Slide 1: 2017 First Half Results Presentation
For personal use only Appen Limited 2017 First Half Results Presentation
Slide 2: For personal use only
For personal use only The forward looking statements included in these materials involve subjective judgement and analysis and are subject to significant uncertainties, risks, contingencies, many of which are outside the control of, and are unknown to Appen Limited. In particular, they speak only as
Slide 3: Company snapshot
Company snapshot For personal use only 74.1 Appen is a global leader in the development of high- quality, human annotated datasets for machine 53.4 learning and artificial intelligence. The company has operations in Australia, the US, Revenue EBITDA the UK and the Philippines 12.8 Appen’s strong per
Slide 4: First half highlights
First half highlights (A$m) For personal use only Revenue Strong performance continues 74.1 • Revenue up 39% to $74.1M 53.4 • EBITDA up 44% to $12.8M • NPAT up 50% to $8.1M • EBITDA margin improvement from 14.5% to 17.2%1 1H FY2016 1H FY2017 • Strong cash conversion (99% of EBITDA) Earnings 12.8 • I
Slide 5: Strong divisional performance
Strong divisional performance (A$m) For personal use only Language Resources revenue up 13% Content Relevance revenue up 52% Language Resources Content Relevance 53.3 20.7 18.4 35.0 Revenue Revenue EBITDA EBITDA 7.4 7.5 9.0 6.1 1H FY2016 1H FY2017 1H FY2016 1H FY2017 Most of Language Resources’ reve
Slide 6: Long term customer relationships
Long term customer relationships (A$m) For personal use only Growth and new customer wins in key markets: technology, automotive, security 110.9 2H 17 Working with multiple data types: text, image, audio, video 82.6 74.1 Secure work increasing. Investing in secure data 60.5 annotation facility 50.9
Slide 7: Margin Improvement
Margin Improvement For personal use only Volume discounts for major customers EBITDA dampened margins in 2H 2016. $14.0 17.5% 17.0% $12.0 Productivity improvements and cost 16.5% management have improved margins in 1H 2017 $10.0 16.0% $8.0 15.5% EBITDA margin improvement from 14.5% 2H $6.0 15.0% 201
Slide 8: High growth continues
High growth continues (A$m) For personal use only % change Revenue up 39% on 1H 2016 1H FY2017 1H FY2016 % change constant currency Revenue growth from current and new projects with existing customers along with Statutory Results new customer wins Language Resources 20.7 18.4 13% 17% EBITDA up 44% C
Slide 9: Strong Balance Sheet
Strong Balance Sheet (A$m) For personal use only Jun-17 Dec-16 Strong balance sheet. No debt. Cash 20.0 16.5 Increase in cash reserves and receivables related to increase in revenue volumes Receivables 23.2 21.9 Other Current Assets 1.0 0.4 2H 2017 capex estimate at $4M largely due to investment in
Slide 10: Strong cash conversion
Strong cash conversion (A$m) For personal use only 1H FY2017 FY2016 1H FY2016 Cash balance increased by $7.0m Receipts 71.9 106.8 50.7 over 1H 2016 Payments and other 59.2 90.1 -44.0 Cash flow from operations significantly Cash flow from operations before interest and tax 12.7 16.7 6.7 improved due
Slide 11: Currency impact
Currency impact (A$m) For personal use only Almost all revenue derived Revenue EBITDA offshore, most in USD 22.7 2.0 74.1 4.6 0.6 12.8 53.4 Low currency impact in 1H 8.8 2017 Strong underlying growth 1H FY2016 Currency Neutral Currency Impact 1H FY2017 1H FY2016 Currency Neutral Currency Impact 1H F
Slide 12: Growing use of AI increasing the need for data
Growing use of AI increasing the need for data For personal use only Technology Automotive Security Technology companies are Auto makers rely on speech for Speech and image recognition making full use of machine hands-on control, routing and are being used in surveillance learning for speech, comput
Slide 13: Appen well positioned for growth
Appen well positioned for growth For personal use only Proven Provider Global presence Scalable operations • Founded in 1996 Seattle Beijing • 333 full time staff Detroit Exeter worldwide • Trusted partner to 8 of San 10 largest global tech Francisco Manila • High staff engagement, companies low tur
Slide 14: Outlook
Outlook For personal use only Appen is well positioned in a growing market Long term customer relationships support growth and resilience YTD revenue plus orders in hand for delivery in 2017 ~$140M at end July 2017 The Company’s full year EBITDA for its financial year 2017, ending Dec 31st 2017, is
Slide 15: Thank you
For personal use only Thank you Mark Brayan, CEO mbryan@appen.com Kevin Levine, CFO klevine@appen.com Leanne Ralph, Company Secretary leanne.ralph@boardworx.net.au appen.com