Straker Ltd · ASX:STG
Straker — Straker Translations — FY2020 Earnings Presentation
29 slides from Straker's earnings presentation, May 29, 2020
Slide 1: FY20 Full Year Results Presentation
Straker Translations Limited Level 2, Building 3 61 Constellation Drive Rosedale 0632 NEW ZEALAND ARBN: 628 707 399 Ph: +64 9 801 0648 www.strakertranslations.com investors@strakertranslations.com ASX ANNOUNCEMENT – For Immediate Release 29 May 2020 FY20 Full Year Results Presentation Please find at
Slide 2: FY20 Full Year Results
Contact FY20 Full Year Results 29th May 2020 1
Slide 3: Building the future of global communication using machines and humans together
Building the future of global communication using machines and humans together 2
Slide 4: Business Update
BUSINESS UPDATE ______________ Grant Straker Chief Executive Officer 3
Slide 5: On track for ~$40m run rate prior to COVID-19
On track for ~$40m* run rate prior to COVID-19 Pre COVID-19 Post COVID-19 40 Difference related to: • pausing an acquisition 30 • softening of core revenue in March 20 10 0 Q1 Q2 Q3 Q4 4
Slide 6: Successfully acquiring and integrating strategic acquisitions
Successfully acquiring and integrating strategic acquisitions Expand reach into industrial base in APAC Expands reach into Paused Industrial customer Wellington base in Europe Acquisition #8: DD was completed with an aim of 31 March close. Vitoria Europe 5
Slide 7: Media
MEDIA Combined theatrical and home $97bn entertainment markets worldwide was nearly USD 97bn in 2018. Grew Straker Launched our RAY Media Revenue by Media Platform 1.0 55% Worked on a number of the Driven by new relationships with world’s leading box office hits in production houses and expanded 2019
Slide 8: FY20 Financial Performance
FY20 Financial Performance 7
Slide 9: Strong Financial Position
Strong Financial Position 55.2% $27.7m Translation Group Revenue Gross Margins ($0.58m) 55% Media Revenue Pro-forma Growth adjusted EBITDA 86% $11.2m Repeat Revenue Cash at bank 8
Slide 10: FY20 Revenue Up 13% to $27.7M
FY20 REVENUE UP 13% TO $27.7M Continued growth in revenue despite short term slowing as business has strategically shifted towards Enterprise Customers 13% 26 44% 18% growth in EMEA from enterprise tech-enabled translations & 24.6 27.7 acquired revenue 20 13 APAC growth of 10% on the back of acquire
Slide 11: Growth Investment Continues in FY20
GROWTH INVESTMENT NZ$m unless otherwise stated FY20 FY19 v FY19 CONTINUES IN FY20 Revenue 27.74 24.59 12.8% Gross Margin 15.20 13.43 13.2% Platform leverage starting to flow G ros s Margin % 54.8% 54.6% 0.2% Operating Costs (15.81) (13.67) 15.7% Gross margin $ up 13.2% to $15.2m Other Income / Costs
Slide 12: Reported PBT Improved 22%
REPORTED PBT NZ$m unless otherwise stated FY20 FY19 v FY19 IMPROVED 22% Adjus ted EBITDA (0.58) (0.16) -265.3% Acquisition costs (0.77) (0.59) Restructuring costs to align business for future growth Non-operating (0.53) (0.17) EBITDA (1.89) (0.93) -104.0% $0.5m restructuring costs which will result
Slide 13: Stable Cashflows & Strong Capital Position
STABLE CASHFLOWS & NZ$m unless otherwise stated FY20 FY19 v FY19 STRONG CAPITAL POSITION Adjus ted EBITDA (0.58) (0.16) -265.3% Non-operating expenses (0.53) (0.17) Changes in w orking capital (0.49) (0.73) $11.2m cash and no debt at 31 March 2020 Operating cas h flow (1.60) (1.07) -50.4% Payments f
Slide 14: COVID-19 Update
COVID-19 Update straker
Slide 15: COVID-19 Response
COVID-19 RESPONSE Re activated online revenue streams Executive reduced remuneration by which provide good cash average 18% for 3Q1 97% of Staff and Board reduced $500k government COVID-19 stimulus remuneration by 10% Executing plan to remove Quickly moved to remote working $3-3.5m of operating cost
Slide 16: Executing on Strategic Priorities
Executing on Strategic Priorities Remain focused on becoming a $100m revenue company Drive organic Become the most Aim to be a top 10 Media and acquisitive productive translation Localization company company in the world enterprise growth 15
