Full Year Results (FY15)December 2015

1

Andrew Brode

Executive Chairman

Reinhard Ottway

Chief Executive Officer

Richard Thompson

Group Finance Director

Financial Highlights

2

• Sales increased by 2% to £95.2m (2014: £93.6m )

– Sales increased by 5% in constant currency

• Adjusted profit before tax* increased by 3% to £22.7m (2014: £22.1m)

• Reported PBT up 6% to £20.7m (2014: £19.6m)

• Adjusted diluted earnings per share* were 8.1p (2014: 8.0)**

• Total dividend increased by 7% to 4.88p (2014: 4.58p)**

• Net cash at period end £30.6m (2014: £22.5m)

* Adjusted profit before tax is before charging amortisation of intangible assets and share scheme costs

** The prior year figures have been adjusted to reflect the 5:1 share split approved in Feb 2015

Delivered profit ahead of market expectations

Operating Highlights

3

• Continued organic progress and investment for future growth:

- 7% increase in core patent translations sales (constant currency), reflects prior period and 2015 client wins supported by a spike in patent applications following the 2011 America Invents Act

- Further strong growth in China, Japan and our German operation

• inovia revenues grew by 5% to £20.4m (2014: £19.4m)

• PatBase subscription revenues grew by 7.5%

• Continued investment in the Group:

- Integration and strengthening of joint sales forces in USA and Europe

- Further expansion of Chinese production and training initiatives, sales team and agents

- New language technology projects in China and Germany

- Creation of patent translation facility within the German operation

- PatBase infrastructure, searchability, analytics, content and geographical coverage

• Intellectual property support services accounted for over 80% of Group revenue

Strong Track Record

4

FY Adjusted PBT (£m)*FY Revenue (£m)

27.331.0

35.9

40.8

46.2

54.1 55.3

60.6

65.468.8

77.4

93.6 95.2

0

10

20

30

40

50

60

70

80

90

100

Rev

enu

e (£

m)

5.6 6.0

7.4

9.0

11.0

13.914.5 14.6

16.217.2

21.0

22.122.7

0

5

10

15

20

25

Ad

just

ed P

BT

(£m

)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

* Adjusted profit before tax is before charging amortisation of intangible assets and share scheme costs

Financial Review

5

Currency exposure and revenue analysis

6

27%

12%46%

5%10%

Expenditure by currency

Euro

USD

GBP

JPY

Other

51%

20%

17%

6% 5%

Revenue split by currency

Euro

USD

GBP

JPY

CHF

Other

1%

12 months ended30 September 2015

£m

12 months ended30 September 2015

£m

% Increase

Revenue (as reported) 95.2 93.6 +2%

Effect of currency headwind - (2.9)

Revenue at constant currency 95.2 90.7 +5%

Revenue Analysis

Exchange rate movements

7

12 months ended30 September 2015

£’000

12 months ended 30 September 2014

£’000

Net Y on Y Movement

£’000

Profit made on realised forward contracts 960 962 (2)

Estimation of losses due to reduced sales as GBP hasstrengthened

(705) - (705)

Trading and realised forward contracts in the Year 255 962 (707)

Exchange effect on assets denominated in foreign currencies 354 (484) 838

Mark to Market on unrealised forward contracts (246) (12) (234)

Total Year on Year Exchange Rate variance 363 466 (103)

Variance analysis – due to exchange rates movements

Income Statement

8

Year ended

30 September 2015

£m

Year ended

30 September 2014

£m

Turnover 95.2 93.6

Gross profit 37.5 36.8

Gross Margin % 39.4% 39.3%

Administrative expenses (14.6) (14.8)

Adjusted operating profit ** 22.9 22.0

Net finance income (0.2) 0.1

Adjusted profit before tax ** 22.7 22.1

Intangibles amortization * (1.6) (1.6)

share option costs (0.4) (0.9)

Profit before tax 20.7 19.6

Taxation expense (5.2) (4.4)

Profit for the year 15.5 15.2

Basic EPS (pence) 7.3 7.2***

Adjusted diluted EPS** (pence) 8.1 8.0 ***

*** After adjusting for the 5:1 share split approved in Feb 15

Profit Before Tax Bridge

£m

0.81.1 (0.7)

(0.3) (0.3)

22.7

0

5

10

15

20

25

30

2014 Exchangemovement onbalance sheet

items

Underlyingtrading profit

Net effect ofcurrency

headwind

Release of excessDilapidation

Provision in prioryear

Movement in netfinance income

2015

22.1

9

Balance Sheet

* customer relationships, trademarks, technology and goodwill

Year ended

30 September 2015

£m

Year ended

30 September 2014

£m

Intangibles * 38.3 38.7

Fixed Assets 17.7 17.3

Deferred tax assets 0.3 0.4

Total non-current assets 56.3 56.4

Cash 30.6 22.5

Other current assets 18.2 16.9

Current liabilities (17.3) (15.0)

