Trade Window Holdings Ltd. · NZX:TWL
Trade Window — FY2023 Earnings Presentation
33 slides from Trade Window's earnings presentation, May 2023
Slide 1: Investor presentation: Financial results for year ending 31 March 2023
Investor presentation Financial results for the year ending 31 March 2023
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Trade Window Holdings Limited (TradeWindow). All information is current at the date of this presentation, unless stated otherwise. All currency amounts are in NZ dollars unless stated otherwise. Information in this presentation: • is for general info
Slide 3: Agenda
Agenda Financial results overview 4 Market context & opportunity 8 Progress against our strategy 13 Financial overview 21 Outlook and summary 28 AJ Smith Andrew Balgarnie Deidre Campbell CEO & Director Chief Strategy Officer Chief Financial Officer Investor presentation 3
Slide 4: FY23: Trading revenue +27%, demand increasing
FY23: Trading revenue +27%, demand increasing • 27% increase in trading revenue from organic growth and prior acquisitions. • Trading revenue and total income within revised guidance ranges ($4.8-$5.1m and $5.5-$5.8m respectively). • Cube (TradeWindow’s global trade platform) delivered a 341% revenu
Slide 5: Key performance indicators
Key performance indicators $4.9m $5.2m $1,289 $595 Trading revenue Annual ARPC (Shippers) ARPC (Freight Recurring Forwarders) Revenue Up 27% (Total Revenue Up 39% (Cube $5.7m, up 18%) revenue up 341%) Up 9% Up 22% 46% 475 93% 56% % of expenses Customer R&D and Gross Margin Customers retention rate C
Slide 6: Financial summary FY23
Financial summary FY23 Trading revenue up 27%, demand increasing Revenue Costs Profit (Loss) Cash position Trading Other Total EBITDA1 Net profit Cash and Average revenue income income Total expenses (loss) after tax cash monthly cash equivalents outflow $5.9m $6.1m $5.7m $4.9m $4.9m $3.9m $1.0m $0.
Slide 7: FY24 funding profile and Heads of agreement with nChain
FY24 funding profile Heads of agreement with nChain Completion of capital raising Heads of agreement with nChain announced 31 March $5.4 million secured under capital raising nChain is a world leader in Web3 and enterprise block $11.1m strategic announced in January 2023 chain technology and the dev
Slide 8: Market context & opportunity
Market context & opportunity
Slide 9: Current global trade system
Current global trade system Exporters Bank Correspondent Bank Importers Bank Invoicing Platform Pre-Shipment Exporter Forwarder Inspector Export Port Carrier Import Port Importer Insurer Customs Customs Document Courier Document Courier Key: Financial Physical Information Investor presentation 9
Slide 10: The trade problem
The trade problem Current global trade system Global trade is constrained by siloed systems which rely on manual paper-based processes to orchestrate the exchange of data “ A single transaction often requires the interaction of more than 20 entities, and involves • • Cost – human intervention at eac
Slide 11: Digital trade market is evolving quickly
Digital trade market is evolving quickly MACROECONOMIC TRENDS • Supply chain disruption • Inflation and margin pressure • Global skills shortage CUSTOMER DEMAND TRENDS MARKET ENABLING TRENDS • Affordable prices • New free trade agreements: CPTPP, UK- • Product availability AU FTA, UK-NZ FTA • Enviro
Slide 12: Our opportunity
Our opportunity Well positioned as an early mover in the growing global supply chain management IT and food traceability markets $32B $27B 1 2 Global supply chain Global Food management IT market Traceability Market Market estimated to grow at a CAGR of Market estimated to grow at a CAGR of 14.3% to
Slide 13: Progress against our strategy
Progress against our strategy
Slide 14: Our strategy
Our strategy Strategic summary Trusted digital trade facilitation delivered through a global trade platform that connects our customers with their supply chain ecosystem Our vision End-to-end connectivity Our strategic priorities across global supply chains Land Grow Unify People Market penetration
Slide 15: Driving digital transformation
Driving digital transformation Strong customer relationships provides the opportunity to deliver additional value through new services starting with Cube and Assure+ • – start with the most acute pain point Complete and compliantly formatted trade documents Annualised ARPC growth – Shipper illustrat
Slide 16: High level product roadmap
High level product roadmap Lifting existing capability into our global trade platform; building maturity in infrastructure layers Global trade operational workflow Key: TradeWindow has Current functionality applications in all key areas Future functionality Infrastructure layers are maturing Investo
