Slide 1: 2019 Full Year Roadshow
2019 Full Year Roadshow Ended 30 September 2019 19 November 2019 Commercial in confidence Disclosure Statement TechnologyOne Ltd Full Year Presentation – 19 November 2019 TechnologyOne Ltd (ASX: TNE) today conducted a series of presentations relating to its 2019 Full Year results. These slides have
Slide 2: Agenda
Agenda Agenda • Results • • Results Significant Achievements • • Significant Outlook forAchievements Next Year • • Outlook for Next Long Term Year Outlook • Long Term Outlook Our global SaaS ERP solution transforms our customers’ business, and makes life simple for them 2
Slide 3: Any device, Anywhere, Anytime
Any device, Anywhere, Anytime Enabling a digital revolution This is what is driving our continuing strong growth 3
Slide 4: Record FY19 Net Profit Before Tax of $76.4m
Record FY19 Net Profit Before Tax of $76.4m 10 consecutive years of Record Profit Top End of Full Year Guidance of $76.3m Achieved Guidance provided at the H1 Results presentation… “We see strong continuing growth in 2019 Net Profit Before Tax of $71.6m to $76.3m” 1Profit Guidance of $76.3m is 15% g
Slide 5: Strong results as we transitioned the business to SaaS accounting
Strong results as we transitioned the business to SaaS accounting ✓ Profit Before Tax up 208% on FY18 Statutory profit1 of $24.8m ✓ Profit Before Tax up 50% on FY18 Comparable profit2 of $50.8m Positions us for strong growth going forward 1 AASB15 statutory basis restates FY18 results applying the A
Slide 6: Our SaaS business continues to grow strongly
435 enterprise customers on TechnologyOne SaaS Up 25% from 347 enterprise customers pcp Target 1000 enterprise customers by 2022 Our SaaS business continues to grow strongly SaaS ARR1 $102m up 44% 1ARR (Annual Recurring Revenue) was previously referred to as ACV (Annual Contract Value) ARR is a non-
Slide 7: Total Annual Recurring Revenues will increase to $500+m in FY24
Total Annual Recurring Revenues will increase to $500+m in FY241 1Total ARR in FY19 was $202m SaaS continues to drive our growth Outlook for FY20 is strong Discussed later in more detail 7
Slide 8: Dividend up 8%
Dividend up 8% Dividend last ten years Full year dividend increased Up 8% Up 8% Up 8% Dividends for the 2019 year: Up 46% Up 8% Up 8% 2.00 2.00 2.00 Half 1 3.15 cps up 10% (75% franked1) Up Up 7% Down Up 10% 2.00 2.00 Compound 52% 17% 1 Growth Half 2 8.78 cps up 43% (60% franked ) 1.50 1.50 12% Tota
Slide 9: “Comparable” is how we measure the real performance of the business
“Comparable” is how we measure the real performance of the business FY18 Comparable: - Applies AASB15 to FY18 results - Applies non-IFRS, unaudited, proforma capitalised R&D (50%, $26m) to FY18 results This sets a much higher bar to compare FY19 against Results Summary This is how we measure our bus
Slide 10: Our SaaS business is growing strongly
Our SaaS business is growing strongly SaaS ARR1 is growing at 44% per annum ARR UP Compelling value proposition of 44% TechnologyOne Enterprise SaaS $31.3m $101.7m ✓ One global code line ✓ Massive economies of scale Organic growth ARR UP 39% ✓ 8 active-active data centres $19.7m ✓ Defence-in-depth s
Slide 11: We continue to double in size every 4 to 5 years
We continue to double in size every 4 to 5 years Reported Net Profit After Tax up 15% on FY18 reported results of $51.0m,,before introduction of AASB15 $58.5m $51.0m COMPOUND $44.5m GROWTH $41.3m $35.8m 14% $31.0m UP 15% $27.0m $58.5m $23.6m FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 the last six years
Slide 12: Cash Flow, FY19 Comparable
H1:H2 Profit Skew improves to 45% : 55% over next 5 years 120% 100% The skew between H1 and H2 profit will continue to 80% improve as our SaaS 68% business recurring revenue 60% 84% base continues to grow 40% FY18 profit skew was 16%:84% 20% 32% FY19 profit skew was 32%:68% 16% 0% FY18 FY19 H1 H2 *F
Slide 13: Balance Sheet, Statutory
Balance Sheet, Statutory* Sep-19 Sep-18 Var Var #039;000 #039;000 #039;000 % Cash & cash equivalents1 105,046 104,322 724 1% Prepaid expenses 12,810 10,852 1,958 18% Trade and other receivables1 73,639 61,433 12,206 20% Net Assets: $106.9m up $29.4m (38%) Other current assets Current tax assets 2,567 6,783 2
