Ideagen : Year End Results 2020

IDEAGEN PLC

2019-2020 YEAR END RESULTS

David Hornsby - Executive Chairman

Ben Dorks - CEO

Emma Hayes - CFO

Ideagen | YEAR END RESULTS 2019-20

CONTENTS

THREE YEAR OBJECTIVES	3
OVERVIEW	4
TRACK RECORD OF GROWTH	5
OPERATIONAL HIGHLIGHTS	6
FINANCIAL HIGHLIGHTS	7
REVENUE ANALYSIS	8
OUR PILLARS	9
QHSE - QUALITY, HEALTH, SAFETY AND ENVIRONMENT	10
ARC - AUDIT RISK AND CORPORATE COMPLIANCE	11
DCC - DOCUMENT CONTROL AND COLLABORATION	12
ORGANISATIONAL CHART	13
SUMMARY	14
APPENDIX	15
ACQUISITION TIMELINE	16
MARKETING APPENDIX	17

NUMBER OF ACCOUNTS: FY19/20	18
SALES STATS: FY19/20	19
BOOKING BY VERTICAL SECTOR	20
HISTORY OF RECURRING AND SAAS REVENUE	21
IDEAGEN PEOPLE	22
ACTIVE INTEGRATION - WHY BOTHER?	23
INTEGRATION SNAPSHOT	24
PLATFORMS	25
2019-20 FINANCIAL HIGHLIGHTS	26
STATEMENT OF COMPREHENSIVE INCOME	27
STATEMENT OF FINANCIAL POSITION	28
STATEMENT OF CASH FLOWS	30

Ideagen | YEAR END RESULTS 2019-20

THREE YEAR OBJECTIVES

£63m		£100m		£33m		£80m		£20m
Current Run Rate		Run Rate by 2023		EBITDA		Organic Growth		Acquired Revenue

85%	Recurring Revenue 85% by FY 2022	33%	Operating Margins 33%

10%	Organic Revenue Growth 10%	90%	Cash Generation 90% of EBITDA

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Ideagen | YEAR END RESULTS 2019-20

OVERVIEW

5,700 Companies using the Ideagen suite of products including:

250 HOSPITALS IN

300+ AVIATION

7 OF THE TOP 10 UK

7 OF THE TOP 7

15 OF THE TOP 20

THE UK & US

ORGANISATIONS

ACCOUNTING FIRMS

GLOBAL AEROSPACE

PHARMACEUTICAL

GLOBALLY

DEFENCE COMPANIES

COMPANIES

• Integrated Risk Management
• Solving complex compliance and risk problems for highly regulated industries
• Strong vertical alignment - Manufacturing, Aerospace & Defence, Healthcare, Life Sciences, Finance and Transport
• 19 acquisitions with strong IP and recurring revenue
• Excellent customer base with long LTV
• Consistent organic growth and increase in recurring revenues
• Medium term transition to SaaS model
• Strong Ideagen team with excellent domain knowledge and thought leadership
• Large market opportunity

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Ideagen | YEAR END RESULTS 2019-20

TRACK RECORD OF GROWTH

											£20,000,000
£60,000,000
											£18,000,000
£50,000,000											£16,000,000
											£14,000,000
£40,000,000											£12,000,000
£30,000,000											£10,000,000
											£8,000,000
£20,000,000											£6,000,000
											£4,000,000
£10,000,000											£2,000,000
											£0
£0	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020
	Revenue		EBITDA

Diluted adjusted Earnings per share (pence)**

6
5
4
3
2
1
£0	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020

KEY GROWTH STATISTICS

50%

58%

34%

Revenue CAGR '10 -'20

EBITDA CAGR '10 -'20

Share price CAGR '10 -'20

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Ideagen | YEAR END RESULTS 2019-20

