect,” “may,” “will” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, the statements regarding our business strategy and our plans and objectives for future operations, our addressable market and perceived growth over next five years, our assumptions regarding industry trends, potential technological disruptions, and client demand for our services. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including, but not limited to: our business, results of operations and financial condition may be negatively impacted by the Russia and Ukraine military conflict and related sanctions, conflict in the Middle East or if general economic conditions in Europe, the United States or the global economy continue to worsen, including increased inflation and recent and potential future bank failures; and the perceived impact and effect of macroeconomic conditions on Endava and its customers including the March 2023 banking collapse; our ability to retain existing clients and attract new clients, including our ability to increase revenue from existing clients and diversify our revenue concentration; our ability to attract and retain highly-skilled IT professionals at cost-effective rates; our ability to penetrate new industry verticals and geographies and grow our revenue in current industry verticals and geographies; our ability to maintain favourable pricing and utilisation rates; our ability to successfully identify acquisition targets, consummate acquisitions and successfully integrate acquired businesses and personnel; the effects of increased competition as well as innovations by new and existing competitors in our market; our ability to adapt to technological change and innovate solutions for our clients; our ability to collect on billed and unbilled receivables from clients; our ability to effectively manage our international operations, including our exposure to foreign currency exchange rate fluctuations; our ability to maintain an effective system of disclosure controls and internal control over financial reporting and our future financial performance, including trends in revenue, cost of sales, gross profit, selling, general and administrative expenses, finance income and expense and taxes, as well as other risks and uncertainties discussed in the “Risk Factors” section of our Annual Report on Form 20-F filed with the Securities and Exchange Commission (the “SEC”) on September 19, 2023. Except as required by law, we assume no duty to update any of these forward-looking statements after the date of this presentation to conform these statements to actual results or revised expectations. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this presentation. Moreover, except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements contained in this presentation.   This presentation also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Neither we nor any other person makes any representation as to the accuracy or completeness of such data or undertakes any obligation to update such data after the date of this presentation. In addition, projections, assumptions and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk.   By attending or receiving this presentation you acknowledge that you will be solely responsible for your own assessment of the market and our market position and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of our business.   This presentation includes non-IFRS financial measures, including revenue growth at constant currency, adjusted profit before tax, adjusted profit before tax as a percentage of revenue, adjusted profit for the period and adjusted free cash flow. Management believes these measures help illustrate underlying trends in our business and use the measures to establish budgets and operational goals, communicated internally and externally, for managing our business and evaluating our performance. Management also believes the presentation of its non-IFRS financial measures enhances an investor’s overall understanding of our historical financial performance. These non-IFRS financial measures have certain limitations and should not be considered in isolation, or as alternatives to or substitutes for, financial measures determined in accordance with IFRS. The non-IFRS measures as defined by us may not be comparable to similar non-IFRS measures presented by other companies. Our presentation of such measures, which may include adjustments to exclude unusual or non-recurring items, should not be construed as an inference that our future results will be unaffected by these or other unusual or non- recurring items. See the IFRS to Non-IFRS Reconciliation section of this presentation and in our earnings release for a reconciliation of these non-IFRS financial measures to the most directly comparable IFRS financial measures. Disclaimer


 
REIMAGINING THE RELATIONSHIP BETWEEN PEOPLE & TECHNOLOGY 3


 
We accelerate our clients’ ability to take advantage of new business models and market opportunities by ideating and delivering dynamic platforms and intelligent digital experiences that are designed to fuel rapid, ongoing transformation of their businesses.   By leveraging next-generation technologies, our agile, multi- disciplinary teams provide a combination of Product & Technology Strategies, Intelligent Experiences, and World Class Engineering to help our clients become more engaging, responsive, and efficient. REIMAGINING THE RELATIONSHIP BETWEEN PEOPLE & TECHNOLOGY 4


 
5 1 Opportunity & Approach Q1 FY2024


 
6 We are a leading provider of next-generation technology services, dedicated to helping our customers drive real impact and meaningful change. Our multi-disciplinary teams combine expertise, creativity, technology and delivery at scale to support our clients in achieving their goals – from ideation to production. From proof of concept and prototyping to implementation and managed services, we leverage our business and engineering capabilities to enable organisations to provide solutions that can serve millions of customers daily. In today’s ever-evolving digital landscape, we are developing the experiences, technical foundation and infrastructure that empower people to interact with technology in ways that truly meet their needs.We enable change


