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ECSC - RESTRICTED

ECSC - RESTRICTED

The information contained in this document (“Presentation”) has been prepared by ECSC Group plc (the “Company”). The Company is a UK company quoted on AIM, a market operated by London Stock Exchange plc. This Presentation has not been fully verified and is subject to material updating, revision and further verification and amendment without notice. This Presentation has not been approved by an authorised person in accordance with Section 21 of the Financial Services and Markets Act 2000 (as amended) (“FSMA”) and therefore it is being provided for information purposes only.

Allenby Capital Limited (“Allenby Capital”), which is authorised and regulated by the Financial Conduct Authority, is acting as the nominated adviser and broker to the Company. Accordingly, the recipients should note that Allenby Capital is neither advising nor treating as a client any other person and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Allenby Capital nor for providing advice in relation to the matters contained in this Presentation.

While the information contained herein has been prepared in good faith, neither the Company nor any of its directors, officers, agents, employees or advisers give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as “Information”) and liability therefore is expressly disclaimed. Accordingly, neither the Company nor any of its directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation.

The views of the Company’s management/directors and/or its partners set out in this document could ultimately prove to be incorrect. No warranty, express or implied, is given by the presentation of these figures here and investors should place no reliance on the Company’s estimates cited in this document.

This Presentation may contain “forward-looking statements” that involve substantial risks and uncertainties, and actual results and developments may differ materially from those expressed or implied by these statements. These forward-looking statements are statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, performance, financial condition, prospects, growth, strategies and the industry in which the Company operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as of the date of this Presentation and the Company does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Presentation.

This Presentation should not be considered as the giving of investment advice by the Company or any of its directors, officers, agents, employees or advisers. In particular, this Presentation does not constitute or form part of any offer or invitation to subscribe for or purchase any securities and neither this Presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. No reliance may be placed for any purpose whatsoever on the information or opinions contained in these slides or the Presentation or on the completeness, accuracy or fairness thereof. In particular, any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should satisfy itself in relation to such matters.

Neither the issue of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any transaction and the right is reserved to terminate any discussions or negotiations with any prospective investors. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent.

Neither this Presentation nor any copy of it may be (a) taken or transmitted into Australia, Canada, Japan, the Republic of South Africa or the United States of America (each a “Restricted Territory”), their territories or possessions; (b) distributed to any U.S. person (as defined in Regulation S under the United States Securities Act of 1933 (as amended)) or (c) distributed to any individual outside a Restricted Territory who is a resident thereof in any such case for the purpose of offer for sale or solicitation or invitation to buy or subscribe any securities or in the context where its distribution may be construed as such offer, solicitation or invitation, in any such case except in compliance with any applicable exemption. The distribution of this document in or to persons subject to other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the relevant jurisdiction.

Disclaimer

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ECSC - RESTRICTED

Experienced Management Team

IAN MANNCEO

19 Years

SENIOR MANAGEMENT TEAM

LUCY SHARPCOO

19 Years

IAN CASTLECTO

16 Years

GEMMA BASHARANCFO

9 Years

PAUL LAMBSDOWNSales

13 Years

CLARE MACDONALDMarketing

7 Years

NON-EXECUTIVE DIRECTORS

ELIZABETH GOOCH MBENon-Executive Director

DAVID MATHEWSONNon-Executive Chairman

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ECSC - RESTRICTED

What We Do

Incident response ‘emergency’ services

Remotely manage client cyber security devices from ECSC’s Security Operations Centres (SOCs)

Develop Artificial Intelligence (AI) technologies

Consultancy to help clients achieve ISO 27001 information security certification

ECSC provides a full service of cyber security solutions

19 year record of year on year organic growth

Technical penetration testing or reviews of cyber security

Consultancy and certification to Cyber Essentials

Advise and assess clients for certification to the Payment Card Industry Data Security Standard (PCI DSS)

