Slide 1: 2014 Mid Year Presentation
7/23/2014 For personal use only 2014 Mid Year Presentation July 23rd 2014 Adrian Di Marco Adrian_Dimarco@TechnologyOneCorp.com *Final Jul 2014 Commercial in confidence Technology One Ltd Mid Year Presentation - 23 July 2014 Technology One Ltd (ASX:TNE) today conducted presentations with Merrill Lync
Slide 2: Agenda / Results Summary
7/23/2014 Agenda For personal use only 2014 Half Year Results Recap Outlook for Full Year Long Term Outlook Company Update Appendix 2014 Half Year Results Detail Technology One Overview Results Summary FY14 FY13 Variance % Revenue $87.6 m $79.7 m 10% Initial Licence Fees $20.9 m $16.9 m 24% Consulti
Slide 3: Results Highlights
7/23/2014 Results Highlights For personal use only Positions us to deliver continuing growth in both revenue and profit for the full year Continued significant investments in a number of key areas as follows: R&D into TechnologyOne Cloud R&D into Ci² - Next generation of our Ci suite Preconfigured s
Slide 4: Outlook for Full Year
7/23/2014 For personal use only Outlook for the full year remains unchanged Outlook for Full Year Economic environment remains challenging and uncertain Strong committed annual licence fees in the second half TechnologyOne enterprise business remains resilient Good pipeline of opportunities in secon
Slide 5: Assumptions
7/23/2014 Assumptions For personal use only The current pipeline remains strong • Operating expenses up 5% R&D expense growth of 6% for the full year – TechnologyOne Ci Anywhere – TechnologyOne Cloud – Round off existing products – ECM, HR & Payroll, Asset Management Plus revenue will be approx $1m
Slide 6: Long Term Outlook
7/23/2014 Long Term Outlook For personal use only Long Term Outlook remains unchanged Net Profit Margin Before Tax Focus is to substantially Net Profit Margin Before Tax improve margins over next 35% 31% 29% 30% five years 25% 27% 25% 26% 24% 25% 21% 21% 19% Controlled R&D growth is the 20% 17% 17%
Slide 7: R&D Growth Projections
7/23/2014 R&D Growth Projections For personal use only Target for R&D growth of 8% per annum compound, over 5 years set in 2011 • In 2012 year we demonstrated this was achievable with R&D growth of 5% • In 2013 year we demonstrated this was achievable with R&D growth of 6% • Continues to be a very a
Slide 8: Ci Anywhere and TechnologyOne Cloud
7/23/2014 For personal use only Ci Anywhere Enterprise software Any device. Any where. Any time. Early adopters in progress Feedback very positive Strategy and Roadmaps being developed for Stage 2 of this exciting project TechnologyOne Cloud Early adopters program finished • 10+ customers now live T
Slide 9: TechnologyOne's Journey to The Cloud
7/23/2014 TechnologyOne’s Journey to The Cloud For personal use only TechnologyOne’s Journey to the Cloud ... Email done Corporate Accounting done R&D in the Cloud done Documents & Files in the Cloud done Demonstrations via the Cloud done Consulting in the Cloud Dec 2014 Expected cost savings of $1.
