Open Text Corporation · TSX:OTEX

Open Text — Investor Day (September 2019)

109 slides from Open Text's investor day presentation, Sep 6, 2019

Slide 1: OpenText Investor Day
OpenText Investor Day NASDAQ: OTEX | TSX: OTEX September 6, 2019
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this presentation, including statements about the focus of Open Text Corporation (“OpenText” or “the Company”) in our fiscal year ending June 30, 2020 (Fiscal 2020) on growth, anticipated benefits of our partnerships and next generation product lines, the
Slide 3: Today's Agenda
Today’s Agenda (8:30 to 11:30 am ET) Presenters Topic Harry E. Blount, SVP, Global Investor Relations Welcome and Safe Harbor Mark J. Barrenechea, CEO & CTO Strategy & Direction Simon “Ted” Harrison, EVP, Sales Sales & Growth Muhi Majzoub, EVP, Engineering Innovation BREAK Gordon A. Davies, EVP, Chi
Slide 5: About OpenText and Our Value Creation Play Book
About OpenText and Our Value Creation Play Book The Enterprise Information Management Leader About OpenText Value Creation Play Book • Leader in Enterprise Information Management Recurring Revenue INNOVATION • Marquee eco-system(1): 74,000 customers, 60 million identities, 40 million end-points, 2 m
Slide 6: Our Strategy
Our Strategy Be The Continue to Help Deliver the best Relentless Leading hire, develop companies Hybrid Cloud focus on Platform for and retain the unlock their and operational Enterprise best, most Information Customer excellence & Information diverse & Advantage Experiences efficiency Management in
Slide 7: Our Ambitions
Our Ambitions The Information We are still early Advantage We are still early in in the journey the journey Full Market Leadership • Content Services EIM Hybrid Cloud, • Business Network Horizontal Platform • Security EIM as a new • Analytics / AI enterprise category • EIM Cloud On Premise • Vertica
Slide 8: What You Will Hear Today
NASDAQ, TSX: OTEX What You Will Hear Today A TSX-60 Company The mission-critical nature of OpenText Enterprise Information Management (EIM): Once in a 20-year shift within enterprise software. OpenText is accelerating innovation A Durable Business: strong results driven by the OpenText Business Syst
Slide 10: Trends Driving Our Business
Trends Driving Our Business Hybrid Cloud API Economy Nomadic Work Forces Extreme Mobility Drive for Information Insight Information Security & Privacy Empowered Edge Customer Experience Regulations & Compliance OpenText Confidential. ©2019 All Rights Reserved. 10
Slide 11: OpenText Runs at the Center of the Enterprise
OpenText Runs at the Center of the Enterprise Supply Chain Trading Partners ERP Customers Business Eco HR Systems Systems Suppliers CRM Productivity Vendors 20 of 25 top supply chains EIM is “enterprise class,” meaning it can scale big or small. Its scope is “information,” meaning all forms of data,
Slide 12: OpenText: Leader in Content Services
OpenText: Leader in Content Services #1 in Content Services (Platforms) All content is stored, machine readable, tagged and up-to-date CHALLENGERS LEADERS LEADERS OpenText OpenText Newgen Software Microsoft Hyland Oracle IBM Microsoft IBM SER Hyland Group Alfresco Alfresco M-Files Nuxeo Software Las
Slide 13: OpenText: Leader in Business Networks
OpenText: Leader in Business Networks #1 in Business Networks Platform for Global Commerce and Business to Business Integration Customers OpenText LEADERS Infor GT Nexus SPS Commerce E2open Bamboo Rose TrueCommerce Vecco One Network Trading Suppliers MAJOR PLAYERS Partners CONTENDERS PARTICIPANTS De
Slide 14: OpenText: Solving Information Sprawl
OpenText: Solving Information Sprawl Web Apps Cloud Storage SaaS IoT Devices Mobile Mashup App Portal E-commerce website Work folder Application to Application Integration We are a leader in organizing data (A2A) with our AppWorks(1) products Identity and Access Management (IAM) API Economy APIs to
Slide 15: The Mission Critical Nature of OpenText EIM
The Mission Critical Nature of OpenText EIM e-Invoicing Digital Supply Chain Content & Collaboration Predictive Maintenance Government of Canada Communications & Compliance Digital Citizen Analytics / ML Connected Cars OpenText Confidential. ©2019 All Rights Reserved. 15
Slide 17: The Definition of Durable
The Definition of Durable Textbook Definition OpenText’s Definition 1. EIM is mission-critical to the enterprise regardless of economic environment 2. Strong recurring revenues, cash flow and profitability adjective 3. As a capital allocator, we have substantial opportunities at lower values in a do
