Wisetech Global Ltd. · ASX:WTC
Wisetech Global — H1 2017 Earnings Presentation
48 slides from Wisetech Global's earnings presentation, Feb 22, 2017
Slide 1: Results 1H17
For personal use only Results 1H17 Changing the world of logistics one innovation at a time 22 Feb 2017
Slide 2: Agenda
Agenda CONFIDENTIAL DRAFT 2208 11AM NOT FOR RELEASE For personal use only Gail Williamson Investor Relations Welcome CEO overview Financials Outlook Q&A & performance 1H17 highlights 1
Slide 3: Important notice and disclaimer
CONFIDENTIAL DRAFT 2208 11AM Important notice and disclaimer Visit www.wisetechglobal.com/investors NOT FOR RELEASE For personal use only FORWARD-LOOKING STATEMENTS PREPARATION OF INFORMATION This presentation may statements that are, or may are deemed to be, forward-looking All financial informatio
Slide 4: A leading provider of software to the logistics industry globally
CONFIDENTIAL DRAFT 2208 11AM A leading provider of software to the logistics industry NOT FORglobally RELEASE For personal use only 125+ countries(1) 6,000+ customers(2) 3 million development hours over 15 years ~650 employees 1 integrated CargoWise One global system Countries with licensed users Wi
Slide 5: Agenda
Agenda CONFIDENTIAL DRAFT 2208 11AM NOT FOR RELEASE For personal use only Richard White Founder and CEO Welcome CEO overview Financials Outlook Q&A & performance 1H17 highlights 4
Slide 6: WiseTech Global financial highlights
WiseTech Global financial highlights CONFIDENTIAL DRAFT 2208 11AM NOT FOR Accelerated revenue growth, significant global platform and business RELEASE expansion For personal use only ACCELERATED revenue growth ↑ 44% revenue vs 1H16 PF $71.1m 1H17 39% CAGR 1H15-1H17 HIGH recurring LOW customer PROFIT
Slide 7: Delivered on strategy – we focused on what's important for growth
Delivered on strategy – we focused on what’s CONFIDENTIAL important DRAFT 2208 11AM NOTforFOR Executed strategy to drive powerful revenue growth, well-positioned furtherRELEASE global expansion For personal use only Innovation and expansion of Increase new customers Stimulate Accelerate organic grow
Slide 8: Strong growth in revenue continues
Strong growth in revenue continues CONFIDENTIAL DRAFT 2208 11AM Accelerated high quality revenue growth while building out our NOT platformFOR RELEASE and expanding globally For personal use only Revenue $m 102.8 1H17 revenue 70.0 56.7 43.0 +46% v 1H16 71.1 +120% v 1H15 48.6 32.3 - - 50% 46% FY13
Slide 9: Accelerated high quality revenue uplift from existing customers
Accelerated high quality revenue upliftCONFIDENTIAL DRAFT 2208 11AM from existing customers NOT Our customers stay and grow their revenue over time… more users,FOR RELEASE modules, transactions For personal use only • Extensive base of customers on CargoWise One continue to add more transactions and
Slide 10: Global rollouts in CargoWise One build users and regions over time
Global rollouts in CargoWise One buildCONFIDENTIAL users and regionsDRAFT 2208 11AM over time Industry consolidation can create step-change in revenue NOT FOR RELEASE For personal use only • 34 of top 50 global 3PLs • 22 of top 25 global freight forwarders Swift consolidations • 7 FF in global rollo
Slide 11: New customer growth
New customer growth CONFIDENTIAL DRAFT 2208 11AM NOTbyFOR Industry pain points drive logistics providers to CW1, supplemented sales RELEASE and network effects For personal use only Growth in higher quality sales • New customers signing increasing account + deal size Examples of upcoming regulatory
Slide 12: Network effects – compelling across our global platform
Network effects – compelling across our CONFIDENTIAL global platform DRAFT 2208 11AM Potent productivity/cost benefits of CW1 drive network effects,NOT FOR enriched withRELEASE active programmes For personal use only • Continuing powerful growth across all high GDP trade routes – North America and A