Slide 14: FY19 Profit Contribution
FY19 Profit Contribution APAC and UK APAC Profit of $78.3m Up 40%, $22.3m Refer slide: UK UK Loss of $1.9m Up 64% $3.3m $56.0m $78.3m APAC ($5.2m) ($1.9m) UK Results Analysis and Key Metrics, FY18 Comparable 2019 v 2018 Comparable 2019 2018 Var% 2019 v 2018 Comparable 2019 2018 Var% Revenue excl int
Slide 15: Vertical Market Analysis
Agenda Agenda • Results • • Results Significant Achievements • • Significant Outlook forAchievements Next Year • • Outlook for Next Long Term Year Outlook • Long Term Outlook Vertical Market Analysis 99% customer retention ARR of $202.5m up 16% across all markets Other* $12.9m, 6% Local Government $
Slide 16: Harvest substantial opportunities in our customer base
On premise licence business is reducing over time allowing a smooth transition to SaaS SaaS - High quality annual recurring revenue SaaS Revenue vs Initial On Premise Licences Up 21% $460m $457m $410m Up 27% $360m $377m Up 31% $310m $296m $260m Up 38% $210m $226m Up 61% $160m Up 44% $164m $110m $102
Slide 17: Significant investment for future growth
Significant investment for future growth R&D investment of $60.1m1, 21% of Revenue 1R&D expenditure before capitalisation R&D Investment up 11% v 8% target Highly Disciplined approach to R&D. We expense maintenance and research. We capitalise development based on actual timesheets for eligible proje
Slide 18: United Kingdom
Consulting Profit of $9.9m, up 64% Consulting is responsible for implementation of our software Turnaround has Turnaround underway Turnaround driven by: occurred in APAC in the UK ✓ New leadership Up Up ✓ Two focussed divisions 64% 17% • New Projects 3.9m $1.7m • Applications Managed Services for ou
Slide 19: FY19 Full Year Summary
FY19 Full Year Summary ✓ SaaS is driving our business growth ✓ Record profit, record SaaS ARR 3 ✓ Top end of guidance achieved, 15% growth FY18 before AASB15 ✓ Profit $76.4m, up 50% on FY18 comparable profit1 ✓ Profit $76.4m, up 208% on FY18 statutory profit2 ✓ SaaS ARR of $102m up 44% pcp 3 ✓ Total
Slide 20: Outlook for 2020 Year
Outlook for 2020 Year Continuing strong growth • SaaS is driving our continuing strong growth • The enterprise software market is accelerating its move to SaaS • TechnologyOne key markets remain strong: Local government, higher education, government and government related businesses • The pipeline f
Slide 21: Drivers for long term growth
Agenda Agenda • Results • • Results Significant Achievements • • Significant Outlook forAchievements Next Year • • Outlook for Next Long Term Year Outlook • Long Term Outlook Drivers for long term growth 14 Licensable products1 6 Vertical markets Diversified geographies2 Over 325 licensable modules
Slide 22: Our SaaS business is growing strongly
Our SaaS business is growing strongly SaaS ARR1 is growing at 44% per annum ARR UP Compelling value proposition of 44% TechnologyOne Enterprise SaaS $31.3m $101.7m ✓ One global code line ✓ Massive economies of scale Organic growth ARR UP 39% ✓ 8 active-active data centres $19.7m ✓ Defence-in-depth s
Slide 23: Harvest substantial opportunities in our customer base
Harvest substantial opportunities in Illustrative model only Not to be used as guidance our customer base In FY18 we achieved 5.38 Estimate $420m of new ARR by FY2027 products per customer In FY19 we achieved 5.54 16 products per customer 15 14 12 11 8.1 6.6 Only 50% 4.6 5.1 Product 3.8 Penetration
Slide 24: Profit margin to grow to 35+%
Continuing growth in the UK The UK market is 3x the size of Australian market for our enterprise system Approaching critical mass Profit margin to grow to 35+% Driven by the significant economies of scale from our single instance global SaaS ERP solution 24
Slide 25: Positioned well for the future and to continue to double in size
Positioned well for the future and to continue to double in size every 5 years ✓ SaaS continues to grow strongly ✓ Annual recurring revenues to increase to $500+m in FY24 ✓ Harvest substantial opportunities in our customer base ✓ Continuing growth in APAC ✓ Continuing growth in the UK ✓ Profit margi