Slide 17: 475 organisations use our technology
475 organisations use our technology Some of the world’s most prolific agriculture exporters rely on our solutions to run business critical operations Dairy Meat Seafood Horticulture Other Note, logos don’t necessarily correspond to top customers. Investor presentation 17
Slide 18: Diversified customer base
Diversified customer base We have low customer concentration risk with no single customer contributing more than 5.5% Top 10 Customers % of trading revenue 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 1 2 3 4 5 6 7 8 9 10 Investor presentation 18
Slide 19: Revenue composition
Revenue composition Customer acquisition and trade volumes drive revenue growth 4% Transactional revenue 11%Service • TradeWindow generates transactional revenue each time a 6% revenue Installation customer either creates or shares a set of trade documents 6% revenue Subscription revenue • Customers
Slide 20: People & Culture
FTE numbers at May 2023 People & Culture FTE by Market FTE by Function 90 • Total FTE equivalent at May 2023 80 is 82, following cost reductions 70 15% 20% announced in March. (At 31 60 March 2023, FTE was 112) 50 40 • Reduction in FTE numbers were 17% focused mainly on taking a more 30 conservative
Slide 21: Financial overview
RQ TradeWindow Financial overview /\/\/\
Slide 22: Financial performance
Financial performance Trading revenue up 27% driven by organic growth and acquisitions Income Statement $000 FY23 FY22 Change $ Change % • Trading revenue up 27% to $4.9m, Trading revenue 4,920 3,878 1,042 27% excluding acquisition up 17% Other income 816 999 (183) -18% • Employee costs up 21%, not
Slide 23: Revenue by type and country
Revenue by type and country Organic growth underpinning revenue increase Revenue by type $000 FY23 FY22 Change % • Organic trading revenue growth of 17% Transactional 2,332 1,622 44% delivered - driven by sales growth, particularly Cube, to existing customers Subscription 2,078 1,596 30% • Other inc
Slide 24: Average revenue per customer (per month)
Average revenue per customer (per month) ARPC up for both customer segments Freight FY23 FY22 Change % • Increased monthly Average Revenue Per Subscriber1 customer nos. period end 325 320 2% Customer (ARPC) for Freight – up 22% reflects higher value of new customers. Ave Subscriber customer nos. 325
Slide 25: Operating expenses / staff numbers
Operating expenses / staff numbers Reflect planned investments for FY23 Employee benefits expense $000 FY23 FY22 Change $ Change % • Employee costs for FY23 do not reflect cost Cost of goods sold 1,991 1,485 506 34% reductions initiated in March 2023. Refer slide Research & Development 5,590 4,591 9
Slide 26: Balance sheet
Balance sheet $000s FY23 FY22 Change $ Change % Movements Current Assets 8,022 7,852 170 2% Non-Current Assets 14,509 8,663 5,846 67% Acquired Software & Goodwill net of amortisation Total Assets 22,531 16,515 6,016 36% Current Liabilities 4,730 2,966 1,764 59% Acquisition deferred consideration $1.
Slide 27: Cashflow
Cashflow Balance date cash and cash equivalents of $6.1m $000s FY23 FY22 Change $ Change % • Balance date cash and cash equivalents of Operating Activities $6.1m, anticipated to be sufficient funding for Cash Received from Customers 4,857 4,040 817 20% FY24. Cash Paid to Suppliers and Employees (16,
Slide 28: Outlook and summary
RQ TradeWindow Outlook and summary /\/\/\
Slide 29: FY23 outlook
FY23 outlook • TradeWindow is well positioned to maximise opportunities in digital trade and food traceability. We anticipate that demand will be driven by exporters, importers, and freight forwarders seeking cost efficiencies from technology and needing to meet new regulatory standards, especially
Slide 30: Summary
Summary • Committed to our mission of making global supply chains more productive, connected and visible and pleased with our strategic progress • Forecasting strong revenue growth for FY24, supported by high degrees of recurring revenue • Sufficient funding in place for FY24, with continued focus o
Slide 31: Q&A
RQ TradeWindow Q&A /\/\/\
Slide 32: Appendix
RQ TradeWindow Appendix /\/\/\
Slide 33: Glossary
Glossary Annualised Recurring Revenue (ARR) Customs Broker Subscriber customers Annual recurring revenue is calculated using A Customs Broker is a licenced individual who acts as Subscriber customers are those that license and/or subscription revenue for March 2023 and the monthly an intermediary fo