 
LARGE AND FAST GROWING MARKET OPPORTUNITY DELIVER RAPID EVOLUTION BY COMBINING NEXT-GEN TECHNOLOGIES WITH DEEP INDUSTRY EXPERTISE STRONG GROWTH AND FINANCIAL PERFORMANCE IDEATION TO PRODUCTION CAPABILITIES, DISTRIBUTED AGILE AT SCALE, DOMAIN EXPERTISE AND NEAR-SHORE LOCATIONS FOUNDER-LED, EXPERIENCED MANAGEMENT TEAM WITH STRONG CULTURE 7


 
8 TRADITIONAL IT SERVICES BUS. & TECH CONSULTANTS ENGINEERING ENTERPRISE AGILE AUTOMATION NEXT-GEN TECH STRATEGY 
 USER EXPERIENCE DIGITAL 
 AGENCIES


 
We serve a
 large addressable market. * IDC Worldwide Digital Transformation Spending Guide, October 2022 update. 9 $3.4T 2026 16.3% FIVE-YEAR CAGR FOR DIGITAL 
 TRANSFORMATION 
 INVESTMENTS


 
10 ENDAVANS BY GEOGRAPHY FY20 FY21 FY22 FY23 Q1FY23 Q1FY24 Western Europe 448 493 602 659 638 623 Central Europe - EU Countries 3,368 4,469 6,093 5,693 6,169 5,523 3,816 4,962 6,695 6,352 6,807 6,146 Central Europe - Non-EU Countries 1,810 2,361 2,842 2,689 2,889 2,606 Latin America 895 1,244 1,927 1,661 1,924 1,609 North America 103 311 348 324 372 366 APAC 5 38 1,032 70 1,028 Middle East 3 5 3 6 6,624 8,883 11,853 12,063 12,065 11,761 Our people are at the heart of who we are and drive our success as 
 a business. We enable Endavans to be the best they can be, through our positive working experience ensuring everyone feels respected, included, and connected to our culture. 11,761 GLOBAL EMPLOYEES AS OF SEP 30, 2023 (2.5)% EMPLOYEE DECREASE Q1FY23 TO Q1FY24 37% WOMEN IN TOTAL STAFF AS OF SEP 30, 2023 9%14% 3% 22% 52% WESTERN EUROPE & EU EUROPE NON-EU NORTH AMERICA LATIN AMERICA APAC & MIDDLE EAST Q1FY24 ENDAVANS BY REGION


 
11 European Union: 
 Austria, Bulgaria, Croatia, Denmark, Germany, Ireland, Netherlands, Poland, Romania, Slovenia and Sweden 
 Non European Union: 
 Bosnia & Herzegovina, Moldova, North Macedonia, Serbia, Switzerland and the United Kingdom North America: Canada and the United States 
 Latin America:
 Argentina, Colombia, Mexico and Uruguay Asia Pacific: Australia, Malaysia, Singapore and Vietnam Middle East: United Arab Emirates 
 67 cities
 28 countries


 
12 HISTORY OF ENDAVA 11,761 FOUNDED IN COMPUDAVA ALPHEUS NICKELFISH PS TECH ISDC EXPAND 
 TO CE VELOCITY PARTNERSCONCISE UK IT CONSULTANCY 60 240 1,000 EXPAND 
 TO USA EXPAND 
 TO LATAM IPO NYSE JULY 2018 MOLDOVA 
 NEARSHORE 
 LOCATION GERMANY 
 CONSULTING BUSINESS USA 
 DIGITAL, UX 
 & STRATEGY 
 FIRM USA & LATAM 
 NA SALES & LATAM DELIVERY SERBIA 
 AGILE DELIVERY NETHERLANDS 
 & CE 
 AGILE DELIVERY 2,000HEADCOUNT Q1 FY24 INTUITUS UK 
 IT CONSULTANCY PRIVATE EQUITY EXOZET GERMANY DIGITAL AGENCY 2000 2024 COMTRADE DIGITAL SERVICES ADRIATIC REGION 
 SOFTWARE ENGINEERING SERVICES FIVE USA, CROATIA DIGITAL AGENCY LEVVEL USA TECH STRATEGY CONSULTING & ENGINEERING 5,000 LEXICON AUSTRALIA TECH CONSULTING, DESIGN & ENGINEERING MUDBATH AUSTRALIA TECH STRATEGY DESIGN & ENGINEERING AUSTRALIA, SWEDEN, VIETNAM SOFTWARE SOLUTIONS DEK TLM USA GAMING SERVICES


