Slide 1: WTC FY20 Results investor presentation (ASX announcement)
ASX Announcement: 2020/43 19 August 2020 WTC FY20 Results investor presentation Attached is the FY20 results investor presentation for the year ended 30 June 2020. // Authorised for release to ASX by David Rippon, Corporate Governance Executive and Company Secretary. About WiseTech Global WiseTech G
Slide 2: FY20 Results
Empowering and enabling the world’s supply chains FY20 Results © 2020 WiseTech Global
Slide 3: Agenda
CONFIDENTIAL BOARD DRAFT 150820 Agenda 1 FY20 Highlights 2 Financial Review 3 Strategy & Outlook 4 Q&A 5 Appendices 2 © 2020 WiseTech Global
Slide 4: FY20 Highlights
CONFIDENTIAL BOARD DRAFT 150820 FY20 Highlights RICHARD WHITE, CEO & FOUNDER © 2020 WiseTech Global 3
Slide 5: Financial highlights
Financial highlights Robust revenue and EBITDA growth, despite COVID-19 challenges Total revenue Recurring revenue EBITDA $429.4m ↑23% $126.7m↑ 17% on FY19 89% Group on FY19 20% CargoWise 97% CargoWise EBITDA margin 30% growth despite COVID-19 headwinds CargoWise 48% in FY20 NPATA(1) Operating cash
Slide 6: COVID-19 market context
COVID-19 market context Agile response to a global pandemic Our industry Our customers How we responded • Logistics movements fell steeply as COVID-19 hit • Lockdown restrictions bolstering demand for • Moved global workforce to remote working – manufacturing, followed by lockdown restrictions goods
Slide 7: Strategic progress
Strategic progress Focus on growing market share and investing for growth • Increased seats, usage and customer spend, including paid product enhancements Customer demand momentum • Large global wins included Hellmann Worldwide Logistics, Aramex, a. hartrodt and Seafrigo Group, with strong pipeline
Slide 8: Financial Review
CONFIDENTIAL BOARD DRAFT 150820 Financial Review ANDREW CARTLEDGE, CFO © 2020 WiseTech Global 7
Slide 9: FY20 results
FY20 results Strong financial performance, business resilient through COVID, actions on acquisitions create one-offs Financial results, A$m FY19 FY20 % change Total revenue of $429.4m up 23% on previous year - in-line with guidance: CargoWise Revenue 219.6 263.0 20% • CargoWise revenue up 20% to $26
Slide 10: COVID-19 financial impact in 2H20
COVID-19 financial impact in 2H20 Tale of two halves, 2H disruption offset by greater market penetration, cost out benefits Revenue impact: % change % change A$m 1H20 2H20 • Strong recurring revenue growth 1H20, slowed in 2H20 due to COVID-19, VPH VPH ~$10-$20m of forfeited revenue growth due to tem
Slide 11: FY20 revenue growth
FY20 revenue growth Solid organic revenue growth and impact of acquisitions FY20 revenue growth A$m $429.4 10.3 CargoWise revenue growth: (0.2) • $43.4m of revenue growth in FY20 up 20% on FY19 – inline with guidance 27.6 • $12.4m growth from new customers - strong opportunity pipeline 43.4 especial
Slide 12: FY20 operating expenses
FY20 operating expenses Investing to grow Product design and Sales and marketing (A$m) General and administration (A$m) development (A$m) 100.0 25% 22% 22% 120.0 25% 20% 100.0 21% 20% 20% 25% 20% 20% 15% 19% 13% 13% 20% 18% 19% 100.0 80.0 10% 15% 10% 20% 80.0 15% 10% 10% 80.0 60.0 15% 5% 60.0 5% 60.
