Xero Limited · ASX:XRO
Xero — Shareholder Meeting (August 2023)
22 slides from Xero's shareholder meeting presentation, Aug 17, 2023
Slide 1: Annual Meeting
Xero Limited Annual Meeting 17 AUGUST 2023
Slide 2: 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 3: Board of Directors
Board of Directors 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 Remuneration Committee A
Slide 4: Agenda
Agenda 1. 2. 3. 4. David Thodey Sukhinder Singh Cassidy CHAIR CHIEF EXECUTIVE OFFICER Chair’s CEO Resolutions Q&A address update 4
Slide 5: Using the online platform
Using the online platform Voting Questions Get a Voting Card Ask a Question ? 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 from outside Australia 5
Slide 6: Agenda
Agenda 1. 2. 3. 4. David Thodey Sukhinder Singh Cassidy CHAIR CHIEF EXECUTIVE OFFICER Chair’s CEO Resolutions Q&A address update 6
Slide 7: Agenda
Agenda 1. 2. 3. 4. David Thodey Sukhinder Singh Cassidy CHAIR CHIEF EXECUTIVE OFFICER Chair’s CEO Resolutions Q&A address update 7
Slide 8: 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 + 28% YOY (25% in + $93.0m YOY + $100.2m YOY constant currency) +28% YOY $1.40b 1.5b
Slide 9: Growing with efficiency: Improved operating leverage drives increase in operating income margin
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 10: Areas to touch on
Observations from CEO Areas to touch on 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 valuation multiples al
Slide 11: We will be more disciplined and customer focused in the way we manage resources
Observations from CEO We will be more disciplined and customer focused in the way we manage resources and capital to grow 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 look to “Rule of and a
Slide 12: 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 Along with reinvestment in strategic priorities management is targeting an operating expense to operating revenu
Slide 13: 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 PRODUCT DESIGN 35.0% Expected ratio trend vs FY23: Down & DEVELOPMENT of revenue GENERAL & 12.0% Expected ratio trend vs FY23: Dow
Slide 14: Agenda
Agenda 1. 2. 3. 4. David Thodey Sukhinder Singh Cassidy CHAIR CHIEF EXECUTIVE OFFICER Chair’s CEO Resolutions Q&A address update 14
Slide 15: 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 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 intends to vote in favou
Slide 16: 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 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 held by the Chair of t
Slide 17: Election of Anjali Joshi
RESOLUTION 3 For Election of 108,943,986 Anjali Joshi 99.54% That Anjali Joshi, retiring from o ce as 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 by the Chair of the M
Slide 18: 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 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 the Meeting who inten
Slide 19: Increase the non-executive directors' fee cap
RESOLUTION 5 For Increase the 99,198,860 non-executive 99.72% directors’ fee cap 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$600,000, from NZ$2,700,000
Slide 20: Agenda
Agenda 1. 2. 3. 4. David Thodey Sukhinder Singh Cassidy CHAIR CHIEF EXECUTIVE OFFICER Chair’s CEO Resolutions Q&A address update 20
Slide 21: 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 22: Beautiful business
Beautiful business xero.com/investors