Elixirr International (LSE:ELIX) — Annual Results

0:01 Good afternoon, and welcome to the ELIXIR INTERNATIONAL PLC Annual Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses which is appropriate to do so. Before we begin, I would like to submit the following poll,

0:33 and I would now like to hand you over to CEO, Steven Newton. Good afternoon to you. Thank you. Good afternoon to everyone who's on on in in this presentation. Thank you for taking the time to to hear our presentation to you today. We're obviously very excited about our results this year. We've had a fantastic year once again. Since IPO, we've obviously had we've never missed a number. We've always we've done eight upgrades. So we're really proud of of the performance of our company through the through the period. And we've also made a very big announcement, obviously, as with our results is that we're gonna be moving to the main market, and I can talk to you a little bit about that in detail. Just so you know, I am Steven Newton, the founder, CEO of the company. I founded the company with Graham. My team will introduce themselves as we as they pick up sections of the presentation.

1:23 We don't wanna do a little thing upfront. We'll we'll each introduce ourselves at the start of our our little sections of the presentation we each be delivering. But let me just comment a little bit about the industry and why we think consulting is such a good investment for investors. It is an industry which is typically isolated or at least restricted to private companies. I mean, if you look at all the big brands, the KPMGs, the PWCs, the big four, the MBBs, These are largely private companies, and there's a reason they're private is they they make a lot of money, and they're good industries. And I've been in this industry for thirty years now. And in all thirty years, the consulting industry has grown six to 10% a year. And in those thirty years, we've had multiple recessions. We have the dot com bust. We have the two thousand and nine financial crisis.

2:10 And through all of those incidents, the consulting industry continues to grow. And the reason this is the case is, let me give you my perspectives on this, is business is getting more and more complex over time, not less and less complex. And with as with this complexity, there there there comes a need for more and more expertise that you could can't carry internally to companies. And so they turn to the consulting world to provide them that expertise. And examples of these are things like artificial intelligence is the latest one, but you could talk about the .com bubble and the Internet. I mean, I was I I did a .com start up in 2000, but it's almost twenty five years later, and you're still seeing well, I mean, we still do a lot of business helping clients how to use the Internet and digital technologies to be able to capture more market share, make themselves more efficient, etcetera, etcetera. So artificial intelligence is just another one of those technology disruptions that will last for ten, twenty, thirty, forty, fifty years. It's it's if those of you who were around back in the .com days, would have heard loads of rumors or speculations about the death of a high street. That never happened. And the same is gonna happen with AI. People are saying jobs are dead. It's just morphing of jobs.

3:23 You need to use those technologies to do different things in business and be more efficient and make yourselves, well, efficiency, but also to provide better service and create revenue for your clients. So those big macro disruptive events outweigh the the short term economic cycles that we see. Even the Trump tariff thing, Graham can address that when he talks to a section of our presentation, but we we we don't believe that'll affect our business terribly, in fact, very minimally, and if at all. And so just in in context, the other things that I talked to is things like regulation. Regulation is continually increasing. When regulation enters the market, businesses need to turn to consultants to help them fix those problems. And and these things are just continuous trends that overlay over the top of market cyclical events.

4:11 And so this is why consulting is is almost a countercyclical bet to for for shareholders, and and currently, there's not many options. There's only really three consulting firms which you could kind of refer to as similar ish to ELIXION. This is why we're trying to build this company. And and even the two that I'm gonna quote are quite different in some respects. Accenture and IBM are obviously listed companies, but I've I've worked in both those companies. And Accenture is a, outsourcer slash systems integrator, not a strategy firm. They do 98% of their business in outsourcing and systems integration and a small piece in the actual strategic change consulting element. They use that as the lever to go off to outsourcing and systems integration. Then you talk about IBM. It's a product company masquerading as a services business in my view. It's predominantly products, and it actually sells its services in a product sense. So it doesn't tailor its services to its customers.

5:05 And then the the third option is Booz Allen, which is listed on the Chicago stock stock exchange. In terms of the type of work they do, they do very similar work to us. But the problem with them is that they're very public sector. We're zero public sector. And if you look at the Doge events of the recent weeks with mister Trump, they are gonna be suffering under that, and you will see later when we talk through our diversification strategy why we think the multiple industry, multiple geography, and and multiple capability is the way to protect a strategy business like ours from those events within geographies or within industries. Any case, I thought I'd just give you that context because, you know, this is why we are all shareholders of this business because we believe it is an industry that is underrepresented in the public space. We wanna build a public company that shareholders can invest in. It's a fantastic industry to invest in. We work in the industry every day. We see the the the opportunity and the and the the the growth potential, and it's borne out by our results. And this year is no different.

6:06 So we believe that that results we're delivering is not unusual, and I'll I'll we'll talk through those in a little bit more detail now. So just with regards to our specific '24 highlights, our revenue is up 30%. 30% of that is organic. Just to comment on that, you know, we believe that well, we have done 30% compound growth rates since IPO. In fact, we've done probably higher than that since 2014. So we've we've been consistent growing at this rate. And people may say this is an aggressive growth rate, how sustainable is it? Let me just give you a bit of an observation on that. We believe somewhere between 1020% organic growth is a sustainable organic growth rate because in a people business like ours, you have to hire people into the business. And and if you hire any more than that, you start dropping standards, and you don't start delivering the same outputs and and performance that that you should be delivering. And and that's the other point I'd like to make is if there's a pyramid of of of quality in the consulting world, if you're at the top end of the quality pyramid, if if consulting is going to be cut by executives, it's the bottom end of that consulting pyramid that's cut, not the top end. If you're dealing with the chief executive, they don't tend to cut consulting projects when it's their project where they're trying to

7:23 engage or at least change their business model. So you gotta try to stay at the top end, and that's what we do. We're a high performance business. We expect high performance from our people. We reward them very well with equity, so we make them owners. We always make this we've got this belief that, you know, if you rent a house, you don't care about it nearly as much as if you own it. And so all our employees are owners, and all our partners are owners. And we stand side by side with any financial investor in that ownership mindset. So we we operate as if we we we own the business, which we do, and we we hold all our partners to account to their individual p and l's right down to the EBITDA that adds up to the EBITDA we we report to you today. Inorganic growth is the other side to the equation. So if we're growing 10 to 20% a year, we wanna be growing another 10 to 20%. Graham will talk talk to this in a little bit more detail around our acquisition strategy.

