Bailador Technology Investments Ltd · ASX:BTI
Bailador Technology Investments — Investor Presentation (March 2017)
49 slides from Bailador Technology Investments's investor presentation, Mar 13, 2017
Slide 1: Investing in a Portfolio of Late Stage, High Growth Technology Companies
For personal use only RESULTS Investing in a Portfolio of Late Stage, High Growth For the periodTechnology Companies ending 30 June 2016 March 2017 Bailador Technology Investments Limited (ASX:BTI) Bailador Technology Investments Limited (ASX:BTI) Approved for release 19 August 2016
Slide 2: Unique exposure to private expansion-stage technology companies
For personal use only Bailador provides investors with unique exposure to a portfolio of private expansion-stage information technology companies with global addressable markets and extensive downside protection. 2
Slide 3: Agenda
For personal use only Investment Portfolio & Summary Approach Valuation Appendix I: Straker Translations Profile Appendix II: Half Yearly Results Recap
Slide 4: Investment Approach
For personal use only Approach Investment
Slide 5: A team of specialist technology investors
A team of specialist technology investors For personal use only David Kirk Paul Wilson Andrea Kowalski James Johnstone Michael Hayes Georgina Brown Co-Founder & Co-Founder & Investment Investment Investment Investment Managing Partner Managing Partner Director Director Manager Manager • Former CEO o
Slide 6: BTI's core investment approach
BTI’s core investment approach For personal use only Leverage specialist Invest in companies with technology expertise; a proven business model, engage with companies global addressable and management through market, and $5-20m of extensive due diligence revenue Put in place capital Go on the board;
Slide 7: What does 'Expansion Stage' mean?
What does ‘Expansion Stage’ mean? For personal use only Technology is de-risked compared to early- stage companies Proven revenue generation capability (typically with $5-20m of revenue in the twelve months prior to BTI’s initial investment Proven management capability – 2 to 6 years of operation an
Slide 8: BTI's investment criteria
BTI’s investment criteria Bailador’s access to high quality deal flow enables it to focus on investments that meet For personal use only key investment criteria Highly profitable Proven unit economics Technology ü Huge Global × No start-ups Addressable Markets Globally × No biotechnology Proven comp
Slide 9: Capital Structure Protections & Upside
Capital Structure Protections & Upside Principal invested is protected so long as the whole business is sold for > BTI cost, with For personal use only conversion rights enabling full upside participation ‘Downside’ Example ‘Upside’ Example $50m Bailador Investment (Convertible Preference Shares) $2
Slide 10: Portfolio & Valuation
For personal use only Valuation Portfolio &
Slide 11: The BTI portfolio companies are substantial businesses
The BTI portfolio companies are substantial businesses The combined revenue of the BTI portfolio companies is over $125m For personal use only Portfolio revenue growth in CY16 was 37% 11
Slide 12: BTI Net Asset Value has increased consistently since IPO
BTI Net Asset Value (NAV) has increased consistently since IPO For personal use only BTI NAV since IPO ($ million) 160 140 120 100 80 60 40 20 0 Nov-14 Nov-15 Nov-16 Mar-15 Mar-16 Sep-15 Sep-16 Jul-15 Jul-16 Jan-15 Jan-16 May-15 May-16 Cash Portfolio Investments 12 1. After all fees.
Slide 13: Immediate exposure to a conservatively valued high growth portfolio
BTI provides immediate exposure to a conservatively valued high growth portfolio For personal use only Value Uplift Business Description Current Valuation Commentary Capital 28 Feb 2017 Structure ($m) %* Preference World leader in hotel channel management and distribution solutions for online Revalu
Slide 14: Material valuation lift and cash realisation expected in next 24 months
Material valuation lift and cash realisation expected in the next 24 months For personal use only 28 Feb 2017 Current Value Potential Value Range Commentary ($m) 24 months 40.5 $70m - $110m IPO ready in CY17, but no plans to go at this stage. Several natural trade buyers are following the company. S
Slide 15: Summary
For personal use only Summary
Slide 16: A unique investment opportunity
A unique investment opportunity BTI is the only information technology focused principal investment company listed on For personal use only the ASX Access to the high growth • • Technology is reshaping almost every industry Creating high growth companies with global growth potential technology secto
Slide 17: Appendix I: Straker Translations Profile
For personal use only Appendix I Straker Translations Profile
Slide 18: For personal use only
For personal use only INVESTOR PRESENTATION March 2017
Slide 19: Straker Translations is a technology leader in the US$40 billion translations industry
