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www.servelec-group.com
Servelec Group Plc
October 2016 Alan Stubbs, Chief Executive Officer Mike Cane, Chief Financial Officer
www.servelec-group.com
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
www.servelec-group.com
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.
www.servelec-group.com
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
*
www.servelec-group.com
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
Acute New market entrant
£70m
Hospedia, Vitalpac, Realtime, Patienttrack
Acute New market entrant
£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
www.servelec-group.com
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
www.servelec-group.com
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
www.servelec-group.com
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
www.servelec-group.com
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
www.servelec-group.com
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
www.servelec-group.com
Servelec Technologies: End-to-end data acquisition and control 10
www.servelec-group.com
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
www.servelec-group.com
12 Servelec Technologies: Channel Development Focus
www.servelec-group.com
Key Financial Highlights 13
2015 by Division
Revenue Operating Profit* (Excluding central costs)
Order Entry
Health & Social Care Controls Technologies
www.servelec-group.com
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)
www.servelec-group.com
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
www.servelec-group.com
Additional Slides
www.servelec-group.com
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)
www.servelec-group.com
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)
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