Slide 18: Pursuing a Large and Growing Addressable Market
Pursuing a Large and Growing Addressable Market EIM $100B Total Addressable Market(1): Our Playbook within the G10K Market Area OpenText Key Product Market Size Customer Value Approach 5 Key Vectors Families Content Suite, Documentum, ECM, Business Collaboration, File $30B Supporting new ways to wor
Slide 19: A Durable Business Driven by the OpenText Business System
A Durable Business Driven by the OpenText Business System Annual Recurring A-EBITDA & Margin(1),(2) Operating Cash Flows(2) Revenue (ARR) (US$ M) (US$ M) (US$ M) $2,156 $1,100 $876 100% 104% 110% $1,080 $538 $417 38.4% 33.1% FY'14 FY'19 FY'14 FY'19 FY'14 FY'19 Renewal Rates: A-EBITDA Margin(1) Stron
Slide 21: Top Priorities for Fiscal 2020
Top Priorities for Fiscal 2020 Expand the EIM Productivity Innovation Growth Deploy Capital Advancements (20.2) opportunity (in Cloud) (upper teens ROIC) (38% to 39% (G10K)(1) Adj EBITDA)(2) 1. G10K: The Global 10K represents the 10,000 largest companies and organizations in the world. OpenText Conf
Slide 22: OpenText Cloud Edition 20.2
OpenText Cloud Edition 20.2 Significant Business Model Benefits Past Recent April 2020 Future Many Point Products Product Families Cloud Platform Content Management • Products supported by Release 16 g CE standardized platform of services OT2 Cloud Platform OpenText CE 20.2 • Simplifies sales and En
Slide 23: The G10K
The G10K: The Strategic Theater for Enterprise Software and Clouds • World’s largest enterprises Central Europe, and governments(1)(2) North Russia, ME 505 accts America Europe (5%) • Large and global firms 3,413 accts 2,322 accts China Japan benefiting from digital (34%) (23%) 948 1,206 transformat
Slide 24: Total Growth Strategy: Grow The OpenText Cloud
Total Growth Strategy: Grow The OpenText Cloud OpenText Cloud: The Opportunity: • Cloud First approach • < 20% of install base penetrated • Platform for innovation • Applications for new and existing • Business Collaboration & eSign customers • Business Network and App-to-App • Migrate and modernize
Slide 25: Total Growth Strategy: FY'20
Total Growth Strategy: FY’20 Total Revenue Growth FY’20 Business Profile (US$ M) License Constant $ year-over-year $2,869 12% Cloud High-single digit growth CAGR Customer Support Constant to low-single digit growth $1,625 Constant $ year-over-year Professional Services Optimized for margins M&A Addi
Slide 26: The OpenText Business System Starts with Total Growth
The OpenText Business System Starts with Total Growth • High Annual Recurring Revenues (ARR), 75% of total revenues Retain • Increased customer intimacy and value creation • 90%+ renewal rates(1) • Accelerated innovation with $2B in R&D over Enterprise the next 5 years Grow • Scale our leadership po
Slide 27: Total Growth Strategy: Retain
Total Growth Strategy: Retain Annual Recurring Key Metrics Benefits & Opportunity Revenue (ARR) (US$ M) $2,156 • Steady consumable stream from our install base 100% • The Value Advantage: 90% Margin for Renewals ◦ 24 x 7, global support $1,080 ◦ Product and service updates ◦ New versions ◦ Security
Slide 28: Total Growth Strategy: Acquire
Total Growth Strategy: Acquire M&A Growth is Self-Funding Disciplined Approach to M&A FY’19 (US $M) • M&A is a core competency, supported by the OpenText Business System and internal team of experts, ranging from sourcing, deal OCF $876 execution, financial modeling and integration • We look for lea
Slide 29: Investing in Our Future Growth
Investing in Our Future Growth Top Software Companies A-EBITDA & Margin(1),(2) Reinvest above (Bloomberg) (US$M) 40% A-EBITDA $1,100 EBITDA Margin(2,3) Low High > 40% Future N = 160 104% 4th Q Today Upper (4th) Quartile 24% 44% $538 3rd Q Plan on improving productivity 3rd Quartile 10% 24% 38.4% Abo
Slide 31: The OpenText Business System
The OpenText Business System Our Competitive Advantage: It is who we are and how we work Total Growth Integration Total Customer-Driven Innovation Growth Return on Invested Capital Systems, Tools, Methods (ROIC) Strategic Acquisitions Operational Excellence Diligence Best Teams Win Dividend, Capital
Slide 32: The OpenText Business System at Work
The OpenText Business System at Work Deployed $4.8B of capital since Content Management FY’14 Enterprise Content Division 18.7% ROIC in FY’19 HP CEM & CCM Software OpenText IPO Joined on NASDAQ TSX60 1991 1996 2014 2015 2016 2017 2018 2019 Business Networks and Other Founded out of Release 16 Univer
Slide 33: Experienced Executive Leadership Team (ELT)
