First Derivatives : Annual Report 2021

Data- driven performance

Annual Report 2021

Strategic report

About First Derivatives

First Derivatives solves business‑critical problems that haven't yet been solved.

Who we are

We are a group of data-driven businesses that unlock the value of insight, hindsight and foresight to drive organisations forward.

Learn more in At a glance from page 2

What we do

We give every business the ability to realise the true value of their data to achieve their potential.

Learn more in the Business review from page 18

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First Derivatives plc  Annual Report 2021

Highlights

Financial highlights

£217.4	£237.8	£237.9	£38.9	£45.5	£40.5	£18.7	£21.7	£17.0	47.9p	54.2p	32.0p
2019	2020	2021	2019	2020	2021	2019	2020	2021	2019	2020	2021

Revenue

Adjusted EBITDA

Operating profit

Diluted earnings per share

£237.9m £40.5m £17.0m 32.0p

Operational highlights

• Delivered robust performance despite impact of COVID-19, underpinned by the strength of our customer propositions and enabled by high levels of customer retention
• Continued to invest in technology, product and people, reflecting our confidence in our business and the market opportunity
• Strengthened the leadership team across the business, providing the capability to scale the business and capitalise on growing market opportunities
• Momentum increased towards the end of the financial year and continued into FY22 with contract wins across the Group and substantially strengthened pipeline

• Launched KX Insights for cloud-native streaming analytics, with positive customer reaction and early commercial traction, with major sales campaigns planned during current year
• Multiple new contracts won in key target markets, with examples across automotive (Williams Racing), energy (major US gas and electricity utility), manufacturing (semiconductor manufacturer), telecoms (leading North American telco) and FinTech (MUFG)

In this report

Strategic report	Corporate governance	Financial statements
1	Highlights	40	Board of Directors	62	Independent auditor's report
2	At a glance	42	Chairman's governance statement	72	Consolidated statement of
3	Investment case	45	Governance framework		comprehensive income
4	Our businesses in action	47	Report	of the Audit Committee	74	Consolidated balance sheet
6	Chairman's review	51	Report	of the Nomination and	75	Company balance sheet
8	Tackling COVID-19		Governance Committee	76	Consolidated statement of changes in equity
10	Business model	54	Report	of the Remuneration Committee	78	Company statement of changes in equity
12	Business environment and market potential	58	Directors' report	80	Consolidated cash flow statement
14	Strategy	60	Statement of Directors' responsibilities	81	Company cash flow statement
15	Key performance indicators				82	Notes
16	Effective stakeholder engagement				132	Global directory
18	Business review				133	Directors and advisers

22 Financial review

1. Principal risks and uncertainties

1. Corporate responsibility

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Strategic report

At a glance

Our business

First Derivatives solves business-critical problems that haven't yet been solved.

KX

Elegantly simple and universally compatible

KX is the fastest, best-informed,real-timedecision-making engine in the world. Capable of capturing any data, from any location and in any format, this unrivalled streaming analytics platform drives the most demanding business decisions with real-time continuous intelligence.

Widely adopted throughout the financial industry, where it is employed across a range of data-intensive arenas, KX is also deployed in industries as diverse as manufacturing, automotive, energy, utilities and telecommunications. It also powers the MRP Prelytix digital marketing platform.

First Derivative

Continuously delivering industry-shaping projects

For more than 25 years, First Derivative has continuously delivered industry-shaping projects for some of the largest global banks and financial institutions. With a depth of understanding and breadth of experience unequalled in the sector, First Derivative has a hard-won reputation for being able to solve the toughest operational, data and technology challenges for its clients.

Offering the industry's largest, fully capital markets dedicated team, First Derivative is leading the data-driven, digital revolution across the evolving capital markets sector. With technical, logistical and scalable expertise unsurpassed in the industry and a reputation for executional excellence, First Derivative pushes projects further, faster and always beyond expectations.

MRP

A leading global predictive intelligence organisation

MRP is a leading global predictive intelligence organisation, combining cutting-edge predictive analytics with a full suite of account-based marketing solutions. The MRP Prelytix platform is the industry's only enterprise-class predictive account based marketing (ABM) platform. It is purpose built to perform inside complex environments, empowering sales and marketing teams to produce measurable and high-performance conversion, pipeline velocity, and closed revenue.

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Investment case

What sets us apart

We are a group of data-driven businesses that unlock the value of insight, hindsight and foresight to drive organisations forward.

1

Focused on large and fast-growing markets driven by data

2

Differentiated technology for extreme volume,

Businesses across the globe are transforming into truly data-driven organisations and the Group operates at the centre of this world, helping clients significantly enhance their commercial performance and operational efficiency.

KX helps customers use data analytics to drive competitive advantage, unlocking the insights and value held within both real-time and historical data. Firms in the financial services sector have long recognised and relied on the capabilities of the KX platform, and that experience and expertise is now being sought by organisations in a wide range of industry sectors where enormous volumes of data are being generated in real time.

Our recently launched cloud native enterprise-class streaming analytics platform, KX Insights, answers growing customer demand for flexible, scalable access to real-time data analytics without associated infrastructure costs.

Data also plays a critical role in the marketing world, which is why leading B2B sales and marketing organisations choose MRP, the Group's global predictive intelligence business. With MRP Prelytix, we offer the industry's only account based marketing (ABM) platform giving clients control of their data, visibility of their target markets and scale in the delivery of the highest impact engagement strategies.

Data is also transforming capital markets, a sector where our managed services and consulting business has, for 25 years, continuously delivered industry-shaping projects for some of the world's largest banks and financial institutions. No other firm has the unequalled depth of understanding and breadth of experience in accomplishing the operational, data and technology transformations required to help firms succeed in such a highly competitive and regulated sector.

complexity and latency data requirements

The KX Streaming Analytics platform is the only technology that can capture any data - any time - and run anywhere. Built on top of the world's fastest time-series database (kdb+), no one else comes close to our powerful real-time analytics capabilities. No matter the volume, velocity or variety of data, businesses are able to make the best-informed decisions, in the moment, in context,

in real time and in the cloud.

3

Deep expertise and executional strength

Our highly skilled people work side by side, screen to screen and shoulder to shoulder with our clients. Offering unrivalled technical, logistical and scalable expertise, our clients trust us with their most complex and challenging projects, knowing that we have the specialist services and solutions, backed up by essential tools and technologies, to deliver excellent results.

4

Our global reach for scale and growth

15	4	2,500+
locations	continents	people

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