 
13 WE CREATE VALUE BY DELIVERING


 
14


 
15 TODAY TIME TECHNOLOGY DISRUPTION WAVES & CONVERGENCE MOBILITY PAYMENTS RETAIL / CPG CAPITAL MARKETS HEALTHTECH INSURANCE


 
2012 2017 NOW 2030 2040+20352025 PAYMENTS INDUSTRY TRENDS OPEN BANKING REAL TIME PAYMENTS CRYPTO WALLETS INSTANT/DIGITAL ISSUING EMBEDDED 
 FINANCE DLT IN CROSS BORDER PAYMENTS CLOSED LOOP PAYMENT ECOSYSTEM ISO 20022 ADOPTION VERTICALLY-INTEGRATED PAYMENTS CROSS BORDER PAYMENTS MICROPAYMENTS BNPL BIOMETRIC PAYMENTS CBDC IN CAR PAYMENTS PAYMENTS IN METAVERSE ALL PAYMENTS INSTANT NO-CASH SOCIETY ZERO FRAUD PAYMENTS NO PHYSICAL TERMINAL FREE PAYMENTS PAAS SOFTPOS FREE ACQUIRING REQUEST TO PAY VARIABLE DIRECT DEBIT 16


 
2012 2017 NOW 2030 2040+20352025 AUTOMOTIVE INDUSTRY TRENDS FUEL ECONOMY INDIVIDUAL 
 CAR LEASING APPLE CARPLAY ANDROID AUTO SEMI-AUTONOMOUS DRIVING AIDS CAR SUBSCRIPTION USAGE-SPECIFIC INSURANCE INTELLIGENT ROUTING PARKING, TRAFFIC JAM 5G NEW ( INDUCTIVE) CHARGING INFRASTRUCTURE DIGITAL SALES PROCESS USING 
 AR AND VR IN-CAR ENTERTAINMENT MEDIA IN-CAR PAYMENTS FOR ELECTRICITY, PARKING, TOLLS PAYMENTS PROPRIETARY AUTOMOTIVE OS CONNECTED TO MOBILE PHONE DEALERSHIPS 
 EXPERIENCE CENTERS CAR-SHARING IN-CAR 
 COMMERCE RETAIL RIDE-HAILING (UBER) RISING ADOPTION OF PLUG-IN HYBRID EV CONNECTED TO SMART CITIES “HANDS OFF, MIND OFF” RISING ADOPTION OF BATTERY EV ELECTRIC-ONLY 
 DRIVE ZONES IN CITIES VEHICLE COMMUNICATION P2P CAR-SHARING AUTONOMOUS TRAFFIC MANAGEMENT ROBOTAXIS ZERO EMISSIONS ZERO ACCIDENTS 17


 
18 ENDAVA’S FIVE KEY SUSTAINABILITY FOCUS AREAS


 
19 KEY SUSTAINABILITY COMMITMENTS OUR PEOPLE SOCIAL IMPACT OPERATING RESPONSIBILITY INNOVATION & DATA INTEGRITY ENVIRONMENTAL IMPACT We enable our people to be the best they can be by fostering an inclusive culture, providing career and progression opportunities, and supporting their wellbeing. We follow sound environmental practices to lower our energy footprint, reduce waste, choose greener infrastructures and equipment, and promote environmentally friendly ways of working. We help our clients to accelerate industry transformation by reimagining the relationship between people and technology, while safeguarding our clients’ privacy and protecting the assets entrusted to us according to industry standards. We contribute to the societies we are part of, and more broadly the Technology & Services industry, through community and fundraising activities in the areas of Education, Health and the Environment. We apply the highest standards of business conduct and ethics to work situations and strive to make the right decisions that benefit our people, inventors, customers, suppliers and society.


