Slide 1: 2016 Mid Year Presentation
7/20/2016 For personal use only 2016 Mid Year Presentation 20 July 2016 May 2016 Adrian Di Marco, Executive Chairman Commercial in confidence Commercial in confidence FINAL 1.0 Disclosure Statement Technology One Mid Year Presentation – 20 July 2016 Technology One Ltd (ASX: TNE) today conducted pres
Slide 2: Agenda: Half Year Results Recap
7/20/2016 Agenda For personal use only 2016 Half Year Results Recap • Outlook for Full Year • Long Term Outlook Appendix • Half Year Company Update • 2016 Half Year Results in Detail • TechnologyOne Overview Original Guidance Half year results in line with guidance Guidance provided at the start o
Slide 3: Results Summary
7/20/2016 Results Summary Strong result compared to the same period last year, when Revenue was up only 3%. Strong growth to continue over the full year. As per guidance given at start of financial year that the FY16 FY15 Variance % For personal use only sales pipeline was weighted to the second hal
Slide 4: Guidance For The Full Year
7/20/2016 Guidance For The For personal use only Full Year Profit growth of 10% to 15% for the full year Half Year Results The half year results are discussed in greater detail later – refer Appendix 4
Slide 5: Outlook for Full Year
7/20/2016 Agenda For personal use only 2016 Half Year Results Recap Outlook for Full Year • Long Term Outlook Appendix • Half Year Company Update • 2016 Half Year Results in Detail • TechnologyOne Overview Outlook for Full Year Outlook for the full year remains unchanged Assumptions also remain
Slide 6: Outlook For Full Year
7/20/2016 Outlook For Full Year For personal use only • Substantial base of committed Annual Licence fees heavily weighted to the second half • Strong pipeline of opportunities in second half • We are now preferred supplier for a number of very large contracts, for which we are now in contract negot
Slide 7: Long Term Outlook
7/20/2016 Agenda For personal use only 2016 Half Year Results Recap Outlook for Full Year Long Term Outlook Appendix • Half Year Company Update • 2016 Half Year Results in Detail • TechnologyOne Overview Long Term Outlook Long Term Outlook remains unchanged 7
Slide 8: Long Term Outlook: Net Profit Margin
7/20/2016 Temporary hiatus due to Cloud loss of $2.5m on revenues of $4.1m. Long Term Outlook Excluding Cloud business, margin is 23%. For personal use only Net Profit Margin Before Tax Focus is to 35% 31% substantially improve 29% 30% 27% 26% 25% 24% 25% PBT margins through: 25% 21% 21% 19% 21% 21%
Slide 9: Product Maturity and Cloud Services Fees to 2022
7/20/2016 Product Maturity For personal use only Tipping point when Profit exceeds Licence fees Contribute $16+m of additional Profit per year in 5+ years time 16 14 #039;m 12 10 8 6 4 2 0 (2) (4) CPM Financials & Student Asset Management Enterprise Content HR/Payroll Property Stakeholder Supply Chain
Slide 10: UK Licence Fees To 2022
7/20/2016 UK Licence Fees To 2022 #039;m For personal use only Licence Fees 35 $30.4M, UP 50% Compound Growth 63% 30 25 $20.3M, UP 50% 20 $13.5M, 15 UP 50% UK becomes profitable in 2017 $9.0M, UP 50% 10 $6.0M, UP 50% $4.0M, $2.5M, UP 60% 5 $1.4M, UP 79% $0.6M, UP 133% UP 111% 0 2014 2015 2016 2017 2018
Slide 11: Positioned well for the future
7/20/2016 Positioned well For personal use only for the future… Agenda 2016 Half Year Results Recap Outlook for Full Year Long Term Outlook Appendix Half Year Company Update • 2016 Half Year Results Detail • TechnologyOne Overview 11
Slide 12: TechnologyOne Cloud: Recognition
7/20/2016 2 For personal use only Recognition for the TechnologyOne Cloud Amazon Technology Partner of the Year UK Cloud Award – ERP Cloud Product of the Year Preferred supplier for UK Govt G-Cloud panel Preferred supplier for Australian Govt Cloud Services panel Selected for Australian Go
Slide 13: TechnologyOne Cloud and Ci Anywhere
7/20/2016 TechnologyOne Cloud For personal use only Enterprise software as a service TechnologyOne Cloud 5.0 now being rolled out Significant leap forward – Mass Production Model Huge economies of scale, Shared instance architecture key Migrate customers seamlessly from Cloud 1.0, 2.0, 3.0,
Slide 14: Software Delivery and Ci Anywhere
7/20/2016 For personal use only 2 Feature Releases per year The ‘train’ always leaves the station ‘on time’ Continuous fixes throughout the year No Documentation Initiative TechnologyOne University Evolve to a Smarter Software Delivery Ci Anywhere Enterprise software, incredibly simple Any