8:16 And if you sum those two things together, you're gonna get somewhere between 2530% a year if you're acquiring one or two businesses with a 10 to 20% EBITDA slash revenue slash EV uplift. And likewise, if you do the same on organic, you're gonna get the the two of them turning out at around 30% on average 25 to 30% on average over time. The one company we did acquire this year, Hypothesis, fantastic company. Graham will talk to you a little bit more about that. Gives us fantastic capability, but also gives us a whole entry into the tech space. We wanted tech in a big way. They this company does work for five of the magnificent seven. So these are all household names. Gives gives us a great opportunity to cross sell, which is a very big opportunity in our acquisition strategy. And, again, I think it's, Graham or m, one of the two, or maybe even Nick will be talking about our cross sell and how much we've done since we've been able to acquire the six companies we have post IPO.

9:11 Our brand is building. We're getting fantastic awards, but more importantly, we're starting to invest in our brand. We've got about 7,000,000 of revenue in our revenue reported this year of a 110.3 that comes from direct inbound queries as a result of people finding us on the Internet, seeing our brand on LinkedIn. We've put a million pounds into that, and we're seeing a £7,000,000 return in revenue terms, EBITDA times 30% or 28% against that. I place that bet every day. So we're gonna continue to invest in the brand, and make sure that we can get inbound opportunities that come at us that we would never have got if we weren't building our brand recognition. Clearly, the clients are are super important. In fact, they are the business, and we're so proud of things like 75% repeat rate. That means our clients are very happy with the the business that we we we do for them. If they weren't, they wouldn't buy us back. Likewise, we've gone up 27 to 27 gold clients with 40 new clients in the year. We've secured a revolving credit facility of 45,000,000 for acquisitions and and other cash events.

10:16 We used this to buy hypothesis, but it was all repaid by year end. This is a very cash generative business, and that's a fantastic thing about it. So we we use this and it's another thing that Mick will talk to you about is we use our cash, obviously, to minimize dilution in our business. We've quadrupled the size of the company in revenue terms and multiplied it by three in in mark market cap terms, which represents the undervaluation, candidly, but multiplied by three in market cap terms with a 6% dilution because we managed our equity awards and our acquisition strategy with equity through using our cash to purchase equity. So we're very mindful of making sure we we manage dilution. And you can see here for for pre IPO employees, they've had a 14 times return.

11:03 So we've got very sticky, loyal, entrepreneurial own ownership mentality people, and it makes a real difference in the performance that we we deliver with our clients. And super proud of this number, 80%. This is our people using their own cap their own salaries, sacrificing their salary, buying into the business because they believe every day they walk in the door and they see how good the business is. So they are almost like your spies, your eyes and ears on the ground, telling you, listen. If we're buying into this business, it's a good business. So, 80% of them buy into the business through the share purchase fee. I'm very proud of that that statistic. Just with regards to ELIXIA's market positioning, I'll hand over to Graham who'll add some more color to my opening comments.

11:49 Thank you, Steve. Hello, everyone. Graham Busby. I'm deputy CEO and and cofounder as as Steve mentioned. So started ELIXIA with him in 2009 and looking forward to going through today with you. Yeah. Just to build on Steve's comments about the the market positioning and the consulting industry.

12:08 It's it's a trillion dollar market. There's always clients who are spending on consulting. In fact, it's it's a bit of a a fallacy that consulting is one of the first things to go in downtimes in in terms of macroeconomic scenarios. I'll get to it a bit later. But if you have a diversified business through capability, geography, and industry, it means that you can change what you're talking to your clients about depending on what their big needs are and and what's happening in the marketplace. So, you know, in in good markets, in growth markets, there's often, you know, talk about revenue, new markets, product innovation. But in in slower markets, you you might start talking about efficiencies and operating models and supply chain and sourcing.

12:57 And we're brilliantly positioned to have all of those conversations. Hence, you know, when Nick gets to show you our our growth rate over previous years, you can see we've been growing 25 to 30 to 35% a year in a market that's growing six or 7% a year. So we're getting market share every single year from our competitors. Who are those competitors? We they fall in three buckets. Steve mentioned the first, the the listed consultancies. That's about 10% of the market, so 10% of the trillion dollars. You can if you if you look at how we've performed as a as a as a company on the stock market in that time, you know, we've created 250% or more returns for our shareholders, which we're very proud of, and I'll show you in a second that outperforms the other listed businesses.

13:48 The rest of the market is established firms and challenger firms, So 90%, roughly half and half. So 45% are established firms. They are companies like McKinsey Bay in Boston, so MBBs of this world, the big four, you know, Deloitte, PLC, etcetera, and all of our women. So all all names that I'm sure you will have heard of, and they have a big chunk of the marketplace. However, again, I'll share in a second how we've been outperforming them since we've been listed from a growth perspective. The rest are in the challenges space. So there are hundreds of thousands of companies, which range from, you know, two to three people all the way up to ELIXIA and passed into billion dollar revenues. This is a massive opportunity for ELIXIA.

14:34 You know, we are selectively choosing the best of of the businesses in this category, to bring into ELIXIA. I can talk to you about how we've done that and what we look for. But, you know, one number we're particularly proud of is since we started this inorganic strategy at IPO, we've created £44,000,000 of cross sell revenue, which is revenue that none of the businesses who joined us or ourselves would have access to were it not for combining our capabilities and having our partners being able to talk to their clients about more things that we do in in different ways and creating that value. Obviously, £44,000,000 of revenue if you take a 30% EBITDA off that, and then you kind of multiply that through is a lot of enterprise value.