Slide 13: FY20 research and development
FY20 research and development Product development and innovation continues to be a priority – increasing technology assets Investment in innovation & product development (A$m) 38% 34% 37% Product investment: 40% % 33% 32% R&D of 30%Revenue • 41% increase from FY19 to FY20 in product investment refle
Slide 14: FY20 balance sheet
FY20 balance sheet Strong balance sheet, cash flow generation and liquidity Strong liquidity: • $223.7m in cash • $190.0m undrawn debt facility with additional $200.0m accordion Receivables: • Receivables increase in-line with revenue growth, with minor increase in provision for future losses for sm
Slide 15: FY20 operating cash performance
FY20 operating cash performance Strong operating cash flow, investing in long term growth Strong operating cash flow: A$m FY19 FY20 • Up 16% on FY19 - increase demonstrates strength of underlying operating model, highly EBITDA 108.1 126.7 cash generative Non-Cash Items in EBITDA 9.0 20.2 • Increase
Slide 16: Strategy & Outlook
CONFIDENTIAL BOARD DRAFT 150820 Strategy & Outlook RICHARD WHITE, CEO & FOUNDER © 2020 WiseTech Global 15
Slide 17: Long term strategy: CargoWise global expansion – focused execution
Long term strategy: CargoWise global expansion – focused execution We are doing what we said we would, COVID-19 accelerates the opportunity we have built Foundation established Resources + global foothold Penetration + efficiency FY15–17 FY18–20 FY21–23 • CargoWise newly launched • Grew CargoWise EB
Slide 18: Market penetration: transactions on CargoWise
Market penetration Global rollouts continue to increase across 3PLs and global freight forwarders enhance value over time HELLMANN Transactions on CargoWise A.HARTRODT 2000 - 2008 TOLL Access other Efficiencies ROHLIG Events, modules from network Enterprise ARAMEX delegations Utilise new on CargoWis
Slide 19: Product development – progress and pipeline
Product development – progress and pipeline Investing in platform - adding powerful engines, new products, global data sets $438m invested in last 5 years 51% employees focus on Extending CargoWise Build out global engines Global customs and product development functionality and ecosystem cross-bord
Slide 20: Acquisitions – progress and integration
Acquisitions – progress and integration Integration process Build product + Grow Integrate operations commercial foundation Revenue + Expand 3–12 months Foothold: 12-36 months Margins Adjacency 3+ years Extract efficiencies Accelerate integration and execution (1) 19 © 2020 WiseTech Global 1. Border
Slide 21: Management priorities FY21 to leverage opportunities
Management priorities FY21 to leverage opportunities Expand Expand Drive technology market operational lead penetration efficiency Product Penetration Profitability • Investment and focus on CargoWise product • Sales team to target top 25 freight forwarders • Remove duplication in global operations
Slide 22: Acceleration of opportunity during + post COVID-19
Acceleration of opportunity during + post COVID-19 We are well positioned to transform the $13 trillion(1) global logistics and supply chain market Logistics providers reassess business models – move faster Seismic industry digital transformation accelerates 21 © 2020 WiseTech Global 1. Armstrong &
Slide 23: FY21 guidance
FY21 guidance Key assumptions and sensitivities Background FY21 Guidance 1 - CargoWise: recurring revenue market share growth of 15%-30% • FY21 guidance based on five significant parameters. FY21 revenue • allowed for 15-30% YOY organic growth (usual range 20-30%) • key variables include large custo
Slide 24: Summary
Summary Well positioned to continue to grow and increase market share Momentum with integration Cost out opportunities through Unique customer value proposition of strategic acquisitions centralisation of key functions Resilient business model – delivered revenue & EBITDA growth despite Well positio
Slide 25: Q&A
Q&A
Slide 26: Appendices
Appendices Slides 26. FY21 assumptions and F/X sensitivities 27. Revenue composition by licence type 28. Overview of licensing models, drivers and platform 29. CargoWise drivers of organic growth 30. CargoWise customer growth and low attrition 31. Container bookings vs container departures 32. Custo
Slide 27: FY21 guidance COVID-19 impact assumptions, F/X
FY21 guidance COVID-19 impact assumptions, F/X What is included in the FY21 guidance: FX rates v FY20 FY21 Foreign Exchange AUD actual guidance • Retention of existing customers with CargoWise • 75% of FY20 revenue in non-AUD currencies, usage growth consistent with historical levels GBP 0.53 0.55 2
Slide 28: Revenue composition - licence
Revenue composition - licence Group revenue by licence type Group revenue by licence type (A$m) (% of total revenue) $429.4m OTL & support 47.4 services 17% $348.3m 22% 72.8 OTL 28% 1% 37% 40.7 maintenance 8% 1% 40% 1% 57.8 2% $221.6m 39% 30% 11% 1% 22.9 53% 27.7 $153.8m On-Demand 309.2 15.1 $103.3m
Slide 29: Overview of revenue licensing models, drivers and platform
