Marlowe : Reports and Accounts March 2022

Marlowe plc

Annual Report and Financial Statements

for the year ended 31 March 2022

Contents

Highlights & overview

1. At a glance
2. 2022 key highlights
3. Group structure

Strategic report

4 Chairman's statement

1. Marlowe's Vision: End-to-end compliance
2. Operating in highly attractive markets
3. Chief Executive's report

1. Investment proposition

1. Our software offering

1. Q&As with our CTO

1. Building our leading eLearning platform

1. KPIs
2. Marlowe's model for creating growth
3. Governance, Risk and Compliance

1. WorkNest

1. Testing, Inspection and Certification

1. Hydro-X- Our acquisition strategy in action
2. Chief Financial Officer's review

1. Products, Planet, People

1. Directors' duties
2. Risk management

Corporate governance

1. Board of Directors

1. Directors' report

1. Corporate governance statement

1. Letter from the chair of the remuneration committee

1. Directors' remuneration report

1. Statement of Directors' responsibilities
2. Independent Auditor's report

Financial statements

1. Consolidated statement of comprehensive income
2. Consolidated statement of changes in equity
3. Consolidated statement of financial position
4. Consolidated statement of cash flows
5. Notes to the Group financial statements

1. Company statement of changes in equity
2. Company statement of financial position
3. Company accounting policies
4. Notes to the Company Financial Statements

Additional information

137 Trading record, financial calendar and further information

137 Officers and advisers

To download the full Annual Report and

Financial Statements, and for further information about Marlowe visit www.marloweplc.com

Strong financial performance

Revenue

FY22

£315.9m

FY21

£192.0m

£315.9m

FY19

£128.5m

CAGR

FY20

£185.4m

+65%

FY18

+41%

£80.6m

Adjusted EBITDA1

FY22

£54.4m

FY21

£28.7m

£54.4m

FY19

£11.0m

CAGR

FY20

£22.1m

+90%

+66%

FY18

£7.2m

Adjusted PBT2

FY22

£38.1m

FY21

£17.1m

£38.1m

FY19

£8.9m

CAGR

FY20

£13.2m

+123%

FY18

£5.8m

+60%

Adjusted basic

FY22

37.7p

earnings per share3

FY21

25.0p

37.7p

FY19

18.8p

CAGR

FY20

23.6p

+51%

FY18

+28%

14.0p

Statutory results	FY22	FY21
Operating profit	£10.5m	£1.0m
Profit/(loss) before tax	£5.9m	£(1.6)m
Earnings per share - basic	0.8p	(3.1)p

1. Adjusted earnings before interest, tax, depreciation and amortisation ("EBITDA") is EBITDA before separately disclosed acquisition and other costs as disclosed in note 4 and 5.
2. Adjusted profit before tax ("PBT") is PBT before separately disclosed acquisition and other costs as presented within the Chief Financial Officer's review on page 32.
3. Adjusted earnings per share is earnings per share calculated on adjusted PBT. These are all non-IFRS measures.

Further information about these measures and the reasons why we believe they are important for an understanding of the performance of the business is provided in the Chief Financial Officer's review on page 32.

Marlowe plc Annual Report and Financial Statements 2022

At a glance

We deliver compliance services and software across health & safety, HR & employment law, occupational health, fire safety & security, and water & air hygiene - all of which are vital to the well-being of our customers' operations and are invariably governed by stringent regulation.

Our proposition helps our clients reduce risk, assure regulatory compliance, and achieve total peace of mind.

3m	3,000	40m+	50+
service visits &	fee earning	assets tested	specialist
compliance
advice provided	and inspected	compliance
experts
annually	each year	services

1m+	50,000+ c.25%	~40%
software	customers across	UK commercial	customers
users	premises	using multiple
the UK
	service-clients	Marlowe services

Marlowe's unique strength is that it provides a range of closely related regulated compliance services and software platforms, each of which is delivered by one of our specialist businesses. Individually, these businesses are leaders in their fields but together form a group that can provide our customers with a comprehensive and integrated approach to their safety, regulatory compliance, business efficiency and employee welfare.

Our clients can be found in most office complexes, high streets, leisure facilities, manufacturing plants, industrial estates, include thousands of SMEs, large corporates, facilities, property management providers, local authorities, NHS trusts, and FTSE 100 companies.

information Additional statements Financial governance Corporate report Strategic overview & Highlights

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2022 key highlights

Marlowe delivered further strong financial and strategic progress as the leader in compliance services & software.

Revenue growth

2022: £315.9m

2021: £192.0m

Underlying organic growth1

Cash conversion 2

Combined underlying cash conversion for the 24-month period

Net zero carbon emissions4

Run rate revenue 3

+65% +90%

+9% 85%

91% 9%

2035 £314m

£434m £77m

Adjusted EBITDA growth

2022: £54.4m

2021: £28.7m

Recurring revenue

Recurring revenue is defined as subscription revenue, software license revenue and multi-year contracted services

SaaS ARR

SaaS ARR is defined as the annual value of the recurring revenue components of subscriptions for our software products, normalised to a one-year period

FY22 capital deployed on acquisitions

Based on initial capital deployed

Run rate

EBITDA 3

• Organic revenue growth % on a like-for-like basis is defined as the year-on-year growth of our entire business. This includes the growth or decline of acquisitions from the day of completion, by including their performance from the corresponding prior period. Organic revenue excludes the

estimated distortive impact from the prior-period effects of COVID-19 in FY21. Including this estimated impact, organic growth was +11%.

• In FY21 the group benefited from a significant reduction in working capital as a result of COVID related VAT and payroll tax deferrals. These

factors have normalised in the current year. To get a normalised cash flow a 24-month period has been used.

• Run-rateis based on year-end performance annualised and adjusted for post year end acquisitions.
  4 Scope 1 and Scope 2 GNG emissions

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Group structure

Marlowe organises its end-to-end compliance solution across two divisions: GRC and TIC. GRC is a consulting and software focused division and TIC specialises in field-based assurance. Together they allow us to offer a full compliance package.

report Strategic overview & Highlights

Governance, Risk

and Compliance (GRC)

Consulting and software solutions to mitigate business risk and ensure legally compliant governance standards

Testing, Inspection

and Certification (TIC)

Recurring testing and inspection regimes to certify properties and systems are safe and compliant

governance Corporate

RECURRING SERVICE EXAMPLE

Compliance	Health &	Employment	Occupational	Fire Safety	Water
Software	Safety	Law/HR	Health	& Security	& Air Hygiene

ALL UNDERPINNED BY EVER-EVOLVING REGULATIONS

• H&S at Work Act 1974	• Regulatory Reform (Fire Safety) Order 2005
• UK GDPR Act 2021	• Corporate Manslaughter Act 2007
• Management of H&S 1999	• H&S at Work Act 1974
• Employment Rights Act 1996	•	ACoP L8
• Employment Relations Act 1999	• HSG 274 / TR19
• Workplace (Health, Safety and Welfare)	•	COSHH
Regulations 1992

£185m		30.1%		£249m		13.8%
Run rate		Adj. EBITDA		Run rate		Adj. EBITDA
revenue		margin		revenue		margin

information Additional statements Financial

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