Experienced Executive Leadership Team (ELT) Muhi Madhu Prentiss Paul Brian Majzoub Ranganathan Donohue Duggan Sweeney EVP, EVP, SVP, SVP, SVP, Engineering CFO Portfolio Group Revenue CHRO Operations Ted James Gordon Patty David Savinay Harrison McGourlay Davies Nagle Jamieson Berry EVP, EVP, EVP, SV
Slide 35: Committed to Value
Committed to Value Key Messages Value Creation Play Book • The mission-critical nature of OpenText Annual Recurring INNOVATION Enterprise Information Management (EIM): Revenue Growth • A Durable Business: strong results driven + REINVEST by the OpenText Business System Margin Expansion FOR GROWTH +
Slide 37: Executive Summary
Executive Summary Our customers are the ultimate advantage • 2,000 field-facing Sales Professionals • We organize by Buying Center, Geography and Customer Segmentation • We will grow by: ◦ Expanding to new G10K customers ◦ Expanding adoption within our install base of 74,000 customers ◦ Meaningful p
Slide 38: Our Customers Are The Ultimate Advantage
Our Customers Are The Ultimate Advantage “The only sustainable source of competitive advantage, the only Security defensible position, is to Vertical Customer concentrate on knowledge of, and Apps Experience engagement with, customers.” —Forrester(1) OpenText Trading Cloud Grid AI and Content Analyt
Slide 39: The OpenText Go-to-Market Model
The OpenText Go-to-Market Model Global Account Solution Managers Consultants Global Enterprise Accounts Value Account Engineers Executives Enterprise Accounts Corporate Accounts Business Inside Sales Development Representatives Managers 2,000 Field-Facing Account Partner Development Account Sales Pr
Slide 41: The G10K Coverage Model
The G10K Coverage Model • Marquee customers with Central transformative requirements Europe, North Russia, ME America Europe 505 accts • 3 year plan to double our (5%) coverage (direct and through 3,413 accts 2,322 accts China (34%) (23%) 948 Japan partners) 1,206 accts accts (10%) (12%) • Expansion
Slide 42: Expanding Adoption within our Install Base
Expanding Adoption within our Install Base Security • Customers see OpenText as their strategic partner Vertical Customer Apps Experience • Approximately 10% penetrated in an average account • Increasing adoption drives consistent OpenText Trading revenue growth Cloud Grid • Account Based Marketing
Slide 43: Partners: A Force Multiplier
Partners: A Force Multiplier Managed Ecosystem Global SI Developers / IP GPP OEM Partner Alliances with Strategic Alliances Regional strategic Technology Deliver white Global focus on defining new Partners focused providers whose labeled solutions, implementing routes to market on growth within a of
Slide 44: Grow: Through Meaningful Partners
Grow: Through Meaningful Partners “New OpenText Content “Google Cloud has selected “OpenText and Mastercard Management Services to be OpenText as its preferred partner Partner to Transform Financial delivered through SAP® Cloud for Enterprise Information Processes Across Global Platform.” Management
Slide 45: OpenText Cloud is the Platform for Innovation
OpenText Cloud is the Platform for Innovation 74,000 customers $907.8M Revenue(1) 19% 5yr CAGR Trading Grid Managed Security and VAN and ODM SaaS +2M Trading Partners Services Identity Trillions of dollars OpenText Core Trusted by the Largest OpenText provides a +60M ID’s managed transacted per year
Slide 46: Migrate, Modernize and Monetize into the OpenText Cloud
Migrate, Modernize and Monetize into the OpenText Cloud • 3,000 Cloud customers over 5 3,000 years • Faster than internal IT • 30% lower TCO(1) • 99.99% - best in class uptime • Highly secure • Never upgrade again 2015 2016 2017 2018 2019 1. TCO – Total Cost of Ownership OpenText Confidential. ©2019
Slide 47: Customer Case Study – Migrate to OT Cloud
Customer Case Study – Migrate to OT Cloud Company An American insurance company providing life insurance products, annuities, and mutual funds, and offers a variety of investment products and services to individuals, businesses, and pension plans. Employees : 3,578 Revenue : $10.7B(1) Assets : $158B
Slide 48: Customer Case Study – Install Base Top 10 Global Bank
Customer Case Study – Install Base Company One of the largest banks in the United States, and a Top 10 largest bank in the world by total assets. Employees : approx. 250,000 Top 10 Global Revenue : $100B+ (FY’18) The customer’s mission is to be the best financial services company in the world. Bank
Slide 49: Customer Case Study – New G10K
