Slide 1: 2019 Full Year Results Presentation
For personal use only Appen Limited 2019 Full Year Results Presentation 25th February 2020
Slide 2: Forward looking statements disclaimer
For personal use only The forward looking statements included in these materials involve subjective judgement and analysis and are subject to significant uncertainties, risks, contingencies, many of which are outside the control of, and are unknown to Appen Limited. In particular, they speak only as
Slide 3: High performance, strong organic growth
High performance Strong organic growth1 For personal use only Revenue $536.0M +47% Organic $498.1M +37% Speech & Image $67.7M1 +32% Revenue Relevance $430.0M1 +37% Figure Eight (ARR) $33.7M2 56% CAGR3 Organic Underlying $101.0m +42% Underlying $107.3M +51% EBITDA EBITDA Organic Underlying 18.8% vs.
Slide 4: Speech and Image and Relevance results
Speech and Image maintaining Strong Relevance growth with high revenue growth margin expansion For personal use only 67.7 430.0 51.4 312.8 Revenue Revenue 21.4 EBITDA EBITDA 19.3 110.5 66.7 FY2018 FY2019 FY2018 FY2019 (A$M) (A$M) § Revenue of $67.7M1 up 32% § Revenue of $430.0M1 up 37% § EBITDA up 1
Slide 5: Figure Eight rebounds to high growth
Figure Eight rebounds to high growth For personal use only ARR1 37.9 27,000 25,000 23,000 US$M Revenue 21,000 EBITDA 19,000 17,000 (6.3) 15,000 FY2018 FY2019 Q1 2019 Q2 2019 Q3 2019 Q4 2019 (A$M) § Year-end ARR US$24.95M, AU$33.7M2 § Path to profitability ahead of plan4 § Strong 2H – new customer an
Slide 6: Figure Eight Integration
Figure Eight Integration For personal use only § Shifting to a unified product set § Single sales team in place § Refreshing messaging and visual identity § Consolidating crowds, moving work to Appen crowds and facilities § Combining teams and culture § Integrating back office functions and infrastr
Slide 7: High-value, long-term customer relationships
High-value, long-term customer relationships For personal use only 535.5 § Appen’s existing customers underpin revenue growth with increased demand for existing and new projects 364.2 § Strong and enduring customer relationships § Substantial investment in Sales and Marketing in FY20 to lay foundati
Slide 8: Government
Government For personal use only § Known government AI budgets include $5BN in the US1 and £2.3BN in the UK2 § New US government customer win in 2019 § US government operations setup on-track § Hiring ongoing § Washington DC office leased and undergoing fitout for occupancy Q1 2020 1. Bloomberg Gove
Slide 9: China
China For personal use only Team in place: § 53 full time employees in Shanghai, including 30 customer facing1 § 154 data labelers in Wuxi facility1 Rapid pipeline expansion Modest FY20 targets Coronavirus update § All staff safe and accounted for § Customer project work ongoing § Expect negligible
Slide 10: Technology Update
Technology Update For personal use only Client workspace § Secure workspace solution for enhanced at-home data security § Workflows feature to automate complex annotation tasks Crowd Management § Automated applicant checking reduces time from up to 20 hours to a few minutes § Automated skills matchi
Slide 11: Appen enhances autonomous vehicle capabilities with LIDAR annotation solution
Appen enhances autonomous vehicle capabilities with LIDAR annotation solution For personal use only § Investments in autonomous § 3D point cloud visualisation and vehicles growing at 35% p.a.1 feature labelling § Multiple data types and large § ML-assisted labelling and data volumes required workflo
Slide 12: Environmental Social Governance
Environmental Social Governance For personal use only § Low environmental § Launched Crowd Code of § Adding US-based NED to footprint Ethics for fair treatment of increase independence and workers add market knowledge § Buying carbon credits to § Member of Global Impact offset 2019 travel § Phased i
Slide 13: Strong financial performance executed with efficiency
Strong financial performance executed with efficiency (A$M) For personal use only % change Revenue up 47% Results FY2019 FY2018 % change constant currency § Record growth in Speech & Image combined with continued strong growth in Relevance. Speech & Image 67.7 51.4 32% 24% § Growth largely driven by
Slide 14: Robust balance sheet
Robust balance sheet (A$M) For personal use only Dec-19 Dec-18 § Increase in receivables relates to increase in Cash 75.3 40.0 revenue volumes Receivables 116.3 60.5 § Non-current assets include Goodwill of $288.8M Other Current Assets 11.0 13.8 and identifiable intangible assets (IIA) of $109.8M in
Slide 15: Consistent cash conversion
Consistent cash conversion (A$M) For personal use only FY2019 FY2018 Cash balance increased by $35.3M Receipts 488.6 340.4 § Cash flow from operations increased by 47% and Payments and other (405.8) (275.0) remains strong Cash flow from operations before § Cash used to repay debt, pay dividends, fun
Slide 16: Currency tailwind benefit
Currency tailwind benefit (A$M) For personal use only Revenue (A$M) § Almost all revenue derived 35.3 136.4 536.0 offshore, most in USD 364.3 § Meaningful currency tailwind impact in 2019 FY2018 Currency Neutral Currency Impact FY2019 Growth Underlying EBITDA (A$M) 7.8 101.0 21.9 71.3 FY2018 Currenc
Slide 17: Market trends
Market trends For personal use only Large volumes of quality data Data availability is a major Growth proxies underscore a continue to be critical for challenge2 growing demand for quality deployable AI1 training data3 Factors holding back AI adoption by companies’ stage of AI adoption AI Spend 28%
Slide 18: Appen strongly positioned to win
Appen strongly positioned to win For personal use only Proven dependable provider Global crowd Advanced technology § Founded in 1996 § Scale: >1m crowd members § Fully functional, highly scalable § 781 full-time staff worldwide1 platform § Diversity: >70k locations in § Global operations: 130 countr
Slide 19: Outlook
Outlook For personal use only § Appen continues to strengthen its position in a high growth market through investments in technology, sales & marketing, government markets and China § Investments in sales and marketing will soften 1H FY20 margins to mid teens. Margins expected to be high teens for t
Slide 20: Thank you
For personal use only Thank you