Slide 1: WiseTech Global 1H19 Results
WiseTech Global 1H19 Results Investor briefing materials – February 2019
Slide 2: Important notice and disclaimer
Important notice and disclaimer CONTENT OF PRESENTATION FOR INFORMATION PURPOSES ONLY Visit www.wisetechglobal.com/investors FORWARD-LOOKING STATEMENTS PREPARATION OF INFORMATION This presentation may contain statements that are, or may are deemed to be, forward-looking All financial information has
Slide 3: Our innovations and global technology enable the world's supply chains
Our innovations and global technolo enable, improve and empower the world’s supply chains. We are a force for good, improving productivity, connectivity and resource usage’ across 130 countries worldwide.
Slide 4: CargoWise One… operating system for global logistics
CargoWise One… operating system for global logistics Strong foundation for future technology, seamless rollout, scalable capacity, global solutions scalable to any size of business global reach – ~130 countries deeply integrated with real time visibility reduces risks, costs and data entry
Slide 5: Our technology is used by the world's logistics providers across ~130 countries
Our technology is used by the world’s logistics providers across ~130 countries 12,000+ logistics organisations globally are customers(1) ~ 130 countries(2) 54+ billion data transactions in CargoWise One annually(3) 4+ million development hours over two decades 1,600+ valued employees(4) Countries w
Slide 6: 38 of the top 50 global third party logistics providers use our solutions
38 of the top 50 global third party logistics providers(1) use our solutions across ~130 countries worldwide 1. Armstrong & Associates: Top 50 Global Third Party Logistics Providers List ranked by 2017 logistics gross revenue/turnover.
Slide 7: 25 of the top 25 global freight forwarders use our solutions
25 of the top 25 global freight forwarders use our solutions across ~130 countries worldwide 7 of the top 25 global freight forwarders(1) use CargoWise One in global forwarding rollout exclusively – including the world’s largest. “The new TMS system that we are deploying now is called CargoWise, whi
Slide 8: 1H19 performance, delivery on strategy and financial results
1H19 performance, delivery on strategy and financial results
Slide 9: WiseTech Global 1H19 financial highlights
WiseTech Global 1H19 financial highlights Delivered significant, high quality growth while expanding technology lead and global footprint SIGNIFICANT HIGH recurring LOW HIGH innovation LOW sales and PROFITABLE + revenue HIGH quality customer product development marketing cash generative growth reven
Slide 10: Powerful growth strategy
Powerful growth strategy Multiple levers to sustain growth and increase market penetration + + Transactions/users Modules Innovation + Increase new Stimulate Accelerate and customers on network organic expansion of Geographies Industry the platform effects growth consolidation our global Greater usa
Slide 11: Delivered on strategy
Delivered on strategy Prioritised pipelines for innovation through development, and global expansion through acquisitions Innovation and expansion of Increase new customers Stimulate Accelerate organic growth through Greater usage by existing our global platform on the platform network effects acqui
Slide 12: Widening our reach, building unassailable ecosystems
Widening our reach, building unassailable ecosystems We converge our innovation pipeline and acquisitions to rapidly build our multi-modal capabilities on a global scale 11
Slide 13: Opportunity
Opportunity Logistics market size: across 1PL, 2PL, 3PL = ~A$14trillion Global 3PL Global 2PL Global 1PL E-commerce Government • Top 150 Carriers (Ocean, Shippers and • 3PLs • Regulation • Logistics Air, Rail, Road, Beneficial Cargo • Express • Digitisation providers in LTL, FTL, Parcel, Owners (BCO
Slide 14: Opportunity – global data, platforms and technology build ecosystem
Opportunity – global data, platforms and technology build ecosystem Ecosystems Connecting logistics customers and suppliers across the supply chain deeply integrated with live, value creating, cross-business transaction sets Markets Large customer groups, similar business needs Targeting Shippers &