Net Current Assets 31.5 24.4

Provisions and other creditors (0.3) (0.4)

Deferred tax liabilities (1.8) (2.0)

Total net assets 85.7 78.4

10

Cash Flow Statement

Year ended

30 September 2015

£m

Year ended

30 September 2014

£m

Cash inflow generated from operations 24.3 23.2

Interest received 0.1 0.1

Taxation paid (5.1) (5.2)

Capital Expenditure (1.3) (5.0)

Net cash inflow before financing 18.0 13.1

Equity dividends paid (9.8) (8.7)

Cashflow movement 8.2 4.4

Opening cash 22.5 18.3

Exchange rate movement (0.1) (0.2)

Closing cash 30.6 22.5

Free cashflow 18.0 13.1

11

Operational Review

12

Patent Translation & Filing

• 55% of group sales (77% including inovia)

• 7% growth (5% with inovia) in constant currency reflecting previous client wins and organic growth

• Increase in patent applications following the 2011 America Invents Act

• New wins in China and Japan for translation and filing services

• Full integration of US and European IP sales teams and global marketing. Appointing sales agents in Korea and China

• Record new patent applications filed in 2014 increases confidence going forward

• Continued development of online filing and language technology

42.445.3

48.4 48.952.0 52.9

30

35

40

45

50

55

60

65

70

75

FY 10 FY 11 FY 12 FY 13 FY14* FY15*

Patent translation and filing revenue growth

*Including inovia

13

19.4 20.4

71.473.3

inoviaPatent

translation

Information

• 6% of Group sales

• Broadly flat performance against an exceptional FY14:

₋ Exceptional search demand in prior year from largest client

₋ New client wins and organic growth

• New Chinese search group set up in Beijing after successful training programme in London

₋ Taking on existing Chinese search work previously outsourced

₋ Increased margins and new USP

• PatBase growth of 7.5% over the year and continued investment in the offering:

₋ Searchability

₋ Content

₋ Analytics

₋ Geographic coverage

4.3

4.6

5.0

5.3

6.26.0

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

FY 10 FY 11 FY 12 FY 13 FY 14 FY15

Information services revenue growth

Continued growth in PatBase and investment for the future

£m

14

Commercial Translation • 17% of Group sales

• Revenues flat vs 2014 but up +4% in constant currency

• Headwinds from currency and cyclical downturns

• German business saw 2% sales growth and 11% on a

constant currency basis

- Into-German patent translation facility established in Berlin office

• Excellent Q4 performance in Linguistic Validation Division

(PharmaQuest)

• Continued growth of interpreting business (+10% on PY)

• Continued focus on specialist niches and larger projects to

maintain competitive edge

13.9

15.5 15.5

17.4

16.0 15.9

10.0

11.0

12.0

13.0

14.0

15.0

16.0

17.0

18.0

FY 10 FY 11 FY 12 FY 13 FY 14 FY15

Commercial translation revenue

Enhancing market position in a competitive environment

£m

15

Rationale • The world's leading life sciences translation and linguistic validation provider

• Strong fit: focus on high margin, specialist niches with a similar culture

• Provides greater US presence

• Provides cross-selling opportunities

• Diversification from IP and statutory risks

• Greater currency diversification

Transaction

details

• $70m cash consideration paid, funded by:

- $25m from internal cash resources

- $45m through a five year loan provided by Barclays

- Former owners contracted to remain until Oct 2016

Financial

impact

• $70m paid based on EBITDA of not less than $7m for the year to 31 Dec

2015

• Revenues of $23m and adjusted EBITDA of $4.8m for the year 31 Dec 2014

• Expected to be immediately and significantly earnings enhancing

Corporate Translations Acquisition

16

Corporate Translations Acquisition

Strong fit• Specialist language services

• Critical to clients' IP development; underpinning attractive margins

• High quality service

• Strengthens RWS’ life sciences penetration, client overlap only small

• Complementary geographical presence

• Immediately transforms the Group to a market leader in Life Sciences

translation and Linguistic Validation services

Integration

• Combine with Pharmaquest and Medical Translation Division

• Run as a specialist life sciences unit, with US head quarters and UK

subsidiary

• US management reporting to the Board

Key

opportunities

• Provides a strong platform from which to expand the Group in the US

• Expected to benefit from RWS’ presence in Europe and Asia

• Cross-selling opportunities:

- Existing IP, medical translation and Pharmaquest services to

broader pharmaceutical client base

- Linguistic validation to existing pharmaceutical clients

17

5%

10%

19%66%

New Group at a glance

% by Revenue

Patent Translation & Filing

Life SciencesCTi, MTD, PharmaQuest

Information & PatBaseCommercial Translation

18

Key opportunities - priorities• Territories

– US: Focus in the short to medium term. Utilize new US presence in Connecticut for marketing other Group services

– Japan: Continue to expand market share for filing services in Japan

– China: Increase sale of Group services, especially inovia.com filing

• Life Sciences Translation and Linguistic Validation– Combine Medical Translation Division and PharmaQuest with CTi and drive combined sales

