EX-99.2
Published on September 19, 2024
Investor presentation Q4 FY2024
3 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 estimated addressable market, 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 Russian-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 worsen, including increased inflation and potential future bank failures; and the perceived impact and effect of macroeconomic conditions on Endava and its customers; 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, 2024. 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 which 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 for a reconciliation of these non- IFRS financial measures to the most directly comparable IFRS financial measures. Disclaimer
Technology is our how. And people are our why. A new wave of AI-driven digital transformation is underway, and businesses must embrace a more digital core that enables the real-time usage of data to support the rapid and efficient delivery of new initiatives. At Endava, we’ve partnered with our customers over the last two decades to drive their digital agenda and we have upgraded our capabilities to align with their emerging needs. We combine our engineering heritage, digital transformation expertise and deep industry knowledge with new core modernization capabilities to support our customers on their transformation journey. These enhanced capabilities provide the transparency and predictability needed to confidently shape the future and harness the leading technologies of tomorrow. 4
Opportunity & Approach 01
We enable change. We are a leading provider of next-generation technology services, dedicated to helping our customers drive real impact and meaningful change. For over two decades, we have been honing our digital transformation approach that now serves as our cornerstone for navigating the new AI- driven era. Our focus is on enhancing our customers’ systems and utilising innovative technologies to create modern value propositions that fuel their competitive edge in the market. This is achieved through our multi-disciplinary teams, who bring together decades of expertise, creativity and delivery at scale to support our clients in reaching their goals. We empower people to engage with innovative technologies and achieve transformational results. 6
7 Next-gen Tech Core Modernisation Strategy Customer-centric Engineering Agile Automation Data Integration & AI Traditional IT Services Business & Tech Consultants Digital Agencies We are a pure play next-gen technology company
8 The Digital Journey with Endava Ideate Advisory and Digital Strategy Discover & Plan Digital Product Acceleration Build & Integrate Digital Engineering, Leading Delivery, Data & AI Run & Evolve Modern Managed Services Accelerators Dash RayInfra MapsMorpheus Chronos AI Core Modernization CybersecurityStrategyEmbedded Computing CloudGoogle Cloud Platform Sustainability Physical Computing Dava.X
9 We serve a large addressable market. $3.9T 16.1% Five-year CAGR for digital transformation investments IDC Worldwide Digital Transformation Spending Guide, November 2023 update. 2027
10 18% 11% 7% 19% 45% Western Europe & EU Europe Non-EU North America Latin America APAC & Middle East Q4FY24 Endavans by Region Endavans by Geography FY20 FY21 FY22 FY23 FY24 Western Europe 448 493 602 659 562 Central Europe - EU Countries 3,368 4,469 6,093 5,693 4,904 3,816 4,962 6,695 6,352 5,466 Central Europe - Non-EU Countries 1,810 2,361 2,842 2,689 2,346 Latin America 895 1,244 1,927 1,661 1,357 North America 103 311 348 324 807 APAC 5 38 1,032 2,101 Middle East 3 5 8 6,624 8,883 11,853 12,063 12,085 0.2% Employee increase Q4FY23 to Q4FY24 12,085 Global employees as of June 30, 2024 37% Women in total staff as of June 30 2024 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 so that we can deliver the highest caliber of results for our customers. Endavans
11 Endava around the world 71 cities, 29 countries European Union Austria, Bulgaria, Croatia, Denmark, Germany, Ireland, Netherlands, Poland, Romania, Slovenia and Sweden Europe - Non-EU 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, India, Malaysia, Singapore and Vietnam Middle East United Arab Emirates