Slide 17: Growth in business customers using the RAY platform
23% Growth in the Jobs running on the Ray AI number of business Platform run at 56% margin customers using the and have grown by 25% RAY platform 25 25% 2,700 $25m 2,400 18.75 $20m 2,100 12.5 1,800 6.25 1,500 FY19 FY20 0 FY19 FY19 FY20 FY20 Category Axis 16
Slide 18: Exponential growth in data assets to drive A.I
Exponential Released RAY Workbench growth in data 4.0 leading the industry assets to drive A.I with adaptive A.I allowing unique productivity platform based pricing 200 150 Billions 100 50 0 11 12 13 14 15 16 17 18 19 20 20 20 20 20 20 20 20 20 20 20 17
Slide 19: Driving to be a top 10 Media Localization company
Driving to be a top 10 Media Localization company We want to be a leading provider of media localisation globally. To do this we need to use innovation and not just scale. Platform for huge volume turnaround in short timeframes Example of our media workbench use for movie feature We have partnered w
Slide 20: Organic Growth
Organic Growth Aggressively approaching new marketing opportunities Enterprise focus gaining traction and significant opportunities in the pipeline COVID-19 driving change in purchasing decisions positive for Straker Conferences and customer interactions going virtual Online marketing campaigns focus
Slide 21: First 6 Weeks Trading in FY21
FIRST 6 WEEKS TRADING IN FY21 5 We have maintained flat pro-forma sales orders through the worst of the COVID-19 crisis. 0% We saw a drop in some core customer sales orders 3.75 4.2 4.2 as they went into lockdown We have offset the sales orders drop with our ability to be agile through the crisis an
Slide 22: M&A: Still a large number of potential opportunities
M&A 210 Advanced stage Still a large number of potential Current acquisition opportunities opportunities around 140 $200m in total Possible new targets come to revenue spread Mid stage market across 30 opportunities Ability to increase earn out and use 70 less cash up front Our ability to integrate
Slide 23: Summary
SUMMARY Strong gross margins due to Committed to M&A and see technology advantage opportunities post COVID-19 Revenue has been steady through Have carried out restructuring activity to COVID-19 with new opportunities lower cost base moving forward Strong financial position to get Repeat revenue cust
Slide 24: www.strakertranslations.com grant@strakertranslations.com ronn.bechler@marketeye.com.au
www.strakertranslations.com grant@strakertranslations.com ronn.bechler@marketeye.com.au 23
Slide 25: Appendix
Appendix 24
Slide 26: Strong Balance Sheet
NZ$m unless otherwise stated FY20 FY19 Strong Balance Sheet Cash & cash equivalents 11.2 17.7 Trade receivables 5.8 3.9 Other current assets 1.5 1.4 Days Sales Outstanding (DSO) expand to 79 Total Current Assets 18.6 22.9 days on the back of enterprise customer expansion in Q4, prior to COVID-19 com
Slide 27: Productivity
Productivity Strong Gross Margins due to Increasing R&D investment into growth technology advantage activities & competitive advantage 54.8 55% 54.6 54.6 2.6 2.5m 54% 1.95 1.82m 52% 1.45m 1.3 1.22m 51% 0.65 50% FY18 FY19 FY20 0 FY17 FY18 FY19 FY20 Drop from FY17 to 18 due to blended margin from acqu
Slide 28: Case Studies
CASE STUDIES EXAMPLES OF GAINS THROUGH DATA +18% +17% Global Industrial Customer Publishing Company Annual Spend: $1.2 - $1.7m Annual Spend: $1m Margins outside of RAY platform: 42% Margins on acquiring customer: 32% Margins on the RAY platform: 59% Margins in FY20: 50% Reason for gain: putting jobs
Slide 29: Disclosure Statement
DISCLOSURE STATEMENT This presentation is given on behalf of Straker Translations Limited ASX:STG (Company number NZ: 1008867 / AU: ARBN 628 707 399) Information in this presentation: All information in this presentation is current at 29 May 2020, unless otherwise stated. • Is for general informatio