15:19 So, you know, this is a strategy that works, and it's one that we're gonna continue come continue to do. Just to give you a bit of a comparison against those buckets, on the left here is ELIXIRR's revenue growth from 2019 to 2023. You can see where the top line there, and then you can see the combination of the different buckets and how we have significantly outperformed them. Yeah. That it's no surprise that the challenger firms are second in that list, you know, their their growth and they're getting market share because they are fantastic at what they do. They wouldn't exist, if they weren't brilliant to what they did because of the big names in the marketplace. So you can see that that opportunity, that gap between us and the established and listed lines and also the the challenger line and that gap is where we can really create some shareholder value in the coming years, and we already have done.

16:14 Looking at the listed firms on the right hand side, again, this is since IPO and and how the various stocks and trackers have performed. Again, you can see how we've outperformed not just the other listed businesses that Steve mentioned, but also some of the the indexes such as the the top 100 businesses on AIM, the FTSE two fifty, etcetera. So we are very pleased with with how how the market has reacted to to ELIXIA. We have diversified significantly, and I I will come back to that later. But just to talk through a couple of points, Steve mentioned a couple. Eight earnings grade eight earnings upgrades since IPO. We're very proud at putting out numbers and then either hitting them or beating them. We we enjoyed doing that.

17:01 Since IPO, we've quadrupled our revenue. We've quadrupled our EBITDA, and we've quadrupled the number of clients that we work with. So so the kind of momentum is certainly there. We've done six acquisitions, which which I can talk to a bit later. That's produced that 44,000,000 of cross sell opportunity. And you can see, you know, in terms of the revenue growth, you know, we we want to to keep producing industry leading numbers in in that in that space alongside the industry leading profitability that the business produces. That said, I'm gonna pass back to Steve, who can talk a little bit about how we we believe there's a value gap that we can fill and how the main market plays into that.

17:48 Yeah. So this is an interesting chart that, we pulled together. You can see along the x axis here is the average revenue CAGR that we've produced and our, chosen competitors here that we can get this information for and our average EBITDA margin for the past three years. And, you can see that that's the x axis where we sit on a on an average basis is over 50%. No one sits there. And then the EV EBITDA multiple is, represented on the y axis here, and you can see that, candidly, we are an undervalued company, and and this represents an opportunity. And as part of the reason we're we're using the move to the main market, there's a few things about that I'll cover in the next chart. But just to flag that for you now, we think this is a a an incredible opportunity for a a rerating.

18:35 But, also, if we continue with this, you know, which we plan to do, as I said, you know, we we we we're comfortable with the target of somewhere between 2530% revenue CAGR around our multiple organic and inorganic strategy, and we we plan to maintain our e v e v EBITDA sorry, our EBITDA margin in the 30% ish range, 25 to 30% range. So Nick will talk to you a little bit more about that.

18:59 We've had market leading performance, obviously. You can see that on the right. And, you know, we're trading at a significant diff discount to our peers with our average target price from our institute or no. From sorry. From our broke brokers saying that we should be trading around £10.37. We happen to agree with this. I would say this a little bit about the market's understanding of what we are. There are very few companies who do what we do in the listed space. So if you wanna look at companies that are similar to us, you look at someone like ABOOSE, but they do entirely public sector. If you wanted to look at another company that could be comparable that doesn't represent MBB, you could look at someone like Oliver Wyman. Interestingly, Oliver Wyman is a company that was exactly the same size as us twenty years ago.

19:45 They got bought by Mercer, and they probably do about 3 to 4 to 5,000,000,000. It's a bit opaque because, obviously, they're within a group. So it's a bit difficult, but that company is probably worth if you do the multipliers on the on the the e the EBITDA as a sub subsidiary, it's probably worth something like $1,010,000,000,000 or something. So, you know, in twenty years, that's easily an opportunity for us to replicate in a public domain setting, and that's what we're going after. Just talking about the move to the main market. Clearly, the AIM market has been a fantastic platform for us. I mean, it it really starts to prove our model out. You know, we wouldn't it's allowed us to do that, the multiple organic, inorganic. It's allowed us to do the ownership mentality. It's allowed us to give our employees that ownership mentality. So it's done a a hell of a lot of good for us, but we've candidly feel like we've a little bit outgrown it.

20:35 The market is it's seen as a small slash mid cap UK platform if it's seen at all by the international players. So the the the simple truth is we are not a UK company. We happen to be headquartered in The UK, but we do 75% of our revenue outside The UK. And so we believe there are shareholders on the main market who will understand that. The the difficulty we also have with being on AIM is as we accelerate our our inorganic growth strategy, Graham always has a difficulty explaining to target acquisitions what shares on the AIM market mean. They're they're they're not a 100% certain what that market means, and in particular, US investors. But they would understand paper on the FTSE main board. So that's a a really big important thing for us to do. There are some things that have been removed, regulatory hurdles that made it a little bit problematic for us to be on AIM, particularly around acquisitions, but but also around reporting frequency.

21:35 Those things have been relaxed and and actually align themselves pretty much with what we do on AIM. So we believe the regulatory burden will will be minimal increase. And there are other opportunities here that we think are super important, things like index inclusion. If we get into the two fifty tracker, two fifty index, we obviously get into the tracker funds, which increase increases liquidity, which is good for all shareholders. We think we're aiming at, you know, twelve to eighteen months away. We wanna be in the in the FTSE two fifty inclusion. So that's the plan and ambition. You know, whether it's earlier or later, it's gonna happen. It's just a question of us getting in there so that we can start improving the liquidity. We think there's greater investor confidence as well as, obviously, the investor base. So very excited by this move. Our employees are buzzing. They they see this as a as a big step forward for us, and and and it's a there's a very good atmosphere in the company right now.

