FINEOS Corporation Holdings Plc · ASX:FCL
FINEOS — H1 2020 Earnings Presentation
35 slides from FINEOS's earnings presentation, Feb 26, 2020
Slide 1: 1H20 Results Announcement
For personal use only 1H20 Results Announcement Michael Kelly, CEO Tom Wall, CFO 26 February 2020 © FINEOS CORPORATION
Slide 2: Important notice and disclaimer
Important notice and disclaimer For personal use only This presentation has been prepared by FINEOS Corporation Holdings PLC (Company or FINEOS). By accessing or attending this presentation, you acknowledge that you have read and understood the following statements. NO OFFER OF SECURITIES Nothing in
Slide 3: Presenting
Presenting For personal use only Michael Kelly Tom Wall Founder, Chief Executive Officer Chief Financial Officer Michael has more than two decades of Tom has over 30 years of industry senior management experience in the experience across the IT, financial insurance industry. services, distribution,
Slide 4: Agenda
1H20 Highlights FCL For personal use only Growth Strategy Financial Performance FY20 Progress and Outlook Appendix 1 – Statutory Accounts Appendix 2 – Company Overview slides © FINEOS CORPORATION
Slide 5: 1H20 Highlights
01 For personal use only 1H20 Highlights © FINEOS CORPORATION
Slide 6: 1H20 Financial Highlights
1H20 Financial Highlights For personal use only Revenue Software Pro forma EBITDA €40.4m Revenue €8.9m vs 1H19 €29.4m, up 37.7% €13.3m vs 1H19 €2.9m, up 207.6% vs 1H19 €10.5m, up 26.5% Pro forma NPAT €13.4m R&D Gross Profit €2.4m Investment Margin 69.7% vs 1H19 net loss vs 1H19 €11.4m, up 17.2% vs 1
Slide 7: 1H20 Operational Achievements
1H20 Operational Achievements For personal use only IPO on the ASX Growing headcount; >90% employee 16 August 2019 741 as at 31 Dec 19 retention rate 5 new name contracts won Expanded Dublin office 91% Professional in North America, which as footprint due to increasing Services employee a region now
Slide 8: 1H20 Financial Performance Summary
1H20 Financial Performance Summary For personal use only Strong revenue growth underpinned by continued investment in product and people % All Pro-forma figures €m 1H20 1H19 Variance Revenue 40.4 29.4 37.7% Software 13.3 10.5 26.5% Services 27.1 18.9 43.9% Cost of Sales (12.2) (8.5)1 44.3% Gross Pro
Slide 9: 1H20 Revenue highlights
1H20 Revenue highlights For personal use only Total Revenue €m 45 40.4 ◼ 1H20 total revenue growth of 37.7% on 1H19 40 ◼ Software1 revenue growth of 26.5% on 1H19 35 33.5 ◼ Services revenue growth of 43.9% on 1H19 reflecting the 13.3 29.4 significant increase in demand from a small number of 30 27.6
Slide 10: Significant R&D investment
Significant R&D investment For personal use only FINEOS continues to dedicate significant resources and financial investment to develop its software through research and development over time Significant investment in R&D1 R&D investment €m ◼ FINEOS has invested €13.4m in R&D in 1H20. Over €100m inv
Slide 11: Geographic mix of revenue
Geographic mix of revenue For personal use only Total Revenue growth of 37.7% on 1H19. Significant expansion in North American proportion of total revenue, up 14% versus 1H19. 1H19 revenue by region 1H20 revenue by region 11% 7% APAC APAC 39% 48% North North America America 41% 55% EMEA EMEA © FINEO
Slide 12: Long standing significant client relationships
Long standing significant client relationships For personal use only FINEOS has a global and diverse client base, with many long standing relationships % of 1H19 % of 1H20 1H20 client concentration Client No. of years Length of relationship revenue revenue by revenue Client 1 16 years 27% 22% Client
Slide 13: Teamwork
Teamwork Aligning culture & strategy For personal use only Employees by function Employees by region 3% 6% 15% 21% Professional Services APAC 41% Cloud Ops EMEA North America R&D 45% Sales & Marketing 65% 5% General & Admin Average Employee Utilisation1 High employee retention at >90% 91% © FINEOS C
Slide 14: Growth Strategy
02 For personal use only GROWTH STRATEGY © FINEOS CORPORATION
Slide 15: Multiple growth pathways
Multiple growth pathways For personal use only Attractive opportunities exist to expand within existing clients, win new clients and enter new geographic markets Grow and Win Expand sales and FINEOS the upsell with clients new clients enter new markets LA&H industry platform ◼ FINEOS has a multinati
Slide 16: Industry leader in multiple jurisdictions
Industry leader in multiple jurisdictions For personal use only Headquartered in Dublin, FINEOS has a truly global client base North America EMEA APAC 6 of the 10 largest Life 7 of the 10 of the largest Group Life and Health Large multi-line insurers in Ireland, the UK and 100% of Accident Claims in
Slide 17: The FINEOS Platform
The FINEOS Platform Overview For personal use only The FINEOS Platform comprises the core modules in FINEOS AdminSuite, assisted by engagement capabilities through FINEOS Engage and data analytics through FINEOS Insight FINEOS AdminSuite FINEOS Engage FINEOS Insight CORE DIGITAL DATA ▪ The FINEOS Ad
Slide 18: In Focus: FINEOS Absence