Slide 13: Organic growth accelerated by acquisitions
Organic growth accelerated by acquisitions CONFIDENTIAL DRAFT 2208 11AM NOT Small, valuable acquisitions further our growth across geographies andFOR RELEASE adjacencies For personal use only We buy into market positions that would take years to build, integrate swiftly, drive value across platform
Slide 14: Acquisition – integration process + value
Acquisition ─ integration process + value CONFIDENTIAL components DRAFT 2208 11AM NOTcapability Stage 1 integration completed swiftly, we focus on long-term product FOR RELEASE and growing revenue For personal use only Foothold 12-24 months 3 - 12 months Adjacencies 3+ yrs 0 - 36 months Integrate ta
Slide 15: Global integrated CW1 platform + large innovation pipeline
Global integrated CW1 platform + largeCONFIDENTIAL innovation pipelineDRAFT 2208 11AM NOT Existing business delivers high quality, high growth revenue, R&D FOR RELEASE targeting hyper-growth For personal use only POWERFUL HIGH GROWTH ENGINE HYPER-GROWTH FUEL CargoWise One Global deeply integrated lo
Slide 16: Innovation and product development – enhancements
Innovation and product development – enhancements CONFIDENTIAL DRAFT 2208 11AM High innovation to commercialisation: product designed for 3PL,NOT FORCW1, leverages RELEASE ready customer base For personal use only Our 300 product upgrades and enhancements are delivered via update notes and ring rele
Slide 17: Innovation and product development – longer term pipeline
Innovation and product development – longer CONFIDENTIAL term pipelineDRAFT 2208 11AM High innovation to commercialisation ratio: product designed forNOT FOR RELEASE 3PL, leverages CW1 globally For personal use only Adding to our pipeline of mid-long term innovation we focus on industry growth areas
Slide 18: Product commercialisation and monetisation processes and timeline
Product commercialisation and monetisation processes andDRAFT CONFIDENTIAL timeline2208 11AM NOT FOR RELEASE For personal use only Rich ideation Innovation cycle Rapid commercialisation Grow usage & revenue Industry expert teams solve Product leads + architects leverage global data, across sectors a
Slide 19: Agenda
Agenda CONFIDENTIAL DRAFT 2208 11AM NOT FOR RELEASE For personal use only Andrew Cartledge CFO Welcome CEO overview Financials Outlook Q&A & performance 1H17 highlights 18
Slide 20: Financial summary
Financial summary CONFIDENTIAL DRAFT 2208 11AM Strong growth in revenue and earnings reflect strength of business NOT and execution FOR RELEASEon strategy For personal use only Pro forma Statutory $ million 1H15 2H15 1H16 2H16 1H17 Change PF PF PF PF (vs 1H16 PF) Total revenue 37.0 42.6 49.3 54.0 71
Slide 21: Strong growth in revenue and EBITDA
Strong growth in revenue and EBITDA CONFIDENTIAL DRAFT 2208 11AM NOT Strong organic revenue growth, expanding EBITDA margins, while FORout building RELEASE our platform For personal use only • 44% revenue growth v 1H16, reflecting strong organic growth from existing customers, growth Revenue 98% EBI
Slide 22: Revenue growth
Revenue growth CONFIDENTIAL DRAFT 2208 11AM NOT FOR Revenue accelerating from existing customers, enhanced by targeted RELEASE acquisitions For personal use only • Existing customer growth $8.5m in 1H17 ─ up 183% compared to growth in 2H16 Revenue Revenue 7.0 reflecting increased usage ($($million,
Slide 23: Licensing model
Licensing model CONFIDENTIAL DRAFT 2208 11AM NOT FOR Focus on pay for usage, revenue benefits from transition of customers RELEASE to On-Demand licensing For personal use only • On-Demand licensing = access on an as-needed basis, pay monthly based Revenue by licence type on usage by module user or (
Slide 24: Financial performance summary
