Technology One Limited · ASX:TNE
Technology One — H1 2004 Earnings Presentation
40 slides from Technology One's earnings presentation, January 2004
Slide 1: Half Year Results December 2003
www.TechnologyOneCorp.Com Half Year Results December 2003 By Technology One Intelligent Business Solutions Adrian_DiMarco@TechnologyOneCorp.com January 2004 Executive Chairman Private and Confidential
Slide 2: Agenda
AGENDA 2004 Half Year Results Significant Achievements Last Six Months Outlook Long Term Growth Prospects 2
Slide 3: 2004 Half Year Results
2004 Half Year Results 2004 Half Year Results Revenue up slightly to $24.1m: up 1% Expenses excluding R&D down: 6% Re-aligned costs & improved efficiencies Company continued to invest in its future R&D spend maintained at 20% R&D fully expensed as incurred Profit Before Tax up: 16% P
Slide 4: 2004 Half Year Results: Regional Trading
2004 Half Year Results Trading results were inconsistent Strong in the bigger regions: Qld, NSW, Vic & NZ Weaker in the smaller regions: SA & WA Clear indication of a turnaround still not apparent First half results last year were abnormally strong due to a significant deal closing earlier
Slide 5: 2004 Half Year Results: Return on Equity and Balance Sheet
2004 Half Year Results Return on Equity (adjusted) improved to 37% (vs 14% last year) Operating Cashflow of $4.26 million (vs $3.82m NPAT) Balance sheet strong Cash on hand*: $18 million Debt/Equity: 3% Transparency of results – all R&D fully expensed *Cash includes short term investment
Slide 6: Dividend per Share
2004 Half Year Results Dividend increased for first half to 1.25 cs (up 25%) Board to decide if full year dividend to increase above 2.5cs expected by the market Dividend (cps) 1.40 1.20 Cents per Share 1.00 0.80 0.60 0.40 0.20 0.00 2001 2002 2003 2004 Year 6
Slide 7: H1 2003 v H1 2004 - Operating
H1 2003 H1 2004 Variance Increase H1 2003 v H1 2004 - Operating $ (000) $ (000) $ (000) % Revenue (PRE 3rd party costs) (excl interest) 23,958 24,125 167 1% Expenses (excl R&D, Depn, Forex & Amort) 14,376 13,367 (1,009) (7%) EBITDAR 9,582 10,758 1,176 12% R&D 4,645 4,862 217 5% EBITDA 4,937 5,896 95
Slide 8: Significant Achievements Last Six Months
Significant Achievements Last Six Months Signed 35 new contracts in the half (vs 25 last half) Finance One continued to perform strongly Involved in majority of deals Strategic deals signed: – Institute of Chartered Accountants Australia – Australian Broadcasting Authority – Westralia Airpor
Slide 9: Significant Achievements: People One and Retail One
Significant Achievements Last Six Months People One Four new contracts signed: – Port Kembla Coal Terminal – Aust Track Rail Corp – Urban Maintenance Systems – Capital First Holdings Retail One No new deals in the first half Good opportunities in the second half 9
Slide 10: Significant Achievements: Proclaim One
Significant Achievements Last Six Months Proclaim One Three new contracts won: – Hastings District Council (NZ) – Ku-ring-gai Municipal Council (NSW) – Hutt City Council (NZ) Leading supplier in Local Government in Australia Five councils now in NZ Good opportunities going forward in NZ
Slide 11: Significant Achievements: Student One
Significant Achievements Last Six Months Student One – no new business this half No new deals in the first half Stronger result in the first half than expected Limited opportunities in the short-term 11
Slide 12: Significant Achievements: New Zealand
Significant Achievements Last Six Months Continued penetration in New Zealand Five new contracts won: – Jacques Martin – Tertiary Education Commission – Hastings District Council – Hutt City Council – Aviation Security Service Good opportunities going forward 12
Slide 13: Significant Achievements: Malaysia
Significant Achievements Last Six Months Continued penetration in Malaysia Three new contracts won – WCT Construction – Align Distribution – KUB Telekomunikasi Costs reduced dramatically by employing locals 13
Slide 14: Significant Achievements: Project Services
Significant Achievements Last Six Months Project Services slow down Three new contracts won: – Siemens Thiess Joint Communications Venture – ACT Revenue – Aust National Training Authority Second half looks challenging Business Development Manager to be appointed in NSW to grow the business 1
Slide 15: Biz One initiative for the SME market
Significant Achievements Last Six Months Biz One initiative to increase our penetration in the SME market Why Biz One? Finance One is seen as too big Pricing and implementation too expensive for SMEs Appropriate Pricing Model & Basis for Calculation Successful trials now run as follows:
Slide 16: Biz One market positioning
Biz One Sap E OR E AT Peoplesoft $1,000m RP RG Oracle CO LA FINANCE ONE $300m T Epicor Navision Great Plains M MID KE $30m AR Sunsystems Biz One $10m SI A L L SS NE B U SM Accpac CLIENT TURNOVER Myob 16
Slide 17: Biz One key messages
Significant Achievements Last Six Months Biz One Key messages Rich functionality but priced for SMEs Pre-configured and quick implementation times Integration – Payroll through to financials One company develops, markets, sells, implements & support Upgrade path to Finance One provided a
Slide 18: R&D into next generation products
Significant Achievements Last Six Months R&D into our next generation products (Connected Intelligence series) on track Finance One CI on track for release July 2004 18
Slide 19: New Product Marketing group formed
Significant Achievements Last Six Months New Product Marketing group formed Deeper understanding of our competitors strengths and weaknesses Focus our R&D on maximizing our strengths and overcoming our weaknesses Ensure we are maximizing our product positioning against our competitors 19
Slide 20: Organisational Restructure now complete
Significant Achievements Last Six Months Organisational Restructure now complete - “Act Locally, Think Globally” Working exceptionally well More changes planned Quarterly results focus - KPI system now implemented to support this 20