Slide 15: The cargo chain and compliance chain – building an ecosystem
The cargo chain and compliance chain – building an ecosystem 14
Slide 16: Customers: CargoWiseNexus – powerful web portal, connector
Customers: CargoWiseNexus – powerful web portal, connector Connector between logistics providers, importers, exporters and freight users • Allows customers to plan, Shipper/BCO Consignee Shipper/BCO Consignee schedule, cost estimate, book logistics services (Air, Sea, Rail, Road) track, manage, risk
Slide 17: Customers: CargoWiseNexus – powerful web portal, connector
Customers: CargoWiseNexus – powerful web portal, connector Connector between logistics providers, importers, exporters and freight users Control Tower, connector portal Nexus consumes CargoWise One services • Universal XML including Universal Shipment, Universal Event, Universal Invoice • Air, Sea a
Slide 18: Sites: apply our technology and data sets: multi-modal depot
Sites: apply our technology and data sets: multi-modal depot The space between domestic and international = myriad, complex needs and disparate systems Door Door Door Door Airport Shipper CFS Transit warehouse/ Product cross dock warehouse Office Ocean port Door Door Door Door Consignee Truck Contai
Slide 19: Sites: apply our technology in inter-modal depot platform
Sites: apply our technology in inter-modal depot platform Our technology capability and development capacity accelerating solutions • Freight Forwarding • Customs brokerage • Transit warehouse • Purchase Order mgmt • Container freight station • Accounting (logistics) • E-commerce • Multi-modal booki
Slide 20: E-commerce 2nd generation, 'High Volume Low Value'
E-commerce 2nd generation, ‘High Volume Low Value’ Scalable, high volume integrated international e-commerce solution for all players “Cross-border e-commerce feeds $630bn market and is growing even faster than domestic.” (1) Last mile shipping capabilities (delivery to KEY KEYLOGISTICS LOGISTICSTRA
Slide 21: E-commerce cross-border challenges create exponential growth opportunity
E-commerce cross-border challenges create exponential growth opportunity CargoWise One international fulfilment and cross-border capabilities will supercharge adoption B2B business is now dwarfing B2C Europe increasingly seen as key e-commerce market EU countries are 8 of top 10 500m 24.5m SMME 30 o
Slide 22: Acquiring businesses for geographic expansion – securing assets swiftly
Acquiring businesses for geographic expansion – securing assets swiftly Small targeted acquisitions in key regions provide safer, faster, stronger entry to new markets We buy into leading market positions that would take years to build, integrate swiftly and drive value across the platform. We are a
Slide 23: Acquisitions ─ integration process + value components
Acquisitions ─ integration process + value components Stage 1 integration completed swiftly, we focus on long-term product capability and growing revenue Foothold 12 ─ 24 months 3 ─ 12 months Adjacencies 3+ years 0 ─ 36 months Integrate target Develop product Grow revenue Platform migration Product
Slide 24: Acquisitions accelerate organic growth
Acquisitions accelerate organic growth China expansion: case study – key foundation within region Completed the foundation for commercial model and growth • Infrastructure China Japan • Development – talent and technology • Content and localisations Taiwan • Channel Partners & Marketing 2008 interna
Slide 25: Adjacencies feed into our innovation pipeline to build ecosystems
Adjacencies feed into our innovation pipeline to build ecosystems Targeting key plug-ins to our global development or multi-regional adjacencies that can scale TRANSPORT MANAGEMENT SOLUTIONS GLOBAL RATES MANAGEMENT SPECIALIST WAREHOUSE GLOBAL SHIPPING COMPLIANCE DATA We accelerate convergence Specia
Slide 26: CargoWise One will be the operating system for global logistics
CargoWise One will be the operating system for global logistics Expanding depth, reach and network effect – every innovation & acquisition adds to flywheel of growth Geographic expansion Customs/Freight Forwarding Adjacencies and convergent technologies 25