Financial performance summary CONFIDENTIAL DRAFT 2208 11AM NOT Robust delivery on strategy, business thriving, operating leverage FOR RELEASE as revenue grows For personal use only Income statement $ million Pro forma Statutory 1H16 2H16 1H17 Ch v 1H16PF On-Demand 38.9 47.3 58.6 51% OTL maintenance
Slide 25: Operating expenses
Operating expenses CONFIDENTIAL DRAFT 2208 11AM NOT FOR RELEASE Efficiency while scaling to support innovation and business growth For personal use only • Large growth in revenue Operating expenses delivers operating leverage (% of total revenue 1H15 to 1H17) as the business scales • OpEx focused on
Slide 26: Investment in innovation and product development
Investment in innovation and product developmentCONFIDENTIAL DRAFT 2208 11AM NOT Continued high investment in R&D, every $ and every hour builds outFOR RELEASE our technology For personal use only • Increases in product design and development expenses from 1H16 to Investment in innovation and produc
Slide 27: Cash flow profile
Cash flow profile CONFIDENTIAL DRAFT 2208 11AM Healthy operating cash flow NOT FOR RELEASE For personal use only • Continued high conversion of EBITDA Cash flows into operating cash flow – Non-cash items in EBITDA mainly $ million Pro forma reflect share-based payments and 1H16 2H16 1H17 provision m
Slide 28: Summary statement of financial position
Summary statement of financial position CONFIDENTIAL DRAFT 2208 11AM Strong capital position from which to drive strategic growth NOT FOR RELEASE For personal use only $ million 30 Jun 2016 31 Dec 2016 • Strong capital position - $115m in Current assets cash and equivalents Cash and cash equivalents
Slide 29: Agenda
Agenda CONFIDENTIAL DRAFT 2208 11AM NOT FOR RELEASE For personal use only Richard White Founder and CEO Welcome CEO overview Financials Outlook Q&A & performance 1H17 highlights 28
Slide 30: Economic and political impacts positive for WiseTech
Economic and political impacts positive CONFIDENTIAL for WiseTech DRAFT 2208 11AM Trade growth, margin pressures, increased border controls andNOT FOR regulation RELEASE all ADD transaction volumes For personal use only Economic trends and impacts • Logistics 12% of global GDP(1) • Margin contractio
Slide 31: Industry dynamics 2018 - 2025, regions, outlook, trends
Industry dynamics 2018 - 2025, regions, CONFIDENTIAL outlook, trends DRAFT 2208 11AM “If you aren’t out of breath, you aren’t running fast enough” NOT FOR RELEASE For personal use only Logistics/supply chain industry • Growth in 3PL transactions • PLUS high margin pressure • Fragmented industry -> c
Slide 32: Outlook for FY17
Outlook for FY17 CONFIDENTIAL DRAFT 2208 11AM Execution on track to deliver strong growth in 2H17 and meetNOT FOR RELEASE FY17 guidance For personal use only • Strong momentum from 1H17 leading into FY17 — Revenue growth accelerated in existing customers — Increasing tailwinds from industry dynamics
Slide 33: Agenda
CONFIDENTIAL DRAFT 2208 11AM Agenda NOT FOR RELEASE For personal use only Welcome CEO overview Financials Outlook Q&A & performance 1H17 highlights 32
Slide 34: Visit our investor centre for more information on WiseTech Global
CONFIDENTIAL DRAFT 2208 11AM Visit our investor centre for more information onNOT WiseTech FOR Global RELEASE www.wisetechglobal.com/investors For personal use only Videos Presentations Other materials 33
Slide 35: Appendix
CONFIDENTIAL DRAFT 2208 11AM NOT FOR RELEASE For personal use only Appendix 34
Slide 36: FY17 guidance and assumptions
FY17 guidance and assumptions CONFIDENTIAL DRAFT 2208 11AM Current revenue and EBITDA guidance reaffirmed NOT FOR RELEASE For personal use only What is included in the guidance: $ million Revenue EBITDA • Retention of existing customers with organic usage growth consistent with historical levels FY1
Slide 37: Global revenues received in a mix of key currencies