Customer Case Study – New G10K Company An American multinational technology company that specializes in Internet- related services and products, which include online advertising technologies, search engine, cloud computing, software, and hardware. Employees : approx. 105,000 Revenue : $137B (FY’18)
Slide 50: Committed to Value
Committed to Value Our customers are the ultimate advantage • Once in 20 year opportunity within the enterprise to migrate, modernize and monetize our customers to the OpenText Cloud • Expanding to new G10K customers • Large opportunity within our install base • Proven and growing long-lasting partn
Slide 52: Executive Summary
Executive Summary Our Portfolio • A Cloud First strategy • Leader in Content Services, Business Network and EIM Cloud First Customer Experience • Top strategic partner to the G10K • Scale in Security and AI/ML EIM Cloud Born 25 years OT2 is an investment in SaaS for new and existing customers that o
Slide 53: The Product Advantage
The Product Advantage Vertical Applications OT2 Release CE IoT & IAM OpenText Security Cloud Analytics Developer CEM Search eDiscovery Business Network ECM Expanding the EIM Market Place OpenText Confidential. ©2019 All Rights Reserved. 53
Slide 54: Acknowledged Leadership Across EIM
Acknowledged Leadership Across EIM Content Services Content Services Business Network Business Network Media Mgmt Forrester Wave™: Enterprise Gartner Magic Quadrant for Content IDC MarketScape: Multi-Enterprise Ovum Market landscape Forrester Wave™: Digital Asset Content Management — Content Service
Slide 55: Customer Driven Innovation
Customer Driven Innovation Ethical Information Supply Digital Work Building Platform for Trust and Chains & the and Digital Twins Collaboration Innovation Governance API Economy Content Business OpenText IoT & IAM Core Services Network Cloud OpenText Confidential. ©2019 All Rights Reserved. 55
Slide 56: Our Product Investment Strategy
Our Product Investment Strategy New investments in use cases, integrations and modernization for existing platforms and products Investing in Cloud, Native- SaaS, AI/ML use cases, new products and vertical applications 60% Investment in future bets such as IoT & Blockchain 30% 10% ROI HORIZON 0-12 m
Slide 57: Investing in R&D: 3,500+ Engineers Globally
Investing in R&D 3,500+ Engineers Globally 11%-13% 3,500 1,000+ (1) Developers R&D Expense Patents up 4x over 8 years + $2B investment in R&D over the next 5 years 1. Percentage of OpenText Total Revenues – refer to F’20 target model. OpenText Confidential. ©2019 All Rights Reserved. 57
Slide 58: OpenText Cloud – Migrate and Modernize
OpenText Cloud – Migrate and Modernize 74,000 Customers Trust BILLIONS Managed SaaS EIM of Transactions Services Offerings 3,000+ Managed Services 99.99% Security Customers Availability Agility Hybrid & Integrated Lower TCO Any 2 Any Compliant & based Private and Public Integration on Standards Clou
Slide 59: The Next Generation of Private Cloud
The Next Generation of Private Cloud All OpenText offerings will be Cloud First! Accelerate innovation, be more secure, better serve users. Today The last upgrade you’ll ever do. April 2020 Run Continuous Flexible Containerized (stay on prem anywhere updates if needed) OpenText Confidential. ©2019 A
Slide 60: We Are Building on a Strong Foundation
We Are Building on a Strong Foundation OpenText Release 16 OpenText CE (Cloud Edition) Content Suite Business Network Media Management Documentum Active Apps Security & TeamSite AI & Analytics xECM FAX, SMS, & eDiscovery Exstream eDOCS Notifications OpenText Confidential. ©2019 All Rights Reserved.
Slide 61: Product Advantage Technology Advantage
OpenText OT2 Product Advantage Core Core Core Federated Core for Core for Core Signature Hightail Experience Collaboration Compliance SuccessFactors Workday * Insights Machine Learning, Intelligent Capture, AI & Predictive Intelligence OpenText Release 16 OpenText CE Content Suite Business Network M
Slide 62: OpenText Cloud Edition 20.2
OpenText Cloud Edition 20.2 Significant Business Model Benefits Past Recent April 2020 Future Many Point Products Product Families Cloud Platform Content Management • Products supported by Release 16 g CE standardized platform of services OT2 Cloud Platform OpenText CE 20.2 • Simplifies sales and En
Slide 63: OT2 SaaS Applications
OT2 SaaS Applications Embrace and Extend Off Cloud and Private Cloud Content Suite, Documentum and Two-Way Sync Media Management customers sync and collaborate with Core File & Folders collaboration and Hightail Workspaces Content Suite / Audit Trails Core Collaboration Documentum Core Signature Sec