22:31 Nick, if I can hand you on the financial performance. Yes. Thanks, Steve. Hello, everyone. I'm Nick Willott. I'm the CFO. I've been in the business for about five years since just before the the IPO back in 2020. And I want to start before I go into the detail of the FY '24 numbers. The this slide just puts those FY '24 numbers in perspective of of how we performed since 2019, the the year before IPO. And we mentioned before, you know, the the revenue CAGR of 38% since twenty twenty, twenty twenty four, the the

23:01 EBITDA CAGR 34% from 2020 to 2024, and an average EBITDA margin, yeah, at at close to 30% through that time. And, you know, last year, we're very pleased that, yeah, EBITDA last year was more than our revenue had been back in 2019. And and this year, EBITDA in '24 is is higher than revenue was back in 2020. So this year's results are excellent, but they're also you know, they are not unusual. They are the continuation of what we've been doing every year since IPO, and and we have every intention of continuing to to do. Turning to the highlights for 2024. Total revenue was up 30%. Gross profit was up 22%. Adjusted EBITDA was up 23% to £31,200,000, and that's at a 28.0% EBITDA margin.

23:50 That's slightly lower than the 29.6% EBITDA margin last year, which is a combination of the dilutive impact hypothesis and some additional investments we made to to grow the business in areas like like marketing and business development. Our adjusted profit before tax was up 22 in line with the increase in EBITDA, and adjusted diluted EPS was up 16%. That's slightly less than the increase in adjusted profit before tax, but for two reasons. The adjusted profit after tax was up by 19%, so slightly less than profit before tax, and that's the result of the higher higher tax rate we had in The UK impacting which which went up in 2023, so the full year impact of that, and and a slightly higher share count from shares we issued for the acquisitions of a sponsor, Insignium and Hypothesis.

24:39 But I'll come back to issuing shares when we get to the dilution slide because there are the share issues we've done really have been very modest. We are pleased to announce with our results on Monday the final dividend for this year of 11.5 p that we'll be paying in August. That takes our total dividend per share to 17.8p for the year. That's 22 20% higher than last year. And from a cash cost perspective, that's 23% increase in line with the increase in EBITDA, and we intend to continue to grow our grow our dividend in line with increases in EBITDA. Free cash flow, we'll we'll have a slide on that in in a minute, but free cash flow performance was very, very strong in '24, £28,100,000 of free cash flow, an excellent working capital performance.

25:24 And you see this this is a business very much where the EBITDA less corporation tax turns to cash.

25:34 Giving you our usual transparency on revenue growth, this slide shows the progression from 85,900,000 in '23 to a 111,000,000 in '24. The three blocks on the left hand side are the components of organic growth, which is a net 13% organic growth. As Steven says, we we aim for that 10% to 20% level each year. And the three blocks, there there is always some end of life projects in our in our portfolio, but that's very much offset by growth in existing clients of 9,700,000 and new clients of 11,400,000. And we try to balance both of those areas so that we're both expanding the range of services we offer in existing clients as well as bringing new clients into our into our portfolio. And then the growth from acquisition, the contribution of 14,300,000 in the right hand block, That contribution was from eleven months of Insignium that we acquired in December 23 and two and a half months of hypothesis that we acquired in October 24.

26:37 In terms of revenue per partner, we're very pleased that revenue per partner has carried on continued to grow in '24 as it has done in every year since IPO. So it increased by 6% from 3,900,000 in '23 to 4,100,000 in '24, and that and that metric is now about 30% higher than it was back in back in 2020. And very much the the growth that you've seen in 2024, as in fact, you know, all of those years since IPO that we I'm showing on on my first slide, there that's our four pillar growth strategy in action. So, you know, our organic pillars of stretching getting more stretching our partners, getting more from them as as we give our partners a larger range of services to sell, particularly through the acquisition capabilities that we've we've acquired.

27:22 Promoting partners who are always very successful in our firm given the fact that they they know our ways of working. They know our culture. They know what it need what it what's required to be successful here, and we have a very high success rate with our promotes. And hiring hiring partners from the outside market with particular skill sets, capabilities, and client relationships. And we and we made three hires in 2024 that are all shaping up to be very successful additions to our partner team. And then, of course, the fourth pillar, which is our inorganic pillar of of acquisitions. This is probably my favorite slide of the pack. It's our cash generation slide, which shows how our cash progressed in '24 from £18,000,000 in 2023 to 7,500,000 into '24, and that decreased about 11,000,000, but that's after having spent £21,200,000 on acquisitions. So our operating cash flow, 29,400,000, actually, this year with the very strong working capital performance was higher than EBITDA less corporation tax.

28:26 And then we use that operating cash flow to pay for the initial consideration for the acquisition of hypothesis was 21,000,000 and some very small amounts in relation to earn outs. We had a net outflow for EBT and shareholder loan transactions of 8,900,000. As as we said before, it's important for

28:44 us to not dilute through the issuance of equity, and and we use our cash to ensure that we we don't do so any more than we absolutely have to. We paid a dividend last year in two installments with a cash cost of 6,900,000, and then there was £3,000,000 of other outflows in relation to leases, CapEx, and and debt repayment, including some debt that we acquired with the acquisition of of Hypothesis. But we closed the year with 7,500,000 of cash with all of the debt that we drew under that. The RCF facility that we've taken with NatWest repaid by year end, and so that puts us in a very strong position going forward in terms of firepower for for future acquisitions. In terms of the balance sheet, I'll just pick up with a couple of main points. So, the intangible assets have increased from a £101,000,000 to a £130,000,000 with the goodwill and and other intangible assets associated with the acquisition of hypothesis.

29:39 I mentioned very strong working capital performance, and you see that really with our the position of trade and other receivables. That was only up 1,500,000 year on year, and that's despite the business having grown much faster much faster than that. And for those of you a question I sometimes get asked about how much contingent consideration do we still have on the balance sheet, there's only 8,500,000, and you'll see that that that's a similar level to last year. A large element of that is actually payable in the current year '25, and so we'll we'll be off the balance sheet by next next year end. Now I'll hand back over to Graham. He's gonna cover the business review. Thanks, Nick. So just to bring bring the major highlights, that have happened in in 2024, I'll just give a a brief summary here because we do dip into the detail in the following slides between, myself, Nick, and them.