OPERATIONAL HIGHLIGHTS

• Acquisition of Redland Business Solutions which delivered high quality recurring revenues growing 25% in the first six months
• Acquisition of Optima Diagnostics which provides health and safety solutions to
  BAE and Sellafield. Part of market consolidation strategy
• Acquisition of Workrite, a Software as a Service (SaaS) company that has developed a functionally rich, content enabled Health and Safety e-learning management platform
• SaaS revenues increased by 61% to £22.1 million and now represent the largest sector of revenue
• 458 new logo customer wins including - Emirates Group, SSE, US Federal Reserve, Corbus Pharmaceuticals
• Continued high levels of customer retention with support and maintenance contract renewal rate of 95% (2019: 95%)
• Ongoing product innovation and investment across all products with strong emphasis on cloud
• Covid-19:early and decisive action: - Focused on protecting team members, supporting our customers and positioning for the future

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Ideagen | YEAR END RESULTS 2019-20

FINANCIAL HIGHLIGHTS

• Revenue increased by 21% to £56.6 million (2019: £46.7 million)
• Recurring revenues of £43.1 million (2019: £31.2 million)
  representing 76% (2019: 67%) of total revenues
• Annual Recurring Revenue (ARR) book of £48.7 million at year end (2019: £36.4 million)
• Adjusted EBITDA on an IFRS16 basis increased by 30% to £18.5 million (2019: £14.3 million on an IAS 17 basis) - Adjusted EBITDA on an IAS17 basis increased by 22% to £17.5 million
• Adjusted diluted EPS increased by 12% to 5.36 pence (2019: 4.80 pence)

• Cash generated by operations of £18.1 million on an IFRS16 basis or £17.0 million on an IAS 17 basis (2019: £12.3 million)
• Days Sales Outstanding of 76 (2019: 74 days) calculated on the year end Trade Receivables balance
• Net bank debt (excluding lease liabilities) at year end of £16.8 million (2019: £1.3 million) following the funding of three acquisitions during the period
• Proposed final dividend of 0.216 pence per share making a total of 0.32 pence (2019: 0.278 pence) per share for the year representing a 15% increase

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Ideagen | YEAR END RESULTS 2019-20

REVENUE ANALYSIS

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Ideagen | YEAR END RESULTS 2019-20

OUR PILLARS

Our business is built around 3 pillars:

PEOPLE		CUSTOMERS		PRODUCTS

Our people remain our greatest arsenal. They represent Ideagen across a variety of sectors in a growing number of markets. They carry with them intricate knowledge of our products and sub-brands they represent. This allows for an informed discussion with customers and prospects alike as to how Ideagen's growing suite of products can best assist them. In turn, we as Ideagen work hard to invest in our people both from a knowledge and cultural perspective, so they can get the best out of being a part of the Ideagen family.

Our purpose is to make the customer experience as simple, efficient and effective as possible, helping customers reduce time to value and achieve their desired outcomes using our solutions. Our customers views are equally as important to us. Working closely with them, their opinions go some way in determining how our products evolve and equally how they continue to remain relevant in an ever changing global market dynamic.

Our products are designed with our customers in mind. Through our products we aim to save you time, money, encourage safety and ensure you remain compliant. We take the time to listen and understand our customers' requirements and then look to see how best we can service these through existing and future releases. In turn, ensuring our products remain competitive and cutting edge, whilst continuing to deliver value to our customer base.

Our focus is always on investing in our people so we can provide the best solution to our customers. The better job we do for customers, the more we will improve sales; the more our sales improve, the more we can reinvest into our people and products to further improve our customers' success.