Slide 21: Outlook: R&D program
Outlook Aggressive R&D program to continue for the short term 20% of revenue New major areas of R&D in the next 12 months: Multi-currency for international markets Works Order/Asset Management Apparel/Fashion handling New Procurement system Improved B2B support HR functionality for
Slide 22: Outlook: Expected profit growth
Outlook Good start to the financial year Expected Profit Growth for 2003/2004 financial year will be at the higher end of our range: 5% to 10% growth Expect further improvements in the 2004/2005 financial year. This is dependent on: Improving market conditions Take-up of our new Finance
Slide 23: Growth Strategy
Growth Strategy Capitalise on market pickup and consolidation CI products Increase traction for newer products Target the SME space – Biz One initiative Sharper focus on State and Federal Government New verticals through partnerships Sales growth from overseas expansion Protect our e
Slide 24: Growth Strategy - Capitalise on Market Pickup and Consolidation
Growth Strategy - Capitalise of Market Pickup and Consolidation Market conditions should improve in late 2004 Consolidation to continue We need to capitalise on this through our Product Marketing and advertising 24
Slide 25: Growth Strategy
Growth Strategy Capitalise on market pickup and consolidation CI products Increase traction for newer products Target the SME space – Biz One initiative Sharper focus on State and Federal Government New verticals through partnerships Sales growth from overseas expansion Protect our e
Slide 26: Growth Strategy – CI Products
Growth Strategy – CI Products CI products give us a clear product leadership position We need to get sales momentum for our new CI products Finance One CI branding introduced Marketing launch program under development Product Marketing updating our Finance One presentation approach for CI
Slide 27: Growth Strategy
Growth Strategy Capitalise on market pickup and consolidation CI products Increase traction for newer products Target the SME space – Biz One initiative Sharper focus on State and Federal Government New verticals through partnerships Sales growth from overseas expansion Protect our e
Slide 28: Growth Strategy – Increase Traction
Growth Strategy – Increase Traction People One HR functionality to make it ‘best of breed’ in the next 12 months Specialist Payroll/HR salesperson added People One CI to be delivered in next 12 months Retail One Fashion and apparel functionality to be added in next 12 months Specialist
Slide 29: Growth Strategy – Increased Traction: Student One
Growth Strategy – Increased Traction Student One Limited opportunities in Australia Long term looks good as our competitors will struggle R&D team size limited and focus on profitability New Zealand opportunities being investigated MA & UK are possibilities at some point in the future 29
Slide 30: Growth Strategy
Growth Strategy Capitalise on market pickup and consolidation CI products Increase traction for newer products Target the SME space – Biz One initiative Sharper focus on State and Federal Government New verticals through partnerships Sales growth from overseas expansion Protect our e
Slide 31: Growth Strategy - Biz One
Growth Strategy - Biz One Biz One positioning needs to be finalised soon: Sold to companies in the $10m to $30m turn-over Appropriate Pricing Model and Basis for Calculation Further trials required to ensure this makes sense Launch program to be developed 31
Slide 32: Growth Strategy
Growth Strategy Capitalise on market pickup and consolidation CI products Increase traction for newer products Target the SME space – Biz One initiative Sharper focus on State and Federal Government New verticals through partnerships Sales growth from overseas expansion Protect our e
Slide 33: Growth Strategy – Sharper Focus on Government
Growth Strategy – Sharper Focus on Government State and Federal Government becoming a more complex and strategic sale as they adopt one of the following approaches: Whole of Government Clusters Shared Services Strategic approach to Government needed: GRA has been appointed as a lobbyist
Slide 34: Growth Strategy
Growth Strategy Capitalise on market pickup and consolidation CI products Increase traction for newer products Target the SME space – Biz One initiative Sharper focus on State and Federal Government New verticals through partnerships Sales growth from overseas expansion Protect our e
Slide 35: Growth Strategy – New Verticals Through Partnerships
Growth Strategy – New Verticals Through Partnerships New partnerships under investigation Professional Services market Remote Data Capture (for Councils and Retail) 35
Slide 36: Growth Strategy
Growth Strategy Capitalise on market pickup and consolidation CI products Increase traction for newer products Target the SME space – Biz One initiative Sharper focus on State and Federal Government New verticals through partnerships Sales growth from overseas expansion Protect our e
Slide 37: Growth Strategy – Overseas Expansion
Growth Strategy – Overseas Expansion Potential new markets under investigation: South Africa UK China 37
Slide 38: Growth Strategy
Growth Strategy Capitalise on market pickup and consolidation CI products Increase traction for newer products Target the SME space – Biz One initiative Sharper focus on State and Federal Government New verticals through partnerships Sales growth from overseas expansion Protect our e
Slide 39: Growth Strategy – Protect Our Existing Customer Base
Growth Strategy – Protect Our Existing Customer Base Our customer base revenues underpin our business Key to customer retention is as follows: Customer support Software quality Account management Continued R&D CI products 39
Slide 40: Half Year Results December 2003
www.TechnologyOneCorp.Com Half Year Results December 2003 By Technology One Intelligent Business Solutions Adrian_DiMarco@TechnologyOneCorp.com January 2004 Executive Chairman Private and Confidential