Slide 1: Market Release: 2023 Annual Meeting Chair & CEO Addresses and Presentation
MARKET RELEASE 2023 Annual Meeting Chair & CEO Addresses and Presentation WELLINGTON, 17 August 2023 - Xero Limited (ASX: XRO) attaches the Chair and CEO addresses and Presentation for Xero’s 2023 Annual Meeting. The CEO address includes the announcement that Xero will be hosting an Investor Day on
Slide 2: Address by the Chair, David Thodey
XERO LIMITED – 2023 ANNUAL MEETING Thursday 17 August 2023 Address by the Chair, David Thodey AO Kia Ora, good morning from Auckland New Zealand and welcome to Xero’s 2023 Annual Meeting. I’m David Thodey and I am the Chair of the Xero Board. Thank you for attending today’s Meeting. I am with the Bo
Slide 3: Chair address continued: CEO appointment and performance
Shareholders can submit written questions during the Meeting by clicking on the “Ask a Question” button. I encourage shareholders who have questions to submit them as soon as possible, including if you have questions about any of the resolutions. If you have any issues at all using the platform, ple
Slide 4: Chair address: market environment and subscribers
It has been another year of change and adaptation around the world. Businesses, governments, economies, workplaces and our communities continue to face a complex macroeconomic environment. Within this environment, we continue to see small businesses being the employment engine-room of economies and
Slide 5: Chair address: sustainability reporting and governance
All businesses will be impacted by these changes and this will present a significant change for some businesses, requiring a whole-of-organisational uplift in the quality and robustness of disclosures. There is also an opportunity for Xero to help small businesses position themselves for this change
Slide 6: Chair address: conclusion
in product development and will ensure that the Board will continue to have strong skills in this area, and you’ll hear from Anjali later in the Meeting. Anjali’s appointment demonstrates our commitment to ensure that the Board continues to bring the right mix of skills and experience to help realis
Slide 7: CEO address: FY23 financial results
470k or 14% growth, with total subscribers at the end of the year of 3.74 million. Pleasingly ARPU also grew strongly, up 10%, or 8% on a constant currency basis. Headline EBITDA of $158.4 million was impacted by non-cash impairments and restructuring costs, resulting in a 26% reduction. However bac
Slide 8: CEO address: key observations and principles
with continued product development to improve our features and offerings for our customers each year. I now want to remind you of the three key observations I called out at our full year results as we move to our next phase of growth: 1. We are well positioned for the significant long term opportuni
Slide 9: CEO address: cost outlook and Investor Day
across each of our expense lines. In the case of sales and marketing – the flat to down arrow reflects optionality to direct spending to revenue generating opportunities across our multiple levers, of course with appropriate discipline. As we have said before, our long term aspiration is to improve
Slide 10: Xero Limited Annual Meeting August 2023
Xero Limited Annual Meeting For personal use only 17 AUGUST 2023
Slide 11: Important notice
Important notice This presentation is given on 17 August 2023 on behalf of Xero Limited (Xero) (ASX:XRO) (Company number NZ 183 0488, AU ARBN 160 661 183) Information in this presentation: • is for general information purposes only, and is not an o er or • includes statements relating to past perfor
Slide 12: Board of Directors
Board of Directors For personal use only David Thodey, AO Steven Aldrich Mark Cross Rod Drury Lee Hatton CHAIR INDEPENDENT NON-EXECUTIVE INDEPENDENT NON-EXECUTIVE XERO FOUNDER INDEPENDENT NON-EXECUTIVE INDEPENDENT NON-EXECUTIVE DIRECTOR DIRECTOR NON-EXECUTIVE DIRECTOR DIRECTOR DIRECTOR People and Re
Slide 13: Agenda
Agenda 1. 2. 3. 4. For personal use only David Thodey Sukhinder Singh Cassidy CHAIR CHIEF EXECUTIVE OFFICER Chair’s CEO Resolutions Q&A address update 4
Slide 14: Using the online platform
Using the online platform Voting Questions Get a Voting Card Ask a Question For personal use only ? Get a Voting Card Ask a Question Help number Download the 1 800 990 363 if you are calling Online Guide at from Australia xero.com/investors/ or under Downloads +61 1800 990 363 if you are calling fro
Slide 15: Agenda
Agenda 1. 2. 3. 4. For personal use only David Thodey Sukhinder Singh Cassidy CHAIR CHIEF EXECUTIVE OFFICER Chair’s CEO Resolutions Q&A address update 6
Slide 16: Agenda