 
20 2 Financials Q1 FY2024


 
21 Financial Highlights MASTER SERVICE AGREEMENTS WITH CLIENTS PRIMARILY T&M BASED PRICING LONG-TERM CLIENT RELATIONSHIPS STRONG REVENUE GROWTH HEALTHY MARGINS LOW CAPEX REQUIREMENTS POSITIVE ADJUSTED FREE CASH FLOW


 
22 STRONG REVENUE GROWTH FY19 FY20 FY21 FY22 FY23 _ FY23 FY24 188.4196.2794.7654.8446.3351.0287.9 CAGR 28.9% OVER THE LAST FIVE FISCAL YEARS, 90.1% OF OUR REVENUE, ON AVERAGE, EACH FISCAL YEAR CAME FROM CLIENTS WHO PURCHASED SERVICES FROM US DURING THE PRIOR FISCAL YEAR. FY19 JUN 30 SEP 30 3M FY23 3M FY24FY20 FY21 (3 .9)% YOYRevenue (£m) FY22 FY23 Q1


 
23 FY19 FY20 FY21 FY22 FY23 _ FY23 FY24 17.338.6114.2102.454.423.429.1 ROBUST PROFITABILITY FY19 FY20 FY21 FY22 FY23 _ FY23 FY24 29.839.5164.2138.392.166.751.0 MARGIN FY19 FY20 17.7% FY19 JUN 30SEP 30 3M FY23 3M FY24FY20 FY21 FY21 19.0% SEP 30 3M FY23 3M FY24 * See page 29 for reconciliation of IFRS to Non-IFRS metrics CAGR 34% Adjusted Profit Before Tax (£m)*Profit Before Tax (£m) MARGIN 10.1% 6.7% FY22 12.2% FY22 20.6% FY23 15.6% 21.1% FY23 18.5 JUN 30 Q1 Q1 14.4% Q119.7% 9.2% 20.7% 19.2% 23.6%20 1 15.8 Q1


 
SEP 30 DEEP CLIENT RELATIONSHIPS FY18 FY20 FY22 Q1FY23 145140146134856563 FY19 JUN 30 FY20 FY21 24* Calculated on a 12 month rolling basis. No. of Clients / Revenue > £1m* FY22 Q1FY23 Q1FY24 SEP 30 FY19 FY20 FY21 FY22 FY23 Q1FY23 Q1FY24 35%33%33%34%35%38%38% FY19 JUN 30 FY20 Q1FY24FY21 Top 10 Clients Revenue % FY22 Q1FY23FY23 FY23


 
25 NUMBER & SPEND OF CLIENTS FY18 FY20 FY22 Q1FY23 716715711732615416275 Total No. of Clients FY19 JUN 30 FY20 FY21 Q1FY23 Q1FY24 SEP 30 FY22 FY23 SEP 30 FY18 FY19 FY20 FY21 FY22 Q1FY23 Q1FY24 294329905841697647699 Average Spend: REMAINING CLIENTS (£000s) FY19 JUN 30 FY20 FY21 FY22 Q1FY23 Q1FY24FY23 SEP 30 0 6650 13300 19950 26600 FY17 FY18 FY19 FY20 FY21 Q1FY23 Q1FY24 6,5406,39026,03022,15015,59013,38010,870 JUN 30 FY19 FY20 FY21 Average Spend: TOP TEN CLIENTS (£000s) FY22 Q1FY23 Q1FY24FY23


 
DIVERSE REVENUE BASE: GEOGRAPHY & INDUSTRY VERTICALS 17% 11% 23% 8% 14% 27% PAYMENTS BANKING & CAPITAL MARKETS INSURANCE TMT MOBILITY OTHER REVENUE % BY VERTICAL Q1 FY24 FY18 FY19 FY20 FY21 FY22 _ Q1FY23 Q1FY24 30%35%32%35% 31%29% 27% 25% 22%23%21%24%24%28% 35%40%39%41%42%44%45% UK EUROPE N.AMERICA RoW * FY19 JUN 30 SEP 30 Q1FY23 Q1FY24FY20 FY21 26 * Other includes consumer products, 
 healthcare, and retail verticals Revenue by Region FY22 FY23 3%3% 6%3% 10%3%


