Synectics : Interim Results 2024 Investor Presentation

A leader in advanced Security and Surveillance Systems

Synectics plc Interim Results 2024

About Us

Synectics is a Leader in Advanced Security and Surveillance Systems

The Company's expertise is in providing solutions for specific markets where security and surveillance are critical to operations.

Our core IP comprises our open-architecture, proprietary Synergy software and COEX cameras

Over 270 active installations	More than 10,000 COEX
worldwide with 250,000	cameras delivered in the
channels managed and	last 10 years
recorded

Delivering highly technical, tailored solutions to a high-profile and blue-chip global customer base

Gaming

Oil & Gas

Public Space

Transport

Critical Infrastructure

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Synectics plc Interim Results 2024

Overview & Highlights

Revenue	Underlying Profit	Underlying EBITDA
£26.3m		£2.2m		£2.8m
20%	183%	67%

Order Book	Net Cash	Interim Dividend
£30.2m		£6.4m		2.0p
6%
61%

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Synectics plc Interim Results 2024

• Strong results bolstered by the early delivery of several projects by the Systems division
• Board expects financial performance in FY 2024 to be more evenly weighted than in prior years and comfortably in line with market expectations
• Core specialist markets continue to show momentum, with all sectors seeing investment in new projects alongside the renewal of existing systems
• Strong order book and robust pipeline of new opportunities support confidence for further progress in the medium-term
• Continued technology investment maintains the Company's position as the go-to provider in key markets
• Appointment in late April 2024 of Bob Holt OBE as Non-Executive Chair strengthened the Board

*All income statement figures set out in this presentation reflect underlying results and continuing operations, unless otherwise stated.

Our strategy remains to develop and capitalise on market-leadingpositions

Our goal is to solidify our position as a leading security and surveillance technology provider by employing a comprehensive strategy designed to extend our market reach and drive sustainable growth by:

• Leveraging sector expertise and target markets	• Strengthening relationships and expanding revenue streams
•	Driving sales through partnerships	•	Increasing contracted recurring revenue
•	Investing in cutting-edge technology	•	Recruiting and retaining talent

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Synectics plc Interim Results 202

Systems Division

	H1 2024	H1 2023
Revenue (£m)	17.4	13.8
Underlying gross margin	48.4%	49.4%
Underlying operating profit (£m)	2.9	1.4
Underlying operating margin	16.7%	9.9%

• Gross margins remained very strong, and order intake was very healthy
• Sustained demand and high activity in the oil and gas sector
• Gaming sector demand improving, with new projects in North America and Asia
• Awarded US$10 million contract to upgrade and expand Synergy at a high-profile gaming resort in South-East Asia post-period end
• Established footprint in national infrastructure projects with success in actively developing adjacent markets, against a challenging public space backdrop
• Continued progress in deploying Synergy into critical national infrastructure in the UK. In April 2024 awarded a £0.8 million contract with a new customer - a major UK utility provider - to deliver a multi-site deployment of Synergy

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Synectics plc Interim Results 2024

Security Division

	H1 2024	H1 2023
Revenue (£m)	9.7	8.7
Underlying gross margin	28.5%	26.2%
Underlying operating profit (£m)	0.7	0.4
Underlying operating margin	6.7%	4.9%

• Secured £4.0 million contract with National Grid, much of which is expected to be delivered in H2 2024
• Continued momentum in the transport sector with good traction from customers for the provision of on-vehicle surveillance technologies. Potential for further deployment of the Group's innovative new cloud services into the transport sector
• Continued work with City of London and West Midlands police
• Sustained interest from UK local authorities, the successful deployment of system upgrades for several UK local authorities in H1 2024
• Continues to serve adjacent sectors, including venues, stadia and tourist attractions, with upgrades delivered to the Queen Elizabeth Olympic Park in H1 2024
• Refreshed go-to-market strategy to be launched in the Autumn

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Synectics plc Interim Results 202

Income Statement

	Revenue		Recurring revenue		EBITDA1*			Operating profit*
£19.2m	£21.9m	£26.3m	£3.3m	£3.4m	£3.7m	£1.6m	£1.7m	£2.8m	£0.5m	£0.8m	£2.2m
HY22	HY23	HY24	HY22	HY23	HY24	HY22	HY23	HY24	HY22	HY23	HY24

Earnings per share*

				10.0p
2.1p
	3.7p
HY22		HY23		HY24

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Synectics plc Interim Results 2024

£000 underlying*	HY24	HY23	Change	• Strong revenue growth, particularly in
Revenue	26,272	21,851	20%	Systems where revenue increased by 26%
compared with H1 23
Gross profit	11,177	9,115	23%	• Gross margin up 0.8 ppts due to revenue
				growth offset with increased investment
%	42.5%	41.7%	0.8 ppts
and sales mix
				• Operating expenses up 8% due to new
Operating profit	2,162	764	183%
investment and inflationary increases in
%	8.2%	3.5%	4.7 ppts	staff costs
				• Operating profit up 183% to £2.2m;
Profit before tax	2,105	718	193%	weighting ahead of norm for H1
				• EPS up 6.3p to 10.0p
EPS	10.0p	3.7p	6.3p

* All income statement figures set out in this presentation reflect underlying results unless otherwise stated.

1 Underlying EBITDA represents profit before finance costs, tax, depreciation, amortisation and non-underlying items.

*Public Space, Transport and Infrastructure

Revenue Bridge

Revenue by sector

Revenue bridge by region (£)

O&G

SECURITY

H1 24

GAMING

PSTI*

	O&G
*excludes intercompany sales	SECURITY

H1 24 revenue	£8.9m	£5.0m	£2.7m	£9.7m	£26.3m	H1 23
		Systems		Security	Total
						GAMING

• EMEA: revenues up by 46%, driven predominantly by oil & gas	PSTI*
•	Asia Pacific: revenues in line with H1 23
•	North America: increase in revenue by 26% as investment in North American gaming market shows

encouraging signs

• Security: steady progress with continued growth, particularly in on-vehicle

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Synectics plc Interim Results 2024

*All income statement figures set out in this presentation reflect underlying results unless otherwise stated.

Revenue & Order Book Profile

Revenue profile (£)

Order book (£)

• Strongest first half since Covid; results for the full year expected to be relatively evenly weighted between H1/H2
• Strong order book with >60% expected to be delivered in H2 24

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Synectics plc Interim Results 2024

*All income statement figures set out in this presentation reflect underlying results unless otherwise stated.

Gross Profit and Margin

GP	£9.1m	+ £2.1m	£11.2m

GM %

	H1 24	FY 23	H1 23
Systems	48.4%	46.4%	49.4%
Security	28.5%	28.3%	26.2%
Total	42.5%	40.7%	41.7%

• Gross profit increase of £2.1m; 23% growth in gross profit in both divisions
• Continued strong gross margins; increase by 0.8 ppts:
• • High operational gearing
  • Staff costs:
  • • Pay rises
    • H2 23 headcount increase
  • Sales mix - increase in lower margin O&G and on-vehicle

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Synectics plc Interim Results 2024

*All income statement figures set out in this presentation reflect underlying results unless otherwise stated.