In Focus: FINEOS Absence For personal use only Demand for Integrated Disability and Absence Management (“IDAM”) is driving recent revenue growth from both existing and new U.S. based clients • Regulatory compliance, self-service capabilities and improved engagement • Handles time entitlement, benefi
Slide 19: Financial Performance
03 For personal use only FINANCIAL PERFORMANCE © FINEOS CORPORATION
Slide 20: Pro forma Income Statement
Pro forma Income Statement For personal use only €m 1H20 1H19 % Change ▪ 1H20 revenue growth of 37.7% on 1H19 Software 13.3 10.5 26.5% Services 27.1 18.9 43.9% ▪ Software revenue growth of 26.5% on Total Revenue 40.4 29.4 37.7% 1H19 Cost of sales (12.2) (8.5) 44.3% ▪ Services revenue growth of 43.9%
Slide 21: Balance Sheet
Balance Sheet For personal use only Statutory Statutory € millions 31-Dec-19 30-Jun-19 % Change Current assets ▪ Cash at Bank movement reflects proceeds Cash at Bank 34.7 6.9 403% received from IPO capital raise less IPO Trade Debtors 12.2 7.4 65% costs (€5.9m) and EIB loan repayment R&D credit 3.7
Slide 22: Cashflow Statement
Cashflow Statement For personal use only Consolidated Statement of Cash Flows Statutory Statutory % € millions 31-Dec-19 31-Dec-18 Change Net cash flows generated from operating activities (3.4) 2.0 -272% ▪ Cash outflow at 31 Dec 19 from operating Net cash used in investing activities (8.4) (7.0) 21
Slide 23: FY20 Progress and Outlook
04 For personal use only FY20 PROGRESS AND OUTLOOK © FINEOS CORPORATION
Slide 24: FY20 Progress and Outlook
FY20 Progress and Outlook For personal use only ▪ IPO on the ASX completed 16 August 2019; €62.9m1 raised ▪ Repaid EIB loan and associated interest of €16.6m in 1H20 ▪ Due to continued demand for professional services, FY20 revenue guidance range is upgraded from €80-€82 million, to €84-€86 million;
Slide 25: Appendix – Statutory Accounts
05 APPENDIX 1 – Statutory Accounts For personal use only © FINEOS CORPORATION
Slide 26: Statutory Income Statement
Statutory Income Statement For personal use only €m 1H20 1H19 % Change Subscription 13.3 10.5 26.5% Services 27.1 18.9 43.9% Total Revenue 40.4 29.4 37.7% Cost of sales (12.2) (8.5) 44.3% Gross profit 28.2 20.9 34.9% Research & Development (6.5) (5.4) 20.7% Sales & Marketing (1.9) (1.5) 27.2% Delive
Slide 27: Statutory to Pro forma Reconciliation
Statutory to Pro forma Reconciliation For personal use only € millions 1H20 1H19 Statutory revenue 40.4 29.4 No Adjustments to revenue - - Pro forma revenue 40.4 29.4 Statutory profit/(loss) after tax 0.1 (0.7) Incremental pubic company costs (0.1) (0.7) Net finance expense 0.2 0.3 IPO Cost 0.7 - Ex
Slide 28: Appendix – Company Overview
06 APPENDIX 2 – Company Overview For personal use only © FINEOS CORPORATION
Slide 29: FINEOS overview
FINEOS overview For personal use only FINEOS is a leading provider of core software solutions to the Life, Accident & Health (“LA&H”) insurance industry globally OUR MISSION To be the global market leader in core systems for group and individual LA&H insurance on a single technology platform 741 peo
Slide 30: Company Overview
Company Overview For personal use only FINEOS has deep industry expertise and a strategic vision including growth and investment Key milestones 1993 – 2002 2003 – 2012 2013 – 2020 Phase 1: Deep expertise in insurance Phase 2: Claims + Software Phase 3: Building the Platform Solutions ◼ FINEOS was fo
Slide 31: The FINEOS Playbook
The FINEOS Playbook For personal use only The FINEOS playbook provides clarity and alignment and has supported strong levels of employee engagement and retention Vision Long term A world where protection from injury and loss is accessible to everyone Purpose We help our clients care for the people t
Slide 32: Competitive strengths
Competitive strengths For personal use only Implementing FINEOS’ software provides a wide range of diverse benefits both to insurers and to their customers Leader in claims Track record and Single platform Built for scale and All products live in management software experience accessibility the clou
Slide 33: LA&H insurance addressable market
LA&H insurance addressable market For personal use only Large, attractive and growing market opportunity Global estimated IT spend by life insurers (US$bn)1 ◼ FINEOS’s clients operate within the LA&H insurance market and use FINEOS’ services and software as part of an external 4 3 3 third party soft
Slide 34: Board of Directors – Non Executive Directors
Board of Directors – Non Executive Directors For personal use only Director Experience & qualifications — Based in Sydney, Anne has over 30 years of business experience across a broad spectrum of the insurance industry. Anne is currently on the boards of listed companies, Steadfast Group Limited and
Slide 35: Board of Directors – Executive Directors
Board of Directors – Executive Directors For personal use only Director Experience & qualifications — Based in Dublin, Michael is the chief executive officer and founder of FINEOS. Michael has more than two decades of senior management experience in the insurance industry. — Michael began his career
FINEOS Corporation Holdings — H1 2020 Earnings Presentation on 6ix