Slide 1: 2003 Results Presentation
Contidentia www. TechnologyOneCorp.com 2003 Results Presentation Technology One Intelligent eBusiness Solutions September Adrian_DiMarco@TechnologyOneCorp.com Executive Chairman 2003
Slide 2: 2003 Full Year Results
g 2003 Full Year Results # Significant Achievements m The Operating Environment mw Our Strategy for 2004 and 2005 g Outlook Technology Intelligent One eBusiness
Slide 3: 2003 Results
2003 Results m= Revenues up slightly (up 2%) = Record R&D expenditure (up 14%) =» 19% of Revenue spent on R&D s All R&D continued to be fully expensed as incurred = Profit down (down 20%) = Well within guidance of down 25% set in November 2002 w Dividend of 2.5cs fully franked (up 25%) » Yield of 5.
Slide 4: 2002 Actual v 2003 Actual
2002 Actual v 2003 Actual ual Detail” Increase $ (000), % Revenue wosonicnei we Rh Expenses (inet 3rd ‘party costs) (11%) Net interest Income “ Profit Before Tax NPAT Pre ‘Amoriti Ni AT ‘Reporte EPS cents Reported Dps cents - standa Adjusted Return on Shareholder's Equity _ Cash on Hand Net Operatin
Slide 5: 2002 Actual v 2003 Actual: Significant Issues
2002 Actual v 2003 Actual @ Significant Issues = Revenue growth slowed because a very difficult market = Committed to a substantial investment program 12 months ago - Increased R&D — Increased staff levels in our regional service network - Inthe 2003 year we were hit with 100% of these costs — last
Slide 6: Actions Taken
Actions Taken m Adjusted our costs in line with market conditions a Minimal new staff planned for this year unless revenue generating « Existing staff focus =» Complete existing R&D projects — realise value = Focus on our next generation products = People are our major asset — maintain a positive cu
Slide 7: 2002 Actual v 2003 Actual
2002 Actual v 2003 Actual m Balance sheet strong = Cash on hand : $17.29m = Debt/Equity : 3% m Operating cashflow : $9.6m (vs NPAT $7.0m) m= Transparency of results — all R&D fully expensed Technology Intelligent One eBusiness
Slide 8: Competitor Revenue Growth
Competitor Revenue Growth Competitor Revenue Comparisons (1999 as base) 200.0% we » —@ Oracle —# Peoplesoft o g 150.0% lest) < SAP (est) re 100.0% sg —¢— Technology — 50.0% One & —e®- J D Edwards 2 2 0.0% (est) Fs ° -@-GEAC 6 . se 50.0% / + Epicor (est) “100.0% fi Sun Systems 2000 2001 2002 2003 (es
Slide 9: R&D Growth Comparisons
RandD Growth Comparisons Competitor R&D Comparisons (1999 as base) 300.0% —@ Oracle 250.0% +- Peoplesoft o 2 , (est) = 200.0% SAP (est) o 150.0% 3 % Technology & 100.0% One é -—e@J D Edwards % 50.0% (est) g 0.0% —@ GEAC = 50.0% — Epicor (est) 100.0% «if Sun Systems 2000 2001 2002 2003 Year Technolog
Slide 10: Capital Management Program
Capital Management Program gw Dividend increased 25% m Share buy back completed = Bought 19.679m shares @ 25cs for $4.92m Technology Intelligent One eBusiness U
Slide 11: Significant Achievements
Significant Achievements Last 12 Months m Regional Restructure now fully implemented = Regional managers appointed in each region with regional ownership and with P&L responsibility = Theme: “Act Locally, Think Globally” mw Product Restructure now fully implemented = Product Managers appointed with
Slide 12: Significant Achievements
Significant Achievements Last 12 Months m 46 new clients added = Sirong performance in a difficult market mg Finance One Suite continues to perform strongly « Almost all deals involved Finance One Technology Intelligent One eBusiness
Slide 13: New Contracts By Sector
New Contracts By Sector mg Local Government = Baulkham Hills Council = City of Burnside = City of Port Adelaide/Enfield a City of Stirling = Queanbeyan City Council = Wollongong City Council « Ashburton District Council (NZ) = Marlborough District Council (NZ) « Waikato District Council (NZ) Technol
Slide 14: New Contracts By Sector
New Contracts By Sector # International » Ashburton District Council (NZ) =» DDSB (M) Sdn Mhd (Malaysia) = Harbourside (NZ) =» Mandom (Malaysia) = Marlborough District Council (NZ) = Orbit Software Tech Sdn Bhd (Malaysia) = Otago Polytechnic (NZ) = PowerNet Limited (NZ) » Southland Building Society
Slide 15: New Contracts By Sector
New Contracts By Sector = Corporate = Ausiralian Ethical Investment = Australian Wine and Brandy Corporation = BP-Valley Fuel Pty Ltd = Insearch « MGM Grand Darwin « Minda Incorporated « Prime Infrastructure = Red Rooster = Salvation Army (Southern Region) = Southern Cross Broadcasting Technology In
Slide 16: New Contracts By Sector
New Contracts By Sector mg State/Federal Government = Australian Inland Water = Darwin Port Corporation = Department Tourism, Parks, Heritage and The Arts = Enertrade =» EPA Victoria « Family Court of Australia « Public Trustee Queensland Technology Intelligent One eBusiness
Slide 17: New Contracts By Sector