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Ideagen | YEAR END RESULTS 2019-20

QHSE - QUALITY, HEALTH, SAFETY AND ENVIRONMENT

USE CASES	•	Attain operational excellence	VERTICALS	•	Healthcare
							•	Manage risk		•	Life Sciences
							•	QMS:		•	Manufacturing
								- End-to-end quality throughout the organisation		•	Aviation
								- Support the shift from digitisation to digitalisation
									• Consumer packaged goods (food and drink)
							•	HSE:

• Incident reporting
• Assure regulatory compliance
• Surface, consolidate, analyse and report HSE data

CUSTOMER EXAMPLES

• WHO:	MARKET SIZES	•	Health, Safety and Environment = ~$1bn
Spire Pathology
	•	Quality Management System = ~$750m

• WHAT:
  Require software to support a single quality management system (QMS) across the UK
• WHY:
  Required to manage ISO 15189 compliance at 22 pathology laboratories across the UK
• BENEFIT:
  Achieved ISO 15189 accreditation at all 22 pathology laboratories across the UK

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Ideagen | YEAR END RESULTS 2019-20

ARC - AUDIT, RISK AND CORPORATE COMPLIANCE

					• Internal audit & SOX management		•	Financial
USE CASES	VERTICALS
					• Risk and control assessment & mitigation		•	Government
					• Risk modelling & prioritisation		•	Telecommunications
					•	Cross-organisational reporting		•	Banking
					•	Intuitive data analysis		•	Energy/Utilities
					•	SM&CR		•	Insurance

CUSTOMER EXAMPLES

•	WHO:	MARKET SIZES	•	Audit management = ~$700m
	BDO
		•	Risk & Corporate Compliance
•	WHAT:			management = ~$950m
	Needed software to strengthen the Three		•	Certifications = ~ $250m
	Lines of Defence model to optimise risk
	management

• WHY:
  Helped ensure the maintenance of high and consistent quality standards throughout.
• BENEFIT:
  Consistent methodology compliant with risk and auditing standards

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Ideagen | YEAR END RESULTS 2019-20

DCC - DOCUMENT COLLABORATION AND COMPLIANCE

USE CASES

• Review and Co-Authoring

• Clinical Trial Publication

• Regulatory Documents

• Bids and Proposals

• Compliance Reports

• Legal Contracts

VERTICALS

• Life Sciences

• Healthcare
• Defence
• Government
• Aerospace

CUSTOMER EXAMPLES

• WHO:
  World Health Organisation
• WHAT:
  Required software to review policy documents, normally conducted face to face, in a secure, online environment
• WHY:
  Ensure social distancing is maintained whilst delivering upon the primary objectives of the forum
• BENEFIT:
  Achieving global collaboration on critical
  World Health issues. Saving time and secure.

MARKET SIZES

• Team Collaboration Applications = ~$2.7bn

• Proposal Management Software = ~$1.3bn

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Ideagen | YEAR END RESULTS 2019-20

ORGANISATIONAL CHART

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Ideagen | YEAR END RESULTS 2019-20

SUMMARY

• Continued organic growth
• Strong platform for future growth
• Diverse and blue chip customer base
• Strong product development with integrated solution set
• Fragmented market with acquisition opportunity
• 10 years of strong performance
• Successful transition to SaaS
• High Quality of Earnings with 76% recurring revenue
• Team of Domain Experts and Thought Leaders
• International growth and development
• Large £2.5bn market opportunity
• Confident of continuing success

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Ideagen | YEAR END RESULTS 2019-20

APPENDIX

Ideagen | YEAR END RESULTS 2019-20

ACQUISITION TIMELINE

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Ideagen | YEAR END RESULTS 2019-20

MARKETING APPENDIX

FY19/20

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Ideagen | YEAR END RESULTS 2019-20

NUMBER OF ACCOUNTS: FY19/20

1,410 customers sit within

the high value bracket

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Ideagen | YEAR END RESULTS 2019-20

SALES STATS: FY19/20

4,449	2,241
sales opportunities	deals won
created

104	1,806
sales deals above	additional sales/
value of £50,000	expansions within
	existing customer base

84

number of countries in which sales were attained

£45.6m

open sales pipeline at

30 April 2020

458

new logo wins with largest sector growth across Life Science, Healthcare & Public Sector, Financial Services, Aerospace