12 Founded in 2000 Expand to CE Concise UK, IT Consultancy Expand to USA Expand to LATAM IPO NYSE July 2018 Compudava Moldova, Nearshore Location Alpheus Germany, Consulting Business Nickelfish USA, Digital, UX & Strategy firm Velocity Partners USA & LATAM, NA Sales & LATAM Delivery PS Tech Serbia, Agile Delivery ISDC Netherlands & CE, Agile Delivery Intuitus UK, IT Consultancy Private Equity Exozet Germany, Digital Agency Comtrade Digital Services Adriatic Region, Software Engin. Services FIVE USA, Croatia, Digital Agency Levvel USA, Tech Strategy Consulting & Engineering Lexicon Australia, Tech Consulting, Design & Engineering Mudbath Australia, Tech Strategy, Design & Engineering Australia, Sweden, Vietnam, Software Solutions DEK TLM USA, Gaming Services 2024 History of Endava 12,085 Founded in 2000 60 240 1,000 2,000Headcount Q4 FY24 5,000 2024 GalaxE USA, India IT and Business Solutions
13 Current 2030 2040+20352025 Open Banking Usage Specific Insurance AI for Everything Advanced Semiconductors/Chiplets Immersive, Integrated In-Vehicle Infotainment AI-Embedded Chips AI-Integrated Applications Real-time Payments Biometric Authentication The Metaverse Neuromorphic Computing Advanced Robotics Zero Emissions Generative AI Frictionless Commerce Weight Loss Pharmaceuticals Agentic AI Embedded Finance Edge Computing Digital Twins Next Gen Clean Energy Tech 6G Generative AI Smart Assistants Smart Spaces Practical 3D Printing CBDC Level 5 Autonomous Vehicles Generative AI Smart Assistants Practical Quantum Computing AI powering the future of cross-industry trends
14 Our People / We enable our people to be the best they can be by creating learning and development opportunities, fostering an inclusive work environment and making sure everyone is connected to our culture. Social Impact / We aim to make a positive difference in the communities where we live and work through strong strategic partnerships with NGOs. By concentrating on education, health, environment and humanitarian aid we focus on areas where we can have the greatest impact. Operating Responsibly / Our commitment to act ethically and with the highest levels of integrity enables us to retain the trust and confidence of our people, customers and investors to build a strong and sustainable business for the future. Innovation & Data Integrity / We develop smart solutions that are transforming lives through technology. In doing so, we strive to safeguard customer privacy and security by aligning with industry best practices. Environmental Impact / We care about our impact on the world and follow sound environmental practices to help reduce our environmental footprint. articulates our ESG approach and key priorities
Financials02
16 FY20 FY21 FY22 FY23 FY24 _ FY23 FY24 194.4 189.8 174.4 203.5 183.6205.2 188.4196.2740.8794.7654.8446.3351.0 FY20-FY24 CAGR 20.5% Over the last five fiscal years, 89.7% of our revenue each fiscal year, on average, came from customers who purchased services from us during the prior fiscal year. June 30 June 30 12M FY23 12M FY24 +2.4% Q4 YOYRevenue (£m) F Q1 Q2 740.8 794.7 Q3 Q4 F Revenue
17 Profitability FY20 FY21 FY22 FY23 FY24 _ FY23 FY24 3.0 24.9 3.0 30.4 10.6 20.3 17.338.627.0114.2102.454.423.4 June 30 June 30 12M FY23 12M FY24 Profit before tax (£m) F F Q2 27.0 114.2 Q1 Q4 Q3 Margin 6.7% 12.2% 15.6% 14.4% Q314.9% (0.3%) 9.9% 5.8% Q2 12M14.4% 3.6% 19.7% 9.2% Q1 Q413.1% (0.2%) 3.6% FY20 FY21 FY22 FY23 FY24 _ FY23 FY24 14.9 38.3 15.5 43.4 22.7 43.0 29.839.583.0164.2138.392.166.7 June 30 June 30 12M FY23 12M FY24 F 1 F Adjusted profit before tax (£m)* F F Q1 Q2 83.0 164.2 Q3 Q4 F Margin 19% 20.6% 21.1% 20.7% 11.2% Q321.3% 8.9% 20.9% 12.4% Q2 12M20.7% 11.2% 20.1% 15.8% Q1 Q420.2% 7.7% * See page 23 for reconciliation of IFRS to Non-IFRS metrics (0.5) (0.4)
18 Client relationships FY20 FY21 FY22 FY23 FY24 Q4FY23 Q4FY24 34%35%32%33%34%35%38% F June 30 June 30 Q4 FY23 Q4 FY24 F 1 F 22 Top 10 clients (% of total revenue) F F FY20 FY21 FY22 FY23 FY24 _ Q4FY23 Q4FY24 1461461461461348565 F June 30 June 30 Q4 FY23 Q4 FY24 F 1 F No. of clients with revenue > £1m* F F * Calculated on a 12 month rolling basis.