Slide 27: Increasing investment in relentless innovation
Increasing investment in relentless innovation Significant pipeline of longer-term innovations across existing verticals and new adjacencies Work faster, harder, smarter 240+ product upgrades and Major development focus on: PRODUCTIVITY GLOW Universal enhancements in 1H19 • Productivity • ‘Build onc
Slide 28: Strong growth in revenue continues
Strong growth in revenue continues Significant high quality revenue growth while focusing on innovation and global expansion Revenue $m 221.6 156.7 153.8 1H19 revenue 128.2 +68% vs 1H18 102.8 82.7 +48% CAGR 1H15 – 1H19 93.4 70.0 54.2 71.1 56.7 43.0 37.7 48.6 32.3 Full year revenue (FY13 and FY14), 2
Slide 29: Revenue growth by cohort – all cohorts grew revenue in 1H19
Revenue growth by cohort – all cohorts grew revenue in 1H19 Our customers stay and grow their revenue over time… more users, modules and transactions • CargoWise One CargoWise One application suite revenue by customer cohort continues significant $m, last 12 months organic growth during 200 extensiv
Slide 30: Significant revenue growth
Significant revenue growth Strong organic growth with increasing impact of large volume of strategic acquisitions • Organic revenues from our existing Revenue and new customers delivered nearly $m half of our total revenue growth period on period. This 89% increase 15.9 1H19 acquisitions in growth o
Slide 31: Strong growth in revenue and EBITDA
Strong growth in revenue and EBITDA Strong organic revenue growth, expanding CargoWise One EBITDA margin, while building out our platform • 68% revenue growth vs 50% 49% 1H18, reflecting both strong organic growth and 46% increased acquisition 44% 49% EBITDA 50% activity that lays solid margin Cargo
Slide 32: Strong EBITDA efficiency through powerful commercial model
Strong EBITDA efficiency through powerful commercial model Our innovative commercial model and approach to development have been iterated and refined over decades EBITDA efficiency is an entirely constructed outcome – we apply a discipline and systems-thinking approach 50% Disciplined approach to pr
Slide 33: Focus on innovation investment, efficient sales and marketing
Focus on innovation investment, efficient sales and marketing We build assets, not churn Relentless focus on innovation aligned with an efficient commercial model deliver minimal attrition by CargoWise One customers – less than 1% every year for last 6.5yrs R&D Sales and marketing expense % of total
Slide 34: Investment in innovation and product development
Investment in innovation and product development Continued high investment in R&D, every $ and every hour build out our technology • $260m invested in R&D and Investment in innovation and product development innovation in the last 5 years driving our platform $m Total R&D % of total revenue leadersh
Slide 35: Licensing model – on demand removes constraints to growth
Licensing model – on demand removes constraints to growth Focus on pay for usage, revenue benefits from transition of customers to On-Demand licensing • Excluding acquisitions, CargoWise One has Revenue by licence type achieved 100% recurring % of total revenue revenue, with 99% revenue from custome
Slide 36: Licensing model – transformation ongoing
Licensing model – transformation ongoing Transitioning pre-existing MUL to more sustainable STL progressed rapidly in 1H19 Revenue by licence type • We have well-proven expertise in customer licence % of total revenue transition with <1% attrition • We introduced STL in 2014 for all new customers an
Slide 37: Financial summary
Financial summary Significant growth in revenue and earnings reflects strength of business and execution on strategy $m 1H18(1) 2H18(1) 1H19(1) Change (vs 1H18) Total revenue 93.4 128.2 156.7 +68% Gross profit 79.4 107.9 129.0 +62% Gross profit margin 85% 84% 82% (3)pp Total operating expenses (47.6
Slide 38: Operating expenses