New Contracts By Sector m Project Services = Access Queensland = EPA Queensland (two projects) = Financial Line Brisbane Pty Ltd a Legal Aid Queensland « NSW Police « Office of State Revenue Queensland = State Records South Australia = Tasmanian Office of Post Compulsory Education and Training = Tel
Slide 18: Significant Achievements
Significant Achievements Last 12 Months m Strategic wins = Replaced SAP at Wollongong City Council = Replaced Oracle at Environment Protection Agency (Vic) Technology Intelligent One eBusiness
Slide 19: Significant Achievements
Significant Achievements Last 12 Months m People One gathers traction = 14 new contracts won in 2003: — Australian Ethical Investments — Australian Inland Energy — Baulkham Shire Council — City of Cockburn — City of Port Adelaide/Enfield — Darwin Port Authority — Enviromental Protection Victoria — I
Slide 20: Significant Achievements
Significant Achievements Last 12 Months g Proclaim One = Seven new contracts won: - Baulkham Hills Council - City of Burnside - City of Port Adelaide/Enfield — City of Stirling — Queanbeyan City Council ~ Ashburton District Council (NZ) ~ Marlborough District Council (NZ) « Leading supplier in Local
Slide 21: Significant Achievements
Significant Achievements Last 12 Months mw New Zealand strong performance = 10 new clients, including 3 in Local Government: ~ Ashburton District Council (NZ) ~ Harbourside (NZ) - Marlborough District Council (NZ) ~- Otago Polytechnic (NZ) — PowerNet Limited (NZ) - Southland Building Society (NZ) ~
Slide 22: Significant Achievements
Significant Achievements Last 12 Months # Continued penetration in Malaysia = 4new clients - Orbit Software Technologies Sdn Bhd ~ Teliti Computers Sdn Bhd — DDSB (M) Sdn Mhd - Mandom = Loss of approx $662,000 (business unit) = New strategy in place for 2004 ~ Reduce costs by employing locals ~ Diff
Slide 23: Significant Achievements
Significant Achievements Last 12 Months g Retail One — slow year in 2003 = One new contract won: - Salvation Army (Southern Region) = Strong Opportunities ahead, but we need to focus to capitalise on them — Specialist resources to be added to team to improve presentations and bring a focus on new bu
Slide 24: Significant Achievements
Significant Achievements Last 12 Months gm Student One — slow year in 2003 = One new contract won: ~ Insearch = Limited opportunities in the short-term = Appointing a national salesperson to focus on the University sector and improve win rate Technology Intelligent One eBusiness
Slide 25: Significant Achievements
Significant Achievements Last 12 Months m= Continuing success with Project Services = Nine new contracts won: - Access Queensland ~ EPA Queensland (two projects) ~- Financial Line Brisbane Pty Ltd - Legal Aid Queensland — NSW Police - Office of State Revenue Queensland ~- State Records South Austral
Slide 26: The Operating Environment
The Operating Environment = Competitive business environment m= Consolidation of ERP vendors m= Buyers revenge phenomenon mg Technological obsolescence Technology Intelligent One eBusiness
Slide 27: Competitive Business Environment
Competitive Business Environment = Boom / Bust cycle caused by Y2k mw Our competitors approach =» Reduced R&D expenditure = Reduced staff numbers = Aggressive pursuit of revenue = Acquisition strategy for growth mw Our approach is opposite to this! Technology Intelligent One eBusiness
Slide 28: Consolidation of ERP Vendors
Consolidation of ERP Vendors mg Gaining speed — more to come g No evidence that this delivers benefits g Acquisition of overlapping products not on TNE agenda mw Our focus is on our own products and partnerships Technology Intelligent One eBusiness
Slide 29: Buyers Revenge
Buyers Revenge a Future growth will be driven by customers replacing their existing ERP systems m Future buyers will be very literate and demanding m= The name of the game: “Who will keep their customers and who will lose them” m= Our business model is unique m Our business model is far superior to
Slide 30: Technological Obsolescence
Technological Obsolescence # Built into all products — ours and our competitors = Oracle — Oracle Forms =» Sap —-ABAP = Microsoft - VB = PeopleSoft - HTML « TNE-VB m The challenge « Inertia = Choosing the right platform = The migration of customers to the new product mw Our new product — the opportu
Slide 31: Our Strategy for 2004 and 2005
Our Strategy for 2004 and 2005 m= Product Leadership m Focus and Commitment mg Partnership w “Act Locally — Think Globally” m= Customer Satisfaction wg “Great Software Every Day, Every Way” Technology Intelligent One eBusiness
Slide 32: Product Leadership
Product Leadership m No longer just about functionality! mw Next generation product line is the key = Connected Intelligence series of products = Finance One: Cl = Retail One: Cl = People One: Ci = Proclaim One: Cl = Student One: Cl Technology Intelligent One eBusiness
Slide 33: Product Leadership
