Xero Limited · ASX:XRO
Xero — Shareholder Meeting (2010)
26 slides from Xero's shareholder meeting presentation, 2010
Slide 1: Annual Meeting 2010
xelro Annual Meeting 2010
Slide 2: Re-appointment of Directors
Re-appointment of Directors
Slide 3: Phil Norman
Phil Norman • 30 years ICT industry experience • Focus on working with high growth companies expanding internationally • VC and investment banking experience • Extensive governance experience
Slide 4: Sam Morgan
Sam Morgan • TradeMe founder, former CEO • Professional investor. Including Sonar6.com, Visfleet, Pacific Fibre • Director Fairfax Media, Tourism New Zealand, Gareth Morgan Investments, Visfleet, Sonar6
Slide 5: New Zealand Investor Presentation
New Zealand Investor Presentation
Slide 6: Market opportunity
Market opportunity “Helping American small business is part of our movement … small businesses are The internet enables a significant global market opportunity the backbone of our nation's economy…” – Barack Obama • Traditionally the small businesses market has been too fragmented to cost effectivel
Slide 7: Macro trends
Macro trends The existing economic environment and technology market trends are favourable for Xero’s proposition: • Economic climate • All businesses are likely to need a greater focus on cashflow. • There will be a greater focus on monthly management reports. Banks are increasingly asking for thes
Slide 8: Global platform
Global platform • Scalable global online platform in place. • Used by paying customers Rackspace Chicago Xero’s data redundancy site in over 50 countries. Xero Wordpress blog Rackspace Dallas Xero’s central web server farm, SQL cluster, • Active partnerships with: SaaS app, help system & marketing R
Slide 9: Scaleable business platform
Scaleable business platform Xero Customer Zone Xero SaaS App Zone Access to key business dashboard info via mobile devices Customer help.xero.com blog.xero.com m.xero.com Wordpress Mobile Access • Xero has developed a highly scalable accounting Signup Xero’s main point of presence, Xero customers Ma
Slide 10: Customer acquisition record
Customer acquisition record Paying business customers have grown quickly to over 22,000. Total customers Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Quarter ended Source: Xero - current paying customers
Slide 11: Simple. Smart. Secure.
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Slide 12: Steps to achieve the longer term vision
Steps to achieve the longer term vision Xero is at the forefront of a market and technology transformation that could enable it to become the online accounting platform for a significant number of small businesses. Near term vision How will Xero win? Xero’s vision longer term is to be the accounting
Slide 13: Competitive landscape
Competitive landscape “Startups” “Nimble and funded” “Incumbents” There are surprisingly few startups in this space Netsuite (US) Sage (UK). Revenue: £1,439m as: • Medium business only • Pulled SageLive due to security issues • Difficult to fund the SaaS revenue ramp • • Limited to web marketing- not
Slide 14: Comparison of accounting platforms for the web
Comparison of accounting platforms for the web Xero’s accounting platform scores highly when measured against the other offerings Full Web 2.0 Accountant Global Mobile Netbook Mac and PC Accounting User API Available Version Version Version ready System Interface Xero MYOB LIve Acc
Slide 15: Web 2.0 approach changes the landscape
Web 2.0 approach changes the landscape Low cost solutions expanding up to the mid market Product Costs PARTNER PARTNER SOLUTION SOLUTION $1,000,000’s Large Traditional XERO $100,000’s desktop feature set Medium $10,000’s Small $1,000’s $100’s $100’s Micro
Slide 16: Single ledger efficiency
Single ledger efficiency For the For the Accounting Business Practice Shared Invoicing General ledger Management accounts data Debtors Creditors Annual accounts GST Fixed assets Expense claims Contacts
Slide 17: Cloud benefit to Accountants is compelling
Cloud benefit to Accountants is compelling The old way 2011 BUSINESS SOFTWARE INSTALLED SOFTWARE Shoebox and Excel Server hardware MYOB Networking infrastructure per user BankLink and Bank Connect Other SME systems Server operating system, virus Xero scanner, firewalls, etc PRACTICE SOFTWARE Server(
Slide 18: Xero data model transforms reporting
Xero data model transforms reporting Delivery Van - #2 Industry Comparison 6-2550 - Travel Mileage Petrol Costs Vehicle Fuel / Mileage Expenses EXP.VEH 240/01 - Motor Vehicle Expenses Annual Report Unit Van - Travel Dave’s Truck Company accounts Reporting code Reports
Slide 19: Xero customer analysis
Xero customer analysis Previous accounting system used by Customers acquired from competitors Xero customers BankLink 4% Sage 8% Other Online 10% MYOB 35% First accounting system From competitor 47% 53% QuickBooks 23% Other Desktop 19% Source: Xero new users since 01 July 2009 Nearly half of Xero’s
Slide 20: Achieving scale and winning 100,000s of customers
Achieving scale and winning 100,000s of customers Phase Customer Activities Accountant Activities Channel Activities Achieved Direct customer sales, targeting 1. Product validation early adopters Awareness and identification of (100’s of customers) Gain customer insights for feature reference custom
Slide 21: Pricing
Pricing New Zealand Australia United Kingdom United States Personal (annual) $59 NZD $49 AUD £24 $34 USD Partner Ledgers Cashbook Business (monthly) Small $29 NZD $29 AUD £12 $19 USD Medium $49 NZD $49 AUD £19 $29 USD Large $64 NZD $64 AUD £24 $39 USD Extra Large Xero Personal is for a year subscrip
Slide 22: Financial summary
Financial summary Summary Audited Financials (NZ$000’s) Income Statement 31 March 2010 31 March 2009 31 March 2008 • Xero recorded an EBIT loss of $9.5 Total number of customers 17,000 6,000 950 million for the 12 months to 31 March 2010 ahead of expectations. Total revenue 3,395 1,119 389 Total ope
Slide 23: Break even
Break even New Zealand direct sales Now United Kingdom direct sales October - December 2010 Australia direct sales January - March 2011 Overall costs 2nd half calendar 2011
Slide 24: Large global market
Large global market Market share scenarios Implied Customers Sanity check Country Potential Market (SME's) Low % High % Low % High % Competitor Customers New Zealand 322,000 10% 20% 32,200 64,400 MYOB 700,000 Australia 1,200,000 5% 10% 60,000 120,000 Sage 5,800,000 United Kingdom 4,300,000 1% 2% 43,
Slide 25: Summary
Summary Strong product offering • The product is now proven and is used by some 20,000+ customers. • Xero has been widely acknowledged as having a leading online product internationally. • Xero is now scaling the business internationally. Strong business model and capability • Xero’s management team
Slide 26: Customer social media comments
One mention of #xero and four 1 Too many low-value SaaS ISVs out there recommendations in 30 mins! Right. We have finally seen MYOB LiveAccounts beta, first impression is that it still needs a lot of work to compare to how easy Xero is to use in accounting for SME-SMB space. Xero Sold! Thanks @Total