30:35 One thing that we continue to do was diversifying what we do, where we do it, and in what industries we do it in. And, you know, that is something that we'll con continue to do. I'll go through the numbers in a second. But it's a real driver for our inorganic growth strategy. You know, the the more capabilities we can buy into the business in different industries, clients in different industries, clients in different geographies, that just makes us a far more sustainable business as we grow. Hypothesis ticked all three of those boxes actually, capability, geography, and industry. I'll I'll go through a little bit in in terms of what they do, but on the top level, they are an insight strategy and design consultancy, and they have a fantastic client set, you know, five in magnificent seven. If you look at the rest of their client roster, if you like, you would have heard of of all of them. And, you know, we're very excited that the traction we're getting in in terms of cross sell both ways into our respective client sets.

31:38 And we're growing our service offerings. So I mentioned earlier being able to, you know, be relevant in the bull market, in the bear market when it's good and bad. And we we've also and and we'll go into it further. We've been using AI not just with our clients through the acquisition of response in eighteen months ago, but we've also really started to build out internally some certain uses of AI, which are really making us more, not just efficient, but more effective, more importantly. And then we'll we'll touch on that. Steve mentioned kind of client growth. You know, we've we've increased our number of active clients by 21% from 200 to 241. The gold clients who deliver more than a million pounds of revenue have gone from 19 to 27, and and and really that really, that's reflective of the the trust and the value in in the delivery that we provide to our clients.

32:33 And that all flows through to that 70

32:51 Is it just me, or is Graham frozen? I think you just said repeat numbers. Please do bear with us as we seem to have Graham. Graham, if I may, I'll just refresh it. Okay. Shall I shall I pick this up until we can get Graham back? Yes, please, Steven. I'll just get him back in. Okay. Oh, hi there, Graham. Are you back, Graham? I'm not sure what happened there. That's strange. You're now you're now live, Graham. Thank you very much. Okay. Perfect. So I just wanted to touch into the diversification points in more detail. On this slide, you can see our revenue going across the top. So 30,000,000, was the year of IPO in 2020, and then last year was a 111,000,000, which was, obviously, f y '24.

33:39 Looking into the three buckets that we think about, capability, geography, and vertical. So at IPO, we were 97% consulting. That number as of 2024, we're diversified to 57%, and that's through by, growing digital, but also buying in data with the ILAP acquisition and really expanding that. I think it's important to note that whilst the percentages has gone down, the actual pound numbers certainly haven't. So, you know, doing the quick maths, 97% of 30,000,000 is is £29,000,000 of consulting, whereas 57% of a 111,000,000 is is 63,000,000. So going from 29 to 63 is more than doubling consulting, albeit we're far less reliant on that from a a group perspective.

34:25 Same can be said in geography. You know, at at IPO, we were 21% US, but what we did tell investors was that The US market is a very important market for for consulting. For every pound spent on consulting in Asia, £2 are spent in Europe and UK, and £4 are spent in in The US. And, you know, over time, if you're a global player, you would expect your revenue profile to match that. And you can see on the right hand side that we are certainly on on that journey. Just a couple of things to note. You know, that that's been extremely helpful from a from a tariff perspective, which I'm sure is is gonna be some questions from yourselves. Just to tell you, you know, we are not directly impacted by tariffs. We're a services business, and and services are not caught up in it. However, even if services were, we have a US business that employs US people that works with US clients. So, you know, they're in country, and, again, we are protected.

35:31 You might ask, you know, how many of our clients are impacted and is that gonna impact us from a revenue and profit perspective? We have looked into how much of our revenue are in the affected industries, so particularly, you know, US, CPG, auto manufacturing, etcetera. On a on an annual basis, our forecast, 7% of our revenue was in those clients. From where we are now to the end of the year the year, that's 5%. So in an Armageddon scenario where all of our clients in those industries took all of our revenue down to zero, which isn't gonna happen, but that's just a 5% exposure. In fact, what we have seen is some new conversations cropping up where we're being asked to help our clients with dealing with tariffs, so especially looking in the supply chain.

36:20 So so we feel we feel very good about where ELIXIR is in in from a tariff perspective. And, again, you know, the the law of percentages and growing numbers, if I just took The UK 33% number at IPO, that's a £10,000,000 revenue from UK. And if I take the 27% last year, that's actually £30,000,000. So, you know, whilst the percentage has come down, we've we've tripled The UK. Again, very happy with that. And looking at a an industry perspective, we were 80% financial services and insurance at IPO. Last year, that was around 40%. I think interestingly, you can start to see our inorganic strategy come to life here, that top bar health care, a lot of that revenue came through Insignium, and we're looking to and we are actively growing that with cross sell. And when we when we look at this graph next year, you'll see a big kind of tech media and entertainment line, which has come primarily from hypothesis.

37:26 You know? So that is another way that we are diversifying, from from a from an industry point of view. Talking about hypothesis, you know, it's a highly strategic acquisition. I mentioned geography. You know, they are US, especially in the West Coast, which is nice from our US coverage because we had the East Coast and kind of the Mid States covered. This gives us great West Coast coverage. Industry, like I said, tech media entertainment, some fantastic clients. And from a capability point of view, yeah, they focus on on research and insights. Why we like that is at the back of that needs a strategy and then execution. So it's a perfect plug in to to our client conversations to really open up broader work for ELIXIA.

38:14 And the cross sell is is really starting to happen. Now looking at our client set, one thing that we were really enamored by was the the client feedback when we did due diligence before we actually signed the paperwork. You know, we spoke to all of these clients. You can see some of the the bottom left numbers there that the response from the clients and what they said about them in terms of, you know, quality, the people, return on investment, ability to deliver was exceptional. And and that is, again, a really important thing for ELIXIRRIN we buy a business because that quality bar needs to be as as good, if not better than ours. So I'd like to now hand back to Em to to talk to you a bit more about what we do and then give you some kind of examples and how it really comes to life.