Operating expenses Scaling to support relentless innovation, geographic expansion and business growth Operating expenses focused on Operating expenses strategic levers: % of total revenue • Innovation, product 22% 21% 21% 20% development and maintenance 20% General and administration of our global p
Slide 39: Cash flow profile
Cash flow profile Healthy operating and free cash flow • Strong operating performance delivered continuing increase in operating cash flow $m 1H18(2) 2H18(2) 1H19 • Free cash flow rose to $30.7m EBITDA 31.8 46.2 48.5 with operating cash flow conversion ratio above 100% Non-cash items in EBITDA 2.8 5
Slide 40: Summary statement of financial position
Summary statement of financial position Solid capital position to drive further strategic growth • Cash generation and funding $m 30 June 2018 31 December 2018 alternatives in place to drive strategic Current assets growth initiatives – including share Cash and cash equivalents 121.8 42.2 Trade rece
Slide 41: WiseTech Strategy and FY19 outlook
WiseTech Strategy and FY19 outlook I love coming into work because the people that I work with want me to be successful, and they support me in achieving my own personal goals. Alina Sherbako | Associate Developer
Slide 42: Powerful growth strategy
Powerful growth strategy Multiple levers to sustain growth and increase market penetration + + Transactions/users Modules Innovation + Increase new Stimulate Accelerate and customers on network organic expansion of Geographies Industry the platform effects growth consolidation our global Greater usa
Slide 43: Logistics execution industry dynamics
Logistics execution industry dynamics Industry pain points drive an exponential shift to CargoWise One 3PL industry dynamics vs Impact of Our leading global logistics software and low propensity to switch out of dynamic for open-access, usage-driven business model proprietary systems WiseTech Global
Slide 44: High growth outlook for FY19
High growth outlook for FY19 Execution on strategy to deliver strong growth in FY19 322 - 335 FY19 revenue (1) Revenue $m $322m - $335m 221.6 45% - 51% FY19 growth vs FY18 153.8 FY19 EBITDA (1) 102.8 70.0 $102m - $107m 56.7 43.0 31% - 37% FY19 growth vs FY18 FY13 FY14 FY15 FY16 FY17 FY18 FY19 1. Our
Slide 45: Appendix and additional information
Appendix and additional information
Slide 46: Updated FY19 guidance and assumptions
Updated FY19 guidance and assumptions Growth in revenue and EBITDA What is included in the guidance: • Retention of existing customers with organic usage growth consistent with historical levels • New customer growth consistent with historical levels • New product and feature launches • Contractual
Slide 47: Global revenues received in a mix of key currencies
Global revenues received in a mix of key currencies Revenues protected with effective natural hedge • 76% of 1H19 revenue in non- FY19 AUD due to increased FX rates v AUD guidance 2H19 guidance October to 30 June overseas acquisitions and mix of transactions and users in GBP 0.55 0.57 CargoWise One
Slide 48: Financial performance summary
Financial performance summary Robust delivery on strategy, business thriving, revenue growing Income statement $m 1H18 2H18 1H19 Change (vs 1H18) Revenue Recurring On-Demand 76.2 94.7 114.1 50% Recurring OTL maintenance 11.3 16.4 24.9 121% OTL & support services 5.8 17.1 17.7 205% Total revenue 93.4
Slide 49: Significant revenue growth
Significant revenue growth Strong underlying organic growth demonstrates resilience during extensive business transformation • Organic revenue drivers: ‒ Increased transactions/users/sites ‒ Product launches ‒ Licence transitions ‒ Behavioural discounts Revenue ‒ Transitional pricing arrangements ‒
Slide 50: Employees
Employees 33% increase in our diverse, talented workforce in 1H19 Employees by function Growth in number of employees as at 31 Dec 2018 General and administration, 21% Product design and development, 47% Customer support and other, 21% Sales and marketing, 11% Employees by region as at 31 Dec 2018 1
Slide 51: Capitalised development and amortisation
Capitalised development and amortisation High innovation to commercialisation ratio – product designed for CargoWise One platform + customer base • Capitalised development comprises: - In development – labour and overhead costs relating to the development of new modules and products Net book value o