19 Number & spend of clients FY20 FY21 FY22 Q3FY23 695711695711732615416 June 30 June 30 Q4 FY23 Q4 FY24 FY21 FY22 FY23 FY24FY20 Total no. of clients FY20 FY21 FY22 FY23 FY24 Q3FY23 Q3FY24 6,6806,55024,05026,03022,15015,59013,380 June 30 June 30 Q4 FY23 Q4 FY24 FY20 FY21 FY22 FY23 Average spend (£000s) Top 10 clients FY24 FY20 FY22 FY22 Q3FY23 281301794905841697647 June 30 June 30 Q4 FY23 Q4 FY24 FY20 FY21 FY22 FY23 Average spend (£000s) Remaining clients FY24
20 FY20 FY21 FY22 FY23 FY24 _ Q3FY23 Q3FY24 38% 30% 33% 32%35% 31%29% 25% 24% 26% 23%21%24%24% 30%38%33%39%41%42%44% UK Europe N. America RoW June 30 June 30 Q4 FY23 Q4 FY24 Revenue by Region Geography & Industry verticals 3% 3% 6% 8% 7% * Other includes consumer products, healthcare, and retail verticals 25% 9% 21% 9% 17% 19% Payments Banking & Capital Markets Insurance Technology, Media & Telecom. Mobility Other* Revenue by Vertical Q4 FY24 8% 3%
21 CAPEX & Adjusted FCF FY20 FY21 FY22 FY23 FY24 _ FY23 FY24 1.5 1.8 1.4 4.1 1.4 4.2 0.83.45.213.513.75.27.3 F June 30 June 30 12M FY23 12M FY24 F 1 F Capital expenditures (£m) F F Q1 Q2 5.1 13.5 Q3 Q4 % of Revenue 2.1% 1.2% 2.1% 1.7% 0.7% Q32.0% 0.8% 2.0% 0.8% Q2 12M1.7% 0.7% 1.7% 0.4% Q1 Q41.0% 0.8% FY20 FY21 FY22 FY23 FY24 _ FY23 FY24 6.6 31.5 2.2 21.2 33.6 37.0 16.021.858.4111.5107.282.731.5 F June 30 June 30 12M FY23 12M FY24 F 1 F Adjusted free cash flow (£m)* F F Q1 Q2 58.4 111.5 Q3 Q4 % of Revenue 9.0% 18.5% 16.4% 14% 7.9% Q310.4% 1.2% 18.0% 18.3% Q2 12M14.0% 7.9% 11.1% 8.5% Q1 Q416.6% 3.4% * See page 23 for reconciliation of IFRS to Non-IFRS metrics 2.2 6.6
Appendix03
23 IFRS to Non-IFRS reconciliation 2020 2021 2022 2023 2024 2023 2024 Reconciliation of Revenue Growth/(Decline) at Constant Currency to Revenue Growth/(Decline) as Reported under IFRS Revenue Growth / (Decline) as Reported under IFRS 21.9 % 27.2 % 46.7 % 21.4 % (6.8)% 5.2 % 2.4 % Impact of foreign exchange rate fluctuations (0.9)% 2.4 % 0.9 % (4.8)% 2.3 % (0.4)% 1.1 % Revenue Growth / (Decline) at Constant Currency Including Worldpay Captive 21.0 % 29.6 % 47.6 % 16.6 % (4.5)% 4.8 % 3.5 % Impact of Worldpay Captive 3.2 % 0.8 % — — — — — Proforma Revenue Growth / (Decline) Rate at Constant Currency Excluding Worldpay Captive 24.2 % 30.4 % 47.6 % 16.6 % (4.5)% 4.8 % 3.5 % Revenue 350,950 446,298 654,757 794,733 740,756 189,791 194,418 Reconciliation of Adjusted Profit Before Tax and Adjusted Profit for the Period £ in 000s Profit/(Loss) before Tax 23,364 54,368 102,379 114,163 26,980 24,936 (409) Adjustments: Share based compensation expense 15,663 24,427 35,005 31,058 34,678 6,923 4,938 Discretionary EBT bonus 27,874 — — — — — — Amortization of acquired intangible assets 4,075 6,725 10,823 12,270 14,980 2,843 5,050 Foreign currency exchange (gains) / losses, net (2,054) 6,546 (9,944) 10,729 2,233 699 (631) Restructuring costs — — — 6,588 11,645 2,905 4,386 Exceptional property charges — — — — 1,925 — 1,925 Fair value movement of contingent consideration — — — (10,613) (9,486) 37 (338) Net gain on disposal of subsidiary (2,215) — — — — — — Total Adjustments 43,343 37,698 35,884 50,032 55,975 13,407 15,330 Adjusted Profit Before Tax 66,707 92,066 138,263 164,195 82,955 38,343 14,921 Adjusted Profit Before Tax as a percentage of Revenue 19.0 % 20.6 % 21.1 % 20.7 % 11.2 % 20.2 % 7.7 % Profit/(Loss) for the Period 19,991 43,450 83,093 94,163 17,122 23,058 (1,854) Adjustments: Adjustments to profit before tax 43,343 37,698 35,884 50,032 55,975 13,407 15,330 Tax impact of adjustments (8,787) (7,241) (6,933) (11,829) (7,109) (3,530) (606) Adjusted Profit for the Period 54,547 73,907 112,044 132,366 65,988 32,935 12,870 Reconciliation of Net Cash from Operating Activities to Adjusted Free Cash Flow Net Cash from Operating Activities 37,877 87,668 120,719 124,518 54,392 33,327 (239) Adjustments: Grant received 888 228 139 494 707 22 (115) Net purchase of non-current assets (tangibles and intangibles) (7,319) (5,236) (13,695) (13,487) (5,140) (1,831) (1,480) Settlement of COC bonuses on acquisition — — — — 8,442 — 8,442 Adjusted Free Cash Flow 31,446 82,660 107,163 111,525 58,401 31,518 6,608 Adjusted Free Cash Flow as a percentage of Revenue 9.0 % 18.5 % 16.4 % 14.0 % 7.9 % 16.6 % 3.4 % TWELVE MONTHS ENDED JUNE 30 THREE MONTHS ENDED JUNE 30