39:09 Thank you, Graham. My name is m Carlouis Smith. I'm one of the client facing partners at ELIXIR, and I thought it might be nice to try to bring to life a little bit how we interact with our clients, the capabilities that we bring to them, and and give you some case studies about how we're operating in our market. ELIXA was really founded on strong foundations of strategy and transformation consulting and operational excellence consulting. So these are the core management consulting projects where we're working at the top of the house with c suite to define the agenda of where they want to take their businesses to and then help them execute on that vision through change management, through looking at their business and operating operating models. But over the course of the last few years, Graham's acquisition program has added capabilities to what's in our kit bags to talk to clients with.

40:03 So the acquisition of, for example, has brought us an ability to talk to c suites about the cultural side of breakthrough leadership and how they can align behind the visions for the futures of their businesses. The acquisition of Hypothesis has brought us these research and and consumer insights capabilities where we can go and research empirically what consumers are looking for in the market and feed that into the strategic objectives of our clients. We acquired a couple of digital marketing agencies along the way, Coast and DEN, which are now rebranded as ELIXIR Digital. And they provide full service brand design and brand strategy work as well as user experience and digital application build skills to to our market.

40:53 And then finally, we've acquired ILAP and Responsum, two technology businesses that specialize in data and in AI, Latterly AI with the acquisition of Responsum. And they give us real data engineering, technology engineering, and AI skills where we can start to build solutions for our clients and help them to plumb their data into the technologies that they need to be using as they take their businesses into the future. And having all of these, diverse capabilities is now enabling us as client partners to be building bigger client, account relationships. So our top 10 clients, each of them now generating for us over 2,000,000 of revenue a year, are now diversified across seven industries. And we're able to build these clients into plus 2,000,000 revenue clients because we have all of these capabilities to bring to them either in one project or across multiple buying centers.

41:49 We're we're also really proud that our number of gold clients, that's clients generating in excess of 1,000,000 a year of revenue, has increased from 19 to 27 from f y twenty three to 24, and that's an increase of 42. But whilst we've been growing the number of big clients we have in the firm, we've also been growing the number of overall clients we have in the firm. And that's really important because it's reduced our client concentration in our top 10. So previously, in f y twenty, when we IPO ed, 80% of our revenues were coming from our top 10 clients. But now in f y twenty four, 43% of our revenues come from those top 10 clients. And as Graham mentioned earlier, we're also really, really happy to see that 75 of our clients from f y twenty three were repeat clients in in f y twenty four, really evidencing the quality of our service offering.

42:47 And just a couple of client case studies to call out here for you. The first is Frontier. I noticed someone in the questions has asked how we're interacting with clients in in AI and how we see that offering evolve. Well, recently for Frontier, we built them an AI powered sales dashboard and a chatbot to help increase and enhance their prospecting and lead generation and qualification. And we saw an increase in sales prospecting productivity through that tool of 93%. But it was only possible to create that because of the data and technology capabilities we have to build a 360 degree customer view using their data and and extensively mapping that data. And then one other case study I'll pick out on here in the interest of time is our leading reinsurance provider. This is a reinsurance broker where we've worked with them for the last couple of years from strategy all the way through to the digital design and prototyping of a workflow tool in in order to uncover the value of the data in their organization.

43:50 And, actually, after going out to our innovation network to try to procure the technology to create that tool, we realized that reinsurance was so specific that we needed to help them build it. So we used our data and technology teams in order to build this work flow tool, which is now live in the market and is being used by over 500 reinsurance brokers. We're really proud of the quotes on the right hand side of this slide. Not only do our clients rate us simply light years ahead of some of these big name consultancy firms, McKinsey, Bain, etcetera, etcetera. They also talk about how they feel important. So we make them feel important and how their success is a big deal to us, and that's very true. And the reason that that's true is because we are owners of this business, and we are all completely invested in making this business go to market in the most excellent way that it can and delighting our clients.

44:48 And so our EVP, our employee value proposition, really is a strategic asset that's delighting our clients. So first of all, we're growing our brand reputation as the challenger consultancy. We put money into our marketing to do that. The brand is starting to have resonance not only with our our clients, but also with the talent that we attract. So 14,000 applications in f y twenty four, and that's over a 100 applicants per role. We're also enhancing our own operations with leading edge tools. So people want to work with us because they understand that they would have these leading edge AI powered tools at their fingertips to help us generate speed to value for both our clients and for ourselves. So we're building a knowledge management agent that will help us do our consulting work.

45:35 We're trying to streamline our statement of work generation, our contracting process, as well as how we create proposals and take those to the market so we're quicker to get into the market. And then Graham's team is also using AI tooling for for m and a scouting. And then lastly, our equity schemes. These really are, the the cornerstone of why we have built this culture of ownership. And we have two different equity schemes in the firm, one for partners, one for our employees, and Nick's going to talk to you about the value that they are creating for the 80% and more of our team who are enrolled in them. Thanks. Thanks, Anne. So, I mean, I you know, our equity rewards you know, the way we use our equity to reward everyone in our firm from the most senior partner to the most junior employee, I I think is is really unique in the market. We haven't seen anyone else doing this. And I think, when we talk about the really high performance culture we have, that high one of the factors contributing to that high performance, it's not just expectations of everybody here, but it's also the way in which partners and employees get to share in the value that they create and that they have interests a 100% aligned with external shareholders because their their interests are in growing the value of their equity, growing growing the share price for which is which rewards everybody in yeah. Internal shareholders and external shareholders. And they do that by driving business performance, by having great client relationships, and all of those those factors.

