17/06/2021 - Blue Prism Group plc: Earnings Document

CONTACT DETAILS

For further information please contact:

Blue Prism Group plc
Tom Hull, Head of Investor Relations	+44 (0)77 3670 7407
Investec Bank plc	+44 (0)20 7597 5970
Carlton Nelson
Ben Griffiths
BofA Securities	+44 (0)20 7628 1000
James Robertson
Oliver Elias
Brunswick	+44 (0)20 7404 5959
Caroline Daniel
FINANCIAL CALENDAR
Full year results		20 January 2022
ANALYST PRESENTATION

Jason Kingdon (Chairman and CEO) and Ijoma Maluza (CFO) will host a Zoom call presenting these results and hosting a Q&A at 3pm GMT/10am ET/7am PT today. A link to register can be found below.

https://events.blueprism.com/half-year-results

The Zoom link will be open from 2.55pm BST/9.55am ET

A replay will be available from investors.blueprism.com after the call.

If you have problems accessing Zoom then please contact investor.relations@blueprism.com for a dial in - please note participants who dial in will be in listen in mode only and will be unable to ask questions.

FORWARD LOOKING STATEMENTS

This announcement may contain statements that are, or may be deemed to be, forward-looking statements (including such words as "believe", "expect", "estimate", "intend", "anticipate" and words of similar meaning). These forward-looking statements are neither historical facts nor guarantees of future performance. Such statements are based on the Board's current expectations and belief and, by their nature, are subject to a number of known and unknown risks, uncertainties and assumptions which may cause the actual results, events, prospects and developments of the Group's business to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Except as required by applicable law or regulation, the Group undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

2

RESULTS FOR THE SIX MONTHS ENDED 30 APRIL 2021

FINANCIAL PERFORMANCE

The Group delivered £98m (1H20: £73m) of total bookings (Total Contract Value of all New Licence, Renewals, Support & Maintenance, and Services) from new and existing customers, driving revenue growth in 1H21 and future periods. The total value of new bookings from new customers and upsells was £58m (1H20: £53m). Remaining performance obligations (RPO), which represents future revenues under contract but not yet recognised as revenue, were £311m (including a foreign currency headwind of £11m from the end of FY20).

Group revenue of £80.4m increased 24% (at constant currency) and the ARR (annual recurring revenue) generated at the end of April was £162m on a reported basis (FY20: £153.6m). Absent of currency impacts, additions to ARR were in line with 2H20, a stable performance when noting that the Group historically wins the majority of new business in the second half of the financial year.

The adjusted EBITDA loss for the period of £(8.0)m improved by 76% compared to 1H20, on a constant currency basis. This improvement was as a result of revenue growth combined with financial discipline across the business and reduced spending on areas like travel during the continued measures relating to the COVID-19 pandemic and phasing of costs. This was offset partly by an increase of 46% in Product and R&D.

The reported operating loss was £(20.9)m (1H20: £(53.8)m restated). The difference between reported operating loss and EBITDA loss is driven by contingent share-based payments and exceptionals.

CUSTOMERS

The Group closed the period ended 30 April 2021 with over 2,000 customers, representing a significant opportunity for the Group. The largest customers increasingly provide a blueprint for other customers to scale and the Group's continued track record in upselling underpins this opportunity further.

In the first half of 2021 Blue Prism upsold into over 20% of the customer base, driving a net retention rate of 115%, an increase on the 1H20 rate of 110% and in line with 2H20. During the period, the Group delivered healthy levels of upselling across its largest customers, with over 50% of its top 50 customers by revenue upselling. The Group's top 50 customers accounted for around 34% of enterprise ARR, with an average spend of $1.5m a year.

The gross retention rate for the year was 98%, with very low levels of revenue churn. The high levels of revenue retention and customer commitments demonstrated provide the Group confidence in the margin potential.

PRODUCT

At the end of 2019 the Group prioritised investments in Product and R&D to preserve and expand on its product differentiators. In 1H21 spending in these areas increased to £14.2m, around 18% of revenues (1H20: £9.7m restated). £9.0m of the R&D cost base is classified as operating expenses, with the remaining £5.2m classified as 'direct employee cost of delivery' in the cost of sales.