Slide 64: Content Services
Content Services • World’s leader in content services platforms(1)(2), connecting content to the digital business with billions of documents under management • Most comprehensive platform for documents, workflow, capture, records management, archiving and business collaboration • New - Federated Com
Slide 65: Business Network
Business Network • World’s leader in business networks(1) enabling the largest global supply chains • Most comprehensive platform for invoicing, taxes, purchase orders, shipping notices, and tracking • New - Ethical supply chain with integration to D&B and Veritas • New - Global trading partner dire
Slide 66: Magellan
Magellan • Investing to win AI/ML integrated into OpenText EIM • Magellan now fully integrated into Content Services, Customer Experience, Business Networks and Security • Targeting ease of use, ease of deployment • New – Machine Learning Governance • New - Big data ETL / Dataflow capabilities • New
Slide 67: Security
Security • A leader in Endpoint security with EnCase, securing over 40M endpoints • Key information security capabilities ensuring corporate information assets are trusted and secure • New Privacy Center for governance, privacy and compliance needs • New Magellan integrations for monitoring and anal
Slide 68: Incredible Announcements at Enterprise World 2019
Incredible Announcements at Enterprise World 2019 We are all Our Roadmap → OpenText Core Apps, information OpenText Cloud Edition including Core Signature companies (CE) OpenText & SAP: OpenText and Google: OpenText & Mastercard: strengthening our the next generation transforming financial partnersh
Slide 69: Committed to Value
Committed to Value • EIM is a large, growing, strategic market, that is still evolving • Leverage our leadership in Content Services and Business Networks with key additive capabilities • Compelling road map and “trust in delivery” in a hybrid world • Accelerating customer migrations and modernizati
Slide 72: Total Growth Strategy: The M&A Advantage
Total Growth Strategy The M&A Advantage • M&A is the largest contributor to our Total Growth Strategy Enterprise • Corporate Development covers all Information Management aspects from building a full pipeline of strategic opportunities, through acquisition to integration • Disciplined value buyers w
Slide 73: Industry Coveted & Highly Skilled M&A Team
Industry Coveted & Highly Skilled M&A Team Dedicated team of M&A professionals who lead and are responsible for the full lifecycle of a deal at OpenText – from pipeline generation through to execution and integration Technology and Significant Financial Integration Go-To-Market Experience Modeling T
Slide 74: OpenText Acquisition Criteria
OpenText Acquisition Criteria Leadership Position Value for OpenText’s Recognized leader in key market Customers segments Enhances our product offerings & capabilities Market Penetration IP or New Capabilities Add new or deepen relationship Build versus buy with existing customers Solid Track Record
Slide 75: Acquisition Strategy
Acquisition Strategy • Evaluate businesses within the context of “The Information Company” strategy • Fill functional white spaces, vertical capacities and key geographic expansion opportunities What We Target: • We value recurring revenues, paths to higher margin and strong cash flows Unlocking Val
Slide 76: Current Acquisition Environment
Current Acquisition Environment Internal External 1 Deals sourced from a multitude of 1 2019 YTD technology M&A volume internal and external sources is outpacing 2018 2 Very active target outreach program 2 Liaison and Catalyst on target 3 Robust top of funnel and diligence 3 Valuations declining an
Slide 77: Robust Diligence Process
Robust Diligence Process: A Key Factor in Successful Execution Legal and HR • We employ a highly robust due diligence process that involves all segments of our business, in addition Finance/Tax Corporate Marketing to a dedicated deal team Development • Corporate Development responsible for leading i
Slide 78: Approach to Integration Excellence
Approach to Integration Excellence Accelerated 12 month time-to-value model • Full integration of the acquired business into OpenText • Successful change management for employees, customers and vendors • Appropriate governance measures implemented • We run an integrated management model • Formalized
Slide 79: History of Successful Acquisitions
