Slide 1: Appen Limited 2018 First Half Results Presentation
For personal use only Appen Limited 2018 First Half Results Presentation
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: Company snapshot
Company snapshot Appen maintains its high growth trajectory For personal use only Appen is a global leader in the development of 152.8 high-quality, human annotated datasets for machine learning and artificial intelligence Revenue Appen’s customers include the world’s leading 74.1 Underlying EBITDA
Slide 4: FY2018 1H highlights
FY2018 1H highlights (A$m) For personal use only Revenue Appen maintains its high growth trajectory 152.8 • Revenue up 106% to $152.8m, including 47% increase in organic revenue 74.1 • Underlying EBITDA of $25.6m up 100%, statutory EBITDA up 87%1 • EBITDA margins remain high but were impacted by the
Slide 5: Content Relevance leads divisional performance
Content Relevance leads divisional performance (A$m) Language Resources revenue up 4% Content Relevance revenue up 146%, For personal use only Margin expansion to 21.7% Language Resources Content Relevance 131.2 21.5 20.7 Revenue Revenue 53.3 EBITDA EBITDA 7.5 28.5 3.4 9.0 H1 FY2017 H1 FY2018 H1 FY2
Slide 6: Long term customer relationships
Long term customer relationships (A$m) For personal use only 166.6 2H 152.8 Substantial growth in major customers • Multiple projects within each customer lessens point dependency 110.9 • Working in all data formats at scale: text, 82.6 audio, image and video • Data quality and continual data refres
Slide 7: Leapforce integration
Leapforce integration For personal use only Performing strongly and integration on schedule • Leapforce acquisition added customers, expert people, seasoned crowd workers and scale • Leapforce performing strongly • Integrating Leapforce staff and corporate processes into Appen teams and systems • Im
Slide 8: New growth drivers
New growth drivers For personal use only Secure data annotation Multiple data formats • Growing demand due to data privacy and • Image and video data projects increasing commercial confidentiality • Individual customers requiring data in • Work in existing facilities growing multiple formats • New f
Slide 9: Growth trajectory continues
Growth trajectory continues (A$m) For personal use only % change Revenue up 106% on 1H 2017 H1 FY2018 H1 FY2017 % change constant currency Growth driven by Leapforce acquisition, and Statutory Results expansion of work with current customers Language Resources 21.5 20.7 4% 5% Outstanding Contact Rel
Slide 10: Strong Balance Sheet
Strong Balance Sheet (A$m) For personal use only Jun-18 Dec-17 Strong balance sheet Cash 23.6 24.0 Increase in receivables relates to increase in revenue volumes Receivables 55.7 42.9 Other Current Assets 1.2 1.2 Non-current assets include Goodwill of $67.8M and identifiable intangible assets of $34
Slide 11: Strong cash conversion
Strong cash conversion (A$m) For personal use only H1 FY2018 H1 FY2017 Cash balance reduced by $1.3m Receipts 142.6 71.9 from beginning of period (excluding FX impact) Payments and other (121.1) (59.2) Cash flow from operations increased by 69% and Cash flow from operations before remains strong 21.
Slide 12: Currency impact
Currency impact (A$m) Revenue For personal use only 81.7 3.1 152.8 Almost all revenue derived offshore, most in USD 74.1 Very low currency impact in 1H 2018 Underlying business performing well H1 FY2017 Currency Neutral Currency Impact H1 FY2018 Growth Underlying EBITDA 0.4 25.6 13.2 12.8 H1 FY2017
Slide 13: Strong tailwinds fuelling need for AI data
Strong tailwinds fuelling need for AI data For personal use only Vast market opportunity Large volumes of data required continually Travel “A supervised deep-learning algorithm will generally achieve acceptable performance with around 5,000 labelled High tech examples per category and will match or
Slide 14: Appen strongly positioned and executing well
Appen strongly positioned and executing well For personal use only Established Provider Global Presence Scalable Operations Founded in 1996 394 full time staff worldwide Delivered 500K hours of speech data Exeter High staff engagement, Seattle Detroit Beijing low turnover San Francisco Provided 3B+
Slide 15: Outlook
Outlook For personal use only Appen is strongly positioned and continues to execute well in a high growth market The company is investing in engineering for scale and productivity as well as market growth YTD revenue plus orders in hand for delivery in 2018 ~$250m at end July 2018 Note that more pur
Slide 16: Thank you
For personal use only Thank you Mark Brayan, CEO mbryan@appen.com Kevin Levine, CFO klevine@appen.com Leanne Ralph, Company Secretary Leanne.Ralph@boardroomlimited.com.au appen.com