47:02 This slide shows, on the left hand side, the value creation opportunity for partners. So our partners, it is typically in cash terms, get paid less than they would in the market. So in a competitor company, they might get paid a million pounds in cash terms, but it's a short term partnership type model where there's no there's no building equity value for the long term. So if they were if they were earning a million pounds per year over a five year period in cash terms, they might earn £5,000,000. Our partners over that five year period could earn potentially £2,000,000 in bay £2,000,000 in cash. So £200,000 a year in base salary, £200,000 a year in bonus, a 100% bonus, If they but that's if they hit all of their targets, both around revenue and profitability. By far, the bigger component of their overall remuneration is through their equity package. So each partner gets £3,000,000 of market price options. Importantly, these are market price options, so the exercise so discount on the exercise prices at the current share price at the day they join the firm or or either as an external hire or promoted to partner as a as an internal promotion to partner.

48:08 As well as the £3,000,000 of market price options, they also get £500,000 of shares that they purchase with a loan from the company. And it's important that they're buying shares because that gives them downside exposure to the share price. Options are only upside, and we want them to have partners to have the same exposure to downside share price that external shareholders have. And if you take that £3,500,000 exposure to equity through options and shares, Well, given the share price performance we've delivered from IPO to the end of twenty twenty four, that 3,500,000 exposure to equity gives about a 8,100,000 gain. And then when you add the cash component, they get to of £2,000,000, they're at £10,100,000 overall. So roughly double what they would have earned in a cash based remuneration system, but also importantly, they're big holders of equity for the longer term to continue driving growth beyond that five year period. And that's certainly what we've seen as our first tranche of of pre IPO options became became exercisable.

49:11 On the right hand side is is the same similar numbers for the employees in terms of how this works. And, again, every employee in our firm from the from a senior principal down to the the person on reception receives options. And, again, given those share price share price growth we've had since IPO to the end of last year, an analyst has a 29,000 gain all the way up to a principal in our firm with a 1,200,000 gain. So these are meaningful amounts of money. Even for junior employees, it's a way for them to actually build some capital and build some wealth in a way that it's very hard for them to do if they're purely earning a cash salary that that's being taxed. So we're very proud of this the the way we've set this up, and I think it's it's certainly a massive contributor to the performance the high performance culture we have within the firm.

50:01 Just turning to the the other side of that, I guess, from a shareholder an external shareholder perspective and dilution, It's important to say that we I mean, we've had no dilution from these employee incentives. All of the employee incentives, we have the first tranche last year from IPO that we we exercised, and we exercised those using cash to buy existing shares with zero dilution. So our total dilution in the five years since IPO has only been 6%, yeah, at a time where the share price has more than tripled and and the business has quadrupled, and and that's all due to acquisitions. What we set out in the model here really was to project forward on how that dilution might progress if we don't use cash to offset it in the future. And you see there that we in a model where we grow the business at 20%, of course, as we talked about before, we've actually grown the business with CAGRs north of 30%. Assuming a 20% growth rate similar proportions today where 75% of our EBITDA turns to free cash flow, even without any multiple arbitrage, we reach a billion pound equity value, a billion pound market cap by 2029, and that's only with 16% dilution. So it's a further tripling of market cap from where it is today for only 16% dilution. So very modest from a shareholder perspective compared to the share the share the market cap and share price value that's been created.

51:23 And, really, you know and this model reflects all of the dilutive instruments that we use. So all of the existing employee and partner options that we have in place, the grant of new options to partners and employees using our current current metrics as we grow the number of partners and employees in line with in line with revenue, our employee share purchase plan that that Ed was talking about, and not that we've decided to do this, but as a conservative assumption to to allow for replacement options once existing options mature. And the reason that the dilution is really so modest is really three three factors. It's because we're using market price options, so there's no discount. It's only the growth in share price that creates any dilution. It's because we have very high performance standards and both partners for their revenue and profitability targets and employees for their high to get one of the two top performance ratings.

52:12 Only a proportion of these options will invest and and attrition. The options all have four or five year first exercise dates. And if somebody leaves within that period, then all of their equity is forfeit. So it's only the people who stay for the long term and build value over the medium to long term that that benefit from this. And it's those three factors together that make the dilution here really quite modest. And, you know, from our point of view where, you know, all of us presenting, we're major shareholders. This is not a concern to us given the the value creation that's involved over the same time frame. Now I'll pass back to Graham. I think he's gonna cover our support on m and a. Thanks, Nick. So I mentioned earlier, inorganic is is a big big part of our strategy. It's the fourth growth pillar that we have. Just to remind you here on the left, I'll I'll remind you of the the strategy we have in place. In the middle, I'll show show you some of the numbers. And on the right, really, it's it's about the opportunity.

53:11 Suffice to say, we we take it very seriously. I've got full a time team working on this. In fact, we've moved one of our partners, into the m and a team to really help turbocharge this. So, you know, we we we do see this as very important, and very successful to date and and even more so going forward. So on the left, we are doing what we call a programmatic approach to inorganic. That's where we're looking at one or two deals a year that will essentially increase enterprise value by 10 or 20%. So, you simplistically, we're looking to buy 10 to 20% of EBITDA each each year. That's proven to be a very successful m and a strategy, better than buying lots of small deals and, you know, far less risky than doing an absolutely massive deal.

53:57 And that's what we've been doing today. I had mentioned the fact that we are looking at industry, geography, and capability. You know, just taking capability first. We you know, research and insights was was the latest ad. There are other things that we're looking at. I think cyber for us is is a is a a big opportunity. We we are growing organically in that space. We've made some senior hires, and and we are doing some great work with our clients. I do think an acquisition of that space could be very additive. From a drug fee point of view, The US will always be a focus. You know, the last four US the last four acquisitions have been US. That's no accident, and there will be more going forward for sure.

54:42 But, you know, we know that given that revenue profile I said earlier, we do want to get further into Europe. So we are looking at actively looking at The Nordics. We've looked at DAC, and and that's is is a strong pipeline we have there. Thinking about industry, yes, we've added industries. Like I said earlier, there are other industries that we we think we should be adding, who use consultants a lot. Energy, oil, and gas is is an obvious one. Again, we have some great clients. We could add more, defense, you know, that obviously, from a European point of view, particularly, could be an interesting add as well. And I think the the other two points to make on this is it has to be high quality services, high quality businesses, and also the aligned deal structures. You know, we do use equity in the deal structures deliberately so that the people coming in care about the business as much as we do and as much as you do if you if you are an investor already.