History of Successful Acquisitions eDiscovery Content Management • $4.8B of capital deployed since 2014 for acquisitions Supply Chain Data Analytics & Visualization • 13 completed acquisitions over 5 years Information Integration • High-teens ROIC File Sharing Archiving Identity Management Customer
Slide 80: Track Record of Success: Documentum
Track Record of Success: Documentum Content Services • When we acquired it in 2017, Documentum CHALLENGERS LEADERS was #3 content management player with: shrinking business, losing share, declining OpenText single digits year/year, low teen margins, Oracle IBM Microsoft products were stale Hyland Al
Slide 81: Track Record of Success: Covisint
Track Record of Success: Covisint Identity and Access Management as a Service • Acquired market leading cloud-based identity and access management platform and proven CHALLENGERS LEADERS industry leader in B2B, connected vehicle and IoT technologies • Cost optimized and brought the business from Okt
Slide 82: Track Record of Success: Liaison
Track Record of Success: Liaison • Liaison Technologies: expanded OpenText’s market leading business network offerings • Alloy Platform: handles both integration and data management workflows and solves A2A integration challenges, adding application networks with a Cloud platform that supports both
Slide 83: Committed to Value
Committed to Value • M&A is the largest contributor to our Total Growth Strategy • Core competency delivered through internal capabilities • Integration excellence is a key differentiator • Track record of success, with ROIC as the key metric • Large market, ample assets, solid pipeline, and financi
Slide 85: Executive Summary
Executive Summary Annual Recurring • Annual Recurring Revenue growth from $1.08B in Revenue (ARR) ($US M) 2014 to $2.16B in 2019 $2,156 • Market leading renewal and margin rates 100% • One global organization for hybrid cloud renewals, 3,300 dedicated OpenText Customers experts $1,080 • Focused on:
Slide 86: Key Financial Metrics
Key Financial Metrics Cloud Customer Support Mid 90’s 58% Low 90’s 90% Renewal Rate Gross Margin(1) Renewal Rate Gross Margin(1) • Significant opportunity to scale Cloud Gross • Best-in-class renewal rates, and we are still Margin to mid 60s in the longer term, with driving for improvements scale an
Slide 87: The Value Advantage: Support Programs
The Value Advantage: Support Programs We raise the standard Trusted, proven protection to Prime Protect against the unexpected • OpenText is trusted by many of the What’s included Prime Protect world’s leading companies - 74,000 customers & top 20 global brands All future versions of products / clou
Slide 88: OpenText Cloud Value Advantage
OpenText Cloud Value Advantage Cloud Revenue (US$ M) Help Cloud Desk Storage +19% $907.8 5-yr CAGR Systems Managed Monitoring Backups $373.4 Cloud Systems Value Hardware Management Advantage Procurement FY'14 FY'19 Systems Change Security Business Management Customers IDs Managed Endpoints Trading P
Slide 89: Our Customer Management Model
Our Customer Management Model Land Adopt Expand Renew Systematic Process AI Based Risk Opportunity Automation • Onboarding • Product news and • Build on the delivered • OpenText adoption plays value Process • Customer Success Plans • Learning Services • Upsell new use cases • Manage and reduce churn
Slide 90: Customer Satisfaction and NPS Performance
Customer Satisfaction and NPS Performance 95% Customer Satisfaction +10 Net Promoter Score (NPS) points over (CSAT) last year 1 2 3 4 5 Fast resolution Mutual collaboration Best Professional Highest quality times Ease of sales Services delivery OpenText Confidential. ©2019 All Rights Reserved. 90
Slide 91: Lifetime Value Michelin
Lifetime Value Michelin Company Headquartered in Clermont-Ferrand, France, Michelin is present in more than 170 countries, has 111,200 employees and operates 67 production plants in 17 different countries. Opportunity Benefits • To minimize their supply chain risk, • OpenText Trading Grid® cloud-bas
Slide 92: Lifetime Value Salt River Project
Lifetime Value Salt River Project Company Salt River Project (SRP) began directing water to Arizona farmlands more than 100 years ago. Today, the public utility company provides water and electricity to more than two million people in the Phoenix metropolitan area and employs a workforce of more tha
Slide 93: Committed to Value
Committed to Value Renewal rates: low 90s for Off 3,300 experts dedicated to . . Cloud CS and mid 90s in the customer success Cloud Continued revenue expansion Continued strong improvement . . for ARR in both CSAT and NPS Land, Adopt, Expand, Renew High margin model in Customer Continuous improvemen