Slide 10: 2014 Half Year Results Detail
7/23/2014 Agenda For personal use only 2014 Half Year Results Recap Outlook for Full Year Long Term Outlook Company Update Appendix 2014 Half Year Results Detail Technology One Overview 2014 Half Year Results Detail FY14 FY13 Variance % Revenue $87.6 m $79.7 m 10% Initial Licence Fees $20.9 m $16.9
Slide 11: Expenses up 9%
7/23/2014 Expenses up 9% For personal use only Variable Operating 9.0 $ 67.0m, $ 7.8m, 70.0 Up 7% 8.0 Up 23% 60.0 7.0 6.0 50.0 FY13 FY13 5.0 40.0 #039;m #039;m 4.0 FY14 FY14 30.0 3.0 20.0 2.0 1.0 10.0 0.0 0.0 Variable costs¹ up 23% (vs L/Fees up 24%) Operating costs up 7% Cloud costs associated with TechO
Slide 12: Balance Sheet
7/23/2014 Balance Sheet For personal use only Strong balance sheet Mar-14 Mar-13 Var % #039;000 #039;000 #039;000 Cash & Cash Equivalents $54.0m (vs. $50.3m) Cash & Available-for-sale financial assets 53,997 50,251 3,746 7% Net Cash*: 16.09c/s (vs. 14.00c/s) Trade and other receivables 31,899 22,060 9,839 45
Slide 13: Results Analysis
7/23/2014 Results Analysis For personal use only FY14 FY13 Variance Half Year 2014 v Half Year 2013 #039;000 #039;000 #039;000 % Revenue excl interest 86,712 78,869 7,843 10% Expenses (excl R&D, interest, Depn & Amortisation) 53,986 48,588 5,388 11% EBITDAR 32,726 30,281 2,455 8% R&D Expenditure 18,318 17,21
Slide 14: Profit By Segment Analysis
7/23/2014 Profit By Segment Analysis For personal use only Investment in new service Evolve customer event called Application Managed Profit Contribution $600k $3.5m, Down 7% $3.8m, Up 37% 4.0 Services (AMS) Heads 216, Inline Heads 288, Down 4% $3.4m, Up 41% 3.5 Heads 118, Up 8% FY12 3.0 2.5 FY13 #039;
Slide 15: Revenue Streams
7/23/2014 Revenue Streams For personal use only 25 Licence Fees 40 Annual Licence Fees Up 24%, Up 13%, Compound Growth 21% $4m 35 $3.9m 20 Compound Growth 18% 30 15 25 #039;m #039;m 20 10 15 10 5 5 - - 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Slide 16: Revenue Streams: Consulting
7/23/2014 Revenue Streams For personal use only Consulting Up 4%, Plus 25 $926k 12 10 20 Compound Growth 15% Compound Growth 5% Down 7%, 8 $520k 15 #039;m #039;m 6 10 4 5 2 - - 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Product Consulting
Slide 17: TechnologyOne Overview
7/23/2014 Agenda For personal use only 2014 Half Year Results Recap Outlook for Full Year Long Term Outlook Company Update Appendix 2014 Half Year Results Detail Technology One Overview TechnologyOne Overview Formed in Employees 300+ developers 1000+ Revenue 1987 900+ R&D in centre corporations, gov
Slide 18: 1000+ high profile customers
7/23/2014 1000+ high profile customers For personal use only TechnologyOne Overview Financially very strong¹ .... Cash and Equivalents $65.4m Adjusted Return on Equity² 70+% Debt/Equity 6% Interest Cover 96 Continually paid dividends since 1996 (18 years) Continually profitable since 1992 (22 years)
Slide 19: The Competitive Landscape
7/23/2014 The Competitive Landscape For personal use only New expanding market coverage ORACLE SAP/R3 $1,000m Current market coverage TechnologyOne Microsoft Business Solutions $100m SAP/Business One NetSuite Infor (Sun Systems) $30m Xero Reckon CLIENT TURNOVER MYOB What makes us unique ... We are o
Slide 20: What makes us unique
7/23/2014 What makes us unique ... For personal use only We focus on seven key markets... Deep understanding and engagement in our markets We sell to asset and Deeply integrated preconfigured solutions service intensive Proven practice organisations. Streamlined implementations We do not service Red
Slide 21: The power of evolution
7/23/2014 What makes us unique ... For personal use only The power of evolution Our enterprise solution adapts and evolves to new technologies Green screen Client server Connected Intelligence Cloud Computing and Smart Mobile Devices 99% of customers have continued with us through this journey ... O
Slide 22: Robust Revenue Model
7/23/2014 Robust Revenue Model For personal use only Robust Revenue Model ... Initial Licence - based on usage (number of users ) • Matrix of licensable products & modules (approx 300 modules over 12 products) • Once off fee – invoiced on contract signing Implementation Services - fee for service •
Slide 23: TechnologyOne Overview
7/23/2014 TechnologyOne Overview For personal use only Diversity of revenue streams from multiple: • Products (12) • Vertical markets (7) • Geographies (12) – All states of Australia, New Zealand, South Pacific, Asia and UK Strong, very loyal blue chip customer base • We provide a mission critical s
Slide 24: Historical Performance
7/23/2014 Historical Performance For personal use only Key metrics over last 15 years … 90 80 Revenue - 17% per annum compound 70 Even through the Dot-Com and GFC 60 #039;m Initial Licence Fees - 14% per annum compound 50 40 Annual Licence Fees - 24% per annum compound 30 Profit Before Tax - 14% per an