STRAKER TRANSLATIONS IS A TECHNOLOGY LEADER IN THE US$40 BILLION1 GLOBAL TRANSLATIONS INDUSTRY For personal use only Straker Utilises Proprietary Machine Learning and Global Crowd Sourcing To Create a More Effective Translation Supply Chain (1) Source: Common Sense Advisory, The Language Services Ma
Slide 20: Hybrid Machine/Crowd Sourced Translation Model Has Begun to Dominate
The Hybrid Machine/Crowd Sourced Translation Model has Begun to Dominate the Industry For personal use only POOR INEFFICIENT WINNER QUALITY Historical Manual Hybrid Model Pure Machine Translation • Limited by in-house language • First draft by machine • Good for ‘getting the gist’ pair capability •
Slide 21: Straker has the most efficient and proven hybrid translation model
Straker has the most efficient and proven hybrid 40,000 For personal use only translation model registered Proven translators in the world Platform Centralised Cloud Based Translators paid Translators Platform by the hour, but constantly rated charged by per using big data word rate assets Highly Sc
Slide 22: Straker Has A Strong Competitive Advantage
Straker Has A Strong Competitive Advantage For personal use only SPEED HARD TO REPLICATE Straker’s platform makes the quotation and translation Straker’s platform is the result of seven years of process faster than its competitors, in a market where iterative development and customer feedback, speed
Slide 23: Straker is Well Positioned For Success
Straker is Well Positioned For Success For personal use only STRAKER AVERAGE 50-55% INDUSTRY AVERAGE 40-45% ORGANIC GROWTH AND NATURAL ACQUISITION INDUSTRY HIGH TARGETS GROSS MARGINS Highly fragmented industry Top 100 operators contribute less than + 13% global revenue1 GLOBALLY SCALABLE WINNING MAR
Slide 24: A Large Global Market
A Large Global Market For personal use only Annual revenue from the global translation Global spread of activity means no industry currently exceeds US$40 billion1 dependence on any particular region The industry continued growing during the Oceania GFC as customers looked to new, foreign 2% Asia la
Slide 25: Industry Growth Forecast To Continue
Industry Growth Forecast To Continue For personal use only CONTENT CREATION The recent proliferation in publishing platforms and the increased importance of content driven marketing has resulted in content volumes DEMOGRAPHIC SHIFT growing rapidly The growth of the middle class in emerging markets h
Slide 26: Case Studies of Growing Use of Translation
Case Studies of Growing Use of Translation For personal use only eCommerce Manufacturing Technology The Hut Group are the UK’s Mitutoyo are a large German largest eCommerce provider. They Manufacturer, with $800k have over $1m in contracted contracted translation revenue translation revenue with Str
Slide 27: The Advance of Machine Translation Benefits Straker
The Advance of Machine Translation Benefits Straker For personal use only Better quality machine “Machines will not replace humans for translation translation in the next 50 years - we cannot train them to understand context as they don’t know what context is” - Kyunghyun Cho - world leading expert
Slide 28: Straker has World Leading Quality Control
Straker has World Leading Quality Control For personal use only Refunds represent Global Certification only 0.3% of revenue, validating Straker has the highest global certification possible for Straker’s quality translation services - ISO 9001 and EN-15038 approach Centralised Control The RAY transl
Slide 29: A World Leading Platform that is Virtually Impossible to Replicate
A World Leading Platform that is Virtually Impossible to Replicate For personal use only TRANSLATION PROJECT MANAGEMENT PLATFORM TRANSLATOR MANAGEMENT CUSTOMER DASHBOARD PLATFORM MACHINE TRANSLATION ENGINE HUMAN TRANSLATION WORKBENCH TRANSLATION DATA ANALYTICS ENGINE AUTOMATION AND API The world lea
Slide 30: A Highly Valuable Data Asset
A Highly Valuable Data Asset For personal use only Straker Translation Memory Database DATABASE ROWS Translation memory is used to train 90,000,000 machine engines 67,500,000 When combined with human data points, accurate data memories create an 1 BILLION enormous proprietary asset WORDS 45,000,000
Slide 31: The Nature of Straker's Model makes it Economically Scalable
The Nature of Straker’s Model makes it Economically Scalable For personal use only 10,000 CUSTOMERS > 40,000 REGISTERED TRANSLATORS BROAD RANGE OF TRANSLATOR STRAKER PROVIDES INDUSTRIES ADVANTAGE • Legal • Machine Learning • 80 Source Languages • Huge Corpus • 100 Target Languages • Media • Efficien
Slide 32: Straker Able to Address a Global Market with Minimal Offshore Employees
Straker is Able to Address a Global Market with Minimal Offshore Employees For personal use only A GLOBAL CUSTOMER BASE REDUCES SALES CYCLE RISK AND IS A STRONG PLATFORM FOR GROWTH UK/Europe 33% Canada 2% USA 45% Asia 4% Australia 8% NZ 8% Three global production centres in Data is based on last 12