MARKETPLACE

In May 2021 Gartner found Blue Prism to have moved-up to 3rd place in their global market share analysis for the robotic process automation rankings (Gartner Market Share Analysis: Robotic Process Automation, Worldwide). This ranks Blue Prism with circa 10% of the total RPA market. IDC also published their Semi- annual Software Tracker, 2H 2020, which showed Blue Prism as the second fastest growing vendor in 2020, by revenue.

3

AGM VOTE AND POTENTIAL SECONDARY LISTING IN THE US

Following the voting results of the Group's 2021 AGM the Board committed to consult with shareholders. The recently appointed Board members Maurizio Carli, Rachel Mooney and Murray Rode conducted an extensive series of conversations with investors during April 2021 in response. The Board would like to thank shareholders for their engagement in the process so far and is actively working on the appropriate course of action. A full response will be provided within six months from the AGM date at the latest.

The Board previously announced that it was exploring the potential for a secondary listing in the US, and it appointed legal and financial advisors to support the potential secondary listing including accounting and compliance processes and legal documentation. The Board are pleased that this preparatory work has been substantially progressed, however the Board is reviewing the timing of any potential secondary listing in the context of current market conditions and the Group's own market development. A further update will be provided in due course.

OUTLOOK

The outlook remains unchanged from the trading update statement. Based on H1 reported ARR of £162m, the Board believes FY21 revenue is likely to be towards the lower end of the £170-

180m previously guided range. As previously stated FX is estimated to have negatively impacted the original guidance by ~£2m. The Group continues to expect an EBITDA loss for the year of c.£25m.

4

TRADING

REVENUES

Recognised revenues for the period increased by 21% to £80.4m (1H20: £66.6m restated) and 24% on a constant currency basis, with recurring, subscription-based, licence revenue accounting for 98% (1H20: 97%).

Other revenues accounted for 2% of total revenues, with professional services and training revenues of £1.5m (1H20: £1.7m) and sponsorship and other revenue of £0.1m (1H20: £nil).

ARR, which is the annualised exit run rate of monthly recurring revenue at the last month of the reporting period, was £162m (1H20: £139.2m). Growth in ARR was impacted by the strengthening of GBP and on a constant currency basis would have been 22%.

Recognised revenues by geography were as follows:

	As reported		1H21						1H20 restated					% MOVEMENT
				£M				%OF TOTAL		£M		%OF TOTAL
	EMEA	38.2	48%		32.6		49%		17%
	Americas	31.6	39%		25.8		39%		22%
	APAC	10.6	13%		8.2		12%		29%
	Total	80.4		-		66.6		-		21%

Blue Prism Cloud accounted for £7.1m of revenues in the period, compared to £5.5m in the first half of 2020. Blue Prism Cloud bookings increased by 65% in the half and contributed around 22% of the new bookings (excluding renewals) achieved by the Group.

LOSS FROM OPERATIONS

The Group recorded an operating loss for the period of £(20.9)m (1H20: £(53.8)m restated). The reduction in the loss was driven by revenue growth alongside a reduction in the cost base due to cost management and lower travel costs as a result of restrictions due to the COVID-19 pandemic. Offsetting some of these cost reductions were investments in Product and R&D. Operating expenditure (before contingent share- based payments and exceptional costs) is categorised as follows:

£m		1H21			1H20 - restated
General & administrative	13.3	15.3
Chief Revenue Office &	47.1	69.0
Corporate Marketing
Product Group	9.0	6.4
Depreciation and amortisation	2.9	3.2
Foreign exchange losses/(gains)	3.8	(2.2)
Total	76.1	91.7

CASH FLOW

Net cash at the period end was £126.5m (1H20: £140.8m). The Group continues to plan to reach exit run- rate cash break-even at the end of the second half of the 2021 financial year.

Cash used in operations for the year was £(8.1)m (1H20: £(32.1)m). The improvement in operating cashflow

was primarily driven by improving adjusted EBITDA loss £(8.0)m (1H20: £(32.8)m restated).

5