£13.1m

combined value of top 100 sales opportunities at 30 April 2020

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Ideagen | YEAR END RESULTS 2019-20

BOOKINGS BY VERTICAL SECTOR FY2019/20

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Ideagen | YEAR END RESULTS 2019-20

HISTORY OF RECURRING AND SAAS REVENUE

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Ideagen | YEAR END RESULTS 2019-20

IDEAGEN PEOPLE

LOCATION

UK Office Based	Bulgaria
Uk Home Based	Ireland
Malaysia	Middle East
USA	France

ROLE

Strategic Development Sales & Marketing

Customer	Senior Management
Governance, Risk &	Non Executive
Compliance
Operations

LENGTH OF SERVICE

Up to 12 months

1-3 years

3-6 years

6-10 years 10+ years

AGE

<30 30-4040-5050-60 60+

GENDER

Male

Female

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Ideagen | YEAR END RESULTS 2019-20

ACTIVE INTEGRATION - WHY BOTHER?

OBJECTIVE:

REDUCE RISK	INCREASE SCALABILITY	DRIVE EFFICIENCY
		& PRODUCTIVITY

Integration at all cost - optimize and balance 'Risk & Reward'

• Replicate best practice and spread skills
• Domain expertise
• Integrated functions: IT, Support, Finance, Administration
• Centralised systems & Infrastructure
• Quality Management Information (MI)
• Organisational Debt

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Ideagen | YEAR END RESULTS 2019-20

INTEGRATION SNAPSHOT

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Ideagen | YEAR END RESULTS 2019-20

PLATFORMS

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Key Deliverables ICSA, QP8 & Coruson II

Ideagen | YEAR END RESULTS 2019-20

2019-20 FINANCIAL HIGHLIGHTS

£56.6m	76%	38%	19%
Total revenue	Level of	Growth in	Organic ARR Growth
	recurring revenue	recognised recurring
		revenue

76	97%	£11.1m	£18.5m
Days Sales	Cash from	Free Cash Flow	Adjusted EBITA*
Outstanding
operations

*IFRS16 basis before taking into account share-based payment charges, costs of acquiring businesses, restructuring costs and exceptional items

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Ideagen | YEAR END RESULTS 2019-20

STATEMENT OF COMPREHENSIVE INCOME	30th April 2020	30th April 2019
	£'000	£'000
Revenue	56,565		46,667
Cost of sales	(5,125)		(3,900)
Gross profit
51,125		42,767
Operating costs	(31,917)		(28,494)
Profit from operating activities before depreciation, amortisation, share-based payment charges and exceptional items
18,523		14,273
Depreciation and amortisation	(12,927)		(9,391)
Cost of acquiring businesses	(402)		(1,268)
Restructing costs	(830)		(479)
Share-based payment charges	(1,710)		(1,491)
Exceptional impairment of receivables	(1,989)		-
Profit from operating activities
665		1,644
Finance costs	(799)		(263)
Profit before taxation	(134)		1,381
Taxation	(59)		4
Profit for the period	(193)		1,385
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translating foreign operations	508		641
Corporation tax on exercise of options	1,447		537
Total comprehensive income for the period attributable to the owners of the parent company:	1,762		2,563
Unadjusted earnings per share	Pence	Pence
Basic	-0.09		0.65
Diluted	-0.09		0.62
Adjusted earnings per share
Basic	5.46		5.01
Diluted	5.36		4.80

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Ideagen | YEAR END RESULTS 2019-20

