Slide 1: 2021 Half Year Results
2021 Half Year Results Update image and content Ended 31 March 2021 25 May 2021 Commercial in confidence 1 Disclosure Statement TechnologyOne Ltd Half Year Presentation – 25 May 2021 TechnologyOne Ltd (ASX: TNE) today conducted a series of presentations relating to its 2021 Half Year results. These
Slide 2: Agenda
Agenda • Results • Significant Achievements • Outlook for Full Year • Long Term Outlook 3 Our SaaS business continues to grow strongly SaaS ARR $155.8m up 41% 4 2
Slide 3: Record H1 Profit
Record H1 Profit Net Profit Before Tax of $37.3m up 44% Note: Our half year results are not indicative of the full year 5 SaaS continues to drive our growth Outlook for FY21 is strong Discussed later in more detail 6 3
Slide 4: Interim dividend up 10%
Interim dividend up 10% We remain confident about the outlook for the full year 7 Interim Dividend up 10% We remain confident about the outlook for the full year Half 1 3.82 cps, H1 Dividend last 10 years up 10% (60% franked1) Up Up 10% Up 10% Payout Up 10% 3.82 ratio of Up Up 10% 3.47 10% 3.15 10%
Slide 5: H1 Results Summary
H1 Results Summary H1 FY21 H1 FY20 VAR VAR% #039;000 #039;000 #039;000 Revenue – SaaS & Continuing Business 140,579 131,789 8,790 7% In line with expectations. We expect this to grow to 15%+ pa over next 4 years SaaS Fees Recognised1 68,818 51,053 17,765 35% Our SaaS business continues to grow strongly Annua
Slide 6: Expenses down 5%
Expenses down 5% R&D investment up 14% We are extending the functionality and capabilities of our Global SaaS ERP solution including our new and exciting Local Government Digital Experience Platform (LG DXP) Refer slide: R&D Significant Investment for future growth 11 Profit margin to improve to 35%
Slide 7: Balance Sheet Strong
Balance Sheet Strong MAR ‘21 MAR ‘20 VAR VAR #039;000 #039;000 #039;000 % Cash & Equivalents Cash & cash equivalents 100,132 83,769 16,363 20% Prepaid expenses 11,691 9,512 2,179 23% Trade and other receivables 28,983 29,647 (664) (2%) $100.1m, up 20% Contract assets1 25,394 23,523 1,871 8% Other current ass
Slide 8: Cash Flow
Cash Flow H1 FY21 H1 FY20 VAR VAR #039;000 #039;000 #039;000 % Profit Before Tax 37,289 25,940 11,349 44% Depreciation & Amortisation1 11,792 8,390 3,402 41% Cash Flow Generation of ($2.97m). Changes in working capital: Negative H1 Cash Flow Generation is (Increase) / Decrease in Trade and other Receivables2
Slide 9: H1 FY21 Profit by Segment
H1 FY21 Profit by Segment Profit Before Tax $37.3m, up 44% $11.4m Operating segment analysis FY20 H1 FY20 FY21 H1 FY21 Geographic Segment analysis segment analysis H1FY20 FY20 FY21 H1 FY21 Up 46% Up 46% 44% Up 21% 38% $7.4m $11.3m $7.4m $1.1m $10m $23.5m $25.9m $26.7m $16.0m Up 21% Up 58% $37.3m $36
Slide 10: Agenda
Agenda • Results • Significant Achievements • Outlook for Full Year • Long Term Outlook 19 Continuing strong demand Transforming business, TechnologyOne Global making life SaaS ERP Solution simple 20 10
Slide 11: Enterprise customers on TechnologyOne SaaS
576 Enterprise customers on TechnologyOne SaaS up 21% from 475 enterprise customers pcp 21 How is TechnologyOne SaaS different to other SaaS products? We are providing a total ERP solution, not individual products 22 11
Slide 12: Total ERP Solution
Total ERP Solution Power of a single integrated solution Financials Asset HR & Enterprise Supply Student Property & Management Payroll Budgeting Chain Management Rating Business Enterprise Performance Spatial Stakeholder Enterprise Business Intelligence Content Planning Management Cash Process Manag