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ECSC - RESTRICTED

Our Market

UK cyber security market reported to be over £8 billion*

* UK Government Analysis 2020+ Plimsoll Report 2020

Proliferation of breaches

making cyber security a strategic

governance issue for

company boards

New UK legislation

(GDPR) now in force making

immediate breach reporting mandatory and

fines up to 2% of global turnover

Opportunity to significantly

scale business to meet current

demand and predicted

market growth

UK cyber security market growth rate 9%+

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ECSC - RESTRICTED

New Cyber Security Vulnerabilities

Source:cvedetails.com

0

5000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

10000

15000

20000

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ECSC - RESTRICTED

The First Major GDPR FinesIn July 2019, the Information Commissioner’s Office (ICO) issued the first GDPR cyber security related ‘intention’ to fine:

Website and mobile app hacked Starwood hotels hacked from 2016 to 2018

500,000 customer details stolen 339 million guest records stolen, 7m from the UK

£183m (1.5% of group turnover) £99m (0.6% of group turnover)

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ECSC - RESTRICTED

2019 Financial Performance

Managed Services division revenue up 48% to £2.6m(2018: £1.7m)

Recurring revenue growth of 27% to £2.0m(2018: £1.6m)

Adjusted* EBITDA+ break-even(2018: loss of £0.6m)

118 new Consulting Service clients secured (2018: 95)

Organic revenue growth of 10% to £5.9m(2018: £5.4m)

Successful up-selling in line with ‘land and expand’ strategy

Partner Programme developing, with over 100 signed up, expanding reach and routes to market

* Adjusted EBITDA excludes one-off charges and share based charges + EBITDA is defined as Earnings before Interest, Tax, Depreciation and Amortisation

Continued development of proprietary AI software, with 13% R&D investment

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ECSC - RESTRICTED

Key Performance Indicators

Performance Indicator Rationale 2019 2018 2017 Management Comment

Revenue Growth Measurement of the success of the organic growth strategy 10% 35% 9%*

Despite a challenging H1 with flat growth, H2 reverted to strong growth with record

revenues

Managed Services Recurring Revenue Growth

Visibility of the success of increasing the percentage of revenue from long-term

recurring revenues27% 46% 25%

Continued strong growth due to new contract wins and contract expansions

Managed Service Recurring Revenue Proportion

Visibility of the success of increasing the percentage of revenue from long-term

recurring revenues34% 29% 27%

In line with the strategy to increase this proportion

Managed Services Order BookCombined measurement of new client

contracts together with renewals of existing client contracts

£2.6m £2.5m N/AThe management team’s favoured overall measure of progress in managed services

Managed Services Gross Margin Delivery efficiency measurement 68% 53% 33%Indicative of increased leveraging of IPO

investment in capacity

Consulting Repeat Revenue Quasi-recurring from longer-term consulting clients 73% 78% 68%

Indicative of strong client retention and continued trust in ECSC quality

Consulting Gross Margin Delivery efficiency measurement 54% 57% 50%A direct result of the H1 decline in consulting

revenues that return to growth in H2

Contract Liabilities (Deferred Income) Contracted and invoiced revenue yet to be recognised £1.2m £0.9m £0.8m*

Indicative of growth in long-term client relationships, where pre-payment is a

feature

Research and Development (of revenue)

Continued investment in technology and intellectual property development 13% 8% N/A

A new measure introduced to show continued investment in technologies for the future

* Restated for 2017 and showing like-for-like comparison, due to IRFS 15 adoption from 1 January 2018

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ECSC - RESTRICTED

Organic Revenue Growth

* Adjusted for 12 months

0

£1,000,000

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 2016* 2017 2018 2019

£2,000,000

£3,000,000

£4,000,000

£5,000,000

£6,000,000

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ECSC - RESTRICTED

Current Trading

Continued managed service 3-year recurring wins

Overall Q1 revenue growth expected to be

circa 9%

Q1 Consulting sales levels up by more

than 15% year-on-year

9%NEW 15%

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ECSC - RESTRICTED

Outlook

Post-GDPR breach fines

Growth strategy (organic and potential acquisitions)

Increasing focus on managed services

Leverage existing capacity and resources

Development of sales partners

Growing profitability

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ECSC - RESTRICTED

SummaryStrong cyber security organic growth delivered, including in key area of managed services.