Global revenues received in a mix of keyCONFIDENTIALcurrencies DRAFT 2208 11AM NOT FOR RELEASE Revenues protected with effective natural hedge and external arrangements For personal use only • 72% of 1H17 revenue in non-AUD, as expected, slightly lower rate than FY16 FX rates v AUD FY17 2H17 Prospec
Slide 38: Capitalised development and amortisation
Capitalised development and amortisation CONFIDENTIAL DRAFT 2208 11AM NOT High innovation to commericalisation ratio – product designed for CW1FOR RELEASE platform + customer base For personal use only • Capitalised development comprises: - In development – labour and overhead costs relating to the
Slide 39: Income statement
CONFIDENTIAL DRAFT 2208 11AM Income statement NOT FOR RELEASE For personal use only $ million Pro forma 1H15 PF 2H15 PF 1H16 PF 2H16 PF 1H17 On-Demand 25.7 31.2 38.9 47.3 58.6 OTL maintenance 10.1 9.9 9.4 6.0 7.6 OTL & support services 1.2 1.5 1.0 0.7 4.9 Total revenue 37.0 42.6 49.3 54.0 71.1 Cost
Slide 40: Key operating metrics
CONFIDENTIAL DRAFT 2208 11AM Key operating metrics NOT FOR RELEASE For personal use only $ million Pro forma 1H15 PF 2H15 PF 1H16 PF 2H16 PF 1H17 Revenue Growth n/a 15.1% 15.7% 9.5% 31.7% On Demand Revenue % 69.5% 73.2% 78.9% 87.6% 82.4% Recurring Revenue % 96.8% 96.5% 98.0% 98.7% 93.1% Gross profit
Slide 41: Reconciliation from statutory to pro forma income statement
CONFIDENTIAL DRAFT 2208 11AM Reconciliation from statutory to pro forma income statement NOT FOR RELEASE For personal use only $ million Note(1) 1H15 2H15 1H16 2H16 Statutory revenue 32.3 37.7 48.6 54.2 Net impact of acquisitions 1 4.7 4.9 0.7 (0.2) Pro forma revenue 37.0 42.6 49.3 54.0 Statutory NP
Slide 42: Notes to pro forma adjustments
CONFIDENTIAL DRAFT 2208 11AM Notes to pro forma adjustments NOT FOR RELEASE For personal use only Summary of pro forma adjustments 1. Represents the pro forma impact of acquisitions as presented in the Prospectus and adjustments for FY16 to remove the impact of CCN for May and June 2016. 2. Represen
Slide 43: Reconciliation of statutory operating cash flow to statutory cash flow
CONFIDENTIAL DRAFT 2208 11AM Reconciliation of statutory operating cash flow to statutory cash flow NOT FOR RELEASE For personal use only • Payments for intangibles include 6 months to December Full Year $9.3m capitalised developed, $ million 1H16 1H17 FY16 $0.3m relating to Softship and EBITDA 12.1
Slide 44: Employees
Employees CONFIDENTIAL DRAFT 2208 11AM NOT FORactivities ~650 employees; over half our workforce focused on product development RELEASE For personal use only Growth in full time employees Employees by function Employees by region (# of full time employees) (%, as at 31 Dec 2016) (%, as at 31 Dec 201
Slide 45: Overview of revenue licensing models, drivers and platform
Overview of revenue licensing models, drivers CONFIDENTIAL and platform DRAFT 2208 11AM NOT FOR RELEASE Customers in transition to “On-Demand”, ultimately move to transaction-based licensing For personal use only (1) Represents percentage of 1H17 total revenue (2) Mainly comprises additional service
Slide 46: Organic growth accelerated by acquisitions
Organic growth accelerated by acquisitions CONFIDENTIAL DRAFT 2208 11AM NOT Small, valuable acquisitions further our growth across geographies andFOR RELEASE adjacencies For personal use only We buy into market positions that would take years to build, integrate swiftly, drive value across platform
Slide 47: Outlook - industry dynamics
Outlook - industry dynamics CONFIDENTIAL DRAFT 2208 11AM Industry pain points drive an exponential shift to CargoWise OneNOT FOR RELEASE For personal use only 3PL industry dynamics vs Impact of Our leading global logistics software and low propensity to switch out of dynamic for open-access, usage-d
Slide 48: For personal use only
CONFIDENTIAL DRAFT 2208 11AM NOT FOR RELEASE For personal use only 47