55:43 The pipeline in the middle, you can see, you know, the team has been working hard. We have had a lot of meetings and essentially come through to the seven deals that we've completed, six since IPO. And thinking about the opportunity going forward, we've mentioned the £45,000,000 revolving credit facility that's fully available, given that we've repaid it all in the last year. Add that to the free cash flow that Nick was talking about of twenty eight point one in f y twenty four. Add that to the equity we have, and particularly adding that now to the main market attractiveness, I think we're in a really exciting place. So looking forward in the future to talking you through, future acquisitions.

56:30 Steve, maybe I'll, in the interest of time, hand back to you. Thanks, Graham. Just timing down my mic, but got it done. So, hopefully, everybody, that gives you a good view of how the business has been performed, our strategy. There's a few other questions in here. I'll try and pick up some of them as I close out with regards to our outlook. I mean, we we I think you probably get from the gist of this presentation, we're very confident in our position. Because we're going to the main board, we we cannot actually give you guidance for this year in either revenue or EBITDA terms. But what I can do is give you some anecdotal observations of our performance so far into 2025, which gives us a lot of confidence. So for example, I can say to you that q one, which we just finished, is a record quarter.

57:18 So we continue our growth momentum, which is fantastic. In actual fact, the month's just gone. We're on the May 1. Oh, I'm sorry. April is another record month, so you can still see our momentum building through that. And then one final piece of anecdotal evidence I can give you that the the momentum is sustainable and continuous is that if you look at the amount of contracted revenue we have for the half one of twenty twenty five, So what we've already contracted to date with May and June still to go is is greater than the half two of twenty twenty four, but all the revenue we actually delivered in half two of twenty twenty four. So this business is in a very strong position. We've got our strategies in place. Our employees are incredibly motivated. Our partner team is incredibly motivated. They're all owners of the business, and they all see the opportunity, and they turn up every day to make their equity worth something. And that's a it's a really important cultural dimension to our strategy. You've heard Nick talk about the way we manage dilution. And even if we didn't use our cash, we we still believe it's a fantastic model because it doesn't dilute more than it creates, which is exactly the simple truth of what we're trying to do. You know, we're trying to get three times over market cap with what I think the maximum dilution Nick was pointing to was 16% if I recall. I can't remember, but I think it was in that region any case. And but despite that, we've only had 6% dilution with three times over market capitalization increase since IPO. So we've got a proven track record of doing this. We believe it's the market

58:48 is massive. Graham pointed to the trillion dollar market cap. Someone said to me, what's your end game with ELIXA? One of the questions here. Well, you know, McKinsey is a pretty big business. We've got a long way to go to get there, but, you know, trust we probably twenty, thirty years time, we could probably say we're we're in that league. But if we grow at this rate, it's definitely achievable. And what I'm looking for is to disrupt the consulting market. The consulting market needs a truly accountable publicly accountable consulting firm that is in the strategy space, and that's what we're trying to build. And none of the firms that are existing today will ever be able to achieve that. You know? They they just cannot move themselves into a public setting. And I think that the consulting industry needs something like this because it will hold accounting in, the consulting industry to account. Because the public nature of of our relationship with you guys as shareholders is that we need to be delivering great quality work. Otherwise, our share price is what suffers.

59:51 And we that accountability is something that the rest of the industry doesn't have. You know, some of the rest of the industry can actually make serious errors. And if those of you are interested, you can just go look at a bit of a a mess in South Africa. It was one of the big branded consultancies, which I won't mention, but it's very public. You can go and have a look at it. They suffered no consequences. So I I think the accountability in the industry is not quite as good as it should be, and I think building a firm like this will put us it'll build trust in the industry, it'll build trust in us as being people who stand and face into that accountability, and our clients love it. And and when we've got partners who are a 100% aligned, I think we'll, we'll we'll see that come through too and and employees. I mean, employees are incredibly motivated as well. And just quickly I'm conscious I've got one minute over, but let me quickly run through any other questions. I think most of them, we've just a question on ramping up of partners.

1:00:45 Promoted partners, there's no ramp up issue. New partners, takes it's very quick. All other partners work with them to get them on board, so that's that's something that I can rest assured it's pretty good. What do we spend 1,000,000 on brand promotion? All sorts of things, you know, LinkedIn activity, training our partners to use LinkedIn, writing LinkedIn posts, all of those kind of good things. Also putting out hosting client events, that kind of that kind of stuff. Highest priority, I think Graham has mentioned that. He he went through that in detail in capability industry and geography where where our emphasis is are. Just to close out because I know that it's it's really quite important that I leave you with a vision here of what we're trying to achieve. We wanna be the tech enabled strategy and change consultancy because technology is the big theme of change.

1:01:38 And and and the one thing that the big firms struggle with is their big pyramids like this. And so when when when Em was talking about us using AI to make ourselves more efficient and effective, the big firms really struggle with that because they've got a whole ton of people at the base of the pyramid that they can't fire. That's this is their model. This is their raison d'etre. They've operated like this for two hundred years. To change that model is very difficult for them. We're a tube. We don't have that same anxiety around disrupting ourselves, and our clients love that because we're actually stepping to the breach and go with them on this journey of how do you actually use this technology like AI or digital or cybersecurity or whatever it is to really change the the the we we we eat our own medicine. Let's call it that way. Any case, I I could carry on and on and on, and I'm an hour already three minutes over time. So any more questions, or how do we close this down?

1:02:33 Stephen, thank you and to the rest of the team for updating investors today and addressing those questions today. I was gonna ask you, Stephen, for a few closing comments, but I believe you have just given those. So if I could please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management of ELIXIRR INTERNATIONAL PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all. Thank you for investing.