Slide 13: $180m ARR Runway moving on-premise to SaaS by FY26
$180m ARR Runway moving on-premise to SaaS by FY26 We expect SaaS ARR vs on-premise 90%+ 100% $180m+ $230.0m of on-premise 90% SaaS to move to ARR from SaaS by FY26 80% $180.0m Existing on- $155.8m 70% Up 41% premise pcp 60% Customers $130.0m $134.6m $110.2m % of SaaS customers50% $101.7m $82.7m $70
Slide 14: R&D Significant Investment for future growth
R&D, Disciplined and Transparent Highly disciplined approach to R&D We expense maintenance and research We capitalise development based on actual timesheets for eligible projects Capitalisation and amortisation is independently audited along with financial statements Because we are a SaaS ERP provid
Slide 15: Vertical Market Analysis and customer churn
Our APAC market penetration in 99% customer retention any single vertical does not across all markets exceed 15% Significant room to grow in future years Vertical Market Analysis ARR of $233.7*m, Up 10% | From $211.6m, H1 FY20 Customer Churn 10 years Up $8.5m $90.0m $84.9m $80.0m 1.31% $70.0m Up $2.
Slide 16: Quality of SaaS Revenue is very high
Quality of SaaS Revenue is very high Recurring contractual nature, combined with our very low churn rate of <1% Today, 85%+ of Revenue is recurring Target is 95% of Revenue recurring by FY27 Based on FY20 opening ARR ($202.5m) as percentage of total revenue excluding Consulting Revenue, which follow
Slide 17: Outlook for 2021 Full Year
Agenda • Results • Significant Achievements • Outlook for Full Year • Long Term Outlook 33 Outlook for 2021 Full Year Strong Profit growth to continue in 2021 • The markets we serve are resilient. TechnologyOne provides mission critical software with deep functionality for the markets we serve • Our
Slide 18: Outlook for 2021 Full Year
Outlook for 2021 Full Year We expect to see strong continuing growth Net Profit Before Tax of $94.3m to $98.6m Up 14% to 20% on FY20 Statutory profit1 of $82.5m Up 10% to 15% on FY20 Underlying profit2 of $86.1m 1Profit including a one-off increase in provision of $3.6m as a result of a civil employ
Slide 19: Positioned well for the future
Positioned well for the future and to continue doubling in size every 5 years • SaaS continues to grow strongly • Harvest substantial opportunities in our customer base • Continuing growth in APAC • Continuing growth in the UK • Profit margins to grow to 35%, through significant economies of scale 3
Slide 20: Total Annual Recurring Revenues will increase to $500m+ in FY26
Total Annual Recurring Revenues will increase to $500m+ in FY261 1Total ARR end of FY20 was $222m 39 Drivers for long term growth Increase Product Increase Market Expand Geographies Penetration Penetration 14 Licensable products1 6 Vertical markets APAC & UK Over 325 licensable modules United Kingdo
Slide 21: Appendixes
41 Appendixes • Appendix A – Consulting Profit • Appendix B – R&D Disciplined and Transparent • Appendix C – Glossary 42 21
Slide 22: Appendix A: H1 Consulting Profit of $6.1m
Appendix A: H1 Consulting Profit of $6.1m up 21% Our AMS business for our existing customers is also moving to recurring revenue. Now have $17m locked in recurring revenue not included in our total ARR Turnaround APAC Profit continuing in the Consulting is responsible for up 6% $0.4m services in rel
Slide 23: Appendix C: Glossary
Appendix C: Glossary EBITDAR Earnings before interest, taxes, depreciation, amortisation, and research and development EBITDA Earnings before interest, taxes, depreciation and amortisation EBIT Earnings before interest and taxes Churn Proportion of ARR for annual licence fees from lost customers Cas