Slide 1: 2021 Full Year Results
2021 Full Year Results Update image and content Ended 30 September 2021 1 Disclosure Statement TechnologyOne Ltd Full Year Presentation – 23 November 2021 TechnologyOne Ltd (ASX: TNE) today conducted a series of presentations relating to its 2021 Full Year results. These slides have been lodged with
Slide 2: Agenda
Agenda • Highlights • Results • Significant Achievements • Outlook for Next Year • Long Term Outlook 3 Transforming business, making life simple TechnologyOne Global SaaS ERP Solution Enabling a digital revolution Any device, Anywhere, Anytime Continuing strong demand 4 2
Slide 3: Organic SaaS growth powers our business
Organic SaaS growth powers our business SaaS ARR $192.3m up 43% 5 637 Enterprise customers on TechnologyOne SaaS up 18% from 539 enterprise customers pcp 6 3
Slide 4: Record Profit
We are on track to hit $500m+ ARR by FY26 Total ARR in FY21 was $257.5m, this will be an additional $242.5m ARR by FY26. 7 Record Profit Net Profit Before Tax of $97.8m up 19% Top End of Guidance 12 consecutive years of Record Profit Guidance provided was Net Profit Before Tax of $94.3m to $98.6m 8
Slide 5: Dividend up 8%
SaaS continues to drive our growth Outlook for FY22 is strong Discussed later in more detail 9 Dividend up 8% Full year dividend increased Half 1 3.82 cps, Dividend last ten years up 10% (60% franked1) Up 8% Half 2 10.09 cps, Up 8% up 7% (60% franked1) Up 8% Up 8% Total 13.91 cps, up 8% Up 8% Up 8%
Slide 6: End of On Premise October 2024
End of On Premise October 2024 11 Our future state business expected to grow at 15%+ pa 70 $ . m $500m + 60 $ . m Total Revenue 50 $ . m $311m Revenue - SaaS & Continuing Business up 15%+ pa Revenue - SaaS & Continuing 40 $ . m $294m Business up 9% on prior yr 30 $ . m 20 $ . m 10 $ . m $75m $43m $2
Slide 7: FY21 Results Summary
Agenda • Highlights • Results • Significant Achievements • Outlook for Next Year • Long Term Outlook 13 FY21 Results Summary FY21 FY20 VAR VAR #039;000 #039;000 #039;000 % Revenue – SaaS & Continuing Business 293,553 269,773 23,779 9% In line with expectations. W e expect this to grow to ~15% pa in the next
Slide 8: Profit margin to improve to 35%+
Profit margin to improve to 35%+ in the next few years Driven by the significant FY21 Profit Before Tax Margin was 31% economies of scale from our single instance global SaaS ERP 31% solution 28% ü Cost reductions reflect 27% the efficiencies from the transition to SaaS 22% 21% ü Rebalancing investm
Slide 9: We will double in size every 5 years / Balance Sheet
We will double in size every 5 years FY21 NPAT was $72.7m Up 15% on FY20 NPAT $72.7m $62.9m $58.5m $51.0m $44.5m $41.3m $35.8m $31.0m $27.0m $23.6m FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 the last six years compound growth in NPAT has been 14% per annum. This graph shows previously reporte
Slide 10: Cash Flow
FY21 FY20 Var Var Cash Flow #039;000 #039;000 #039;000 % Profit Before Tax 97,843 82,470 15,373 19% Depreciation & Am ortisation 1 25,832 18,638 7,194 39% Cash Flow Generation of $63.9m, up $6.9m, up 12% Share based paym ents and other non-cash item s 4,652 3,305 1,347 41% ü 88% of NPAT of $72.7m v Expectati
Slide 11: Results Analysis and Key Metrics, FY21
Results Analysis and Key Metrics, FY21 FY21 FY20 Var FY21 FY20 Var $’000 $’000 % $’000 $’000 % Revenue excl interest 311,787 298,666 4% EPS (cents) 22.64 19.75 15% Expenses (excl R&D, interest, D & A) 151,697 165,382 (8%) EBITDAR 160,090 133,283 20% Dividend (cents per share) EBITDAR Margin 51% 45%
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: Net Revenue Retention
99% customer retention Net Revenue Retention across all markets Strong expansion performance of 112% • Our Global SaaS ERP is very broad with 300+ modules • Significant opportunity in our existing customer base • Frictionless – open licence, all modules available on SaaS • Predictable, non-competiti
Slide 14: Quality of SaaS Revenue is very high
$145m ARR Runway moving on-premise to SaaS by FY26 20 1 % 28 $ . m 0 We expect SaaS ARR vs on-premise 90%+ 00 1 % 23 $ . m 0 $145m+ of on-premise SaaS to move to ARR from SaaS by FY26 0% 8 18 $ . m 0 Existing on- $192.3m premise $155.8m Customers $134.6m % of on-premise customers $110.2m 0% 6 13 $ .
