RWS Annual Report 2022 web - Flipbook - Page 20
Chief Executive Officer's Review (continued)
OPERATING REVIEW
Language Services
Regulated Industries
Solid growth in Strategic Solutions
Group; some Enterprise Internationalisation
Group clients reduced activity, but confidence in
these established, long-term relationships points
to recovery
Strong performance in Linguistic
Validation offset by some second half softness
The Language Services division represented 46% of
Group revenues in the year (FY21: 46%). Revenues of
£342.1m were 10% higher year on year on a reported
basis (FY21: £309.9m) and saw a 1% increase on an
organic constant currency basis.
In the Strategic Solutions Group there were a number
of new client wins in the Major Account and GoGlobal
segments across a variety of verticals. The particular
success that we had in the first half with new business
won in the Americas region continued through the second
half. In our GoGlobal proposition, where we use our
expertise, technology and reach to support high-growth
businesses that are expanding rapidly into new territories,
we welcomed several electric vehicle manufacturers to
our client base, demonstrating our ability to serve new
entrants alongside many of the more established global
manufacturers. The GoGlobal solution was successfully
introduced into the Japanese and South Korean markets,
with some initial client wins and a healthy pipeline.
One of our key growth initiatives is eLearning, where we
had a strong year. We won several new clients based on
our new proposition and expanded into India and Japan.
Cross-selling eLearning into existing accounts accelerated
in the second half of the year and we had our first major
wins in providing a full end-to-end eLearning content
lifecycle solution, which included development and
concurrent authoring.
In our Enterprise Internationalisation Group, which serves
global technology enterprises, we had some successful
programme wins with one large technology company and
strong revenue development with a global digital retailer
in the first half. We saw a reduced volume of activity
from several of the largest technology clients but we
remain confident in the strong, long-term nature of these
relationships. These clients continue to be very satisfied
with the services and solutions we are providing, so we
expect to see volumes recover in due course.
We identified data services, including data annotation and
labelling, as an important growth lever and we have made
progress on the investments required to strengthen our
existing offering.
The division’s adjusted operating profit 2 was £53.3m
(FY21: £44.1m), on a reported basis, reflecting the growth
in top-line revenues in the Strategic Solutions Group,
improved gross margin and effective cost control.
2 Adjusted
operating profit is stated before amortisation of acquired
intangibles, acquisition costs, share- based payments expense and
exceptional items. See Note 4
20
RWS — Annual Report 2022
STRATEGIC REPORT
The Regulated Industries division accounted for 23%
of Group revenues in the year (FY21: 23%). Revenues of
£173.0m increased by 6% year on year on a reported basis
(FY21: £162.9m) and decreased by 2% on an organic constant
currency basis.
In the Life Sciences vertical, our Linguistic Validation ("LV")
proposition again performed strongly with a number of
additional programmes with existing clients, as well as
some significant new orders in Q4 – with multiple study
programmes covering LV, eCOA migration and proofreading,
and consulting services.
In August we joined Critical Path Institute’s Electronic
Clinical Outcome Assessment (eCOA) Consortium to help
drive the science, best practice and adoption of eCOA within
clinical trials. An eCOA replaces the traditional paper-based
approach to collecting patient results, feedback, and results
in clinical trials and studies. RWS has delivered LV for more
than 20,000 clinical outcome assessments, into 429 language
pairs, in over 200 different specific therapeutic and disease
areas. As a result, we are pleased to be one of 19 member
organisations who collaborate across multiple disciplines for
the electronic collection of clinical outcome data. The Group
also started an important collaboration with a US-based
clinical trial platform provider during the year.
We saw solid performance with our largest life sciences
client, with continued growth in clinical and regulatory work
reflecting increased account management focus. Across our
top 20 clients, we saw good period-on-period growth with 13
of them (on a constant currency basis), including significant
new programmes with an existing medical device client
and an existing pharmaceutical client. We also secured a
major new client in the managed care segment – once again
reflecting our continued leadership in annual enrolment in
the US – and we won our first piece of Contract Research
Organisation ("CRO") business in Japan.
As previously announced, in the second half of the year we
decided to gradually reduce work with a large CRO which
lowered its volumes and moved into offering competing
services.
In the financial and legal services vertical we saw solid
revenues, with several new client wins with financial services
organisations in the last quarter. In the first half we exited
several low-margin contracts which impacted revenues,
but improved profit performance. Our ESG and risk and
compliance offerings have shown encouraging signs of
progress.
The division’s adjusted operating profit2 increased 11% to
£31.6m (FY21: £28.4m), on a reported basis. This was driven by
increasing use of LXD, the exit from low-margin contracts and
effective cost control.