Slide 15: New R&D Centre In Vietnam
7/20/2016 New R&D Centre In Vietnam For personal use only • Fast track completion of Ci Anywhere in 2017 • Maintain R&D growth at 8% • Tap into a second source of developers • Redundancy to our Indonesian R&D centre • Allow Australia R&D to rebalance over time, to focus on design and architecture •
Slide 16: United Kingdom
7/20/2016 United Kingdom • United Kingdom $300k loss an improvement of $177k For personal use only • Four new customers, all of which are on the TechnologyOne Cloud • CIPFA Business Limited, Ealing, Hammersmith and West London College, Ongo Partnership Ltd, University of Exeter • University of Linco
Slide 17: Edward Chung Appointed Chief Operating Officer; Corporate Governance
7/20/2016 Edward Chung Appointed Chief For personal use only Operating Officer Australia & AsiaPac • Long serving operating officer • Structure to bring all of Australia and Asia Pacific region together • Similar structure for UK once scale is achieved • Better depth and co-ordination • Succession p
Slide 18: Agenda: Original Guidance
7/20/2016 Agenda For personal use only 2016 Half Year Results Recap Outlook for Full Year Long Term Outlook Appendix Half Year Company Update 2016 Half Year Results in Detail • TechnologyOne Overview Original Guidance Half year results in line with guidance Guidance provided at the start o
Slide 19: Results Summary
7/20/2016 Results Summary Strong result compared to the same period last year, when Revenue was up only 3%. Strong growth to continue over the full year. As per guidance given at start of financial year that the FY16 FY15 Variance % For personal use only sales pipeline was weighted to the second hal
Slide 20: Dividend; Total Expenses
7/20/2016 Dividend For personal use only Dividend Up 10% UP 10% 2.50 Compound Growth 10% Given strong profit growth for 2.00 Cents per share the full year, H1 dividend 1.50 increased 1.00 • 2.36 cps up 10% 0.50 (declared, 100% franked) • Payout ratio of 100% 0.00 2012 2013 2014 2015 2016 • Board wil
Slide 21: Total Expenses Up 16%; R&D Expenses
7/20/2016 Total Expenses Up 16% ($12.9m) For personal use only 8%, UP 16%, 95 $6.1M $91.5M 2%, 1%, $1.6M 90 5%, $0.9M $4.3M 85 $78.6M #039;m 80 75 70 H1 2015 Acquisition Forex Cloud Underlying Total Expenses Expenses Expenses (1) Expense (2) Expense (3) Expenses (4) 1) Acquisitions: additional $4.3m in
Slide 22: Balance Sheet
7/20/2016 Balance Sheet Mar-16 #039;000 Mar-15 #039;000 Var #039;000 % Cash & cash equivalents For personal use only 45,420 51,703 (6,283) (12%) • Cash & Cash Equivalents1 $45.4m (vs. $51.7m, down $6.3m) Trade and other receivables 39,415 39,246 169 0% Earned and unbilled revenue 16,325 10,941 5,384 49% • Ne
Slide 23: Results Analysis and Key Metrics
7/20/2016 Results Analysis For personal use only 2016 2015 Variance Half Year 2016 v Half Year 2015 % #039;000 #039;000 #039;000 Revenue excl interest 100,570 88,969 11,601 13% Expenses (excl R&D, interest, Depn & Amortisation) 67,460 57,538 9,922 17% EBITDAR 33,110 31,431 1,679 5% R&D Expenditure 21,756 19,
Slide 24: Licence Fees
7/20/2016 Licence Fees For personal use only Licence Fees 25 In Line, $18.5M 20 Compound Growth 5% 15 #039;m 10 5 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Licence fees line ball prior year, as was expected • At the end of the 2015 year we identified that the sales pipeline was weighted stron
Slide 25: Annual Support Fees; Cloud Service Fees
7/20/2016 Annual Support Fees For personal use only Annual Support Fees UP 15%, 50 $43.7M 45 40 Compound Growth 17% 35 30 25 #039;m 20 15 10 5 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Annual Licence fees continue to grow strongly: up 15% • Compound growth over the last 10 years is 17% • Cust
Slide 26: New Cloud Customers For 2016; Consulting Revenue
7/20/2016 New Cloud Customers For 2016 (21) For personal use only Australian Communications Media Authority Legal Practice Board Western Australia Brisbane South Primary Health Network Ltd New Zealand Racing Board CatholicCare Diocese of Broken Bay Ongo Partnership Ltd CBHS Health Fund Limited QLD R
Slide 27: Profit By Segment Analysis
7/20/2016 Profit By Segment Analysis For personal use only 8.0 $3.8m, Down 43% ($2.9m) 7.0 Headcount 124, Up 10% 6.0 5.0 $4m, Up 5% ($204k) $3.1m, Down 6% ($199k) Headcount 376, Up 20% FY14 4.0 Headcount 259, Down 4% FY15 3.0 #039;m ($1.3m), Down 18% ($202k) Headcount 184, Up 12% 2.0 $694k, Up 100%+ ($
Slide 28: TechnologyOne Corporate Overview