Slide 95: Executive Overview
Executive Overview The OpenText Business System advantage is a proven, durable and winning business model. Growing leadership in a large addressable market, with a profitable Total Growth Strategy, and performance in the upper quartile financial metrics leaves OpenText well positioned to deliver sol
Slide 96: The OpenText Business System
The OpenText Business System Our Competitive Advantage: It is who we are and how we work Total Growth Integration Total Customer-Driven Innovation Growth Return on Invested Capital Systems, Tools, Methods (ROIC) Strategic Acquisitions Operational Excellence Diligence Best Teams Win Dividend, Capital
Slide 97: Looking Back: Total Growth & Annual Recurring Revenue
Looking Back: Total Growth & Annual Recurring Revenue Total Revenues Annual Recurring Revenue (ARR) ($US M) ($US M) $2,869 $2,156 77% 100% $1,625 $1,080 FY'14 FY'19 FY'14 FY'19 Total Growth Annual Recurring Revenue Growth $4.8B of capital deployed Cloud revenue up $534M or 143% @ 2.1x revenue multip
Slide 98: Looking Back: A-EBITDA and Operating Cash Flows
Looking Back: A-EBITDA and Operating Cash Flows (OCF) A-EBITDA & Margin(1,2) OCF(2) ($US M) ($US M) $1,100 $876 110% 104% $538 $417 33.1% 38.4% FY'14 FY'19 FY'14 FY'19 Non-GAAP Gross Margin(1): 73.0% to 74.1% between Driven by higher Adj. EBITDA of $562M FY’14 and FY’19, driven by increase in Custom
Slide 99: Strong Balance Sheet & Liquidity
Strong Balance Sheet & Liquidity Our M&A is Self-Funding Strategic M&A FY’19 (US$ M) Ample capacity for strategic acquisitions Current Liquidity Consolidated Net Leverage Ratio(3) OCF $876 As of June 30, 2019 (US$M) Less: Principal $10 2.6x 2.3x Cash(1) $941 2.0x 1.9x 1.9x Less: CapEx $64 1.7x 1.7x
Slide 100: Profitable (Total) Growth Model
Profitable (Total) Growth Model Non-GAAP Gross Margin(1) Decisions Retain & Grow Customer, Deals & SOW Levels 74.1% Cumulative Spend From FY’14 to FY’19 (FY’19) Profitable (Total) Growth Product Go-to-Market Other Innovation 12% Revenue CAGR ROIC Decisions (FY’14 – FY’19) Sales & High Teens R&D: $1.
Slide 101: Continuous Improvement in the Operating Framework
Continuous Improvement in the Operating Framework Growth Factors • Expanded coverage in our Global 10K • Cloud First Approach • Use of AI to leverage “at-risk” renewals and reduce cancellations • Continuous acceleration of Time-to-Revenue • M&A Productivity Enhancements: Operating Expenses • Leverag
Slide 102: FY'20 Target Model: How We Get There
FY’20 Target Model: How We Get There Fiscal 2019 Fiscal 2020 Results Model* • License Gross Margin(1): Slightly Revenue Type: higher leverage from third party royalties Annual Recurring Revenue (ARR) 75.1% 74% - 76% License 14.9% A-EBITDA 13% - 17% Cloud Services and Subscriptions 31.6% Margin 31% -
Slide 103: FY'22 Long-Term Aspirations
FY’22 Long-Term Aspirations A-EBITDA Margin(1)(2) Operating Cash Flows(2) 38%-40% $1B-$1.1B 38.4% $876M +530 bps 110% 33.1% $417M FY'14 FY'19 FY'14 FY'19 1. Please see reconciliation of GAAP to Non-GAAP measures in our historical filings. 2. Refer to note 1 of our Fiscal 2019 10-K for details on the
Slide 104: FY'22 Long-Term Aspirations & Roadmap
FY’22 Long-Term Aspirations & Roadmap 38% to 40% Adj. EBITDA However, we will remain disciplined while we A-EBITDA margin aspiration of 38% invest:We will remain disciplined, while we invest to 40% is an ideal zone for OpenText We are ranked in the upper quartile performance among peers(1) A-EBITDA
Slide 105: FY'22 Long-Term Aspirations & Roadmap
FY’22 Long-Term Aspirations & Roadmap OCF Target of $1B to $1.1B in FY’22 However, we will remain disciplined while we invest: • Driven by higher profitability, productivity enhancements • Use of AI in collections, higher leverage in procurement and vendor management Operating Cash Flows (US$ M) OCF
Slide 106: Total Growth Strategy: FY'20
Total Growth Strategy: FY’20 Total Revenue Growth FY’20 Business Profile (US$ M) License Constant $ year-over-year $2,869 12% Cloud High-single digit growth CAGR Customer Support Constant to low-single digit growth $1,625 Constant $ year-over-year Professional Services Optimized for margins M&A Addi
Slide 107: Committed to Value
Committed to Value What You Heard Today What Did Financial Analysts Say? 1. A Leader in Enterprise Information • “…OpenText has a compelling hybrid vision going Management: #1 in Content Services and #1 in forward, we continue to see the company scaling via Business Network M&A given its broad focus

