October 2016 Alan Stubbs, Chief Executive Officer Mike ... · Alan Stubbs, Chief Executive Officer Mike Cane, ... IMS Maxims, InterSystems, Emis Ascribe Acute New market entrant £70m

www.servelec-group.com

Servelec Group Plc

October 2016 Alan Stubbs, Chief Executive Officer Mike Cane, Chief Financial Officer


Servelec Group Overview 1

Oil & Gas

Power & Nuclear

Water

Broadcast

Utilities

Acute

Mental, Community and Child Health

Health & Social Care

Finance

Social Care

Proprietary Software Systems, Support & Hosting

Proprietary Hardware, Software

& Control Systems

57 employees

280 employees 328 employees

Education


Investment Proposition 2

Servelec is a UK-headquartered technology group, with significant intellectual property, providing software, hardware and services globally.

• High recurring revenues and high margin repeat business.

• Diversity of end markets and offerings provide balanced portfolio and mitigates risk.

• Organic growth is driven by legislative change and efficiency savings in end markets.

• Bolt-on acquisitions where beneficial to provide further growth.

Near Term Growth Drivers

Health & Social Care

• Legislation in Social Care driving system refresh.

• Opportunities in local markets (Scotland, Ireland, Wales).

• Opex reduction and brownfield refurbishment driving control system spend

• Current water industry investment cycle (AMP6) gaining momentum

• Acceleration in global product sales.


Servelec Health & Social Care: Our Proprietary Products 3

NHS Local Government

Acute Non-Acute Social Care Education

Oceano: Modern Patient Administration System /Electronic Patient Record

Flow: Manages Patient tracking in hospitals

PICS: ePrescribing and Clinical Decision support

*JV with University Hospital Birmingham (UHB)

Market leading Electronic Patient Record for Mental Health, Community and Child Health

Fully integrated Social Care case management software encompassing:

• Children’s

• Adults

• Finance

A practical, clear and reliable way of managing critical information around the education and safeguarding of children

*


4 Servelec Healthcare: Market Landscape

Product Market(s) Served

Market Share

Cumulative value of potential new contracts coming to market during next five years

Competitors

Mental Health Community Health Child Health

49% £50m TPP, Emis , ACS, Civica

Acute New market entrant

£520m Allscripts, CSC, System C, IMS Maxims, InterSystems, Emis Ascribe


£70m

Hospedia, Vitalpac, Realtime, Patienttrack


£50m

JAC, Emis Ascribe

To capitalise on future market opportunities:

Investment in sales team Investment in further product development Excellent customer service through delivery and ongoing support


Social Care and Education: Market Landscape 5

Combined market position of products across Adults, Children’s and Finance

Current Position: Social Care 50%

Rest of market 25% 28%

18% 15%

15% 50%

Current Position: Education

30% 60%

10%

Product Market(s) Served Market Share Cumulative value of potential new contracts coming to market during next five years

Competitors

Local Government & Social Care

28% (combined)

£100m Liquidlogic, OLM, Northgate

Local Government & Social Care

28% (combined)

(Included in Mosaic) OLM, Northgate, OCC, CACI, In-house solutions

Local Government & Education

30%

£50m

Capita, CACI, Liquidlogic


Proprietary IP (Hardware and Software) and System Integration Best-of-Breed Systems Integrator

Systems Typical contract values

Production Control Systems ("PCS") £1m - £5m

Safety systems £0.5m - £5m

• Emergency shut down (“ESD”)

• Fire and Gas detection (“F&G”)

Systems Typical contract values

Telemetry systems (Utility)

• Regional control – Scope5 software £1m upwards plus ongoing maintenance

• Remote Telemetry Units ("RTUs") £1k / unit

• Business Optimisation Software £50k+ plus share of savings

6 Servelec Automation

2015 Revenue Split across Automation 2015 Operating Profit Split across Automation

Controls Technologies


Servelec Controls (Oil and Gas) – Addressable Market

Upstream Oil and Gas Addressable core market £200m per annum

Midstream / Downstream & Infrastructure Addressable market £100m per annum

Significant potential – strategy in place to increase market share by 2020

7


Oil and Gas – Remote Operation and Monitoring Solution

Key Benefits::