Overview of revenue licensing models, drivers and platform Customers in transition to On-Demand, ultimately move to transaction-based licensing Nature of revenue: Recurring revenue Other revenue 89% (1) 11% (1) Revenue categories: On-Demand licence OTL maintenance OTL & support services 72%(1) 17%(1
Slide 30: CargoWise drivers of organic revenue growth
CargoWise drivers of organic revenue growth CargoWise organic revenue growth drivers When does acquired revenue become CargoWise? Organic revenue relates to revenue from existing CargoWise As with everything we do, it is driven by the technology. STL revenue customers or new CargoWise customers and
Slide 31: Customer growth and low attrition
Customer growth and low attrition CargoWise application suite revenue by customer cohort 250 A$m, FY15-FY20 Increasing adoption by large globals 200 Top 300 customers now deliver ~80% of CargoWise revenue 150 Customers stay and use more 100 <1% attrition every year for last 8 years(1) Annual custome
Slide 32: CargoWise: container bookings vs container departures data
CargoWise: container bookings vs container departures data Container bookings executed through CargoWise can act as a leading indicator to departure volumes representing our customers’ intent to move goods. • Container bookings and container departures – % Difference in 7-day Moving Average from the
Slide 33: Acquired assets fuel customs build and geographic expansion
Acquired assets fuel customs build and geographic expansion Small targeted acquisitions in key regions provide safer, faster, stronger entry to new markets We are building the global customs platform, which will cover ~90% of manufactured trade flows Our acquired resources work to build out native c
Slide 34: Acquiring adjacency assets for innovation pipeline
Acquiring adjacency assets for innovation pipeline To build and extend CargoWise ecosystems • SmartFreight expanding into UK, interface to CW ready for pilot • Trinium executed large customer rollouts, 1H21 beta testing of transport orders in CW • Pierbridge parcel integration to CW ready for pilot,
Slide 35: Capitalised development and amortisation
Capitalised development and amortisation Capitalised development comprises: Software/technology useful life years Company Capitalised development % • In development = labour and overhead out of total development costs relating to the development of new WiseTech Global expenses modules and products X
Slide 36: Financial performance summary
Financial performance summary Income statement A$m FY19 FY20 Change (vs FY19) Revenue Recurring On-Demand licence 249.8 309.2 24% Recurring OTL maintenance 57.8 72.8 26% OTL & support services 40.7 47.4 17% Total revenue 348.3 429.4 23% Cost of revenues (61.8) (76.7) 24% Gross profit 286.4 352.7 23%
Slide 37: Income statement
Income statement A$m FY19 FY20 Revenue Recurring On-Demand licence 249.8 309.2 Recurring OTL maintenance 57.8 72.8 OTL & support services 40.7 47.4 Total revenue 348.3 429.4 Cost of revenues (61.8) (76.7) Gross profit 286.4 352.7 Operating expenses Product design and development (66.1) (84.9) Sales
Slide 38: Key operating metrics
Key operating metrics WiseTech Global including and excluding acquisitions FY20 FY19 FY20 CargoWise(1) Total revenue growth vs prior year 57% 23% 20% Recurring revenue 88% 89% 97% On-Demand licence revenue 72% 72% 96% Gross profit margin 82% 82% 92% Product design and development - % of total revenu
Slide 39: Explanatory notes
Explanatory notes $m Change FY16 PF FY17 FY18 FY19 FY20 (vs FY19) NPAT NPAT attributable to equity holders of the Parent 14.2 31.9 40.8 54.1 160.8 197% Fair value gain on contingent consideration - - - (1.6) (111.0) n.a. Contingent consideration interest unwind (net of tax) - - - - 2.9 n.a. Underlyi
Slide 40: FY20 Cash Flow
FY20 Cash Flow A$m FY19 FY20 Strong cash flow from operations: Receipts 373.3 456.4 • Up 15% on FY19 - increase – demonstrates strength of underlying operating model, highly cash generative Payments (246.9) (310.0) Investment in future growth: Taxes Paid (14.0) (16.5) • $144.4m reinvestment in long
Slide 41: Treatment of contingent consideration (AASB 9) and goodwill (AASB 136)
Treatment of contingent consideration (AASB 9) and goodwill (AASB 136) Differences in accounting rules and methodology Whilst the timing of the initial recognition is at acquisition date, the initial calculation and post-acquisition valuation of contingent consideration and goodwill are based on dif
Slide 42: Important notice and disclaimer
Important notice and disclaimer Content of presentation for information purposes only Preparation of information Visit wisetechglobal.com/investors All financial information has been prepared and reviewed in accordance with Australian Accounting Standards. Certain financial data included in this pre
Slide 43: Visit our investor centre for more information
Visit our investor centre for more information www.wisetechglobal.com/investors Information about CargoWise Information about our Corporate presentations and the logistics industry customers and other materials 42 © 2020 WiseTech Global
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