Product Leadership = Our Connected Intelligence (Ci) series is designed to substantially raise the bar in the ERP market, by combining for the first time the advantages of client server and the internet to create a new generation of applications that will support the move by organisations to a more
Slide 34: Product Leadership
Product Leadership m The new user interface is key to selling our Produc Leadership positioning! m= A new way to develop software — it will have a profound effect on our development teams and our future product leadership! = Product to address a devolved business model Technology Intelligent One eBu
Slide 35: Product Leadership
Product Leadership g Release dates « Finance One: Ci — R1 completed mid 2004 = Retail One: Cl — R1 completed mid 2005 = People One: Cl — R1 completed mid 2005 = Proclaim One: Ci —-— R1 completed mid/late 2005 = Student One: Cl — R1 completed late 2005 Technology Intelligent One eBusiness
Slide 36: Focus and Commitment
Focus and Commitment m No new products on the drawing board for the next few years m= Finance One « Finance One: Cl is the major focus for the next 12 months = Focus is on Simplification and Ease of Use = Some additional functionality # Retail One = Focus on functionality in the next 12 months « Ret
Slide 37: Focus and Commitment
Focus and Commitment m People One = Focus on functionality in the next 12 months - Human Resources in particular = People One: Cl — R1 completed mid 2005 = Short term — sell as ‘add on’ to Finance One = Medium term — best of breed Payroll/HR - will need a stronger and specialist sales focus m@ Procl
Slide 38: Focus and Commitment
Focus and Commitment g Student One = Focus on functionality in the next 18 months = Improve sales — specialist salesperson to be added focused on sales of Student One as #1 priority « Student One: Ci — R1 completed late 2005 mg Improve sales and presales — appointment of practice manager m= Improve
Slide 39: Partnerships
Partnerships mw We cannot develop everything ourselves = Financial constraints = Domain knowledge and creativity = Need to focus on what we have already in the next few years mw Partnerships so far: « Infoplan — Assets (financial) « Chameleon — Business One « Crystal Decisions — Crystal = EMS — Wasp
Slide 40: Partnerships
Partnerships mw Partnerships under consideration: = CRM - Ascent = Professional Services Automation — Time Disciple mw We need to get better and do more of these = Additional resources to review and integrate partner products Technology Intelligent One eBusiness 40
Slide 41: Act Locally — Think Globally
Act Locally — Think Globally a A devolved business working within a corporate framework and strategy = Our devolved business model is about OWNERSHIP at the regions! = needs to go to the next stage this year! mw Each region is unique. Tailoring the delivery of our products and services on a regional
Slide 42: Act Locally — Think Globally
Act Locally — Think Globally m Profit and Loss responsibility at regional level to ensure our resources are effectively used m= Regional managers have a substantial incentive based on Profit of their regions Technology Intelligent One eBusiness
Slide 43: Customer Satisfaction
Customer Satisfaction = The name of the game for ERP vendors is: “Who will keep their customers and who will lose them’ = “Buyer's revenge” = Oversold, over-budget, over-charged = Microsoft « Use distributors to sell and implement s Plan to substantially increase the number of distributors m Oracle,
Slide 44: Customer Satisfaction
Customer Satisfaction mw Our business model is far superior to our competitors = We develop, we market, we sell, we implement and we support = We own the customer relationship m Our focus — to become a customer centric company = Regionalisation =» Account management « R&D restructure = Customer surv
Slide 45: Great Software Every Day, Every Way
Great Software Every Day, Every Way g Innovation and Speed in our product teams mw OWNERSHIP is the key again m= Product business managers = Focus on product direction = Published Release Plans « Full transparency on R&D! m@ Support center and development combined = Incremental improvements to the p
Slide 46: Great Software Every Day, Every Way
Great Software Every Day, Every Way m Profit and Loss responsibility at the product level to ensure resources are effectively used m Product managers have a substantial incentive based on Profit of their regions = Must still fit into an overall corporate framework and strategy Technology Intelligent
Slide 47: Difficult market conditions to continue in 2004 year
g Difficult market conditions to continue in 2004 year w Start of improving market conditions expected in 2005 year Technology Intelligent One eBusiness
Slide 48: 2003 Results Presentation
Contidentia www. TechnologyOneCorp.com 2003 Results Presentation Technology One Intelligent eBusiness Solutions September Adrian_DiMarco@TechnologyOneCorp.com Executive Chairman 2003