Reducing intervention times

Reducing use and costs of helicopters

Reduction in labour and insurance costs

Transferring life support equipment

Removing all redundant plant

Reduced logistics costs

8

Automating production and monitoring from onshore ensures UKCS viability


Pre-2015: Focus on decommissioning

Addressable market: £50m per annum

2016-2020 : realising full potential of new & existing clients and new markets, focus on nuclear, power and defence. Total market value ~£10bn in 2016

Addressable market: £200m pa

Decommissioning Addressable market £75m pa

Power Addressable market £50m pa

Defence Addressable market £50m pa

Infrastructure Addressable market £25m pa

9 Power & Nuclear: Addressable Market & Competitive Landscape

Competitive Landscape:

• Highly regulated

• Significant barriers to entry

• Value and safety driven

• OJEU procurement rules

Significant untapped potential – growth underpinned by market opportunity


Servelec Technologies: End-to-end data acquisition and control 10


Servelec Technologies: Current Market Positioning

Product Market Sectors Market Share Cumulative value of potential new contracts coming to market during next five years

Competitors

RTUs – Global

Transportation, Broadcast, Telecomms, Water

0.01% £5bn • Schneider • Rockwell • Siemens • Moxa

RTUs – UK

Water Broadcast

30% £34m (RTUs) £30m (loggers)

• Schneider (RTUs) • Technolog

(loggers) • Metasphere

(loggers)

SCADA / Telemetry

Water Transportation Energy

30% £80m – UK £100bn - globally

• Schneider • Siemens • Rockwell • Honeywell

Business Optimisation Optimiser

Water Creating the market

£70m - UK Creating the market globally

• Takadu • Decerto • SEAMS

11 Global RTU Sales

Entry into new markets

Expanding customer base

Opex reduction

AMP6 spend increasing

Actively selling products through distribution channels

Remote operations


12 Servelec Technologies: Channel Development Focus


Key Financial Highlights 13

2015 by Division

Revenue Operating Profit* (Excluding central costs)

Order Entry

Health & Social Care Controls Technologies


14 Servelec Group at H1 2016

1 Adding back exceptional costs, share based payments

£28.4m -5% (H1 2015: £30.0m)

£4.5m -28% (H1 2015: £6.3m)

£37.4m -15%

(H1 2015:£44.1m)

H1 2016 Results Summary

38% 168% (H1 2015)


Outlook 15

Expect to capitalise on market opportunities enabling us to return to growth

• Revised outlook on track in 2016 with a return to growth in 2017

• System refresh in Social Care market drives market share gains

• Digital Maturity agenda driving Healthcare market along with opportunities in local markets

• ‘Lower for longer’ oil price focuses customers on Opex reduction in which we have forty years experience

• Power & Nuclear continuing to expand in target markets

• Global RTU sales strong, AMP6 pent up demand shows signs of unlocking in 2017


Additional Slides


1977 Servelec commenced

operations and then grew out of control systems in

Sheffield steel

1993 Entered healthcare

market (with Intehealth

from New Zealand)

2000 Servelec acquired by

CSE Global of Singapore

2006 Healthcare commences contract with BT under

NPfIT to provide systems to up to 41 Mental Health

and Community Health Providers

2010 Servelec acquired

Systems Integration &

Automation Ltd

1988 Acquired by Portals – Part

of Portals Computer Technology

1995 Portals acquired by De La

Rue; Management Buy-Out of Servelec backed by 3i

2001 RiO launched

2006 Servelec acquired Scomagg

2008 Current divisional

structure implemented:

Servelec Healthcare and Servelec Automation

2013 Servelec acquired

Tynemarch UK

Servelec acquired the Semaphore Group

Disposal of Servelec

Controls s.r.o

1977 1988 1993 1995 2000 2001 2006 2008 2013 2010

Key Milestones

1984 First Telemetry System:

SCOPE1 First RTUs

Developing IPR

1984 2014 2015 2016

2014 Acquired Corelogic

2014 Launched

Optimiser & Flowsure

2015 Acquired Aura

2015 Exited NPfIT

2015 Launched

S2000 nano

2016 Acquired Synergy

2016 Acquired Abacus

2013 Successful IPO on

main market

(a)


Servelec Controls – Bespoke Solutions

Delivering mission-critical control systems for national Infrastructure

Feed T&M Fixed Price in-house work Site T&M Recurring revenues

(b)

Documents

October 2016 Alan Stubbs, Chief Executive Officer Mike ... · Alan Stubbs, Chief Executive Officer Mike Cane, ... IMS Maxims, InterSystems, Emis Ascribe Acute New market entrant £70m