Cyber security continues to be a key risk issue

for company boards

A proven provider, with a broad range of cyber security

services

Continuing strong demand from new and

existing clients

New regulatory framework and

fines driving new sales

Artificial Intelligence (AI)

technologies

ECSC - RESTRICTED

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Employee Engagement Survey 2019

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ECSC - RESTRICTED

Profit and Loss

Year ended31 December

2019£’000


2018*£’000

Revenue 5,905 5,382

Cost of Sales (2,545) (2,642)

Gross Profit 3,360 2,740

Other Income 263 152

Sales & Marketing Costs (1,958) (1,817)

Administration Expenses (2,369) (2,333)

Operating Loss before Exceptional Items and Share Based Payments (593) (1,027)

Share Based Payments 105 111

Exceptional Items 6 120

Operating Loss (704) (1,258)

Finance Income - 1

Finance Cost (46) -

Loss before Taxation (750) (1,257)

Taxation (Charge)/Credit (26) 19

Loss for the year (776) (1,238)

Other Comprehensive Income - -

Total Comprehensive Loss for the year (776) (1,238)

Attributed to Equity Holders of the Company (776) (1,238)

Loss per Share pence pence

Basic Loss per Share (8.5) (13.6)

Diluted Loss per Share (8.5) (13.6)

*The Group has applied IFRS 16 from 1 January 2019, using the modified retrospective approach. Comparative information is not restated.

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ECSC - RESTRICTED

Cash FlowYear ended

31 December2019

£’000


2018*£’000

Cash Flow from Operating Activities


Adjustment for:

Amortisation of Intangibles 177 175

Amortisation of right-of-use assets 200 -

Depreciation of Property, Plant and Equipment 217 217

Profit on Disposal of Equipment (1) -

Finance costs 46 -

Share Based Payments 105 111

Cash used up in Operating Activities before changes in Working Capital (6) (754)

Change in Inventory (8) 35

Change in Trade and Other Receivables (349) (148)

Change in Trade and Other Payables 428 111

Change on Other non cash items (13) -

Cash generated from Operating Activities 52 (756)

Corporation Tax received 152 122

Net Cash Flow generated from Operating Activities 204 (634)

Acquisition of Property, Plant and Equipment (129) (105)

Disposal Proceeds 16 -

Development Costs capitalised (194) (187)

Net Cash Flow used in Investing Activities (307) (292)

Principal paid on lease liabilities (2018: principle paid on finance leases) (195) (21)

Interest paid on loans and borrowings (1) -

Net Cash used in Financial Activities (196) (21)

Net decrease in Cash & Cash Equivalents (299) (947)

Cash & Cash Equivalents at beginning of period 650 1,597

Cash & Cash Equivalents at end of period 351 650


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ECSC - RESTRICTED

Balance SheetYear ended

31 December2019

£’000


2018*£’000

ASSETS

Non-current Assets

Intangible Assets 429 412

Property, Plant and Equipment 283 427

Right-of-use Assets 896 -

Deferred Tax Asset 77 4

Total Non-current Assets 1,685 843

Current Assets

Inventory 26 18

Trade and Other Receivables 1,210 1,123

Corporation Tax Recoverable 265 155

Cash and Cash Equivalents 351 650

Total Current Assets 1,852 1,946

TOTAL ASSETS 3,537 2,790

LIABILITIES

Current Liabilities

Trade and Other Payables (2,137) (1,709)

Lease Liability (150) (20)

Total Current Liabilities (2,287) (1,729)

Non-current Liabilities

Deferred Tax Liability (99) -

Lease Liability (781) (20)

Total Non-current Liabilities (880) (20)

TOTAL LIABILITIES (3,167) (1,749)

NET ASSETS 370 1,041

EQUITY

Equity attributable to Owners of the Parent:

Share Capital 91 91

Share Premium Account 5,661 5,661

Share Option Reserve 291 186

Retained Earnings (5,673) (4,897)

TOTAL EQUITY 370 1,041


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ECSC - RESTRICTED

Revenue BreakdownYear ended

31 December2019

£’000


2018*£’000

Revenue

Consulting 2,922 3,122

Managed Service 2,585 1,745

Vendor Products 162 228

Other 236 287

Total Revenue 5,905 5,382

Gross Profit

Consulting 1,574 1,783

Managed Service 1,745 923

Vendor Products 29 42

Other 12 (8)

Gross Profit 3,360 2,740

Operating Loss (704) (1,258)

Finance Income - 1

Finance Cost (46) -



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