7/20/2016 Agenda For personal use only 2016 Half Year Results Recap Outlook for Full Year Long Term Outlook Appendix Half Year Company Update 2016 Half Year Results in Detail TechnologyOne Overview TechnologyOne Corporate Overview 28
Slide 29: Australia's largest enterprise software company
7/20/2016 Australia’s largest enterprise software company Continually profitable $41m+ For personal use only Invest For over 28 years Back into R&D $47m Profit Formed in 1987 Largest $219m R&D centre Revenue 1000+ in Australia employees 300+ $76m developers Cash 1000+ $1.1b Market Capitalisation Cor
Slide 30: Financially Very Strong; Historical Performance
7/20/2016 Financially Very Strong For personal use only • Cash and Equivalents $75.5m • Return on Equity 30+% • Adjusted Return on Equity1 63% • Debt/Equity 2% • Interest Cover 309 • Continually paid dividends since 1996 (20 years) • Continually profitable since 1992 (24 years) As at 30th Sept 2015
Slide 31: The Competitive Landscape
7/20/2016 For personal use only Technology One .. Additional Information Enterprise software as a service The Competitive Landscape New expanding market coverage ORACLE SAP $1,000m Current market coverage TechnologyOne Microsoft Business Solutions $100m SAP/Business One NetSuite Infor (Sun Systems)
Slide 32: What makes us unique: Our enterprise vision
7/20/2016 For personal use only What makes us unique What makes us unique… Our enterprise vision We are one of only a few global enterprise vendors • Suite of 14 products • Deeply integrated • Best of Breed functionality • Common platform • Consistent user interface The power of a single, integrated
Slide 33: What makes us unique: The power of one
7/20/2016 For personal use only What makes us unique What makes us unique… The power of one We do not use implementation partners or resellers We take complete responsibility for building, marketing, selling, implementing, supporting and running our enterprise solution for each customer to guarantee
Slide 34: We focus on eight key markets
7/20/2016 What makes us unique… For personal use only We focus on eight key markets… • Deep understanding and engagement in our markets • Deeply integrated preconfigured solutions • Proven practice • Streamlined implementations • Reduce time, cost and risk We sell to asset and service intensive orga
Slide 35: The power of evolution
7/20/2016 For personal use only What makes us unique What makes us unique… The power of evolution Substantial investment into R&D each year • New releases encompass new technologies, concepts and innovations • Configuration and not customisation Green screen Client server Web based Cloud computing &
Slide 36: TechnologyOne Cloud
7/20/2016 TechnologyOne Cloud For personal use only Enterprise software as a service • We run our own enterprise software through the cloud • We take responsibility to provide a simple, cost effective and highly elastic model of computing • Unique mass production model delivers economies of scale an
Slide 37: Economy of scale: SaaS Mass Production
7/20/2016 Economy of scale TechnologyOne SaaS Mass Production - Massively scalable, Highly efficient , Cost effective Highly resilient & fault tolerant Elastic - add capacity dynamically For personal use only Significant cost savings Future proof - We invest millions annually to make our pro
Slide 38: Ci Anywhere
7/20/2016 Ci Anywhere For personal use only Enterprise software, incredibly simple • Embraces smart mobile devices including iPad, iPhone and Android • Allows users to flow across any and all devices during the course of their day • Consumer concepts deliver powerful enterprise software that is incr
Slide 39: Other Facts: Robust Revenue Model
7/20/2016 Other Facts For personal use only Diversity of revenue streams from multiple: • Products 14 • Vertical markets 8 • Geographies 12 - All states of Australia, New Zealand, South Pacific, Asia and UK Strong, very loyal blue chip customer base • We provide a mission critical solution – ‘sticky
Slide 40: Robust Revenue Model; Historical Performance
7/20/2016 Robust Revenue Model For personal use only Initial Buy Based on: No of Users, Initial Licence Implementation Service Annual Licence Annual Licence Annual Licence …. Products & Modules Buy Addn Users Initial Licence Annual Licence Annual Licence Annual Licence …. Additional Fee Buy Addn Mod
Slide 41: Our Vision
7/20/2016 Our Vision Clear and focused vision… Transforming business, For personal use only making life simple 41