Agenda 1. 2. 3. 4. For personal use only David Thodey Sukhinder Singh Cassidy CHAIR CHIEF EXECUTIVE OFFICER Chair’s CEO Resolutions Q&A address update 7
Slide 17: FY23: Strong operating result drives free cash flow generation
FY23: Strong operating result drives free cash ow generation Financial and operating performance highlights for the year ended 31 March 2023 OPERATING REVENUE ADJUSTED EBITDA FREE CASH FLOW $1,399.9m $301.7m $102.3m For personal use only + 28% YOY (25% in + $93.0m YOY + $100.2m YOY constant currency
Slide 18: Growing with efficiency: improved operating leverage
Growing with e ciency: Improved operating leverage drives increase in operating income margin Improving e ciency alongside continued revenue momentum drove operating income margin higher. Targeting an operating expense to 1 operating revenue ratio in FY24 of around 75.0%, this will improve operating
Slide 19: Observations from CEO: areas to touch on
Observations from CEO Areas to touch on For personal use only North America Planday Modernisation Continued con dence that Impairment of $77.9m mainly Continued multi-year journey North America is a critical re ects a reduction in market which will help us modernise, market. Xero is providing value
Slide 20: Observations from CEO: disciplined and customer focused
Observations from CEO We will be more disciplined and customer focused in the way we manage resources and capital to grow For personal use only Being more Being more Being more Being more focused… dynamic… measured… balanced… …on serving our customers …in our short term …and clear on our …Xero will
Slide 21: Outlook
Outlook Xero will seek to balance growth and pro tability in its approach to capital allocation, subject to investment criteria and market conditions, to drive long-term shareholder value For personal use only Along with reinvestment in strategic priorities management is targeting an operating expen
Slide 22: Evolution of Xero's financial profile
Evolution of Xero’s nancial pro le LONG TERM EXPENSE RATIO FY23 FY24 EXPECTATION ASPIRATION SALES & MARKETING 33.7% Expected ratio trend vs FY23: Flat to down of revenue For personal use only PRODUCT DESIGN 35.0% Expected ratio trend vs FY23: Down & DEVELOPMENT of revenue GENERAL & 12.0% Expected ra
Slide 23: Agenda
Agenda 1. 2. 3. 4. For personal use only David Thodey Sukhinder Singh Cassidy CHAIR CHIEF EXECUTIVE OFFICER Chair’s CEO Resolutions Q&A address update 14
Slide 24: Resolution: Auditor's fees and expenses
RESOLUTION 1 For Auditor’s fees 109,306,050 and expenses 99.87% That the board is authorised to x the For personal use only fees and expenses of Ernst & Young as Against auditor for the ensuing year 96,091 0.09% Discretionary 47,038* 0.04% *28,486 of which are held by the Chair of the Meeting who in
Slide 25: Resolution: Re-election of Mark Cross
RESOLUTION 2 For Re-election of 92,797,218 Mark Cross 84.79% That, Mark Cross, retiring from o ce as For personal use only director of Xero at the close of the Against Meeting, and being eligible, be re-elected as a director of Xero 16,597,667 15.17% Discretionary 47,578* 0.04% *29,026 of which are
Slide 26: Resolution: Election of Anjali Joshi
RESOLUTION 3 For Election of 108,943,986 Anjali Joshi 99.54% That Anjali Joshi, retiring from o ce as For personal use only a director of Xero at the close of the Against Meeting, and being eligible, be elected as a director of Xero 453,793 0.41% Discretionary 47,643* 0.04% *29,091 of which are held
Slide 27: Resolution: Re-approval of the US Incentive Scheme
RESOLUTION 4 For Re-approval of the 105,854,535 US Incentive Scheme 96.72% That the Xero Limited USA Incentive For personal use only Scheme, as amended and restated Against 3,548,549 by the Board on 22 June 2023, be approved 3.24% Discretionary 45,803* 0.04% *27,098 of which are held by the Chair of
Slide 28: Resolution: Increase the non-executive directors' fee cap
RESOLUTION 5 For Increase the 99,198,860 non-executive 99.72% directors’ fee cap For personal use only That, for the purposes of ASX Listing Against Rule 10.17, the maximum annual fees able to be paid to all of the non- 229,305 executive directors of Xero taken 0.23% together be increased by NZ$600,
Slide 29: Agenda
Agenda 1. 2. 3. 4. For personal use only David Thodey Sukhinder Singh Cassidy CHAIR CHIEF EXECUTIVE OFFICER Chair’s CEO Resolutions Q&A address update 20
Slide 30: Glossary
Glossary Churn Liquid resources Churn is the value of monthly recurring revenue (MRR) from Liquid resources comprises cash and cash equivalents, short- Adjusted EBITDA subscribers who leave Xero in a month as a percentage of the total term deposits including proceeds from convertible notes, and undr
Slide 31: Beautiful business
For personal use only Beautiful business xero.com/investors