Open Text — Investor Day (September 2019) on 6ix

Open Text — Investor Day (September 2019)

Slide 1: OpenText Investor Day

Slide 2: Safe Harbor Statement

Slide 3: Today's Agenda

Slide 4: Mark J. Barrenechea

Slide 5: About OpenText and Our Value Creation Play Book

Slide 6: Our Strategy

Slide 7: Our Ambitions

Slide 8: What You Will Hear Today

Slide 9: The mission-critical nature of OpenText EIM

Slide 10: Trends Driving Our Business

Slide 11: OpenText Runs at the Center of the Enterprise

Slide 12: OpenText: Leader in Content Services

Slide 13: OpenText: Leader in Business Networks

Slide 14: OpenText: Solving Information Sprawl

Slide 15: The Mission Critical Nature of OpenText EIM

Slide 16: A Durable Business

Slide 17: The Definition of Durable

Slide 18: Pursuing a Large and Growing Addressable Market

Slide 19: A Durable Business Driven by the OpenText Business System

Slide 20: Building and evolving into a stronger, better OpenText

Slide 21: Top Priorities for Fiscal 2020

Slide 22: OpenText Cloud Edition 20.2

Slide 23: The G10K

Slide 24: Total Growth Strategy: Grow The OpenText Cloud

Slide 25: Total Growth Strategy: FY'20

Slide 26: The OpenText Business System Starts with Total Growth

Slide 27: Total Growth Strategy: Retain

Slide 28: Total Growth Strategy: Acquire

Slide 29: Investing in Our Future Growth

Slide 30: Running the OpenText playbook of Total Growth

Slide 31: The OpenText Business System

Slide 32: The OpenText Business System at Work

Slide 33: Experienced Executive Leadership Team (ELT)

Slide 34: Committed to Value

Slide 35: Committed to Value

Slide 36: Simon "Ted" Harrison

Slide 37: Executive Summary

Slide 38: Our Customers Are The Ultimate Advantage

Slide 39: The OpenText Go-to-Market Model

Slide 40: How We Grow

Slide 41: The G10K Coverage Model

Slide 42: Expanding Adoption within our Install Base

Slide 43: Partners: A Force Multiplier

Slide 44: Grow: Through Meaningful Partners

Slide 45: OpenText Cloud is the Platform for Innovation

Slide 46: Migrate, Modernize and Monetize into the OpenText Cloud

Slide 47: Customer Case Study – Migrate to OT Cloud

Slide 48: Customer Case Study – Install Base Top 10 Global Bank

Slide 49: Customer Case Study – New G10K

Slide 50: Committed to Value

Slide 51: Muhi Majzoub

Slide 52: Executive Summary

Slide 53: The Product Advantage

Slide 54: Acknowledged Leadership Across EIM

Slide 55: Customer Driven Innovation

Slide 56: Our Product Investment Strategy

Slide 57: Investing in R&D: 3,500+ Engineers Globally

Slide 58: OpenText Cloud – Migrate and Modernize

Slide 59: The Next Generation of Private Cloud

Slide 60: We Are Building on a Strong Foundation

Slide 61: Product Advantage Technology Advantage

Slide 62: OpenText Cloud Edition 20.2

Slide 63: OT2 SaaS Applications

Slide 64: Content Services

Slide 65: Business Network

Slide 66: Magellan

Slide 67: Security

Slide 68: Incredible Announcements at Enterprise World 2019

Slide 69: Committed to Value

Slide 70: Short Break

Slide 71: Gordon A. Davies

Slide 72: Total Growth Strategy: The M&A Advantage

Slide 73: Industry Coveted & Highly Skilled M&A Team

Slide 74: OpenText Acquisition Criteria

Slide 75: Acquisition Strategy

Slide 76: Current Acquisition Environment

Slide 77: Robust Diligence Process

Slide 78: Approach to Integration Excellence

Slide 79: History of Successful Acquisitions