Slide 33: An Impressive, Fast Growing Customer Base
An Impressive, Fast Growing Customer Base For personal use only Revenue from repeat customers has been steadily increasing 58% 60% 58% 52% 47% 34% 1HY14 2HY14 1HY15 2HY15 1HY16 2HY16 New Revenue (%) Repeat Revenue (%) 16
Slide 34: Straker has Multiple Growth Drivers
Straker has Multiple Growth Drivers For personal use only ACQUISITION GROWTH MARKET SHARE GROWTH Organic growth 15-25% P.A MARKET GROWTH EXISTING REVENUE 17
Slide 35: Traditional LSPs Present an Immediate Opportunity to Add Value
Traditional LSPs Present an Immediate Opportunity to Add Value For personal use only STRAKER ACQUISITION STRATEGY 1. Acquisition target identified FRAGMENTED INDUSTRY WITH MANY • Small, low margin, private business ATTRACTIVE TARGETS • Owners have typically not invested in technology to the extent r
Slide 36: Acquisition is a Powerful Driver of Value for Straker
Acquisition is a Powerful Driver of Value for Straker There are three stages to the process of value creation as small legacy translation service providers are acquired For personal use only EXAMPLE ACQUISITION SCENARIO STAGE THREE: MULTIPLE STAGE ONE: UPLIFT IN GP STAGE TWO: CORPORATE EXPANSION UPO
Slide 37: Comparable Companies Highly Valued by the Market
Comparable Companies Demonstrating Characteristics of Straker are Highly Valued by the Market For personal use only ASX:APX ASX:FLN ASX:WTC AIM:KWS localisation services for the language, search and social freelancing and crowd global video gaming industry global logistics software technology servic
Slide 38: Appendix
For personal use only APPENDIX
Slide 39: Straker Snapshot
STRAKER SNAPSHOT BUSINESS OVERVIEW COMPETITIVE ADVANTAGE For personal use only • Straker Translations Limited is headquartered in Auckland, New • Control of the value chain – Straker owns its technology platform, Zealand and is a leading global provider of cloud-enabled translation controls the cust
Slide 40: Company History
COMPANY HISTORY From its origins in 1999 as a web technology services company, Straker has evolved and grown to become a leading global provider of cloud-enabled translation services. For personal use only Started to offer translation services 30 48 100 directly to customers via crowdsourcing $1m $1
Slide 41: Board of Directors
BOARD OF DIRECTORS For personal use only Grant Straker Phil Norman Paul Wilson Tim Williams James Johnstone Steve Donovan Founder CEO / Managing Director Chairman Director Director Director Director As one of the founders of Phil was the founding Paul has had extensive Tim founded ValueCommerce Jame
Slide 42: Executive Management
EXECUTIVE MANAGEMENT For personal use only David Sowerby Kim Andrews Haydn Marks Indy Nagpal Meryn Straker Chief Revenue Officer Chief People Officer Chief Financial Officer Chief Technical Officer Chief Operations Officer David has more than 10 years Kim works alongside the As CFO, Haydn oversees t
Slide 43: Straker Translations
straker TRANSLATIONS
Slide 44: Appendix II: BTI Half Year Results Recap
For personal use only Appendix II BTI Half Year Results Recap
Slide 45: Financial Performance
Financial Performance Six months to 31 December 2016 For personal use only 6 Months to 6 Months to 31 Dec 2015 31 Dec 2016 $000 $000 Revenue 14,344 7,114 Represents increase in value of Interest income 99 178 investments including new investments Total revenue 14,443 7,292 Management fee 637 1,107 S
Slide 46: Statement of Financial Position
Statement of Financial Position For personal use only 30 June 2016 31 Dec 2016 Movement $000 $000 $000 Net cash change after $20m capital Cash 27,784 23,515 (4,269) raise in Dec 2016, investments made during the period and Receivables 98 187 89 payment of management performance fee. Deferred tax ass
Slide 47: Change in Value of Investments
Change in Value of Investments For personal use only $m 30 June 2016 Additional Valuation 31 Dec 2016 Net Movement Investment Movement SiteMinder 31.3 - 9.2 40.5 9.2 Viocorp International 28.5 - 0.5 28.9 0.5 Stackla 7.4 3.3 0.4 11.1 3.7 Straker Translations 4.6 3.8 0.3 8.7 4.1 iPRO Solutions 8.5 2.6
Slide 48: Further Information
For personal use only RESULTS For the period ending 30 June 2016 FURTHER INFORMATION Website: www.bailador.com.au Investor Enquiries: investorservices@bailador.com.au Telephone: +61 2 9223 2344 Bailador Technology Investments Limited (ASX:BTI) Bailador Technology Investments Limited (ASX:BTI) Approv
Slide 49: Disclaimer
Disclaimer For personal use only This presentation is confidential and may not be reproduced in whole or in part, or distributed except by Bailador Technology Investment Ltd (“Bailador”) or by authorized representatives of Bailador (“Affiliates”). This presentation does not contain a complete descri
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