Slide 15: Total ARR will increase to $500m+ by FY26
Total Annual Recurring Revenue will increase to $500m+ by FY26 Total ARR in FY21 was $257.5m, this will be an additional $242.5m ARR by FY26. 29 Significant investment for future growth R&D investment of Current Future $77.0m1 • $500m+ invested in R&D over the last 10 years to maintain our leadershi
Slide 16: DXP 2.0
DXP 2.0 Excellent feedback § LG DXP – First customer live on phase one § Student DXP – In research stage “My feedback is nothing but great! I see that there have been some thought that’s gone into make our work easier for both ourselves and our customers. Super excited. Can’t wait” City of Canning 3
Slide 17: Scientia Expands Enterprise Solution
x United Kingdom Significant investment for future growth Completing “customer first/remediation” phase, and focus is now on growth FY21 Achievements Outlook Pipeline is strong for FY22 UK profit of $1.6m v profit of $0.1m pcp, Many new logos and increasing ARR an improvement of 100%+ Consulting pro
Slide 18: People and Culture
People and Culture Recognized as Employer of Choice Award winning programs Town Regional Halls Days Strong culture of creativity and innovation 35 “TechnologyOne has more than exceeded my expectations through the Foundation and 1% Pledge focused on youth. Now as an employed graduate with TechnologyO
Slide 19: FY21 Summary
FY21 Summary Record profit and SaaS ARR of Total ARR of revenue, record SaaS $192.3m, up 43% $257.5m, up 16% ARR We will Profit before tax double Revenue for our SaaS and continuing business Profit Before Tax of margin of 31%, in size of $293.6m, up 9% $97.8m, up 19% up from 28% every 5 years Cash a
Slide 20: Outlook for 2022 Year
Outlook for 2022 Year Strong Profit growth to continue in 2022 • The markets we serve are resilient. TechnologyOne provides mission critical software with deep functionality for the markets we serve • Our Global SaaS ERP allows our customers to innovate and meet the Double in size every challenges a
Slide 21: 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 4
Slide 22: Drivers for long term growth
Drivers for long term growth Diversified revenue streams Provides mission critical solution – 'sticky customer base' Strong, very loyal 99%+ customer retention rate customer base 90%+ of our revenue is now recurring2 1 Based on Revenue TechnologyOne Global SaaS ERP solution 2 Total Revenue less cons
Slide 23: Appendix A: FY21 Consulting Profit of $15.6m
Appendixes • Appendix A – Consulting Profit • Appendix B – R&D Disciplined and Transparent • Appendix C – Long History of Strong Cash Flow Generation • Appendix D – Glossary 45 Appendix A: FY21 Consulting Profit of $15.6m up 14% Our AMS business for our existing customers is also moving to recurring
Slide 24: Appendix B: R&D, Disciplined and Transparent
x Appendix B: 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 S
Slide 25: Appendix B/C: R&D table and cash flow generation
Appendix B: R&D Disciplined & Transparent Software R&D Development - Percent Amortisation Amortisation Net Expense Investment Capitalised Capitalised Expense Period through P&L (#039;000) (#039;000) % (#039;000) Years (#039;000) FY19 60,083 32,145 53% 555 5 28,493 FY20 68,102 37,069 54% 6,103 5 37,136 FY21 77,0
Slide 26: Appendix D: Glossary
Appendix D: Glossary APAC Asia Pacific - Includes Australia, New Zealand, Malaysia and the South Pacific ARR Annual recurring revenue Cash Flow Generation Cash flow from Operating Cash Flow less capitalised development costs, capitalised commission costs and lease payments during the period Churn Lo