STATEMENT OF FINANCIAL POSITION	30th April 2020
30th April 2019
	£'000	£'000
Assets and liablities
Non-current assets
Intangible Assets	113,788			90,749
Property, plant and equiptment	1,404			1,069
Right of use assets	8,312			-
Lease receivables	403			-
	123,907			91,818
Current Assets
Trade and other receivables	18,441			17,547
Lease receivables	89			-
Financial instruments	92			-
Cash and cash equivalents	8,216			6,199
	26,838			23,746
Current liabilities
Trade and other payables	6,941			6,043
Current income tax liabilities	588			387
Lease liabilities	1,039			-
Financial instruments	116			-
Short-term borrowings	25,000			7,500
Deferred revenue	22,799			18,570
Contingent consideration on business combinations	-			769
Deferred consideration on business combinations	525			1,269
	57,008			34,538
Non-current liabilities
Lease liabilities	7,725			-
Deferred income tax liabilities	9,103			7,344
Net assets
76,909			73,682

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Ideagen | YEAR END RESULTS 2019-20

STATEMENT OF FINANCIAL POSITION (CONTINUED)	30th April 2020
30th April 2019
	£'000	£'000
Equity
Issued share capital	2,266			2,198
Share premium account	55,394			53,948
Merger reserve	1,658			1,658
Share-based payments reserve	2,370			1,440
Retained earnings	13,902			13,597
Foreign currency translation reserve	1,349			841
Equity attributable to the owners of the parent	76,909			73,682

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Ideagen | YEAR END RESULTS 2019-20

STATEMENT OF CASH FLOWS	30th April 2020
30th April 2019
	£'000	£'000
Cash flows from operating activities
Profit for the year	(193)		1,385
Depreciation of property, plant and equipment	614		463
Amortisation of intangible non-current assets	11,268		8,928
Amortisation of right-of-use assets	1,045		-
Profit on disposal of property, plant and equipment	-		(7)
Share-based payment charges	1,710		1,491
Finance costs recognised in profit or loss	799		263
Taxation credit recognised in profit or loss	59		(4)
Business acquisition costs in profit or loss	402		1,268
Restructuring costs in profit or loss	830		479
Exceptional impairment of receivables	1,989		-
Loss on transfer to sublease	5		-
Increase in trade and other receivables	(2,217)		(3,914)
Increase in financial instruments debtor	(92)		-
Decrease in trade and other payables	31		(444)
Increase in financial instruments creditor	116		-
Increase in deferred revenue liability	1.691		2,438
Cash generated by operations	18,057		12,346
Finance costs paid	(1,002)		(323)
Income tax paid	58		(248)
Business acquisition costs paid	(877)		(915)
Restructuring costs paid	(218)		(479)
Employer's national insurance paid on share-based payments	(20)		(730)
Net cash generated by operating activities	15,998		9,651

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Ideagen | YEAR END RESULTS 2019-20

STATEMENT OF CASH FLOWS (CONTINUED)	30th April 2020	30th April 2019
	£'000	£'000
Cash flows from investing activities
Net cash outflow on acquisition of businesses net of cash acquired	(24,091)			(27,252)
Payments of deferred consideration on business combinations	(1,269)			(460)
Payments of contingent consideration on business combinations	(769)			-
Payments for development costs	(3,929)			(2,683)
Payments for property, plant and equipment	(895)			(679)
Purchase of software	(35)			-
Proceeds of disposal of property, plant and equipment	-			7
Net cash used in investing activities	(30,988)			(31,067)
Cash flows from financing activities
Proceeds from placing of equity shares	-			20,000
Payments for share issue costs	-			(625)
Proceeds from issue of shares under the share option schemes	1,307			397
Proceeds from issue of shares under the share incentive scheme	92			90
Cost of free shares purchased under the share incentive scheme	(3)			(3)
New short-term borrowings	21,250			6,000
Repayment of short term borrowings	(4,007)			(3,250)
Principal paid on lease liabilities	(1,020)			-
Lease debtor receipts	11			-
Equity dividends paid	(656)			(555)
Net cash generated by financing activities	16,974			22,054
Net decrease in cash and cash equivalents during the year	1,984			638
Cash and cash equivalents at the beginning of the year	6,199			5,532
Effect of exchange rate changes on cash balances held in foreign currencies	33			29
Cash and cash equivalents at the end of the year	8,216			6,199

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