– Finalise management structure

• Cross-Selling– Continue to introduce inovia.com to key accounts, and RWS IP services to inovia clients

– Move beyond IP sector for cross-selling opportunities

– Exploit new Life Sciences leadership in global RFPs covering IP and Life Sciences

• Technology– Continue piloting and implementing machine translation and terminology into workflow

– Increase inovia platform functionality and include other services

– Drive integration of platform with IP Management Systems

– Add design patents to PatBase and increase functionality of Asian data

– Consolidate and increase efficiencies of translation process, technology, data exchange and integration within the Group

• Supplier Management– Continue to use combined market share of RWS/inovia to consolidate and renegotiate patent agent and other suppliers

19

Summary & Outlook

20

Current Trading & Outlook

• Solid start to new financial year, in line with expectations

• Current year to benefit from:– recent client wins and healthy pipeline of new opportunities

– full inovia integration

– contribution from CTi

• Confident in future prospects for the Group

• Developing market leading positions in IP Services as well as Life Science translations and Linguistic Validation

21

Appendix

22

A Market Leading Position in IP Support Services• The world’s largest provider of patent translation

• The world's leading life sciences translation and linguistic validation provider

• The global leader in foreign patent filing

• A leading patent search service with the PatBase database covering over 52 million patent families

• Global expertise in technical translations

• Long term relationships with a broad base of the world’s leading patent filers:

23

Long Term Growth Market

• Patent applications reported by the World Intellectual Property Office (WIPO) showed a 4.5% increase to 214,500.

• Increase driven by USA (6.9%) and China (15.8%)

• Chinese PCT application numbers up by 20.0% in the first 8 months of 2015

• National phase entries up by 5.3% to 565,500 in 2013

(US, China, Japan, Korea, Europe):

• Reported a 5.5% growth in patent filings in 2014

• 2.3 million patent applications filed (2.57 million worldwide)

• China showed the highest growth; at 12.5% to 928,000 in 2014 (127,000 of which came from foreign applicants)

Patent Filings Trends at the IP5 Offices (2004-2014)

• European Patent Office (EPO) applications up 3.1% to 274,174

• Applications from the US up by 7.3%

• Applications from China up by 13.5%

Trends in PCT Filings (1990-2014)

European Patent Filings (2010-2014)

24

Visibility and Value Chain

RWS services from Research to IP Protection and beyond

Research and development

Patenting Clinical Trials, Drug Registration

Commercialisation, Litigation

• Patent Search

• Technical Translation

• Patent Search

• Patent Translation

• Patent Filing

• Life Sciences Translation

• Linguistic Validation

• Patent Search

• Life Sciences Translation

• Technical, Legal andother Commercial Translations andInterpreting

• Patent Translation

27

Spread of the Business

Patent

translation

services 56%

(FY14: 55%)

Information

services 6%

(FY14: 7%)

Commercial

translation

17% (FY14:

17%)

inovia 21%

(FY14: 21%)

Breakdown by business activity

Based on turnover figures for the year ended 30 September2015

UK 18%

(FY14: 18%)

Asia 8%

(FY14: 8%)

Continental

Europe 48%

(FY14: 49%)

Breakdown by client location

Intellectual property support services now 83% of Group revenues

Americas 26%

(FY14 25%)

28

Currency on trading items

27

• Volatility on trading items has increased versus prior year comparisons

• The average rate used for conversion:

– Dollar was 1.54 (2014: 1.66) to the £ a 7% favourable movement

– Japanese Yen was 184.6 (2014: 170.8) to the £ 8% adverse movement

– 1 Euro = 74.0p (2014: 81.5p) 9% adverse movement

• The Group has hedged its future net trading exposure at average rates of:

– 1 Euro = 81p from 1 June to 31 December 2015

– 1 Euro = 72p from 1 January to 31 March 2016

Shareholders List

Major Shareholders (as at 23 November 2015)

Shareholder Holding (%)

Andrew S Brode 42.6

Liontrust Asset Management 12.5

Octopus Investment 6.6

Investec 4.8

Hargreave Hale 3.1

Blackrock Investment Management 2.1

Invesco Perpetual 1.9

(IHT Funds approximately 20% in aggregate)

30

Key Management

Role Name Years of Service

Chairman Andrew Brode 20

Chief Executive Reinhard Ottway 22

Group Finance Director Richard Thompson 3

UK MD, Translations Division Charles Sitch 22

UK Deputy MD, Translations Division Neil Simpkin 22

Director, Commercial Translations Division Jo Hindley 16

Business Development Director Caroline Chenique 21

IT Director Roberto Aletto 26

MD, Germany/Switzerland Andreas Siegmund 17

MD, Japan Marie Hara 16

MD, China Weimin Zhang 10

Presidents of CTi Ted and Mary Gawlicki

Non-Executive Deputy Chairman David Shrimpton

Non-Executive Peter Mountford

Non-Executive Liz Lucas

31