 
LOW CAPEX & POSITIVE ADJUSTED FCF 0.00 28.75 57.50 86.25 115.00 FY19 FY20 FY21 FY22 FY23 _ FY23 FY24 16.021.8111.5107.282.731.529.8 FY18 FY20 FY22 FY23 0.83.413.513.75.27.36.1 FY19 3M FY23 3M FY24FY20 % OF REVENUE FY19 JUN 30 FY20 10.4%2.1% JUN 30 SEP 30 FY21 2.1% FY21 9.0% 27* See page 29 for reconciliation of IFRS to Non-IFRS metrics Capital Expenditures (£m) Adjusted Free Cash Flow (£m)* FY22 1.2% FY22 18.5% SEP 30 3M FY23 3M FY24FY23 2.1% FY23 16.4% Q1 Q1 % OF REVENUE1.7% 1.7% 0.4% Q1 14.0% Q111.1% 8.5%


 
3 Appendix Q1 FY2024 28


 
29 IFRS TO NON-IFRS RECONCILIATION 2019 2020 2021 2022 2023 2022 2023 Reconciliation of Revenue Growth at Constant Currency to Revenue Growth as Reported under IFRS Revenue Growth as Reported under IFRS 32.3 % 21.9 % 27.2 % 46.7 % 21.4 % 33.0 % (3.9)% Foreign exchange rates impact (1.2)% (0.9)% 2.4 % 0.9 % (4.8)% (7.1)% 3.3 % Revenue Growth at Constant Currency Including Worldpay Captive 31.1 % 21.0 % 29.6 % 47.6 % 16.6 % 25.9 % (0.6)% Impact of Worldpay Captive — 3.2 % 0.8 % — — — — Proforma Revenue Growth Rate at Constant Currency Excluding Worldpay Captive 31.1 % 24.2 % 30.4 % 47.6 % 16.6 % 25.9 % (0.6)% Revenue 287,930 350,950 446,298 654,757 794,733 196,169 188,421 Reconciliation of Adjusted Profit Before Tax and Adjusted Profit for the Period £ in 000s Profit before Tax 30,100 23,364 54,368 102,379 114,163 38,568 17,313 Adjustments: Share based compensation expense 12,022 15,663 24,427 35,005 31,058 9,544 9,939 Discretionary EBT bonus — 27,874 — — — — — Amortization of acquired intangible assets 3,472 4,075 6,725 10,823 12,270 3,019 3,401 Foreign currency exchange (gains) / losses, net (2,945) (2,054) 6,546 (9,944) 10,729 (7,414) (2,079) Initial public offering expensses incurred 1,055 — — — — — — Secondary offering expenses incurred 1,009 — — — — — — Stamp duty on transfer of shares 10 — — — — — — Sarbanes-Oxley compliance readiness expenses incurred 1,440 — — — — — — Restructuring costs — — — — 6,588 — — Fair value movement of contingent consideration 5,805 — — — (10,613) (4,249) 1,236 Net gain on disposal of subsidiary — (2,215) — — — — — Total Adjustments 21,868 43,343 37,698 35,884 50,032 900 12,497 Adjusted Profit Before Tax 51,968 66,707 92,066 138,263 164,195 39,468 29,810 Adjusted Profit Before Tax as a percentage of Revenue 18.0 % 19.0 % 20.6 % 21.1 % 20.7 % 20.1 % 15.8 % Profit for the Period 24,007 19,991 43,450 83,093 94,163 31,728 12,366 Adjustments: Adjustments to profit before tax 21,868 43,343 37,698 35,884 50,032 900 12,497 Tax impact of adjustments (3,969) (8,787) (7,241) (6,933) (11,829) (1,330) (1,939) Adjusted Profit for the Period 41,906 54,547 73,907 112,044 132,366 31,298 22,924 Reconciliation of Net Cash from Operating Activities to Adjusted Free Cash Flow Net Cash from Operating Activities 35,348 37,877 87,668 120,719 124,518 25,236 16,587 Adjustments: Grant received 1,784 888 228 139 494 — 207 Net purchase of non-current assets (tangible and intangible) (7,326) (7,319) (5,236) (13,695) (13,487) (3,424) (804) Adjusted Free Cash Flow 29,806 31,446 82,660 107,163 111,525 21,812 15,990 Adjusted Free Cash Flow as a percentage of Revenue 10.4 % 9.0 % 18.5 % 16.4 % 14.0 % 11.1 % 8.5 % SUPPLEMENTAL NON-IFRS FINANCIAL INFORMATION TWELVE MONTHS ENDED JUNE 30 THREE MONTHS ENDED SEPTEMBER 30