Slide 52: Overview of revenue licensing models, drivers and platform
Overview of revenue licensing models, drivers and platform Customers in transition to On-Demand, ultimately move to transaction-based licensing Nature of revenue: Recurring revenue Other revenue (1) (1) 89% 11% Revenue categories: On-Demand OTL maintenance OTL & support services (1) (1) (1) 73% 16%
Slide 53: Acquisition ─ integration process + value components
Acquisition ─ integration process + value components Stage 1 integration completed swiftly, we focus on long-term product capability and growing revenue Foothold 12-24 months 3-12 months Adjacencies 3+ years 0-36 months Integrate target Develop product Grow revenue “Acculturation” “Build out” Global
Slide 54: Organic growth accelerated by acquisitions
Organic growth accelerated by acquisitions Small, valuable acquisitions further our growth across geographies and adjacencies FY15 and FY16 FY17 FY18 Customs Customs Customs Customs Ocean Customs Customs Customs Land carrier tariffs transport China South Africa Germany Italy Global Brazil Australasi
Slide 55: Organic growth accelerated by acquisitions
Organic growth accelerated by acquisitions Small, valuable acquisitions further our growth across geographies and adjacencies FY18 Rates Rates Warehouse Customs Customs Customs Customs Freight management management WMS Freight Freight WMS forwarding forwarding/ forwarding/ WMS WMS Global Global Asia
Slide 56: Organic growth accelerated by acquisitions
Organic growth accelerated by acquisitions Small, valuable acquisitions further our growth across geographies and adjacencies FY18 FY19 Freight Customs Parcel Customs LTL TMS Customs Customs Intermodal Customs/Freight forwarding shipping TMS tariffs trucking TMS/ forwarding/ Container TMS tracking L
Slide 57: Organic growth accelerated by acquisitions
Organic growth accelerated by acquisitions Small, valuable acquisitions further our growth across geographies and adjacencies FY19 Customs/ Parcel shipping Customs/ Customs Freight LTL TMS Freight forwarding/ forwarding/ WMS WMS/ TMS United Kingdom Australia Sweden Norway Brand DataFreight SmartFrei
Slide 58: Key operating metrics – WiseTech Global including and excluding acquisitions
Key operating metrics – WiseTech Global including and excluding acquisitions 1H19 excluding 1H18 2H18 1H19 acquisitions(1) Total revenue growth vs prior period 13% 37% 22% Total revenue growth vs prior corresponding period 31% 55% 68% Recurring revenue 94% 87% 89% 100% On-Demand revenue 82% 74% 73%
Slide 59: Income statement
Income statement $m 1H18 2H18 1H19 Revenue Recurring On-Demand 76.2 94.7 114.1 Recurring OTL maintenance 11.3 16.4 24.9 OTL & support services 5.8 17.1 17.7 Total revenue 93.4 128.2 156.7 Cost of revenues (13.9) (20.3) (27.7) Gross profit 79.4 107.9 129.0 Operating expenses Product design and develo
Slide 60: Reconciliation of statutory operating cash flow to statutory cash flow
Reconciliation of statutory operating cash flow to statutory cash flow 6 months to 31 December Full year • Payments for intangible assets reflected internal capitalised $m 1H18 1H19 FY18 development EBITDA 31.8 48.5 78.0 Non-cash items in EBITDA 2.8 3.2 9.4 • Acquisition of businesses Changes in wor
Slide 61: Regulatory and trade changes are tailwinds
Regulatory and trade changes are tailwinds We invest our regulatory experts and development teams in ensuring CargoWise One fully compliant globally Global trade changes and updates in tariffs and regulations are a positive driver for CargoWise One adoption as we are swift to market with our solutio
Slide 62: Outlook for trade, borders and compliance = tailwind
Outlook for trade, borders and compliance = tailwind Brexit, China/US trade and global tariffs impacting certainty and therefore trade flows Trade slowdown International Monetary Fund (IMF) forecasts growth in trade volumes will slow to 4% in 2019 and trade barriers will be more pronounced Brexit •
Slide 63: www.wisetechglobal.com/investors
www.wisetechglobal.com/investors 62